Up to July 2016, unilaterally, Ecuador has invested USD 654,226,558 in this NAMA to put into operation the following facilities (according to the OGE&EE Development Plan 2013-2017):

• Generation Facilities: 17 generating facilities with a combined nominal power capacity of 180,160 kW; i.e. 56% of the target set in the OGE&EE Development Plan 2013-2017.

• Distribution Facilities: 157.70 km of electric lines with capacities ranging from 13.8 kV to 69 kV; i.e. 30% of the target set in the OGE&EE Development Plan 2013-2017.

• Capture, Transportation, and Handling of Associated Gas Facilities:

- Phase 1 Gas Management System CPF.

- Gas Accumulation System (Lung Gas) CPF.

- Gas Management System EPF.

-Repowering Gas Management System Secoya.

- Interconnection Pipeline Sacha Norte-CIS and Limoncocha-CPF to increase the volume of gas in Block 15 CPF (pending commissioning).

- Gas Management System Limoncocha.

- Gas Management System Paka Sur.

- Pipeline Drago-CIS (however, this project was suspended for lack of funds).

Amount of financial sopport have been defined as the differential between the costs incurred by the Government of Ecuador detailed previously and the costs that are necessary for the project full implementation. For the OGE&EE NAMA, incremental cost includes investments for:

• Generation facilities with a combined nominal power capacity of 31.29 MW (USD 61.2 millions, including MSAG pilot initiative described in F.2.1).
• Distribution facilities: 519.7 km of electric lines with capacities ranging from 34.5 kV to 69 kV and Capture and Transportation Gas Facilities (USD 140 millions, including capacity building described in F.3.1).
• Transmission System of 138 kV for connecting the Upgraded Oil Industry Electric Grid (SEIP-E) to the National Grid (SNI) (USD 305 millions).

The mitigation activities come mainly from the implementation of electricity generation facilities using the associated gas.  However, since 2014, the OGE&EE Program has suffered budget cuts that have limited the implementation of the activities planned in the OGE&EE  Development Plan 2013-2017. For example, the budget for 2015 was USD 276,667,021; however, only USD 70,000,000 were available. It is worth mentioning that by the end of 2014, USD 50,000,000 out of these USD 70,000,000 were already secured through contractual instruments.

The OGE&EE Program has a financial mechanism used in large investments and it is based on: (i) the project's ability to generate cash flows to meet the repayment of loans; and (ii) contracts between various stakeholders to ensure the profitability of the project.

The main features of this mechanism are the following:

• An independent vehicle or legal entity is created as a financial instrument for the project, which in specialized literature is denominated “Special Purpose Vehicle (SPV).”

• The manager or project sponsor can provide most of the capital of the SPV, linking project funding to project management.

• The SPV holds contracts with various parties: manufacturers, suppliers, customers and financial institutions, among others.

• The SPV operates at a high level of debt to equity ratio, so that lenders have limited possibilities to claim in case of default.

The amount of capacity building support is needed to prepare key studies that are going to strength the capacity of our team, by the metodology "learning doing". This studies help us to structure to be part of a new Development Plan of the Program (an updated version of the OGE&EE Development Plan 2013 - 2017).  So, Petroamazonas must formulate the following studies:

• An expansion plan of the Local Grid (SEIP-E).

• A whole validation of the study related to the availability of associated gas.

• An energy management analysis for the SEIP-E (energy dispacht criteria, operative, administrative and commercial terms, etc.)

The baseline scenario is defined as the continuation of the operation of the existing oil and gas infrastructure without processing any recovered associated gas nor hydro-energy and without other significant changes. It is expected that without the project there will be 35.68 MtCO2e emissions for the period 2016 - 2025 from the current energy power generation.

The project emissions scenario is defined as the operation with the new oil and gas infrastructure capable of processing the associated gas and connection with hydro-energy from the national grid. It is expected that with the project there will be 21.56 MtCO2e emissions for the period 20126- 2025 from the new energy power generation.

Petroamazonas manages a Monitoring and Reporting System named as “Sistema de Gestión de Indicadores de Eficiencia Energética (SGI-EE)” that measures and report daily, among others the following key energy efficiency indicators: volume of diesel fuel savings, volume of fuel savings (in Barrel Oil Equivalent – BOE), volume of associated gas optimized for power generation, economic savings and CO₂ emissions reduction.  However, it is still pending to include in this system other indicators designed to measure and report the co-benefits of the Program such as: energy delivered to communities, noise level mitigation and short-lived climate pollutants reduction  (black carbon).

The SGI-EE includes a set of established goals which are compared to metered parameters to measure the performance of the OGE&EE Program.

(1) Co-Benefits:

Local stakeholders / communities:   i) Reliable power, ii) fiber optic connection, iii) noise mitigation, iv) job creation, v) infrastructure for lasting development.

As a sucesfull example in September 2014, the first power distribution project between an oil company and the Pañacocha community was implemented in order to supply energy for this community.  Under the business as usual scenario, Petroamazonas would not have invested in this project and the community would have had to cover its energy needs with stand alone diesel power generators.  Under the OGE&EE NAMA scenario, the following infraestructure was developed: (i) an 13.8 kV power line of 8.4 km. constructed under the Napo River; and, (ii) two power substations at Napo Norte (35 kV) and Yanahurco (15 kV).

Since the beginnig of operation, this project have delivered an average of 29,000 kWh per month generated with associated gas that was flared at the production facilities of Eden (EPF) in Block 12 before the project.

Country: i) Decrease dependence on imported diesel, ii) increase oil revenues, iii) optimize usage of clean hydropower, iv) reduce capital requirements.

Oil Companies: i) Improve availability and reliability of power, ii) Reduce capital requirements (by increasing utilization factor of power generation facilities), iii) Reduce operating cost.

(2) Innovative Approach: 

Project Clustering:  Develop a cluster project approach beyond the traditional project boundaries integrating different oil blocks and operators with the objective to create a Win / Win solution for all. 

Barrel Oil Equivalent (BOE): Translate an energy efficiency / power program into increasing net barrel oil equivalent (BOE) volumes, thereby allowing it to compete against traditional oil enhancement projects.

Win / Win Approach:  By means of the program contribute to a lasting prosperous development of a mayor part of the country.  By means of this approach the local stakeholders perceive a direct benefit of the oil industry activities.

The OGE&EE Program is aligned with the national policy through the National Plan for Good Living 2013-2017 and the National Strategy for Climate Change 2012-2025. Firstly, the Program seeks sustainability in the Amazon Region by integrating an efficient energy system that promotes local development (cf. Objective 7: "Ensuring the rights of nature and promoting environmental and territorial sustainability"). Secondly, the construction of the SEIP-E ensures the energy sovereignty and energy efficiency as it integrates a greater participation of renewable energies through the interconnection with the SNI (cf. Objective 11: "Ensuring the sovereignty and efficiency of the strategic sectors for industrial and technological transformation"). For these reasons, this program strengthens the restructuring of the oil energy matrix by reducing diesel consumption, optimizing associated gas and interconnecting the SEIP-E to SNI to take advantage of the hydropower surplus (cf. Objective 10: "Promoting the transformation of the productive matrix").

The use of associated gas is also a pollution prevention action and a climate change mitigation measure because it reduces flaring and greenhouse gas emissions by eliminating the combustion of gases such as Carbon Dioxide (CO2) and Methane (CH4) (cf. Policy 7.7: "Promoting efficiency and the increased participation of sustainable renewable energies as a means of prevention against environmmental pollution". Policy 7.10: "Implementing mitigation and adaptation actions in relation to climate change to reduce the economic and environmental vulnerability, with emphasis on priority groups").