End term Evaluation of the Biomass Energy Production Project

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Evaluation Plan:
2018-2022, Sri Lanka
Evaluation Type:
Final Project
Planned End Date:
03/2019
Completion Date:
03/2019
Status:
Completed
Management Response:
No
Evaluation Budget(US $):
27,250

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Title End term Evaluation of the Biomass Energy Production Project
Atlas Project Number: 00062498
Evaluation Plan: 2018-2022, Sri Lanka
Evaluation Type: Final Project
Status: Completed
Completion Date: 03/2019
Planned End Date: 03/2019
Management Response: Yes
UNDP Signature Solution:
  • 1. Energy
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 7. Ensure access to affordable, reliable, sustainable and modern energy for all
  • Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
SDG Target
  • 7.1 By 2030, ensure universal access to affordable, reliable and modern energy services
  • 9.4 By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities
Evaluation Budget(US $): 27,250
Source of Funding: GEF
Evaluation Expenditure(US $): 29,602
Joint Programme: No
Joint Evaluation: Yes
  • Joint with UN Agencies
  • Joint with FAO
Evaluation Team members:
Name Title Email Nationality
Rogelio Z Aldover International Consultant
Nihal Atapattu National Consultant
GEF Evaluation: Yes
GEF Project Title: Promoting Sustainable Biomass Energy Production and Modern Bio-Energy Technologies
Evaluation Type: Terminal Evaluation
Focal Area: Climate Change
Project Type: FSP
GEF Phase: GEF-4
GEF Project ID: 4096
PIMS Number: 4226
Key Stakeholders: Ministry of Power and Energy
Countries: SRI LANKA
Comments:

FAO contribution 10,250 USDs, and UNDP Contribution 17,000 USDs.

Lessons
Findings
1.

3.1. Project Design / Formulation

The project design/formulation was scrutinized twice since its drafting in 2011, first during the IW and again during the MTR and at both occasions determined to be still valid to support the project goals and objectives. The project document is identifying several barriers to increasing the use of biomass energy in the industrial sector that are considered to be valid over the lifetime of the project. The identified barriers are clearly articulated, and the strategy and approach proposed to address them are well grounded on the prevailing situation.The importance of BET pilots in demonstrating the technical feasibility and financial viability of biomass technologies can be recognized as a very effective approach to achieve the project objectives in the context of Sri Lanka. Furthermore, knowledge build up and improved support for sustainable fuel wood production have been successful in enticing more growers to start fuelwood cultivations. Project interventions to enhance knowledge of, access to, and maintenance of biomass energy technologies have helped to address capacity development in the bioenergy technology application.


Tag: Energy Change Management Innovation Programme/Project Design

2.

Another area where the project design has failed to fully appreciate the level of effort required to effect change in the country context is the policy and regulatory reform recognized under Outcome 1:Approved and implemented policy instruments that promote and support the use of sustainably produced fuel wood in industrial thermal applications. Due to the high level of disaggregation of agency responsibilities, coordination of policy dialogue and building consensus has been a challenge in the context of Sri Lanka. As a result, achieving this outcome remains work in progress at the EOP mark.

Also, the availability of land and the adequacy of funding to ensure the establishment of fuel wood plantations to supply the planned biomass installations had not been properly assessed. It was appropriately recognized that the establishment of fuel wood plantations would take longer and in actual practice the activity took up even longertime. The funds budgeted fell well short of the requirements thereby compelling the project to devise hurried measures to overcome the potential shortfall. This had no adverse impact on the operation of BETs as there was adequate residual biomass suppliesfrom existing plantations and by-product and waste streams diverted to the supply chain.


Tag: Challenges Policies & Procedures Programme/Project Design Coordination

3.

3.1.1. Analysis of LFA/Results Framework (Project logic /strategy; Indicators)

The project LF targets at the goal and objective level were defined in terms of 12 operating BETs at EOP and another 12 becoming operational post-project with a total capacity of 20 MWth and1MWe resulting in fossil fuel savings, electricity savings and direct and indirect emission reductions. The industry recognized the need to address the growing demand for thermal energy, electricity and space cooling and refrigeration.The EOP objective target of fossil fuel savings of about 295,178GJ annually and 4,680 MWh of electricity,and direct emission reduction (cumulative over 10-year lifetime)of 252ktCO2 were to be achieved from those BETs installed by EOP and post-project. As observed, the project managed to have the targets for the installed BETs and both the fuel saving and emission reductiont argets exceeded before the EOP.


Tag: Emission Reduction Programme/Project Design Project and Programme management

4.

As suggested earlier, indicators relating to policy and regulatory improvements for Outcome 1 were particularly hard to achieve. Given the recognized complexity of the process in the context of Sri Lanka, perhaps the level of effort identified for this task could have been augmented. The indicators and EOP targets for the Outcome 2 were fine except for the hectarage for sustainable fuel wood expected to be developed which was under-funded, and also not directly linked to supplying demo projects. In fact, because the establishment of fuel wood cultivations took place so late in the scheme, the full requirements of demo projects were likely met from the existing sources, by-products and waste streams. The residual biomass supplies available to be connected to the supply chain havebeen much greater than the anticipated quantities. The progress inestablishing new fuel wood plantations wasadversely impacted by the extended drought conditions that affected targeted plantation areas.


