ARMENIA: OBA SCHEME FOR PROVISION OF GAS AND HEATING GPOBA SDN week Washington D.C. February, 2008.
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Transcript of ARMENIA: OBA SCHEME FOR PROVISION OF GAS AND HEATING GPOBA SDN week Washington D.C. February, 2008.
ARMENIA: OBA SCHEME FOR
PROVISION OF GAS AND HEATING
GPOBA
SDN week
Washington D.C.
February, 2008
GPOBA
Armenia: OBA Scheme for Heating and GasGPOBA Armenia: OBA Scheme for Heating and Gas
GPOBA
Sector Background
Armenia: OBA Scheme for Heating and Gas
Tangible achievements in the energy sector: power sector reforms, intensive restoration of gas supply Slower progress in heating sector: use of inefficient, polluting and unsafe heating technologies
Government committed to facilitate access to efficient, clean, safe and affordable heating services: - Urban Heating Strategy adopted in 2002
- WB Urban Heating Project and various donor initiatives structured around the Strategy
Access to gas and heating picking up
Design of OBA scheme
GPOBA
Desired outcome
Improved access to gas and heating services for poor households in urban multi-apartment buildings
Approach
Demand driven
NatureOBA subsidies in form of capital grants to eligible urban poor for:
Connection of their apartments to the gas network and/or installation of a safe gas heater
Connection of their apartments to local heating systemArmenia: OBA Scheme for Heating and Gas
Design of OBA scheme
GPOBA Armenia: OBA Scheme for Heating and Gas
Targeting
The most vulnerable households involved in the National Poverty Family Benefit Program (determined based poverty level score)
Eligibility
Building connected to gas network
Mandatory cash contribution of US$30
Accountability of Service Providers
GPOBA
Payment tied to outputs
Individual gas heater solution
20% advance payment upon incumbent gas company’s signing of contract with the service contractors
70% upon independent verification of service delivery
10% upon independent verification of 12 months of satisfactory service delivery
Armenia: OBA Scheme for Heating and Gas
Local heating solution
90% upon independent verification of service delivery
10% upon independent verification of 12 months of satisfactory service delivery
Financing Leveraged
GPOBA
Total Project cost- US$ 7 million
US$ 3 million GPOBA grant
US$ 3 million financing IDA
US$ 530,000 government of Armenia co-financing
US$ 470,000 mandatory cash contribution of the eligible poor households
Projected number of beneficiaries
Over 10,000 households expected to benefit from OBA subsidy scheme
Armenia: OBA Scheme for Heating and Gas
Implementation Progress
GPOBA
Grant agreement signed: April 28, 2006
Project became effective: July 21, 2006
Results to date:
More than 10,000 applications received from the urban poor residing in 39 cities.
About 6,600 applications approved. Co-financing received for 4,900 applicants.
Gas heater installation works completed for 2,724 households with 1,621 installations verified.
Gas connection works completed for 2,680 households with 1,506 connections verified.
Armenia: OBA Scheme for Heating and Gas
Lessons Learned
GPOBA
1. Scheme design
Adequate public outreach is critical: a number of tools were employed; direct mailing worked the best
The poor households should have the option of applying directly
Mandatory cash contribution is essential
Need to ensure service delivery soon after the mandatory contribution is made
Independent verification is important
Armenia: OBA Scheme for Heating and Gas
Lessons Learned
2. Scheme implementation
Early preparatory works are warranted, especially if the OBA approach is relatively novel in the country
Adequate planning of procurements is key for smooth and timely implementation
Reliance on existing commercial practices is essential
GPOBA Armenia: OBA Scheme for Heating and Gas
Lessons Learned
3. Scheme sustainability
Early and active involvement of central and local governments is key for future scale-up
Involve them in scheme implementation starting from raising the awareness of beneficiaries, collection of application
Encourage them to co-finance the scheme and recognize and publicize their contributions
Well designed public outreach activities are important to adequately communicate the benefits of OBA approach
GPOBA Armenia: OBA Scheme for Heating and Gas
GPOBA
Thank you
Armenia: OBA Scheme for Heating and GasArmenia: OBA Scheme for Heating and GasGPOBA
GPOBA
Thank you
Armenia: OBA Scheme for Heating and GasGPOBA Armenia: OBA Scheme for Heating and Gas