Mid-Term Review of Energy Efficiency in Building Sector Project

Report Cover Image
Evaluation Plan:
2017-2023, Iran
Evaluation Type:
Mid Term Project
Planned End Date:
09/2019
Completion Date:
12/2019
Status:
Completed
Management Response:
Yes
Evaluation Budget(US $):
35,000

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Title Mid-Term Review of Energy Efficiency in Building Sector Project
Atlas Project Number: 00063735
Evaluation Plan: 2017-2023, Iran
Evaluation Type: Mid Term Project
Status: Completed
Completion Date: 12/2019
Planned End Date: 09/2019
Management Response: Yes
Focus Area:
  • 1. Poverty
  • 2. Others
Corporate Outcome and Output (UNDP Strategic Plan 2018-2021)
  • 1. Output 2.1.1 Low emission and climate resilient objectives addressed in national, sub-national and sectoral development plans and policies to promote economic diversification and green growth
SDG Goal
  • Goal 13. Take urgent action to combat climate change and its impacts
SDG Target
  • 13.2 Integrate climate change measures into national policies, strategies and planning
Evaluation Budget(US $): 35,000
Source of Funding:
Evaluation Expenditure(US $): 25,000
Joint Programme: No
Joint Evaluation: No
Evaluation Team members:
Name Title Nationality
Elinor Bajraktari Consultant
GEF Evaluation: Yes
GEF Project Title: Policy Reforms and Market Transformation of the Energy Efficient Buildings Sector of the I.R. Iran
Evaluation Type: Mid-term Review
Focal Area: Climate Change
Project Type: FSP
GEF Phase: GEF-4
GEF Project ID: 3800
PIMS Number: 4018
Key Stakeholders:
Countries: IRAN (ISLAMIC REPUBLIC OF)
Lessons
Findings
1.

3.3. Project Results

This section of the report is organized along the standard dimensions of UNDP evaluations: i) relevance - the extent to which the project has been relevant to the country’s priorities and needs; ii) effectiveness - whether the project has been effective towards the achievement of desired and planned results; iii) efficiency - whether the process of achieving results has been efficient; iv) sustainability - the extent to which the benefits of the project are likely to be sustained; and, v) mainstreaming – the extent to which considerations related to gender, human rights and SDGs have been incorporated into project activities.


Tag: Resilience building Energy Awareness raising Capacity Building

2.

3.3.1. Progress Towards Results (Continuation)

• Second, a number of mid-term targets have not been achieved, which is not surprising given the delays and challenges that the project has experienced. These targets are marked in red in the table and will require greater attention by the project team during the remainder of the project’s lifetime. Most of them are bound to see accelerated progess int he coming months because they are linked to the pilots and the establishment of the market mechanisms which have experienced delays but are well under way now.


Tag: Challenges Effectiveness Efficiency Results-Based Management

3.

3.3.2. Relevance

This section provides an assessment of the relevance of the project. While there may be many criteria for assessing the project’s relevance, here it will be assessed along the following dimensions: i) relevance to the country’s needs and priorities; ii) relevance to UN Country Priorities and UNDP’s Country Mandate and Strategy; and, iii) relevance to GEF objectives. 

Relevance to the country’s needs and priorities • The project goal, 153 Million tons cumulative CO2 emission reduction is completely in line with the national designated commitments (NDC) that is reducing 4 percent of carbon emission until 2030. • Two objectives of the project, firstly 25% reduction in existing building and secondly 60% reduction in new buildings, are completely compliant with the target set (50% reduction in energy intensity of the country) based on the Law of reform in energy consumption pattern (Law #1770) that must be achieved by end of 6th, 5-year development plan of the country.


Tag: Energy Environment Policy Relevance Project and Programme management Results-Based Management UN Country Team

4.

3.3.2. Relevance (continuation)

• Expected CPAP Outputs o The CP (2012-16) focused on four main areas: (a) poverty reduction; (b) health in terms of support to GFATM implementation; (c) environmentally sustainable development; and (d) natural disaster management. This project contributes towards the climate change mitigation goals at the national and subnational levels. Specifically, it contributes to Outcome 4 of the CP: National, subnational and local capacities enhanced to ensure: • Integrated management, conservation and sustainable use of ecosystems, natural resources and biodiversity; • Mainstreaming environmental economics into national planning and audits; • Effective use of knowledge and tools in prevention, control and response to current and emerging environmental pollution; and, • Formulation and implementation of climate change mitigation and adaptation plans and projects.
 


Tag: Climate Change Adaptation Climate change governance Energy Natural Resouce management Relevance Global Environment Facility fund Knowledge management Technology

5.

3.3.3. Effectiveness

This section provides a brief overview of the project’s effectiveness, which in this case implies the extent to which the project has achieved what it set out to achieve. The main achievements of the project are outlined in detail in the previous section of this report focused on “progress towards results”. Overall, the outcomes targets identified in the Project Document have not been achieved, but the main problem is with the way the outcomes have been defined – as discussed in the design section of this report, the outcome indicators used in this project’s RRF are way too ambitious. Some mid-term output targets have been achieved, but a number of them have not been achieved. Furthermore, as discussed already, a number of output indicators and targets are not realistic or lack clarity and therefore need to be modified. This is something that should be discussed and settled in the project’s Steering Committee. The general observation that can be made with regards to effectiveness is that the project has suffered from serious delays, but starting from this year (2019) there has been renewed impetus, an acceleration of activities across all components, closer engagement with stakeholders and better use of resources. The achievements of this project up to this point are described in more detail in the table on the assessment of project Log Frame indicators in the section on “progress towards results”. This section will highlight just some of the major results by component: 


Tag: Climate Change Adaptation Climate change governance Energy Effectiveness Business Model Policies & Procedures Procurement Inclusive economic growth Capacity Building

6.

