Final evaluation of USAID project no. 518-0029/loan no. 518-W-039, alternative energy sources

Final, external evaluation covers the period 9/81-6/86 and is based on document review, site visits, and interviews with project personnel. INE has made great strides in establishing itself as a viable institution. It has developed substantial technical competence in: energy policy studies; NCE demonstrations; alternative energy technologies (e.g., small hydro, solar, geothermal, biogas); industrial energy conservation; and national energy planning. In several cases, INE has been influential in decisionmaking. INE is also increasing its information dissemination and technical outreach activities. For example, INE has been designated as the national center of a new regional energy information exchange network being organized by the Latin American Energy Association (OLADE), and it has successfully worked with private firms in adapting NCE technology to selected markets, emphasizing local manufacture wherever possible. The project's development impact includes consumer benefits from several NCE demonstration projects; training and experience gained by INE staff; benefits to other organizations, both public and private, that worked with INE; and general benefits to the nation from INE's strengthened analytical energy planning capabilities. However, greater project impact was limited by several factors. (1) The project was overly ambitious, expecting INE to become the dominant entity in national energy planning despite the size and financial resources of competing agencies. (2) The negative attitude towards INE developed by USAID/E during early implementation problems persists despite INE's favorable record since the mid-term evaluation. However, it is understood that the Mission was under pressure to deobligate funds and has experienced several staffing problems. (3) INE experienced its own problems stemming from inexperience, personnel turnover (including the Executive Director), and changes in program planning and definition. Several lessons can be learned about institution building projects: (1) work plans/schedules should be kept flexible, and encouragement should be given consistently to the recipient institution; (2) institutions gain credibility over time, through the quality of their work; this cannot be conferred by edict; (3) progress cannot be judged by spending patterns; (4) delays can be avoided if the new institution uses accounting procedures which are consistent with those of donor agencies and is properly informed of the impact of A.I.D. procurement regulations on project activities.