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1 AFGHANISTAN RECONSTRUCTION TRUST FUND Naghlu Hydropower Rehabilitation Project NHRP (P132944) Project Preparation Grant (PPG) Application to ARTF Management Committee MC Meeting Date: May 7, 2013 Applicant: Islamic Republic of Afghanistan Brief Description: The Naghlu Hydropower Rehabilitation Project will finance the continued rehabilitation of the mechanical, electrical and electromechanical equipment at the Naghlu Hydropower Plant (NHPP). It will also finance the rehabilitation of the civil works and other improvements to dam safety, investigate the possibility of raising the dam height to enable additional power production and finance early preparation tasks for the Kunar River hydropower cascade. Project Development Objective (PDO): The PDO is to increase rapidly the supply of domestically-generated electricity to the Afghan power system in a safe and environmentally and socially sustainable way. Performance Proposed performance indicators for the PPG are: Indicators: Continued rehabilitation of the mechanical, electrical and electromechanical equipment; Advisory panels for dam safety and environment and social issues completing their first meeting; Completion of the environment and social management framework by consultants, and completion of terms of reference for dam safety audit and dam raising feasibility study. Sector: Energy and Mining; Hydropower Location: Kabul and Naghlu Hydropower Plant Total Project : $77.50 million Amount Requested for $4.97 million advance grant from the proposed $77.50 million grant for the proposed Naghlu Hydropower Rehabilitation Project. ARTF MC Approval: Implementing Agencies: Ministry of Energy and Water (MEW) Da Afghanistan Breshna Sherkat (DABS) Implementing NHRP is expected to be implemented over six years, from November 2013 to Period: Contact for further information: Reviewed and cleared by the Administrator: October The PPG is expected to close on December 31, MEW: World Bank: Eng. Ghulam Faruq Qazizada Richard Spencer Deputy Minister for Energy Country Sector Coordinator Ministry of Energy and Water The World Bank Office Kabul gfaruq11@yahoo.com rspencer@worldbank.org DABS: Eng. Shekeeb Nessar Chief Operating Officer Da Afghanistan Breshna Sherkat shekeeb.nessar@dabs.af Country Management and Sector Management Units; Legal Department; Loan Department; Financial Management; Procurement. May 7, 2013 Page 1

2 AFGHANISTAN RECONSTRUCTION TRUST FUND Naghlu Hydropower Rehabilitation Project NHRP (P132944) Request for Funds for Project Preparation (US$4.95 million) MC Meeting Date: May 7, 2013 I. Introduction and Context A. Country Context 1. The Afghan economy needs sustainable sources of long-term inclusive growth. The extremely high level of current annual aid (estimated at $15.7 billion in ) is roughly the same dollar amount as Afghanistan s GDP and will not be sustained at such levels post This slowdown in aid will exert a drag on the overall economy at a time when growth is vitally needed to cope with fiscal and demographic pressures. Growth, under reasonably optimistic scenarios, is projected to fall from a ten year average of over 9% to between 5-6% in By 2021/22, the Government of Afghanistan s financing gap is projected to be 25% of GDP. Unemployment and underemployment, already at 8% and 48% in 2009/10, is projected to rise just as the labor force is expanding by 300,000 new entrants per year. 2. Agriculture and natural resource development are likely to be the most important sectors to drive growth, but alone will be insufficient. Investment by industrial, processing and logistic enterprises as a means to add value to the agriculture and resource sectors will be the key drivers of growth and, especially of job creation. To bring about inclusive jobs and growth, further development of infrastructure, including of sufficient and reliable electric power supply, is essential. B. Sectoral and Institutional Context 3. The Afghan power system is small and underdeveloped but demand is growing rapidly. Grid-based electricity is estimated to meet the needs of about 25 percent of Afghanistan s population, mainly in the urban areas and along a few transmission corridors. About 80 percent of electricity is imported from Iran, Tajikistan, Turkmenistan and Uzbekistan, and accounts for about 600MW of the capacity available in the country. Domestic diesel generators, thermal and hydropower account for about 340MW across the country. The transmission system consists of about eight islands linking the different generation sources, the largest of which is the North East Power System which connects Tajikistan, Uzbekistan and much of Afghanistan s domestic hydropower generation with Kabul. Demand growth brings increasing dependence on imports, which is of increasing concern to government and civil society because it compromises Afghanistan s energy security. 4. The National Energy Supply Program (NESP), one of GoA s National Priority Programs (NPPs), articulates an ambitious program for development of the power sector up to It plans to increase the number of consumers connected to the grid from today s 1 This amount includes security aid. Civilian aid is approximately $6 billion. May 7, 2013 Page 2