3.3.4. Efficiency

This section provides an assessment of the project’s efficiency. To assess efficiency, the report focuses on a number of parameters that are closely associated with efficient project management. These parameters are categorized into the following categories: i) budget execution rates; ii) timeliness of project activities; and iii) synergies with other projects.

Budget Execution Rates Budget execution rates can be an adequate indicator of efficiency because inefficient projects usually have delays in expenditure which results in more spending occurring at accelerated rates closer to project end dates. This typically leads to hurried decisions and hastened implementation which is rarely efficient. The table below shows execution rates, provided by the project team. As can be seen from the table, the budget execution rate for the whole period has been quite low – standing at about 22% of planned expenditure at the point of MTR. Within project components (outcomes) there some diversity in terms of execution rates. Outcome 2 has seen weak execution rates averaging about 10% in the period of project implementation. The other two components have had execution rates of 38% and 21% respectively. Overall, administrative (project management) costs have been low, averaging about 5% of total project expenditure for the whole period of project implementation, which is an indication of good administrative efficiency.


Tag: Energy Efficiency Programme Synergy Results-Based Management

7.

3.3.5. Sustainability

While the sustainability of project outcomes is shaped by a number of factors, the focus of this section is on risks related to financial, sociopolitical, institutional, and environmental sustainability of project outcomes. These are standard dimensions in the evaluation of GEF-funded projects.

Financial resources The sustainability of the EE market beyond the piloting conducted under the EEEB project involves substantial challenges. It is crucial that the financing of EE investments is done on a market basis, which will ensure the sustainability of investment. The establishment of the market mechanism underpinned by the EE Certificate will be crucial for sustaining the results that the project is seeking to achieve. The key question of how the market mechanism will be established in the remaining time of this project should be the most crucial issue facing the stakeholders. In addition, the financial sustainability of the market mechanism will require the establishment of a dedicated fund or partnership with existing national funds and the establishment of a proper financing scheme. Alternatively, the involvement of the financial sector (i.e. commercial banks) in the financing of EE improvements in the buildings sector will strengthen the viability and sustainability of this market. Another key aspect of sustainability is the involvement of all EErelated players in building sector (knowledge-based, start-ups, suppliers, service providers, etc.), and not only ESCOs. This will require the provision by the project of requisite training for all players. Given these positive examples, but also challenges, the likelihood of sustainability of the project’s outcomes from a financial perspective is rated as “Moderately Likely”.


Tag: Climate Change Adaptation Climate change governance Resilience building Energy Environment Policy Sustainability Global Environment Facility fund

8.

3.3.5. Sustainability (continuation)

Institutional framework and governance

The project’s sustainability from a governance and institutional perspective is related to the likelihood that project outcomes will be sustained beyond the project’s completion. As can be surmised from the discussion in the previous sections, replicability and scalability are at the forefront of the project mission. The intended purpose of the pilot projects is to showcase how such systems could be made self-sustainable and replicable, driven largely by markets rather than the subsidy, which is usually the case. From a sustainability perspective, the fundamental replication mechanism of this project is the “EE Market” mechanism which is expected to lead to large-scale transformation in the energy sector. The hinge for the replication success of this project is the establishment of the EE Market. This is going to be a serious challenge, given the complexity of issues involved in the establishment of such a market. Key elements and challenges related to the establishment of the market are discussed throughout this report.


Tag: Resilience building Energy Sustainability Knowledge management Advocacy Awareness raising Capacity Building Private Sector Challenges

9.

3.3.6. Mainstreaming

The MTR also examined the project’s mainstreaming of cross-cutting programming principles, such as gender equality, engagement of vulnerable groups, Sustainable Development Goals (SDGs), etc

Gender In a typical Iranian family, women play a critical role in the social and cultural structure of the family and the administration of the household. Since women have an active role as a partner and mother, they can be very effective in promoting energy and environment optimization within the family. The project is focusing on women as managers at home (to reduce energy consumption on daily basis, educate the family about energy efficiency and to buy energy efficient home appliances). The project has launched a series of awareness-raising workshops aimed at exploring the role of women in reforming consumption patterns and behaviour change which was designed and implemented to raise awareness about the importance of optimizing energy consumption and providing practical solutions, especially for women working in offices. In these workshops, women were trained to improve energy-efficient behaviours.


Tag: Resilience building Energy Gender Equality Gender Mainstreaming Women's Empowerment Local Governance Capacity Building Vulnerable Women and gilrs Effectiveness

10.

