The World Bank Implementation Status & Results Report The Power Recovery Project (P144029) The Power Recovery Project (P144029) EUROPE AND CENTRAL ASIA | Albania | Energy & Extractives Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 12 | ARCHIVED on 20-Nov-2020 | ISR44232 | Implementing Agencies: Ministry of Infrastructure and Energy, Republic of Albania Key Dates Key Project Dates Bank Approval Date: 29-Sep-2014 Effectiveness Date: 30-Jan-2015 Planned Mid Term Review Date: 07-May-2018 Actual Mid-Term Review Date: 07-May-2018 Original Closing Date: 30-Nov-2019 Revised Closing Date: 30-Nov-2020 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to improve reliability of power supply and financial viability of the power sector. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Short Term Complementary Power Import Support:(Cost $30.00 M) Upgrading Distribution Infrastructure:(Cost $93.00 M) Transmission Meter/Data Center Upgrade:(Cost $20.00 M) Supporting Power Sector Reforms and Project Implementation:(Cost $7.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions Around mid-March 2020 the on-going project implementation started to be disrupted widely due to the coronavirus pandemic. By mid-May 2020 project activities have gradually resumed and no on-going works have been canceled. The project closing date is expected to be extended until June 30, 2021. 11/20/2020 Page 1 of 9 The World Bank Implementation Status & Results Report The Power Recovery Project (P144029) 11/20/2020 Page 2 of 9 The World Bank Implementation Status & Results Report The Power Recovery Project (P144029) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Moderate Moderate Macroeconomic -- Moderate Moderate Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and -- Moderate Moderate Sustainability 11/20/2020 Page 3 of 9 The World Bank Implementation Status & Results Report The Power Recovery Project (P144029) Fiduciary -- Substantial Substantial Environment and Social -- Low Low Stakeholders -- Substantial Moderate Other -- Substantial Moderate Overall -- Moderate Moderate Results PDO Indicators by Objectives / Outcomes Electricity losses per year in the project area IN00916414 ►Electricity losses per year in the project area (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 45.00 22.65 22.65 23.00 Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 30-Nov-2020 Latest total distribution losses data for the full year 2019. These targets were revised at project restructuring initiated in November 2019. Comments: Collection rate of distribution company IN00916415 ►Collection rate of distribution company (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 78.00 93.00 97.50 93.00 Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 31-Dec-2020 This data is based on OSHEE's report. This will be verified when OSHEE 2019 audited financial statement Comments: is available. Reliability of MV level at Tirana area IN00916441 ►Capacity of medium-voltage network (Kilovolt-Amphere(KVA), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 80,000.00 Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 30-Nov-2020 11/20/2020 Page 4 of 9 The World Bank Implementation Status & Results Report The Power Recovery Project (P144029) This indicator is based on the new capacity of the Kombinat Substation of 80 MVA (80,000 KVA), which is under construction and expected to be put in service by end-November 2020 following coronavirus Comments: disruption. Total amount of intercompany arrears IN00916442 ►Total amount of intercompany arrears (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1,200.00 916.00 2,014.00 550.00 Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 31-Dec-2020 This is based on audited financial data of OST and unaudited data of KESH in 2019. 2019 KESH audited financial statements will become available by the end of 2020. The intercompany arrears (account receivables of KESH/OST to be paid by OSHEE) increased by 1.6 billion lek (USD 14.5 million). At the same time, revenue of KESH has decreased by 9.3 billion lek (USD 84.5 million) from 16.2 billion lek in 2018 to 6.9 billion lek in 2019 due to severe drought in 2019. OST's revenue in 2019 remains steady. All Comments: together, this caused the surge in the indicator. Intermediate Results Indicators by Components Supporting Power Sector Reforms and Project Implementation IN00916448 ►Debt to Equity Ratio of OShEE (shown), KESh and OST (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.10 -0.33 -0.29 1.60 Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 31-Dec-2020 Data based on 2019 financial statements audited by the Albanian auditors. Delay in issuance of 2019 OSHEE audited financial statements is due to OSHEE unbundling, and 2019 financial statements will be Comments: available by end of year 2020. IN00916449 ►OShEE monthly revenues used to pay for energy purchases to KESh and transmission fees to OST (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 40.00 100.00 100.00 100.00 Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 30-Nov-2020 Data based on 2019 OSHEE financial statements audited by Albanian auditors. Comments: 11/20/2020 Page 5 of 9 The World Bank Implementation Status & Results Report The Power Recovery Project (P144029) IN00916452 ►Technical assistance initiated to support power sector reform (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target TA to update the TA to update the Financial Recovery Plan Financial Recovery provided. Plan provided. TA to update the Value No Financial Recovery Plan provided. . . Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 30-Nov-2020 This indicator and the end target were revised at the project restructuring initiated in November 2019 to reflect TA activities directly supported under the Project. A number of activities originally planned under Comments: this component and elaborated i n the Loan Agreement were carried out outside of the Project, including those supported by other development partners. Short Term Complementary Power Import Support IN00916443 ►Complementary Power Purchased (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 EUR 21.7 million EUR 21.7 million EUR 21.7 million Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 30-Nov-2020 This indicator was revised to measure short term complementary power import under this project. The original activity (Impl emented risk management Mechanism for weather related power imports.) had experienced delay in implementation due to uncertainty of the liberalization of the Albanian Power Market, particularly on which power sector entity would be faced with hydrological risk after market liberalization. Comments: In lieu of this activity, the World Bank initiated a bank-executed TA in 2018 on hydrological risk management to inform power utilities, Ministry of Finance, and Ministry of Infrastructure and Energy. Upon this TA completion in 2019, the government and power utilities may decide to implement the selected mechanism during and after the duration of Power Recovery Project. Transmission Meter/Data Center Upgrade IN00916445 ►Number of medium voltage customers in deregulated market (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 96.00 96.00 1,000.00 Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 30-Nov-2020 The targets were revised at the project restructuring initiated in November 2019.  