Lessons Learned and 
Close-out Report: 
Energy Management 
Consultation and Training 
Project (EMCAT) 
Prepared for
The Office of Environment, Energy and Enterprise 
Prepared by
The Program Operations Team 
Office of Program Support 
USAID/India 
EMCAT Lessons Learned and Close-out Report 
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Contents 
Methodology ...................................................................................................................... 2
Introduction....................................................................................................................... 3
EMCAT Design ................................................................................................................. 4
EMCAT Management ...................................................................................................... 8
EMCAT Impact .............................................................................................................. 12
Lessons Learned.............................................................................................................. 16
Appendix A: Lessons Learned Workshop Agenda, Participants............................... 19
Appendix B: Partner Presentations .............................................................................. 20
EMCAT Lessons Learned and Close-out Report 
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Methodology 
This summary captures the candid reflections by USAID managers and key project 
partners of the USAID/India Energy Management Consultation and Training project and 
its accomplishments, challenges, and lessons learned. 
The one-day lessons learned round-table discussion on which this report is based was a 
cost-effective mechanism for capturing the accomplishments and challenges faced in the 
implementation of this activity. The discussion provided an opportunity to reunite key 
partners and stakeholders and obtain their feedback on what worked and what did not and 
how things can be done better. The informal setting enabled frank discussions, which 
have been captured in this report. 
The text is a dialogue-narrative hybrid. Comments are attributed at a general level. 
Christian Hougen 
Deputy for Program Operations 
Office of Program Support 
USAID/India 
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Introduction 
The Energy Management Consultation and Training Project (EMCAT) was a bold, 
forward-leaning investment by USAID and project partners including the Power Finance 
Corporation, the Industrial Development Bank of India, and Winrock International of 
India. 
In 1991, when EMCAT was designed and initiated, power in India was a state monopoly. 
Despite many very evident shortcomings in the power sector, there was no reason to 
believe that the battle to improve management and efficiency would be anything but 
uphill. This changed shortly after the project started. Provoked by a macro-economic 
crisis, the government of India began releasing its grip over the economy in the early 
1990s. USAID and EMCAT partners found themselves in an entirely new policy 
context. While the original intent may have been a modest experiment in change, after 
deregulation project managers found themselves in a more permissive environment. As a 
result, USAID refined the project to take advantage of this political will for change. For 
example EMCAT was amended to include support for private power development and 
renewable energy policy reforms. EMCAT concluded in 2004, after 13 years and $26.81 
million in USAID funding and a greater amount of in-kind, financial and other forms of 
project partner contributions. 
Stakeholders agree that because of USAID’s higher risk tolerance and USAID and 
partner responsiveness to opportunity, and the evolution of GOI policies in the power 
sector, EMCAT contributed greatly to enduring systemic improvements in India’s power 
policies and the effectiveness of State Electricity Boards. The Government of India and 
foreign donors continue focusing on improving efficiency and effectiveness in power 
generation and distribution reform. USAID continues to respond to GOI priorities in the 
power sector, and most current work builds in some way, on EMCAT partnerships, 
approaches, and accomplishments. 
Large-scale GOI and USAID investments in the power sector created valuable 
partnership experiences under EMCAT. This report summarizes partner reflections on 
design, management, and impact. Lessons learned in design and management are 
summarized below for convenience. 
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EMCAT at a Glance 
[1: Background]
Project Purpose 
Improve India’s technological and 
management capabilities for the supply 
of energy and its end-use by private 
industry and other sectors. 
Signatories, June 28, 1991 
ƒ The Department of Economic 
Affairs, Ministry of Finance (DEA)
ƒ Power Finance Corporation (PFC) 
ƒ Industrial Development Bank of 
India (IDBI) 
ƒ USAID 
EMCAT Design 
In India at the time EMCAT started the power 
sector was completely controlled by the state. 
It is still largely managed by the public sector. 
In the late 1980s and early 1990s, generation 
and distribution were major policy issues. The 
GOI had no policy reform models or 
experience, and few donors were willing to 
become involved. There was also little donor 
awareness. What did “reform” mean? “We 
weren’t sure,” said an Indian project partner. 
