The World Bank Report No: ISR14295 Implementation Status & Results Lao People's Democratic Republic Rural Electrification Phase II Project of the Rural Electrification (APL) Program (P110978) Public Disclosure Copy Operation Name: Rural Electrification Phase II Project of the Rural Project Stage: Implementation Seq.No: 5 Status: ARCHIVED Archive Date: 14-Jun-2014 Electrification (APL) Program (P110978) Country: Lao People's Democratic Republic Approval FY: 2010 Product Line: IBRD/IDA Region: EAST ASIA AND PACIFIC Lending Instrument: Adaptable Program Loan Implementing Agency(ies): Electricite du Laos, Ministry of Energy and Mines Key Dates Board Approval Date 12-Jan-2010 Original Closing Date Planned Mid Term Review Date 25-Mar-2013 Last Archived ISR Date 22-Oct-2013 Effectiveness Date 09-Aug-2010 Revised Closing Date 30-Jun-2015 Actual Mid Term Review Date 22-May-2013 Project Development Objectives Rural Electrification Phase II Project of the Rural Electrification (APL) Program (P110978) Project Development Objective (from Project Appraisal Document) a) To increase access to electricity of rural households in villages of Project provinces; and b) To further improve the financial performance of EdL. Has the Project Development Objective been changed since Board Approval of the Program? Yes No GEF Project: Lao Rural Electrification Phase II Project (P117177) Global Environmental Objective (from Project Appraisal Document) The GEO are (i) increase efficiency of energy supply by EDL and consumption by consumers; and (ii) adopt substantial renewable energy in the government’s rural electrification program. Has the Global Environmental Objective been changed since Board Approval of the Program? Yes No Public Disclosure Copy Component(s) Component Name Component Cost EdL Component: A.1. Grid Extension; A.2. Loss Reduction; A.3. IT System & Financial Mgmt; A.4. 16.89 Safeguards Capacity Building; and A. 5. Demand Side Mmgt & Energy Efficiency. MEM Component: B.1. Off-Grid Investment Program; B.2. Institutional Strengthening; B.3. Alternative 4.92 RE Delivery Models; B.4. RE Mast er Plan & Database; B.5. Organizational Strengthen of MEM Overall Ratings Previous Rating Current Rating Page 1 of 9 The World Bank Report No: ISR14295 Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Progress towards achievement of GEO Moderately Unsatisfactory Moderately Unsatisfactory Public Disclosure Copy Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Unsatisfactory Overall Risk Rating Implementation Status Overview Progress toward achievement of Project Development Objectives: After four years of implementation, the project had connected about 19,661 out of 37,700 (52%) of targeted rural households by December 2013 with new connections, both on-grid and off-grid, being added at an accelerated rate. The implementing agencies expect over 85% of the end-of- project connections target to be met by the new project closing date of June 2015, approved as part of the December 2013 restructuring because over 80 percent of the required power lines to enable new on-grid connections are built, and the off-grid connection rate is at 82 percent of target. Regarding the financial performance of Electricite du Laos (EDL), the company has been undergoing corporate restructuring that commenced in late 2010, including the separation of the generation business from EDL and the creation of EDL Generation Company to take over the power generation business. The financial situation of EDL is evolving, impacting its financial indicators. Lao Government officials and EDL are responding to ensure the financial sustainability of EDL and of the Lao PDR power sector partly by supporting a second action plan for financial sustainability, which is supported by the World Bank and IFC. As part of the December 2013 restructuring, EDL financial indicators were amended to account for the corporate restructuring. These included dropping the return on revalued assets ratio, self-financing ratio, and revised debt service coverage ratio to 1.1 times. Progress toward achievement of Global Environment Objectives: On the EDL energy efficiency supply side, the project has identified and corrected discrepancies in EDL's measurement of electricity distribution losses, which confirms that current distribution losses amount to about 14.3%. New activities to help reduce distribution losses below 13% can now be implemented, including some activities under this project (meter replacement, billing system fine-tuning). On the demand side, an energy efficiency awareness campaign was fully carried out. The implementation of energy efficiency pilot projects is now under way for public buildings. As for increasing renewable energy in the rural electrification program, the bids for village hydro schemes and new biogas power projects are now under evaluation. All together, the number of rural electrifications projects supported by the Rural Electrification Fund under this project could meet the end project target of three projects, provided that the village hydro schemes and new biogas projects move forward satisfactorily. If successful, the village hydro schemes and biogas projects will contribute toward meeting the 