3 850,000 to 1.15 million requiring investment in generation, transmission and distribution estimated in the NESP at about $2.7 billion. To accompany the physical growth, other plans include efforts to reduce losses, improve billing and collections and attract private sector investment. Although NESP may be as much aspirational as achievable, it underlines the government s clear understanding of the linkages between a better electricity supply and economic growth. 5. Sector institutions are evolving, with a gradual separation of policy and operations. The main government department responsible for the power sector in Afghanistan is the Ministry of Energy and Water (MEW). It is increasingly focused on policy, strategy and planning issues and has taken the lead on preparation of the NESP and the Power Master Plan. Given Afghanistan s dependence on imports and external financing, MEW also has a significant role in dealing with its neighbors and donors. 6. Operations and investment are increasingly devolved to Da Afghanistan Breshna Sherkat (DABS). Until 2009, the entity responsible for power supply, Da Afghanistan Breshna Mossesa (DABM), was a department of MEW. With World Bank and other donor support, DABM was converted into DABS, which is now focused on developing into a fully commercial power utility while remaining under state ownership. Initially responsible for day to day operation of the transmission and distribution system, DABS carried out about $26 million of investment in the 1391 financial year ended December 20, DABS remains weak in institutional, financial and human capacity to rehabilitate and operate the power system. If it is to be able to manage a growing system it need to improve its ability to rehabilitate and operate the assets it has, as well as to invest in new plant. 7. While there is significant potential for domestic generation in the longer term, the options in the short term are limited. The only new domestic generation project in the last five years (the 105 MW diesel project at Tarakhil completed in 2010) has been little used for reasons of high operating cost and fuel shortages. In the medium term, the development of miningrelated generation investments offer some scope for domestic generation. They include a 400MW coal fired power plant at Ispushta linked to the copper mining concession at Aynak of which about 100MW would be available to the North East Power system. Also under development, but much delayed, are 18MW of additional capacity at Kajaki hydropower plant in the south of the country and the 42MW Selma hydropower plant in the west of the country. In the longer run, there is a possibility of domestic gas discoveries in commercial quantities being available for large-scale generation, and the option to develop the significant hydropower potential in the country, estimated at 23,000MW. In the light of these limited prospects, rehabilitation of the existing assets so that they can reach their maximum potential assumes greater importance. 8. The Naghlu hydropower plant is in urgent need of rehabilitation. Naghlu hydropower plant provided about 6.5 percent of total supply in The electrical and electromechanical equipment is part-way through being rehabilitated but currently only three out of the four units are available for operations, with the fourth awaiting a new or repaired rotor shaft and other spares that are being made in Russia. Further funding is needed to complete the work. In addition inoperability of the bottom outlet, unavailability of auxiliary methods of operating spillway gates and independent operation of power intake gates, sediment buildup, presence of unexploded ordnance near and on parts of the structure and lack of essential May 7, 2013 Page 3

4 instrumentation render the dam unsafe. Last, despite earlier training, poor operations and maintenance practices at the plant do not allow safe and sustainable operation. II Proposal Summary A. Project Development Objective 9. The project development objective is to increase rapidly the supply of domesticallygenerated electricity to the Afghan power system in a safe and environmentally and socially sustainable way. B. Project Design 10. The project is proposed to consist of the following six components, with a total estimated cost of $77.5 million. 11. Component 1: Mechanical, Electrical and Electromechanical Works (ARTF $14 million). This component is aimed at finishing the rehabilitation of the electrical and electromechanical parts of the plant and ensuring their sustainable operation. It will consist of three subcomponents: Rehabilitation of Unit 1 and balance of plant. Ongoing electromechanical rehabilitation work will be completed, focused on Unit 1. In particular, the bent rotor shaft will be tested and either repairs undertaken, if possible, or a replacement ordered. Balance of plant rehabilitation, which is not yet complete, will also be finished. Spare parts and consumables. Although the original contract for the rehabilitation of the electromechanical works included spare parts, additional parts and consumables are required for the sustainable operation of the plant. A separate supply contract will be procured for the parts, aimed at covering a period of three years. Additional training for plant staff. Although some training in the rehabilitated plant has been undertaken, experience suggests that it has been inadequate to ensure sustained and safe operation of the plant. Further, more systematic and thorough training for plant staff will be undertaken in this component. 12. Component 2: Dam Safety Improvements (ARTF $28 million). This component is aimed at ensuring the safe operation of the dam and will consist of three subcomponents as follows: Dam safety audit. Consultants will undertake an audit of the dam s structural and operational safety, and preparation of plans and bidding documents for civil works to improve safety to acceptable standards though it should be noted that this will be done with the aim of ensuring sustainability in the Afghan context. This work will cover identified issues such as reactivating the bottom outlet, installation of auxiliary power and other systems, improvements to the headgates closing system, installation of instrumentation and clearance of unexploded ordnance from the dam structure. The subcomponent will also include studies on hydrological and seismological safety. Non-structural measures. Consultants will also support DABS to introduce modern dam safety measures that do not entail structural or other works. This will include setting up a procedure and staffing for independent dam safety inspections; preparation of dam safety plans including operations, maintenance and surveillance May 7, 2013 Page 4