India had monolithic organizations, with many 
feedback and communication and coordination 
problems. “We are happy that USAID dared to 
enter this area, and that’s one reason we see 
power sector reform advancing today,” said 
another. 
USAID was bold…. USAID had worked in the power sector for many years. In the case 
of EMCAT, design assistance from Washington was requested. Negotiating this 
agreement took time. The goal was to help the Power Finance Corporation (PFC) 
coordinate with the World Bank and Asian Development Bank (ADB). USAID 
facilitated an MOU among USAID, the World Bank, and the ADB. Then-Mission 
Director Bob Bakely was instrumental. The World Bank requested USAID to be on their 
mid-term evaluation team for approval of their loan to the PFC. Negotiating the MOU 
took a long time. The PFC was new, and the World Bank and ADB were looking at the 
PFC as their main partner. If either the World Bank or ADB had pulled out, USAID 
might also have pulled out. USAID gained a lot of leverage by having donors work 
together. 
…And sought new partners. The PFC and IDBI were brought in together from the 
start, in consultations at least, which was smart. USAID wanted to expand institutional 
partners and looked to the IDBI to see if they were interested. IDBI was initially wary; 
they didn’t want to be evaluated by outside consultants, which would have accompanied 
USAID involvement. This was eventually resolved. 
How much did USAID involve the partners in design? Design was 80 percent 
complete before USAID involved its partners. Prior to this design it could not be 
discussed with partners. Back and forth dialogue with the partners nevertheless persisted 
for almost six months, largely becomes the project was new to PFC and IDBI. (It was a 
focused approach to institutional development in the power sector.) 
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EMCAT at a Glance
[2: Key Players] 
The Power Finance Corporation, 
PFC 
ƒ Established 1986 to provide financing to the 
power sector 
ƒ 100 percent government owned 
The Industrial Development Bank 
of India, IDBI 
ƒ A public financial institution established in 
1964. IDBI has helped found many 
institutions, including the Securities 
Exchange Board of India and Export Import 
Bank of India
ƒ Helped develop India’s domestic financial 
sector
Winrock International 
ƒ An independent not-for-profit development 
organization managing energy, 
environment, natural resource management 
and sustainable development activities 
Design Strengths and Weaknesses 
The design evolved. From the Indian side, there were no problems with design. It was 
an evolving design, and the project’s direction changed in the early 1990’s in response to 
opportunities; this made the activity effective. The design was excellent. When starting 
something new, variation from country to country and industry to industry is imminent. 
Allowing for corrections in the Indian context was critical. The basic design achieved 
noble purposes. In reality, though, part of the evolution was funding-driven: in 1995 
USAID/Washington offered $5 million to support greenhouse gas mitigation and invited 
Mission proposals. Washington funded USAID/India’s proposal, which added a focus on 
renewable technologies policy development and commercialization. In 1996, a four￾person midterm evaluation team 
recommended new activities, identified 
new beneficiaries, and re-emphasized 
the need for USAID/India to focus on 
power sector reform. Again, reforms 
were not in the picture at all at the time 
of the original EMCAT design. 
State Electricity Boards are a tough 
nut. One project objective was to help 
the PFC improve. They have, but the 
State Electricity Boards (SEB’s) have 
not. Their finances are still bad. The 
project ought to have provided more 
training for SEB’s. USAID wanted to 
improve SEB performance through PFC 
lending, using PFC’s conditionality to 
influence SEB policies and 
performance. USAID’s original idea 
was that PFC would be a catalyst 
through lending. But the project took a 
different turn. 
Do you think SEBs were adequately 
addressed? USAID utilized all the 
opportunities within EMCAT to engage the SEBs. The PFC went to all the SEBs and 
encouraged as much participation as possible. For example, EMCAT project teams were 
mandated in the utilities. . The Orissa model stumbled, but some of the determination of 
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EMCAT at a Glance 
[3: Assistance Provided] 
ƒ USAID Direct Disbursement – 
U.S. contractors, grantees, Power Finance 
Corporation and Industrial Development 
Bank of India for their local currency 
expenditures U.S. Contractors - TA 
to Power Finance Corporations and State 
Utilities
ƒ IDBI – TA on energy efficiency
ƒ Power Finance Corporation & 
Industrial Development Bank 
of India – TA, studies, training for 
local institutions and NGOs
ƒ Power Finance Corporation and 
State Utilities – Limited 
commodity procurement
success and failure depends on one’s time scale (more on this below). 1
 The Orissa model 
is still progressing, and performance may improve. It may simply be too early to expect 
success. 
