L/C/TF Number(s) Closing Date (Original) Total Project Cost (USD) TF Oct ,000,000.00

Transcription

1 Public Disclosure Authorized 1. Project Data Report Number : ICRR Public Disclosure Authorized Public Disclosure Authorized Project ID P Country Sierra Leone Project Name Sierra Leone Energy Access Proj. - SLIDF Practice Area(Lead) Energy & Extractives L/C/TF Number(s) Closing Date (Original) Total Project Cost (USD) TF Oct ,000, Bank Approval Date 31-Jan-2013 Closing Date (Actual) 31-Jul-2017 IBRD/IDA (USD) Grants (USD) Original Commitment 16,000, ,000, Revised Commitment 15,665, ,665, Actual 15,665, ,665, Prepared by Reviewed by ICR Review Coordinator Group Ranga Rajan Victoria Alexeeva Christopher David Nelson IEGSD (Unit 4) Krishnamani Public Disclosure Authorized 2. Project Objectives and Components a. Objectives Original Objective The original Project Development Objective (PDO) as stated in the Sierra Leone Infrastructure Development Fund Grant Agreement (Schedule 1, page 5) and the Project Appraisal Document (PAD, page 14) was: (i) reduce losses in electricity supply in Freetown Capital Western Area: (ii) improve commercial performance of the National Power Authority: and (iii) increase access to electricity in selected rural areas. Revised Objective Page 1 of 13

2 PHEVALUNDERTAKENLBL The revised PDO as stated in the amendment to the Grant Agreement (October 30, 2015) and the Restructuring Paper (page 8) was: "To reduce losses in electricity supply in Freetown Capital Western Area and to improve commercial performance of the Electricity Distribution and Supply Authority". b. Were the project objectives/key associated outcome targets revised during implementation? Yes Did the Board approve the revised objectives/key associated outcome targets? Yes Date of Board Approval 28-Oct-2015 c. Will a split evaluation be undertaken? Yes d. Components There were three components (PAD, pages 15-16). One. Rehabilitation of Primary Distribution Network, Loss Reduction and Improvement of National Power Authority's (NPS)'s operational and commercial performance. Appraisal estimate US$12.20 million. Revised estimate at restructuring US$13.88 million. Actual cost US$13.29 million. This component included investment and technical assistance activities aimed at strengthening power distribution in the Freetown area. Activities included: (i) rehabilitation of the primary distribution network: (ii) installation of 20,000 pre-paid meters and vending systems for replacing the existing aging system: (iii) installation of statistical metering and data management systems: (iv) installation of a business information system to replace manual systems: (v) Technical assistance for strengthening the NPA's capacity in systems operations and commercial management: and (vi) providing limited resources for compensation for new encroachments and temporary disturbances to businesses and households. Two. Rural Electrification. Appraisal estimate US$1.46 million. Revised estimate at restructuring US$0.00 million. This component aimed at implementing a pilot program for installing Photovoltaic (PV) systems in selected buildings in 14 rural villages. Following the project restructuring (described in section 2e), this component was dropped, in the wake of the outbreak of the Ebola Virus Disease (EVD) in 2014 which made it difficult to access rural areas. No disbursements this component had been made thus far. Three. Project Implementation Management. Appraisal estimate US$1.22 million. Revised estimate at restructuring US$2.12 million. Actual cost US$2.38 million. This component aimed at strengthening the institutional and technical capacity for project management. e. Comments on Project Cost, Financing, Borrower Contribution, and Dates Project cost. Appraisal estimate (including baseline cost and costs of physical contingencies) US$16.00 Page 2 of 13

