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Lesson
Overly prescriptive approaches limit the scope for adaptive management of livelihood restoration programs for project-affected people. Clear recognition of the many risks associated with implementing a complex project in partnership with a relatively inexperienced and limited-capacity government led to a concerted effort to “get everything right,” as it were, before the project even started. That is reflected in the negotiation of a comprehensive and highly detailed concession agreement, a 1,362-page legal document.

Project Number: 37734-013, 37910-014
Project Name: Greater Mekong Subregion - Nam Theun 2 Hydroelectric Project
Report Date:
Lesson
It is important to avoid overly ambitious objectives in project design. The enhancement of biodiversity conservation in NNT-NPA was an overly ambitious objective. The area to be protected involved the entire watershed and an area downstream. Its size challenged the capability and capacity of a number of agencies to plan, implement, and sustain conservation requirements.

Project Number: 37734-013, 37910-014
Project Name: Greater Mekong Subregion - Nam Theun 2 Hydroelectric Project
Report Date:
Lesson
A large, complex development project requires a commensurate and substantive long-term commitment. The exceptionally long preparation and implementation periods (2003–2019) were essential to provide sufficient time for analysis, appraisal, and supervision of a complex project and ensure an eventually successful outcome in a high-risk context.

Project Number: 37734-013, 37910-014
Project Name: Greater Mekong Subregion - Nam Theun 2 Hydroelectric Project
Report Date:
Lesson
Quality project sponsors are essential for success, but their limitations and country capacity constraints also need to be considered. The selection of a well-qualified developer as the primary equity holder in the NTPC consortium appears to have played a major role in the efficient construction and operation of the dam and power facilities with very modest cost and time overruns.

Project Number: 37734-013, 37910-014
Project Name: Greater Mekong Subregion - Nam Theun 2 Hydroelectric Project
Report Date:
Lesson
It is essential to carefully study and consider less socially and environmentally disruptive options in investment decision making in hydropower. Possible alternatives in future cases, for example, could include river offtake, run of the river, small decentralized hydro systems, and backup from solar and wind power. The choice should be made through a participatory assessment that gives the same weight to social and environmental dimensions as to technical and economic aspects.

Project Number: 37734-013, 37910-014
Project Name: Greater Mekong Subregion - Nam Theun 2 Hydroelectric Project
Report Date:
Lesson
IFI collaboration can yield a major developmental contribution with a high-risk project in a limited-capacity country. The close and effective collaboration of ADB, the World Bank, and other IFIs from an early stage provided the necessary confidence for the private sector to undertake a pioneering, complex, and large-scale project in a limited-capacity country. Although the total IFI loans and guarantees were modest in scale, the independent evaluation team established that they had been a necessary requirement for the international dollar financiers to extend loans to NTPC.

Project Number: 37734-013, 37910-014
Project Name: Greater Mekong Subregion - Nam Theun 2 Hydroelectric Project
Report Date:
Lesson
Biodiversity conservation in the context of hydropower projects requires an approach whereby “conservation forest” is balanced with “production forest” as a source of income for affected people. To date, ADB, the World Bank, and international organizations consider many of the village forest activities as failures (e.g., trees are being cut down to the roots) with government advisors having little understanding of forestry practices in relation to biodiversity conservation and sustainable practice.

Project Number: 37734-013, 37910-014
Project Name: Greater Mekong Subregion - Nam Theun 2 Hydroelectric Project
Report Date:
Lesson
The project was the first tranche of the first MFF investment program developed in the PRC.17 Based on the experience from this project, the MFF modality should be suitable for future projects in the PRC where there are discrete components. The MFF enabled sequential construction and financing requirements that were funded by separate tranches, thus limiting unnecessary duplication of administrative effort and approvals.

Project Number: 39652-023
Project Name: Gansu Heihe Rural Hydropower Development Investment Program— Erlongshan Hydropower Project
Report Date:
Lesson
The project demonstrated the importance of retaining qualified and competent consultants at the project preparation stage. Knowledge of the project design and implementation that was transferred from ADB to the government was highly valued, and officials expressed the view that this was more important than the loan financing.

Project Number: 39652-023
Project Name: Gansu Heihe Rural Hydropower Development Investment Program— Erlongshan Hydropower Project
Report Date:
Lesson
Continuity of officials and staff at the executing agency, implementing agency, and ADB, who were involved in the development, implementation, and operation of the project, was maintained throughout the project. This continuity, together with stability in personnel capacity, was an important factor in the success of the project. While this lesson may be self-evident, it is not easily achieved and is often overlooked.

Project Number: 39652-023
Project Name: Gansu Heihe Rural Hydropower Development Investment Program— Erlongshan Hydropower Project
Report Date:
Lesson
The success of the Erlongshan Hydropower Project resulted from a combination of strong government ownership and the commitment of the Erlongshan Hydropower Company. These factors ensured that any actual or potential problems were quickly and effectively resolved.

Project Number: 39652-023
Project Name: Gansu Heihe Rural Hydropower Development Investment Program— Erlongshan Hydropower Project
Report Date:
Lesson
The timely availability of counterpart funding prevented cash flow problems from arising, which could have delayed project completion. Because counterpart government funding was timely, there were no delays and the project was completed early.

Project Number: 39652-023
Project Name: Gansu Heihe Rural Hydropower Development Investment Program— Erlongshan Hydropower Project
Report Date:
Lesson
ADB should consider promoting complementary rural development initiatives in project-impacted areas with indicators of outcome derived from the impact assessment process. Agencies to be involved in implementing these initiatives should be preferably located at the district or village level. ADB should not rely on the “polluter pays” principle or on compliance mechanisms to implement its safeguards.

Project Number: XXXXX
Project Name: Kali Gandaki “A” Hydroelectric Project
Report Date:
Lesson
Consider projects with sufficient storage capacity to better address load shedding, which continues to affect economic growth and living standards. To consider such projects, greater knowledge of technical aspects, including geology, hydrology (including extreme events), and sedimentation, should be developed by financing agencies and/or developers.

Project Number: XXXXX
Project Name: Kali Gandaki “A” Hydroelectric Project
Report Date:
Lesson
Specific loan covenant must be included and strictly enforced. This lesson pertains to the whole subject of loan covenants: they should be more strictly enforced. During ADB Board of Directors’ meeting on 18 March 1996, the Board expressed a similar opinion.

Project Number: XXXXX
Project Name: Kali Gandaki “A” Hydroelectric Project
Report Date: