Ratings for the Kiev District Heating Improvement Project for Ukraine were as follows: outcomes were moderately unsatisfactory, the risk to development outcome was substantial, the Bank performance was satisfactory, and the Borrower performance was moderately satisfactory. Some lessons learned included: For a project of this kind, even if the heating system is designed locally, it is important to use the services of advisors on a regular basis for updating technical know how and learning international best practices on the technical design and other aspects of heating systems. For boilers, it is better to have one contractor for both goods supplied and installation works. This will insure that responsibility is not divided and that the total costs are known from the start. Training of the key staff involved in the project, not only from project implementation unit (PIU) but from the subsidiaries as well, should be conducted in the very beginning of the project implementation. In light of the political sensitivity of raising the heat tariff on households and effective cost recovery, it is worth considering alternative means of reducing the impact of price hikes on the poor. There are better targeted means than flat rate tariff reductions, including social transfer systems and life line tariffs.
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