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Landlocked Heilongjiang is the northernmost and 6th largest province of the People’s Republic of China (PRC). It borders the Inner Mongolia Autonomous Region in the west, the Russian Federation in the north and east, and the Jilin province in the south. It used to be a manufacturing base of products such as petroleum, coal, power plant equipment, metals, heavy machinery, steel, and wood. Trade played an important role in its economy, and international and domestic demand for its products had consistently risen. However, since the turn of the 1980s, its economy had dipped and by 2010, its per capita gross domestic product was 12.3% below the national average.

In line with the Government of PRC’s Eleventh Five-Year Plan, 2006–2010, which called for the revitalization of the northeastern region, the Asian Development Bank (ADB) approved in April 2010 a loan of $200 million for the Second Heilongjiang Road Network Development Project. The project, which also supported the provincial government’s 3-year plan to speed up road development, planned to deliver 4 outputs: (i) 347.06 km of improved road infrastructure in the East–West 2 corridor that runs from Qianfeng Farm to the provincial border with Inner Mongolia, (ii) enhanced road maintenance in the province, (iii) better bus services in Bei’an City, and (iv) strengthened institutional capacity.

Along the East–West 2 corridor, a 206.26 kilometer, 4-lane expressway was constructed; new roads and interchanges, numerous overpasses, and several medium-span to super-long-span bridges were constructed. Pavements were improved, and toll stations, parking and other service areas were installed. Technical studies were undertaken to ensure that the engineering designs were suited to the needs of a climatically and geologically complex terrain and protective of the environment.

A road asset management system to improve road maintenance planning and budgeting was introduced, the implementation of a government-funded priority road maintenance program was supported, and performance-based road maintenance contracts were piloted. In Bei’an City, a user needs-based bus route licensing reform was piloted, bus stations were rehabilitated, and new ones were constructed to provide a safer and more reliable rural bus service in the pilot town and villages.

Trainings to enhance the provincial government’s capacity in road maintenance, construction management, asset management, and traffic control and emergency relief, among other things, were conducted. 3 overseas tours on road and bridge construction technology, road maintenance, and asset management were also supported.

Successful delivery of the planned outputs allowed the project to substantially achieve its intended outcome of providing the province a more resource-efficient, safe, and environment-friendly road transport system. The expressway greatly improved the connectivity and accessibility of border towns, boosting tourism and local commerce and trade. Travel time and transport costs were significantly reduced. However, average daily traffic on the project expressway had remained lower than projected since it opened in 2012.

Project implementation schedule and costs were generally as planned. The Heilongjiang Provincial Transportation Department (HPTD) was the executing agency, and a project management office established by the HTPD was the implementing agency.

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Country: China

During program preparation, Pakistan’s power system had insufficient capacity to meet growing demand, and electricity was routinely rationed during peak demand. These capacity constraints were evident in generation shortage, the inability of the transmission system to fully utilize available generation during peak demand, and localized constraints in the delivery of power to distribution companies. Furthermore, the sector suffered from a chronic shortage of funds. Distribution companies had higher losses and lower collections than the levels set by the regulator, resulting in a lack of financial resources with which to fulfill payment requirements to generation companies.

To help address the situation, the Asian Development Bank (ADB) approved in 2006 a 4-tranche, 10-year $800 million multitranche financing facility (MFF) to support a range of energy subprojects in Pakistan, each designed to assist in overcoming a specific transmission constraint. Tranche 2 of the MFF financed a total of 9 high-priority subprojects, selected based on the results of the load flow simulations which identified the location of system bottlenecks. The subproject locations were spread nationwide along the transmission grid.

Except for one static VAR compensator (SVC) deferred due to a lack of bidder interest, the tranche 2 project achieved all its planned outputs, including 5 new grid stations, additional transformer capacity in 2 existing grid stations, and 5 new transmission lines. Operation of the new transmission lines and grid stations relieved overloads that would otherwise have prevented consumers from receiving reliable electricity supply. For example, the net transmission capacity installed by the project was about 8% of the total capacity in 2013 and about 45% of the added capacity between 2007 and 2013. Grid constraints, according to the National Transmission and Despatch Company (NTDC), had been addressed by 2017 to the point that forced load shedding was rarely needed.

