final SDC Evaluation Report-final-27-06-24

Swiss Agency for Development and Cooperation SDC
Embassy of Switzerland
Swiss Cooperation Office Pakistan
External Review of Water and Energy Security
Through Microhydel (MHP)
Islamabad, April, 2014

SDC Evaluation Report – 04-14 Page i
Table of Contents
Executive Summary ..........................................................................................................1
a Project Assessment ............................................................................................2
b Expected Impact .................................................................................................3
c Sustainability.......................................................................................................4
d Delays and Impacts on Project Outcomes .........................................................4
e Cross cutting issues............................................................................................5
f Summary of Lessons and Recommendations ...................................................6
g MHPs in Chitral ...................................................................................................8
h Conclusion ..........................................................................................................8
1 Background and Context............................................................................................10
2 Objectives and Scope of External Review.................................................................11
3 Approach and Methodology .......................................................................................11
PART A: ASSESSMENT OF CURRENT PROJECT .....................................................13
4 Project Outcomes.......................................................................................................13
4.1 Technical Aspects.............................................................................................13
4.1.1 Design Considerations/ technical Measurements.....................................14
4.1.2 Energy Generation.....................................................................................29
4.1.3 Summary and Conclusions........................................................................30
4.2 Environmental Aspects .....................................................................................32
4.3 Gender Aspects ................................................................................................33
4.4 Greenhouse Gas Reduction .............................................................................35
4.5 Financial Aspects..............................................................................................36
5 Sustainability of Project Outcomes ............................................................................38
5.1 Financial Sustainability .....................................................................................38
5.2 Institutional Framework and Governance.........................................................41
5.3 Key Stakeholders, their concerns and sociopolitical risks ...............................41
5.4 Summary Conclusion and Recommendations.................................................42
6 Processes that affected Attainment of Project Results .............................................46
6.1 Preparation and Readiness ..............................................................................46
6.2 Ownership .........................................................................................................46
6.3 Stakeholder involvement ..................................................................................47
6.4 Financial Planning.............................................................................................47
6.5 Implementing/Executing Agency’s supervision and backstopping ..................48
6.6 Delays and Project Outcomes ..........................................................................49
Part B: Future Outlook ....................................................................................................51
7 Assessment & Mapping of potential Area(s) in KP and FATA for Microhydels .......51
7.1 Policy Reforms in KPK......................................................................................52
7.2 Relevance of MHPs for Chitral district..............................................................53

SDC Evaluation Report – 04-14 Page ii
7.3 Chitral Electrification Concept...........................................................................53
7.4 Local State and Peace Building........................................................................55
7.5 Hydro-Power in FATA.......................................................................................55
8 Cross cutting Issues...................................................................................................58
8.1 Governance.......................................................................................................58
8.2 Promotion of gender Equity ..............................................................................58
9 Lessons and Recommendations................................................................................59
9.1 Objective and Outcomes ..................................................................................59
9.2 Planning ............................................................................................................60
9.3 Implementation..................................................................................................60
9.4 Operation...........................................................................................................61
9.5 Sustainability:....................................................................................................61
10 Annexes......................................................................................................................63
Annex 1: Terms of Reference........................................................................................63
Annex 2: LogFrame .......................................................................................................71
Annex 3: Women Field Interviews.................................................................................78
Annex 4: LCCA ..............................................................................................................83
Annex 5: Electrification Concept Chitral District............................................................88
Annex 6: Utility Concept ..............................................................................................133
List of Tables
Table 1: Summary of Project Results ................................................................................... 2
Table 2: Capacity and Energy Values for “with” and “without” fixed weir -Pawoor............ 18
Table 3: Capacity and Energy Values for “with” and “without” fixed weir - Harchin........... 22
Table 4: Plant Factor ........................................................................................................... 29
Table 5: Existing Businesses .............................................................................................. 34
Table 6: CDM Revenues..................................................................................................... 35
Table 7: Total Project Budget.............................................................................................. 36
Table 8: Total SDC Project Budget..................................................................................... 37
Table 9: LCCA Summary – Pawoor.................................................................................... 39
Table 10: LCCA-Summary – Harchin ................................................................................. 40
Table 11: Micro-Hydels in FATA ......................................................................................... 56
List of Figures
Figure 1: Cost development per capacity and head........................................................... 14
Figure 2: Powerhouse site - Parwoon................................................................................. 15
Figure 3: Catchment Area – Parwoor ................................................................................. 16
Figure 4: Flow Duration Curve - Parwoon........................................................................... 17
Figure 5: Annual energy Generation – “with” and “without” fixed weir ............................... 18
Figure 6: Powerhouse site – Raman-Harchin..................................................................... 19
Figure 7: Catchment Area – Raman-Harchin .................................................................... 20
Figure 8: Flow Duration Curve – Raman-Harchin............................................................... 21
Figure 9: Annual energy Generation – “with” and “without” fixed weir - Harchin ............... 22

SDC Evaluation Report – 04-14 Page iii
Figure 10: Transmission System - Parwoor........................................................................ 26
Figure 11: Transmission System – Raman Harchin........................................................... 27

SDC Evaluation Report – 04-14 Page iv
ACRONYMS
AEDB Alternative Energy Development Board
AKRSP Aga Khan Rural Support Programme
BOO Built, Own and Operate
BOOT Built, Own, Operate and Transfer
CER Certified emission reductions
CDM Carbon Development Mechanism
DC District Commissioner
EPC Engineering Procurement Contract
CHF Swiss Franken
FATA Federal Administrated Tribal Area
FATA-DA FATA Development Aurhority
FRDP Fata Rural Development Programme
GB Gilgit-Baltistan
GHG Greenhouse Gas
NGO Non-Governmental Organization
O&M Operation & Maintenance
KPK Kyber Pakhtunkhwa
LCCA Life Cycle Cost Analysis
LSO Local Support Organization
MDTF Multi-Donor Trust Fund
MHP Micro/Mini Hydropower
PECRET Pakistan Engineering Center for Renewable Energy Technology
PHP Pakistan Hindukush Programme
PKR Pakistani Rupees
SDC Swiss Development Cooperation
SPC Solar Pumping System
SRSP Sahard Rural Support Programme
SSL Solar Street Lighting
TOP Terms of Partnership
TOR Terms of Reference
VC Village Council
VO Village Organisation

SDC Evaluation Report – 04-14 Page v
WO Women Organisation
Exchange rate: 1 USD = 100 PKR
ACKNOWLEDGMENTS
This report was prepared with invaluable knowledge and ground support from a diverse group
of stakeholders. The authors are grateful to SDC and AKRSP staff for furnishing relevant
material on time and for facilitating field visits. The report has benefitted immensely from the
knowledge and views of project participants and ultimate beneficiaries. Support and technical
assistance provided by professional organizations and experts in both public and private
sectors are greatly appreciated. However, the contents of this report are based on the
findings of the review team and do not necessarily reflect the views or policies of SDC or
AKRSP.

SDC Evaluation Report – 04-14 Page 1
EXECUTIVE SUMMARY
This report presents the findings of the External Review of the ‘Water and Energy Security
through Microhydels’ (MHP) Project in Chitral (two MHPs in Yarkhun and Laspur valleys),
hereafter called the ‘Project’. The review was carried out by INTEGRATION, Energy and
Environment (pvt) Ltd under a contract from SDC. An overview is provided below.
MHP Features Powoor Harchin
1 Households (nos) 1.300 1.140
2 Installed Capacity (kW) 800 500
3 Assumed average Plant Load Factor ( %) 60 60
4 Estimated annual demand (GWh/a) 1.682 1.051
5 Productive Uses and Comercial (GWh/a) 252,3 157,7
6 Private Households and Services (GWh/a) 201,8 126,1
7 Average Tariff rate (PKR/kWh) 5 5
8 Total Investment Cost (mill. PKR) 130,15 100,35
9 Total O&M over 20 years (mill. PKR) 41,64 32,114
10 Energy production cost (PKR/kW/h) 0,54 0,67
11 GHG emission reduction (tCO2 ) 21 years 79.821 49.896
Source: Green Alternative Power (GAP), the EPC contractor of both projects; ref to
chapter 4.1.1.2. The investment figures are unrevised.

