IMPLEMENTATION COMPLETION AND RESULTS REPORT …documents.worldbank.org/curated/en/...Republic of Turkey FOR PMR TURKEY (P126101) June 28, 2019 ... ETS Emissions Trading System EU

Document of

The World Bank FOR OFFICIAL USE ONLY

Report No: ICR00004802

IMPLEMENTATION COMPLETION AND RESULTS REPORT

TF10793; TF15591

ON A

SMALL GRANT

IN THE AMOUNT OF USD 3.35 MILLION

TO THE

Republic of Turkey

FOR

PMR TURKEY (P126101) June 28, 2019

Energy & Extractives Global Practice

Europe And Central Asia Region

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CURRENCY EQUIVALENT

(Exchange Rate Effective April 6, 2019)

TRY 6.32 = EUR 1 TRY 5.63 = USD 1

FISCAL YEAR July 1 – June 30

Regional Vice President: Cyril E Muller

Country Director: Auguste Tano Kouame

Senior Global Practice Director: Riccardo Puliti

Practice Manager: Sameer Shukla

Task Team Leader(s): Ayse Yasemin Orucu

ICR Main Contributor: Zhihong Zhang

ABBREVIATIONS AND ACRONYMS

BAU Business-as-usual

CCAMCB Climate Change and Air Management Coordination Board

CO2 Carbon dioxide

CDM Clean Development Mechanism

COP Conference of the Parties

CPF Country Partnership Framework

CPS Country Partnership Strategy

DGRE Directorate General for Renewable Energy

DPL Development Policy Loan

EMRA Energy Market Regulatory Agency

ESES Environmental Sustainability and Energy Sector

ETS Emissions Trading System

EU European Union

EU ETS European Union Emissions Trading System

EU-IPA European Union Instrument for Pre-Accession Assistance

EXIST Energy Exchange Istanbul

FM Financial Management

FY Fiscal Year

GDP Gross Domestic Product

GHG Greenhouse gas

GIZ German Agency for International Cooperation

ICR Implementation Completion and Results Report

INDC Intended Nationally Determined Contribution

ISR Implementation Status Report

JI Joint Implementation

LULUCF Land use, land-use change, and forestry

M&E Monitoring & Evaluation

MBI Market-based Instrument

MENR Ministry of Energy and Natural Resources

MoEU Ministry of Environment and Urbanization

MoIT Ministry of Industry and Technology

MoT Ministry of Trade

MoTF Ministry of Treasury and Finance

MRP Market Readiness Proposal

MRV Monitoring, Reporting, Verification

MW Megawatt

NCCAP National Climate Change Action Plan

NCCS National Climate Change Strategy

NDC Nationally Determined Contribution

PA Partnership Assembly

PAD Project Appraisal Document

PDO Project Development Objective

PIU Project Implementation Unit

PMR Partnership for Market Readiness

tCO2e (metric) tonne of carbon dioxide equivalent

TOR Terms of reference

TRY Turkish Lira

UNFCCC United Nations Framework Convention on Climate Change

USD United States Dollar

VCM Voluntary Carbon Market

TABLE OF CONTENTS

DATA SHEET ....................................................................... ERROR! BOOKMARK NOT DEFINED.

I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 4

Significant Changes During Implementation ................................................................................9

II. OUTCOME .................................................................................................................... 10

Relevance of PDOs ................................................................................................................... 10

Achievement of the PDOs (efficacy) .......................................................................................... 10

Achievement of the First Objective: Substantial ........................................................................ 11

Achievement of the Second Objective: Substantial .................................................................... 12

Efficiency ................................................................................................................................. 15

Justification of Overall Outcome Rating .................................................................................... 16

III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 17

Key Factors During Preparation ................................................................................................. 17

Key Factors During Implementation .......................................................................................... 18

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 19

Quality of Monitoring and Evaluation (M&E) ............................................................................. 19

Environmental Safeguards, Social Safeguards, and Fiduciary Compliance ................................... 20

Bank Performance .................................................................................................................... 21

Risk to Development Outcome ................................................................................................. 21

V. LESSONS LEARNED AND RECOMMENDATIONS .............................................................. 22

ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 24

ANNEX 2. PROJECT COST BY COMPONENT ........................................................................... 27

ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ...... 28

The World Bank PMR TURKEY (P126101)

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DATA SHEET

BASIC INFORMATION

Product Information

Project ID Project Name

P126101 PMR TURKEY

Country Financing Instrument

Turkey Investment Project Financing

Original EA Category Revised EA Category

Not Required (C) Not Required (C)

Organizations

Borrower Implementing Agency

Republic of Turkey Ministry of Environment and Urbanization

Project Development Objective (PDO) Original PDO

The Project Development Objective (PDO) is to assist Turkey implement a greenhouse gas Monitoring, Reporting, and Verification (MRV) pilot in the electricity sector, based on Turkey’s MRV regulation, and to provide analytical information for the establishment of a carbon market in Turkey.


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FINANCING

FINANCE_TBL

Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$)

Donor Financing

TF-10793 350,000 350,000 350,000

TF-15591 3,000,000 3,000,000 2,820,722

Total 3,350,000 3,350,000 3,170,722

Other Financing

Borrower/Recipient 2,650,000 2,650,000 0

Total 2,650,000 2,650,000 0

Total Project Cost 6,000,000 6,000,000 3,170,722

KEY DATES

Approval Effectiveness Original Closing Actual Closing

30-Dec-2013 23-Dec-2011 30-Jun-2017 31-Dec-2018

RESTRUCTURING AND/OR ADDITIONAL FINANCING

Date(s) Amount Disbursed (US$M) Key Revisions

12-Jan-2017 1.92 Change in Loan Closing Date(s)

18-Jun-2018 2.77 Change in Loan Closing Date(s)

KEY RATINGS

Outcome Bank Performance M&E Quality

Satisfactory Satisfactory Modest


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RATINGS OF PROJECT PERFORMANCE IN ISRs

No. Date ISR Archived DO Rating IP Rating Actual

Disbursements (US$M)

01 30-Jun-2015 Satisfactory Moderately Satisfactory 0.80

ADM STAFF

Role At Approval At ICR

Regional Vice President: Philippe H. Le Houerou Cyril E Muller

Country Director: Martin Raiser Auguste Tano Kouame

Senior Global Practice Director: Laszlo Lovei Riccardo Puliti

Practice Manager: Ranjit J. Lamech Sameer Shukla

Task Team Leader(s): Jari Vayrynen Ayse Yasemin Orucu

ICR Contributing Author: Zhihong Zhang


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I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES

Context

1. During the pre-appraisal period, the Turkish economy was expanding by an average of 5.1 percent (2002-2012)

despite the global financial crisis of 2007-2009. During the same period, per capita income more than tripled reaching

USD 10,504 in 2012; inflation declined to single-digit levels; and the European Union (EU)-defined public debt-to-GDP

ratio eased from 74 percent in 2002 to 36.1 percent. At the end of 2013, real GDP growth reached 4.3 percent.

2. At the time of appraisal, Turkey’s development agenda focused on a vision of stable growth, a more equitable

income distribution, and increased global competitiveness as the country was transforming into an information society

and enhancing harmonization with the acquis communautaire as a candidate to EU. Development priorities were

clustered around improved competitiveness and employment, equitable human and social development, efficient

provision of high-quality public services, and energy security and efficiency, with an emphasis on the reduction of

regional disparities.

3. The Turkish Government was pursuing a wide range of economic policies and structural reforms to achieve

Turkey’s development goals and realize sustainable growth. The Ninth Five-Year Economic Development Plan for 2007-

2013 priorities included “continuing energy and water sector reforms and investments to increase energy efficiency and

the use of renewable energy; improving energy security; reducing greenhouse gas emissions; and mitigating and

adapting to climate change.”1 These priorities were elaborated on in various strategy documents.2 Building on these

strategies and successful fundamental energy sector reforms over the last decade, Turkey was moving towards

developing reliable and efficient energy supply while keeping the objective of mitigating climate change impacts. The

Tenth Development Plan (2014-2018) shows Turkey’s continued commitment to sustainable growth, underlining the

importance of renewable energy for multiple sectors and energy efficiency as a key issue.

Sector and Institutional Context

4. International policies provide the background for setting up national strategies and policies related to climate

change in Turkey. Turkey ratified the United Nations Framework Convention on Climate Change (UNFCCC) in 2004 and

its Kyoto Protocol in 2009 and became a party to the Protocol in August 2009, declaring that within the framework of its

special circumstances, it shall contribute to the effort of tackling climate change. Turkey was included in the Annex I of

the UNFCCC but not in the Annex B of the Protocol, and therefore did not have any quantified emission limitation or

reduction target under the Protocol. Although greenhouse gas (GHG) emissions per capita in Turkey were still low, their

growth rate was the highest among Annex 1 countries to the UNFCCC. During the 1990-2012 period, GHG emissions in

Turkey increased by 133 percent.3 Turkey’s GHG emissions were rising on the back of a carbon-intense economy with

carbon dioxide (CO2) making up 81 percent of the total GHG emissions in 2012.

1 After a temporary slowdown during the global financial crisis between 2008 and 2009, the demand for energy, especially for electricity, had grown rapidly. Energy imports (mostly oil and gas) accounted for over 20 percent of Turkey’s imports and about 50 percent of the account deficit. 2 Electricity Market and Security Supply Strategy (2009); National Climate Change Strategy (2010); National Climate Change Action Plan (2011); Energy Efficiency Strategy (2012). 3 UNFCCC, Turkey – GHG Emissions Profile, 2012.

https://unfccc.int/files/ghg_emissions_data/application/pdf/tur_ghg_profile.pdf


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5. While not having a direct target on emissions, existing laws on energy and environment in Turkey provide

important incentives that will have an impact on GHG emissions. Turkey’s Environmental Law includes a provision (Article

3) on the use of carbon trading as a market instrument to promote clean technologies. The Renewable Energy Law,

adopted in 2005, was a major step towards realizing Turkey’s goals of increasing the share of renewable energy in the

overall electricity production. The Renewable Energy Law established a support mechanism, guaranteeing feed-in-tariffs

above electricity market prices for renewable energy technologies for the first ten years of operation. With the

amendment approved in 2010, the support mechanism has catalyzed an increase in renewable energy technologies in

Turkey; renewable energy production has moved from 0.3 percent in 2005 to 5 percent in 2014. The Energy Efficiency

Law, adopted in 2007, aims “to increase efficiency in using energy sources and energy in order to use energy effectively,

avoid waste, ease the burden of energy costs on the economy and protect the environment” (Article 1). The Electricity

Market Law (2013) aims at “the development of a financially sound and transparent electricity market operating in a

competitive environment under provisions of civil law and the delivery of sufficient, good quality, low cost and

environment-friendly electricity to consumers.” The Electricity Market Law also provides a legal basis for renewable

energy trading.

6. Two important policy documents guide the national climate change policy in Turkey. The National Climate

Change Strategy (NCCS) (2010-2020) defines the national climate change vision. Among the strategies put forward in the

NCCS are participation in international negotiations for the establishment of a comprehensive and functional

international cooperation mechanisms to combat and adapt to global climate change and taking national stakeholders’

feedback into account in developing an action plan. Within the framework of the NCCS, Turkey also prepared the National

Climate Change Action Plan (NCCAP), which was approved in 2011. The NCCAP sets clear objectives for mitigation and

adaptation, including the development of the infrastructure for the establishment of a national emissions trading system

(ETS) and carrying out activities to increase awareness in carbon markets in Turkey.

7. A number of policy documents in other sectors are aligned with the objectives of the NCCP and NCCAP. These

include, inter alia, the Energy Efficiency Strategy Paper (EESP), adopted in 2012, adapting a target to reduce energy

consumed per GDP by at least 20 percent compared to the 2011 level and drawing a roadmap for energy efficiency

activities, and the Istanbul Financial Center Strategy and Action Plan, which sets the establishment of a carbon market

as one of the main pillars within the overall objective of transforming Istanbul into a regional financial center in the

Middle East, North Africa, and Eurasia regions.

8. In April 2012, Turkey adopted the “Regulation on Monitoring of Greenhouse Gas Emissions”, setting the

principles and procedures to design and implement a robust, installation-level4 GHG emissions monitoring, reporting,

and verification (MRV) program based on the MRV regulation of the EU ETS.5 Following the amendments on several

articles, the regulation was revised and republished on May 17, 2014. “Communique on Monitoring and Reporting of

Greenhouse Gas Emissions”, setting out the obligations on monitoring and reporting, went into force on July 22, 2014,

and “Communique on Verification of the Greenhouse Gas Emissions and Accreditation of Verifiers” went into force in

2017 (after repealing an older Communique on verification and accreditation dating back in 2015). Together with its

subsequent Communiques, the MRV Regulation established an installation-level MRV system, covering all major sources

4 An installation refers to a fixed or semi-fixed location of a complete system or a self-contained unit that provides a particular service or is used or a particular industry. 5 Turkish MRV by-law was developed in line with the EU Regulation No. 525/2013 on a mechanism for monitoring and reporting greenhouse gas emissions, and for reporting other information relevant to climate change at national and Union level.


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of GHG emissions from the energy (combustion of fuels with output of 20 MW thermal or more) and industry sectors

(coke production, metals, cement, glass, ceramic products, insulations materials, paper and pulp, chemicals over

specified threshold sizes/production levels).

9. The Climate Change and Air Management Board (CCAMCB), chaired by the Minister of Environment and

Urbanization, is an inter-ministerial board responsible for coordination of the studies on determination of national and

foreign policies and taking measures for the purpose of combatting climate change and prevention of air pollution. The

CCAMCB is composed of a cross section of relevant public and private sector stakeholders, including the Ministry of

Industry and Technology (MoIT), Ministry of Treasury and Finance (MoTF), Ministry of Energy and Natural Resources

(MENR), Turkish Union of Chambers and Commodity Exchanges, and other public and private institutions.

Higher-Level Objectives to which the Project Contributes 10. The project was included in the Country Partnership Strategy (CPS) between the World Bank and Turkey for the

period of FY12-FY15. The CPS Strategic Objective 3: “Deepened Sustainable Development” included policy advice and

financing to address energy, environment, and climate change challenges in an integrated manner. The project objectives

were aligned with CPS Thematic Area 6: “Improved supply of reliable and efficient energy, increased use of renewable

energy sources and climate actions under implementation”. The project complemented other Bank operations in Turkey.

The first three installments of the Environmental Sustainability and Energy Sector (ESES) Development Policy Loan (DPL)

series had a focus on the energy sector and GHG emissions, consistent with the energy, climate and environmental goals

of the EU. Approval of the Climate Change Strategy and Action Plan, upon which the PMR activities were built, was also

a part of the DPL series. The project has been synergetic with the energy sector EU-IPA Technical Assistance Project’s

review of alignment of Turkey’s legal and institutional framework for electricity, natural gas, energy efficiency, and

renewable energy with the EU’s energy acquis.

11. Following the UNFCCC’s 15th Conference of the Parties (COP 15) in Copenhagen in December 2009, bottom-up approaches to address climate change came to the fore in the international climate change policy context. The Partnership for Market Readiness (PMR) emerged in this context with an objective to support countries in preparation and implementation of climate change mitigation policies, including carbon pricing instruments. The PMR brings together more than 30 developed and developing countries, international organizations, and technical experts to facilitate country-to-country exchange and knowledge sharing for enhanced cooperation and innovation. Turkey joined the PMR as an implementing country partner in 2011 and like most of the implementing country partners, it was at a pre-decision stage with respect to introducing carbon pricing and other instruments based on its national circumstances and in alignment with its development priorities. PMR activities were designed to help Turkey with preparing for policy choices and future implementation by focusing on improving technical and institutional readiness.

Theory of Change (Results Chain) 12. The project was designed as a free-standing trust fund (recipient-executed trust fund) to be managed by the World Bank and executed by the Ministry of Environment and Urbanization (MoEU). The project included consultancy services for undertaking technical support to strengthen the MRV system and analytical support for informed decision making on carbon pricing policy instruments. The long-term outcomes were envisaged as readiness for a market-based instrument, likely an ETS, which could potentially be integrated to the EU ETS.


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13. The results chain of the project is described in the Table 1 below.

Table 1: Results Chain

Activities Outputs Intermediate Outcomes/ PDOs

Long-term Outcomes/ Objectives

Consulting services Site visits Data collection/reporting

Monitoring plans Training

MRV system in the electricity sector other sectors piloted

ETS and carbon market policies implemented for cost-effective low-carbon development Consulting services

Data collection/reporting Modeling

Analytical studies Training

A carbon market policy options document submitted to the CCAMCB

Project Development Objectives (PDOs) 14. The PDO is “to assist Turkey to implement a greenhouse gas Monitoring, Reporting, and Verification (MRV) pilot in the electricity sector, based on Turkey’s MRV regulation, and to provide analytical information for the establishment of a carbon market in Turkey.” 15. The main project beneficiary is the MoEU as the lead ministry for Turkey’s climate change policy and the designated implementing agency for PMR. Charged with regulating the Turkish MRV system, the MoEU directly benefited from the MRV pilots that were designed to road-test the system prior to the commencement of the official compliance cycle. Direct beneficiaries also include the installations’ operators who participated on a voluntary basis in the MRV pilots, sector associations that attended the MRV trainings of trainers and other stakeholders that would be directly impacted by the MRV regulation (namely, the operators of the obligated facilities, verifiers and accreditation bodies). The analytical studies on carbon pricing to support policy decision making benefited a number of public and private stakeholders who participated in the workshops and meetings in order to provide feedback and improve their knowledge and capacity on alternative policy instruments. These beneficiaries include, inter alia, the MoTF, the MENR, the MoIT, the Energy Market Regulatory Authority (EMRA), Ministry of Trade (MoT), the Turkish Energy Exchange Company as well as industry associations. The public at large also benefited in terms of increased awareness on climate change and carbon markets.

Key Expected Outcomes and Outcome Indicators 16. The outcomes and outcome indicators for the project are directly related to the two-fold PDO:

• Outcome indicator 1: Piloting of the MRV system in the electricity sector. This indicator measures whether Turkey's greenhouse gas MRV system is piloted among installations within the electricity sector.6

• Outcome indicator 2: Submission of a carbon markets policy options document to the CCAMCB. This indicator measures whether a policy options document on carbon market policy instruments is submitted to the CCAMCB for its consideration.7

6 The final closing date of the project was December 2018; the initial target date for this outcome indicator was December 2015. 7 The final closing date of the project was December 2018; the initial target date for this outcome indicator was March 2017.


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Components

17. The project has four components:

• Component 1: Implementation of an MRV pilot in the electricity sector (estimated: USD 700,000; actual: USD 691,864). This component would pilot the use of the MRV procedures within the electricity sector, and with other willing companies and stakeholders (such as accreditation bodies and verifiers) in other sectors including preparation of monitoring plans for the electricity sector, collection of data by the volunteering installations, and reporting and verification of such data, to identify potential problems in a timely fashion.

• Component 2: Analytical work to inform decision making on the use of market-based instrument(s) (estimated: USD 1,300,000; actual: USD 1,223,648). This component would involve conducting analytical studies to inform decision-making on the use of market-based instruments (MBIs), including, inter alia, (i) a study on use of an ETS for the electricity sector; (ii) a study on selection of MBIs and modeling for sectors covered and not covered by the MRV regulation; (iii) a study on GHG market modeling for selected sectors covered and not covered by the MRV regulation; and (iv) a synthesis report of the above-mentioned studies for consideration by the CBCC and policy makers.8

• Component 3: Stakeholder training, consultation/engagement and public awareness activities (estimated:

USD 500,000; actual: USD 342,931). This component involves stakeholder training, consultation/engagement

and public awareness activities, including: (i) conferences and workshops to support the activities under

Components I and 2; (ii) consultation meetings with stakeholders; and (iii) public awareness activities (media,

high level public/private meetings, etc.). The funds were not fully utilized due to exchange rate fluctuations in

favor of USD, resulting in savings during implementation.

• Component 4: Coordination and expert support for the implementation of MRV and MBIs (estimated: USD 500,000 + 350,000;9 actual: 562,279). This component involves establishment of a project management unit (PMU) to coordinate and support implementation of MRV and MBI activities. The component includes the USD 350,000 from the PMR Turkey Preparation Grant (which the PIU was able to use during implementation period as well) in addition to the USD 500,000 from the Implementation Grant.

8 A complementary analytical study, “Development of Marginal Abatement Cost Curves (MACC) for Power Sector of Turkey” was conducted in parallel with financing from the PMR Policy Work Program. During the implementation, another analytical study, “Assessment of Carbon Leakage Risk for Turkey under Carbon Pricing Policies,” was added; funds were reserved for it in the procurement plan all along as an additional study while the scope of study was to be decided based on stakeholder consultations. 9 Consisting of the USD 350,000 from the PMR Turkey Preparation Grant in addition to the USD 500,000 from the Implementation Grant. Coordination and expert support component preceded the Project’s Implementation Phase and included the preparation of the Market Readiness Proposal that was submitted to the Partnership Assembly and approved in May 2013.


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Project Cost and Financing

18. The cost of the project was estimated to be USD 6,000,000 with the corresponding financing from the PMR preparation and implementation grants and estimated in-kind counterpart contribution of the MoEU. Table 2 below provides a breakdown.

Table 2: Project Cost and Trust Fund Financing (USD)

Project Components Trust Fund Financing (USD)

1. Preparation Phase

Project Management costs 350,000

2. Implementation Phase 3,000,000

Component 1 700,000

Component 2 1,300,000

Component 3 500,000

Component 4 500,000

Total 3,350,000

Turkish Government Counterpart Funds (in-kind) 2,650,000

Significant Changes During Implementation

19. There were no changes to the PDO or outcome indicators during project implementation. The grant closing date was extended twice at the request of the Government as follows. 20. In December 2016, the Government requested a one-year extension of the grant closing date (from June 30, 2017 to June 30, 2018) and the Bank concurred with the request in January 2017. The extension had no budgetary implications, and the reason for the request was the expected delay in the completion of the analytical studies due to the need for extensive stakeholder consultations. It should be noted that the project activities were designed taking into consideration the sequential nature of the studies, and therefore they could not all be conducted in parallel (i.e., the outputs of the first two studies were needed for the modeling study, and all three studies were needed for the synthesis report).

21. In May 2018, the Government requested another extension of the closing date by six months (until December 31, 2018), and the Bank concurred with this request in June 2018. The reason for this extension was to provide sufficient time for review of the project outputs by stakeholders and effective dissemination of the analytical studies on carbon leakage, market modeling, and the synthesis report, including the organization of a number of conferences for high-level representatives from the public and private sectors. The extension was also proposed in order to avoid a long gap with the second tranche of the PMR funding (Additional Finance), which was launched in March 2019. Extending the project closing allowed for an effective stakeholder engagement, analysis and dissemination of project outputs, and continuity between the two phases of the project.


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II. OUTCOME

Relevance of PDOs

22. Relevance of PDO is High. The project objectives are highly relevant to the country’s development agenda and the World Bank’s CPS. The PMR Turkey project was approved when the Bank was implementing the CPS for the period of FY12-16. Deepening sustainable development was one of the strategic objectives of CPS FY12-16, and the PDOs of the project directly contributed to the sustainable development objective of the CPS for the period of FY12-16.

23. At project closing at the end of 2018, the Bank had begun to implement Country Partnership Framework (CPF) FY18-21, which has three focus areas: growth, inclusion, and sustainability. The project is highly relevant to the current CPF’s sustainability focus area. The PMR work is aligned with CPF Objective 9, namely “increased sustainability of infrastructure assets and natural capital,” which has the following results indicators: (i) Cumulative energy savings achieved through WBG-financed energy sector projects; and (ii) Annual GHG emissions reductions.

24. The PMR Turkey project is further aligned with Objective 7 of the current CPF; “improved reliability of energy supply and generation of green energy”. Objective 7 aims to help Turkey reduce its energy dependence, support the energy reform agenda, and diversify its energy generation (among other things, to include more renewables). Harmonization with the EU standards is also identified as a key objective in the new CPF, to which the PMR Turkey project contributes.

25. At COP 21 in Paris in December 2015, Parties to the UNFCCC reached a landmark agreement to combat climate change and to accelerate and intensify the actions and investments needed for a sustainable low-carbon future. The Paris Agreement for the first time brings all nations into a common cause to undertake ambitious efforts to combat climate change and adapt to its effects. Turkey submitted its Intended Nationally Determined Contribution (INDC) in the run-up to the Paris conference, pledging a GHG emissions reduction of up to 21 percent in 2030 as compared to a BAU scenario.10 The PMR project is highly relevant in this context as Turkey’s INDC includes the use of carbon credits from international market mechanisms to achieve its mitigation target in a cost-effective manner.

26. Given the alignment and consistency of the project with the current CPF and Turkey’s INDC, relevance of PDOs is rated High.

Achievement of the PDOs (efficacy)

27. The PDO outcome indicators provided definitive targets (binary targets: Yes or No) to measure the achievement of the two-fold PDO.

10 The Government of Turkey has not ratified the Paris Agreement. Turkey’s pledge is called Intended Nationally Determined Contribution (INDC), as opposed to Nationally Determined Contribution (NDC), as it has not formally joined the Paris Agreement through ratification. Under the provision of the Paris Agreement, countries are expected to submit an updated NDC every five years, representing progression beyond the country’s current NDC to reflect its highest possible ambition.


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28. The outcome indicator for the first objective measures whether Turkey's greenhouse gas MRV system is piloted among installations within the electricity sector. Piloting of the MRV system for electricity, cement and refinery sectors was completed by July 2016, including the preparation of the monitoring plans and the emission reports and verification of the emission reports.

