The World Bank Siddhirganj Power Project (P095965) REPORT NO.: RES40171 DOCUMENT OF THE WORLD BANK RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SIDDHIRGANJ POWER PROJECT APPROVED ON OCTOBER 30, 2008 TO THE PEOPLE'S REPUBLIC OF BANGLADESH ENERGY & EXTRACTIVES SOUTH ASIA Regional Vice President: Hartwig Schafer Country Director: Mercy Miyang Tembon Regional Director: Guangzhe Chen Practice Manager/Manager: Demetrios Papathanasiou Task Team Leader(s): Md. Iqbal The World Bank Siddhirganj Power Project (P095965) I. BASIC DATA Product Information Project ID Financing Instrument P095965 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 30-Oct-2008 31-Dec-2019 Organizations Borrower Responsible Agency Gas Transmission Comapny Limited (GTCL),Power Grid The People's Republic of Bangladesh Company of Bangladesh (PGCB),Electricity Generation Company of Bangladesh (EGCB) Project Development Objective (PDO) Original PDO The primary development objective is to support investments in peaking power supply capability in Bangladesh such that unmet demand for energy is reduced by 1-billion kWh per year. Unmet demand has an economic cost of at as much as 2% of GDP. A secondary development objective is to build capacity among the implementing agencies: Elctricity Generation Company of Bangladesh, Power Grid Company of Bangladesh, and Gas Transmission Company Limited (GTCL). Current PDO Increase supply of electricity to Bangladesh grid network. Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-57370 13-Nov-2015 27-Dec-2015 15-Jun-2016 31-Dec-2019 153.33 61.80 89.21 The World Bank Siddhirganj Power Project (P095965) IDA-45080 30-Oct-2008 13-Nov-2008 31-Mar-2009 31-Dec-2019 333.77 309.78 1.23 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES The team recommends to cancel SDR 15,968,875.00 from the Additional Financing Credit (Cr. 5737-BD). This is the second cancellation of project funds. This recommendation follows a request from the Government of Bangladesh (GOB) through a letter dated December 22, 2019, to cancel a surplus of US$ 22 million from the project. Based on a joint assessment of project savings and financing requirements for the remaining IDA-financed components of the project, the total amount of IDA Credit proposed to be cancelled is SDR 15,968,875. The GOB has clarified through discussions with the Bank team that the cancelled amount is not needed for project completion. In January 2019, US$ 39.60 million was cancelled (equivalent SDR 28,446,850) under the project. Presently a total US$ 90.52 million remain undisbursed (including both Credits). The US$ 22 million can be cancelled from the Additional Credit since only US$ 1.23 million has remained in the Original Credit. The rest US$ 67.29 will be used to clear the outstanding payments of the project. The project is at the stage of completion and will close on the current closing date of December 31, 2019. It is successfully implemented; all components are functioning and delivering results. The integrated, gas-to-power infrastructure (gas line, power evacuation system and combined cycle power plant) is in commercial operation since September 9, 2019 and provides 335 MW to electricity grid and 250 mmcfd of gas to greater Siddhirganj/Naryanganj region. The power evacuation system can evacuate 480 MW from Siddhirganj power hub. All activities of project TA are almost complete. The TA has enhanced utility capacity in design, procurement and construction of physical infrastructures; O&M; ERP; environmental and social mitigation management; and financial management. There remain no procurement activities. Project disbursement is 80%. The project is benefiting greater Dhaka area with improved power supply and Siddhirganj/Narayanganj/Meghanghat area with improved gas supply. As of the last implementation review mission in December 2019, the project is rated satisfactory in progress towards achievement of the Development Objective, Overall Implementation Progress and other ratings. Fiduciary ratings are satisfactory for procurement and safeguards and moderately satisfactory for financial management as Electricity Generation Company of Bangladesh (EGCB) has not finalized a 10-year financial projection. However, they have a business plan prepared manually which with the help of ERP, will be upgraded to the level of 10-Year business plan. The designated FMS of the project will track progress of this. There are no outstanding audits. The performances of the implementing agencies (EGCB, Gas Transmission Company Limited (GTCL), and Power Grid Company of Bangladesh Limited (PGCB), have been satisfactory, and Bank team and EGCB have agreed on the actions for successful and orderly completion of the project with GOB and all three implementing agencies: (1) EGCB, the implementing agency of CCPP, continues to operate and maintain the 335 MW Combined Cycle Power Plant and monitor, on monthly basis, the additional electricity (GWh) delivered to grid; (2) EGCB will share with the Bank copies of completion documentation of 335 MW CCPP facilities (Completion Certificate, Operational Acceptance Certificate, The World Bank Siddhirganj Power Project (P095965) Commercial Operation Date deceleration and Dependable Capacity Certificate, and Final PPA); (3) Two ongoing TA contracts of EGCB (Owner's Engineering and ERP) will be completed on or before December 31, 2019; and (4) Titas Gas will take over custody transfer of two gas Regulating and Metering Stations (Siddhirganj and Haripur) from GTCL by end of the month. II. DETAILED CHANGES