FOR OFFICIAL USE ONLY Report No: RES40890 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND/OR INTERNATIONAL DEVELOPMENT ASSOCIATION RESTRUCTURING PAPER ON A PROPOSED PROGRAM RESTRUCTURING OF {TZ-RURAL ELECTRIFICATION EXPANSION PROGRAM} {APPROVED ON JUNE 21, 2016} TO {THE} {UNITED REPUBLIC OF TANZANIA} {Energy & Extractives Global Practice} {Africa East Region} Note to Task Teams: 1. Please modify amounts above and provide equivalent in US$ if applicable. 2. For RVP CLEARANCE DATE, enter the same date as on MOP. 3. Please delete one of the following boxes based on the PAD Guidance section on disclosure. Box should be aligned to the bottom of page (insert blank lines here to lower the box). Please delete this note when finalizing the document. Regional Vice President: Hafez M. H. Ghanem Country Director: Mara K. Warwick Regional Director: Riccardo Puliti Practice Manager: Julia M. Fraser Task Team Leader(s): Jenny Maria Hasselsten, Mbuso Gwafila The World Bank TZ-Rural Electrification Expansion Program (P153781) ABBREVIATIONS AND ACRONYMS The World Bank TZ-Rural Electrification Expansion Program (P153781) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. Please delete this note when finalizing the document. DATA SHEET (TZ-Rural Electrification Expansion Program - P153781) BASIC DATA Project ID Financing Instrument IPF Component P153781 Program-for-Results Financing No Approval Date Current Closing Date 21-Jun-2016 31-Jul-2022 Organizations Borrower Responsible Agency UNITED REPUBLIC OF TANZANIA Rural Energy Agency Program Development Objective(s) The Project Development Objectives are (a) to increase access to electricity in rural areas; and (b) to scale up the supply of renewable energy in rural areas while strengthening sector institutional capacity. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing (US$, Millions) Net Approval Effectiveness Closing Ln/Cr/TF Signing Date Commitment Disbursed Undisbursed Date Date Date IDA-58940 21-Jun-2016 15-Aug-2016 17-Mar-2017 31-Jul-2022 200.00 166.76 32.04 TF-A2502 21-Jun-2016 15-Aug-2016 17-Mar-2017 31-Jul-2022 9.00 2.25 6.75 Policy Waiver(s) Does the Program require any waivers of Bank policies applicable to Program-for-Results operations? No Page 1 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) Note to Task Teams: End of system generated content, document is editable from here. Please delete this note when finalizing the document. The World Bank TZ-Rural Electrification Expansion Program (P153781) I. PROGRAM STATUS AND RATIONALE FOR RESTRUCTURING Note: Formatting instructions for this document. A. Header 1. [All sub-sections must have a continuous paragraph numbering for the entire main text or for each annex per institutional standard.] (a) This is the sub-para numbering for this level. This is the sub-para numbering for this level. This is the sub-para numbering for this level. (i) This is the sub-para numbering for this level. This is the sub-para numbering for this level. (ii) This is the sub-para numbering for this level. This is the sub-para numbering for this level. (iii) This is the sub-para numbering for this level. This is the sub-para numbering for this level. II. DESCRIPTION OF PROPOSED CHANGES Note: Formatting instructions for this document. B. Header 1. [All sub-sections must have a continuous paragraph numbering for the entire main text or for each annex per institutional standard.] (b) This is the sub-para numbering for this level. This is the sub-para numbering for this level. This is the sub-para numbering for this level. (iv) This is the sub-para numbering for this level. This is the sub-para numbering for this level. (v) This is the sub-para numbering for this level. This is the sub-para numbering for this level. (vi) This is the sub-para numbering for this level. This is the sub-para numbering for this level. The World Bank TZ-Rural Electrification Expansion Program (P153781) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. Please delete this note when finalizing the document. III. SUMMARY OF CHANGES Changed Not Changed Change in Program Scope ✔ Change in Results Framework ✔ Change in Loan Closing Date(s) ✔ Reallocation between and/or Change in DLI ✔ Change in Implementation Schedule ✔ Change in Implementing Agency ✔ Change in Program's Development Objectives ✔ Change in Cancellations Proposed ✔ Change in Disbursements Arrangements ✔ Change in Disbursement Estimates ✔ Change in Systematic Operations Risk-Rating Tool ✔ (SORT) Change in Safeguard Policies Triggered ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE OPS_DETAILEDCHANGES_LOANCLOSING_TABLE The World Bank TZ-Rural Electrification Expansion Program (P153781) LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/TF Status Closing Date Closing(s) Date Closing Date for Withdrawal Applications IDA-58940 Effective 31-Jul-2022 31-Jul-2023 30-Nov-2023 TF-A2502 Effective 31-Jul-2022 31-Jul-2023 30-Nov-2023 OPS_DETAILEDCHANGES_EA_TABLE . The World Bank TZ-Rural Electrification Expansion Program (P153781) ANNEX 1: RESULTS FRAMEWORK Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. Please delete this note when finalizing the document. . . Results framework Program Development Objectives(s) The Project Development Objectives are (a) to increase access to electricity in rural areas; and (b) to scale up the supply of renewable energy in rural areas while strengthening sector institutional capacity. Program Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Increase access to electricity in rural areas; and scale up the supply of renewable energy PDO Indicator 1: People provided with access to electricity under the program by household connections (Number, Custom) 0.00 2,925,000.00 (Number) Action: This indicator has been Revised PDO Indicator 2: Non-residential connections implemented 0.00 30,000.00 under the Program (Number) Action: This indicator has been Revised Page 6 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target PDO Indicator 3: Cumulative number of proposed MWs covered by SPP and renewable energy sub-loans reaching financial close 0.00 13.00 under the CL (Megawatt) Action: This indicator has been Revised PDO Indicator 4: People provided with access to electricity via off-grid supplies under the Program (SPP and renewables, 0.00 100,000.00 including solar PV) (Number) Action: This indicator has been Revised PDO Indicator 5: Capacity for delivery of energy access and No Yes renewable energy generation strengthened (Yes/No) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Result Areas RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Expanding Rural Access to Electricity IR Indicator 1.1: Cumulative number of grid electricity connections, including those under mini-grids, made under the 0.00 585,000.00 program (Number) Action: This indicator has been Revised IR Indicator 1.2: Transmission and distribution lines constructed 0.00 28,000.00 or rehabilitated under the program (Kilometers) Page 7 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Action: This indicator has been Revised IR Indicator 1.3: Households connected to the grid that are 24.00 24.00 female-headed (Percentage) Action: This indicator has been Revised IR Indicator 2.1: Educational facilities connected under the 0.00 1,500.00 program (5%) (Number (Thousand)) Action: This indicator has been Revised IR Indicator 2.2: Health care facilities connected under the 0.00 1,500.00 program (5%) (Number (Thousand)) Action: This indicator has been Revised IR Indicator 2.3: Business, out of which number of female owned, 0.00 9,000.00 connected under th program (30%) (Number (Thousand)) Action: This indicator has been Revised Increasing Supply of Renewable Electricity in Rural Areas IR Indicator 3.1: Cumulative number of proposed MWs covered by SPP Loans for Small Power Projects reaching financial close 0.00 17.00 under the CL (Megawatt) Action: This indicator has been Marked for Deletion IR Indicator 4.1: Households provided with electricity via SPPs or renewable energy under the program that are female-headed 24.00 24.00 (Percentage) Action: This indicator has been Revised IR Indicator 4.2: SPP projects reaching financial close using CL 0.00 10.00 (cumulative) (Number) Page 8 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Action: This indicator has been Marked for Deletion IR Indicator 4.3: Loans to renewable energy companies reaching 0.00 12.00 finacial close (culmulative) (Number) Action: This indicator has been Marked for Deletion IR Indicator 4.4: Cumulative value of eligible renewable energy 0.00 12,500,000.00 sub-loans reaching finacial close (Amount(USD)) Action: This indicator has been Marked for Deletion IR indicator 4.5: SPPs successfully in operation selling energy to 2.00 9.00 both TANESCO and rural customers (cumulative) (Number) Action: This indicator has been Marked for Deletion IR Indicator 4.6: Solar energy systems sold (Number (Thousand)) 0.00 10,000.00 Action: This indicator has been Marked for Deletion IR Indicator 4.7: Other renewable energy systems sold (Number 0.00 10,000.00 (Thousand)) Action: This indicator has been Marked for Deletion IR Indicator 4.8: Lanterns sold (Number (Thousand)) 0.00 15,000.00 Action: This indicator has been Marked for Deletion IR Indicator 6.1: Cumulative value of eligible SPP and renewable DLI 6 0.00 16,500,000.00 energy sub-loans reaching financial close (Amount(USD)) Action: This indicator is New Strengthening Capacity of the Sector to Deliver the NREP Page 9 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target IR Indicator 5.1: Annual capacity building and project preparation No Yes activities completed (Yes/No) Action: This indicator has been Revised IR Indictor 5.2: Implementation of the National Energy Policy of 2015 to enhance access to modern energy services completed No Yes (Yes/No) Action: This indicator has been Revised IO Table SPACE Disbursement Linked Indicators Matrix DLI IN01023929 ACTION DLI 1 DLI 1: Cumulative number of grid electricity connections, including those under mini grids, made under the program Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Number 151,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 July 31, 2016 - July 2017 500,000.00 151,000,000.00 July 31, 2017 - July 31, 2018 0.00 July 31,2018 - July 31, 2019 0.00 Page 10 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) July 31, 2019 - July 31, 2020 0.00 July 31, 2020 - July 31, 2021 0.00 July 31, 2021 - July 31, 2022 0.00 July 31, 2022 - July 31, 2023 0.00 Action: This DLI has been Revised. See below. DLI IN01025727 ACTION DLI 1 DLI 1: Cumulative number of grid electricity connections, including those under mini-grids, made under the Program Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Number 175,000,000.00 86.22 Period Value Allocated Amount (USD) Formula Baseline 0.00 July 31, 2016 - July 2017 0.00 0.00 0.00 July 31, 2017 - July 31, 2018 45,690.00 22,830,156.00 see Annex 7 July 31,2018 - July 31, 2019 176,962.00 40,921,400.00 see Annex 7 July 31, 2019 - July 31, 2020 312,906.00 36,693,300.00 see Annex 7 July 31, 2020 - July 31, 2021 500,000.00 51,646,080.00 see Annex 7 July 31, 2021 - July 31, 2022 542,500.00 11,454,532.00 see Annex 7 July 31, 2022 - July 31, 2023 585,000.00 11,454,532.00 see Annex 7 Page 11 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) Rationale: 1. Change in DLR targets: The DLI has increased its end target to utilize the reallocation of $25 million USD to the DLI. 2 Change in timeline: The DLI is revised to provide more time to achieve the target. DLI IN01023928 ACTION DLI2: Cumulative number of proposed MWs covered by SPP Loans for Small Power Projects reaching financial close under DLI 2 the CL Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Megawatt 32,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 July 31, 2016 - July 2017 17.00 32,000,000.00 July 31, 2017 - July 31, 2018 0.00 July 31,2018 - July 31, 2019 0.00 July 31, 2019 - July 31, 2020 0.00 July 31, 2020 - July 31, 2021 0.00 July 31, 2021 - July 31, 2022 0.00 July 31, 2022 - July 31, 2023 0.00 Action: This DLI has been Marked for Deletion Page 12 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) DLI IN01023927 ACTION DLI 3 DLI 3: Cumulative value of eligible renewable energy sub-loans reaching financial close Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output Yes Amount(USD) 10,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 July 31, 2016 - July 2017 12,500,000.00 10,000,000.00 July 31, 2017 - July 31, 2018 0.00 July 31,2018 - July 31, 2019 0.00 July 31, 2019 - July 31, 2020 0.00 July 31, 2020 - July 31, 2021 0.00 July 31, 2021 - July 31, 2022 0.00 July 31, 2022 - July 31, 2023 0.00 Action: This DLI has been Marked for Deletion DLI IN01023926 ACTION DLI 4 DLI 4: Annual capacity building and project preparation activities completed Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Text 15,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Page 13 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) No Planning and Preparation Department Baseline strengthened No training and no transaction advisors hired July 31, 2016 - July 2017 15,000,000.00 July 31, 2017 - July 31, 2018 0.00 July 31,2018 - July 31, 2019 0.00 July 31, 2019 - July 31, 2020 0.00 July 31, 2020 - July 31, 2021 0.00 July 31, 2021 - July 31, 2022 0.00 July 31, 2022 - July 31, 2023 0.00 Action: This DLI has been Revised. See below. DLI IN01024910 ACTION DLI 4 DLI 4: Annual capacity building and project preparation activities completed Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Text 17,599,151.00 28.81 Period Value Allocated Amount (USD) Formula No Planning and Preparation Department Baseline strengthened No training and no transaction advisors