Climate Finance Innovation Facility

Programme Rationale and Innovation

The programme envisages facilitating lower income households with access to three alternative energy solutions comprising Solar Home Systems, Improved Cook Stoves and Biogas Digesters across rural areas of Pakistan. Tameer Microfinance bank, having the microfinance experience as it's core business and Winrock International as it's advisory partner, aim to disseminate the programme through establishing a new associate company called Micro Green Energy Company (MGEC). The lending strategy would be based on providing microfinance loans to the end users, where Tameer Bank would act as the lending arm of MGEC, refinance MGEC up to 90% of the product price, develop risk assessment and controlling strategy, provide MGEC with trainings on sales and loan collection techniques. MGEC would be dedicated to programme operation and marketing, providing installation and after sales & maintenance services, monthly loan collection services and basic product trainings to the households. Following the world acclaimed Grameen Shakti micro finance model, the project endeavors a business model to make it affordable to the rural households as well as self-sustainable by means of utilising carbon benefits. Technology trainings, staff capacity building, after sales services, strong credit risk management and continuous monitoring are identified as the key components of this programme.

CFIF Support

• Assessment of market opportunity and feasibility study.
• Design and development of energy lending products, reference manual and promotional materials for Renewable Energy lending.
• Development of business plan and support on regulatory arrangements for the creation of micro green organisation 'MGEC'.
• Capacity building of staffs through trainings on Renewable Energy technologies, financing, marketing, carbon benefits and institutional processes.
• Design and conduct baseline study and develop appropriate strategies for exploiting carbon benefits for the project.

Expected Results

• Installation of about 11,600 alternative energy products (10,000 improved cook stoves, 1,000 solar home systems and 600 biogas digesters) during the 1 year project period (2011-2012).
• Loan disbursement of USD 568,000 during 1 year project period which is expected to be increased at USD 4.6 million in the next 5 years.
• About 11,874 tons/annum CO2 emission reduction from the installed alternative energy products.
• Improvement of quality of life of the rural households by providing improved environment and promoting economic activities by mobilising and employing locals.

Programme Rationale and Innovation

The programme will design and implement two financial products: Green Home Credit Finance and Solar Off-grid Applications Credit Finance by ICICI Bank of India. ICICI, the second largest bank of India, has been quite instrumental since 1985 in supporting financing of innovative environmental friendly products besides it's wide range of banking services. The bank played a leading role in promoting the concept of Energy Efficiency, use of clean technologies and environment awareness across India. Leveraging the government subsidy schemes in clean energy technologies and using bank's strong presence in the environment financing programme, the proposed products aim to make clean energy products available at the out reach of specific target groups namely middle class and rural communities of India. The Green Homes, a concept that tends to make Energy Efficient buildings at the design stage, would be incorporated within the bank's current housing finance scheme in order to mobilise the targeted middle class groups by giving them the benefits of reduced energy consumption, less environmental pollution and increased savings opportunities, whereas solar equipment financing scheme would harness the potential of solar power in the off-grid areas by extending credit facilities to the rural communities and farmers by providing solar home lighting system and solar water pump in order to boost up the power scenario, agriculture and rural economy.   

CFIF Support

• Feasibility study and market analysis.
• Financial product design and risk analysis.
• Technical assistance on the solar energy applications and green building technology.
• Pilot programme monitoring and launching of the final product.
• Staff training and awareness campaign through seminars and marketing.

Expected Results

• Initially, the programme will be launched on pilot basis in a few states during 2011-2012 and will be replicated across India following successful implementation of the pilot.

Programme Rationale and Innovation

The programme intends to provide technical assistance to the Renewable Energy project of CARD MRI, a group of mutually reinforcing institutions having over 800 microfinance offices and 1.2 million microfinance beneficiaries across Philippines. With a view to improving the living standards of the underprivileged groups, the pilot project was launched in 2005 that already provided solar lighting systems in 600 households in the selected rural off-grid areas in collaboration with micro entrepreneurs and local suppliers. Having the strong rural banking experience, CARD MRI has now set the target to diversify and scale up the programme into two components: a. Scale up the Off-grid Solar Lighting System project in eight new provinces involving 1,500 qualified micro retailers and providing them credit facility worth USD 190,000 for reselling to the end users  b. Harness the potential of a new alternative energy product namely biogas technology for its existing microfinance clients through market assessment and business plan development. Within the framework of CFIF support, the programme would provide technical assistance for new product development and facilitate trainings to the staffs and retailers on solar lighting system marketing, after sales services, product technical issues in order to improve existing product value chain which would contribute to further up scaling and long term sustainability of the project.     

