Case Studies in Capacity Development in Power Sector with South-South Cooperation Components

Case Studies In Capacity Development in Power Sector With South-South Cooperation Components

Final Report

March 2011

Japan International Cooperation Agency (JICA)

Value Planning International, Inc.

Table of Contents

Acknowledgments I. Background and Objectives...... 1 II. Rise of South-South Cooperation as a Major Development Agenda ...... 3 III. The World Bank‘s Approach to South-South Cooperation ...... 6 1. WBI‘s Focus on Capacity Development ...... 6 2. Emphasis on South-South Knowledge Exchange ...... 8 IV. JICA‘s Approach to South-South Cooperation ...... 13 1. JICA‘s Approach to Capacity Development ...... 13 2. Japan‘s Definition and Policy on South-South Cooperation...... 14 3. Overview of JICA‘s SSC Support ...... 15 V. JICA‘s CD Approaches in the Electric Power Sector ...... 22 VI. Case Study on Power Sector Development in Lao PDR ...... 25 1. Background ...... 25 2. Government‘s Electric Power Policy ...... 26 3. Impressive Achievement and Challenges Ahead ...... 27 4. JICA‘s Approach to Electric Power Sector Development in Lao PDR ...... 33 5. Lessons Learned ...... 41 VII. Power Sector Development in Sub-Saharan Africa ...... 44 1. Power Crisis in Sub-Saharan Africa ...... 44 2. Case of Zambia ...... 48 VIII. Recommendations...... 53 1. Possibility for Knowledge Sharing between Lao PDR and Zambia ...... 53 2. Possibility for Collaboration between the World Bank and JICA ...... 54 3. Keys to Successful Triangular Cooperation (T-SSC) ...... 56 4. Further Studies ...... 62 References ...... 64 Appendix 1: The History of Electric Power Industry in Japan...... A1 Appendix 2: The History of Rural Electrification in the United States ...... A8 Appendix 3: Good Practices in JICA‘s SSC Support ...... A11

Acknowledgments

This report was prepared by Kenji Yamada (Value Planning International, Inc.) and comprising Kaoru Suzuki (Sr. Energy Specialist, the World Bank) and Marvin Fernandez (Program Officer, JICA U.S.A.). In addition to providing advice to the whole study, Kaoru Suzuki contributed to Chapter V (JICA‘s Capacity Development Approaches in Electric Power Sector) and Appendix 1 (History of Electric Power Industry in Japan). Marvin Fernandes was in charge of the analysis of JICA‘s good practices. This report was prepared under the guidance of Koji Jitsukawa. Production and organizational assistance was provided by Value Planning International, Inc.

We gratefully acknowledge the cooperation and generous help we received from officials from Ministry of Energy and Mines in Lao P.D.R. and from Rural Electrification Authority in Zambia and development agencies including JICA, the World Bank and UNDP. We especially thank JICA experts in Lao P.D.R. and Zambia for their providing valuable information. We also wish to thank the participants, including representatives from government, academia, and donors, for their comments and suggestions on the report, received during the seminar on ―JICA‘s SSC Projects in the Electric Power Sector‖ at the World Bank, and ―South-South Cooperation: The New Cornerstone for Capacity-Building Programs?‖ that was organized by JICA‘s U.S.A. held in March, 2011 in Washington, U.S.A.

I. Background and Objectives

One of the most significant phenomena in recent years is the rise of South-South cooperation (SSC) as a major topic in the development community. Since the Accra Agenda for Action (AAA) emphasized an approach to South-South cooperation as part of the aid effectiveness agenda, SSC started to be regarded in international debates as a way of fostering horizontal partnership and drawing on the full potential of developing countries as both recipients and providers of development cooperation. In the growing interest in South-South cooperation, a set of brokering mechanisms has been established at various levels that connect the desire to share with the desire to learn among developing countries.

At the global level, the World Bank established the South-South Experience Exchange Trust Fund (the South-South Facility) to meet immediate practical operational knowledge gaps by catalyzing the sharing of developing country experiences between practitioners.

JICA, on the other hand, has actively supported South-South cooperation since 1975 in order to promote the self-help efforts of developing countries and the prioritization of their own development strategies, which is one of the most important philosophies of Japan‘s official development assistance (ODA).

Despite recent high interest in the SSC, no definitive evidence-based answer is yet available for questions such as ―Is it really effective?‖ ―Can it overcome the weakness of traditional approach to capacity development?‖ or ―What role does South-South knowledge exchange play in upgrading capacity for development?‖

Major objectives of this study are to address these issues by analyzing JICA‘s approach to capacity development and SSC support for power sector development in developing countries as an example, and to explore the possibility for the knowledge exchange between Asia and Africa. To this end, Lao PDR and Zambia were selected as case study countries because they possess similar conditions: both are landlocked, sparsely populated low-income countries with immense hydropower potential. Over the past 15 years, Lao PDR has made a significant achievement in electric power sector development; therefore, it is expected that the experience of Lao PDR in this sector may contain many useful lessons to be learned by Zambia whose situation is similar to that in Lao PDR 15 years ago.

By conducting this case study, the possibility of collaboration between JICA and the World Bank in SSC is explored by examining how they can contribute more effectively to power sector development in Sub-Saharan Africa in order to provide stable,

1 sustainable, affordable, and reliable electricity utilizing capacity development with South-South cooperation components.

This report is composed of seven sections. Chapter 2 describes the recent rise of South-South cooperation as a major agenda in the development community. Chapter 3 deals with how the World Bank has responded to this global movement; its recent approach that focuses on capacity development and South-South knowledge exchange is introduced. Chapter 4 explains JICA‘s approach to South-South cooperation including its recent approach to capacity development, Japanese government‘s SSC policy, JICA‘s tools to support South-South cooperation, and its pattern of SSC support programs. From chapter 5, the focus shifts to electric power sector development. After explaining JICA‘s CD approaches in the electric power sector in Chapter 5, the power sector development in Lao PDR is tackled. The main focus here is why and how Lao PDR could make such an impressive achievement in this field. After introducing the government‘s policy and its achievement, and analyzing the characteristics of JICA‘s approach, lessons learned from Laos‘s experience in this field is examined. Chapter 7 discusses the recent power crisis in Sub-Saharan Africa and Zambia, and introduces the activities of JICA and the World Bank in Zambia‘s power sector. Based on the above analysis, the last chapter examines the possible areas for collaboration between Lao PDR and Zambia, and between the World Bank and JICA. Finally, the strengths and weaknesses of SSC support by traditional donors, called triangular cooperation (T-SSC)1, as well as their implications on project implementation are discussed, and areas for further study to promote South-South cooperation are suggested.

1 According to Guido Ashoff, T-SSC consists mainly of technical cooperation aimed at capacity building and takes place mostly in the same region where both the emerging donors and beneficiary countries are located. In many cases, T-SSC is based on previous cooperation between traditional and emerging donors, that is considered successful and worth transferring to third countries. In other cases, emerging donors have gained experience in specific areas, the transfer of which to third countries is supported by traditional donors. Thus, there are at least three actors involved in T-SSC projects/programs: traditional donors, emerging donors, and beneficiary countries. (See Guido Ashoff ―Triangular Cooperation: Opportunities, risks, and conditions for effectiveness‖ in Development Outreach, World Bank Institute, October 2010)

II. Rise of South-South Cooperation as a Major Development Agenda

One of the most significant phenomena in recent years is the rise of South-South cooperation (SSC) as a major agenda in the development community. In the aftermath of the global economic crisis, developing countries are acquiring more voice and influence. This has been seen for example in the G20 which offers opportunity to countries like Brazil, Indonesia and South Africa, to place the South-South agenda at the forefront of the global development debate.

For the past several years, a set of brokering mechanisms has been established at various levels which connect the desire to share with the desire to learn among developing countries. For example, the multi-donor South-South Exchange Trust Fund hosted at the World Bank has heard the demand, helped mobilize the supply, and provided the funding. The New Partnership for Africa‘s Development (NEPAD) through its e-Africa Commission played a key role in identifying and articulating the demand. This kind of multiple brokering mechanisms are emerging at the local, regional, and global levels2. On the other hand, in order to scale up South-South cooperation, a number of organizations started to take stock of what works and what doesn‘t, such as the United Nations Development Cooperation Forum, the DAC-Working Party on Aid Effectiveness, the Task Team on South-South Cooperation, and other regional and sub-regional platforms3.

This recent rise of South-South cooperation as a major development agenda was triggered by the High Level Forum (HLF) in Accra where some 1,800 representatives gathered in September 2008 to endorse the Accra Agenda for Action (AAA). The AAA reinforced the promise of better quality aid expressed three years earlier in the Paris Declaration, and emphasized an approach to South-South cooperation as part of the aid effectiveness agenda. What is important is that it was a member of the Accra developing countries caucus who took up the mandate to explore South-South cooperation for aid effectiveness, enshrined in Article 19 of the AAA4.

From late 2008 after this Forum, South-South cooperation started to be regarded by international debates as a way of fostering horizontal partnership and drawing on the full potential of developing countries, in particular middle-income countries, as both

2 ―South Meets South: Enriching the development menu‖, Enrique Maruri and Han Fraeters in Development Outreach: South-South Opportunity, World Bank Institute, October 2010, p6 3 Ibid, p6 4 ―The Bogota Spirit: South-South peers and partners at the practice-policy nexus‖, Niles-Sjard Schulz, Development Outreach: South-South Opportunity, WBI, Oct. 2010, p49

3 recipients and providers of development cooperation5.

In March 2009, Columbia proposed the creation of a specialized task team at the meeting of the Working Party on Aid Effectiveness hosted at the OECD-DAC. As a result, the Task Team on South-South cooperation (TT-SSC) was launched in September 2009 in Washington DC, in order to ensure that South-South cooperation and the aid effectiveness agenda would enrich and complement each other. With strong leadership in countries such as Ecuador, Egypt, Indonesia, Mexico, Peru, South Africa, and Thailand, the TT-SSC put out a call for case stories about South-South technical cooperation in the context of aid effectiveness in order to explore what works and what doesn‘t, and to classify and systematize the results. The three themes of the stories are6:

- To adapt the aid effectiveness principles to South-South technical cooperation; - To enrich the aid effectiveness agenda with the practice of South-South knowledge exchange; and - To identify complementarities between South-South and North-South cooperation.

At the regional level, the TT-SSC engaged with regional organizations including NEPAD, the Asian Development Bank, the Inter-American Development Bank, and the Organization of American States. At the global level, the World Bank Institute (WBI) helped connect practitioners, and a global core team of communication and policy advisors guided the process. Niles-Sjard Schulz evaluates the WBI approach as follows.

―This approach enabled practitioners around the world to access just-in-time support, engage in peer networks, formulate regional perspectives, and build an enabling environment to make the best use of the limited time that many leaders and champions in developing countries could commit to new initiatives7.‖

Need for Concrete Evidence As seen in the above section, South-South cooperation has been gaining momentum as an effective mode of development assistance, complementing the more traditional North-South approach. Now many people and organizations underline the importance of South-South cooperation for the benefits it offers both aid recipients and providers. However, it is still not known how SSC knowledge exchange can address one of development‘s most pressing challenges, namely weak institutional and human

5 Ibid, p49 6 Ibid. p49 7 Ibid, p50

4 resource capacities8.

With respect to the definition of capacity development, although several definitions exist, they all describe the same fundamental concept reflected in the OECD definition that capacity development is:

―The process by which individuals, groups and organizations, institutions and countries develop, enhance and organize their systems, resources and knowledge; all reflected in their abilities, individually and collectively, to perform functions, solve [development]problems and achieve objectives9.‖

As CD Alliance co-chair Talaat Abdel-Malek argues, capacity in a development context consists of a number of elements. It includes institutions, human resource skills and knowledge, the internal environment (operating systems, management and leadership qualities, performance appraisal and incentives, and so forth), and the external environment (legal, political, judicial, and technological). Since all of these elements shape any entity‘s performance, capacity development requires the adoption of a holistic approach that takes all the above elements into account10.

The weakness of the traditional approach of international technical assistance has been the lack of an integrated perspective on capacity development. Most funding and technical expertise tended to concentrate on the training of human resources, supplemented by ad hoc policy advice. However, experience shows that human resource training alone cannot deal with institutional capacity weaknesses11.

Can South-South cooperation overcome this weakness of the traditional approach to capacity development? What role does South-South knowledge exchange play in upgrading capacities for development? No definitive evidence-based answer is available for these questions12. A major objective of this case study is thus to address these issues by analyzing JICA‘s CD/SSC assistance for power sector development in Laos and to explore the possibility of sharing this experience with Sub-Saharan African countries. Before tackling this issue, however, the WBI and JICA‘s approach to capacity development and South-South cooperation should be introduced, because exploring the possibility for collaboration between the World Bank and JICA in this field is another objective of this case study.

8 ―South-South Knowledge Exchange as a Tool for Capacity Development‖, Talaat Abdel-Malek, in Development Outreach: South-South Opportunity, World Bank Institute, October 2010, p16 9 Ibid. p16-17 10 Ibid, p17 11 Ibid, p17 12 ―South-South Knowledge Exchange as a Tool for Capacity Development‖, Talaat Abdel-Malek, in Development Outreach: South-South Opportunity, World Bank Institute, October 2010, p17

III. The World Bank‘s Approach to South-South Cooperation

1. WBI‘s Focus on Capacity Development

For the WBI, capacity development is related to the capacity for change13. Capacity is regarded as ―the ability of individuals, organizations, state institutions, coalitions, and society itself to catalyze change to achieve their development objectives‖. Capacity development is therefore ―a country-led and country-owned process of change, requiring collective solutions from all segments of society - public, private, and civil.‖ The overarching objective of capacity development is ―to create capable and accountable states, a competitive and responsible private sector, and an engaged and empowered citizenry‖.

Since a country‘s lack of capacity to make development plans and carry them out is often seen to be the principal constraint to development, each year aid donors spend more than US$20 billion globally to address this issue. However, according to the WBI, CD programs typically emphasize training and technical assistance inputs and outputs, and lack strategic focus and effective approaches for addressing the broader institutional problems that constrain stakeholder action to achieve development goals. ―Limited attention is given to defining and measuring results, which in turn weakens local ownership, and ignores opportunities to learn about which initiatives actually support change and achieve results on the ground14.‖

From this perspective, the WBI defines its vision as ―a catalyst for action that leads to change, and to serve as a global connector of knowledge, learning, and innovation15‖. Its goal is to promote and facilitate ―knowledge exchange and innovation to advance results-oriented capacity development strategies and programs that are locally owned and aligned with national priorities 16 .‖ Effective capacity development should be transformational and must reach beyond training and technical assistance to inspire, empower, equip, and connect leaders and coalitions of state and non-state actors17.

In order to realize its vision and to achieve its goal, the WBI focuses on seven strategic priorities/thematic areas and four business lines, and developed the Capacity Development Results Framework (CDRF).

13 Collecting globally, catalyzing change locally, WBI 14 Focus on Capacity Development for Lasting Results, WBI 15 Collecting globally, catalyzing change locally, WBI 16 Focus on Capacity Development for Lasting Results, WBI 17 Collecting globally, catalyzing change locally, WBI

6 a) Strategic Priorities/Thematic Areas WBI‘s strategic priorities/thematic areas include:

(1) Fragile and conflict-affected states (2) Governance (3) Climate change (4) Growth and crisis (5) Health system (6) Public-private partnerships (7) Urban development b) Business Lines There are four business lines to deal with these seven thematic areas, and these are practitioner exchanges, innovation platforms, leadership and coalition-building, and structured learning.

(1) Practitioner exchanges - Promotes a catalytic approach to capacity development which galvanizes practitioners to action - Provides products and services to support South-South knowledge exchanges and learning – inspiring policymakers and development professionals by putting them in touch with successful development solutions from other parts of the world. - Include (a) South-South Country Visits, (b) the South-South Experience Exchange Trust Fund, and (c) the Global and Regional Development Debate Series (2) Innovation platforms - Scan for, incubate, and scale up transformative innovations; and - Include (a) online platform as well as innovation fairs and clinics, (b) development marketplace (3) Leadership and coalition-building - Offer seminars and advisory services on leadership development and coalition building for policy makers, and skills-building activities in several sectors and thematic areas; and - Offer programs to build the capacity of civil society organizations and to engage business and youth in taking collective action to uphold public sector accountability and to combat corruption. (4) Structured learning - Programs help develop skills and address capacity constraints in priority sectors or disciplines through courses, workshops, and conferences.

7 c) Capacity Development Result Framework In order to meet the urgent need for operational approaches to capacity development that yield measurable results, the WBI developed the Capacity Development Results Framework (CDRF) to guide the design, monitoring, and evaluation, and management of capacity development. The CDRF offers guidance on:

- Stakeholder leadership and ownership processes; - Diagnosis and understanding of institutional capacity; - Strategic focus and planning; - Design of collaborative knowledge, learning, and local approaches; - Indicators to support and manage capacity development; - Program monitoring, quality-at-entry, and ex post evaluation; and - Systematic learning about what works and does not work.

The WBI applies the CDRF in different contexts, such as World Bank projects and in country and regional institutions, and help practitioners apply, adapt, and customize it to their needs.

2. Emphasis on South-South Knowledge Exchange

The WBI views South-South cooperation as a tool for capacity development and defines it as an exchange of expertise and resources between governments, organizations, and individuals in developing nations18.

In order to promote South-South cooperation, the WBI adopts methodologies including (a) practitioner exchanges, (b) contributing to the aid effectiveness debate, and (c) capturing and facilitating South-South practice in bank operations. As for practitioner exchanges, the WBI uses tools such as (a) South-South country visits, (b) the South-South Experience Exchange Trust Fund and (c) the global and regional development debate series19.

18 Focus on South-South Knowledge Exchange, WBI 19 Ibid.

Table III-1 WBI‘s Approach to SSC

- This program focuses on sectors that are most relevant to Africa, such as agriculture and trade. 1) South-South - For example, decision-makers in various disciplines Country Visits from 18 East and Southern African countries visited

China to review its development experience and to identify relevant practices that might be applied to their own development challenges.

- This program has supported a broad range of 2) The South-South Practitioner activities in all the regions within the World Bank. Experience exchanges - The program is designed to respond quickly and Exchange Trust efficiently to the needs of developing countries. Fund

- This program brings together eminent academics, 3) The Global and finance ministers, and central bank governors to Regional discuss new approaches to development and Development economic strategies that enable countries to compete Debate Series in the global economy.

- WBI supports the TTSSC with knowledge, advice, and financing. Contributing to - Formed in Accra under the auspices of the Working the Aid Party on Aid Effectiveness, the TTSSC‘s mandate is Effectiveness to assess the various approaches to developing Debate capacity that will yield better results and increase country ownership.

- WBI has established a one-stop shop to help World Capturing and Bank staff design, develop, and deliver learning and Facilitating knowledge exchange events, strategies, and South-South programs. Practice in - WB also contributes to the South-South debate Bank through an active community of practitioners, and by Operations documenting cases and capturing lessons learned.

Source: Focus on South-South Knowledge Exchange (WBI), and Connecting globally, catalyzing change locally (WBI)

Among these tools to promote South-South cooperation, the most significant innovation is the South-South Facility, the details of which are shown in Table III-2.

Table III-2 Mechanism of the South-South Facility - Established on 11 October, 2008 - Supported by the contributing donors: China, Denmark, India, Mexico, the Netherlands, Spain, UK., Russia, and Colombia Overview - The donors had pledged US$10.3 million in support of the Facility which provides a simple and low cost mechanism for developing countries to share their knowledge and expertise in overcoming poverty. - To narrow immediate practical operational knowledge gaps by catalyzing the sharing of developing country experiences between practitioners. Objective - To document and disseminate lessons learned through an ―experiences exchange library‖. - As of 15 April, 2011, about 69 experience exchanges were cleared by the Results oversight committee of which 42 are under implementation. - The South-South Facility is a multi-donor facility that is administered by the World Bank. - The Oversight Committee  Establishes overall South-South Facility strategic direction and policy framework.  Reviews South-South Facility status.  Reviews policy or other issues referred to by the Regional Governance Structure South-South Coordinators and the South-South Facility Secretariat.  is chaired by the Vice President of World Bank Institute (WBI).  Has members who include a director from Concessional Finance and Global Partnership (CFP), Director of Operation from World Bank Institute (WBI), a representative from the Managing Director‘s Office and South-South coordinators from each of the six regions.  is supported by the WBI South-South Facility Secretariat. The secretariat is led by the Program manager in WBI. Eligible Countries - All World Bank Client countries are eligible. - Eligible South-South Facility proposals will be evaluated and selected according to the following criteria: 1) The proposal is directly linked to the development goals of the requesting country(ies) for which this just-in-time exchange is sought. 2) There is clear evidence of commitment to the development goals from the knowledge requesting country(ies) and the participating organizations. 3) The proposal has a clear and specific capacity development objective for each knowledge receiving country. 4) The target participant group is positioned to play an active role in Eligibility Criteria either influencing or bringing about the desired reforms in their respective countries to support achievement of the development goal. 5) The intermediate capacity outcomes are directly linked to advancement of the overall capacity development objective(s). 6) The knowledge providing country(ies) is well-positioned to provide the knowledge and experience for the recipient country(ies) to achieve their capacity development objectives. 7) The design of the exchange is likely to achieve the stated outcomes. 8) There is strong likelihood that this just-in-time exchange will be effective in contributing to the desired longer term impact. Source: Guidelines and Operating Procedures for Application, Approval and Execution of Grants of the Multi-Donor South-South Experience Exchange Trust Fund, The World Bank, January 2011

As of 15 April, 2011, 42 grants under the South-South Facility to about 64 beneficiary countries are in the pipeline.

TableIII-3 Examples of Grants under the South-South Facility Location Name Objective To transfer India’s knowledge and experience in building efficient and competitive dairy supply chains to Tanzania and Africa South-South Dairy Uganda.

The New Economy Skills for Africa For countries in Africa (Nigeria, Kenya, Tanzania, Program in Mozambique, Madagascar, Ghana and Rwanda) to explore

Information and options with India on how to address the deficits in ICT Communication and skills/human capacity in their countries. Technologies The objective is to establish a technical exchange program between Africa (Nigeria, Ghana, The Gambia, Liberia, Special Economic Cameroon, Senegal, Uganda, Zambia, Mozambique, Zones (SEZ), FDI and Madagascar, Lesotho, Mauritius) and Asia(China, Singapore Cluster Development and Malaysia) on SEZs and competitive clusters.

To support the Vietnam Ministry of Health learn from Thailand, Singapore and Hong Kong, about the development East Asia Developing Licensing of a licensing system for medical practitioners and best and System for Medical practice in registrating and granting licenses to medical Pacific Practitioners practitioners.

For the Vietnam Social Security (VSS) officials to learn from Azerbaijan, Armenia and Argentina on how they reformed East Social Security their old-age pensions and health insurance systems, with an Asia and Administration emphasis on the business processes, information management Pacific Reform systems and IT solutions.

To help officials in Tajikistan to learn from Lao PDR on how to: (a) address technical, economic, social and environmental issues emerging from a large hydro power project; (b) mobilize Europe foreign investment, public and private partnerships, and and Hydro-Power Export export trading arrangements; and (c) devise policy and Central Development financial management mechanisms to ensure that proceeds Asia from hydro-power export will benefit economic growth, employment, and poverty reduction in Tajikistan.

To help Tajikistan policymakers develop a better Migration: Challenges understanding of migration, remittances and migrant worker and Opportunities in issues in Moldova, Kazakhstan, Kyrgyz Republic, and Saudi ECA Arabia.

To improve nutritional security and safety net programs in Latin Haiti: Strengthening Haiti based on the experiences of Senegal, Madagascar, America Nutritional Security Honduras and Peru. and and Social Protection Caribbean

To help Haitian officials: (a) to analyze and distill key lessons from Cuba’s system of disaster preparedness and response, Disaster Management and (b) increase Haiti’s local-level capacity to mitigate and Lessons fro Cuba respond to natural disasters.

To strengthen the knowledge of social policy decision-makers and practitioners in Honduras and Belize on key elements of Latin Honduras and Belize effective design and implementation of Conditional Cash America Effective Cash Transfers through exchanges of lessons learned, good and Transfers practices and technical advice from Mexico, Jamaica and the Caribbean Dominican Republic.

To strengthen the knowledge of senior government officials on alternative options for social safety/protection in order to Middle make more informed policy decisions. The ultimate objective is East and Djibouti Conditional to improve social assistance to the poor in Djibouti through North Cash Transfers exchange of lessons learned with Yemen, Morocco, Jordan, Africa West Bank & Gaza, etc.

To: (a) learn from the Bangladesh Rural Electrification Board Yemen: Rural the challenges faced during their initial years of operation; Electrification and and (b) learn about the successful scaling up of the national Renewable Energy Solar Home System (SHS) program. Development

Source: South-South Experience Exchange Facility: Knowledge and Experience Exchange between policy makers and practitioners in developing countries, The World Bank, April 2009

IV. JICA‘s Approach to South-South Cooperation

1. JICA‘s Approach to Capacity Development

Following the UNDP definition of capacity development, JICA‘s Task Force on Aid Approach defines as ―the process by which individuals, organizations, institutions, and societies develop abilities (individually and collectively) to perform functions, solve problems, and set and achieve objectives‖. According to the Task Force, within the general CD framework, ―there are three layers – individual, organizational, and institutional or societal levels. These layers are not mutually exclusive, but rather each level is interconnected in a systemic way20.‖

Compared to the traditional approach to human development and nation building, the above definition of capacity development features the elements mentioned below21.

(1) Approach to Cooperation - Capacity development is different from the traditional thinking on development and cooperation based on the thought that ―We should simply transfer know-how (technology and knowledge) and provide infrastructure from outside since partner countries are just lacking particular skills and abilities. (2) Scope of cooperation - The process of sustainable development is made possible in partner countries, through an endogenous and holistic process that encompasses all levels including institutions, organizations, and individuals. (3) Level of cooperation - CD activities should not be carried out only at individual and organization levels without due consideration to policy regarding the institutional and social environment both at the sector and at the macro level. (4) Timeframe for cooperation - Capacity development takes time and requires steady and long-term effort.

Based on these conceptions of capacity development, the Task Force presents the following basic principles related to JICA projects22;

 Basic principle: Outside actors cannot directly develop capacities in a partner country;

20 Capacity Development Handbook for JICA Staff, Task Force on Aid Approach, JICA, March 2004, p7 21Ibid, p4 22Ibid, p8

 Ownership by the partner country is vital;  Joint efforts with the participation of stakeholders in the partner country are important;  A long-term commitment is required;  Creating a sustainable mechanism after project completion is important;  Systematic thinking and program approaches are required; and  A flexible approach responsive to the development needs and conditions of each country, issue and sector is important.