29. The outcome indicator for the second objective measures whether a policy options document on carbon market policy instruments is submitted to the CCAMCB for its consideration. All policy options documents were completed and submitted to the CCAMCB as of December 2018. 30. Intermediate results indicators included the necessary steps for achieving the PDO outcome indicators and were achieved in a satisfactory manner: (i) Monitoring and Verification protocols to be developed; and (ii) Background analytical reports feeding into the final policy options report.

31. Efficacy is rated Substantial for the achievement of the two development objectives of the project. The success of the components is evaluated based on the desk-review of several reports prepared by the MoEU/PIU (including the annual progress reports submitted to the PMR Partnership Assembly and the draft version of the Beneficiary Report, which was finalized and submitted to the World Bank by the MoEU in May 2019).11 Additionally, a World Bank mission traveled to Ankara during May 13-16, 2019 to meet with the MoEU/PIU and interview key stakeholders for the purposes of preparation of this Implementation Completion and Results Report (ICR). The interviews were designed to evaluate project performance with respect to the implementation of the project activities and engagement with stakeholders.

Achievement of the First Objective: Substantial

32. This objective was achieved through the successful piloting of the MRV procedures and practices in the electricity, cement and refinery sectors, seeking broader engagement with other relevant stakeholders (accreditation bodies, verifiers, etc.). Project activities targeted the preparation of Monitoring Plans, Emissions Reports, and Verification Reports in the three-piloted sectors in order to identify data discrepancies and other readiness issues in the whole MRV cycle and has been complementary to Turkey’s planned activities for fully implementing its MRV system with funds from the Turkish national budget as well as from other donors. Besides the initial 18 electricity installations, 6 additional installations (5 cement and 1 refinery) volunteered to take part. Five contracts were administered as follows: 3 contracts for the preparation of the Monitoring Plans and Emission Reports of 24 installations and 2 contracts for the verification of the Emission Reports. Site visits were carried out by the consultants and the MoEU for 22 installations, both during the preparation of the Monitoring Plans and the verification of the Emission Reports. 33. The MoEU and the accreditation bodies received “training of trainers” from the verification experts on how to carry out verification services and the EU accreditation rules for verifiers. In order to increase the level of understanding on MRV and carbon pricing, the MoEU decided to provide the general public and the stakeholders with more detailed information, including case studies and applicable implementation examples from other countries. As part of this effort, the MoEU translated the relevant reports prepared by the World Bank, such as the “State of the Carbon Pricing 2014” and disseminated them to relevant audiences at project events. A closure conference was organized in February 2016 to share the results and lessons learned from the MRV pilots. The

11 The Implementation Status Reports (ISRs) submitted by Turkey to the PMR Partnership Assembly can be found at the PMR website: https://www.thepmr.org/country/turkey-0. The Beneficiary Report can be found attached in Annex 4.


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one-day event brought together about 120 participants from various ministries and industries, including companies from electricity, cement, paper, glass, and ceramic manufacturing sectors. Lessons-learned from the MRV pilots were summarized in brochures and were distributed at several project workshops as well as at the 14th PMR Partnership Assembly (Peru) and at the UNFCCC COP 22 (Marrakech). 34. The MRV pilots have provided significant benefits to the Government by improving the technical and administrative capacity on regulating the MRV system and strengthening communication with the private sector. The MoEU implemented the entire MRV scheme for the first time under the PMR Turkey Project. The pilots provided a valuable chance to road-test the regulation and the online registry to identify any issues that may need improvement. The site visits enhanced the Ministry staff’s understanding as regulators on how to implement the regulation on site, the bottlenecks and issues at the practical level. The trainings addressed at the Ministry and the Turkish Accreditation Body improved capacity on verification and accreditation. 35. The MRV pilots have provided significant benefits to the private sector by improving capacity to comply with the MRV Regulation and strengthening communication between the private sector and the MoEU. For the installations, the MRV regulation together with the Communiques on how to make the calculations and prepare the reports were initially perceived as difficult to understand and implement. As the pilots were implemented ahead of the official enforcement of the regulation, the experiences and lessons learned helped the pilot installations, other installations within the pilot sectors, as well as installations in related sectors, such as ceramics and glass, to comply with the regulation. 36. The pilots were especially beneficial for the electricity sector for two reasons. First, Turkish electricity sector is very fragmented in terms of fuel, technology, capacity, age, and ownership (state-owned vs. privatized). Second, there have been significant data and calibration gaps with electric utilities depending on their age. The selection of the pilot installations was made with the intention to have a good representation of the sector to the extent possible. This resulted in the selection of 18 installations with different features. The selection enriched the lessons learned, bottlenecks and experience, assuring that non-pilot installations also benefit from the outcomes as much as possible. The closure conference and dissemination of knowledge products were especially beneficial for installations and sectors that did not participate in the MRV pilots as stated by the representatives of industry associations that were interviewed as part of the World Bank mission. 37. Developed by the MoEU as part of the harmonization process with the EU ETS Directive, the workability of the MRV Regulation and the online registry was first tested with the PMR support through the MRV pilots. The success of the MRV pilots is measured through the success in the implementation of the MRV Regulation by the MoEU and performance of the relevant actors, such as the installations, verifiers, and the accreditation agency covering the preparation and submission of the monitoring plans, checking quality and asking for corrective action, preparation and verification of emission reports and accreditation of verifiers. The project provided support in all these aspects to the relevant actors. For the first time in October 2017, about 800 installations submitted their verified emissions reports covering the years 2015 and 2016, collectively representing about 50 percent of the 2015 national emissions. As stated in the MoEU’s progress reports and expressed by the participants during the interviews, the MRV system continues to run successfully.

Achievement of the Second Objective: Substantial


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38. The Synthesis Report, entitled Carbon Pricing Policy Recommendations for Turkey, was prepared and presented to the CCAMCB. The Report provided recommendations on suitable carbon pricing policies with applicable design elements. As part of this final assignment, several stakeholder meetings as well as one-on-one meetings with key ministries were conducted to discuss with the public and private stakeholders the results of the below-mentioned analytical studies, especially the modeling work. A closure meeting was organized on May 16, 2018 to gather stakeholder feedback. The report was finalized in June 2018 and presented to the high-level public-sector representatives who are members of the CBCCAM on November 27, 2018 with the leadership of the Deputy Minister of Environment and Urbanization. The meeting gathered 33 participants from 11 different institutions. The synthesis report built on the following 4 analytical studies that were completed under the project through separate consulting services contracts. 39. Analytical Report 1: Roadmap for the Consideration of Establishment and Operation of a Greenhouse Gas Emissions Trading System in Turkey was completed in December 2016. The study provided an analytical assessment on the suitability and feasibility of ETS in Turkey under five major parts: (i) design elements of an ETS and global examples; (ii) policy interaction analysis with existing policies and strategies; (iii) legal and institutional gap analysis to implement ETS; (iv) ETS implementation roadmap addressed at the public sector; and (v) ETS readiness guide for private sector. The assignment included extensive capacity building and feedback through several workshops that were organized in 2016 for a total of 14 days to collect information and views from various stakeholders and to enable participants to gain in-depth knowledge on ETS topics. The final deliverables are published on the PMR Turkey website in English: (i) “ETS Roadmap for Turkey”, providing the Government a step-by-step guidance on designing and establishing an ETS; and (ii) “ETS Guidance for Plant Operators”, providing a guide for the private sector for a potential implementation of an ETS in Turkey. A closure conference to disseminate the outputs was held on December 12-13, 2016 with the participation of about 250 representatives from the public and private sectors. During the conference, the Turkish translation of the PMR knowledge product, “Emissions Trading in Practice: A Handbook on Design and Implementation” was distributed to the participants along with the project deliverables and another PMR knowledge product, “Carbon Leakage Report”. 40. Analytical Report 2: Assessment of Market-based Emission Reduction Policy Options for Turkey assessed and advised on the suitability of different market-based instruments for Turkey, such as carbon tax, scaled-up crediting mechanisms, energy efficiency trading, renewable energy trading and leveraging results-based finance. The analysis looked at (i) how each MBI functions and their effectiveness; (ii) revenue cycling considerations; (iii) policy interaction analysis with the current policies and among MBIs; and (iv) recommendations. One information meeting and five workshops were held bringing together the public and private sector stakeholders. Final Report and an Executive Summary Report were distributed to participants during the closing conference in May 2017. 41. Analytical Report 3: Modeling Fiscal, Economic and Sectoral Impacts of Carbon Pricing in Turkey was undertaken to understand the implications of different carbon pricing mechanisms in Turkey, leading in turn to recommendations on the most suitable and cost-effective options. The assignment analyzed ETS, carbon tax and renewable energy support mechanism with changing ambition levels, combining three core models, namely ViEW, TIMES and IMM, with off-model analytical techniques to provide a holistic view of the likely impact of a market-based instrument on the Turkish economy. The assignment was launched in March 2017 with a steering meeting that convened key public and private stakeholders and included three interim meetings (July, September and December 2017) that were organized to facilitate data collection and verification as well as collecting feedback on interim results. A closure meeting was organized in March 2018 to evaluate the results of the modeling studies. The modeling report was finalized in June 2018.


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42. Analytical report 4: Development of Sectoral Marginal Abatement Cost Curves for Turkey was undertaken through the Policy Work Program of PMR to support the MoEU in building capacity for effective INDC implementation, particularly through the development of power sector emissions mitigation marginal abatement cost curves. 43. Analytical Report 5: Assessment of Carbon Leakage Risk for Turkey Under Carbon Pricing Policies was undertaken to help comprehend the potential impacts of carbon pricing on the emission intensive sectors in Turkey and how those policies might impact their international competitiveness. Stakeholder workshops starting in 2015 had identified carbon leakage as one of the most controversial topics. In response, this activity was launched in November 2017. It included an initial sector-level leakage risk assessment based on three international methodologies – the EU Emissions Trading Scheme (ETS) Phases III and IV, and California – and other quantitative insights. A stakeholder meeting was organized followed by one-on-one meetings with each sector during January 2018. Sector surveys and briefs were developed. The closure meeting was organized on May 29-30, 2018 to gather feedback for the final outputs. 44. Capacity building and stakeholder engagement activities were successfully undertaken. Throughout the course of implementation, about 20 workshops, 7 conferences, and more than 25 meetings were carried out to enable capacity building and information-based discussions with stakeholders and to mobilize support for carbon pricing. Project website (available in Turkish and English) has been live since June 2016, presenting the final project deliverables, project documents, reports, presentations and information on project activities. The project website also contains a number of World Bank and PMR knowledge products related to carbon pricing, including the Turkish translation of some key PMR reports. 45. The analytical studies have provided significant capacity building for both the public and private sector. The analyses and other PMR deliverables on the suitability of ETS, carbon tax and other MBIs, and modeling activities have gathered high attention from key stakeholders, especially in the energy sector. The capacity building workshops facilitated data collection and provided a multi-stakeholder and interactive environment for the public and private sector institutions to discuss for the first time the applicability of the MBIs for Turkey as well as the expected roles and responsibilities. All key ministries, including the MENR, MoTF, MoIT, and MoT as well as industry associations actively participated in the workshops and meetings and provided feedback for the analytical reports. During the World Bank ICR mission, interviewees expressed a high level of satisfaction with respect to the MoEU’s engagement of stakeholders. 46. Analytical Report 3 (the modeling study) and the Synthesis Report were shared with the Bank; due to confidentiality, some private sector related data used to conduct the modeling were removed from the final report. The Synthesis Report concludes that market-based instruments are far more cost-efficient than command-and-control instruments at reducing emissions. In particular, the Report recommends implementation of ETS with carbon tax as the most feasible scenario for Turkey. A few months after the presentation of the final outputs and the Synthesis Report to the CCAMCB in November 2018, the Turkish Government signed a Grant Agreement with the World Bank to implement the second phase of the project, which builds upon the recommendations of the Synthesis Report and aims to achieve the necessary developments for piloting an ETS. The second phase of the PMR project started in January 2019 and will run till June 2020.


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47. Given the Substantial ratings for achieving the two PDOs, the overall rating for the project’s efficacy is rated Substantial.

Efficiency

48. The project did not include a financial and economic analysis at the design stage. Therefore, it is not possible to quantify the impact of the investment. Nevertheless, the ICR assesses the efficiency in “use of resources” as Substantial in line with the following factors:

(i) The project led to several high-quality outputs which were delivered by the closing date. (ii) Actual component costs remained more or less the same as the estimated costs at

appraisal.

(iii) Of the USD 3,000,000 approved for the project for the implementation phase, USD 2,878,327.94 was disbursed as of December 31, 2018 for the Phase I PMR Project.12

49. Efficiency is rated as Substantial. The MoEU reviewed all planned outputs on time through an operation executed in house with the support of the external PIU experts, namely the technical coordinator and the project assistant and effectively engaged public and private sector stakeholders on collection of data and information for the studies, collection of feedback and dissemination of outputs. The interviews conducted by the Bank team during the ICR mission showed an overwhelmingly positive reception of the project activities and a high level of trust in the MoEU’s oversight of the MRV system. The MoEU was also responsible for coordination of complementary projects, including the GIZ project, thereby maximizing synergies and avoiding overlaps. Despite the fact that the project closing date was extended for 18 months, from June 30, 2017 to December 2018, due to the need for extensive stakeholder consultations and the sequential nature of the analytical studies, as well as consideration for a smooth transition to the second phase of the PMR, there were no budgetary implications, and the project was delivered with efficiency.