Additional project outputs included the installation of an SVC that was moved from tranche 1 to tranche 2 to provide more construction time and purchase of tools and construction equipment for use in the installation and maintenance of the transmission system assets. Notwithstanding the delivery of practically all outputs, the project completion report (PCR) mission found it hard to establish project success in achieving the intended outcome and impact specified in the design and monitoring framework (DMF). This was because, as with tranche 1 and the MFF itself, planned outputs from this project were weakly aligned to the higher-level results in the DMF. Moreover, outcome indicators provided in the tranche 2 DMF consisted of reused intangible outputs from the tranche 1 DMF that had no visible links to the project outputs.

Delays in loan effectiveness, procurement, and contract effectiveness led to a 3-time, 32-month extension of the 6-year project implementation period set at appraisal. Project actual total cost was $177.89 million, to which tranche 2 contributed $156.54 million of the total $220 million approved for tranche 2. The undisbursed loan amount was cancelled at different times during project implementation.

The NTDC, a state-owned corporation, was both the project executing agency (EA) and implementing agency (IA).

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Sector: Energy
Country: Pakistan

During project preparation, an unprecedented inflow of foreign direct investment (FDI) in cross-border contract farming and large land concessions marked the agriculture and natural resources (ANR) sector of the Lao People’s Democratic Republic (Lao PDR). Investors included businesses from the People’s Republic of China, India, Republic of Korea, Thailand, and Viet Nam. While such land concessions could have considerable development potential; serious concerns were raised about the nature and duration of the leases; the soundness of the approval and allocation procedures; their impact on food security, local livelihoods, and natural resources; and more. That FDIs have high risks of environmental damage and limited transparency, mainly benefiting foreign and affluent domestic interests and potentially disadvantaging vulnerable groups, was an overriding concern.

To ensure that benefits are equitably shared and harmful impacts are avoided, the government planned to manage FDIs in the ANR sector. It requested the Asian Development Bank (ADB) for financing support, and in response, ADB approved a grant of $20 million in February 2009 for the Sustainable Natural Resource Management and Productivity Enhancement Project. With $15 million cofinancing from the International Fund for Agricultural Development and using a sector approach, the project aimed to deliver three outputs ─ capacity building for agriculture and natural resource sector management, investment in resource management and productivity enhancement, and efficient project management. Strengthening government capacity to screen and appraise FDI proposals for land concessions, monitor and enforce compliance with laws, contracts and licenses, and protect natural resources was a focus.

However, even a year before the grant was approved, the government already declared a moratorium on land concessions larger than 100 hectares. Suspension of land concessions followed in 2012, which meant that the project can no longer be implemented as designed. But instead of changing the project scope, an informal process to redesign the activities was undertaken through the subproject preparation and subproject implementation manuals. Capacity building activities were subsequently aligned to subproject preparation and implementation, effectively making them a part of project management and an overhead to the investment component.

Despite having been reoriented and drastically reduced, activities under the capability building output only partially achieved their intended outputs. Under the investment component, 749 water users’ associations/farmers’ groups were established, 71 subprojects were implemented, and village-level land use maps were prepared for all the subproject areas. The project completion review mission however found several weaknesses in the appraisal and design of the subprojects. For instance, erroneous economic viability calculations and inadequate due diligence characterized several subprojects.

Because of diminished relevance, incomplete delivery of planned results, and ambiguous sustainability of results, the project was rated less than successful. It was completed within the planned timeframe and estimated total cost. However, implementation management cost was very high at 32% of the total $36.95 million actual project cost.

The Ministry of Agriculture and Forestry was the executing agency. The offices of the provincial governors of Attapeu, Champassak, Salavane, Savannakhet, and Sekong ─ the five project provinces ─ were the implementing agencies.