Change is slow, slower still in India... The U.S.A. faced setbacks and failures in 
electrification, and many of the results of any assessment of success and failure depend 
on the time frame used. In this case, in the power sector in India, change takes time 
because of the unique system. India is aware of the need for reform today. For political, 
commercial, and financial reasons, reform foes not take place overnight. Setting 
priorities is also difficult: generation or distribution? Power distribution is a large arena 
catering to many interests. The 
government continues to come up with 
schemes of free power, for example the 
Congress government’s plans to provide 
free power to farmers in Andhra 
Pradesh. These large-scale reforms 
require a longer time frame in India. 
…And culture matters. In addition to 
technological change, cultural change is 
also very important. Accountability 
through technical change, for example 
computerization of accounts, is faster 
than accountability through cultural 
change, but cultural change is required 
for systemic impact and sustainability. 
USAID agrees that change in 
technology is faster than change in 
culture; change in culture in is a slow 
and sensitive process in any society. 
Financing: Someone has to provide the money, but 50 percent cost share 
contribution levels are just too high. Financing is important to project implementation. 
USAID gave some financial support. Through Winrock USAID was financing renewable 
energy commercialization activities under EMCAT and Winrock is still working with the 
reflows, but the 50 percent matching funds requirements continue to be a major hindrance 
for borrowers. If the borrower could provide 50 percent of the funds they need would 
they borrow from USAID? Conditional grants do help companies, but this type of 
 
1
 The Orissa model included unbundling SEB generation, transmission, and distribution functions, and 
moving towards privatization of electricity generation and distribution 
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EMCAT at a Glance
[4: Program Evolution] 
1991, Authorization 
$20 million life of project funding level ($14 m 
for supply and $6 m for end-use) 
1994 
ƒ Amended to support private power 
development 
ƒ LOP increased by $2 m 
1995 
ƒ Amended to support renewable energy 
policy development 
ƒ LOP increased by $5 m 
1996 
ƒ PACD extended to December 1999 based 
on midterm evaluation results 
1997 
ƒ Supply side component ended in March, a 
design study is conducted that focuses on 
restructuring and regulatory reform 
ƒ PACD extended to June 2001 
2001 
ƒ PACD extended to December 2002 
2002 
ƒ PACD extended to June 2004 
financing does not come from Indian financial institutions. The IDBI for example does 
not provide finance for high risk projects. Nobody will finance them, even if the lender 
only gives a little. Captive power, or bulk producers, the large financial institutions such 
as PFC and IBDI, are comfortable with those. If you are looking at an electricity service 
company with market uncertainties, the lenders are much more hesitant. From the IDBI 
side, again nobody should expect to be given 100 percent funding. To give 50 percent of 
a loan with a very long repayment period is generous and very rare in any country. And 
if you lend someone 100 percent, they have no stake in the project. No funding should be 
made without participation of the party involved. This is Winrocks’s point exactly: when 
loans are given there is a contribution requirement, but 50 percent using Winrock as an 
example, is too high. 
Was the loan component successful? How was USAID’s design of the loan 
component? Was it useful for generating projects? Project partners found that yes, it was 
a real force for co-generation projects. Today, for example, sugar co-generation projects 
are doing very well because of the 
profitability of co-generation, not 
because sugar is doing well. The 
government cannot allow sugar prices to 
increase because of public outcry; they 
would even accept one rupee less than 
current prices. Sugar company revenues 
are coming more and more from the 
production of the molasses that goes 
into ethanol and from the sale of 
electricity than from sugar. These 
projects started because of USAID 
activities under EMCAT. 
