THE UNITED REPUBLIC OF TANZANIA 0 NATIONAL AUDIT OFFICE REPORT OF THE CONTROLLER AND AUDITOR GENERAL ON THE SPECIAL PURPOSE FINANCIAL STATEMENTS AND COMPLIANCE AUDIT OF TANZANIA ELECTRIC SUPPLY COMPANY LIMITED FOR TANZANIA ZAMBIA TRANSMISSION INTERCONNECTOR PROJECT (TAZA) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021 PROJECT ID: IDA CREDIT NO:6293-TZ Office of the Controller and Auditor General, National Audit Office of Tanzania, Audit House, 4 Ukaguzi Road, P.O. Box 950, 41104 TAMBUKARELI DODOMA. Tel: +255 (026) 2161200 Fax: +255 (026) 2321245 E-mail: ocaq@nao.Ro.tz Website: www.nao.9o.tz December 2021 AR/PA/TAZA/TANESCO/2020/21 Mandate The statutory mandate and responsibilities of the Controller and Auditor-General are provided for under Article 143 of the Constitution of the URT of 1977 (as amended from time to time) and in Section 10 (1) of the Public Audit Act, Cap 418 (R.E 2021). Vision A credible and modern Supreme Audit Institution with high-quality audit services for enhancing public confidence. Mission To provide high-quality audit services through modernization of functions that enhances accountability and transparency in the management of public resources. Motto: "Modernizing External Audit for Stronger Public Confidence" Core values In providing quality services, NAO is guided by the following Core Values: i. Independence and objectivity ii. Professional competence iii. Integrity iv. Creativity and Innovation v. Results-Oriented vi. Teamwork Spirit We do this by: / Contributing to better stewardship of public funds by ensuring that our clients are accountable for the resources entrusted to them; V Helping to improve the quality of public services by supporting innovation on the use of public resources; / Providing technical advice to our clients on operational gaps in their operating systems; / Systematically involve our clients in the audit process and audit cycles; and V Providing audit staff with adequate working tools and facilities that promote independence. © This audit report is intended to be used by TANESCO and may form part of the annual general report, which once tabled to National Assembly, becomes a public document; hence, its distribution may not be limited. ci Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 TANZANIA ELECTRIC SUPPLY COMPANY LIMITED TANZANIA ZAMBIA TRANSMISSION INTERCONNECTOR PROJECT (TAZA) TABLE OF CONTENTS A B B REV IAT IO N S ..............................................O.................................... iv 1.0 REPORT OF MANAGEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021.......... 1 2.0 DECLARATION OF HEAD OF FINANCE ....................................................... 5 3.0 INDEPENDENT REPORT OF THE CONTROLLER AND AUDITOR GENERAL................ 6 3.1 REPORT ON THE AUDIT OF SPECIAL PURPOSE FINANCIAL STATEMENTS............. 6 3.2 REPORT ON COMPLIANCE WITH LEGISLATIONS ........................................ 9 4.0 SPECIAL PURPOSE FINANCIAL STATEMENTS ..............................................10 STATEMENT OF CUMULATIVE RECEIPTS AND PAYMENTS AS AT 30 JUNE 2021.............10 STATEMENT OF RECEIPTS AND PAYMENT FOR THE YEAR ENDED 30 JUNE, 2021..........11 NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS..................................12 ii Controller and Auditor General .-- AR/PA/TAZA/TANESCO/2020/21 TANZANIA ELECTRIC SUPPLY COMPANY LIMITED TANZANIA ZAMBIA TRANSMISSION INTERCONNECTOR PROJECT (TAZA) ABBREVIATIONS AFD Agence Franqais de Development (French Development Agency) CB Capacity Building CMS Corporate Management System EAPP Eastern Africa Power Pool ESMP Environmental and Social Management Plan EU European Union FY Financial Year GoT Government of the United Republic of Tanzania IDA International Development Association MoFP Ministry of Finance and Planning NBAA National Board of Accountants and Auditors PIS Project Implementation Support PIU Project Implementation Unit RAP Resettlement Action Plan SAPP Southern African Power Pool SDR Special Drawing Right TANESCO Tanzania Electric Supply Company Limited WB World Bank Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 1.0 REPORT OF MANAGEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021 1.1 Introduction The Tanzania - Zambia Transmission Interconnector Project (TAZA) aims at extending transmission backbone in South-West parts of Tanzania to allow for Regional power trade between Southern African Power Pool (SAPP) and Eastern Africa Power Pool (EAPP) and to increase availability of reliable power to undeserved areas in both countries. It consists of the following components:- 1. Transmission Infrastructure (400kV) Extension with associated substations at Iringa, Kisada, Mbeya, Tunduma and Sumbawanga. 