Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004645 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-46170) ON A CREDIT IN THE AMOUNT OF SDR 80.7 MILLION (US$120.0 MILLION EQUIVALENT) TO THE REPUBLIC OF MALI FOR A Mali Energy Support Project March 20, 2019 Energy & Extractives Global Practice Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective December 31, 2018, Monthly average) Currency Unit = CFAF (CFA Francs) US$1 = CFAF 572.89 SDR 1 = US$1.39 FISCAL YEAR July 1 – June 30 Regional Vice President: Hafez M. H. Ghanem Country Director: Soukeyna Kane Senior Global Practice Director: Riccardo Puliti Practice Manager: Charles Joseph Cormier Task Team Leader(s): Franklin Koffi S.W. Gbedey ICR Main Contributor: Nestor Ntungwanayo ABBREVIATIONS AND ACRONYMS ADSCR Annual Debt Service Coverage Ratio BOAD West African Development Bank (Banque Ouest-Africaine de Développement) CAS Country Assistance Strategy CFL Compact Fluorescent Lamp CREE Water and Electricity Regulatory Commission (Commission de Régulation d’Eau et d'Electricité) EDM-SA Water and Electricity Utility (Energie du Mali-Société Anonyme) EIRR Economic Internal Rate of Return ENPV Economic Net Present Value EPV Economic Present Value ESMF Environment and Social Management Framework FCV Fragility, Conflict and Violence FIRR Financial Internal Rate of Return FM Financial Management FNPV Financial Net Present Value FOCC Financial Opportunity Cost of Capital GDP Gross Domestic Product GHG Greenhouse Gas GoM Government of Mali GPRSF Growth and Poverty Reduction Strategy Framework HFO Heavy Fuel Oil HV High Voltage ISN Interim Strategy Note ISR Implementation Status and Results Report LLCR Loan Life Cover Ratio LV Low Voltage MTEF Medium-Term Expenditure Framework MV Medium Voltage LED Light Emitting Diode MEE Ministry of Energy and Water Resources OMVS Organization for the Senegal River Development (Organisation pour la Mise en Valeur du Fleuve Sénégal -OMVS) PAD Project Appraisal Document PASE Energy Sector Project PCU Project Coordination Unit PDO Project Development Objective PIU Project Implementation Unit RPP Revenue Protection Program SCADA Supervisory Control and Data Acquisition SEMAF Manantali and Félou Energy Management Company (Société d'exploitation de Manantali et Félou) SOGEM Manantali Energy Management Company (Société de Gestion de l 'Energie de Manantali) TA Technical Assistance TTL Task Team Leader TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) .......................................9 II. OUTCOME .................................................................................................................... 11 A. RELEVANCE OF PDOs ............................................................................................................ 11 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 12 C. EFFICIENCY ........................................................................................................................... 19 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 21 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 21 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 23 A. KEY FACTORS DURING PREPARATION ................................................................................... 23 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 25 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 26 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 26 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 27 Fiduciary Compliance................................................................................................................ 27 C. BANK PERFORMANCE ........................................................................................................... 28 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 29 V. LESSONS AND RECOMMENDATIONS ............................................................................. 30 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 33 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 48 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 51 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 52 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 61 ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 69 The World Bank Mali Energy Support Project (P108440) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P108440 Mali Energy Support Project Country Financing Instrument Mali Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Cellule de Coordination de Projet (CCP) Eenrgie du Mali (EDM-SA) Project Development Objective (PDO) Original PDO The objective is to improve the access and efficiency of electricity services in Bamako and in other targeted areas in the country. Revised PDO The objective is to improve the access and efficiency of electricity services in Bamako and in other targeted areas in the country. Page 1 of 69 The World Bank Mali Energy Support Project (P108440) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 120,000,000 92,122,298 92,183,795 IDA-46170 Total 120,000,000 92,122,298 92,183,795 Non-World Bank Financing 0 0 0 Borrower/Recipient 0 0 0 Total 0 0 0 Total Project Cost 120,000,000 92,122,298 92,183,795 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 18-Jun-2009 25-Nov-2009 04-Feb-2013 30-Sep-2014 30-Jun-2018 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 27-Aug-2013 17.04 Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Cancellation of Financing Reallocation between Disbursement Categories Change in Institutional Arrangements Change in Implementation Schedule 25-Jun-2015 73.07 Change in Loan Closing Date(s) 20-Jun-2016 88.07 Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Change in Implementation Schedule KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Substantial Page 2 of 69 The World Bank Mali Energy Support Project (P108440) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 18-Dec-2009 Satisfactory Satisfactory 0 02 29-Jun-2010 Satisfactory Satisfactory 1.04 03 28-Mar-2011 Satisfactory Satisfactory 1.57 04 23-Dec-2011 Moderately Satisfactory Moderately Satisfactory 6.71 Moderately 05 11-Jul-2012 Moderately Unsatisfactory 7.41 Unsatisfactory Moderately 06 25-Mar-2013 Moderately Unsatisfactory 12.76 Unsatisfactory Moderately 07 29-Nov-2013 Moderately Unsatisfactory 21.43 Unsatisfactory 08 25-May-2014 Moderately Satisfactory Moderately Satisfactory 32.54 09 12-Dec-2014 Moderately Satisfactory Satisfactory 57.95 10 29-Jun-2015 Satisfactory Satisfactory 73.07 11 10-Feb-2016 Satisfactory Satisfactory 84.03 12 16-Nov-2016 Satisfactory Satisfactory 90.42 13 01-Jun-2017 Satisfactory Satisfactory 90.63 14 25-Jan-2018 Satisfactory Satisfactory 91.21 SECTORS AND THEMES Sectors Major Sector/Sector (%) Energy and Extractives 100 Public Administration - Energy and Extractives 6 Energy Transmission and Distribution 89 Other Energy and Extractives 5 Page 3 of 69 The World Bank Mali Energy Support Project (P108440) Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Private Sector Development 20 Jobs 20 Job Creation 20 Urban and Rural Development 79 Urban Development 58 Urban Infrastructure and Service Delivery 20 Services and Housing for the Poor 38 Rural Development 21 Rural Infrastructure and service delivery 20 Land Administration and Management 1 Environment and Natural Resource Management 2 Renewable Natural Resources Asset Management 2 Biodiversity 1 Landscape Management 1 ADM STAFF Role At Approval At ICR Regional Vice President: Obiageli Katryn Ezekwesili Hafez M. H. Ghanem Country Director: Habib M. Fetini Soukeyna Kane Senior Global Practice Director: Inger Andersen Riccardo Puliti Practice Manager: Subramaniam Vishwanathan Iyer Charles Joseph Cormier Task Team Leader(s): Koffi Ekouevi Franklin Koffi S.W. Gbedey ICR Contributing Author: Nestor Ntungwanayo Page 4 of 69 The World Bank Mali Energy Support Project (P108440) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. Mali faced major challenges in the energy sector at project appraisal. The following challenges needed to be addressed in the energy sector: (a) the provision of an adequate supply of electricity to meet a growing demand of about 10 percent per year; (b) the restructuring of the power utility (Water and Electricity Utility [Energie du Mali-Société Anonyme, EDM-SA]) to transform the enterprise into a financially viable and operationally efficient firm; (c) the timely implementation of electricity interconnections with neighboring countries; and (d) a sustained expansion of access to energy services in rural, peri-urban, and urban areas. 2. Transmission and distribution networks around Bamako were saturated and needed to be upgraded. The lack of investment in the transmission and distribution networks around Bamako was a major constraint to meeting a growing demand for electricity services. The existing power stations and lines were saturated and could no longer transmit enough energy to consumers, and the case would worsen in a situation whereby additional electricity capacity is generated. 3. Improving the financial viability and operational efficiency of EDM-SA was central to modernizing the energy sector. A Government plan to reform the utility included the following pillars: (a) a program to have better control of operating costs, (b) an aggressive effort to improve collections and fight fraud and corruption, (c) a tariff adjustment proposal to improve liquidity, (d) the strengthening of managerial and technical capacities, and (e) an investment program. 4. Least-cost energy for Mali meant to facilitate the completion of the high voltage (HV) interconnection lines with neighboring countries. Multiple initiatives had been launched and included the following: (a) there were negotiations to secure financing of a transmission line in northern Côte d’Ivoire to allow power exports to Mali of up to 200 MW; (b) the construction work on the Côte d’Ivoire-Mali interconnector had started in Mali, under the financing of a consortium of bilateral and multilateral financiers; (c) the World Bank was preparing an additional financing to support the construction of the Félou hydroelectric plant, providing Mali with more access to lower cost hydroelectric power from the Organization for the Senegal River Development (Organisation pour la Mise en Valeur du Fleuve Sénégal -OMVS) system; and (d) another important regional interconnection project was the West African Power Pool Interconnection Project (P094916), supported by the European Investment Bank, and intended to supply Mali with an additional 80 MW. 5. With an overall energy access rate of 17 percent at appraisal (2009), prospects toward access expansion required energy efficiency in rural, peri-urban, and urban areas: There were opportunities for both grid-based and decentralized programs to expand access to energy services. It was expected that reinforcement of EDM-SA’s transmission and distribution networks would create important grid-based opportunities to scale up energy access expansion in the country. This would not only ensure that an increasing number of connections are made to households, but also that energy services would enable competitiveness of small and medium enterprises and social programs, thus Page 5 of 69 The World Bank Mali Energy Support Project (P108440) facilitating the achievement of the Millennium Development Goals. To that end, the Government of Mali (GoM) prepared an energy sector policy letter that laid out the main axis of an ambitious energy access expansion program. 6. The project intended to create synergy with other local and regional power initiatives and to promote shared growth. The project was to contribute to the process of unleashing Mali’s industrialization and economic growth by extending electricity services to areas with agribusiness potential, including part of the Niger River Irrigation Office area. The extension and reinforcement of EDM-SA transmission and distribution networks must be done to allow Mali to fully capitalize on the additional thermal capacity under construction, and the expected gas-generated power from Côte d’Ivoire. The World Bank’s involvement in the Energy Support Project aimed to help the Government of Mali improve the access and efficiency of electricity services to support shared growth and competitiveness of the economy. The project intended to provide electricity services to areas currently receiving inadequate or nonexistent electricity supply. Theory of Change (Results Chain) 7. Causality. The project activities are consistent with the Project Development Objective (PDO) of improving the access and efficiency of electricity services in Bamako and in other targeted areas of the country. Generated outputs feed logically into the intermediate and long-term outcomes of the project. The key expected long-term outcomes were (a) higher quantity and quality of HV electricity delivered to the country’s network, (b) higher quality of electricity service to more people in Bamako and in regional centers, (c) improved efficiency in the electricity and sector networks, and (d) improved and efficient management of the electricity sector. Table 1 illustrates the extent to which the planned interventions contributed to generating the expected outputs, the latter paving the way to achieving the targeted outcomes and the long-term goals. 8. Attribution: The key outcomes achieved at project closing are principally attributable to: (i) this project as it funded the major part of the rehabilitation of the country’s electricity network, including part of the upgrading of the transmission and distribution network in Bamako, and the progress made in the capacity building in the energy utility and sector; (ii) the Government’s effort to sustain the electricity network through major subsidies, and the oversight of the electricity sector, and (iii) finally EDM-SA due to its daily maintenance of the electricity network and the planning of its development. Without the Bank’s project, few donors were available to provide a sim ilar support, given the political context that prevailed in Mali during the period of project implementation. While the African Development Bank, the Agence Française de Développement, and the West African Development Bank (BOAD) were present and engaged in the country’s energy sector, they were not active on the transmission and distribution network of the metropolitan Bamako and regional urban centers, mainly because of security concerns. 9. Counterfactuals: Without this project, the upgrading of the transmission and distribution networks and the improvement of electricity supply in Bamako, and in the regional urban centers of the country would not have occurred. Similarly, technical capacity in the electricity sector would not have been enhanced during the period of project implementation. 10. Critical assumptions: Achievement and sustainability of achieved project outcomes would be contingent upon an improved political environment that will create the conditions of continued maintenance of completed infrastructure, and sustained investment to strengthen further the efficiency and expansion of the electricity infrastructure. Page 6 of 69 The World Bank Mali Energy Support Project (P108440) Table 1. Results Chain of the Project Activities Outputs Outcomes Long-term Outcomes ▪ Project Objective: To improve the access and efficiency of electricity services in Bamako and in other targeted areas of the country. ▪ Critical assumptions: (i) Political stability and availability of resources, (ii) Continued maintenance and investment in the electricity sector and utility. Rehabilitation and Upgrading of the Transmission Network The 150-kV electric line Increased power delivery to • Doubling of the 150kV doubled Higher quantity and the stations in Bamako and Kodialani/Sirakoro electric line, quality of HV The 150-kV electric line regional urban centers; • Rehabilitation of the 150 kV electricity delivered Bamako/Fana/Segou electric line, rehabilitated Improved operating to the country’s • Upgrading of the HV transit network The HV transit system efficiency of transmission system at the Fana station upgraded system; • Upgrading of the Kalabancoro station, and the SOGEM station of Bamako stations Upgraded Kodialani Reinforcement and Extension Substations constructed, of the distribution Network rehabilitated, and upgraded in the Bamako, and in Increased number of • Reinforce 30 KV facilities in regional urban centers; connections and beneficiaries Higher quality of Bamako; electricity service to in Bamako and in selected • Upgrade and reinforce low and Underground electric more people in regional centers medium voltage distribution distribution lines were laid Bamako, and in networks in Bamako regional centers Electrification completed in • Reinforce medium and low Bamako and in regional voltage distribution centers networks in areas of, among other, Kati, Segou, Energy Mopti, Kayes, and Efficiency Sikasso and Demand-side Koutiala Management Public Lighting installed Improved commercial • To implement a program to Electricity meters installed; efficiency of EDM-SA Improved efficiency in replace incandescent light bulbs by the electricity sector compact fluorescent lamps (CFLs) Solar products delivered; networks • To introduce energy efficient Improved financial efficiency products and implement public of EDM-SA; CFLs installed. awareness programs. Government and EDM-SA Capacity and Institutional management staff, Strengthening of Key Sector procurement, financial Improved capacity in the Institutions management agents Government entiies trained; • Implement the Restructuring Plan overseeing the energy sector Improved and efficient and build capacity in the PIU; management of the EDM-SA information • Enhance the capacity of the systems modernized; Improved commercial and electricity sector financial EDM-SA; MEW; EDM-SA capacity building provided; Page 7 of 69 The World Bank Mali Energy Support Project (P108440) Project Development Objectives (PDOs) 11. As per the Financing Agreement on page 7, “the objective of the Project is to improve the access and efficiency of electricity services in Bamako and in other targeted areas of the country”. The original outcomes and outcome indicators identified at appraisal are detailed below. Table 2. Key Expected Outcomes and Outcome Indicators The objective of the Project is to improve the access and efficiency of electricity services in Bamako and in other targeted areas of the country Expected outcomes Outcome Indicators Improved electricity access in the Increase in the number of households connected to electricity provided by EDM capital city of Bamako, and in targeted SA in Bamako from 252,000 to 382,000 households; urban centers in the country Increase in the number of households connected to electricity provided by EDM SA in other targeted areas of the country from 131,000 to 182,000 households. Improved efficiency in the electricity Reduction of technical losses from 12 percent to 10 percent; transmission and distribution networks Reduction of non-technical losses from 7 percent to 5 percent; Peak load reduction from energy efficiency investments from zero to 20 MW. Components 12. The project components at appraisal were as follows: Component 1: Transmission and distribution reinforcement and extension (projected cost of US$107.0 million). Key activities under this component aimed to: (i) upgrade the electricity transmission line between Segou and Bamako, (ii) reinforce 30 KV facilities in the peripheral area of Bamako, including the 150 KV loop, (iii) upgrade and reinforce low and medium voltage distribution networks in Bamako, (iv) reinforce medium and low voltage distribution networks in areas of Kati, Segou, Kayes, Mopti, Sikasso and Koutiala, and (v) connect to the main grid the localities of Ouléssébougou and Kangaba. Component 2: Energy efficiency and demand-side management (projected cost of US$5.0 million). Planned activities aimed to implement three programs as follows: (i) a residential lighting program to replace incandescent or neon light bulbs with compact fluorescent lamps (CFLs), in urban and rural households; (ii) a street lighting program to replace incandescent or neon light bulbs by CFLs and/or high pressure sodium vapor lamps, in key urban and rural centers, and (iii) a public facilities’ lighting program to replace incandescent light bulbs by CFLs. The second series of activities aime d to develop an overall energy efficiency strategy and regulatory framework to introduce energy efficient products and implementation of related public awareness programs. Component 3: Capacity building and institutional strengthening of key energy sector institutions (projected cost of US$8.0 million). Activities under this component aimed to implement three programs as detailed below: (i) a program to improve the Project Implementing Entity’s operational and financial performance through: (a) the implementation of the Restructuring Plan; and (b) capacity building, (ii) a program to enhance the capacity of the MEW to assess, monitor, Page 8 of 69 The World Bank Mali Energy Support Project (P108440) evaluate and make recommendations with regard to, energy sector strategy development and planning, governance, environmental and social safeguards, and public dissemination activities, and finally (iii) a program to enhance the capacity of CREE to improve its regulatory tasks with regard to the electricity and water sectors. B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) Revised Outcome Targets 13. In August 2013, the project underwent a Level 2 restructuring, which left the original PDOs unchanged, but triggered changes in the scope of the outcome indicators as presented in table 2. PDO targets were scaled down following the reduction of the resources devoted to expanding the transmission and distribution network. Revised PDO Indicators 14. Table 3 compares the new outcome indicators to the original ones. Table 3. Comparison of PDO Indicators Before and After Restructuring The PDO is to improve the access and efficiency of electricity services in Bamako and in other targeted areas of the country. Expected Outcomes Original Outcome Indicators (2009) Revised Outcome Indicators (2013) Improved electricity • Increase in the number of households • Increase in the number of households access in the capital connected to electricity provided by EDM-SA connected to electricity provided by EDM-SA in city of Bamako, and in in Bamako from 252,000 households to Bamako from 252,000 to 350,000 households; targeted urban 382,000 households. • Increase in the number of households centers in the country • Increase in the number of households connected by EDM-SA outside Bamako from connected to electricity provided by EDM-SA 131,000 to 190,000 households; in other targeted areas of the country from • Number of project beneficiaries amounting to 131,000 households to 182,000 households. 