Tag: Waste management Policies & Procedures Programme/Project Design Results-Based Management Awareness raising

5.

3.1.2. Assumptions and Risks

The ProDoc identified total of 8 risks,3 ranked medium and 5 others rated as lowrisks, and appropriate mitigation actions. At the IW,the risk ratings of some of them were changed and 4 new risks were added. While the identified risks had not changed in a significant way or mitigated effectively, one risk that had not been properly assessed is the climate-related impacts on the project activities. Such impacts were reported with respect to establishment of fuel wood plantations and in the launching of fuel wood terminals adversely impacting the timelines of operations. The critical management measures undertaken to deal with organizational, financial, operational, political and other risks were reported and reviewed as a part of the PIR process as well ensuring dedicated attention to risk management.

The assumptions pertaining to the operational environment while not altered in a significant way, assumptions identified as not effectively addressed, i.e. policy and regulatory frame work improvement and receptivity of financial institutions to support the supply chain, remained somewhat elusive throughout the project life, for reasons alluded earlier.


Tag: Climate Change Adaptation Operational Efficiency Risk Management

6.

3.1.3. Lessons from other relevant projects (e.g., same focal area) incorporated into project design

The project benefitted from the regional and global experiences and lessons UNDP and the FAO gained in supporting other biomass-energy projects, the ProDoc referred to one specific project in Sri Lanka as providing relevant lessons for planning. The Dutch-sponsored ‘Promotion of Eco-Efficient Productivity Project’(PEP), which was implemented by the Ceylon Chamber of Commerce,was instrumental in introducing dendro power as an alternative to fossil fuels in industry. It was stated that during the PPG phase of the biomass project, the project development team liaised closely with the PEP project and derived good practices and lessons learned. The project design was informed by the failure of some of the PEP pilots, particularly in identifying risks and barriers.

The approach taken by the Project covering the full range of activities in the biomass value chain from raising awareness and capacity building, biomass growing and processing technologies, introducing new BETs, developing marketing facilities, introducing investment models, contributing to policy and institutional reform in a single project was possibly informed by the global experience of UNDP and FAO. Compared to projects such as PEP previously implemented in Sri Lanka, the approach of the project was therefore unique and a key reason behind its success to produce significant results.


Tag: Clean Energy Relevance Value Chain Capacity Building

7.

3.1.4. Planned stakeholder participation

As outlined in the Section 14 of the ProDoc, over the project development phase consultations with a wide range of stakeholders including government ministries and departments, private sector, NGOs, industry organizations, and other relevant projects. Although the responsibilities and roles of the various organizations listed out, it fell short of a comprehensive stakeholder analysis by not recognizing roles of other organizations that were not directly partnering in the project, but still had influence on the activities and outcomes, i.e.,for example,the Ceylon Electricity Board. The Project Implementation Planmaintained an open approach towards accommodating relevant stakeholders as seen by new partner groups enlisted to implement various activities. The Project Inception Workshop facilitated participation more stakeholder groups by including universities, donors, financial institutes and international organizations in the discussions.


Tag: Partnership Civil Societies and NGOs National Institutions Private Sector

8.

3.1.5. Replication approach

Replication of piloted BETs, fuel-wood growing and supply chains, financing models etc. is key to the sustainability and impact of the project. It is particularly so for GEF/UNDP projects of which the real impact is in the ability to multiply the impact by developing initiatives to be replicated post-project. The ProDoc recommended that a post-project action plan for newly-identified approaches be developed under Output 2 that relates to the sustainable fuel wood production. The ProDoc referenced to replication projects that will come on board at a later stage during the project in the context of estimation of bottom-up direct emission reductions and accessing CDM credits. However, no projections were made about the envisaged levels of replication.

The initiative developed by the implementing partners to have it succeeded by a Phase II can be considered the most striking action taken to replicate the results. Under the Phase II,the fuel wood growing, development of supply chains, installation of BETs, developing financing models will all be addressed. This can be taken the real test of validity of sustainability and impact of the project.


Tag: Impact Sustainability

9.

3.1.6. UNDP comparative advantage

The two GEF Implementing Agencies involved are UNDP and FAO, with the FAO primarily supporting the FD in the implementation of Component 2 on biomass (fuel wood) production, and the UNDP staying primarily responsible for components 1, 3 and 4 working with the SLSEA. The two agencies have a wealth of global experience in implementing GEF-supported project. They bring a wealth of experience of working with governments to support policy development, human resources development, inclusive institutional strengthening with comprehensive non-governmental and community engagement.