2. Japan‘s Definition and Policy on South-South Cooperation.

Based on the UNDP‘s definition of South-South cooperation, JICA defines it as follows:

―Mutual cooperation aimed at fostering self-sustaining development, involving deepening relations among developing countries while conducting technical and economic cooperation‖. Thematic Guidelines on South-South Cooperation, JICA, January 2005

According to JICA‘s report on the thematic guidelines, the concept of South-South cooperation has been broadly interpreted in Japan as a combination of ODA and other cooperation projects based on the resources of developing countries.

Japan‘s SSC Policy After World War II, Japan received foreign assistance for its reconstruction. When it began providing technical assistance as a donor for the Colombo Plan in 1954, Japan was still receiving large amounts of assistance. Much of Japan‘s work on rebuilding the country after World War II was conducted using assistance from overseas, including loans from the World Bank. Thus Japan's activity fit the pattern of what was later to be called "South-South cooperation.‖ Based on this experience, Japan came to recognize the efficacy of this approach, and its importance was emphasized in the ODA Charter and Medium-Term Policy on ODA.

―Japan will actively promote South-South cooperation in partnership with more advanced developing countries in Asia and other regions. Japan will also strengthen collaboration with regional cooperation frameworks, and will support region-wide cooperation that encompasses several countries.‖ ODA Charter adopted by the Cabinet in August 2003

―Japan will actively support South-South cooperation, as this is a form of international cooperation in which the developing countries are taking the

initiative‖. Medium-Term Policy on ODA, released in August 1999

In the light of the policy of the government of Japan, JICA's Mid-term Plan (covering period from October 2003 to March 2007) states:

"JICA shall enhance its support for South-South cooperation, which promotes Capacity Development in developing countries effectively and also leads to an increase in aid resources as well as promotion of intraregional cooperation.‖

Thus it can be said that the support to South-South cooperation is one of the fundamental philosophies of Japan‘s ODA.

3. Overview of JICA‘s SSC Support

Based on the above policies, the features of JICA‘s South-South cooperation include the use of Third-Country Training Programs and Third-Country Experts. Cooperation is also being implemented based on Partnership Programs which serve as a comprehensive framework through which the Japanese government and the governments of developing countries jointly support the efforts of other developing countries and regions. In addition, JICA makes use of the UNDP's Human Resources Development Fund and holds international conferences relating to South-South cooperation. The details of these programs are indicated in Table IV-1.

Table IV-1 Overview of JICA‘s Support for South-South Cooperation - This program began in 1975 - With assistance from donor countries and aid organizations, a developing country accepts trainees from other developing countries with shared characteristics in order to transfer development expertise and skills. Third Country Training - JICA generally implements this scheme through an organization in a 1 Program (TCTP) developing country to which it provided assistance in the past, thus transferring Japanese skills and expertise to trainees in other developing countries in a manner that has been adapted to meet local conditions. - In FY 2003, 151 third-country group training courses were conducted in 38 countries. - This program began in 1995. - With support from donor nations and aid organizations, experts from Third Country Expert developing countries are dispatched to other developing countries in 2 Dispatch order to transfer their expertise and skills. - In FY 2003, 113 experts from developing nations were dispatched to other developing nations, and half of them were from Latin America.

- This is a comprehensive framework through which the Japanese government and the government of developing countries (partner countries) agree to jointly support the efforts of other developing countries and regions. - Under this framework, JICA works jointly with its counterpart 3 Partnership Program organizations in partner countries to implement cooperation activities, such as the dispatch of experts, the acceptance of participants, and the hosting of seminars, in a comprehensive and methodical manner. - As of December 2004, Japan has concluded Partnership Programs with 12 countries: Thailand, Singapore, Egypt, Tunisia, Chile, Brazil, Argentina, the Philippines, Morocco, Mexico, Indonesia, and Jordan. 4 Hosting of International Conference on Support for SSC - On May 20 and 21, 1998, the Japanese Ministry of Foreign Affairs and JICA jointly held a conference in Nago-City, Okinawa, Japan to share SSC support experiences and know-how, clarify common issues in implementing support programs, and examine new systems and Conference on Support for 1) procedures related to SSC implementation. SSC - Representatives from 15 countries actively promoting SSC in Asia, Latin America, and Africa, namely Singapore, Malaysia, Indonesia, Thailand, the Philippines, South Korea, China, Turkey, Egypt, Kenya, Tunisia, Brazil, Mexico, Chile, and Argentina, participated in the conference. JICA/UNDP Joint - This symposium, consisting of a working-level workshop and an open Symposium “Developing forum, was held jointly by JICA and UNDP on October 4 and 5, 2001 in 2) Cooperation in the 21st Tokyo, Japan and attended by the representatives of SSC implementing Century – Supporting for agencies and liaison offices of developing countries and other donors. South-South Cooperation” - At the World Summit on Sustainable Development (WSSD) held in South Africa in September 2002, JICA held a workshop on Japan‘s Organizing a Workshop at support for SSC to introduce Japan‘s involvement in supporting SSC, as 3) WSSD well as case examples presented by the representatives of Thai, Tunisia, Chile, and Kenya where Japan‘s SSC support projects were being implemented. Source: Thematic Guidelines on South-South Cooperation, JICA, January 2005

Three Patterns of JICA‘s SSC Support In JICA‘s SSC support, three types of cooperation are identified, namely (1) two-step knowledge transfer, (2) joint cooperation with complementary parallel efforts, and (3) strengthening the regional/inter-regional partnerships. In type 1 (two-step knowledge transfer), knowledge is transferred from Japan to pivotal countries (emerging donors), and then those pivotal countries transfer localized knowledge to neighbors. JICA‘s third-country training and third-country expert are utilized to disseminate the outcome of JICA‘s cooperation, reproduce localized and applicable knowledge, as well as develop resource centers and capacity for aid management. In type 2 (joint cooperation with complementary parallel efforts), Japan and a pivotal country promote a joint project in which each actor transfers its knowledge based on the principle of comparative advantages. In type 3 (strengthening the regional/inter-regional partnerships), Japan supports pivotal countries in formulating a cooperation framework and strengthening networking among stakeholders (see Box1 and Box2).

Figure IV-1: Two-step Knowledge Transfer (Type 1)

Type 1: Two-step Knowledge Transfer (Spread out to new beneficiary)

2nd Step: Local knowledge transfer from Pivotal countries to neighbors Beneficiary country 1st Step: Knowledge transfer from Japan to Pivotal countries -Third-Country Training Pivotal -Third-Country Expert 1.Dissemination of Outcome country of JICA’s cooperation

2. Reproduction of localized and applicable knowledge

Japan 3. Development of resource centers and capacity for aid management

Source: JICA 9

Figure IV-2: Joint Cooperation with Complementary Parallel Efforts (Type 2)

Type 2: Joint Cooperation with Complementary Parallel Efforts

Beneficiary country

Joint Project

Comparative Advantages Japan Pivotal country

Source: JICA13

Figure IV-3: Strengthening of Regional/Inter-regional Partnership (Type 3)

Type 3: Strengthening the Regional/ Inter-regional Partnerships

Regional and Inter-Regional Cooperation

Beneficiary Pivotal Japan country country

Support to formulate Pivotal Beneficiary a cooperation framework country country and Pivotal Beneficiary country strengthen the networking country among stakeholders

Source: JICA20

Figure IV-4: Evolution of JICA‘s SSC Support

Summary: Evolution of JICA’s Support for SSC

Type 3: Strengthening the Regional /Inter-regional Partnerships

More commitment Type 2: Scale up of and management capacity Joint Cooperation with Development Impact of pivotal countries Complementary Parallel Efforts

Type 1: Two-step Knowledge Transfer (Spread out to new beneficiary) 26 Source: JICA

As SSC support moves from type 1 to type 3, the scale-up of development impact becomes larger, and more commitment and management capacity of pivotal countries are required.

Box 1: Strengthening Mathematics and Science Education – Western, Eastern and Southern Africa (SMASE-WECSA)

One of the common challenges many African countries face is the low quality of teaching and resultant poor performance in Mathematics and Science. In this context, JICA provided technical cooperation projects in order to improve teaching method through In-Service Education and Training (INSET). Based on a needs assessment, the project advised to shift its teaching method from knowledge/content-based approach to activity-focused teaching/learning, from teacher-centered teaching to student-focused/centered learning, and from theoretical or lecture method to experiment/research based method. The results are impressive.

1. 1998-2003: Kenya and Japan implemented a bilateral technical cooperation pilot project for capacity development in mathematics and science education for teachers and education managers (SMASSE). 2. 2003-2008: SMASSE was scaled up to a national program, reaching over 22,000 teachers and education managers. 3. 2002-2008: Kenyan personnel were trained in the Philippines and in Malaysia for capacity building for faster and more efficient transfer of skills. 4. 2001: A network for mathematics and science education (SMASE-WECSA) coordinated by SMASSE Kenya was formed to address common challenges in mathematics and science education in member countries. 5. 2002: Through SMASE-WECSA, JICA supports Teacher Training Programs, workshops and dispatch of Kenyan experts to SMASE-WECSA member countries (11 countries in 2001, 33 countries by Nov. 2009). As a result, over 1090 personnel from 27 beneficiary countries have been trained in this program. Many member countries set up sustainable INSET systems and CD programs for their teachers and education managers.

Box 2: JICA-ASEAN Regional Cooperation Meeting (JARCOM)

JARCOM was established in 2002 to address common challenges in ASEAN to narrow the socio-economic disparities among ASEAN countries which were seen as major obstacles to its integration. Thus, JARCOM was expected to mobilize ASEAN resources and formulate good SSC projects.

The outcomes of this initiative include: - The materialization of 86 training projects out of 153 proposals through JARCOM between 2004 and 2007. - Impressive increase in successful matching rates from 28 % to 78% during the same period.

But the most interesting part of this program is the following approach to formulating and managing SSC programs. 1. In-country consultation. As a mechanism/forum to discuss common development challenges in the region, at in-country consultations, project ideas were identified and prioritized within the framework of national development plans through inter-sectoral coordination. 2. Preannouncement of providers‘ aid policies. By encouraging approaches from both side, JARCOM sought ―better match‖ if not the best. 3. Needs-to-resource matching. Needs-to-resource matching was facilitated by the JARCOM Secretariat in Thailand. 4. Annual plenary meeting. After the needs-to-resource matching, annual plenary meeting was held in which only pre-screened projects with higher feasibility were submitted for direct stakeholder negotiation. 5. Joint monitoring. The status of project formulation was jointly monitored by all actors. 6. Information management system. A web-based information management system was established. The data base included project proposals and status-monitoring reports as well as up-dated information on regional training courses. 7. Cost-sharing. For project implementation, in addition to offering human resources, provider countries shared the training budgets at varying degrees (15-50%) depending on government capacities.

Up to this section, the recent trend of South-South cooperation as a major development agenda and the World Bank‘s response to this global movement are described. The outline of JICA‘s approach to SSC, which has actively supported SSC since 1970‘s is also summarized.

From the next section, the focus is on capacity development and South-South cooperation in the electric power sector, as well as on the major characteristics of JICA‘s CD approaches in this field. In order to explore the possibility of knowledge exchange between Asian and African countries, Lao PDR and Zambia were selected as case study countries. This is because the two countries possess similar characteristics: Both are landlocked, sparsely populated low-income countries with immense hydropower potential. Fifteen years ago, the electrification rate of Lao PDR was lower than present-day Zambia, around 15% and 20% respectively. Since Lao PDR has made significant stride in the electric power sector over the past 15 years (the electrification rate is over 70% in 2011), it is expected that the experience of Lao PDR in this sector may contain many useful lessons for Zambia whose present situation is similar to that of Lao PDR 15 years ago.

From this perspective, the major achievements of Lao PDR and JICA‘s assistance to the country‘s electric power sector development will be examined. Then the power crisis of Africa and Zambia will be analyzed in order to explore the possibility of South-South cooperation in power sector development between Lao PDR and African countries, especially Zambia.

V. JICA‘s CD Approaches in the Electric Power Sector

In the electric power sector, JICA addresses three major issues, namely (a) stable electric power supply, (b) electrification, and (c) electric power sector reform as shown in Figure V-1.

JICA has various kinds of ―entry points‖ for intervention, considering geographic, cultural, socio-economic, and technological aspects of each developing country. In JICA‘s assistance, there are six major areas regarding capacity development in the electric power sector, namely (a) policy and administration (ex. Department of Energy or DOE), (b) institution arrangements (ex. electric regulatory authority or ERA), (c) rural electrification promotion (ex. rural electrification authority or REA), (d) utility management (ex. state own enterprise or SOEs), (e) facility development and operation and maintenance (O&M) (ex. SOEs, independent power producer or IPPs, and cooperatives), and (f) demand side management (DSM) (ex. residential and public such as schools and clinics, commercial entities, and industries).

FigureV-1: Major areas on Capacity Development in Electric Power Sector Major areas on Capacity Development in Electric Power Sector Stable Electric Power Supply Electrifcation ①Policy & Administration ③RE Promotion – Advisor + PDP(M/P) – Policy Dialogue Electric Power DOE ②Institution Sector Reform – Regulation/ Tariff REA ERA ④Utility Management SOEs – Management ＋ Power Loss Cooperatives （D & T & G） IPP ⑤Facility Dev. & O&M Demand – Ｆ／Ｓ＋ Investment Household Public (School & Clinic) Commercial Industry – Rehabilitation ＋ Training ⑥DSM （O&M）

Source: JICA

In order to monitor CD results, various performance indicators for capacity development in the electric power sector can be used, such as (a) access to electricity, (b) electricity service delivery to customers, (c) utility management, and (d) policy and

22 regulation (Table V-1).

Table V-1: Performance Indicators for Capacity Development in the Electric Power Sector General Indicator Specific Indicators 1)Access to Electricity Electrification rate (Urban and Rural)(%) Electric Power Installed Capacity(MW) Electricity Power Generation Capacity (MWh) 2)Electricity Service Delivery to Customers Per capita Consumption(kWh/cap) Tariff (US$/kWh) Reliability (SAIFI & SAIDI)/ Power Outage Stability (Voltage & Frequency) 3)Utilities Management Power Loss (%) Cost Recovery Financial soundness(Profit, Debt, Equity) 4)Policy & regulation Power Development Plan/ Energy Plan Electrification program Electricity Law / Electric Power Technical standard Electric Power Statistic/ Training program

Considering a simple and essential question of ―which option of intervention is the most effective approach,‖ JICA‘s interventions in the electric power sector have historically evolved from traditional interventions (1990s) to recent integrated interventions (2000s), and to future innovative interventions (2010s), as follows:

1) Traditional interventions (1990s) ■Master plan support and O&M support (ex. Indonesia, Vietnam, Laos, Bhutan, Jordan etc.) - Advisor to DOE, M/P support, F/S support, Investment Loan, Technician training on O&M 2) Recent integrated interventions (2000s) ■Regulatory institution support (ex. Laos, Cambodia, Vietnam, Indonesia) - Electric Power Technical Standard formulation support, Management support, Qualification system and Trainer‘s Training

■ Electrification promotion (ex. Kiribati, Indonesia, Philippines, Bhutan, Malawi, Zambia) - Rural electrification M/P support, Business plan& Pilot project (Training system on O&M), Scale-up ■Demand side management (ex. Saudi Arabia, Indonesia, Viet Nam) - Peak shift/cut Options (Tariff incentives, high efficiency equipment (LED), Awareness raising

3) Future innovative interventions (2010s) ■Smart Community (ex. East Asia) - R&D support, element technology (Smart meter, batteries and interconnection with renewable energy)

Regarding the next important question of ―which level of intervention is the most effective approach,‖ JICA, in the case of intervention to the SOEs, has also several options, such as top management, middle management, and field technicians.

For example, to support electric power sector reform in Bangladesh, JICA implemented a project to establish a ―total quality management (TQM)23‖, by enhancing the bridges between ―top down with innovative solution‖ and ―bottom up with continuous improvement‖ through TQM.

Figure V-2: Bridges between Top and Field Personnel

Bridges between Top and Fields

Top down with innovative approach Top Management

Middle Management

FieldFiled TechnicianTechnicianss Bottom up with continuous improvement approach

(Source: JICA)

23 Since the 1980s, many Japanese private companies have been interested in TQM, especially, in the field of export-oriented industry such as electronics and vehicles. In their overseas branches or factories, training programs were conducted in order to maintain services and product quality through combining the top down and bottom up approaches such as (a) top management awareness, (b) middle management workshop, and (c) trainer‘s training for field technicians.

VI. Case Study on Power Sector Development in Lao PDR

1. Background

Lao PDR is a small, sparsely populated, landlocked country with extensive natural resources. Covering an area of 236,800 square km in the center of the dynamic Mekong region, Lao PDR shares borders with Thailand, Vietnam, China, Cambodia, and Myanmar. In the 1990‘s, some 60% of the population lived in two narrow ribbons of development, around which much of the economic activity was centered: along the Mekong river and in close proximity to the Thai border in the south, and in the Vientiane-Luang Prabang corridor in the north. Elsewhere, the country was characterized by difficult terrain, including rugged mountains and dense tropical jungle, meager infrastructure, and sparse population. With 19 inhabitants per square kilometer, Lao had the lowest population density in Southeast Asia. The rural population accounting for 85% of the total population was scattered among some 12,000 villages with an average of 300 people in each village; very often, distances between neighboring villages were as much as 20-30 kilo meters.

In the 1990‘s, Lao PDR was one of the world‘s poorest countries with an estimated population of 4.5 million and a per capita GNP of US$ 250 (1990). The primary electricity system was just beginning to develop in the country with electricity services provided on a regular and continuous basis only to the country‘s capital and to the major provincial capitals24. Only 14.61% of households had access to electricity and less than 8% of the villages were electrified.

With respect to supply and consumption, Lao PDR relied heavily on indigenous fuel wood as a source of primary energy. However, the country had substantial hydroelectric resources with a potential of over 18,000MW, of which only slightly more than 200 MW had been developed25. Total installed generating capacity was about 216 MW, consisting of 200 MW of hydropower-generation and the remainder of small diesel plants. Electricity consumption in Laos was among the lowest in Asia at about 60kWh per capita per annum (1993). Households, commerce and government accounted for as much as 85% of the total consumption of 267 GWh in 1993, with industry and agriculture representing the balance. Country-wide peak load was less than 70 MW. Thus, 15 years ago, power development in Laos was still in its infancy, whereas the potential for future growth in domestic demand as well as electricity export was very high26.

24 Rural Electrification Sector Review and Policy Formulation for Lao PDR, Draft Final Report, Norconsult , September 1995 25 Ibid, p2-1 26 Ibid, p2-3

2. Government‘s Electric Power Policy

The power sector policy of the Government of Lao PDR, which has not changed for the past decade, is shown in Box 3.

Box 3: Power Sector Policy in Lao PDR

 Maintain and expand affordable, reliable and sustainable electricity supply to

promote economic and social development;

 Tap the country‘s potentials aiming at promoting power generation for export to

provide revenues to meet Government development objectives with particular

emphasis on poverty eradication;

 Develop and enhance the legal and regulatory framework to facilitate power

sector development by either public or private parties;

 Gain capacity building through exotic technical know-how and expertise; and

 Ensure accountability and transparency of environmental and social impacts

and thereby achieve sustainable development.

With respect to rural electrification, the government aimed to provide electricity to 70% and 90% of households by 2010 and 2020, respectively.

Government Strategies for Rural Electrification Rural electrification has been one important factor in the Lao government‘s policy to improve the living conditions of people in remote areas, by contributing to increased food production, development of agro-industry and other types of industry, provision of lighting to rural people; and in general, by stimulating productive activities27. A basic strategy of the government has been to favor district headquarters to benefit from electricity first, and the surrounding rural areas next. In addition, the development of transmission and distribution network has called for the expansion of grid supplies to areas with proven demand for electricity, as a result of existing economic activities which have been driven by alternative energy sources. Finally, the connection of villages along the transmission lines might be warranted in instances where the expected load is sufficiently large and low-cost technology can be applied to supply consumers with lower power requirements in order to secure supply. A contribution by the village of at

27 This section of government strategies owes a lot to Rural Electrification Sector Review and Policy Formulation for Lao PDR, Draft Final Report, September 1995, Norconsult

26 least 30% of the specific costs of connecting the village was normally a prerequisite.

In terms of project selection, the provincial branches of Electricite du Laos (EDL) proposed rural electrification projects to the EDL main office. These are studied at headquarters which set the priorities and make the final decision as to where to electrify. A general approach and a set of selection guidelines for rural electrification have been agreed upon with international lending agencies and have been adopted by the government. The general principles of the guidelines include the following:

 The focus of planning should be on integral rural development, rather than on rural electrification alone;  Simultaneous provision of energy, infrastructure, credit, equipment, and production inputs is necessary to make economic development happen;  Rural electrification should be shown to be part of the least-cost way to satisfy an area‘s energy needs; and  Before a decision is made to electrify an area, a realistic demand forecast and a proper economic cost/benefit analysis need to be carried out.

3. Impressive Achievement and Challenges Ahead

(1) Achievement During the period from 1995 to 2009, Lao PDR made impressive achievements in electric power sector development. Some of these include the following:

 Ratio of electrified household increased from 15% to 69% (in 2011, over 70%), and that of electrified village from 8% to 58%;  Generation capacity increased from 1,085 gigawatt-hours (GWh) to 1,656 GWh;  Electric consumption increased from 337 GWh to 1,901 GWh.  Transmission and distribution loss reduced from 24.22% to 11.98%; and  Average domestic tariffs increased from 52 Kips/kWh to 547 Kips/kWh

Table VI-1: Districts, Villages and Households with Electricity (1995-2009) Total Electrified Year District Village Households Districts Villages Households 1995 136 11,456 754,265 45 33.09% 879 7.67% 110,229 14.61% 1996 136 11,456 754,265 58 42.65% 1,217 10.62% 142,283 18.86% 1997 141 11,456 754,265 82 58.16% 1,545 13.49% 196,998 26.12% 1998 141 11,456 754,265 102 72.34% 1,884 16.45% 226,004 29.96% 1999 141 11,058 768,142 109 77.30% 2,507 22.67% 254,610 33.15% 2000 142 11,263 818,668 119 83.80% 2,651 23.54% 293,495 35.85% 2001 142 11,231 866,277 116 81.69% 2,811 25.03% 322,845 37.27% 2002 142 11,168 875,774 125 88.03% 3,245 29.06% 340,550 38.89% 2003 142 10,866 888,355 128 90.14% 3,776 34.75% 379,109 42.68% 2004 141 10,781 930,982 127 90.07% 4,229 39.23% 437,649 47.01% 2005 139 10,473 1,000,350 132 94.96% 4,510 43.06% 483,133 48.30% 2006 139 10,470 967,420 129 92.81% 4,515 43.12% 492,100 50.87% 2007 140 9,956 954,345 129 92.14% 4,500 45.20% 536,727 56.24% 2008 141 9,313 967,340 132 93.62% 4,776 51.28% 597,428 61.76% 2009 142 9,075 1,011,623 135 95.07% 5,279 58.17% 700,547 69.25% Source: The Statistical Yearbook 2009, EDL

Figure VI-1: Number of Households with Electricity (1995-2009)

Source: The Statistical Yearbook 2009, EDL

Table VI-2: Number of Households with Electricity by Province

Provinces 2008 2009 Electrification Households Households Ratio of 2009 1 Vientiane Cap. 125,114 134,890 99.39% 2 Phongsali 3,091 3,405 11.93% 3 Luangnamtha 12,995 14,285 49.55% 4 Oudomsay 9,666 14,555 31.47% 5 Bokeo 14,401 17,006 61.80% 6 Luang Prabang 40,549 42,895 60.28% 7 Houaphan 14,892 15,992 36.38% 8 Saiyabouli 39,690 48,878 73.42% 9 Xiengkhouang 13,246 17,570 46.81% 10 Vientaine 65,055 71,043 85.58% 11 Bolikhamsay 28,827 34,004 82.68% 12 Khammouane 40,304 50,859 82.69% 13 Savannakhet 78,246 100,359 75.94% 14 ,Saravan 27,745 36,090 66.55% 15 Champasak 72,795 83,686 80.75% 16 Attapeu 5,780 8,766 39.96% 17 Xekong 5,032 6,263 45.48% Total 597,428 700,547 69.25% Source: The Statistical Yearbook 2009, EDL

Table VI-3: Electricity Generation and Distribution (Unit: GWh)

Year Generation Import Export Domestic Sale

1995 1,084.99 76.83 675.55 337.47 1996 1,247.84 87.56 792.43 379.54 1997 1,218.74 101.65 710.21 433.86 1998 947.78 142.28 405.2 513.27 1999 1,168.88 172.2 598.14 565.55 2000 1,578.55 159.92 862.94 639.86 2001 1,553.65 182.5 796.38 710.33 2002 1,570.20 200.8 771.43 766.74 2003 1,316.84 229.34 434.66 883.74 2004 1,416.46 277.59 507.05 902.78 2005 1,751.05 325.63 727.75 1,011.06 2006 1,639.30 334.55 547.05 1,112.40 2007 1,398.37 475.94 267.97 1,298.41 2008 1,777.57 509.95 391.78 1,577.86 2009 1,655.91 818.62 229.53 1,901.29 Source: Annual Report 2009, EDL

Figure VI-2: Electricity Generation and Distribution (1976-2009)

Source: Annual Report 2009, EDL

Figure VI-3: Transmission and Distribution Loss (1991-2009)

Source: Annual Report 2009, EDL

Table VI-4: Average Domestic Electricity Tariffs (1997-2009)

Average tariff Equivalent tariff Exchange Rate Kip/US$ Year In Kips/kWh USD cent/kWh Beginning of year End of year Average 1997 52 4.3 945 1,891 1,220 1998 52 1.61 2,139 4,235 3,235 1999 113 1.61 4,300 7,805 7,044 2000 169 2.41 7,620 8,245 7,911 2001 240 2.68 8,255 9,550 8,948 2002 370 3.52 9,550 10,740 10,171 2003 402 3.78 10,670 10,499 10,625 2004 492 4.62 10,451 10,386 10,646 2005 510 4.76 10,356 10,832 10,646 2006 517 5.09 10,536 9,755 10,706 2007 523 5.44 9,740 9,353 9,607 2008 542 6.21 9,230 8,491 8,720 2009 547 6.41 8,521 8,802 8,533 Source: The Statistical Yearbook 2009, EDL

Figure VI-4: Average Domestic Electricity Tariffs in Lao Kips/kWh (1997-2009)

Source: The Statistical Yearbook 2009, EDL

(2) Challenges Ahead

In addition to reducing regional inequality in electrification (see Table VI-2), Lao PDR faces several challenges in meeting future energy requirements as shown in Table VI-5.

