sdlfdkjfsklPROJECT BRIEF

1. Identifiers
Project Number				TUN/98/G32
Project Name	Tunisia - Experimental Validation of Building Codes and Removal of Barriers to their Adoption
Duration					1 January 1999-31 December 2002
Implementing Agency			United Nations Development Programme
Executing Agency	Government of Tunisia/Agency for Energy Management (AME)
Requesting Country			Tunisia
Eligibility					Tunisia ratified the FCCC on 15 July 1993
GEF Focal Area				Climate Change
GEF Programming Framework		Removal of Barriers to Energy Efficiency and 							Energy Conservation, Operational Programme 							Number 5
2. Summary
Tunisia’s Agency for Energy Management (AME) has estimated that total energy consumption in Tunisia will increase from 4.3 Mtoe in 1996 to 14.2 Mtoe in 2020.  Due to a shift in sectorial demand, the service and residential sectors will together represent the largest energy consumer by 2020, the main source of increased energy demand being the building sector. The Government of Tunisia has therefore decided to adopt regulatory measures introducing energy efficient building standards for new buildings.  This process will begin with minimum standards to be introduced in 1999, culminating in the endorsement and adoption of maximum standards by the Government of Tunisia by the year 2002.
For significant energy savings to be achieved, it is essential that the regulatory measures introducing maximum standards be adopted. At the present time, a certain number of critical barriers exist which could prevent or indefinitely postpone their adoption.  Through the proposed project, an Experimental Validation Process - EVP accompanied by targeted barrier removal activities will be carried out between 1999 and 2002 to validate already developed energy efficiency codes and ensure their adoption as standards.  Without such validation and barrier removal, it will not be possible for the Government of Tunisia to adopt the regulatory measures to impose the standards.

3. Costs And Financing (Million Us$)				(US$ 1 = T. Dinars 1.15)

	GEF 			- Project			:	US$   4.23 million
				- Project Support Services	:	US$   0.130 million
- PDF				:	US$   0
Subtotal GEF			:	US$   4.36 million

Cofinancing   
			- IA				:	US$   0
			- Other International		:	US$   1.97 million (FFEM)
								US$  1.80 million (AME/TEEF)

Total Project Costs				:		US$   8.13 million

4. Associated Financing (Million Us$)

European Commission (Preparatory Studies Process)			US$ 0.3 million
Tunisian Contractors (Public and Private sector)				US$ 94.10  million
				
5. Operational Focal Point Endorsement

Name:		Ms. Amel Benzarti		Title:	Director, International Cooperation
Organization:	Ministry of Environment	Date:	22 April 1998.

6. Implementing Agency Contact

Mr. Karim El Nagdy, GEF Climate Change Officer, Regional Bureau for Arab States, UNDP
One UN Plaza, DC-1-2240, 10017, New York, NY, USA
Tel: (212) 906 5496, Fax: (212) 906 5487, email:  kelnagdy@undp.org

BACKGROUND AND CONTEXT

Background

In early 1990, the Tunisian Agency for Energy Management (AME) identified the service and residential sectors as the main source of an expected future surge in demand for energy in Tunisia.  AME went further to clarify that this expected surge, and accompanying shift in sectoral demand will mainly be due to increased activities in the building sector.  As a result, the Government of Tunisia identified the building sector as the main target to curb the rise in future energy demand and that, as a result, the initial and most important step towards achieving this objective would be the adoption of energy efficient building standards for new buildings.

Initial efforts towards achieving this objective began in 1991 in the context of a regional programme for energy efficiency in buildings in the Maghreb countries (Tunisia, Algeria and Morocco) with support from the Directorate General for Energy of the European Commission. The Tunisian authorities who achieved quick results under the regional coordination of AME quickly embraced this programme (Réglementation Thermique Magrébine des Bâtiments - RTMB).

The RTMB programme is divided into three phases. Phase 1, the Preparatory Studies Process (PSP);  Phase 2, the Experimental Validation and Barrier Removal Process (EVP) for which GEF support is requested, and Phase 3, the Implementation Process focusing on the adoption of the regulatory measures to introduce maximum standards by the Government of Tunisia.  For a more detailed description of the RTMB programme please see Annex 4.

The PSP has identified a certain number of barriers to the sustainable and successful adoption of the new regulatory energy efficiency building measures at maximum levels by the Government of Tunisia. The present proposal is designed to remove these barriers and ensure the future “implementation of win-win projects following the removal of barriers”. As such the project falls within the programming context of Operational Programme No. 5 “Removal of Barriers to Energy Efficiency and Energy Conservation” of the GEF Operational Strategy.

If the identified barriers are not removed, it will not be possible for the Government of Tunisia to adopt the standards, despite the long term economic (in terms of energy savings) and environmental (in terms of reduced greenhouse gas emissions) advantages for the country.  The regulatory measures in question are designed to ensure that energy efficient building codes and practices are used in the design and construction of all new buildings in the Tunisian commercial and residential sectors.

Energy Consumption in Tunisia

Tunisian energy prices (both electricity and fuel) have been rationalized and have steadily evolved toward world market prices.  Even more complex pricing mechanisms such as Time of Use tariffs have been introduced operationally and are being enforced. This trend has ensured that many of necessary financial incentives for energy efficiency have been put in place. 

Between 1970 and 1996, total energy consumption in Tunisia grew at an average annual rate of 3.5% reaching 4.27 Mtoe in 1996, up from 2.93 Mtoe in 1985.  Over the last decade, sectorial demand has also evolved towards an increase in the share of service and residential sectors, with an accompanying reduction in the share of the industrial sector in relation to the total demand.

Improved living standards, the development of the service sector, and the more generalized use of heating, lighting, water heating and air-conditioning resulted in a 15.6% increase in the combined share of the service and residential sectors between 1985 and 1996.  During the same period, the share of the industrial sector, traditionally the largest consumer of energy, declined by 13.8%, while the share of the transport sector, which increased in line with GDP, remained stable.

A study carried out by AME in 1997 as part of Tunisia’s Agenda 21 programme demonstrates that energy demand will increase dramatically over the next three decades.  The tendency for the combined share of the service and residential sectors to increase will also continue, and as from 2011, the service and residential sectors will together account for most of the energy demand.  Once more, this was identified as being mainly due to the increased consumption in the building sector.