a Project Assessment
The project implementation has been delayed by more than two years. Table 1 provides a
snapshot of the project results, as of April 2014.
Table 1: Summary of Project Results
Outcome Indicator Achievement Remarks
1. Energy and
water security
for the
population
800 kW MHP Pawoor
and 600 kW MHP
Raman Harchin
successfully constructed
and transferred to the
community.
Two community based
power utility company
established and
successfully operating
and maintaining the
projects
About 80% of
civil work
completed
Two utility
companies
established
and
registered
Remaining
works seem
difficult to be
realised within
the remaining
budget
Arrival of
electromechanically
equipment is expected by
the end of May; which
seems not very realistic
Few adjustments of civil
works required
Re-design of T&D system
and inclusion of distribution
system including house
connections required
additional funds are required
for completion
No clear understanding of
how demand will develop
due to missing data
Operation & Management
needs to be outsourced;
respective decisions are to
be taken and enforced.
2. Reduced
pressure on
forests
Enough electricity is
generated and supplied
from the power houses
The electricity
generated is used as
advised by the
engineers of AKRSP
Load shedding and
management adopted
by the community with
social harmony
NA Communities are expecting
sufficient amount of
electricity to be used for
cooking / heating.
Positive impact expected on
agro-forest cover from
reduced consumption of fire
wood, which needs
monitoring by the
communities jointly with
AKRSP
3. Reduced
workload on
women
The households using
electric appliances for
heating, cooking and
washing.
NA Peak load management
plan needed to make the
optimum utilization of
electricity;
No clear vision on
possibilities for households
to afford additional
appliances
Cooking and heating create
additional costs, which may

be partly (?) recovered by
respective savings
Expected consumption
figures will require clear load
management schedules
4. Income and
enterprise
from
diversified
and value-
added
livelihoods
The communities
trained and capacitated
for enterprise and
business development
Potential entrepreneurs
identified, trained and
linked with micro
finance and other
supporting windows
NA Limited natural resources
(especially in agriculture),
low skills and limited access
to financing hamper the
expected productive use;
No budget provision for
respective support
measures available.
However, availability of
sufficient electricity is
expected to support new
enterprises
5. Carbon income
and reduced
emissions
Standard UNFCCC
record keeping
maintained at the
project site, regional
office Chitral and head
Office Islamabad.
NA Record keeping systems
need to be established in
the two power station;
Due to drastically reduced
CER prices, CDM benefits
are almost one quarter of
the originally estimated
figures
b Expected Impact
The project’s true impact can only be measured some 5 years after the final installation of the
generators and commissioning of the two MHPs (approx. from 2020) in an ex post facto
evaluation mission. Based on current status, the following observations are made:
After the envisaged completion of the investment phase in 2014, the project is
expected to supply 1,300 households (about 11,700 people) at Pawoor and 1140
households (about 10,260 people) at Raman Harchin with electric power of high
quality and reliability.
The round the clock supply of sufficient electricity can be used for more options than
only lighting purposes, resulting in increased productivity at the household level and
reducing the workload in rural households, particularly of women. It is expected that
stable electricity will contribute to improved household education, health, awareness
levels, income-earning opportunities of which women benefit more than men.
The extent to which these impacts are being realized depends on factors like
affordability of electricity (tariffs); available savings for buying of additional household
appliances, additional savings (reduced purchase of fuel wood, kerosene, CNG, etc.)

available for cooking and heating; functionality and acceptance of the required
demand side management schedule (reduction of peak load).
1
At the village and valley levels, the project is expected to support increases in income
and employment opportunities by allowing people to undertake micro and small level
economic enterprises in a range of sectors at the village and higher levels
2
. To which
extent and within which time horizon is due to lack of data not clear.
Moreover, it is expected to increase the leisure/productive/ study hours, especially for
women and children. Another expected benefit of electrification is enhanced access to
information and awareness through the use of a number of means of information
technology (supposing that respective devices are already available or can be
purchased by using available household savings).
Based on the evaluation of previous MHPs in Chitral (C. Maier, 2007), which were
substantially smaller than the two reviewed here, the overall impact of the project over
a period of 20 years is expected to be significant in terms of reducing the number of
people living under poverty line, social development, enterprise, trade and commerce
related benefits.3
c Sustainability
Based on achieved project’s assumptions and the existence of a functional and professional
working utility management, the expected revenue from tariff, CERs, new productive uses,
and savings in the cost of fuel-wood will contribute to the sustainability of the project
outcomes (see Annex 4) in the medium to long-terms (after 5-7 years from project
commissioning).
Within the first years of operation less income and resulting deficits (especially with respect to
cash flow and considering the repayment of loan and interests) are to be expected and to be
considered in the tariff system to be elaborated.
Financial planning and revenue projections, which are based on 60% of plant load from the
first year of operations, are most probably overestimated, which may contribute to liquidity
problems and, among others, require a longer period to repay the loan to the Acumen Fund
(AF) than the current 10-year as planned. Therefore, some revised cash budget is urgently
called for, and needs consultations with the project’s donors.
d Delays and Impacts on Project Outcomes
The original commencement of operation was planned for December 2013 and has been re-
scheduled to end of June 2014. This seems no longer realistic. With no further delay, full
operation may be envisaged for end of October 2014.
Late decision to go for higher quality electromechanical (E&M) equipment led to re-design of
important structures (e.g. powerhouse, tailrace, penstock) and late start of the corresponding
international procurement. The time required and possible delays involved in international
procurement appear to have been substantially underestimated by AKRSP as compared to
1
All of these aspects need to be investigated, discussed with the beneficiaries and condensed in a final operation concept, prior
to commencement of operation.
2
Communities are organized into village and women’s organizations (V/WOs), with substantial savings of their own, and access
to microfinance from the First Micro Finance Bank (FMFB), jointly owned by AKRSP, Aga Khan Fund for Economic Development
(AKFED) and International Finance Corporation (IFC)
3
http://www.geo.fu-berlin.de/geog/fachrichtungen/anthrogeog/zelf/Medien/download/OccPapers33_Maier.pdf?1373748625

the local procurement. The same is valid for other parts of the project (e.g. transmission &
distribution).
Also the time required for organizing and streamlining of the complex investment project and
financing structure with different funding sources (grants, loan, CDM, community contribution)
was underestimated. In addition, donor funds were made available with almost 6 months
delay, resulting in an almost one year delay in construction due to upcoming winter.
During field visits, the community stakeholders expressed their concern that these delays
have affected their morale and also increased the costs and risks for them. They also stated
that they have delivered on their part of the deal and completed tasks assigned to them
according to the schedule, which has also been affected by delays in tasks assigned to
AKRSP. Therefore, they expect AKRSP to take responsibility for the additional risks and
costs, resulting from changes to the initial planning.
Although the delays are considerable and have increased the initial costs of the project, it will
not have a significant impact on the achievement or under achievement of the final project
outcomes or sustainability:
Due to missing time lines in the Logframe, completion on time or with delay has no
influence on the on results and outcomes; the expected impacts will be just also
delayed
What influences the results and sustainability are design specs, underlying
assumptions of benefits, capacity and quality of work, etc., which remain the same
Whereas economic factors like project costs, repayment of loans, etc. are influenced
by delays in project implementation
One positive outcome of the delay is that AKRSP has still time to collect essential data and
information which are essential for the formulation of a sound operation and management
concept.
e Cross cutting issues
Gender equality aspects were found to be strong in project participation. Women are
included in the governing Boards of both MHPs, which are registered as legal companies or
Community based Electricity Utilities (GENCOS/DISCOS). The project outcomes are
intended to be more favorable to women and children, in terms of reduced workload,
opportunities and extra hours for social, economic and educational activities. However, to
support the general statements collected during the field visits and meetings respective
baseline surveys and impact monitoring should be implemented and included in the operation
concept.
The community ownership of the project is broad, facilitated by strong involvement of VOs/
WOs and LSOs, and equity participation by over 90% of the project beneficiaries. Community
participation in project implementation and management has been formalized through the
creation of legal utilities as described above. The decision-making processes are democratic,
transparent and participatory.

f Summary of Lessons and Recommendations
Lessons/ Findings:
Project implementation is considerably delayed which could have been avoided
through comprehensive planning at the beginning
The expected impacts (e.g. reduce of fuel wood, productive use, women’s work load,
health) will be most probably realized to a certain extent, but with respective delays
and to an unknown level.
A quantification of the impacts would require respective surveys and data collection at
the two project sites which hasn’t been done yet.
Another factor strongly influencing the level of impact achievement is the future
operation & management system which hasn’t been developed yet.
The economic benefits in terms of growth in enterprise development will be slow in
initial years requiring supplementary actions; funds for supporting measures should be
made available within the project.
The equity and ownership of the project is high. All stakeholders have an interest in
continuing and sustaining the project gains after completion
The project also meets CDM objectives, but carbon income will be roughly one-
quarter of the original estimates
An additional outcome that is not specified in the ProDoc is creation of equitably
owned economic assets in the form of two Utilities/ companies, and formalizing “new
commons”.
Planning:
The selection of site should have been based on available development concepts or
plans or if not available on defined priorities supporting the achievement of the overall
project goal
Project planning should also consider complementary operations and funds to protect
the new installations and infrastructure and to mobilize local economic development
by means of stable supply and productive use of electricity.
The project planning did not adequately anticipate possible delays in implementing a
technically and financially complex project
There is a lack of clarity as to what technology to use and how much to pay, which
ultimately cost the sponsors and beneficiaries more money and time than originally
envisaged, besides delaying project results and outcomes
Once the issues of technical and financial threshold were resolved, necessary data
and standards were lacking, which led to some technical omissions, such as gaps in
the design of civil works and T&D
The project costs are low compared with international experiences which may
compromise the quality to the system and puts additional burden on the O&M
(transfer of investments to operation costs).
Implementation:
For construction, the project has used a mixed approach of community management
and Engineering Procurement Contractor (EPC), which may have reduced the cost,
but it also potentially compromises the construction quality and risks reducing project
life
Key calculations and construction designs are missing for some elements, including