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Liaoning province, in the southern part of northeast People’s Republic of China (PRC), functions as a major hub between the country’s northeastern economic region and fastest-growing economic region of Pan-Bohai that includes the cities of Beijing and Tianjin. However, since the 1980s until project appraisal in 2008, the province’s economic growth had lagged those of other provinces because of resource depletion and a painful transition from reliance on state-dominated heavy industries to a more diversified industrialization track.

Problems had heaped up as rapid urbanization accompanied the province’s race to industrialization. Amidst an unabated urban population growth, many cities and towns have had to contend with the increasing inadequacy and poor quality of urban infrastructure and associated services, more pollution and congestion, and greater poverty and unemployment. The province’s urban population reached 67.4% of its total 43.8 million people in 2016 as against 59% of the total 42.98 million in 2007.

To prevent the situation from getting worse, Liaoning’s Eleventh Five-Year Plan (11th FYP) called for the promotion of sustainable economic development, particularly in the province’s small cities and towns, through the construction and upgrading of road infrastructure and water supply, and environmental improvement. The plan accorded with PRC’s policy to develop small cities and towns’ potential in increasing national productivity and narrowing the urban income gap by transforming them into dynamic economic hubs that provide farmers from nearby rural areas with better employment opportunities and a higher standard of living.

Responding to the call, the Asian Development Bank (ADB) financed the Liaoning Small Cities and Towns Development Demonstration Sector Project through a loan of $100 million and a grant of $0.25 million from the ADB-administered Water Financing Partnership Facility. The project was processed as a sector loan to enable the government to flexibly respond to the small towns and cities’ rapidly changing needs. It supported seven subprojects, three of which consisted of core subprojects that served as models for subsequent subprojects during loan implementation.

All the core subprojects were along major transport corridors with employment generation potential and which had achieved a certain level of development, at appraisal. Subsequent subprojects were chosen based on their economic growth potential and capacity to provide jobs for rural migrants. Institutional development was also undertaken to ensure effective implementation of each subproject and sustainable operation and maintenance of the facilities.

With outputs consisting mainly of improved roads, water supply networks, wastewater treatment, river management, and district heating, all the subprojects were completed in six years, without cost overrun and, in several cases, exceeding targets. Successful completion of these subprojects has improved the quality of life in 7 small cities and towns, directly benefiting over 1 million people, 8.2% of them poor. During implementation, the project also created 3,862 jobs, including 374 for women and 1,235 for the poor.

The Liaoning Provincial Government, through the Provincial Project Coordination Group and the Liaoning Provincial Project Management Office (LPPMO), served as executing agency. The LPPMO, together with the project management office in each subproject, managed day-to-day project implementation.

Project Cycle Stage:
Country: China

Sindh is the second most populous province in Pakistan. In 2006, it had a total 38 million people, nearly half of whom lived in the urban areas. Karachi and Hyderabad, the province’s two largest cities, accounted for about 70% of the urban population. The remaining 30% were in 20 secondary cities which, during project appraisal in 2008, showed signs of severe stress from acute poverty and the growing inability of urban infrastructure and services to meet the demands of increasing populations.

Increasing urban poverty in Sindh, estimated at 40%-50% in secondary cities, was a consequence of economic growth that lagged those of Karachi and cities in neighboring Punjab. Barriers to economic growth included poor water and power supplies, inadequate connectivity to Karachi, insufficient skilled labor, and political uncertainty. The small infrastructure investments that had been made were inadequately planned and poorly managed, resulting in less-than optimal use and unsustainable operations. Deteriorating urban services increased business costs, damaged the urban environment, diminished the quality of life, and discouraged potential investment.

To help address the situation, the Asian Development Bank (ADB) approved a 10-year, $300 million multitranche financing facility (MFF) for the Sindh Cities Improvement Investment Program (SCIIP). Through institutional and sector reforms, institutional and capacity development, and priority infrastructure investments, SCIIP will enhance the urban environment, public health, and economic opportunities for an estimated 4 million residents in the participating secondary cities. Delegation of urban services delivery to professional management comprises the core reform agenda.

