The World Bank Sustainable Energy Financing Program (P098423) REPORT NO.: RES33629 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SUSTAINABLE ENERGY FINANCING PROGRAM APPROVED ON JUNE 12, 2007 PROVIDING GEF GRANTS TO TO REPUBLIC OF FIJI AND AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ENERGY & EXTRACTIVES EAST ASIA AND PACIFIC Regional Vice President: Victoria Kwakwa Country Director: Michel Kerf Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Jie Tang Task Team Leader: Kamleshwar Prasad Khelawan The World Bank Sustainable Energy Financing Program (P098423) ABBREVIATIONS AND ACRONYMS ANZ ANZ Banking Group Limited CNO Coconut oil DOE Department of Energy EA Executing Agency EE Energy Efficiency ESSD Environmental and Social Safeguards Documents FJD Fijian Dollar GEF Global Environmental Facility GEO Global Environmental Objective GoF Government of Fiji IBRD International Bank for Reconstruction and Development IFC International Finance Corporation KWh Kilowatt Hour MSE Micro and Small Enterprise MTR Mid Term Review PAD Project Appraisal Document PDO Project Development Objective PFI Participating Financial Institution PNG Papua New Guinea PV Photovoltaic RBF Reserve Bank of Fiji RE Renewable Energy RMI Republic of Marshall Islands RSF Risk Sharing Fund SEFP Sustainable Energy Finance Project SI Solomon Islands SME Small and Medium Enterprise TA Technical Assistance USD United States Dollars VREP Vanuatu Rural Electrification Projects I and II WB World Bank The World Bank Sustainable Energy Financing Program (P098423) BASIC DATA Product Information Project ID Financing Instrument P098423 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 12-Jun-2007 30-Sep-2018 Organizations Borrower Responsible Agency Republic of Fiji,ANZ Department of Energy,Department of Energy Project Development Objective (PDO) Original PDO The project aims to significantly increase the adoption and use of renewable energy technologies in participating Pacific Island states through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in support of equipment purchase. Current PDO The project aims to (i) significantly increase the adoption and use of renewable energy technologies and the more efficient use ofenergy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in the Recipient's Territory (Fiji) and (ii) support knowledge sharing and capacity building on renewable energy and energy efficiencytechnologies in the Participating Island States. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-58282 17-Aug-2007 17-Aug-2007 29-Oct-2007 30-Sep-2018 5.20 5.20 0 TF-58284 09-Jul-2007 09-Jul-2007 09-Jul-2007 30-Sep-2018 1.99 .35 1.65 The World Bank Sustainable Energy Financing Program (P098423) TF-90429 09-Jul-2007 09-Jul-2007 09-Jul-2007 30-Sep-2018 .56 .51 .05 TF-90430 05-Jul-2007 05-Jul-2007 28-Sep-2007 23-Jul-2014 .19 .19 0 TF-90431 21-Jun-2007 21-Jun-2007 02-Nov-2007 07-Jul-2014 .51 .51 0 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. The Sustainable Energy Financing Program (the Program) originally commenced in 2007 as a USD 9.48 million Global Environmental Facility (GEF) grant-supported project with the principal aim of achieving an increased uptake of renewable energy technologies and energy efficiency in the Republic of Fiji (Fiji), Papua New Guinea (PNG), Solomon Islands (SI), Republic of Marshall Islands (RMI) and Republic of Vanuatu (Vanuatu). The World Bank financed the project in Fiji, PNG and SI. The International Finance Corporation (IFC) was to finance the program in RMI and Vanuatu but chose not to proceed. 2. The original project, to be implemented over two Phases, comprised four components: a. Component 1: (a) Risk-Sharing Fund (RSF) - Partial credit guarantees through ANZ (the Fund Manager) from the Risk Sharing Fund to Approved Participating Financial Institutions (PFIs) to make Covered Loans to Participating Individual Borrowers and Participating MSE Borrowers to enable them to make investments in Sustainable Energy technologies from the Approved Product Catalog and/or in related Sustainable Energy services under an Approved Business Plan. (b) Technical assistance to each Participating Pacific Island State (the Executive Agency) to: (i) select Approved PFIs to be eligible for partial credit guarantee coverage under the RSF; and (ii) develop and monitor: (A) the Approved Product Catalog and Approved Business Plans; and (B) the terms and conditions for Covered Loans to be eligible for financing support under the RSF. b. Component 2: Technical Assistance, Market