Table VI-5: Challenges in Meeting Future Energy Requirements No Challenges Description - EDL has been successful in reducing overall (technical plus nontechnical) transmission and distribution losses thus far. - Even though the DOE identifies the more remote, distant, and small Reducing villages that would not be connected to the grid but be fed by off-grid transmission and power sources, it is clear that the utility grid would be more extended 1 distribution from concentrated load centers by 2020 than it is today. losses. - It will therefore be increasingly challenging for EDL to continue reducing transmission and distribution losses in the coming years to reach the targeted transmission and distribution loss level of less than 10%. - The government's perspective is that renewable energy technologies can contribute towards reaching the 90% electrification target by 2020, reversing the trend of forest cover loss, and meeting transport fuel needs. Deploying - The government has also set a target of 30% penetration for 2 renewable energy renewable energy technologies by 2025, but the basis for setting this technologies. target is not clear. - Sufficiently reliable and long-term resource data needs to be gathered, procedures for private participation need to be streamlined and simplified, incentives to encourage private participation put in place, and new business models developed. - EDL has made a small beginning in introducing demand-side Increased management measures. As of the end of 2009, EDL has plans to demand-side increase such efforts. EDL is also planning to establish a baseline for 3 management household lighting, with the objective of designing a suitably targeted measures. demand-side management program on introducing compact fluorescent lamps to replace incandescent bulbs. - Although tariff adjustments since 2006 have been accompanied by a reduction in cross-subsidies between customer categories, it is clear that, as opportunities for cross-subsidy reduction are exhausted in the 4 Adjusting tariffs. coming years, EDL will need to adopt a more sophisticated tariff regime to enable it to manage the overall capital investment requirements. - The government and EDL consider it important to reduce EDL 's Managing accounts receivable from the government and agriculture consumers 5 accounts to manageable levels. EDL has agreed on an action plan with the receivable Ministry of Finance (MOF) and the World Bank to reduce accounts receivable and not allow them to re-accumulate. Source: Sector Assistance Program Evaluation for the Energy Sector in Lao People‘s Democratic Republic, ADB, 2010

4. JICA‘s Approach to Electric Power Sector Development in Lao PDR

Since the 1960‘s, Japan has been heavily involved in electric power sector development in Lao PDR. The following points can be identified as the characteristics of Japan‘s support in this field.

(1) Integrated Assistance In order to support electric power development in Lao PDR, JICA has developed various measures combining facility development and O&M, policy and master plan support, institution building, and human capacity development, etc. These types of assistances have been provided using various schemes such as loans, grants, policy advisor dispatch, technical cooperation projects, and development studies, depending on the objectives of the assistance (see Table VI-6~10).

Table VI-6: Loan Aid Amount Year Project Name (Million ¥)

1974 The Project for Construction of the Nam Ngum I Hydropower Plant-Phase 1 3,180

1976 The Project for Construction of the Nam Ngum I Hydropower Plant-Phase 2 2,010

1996 The Project for Construction of Nam Leuk Hydropower Plant 3,903

2004 Greater Mekong Power Network Development Project 3,326 Source: Keiichi Sasaki―Denryoku sekuta no gennjyou to shourai‖, JICA, 2008

Table VI-7: Grant Aid Amount Year Project Name (Million ¥)

1966 Nam Ngum River Development Fund 17.86

1980 The Project for Rehabilitation of the Nam Ngum I Hydropower Station 6.54

1985 The Project for Rehabilitation of Substation at Vietiane District 6.40

1986 The Project for Rehabilitation of Substation at Vietiane District 5.13

1989 The Project for Rehabilitation of the Nam Ngum I Hydropower Station 4.87

1990 The Project for Rehabilitation of the Nam Ngum I Hydropower Station 3.96

2000 The Project for Rehabilitation of the Nam Ngum I Hydropower Station 12.04 Source: Keiichi Sasaki―Denryoku sekuta no gennjyou to shourai‖, JICA, 2008

Table VI-8: Policy Advisors Period Objective Description

Hydro Power To support electric power policy, IPP hydro-power development, 1998-2006 Generation (O&M) as well as rural electrification promotion at DOE

Electric Power To support the formulation of national grid plan and power 1998-2004 System Planning network analysis at the System Planning Office of EDL

Electric Power To support the development of power sector policy and related 2006-2008 Policy projects at DOE.

Electric Power To support the development of power sector policy and related 2009-2011 Policy projects at DOE.

Source: Keiichi Sasaki―Denryoku sekuta no gennjyou to shourai‖, JICA, 2008

Table VI-9: Technical Cooperation Projects Year Project Name

The Project on Electric Power Technical Standard Establishment in Lao People's 2000-2003 Democratic Republic

2005-2008 The Project on the Lao Electric Power Technical Standard Promotion

2010-2013 The Project for Improvement of Power Sector Management

2007-2009 The Project for Third Country Training on Rural Electrification Promotion

Source: Keiichi Sasaki―Denryoku sekuta no gennjyou to shourai‖, JICA, 2008

Table VI-10: Development Studies Year Project Name

1998~2002 The Study on Nam Ngiep I Hydropower Development Plan

1998~2000 The Study on Rural Electrification Project by Renewable Energy in Lao PDR

2001~2002 The Master Plan Study on Transmission and Distribution Lines

2004~2005 The Master Plan Study on Small Hydropower in Northern Laos

2008~2009 The Study on Power Network System Plan in Lao PDR

Source: Keiichi Sasaki ―Denryoku sekuta no gennjyou to shourai‖, JICA, 2008

Compared with other donors, one of the JICA‘s strengths lies in its support for the formulation of master plans such as ―The Master Plan Study on Transmission and Distribution Lines‖ and ―The Master Plan Study on Small Hydropower in Northern Laos‖. In many developing countries, the lack of strategic policies and planning for the electricity sector at the central government level is a critical weakness. Without solid government policy and planning, interventions have been piecemeal rather than

34 integrated. In this respect, master plan studies have enabled the Lao government to build a strong planning capability at the line ministry level, to establish clear policies and criteria for allocating new electric facilities, and to move beyond the ―firefighting‖ approach that had reduced government‘s ability to anticipate exogenous shocks.

(2) Building Client Ownership JICA‘s assistance has been provided in line with the Lao government‘s priorities and plans during the past several decades, as shown in Table VI-11.

Table VI-11: Alignment of Japan‘s Assistance with Lao Government Policies No Power Sector Policy Japan‘s Assistance Maintain and expand affordable, reliable and sustainable electricity 1 - All projects aim to contribute to this goal. supply to promote economic and social development Tap the country‘s potentials aiming at promoting power generation for export - The Project for Construction of the Nam Ngum to provide revenues to meet I Hydropower Plant – Phase 1-2 2 Government development objectives - The Project for Construction of Nam Leuk with particular emphasis on poverty Hydropower Plant eradication Develop and enhance the legal and - The Project on Electrical Power Technical regulatory framework to facilitate Standard Establishment 3 power sector development by either - The Project on Electrical Power Technical public or private parties Standard Promotion Gain capacity building through exotic 4 - All projects aim to contribute to this goal. technical know-how and expertise Ensure accountability and transparency of environmental and 5 - All projects emphasize this goal. social impacts and thereby achieve sustainable development Source: Study Team

(3) Long-term and Flexible Approach Japan‘s assistance in Lao PDR‘s electric power development started in 1966 when Japan participated in the Nam Ngum River Development Fund. From that early period up to now, Japan has supported the construction and rehabilitation of the Nam Ngum Hydropower Station and related transmission lines (see Table VI-12). Thus, up to the 1990‘s, Japan‘s assistance was mainly in developing large electric facilities and their operation and maintenance, as well as master plan support, which is a traditional intervention.

Table VI-12 : Development of Nam Ngum I Construction Project and Nam Leuk Hydropower Plant - Nam Ngum-I Phase I commenced in 1968 and was commissioned in 1971 at a cost of US$ 28 million. - Facilities included a gravity concrete dam, a power plant at the base of Nam Ngum-I the dam with two 15 MW generating units, and provisions for 3 additional Phase I units, a single circuit high voltage transmission line at 115 kV from Nam Ngum site through Vientiane Capital City at Phonetong Substation to EGAT‘s grid at Nongkhai Substation (Thailand). - Site activities began in 1976 and were successfully commissioned in 1978 at a cost of US$ 49 million. - Project included installation of spillway gates, new penstock and intake Nam Ngum-I gates, civil works required for extension of the powerhouse to Phase II accommodate three new generating units of 40 MW each but installed only two units and auxiliaries, a double circuit high voltage transmission lines at 115 kV from Nam Ngum site through Vientiane Capital City at Phonetong Substation to EGAT‘s grid at Nongkhai Substation (Thailand). - Site activities began in 1983 and was successfully commissioned in 1984 at a cost of US$ 20 million. Nam Ngum-I - In order to fully utilize the hydro potential and facilities already installed, Phase III the 40 MW generating unit was installed. - Average annual energy production is 865 GWh. - After completion Nam Song Diversion Project to Nam Ngum-I reservoir Nam Song 1996 involved increasing average annual energy production up to 995 Diversion and GWh. Nam Leuk HPP - In 2000 Nam Leuk HPP completed and turbine release to NNG1 reservoir involved increasing average annual energy production up to 1,025 GWh. Source: Nam Ngum-I Hydropower Plant

Since the beginning of the 2000‘s, however, JICA has broadened its area of intervention in response to client needs. Regulatory and institutional support has been made available in formulating and promoting electric power technical standard (see Box 4 and Figure V-8), promoting rural electrification such as the execution of the ―Master Plan Study on Small Hydropower in Northern Laos‖, and ―The Project for Third Country Training on Rural Electrification Promotion,‖ the latter being an integrated intervention.

JICA‘s recent stress on institution building is also a reflection of its change in its view of capacity development, i.e., that CD activities should not be carried out only at individual and organization levels without due consideration to policies on the institutional and social environment both at the sector and at the macro level.

Box 4: Lao Electric Power Technical Standard Promotion Project (2005-2008)

The electric power sector in Lao PDR faces the problem of inadequate human resources to

enable the sector to improve its electrification rate and earning foreign currency through sales of electric power to neighboring countries. Another problem is inefficient operation of electric facilities, such as generators, transmission lines and distribution lines, built by

foreign investors. Since many facilities have different technical standards, it is difficult to manage and operate them.

In response to the request made by the Government of Lao PDR, JICA conducted a technical cooperation project, entitled ―Lao Electric Power Standard Establishment‖, from May 2001 to April 2003 to train officers to develop and manage electric power

technical standards that suit the actual situation of the electric power sector in the country. The project also assisted the Lao government in establishing the Lao Electric Power Technical Standard (LETS) and developing human resources for the sector. LETS

was legislated through a ministerial decree of the Ministry of Energy and Mines in February 2004.

Following the above-mentioned technical cooperation project to strengthen the overall capacity of the electric power sector in Lao PDR to administer and enforce LETS, a three year technical cooperation project started from January 2005. The project was

implemented by the Department of Electricity (DOE), the Ministry of Energy and Mines (MEM), and EDL,

The project aims at developing the capacity to train officers and engineers in six technical areas of the electric power sector (namely, civil engineering, hydro-power, substation, transmission, distribution and user‘s site). Long and short term experts were dispatched

to Lao PDR to support the project.

Figure VI-8: Establishment of Electric Power Legal System (Source: JICA)

(Technicalcooperation project) The Project on Electric Power Technical Standard Law Establishment Electric Power Law

✓Electric Power Technical Standard (2004) ✓Guidelines on O&M (2007) (Outcome) ✓Electricity Safety Regulations (2007) Ministerial Ordinance (Technical cooperationproject) ✓Design and Inspection Manual The Project on Electric Power Technical Standard Insstruction, ✓Inspection Manual before using Promotion Manual Equipment ✓Reference on Electric Power Technical Standard ✓Dessemination by Training Center (Development of Teaching Material & Equipment, Instructor Training)

(Development Study) (Loan Aid) The Master Plan Greater Mekong Power Study on Network Development Transmission and Project Distribution Lines

(4) Complementary Relationship with Other Donors In Lao PDR, JICA‘s assistance has a complementary relationship with that of other major donors, i.e., World Bank and Asian Development Bank. For example, JICA‘s focus on technical issues and practical know-how tend to avoid sensitive problems such as increasing cost recovery and governance in improving utility management. In this respect, the World Bank‘s periodic demand for higher power tariffs to the Government of Lao PDR helped JICA‘s projects in terms of their sustainability.

Another complementary relationship can be seen in the construction of transmission and distribution lines. The World Bank has focused on the southern region; ADB, the north; and JICA is taking care of the central region.

Table VI-13: World Bank Projects in Lao PDR Amount Year Project Name (US$Million) 10.0 2004 Rural Electrification Project (Phase 1) (Others: 26.3) 18.5 2007 Greater Mekong Subregion Power Trade Project (Others: 3.7) 20.0 2009 Second Phase of the Rural Electrification Project (IFC: 3.9) (Others: 11.9) Source: Kaigai denryoku chousakai ―Cambodia & Laos: Denryoku jijyou chousa‖ 2010

Table VI-14: ADB Projects in Lao PDR Amount Year Project Name (US$Million) Xeset Hydropower 1987 12.04 (Construction of Xeset Hydropower Plant and Transmission Line) Nam Ngum-Luang Prabang Power Transmission 1988 (Construction of 115kV Transmission Line between Nam 15.6 Ngum-Luang Prabang) Theun-Hinboun Hydropower 57.7 1994 (Construction of Theun-Hinboun Hydropower Plant and Transmission (NDF: 7.3) Line) (Govt: 11.5) Nam Leuk Hydropower 52.0 2000 (Construction of Nam Leuk Hydropower Plant and Transmission Line (JBIC: 38.5) to Pakxan) (Govt: 22.1) Northern Area Rural Power Distribution 30.0 2003 (Construction of 115kV Transmission Facilities and 34.5/22kV (NDF: 10.0) Distribution Facilities) (Govt: 11.5) GMS Nam Then 2 Hydroelectric Project 45.0 (Others: 2005 (Construction of Nam Theun 2 Hydropower Plant and Transmission 855.0) to Thai border. Source: Kaigai denryoku chousakai ―Cambodia & Laos: Denryoku jijyou chousa‖ 2010

(5) Efforts at Localization of External Knowledge From the perspective of the CD approach, the traditional thinking on development and cooperation is wrong because it is based on the idea that ―We should simply transfer know-how (technology and knowledge) and provide infrastructure from outside since partner countries are just lacking in particular skills and abilities‖. However, experience shows that outside actors cannot directly develop capacities in a partner country. The process of sustainable development is possible in partner countries only through an endogenous process. From this perspective, when introducing new knowledge from outside, the localization of that knowledge is critical.

Based on its experience of introducing western knowledge, JICA‘s technical cooperation emphasizes local ownership and the adjustment of Japan‘s model to fit the local context. This is seen in the process of planning and implementation of ―The Project on the Lao Electric Power Technical Standard Establishment.‖ In this project, extensive surveys were conducted not only on the conditions of power and facilities in both urban and rural areas in the country, on safety management system in Asia (China, Southeast and Southwest Asia), but also on the legal system, as well as technical standards and safety systems for electrical equipment in developed countries (U.S., U.K., Germany, France, Australia). After the surveys, the project applied Japan‘s electricity utility industry law, technical standards for hydropower generation facilities and electric equipment, and interpretation of technical standards for the preparation of draft electric power technical standards.

The localization of external knowledge can be further facilitated by the implementation of South-South cooperation as indicated in the next section.

(6) Promotion of Mutual Learning among Neighboring Countries JICA‘s traditional emphasis on South-South cooperation can also be seen in the support given to the promotion of rural electrification in Lao PDR (see Table VI-15).

Although rural electrification (RE) is one of the key factors for rural development and poverty reduction, many developing countries have faced various difficulties in promoting it. Generally, it is sparser population, lower income levels and higher transportation costs in rural areas that make rural electrification uneconomical, which widen the gap between urban and rural areas in terms of public service.

The electrification rate in rural areas in Cambodia, Lao PDR, and Myanmar is considerably lower compared with urban areas. Even in Vietnam, the rural electrification rate is only 60%. In order to tackle this situation, governments need to strongly commit themselves to promote rural electrification with the technical and

39 financial cooperation of donors as well as appropriate burden sharing among public and private sectors.

Up to 2005, Lao PDR promoted not only on-grid (grid-extension) electrification but also off-grid‘s such as photovoltaic (PV) and small hydropower schemes to non-electrified areas. Due to these efforts, the electrification rate in Lao PDR increased steadily from 35% in 2000 to 47% in 2004, but there remained a wide gap between the actual rate and the target set by the government, which is 90% by 2020. In order to accelerate rural electrification, it has become more important to share various experiences, and promote know-how on rural electrification among similar neighboring countries. From this perspective, a training on rural electrification in Cambodia, Lao PDR, Myanmar, and Vietnam was planned and implemented (see Table VI-15).

Table VI-15: Overview of the Project for Third Country Training on Rural Electrification Promotion 1 Program Title Promotion of Rural Electrification in CLMV Countries The aim is for participants to fully understand the concept of rural electrification and to acquire knowledge and techniques as well as to gain 2 Purpose experiences learned from various RE projects in Japan and participants‘ countries. At the end of the course, the participants are expected; 1) To understand the strategies and strategic plan of RE programs 2) To examine and understand the role of the public and private sector 3 Output in RE 3) To share their opinions and information covering both On- and Off-Grid provision electrification including the technical aspects as well as the policy formulation 1) First year: Policy and basic concept of RE Sub-theme of the 4 2) Second year: Implementation and Construction for RE Program 3) Third year: Management, Operation and Maintenance for RE Organizing 1) Department of Electricity, MEM 5 Institution 2) EDL Number of 5 persons from each country (Cambodia, Laos, Myanmar, Vietnam) 6 Participants a

Year (maximum) 7 Duration: Approximately 2 weeks per fiscal year Year of 8 JFY 2006- JFY 2008 Cooperation Source: JICA

Box 5: The First Year‘s Training Courses on the Promotion of Rural Electrification

The first year‘s training courses largely aimed to transfer skills on policy making and planning on rural electrification. It was held at the EDL Training Center in Vientiane, Lao P.D.R., and participated in by five trainees from Cambodia, two from Myanmar, nine from Laos, and four from Vietnam, as well as eight lecturers from Laos and one JICA expert from Japan.

The course started with participants presenting country reports. In the former part of the course Lao lectures explained on the policy, regulation, and general matters on rural electrification, giving the present situation in Laos as an example.

In the latter part, trainees were taught practical skills in developing small hydropower plants through case studies and lectures. They realized the importance of rural electrification for poverty reduction in rural areas by introducing the results of the actual socio-economic survey carried out in northern Lao villages. Survey results showed the situation before and after ―electrification,‖ a process which had never been done before in the areas. The promotion of renewable energy was also mentioned as an important future resource for rural electrification.

In addition, a study tour was carried out during this course. The participants visited one of the pilot project villages, ―Ban Donxayoudom‖ in Vientiane province located in the small island of Nam Ngum Lake, where Solar Home System (SHS) and Battery Charging Stations (BCS) were installed by the previous JICA project, entitled ―The Study on Rural Electrification Project by Renewable Energy in Lao PDR,‖ which was conducted from 1998 to 2001. These facilities were installed in 1999 and at the time the study tour was carried out, eight years already passed, and the facilities were still operating.

Through this first training course, the trainees learned about the practical issues and importance of rural electrification through concrete examples and fruitful exchanges of ideas. In their evaluation sheets, the trainees gave high priority to the application of their newfound knowledge to their own countries.

Source: JICA

5. Lessons Learned

(1) Client Ownership Client ownership is essential. When donors conceive, design and implement projects with too little input from recipients, the latter perceives little or no ownership of the projects. This is likely to have a negative impact on the level of commitment of recipients, and thus on the sustainability of the projects. This tendency of donor has been criticized by many for the last two decades. However, this is not the case in Lao PDR‘s power sector. Various types of assistances by major

donors have been provided in line with the Lao government‘s priorities and plans during the past several decades. The government of Lao PDR has been strongly committed to develop the electric power sector, and has utilized international cooperation programs/projects to achieve this goal. Government commitment is a critical factor that resulted in an impressive achievement in the sector.

(2) Clear National Objective and Coherent Strategies Even though donor assistances is in line with the client government‘s priorities and plans, the positive effects of such assistance cannot be expected if the client country does not have clear national goals and coherent strategies to achieve its goals. In the case of Lao PDR, since the 1990s, the government‘s goal has been clear: to electrify 70% of households by 2010, and 90 % of households by 2020. The government already developed coherent strategies to achieve the goals as early as the middle of the 1990‘s. In addition, the master planning support from JICA in various fields may have helped the Lao government in formulating coherent strategies. These factors may have contributed to the mobilization of people and snowballing of support that have carried the country toward one direction.

(3) Effective Counterpart System Capacity development requires an effective counterpart system in client countries. In many development projects supported by donors, capacity development for counterpart personnel is very difficult to achieve since beneficiary governments do not establish effective systems to acquire external knowledge and develop their human resources. In Lao PDR, however, since the government has recognized the need to enhance manpower skills to better manage hydropower development, they formed project teams to plan and implement major projects in electrification with international donor financing. The teams have been staffed by EDL personnel, supplemented by outside staff or consultants, when necessary. As proven in Lao PDR, this system can develop the capacity of government personnel if they have sufficient incentive to acquire knowledge from international donors.

(4) Long-term Coordinated Efforts by Donors Continued support by donors combined with high national ownership and effective counterpart system has led to a significant institutional capacity development in the power sector of Lao PDR.

In addition, accelerating electrification requires coordinated action by development partners. Given the scale of investments needed, a systematic approach to planning and financing new investments is critical. In addition to strengthening sector planning, strategic priorities, such as reform of SOE, cost recovery, accelerated electrification, expanded regional trade in power, and closed the financial gap must

progress together. This requires coordinated action by development partners.

(5) Localization of External Knowledge The triangular form of South-South cooperation (T-SSC) can contribute to the localization of external knowledge. From the perspective of capacity development, a form of development is transformation, rather than displacement by knowledge and systems produced elsewhere. New knowledge should be integrated into indigenous knowledge or production system. Otherwise, it fails to be useful, despite its potential28. In this respect, in sustainable development projects, the knowledge of a traditional donor must have been modified and internalized in a beneficiary country to fit its local situation. If this process of knowledge acquisition by the pivotal country can be learned by beneficiary countries in T-SSC projects, localized knowledge in the pivotal country would be further modified in beneficiary countries in the process of interaction and mutual learning. Furthermore, the similarity between pivotal and beneficiary countries regarding the stage of economic development as well as language and culture, may be likely to facilitate this process.

(6) Scale-up of North South Projects For traditional donors, T-SSC can increase their aid effectiveness: transferring successful aid experiences to third countries (scaling up). For emerging donors, T-SSC can provide them with technical and financial supports from the traditional donors for the scale up of their own cooperation programs. Furthermore, T-SSC is able to add an extra value of South-South cooperation by involving traditional donors and transferring successful experiences. Emerging donors can also benefit from using the experience and the support of traditional donors to build the capacity of their own development cooperation agencies29.

(7) Mutual Learning For the promotion of T-SSC, mutual learning is a key. One of the barriers to the promotion of T-SSC is that beneficiary countries may not be willing to learn from emerging donors due to their pride and/or their complex relationships with emerging donors. Instead, they tend to go to developed countries to learn the most advanced technology and know-how. For this reason, it is important to organize T-SSC programs in such a way as to provide participating countries with opportunities for mutual learning such as by identifying good practices in each country. This will build the ownership of beneficiary countries over SSC programs and promote South-South cooperation.

28 Capacity for Development: New Solutions to Old Problems , UNDP, 2002, p9 29 ―Triangular Cooperation‖, Buido Ashoff, in Development Outreach: South-South Opportunity, World Bank, October 2010

VII. Power Sector Development in Sub-Saharan Africa

1. Power Crisis in Sub-Saharan Africa

Sub-Saharan African countries have suffered from chronic power problems that have negative effects on their economic growth and productivity as well as on rural survival and social life. Power problems include inadequate generation capacity, limited electrification, low power consumption, unreliable services, and high costs. The power sector financing gap is approximately US$23 billion a year, and much of the spending is on operating expenditures to run the continent‘s high-cost power systems, thus leaving little for the huge investments needed to provide a long-term solution. The situation could be improved if regional power trade is promoted. However the expansion of regional trade depends on a handful of major exporting countries‘ raising large volumes of finance to develop generation capacity for export, as well as on the political will of a large number of importing countries. Furthermore, since countries rely on small-scale oil-based plants, full cost-recovery tariffs would not be affordable in the region. Weak sector planning capabilities, poor corporate governance of SOEs, and poor creditworthiness of utilities exacerbate the situation. Table VII-1 and Figure VII-1 to VII-3 illustrate these problems.

TableVII-1: Africa‘s Chronic Power Problems - The entire installed generation capacity of the 48 Sub-Saharan countries is 68 GW, no more than Spain‘s - Without South Africa, the total falls to 28 GW. Inadequate Generation - As much as one-quarter of that capacity is unavailable because 1 Capacity of aging plants and poor maintenance. - The growth in generation capacity has been barely half that in other developing regions.

- Only about one-fifth of the Sub-Saharan population has access to electricity. (about one-half in South Asia and more than four-fifths in Latin America.) - Household access to electricity in urban areas is 71 %, compared with only 12 % in rural areas. 2 Limited Electrification - Access rates in the upper half of the income distribution exceed 50 %, whereas they are less than 20 % in the bottom half. - Only 15 % of the rural population lives within 10 kilometers of a substation.

- Power consumption is tiny and falling. - Given limited power generation and low access, per capita electricity consumption in Sub-Saharan Africa (excluding 3 Low Power Consumption South Africa) averages only 124 kWh per year, barely 1 % of the consumption typical in high-income countries. - Sub-Saharan Africa is the only region in the world where per capita consumption is falling.

