Norwegian aid for capacity building

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4.4.3 Ownership and capacity of recipient

Both Norad and NVE have pointed out that the recipient institution must have owner- ship of the project and the capacity to prioritise and implement it. 118 This is supported by earlier evaluations of Norwegian aid to the energy sector and institutional coopera- tion through multiple Norwegian agencies and ministries. 119 The World Bank’s Capacity Development Results Framework points out that in order to ensure ownership and anchoring of the project in the organisation, key persons who could be driving forces for the planned changes in the institution must be identiied in the planning phase. Identifying agents of change who can lead change processes in the organisation is crucial. These agents are often inluential individuals or groups. Capacity development takes place by educating agents of change, and activities should be developed to ensure the empowerment of agents of change through learn- ing. 120 Experience from institutional cooperation between Statnett and TANESCO conirms the importance of identifying key people who can drive the change process in the organisation forward. In an interview, Statnett stated that it was diicult to identify who should have the main responsibility in TANESCO for the collaboration, since the planning meetings were attended by a continual series of new persons. According to Statnett, relationship building with TANESCO employees was demanding. Statnett stated in an interview that frequent replacement of project personnel and senior management presented a need to reanchor the project in TANESCO. According to Statnett, it has negatively impacted progress and TANESCO’s ownership of the out- comes. The second quarter report for 2013 pointed out that the consequence has been that activities, especially in the corporate strategy and management working group, have been changed or cancelled due to lack of interest from TANESCO’s manage- ment. According to the agreement between the parties, TANESCO is to report results directly to the Norwegian Embassy, and Statnett is responsible for quarterly progress reports to TANESCO. In an interview, Statnett related that in practice they have drafted all formal reports, both progress and annual reports. The Ministry of Foreign Afairs pointed out that the development of TANESCO into an eicient company is a political priority and that the board and senior management of the company have taken ownership of the project. According to the Ministry, turbulent working conditions, such as the replacement of management and personnel, a power crisis and various necessary tasks, made it diicult for TANESCO to follow up individual project activities with staing and necessary decisions. A majority of embassies in the core countries report that they have experienced that ownership and prioritising by the authorities are important for the outcomes of capacity building. 121 For example, the embassy in Mozambique pointed out that without real interest and early efects of the work, institutions have a tendency to downgrade the activities in favour of more pressing matters and daily operations. The embassy with responsibility for East Timor emphasised that institution building is complex and time-consuming, and it is important that the activities are prioritised. 118 NVE 2012 Erfaringer med institusjonssamarbeid og forslag til tiltak [In Norwegian] and Norad 2001 Guidelines for institu- tional cooperation, p. 7. 119 Norad 2007 Evaluation of Norwegian Power-related Assistance. Final report, pp. 40 and 61, and Kruse 2007 Institusjons- samarbeid i norsk bistand. Erfaringer med faglig bistand gjennom norske direktorater og departementer. En rapport til Norad, p. 26. [In Norwegian] 120 World Bank Institute 2009 Capacity Development Results Framework, pp. 4 and 10. 121 The embassies’ responses to a list of questions from the OAG. 89 Document 3:12 2013–2014 Report Prioritisation by the authorities is paramount according to the embassy. The embassy in Nepal stated that some capacity-building projects have not been successful due to a lack of institutional anchoring. The embassy noted that institutional anchoring is critical. Several evaluations of institutional cooperation cite a lack of ownership and capacity. Among other things, the mid-term evaluation of the institutional cooperation between NVE and Ethiopia’s Ministry of Water and Energy shows that relations are lacking between NVE and the Ministry, and that the Ministry of Water and Energy lacks personnel and has a high turnover of staf. 122 According to the mid-term evaluation of the cooperation between Statnett and the Uganda Electricity Transmission Company UETCL, management should provide all employees with a clear mandate to priori- tise project activities, and that it is vulnerable to changes of staf. The evaluation notes that staf stability is critical for ensuring long-term utilisation of expertise in the organisation. 123 The mid-term review of the institutional cooperation with the energy ministry in Liberia emphasised that ministry employees lack the prerequisites to absorb new knowledge, and that the Ministry’s budget does not provide employees with the means to exercise what they have learned in practical work. This makes it diicult to achieve goals. The evaluation also reported positive experiences in the work areas where long-term advisers from NVE and dedicated employees of the organisation participated. 124 TANESCO’s financial and organisational challenges TANESCO’s inancial deicits are increasing. For the iscal year that ended in June 2013, the budget overrun was 370 per cent, 125 and by the end of 2013 the company had a debt of approx. NOK 3 billion. 126 TANESCO’s inancial deicit was equivalent in 20122013 to about 1.4 per cent of Tanzania’s GDP. 127 The Energy and Water Utilities Regulatory Authority EWURA approved increasing electricity prices by 40 per cent from 1 January 2014. However, it is unclear how much impact the price increase would have on TANESCO’s inancial situation because the price paid by a relatively large share of the customers is very low in principle. 128 In an interview, EWURA noted that TANESCO can also reduce operating expenses by using cheaper produc- tion technology and by investing in more reliable energy sources than water. All expenses are combined in TANESCO’s overview of expenditures. This makes it dii- cult to identify cost drivers. The Ministry of Foreign afairs stated that the price increase in 2014 comes in addi- tion to a 40 per cent increase in 2012. After the tarif adjustment, TANESCO has had smaller deicits, but continues to accumulate debt. TANESCO has taken out loans and received large transfers to break even inancially. 122 Norad 2012 Mid-Term Review of TANESCO-Statnett, pp. iv and 28. 123 Norad 2012 UETCL-Statnett twinning arrangement: End-review of 2009–2011 phase 2 and appraisal of 2012–2016 phase 3 proposal. Final report Norplan, 3 April 2012. 124 Norad 2013: Mid-term review of Norwegian financial support to the energy sector in Liberia. 125 The World Bank, Dar es Salaam 2013 Rapid Budget Analysis 2013. Synoptic Note, draft 15 November 2013, p. 25. 126 Joint Energy Sector Group 2012: Joint Energy Sector Review, p. 17. 127 International Monetary Fund 2013 United Republic of Tanzania: Sixth Review Under the Policy Support Instrument, Second Review Under the Standby Credit Facility Arrangement, and Request for Modification of Performance Criteria—Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Tanzania, p. 8. 128 Electricity Tariffs to go up by 40 per cent on January 1, The Citizen, 24 December 2013 and TANESCO Tariff Review Application from September 2013 TANESCO’s application to EWURA for tariff increase.