Evolution of Energy Consumption by sector 1985-2020

				1985		1990		1996		2010  		2020
										(*est)	              (*est)
Total Energy			Mtoe		Mtoe		Mtoe		Mtoe	              Mtoe
Consumption			2.9		3.5		4.3		9.3		14.2

Share by sector			%		%		%		%		%

Industry				40.6		40.9		35.1		29.5		28.1
Transport			32.3		30.2		31.8		32.8		31.8
Residential/Tertiary		21.1		22.3		25.4		32.0		35.6
Agriculture			6.0		6.6		7.7		5.7		4.5

(*est) assuming an average 5% per annum progression in energy demand between 1996 and 2020

(Source : AME - Energie 21 : Analyse de la Demande et Maîtrise de l’Energie September 1997)	
Table 1:  Energy Consumption Trends

Energy Conservation and Policy Strategy

Tunisia is one of the few developing countries that has chosen to adopt a coherent energy conservation policy.  A National Energy Conservation Plan was initiated at the beginning of the 1980s. The objective of the plan was to limit the increasing demand for energy, to promote the use of natural gas and to develop renewable energy.  In 1986, the Tunisian Agency for Energy Management (Agence pour la Maîtrise de l’Energie - AME), was created within the Tunisian Ministry of Industry, to develop and implement the necessary measures to achieve the objective of this plan.

At the outset, the need for energy conservation was economically driven as a result of fuel shortages and existing high level of energy prices.  Since the beginning of the decade, however, awareness as to the absolute necessity to limit the increase in greenhouse gas emissions resulted in AME integrating climate change mitigation considerations into its programmes. 

Following Tunisia’s ratification of the Framework Convention on Climate Change, two important measures were taken in the energy sector;

•	Adoption of the Energie 2010 Action Plan. The plan’s objective is to: (i) maintain a balance between energy supply and demand, (ii) provide sufficient energy resources to permit economic growth, and (iii) to protect the environment.

•	Adoption of new legislative and regulatory measures in 1993 and 1994 that (A) provides financial incentives for (i) energy audits and (ii) energy efficient demonstration projects, and (B) reduces import duties on energy efficient and renewable energy equipment.

Between 1986 and 1995 (first ten years of AME operation), energy efficiency efforts were concentrated on the industrial sector. Energy savings during this period are estimated at 1,000 toe.  The Government of Tunisia’s main objectives for the period 1995 to 2010 are (i) to improve energy efficiency in the main sectors of the economy with the objective of reaching 1.1 Mtoe of energy savings annually from 2010 onwards, and (ii) to develop the use of renewable energy technologies.  It is estimated that planned energy efficiency and conservation measures will result in total energy savings during the period 1995-2010 of 7.6 Mtoe.

The adoption of regulatory measures introducing energy efficient building standards will provide a major contribution to this goal.

Barriers

When launching the RTMB in 1991, the Government of Tunisia recognized that regulatory measures would be essential to the adoption of energy efficient building standards for new buildings.  The PSP went further and demonstrated that to achieve the targeted reduction in energy consumption set by AME, a set of “maximum standards” would be necessary.  Complete ranges of standard levels were then designed and recommended for adoption by the PSP.

A number of critical barriers currently exist that inhibit the Government of Tunisia from adopting the “maximum” standards and future regulatory requirements (designed and recommended through the PSP) needed to ensure that the energy savings targets set by AME are achieved.

Although the proposed “maximum standards” are based on building design and techniques already documented and proven to work in other countries, there is no meaningful or worthwhile track record for such standards and practices in Tunisia.  As such, the PSP recommended that before proceeding to the adoption and implementation stage, the standards need to be validated and fine tuned in the Tunisian context.  Such “fine-tuning” would only be possible through an extensive validation and demonstration activity where standards developed through the PSP would be implemented in actual buildings and then monitored and evaluated in terms of performance over a set period of time.

Adhering to the standards would require modification of building design and construction methods.  Furthermore, the use of energy efficient building materials would also be required, which due to (i) low demand and (ii) unstructured market conditions are not readily available in Tunisia.  Moreover, the large majority of architects are not trained in energy efficient building design, while builders and contractors are not familiar with energy efficient building techniques. 

Lastly, a building that complies with the proposed standards would have a higher initial cost than a building which does not. The additional cost attributed to adhering to an energy efficient code of building practice has been estimated (by the PSP) at an average of 6% in the service sector and 5% in the residential sector. Acquisition costs of new buildings, particularly in the residential sector, are already particularly high in Tunisia, and as a result, the Government of Tunisia recently made a political commitment to reduce housing costs.  This proposed project will contribute to transforming the building and construction market into one that is much more energy efficiency oriented and one where the cost of adopting a more energy efficient approach towards building is comparable to current existing building costs.

Consequently, the barriers to the adoption of regulatory energy efficiency measures in buildings at a maximum level are presently as follows:

•	Lack of documentation that the standards developed in the Preparatory Studies Process (PSP -Phase 1 of the RTMB programme) are (a) technically adequate (b) cost effective and (c) economically acceptable;

•	Insufficient in-country capacity and know-how in the building sector (including architects, contractors) to apply energy efficient design and building techniques, and thus be in a position to comply with standards;

•	Insufficient capacity among relevant Government agencies to enforce, monitor and update (as necessary) energy efficiency standards in buildings;

•	An underdeveloped local market for energy efficient building materials;

•	Lack of awareness of all proponents to this initiative (general public, contractors, architects, building material vendors, public and private building owners) of the favorable economic and environmental results of applying energy efficient building standards.

Removing the above barriers will serve to activate market forces and promote Market Transformation to a more energy efficiency oriented one where the initial incremetnal cost of adopting energy efficiency measures in buildings is reduced.  If the above barriers are not removed, it will not be possible for the Government of Tunisia to adopt the proposed standards at a maximum level despite the long term economic (in terms of energy savings) and environmental (in terms of reduced greenhouse gas emissions) advantages for the country. The proposed project is therefore designed to remove these barriers.

RATIONALE AND OBJECTIVES

Rationale

In Tunisia, the combined energy demand of the service and residential sectors will equal that of the transport sector by 2010, thus combined becoming the largest energy consuming sector in the country.  As emphasized above, the building sector has been identified as the source of this increase in demand. As energy conservation measures and practices are presently not considered in this sector, AME has estimated that the potential for energy savings and GHG reduction are particularly high.

Such potential for curbing the expected rise in demand has been recognized by the Government of Tunisia which has initially accepted the notion of adopting regulatory requirements to introduce energy efficient building standards for new buildings.  However for such standards to be adopted at the meaningful level that is necessary to meet Tunisia’s current energy savings targets, and resulting reductions in greenhouse gas emissions, it is necessary for the barriers identified in this proposal to be removed.