Incentives and Communications -. This component supports TA through each Executive Agency during phase 1 and the Regional Executive Agency during phase 2 for capacity building for PFIs and Participating Borrowers, marketing and communications, and technical studies to promote lending and renewable energy products. c. Component 3: Borrower Participant Monitoring – Providing Technical Assistance and compensation for services through the Regional Executive Agency (with the cooperation of all Executive Agencies) to Participating Individual Borrowers who participate semi-annually in a survey, reporting their technical, The World Bank Sustainable Energy Finance Project (P098423) economic and social experiences resulting from access to modern energy services during Phase 1 of the program. d. Component 4: Management and Evaluation – Providing services of a Management Contractor to each Executive Agency to support component 1 and implement component 2 of the project during Phase 1 and providing services of a Regional Management Contractor to the Executive Agencies through the Department of Energy of the Republic of Fiji, acting as the Regional Executive Agency, to manage component 3 during Phase 1 and support component 1 and implement component 2 during Phase 2 of the program. The RSF under component 1(a) of the program is managed by Australia and New Zealand (ANZ) Banking Group Limited (Fund Manager) under a GEF Grant Agreement between IBRD, as a GEF Implementing Agency, and the Fund Manager (TF058282). The GEF Grant for the RSF of US$5.2M was a revolving fund that largely remains unused (US$4.8M) following payouts against non-performing loans (NPL) and payment of the Fund Manager’s fees and is available to support the restructured project. Phase 1 of components 1(b), 2, 3 and 4 of the program was implemented by each of the Executive Agencies of PNG, SI and Fiji for the first three years of the program under separate GEF Grant Agreements to each country (TF090429, TF090430, TF90431). During phase 2, which began after year 3, the implementation of these components was taken over by the Executive Agency of Fiji, acting as the Regional Executive Agency, with the support of a Regional Management Contractor and was funded through a regional grant to Fiji (TF058284). Currently, US$1.7M of funds under the two GEF Grants to Fiji remain available to support these components of the program over the extended period of the project. 3. The Program was restructured in March 2014 to limit its operation to Fiji, by closing the Program in PNG and SI and eliminating Component 3 (Component 4 became component 3 and the Grants to PNG and SI were closed). This led to an amended and restated GEF Grant Agreement between Fiji and IBRD, as a GEF Implementing Entity, dated July 2014 (TF090429, TF058284) and an amended and restated GEF grant agreement between IBRD, as a GEF Implementing Entity, and the Fund Manager, dated June 2014 (TF058282). 4. The second mid-term review (MTR) in 2016 found the Program had been very successful in Fiji, with all targets for the Program met or exceeded. The MTR found that PFIs had lent approximately USD 22 million to approximately 40,000 individuals and small businesses to support investments in renewable energy and energy efficiency of over USD 40 million. The low Non-Performing Loan (NPL) ratio (approximately 1%) means that almost all of the USD 5.2 million allocated to the Risk Sharing Fund (RSF) by the World Bank has been returned to the fund, demonstrating the capacity of the Program to generate significant ongoing climate benefits at low cost. 5. Based on the success of the Program in Fiji and dialogue with other Pacific Island States, the MTR recommended that the Program be reinstated on a regional basis, as per its original design, to support electrification in The World Bank Sustainable Energy Finance Project (P098423) countries like Vanuatu (access 30%), SI (access 20%) and PNG (access 12%) and others, building on the lessons learned and implementation framework applied in Fiji. The Government of Vanuatu has requested that the Program be extended to Vanuatu to support its rural electrification programs and to meet its Nationally Determined Contributions (NDCs) to reductions in greenhouse gas emissions. The Government of Fiji and the Fund Manager have also requested the extension and relaunch of the program and has indicated that it is willing to implement the program on a regional basis. 