- More than 30 African countries now experience power shortages and regular interruptions in service. - From 2001 to 2005, generation capacity expanded only 1.2% annually, although the demand for power grew at much higher pace (GDP growth rate was over 4.5% in the region) - In some countries, supply shocks exacerbated the situation. Causes of supply shocks include droughts in East Africa; oil price inflation, and conflicts that destroyed the power infrastructure in some fragile states. - Many African enterprises experience frequent outages: in 4 Unreliable Services Senegal 25 days a year, in Tanzania 63 days, and in Burundi 144 days. - Frequent power outages mean big losses in forgone sales and damaged equipment - The economic costs of power outages are substantial. The immediate economic cost is the cost of running backup generators and forgoing production during power shortages. - Overtime, the lack of a reliable power supply is also a drag on economic growth.

- The small scale of most national power systems and the widespread reliance on expensive oil-based generation make the average total historic cost of producing power in Africa exceptionally high. - $0.18/kWh with an average effective tariff of $0.14/kWh. 5 High Cost - Tariffs of $0.04 /kWh in South Asia, and $0.07 in East Asia. - Rising oil prices, lower availability and hydropower, and greater reliance on emergency leases have put further upward pressure on costs and prices.

- Spends only about one-quarter of what it needs to spend on power - Much of which is on operating expenditures to run the 6 Financing Gap continent‘s high-cost power systems - Leaving little for the huge investments needed to provide a long-term solution.

- Although Sub-Saharan Africa is well endowed with both hydropower and thermal resources, only a small fraction of its power generation potential has been developed. - Some of the region‘s most cost-effective energy resources are too distant from major centers of demand in countries too poor to raise the billions of dollars needed to develop them. - 61 % of the region‘s hydropower potential is in just tow countries: the Democratic Republic of Congo and Ethiopia. Underdevelopment of 7 - Pooling energy resources through regional power trade Regional Trade promises to reduce power costs. - Africa could potentially save $2 billion a year in energy costs if trade were pursued to its fullest desirable extent.

- The operational inefficiencies of power utilities cost the region $2.7 billion a year (0.8% of GDP on average) - Average distribution losses in Africa are 23.3 %, more than twice the norm of 10 %. The Operational - Average collection ratios are 88.4 %, compared with the best 8 Inefficiencies of Power practice of 100 %. Utilities - Power utilities in Africa have overemployment of 88 % relative to a developing country benchmark of 413 connections per employee. This results in labor overspending in the range of 0.07 % to 0.6 % of GDP.

- Underpricing power costs the sector at least $2.2 billion a year in forgone revenues (0.9% of GDP on average). - Underpricing power is widespread across Africa. - In worst cases (Malawi, Tanzania, and Zambia), underpricing 9 Limited Cost-recovery can result in utilities‘ capturing less than half of the revenues they need and creating an economic burden in excess of 2% of GDP.

Source: ―Power: Catching Up‖ in Chapter 8 of Africa‘s Infrastructure: A Time for Transformation

Figure VII-1: Electrification Rates in Sub-Saharan Africa, Latest year avilable South Africa Nigeria Cote d'Ivoire Sengal Cameroon Ghana Namibia Benin Zambia Madagascar Kenya Ethiopia Mozambique Tanzania Burkina Faso Uganda Niger Malawi Resoso Rwanda Chad 0 10 20 30 40 50 60 70 Percentage of households connected to electricity grid Source: Underpowered: The State of the Power Sector in Sub-Saharan Africa, World Bank, May 2008

Figure VII-2: Power Outages in Sub-Saharan Africa by Number of Days per Year, Latest year available

Figure VII-3: Electricity Imports in Sub-Saharan Africa, 2005 (terawatt hours, TWh)

2. Case of Zambia

(1) Present Situation of Electric Power Sector in Zambia

Zambia is a low-income country of about 12 million inhabitants with a GDP per capita of US$950 (2009). Poverty levels remain very high, with 59% of the population living below the poverty line. While poverty in urban areas has declined from 56% in 1998 to 27% in 2006, it has remained very high in rural areas (at 77% in 2006).

Zambia is one of the low-level development countries in power generation and transmission facilities, and infrastructure. It has a land area of 750,000 km2 and a population of 11 million. Therefore, the average population density is rather low, i.e. 15 persons/km2. Fifty percent of the population lives in urban areas; thus, population densities in rural areas are even lower. Under-population is one of the reasons for the delay in electrification in rural areas since economies of scale will not be achieved. On the other hand, even though power supply started in the beginning of 1900, the electrification rate in urban areas is still low. With the rapid increase in urban population, distribution expansion could not catch up to supply power to these new consumers because of a lack of transformer capacity.

Table VII-2: Present Situation of the Electric Power Sector in Zambia - The country‘s hydropower resource potential stands at an estimated 6,000 Megawatts (MW) while the installed capacity is 1,760 MW contributing about 14% to total energy use. - Hydroelectric plants represent 92% of installed capacity and 1 Generation Capacity accounts for 99 percent of electricity production. - With a projected electricity demand growth of 100MW per annum, the country is expected to experience a power deficit in the absence of additional generation capacity.

- National household access rate stood at 20.3%. - The access rate in the urban areas averaged nearly 48% compared to 3% in the rural areas. - Poor financial situation, low population density in rural areas, 2 Low Electrification Rate lack of transformer capacity contribute to low electrification rate. In addition, power supply to the Copperbelt occupies half of ZESCO‘s total generation even now.

- The power generation facilities in Zambia were constructed in the 1960s and 1970s, and there are no power plants constructed after that time. - Three hydropower plants and part of substation facilities are Aging Power Generation 3 under rehabilitation or planned to be upgraded through the Facilities ongoing PRP; however, most of the small hydropower plants and transmission/distribution facilities are presumably maintained as is for a long time.

- The mining industry accounts for 68% of national electricity consumption followed by households with 19%. - The electricity consumption of the various categories of users.  Households 19% 4 Power Consumption  Government and Service 7%  Industry 4%  Mining 68%  Agriculture 2%

- The strategic geographical location of Zambia in the sub region, lying between the hydro rich Congo Democratic Republic (DRC) and relatively hydro poor southern African region, and the potential to increase Zambia‘s own available hydropower puts the country in an excellent position to export power and provide transmission services to southern and east African 5 Regional Trade countries. - The interconnections enable electricity trade between Zambia and its neighbors. Of particular significance to SAPP is the north-south power flow from Zambia and the Democratic Republic of Congo to Zimbabwe and South Africa and thence to other countries of SADC.

- ZESCO has not been able to invest in maintaining and replacing the distribution networks, as current tariff levels do not allow it to generate adequate income. - Inadequate investments in network infrastructure and The Operational maintenance have led to deterioration in electricity 6 Inefficiencies of Power distribution system. This in turn has resulted in the poor Utilities quality of electricity supply and operational inefficiencies throughout the network. - ZESCO‘s losses in the distribution network are about 23%.

(2) Power Sector Development Plan

Vision 2030 characterizes Zambia by 2030 as a dynamic middle income industrial country with a per capita income of US$ 1,639. It further describes the scenario as one of a competitive, self sustaining, dynamic and resilient economy to any external shocks, which supports stability and protection of biological and physical systems and is free from donor dependence. According to the National Vision 2030, Zambia will be transformed into ―A Prosperous Middle Income Nation by 2030‖.

According to the Rural Electrification Master Plan, the government‘s target is to raise the access rate in rural areas from approximately 3% in 2007 to 51% by 2030. More than 90% of this achievement will be from extensions of the national grid as opposed to isolated 12 grids or private home systems. For the urban areas the access rate is targeted to rise from an average of 47% in 2007 to 90% by 2030.

TableVII-3: Energy Sector Plan in Zambia - The vision is universal access to clean, reliable and affordable energy at the lowest total economic, financial, social and environmental cost consistent with national development goals by 2030. - According to the vision, by the year 2030 a transition from dominant use of primary biomass fuels such woodfuel (firewood and charcoal) The energy sector wood residues, crop residues, animal dung etc. has taken place in vision favor of secondary biomass fuels such as gelfuel, ethanol and biodiesel as alternative fuels. - The imbalance in access to electricity between the urban and rural areas is envisaged to reduce significantly in 2030 from the current levels. - Target is to raise the access rate in rural areas from approximately 3% in 2007 to 51% in 2030. - More than 90% of this achievement will be from extensions of the national grid as opposed to isolated 12 grids or private home systems. - For the urban areas the access rate will rise from an average of 47% in 2007 to 90% in 2030. The Rural - By 2030 renewable energy sources contribution to the total national Electrification Master energy supply will be increased. Removal of barriers to wide Plan dissemination of RETS will lead to the increase deployment of RETs for electricity generation. This will increase access to affordable energy in rural areas to reduce poverty through income generating activities and promote economic growth. Renewable energy is envisaged to be fully integrated in development programs.

(3) Donor Activities

1) World Bank Activities

In the energy sector, the Bank aims to assist the government in addressing three priorities: (1) financing new generation and transmission capacity and demand-side management measures to mitigate the current power crisis; (2) provision of financing and technical assistance for access expansion to increase the current low electrification rate; and (3) provision of investment and technical assistance to ZESCO to improve efficiency and quality of services. Within this framework, the World Bank‘s ongoing project in the power sector in Zambia is entitled ―Increased Access to Electricity Services Project.‖

Table VII-4: Increased Access to Electricity Services Project (IAES) - To increase access to electricity services and to improve efficiency and quality of the electricity distribution system in targeted areas. Project Objective - To remove the barriers to and reduce the implementation costs of renewable energy technologies to help mitigate greenhouse gas emissions‘.

(1) ZESCO‘s efficiency improvement, including reinforcement of existing distribution networks, intensification within existing grids in peri-urban areas, and energy efficiency (EE) and demand side management (DSM); Components (2) Access expansion through grid extension in rural areas, isolated grids / mini-hydro, and solar Photovoltaic (PV) systems for schools and clinics, commercial establishments, and households; and (3) Technical assistance for ZESCO, Rural Electrification Authority (REA), and other key players in the sector. Project Period February 2009 - December 2013 Amount US$75.5 million Source: PROJECT PAPER ON A PROPOSED RESTRUCTURING AND ADDITIONAL CREDIT FOR AN INCREASED ACCESS TO ELECTRICITY SERVICES PROJECT, World Bank, September 3, 2010

2) JICA‘s Activities

JICA‘s ongoing projects in the power sector in Zambia are ―Capacity Development for Rural Electrification‖ and ―Increased Access to Electricity Service Project‖.

The Capacity Development for Rural Electrification Based on Zambia‘s request for technical assistance in preparing a rural electrification master plan in 2004, JICA conducted the development study entitled ―The Study for Development of the Rural Electrification Master Plan in Zambia‖ from May 2006 to January 2008. After study completion, the Zambian government adopted the Rural Electrification Master Plan (REMP) as the National Plan for Rural Electrification in Zambia. Rural electrification was carried out based on the REMP by the Rural Electrification Authority (REA), which was established in 2004. In order to implement rural electrification based on REMP, the capacity of REA and the Department of Energy, MEWD (DOE) needed to be strengthened. In response to this, JICA is now conducting a technical cooperation to develop the capacity of DOE and REA (see Table VII-5 ).

Table VII- 5: Capacity Development for Rural Electrification  To strengthen the capacity of DOE and REA for planning and implementing the REMP.  Technical capacities for planning, implementing, financial Purpose and Activities management and updating rural electrification projects are developed (AWP, F/S, D/D, Tender Document and construction).  Technical capacities for Photovoltaic (PV) system are developed. Ministry of Energy and Water Development, Rural Electrification Implementing Agency Authority Project Period August 2009 to August 2013 Source: JICA Zambia Office Home Page

Development Study: Power System Development Master Plan In addition to ―The Study for Development of the Rural Electrification Master Plan in Zambia‖, JICA conducted another master plan study, entitled ―Power System Development Master Plan‖ from 2008 to 2009 .

Table VII-6: Development Study: Power System Development Master Plan  To formulate the Power System Development Master Plan up to 2030.  To Update GIS database, to forecast power demand, to select the possible alternatives including power sources, to analyze the power Purpose and Activities transmission system considering interconnections to SAPP, to evaluate the cost of each basic design alternatives and to formulate a long term power system development plan up to 2030.

Implementing Agency Ministry of Energy and Water Development Project Period November 2008 to December 2009 Source: JICA Zambia Office Home Page

Increased Access to Electricity Service Project This is the first Japanese loan in 17 years for Zambia, part of a restart in official development assistance for sub-Saharan Africa stemming from structural reforms made under international supervision, recent sound macroeconomic management and international debt reduction.

Table VII-7: Increased Access to Electricity Service Project  Based on the Rural Electrification Master Plan (REMP) the project components are 12 grid extension project packages in Central, Eastern, Luapula, Northern, Southern and Western Province and 1 Purpose and Activities Mini-hydro project in North-Western Province under REMP.  Condition of the YEN LOAN: 0.01% interest rate per annum, with 40 years repayment period, including 10 years glace period

Implementing Agency ZESCO Ltd Project Period March 2009 to December 2013 6,573 million Japanese Yen (ODA Loan: 5,511 million*) Project Amount (US$1=JPY91.4541 (As of January, 2010) Source: JICA Zambia Office Home Page

VIII. Recommendations

Based on an analysis of the SSC approach by the World Bank and JICA, as well as of the power sector development in Lao PDR and African countries (ex. Zambia), possible areas for knowledge sharing between the two countries, and for collaboration between the World Bank and JICA is examined in this section. Then the strengths and risks of the triangular form of SSC (T-SSC) and implications on project implementation are discussed based on the analysis on good practices in JICA‘s SSC support projects (see Appendix 3). Finally the areas for further study are suggested.

1. Possibility for Knowledge Sharing between Lao PDR and Zambia

There are various possibilities for knowledge sharing between the two countries. For example, Lao PDR can provide knowledge and experience in:  Planning and construction of hydropower plants;  Formation of strategies for rural electrification;  Tariff policy formulation and implementation;  Individual and institutional capacity development by building effective counterpart system in international assistance projects;  Promotion and regulation of IPP projects; and  Mini-hydro and PV solar training.

On the other hand, the Zambian side has strengths regarding the:  Provision of training program for SADC personnel in the field of hydropower development;  Management of public training centers, e.g., Kafue Gorge Regional Training Center; and  Experience of the Energy Regulation Board (ERB) which reviews and approves ZESCO‘s tariffs and those of other players.

One of the efficient ways to form SSC programs is to replicate good practices in other countries. Therefore, efforts should be made to identify good practices in each country and find other countries that are seriously in need of those knowledge and know-how. Consideration should be taken to emphasize mutual learning between countries, because every race has pride for their country.

In knowledge exchange between Lao PDR and Zambia, it is important to utilize the Kafue Gorge Regional Training Center. Since this center has provided SADC personnel with training program in the field of hydropower development, the experience of Lao PDR in this field can spread not only in Zambia but also in other Southern African

53 countries. Furthermore, this kind of regional training center may be found in other regions, so that it is better to utilize those existing regional networks to scale up the impact of SSC programs. A necessary condition for this recommendation is that regional training centers should not have management problems.

2. Possibility for Collaboration between the World Bank and JICA

(1) Use of JICA‘s SSC support for World Bank‘s funded Projects One possible SSC collaboration between the World Bank and JICA is for JICA to support capacity development in implementing projects that the World Bank would finance.

For example, in the power sector in Zambia, the World Bank would finance the implementation of increased access to electricity services project including mini-hydropower projects. However, the Zambian implementing agencies, i.e., REA and ZESCO, have limited experiences in the field of mini-hydro power development. In this situation, JICA could provide practical mini-hydropower training to Zambian counterparts in other countries such as Laos, using the SSC scheme. The collaboration can also be possible in PV solar training by Filipino experts, using South-South cooperation scheme. JICA‘s cooperation in implementing projects initiated by the SEETF is another possible area. This kind of collaboration could contribute to an effective implementation of World Bank financing projects.

A variation of this collaboration is the scale-up of JICA‘s good practices by World Bank funding. JICA has accumulated several good practices in capacity development in the electric power sector with South-South cooperation components. One of the major challenges is how to scale up the good practices. A possible collaboration between the World Bank and JICA can be seen in this area. When the World Bank views JICA‘s pilot project as promising and deserving to expand, the World Bank can finance the scale-up of the project. This was done in the electrical power sector development in Lao PDR in which large-scale rural electrification program was launched by the World Bank based on JICA‘s renewable energy pilot project. If the World Bank wants to expand this kind of program further to other countries including the African region, JICA could collaborate with the World Bank to support the electrification program through capacity development such as policy, planning, and operation and maintenance support with its South-South cooperation schemes.

(2) Joint or Parallel Co-financing of SSC projects Another area for collaboration between JICA and the World Bank is the co-financing of SSC projects. This kind of collaboration is already seen in a project, entitled

―Laos-Ghana-Zambia – Learning on road maintenance‖. In this project, in order for Lao government to establish a sustainable financing mechanism to ensure adequate funding for road maintenance, the World Bank hosted workshops and prepared economic studies for the Lao government to share cases of best practice in financing road maintenance. World Bank identified Ghana and Zambia as ideal partners and mobilized trust fund money to fund a study tour comprising a delegation of key Lao government officials to Ghana and Zambia in February 1999. After the Lao government established its own Road Maintenance Fund (RMF), the World Bank supported road maintenance capacity development and works execution through the IDA-funded Road Maintenance Program. Today, the RMF covers the maintenance of Lao PDR's entire national road network and a portion of the local road network. RMF revenues are expected to reach a sustainable level by 2015.

The IDA has been the lead donor to support the Road Maintenance Program in Lao PDR. The program has been co-financed by the Swedish SIDA, ADB, and Japan (through PHRD). The successful collaboration of IDA, SIDA, ADB, and Japan has helped lay the foundation for government-donor coordination and aid effectiveness. This kind of collaboration is possible in many SSC projects/programs.

(3) Collaboration in Knowledge Sharing Knowledge sharing activities are some of the major functions of the World Bank as an international development organization in promoting SSC. The activities include: - Compiling and Disseminating Information - Analyzing SSC Issues - Exchange Experiences and Views - Convoking Public Conferences

JICA and the World Bank could collaborate in these activities. For example, one of the major barriers to the promotion of SSC today is the lack of systematic information on supply and demand. The required information reflects not only the needs of beneficiary countries, but also possible areas for cooperation to be provided by emerging donors. For an effective match making, information on the supply side is critical. In this respect, JICA and the World Bank have country offices in many developing countries; therefore, it will not be difficult to collect information regarding the strengths and good practices of emerging donors. The information sharing in this field may lead to the establishment of an effective information system that enables beneficiary countries to determine resource availability and select appropriate cooperators.

In addition, co-hosting of international conferences on SSC support can be another area for collaboration. In this respect, one of the JICA‘s tools to support South-South cooperation is the hosting of international conferences. For example, in 1998, the

Japanese Ministry of Foreign Affairs and JICA jointly held a conference in Japan to share SSC support experiences and know-how, clarify common issues in implementing support programs, and examine new systems and procedures related to SSC implementation. Representatives from 15 countries actively promoting SSC agenda in Asia, Latin America, and Africa participated in the conference. JICA also held a symposium with UNDP entitled ―Developing Cooperation in the 21st Century – Supporting for South-South Cooperation‖ in 2001. Since the convocation of large public conferences is also one of the activities of the World Bank for dramatizing major issues, collaboration in this field enables the two institutions to work toward global consensus about what should be done in the hope of promoting South-South cooperation in the long term.

3. Keys to Successful Triangular Cooperation (T-SSC)

The success of SSC projects depends on how they are planned and managed, and by taking full advantage of the strengths of SSC while at the same time minimizing its risks and weaknesses. Based on the analysis of JICA‘s good practices30, the strengths and weaknesses of the triangular cooperation type of SSC (T-SSC)31 are discussed here, together with their implications on project implementation.

(1) Strengths of T-SSC First, T-SSC can contribute in scaling up the impact of traditional donor projects by transferring successful aid experience to third countries 32 . For example, in SMASSE-WECSA (―The Strengthening of Mathematics and Science Education – Western, Eastern, Central and Southern Africa‖), JICA first started bilateral cooperation with Kenya, and now the program has impacted the teaching methodology in secondary education in 33 countries. The case of SMASSE-WECSA offers concrete evidence that T-SSC is able to contribute to aid effectiveness by scaling up the effects of traditional and emerging donor projects (See also ―Brazil-Angola-Japan – Building Capacities at the Josina Machel Hospita‖ and ―The TAISHIN ‗Earthquake-Resistant Popular Housing‘ Project.‖)

Second, T-SSC can increase aid efficiency. Traditional donors can reduce costs by contracting experts from emerging donors as shown in the TAISHIN project. In addition, the case of JARCOM (The JICA-ASEAN Regional Cooperation Meeting) shows that

30 See Appendix 3 for the details of good practices in JICA‘s SSC support. 31 Triangular cooperation is a special type of South-South cooperation in which there are at least three actors involved in T-SSC projects/programs: traditional donors, emerging donors, and beneficiary countries. 32 Guido Ashoff ―Triangular Cooperation: Opportunities, risks, and conditions for effectiveness‖ in Development Outreach, World Bank Institute, October 2010

T-SSC can reduce transaction costs for emerging donors if traditional donors share the burden in managing SSC projects with emerging donors. In this program, since JICA was largely in charge of managing different and sometimes conflicting priorities which were complex but unavoidable tasks in SSC, transaction costs for emerging donors were eased, enabling them focus more on project substances. In this case, T-SSC reduces not only total budget for traditional donors but also transaction costs for emerging donors33.

Third, T-SSC can facilitate the localization of outside knowledge. In SMASSE, for instance, Japan‘s methods of teaching at classrooms and of teacher training were first introduced in Kenya. After Kenya‘s counterparts internalized the knowledge of Japan34, they transferred their localized knowledge to neighboring countries. In the process of interaction and mutual learning, the localized knowledge should be further modified when it is applied in different countries. If this is the case, triangular cooperation can facilitate the localization of traditional donors‘ knowledge in beneficiary countries.

Fourth, in T-SSC, beneficiary countries are likely to get more appropriate solutions to their development problems. This is because countries at similar stages of development are also likely to rely on similar technologies, which are likely to be more appropriate to them than technologies adopted in more industrialized countries. This benefit can be seen in the project called ―AsDB Cambodia Vietnam – Twinning of Water Utilities.‖

Fifth, beneficiary countries can benefit from the linguistic and cultural similarities with emerging donors. Linguistic similarities tend to facilitate knowledge exchange between the personnel of emerging donors and beneficiary countries. Common cultural 'traits' may also facilitate the exchange of development experiences which are likely to be more culturally appropriate than the practices found in industrialized countries (ex. ―Brazil-Angola-Japan – Building Capacities at the Josina Machel Hospita‖, ―The TAISHIN Project‖, and ―AsDB Cambodia Vietnam – Twinning of Water Utilities.‖

While there are many strengths and benefits of T-SSC, there are also risks in this approach.

(2) Risks of T-SSC First, there is a risk of lowering the quality of assistance programs. This may happen if some emerging donors still do not have the sufficient experience and capacity to manage

33 This means however that T-SSC may increase transaction costs for traditional donors as indicated in the next section. 34 For example, the program emphasizes the use of locally available resources to improvise teaching /learning materials that enhance learner participation and scientific skills. Since locally available resources are different in Kenya and in Japan, Kenya‘s counterparts had to find and choose the most appropriate resources which were available locally. This process should be repeated in other countries too.

57 assistance programs35. There are two types of capacity required of donors, i.e., thematic and aid management capacity. Even if some emerging donors have thematic expertise, if they do not have sufficient experience to manage aid projects/programs, they may face the risk of lowering the quality of their assistance.

Second, T-SSC programs can become supply-driven. There is a risk that some triangular cooperation programs might be primarily designed to reflect the preferences of traditional and emerging donors, neglecting the needs, priorities, and strategies of beneficiary countries36.

Third, T-SSC tends to raise transaction costs for traditional donors. This is because three or more actors (instead of two as in traditional cooperation projects) have to adopt a common approach, agree on common procedures, and create the legal, institutional, and budgetary conditions required for successful project implementation37.

Fourth, in addition to these risks, T-SSC is beset by other problems, including the lack of data-base and sufficient fund. At present, many donors, emerging donors, and international organizations do not have a systematic database on the needs for T-SSC programs by the least developing countries as well as on what area and how provider countries can share with others. Moreover, despite a high interest in T-SSC, its fund has not yet become a central component of the total budget of major donors and international organizations. Therefore, T-SSC programs/projects tend to be small in scale, and impact.

(3) Implications Based on the analysis of JICA‘s good practices in SSC support, the following factors seem to be vital to maximize the strengths and minimize the risks of T-SSC:

 Align with national policy and strategies. Alignment with national policy and strategies is important because this is the base of national ownership, leadership, and political support. The supply-driven tendency of T-SSC can be reversed to make it demand-driven by aligning T-SSC programs with national priorities and programs (ex. ―Laos-Ghana-Zambia – Learning on Road Maintenance‖ and ―The JICA-ASEAN Regional Cooperation Meeting – JARCOM).

 Promote Ownership. There are several factors found in the analysis of JICA‘s good practices in SSC support that contribute to building ownership of T-SSC programs

35 ―Triangular Cooperation‖, Buido Ashoff, in Development Outreach: South-South Opportunity, World Bank, October 2010 36 Ibid. 37 Ibid.

by participating countries38.

1) Demand driven approach combined with supply driven measures A demand driven approach is key to build beneficiary countries‘ ownership. However, a supply-driven approach should also be combined to establish a practical matching system. In JARCOM, for example, provider countries were encouraged to pre-announce their aid policies and priority cooperation sectors to enable beneficiary countries to determine resource availability and select appropriate cooperators. By encouraging approaches from both sides, JARCOM sought a ―better match‖ if not the best (see Box 2 and Appendix3).

2) Balance among diverse needs of different countries Countries tend to have different interests in participating in T-SSC programs. For example, recipient countries may see the programs as an opportunity to request training courses tailored to their national development needs which were necessary for catching up with advanced regional members. On the other hand, middle income countries in transition from being aid recipients to becoming ―donors‖ may want to enhance their aid schemes and establish their status in the region. Therefore, to promote T-SSC programs, it is important to balance the diverse needs of different countries, and create a win-win situation for both sides39.

3) Equal partnership through mutual learning Building equal partnership between emerging donors and beneficiary countries is key to the success of T-SSC programs. In this respect, all participants should be treated equally and special attentions should be paid to promote the active participation of beneficiary countries from the early stages of the programs. Another way of promoting equal partnership is to find good practices in beneficiary countries, and creating places for mutual learning among participants (ex. ―The Third Country Training Program on Promotion of Rural Electrification in CLMV Countries‖).

4) Participatory and transparent decision-making process Participatory and transparent decision-making process is likely to build trust among participants, thus enhancing ownership of the programs by participating countries. One of the key factors of JARCOM‘s success, for example, was its establishment of a participatory and transparent decision-making process in matching needs to resources, as well as in project

38 See Appendix 3, especially ―The JICA-ASEAN Regional Cooperation Meeting (JARCOM).‖ 39 See for instance the decision making process of JARCOM

implementation and monitoring.