The current proposal which constitutes the barrier removal process, has a total estimated cost of US$ 102.2 million.  Baseline costs of US$ 95.89 million will be covered from Tunisian sources, both public and private. Of the above baseline, about US $3.28 million will be contributed by the Tunisian Energy Efficiency Fund (1.37 million), and other local sources (1.91 million) for additional construction costs that are recoverable through this “win-win” activity. The incremental costs covering the cost of barrier removal activities and the cost of reducing the transaction costs to secure the global environmental benefits in a sustainable fashion, amounts to US$ 6.33 million.  To cover these incremental costs, the FFEM (Fonds Francaise pour l’Environnement Mondial) will contribute US$ 1.97 million.  GEF funding is requested for an additional US$ 4.36 million.

If GEF funding is not secured, phase 2 of the RTMB will not be implemented, barriers to adoption of regulatory requirements imposing energy efficient building standards will not be removed, and the Government of Tunisia will not be in a position to adopt the regulatory requirements introducing the needed maximum standards.  AME estimated that adopting the said regulatory requirements will result in average annual energy saving over 20 years of 0.134 Mtoe/year by limiting the growth in energy demand from the buildings sector.  Such savings will consequently result in a reduction of potential greenhouse gas emissions equaling 0.417 Mtons of CO2.  GEF Funding for barrier removal activities is critical to secure the said global benefits.

Through a barrier removal process, the proposed project will ensure sustainable global benefits in terms of energy savings and long-term GHG emission reductions.  This will be achieved through ensuring rational use of energy in the residential and commercial sectors.  As such, the current project is in line with GEF Operational Programme 5 “Removal Of Barriers to Energy Efficiency and Energy Conservation” of the GEF Operational Strategy.  Furthermore, the current proposal also corresponds to the following operational guidance of said GEF Operational Programme:

•	it is country driven (the initiative came from the AME which has already been instrumental in adopting energy efficiency measures in other sectors) and is in conformity with the commitments of Tunisia’s National Environmental Programme;

•	it will result in transfer of environmentally sound technology and know-how as well related national capacity building;

•	the success of the current initiative in Tunisia will strongly contribute to the adoption of similar regulation in neighboring countries through the associated regional RTMB programme.  As such, the project will also leverage energy savings and greenhouse gas emission reductions in the other Maghreb countries.

•	The reduction in greenhouse gas emissions corresponding to reduced energy consumption will contribute to the mitigation of climate change.

Objectives

The overall objective of the current GEF proposal is to remove barriers and transaction costs to the adoption and enforcement of regulatory measures that introduce energy efficient building standards at a maximum level for all new buildings in the Tunisian commercial and residential sectors (public and private).  The overall objective will be achieved through securing the expected results and outputs discussed in the following section.

As mentioned in the Rationale section, the successful implementation of the current proposal will result in the an average of 0.134 Mtoe/year decrease in energy consumption (representing 3.2 % of national consumption) and a corresponding total decrease of 8.4 Million Tons of CO2 by the year 2022 (as compared to the consumption if the standards are not adopted and enforced - baseline situation).  The proposed barrier removal process is essential to the adoption of the regulatory measures necessary to curb future increases in energy demand in the building sector, and consequently achieve the above mentioned global environmental benefits.

PROJECT ACTIVITIES/COMPONENTS AND EXPECTED RESULTS

Project components and activities

Component 1:	Experimental Validation and Demonstration

The activities implemented through this component will validate the building standards developed during the PSP, as well as contribute to the transformation towards energy efficient building design, techniques and materials.

The PSP has prepared a representative sample of service and residential sector building types which will constitute the main validation and demonstration buildings to will be erected under this project. This representative sample consists of 10 service sector buildings and 36 residential projects (totaling 840 housing units).  The participating contractors will be competitively selected from both the private and the public sectors.  The service sector buildings will include interalia one hospital, one hotel, one shopping mall, one office building, while the residential buildings will include apartment blocks and individual housing units in all of the luxury, economic and social housing categories.  See Annex 5 for further details.

Contractors from the public and private sectors will be invited to submit bids to participate in the demonstration and validation activities.  To be eligible, the projects submitted must comply with technical specifications prepared by the current project incorporating all or part of the future energy efficiency building standards that are proposed for adoption.  The degree of compliance with the future energy efficiency building standards will entitle the project to a label of 2 to 4 stars.  As the above buildings are “win-win” interventions, additional construction costs will be carried the building owners themselves as a baseline contribution. The incremental costs for this component cover incremental funding needed for special design costs. This cost will be covered by the FFEM contribution to the project and will include the cost of an architect to make the necessary modifications to the design of the building.  Moreover, incremental funding needed for monitoring, verification and validation of the standards used will also be covered in this component.  Lastly, the cost of removing the initial transaction cost (currently associated with such interventions), thereby ensuring the implementation of “win-win” initiatives following the project will also be carried by this component.  International Performance Measurement and Verification Protocol (IPMVP) methodologies will be considered as a means of verifying the estimated energy savings.

The individual projects will be subject to a regular monitoring and evaluation procedure to verify the actual results of the energy efficient measures adopted, and to compare them with predicted results.  Finally, potentially needed modifications to the proposed standards will be undertaken under this component to ensure that the lessons learned from the early monitoring and validation experiences are represented in the specifications for use later on in the project, as well as in the standards to be adopted by the Government.

The architects working on the new building design, the contractors, and the monitoring/evaluation teams will be assisted by international and national technical assistance.  Results of energy efficiency validation activities will be disseminated nationally and regionally under this activity. 

Component 2:	Accompanying Measures

The accompanying measures component includes the following initiatives:

•	an extensive awareness raising and promotion campaign designed to gain necessary and crucial public support for the adoption of the maximum level of standards. The campaign will address issues of common importance to all stakeholders who will be affected in one way or the other by the implementation of standards.  The campaign will also focus on individual stakeholders and target specific concerns or reservations that they may have. In general, however, the long-term economic, financial and environmental benefits of such standards will be emphasized on an individual as well as on a national level.  This campaign will capitalize on results reached and lessons learned in Component 1 of this project, and will focus on gaining the necessary support to ensure adoption of the standards.   Lastly, market issues pertaining to the availability, adequacy and price of energy efficient building materials will also be addressed through this activity.

