Nationally Appropriate Mitigation Actions for Low-carbon Urban Development in Kazakhstan

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Evaluation Plan:
2016-2020, Kazakhstan
Evaluation Type:
Mid Term Project
Planned End Date:
07/2018
Completion Date:
12/2018
Status:
Completed
Management Response:
Yes
Evaluation Budget(US $):
35,000

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Title Nationally Appropriate Mitigation Actions for Low-carbon Urban Development in Kazakhstan
Atlas Project Number: 82364
Evaluation Plan: 2016-2020, Kazakhstan
Evaluation Type: Mid Term Project
Status: Completed
Completion Date: 12/2018
Planned End Date: 07/2018
Management Response: Yes
Corporate Outcome and Output (UNDP Strategic Plan 2018-2021)
  • 1. Output 1.1.1 Capacities developed across the whole of government to integrate the 2030 Agenda, the Paris Agreement and other international agreements in development plans and budgets, and to analyse progress towards the SDGs, using innovative and data-driven solutions
Evaluation Budget(US $): 35,000
Source of Funding:
Evaluation Expenditure(US $): 35,000
Joint Programme: No
Mandatory Evaluation: No
Joint Evaluation: No
Evaluation Team members:
Name Title Email Nationality
GEF Evaluation: Yes
GEF Project Title: Nationally Appropriate Mitigation Actions for Low-carbon Urban Development in Kazakhstan
Evaluation Type: Mid-term Review
Focal Area: Climate Change
Project Type: FSP
GEF Phase: GEF-6
GEF Project ID: 4442
PIMS Number: 4670
Key Stakeholders:
Countries: KAZAKHSTAN
Lessons
Findings
Recommendations
1

Correct figures from mid-term targets and submit a revised project logframe

2

Revision of second objective indicator “Value of Urban NAMA under development – co-financing realized”

3

Clarification of Indicator 3.1 of the Component 3 “Capitalization of funding mechanisms for urban NAMAs”

4

Preparation of a step-by-step project video

5

Focus the awareness raising on bankable project preparation in order to increase the chances of pilot projects being successfully developed, submitted for subsidies and/or guarantees and funded.

6

Paying more attention to address gender dimensions aspects

7

Adding an indicator related to the mainstreaming of women's participation

8

Joining forces for better promotion of business involvement for introduction of new low-emission technologies through public-private partnership (PPP) programmes/mechanisms.

9

Implementing the project in the most cost-effective way possible and therefore considering adaptive management for Component 3 if there is not substantial progress by July 2018

10

Considering the project extension

11

Continuing assistance in accelerating Government’s work for determining needs for improvement national regulations for promoting low carbon development in Kazakhstan

12

Developing a sustainability plan/exit strategy for the project

13

Expediting implementation of projects in different municipalities.

14

Preparing project extension request

1. Recommendation:

Correct figures from mid-term targets and submit a revised project logframe

Management Response: [Added: 2018/12/19]

Recommendation accepted. Mid-term and final targets for the following indicators have been adjusted as follows:  Indicator 1 “Number of Urban NAMAs under development”, end-of-project target: 15 instead of 14.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Change end-of-project target in the logframe for Indicator 1. No changes in the core/impact level indicators are foreseen.
[Added: 2018/12/19]
Project Team: Chief Technical Advisor (CTA) and Project Manager (PM) 2018/12 Completed History
2. Recommendation:

Revision of second objective indicator “Value of Urban NAMA under development – co-financing realized”

Management Response: [Added: 2018/12/19]

Recommendation accepted. Indeed, “value of Urban NAMA under development” is not the same as “co-financing realized” because by definition “under development” refers to the pipeline, i.e. urban NAMA for which financing has not yet been secured. It is therefore suggested to remove this wording from the definition of indicator and leave only “co-financing realized” with initial targets of 70 mln USD by the project end.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Revise objective-level Indicator 2 to remove the ambiguity, as per recommendations.
[Added: 2018/12/19]
Project Team: Chief Technical Advisor (CTA) and Project Manager (PM) 2018/12 Completed History
3. Recommendation:

Clarification of Indicator 3.1 of the Component 3 “Capitalization of funding mechanisms for urban NAMAs”

Management Response: [Added: 2018/12/19]