6. The Bank team considers the RSF to be an efficient and innovative mechanism to scale up access to electricity through renewable technologies, as a relatively small amount of grant financing can be used to catalyze significant investments in renewable technologies by the private sector (commercial banks and small to medium business enterprises). Through its concessional risk product (partial guarantees provided by the RSF) the Program provides access to financing for consumers currently not serviced readily by the commercial banks. 7. The Program design is consistent with the Bank’s Maximizing Finance for Development (MFD) approach. It will assist the Participating Pacific Island States to maximize their development resources by drawing on private financing and sustainable private sector solutions to provide value for money where possible, while meeting the highest environmental, social, and fiscal responsibility standards. This allows scarce public financing to be reserved for those areas where private sector engagement is not optimal or available. 8. Following an “in principle” approval by the Regional Vice President to extend the time line and reinstate the Program as a regional risk facility, a Level 2 restructuring was undertaken in September 2017 to extend the closing date of the current project from December 31, 2017 to June 30, 2018; a subsequent restructuring was undertaken to further extend the Closing Date to September 30, 2018. This was done to allow for preparation of this Level two restructuring and to provide sufficient time for the necessary approvals for reinstating the regional Program to be obtained. 9. The fiduciary and safeguards performance for the project are rated as satisfactory. The restructuring proposal is judged not to involve significant institutional or operational risks and hence, does not impact the project’s current overall rating of “Moderate.” II. DESCRIPTION OF PROPOSED CHANGES 10. This restructuring seeks the approval of the Regional Vice President to relaunch the program as a regional operation, for implementation in Fiji and Vanuatu. If the expansion of the program to Vanuatu is successful and there is further funding available, a separate project restructuring will be processed to allow other Pacific Island States to join the program over time. The proposed restructuring will involve the key changes to the program as set forth in this Section II. The World Bank Sustainable Energy Finance Project (P098423) 11. The extension of the program to Vanuatu will support two of the World Bank’s existing operations (i) Vanuatu Rural Electrification Project Stage I (VREP I - P150908) and Vanuatu Rural Electrification Project Stage II (VREP II - P160658). The relaunched risk facility will address a key issue identified during the mid-term review of VREP I, which is access to finance to the consumers (households and small businesses) for their cost contribution and to finance working capital for suppliers. The beneficiaries of the relaunched program will be the households and businesses who qualify to participate in VREP I and VREP II. The products that are eligible for loans will be those on the VREP-approved product catalog; the individual and business borrowers will be those that are approved for participation; and the products and participants will need to meet the safeguards requirements of VREP I and VREP II in order for them to be eligible to participate in the relaunched RSF in Vanuatu. The Implementation Agency for VREP I and VREP II is Vanuatu’s Department of Energy. The financing/grant agreements with Vanuatu for the VREP I and VREP II projects (TF018003, IDA Credit 6072-VU/Grant D1930-VU, TFA4979, TFA5406) will be amended to link the RSF to VREP I & II by including a provision in the VREP I and II agreements with the World Bank that the failure by Vanuatu to perform its obligations under the proposed Project agreement between Vanuatu and the World Bank for the SEFP RSF will be an additional event of suspension under the VREP I and II agreements. These amendments would constitute a Level 2 restructuring of VREP I and II. 12. Revisions to the PDO to reflect the implementation of program activities in Fiji and Vanuatu. The revised PDO is proposed to read as follows: “The objective of the Program is (i) to significantly increase the adoption and use of renewable energy technologies and the more efficient use of energy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in the Participating Pacific Island States; and (ii) to support knowledge sharing and capacity building on renewable energy and energy efficiency technologies in the Participating Pacific Island States.” 