•	an extensive local capacity building effort in the areas of energy efficient building design and construction techniques, as well as enforcement, monitoring and updating of energy efficient standards.

•	long-term institutional needs and requirements will be addressed as part of this component to ensure that institutional capabilities and mechanisms exist at the time of adoption of the standards to ensure the sustainability of the effort.

In all cases, the project will make use of international and national technical expertise.

The accompanying measures component will also involve preparation of technical specifications for the labeling process, as well as the overall project management.

Expected Results and Outputs

The expected results of the successful implementation of the current proposal are as follows:

•	By 2002, the adequacy and cost effectiveness of the draft standards developed by the PSP will be documented in 10 buildings in the service sector and 840 housing units in the residential sector, with the participation of both public and private sector entities;

•	Necessary technical adjustments and fine-tuning will have been made to the draft standards based on the ongoing evaluation, verification and monitoring of the performance of the buildings;

•	By 2002, sufficient capacity and know-how exists with all parties involved in Tunisia to implement, enforce, monitor and update the standards to be adopted;

•	By 2002, a mature and well structured market for energy efficient building materials and related services exists in Tunisia to the extent that such a market is able to respond to the demand arising from the adoption and implementation of standards;

•	By 2002, all stakeholders (incl. the population) are well informed of the adoption of the standards as well as the environmental and financial benefits of their implementation and enforcement;

•	By 2002, the transformation of the market and the reduction of the existing associated transaction costs will reduce the initial incremental cost associated with energy efficient building design (currently at 6%) to a level (estimated at 2-3%) that can be readily absorbed by developers and owners;

•	By 2002, an institutional mechanism and framework for implementing and enforcing standards will be in place and ready to operate as soon as standards are endorsed by the government; and

•	Annual average energy savings generated as a result of the adoption of standards will amount to 0.134 Mtoe, representing approximately 0.42 million tons of CO2.  Over the period 2002-2022 a total of 8.4 million tons of CO2 emissions will have been curbed.

The above immediate results and outputs expected from the successful implementation of the proposed project will ensure that the overall objective of the project (to ensure adoption of maximum standards) is achieved.

RISKS AND SUSTAINABILITY

Risks

Successful implementation of the proposed project is essential for the adoption of the regulatory measures needed to secure the targeted energy savings required to curb the expected rise in energy demand.  Some risks do, at present, exist jeopardizing the achievement of the overall objective of the project.  These can be summarized as follows:

•	It is not possible to convince private and public contractors to participate in validation projects (Component 1) and, as such, the complete representative sample of Tunisian building types needed to validate the proposed standards is not attained.

This is unlikely since (i) preliminary contacts have already been made with prospective candidates from the public and private, service and residential, sectors who have indicated their willingness to participate and a clear commitment to the process, and (ii) the concept of initial incremental cost being the basis for the financial incentive has been accepted by the proponents of the projects and that the incremental level was determined based on the requirements established in the context of a feasibility study where all these proponents were involved.

•	The initial incremental cost of the demonstration projects is higher than initially estimated by the PSP.

The total initial incremental cost of the validation projects has been calculated using an average of  6% for the service sector and 5% for the residential sector.  It is likely that certain projects will have a slightly higher incremental cost and others a slightly lower one than  expected. In these circumstances the reduced incremental cost of one project will compensate the increased incremental cost of another project.  Moreover, experience in France has shown that this level is, on average, sufficient.

•	The verification and monitoring of the demonstration projects do not result in validation of the draft standards.

Fine tuning the standards is likely to take place during the verification and monitoring period, however, is seems very unlikely that the standards will not be validated.  The standards to be verified and validated have been drafted by national and international experts, based on design and technology already proven in other countries (e.g. France) and have already been adapted to the specificities of the Tunisian climate through the work undertaken in the PSP.  As such, it seems very unlikely the draft standards will not prove their worth in terms of the performance of the buildings by the time of project termination.

•	The local market for energy efficient building materials does not develop sufficiently during the duration of the project for the necessary cost reductions to take place.

This seems very unlikely as the adoption of initial and minimum standards in 1999, the supply requirements spurred by the validation projects, as well as the nationwide awareness and promotion campaign should be sufficient to have the desired effect on the market.

•	Despite successful validation, support for the standards by the end of the present project is insufficient to justify adoption of the regulatory measures by the Government of Tunisia.

If the standards are validated and barriers removed the GoT is very likely to endorse. The GoT is clearly aware that endorsing such standards is, in the long term, in the best interest of the country as this is the only was energy savings targets can be met. Moreover, with public support generated through the awareness and promotion campaign one of the biggest concerns of the Government will be removed. This campaign will ensure dissemination of the results of the validation projects and demonstrate the future economic, financial and environmental advantages of adopting the standards for all proponents (general public, contractors, architects, building material vendors, public and private building owners).  Sufficient support should therefore be available.

•	The initial incremental cost of buildings complying with the standards is not reduced to the acceptable level of 1 to 2 %

The predicted reduction is a conservative estimate that is readily achievable.  A similar process carried out in France for residential buildings resulted in the reduction of the initial incremental cost from 10% to 2% between 1981 and 1985.

Sustainability

Sustaining the achievements of the project as regards curbing the increase in energy demand, and the accompanying reduction in greenhouse gas emissions, will result not from the project itself but from the subsequent mandatory adoption and enforcement of energy efficiency standards for buildings at the maximum required level.  The objective of the current proposal is to remove the barriers that presently preclude the adoption of these standards.

The project will ensure sustainability as it will enable the Government of Tunisia to adopt the standards and at the same time ensure that capacity for local compliance exists on all levels, as well as ensuring that there is public understanding and support for the process.  By conditioning the adoption of regulatory measures to the success of the barrier removal process, the Government of Tunisia illustrates that it is concerned with the issue of sustainability.  The GoT is clearly aware that standards adopted by regulatory measures will not be successfully implemented and enforced (and thus sustainable) unless the barriers have been removed.

By targeting the identified barriers, this project is in fact ensuring sustainability as the standards will be adopted and enforced in a setting where capacity for compliance exists.

Lastly, life cycle calculations undertaken with investment costs and associated energy savings clearly indicate that, once the identified barriers are removed and the transaction cost lowered through this project, future projects to be implemented with the mandatory codes will be of a “win-win” nature.  Calculations for residential sector buildings similar to the ones being implemented through the current project have a full return on investment after 19 years, while this time span drops to 13 years for buildings in the service and commercial sectors.  However, the identified barriers and the increased initial transaction cost have to be removed before such “win-win” projects will be implemented.  As mentioned above, once the barriers and transaction costs are removed, the Government has guaranteed that it will adopt the codes in question to be mandatory and legally enforced for all new buildings in Tunisia.