285,950, of which 145,834 are female. Improved efficiency in • Reduction of technical losses from 12 percent • Total distribution losses on the interconnected the electricity to 10 percent; grid reduced to 13.7 percent. transmission and • Reduction of nontechnical losses from 7 • Peak load reduction from energy efficiency distribution networks percent to 5 percent; from 0 to 6.9 MW; • Peak load reduction from energy efficiency investments from 0 to 20 MW. Revised Components 15. Delays in project implementation and a political upheaval were some of the reasons for project restructuring. Following a political crisis in 2012 that led to the suspension of the World Bank’s portfolio in the country and delays in making progress in project implementation, a level 2 restructuring was approved in August 2013. During the restructuring process, the original project resources were reduced by 21 percent and all components were revised; and dropped activities were those that had not sufficiently advanced technically or those that did not have a compelling cost-benefit ratio. Page 9 of 69 The World Bank Mali Energy Support Project (P108440) • Component 1: Transmission and Distribution Reinforcement and Extension (from an original budget of US$102.0 million to US$81.0 million; actual cost of US$78.60 million). Due to recent developments in the electricity sector and increase in the estimated cost of the loop activity, two major investments were dropped from the project as follows: (a) the new 150 kV transmission lines to form a complete transmission loop around Bamako and (b) the connection to the main grid of three secondary centers. However, the program of works to upgrade and reinforce the transmission and distribution facilities around Bamako was to be expanded with targeted additional investments, even in the absence of a complete transmission loop around Bamako. • Component 2: Energy Efficiency and Demand-side Management (US$5.0 million; actual cost of US$4.66 million). Following a large penetration of compact fluorescent lamps (CFLs) in Mali, it was no longer relevant to jump-start the local CFL market. Responding to the borrower’s request, the procurement of addition al CFLs beyond the already procured 250,000 was discontinued, and funds were reallocated toward an expanded and revised street lighting program. • Component 3: Capacity and Institutional Strengthening of Key Sector Institutions (from an original budget of US$8 million to US$9.0 million; actual cost of US$9.46 million). In line with the borrower’s request, the restructuring reallocated resources for the preparation of a new sector investment master plan to provide the analytical and technical underpinnings for sector decision makers to plan future electricity investments based on a consistent least-cost development strategy. Other Changes 16. Additional changes included (a) the revision of the project implementation schedule; (b) the revision of the Results Framework to better capture the expected impact of the restructured project; (c) the consolidation of implementation arrangements; (d) the reallocation and cancellation of funds due to reduced project costs; and (e) the extension of the closing date by 15 months until December 31, 2015. Two additional restructurings took place in June 2015 and June 2016, whose goal was to extend the credit closing date by 18 months respectively to ensure implementation of all project activities by June 30, 2018. Rationale for Changes and their Implication on the Original Theory of Change 17. Changes aimed to adjust project implementation to the context on the ground. Key changes included the reduction of the scope of the project and extension in the implementation time line. The reduction of investment activities did not necessitate a change in the original PDOs and did not trigger new safeguard policies. 18. Changes did not have a significant impact on the original theory of change: The change in the Results Framework aimed to align the targets to a reduced level of resources, and to refine the nature and the realism of indicators that can more precisely document the project impact. It was positive that changes in the Results Framework were completed as early as August 2013, almost five years before the project closing date, with enough lead time to monitor the progress toward identified new targets. Page 10 of 69 The World Bank Mali Energy Support Project (P108440) II. OUTCOME A. RELEVANCE OF PDOs Rating: Substantial 19. The PDO aimed to improve the access and efficiency of electricity services in Bamako and in other targeted areas of the country and was unchanged throughout the project implementation period. At appraisal, the project was consistent with the World Bank’s parallel efforts to promote greater regional integration in the energy sector and was in line with Mali’s Growth and Poverty Reduction Strategy Framework (GPRSF) adopted in 2007 and its two main pillars: (a) developing infrastructure and strengthening productive sectors and (b) consolidating the public sector structural reform agenda. In addition, the project was in alignment with the 2007– 2011 Country Assistance Strategy (Report No. 61307 - ML) objectives to develop infrastructure, strengthen productive sectors, and consolidate the public sector structural reform agenda. 20. The PDO remained substantially relevant despite changes in the security context and the partnership framework. Starting 2012, there has been an unstable security context in Mali, and World Bank interventions were significantly influenced by the persistence of the conflict in the northern part of the country and were designed in the context of OP 7.30, dealing with de facto Governments. Because of the country’s situation caused by the 2012 political change, the World Bank’s portfolio was entirely restructured in the context of the 2013 Interim Strategy Note (Report No. 76233-ML). Similarly, this project was also restructured, and the Results Framework was revised to adjust to the developments on the ground. The ISN identified emergency activities that were grouped under three priority pillars. Priority Pillar 3 aimed to prepare the conditions for economic recovery. A key identified priority under this pillar was the restoration of the EDM-SA’s financial capacity to invest in the extension and modernization of electricity infrastructure and a major expected outcome was an increase in access to electricity in rural areas. There was consistency between the restructured project and Pillar 3 of the ISN. Moreover, the restructured project earmarked resources for the preparation of a new sector investment master plan to provide the analytical and technical underpinnings to plan for future electricity investments. 21. Throughout the period of project implementation, the country has been dealing with a simmering political conflict which culminated with the 2012 crisis. At closure, the country was still supported by one of the largest active UN peacekeeping operations. The Borrower did not have the required technical capacity to implement the project and was confronted to governance and institutional weaknesses, and this was a source of delays in the projection implementation, and the cancelation of a portion of the resources. Assessment of Relevance of PDOs and Rating 22. Overall, the relevance of the PDOs was substantially relevant until project closure . The PDOs remained relevant throughout project implementation, despite changes in the security context and in the partnership framework. Before the 2013 restructuring, the project was in line with the GPRSF and the CAS. The priorities identified in 2013 in the context of the new instrument to reengage with Mali (ISN) included the need for infrastructure rehabilitation and construction to prepare the conditions for economic recovery. However, because of the weak technical capacity to implement the project and the prevailing governance context, the overall relevance of the PDOs is rated Substantial. Page 11 of 69 The World Bank Mali Energy Support Project (P108440) B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome Objective 1: To improve access of electricity services in Bamako and in other targeted areas of the country Rating: High 23. The project funded a second circuit of the 150 kV Kodialani/Sirakoro transmission power line, the rehabilitation of the 150 kV Bamako-Fana-Ségou transmission power line, and the upgrading of the transmission system at the Fana substation. Achieved outputs include the following: ▪ The second circuit of the 150 kV Kodialani-Sirakoro power line over 23 km aimed at increasing transmission capacity and system availability, including 25 km of optical fiber and a supervisory control and data acquisition (SCADA) system. ▪ The rehabilitation of the 150 kV Bamako-Fana-Ségou power line, which included the renovation of the 221 km power line linking Bamako to Ségou and the setup of a tower at the Fana substation to ensure the feasibility of transmission lines. Other achievements included the installation of a 232 km optical fiber cable and accessories to secure transmission and availability of the electrical system. ▪ The upgrading of the transmission system at the Fana substation, which consisted of the installation of a set of 150 kV bars with a digital control system to improve the flexibility of use of the 150 kV Bamako-Fana- Ségou transmission line, secure transmission and availability of lines, including the supply and installation of HV and medium voltage (MV) equipment, and the Substation Control and Monitoring System. 24. Additional achievements at HV substations consisted of the upgrading of the Kalabancoro substation, and the Manantali Energy Management Company (Société de Gestion de L 'Energie de Manantali, SOGEM) substation of Kodialani. At the Kalabancoro substation, the key output was the expansion of the substation building, the fence construction, and the supply of HV and MV equipment with a new transformer 150/30 kV and 60 MVA, and HV control equipment. At the SOGEM substation of Kodialani, the key output was a renovated substation that received power from the existing 225/150/15 kV transformer from Société D'exploitation De Manantali Et Felou (SEMAF), and used to supply the feeders toward the Samaya, Nafadji, and Sébenikoro districts. 25. Five substations were either constructed/rehabilitated/upgraded in Bamako and the Kati urban center as detailed below: ▪ The rehabilitation of the Balkou substation (30/15 kV). The key output was an expanded substation with supplied equipment of two 20 MVA 30/15 kV transformers, new 30 kV/15 kV breakers, one 100 kVA generator, a digital control system, a telecommunication system, and an automatic voltage regulation system. ▪ The construction of the DCO substation (30/15 kV). The key achievement was a new substation with new equipment including two transformers 20 MVA 30/15 kV and new 30 kV and 15 kV metal-clad breakers, which replaced an old saturated substation, with increased transformation capacity for distribution and electricity security. Page 12 of 69 The World Bank Mali Energy Support Project (P108440) ▪ The renovation of the Badala substation (30/15 kV–30/0.4 kV). The key output was the construction of a new building and the installation of more efficient equipment to increase processing, distribution, and securing of the availability of electricity. ▪ The rehabilitation of the Sotuba substation (30/15 kV–30/0.4 kV). The key output was a renovated substation, which replaced an old and saturated substation and succeeded to reinforce the capacity of transformation, distribution, and securing of the availability of electricity. ▪ The construction of the Kati substation (30/15 kV). The key output was the construction and equipment of a new station, including two 20 MVA 30/15 kV transformers and new 30 kV/15 kV metal-clad breakers to reinforce distribution capacities and to secure the availability of the electricity system. Unfortunately, a fire destroyed a major part of the substation. On the positive side, the 2 acquired transformers were insulated from the fire, and the substation is currently operational using electricity generated by a private power producer located in the vicinity. The claim process to receive fire risk indemnity from insurance companies is under way. 26. Three underground power distribution lines were laid to link substations among them as described below: • The 30-kV underground power line linking the Kalabancoro and the Badala substations. The key output was the laying of two underground MV power lines among the two substations to strengthen the distribution and make their operations more flexible as follows: (a) a first underground power cable of 29.4 km in twisted aluminum MT and accessories, and 14 km of fiber-optic cable and (b) a second power line of 27.3 km twisted MT aluminum, and 13 km fiber-optic cable. • The 30-kV underground power line linking the Badala and the Balingué substations. The key output was an underground MV cable allowing intermediate positions to power each other, to strengthen the distribution, secure the availability of these positions, and make their operations more flexible. Supplied equipment comprised three cables as follows: (a) 11.7 km twisted aluminum cable, (b) 8.4 km unipolar aluminum cable and accessories, and (c) 5.65 km fiber-optic cable. • The 30-kV underground power line linking the Dar Salam/Balingué/Balkou substations. The key output was an underground MV cable allowing substations to power each other, to strengthen the distribution, secure the availability of these positions, and make their operations more flexible. Supplied equipment included (a) 12.1 km twisted MT aluminum cable and accessories, for the Dar Salam-Balingué link and (b) 15.6 km twisted aluminum cable for the Balingué-Balkou link with two 30 kV incoming/outgoing circuit breaker cells. 27. Electrification was deployed extensively in the Bamako and Kati neighborhoods as detailed in the following paragraphs. Key achievements included the extension of the MV/low voltage (LV) distribution network in the Bamako and Kati neighborhoods by the creation of new networks (laying of supports and cables and installation of MV/LV transformers or to electrify neighborhoods by MV networks and transformers as detailed in the following paragraphs). A total of 20,836 connections was completed in the neighborhoods of Bamako and Kati with the support of the project as detailed in table 3. A total of 285 km of MV lines and 865 km of LV lines was installed or rehabilitated to facilitate the electrification of neighborhoods of the Bamako metropolitan and regional urban centers. Page 13 of 69 The World Bank Mali Energy Support Project (P108440) 28. A total of 104 MV/LV transformers have been installed to facilitate the electrification of districts in the urban centers of the capital of Bamako and the localities of the (Kati) circle (Koulikoro region), as detailed in Table 4 below. Table 4. Electrification in Bamako and Kati Bamako and Kati Number of New Electrification Networks Completed Neighborhoods Connections Yirimadio, Sotuba, New MV/LV distribution network, including the supply, installation, and 3,900 Yirimadio Stade, commissioning of 12.34 km of MV lines, 43.89 km of LV lines, and 17 Sabalibougou, and MV/LV transformers. Titibougou Niamakoro and New MV/LV distribution network, including the supply, installation, and 8,350 Sokorodji commissioning of 7.09 km of MV lines, 31.34 km of LV lines, and 7 MV/LV transformers. Sikoroni, Sibiribougou, New LV/MV distribution network, including the supply, installation, and 1,724 and Kalabanbougou commissioning of 6.58 km MV lines, 19.39 km of LV lines, and 8 MV/LV transformers. Kalabancoro Est, Kati, New MV/LV distribution network, including the supply, installation, and 4,706 Sananfara, and commissioning of 14.43 km of MV lines, 14.43 km of LV lines, and 12 Kantiguila MV/LV transformers. Samako Katibougou, New MV/LV distribution networks, including the supply, installation, 650 Samako Village, and commissioning of 4.2 km of MV lines, 7.33 km of LV lines, and 4 Babouillabougou, MV/LV transformers. Nafadji Village Extension, and Sikoroni Creation of 2 MT 15 kV New MV distribution networks, including the supply, installation, and - Kodialani departures commissioning of 10.79 km of MT lines and 8.29 km of LT lines. These lines increased the MV/LV transformer connections. Lassa New MV/LV distribution networks, including the supply, installation, 494 and commissioning of 6.48 km of MV lines, 5.56 km of LV lines, 3 MV/LV transformers, and 88 streetlights. Tabacoro New MV/LV distribution network, including the supply, installation, and 636 commissioning of 4.27 km of MV lines, 7.16 km of LV lines and 3 MV/LV transformers. Dio Village New MV/LV distribution network, including the supply, installation, and 376 commissioning of 5.89 km of MV lines, 4.23 km of LV lines, 3 MV/LV transformers, and 74 streetlights. Total 20,836 Source: EDM-SA 29. The project funded the electrification and energy access in the regional urban centers of Sikasso, Kayes, Koutiala, and Ségou. Key outputs included the rehabilitation of stations and substations, the extension of MV/LV networks, the electrification and connection of surrounding neighborhoods as described in table 5 below. Overall, 9,863 Page 14 of 69 The World Bank Mali Energy Support Project (P108440) households were connected to the grid in the proportion of 10.7 percent for Kayes, 42.4 percent for Sikasso, 27.2 percent for Koutiala, and finally 19.7 percent for Ségou. Table 