Evaluation Team

This report was prepared by Mr. Zahid K. KHAN, Public Utilities Consultant under the overall supervision of Mrs. G. HALL-YIRGA, Principal Evaluation Officer, Operations Evaluation Department (OPEV), following their field mission to Ethiopia.

Objective

The objective of this review is to assess the contribution of the Bank’s assistance to the Public Utility Sector of Ethiopia comprising the water, power and telecommunications subsectors. The assessment was carried out for the reviewed operations in the light of policies, strategies and development programs that existed at the time of the interventions. This review helps provide sectoral insights on the Bank’s overall assistance and its contribution to cross cutting issues such as social aspects and gender equality, environment, private sector development, and regional integration. This review is expected to serve as an input for Ethiopia’s Country Assistance Evaluation

Main Lessons

• Access to public utility services in the country is still low. The pace of inflow of private resources is slow. Enhanced enabling environment is required.
   
• In Ethiopia, studies show that the expected bulk sale tariff of electric power supplied from private thermal or hydropower generation are too high to be affordable at retail level since majority of the population are from the low income segment. As such, at least in the short- to medium-term, the Government and donors’ would have to continue financing (with concessionary terms) any new hydropower projects required to supply power to the population at large particularly in rural areas. Participation of the private sector is more viable in large-scale hydroelectric generation projects that also cater to regional demands.
   
• Sustained institutional support based on a comprehensive need assessment study is required to have a substantive institutional development impact. The water subsector in particular needs significant capacity building assistance from the government and donors. The decentralization of the water services to the various regions has resulted in spreading thinly the already limited available skill
   
• In the past, the Bank did not engage proactively in non-lending assistance such as policy and institutional reforms, resource mobilization and aid coordination activities as well as economic and sector works. Its engagement in some of these activities has improved since the opening of Country office. But, it is the view of some of the donors that the Bank with its intimate knowledge of the RMCs should play a more central and proactive role in non-lending assistance such as economic and sector works, resource mobilization and aid coordination activities in Ethiopia.
   
• All the completed projects had faced the generic problems related to implementation delays such as delays in the fulfillment of loan conditions for entry into force and lack of familiarity of procurement and disbursement rules of the Bank, particularly resulting from turnover of staff in the executing agencies.
   
• Bank’s Supervision Summary Reports in SAP system are incomplete and there is backlog in the preparation of Project Completion Reports on the completed projects.
   
• The frequency of Bank’s field missions has improved in recent years but timeliness and effectiveness of field missions could further improve portfolio management and performance on the ground

Main Recommendations

Recommendation(s) to the Bank:

• The Bank needs to continue its assistance in the public utility priority sub-sectors in order to accelerate infrastructure development in the country.

• The Bank needs to invigorate and enhance its non-lending assistance in order to further improve the enabling environment for public/private partnership in the country. This is expected to pave the way for private sector financing of infrastructure projects, particularly those that have an economic advantage in regional spread

• The Bank needs to join hands with other donors to enhance its institutional and capacity building assistance, particularly for the water sub-sector, in order to make the decentralization and institutional reforms effective and sustainable

• There is need to revisit the Matrix for Delegation of Authority so that the Task Managers and Country Office staff will be given adequate decision-making authority for timely decisions and actions. Additionally, there is need to encourage increased visitation of Senior Management, who has the authority and capacity to make higher-level decisions on the ground