STAKEHOLDER PARTICIPATION AND IMPLEMENTATION ARRANGEMENTS

The proposed project will involve the participation of the key players in the promotion of energy efficiency and energy conservation in Tunisia.  These include the Ministry of Industry, the Ministry of Environment, the Ministry of Housing and Public Buildings and in particular the Tunisian Agency for Energy Management (AME) which will take a leading implementation role.  Other key players that are going to be involved, interalia:

•	The National Order of Architects
•	Associations of Promoters in the Private Sector; Public Sector Promoters
•	Higher Education and Research Institutes
•	General Contractors and Construction Companies
•	Local Government Entities

The proposed project will be managed by a special purpose Project Unit within AME that will report to a Steering Committee and be overseen by a Supervisory and Coordinating Board.  It will work closely with a Consultative Committee, an already existing institutional body, which is responsible for granting approvals of financial incentives to energy efficiency investments.

The Project Unit will be housed within the premises of AME thereby ensuring access to administrative facilities in addition to the financial, economic and legal departments of the organization.  The Project Unit will work closely with the (i) the owners of the validation projects and the building designers/architects for the operational aspects, (ii) with national and international consultants for the follow up/verification/validation of the projects as well as for the awareness and promotion campaigns.

The Steering Committee will be responsible for the approval of the validation projects, the approval of the procedures for the day to day running of the project, the preparation of meetings of the Supervisory Board and validation of all elements submitted to the Supervisory Board.  The Steering will meet once a month during implementation of the project.

The Supervisory and Coordination Board will be responsible for ensuring coordination between relevant proponents and stakeholders and advising on the overall policy issues pertaining to the project.  This Board will also evaluate the work carried out and monitor the progress of the project.

Project initiation is expected in January 1999 with a duration of three to four years. A detailed project implementation plan will be formulated at the UNDP project document formulation stage

6.	INCREMENTAL COSTS AND PROJECT FINANCING

Initial Baseline Considerations: 

It is estimated that US$ 95.89 million are baseline costs to be carried by the Tunisian project counterparts.  Baseline construction and building costs have been estimated by the PSP to amount to 92.174 million (see Annex 6 for details).  In addition, the GoT will also contribute US $1.37 million to the project though the Tunisian Energy Efficiency Fund (TEEF).  The Tunisian Energy Efficiency Fund provides funding for initiatives that promote energy efficiency and energy conservation.  The funds secured from TEEF are baseline funds, (as these funds would have been used of energy efficiency and energy conservation issues in the “business as usual scenario”), covering a part of the additional construction costs.  Moreover, an additional 1.91 million have been secured from other local sources (owners, contractors and Government) to further secure that the additional construction costs can be covered by the project. Lastly, the Tunisian Agency for Energy Management (AME) has further committed 0.44 million to other baseline activities.

Incremental Costs

The total cost of the proposed project is estimated at US$ 102.2.  It is estimated that US$ 95.89 million are baseline costs to be carried by the Tunisian project counterparts, while the remaining US$ 6.33 million are incremental costs for which support is needed.  Of this figure, 4.36 million is requested from the GEF, while the rest will be financed from other international and national sources in Tunisia.

The Incremental Costs are divided as follows between the two components:

Component 1 - Experimental Validation and Demonstration	:	3.74 million
Component 2 - Accompanying Measures				:	2.01 million
Miscellaneous								:	0.58 million

Incremental cost calculations are shown below for each component.

Component 1 - Experimental Validation and Demonstration

The PSP estimated that the total cost of the component (including baseline costs) to be US $99.2 million.  This includes 46 separate projects (encompassing 840 residential units and 10 service sector buildings). The PSP also estimated that the cost of these projects without using energy efficiency measures and codes of practice (dictated by the standards proposed for adoption) would be 92.17 million.  This figure (92.17 million) in addition to the additional construction costs (3.28 million) is used as the baseline contribution.

The total incremental difference (99.2 million - 95.45 million) of US $3.75 million would cover:

ã	cost of lowering initial transaction costs					:	1.81 million
•	energy efficiency design costs, estimated at 				:	0.73 million
•	building performance monitoring, evaluation and verification	:	1.2  million

As such, the above incremental funding will cover the incorporation of new design and building techniques, the process of monitoring and verification of the performance of the buildings, as well as the cost of reducing the current initial transaction costs.  Incremental design costs are calculated on the basis of an estimated average fixed amount of US$ 26,000 per validation project unit for the service sector and US$ 13,000 for the residential sector.

Breakdown of the incremental cost for this component in relation to the funding source is shown in table 2 on the following page.

Component 2 - Accompanying Measures

The PSP estimated the cost of this component to be $2.01 million, all of which are irrecoverable for the stakeholders (incl. GoT) and consequently should be seen as fully incremental.  For details please refer to the section herein on project activities. Breakdown of the incremental cost for this component in relation to the funding source is also shown in the table on following page.

Project Financing

Based on the presentation of incremental and baseline costs presented above, the proposed financing structure of the project (by component/activity) is detailed in the following table:

Component/Activity	Baseline
Costs	Incremental Costs	Total	
	Owner	AME	TEEF	Local	GEF	FFEM	SubTot		
Experimental Validation									
Construction Costs	92.174		1.37	1.91			0	95.45	
Design Costs						0.73	0.73	0.73	
Transaction & Learning Costs					1.81		1.81	1.81	
Performance & Monitor.					0.6	0.6	1.2	1.2	
SubTotal	92.174		1.37	1.91	2.41	1.33	3.74	99.2	
									
Accompanying Measures									
Market Promotion & Awareness					0.6	0.255	0.855	0.855	
Local Capacity Building		0.237			0.6	0.255	0.855	1.092	
Institutional Strengthening					0.3		0.3	0.3	
SubTotal		0.237			1.5	0.510	2.01	2.25	
									
Project Mngmnt. & Coordination									
Misc. ( facilities, office,…. etc)					0.13	0.13	0.26	0.26	
Project Management		0.2			0.2		0.2	0.4	
Executing Agency Support Costs					0.12		0.12	0.12	
(3% project support services)									
Grand Total	92.174	0.44	1.37	1.91	4.36	1.97	6.33	102.2	
Table 2:  Project Financing

From the table above it can be seen that the total incremental cost needed for this project is US $6.33 million of which 4.36 is requested from the GEF.