Mainstreaming

Engagement of Vulnerable Groups This project has the potential to create working opportunities for people in engineering, auditing, construction, and material supplying. Especially women can work in all the mentioned fields. In addition, reducing energy consumption means more petroleum and natural gas exports, more public funds available for social programmes, and consequently less poverty. Further, the project is expected to contribute to people’s basic right to a clean, safe and ecologically-balanced environment. For all this potential, there is a lack of evidence that points to a targeting by the project of vulnerable groups and addressing the needs of persons with disabilities, low-income families, etc. The following is a brief summary of the main dimensions in which the project should focus in the coming months. • Need to encourage the adoption of resilient livelihoods through the implementation of environmentally sustainable technologies. • Need to encourage participation of local stakeholders in developing EE solutions, which will lead to a greater level of community involvement in implementing EE solutions. • Focus on job creation, poverty reduction and reduced vulnerabilities, which are crucial aspects of human rights. • Possibility of creating employment, which is particularly attractive for women. 


Tag: Environment Policy Sustainability Gender Equality Women's Empowerment Integration Jobs and Livelihoods SDG Integration Vulnerable Resilience building Energy Effectiveness Human rights

Recommendations
1

Recommendation 1: Addressing Implementation Delays and Project Revision

To complete all the key activities, and in particular the pilots that are underway, the project will most likely need a no-cost extension. This matter was brought up in the meetings with most project stakeholders. The recommendation of this MTR is for the project team to conduct a careful review of this matter based on the implementation plans and submit a clear request to the Steering Committee for its consideration.

Further, the project team should focus on the supervision and coordination of the execution of the pilot buildings, which is going to be a very complex exercise and crucial for increasing the delivery of the project. The project team should establish regular (preferably, bi-weekly) meetings with the parties delivering the works (ESCOs) where it can discuss progress and possible bottlenecks.

Another major recommendation of this MTR is to adjust the project’s design and RRF in accordance with the changes in the external environment and in line with the estimations that the project team has produced (as discussed in the previous sections of this report). Given the challenges with the project indicators and targets presented in the table above, the MTR team suggests a comprehensive and systematic review of the RRF by the project team and project stakeholders to understand what was the original intention of the selected indicators and what is feasible in the current situation. The project team has made good progress now in identifying alternative indicators and targets which are not only more realistic and feasible, but also closely related to the project’s primary goal and objectives. Revisions to the RRF within the constraints of GEF guidelines should be discussed and approved in the project’s Steering Committee and further agreed with UNDP and GEF.

This MTR also recommends that the scope of EE improvements is widened to include any building-related improvements, including electricity savings, and at the same time excluding CCHP technologies which at this point in time do not seem feasible under this project.

Further, the MTR recommends that the project team pay greater attention to the ways in which disadvantaged groups, including women and persons with disabilities, could benefit from this project either as beneficiaries of the various project activities or as participants in the pilot projects.

2

Recommendation 2:  Coordination and Engagement with Relevant Stakeholders

The project team should seek to strengthen coordination with all relevant stakeholders within the framework of the project. The Steering Committee is a good platform for strengthening this coordination. Starting from 2019, there has been a greater engagement of some of the key partners, including VPST, with the project, which has resulted in the reinvigoration of coordination and acceleration of project activities. It will be important now for the project team to strengthen therole of the Steering Committee, have more frequent meetings and involve other partners that have thus far been less involved with the process. 

It will be important for the project team and stakeholders to identify lessons and complementarities with the projects funded by JICA and the German Ministry for Environment, and others that might be ongoing in the country. The potential for synergies is particularly strong with the Germanfunded project which is implemented by VPST.

3

Recommendation 3:  Pilots Initiatives and Market Mechanism

The project team should finalize its definition of “buildings” and submit it to the Steering Committee and project stakeholders for endorsement. In this way, everyone will be reading from the same page. Further, the project team should focus on the establishment of the Monitoring, Reporting and Verification (MRV) system for the pilots. This should also include the establishment of a system to monitor the quality of implementation of pilot initiatives by the contractors. This will be essential as more and more pilots get underway. The project team should also assess the need for additional resources in the supervision of contractors. Closer engagement with the contractors will strengthen the quality and cost-effectiveness of pilots. The quality assurance system could include spot-checks of projects by contracted technical support consultants during and after the construction. The project team should organize training sessions on the monitoring and implementation of pilot projects by the contractors.

Further, it will essential for the project team in close cooperation with the VPST to develop some realistic scenarios for how to proceed with the establishment of the market mechanism within the time and resource constraints of the project. This work should go beyond the exiting concept note and focus on what is realistically feasible and what is not identifying clear timelines for all alternatives and respective activities. A key decision by the government that the project team should facilitate is on the appointment of an influential state entity to be responsible for managing the market mechanism. This decision is essential and should be made as soon as possible. Also, more focus on the financing scheme, and where feasible the involvement of commercial banks, will be necessary. Further, in case the development of the EE Certificate Scheme is moving too slowly, the project could even consider a "simulation exercise" of testing such a scheme.

4

Recommendation 4:  Energy Management Information System (EMIS)

The project team should bring the issue of the ownership of EMIS to the attention of the Steering Committee and key stakeholders, which should make a firm decision is made soon. Also, project stakeholders should define and agree from the outset the work-flow, processes, procedures and roles and responsibilities for EMIS. Furthermore, the project team does not need to reinvent the wheel with EMIS – such systems have been developed in other countries with UNDP support (i.e. Bosnia and Herzegovina, Serbia, India, etc.) and the project could facilitate learning and exchange of experiences with these countries. The project team should explore the possibility of support to the contractor selected for the development of EMIS from an international expert who has experience with the successful implementation of such systems in the countries.