If you could change one thing? From 
the PFC side, improvement in the 
quality of participation in the project 
team was needed. From the IDBI side, 
it is hard to think of a better form for the 
project at that time. If it were designed 
now, what would be done differently? 
The accountability of project 
implementers could be improved. Time 
frames could have been fixed. 
Participants could have been made more 
accountable to time commitments. 
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EMCAT at a Glance
[5: Primary Agreements] 
- Demand Side Component - 
Contracts 
ƒ Resource Management 
Associates: TA $2.76 m 
ƒ IRG Task Order: TA, 
Energy efficiency $2.49 m 
ƒ SRC: Study of Energy 
Service Companies (ESCOS) $0.12 m 
Grants, Cooperative 
Agreements, and PASAs 
ƒ Winrock: Renewable Energy 
Commercialization (RECOMM) $1.09 m 
ƒ Winrock: Accelerating Renewable Energy 
Commercialization (ARECOMM) $.49 m 
ƒ International Executive Service 
 Corps Volunteer Program $0.650 m 
ƒ IIE: Energy Training $0.65 m 
ƒ Institute for Transportation and 
Development Policy: $0.291 m 
ƒ Improved Cycle Rickshaw 
ƒ Industrial Development 
Bank of India: Studies $1.20 m
EMCAT Management 
USAID was too removed from implementation. From the Indian project partners’ 
perspective, we see that USAID’s use of contractors insulates USAID from 
implementation and from liabilities. 
There is little interaction between project 
partners and USAID. Most of the 
interaction is with USAID contractors. 
PFC had frequent problems working with 
the contractor, especially relating to the 
scope of work and work quality. USAID 
does not get involved in day-to-day 
operations, therefore when the contractor 
comes to USAID with a problem the 
problem is already very advanced and 
damage has been done. How can this be 
avoided? 
Not all were bad, but the chiefs of party 
were a general problem. From a USAID 
perspective, the contractor’s chief of party 
(COP) is very important. USAID had 
poor experiences with them. The 
contracted firm was good, but their choice 
of people was a problem. It is hard for 
USAID to change the COP. As a result of 
this problem, contract value and duration 
were reduced to avoid even more 
problems. From experience on the Indian 
side, USAID has organized training and 
workshops that proved to have no new 
technical value or new ideas because the 
COP was a technocrat. When that COP 
was replaced, quality in technical 
assistance improved. 
How about the GOI? What was the government’s involvement and was it helpful? 
USAID experienced few problems with the Ministry of Power (MOP), but did experience 
some delays with the Department of Economic Affairs, Ministry of Finance. Another 
Indian EMCAT partner emphasized: as long as the government is not directly involved in 
implementation, that will contribute to success. And the government did not interfere. 
“As long as the government allows you to function that is a major contributor to success”, 
said one partner. The government’s participation in Project Review Committee (PRC) 
meetings, however, had a positive outcome. 
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EMCAT at a Glance 
[6: Primary Agreements] 
- Supply Side Component - 
Contracts 
ƒ Bechtel: TA & Training $5.66 m 
ƒ K&M Engineering: Private 
Power Development $1.44 m 
ƒ IRG Task Order: Regulatory 
Reform & Restructuring $4.10 m 
ƒ Midterm Evaluation $.07 m 
Grants, Cooperative 
Agreements, and PASAs 
ƒ U.S. Energy Association: 
Energy Partnership Program $2.33 m 
ƒ Pittsburgh Energy Technology Center 
(PETC), U.S. Department of Energy: 
Power Plant Life Assessment $1.50 m 
ƒ IIE: Energy Training $0.650 m 
ƒ Power Finance Corporation 
(local currency costs) 
Training, studies, website $1.6 m 
ESCOs and the MOP. The Energy 
Service Companies (ESCOs) are now 
operating and the Energy 
Conservation Act of 2003 is in place. 
EMCAT contributed to this. The GOI 
created a Bureau of Energy 
Efficiency, which did not exist earlier. 
In the beginning of EMCAT, the MOP 
was not directly involved in the 
project; they were on the PRC. When 
the reform of the power sector started 
in 1997, the MOP wanted to get 
involved. The MOP designated two 
directors as authorized reps and took 
an active role in reviewing SOWs and 
meeting with consultants. 
