The World Bank Rebuilding Energy Infrastructure and Access (P127203) REPORT NO.: RES36730 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF REBUILDING ENERGY INFRASTRUCTURE AND ACCESS APPROVED ON SEPTEMBER 27, 2012 TO Electricité D’Haiti (EDH) & Ministère des Travaux Publics, Transport et Communication (MTPTC) ENERGY & EXTRACTIVES LATIN AMERICA AND CARIBBEAN Regional Vice President: Axel van Trotsenburg Country Director: Anabela Abreu Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Antonio Alexandre Rodrigues Barbalho Task Team Leader: Koffi Ekouevi, Lucine Flor Lominy The World Bank Rebuilding Energy Infrastructure and Access (P127203) ABBREVIATIONS AND ACRONYMS ANARSE Autorité Nationale de Régulation du Secteur Energétique CTF Clean Technology Fund EDH Electricité d ’Haiti ESIA Environmental and Social Impact Assessment PCU Project Coordination Unit PDO Project Development Objective MEF Ministère de l’Economie et des Finances MTPTC Ministère des Travaux Publics, Transport et Communication SREP Scaling Up Renewable Energy Program The World Bank Rebuilding Energy Infrastructure and Access (P127203) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P127203 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 27-Sep-2012 29-Nov-2019 Organizations Borrower Responsible Agency EDH,MTPTC UCP Energie Project Development Objective (PDO) Original PDO The objectives of the Project are to (a) strengthen energy policy and planning capacity, (b) to improve the sustainability and resilience of the electricity sector and to restore and expand access to reliable electricity services, and (c) provide financial assistance to the electricity sector in case of an emergency. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-H8060 27-Sep-2012 06-Nov-2012 06-Feb-2013 29-Nov-2019 51.00 35.36 9.27 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank (iii) This is the sub-para numbering for this level. This is the sub-para numbering for this level. Rebuilding Energy Infrastructure and Access (P127203) (ii) 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. numbering for this level. Note to Task Teams: End of system generated content, document is editable from here. (a) This is the sub-para numbering for this level. This is the sub-para numbering for this level. This is the sub-para standard.] 1. [All sub-sections must have a continuous paragraph numbering for the entire main text or for each annex per institutional I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. Header Note: Formatting instructions for this document. The project was approved on September 27, 2012 and became effective on February 6, 2013. The objectives of the Project are to (a) strengthen the Recipient’s energy policy and planning capacity; (b) improve the sustainability and resilience of the Recipient’s electricity sector and restore and expand access to reliable electricity services; and (c) provide financial assistance in case of an Energy Sector Emergency. The project has three components:  Component 1: Strengthening Energy Sector Institutions and Improving Energy Access  Component 2: Enhancing EDH's Performance and Rehabilitating and Expanding its Infrastructure  Component 3: Energy Sector Risk and Emergency Response Contingent Reserve Many factors have influenced project performance from effectiveness to date. Among them, the main ones are: weak sector governance, poor performance of the power utility (EDH), frequent changes of EDH General Directors, and the constant deterioration of the overall social and political environment in the country during the last Presidential Elections. Persistent unsatisfactory performance and lack of progress in the improvement in sector governance and reform and performance of EDH as well as shifting joint GOH and Bank strategy to expand access to electricity through off-grid electrification investments while maintaining emphasis on the improvement of EDH’s operational and financial performance triggered to a Level 2 restructuring in 2017. This strategic choice of the December 2017 restructuring was in line with the increasing portfolio of the Bank in Haiti regarding off-grid electrification as represented by two new projects: (i) “Haiti Modern Electricity Services for All” financed by the Clean Technology Fund (CTF); and (ii) “Renewable Energy for All” financed by the Scaling Up Renewable Energy in Low Income Countries Program (SREP) that were approved by the Bank on October 25, 2017. This shift was proposed to focus increasingly on off-grid renewable energy initiatives while. US$25 million from the original grant of US$90 million was cancelled, with approval of the government and reallocated to Haiti IDA portfolio. The project closing date was extended to November 29, 2019 to allow for implementation of selected activities as part of the restructuring. Project Status Project performance improved for about 6 months after the restructuring with progress towards achievement of PDO maintained at Moderately Satisfactory while Implementation progress upgraded from Moderately Unsatisfactory to Moderately Satisfactory. Unfortunately, this performance was not sustained and in January 2019 both progress towards achievement of PDO and Implementation Progress dropped to a Moderately Unsatisfactory rating as the disbursement level related to physical implementation was slow as programmed activities such as preparation of procurement packages of the construction of the Dispatching Center, human resources audit, and multi-tier framework survey were experiencing The World Bank Rebuilding Energy Infrastructure and Access (P127203) delays. Consequently, the disbursement level rose only from 51 percent to 53 percent during that period. At about six months before the closing date of the project, the disbursement remains low at 59 percent as of June 17, 2019.  