The World Bank Report No: ISR10582 Implementation Status & Results Montenegro Energy Community of South East Europe APL 3 - Montenegro Project (P106899) Public Disclosure Copy Operation Name: Energy Community of South East Europe APL 3 - Project Stage: Implementation Seq.No: 12 Status: ARCHIVED Archive Date: 27-Sep-2013 Montenegro Project (P106899) Country: Montenegro Approval FY: 2008 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Adaptable Program Loan Implementing Agency(ies): Key Dates Board Approval Date 06-Jul-2007 Original Closing Date 31-Mar-2012 Planned Mid Term Review Date 15-Jun-2009 Last Archived ISR Date 22-Dec-2012 Effectiveness Date 28-Jan-2008 Revised Closing Date 30-Sep-2013 Actual Mid Term Review Date 15-Jul-2009 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of ECSEE APL is the development of a functioning regional electricity market in South East Europe and its integration into the internal electricity market of the European Union, through the implementation of priority investments supporting electricity market and power system operations in electricity generation, transmission and distribution as well as technical assistance for institutional/systems development and project preparation and implementation. Within the overall ECSEE APL objectives/context, this project (ECSEE APL 3 - Montenegro) would provide investment support to EPCG, the Electric Power Utility of Montenegro. Specifically, the objective of the ECSEE APL3-Montenegro project is to improve the efficiency and reliability of the power system in Montenegro, through better supply security and closer integration into the regional markets. The ECSEE APL 3 - Montenegro Project consists of the following components: I. Telecommunications System Development II. Transmission Network Reinforcement III. Improvement of Operational Reliability of Perucica HPP Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Development of a modern telecommunications network, including links with regional utilities. 11.00 Public Disclosure Copy Construction of transmission line circuits from the transmission network to the Andrijevica substation 3.40 and to the Mojkovac substatio n Installation of a new trash rack and trash rack cleaning equipment, and supply of spare turbine 2.10 runners for Perucica Hydro Power Pla nt Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Unsatisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Satisfactory Overall Risk Rating Low Low Page 1 of 7 The World Bank Report No: ISR10582 Implementation Status Overview The project development objective of improving the efficiency and reliability of the power system in Montenegro has been achieved.The new upgraded telecommunication system has improved the power system operation and coordination with other neighboring system control centers and ENTSO-E facilities, resulting in a more reliable SCADA system and power system control and operation. The Transmission Component has significantly improved the security of supply in the areas of Andrijevica and Mojkovac. The duration and number of Public Disclosure Copy power interruptions of the load supplied by Andrijevica and Mojkovac substations have been reduced. The Generation Component has improved the reliability of the Perucica Hydropower Plan (HPP). The availability of the generation units and efficient use of water has increased and the time and the costs for operation and maintenance have been reduced. All project activities under the Telecommunication System have been completed except the two internal communication links which will be completed by October 31, 2013. The other two project components, transmission reinforcement in two areas in Montenegro and rehabilitation works in Perucica HPP, have been completed and are in operation. Locations Country First Administrative Division Location Planned Actual Montenegro Not Entered Trebinje Montenegro Not Entered Pozega Montenegro Not Entered Opstina Mojkovac Montenegro Not Entered Mojkovac Montenegro Not Entered Andrijevica Montenegro Not Entered Hidroelektrana Perucica Montenegro Not Entered Opstina Andrijevica Results Project Development Objective Indicators Public Disclosure Copy Page 2 of 7 The World Bank Report No: ISR10582 Indicator Name Core Unit of Measure Baseline Current End Target ECSEE APL INDICATOR: Market Text Value ECSEE Treaty signed in Partially Achieved Fully liberalized power market Liberalization in the regional market October 2005 and competitive market Public Disclosure Copy structure. Date 25-Oct-2005 31-May-2013 30-Sep-2013 Comments With regard to market liberalization, the Law envisages that all household customers will become eligible to choose their supplier in 2015. Non- household customers (32,300 or 10% of all customers) are currently eligible to switch suppliers. The Energy Regulatory Agency made a decision that from January 1, 2013 the customers connected to transmission network, are obligated to switch to othersuppliers. There are two customers which consume one-third of the total yearly electricity supply in Montenegro. The integration of Montenegro into the regional Text Value Existing EPCG 100% Achieved Montenegro system fully power sector is improved as a result of the telecommunications system is integrated with regional improved telecommunications system outdated and does not meet market. UCTE requirements Date 31-Dec-2006 31-May-2013 