Project staff worked in MOP, 
helped lead reform planning. 
EMCAT set up a regulatory and 
restructuring reform cell within the 
MOP, working directly with the MOP 
to give them the capacity to respond to 
queries on reform and restructuring. 
Management and impact would be 
improved by having candid 
discussions like this during 
implementation. From the NGO side, there were workshops to publicize project 
activities and technologies, but major financial institutions and development 
organizations need to come together in discussions once or twice a year. It will add to the 
results of any future programs. 
Lending was a challenge, but Winrock met that challenge. The purposes of the 
Renewable Energy Commercialization (RECOMM) and Accelerating Renewable Energy 
Commercialization (ARECOMM) components of EMCAT, managed by Winrock, were 
to provide finance where others were reluctant. Winrock is a development organization, 
not a financial institution. Commercial lending was a major challenge. USAID had a 
Project Investment Committee with four members from different sectors to examine 
proposals for lending. The lending committee then approved rates, etc. That committee 
(on RECOMM) helped Winrock to grow and think like a finance institution in the 
development sector. The financial discipline and technological expertise gained was 
valuable. Winrock now manages the reflows. 
EMCAT Lessons Learned and Close-out Report 
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PFC initially lacked coordination… PFC didn’t have effective Project Review 
Committees. First, the composition of the project review committee was a problem. It 
had SEB, MOP, and PFC members; new people came to each meeting. There was no 
continuity, and discussions had to start from the beginning each time. 
…but IDBI managed project committees and grants well. IDBI was effective: they 
lead their proposal review committee, which had 10 people, including from a university. 
On average, seven would attend for good, effective reviews of proposals. These same 
people were on the committee for three years. Lessons: composition, continuity, 
competence, and committee SOW are important! 
How would you compare the productivity of foreign and local consultants? The 
quality of products from expats was not reliably great; many just give their expert opinion 
based on collecting information locally. The comparative advantages between expat and 
local consultants, therefore, isn’t so clear. From the USAID controller’s perspective, this 
issue comes up a lot, usually after a problem. (Sometimes Indian participants need 
external consultants to catalyze resource commitments.) USAID has seen a slow 
migration from foreign TA to local expertise, but much of this local expertise has been 
developed, harnessed, focused by USAID. As a result, after some time a situation is 
presented where the same consulting resources are available in India for about half price, 
though with some continuing participation from the U.S. 
From the Indian perspective, the cost of foreign consultants will always be expensive. 
But the point is, was the contribution sufficient based on quality and innovation, not 
necessarily cost? Expats provide many good points for follow-up by local people. 
Remember: many big projects taken by big Indian corporate players have failed. 
Foreign consultants are required to facilitate agenda-setting and stakeholder buy-in, spark 
innovation, and build local expertise; foreign consultant participation should decline over 
the life of an activity. 
Two funding successes: direct disbursements and clean audits. From the USAID 
Controller’s perspective, EMCAT achieved two financial management successes. One 
was the direct disbursement mechanism where USAID would directly fund the project 
partners. This was a major success. Routing money through the GOI was, and continues 
to be, a time consuming process which slows the pace of the project. On the other hand, 
in the last 10 years, USAID has never received a call from a direct disbursement partner 
claiming that USAID funds never came. The second was all the audits under EMCAT 
were clean; there are no pending audit issues. 
From the USAID controller’s office: a big thanks to the PFC and IDBI. The USAID 
controller’s shop offered appreciation to PFC and IDBI for putting in efforts without 
charging anything. This showed in the substantial Host Country Contributions made to 
this project and their institutional commitment and contribution. PFC and IDBI 
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commitment is one of the main reasons for success of the project: they put in 100 percent 
and did something innovative and new for the country. 