Component 1: Strengthening Energy Sector Institutions and Improving Energy Access Through this component, capacity strengthening is being provided consistently to the Cellule de l’Energie and ANARSE. Key activities under Component 1 are: (i) Audit of EDH Financial Accounts; (ii) Solar Electrification of 500 schools; (iii) Electrification of Champ de Mars; (iv) Solar Street Lights for Cap-Labadie; (v) Multi-tier Framework Survey; and (vi) training of EDH management staff. Regarding the Audit of EDH Financial Accounts, they were conducted to cover a period of 2006 to 2016. A preliminary report was submitted to EDH's Directorate for comments and approval, which were provided on December 3, 2018. A final report was submitted on March 25, 2019. As for solar electrification of the 500 schools, by May 15, 2019 about 252 schools have had PV solar energy systems installed. Firms in charge of the PV solar energy systems are also affected by the general climate of insecurity in the country. The rate of installation of the system has slowed down in recent months. The same situation is observed at the Champs de Mars, where underground works are proceeding with delays. However, in addition to the previous ones already installed in Port au Prince and other areas in the North department (Dondon, Milot), about 200 solar street lights have been installed on the road Cap-Labadie. This was a joint effort undertaken with supervision from both Energy and Transport Bank team members as well as both counterparts from the Government. There were significant delays in the preparation of procurement packages of the Multi-tier Framework Survey and training of EDH management staff.  Component 2: Enhancing EDH's Performance and Rehabilitating and Expanding its Infrastructure Component 2 includes two main activities: (i) Rehabilitation of Drouet Hydroelectric Power Plant; (ii) Construction of a New Dispatching Center for EDH; (iii) power interconnections study; and (iv) Human Resources audit of EDH. The rehabilitation of Drouet Hydroelectric Power Plant, consisting in changing the turbines, is ongoing. The turbines were dismantled, and fluid/mud discharge zone was rehabilitated. New turbines were ordered, and the team expects them to be replaced and be operational by the end of the Project. This rehabilitation is expected to be completed by September 7, 2019. It is important to note that the Drouet Hydroelectric Power Plant is situated at a zone of a growing civil disturbance making it is increasingly difficult for contractors to conduct swiftly their works and for the Bank team to conduct site supervision missions. Regarding the construction of the new Dispatching Center for EDH, an engineering and supervision firm was hired in February 2018. The firm has worked with the EDH team on the specific technical aspects and on preparing and finalizing all safeguards documents that were mandatory to proceed with this activity (such as the ESIA). The ESIA was completed and approved by the Bank on September 28, 2018 (after thorough review by safeguard specialists). Upon this approval, the EDH Directorate went ahead and purchased land required for the construction. On December 13, 2018, the team received the No Objection request for the Request for Proposal from the Project Implementation Unit (PIU). On January 31, 2019, the Government requested an extension of the closing date of the project as 23 months would be needed to complete all related activities of the Dispatching Center. On March 11, 2019, the Bank informed the Government that the project would not be extended due to its poor performance. Significant delays were experienced in the preparation of procurement packages of the power interconnections study and the Human Resources Audit of EDH.  