5 manuals for civil works, emergency preparedness plans, and post-earthquake response plans. The operating manuals for the electrical and electromechanical works will be revised. Training for staff in all aspects will be conducted. Structural and other works. Based on the findings of the safety audit, a contractor will be procured to undertake the improvements required to bring the dam to acceptable safety standards. Work to be included under this subcomponent will include sediment removal, reactivation of the low level outlet; introduction of independent operation of the power intake gates; installation of a standby generator for emergency opening of the spillway gates and closing of the power intake gates; and installation of essential instrumentation. Other work identified in the audit will be included. 13. Component 3: Feasibility and Design Studies on Increasing Reservoir Regulation Capacity (ARTF $15 million). This component is aimed at examining the potential for increasing the active storage volume of the Naghlu reservoir. This would compensate for reductions caused by sedimentation and potentially increase the amount of energy produced by the dam. The component will consist of two subcomponents: Feasibility study. This will study the feasibility of raising the dam crest. Studies will include review of topography, geotechnical, hydrological and electricity generation, engineering and economic and financial aspects. Since raising the dam would increase the size of the reservoir, an ESIA will also be conducted by a separate consultant. Detailed design. Should the feasibility study return a positive result, a detailed design would be prepared. Based on the findings of the ESIA, resettlement and livelihoods restoration, environment management, health, and other action plans would also be prepared. These activities would then allow swift preparation of a follow-up investment project to raise the dam, should financing be available and security and other circumstances permit. 14. Component 4: Environmental and Social Sustainability (ARTF $7 million). This component will aim to ensure the environmental and social sustainability of the dam. It will consist of three subcomponents: Addressing legacy issues. Early consultations with people in the project area indicate that there are a number of social legacy issues from the project. They include land, buildings and other assets for which compensation was not provided and promises of provision of electricity and jobs which have not been fulfilled. The component would support electrification in the project area, and improved access to skills and training to enable local people to gain employment at the plant. As consultations proceed ways to share project benefits and improve livelihoods of those in the project area will be explored. Environment management. This subcomponent will support (a) the monitoring of the existing environment management plan for Component 1; and (b) the preparation implementation and independent monitoring of an environment management plan for the structural and other works subcomponent of Component 2. Resettlement and livelihoods restoration. This subcomponent will support the preparation, implementation and independent monitoring of a resettlement and May 7, 2013 Page 5