5) Joint management of results Related to 4), in JARCOM, the status of project formulation was jointly monitored by all actors. Quarterly monitoring reports submitted by each country were compiled and re-circulated. In case the process faced any problem, the JARCOM Secretariat advised the concerned parties to clarify the status and take necessary actions. This kind of system ensured an impartial and transparent negotiation process and timely follow-up activities while nurturing program ownership40.

6) Peer pressure among emerging donors In T-SSC programs with multiple emerging donors, peer pressures among emerging donors can work positively to enhance ownership, thereby resulting in high-quality projects. This was also seen in JARCOM where peer pressures among ASEAN members worked positively in designing good projects.

7) Cost-sharing Cost-sharing can contribute to building ownership of T-SSC programs by participating countries. In JARCOM, for instance, JICA mostly bore the financial and coordination costs of JARCOM network management and annual meetings. For implementation, however, in addition to offering human resources, provider countries shared the training budgets at varying degrees (15-50%) depending on government capacities. Cost-sharing and implementation arrangements were bilaterally determined in partnership framework agreements signed between Japan and several pivotal countries41.

 Ensure management capacity. A weakness among some emerging donors is their lack of sufficient experience and know-how on aid management. As a core capacity for providing quality SSC/knowledge exchange, emerging donors need aid management capacity for project/program formulation, needs matching, M&E, aid information database, coordination among ministries and organization, and funding mechanism. As it takes some time to acquire this capacity, some newly emerging donors may not yet be ready to provide quality SSC/knowledge exchange. One of the strengths of T-SSC is that traditional donors can support newly emerging donors to ensure sufficient management capacity in assisting other developing countries (ex. ―The Third Country Training Program on Promotion of Rural Electrification in CLMV Countries.‖)

40 See Box 2 and Appendix 3 41 See Box 2 and Appendix 3

 Utilize strengths of twinning arrangement. Twinning arrangements can be a very promising method to promote T-SSC. ADB‘s experience (―AsDB Cambodia Vietnam – Twinning of Water Utilities‖) shows that sharing experiences between similar institutions (e.g., water utilities) in the same region is bound to increase the relevance of the experience itself, as issues are likely to be similar. It is also possible that countries at similar stages of development will rely on similar technologies, which are likely to be more appropriate to them than adopted in more industrialized countries. Furthermore, common cultural 'traits' may also facilitate the exchange of knowledge and experiences which are probably more culturally appropriate to their situation than the practices found in industrialized countries42. Furthermore, twinning arrangements have another advantage: experience shows that cooperation between similar institutions tend to last long and thus become more sustainable compared to traditional CD projects wherein cooperation between two entities is likely to finish when projects end.

 Identify existing good practices for scale-up. Given the tendency of T-SSC projects to become small scale and thus fragmented, attention should be paid to how they can be scaled up. One practical method is to identify good practices in developing countries and support their scale-up in other developing countries. For example, as indicated the previous section, Lao PDR has achieved impressive results in rural electrification over the last 15 years regardless of its difficult terrain, meager infrastructure, sparse population and lack of finance. Its experience in planning and construction of hydropower plants; formulation and implementation of strategies for rural electrification; its effective counterpart system; promotion and regulation of IPP projects; and mini-hydro and PV solar training are all relevant to many African countries when they address today‘s power crisis in the region. Therefore, efforts should be made to share through South-South cooperation Laos‘s experience with Sub-Saharan countries that face similar issues in the electric power sector (ex. ―Technical Cooperation: Zambia Investment Promotion Project – Triangle of Hope,‖ ―JICA Technical Cooperation Project on Rural Power Study for Improvement of Efficiency,‖ ―Total Quality Management for Better Hospital Services: A Holistic Approach to Utilizing Existing Resources,‖ ―‖Laos-Ghana-Zambia – Learning on Road Maintenance.‖)

 Utilize existing regional networks. For scaling up of T-SSC projects, it is important to identify existing institutions that have effective network in the regional level. One of the successful factors of SMASSE-WECSA as a regional network for mathematics and science education is the existence of an effective regional training

42 See Appendix 3

center. Acting as a major counterpart and organizer of the program, the Center for Mathematics, Science and Technology Education in Africa played a significant role in scaling up the program significantly (from 11 member countries in 2001 to 33 countries in November 2009). As a result, over 1090 personnel from 27 beneficiary countries were trained in this program. Moreover, many member countries could set up sustainable INSET (In-Service Education and Training) systems and CD programs introduced by the project for their teachers and education managers.

In sum, although T-SSC is a potentially promising way to develop capacities of developing countries, it also has many pitfalls. T-SSC programs/projects should therefore be designed and managed in such a way as to overcome those problems.

4. Further Studies

Finally, the following studies are suggested to facilitate the present global movement of South-South cooperation and to promote it more effectively.

(1) Study on Emerging Donors This study on South-South cooperation is a preliminary attempt at determining effect and mechanics of this scheme. The study collected information on good practices of JICA‘s SSC support and analyzed the factors that lead to their success. Since the study dealt with JICA‘s projects, study results are relevant mainly to the triangular form of SSC. To grasp the whole picture regarding technical cooperation between developing countries, there is a need to study emerging donors‘ policies and programs, their strengths and weaknesses, as well as their need for support from traditional donors. The study may also include the policies and programs of regional organizations regarding South-South cooperation and the problems they face in implementing their programs.

(2) Study on SSC in Fragile States One of the areas that South-South cooperation can be applied effectively is in supporting the capacity development of fragile states. This is because countries with similar stage of development as well as similar language and culture as theirs are expected to provide them with more appropriate assistances than advanced industrialized countries. From this perspective, a study is required to survey the present situation of South-South cooperation for fragile states, assistance policies and programs of emerging donors and neighboring countries, their strengths and weaknesses, and their need for support from traditional donors.

(3) Follow-up Study on Suggested SSC Projects In this study, several SSC projects are suggested in order to address today‘s power crisis in Sub-Saharan Africa. This includes knowledge-sharing projects between Lao PDR and Zambia regarding capacity development for mini-hydro and PV solar programs in Zambia. If proposed programs are implemented in the future, the follow-up study should be conducted to evaluate SSC programs between Laos and Zambia. The study can provide valuable lessons for the expansion of knowledge sharing between Asia and Africa in the future.

(4) Study on Effective SSC Matching Mechanism One of the major challenges facing the international aid community is the creation of effective matching mechanisms that connect the desire to share with the desire to learn among developing countries. For matching mechanisms to work, systematic information on ―who desire to share what‖ should be collected first, so that beneficiary countries can determine resource availability and select appropriate cooperators. To this end, there is a need to study existing matching mechanisms at the global and regional level, and to analyze their strengths and weaknesses to find out the most effective and workable system. The study should includes an analysis of matching mechanisms practiced by regional organizations, such as the Asian Development Bank, the Inter-American Development Bank, the Organization of American States, ASEAN, and other regional organizations that are active in this field. The proposed study should also include an analysis of policies, programs and needs of emerging donors as well as of the matching mechanisms of JARCOM and the Capacity Development for Development Effectiveness (CDDE) Facility.

(5) Study on JICA‘s and other Donors‘ Good Practices in SSC Support Appendix 3 provides the preliminary analysis of 10 good JICA practices in SSC support as well as projects supported by Asian Development Bank and the World Bank in collaboration with Japan. Due to time constraints and the lack of sufficient information, a thorough analysis of good practices could not be conducted. A more systematic analysis of aid effectiveness and capacity development is required in order to draw lessons for future SSC support. Additional study is also required to analyze SSC policies, programs and good practices of other donors, such as Germany and Netherlands in order to facilitate the spread of triangular cooperation and South-South cooperation in many parts of the world.

References

Douglas F. Barnes (eds.) - The Challenge of Rural Electrification: Strategies for Developing Countries, RFF Press, Washington DC, 2007 Hiroshi Inoue - Historical Developments of the Electric Power Industry in the US, 2008 Japan Electric Power Information Center, Inc. - ―History of the Electric Power Industry in Japan‖, March 1988 - ―The First Electric Power Historical Museum Project in Japan‖ Jose Goldemberg - ―Rural Energy in Development Country‖ Kafue Gorge Regional Training Center - Training Prospectus 2006 KRI International Corporation - Nam Ngum Dam: After 30 Years on Operation, 2006 Lao PDR - Lao Power Sector Policy: Strategy for Implementing Sector Strengthening, Draft 6, March 2002 Media Global - South-South in Action, Summer 2009 Ministry of Industry and Handicraft, Lao PDR - Demonstration Project for Micro Hydropower Technology in Lao People‘s Democratic Republic: Project Report, March 2004 Norconsult International A.S. - Rural Electrification Sector Review and Policy Formulation for Lao PDR: Draft Final Report, September 1995 NTPC - Nam Theun 2 Hydroelectric Project: Laos Moving Forward, 2006 - Nam Theun 2 Power Company Paul Wolman - ―The New Deal for Electricity in the United States, 1930-1950‖ in Douglas F. Barnes (eds.) The Challenge of Rural Electrification: Strategies for Developing Countries, RFF Press, Washington DC, 2007 Rural Electrification Authority (REA) - Strategic Plan for the Rural Electrification Authority: 2009-2013, February 2010 - Annual Report 2008 Talaat Abdel-Malek - ―South-South Knowledge Exchange as a Tool for Capacity Development‖, by Talaat Abdel-Malek, in Development Outreach: South-South Opportunity, World Bank,

Oct. 2010 The Institute of Energy Economics, Japan & Tokyo Electric Power Company - History of Power System Development and Current Status of Japanese Power Industry, 2008 Tokyo Electric Power Company - Construction Record Houay Xe Hybrid System Power Station in Laos, December 2005 UNDP - Capacity for Development: New Solutions to Old Problems , 2002 World Bank Institute - South South Exchange: Case Studies (CD) - Focus on South-South Knowledge Exchange - Development Outreach: South South Opportunity, October 2010 - Focus on Capacity Development for Lasting Results, - Institutional Capacities and Their Contributing Characteristics - South-South Knowledge Exchange Result Template - SEETF Closed Portfolio (From inception to December 31, 2010) - SEETF: Approved Grants/Grants in the Pipeline as of December 31, 2010 - SEETF: Guidelines and Operating Procedures for Application, Approval and Execution of Grants of the Multi-Donor - Capacity Development in Action - Partnering for Capacity Development - South-South Experience Exchange Facility (SEEFT): Knowledge and Experience Exchange between policy makers and practitioners in developing countries, April 2009 - Connecting globally, catalyzing change locally, - The Capacity Development Results Framework: A strategic and results-oriented approach to learning for capacity development, June 2009 - ―South-South Knowledge Exchange as a Tool for Capacity Development‖, by Talaat Abdel-Malek, in Development Outreach: South-South Opportunity, World Bank, Oct. 2010 World Bank - ―Africa Infrastructure Country Diagnostic - Underpowered: The State of the Power Sector in Sub-Saharan Africa‖, May 2008 - Africa‘s Infrastructure: A Time for Transformation, Chapter 8, ―Power: Catching Up‖ JICA - Capacity Development Handbook for JICA Staff, Task Force on Aid Approach, JICA, March 2004 - ―Committee for the Promotion of Cooperation on Electrification Using Renewable Energy Report‖, March 2001

- Comparison of Electric Power Technical Standards and Policy Making for Technical Cooperation: Guideline, March 2006 - Thematic Guideline on South-South Cooperation, JICA, January 2005 - Final Report (Executive Summary): The Third Country Training Programme 2008 on Promotion of Rural Electrification in CLMV Countries From 30th Jan. to 6th Feb., 2007 in Vientiane, in Lao P.D.R. - Final Report (Executive Summary): The Third Country Training Programme 2008 on Promotion of Rural Electrification in CLMV Countries From 10th Dec. to 19th Dec., 2007 in Vientiane, in Lao P.D.R. & Mondul Kiri, Cambodia - Final Report (Executive Summary): The Third Country Training Programme 2008 on Promotion of Rural Electrification in CLMV Countries From 8th to 16th December, 2008, in Lao P.D.R. - Partnership Program - JICA Profile, Sep.2009 - JICA‘s World （特集：新たな国際協力の世界－新興ドナーとつくる未来）、Jan. 2011 No.26 - Project for the Improvement of Power Sector Management (IPSM) in Lao PDR, New Letter No.1, Dec, 2010 - Outline of the Electric Power Industry in Japan (CD) 日本の経験―日本の電力産業発展の歴史 - JICA‘s Support for South-South Cooperation: Challenge to Inclusive and Dynamic Development with New Partners, Dec 2009 - Minutes of Meeting for the Project Formulation Study on The Master Plan Study for Small Hydropower Development in the Northern Part of the Lao PDR, March 12, 2003 - Minutes of Meeting for Project Formation Study on Photovoltaic Rural Electrification Project in the Lao People‘s Democratic Republic, Nov. 1997 - SSC in the Context of Aid Effectiveness: Telling the Story of Partners in South-South and Triangular Cooperation Produced for the Task Team on South-South Cooperation, March 2010, www.southsouthcases.info - 『鉱工業プロジェクト形成基礎調査報告書（ラオス太陽光発電地方電化計画調査）』 1998 年 - 『ラオス人民民主共和国北部小水力発電計画策定調査（プロジェクト形成基礎調査報告書）』、平成 15 年 3 月 - 『ラオス人民民主共和国電力技術基準プロジェクト事前調査団報告書』平成 11 年 4 月 - 『総合分析（電力分野）報告書』平成 21 年 3 月、産業開発部電力・エネルギー課 - 『ラオス国電力基準促進支援プロジェクト終了時評価調査報告書』平成 19 年 9 月 - 『ラオス国送変電設備マスタープラン調査ファイナル・レポート』平成 14 年 9 月、日本工営株式会社／東京電力株式会社 - 『アフリカ地域（南部／東部アフリカ）電力セクター域内協力にかかるプロジェクト研究ファイナルレポート』平成 20 年 11 月

- 「サブサハラ・アフリカ地域におけるエネルギー・電力分野に対する協力方針」、産業開発部／アフリカ部、平成 20 年 9 月 - 「電力分野における JICA の取り組みと課題、今後の方針」、産業開発部資源・エネルギーグループ電力・エネルギー課、平成 20 年 9 月 - 「アフリカ地域での電力分野の取り組み事例－技術協力プロジェクト「効率的な送配電系統のための能力開発プロジェクト」 - 「アフリカ地域（南部／東部アフリカ）電力セクター域内協力にかかるプロジェクト研究」産業開発部電力・エネルギー課、平成 20 年 9 月石黒正康 - 「開発途上国の電力セクター改革に関する ODA 支援のあり方」井上友幸、朝倉立行、佐々木敏雄 - 「ラオスのエネルギーと電力の現状と今後の動向」IEEJ: 2003 年 10 月橘川武朗 - 『日本電力業発展のダイナミズム』名古屋大学出版会、2005 年佐藤渉 - 「ザンビア国電力セクター支援概要」平成 20 年 9 月佐藤恵一 - 「電力セクターの現状と将来」、鈴木基義編著『ラオスの産業基盤』、JICA ラオス事務所、2008 年社団法人海外電力調査会 - 『平成 21 年度カンボジア・ラオス電力事情調査報告書』、平成 22 年 3 月、電気の資料館 - 『電気は人なり－電気事業に生命を賭けた男たち』平成 19 年 - 『電気は人なり』平成 19 年世界銀行東京事務所 - 『世銀借款回想』、1991 年 11 月古市正敏 - 「ASEAN5 カ国と中国の電力事情－統計指標にもとづく考察－」JOI, 2003.7

APPENDIXES

Appendix 1: The History of Electric Power Industry in Japan

Around 130 Years of the history of Japanese electric power industry can be grouped into the following five eras: (1) era of establishment, (2) era of electrification, (3) era of state control, (4) era of reconstruction and high growth, and (5) era of stable growth, structural change and deregulation (see Table A.1).

Figure A.1: Trend in Japan‘s Generation Capacity (1890-1970)

(1) (2) (3) (4) (5) ------Era

Era of Establishment (1883, 25 years)

During the Meiji period after the isolation during the Edo period, Japan absorbed the institution and technology of developed countries by sending delegations to Europe and the U.S., hiring foreign experts, and sending students to developed nations at government expense. In the electric power sector, the British Elton was invited as a professor of the Imperial College of Engineering (the predecessor of Tokyo University, Faculty of Engineering). He started electrical engineering courses and trained personnel who would become future leaders of electric engineering in Japan.

In 1887, five years after Thomas Edison began his lighting business in 1882, Tokyo Electric Lighting Co. (TEPCO), Japan‘s first electric utility, started supplying electricity to Nihonbashi district, Tokyo. Mr. Fujioka, a graduate of the Imperial College of Engineering, worked as chief engineer at TEPCO. As a result, business areas such as Ginza and Kayabacho were illuminated. This was a business model consisted of

Era ofEra slower growth (1973-1985). Structural change (1985-1995), and Deregulation (1995-) 100% 84GW(1973)-154GW(1985)- 234GW(2007) Best Mix.Regional interconnection 1973, 1979 Oil 10Crisis - 20 - 40USD 1973 Agency of Natural Resources and Energy (MITI) 1974 3 Power Development Laws 1985 Oil price down -18 1995 NewIPP(Wholesale supplier) 1997 law EIA 2000 PPS(Power Producer and Supplier) 2005 JapanElectricPower Exchange (JEPX) and Electric Power System Council of (ESCJ) Japan 2007 -2011 Oil price up 80 to 120 Era ofEra reconstruction and high growth (1951-1973) 95% 10G-84G Large Thermal & Power system Industry, Commercial, Resident 1951 intoDivided 9 EPCOs (1972 Okinawa 10 EPCOs) 1952 EPDC(J-Power) -Sakuma HPG 1956 JapanAtomicPower CO(JAPC) - Tokai(1963,1966)(166MW) 1959 Central PowerEletric Council BUSD 0.8 9/32 WBG 1953-1966 -Tanagawa TPS(75MW) -Kurobe 4 HPS(86MW) -Miboro HPS(215MW) 1967 Basic law for environmental pollution control 1971 Environmetal Agency Era ofEra state control (1939-1951) 90% 7GW Consolidate Frequency, Broad TL Integrity DL 1939 Electric Japan Generation and Transmission Co. (JEGTCO) Era ofEra electrification (1907-1939) 2%-10%(1910)-25%(1913)- 50%(1920)-90%(1930) 46MW-7,249MW Hydor & HVAC Industry, Commercial 1907 Komabashi HPG(15M) with HVAC(55kV) 1915 Inawashiro HPG with 115kV 1932 powerElactric association (Big Five EPCOs) Era of Era establish (1883-1907) 0%-2% 25kW-46MW coal-firedSmall Lightining for commercial 1877 Institute of Technology 1883Tokyo Electric Lighting Company 1887 (25kW)@NihonbashiTELC 1891 Keage HPG(80kWx2)@Kyoto Tram to Fushimi(6.6km) 1895 Asakusa 50Hz TPG 1903 60 ELCOs Table A.1: History of the Electric Power Industry in Japan Era Erectrification GW Power system Demand Events Source: History of the electric power industry in JEPIC(1988),Japan, ofReport Electric power historical museum, TEPCO(2007)

A2 small thermal power plants and mini-grids, which spread to cities such as Osaka, Kyoto, and Nagoyo. After the opening of TEPCO, many utilities started in many cities (60 companies in 1903). Although demand increased rapidly, service was generally limited to government and commercial offices as well as factories. The high price of electricity was a barrier to its growth.

In 1891, the first hydroelectric power in Japan started operation in Kyoto. This station supplied power for lighting, textile factories, and for Japan‘s first streetcar projects (interval: 6.6 km). The construction of hydroelectric power station was also led by a graduate of the College of Engineering, Mr. Tanabe Sakuro.

Era of Electrification (1907 - 30 years)

The turning point in promoting rapid electrification was the establishment of a hydroelectric power plant in Katsuragawa River (capacity = 15MW). The introduction of high-capacity hydroelectric plants and the technology of long-distance AC high-voltage transmission lines led to affordable and stable power supply in the Tokyo metropolitan area.

As a result of the spread of this business model, Japan‘s electric power industry shifted from thermal-centered to hydropower centered after 1911. The industry entered into a period of severe competition among over 3,000 private utilities, which saw mergers and acquisitions due to oversupply during the recession. As a result, in 1926, the industry entered an era which saw the five big power companies with sufficient capital and development funds competing fiercely by lowering prices in major consumption areas.

During the Meizi and Taisho eras, when electric meters were not yet available, the price of electricity was fixed and power pilferage was common. When hydropower was developed, its consumption by textile factories, mines and steel mills, among their industrial users increased. As a result, power demand also increased during the day.

Era of State Control (1937, 15 years)

At the start of the war, the power industry was controlled by the government. Japan Electric Generation and Transmission Co. which was established in 1939 controlled power generation and transmission business in Japan. Nine distribution companies were also established in 1941.

In order to reduce power loss and promote the effective use of power facilities, Japan Electric Generation and Transmission Co. constructed a super-power network, which included the construction of transmission facilities between regions, and the elimination of the dual facilities. In addition, distribution lines for day and night were unified and centralized.

Figure A.3: Trend in Power Loss (1951-2000) 40 Total Loss (%) Transmission & Distribution Loss (%)

Loss Loss (%)

8.5 10

5.1

0 1951 1960 1970 1980 1990 2000

Era of Reconstruction and High Growth (1951, 35 years)

After World War II, the Council for Reorganization of Electric Utility Industry, led by Mr. Yasuzaemon Matsunaga, developed a framework for a post-war electricity industry. In 1951, the nation was divided into nine blocks, each with its own privately owned electric power company. In addition, the Electric Power Development Co. Ltd. (EPCO) acted as a quasi-governmental corporation, using public funds to promote the development of large-scale hydroelectric power stations and transmission systems between EPCOs.

As a member of the public utilities committee, Matsunaga also proposed an increase in electricity tariff. Tariffs increased by 30% in 1951 and 28% in the next year. This enabled utilities to run as self-sustaining businesses because of improved finances. As a result, power utilities engaged in capital investments and succeeded in reducing costs through the construction of large thermal power plants, which in turn allowed utilities to keep electricity prices unchanged for a long time.

In response to the period of reconstruction and rapid growth, modern high-capacity electric power facilities were introduced using loans from the World Bank and others. Loans were used to develop large hydropower and thermal power plants, such as the Sakuma (87.5MW x 4unit), Kuroyon (86MW x 3unit), and Miboro (215MW x 2unit) hydropower plants, as well as Tanakawa (75MW), Karita (75MW), Yokkaichi (66MW), Sinkokura (156MW) thermal power plants. In the 1960s, thermal power plants utilizing inexpensive oil, rather than hydropower, became the staple of electric power industry in Japan.

Figure A.4: Trend in Hydro and Thermal Generation Unit Capacity (MW)

Thermal (MW/unit)

Hydro (MW/unit)

As a result of pollution problems in the 1960s and the two oil crises in the 1970s, the government promoted the increase use of nuclear power (Mihama PWR: 340MW and Fukushima BWR: 466MW), decreasing the use of petroleum. In addition, the government encouraged the diversity of electricity sources such as the liquefied natural gas (south of Yokohama), imported coal (Matsushima), and pumped hydropower, while new technologies were introduced by power utilities.

Figure A5: Figure A6: Generation Capacity Configuration (1975) Generation Capacity Configuration (1985)

Hydro 7% Hydro 3% 16% Coal Coal 22% 25% LNG LNG Petroleum Petroleum 3% LPG&others LPG&others Nuclear Nuclear 7% 5%

5% 33% 55% 19%

Source: JEPIC (2007) Source: JEPIC (2007)

Era of Stable Growth, Structural Change and Deregulation (1985 - 25 years)

Since the Plaza Accord was reached in 1985, Japan has experienced the transition period of its economic and social structure wherein many Japanese firms have expanded their operation overseas due to the stronger yen. In the electric power sector, the liberalization of the industry has been promoted due to issues on power efficiency including gaps between domestic and foreign prices. Some of the measures taken to address power issues included the entry of new IPP companies and the establishment of an electricity market system. However, since 2000, these institutional reforms have been reexamined based on the experience of power blackouts in the U.S. and Europe.

Since the Rio Summit on environment was held in 1992, new institutional and technological measures have been introduced in response to climate change. The measures include a buyback program for the promotion of renewable energy and load leveling for energy efficiency.

The introduction of smart communities which combine ICT and storage technologies has also been examined in metropolitan areas such as Yokohama, Nagoya, Keihan, and Kitakyushu.

Table A.2: Highlights in the History of Electric Power Industry in Japan

- Localization of foreign technology by young engineers and manufacturers - Research on the latest overseas technology on electric power by the Introduction of central research institute 1 foreign technology - Combination of pre-service (Department of Engineering in universities, and Technical College of Engineering) and in-service (recruitment, placement, OJT, Off-JT) training

- Development of hydropower and AC high-voltage transmission Introduction of new technology business model by - Large power generation capacity (thermal power generation in private sector (cost particular) 2 reduction efforts - Introduction of DSM (e.g., idea of a smart grid) and optimum power through technical supply configuration and financing - Financing through loans and own funds (corporate bonds, etc.) innovation)

1) Electrification promotion (1920-1960s) - Based on economies of scale, profit was reallocated from the city to rural areas, and from export to domestic needs. 2) Stable power supply (1970s-1990s) - 3E approach, composed of industry structural change, Government diversification of energy sources, as well as environmental and 3 intervention (policy social considerations and regulation) - Response to uncertainties such as oil crisis 3) Power sector reform (1995 -) - Reduction in electric tariffs through gradual liberalization in order to promote efficiency in the power sector

Appendix 2: The History of Rural Electrification in the United States

In the mid-1930s, rural areas in the United States lagged significantly behind metropolitan centers in development. U.S. agriculture suffered from a long-term depression. Electrification of rural households was only 10% compared with almost 85% of urban households43. This inequality of U.S development in the early twentieth century resembles that of many of today‘s developing countries. In this section, following Paul Wolman analysis on ―The New Deal for Electricity in the United States, 1930-1950‖, the US experience of rural electrification will be examined to draw some lessons for today‘s rural electrification programs in developing countries.

