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1. Project purpose
The purpose of this project is to develop a UNECE standard or standards reflecting international best practice in PPPs for variable on-grid renewable energy development (wind and solar). These standards will assist governments in the establishment of national targets and legal, regulatory, commercial and policy frameworks for variable renewable energy development.
2. Project scope
Governments have been confronted with the difficulty to identify the right projects or the right PPP models from successful international PPP experience that can be used as a basis for their own programmes. Access to international best practices is a remedy against repeating common mistakes and building efficiency into national PPP programmes.
In order to develop a PPP standard or standards, the project will assess different models of PPPs for variable on-grid renewable energy development pertaining to different project scales (small, medium and large), using the Project Team members’ experience in markets where PPPs are used to deliver renewable energy services.
In addition, the Project Team will focus on policy, more precisely, on how a robust PPP variable renewable energy programme aligns with a country’s general energy policy (with an energy for all optic), and will recommend best practice for the establishment and management of such programme within the wider energy framework of a country. Due to the variable nature of wind and solar energy it is important for the wider energy policy and framework to incorporate a careful analysis and management of additional factors such as back-up generation, system modification and grid accessibility for variable energy. The Project Team will also, were possible, focus on those PPP projects that failed to deliver, and will look at the factors that contributed to these failures1.1 Project background
Differentiating high-quality Public-Private Partnership (PPP) projects that are fit for purpose for the SDGs from the rest is a crucial step in implementing the People-first PPP approach in national infrastructure policies and programmes.
In November 2018, the UNECE Working Party (WP) on PPPs recognized that identifying a proper evaluation methodology for scoring PPP projects, and encourage the various partners to make them People-first was the next most crucial step in implementing the People-first PPP approach; and that a joint effort from multiple stakeholders, including contributions from a broad group of experts and organizations was needed to develop such a methodology. The WP therefore requested the secretariat to give priority to the development of such a methodology, and to submit a proposal for the creation of an evaluation methodology project team to the Bureau, for consideration and approval.
1.2 Project rationale
Despite huge interest and commitment by all stakeholders in contributing to achieving the SDGs, there lacks real evidence on impact and performance of projects, which is a major lacuna, especially with regards to infrastructure projects. There is presently no mechanism to monitor the impact of these projects. Such a mechanism is however required for two reasons:
- Prioritize investments by governments in infrastructure projects that meet the SDGs. Presently, most governments lack the knowledge and tools to select the right projects that will help advance the SDGs. Several UNECE PPP standards have been developed to assist governments in implementing the Guiding Principles on People-first PPPs. However, a proper approach to evaluate projects upstream is still lacking. The criteria, indicators and scoring mechanism for People-first PPPs can help governments focus on projects that deliver sustainable outcomes, and especially that enable social development and allow access to essential services for unserved population.
- Help mobilize private financing and innovation capabilities in SDG-compliant projects and thereby overcome the insufficient financial flows and the lack of solutions that hinder progress on the SDGs. Private investors already have economic and financial metrics to evaluate projects, but most of them lack adequate tools to measure projects social and environmental impacts.
1.3 Project objective and benefits
The objective is to have a robust, standardized methodology to assess the extent to which PPP projects – either at the design and procurement stages or during Operations and Maintenance – are aligned with the SDGs, the overall objective being scaling up the People-first PPP concept so that existing PPP approaches lead to positive, measurable, intentional and tangible SDG impacts.
Specifically, the impact assessment tool will assist:
a. Governments in evaluating projects at each of the PPP phases:
- Design and procurement (ex-ante project assessments and investment decisions) enabling the selection of projects that make significant contribution to the SDGs;
- Implementation and impact operations (post investment project decisions and strategies based on the evaluation and monitoring of SDG impacts).
b. Development agencies, Multilateral Development Banks, and other lenders in financing viable and bankable projects with high economic, social and environmental added value.