7.	MONITORING, EVALUATION AND DISSEMINATION

The project will be closely monitored in accordance with UNDP established monitoring procedures.  Consequently, the UNDP office in Tunis will provide ongoing performance monitoring with backstopping from UNDP technical staff from HQs.  In addition, Tri-Partite Reviews will also be held with the participation of project counterparts and partners.  During the TPRs, the project performance will be measured against established workplans, expenditures will be reviewed and overall technical performance assessed.  Lastly, a mid-term evaluation will be carried out at the end of the second year of implementation.

Further procedures for overall project review will be detailed at project document formulation stage.

LIST OF ANNEXES

Annex 1.	Incremental Cost
Annex 2.	Logical Framework
Annex 3.	STAP Roster Technical Review

Optional Annexes:

Annex 4	Description of RTMB Programme
The Annex provides a description of the three phases of the RTMB programme of which this proposed project is part. 

Annex 5	Description of Baseline Buildings
The Annex provides a decription (in tabular form) of the buildings that will proved the baseline for the experimental validation process.

Annex 6	Description of Energy Efficiency Building Technologies
The Annex provides a description of the kind of EEB Technologies to be used on the baseline buildings using the Energy Efficienct code of practice developed by phase I of the RTMB project.

Annex 7	Calculation of Greenhouse Gas Emission Savings

ANNEX 1
Incremental Cost

1.	Broad Development Goals

While efficiently meeting the increasing energy demand of its rapidly developing economy, Tunisia is committed to curbing the increasing growth of greenhouse gas emissions associated with this fossil fuel based demand.

The active policy Tunisia has adopted towards energy conservation and energy efficiency since the l980s is indicative of this commitment.  Since its creation in 1986, the Agency for Energy Management - AME - has been responsible for the implementation of such policy.  AME has identified the service and residential sectors as the largest growing source of energy demand during the first twenty years of the next century.  In anticipation of this sectorial shift in energy demand, AME has been working actively since the early 1990s towards the adoption of regulatory measures to introducing energy efficiency standards in buildings.

Despite the existence of favorable conditions and incentives for energy conservation as a result of the relatively high level of energy pricing currently existing in Tunisia, regulatory measures are to needed to curb the growing demand for energy in the building sector.  However, to date, action needed to implement maximum regulatory measures that would limit the growth of energy demand in buildings have not been undertaken due to the existence of a number of barriers that this project proposes to remove.

2.	Baseline

In 1996, energy consumption in the Tunisian building sector (residential and service sectors) represented 26 % of the Tunisia’s total national consumption.  With a forecast average progression in energy demand of 5% per annum, this share is expected to rise to 36 % by the year 2020, thus surpassing both the industrial and transport sectors in consumption.  As such, the Tunisian building sector would become the single largest energy consuming sector in Tunisia.  In view of Tunisia’s limited indigenous resources of energy, such an increase in consumption, unless rationalized, would impose a heavy burden on the Tunisian economy.

Tunisia, however, has a history of successful adoption of regulatory and legislative measures encouraging energy efficiency and conservation.  These include initiatives advocating energy audits, providing financial support to energy efficient demonstration projects, as well as adopting legislation that reduces import duties on energy efficient and renewable energy equipment.  Following this conviction, in the context of a regional programme known as the Réglementation Thermique Magrébine des Bâtiments - RTMB, Tunisia has since 1991 invested a great deal of time and effort in determining the basis for regulatory measures that would limit the growth of consumption in the Tunisian building sector.  These baseline assessments and studies are presented further in Annex 4.

Despite finalizing such baseline assessments and studies during Phase 1 - Preparatory Studies Process - of the RTMB programme, it is on the basis of experimental and operational verification of such regulatory requirements, as well as the removal of a number of other barriers, that the Government of Tunisia will consider their adoption as standards.  This will be achieved by Phase 2 of the RTMB programme, the Experimental Validation Process - EVP, which this proposal aims to support.

As an indication of the Government’s commitment to this effort and to pave the way for adoption of the proposed regulatory requirements, the Tunisian public and private sectors are committing US $ 95.89 million through this proposed GEF initiative to cover baseline costs of the proposed project.

3.	Global Environmental Objective

The global environmental objective being pursued through this project is the reduction of greenhouse gas emissions through limiting growth in energy demand from the residential and service sectors in Tunisia. This will be achieved by targeting all future building activities in these sectors and ensuring that energy efficiency measures and codes of practice are utilized in the design and construction of all new building in these sectors.  Specifically, project activities are designed to support the sustainable implementation of a regulatory framework that would ensure more efficient energy use.  As such, the project is in line with Operational Programme number 5 “Removal of Barriers to Energy Efficiency and Energy Conservation” of the GEF Operational Strategy.

4.	GEF Alternative

As described in the project brief, the proposed activities focus on removal of barriers to the adoption and enforcement of regulatory measures introducing energy efficiency standards at a maximum level for all new buildings in Tunisia.  The feasibility study conducted during the final stage of Phase 1 of the RTMB programme, concluded that an Experimental Validation and Barrier Removal Process is necessary to ensure sustainability of any effort to adopt the proposed standards. 

During Phase 1 of the RTMB programme, a number of main barriers to the adoption of regulatory measures introducing the proposed standards have been identified.  The proposed project, through the implementation of two specific components, provides appropriate measures to remove these barriers.  The barriers are presented in the project brief.

There are significant global benefits to be achieved as a result of the implementation of this project.  Once the project has removed the said barriers and the standards have been adopted, an average annual reduction in CO2 emissions of 1.34 million tons should be attained between 2002 and 2022, resulting in a total of 8.4 million tons of CO2 reduced by the year 2022.

5.	System Boundary

Energy savings resulting from the project itself will not be significant since the project itself involves a limited number of demonstration and validation initiatives.  However, once the regulatory requirements have been adopted they will impact the long-term energy consumption of all new buildings in the service and residential sector throughout Tunisia.

In the Tunisian context, the scope of the project covers the service and residential building sectors only.  The sectors are well defined and as such allocation of energy savings, and associated GHG emission reductions, resulting from the implementation of the project itself and form the follow-up regulatory measures will be essay to attribute to this sector in specific.  Furthermore, from a regional perspective, the importance of the successful implementation of the project in the context of the RTMB programme, is no less significant.  Lessons learned, and the experience gained with the validation and adoption of the standards will have a marked positive impact on the readiness of the other Maghreb partners of the RTMB programme to embark down the same path of prompt adoption of similar standards.