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EMCAT at a Glance 
[7: Collaborative 
Management] 
Project Review Committees (PRC) 
Guided project implementation; energy supply 
component/committee chaired by the Power 
Finance Corporation (PFC), energy end-use 
component/committee chaired by the Industrial 
Development Bank of India (IDBI) 
GOI Authorized Representatives 
PFC and IDBI were original authorized 
representatives. The Ministry of Power later 
nominated additional authorized representatives 
for the project’s supply side component 
Grant Proposal Review 
Grant proposals under the end use component 
were reviewed and approved by the PRC. The 
IDBI monitored the grants 
EMCAT Impact 
Indian partners emphasized the size of 
India. If India were smaller we could 
all have a shorter time span. But India 
is huge, with cultural and language 
variation, huge numbers of staff in the 
power sector, and a huge number of 
minds to change. It takes time to 
build critical mass to sustain 
momentum. Therefore times scales 
need to be big, too. Let’s review the 
timeline. The GOI introduced 
economic reforms in 1991. 
Privatization in electricity began 
cautiously in 1991, but electricity 
reforms only started in about 1994. 
By the mid-1990’s EMCAT was 
creating an environment among 
receptive utility personnel for change 
(unbundling, commercialization, etc.). 
This is only a 10 year period for 
affecting major changes. 
EMCAT was like a seeding program. Ten years later, effects are being seen. Quite a few 
renewable energy projects are doing well: mini and micro projects. The sugar industry 
will do very well this year, partly because of co-generation projects. This is like sowing a 
seed that takes 20 – 50 years to grow. 
Some of the demonstration activities under the end-use component were successful, some 
not. Experience is important, whether successful or not, and it often takes a long time to 
know one way or the other. For example in the case of waste heat recovery: many 
participants were not previously aware of the concept of recovering heat and now they 
are. 
What was made possible on accelerated by EMCAT? Workshops and training 
programs helped a lot: they improved communication and networking and information 
and idea sharing. It became easier for many people to accept and implement new ideas 
after they had been introduced through workshops. They helped the GOI formulate 
energy conservation rules and regulations. People will not change their thinking because 
they’ve read a report. Workshops are better. 
Through these workshops, helpful communication started at the top and middle 
management levels. One result of workshops, beside awareness building, was 
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networking and sharing of ideas across state boundaries. Different SEBs deal with 
different problems. Interaction between them is usually only at the top, not at the middle￾level. As a result, there is no cross-fertilization or sharing. Under EMCAT many 
workshops were hosted, communication started, and people met and found their own 
ways of communicating. SEB personnel were not internet or computer savvy, so the 
Powernet (the EMCAT-supported with site) was only useful to a small number of 
managers. If those managers were computer savvy, they would extend the technology 
through the industry. Powernet was a seed activity, and worked. Everyone started web 
sites and expanded their computer networks. SEBs had to increase their network 
capacities. In many indirect ways EMCAT workshops helped improve electricity 
efficiency because the answers to one SEB’s problems were applied by other SEBs. 
There can’t be a one-to-one connection between workshops and results, but the USAID 
partner side saw an impact. 
The USAID perspective. The quality of partnerships is what is responsible for any 
USAID success, and this means IDBI, PFC, Winrock, and others. We have forged 
something that is greater than the sum of its parts, with tangible success. We’ve 
influenced policy and current bilateral project design. Now state utilities are receptive to 
the reform agenda. To truly affect development we have to move outside the core power 
sector: we have to reach out to policymakers and consumers. We can help them 
appreciate why reform is important. 
Partner selection is critical to impact. Indian partners agreed that USAID did an 
important thing in selecting PFC and IDBI. This was a good choice of partners. Any 
commercial bank wouldn’t participate in an EMCAT-like project for such low returns. 
USAID and these organizations selected good people who went out of their way without 
compensation. In fact, it is not that IDBI was not aware of conservation, but this program 
has helped all players focus including individual end users, on conservation. This was 
brought about through workshops and training. 
If partner selection is so important, what did we learn in EMCAT? The IDBI is 
changing into a commercial bank and may not want to participate in an EMCAT-like 
project in the future. Development oriented organizations are needed, not profit-driven 
banks, to provide investment. From the NGO side, commercialization has to be in every 
activity and promoted by every partner, otherwise the incentives for partnership and 
participation are weak. Project progress is almost ensured if there is a commercial 
incentive. USAID feels it is important to have detailed discussions before the project 
starts to maintain clear and mutual understandings to prevent implementation problems. 
