Document of The World Bank FOR OFFICIAL USE ONLY Report No: 61067-TZ PROJECT PAPER ON A PROPOSED ADDITIONAL CREDIT IN THE AMOUNT OF SDR 17.2 MILLION (US$27.88 MILLION EQUIVALENT) TO THE UNITED REPUBLIC OF TANZANIA FOR AN ENERGY DEVELOPMENT AND ACCESS EXPANSION PROJECT May 9, 2011 Energy Group Sustainable Development Department Country Department AFCE1 Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
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Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No: 61067-TZ
PROJECT PAPER
ON A
PROPOSED ADDITIONAL CREDIT
IN THE AMOUNT OF SDR 17.2 MILLION
(US$27.88 MILLION EQUIVALENT)
TO THE
UNITED REPUBLIC OF TANZANIA
FOR AN
ENERGY DEVELOPMENT AND ACCESS EXPANSION PROJECT
May 9, 2011
Energy Group
Sustainable Development Department
Country Department AFCE1
Africa Region
This document has a restricted distribution and may be used by recipients only in the
performance of their official duties. Its contents may not otherwise be disclosed without World
Bank authorization.
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ii
CURRENCY EQUIVALENTS
(Exchange Rate Effective April 30, 2011)
Currency Unit = Tanzanian Shillings
TSh 1,508.50 = US$ 1
US$ 1.6209 = SDR 1
FISCAL YEAR
July 1
January 1
–
–
June 30 (Government of Tanzania)
December 31 (TANESCO)
ABBREVIATIONS AND ACRONYMS
AF
AF 2010
AfDB
AMR
CAS
CMU
CQS
DA
DSM
EDCF
EIB
EIRR
EMP
ENPV
ESMF
EWURA
FIRR
FM
FY
GEF
GOT
HPP
HV
IBRD
ICB
IDA
IFC
IFR
IP
ISR
JICA
kV
kWh
LKEMP
Additional Financing
Additional Financing as approved in April 2010 for the TEDAP
African Development Bank
Adaptive Multi-Rate
Country Assistance Strategy
Country Management Unit
Selection Based on Consultants‟ Qualifications
Designated Account
Demand Side Management
Economic Development Cooperation Fund
European Investment Bank
Economic Internal Rate of Return
Environmental Management Plan
Economic Net Present Value
Environmental and Social Management Framework
Energy & Water Utilities Regulatory Authority of Tanzania
Financial Internal Rate or Return
Financial Management
Fiscal Year
Global Environment Facility
Government of Tanzania
Hydropower Plant Project
High Voltage
International Bank for Reconstruction and Development
International Competitive Bidding
International Development Association
International Finance Corporation
Interim Financial Report
Implementation Progress
Implementation Status and Results Report
Japan International Cooperation Agency
Kilovolt
Kilowatt hour
Low Kihansi Environmental Management Project
iii
LKHP
MCC
MEM
MKUKUTA
MOF
MTR
MW
NCB
OPRC
PDO
PIU
PoA
QCBS
RPF
SSS
TANESCO
TEDAP
REA
RMU
SDR
SHS
TANROADS
TF
WBG
Low Kihansi Hydropower Plant
Millenium Challenge Corporation
Ministry of Energy and Minerals
Mpango wa Kukuza Uchumi na Kupunguza Umaskini Tanzania
Ministry of Finance
Mid Term Review of December 2010
Megawatt
National Competitive Bidding
Operational Procurement Review Committee
Project Development Objective
Project Implementation Unit
Program of Activities
Quality- and Cost-Based Selection
Resettlement Policy Framework
Sole Source Selection
Tanzania Electric Supply Company Limited
Tanzania Energy Development and Access Expansion Project
Rural Energy Agency
Ring Main Unit
Special Drawing Right
Solar Home Systems
Tanzania National Roads Agency
Trust Fund
World Bank Group
Vice President: Obiageli Katryn Ezekwesili
Country Director: John Murray McIntire
Sector Manager: S. Vijay Iyer
Task Team Leader: Robert Schlotterer
iv
TANZANIA
ADDITIONAL FINANCING - ENERGY DEVELOPMENT AND ACCESS EXPANSION
PROJECT
CONTENTS
ADDITIONAL FINANCING Data SheeT .........................................................................................v
I. Introduction .................................................................................................................................1
II. Background and Rationale for Additional Financing in the amount of $27.88 million .........2
A. Background ............................................................................................................................2
B. Status of Ongoing Project .......................................................................................................3
C. Rationale for Additional Financing .........................................................................................6
D. Alternatives Considered ..........................................................................................................9
III. Proposed Changes ................................................................................................................. 10
A. Key Indicators and Results Framework ................................................................................. 10
B. Financing ............................................................................................................................. 10
C. Implementation Arrangements .............................................................................................. 12
D. Condition of Effectiveness and Legal Covenants ................................................................... 12
E. Readiness of Activities for Additional Financing ................................................................... 13
F. Risks .................................................................................................................................... 13
IV. Appraisal Summary .............................................................................................................. 13
A. Economic and Financial........................................................................................................ 13
B. Procurement ......................................................................................................................... 15
C. Financial Management.......................................................................................................... 16
D. Environmental and Social ..................................................................................................... 16
Annex 1: Revised Results Framework and Monitoring .................................................................. 19
50. The implementation arrangements for Component A will not change; however, the
implementation and procurement capacity of TANESCO´s TEDAP team has been strengthened
(see risk section below). In addition a revised implementation schedule focusing on
TANESCO‟s activities implemented under Component A has been received by the Bank and
was reviewed by the Task Team. The review showed an acceptable updated timeline and
confirms that all outstanding activities can be completed before the current Project closing date ,
subject to approval of this Additional Financing and provision of GOT/TANESCO counterpart
funds. Financial management and disbursement arrangements will remain unchanged for this
IDA Credit.