5. Electrification in Regional Urban Centers Estimated Provincial Expanding the Electrification Network and Connection in the Regional Number of New Region Centers Connected Centers Households Kayes • Rehabilitation of the substation of Paparah through the construction 1,053 of a new building and replacement with higher-performance equipment to increase the capacity of energy transformation and distribution. • Extension of MV/LV networks and electrification of surrounding localities of Bencounda districts and localities of Dar Salam, Samé Ouolof, and Samé agricultural. • Supply, installation, and commissioning of 17.57 km MV lines, 11.85 km of LV lines, and 5 MV/LV transformers. Sikasso • Extension of MV/LV networks in Sikasso: Medina, Babembabougou, 4,184 Hamdallaye, Lafiabougou, Sanoubougou 1, Sanoubougou 2, Kapele Koulou, Bougoula Hameau, Wayerma, and Mamassoni districts. • New LV/MV distribution networks, and the supply, installation, and commissioning of 11.13 km of MT lines; 47.07 km of LV lines, and 17 MV/LV transformers with MV energy metering system Koutiala • New MV/LV distribution network in the neighborhoods of 2,687 Hamdallaye, Sinzana, Medina Coura, Dar Salam, and Sanga. • Supply, installation, and commissioning of 9.44 km of MV lines, 30.23 km of LV lines, and 11 MV/LV transformers with MV energy metering system. Ségou • New MV/LV distribution network in the neighborhoods of Angoulême 1,939 and Sébougou; • Supply, installation, and commissioning of 2.71 MV lines, 21.82 km of LV lines, and 7 MV/LV transformers. Total 9,863 Source: EDM-SA 30. Performance in terms of electricity connection and access to energy were exceeded because of the project’s support and a strong Government drive to reach out to population in a move to smooth the impact of the political crisis. The project contributed significantly to increasing energy access. Performance related to the level and number of beneficiaries was largely exceeded and benefitted both men and women as illustrated in figure 1 and figure 2. The energy access target was largely exceeded, as beneficiaries more than tripled the target level, reaching 998,400 against a target of 285,950; this performance reflects the impact of this project associated with the Go vernment’s deliberate policy to expand energy access. The exceeded energy access results were achieved despite the reduction of project resources because of a strong Government drive to reach out to the population and avoid the conflict spiraling down again. Page 15 of 69 The World Bank Mali Energy Support Project (P108440) Figure 1. Number of Project Beneficiaries (2012– Figure 2. Evolution in Electricity Access in Mali 2017) (2012–2017) 1,200,000 600,000 1,000,000 500,000 400,000 800,000 300,000 600,000 200,000 400,000 100,000 200,000 0 2012 2013 2014 2015 2016 2017 0 2012 2013 2014 2015 2016 2017 Number of connected clients in Bamako Number of project beneficiaries Number of connected clients in provinces Number of project female beneficiaries Total number of connected clients Source: EDM-SA Objective 2: To improve efficiency of electricity services in Bamako and in other targeted areas of the country Rating: Modest 31. The project funded the acquisition by EDM-SA of 13,332 conventional electric meters and 30,666 prepayment meters. Conventional meters included 10,666 single-phase and 2,666 three-phase meters for a total installation of 13,332 conventional meters. The project also funded the supply and delivery of prepayment meters, 24,533 of them being single-phase meters and 6,133 being three-phase meters, for a total installation of 30,666 prepayment meters. 32. The supply of CFLs was reduced, as it became unnecessary to jump-start that product, given that CFLs had already achieved a large penetration in Mali. At completion, a total of 250,000 CFLs equivalent to 4 MW resulted in annual gross generation saving of 14 GWh and a total economic present value (EPV) of avoided cost of generation of CFAF 5 billion or US$11 million over the maximum CFL life of 5 years (assumed from the third year, 30 percent of the CFLs will be degraded annually), with a levelized cost of energy saving of CFAF 8 per kWh or US$0.02 per kWh. 33. The introduction of solar-powered lamps was limited, and sustainability needs to be boosted. At completion, a total of 1,400 streetlights with solar-powered light emitting diodes (LEDs) resulted in an estimated peak demand savings of 0.4 MW and annual gross energy savings of 1 GWh, a total EPV of avoided cost of generation of CFAF 0.9 billion or US$21 million over the maximum LED and battery life of 10 years (assumed solar streetlights annual malfunctioning rate of 10 percent from the fifth year), with a levelized cost of energy saving of CFAF 232 per kWh or US$0.5 per kWh. 34. The rehabilitation and upgrading of the transport and distribution networks resulted in the reduction of the peak load and distribution losses. The project contributed to improving efficiency in electricity distribution in two ways: (a) the improvements resulted in operational efficiency as the outcome target for peak load reduction reached 7 percent, particularly in Bamako urban and suburban neighborhoods and (b) total distribution losses on the interconnected grid was partially achieved, as the target was missed by 17 percent (see figure 3) , because the power utility could not bring Page 16 of 69 The World Bank Mali Energy Support Project (P108440) under control all efficiency factors that led to losses reduction. The power utility does not have a total control on the consumed and billed energy, revenue collection, and nontechnical losses. Figure 3. Change in Distribution Technical Losses in % (2008–2017) 25% 20% Total Technical losses 15% 10% 5% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Period Source: EDM-SA 35. By adding transformation capacity and new MV distribution lines, the project helped desaturate critical elements of the distribution network (primarily in the greater Bamako) and a significant positive impact on reliability and technical loss reduction. However, these investments took place in a context of rapidly increasing demand. Between 2008 and 2018, the number of electricity connection in Bamako approximately doubled. Everything else being equal, this growth of demand and customer base, as well as the shift towards a greater share of LV connections, mechanically resulted in significant increase of technical distribution losses (and possibly non-technical). In this context, it was admittedly not realistic to include in the original project objectives that the Project could bring about a significant overall reduction in distribution losses for EDM-SA. On the other hand, in the absence of project investments, distribution losses would have been significantly higher. 36. Technical assistance (TA) and studies funded by the project contributed to smooth project implementation and to a better planning in the electricity sector. With the support of the project resources, two firms (CABIRA, and ICP) carried out diverse studies ({Master Plan, Medium-Term Expenditure Framework [MTEF], Pricing, Training Plans]), and supported the procurement operations linked to the project. Another group of private firms (including INTEC and GOPA) assisted the Project Implementation Unit (PIU) in the supervision and control of the project works, and in strengthening the operational and commercial performance of the power utility (EDM-SA), namely (a) the implementation of a revenue protection program (RPP), (b) the installation of an advanced enterprise resource planning and information system, and (c) the update of the sector strategic development plan. 37. Capacity building was strengthened in the three institutions overseeing the energy sector (Ministry of Energy, EDM-SA, and CREE). While this is still work in progress, the project provided training and study tours to staff operating in the above three institutions. EDM-SA’s engineers learned concepts and tools that gave them a better understanding of project and program management, and the EDM-SA’s Professional Improvement Center was upgraded. Page 17 of 69 The World Bank Mali Energy Support Project (P108440) Justification of Overall Efficacy Rating 38. Performance toward the first objective is rated High based on completion of key infrastructure related to electricity transmission and distribution in Bamako and the four regional urban centers, and achievement of outcome indicators (see table 6), which were either exceeded or fully achieved. Progress toward the second objective is rated Modest, because most planned outputs were generated, and outcome indicators were either partially or fully achieved (see table 6). However, the total distribution losses target was missed, and the sustainability of solar-powered lamps is not warranted. The overall efficacy rating for the project is Substantial. Table 6. Status of PDO Indicators at End-October 2018 Revised Achievement Results Indicators Baseline Targets at End-June Comments in 2013 2018 1 Indicator 1: 252,000 350,000 662,000 Largely exceeded. The target of connected households in Number of households Bamako almost tripled, amounting to 662,000, against a connected by EDM-SA target of 350,000. This performance resulted from the in project emphasis on rehabilitating and upgrading the Bamako electricity transmission and distribution network in Bamako urban and suburban neighborhoods, and a deliberate Government policy to expand energy access. 2 Indicator 2: 131,000 190,000 318,000 Largely exceeded. The target of connected households Increase in the outside Bamako amounted to 318,000, representing 167 number of percent of the target of 190,000. This performance households connected resulted from the project’s emphasis on doubling the 150 by kV Bamako-Fana-Ségou electric line and strengthening the EDM-SA outside distribution network in the four cities of Kayes, Koutiala, Bamako Sikasso and Ségou, and Kati. 3 Indicator 3: 0 6.9 7.0 Achieved. The target was achieved because of overall Peak load reduction upgrade and rehabilitation of the transmission and from energy efficiency distribution network, particularly in Bamako urban and suburban neighborhoods. 4 Indicator 4: Total n.a. 13.7% 16% Partially achieved. The target was missed by 17 percent, distribution losses on because the power utility has not succeeded yet to bring the interconnected under control all efficiency factors that could lead to losses grid reduction. The power utility does not have a total control on the consumed and billed energy, revenue collection, and nontechnical losses. 5 Indicator 5: Direct 0 285,950 998,400 Exceeded. The target was largely exceeded, as project beneficiaries beneficiaries more than tripled the target level, reaching the number of 998,400 against a target of 285,950. This performance resulted from the project emphasis on rehabilitating the electricity transmission and distribution network in Bamako City and in the regional city centers. The project benefitted from a Government policy to expand electricity access. 6 Indicator 6: 0 145,834 509,184 Exceeded. The target was largely exceeded, as Beneficiaries, of which beneficiaries more than tripled the target level, reaching female the number of 509,184 against a target of 145,834. Page 18 of 69 The World Bank Mali Energy Support Project (P108440) C. EFFICIENCY Assessment of Efficiency and Rating Rating: Substantial Administrative and Operational Efficiency 39. Operational and administrative costs and TA expenses were pooled together and were used efficiently. Operational costs amounted to about 1.4 percent of the total project cost, mostly the costs of buildings, vehicles, furniture, computers, and consultants. As TA and other operational costs were budgeted under the same component, expenses under Component 3 allocated to capacity building and institutional strengthening of key energy sector institutions reached 9 percent of the project costs. 40. Reduction in costs and an extended implementation time line did not affect much the efficiency of project achievements. The actual project costs were lower than the expected costs at appraisal due to the partial cancellation of IDA credit with the reduced project activities. The efficiency of the results was not affected by the partial cancellation. The project closing date was extended from September 2014 to June 2018, about 45 months after the original closing date. The activities with implementation and procurement delay were cancelled at the 2013 restructuring and most of the key transmission and distribution activities had been completed by 2016, and the time overrun hardly affected the efficiency of the project achievements. 41. With the support of the Owner’s Engineer, EDM-SA performed well in procuring competitively the goods and in building internal capacity. Toward the procurement of the goods and works necessary for rehabilitating the transmission and transmission networks, EDM-SA organized national/international competitive bidding processes. Moreover, the extension period for project implementation was used to finalize the extended distribution agenda, but also to rebuild EDM-SA technical capacity and support investment planning in the energy sector. Economic and Financial Efficiency 42. The completion analysis covered 99 percent of the total project cost. The analysis did not include the sector TA activities for which the results were yet to be realized or defined. The appraisal analysis covered 93 percent of the total project cost. The price level used in the appraisal analysis was not available in the Project Appraisal Document (PAD). However, as the PAD’s economic analysis (Table 12, page 64) started from 2009, it was assumed that the appraisal analysis was in 2009 real prices. Therefore, the completion analysis is presented in 2009 real prices. Results are further detailed in annex 4. 43. Economic efficiency. The overall summary results (Table 4.1) showed that the project’s activities and inputs will contribute to the PDO with an economic net present value (ENPV) of CFAF 40 billion (US$84 million), and a levelized energy savings cost of CFAF 100 per kWh or US$0.21 per kWh at 2.6 percent social discount rate,1 or about 0.8 percent of the gross domestic product (GDP) in 2009, and an economic internal rate of return (EIRR) at 21 percent. At appraisal, the total project’s ENPV and EIRR were not presented in the PAD. 44. Transmission and distribution component. At completion (Table 4.3), the transmission and distribution component’s ENPV was CFAF 34 billion or US$72 million and the levelized cost for energy saving was CFAF 110 per kWh 1 Following the World Bank guidance on the social discount rate. See annex 4 for details. Page 19 of 69 The World Bank Mali Energy Support Project (P108440) or US$0.23 per kWh with an EIRR at 16 percent compared to the appraisal’s ENPV of CFAF 4 billion or about US$9 million with an EIRR at 12 percent. 45. CFL and street lighting subcomponents. At completion (Table 4.4), a total of 250,000 CFLs equivalent to 4 MW resulted in annual gross generation saving of 14 GWh and a total EPV of avoided cost of generation of CFAF 5 billion or US$11 million over the maximum CFL life of 5 years (assumed from the third year, 30 percent of the CFLs will be degraded annually), with a levelized cost of energy saving of CFAF 8 per kWh or US$0.02 per kWh. At completion, a total of 1,400 streetlights with solar-powered LED lamps resulted in an estimated peak demand savings of 0.4 MW and annual gross energy savings 1 GWh, total EPV of avoided cost of generation of CFAF 0.9 billion or US$21 million over the maximum LED and battery life of 10 years (assumed solar streetlights annual malfunctioning rate of 10 percent from the fifth year), with a levelized cost of energy saving of CFAF 232 per kWh or US$0.5 per kWh. 46. Greenhouse gas (GHG) and local emissions. As a total project (Components 1 and 2), the total CO2e ton abated is about 300,000 tons. Following World Bank (2017),2 with the low value of CO2e, the total ENPV was CFAF 58 billion (US$123 million) and EIRR at 22 percent with a net GHG marginal abatement cost (MAC) of negative (minus) CFAF 247,936 per CO2e ton or US$525 per CO2e ton. With the high value of CO2e, the total ENPV was CFAF 62 billion (US$132 million) with EIRR at 24 percent with a net GHG MAC of negative (minus) CFAF 265,793 per CO2e ton or US$563 per CO2e ton. The switching value was negative (minus) US$361 per CO2e with a sensitivity indicator of 0.07 (CO2e low values US$37 and high US$75 in 2017, which were original values in the guidance note before the price level adjustment in the analysis). Including the local emissions (NOx, PM10, and SOx) in addition to high and low CO2e values, the results of ENPVs and EIRRs differed slightly from those with only CO2e (Table 4.2). At completion, in undiscounted values, total CO2 reduction of Component 2 was about 54,000 tons, and the total CO2e reduction including Components 1 and 2 was about 300,000 tons.3 47. Financial efficiency. As presented in Table 4.6, the completion financial analysis was conducted for the same 99 percent of the project costs as the economic analysis. The total financial net present value (FNPV) was CFAF 151 billion or US$319 million discounted at financial opportunity cost of capital (FOCC) of 0.4 percent, real (or 2.5 percent nominal interest rate of subsidiary financing). This FNPV was equivalent to 3 percent of GDP in 2009, which benefits both EDM- SA and the owner of EDM-SA, the Government. The financial analysis was conducted from the total investment point of view as each component has a different implementing agency. However, Component 1 was implemented by EDM-SA with subsidiary financing terms of 2.5 percent nominal interest rate, repayable in CFA francs over 27 years, inclusive of a grace period of 7 years. Thus, annual debt service coverage ratio (ADSCR) and loan life cover ratio (LLCR) were also estimated only indicatively in Table 4.6 and the reasons of negative values in the final years, especially the last repayment year 2035 was because the last year 2035 was set as the residual year and transmission and distribution assessed life could not be expected to be operating perfectly in those late years without additional investments for updating. Components 1 and 2, except streetlights, resulted in positive FNPVs, financial internal rates of return (FIRRs), and levelized energy saving cost as presented in Table 4.6. 