CFIF Support

• Capacity building and training of micro retailers and microfinance staffs.
• Product value chain development.
• ToT trainings on operation & maintenance and marketing of solar lighting products.
• Assessment of biogas market potential and business plan development.

Expected Results

• 50,000 households or 150,000 peoples to be equipped with Renewable Energy products by 2015.
• Disbursement of loan worth USD 190,000 in the first year with an portfolio increase of 15% to 20% per year.

Programme Rationale and Innovation

The programme intends to establish Energy Efficiency loan products for the micro SME entrepreneurs by the Taizhou Commercial Bank (TZB), a micro SME bank operating in Taizhou region of China. The lack of adequate environmental awareness, government legislation and shortage of capital lets the micro SMEs focuses on the immediate short term needs ignoring the economic and environmental benefits of the EE products. With a view to transforming business activities less harmful for the environment, the programme encourages practicing greener business among the micro SMEs and creates a sustainable combination of value and profit into the predominantly underserved SME market segment by offering them the benefits of effective usage of energy, cost reduction, opportunities in new investments and a greener business environment. TZB intends to achieve its goal of greener and less harmful-to-the-climate business practices by offering a combination of finance facilities, environmental consultation and awareness building among its 20,000 clients base. Frankfurt School of Finance & Management acts as the lead consultant in facilitating CFIF supports for the programme.

CFIF Support

• Detailed market study on EE lending opportunities.
• Product design and business planning.
• Staff trainings.
• Advisory services during roll out phase.

Expected Results

Based on the market study conducted by Frankfurt School of Finance & Management, the programme shows following expected results:

• Total potential demand of EE loans among existing TZB clients is estimated at USD 43 million.
• About 4,000  micro SME clients could opt for loans to implement EE projects.
• Design of medium and long term financial products for EE projects.

Programme Rationale and Innovation

The programme intends to provide access to Solar Home Systems (SHSs) through creating a viable micro credit financing mechanism for SHS lending in order to improve energy access and rural lives in Nepal. About 2.4 million households in Nepal do not have access to grid electricity and SHS is one of the available alternatives to provide household lighting in off-grid rural areas. However, access to micro credit is vital to reach households because poor households in rural areas cannot afford SHS even with existing government subsidies.

The programme approach would be to leverage commercial/development bank resources and government subsidies, increase affordability of the poor to purchase SHS on credit through channeling microfinance loans to the local MFIs, build capacities of local MFIs to deliver sustainable SHS financing and enhance rural livelihoods through locally based small and medium enterprises. Ace Development Bank Limited (ACE), a public limited company, acts as the lending arm of the programme, provides refinance facility to the local MFIs for SHS installation. The programme involves intermediately implementing partners that are responsible for managing the project at the local level and providing marketing and credit financing trainings to the local MFIs. Winrock International serves as the technical advisor to help implementing project activities through coordination with the implementing partners, local MFIs, rural communities, equipment suppliers as well as government and non government stakeholders. 

CFIF Support

• Technical Assistance to ACE on credit financing of SHS through LFI networks.
• Building capacities of LFIs to finance SHS as loan product.
• Assist ACE for energy financing and linkage with prospective new business.
• Enhance rural livelihoods by establishing rural enterprises using the energy generated.

Expected Results

• Facilitate installation of at least 3,500 SHSs through credit financing of at least 3,500 loans over a thirty month programme implementation period.
• Facilitate installation of additional 1,500 SHSs without programme support within two years following project completion.

Programme Rationale and Innovation

The programme aims to introduce Renewable Energy financing by facilitating better access to appropriate financial services for rural poor households of Cambodia in a social responsible manner. Within the framework of CFIF support, Frankfurt School of Finance & Management acted as the lead consultant in facilitating CFIF supports for the programme implementing agency, VisionFund (Cambodia) Ltd., a licensed microfinance institution operating in Cambodia.  FS executed a detailed feasibility study to determine the potential for financing Renewable Energy technologies for rural poor households. The study was carried based on internationally adopted practices, systematic assessment of respective business segments and surrounding market conditions by means of on-site visits, statistical review and structured surveys at the seventeen provinces of Cambodia. Field work consisted of meetings with market players to estimate the supply. In combination with demographic data and best practices in RE lending, the market analysis undertaken led to recommendations for forming the RE loan products and relevant operational guidelines directing VisionFund Cambodia's social mission about extending its operations to the underserved market segments.