5

Recommendation 5:  Sequencing of Activities

Given the interconnectedness of the different pieces (components) of the EEEB project, it will be essential for the project team to carefully review the sequencing of activities and decide what activities are essential and in which order. Some key decisions need to be made in this regard. First, is it possible to test the EE market mechanism through the pilots (any of the batches that are planned? If not, how will the market mechanism be tested? How many pilots (buildings) will be necessary to test the market mechanism? Can the market mechanism be established without the EMIS system being fully operational? What legal instruments will be necessary to have a fully functioning market mechanism and how long will it take to develop those instruments and get them approved? An even more fundamental question is whether it is possible within the timelines of this project to have a basic market mechanism ready for testing. These are issues that the project team should assess realistically and bring to the attention of the Steering Committee for a clear decision on how to proceed. If these issues are settled satisfactorily at this stage, then the project can focus on what is feasible and try to do the best of the remaining time and resources. 

6

Recommendation 6:  M&E System and Project Finance

The monitoring of risks through the risk log or risk register is another priority that should be addressed by the project team and brought to the attention of the Steering Committee. In the risk log, risks should be categorized by level and actions for reducing their likelihoods should be identified and taken. The project should track more effectively a number of crucial parameters. The following are the most important: 

• Another element that the project team could track more effectively is the uptake of project outputs (studies, trainings, etc.) and the degree to which they serve their intended purpose. For example, the project could monitor more closely the extent to which analytical documents produced by the project get incorporated into national policies and programmes. • Also, the project team could track more effectively the degree to which the capacity of participants in the various training programmes improves. This was an important activity of the project which could not be assessed by the MTR team because of the lack of data. • The project team should track closely the experience of pilot initiatives, the lessons they generate and the extent to which they get scaled up. It is early to talk about their scale of replication, but one characteristic of them is that they serve to produce lessons which when shared may lead to replication. They can be vehicles for transmitting experience and play a crucial role for upscaling and replication. However, it is not clear how their lessons will be collected, analyzed, synthesized and shared. The project should develop a tracking mechanism for pilot initiatives, including documenting results, lessons, experiences and good practices. • The project should monitor co-financing more effectively by improving its tracking system

A revision of the budget is necessary, certainly within the constraints of GEF guidelines. It is commendable that the project team has already developed a budget plan. The team should now present the budget plan to the Steering Committee for its discussion and endorsement, and subsequently receive all the necessary approvals for the changes. Further, the project team should track co-financing carefully and at the time of the final evaluation should work with the evaluation team to document and validate all the co-financing information. 

7

Recommendation 7:  Sustainability and Capacity Building

The project team should explore ways of strengthening the financial sustainability of the market mechanism through a dedicated fund or partnership with existing national funds and the establishment of a proper financing scheme. Alternatively, the involvement of the financial sector (i.e. commercial banks) in the financing of EE improvements in the buildings sector will strengthen the viability and sustainability of this market. 

The project team should pay more attention to the limited capacity of ESCOs and building owners. The lack of sufficient local capacity and experience is one of the causes of the delays that the project has experienced. The project team should strengthen the capacity building component of the project and where feasible allocate more attention and resources to the issue of capacity building for energy companies and professionals. The project team should also seek to engage a broader range of EE-related players in the building sector (knowledge-based, start-ups, suppliers, service providers etc.), and not only ESCOs. This will require the provision by the project of requisite training for all players.

The project should reconsider and revamp the educational and awareness-raising activities, and, if possible, to allocate additional funding to these types of activities. It is also necessary that the project establish a more effective and targeted awareness campaign and trainings for building owners. It is also recommended that the project start exploring behavior insights relate to energy efficiency taking account interesting international experiences which in this area are plentiful now.

Further, the project team could be given more flexibility in setting new approaches and methods in raising awareness and shaping the public’s behavior. As an example, the project team has envisaged the building of "near-zero energy buildings" (which could include schools) to demonstrate the benefits of building energy codes and standards. The project team believes that the effects of such demonstrations will be sustained for a very long time by having such buildings visited by the public and students. This proposal and similar ideas should be submitted to the Steering Committee for a decision based on a concrete assessment by the project team of their feasibility within the constraints of the project.

1. Recommendation:

Recommendation 1: Addressing Implementation Delays and Project Revision

To complete all the key activities, and in particular the pilots that are underway, the project will most likely need a no-cost extension. This matter was brought up in the meetings with most project stakeholders. The recommendation of this MTR is for the project team to conduct a careful review of this matter based on the implementation plans and submit a clear request to the Steering Committee for its consideration.

Further, the project team should focus on the supervision and coordination of the execution of the pilot buildings, which is going to be a very complex exercise and crucial for increasing the delivery of the project. The project team should establish regular (preferably, bi-weekly) meetings with the parties delivering the works (ESCOs) where it can discuss progress and possible bottlenecks.

Another major recommendation of this MTR is to adjust the project’s design and RRF in accordance with the changes in the external environment and in line with the estimations that the project team has produced (as discussed in the previous sections of this report). Given the challenges with the project indicators and targets presented in the table above, the MTR team suggests a comprehensive and systematic review of the RRF by the project team and project stakeholders to understand what was the original intention of the selected indicators and what is feasible in the current situation. The project team has made good progress now in identifying alternative indicators and targets which are not only more realistic and feasible, but also closely related to the project’s primary goal and objectives. Revisions to the RRF within the constraints of GEF guidelines should be discussed and approved in the project’s Steering Committee and further agreed with UNDP and GEF.