2. TANESCO Transmission System Readiness for Interconnection, and Corporate Commercial Management Improvements. 3. Project Implementation Support and Capacity Building. 4. Technical Assistance to EAPP. The Project is mainly financed by the World Bank (WB) through the financial Agreement signed on 07 September 2018 between the United Republic of Tanzania and the International Development Association (IDA) of the World Bank. Other financiers are Agence Francaise de Development (AFD) and European Union (EU) through AFD whose financing agreements were signed on 29 June 2020 and 15 December 2020 respectively. 1.2 Project Financing The Tanzania part of the TAZA Project is co-financed by the WB, AFD and the EU through AFD with the loan and grant amount not exceeding USD 615 Million (United States Dollars Six Hundred Fifteen Million), being USD 455 Million, EUR 100 Million and EUR 26 Million from WB, AFD and EU through AFD respectively to be used exclusively to finance project's expenditures for Tanzania part. The United Republic of Tanzania also financed the project a total of USD 10 Million equivalent to TZS 22,893,900,000. Financing details are summarized in the Table 1:- Table 1: Financing Details (Million USD) TAZA Components IDA AFD EU Grant GoT Total Loan Loan via AFD Grant Component 1: Transmission 335 119 31 485 Infrastructure Extension Component 2: TANESCO Transmission System Readiness for Interconnection and Corporate Commercial Management Improvement Component 3: Project Implementation Support and Capacity 21 - - 21 Building Resettlement Compensation - - 10 10 Total 455 119 31 10 615 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 Below in Table 2 is the approved credit/grant amount and the credit/grants so far disbursed by the financier to the project as at 30 June 2021. Table 2: Disbursed Amount as of 30 June 2021 Details Approved Equivalent Credit/Grant Amount in SDR Approved Credit/Grant Wor0Bank (WB) USD 455,000,000 3,4 Agence Frangaise de Development (AFD) - EUR 100,000,000.00 E UR 100, 000, 000 83,228,334 European Union (EU) - EUR 26,000,000.00 EUR 26,000,00() -21,639,367 GOT/TANESCO USD 10,000,000 7,300,000 Total Credit | 428,567,701 World Bank USD 11,030,480 - -8,002,730 GOT/TANESCO TZS 766,124,365 238,600 Total Amount Disbursed 8,241,330 L Total Undisbursed Amount 420,326,371 1.3 Project Components The overall project on Tanzania side has three main components: 1.3.1 Extension of Transmission Lines infrastructure from Iringa to Sumbawanga and associated substations. There are three sections/parts as follows: a) Construction of 400kV Double Circuit 616km Transmission Line from Iringa via Kisada, Mbeya, Tunduma to Sumbawanga. b) Construction of 400/220/33kV Grid Substations in Iringa, Kisada, Mbeya, and Tunduma and 400/220/66/33kV in Sumbawanga. c) Construction of Tunduma 400/330kV auto-transformation switchgear and 4km of 330kV Transmission Line (constructed at 400kV, but energized at 330kV) from the new Tunduma 400/220/33kV substation to the border with Zambia to connect to the Zambian 330kV grid. 1.3.2TANESCO Transmission System Readiness for Interconnection and Corporate Commercial Management Improvements. This involves technical assessment of TANESCO Transmission system to identify gaps in meeting the requirements for the operational integration in the SAPP and EAPP for reinforcement purposes and support of integration of business system as part of corporate management system. 1.3.3 Project Implementation Support and Capacity Building. This sub-component includes provision of consultancy services for the project management and supervision among others, studies, training and other capacity building activities to prepare TANESCO for operating in a trading environment with the SAPP and EAPP. 1.3.4 Environmental and Social Management Plan (ESMP) and Resettlement Action Plan (RAP). 2 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 This consists of implementation of the agreed mitigation measures and compensation to people affected by the project. 1.4 Management of the Project The execution of the project is vested to TANESCO. There is a Project Implementation Unit (PIU) within TANESCO that manages project activities. 1.5 Project Implementation Progress The project is still in the preparatory phase. The consultant, M/s SWECO International AB, was contracted in January 2020 for provision of consultancy services for reviewing and updating Feasibility Study and undertaking Conceptual Design of the project, and preparation of EPC Bidding documents for procurement of supervising consultant and contractors. 