The outlay for agribusiness grant facility (AGF) established by the project rose by 52.7% during implementation. This resulted from a larger scale of agribusiness investments than anticipated, reflecting improved investor confidence during the post-insurgency period. Matching grants to the AGF from ADB, the government of Nepal, and the Netherlands Development Agency, SNV, further boosted investor confidence. For every $1 spent, the AGF leveraged $1.65 of private investment.
While the original and revised project design and monitoring frameworks were reasonable, the impact statement could have been nuanced to reflect the specific support provided to the education sector. The outcome and shelter-related output indicator should have been specific to the project schools to correlate with project inputs and overall objectives. The gender action plan (GAP) design could have included more quantitative indicators and activity targets for enhanced monitoring and evaluation. As GAP activities occurred later in the project cycle, baseline data could have been collected midway for refining the GAP targets during the midterm review. Regular GAP monitoring could have been strengthened, as this data would have further strengthened project management.
It is unclear why a covenant was necessary to ensure the use of single-source consultant recruitment. The method may not always save time, as the need to negotiate remuneration rates poses a significant risk of offsetting the time savings from bypassing advertising and shortlisting.
This program’s results framework and targets were closely aligned with PLN’s key performance indicators (KPIs), which were based on PLN’s RUPTL, 2015–2024 and Indonesia’s National Medium-Term Development Plan (RPJMN), 2015–2019. PLN has established KPIs in its corporate plan and has regularly reflected these in its annual reports. The close alignment between the PLN’s KPIs and the program’s results framework and targets encouraged the PLN to achieve the DLI targets. Power utility companies in other countries would benefit from similar arrangements that are beneficial for the attainment of both the program and corporate performance targets.
completion, six of the seven safeguard PAPs were achieved. The implementation of the safeguard PAPs has improved the capacity of PLN, especially at the unit level, to manage environmental and social impacts. By excluding 190 circuit-kilometer (ckm) of medium-voltage lines in the indigenous peoples’ area and 428.19 ckm of medium-voltage lines and 284.98 ckm low-voltage lines in the key biodiversity areas, the PAPs minimized the risks to ADB safeguards compliance. But the exclusion also eliminated indigenous peoples’ access to program benefits. In the upcoming review of ADB’s Safeguard Policy Statement, the provisions for this modality could consider how significant risks associated with government-funded programs could be better addressed.
The RBL modality tested in Indonesia through this program came out successful and easier to implement with lower transaction costs. It was flexible enough and allowed the PLN to select investments based on its changing requirements even during program implementation. Therefore, it is well suited to large power systems where demand and the technology available can change within a short time. By focusing on aggregate outputs and result areas as opposed to monitoring each contract, the program was able to support PLN in an effective programmatic manner.
Monitoring the progress against targets of PLN’s broader Sumatra program, which the RBL supported, was not considered part of the RBL administration responsibility. Therefore, the threats posed by the lack of financing for the broader program and the subsequent removal of some of its major components were not sufficiently tracked down and addressed under the RBL. It is important for future RBL programs to include in their monitoring all associated interventions that could have an impact on their implementation to enable necessary actions to be taken promptly to address deficiencies and/or avoid negative unintended consequences.
Some of the DLI targets and baselines set during program preparation were found to be conservative or inconsistent. Adjustments were made during implementation to make them more realistic. The target on energy sales was significantly affected by external factors beyond PLN’s control, including lower economic growth than anticipated under the PLN’s Power Supply Business Plan (RUPTL), energy subsidy removal, and the changing costumer consumption behavior. The experience has highlighted the importance of (i) setting DLIs that are within program control and not vulnerable to external factors, (ii) setting ambitious but achievable targets based on historic trends and EA/IA capacity, and (iii) having enough flexibility to adjust to changes in the external environment.
Through the Indonesia Resident Mission, ADB ensured that lessons learned from program implementation were used in the design of PLN subsequent RBL programs. Building on the program’s success in improving warehouse and waste management in Sumatra, ADB and the PLN transitioned this PAP into a DLI in the RBL programs for Sulawesi and Nusa Tenggara and Kalimantan, Maluku, and Papua. Adjusting DLI targets and verification protocols as needed is also a lesson learned that found useful application in subsequent programs.
By using disbursement-linked indicators (DLIs), non-DLI targets, and program action plans (PAPs) under the results-based lending (RBL) modality, the program successfully instituted mechanisms that strengthened the capacity and encouraged performance improvements from Indonesia’s State Electricity Company, PLN (Perusahaan Listrik Negara), in both technical and administrative areas. Improvements spanned: (i) the procurement monitoring system, where inconsistencies in reporting were identified and addressed through regular procurement monitoring; (ii) the planning and implementation capacity of PLN, which (a) made the preparation of subsequent RBL programs easier, (b) enhanced coordination among PLN divisions, and (c) enhanced PLN’s ability to continue to access debt capital markets and the bank debt market (PLN has supportive relationships with banks and investors so has access to multiple channels of commercial financing); (iii) PLN’s processes for the recording, collection, calculation, and reporting of data used to measure and track the DLIs and non-DLIs, particularly the management reporting information system and its primary sources of data; and (iv) warehouse and waste management. Because of the stronger evaluation culture developed by the RBL, the program also helped PLN recognize the need to update its internal regulations on the disposal of Non-Operating Fixed Assets (ATTB), particularly transformers, to speed up safe disposal.