This MTR also recommends that the scope of EE improvements is widened to include any building-related improvements, including electricity savings, and at the same time excluding CCHP technologies which at this point in time do not seem feasible under this project.

Further, the MTR recommends that the project team pay greater attention to the ways in which disadvantaged groups, including women and persons with disabilities, could benefit from this project either as beneficiaries of the various project activities or as participants in the pilot projects.

Management Response: [Added: 2019/12/15] [Last Updated: 2021/02/07]

Management Response:  Project team accepts delays and impact resulting from project personnel changes, immaturity of ESCO market and changing economic situation in Iran and is now actively responding to implementation concerns raised in the MTR. It has developed an operational plan to deliver the project within the revised timeline. A full workplan has been developed by and (will be) shared with Project steering committee and UNDP.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Building implementation approaches via a revised plan that is operationally viable, with revised timelines and budget allocations to meet fully project objectives
[Added: 2019/12/15] [Last Updated: 2020/01/14]
EEEB/ Committee 2019/12 Completed A revised workplan and budget have been prepared for the project which reflected activities to be done by end date of the project i.e. August 2020. However, the project team is working on another version of the workplan to be attached to the project extension request. History
2. Recommendation:

Recommendation 2:  Coordination and Engagement with Relevant Stakeholders

The project team should seek to strengthen coordination with all relevant stakeholders within the framework of the project. The Steering Committee is a good platform for strengthening this coordination. Starting from 2019, there has been a greater engagement of some of the key partners, including VPST, with the project, which has resulted in the reinvigoration of coordination and acceleration of project activities. It will be important now for the project team to strengthen therole of the Steering Committee, have more frequent meetings and involve other partners that have thus far been less involved with the process. 

It will be important for the project team and stakeholders to identify lessons and complementarities with the projects funded by JICA and the German Ministry for Environment, and others that might be ongoing in the country. The potential for synergies is particularly strong with the Germanfunded project which is implemented by VPST.

Management Response: [Added: 2019/12/15] [Last Updated: 2021/02/07]

Management Response:  The EEEB Project focus is on enhancing coordination across steering committee representatives and strengthening the institutional framework. A number of institutional relationships are identified to fulfill the market mechanism (market maker/ trader/ legislative changes).

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Establishment of Technical Advisory Teams (TAT) of stakeholders for implementation consisting of “an influential advisory body”, Subgroup of steering committee, including: • Committee for EE polices and building codes • Committee for pilot implementation including ESCOs • Committee for EEE market establishment
[Added: 2019/12/15] [Last Updated: 2021/01/18]
EEEB/ Committee 2020/12 Completed All 3 Subgroups of steering committee, including: • Committee for EE polices and building codes • Committee for pilot implementation including ESCOs • Committee for EEE market establishment have been shaped and operational. History
Formal Stakeholder coordination to formalize trading market aspects and determine designated market maker
[Added: 2019/12/15] [Last Updated: 2021/10/04]
BPO/ EEEB/ Designated Market Maker (NIGC, Tavanir, NIORDC) 2021/06 Completed After several meetings of the Market Committee, the VPST headquarters for Water and Energy technologies has been introduced as the hub for coordination of activities along with the EE market key stakeholders in October 2020. Following that 9 meetings were held during 6 months in the first half of 2021. One of the main agendas of this committee joint work was the review of draft market guidelines prepared by the EEEB project. In addition, the duration of the energy efficiency certificate and executive instructions has been submitted to the energy saving commission, lower committee of supreme energy council on 16.05.2021 and approved by supreme economic council on 24.05.2021. M&V framework of building sector and structure of energy performance contracts (EPC) have been developed in close co-operation with IFCO and SATBA and the final draft has been submitted to the energy saving commission, lower committee of supreme energy council on 16.05.2021 and approved by supreme energy council in 28.06.2021. After endorsement by the supreme energy council, the implementation and operation of EEEM is now in force. History
Formal Stakeholder consultation on specification of energy savings obligation (bylaw amendment with penalties) Exit strategy/ reducing financial incentives
[Added: 2019/12/15] [Last Updated: 2021/01/18]
BPO and EEEB Project 2020/05 Completed Analytical needs assessment has been done and all gaps have been identified in close collaboration with PBO. This way, a project has been defined to provide working instructions for implementation of bylaw. History
3. Recommendation:

Recommendation 3:  Pilots Initiatives and Market Mechanism

The project team should finalize its definition of “buildings” and submit it to the Steering Committee and project stakeholders for endorsement. In this way, everyone will be reading from the same page. Further, the project team should focus on the establishment of the Monitoring, Reporting and Verification (MRV) system for the pilots. This should also include the establishment of a system to monitor the quality of implementation of pilot initiatives by the contractors. This will be essential as more and more pilots get underway. The project team should also assess the need for additional resources in the supervision of contractors. Closer engagement with the contractors will strengthen the quality and cost-effectiveness of pilots. The quality assurance system could include spot-checks of projects by contracted technical support consultants during and after the construction. The project team should organize training sessions on the monitoring and implementation of pilot projects by the contractors.