2 World Bank. 2017. Guidance Note on Shadow Price of Carbon in Economic Analysis; World Bank. 2017. Shadow Price of Carbon in Economic Analysis. Cover Note. 3 The World Bank GHG reporting requires CO e. 2 Page 20 of 69 The World Bank Mali Energy Support Project (P108440) D. JUSTIFICATION OF OVERALL OUTCOME RATING 48. The relevance of the PDO is rated as High, the overall efficacy is rated Substantial, and efficiency is rated Substantial, resulting in an overall outcome rating of Moderately Satisfactory summarized as follows: • Relevance. The PDOs were consistent with the priorities of the country, and with the World Bank’s changing strategies of intervention in Mali. However, there were technical capacity and governance weaknesses. The PDOs remained unchanged and substantially relevant, even after the 2012 political crisis, although the project scope and results framework were revised. • Efficacy. Overall project efficacy is rated Substantial. Toward achieving the first objective, key infrastructure of electricity transmission and distribution in Bamako and the four regional urban centers was completed, and outcome targets of connected households and beneficiaries in Bamako and in regional urban centers were all exceeded. Toward achieving the second objective, the improvement in the distribution network led to the reduction of the peak load and the distribution losses, although the target for the latter was missed. Installation of conventional and prepaid electric meters and the supply of CFLs will help in improving efficiency in providing electricity service. However, the sustainability of solar generated public lighting needs to be strengthened further. • Efficiency. Overall efficiency is rated Substantial. Operational and administrative costs and TA expenses were pooled together and were used efficiently. The extended implementation timeline, arising from a case of force majeure did not affect the efficiency of project achievements significantly. Finally, economic efficiency calculations found that during its life, the project will result in an ENPV of about US$84 million and an EIRR of 21 percent. • Overall, the project outcome is rated Moderately Satisfactory, reflecting good performance in achieving the first objective, with moderate shortcomings toward achieving the second objective. E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 49. Impact of the project on the women has not been documented yet. Women are part of the households that were connected to the grid, and it can be concluded that there were immediate benefits for women living in newly connected households, but only a thematic survey aimed at capturing the changes in women’s roles and responsibilities that come with the switch from traditional energy to electricity, can provide data for a meaningful quantitative analysis. Overall, the dearth of gender data in Mali did not allow any meaningful project impact analysis. However, it has already observed that in similar context and projects, the access to electricity in urban areas, reduces the time consumed in household chores thereby increasing the productivity of women and girls. It also contributed to the development of women led small businesses such as agro-processing, sewing, ice and cold juice making, driving to poverty reduction and socioeconomic empowerment among women. Page 21 of 69 The World Bank Mali Energy Support Project (P108440) Institutional Strengthening 50. The project provided funding for TA and capacity building in the three institutions overseeing the energy sector (Ministry of Energy, EDM-SA, and Water and Electricity Regulatory Commission [Commission de Régulation d’Eau et d'Electricité, CREE]). Performance in the institutions involved the oversight of the energy sector increased due to the equipment and training financed by the project. For example, the performance of the PIU was improved following the acquisition of computers, printers, and vehicles funded by the project; and EDM-SA’s engineers learned concepts and tools that gave them a better understanding of project and program management. However, additional capacity building is still needed, particularly in the areas of project fiduciary management. 51. The project upgraded the EDM-SA’s Professional Improvement Center. The project enhanced the performance of the training activity within EDM-SA. EDM-SA personnel indicated that the EDM-SA’s Professional Improvement Center might have closed, without the equipment and the training of trainers received from the project. Mobilizing Private Sector Financing 52. Mali is ranked 145 by the 2019 Ease of Doing Business with a score of 53.50, out of a total of 100, compared to 51.61 for the Sub-Saharan region. In the West African subregion, Mali has a better score in comparison with Mauritania, Guinea, and Burkina Faso, but performs less than Côte d’Ivoire. The above shows that Mali is not a place of predilection for foreign private sector investment, due to the perceived high risks and business climate. Investment in the energy sector requires huge resources, and only foreign direct investment is most suitable to invest in electricity production, transmission, and distribution. 53. The project was limited in its scope and could not contribute to the mobilization of private sector financing of the electricity sector, especially that the security context needs to improve to attract long-term investment. However, external promoters are in negotiation with the Government to launch projects in electricity production (thermal, hydro, and solar), but this trend has less to do with the achievements of this project. Poverty Reduction and Shared Prosperity 54. Poverty has likely increased because of the 2012 political crisis. The poverty rate was estimated to have increased from 43.6 percent in 2010 to 46.1 percent of the population by end 2012 or 7.2 million of poor. In the south, the poverty rate is estimated to be 46.2 percent, including displaced populations. In the north, the poverty rate is estimated to be 44.3 percent, including refugees. However, the extreme poverty rate fell significantly to 42.7% in 2017 on the strength of exceptional agricultural production over the previous three years. The prevailing security conditions were not conducive to obtain an updated number on recent poverty status (ISN). 55. Mali’s human development outcomes are among the very modest. Compared to a Sub-Saharan African average of about 70 percent, primary education completion rate in 2010 was only 58.1 percent. Gender inequality also remains high with fewer than 8 girls for 10 boys enrolled in basic education. With an infant mortality rate of 191 per 1,000, Mali ranks third from the last for under-five mortality, and the maternal mortality ratio is high at 540 deaths per 100,000 live births. The country ranks among those with the highest rates of chronic malnutrition (stunting), with close to 38 percent of under-five children stunted (ISN). Page 22 of 69 The World Bank Mali Energy Support Project (P108440) 56. Project contribution to poverty reduction and shared prosperity is mainly undocumented. As the project affected mostly people residing in the urban centers and given the limited scope of the project, the project intuitively had some contribution in alleviating the poverty features described above, but it is currently undocumented. Other Unintended Outcomes and Impacts 57. The ICR mission (October 2018) and the dialogue that took place with the key stakeholders during the mission did not identify unintended outcomes and impacts attributable to this project. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION Project Design 58. The project design drew from the previous World Bank’s role in the energy sector. The World Bank had been active in Mali through the implementation of the Household Energy and Universal Access Project (FY04- P076440) that had just closed. Lessons learned from the above project and the World Bank’s global experience in the energy sector that fed into the design of the project are as follows: (a) the realism and simplicity in project design, (b) the setting of realistic goals based on country risks and ownership by country’s stakeholders, and (c) the handling of complex project components by turnkey contracts. These lessons served the design and implementation of the project well. 59. The project design was simple and realistic. The PDO was concise and aimed to address energy access and efficiency in the capital city and in selected regional urban centers. The bulk of the project resources focused on reinforcing the transmission and distribution networks, and the remainder of the resources was devoted to light activities supporting energy efficiency. 60. The Results Framework was sound. As detailed under the section on the theory of change, there was consistency between the identified activities, expected outputs and outcomes, and the two objectives of improving energy access and efficiency. While attribution of the achieved outcome can be shared with other stakeholders (the Government and EDM-SA), the surge in the energy access and increased technical capacity in the electricity sector would not have occurred during the period when the country was in a difficult security situation. Implementation Arrangements and Capacity 61. At effectiveness, EDM-SA was identified and associated as a key implementing agency but was not entrusted with the oversight of the transmission and distribution activities. The design of implementation arrangements could have been improved at appraisal by providing more importance to EDM-SA in framing the structure and roles of the implementation agencies. As EDM-SA oversaw the major component of reinforcing transmission and distribution infrastructure (90 percent of resources), it was critical that EDM-SA be organized and prepared accordingly to shoulder that responsibility. However, EDM-SA was effectively provided the upper hand to oversee transmission and distribution tasks after the 2013 restructuring. Page 23 of 69 The World Bank Mali Energy Support Project (P108440) 62. Required fiduciary and management expertise was lacking at EDM-SA at effectiveness. EDM-SA was entrusted with the responsibility to deliver the reinforced transmission and distribution infrastructure funded by the project but did not have the required technical and fiduciary expertise. That is why after the 2013 restructuring, there was recruitment of qualified staff to solely concentrate on implementing the project, jointly with the PIU located in the cabinet of the Ministry of Energy. 63. The owner’s engineer was overlooked at the appraisal phase. Given that the project had to procure specific equipment to reinforce the electricity transport and distribution network, there was a need for EDM-SA to benefit from the expertise of a firm that can provide required advice in terms of technical specifications, bids analysis, and selection of suppliers for key equipment, and installation of the transmission and distribution equipment. EDM-SA had to hire external expertise and a procurement specialist who supported the implementation of Component 1. 64. M&E arrangements were well thought through and worked smoothly. In line with the design simplicity, the M&E arrangements were appropriate. Annex 3 of the PAD had a Results Framework, with arrangements for results monitoring. For each performance indicator, there were indications of the nature of data to be collected, the frequency of reporting, the data collection instruments, and the responsibility for data collection. Risk Assessment 65. Most risks were correctly identified and materialized, but political and security risks were unidentified. Table 7. Developments Related to the Key Risks Identified at Project Approval Mitigation Actions or Consequences of Absence Major Identified Risks of Remedy (1) EDM-SA restructuring plan not implemented (High) The risk materialized substantially. Out of the six key pillars of reforms, only tariff adjustment occurred, including the creation of a water company, separated from EDM-SA. (2) No tariff decision adjustment by the regulatory agency The risk did not materialize as a tariff increase of 7 (High) percent was implemented in July 2014. (3) Low level of government commitment to electricity The risk fully materialized. Due to the political sector reform (Substantial) instability that followed the political change in 2012, the Government was mostly concerned with security issues. (4) Inadequate implementation capacity, and delays in Fully materialized but was mitigated in 2013 with implementing the project (Moderate) the recruitment of an external firm and qualified staff to help the implementation of Component 1 by EDM-SA. (5) Inadequate implementation of EDM-SA’s strategy to Fully materialized. Despite a one-time increase of improve revenue collection (High) the tariff in July 2014, the revenue collection did not improve substantially, as reflected by EDM- SA’s dependence on Government subsidies, and the low level of the DSCR. (6) Slow response of households to the energy efficiency Unknown, because a good grasp of households’ initiatives (Moderate) response to efficiency initiatives (prepaid meters) requires a survey that has not been undertaken Page 24 of 69 The World Bank Mali Energy Support Project (P108440) yet. (7) Adverse social and environmental consequences The risk did not materialize because there were associated with the reinforcement of transmission and minor social and environmental cases to handle distribution networks (High) during project implementation. (8) Low sustainability of project activities (High) Partially materialized, as the solar-powered street lighting requires maintenance which is not currently happening. (9) Political and security risks (Unidentified) This risk materialized fully with the 2012 political change, which significantly disturbed project implementation. B. KEY FACTORS DURING IMPLEMENTATION Governance and Politics 66. The political and security context deteriorated in 2012 and triggered the project restructuring. While security and political stability issues were not even identified as potential risks in the PAD, the 2012 political change transformed the entire context of project implementation, starting with the discontinuation of disbursement for all the World Bank’s portfolio and this project in application of OP 7.30. After the 2013 restructuring, the project resources were curtailed, and consequently important activities were also canceled. Some of the impact of the country’s security deterioration was the reduction in activities, and a longer period of project implementation. Moreover, quick turnover of the top management of EDM-SA was not conducive to a steady oversight of the reforms in the electricity sector and implementation of project components under EDM- SA’s supervision. 67. Important challenges of weak governance and institutions had to be overcome to pursue project implementation. The 2013 restructuring was not only driven by internal project matters or delay in implementation, but also by shifting Government's and Bank's priorities: the cancelled IDA from the project was reallocated to the rural electrification program to support energy access in rural areas which felt abandoned by the country institutions during the period of the crisis. The strong access agenda, which was enabled by the investments under the project and allowed its access targets to be overachieved, was also due to a strong Government drive to reach out to the population and avoid the conflict spiraling down again. Coordination Among Key Stakeholders 68. All implementation agencies became more effective only after restructuring. Overall, there was good coordination among the Government, EDM-SA and CREE, and the World Bank team. However, before the 2013 restructuring, there were delays in launching the implementation of Component 1 of the project, due to ineffective arrangements at appraisal in setting up the implementation of Component 1, coupled with governance and institutions weaknesses. While EDM-SA had the responsibility to oversee the activities of reinforcing the transmission and distribution infrastructure, the required technical capacity lacked at project effectiveness. It was only three years (2012) after effectiveness that a dedicated implementation unit to take up the needed tasks was created within EDM-SA. Fiduciary and Project Management. 69. Weaknesses in the key implementing agency (EDM-SA) were addressed through TA and the recruitment of domestic and external expertise. As indicated, there were weaknesses in the key implementing agency (EDM- Page 25 of 69 The World Bank Mali Energy Support Project (P108440) SA) at effectiveness, particularly in the areas of procurement and project management. Critical changes were made in creating an Implementation Unit in EDM-SA in 2013, in providing local and overseas training to staff, and in hiring external expertise and a procurement specialist who supported the implementation of Component 1. Supervision and Reporting 70. Five task team leaders (TTLs) oversaw almost nine years of project implementation . The last TTL was based in Mali, while other TTLs and energy specialists were based in neighboring countries such as Burkina Faso or Senegal. There was no compelling information supporting that staff turnover affected the quality of project supervision and efficiency of the project implementation. Key supervision reports were prepared on time, including the Aide Memoires and Implementation Status and Results Reports (ISRs), and provided the required information to document project performance on the ground. Local and Regional Macroeconomic Developments 71. In July 2014, the authorities implemented an electricity tariff adjustment (weighted average increase estimated at 6.5 percent). The adjustment revised the tariff structure in the direction of increased targeting of the social tariff. The tariff adjustment represented only a fraction of what would be required to reach the cost recovery level and was accompanied by continued budget subsidies to EDM-SA. Moreover, for the first time in a decade, Mali experienced a more favorable generation mix in 2013 and 2014, owing to (a) the completion of the interconnection with Côte d'Ivoire at the end of 2012 and (b) the Félou regional hydropower project becoming operational in 2013. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) Rating: Substantial M&E Design 72. M&E design was appropriate and consistent with the theory of change. Annex 3 of the PAD had an appropriate Results Framework, with arrangements for results monitoring. Indicators were realistic and measurable, and tracked indicators reflected the expected outcome and the pursued objective. For each performance indicator, there were indications on the nature of data to be collected, the frequency of reporting, the data collection instruments, and the institution responsible for data collection. However, indicators and targets to gauge progress toward energy efficiency and sustainability in the energy sector could have been strengthened, especially regarding a better control of the distribution losses, and the EDM-SA financial and commercial viability. M&E Implementation 73. During the 2013 restructuring, the Results Framework was revised to reflect changes in the restructured project. Following the cancellation of resources (21 percent of initial amount) at restructuring, there was a need to redefine the indicators and adjust the level of indicator targets. That is why a new indicator on project beneficiaries was Page 26 of 69 The World Bank Mali Energy Support Project (P108440) added, and the indicators related to the reduction of distribution losses were combined in one, because of technical difficulties to break down its components. The project restructuring was preceded by a Medium-Term Review in January- February 2013, which allowed to agree with the Borrower on the scope and content of the restructuring. Decisions agreed upon included the cancelation of a portion of the resources, a reallocation of the remaining amount, a revised result framework, and the extension of the project closing date. 74. All ISRs updated the status of the progress toward the outcome target. Throughout project implementation, progress toward the outcome was documented and reported in the ISRs and this provided key stakeholders with a timely picture of the progress of the project on the ground. M&E Utilization 75. Information provided in the ISRs allowed the World Bank management to provide guidance on how to address obstacles in project implementation. Particularly in the context of a fragile country, the World Bank management works more closely with the project team to chart a path for continuing project implementation in a changing and challenging environment. The Results Matrix integrated in the ISRs was a reliable instrument to have everybody on board in addressing implementation obstacles, and this worked well in the context of this project. Justification of Overall Rating of Quality of M&E 76. Overall, the M&E quality is rated as Substantial. The design was simple and realistic. During implementation, the M&E instrument helped to revise the Results Framework, and the data and information to World Bank management allowed timely guidance to adjust the project to changing conditions on the ground. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental and Social Compliance 77. The project was rated as a Category B project at appraisal, and given the envisioned project activities, two World Bank’s safeguard policies were triggered for this operation: (a) Environmental Assessment (OP/BP 4.01) and (b) Involuntary Resettlement (OP/BP 4.12). Expected environmental and social impacts of the infrastructure investments were minimal, but mitigation measures needed to be in place. Therefore, an Environment and Social Management Framework and a Resettlement Policy Framework provided for a systematic screening process for the investment components, namely (a) distribution-level infrastructure in the clusters to be selected during project implementation and (b) transmission-level investments such as augmentation and rehabilitation of existing infrastructure. 