6 livelihoods development plan for the structural and other works subcomponent of Component 2. It will not finance land acquisition. 15. Component 5: DABS Project Management (ARTF $7.5 million). This component is aimed at ensuring that DABS receives advice on good international practice. It will consist of the technical, safeguards and consulting and other services needed to support implementation of the project by DABS. Consistent with the principle of learning by doing consultant assignments will be designed to support and mentor concerned DABS staff, rather than implement the project. The component will include the creation and maintenance of an Environment and Resettlement Advisory Panel, the duties of which will embrace the requirements of OP 4.01 for an independent environment panel of experts and an Engineering Advisory Panel, the duties of which will embrace the requirements of the dam safety review panel as set out in OP Component 6: Capacity Development and Scale-up (ARTF $5.0 million). The Capacity Development and Scale-up Component will support early actions needed to develop the Kunar River hydropower cascade. It is expected to finance studies to complement existing feasibility studies on planning and implementation for social development; environment and health management, consideration of alternatives and mitigation measures; hydrological, geological, geotechnical, seismic and dam safety studies; project preparation and management and preparation of financial and economic documents. C. Project Phasing 17. The proposed project would be phased to allow build up of project implementation capacity in parallel with the technical work that must be undertaken. Three phases are envisaged: Preparation. In addition to the normal activities undertaken during preparation, the work currently being undertaken to rehabilitate the mechanical, electrical and electromechanical works would continue. The Environment and Resettlement Advisory Panel and Engineering Advisory Panel will be recruited. Specialist procurement, safeguards and technical consultants will be hired to help DABS prepare the first phase activities. The PPG now proposed is to finance these costs. First phase. Upon completion of the preparation phase, ARTF financing will be sought to cover the costs of a first phase focused on the completion of Component 1, covering electrical and electromechanical works, the safety audit and non-structural subcomponents of Component 2, the feasibility study under Component 3, and Components 4, 5 and 6. Second phase. When the scope and cost of the structural and other works planned under Component 2 have been identified, and if a decision to move to the detailed design for increasing the reservoir regulation capacity under Component 3 is made, additional ARTF financing will be sought. 18. The phased approach is summarized in Table 1. May 7, 2013 Page 6

7 Component and subcomponent Table 1: Phasing and Financing Preparation ($ million) Phase 1 ($ million) Phase 2 ($ million) Total ($ million) Component 1: Electrical and Electromechanical Works Rehabilitation of unit 1 and balance of plant Spare parts and consumables Additional training Component 2: Dam Safety Improvements Safety audit Non-structural measures Structural and other works Component 3: Feasibility and Design Studies Feasibility study Design study Component 4: Environmental and Social Sustainability Addressing legacy issues Environment management Resettlement and livelihoods restoration Component 5: DABS Project Management Component 6: Capacity Development and Scale-up 5.00 Total D. Project Preparation Grant 19. The purpose of this application is to request an ARTF grant for the total amount of $4.97 million to be used by MEW and DABS for preparing the Naghlu Hydropower Rehabilitation Project. The grant will finance the following activities: III. MEW s continued implementation of the rehabilitation of the mechanical, electrical and electromechanical parts of the Naghlu Hydropower Plant specficaly relating to unit 1 and the balance of plant by financing contract MEW 302. Consultants and other expenses incurred by DABS to strengthen its ability to prepare civil, dam safety and safeguards-related aspects of the project and the appointment of two expert committees as required by Bank policy. Implementation Arrangements For The PPG A. Institutional Arrangements 20. Responsibility for management of the rehabilitation of the mechanical, electrical and electromechanical work will rest with MEW. It has been managing this contract since it was originally awarded in 2006 with the support of a Project Management Firm (PMF) which is financed with the proceeds of the ARTF Grant for the Power System Development Project (TF ). It will most likely also be responsible for the Capacity Development and Scale-up component although this has yet to be confirmed. 21. For the other components of the project, overall responsibility for project management will rest with DABS, whose Chief Executive Officer will delegate day to day management to heads of Divisions. Implementation will be grounded in the Operations Division of DABS and, particularly, Naghlu Hydropower Plant Department. Oversight of technical and safeguards issues will rest with the Chief Operating Officer and the Operations Division, with day to day management at the project site being the responsibility of the Manager of the Naghlu May 7, 2013 Page 7

