Document of The World Bank Report No: 57450 v1 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF RENEWABLE ENERGY FOR RURAL ECONOMIC DEVELOPMENT PROJECT CREDIT JUNE 20, 2002 TO THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA October 18, 2010 1 ABBREVIATIONS AND ACRONYMS CDM Clean Development Mechanism MW Me gawatts Regional Vice President: Isabel M. Guerrero Country Director: Daniel J. Boyce Sector Manager / Director: Malcolm Cosgrove-Davies/John Henry Stein Task Team Leader: Abdulaziz Faghi 2 SRI LANKA RENEWABLE ENERGY FOR RURAL ECONOMIC DEVELOPMENT P076702 CONTENTS Page A. SUMMARY................................................................................................................ 4 B. PROJECT STATUS.................................................................................................. 4 C. PROPOSED CHANGES .......................................................................................... 4 ANNEX 1: RESULTS FRAMEWORK AND MONITORING .................................... 5 3 RENEWABLE ENERGY FOR RURAL ECONOMIC DEVELOPMENT RESTRUCTURING PAPER SUMMARY The pr oposed changes are i ntended t o r evise t he e nd-of-project t arget fo r t he `o ff-grid renewables' c omponent from 161,000 hous eholds, s mall a nd m edium e nterprises a nd public institutions being connected to 113,500 as recommended by the Ministry of Power and E nergy. T he reduced t arget i s appropriate in l ight of f aster t han a nticipated grid- based rural electrification which reduces demand for off-grid renewable solutions. PROJECT STATUS Project imp lementation i s p roceeding w ell w ith a v ery s trong p ipeline o f s ub-projects. The i mplementing a gency continues t o receive r e-finance a pplications b y developers which exceed the available funds under the project. PROPOSED CHANGES The r estructuring i s r equired t o f ormally r evise t he e nd-of-project target f or t he intermediate r esults i ndicator of ` number of of f-grid hous eholds c onnected unde r t he project.' T he or iginal target w as 100,000 hou seholds a nd 1,000 s mall a nd m edium enterprises a nd publ ic i nstitutions t o be c onnected unde r t he pr oject t hrough of f-grid systems s uch a s s olar p hotovoltaic in vestments as w ell c ommunity-based v illage h ydro and bi o-mass s chemes. T he A dditional Financing s et a n a dditional t arget of 60,00 0 households ( including 5 00 s mall a nd m edium e nterprises) t o be c onnected t hrough o ff- grid systems. The proposed revision of this target is largely attributed to tapering demand for off-grid solutions as a result of rapid grid expansion which was not anticipated at the time these targets w ere s et. T he ot her r esults i ndicators r emain va lid a nd t he pr oject c ontinues t o make good progress on achieving those. Results/indicators · The pr oposed c hange w ill r evise t he i ntermediate out come i ndicator of `number of of f-grid hous eholds c onnected und er t he P roject' a s de scribed above. Refer to Annex 1 for details. 4 ANNEX 1: Results Framework and Monitoring SRI LANKA: RENEWABLE ENERGY FOR RURAL ECONOMIC DEVELOPMENT Project Development Objective (PDO): i) improve the quality of rural life by utilizing off-grid renewable energy technologies to bring electricity to remote communities ii) promote private sector power generation from renewable energy sources for the main grid Revised Project Development Objective: No changes proposed. D=Dropped Cumulative Target Values Core C=Continue Unit of Data Source/ Responsibility for PDO Level Results Indicators Baseline Frequency N= New Measure YR 1 YR 2 YR 3 YR4 Methodology Data Collection R= Revised Indicator One: Continue Megawatts 31 (existing - - - 166 MW (i.e. Quarterly Quarterly Project Additional 85 MW of small small scale baseline value Progress Administrative scale renewable grid connected renewable plus target of Reports. Unit power generation capacity grid 85MW plus installed. The additional connected another 50MW Project financing would support power from additional Supervision another 50MW of grid- generation at financing) Reports. connected power generation project start) capacity. Monitoring and Evaluation program outputs. Indicator Two: Continue - Zero - - - Evaluation of Quarterly Quarterly Project Increases in income generating (Incremental social and Progress Administrative activities in communities that impact economic Reports. Unit gain access to electricity measured in impacts under communities implementation Project that gain Supervision access to Reports. energy 5 services Monitoring and under the Evaluation project. program outputs. Indicator Three: Continue Tonnes Emissions - - - 1.25 million Quarterly Quarterly Project Reduce Greenhouse Gas reductions tonnes avoided Progress Administrative Emissions calculated carbon Reports. Unit according to emissions approved Project CDM Supervision methodology Reports. for small scale Monitoring and (<15MW) Evaluation renewable program power outputs. projects INTERMEDIATE RESULTS Intermediate Result (Component One): Direct access to electricity for 100,000 households and 1,000 rural small and medium enterprises and public institutions through off-grid systems (solar, community hydro and biomass) and an additional 60,000 households including 500 rural small and medium enterprises and public institutions from additional financing. Revised Intermediate Result (Component One): Direct access to electricity for 113,500 households (including rural small and medium enterprises and public institutions) through off-grid systems (solar, community hydro and biomass) for both original credit and additional financing. Intermediate Result indicator: Revised Customers 22,685 - - - 136,185 (i.e. Quarterly Quarterly Project Electricity access to 113,500 households, baseline value Progress Administrative households, rural small and enterprise plus an Reports. Unit medium enterprises and public and public additional institutions through off-grid institutions 113,500 from Project systems supplied the Project) Supervision with off- Reports. grid renewable Monitoring and electricity Evaluation service program outputs. 6 7