Panama : an evaluation of USAID"s alternative energy sources project

Evaluation focused on micro-hydropower (MH) activities, and was based on document review, site visits, and interviews with involved personnel and beneficiaries. Seven MH demonstration projects were added during the project to replace the cancelled Yaviza biomass plant; while compounding an ambitious scope, this change helped achieve the project purpose, as MH is the most developed of the project technologies. Still, the project achieved better quantitative than qualitative results. The target of 40 feasibility studies was met (although the studies were closer to prefeasibility due to methodological flaws). Solar water heating and photovoltaic demonstrations were completed, as was one biogas project; 2 of the 7 MH projects were completed and the other 5 nearly so. However, due to low turbine efficiency, the completed MH projects are producing only 20% of intended output, and their socioeconomic benefits have been limited, due in part to community underdevelopment and the absence of productive-use promotion. (Energy use so far has consisted mostly of household and public lighting; an action plan is proposed for forming cooperatives to provide a management structure and promote productive electricity use at six of the MH projects.) Common design flaws persist, even though the MH projects were built consecutively over 5 years. Still, significant benefits may be realized given limited expenditure of funds and effort on civil works, turbo-generating equipment, and community management structures (e.g., a combined $10,000 investment in material and equipment would be required for the 2 completed MH projects). IRHE staff received extensive training, and while targets for information generation/dissemination and planning were not met, IRHE capabilities were improved in these areas, and the National Energy Commission is drawing heavily on this experience. Reaching maximum institutional benefits, though, would have required greater commitment to activities and more attention to lessons learned. The project shows that: (1) large utilities with experience in large hydropower schemes may not be the most appropriate entities to design and implement MH schemes, especially in developing countries; (2) technology-driven approaches to MH are inadequate - engineering work must be complemented by a decentralized community management structure and productive uses must be either built into a project or actively promoted in conjunction with it; and (3) priority should be given to ensuring availability of specialized TA.