78. Because of limited social and environment incidents during project implementation, the overall rating of the safeguards compliance in ISRs was rated Satisfactory throughout, except in one instance, during the entire project implementation period. At project closure, the project had no pending claims from communities and individuals affected by the project and was therefore in full compliance of environmental and social safeguards. Fiduciary Compliance 79. Financial management (FM). The risk of the public FM system in Mali was rated Substantial at the country and entity levels. To mitigate the country and project risks, the PIU was entrusted with the overall coordination of the FM and Page 27 of 69 The World Bank Mali Energy Support Project (P108440) accounting activities. A qualified FM specialist was recruited to strengthen the FM capacity within the PIU, and a new computerized accounting system was customized to fit project needs and generate useful information and financial statements. 80. FM was rated Satisfactory throughout project implementation. While there were issues of delays in disbursements during the first four years, they were related to weak implementation agencies and inadequate technical capacity in procurement and implementation readiness. ISRs and Aide Memoires did not raise any issues related to FM. Annual audits of project implementation and disbursements were prepared on time, including the final external audit, and were not qualified. Overall, FM was rated Satisfactory throughout project implementation. 81. Procurement. Based on the assessment of the agencies’ technical capacity to implement World Bank procurement, the project risk was rated High at project effectiveness. The proposed project was to benefit from the support of EDM-SA and CREE, and it was recommended that these bodies would play their respective roles in procurement control and regulation under the new financing on an agreed basis. In practice, this did not occur, because both bodies did not have the required expertise, and this capacity had to be strengthened or/and outsourced. 82. Despite delays in launching procurement transactions, due to lack of expertise and coordination among implementation agencies, procurement was overall Satisfactory, despite instances of underperformance toward the end of the project. ISRs rated procurement performance mostly Moderately Satisfactory or Satisfactory, but at closure, the rating of the procurement performance was Satisfactory. Overall, fiduciary compliance during project implementation was appropriate. C. BANK PERFORMANCE Rating: Moderately Satisfactory Quality at Entry 83. Strategic relevance and approach. The extension and reinforcement of EDM-SA’s transmission and distribution networks intended to help Mali fully capitalize on the additional thermal capacity under construction and the expected gas-generated power from Côte d’Ivoire and improve energy access and efficient use of electricity in Bamako and other regional urban centers. This was consistent with Mali’s GPRSF adopted in 2007 and its two main pillars: (a) developing infrastructure and strengthening productive sectors and (b) consolidating the public sector structural reform agenda. In addition, the project was in alignment with 2007–2011 CAS strategic objectives to develop infrastructure, strengthen productive sectors, and consolidate the public sector structural reform agenda. However, the project agenda to reinforce the energy efficiency and its measurement could have been strengthened. 84. Technical and economic aspects. The technical design of the project was sound, and the physical components were based on feasibility studies that had been approved by the Government and reviewed by the World Bank team. Technical parameters and estimated project costs for the transport and distribution component were established by EDM- SA and checked against actual unit costs for similar undertakings in the sub-region. For the demand-side management component, no issue arose because the activities were technically straightforward. In the hindsight, the component on promoting the CFLs market was found unnecessary because they were already in full use in Mali, and sustainability of the solar-power street lighting ended up being an issue, as no entity was identified beforehand to cover the cost of maintenance or replacement. Page 28 of 69 The World Bank Mali Energy Support Project (P108440) 85. Fiduciary aspects. Based on the assessment of the technical capacity of agencies to implement World Bank’s projects at appraisal, the project risk was rated High for procurement, and the risk of the public FM system in Mali was rated Substantial. In practice, mitigation measures to improve FM worked and transactions were conducted smoothly. On the contrary, mitigation measures to address procurement weaknesses did not work, and the project experienced delays because of inadequacy of local expertise to perform procurement tasks. 86. Risk assessments. Key risks were correctly assessed in the PAD, and mitigation measures were identified, except for the security and political risk, which was overlooked, but ended up materializing earlier than expected and became the major disturbance to project implementation. Most identified risks materialized, and in some instances, mitigation measures worked; however, in other instances, they did not (table 6). Quality of Supervision 70. Swift restructuring of the project in 2013 was effective in achieving results. Project launching was slow, because of coordination weaknesses and lapses in implementation readiness. The new World Bank arrangements that allow operation in fragile environments were effectively used to prepare an Interim Strategy Note (ISN) based on a sustained dialogue with the key stakeholders in Mali and in the donor community, and to restructure the country’s portfolio and this project. Rapid interaction between the World Bank management and the project team was timely and effective in restructuring the project, and the move contributed to the success of this project. 71. The reporting of implementation performance was candid. Aide Memoires and ISRs were prepared carefully and kept all stakeholders abreast of the project status and the perspectives toward achieving the outcome. All ISRs had an updated status of the Results Framework that provided the World Bank management and all internal stakeholders the information necessary to chart out the course of business continuation in Mali, and to provide guidance to operational staff. Justification of Overall Rating of Bank Performance 72. Overall World Bank performance is rated Moderately Satisfactory, because there were moderate shortcomings at quality at entry, while supervision was smooth and appropriate despite unfavorable conditions on the ground. D. RISK TO DEVELOPMENT OUTCOME 73. Key outcomes include (a) the expansion of energy access with increased connections and a higher number of beneficiaries in Bamako and in four regional urban centers and (b) the gains in energy efficiency. Overall, the risk to development outcome is limited with regard to the first outcome. The connections that were completed thanks to the project and the additional beneficiaries are there to stay. However, the quality of the service will depend on the capacity for the Government and EDM-SA to provide the necessary resources to ensure the maintenance of the infrastructure, and to invest in the electricity sector. 74. The risk to development outcome achieved in energy efficiency is higher, as it will depend on the financial viability of EDM-SA, and its capacity to ensure maintenance of the completed infrastructure, and to continue investments in the energy sector to match the demand side which will keep growing. The financial viability of EDM-SA remains a significant risk, as Mali has been unable to attract significant private investments due to the macro and political risks, and Mali has had to rely on expensive thermal generation to meet growing demand. In Page 29 of 69 The World Bank Mali Energy Support Project (P108440) the medium term, EDM-SA will have the option to rely increasingly on electricity imports from the nascent West Africa Power Pool to reduce the cost of service, and analytical work demonstrates that several actions are required to substantially reduce energy subsidies, including changing the energy mix. As indicated earlier, the sustainability of public lighting by solar-powered streetlights remains uncertain, because neither the beneficiary municipalities of solar energy, nor the Directorate of Energy and its Regional Departments of Energy can perform this task properly, due to lack of sufficient own resources. 75. Toward sustaining the results already achieved, the project supported (a) the implementation of a Revenue Protection program, (b) the installation of an advanced enterprise resource planning and information system, and (c) the update of the energy sector strategy and turnaround plan. Moreover, a new World Bank project is approved (Mali Electricity Sector Improvement Project-P166796) and will build on achieved outcome to expand energy access and improve energy efficiency. V. LESSONS AND RECOMMENDATIONS 76. A simple project design produces better results than a complex project. The success of this project arose from allocating the bulk of the project resources to reinforcing the transmission and distribution networks (90 percent of resources). The remainder of the resources was devoted to light activities supporting efficiency, capacity building, and institutional strengthening. The PDO was defined in a way that stressed project impact on electricity access and efficiency. On the ground, the World Bank team gave priority to building the electricity infrastructure, which in fact was the source of most efficiency gains. Different and lower results may have been obtained if the project had been expanded to include activities to reform the power utility or to expand rural electrification. 77. The World Bank can generate results in fragile environments, if it can move more quickly toward a systematic approach to projects in fragile countries with a set of dedicated procedures and guidance. The 2012 security crisis in Mali was overwhelming, and the context could have suggested that the World Bank close business until security is fully restored. The new World Bank arrangements that allow to operate in fragile environments are effective if they are timely and rapidly implemented. The preparation of an ISN based on a sustained dialogue with the key stakeholders in Mali and in the donor community, the overhaul of the country’s portfolio, and the restructuring of the project are all aspects that contributed to the success of this project. Past experiences from operations completed in Mali and elsewhere should be fully captured to ensure that new procedures tailored to FVC context are adopted and become effective. 78. For activities to successfully contribute to the project objective, they ought to be consistent with the borrower’s immediate needs and priorities. Project performance in building the transmission and distribution infrastructure was outstanding because that activity was in line with the Government’s plan to expand energy access. Despite political instability and changes in the power utility management, all resources devoted to this activity were used to deliver the expected output. Activities supporting the energy efficiency and innovation (loss reduction and solar-powered energy) were less successful, because they were not on the priority plate of the borrower. Activities to be supported by a World Bank project should be carefully researched before their selection and integration in the project components. 79. Inadequate implementation readiness impedes the timely launching of project implementation. Page 30 of 69 The World Bank Mali Energy Support Project (P108440) Implementation readiness means that the PIU has all stakeholders on board at approval and has the required expertise (fiduciary management and safeguards) when the project reaches effectiveness. In the case of this project, all stakeholders were not ready for implementation, as EDM-SA became effectively operational after the creation of an implementation Unit three years after effectiveness (2002). Procurement expertise and technical experts were also lacking until the recruitment of a private firm and competitive staff to assist EDM-SA to procure and install transmission and distribution equipment. 80. Early and swift restructuring was the instrument used to adjust the project to implementation realities on the ground. The project took long to start, because of limited implementation readiness and weaknesses of implementation agencies and arrangements. Moreover, there was a political crisis in 2012 that stopped disbursements for the country’s portfolio and this project. This context led to the 2013 restructuring that canceled resources and delayed activities and adjusted the Results Framework accordingly. These changes contributed to adapting the project implementation to conditions on the ground and generated results. 81. Unclear arrangements among implementation agencies impede coordination and early project launch. At appraisal, it was agreed that the project will be managed by a PIU reporting to the Ministry of Energy, represented by the Director General of Energy, with the collaboration of the management of the power utility (EDM-SA) and the water and energy regulation agency (CREE). While EDM-SA oversaw about 90 percent of the project resources, it was not fully operational until the creation of an implementation unit within EDM-SA in 2002, and implementation of Component 1 was delayed. Technical weaknesses in the key function of procurement was the common denominator of those three poles of implementation. There was no clarity in terms of roles and responsibilities regarding the initiation and implementation of activities, until the creation of a PIU in the power utility and the recruitment of qualified staff. 82. The selection of the owner’s engineer is a delicate task and requires a high-level dialogue between the borrower and the World Bank team to ensure the recruitment of a competent firm . The task of the owner’s engineer is critical, because the latter is the adviser of last resort on technical and fiduciary issues, including technical specifications, bids analysis, the selection of the suppliers for key equipment, and its installation in the transmission and distribution network. Due diligence in these transactions is paramount because any mistake in conducting the above transactions has an impact on the delivery of each portion of the infrastructure. 83. When elaborating the project implementation arrangements for electricity projects, the role and responsibilities of the power utility must be set right by the project team before effectiveness. Delays in the launching the key activities of the project arose from the fact that EDM-SA did not have the upper hand and the required expertise to procure goods and services needed to build the transmission and distribution infrastructure. Increased responsibility and strengthened expertise after the project restructuring allowed EDM-SA to fulfill its mission to procure goods and to proceed with upgrading the electricity infrastructure network. 84. Procurement in the FCV context is challenging, and project design should draw on the lessons learned from Bank’s engagement and experience from similar circumstances . Procurement of goods in FCV context is often the source of delays because of weak technical capacity or governance shortcomings. When designing the implementing arrangements to procure goods, it is central to understand the context and functioning of the identified implementing agencies to ensure that procurement will occur. Otherwise, the project implementation might be jeopardized, and drawing on past Bank experience in similar circumstances is the right approach. 85. There is a nexus linking efficiency performance in achieving project outcomes and the sustainability of Page 31 of 69 The World Bank Mali Energy Support Project (P108440) the infrastructure needed to expand energy services. EDM-SA still faces significant challenges and the country has not been able to attract the right investors. Creating an environment conducive to private sector involvement, developing measurement instruments, data collection and management, are some of the tools to improve efficiency outcomes that will warrant sustainability in delivering energy services in the long run. More specifically for future projects, it would be useful to measure much more finely the distribution losses in the targeted segments of the network so as to provide a more accurate picture of the contribution of Bank support. . Page 32 of 69 The World Bank Mali Energy Support Project (P108440) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Improve the access and efficiency of electricity services in Bamako and in other targeted areas Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of households Number 252000.00 382200.00 350000.00 662000.00 connected by EDM-SA in Bamako 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): The target of connected households in Bamako almost tripled, amounting to 662,000, against a target of 350,000. This performance resulted from the project emphasis on rehabilitating and upgrading the electricity transmission and distribution network in Bamako urban and suburban neighborhoods, and a deliberate Government policy to expand energy access. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Increase in the number of Number 131000.00 182000.00 190000.00 318000.00 Page 33 of 69 The World Bank Mali Energy Support Project (P108440) households connected by 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 EDM-SA outside Bamako Comments (achievements against targets): Largely exceeded. The target of connected households outside Bamako amounted to 318,000, representing 167 percent of the target of 190,000. This performance resulted from the project emphasis on doubling the 150 kV Bamako-Fana-Ségou electric line and strengthening the distribution network in the four cities of Kayes, Koutiala, Sikasso and Ségou, and Kati. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Peak load reduction from Megawatt 0.00 20.00 6.90 7.00 energy efficiency hour(MWh) 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Achieved. The target was achieved because of overall upgrade and rehabilitation of the transmission and distribution network, particularly in Bamako urban and suburban neighborhoods. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Total distribution losses on Percentage 15.20 15.20 13.70 16.00 the interconnected grid 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Page 34 of 69 The World Bank Mali Energy Support Project (P108440) Comments (achievements against targets): Partially achieved: The target was missed by 17 percent, because the power utility has not succeeded to bring under control all efficiency factors that could lead to losses reduction. The power utility does not have a total control on the revenue collection and nontechnical losses. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Direct project beneficiaries Number 0.00 0.00 285950.00 998400.00 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Female beneficiaries Percentage 0.00 0.00 145834.00 509184.00 Comments (achievements against targets): Largely Achieved. The targets were largely exceeded, as beneficiaries more than tripled the target level, reaching the level of 992,400 against a target of 285,950. This performance resulted from the project emphasis on rehabilitating the electricity transmission and distribution infrastructure in Bamako urban and suburban neighborhoods. The project corresponded with a Government policy to expand electricity access. A.2 Intermediate Results Indicators Component: Component 1: Transmission and distribution reinforcement and extension Page 35 of 69 The World Bank Mali Energy Support Project (P108440) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of connections Number 201539.00 296700.00 330000.00 515579.00 established 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Largely exceeded. Achievements reached 156 percent of the expected target, following strides in the expansion of the transmission, distribution, and electrification under the project, which corresponded with the Government’s deliberate policy to promote en ergy access. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Transmission lines Kilometers 0.00 0.00 221.00 221.00 constructed or rehabilitated under the project 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Achieved-The doubling of the 150 kV Bamako-Fana-Ségou electric line was implemented as planned at project appraisal. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion MV distribution lines Kilometers 0.00 0.00 80.00 285.00 Page 36 of 69 The World Bank Mali Energy Support Project (P108440) constructed or rehabilitated 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 under the project Comments (achievements against targets): Largely Exceeded. Activities to build or rehabilitate the MV electricity distribution network were implemented as planned both in the urban and suburban neighborhoods of Bamako and the four regional cities of Kayes, Koutiala, Sikasso, and Ségou. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of smart meters Number 0.00 6000.00 6000.00 0.00 installed 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Target not achieved. The purchase order for the smart meters was raised, but the consignment was not delivered as at the project closing date. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion LV distribution lines Kilometers 0.00 0.00 746.00 865.00 constructed or rehabilitated under the project 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Page 37 of 69 The World Bank Mali Energy Support Project (P108440) Exceeded. Activities to build or rehabilitate the LV electricity distribution network were implemented as planned both in the urban and suburban neighborhoods of Bamako and the four regional cities of Kayes, Koutiala, Sikasso, and Ségou. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of MV/LV Number 0.00 0.00 80.00 104.00 transformers installed under the project 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Exceeded: Activities of electrification were implemented as planned both in the urban and suburban neighborhoods of Bamako and the four regional cities of Kayes, Koutiala, Sikasso and Ségou. Component: Component 2: Energy efficiency and demand-side management Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Public solar lamps installed Number 0.00 0.00 2150.00 2000.00 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Page 38 of 69 The World Bank Mali Energy Support Project (P108440) Partially achieved. The project supported the installation of public solar lamps as planned, but achievements were short of the target. Moreover, there was no adequate maintenance plan, and sustainability of this source of energy is uncertain. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion CFLs used by households Number 0.00 1000000.00 250000.00 250000.00 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Achieved. Because the use of CFLs was already generalized in Mali before the launch of the project, the initial target was scaled down, and the new target was achieved as planned. Component: Component 3: Capacity building and institutional strengthening of key energy sector institutions Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Planned periodic M&E Yes/No N Y Y Y reports submitted on time (Y/N) 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Page 39 of 69 The World Bank Mali Energy Support Project (P108440) Achieved- Overall, the ISRs and the Aide Memoires were prepared on a regular basis and provided a good account of progress toward the project outcome and objectives. ISRs had an annex with the status of PDO indicators. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Implementation calendar for Yes/No N Y Y N key activities in annual work program adhered to 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Not Achieved- The initial calendar was not adhered to, because of inadequate implementation arrangements, and unfavorable political developments, which triggered delays in the project closing occurring 45 months after the original closing date. Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Sector Investment Plan Yes/No N N Y Y realized 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Achieved: A study on the Electricity Sector Investment Master Plan was prepared and approved by the Government. Page 40 of 69 The World Bank Mali Energy Support Project (P108440) Formally Revised Actual Achieved at Indicator Name Unit of Measure Baseline Original Target Target Completion Number of staff trained Number 0.00 0.00 1130.00 1150.00 under the project (utility, MEE) 18-Jun-2009 18-Jun-2009 27-Aug-2013 30-Jun-2018 Comments (achievements against targets): Achieved- The project supported local and foreign training for staff working with the power utility (EDM-SA), the Ministry of Energy, and the Energy Regulatory Agency. The feedback from the training beneficiaries on the quality and usefulness of the training was overall very positive. Page 41 of 69 The World Bank Mali Energy Support Project (P108440) A. KEY OUTPUTS BY COMPONENT Components, Activities, and Generated Outputs Inputs Component 1: Transmission UPGRADING THE NATIONAL TRANSMISSION NETWORK and distribution reinforcement • Doubling of the HV 150 kV Kodialani-Sirakoro line. The line was installed over about 23 km to and extension increase distribution capacity and system availability. Outputs included studies, supply of HV • Upgrade the electricity insulator conductors and accessories, 75.9 km of electric cables, 25 km of fiber-optic cable, and transmission line SCADA. between Ségou and • Rehabilitation of the 150 kV Bamako-Fana-Ségou electric line. Output included the rehabilitation Bamako; and tuning up of the 220 km electric line linking Bamako to Ségou and the setup of a tower at the • Upgrade and reinforce Fana station to ensure the feasibility of distribution lines. Other achievements included a 232 km 30 kV facilities in the optical fiber cable and accessories to secure transits and availability of the electrical system. peripheral area of • Upgrade of the transmission system at the Fana station. Key outputs were (a) the installation of Bamako, including the a set of 150 kV bars with a numerical control system to improve the flexibility of use of the 150 kV 150-kV loop; Bamako-Fana-Ségou line, secure transmission and availability of lines, including the following • Upgrade and reinforce activities: (i) studies and execution of modifications and connection of the line with the station LV and MV distribution and (ii) the supply and installation of HV and MV equipment. networks in Bamako; • Strengthening of the Kalabancoro station. The key output was the expansion of the substation • Upgrade and reinforce building, fence construction, and the supply of HV and MV equipment with a new transformer LV and MV distribution 150/30 kV - 60 MVA, and HV control equipment, implementation, testing, and commissioning of networks in areas of, installation to increase the capacity of transformation, distribution, and securing of the availability among other, Kati, of electricity; Ségou, Kayes, Mopti, • Upgrading of the SOGEM substation of Kodialani: The key output was a renovated substation Sikasso, and Koutiala; that received power from the existing 225/150/15kV transformer from SEMAF, and used to and supply the feeders to the Samaya, Nafadji, and Sébenikoro districts. • Connection to the main grid of the localities of REHABILITATION OF THE DISTRIBUTION NETWORK IN BAMAKO AND KATI Ouléssébougou and Kangaba • Rehabilitation of Balkou substation (30/15 kV). Key output was an expanded substation, with new high-performance equipment to increase processing, distribution, and securing the Page 42 of 69 The World Bank Mali Energy Support Project (P108440) Components, Activities, and Generated Outputs Inputs availability of electricity. • Construction of the DCO station (30/15 kV). Key achievement was a new substation to replace the old and saturated substation, and to increase the transformation capacity, distribution, and securing of the availability of electricity. • Renovation of the Badala substation (30/15kV–30/0.4 kV). The key output was the construction of a new building and the installation of a more efficient equipment to increase processing, distribution, and securing of the availability of electricity. • Rehabilitation of the Sotuba substation 30/15 kV–30/0.4 kV. The key output was a renovated substation to replace the old saturated substation, to reinforce the capacity of transformation, distribution, and securing of the availability of electricity. • Construction of the Kati substation-30 kV. The key output was the construction and equipment of a new station, to reinforce distribution capacities and to secure the availability of the electricity system. Unfortunately, a fire destroyed a major part of the substation. INSTALLATION OF UNDERGROUND ELECTRIC DISTRIBUTION LINES • Underground electric line 30 kV linking the Kalabancoro and the Badala stations. The key output was the laying of 29.4 km underground MV cables among substations to strengthen the distribution and make their operations more flexible. • Underground line 30 kV linking the Badala the Balingué substations. The key output was an underground MV cable allowing intermediate positions to power each other, to strengthen the distribution and secure the availability of these positions and make their operations more flexible. • Underground line 30 kV linking the Dar Salam/Balingué/Balkou substations. The key output was an underground MV cable allowing substations to power each other, to strengthen the distribution, and secure the availability of these positions and make their operations more flexible. EXTENSION OF ENERGY ACCESS IN THE BAMAKO AND KATI NEIGHBORHOODS • Energy access extension in the Yirimadio, Sotuba, Yirimadio Stade, Sabalibougou, and Page 43 of 69 The World Bank Mali Energy Support Project (P108440) Components, Activities, and Generated Outputs Inputs Titibougou neighborhoods. Completion of studies of the new MV/LV distribution networks and MV/LV substations, and the supply, installation, and commissioning of 12.34 km of MV lines, 43.89 km of LV lines, and 17 MV/LV transformers. The number of new connections in these neighborhoods is estimated at 3,900. • Energy access extension in the Niamakoro and Sokorodji neighborhoods. Completion of studies of the new MV/LV distribution networks and MV/LV substations, and the supply, installation, and commissioning of 7.09 km of MV lines; and 31.34 km of LV lines and 7 MV/LV transformers. The number of new connections in these neighborhoods is estimated at 8,350. • Energy access extension in the Sikoroni, Sibiribougou, and Kalabanbougou neighborhoods. Implementation studies for the new LV/MV distribution networks and MV/LV substations, the supply, installation, and commissioning of 6.58 MV lines; and 19.39 km of LV lines and 8 MV/LV transformers. The number of new connections in these neighborhoods is estimated at 1,724. • Energy access extension in Kalabancoro Est, Kati Sananfara, and Kantiguila neighborhoods. Implementation studies for the new MV/LV and MV/LV distribution networks, the supply, installation, and commissioning of 14.43 km of MV lines, 14.43 km of LV lines, and 12 MV/LV transformers. The number of new connections in these neighborhoods is estimated at 4,706. • Energy access extension in the Samako Katibougou, Samako Village, Babouillabougou, Nafadji Village Extension, and Sikoroni neigborhoods. Benefits focused on implementation studies for the new MV/LV and MV/LV distribution networks, the supply, installation, and commissioning of 4.2 km of MV lines, 7.33 km of LV lines, and 4 MV/LV transformers. The number of new connections in these neighborhoods is estimated at 650. • Creation of 2 MT 15 kV Kodialani departures. Implementation studies of new MV distribution networks, and supply, installation, and commissioning of 10.79 km of MT lines and 8.29 km of MT lines. These lines increased and strengthened the MV/LV transformer connections in the crossed areas. • Extension of energy access in the Lassa neighborhoods. Completion of studies of the MV/LV distribution networks and MV/LV substations, the supply, installation, and commissioning of 6.48 km of MV lines, 5.56 km of LV lines, 3 MV/LV transformers, and 88 streetlights. The number of new connections in these neighborhoods is estimated at 494. Page 44 of 69 The World Bank Mali Energy Support Project (P108440) Components, Activities, and Generated Outputs Inputs • Extension of energy access in the Tabacoro neighborhoods. Completion of studies of the MV/LV distribution networks and MV/LV substations, the supply, installation, and commissioning of 12.80 km of 4.27 km of MV lines, 7.16 km of LV lines, and 3 MV/LV transformers. The number of new connections in these neighborhoods is estimated at 636. • Electrification of DIO Village. Completion of studies of the MV/LV distribution networks and MV/LV substations, and the supply, installation, and commissioning of 5.89 km of MV lines, 4.23 km of LV lines, 3 MV/LV transformers, and 74 streetlights. The number of new connections in these neighborhoods is estimated at 376. ENERGY ACCESS EXPANSION IN REGIONAL CENTERS • Rehabilitation of the station of Paparah at Kayes. The output was a new building and installation of higher-performance equipment to replace the old and saturated substation, to increase the capacity of transformation, distribution, and secure the availability of the post. • Extension of MV/LV networks and electrification of surrounding localities in Kayes. Completion of implementation studies for the new LV/MV distribution networks and MV/LV substations, and the supply, installation, and commissioning of 17.57 km of MV lines, 11.85 km of LV lines, and 5 MV/LV transformers. The number of new connections in these neighborhoods and localities is estimated at 1,053. • Extension of MV/LV networks in Sikasso in the following districits: Medina, Babembabougou, Hamdallaye, Lafiabougou, Sanoubougou 1, Sanoubougou 2, Kapele Koulou, Bougoula Hameau, Wayerma, and Mamassoni. The output was the extension of the MV/LV distribution network and the supply, installation, and commissioning of 11.13 km of MV lines, 47.07 km of LV lines, and 17 MV/LV transformers with an MV energy metering system. The number of new connections in these neighborhoods is estimated at 4,184. • Extension of MV/LV networks in Koutiala. The output was the extension of the MV/LV distribution network in the following neighborhoods: o Phase 1: Implementation studies for the new LV/MV distribution networks and MV/LV substations of Hamdallaye, Sinzana, Medina Coura, Dar Salam, and Sanga, and the Page 45 of 69 The World Bank Mali Energy Support Project (P108440) Components, Activities, and Generated Outputs Inputs supply, installation and commissioning of 9.44 km of MV lines, 30.23 km of LV lines, and 11 MV/LV transformers with an MV energy metering system. The number of new connections in these neighborhoods is estimated at 2,687. o Phase 2: Key output included the production of implementation studies for the new HV/MV distribution networks and carrying out tests and commissioning of installations. • Extension of MV/LV networks in Ségou. In the neighborhoods of Angoulême and Sébougou, the output was the extension of the MV/LV distribution network by the creation of new networks and installation of MV/LV transformers, to facilitate access to electricity to the population living in these areas, and the completion of implementation studies for the new LV/MV distribution networks and MV/LV substations, and the supply, installation and commissioning of 2.71 km of MV lines, 21.82 km of LV lines, and 7 MV/LV transformers. The number of new connections in these neighborhoods is estimated at 1,939. Component 2: Energy SUPPLY OF ELECTRIC METERS efficiency and demand-side • Supply of conventional single-phase and three-phase LV electric meters and related management equipment. Achievement included the delivery of 8,533 single-phase 5-15A, 220 V conventional • A residential lighting meters; 1,600 single-phase meters 10–30 A; 533 single-phase meters 30–60 A; 2,533 three-phase program to replace meters 10–30 A; and 133 three-phase 30–60A and three-phase 10–100 A meters, 220 V with incandescent or neon light circuit breakers. The number of connections increased by 13,332. bulbs with CFLs, in urban and • Supply of single-phase and three-phase LV prepaid electric meters and associated equipment. rural households The delivery of 24,533 single-phase prepayment meters 5–60 A, 220 V; and 6,133 three-phase • A street lighting program to meters 10–100 A, 220 V with their circuit breakers. replace incandescent or • Strengthen the operational and commercial performance of the national electricity company neon light bulbs by CFLs EDM-SA, namely (a) the implementation of an RPP, (b) the installation of an advanced enterprise and/or high-pressure sodium resource planning and information system, and (c) the update the sector turnaround plan. vapor lamps, in key urban and rural centers • A public facilities’ lighting program to replace Page 46 of 69 The World Bank Mali Energy Support Project (P108440) Components, Activities, and Generated Outputs Inputs incandescent light bulbs by CFLs • Development of an overall energy efficiency strategy and regulatory framework to introduce energy efficient products and implementation of related public awareness programs, and provision of goods required for the purpose Component 3: Capacity TA and STUDIES building and institutional • Three firms (CABIRA, ICP, and INTEC GOPA) carried out the studies, procurement, and strengthening of key energy supervision and control of the works. sector institutions • Capacity building and EQUIPMENT institutional strengthening • Ordinary vehicle supplies and provision of special vehicles of key energy sector • Provision of research lab vehicle, machinery and tools for medium voltage line maintenance institutions work, and vehicle equipped with crane. SUPPORT TO THE PIU • Staff costs • Costs of supplies Page 47 of 69 The World Bank Mali Energy Support Project (P108440) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Role Preparation Koffi Ekouevi Task Team Leader Senior Economist Daria Goldstein Senior Counsel Wolfgang Chadab Senior Finance Officer Leopold Sedogo Energy Specialist Fabrice Bertholet Financial Analyst Sunil Mathrani Senior Energy Specialist Zie Coulibally Senior Infrastructure Specialist Jabesh Amissah Arthur Power engineer (Consultant) Amadou Konare Senior Environmental Specialist Abdoul-Wahab Semi Social Development Specialist Yvette Djachechi Senior Social Development Moustapha Ould el Bechir Procurement Specialist Maimouna Fam Financial Management Specialist Rokhayatou Sarr-Samb Procurement Specialist Nourredine Bouzaher Infrastructure Specialist Ashok Sarkar Senior Energy Specialist Samira El Khamlichi Environnemental Specialist Bipulendu Singh Energy Efficiency Specialist Mamadou Diarrasouba Monitoring and Evaluation Specialist Tawfik Ramtoolah Senior Public Sector Specialist Regine Mpoyi Program Assistant Aoua Toure Sow Program Assistant Page 48 of 69 The World Bank Mali Energy Support Project (P108440) Supervision/ICR Franklin Koffi S.W. Gbedey Task Team Leader(s) Mahamadou Bambo Sissoko, Boubacar Diallo Procurement Specialist(s) Tahirou Kalam Financial Management Specialist Cheikh A. T. Sagna Social Specialist Aoua Toure Sow Team Member Emeran Serge M. Menang Evouna Environmental Specialist Natalie Tchoumba Bitnga Team Member Leonard Ewang Ngumbah Wolloh Team Member Madina Tall Team Member Mahamadou Ahmadou Maiga Team Member A. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY08 38.820 293,191.71 FY09 42.916 259,918.31 FY10 0 0.00 Total 81.74 553,110.02 Supervision/ICR FY10 12.211 75,919.31 FY11 25.218 114,363.97 FY12 14.653 145,668.11 FY13 23.196 119,970.25 FY14 33.890 126,924.58 FY15 18.975 97,454.32 Page 49 of 69 The World Bank Mali Energy Support Project (P108440) FY16 16.461 127,962.52 FY17 15.331 111,739.53 FY18 7.517 57,350.86 FY19 7.166 82,936.55 Total 174.62 1,060,290.00 Page 50 of 69 The World Bank Mali Energy Support Project (P108440) ANNEX 3. PROJECT COST BY COMPONENT Amount at Amount at the 2013 Actual at Project Percentage of Components Approval Restructuring Closing (US$M) Approval (US$M) (US$M) (US$M) Transmission and Distribution 107 78.06 96.4 Reinforcement and 81 Extension Energy Efficiency and Demand-side 5 5 4.66 93.2 Management Capacity and Institutional 9 8 9.46 105.1 Strengthening of Key Sector Institutions Total 120.0 95 92.19 97.0 Page 51 of 69 The World Bank Mali Energy Support Project (P108440) ANNEX 4. EFFICIENCY ANALYSIS Methodology and Sources 1. The economic and financial analysis followed World Bank guidance documents and World Bank Directive: Investment Project Financing.4 Following the Guidance Note (2014),5 this analysis addressed (a) the project’s development impact; (b) the public sector provision or financing as the appropriate vehicle; (c) the World Bank’s value added; (d) financial and environmental sustainability; and (e) the project justification nexus—results, risks, and economic rationale. This nexus is explained as follows. The PDO is to improve the access and efficiency of electricity services in Bamako and in other targeted areas of the country. The analysis examined the causal chain that links project activities and inputs to these objectives, including the risk and sensitivity analysis. 2. The completion analysis covered 99 percent of the total project cost. The appraisal analysis covered 93 percent of the total project cost. The available actual data were limited. Thus, assumptions based on the secondary data supplemented the analysis, as presented in Table 4.1. Summary of Key Data and Assumptions and also explained in the following paragraphs. Data sources were the project performance and fiduciary documents, International Monetary Fund reports, EDM-SA reports, the Master Plan for 2014–2035, and other internal and external data from websites. The price level used in the appraisal analysis was not available in the PAD. However, as the PAD’s economic analysis (Table 12, page 64) started from 2009, it was assumed that the appraisal analysis was in 2009 real prices. Therefore, the completion analysis was presented in 2009 real prices. Key Differences between Appraisal and Completion Analyses 3. Both analysis at appraisal and at completion used the cost-benefit analysis approach but the completion analysis had the following differences in the overall project: • The discount rate that was used in the appraisal analysis was not available. Pursuant to the World Bank’s guidance6 and in consultation with the country economist of the World Bank, the completion analysis used the social discount rate of 2.6 percent. • Financial analysis of the project was conducted. At appraisal, the financial analysis was on the EDM-SA. The interest rate of 2.5 percent of the GoM’s subsidiary financing of IDA to EDM-SA was assumed to be the FOCC and resulted in the real interest rate of 0.4 percent. The financial analysis was conducted from the total investment point of view. 4 OPSPQ (Operations Policy and Quality). 2014. Investment Project Financing Economic Analysis Guidance Note ; Meier, P. 2017. Power Sector Investment Projects: Guidelines for Economic Analysis; World Bank. 2017b. Shadow Price of Carbon in Economic Analysis Guidance Note. 5 OPSPQ (Operations Policy and Quality). 2014. Investment Project Financing Economic Analysis Guidance Note. 6 Fay, M., S. Hallegate, A. Kraay, and A. Vogt-Schilb. 2016. Discounting Costs and Benefits in Economic Analysis of World Bank Projects. Data sources to arrive 2.6 percent was IMF. Page 52 of 69 The World Bank Mali Energy Support Project (P108440) • Values were estimated as economic values and conversion factors, such as foreign exchange premium (shadow exchange rate), 7 economic opportunity cost of labor (shadow wage rate), 8 fuel inventory (working capital), and so on. Using the true economic value or opportunity cost of an activity to capture the benefits and costs to society is consistent with the World Bank guidance.9 • Analysis of the entire project was presented in addition to individual activities and components. • Levelized energy saving costs (costs to achieve energy saving), distribution analysis, and risk analysis were presented. • Pursuant to the World Bank policy, GHG impacts assessed carbon dioxide equivalent (CO2e), including CO2, methane (CH4) and nitrous oxide (N2O) of Component 1 and Component 2 from diesel oil, heavy fuel oil [HFO], and kerosene and GHG MAC and followed the 2017 World Bank guidance on carbon prices. • Other emissions impacts on health (PM 10, nitrogen oxides [NOx] and sulphur oxides [SOx]) were assessed from external combustion engines (HFO, steam), internal combustion engines (diesel oil gas turbines and reciprocating engines), and kerosene. 4. Component 1 had the following major differences in the analysis between appraisal and completion. • Reduction of technical losses. At the project restructuring in 2013, a single indicator for total distribution losses replaced two separate existing indicators (one for technical and one for nontechnical losses) which could not be measured separately with adequate precision (Restructuring Paper, 2013). Furthermore, the indicator represented the entire interconnected network and not the project-specific portions of the network. Therefore, the completion analysis relied on the estimated 2 percent technical loss reduction at appraisal in making an assumption. When 30 kV distribution network reinforcement works were completed, the distribution system loss was reduced by 0.7 percent in 2014. Also, when the major work was completed by June 2016, the distribution system loss was reduced by 1.7 percent. These were assumed to be attributable to the project. At appraisal, the marginal HFO power plant capacity cost has been estimated at US$257 per kW per year. At completion, based on the master plan, an updated estimate of capital charge of HFO power plant at US$78 per kW per year was used. At appraisal, the marginal energy cost US$0.18 per kWh was calculated as a weighted average incremental cost of peak and off-peak energy. 7 Estimated based on the methodology by Jenkins, Glenn P. 2008. Program on Cost-Benefit Analysis on Economic Analysis/Project Appraisal; Glenday, Graham. 2011. “Program on Project Appraisal and Risk Management.” May 15–June 10, 2011, Economic Opportunity Cost of Foreign Exchange, Duke Center for International Development. 8 Estimated based on the methodology by Jenkins, G., and A. Klevchuk. 2006. Appraisal of El-Kureimat Combined Cycle Power Plant; Jenkins, G.P., C. Y. K. Kuo, and A.C. Harberger. 2011. “The Economic Opportunity Cost of Labor.” Chapter 12. Cost-Benefit Analysis for Investment Decisions. (2011 Manuscript). 9 OPSPQ (Operations Policy and Quality). 2014. Investment Project Financing Economic Analysis Guidance Note ; Belli, P., J. R. Anderson, H. N. Barnum, J. A. Dixon, and J-P Tan. 2001. Economic Analysis of Investment Operations: Analytical Tools and Practical Applications. Page 53 of 69 The World Bank Mali Energy Support Project (P108440) At completion, the average marginal energy cost over 2014–2034 was estimated at US$0.21 per kWh including peak (gas turbine) and off-peak (HFO) generation, transmission and distribution costs, or US$0.19 per kWh including only peak and off-peak generation cost. • Additional sales. At appraisal, additional sales were valued at EDM-SA’s average tariff. At completion, economic benefits of additional sales from the newly connected consumers were estimated from avoided energy in the without project (counterfactual) scenario. These avoided costs were estimated from lighting, cell phone charge, radio, solar panel, and diesel gensets (Table 4.1).10 • At appraisal, fuel saving was about US$0.2 per kWh. At completion, average fuel saving (HFO and diesel fuel) for 2014–2034 was US$0.19 per kWh. • In the counterfactual scenario (without project), the completion analysis assumed similar network investments as the project would occur and be completed by 2027 because it would be unrealistic to assume such major network segments would be left to deteriorate or not be extended for such a long time (up to 2035). This assumption was supported by the fact that the dropped network segments of the project at the project restructuring in 2013 have been already financed by the West African Development Bank and EDM-SA. 5. The major differences in the analysis between appraisal and completion for Component 2 were that the number of CFLs were 1,000,000 at appraisal and 250,000 at completion and the types and number of streetlights at appraisal were 15,000 high-pressure sodium lamps and at completion were 1,400 solar streetlights.11 Also, the completion analysis did not include costs of setting new generation capacity saving because of the short life of the CFL (maximum 5 years) and solar streetlights (maximum 10 years; warranty information not available; many solar streetlights were not working, for example, only 20 out of 290 installed were working in Mopti in 2017).12 Contribution to PDO Achievement 6. The overall summary results in table 4.1 showed that the project’s activities and inputs would meet the PDO with an ENPV of CFAF 40 billion (US$84 million) with a levelized energy saving cost of CFAF 100 per kWh or US$0.21 per kWh at 2.6 percent discount rate, or about 0.8 percent of GDP in 2009, and an EIRR at 21 percent. At appraisal, the total project’s ENPV and EIRR were not presented in the PAD. However, the PAD presented the ENPV and EIRR of Component 1 and benefits of Component 2. Therefore, the analysis of each component is presented later in this annex. 10 Estimated from: Triodos Facet 2013. Analysis of Household and Individual Lighting Consumption in Mali; Rural Electrification Hybrid System Project (P131084) PAD 2013; Jennifer Tracy and Arne Jacobson. 2012. The True Cost of Kerosene in Rural Africa. April 25, 2012. Lighting Africa; and Mills, Evan. 2013. Technical and Economic Performance Analysis of Kerosene Lamps and Alternative Approaches to Illumination in Developing Countries. Lawrence Berkeley National Laboratory, June 2003. 11 Initially, total 1,650 solar streetlights were procured. However, it was 1,400 because the procurement process for 250 public lights was excluded from the project financing, due to a change in technical specifications that was not authorized (ISR, No.11), February 2016. 12 Source: Sylla, Lanciné 2018. Rapport D’achevement Du Projet, Version Finale (Borrower’s ICR) . Page 54 of 69 The World Bank Mali Energy Support Project (P108440) Table 4.1 Economic Analysis Overall Results Summary (2009 real prices) Total Project Economic Electricity Costs Based on Analysis Total Saving At Completion Total ENPV Disbursement Conducted EIRR Levelized Year (%) Cost/kWh CFAF (millions, except levelized cost) 38,961 99% 39,874 21% 100 US$ (millions, except levelized cost) 85 84 0.21 Percentage of GDP in 2009 0.8% 0.8% 0.8% At appraisal Total project Economic costs based on analysis disbursement conducted Levelized year (%) Total ENPV Total EIRR Cost/kWh CFAF (millions, except levelized cost) 48,080 US$ (millions, except levelized cost) 102 93% Not available Percentage of GDP in 2009 1.0% 0.9% GHG and Local Emissions 7. As a total project (Components 1 and 2), the total CO2e ton abated is about 300,000 tons. Following the World Bank (2017),13 with the low value of CO2e, total ENPV was CFAF 58 billion (US$123 million) and EIRR at 22 percent with a net GHG MAC of negative (minus) CFAF 247,936 per CO2e ton or US$525 per CO2e ton. With the high value of CO2e, total ENPV was CFAF 62 billion (US$132 million) and EIRR at 24 percent with a net GHG MAC of negative (minus) CFAF 265,793 per CO2e ton or US$563 per CO2e ton. The switching value was negative (minus) US$361 per CO2e with a sensitivity indicator of 0.07 (CO2e low values US$37 and high US$75 in 2017, which were the original values in the guidance note before the price level adjustment in the analysis). Including the local emissions (NOx, PM10, and SOx) in addition to high and low CO2e values, the results of ENPVs and EIRRs differed little from those with only CO2e (table 4.2). With regard to the amount of avoided emissions, the appraisal estimated only CO 2 emissions for Component 2 and reported two different values in the PAD, (a) total of 36 tons in page 10 and (b) total of 59 tons in pages 62–63. No information was available how these were calculated or if these values were discounted present values or not, which are discussed in the analysis of Component 2. At completion, in undiscounted values, total CO2 reduction of Component 2 was about 54,000 tons, and the total CO2e reduction including Components 1 and 2 was about 300,000 tons.14 Table 4.2. Emissions (2009 real prices) Completion (Appraisal unavailable) Total Total Total ENPV (2.6% Social ENPV EIRR Total EIRR with with CO2e Switching Value of US$ per CO2e Discount with with CO2e Low, NOx, Low, NOx, ton Rate) CO2e CO2e PM10, SOx PM10, SOx Low Low CFAF 58,210 22% 58,210 22% −361 13 World Bank 2017. Guidance note on shadow price of carbon in economic analysis. November 12, 2017. Shadow price of carbon in economic analysis Cover Note. 14 The World Bank GHG reporting requires CO e. 2 Page 55 of 69 The World Bank Mali Energy Support Project (P108440) (millions) US$ (millions) 123 123 SI % GDP in 2009 1.2% 1.2% 0.07 Net GHG MAC −247,936 −247,936 (CFAF per CO2e ton) Net GHG MAC −525 −525 (US$ per CO2e ton) (2.6% social Total Total Total ENPV Total EIRR with discount rate) ENPV EIRR with CO2e CO2e High, NOx, with with High, NOx, PM10, and SOx CO2e CO2e PM10, and High High SOx CFAF 62,402 24% 62,402 24% (millions) US$ (millions) 132 132 % GDP in 2009 1.3% 1.3% Net GHG MAC −265,793 −265,793 (CFAF per CO2e ton) Net GHG MAC −563 −563 (US$ per CO2e ton) Avoided GHG emissions (ton) Appraisal Completion (Avoided Emissions for 2012–2035, undiscounted) CFLs Streetlights CFLs Streetlights Transmission and Distribution PAD page 10, CO2 36 CO2 45,746 8,177 250,594 PAD page 62–63, 59 53,924 CO2 56 2.97 304,517 CO2e Not available CO2e 45,826 8,192 251,226 305,243 Completion, avoided local emissions for 2012 –2035 (tons, undiscounted) Appraisal data not available NOx PM10 SOx 4,273 289 284 8. Component 1. At completion (table 4.3), the transmission and distribution component’s ENPV was CFAF 34 billion or US$72 million and the levelized cost for energy saving was CFAF 110 per kWh or US$0.23 per kWh with an EIRR at 16 percent compared to the appraisal’s ENPV of CFAF 4 billion or ENPV of about US$9 million with an EIRR at 12 percent. However, the value of the discount rate used in the appraisal was not available. From Table 12 (pages 64–65) of the PAD, by assuming the missing years for 2026–2029 to be the same values as for 2015–2025 and 2030, the EIRR was 14 percent and the NPV was about US$9 million, and the discount rate was about 11.5 percent. As a reference comparison, when the completion analysis used 11.5 percent discount rate, the NPV was CFAF 6 billion or US$13 million, which were comparable to the appraisal. Page 56 of 69 The World Bank Mali Energy Support Project (P108440) Table 4.3 Component 1 (2009 real prices) Appraisal (ENPV discount rate unknown) Completion (ENPV 2.6% discount rate) Electricity Saving Electricity Saving ENPV EIRR ENPV EIRR Levelized Cost per Levelized Cost per kWh kWh CFAF (millions, except levelized cost) 4,250 12% Not available 34,154 16% 110 US$ (millions, except levelized cost) 9 72 0.23 9. Component 2. CFL. At completion (table 4.4), a total of 250,000 CFLs, equivalent of 4 MW, resulted in annual gross generation saving of 14 GWh and total EPV of avoided cost of generation of CFAF 5 billion or US$11 million over the maximum CFL life of 5 years (assumed from the third year, 30 percent of the CFLs will be degraded annually), with a levelized cost of energy saving of CFAF 8 per kWh or US$0.02 per kWh. At appraisal, a total of 1,000,000 CFLs, equivalent of 19 MW, resulted in annual energy saving of 56 GWh. The two different values of peak demand saving (a) 35 MW (page 62) and (b) 38 MW (page 66) of the PAD showed the same avoided cost of setting up new generation of CFAF 14 billion or US$31 million (PAD, pages 62 and 66). As noted in the earlier subsection of differences between the appraisal and completion analysis, because the CFL life is expected to be short, up to 5 years, the completion analysis did not consider that the use of CFLs would lead to the change in investment decision on adding more power plants. At completion, the avoided total CO2 emission reduction was 45,700 tons CO2 and that of CO2e was 46,800 tons CO2e. At appraisal, CO2 emission reduction was 56 tons CO2 calculated from CO2 emission reduction of 1 kg CO2 per kWh. No information was available on how 56 tons CO2e was arrived at, given the annual energy saving was 56 GWh or possibly, it was meant to be 56,000 tons CO 2. This reporting is also inconsistent with the total of 36 ton saving of CO2 of Component 2 reported in the main text (page 10, PAD). The ENPV at completion was CFAF 6 billion or US$14 million and a very high EIRR of 1,300 percent, as common in other CFL projects.15 At appraisal, neither the ENPV nor the EIRR was available. Table 4.4. Component 2: CFL (2009 real prices) Appraisal Completion Total 1,000,000 CFLs (MW) 19 Total 250,000 CFLs (MW) 4 Peak demand savings (MW) page 62, PAD 35 Peak demand savings (MW) 5 Peak demand savings (MW) page 66, PAD 38 Annual energy savings (MWh) 56,182 Annual gross energy savings (MWh) 13,849 Avoided total gross generation (MWh) Not available Avoided total gross generation (MWh) 69,247 Avoided cost of setting up new Avoided cost of generation (generation generation, pages 62 and 66, PAD cost), EPVs CFAF (millions) 14,536 CFAF (millions) 5,318 US$ (millions) 31 US$ (millions) 11 CO2 emission reduction (tons) 56 Total CO2 emission reduction (tons) 45,746 CO2 emission reduction (kg CO2 per CO2 emission reduction (kg CO2 per kWh) 1 kWh) 0.661 15Examples: World Bank Morocco Office National de l'Electricité et de l'Eau Potable (ONEE) Support Project and Asian Development Bank Philippine Energy Efficiency Project. Page 57 of 69 The World Bank Mali Energy Support Project (P108440) Total CO2e emission reduction (tons) Total CO2e emission reduction (tons) 45,826 CO2e emission reduction (kg CO2e per Not available CO2e emission reduction (kg CO2e per kWh) kWh) 0.662 Completion (appraisal not available) Electricity Saving ENPV EIRR Levelized Cost/kWh CFAF (millions, except levelized cost) 6,442 1300% 8 US$ (millions, except levelized cost) 14 0.02 10. Component 2. Street Lighting. At completion, total 1,400 streetlights with solar-powered LED lamps resulted in an estimated peak demand savings of 0.4 MW and annual gross energy savings of 1 GWh, the total EPV of avoided cost of generation was CFAF 0.9 billion or US$21 million over the maximum LED and battery life of 10 years (assumed solar streetlights annual malfunctioning rate of 10 percent from the fifth year), with a levelized cost of energy saving of CFAF 232 per kWh or US$0.5 per kWh. At appraisal, a total of 15,000 high-pressure sodium lamps equivalent of 2 MW resulted in annual energy saving of 3 GWh with an avoided cost of generation of CFAF 0.8 billion or US$2 million. The method of calculation of CO2 emission reduction of 2.97 ton was not available. At completion, the avoided total CO2 emission reduction was 8,180 tons CO2 and that of CO2e was 8,190 CO2e ton. At completion, table 4.5 suggests a large uncertainty in the working of streetlights. In the 500 streetlights bid evaluation, which did not materialize, the bidders had offered 10–30 years of warranties for the photovoltaic module. However, the warranties information was not available for 150 and 1,500 streetlights. Nonetheless, it was assumed that at the end of 10 years, the residual values of 50 percent of photovoltaic modules were included in the