The UNDP was described as having ultimate accountability to project results (ProDoc page 63-Management Arrangements) that will be ensured by working with the PB to provide strategic guidance and making management decisions for the project, in particular when guidance is required by the Project Manager.The project design can be identified to have benefitted fully from UNDP’s comparative advantage in Sri Lanka, strongly in line withthe Country programme Document priorities of the agency. Sri Lanka follows a UNDAF framework that is designed within the ‘One-UN’ and ‘delivering-as-one’ ethic binding all UN organizations operating in Sri Lanka. The FAO as co-implementing agency of the Project provided the crucial support and oversight in the upstream side of the fuel wood plantation and related agro-forestry productive activities that enhanced the sustainability and viability of the very critical and crucial wood growing aspect of the Projectto wards overall Project goal.Given the combined experience and capacity of the two agencies in Sri Lanka extending over many decades, the UNDP-FAO collaboration in the project serves as a factor that further strengthens project implementation capacity.


Tag: Joint UN Programme Oversight Partnership UN Agencies Institutional Strengthening

10.

3.1.7. Linkages between project and other interventions within the sector

There were no other major initiatives in the renewable energy sector other than the Switch Asia project that were identified in the ProDoc. The design made provision for two-way flow of information between the project and other projects of a similar focus as opportunities arise, but during the project implementation any such collaboration did not materialize as far as the energy sector is concerned. Towards the penultimate months of the project, the ‘Enterprise Sri Lanka’ initiative launched by the Government opened up possibilities for securing financial support for innovative SMI projects under which some of the fuel wood growing and BET investments could qualify for preferential treatment. Given the late stage at which this initiative was mooted, the Phase II of the project has an opportunity to provide technical and organizational support to link the potential investors and ‘Enterprise Sri Lanka’.


Tag: Energy

11.

3.1.8. Management arrangements

At the Project design, UNDP and FAO, the two GEF Implementing Agencies, the Ministry of Environment, the ‘National Implementing Partner’ with the Forestry Department (FD)and the SLSEA under the same Ministry as technical partners were expected to be involved in project implementation. As described earlier,FAO was expected to be responsible for Outcome 2 and UNDP for Outcomes 1,3 and 4. Both UNDP and FAO provide technical support for implementation.

The Project execution modalities differ depending on the funding source. The UNDP funds are used in two ways; viz., direct funding of services contracted by UNDP, and channeling funds through MoPRE for specific activities, currently limited to SLSEA. The Ministry makes periodic cash advances to the SLSEA for project activities. The FAO implements activities directly. Direct implementation of activities by the ‘donor’ has several implications; there is uncertainty about project ownership, and participation of the state agencies could be minimal


Tag: Human and Financial resources Implementation Modality Oversight Project and Programme management Coordination

12.

3.2.1.Adaptive management (changes to the project design and project outputs during implementation)

As reported in the MTR, there was meagre accomplishment during the first two years of project implementation. The prevailing situation then was characterized by inherent effects of highly subsidized fuel oil, unacceptability of biomass gasification technology, the transition in project execution and administration from the Ministry of Environment to Ministry of Powerand Renewable Energy and the on-going integration of implementation approaches from what were complementary, but separate project concepts initiated by the UNDP and the FAO. There were at least four significant technology and people-oriented adaptations during this period after the MTR from what was originally designed. They were(a) on the technology focus, (b) on the project organizational and governance structure, (c) on more appropriate project hosting under the umbrella Ministry of Power where SLSEA is placed since the project is predominantly an energy project,and (d) on strengthened implementation and coordination mechanisms.Project Management under the new leadership introduced these major changest hat needed to be effectively managed onthe technical side and on the people side that ensured that the changes are developed, implementedand delivered effectively. The discipline of project management provided the structure, processes and tools to make this happen.


Tag: Energy Waste management Innovation Oversight Project and Programme management Capacity Building Coordination

13.

3.2.2.Partnership arrangements (with relevant stakeholders involved in the country/region)

The broad partnership arrangements have helped the effective implementation and resource mobilization of the Project which are seen in more participants brought in by the Project and involving them more activelyin their respective areas of responsibility. The enhanced partnership arrangements resulted as well to leveraging the Project’s resources to achieve the desired Project outputs.The Project Inception Meeting was utilized as a vehicle to reach out to a larger group of stakeholders including private sector businesses such as plantation companies,tourism industry, industry associations and NGO-sector organizations. The MTR recommended identifying opportunities for closer participation of some of the industry and NGO partners that were achieved with strong contribution to project outcomes. Some of the capacity building activities for example, were outsourced to organizations such as SLEMA developing strong local ownership and supporting capacity building of the implementing partner as well. The large number of project-sponsored trainings, seminars, and conferences served as an effective platformin bringing together stakeholders from biomass-energy related businesses, professionals and academics that would not have otherwise come together.


Tag: Resource mobilization Partnership Capacity Building Civil Societies and NGOs National Institutions Private Sector

14.

