ISLAMABAD: What appears to be a result of bureaucratic negligence and ill-planning by the lender, the government and Asian Development Bank have failed to ensure full distribution of 30 million compact fluorescent lamps (CFLs), denying the promised benefits of a much-trumpeted energy conservation plan.
Under the $85=-million Energy Efficiency Investment Programme Tranche-I, the ADB and the Ministry of Water and Power had planned to distribute the CFLs, commonly known as energy savers, among 30 million households. The plan was to replace 30 million 40-100W incandescent bulbs in the residential sector with efficient and high-quality CFLs.
However, a latest review of the ADB-funded energy projects revealed that as many as 5.8 million high-quality CFLs were still laying in the warehouses of power distribution companies, as the government is unable to find people who have incandescent bulbs and ready to replace them with the CFLs.
The ADB and the government had sold the idea of giving free CFLs by claiming that the project will save energy of at least 1,300 GWh annually. The investment was also supposed to cut carbon dioxide (CO2) equivalent of 5.37 million tons by 2019.
It has been boasted that the project would improve Pakistan’s energy security and economic competitiveness by lowering energy intensity and improving energy productivity.
The $65-million ADB loan for procurement of CFLs was part of its $780 million financing under the multi-tranche financing facility for energy conservation in Pakistan, which came into effect in 2010. The project is among 10 energy sector schemes funded by the ADB. The total value of these projects is $2.7 billion.
“The challenge in front of us is how to take bulbs to the people,” said Werner Liepach, the ADB’s country director to Pakistan, while talking to The Banker Pakistan. The government was facing difficulties, as people have already replaced their incandescent bulbs, said the ADB’s top man in Islamabad.
He said the ADB may waive off the condition of giving CFLs in return of incandescent bulbs but this will hurt the carbon emission targets, set under the project.
Trouble from the start
The project became controversial from the very beginning. It started with a delay and the Manila-based lending agency had to give extensions in the completion deadlines, said an official of the Economic Affairs Division. In addition, the government contributed $20 million for the project.
The EAD official said the project design was faulty that also created problems in its implementation. And the ADB had to take a blame for faulty project design, he added.
The distribution and storage cost of the CFLs was picked by the power distribution companies.
Due to procurement delays, the ADB extended a major loan component’s closing date from 31 July 2012 to end December 2013, however this deadline was also missed.
In January, the ADB gave a no objection certificate to the Ministry of Water and Power to use a contingency plan for distributing the remaining 5.8 million CFLs by 31 March 2015. Due to the delays in distribution, the ministry has not yet submitted a project completion report to the ADB.
The Ministry of Water and Power has decided to implement a contingency plan to expedite the distribution of remaining CFLs, said Zafar Yab Khan, spokesman of the ministry. He said the ministry has also decided that the commercial and other consumers will be given the CFLs for clearing the backlog.
Khan said the power distribution companies would submit a compliance report by end of this month.
Besides, problems in implementation of the energy conservation plan, there were also hindrances in setting up an Implementation and Management Support Project to execute $780 million loan. The ADB has approved another loan of $20 million, in addition to $5 million Pakistan’s contribution, for this project. However, the federal government could not fill the posts that also affected project implementation.