51. With regard to the proposed new capacity building measure on TANESCO‟s environmental
management capacity, TANESCO will contract this capacity building measure in form of a
consultancy with the University of Dar es Salaam in accordance with the current implementation
and procurement arrangements, which remain unchanged. The attached Procurement Plan has
been updated accordingly with a proposed Consultancy under Sub-component C.1, labeled
Consulting Service on Mainstreaming Implementation of the KST Reintroduction Management
Plan.
D. Condition of Effectiveness and Legal Covenants
52. Conditions of effectiveness will consist of (i) the submission of a copy of the duly executed
Subsidiary Agreement between TANESCO and the MOF related to this Additional Financing
Credit; and (ii) Submission of an updated Operational Manual for the TANESCO TEDAP team‟s
operation. New Legal covenants will include withdrawal restrictions under the new credit for (i)
payments to the proposed three activities, now funded through GOT counterpart funds; and ii)
any withdrawals under the new credit after July 1, 2013, if the proposed GOT counterpart funds
have not been established fully by then.
13
E. Readiness of Activities for Additional Financing
53. Contracts for procurement of transmission equipment have been procured and awarded under
the Project and are already under implementation. Procurement for distribution equipment are at
the bid evaluation phase, which is when the higher than originally expected cost bids have been
observed thereby prompting the need for this Additional Financing. As a result, it can be
anticipated that the procurement will be completed and awards made in the next few months
following AF approval. Consequently the activities supported by this Additional Financing are
ready for implementation. The additional capacity-building measure under Sub-Component C.1,
is also ready for implementation. In addition TANESCO and the Task Team have started to
discuss the outline of the new Operational Manual and it is expected that this Manual will be
completed by early June 2011 so that effectiveness can be achieved shortly after approval of this
AF.
F. Risks
54. Key Project risks and mitigating measures for this Additional Financing are presented in the
ORAF (See Annex 2). Overall risk for Additional Financing is rated MI (medium driven by
impact). At an earlier stage of this project, weak implementation capacity at TANESCO and
weak procurement capacity had hindered timely implementation of the Project. Implementation
and procurement capacity have improved since TANESCO took concerted measures starting in
2009 and continuing throughout 2010 in order to enhance the performance of the procurement
functions. These mitigation measures involved a reorganization of the procurement department
and introduction of service level agreements between the procurement department and
operational departments. TANESCO also hired an international Procurement advisor (financed
under this Project) who is supporting the strengthening of procurement operations.
55. In addition, to continue this progress, TANESCO and the World Bank have recently agreed
on an Action Plan that will continue to strengthen the implementation and procurement capacity
of the PIU. The Action Plan has been outlined under Section II above and most of the actions
have been taken by appraisal.
IV.Appraisal Summary
A. Economic and Financial
56. For both the Economic and Financial Appraisal, the assumptions used for the original
assessment were reviewed and updated where necessary. The project benefits are based on
reductions in unserved energy, reductions in technical network losses and reductions in non -
technical network losses. For each investment program, whilst costs have increased, it is
expected that reductions in technical network losses, non-technical losses and unserved energy
will be the same as were planned at the time of the original appraisal. A conservative approach
was originally taken on the size of these expected reductions for each package of investment and
this conservative approach is now maintained.
57. For the Economic Appraisal, the value of reducing unserved energy is derived from the cost
of avoided self-generation of industrial and commercial customers as well as cost of avoided
self-generation of domestic customers. Work carried out by consultants DECON for TANESCO
14
found these values to be USc 50/kWh and USc 40/kWh respectively. These figures and the rest
of the key assumptions used in the original appraisal are judged to still be appropriate and valid.
58. Even with the increased costs, the recalculated overall EIRR of investment projects is
expected to be clearly positive at about 17.4% with an Economic Net Present Value (ENPV) of
US$43.0 million (see Table 6 below). This reflects the high value to society of making the
system more reliable and efficient. For the connection of new urban customers, as previously,
the Economic Internal Rate of Return (EIRR) is expected to be even higher than indicated in the
table, due to high current alternative energy costs, high consumer willingness to pay (by both
households and businesses) in urban areas, and the potentially lower than assumed connection
costs.
Table 6: Summary of revised Economic Analysis for Ongrid Components
Component Economic internal
rate of return (%)
Economic NPV
@ 10%
(US$ million)
Reinforcement of distribution and
transmission networks in Dar es Salaam
11.1 3.7
Reinforcement of distribution networks in
Arusha
19.8 10.1
Reinforcement of distribution networks in
Kilimanjaro
35.4 16.5
Connection of 25,000 new customers 38.4 12.7
Replacement of 60,000 credit meters 10.0 3.7
Total for Ongrid Investments 17.4 43.0
59. Table 7 below presents the Financial Internal Rate of Return (FIRR) and financial net present
value for different components. The increased costs lead to an overall project FIRR that is now
very slightly below the 10% threshold. Reinforcement work at Arusha and Kilimanjaro remains
strongly above the threshold minimum rate and so the overall relatively low financial return is
driven by financial returns in Dar es Salaam. The considerable increase in cost of works for
reinforcement of distribution and transmission networks in Dar es Salaam (almost doubling from
c.US$ 30.3m to c.US$ 58.6m) has made this activity net negative financially. The sub-
component that will finance the connection of 25,000 new customers also shows a low rate of
financial return and a negative NPV. For both these instances, customers are almost exclusively
from Tariff Group D1: Domestic low Usage Tariff. It is often the case that utility activities in
low tariff customer areas are cross- subsidized by customers paying higher tariffs in other supply
areas. This is expected to be the case here. We have verified that the financial „loss‟ on these
activities is small relative to the overall activity and period over which the benefits will be
derived. It is also worth remembering that each of these activities has strongly positive
economic returns. For instance, the component that will finance the connection of 25,000 new
customers has an economic rate of return of 38.4% (as shown in Table 6 above).