3.2.3.Feedback from M&E activities used for adaptive management

With the adaptive management towards the desired changes necessary to accelerate project implementation, the Project through the PMU has regularly adhered to the established M&E activities for GEF Projects which providedt he necessary feedback and information. The system of reporting provided necessary knowledge and tools that aided corrective and adaptive management actions and risk management.The risk-based approach of the feedback system enabled the adoption of measures to proactively address the evolving risks by having preventive and alleviative actions among the key participants of the Project.The conduct of the MTR and the implementation of its recommendations was a direct feedback mechanism that ensured the project in overcoming some of the delays experienced during the periodup to the MTR. While some of the delays were due to political and administrative changes that were outside of the project influence, the adaptations in the project management had not been implemented in a timely manner. The MTR recommendations grouped under 5 key areas:(1.)Project oversight and management aspects, (2.)Project strategy and the results framework, (3.)Programmatic priority areas for consideration in preparing the modified results framework, (4.)Capacity development, and (5.)Outreach provided guidance to put the project speedily back on track.It was verified during the TE that the MTR recommendations had been implemented with a serious understanding of their relevance and urgency.


Tag: Monitoring and Evaluation Project and Programme management

15.

3.2.4.Project Finance GEF Budget

In summary, the project GEF budget and expenses performance was reviewed and found to be adhering to the principle of prudence and accuracy/timeliness in reporting. The disbursementsof GEF funds between the different budget lines werein line with the planned project activitiesas per theamountsoriginally budgeted and approved in the project document. Overall, all GEF Project budget will be fully spent up to the project closure by December 31, 2018, as summarized in Table 2.

Co-financing

Overall, the co-financing plan was achieved, though a new set of co-financing partners were actually involved compared to what were listed in the ProDoc. Although the actual co-financing level from the private sector partners was lower than the values indicated in the ProDoc, it was more than compensated by the increased contributions from the government partners. On the other hand, the number of private sector participants increased which manifests the increasing interest by the private sector in biomass energy projects.


Tag: Private Sector Financing Human and Financial resources

16.

3.2.5.Monitoring and evaluation: design at entry and implementation

The standard risk-based M&E systems being used by UNDP and FAO for GEF projects, namely, the monthly, quarterly and the Annual Project Reports (APR), the Project Implementation Review (PIR)and the MTRwas built-in the design of the ProDoc and was found very useful and effective in tracking the progress of project implementation in producing the results towards the expected Project Outcomes. The ProDoc recommended that a Project Board be established under the MoERE (the initial implementing Ministry), chaired by its Secretary. In addition to the Board’s permanent members, i.e. SLSEA, FD, NPD, UNDP and FAO, it was expected to co-optotherkey stakeholders as deemed necessary. A Project Steering Committee (PSC) was set up under the MoERE with the membership of over 20 agencies at the inception and the MTR recommended that the PSC be formalized and reconstituted to effectively execute its responsibilities. The PSC was reconstituted as the PB with the transferof the project to MoPRE, chaired by its Secretary. A review of schedule of PB meetings revealed that regular meetings had been held as envisaged in the design and timely circulation of meeting reports and action points had been followed. Overall, Project Board members were satisfied with the way the activities had worked.

The organizational changes brought about by political developments in early 2015 led to a major set back in the implementation arrangements by placing SLSEA under the management of MoPRE which was not the implementing Ministry (MoERE) identified at the design. The full complement of staff identified for the project implementation had not been recruited. The MTR commissioned by the UNDP helped to highlight these drawbacks before above shortcoming made any impairment to the Project. The recommendations of the MTR were used to convince the authorities to rapidly implement the necessary improvements, relocating the Project under the MoPRE, recruiting the full complement of staff and updating the results framework of the project.


Tag: Monitoring and Evaluation Oversight

17.

The Project was successful in establishing the partnerships necessary for implementation and monitoring activities. In terms of tracking the project impacts from energy generation and GHG reductions resulting from the BETs, the services of Sri Lanka Climate Fund had been enlisted and verified MRV reports had been completed for all BETs implemented, with the remaining reports expected to be delivered by EOP. The verifications had been carried outby post-installation monitoring of industries. As many SMEs did not have baseline data, IPCC guidelines on energy estimation had been used to calculate the emissions for such cases. Where actual baseline data was available, such as the large industries actual data had been used for the estimation, i.e. Jetwing Blue had records of their electricity consumption for their electric chiller prior to replacing with the biomass absorption chiller. The range of criteria where MRV was applied included cost savings, jobs created, quality improvement, increase in production and payback period.

Operationally, the Project used the Atlas system in UNDP. FAO has its own similar system. The two systems were harmonized and operationalized to come up with one set of integrated report combining the UNDP and FAO systemsthrough the PMU as recommended in the MTR. However, the quality control and timeliness of reporting overall did not appear to have been managed in a manner to control progress effectivelyand manage risks, i.e. achieving policy and regulatory reform in a timely manner


Tag: Emission Reduction Operational Efficiency Partnership

18.

 

The project Implementing Agency (IA) and Executing Agency (EA) role in the project is suggested to be assessed by quality of UNDP/FAO implementation, qualityof EA execution, and overall quality of implementation/execution.