CFIF Support

• Financial support and technical assistance for the feasibility study.
• Technical assistance to operation division for setting up product operation procedures.
• Development of technical and financial proposals for RE lending products.

Expected Results

Based on the market study conducted by FS, the programme shows following results:

• Solar technology has been identified as the most potential RE appliance in the poor rural households. 
• Potential partner supplier institutions have been identified.
• RE lending mechanisms and programme action plan have been recommended.
• A loan portfolio ranging USD 200,000-300,0000 for 1,000 solar technology systems in first three months of the programme implementation period has been envisaged.

Programme Rationale and Innovation

The programme intends to scale up the Eco Loan project of XacBank through development of carbon finance mechanism. The Eco Loan project was launched in 2009 to support local demand for Energy Efficient products namely ‘Energy Efficient Stove’ and ‘Highly Insulated Ger (Yurt) Covering’ at Ulaanbaatar, the capital of Mongolia which is known to be one of highly polluted cities in the world. Both products, Yurt covering and Energy Efficient stove, have 50% more energy saving potential over the traditional ones and potentially can tap substantial amount of carbon revenues for the programme.

The project implementing agency XacBank has identified carbon revenues to be the major instrument for further expansion and long term sustainability of the project. With this view, XacBank has partnered with MicroEnergy Credits (MEC) where MEC would deliver carbon emission reduction credits to XacBank for a fixed price and upon delivery and provide support for the development of carbon finance methodology. Within the framework of CFIF support, the programme intends to streamline all the procedural activities associated with the carbon finance methodology by bringing automation at the product selling centres in the process of data capture, approvals and reporting, improving individual customer monitoring system through GPS locators, establishing online Help Centre to improve customer sales service and minimising disbursement request processing time to accelerate carbon revenues into the project.

CFIF Support

• Development of carbon finance mechanism.
• Strengthen procedural development.
• Staff training on system automation and procedural activities.

Expected Results

• Financing of over 30,000 highly insulated Yurt coverings and 22,000 Energy Efficient stoves worth over USD 21 million during 2011-2013.
• Estimated CO2 emission reduction of 5 tons over five years from each installed product.

Programme Rationale and Innovation

The programme aims to introduce project finance lending mechanism in combination with carbon finance for financing construction of biogas units. In the prevailing energy crisis situation for the business enterprises of Nepal, there is seemingly a demand for installing biogas plants in some specific sectors namely in the poultry farms, diary farms, food or herb processing factories, etc. across the country. Realising this potential, the programme partners, The Bank of Kathmandu, a commercial bank operating in Nepal in 19 districts with a customer base of 150,000 and SNV Nepal, experienced in the biogas sector for the last 20 years, intend to extend their energy services for different industries that are willing to install biogas plants either for own consumption or sale of gas or electricity for income generation activities. The programme partners envisage that hundreds of such biogas projects can be implemented in Nepal provided that the entrepreneurs get technical support for design, estimate, construction supervision services and credit from the commercial banks.

By providing a financial platform, the proposed programme is expected to give a financial boost to the business enterprises to install large scale biogas units as well as provide annual repair and maintenance services of the installed units. The proposed project is packaged into 4 elements: 1) pilot emission reduction project for biogas units, 2) credit financing to the business enterprises as the unit owners, 3) insurance for major repair or maintenance or for full replacement and 4) technical support for design, standardisation, quality assurance, promotion, etc. The opportunity of tapping carbon finance revenues will be considered in the bank’s credit financing mechanism. The Bank of Kathmandu will identify bankable proposals for biogas units at enterprise level and provide project loans to the enterprises for the establishing biogas plants, whereas, SNV Nepal will bring it’s rich experiences in the biogas sector giving technical supports and developing carbon finance mechanisms for this project.

CFIF Support

• Undertake preliminary market research.
• Design a product prototype.
• Conduct pilot test to refine the prototype and determine product feasibility.
• Develop marketing strategy and internal systems.
• Assist in product development.

