Institutional

As the government continues the reform program with assistance from other development partners and the private sector, detailed ongoing assessments of government budget commitments and financing needs, and capacity development are required, with related work plans. This support needs to include working with the Lao National Chamber of Commerce and Industry as a key partner, expanding the SME Service Centers and outreach, and enhancing access to finance. It will also require government decisions on legal, regulatory, and financial aspects, to fully operationalize an e-commerce platform.

Lack of capacity in governmen to continue reforms without external support puts the sustainability of reform projects' outputs at risk. Reforming the sector requires strong ownership and commitment in terms of providing sufficient financing and policy changes to support the reform. Some project outputs—including the textbook rental scheme and textbook provision, online training modules and attestation for teachers, curricula review system, and financing of innovative schools' additional functions—are incomplete as the government still has not implemented them countrywide.

Establishing an internally sourced project management unit (PMU) at the executing agency and project implementation units at PFIs will improve project management and efficiency. The Ministry of Finanace did not establish a separate PMU but assigned a focal point from existing staff to lead project management. However, high turnover of the assigned MOF staff affected project continuity and institutional memory and delayed submission of safeguard reports.

Strong collaboration between the executing agency and the land office from the project planning stage is critical to minimize delays in land acquisition completion and land ownership update.

The need for proper arrangements to meet customary ceremony requirements, which can cause delays, should be anticipated in future project designs. For example, because a sacred cemetery to the community was identified at the construction site of a project package, a customary ceremony was needed and conducted to meet the local community's religious requirements.

A draft proposal on income restoration and rehabilitation programs need to be prepared along with the safeguard plans to avoid delays in safeguards implementation. In this project, contractors of four packages should have deployed fulltime environmental and occupational safety and health personnel to raise awareness and enforce the safeguard requirements for subcontractors and workers.

Proper location of the project management unit is crucial to smooth implementation. Daily coordination and supervision were initially undertaken across two distant sites: the construction implementation unit (UIP) in East Kalimantan and the project implementation consultant in West Kalimantan. This caused coordination difficulties on implementation issues arising from the field. In 2016, UIP West Kalimantan was made in charge of project management. This improved project management and coordination, making implementation smoother for the rest of the project duration.

Changes to a project's scope and routings are common among energy projects of this nature and magnitude, but it is important to update all relevant project documents accordingly. Despite significant scope changes during project implementation, the design and monitoring framework was not revised to account for the changes. This resulted in the project's performance being evaluated against targets that were not updated. However, the loan agreement was amended accordingly.

Continued engagement with the same agencies strengthens collaboration and facilitates the attainment of project results. ADB has had a long history of engaging key agencies in India's power sector. Nine ADB loans, including two funded by multitranche financing facilities, provided the distribution companies (DISCOMs) with extensive experience that helped with this project's smooth implementation and better use of loan funds.

Involvement of the resident mission staff during project appraisal could help finetune the estimation of works and provide them with a better understanding of the project. The resident mission supported the DISCOMs in all aspects of implementation, including strengthening safeguard monitoring and reporting. However, they were not as involved in approval, which could have helped attune cost estimates to the loclal market conditions, as well as develop better grasp of the project.