The project implementation was overseen by the PB effectively supported by the PMU that received the full complement of staff, including hiring of the PM after the MTR. The recommendationsof the two TACs were submitted to the PB before endorsement of actions based on findings of consultancies and other planning activities ensuring proper technical validation of them. The membership of the PB chaired by the Secretary/MoPRE included Country Representatives of the UNDP and FAO, project’s Technical Advisor, Project Director, the PM, members of the Biomass Cell in the SLSEA amongst others. Minutes of the PB meetings revealed that the UNDP and FAO had exercised strong due-diligence ensuring effective and evidence-based implementation of project activities. The PB and TAC members interviewed during the TE expressed satisfaction with their functioning.

The IP ratings provided byUNDP-GEF Technical Adviser and UNDP Country Office in the PIR process reflected the significant progress made by the project since the MTR presenting a highly satisfactory rating ln the final year of the project. TheTE acknowledges thefacilitation and management role played by the UNDP andthe FAO (to the extent of managing Outcome 2)in the overall project implementation/execution,coordination, and operational issueswith the ratingHighlySatisfactory(HS)


Tag: Monitoring and Evaluation Oversight Coordination

19.

3.2.Project Implementation

3.3.1.Overall results (attainment of objectives) (*)

With reference to the goal of reducing greenhouse gas emissions from the use of fossil fuel for thermal energy generation in the Sri Lanka industrial sector, the Project has exceeded its targets in terms of the number of operating BETs, total installed capacity and resulting fossil fuel reduction and the resultant cumulative GHG emission reduction vis-à-vis the Baseline situation (Table)

The number of operating BETs has exceeded the expected level which manifests the interest of the private sector (especially in the large users and the SME sector) as they adopt to efficient utilization of fuel wood and their confidence in biomass energy based on the economic and environmental benefits derived from the business level appreciation in the project demos. The installed capacity of operating BETs is 25.42MWth, i.e. 24.336MWth by large and 1.084MWth by SMIs)compared to the target of at least 20 MWth exceeding by 27%. The resulting fossil fuel savings is 369,600GJ or an equivalent 25% over the targeted value and the electricity saving is 7,057.4MWh/year at 109% over the target.

The cumulative direct emission reduction of the Project (over 10-year lifetime) is 389.5 ktCO2. The indirect emission reductions are between 1168 KtCO2e (bottom-up) and 4500 KtCO2e (top-down)or surpassing the target by 35%.


Tag: Emission Reduction Clean Energy Energy Policies & Procedures

20.

Outcomes 2, 3 and 4 have surpassed respective targets. Notable achievements are as follows:

  • •Regulation for biomass pricing drafted by SLSEA and submitted to the Ministry seeking the Cabinet of Ministers approval on 06 September 2018.
  • •Nine agencies have been identified to bemembers of Inter-Ministerial Officials Committee on Sustainable Biomass Energy (IMCBE), formerly referred to as Inter-Ministerial Committee on Renewable Energy (ICRE), submitted to Cabinet for approval June 20, 2018.•
  • 25 private sector institutions actively involved have been identified to be members in Bioenergy Consortium to be formalized•
  • The strategy and action plan contained in the “Sustainable Energy Program 2015-2025-Towards and Energy Secure Sri Lanka Long-Term Strategy Enforcement Plan for the Energy Sector” was endorsed and approved on 10 February 2016 by SLSEA Board. Regional energy development plan designed and implemented based on the strategy and action plan. •
  • Biomass Cell established, fully staffed and operational under SLSEA Deputy Director General (Strategy) as of Dec. 2015•
  • Biomass database system formulated as a biomass energy portal including data on supply, demand, technology suppliers, investors and financial institutions in March 2016 and adopted in Feb. 2018. Populating the database on real-time basis using internet-based network commenced from Oct. 2018. •
  • 3 large supply chains including Terminals (Monaragala, Colombo, and Kegalle) in operation by Dec 2017. 3 satellite supply chains including mini wood-chippers will be in operation by Dec. 2018.•
  • Supplier registration completed at the Terminal level. Suppliers will be included in the Portal after verification. Incentive scheme for piloting fuelwood plantations identified by DFCC Bank•
  • Ten (10) feasibility studies prepared. 06 proposals have been accepted for funding. Three biomass supply chains established and operated; 3 scheduled to be completed by EOP.•
  • 31 companies have completed feasibility studies supported by the project by 2017 including 8 large BETs. Twenty (20) Operational BETs established with co-finance from companies.•
  • 441 Million LKR investments by 7 companies who have undertaken BET investments on their own based on feasibility studies supported by the project. (vs. 40 million LKR).

In terms of the Project Objective of removing barriers to the realization of sustainable biomass plantation, and adoption of biomass-based energy technologies in Sri Lanka, the TE has assessed the status by which these barriers (as identified in the project designin 2013) are removed through the project’s activities and outputs (Table).


Tag: Energy Innovation Operational Efficiency National Institutions Private Sector

21.