Further, it will essential for the project team in close cooperation with the VPST to develop some realistic scenarios for how to proceed with the establishment of the market mechanism within the time and resource constraints of the project. This work should go beyond the exiting concept note and focus on what is realistically feasible and what is not identifying clear timelines for all alternatives and respective activities. A key decision by the government that the project team should facilitate is on the appointment of an influential state entity to be responsible for managing the market mechanism. This decision is essential and should be made as soon as possible. Also, more focus on the financing scheme, and where feasible the involvement of commercial banks, will be necessary. Further, in case the development of the EE Certificate Scheme is moving too slowly, the project could even consider a "simulation exercise" of testing such a scheme.

Management Response: [Added: 2019/12/15] [Last Updated: 2021/02/07]

Management Response: Evaluation of contract offers and issuance of contracting (by end 2019). Building type developed.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Pilot-2nd batch within residential sector - Preparatory activities, tender, issue of contracts for 150 building blocks (500sqm per block) - A hands-on manner actual planning processes demonstrated to deploy auditing component
[Added: 2019/12/15] [Last Updated: 2020/01/14]
EEEB/MOURD / BHRC/ INSO/ SATBA/ IFCO 2019/12 Completed The tendering has successfully concluded and issuance of the contract is on a right track. Energy audit is also under progress. History
Pilot-2nd batch within residential sector - Implementation and execution of work
[Added: 2019/12/15] [Last Updated: 2021/01/18]
EEEB/MOURD / BHRC/ INSO/ SATBA/ IFCO 2020/06 Completed -Pilot-2nd has been restructured for implementation - Holding a networking event in order to connecting ESCOs to Energy Efficiency technology providers and equipment supplier in order to Sternhagen of supply chain -Public awareness was raised to increase engagement History
Pilot-3rd batch - Preparatory activities, tender, issue of contracts - Implementation and execution of work
[Added: 2019/12/15] [Last Updated: 2021/01/18]
EEEB/MOURD / BHRC/ INSO/ SATBA/ IFCO 2020/03 Completed All the required preparatory tasks including tendering and contractual activities have been done and the implementation of pilot projects is ongoing. History
Pilot-4th batch - Preparatory activities, tender, issue of contracts - Implementation and execution of work
[Added: 2019/12/15] [Last Updated: 2021/01/18]
EEEB/MOURD / BHRC/ INSO/ SATBA/ IFCO 2020/12 Completed All the required preparatory tasks including tendering and contractual activities have been done and the implementation of pilot projects is ongoing. History
Demo near zero energy building - Preparatory activities, tender, issue of contracts - Implementation and execution of work
[Added: 2019/12/15] [Last Updated: 2021/12/09]
EEEB/MOURD / BHRC/ INSO/ SATBA/ IFCO 2021/12 Completed Due to the limited available time by the end of the project, UNDP decided to support technically through the EEEB project team, the near zero energy building (nZEB) project on the design phase. Therefore, VPST accepted to proceed with the construction and commissioning phases by themselves. Design phase has been completed by the selected contractor and the final report has been presented. History
Renovated EC, EC+ and EC++ demo building - Preparatory activities, tender, issue of contracts - Implementation and execution of work
[Added: 2019/12/15] [Last Updated: 2021/01/18]
EEEB/MOURD / BHRC/ INSO/ SATBA/ IFCO 2020/12 Completed An agreement has been signed with “Building and housing investment cooperation” to have contribution for implementation of newly constructed of EC, EC+ and EC++ demo building. History
Identification of financial instruments required for market deployment
[Added: 2019/12/15] [Last Updated: 2021/10/04]
EEEB/ BPO 2021/06 Completed Financial models of EEE market and Energy efficiency certificate structure have been finalized and approved in the Economic Council of planning and budgeting organization in May 2021. In addition, for facilitating the promotion of energy efficiency projects, some financial instruments such as revolving fund, green sukuk, renovation building energy efficiency soft loan have been identified and presented to the relevant authorities in December 2019. History
4. Recommendation:

Recommendation 4:  Energy Management Information System (EMIS)

The project team should bring the issue of the ownership of EMIS to the attention of the Steering Committee and key stakeholders, which should make a firm decision is made soon. Also, project stakeholders should define and agree from the outset the work-flow, processes, procedures and roles and responsibilities for EMIS. Furthermore, the project team does not need to reinvent the wheel with EMIS – such systems have been developed in other countries with UNDP support (i.e. Bosnia and Herzegovina, Serbia, India, etc.) and the project could facilitate learning and exchange of experiences with these countries. The project team should explore the possibility of support to the contractor selected for the development of EMIS from an international expert who has experience with the successful implementation of such systems in the countries.

