Lessons Drawing from Evaluations Relating to PPPs IEG and DAC Network Private Sector Evaluations Workshop Evaluation Support to Private Sector Development 18 June 2013 • OECD Conference Center Paris Lessons Drawing from Evaluations Relating to PPPs Lauren Hauck Senior Evaluations Specialist Independent Evaluation Department Asian Development Bank The views expressed here are those of the author and do not necessarily reflect the views or policies of the Asian Development Bank or its Board of Governors or the governments they represent.

Successful PPPs Require Situation Analysis Public and Private Sector Engagement Clearly Documented Agreements SUCCESS is about the result for the intended project beneficiaries Outline: Events and disasters in Asia Climate and Disaster Trends Worldwide Increasing Incidence/ Severity Temperature and Precipitation anomalies 2012 significant climate /weather events Increasing Risks for Asia Disaster-risk reduction and management Mitigation and Adaptation Shifting to low-carbon path Reverse increasing trend Effective DRR management Role of development banks: ADB

Case Study: (Cambodia) Power Transmission Lines Co., Ltd. (CPTL) Photo credit: L. Hauck 2013

Situation Analysis: 2006 18% of total households in Cambodia have access to electricity 95% of electric power is from diesel power plant, isolated systems, not interconnected Electricity prices are highest in the region Power losses average 32% in rural areas GOAL: start construction of the skeleton transmission system and finally to expand this system to cover the whole country with a sustainable supply at lower prices and reduced rate of losses Source: EAC, Report on Power Sector of the Kingdom of Cambodia For The Year 2006, Phnom Penh, July 2007

Situation Analysis: 2006 Key Power Sector Agencies in Cambodia MIME: Ministry of Industry Mines and Energy (est. 1992) EDC: Electricité du Cambodge (became autonomous state utility 1996) EAC: Electricity Authority of Cambodia (est. 2001 as independent sector regulator) PPP ENVIRONMENT: Clearly defined roles and goals, limited experience and resources, private sector resources required to meet stated goals

Situation Analysis: 2006 PPA signed by governments of Thailand and Cambodia to supply Banteay Meanchey, Battambang and Siem Reap through 115 kV transmission system EDC: Implementor for Cambodia CPTL: 115kV transmission line and 115/22kV sub-stations under construction CPTL is the first privately-owned power transmission line in Cambodia Source: EAC, Report on Power Sector For the Year 2006

Map of Line Key Features 221 kilometer single circuit 115 kV transmission line 3x 115 kV/22 kV substations Banteay Meanchey Siem Reap Battambang 1x 115 kV/22kV substation Source: EAC, Report on Power Sector For The Year 2006 The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.

Public and Private Sector EAC: issues licenses, sets operating standards, approves tariffs, offers support to licensees, monitors and reports results EDC: generating, transmitting, distributing electricity in compliance with license throughout the Kingdom of Cambodia CPTL: build-own-operate-transfer transmission line and substation to provide continuous power to northwest provinces ALL THREE entities must perform for PPP to 1) connect power to the end user; 2) deliver tariff rates and quality; 3) deliver scheduled payments Source: EAC Report on Power Sector For The Year 2006; EDC Annual Report 2010

Licensee Illustration Source: EAC Website, updated by EAC for Year 2011. The boundaries, colors, denominations, and any other information shown on this map do not imply, on the part of the Asian Development Bank, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries, colors, denominations, or information.

GOAL: Reduce Losses Source: EAC, Report on Power Sector For The Year 2006; EAC, Report on Power Sector For The Year 2011

GOAL: Reduce Prices - Prices shown for smallest- volume customers 2006 2011 - Prices shown for smallest- volume customers - Approximately Rls4000/US$1 Source: EAC, Report on Power Sector For The Year 2006; EAC, Report on Power Sector For The Year 2011

GOAL: Increase Coverage Coverage also includes service levels: intermittent supply has become nearly continuous while serving more customers Source: EAC, Report On Power Sector For The Year 2006; EAC, Report On Power Sector For The Year 2011

Above: Local Market; Below: ‘Old Market’ Photo Credit: L. Hauck, 2013

Interviews with End-Users General public quite well-informed about the electricity supply. ‘It comes from Thailand;’ and all were able to state the rates paid per kWh ‘Electricity helps business to grow. [If it is] hot, dark, nobody come[s] in.’ The Grid ‘saves some money. It is cheaper than fuel for generation. Also quieter.’ Outages now are often scheduled; ‘they announce it by radio’ and ‘usually only 1-4 hours at a time.’ Source: L Hauck, Site Visit interviews, March 2013

Lessons From PPP Case Study Situation and Risks Must be Understood by all parties Clear Rationale for PPP Needed Project has to be Part of Long Term Sector Development Plans Clear Contracts and Deliverables Required Appropriate Sharing of Tasks and Risks Among Parties Required Long-term commitment to the PPP is Required

Conclusion SUCCESS includes capacity building for the public sector, sustainable operations for the public and private sector, and quality services for the end-user PPPs require many elements to align and the entire program of agencies and activities must be considered

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