NPV and EIRR, yet it resulted in a negative (minus) ENPV of CFAF 0.7 billion or US$ 2 million and the EIRR could not be calculated. Due to uncertainties of life years of streetlights, the completion analysis did not consider the use of the solar-powered LED streetlights that would lead to the change in investment decision on adding more power plants. Table 4.5. Component 2. Street Lighting (2009 real prices) Appraisal Completion Total 15,000 high-pressure sodium lamps Total 1,400 LED lamps (MW) 0.07 (MW) Peak demand savings (MW) 2 Peak demand savings (MW) 0.4 Annual energy savings (MWh) 2,966 Annual gross energy savings (MWh) 1,027 Avoided total gross generation (MWh) Not Avoided total gross generation 12,327 available (MWh) Avoided cost of generation Avoided cost of generation, EPVs CFAF (millions) 767 CFAF (millions) 909 US$ (millions) 2 US$ (millions) 2 CO2 emission reduction (tons) 2.97 Total CO2 emission reduction (tons) 8,177 CO2 emission reduction (kg CO2 per kWh) Not CO2 emission reduction (kg CO2 per 0.663 available kWh) Total CO2e emission reduction (tons) Total CO2e emission reduction (tons) 8,192 CO2e emission reduction (kg CO2e per kWh) CO2e emission reduction (kg CO2e per 0.665 kWh) Completion (appraisal not available) ENPV EIRR Electricity Saving Levelized Cost/kWh Page 58 of 69 The World Bank Mali Energy Support Project (P108440) CFAF (millions, except levelized cost) −723 Not computable 232 US$ (millions, except levelized cost) −2 0.5 Location State of the Streetlights Installed Functioning Check Date Bamako 214 587 November 2016 Kayes 285 94 February 2018 Koulikoro 250 Excluded Sikasso 325 59 April 2017 Ségou 286 No information Mopti-Sévaré 290 20 October 2017 Total 1,650 760 Financial Analysis 11. As presented in table 4.6, the completion financial analysis was conducted for the same 99 percent of the project costs as the economic analysis. The total FNPV was CFAF 151 billion or US$319 million discounted at FOCC of 0.4 percent, real (or 2.5 percent nominal interest rate of subsidiary financing). This FNPV was equivalent of 3 percent of GDP in 2009, which benefits both EDM-SA and the owner of EDM-SA, the Government. The financial analysis was conducted from the total investment point of view as components included different implementing agencies. However, Component 1 was implemented by EDM-SA with subsidiary financing terms of 2.5 percent nominal interest rate, repayable in CFA francs over 27 years, inclusive of a grace period of 7 years. Thus, the ADSCR and LLCR were also estimated only indicatively in table 4.6 and the reasons of negative values in the final years, especially the last repayment year 2035 was because the last year 2035 was set as the residual year and transmission and distribution assessed life could not be expected to be operating perfectly in those late years without additional investments for updating. Components 1 and 2, except streetlights, resulted in positive FNPVs, EIRRs, and levelized energy saving cost as presented in table 4.6. Table 4.6. Financial Analysis Summary (2009 real prices) Component 1: Transmission and Component 2: Component 2: Total Distribution CFLs Streetlights FNPV CFAF, 147,002 4,653 −1,032 150,6 millions 24 FNPV US$, 311 10 −2 319 millions % GDP in 2009 3.1% 0.1% −0.02% 3.1% FIRR 28% 1217% −17% 31% Electricity saving 96 8 206 90 Levelized cost CFAF per kWh Electricity Saving 0.2 0.02 0.4 0.2 Levelized Cost US$ per kWh 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 ADS 0.30 1.53 2.12 3.03 3.43 4.40 7.85 7.66 5.47 5.15 CR LLCR 3.64 3.93 4.12 4.30 4.42 4.51 4.53 4.16 3.75 3.54 Page 59 of 69 The World Bank Mali Energy Support Project (P108440) 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 5.98 4.93 3.29 3.66 4.08 4.55 5.08 5.67 7.72 −16.2 7 3.32 2.93 2.61 2.49 2.25 1.81 1.02 −0.51 −3.90 −32.1 4 Aspects of Design and Implementation Efficiency 12. Actual administrative costs (of the borrower and implementing agency) were about 1.4 percent of the total project cost, mostly the costs of buildings, vehicles, furniture, computers, and consultants. However, as the TA included many fiduciary and M&E trainings, including TA costs as part of the administrative costs resulted in 9 percent of the project costs. The Government and EDM staff costs financed by own regular budgets that were spent in the administration of the project was not available. 13. Cost and project life. The actual project costs were lower than the expected costs at appraisal due to the partial cancellation of IDA credit with the reduced project activities. The efficiency of achievements of the results were not affected by the partial cancellation. The project closing date was extended from September 2014 to June 2018 and project implementation was affected by political events in Mali in 2012 that led to freezing on disbursements. The activities with implementation and procurement delay were cancelled at the restructuring in 2013 and the key transmission and distribution activities have already been completed by 2016. Thus, the time overrun did not affect the efficiency of the project achievements. 14. Staff turnover. TTLs changed five times over the nearly 9 years of project implementation. Two TTLs were based in Mali and other energy specialists were based in neighboring countries such as Burkina Faso. There was no compelling information that the staff turnover affected the efficiency of the project. Page 60 of 69 The World Bank Mali Energy Support Project (P108440) ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS Project Context and Rationale 1. At the end of the decade of 2000s, the energy sector in Mali was still marked by largely insufficient access to electricity, especially outside urban centers. For a national population estimated in 2009 at 14.5 million inhabitants, the electricity supply rate in urban areas stood at only 20 percent. Energy demand was increasing by about 10 percent per year. The public electricity company, EDM-SA, did not have sufficient capacity for energy production, transmission, and distribution; it did not generate sufficient revenue to invest its own funds in the modernization of its production facilities. EDM-SA was therefore forced to rent generators and purchase energy from neighboring producers; however, these solutions were costly and weighed heavily on its operating balance. 2. The public institutions in the sector, namely the Ministry of Energy and Water Resources (MEE) and CREE, which are responsible for assisting EDM-SA, have limited capacity to carry out their regulatory support and control tasks. 3. Hence the GoM requested and obtained from the World Bank (IDA) the financing of the Energy Support Project (PASE). The Credit Agreement, signed on June 26, 2009 between the GoM and the World Bank, entered into force on November 25, 2009. The project closing date, initially scheduled for September 30, 2014, was successively extended (December 31, 2015, then March 31, 2016 according to Letter No. 01539/MEF-SG of May 8, 2015) to June 30, 2018. Project Presentation: Objectives and Institutional and Organizational Arrangements 4. PASE’s development objective is to improve access to electricity and ensure efficiency of electricity supply in Bamako and targeted localities across the country. 5. Specifically, the project will support the Government's efforts to achieve the following objectives: • Promote efficient use of production capacity by upgrading transmission and distribution networks • Continue to rehabilitate EDM-SA to achieve an adequate level of financial viability and operational efficiency • Continue to expand people's access to electricity 6. PASE was therefore structured into three components: • Component 1: Upgrading and extension of EDM-SA's transmission and distribution network • Component 2: Energy efficiency and demand management Page 61 of 69 The World Bank Mali Energy Support Project (P108440) • Component 3: Institutional support and capacity building in the energy sector 7. The amount of funding provided by the World Bank for PASE was SDR 80.7 million, equivalent to US$120 million. Its objective was to improve access to electricity and energy efficiency in Mali. 8. The initial budget was readjusted following restructuring of the project in 2013 and was reduced to SDR 63.9 million or US$95 million. 9. Three executing agencies were responsible for implementing the project, which was managed by a Project Coordination Unit (PCU). The three executing agencies are • EDM-SA; • CREE; and • MEE through its two central services, the National Energy Directorate and the Finance and Equipment Department. Implementation and Outcomes 10. At project completion (June 30, 2018), the cost of PASE stood at CFAF 48,707 million out of a revised budget of CFAF 49,691,000 million which represents an implementation rate of 98.51 percent. 11. The project carried out works to significantly upgrade EDM-SA's transmission and distribution network in Bamako and urban centers (Component 1), distribute efficient domestic and public lighting systems (Component 2), and build the capacity of the electricity utility operator and public institutions and structures in the energy sector (Component 3). 12. Specifically, PASE provided the following major goods and services under each of the components. Component 1: Upgrading Of EDM-SA’s Transmission and Distribution Network 13. The cost of this component stood at CFAF 41,272 million, broken down as follows: • HV transmission structures in Bamako-Fana-Ségou o Equipment of second three-phase circuit of the 150-kV line between Kodialani and Sirakoro substations o Rehabilitation of the 150 kV Bamako-Fana and Fana-Ségou lines o Switchover mechanism of HV substation in Fana • MV distribution structure in Bamako, Kati, and Kayes o Rehabilitation of the 30/15 kV MV substation in Balkou Page 62 of 69 The World Bank Mali Energy Support Project (P108440) o Construction of the 30/15 kV DCO substation o Replacement of Badala substation (lot 3) o Extension of Kalabancoro substation o Replacement of 30/15 kV substation in Sotuba o Extension of 15 kV Kodialani substation o Construction of 30/15 kV substation in Kati o 30 kV underground links between Kalabancoro and Badala substations o 30 kV underground links between Badala and Balingué substations o 30 kV underground links between Dar Salam, Balingué, and Balkou substations • Extension structures for MV/LV distribution networks and electrification in Bamako and Kati o Extension of MV/LV networks in Bamako and Kati: Yirimadio Sotuba, Yirimadio Stadium, and Sabalibougou and Titibougou neighborhoods o Extension of MV/LV network in Bamako and Kati: • Samako Katibougou, Samako Village, Babouillabougou, Nafadji Village Extension, and Sikoroni neighborhoods • Yirimadio Sotuba, Yirimadio Stade, and Sabalibougou and Titibougou neighborhoods • Niamakoro and Sokorodji neighborhoods • Sikoroni, Sibiribougou, and Kalabanbougou neighborhoods • East Kalabancoro (Kabala), Kati Sananfara, and Kantiguila neighborhoods o Extension of Bamako MV/LV network Phase 2: Samako Katibougou, Samako Village, Babouillabougou, Nafadji Village Extension, and Sikoroni neighborhoods o Creation of 2 15 kV MV Kodialani outlets: Outlet No. 1 (Route de Siby – Marché de Sébéninkoro) and Outlet No. 2 (Route de Samaya – Grand Séminaire) o Electrification of Lassa neighborhood o Electrification of DIO Village o Electrification of Tabacoro neighborhood Page 63 of 69 The World Bank Mali Energy Support Project (P108440) • MV transmission and MV/LV distribution structure in Kayes o Replacement of Paparah Kayes substation o Extension of MV/LV networks and electrification of surrounding localities in Kayes: Bencounda neighborhood and Dar Salam, Samé Ouolof, and Samé Agriculture localities • MV/LV distribution structure in Sikasso, Koutiala, and Ségou o Extension of MV/LV networks in Sikasso: Médine, Babembabougou, Hamdallaye, Lafiabougou, Sanoubougou 1, Sanoubougou 2, Kapele Koulou, Bougoula Hameau, Wayerma, and Mamassoni neighborhoods o Extension of MV/LV networks in Koutiala o Extension of MV/LV networks in Ségou: Angoulême and Sébougou neighborhoods • Supply of meters and connection accessories o Supply of 72,100 conventional single-phase and three-phase LV electricity meters and associated equipment o Supply of 58,700 single-phase and three-phase LV prepayment electricity meters and associated equipment o Supply of connection accessories (cables, circuit breakers, and boxes). Component 2: Energy Efficiency and Energy Demand Management 14. The cost of this component stood at CFAF 2,333,491,810, broken down as follows: • Technical assistance o Consultancy services • Supply of equipment o Procurement and distribution of 250,000 low energy lamps to EDM-SA subscribers (private customers and public services) o Supply and installation of 2,186 solar street lamps for public lighting in urban, semi- urban and rural centers. • Miscellaneous services o Information and communication on energy efficiency. Page 64 of 69 The World Bank Mali Energy Support Project (P108440) Component 3: Building the Capacity of Energy Sector Institutions 15. The cost of this component stood at CFAF 5,101,383,654, broken down as follows: • For EDM-SA o Technical Assistance • Studies and bidding documents (CABIRA): CABIRA design firm prepared the preliminary and detailed designs, as well as the bidding documents • Procurement: ICP firm assisted EDM-SA in the procurement process • Works supervision and control: INTEC GOPA/CTEXCEI consulting group assisted EDM-SA in works supervision and control o Training and Development • 700 persons-training and/or refresher courses were held o Equipment, including: • 4 special vehicles, contributing to security and availability of electricity supply: ▪ One research laboratory vehicle ▪ One vehicle-machine with medium voltage line maintenance work tools ▪ One vehicle equipped with crane ▪ One vehicle equipped with a nacelle • About 66 ordinary vehicles • Computer equipment (including 20 computers) and office automation • Furniture and other materials (including teaching materials) • For the PCU, executing agencies and various MEE structures o Training and Development • 450 persons-training and/or refresher courses were held • Equipment, including: ▪ 32 ordinary vehicles Page 65 of 69 The World Bank Mali Energy Support Project (P108440) ▪ Computer equipment (including 121 computers) and office automation ▪ Furniture and other equipment 16. In total, the overall PASE outcomes are as follows: • Construction of 285 km of MV network (Kayes, Bamako, Sikasso, Koutiala, and Ségou) • Construction of 865 km of LV network (Kayes, Bamako, Sikasso, Koutiala, and Ségou) • Construction of 104 public distribution substations (Kayes, Bamako, Sikasso, Koutiala, and Ségou) • Construction of six 30/15 kV substations, comprising two new and four replacements (Bamako, Kati, and Kayes) • Extension of two 15-kV substations (Kalabankoro and Kodialani) • Installation of 95 km of 30 kV underground network in Bamako • Rehabilitation of 150 kV Bamako-Ségou line (220 km) • Switchover mechanism for the 150-kV substation in Fana • Construction of the second 150 kV Kodialani-Sirakoro three-phase circuit • Procurement of 72,100 meters (13,400 conventional meters and 58,700 prepayment meters), connection equipment (cables, circuit breakers, and boxes) • Procurement and distribution of 250,000 low energy lamps and supply and installation of 2,186 solar street lamps • 1,150 person-training sessions16 in the energy sector (700 in EDM-SA and 450 in MEE departments) • Broadcasting of TV and radio spots on energy saving • Organization of seminars and workshops • Equipping MEE and EDM-SA structures with furniture, computer equipment, office automation and vehicles • Financing of studies (Master Plan, MTEF, Pricing, and Training Plans) 16 The same worker is counted individually for all the separate sessions which he or she attends, where necessary. Page 66 of 69 The World Bank Mali Energy Support Project (P108440) • Improvement of EDM-SA's IT system • Preparation for procurement of 6,000 smart meters by EDM-SA (4,000 to LV and 2,000 to be changed to MV) 17. The goods and services provided, particularly between 2011 and 2017, helped to • Increase EDM-SA's number of domestic LV subscribers from 259,438 to 513,601, which almost doubled the number of electricity utility customers; • Bring electric light to main streets, public squares, and public buildings in about 30 towns and rural centers across the country; and • Improve the working conditions and performance of EDM-SA, CREE and some 10 public services in the energy sector with regard to receiving, preparing, and processing their administrative and technical documents, and managing their assets. Lessons Learned 18. The project outcomes significantly improved the national electricity system, as well as the capacities of the institutions and public services in charge of energy. However, the project did not fully achieve the expected outcomes, particularly with regard to grid upgrading, reducing grid energy losses and peak demand, and upgrading regulatory skills (including electricity pricing). 19. The factors that limited achievement of the project objectives are the following: • Inadequate ownership of project objectives by beneficiary structure teams, which initially were not closely involved in the design/planning process, and which often changed in composition during project implementation • Selection of imprecise or vague indicators that are difficult to evaluate • Inadequate governance firmness in fulfilling public commitments • The institutional and political crisis in Mali from 2012 20. Despite these limitations, the project’s impact, recognized as very significant by the beneficiaries, can be consolidated with additional measures, in particular • For EDM-SA o Adoption and application of more effective procedures in the preparation and execution of major contracts. o Diligent finalization of studies for the construction of major structures removed from PASE (150 kV loop around Bamako, income protection program). Page 67 of 69 The World Bank Mali Energy Support Project (P108440) o Implementation of the income protection program. o Increased staffing and equipment, as well as moving the Professional Development Centre to a larger site. • For the Government o Lifting of restrictions on EDM-SA's management autonomy and on CREE's independence in setting electricity tariffs. o Activation of the search for financing for national hydropower projects and extension of subregional interconnection structures (Ghana-Burkina Faso-Mali, Guinea-Mali, and so on). o Stabilization of staff responsible for implementing project components. o Better safeguarding, by beneficiary services, of documents and equipment acquired under the project, particularly through digital storage of documents, maintenance of physical archives, and careful maintenance of the machinery and equipment acquired. o Taking of sound decisions to review electricity tariffs over a probationary period, in close consultation with operators and civil organizations. o Stronger arbitration in the distribution of public funds allocated to electricity operators (EDM-SA, Malian Rural Energy Agency [Agence Malienne pour le Développement de l'Energie Domestique et d'Electrification Rurale]) and in the rational setting of tariffs. • For the World Bank o Involvement, from the outset, of the major relevant structures in project design and planning for the development of the electricity subsector in Mali. o Rebalancing of financing of the supply and demand components to make the electricity development support policy in Mali more coherent. Page 68 of 69 The World Bank Mali Energy Support Project (P108440) ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) 1. The World Bank: “Project Appraisal Document”, Report No: 48504-ML, 2009 2. ----------------------: “Restructuring Paper”, Report no: RES19449, 2015 3. -----------------------: “Restructuring paper” Report no: RES23229, 2016 4. -----------------------: “Financing Agreement” Credit Number 4617-ML, 2009 5. Implementation Status and Results Reports of the project, 2008-2018 6. Aide-memoires of supervision missions, 2008-2017 7. Draft ICR of the Borrower, February 2019 Page 69 of 69