The World Bank Report No: ISR6851 Implementation Status & Results South Africa Eskom Investment Support Project (P116410) Public Disclosure Copy Operation Name: Eskom Investment Support Project (P116410) Project Stage: Implementation Seq.No: 4 Status: ARCHIVED Archive Date: 11-Jul-2012 Country: South Africa Approval FY: 2010 Product Line: IBRD/IDA Region: AFRICA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Eskom Holdings Ltd. Key Dates Board Approval Date 08-Apr-2010 Original Closing Date 31-Oct-2015 Planned Mid Term Review Date 04-Nov-2013 Last Archived ISR Date 01-Dec-2011 Effectiveness Date 31-May-2010 Revised Closing Date 31-Oct-2015 Actual Mid Term Review Date Project Development Objectives Eskom Investment Support Project (P116410) Project Development Objective (from Project Appraisal Document) The project development objective (PDO) of the Eskom Investment Support Project for South Africa is to enhance its power supply and energy security in an efficient and sustainable manner so as to support both economic growth objectives and South Africa's long term carbon mitigation strategy. Has the Project Development Objective been changed since Board Approval of the Program? Yes No Component(s) Component Name Component Cost IBRD support for Medupi Power Plant 3039.86 Support for financing investments in renewable energy (Wind and Concentrating Solar Power Plants). 260.00 Support for other low carbon egy effic. comps., comprising the Majuba Rail Proj. (railway for coal 440.76 transportation) & TA prog. for i mp Public Disclosure Copy Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating High High Implementation Status Overview Eskom continues to achieve gains in demand-side management. This is a major contribution to avoiding load shedding, with the current tight supply/demand balance. The delay in commissioning the first unit of the Medupi power plan is estimated at 18 months. Earlier problems with labor disputes and delays by the boiler contractor have been resolved and the current challenge concerns providing access to other contractors to the boiler area. The boiler for the first unit underwent pressure testing on June 8, 2012, and first coal was Page 1 of 5 The World Bank Report No: ISR6851 delivered on June 15, 2012. The report of an external audit conducted in November 2011, by an independent consultant shows an overall environmental compliance score of 98.49 out of a possible 100. Some residents around the project area consider that illegal sand mining is taking place in the Mokolo River and that the mining, whether legal or illegal, has disrupted water supply from boreholes and degraded water quality downstream. Representatives of the Department of Environmental Affairs has taken the lead in establishing an intergovernmental task team comprised of the Department of Water Affairs, Department of Agriculture, Limpopo Department of Economic Development, Environment and Tourism Public Disclosure Copy and the Department of Mineral Resources in addition to itself, to investigate the concern. Phase 1 of the Mokolo Crocodile Water Augmentation Scheme is underway and the government is considering financing Phase 2 under the Strategic Infrastructure Priorities program. All bids for wind turbine generators were declared non-responsive and the package has been rebid. Owner's Engineer for the CSP was contracted and upfront work for the component is underway. Procurement for the main (civil works) package for Majuba Rail is complete and work is expected to commence before the onset of the rainy season. Disbursement have reached US$978 million (26 percent of the loan). Locations Country First Administrative Division Location Planned Actual South Africa Not Entered Volksrust South Africa Not Entered Upington South Africa Not Entered Tutuka South Africa Not Entered Majuba South Africa Not Entered Kendal South Africa Not Entered Hendrina Power Station South Africa Not Entered Ermelo South Africa Not Entered Ellisras South Africa Not Entered Koekenaap Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Public Disclosure Copy Increased reliable power generation Percentage Value 110.60 114.90 125.00 Date 31-Mar-2009 31-Mar-2011 31-Oct-2015 Comments Baseline corrected to ensure Increase due to consistency with reporting commissioning of additional format plant Increased renewable energy supply Gigawatt-hour Value 11.00 11.00 520.00 (GWh) Date 31-Mar-2009 31-Mar-2011 31-Oct-2015 Comments 11.00 Page 2 of 5 The World Bank Report No: ISR6851 Reduction in carbon intensity Text Value 0.968 0.950 Date 31-Mar-2009 31-Mar-2011 31-Oct-2015 Comments The slight increase is due to Public Disclosure Copy the tight margin between supply and demand, requiring increased utilization of existing plant. The planned supply-side efficiency improvements and commissioning of the two supercritical plant will have a significant impact in reducing this ratio. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Capacity of conventional generation Megawatt Value 40000.00 0.00 44800.00 Date 31-Mar-2009 31-Mar-2011 31-Dec-2015 Comments Capacity of renewable generation Megawatt Value 0.00 0.00 200.00 Date 31-Mar-2009 01-Sep-2011 31-Oct-2015 Comments Direct Greenhouse Gases avoided Text Value 0 0.618 MT, $97 Date 31-Mar-2009 01-Sep-2011 31-Oct-2015 Comments Majuba coal transportation cost Text Value 93 20 Date 31-Mar-2009 01-Sep-2011 31-Oct-2015 Comments Reduction in carbon emissions from coal Metric ton Value 0.00 0.00 40000.00 Public Disclosure Copy transportation Date 31-Mar-2009 01-Sep-2011 31-Oct-2015 Comments Guidance for power plant efficiency Text Value No designs available Specifications and bid improvements documents for the first three power stations completed Date 31-Mar-2009 01-Sep-2011 31-Oct-2015 Comments Data on Financial Performance (as of 27-Jun-2012) Page 3 of 5 The World Bank Report No: ISR6851 Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P116410 IBRD-78620 Effective 08-Apr-2010 16-Apr-2010 31-May-2010 31-Oct-2015 31-Oct-2015 Public Disclosure Copy P122329 TF-10690 Not Effective 27-Oct-2011 14-Nov-2011 31-Dec-2016 31-Dec-2016 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P116410 IBRD-78620 Effective USD 3,750.00 3,750.00 0.00 977.98 2,772.02 26.00 P122329 TF-10690 Not Effective USD 250.00 250.00 0.00 0.00 250.00 0.00 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation Eskom is taking necessary action to contain delays in commissioning of the first unit. The Department of Water Affairs has taken the lead to investigate the continuing sand mining concern by some residents of Lephalale. Except for the need to re-bid the wind turbine generator package of Sere wind, the rest of the project is progressing satisfactorily. Restructuring History There has been no restructuring to date. Page 4 of 5 The World Bank Report No: ISR6851 Related Projects P122329-South Africa - Eskom Renewables Support Project Public Disclosure Copy Public Disclosure Copy Page 5 of 5