13. Key Changes to program activities. a. Expand Component 1(a) of the Program (the RSF) to cover Vanuatu; b. Amend Component 1 (b) of the Program (providing TA to Fiji for the institutional arrangements for the RSF) to expand the TA to Fiji to cover Vanuatu; c. Amend Component 2 of the Program (TA, Market Incentives and Communication) to expand the TA to Fiji to cover Vanuatu; and d. Revise Component 3 of the Program (Management, Monitoring and Evaluation) to state “Providing the services of a Regional Program Manager to Fiji for the Participating Pacific Island States, in order to promote regional coordination of Program activities.” 14. Extension of the Closing Date of the grants provided to Fiji and ANZ under the program by a total of 5 years from December 31, 2017 to December 31, 2022. The original Closing Date of the grants was December 31, 2017. This proposed extension is the third extension of the Closing Date. The previous two extensions were for The World Bank Sustainable Energy Finance Project (P098423) six months and three months, to September 30, 2018 to allow for the preparation and approval of this restructuring. 15. Changes to the implementation and legal arrangements under the program to implement the RSF in both Fiji and Vanuatu. Current program design Under the current SEFP program design, the technical implementation of the RSF is limited to Fiji. The program activities are carried out by the Department of Energy (DOE) under the Ministry of Transport and Infrastructure of Fiji. The existing arrangements under the program include the following: (1) Under the existing GEF Grant Agreement with Fiji, as amended and restated under the first restructuring on July 7, 2014, the financing to Fiji covers TA for : (i) the identification of Sustainable Energy technology investments through Approved Product Catalogs and Approved Business Plans; (ii) the identification of Participating Financial Institutions (PFIs) and the development of terms and conditions for Covered Loan pursuant to which such PFIs may lend to individuals and small enterprise Borrowers for such Sustainable Energy investments with partial risk coverage from the program’s RSF; (iii) the provision of technical support to users of such Sustainable Energy technology investments; (iv) timely monitoring and evaluation of participating Borrowers in both the use of Sustainable Energy technologies and Covered Loan repayment history; and (v) knowledge sharing and capacity building in Participating Pacific Island States. (2) Prior to authorizing a PFI for participation in the RSF, Fiji is required to enter into an agreement with such PFI for the approval, supervision and monitoring of the PFI’s participation in the RSF, in form and substance satisfactory to the World Bank. (3) Under the existing GEF Grant Agreement with the Fund Manager of the RSF, as amended and restated under the first restructuring on June 9, 2014, the financing to the Fund Manager comprises the establishment and maintenance of the RSF. The Fund Manager is required to enter into an agreement with each Approved PFI setting out the terms on which the Fund Manager will issue partial credit guarantees to the Approved PFI. The partial credit guarantees guarantee the repayment of an agreed percentage of each Covered Loan made by the Approved PFIs to a participating Borrower for an investment in a Sustainable Energy technology and/or technology-related business plan. In summary, Fiji’s key roles and responsibilities with respect to the RSF under the existing program design include, the following:  retain services of a Program Manager to assist with the program management;  select local financial institutions in Fiji to become an Approved PFI, on the basis of selection criteria agreed with the World Bank;  maintain an Approved Product Catalog in consultation with the Program Manager and acceptable to the World Bank; The World Bank Sustainable Energy Finance Project (P098423)  enter into an agreement with each Approved PFI on terms and conditions agreed with the World Bank, prior to authorizing such Approved PFI for participation in the RSF;  ensure that the program is managed in accordance with an operations manual acceptable to the World Bank, including the Environmental and Social Safeguards Documents (ESSD), and that each of its agreements with the Approved PFI and each agreement between the PFI and the Borrower for the Covered Loan requires the Borrower to comply with all the relevant environmental and social safeguards