c. Private companies in adjusting their projects or in designing new ones with impact on sustainable infrastructure development in key sectors (energy, water, transport, education, healthcare, etc.) in the regions that require most resources. Private companies can use this tool not only for investment decisions (e.g. impact investment) but also as a mechanism to deliver high-performance in PPP projects (utility and infrastructure companies).
d. Stakeholders including CSOs, including NGOs and academia, in assessing new and existing PPP projects at different stages of their lifecycle towards the achievement of the SDGs. The tool could also be used to enhance PPPs that do not meet the SDG requirements. Reporting on progress of infrastructure projects will improve transparency and governance in that it can strengthen people’s right to express their views on the merits and demerits of specific projects.
e. In increasing the availability of good data on SDG-compliant projects and in scaling up knowledge on assessing sustainable impact of infrastructure PPPs.
f. UNECE in enriching its 500 People-first PPP case study compendium.
2. Project scope
2.1 Application scope
The impact assessment tool should be readily usable by governments, private sector, private lenders, and international organizations, and applicable to all PPP sectors and all categories of PPP projects, whether they are small-scaled or large-scaled, national or cross-border. It can be applied to publicly-owned projects, PPP projects - both government-pay PPPs and concessions (user-pay) - or any other partnership frameworks (e.g. institutional PPPs).
2.2 Project activities and sequences
The design of this tool will result from a multi-stakeholder consultation process and a robust collaborative endeavor therefore ensuring effective implementation and wide-scale adoption. The development process should be conducted in a constant back-and-forth process compliant with the following sequences before the tool goes back to the Bureau for its consideration and approval:
- A project lead at the UNECE secretariat will be appointed to manage and oversee the entire project process.
- A technical group composed of experts will be set up to develop the tool.
- A multi-stakeholder validation group will review the tool regularly and make recommendations for its improvement. In addition to the business community, PPP Units, international organizations, other UN bodies, academia and NGOs/CSOs, the UNECE secretariat will also approach banks and key International Finance Institutions (African-Development Bank, Asian Development Bank, World-Bank, etc.) to make sure that they are part of this group and are fully involved in the validation process.
- The technical group will revise it accordingly and deliver a second version after final validation is conducted.
- The tool will be tested against actual projects. Good practices and lessons learned will be documented, and issues will be identified.
- The technical group will make the necessary improvements to fine-tune the tool and will integrate the recommendations of the validation group following the same process as described above.
- Once the revised draft is approved by the validation group, it will be published on the UNECE website for public review.
- The validation group will make key recommendations for the effective implementation of the tool, taking into account challenges at global, country and project level.
3. Project deliverables
The project deliverables are:
3.1 The People-first PPP Project Impact Assessment Tool (“Tool”)
The Tool will consist of an evaluation methodology based on selected outcomes and indicators, and a rating index based on a weighting mechanism. In designing the Tool, the project team should meet the following requirements:
a. Benchmark at least 5 existing evaluation tools, including those developed by organizations[1. A review of the existing PPPs in variable renewable energy development;
3.2. A review of the wider energy infrastructure requirements (production, transmission, interconnection and distribution) for the establishment and management of a robust PPP variable renewable energy programme; and
3.3. A specific standard under each of the following:
- PPPs for the development and use of solar renewable energy technology; and
b. Use the five People-first core outcomes and other factors, including:
- Intent: extent to which parties to the project intend to achieve environmental and social impact from their project;
- Verification: that the impacts/outcomes are in fact able to be verified;
- Location: that the locations of projects can make the greatest contribution to social development if they are in countries where the development challenges are the greatest.
c. Identify relevant methodological frameworks or indicators under each outcome. These must be Specific, Measurable, Attainable, Reasonable and Time-bounded (SMART).
d. Weigh each indicator and design a scoring mechanism and a rating index.