hired 4.1 Annual Capacity Building Plan for FY 2016/17 July 31, 2016 - July 2017 submitted not later than three (3) months after 509,915.00 see Annex 7 Effective Date Page 14 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) 4.2: Annual Capacity Building Plan for FY 2017/18 July 31, 2017 - July 31, 2018 509,915.00 see Annex 7 submitted by July 31, 2017 4.6: (i) Annual Capacity Building Plan for FY 2018/19 July 31,2018 - July 31, 2019 509,915.00 see Annex 7 approved and submitted by REA to the Association 4.3: Plan to strengthen the capacity of the department for planning and preparation of REA approved by the Rural Energy Board; 4.5: Targeted July 31, 2019 - July 31, 2020 Communities Program approved by the Rural Energy 2,492,918.00 see Annex 7 Board, 4.8: Annual Capacity Building Plan for FY 2019/20 approved and submitted by REA to the Association 4.7: Feasibility studies for grid connections for all twenty-four (24) regions in the Recipient’s territory July 31, 2020 - July 31, 2021 completed, 4.10: Annual Capacity Building Plan for 4,050,992.00 see Annex 7 FY 2020/21 approved and submitted by REA to the Association 4.4. (i) Draft Rural Electrification Master Plan is submitted to the Ministry of Energy; and (ii) Draft Rural Electrification Master Plan is approved by the Ministry of Energy; Four (4) consulting services, July 31, 2021 - July 31, 2022 under terms of reference acceptable to the 7,025,496.00 see Annex 7 Association, completed to support TANESCO's new power; 4.11: Annual Capacity Building Plan for FY 2021/22 approved and submitted by July 31, 2021 by REA to the Association 4.12 Capacity development program for renewable energy submitted by REA to the Association ;4.13 July 31, 2022 - July 31, 2023 2,500,000.00 see Annex 7 Preparatory studies for at least eight (8) renewable energy projects completed by REA Rationale: 1. Introducing new DLRs: There are two new DLRs introduced to the DLI with reallocation of funds, namely: i) 4.12 Capacity development program for renewable energy submitted; ii) 4.13 Preparatory study/ies completed for eight renewable energy SPP projects; Page 15 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) 2. Change in timebound: The proposed restructuring aims to adjust the disbursement linked indicators that are timebound to enable disbursements for results that have been achieved outside the specified period. DLI IN01023925 ACTION DLI 5 DLI 5: Implementation of the National Energy Policy of 2015 completed Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Text 1,000,000.00 0.00 Period Value Allocated Amount (USD) Formula No implementation strategy for subsidy policy Baseline completed July 31, 2016 - July 2017 1,000,000.00 July 31, 2017 - July 31, 2018 0.00 July 31,2018 - July 31, 2019 0.00 July 31, 2019 - July 31, 2020 0.00 July 31, 2020 - July 31, 2021 0.00 July 31, 2021 - July 31, 2022 0.00 July 31, 2022 - July 31, 2023 0.00 Action: This DLI has been Revised. See below. Page 16 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) DLI IN01024970 ACTION DLI 5 DLI 5: Implementation of the National Energy Policy of 2015 completed Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Text 15,000,000.00 0.00 Period Value Allocated Amount (USD) Formula No implementation strategy for subsidy policy Baseline completed July 31, 2016 - July 2017 0.00 July 31, 2017 - July 31, 2018 0.00 July 31,2018 - July 31, 2019 0.00 July 31, 2019 - July 31, 2020 0.00 July 31, 2020 - July 31, 2021 0.00 5.1: Study under NEP for unlocking electricity connection challenges in rural areas completed; 5.2: July 31, 2021 - July 31, 2022 10,000,000.00 Strategy under NEP for enhancing access to modern energy services approved by the Minister of Energy 5.3 Renewable energy strategy and implementation July 31, 2022 - July 31, 2023 5,000,000.00 plan approved by the Minister of Energy Rationale: 1. Introducing a new DLR: The restructuring introduces a new DLR under the DLI5, namely Page 17 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) DLI IN01024981 ACTION DLI 6. Cumulative value of eligible SPP Loan for Small Power Projects and Renewable Energy Sub-loans reaching Financial DLI 6 Close Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome Yes Amount(USD) 16,500,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline 0.00 July 31, 2016 - July 2017 0.00 July 31, 2017 - July 31, 2018 0.00 July 31,2018 - July 31, 2019 0.00 July 31, 2019 - July 31, 2020 0.00 July 31, 2020 - July 31, 2021 0.00 July 31, 2021 - July 31, 2022 825,000.00 8,250,000.00 see Annex 7 July 31, 2022 - July 31, 2023 825,000.00 