Component 3: Energy Sector Risk and Emergency Response Contingent Reserve. No event has triggered this component. The World Bank Rebuilding Energy Infrastructure and Access (P127203) Rationale for Restructuring The main objective of this restructuring is to capture the partial Grant cancellation and reallocate the funds to the global IDA envelop of Haiti. The Government of Haiti through the Minister of Economy and Finance requested a partial cancellation in the amount of US$14 million through a letter sent to the Bank dated June 6, 2019 (received at the Bank on June 7, 2019). This amount of USD14 million (SDR10,119,921.00 as of June 7, 2019) was mostly earmarked for the construction of the Dispatching Center for EDH, a Multi-tiers Framework Survey, power interconnections study, and training for EDH management. The partial cancellation was processed on June 7, 2019 and the GOH notified on June 20, 2019. The proposed restructuring will reflect the cancellation of the activities funded by the USD14 million as the limited implementation period until November 29, 2019 would not allow for their implementation nor completion. The proposed restructuring will also revise the results framework to reflect the cancelled activities and to reallocate funds across categories. The proposed cancelled amount has been drawn from Category 1 (SDR3,692,045.92), Category 7 (SDR5,764,490.35) and Category 8 (SDR663,384.73). Impact of the restructuring This restructuring would help the Project Coordination Unit focus on supervising the remaining activities under implementation till the closing date. Three main activities need particular attention: (i) Rehabilitation of Drouet Hydroelectric Power Plant; (ii) Electrification of Champ de Mars; and (iii) Solar Electrification of 500 schools. The On-going civil unrest in the country are impacting implementation of these activities as contractors are finding it difficult to have access to the sites for works. The Project Coordination Unit and the project implementation support team are closely monitoring implementation of these activities in the expectation that there would be a reasonable security environment to allow completion of physical implementation before the project closing date of November 29, 2019.  Risk Rating: The Risk Rating of the project remains the same as lessons have clearly shown that governance issues have heavily affected the sector performance, as stated by the Risk Rating table of the original project, this Project alone would not be able to address these issues. II. DESCRIPTION OF PROPOSED CHANGES Note: Formatting instructions for this document. The project components remained unchanged. As indicated above, this restructuring will drop some key activities from Component B. Header2, the Construction of the Dispatching Center for EDH, the Multi-Tiers Survey, EDH management staff training. The indicator 1. [All “construction sub-sections must have of a dispatching a continuous center” paragraph of Component numbering 2 would for the entire betext main marked or forfor deletion. each annex per institutional standard.]  (b) This Project is the sub-para numbering Implementation forThe Schedule. this level. PCU, This is the sub-para together numbering with all for this level. the entities This isin involved thethe sub-para project’s numbering for this level. implementation, prepared a new Procurement Plan provided in attachment.  Expenditure Eligible (iv) This is theCategories. It is proposed for this to sub-para numbering revise level. Thisthe Project’s is the sub-paraEligible Expenditures numbering categories as follows: 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 Rebuilding Energy Infrastructure and Access (P127203) Grant IDA H-806-06-HT Amount of the Percentage of Expenditures Financing Allocated to be Financed Category (expressed in SDR) (inclusive of Taxes) (1) Goods, works, non- 11,177,482.31 100% consulting services, consultants’ services, training and Operating Costs for Part 1.1 (a), (b), (c) and (d), and for Part 1.2 (a) and (b) of the Project (2) Goods, works, non- 0 Pro Memoriam consulting services, consultants’ services, training and Operating Costs for Part 1.2 (c) of the Project (3) Goods, works, non- 11,468,806.77 100% consulting services, consultants’ services, training and Operating Costs for Part 2.1 (b), (c), (d), (e), (f) and (g) and Part 2.2 (a) and (d) of the Project (4) Goods, works, non- 0 Pro Memoriam consulting services, consultants’ services, training and Operating Costs for Part 2.1 (a), and 2.2 (b) and (c) of the Project The World Bank Rebuilding Energy Infrastructure and Access (P127203) Amount of the Percentage of Expenditures Financing Allocated to be Financed Category (expressed in SDR) (inclusive of Taxes) (5) Goods, works, non- 0 Pro Memoriam consulting services, consultants’ services, training and Operating Costs for Part 3 Project (6) Refund of Preparation 0 Amount payable pursuant to Advance Section 2.07 of the General Conditions (7) Goods, works, non- 9, 119, 274.65 100% consulting services, consultants’ services, training and Operating Costs for Part 2.1 (b), (c), (d), and (e), and Part 2.2 (a) and (b) of the Project (8) Goods, works, non- 0 Pro Memoriam consulting services, consultants’ services, training and Operating Costs for Part 2.1 (a) of the Project Cancelled as of November 17,814,515.27 10, 2017 Cancelled as of June 7, 2019 10,119,921.00 TOTAL AMOUNT 59,700,000.00  Revised Grant Amount. With this second partial cancellation of the Grant, the total Grant amount is now SDR31,765,563.73. It was reduced after the first partial cancellation of November 2017 to SDR41,885, 484.73 from the original allocation of SDR59,700,000.  