50. The MoEU staff was supported by the external PIU experts, including a Project Technical Coordinator, a Financial Management and Disbursement Specialist, a Procurement Specialist, and a Project Assistant. The PIU composition involving the MoEU’s own staff and external experts allowed for a strong in-house expertise and an efficient coordination and cross-fertilization among project activities. However, the procurement consultant has declined to renew contract in June 2018, reducing available support for the PIU, which had an impact on the procurement processes with regards to quality and efficiency until project closing. Additionally, a senior communication expert was hired to organize high-level meetings between April and June 2018 to ensure the highest level of visibility for the project’s outcomes.

51. The PIU of the MoEU reported regularly on the status of implementation through annual Implementation Status Reports (ISRs). Turkey submitted its ISRs timely annually from 2015 to 2019 to the PMR Secretariat, reporting on the status of progress with respect to the project activities, and presented the ISRs at

12 Of this amount, USD 2,820,721.76 was used, and the unused amount of USD 57,606.18 was returned to the trust fund on February 22, 2019.


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the PMR Partnership Assembly (PA) meetings. Turkey’s ISRs are available at the PMR program website (https://www.thepmr.org/country/turkey-0).

Justification of Overall Outcome Rating

52. The project had no shortcomings in its relevance or efficacy, and the efficiency was substantial both at the project level and on the client side. The project’s relevance is High, efficacy is Substantial, and efficiency is Substantial. Thus, the overall outcome rating is Satisfactory. See Table 3 below.

Table 3: Overall Outcome Ratings

Relevance of PDO Substantial

Efficacy Substantial

Efficiency Substantial

Overall Outcome Rating Satisfactory

Other Outcomes and Impacts 53. Turkey has been actively involved in sharing its experiences with other countries. According to the PMR Secretariat’s Annual Report 2018, Turkey has led other countries in implementing most of the PMR activities, completing all activities related to development of carbon pricing (carbon tax, ETS, and crediting) as well as core technical activities such as MRV and data management and registries. Among the 19 countries participating in the PMR as implementers, Turkey has been considered a leader in advancing project implementation and in sharing knowledge with other countries, including terms of references (TORs) for projects activities, studies and reports, and lessons learned. 54. The project has helped strengthen local analytical capacity for effective implementation of Turkey’s INDC. Turkey has been exploring the feasibility and potential outcomes of MBIs to meet the targets announced in its INDC and more broadly to support the decarbonization of the economy. However, no political decision has been taken regarding the introduction of an MBI (although as part of EU accession discussions, Turkey plans to consider harmonization of primary and secondary EU ETS legislation). While some stakeholders appear more open than others to any type of MBI (be it an ETS or a carbon tax), the industry associations as well as the MoIT and MoT have expressed the desire to see more analytical work, especially on the potential impact of the policies and instruments on their specific sectors. 55. The Energy Exchange Istanbul (EXIST) announced in their Corporate Strategy for 2017-2020 that it would start preparations for developing market infrastructure for ETS in 2018 and begin to work on ETS design in 2019. EXIST representatives participated in the PMR workshops regularly and actively and provided detailed comments on the ETS report. They also visited the MoEU in 2018 to announce the establishment of a working group on ETS and invite the Ministry to join the working group.

https://www.thepmr.org/country/turkey-0


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III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME

Key Factors During Preparation

56. Project objectives. At the preparation phase, the objectives of the project were discussed extensively between the World Bank and the MoEU and other stakeholders. Due to the nature of the project, the PDO was set with a direct link to the project activities and outputs. With respect to the first PDO of assisting the Government to implement a GHG MRV in the electricity sector, targeting the electricity sector was appropriate as the sector was the major source of GHG emissions in Turkey. Furthermore, the project aimed to achieve this objective based on Turkey’s MRV regulation, making the objective both realistic and country-driven. Another objective of the project was to provide analytical information for the establishment of a carbon market in Turkey, which was at the right level of ambition for this PMR project, since how the information would be used and whether recommendations would be adopted were beyond the immediate scope or objective of the project.

57. Results framework and implementation support. The project’s results framework was simple and straightforward; the results indicators were clear and fully aligned with the project objectives. Responsibility for data collection was clearly specified in the results framework. An implementation support strategy was developed, with technical support and training to be provided by the PMR Secretariat and implementation support by the Bank energy task team. Interviews with the stakeholders by the ICR mission confirmed that the implementation support strategy was carried out effectively during project implementation.

58. Risk identification and mitigation. At the appraisal stage, risk ratings and risk mitigation measures were well considered. The Project Appraisal Document (PAD) gave a Moderate rating for the overall implementation risk; a Low rating for stakeholder, governance, and social and environmental; a Moderate rating for project design, linkage to other donors, and sustainability; and a Substantial rating for implementing agency’s capacity. With respect to the stakeholder risk, the PAD pointed out that impacted industries and enterprises raised concerns and objections, which could potentially expose the Bank to some reputational risk. Risk mitigation measures were identified accordingly, including through stakeholder dialogues, to ensure that all parties fully understand the planned project activities and the benefit of capacity building and technical assistance provided by the project. Interviews with the industry associations and enterprises by the ICR mission confirmed that stakeholder dialogues and capacity building successfully mitigated the stakeholder risk, and all stakeholders spoke favorably of the Bank and the benefits of the project despite concerns of potential regulatory measures or market-based instruments that could affect them.

59. Readiness for implementation. The PMR Turkey Project involved a preparation phase and an implementation phase. The Grant Agreement for the preparation grant (USD 350,000) was signed in December 2011, and the preparation grant supported Turkey to formulate its Market for Readiness Proposal (MRP), which was endorsed by the PMR Partnership Assembly, and an implementation grant of USD 3 million was approved on May 28, 2013. In addition, since Turkey had adopted MRV legislation for GHG emissions in April 2012, the MoEU was highly committed and ready to implement the PMR Turkey Project once the grant for implementation was approved. Identification of proper stakeholders at the design stage, including key members of the CCAMCB and the industries for MRV piloting, also contributed to the project’s readiness for implementation. In addition, the project was designed in phases, taking into account the sequential nature of the activities (e.g., monitoring, reporting, verification, and accreditation) while integrating stakeholder concerns when deciding on the topic and scope of the analytical studies (e.g., carbon leakage study was added to the project based on the feedback from


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stakeholders. In general, stakeholder consultations were scheduled before, during and towards the end of each study to ensure that stakeholder concerns were addressed and to allow for synergies between the studies). Such approach mitigated the project risk and enhanced readiness for implementation.

Key Factors During Implementation

Factors outside the control of government and/or implementing entities

60. A relevant political factor is Turkey’s status under the UNFCCC and the Paris Agreement. As discussed earlier, Turkey ratified the UNFCCC in 2004 and was included in the Annex I of the UNFCCC (i.e., as a developed country). Turkey submitted its INDC to the UNFCCC in 2015, expressing its intention to decrease GHG emissions by up to 21 percent in 2030 from the BAU level. However, to date Turkey has not ratified the Paris Agreement, excusing its access to climate finance was limited given its position (Annex I) in the UNFCCC Annexes. Although this political factor did not have a direct impact on achieving the objectives of the project, the issue was brought up by some government ministries and industry stakeholders as a factor that could add to the uncertainty of adopting a market-based instrument in the near future. Once the political decision is made regarding the ratification of the Paris Agreement, it would send a clear signal and motivate the various ministries and the industries to take appropriate actions and prepare for the implementation of carbon pricing schemes. The PMR project has provided critical information and knowledge and laid a solid foundation for adopting MBIs in achieving the goals of Turkey’s INDC.

Factors subject to the control of government and/or implementing entities

61. The MoEU was committed to the project and demonstrated ownership and leadership throughout project implementation. The stakeholders interviewed by the ICR mission, ranging from various government ministries to industry associations and enterprises, unanimously considered the project timely and the support from the MoEU/PIU effective. Participation in the project significantly enhanced their knowledge about MRV and the potential policy options available, as well as their capacity to implement carbon pricing policies if and when they become a reality. The industry associations in particular were grateful to the MoEU/PIU for their timely support in providing practical training workshops and materials, answering their questions related to data collection and the MRV system, and addressing their comments and concerns related to the modeling exercise. They considered this project a best practice in Turkey in project coordination and stakeholder engagement. They also complimented the dedication of the PIU staff and the leadership of the PIU Coordinator in proactively engaging the stakeholders to advance project implementation. Most stakeholders interviewed also spoke highly of the consultants retained for the various components of the project.13

62. The PIU was staffed with proper expertise and worked effectively in project management and coordination. The PIU composition allowed for an efficient coordination and cross-fertilization of project activities. Hosting the PIU in the MoEU enabled the staff to work closely with the ministry for project coordination and to monitor administrative procedures and minimize delays. The PIU worked closely with the Bank team, the PMR Secretariat, and other agencies and experts. Furthermore, the PIU had smooth coordination with the GIZ on

13 An exception to this was with respect to one of the Verification consultants. However, this did not have a major impact on the project’s success. Another exception was with respect to Analytical Study 4: MACC, which was not a component of the PMR Turkey Project, but an activity financed by the PMR Policy Work Program.


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the online registry for the MRV System, which was developed in parallel with the MRV pilots under the PMR project.

63. The process of decision making and planning should be improved and made more efficient. Given the nature of project implementation, the Ministry could improve its responsiveness for advanced planning and decision-making processes for the project related activities. During the last few months of the project the PIU proposed to add additional activities for the financing to use the remaining funds, however there were difficulties encountered during the submission of justifications, the scope and timing of these activities and their alignment with project objectives.14

Factors subject to the control of the World Bank

64. Support of the Bank for project implementation was strong. The Bank, including the Energy GP and the PMR Secretariat, provided strong technical assistance to the PIU for project implementation. In particular, the support on preparing the TORs and review of project deliverables for the project activities was considered vital to the successful implementation of the project. Strong support was provided by the Bank through supervision missions, technical workshops, as well as day-to-day communications.

IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME

Quality of Monitoring and Evaluation (M&E)

65. M&E design. The project’s theory of change is clear and solid. The unit of measure for the two outcome indicators is binary (i.e., Yes or No). As such, the indicators at the PDO level are very easy to measure. The description of the indicators also provides a timeline, making both outcome indicators time-bound:

• Outcome indicator 1: Turkey’s GHG MRV system piloted among installation with the electricity sector.

• Outcome indictor 2: A policy options document on carbon market policy instrument submitted to the CBCC for its consideration.

66. The binary nature of the indicators, however, makes it difficult to assess the quality of the outcomes. For example, a Yes for the submission of the policy options document does not provide information or insights on the quality of the document. Such an outcome indicator bears resemblance of an output indicator.

67. M&E implementation. Project’s M&E during the implementation phase included the following:

68. Implementation Status Reports (ISRs): As per the PMR PA rules, Implementing Country Participants are required to provide status reports on implementation to the PA. Turkey, through PIU, prepared and submitted its

14 The amount of unused funds was small (about 5 percent of the total funding), however, and did not have a significant impact on the overall efficiency of project delivery.


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ISRs annually from 2015 to 2019, as per the Grant Agreement and these were reviewed and endorsed by the PMR PA. The PMR Project itself did not have requirement for additional ISRs in the Bank’s system, being a small-RETF.

• Completion Report: Implementing Country Participants are required to prepare a completion report to ensure objectives outlined in the MRP and the Grant Agreement are met and there is a plan for their sustainable continuation. The PIU/MoEU provided a Beneficiary Report in May 2019, where it is stated that given the preparation and launch of Phase II PMR implementation in Turkey, there is a natural continuation of the key activities of the project.

• Financial Statements: PMR Implementing Country Participants are required to prepare financial statements that reflect the operations, resources, and expenditures related to the activities detailed in the Grant Agreement.

69. The indicators included in the results framework were consistently reported in the ISRs, including the number of installations in each sector as well as the status of the analytical studies. The data collected and reported were highly reliable, and there were extensive site visits to the installations for data collection and verification.

70. M&E utilization. As the M&E data was input based with binary indicator targets, the impact of the M&E data on project success is difficult to assess. Notwithstanding, performance and results progress was tracked and used for management and decision-making and had led to the approval of Additional Financing for a PMR Phase II.

71. Justification of overall rating of M&E quality. The overall M&E quality is rated Substantial. Given the nature of the project, it is challenging to come up with a more robust design of outcome indicators and targets. The design of the results framework, indicators, and targets was fit for purpose, and the M&E implementation and utilization were found to be adequate and effective.

Environmental Safeguards, Social Safeguards, and Fiduciary Compliance

72. This project does not finance any investments, which may have adverse impacts on the environment. The environmental category of the project is C. There was no issue relating to compliance with environment and social safeguards.