requirements of Fiji and the ESSD; and  submit periodic reports on the performance and status of the RSF to the World Bank. Pursuant to the existing GEF Grant Agreement with the Fund Manager, the Fund Manager has no responsibility with respect to the ESSD or otherwise under Section 2.03 of the Standard Conditions to ensure that land and rights to land are available for the program. The Fund Manager’s only responsibility in this regard is to perform the one- time verification of each RSF Coverage Application (desk review) that it contains the written confirmation from the PFI that the PFI complies with the ESSD and other conditions agreed between the World Bank and Fiji. The Fund Manager may only issue guarantee to PFIs that appear on the Approved PFI list agreed by Fiji and the World Bank. New SEFP program design Under the revised implementation arrangements, it is proposed that the SEFP be expanded into a regional program, for implementation in both Fiji and Vanuatu. The Fund Manager would thus provide Guarantees under the RSF to eligible PFIs in Fiji and to eligible PFIs in Vanuatu. It is also proposed that the management of RSF activities in Vanuatu be carried out by the Department of Energy in the Ministry of Climate Change and Natural Disasters of the Government of Vanuatu (GoV), while Fiji’s Department of Energy, in the Ministry of Infrastructure and Transport of the Government of Fiji (GoF) will continue with management of the RSF in Fiji. However, no GEF funds will be provided to the GoV for its management of the RSF activities in Vanuatu; instead, these activities will be supported by the Program Manager (Regional Program Manager) engaged by Fiji, whose terms of reference will be expanded to implement the RSF in Fiji and Vanuatu under the direction of each country’s Department of Energy. The responsibilities of the GoV will be captured through a new Project Agreement between Vanuatu and the World Bank, and the GoF’s responsibilities for implementation of the RSF in Fiji and its support to the GoV will be captured in a second amended and restated GEF Grant Agreement with Fiji. The GoF and the GoV will enter into an Implementation Agreement to coordinate the RSF implementation activities in Vanuatu. The extension of the Fund Manager’s responsibility to Vanuatu will be captured in a second amended and restated GEF Grant Agreement with the Fund Manager. The SEFP program will support the two existing World Bank Rural Electrification Projects (VREP) in Vanuatu. Only those participants in the VREP who meet the criteria for RSF support may access the RSF program in Vanuatu. This will be captured in the Operations Manual developed by Fiji for the existing project, to be updated for the The World Bank Sustainable Energy Finance Project (P098423) restructured project as a Regional Operations Manual acceptable to the World Bank. The existing agreements for VREP between Vanuatu and the World Bank will be amended to link Vanuatu’s obligations under RSF to the VREP, by specifying that a failure by Vanuatu to meet its obligations under RSF will be an additional condition of suspension under each of the VREP agreements. Specifically, the new arrangements under the expanded RSF program will include the following key elements: (1) The existing GEF Grant Agreement between the World Bank and Fiji will be further amended and restated to reflect the implementation of the RSF in both Fiji and Vanuatu. In addition to the responsibilities for carrying out the RSF activities in Fiji under the current program as described above, Fiji, through its Department of Energy, will:  update the services of Program Manager to include assistance with the RSF implementation in Vanuatu (Regional Program Manager);  update the Operations Manual (Regional Operational Manual) in a manner acceptable to the World Bank, to include (a) selection criteria for a local financial institution in Vanuatu to become an Approved PFI; and(b) an Approved Product Catalog for investments in Vanuatu; and  submit periodic Project Reports to the World Bank on RSF implementation in Fiji and Vanuatu. (2) As conditions for inclusion of Vanuatu in the SEFP:  Vanuatu will enter into a Project Agreement with the World Bank requiring Vanuatu: (i) to apply the Regional Operations Manual, including entering into an agreement with each Approved PFI in Vanuatu, on terms and conditions acceptable to the World Bank, prior to authorizing such Approved PFI for participation in the RSF; (ii) to ensure that (A) the RSF is implemented in Vanuatu in accordance with, among others, the ESSD, and (B) each agreement between the PFI and the Borrower for a Covered Loan requires the Borrower to comply with, among others, all the relevant environmental and social safeguards requirements of Vanuatu and of the ESSD; and (iii) to provide periodic progress reports to Fiji on the performance and status of the RSF in Vanuatu so that Fiji can include this information in its Project Reports to the World Bank.  