time-series hydrological data, weir, penstock, power house, load distribution during
peak-load period, and T&D
Changes in design caused considerable delays in project implementation
Operation:
O&M guidelines and concepts are fluid at best, and technical services and required
skills may not be available in these remote valleys of Chitral, which often remain cut
off from urban centers during winter
Power stations of such size are not manageable by the community, and they require a
professional mechanism which need to be established
In the past community users have been paying very low flat rate tariffs for the
provision of small quantities of energy, which needs to change if these utilities shall be
sustainable
The revenues must be sufficient to repay the loan and interest, which will also result in
higher tariffs (at least during the re-payment period of seven years).
Provisions in the form of bank savings should be made for larger repairs and
replacements.
Sustainability:
The sustainability of the project outcomes are a critical issue. The sustainable
operation solely depends on the collected revenues created through the sale of
electricity. The underlying assumptions (e.g. plant factor, sold energy, tariff) are
themselves based on secondary assumptions (e.g. development of productive use,
availability of household savings to purchase equipment, additional savings to pay the
electricity bill)
4
for which – except general and global statements – no evidence could
be provided.
In addition, the physical condition of the schemes is another important factor for a
sustainable operation. The –compared with international standards – lower
implementation standard will create higher operational costs due to higher
maintenance and repair load and earlier replacements which need to be considered.
Finally, the Operation & Management form will have significant impacts on the
sustainability.
Key recommendations:
The expectations from the project must be revisited, redefined, and made more
realistic to achieve for all partners. Also, projections of tariff revenue and O&M costs
need revision, based on an initial lower load factor of 20-30% (not 60%). Based on
these new calculations, tariff rates and loan repayment schedule need to be adjusted.
The project design should be revisited and missing elements identified in the report
incorporated as much as possible, including a) construction of an engineered weir, b)
reassessing the capacity of step-down transformers and T&D lines and, c) re-
designing load distribution system.
There are concerns on the part of the community at both locations with regard to the
functioning of the plants according to the technical specifications, and projected
generation of electricity in the anticipated quantity and quality, and revenue
generation. The current terms of partnership between AKRSP does not address all
44
There is even a third level: development of productive use depends on availability of entrepreneurship, access to financing,
skilled labour, access to market, adequate infrastructure, etc.

these concerns. The recommendation of this report is to revise these partnership
agreements and build in elements and commitments that are typically found in a build,
own, and operate (BOOT), or BOO project agreement.
O&M system needs to be critically reviewed and possibly revised. A useful approach
will be to outsource O&M functions of both Utilities, and other MHPs through a service
or leasing contract, ensuring professionalization of O&M functions of installations
across several villages.
g MHPs in Chitral
The MHP landscape is evolving in Chitral and the larger Malakhand division, largely as a
result of the acceptance of the decentralized community based approach popularized by
AKRSP, and later taken up by SRSP and other support organizations.
However, the socio-economic development in Chital lacks a comprehensive district or
provincial development strategy which would identify priority areas to be supplied, taking into
account the structure and growth of the population, the prospects of economic development
and potential social conflicts amongst the ethnic groups.
Although almost all sector programs launched in various districts of KPK do have economic
growth and poverty alleviation objectives, linked with basic electricity supply schemes, but
they are largely targeting just one aspect, which is physical infrastructure of MHPs, and that
too, at very basic standards.
Without a sound electricity development strategy and its integration of other sectors, isolated
MHP interventions will have lesser impact and no synergy effects. Further planning and
coordination activities should, therefore, be undertaken as part of an integrated rural
electrification plan.
In the context of Chitral, small-scale hydropower could also be used to strengthen local
governance. At the local government level, hydropower can be a key source of local revenue,
creation of equitably owned assets, a fundamental economic driver, and a readily available
adaptation tool. MHPs in Chitral are seen as an innovation on traditional practices of common
property management, and accepted as ‘new commons’. They foster cooperation and
mitigate conflict over common resource ownership and management.
h Conclusion
Further support in rural electrification by means of MHP is worthwhile and necessary in view
of improvement of living conditions in general and the economic development in particular, of
the rural areas in Chitral
Based on the identified fields of priority and socio economic potentials possible fields of
intervention are:
Contributing to the electric power supply of central places (high population density,
social infrastructure, administration, economic potentials) or places of high economic
potentials through the construction of new / improvement of existing power supplies.
Main targets would be Garamchashma and Mulkhow contributing to the supply of
regions with high population density and high to medium economic potentials through
the upgrading and interconnection of existing hydropower stations to small local or
regional grids. In this context the establishing of small utilities that buy the power from
the community owned power stations and distribute and sell it to the customers would
be an important aspect.

Rehabilitation and upgrading of existing small power stations in the rural area for
basic power supply. As stated in the GIZ report (MHP situation in Chitral – 2013) and
in the attached District Electrification Concept (Annex 5) a considerable number of
MHPs are out of order or operate at very basic level. These interventions would
address basic needs and the improvement of living conditions of people living in rural
areas without larger economic potentials and out of reach of any grid extension plan.
These interventions can be implemented as single programme as an important chain in the
overall development and resulting improvement of the living conditions in the district and will
be one important.

1 Background and Context
This report presents the findings of the External Review of the ‘Water and Energy Security
through Microhydels’ (MHP) in Chitral (two MHPs in Yarkhun and Laspur valleys), hereafter
called the ‘Project’. The review was carried out by INTEGRATION, Energy and Environment
(pvt) Ltd under a contract from SDC.
The purpose of this review is to assess the relevance, effectiveness, efficiency, sustainability,
and cost effectiveness of the Project design, planning and implementation, in relation to local
context, objectives and outcomes. Specifically, the review assesses implementation
performance and results, factors affecting achievement of these results, and sustainability of
Project outcomes. It also traces the evolution of MHPs in Chitral, in terms of institutional
systems, technology development, and financing, ownership and business models, as well as
future potential.
The methodology used was desk research and field observations, combining qualitative and
quantitative measurement techniques, supplemented with interviews and collection of data
sheets from project records, and corroborated with information obtained from each MHP site.
The study was carried out from March 15 to April 30, 2014.
The brief background of the project is as follows:
Under its 'Pakistan Hindukush Programme (PHP), SDC in April 2011 signed a financing
agreement with Aga Khan Rural Support Programme (AKRSP) to implement ‘Water and
Energy Security through Microhydels Project’ in Chitral, KPK, to contribute to PHP. The
objective of PHP is socio-economic development of the respective communities through
provision of electricity for domestic purposes, and utilization of energy for community based
rural enterprises The project’s layout includes building of two MHPs in the villages of Pawoor
and Raman Harchin in Yarkhun and Laspur valleys of Upper Chitral.
As per the original plan, the project was to be completed during the period April 2011 to
March 2013. However, due to delays in the procurement of revised electromechanical
equipment, evaluating corresponding bids from international manufacturers and suppliers and
extended negotiations led to an extension of the initial project schedule.
As per the revised schedule agreed between SDC and AKRSP, the final project completion
date is set for September 2014. This extension was linked to a supplementary budget support
of CHF 400,000 - to pay for higher quality costs.
The SDC budget increased to an equivalent of PKR 158,483,716. The total project budget so
far amounts to 238,552,134 PKR.

2 Objectives and Scope of External Review
The purpose of this external review is to provide an independent, comprehensive assessment
of project results, their sustainability, and future outlook for similar initiatives in the context of
Chitral and the larger Hindu Kush region.
A specific objective is to assess project results (Outcomes) — whether the project is on
track to deliver the expected project outputs, objectives and stated results. This includes
physical and financial progress, performance and achievements against project targets, and
factors and processes limiting the achievement of results.
As this is a project still under implementation, the review provides best estimates on the likely
realization of project outcomes and objectives, such as intended social, economic and
environmental services; equitable sharing of benefits among all the beneficiaries, including
households, especially women and children.
The second key objective of the review is to assess project sustainability. It includes
assessing the relevance and appropriateness of project’s technical design, the quality and
durability of the electromechanical equipment, and the civil works; financial resources and
revenue streams to pay for O&M costs, and participatory and cost-benefit sharing systems
and institutional arrangement that are likely to sustain the Project Outcomes beyond project
completion and commissioning.
A third objective of this external review exercise is to look at the evolving context of Chitral
and the wider region, and evaluate the scope and prospects for extending and/or upgrading
rural electrification by means of similar micro initiatives, and to identify opportunities for
institutional reforms, scaling and integration of community-level energy initiatives with larger
government and private sector plans. To this purpose the study was asked to map current
trends in MHP development in Chitral and Malakhand Division.
As the two MHPs are also part of a Clean Development Mechanism (CDM) project
implemented by AKRSP in cooperation with Pakistan Poverty Alleviation Fund (PPAF), the
review also touches upon the likely impact of the project on GHG emissions and related
issues, including reduced deforestation..
Finally, the review has identified and articulated the lessons learned from the project and
made recommendations both to overcome obvious deficiencies and to strengthen
opportunities of rural electrification in Chitral..
3 Approach and Methodology
Given the multifaceted scope of the assignment, a multi-layered methodology has been
adopted for this research. The methodology focuses on assessing the appropriateness of
project’s design and other technical parameters to the context of Chitral; social, economic
and environmental relevance, management effectiveness; original and evolving rationale;
implementation performance and limiting factors; coordination with public sector players and
institutional arrangements, quality of beneficiary participation, including gender and social
inclusiveness; financial management, and specificity of project results and benefits sought
and its likely post-project impact and sustainability. For measuring progress and achievement
of outputs, outcomes and results, the methodology uses targets and indicators provided in
the Logframe included in the revised Financing Agreement between AKRSP and SDC (Annex
2).