1.5.1 Extension of Transmission Lines Infrastructure from Iringa to Sumbawanga and associated substations The consultant has already submitted the Final Feasibility Study Update report and Final Conceptual Design of the project. The draft Pre-qualification documents under Items a, b and c of para 1.3.1 are at World Bank and AFD for review and No-Objection. The Requests for Interest for Qualification are expected to be advertised in the First Quarter of the Financial Year 2021-22 after approval of the pre-qualifications by the Banks. 1.5.2TANESCO Transmission System Readiness for Interconnection and Corporate Commercial Management Improvements. The World Bank has approved the evaluation report for engagement of supply and installation contractor. 1.5.3 Project Implementation Support and Capacity Building The World Bank has approved the Terms of Reference (ToR) for procurement of Management and Supervision consultant, Procurement Specialist as Individual Consultant, Gender Specialist as Individual Consultant and Principal Safeguard Specialist as Individual Consultant. The Requests for Expression of Interested (REOI) for all consultants are expected to be advertised in the First Quarter of the Financial Year 2021-22. 1.6 Project Auditors By virtue of provisions of Article 143 of the Constitution of the United Republic of Tanzania of 1977 and Sect.10 of the Public Audit Act, Cap 418 (R.E. 2021), the Controller and Auditor General is the appointed Auditor of all Government revenues and expenditures including the receipts and payments of this project. 1.7 Management Responsibility Special Purpose Financial Statements are prepared for the use of Tanzania Electric Supply Company Limited and the Financiers of the Project. 3 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 TANZANIA ELECTRIC SUPPLY COMPANY LIMITED TANZANIA ZAMBIA_TRANSMISSION INTERCONNECTOR PROJECT (TAZA) Management of Tanzania Electric Supply Company Limited are responsible for the preparation and fair presentation of these special purpose financial statements which comprise the statement of receipts and payments, the statement of cumulative receipts and payments and a summary of significant accounting policies and other explanatory, which are prepared in accordance with the Guidelines on Annual Financial Reporting and Auditing of World Bank Projects. On behalf of management: Q3 - 12- zo3-t MahaH Chande Date Managing Director - TANESCO 4 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 TANZANIA ELECTRIC SUPPLY COMPANY LIMITED TANZANIA ZAMBIA TRANSMISSION INTERCONNECTOR PROJECT (TAZA) 2.0 DECLARATION OF HEAD OF FINANCE The National Board of Accountants and Auditors (NBAA) under power conferred by the Auditors and Accountants (Registration) Act. No. 33 of 1972, as amended by Act No. 2 of 1995, requires financial statements to be accompanied with a Statement of Declaration issued by the Head of Finance responsible for the preparation of financial statements of the entity concerned. It is the duty of a professional accountant to assist the Board of Directors to discharge the responsibility of preparing financial statements of an entity (project) showing true and fair view of the project transactions. Full legal responsibility for financial statements rests with the Board of Directors. 1, Renata C. Ndege, being the Head of Finance of Tanzania Electric Supply Company Limited hereby acknowledge my responsibility of ensuring that financial statements of Tanzania - Zambia Transmission Interconnector Project (TAZA) for the year ended 30 June 2021 have been prepared in accordance with Guidelines on Annual Financial Reporting and Auditing of World Bank Projects. 1, thus, confirm that the financial statements comply with guidelines on annual financial reporting and auditing of World Bank projects as on that date and that they have been prepared based on properly maintained financial records. Signed by: Renata C. ege Position: Chief Financial Officer NBAA Membership No. FCPA 1721 Date: 23 -1 P-2011 5 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 3.0 INDEPENDENT REPORT OF THE CONTROLLER AND AUDITOR GENERAL Managing Director, Tanzania Electric Supply Company Ltd, P.O. Box 453, Dodoma. 