Evaluation

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Evaluation of the Anhui Environmental Improvement Project for Municipal Wastewater Treatment/Industrial Pollution Abatement
Completed: 2005

The Anhui Environmental Improvement Project was the first major initiative of a massive cleanup campaign. It was intended to support the Government's policy and institutional reforms aimed at improving the environment in a sustainable manner and to demonstrate effective and sustainable management techniques and investments for pollution control in Anhui Province, particularly in the Chao Lake Basin.

Consisting of two loans, the Municipal Waste Treatment and Industrial Pollution Abatement, the Project aimed to reduce wastewater discharge to the Chao Lake, and air and solid waste pollution in the cities of Hefei and Chaohu. The Municipal Waste Treatment consisted of two subprojects while the Industrial Pollution Abatement consisted of four subprojects.

Summary of Findings

The evaluation gave ratings to individual subprojects but overall the Project was rated as "successful". It was found to be relevant, efficacious, efficient and less likely to be sustainable.

To a varied extent, the six subprojects have achieved some intended and unintended environmental benefits, as well as financial/economic benefits. The Project was generally implemented smoothly, with moderate delays for some subprojects. It has achieved significant impacts on institutional strengthening of Anhui environmental management and on the operation and maintenance of wastewater treatment facilities, particularly through the four related technical assistance grants.

The positive socioeconomic impact of the Project comes mainly from two sources: (i) preservation of the employment of the project implementing agencies, and (ii) improved quality of life and health for Anhui residents due to the improved environmental quality. Other social and development impacts include the potential positive health impact of water quality improvement, and the impacts on preserving employment for several key state-owned enterprises in Anhui.

Issues

The main issue facing the Project, which continues to have relevance for ADB's current operations in the PRC, is whether and how ADB should support state-owned enterprises to achieve environmental improvement and, at the same time, sound financial and economic returns. Public sector lending has shown its limitations due to the high technological and market risks associated with industrial projects.

Lessons Identified

• At the program (strategic) level, ADB must recognize that achieving synergy between environmental benefits and financial benefits is the best possible scenario as the latter is the basis for sustainable achievement of the former.
• The subproject enterprises should not be forced to choose between environmental benefits and financial benefits.
• At the project level, the project preparatory technical assistance grants had little impact on the actual design of the Project due to various reasons, including poor timing of the TAs and cost considerations.
• ADB needs to reassess its project preparatory technical assistance program in the People's Republic of China and, in the case of continuing such technical assistance grants, take measures to improve its relevance and usefulness.