3 million. Actual cost US$15.67 million (there were no contingencies during implementation).. Project financing. The project was financed by the Sierra Leone Infrastructure Trust Fund (SLIDF), a multi-donor trust fund administered by the World Bank with the United Kingdom s Department of International Development (DFID) as anchor donor. Grant estimate US$16.00 million. Amount disbursed US$15.67 million. There was parallel financing for complementary energy sector activities from the Economic Community of West African States (ECOWAS), the Japan International Cooperation Agency (JCIA), the African Development Bank (AfDB), the Millennium Challenge Corporation and the Islamic Development Bank. Borrower Contribution. None was planned. There was no borrower contribution during implementation. Dates. Rural electrification activities were cancelled through a Level 1 restructuring on October 28, 2015, following the outbreak of the Ebola Virus Outbreak (EVO) which made it difficult to access rural areas. There were two Level 2 restructurings. The following changes were made through the first Level 2 restructuring on October 28, 2015: (i) The PDO and the results framework were revised following the cancellation of the component two activity: (ii) The financial resources of the cancelled activity was reallocated to finance additional component one and three activities: (iii) The energy access target indicator was tripled: and, (iv) The closing date was extended by eighteen months from October 31, 2015 to April 30, The second Level 2 restructuring on April 13, 2017, extended the project closing date by an additional three months for completing unfinished activities and reallocated resources among categories. The project closed on July 31, Split rating. The IEG assessment will be based on a split rating of achievements under the original and revised objectives, weighted by disbursement of 40% before restructuring (US$6.26 million disbursed in October 2015) and 60% after restructuring. 3. Relevance of Objectives Rationale Relevance of the original PDO: High. Prior to appraisal in 2013, only about 6% of the households in Sierra Leone had access to electricity services. Public electricity services were limited in selected urban center areas, and in rural areas, access was practically non-existent. In addition to the power supply shortages, electricity transmission and distribution capacity was constrained due to high losses. Among other factors, the challenges faced by the power sector pertained to the poor commercial and operational performance of the National Power Authority (NPA). The PDO was consistent with the Second Poverty Reduction Strategy Paper (PRSP II) for The PRSP identified improving electric supply as a strategic priority. The National Energy Policy and Strategic plan in 2010 outlined sector priorities and objectives and shortly thereafter, the Cabinet approved electricity tariffs. The plan highlighted the need for unbundling the energy sector and operating government-owned energy sectors assets with private sector participation. The 2013 letter of Government Policy in Utility Reforms in the Electricity sector reiterated the government's commitment to unbundling the sector and mandated the Ministry of Energy (MoE) to implement the Electricity Act (including resourcing of the Electricity Generation and Transmission Company (EGTC) and the Electricity Generation and Transmission Page 3 of 13

4 Company (EGTC). A broad reform process of the sector was initiated by the government since 2009 which included unbundling the sector, as stipulated by the National Electricity Law approved by Parliament in November This change envisaged separating the responsibility of operating and maintaining existing government-owned generation and transmission assets from the National Power Authority (NPA) into a New Company - the Electricity Generation and Transmission Company (EGTC), with private sector management. Expanding electricity supply continues to be a critical priority for the new PRSP for the period. The PDO was well-aligned with the two pillars of the Country Assistance Strategy (CAS) for the period: Human Development and Inclusive Growth. A Country Partnership Strategy (CPS) that is currently under preparation reiterates the need to focus on energy for developing the extractives sector. This project was complementary to a planned IDA operation (Sierra Leone Energy Sector Utility Reform Project (P120304) approved in fiscal year 2014 that aimed at expanding its activities and focused on improving the operational performance of te national electricity distribution utility. Relevance of the revised PDO: High. The revised objectives is a subset of the original PDO. The objective on increasing access to electricity in rural areas was dropped, as the rural electrification component was cancelled in the wake of the Ebola Virus outbreak in The changes in the objective on improving commercial performance was due to the sector reform: in January 2015, the National Power Authority (NPA) was unbundled and replaced by the (a) Electricity Distribution and Supply Authority (EDSA) and the (b) The Electricity Generation and Transmission Company (EGTC). Given these factors, the high relevance of the original objectives applies to the revised objectives as well. Rating High 4. Achievement of Objectives (Efficacy) PHEFFICACYTBL Objective 1 Objective To reduce losses in electricity supply in Freetown Capital Western Area. Rationale Outputs (ICR, pages vii -ix, pages 9-13 and pages 29-33). Five substations were rehabilitated, exceeding the target of four. The rehabilitated substations included the substations at the Freetown 161 kv Kingtom, the Wilberforce, the Blackhall Road and Wellington. One new substation - Ropti substation- was constructed... The 7.8 kilometers (Km) of power line from Blackhall Road substation to Wellington substation via Ropti operating at 11 kv was upgraded to 33kV and constructed on double circuit towers. This exceeded the target of 7.5 km. The transformer and switchgear at the Blackhall Road substation had not been installed at project closure and these were to be completed through an ongoing Bank project (P120304). 100 statistical meters - intended to help locate high loss areas in the network - were installed at project closure. This represented 50% of the target of 200. Page 4 of 13

