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I. SITUATION ANALYSIS

This regional energy project is funded by the ENPI CBC Mediterranean Sea Basin Joint Operational Programme, adopted by the European Commission, and will be implemented in partnership by the following institutions; Trama TecnoAmbiental (TTA), Polytechnical University of Catalonia (UPC), Spanish Association for the Internationalisation and Innovation of Solar Companies (SOLARTYS), French Alternative Energies and Atomic Energy Commission (CEA), Energy Research Centre - An-Najah National University (ERC), United Nations Development Programme Lebanon – Energy and Environment Programme, and National Centre for Research and Development / Energy Research Programme (NERC) – Jordan. TTA will be the responsible for the day-to-day operation of the overall project and coordination of the activities. All the partners will compose the Steering Committee.

For each activity, there will be a leader which will be in charge of the supervision of the associated actions as well as the reporting to the general coordinator. Each partner will have a specific role and will be involved in implementing the project. UPC will be involved in almost all the tasks with an important or specific role in technical-related activities (technological development). SOLARTYS will be responsible of promoting the enterprises and institutions participating in the project among enterprises networks of European and African Companies. They will organize and coordinate workshops, institutional and private visits to the implemented project, as well as promoting through their networks the implemented project. CEA will be responsible for the tasks on simulation and laboratory testing. In addition, CEA will be particularly involved in the benchmarking of R&D and training needs. As for the target countries Palestine (ERC), Lebanon (UNDP) and Jordan (NERC), they will be involved in the analysis of the legal framework, tariff and grid characterization, organization of local workshops, site selection and land dedication for PV-Diesel distributed generation pilot projects, procurement phase and technical task for the pilot project (sizing, design, installation, etc).

In the target countries, the weakness of the grid (impossibility of having increase in the power supply, interruptions, etc) do not allow neither the security of supply in critical facilities (hospital, schools, etc) nor the proper development of the small and medium size industries. Instead of using exclusively a diesel self-generator, the project addresses a solution to reduce the use of this polluting and expensive mean by installing a solar PV system with a transient storage associated to the generators. When the grid is available, the PV energy will be injected to grid (net metering). In case of grid interruption, the back-up is assured by the PV system coupled with generator if the PV generation is not enough (low irradiation, excess of load, etc). A transient storage system will guarantee the continuity of the supply for very short-term variations of generation (clouds) or the time that the generator switches on. A complete assessment of the legal framework and regulation must be achieved in order to understand the limit of the introduction of solar technologies and propose recommendations. The technology transfer will be assured by the organization of training and workshops and the implementation of the pilot projects.

With the accomplishment of the expected results, the energy situation in the 3 target countries will improve considerably by reducing energy costs, reducing the dependence on imported fuel and improving the security of supply.

On short-term, by improving the beneficiaries’ situation, the situation of the population will improve since they are all users of public facilities. On long-term, the whole population, which is also affected by the weakness of the electricity grid, will have a direct benefit (continuity of supply, reduction of cost for alternative source of energy, reduction of pollution, etc).

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II. STRATEGY

The implementation of PV systems in the three target countries is still in the pre-commercial stages as more demonstration projects are required to lure in the various sectors of the economy. This project focuses on larger scale PV systems for small and medium sized enterprises and also public facilities.

A target of 2 sites in Lebanon, each with capacity in the range of 100 kWp (can be larger one site and slightly smaller for the other) will demonstrate the feasibility of such types of applications. The impacts of these systems are obvious on:

(1) Reduction of National Electricity Bills: Generally the price of electricity is subsidized by the government. If the total consumption from the grid is reduced, thus the national electricity bill is reduced too. For instance in Lebanon, the current total cost of electricity, given the use of fuel oil and diesel mostly for generation, is at least 22 USDc/kWh. The electricity tariffs in Lebanon are progressive; therefore the PV system output will reduce the amount of electricity obtained from the national grid at the higher tariff levels. These levels are approximately (and currently) 13 USD cents / kWh

(2) Reduction of diesel fuel use: In the target countries the weakness of the grid make that the people secure their supply with gensets. In Lebanon, out of Beirut, the shortage is in a range of 4 to 12 hours per day. The current diesel cost from self-generation is set by the Lebanese government at 26 USD cents/kWh (using current day diesel prices – January 24th 2012) which is relatively high.

