The World Bank Electricity Supply Reliability Project (P116748) REPORT NO.: RES44248 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF ELECTRICITY SUPPLY RELIABILITY PROJECT APPROVED ON MAY 26, 2011 TO REPUBLIC OF ARMENIA ENERGY & EXTRACTIVES EUROPE AND CENTRAL ASIA Regional Vice President: Anna M. Bjerde Country Director: Sebastian-A Molineus Regional Director: Lucio Monari Practice Manager/Manager: Sameer Shukla Task Team Leader(s): Artur Kochnakyan The World Bank Electricity Supply Reliability Project (P116748) I. BASIC DATA Product Information Project ID Financing Instrument P116748 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 26-May-2011 31-Dec-2020 Organizations Borrower Responsible Agency Republic of Armenia High Voltage Electric Networks Project Development Objective (PDO) Original PDO The project development objective is to increase the reliability and capacity of the transmission network. Summary Status of Financing (US$, Millions) Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-83880 02-Jul-2014 06-Aug-2014 03-Feb-2015 31-Dec-2020 36.00 19.61 16.39 IBRD-80550 26-May-2011 01-Jun-2011 28-Nov-2011 31-Dec-2020 35.50 34.15 1.35 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Electricity Supply Reliability Project (P116748) I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES Project Status. The Project Development Objective (PDO) remains achievable and the progress towards achievement of the PDO is Moderately Satisfactory due to slower-than-expected improvement of reliability of electricity supply in the Project areas. The performance of the Borrower and the project implementing entity - High Voltage Electricity Networks (HVEN) - is Moderately Satisfactory due to delays with completion of rehabilitation of Vanadzor-1 and Charentsavan-3 substations and launch of the tender for rehabilitation of Zovuny substation. The following is the summary of the status of key activities and justification for additional time needed to complete all works under the Project. a. Replacement of Hrazdan TPP - Shinuhayr OHL. The replacement was completed, and the line is operational ensuring reliable interconnection between the southern and central parts of the country. b. Replacement of Lalvar-Noyemberyan OHL. The replacement was completed, and the line is operational ensuring reliable electricity supply in the northern part of the country. c. Rehabilitation and extension of Haghtanak substation, and rehabilitation of Charentsavan-3, Vanadzor-1 and Zovuny substations. Rehabilitation and extension of Haghtanak substation was completed in May 2019 and the substation is operational. Rehabilitation of Vanadzor-1 substation is in progress and expected to be completed by April 30, 2021. Rehabilitation of Charentsavan-3 substation was delayed due to technical reasons and change in the Government and HVEN management. The rehabilitation works are expected to resume in February 2021 and the substation is expected to be commissioned by March 2022. The bidding documents for rehabilitation of Zovuny substation have been finalized and HVEN plans to complete the procurement of the contractor by June 15, 2021. Financial Management (FM). The FM arrangements under the Project are adequate and acceptable to the Bank. Currently, the FM performance is rated as Moderately Satisfactory. There are no overdue audit reports under the Project. Rationale for closing date extension. The extension of the closing date until December 31, 2023 is required to allow for completion of the rehabilitation of Zovuny substation. The current management of HVEN and the Government are committed to implementing the remaining activities. Rehabilitation of Vanadzor-1, Charentsavan-3, and Zovuny substations is essential for ensuring reliable power supply to consumers and electricity distribution substations across the country. The project objective remains relevant to the development priorities of the energy sector of the Republic of Armenia. It is aligned with CPF Objective 3 “Enhance connectivity and access to reliable infrastructure (transport, energy, digital)” of Focus Area 1 of the Armenia Country Partnership Framework FY19-FY23. II. DETAILED CHANGES LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications The World Bank Electricity Supply Reliability Project (P116748) 30-Jun-2018, 31-Dec- IBRD-80550 Effective 30-Jun-2016 31-Dec-2020 30-Apr-2021 2019, 31-Dec-2020 31-Dec-2019, 31-Dec- IBRD-83880 Effective 31-Dec-2018 31-Dec-2023 30-Apr-2024 2020