Information for this study was gathered through document review, group and individual
interviews and site visits. More specifically, the review results are based on the following
sources of information:
Review of relevant reference/policy documents (SDC/KPK and FATA
Government/Federal Government/donor papers, exchange of letters, Bid Document,
Engineering Design, minutes of Steering Committee meetings and relevant policy
decisions).
Structured interviews with relevant staff in the field, regional and head office, i.e.
Chitral Regional Programme Manager, Programme Coordinator based in Islamabad,
representatives of Village and Women Organizations (VO/WOs) in the two project
locations, Project Committees and beneficiaries, etc.
Field visits to Chitral and project sites in Yarkhun and Laspur Valleys
Presentation of the preliminary findings to SDC and initial feedbacks,
Presentation of the draft report and obtained feedback.

PART A: ASSESSMENT OF CURRENT PROJECT
4 Project Outcomes
The project envisages to achieve five specific results or outcomes, as detailed below, by
means of constructing two MHPs and building support infrastructures, including distribution
lines and link roads, where necessary, establishing of an adequate operation and
management structure and to arrange respective financing.
The expected annual energy generation is indirectly specified at being >4.2 GWh for Pawoor
and >3.15 GWh for Raman Harchin (Logframe: Indicator 1 of Output 2.1).
Outcome 1: Energy and water security for the population
Indicators:
i. 800 kW MHP Pawoor and 600 kW MHP Raman Harchin successfully
constructed and transferred to the community.
ii. Two community based power utility company established and successfully
operating and maintaining the projects
4.1 Technical Aspects
The following sections provide a description of the design and physical implementation, which
took place so far and the resulting impacts on sustainable operation. Because the civil works
are not completed yet, not all structures could be inspected and the powerhouses were also
not operational.
The quality of design and construction is directly correlated with available funds. Expecting
international or European standard on national Pakistani cost basis will inevitably lead to
unmet expectations, frustration, and problems among the stakeholders.
Recent investigations (e.g. compiled and summarized in: PPAF Manual & Guidelines No 1:
MHP Implementation Aspects, 2013) on cost for MHPs built on international standards clearly
indicate that:
Specific cost of small stations is in general varying between 1,300 and 8,000 USD/kW.
India and the Asian region as a whole, show specific cost of 800 to well above 4,000
USD/kW.
Power stations of low heads and of smaller capacities show significant higher specific
costs (Figure 1).

Figure 1: Cost development per capacity and head
Source: RE technologies: Cost Analysis series; Volume 1: Hydropower; IRENA, June 2012
Considering the above figures and the specific situation in the project area (e.g. remoteness,
lack of local skilled labor, long transport ways) and the envisaged sizes of the plants a
specific investment of about 3,000 USD/kW (power station only) seems to be a realistic
approach
5
.The two stations evaluated in this report show the following cost figures:
Pawoor: 1,660 USD/kW (1.33 mill. USD in total)
Harchin: 2,600 USD/kW (1.0 mill USD in total).
The available budget is about USD 1.6 m below the expected minimum value of 3,000
USD/kW.
Consequently, the following findings and conclusions are drawn in the light of these budget
limitations.
4.1.1 Design Considerations/ technical Measurements
4.1.1.1 Site Selection and Hydrology
Site selection was based on topographic features, available water flow and the remoteness to
the next load centers. No other aspects, such as economic potential, availability of natural
resources or raw products, or detailed estimates on the expected consumption of energy by
different consumer groups: households, business facilities, administration, social institutions
were taken into consideration.
No long-term discharge measurements are available for both sites. Calculation of design
discharge was based one single discharge measurements taken during low flow season.
However, for power stations of this size, setting of design discharge should be always based
on reliable flow data taken at intake site. In absence of on-site measurements data obtained
5
T&D not included; first cost estimates based on adjusted designs are currently under preparation
PawoorHarchin

Figure 2: Powerhouse site - Parwoon
Source: Google Earth
from gauging stations in neighboring catchment areas could have been used for calculation of
discharge.
Modeling of flow data by using the catchment area ratio method has been conducted within
the framework of this report. The results are presented below.
Besides, the question of minimum discharge, the maximum discharge or flood flow, is another
important information for the design of the intake, powerhouse and tailrace structures
(protection of structures against flooding). Especially, the intake area where stream section is
often narrow floods may easily overflow the intake structure and the first part of the headrace
canal and create shutdowns and damages.
Flood protection structures had been designed by using existing flood marks and information
gained from the local population. Both these sources of information are important but not
sufficient to estimate the flood flow. The resulting flood values should have been confirmed by
using hydrological data and empirical flow equations, which are available for northern
Pakistan.
a Parwoor
The Parwoor site is shown in Figure 2. Site selection, with respect to topography, resulting
head and stability of structures, was found to be reasonable. The comparable steep slope
provides high head within a short distance; powerhouse and tailrace canal are safely located
about 7 m above flood watermarks of the receiving stream. With respect to geology high
sediment rates are to be expected. The design foresees the construction of a natural weir,
which is unlikely to capture and convey – especially in dry season – all stream flow into the
power canal with resulting less energy generation during these times.
intake
Headrace canal
forebay
powerhouse

The Parwoor catchment area is shown in Figure 3. The size of the catchment area is
120 km²; the design discharge is given at 0.701 m³/s.
The flow duration curve resulting from the modeling of 11 years daily flow data from Miragram
no 2 gauging station together with the design discharge is presented in Figure 4.
Figure 3: Catchment Area – Parwoor
intake

The results indicate that with the current design of a natural weir the power station will
generate less energy during the winter season:
For an average year the power station will operate on 50 days at about 90% part load,
reducing the max output to about 723 kW. During dry years the minimum flow will be
considerable lower with resulting higher number of days and less capacity.
The planned natural intake can divert at best 50% - 70% of the stream flow during dry
season. Most of the water will flow subsurface and percolate beneath the intake
structure. In this case, the number of days with part load may range from 155 to 182
days, which is almost 5 to 6 month per year. During about 60 days available water is
below 50% of design discharge, which may even result in shutdown of power station.
Monthly generation figures “with” and “without” an engineered weir and assuming the
expected 60% plant factor for both cases (Indicator 1 of Output 2.1) are compiled in Figure 5
6
;
total annual figures in Table 2.
6
Based on 60% plant factor, modelled daily flow data and 30% percolation rate
Figure 4: Flow Duration Curve - Parwoon
Source: own compilation
0 50 100 150 200 250 300 350
Streamflowm³/s
days
Flow Duration Curve Pawoor

Table 2: Capacity and Energy Values for “with” and “without” fixed weir -Pawoor
Month
Mean
discharge
With Without
m³/s kW MWh m³/s kW MWh
1 0,74 796 353 0,5 588 247
2 0,70 795 316 0,5 556 221
3 0,68 772 341 0,5 540 239
4 0,93 796 344 0,7 739 319
5 2,52 796 355 1,8 796 355
6 5,84 796 344 4,1 796 344
7 12,34 796 355 8,6 796 355
8 13,20 796 355 9,2 796 355
9 6,37 796 344 4,5 796 344
10 2,28 796 355 1,6 796 355
11 1,27 796 344 0,9 796 344
12 0,99 796 355 0,7 787 351
Total 4.161 3.830
Source: own compilations; based on plant factor: 60%; modelled daily average flow data
Based on a tariff of 5 PKR/kWh, the difference of about 330 MWh represents a lost income of
about 1.65 mill PKRs or about 16,500 USD per year.
The available capacity would decrease by about 200 kW during the winter months.
Flood Flow
With regard to flood flow, the calculated Q100 amounts to about 443 m³/s which has to be
passed through the river cross section at intake and tailrace side with no impact on the
structures or respective flood walls are to be constructed.
Figure 5: Annual energy Generation – “with” and “without” fixed weir
MWh
month
Annual Energy Generation - Pawoor

Conclusions/Recommendations:
The site selection with respect to topography, geology, etc. is adequate to the capacity of the
station. The general lay-out is – considering the installation of a fixed weir – adequate.
With respect to water availability the situation should be improved by constructing of a fixed
weir at the intake.
Flood flow protection measures should be recalculated and if necessary adjusted.
To control validity of the modeled discharge data a flow measuring station should be installed
at the powerhouse site with daily readings of height and monthly readings of flow.
To control validity of the modelled discharge data a flow measuring station should be installed
b Raman-Harchin
Originally the power station as planned to be built in the main Laspur valley. Due to social
problems the entire project had to be relocated in a western tributary to Laspur valley. The
new Raman-Harchin site is shown in Figure 6. The site with respect to topography, resulting
head and stability of structures is reasonable. The powerhouse is well protected by the hill
ridge; slopes seem to be stable and able to bear the load of the structures. The river slope is
slightly lower compared with Parwoor, thus the length of the headrace canal is with about 1.3
km two times longer and the resulting head with 77.8 m about 58 m lower. Powerhouse and
Figure 6: Powerhouse site – Raman-Harchin
intake
Headrace canal
forebay
powerhouse

tailrace canal are safely located about 8 m above floodwater marks of the receiving stream.
The intake is designed as natural intake. With respect to the geology high sediment rates are
to be expected.
The Raman-Harchin catchment area is shown in Figure 7. The size of the catchment area is
210 km²; the design discharge is given at 0.82 m³/s.
The flow duration curve resulting from the modeling of 11 years daily flow data from Miragram
no 2 gauging station together with the design discharge is presented in Figure 8.
Figure 7: Catchment Area – Raman-Harchin
intake