(3) Reduction of CO2 emissions: The national CO2e grid content is 0.65 kg CO2e /kWh based on a Clean Development Mechanism (CDM) project submitted by Lebanon in 2011 to the UNFCCC.

(4) Increase in the capacity for Small and Medium size industries: In some country, the lack of infrastructure does not allow an industry to increase its contracted power form the utility. The use of such systems will allow the beneficiary to increase their power limitation in order to increase their production.

The direct benefits to beneficiaries will be reduced costs of energy (therefore saving revenues for other objectives), improved environmental footprint, better energy service and better corporate image.

The indirect benefits will target capacity building and raising awareness. The former is for current Partners of PV systems, enabling them to implement such project with larger capacities and synchronization with both the national grid and the diesel self-generator.

III. RESULTS AND RESOURCES FRAMEWORK

Intended Outcome as stated in the Country Programme Results and Resource Framework:

Outcome 3: Climate Change considerations mainstreamed in national priorities

Outcome indicators as stated in the Country Programme Results and Resources Framework, including baseline and targets:

Indicator 3.1: Market transformation towards more sustainable energy use observed

Baseline 3.1: Few sustainable energy applications and projects exist

Target 3.1: Increased number of sustainable energy projects implemented at national level

Applicable Key Result Area (from 2010-2014 Strategic Plan):

Output 3.1: National sustainable energy strategy developed and its implementation promoted

Project title and ID (ATLAS Award ID): Machrek Energy Development-Solar – Project ID 00087030– Award ID 00047251

INTENDED OUTPUTS

OUTPUT TARGETS FOR (YEARS)

INDICATIVE ACTIVITIES RESPONSIBLE PARTIES

INPUTS

Output 1: Capacity building and implementation of innovative renewable energy technologies

Baseline: Limited application of renewable energy technologies in Lebanon

Indicators:

- Availability of end-use renewable energy demonstration projects;

- Availability of relevant technical tools for the spread of renewable energy applications.

Targets (2013)

- Define the coordination for the local installation of the pilot projects

- Develop site selection criteria

- Launch beneficiary application process (online)

- Site visits and selection of 2 pilot beneficiaries

- Work on EOI criteria and launched it for potential supply companies

- Short-list the compliant suppliers

1 Activity Result: Implementation of pilot projects Institutional and local coordination - Monitoring of the project implementation and coordination with the different stakeholders Selection of adequate site and

beneficiary -Develop site selection criteria with TTA -Launch beneficiary application process (online) -Site visits and selection of 2 pilot beneficiaries -Receive cash co-financing from selected beneficiaries Procurement process -Work on EOI criteria -Launch EOI for potential supply companies

UNDP

€ 33,411

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Targets (2014)

- Receive cash co-financing from selected beneficiaries

- Launch ITB and sign contract with selected supplier

- Delivery of equipment

Targets (2015)

- Installation on site

- Set up of the systems

- Commissioning of the 2 pilot sites

-Review proposals and short-list suppliers -Receive technical design and place into tender document (ITB) -Launch ITB to short-listed suppliers -Review bids received and submit to CAP/ACP -Sign contract Installation and set up of systems -Delivery of equipment and installation on site -Commissioning

€ 369,183

€ 379,256

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IV. ANNUAL WORK PLAN

EXPECTED OUTPUTS

And baseline, indicators including annual targets

PLANNED ACTIVITIES

List activity results and associated actions

RESPONSIBLE

PARTY

PLANNED BUDGET

Funding Source

Budget Description Amount year 1 (EUR)

Amount year 2 (EUR)

Amount year 3 (EUR)

Output 1: Capacity building and implementation of innovative renewable energy technologies

Baseline: Limited application of renewable energy technologies in Lebanon

Indicators: Availability of end-use renewable energy demonstration projects; and relevant technical tools for the spread of renewable energy applications.

