The World Bank WAPP: The First Phase of the Inter-Zonal Transmission Hub Project of the WAPP (APL3) Program (P094919) REPORT NO.: RES31146 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF WAPP: THE FIRST PHASE OF THE INTER-ZONAL TRANSMISSION HUB PROJECT OF THE WAPP (APL3) PROGRAM APPROVED ON JUNE 29, 2011 TO GHANA GRID COMPANY LIMITED (GRIDCO) ENERGY & EXTRACTIVES AFRICA Regional Vice President: Makhtar Diop Country Director: Rachid Benmessaoud Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Charles Joseph Cormier Task Team Leader: Nash Fiifi Eyison The World Bank WAPP: The First Phase of the Inter-Zonal Transmission Hub Project of the WAPP (APL3) Program (P094919) I. BASIC DATA Product Information Project ID Financing Instrument P094919 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 29-Jun-2011 31-Dec-2018 Organizations Borrower Responsible Agency Ghana Grid Company Limited (GRIDCo) SONABEL Project Development Objective (PDO) Original PDO The development objective of the first phase of the Inter-Zonal Transmission Hub Project under the WAPP APL3 is to reduce the cost of and improve security of electricity supply to Burkina Faso, while increasing Ghana’s electricity export capacity. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-49710 29-Jun-2011 26-Mar-2012 14-Dec-2012 31-Dec-2017 25.90 17.63 4.84 IDA-H7190 29-Jun-2011 09-Aug-2011 14-Dec-2012 31-Dec-2018 16.00 8.00 5.98 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank WAPP: The First Phase of the Inter-Zonal Transmission Hub Project of the WAPP (APL3) Program (P094919) II. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES Current Status/Results Achieved to Date: (1) All towers have been erected, final checks completed and stringing of conductors for 225kV line is in final stages. Extension works for Zagtouli and Patte d’oie substations in Burkina Faso have been completed. All civil works for Bolgatanga II substation including embankment/platform, cable trenches and transformer oil pit and all equipment foundations, structures and gantry erection have been completed. (2) Studies for Reinforcement of Transmission Grid in Ghana are being validated. (3) Construction of medium voltage networks to supply power to rural localities along the right-of-way in Burkina Faso have been completed. (4) The Owner’s Engineer for the work supervision of line and Project management is performing satisfactorily. (5) Capacity Building and Institutional Support activities for GRIDCo and SONABEL are yet to be completed. Overall disbursement under the Project stands at 68 percent of the total resources (about 73 percent of the Ghana Credit and 57 of the Burkina Faso Grant). Implementation Progress is currently rated moderately unsatisfactory due to delays experienced under the Project. Justification for Proposed Extension of closing date of Credit: Two major bridges connecting southern to northern Ghana were closed to all traffic on November 22, 2017 for rehabilitation works and remain closed. The closing of the bridges for emergency rehabilitation works which is beyond the control of the project team meant that major equipment, such as power transformer, cannot be transported in a timely manner from the port in Tema-Southern Ghana to project site, Bolgatanga/Navrongo in Northern Ghana for works to be completed as planned. Rehabilitation works are yet to be completed and as such bridges are still closed to traffic. Following the inadvertent closure of the bridges, efforts from the GRIDCo project team and company engaged to transport equipment, to find alternative routes have yielded a few options, each with its own challenges. All possibilities of transporting transformer/equipment to site and completion of installation works extend beyond the current closing date of Credit 49710 which is December 31, 2017. In addition, commission of the works is dependent on the completion of the entire 161/225/330KV Bolgatanga II substation which is financed under both WAPP APL3 and 330kV Kumasi-Bolgatanga Transmission Line Project (financed by Agence Française de Développement-AFD). The 330kV Kumasi-Bolgatanga Transmission Line Project is expected to be completed in June 2018. The services of Owners’ Engineer financed under credit 49710 is required to provide technical support till the completion and energizing of the entire 161/225/330KV Bolgatanga II substation to mitigate any commissioning risk of the WAPP APL3 Project. There were earlier delays because of dispute between supplier of transformer/equipment and Freight forwarder due to difference in weight declared by supplier and actual weight of equipment. The dispute was protracted and coincided with the closing of the bridges. A solution has been achieved in principle with the acceptance by the supplier to pay the freight forwarder additional lifting and transportation costs associated with implications of extra tonnage of equipment. The Implementation Agency-GRIDCo also has some uncommitted funds which are gains from SDR rates versus US$ in the last quarter and have agreed in principle with Task Team to use these funds to procure some equipment and conduct capacity building. If extension is approved, all activities are expected to be completed within the 12-months duration. The proposed extension of closing date of IDA Credit Cr. 49710-GH from December 31, 2017 to December 31, 2018 (closing date of WAPP Inter-zonal Transmission Hub Project-P094919) is needed to ensure completion of all project activities (construction of Bolgatanga II substation and commissioning of 225kV Ghana-Burkina Faso Interconnector) to achieve project objectives. Disbursement ratio is expected to be 95% if 12-months extension approval is granted. The World Bank WAPP: The First Phase of the Inter-Zonal Transmission Hub Project of the WAPP (APL3) Program (P094919) An implementation plan including the transportation of equipment, completion of installation works and commissioning within the extended closing date has been agreed with the GRIDCo, Freight Forwarder, Transporter, Contractor and Owners’ Engineer. No other changes are proposed with this extension request. III. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IDA-49710 Effective 31-Dec-2015 31-Dec-2017 31-Dec-2018 30-Apr-2019 IDA-H7190 Effective 31-Dec-2015 31-Dec-2018