5 The Electricity Network Investment Five-Year Plan was prepared. The plan included identification of the emergency investments to be carried out in the immediate term, prioritization of investments for improving network performance in the medium term and a long term plan for future grid development activities for the period. Outcomes. Electricity losses per year in the project area decreased from 38% in the baseline to 34.5% at closure. This was slightly short of the target of 33%. With the rehabilitation of the substations, capacity utilization increased from 76% in December 2016 to 90% in March Rating Substantial PHREVDELTBL PHEFFICACYTBL Objective 2 Objective To improve commercial performance of the National Power Authority. Rationale Outputs 20,000 pre-paid meters were installed in 20 neighborhoods of Freetown at closure as targeted. A Factory Acceptance Test was conducted by a consultant firm and two staff members of the Electricity Distribution and Supply Authority (ESDA) were trained. A revenue management system with its backup, software management application and power banks for main and backup power was provided. The business plan for the national electricity distribution utility was prepared with three modules: (1) The management of Corporate Resources module describing the operational procedures of corporate resources and identifying procedures for corporate resources management. (2) The management of Commercial Functions Module describing the operational procedures for developing commercial functions: and, (3) The management of Network Planning and Operations Module describing the procedures for network planning and Operations and Management (O&M) of the energy utility. The following two studies were completed as targeted at project closure; (1) A transaction advisory study aimed at defining a sector development strategy (including a least cost generation plan and institutional and technical options for rural electrification). (2) A tariff study that was to serve as a basis for the new tariff scheme to be government. Outcomes. Collection rate of the Electricity Distribution and Supply Authority increased from 76% at the baseline to 86% at closure as targeted. This was due to a combination of factors including increase in shift from post- Page 5 of 13

6 paid to pre-paid metering, a revenue protection and arrears recovery. Rating Substantial PHREVDELTBL PHINNERREVISEDTBL Objective 2 Revision 1 Revised Objective To improve commercial performance of the Electricity Distribution and Supply Authority. Revised Rationale Outputs and outcomes as described under Original Objective 2 are the same under this revised objective (The revised objective refers to the commercial performance of the Electricity Distribution and Supply Authority (EDSA) as the National Power Authority was unbundled and replaced by ESDA. Revised Rating Substantial PHEFFICACYTBL Objective 3 Objective To increase access to electricity in selected rural areas. Rationale Outputs. A pilot program for installing photovoltaic systems in public buildings in 14 rural areas was cancelled in view of the inaccessibility of rural areas in the wake of the Ebola Virus Outbreak (EBV). The United Kingdom Department for International Development (DFID) subsequently financed the related activities, as reported by the ICR. Outcomes. As the project activities were cancelled, the expected outcome of providing electricity access through photovoltaic systems in public buildings in rural areas was not achieved. Rating Negligible PHREVDELTBL Page 6 of 13