300,000 tons of CO2 reduction target, which has not yet been achieved. Locations Country First Administrative Division Location Planned Actual Laos Khoueng Savannakhet Khoueng Savannakhet Laos Khoueng Salavan Khoueng Salavan Public Disclosure Copy Laos Khoueng Khammouan Khoueng Khammouan Laos Khoueng Champasak Khoueng Champasak Laos Khoueng Attapu Khoueng Attapu Laos Khoueng Xekong Khoueng Xekong Laos Khoueng Bolikhamxai Khoueng Bolikhamxai Results Page 2 of 9 The World Bank Report No: ISR14295 Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target People provided with access to electricity by Number Value 0.00 78644.00 150800.00 Public Disclosure Copy household connections Date 30-Sep-2009 31-Dec-2013 30-Jun-2015 Comments Assumed average 4 persons Assumed average 4 persons per household (HH). per household (HH). By end December 2013 HHs The original target comprises are connected through P2P 27,700 HHs grid connections Program (9,532 HHs), EDL and 10,000 HHs off-grid grid extension (1,900 HHs) connections. and SHS (8,229 HHs). This totalis about 52% of end of project target. People provided with access to electricity by Number Value 0.00 45728.00 110800.00 hhold connections-Grid Sub Type Date 30-Sep-2009 31-Dec-2013 30-Jun-2015 Breakdown Comments 9,532 HHs achieved under Assumed average 4 persons PSP and 1,900 HHs under per household. EDL grid extension. This total is about 41% of end of project target for grid connections only. Ppl provided wth elec. by hhold conn.–Offgrid/ Number Value 0.00 32916.00 40000.00 minigrid–Only renewable sources Sub Type Date 30-Sep-2009 31-Dec-2013 30-Jun-2015 Breakdown Comments 8,229 HHs connected through Assumed average 4 persons SHS only. This total is about per household. 82% of end of project target. In addition to SHS, more HHs are planned tobe electrified through mini hydro generation, contributing to meeting the target of 10,000 Public Disclosure Copy HHs (40,000 people) EdL financial perfromance - Debt service Number Value 1.30 1.40 1.10 coverage ratio Date 31-Dec-2009 31-Mar-2014 30-Jun-2015 Comments FY 2012 results, including Revised Target Value: more non-operating income. (FY than 1.1 time 2013 results not available until after July 2014) Number of households electrified Number Value 0.00 19661.00 37700.00 Page 3 of 9 The World Bank Report No: ISR14295 Date 31-Dec-2009 31-Dec-2013 30-Jun-2015 Comments By end December 2013 HHs were connected through P2P Public Disclosure Copy Program (9,532 HHs), EDL grid extension (1,900 HHs) and SHS (8,229 HHs). This total is about 52% of end of project target. Account receivables from Government Months Value 20.00 14.00 3.00 agencies Date 31-Dec-2009 31-Mar-2014 30-Jun-2015 Comments 2012 financial results. The second five-year financial action plan includes provisions to reduce government arrears toward the endof project target. MOF and EDL are deliberating the details. Global Environmental Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Electricity losses per year in the project area Percentage Value 13.00 14.30 12.00 Date 30-Sep-2009 31-Mar-2014 30-Jun-2015 Comments Technical and non-technical 6.67% is non-technical loss The TA component of this losses were not and 7.63% is the technical project has identified that the disaggregated. loss based on the Mecardos baseline 13% reported Non-technical loss study, distribution loss was too low. executed by the Bank (2011 Therefore, the original <13% data). end target may not be met by the closing date. This study confirms that the Public Disclosure Copy baseline value 13% was too low. Total net injected generation Megawatt hour Value 0.00 0.00 0.00 (MWh) Sub Type Supplemental Page 4 of 9 The World Bank Report No: ISR14295 Electricity losses per year in the project area- Percentage Value 13.00 7.60 7.60 Technical Sub Type Supplemental Public Disclosure Copy Electricity losses per year in the project area- Percentage Value 0.00 6.67 6.67 Non-Technical Sub Type Supplemental People provided with access to electricity by Number Value 0.00 32916.00 40000.00 hold connections-Other RE: Off-grid Date 30-Sep-2009 31-Dec-2013 30-Jun-2015 Comments Assumed average 4 persons per household. 8,229 HHs connected through SHS only. This total is about 82% of end of project target. In addition to SHS, more HHs are planned to be electrified through mini hydro generation, contributing to meeting the target of 10,000 HHs (40,000 people) by project closing date (f) CO2 emission reduction Metric ton Value 0.00 0.00 300000.00 Date 31-Dec-2009 31-Mar-2014 30-Jun-2015 Comments No new renewable energy To be calculated based on project was developed to cumulative electricity date. Village hydropower generated from newly projects are in rebidding installed renewable energy process. Bid for biogas generation capacity and projects is under review. reduction of EdL's distribution system losses. Newly installed renewable energy generation Megawatt Value 0.00 0.00 0.30 Public Disclosure Copy capacity Date 31-Dec-2009 31-Mar-2014 30-Jun-2015 Comments Target is not yet achieved. Village hydropower project are in rebidding process. Bid for biogas projects is under review. EdL's distribution system losses Percentage Value 13.00 14.30 12.00 Date 31-Dec-2009 