No Change in the Closing Date. The closing date of the project is maintained for November 29, 2019. The World Bank Rebuilding Energy Infrastructure and Access (P127203) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. I. SUMMARY OF CHANGES Changed Not Changed Results Framework ✔ Components and Cost ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ The World Bank Rebuilding Energy Infrastructure and Access (P127203) IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) Component 1: Sector Component 1: Sector Institutional Strengthening and 23.67 No Change Institutional Strengthening and 23.67 Energy Access Energy Access Component 2: EDH Component 2: EDH Performance Performance Enhancement Enhancement and Infrastructure 35.11 Revised 23.11 and Infrastructure Rehabilitation and Expansion Rehabilitation and Expansion Component 3: Emergency Component 3: Emergency 0.00 No Change 0.00 Response Response TOTAL 58.78 46.78 OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-H8060-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: GO CW NCS CS TR OP Pt 1.1a-d, 1.2ab 11,177,482.31 9,088,834.33 11,177,482.31 100.00 100.00 iLap Category Sequence No: 2 Current Expenditure Category: GO CW NCS CS TR OP Part 1.2c 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 3 Current Expenditure Category: GO CW NCS CS TR OP Pt 2.1b-g, 2.2ad 10,688,735.00 11,468,806.77 11,468,806.77 100.00 100.00 iLap Category Sequence No: 4 Current Expenditure Category: GO CW NCS CS TR OP Pt 2.1a, 2.2bc The World Bank Rebuilding Energy Infrastructure and Access (P127203) 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 5 Current Expenditure Category: GO CW NCS CS TR OP Part 3 0.00 0.00 0.00 100.00 100.00 iLap Category Sequence No: 6 Current Expenditure Category: Refund of Preparation Advance 0.00 0.00 0.00 100 iLap Category Sequence No: 7 Current Expenditure Category: GO CW NCS CS TR OP Pt 2.1b-e, 2.2ab 9,235,961.69 5,472,748.96 9,119,274.65 100.00 100.00 iLap Category Sequence No: 8 Current Expenditure Category: GO CW NCS CS TR OP Pt 2.1a 663,384.73 0.00 0.00 100.00 100.00 Total 31,765,563.73 26,030,390.06 31,765,563.73 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2013 2,000,000.00 2,000,000.00 2014 3,000,000.00 3,000,000.00 2015 4,000,000.00 4,000,000.00 2016 5,000,000.00 5,000,000.00 2017 10,000,000.00 7,500,000.00 2018 25,000,000.00 5,000,000.00 2019 11,000,000.00 10,500,000.00 2020 0.00 0.00 2021 0.00 0.00 . The World Bank Rebuilding Energy Infrastructure and Access (P127203) . Results framework COUNTRY: Haiti Rebuilding Energy Infrastructure and Access Project Development Objectives(s) The objectives of the Project are to (a) strengthen energy policy and planning capacity, (b) to improve the sustainability and resilience of the electricity sector and to restore and expand access to reliable electricity services, and (c) provide financial assistance to the electricity sector in case of an emergency. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target To strengthen energy policy and planning capacity Oversight capacity strengthened. Strengthening of Government's oversight capacity and Oversight capacity is weak in utility EDH, non existent in Energy Cell with clear mandate and adequately staffed. transparency in sector financial flows (Text) MTPTC Ministry. Budgetary transfers to EDH and availability of financial outlook monitored. Cash Recovery Index (Percentage) 22.00 35.00 Direct project beneficiaries (Number) 0.00 200,000.00 Female beneficiaries (Number) 28,000.00 100,000.00 PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Component 1: Sector Institutional Strengthening and Energy Access The World Bank Rebuilding Energy Infrastructure and Access (P127203) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target No Government entity exists to oversee the energy sector Government entity responsible for the energy sector adequately in Haiti 5 permanent staff are working for this unit staffed (Text) Electricity sector financial model and energy sector database No model exists for the sector. Database and financial model updated (Text) Offgrid access to electricity for collective uses (street lighting, 0.00 1,500.00 schools etc.) (Number) Offgrid connections to electricity (Number) 0.00 15,000.00 Component 2: EDH Performance Enhancement and Infrastructure Rehabilitation and Expansion External audits of EDH accounts (Text) No audit conducted since 2006. External audit of accounts available Restored connections (Number) 0.00 33,000.00 People provided with new or improved electricity service (CRI, 0.00 10,000.00 Number) Technical and non technical losses (Percentage) 66.00 50.00 Distribution lines rehabilitated (Kilometers) 0.00 148.00 Capacity of Renewable Energy (including Hydropower) 2.00 4.00 constructed or rehabilitated (Megawatt) Construction of new modern Dispatching (Text) Dispatching never rehabilitated or updated. Modern dispatching constructed. Action: This indicator has been Marked for Deletion IO Table SPACE The World Bank Rebuilding Energy Infrastructure and Access (P127203) Note to Task Teams: End of system generated content, document is editable from here. Please delete this note when finalizing the document