3.3.2.Relevance(*)

The TE assessed Project’s relevance under key criteria defined in the UNDP guidance of the extents to which the activity is suited to local and national development priorities,and organizational policies, and its alignment with the GEF Operational Programs or the strategic priorities under which the project was funded. Further, the TE looked at the appropriateness of objectives of the intervention and its design given changed circumstances.


Tag: Energy Environment Policy Relevance Global Environment Facility fund

22.

The Project supports Sri Lanka’s environment and sustainable development objectives of establishing biomass as a viable renewable energy(National Energy Policy and Strategies of Sri Lanka, 2017). The updated version of the National Energy Policy further amplified the importance of biomass energy in the country’s strategy of attaining energy independence.

The stakeholders appreciate the Project’s contribution in improving sustained availability of biomass.The Project’s design is coherent between the expected results and implementation approach with some enhancements after MTR in matters necessary in achieving goal and objectives. Poverty reduction and gender mainstreaming have been included in the activities and future plans of the communities where these biomass energy demos have been installed. In recognition to the potential and actual achievements of the project over the long term withthe wealth of lessons learned and experiences, The Government of Sri Lanka’s Cabinet approveda follow-up long-term biomass program to be taken up by the governmentin its development agenda.


Tag: Energy Relevance Programme Synergy

23.

3.3.3.Effectiveness & Efficiency (*)

The assessment of project’s effectiveness is concerned with the extent to which an objective has been achieved or how likely it is to be achieved.The Project implementation and management is effective in achieving its Outcomes as indicated in the actual results vis-à-vis the Project LoGFrame success indicators(Chapter 3.3.1). The strategies that were designed and amplified during the MTR, were implemented, such as building on to existing local knowledge, accommodating a wide range of growing models, providing co-finance to mitigatethe financial risks and ensuring long term sustainability of the programas presently ensuredwith firm action plans embodied in the Biomass Energy 2022 Program launched by the Government. The effectiveness of the project strategy and pragmatic implementing approaches taken were seen the ramifications made to the project design in pursuing the project goal and objectives:•

  • Focusing on more practical biomass technology needed by industries•
  • Directing by-products and waste streams to fill the gap in biomass supply•
  • Identifying supply chains linked to large terminals and a network of satellite supply chains.

Therefore, considering the extent to which the Project’s objectives have been or likely to be achieved the effectiveness is assessed to be Highly Satisfactory(Rating: HS).


Tag: Energy Effectiveness Project and Programme management

24.

The efficiency is concerned with the extent to which results have been delivered with the least costly resources possible; also called cost effectiveness or efficacy. The project management demonstrated good financial management utilizing the full allocation of funds, albeit an extension of 5 months on top of a one-year delay in getting it off the ground. The estimated direct impact of the project in terms of abatement of CO2e emissionsis 178 USD per ton CO2e at EOP and USD 20 per ton over the 10-year technology time.These levels of impact can be considered reasonable for a project with relatively small, stand-alone RE applications. The Project’s post-MTR implementation and management is efficient considering the following:

  • •Financial and progress reports are submitted timely with close CO guidance•
  • Co-financing and participation of partners were realized and additional supporters were leveraged, viz., bank financing and feasibility studies •
  • Adaptive management was resorted to prevent decline of implementation efficiency due to the project exceeding the original timelines•
  • Project costs were managed to be within budgeted levels by leveraging more co-financing•
  • Partnership arrangements between the two IAs (UNDP &FAO) have been greatly improved in terms of communication, coordination and decision making•
  • Efforts were taken to raise awareness about the project by partnering with other projects and events of comparable interest and utilizing media.

Tag: Efficiency Human and Financial resources Operational Efficiency Partnership Awareness raising

25.

3.3.4.Country ownership

The project was assessed to be relevant to national priorities of Sri Lanka in terms of supporting its national policy relating to achieving energy independence using renewable energy sources. The extent of project-level and national-level coordination seen during the TE process reflects the country’s deep ownership for the Project implementation. Despite the political and organizational changes that the Project Management has to grapple with, there was firm decision to modify the project governance and management structure and effort to resolve inter-ministry issues in order harmonize the individual approaches and come up with harmonized policies and regulations for the common good.


Tag: Relevance Change Management Harmonization Ownership

26.

3.3.5.Mainstreaming

The project’sperformance in mainstreaming other UNDP priorities, including poverty alleviation, improved governance, disaster prevention and recovery, and women's empowermentin line with the relevant national UNDAF outcomes was strong.Income generation, waste utilization, employment multiplication, women participation, sustainable forestry, rational land use, industrial productivity, environmental protection and many more social benefits are among the very promising results of the project that will be mainstreamed in developing local economies and markets.

The Project paved way to mainstreaming the project’s activities and results of the various demos and support initiatives into the national economic and environmental priorities. As mentioned in earlier sections of this Report, the decision of the Government to pursue, upscale and financially support the Biomass Energy program at the national level in the coming years provided the vehicle to put together the then separate wood-based programs into an integrated Biomass Energy program paving way to carry with it multiple and overarching benefits on a “two-way” direction between the national implementing agencies and the local community level organizations.