7 PHOVRLEFFRATTBL Rationale Original Objective. The overall efficacy under the original objectives is rated modest as the objective pertaining to rural electrification is rated negligible. The related activities were cancelled and the expected outcome was not achieved. Revised Objective. The overall efficacy under the revised objectives is rated substantial. The outcomes of the objectives were realized and for the most part exceeded. Given, however, that complementary activities were financed by the Bank and other donors and there were other positive developments (such as the government unbundling sector reforms), the outcomes could not be fully attributed to this project. Overall Efficacy Rating Substantial 5. Efficiency Economic analysis. An economic analysis was conducted at appraisal and at closure for component one activities. This component accounted for 76% of the appraisal estimate and 87% of the actual cost. The project benefits were assumed to come from improved electricity distribution and pre-paid meters and savings due to reduction in technical and non-technical losses. The costs included investment and operation and maintenance (O&M) costs. The Net Present Value (NPV) at closure at 10% discount rate was US$2.46 million as compared to the NPV of US$26.70 million at appraisal. The ex post Economic Rate of Return (EIRR) was 14% vis-à-vis the ex ante EIRR of 39%. The economic returns were lower, as the estimates of the loss reduction program were lower than estimated at appraisal. Operational and administrative issues. There were operational inefficiencies associated with the weak capacity of the implementing agency. The key Project Management Unit positions of fiduciary specialists remained unfilled for over a year after approval. This contributed to delays in launching activities (such as, installing pre-paid meters and revenue management systems). There were procurement delays and delays in implementing the Environment and Social Management Plan and relocating the Project Affected Persons (although this was partly due to the outbreak of the Ebola Virus Outbreak (EVO), which made it difficult for the supervision team to travel to the country). The combination of these factors contributed to time overruns, with the project closing 21 months behind schedule. Efficiency Rating Modest a. If available, enter the Economic Rate of Return (ERR) and/or Financial Rate of Return (FRR) at appraisal and the re-estimated value at evaluation: Rate Available? Point value (%) *Coverage/Scope (%) Page 7 of 13

8 Appraisal ICR Estimate Not Applicable Not Applicable * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome Under Original Objectives. Relevance of objectives to the country and Bank strategies is High. Efficacy of the two original objectives - to reduce losses in electricity supply in Freetown Capital Western Area and to improve commercial performance of the National Power Authority is rated as Substantial. Efficacy of the third objective - to increase access to electricity in selected rural areas - is Negligible, as this activity was dropped in the wake of the Ebola crisis. Efficiency is rated as Modest, as the ex post EIRR was lower than the ex ante EIRR and there were operational and administrative shortcomings. The overall outcome rating for the original PDO is rated as Moderately Unsatisfactory. Under Revised Objectives. The revised objectives are a subset of the original objectives and their relevance to the country and Bank strategies is High. Efficacy of the two sub-objectives - to reduce losses in electricity supply in Freetown Capital Western Areas and to improve commercial performance of the Electricity Distribution and Supply Authority - is rated as Substantial, as the outcomes were for the most part, either realized or exceeded. Efficiency is rated as Modest. The overall rating for the revised PDO is Moderately Satisfactory. Taking into account the ratings discussed above and weighting by the shares of disbursements before and after the first restructuring (0.4* *4 = 3.6), the overall rating is Moderately Satisfactory, reflecting moderate shortcomings in efficiency. a. Outcome Rating Moderately Satisfactory 7. Risk to Development Outcome Technical Risk. There is technical risk, given that the transformer and switchgear provided at Blackhall Road substation had not yet been installed at project closure (the installation of this activity is expected to be completed through an ongoing Bank project (P120304)). Social Risk. There were two outstanding cash compensations relating to the electrical line linking Blackhall Road substation and Wellington substation as one Project Affected Person (PAP) was not available during asset enumeration and negotiation for compensation and the other involved court litigation among multiple claimants. Compensation has to be made to the PAP who was not available and the second outstanding payment was expected to be resolved by the Ministry in charge of energy, using the interest earnings on project funds once the court case is resolved. Institutional Risk. There are risks associated with the weak capacity of the institutions in Sierra Leone. Page 8 of 13

