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UNIDO Projects for the Promotion of Small Hydro Power for Productive Use

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UNIDO EVALUATION GROUP Independent Thematic Review UNIDO Projects for the Promotion of Small Hydro Power for Productive Use UNIDO EVALUATION GROUP ,QGHSHQGHQW7KHPDWLF5HYLHZ 81,'23URMHFWVIRUWKH 3URPRWLRQRI6PDOO+\GUR 3RZHUIRU3URGXFWLYH8VH 81,7('1$7,216,1'8675,$/'(9(/230(1725*$1,=$7,21 9LHQQD Distr. GENERAL OSL/EVA/R.1 January 2010 Original: English The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Mention of company names and commercial products does not imply the endorsement of UNIDO. The views and opinions of the team do not necessarily reflect the views of the Governments of Mozambique, Switzerland and of UNIDO. This document has not been formally edited. Contents Executive Summary ix 1. Introduction 1 2. Summary information on sites visited 3 3. The planning basis of the UNIDO SHP promotion activities 8 4. Conclusions and recommendations 11 4.1. Conclusions related to strategy, relevance and 11 effectiveness 4.2. Conclusions related to programme execution and 13 efficiency 4.3. Contributions to objectives of the “Renewable and rural 16 energy unit” 4.4. Recommendations 18 5. Rural electrification: Some basic facts and trends 20 5.1. Rural electrification: policies, costs, benefits 20 5.2. Overcoming the “anti-poor pattern” of rural electrification 23 5.3. Community based electrification schemes 25 5.4. Non-conventional routes to electrification for rural 27 households 5.5. The “Lighting Africa” initiative of the World Bank 28 5.6. The productive use of electricity 31 5.7. Conclusions 32 iii 6. SHP based electrification 34 6.1. Some basic design and cost characteristics 34 6.2. Basic design features of SHP 35 6.3. SHP for productive use 36 6.4. National context matters: two contrasting country cases 37 6.5. Conclusions 39 7. The UNIDO SHP activities in Sri Lanka 41 7.1. Background 41 7.2. Small-scale Hydropower 42 7.3. The DENDRO technology 48 7.4. The UNIDO renewable energy project in Sri Lanka 49 7.5. Self-assessment by Project Manager 52 7.6. Assessment of UNIDO’s SHP project in Sri Lanka 52 7.6.1. Relevance 52 7.6.2. Effectiveness 53 7.6.3. Efficiency 55 7.6.4. Ownership and sustainability 56 8. The UNIDO SHP activities in Rwanda 57 8.1. UNIDO’s SHP projects in Rwanda 57 8.2. The SHP identification study of 2004 59 8.3. The SHP pilot site of Nyamyotsi I 59 8.3.1. Planning of Nyamyotsi I 60 8.3.2. The implementation of Nyamyotsi I 60 8.3.3. Operation of Nyamyotsi I 61 8.4. The up scaling process: Mutobo, Gatubwe, Nyamyotsi II 62 8.4.1. The trust fund agreement between UNIDO and 62 Rwanda 8.4.2. Status of implementation of Mutobo 65 8.4.3. Status of implementation at Gatubwe 66 iv 8.4.4. Status of implementation at Nyamyotsi II 66 8.4.5. The SHP programme of the Government 67 8.5. Assessment of UNIDO’s SHP activities in Rwanda 68 8.5.1. Relevance 69 8.5.2. Effectiveness 69 8.5.3. Efficiency 70 8.5.4. Impact 72 8.5.5. Sustainability 73 9. The UNIDO SHP Project in Tanzania 74 9.1. SHP planning and reporting under the IP Tanzania 74 (phase II) 9.2. Ad-hoc initiation of SHP activities through a visit from 74 China 9.3. The SHP pilot site of Yongoma 75 9.4. The SHP pilot site of Kinko 75 9.4.1. The village of Kinko 76 9.4.2. Small-scale agricultural processing activities in 77 Kinko 9.4.3. Design, construction and commissioning of the SHP 77 plant in Kinko 9.4.4. Operation of the Kinko plant 79 9.4.5. The Management structure in Kinko 80 9.4.6. Challenges 81 9.4.7. Capacity building 82 9.5. Assessment of UNIDO’s SHP related activities in Tanzania 83 9.5.1. Relevance 83 9.5.2. Effectiveness and efficiency 85 9.5.3. Sustainability 86 9.5.4. Impact 87 v 10. The UNIDO SHP project in Kenya 88 10.1. Electrification and renewable energy issues in Kenya 89 10.1.1. Rural electrification increases rapidly but from a 89 very low level 10.1.2. Surprisingly high penetration rate of solar home 90 systems 10.1.3. Despite subsidies, many poor households cannot 90 afford grid access 10.1.4. Potential customers for productive use of 90 electricity 10.1.5. Policy and institutional environment for rural 91 electrification 10.2. Kenya’s renewable energy potential under a poverty 93 perspective 10.3. Small-scale Hydropower in Kenya 100 10.3.1. SHP potential in Kenya 100 10.3.2. SHP activities of other donors 101 10.4. UNIDO’s SHP activities in Kenya 102 10.4.1. The planning of the UNIDO SHP project 102 10.4.2. Kibae (Kirinyaga District) 104 10.4.3. Ikinu (Kiambu District) 106 10.4.4. Mathioya (Kagwanya District) 107 10.4.5. Boito (Kericho District) 107 