Tag: Forestry Environment Policy Waste management Women's Empowerment Jobs and Livelihoods Poverty Alleviation Value Chain

27.

3.3.6.Sustainability (*)

According to the suggested GEF evaluation criteria, overall likelihood of sustainability is to be evaluated following 4 sub-criteria that can be risks to sustainability, i.e. Financial resources, Socio-Political, Institutional framework and governance, and Environmental. The project partners that had BETs installed found biomass available at costs advantages relative to competing fossil fuels and in quantities required for smooth operation. The advantageof using biomass is skewed so strongly in favor of BETs, the likelihood of financial viability of the BETs being changed by any subsidy changes applying to imported fossil fuels, a decision that has been a politically-driven decision in Sri Lanka is very low. Furthermore, 7 private sector organizations developed BET projects valued at LKR 441 million without the financial support from the Project, thusconfirming the positive outlook for biomass BET investments. Therefore, the sustainability from financialaspects is considered Likely (Rating: L).


Tag: Sustainability Human and Financial resources Private Sector

28.

As seen by the Biomass Resource Survey conducted in 11 districts, the availability of biomass fuel without having to exploit diminishing forest resources in the country is high. At present, the available agro-forestry materials as by-products or waste streams in terms of fuel wood energy equivalent amounts to 16.4 million tons. The overall national potential has been estimated at 69.6 million tons which could be good to digitize the information and map for possible overlay with biomass energy demand mapping.Furthermore, attention has been focused on utilizing other potential wood sources with energy generation potential. One such source is the Invasive Alien flora species of which there are several well-recognizedproblems. Many of these invasions are spreading in sparsely-used public lands and conservation areas that have been impacted by human intervention. Currently, there are several initiatives being considered for sustainable exploitation of these woody biomass with a plan to convert such land within the wildlife conservation areas back to natural forests. Similarly, there are other streamsand tank reservations fromwhere land reclaimed invasions can be managed as fuel-wood plantations, e.g. Area under Mahaweli Authority.


Tag: Forestry Energy Waste management Wildlife Conservation Challenges Sustainability

29.

The level of awareness rising about the potential illegal activities for non-sustainable sourcing is very high amongst the population and the institutions responsible for conservation of forest resources. Furthermore, the Project took the initiative to develop a national standard for sustainably-sourced biomass with the involvement of the SLSI, i.e. SLS 1551. Although, it is currently introduced as a voluntary standard, application of it at the level of biomass terminals and other points of the supply chain is under consideration. These developments can be vigorously pursued during the proposed Phase II to inform the public and minimize any non-sustainable activities. The project sustainability from socio-economic risks is considered safeguarded with a rating of Likely(Rating: L).


Tag: Forestry Challenges Sustainability Awareness raising

30.

The major stakeholders influencing the institutional and governance aspects relating to the project such as the Department of Forest Conservation (FD) has a mandate national in scope, although there is a devolved administrative system in relation to the some of the legislation. Awareness of and adherence to aforementioned procedures such as the SLS 1551 and the potential to process biomass terminals and other value chain actors under the Environment Protection License (EPL) system which is a part of the national legislation that is also implemented in a decentralized manner can be strong deterrents to any activities that lead to environmental risks. Thus, the risks from the institutional framework and governance and the environment are considered manageable with a sustainability rating of Likely (Rating: L).


Tag: Environment Policy Sustainability Rule of law

31.

Sustainability Models

At the project level, several demonstrations on the fuel wood plantation, logistics and utilization models were visited. Some case studies based on the Completion Reports of the Project Demos were reviewed and some samples were selected to illustrate the viability and sustainability of the biomass energy-related businesses. The following Case Boxes illustrate the sustainability models that were supported by the project:•

Case Box 1: Wood Energy as a Modern Energy Source-I: The Modern End Use


Tag: Energy Sustainability Value Chain

32.

Case Box 2: Wood Energy as a Modern Energy Source-II: The Modern Supplier

Sustaining the use of biomass as an energy source is making biomass available to a growing number of industries keen on harnessing the wood energy to power their operations. Wood in the form of a sustainably-sourced, quality assured, solid biofuel is the standard required to make it an energy raw material comparable to furnace fuels or LPG. The ‘Fuel Wood Terminals’ established under the project is moving the fuel wood value chain in a direction that meets this challenge. Sustainably-sourced fuel wood produced by thousands of small producers, through dedicated fuel wood plantations, by intercropping fuel wood trees with many other crops and harvested from live fences and pruning orchards etc. will be received and processed at these ‘Terminals’ to standardsthat meet the requirements of different users of wood-based technologies.


Tag: Forestry Energy Sustainability

33.