6.	Domestic Benefits

Domestic benefits are measured as the resulting increased levels of awareness and capacity as well as the inherent value of a more structured market for energy efficiency building materials.  The systematic need for energy efficient building materials, will result in the development of a structured and competitive market.  Resulting price reductions for energy efficient building materials, as well as resulting elimination of initial transaction costs, will make an important contribution to reducing the additional construction costs associated with an energy efficient building, which, at the present time, represent one of the major barriers to regulatory adoption of energy efficient building standards at maximum level.

The accompanying energy savings are attributable to the baseline committed to the project by local sources.  For example, the Tunisia Energy Efficiency Fund (TEEF), has re-directed funds to this project that otherwise would have been committed to other energy efficiency efforts resulting in proportionately similar fuel savings.  Furthermore, the AME contribution to local capacity building efforts would most likely also have been committed to similar efforts having a comparable impact on long-term energy consumption in Tunisia.

7.	Incremental Cost Matrix

The Incremental Cost Matrix for the proposed project is shown in the following pages:

8.	Agreement

Agreement regarding the items to be included in the final project document shall be done through a local project appraisal committee meeting.  The PAC meeting will be undertaken to consult all relevant proponents as regards the final framework for items to be financed and project implementation arrangements.

Incremental Cost Matrix
Baseline	Alternative	Increment	
Business as Usual
1. 	Phase 2 of the RTMB will not be carried out. It will therefore not be possible to validate the standards already developed in Phase 1 (PSP).  
2. 	Barriers critical to the adoption of the standards will not be removed and consequently Government of Tunisia will not endorse maximum standards developed in phase 1 of the RTMB.
3. 	Minimum standards might be adopted
	Proposed Situation
1.	A full representative sample of validation and demonstration projects in the service and residential sectors are carried out to validate the standards.
2.	An extensive awareness and promotion campaign is undertaken to prepare local stakeholders and counterparts for the adoption of maximum standards
3.	A full capacity building and institutional strengthening programme to ensure availability of know-how to implement, enforce, monitor and update energy efficiency standards for buildings.
	New Features
The project will remove main barriers presently existing to the adoption and implementation of energy efficiency building standards at maximum levels.	
Domestic Benefits
1. 	AME continues limited awareness and capacity building activities using exiting internal resources and resources from TEEF;
2. 	Very limited fuel savings will result over the long-term;
3. 	GoT will not be able to achieve energy savings targets set;
4. 	Local environmental and social benefits will be very limited;
	Domestic Benefits
1.	An extensive verification programme is carried out to validate the standards proposed for adoption.
2.	Result disseminated to all proponents
3.	Adoption of maximum regulatory measures to ensure that energy efficiency practices and codes are used in building design and construction.
4.	Local market for energy efficient building materials is developed.
Local capacity is created and awareness raised on issues pertaining to energy efficiency in building	Domestic Benefits

Adoption of maximum regulatory measures to ensure that energy efficiency practices and codes are used in building design and construction
	
Global Benefits
1. 	Negligible global benefits (in terms of GHG emission reduction) corresponding to energy savings achieved through internal Tunisian energy efficiency efforts 	Global Benefits
1.	After 2002, annual reduction in CO2 emissions equaling 0.42 million tons for at least 20 years.
2.	Results reached in Tunisia will contribute to the adoption of similar regulation in Algeria and Morocco in the wider context of the RTMB programme.	Global Benefits
Increased levels of GHG emission reductions from Tunisia and eventually other Maghreb countries.
	
Baseline Cost
1.  AME :  US $0.44 million
2.  TEEF:  US $1.37 million
3.  Local   US $ 1.91 million
4.  Value of Baseline Buildings: US $92.174 million
Total: US $95.894 million	Alternative Cost

US $102.2 million	Incremental Cost
1.	FFEM:   US $ 1.97 million
2.	GEF  :   US $ 4.36 million

Total: US $ 6.33 million	

Annex 2
Logical Framework

Project Planning Matrix	
Intervention Strategy	Objectively verifiable indicators	Means of Verification	Assumption	
Development Objectives
•	Adoption and enforcement of regulatory measures that introduce energy efficient building standards at a maximum level for all new buildings in the Tunisian service and residential sectors by 2002.
•	Curbing future energy demand in the fastest growing sectors in the Tunisian economy, with resulting CO2 reduction
	•	In 2002, Government of Tunisia adopts maximum regulatory measures to ensure that EE measures and codes of practice are taken into consideration in the design and construction of all new service and residential sector buildings,
•	Average annual energy savings of 0.134 Mtoe 	•	Official statute indicating the EE standards have become mandatory and describing requirements is drawn up and published in official Tunisian journals and newspapers.
•	Service and residential sector consumption surveys	•	Standards are validated convincingly to the satisfaction of the GoT.
•	Public support for Standards will be sufficient.	
Immediate Objective
1.	Draft energy efficiency standards for buildings are validated and supported by all proponents incl. Government and public;
2.	Capacity and know-how to implement, monitor, enforce and update the standards exists in Tunisia.

	•	10 Validation projects are erected and their thermal and energy performance monitored in the service sector while another 36 (amounting 840 units) are undertaken in the residential sector	•	Records of implementation, monitoring and verification results undertaken during demonstration projects.	•	Building owners support is obtained
•	increased demand for EE building materials
•	Public is sufficiently accepting of concept.	
Outputs
1.	Verified and fine-tune EE standards at a maximum level,
2.	A mature and well structured market for EE building materials and related services exists in Tunisia,
3.	A well informed stakeholder community on issues of EE in buildings,
4.	A reduction in the initial incremental cost of the buildings form the current average of 6% to about 2%,
5.	Adoption of EE design and construction techniques by architects and contractors	•	Retailers and vendors begin to stock a variety of EE building materials.
•	Contractors purchase EE building materials,
•	Contractors start to incorporate EE building design in their activities.
•	Architects market their ability to take EE measures in design considerations,
•	Validation projects undergo monitoring and verification,
	•	Retailer records of types and preference for purchase of building materials,
•	Contractor and architect surveys to determine extent of trend towards EE design practices.
•	Monitoring and verification records
•	Periodic evaluation of results of promotion efforts through public surveys.	•	Building owner acceptance of incremental 
•	Architects and designers accept to adapt to EE design techniques.
•	Increased use of E building materials has positive impact on structure of the market	
Activities
1.	Draft EE standards implemented and monitored in a full representative sample of buildings in the service and residential sectors,
2.	An extensive awareness and promotion campaign targeting all proponents collectively and individually,
3.	Extensive capacity building effort in the areas of EE building design and construction techniques, as well as enforcement, monitoring and updating of energy efficient standards,
4.	Institutional needs and requirements addressed to ensure existence of capabilities and mechanisms at the time of adoption.	Inputs
•	Funds and expertise for EE design and construction
•	Funds and expertise for verification and validation of standards,
•	Funds and expertise for awareness and promotion campaigns
•	Baseline buildings