Expected Results

• The Bank will finance approximately 50-100 units of biogas units at enterprise level.
• Financed units will be bundled under a single Clean Development Mechanism (CDM) project.

Programme Rationale and Innovation

The programme aims to establish Impact Guarantee Fund (IGF) to catalyse carbon reduction investments by the social enterprises across Asia. Climate change is considered to be one of the major economic challenges for Asia. The Global Climate Risk Index 2011 places 6 of the 10 countries (Bangladesh, India, Indonesia, Malaysia, Philippines and Thailand) most affected by the extreme weather events in Asia. One of the most promising developments to combat against climate change is the emergence of wide verity of social enterprises that employ market oriented approaches to address environmental and social issues. However, lack of information and access to impact investment opportunities, high due diligence costs, the perceived riskiness of impact investments in Asia and lack of liquidity are the major setbacks for the growth of social enterprises across Asia. With support from Rockefeller Foundation and ADB, the programme partners Impact Investment Exchange Asia (IIX) and Impact Investment Shujog (Shujog) have conducted research on market needs in these countries as well as buy-side and sell-side market mapping exercises.  IIX, a Singapore based social enterprise, currently operates Impact Partners-Asia’s first socially and environmentally oriented private placement platform and is expected to  launch Impact Exchange in 2012, Asia’s first social and environmental stock exchange. IIX has over 100 social enterprises in its pipeline and has listed over USD 68 million in investment opportunities.

Under the proposed programme, IIX aims to establish Impact Guarantee Fund (IGF) which will guarantee a portion of selected debt investments in order to reduce the investment risks by the impact investors. The IGF is designed to facilitate impact investments in social enterprises focusing on specific sectors, such as low carbon infrastructure and deforestation reduction. The IGF will be able to guarantee investments during an investment period which is expected to run for three years from the time of the first closing in December 2011. IIX will structure and manage the guarantee fund ‘IGF’ to be sourced from the private sectors, whereas, Shujog with its institutional experiences on Impact Assessment will provide technical supports for the construction of IGF.

CFIF Support

• Create and implement IGF (identify guarantee eligibility and triggers).
• Structuring of IGF.
• Marketing and piloting of IGF (find guarantors, link to Impact Partners).

Expected Results

• IGF is expected to back investments in 20 social enterprises in six Asian countries.
• The pilot project will guarantee USD 50 million of debt investment instruments.
• Facilitate impact investing capital flow of 5 to 10 times the size of the fund.

Programme Rationale and Innovation

Bohai Bank supports SMEs development and green technology initiatives in China. The proposed programme aims to develop ESCO financing products and risk-sharing mechanisms for promoting energy efficiency (EE) measures in SMEs in Guangdong province. The programme will seek technical advice on technology feasibility and Energy Performance Contracting (EPC) from TUV Rheinland, a leading technical service provider worldwide and accredited 3rd party certification body. The public financial institution, Guangzhou Financial Guarantee Centre (GZFGC), will provide guarantee service for SMEs when enterprises apply for loans from the bank. Under this programme, it will also offer training to ESCOs on financial management and green credit application. Main customers of the program Include: 1) ESCOs who propose EPC based projects; 2) SMEs which host the projects; and 3) equipment leasing firms that supply equipment for the projects.

CFIF Support

• Review the main barriers for scaling up EPC activities through ESCOs in Guangdong province
• Develop risk appraisal and management manual for financing EPC projects in SMEs
• Conduct staff training on risk appraisal and management manual.
• Review feasibility of 10 EPC projects proposed by the external technical panel
• Carry out promotional activities for disseminating the proposed programme

Expected Results

• Support government’s current energy conservation effort through development of new techniques for the risk evaluation and management of EE project financing.
• Bohai Bank and GZFGC offering EE financing and risk-sharing services
• A minimum of 10 SMEs in Guangdong province succeeding in raising funding for EPC projects
• At least 10 EPC projects with a total green credit investment exceeding 25 million Euro serving as case studies for wider expansion
• At least 5 ESCOs benefit from additional EPC opportunities arising from the proposed financing mechanisms.
• 1 national level dissemination event will be held among the China Bohai Bank branches all over China.
• Annual energy saving of 60,000 tons of coal equivalent and annual carbon emission reduction of 159,600 t CO2eq. 