Management Response: [Added: 2019/12/15] [Last Updated: 2021/02/07]

Management Response: The EEEB project 12-month work plan has been prepared by the project team and shared with UNDP. Inputs from the team and consultancy personnel responsible for delivering the EMIS component of the project have been integrated into the plan and clear timeline are in place for EMIS deliver and alignment with auditing components to achieve full project objectives. Institutional frameworks are also recommended to overcome challenges with implementation.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Building energy ID - Establishment of the code and ID - Beta Testing
[Added: 2019/12/15] [Last Updated: 2021/01/18]
EEEB/MOURD / BHRC INSO/ SATBA/ IFCO ASIA Watt 2020/09 Completed Beta-test has been developed with 70% progress to date. Smart meters are installed except the natural gas meters. History
Building energy ID - Implementation of associated activities, including training and capacity building
[Added: 2019/12/15] [Last Updated: 2021/01/18]
ICEO/ Municipality/ EEEB 2020/10 Completed This item correlate with 4th version of Code 19th ratification which has been done October 2020. Subsequently, all associated activities, including training and capacity building in collaboration with ICEO and BHRC has been initiated since October 2020 and still going on. History
Standardization - Of auditing and establishment of building typologies
[Added: 2019/12/15] [Last Updated: 2021/01/18]
ICEO/ Municipality/ EEEB 2020/09 Completed National building regulation code (ECBC) known as code 19 has been developed in co-operation with BHRC using ASHRAE as the main reference code The EEEB project is focusing on residential and non-residential buildings. Non-residential buildings can be included any buildings like Hotels, hospitals etc. provided that the buildings are willing to bring their financial sharing. Building energy committee has been established including main stakeholders (as ICEO, Tehran Municipality, BHRC, IFCO and SATBA) in order to distinguish between Energy labelling standards for existing building and ECBC for newly constructed buildings History
EEE market - Establishment of committees - Implementation of associated activities
[Added: 2019/12/15] [Last Updated: 2021/11/08]
ICEO/ Municipality/ EEEB 2021/12 Completed After several meetings of the Market Committee, the VPST headquarters for Water and Energy technologies has been introduced as the secretary of EEE market committee and making coordination due actions among key stakeholders and market committee members in October 2020. Thereafter, 9 meetings were held during 6 months in the first half of 2021. One of the main agendas of this committee was to finalize the following documents that have been studies and drafted by the EEEB project and then submitted to the Supreme energy council and economic council for endorsement. 1. Executive instructions of EEE market submitted to the energy saving commission, lower committee of supreme energy council on 16.05.2021 and approved by supreme economic council on 24.05.2021. 2. Duration and condition of the energy efficiency certificate submitted to the energy saving commission, lower committee of supreme energy council on 16.05.2021 and approved by supreme economic council on 24.05.2021. 3. M&V framework of building sector and structure of energy performance contracts (EPC) developed in close co-operation with IFCO and SATBA when final draft submitted to the energy saving commission, lower committee of supreme energy council on 16.05.2021 and approved by supreme energy council in 28.06.2021. After endorsement by the supreme energy council, the implementation and operation of EEEM is now in force. In addition, the formalities and coordination with IRANEX (Iran energy exchange) is on process to defined stock symbol for Energy Efficiency Certificate and saved energy. History
5. Recommendation:

Recommendation 5:  Sequencing of Activities

Given the interconnectedness of the different pieces (components) of the EEEB project, it will be essential for the project team to carefully review the sequencing of activities and decide what activities are essential and in which order. Some key decisions need to be made in this regard. First, is it possible to test the EE market mechanism through the pilots (any of the batches that are planned? If not, how will the market mechanism be tested? How many pilots (buildings) will be necessary to test the market mechanism? Can the market mechanism be established without the EMIS system being fully operational? What legal instruments will be necessary to have a fully functioning market mechanism and how long will it take to develop those instruments and get them approved? An even more fundamental question is whether it is possible within the timelines of this project to have a basic market mechanism ready for testing. These are issues that the project team should assess realistically and bring to the attention of the Steering Committee for a clear decision on how to proceed. If these issues are settled satisfactorily at this stage, then the project can focus on what is feasible and try to do the best of the remaining time and resources. 

Management Response: [Added: 2019/12/15] [Last Updated: 2021/02/07]

Management Response: The revised action plan is connecting all 3 components of the project. It is connecting the outputs, outcomes and critical paths across 3 specific areas of project Code-EMIS, Audits and pilots implementation and, Market makers.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Revised action plan with critical path of activities, sequencing, responsible actors and risk register. To adjust and widen the project scope (Objectives and Targets) to include thermal energy as well as electricity Project stakeholders to define and agree from the outset the workflow, processes, procedures and roles and responsibilities for EMIS.
[Added: 2019/12/15] [Last Updated: 2021/01/18]
EEEB/ Committee 2020/10 Completed Electricity as well as Natural gas has been included in the pilot implementation projects. Integrated action plan when incorporating all components of the EEEB project is being developed but needs to be revised according to the contingency plan History
6. Recommendation:

Recommendation 6:  M&E System and Project Finance

The monitoring of risks through the risk log or risk register is another priority that should be addressed by the project team and brought to the attention of the Steering Committee. In the risk log, risks should be categorized by level and actions for reducing their likelihoods should be identified and taken. The project should track more effectively a number of crucial parameters. The following are the most important: 

• Another element that the project team could track more effectively is the uptake of project outputs (studies, trainings, etc.) and the degree to which they serve their intended purpose. For example, the project could monitor more closely the extent to which analytical documents produced by the project get incorporated into national policies and programmes. • Also, the project team could track more effectively the degree to which the capacity of participants in the various training programmes improves. This was an important activity of the project which could not be assessed by the MTR team because of the lack of data. • The project team should track closely the experience of pilot initiatives, the lessons they generate and the extent to which they get scaled up. It is early to talk about their scale of replication, but one characteristic of them is that they serve to produce lessons which when shared may lead to replication. They can be vehicles for transmitting experience and play a crucial role for upscaling and replication. However, it is not clear how their lessons will be collected, analyzed, synthesized and shared. The project should develop a tracking mechanism for pilot initiatives, including documenting results, lessons, experiences and good practices. • The project should monitor co-financing more effectively by improving its tracking system

A revision of the budget is necessary, certainly within the constraints of GEF guidelines. It is commendable that the project team has already developed a budget plan. The team should now present the budget plan to the Steering Committee for its discussion and endorsement, and subsequently receive all the necessary approvals for the changes. Further, the project team should track co-financing carefully and at the time of the final evaluation should work with the evaluation team to document and validate all the co-financing information. 

