The overall objective of the Russian Federation Municipal Heating Project is to alleviate the financial burden on municipal governments associated with the supply of district heating to the local population. The project aimed to achieve this by improving the operating efficiency of district heating systems through investments to save energy and reduce heat losses; promoting sound cost recovery policies and commercial practices; and supporting government efforts to improve the cost-effectiveness of subsidy programs through better targeting and delivery of subsidies to low-income households.
The evaluation reported satisfactory outcomes with a moderate risk to development and moderately satisfactory performances by both the Bank and borrower. Lessons learned included the following: Continuity of the team working on the project is very important, and strong local leadership and expertise is essential for the regional development programs. Furthermore, project design needs to be realistic and not overly complex, and Sub Loan Agreements need to be finalized before the project is presented to the Board.