8 Hydropower Plant. B. Procurement 22. Procurement for the project will be administered in accordance with the World Bank s Guidelines for Procurement of Goods, Works and Non-Consulting Services under IBRD Loans, IDA Credits and Grants by World Bank Borrowers dated January 2011 and Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers, dated January The World Bank s Standard Bidding Documents (SBDs), Requests for Proposals, and Forms of Consultant Contract will be used. Goods following National Competitive Bidding (NCB) procedures shall be procured using the agreed SBDs for Afghanistan. In case of conflict/contradiction between the World Bank s procurement procedures and any national rules and regulations, the World Bank s procurement procedures will take precedence as per the Article 4(3) of the Procurement Law of the Islamic Republic of Afghanistan dated October There is no procurement proposed for MEW to be financed by the PPG as the only contract to be financed was previously procured using World Bank Guidelines. 24. The Bank has conducted a preliminary assessment of the procurement capacity of DABS. The assessment shows a reasonable setup of procurement processes of DABS. The assessment also found some gaps in staff competencies, understanding of the market for power equipment, internal audit system and decentralization. Based on this assessment the PPG will provide for two procurement specialists with multi-country experience in a similar sector and setup with the aim to develop the existing system and to develop long term strategy recommendations for the procurement department of DABS. C. Financial Management (FM) Arrangements 25. A public financial management (PFM) performance rating system was developed for Afghanistan by the Public Expenditure and Financial Accountability (PEFA) multi-agency partnership program, which includes the World Bank, IMF, EC, and other agencies. Afghanistan s ratings against the PFM performance indicators portray a public sector where financial resources are, by and large, being used for their intended purposes as authorized by a budget that is processed with transparency and has contributed to aggregate fiscal discipline. 26. Financial management and audit functions at the central level for the proposed PPG will be undertaken through the agents contracted under the Second Public Financial Management Reform Project. This is the primary instrument for continuing to strengthen the fiduciary measures put in place for ensuring transparency and accountability of funds provided by the Bank and other donors. Under these contracts, two advisers Financial Management and Audit are responsible for working with the government and line ministries to carry out these core functions. The Financial Management Agent (FMA) is responsible for helping the MoF maintain the accounts for all public expenditures, including IDA/ARTF-financed projects and for building capacity within the government offices for these functions. 27. The Finance Division of DABS will have responsibility for the financial management aspects of the parts of the project undertaken by DABS. This Division is headed by a Chief Financial Officer and has sufficient staff and capacity to handle the PPG and follow on project. DABS maintains an accounting/reporting system (Microsoft Dynamic Great Plains) that is used for budgeting, accounting and reporting, which will be used for the project. For those parts of the May 7, 2013 Page 8

9 project to be implmented by MEW, the primary responsibility for the financial management aspects will rest with the finance department of MEW. However, due to weak capacity of the department, technical assistance will be provided through the PPG and the follow on project by the PMF. 28. Interim Financial Reports will be prepared by the implementing entities every quarter and submitted to the Bank within 45 days from the end of the quarter. 29. Designated Accounts (DA), one for each implementing agency, will be opened at Da Afghanistan Bank (DAB, Central Bank) in the name of the project on terms and conditions satisfactory to the Bank. The DAs will be maintained by the MoF. Withdrawal applications for new advances and expenditure reports will be submitted monthly. D. Funds Flow 30. Fund management for the project will follow existing procedures. As with all public expenditure, all payments under the project will be routed through MoF. The FM Adviser will assist the MoF in executing and recording project payments in AFMIS (Afghanistan Financial Management Information System) at the central level. In keeping with current practices for other projects in Afghanistan, the DAs will be operated by the Special Disbursement Unit (SDU) in the Treasury Department MoF. Requests for payments from DA funds will be made to the SDU by DABS and MEW. Copies of all supporting documentation will be maintained by the respective implementing agencies. 31. In addition to payments from DA funds, MEW and DABS can also request the SDU to make direct payments to consultants or consulting firms, and special commitments for contracts covered by letters of credit. Such requests will follow World Bank s procedures. All withdrawal applications to the Bank, including advances, reimbursement, and direct payment applications, will be prepared and submitted by MoF. E. Accounting and Reporting 32. The finance unit of MEW supported by technical assistance and the account department of DABS will maintain essential project transaction records using computerized accounting system/excel spreadsheets and generate required monthly, quarterly, and annual reports. F. Disbursement Method 33. Project preparation funds will be channeled through two segregated designated accounts in USD to be opened at the Da Afghanistan Bank (DAB, Central Bank). Advance will be made to the designated accounts with a fixed ceiling calculated based on a 4-months worth of expenditures to be paid out of the designated accounts. Disbursements from the grant will be made using advances, reimbursement, direct payment, and payments under Special Commitments including records or against reports, in the form of statements of expenditures, as appropriate. G. Audit of Project Funds 34. The Supreme Audit Office, supported by the Audit Agent, is responsible for auditing the accounts of all IDA and ARTF-financed projects, it will also be responsible for this project s audit. Annual audited project financial statements will be submitted within six months of the close of GOA s fiscal year. May 7, 2013 Page 9