Recommendation accepted. In fact, this indicator is no longer applicable to the project. Project document envisaged establishment of a stand-alone urban NAMA fund which will provide financing to urban NAMA using combination of grant and loans to be capitalized by the GEF and the Government. This Fand was supposed to be established on the basis of the National Fund for Modernization of Communal Infrastructure. However, the Fund has been found by the Government to be non-effective in its programming of public budget and also there were several cases of mis-management, therefore National Fund for Modernization has ceased to exist. Therefore, in the very onset of the project, partnership with the Fund was considered as a risky strategy. Adaptive management measures led to re-design of the NAMA financial mechanism. It was decided that the main funding for urban NAMA will be secured from the commercial banks, while the financial mechanism will only operate a grant component to be used either for interest rate subsidy or partial guarantee on commercial loans to decrease the cost of finance for the private sector investors.The size of interest rate subsidy has been set-up at 10%: an eligible project sponsor which meets technical criteria can apply for a commercial loan from Kazakhstani bank and the Mechanism will provide subsidy to reduce the real interest rate by 10%, e.g. from maximum 19% (market interest rates in the beginning of the project) down to 9%. Similarly, project proponents which failed to provide sufficient collateral to secure their commercial loans can apply to the Mechanism for partial guarantee on the loan (up to 50% of the loan value). If project is approved, it will cover up to 50% of the required collateral from its resources in lieu of project sponsor. According to adopted design of the NAM financial mechanism, the bulk of financing for urban NAMAs will not be provided via stand-alone public fund, but rather from the market, therefore the term “capitalization” is no longer applicable. More appropriate measure of project success would be the estimate of the total financing that has been enabled and leveraged through the GEF-supported financial mechanism from the commercial banks. This indicator already exists in the logframe is reflected in the next Indicator, therefore it is suggested to remove indicator 3.1. due to its redundancy. This change doesn’t have any impact of project objective/impact level targets.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Adjust logframe to remove Indicator 3.1 due to its redundancy
[Added: 2018/12/19]
Project Team: Chief Technical Advisor (CTA) and Project Manager (PM) 2018/12 Completed
4. Recommendation:

Preparation of a step-by-step project video

Management Response: [Added: 2018/12/19]

Video material is useful awareness raising tool to educate targeted audience about NAMA financial mechanism, how it works and the type of project being supported. Now, as sufficient number of projects have already been approved, it is important to highlight them as example of low-carbon urban actions and communicate their results and benefits to stakeholders.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Prepare video concept, including key messages to be delivered Higher a video production specialist Develop detail video script, including list of people and projects to be featured Shoot video Support video promotion via applicable media, national and local TV stations, as well as on-line
[Added: 2018/12/19]
Project team: Communication expert and video production specialist (to be sub-contracted) 2019/06 Initiated
5. Recommendation:

Focus the awareness raising on bankable project preparation in order to increase the chances of pilot projects being successfully developed, submitted for subsidies and/or guarantees and funded.

Management Response: [Added: 2018/12/19]

Recommendation accepted. Project outreach and awareness raising will have to be undertaken in a more targeted manner focusing on potential project sponsor/applicants to NAMA financial mechanism in order to increase the pipeline of potential projects.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
The project together with financial partner, DAMU and its regional network of officers and client data-base, will undertake targeted outreach activities to solicit application to NAMA financial mechanism, including: - Regional meetings and workshop with representative of business community and administrations - Preparation and presentation of case studies/examples of winning projects, including appropriate business model for public-private partnership; - Video material (see previous recommendation) - Technical partner of the NAMA Financial Mechanism will provide a number of training to banking community on screening and identifying potential projects within their pipeline
[Added: 2018/12/19]
Project team (PM, Project Financial Specialist, Communication expert), Financial Partner (DAMU) and Technical Partner. 2019/06 Initiated
6. Recommendation:

Paying more attention to address gender dimensions aspects

Management Response: [Added: 2018/12/19]

Recommendation accepted. The project strengthen gender mainstreaming activities and incorporate them in the scope of work under substantive components, as well as in its monitoring system, including incorporation of gender-sensitive indicators in the result framework.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
1. Conduct analysis and assessment of the impact of clean energy on women and the role women can play in promoting low-carbon urban actions, in particular as far as energy efficiency and renewable energy is concerned 2. Include gender-sensitive indicator regarding number of women – project beneficiaries in the result framework 3. Ensure equal share of men and women in project management team and among beneficiaries
[Added: 2018/12/19]
Project team: PM, CTA, sub-contracted expert to conduct gender analysis 2019/03 Overdue-Initiated
7. Recommendation:

Adding an indicator related to the mainstreaming of women's participation

Management Response: [Added: 2018/12/19]

Recommendation accepted, as per response to the previous comment.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Include gender-sensitive indicator regarding number of women – project beneficiaries in the result framework
[Added: 2018/12/19]
Project Team: Chief Technical Advisor (CTA) and Project Manager (PM) 2018/12 Completed
8. Recommendation:

Joining forces for better promotion of business involvement for introduction of new low-emission technologies through public-private partnership (PPP) programmes/mechanisms.

