Due diligence critical before using new technology. The technical and economic viability of a new technology, such as the straw gasification technology in the project, must be examined carefully before its inclusion in a project. This is particularly important to poverty- focused projects as poor stakeholders would have less capacity in managing risks of project failure. The cancellation of type IV gasification plants at midterm review mission over the concerns about their technology immaturity and economic viability avoided project failure and was a sound decision. However, it also showed a lack of proper due diligence regarding these factors at the appraisal. The supplementary appendix A of the report and recommendation of the President (RRP) indicated that the technology was only beginning to be tried. The fixed bed gasifier had been installed only by one company and had not been widely adopted. The other equipment type, a fluidized bed gasifier, had not received certification from Chinese authorities at the time of the project appraisal. The project design was unclear about the type IV systems' implementation arrangements and investors. This was especially risky because the majority of the project beneficiaries were to be farmers with limited skills, and the beneficiaries and implementing officers would both need capacity development in basic biodigester construction and O&M. The type IV system technology would have been too complicated for farmers to operate and maintain. It might well have failed if the 28 units had been set up as planned.
Efficient Utilization of Agricultural Wastes Project