The results indicate that with the current design of a natural weir the power station will
generate less energy during the winter season
The calculated minimum flow of about 1m³/s is (at least during average years) above
the design flow of 0.82 m³/s. Thus, the power station will be able to operate during
365 days on full capacity.
The planned natural intake can divert at best 50% - 70% of the stream flow during dry
season. Stream water will flow subsurface and percolate beneath the intake structure.
In this case, the power station will operate on part load for about 120 to 60 days,
which is almost 2 to 4 month per year.
Monthly generation figures “with” and “without” an engineered weir and assuming the
expected 60% plant factor for both cases (Indicator 1 of Output 2.1) are compiled in Figure 4
7
;
total annual figures in Table 3.
7
Based on 60% plant factor, modelled daily flow data and 30% percolation rate
Figure 8: Flow Duration Curve – Raman-Harchin
0 50 100 150 200 250 300 350
Streamflowm³/s
days
Flow Duration Curve Raman Harchin

Table 3: Capacity and Energy Values for “with” and “without” fixed weir - Harchin
Month
Mean
discharge
With Without
m³/s kW MWh m³/s kW MWh
1 1,24 554 247 0,9 554 245
2 1,17 554 223 0,82 554 220
3 1,13 554 247 0,79 534 247
4 1,55 554 239 1,1 554 239
5 4,21 554 247 2,9 554 247
6 9,73 554 239 6,8 554 239
7 20,56 554 247 14,4 554 247
8 22,01 554 247 15,4 554 247
9 10,61 554 239 7,4 554 239
10 3,79 554 247 2,7 554 247
11 2,12 554 239 1,5 554 239
12 1,65 554 247 1,2 554 247
Total 2.911 2.905
Source: own compilations; based on 60% plant factor and modelled daily average flow data
The difference is with only 6 MWh acceptable.
Figure 9: Annual energy Generation – “with” and “without” fixed weir - Harchin
MWh
month
Annual Energy Generation
Harchin

Flood Flow
With regard to flood flow, the calculated Q100 amounts to about 586 m³/s which has to be
passed through the river cross section at intake and tailrace side with now impact on the
structures or respective flood walls are to be constructed.
station.
station. The general lay-out is – considering the installation of a fixed weir – adequate.
With respect to water availability and later maintenance works the situation should be
improved by construction of a fixed weir at the intake.
Flood flow protection measures should be recalculated and if necessary adjusted.
To control validity of the modeled discharge data a flow measuring station should be installed
4.1.1.2 Organization of Works
Design and construction was appointed to a local EPC contractor (Green Alternative Energy;
GAP) who was responsible for design and implementation of the entire project. The
construction was organized and implemented in close cooperation with the local
communities. The EPC contractor GAP, provided design and site engineers. Due to the
ongoing winter break no site engineer could be met on site.
4.1.1.3 Design of Civil Works
The construction of the stations follows in principle the common design of MHPs in the area.
Information on discharge and floods was taken from the local people, plans, drawings,
structural and hydraulic calculations are of very basic quantity and quality. The design of T&D
comprises of sketch maps showing load centers, transformer sizes and principle conductor
alignment. Voltage drop, short circuit calculations are not available as well as overall and
detailed system sizing.
The general design work is inadequate for power stations of such size. However, due to the
delay in construction, some of the basic system calculations could still be done, at least for
the T&D system.

4.1.1.4 Civil Structures
Due to the lack of adequate design documents
8
at AKRSP, only those civil structures, which
are already constructed, could be reviewed.
The constructed parts (gravel trap, sedimentation basin, headrace canal, partly forebay)
provide in general a good impression. They are constructed by applying local technologies
and standard designs. Their functionality with respect to sedimentation rate and volume,
discharge volumes, etc. could not be evaluated at this stage of construction.
As already briefly mentioned above, there are no fixed permanent intake structures in the
form of well-adapted weirs, which is unusual for power stations of this size. Beside the above-
mentioned higher risk and disadvantages of lower operational time and annual energy
generation, it would inevitable increase the operational costs due to higher maintenance
costs and necessary realignment works after floods. Thus the economic performance of the
plant will suffer.
Plans for powerhouse, penstock, and tailrace structures are not available. According to the
design engineer main reason was the late change of powerhouse equipment to be installed.
The headrace canal is built along steep slopes consisting of hill debris (gravel, boulders,
blocks) over rock. The steep slopes support erosion of surface material, the creation of gulley
and landslides which may cause heavy damages of civil structures and high maintenance
and repair load. Stabilization of slopes could reduce the risk and the resulting work load.
Conclusions/Recommendations: Not all civil structures are constructed in an adequate
way. There are several higher risks, which may affect the efficient operation of the systems.
Therefor the civil structures need close supervision by the operating utility companies from
the very beginning.
Adequate design drawings and calculations should be elaborated for the structures still to be
built; inspection should be conducted during commissioning phase
The stabilization of slopes through biological protection measures should be investigated.
4.1.1.5 Electro-Mechanic Equipment (E&M)
Originally, the installation of local equipment was foreseen. Taking the current manufacturing
capabilities in Pakistan into account, the use of local equipment of such size and with the
intention to provide high quality and reliable power supply for economic development, would
have counteracted the projects objectives and expected impacts.
Especially the Pakistani turbine manufacturers are by no means able to manufacture turbines
of the required size and quality. The same is valid for other equipment like generators, inlet
valves, governors, safety and control devices like synchronization panel, exciter, etc.
The project partners also recognized this at a later moment. Finally, the E&M equipment was
tendered through ICB (International competitive Bidding). An evaluation committee evaluated
the quotations received. The contract was awarded to a Pakistan firm, which offered Chinese
equipment. The firm, Al-Fajar, enjoys a good reputation and has already implemented a
8
All design documents, plans, drawings, etc are compiled in two reports “project proposal for the Mini Hydel Unit Pour Yarkhoon
and Raman Harchin both dated October 2010.

number of similar projects in Pakistan (e.g. Machai HPP 2.6 MW, Malakand III HPP, 5 MW,
Reshun HPP 3.5 MW (all KPK), Cane HPP 3.2 MW, Jaglote HPP 3 MW (all GB), etc.).
Conclusions/Recommendations: It can be expected that the E&M equipment complies with
international standards and provides the basis for sustainable operation.
4.1.1.6 Transmission & Distribution of electric power
a Transmission
The transmission is based on an 11 kV line and a number of step-down transformer stations
(Figure 10 and 11). No design calculations had been performed which is not adequate to
such an extended system of comparable high load. Minimum requirements usually are:
Load flow analysis of transmission system
Sizing analysis of step-down transformers
Short circuit analyses of transmission system including sizing of protection devise
(MCBs).
Earthing system of sub-stations is not described and unclear. The transformer sizes are
comparably low. A rough assessment of load considering the assumed outcomes (e.g. 50%
heating and cooking, 60% plant factor) shows the following results:
Peak load per households (according to AKRSP):
Basic consumption: 1 kW
Advanced consumption: 3 kW
Average: 2 kW/household.
Adjusting a coincidence factor of 0.5, the average per household load would amount to about
1 kW. Consequently, a 50 kW transformer can safely supply 50 households; whereas a
100 kW transformer can supply 100 households.
The demand of other than household consumers, haven’t been calculated by the project.
They are usually in the range of:
small shops: 250 W
workshops (3-phase): 3 kW
Public buildings: 1 kW
Hospitals: 10 kW.
Consequently, in Pawoor about 18 of 19 transformers (Figure 10) and in Raman Harchin all
transformers (Figure 11) are undersized
9
. Taking a permissible overload of about 25% into
account in Pawoor 13 of 19 (68%) and in Raman Harchin 10 of 13 (77%) of the transformers
are still undersized.
Another issue is the load management during start of power station. In general a power
station cannot be started under full load. Therefore, load has to be reduced by disconnecting
parts of the transmission/distribution system down to an acceptable load (about 30% of full
9
These figures do not consider any consumption growth due to population growth or shifting of business activities into the peak
hours or increasing number of advanced consumers with increasing income.

load). The remaining 70% of load must be incrementally re-connected after the power station
is fully operational.
Due to absence of a remote control system the feeder lines have to be manually switched,
requiring staff, transport to the branching points of feeder lines, and communication between
linesmen and power house operator
10
.
Figure 10: Transmission System - Parwoor
10
This procedure is required at all times after complete shut-down of the station. To reduce the time consuming re-start and to
allow separation of faulty sections, usually disconnectors or reclosers are installed on main feeder lines. They allow for automatic
temporary switch off and re-connection of faulty sections without causing a complete shut-down of the station.

