Evaluation of Micro Hydro Program under PNPM

Under World Bank 2012 assistance, National Community Empowerment in Rural Areas project or Program Nasional Pemberdayaan Masyarakat (PNPM-Rural) aimed at assisting villagers located in rural locations to benefit from improved socio-economic and local governance conditions. The program was conducted as Technical Assistance to Government of Indonesia (GoI) and the executing agency for PNPM Rural is the Village and Community Empowerment Directorate (Pemberdayaan Masyarakat dan Desa, PMD) within the Ministry of Home Affairs (MoHA). PNPM Green was a pilot program under PNPM-Rural Program that is designed to further integrate environmental issues into the local community-driven development (CDD) planning process. PNPM Green was only active in selected target locations in Sulawesi and Sumatra Islands and the block grant funding is earmarked to support community investments in ‘green’ sub-projects. About 50% of the block grant funding disbursed through PNPM Green was allocated specifically to finance micro-hydro power (MHP) in selected target locations.

Castlerock’s work in this assignment consisted of the  following activities:

  • Project Mobilisation and data gathering was undertaken at the commencement of the assignment, Castlerock presented the methodology/approach to the PSF team for initial feedback. Our team also consulted National Management Consultant of PNPM Green for their assistance in selecting the sites for field visit, and the Technical Support Unit (TSU) to obtain the Feasibility Study of MHP sites to be visited. The field visit was conducted in 15  MHP sites that have been put into operation between 6 month to 2 years, all over Sumatera and Sulawesi. This covers sites supported by TSU (10 sites) and those without TSU support (5 sites). At the analysis stage, only data from 13 sites were being assessed.
  • Data analysis in this assignment was comprised of financial analysis, economic impact analysis and the evaluation on operation and management. Information on technical. socio-economic, commissioning data and site location of TSU-supported sites were obtained through sites visits as well as readily data available with TSU and NMC. For the selected sites without support from TSU, we liaised with NMC for required data gathering and questionnaire distribution.
  • In conducting the financial analysis, the actual costs and benefits associated with implementing the PNPM green MHP were evaluated based on the data gathered through contacts with TSU and NMC, and through field visits. In addition to the financial cost of MHP itself, cost of in-kind contributions of the technical cost component was considered in the analysis to the extent possible.
  • Economic Impact analysis: Castlerock developed economic models based on data on site location, socio-economic and cost data of the selected sites, as well as the data obtained during the site visit, particularly on the updated information on socio-economic profile of the villages (number of household, and energy cost spent per household) the tariff imposed to the community, number of household connected and actual operation and management cost)
  • Operation and Management Quality Assessment: The assessment of project operation and management quality took into account the actual performance of the MHP scheme, including the project’s operational metrics and on-site management activities, in achieving the target results.