73. Procurement. Majority of the contracts were subject to post-review with regards to procurement, where the prior reviews for CQS contracts were done at the early stages of the project. For the extension of the contracts of the individual contracts, Bank reviewed the justifications on the extensions. The procurement arrangements followed by the Ministry were generally in compliance with the Bank procedures. However, the duration between the advertisement of the EOIs and the signing of the CQS contracts were lengthy and inefficient for some of the contracts although they were subject to post review of the Bank. Also, delays were observed for the planning and decision-making processes of the Ministry during the revision and update of the procurement plan. This was significant during the last year of the project, where several discussions have taken place between the Bank on the eligibility of the proposed expenditures for the grant financing by the Ministry. Once the Bank team agreed on the justifications and the eligibility, the activities were introduced to the procurement plan and majority of these were also subject to post-review with regard to procurement. No procurement complaints were received


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during the implementation of the project, and there was no case of mis-procurement for the project. Close follow-up and assistance from the World Bank team has been provided to address procurement issues on time. The project was regularly supervised by the World Bank team and the procurement specialist. The consulting services contracts financed under the grant were completed as budgeted. However, time overruns for the consulting services contracts could not be avoided by the Ministry and delays were observed in the schedule of the grant activities. Bank also recommended the Ministry on the improvement of the filing system especially related to cost increases/decreases under non-consulting logistical services contracts. By the time of the grant closing, there was no major case of arbitration or dispute resettlement reported by the Ministry for the financed contracts. There have been few instances of disputes between parties in implementation and accordingly the client has been advised on the use of the contractual mechanisms. Procurement compliance has been Moderately Satisfactory throughout the project.

74. Financial Management. The Project remained in compliance with the Grant Agreement covenants on financial management. The interim unaudited financial reports were submitted on time and in satisfactory content. There were no overdue audit reports during implementation.

Bank Performance

75. Quality at entry. The Bank performance at entry is assessed as Satisfactory. The PMR is a country-led undertaking. Turkey was the first country to sign a PMR grant agreement with the World Bank. With the support of the Bank, Turkey received a preparation grant of USD 0.35 million in May 2011 and prepared its MRP, outlining the activities that it intended to undertake during the implementation phase of the PMR. Turkey submitted its final MRP and was granted an Implementation Phase funding of USD 3 million at the PMR Partnership Assembly in May 2013. The Bank played an important role as a partner to support Turkey during the design phase of the PMR project.

76. Quality of supervision. Quality of supervision is assessed as Satisfactory. The Bank provided intensive support throughout implementation. The Bank’s energy GP and the PMR Secretariat were involved in providing extensive technical support during the preparation of the TORs and the review of project outputs, as requested by the MoEU. The procurement and FM support was continuous during procurement stages and particularly when the PIU’s procurement specialist resigned in 2018. Apart from the TTL change in October 2017, there was no significant staff rotation on the Bank side. Thus, the overall quality of supervision was evaluated as satisfactory and confirmed by the MoEU during the ICR mission conducted in May 2019 and as assessed in the Beneficiary Report.

77. The Bank’s overall performance is assessed as Satisfactory.

Risk to Development Outcome

78. The risk to development outcome is assessed as Substantial. Development outcomes that have been achieved by the project are expected to be maintained for the most part except for the risk of a delay or an absence of a policy decision on establishing a market-based mechanism in Turkey. Ownership and commitment of the Government, industries, and other stakeholders are substantial. During the second phase, the PMR project will support Turkey in developing the legal, institutional, and technical framework or piloting an ETS. The project’s main beneficiary will continue to be the MoEU, while other ministries and government institutions will also benefit


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from the outcomes of the Phase II activities. The technical and institutional capacity that has been built in Turkey through the PMR Phase I project will sustain and is expected to be strengthened with the implementation of the Phase II project.

79. As discussed earlier, Turkey has yet to ratify the Paris Agreement, which can potentially compound the uncertainty of the Government in deciding on carbon pricing policies and market-based instruments. Notwithstanding the political decision on the Paris Agreement, the Government remains interested in harmonization of primary and secondary EU ETS legislation, which will help sustain the development outcome of the project. The likely impact of threats to achieved outcomes moving forward is mainly political, irrespective of ratification of the Paris Agreement. Unless there is strong political commitment in place, the risk to development outcome of implementing carbon market policies remains substantial.

V. LESSONS LEARNED AND RECOMMENDATIONS .

80. The PMR project was fully aligned with Turkey’s MRV legislation and efforts to harmonize with the EU ETS for EU accession. As such, there was strong buy-in from the Government, industries, and other relevant stakeholders. This critical factor has made Turkey among the most advanced countries for PMR implementation and for the sustainability of the project outcome. The development impact of the project has extended beyond the MoEU to other ministries and sectors, such as motivating the MENR to draft regulations to establish a “Renewable Energy Certificate Trading Scheme” (RETS) in Turkey and the EXIST to develop market infrastructure for ETS and ETS design. Ensuring country ownership is, therefore, very important for PMR implementation. Since the level of country ownership and policy alignment varies from country to country, design of PMR projects needs to be realistic so that the country’s specific circumstances are taken into account. Turkey’s success may not be emulated in other countries that are not as advanced in MRV legislation or harmonization with the EU ETS. Notwithstanding, it is recommended that Turkey’s experience in implementing the PMR project be disseminated more widely among the PMR implementing countries and that more efforts be made by the PMR Secretariat to enhance peer-to-peer learning.

81. Stakeholder engagement is critical for confidence building, data collection, and design and implementation of PMR policy measures. From the inception to the implementation of the project, the MoEU engaged the relevant ministries, government agencies, the industry associations and enterprises at every step, requested feedback from them, and made efforts to address their concerns. Effective engagement of the stakeholders along with capacity building catering to their needs made it possible especially for the industries to keep an open mind to different policy measures, give their trust and confidence to the MoEU and the PIU, and collaborated willingly and enthusiastically in providing data, attending workshops and meeting, providing feedback, and training members of the industry associations. Throughout project implementation, the MoEU and the industries had become partners, and this partnership will be very beneficial for Phase II project implementation. A properly staffed PIU and a strong and effective Project Coordinator are essential for stakeholder engagement and for the success of the project.

82. For recipient executed PMR projects, it is very important to build the client’s capacity on planning, procurement, management of contracts and to provide handholding on preparing TORs. Implementation delays are often a combination of planning, procurement, contract management issues. Among those, familiarizing with the Bank’s procurement rules and procedures may take time and improvement is often gradual. Therefore, there is need from the Bank side to help the clients to make proper planning and prepare good TORs. A clear, detailed


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TOR is a crucial first step toward efficient hiring of consultants and implementation of respective contracts. Based on the Turkey PMR experience, it is recommended that the Bank/PMR Secretariat create a database of TORs from the completed and ongoing PMR projects and a roster of consultants and firms that can be made available on the PMR website. The TOR database and the consultant roster should be updated periodically taking into account feedback from the Bank task teams, experts, and stakeholders. The Bank team accordingly provided close hands-on and implementation support on procurement to the ministry as needed.

83. PMR project design should consider flexibility and phasing of activities. Policies and carbon markets have been evolving over time. Project design and project teams should be able to adapt to changing circumstances and keep the project design and activities relevant and open to new scope of activities and policy instruments, such as carbon taxes, hybrid of ETS and carbon taxes, and renewable energy trading schemes as in the case of Turkey. Proper phasing of project activities is important so that there is enough time to complete the planned activities while not delaying other activities.


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ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS

A. RESULTS INDICATORS A.1 PDO Indicators

Objective/Outcome: Monitoring and Verification Protocols to be Developed

Indicator Name Unit of Measure

Baseline Original Target Formally Revised

Target

Actual Achieved at Completion

Piloting of the MRV system in the electricity sector

Yes/No N Y Y Y

01-Jan-2014 31-Dec-2015 30-Jun-2017 28-Dec-2018

Comments (achievements against targets):

Objective/Outcome: Background Analytical Reports Feeding into the final Policy Options Report



Target


Submission of a Carbon Markets Policy Options Document to the Coordination Board on Climate Change (CBCC)

Yes/No N Y Y Y

01-Jan-2014 31-Dec-2015 30-Jun-2017 28-Dec-2018


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A.2 Intermediate Results Indicators

Component: Monitoring and Verification Protocols related trainings are provided to the sectors



Target


Monitoring and Verification Protocols to be Developed

Yes/No N Y Y Y

01-Jan-2014 31-Dec-2015 30-Jun-2017 28-Dec-2018


Unlinked Indicators



Target


Background Analytical Reports Feeding into the final Policy Options Report

Number 0.00 4.00 4.00 4.00

01-Jan-2014 31-Dec-2015 30-Jun-2017 28-Dec-2018



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A. ORGANIZATION OF THE ASSESSMENT OF THE PDO

Objective/Outcome 1

Outcome Indicators 1. Piloting of the MRV system in the electricity sector

Intermediate Results Indicators 1. Monitoring and Verification Protocols to be developed

Key Outputs by Component (linked to the achievement of the Objective/Outcome 1)

1. MRV system in the electricity sector and other sectors (cement, refinery) piloted

2. Capacity building and training activities completed 3. Harmonization process with the EU ETS Directive, the workability

of the MRV Regulation and the online registry was first tested

Objective/Outcome 2

Outcome Indicators 1. Submission of a carbon markets policy options document to the CCAMCB

Intermediate Results Indicators 1. Background Analytical Reports Feeding into the final Policy Options Report

Key Outputs by Component (linked to the achievement of the Objective/Outcome 2)

1. The Synthesis Report, entitled Carbon Pricing Policy Recommendations for Turkey, was prepared and presented to the CCAMCB 2. Capacity building and stakeholder engagement activities were undertaken


Page 27 of 42

. .

ANNEX 2. PROJECT COST BY COMPONENT

Components Amount at Approval

(US$M) Actual at Project

Closing (US$M) Percentage of Approval

(US$M)

Implementation of MRV Pilot in Electricity Sector

0 .70 0

Analytical Work to Inform Decision Making on the Use of Market Based Instrument(s)

0 1.30 0

Stakeholder Engagement and Public Awareness Activities

0 .50 0

Coordination and Expert Support for the Implementation of MRV and Market Based Intrument(s)

0 .85 0

Total 0.00 3.35 0.00


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ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS

I. Project Success

Phase I Project:

The Government of Turkey has been awarded a grant of US$3.000.000,00 from the World Bank Partnership for

Market Readiness (PMR) trust fund to finance the Partnership for Market Readiness Project (PMR Project) throughout

the period of 2013-2018. The Ministry of Environment and Urbanization (MoEU) has been the lead implementing

agency and the Project Implementation Unit (PIU) has undertaken the procurement and financial management tasks

of the Project. The Project Development Objective (PDO) has been to assist Turkey implement a greenhouse gas

Monitoring, Reporting, and Verification (MRV) pilot in the electricity, cement and refinery sector, based on Turkey’s

MRV regulation, and to provide analytical information for the establishment of a carbon market in Turkey.

In terms of Project’s relevancy to Turkey’s development goals, the activities and the objectives of Turkey’s PMR

Project accord with the climate change related objectives identified within several policy and strategy documents,

including the Ninth and Tenth Five-Year Economic Development Plans (for 2007-2013 and 2014-2018, respectively),

the National Climate Change Strategy Document (NCCS) (2010-2020), and the National Climate Change Action Plan

(NCCAP) (2011-2023). The Project has directly contributed to meeting the two milestones listed in the NCCAP,

namely the “implementation of the Climate Change Action Plan with the help of technical assistance” and “adoption

of market-based mechanism for greenhouse gas (GHG) emissions.” They also fit well with some of the key legislation

on energy efficiency and renewable energy, including the Renewable Energy Law of 2005, the Energy Efficiency Law

of 2007, and the updated Electricity Market and Supply Strategy, approved in 2009, all incorporating the objective of

climate change mitigation.

The PMR Project has been instrumental in piloting and enhancing the implementation of the MRV regulation, adopted

in May 2014 as a key foundation to any effort towards the development of carbon pricing instruments. In addition to

that, it has been included in the Country Partnership Strategy (CPS) between the World Bank and Turkey and

supported the CPS strategic objective of “deepened sustainable development” and the outcome of “improved supply

of reliable and efficient energy, increased use of renewable energy sources and climate actions under implementation”.

It should also be noted that the PMR Project complements and has important synergies with other Bank operations in

Turkey. The first three installments of the Environmental Sustainability and Energy Sector (ESES) Development

Policy Loan (DPL) series had a focus on the energy sector and GHG emissions, consistent with the energy, climate

and environmental goals of the EU, and effectively contributed to Turkey's EU accession process. Approval of the

Climate Change Strategy and Action Plan, upon which the PMR activities are built, was also a part of the DPL series.

Furthermore, the Project has been synergetic with the energy sector EU/IPA Technical Assistance Project’s review of

alignment of Turkey's legal and institutional framework for electricity, natural gas, energy efficiency, and renewable

energy with the EU's energy acquis. Finally, some of the companies and installations within the scope of the PMR

activities has been sub-borrowers under the Turkey Private Sector Renewable Energy and Energy Efficiency Project

(P112578) (closure date: June 2017) credit line as well as under the SME Energy Efficiency Project (P122178) (closure

date: September 2019) credit line.