10 35. The Bank-financed projects already or currently being implemented by MEW and DABS have no overdue audit reports and no overdue IFRs. However, there are ineligible expenditures of $976,637in two projects implemented by MEW. The individual amount for ineligible expenditures are $365,073 in Afghanistan Water Resources Development Technical Assistance Project (TF093637) and $611,564 in and Irrigation Restoration and Development Project (TF012029). H. Audit Responsible Entity 36. The responsible entities for the audit are the Ministry of Energy and Water (MEW) and Da Afghanistan Breshna Sherkat (DABS). I. Safeguards 37. The Environmental and Social Safeguards Framework prepared as part of Emergency Power Rehabilitation Project (Cr and TF054718) noted that there were not expected to be any environmental or water flow impacts as a result of the rehabilitation of the mechanical, electrical and electromechanical works at Naghlu. It noted that management of any impacts would be is the responsibility of the contractor and contract MEW302 sets out the contractor s obligations in this regard. These obligations still stand as the contract remains active. 38. No environment impact is expected as a result of any other activities proposed to be carried under the PPG described in the following section. IV. Planned Expenditures Under PPG 39. Table 2 summarizes planned expenditures by Disbursement Category for the proposed Project Preparation Grant of $4.97 million. Subsequent sections provide breakdowns for each implementing agency. Table 2: Summary of Planned Expenditures by Disbursement Category Expenditure Budget Allocation (US$) Goods for MEW 3,520,000 Consultants' services, training and workshop, and incremental operating 1,450,000 costs for DABS Total 4,970,000 A. Planned Expenditures formew 40. Planned expenditures for MEW against the existing contract MEW 302 for the rehabilitation of mechanical, electrical and electromechanical equipment during the project preparation period amount to $3.52 million, including contingencies. The financing would be retroactive from April 1, 2013 to the closing of the PPG. Table 3 gives the breakdown by amounts. Expenditures will be managed under a single expenditure category and Designated Account specific to MEW. May 7, 2013 Page 10

11 Table 3: B. Planned Expenditures for DABS Planned Expenditures by MEW Expenditure Budget Allocation (US$) Contract MEW 302 3,520,000 Total 3,520, Planned expenditues for DABS for project preparation are summarized in Table 4 below and consist largely of financing for individual consultants, including members of both the Environment and Resettlement Advisory Panel and the Engineering Advisory Panel. These expenditures will be managed under a single disbursement category and Designated Account specific to DABS. Table 4: Planned Expenditures by DABS Expenditure Budget Allocation (US$) Consultants (including travel and subsistence) 1,268,000 Incremental Operating costs 50,000 Contingency (10%) 132,000 Total 1,450, Table 5 summarizes the consultant assignments expected to be financed by the PPG. Table 5: Planned Consultant Assignments to support DABS Consultant Services - Individuals Unit Quantity Engineering Advisory Panel May 7, 2013 Page 11 Unit Total (US$) Chairman/civil engineer (Int'l) Month 3 32,500 97,500 Sedimentation expert (Int'l) Month 2 30,000 60,000 Dam safety systems expert (Int'l) Month 2 30,000 60,000 Hydrologist (Local) Month 3 8,000 24,000 EAP Assistant (Local) Month 9 2,500 22,500 Environment and Social Advisory Panel Chairman/social specialist (Int'l) Month 3 27,500 82,500 Environment specialist (Int'l) Month 2 25,000 50,000 Livelihoods specialist (Int'l) Month 2 25,000 50,000 Land and resettlement specialist (local) Month 3 8,000 24,000 ESAP Assistant (Local) Month 9 2,500 22,500 Procurement Advisory Procurement Advisor (Int'l) Month 7 30, ,000 Procurement Systems Specialist (Int'l) Month 4 30, ,000 Technical Preparation Specialist (Int'l) Month 3 30,000 90,000 ESMF Specialist (Int'l) Month 3 27,000 81,000 Total Individual Consultants 994,000

12 43. Table 6 summarizes the cost of travel and subsistence and Table 7 the incremental operating costs expected to be incurred by DABS under the PPG. Table 6: Expected Travel and Subsistence s for Consultants Supporting DABS Total Travel and Subsistence - Advisory Unit Unit Number Panels and International Consultants (US$) International trips Trip , ,000 Local trips Trip 4 2 1,000 4,000 Total Travel and Subsistence 274,000 1 Assumes two visits to Afghanistan per international consultant during preparation period 2 Assumes two trips per local advisory panel experts during preparation period. Table 7: Expected Incremental Operating s for the DABS Activities Incremental Operating Unit Number Workshops, training events (financial management, procurement, safeguards, project management, contract management, expert panel briefings etc) Unallocated other costs including travel, allowances etc Unit Total (US$) Event 5 5,000 25,000 Lump 1 25,000 25,000 Total Incremental Operating s 50,000 May 7, 2013 Page 12