3.1 REPORT ON THE AUDIT OF SPECIAL PURPOSE FINANCIAL STATEMENTS Opinion I have audited the special purpose financial statements of Tanzania Zambia Transmission Interconnector Project (TAZA), which comprise the statement of cumulative receipts and payments as at 30 June 2021, and the statement of receipt and payment for the year then ended, as well as notes to the financial statements, including a summary of significant accounting policies. In my opinion, the accompanying special purpose financial statements present fairly, in all material respects, the cumulative receipts and payments of Tanzania Zambia Transmission Interconnector Project (TAZA) as at 30 June 2021, and its receipts and payments for the year then ended in accordance with cash basis accounting and guidelines on annual financial reporting and auditing of World Bank Projects. Basis for Opinion I conducted my audit in accordance with International Standards of Supreme Audit Institutions (ISSAls). My responsibilities under those standards are further described in the section below entitled, "Responsibilities of the Controller and Auditor General for the Audit of the Financial Statements". I am independent of Tanzania Zambia Transmission Interconnector Project (TAZA) in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) together with the National Board of Accountants and Auditors (NBAA) Code of Ethics, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Emphasis of Matter I draw attention to Note 1(a) of the special purpose financial statements that describe the basis of accounting. The special purpose financial statements are prepared to provide information to the World Bank, Agence Franqais de Development and the Government of Tanzania. As a result, the statements may not be suitable for other purposes. My opinion is not modified in respect of this matter. 6 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 TANZANIA ELECTRIC SUPPLY COMPANY LIMTED TANZANIA ZAMBIA TRANSMISSION INTERCONNECIOR PROJECT (TAZA) Key Audit Matters Key audit matters are those matters that, in my professional judgment were of most significance in my audit of the financial statements of the current period. I have determined that there are no key audit matters to communicate in my report. Other Information Management is responsible for the other information. The other information comprises the Report of Management, Statement of Management responsibilities and the Declaration by the Head of Finance but does not include the financial statements and my audit report thereon. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. If based on the work I have performed on the other information I obtained prior to date of this report, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the special purpose financial statements in accordance with Cash Basis of Accounting, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company's financial reporting process. Responsibilities of the Controller and Auditor General for the Audit of the Financial Statements My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISSAI will always detect a material misstatement when it exists. Misstatements can arise from fraud 7 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISSAls, I exercise professional judgment and maintain professional skepticism throughout the audit. I also: * Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. * Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. * Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. * Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my audit report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my audit report. However, future events or conditions may cause the entity to cease to continue as a going concern. * Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide those charged with governance with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, I determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. I describe these matters in my audit report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. 8 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 TANZANIA ELECTRIC SUPPLY COMPANY LIMITED TANZANIA ZAMBIA TRANSMISSION INTERCONNECTOR PROJECT (TAZA) In addition, Sect. 10 (2) of the Public Audit Act, Cap 418 (R.E 2021) requires me to satisfy myself that, the accounts have been prepared in accordance with the appropriate accounting standards. Further, Sect. 48(3) of the Public Procurement Act 2011 (as amended in 2016) requires me to state in my annual audit report whether or not the audited entity has complied with the provisions of the Law and its Regulations. 