8,250,000.00 see Annex 7 Rationale: 1. Introducing a new DLI: the new DLI 6 combines the DLI 2 and DLI 3 into a single DLI that will accommodate results under Action: This DLI is New both the SPP and REC CL window. Note to Task Teams: End of system generated content, document is editable from here. Please delete this note when finalizing the document. Page 18 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) ANNEX 2: PROGRAM ACTION PLAN Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. Please delete this note when finalizing the document. . . PAP_NOT_CHANGE_TBL Action Description Source DLI# Responsibility Timing Completion Measurement Preparation of a Rural Electrification Master Plan (REMP) to strengthen the planning and coordination capacity of the sector institutions Masterplan Completed and is underway. Technical REA Due Date 30-Aug-2021 adopted Apply standard technical specifications and Standard technical specifications bid evaluation and bid evaluation criteria criteria Fiduciary Systems REA, TANESCO Recurrent Continuous applied. Deployment of REA and or TANESCO staff to the regional level Other REA, TANESCO Recurrent Continuous Staff deployed to field. Staffing of the PMU, Directorate of Technical Services, and IAU - recruit/appoint qualified and experienced staff to fill the gap in the two units or REA has recruited staff for project outsource the and contract management and functions Fiduciary Systems REA Due Date 31-Aug-2017 safeguard. Procurement training - trainings on preparation of bidding documents and request for proposal for large packages; evaluation of bids/proposals for Technical REA Recurrent Continuous Completion of training sessions Page 19 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) large packages; and contract management Establish records keeping Digital record keeping management management system installed at system Technical REA Due Date 31-May-2021 REA. Establish system for timely disbursement of funds to the REA to meet its contractual obligations Fiduciary Systems MoF Due Date 17-Mar-2018 System established. Strengthen capacity for ESIA: (a) an ESIA consultant qualification system at the REA; (b) training for ESIA consultants, (a) an ESIA consultant implemented by qualification system at the REA; REA and NEMC; (c) (b) training for ESIA consultants, dedicated staff for implemented by REA and NEMC; processing at Environmental and Social (c) dedicated staff for processing NEMC Systems REA Due Date 29-Jan-2021 at NEMC Strengthen capacity for monitoring, and enforcement: (a) adding staff and equipment to the REA’s E&S unit; (b) place env. staff in TANESCO’s zonal offices to support district office supervision of grid-extension projects;(c) EMO Environmental and Social REA/TANESCO/NE training program Systems MC Due Date 17-Mar-2018 Staff recruited Strengthen the REA’s capacity for informing and consulting with all stakeholders, including district and local Governments through Environmental and Social formulation and Systems REA Due Date 31-Aug-2021 Formulation and adoption of SEP Page 20 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) adoption of a Stakeholder Engagement Plan, and administer training in its application Prepare a detailed REA procedural manual Fiduciary Systems REA Due Date 17-Mar-2018 Procedural Manual Completed. Monitoring and annual reporting by the REA on social and environmental performance including its compliance with existing land and compensation laws in wayleave acquisition, with verification by third party Receipts of periodic Annual engaged by REA. Technical REA Due Date 01-Oct-2021 reports Project Management Consultant will be hired by REA Technical REA Due Date 30-Aug-2019 PMC hired PS MoFP will set up a Project Steering Committee to monitor TANESCO payments to SPPs. TANESCO will report to the Project Steering Committee, chaired by PS MoFP, and to the Association on a Project Steering Committee quarterly basis Other TANESCO/MOFP Due Date 19-Jun-2017 established Apply the World Bank’s Fraud and Corruption Policy and check World Bank website for World Bank’s Fraud and debarred or Corruption Policy and check temporary World Bank website for debarred suspended or temporary suspended bidders, bidders, prior to prior to intention to award intention to award Fiduciary Systems REA Recurrent Continuous applied. Page 21 of 22 The World Bank TZ-Rural Electrification Expansion Program (P153781) . Note to Task Teams: End of system generated content, document is editable from here. Please delete this note when finalizing the document Page 22 of 22