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Development and Commercialization of Bioenergy Technologies
Commissioning Unit: Ukraine
Evaluation Plan: 2018-2022
Evaluation Type: Project
Completion Date: 12/2020
Unit Responsible for providing Management Response: Ukraine
Documents Related to overall Management Response:
 
1. Recommendation:

In future projects that aim to stimulate investment in desirable technologies and infrastructure, adopt Ukraine Municipal Bioenergy Project’s (UMBP’s) approach of generating a large investment project pipeline and do so from start of project:

 

Develop a roster of experts and support not only feasibility studies, but especially technical design. Coach cities on economic viability and consider adding to the “formula” follow up support to get projects funded. As for UMBP’s pipeline, try to identify a means of providing follow up coaching post-project to get remaining unfunded projects funded.

Management Response: [Added: 2020/08/07]

Recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Establishing the Roster of Experts under the ongoing UNDP/GEF project Removing Barriers to increase investment in Energy Efficiency in Public Buildings in Ukraine through the ESCO modality in Small and Medium Sized Cities (EEPB)
[Added: 2020/08/07]
EE Portfolio Team Lead 2020/08 Completed Three rosters have been already established; ToRs for another one is prepared History
Funding feasibility studies on EE retrofits of public buildings, under the EEPB project
[Added: 2020/08/07]
EE Portfolio Team Lead 2020/08 Completed Feasibility studies have been already completed for pilot projects History
Funding feasibility studies on EE retrofits of public buildings, under the EEPB project
[Added: 2020/08/07]
EE Portfolio Team Lead 2020/08 Completed Designs have been already completed for pilot projects
2. Recommendation:

Take ownership of success of project’s financial support mechanism work in achieving re-launch of municipal loans in Ukraine, which had stopped completely in 2012, and follow up to stimulate uptake:

Prepare promotional materials on this achievement and the opportunity presented to small and medium cities, as these are not well known. Consider, though an ongoing project or small newly designed project, pursuing follow up to stimulate uptake of loans by small/medium cities, an underserved space for loan finance, and to stimulate municipal bioenergy loans, only one of which has been realized to date. Educate small and medium cities on “doing the math,” which will show some high- return projects to be attractive even with high loan interest rates; and provide support to smaller cities in getting their accounting in order for loan applications.

Management Response: [Added: 2020/08/07]

Recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Plan and implement capacity building activities for small and medium cities to understand value of loans under the FSM (even at high interest rates)
[Added: 2020/08/07]
EE Portfolio Team Lead 2020/12 Initiated Postponed due to the suspension of Removing Barriers to Increase Investment in Energy Efficiency in Public Buildings in Ukraine through the ESCO modality in Small and Medium Sized Cities Project. Subject to project re-assessment results.
Preparation of promotional materials on opportunities for funding of municipal projects on EE retrofits, under the Financial Support Mechanism (FSM) established under the UMBP and EEPB projects
[Added: 2020/08/07]
EEPB Project Manager, EE Portfolio Team Lead 2020/08 Completed Removing Barriers to Increase Investment in Energy Efficiency in Public Buildings in Ukraine through the ESCO modality in Small and Medium Sized Cities Project EEPB has already started on preparation of promotional materials on ESCO Factoring mModel
3. Recommendation:

Learn from UMBP’s challenges in setting up a biomass support unit: (i) For similar work in future projects, consider option of setting up sustainable non-government institution to support development of targeted type of investment projects. (ii) Consider alternatives for turning UMBP’s bioenergy roster into sustainable platform. Support for incubation by EEPB Project might be used to launch a long-term bioenergy-specialized platform that assists clients in development of bioenergy investment projects, in cooperation with Ukraine Bioenergy Association, which could become the eventual home of the platform. (iii) For a general platform to provide TA support of investment projects in multiple priority areas (i.e. not only bioenergy), consider setting up long-term platform in Ukraine, perhaps within UNDP CO. This platform may serve multiple donor projects over time, especially in the area of getting small and medium-sized investments financed, which is a niche area for UNDP in Ukraine.

Management Response: [Added: 2020/08/07]

Recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Sharing of experience and lessons learned related to the Bioenergy expert support with the ongoing donor programmes/projects with similar objectives/activities
[Added: 2020/08/07]
Senior Management, EE Portfolio Team Lead 2020/12 Initiated In 2020, the launching of at least two projects by partners in Ukraine is expected: (i) EBRD/GEF project Sustainable Bioenergy Value Chain Innovations; and (ii) Financed by the German Ministry of Environment International Climate Initiative (IKI) for Ukraine, namely its Component 3: Promotion of sustainable and certified biomass as a substitution for fossil fuels). EBRD Project launched, while the final decision on IKI is not taken yet. Both projects build on the lessons learned and experiences shared by UNDP.
4. Recommendation:

Consider addressing high potential needs areas in future donor biomass projects implemented by UNDP in the near-term: (a) Work to develop the agri-biomass supply chain (a gap in current project), including development of biomass exchange, biomass standards and certification, and support to municipalities in sourcing biomass. (b) Transition of rural households from wood use to agri- biomass (such as briquettes) for use in current or newly promoted efficient stoves. (c) Sourcing work to identify best fit biomass boilers on the market, so as to reduce costs and increase lifetimes. (d) Policy work to promote agri-biomass, in particular, and biomass generally, such as adjustment of green tariff to favor agri-biomass, preferential policies or subsidies for agri-biomass (for briquette/pellet makers, boiler producers, and storage companies), regulations to support bioenergy crop legislation, support for Ukraine integration with EU biomass policies, and support to open up heating market to third parties (which would stimulate investment in bioenergy heating).