Since Jan 1st 2018, all customers (96 customers) connected in 35 kV distribution network are equipped with new metering system and are deregulated. In practice only 37 customers from Comments: total 96 are fully supplied by qualified suppliers; the others (59) are actually supplied by OSHEE with “market base price” approved monthly by ERE. The annual consumption in 2019 was GWh 79. 11/20/2020 Page 6 of 9 The World Bank Implementation Status & Results Report The Power Recovery Project (P144029)  The plan for further deregulation of MV customers is under implementation. The other groups of customers potentially to be deregulated are the customers connected in MV (20, 10, 6 kV); there are around 4000 customers with 790 GWh annual consumption in 2019.  The total deregulated/to be deregulated (including HV, 35kV and MV customers) consumption is estimated at 1738 GWh or 23% of the total supply in 2019.  The Bank (IBRD and IFC) supported financially the establishment of Albanian Market Operator and Albanian Balancing Market.  On May 15, 2019, GoA decided to establish the Albanian Power Exchange (APEX) and on September 2019 GoA approved the APEX shareholders’ structure and procedures for selling the shares. The Tender for shareholder participation is ongoing. COVID-19 crises postponed the procedures.  The distribution function has been organizationally unbundled; four companies are established and from them one is wire company OSSH (Distribution System Operator-DSO), two Suppliers/Traders one Universal Service Supplier (FSHU) for tariff/regulated customers (MV and LV commercial and Household customers) and the other Supplier for Deregulated customers (FTL); on the top is a holding company called OSHEE Group which supports three daughter companies with general services having full control on downstream activities. The financial unbundling is not finalized.  On December 2019, the CoM has modified the Power Service Obligation rules; actually this constitutes the bilateral electricity market applicable rules for 2020. Shortly the revised rules give to FTL the power to purchase electricity from IPPs with PPA and from the market (including import and purchase form IPPs without PPA) and allocate for DSO losses, for FSHU if KESH is in short position and supply the 35 kV deregulated customers. If IPPs with PPA are in long position (the generation is higher than distribution losses), FTL has the right to sell the surpluses to the market. KESH generation is allocated for FSHU but if KESH is in long position, KESH may sell the surpluses to the market.  Twelve customers connected in HV are qualified as eligible (non-regulated); the annual consumption in 2019 was GWh 869 which is 12% of total demand (GWh 7617) in Albania. IN00916447 ►Number of OST meters installed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1,146.00 1,589.00 2,252.00 Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 30-Nov-2020 Data as of September 2020. The total number of meters contracted to be installed has been reduced to 2,252 (down from 2,328). Due to delayed government’s decisions on deregulating medium-voltage customers and certain customers’ refusal to install new meters, OST, PMU and Bank team assessed that about 71 to 141 additional OST meters could be installed by June 2021 (5 additional MV customers, 66 Comments: meters on MV feeder lines, and up to 70 IPPs. A number of medium-voltage customers are refusing new meters as they prefer to be metered by OSHEE only. Separately, OSHEE already installed meters for the 70 IPPs). The remaining uninstalled meters will be kept at OST until a decision is reached. Upgrading Distribution Infrastructure IN00916444 ►Implementation of a new billing and collection management system (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The installation is The installation is The new Billing and Value Existing billing system. completed and the completed and the Management System system is operational. system is operational. in Operation Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 30-Nov-2020 IN00916446 11/20/2020 Page 7 of 9 The World Bank Implementation Status & Results Report The Power Recovery Project (P144029) ►Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 60,000.00 60,000.00 200,000.00 Date 03-Jul-2014 18-Jun-2020 10-Nov-2020 30-Nov-2020 IN00916450 Female beneficiaries (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 50.00 50.00 52.00 IN00916451 ►Impact of citizen engagement on project activities reported and disseminated (Yes/No) (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 01-Nov-2019 18-Jun-2020 10-Nov-2020 30-Nov-2020 Citizen engagement is centered around OSHEE activities (component 2). On-going activities are summarized below: Kombinat substation. The progress of works in Kombinat substation is about 99% completed and the works had started upon completion of the land acquisition process. This activity has good support from the community especially because the cable laying works on the access road was coordinated with replacement of sewage pipes as extra benefit to the community, in addition to securing reliable electricity Comments: supply. Upgrade of electric distribution network. All the installation of the distribution transformer cabins and electric cables in Tirana, Fushe Kruje, Lushnje, Pogradec, Vlore have been completed without any issue raised by the communities. The process followed was to directly inform communities about the works in advance and establish direct communication link (in addition to the notification because of construction permit), which enabled good cooperation with communities. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P144029 IBRD-84290 Effective USD 150.00 126.38 23.62 81.80 31.65 72% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P144029 IBRD-84290 Effective 29-Sep-2014 03-Nov-2014 30-Jan-2015 30-Nov-2019 30-Nov-2020 11/20/2020 Page 8 of 9 The World Bank Implementation Status & Results Report The Power Recovery Project (P144029) Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History Level Approved on 06-May-2020 ,Level 2 Approved on 04-Nov-2020 Related Project(s) There are no related projects. 11/20/2020 Page 9 of 9