Regarding efficiency, of the US$3.000.000,00 disbursed for the Phase I of the Project, US$2.820.721,76 was spent.15

The project completion deadline was extended twice with the objective of completing all project activities

successfully. These extensions only concerned the project timeline and had no budgetary implications. It should be

noted that the initial closure date of Phase I was June 30, 2017. However, due to delays in receiving stakeholder

opinion and feedback of the survey questions from sectors; an increased number of stakeholder meetings and large

volume of required data; Bonn Interim Meeting of United Nations Framework Convention on Climate Change

colliding with the other activities of the Project; and to ensure the effective designing and printing of informative

15 US$2.878.327,94 was withdrawn throughout Phase I of the Project. Of that amount, US$2.820.721,76 was used and the unused excess amount of US$57.606.18 was refunded to the Bank on 22.02.2019.


Page 29 of 42

documents, it was extended until June 20, 2018.

For reasons which could be classified around Intended Nationally Determined Contribution (INDC) and COP-21

preparations under a significant level of uncertainty and their reflections at the national level after the adoption of the

Paris Agreement, the closure of Phase I was extended for a second time, till December 31, 2018. All components

planned under Phase I were completed by this date.

In order to ensure the timely delivery of Project activities, the MoEU staff was supported by PIU, including a Project

Technical Coordinator, Financial Management and Disbursement Specialist, Procurement Specialist and a Project

Assistant. The PIU composition has allowed for an efficient coordination and cross-fertilization between project. In

addition to that, a senior communication expert was hired to organize high-level meetings between April and June

2018 to ensure the highest level of visibility for the outcomes of the components under Phase I.

Regarding effectiveness, PMR deliverables and analysis on the suitability of ETS, carbon tax and other MBIs, and

the modelling activities have gathered high attention from the key stakeholders, especially from the energy sector.

Stakeholder engagement has been one of the key objectives of the Phase I. Particularly, capacity building workshops,

briefing meetings, bulletins and reports have raised awareness, catalyzed data collection, understanding, and

discussions about carbon pricing within the public and private sector. All activities were carried out in close

coordination and cooperation with the relevant representatives from public and private sectors through workshops,

meetings and one-on-one meetings. Likewise, reports were prepared in accordance with stakeholder feedbacks and

recommendations.

In particular, activities implemented under “Component 3” were very fruitful as the Project has drawn much attention

and interest from internal and external stakeholders on the modeling work and the Synthesis Report which presents

the results of technical works that has been carried out in Phase 1. On the other hand, the PMR Turkey website

(www.pmrturkey.org), live since June 2016 has proved to be a very effective tool through which the MoEU has

uploaded all World Bank and PMR knowledge products related to carbon pricing and all PMR Turkey documents,

reports, presentations, and photos of the meetings to the website. Furthermore, MoEU translated key WB and PMR

reports on carbon pricing into Turkish and uploaded them to the website. The website is also available in English and

the statistics show that the project’s deliverables attract high interest outside of the key stakeholder group as well.

The sustainability of the project is anchored in Turkey’s overall development agenda, its Climate Change Strategy

and Action Plan, the EU environment acquis, and the continued implementation of the MRV system. Given these solid

anchors, it is likely that the project results can be sustained beyond the lifetime of the Project. The MRV system is

expected to continue to run indefinitely after the PMR Project is completed and be a basis of any climate change

mitigation policy Turkey will adopt and implement in the future.

The Project has also helped inform the climate change policy decisions, and thus make a sustained contribution to the

climate agenda. In particular, workshops and the final reports have provided strong initial basis and readiness to work

towards alternative carbon pricing policy scenarios for the MRV sectors in a more concrete and deeper way. It should

be noted that since 2012, the Ministry of Energy and Natural Resources (MENR) stated in its annual budget that it

would initiate the preparatory work regarding ETS within the electricity sector, based on international experience and

practice, and the PMR Turkey, through the ETS related activities, has significantly supported the MENR with such

preparatory work and capacity building. The ETS workshop and the final reports have provided strong initial basis

and readiness to work towards alternative carbon pricing policy scenarios for the MRV sectors in a more concrete and

deeper way.

Component 1: Implementation of an MRV pilot in the electricity, cement and refinery sector

Relevance of the Project Objectives to Turkey’s Energy Sector Needs and Strategies

Sustainable development is an important policy priority for the Turkish government as expressed within the Ninth and

the Tenth Five-Year Development Plans; it is also aligned with Turkey’s EU accession strategy. Achieving sustainable

development through green growth has been emphasized as a policy priority in the two recent Five-Year Development

http://www.pmrturkey.org/


Page 30 of 42

Plans. To that end, Turkey’s Climate Change Action Plan includes a range of actions necessary for establishing a

carbon market in Turkey. They include, inter alia, monitoring and reporting of GHG emissions in all key sectors,

identifying GHG reduction potentials and cost curves, and making legal and institutional arrangements needed to

establish a carbon market. In May 2014, Turkey adopted legislation to design and implement a robust, installation

level greenhouse gas emission MRV program, and has engaged in a number of projects in order to fully implement its

MRV system. As part of that effort, this component has included piloting MRV procedures and practices in the

electricity, cement and refinery sectors, seeking broader engagement with other relevant stakeholders (e.g.

accreditation bodies, verifiers etc.). It has specifically targeted the preparation of Monitoring Plans, Emissions

Reports, and Verification Reports in the three-piloted sectors in order to identify data discrepancies and other readiness

issues in the whole MRV cycle and has been complementary to Turkey’s planned activities for fully implementing its

MRV system with funds from the Turkish national budget as well as from other donors.

Efficiency

Initial amount disbursed: US$700.000,00

Actual amount spent:US$691.864,34

All MRV Piloting components under the PMR Turkey were completed by July 2016. They consisted of 5 contracts in

total: 3 components aimed at preparing Monitoring Plans and three months of Emission Reports of 24 installations

(18 electricity, 5 cement, 1 refinery) and 2 components aimed at the verification of the submitted Emission Reports.

The level of local experts’ understanding of the Regulation and hands-on experience has been important not only for

the smooth implementation of project operations but also to build trust between the stakeholders and the piloted

installations. At the beginning of Phase I, the MRV capacity of some the piloted installations was limited, causing

delay in data collection. This issue was addressed through the capacity building workshops which proved to be very

useful, especially at the early stage of the pilots.

In order to increase the level of understanding on MRV and carbon pricing, the MoEU decided to provide the general

public and the stakeholders with more detailed information, including case studies and applicable implementation

examples from other countries. As part of this effort, the MoEU translated the relevant reports prepared by the World

Bank, such as “State of the Carbon Pricing 2014,” and disseminated them to related audience.

Efficacy

The MoEU implemented the whole MRV scheme for the first time under the PMR Turkey Project. As part of the pilot

scheme, the MRV regulation and its guidelines were fully implemented at 18 electricity, 5 cement and 1 refinery

installations with the support of international and national consultants. The pilot program provided a valuable chance

to road-test the regulation and the online register to identify the aspects that needed revision and improvement. Within

the framework of the pilots, site visits to 22 installations were carried out to develop monitoring plans and verify their

emission reports. These visits enhanced the MoEU staff’s understanding not only on how the regulation can be

implemented on site, but also on the questions, bottlenecks and issues that arise in practice.

The MRV Pilots, including but not limited to trainings designed for the MoEU and the Turkish Accreditation Body,

and the lessons-learned conferences, not only improved the existing capacity on verification and accreditation, but

they were also crucial for the building of good relations between the MoEU, verifiers and the installations. Particularly

for the operators, the MRV regulation together with the Communiques on how to make the emission calculations and

prepare the reports was perceived quite challenging to understand and implement initially. Yet, this issue was

addressed in part through workshops carried out for the relevant sectors (such as ceramics, glass, etc.) focusing on

sharing experiences, lessons-learned and learning by doing before the official enforcement of the regulation.

Considering that the Turkish electricity sector is very fragmented in terms of fuel, technology, capacity, age and

ownership (state-owned vs. privatized), and there have been significant data and calibration gaps depending on the

equipment used at the installations, the pilots were especially beneficial for the electricity sector. During the selection


Page 31 of 42

of installations special attention was paid to reflect a good representation of the sector as much as possible. This

approach ensured that non-pilot installations could benefit from the outcome of the study to the greatest extent

possible. The implementation of the MRV regulation reached an important step in April 2019, with about 800

installations submitted their verified emission reports for the years 2015, 2016, 2017 and 2018, collectively

representing about 50% of national emissions.

Component 2: Analytical Work to Inform Decision Making on the Use of Market Based Instrument(s) (MBI)

Relevance of the Project Objectives to Turkey’s Energy Sector Needs and Strategies

Under its INDC, Turkey has announced its intention to reduce its GHG emissions by up to 21% relative to a ‘business

as usual’ scenario by 2030. Turkey has been investigating the feasibility and potential outcomes of a market-based

instrument16 as a means to help meet this target, and more broadly to support the decarbonisation of the Turkish

economy. As of today, no political decision has been taken on the introduction of a market-based instrument (although

as part of EU accession discussions, Turkey is planning to consider harmonization of primary and secondary EU ETS

legislations). However, Turkey has been undertaking analytical work, particularly through the PMR that is intended

to inform the suitability of different market-based instrument options. In that regard, this component conducted

analytical studies to inform decision making on the use of MBIs, including inter alia, (i) a study on consideration of

ETS for the MRV sectors; ii) recommendations for selection of MBIs and modeling for sectors covered and uncovered

by the MRV regulation; (iii) GHG Market Modeling Outcomes for selected sectors covered and uncovered by the

MRV regulation; and (iv) a study for assessment of carbon leakage risk for Turkey. In addition, “Synthesis Report:

Implementation of Carbon Pricing Policies in Turkey” was prepared for consideration by policy makers, and submitted

to the Coordination Board on Climate Change and

Air Management (CBCCAM). The outputs of this component included the studies below:

- Analytical Report 1: Roadmap for the Consideration of Establishment and Operation of a Greenhouse Gas

Emissions Trading System in Turkey17 (completed in December 2016): Composed of 5 major parts, including

(i) design elements of an ETS and global examples; (ii) policy interaction analysis with existing policies and

strategies; (iii) legal and institutional gap analysis to implement ETS; (iv) ETS implementation roadmap

addressed at the public sector; and (v) ETS readiness guide for private sector.

- Analytical Report 2: Assessment of Market Based Emission Reduction Policy Options for Turkey18

(completed in May 2017): (i) Assessed how each MBI functions with an analysis on their effectiveness

including international experience and examples for each sector; (ii) assessed how revenue recycling can be

established and why it is important; (iii) carried out policy interaction analysis with the current policies and

potential MBIs; and (iv) provided a recommendation on suitable MBIs for Turkey.

- Analytical Report 3: Modelling Fiscal, Economic and Sectoral Impacts of Carbon Pricing in Turkey19

(completed in June 2018): Involved combining three core models, namely ViEW, TIMES and IMM, with an

off-model analytical techniques, to provide a holistic view of the likely impact of a market-based instrument

on the Turkish economy.

16 For the purpose of this report, the term ‘market-based instrument’ refers to both policies which set a direct price on carbon emissions (‘carbon pricing’ policies) such as an emissions trading scheme or a carbon tax, as well as policies which drive emissions reductions through other market-based mechanisms such as a renewable portfolio standard or renewable subsidies. 17 Named as “Study on consideration of ETS for the MRV sectors with a detailed analysis into piloting ETS within the electricity sector” in the MRP. 18 Named as “Recommendations for selection of MBIs and modeling for sectors covered and uncovered by the MRV regulation” in the MRP. 19 Named as “GHG Market Modeling Outcomes for selected sectors covered and uncovered by the MRV regulation” in the MRP.


Page 32 of 42

- Analytical Report 4: Development of MACCs for Power Sector of Turkey was completed in April 2018. The

assignment was carried out under PMR’s Policy Analysis Work Program and executed by the World Bank.

PMR by the request of Turkey. Turkey was granted USD 300,000 for this assignment additional to the budget.

This assignment was focused on development of MACCs for Turkey. Using the developed MAC curves,

different mitigation options were assessed and compared. Recommendations were made on the design of a

comprehensive mitigation strategy including timing of various actions. The model(s) and supporting tools

used and/or developed with data collected to populate them were handed over to the MoEU for future use.

- Analytical Report 5: Assessment of Carbon Leakage Risk for Turkey under Carbon Pricing Policies

(completed in June 2018): Included an initial sector-level leakage risk assessment based on three international

methodologies – the EU Emissions Trading Scheme (ETS) Phases III and IV, and California – and other

quantitative insights.

- Synthesis Report: Implementation of Carbon Pricing Policies in Turkey (completed in June 2018): Involved

three broad forms of MBI: an ETS, where an overall cap is placed on the emissions of covered entities but

with individual companies allowed to trade allowances that give the right to emit up to the cap; a carbon tax,

where an additional tax is levied per tonne of CO2 emitted; and incentives to support additional renewable

power generation.

