People’s Republic of China: Gansu Clean Energy Development Project

Date: December 2013
Type: Evaluation Reports
Country:
Subject:
Evaluation; Energy
Series: Project Performance Evaluation Reports
Project Number: 34476-013

Description

During the 2001 country programming mission, the People's Republic of China (PRC) requested Asian Development Bank (ADB) assistance for a clean energy development project in Gansu province. This request reflected the evolving priorities of the government’s own strategy in the energy sector, which emphasized improved efficiency, development of renewable energy sources such as hydropower to reduce a heavy dependence on coal-fired power plants, and the need to address severe air pollution in the country’s urban centers.

The investment chosen for ADB support was a 98-megawatt (MW), later upgraded to 102 MW, run-of-the-river hydropower development that formed part of a larger, cascade, hydropower development scheme (700 MW) along the Heihe River in the northwest PRC. The main project objective was to contribute to environmental improvement in Zhangye City in Gansu province by improving access to clean energy. The expected benefits were the supply of a clean, low-cost, source of electricity that would reduce load shedding; improve air quality; and provide a secure electricity supply to small, local townships in the project area. A special feature of the project was its potential to receive significant financial benefits from the Clean Development Mechanism administered under the United Nations Framework Convention on Climate Change.

The project is rated highly successful. It was completed ahead of schedule, within budget, and the main goals were met. A low-cost, clean source of energy has been developed, which has helped improve the dependability of electricity supply in Gansu province. It has also made an important contribution to improving air quality in nearby urban centers by developing a new, clean energy source, which enabled the closure of two heavily polluting, coal-fired generating units. Finally, it provided significant socioeconomic benefits to the small townships affected by the hydro development.

A crucial lesson to have a highly successful project involves strong project ownership. It is also essential for successful implementation. In evaluating project ownership, attention must be given during appraisal not only to investment planning priorities but also to whether counterpart funding has been committed; whether key staff are in place; whether coordination mechanisms across, and within, different government levels are working effectively; and whether institutional capacity exists to address social and environmental issues affecting the project’s long-term sustainability. A particularly positive feature of this operation was the close coordination between municipal and provincial authorities and the implementing agency, Xiaogushan Hydropower Company—reflecting a shared ownership in the benefits of the project.

Contents

  • Basic data
  • Executive summary
  • Introduction
  • Design and implementation
  • Performance assessment
  • Other assessments
  • Lessons
  • Appendixes