OFMICAL - Supplemental Letter BUKHARA REGIONAL PRODUCTION ENTERPRISE SUVOKOVA May 13, 2016 International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Re: PORTION A CREDIT NUMBER 5698-UZ PORTION B CREDIT NUMBER 5699-UZ (Additional Financing for the Bukhara and Samarkand Sewerage Project) Performance Monitoring Indicators Dear Sirs and Mesdames: This refers to paragraph 1, Section II.A of the Schedule to the Project Agreement of even date herewith between the Bukhara Regional Production Enterprise Suvokova (BVK) and the International Development Association (the Association). BVK hereby confirms to the Association that the indicators set out in the attachment to this letter shall serve as a basis for BVK to monitor and evaluate the progress of the Project and the achievement of the objectives thereof. Very truly yours, BUKHARA REGIONAL PRODUCTION ENTERPRISE SUVOKOVA By Authorized Representative Attachment Attachment to Supplemental Letter Additional Financing for the Bukhara and Samarkand Sewerage Project REVISED PROJECT RESULTS FRAMEWORK Project Development Objective (PDO): The objective of the project is to reduce wastewater pollution and improve the performance of utilities responsible for wastewater management in Bukhara and Samarkand. E Unit of Actual End Data Source/ Responsibility Results Indicators a Baseline YR5 YR6 YR7 Frequency for Data I Measure Current Target Methodology ______________________ ______ _ ____ _ I_______ I ______ ______ .1_______ ___ ____ _ I____ ___ _ ____CollectClletio PDO Level Direct project beneficiaries 0 Number 350,000 370,000 400,000 400,000 450,000 500,000 Analysis/ Annual survey PIUs, Female beneficiaries % 52 52 52 52 52 52 reports SVK and BVK Volume (mass) of BOD Daily flow pollution loads removed by the measurement treatment plant supported under (tons/ Semi - and BOD PIUs, the project year) Annual analysis SVK and BVK BVK 1,590 1,680 1,680 1,680 2,000 2,000 progress SVK _ 2,450 2,450 2,450 2,450 3,100 3,100 reports Energy efficiency at the WWTP kWh/kg BVK BOD5 4.1 4.3 _ _ _ Progress PIUs, BVK__eliminat 4.1_4.3 - - -_3 Annual reports SVK and BVK SVK ed 4 4.0 - - - 3 Operating cost coverage ratio ._Utilities - Semi -Plus, BVK Ratio 1.28 1.28 1.41 1.43 1.44 1.45 Semi - Financial SVK and BVK __________________ _____ __________ _____ ______ Annual ReportsBV SVK 1.08 1.08 1.35 1.37 1.39 1.40 Reports Number of sewer blockages per year in the Number Semi - Progress PIUs, BVK Number 1,404 1,200 1,000 900 800 600 Annual Reports SVK and BVK SVK 1,056 1,000 1,000 900 800 700 % of customers satisfied with customer Pus, the services received %csoe Is the ervces ecevedsatisfaction SVK and BVK BVK 0 30 40 50 55 60 Annual Of which female (%) 0 30 40 50 55 60 Rrve SVK 0 30 40 50 55 60 Reports -2- Of which female (%) 0 30 40 50 55 60 INTERMEDIATE RESULTS Component A Communication and Public Draft Draft Draft implem Awareness Strategy for the BVK Text 0 develope develop develop ented Semi - Progress PCU/ PIUs, and SVK developed and d ed ed mplemented Annual Reports, SVK and BVK implemented VK staff trained in utility 51 500 700 900 Progress management, O&M, finance, Number 0 1,000 Semi - Reports, PCU/PIUs, and communications, Annual Training SVK and BVK procurement reports Number of people who 0 500 1000 1,500 Progress participated in the public Number 0 2,000 reports Public outreach workshops conducted - outreach PCK/PdUs, _____ _____ _____Annual SVK and BVK 0 30 50 50 Workshops - Of which female (%) %30550 Reports Pilot SCADA system installed Installed installed installed installed Progress PCU/PIUs, and operational Text None operational Monthly Reports SVK and BVK Feasibility studies and detailed No No No No Monthly, Feasibility engineering design for future Yes/No No Yes semi- Feasibilit PCU investments completed annual Study report Component B Cumulative length of sewer lines Progress replaced in: _ Quarterly reports, Mid- PIUs, BVK 0 15 15 40 65 82.7 term Review SVK and BVK SVK - 0 27.75 27.75 34.35 34.35 34.35 Report Cumulative length of new sewer Progress lines constructed in Bukhara Q SQuarterly reports, Mid- PIus, BVK E 0 1.4 1.4 7.4 9.0 11.2 term Review SVK and BVK SVK 0 5.2 5.2 20 40 59.2 Report New household sewer connections constructed under 2 Number Progress the project Quarterly reports, Mid- PIUs, BVK 0 1,170 2,000 2,500 3,500 4,500 term Review SVK and BVK Report SVK 0 2,675 4,000 7,000 11,000 14,000 -3- Notes: 1. Customers in project areas reporting improved wastewater services. This PDO indicator directly relates to the quality of wastewater services in project areas affected by the investments. It will be measured through the average ratings derived from the satisfaction survey; a detailed methodology will be developed, including the identification of control groups, so that benefits resulting from project interventions can be correctly attributed. 2. Volume (mass) of BOD pollution loads removed by treatment plants. This PDO indicator directly relates to the quality of wastewater services in targeted cities. This indicator measures the cumulative volume (mass) of BOD pollution loads removed by the treatment plant supported under the project. The BOD level for the raw sewage (influent) and treated effluent will be measured by utilities as part of their operating procedures on a daily basis. Cumulative values will be reported to the Bank on a semiannual basis. Project interventions are designed to improve wastewater collection and treatment capacity and as such, BOD loads removed are set to increase in the targeted cities. 3. Operating cost coverage ratio (OCCR). This PDO indicator directly relates to efficiency of wastewater services in cities. Specifically, the indicator reflects the financial performance of the utility as a ratio of total revenues and total operating expenses (which exclude depreciation and debt servicing). The OCCR will capture impacts of project interventions designed to support efficiency, including reductions in operating costs and revenue enhancement. It will be measured by vodokanals as part of their operating procedures and average values will be reported to the Bank semiannually. 4. Project beneficiaries. This indicator reflects an estimate of the population that is directly benefiting from activities and interventions supported by the project. This will be recorded as a cumulative amount, consisting of an estimate of the population which is directly benefiting from wastewater interventions in the two cities. Census data will be used to determine average household size and to estimate the proportion of beneficiaries that are female. 5. Prepare new design standards for water supply and wastewater. This indicator will monitor progress of a key activity to be implemented under Component 2, which involves updating design standards for water and wastewater systems. This activity will support cost-effective designs and future operational efficiencies. -4-