		Preconditions
•	Public and private sector new building owners willing to participate in the demonstration  programme
•	Financial incentives are available to covers initial incremental costs of the demonstration projects

Annex 3
STAP Technical Review
By Dr. Hisham El-Khatib

Response to Comments of Reviewer:

Comments of the reviewer have been addressed in the following manner:

1. 	Annex 7 “Calculation of Greenhouse Gas Emission Savings” was added to address comments number 1, 5 and 6 of the reviewer’s General Comments.

2. 	Annex 6 “Description of Energy Efficiency Building Technologies” was added to address comment number 4 of the reviewer’s General Comments shown below.

3. 	The reviewer’s General Comments number 3 regarding energy pricing has been addressed on page 3 of the Project Brief.

Part I - General Comments

	This is an excellent project that will be implemented in Tunisia, a country with a track record of successes in energy management. Therefore this project will have every chance of success. Also it will serve as an excellent demonstration project for other countries in the North Africa and the Middle East region .

	Having reviewed the project document, I very strongly recommend GEF’s endorsement of this project and its replication in other Arab states, where energy consumption in buildings constitute a significant share of national energy use. Having said that I have the following comments which in no way diminish the value of the project or seriously affect  the integrity of the project document.

(1)	There is no reference to life- cycle energy savings attributed to this project. New buildings, benefiting out of the project, will be consuming less energy and correspondingly saving their occupants (and the country) significant costs. Such costs should preferably be estimated and costed over the life of the buildings (say 40 years). When the new building standards are adopted, after removal of barriers, Tunisia’s economy will be significantly benefiting, particularly since the country has very limited indigenous energy resources. Such house–hold and national benefits should have been demonstrated, since they are significant. However, since the project is a demonstration project to assist in the removal of barriers, the mentioning of the benefits will be an added advantage.

(2)	All through the project document there is reference to a Total Project Cost of  $ 102.2 million of which the Tunisian Contractors (public and private) are contributing $ 94.10 million. The baseline construction and building costs amount to $ 92.174 million.  These will be spent by the contractors, with or without the project, because these building will have to be built anyhow. Therefore the real project costs are the incremental costs of $ 10 million which were brought about by the project as a demonstration project for removal of barriers.

(3)	The Project Document is short in explaining why Tunisia is a favorable country for application of energy efficiency measures. Not only there are energy conservation plans and institutions, but more important, energy prices have been rationalized and considerably increased to contain waste and promote efficiency. This was mentioned in passing in the Incremental Cost Annex, but preferably it should be emphasized in the Project Document.

(4)	There is no reference in the document to the technologies to be adopted in affecting energy saving and correspondingly the modifications that will be incorporated in the building regulations. Most important of these are insulation and solar parameters. Comparisons with France are not very relevant because of the different and favorable solar conditions that exist in Tunisia. Of particular importance is that Tunisia is most suited for the implementation of solar parameters in the architecture of buildings. Adoption of such designs will incur no costs other than cost of training, however the benefits can be enormous in sunny countries like Tunisia.

(5)	All through the project document there are references to an average annual reduction in CO2 emissions of 1.34 million tons that should be attained between 2002 and 2022. As we realize reductions in CO2 in 2002 are almost zero, such reductions are obtainable only towards the end year of the project cycle, i.e. towards year 2022.

(6)	The Project Document and Annex are short in explaining how the figures for energy savings and CO2 emission reduction have been reached as well as the valuation of these benefits in approximate monetary terms.

(7)	There is also no definition of what is meant by EE standards, etc. Also although there are Annexes there exists no reference to some of them in the Project Document.

Part II - Areas Covered by the Review

1.	OVERALL IMPRESSION

I felt that the project idea is excellent.

2.	RELEVANCE & PRIORITY

The project directly relates to the Climate Change Convention, in that it assist in reducing energy consumption in Tunisia, since energy resources of the country are limited.

3.	BACKGROUND AND JUSTIFICATION

The background and justification as presented in the Project Document is adequate. However it can be improved on by answering some of the comments I have already mentioned in Section I of this Review.  The project fits within Tunisia’s national priorities and commitments, particularly Tunisia’s commitments under the Climatic Change Convention .

4.	SCIENTIFIC AND TECHNICAL SOUNDNESS

The project is sound from a scientific and technical point of view. However, as I indicated in Part I, I would have wished more technical details as regards the technologies used and the energy savings.

5.	OBJECTIVES

The objectives of the project are clear and valid. Also they are also achievable within the activities which have been outlined.

6.	ACTIVITIES

The activities as outlined are adequate. They are logically poised to address the situation.

7.	PARTICIPATORY

The stakeholders (mainly contractors) participation is very important for the success of the project. They are addressed adequately in the project.

8.	GLOBAL BENEFITS

Global benefits, in the form of CO2 sequestration, are fully identified. However as I mentioned in    Part I, the justification in form of calculation is not fully outlined.

9.	GEF STRATEGIES AND PLANS

The project fits within the context of the goals of the GEF, the GEF Operational Strategies and Programme Priorities as well as the provisions of the UN Framework Convention on Climate Change.

10.	REPLICABILITY

One of the most important features of this project is its replicability. Such projects are badly needed in North Africa and East- Mediterranean countries. Correspondingly this is an excellent demonstration project for various countries in the Arab region.

11.	CAPACITY BULDING

The project will significantly contribute to capacity building in both the engineer / architect designer level as well as the contractor level.

12.	PROJECT FUNDING

The proposed funding of the project is appropriate. However the project cost has to be modified in line with my comments in Part I.

13.	TIME FRAME

The time frame is adequate.

14.SECONDARY ISSUES

The project has no linkages to other GEF focal areas. However it is directly linked to various GEF projects in the Arab region which are seeking energy efficiency and curtailment of environmentally detrimental emissions.

15.	ADDITIONAL COMMENTS

My additional and relevant comments were adequately covered in  Part I of this STAP Review.