15
Table 7: Financial Assessment of Project Investments4
Component Financial internal
rate of return (%)
Financial NPV
@ 10%
(US$ million)
Reinforcement of distribution and
transmission networks in Dar es Salaam
6.7 -10.6
Reinforcement of distribution networks in
Arusha
13.0 3.0
Reinforcement of distribution networks in
Kilimanjaro
20.0 5.8
Connection of 25,000 new customers 2.3 -3.3
Replacement of 60,000 credit meters 5.3 -1.3
Total for Ongrid Investments 8.8 -6.3
60. Overall, it is noted that two out of the three reinforcement clusters (Arusha and Kilimanjaro)
are expected to earn a sufficient return with an FIRR above the minimum hurdle of 10%. The
overall Financial NPV is negative though remains moderate compared to the investments
proposed of now over US$100 million for Component A.
B. Procurement
61. The Procurement of activities not started as of January 1, 2011 are or will be carried out in
accordance with the World Bank‟s "Guidelines: Procurement of Goods, Works and Non
Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers"
dated January 2011; and "Guidelines: Selection and Employment of Consultants under IBRD
Loans and IDA Credits & Grants by World Bank Borrowers" dated January 2011; Guidelines on
Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA
Credits and Grants, dated October 15, 2006 and revised in January 2011; and the provisions
stipulated in the Legal Agreement. For each contract to be financed by the Credit, the different
procurement methods or consultant selection methods, the need for pre-qualification, estimated
costs, prior review requirements and time frame, are agreed between the Borrower and the Bank
in the Procurement Plan (Annex 4). The overall risk assessment for the procurement risk of this
Project is currently rated MI (Medium driven by Impact - further details in Annex 2).
62. The Project‟s current Procurement Plan has been updated to take into account the methods
and thresholds applicable as well as the revised estimated costs and the one new activity to be
included under sub-component C.1. The Procurement Plan will continue to be updated at least
annually, or as required, to reflect the actual project implementation needs and improvement s in
institutional capacity. Additional Financing procurement will maintain existing arrangements for
TANESCO. Since this Additional Financing only relates to Credit 4370-TA, the other project
related Procurement Plan for the GEF Trust Fund is not included. The updated Procurement
Plan is attached in Annex 4 and also shows the three procurements that were formerly being
procured under the IDA credit and are now proposed to be funded by GOT/TANESCO
counterpart funds.
4 Tariff for 2011 is taken from EWURA Electricity (TANESCO) Tariff Adjustment Order, 2010. No. 010 -019.
16
C. Financial Management
63. As part of the preparation for this Additional Financing, a financial management assessment
was carried out in accordance with the Financial Management Practices Manual issued by the
Financial Management Sector Board in March 2010. The objective of the assessment is to
ensure that the implementing agency of this Additional financing, TANESCO, has adequate
financial management arrangements to ensure that (a) TEDAP AF funds will be used for the
purposes intended in an efficient and economic way; (b) TEDAP financial reports w ill continue
to be prepared in an accurate, reliable and timely manner; and (c) external audit reports will be
prepared in line with international accepted audit standards and issued on time. The Financial
Management Team‟s work included a visit to both MEM and TANESCO. The conclusion of the
assessment is that project‟s financial management arrangement satisfies the Bank‟s minimum
requirement under OP/BP 10.02 and the existing system is adequate to provide, with reasonable
assurance, accurate and timely information on the status of the project as required by the IDA.
Based on the findings of this review, the overall FM risk rating remains moderate5 and ISR FM
rating remains satisfactory.
64. As per the current and recently amended Financing Agreements of the original Project credit
4370-TA, the proceeds of the grant will finance 100% of eligible expenditures exclusive of taxes.
Under the Subsidiary Agreement, to be concluded between MOF and TANESCO, the MOF will
pass on the Additional Financing funds allocated to Categories (1) and (2) on a grant basis as for
the original credit 4370-TA.
65. Disbursements will continue to be made on the basis of quarterly unaudited Interim Financial
Reports (IFRs) whereby the Designated Account (DA) ceiling will be equivalent to a forecast for
two quarters as provided in the quarterly IFR. The existing DA under Component A of the
Original Financing will be used for Component A of the Additional Financing. However, a new
DA will be opened for the proceeds of Part B (as defined in the Legal Agreements for this
Additional Financing). Part B, as defined in the Legal Agreements for this AF corresponds to the
activities of the original Project‟s Component C.1. Additional instructions are provided in the
World Bank Disbursement Guidelines for Projects, dated May 1 2006 and the Disbursement
Letter.
D. Environmental and Social
66. Overall Safeguards Compliance is currently rated Satisfactory. The Additional Financing
does not alter the safeguards policies triggered or the arrangements for safeguards compliance.
Current Safeguards related Operational Policies (OPs) are mainly triggered for Project
Component‟s A and B.