SCIIP implementation commenced with the approval of MFF Tranche 1 in December 2008. Tranche 1 was to support the establishment and/or operationalization of key agencies involved in SCIIP implementation, including the provincial government’s Program Support Unit (PSU) and urban unit, and the autonomous, nonprofit North Sindh Urban Services Corporation (NSUSC). It would also finance urban policy and strategic planning, and physical investments to improve water supply and wastewater and solid waste management in 6 secondary cities in north Sindh. However, design and capacity issues, flaws in institutional arrangements, and most importantly, lack of government commitment to the devolution of urban services delivery had resulted in a less-than-successful Tranche 1 performance. Budgetary shortfalls, due to an underestimation at appraisal of the cost of civil works, also cut the scope of infrastructure improvements. Nevertheless, physical investments in improved water supply did help reduce the incidence of diarrhea among children under-5.

From an estimated $50 million at appraisal, the actual total cost of Tranche 1 was $49.1 million, $37 million of which was financed by ADB and the rest by the Government of Sindh (GOS). Implementation, originally scheduled from January 2009 to June 2012, was extended twice, initially to June 2013 and then to June 2014.

The GOS Planning and Development Department (P&DD), through the PSU, was the executing agency. The NSUSC was the main agency responsible for day-to-day implementation of Tranche 1 in all participating cities, while the urban unit within P&DD was responsible for providing strategic policy and planning guidance for province-wide reforms.

Project Cycle Stage:
Country: Pakistan

Nepal’s transition to democracy, following the end of a decade-long civil conflict in April 2006, had been complex and sometimes halting because of the deep ideological, social, and economic divisions that propelled the conflict. The country failed to approve a new constitution before its 27 May 2012 deadline, the constituent assembly was subsequently dissolved, and the need for new assembly elections had combined to prolong the transition period. While this had increased political uncertainty, it also presented opportunities to promote reforms and help the government shape the transition.

In recognition of the federal government Nepal was moving towards, and in view of the foreseen importance of local governments in the federal structure, the Asian Development Bank (ADB) approved in September 2012 a 2-tranche, $25 million grant for the policy-based Strengthening Public Management Program (SPMP). A complementary technical assistance (TA) worth $6.55 million was also approved. The SPMP aimed to improve the effectiveness of public goods and services delivery by enhancing the efficiency, transparency, and integrity of public finances at the national and subnational levels. It was designed with the view that neither a policy-based grant nor TA alone could address local governments’ severe shortcomings and that an integrated approach that combines policies with investment and capacity development was required.

Through 23 policy actions, the SPMP delivered four outputs ─ improved local government budget and fiscal management, strengthened fiduciary risk management at the local government level, enhanced public procurement system, and strengthened oversight and accountability institutions. Under output 1, performance guidelines on the allocation of block grants to village development committees (VDCs), with special attention to gender equality and social inclusion, were developed; a comprehensive system for reporting fiscal transfers and a medium-term results-based budgeting framework (MTRBF) were also set in place. Under output 2, communities were mobilized in project selection; a uniform accounting and financial management software and guidelines and tools for the conduct of risk-based internal audits (RBIA) were developed and rolled out in VDCs, district development committees (DDCs), VDCs, and municipalities; and a municipal administration and revenue system (MARS) was piloted. Under output 3, DDC and municipal staff were trained and assisted in preparing their procurement plans, the software for electronic government procurement (e-GP) system was developed, and electronic publication of ministry-level procurement plans was supported. Key actions assisted under output 4 included monitoring compliance to asset declaration regulations, establishment of a complaints response system in the National Vigilance Centre (NVC), and operationalization of the Commission for the Investigation of Abuse of Authority (CIAA).

Successful overall delivery of planned outputs made public finance management (PFM) in Nepal more efficient and transparent, at program completion. This was indicated by the wide use of the e-GP system, a remarkable recovery rate of disallowed funds by the auditor general, and a big number of local bodies web-publishing their final audit report.

SPMP implementation was efficient. 97.4% of the grant proceeds were disbursed. Originally designed to take 37 months, implementation period was extended once for 14 months largely due to uncontrollable political events and force majeures such as the 2015 earthquakes and the 2015-2016 unofficial blockade of the Indian border.