Targets: Complement renewable energy technologies in Lebanon

Related CP outcome: Climate Change considerations mainstreamed in national priorities

Activity 1: Implementation of pilot projects Institutional and local

coordination Selection of adequate site and

beneficiary -Develop site selection criteria -Launch beneficiary application process (online) -Selection of 2 pilot beneficiaries -Receive cash co-financing from selected beneficiaries Procurement process -Work on EOI criteria and launch it for potential supply companies -Review proposals and short-list suppliers -Receive technical design and place into tender document (ITB) -Launch ITB to short-listed suppliers -Review bids received and submit to CAP - Sign Contract Installation and set up of

systems -Delivery of equipment and installation on site -Commissioning

UNDP TTA

71300 - Local Consultants 17,625.00 17,625.00 -

71400 - Contractual Services-Individuals

- 20,000.00 50,345.00

71600 - Travel 2,600.00 3,300.00 8,100.00

72100 - Contractual Services-Companies

- 301,106.00 293,000.00

72800-IT Equipment 10,000.00 - -

74100 - Professional services 1,000.00 1,000.00 1,000.00

74200 – AV & Printing Production Costs

- 1,000.00 1,000.00

75700 - Training, Workshops and Confer

- 1,000.00 1,000.00

75100 - Facilities and Administration (7%)

2,186 24,152 24,811

Total 33,411 369,183 379,256

V. MANAGEMENT ARRANGEMENTS

i. Execution Modality

The Project will be executed under the UNDP Direct Implementation Modality (DIM), whereby UNDP will act as the executing agency and the Ministry of the Energy and Water acts as the implementing partner. A cost sharing agreement will be signed with the Trama TecnoAmbiental (TTA) on an annual basis or as per the funding received by the ENPI. Once TTA receives the first cash transfer, a cost-sharing agreement will be signed with UNDP. Once the second cash transfer is received by the TTA, an amendment to the first cost-sharing agreement will be signed in the amount of the second cash transfer. This will avoid any issues that may arise from ineligibility of funding and will also avoid causing IPSAS related problems for UNDP.

The overall project management towards the main funder (ENPI) will be carried out by Trama TecnoAmbiental (TTA). TTA will be responsible for the day-to-day operation of the regional project and coordination of the activities.

The technical assistance provided by Trama TecnoAmbiental will consist of the following up on the progress towards objectives by ensuring the workloads are completed keeping the role of quality assurance.

The MED-Solar Steering Committee is composed of one representative of each Partner. Each representative of each Partner may appoint a substitute.

The Steering Committee will be chaired by TTA being the applicant. The chairman will set the agenda for the meetings. He will convene the Steering Committee at least every six (6) months for a maximum of five (5) coordination meetings during the whole project period.

Any expert or qualified person may be invited to attend meetings of the Steering Committee with a role of advisor.

The objectives of the Steering Committee will be to:

- Provide the project with strategic management (prepare decisions of the General Assembly).

- Approve technical, financial and administrative decisions taken by the Project Manager.

- Control the quality of the project’s work.

- Advise on the exploitation of results and common marketing strategies.

Decisions will be taken by a simple majority. Delegations of votes – in case of absence – are possible. Where decisions are tied, the Chairman will have a casting vote.

UNDP will be the leader of the “Implementation of Pilot Projects” activity, and will coordinate all the tasks within this activity and encourage scientific discussion between the other activities; UNDP will present progress reports on the work progress of the activity and support TTA in drafting the Project Progress Reports; in addition, UNDP will inform and communicate the Steering Committee about any identified need, difficulty arising in connection with the implementation of the pilot projects.