67. Safeguards Policies triggered: Component A, which will be supported by this Additional
Financing triggers OP/BP 4.01, OP/BP 4.04, OP/BP 4.11 and OP/BP 4.12. Component B, which
is not subject of this Additional Financing, triggers the same OPs and in addition triggers OP/BP
5 This “moderate” risk rating is the FM team‟s own assessment, which is different from the ORAF risk categories.
The Task Team overall rates this rating with an MI (Medium driven by Impact (MI) corresponds to a risk that would
have high impact if it took place but a low likelihood of it occurring) in the context of the ORAF with regard to
Implementing agency risk.
17
4.37 (Safety of Dams) and OP/BP 7.50 (International Waterways). Those additional two policies
had been triggered at the original approval of the Project. Further details on the status of this
Component‟s safeguards and those policies are given further below in paragraphs 70 and 71.
68. The full suite of safeguards documents produced and publicly disclosed for the project to
date are:
Environmental Impact Assessment (“EIA” for Component A);
Environmental Audits of 18 Substations (“EA” for Component A);
Resettlement Policy Framework (“RPF A” for Component A - Rehabilitation works in
Dar es Salaam);
Two Resettlement Action Plans (“RAP” for Component A – one for Rehabilitation works
in Arusha and Kilimanjaro and one for Rehabilitation works in Dar es Salaam);
Environmental and Social Management Framework (“ESMF” for Component B);
Resettlement Policy Framework (“RPF B” for Component B);
Riparian Notification (“RN” for Component B).
69. Implementation of Safeguards under Component A. Environmental management has
proceeded satisfactorily to date, with the latest development being approval by the owner‟s
engineer of the transmission line and substation contractor‟s Environmental Management Plan
(EMP) that had been submitted in draft at the time of the MTR. The MTR also confirmed that
the recommendations of the substation environmental audits TANESCO carried out during
project preparation have been included in the design for the one substation in the audited group
that is being addressed in the project. As mentioned above, an EIA was prepared and disclosed
in 2005 prior to appraisal of the original project in 2007. The EIA includes a general EMP.
Based on this general EMP, each contractor procured under the Project‟s Component A is
obligated to submit a detailed EMP for the particular segments he is working on. Since to date
only one contractor has been contracted under Component A for rehabilitation works, currently
only one EMP has been finalized and since the contractor only recently started mobilization, the
EMP was submitted accordingly. It is expected that additional EMPs will be prepared once
distribution rehabilitation works, currently under procurement, have been contracted.
Management of physical cultural property under this Component A is addressed in the EIA and
to date no physical cultural property issues have been identified.
70. The Social Safeguards under Component A are based on two Resettlement Action Plans
(RAP) and one preceding Resettlement Policy Framework (RPF). The implementation of the
RAP for the distribution line from Moshi to Arusha has been accomplished by now. The
implementation of the RAP for the transmission and rehabilitation works in Dar es Salaam is
ongoing, though the majority of the affected people have been compensated by now. According
to this RAP 2,212 properties were affected out of which 955 needed to resettle. However, in one
transmission line segment in Dar es Salaam, approximately seven houses originally not thought
to be in the right-of-way are actually within its limits. Transmission tower design is being
modified to avoid or minimize new resettlements. Once the technical work is finalized (not
18
expected before August 2011), a RAP Addendum will be prepared, consulted upon, and
disclosed. Civil works will not commence until the RAP Addendum is implemented.
71. Implementation of Safeguards under Component B. Under Component B, not affected by
this proposed Additional Financing, safeguards implementation has been satisfactory to date.
OP/BP 4.37 (Safety of Dams) and OP/BP 7.50 (International Waterways) were originally
triggered under this project. These policies were triggered since Component B was expected to
involve mini-hydro development. Consequently riparian notification in accordance with OP 7.50
was carried out by the Bank in 2007 (at the request of the Government) and no comments were
received opposing the project. OP 4.37 was triggered as a precautionary measure, as only small,
run-of-river dams were expected and have been proposed to date. The ESMF prepared for
Component B explains the application of dam safety to the small dams, and the review of
proposed mini-hydro projects includes ensuring that designs are prepared by engineers qualified
to incorporate standard dam safety measures.
72. Following outreach and consultations by the Task Team with local communities and mini -
hydro project developers during the initial years of project implementation, the Task Team
determined at MTR that there would be additional value created by preparing summaries of the
ESMF and RPF (for Component B) so that the documents are more easily accessible and
understood by stakeholders who are both benefitting from and being affected by the mini-hydro
sub-projects. GOT through the Rural Energy Agency (REA) has engaged a local consultant and
an international advisor to reformat these documents, which will also be disclosed in-country (in
English and Kiswahili) and through the Info Shop, once finalized.
73. Transferred Project Status. The project began as a Category B transferred project. Due to
the proposed addition of the LKEMP related capacity building activity the project will not
continue as a transferred project for safeguards oversight and clearance purposes. At the same
time the project will retain its Category B status after this Additional Financing.
19
Annex 1: Revised Results Framework and Monitoring
TANZANIA: ADDITIONAL FINANCING - ENERGY DEVELOPMENT AND ACCESS
EXPANSION PROJECT
Results Framework
Revisions to the Results Framework Comments/
Rationale for Change
PDO
Current (PAD) Proposed
The Project Development Objective is
to improve the quality and efficiency of
the electricity service provision in the
main three growth centers of Dar es
Salaam, Arusha, and Kilimanjaro and to
establish a sustainable basis for energy
access expansion and renewable energy
development in Tanzania.
No changes proposed to PDO in
this AF.
Small change in the PDO adding
“and renewable energy
development in Tanzania”
incorporated in AF 2010.
PDO indicators
Current (PAD) Proposed change*
Improvement in TANESCO‟s operational
efficiency as measured by: (i) a 7%
reduction in losses; and (ii) a 25% increase
in collection efficiency in targeted areas.
