Mid-term evaluation : El Salvador rural electrification program -- final report (AID project no. 519-0358)

Internal, mid-term evaluation covers the period 8/88-2/92 and was conducted by the U.S. implementing agency, the National Rural Electrification Cooperative Association (NRECA). Progress in the two project components has been uneven. The multi-faceted TA component is ahead of schedule, with training going well in all categories. As of 3/91, 92 personnel of CEL, the national utility, had completed 419 person-hours of training at the training center included in the new CEL complex. The subject matter of the training was appropriately aimed at rectifying major problems, trainers were knowledgeable, and equipment fully met expectations. More training is needed, however, especially in accounting, since training needs were greatly underestimated at the start. By contrast, the construction component has experienced substantial delays, mainly due to a shift -- which was advisable -- from the local lottery system to the competitive bidding procedure for selecting contractors. Several recommendations are made for adjusting the project's design. (1) Adding household connections from distribution lines constructed under the predecessor project (which did not include a credit program for house wiring) would bring in new consumers rapidly and would be very cost-effective in social, economic, and financial terms. It would also improve the load factor of the total distribution system. (2) While the Banco de Fomento Agropecuario (BFA) recently signed an agreement with CEL to provide TA and credit for a productive uses program, the Bank lacks commitment to the program. If the BFA credit process does not function well, USAID should reconsider its stand against allowing CEL's Electricity Distribution Division (DISCEL) to serve as a lending agent for rural customers. (3) Planned construction of a demonstration small hydroelectric project should be dropped. Hydro technology has already been proven in El Salvador, but existing hydro plants have not been properly maintained. (4) To reduce the financial burden which deters many potential customers from connecting to the system, CEL should assume the costs of service drops and meters. While this is a radical departure from current practice, NRECA deems it necessary in order to bring electricity to the rural poor. Other recommendations are to, inter alia, address the project delays caused by the turnover rate in DISCEL staff and DISCEL's lack of experienced managers, streamline host country construction approval procedures, disaggregate project information by gender, have project trainees prepare course evaluations, conduct a cost-benefit analysis of the productive use demonstrations being conducted by NRECA's mobile unit, and conduct Government-to-Government policy dialogue on the need to create a Public Utility Commission and to re-privatize the electricity distribution system. Lessons learned are as follows. (1) NRECA's Demand Assessment Model provides an objective and equitable basis for countering political pressures in regard to site selection. (2) A commingling of participants from many countries creates a more open training atmosphere and lessens trainee defensiveness against changing practices.