3.2 REPORT ON COMPLIANCE WITH LEGISLATIONS Compliance with the Public Procurement Act, 2011 (as amended in 2016) Subject matter: Compliance audit on procurement of works, goods and services I performed a compliance audit on procurement of works, goods and services in the TANESCO - Tanzania Zambia Transmission Interconnector Project (TAZA) for the financial year ended 30 June 2021 as per the Public Procurement Act, 2011 and its Regulations of 2013 (as amended in 2016). Conclusion Based on the audit work performed, I state that procurement of works, goods and services of TANESCO- Tanzania Zambia Transmission Interconnector Project (TAZA) is generally in compliance with the requirements of the Public Procurement Act, 2011 and its underlying Regulations of 2013 (as amended in 2016). Charles E. Kichere Controller and Auditor General Dodoma, United Republic of Tanzania December 2021 9 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 TANZANIA ELECTRIC SUPPLY COMPANY LIMITED TANZANIA ZAMBIA TRANSMISSION INTERCONNECTOR PROJECT (TAZA) 4.0 SPECIAL PURPOSE FINANCIAL STATEMENTS STATEMENT OF CUMULATIVE RECEIPTS AND PAYMENTS AS AT 30 JUNE 2021 Note 30 JUNE 2021 30 JUNE 2020 SDR'000 SDR'000 Cumulative Receipts Funds received from Financiers 2 8,003 8,003 Funds received from GOT/TANESCO 2 238 179 Forex loss 8 (277) - Total cumulative Receipts 7,964 8,182 Cumulative Payments Transmission Infrastructure Extension - - Interconnection Readiness and CMS - PIS and CB 5 161 - Resettlement/ Compensation 6 238 179 Total cumulative payments 399 179 Fund Balance as at 30 June 7 7,565 8,003 Project Financial Statements were approved and signed by TANESCO Managing Director: Mag*ge Chande Date Manag"g Director - TANESCO 10 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 STATEMENT OF RECEIPTS AND PAYMENT FOR THE YEAR ENDED 30 JUNE, 2021 Notes 30 JUNE 2021 30 JUNE 2020 SDR'000 SDR'000 Receipts Opening Balance 7 8,003 Funds received from Financiers 2 - 8,003 Funds received from GOT/ TANESCO 2 59 179 Forex loss 8 (277) Total Receipts 8, Payments Transmission Infrastructure Extension 3 Interconnection Readiness and CMS 4 - Project Implementation Support and CB 5 161 Resettlement/ Compensation 6 59 179 Total payments 220 179 Net available cash as at 30 June 7,565 8,003 Represented by: WB Designated Special account - BOT 7,565 8,003 Net available cash as at 30 June 7,565 8,003 11 Controller and Auditor General AR/PAITAZA/TANESCO/2020/21I NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Accounting These Special purpose financial statements are prepared by the management of the Project on cash basis of accounting and in accordance with Guidelines on Annual Financial Reporting and Auditing of World Bank Projects. The Financial Statements prepared under the cash basis to provide readers with information about the sources of cash raised during the period, the purpose for which cash was used and the cash balances at the reporting date. (b) Foreign Currency Translation Transactions in other currencies during the year are converted into Special Drawing Right (SDR) at the rates of exchange ruling at the transaction dates. Monetary assets and liabilities at the balance sheet date which are denominated in other currencies are translated into SDR at rates ruling at the closure date of projects books of accounts. Therefore, for the financial year ended 30 June, 2021, the rate used for converting was TZS 3,300.5946/SDR that was obtained from BOT website on 30 June, 2021. (c) Receipts and Payments Receipts and payments are recognized in the accounts in the period they are received and paid respectively. Receipts comprise funds received from financier and direct payments made by financier to suppliers/consultants. Receipts from financier are recognized in the books of account when received (that is when credited in the Tanzania Zambia Transmission Interconnector Project designated bank accounts). Direct payments made by financier to suppliers/consultants are also recognized as receipts and payments when paid to third parties and confirmed in writing by the financiers. (d) Plant and Equipment Plant and equipment purchased under this financing facility are capitalized in the accounts of TANESCO and are accounted for as expenditure in these special purpose financial statements in the period of acquisition. (e) Cash at Bank and in Hand This comprises cash in hand and at bank. 12 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 2 FUNDS RECEIVED FROM WB, AFD, EU, GOVERNMENT & TANESCO These are the funds received from financier and direct payments made by financier to consultant/ supplier/Contractors 30 JUNE 2021 30JUNE 2020 SDR'000 SDR'000 Cumulative Receipt Funds received from WB 8,003 8,003 Funds received from