Figure 11: Transmission System – Raman Harchin
Conclusions/Recommendations: The transmission system needs to be rechecked with
respect to load flow, protective and safety measures required. The design should follow
available Pakistani standards for 11 kV transmission lines; transformers need to be re-sized.
The system’s design needs to consider start and shutdown of the power stations. Adequate
numbers of line breakers, reclosers or disconnecting switches should be foreseen.

b Distribution
There appears to be a gap in the planning of distribution system in the project. Originally, it
was planned to use the existing network 11
as distribution system and to leave the
responsibility to the communities. However, there are a number of issues to be considered:
Not all consumers of the new system are connected to old ones
Load flow of former and future system is total different; thus cable sizes required are
differing
The usual extreme low quality of distribution systems of existing MHPs does not allow
any further use in a upgraded system of higher standard and quality
The expected higher per household consumption in connection with the consumption
workshops and other large business consumers partly using three-phase power
requires an adequate system.
The system design should consider:
Demand analysis of consumers and appropriate sizing of distribution system and
service cables.
Load calculation based on standard load per consumer type (basic household,
wealthy consumer household, public building, mosque, shop, workshop, etc.).
Short circuit analyses of distribution systems including sizing of protection devise
(MCBs).
The service cables including meters and protection devices in the consumer’s premises
should be standardized to achieve appropriate voltage level at the consumer points, to
minimize power losses (which are to paid by the generator) and to optimize the safety of the
users.
A typical house connection should comprise:
Service cables (2*8 to 10 mm² Al) and not longer than 50 m
Electronic meter
RCBO.
Conclusions/Recommendations: To achieve the targeted increased household and
business consumption and at finally the intended plant factor, the T&D system should be
redesigned, adjusted to the new requirements and installed at adequate standard. Otherwise
it will comprise the entire overall outcomes, increases power losses and reduces power
quality.
11
Most of the villages are currently supplied by MHPs of small size

4.1.2 Energy Generation
4.1.2.1 Plant Factor
With the expected plant factor of >60% (Indicator 1 to Output 2.1) the annual energy
generation figures are amounting to:
Pawoor HPP (800 kW): >4.2 GWh
Raman Harchin (600 kW): >3.15 GWh.
However, in an isolated system a plant factor of 60% seems unrealistically high and will
hardly be met (if at all) during the first years of operation, especially when consumption fees
are really to be paid. Table 4 shows some examples for load factors and required
consumption.
Table 4: Plant Factor
A typical basic consumption pattern shows a high peak load during the evening and little to
no load during the rest of the day. The resulting load factor hardly exceeds 20%.
With increasing economic development the load during the days increases and peak load is
extended for 1-2 hours (advanced consumption). However economic activities, which
demand up to 50% (300 and 400 kW respectively during 8 hours!) will not so easily be
developed.
Even if power consumption is extended to 24 hours of consumption (6 hours peak load, 14
hours 50% load and 4 hours 20% load; target consumption), the resulting plant factor will
be about 50%, well below 60%.
Conclusions/Recommendations: A plant factor of >60% will hardly to be met at least during
the first years of operation. An increasing use for heating will, due to its limitation to winter
season, not significantly increase the overall plant factor.
In order to achieve maximum possible plant factor, an intensive demand side management
plan (with respect to heating, cooking and business activities) needs to be elaborated and
introduced. This may include the introduction of peak-load and low load tariffs.
Load situation S1 S2 S1 S2
hours kWh hours kWh hours kWh hours kWh hours kWh hours kWh kWh kWh % %
Basic
consumption
4 2.400 4 3.200 3 900 3 1.200 17 0 17 0 3.300 4.400 22,9% 22,9%
Advanced
consumption
6 3.600 6 4.800 8 2.400 8 3.200 10 0 10 0 6.000 8.000 41,7% 41,7%
Target
consumption
6 3.600 6 4.800 12 3.600 12 4.800 6 0 6 0 7.200 9.600 50,0% 50,0%
S2: Pawoor S2: Raman Harchin
Total
energy/day
Resulting
Plant factor
Source: Own compilation
Plant Factor
Peak load period
S1 S2
low load period (50% of
peak load)
S1 S2
No load period
S1 S2

4.1.2.2 Per capita power available
The typical values of per capita consumption and load for remote rural areas are
12
:
Basic consumption: 500 W peak load and about 1 kWh/day;
Wealthy consumption: 1,500 W peak-load and 5 kWh/day.
With Indicator 2 of Output 2.1 (at last 50% of households reported using electricity for heating
and cooking) the figure are amounting to:
Pawoor (1,127 families): peak load: 1,127 kW
Raman Harchin (1,025 families): peak load: 1,025 kW.
This already pre-supposes that heating is not performed during the peak hours and that
extended load shifting and load shedding is required.
On the contrary, load shedding will not satisfy the consumers and will have adverse effects
on other expected outcomes (e.g. household savings and environmental protection due to
reduced use of in fuel wood).
Conclusions/Recommendations: The indicator 2 of Output 2.1 will be difficult to be met.
Load management requires high attention. Adequate load management plans for generation
and distribution of electricity, including differential tariff structures for peak and minimum load
hours, should be prepared and discussed with the consumers prior to commencement of
operation.
4.1.3 Summary and Conclusions
4.1.3.1 Validation of Results achieved
Due to the delay in project implementation there are no final results achieved so far. The
construction of civil works is ongoing, E+M equipment has been ordered, and transmission
and distribution system is partly installed. The finalization of all works until end of October
2014 seems to be more realistic.
4.1.3.2 Weaknesses/ Reasons thereof
Main weaknesses are to be seen in very optimistic assumption on consumption development
and in the resulting plant factor. Other issues are:
Unclear basic demand and load figures used for calculation of transformers,
connections, and the final calculation of station capacity. Although there are sufficient
long-term experiences in the area, no standard load and consumption patterns have
been developed during design stage
The unavailability of any discharge measurement – at least during construction –
provides an inacceptable high risk to any power station.
12
Including a coincidence factor of 0.5

The very basic design of civil works was balanced by close construction supervision
and by day-to day design at the site, leading to – as far as one can see at the current
stage of construction – acceptable results.
The design of T/D was rather weak or not existent. The distribution system was not
included in the project design and cost. The safety and operational conditions of the
system cannot be ensured. An improper electric distribution system will directly
compromise power station performance (unsecure system, high number of shut-
downs due to shortcuts, etc.), operational cost (high power losses, higher shut-down
rates), productive utilization of power (low voltage, frequency flotation compromises
motors and electronic equipment) and will finally have negative impacts on consumers
satisfaction.
4.1.3.3 Conclusions/Lessons learned
The general project objectives and expected outcomes are appropriate, but are based
on unrealistic timelines.
The site selection was based on insufficient data on the hydraulic potential and
potential consumption of electric power. Identification should have ideally considered
factors like, natural resources, economic development potentials, and population
density, and (if existing) regional/provincial development plans.
The technical design of the power station’s capacities and technologies was
inadequate for such capacities. It should have been based on reliable discharge data.
In case no site measurements were available, modelling of daily discharge should
have been done, using flow data from neighbouring gauging station and developing of
flow duration curves. In all cases permanent discharge measurement stations should
be erected and operated at construction site at least during the construction period.
For both power stations the technical planning did not consider detailed hydraulic and
structural designs for each civil structure and appropriate set of drawings and plans.
Seismic activities were not taken into account.
The technical planning for the T/&D-system is marginal. It should follow respective
standards and should be based on sound demand analysis and its development.
Safety and protection issues should be considered.
The design should have been based on a comprehensive approach discussed and
decided prior to the start of the design and construction works. Changing of essential
parts within the construction will inevitably lead to delays and bear the risk of design
failures.
The construction quality itself seems to be adequate to available resources.

4.2 Environmental Aspects
Outcome 2: Reduced pressure on forests
Indicators:
Enough electricity is generated and supplied from the power houses
The electricity generated is used as advised by the engineers of AKRSP
Load sharing and management adopted by the community with social harmony
The related indicators are not directly measuring the reduced pressure on forests but assume
that the expected outcome will be achieved when enough electric power is available. There
are also no quantities and time lines set.
Currently, households are using an average of 30 kg of fuel-wood per day, with an estimated
value of PKR 5,128 per month. About 50% of the 1,127 beneficiary households of Pawoor
and1,050 beneficiary households in Raman Harchin are assumed to use electricity for
heating and cooking purposes, after Project completion. In the absence of actual evidence, it
is difficult to calculate the monetary savings in the use of wood. Field observations show that
most of the fire-wood used comes from own plantations, and about 30% of households
purchase fire-wood for heating purposes during winters, which comes from suspected illegal
cutting of forests in southern Chitral. Community members interviewed for this report
unanimously cited the high cost of fire-wood as a major problem. Even if wood burning is only
partially replaced by electric power, the extraction rates can be reduced both from farm-
forestry and from natural forests. Our rough calculations show that farm forestry ‘surpluses’
can replace fuel-wood extracted from natural forests and supplied to local market.
However, it is important to note that reduction of pressure on forest does not only depend on
availability of electric power. Factors driving deforestation include, among others:
Illegal felling of trees by timber mafia, not fuel-wood extraction by communities, causes major
deforestation
Most of the fuel-wood comes from irrigated private plantations, which are sustainable at present
but increased population in future could change this equation;
Reduced consumption of wood, would save cash for those who buy fire-wood from the market,
however, the surplus from farm plantations could replace illegal wood in the local market
Although poorer households are sometimes forced to cut their fruit trees to meet their energy
needs during winder period, their ability to switch to electricity for cooking and heating, and
paying higher tariff rates needs verification
Conclusions/Recommendations: In conclusion, it can be expected that electricity will replace the
use of firewood in some of the middle to better off families, especially in areas where fuel-wood is
comparatively expensive and where electricity is more economical than buying (legally or illegally
extracted) fuel-wood. Community members have very high expectations at both power plant locations
that low cost electricity will solve all their cooking, heating and lighting problems. Our recommendation is
to discuss facts with them and lower their expectations.