At the national level, the activities will be managed by the UNDP-CEDRO project team and this additional funding will be integrated into the existing UNDP-CEDRO project budget. The activities will be coordinated with any other UNDP energy and/or climate change related projects and all implementation will follow UNDP rules and regulations.

ii. Financial Modality

TTA will be the project coordinator of the overall project; its responsibility is to act as an interface between the consortium and the Managing Authority – Sardinia Region.

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TTA will receive all payments made by the Managing Authority – Sardinia Region. The Partners agree that the first part (Tranche 1) of each community financial contribution pre-financing will only be distributed in half to the Partners as follows:

- The first half upon receipt of the advance payment from the Managing Authority – Sardinia Region,

- The second half upon expiry of a six period and against receipt by TTA of a cost and work progress declaration for this period, for the purpose of checking the project implementation progress;

The Steering Committee will be in charge of evaluating the work progress and decide for each contractor if Tranche 2 of his allocated pre-financing can be paid. A Contractor may not participate in a respective decision about its own allocated pre-financing.

The same proceedings will be used for the distribution of Tranche 3.

iii. UNDP Management Services

The UNDP country office will provide the following general oversight and management services (General Management Support – GMS) recovered with a flat rate of 7 % for the activities of the project which include the following:

i. General oversight and monitoring, including participation in project reviews ii. Briefing and de-briefing of project staff and consultants iii. Resource management and reporting

iv. Thematic and technical backstopping

UNDP Coordinator

Project Board

Senior Beneficiary Ministry of Energy &

Water

Executive UNDP

Senior Supplier ENPI through Trama

TecnoAmbiental (TTA).

Project Assurance UNDP Energy &

Environment

Project Organisation Structure

Suppliers

Junior Site Engineer

UNDP Engineer

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iv. Audit

The audit of DIM projects is made through the regular external (UN Board of Auditors) or internal audits (audits managed by UNDP’s Office of Audit and Investigations).

v. Visibility

UNDP will ensure that the Ministry of Energy and Water and respective donors to the project will receive the maximum visibility possible.

UNDP will be responsible for determining when its name and logo are to be displayed and prior written authorisation must be granted by the UNDP Resident Representative on a case by case basis.

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VI. MONITORING FRAMEWORK AND EVALUATION

i. Overall Monitoring Framework

UNDP will undertake periodic monitoring of the progress through regular meetings with the project team. This will allow parties to take stock and to troubleshoot any problems pertaining to the project in a timely manner and to ensure smooth implementation of project activities. Furthermore, UNDP will be responsible for financial monitoring and reporting on all disbursements of the programme to donors.

Monitoring will be a continuous and systematic process review of the various activities and will be intended to;

measure input, output, and performance indicators;

provide regular and up-to-date information on the progress towards meeting the overall Project Objectives;

alert the implementing partners with problems in implementation, and provide basis on which performance may be improved, and

determine whether the relevant stakeholders are responding as expected.

ii. Within the annual cycle

On a quarterly basis, a quality assessment shall record progress towards the completion of key results, based on quality criteria and methods captured in the Quality Management table below.

An Issue Log shall be activated in Atlas and updated by UNDP to facilitate tracking and resolution of potential problems or requests for change.

Based on the initial risk analysis submitted (see section X), a risk log shall be activated in Atlas and regularly updated by reviewing the external environment that may affect the project implementation.

Based on the above information recorded in Atlas, a Quarterly Progress Reports (QPR) shall be submitted by the Project Manager to the Project Board through Project Assurance, using the standard report format available in the Executive Snapshot.

A project lesson-learned log shall be activated and regularly updated to ensure on-going learning and adaptation within the organization, and to facilitate the preparation of the Lessons-learned Report at the end of the project.

A Monitoring Schedule Plan shall be activated in Atlas and updated to track key management actions/events

iii. Annually

Annual Review Report: An Annual Review Report shall be prepared by the Project Manager and shared with the Project Board and the Outcome Board. As minimum requirement, the Annual Review Report shall consist of the Atlas standard format for the QPR covering the whole year with updated information for each above element of the QPR as well as a summary of results achieved against pre-defined annual targets at the output level.