3.2 Key recommendations for the effective implementation of the Tool
The validation group will consider the possibility of developing the following implementation mechanisms and will make recommendations accordingly:
a. A voluntary certification mechanism for governments and their partners on delivering People-first PPP projects. The role of various stakeholder groups - not UNECE - in providing these certificates should be looked at.
b. An IT “knowledge-sharing platform” (e.g. the multilateral IT platform SOURCE financed by the MDBs) to centralize index results and the inputs and outputs leading to the People-first PPP outcomes. Such a platform can help increase the volume of official statistical data on PPP projects and disseminate results to all stakeholders, thereby facilitating the large-scale adoption of the Tool. Duplication should be avoided, but if such a platform does not exist or is not appropriate to host this tool, and is to be created, it could be developed jointly with IFIs, consultancy firms or non-for-profit actors.
c. Deployment of the Tool in 10 flagship projects , ensuring reporting of (annual) results.
d. Development of a management strategy to establish a continuous, self-sustaining process for global roll-out, in order to scale up the Tool to an increasing number of projects in developed, developing and least developed countries.
e. Design and dissemination of an implementation guide, training materials, capacity building activities in selected countries, etc.
 E.g. Toyo University PPP School, IESE Business School, Tsinghua University. Other tools that could be looked at include, inter alia, the Institute for Sustainable Infrastructure Envision framework, the UNEP FI's Positive Impact Initiative Radar and Model Frameworks, etc. The project team might also consider using the UNECE draft benchmark developed on the basis of the People-first Guiding Principles.
 E.g. David Dombkins, Yu Namba, Pedro Neves, Alex Wong.
 Namely: Improve access to and equity in essential services, enhance environmental sustainability and resilience; Ensure economic effectiveness; ensure replicability and scalability; promote stakeholder engagement. Further detail on these outcomes can be found in the Guiding Principles on People-first PPPs for the SDGs.
 The 10 flagship projects are one of the three pillars of the cooperation between UNECE and the China National Development and Reform Commission.
4. Geographical focus
4.1. The UN standard is a global standard, but the project risk allocation between the public and private sector for PPPs in developing countries is different to that in developed countries. Due to that the focus on applicability will be on developing countries and economies in transition. The Team Leader may identify regional leaders/focal points to ensure a widespread coverage.
The focus is global as the Tool will be designed to facilitate wide-scale implementation of the Guiding Principles on People-first PPPs for the SDGs.
Whether the Tool will be successfully implemented and applicable for a global audience will depend amongst other factors on the level of consultation and validation that will lead to its development. The design process must therefore integrate the views of a broad range of stakeholders including representatives from governments, international organizations (UN bodies, the UN Regional Commissions, UN agencies, etc.), Multilateral Development Banks, lenders, the business community, academia, NGOs and CSOs, as well as individual experts from developed and developing countries.
5. Project team membership and required functional expertise
The Project Team will be comprised of two groups performing too separate but related tasks:
a. A technical group, composed of experts with specialist knowledge in the areas of PPP and evaluation methodologies and impact assessment, coming from diverse backgrounds, especially with experience in low and middle-income countries. The Team may also require expertise from established PPP markets. English is the working language of the Project Team.
b. An inclusive, multi-stakeholder validation group subdivided into sub-validation groups: PPP Units, international organizations including UN bodies, Multilateral Development Banks, lenders, the business community, academia, NGOs/CSOs.
5.2 Project Co-leaders
Two co-leaders have been identified
- James Stewart, Chairman, UNECE PPP Business Advisory Board;
5.3 Role of the UNECE secretariat
Team members and co-leaders will work under the overall responsibility of the UNECE secretariat, which will appoint a project lead to oversee the entire project process.
6. Project leadership
|Project leader||P0011 Leader|
7. Resource requirements
Participants in the project Project participants shall provide resources for their own participation. The project’s existence and functioning of the project shall not require any additional resources from the UNECE secretariat.
Estimated Completion Date
Developing the initial draft
To be defined
Project approval by the Bureau of the Working Party on PPPs
To be defined
First version of the tool tested against actual projects and revised accordingly
To be defined
Publication of draft tool on the UNECE website for public review
To be defined
Endorsement of tool by the Working Party on PPPs
To be defined
Submission of tool to the UNECE Committee on Innovation, Competitiveness and Public Private Partnerships for approval