In the United States, large corporate utilities did not lead rural electrification. Rural electrification, instead, grew from locally run nonprofit cooperatives advised and financed by a federal agency, the Rural Electrification Administration (REA). Another federal agency, the Tennessee Valley Authority (TVA), built hydroelectric and flood control projects in the lower Mid-west and South and provided low-cost power for more than a quarter of the early cooperatives. With federal assistance, rural electric cooperatives grew within the initial 20 years of the U.S. rural electrification program‘s founding to serve more than 4 million of the nation‘s poorest and most dispersed people. With its emphasis on federal-cooperative partnership, rural electrification in the United States increased during this period from about 13% to 94%44.

The stunning achievement of the cooperatives as the engines of rural electrification in the United States could be attributed to several factors45.

(1) Simplicity and Popularity of Governance Model of Cooperative Simplicity and popularity of governance model of cooperative, and government assistance made cooperatives attractive. The governance model (Rochdale principles) was easy to understand as an operating and governance model of cooperative. Within this framework, the desire of independent farmers to create an organization largely under their own control contributed to the popularity of cooperatives. Many farmers saw the cooperatives as the only way they were likely to get power and as a door into a modernity and convenience now increasing apparent in the cities. ―We don‘t see how we lived without it‖ was a frequent refrain, along with ―We would never have had it if it hadn‘t been for the cooperative46‖. Just like in developing countries now, electrification

43 ―The New Deal for Electricity in the United States, 1930-1950‖, Paul Wolman, p259 in Douglas F. Barnes (eds) The Challenge of Rural Electrification: Strategies for Developing Countries, 2007 44 Ibid. p259 45 Ibid. p289-290 46 Ibid. p289

A8 made a real difference in people‘s lives in the United States then – particularly the lives of low-income people – with incandescent lighting enabling the extension of family life, education, and social activity past dark.

(2) The Security of Federal Financing and Technical Assistance The TVA and REA ensured that the cooperatives could obtain low-cost financing and necessary technical skills on run an electricity business. This assistance helped ease rural residents‘ suspicion of authority while providing protection and expertise they lack.

A dual ―top-down‖ and ―bottom-up‖ principle Cooperatives are operated by a dual ―top-down‖ and ―bottom-up‖ principle. In the top-down approach, the central REA supplied financing and expertise an system design, construction, and management. The REA‘s customized attention to cooperative construction, governance, accounting, operation, and maintenance was itself a form of education that private utilities by definition did not provide. On the other hand, this REA‘s role was complemented by local involvement (the bottom-up part). Members or employees became indispensable in building the distribution lines (including creating rights of way, tree trimming, and brush clearing) and in managing and maintaining the system according to strict economies because of the low marginal profit rates and the REA requirement that cooperative use operating income strictly for maintenance, operating expenses, and debt amortization47.

(3) The REA Program‘s Economies of Scale The REA encouraged consumers‘ self-reading of meters and reporting by postcard; replication and standardization of other practices across cooperative; and some collective bargaining and common contract negotiations for line crews. In addition, the REA developed a joint Framework of Operations guiding negotiations between the Brotherhood of Electrical Workers and REA-financed cooperatives, including minimum wages and rules for hours and overtime.

(4) The Program Took an Egalitarian Area Coverage Approach The program encouraged the use of sweat equity in order to enhance participation of low-income households. Cooperatives allowed poor farmers to trade labor in-kind for investment in cash. Innovations at the household level also assisted cash-poor consumers – for example, through the widely replicated and inexpensive Arkansas Plan for electrifying poor households48.

47 Ibid. p290 48 Ibid. p290-291

(5) The REA and TVA Had Access to Low-Cost Power The TVA provided power to 27% of the existing cooperatives in 1941 at wholesale costs of 2-3cents/kWh. The TVA‘s presence in the market encouraged private lines to supply electricity at more competitive rates and terms for distribution, and exerted some pressure on private utilities with regard to wholesale electricity sales to cooperatives. Furthermore, the REA could make loans to a cooperative to build generation facilities in the face of utility recalcitrance to sell at standard wholesale rates, and did so in several cases (e.g., in Michigan) even before the 1944 Pace Act. After the Pace Act, the REA financed generation on a more extensive scale, which enhanced the economies of providing wholesale power to the cooperatives.

A10

Appendix 3: Good Practices in JICA‘s SSC Support

Table of Contents

Introduction ...... A12 I. South-South Knowledge Exchange Result Template ...... A13 II. Good Practices in JICA‘s SSC Support ...... A15 1. Technical Cooperation: Zambia Investment Promotion Project – Triangle of Hope (JIPP-ToH) ...... A15 2. JICA Technical Cooperation Project on Rural Power Study for Improvement of Efficiency ...... A19 3. The Third Country Training Programme on Promotion of Rural Electrification in CLMV Countries ...... A23 4. Total Quality Management (TQM) for Better Hospital Services: A Holistic Approach to Utilizing Existing Resources...... A28 5. The TAISHIN (―Earthquake-Resistant Popular Housing‖) project...... A30 6. Brazil-Angola-Japan – Building Capacities at the Josina Machel Hospital...... A33 7. The JICA-ASEAN Regional Cooperation Meeting (JARCOM), currently the Japan-Southeast Asian Meeting for South-South Cooperation or J-SEAM...... A37 8. The Strengthening of Mathematics and Science Education – Western, Eastern and Southern Africa (SMASE-WECSA)...... A44 9. Laos-Ghana-Zambia – Learning on Road Maintenance ...... A50 10. AsDB Cambodia Vietnam – Twinning of Water Utilities ...... A54

A11

Introduction

This appendix introduces 10 good practices in JICA‘s support for South-South cooperation. These 10 cases are selected from cases stories recommended by JICA, and organized based on the World Bank‘s template modified by the study team. The World Bank Institute collects and organizes examples of South-South cooperation based on the template as shown in page A13-14. By using a similar template, the Study Team hopes to give input to the World Bank‘s efforts to promote South-South cooperation.

The case stories of ―Technical Cooperation: Zambia Investment Promotion Project – Triangle of Hope (JIPP-ToH)‖ and ―JICA Technical Cooperation Project on Rural Power Study for Improvement of Efficiency‖ are examples of ―Third Country Expert ―(Type 1: Two-step Knowledge Exchange). ―The Third Country Training Programme on Promotion of Rural Electrification in CLMV Countries‖ and ―Total Quality Management (TQM) for Better Hospital Services: A Holistic Approach to Utilizing Existing Resources‖ are examples of ―Third Country Training‖ (Type 1). The next two case stories, ―The TAISHIN (―Earthquake-Resistant Popular Housing‖) Project‖ and ―Brazil-Angola-Japan – Building Capacities at the Josina Machel Hospital‖ are Type 2 supports (Joint Cooperation with Complementary Parallel Efforts). Type 3 support (Strengthening the Regional/Inter-regional Partnership) includes the subsequent two case stories, ―The JICA-ASEAN Regional Cooperation Meeting (JARCOM), currently the Japan-Southeast Asian Meeting for South-South Cooperation or J-SEAM‖ and ―The Strengthening of Mathematics and Science Education – Western, Eastern and Southern Africa (SMASE-WECSA).‖ The last two cases are projects supported by the World Bank (―Laos-Ghana-Zambia – Learning on Road Maintenance‖) and the Asian Development Bank (―AsDB Cambodia Vietnam – Twinning of Water Utilities‖), both of which were financially assisted by Japan.

A12

South-South Knowledge Exchange Result Template

Title: Funding Sources(s): Total Budget: ? Start Date: End Date: Sector(s): (multiple select…)

Non-World Bank Cases Key Contact 1: Organization: JICA Email: Key Contact 2: Organization: JICA Email: Key Contact 3: Organization: JICA Email:

SUMMARY 1. Please provide a 1-2 sentence summary of the exchange. Include the principle exchange instrument, main audience, and objective.

PARTICIPANTS 2. What were the knowledge recipient country(ies)? (If recipients were also knowledge providers in this exchange, also list them in question 4.)

3. From these countries, who was targeted to learn through this knowledge exchange?

4. What were the knowledge provider country (ies)? (If providers were also knowledge recipients in this exchange, also list them in question 1.)

5. Who/what institution(s) from the knowledge providing country(ies) transferred knowledge in this exchange?

6. What was the strategic context of this exchange? (includes broad development goal, key capacity challenges, and rationale)

7. What was the primary objective of this exchange? (i.e. the capacity development or learning objective)

A13

8. Briefly describe how knowledge was exchanged, including the principal instruments and sequencing of activities.

8.1. Select the knowledge exchange instruments used in this exchange.

Study Tour Video Conference Series Twinning Communities of Practice Competitions Summits and Conferences

9. Specify the outcomes of this exchange relative to the stated objectives. Include indicators. Please also describe any unintended outcomes, good or bad. Where appropriate include intermediate capacity outcomes achieved.

9.1 Select the intermediate capacity outcomes achieved that resulted from this

knowledge exchange.

Raised Awareness *Enhanced Skills Improved consensus/Teamwork

Fostered coalitions/networks Formulated policy/strategy

Implemented strategy/plan

10. Describe how this exchange has led to, or may result in, long-term development impacts (Include indicators whenever possible.)

11. What are the principal lessons learned? (Include what worked well, what worked less well, what you would have done differently, and any recommendations.

ADDITIONAL INFORMATION 12. List the key contact(s) for additional information about this exchange. Include email address.

13. Please provide links to any additional resources associated with this exchange, including website, reports, videos, photos, etc.

A14

Title 1: Technical Cooperation: Zambia Investment Promotion Project –Triangle of Hope- (ZIPP-ToH)

Funding Sources(s): JICA Total Budget: Start Date: Strategic Action Initiative for Economic Development (Phase I) (20 July 2006 – 31 March 2009) Zambia Investment Promotion Project-Triangle of Hope (Phase II) (21 August 2009- 20 August 2012) End Date: August 2012 Sector(s): Export and Investment Promotion

Summary The Project aims at facilitating promotion of trade and investment to Zambia with JICA‟s technical assistance. The project pays special attention to how best successful economic development experiences in East Asia (in this case, Malaysia) can be utilized in the context of present economic development challenges in Zambia as well as in Africa. The project is implemented with a Malaysian advisor (Former Deputy Director-General of Malaysia Industrial Development Agency), who has 30 years of practical experiences in successfully promoting trade and investment in Malaysia in collaboration with three important actors, government, public services and private sector.

Recipient country(ies) Zambia

Recipient Institutions The Government of Zambia

Provider country (ies)? Malaysia in collaboration with Japan

Provider institution(s) JICA procured the services of a Malaysian expert as the main advisor to the Government of Zambia to transfer skills and knowledge on trade and investment promotion to Zambian counterparts. Through Malaysian expert in partnership with various Malaysian Government organizations such as Malaysia External Trade Development Corporation (MATRADE), Malaysia South-South Association, and Malaysia Industrial Development Authority (MIDA), JICA also assisted the Government of Zambia in organizing trade promotion missions from Zambia to Asian

A15 countries and from trade missions from Malaysia and India to Zambia. JICA is also assigning a JICA expert to the Zambia Development Agency (ZDA) to facilitate various project activities at ZDA to assist Malaysian advisor to strengthen the operational capacity of ZDA.

Strategic context Despite numerous and massive volume of development assistance to Africa over the four decades, Africa has been left out from global economic development while Asian countries which had gained political independence around the same time as African countries have experienced rapid economic development. Such observation has raised question on the aid delivery mechanisms which are used to deliver aid to Africa and led the Government of Zambia and JICA into the exploration of alternative and possible approach to make aid work more effectively and efficiently.

Objective The Project aims at making Zambia a model for investment promotion that other African countries can emulate by increasing FDI to Zambia and domestic investment with reference to how trade and investment was successfully promoted in East Asian countries. JICA initiated the project under Japan’s commitment of Tokyo International Conference for Africa Development (TICAD), while the Government of Republic of Zambia viewed shared experiences in South-South Cooperation as an opportunity for promoting political, economic, social and cultural development. It was for these reasons that the Government of Zambia and JICA agreed to implement the project called the Strategic Action Initiative for Economic Development (SAIED)-Triangle of Hope to formulate and implement a model which could be applicable to other African countries with special reference to East Asian experiences.

Method of knowledge exchange Upon recommendations by the Malaysian advisor, in August 2005, the Zambian President appointed twelve Task Forces to understudy the various selected sectors and make recommendations on the policy framework for Cabinet consideration. These committees were composed of members from the civil service and private sector. In addition, a six-man, high level, ToH Steering Committee was also appointed to supervise their work. The Committee was chaired by the Special Assistant to the President for Economic affairs and deputized by the JICA Chief Representative to Zambia.

In January 2006, the twelve Task Forces reported back to the President and his Cabinet. Using these recommendations, officials from relevant Ministries prepared Cabinet Memorandums. Subsequently, all the Cabinet Memorandums, with the exception of two, were approved and are being implemented. Implementation is being undertaken by the

A16 respective line ministries. In order to ensure compliance, a monitoring and evaluation framework has also been put in place.

One of the important objectives of the project is to assist the Zambia Development Agency (ZDA) build capacity towards investment promotion. It is strongly emphasized in this project that capacity building is to be done through ―Hands on Experience‖ by understanding and emulating the strategies used in Malaysia.

In this regard MIDA has assisted in creating a foundation and organizing meetings to enhance capacity building. Towards Investment promotion, the Malaysia South-South Association (MASSA) assisted ZDA in organizing groups of Malaysian companies to visit Zambia. MATRADE also recently assisted ZDA in organizing a mission to Zambia that included nine companies in various sectors, ranging from construction to education.

The project also provided ZDA with further challenge and opportunity by organizing three missions to India with practical advice and assistance from Malaysian advisor. As a result of these missions, a major India- Zambia Business forum was hosted in Zambia at the beginning of 2009. Subsequently, ZDA has been able to engage the Confederation of Indian Industry (CII), the Federation for Promotion of India – Africa Industry and Trade (FPIAIT) and the Federation of Indian Chambers of Commerce and Industry (FICCI).

Outcomes The number of recommendations, resulting from the approved framework numbered One Hundred and Fifteen (115). The cumulative number of activities to be executed totaled 271 and the resultant number of expected deliverables amounted to 175. One of the most unique concepts under this project was inclusion of health and education sectors as Priority Economic Sectors as indicted in the ZDA Act. This was a unique development because prior to the project, the education and health sectors in Zambia were perceived as primarily being social sectors. This change in mind set led to the aggressive promotion of private sector investment in these areas. The Air- Cargo Hub and the Multi-Facility Economic Zone framework were also vigorously addressed because of the high cost nature of Zambian industry in a land locked country.

Impacts The implementation of the framework is still ongoing as both government and JICA remain committed to the Program. Clearly, the investment environment, resulting from the recommendations of the ToH, and other government related programmes have improved over the implementation period of the initiative. To this effect, Zambia has moved in rank, by 9 points, in the World Bank‘s ―Ease of Doing Business Survey‖.

A17

Through various trade and investment promotion activities in Malaysia, Indian and Zambia, various MOU were signed between Zambian, Malaysian and Indian companies. This resulted in the establishment of the first-ever mobile telephone manufacturing company in Africa. Joint ventures between Zambia Universities, private companies and Malaysian and Indian companies are in preparation in education, health, construction and agriculture and service industries. The Government of Zambia also initiated the establishment of Multi-Facility Economic Zone (MFEZ) in Zambia and the Government of Zambia in partnership with Malaysian Kulim High Technology Park Corporation and JICA conducted a master plan and feasibility study on MFEZ in Lusaka. Development of MFEZ in Lusaka influences other development partners like China, which also decided to develop another MFEZ in Chembesi.

Lessons learned Efforts to replicate the industry-led East Asian Economic Miracle in Africa can generate positive outcomes, leading to job creation, socioeconomic opportunities and poverty alleviation.

One of the successful factors in this program is the establishment of mechanisms that build the ownership of Zambian government, reflect the needs of private sector in the program and to ensure political support to the program. In this program, upon recommendations by the Malaysian advisor, the Zambian President appointed twelve Task Forces to understudy the various selected sectors and make recommendations on the policy framework for Cabinet consideration. These committees were composed of members from the civil service and private sector. In addition, a six-man, high level, ToH Steering Committee was also appointed to supervise their work. The Committee was chaired by the Special Assistant to the President for Economic affairs and deputized by the JICA Chief Representative to Zambia.

Key contact(s) Mr. Hajime FUKUDA, Assistant Representative JICA, Lusaka, Zambia E-mail: [email protected]

Links to any additional resources http://www.jica.go.jp/zambia/english/activities/details16.html http://www.jica.go.jp/zambia/english/activities/pdf/03_ToHSAIED.pdf http://www.impactalliance.org/ev_en.php?ID=49126_201&ID2=DO_TOPIC http://www.jica.go.jp/project/english/zambia/0901055/outline/index.html

A18

Title 2: JICA Technical Cooperation Project on Rural Power Supply for Improvement of Efficiency

Funding Sources(s): JICA Total Budget: Start Date: October 2009 End Date: June 2011 Sector(s): Rural Electrification

Summary The program aims at enabling Bhutanese counterparts to become certified PV trainers. To this end, Third Country Expert was dispatched to share the technical and instructional skills developed by a group of Filipino engineers who received intermediate photovoltaic (PV) trainer certifications in a JICA technical cooperation project. Thus, the project attempts to replicate JICA‘s local capacity development achievements in the Philippines in favor of Bhutan‘s rural electrification efforts.

Recipient country(ies) Bhutan

Beneficiaries Department of Energy (DOE) Bhutan Power Co. Ltd. (BPC) Tsirang District Administration Local Installer (Private companies)

Provider country (ies)? The Philippines in collaboration with JICA

Provider institution(s) Renewable Energy Management Bureau, Philippines Department of Energy JICA

Strategic context Solar Home Systems (SHS) 49 constitute a feasible alternative to fulfill the rural electrification needs of isolated villages in mountainous Bhutan. Without proper training, however, local technicians/engineers cannot build and maintain such systems.

49 A form of renewable energy system that utilizes solar energy; SHS is comprised of a solar PV panel, a charge controller, batteries and a lighting appliance.

A19

The project is to enable a group of Bhutanese engineers to become certified PV trainers first so that they could then train other engineers and technicians, thereby creating ranks of technicians/engineers able to properly install and maintain SHS.

To conduct the series of training, solar experts were dispatched from the Philippines who were trained and qualified as ―Solar Expert‖ under JICA Rural Electrification Project in the Philippines in 2006.

Method of knowledge exchange Initially, Filipino experts conducted a training and certification program through which Bhutanese engineers gained their PV trainer qualifications. During a second mission, the same Filipino experts supported Bhutanese trainers as their gained their own teaching experience.

Training has been conducted at the three levels. Central level: Trainers training for DOE and BPC personnel District level: Technicians training for Electricity Service Division, District Technicians and Suppliers/Installers Village level: Service Centers (Villagers) & Municipal Officers

Contents of Trainers‘ Training and Technicians‘ Training  Basic of Electricity  Basic of Solar Power System  Solar Energy  Function of each Component  Inspection & Monitoring  Trouble Shooting  Installation

Contents of Village Technicians & Users‘ Training  What is solar home system  How to use  Users Guide  Distribution of equipment  Installation with villagers

Considering the educational level of the users, the project produced user friendly guide with more pictures and laminated A3 size. The project also made efforts to enhance the sense of ownership by villagers (e.g. let villagers join the activities, contribution from villagers, etc.)

A20

Training took the following steps 1. Effective combination with ―Lecture‖ and ―Hands-on‖ 2. Repetition until making it firm 3. On Site Practical Exercises in terms of Monitoring & Inspection, Measurement, Review & Analysis 4. Installation Practice at Training Center 5. Qualifying Examination (Pre-Exam & Post-Exam)

Outcomes The following table offers details of the number of participants of the training program and their certification level: - Organization Overall Number of Certificates Awarded Participants Department of Energy 5 people Basic Trainer: 4 people Assistant Basic Trainer: 1 person Bhutan Power Co. Ltd. 6 people Intermediate Trainer: 2 people Basic Trainer: 2 people Tsirang District 5 people Basic Technician 3 people Administration Assistant Basic Technician 1 person Local Installer 4 people Basic Technician 1 person (Private company) Assistant Basic Technician 2 people

Impacts Through these training workshops, Bhutan now has a cadre of PV trainers of its own. Hence, Bhutan can now undertake future dissemination of technical skills to its engineers/technicians relying on these ―local experts‖.

JICA plans to implement a vocational training project in Rwanda and rural electrification project in Zambia. Because of the good performance of Third Country Experts in Bhutan, these experts are expected to participate in those projects as solar trainers.

Lessons learned Use of Third Country Experts encouraged and motivated Bhutanese trainees since Filipino experts who were trainees before are now competent trainers to conduct trainings abroad. Once ―trainee‖ became ―trainer‖, the professional mind grew up and prepared well.

A21

The trainers in this kind of projects need to possess not only the right knowledge and skills but also experience at actual sites. It is also important to well understand the situation of trainees.

In order to build and maintain Solar Home Systems, it is effective to use a teaching method based on 1) combination of lecture and hands-on, 2) its repetition, 3) on site practical exercises, 4) installation practice at training center, and 5) qualifying examination.

Key contact(s) Kuri Orui (Ms.) (Expert), Organization: JICA Email: [email protected], [email protected]

Links to any additional resources http://www.jica.go.jp/project/bhutan/0700531/pdf/news_20101018_magazine.pdf http://www.jica.go.jp/english/news/field/2010/20100802_01.html

A22

Title 3: The Third Country Training Programme on Promotion of Rural Electrification in CLMV Countries

Funding Sources(s): JICA Total Budget: Start Date: 30th January 2007 End Date: 16th December 2008 Sector(s): (multiple select…) Rural Electrification

Summary The Government of Lao P.D.R. implemented the Third Country Training Programme on Promotion of Rural Electrification in CLMV Countries (Cambodia, Lao PDR, Myanmar and Vietnam), collaborated with Electricité du Laos (EDL), and supported by Japan International Cooperation Agency (JICA). This was conducted once a year, based on the agreement between DOE, EDL, and JICA Laos Office. The purpose was to transfer knowledge, to understand the strategies and plan for rural electrification (RE), and to exchange knowledge and experiences among the participating countries for accelerating RE.

Recipient country(ies) Cambodia, Lao PDR, Myanmar and Vietnam

Beneficiaries Organizations in charge of rural electrification in recipient countries

Provider country(ies) Lao PDR in collaboration with Japan

Provider institutions Department of Electricity (DOE), Ministry of Energy and Mines (MEM) Electricité du Laos (EDL) JICA

Strategic context Rural Electrification (RE) is one of the key factors for rural development and poverty reduction. It brings there such various benefits as lighting, the pumping of water and

A23 refrigeration to keep food safely. Furthermore, it contributes to improving medical services as well as increasing the time for children to study and for women to weave at night and etc. These accelerate economic activities in rural areas.

In spite of these advantages, many developing countries have faced various difficulties in promoting RE, due to sparser population, lower income levels and higher transportation costs in rural areas. This makes various gaps between urban and rural areas wider in respect of public service, income level and so on. In fact, the electrification rate of rural areas in Cambodia, Lao PDR and Myanmar was considerably lower compared with urban areas, and even in Vietnam the rural electrification rate is only 60%. In order to tackle the situation, governments were expected to strongly commit itself to promote RE with the technical and financial cooperation of donors as well as appropriate burden sharing among public and private sectors.

Before the programme, Lao PDR had been promoting not only On-Grid (grid-extension) electrification but also Off-grid‘s such as photovoltaic (PV) and small-hydropower schemes to non-electrified areas. Due to these efforts the electrification rate in Lao PDR increased steadily from 35% in 2000 to 47% in 2004, but there still remained a wide gap between the actual rate and the targeted of 90% in 2020 set by the Government. In order to accelerate RE, it became more important to share various experiences, know-how on the promotion of RE among the similar neighboring countries.

Objective The Course was conducted in accordance with the followings: (1) Purpose: The aim is for participants to fully understand the concept of rural electrification and to acquire knowledge and techniques as well as to gain experiences learned from various RE projects in Japan and participants‘ countries. (2) Output: At the end of the course, the participants are expected have; 1) To understand the strategies and strategic plan of RE programs 2) To examine and understand the role of the public and private sector in RE 3) To share their opinions and information covering both On- and Off-Grid provision electrification including the technical aspects as well as the policy formulation

A24

(3) Sub-theme of the Program  First year: Policy and basic concept for RE  Second year: Implementation and Construction for RE  Third year: Management, Operation and Maintenance for RE

Method of knowledge exchange The two weeks training consisted of lecture, case studies and study tours. For example, the contents of the first year‘s training courses were as follows.

The first year‘s training courses were aiming mainly for transferring policy and planning skill on rural electrification (RE). It was held at EDL Training Center in Vietiane, Lao P.D.R., participated by five trainees from Cambodia, two from Myanmar, nine from Laos, and four from Vietnam, as well as eight lecturers of Laos and one of JICA dispatched expert from Japan.

The course started with the presentation of participated countries reports. Then in the former part of the course Lao lectures explained on policy, regulation, and general matters on RE, giving the Lao present situation as an example.

In the latter part, it focused on the practical matter on RE. The trainees were given the practical skills and procedure for small hydropower development for RE through the case study as well as lectures, and found the important role of RE for poverty reduction in rural areas through introducing the results of the actual socio-economic survey carried out in Northern Laos villages, that was a unique survey by the way of comparing between the situation of ―pre-electrification‖ and of ―post-electrification‖ which has been never seen. And the promotion of renewable energy had been also mentioned as a future‘s important resource for RE.

In addition, a study tour was carried out during this course. The participants visited one of the pilot project villages, ―Ban Donxayoudom‖ in Vientiane Province located in a small island of Nam Ngum Lake, where Solar Home System (SHS) and Battery Charging Stations (BCS) had been installed by the JICA previous project. This project, ―The Study on Rural Electrification Project by renewable Energy in Lao PDR‖ was conducted from the year 1998 to 2001, and facilities were installed in 1999 there. Now it had passed for 8 years, and they were still operating.

A25

Outcomes The Laotian side, the provider institutions, evaluated this training programme as follows. - Through whole of the course, trainees surely obtained the practical issues and skills of rural electrification through the provision of some concrete examples and fruitful chances to exchange their thoughts each other. They also highly evaluated to get application knowledge to their own countries in their evaluation sheet. - Additionally, the course management was thought to be more smoothly and be improved. - The Laotian presenters had a good chance to review and re-consider their own jobs and experiences, so it might be useful for their works in future, too.

Impacts The Laotian side views the impacts of the project as follows. - The effect of the courses will not be visible very soon, but participants have made good connections and keep in touch with each others. It will surely produce a lot of some fruit in this field. - The third year we received additional participants from Bhutan, it was one of the new seeds for the next expanding stage. Hopefully, this course will succeed to the next one in somewhere including new participating.