No change
Improvement in service quality as measured
by: (i) increase in end user voltage to 216
volts; and (ii) improved customer
satisfaction.
No change
REA fully functional as demonstrated by: (i)
capacity to develop, finance, and implement
scale-up of pilot schemes, and (ii) pipeline
of new rural connections.
No change
Generation capacity (MW) of Renewable
Energy constructed under the project
No change Renamed indicator in AF 2010;
increased target
Number of direct beneficiaries, of which
female (%) (Component B only)
No change New indicator, incorporated in
AF2010
20
Intermediate Results indicators
Current (PAD) Proposed change*
Improved customer service with a
centralized call center and a high
value customer cell in place.
No change
Improved IT systems for
commercial, technical service and
resources management functional.
No change
Replacement of 60,000 credit
meters with prepaid meters
completed.
No change
Pilot project for low loss high
voltage distribution system
implemented.
No change
Number of people provided with
access to electricity under the
project by household connections
(Component A)
No change Renamed indicator during MTR
and revised target values
Number of people provided with
access to electricity under the
project by household connections
(Component B)
No change Renamed indicator in AF 2010;
revised target
Number of indirect beneficiaries,
of which number of women
(Component B)
No change New indicator incorporated in AF
2010
Number of community electricity
connections under the project
No change Renamed indicator in AF2010
Standard PPA/Ts methodology for
small renewable power projects
adopted and in use (Yes/No)
No change
Delivery of MW of renewable
energy by grid connected SPPs
under Standard PPA/Ts
No change Increased target in AF 2010
Number of subproject transactions
concluded by REA.
No change Increased target in AF 2010
Number of PFI loans approved for
rural / renewable energy sub-
projects
No change New indicator incorporated in
AF2010
Number of banks accessing
REA‟s capacity building services No change New indicator incorporated in
AF2010
Timely and equitable
development of the identified least
cost large power generation
project.
No change
Institutional capacity development
needs identified and a plan to
address these agreed and
implemented.
No change
* Indicate if the indicator is Dropped, Continued, New, Revised, or if there is a change in the end of project target value
21
Revised Project Results Framework
Project Development Objective (PDO): The Project Development Objective is to improve the quality and efficiency of the electricity service provision in the main three growth centers of Dar es Salaam, Arusha, and Kilimanjaro and to establish a sustainable basis for energy access expansion and renewable energy development in Tanzania
PDO Level Results Indicators C
ore UOM
Baseline Original Project Start (2007)
Progress To Date (2011)
Cumulative Target Values
Frequency Data Source/ Methodology
Responsibility for Data
Collection Comments 2012 2013 2014 2015 (at
closing)
1. Improvement in TANESCO‟s
operational efficiency as measured by: Electricity losses per year in the project areas.
% 28 28 27 25 23 21 Monthly
Report on “Transfer Units – Grid System”, Monthly Sales Reports
TANESCO
This indicator has been renamed during MTR 2010 to follow the proposed Energy Core Indicators
2. Improvement in TANESCO‟s operational efficiency as measured by: Improvement in collection efficiency
4. Improvement in service quality as measured by: Improved customer satisfaction.
% - 40 45 60 >75 >75 Bi-annually
Summary Report of Customer Feedback Survey to be made available
TANESCO
22
PDO Level Results Indicators
Core UOM
Baseline Original Project Start (2007)
Progress To Date
(2011)
Cumulative Target Values Fre-
quency Data Source/ Methodology
Responsibility for Data
Collection Comments
2012 2013 2014 2015 (at closing)
5. REA fully functional as demonstrated by: Capacity to develop, finance, and implement scale-up of pilot schemes.
REA is unfunc-tional
Transfer of Offgrid
Component implemen-
tation to REA, functionnal
REA, key staff appoint-ted
Improved technical
and business assess-ment
capacity
Improved business
and economic
assess-ment
capacity
Improved business, economic
and financial assess-ment
capacity
REA identifies
and approves
new connec-
tions
Annual
World Bank Supervision
Mission Reports,
Ongoing sector dialogue
REA
6. REA fully functional as demonstrated by: pipeline of new rural household connections
Number - 27,500 30,000 34,000 40,000 50,000 Annual
World Bank Supervision
Mission Reports,
Ongoing sector dialogue
REA
7. Global Environmental Objective: Generation capacity (MW) of Renewable Energy constructed under the Project.
MW - 11 15 18 20 25 Annual SPPA
implementation REA
Beneficiaries
Direct project beneficiaries, (Component B)
Number - 20,000 30,000 50,000 80,000 114,000 Annual
World Bank Supervision
Mission Reports,
Ongoing sector dialogue
REA Only for
Component B
Of which female Percent - 50% 50% 50% 50% 50% Annual
World Bank Supervision
Mission Reports,
Ongoing sector dialogue
REA Only for
Component B
23
Intermediate Results and Indicators
Intermediate Results Indicators
Core
Unit of Measurement
Baseline Original Project Start (2007)
Progress To Date (2011)
Target Values
Frequency
Data Source/
Methodo-logy
Responsi-bility for
Data Collection
Comments 2012 2013 2014 2015 (at Project closing)
Intermediate Result 1: Component A (TANESCO related and Ongrid Investments): Increased operational efficiency of TANESCO, increased quality of supply and service levels in selected clusters, and increased access to electricity in targeted clusters.