The number of review missions, rigor of the review, efficient and effective follow up, and frequency of changes in project officers need to be related to the capacity of the executing agency. Reporting systems need to identify implementation challenges before they become problems, and agreed upon solutions need to be vigorously followed up.
The TA for energy policy, regulatory components, and DSM implemented by MOF was effective for two of the three components, and only partly for DSM. The TA completion report stated that a major lesson is that policy development in Pacific countries is best supported by provision of assistance for policy implementation, not merely through support for policy development. The CEF established under the project was inadequately financed, with resources far below those indicated in the RRP and was not used for clean energy projects, whether small scale generation or DSM.
To ensure that the equipment being procured met the technical requirements of the program, a standard Section III: Evaluation and Qualification Criteria was developed by the implementers in consultation with ADB’s Procurement, Portfolio, and Financial Management Department and subsequently incorporated in the bidding documents. The criteria specified that goods offered with the same or advanced technical specifications should have been in production for a certain number of years, with a certain minimum number of units sold and satisfactorily in operation. Standardization of the criteria clarified the requirements for the suppliers and the bid evaluation committees, facilitated procurement, and helped ensure the quality of the equipment procured.
The equipment and materials procured under the 5 tranches of this MFF were mainly installed in 3 railway lines instead of in all 47 railway lines built across the region from 2009 to 2016. This arrangement made MFF implementation manageable in most respects, including in procurement, equipment delivery and installation, quality control, and funds management. The focused operation also ensured MFF implementation efficiency and quality. In addition, because the 3 selected railway lines crossed the entire region, all relevant key stakeholders, including the 3 railway administration bureaus responsible for operation and maintenance, were involved in and correspondingly benefited from MFF implementation.
The city women’s unions played an important role in implementing this project’s GAP. They have (i) available staff network at city, district, and commune levels; (ii) regular meetings with residents; and (iii) complete understanding of the local culture. With new government policies prohibiting the use of official development assistance for non-physical investments, government counterpart funding should be secured to implement the GAP in future projects.
Having a professional project management unit (PMU) reporting directly to the provincial people’s committee and assigned as the implementing agency contributed to this project’s success. This was partly because decision making was delegated to the PMU, which had direct access to provincial decision makers when needed. Including PMU capacity assessments during project preparation and addressing their capacity needs during implementation should augment the overall implementation capacity of executing and implementing agencies.
Twenty one percent of the ADB net loan amount was cancelled at financial closure. The disbursement ratio did not accurately reflect project progress because surplus loan proceeds were included in the net loan amount available for disbursements thus lowering the disbursement ratio. Partial cancellations are not normally considered in Viet Nam until financial closure due to lengthy and complex government procedures; hence, careful consideration is required not to anticipate this when preparing contract award and disbursement projections.
In Viet Nam, the cost estimates of procurement packages are prepared and approved by the executing agency (EA) based on national cost norms. The bids also tend to follow the national cost norms. Therefore, as the civil works cost estimates prepared for this project at design stage were based only on market costs, they needed to be reconciled with the national cost norms, further delaying procurement and startup. Cost estimates for future ADB projects in Viet Nam need to be guided by national cost norms to avoid implementation delays that impact directly the projects’ disbursement performance.
The engagement of a financial management officer in ADB’s Sri Lanka Resident Mission in 2019 resulted in IA improved financial management during the final years of the project.
The project used drones to assist with stringing in hilly, forested areas with access problems. This helped to reduce implementation delays as well as environmental impacts in said areas. The innovative approach has subsequently been implemented systemwide.
A section of a transmission line route, which initially traversed a densely populated area, was rerouted by the implementing agency (IA), the Ceylon Electricity Board (CEB), to minimize social impacts. Although the CEB selected an alternative route with minimum environmental and social impacts to comply with the environmental management plan, it failed to record these changes as required by ADB’s Safeguard Policy Statement and disclose them to ADB. A community organization objected to this rerouting, which led to legal action and the suspension of construction following intervention by ADB’s Office of the Special Project Facilitator. Since the issue cannot be resolved until a legal decision has been made, the loan closed with the work not completed. At loan closure, ADB requested CEB to resolve the issue as had been agreed with ADB, before implementing the remaining work. In this setting, ADB realized the need for capacity building in CEB for efficient and effective safeguards management in projects and devised a framework for the establishment and mainstreaming of a safeguard unit within CEB.