30-Sep-2013 Comments The new telecommunication After the finalization of Public Disclosure Copy links are established with component 1 of the project a Bosnia&Herzegovina and total of total 550 km OPGW Serbia. The new system and 26 pieces enables modern telecommunication equipment telecommunication for the will beinstalled and will be in existing SCADA system, for operation. Three international integration in the regional links will be established. market and the connection with ENTSO-E operation facilities. Page 3 of 7 The World Bank Report No: ISR10582 The substations of component 2 have fewer Text Value 2006 Interruptions (baseline 100% Achieved Reduce interruptions by 50% blackouts document to be provided by EPCG) (1) 381 MWh for Andrijevica Substation (2). Public Disclosure Copy 369 MWh for Mojkova Substation. Date 31-Dec-2006 31-May-2013 30-Sep-2013 Comments Since August 2011, the Data provided for operation extension of Andrijevica year 2010. substation was in operation. In Andrijevica area were The quality of supply (voltage reported 23 outages with profile and power interruption of 757 minutes; interruptions) in the area has the undelivered electricity was significantly improved. In estimated 54 MWh. 2012, there were only 5 In Mojokovac area were outages with interruption of reported 5 outages with 921 minutes and the interruption of 588 minutes; undelivered electricity was the undelivered electricity was estimated at 59 MWh. estimated 39 MWh Since August 2013, the Data provided for operation extension of Mojkovac year 2011. substation was in operation. In Andrijevica area were The quality ofsupply (voltage reported 31 outages with profile and power interruptionof 6073 minutes; interruptions) in the area is the undelivered electricity was improved; however the new estimated 414 MWh. results have to be verified by In Mojokovac area were the end of2013. reported 9 outages with interruption of 445 minutes; the undelivered electricity was estimated 43 MWh. Data provided for operation year 2012. Public Disclosure Copy In Andrijevica area were reported 5 outages with interruption of 921 minutes; the undelivered electricity was estimated 59 MWh. Target achieved In Mojokovac areawere reported 11 outages with interruption of 3291 minutes; the undelivered electricity was estimated 385 MWh. Page 4 of 7 The World Bank Report No: ISR10582 Operational reliability of Perucica HPP is Text Value (1) Increase in O& M of 100% Achieved (1) O&M cost of runner is improved by: (1) reducing O&M cost for the runners due to runners reduced by 10% turbine runners (2) reduce outage time for problems and failures is Euro (2) Outage time for runners(or turbine runners 20 ,000. (2) Loss of loss of production) is reduced Public Disclosure Copy production in 2006 due to by 5%. runner outage: 40 GWH (baseline data provided by EPCG) Date 31-Dec-2006 31-May-2013 31-Dec-2012 Comments The O&M costs of the replaced runner was estimated at Euro 11,000 for 2012; the costs are reduced by 20% compared to 2006. The newTurbine Runner (unit- Nb7) has been in operation since September 2011. The new runner worked for 2,315 hours generating 168 GWh. Theoutages are reduced by 20%. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Progress in implementation of the Text Value Nil 100% Achieved Component is 100% telecommunications component implemented Date 31-Dec-2006 31-May-2013 30-Sep-2013 Comments The new telecommunication system comprises the inter telecommunication links with Bosnia&Herzegovina and Public Disclosure Copy Serbia and internal telecommunication links. The new system is completed and fully functional. The telecommunication link with Kosovo has to be established. Page 5 of 7 The World Bank Report No: ISR10582 Progress in implementation of the transmission Text Value 100% Achieved. Component is 100% component implemented Date 31-May-2013 30-Sep-2013 Public Disclosure Copy Comments (i) The construction of the 110 kV line and the extension of Andrijevica substation were completed and the sub- project was in operation since August 24, 2011. (ii) The construction of 220 kV line and extension of Mojkovac substation were completed and the sub- project was in trial operation since August 1, 2013. Progress in implementation of the HPP Text Value Nil 100% Achieved Component is 100% Perucica generation component implemented Date 31-Dec-2006 31-May-2013 30-Mar-2013 Comments (i) The new trash rack and trash rack cleaning machine are installed in the plant's bottom outlet in Vrtac Dam and have been in operation since December 2009. (ii) The new turbine runner is installed in power plant unit 7 and has been in operation since September2011. Data on Financial Performance (as of 16-Sep-2013) Financial Agreement(s) Key Dates Public Disclosure Copy Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P106899 IDA-43510 Effective 06-Jul-2007 28-Aug-2007 28-Jan-2008 31-Mar-2012 30-Sep-2013 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P106899 IDA-43510 Effective XDR 6.00 6.00 0.00 5.65 0.35 94.00 Disbursement Graph Page 6 of 7 The World Bank Report No: ISR10582 Public Disclosure Copy Key Decisions Regarding Implementation The project will be closing on September 30, 2013. Restructuring History Level two Approved on 07-Apr-2011, Level two Approved on 01-Feb-2013 Related Projects There are no related projects. Public Disclosure Copy Page 7 of 7