The Krakow Energy Efficiency Projec's development objective was to improve the energy efficiency of the city's district heating (DH) system, decrease heat energy consumption by improving energy efficiency at the end-user level, and develop knowledge-based mechanisms to finance energy efficiency projects. The project components included:
strategic and development investments to improve and increase consumer connections to DH and hot water services;
- finance ecological investments including discontinuing coal-fired heat-only-boilers (HOBs) and converting some to gas or oil-firing;
- modernize heat exchange stations; and
- finance heat efficiency investments including introducing computerized systems and training to strengthen institutions.
The evaluation report rates the project as having a moderately satisfactory outcome and a moderate risk to development outcome. Both the Bank and the borrower performances were satisfactory. Lessons learned from the project include:
- When appraising a borrower for an entrepreneurial business, the Bank should focus on the capacity of the borrower to be flexible and entrepreneurial and whether the right type of entrepreneurial people will be available to spearhead the new business model;
- When lending to a borrower that will enter an unfamiliar market, initial loan planning should focus on listing risks and mitigation strategies, and ensuring adequate liquidity to cover acceptable contingencies.