Vanuatu and Fiji will be required to enter into an Implementation Agreement on terms and conditions satisfactory to the World Bank, setting forth their respective roles and responsibilities for the implementation of the RSF in Vanuatu, including arrangements for sharing the services of the Regional Program Manager.  The VREP agreements with the World Bank will be amended as described above. The World Bank Sustainable Energy Finance Project (P098423) (3) The existing GEF Grant Agreement with the Fund Manager will be further amended and restated to reflect the extension of the RSF, by providing for issuance of partial credit guarantees to Approved PFIs in Vanuatu as well as in Fiji. This will include requiring the Fund Manager: (a) to update the Fund Manager Operations Manual to reflect this extension; and (b) to conclude an agreement with each Approved PFI in Vanuatu, setting out the terms and conditions of: (i) the PFI’s participation in the RSF; and (ii) the issuance by the Fund Manager of Guarantees to the PFI. The roles and responsibilities of the Fund Manager of performing the one-time verification of each RSF Coverage Application (desk review) and the issuance of the Guarantees only to PFIs that are on the Approved PFI list agreed by Fiji/Vanuatu and the World Bank will not change. The current Fund Manager Fee of USD 5,000 monthly payable under the GEF Grant, would also not change. 16. Changes to the results framework for the program. The key performance indicators for the program will remain the same, except that the indicators on regional capacity building will be deleted. The results under each of the key performance indicators has been revised to reflect an extended program to include Vanuatu beneficiaries. 17. The exit strategy for the Program for this restructuring comprises the following. The World Bank and the International Finance Corporation are working on risk facilities to support renewable energy financing in the Pacific through the private sector consistent with the objectives of this Program. The Program has served as “proof of concept” for catalyzing lending for renewable energy and energy efficiency products by commercial banks. Some of the early borrowers of the Program have now graduated to borrowers without the need for concessionality available under this Program. The IFC has taken an equity stake in one of the early borrowers of the Program. The IFC is also in the process of launching an IDA-PSW Pacific Risk Facility to support “commercial grade” borrowers. However, there remains a gap in supporting access to finance for individuals and small businesses who do not have a credit history, are perceived as higher risk and or are businesses who support these group of borrowers. The relaunch of this Program will address this gap and contribute to further increasing the confidence of the lenders with the expectation that after the extended period this Program could transition into the IFC IDA-PSW type facility or into a new risk sharing facility for borrowers that require ongoing support. Fiji will engage specialists by September 30, 2020 to conduct a mid term review, including recommendations to be made to the World Bank by December 31, 2020, on an appropriate exit strategy. Funds available under this Program could be applied to such new programs once they become effective, especially to cover first loss. In the event that the RSF were to terminate earlier than the closing date, any outstanding loans covered by guarantees issued under the RSF would be transferred to the alternative risk sharing facility. If there are no alternative programs established prior to the closing date of this Program then any remaining funds would be returned to the Global Environment Facility. 