9 8. Assessment of Bank Performance a. Quality-at-Entry This project was prepared based on the experience of prior Bank-financed projects in Sierra Leone (Power and Water Management Project P and the Bumbuna Project p086810). Lessons incorporated at design included, entrusting the responsibility for project implementation to the already established Project Management Unit (PMU) in the Ministry of Energy and Water Resources (MoEWR) for externally funded development programs, hiring a procurement specialist to reinforce PMU's existing capacity, capacity building activities for reducing non-technical losses and increasing collection rates, hiring an environmental and social development specialist and technical assistance for developing an effective enforcement control program. Several risks were identified at appraisal including, high country level risks associated with fragile country context, Sierra Leone's systematic power sector issues (due to inadequate regulatory institutions and governance issues), weak capacity of the implementing agencies (National Power Authority and the Ministry of Energy and Water Resources). Risk mitigation measures incorporated at design included strategic covenants that the recipient was expected to meet at various stages of project implementation (PAD, page 22). The arrangements made at appraisal for fiduciary compliance were appropriate (discussed in section 10). The design underestimated the risk associated with the weak technical capacity of the entities to execute the type of activities that were proposed. Inadequate preparation of key documents such as bidding documents, and lack of adequate staff of the Project Management Unit (PMU) contributed to implementation delays. There were M&E design shortcomings (discussed in section 9a). Quality-at-Entry Rating Moderately Satisfactory b. Quality of supervision Seven Implementation Status Reports (ISRs) were filed over a five-year implementation period. The supervision team included energy economist and specialist, social development specialist and fiduciary specialists. Although implementation was brought to a standstill in the face of the Ebola Virus outbreak, they were resumed in 2015, and the supervision team along with DFID and the government continuing implementation of the reduced scope of project activities. Through implementation, there were weaknesses in procurement and financial management reporting and supervision of social and safeguards aspects of the project (due to the delays following the resignation of the client s safeguards specialist). Lack of timely action on the part of the contractor on the ground for taking the basic safety precautions regarding safeguards further caused delays. These factors were further exacerbated by the constraints in the wake of the Ebola Virus Outbreak. There were partly resolved with a resident Bank Task Team Leader (TTL) after the Ebola Crisis subsided. Page 9 of 13

10 Quality of Supervision Rating Moderately Satisfactory Overall Bank Performance Rating Moderately Satisfactory 9. M&E Design, Implementation, & Utilization a. M&E Design There were four key M&E outcome indicators at design - reduction in electricity losses in the project area, increase in the collection rate by the Electricity Distribution and Supply Authority (EDSA), increase in the number of public buildings in rural villages that were provided with photovoltaic systems and direct project beneficiaries (including women). The key outcome indicators had annual target values for the results indicators and baseline data against which results could be measured. The outcome indicators pertaining to reduction in electricity losses and increase in collection rate could not be totally attributed to the project activities in view of the complementary electricity sector activities by other donors. The Project Management Unit was responsible for collecting, verifying and collating information submitting progress reports on an annual basis for the PDO indicators.the data for monitoring was to be provided by the National Power Authority (NPA) from the utility database and accounts or collected through direct observation. b. M&E Implementation Following the level 1 restructuring, the Results Framework was revised to reflect the change in the project objective and its components. The indicators pertaining to access to electricity services in rural areas was dropped following the cancellation of this activity and the target for direct project beneficiaries was tripled during implementation. Although M&E implementation was hampered during the Ebola Virus Outbreak, these were rectified when the crisis subsided. It is also not clear how the number of direct beneficiaries tripled when there was not much of a material change in the scope of project activities. c. M&E Utilization The data and information was used to monitor progress in project implementation. M&E Quality Rating Modest 10. Other Issues Page 10 of 13