10.5. Rechargeable lamps 108 10.6. Assessment of UNIDO’s SHP related activities in Kenya 109 10.6.1. Relevance 109 10.6.2. Effectiveness 110 10.6.3. Efficiency 111 10.6.4. Sustainability 111 vi 11. The UNIDO SHP project in Indonesia 113 11.1. Project background 113 11.2. Project assessment 114 11.2.1. Relevance 114 11.2.2. Effectiveness and results 115 11.2.3. Efficiency and project management 116 11.2.4. Sustainability 117 11.3. Recommendation 117 12. The UNIDO SHP project in Mali 119 12.1. Summary assessment 119 12.2. Detailed assessment (in French) 120 Annex: Photographs 123 vii viii Executive Summary This independent review of UNIDO projects in the area of Small-Scale Hydropower (SHP) responds to an ad-hoc request of the Director-General of UNIDO. The review was carried out by Peter Loewe, Senior Evaluation Officer at the UNIDO Evaluation Group. As of October 2008, the operational status of the 24 SHP sites in 14 countries can be summarized as follows: • Five sites are operational, three of which are 1-2 kW pico-hydro installations • Two sites in Nigeria are finalized but their commissioning is pending • Two sites in Tanzania and Kenya were operational but operation is suspended due to technical or other problems • The operation of the site in India is suspended because grid electricity has become available at this site • Four sites in Nigeria and Rwanda are under construction • The finalization of the site in Mali (3 kW) is suspended due to technical and other problems • The equipment for the four sites in Sri Lanka, Tanzania, Ghana and Uganda has been delivered but not installed for various reasons • The construction of the site in Cambodia is underway but the available budget is unlikely to be sufficient to complete the work • Four sites in Uganda, Sierra Leone, Zambia and Ecuador are at the feasibility stage, the latter for more than four years The following main findings emerge from the independent review: A collection of “pilot projects” on a weak programmatic basis UNIDO pursues SHP “pilot projects” since many years and in a relatively large number but there is no evidence of systematic programmatic planning, collection and analysis of data, systematic review of literature or analysis of relevant evaluations from other donors. With the exception of Ecuador, the hydropower resources of target countries were not systematically mapped and assessed, although this is necessary to assure the relevance and replicability of a pilot project. On a global scale, UNIDO tends to assess the SHP potential quite optimistically but this optimism is not based on a systematic assessment of the economically viable SHP potential world wide. Weak feasibility studies The analytical weakness is also reflected by the relatively superficial feasibility studies or the lack of such studies for the individual project sites. Basic parameters such as the perennial availability of hydropower resources, silt load or proximity of the central grid were not properly assessed. These shortcomings led to costly design corrections during project execution, maintenance problems, and under-equipping of some of the sites or even technical failures. At none of ix the sites, the electricity production costs were properly estimated by ex-ante feasibility studies or calculated ex-post by “as-built studies”. Weak reporting, accountability and learning mechanisms The execution of the SHP activities has been characterized by weak reporting, accountability and learning mechanisms. Regular project progress reports are not available and most self-evaluation reports are of poor quality. The results of “pilot projects” are not analyzed in a systematic manner and no explicit lessons are drawn from the projects. The delivery of outputs and deliverables mentioned in project documents is not verified and recommendations from evaluations are not followed through. There is no evidence of systematic learning at unit level or transfer of experiences between individual project officers. Technology supply driven approach In many countries, the starting point of UNIDO activities has been the donation of turbines from China, leading to a technology supply driven approach, although turbine cost is, in general, insignificant as compared to the overall project cost. In four countries, Chinese turbines were delivered but not yet installed. Sri Lanka has been an extreme case, where the decision to import a donated turbine instead of using a nationally manufactured turbine delayed the project by more than a year, caused significant additional cost and was counterproductive because failing to support the local manufacturing capacity.
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