13 I. General ANNEX 1: Procurement Plan A1. Procurement for the project will be administrated in accordance with the World Bank s Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits & Grants dated January 2011 (the Procurement Guidelines), and Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers dated January 2011 (the Consultant Guidelines), and the provisions stipulated in the Financing Agreement. In addition, the World Bank s Guidelines on Preventing and Combating Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants dated October 15, 2006 has been shared with the Recipient. The World Bank s Standard Bidding Documents, Requests for Proposals, and Forms of Consultant Contract will be used. Goods following National Competitive Bidding (NCB) procedures shall be procured using the agreed Standard Bidding Documents (SBDs) for Afghanistan. A2. In case of conflict/contradiction between the World Bank s procurement procedures and any national rules and regulations, the World Bank s procurement procedures will take precedence as per the Article 4 (2) of the Procurement Law July 2008 (Amendments in January 2009 incorporated) of the GoA. II. Project Information Country: Afghanistan Project Name: Naghlu Hydropower Rehabilitation Project (NHRP) Project ID: P Grant No: To be alloted Project Implementing Agencies: Ministry of Energy and Water Da Afghanistan Breshna Sherkat Bank s approval Date of the Procurement Plan for Project Preparation Grant: April 24, 2013 Date of General Procurement Notice: May 1 st, 2013 Period covered by this procurement plan: 9 months III. Goods and Works and non-consulting services A3. No goods, works or non-consulting services are expected to be procured under this PPG. Contract MEW/302 was originally procured following World Bank Guidelines applicable at the time. IV. Selection of Consultants A4. The thresholds for selection decisions subject to Prior Review by the Bank as stated in Appendix 1 to the Consultant Guidelines are set out in Table A1. Table A1: Selection Method Individual Consultants Single Source (Individual) Thresholds for Prior Review for Consultants Prior Review Threshold in US$ More than 50,000 or equivalent All A5. Table A2 sets out the expected individual consultant selection by DABS during the May 7, 2013 Page 13

14 period of the PPG. No firms are expected to be selected by DABS during the period of the PPG. No consultants are expected to be selected by MEW. Table A2: Selection Plan: Consulting Services For DABS During Project Preparation Contract (Description Estimated (US$) Selection method Review by Bank (prior/post) Expected Contract Start Date Engineering Advisory Panel Chairman/civil engineer (Int'l) 97,500 IC Prior June 30, 2013 Sedimentation expert (Int'l) 60,000 IC Prior July 31, 2013 Dam safety systems expert (Int'l) 60,000 IC Prior July 31, 2013 Hydrologist (Local) 24,000 IC Post July 31, 2013 EAP Assistant (Local) 22,500 IC Post June 30, 2013 Environment and Social Advisory Panel Chairman/social/ livelihoods specialist (Int'l) 82,500 IC Prior June 30, 2013 Environment specialist (Int'l) 50,000 IC Prior July 31, 2013 Livelihoods specialist (Int'l) 50,000 IC Prior July 31, 2013 Land and resettlement specialist (local) 24,000 IC Post July 31, 2013 ESAP Assistant (Local) 22,500 IC Post June 30, 2013 Procurement Advisory Procurement Advisor (Int'l) 210,000 IC Prior May 31, 2013 Procurement Systems Specialist (Int'l) 120,000 IC Prior July 31, 2013 Technical Preparation Specialist (Int'l) 90,000 IC Prior June 30, 2013 ESMF Specialist (Int'l) 81,000 IC Prior June 30, 2013 V. Incremental Operating s (IOC) A6. Incremental operating costs (IOC) mean the incremental operating expenses incurred by DABS on account of project preparation implementation and management, including domestic workshops, travel and per diem allowances as per the GOA Guidelines, but excluding salaries or other staff costs. Table A3 sets out the IOC expected to be expended during project preparation by DABS. No IOC are anticipated for MEW. IOC are not subject to procurement but should be properly accounted for and supported by adequate evidence for audit purposes. Table A3: Incremental Operating s Expected To Be Expended By DABS Operating s Unit Number Workshops, training events (financial management, procurement, safeguards, project management, contract management, expert panel briefings etc) Unallocated other costs including travel, allowances etc Unit Total (US$) Event 5 5,000 25,000 Lump 1 25,000 25,000 Total Operating s 50,000 May 7, 2013 Page 14