Management Response: [Added: 2019/12/15] [Last Updated: 2021/02/07]

Management Response:  The project team is revising the methodology for setting, measurement and monitoring of project deliverables as per MTR project design commentary

Key Actions:

Key Action Responsible DueDate Status Comments Documents
M&E Validation across EMIS and Pilots - Preparatory work - Implementation
[Added: 2019/12/15] [Last Updated: 2021/01/18]
EEEB/ ICEO / Municipality 2020/11 Completed -10 pilot buildings have been connected to EMIS. - Based on Developed Methodology for M&V by EEEB, the associated jobs have been done by M&V supervisors of pilot projects. However, this activity is still ongoing due to covering a full year of Energy consumption pattern. History
Project Finance
[Added: 2019/12/15] [Last Updated: 2021/01/18]
EEEB/UNDP 2020/10 Completed A comprehensive study performed on establishment of green and similar energy efficiency fund. Preliminary negotiation with national funds as well as potential banks performed but for further steps, detail feasibility studies and information from actual pilot projects must be presented to the banks and other potential fund in order to set a suitable and practical form of co-operation. By progressing in pilot projects, the feasibility study report is being completed. Due to Covid-19, the market committees are suspended and Market maker has not been designated. The potential market makers have been proposed by the project to the VPST and market committee previously. It will be included in the agenda of the next steering committee for making decision. History
Risk register
[Added: 2019/12/15] [Last Updated: 2021/11/08]
EEEB 2021/12 Completed The project risks were updated on the annual report of the project to the GEF (PIR) in Jul. 2021. History
7. Recommendation:

Recommendation 7:  Sustainability and Capacity Building

The project team should explore ways of strengthening the financial sustainability of the market mechanism through a dedicated fund or partnership with existing national funds and the establishment of a proper financing scheme. Alternatively, the involvement of the financial sector (i.e. commercial banks) in the financing of EE improvements in the buildings sector will strengthen the viability and sustainability of this market. 

The project team should pay more attention to the limited capacity of ESCOs and building owners. The lack of sufficient local capacity and experience is one of the causes of the delays that the project has experienced. The project team should strengthen the capacity building component of the project and where feasible allocate more attention and resources to the issue of capacity building for energy companies and professionals. The project team should also seek to engage a broader range of EE-related players in the building sector (knowledge-based, start-ups, suppliers, service providers etc.), and not only ESCOs. This will require the provision by the project of requisite training for all players.

The project should reconsider and revamp the educational and awareness-raising activities, and, if possible, to allocate additional funding to these types of activities. It is also necessary that the project establish a more effective and targeted awareness campaign and trainings for building owners. It is also recommended that the project start exploring behavior insights relate to energy efficiency taking account interesting international experiences which in this area are plentiful now.

Further, the project team could be given more flexibility in setting new approaches and methods in raising awareness and shaping the public’s behavior. As an example, the project team has envisaged the building of "near-zero energy buildings" (which could include schools) to demonstrate the benefits of building energy codes and standards. The project team believes that the effects of such demonstrations will be sustained for a very long time by having such buildings visited by the public and students. This proposal and similar ideas should be submitted to the Steering Committee for a decision based on a concrete assessment by the project team of their feasibility within the constraints of the project.

Management Response: [Added: 2019/12/15] [Last Updated: 2021/02/07]

Management Response:  The project team is strengthening the capacity building component of the project (especially in terms of building professionals and ESCO companies), energy companies and professionals. Responses to the sustainability of the project are captured in recommendation 6 under project finance. A training of the trainer component will be included.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Training and communication activities - Developing and implementing regular training courses for related key stakeholders at provincial and local level.
[Added: 2019/12/15] [Last Updated: 2021/01/18]
BHRC/ EEEB / ICEO 2020/04 Completed A comprehensive training and awareness raising plan including required training courses and events Establishment of an implementation framework and development of training context to enhance capacity building across professionals (architects, engineers) for Building energy codes and standards and, EMIS, basic training needs assessment and advanced training (simulations to identify real energy saving potential) have been prepared. Due to COVID-19, engagement of stakeholders, EE experts, Universities students, local communities and bodies mostly have been done via virtual platforms. History
Study tour and conferences - Preparatory work - Implementation
[Added: 2019/12/15] [Last Updated: 2021/11/08]
EEEB/ UNDP 2021/12 No Longer Applicable [Justification: The issue of organizing study tour is no longer justifiable as the main reason for it was to exchange experiences over establishment of EMIS system. The EIMS system has already been established while the study tour was postponed due to Covid-19 pandemic and it's still very difficult to organize study tour because of the same reason. ]
History

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