Nameplate capacity needs to be considered in the context of a plant’s capacity factor. No power plant runs 100% of the time, and power plants, like that of AKL, that run on auto diesel fuel will need to shut down routinely for scheduled maintenance. Routine maintenance combined with unscheduled shutdowns lower actual net capacity. Hence, to mitigate the risk of providing support to nonviable private sector power generation projects, it is necessary that ADB include scheduled shutdowns and the possibility of unscheduled shutdowns when calculating initial economic and financial rates of return.
This is important when technical problems arise that cause major shutdown of operations, as was the case of AKL due to a 2004 fire. Private sector insurance enables unforeseen technical problems to be fixed along with compensation to the insured for revenue loss due to the incident. Foreign investors can leverage important insurance that is often difficult for sovereign entities to acquire.
Alternative fuels consist of renewable energy sources and thermal fuels, including clean coal options. Private sector support to the power sector is optimized with a comparative analysis of real fuel options.
Apart from its innovative nature, the DEMP was also very broad, with the project inputs spread very thinly. The project included the construction of a national broadband network; mobilization of non-traditional partners including private institutions; capacity building and institution strengthening within the OUSL; development of online courses, which is notoriously difficult and slow; and implementation of these courses with the expectation of rapid, high enrolments. The DEMP may have had more chance of success if it had focused only on the OUSL, or only on NODES, with the strengthening of the OUSL as a separate project.
For innovative projects, significant resources are needed up front. This can include resources for assessing the feasibility of, and demand for, the project objectives and approaches for achieving them, as well as to lay the groundwork for ensuring their acceptability among different interest groups. Resistance to the innovations proposed cannot be overcome at the same time as project implementation is proceeding. The same applies to demand for the project outputs and outcomes. It is critical that a reasonable amount of consensus and commitment toward the project objectives is established before implementation begins.
Considerable time, effort, and emphasis must be placed on the development and monitoring of the risk matrix for innovative projects. This applies particularly to risk identification and potential risk mitigation strategies. A range of alternative strategies should be developed in detail for every identified risk. The risk matrix and mitigation strategies for innovative projects should be discussed extensively by ADB and the government to ensure a common understanding and commitment. The risk matrix should be a major focus of ADB-government discussions in project review missions during implementation, and should be updated at least annually through a formal process such as a memorandum of understanding. DEMP implementation would have benefited significantly from a sharper focus on emerging risks, development of appropriate strategies to address these risks as they emerged, and a strong joint commitment to implementation of these strategies.
By definition, the knowledge, skills, and experience needed to guide and embed innovative change are likely to be scarce in both the borrowing countries and in ADB. It is evident that additional time and resources are required to support implementation, which did not happen in the case of the DEMP. This should include longer, more intensive, and more frequent review missions, and supplementation of missing technical skill areas by bringing in additional staff from across ADB or engaging external support for review missions in particular. Technical assistance to strengthen the expertise available under the loan and ensure ongoing support to implementation may also be necessary. If the sector department is not committed to providing additional resources and support to innovative projects, then these projects should not proceed.
system is being created, as it was under the DEMP, it is critical that a commitment for sustained investment is made. Neither the government nor ADB had any interest in a follow-on project. Even a 1-year extension to allow enrolments to continue their upward trend at the end of the project was viewed unfavorably. Innovation and reform require more long-term commitment to be successful.
The experience of the DEMP provides a good lesson on the importance of developing and operationalizing sound sustainability strategies. The project paved the way for the establishment of an innovative national online learning system, but the lack of a clear long-term plan was one reason why the concept eventually failed. If the best long-term strategy for sustainability is difficult to specify at the outset, specific support and additional time should be allowed in the project design to prepare and operationalize an agreed sustainability plan.
In most education projects, and the DEMP was no exception, the focus of project implementation is on the development of facilities, teacher training, and programs that are only completed near the end of the project. The final achievement measures, however, are generally framed in terms of the number of students intended to benefit from the program. Again, the DEMP was no exception. It takes time, however, for institutions to train staff and develop online courses—especially technical courses, to launch them, develop good online or face-to-face tutorial support, and then to attract reasonable enrolments. It generally takes at least one cycle of a program to convince students that new programs are worthwhile. In the case of the DEMP, additional time should have been built into the design, or it should have been a multiphase project. This would have allowed not only development of the network and associated courseware, but also time to allow the network to establish itself, experiment with different approaches, and develop into a mature system with good potential for sustainability.
Effective champions are critical for the success of any new initiative. This is even more true for innovative projects, where strong commitment to the project on the part of both the government and ADB are critical to success. The failure to locate the DEMP within a government agency with strong ownership of the project was one of the factors that led ultimately to its failure. The sustainability of initiatives beyond the lifetime of the project rests heavily on the commitment and support provided by the relevant ministry, in the form of formal institutionalization of systems and processes, further training, and regular follow up by relevant staff. Similarly, the failure of ADB to adequately invest time and resources in project implementation, and the failure to remain involved in ensuring network sustainability in the years after the project ended, when its fate remained in limbo, also contributed to the project’s limited success.
The DEMP failed to expand tertiary education opportunities and increase the employability of graduates to the extent intended. The question of how to achieve both of these objectives remains. A central issue in this regard is how to improve external degrees. One of the lessons of the DEMP is that Sri Lankan students may not yet be ready for fully online courses, at least for the longer degree courses. To raise the quality and range of offerings to external students, a blended learning approach would be most appropriate, combining online learning with a limited amount of face-to-face tutoring. This would allow the introduction of science and engineering as external degrees, currently not offered. Some universities have established their own open and distance learning centers, and these could be considered for future ADB assistance, along with support for further capacity expansion at the OUSL.
The number of projects and subprojects to be implemented under any assistance package must consider the absorptive capacity of local contractors, availability of construction materials, and local labor. Close attention must be given to the quality of the facilities and infrastructures built. Utilizing local contractors and labor have their trade-offs, such as implementation delays and deficiency in financial resources, but the quality of the completed facilities is nonnegotiable. This would require closer supervision, frequent monitoring, and faster processing of payments.
The project lacked focus as it included interventions in several key areasexpansion and modernization of transmission system for meeting growth of demand and connection of new renewable energy projects, DSM, and power for all. As it also marked ADB’s return to Sri Lanka power sector after a break of 7 years (following the 2002 approval of a sector development program), a less ambitious results framework and reasonable implementation schedule would have brought more success, e.g., output 1 with a pilot scheme for DSM, output 2 and output 3 without the credit program, and an implementation period of 6 years.
On the project cost estimates, the recurring reasons in the three closed projects have been high engineering estimates, competitive bids, and depreciation of domestic currency.