In the market place of ideas, EMCAT was attractive. India is a large country, and 
different kinds of people all over are trying to do different things. Many people came 
into this project and started implementing, which speaks highly of the schemes objective. 
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EMCAT at a Glance 
[8: Money Matters] 
LOP Funding: $27.00 m 
Obligations: $26.81 m 
Commitments: $26.81 m 
Expenditures: $26.76 m 
A whole new level of consciousness about conservation. Many EMCAT-seeded hydro, 
biomass, and other projects are going well. Steel mills can improve their power 
efficiency by using waste heat, and this is exactly what they are doing. This awareness is 
a result of EMCAT. Now the rising cost of energy is also driving energy conservation. 
Conservation is a much more deeply engrained, and has to go to every individual. 
Market prices help drive that change in behavior. 
Training paved the way for change. The Power Finance Corporation coordinated nine 
training programs in the Untied States. The most useful programs were in collaboration 
with Harvard University faculty. Harvard collaborated in three programs with 45 people 
each. These helped people understand the many reforms that were discussed. People 
who went to the United States for training remember the Power Finance Corporation. 
Participants took pride in their training, and the PFC believes the impact has been 
sustained. For example, the influence of workshops on state-level organizations seeded 
new ideas and ways of talking that have contributed to progress today. (The Department 
of Economic Affairs vetted candidates for training in the United States. The Power 
Finance Corporation was consumed by DEA delays and clearances). 
2,000 people were trained, but where are they now? How can we build on their past 
participation? In-country training was more effective in spreading messages. USAID 
wondered, do we know where the 2,000 people we trained are and how they were 
impacted? IDBI has a list of all participants: some retired and may be doing consultancy 
work; in any training and education program, you will have a lot of migration. From the 
USAID side, though, 2,000 people is a large resource built up under EMCAT. However, 
partners responded that finding them would be very time consuming and not cost 
effective. Wherever these EMCAT trainees have gone, the impact is there. It cannot be 
measured. They will be contributing in some form or another. 
Funds availability. As a result of EMCAT, more funds are now made available for 
implementing energy efficiency demonstration projects in industry. The rise of oil prices 
to $50 a barrel will further drive energy efficiency investments, and many will be based 
on work conducted under EMCAT; these activities assume greater importance in 
response to changes in fuel prices. 
EMCAT training continues. USAID 
stopped funding the PFC’s training 
activities in 1998, but EMCAT training 
continues: the PFC provides 8 – 10 
training programs every year for 
borrowers from state power companies. 
This training and other EMCAT 
investments have helped build 
institutional capacity and improve 
accountability in the power sector. At the policy level, documents generated in EMCAT 
EMCAT Lessons Learned and Close-out Report 
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are still used in the PFC (those documents were generated in consultation with TA 
consultants and experts from SEBs and MOP). 
Winrock generated many firsts as an NGO partner participating in renewable 
energy financing. USAID granted funds to Winrock. Winrock financed 8 projects, 
helping increase private sector investment in alternative renewable energy. Transaction 
costs for NGOs in project financing are very high. However, the repayment of these 
funds has created reflows that flow back into the fund, which Winrock continues using 
for the commercialization of renewable energy. These reflows have been important to 
the sustainability of EMCAT and, for Winrock, reflows represent their return on all their 
efforts over seven years of EMCAT. Winrock provided funding at the pre-investment 
phase, for example helping to develop business plans. Pre-investment financing remains 
a challenge. Winrock’s work helped develop trade links between U.S. and Indian firms 
that resulted in technology transfer to India. 
Winrock deepens and expands its capacities. Partly as a result of its work with 
EMCAT, Winrock has entered into the field as professional certified energy auditors. 
India never had energy auditors before; even now this remains a significant project 
accomplishment and a major improvement in the Indian energy system. 
Energy Service Companies. EMCAT financing partners helped set up several of India’s 
Energy Service Companies by way of soft loans. 