Annual Project Review: Based on the above report, an annual project review shall be conducted during the fourth quarter of the year or soon after, to assess the performance of the project and appraise the Annual Work Plan (AWP) for the following year. In the last year, this review will be a final assessment. This review is driven by the Project Board and may involve other stakeholders as required. It shall focus on the extent to which progress is being made towards outputs, and that these remain aligned to appropriate outcomes.

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VII. QUALITY MANAGEMENT FOR PROJECT ACTIVITY RESULTS

OUTPUT 1: Capacity building and implementation of innovative renewable energy technologies

Activity Result 1

Implementation of pilot projects

Start Date: Jan. 2013

End Date: June 2015

Purpose

Promotion and implementation of innovative technologies in the field of solar energy, especially PV energy.

Description

Site Selection and land dedication for PV-Diesel distributed generation pilot projects. Design and sizing of the local pilot projects. Procurement of equipment for pilot projects. Site preparation and infrastructure. Installation of pilot project.

Quality Criteria

Quality Method

Date of Assessment

Site and land dedication for PV-Diesel selected

Stakeholder approve of selection of beneficiary based on pre-set criteria

End of 2013

Design and size completed Technical TOR and BoQ prepared End of 2013

Procurement of equipment Contract awarded August 2014

Site preparation and pilot project installed

Inauguration of the project March 2015

VIII. LEGAL CONTEXT

This project document shall be the instrument referred to as such in Article 1 of the Standard Basic Assistance Agreement (SBAA) between the Government of Lebanon and the United Nations Development Programme, signed by the parties on 10 February 1986.

Consistent with the Article III of the Standard Basic Assistance Agreement, the responsibility for the safety and security of the executing agency and its personnel and property, and of UNDP’s property in the executing agency’s custody, rests with the executing agency.

The executing agency shall:

(a) put in place an appropriate security plan and maintain the security plan, taking into account the security situation in the country where the project is being carried;

(b) assume all risks and liabilities related to the executing agency’s security, and the full implementation of the security plan.

UNDP reserves the right to verify whether such a plan is in place, and to suggest modifications to the plan when necessary. Failure to maintain and implement an appropriate security plan as required hereunder shall be deemed a breach of this agreement.

The executing agency agrees to undertake all reasonable efforts to ensure that none of the UNDP funds received pursuant to the Project Document are used to provide support to individuals or entities associated with terrorism and that the recipients of any amounts provided by UNDP hereunder do not appear on the list maintained by the Security Council Committee established pursuant to resolution 1267 (1999). The list can be accessed via http://www.un.org/Docs/sc/committees/1267/1267ListEng.htm. This provision must be included in all sub-contracts or sub-agreements entered into under this Project Document.

The UNDP Resident Representative in Lebanon is authorized to effect in writing the following types of revisions to the Project Document, after consultation with the project partners:

Revision of, or addition to, any of the annexes to the Project Document;

Revisions which do not involve significant changes to the immediate objectives, outputs or activities of the project, but are caused by the rearrangement of inputs already agreed to or by cost increases due to inflation;

Mandatory annual revisions which re-phase the delivery of agreed project outputs or increased expert or other costs due to inflation, or take into account agency expenditure flexibility; and

Inclusion of additional annexes and attachments

IX. RISK ANALYSIS

# Description Date

Identified Type

Impact &

Probability (1= low, 5=high)

Countermeasures / Mngt response Owner

Submitted,

updated by

Last Update

Status

1 Political instability and security situation in the country

Project initiation

Security P = 4

I = 3

Close coordination with UN Department of Safety and Security (UNDSS)

UNDP

2 Willingness of other institutions to collaborate

Project initiation

Operational P = 5

I = 4

Ministry of the Energy and Water and UNDP to lobby for the active participation of all concerned stakeholders

UNDP

3 Availability of sufficient data

Project initiation

Operational P = 4

I = 4

Ministry of the Energy and Water and UNDP to actively locate and facilitate data collection

UNDP