Evaluation of AID project no. 527-0226 for the development of small hydroelectric power plants

External evaluation covers the period 11/80-11/86 and is based on document review, site visits, and interviews with project personnel and beneficiaries. Despite delays due in part to the restructuring of ELECTROPERU and the Regional Electric Companies (REC's), the project has: (1) completed construction of 3 of the 10 planned SHPP's and associated distribution networks; (2) supported development of a national private industry to manufacture equipment for SHPP's; (3) trained ELECTROPERU staff to design, evaluate, and implement SHPP subprojects (SP's); (4) implanted in ELECTROPERU a methodology for economic evaluation of SP's, and thus ensured that the SP's will have adequate economic benefits; and (5) encouraged rural people to work with ELECTROPERU in furthering rural electrification. In all, the project has significantly helped raised the rural standard of living and thereby has achieved its primary purpose. Several problems require immediate attention, however. (1) Training to promote productive uses of electricity has not occurred. A consultant should be hired to help ELECTROPERU's new Electricity Promotion Service in this regard. (2) ELECTROPERU has not used the TA designed to train REC personnel in SHPP operation and maintainance. The project should, inter alia, use ELECTROLIMA's technical schools to provide this training and employ grant funds to provide training and equipment assistance to the schools. (2) The efficiency of onsite construction inspectors suffers greatly from a lack of radios and vehicles; these should be provided. (3) The slow procedures used to resolve contractor claims has delayed the construction of several SP's; some will not be completed by the project's 5/19/87 end. Extraordinary measures are needed to resolve claims (e.g., contract more personnel for the Project Office, permit payments for additional work to be approved without recourse to ELECTROPERU's senior management) and hasten construction (possibly use force account construction to supplement the work of contractors who are furthest behind). (4) The transfer of the Electrification Project Units (EPU's) to the REC's could delay SP supervision and approval/disbursement of payments to contractors. EPU personnel and procedures for supervising the SP's and for handling project funds should remain unchanged for the remainder of the project. (5) ELECTROPERU has not handled A.I.D. funds expeditiously. Final accounting for completed SP's, and payment of pending invoices and related recordkeeping should be expedited. The report also identifies and recommends solutions for 11 long-term problems.