1. Improved customer service with a centralized call center and a high value customer cell in place
- - - -
Call Center and High
Value Customer
Cell Imple-mented
-
Call Center and High
Value Customer
Cell Implemented
Annual
Monthly Marketing Division Reports
TANESCO
2. Improved IT systems for commercial, technical service and resources management functional.
- - - -
Implementation of CMS,
TSMS & RMS
- - Annual Monthly IT Division Reports
TANESCO
3. Replacement of 60,000 credit meters with prepaid meters completed.
Number - - 10,000 35,000 60,000 60,000 Annual
Monthly Marketing Division Reports
TANESCO
4. Pilot project for low loss high voltage distribution system implemented.
- No No No No Partially
Implemented
Fully Implemented
Annual
Monthly Marketing Division Reports
TANESCO
5. Number of people provided with access to electricity under the project by household connections (Component A)
Number - - -
25,000 household
or 142,500 persons
25,000 households
or 142,500 persons
25,000 households
or 142,500 persons
Annual
Monthly Marketing Division Reports
TANESCO
24
Intermediate Results and Indicators
Intermediate Results Indicators
Core
Unit of Measurement
Baseline Original Project Start (2007)
Progress To Date (2011)
Target Values
Frequency
Data Source/
Methodo-logy
Responsi-bility for
Data Collection
Comments 2012 2013 2014 2015 (at Project closing)
Intermediate Result 2: Component B (Small Renewables off-grid): Increased electricity access in rural and peri-urban Tanzania to productive enterprises, service delivery facilities (in health and education), and to households with the capacity to pay for electricity, establishment of a functioning institutional and regulatory framework for commercially oriented, sustainable service delivery for rural electrification and renewable energy that can be scaled up, removal of barriers to, and reduction of costs of, implementation of renewable energy technologies to help mitigate greenhouse gas emissions, provision of long-term loans to renewable/rural energy developers on commercial basis, an enhanced bank expertise in appraising and supervising rural/renewable energy projects
6. Number of persons provided with access to electricity under the Project by household connections (Component B)
Number -
11,000 House-holds
or 62,700 persons
70,000 persons
78,000 persons
85,000 persons
110,000 persons
Annual
MEM/REA reports, verification reports and surveys
MEM/REA
7.Number of indirect beneficiaries, of which number of women (Component B)
Number 0
50,000 persons of which 25,000 women
130,000 persons of which 65,000 women
170,000 persons of which 85,000 women
200,000 persons of which 100,000 women
250,000 persons, of
which 125,000 women
Annual
MEM/REA reports, verification reports and surveys
MEM/REA
8. Number of community electricity connections under the project
Number - 800 825 870 910 1,200 Annual
MEM/REA reports, verification reports and surveys
MEM/REA
9. Standard PPA/Ts methodology for small renewable power projects adopted and in use (Yes/No)
Number No
SPPAs signed
SPPA/Ts signed for 10 MW
SPPA/Ts signed for 13 MW
SPPA/Ts signed for 15 MW
SPPA/Ts signed for 18 MW
SPPA/Ts signed for 20 MW
Annual MEM/REA/ TANESCO reports
MEM/REA
10. Delivery of MW of renewable energy by grid connected SPPs under Standard PPA/Ts
11. Number of subproject transactions concluded by REA.
Number - 3 5 7 9 10 Annual
MEM/REA/ TANESCO reports
MEM/REA
12. Number of PFI loans approved for rural / renewable energy sub-projects
Number 0 2 4 - - 4 Annual REA reports MEM/REA
25
Intermediate Results and Indicators
Intermediate Results Indicators
Core
Unit of Measurement
Baseline Original Project Start (2007)
Progress To Date (2011)
Target Values
Frequency
Data Source/
Methodo-logy
Responsi-bility for
Data Collection
Comments 2012 2013 2014 2015 (at Project closing)
13. Number of banks accessing REA‟s capacity building services
Number 0 2 3 - - 3 Annual REA/TIB reports
REA
Intermediate Result 3: Component C (Technical Assistance): Support for legal/technical/financial advisory support for least cost IPP and capacity building for TANESCO and MEM
14. Timely and equitable development of the identified least cost large power generation project.
- Studies under
Contract - - -
Studies completed
Annual Consultant reports
TANESCO
15. Institutional capacity development needs identified and a plan to address these agreed and implemented.
-
Capacity Building
needs identi-fied
Capacity Building program initiated
- -
Capacity Building program
completed
Annual
Monthly Human Resource Division Reports
TANESCO
26
Annex 2: Operational Risk Assessment Framework
TANZANIA: ADDITIONAL FINANCING - ENERGY DEVELOPMENT AND ACCESS EXPANSION PROJECT
Project Development Objective(s)
The Project Development Objective is to improve the quality and efficiency of the electricity service provision in the main three growth centers of Dar es Salaam, Arusha, and Kilimanjaro and to establish a sustainable basis for energy access expansion and renewable energy development in Tanzania
PDO Level Results Indicators: 1. Improvement in TANESCO‟s operational efficiency as measured by: (i) a 7 percentage point reduction in losses; and
(ii) a 25percentage point increase in collection efficiency in targeted areas.
2. Improvement in service quality as measured by: (i) increase in end user voltage to 216 volts; and (ii) improved customer satisfaction.
3. REA fully functional as demonstrated by: (i) capacity to develop, finance, and implement scale-up of pilot schemes, and (ii) pipeline of new rural connections.
4. Generation capacity (MW) of Renewable Energy constructed under the project
5. Number of direct beneficiaries, of which number of women (Component B only)
Rating Category Explanation: Low (L) corresponds to a risk factor with a low impact if it does happen and a low likelihood of it occurring; High (H) relates to a risk with a high impact on the PDOs and a high likelihood that it will occur; Medium driven by Likelihood (ML) rating indicates a risk that would have a low impact even if there is a high likelihood that it will happen; and Medium driven by Impact (MI) corresponds to a risk that would have high impact if it took place but a low likelihood of it occurring.