Lessons Learned The programme was carefully designed and managed in such a way as to build the ownership of Laotian side and to ensure the management capacity of provider countries as follows.

(1) Program Curriculum - The detail curriculum of the first year‘s Program has been considered among DOE and EDL staff members assisted by JICA experts. - The draft detailed curriculum was informed to the planned lecturers in October, and then started to make text books and presentation materials. - In December, the dispatching of a short-term Japanese expert, Mr. Masayuki SEINO, was determined, so he has also strongly assisted to finalize the curriculum and materials as well as prepared his lecture.

A26

(2) Program Management - This program has been basically conducted and will be conducted by DOE and EDL with technical and financial assistance of JICA, Japanese side. - This time, person in charge of this matter in DOE and EDL were nominated by Ministry of Energy and Mines on November 6th, 2006. - The DOE finalized the General Information (GI) of this Program after discussion with JICA Laos Office and JICA experts, and submitted to Ministry of Foreign Affairs (MOFA). - It was approved on November 14th, 2006, and then distributed to each participant countries through Embassy of Lao PDR with the deadline of application on December 28th, 2006. - The DOE selected participants after receiving the application forms from each country and replied to the result and sent the invitation to participants on January 16th, 2007.

Key contact (s) Anousak Phongsavath, Head of Division, Rural Electrification Division, Department of Electricity, Ministry of Energy and Mines E-mail: [email protected] [email protected]

Links to any additional resources

A27

Title 4: ―Total Quality Management (TQM) for Better Hospital Services: A Holistic Approach to Utilizing Existing Resources‖

Funding Sources(s): JICA Total Budget: Start Date: 2007 End Date: 2008 Sector(s): Health Sector / Management

Summary Sri Lanka developed the capacity on total quality management (TQM) for better hospital services through a JICA‘s technical cooperation that focused on Japanese TQM techniques as the entry point to the quality improvement. In order to share the Sri Lankan experience/achievements in this field with African countries, African health administrators were invited to Sri Lanka to attend lectures and conduct site visits to Hospitals that have achieved better quality in their services relying on the efficient utilization of available limited resources.

Recipient country(ies) Benin, Burkina Faso, Burundi, Democratic Republic of Congo, Eritrea, Kenya, Madagascar, Malawi, Mali, Morocco, Niger, Nigeria, Senegal, Tanzania and Uganda.

Beneficiaries Health administrative officials and hospital managers in recipient countries

Provider country(ies) Sri Lank

Provider institutions Castle Street Hospital for Women and the District Base Hospital in Gampaha, The Ministry of Healthcare of Sri Lanka JICA

Strategic context Health institutes in developing countries face a lack of resources on many fronts, including shortages of doctors, nurses and other medical staff; medical equipment and drugs; budgets for staff and operational expenses; and information about patients and treatment records. Under these circumstances, Sri Lanka introduced Total Quality

A28

Management (TQM) techniques for quality control developed in Japanese industry, and improved hospital management without incurring substantial costs.

Objective 1. To convince African participants of the usefulness of TQM with 5-S activities as an entry point for improving quality of care in hospitals, through sharing Sri Lankan experiences of TQM; 2. To provide advice and expertise to each participating African country's efforts to improve hospital services.

Method of knowledge exchange During their stay in Sri Lanka, participants were taken to the field to view the application of 5S-based TQM in a range of Ministry of Health hospitals; they also received training and instruction by leading Sri Lankan hospital directors and officials from the Ministry of Healthcare. In addition, they will eye witness TQM activities in two health institutions - Castle Street Hospital for Women and the District Base Hospital in Gampaha.

Outcomes African health sector officials and hospital administrators learned that substantial improvements in the quality of health services can actually be achieved without large-scale investments.

Impacts After returning to their home countries, African trainees have implemented workplace environment improvements using the 5S principle in pilot hospitals.

Lessons learned The combination of field trip and training to learn good practices can raise participants‘ awareness, which would result in the implementation of the similar program later. Based on the Sri Lankan experience – developed based on Japanese TQM concepts – African health sector officials and hospital administrators realized that the ac- cumulation of creative ideas and daily endeavors by both medical administrators and staff can lead to improvements in the efficiency and effectiveness of hospital operations, and thus to trigger positive outcomes on the quality of services.

Key contact(s)

Links to any additional resources http://www.jica.go.jp/english/operations/thematic_issues/south/project06.html

A29

Title 5: The TAISHIN (―Earthquake-Resistant Popular Housing‖) project

Funding Sources(s): JICA , the Government of Mexico Total Budget: Start Date: 2003 (first phase) / 2009 beginning of second phase End Date: Second Phase currently ongoing Sector(s): Disaster Mitigation

Summary After two earthquakes hit El Salvador in 2001, El Salvador‘s Vice Minister of Housing and Urban Development and JICA established the TAISHIN project to organize the reconstruction efforts along with other stakeholders. The Mexican government, in consultation with the JICA Mexico Office, offered to assist the project. Mexico‘s National Center for Disaster Prevention (CENAPRED), which was originally established with Japanese assistance and had received technical transfer from Japanese experts, now offered its knowledge to El Salvador.

Recipient country(ies) El Salvador

Beneficiaries - Minister of Housing and Urban Development in El Salvador - Centro American University - University of El Salvador - El Salvadoran Foundation for the Housing Development - El Salvadoran Institute for the Construction

Provider country (ies) Mexico in collaboration with Japan

Provider Institutions - Mexico‘s National Center for Disaster Prevention (CENAPRED) - Department of Scientific Technical Cooperation, Ministry of Exterior Relations of Mexico (SRE) - JICA

Strategic context In January and February of 2001 two earthquakes hit El Salvador, devastating the country and destroying 164,000 houses, which accounted for 11.68 percent of all housing in the region. Following this catastrophic event, El Salvador‘s Vice Minister of

A30

Housing and Urban Development and JICA established the TAISHIN project, thus organizing the reconstruction efforts along with other stakeholders. The Mexican government, in consultation with the JICA Mexico Office, offered to assist the project. In fact, Mexico had received Japanese assistance for similar reconstruction efforts after a severe earthquake hit Mexico City in 1985. Mexico‘s National Center for Disaster Prevention (CENAPRED), which was originally established with Japanese assistance and had received technical transfer from Japanese experts, now offered its knowledge to El Salvador.

Objective To promote improvements of construction and technical standards in El Salvador, the project has the following objectives: - Construction of a Large Structure Laboratory; - Training for technical experts and researchers; - Research on construction materials and building structures; - Dissemination of the research results; and - Development of an integral pilot program for improved low cost housing.

Method of knowledge exchange. Japan and Mexico offered a vital and strategic combination of inputs and technical assistance. The project received equipments, tools and experts on building structure from Japan, and Mexican experts offered technical assistance to ensure the efficient use of these resources.

The Mexican experts from CENAPRED, who were trained in Japan during the 1990s, now shared their knowledge and experience with the Salvadorans. There was a close collaboration between the Japanese and Mexican technical experts, who worked hand-in-hand with their Salvadoran counterparts. All worked as a team and were in tune with each other‘s needs.

The El Salvador institutions such as Centro American University, University of El Salvador, El Salvadoran Foundation for the Housing Development, El Salvadoran Institute for the Construction dedicated themselves in conducting research and establishing construction models as well as the dissemination system. They work closely with Japanese and Mexican experts and a number of researchers from these institutions had trainings in Japan and Mexico. Each institution took responsibility in researching distinctive material and integrated their research results to establish models for earthquake resistant popular housing in El Salvador.

Outcomes The TAISHIN Project has successfully achieved the following objectives:

A31

 Construction of a Large Structure Laboratory;  Training for technical experts and researchers;  Research on construction materials and building structures;  Dissemination of the research results; and  Development of an integral pilot program for improved low cost housing.

Impacts Building on its great success, the TAISHIN project has now entered its second phase since May 2009, with the objective to establish a sustainable system for further dissemination and application of the research results on housing improvements derived from the first phase of the project between 2003 and 2008. This endeavor has involved strengthening the capacity of institutions to spread the earthquake-resistant popular housing across the country and the establishment of appropriate construction norms.

Lessons learned Cost-effective Receiving Mexican experts who were acquainted with Japanese knowledge on earthquake-resistant popular housing, instead of receiving experts from Japan, contributed in optimizing the available financial resources for the project.

Merits of Similarities Mexican technical experts and their Salvadoran counterparts not only share the same language, but possess comparable cultural traits and customs. Moreover, construction norms and living conditions are very much alike in both countries, allowing for a more seamless and fluid transfer of knowledge.

Creation of synergies Having had experience of collaboration with Japan on the same solutions and having similar background and systems with El Salvador, Mexico generated substantial synergies in the project among three countries for effective technical transfer.

Key contact(s) Ms. Eriko YAMASHITA, Advisor for Japan-Mexico Partnership Programme, JICA Mexico

Links to additional resources http://www.jica.go.jp/english/operations/thematic_issues/south/project04.html

A32

Title 6: Brazil-Angola-Japan – Building capacities at the Josina Machel Hospital

Funding Sources(s): Share of Japan‟s Contribution :US$ 549,450.00 （76.04%） Share of Brazil‟s Contribution :US$ 173,129.97 （23.96%） The budget of former Grant Aid Project by Japanese Government was approximately US$ 40 million Total Budget: Start Date: April 2007 End Date: March 2010 Sector(s): (multiple select…) Health Sector

Summary In this Project, professionals of Josina Machel Hospital (JMH), Lucrecia Paim Maternity Hospital (LPM), 13 primary health care centers, and other hospitals were trained in five areas: 1) hospital administration, 2) equipment maintenance, 3) nursing care, 4) radiology, and 5) laboratory. The training course was conducted by Brazilian Experts and Angolan professionals under the coordination of Japan, Brazil and Angola. The training of professionals was held in the facility of Josina Machel Hospital which was rehabilitated by the Grant Aid Cooperation of Japanese Government.

Recipient country(ies) Angola

Beneficiaries Angola – Ministry of Health, Josina Machel Hospital

Provider country(ies) Brazil, Japan

Provider institutions - Brazilian Cooperation Agency(ABC) - Campinas University(UNICAMP), - Sao Paulo University Instituto of Heart (INCOR/USP), - Santa Cruz Hospital Sofia Feldman Hospital - Japan International Cooperation Agency (JICA)

Strategic context After 27 years of civil war, the Government of Angola drew out the ―Five Year Health

A33

Development Plan” (2000-2004) to improve the facilities of health system which was largely neglected in civil war period. Basing on this plan, Angolan government requested the Grant Aid assistance to the Japanese government for the rehabilitation of the facilities of Josina Machel Hospital, which is reference hospital of national level, and the project was implemented in the period of 2002 to 2005. After the Grant aid Cooperation, it was needed to train the professionals for improvement of quality of services. Then, Angolan Government requested the technical cooperation project to Japanese Government in 2006.

In the process of analyzing the proposal, Japan found it better recruiting the Brazilian Experts for this activity because of the language advantage, culture similarity and so on. In the year 2007, a meeting between JICA’s President, Ms. Sadako Ogata, and the Brazilian Ministry of Foreign Affairs, Mr. Celso Amorin was held in Brasilia and they confirmed the importance of promotion of Japan Brazil Partnership Program (JBPP), especially the joint effort to develop international cooperation in beneficiary countries. This meeting opened the possibility to work under the framework of triangular cooperation between Japan, Brazil and Angola. After the meeting, Government of Angola manifested the interest for triangular cooperation project. Then, the project started to be implemented.

Objective Overall Goal: Josina Machel Hospital becomes a reference in Angola in terms of health care and training for health workers. Project Purpose 1. Improvement of organization of training in Josina Machel Hospital 2. Improvement of quality of services in the target institutions

Method of knowledge exchange The referred project was implemented as a JBPP‟s first triangular cooperation project in beneficiary country. The basic implementation style of this cooperation project is to conduct the training course in JM Hospital with participation of Brazilian Expert on Japanese Coordination. For the implementation of the activity, Japan contracted coordinator of the project and procured materials for training activity such as film for X-ray, microscope, etc. The essential running cost for the training activities also was supported by Japan. In fact, the total of 12 training course was held in 3 years cooperation period, and 714 professionals were trained.

Outcomes The outcome was different in each area, for example Laboratorial analysis can be observed strongly positive and high impact. The second training course contributed to

A34 restart the activities in the microbiology field which was stopped during the civil war period. Nursing care can be observed certain positive impact about relationship between professionals and patients in the context of humanized care. And multiplication of new knowledge and technique from the participants to colleagues was happened many case. Other training activity also had small, but positive impact. And the fact of mortality rate reduction, such as more than 1% per year, was obvious impact as well.

Thus, the planned achievement includes the improvement of services of professionals in health sector in Angola, and the capacity development of JMH as reference institute for training of professionals in health sector. It was seen the dramatic reduction of mortality rate of JMH, such as more than 1% per year from 2007 to 2009.

The unplanned achievement is change in paradigm in Triangular Cooperation. Until this project, the triangular cooperation of Japan and Brazil was small scale and for specific needs. But now JBPP is scoping the development of larger scale project for the positive impact in global level.

Impacts According to the M/M of September 2007, this project was defined as a test case of triangular cooperation under the framework of JBPP. Thus, this project implemented as first Joint Cooperation Project in beneficiary country under the framework of Japan Brazil Partnership Program (JBPP) and made certain outputs and confidence for JBPP.

Through the success of this first experience of Triangular Cooperation Project in beneficiary country, the needs of Japan Brazil Partnership Program (JBPP) increased dramatically. And also, JBPP started to formulate the challenging big scale project. Besides the fact, this project made it possible to analyze the possibility to develop the following cooperation activity in larger scale in Angolan health sector, such as ―Project of Health Sector Human Resource Development in ANGOLA – ProFORSA‖

Lessons Learned Scale up of previous project‘s effects In the first moment, Japan implemented the Grant aid assistance for rehabilitation of reference hospital in Angola. For the effective utilization of the facilities and equipments provided in the assistance, it was still needed to improve the quality of service of professionals in health sector in Angola. Then, through the long time history of partnership between Japan and Brazil, the project got the most appropriate experts who were trained in Japan in a JICA‘s technical cooperation project.

National leadership and ownership In Angolan side, Ministry of Health in Angola has strongly supported the project. In

A35

Brazilian side, in addition to the government‘s strong initiative for the promotion of international cooperation and triangular cooperation, this project was formulated as a follow up of the meeting between Minister Celso Amorin and President of JICA, Sadako Ogata. In this context, the project was supported by the national leadership of Japan and Brazil.

Aligned with national priorities and systems The grant aid was based on the Five Year Health Development Plan (2000-2004), and the project was in line with the Medium-term Plan for Economic and Social Development: 2009-2012.

Comparative advantages In triangular cooperation projects, the local coordinator must to be enlightened for all the stakeholders about the differences and the comparative advantages to develop the projects. It will allow the more involvement of the three concerned parties (Japan, Brazil and the third country) in the process of project management.

Key contact (s) Mr. Kota Sakaguchi; Assistant Representative, JICA Brazil Office Mr. Wofsi Yuri de Souza, Coordinator of Bilateral Cooperation, ABC, Brasilia, Brazil

Links to any additional resources http://www.impactalliance.org/ev_en.php?ID=49229_201&ID2=DO_TOPIC

A36

Title 7: The JICA-ASEAN Regional Cooperation Meeting (JARCOM), currently the Japan-Southeast Asian Meeting for South-South Cooperation or J-SEAM.

Funding Sources(s): JICA Total Budget: Start Date: 2002 End Date: 2009 Sector(s): Coordination for Regional Cooperation

Summary JICA-ASEAN Regional Cooperation Meeting (JARCOM) 50 was a unique triangular cooperation framework in South-East Asia. Originally designed as a mechanism to formulate good quality SSC projects, it gradually evolved into a forum to discuss common development challenges in the region. While the northern donor stepped back as a facilitator, JARCOM‘s all-stakeholder-participatory and transparent process enhanced the ownership of both recipients and providers. Peer pressures among ASEAN members nurtured self-help efforts and leaderships in the South.

Recipient country(ies) Cambodia, Lao PDR, Myanmar, Vietnam, Timor-Leste (mainly as recipients) Note: Timor-Leste participates as an observer.

Beneficiaries The following institutions are main participants: - Council for the Development of Cambodia; - Department of International Cooperation of Lao PDR; - Foreign Economic Relations Department of Myanmar; - Ministry of Planning and Investment of Vietnam, - National Directorate for Planning and External Assistance Coordination of Timor-Leste (Observer),

Provider country (ies) - Indonesia, Malaysia, the Philippines, Singapore, Thailand (mainly as providers), - Japan (donor for the triangular cooperation).

50 In 2009, JARCOM was redirected to a new mechanism, the Japan-Southeast Asian Meeting for South-South Cooperation or J-SEAM, whose purposes include the formulation and implementation of well-prepared South-South technical cooperation, South-South cooperation quality improvement, and the maintenance and enhancement of the network between JICA and member agencies in Southeast Asian countries. J-SEAM also attaches more importance to the development of policies and planning in member countries as well as JICA's cooperation priorities for each country

A37

Provider institution(s) Main participants include: - Bureau for Technical Cooperation, State Secretariat of Indonesia; - Economic Planning Unit of Malaysia; - National Economic & Development Authority of the Philippines; - Technical Cooperation Directorate of Singapore; - Thailand International Development Cooperation Agency; - Japan International Cooperation Agency (JICA)

Strategic context The overall goal was to address a common challenge in ASEAN: narrowing intra-regional development gaps which were seen as major obstacles for its integration. To achieve this, JARCOM was established as a mechanism to mobilize ASEAN resources and formulate good quality projects. The acronym ―JARCOM‖ not only referred to the name of meeting, but to participatory annual cycle of project identification, implementation and reviewing. Main cooperation modality was ―Third Country Training Programme (TCTP)‖ implemented by advanced developing countries with financial and technical support of Japan International Cooperation Agency (JICA). JARCOM members were the governments and JICA country offices of ASEAN countries. Other regional stakeholders such as ASEAN Secretariat, UNDP, WCO, etc. were invited as observers.

Objective The Mission of JARCOM was to narrow socio-economic development gaps among ASEAN countries and to expedite regional integration through JICA's technical cooperation activities. To contribute to this Mission, JARCOM, through its annual process, facilitated and coordinated the following primary activities:

1. Assisting identification of the priority development needs of member countries and facilitating a match of these needs with appropriate resources of other member countries that have a comparative advantage in a given field of cooperation. 2. Providing information on resources (i.e. on-going regional training courses, training institutions, resource persons/experts, etc.) available in the member countries through its web-based information management system and other media. 3. Providing technical and financial support to regional project formulation activities (e.g. fact-finding missions, project formulation seminars) based on agreements between resource and beneficiary countries and JICA country offices concerned. Mobilizing, as necessary, resource persons / experts / project formulation advisors to

A38

assist formulation of concrete project proposals. 4. Monitoring and reviewing regional cooperation activities implemented under the JARCOM framework, and disseminating "lessons learned" for further improvement of the cooperation framework. 5. Collaborating with other regional cooperation initiatives, such as the Initiative for ASEAN Integration (IAI) and Mekong Region Development, AMEICC (AEM-METI Economic and Industrial Cooperation Committee) which were in line with the mission of JARCOM.

Method of knowledge exchange The following steps were taken to promote project identification and implementation.

1. In-country pre-consultation JARCOM‘s annual process started with domestic stakeholder consultations in beneficiary countries when line agencies were requested to prepare simple project concepts. As JARCOM didn‘t restrict sectors of cooperation, project ideas were identified and prioritized against national development plans through inter-sectoral coordination. This ensured wider domestic stakeholder participation than those who actually attending annual meetings.

2. Pre-announcement of providers‘ aid policies Provider countries were encouraged to pre-announce their aid policies and priority cooperation sectors to enable beneficiary countries to determine resource availability and select appropriate cooperators. Providers sometimes offered projects of their comparative advantages over other southern providers. By encouraging approaches from both side, JARCOM sought ―better match‖ if not the best.

3. Needs-resource matching After submission of project concepts, needs-resources matching were facilitated by JARCOM Secretariat located at JICA Thailand Office. Through email communications, fact-finding missions and teleconferences, projects were carefully screened before annual meetings.

4. Annual plenary meetings Annual meetings were held between 2002-2007, where only pre-screened projects with higher feasibility were submitted for direct stakeholder negotiation.

5. Participatory monitoring Status of project formulation was jointly monitored by all actors. Quarterly monitoring reports submitted by each country were compiled and re-circulated. In case the process faced any problem, JARCOM Secretariat advised concerned parties to clarify the status

A39 and take necessary actions. This system ensured impartial and transparent negotiation process and timely follow-up activities while nurturing member ownership.

6. Joint formulation and incentives Once an informal agreement was reached among stakeholders, JICA extended financial assistance for further project formulation such as joint field missions and project design workshops technically supported by JICA experts. For this purpose, JICA established a small regional budget which was not pre-allocated to members, but offered to them on a ―first-come-first-served‖ basis. The flexible budget system created a good level of competition and worked as an incentive for members to produce good projects.

7. Support of local staff network A mediator role of JARCOM Secretariat was supported by the ―JARCOM National Staff Network‖, a loosely structured informal network consisting of locally recruited staff in JICA country offices. Existence of a stable local coordination network was a key to success of JARCOM sustainability where multilateral negotiations among geographically dispersed stakeholders took place. While having capacity building element of local human resources, the responsibilities of SSC management were progressively delegated to the network which facilitated smooth communications between expatriate officials and government counterparts. Once firmly established, the network became self-sustaining and ensured consistency by compensating occasional staff reshuffles.

8. Information management system A web-based information management system (http://www.jarcom.net/) were established where members obtained project proposals and status-monitoring reports. In addition, up-dated information on regional training courses was open for public access, serving as a database for regional SSC resources.

9. Partnership agreement and cost-sharing JICA mostly bore financial and coordination costs of JARCOM network management and annual meetings. For implementation, in addition to offering human resources, provider countries shared the training budgets at varying degrees (15-50%) depending on government capacities. Cost-sharing and implementation arrangements were bilaterally determined in partnership framework agreements signed between Japan and several pivotal countries.

10. Regional approach to project identification In addition to national priority based approach, JARCOM later introduced ―regional approach‖ to project identification. This aimed at tacking emerging trans-boundary issues and ASEAN priorities to be addressed for accelerating regional integration. This

A40 approach was different from conventional SSC in a manner in which more strategic and rather top-down commitments and decision-making were needed. Regional approach removed division between providers and recipients since the benefits were shared by entire region.

Outcomes Between 2004 and 2007, 86 training projects out of 153 proposals were materialized through JARCOM. Reflecting diversity of available regional human resources, sectors of cooperation included agriculture, business and industries, health and welfare, public administration, etc. Successful matching rates during the same period increased impressively from 28% to 78%. Improvements in efficiency were considered as an indicator of enhanced skills of members in more strategic planning and negotiation.

Impacts Through JARCOM, despite rather clear divisions between providers and recipients in ASEAN, countries which used to be perceived as recipients started offering training workshops to share their own experiences. To supplement the country-needs approach, members agreed to address regional priority issues which would benefit the region as a whole. Such issues included trans-boundary threats or common development opportunities for ASEAN integration. As results, such regional programmes as controlling trans-boundary spread of ―Avian Influenza‖ and standardization of ―Risk Management in Customs‖ were formulated through JARCOM. These regional programmes were implemented by mobilizing additional resources from Japan and other specialized organizations like WCO (World Customs Organization) broadening JARCOM‘s network with other regional partners. Finally, JARCOM‘s networking activities in seeking synergies with other regional stakeholders let to a partnership with UNDP Regional South-South Unit. In order to share SSC experiences in the region, JICA and UNDP jointly hosted a regional consultative meeting in 2007 among donors interested in SSC and regional cooperation. This resultantly produced a joint publication as a knowledge product for SSC.

Lessons learned Alignment with national priorities SSC often lacks systematic approaches and tends to be donor/supply-driven. JARCOM reversed this to demand/priority-driven, making SSC programs aligned to national priorities and programs.

Ownership Transparent process and equal partnership, with JICA‘s low profile as a facilitator, made both cooperating and beneficiary countries engage proactively in project formulation, making boundaries among them less relevant. Their commitments from

A41 early stages enhanced their ownership once SSC programmes actually started.

Alignment with existing initiatives To avoid duplication and harmonize with regional priorities, JARCOM sought alignment with existing regional/sub-regional initiatives. Among many, JARCOM collaborated closely with ―Initiative for ASEAN Integration (IAI)‖, an ASEAN framework to address development gaps. 17 JARCOM projects were included in IAI portfolio creating synergy effects. Tackling regional issues also broadened networking with other regional organizations.

Support to emerging donors JICA, as a traditional donor, has accumulated know-how of project formulation and management. Through joint implementation under triangular arrangements, JICA shared the know-how with cooperating partners, playing a catalytic role to bridge traditional and emerging donors and supporting ―donorization‖.

Reducing costs for Southern partners Managing different and sometimes conflicting priorities were complex but unavoidable tasks in SSC. Since JICA bore this mostly, transaction burdens for Southern partners were eased, enabling them focus more on project substances. JARCOM added an alternative perspective to SSC: SSC was not necessarily supplemental to North-South Cooperation, rather, northern resources could be supplemental to South-South initiatives.

One of the biggest challenges for JARCOM is the growing costs required for complex processes. As JARCOM‘s functions gradually broadened, the number of stakeholders kept growing. This has resulted in a substantial cost increase for network operations, including the financial cost of meetings and human and institutional costs for coordination. It has now become difficult for a single donor to justify and bear all costs. The ownership factor for southern partners has been enhanced, but not to the extent that they can make significant financial contributions. This is one of the limitations of a single-donor regional framework. Considering the collective merit of such a framework, however, it may be an idea to have a multi-donor framework coordinated by international organizations.

Key contact(s) 1. Yasuko MATSUMI (Ms) , Former Regional Project Formulation Advisor, JICA Regional Support Office for Asia (Thailand) , Currently, Project Formulation Advisor at JICA Egypt Office), Cairo, JICA Egypt Office (current country of residence) Email: [email protected]

A42

2. Tatsuhiro MITAMURA (Mr.), Assistant Director, Development Partnership Division Operations Strategy Department, JICA, Email: [email protected]

Links to any additional resources http://www.jica.go.jp/english/operations/thematic_issues/south/project09.html http://www.impactalliance.org/ev_en.php?ID=49127_201&ID2=DO_TOPIC http://lvzopac.jica.go.jp/external/library?func=function.opacsch.mmdsp&view=view.opac sch.mmindex&shoshisbt=1&shoshino=0000251504&volno=0000000000&filename=119 80844.pdf&seqno=1

A43

Title 8: The Strengthening of Mathematics and Science Education – Western, Eastern and Southern Africa (SMASE-WECSA).