4.3 Gender Aspects
Outcome 3: Reduced workload on women
Indicators:
The households using electric appliances for heating, cooking and washing.
Field interviews with women (Annex 3) in both project locations have confirmed that women
spend an average of 5 hours a day in fuel-wood collection, cooking and washing. The project
is expected to reduce the workload on women in these activities, which are their traditional
tasks. The time saved can be allocated to other productive and social activities such as
education and home-based enterprises, and a little more time for rest. A clear benefit of
electricity for cooking and heating is seen in improved family health, especially a reduction in
respiratory diseases, which are common. Improved living conditions (smokeless traditional
homes) are expected to also reduce health related costs, and increased labor productivity
(SRSP, 2013).
13
However, the extent of these benefits can only be ascertained when
electricity is available in the expected quality and quantity. A detailed impact assessment
would require a respective baseline survey.
An interesting discovery during field visits was that in addition to equity participation at the
household level to the power supply project, which is fixed at PKR 9,000 at Raman and PKR
7,000 at Pawoor, women could buy individual shares at a discounted rate of PKR 1500. At
Pawoor, 43 women had so far purchased individual shares. The share-ownership system
appears to follow a conscious policy to promote equity among all households, regardless of
their economic status, and particularly designed to include women.
Conclusions/Recommendations: Potential social benefits of sufficient electricity supply are
significantly more for women and children. Their extent can only be ascertained when
electricity and more baselines data are available.
4.3.1.1 Productive Use
Outcome 4: Income and enterprise from diversified and value-added livelihoods
Indicators:
The communities trained and capacitated for enterprise and business development
Potential entrepreneur identified, trained and linked with micro finance and other supporting
windows
Relatively low-cost electricity generated by the communities has generally supported a small
but growing cottage industry sector, including workshops, tyre repairs, wood processing and
other productive uses of energy. Discussions with AKRSP staff revealed that the future focus
would be on productive uses of renewable energy (PURE), and promotion of energy efficient
13
http://srsp.org.pk/srsp_new1/home/83-evaluations-new/199-evaluation-of-immediate-impacts-of-community-physical-
infrastructure-cpi-under-expanded-early-recovery-project-eerp

household appliances. However, a specific project and funding for PURE was yet to be
developed.
The PURE potential is a major bonus for communities where the MHPS are located. The
current baseline is summarized in Table 5.
Table 5: Existing Businesses
Enterprise types Raman Pawoor
8-hrs
demand for
energy
(kWh)
Observations
Saw mills 13 16 11,600 PKR 69,600 energy bill
Flour mills 6 7 5,200 PKR 32,200 energy bill
Other micro businesses 30 26 22,400 PKR 134,400 energy bill
Source: Own compilation
Considering the usually high cost for diesel-driven generators, all businesses stated their
wish ti be supplied by the hydropower station.
Based on previous experience in Chitral, it can be assumed that reliable supply of electricity
can lead to enhanced livelihoods and economic diversification. However, the indicators
appear to be outside the scope of the project, as training and capacity building in enterprise
development are not part of the project budget.
However, in the absence of funds within this project, the achievement of Outcome 4 depends
on available funds like those in AKRSP’s regular enterprise support training programmes
14
,
including access to microfinance from its own bank, on-going community-based lending
activities, national development projects and from commercial banks.
Conclusions/Recommendations: The productive use is a major assumption, and potential
exists for a variety of economic activities, such as food preservation, storage and some level
of processing, wood processing, stone and other crafts, and small-scale electromechanical
repair services. However, left to their own pace, these enterprises will develop overtime,
depending on local market opportunities, financial capability of entrepreneurs, available skills,
electricity tariffs, etc.
The recommendation is to devise a deliberate strategy, seeking relevant opportunities,
identifying potential entrepreneurs, technology and skill transfers, and access to financial and
non-financial business development services.
Developing of business activities in the envisaged time and volume requires additional
accompanying measures in the field of entrepreneurship development, know-how transfer,
access to markets, and access to financing.
Box 1: Public institutions, such as schools, offices and health centers will use electricity for lighting and
to some extent for heating purposes but their consumption is not counted as ‘productive’. They will pay
their bills though, or they will be disconnected from the private utility service as per rules!
14
Aga Khan Planning and Building Service (AKPBS) and Aga Khan Culture Services (AKCSP), the two sister agencies of
AKRSP offer products and services in home construction, retrofitting and other improvements, using energy efficient construction
materials, and behavior change interventions.

4.4 Greenhouse Gas Reduction
Outcome 5: Carbon income and reduced emissions
Indicators:
Standard UNFCCC record keeping maintained at the project site, regional office Chitral and
Head Office Islamabad.
The CER projections and income are dependent on effective consumption of electricity
generated at the two plants, which are included in the bundled CDM project registered by
AKRSP (UNFCCC 1713)
15
. One of the major promises of these larger MHPs was that they
will generate higher amounts of CERs and thus drive the CDM project, which includes nearly
100 smaller MHPs; including the two projects dealt with in this report.
According to the agreement one kWh of generated hydropower avoids about 1.24 kg CO2eq.
With the original price of 16.5 USD per ton of carbon substitution AKRSP expect an income of
about USD 500,000-700,000 per annum (based on the assumed annual generation of 15 MW
from 103 plants with a plant factor of 60%).
However, the drastic drawdown of CER prices from 16.5 USD in 2010 to actually about 4
USD per CER has drastically lowered the possible income. It must be noted that AKRSP and
not communities are entitled to carbon income (Table 6):
Table 6: CDM Revenues
Power Station
Base price
16.5 USD* 4 USD*
Pawoor 85,932 20,832
Raman Harchin 64,449 15,624
Source: own compilations; 1 kWh = 1.24 kg avoided CO2;
generated energy at 60% plant factor
*: per CER; 1 CER = 1 ton of avoided CO2eq
Figures in USD/a
However, with about 15,000 to 20,000 USD/year (equivalent to a per kWh price of 0.322
PKRs) the potential additional revenues are still remarkable high.
Standard UNFCCC records need to be maintained during operation.
The benefits of CDM go beyond carbon income, as it provides a powerful adaptation tool to
climate change, and link rural communities with a variety of knowledge sources and
partnerships. Our recommendation is to include communities/ utilities, especially those above
500 kVA, in carbon income through a mutually agreed formula between AKRSP and utility
owners.
15
http://cdm.unfccc.int/Projects/DB/DNV-CUK1204739473.81/view

4.5 Financial Aspects
The project is financed from various financial sources. From the indicative total budget of
238.5 mill PKR, SDC covers about 158.5 mill PKR or about 66% (Table 7).
Table 7: Total Project Budget
Sources of Financing
Planned
(PKR)
Spent
(PKR)*
1 SDC 158,483,716 153,113,853
2 Community cash contribution 19,100,000
3 AKRSP cash contribution 21,000,000 263,161
4 Loan 39,968,418
5 Total 238,552,134 153,377,014
Source: AKRSP
*: per 31.03.2.014
From the overall budget about 64% are spent; about 85 mill PKR or approximately 850,000
USD are left for completion of the project.
Table 8 compiles an overview on the actual SDC budget situation. The remaining funds are
about 5 mill PKR.
AKRSP needs to revisit the financial model of the project, taking into consideration facts that
have emerged so far.
The first recommendation is to revise the budget, and include key elements that are still
missing but are vital for the achievement of project results and their sustainability. These
include redesigning and construction of proper intakes, or weirs at both sites, reconfiguration
of distribution lines and step-down transformers, and other technical deficiencies highlighted
in this report, to the extent possible.
A second recommendation is to revise the revenue projections in the initial years. AKRSP is
already paying interest on the loan taken from Acumen Fund, and it is not clear who in the
end is going to bear this additional cost, as loan and interest repayment is the responsibility of
communities, using tariff revenue, which is still not there.
Also the repayment schedule, revenue and O&M projections need revising with full discloser
to all project partners.
Lastly, the Terms of Partnership (TOP) with the two communities need to be revised, giving
the utility owners some incentives to increase load factor, out of the carbon income. Another
good practice that AKRSP may like to consider is provision of third party legal assistance to
the community partners, to understand their liabilities and protect their financial interests and
avoid future conflicts.