Management Response: [Added: 2020/08/07]

The recommendation is partially accepted.

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Sharing of experience and lessons learned related to the “Agri-biomass for Energy” with the ongoing donor programmes/projects with similar objectives/activities
[Added: 2020/08/07]
Senior Management, EE Portfolio Team LEad 2020/12 Initiated Proposal to IKI submitted and pending final approval
Develop project on Transition of rural households from wood use to agri- biomass (such as briquettes) for use in current or newly promoted efficient stoves.
[Added: 2020/08/07]
EE Portfolio Team Lead 2021/12 Initiated
5. Recommendation:

Make national policy and oblast planning work in future projects more results oriented:

 

Policy work should be more focused, targeting adoption of a few top priority policies and ensuring these are squarely within the targeted results area. This would be in contrast to the approach used by the project at first in drafting as many policies as possible in a broad range of areas in hopes that a few would make it. Ideally, specific targeted policy topics would be identified during project design. If possible, policy work should be carried out by experts with strong experience in the relevant sector, who should be encouraged to apply for consulting opportunities. Oblast-level planning work should include follow-up support to ensure adopted plans are implemented, in contrast to the situation of the project in which plans were adopted but not followed up upon.

Management Response: [Added: 2020/08/07]

Recommendation is partially accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Determination of the scope of work on policy (gap analysis, policy advice, recommendations for legal & regulatory improvements, etc.) and strategies (short- and medium-term strategies, National and Regional Action Plans, etc.) within the frameworks of future projects, at the early stages of the development
[Added: 2020/08/07]
EE Portfolio Team Lead 2021/12 Initiated
6. Recommendation:

Ensure work in future projects is action oriented. Adopt a strict policy of limiting studies/ reports in future projects to those that will truly be used and ensure other project activities are designed to leverage these to support targeted results. Consider requiring preparers of reports to carry out action-oriented follow up related to their work, perhaps with success criteria as a condition for final payment.

Management Response: [Added: 2020/08/07]

The recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Strengthening the approval, monitoring & evaluation of studies/analytical reports in future projects through establishing the following requirements: a. Studies should be included in AWPs and Procurement plans; b. For each study the targeted output should be identified, and verifiable indicators and targets established c. Likelihood of achievement of targets should be assessed after each milestone and necessary corrective actions identified d. Final reports should be approved only after achieving established targets
[Added: 2020/08/07]
EE Portfolio Team Lead 2021/12 Initiated Portfolio will make an effort to engage highly qualified narrow experts and will improve internal monitoring system to strengthen the approval, monitoring & evaluation of studies/analytical reports in future projects
7. Recommendation:

To enhance sustainability of UMBP’s 48 pipeline projects and potential for replication of them, prepare a brief compendium of case studies of the pipeline projects, with 1 or 2 pages per project, and combine with a final lesson learned summary for the project. The case studies may serve a dual purpose of attracting financing and stimulating similar projects in other municipalities. The compendium should be shared with the banks to encourage loan financing and with as many municipalities and village federations as possible. Follow up in 1 and then 2 years to determine number of projects implemented, investment mobilized, and implied lifetime GHG ERs.

Management Response: [Added: 2020/08/07]

The recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Prepare a brief compendium of case studies of the bioenergy projects’ pipeline as an Annex to the UMBP Final report
[Added: 2020/08/07]
EE Portfolio Team Lead 2021/05 Initiated
A follow-up review to be conducted in 1 and then 2 years to determine number of projects implemented, investment mobilized, and implied lifetime GHG ERs.
[Added: 2020/08/07]
EE Portfolio Team Lead 2021/03 Initiated
8. Recommendation:

For future projects that have demos and target replication of them, ensure financial viability is a priority for all demos. Consider including sourcing work to find lowest cost quality equipment option and communicate results to projects developers. A lesson learned from this project is that high cost demos may not be replicated. Future projects should make financial viability a cornerstone of demonstrations so that replication can be achieved.

Management Response: [Added: 2020/08/07]

The recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
a. To conduct a cost benefit analysis for the demo project at the project development stage to ensure that local market offers necessary affordable equipment for ensuing the replication of demos.
[Added: 2020/08/07]
EE Portfolio Team Lead 2021/12 Initiated
9. Recommendation:

Leverage lesson learned on the effectiveness of domestic study tours: A domestic study tour allows participants to see the technology or approach of interest in their own national environment, which may give them a more realistic example than something they would see abroad. Use domestic study tours as an effective means of building awareness and developing an investment project pipeline in future projects, with added benefit of high cost efficiency. Include municipal officials in such study tours when relevant to the project topic. If it can be arranged for 2020 (post-project), consider second domestic study tour for UMBP, possibly in conjunction with final workshop.

