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PIMS 1277 CC FP:Renewable Energy for Local Electricity Supply
Commissioning Unit: Georgia
Evaluation Plan: 2007-2008
Evaluation Type: Project
Completion Date: 02/2009
Unit Responsible for providing Management Response: Georgia
Documents Related to overall Management Response:
 
1. Recommendation: The originally planned 5-year Project duration should have been a reasonable timeframe, provided that the REF and raising awareness would have been completed in Year 1, and that several of the SHPP projects would have required one year for construction with good project planning and construction management. The project is now scheduled to end by April 2009. Since the REF was not operational at the time of the writing of this Evaluation, it is important to review the possible scenarios on this project with regards to financial support for SHPPs. In this regard, there are three possible outcomes:  Scenario A: The REF becomes operational in 2008 and first loans can be provided to SHPP to be able to start rehabilitation works in 2009;  Scenario B: The REF does not become operational with KfW but UNDP successfully finds another financing partner (i.e. EBRD); and  Scenario C: The REF is not operational and UNDP does not successfully find another financing partner The evaluators believe that Scenario A will occur with the highest degree of confidence. All agreements between the Ministry of Finance, KfW and the Municipal Development Fund (MDF) have now been signed committing all the parties to the operations of the REF; this includes MoF's 'no objection' in April 2008 that completed the process. KfW now needs to begin the process of tendering to local banks to manage REF funds. As well, KfW will be recruiting a financial consultant to assist the successful local banks in managing REF funds. This will take additional time. If construction of the first SHPPs is started and completed in 2009, the Project will have to last for another year to be able to monitor the plant performance. Based on the current progress of the outcomes, the Project will require an additional 2 years beyond April 2009 (the current date of closure) to an end date of April 2011 to be able complete all activities. As such, the main thrust of the recommendations, based on this outcome, will provide:  Corrective actions for the Project from the design, duration, and implementation perspectives;  Actions that strengthen or reinforce the benefits of the Project;  Proposals for future directions of the Project assuming the availability of additional GEF funds originally allocated to capitalize the REF; and  Actions that would manage or even mitigate potential risks.
Management Response: [Added: 2009/01/27]

UNDP and the Project completely agree with the evaluator on the extension of project activities and will prepare budget revision for clearance (no objection) by the Project Steering Committee and approval by UNDP, UNDP-GEF and GEF.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
The project will prepare budget revision for clearance (no objection) by the Project Steering Committee and approval by UNDP, UNDP-GEF and GEF
[Added: 2009/01/27] [Last Updated: 2011/12/29]
Project Management 2011/03 Completed
2. Recommendation:  Continue to support policy dialogue with the GoG on energy policy towards a coherent RE policy that encourages RE investments. This would include workshops on sharing global experiences on feed-in tariffs typically used for initial market penetration of renewable energy projects;  Continue stocking SHPPs in the Project pipeline to a total of 20 candidate projects. This is required to meet an expected financing of 8 SHPPs that could be implemented in 2009 and 2010;  Provide capacity building and technical support to local SMEs and local engineering firms on the full project development cycle for SHPPs including: o collection of hydrometric data on river systems where there are candidate SHPP pipeline projects; o preparation of pre-feasibility studies; o preparation of feasibility studies; o technical oversight for detailed design; o construction supervision and management. This assistance would include the services of a qualified construction manager, rigorous inspection routines, innovative contracting arrangements that build local capacity and create community ownership of projects, and tender and equipment procurement management; and o operations and maintenance. This extended support is intended to ensure the first projects demonstrate international standards of implementation, quality control for construction and best management practices for operations and maintenance. This would also provide the necessary additional safeguards to the REF that would increase its chances of being re-capitalized.
Management Response: [Added: 2009/01/27]

UNDP and the Project fully agree on the recommendations suggested by the evaluators and will prepare a Project revision taking into consideration these recommendations with a revised budget and end date, and submit the revision to the Project Steering Committee for receiving a 'no objection' and to UNDP-GEF and GEF for approval.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
The project will prepare a revision taking into consideration these recommendations with a revised budget and end date and, submit the revision to the Project Steering Committee for receiving a 'no objection' and to UNDP-GEF and GEF for approval.
[Added: 2009/01/27] [Last Updated: 2011/12/29]
Project Management 2011/03 Completed
3. Recommendation:  Continue with well testing support to properly evaluate the geothermal potential for the Lisi Lake development and other wells operated by Geothermia LTD. The findings from this report will determine the extent of support required to develop these wells into a demonstration for other potential geothermal sites in Georgia;  Assist the developer, GRDC and Geothermia LTD in the development of geothermal wells for hot water supply and/or heating for the Lisi Lake development. Assuming UNDP and GRDC can come to an agreement and if the well tests are positive, technical assistance would be provided. TA can be provided to the extent possible with the remaining budget for: o a metering study that can quantify the distribution of geothermal water and payment collection patterns in an adjacent apartment community; o clarifying the legal and regulatory framework for geothermal development; o the formulation of pricing policies and incentives for fuel switching (from natural gas); o formulating contractual arrangements with users; and o detailed engineering designs of a closed loop heat exchange system complete with well re-injection.  Assist the developer, GRDC and Geothermia LTD in the development of geothermal wells for hot water supply and/or heating for the Lisi Lake development. Assuming UNDP and GRDC can come to an agreement and if the well tests are positive, technical assistance would be provided. TA can be provided to the extent possible with the remaining budget for: o a metering study on an existing geothermal hot water supply in an apartment community that can quantify the distribution of geothermal water and payment collection patterns; o clarifying the legal and regulatory framework for geothermal development; o the formulation of pricing policies and incentives for fuel switching (from natural gas); o formulating contractual arrangements with users; o detailed engineering designs of a closed loop heat exchange system complete with well re-injection; and o providing technical support to assist project proponents or financers in carbon credits that could be used to attract investors.  Providing technical support to assist project proponents or financers in carbon credits that could be used to attract investors The intent of this assistance is to demonstrate the development of the Lisi Lake geothermal project and to attract investment towards geothermal projects.
Management Response: [Added: 2009/01/27]

UNDP and the project fully agree on the recommendations suggested by the evaluators. The project will prepare Project revision taking into account among others, these recommendations with a revised budget and Project end date, and submit it to the Project Steering Committee for its 'no objection' and to UNDP-GEF and GEF for approval.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
The project will prepare Project revision taking into account among others, these recommendations with a revised budget and Project end date, and submit it to the Project Steering Committee for its 'no objection' and to UNDP-GEF and GEF for approval.
[Added: 2009/01/27] [Last Updated: 2011/12/29]
project management 2011/04 Completed

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