MI Borrower commitment to the Project objective may change
TANESCO and the Government of Tanzania have reiterated the importance of this Project for the energy sector in Tanzania, which suffers from a chronic shortage of supply during the dry season, which is aggravated by high transmission and distribution losses. Because of the importance of this Project, the Government of Tanzania not only requested an Additional Financing for this Project, but also confirmed contribution of Government counterpart funds of up to US$ 11million. In addition the Government is also about to process a tax waiver for
27
contracts financed by this Project, which will reduce the overall financing gap. Finally TANESCO in addition to the GOT counterpart funds confirmed additional funds from its own budget of up to US$4.5 million.
Implementing Agency Risks Overall
MI The past experience has shown some weaknesses in TANESCO‟s overall implementation capacity under this project for Components A and C, mainly relating to slower than expected procurement processes. REA, the implementing agency for Component B is a relatively new organization which has no previous experience with World Bank projects. Consequently implementation efforts under Component B could risk to slow down in the future.
The proposed mitigation measures and detailed assessment for each Implementing agency‟s risk rating is shown in the following section on Implementing Agency Risks by Agency.
Implementing Agency Risks
By Agency
TANESCO
MI MI
Weak implementation capacity at TANESCO
Weak procurement capacity of TANESCO
TANESCO has agreed to strengthen the PIU´s implementation capacity by hiring two additional engineers and have a dedicated procurement staff. All three staff members have been hired by appraisal and are now duly established. TANESCO will submit to the Bank an updated operation/procedures manual of the TEDAP PIU review before appraisal. In addition, TANESCO has agreed to have close management follow-up on the Project´s PIU.
TANESCO has already implemented key measures to address TANESCO´s weak procurement capacity including a reorganization of the procurement department and introduction of service level agreements between the procurement department and supporting operational departments and hiring a procurement advisor. In addition, TANESCO now also added to the PIU a dedicated Procurement Staff to work on the TEPAD Project.
28
MI
Weak financial management at TANESCO
TANESCO has demonstrated throughout Project implementation that it has adequate fiduciary capacity. The Bank team will continue close monitoring and supervision of fiduciary aspects.
Rural Energy Agency (REA)
MI MI ML
Component B: REA has not extensive experience with IDA projects
Component B: REA does not have much procurement experience with IDA projects
Component B: REA does not have much financial management experience with IDA projects
Component B: REA is fully staffed and operational. A full procurement, financial management and safeguards capacity assessment of REA as an implementing agency was undertaken during the preparation of TEDAP AF 2010 (Component B) and ranked the institutional capacity as “satisfactory”. TEDAP is supporting REA in building its capacity and developing scalable models for renewable energy and access expansion. REA also benefits of technical assistance under the SIDA Trust Fund executed by the Bank and the SIDA capacity building program implemented by a private consulting firm.
Component B: A procurement capacity building plan was agreed during the design of the AF 2010 for Component B and is currently being implemented. Component B: A financial management capacity enhancement plan was agreed during the design of the Additional Financing for Component B and is being implemented. REA staff benefited of financial management training for IDA projects provided by the Malawi Institute of Management.
Project Risks
Design
L
Project design is not adequate
The AF will support the implementation of key investments on T&D under Component A that were designed to improve the capacity of existing networks in Dar es Salaam, Arusha, and Kilimanjaro by reducing technical and nontechnical losses and improving the overall reliability of the system. The additional funds to be provided by this AF will allow
29
MI
Component B. Delays in the materialization of the small power projects pipeline
the pending contracts under Component A to be processed and implemented before project closing on March 31, 2015. IDA approved in 2010 a credit line for rural/renewable energy development under TEDAP AF that provides long term financing (10-15 years)to local developers through local commercial banks, on market terms. IDA is working with REA on the establishment of a financing mechanism including a PoA that will improve the financial viability of the projects and address the equity gap.
Social and Environmental
MI Component A: Implementation of the RAP for this component could face some resistance from some of the affected people since it involves urban land and property. TANESCO needs to strengthen its social safeguards team and monitoring of the RAP implementation. TANESCO needs to update the RAP to reflect a change in number of PAPs in one transmission-line segment. Contractor has prepared an acceptable EMP for the transmission line and substation work and needs to be diligent in its implementation. Component B: REA does not have much experience on safeguards with IDA projects
Component A: An EMP has been prepared for the transmission line and the substation. Additional EMPs will be prepared as and when necessary. Continued Bank supervision of RAP modification and implementation. A systematic monitoring of the RAP implementation and continued direct oversight of the contractor by the owner‟s engineer consultant, and continued supervision by the Bank.
Component B: An ESMF and RPF have been prepared for this component to guide safeguards implementation. REA needs to improve its safeguard capacity. To address this, REA has already hired a social scientist who will be solely working on the safeguards issues related to the rural electrification. In addition, an international consultant has been contracted to improve REA capacity in this regard.