Current USAID energy projects build on EMCAT. Lessons learned from EMCAT 
help inform the current USAID – GOI bilateral energy projects, DRUM and ECO. PFC 
is a partner in the DRUM project, playing a financing role. ICICI is a partner in ECO. 
ECO has been ongoing for four years, with a policy and market emphasis on energy 
efficiency. USAID also advises that some activities are being taken up under the current 
bilateral electricity distribution reform project, DRUM. DRUM focuses on distribution 
reform upgrades and management. 
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Lessons Learned in Design and Management 
Design 
ƒ Designs should be flexible and allow for course corrections. 
ƒ Identify key partners in the design stage, come to a clear understanding of each other 
at an early stage, and share information to avoid problems during implementation. 
ƒ The Department of Economic Affairs, Ministry of Finance, took time in providing 
approvals to participating training in U.S., causing delays. The Power Finance 
Corporation played an important role in following up with DEA. The PFC found that 
“maximum time was consumed in getting DEA approvals.” 
ƒ Energy projects have to focus on commercialization (profitability and market 
viability) at the partner and consumer level. 
ƒ Commercial financing agencies in India today are still reluctant to finance renewable 
energy projects in the small and medium enterprise sector. As a result, working 
capital finance remains a challenge. Small and medium renewable energy enterprises 
need venture capital in addition to loan capital. 
ƒ Innovative financing is required to match the needs of renewable energy borrowers, 
such as up-front costs, variability in cash flows, sizeable working capital 
requirements. 
ƒ 50 percent matching contribution requirements for renewable energy project may 
have been too high (50 percent of renewable energy project costs had to be covered 
by the borrower). 
ƒ Non-profit organizations, in this case Winrock International, can support commercial 
lending. Project partners should include a mix of financial institutions and NGOs. 
ƒ Transaction costs in an NGO lending program can be high because paperwork and 
process requirements are the same for large and small loans. 
ƒ Energy and pollution are linked; energy projects naturally should also address 
pollution. 
ƒ Project Review Committees (PRC’s), a new concept, were useful when well-run. 
Useful PRCs were characterized by consistent membership. Those not useful were 
characterized by short-term, rotating membership. 
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ƒ Focused training has a greater impact on local institutions. 
ƒ Institutional development is important. 
ƒ New projects cannot expect free services from partners today because the working 
environment and relations have changed. This will affect sustainability planning. 
ƒ Indian counterpart institutions selected for implementing USAID projects need to be 
paid fees for managing the project unlike in the past when some institutions provided 
free service as a sort of development mandate. 
Management 
ƒ Changes in personnel at partner institutions impaired collaboration, reduced the 
effectiveness of project review committees, and caused implementation delays. 
Project managers should require stakeholders to commit to the continuity of the 
project team. 
ƒ Contractor personnel sat in the Power Finance Corporation offices and this close 
interaction between the USAID contractor and partner institutions improved impact. 
ƒ People skills are critical to effective management. 
ƒ Direct payment mechanisms are more efficient than routing the funds through GOI. 
ƒ Include the Department of Economic Affairs (DEA) in project reviews and 
evaluations so they can appreciate the extent to which (1) GOI project partners and 
donors share a common agenda and (2) efficiency and effectiveness may be 
enhanced. 
ƒ USAID should neither micro-manage nor be too remote and hands-off. 
ƒ Record success and share information about successful activities. 
ƒ Foreign consultants are required to facilitate agenda-setting and stakeholder buy-in, 
spark innovation, and build local expertise. Foreign consultant participation should 
decline over the life of an activity. 
ƒ Host country contribution and commodity procurement reports may take a long time - 
up to one year in some cases. 
ƒ Like Project Review Committees effective proposal review committees require both 
steady membership and good management to be effective. The same core group must 
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participate for the duration of the activity. Composition, continuity, competence, and 
committee SOW are important. 
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Appendix A: Lessons Learned Workshop Agenda and 
List of Participants 


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Appendix B: Partner Presentations 




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Appendix B: Partner Presentations – Power Finance 
Corporation 


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Appendix B: Partner Presentations – Industrial 
Development Bank of India 



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Appendix B: Partner Presentations – Winrock