31-Mar-2014 30-Jun-2015 Page 5 of 9 The World Bank Report No: ISR14295 Comments 6.67% is non-technical loss The TA component of this and 7.63% is technical loss project has identified that the (2011 data). baseline 13% reported distribution loss was too low. Public Disclosure Copy Therefore, the original 12% end target may not be met by the closing date. Measurable increase in awareness and Percentage Value 50.00 100.00 100.00 adoption of EE technologies and practices by Date 31-Dec-2009 31-Mar-2014 30-Jun-2015 customers Comments (a) awareness of EE: 50 Awareness made to 100% (a) 100% central government government agencies; (b) central GoL agencies; 9 large agencies; 100 large adoption of EE technologies consumers in VTE. EE pilot consumers in Vientiane; (b) and practices: no customers project is underway for public 50 government agencies, 4 buildings. hospitals, 4 large commercialconsumers Generation Capacity of Hydropower Megawatt Value 0.00 0.00 0.30 constructed or rehabilitated under the project Date 31-Dec-2009 31-Mar-2014 30-Jun-2015 Comments No construction yet. The project is being re-bid Generation Capacity of Hydropower Megawatt Value 0.00 0.00 0.30 constructed under the project Sub Type Date 31-Dec-2009 31-Mar-2014 30-Jun-2015 Breakdown Comments Project is being re-bid. Bid evaluation is underway. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Distribution lines constructed or rehabilitated Kilometers Value 0.00 795.00 1209.00 under the project Date 31-Dec-2009 31-Dec-2013 30-Jun-2015 Comments 387 Km of 22kV lines (medium voltage) and 407 km Public Disclosure Copy of 0.4kV line (low voltage) constructed. Distribution lines constructed under the project Kilometers Value 0.00 795.00 1209.00 Sub Type Date 31-Dec-2009 31-Dec-2013 30-Jun-2015 Breakdown Comments 387 Km of 22kV lines (medium voltage) and 407 km of 0.4kV line (low voltage) constructed. EdL distribution system losses Percentage Value 13.00 14.30 12.00 Page 6 of 9 The World Bank Report No: ISR14295 Date 31-Dec-2009 31-Mar-2014 30-Jun-2015 Comments 6.67% is non-technical loss The TA component of this and 7.63% is the technical project has identified that the Public Disclosure Copy loss based on the CYMDIST baseline 13% reported Mecardos Non-technical loss distribution loss was too low. study, executed by theBank Therefore, the original <13% end target may not be met by the closing date. Number of households newly electrified Number Value 0.00 8229.00 10000.00 through off-grid renewable energy technologies Date 31-Dec-2009 31-Dec-2013 30-Jun-2015 Comments 8,229 HHs connected through SHS only. This total is about 82% of end of project target. In addition to SHS, more HHs are planned tobe electrified through mini hydro generation. Measurable increase in awareness and Percentage Value 10.00 100.00 80.00 adoption of EE technologies Date 31-Dec-2009 31-Dec-2013 30-Jun-2015 Comments 10 GOL agencies under REP Awareness made to 100% (a) 100% central government I central GoL agencies; 9 large agencies; 100 large consumers in VTE. EE pilot consumers in Vientiane; (b) project is underway for public 50 government agencies, 4 buildings. hospitals, 4 large commercialconsumers Number of households newly electrified Number Value 0.00 11432.00 27700.00 through grid extension Date 31-Dec-2009 31-Dec-2013 30-Jun-2015 Comments 9,532 were achieved under PSP and 1,900 under EDL grid extension. This total is about 41% of end of project Public Disclosure Copy target for grid connections only. Number of rural electrification projects with Number Value 0.00 0.00 3.00 financial support of Rural Electrification Fund Date 31-Dec-2009 31-Dec-2013 30-Jun-2015 Comments 1 biogas & 2 hydro projects are being re-tendered. Data on Financial Performance (as of 14-Mar-2014) Financial Agreement(s) Key Dates Page 7 of 9 The World Bank Report No: ISR14295 Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P110978 IDA-H5380 Effective 13-Jan-2010 08-Feb-2010 09-Aug-2010 30-Jun-2014 30-Jun-2015 P117177 TF-98662 Effective 05-May-2011 05-May-2011 17-Aug-2011 30-Jun-2014 30-Jun-2015 Public Disclosure Copy Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P110978 IDA-H5380 Effective USD 20.00 20.00 0.00 16.35 2.97 82.00 P117177 TF-98662 Effective USD 20.00 1.82 0.00 0.65 1.17 36.00 Disbursement Graph Key Decisions Regarding Implementation Public Disclosure Copy First, EDL should expedite connections for the remaining 13,207 households (as of March 2014), now that over 80 percent of the required power line to enable these new household connections is built. Second, the Ministry of Energy and Mines (MEM) should award tenders for village hydro scheme and biogas projects in the coming months. Third, Lao PDR and EDL officials should propose financial actions to help enhance EDL’s financial sustainability and should help EDL achieve the revised financial indicator targets established under the December 2013 restructuring. The next supervision mission is planned for September 2014. Restructuring History Page 8 of 9 The World Bank Report No: ISR14295 Level two Approved on 27-Nov-2013 Related Projects Public Disclosure Copy P117177-GEF Project: Lao Rural Electrification Phase II Project Public Disclosure Copy Page 9 of 9