Efficiency

Initial amount disbursed: US$1.300.000,00

Actual amount spent: US$1.223.648,21

All analytical studies were completed by June 2018. This component consisted of five contracts and aimed at raising

awareness on carbon pricing policies within the public and private sector and exploring the suitability of the different

carbon pricing options for Turkey. In addition to that with the successfully completion of the MRV component, which

is seen as a key foundation of any carbon pricing instrument, natural next step for the project is to build the capacity

on the MBIs.

The international experience and the leadership of the international experts were essential not only for the smooth

implementation of project operations but also to build trust between the stakeholders. Feedbacks of the stakeholders

and as well as data gathered from them were important pillar of the accuracy of analysis. In order to facilitate the data

gathering and comment receiving from the stakeholders, capacity building workshops, trainings on MBIs and 1-1

meetings were organized throughout the project. Furthermore, draft analytical reports were sent to stakeholders to get

their comments on the outcomes. It can be concluded that, outcomes of the studies were not only based on desk review

of the experts but also based on the outcomes of the stakeholder engagement.

In order to increase the level of understanding on carbon pricing, the MoEU decided to provide the general public and

the stakeholders with more detailed information, including case studies and applicable implementation examples from

other countries. As part of this effort, the MoEU translated the relevant reports prepared by the World Bank

disseminated them to related audience.

Efficacy

The studies carried out within the scope of Analytical Report 1 included extensive capacity building and feedback

workshops on ETS in 2016 (14-days in total). Several group works were formed during those workshops which were

very critical to extract both the required information and views from different stakeholders. They also enabled

participants to gain deep knowledge about the topics which resulted in high ownership of the project. The final

deliverables of the work included an ETS Roadmap for Turkey, providing the government with step-by step guidance

on designing and establishing an ETS; and an ETS Guidance for Plant Operators, guide for the private sector towards

increasing their preparedness in case ETS is implemented in Turkey.


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Likewise, as already mentioned above, the modeling work and the Synthesis Report have drawn much attention from

stakeholders. In October 2017 during a one-day conference the General Directorate for Renewable and Energy,

(Ministry of Energy and Natural Resources) carried out with Energy Exchange Istanbul EXIST, PMR Turkey was

referred as the main driver of capacity building and initiative for the development of the necessary technical work and

drafting of the regulation to establish a “Renewable Energy Certificate Trading Scheme” (RETS) in Turkey. Equally

significant is the fact that the EXIST announced in their Corporate Strategy for 2017-2020 that it would start

preparations to develop market infrastructure for ETS in 2018 and also work on an ETS design at the beginning of

2019. EXIST representatives participated in the PMR workshops regularly and actively and provided very detailed

comments on the ETS Report. They also visited the MoEU in 2018 to announce that they were establishing a working

group on ETS and invited the MoEU to join it. It should also be noted that as PMR has already carried out the modeling

work, several exchanges took place with different project teams within MoEU on how to coordinate and leverage the

existing capacity, tools, and results. PMR Turkey has been also regularly consulted on how to align different economic

models in the energy and climate change areas.

Component 3: Stakeholder Training, Consultation/Engagement and Public Awareness Activities

This component included (i) conferences, workshops, and trainings to support the activities under Components 1 and

2; (ii) consultation meetings with stakeholders; and (iii) public awareness activities (media, high-level public/private

meetings, etc.).

Efficiency

Initial amount disbursed: US$ 500.000,00

Actual amount spent: US$342.930,69

The stakeholder engagement activities progressed in line with the development of the analytical work and the PIU

worked towards organizing the roundtables which targeted more specific capacity building needs of stakeholders. It

should be noted that since the Climate Change Department is one of the departments within the MoEU which has a

heavy workload due to having both a national and an international climate change agenda and several projects, a

number of meetings overlapped and the PIU had to organize some back-to-back meetings due to time limitations.

Efficacy

As part of this component, several group works were organized, and extensive capacity building and feedback

workshops on ETS were provided. These stakeholder engagements were very critical not only in terms of extracting

the required information and views from representatives of relevant sectors, but also in terms of enabling participants

to gain deep knowledge about the topics. It should be highlighted that the activities under this component resulted in

stakeholders demonstrating a high ownership of the project.

Another point worth mentioning is that as the scope of the Project expanded, the meetings and the workshops expanded

as well to include a diverse group of stakeholders which further enriched the outcomes of the analytical studies and

pilots. At the same time, an important lesson-learned was that it was crucial to bring together the same people as much

as possible from different institutions, firms, and backgrounds, having the capacity to provide professional insights,

engage in fruitful discussions and convey the key concerns of the sector they represent on ETS. On that note, the

stakeholders have expressed their satisfaction and appreciation with being included in these activities and having the

opportunity to learn on such technical topics with the support of international experts.

The stakeholder workshops organized in 2016 should also be highlighted as they have allowed for a significant level

of capacity building and data/feedback gathering from local stakeholders. More specifically, the activities carried out

within the scope of the development of a “Roadmap for the Consideration of Establishment and Operation of a

Greenhouse Gas Emissions Trading System in Turkey” were a great success as the stakeholders stated that they

significantly benefitted from the capacity building and interactive workshops. The level of participation, attention,

and contribution was particularly high which in turn provided both the MoEU and the Project with a broad and active


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stakeholder base, also to be reached out to in other relevant projects.

Both the “Roadmap for the Consideration of Establishment and Operation of a Greenhouse Gas Emissions Trading

System in Turkey” and “Assessment of Market Based Emission Reduction Policy Options for Turkey” have gathered

high attention from the energy sector community. The capacity building workshops and the resulting report catalyzed

discussions among representatives from public and private sectors about the budget, strategy documents and

regulatory preparations of Ministries on carbon pricing. As a result, a multi-stakeholder and interactive environment

for public and private sector institutions to discuss the applicability of the MBIs, including sharing of roles and

responsibilities, was developed for the first time, which clearly had an impact on accelerating the activities planned

under Components 1 and 2. In addition to that, PMR Turkey was invited to deliver presentations from a variety of

segments about its work and outputs, which have generated high attention from the high-level managers of Ministries,

academy and media.

It should be also noted that there has been a good synergy with the GIZ project which mainly aims to build the capacity

plant operators on MRV regulations. The PIU has benefited from the industry’s appreciation of the trainings, the MRV

guidelines and the collaborative environment built during the GIZ project.

The main public awareness activities carried out throughout Phase I were:

High Level Events: Climate Change Summit was organized with the aim of sharing PMR outcomes and creating

awareness on 18 April 2018 in coordination with World Bank, PMR, and Zirve, Capital and Economist magazines.

Main participants of the meeting were high level public officials, CEOs and media representatives. In total 200

participants were attended to the meeting. Opening speech of the summit was given by the Minister Mehmet

ÖZHASEKI. Two discussion panels were organized on carbon pricing and climate risks with business perspective.

The main focus of the first panel was pioneer of the carbon management and green climate finance. The panelists were

CEOs of the leading private banks in Turkey. The main focus of the second panel was turning climate risks into

opportunities for Turkish business and the panelists were CEOs of the leading holdings in Turkey. Finally, the closure

speech was given by the Deputy Minister and Chief Negotiator of Turkey Prof. Dr. Mehmet Emin BIRPINAR who

emphasized on the carbon pricing instruments in his speech.

The results of the analytical studies, especially the synthesis report, were presented to the high-level public-sector

representatives who are the members of the Coordination Board on Climate Change and Air Management (CBCCAM)

such as MENR, MoTI, Ministry of Economy, Ministry of Treasury and Finance and etc.20 .on 27 November 2018 with

the leadership of the Deputy Minister and Chief Negotiator Prof. Dr. Mehmet Emin BIRPINAR. In total 33

participants from 11 different institutions were attended to the meeting.

Closing Conference of Phase I and Opening of Phase II was held on 19 December 2019. In total 257 participants were

attended to the meeting from public institutions, private sectors, universities and NGOs. Opening speeches were given

by the Deputy Minister and Chief Negotiator Prof. Dr. Mehmet Emin BIRPINAR, The World Bank's Turkey Director

of Infrastructure Tamara Sulukhia and Representative of Union of Chambers and Commodity Exchanges of Turkey

(TOBB).Güven İSLAMOĞLU, producer of the Green Nature Tv show at CNN Türk, was invited as a key note

speaker. He talked about impacts of the climate change on the society and need for behavioral change for the world.

Additionally, a panel discussion was organized on the climate change and carbon pricing. Moderator of the panel is

Ramazan ASLAN and the panelists were; Özgür ÖZTÜRK Akçansa Sustainability Director, Derya ÖZET YALGI

Sustainability Director of Garanti Bank, Derya ERBAY Legislative Alignment Director of EPİAŞ (Turkish Energy

Exchange), John WARD Director of Vivid Economics and Mirhan Köroğlu GÖĞÜŞ CDP Turkey Programs Manager.

Focus of the panel was “Carbon Pricing and Combating against the Climate Change” and panelists talked about the

role of carbon pricing on mitigation. Also, the event marked the closure of Phase I and introduced the main activities

of Phase II to relevant stakeholders During the event interviews with the participants were filmed to be able gather

their feedbacks. A short film was created with the footage from those interviews to screen it other public awareness

activities.

20 Please see the link for the whole list: https://iklim.csb.gov.tr/teskilat-yapisi-i-4368

https://iklim.csb.gov.tr/teskilat-yapisi-i-4368


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Online Bulletins: Since September 2016, 6 online bulletins were published as part of PMR Turkey Project. The

bulletins were developed by the Consultants to share key findings of the analytical work and international

developments related to the topic. Each bulletin was sent to about 500 stakeholders.

PMR Working Group Meetings: The MoEU established the “PMR Working Group (WG)” under the “Climate Change

and Air Management Coordination Board – Emission Reduction WG” composed of key Ministries for carbon pricing.

Those include the Ministry of Energy and Natural Resources, Ministry of Treasury and Finance, Ministry of Industry

and Technology, Ministry of Trade, Istanbul Stock Exchange Strategy and Budget Authority (Previously Ministry of

Development) and Capital Markets Board of Turkey. The WG has met on ad hoc basis to steer the project and provided

strategic feedback whenever necessary.

PMR Turkey Side Event: PMR Turkey organized a successful side-event on carbon pricing at COP22 in Marrakech

called “Carbon Pricing is Going Global”. The side event hosted invaluable speakers from PMR Implementing

Countries (China, Chile, Mexico and Turkey) and the World Bank who shed light on the latest developments on carbon

pricing globally and in their home countries. Brochures on PMR Turkey Project and MBIs were distributed during the

event. A poster showing the highlights of PMR Turkey was also printed and displayed at the Turkish Pavilion.

Brochures: Brochures were prepared and distributed in several events (including COP-22) in order to highlight the

PMR Turkey’s activities, results, and to raise awareness on specific topics covered by the analytical reports.

Communication strategy: While coming to end of the Phase 1, communication activities became more important. In

order to plan the communication activities, a communication expert was hired by the project. Communication expert

first developed a communication strategy for the Phase 1. This strategy mainly became the communication roadmap

for the end of the Phase 1. According to this plan, interviews, short movies, animations on carbon pricing were realized

and used for awareness raising activities. Secondly, a “Communication Workshop and a Media Training” was carried

out on 28 May 2018 to increase the capacity of the official in MoEU. Therefore, high level officials could actively

more involve PMR stakeholder engagement activities.

Media Appearance: Media appearance was one of the final outcomes of the communication strategy. The Climate

Change Summit were drawn interest from the media organizations. The event was published in the June 2018 edition

of Capital Magazine which was one of the top seller business magazines in Turkey. Discussion topics and the main

outcomes of the Summit were discussed in the magazine and interview with the Deputy Minister and Chief Negotiator

Prof. Dr. Mehmet Emin BIRPINAR on Turkey’s climate change strategy was published. Additionally, Summit was

published by the several websites.

A number of Information Exchange and Steering Meetings and workshops were held over the course of Phase I. These

are summarized below:

- March 2014: MRV Training session for trainers was held (Module 1)

- May 2014: MRV Training session for trainers was held (Module 2)

- 24 October 2014: The kick-off meeting of the PMR Project jointly took place with a workshop for

stakeholders on 24 October 2014 in İstanbul with the participation of about 100 representatives from the

public and private sectors. The meeting reached its objective in terms of conveying the objectives of the PMR

project and collecting initial feedback on its activities from various stakeholders.

- April and June 2015: The PIU met with the representatives of key ministries and the private sector on 29

April and 16 June 2015 to present the planned PMR activities and collect feedback. While the scope of the

ETS analytical work was limited to the electricity sector initially as envisaged in the MRP, it was expanded

accordingly to cover all MRV sectors following these meetings. Further feedback and buy-in was also

secured for the rest of the analytical activities.

- 18-19 January 2016: Capacity building seminars on ETS were organized separately for the public and private

sectors. These aimed at familiarizing the stakeholders with the key concept of ETS as a preparation for the

workshops held in February and March with the consultants. A total of 110 people participated.