Table 8: Total SDC Project Budget
Budget Revised Expenditure
Line Budget
1 Programme Unit Running Cost:
-
Total Staff Cost 15.555.400 14.822.941
-
Total Impelentation Cost 2.598.316 1.771.530
Total Programme Implementation Cost 18.153.716 16.594.471
2 Programme Cost
2,1 Construction of Two Micro Hydels 138.730.000 135.736.606
2,2 Cost of Irrigation Channel 850.000 -
2,3 Establishment of Community Utility Companies 400.000 312.088
2,4 Baseline survey 350.000 350.000
2,5 Consultancies (Technical Evaluation of Bids) - 120.688
-
Total Programme Cost 140.330.000 136.519.382
Total Project Cost 158.483.716 153.113.853
Source: AKRSP; status: 31.03.2014; all figures in PKR
Description

5 Sustainability of Project Outcomes
The two MHPs under review are not yet completed; therefore, the following assessment is
based on the findings of the preceding chapters.
5.1 Financial Sustainability
Financial sustainability is ultimately linked to plant life, capacity and captive demand.
Previous experience shared by AKRSP and corroborated by community members, suggests
that low-cost technology and distribution infrastructure, is a major factor in the high
maintenance cost of MHPs, and in the failure of the systems after 5-7 years. Two other
factors are the capacity and consumption. Too small MHPs, and fewer consumers to
contribute to the O&M costs also reduce the durability and sustainability of MHPs.
These problems are already addressed in the design of the two MHPs under review
16
. After
much debate over the technical specifications of MHPs, AKRSP has opted for imported
technology, with a minimum plant life of 20 years. This technical modification implied
substantial additional costs but it frontloads downstream costs, and reduces O&M and plant
replacement cost, thus may enhance sustainability. The capacity threshold and lower
consumer demand are also addressed as both MHPs are of larger size.
Remaining risk with respect to sustainability is the demand and its future development. The
assumed growth in productive and household consumption is based on several assumptions
for which no validated data and information are available.
The revised project budget, expenditures made until March 2014, and sources of financing
are summarized in Tables 7 and 8 (total project budget and SDC share, respectively).
These figures are based on rather optimistic basic data and on the initial investment without
considering the plant’s lifetime. The Life Cycle Cost Analysis (LCCA) provides a more realistic
approach of project costs within its lifetime. The results are compiled in the following Table 9
and 8 and Annex 4.
The results indicate, that both projects are able to recover the running costs at a tariff of
about 5 PKR/kWh, which is about 2 PKR higher than the calculated levellised tariff
17
.
About 40 mill. PKR (Pawoor) and 80 mill. PKR (Harchin) would be available for larger repairs
and replacements throughout the project lifetime.
However, full cost recovery would require a tariff of about 7 – 9 PKR/kWh. With the assumed
5.0 PKR/kWh the accumulated capital losses would amount to 67 mill. PKR in Pawoor and 80
mill. PKR in Harchin after 30 years (about 2.2 mill to 2.6 mill PKR per year).
This should be considered in the concession agreement with the private utility company
which shall run both power stations upon transfer to the new owners by AKRSP.
16
Some additional required modifications, improvements have been briefly described in the previous chapters of this report
17
The CER revenues are planned to be used for initiate additional development activities; they are consequently not included in
the LCCA analysis.

Table 9: LCCA Summary – Pawoor
incl. Investm excl. Investm imported national
Initial Installation Cost PRs 133.000.000 0
Installed capacity kW
Initial Specific Cost PRs / kW
Relative O&M Cost % / year 3,0 3,0 3,00 5,00
Total O&M Cost plus 5% per year PRs / year
Capacity Loss % / year 0,50 2,00
Initial Availability Factor % 95,00 80,00
Decrease of Availability % / year 0,05 2,00
Initial Load Factor %
Change of Load Factor (1st
7 years) % / year
Change of Load Factor (years 8-40) % / year
Replacement Period years
Civil PRs
E+M PRs 39.900.000 39.900.000
Discounting Factor %
Average Sales' Tariff PRs / kWh
Levellised Cost of Energy PRs / kWh 7,28 2,48
PRs/capita 1.488,51 560,89
NPV at present tariff PRs -67.883.221 83.216.586
xxxx values to be set population growth (%/year): 3,00
xxxx values fixed population at start: 10.400
xxxx site specific values population after 30 years 24.508
xxxx
Levillised per Capita cost
Replacement Installation Cost
0
9
5,0
20/30
calculated values
O&M: 5% cost increase per annum; profit rate added: 15%/annum; Source: Annex 4; repayment of loan (20 mill. PRs) in 10 equal steps;
interest 12,5% per annum)
95
166.250
1,00
20
5,00
0,05
3.990.000
at maximum 80%
Individual Parameters
20/30
800
Recommended values
for equipment
0,50
Calculation of Levellised Energy Cost and Net Present Value Pawoor HPP

Table 10: LCCA-Summary – Harchin
incl. Investm excl. Investm imported national
Initial Installation Cost PRs 105.000.000 0
Installed capacity kW
Initial Specific Cost PRs / kW
Relative O&M Cost % / year 3,0 3,0 3,00 5,00
Total O&M Cost plus 5% per year PRs / year
Capacity Loss % / year 0,50 2,00
Initial Availability Factor % 95,00 80,00
Decrease of Availability % / year 0,05 2,00
Initial Load Factor %
Change of Load Factor (1st
7 years) % / year
Change of Load Factor (years 8-40) % / year
Replacement Period years
Civil PRs
E+M PRs 31.500.000 31.500.000
Discounting Factor %
Average Sales' Tariff PRs / kWh
Levellised Cost of Energy PRs / kWh 9,29 2,99
PRs/capita 1.543,37 549,54
NPV at present tariff PRs -79.826.102 41.503.424
xxxx values to be set population growth (%/year): 3,00
xxxx values fixed population at start: 8.000
xxxx site specific values population after 30 years 18.853
xxxx
Levillised per Capita cost
Replacement Installation Cost
0
9
5,0
20/30
calculated values
O&M: 5% cost increase per annum; profit rate added: 15%/annum; Source: Annex 4; repayment of loan (20 mill. PRs) in 10 equal steps;
interest 12,5% per annum)
95
210.000
1,00
20
5,00
0,05
3.150.000
at maximum 80%
Individual Parameters
20/30
500
Recommended values
for equipment
0,50
Calculation of Levellised Energy Cost and Net Present Value - Harchin HPP

5.2 Institutional Framework and Governance
18
The law is silent on the licensing of off-grid hydropower plants below the size of 1 MW.
However, all the stakeholders know this, and the provincial government has informally
allowed local communities through mutual consensus to develop MHPs for their own use,
without a formal license or concession. Still, to fill this legal lacuna and to avoid any future
conflicts, the two plants are registered as legal companies, and regulated under the
respective laws. To further secure the legal ownership by community shareholders, the utility
companies have legally acquired private land used for the two powerhouses. The
participating communities communally own the land used for the channels, and the
customary law is clear on this. At the national level, there is a policy published by the Private
Power Infrastructure Board (2003) that allows development of captive power plants (both
renewable and thermal) by private parties for their own use, or sale to other parties at
mutually agreed terms.
The two MHPs will be governed and managed as formal power utilities, initially co-owned by
AKRSP and beneficiary communities. The shareholders at both locations have elected Board
of Directors and the governing structure and legal definitions of the power utilities and
governing procedures are developed (see Annex 6).
The communities have contributed about 20% in cash and kind towards the cost of the MHPs,
and they are also expected to repay the loan, which is another 30% of project cost. This
contribution will be converted into equity shares, once the loan is repaid. As the utility returns
its debt, AKRSP will transfer the remaining shares, which it owns to community shareholders.
The current arrangement is similar to a Built, Own, Operate and Transfer (BOOT) model
19
,
and the Partnership Agreement between AKRSP and respective communities at both
locations must reflect this.
5.3 Key Stakeholders, their concerns and sociopolitical risks
The primary stakeholders are households who live in the catchment of the plants. About 97%
of households in Raman Harchin and 95% in Pawoor are shareholders, and the remaining
households are expected to also join. This strong community involvement seen at both
project locations is rooted in a larger process of social mobilization and institutional system of
grassroots V/WO and higher level LSOs that are engaged in the broader issue of
development, from livelihoods, to social services and advocacy and rights.
Secondary stakeholders include local government and support organizations like AKRSP and
SRSP. In the absence of elected local governments at the district and lower levels, the
provincial Government is the main government stakeholder, which is supportive of local
communities, who are involved in the entire preparation, execution, ownership and
operational processes of the project. Government stakeholders include technical departments,
such as District Water and Power Department and Pakhtunkhwa Hydropower Development
Organization (PHYDO), the provincial agency responsible for promoting hydropower projects,
and political stakeholders, including Provincial Assembly (Upper Chitral) member, and one
National Assembly legislator elected from the area. Both of these elected members are
18
For further information on stakeholders see chapter 5.3
19
There were controversy information obtained with regard to operational organization. Some people told that the utility itself will
also responsible for operation while other told that technical operation will be outsourced

final SDC Evaluation Report-final-27-06-24

final SDC Evaluation Report-final-27-06-24

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