18. A number of consequential changes to various documents, such as the Regional Executive Agency (i.e., Fiji) Operations Manual and Fund Manager Operations Manual will be made to reflect the reinstatement of the Program as a regional operation, by extending it to Vanuatu. These include updates to the covered loan criteria The World Bank Sustainable Energy Finance Project (P098423) (Attachment III – Schedule 2) of the Grant Agreement and amendments to the Regional Executive Agency Operations Manual and the Fund Manager Operations Manual to link the operation in Vanuatu to VREP. 19. Environmental and Social Safeguards arrangements The original Environmental and Social Safeguards Framework developed for implementation of the Program in Fiji will continue to apply in Fiji. The extension of the Program to Vanuatu will support VREP (i.e., Vanuatu Rural Electrification Project Stage 1 (P150908) and Vanuatu Rural Electrification Project Stage II (P160658)). Safeguards arrangements for the implementation of these projects are in place (Environmental Code of Practice for Disposal of Batteries, Environmental and Social Management Framework and the Resettlement Policy Framework) and will also apply for the implementation of the project in Vanuatu. The legal agreements will be revised to define the ESSD as follows: “Environmental and Social Safeguards Documents” or “ESSD” means: (a), in respect of Program activities implemented in Fiji’s territory, the Environmental and Social Safeguards Framework dated October 2013 and adopted by Fiji for the Project; and (b) in respect of Program activities implemented in Vanuatu’s territory, the Environmental Code of Practice, dated August 2017 and the Environmental and Social Management Framework, dated December 2017, both adopted by Vanuatu for the Vanuatu Rural Electrification Projects. III. SUMMARY OF CHANGES Changed Not Changed Implementing Agency ✔ Project's Development Objectives ✔ Results Framework ✔ Loan Closing Date(s) ✔ Disbursement Estimates ✔ Legal Covenants ✔ Institutional Arrangements ✔ Implementation Schedule ✔ DDO Status ✔ Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ The World Bank Sustainable Energy Finance Project (P098423) Disbursements Arrangements ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_IA_TABLE IMPLEMENTING AGENCY Implementing Agency Name Type Action Department of Energy Implementing No Change Agency Department of Energy Implementing New Agency OPS_DETAILEDCHANGES_PDO_TABLE PROJECT DEVELOPMENT OBJECTIVE Current PDO The project aims to (i) significantly increase the adoption and use of renewable energy technologies and the more efficient use ofenergy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in the Recipient's Territory (Fiji) and (ii) support knowledge sharing and capacity building on renewable energy and energy efficiencytechnologies in the Participating Island States. Proposed New PDO The objective of the Program is (i) to significantly increase the adoption and use of renewable energy technologies and the more efficient use of energy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in the Participating Pacific Island States; and (ii) to support knowledge sharing and capacity building on renewable energy and energy efficiency technologies in the Participating Pacific Island States. OPS_DETAILEDCHANGES_LOANCLOSING_TABLE The World Bank Sustainable Energy Finance Project (P098423) LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 30-Jun-2018, 30- TF-58282 Effective 31-Dec-2017 31-Dec-2022 30-Apr-2023 Sep-2018 30-Jun-2018, 30- TF-58284 Effective 31-Dec-2017 31-Dec-2022 30-Apr-2023 Sep-2018 30-Jun-2018, 30- TF-90429 Effective 31-Dec-2017 31-Dec-2022 30-Apr-2023 Sep-2018 28-Aug-2014, 23-Jul- TF-90430 Closed 31-Dec-2017 2014 02-Feb-2015, 07-Jul- TF-90431 Closed 31-Dec-2017 2014 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2007 0.00 0.00 2008 200,000.00 0.00 2009 5,405,031.50 0.00 2010 494,677.47 0.00 2011 51,919.38 0.00 2012 233,400.60 0.00 2013 46,186.40 0.00 2014 35,266.64 0.00 2015 66,657.04 0.00 2016 419,848.12 0.00 2017 813,012.85 0.00 2018 1,000,000.00 0.00 2019 0.00 1,700,000.00 OPS_DETAILEDCHANGES_LEGCOV_TABLE The World Bank Sustainable Energy Finance Project (P098423) LEGAL COVENANTS Loan/Credit/TF Description Status Action Finance Agreement: Fiji GEF Grant Agreement | After delay complied TF-58284 Description: EA will procure the services of a Revised with management contractor | Due Date: 10-Sep-2007 By 1 month after Amendment Effectiveness: retain regional Program manager to assist Fiji and Vanuatu manage their Program activities; update operations manual extending Program to Vanuatu. Conclude Proposed Not yet due acceptable agreement with each Approved PFI in Fiji prior to PFI’s RSF participation, including PFI/Covered Loan borrower obligations; develop RSF exit strategy by 12/30/20. Ensure ESSD compliance Finance Agreement: Fiji GEF Grant Agreements | After delay complied TF-90429 Description: EA will procure the services of a Revised with management contractor | Due Date: 10-Sep-2007 By 1 month after Amendment Effectiveness: retain regional Program manager to assist Fiji and Vanuatu manage their Program activities; update operations manual extending Program to Vanuatu. Conclude Proposed Not yet due acceptable agreement with each Approved PFI in Fiji prior to PFI’s RSF participation, including PFI/Covered Loan borrower obligations; develop RSF exit strategy by 12/30/20. Ensure ESSD compliance Fund Manager GA: By 1 month after Amendment Effectiveness, update its operations manual extending RSF to Vanuatu PFIs. Conclude acceptable agreement TF-58282 Not yet due New with each Approved PFI prior to issuing RSF Guarantees to the PFI, specifying terms and conditions of RSF Guarantees. Fiji GEF GA: Vanuatu’s inclusion in SEFP conditional on: (i) execution of Vanuatu’s PA and receipt of legal opinion; (ii) amendments to VREP agreements as per TF-58284 Not yet due New below; and (iii) execution of an implementation agreement (IA) between Fiji and Vanuatu and receipt of legal opinions. The World Bank Sustainable Energy Finance Project (P098423) VREP IDA Financing Agreement, PRIP Grant Agreements, SREP Grant Agreement: Failure by Vanuatu TF-90429 to perform any of its obligations under the SEFP Not yet due New Vanuatu PA to constitute an additional event of suspension of VREP agreements. Fiji GEF GA: Vanuatu’s inclusion in SEFP conditional on: (i) execution of Vanuatu’s PA and receipt of legal opinion; (ii) amendments to VREP agreements as per TF-90429 Not yet due New below; and (iii) execution of an implementation agreement (IA) between Fiji and Vanuatu and receipt of legal opinions. Vanuatu GEF Project Agreement (PA): Cooperate with Fiji and Fund Manager for Program purposes. Conclude acceptable agreement with each Approved PFI in TF-90429 Not yet due New Vanuatu prior to PFI’s RSF participation, specifying PFI’s/Covered Loan borrower’s obligations. Ensure compliance w/ESSDs. The World Bank Sustainable Energy Finance Project (P098423) . Results framework COUNTRY: Pacific Islands Sustainable Energy Financing Program Project Development Objectives(s) The project aims to (i) significantly increase the adoption and use of renewable energy technologies and the more efficient use ofenergy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in the Recipient's Territory (Fiji) and (ii) support knowledge sharing and capacity building on renewable energy and energy efficiencytechnologies in the Participating Island States. Project Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target 2007 2019 Increased renewable energy technologies and energy efficiency (Action: This Objective is New) Increased lending from local financial institutions for RE and EE 0.00 41.00 equipment in the Recipient’s territory (Amount(USD)) Additional number of kW of RE and EE technology financed 0.00 8.80 through approved participating financing institutions (Megawatt) Carbon Dioxide emissions avoided due to financing through 0.00 13.00 project (Metric ton) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 2007 1 2 3 4 5 2019 Risk-Sharing Fund (Action: This Component is New) The World Bank Sustainable Energy Finance Project (P098423) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 2007 1 2 3 4 5 2019 RSF guarantees called (Component 1) 0.00 2.00 (Amount(USD)) Number of loans approved for (i) MSEs, (ii) community organizations and (iii) 0.00 135.00 individuals (Component 1) (Number) Technical Assistance, Market Incentives and Communications (Action: This Component is New) MSEs and Community organizations participating 0.00 12.00 in TA or training activities (Component 2) (Number) Number of articles and broadcasts organized by the Recipient on the benefits of 0.00 51.00 renewable energy and energy efficiency (Component 2) (Number) Number of showcases and community presentations organized by the Recipient on the benefits of 0.00 130.00 renewable energy and energy efficiency (Component 2) (Number) Management, Monitoring and Evaluation (Action: This Component is New) The World Bank Sustainable Energy Finance Project (P098423) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline Intermediate Targets End Target 2007 1 2 3 4 5 2019 Grievances registered related to delivery of 0.00 75.00 75.00 75.00 75.00 75.00 75.00 project benefits that are addressed (Percentage) IO Table SPACE . The World Bank Sustainable Energy Finance Project (P098423)