Case Box 3: Biomass Energy Supporting the Vision of a Carbon-Neutral Hospital

Modern hospitals are energy-guzzlers that consume huge amounts of energy. Powering multi-storey buildings with fast-moving lifts, air-conditioned wards, stylish lighting, high-powered medical equipment and refrigeration and food kitchens consumes tonnes of fossil-fuel daily. The modern biomass technology is now helping to make real the vision of a Hospital Director to transform the District Hospital serving over half-a-million patients annually a carbon-neutral entity. Dr. R M D Ratnayake, Director of the Monaragala District General Hospital is leading the way in setting an example, and the biomass-fired water boiler is a key step of the ‘green initiatives’ operated at the hospital.


Tag: Energy Efficiency Sustainability Health Sector

34.

Case Box 4: Biomass Powers Rural Agro-Processors Becoming Big Businesses

The high cost of energy has marginalized rural agro-processors hindering the development of post-harvest sector, leading to much loss of food produced and curtailing expansion of domestic and export markets. The use of traditional sun-drying did not allow small processors to main quality, hygiene and consistency demanded by the discerning clientele and export markets. As a result, post-harvest food processing remained confined to major markets in cities and accessible by only a limited group of consumers. Improved wood-fired dryers demonstrated by the Biomass Project has assisted small-scale fruit, vegetable, spice, coconut, milk and fish processors to harness improved technology for processing produce ata scale conforming to local production systems and markets.


Tag: Rural development Emission Reduction Energy Sustainability Innovation Value Chain

35.

There are other models supported by the Project with co-financing arrangements with the owners as can be seen in Annex D: Summary of Field Visits, including the following:Fuel wood plantation models

  1. Community Home Garden Fuelwood Model-Pallepola, Matale. Arunalu Foundation
  2. Arboretum-Forest Research Institute, Forest Department, Boyagane, Kurunegala
  3. Community Fuelwood Plantations-Walapane, Nuwara Eliya 4.Estate Fuelwood plantations –Thalawakele Tea Estates PLC
  4. Community Mixed-Fuelwood Plantation-Mahagama, Kurunegala –SLEES
  5. Fuelwood Plantations –Kurunegala, Forest Department

Tag: Effectiveness Sustainability Awareness raising Capacity Building

36.

3.3.7.Impact

The project confirmed the potential impact of the biomass energy sector to reduce GHG emissions as highly significant by introducing BETs that produced large reductions in GHGs and exceeding the targets set for GHG reductions over the lifetime of the project. It contributed to ensuring continuing growth of the biomass energy market inSri Lanka by working with a highly diverse group ofclients to demonstrate technical and economic viability of biomass applications and proving that the ultimate impact in terms of reduced GHG emissions can be quite significant. Furthermore, there is a significant replication potential for utilisation of the experiences and lessons learntfrom the Project.


Tag: Emission Reduction Energy Impact Sustainability

37.

3.1.4. Planned stakeholder participation

As seen from the implementation reports,the interest of some of the stakeholders who showed an interest at the project inception had changed for reasons not within the control of the project such as political changes. However, they were readily replaced by other stakeholders with similar capacities due to the open-approach maintained by the Project. In fact, change of government during the second year of the project resulted in a major reallocation of the government departments and institutes, placing the SLSEA which was identified as the key implementing partner under the Ministry of Power and Energy from the Ministry of Environment (MoE) to which it was attached to. The Project’s funds were continued to be allocated to the MoE. Making necessary amendments to the funds allocation mechanisms to ensure smooth functioning of the PMU that had been created within the SLSEA, and which was now within a different ministry, had to wait until it was recommended in the MTR. Effective coordination of relevant government ministries has become a major hindrance to project implementation in Sri Lanka due to the presence of large number of ministries as well as various hierarchies as identified by Cabinet, State and Non-Cabinet Ministry portfolios. These coordination issues had to be addressed at the PMU and Implementation Agency levelsby adjusting composition of the Project Board to be more inclusive. This resulted in a major delay in deciding the structure of the ICRE that was proposed to be established early in the implementation period and in securing necessary consensus. This was partially overcome by the two TACs that were established with a broad stakeholder participation at the officials-level that is less influenced by the political interests.


Tag: Change Management Partnership Coordination

Recommendations
1

Increase promotion and information dissemination to industry groups, banks and financial institutions for the replication program using updated results of the fuel resource potentials, fuel wood plantations, user surveys and digitized fuel supply/demand database and maps.

2

2. Develop and implement coordination mechanisms and harmonized rules and regulations with the local government units in order to prevent barriers on permitting and transporting that will affect efficient and timely transport of fuel wood

3

3. Encourage additional energy plantation investors and banks to support them with a Loan Guarantee Facility that would absorb risks and defaults.

4

4. Develop and implement the registration and certification systems for fuel wood plantation, biomass terminals and fuel burning equipment and facilities

5

5. Develop and implement integrated national fuel wood processing, logistics, storage and transport plans for high impact users and demand clusters

6

6. Formalize the Inter-Ministerial Officials Committee on Sustainable Biomass Energy (IMCBE) as recommended to the Cabinet

7

7. Finalize and formalize the draft policy briefs produced by the Project covering standards, pricing, logistics, technology and incentive schemes that have been developed for submission to and approval by SLSEA Board.

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