Programme Rationale and Innovation

The proposed programme aims to provide technical assistance and funding to the Microfinance Council of the Philippines (MCPI) that consists of non-government organizations, rural banks and cooperatives. Along with CFIF, the NGO Appui au Développement Autonome (ADA) is co-funding the programme. With technical assistance funding from CFIF and ADA, the programme aims to support MCPI to provide clean energy products for micro and small businesses in underserved regions of the Philippines through MFI-based energy loans. MEI (MicroEnergy International) acts as the technical service provider for the MCPI. The programme will be replication of a successful programme ‘Energy Inclusion Initiative (EII)’ initiated by ADA and MEI in Latin America in 2010. During the preparation phase, the programme will identify the potential MFIs and short-list two MFIs for initial engagement in the pilot phase. The programme will be technology-neutral with the selection of commercially available technologies made by each MFI and expected to include solar home systems (SHS), solar water pumping, biogas technology, solar dryers as well as other clean energy products. 

CFIF Support

• Provide capacity building to the MCPI
• Support selected MFIs in the incorporation of energy products into their loan portfolios
• Market and technology assessment, including technology value chains
• Preparation of pilot phase, design of products; training of pilot MFI branches
• Mid-term evaluation of pilot the phase and outlook of the commercialization phase (methodology design, data collection and analysis, summary report, final workshop to present results).

Expected Results

CFIF support in the pilot phase will lead to scaling up the programme into the commercialization phase in the 2nd year. During the pilot phase following results are expected:

• MCPI is trained to train Filipino microfinance institutions on how to implement green loans for energy products
• 1-2 MFIs trained to implement energy loan products
• 1-2 energy equipments and 2-4 Energy Product Providers (EPPs) selected
• 2-4 EPPs’ capacities reinforced through technical assistance regarding quality control
• 1-2 pilot projects successfully initiated
• Around 100 energy loans for micro and small entrepreneurs disbursed
• Direct beneficiaries: around 100 micro and small business owners, through energy loans

Programme Rationale and Innovation

This programme aims to design a new financial product that will specifically address energy demand i.e. that will enhance the clean energy technology value chain while facilitating access to clean energy products. The programme implementing partner Chamroeun Microfinance limited was initially established by the French NGO Entrepreneurs du Monde in 2006 and has over 38,000 active clients in 12 provinces of Cambodia. The programme targets designing a clean energy loan product for small entrepreneurs from the non energy sector willing to use clean energy technologies for their business activities, as well as for small entrepreneurs from the energy sector willing to expand their business activities. At this stage, pre-identified technologies include: solar PV or devices such as solar pumps, bio digesters, LPG stoves and ovens. Direct customers of the product would be micro and small entrepreneurs such as food preparation, petty trade, handicraft, proximity services, agriculture and related transformation activities. The French NGO Entrepreneurs du Monde acts as the technical advisor for the Chamroeun Microfinance Ltd. 

CFIF Support

• Energy Needs and Market Assessment
• Loan product design
• Identification of operational partners
• Financial plan
• Creation of the loan product in the MIS and operations manual
• Training of Chamroeun’s credit officers
• Product launch
• Marketing strategy and tools

Expected Results

• During the pilot phase 70 energy loans disbursed in 2013:

-          15 entrepreneurs from the energy sector supported to develop their

        business through partners

-          55 entrepreneurs from non-energy sectors supported to invest in cleaner energy equipments.

• Replicate of the programme on a larger scale following successful roll-out of pilot phase.
• At the end of 2013, 200 small entrepreneurs have been sensitized to the use clean energy products during 20 promotional events. 

Programme Rationale and Innovation

The programme aims at fostering the use of environmental-friendly stoves (solar energy stoves, infrared biogas stoves) among rural people in Vietnam, starting first with TYM’s members. The programme aims to launch a loan scheme a loan savings scheme for its members for the sale of environmental-friendly stoves. It envisages a loan size of VND 2 million (or USD 94) for an individual household, VND 30-50 million (or USD 1,420 – USD 2,370) to the environmental-friendly stove traders for the start-up and expansion of their businesses. The whole programme is divided into three steps: 1. Preparatory step: includes Market Research; Product design and Linkage with renewable energy producer, 2. Pilot step: includes Training for staff, training for clients and piloting the loan product/ post-pilot adjustment and 3. Rolling-out step: includes Printing of leaflets and brochure for communication, TYM-wide rolling out and evaluation seminar.