Management Response: [Added: 2020/08/07]

The recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Adequate description of the domestic study tour in the UMBP Final report
[Added: 2020/08/07]
EE Portfolio Team Lead 2020/12 Initiated
10. Recommendation:

In design phase of future projects, be careful not to lock in suppliers and other partners without competition, unless there is strong rationale. Even in the case of choosing municipalities to receive support, competition or at least consideration of multiple possible partners is the best approach. Competition will ensure better value for equipment and that the involved cities are the most proactive, have the best proposed projects, and provide substantial co-financing.

Management Response: [Added: 2020/08/07]

Recommendation is not accepted as UNDP’s internal rules and regulations ensure open and transparent competition in view of its core values. Best value for money principle always adhered to.  As for request for direct contracting are always  well justified and followed in line with POPP. Selection of participating municipalities is done on competitive basis.

Key Actions:

11. Recommendation:

For directly implemented projects, develop clear guidelines on Project Board (PB) membership and PB role, as well as on how decisions will be made. In UMBP, PB decisions were used to justify changes, such as the large allocation from the investment component for awareness/ training. Yet, membership of PB and PB’s decision making process seemed ad hoc, without clearly defined guidelines.

Management Response: [Added: 2020/08/07]

The recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Development of guidelines for directly implemented projects on: a. Project Board (PB) role – PB should play more active role by reviewing (before the PB meetings) project results and future plans and requesting necessary changes as needed b. PB membership – PB members, and their replacements, will be nominated by the Project Partners
[Added: 2020/08/07]
EE Portfolio Team Lead 2020/12 Initiated
Designate members of PB for the EEPB project in line of para 11.1
[Added: 2020/08/07]
EE Portfolio Team Lead 2020/12 Initiated
12. Recommendation:

For future projects, take greater care in selecting government project partners to ensure partner is optimal one for project at hand. UMBP did not partner closely with SAEE, the optimal partner, until its last 1.5 years and may have thus had less impact than it might have. In general, as there are overlapping areas of interest among government entities, selection of government partners should include careful analysis that considers the specific aims of the project, such as policy adoption, projects on the ground in municipalities, etc. As the DIM is currently being used by UNDP Ukraine for its GEF- financed projects, partner selection is a less formal process than determining IP for NIM projects; and, thus, UNDP has greater leeway in partner selection.

Management Response: [Added: 2020/08/07]

The recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Intensify the dialogue with the Governmental stakeholders and relevant NGOs during the stocktaking phase in order to select government project partners based on their mandate, capacity, interest in the future project, past experience in playing similar role, etc.
[Added: 2020/08/07]
EE Portfolio Team Lead 2021/12 Initiated
Re-consider the appropriateness of the selection of government project partners on the annual basis
[Added: 2020/08/07]
EE Portfolio Team Lead 2021/12 Initiated
13. Recommendation:

Take concerted steps to improve procurement: (i) In recruiting personnel and contractors for future projects, work harder to reach out to and include those that have relevant expertise to ensure the best candidates for project staff and consulting positions get involved with projects. (ii) For future projects, incorporate more measures for cost control and getting the best price in procurement, with a key step being to first determine the “real, reasonable” price. (iii) For major procurements, evaluation panel members should include technically qualified subject matter experts and/or persons that understand the aims of the respective project well, including participants from regional offices or headquarters for all large procurements. Ensure existing procedures/ systems for large procurements are followed.

Management Response: [Added: 2020/08/07]

The recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Ensuring that SoPs are strictly followed
[Added: 2020/08/07]
Operations Manager, EE Portfolio Team Lead 2020/12 Initiated
Review of internal Standard Operating Procedures (SoP) for Procurement Processes and making necessary revision (as needed) in order to ensure: (i) In recruiting personnel and contractors, ensuring that only those that have relevant expertise are involved (ii) More measures for cost control are identified and the best price is procured, with a key step being to first determine the “real, reasonable” price (iii) For major procurements, evaluation panel members should include technically qualified subject matter experts and/or persons that understand the aims of the respective project well, including participants from regional offices or headquarters for large procurements
[Added: 2020/08/07]
Operations Unit 2020/07 Completed New Internal Control Frameworks along with new SOPs have been launched on 1 July 2020
14. Recommendation:

Improve understanding of GEF projects in CO and improve interface between UNDP-GEF and CO: Improve understanding of UNDP CO leadership regarding the GEF approach and priorities (such as GHG emission reductions and replication of demonstrations), typical problem areas to watch for in UNDP-GEF projects, and implementation rules, via two-page checklist. Ensure systems facilitate means of getting quick feedback to CO from UNDP-GEF, such as regarding major procurements and budget changes.

Management Response: [Added: 2020/08/07]

The recommendation is accepted

Key Actions:

Key Action Responsible DueDate Status Comments Documents
Improve knowledge on GEF budgeting requirements (PIMS+ CO Dashboard)
[Added: 2020/08/07]
Programme Management Unit 2020/08 Completed Programme Management Unit respective staff members participated in online trainings (webinars) on GEF budgeting requirements

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