Nepal’s Ministry of Finance was the executing agency. The Ministry of Federal Affairs and Local Development, the Public Procurement Monitoring Office, and the NVC were the implementing agencies.

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Country: Nepal

Uzbekistan is a landlocked country providing a key transit point for Central Asian countries looking to trade among themselves as well as the rest of Asia and Europe. As with other landlocked developing countries, it has faced several challenges in connectivity, logistics, and access to sustainable modes of transport. While adequate, its road network, until a few years ago, suffered from a backlog of rehabilitation work that led to pavement deterioration in about 60% of its public roads. As a result, transport cost was high, travel time was long, and the ride was often unsafe and uncomfortable. The need to address these challenges was made more pressing by the continued rise in road traffic since the late 1990s.

In response, Uzbekistan adopted a National Road Development Program for 2009–2014 that called for, among other things, investments in the reconstruction of existing road networks, and some greenfield projects. Building on the Transport and Trade Facilitation Strategy and Action Plan of the Central Asia Regional Economic Cooperation (CAREC) Program that focuses on developing six transport corridors, it prioritized the reconstruction of A380 highway that comprises the Uzbekistan section of CAREC corridor 2 and would later connect to corridor 6. It subsequently requested the Asian Development Bank (ADB) to finance an investment program that would reconstruct 222 kilometers of the highway and ensure its sustainability through improved planning, logistics, road asset management, and community facilities. ADB committed to finance Uzbekistan’s CAREC Corridor 2 Investment Program through a $600 million multitranche financing facility (MFF) that became effective in March 2010 and was provided in three tranches.

Tranche 2 covered the reconstruction of 85 kilometers of the A380 highway. What used to be a two-lane road was converted to a four-lane divided highway with cement concrete pavement. Eight sets of equipment for the construction of bored piles for bridge foundations were also procured. Successful delivery of the planned outputs resulted in better connectivity and an efficient transport system along A380 highway. Travel time was reduced, road accidents declined, and average total long-haul traffic volume increased, all beyond targets. Increases in the gross domestic product (GDP) of the project sites as well as in external trade with Kazakhstan also exceeded targets.

Implementation period however doubled: actual completion was on 31 December 2016, three years after the projected date at appraisal. Underlying reasons included delayed awarding of civil works and goods contracts, change in contractors, bidding process weaknesses, and mobilization delays. Nevertheless, because of the lower-than-estimated actual costs of the civil works contract and construction supervision consulting services, the actual project total cost was 24% lower than the $289 million estimate at appraisal. $218.57 million of the approved ADB loan of $240 million was used up, and the unutilized loan balance was cancelled.

The Republican Road Fund under the Ministry of Finance served as executing agency. A program management unit was established to coordinate the implementation of all the projects under Uzbekistan’s CAREC Corridor 2 Road Investment Program was coordinated by .