Notably, TYM was founded in 1992 by the Vietnam Women’s Union in order to help implement the poverty alleviation programme of the Government and in 2010 became the first registered MFI in Vietnam.

CFIF Support

• Market research
• Product design
• Linkage with stove producers
• Piloting of loan product
• Training of staff and clients during pilot and roll-out phases
• Promotional activities and marketing of the loan product

Expected Results

• 230 households equipped with environment-friendly stoves during the CFIF support period
• More than 15 traders provided with start-up or extended loans during the CFIF support period.
• 385 staffs are trained on the new loan product and awareness campaign to over 100,000 clients.
• Disbursement of a total of VND 1,410 million (or USD 66 million) loans or the dissemination of environment-friendly stoves till the end of 5-year program
• Greenhouse gas emissions reductions, environmental protections and improved living conditions

Programme Rationale and Innovation

The objective of the programme is to reduce the increasingly detrimental effects of fossil fuel imports on the Kingdom of Tonga’s economy, through encouraging private sector investment in grid connected renewable energy. While donor agencies have actively funded grid‐connected solar and energy efficiency efforts, there has been little work done to involve the private sector. This has partly been due to technical barriers and partly due to a lack of finance for capital investment.

The Programme will replicate one component of a successfully implemented Energy Loans Program in Palau, i.e on-grid solar PV in residential and small businesses. The Programme will establish a new on-grid PV loans initiative for the inhabitants of Tonga that currently pay high electricity costs (USD 0.53/kWh) based on diesel fuels. Primary target is the 13,000 clients of the capital Nuku’alofa that consume below 200 kWh/month. The Programme aims to address technical barriers through capacity building of local contractors/suppliers and financial barriers through establishing a renewable energy programme in Tonga Development Bank. International Union for Conservation of Nature Oceania (IUCN) is acting as the technical advisor for the bank. Notably, IUCN currently implements a Pacific regional energy programme focused on building capacity in six participating countries on national frameworks for energy systems.

CFIF Support

• Capacity building for bank staff, local contractors, utility personnel, government officials
• Design, specification and tender preparation for grid-connected solar photovoltaic installations for residential and small commercial buildings
• Loan product development, training to bank staffs on financial modeling analysis as applied to long term energy system investments

Expected Results

• The Programme targets 13,000 clients in the capital with electricity consumption below 200 kWh/month
• Each grid connected PV system will have the potential to save 1,800kg CO2 per year.

Programme Rationale and Innovation

The programme aims to scale-up sales of its existing clean energy program by adopting a new operation model (i.e. cash layaway) within its operating area. Under the current programme, clean energy products are only available to current members of the implementing agency Evangelical Social Action Forum (ESAF). Due to ESAF’s lending structures and policies, it needs to develop a new business model which will help the bank to expand the clean energy initiative beyond its ESAF members. The proposed layaway programme will create a path to facilitate retail operations for Microfinance operations in India, whereby clean energy products are priced and made available via a channel that is trusted by households, and on a cash “layaway” basis. In the “cash and carry” method, cash is paid and a product is delivered either using a full payment and/or a partial payment setup (i.e. payments can be spread out over one, two, or three installments). The programme intends to appoint a Micro Energy Officer (MEO) at each branch who will be responsible for conducting after-sales follow-up and monitoring products, conducting awareness programmes and sales of products through its retail operation model. MicroEnergy Credits (MEC) will be ESAF’s technical advisor for the development of the layaway programme, helping unlock a new consumer base for clean energy products. ESAF has also signed a carbon purchase agreement with MEC to offset the carbon values under the programme.

CFIF Support

• Procedural Development
• Technical development of the cash and carry layout system
• Launch of the new cash and carry layout system
• Establishment of the mobile payment scale-up strategies

Expected Results

• At end of 2013, the program aims to distribute 36,000 clean energy products (stoves, solar lighting water purifiers) having a total carbon offset of 51,678 tons.
• At end of 2016, the program aims to distribute 307,286 clean energy products (stoves, solar lighting, water purifiers) having a total carbon offset of 1.17 million tons.
• Overall, it envisages of reaching 1.2 million people within 5 years under the new operation model.