Funding Sources(s): Government of Kenya / JICA Total Budget: This programme has 3 financial resources as follows: No 1. JICA USD 2,000,000 per year (Technical Support for the Programme Activities); No. 2 Kenya Facility and Human Resource through CEMASTEA; and No 3. WECSA Member Countries USD 9,000 per year (Annual Subscription of USD300) Start Date: 2003 (Phase I) 2003 – 2008 (Phase II) 2009 – 2013 (Phase III) End Date: Ongoing Sector(s): Education

Summary Kenya & Japan, jointly implemented Strengthening of Mathematics and Science in Secondary Education (SMASSE) through In-Service Education and Training (INSET) (1998 – 2003 pilot; 2003 – 2008 national programme) for teachers and education managers. SMASE-WECSA was formed for collaboration in addressing common challenges in member countries. Kenya is a beneficiary of the Philippines and Malaysia and a pivotal country in implementing Teacher Training Programmes, workshops and dispatch of experts for over 30 beneficiary African countries under JICA‘s SSC.

Recipient country(ies)? SMASE-WECSA Member Countries (Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Congo, Cote d‘Ivoire, Egypt, Ethiopia, Gambia, Ghana, Lesotho, Madagascar, Malawi, Mali, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, South Africa, Sudan, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe)

Beneficiaries Teachers and education managers in SMASE-WECSA member countries

A44

Provider country (ies) Kenya in collaboration with Malaysia, the Philippines and Japan

Provider institution(s) Centre for Mathematics, Science and Technology in Africa (CEMASTEA), Ministry of Education of Kenya

Strategic context The main challenge addressed is the quality of teaching, which needs to be strengthened and made effective. This is because most countries in the SSC have acute shortage of qualified teachers, limited teaching and learning resources and limited capacity in education quality assurance.

The programs are the extension of previous JICA supported projects. 1. 1998– 2003: Kenya & Japan implemented a bilateral technical cooperation pilot INSET project for capacity building in mathematics and science education for teachers and education managers (SMASSE). 2. 2003 – 2008 SMASSE was scaled up to a national programme, reaching over 22,000 teachers and education managers through capacity building programmes. 3. 2002 – 2008: Kenya and the Philippines (UP-NISMED); and Malaysia (SEAMEO-RECSAM) supported by Japan, entered SSC, for capacity building for Kenyan personnel with faster and more efficient transfer of skills. 4. 2001: A network for mathematics and science education, involving 11 African countries and coordinated by SMASSE Kenya is formed, to collaborate in addressing common challenges in mathematics and science education in member countries through INSET for effective pedagogy and classroom practices 5. 2002: SMASE-WECSA registered as an Association, and Japan registered Capacity Development for Mathematics and Science Education in Africa with the UN, as a type 2 initiatives 6. Through the SMASE-WECSA network, from 2004 to date, JICA supports Teacher Training Programmes, workshops and dispatch of Kenyan experts for SMASE-WECSA member countries (11 countries in 2001, 33 countries by November, 2009). Kenya is a Pivotal Country in SSC with 32 Beneficiary African Countries, and CEMASTEA as the regional training centre. SMASE-WECSA through Kenya, supported by JICA, benefit from the skills transfer in a more efficient and effective way, since they share common challenges and similar experiences.

Objective SMASE-WECSA was formed for capacity building in mathematics and science education for teachers and education managers at basic education level (SMASSE) through the collaboration of member countries in addressing common challenges.

A45

Method of knowledge exchange SMASSE implementation strategy is capacity building in mathematics and the sciences through a system of National INSET for Trainers and District INSET for teachers. A technical team of Kenyan and Japanese experts conduct national training for trainers who conduct INSET for teachers in district INSET centers hosted in selected public secondary schools throughout the country. Administrative structures are in place from national to institutional levels.

SMASSE, at various levels, is managed by committees. The Kenya government finances recurrent expenditure while JICA meets the cost of INSET materials, capacity development for Kenyan personnel in Japan, Malaysia or Philippines and dispatch of Japanese experts (short or long term) for skills transfer.

INSET activities initially targeted secondary schools, but demand made it necessary to take pre-service teacher trainers in diploma teacher training colleges on board. Training programmes in Japan were limited to technical staff and a few Ministry officials but were scaled up to accommodate INSET managers, administrators and field officers. Under SSC, Kenyan personnel are also trained at UP–NISMED in the Philippines and SEAMEO–RECSAM in Malaysia to fast–track and make capacity building more cost-effective.

Implementation was in phases, making expansion neither too limited nor ambitious, hence the smooth scaling up from pilot to national phase. At each stage, the Ministry of Education ensured adequate staff and facilities to meet the needs of INSET. An internal monitoring and evaluation (M&E) system was established to ensure that expansion did not compromise quality. Mid-term and end-term evaluation conducted by JICA and GOK based on Development Assistance Committee Criteria rated SMASSE Project highly successful.

SMASSE INSET addresses teachers‘ attitude, pedagogy, content mastery and teaching/learning materials. Learner–centered approaches through the Activity–Student–Experiment–Improvisation (ASEI) pedagogic paradigm and the Plan-Do-See-Improve (PDSI) approach are the focus of SMASSE INSET. Teachers design use locally available resources and students‘ real life situations to improvise teaching /learning materials that enhance learner participation and scientific skills. They improve their skills in work planning, monitoring learning achievement, self and collegial evaluation and utilization of feed back to improve subsequent lessons.

Kenya has had bilateral technical cooperation with Japan and SSC with the Philippines and Malaysia as a recipient country. JICA‘s global presence and experience in bilateral

A46 technical cooperation for teacher development programmes in UP-NISMED and SEAMEO–RECSAM formed the basis for agreements between Japan, Kenya and the two countries. The agreement for SSC between Kenya, Philippines and Malaysia includes capacity development for member countries where TOTs from SMASE-WECSA countries are trained in Malaysia and Philippines. Through the SMASE–WECSA Network, Kenya is a pivotal in SSC with over 30 countries as beneficiaries. JICA facilitates UP–NISMED and SEAMEO–RECSAM to make presentations during the annual SMASE–WECSA regional conferences. This enables member countries to get linked and benefit directly from training programmes in Malaysia and Philippines directly through JICA offices in their countries.

Kenya‘s experiences on ASEI and PDSI principles have been shared, culminating in the SMASE-WECSA Association. Japan registered ‗Capacity Development for Mathematics and Science Education in Africa‘ as a Type 2 Initiative with the United Nations. The regional component was thus incorporated in phase II of the SMASSE in 2003 and implemented alongside the Kenyan project to train INSET Trainers for member countries.

Outcomes Over 450 Kenyan personnel have so far been trained in Japan, Philippines or Malaysia. Locally, over 19,000 teachers and 938 education managers and field officers have benefitted from SMASSE programme.

Through the joint efforts of JICA in Kenya and other SMASE-WECSA member countries, Kenya has become a pivotal country in technical cooperation under JICA‘s Third Country Training Programme and Expert service. As a result, over 1090 personnel from 27 beneficiary countries have been trained at CEMASTEA and INSET programmes started in Uganda, Nigeria, Niger, Malawi, Rwanda, Burkina Faso, Senegal, Tanzania, Sudan and Angola. JICA support, which brings together SMASE-WECSA countries in annual regional conferences where good practices and promising approaches in INSET are shared, has created interest from member countries. JICA facilitates senior education officials from such countries to visit CEMASTEA to study the INSET system and thus benefit from SSC. Technical visits to other African countries that benefit from Kenya enable CEMASTEA to identify training needs and design relevant training.

Impacts The Network has over 30 African countries, which address common challenges in mathematics and science education at basic education level. Kenya has supported SMASE-WECSA member countries in capacity development through JICA‘s Third Country Training Programmes (TCTP) and Third Country Expert (TCE). Sensitization

A47 activities have been directed at senior education officials, resulting in SMASSE-type INSET in about 20 countries.

Thus, through SSC Capacity building programmes many African countries are now able to set up sustainable systems and capacity development programmes for their teachers and education managers, thereby enhancing quality of teaching and school management and improve students‘ performance across Africa.

Japan‘s registration of Capacity Development for Mathematics and science education in Africa with the UN as a type 2 initiative and the consequent technical support for various SMASE-WECSA member countries through CEMASTEA opens doors for match-making that is likely to stretch into the future and link up Kenya and other countries in Africa to countries beyond the continent for SSC.

Lessons learned Success in SSC is built on ownership, political support and strong leadership. Ownership depends on careful selection of areas for capacity building, effective identification of those that need to be trained for sustainability as well as the approach used. Strong leadership by the Ministry /respective department is a must. If the Ministry does not provide strong leadership at various levels programmes will not work given that many of the officers in implementation are not answerable to the implementing institution such as CEMASTEA. Political support ensures that relevant policy, structures and capacity are in place and that the programme is integrated in existing national structures under one Director or the Permanent Secretary.

Recognition of SMASSE as a good practice by the AU has further enhanced its credibility and acceptance. The association that this INSET capacity building programme has had with the above bodies and its success in Kenya has convinced beneficiary countries to develop similar mechanisms that entrench programme activities. This programme may be replicated in other regions of the content by the AU.

A successful factor of SMASE-WECSA‘s SSC has been the consensus arrived at that INSET is an important component in the delivery of quality education to all. Consequently, all member countries recognize the need to institutionalize INSET in their policy and development strategies. Many member countries have set up technical teams to deal with issues relating to mathematics and science INSET. These teams are drawn from the over 1,500 personnel, who have benefited from capacity building programmes in Philippines, Malaysia or Kenya. In Kenya, there is evidence that SMASSE has improved performance in mathematics and science subjects over the last 5 years. As a result there is emerging confidence among SSC countries on the mutual benefits that arise from joint capacity building programmes like SMASSE.

A48

The Centre for Mathematics, Science and Technology in Africa (CEMASTEA), Ministry of Education of Kenya is a full-fledged National INSET centre, with 61 full-time academic staff and 4 Japanese experts. 1,442 District trainers conduct INSET for 16,251 teachers at the 108 district centers every year. As the Secretariat, CEMASTEA plans and facilitates Annual Regional Conferences under the auspices of JICA, to provide opportunities for sharing of good practices, promising approaches and strategies to mitigate emerging challenges in teacher development through INSET. Over 1090 participants from 27 countries have benefited so far from various CEMASTEA programmes and activities, all supported by JICA. Existence of CEMASTEA as both national and regional training centre for programmes with the collaboration of JICA and ADEA has given the Programme visibility and credibility that enable pivotal and beneficiary countries to take INSET seriously.

Negative impact in the long run is over-dependence on pivotal countries by beneficiary countries and on Northern Countries by South Countries, hence lack of sustainability of SSC. Impact assessment is also difficult, because of diverse backgrounds of teachers and conditions in beneficiary countries

Key contact(s) Professor Karega Mutahi, Permanent Secretary, Ministry of Education, Kenya

14. Links to any additional resources http://www.jica.go.jp/english/operations/thematic_issues/south/project05.html

A49

Title 9: Laos-Ghana-Zambia – Learning on road maintenance

Funding Sources(s): World Bank, Swedish SIDA, ADB, and Japan (through PHRD) Total Budget: Study tour budget: US$25,000 – $50,000 Start Date: The Exchange between GoL and Ghana/Zambia took place in 1999. End Date: Sector(s): (multiple select…) Road Maintenance

Summary In the late 1990s the Government of Lao PDR (GoL) was considering a sustainable financing mechanism for road maintenance. In February 1999, a delegation of key GoL officials visited Ghana and Zambia to learn first-hand from their successes in financing road maintenance. Through the study tour to Africa, the GoL understood that road users were willing to pay for better road services, and that users should be represented in the Road Fund Board. This exchange helped lay the foundation for the GoL decision to create a Road Maintenance Fund, which today covers the maintenance of Lao PDR's entire national road network and a portion of the local road network.

Recipient country(ies) Lao PDR

Beneficiaries Ministry of Public Works and Transport, Government of Lao PDR (GoL)

Provider country(ies) Ghana and Zambia

Provider institutions

Strategic context Roads are the pre-dominant mode of transportation in Lao PDR. The country is land-locked and mostly mountainous and has very low population density. This makes it difficult and costly for the government to provide and maintain all-weather road connections to all parts of the country. Roads were shattered during the Indochina war, and were further deteriorated due to lack of funding and inadequate maintenance and management. As a result, in the late 1990s, the main national travel corridors used to close during the rainy season and some sections barely remained passable during the dry season. Even though the GoL accorded high priority to road development, overall resources to the road sector were limited. The GoL was hard-pressed with rehabilitating

A50 the main national roads, leaving a very small amount of funding for maintenance of existing roads. During hard economic times, the maintenance budget was often squeezed. As a result, roads deteriorated faster than expected, imposing higher costs to users and higher rehabilitation costs to the economy. A sustainable financing mechanism was much needed to ensure adequate funding for road maintenance. Some Sub-Sahara African countries introduced a Road Fund with revenues from road user charges such as a fuel levy to finance road maintenance. While outcomes of these initiatives were mixed, successful cases were associated with a good governance structure. In Ghana the establishment of a Road Fund substantially reduced the problems of disruption to the planning and execution of maintenance works, and greater certainty of funding allowed the introduction of effective competitive bidding processes.

Objective To establish a sustainable financing mechanism to ensure adequate funding for road maintenance

Method of knowledge exchange - The World Bank hosted workshops and prepared economic studies for the Government of Lao PDR to share cases of best practice in financing road maintenance. Through this, GoL realized that Sub-Sahara African countries had the most relevant and available experiences to share at the time. - World Bank identified Ghana and Zambia as ideal partners and mobilized trust fund money to fund a study tour comprised of a delegation of key GoL to Ghana and Zambia in February, 1999 - The World Bank facilitated the study tours - This initiative contributed to establishing the steps and procedures for the creation of Lao PDR's Road Maintenance Fund (RMF), which was identified at a policy workshop held in Vientiane in June 1999. As a result, GoL passed the decree to create the RMF and the RMF Advisory Board in 2001 - World Bank supported the road maintenance capacity development and works execution through IDA-funded Road Maintenance Program Phase 1 and Phase 2

Outcomes Today, the RMF covers the maintenance of Lao PDR's entire national road network and a portion of the local road network. RMF revenues are expected to reach a sustainable level by 2015. The one-off exchange between GoL and Ghana and Zambia was instrumental to the RMF's success over the past 10 years. Achievements include:

1. RMF domestic revenues has grown from US$2 million in 2002 to US$33 million in 2009, and are expected to grow to the self-sustainable level in about 5 years that

A51

would be adequate to cover the maintenance need of the entire road network; 2. In 2001, only about 38 percent of the national road network was considered in good or fair condition; in 2009, over 80 percent of the national road network was considered in good or fair condition. 3. The institutional capacity at the central and provincial levels for road maintenance—in terms of planning, programming, procurement, contract management, public information disclosure--has significantly developed. 4. GoL successfully introduced performance-based maintenance contracts which now cover over 60% of the National Road network. Under the PBC arrangement, a complaint mechanism has been established through which road users can report poor conditions. 5. The RMF is doing well and has gained public support, making true sustainability a real possibility.

Impacts Sustainability is highly possible, with Lao PDR's RMF revenues expected to reach a sustainable level by 2015. The fact that this program was replicated under distinct circumstances suggests that it could be replicated elsewhere, such as Vietnam and Cambodia.

- Vietnam, which is in the process of establishing its own RMF, recently invited Lao RMF secretariat and the chairman of the board to present their success story in Hanoi. - In November 2009, a Cambodian delegation visited Laos to learn on how to establish and run a RMF.

Lessons Learned Two key success factors in the Lao case that go beyond the exchange activity lend greater evidence of sustained outcomes:

The RMF started as a simple arrangement, but it ensures secured and growing funding for road maintenance in a country hard-pressed with competing priorities. The RMF Advisory Board is not yet able to make fully informed decisions on the level of fuel levy that road users would be willing to pay in exchange for better road conditions. Still, the Board does include road users, thus providing a foundation for stakeholder input and support.

The World Bank's ongoing involvement has played a critical role in turning the Ghanaian and Zambian experiences into a successful reality for Lao PDR. Over the past 9 years, two Bank projects (Road Maintenance Program Phase 1 and Phase 2) have supported Lao PDR's Road Maintenance Fund—through both gap-filling financing and

A52 technical assistance for road maintenance capacity building. Established legal covenants also require for the fuel levy to gradually increase toward a self-sustaining level. The covenant was repeated in the IDA-funded Poverty Reduction Support Operations so as to ensure the continuing support of the Ministry of Finance.

IDA has been the lead donor to support the Road Maintenance Program in Lao PDR. The program has been co-financed by Swedish SIDA, ADB, and Japan (through PHRD). The successful collaboration of IDA, SIDA, ADB, and Japan has helped lay a foundation for Government-donor coordination and aid effectiveness. It is under the Road Maintenance Program, where the same Standard Bidding Document is used for both donor and government funded works contracts, and where the ministerial organizational units, instead of the Project Implementation Units, are in charge of the program.

Part of the success is due to national leadership and ownership. Both the RMF and the RMF Advisory Board were created by Lao PDR's Prime Minister Decrees. In addition, The government has long accorded priority to road development since late 1970s. Since 2001, the priorities have included road maintenance. The RMF is subjected to the audit of the State Audit Organization, and the maintenance contracts financed under the RMF have been procured through national competitive bidding (NCB) process.

Continued support and assistance has led to significant development of institutional capacity at the central and provincial levels for road maintenance—in terms of planning, programming, procurement, contract management, public information disclosure.

Key contact (s) H.E. Sommad Pholsena, Minister Ministry of Public Works and Transport, Lao People‘s Democratic Republic

Links to any additional resources http://www.impactalliance.org/ev_en.php?ID=49506_201&ID2=DO_TOPIC

A53

Title 10: AsDB Cambodia Vietnam – Twinning of Water Utilities

Funding Sources(s): Japan Special Fund, through ADB Total Budget: ADB Advance Payment Facility budget for the BIWASE and PPWSA Twinning : US$31,000 Start Date: July 2007 End Date: October 2009 Sector(s): (multiple select…) Water Supply

Summary ADB has adopted and improved on twinning as a development strategy for its Water Operators' Partnership (WOPs) Program. The WOPs program promotes knowledge sharing and builds the capacity of water operators and utilities in the Asia and the Pacific region. Among its key initiatives is the twinning of 20 water utilities and operators in Asia-Pacific region. Where most twinning arrangements pair off entities with similar characteristics on the assumption that they will share similar problems and solutions, ADB‘s approach is to match a stronger water and sanitation utility (expert) with a developing utility (recipient). In this case, expert was Phnom Penh Water Supply Authority (PPWSA) in Cambodia, while recipient was Binh Duong Water Supply Sewerage Environment Company Limited (BIWASE) in Vietnam. There were the following 4 steps taken in this project.

1. PPWSA visit to BIWASE to assess needs and identify twinning activities. 2. BIWASE visit PPWSA to exchange experience on billing, procurement, finance management, and non-revenue water reduction (NRW). 3. BIWASE visit PPWSA to exchange experience on customer service, NRW reduction, and training management. 4. Evaluation and final report by PPWSA.

Recipient country(ies) Vietnam

Beneficiaries Binh Duong Water Supply Sewerage Environment Company Limited (BIWASE)

Provider country(ies) Cambodia

Provider institutions Phnom Penh Water Supply Authority (PPWSA)

A54

Strategic context Globally, about 71% of people without access to improved sanitation and 56% of those who lack safe water live in Asia. People who do not have these basic services face incredible health risks, are often forced to sacrifice their education or livelihood, and suffer indignity and inconvenience every day. Asian water utilities are at the forefront of efforts to counter this common scenario. Theirs is the critical responsibility of providing water supply and sanitation services to Asia‘s 4 billion people. But their task is hampered by numerous challenges—artificially low tariffs, staff incapacity, insufficient budgets for infrastructure development, and more.

To deliver sustained and world class service, utilities need considerable help from various partners. One key partner is their peers. BIWASE suffered from a high level of NRW. In addition, poor billing collection combined with scarce attention to customer service and inefficient financial management were key factors in BIWASE's poor financial viability. BIWASE got to know PPWSA through report of its success in NRW reduction program. PPWSA was keen to share its experience and was willing to assist BIWASE.

Objective The aim was to enable the latter to improve service coverage and delivery, financial sustainability, and other aspects of its performance. The specific purpose of the twinning was to strengthen BIWASE in the following fields (in which PPWSA has valuable expertise): - NRW reduction, - Customer service improvement, - Management improvement, - Development of a training center, and - Tariffs/financial management.

Method of knowledge exchange With the support of SEAWUN and ADB the twinning program signed on 31 July 2007 was carried out through a number of visits, meetings, discussions between both parties to draw lessons from their experiences in NRW works, customer service, financial management, billing, metering, and procurement. PPSWA is one of the strongest water utilities in the region, being financially sound and independent. Compared to similar water utilities in the region PPSWA's NRW level was very low. The activities were carried out as follow:

1. During the first visit, PPWSA collected data and information about BIWASE to

A55

assess the needs and design the relevant and appropriate training tools and activities. (October 2007) 2. BIWASE visited PPWSA to exchange experience on billing, procurement, finance management, and non-revenue water reduction (NRW). PPWSA shared their procedures, data, process, field 3. Visits were also carried out to the 3 water supply plants owned by PPSWA. Billing and collection, financial management, and NRW were also thoroughly discussed. (February-March 2008) 4. BIWASE visited PPWSA to exchange experience on customer service, NRW reduction, and training management. Particular importance was given to the management method and the customer service. A different HR approach, including the need for learning opportunities and development, was discussed to increase efficiency and motivation. (November 2008) 5. Evaluation and final report. (October 2009)

Outcomes Initially, BIWASE and PPWASA intended to cooperate with each other (per MOA signed 31 July 2007, Bangkok) to achieve the following outcomes:  To identify priority areas for improvement in the BIWASE operations,  To train BIWASE personnel in priority areas,  To develop institutionalized system of benchmarking and monitoring process, and  To achieve measurable improvement in two or more areas of operations at the end of twinning period.

December 2009 Final Report reveals that the experience gains of BIWASE are the following: - Knowledge on how to effectively and efficiently reduce NRW level, e.g. through financial and human resources investments, proper selection of pipe materials, proper installation, regular maintenance, use of accurate meters, replacement of malfunctioning meters, modification of existing network, proper network design and staffing, etc. Knowledge on the importance of data collection which is fundamental to understand the losses, both real and apparent. - Knowledge on how to provide good customer service, including customer-friendly applications, is needed throughout the whole process, from application forms to metering and billing. - Knowledge on good management and development of personnel – including clear regulations, motivation, and discipline of all staff, and developing manuals is also a very effective tool. - Knowledge on the importance of building training center to support the human resources development. - Knowledge on the importance and implementation of accountable tariffs system,

A56

effective financial management, and proper metering for a water utility to operate at full cost recovery, without government subsidies. - Continuous dialogue and visits beyond the scope of the training to discuss sectoral developments, issues and problematics.

Improvements achieved by BIWASE: 1. Restructuring of BIWASE organization to include new departments: Customer Service Department (to update customer data for proper billing and good connection, and to strengthen customer service team), Human Resources and Training Department (to improve HR management and development), and NRW department (to deal with busted pipes and leak detection, to replace and repair network, inspection of newly installed pipes, etc.), 2. Manuals are now operational, like: civil work procedure for household connection, water meter reading and recording procedure, and water bill collection procedure, 3. New water tariff scheme implemented, and 4. PPWASA noted in one of its visits: BIWASE has improved in data recording and monitoring, physical improvement of the offices.

The twinning is implemented by and through all levels of the organization, focusing on a limited number of operational issues for which achievable and measurable targets are set. This approach ensures that improvements are supported by all levels of the organization leading to sustainability.

The twinning stimulates day-to-day communication and consultation which is expected to continue following the closing of the twinning. It is expected that BIWASE will be able to assist other Vietnamese utilities by passing on their gained knowledge and experiences.

The twinning entities have established a good rapport and correspond directly with one another on operational and management issues.

Impacts The restructuring program of BIWASE includes: 1. Creation of NRW department – is now handling better detection of leaks, repair, inspection and maintenance of pipes and piping network, etc; which is targeting US$120,000 savings per year equivalent to 1% NRW reduction 2. Creation of Customer Service Department – which has started to update customer data for proper metering, billing and collecting system process, to improve its customer service, 3. Strengthening of Human Resources and Training Department – improving the management and development human resources (e.g. creation of a Training Center),

A57

4. Implementation of a new tariff scheme. The goal is for BIWASE to become financially sound and independent from public subsidies. As the twinning is expected to continue, beyond ADB's support, BIWASE is likely have the opportunity to further develop its capacity in the future, through sharing its experience with more sound and efficient utilities. Main lesson is that water supply utilities can be effectively supported by other water utilities since they speak the same "language", the so-called "utility-speak". Reliance on Northern consultants firms should be reduced and involvement of Northern water supply companies should be stimulated.

Lessons Learned Sharing experiences between utilities in the same region is bound to increase the relevance of the experience itself, as issues are likely to be similar. Countries at similar stages of development are also likely to rely on similar technologies, which are likely to be more appropriate to them than technologies adopted in more industrialized countries. Also, common cultural 'traits' may also facilitate the exchange of managerial and HR experiences which are likely to be more culturally appropriate than the practices found in the industrialized countries.

Recipient twins welcome the opportunity to access the experiences and insights of the expert twins on these issues. It is easy to understand why recipient twins would enter the twinning arrangement. But can the same be said for the expert twins? What do they get out of this arrangement? After all, they are investing some skilled resources in another utility that should have been devoted to their own service needs. Surprisingly enough, expert utilities have given various reasons for wanting to twin: proud of its achievements and wants to demonstrate its knowledge outside the country, sees it as a way to provide greater job scope and satisfaction for its senior engineers, consider twinning a desirable social duty to help others, or they just want to share their skills, to understand the practices of less developed utilities so they can both work toward possible improvements in their own operations.

Key contact (s) - Paulus van Klaveren, Water Supply and Sanitation Specialist Energy and Water Division South East Asia Department - Nguyen Van Thien, Director Binh Doung Water Supply - Sewerage Environment Co. Ltd - Dr. Ing (Ph.D) Chea Visoth, Assistant General Director Procurement and Training Center Phnom Penh Water Supply Authority "PPWSA"

Links to any additional resources http://www.impactalliance.org/ev_en.php?ID=49149_201&ID2=DO_TOPI

A58