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- 18-19 January 2016: Capacity building meeting on ETS was conducted (Analytical Report 1).

- 9-12 February 2016: Workshops on the design elements of an ETS were conducted (Analytical Report 1).

- 19 February 2016: Closure Conference of the MRV Pilots was organized to disseminate the results and

lessons-learned from the project with the wider stakeholders, especially, the installation managers and sectors

which did not participate in the MRV pilots. This one-day event brought together about 120 participants from

various ministries and industries, including companies from electricity, cement, paper, glass, and ceramic

manufacturing sectors. Lessons-learned from MRV pilots were summarized in brochures and were

distributed at several PMR Turkey workshops as well as at the 14th PMR Partnership Assembly (Peru) and at

COP-22 (Marrakech).

- 15-18 March 2016: Workshops on possible ETS scenarios for Turkey were conducted (Analytical Report 1).

- 18-19 April 2016: Presentation was delivered on PMR Turkey

- 12 May 2016: Capacity building meeting on MBIs was conducted (Analytical Report 2)

- 2 June 2016: Workshop was conducted on the Assessment of the Suitability of MBIs for Turkey

- June and July 2016: One-to-one meetings were conducted with the line ministries to identify legal and

institutional needs and gaps required for an ETS in Turkey (Analytical Report 1)

- 2 June 2016: Steering Workshop with stakeholders was conducted on how each MBI functions and how they

are implemented globally (Analytical Report 2)

- 20-23 September 2016: Workshops were conducted on the legal and institutional gap analysis, ETS

implementation roadmap for the government and ETS readiness guideline for private sector (Analytical

Report 1)

- 5 October 2016: Feedback workshops to gather feedback on Chapters 2 and 3 of the report were conducted

(Analytical Report 2)

- 12-13 December 2016: Project closure and ETS capacity building conference was carried out with the

participation of about 250 people, including several international speakers from the EU Commission, ICAP

and Vivid Economics delivering presentations on ETS experiences in the EU, global implementation of ETS

and carbon leakage (Analytical Report 1)

- 13 January 2017: Feedback workshop were conducted to collect insight from the key stakeholders on the

Assessment of the Suitability of MBIs for Turkey

- March 2017: “Analytical Report 3- Assessing the Economic, Fiscal and Social Impacts of Carbon Pricing

through Modelling” was initiated in March 2017 and involved a number of stakeholder meetings. The main

objectives of the meetings were to facilitate data collection, validate input data and gather feedback on interim

and final model results.

- 8-9 March 2017: Kick-off and steering meeting for the “Modelling Fiscal, Economic and Sectoral Impacts

of Carbon Pricing in Turkey” was conducted (Analytical Report 3)

- 13-16 March 2017: Feedback workshops were conducted to collect insight from the key stakeholders on the

recommended MBIs for Turkey (Analytical Report 2)

- 26 March 2017: Head of Climate Change Department delivered a presentation on carbon pricing and PMR

Turkey at the Istanbul Carbon Summit.

- 30 March 2017: PMR Turkey organized a private sector dialogue meeting on the Paris Agreement and carbon

pricing, hosted by the Deputy Under-secretary and Chief Negotiator on Climate Change of the MoEU.

- May 2017: A four-day workshop was organized during which public and private sector participants gathered

to discuss the final deliverables of the project activity such as policy interaction, revenue recycling

mechanisms and sector-based approaches within the scope of the “Analytical Report 2- Assessment of

Market Based Emission Reduction Policy Options for Turkey”. The assignment was completed with a closure

conference which took place in May 2017 and gathered about 100 participants.

- 23 May 2017: Closure Conference was conducted within the scope of the Analytical Report 2.

- 25 April – 7 July 2017: One-to-one meetings with key public and private sector stakeholders were carried

out to communicate data needs for the modelling work (Analytical Report 3)

- 5 July 2017: 1st interim meeting was conducted to facilitate and validate the collected data by the stakeholders

(Analytical Report 3)

- 12-13 September 2017: Training session was held on TIMES for the MoEU experts (Analytical Report 3)

- 13-14 September 2017: Training session was held on MACC for the MoEU experts


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- 14-15 September 2017: 2nd interim meeting was held to validate the important data gaps and collect feedback

on interim results (Analytical Report 3)

- 11-14 November 2017: PMR COP23 Activities were held

- 4-11 December 2017: One-to-one conference calls and meetings were organized with stakeholders to

facilitate survey responses (Analytical Report 5)

- 11-12 December 2017: Training session was held on CGE models for the MoEU experts (Analytical Report

3)

- 13-14 December 2017: Training session was held on MACC models for the MoEU experts (Analytical Report

3)

- 14-15 December 2017: 3rd interim meeting to collect feedback on the interim results of the modelling work,

and one-to-one meetings were held with the public sector stakeholders on the expected outcomes of the

Synthesis Report (Analytical Report 3)

- December 2017-January 2018: “Analytical Report 5- Assessment of Carbon Leakage Risk for Turkey under

Carbon Pricing Policies” was initiated in November 2017. The analysis started with a sectoral survey sent

out to 9 sectors, namely paper, refinery, chemicals, cement, glass, ceramics, iron-steel, lime and electricity.

To facilitate information gathering, one-to-one meetings were held with each sector in December 2017 and

initial findings were discussed at the stakeholder feedback meeting in January 2018.

- 24-25 January 2018: Feedback meeting and one-to-one meetings were held with sectors (Analytical Report

5)

- 12-13 March 2018: Training session was held on CGE models for the MoEU experts (Analytical Report 3)

- 14 March 2018: Training session on TIMES model was held for the MoEU experts

- 15 March 2018: Closure meeting was organized to gather feedback on the model results in relation to the

Synthesis Report (Analytical Report 3)

- 18 April 2018: High Level Meeting with CEO Club members was organized to share PMR activities and

create awareness with CEOs and media representatives.

- 17 May 2018: Closure Conference on the Synthesis Report was held

- 28 May 2018: Communication Workshop and Media Training was provided for the MoEU staff

- 29-30 May 2018: Closure Conference on the Assessment of Carbon Leakage Risk for Turkey under Carbon

Pricing Policies

- 27 November 2018: Meeting with high level managers of relevant ministries was organized to share the

Project outcomes of Phase 1

- 19 December 2019: Closing Conference of Phase I and Opening of Phase II was held with the participation

of 257 participants. The event marked the closure of Phase I and introduced the main activities of Phase II to

relevant stakeholders. The conference included presentations delivered by High Level Officials of MoEU

and the World Bank, as well as a panel session with relevant public and private sector representatives.

Component 4: Coordination and Expert Support for the Implementation of MRV and MBIs

Efficiency

Initial amount disbursed: US$500.000,00

Actual amount spent: US$562.278,52

The Project activities were supported by a Project Implementation Unit (PIU) including a Project Technical

Coordinator, Financial Management and Disbursement Specialist, Procurement Specialist and a Project Assistant. As

noted above, the PIU composition has allowed for an efficient coordination and cross-fertilization between project

activities especially on modeling and carbon leakage issues. In addition to that, a senior communication expert was

hired to organize high level meetings between April and June 2018. Activities included an event, a public sector high-

level meeting and a meeting with NGOs and academia. These events ensured the highest level of visibility for the

outcomes of the components under Phase I.

Decision on the level of detail vis-à-vis the expansion of the scope of the Project needed careful attention to ensure

that the work did not yield generic results. In this sense, the TORs have been the key to ensuring the level of detail


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expected from the work. The PIU has worked very closely with the PMR Secretariat and other experts from the PMR

expert pool to make sure that the TORs were robust in that regard.

On the other hand, the PIU encountered some serious difficulties to work with the consultants in charge of the

verification activities which resulted in some of them being delayed. Successful delivery of the verification activities

was however achieved due to efforts from the PIU to reach agreeable and practicable solutions. The core project

deliverables- i.e. the verification reports were eventually delivered.

Efficacy

The PIU has engaged with the key stakeholders from the early stages of the project and maintained the same level of

engagement for each specific activity. Stakeholder meetings not only helped the MoEU staff increase the level of

ownership and attention towards the project, but also provided very useful inputs for the PIU to formulate the activities

and the related TORs. Very positive feedbacks were received from different sectors and institutions on how the MoEU

has been inclusive and open for comments, which has helped raising both the credibility and profile of PMR Turkey

Project.

II. Administrative Performance and Lessons Learned and Future Recommendations for PIU and WB

Staff capacity for design, tendering and implementation

Consisting of a Project Technical Coordinator, Procurement Specialist, Financial Management Specialist and Project

Assistant, the size of the PIU was at the optimum level, providing for a successful Project implementation. Given that

the Project requires an effective distribution of work based on different fields of specialization, it is important that the

PIU composition remains unaltered, including the four positions mentioned.

Both the Ministry personnel and the PIU gathered important lessons learned from Phase I. The PIU was based at the

Ministry during Phase I which turned out to be crucial for the effectiveness of Project execution. The Project activities

that remain outside of the governmental procedures can be implemented rapidly; however, the bureaucratic procedures

often take time. By being physically present at the Ministry, the PIU was able to closely monitor internal administrative

procedures and intervene where necessary to minimize delays in implementation.

It should also be noted that the background of the Ministry focal point for the Project has played an important role in

the successful execution of the Project. Phase I has showed that it is essential that the Ministry focal point has

experience in project supervision and has a vision and understanding of project cycle management.

Designing the assignments

Throughout Phase I, the Ministry worked with sophisticated and knowledgeable consultants, mainly due to the well-

prepared ToRs. Experience shows that preparation of ToRs makes up a crucial aspect of the procurement stage not

only for ensuring effective communication between the Ministry and the consultants, but also in terms of determining

the scope of the work and expectations of both sides. In that regard, the technical support the World Bank provides

during writing of the ToR documents proves to be vital.

Another important lesson learned is that the ToRs should be written carefully in advance and in as much detail as

possible, since it is extremely difficult and time-consuming to amend RFP documents upon receipt of Technical and

Financial Proposals from the consultants. It also gets in the way of the manipulation of reference documents in

negotiations with the consultants, speeds up the process and ensures that the sides are able to understand each other

more clearly.

Execution of the assignments

One of the most important factors that played a role in the success of the Project was the fact that the negotiations with


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the consultants were administered well. In addition to that, starting the activities with kick-off meetings provided the

Ministry and the consulting firms with a platform to discuss and decide upon the best methodology. Furthermore,

through these meetings the stakeholders had a chance to meet the experts of consulting firms, be informed about the

project implementation and principles, and prepare their calendars for future activities from the start.

While it was important to be in regular contact with the consultants, the active involvement of the Ministry focal point

in project implementation was especially crucial as it ensured that both the stakeholders and the Ministry personnel

received regular information and feedback on the progress of the Project. On the other hand, the most important factor

consolidating the confidence of stakeholders in the Project, and thus accounting for the effectiveness of Phase 1, was

the workshops which were structured and designed well in advance. A significant lesson learned in that regard is the

fact that the Project activities should be designed as the ToRs are drafted. In addition to that, throughout Phase I

defining the specifications of the experts and the workshops on time played an important role in the participation of

key stakeholders in workshops which has become the face of the PMR Program.

Structure of workshops and inclusiveness

One of the key successes of the Program was the forming of the PMR Working Group which provided critical inputs

and feedback during the drafting of ToRs. The collaboration between the PMR Working Group and the Ministry

helped consolidate the ownership of the Project by the stakeholders and increased the credibility of the overall PMR

work in Turkey. From the start of the Project, the inclusive approach of the Ministry in terms of engaging as many

stakeholders as possible and integrating their views in the work provided for increased commitment and participation.

As the topics and cases were built upon one another, the continuity of stakeholder engagement and attendance proved

to be very critical for the effectiveness of the workshops.

Translation services and proofreading

Since the original outputs of the work was in English, the effective transfer of knowledge depended on translation

services ultimately. In that regard, it was vital to avoid loss of meaning when translating the reports from English to

Turkish. This highlighted the importance of allocating sufficient time and budget for the translation of documents and

proofreading which has formed an integral part of Project activities.

WB

Guidance and assistance to PIU staff for design, tendering and implementation

During Phase I, for the drafting of ToRs, the Ministry managed to learn about the experiences of other PMR countries

and received recommendations and information on related activities through personal efforts and contacts which has

costed time and energy. Hence, it is recommended that the World Bank creates a pool of ToRs that already

implemented in other countries, experts or consultants who would be accessible to provide technical feedback and

support when necessary to ensure smooth flow of information and experience sharing.

The Bank support proved to be very important during the implementation and negotiation stages. In particular, having

the backing of the Bank was critical during the implementation of the MACC. Experience shows that the Project

seems to have a greater weight for the consultants when the Bank takes side with the implementing agency throughout

the Project and supports it where necessary.


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Documents

IMPLEMENTATION COMPLETION AND RESULTS REPORT …documents.worldbank.org/curated/en/...Republic of Turkey FOR PMR TURKEY (P126101) June 28, 2019 ... ETS Emissions Trading System EU