Management Response: [Added: 2018/12/19]

Recommendation accepted. The project is already working closely with partner municipalities/akimats to provide technical assistance s on application of public-private partnership (PPP) model for implementation of urban low-carbon investment projects and will continue provision of such support in the future. In addition, based on project experience with facilitating PPP contracts. Recommendations to the Government on suggested revision in the Law on energy efficiency has been made to address identified barriers and obstacles, in particular as far as PPP model for ESCO type of contracts.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Continue provision of support to public and private sector to structure and implement PPP projects for investment in low-carbon urban projects Provide recommendation to the Government on improving policy and regulatory framework for PP projects in urban sector
[Added: 2018/12/19]
Project Team: Financial specialist and sub-contractor (Support to PPP project) 2019/12 Initiated
9. Recommendation:

Implementing the project in the most cost-effective way possible and therefore considering adaptive management for Component 3 if there is not substantial progress by July 2018

Management Response: [Added: 2018/12/19]

Recommendation accepted. Component 3 is currently on-track as far as achieving its mid-term targets is concerned. However, based on the experience of the pilot phase of the NAMA financial mechanism some corrective measures can be proposed, such as increasing the threshold for financial assistance, broadening sector coverage to include waste and transport, etc.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Conduct review of the NAMA financial mechanism and in consultation with technical and financial partners prepare revision to the Operational Rules of the mechanism to reflect lessons learnt from the pilot phase and maximize mechanism’s coverage and impact, as far as leverage and GHG emission reductions are concerned Look into sustainability of the NAMA Financial Mechanism and prepare exit strategy
[Added: 2018/12/19]
Project Team: PM, CTA, Financial specialist and project partners 2018/12 Completed
10. Recommendation:

Considering the project extension

Management Response: [Added: 2018/12/19]

Recommendation accepted. Due to delay with implementation of Component 4 and additional risks and barriers identified for implementation of pilot urban NAMA, it may be required to extent the project duration. It is suggested that by the end of year 2018, based on review of project status, deliverables and commitments, assessment will be made as to required duration of extension and request for project extension shall be prepared and submitted for approval to UNDP-GEF HQ.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Assess project progress under Components 3 and 4 Prepare justification and request no-cost project extension for additional 18 months
[Added: 2018/12/19] [Last Updated: 2019/01/20]
Project Team: PM, CTA UNDP CO 2019/01 Completed History
11. Recommendation:

Continuing assistance in accelerating Government’s work for determining needs for improvement national regulations for promoting low carbon development in Kazakhstan

Management Response: [Added: 2018/12/19]

Recommendation accepted. The project will work closely with the Government, through its national parter, the Ministry for Investment and Development of the Republic of Kazakhstan, to prepare recommendations for revisions of the key policy and strategic documents governing low-carbon development, including the Law on energy efficiency.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Analyse and summarize identified policy and regulatory barriers and prepare recommendation to the Government on revision in the policy and regulatory framework
[Added: 2018/12/19]
Project Team 2019/12 Initiated
12. Recommendation:

Developing a sustainability plan/exit strategy for the project

Management Response: [Added: 2018/12/19]

Recommendation accepted. Initial proposal has been made by the Ministry of Investment and Development to include municipal energy efficiency projects financed by the private sector in the scope of the State Funded programme “Business Road Map-2020’ through which the Government provides support to SMEs using the same financial support mechanisms (interest rate subsidies and guarantees) and same financial partner, DAMU Fund. Once the first phase of the financial support mechanism is reviewed in the end of 2019, formal proposal and justification will be prepared and submitted to the Government to expand the scope of “Business Road Map” to include SME-led EE projects in the list of projects eligible for state-supported subsidies.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Prepare justification and submit for approval by the Government the proposal to include financial support mechanism developed and piloted by the project in the scope of state financing assistance to SMEs under “Business Road Map” after 2020. Prepare analysis of the NAMA Financial Mechanism sustainability and options for exit strategy
[Added: 2018/12/19]
Project Team: PM, CTA, Financial specialist and project partners 2019/06 Initiated
13. Recommendation:

Expediting implementation of projects in different municipalities.

Management Response: [Added: 2018/12/19]

Recommendation accepted. The project has already started activities in all Kazakh cities, i.e. beyond 15 pilots originally envisaged, in order to maximize coverage, outreach and impact

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Expand project geographic coverage to other municipalities/cities
[Added: 2018/12/19]
Project team 2019/12 Initiated
14. Recommendation:

Preparing project extension request

Management Response: [Added: 2018/12/19]

Recommendation accepted. Due to delay with implementation of Component 4 and additional risks and barriers identified for implementation of pilot urban NAMA, it may be required to extent the project duration. It is suggested that by the end of year 2018, based on review of project status, deliverables and commitments, assessment will be made as to required duration of extension and request for project extension shall be prepared and submitted for approval to UNDP-GEF HQ.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Assess project progress under Components 3 and 4 Prepare justification and request for extension
[Added: 2018/12/19] [Last Updated: 2019/01/20]
Project Team: PM, CTA UNDP CO 2019/01 Completed History

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