AFD Funds received from EU Funds received from GOT ETANESCO 238 179 Forex loss (277) Total Funds received 7,964 8,182 30JUNE 2021 30JUNE 2020 SDR'000 SDR'000 Annual Receipt Opening balance 8,003 Funds received from WB - 8,003 Funds received from AFD - Funds received from EU - - Funds received from GOT EtTANESCO 59 179 Forex loss (277) Total Funds received 7,785 8,182 3 TRANSMISSION INFRASTRUCTURE EXTENSION Extension of Transmission Lines infrastructure from Iringa to Sumbawanga and Associated substations divided into three sections as follows; i. Construction of 400kV Double Circuit 616km Transmission Line from Iringa via Kisada, Mbeya, Tunduma to Sumbawanga. ii. Construction of 400/220/33kV Grid Substations in Iringa, Kisada Mbeya and Tunduma, and 400/220/66/33kV substation in Sumbawanga. iii. Construction of Tunduma 400/33kV auto-transformation switchgear and 4km of 330kV Transmission Line (constructed at 400kV, but energized at 330kV) from the new Tunduma 400/220/33kV substation to the border with Zambia to connect to the Zambian 330kV grid. No expenditure of transmission infrastructure extention incurred during the reporting period since the project is still in preparatory pre-construction phase. The consultant, M/S SWECO International AB, was contracted in January, 2020 for provision of consultancy services for reviewing and updating the Feasibility Study and undertaking full conceptual Design of the 13 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 project, and also preparation of EPC Bidding documents as welt as TOR for procurement of supervision and management consultant 4 INTERCONNECTION READINESS AND CMS TANESCO Transmission System Readiness for Interconnection, and Corporate Commercial Management Improvements. This involves technical assessment of TANESCO Transmission system to identify gaps in meeting the requirements for the operational integration in the SAPP and EAPP for reinforcement purposes, and support of integration of business system as part of corporate management system. No expenditure of Interconnection Readiness and CMS incurred during the reporting period since the project is still in preparatory phase. 5 PROJECT IMPLEMENTATION SUPPORT AND CAPACITY BUILDING (PIStCB) This sub-component includes consultancy service for the project management and supervision, training and other capacity building activities to prepare TANESCO for operating in a trading environment with the SAPP and EAPP. 30 JUNE 2021 30 JUNE 2020 SDR'000 SDR'000 Cumulative Consultancy services SWECO International 109 Kurrent Technology 38 Elizabeth Aisu 14 Training and Capacity Building - 161 Annual SDR'000 SDR'000 Consultancy services SWECO International 109 Kurrent Technology 38 Elizabeth Aisu 14 Training and Capacity Building - 161 6 RESETTLEMENT/ COMPENSATION Environmental and Social Management Plan (ESMP) and Resettlement Action Plan (RAP). This consists of the implementation of the agreed mitigation measures and compensation to people affected by the project. Reported expenditures are the cost of preliminary activities of ESMP and RAP since the project is still in the preparatory phase. The Elizabeth J. AISU was contracted on 28 October 2019 for provision of consultancy services for Preparation of the Resettlement Action Plan (RAP) of the transmission line and substation. 14 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21 30JUNE 2021 30 JUNE 2020 Cumulative SDR'000 SDR'000 Resettlement/Compensation 238 179 238 179 Annual Resettlement/Compensation 59 179 59 179 7 CASH AT BANK AND IN HAND Cash at Bank are Cash Deposited at Bank of Tanzania by World Bank to finance project since the World Bank finance the project through advance method of disbursement. Total Cash Balance as at 30 June 2021 is SDR 7,564,592.58 which equivalent to USD 10,806,560.83. 30 JUNE 2021 30 JUNE 2020 SDR'000 SDR'000 Project Designated Special account- BOT 7,565 8,003 7,565 8,003 8 FOREIGN EXCHANGE LOSS Foreign exchange loss arises from translation United States Dollar to World Bank Special Drawing Right (SDR) as a reporting currency. World Bank fund deposited at Bank of Tanzania to finance project. The value of United States Dollar (USD) decrease against World Bank Special Drawing Right (SDR) in this reporting period. Balance at 30 June 2020 (USD) Rate Conversion date Forex value (SDR) Opening balance 11,030,480.00 0.73 30 June, 2020 8,002,730.00 Payments 223,919.17 Spot Rate 161,298.74 Closing balance 10,806,560.83 7,841,431.26 0.70 30 June 2021 7,564,441.25 Loss 276,990.01 15 Controller and Auditor General AR/PA/TAZA/TANESCO/2020/21