11 a. Safeguards The project was classified as a Category B project. Other than Environmental Assessment (OP/BP 4.01), one safeguard policy was triggered: Involuntary Resettlement (OP/BP 4.12). Environmental Safeguards. Although no construction was envisaged, environmental impacts were anticipated from activities associated with upgrading of distribution facilities and installing Photovoltaic Systems in rural areas. An Environmental and Social Impact Assessment (ESIA) was conducted and an Environmental and Social Management Plan (ESMP) was prepared and publicly-disclosed at appraisal (PAD, page 26). The ICR (page 23) reports that there was no adverse environmental impact and compliance with environmental safeguards was deemed to be satisfactory during implementation. Social safeguards and Involuntary Resettlement. Social impacts and resettlement impact were anticipated from activities associated with upgrading of distribution facilities. According to the PAD (pages 27-28) the Freetown metropolitan areas covered by the existing distribution network had high population densities and faced issues relating to the migration of the Right-of-Way (RoW) of the distribution lines. Reinforcement of the distribution network in the area had been envisaged under the IDA-financed Power and Water Project, which closed in March During preparation of this project, compensation was paid to 164 households for relocation of structures from the RoW for safety reasons and affected households received livelihood support under the existing Resettlement Action Plan (RAP). The existing RAP was updated and publicly-disclosed to address issues associated with involuntary resettlement issues in the context of this project (PAD, page 28). The ICR (page 22) notes that during implementation, the dismantling and stringing of towers resulted in additional damage to properties. Several PAPs were impacted by the project. There were delays in payment of compensation to the PAPs due to a combination of factors including, delays in filling the position of the safeguards specialist, lack of speedy responsiveness by the contractor on the ground, procedural bottlenecks (such as, non-availability of a PAP during asset enumeration and negotiation for compensation and court litigation among multiple claimants). The Project Management Unit during implementation paid additional compensation to PAPs for additional land. About 65 to 70 PAP participated in a Livelihood Restoration Program. The RAP for this project was implemented with two outstanding cash compensation (one PAP was not available during the negotiation process and the other involved court litigation among multiple claimants). Compensation had been made to the former PAP by project closure and the court litigation had not yet been resolved at project closure. The ICR (page 22) reports that outstanding cash compensation issues of this project were to be addressed through an ongoing Bank project (Energy Sector Utility Reform Project). b. Fiduciary Compliance Financial Management. A financial management of the Project Management Unit (PMU) was conducted at appraisal. The PMU was already in charge of an ongoing Bank-financed project (Bumbuna Project). The assessment concluded that the financial management arrangements of the PMU were satisfactory and the financial management risk was rated as Moderate at appraisal (PAD, page 25). The ICR (page 23) notes that financial management was deemed to be satisfactory during implementation. Procurement. An assessment was conducted at appraisal to judge the procurement management capacity of Page 11 of 13

12 the implementing agencies. The procurement risk was rated as High at design (PAD, pages 25-26). Mitigation measures incorporated at design included recruitment of a qualified procurement specialist to reinforce the existing PMU. The PMU developed a procurement plan which provided the basis for procurement methods applicable to each contract for the first 18 months of project and this plan was to updated to reflect project during implementation. The ICR (page 23) notes that the procurement capacity of the Project Management Unit was weak and this contributed to procurement delays. The ICR (page 23) also notes that there was the possibility of mis-procurement on one of the contracts because of incomplete bid documents and major procurement activities were put on hold until the situation was rectified. c. Unintended impacts (Positive or Negative) --- d. Other Ratings Ratings ICR IEG Reason for Disagreements/Comment Outcome Moderately Moderately Satisfactory Satisfactory --- Bank Performance Moderately Moderately Satisfactory Satisfactory --- Quality of M&E Modest Modest --- Quality of ICR Substantial Lessons The IEG selected the following main lessons from the ICR, with some modification of language. (1) Implementation readiness at appraisal and adequate M&E are essential for effective supervision. This is particularly important in fragile environments. Delays in launching of this project due to inadequate preparation of bidding documents and inadequate staff in the Project Management Unit (PMU) and weakness in the PMU hampered the collection and dissemination of the information related to project implementation progress. (2) One option that could prove effective in strengthening technical capacity of the institutions is bringing in external expertise during implementation. In this project two years after effectiveness, the project was experiencing delays, because of the lack of technical know-how on the part of the implementing agencies. (3) Progress in reforming the energy sector may require infrastructure investments along with changes in policies governing the energy sector. Some of the policy measures that helped in realizing the outcomes Page 12 of 13

13 were factors such as unbundling the sector, tariff increases and the prepayment system in revenue collections. (4) The involvement of bank specialists at design could help in improving compliance with social and environmental safeguards. In this project insufficient attention on the part of both the Bank and the borrower to oversee compliance with social and environmental safeguards undermined compliance of safeguards relating to involuntary resettlement during implementation. 13. Assessment Recommended? No 14. Comments on Quality of ICR The ICR is concise and well written. It candidly discusses the preparation issues prior to the Ebola Virus Outbreak (EVO) over which the Bank could be expected to have control and also candidly discusses the issues associated with compliance with social safeguards. The rating in the ICR is consistent with the guidelines and the ICR appropriately does a split rating of objectives. The details provided on supervision is sparse and contains no details on the continuity of leadership. a. Quality of ICR Rating Substantial Page 13 of 13