Project Cycle Stage:
Country: Uzbekistan

HHebei province covers 187,600 square kilometers of northern People’s Republic of China (PRC). It surrounds PRC’s major cities of Beijing and Tianjin and, like most other provinces in the country, has rapidly urbanized over the past decades. From 38% of its total 69.4 million people in 2006, the province’s urban population swelled to 55% of the total 75.2 million in 2017. However, until project appraisal in 2008, growth in urban infrastructure and services had not kept pace with the rapid urbanization. Accompanying challenges had worsened even while Hebei’s economy remained underdeveloped, with weak urban–rural linkages, underinvestment, poor urban management, and an industrial sector dominated by highly polluting capital-intensive resource processing industries. These challenges had become most evident in severe pollution, rising water shortage, poor public utility services, and the deterioration of the environment. To prevent the challenges from escalating, Hebei's Eleventh Five-Year Plan (11th FYP) called for the development of a more balanced urban system through the growth of medium-sized cities that can serve as economic centers for surrounding towns. Under the plan, medium-sized cities were to strengthen their physical and economic linkages with smaller cities and towns on their periphery. County-level cities and towns were in turn expected to enhance their economic integration with rural areas, create opportunities for farmers to move to urban areas and gain higher-value employment, and provide rural migrants with a higher standard of living through improved urban infrastructure. To support Hebei’s 11th FYP, the Asian Development Bank (ADB) provided a loan of $100 million and a grant of $0.25 million from the ADB-administered Water Financing Partnership Facility (WFPF) for the Hebei Small Cities and Towns Development Demonstration Sector Project. The project was processed as a sector loan and grant to allow the government to flexibly respond to the rapidly changing needs of the province’s small cities and towns. Starting with core subprojects in three counties that addressed a representative mix of the key infrastructure and environmental challenges confronting small cities and towns, the project, at completion, supported a total of 18 subprojects in 11 of Hebei’s poorer counties north and west of Beijing. Institutional development was undertaken to ensure effective implementation of each subproject and sustainable operation and maintenance of the facilities. Using the WFPF grant, it provided corporate management training to implementing agencies of water supply and wastewater subprojects. Successful implementation of all subprojects ─ 4 for wastewater treatment, 6 on water supply, 5 for district heating, and 3 on solid waste management ─ directly benefited about 1.2 million people. Other residents also benefited primarily by way of improved public health, and air and water quality. Early positive impacts on tourism, industrial development, and urbanization were also noted. The project began and closed on time, with no cost overrun. Day-to-day implementation was managed by the Hebei Provincial Project Management Office (HPPMO) together with the project management office in each subproject. With support from the HPPMO and the Provincial Project Coordination Group, the Hebei Provincial Government served as executing agency.

Project Cycle Stage:
Country: China

Kiribati is one of the most remote countries in the world. It consists of 33 small coral islands, dispersed over 3.5 million square kilometers of ocean. It has only one main road connecting the eastern and western islands. This main road runs the length of the extremely narrow and densely populated South Tarawa atoll. Passing through the administrative capital of Bairiki, it connects two of the main gateways to the country, the Bonriki international airport in the east and the Betio seaport in the west. For many years until 2016, the South Tarawa road was in extremely poor condition. Lack of routine maintenance had turned formerly paved sections into a pitted gravel surface. Prolonged wet weather and ever-heavier traffic volumes had accelerated the deterioration of the road which, except for a few repairs in 2008, had not been rehabilitated since the 1970s. The very poor condition of the road profoundly affected the lives of South Tarawa’s more than 50,000 people. Average travel speed was reduced to 20 kilometers per hour. Travel was difficult and dangerous, especially after the rains, as vehicles were forced to navigate large and deep depressions filled with water. In the dry season, excessive dust would collect along the road, significantly contributing to the incidence of upper respiratory illnesses. To address the situation directly affecting 42% of the country’s population in 2010, the Government of Kiribati requested the Asian Development Bank (ADB) to help finance the Kiribati Road Rehabilitation Project. In response, ADB provided a loan of $12 million and two grants worth $11.4 million, all from the ADB-administered Asian Development Fund. Despite serious challenges, the project succeeded in achieving its intended outputs, in many ways, exceeding targets. It rehabilitated 38.4 kilometers of paved roads and 9.2 kilometers of feeder roads and dramatically improved the safety and serviceability of these roads by putting in place sturdier seawalls, concrete u-drains, and several features new to Kiribati, including well- demarcated footpaths, clearly marked speed humps, street lights, and pull-off bays. It also enhanced the sustainability of these roads and helped address the country’s need for an enabling framework to better manage its road assets by supporting the training of local subcontractors in routine maintenance and the preparation of a detailed routine maintenance manual, a road safety action plan, and a road safety legislation. Successful completion of the project has provided South Tarawa’s people a safer, more efficient road network, improving their access to vital infrastructure and essential goods and services. Early beneficial impacts have also included increased economic activity along the roadside, with many new small stores and eateries now established. Kiribati’s Ministry of Infrastructure and Sustainable Energy was the implementing agency and the Ministry of Finance and Economic Development, the executing agency. The project was cofinanced by the Government of Australia, the Government of Kiribati, and the World Bank.

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Country: Kiribati
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Independent Evaluation, ADB
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