The World Bank Tarbela Fourth Extension Hydropower Project (P115893) REPORT NO.: RES51043 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF TARBELA FOURTH EXTENSION HYDROPOWER PROJECT APPROVED ON MARCH 20, 2012 TO ISLAMIC REPUBLIC OF PAKISTAN ENERGY & EXTRACTIVES SOUTH ASIA Regional Vice President: Hartwig Schafer Country Director: Najy Benhassine Regional Director: Guangzhe Chen Practice Manager/Manager: Simon J. Stolp Task Team Leader(s): Mats Johan Rikard Liden, Gunjan Gautam The World Bank Tarbela Fourth Extension Hydropower Project (P115893) I. BASIC DATA Product Information Project ID Financing Instrument P115893 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 20-Mar-2012 30-Jun-2022 Organizations Borrower Responsible Agency Water and Power Development Authority Islamic Republic of Pakistan (WAPDA),National Transmission and Despatch Company (NTDC) Project Development Objective (PDO) Original PDO The Objective of the Project is to facilitate a sustainable expansion of the Borrower 's electricity generation capacity. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed COFN-C1550 27-Sep-2016 18-Jan-2017 11-Aug-2017 30-Jun-2022 300.00 37.67 262.33 IBRD-86460 20-Sep-2016 18-Jan-2017 11-Aug-2017 30-Jun-2022 390.00 48.24 341.76 IBRD-81440 20-Mar-2012 12-Apr-2012 27-Apr-2012 31-Dec-2019 400.00 400.00 0 IDA-50790 20-Mar-2012 12-Apr-2012 27-Apr-2012 30-Jun-2022 324.93 210.18 78.45 The World Bank Tarbela Fourth Extension Hydropower Project (P115893) Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES 1. This restructuring is to request extension of the Closing Date of IBRD Loan-86460 to May 31, 2024, in response to the request received from the Water and Power Development Authority (WAPDA), via Ministry of Economic Affairs on February 11, 2022. This will be the first extension of the IBRD Loan-86460, for a period of 23 months. The current Closing Date of this loan is June 30, 2022. 2. Tarbela Fourth Extension Hydropower Project (P115893) (or “the Project”) comprises of: (i) US$ 400 million in IBRD Loan-81440 (fully disbursed and closed) and Standard Drawing Rights (SDR) 283.7 million in IDA Credit-50790, approved by the World Bank on March 20, 2012, to support: a 1410 Megawatt (MW) Tarbela Fourth Extension Hydropower Project (T4HP) in Tunnel 4 of the Tarbela Dam as well as associated social action plan, environmental management plan, project and construction management and supervision, and evaluation of project’s impacts. IBRD Loan and IDA Credit also finance technical assistance; trainings; and preparation of strategic projects. SDR 81.9 million was cancelled from IDA Credit as there were savings in the key contracts. (ii) US$390 million in IBRD Loan-86460, approved by the World Bank as additional financing on September 20, 2016, and US$300 in co-financing from the Asian Infrastructure Investment Bank (AIIB), AIIB COFN-C1550, approved by the AIIB on September 27, 2016, to support: a 1530 MW Tarbela Fifth Extension Hydropower Project (T5HP) in Tunnel 5 of the Tarbela Dam and a 500 kilo-Volt (kV) switch yard. Additionally, IBRD Loan-86460 finances a 500 kV transmission line from the switchyard to Islamabad West substation; social and environmental management plans; project and construction management and supervision; and evaluation of project’s impacts; technical assistance; future project preparation; and a pilot project with floating solar plant in the Tarbela Reservoir. 3. The Project’s progress towards achievement of the Project Development Objective (PDO), “to facilitate a sustainable expansion of Pakistan’s electricity generation capacity,” is satisfactory; and the overall implementation progress is also satisfactory. The Project’s environmental and social performance, procurement and financial management performance, and project management are all rated satisfactory. (i) T4HP was commissioned in 2018 and has since generated over 13,000 Giga Watt-hours (GWh) of sustainable energy. The generation from T4HP started on schedule and the plant was completed with cost savings of 10 percent, which is rare for a large hydropower project. (ii) In T5HP, the key contractors for civil works and electro-mechanical works have been mobilized. Under civil works, a total of 755,000 cubic meter was already excavated from the intake and powerhouse sites by the end of February 2022. (iii) The contract for 500kV transmission line has been awarded by the National Transmission and Despatch Company (implementing agency for the transmission line). The World Bank Tarbela Fourth Extension Hydropower Project (P115893) (iv) WAPDA (implementing agency for T4HP and T5HP) is coordinating with T5HP contractors to explore the design options for around 25 MW floating solar pilot project in the Tarbela Reservoir. Furthermore, the Project has supported preparatory studies for a 150 MW floating solar plant in the Headpond of Ghazi Barrage and a 150 MW floating solar plant in the Forebay of Ghazi Barotha Hydropower Station. These plants are being proposed for the World Bank financing through the Floating Solar in Pakistan Project (P176308), which is under preparation. 4. The extension of the IBRD Loan Closing Date is necessary to support the construction of T5HP, 500kV switchyard and transmission line, and the floating solar pilot project. In future, a second extension of the Closing Date will be required to complete T5HP and the specific extension period will be determined based on construction progress. Project implementation was delayed earlier due to delays in procurement of key contracts. The procurement issues have been resolved, and the contractors and the construction supervision consultant are mobilized. The Closing Date of the Co-financing Agreement with the AIIB is linked with the IBRD Loan Closing Date, and thus it will also be extended to May 31, 2024. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications COFN-C1550 Effective 30-Jun-2022 31-May-2024 30-Sep-2024 30-Jun-2019, 31-Dec- IBRD-81440 Closed 31-Dec-2018 2019, 04-May-2020 IBRD-86460 Effective 30-Jun-2022 31-May-2024 30-Sep-2024 30-Jun-2019, 31-Dec- IDA-50790 Effective 31-Dec-2018 2019, 30-Jun-2022