Program and Donor
L Lack of cohesiveness among interventions in the energy sector projects financed by donors
Over and above the continued engagement of IDA, NORAD, SIDA, and AfDB in the sector, the GOT and TANESCO have been able to draw additional donor interest from Millennium Challenge Corporation of USA (MCC), EU, Finland, JICA, and South Korea
30
EDCF. Furthermore, to harmonize the support provided to the energy sector, the World Bank has taken the lead in collaborating with SIDA, NORAD, South Korea EDCF, MCC, JICA, Netherlands, EU, AfDB and UNDP to design the overall assistance to the energy sector. The off-grid efforts are supported by several trust funds managed by the Bank: SIDA TF for support to electricity access and regulation, AFREA Lighting Rural Tanzania Grant, etc
Delivery Quality
MI
ML
Weak capacity of PIU at TANESCO will affect the capacity to deliver Component A of the Project Component B: The household connections may be delayed due to some challenges (equity gap, limited local capacity etc) faced by local developers
An action plan that will strengthen the PIU´s capacity to deliver the Project has been agreed with TANESCO. New staff has already been hired and a dedicated procurement staff supports now the procurement processes currently under way. Component B: The team is working with the client and other donors (SIDA, NORAD) on several instruments aimed at mitigating the equity gap risk (through Carbon Finance Program of Activities, grants under the Russian Trust Fund etc). Moreover, several instruments under TEDAP (matching grants) and SIDA Trust Fund provide capacity building to the developers, local commercial banks and other stakeholders
31
Overall Risk Rating at Preparation Overall Risk Rating During Implementation
Comments
ML MI
This is an AF to an ongoing operation (TEDAP), which has been rated as Moderately Satisfactory (DO and IP) for the past year. The rating has been selected considering that the implementation and procurement capacity of the implementing agency (TANESCO) has improved over the last 15 months and is expected to continue on that path as various measures described above have already or will be put in place, including: (i) additional staff for the PIU including a dedicated procurement specialist, (ii) a revised operational manual, and (iii) continuous oversight by TANESCO´s management. The implementation of Small Power Projects (SPP) Component B has been satisfactory.
32
Annex 3: Detailed Description of Project Components
TANZANIA: ADDITIONAL FINANCING - ENERGY DEVELOPMENT AND ACCESS
EXPANSION PROJECT
I. On-Grid Component (Components A&C)
A. Summary of Components’ main activities
1. Component A supports investments in TANESCO‟s transmission and distribution networks
in Dar es Salaam, Arusha, and Kilimanjaro. This grid component, once fully implemented, will
improve the capacity of existing networks, thus improving the service quality for existing
customers and allowing new customers to connect to the grid in the three main growth centers of
Tanzania. Furthermore, these investments will improve the capacity of existing networks thus
improving power system performance by reducing system losses, frequent outages due to
overloaded transformers and old equipment, low and fluctuating voltage conditions and poor
system power factors.
2. Most of these investments are either in an advanced stage of procurement or are already
under implementation. The investments include adding, replacing or upgrading transmission and
distribution lines and substations and medium and low voltage equipment, meters, spare parts,
and tools. The main rationale of these investments is to create value in the electricity business
and to demonstrate its viability in a replicable manner. Component A is implemented by
TANESCO.
3. At the same time implementation of this Component faced some severe implementation
issues and currently the Component‟s implementation is about 1-2 years delayed.
4. Component C supports technical assistance to TANESCO and the MEM for: (i) building
implementation based on a detailed training plan currently under assessment by TANESCO; and
(ii) providing legal, financial and technical advisors to the MEM to develop the next major
hydropower generation project (Ruhudji HPP) on a public private partnership basis. Except for
the capacity building training and the proposed environmental capacity building measure to
TANESCO, all of those Technical Assistances have been contracted by now and are under
implementation.
B. Current status of Component A main activities
5. Status of Procurements. The four Distribution Rehabilitation lots have been rebid in early
2010 after a failed first procurement in mid 2009. This ICB procurement was reviewed at the
Bank‟s OPRC level. During the bidders conference for this procurement there was some
miscommunication with regard to the pricing methodology applicable. While those Bids had
been requested on an adjustable price basis close to all bidders submitted fixed price bids.
Consequently the Bidding was cancelled but a new bidding was approved by the Bank‟s
authorities. Under the new bidding bids were submitted by 16 firms on November 29, 2010.
The analysis of the submitted bids is currently on-going and the submission of the Bid evaluation
report is expected in May 2011. The procurement for these distribution packages are currently
33
delayed by 2 years due mainly to the failed procurement attempt. However, with an estimated
implementation time of 21 months and an expected contracting of those four distribution lots in
mid 2011, those contracts are expected to be implemented within the current project lifetime.
6. The procurement process for the HV distribution and Network Expansion is under
preparation by a related consultancy. This procurement is now expected to be financed by
TANESCO as per the earlier indications in the main part of this Project Paper. Regarding the
Metering Sub-Component, the Bank gave its no objection for award of contract under Lot 3 and
the analysis for the Lot 1 and 2 Evaluation Report is ongoing. It is expected that Lot 2 will be re-
bid due to non-responsive bids. This Meter Lot 2 is expected to be financed by TANESCO as
one of the counterpart funding measures to bridge the current financing gap. All the other
procurements of goods are currently under preparation and all consulting services are under
implementation, with the exception of the Marketing Department Study and Training for
Capacity Building. It is expected that all components under the Credit will be implemented by
the revised Project closing date of March 2015.
7. Status of Transmission Contract. The three transmission lots under Sub-Component A.1,
were procured in May 2009 and all three contracts became effective in March 2010. The delay
for effectiveness was mainly due to the processing of the Letter of Credit by TANESCO. The
contractor has mobilized on the majority of the substations sites and transmission corridors
although on some sites and corridors there are some remaining issues with regard to land sites
and right of way not used as planned originally in the project, which is expected to be resolved
within the next few months. Those delays had already an impact on the contract completion date
of March 2012 and the anticipated cost increases have been taken into account in the additional
financing amount calculation. Additional delays are also experienced due to slow timely
payment of custom duties and clearance of shipments of invoices as well as slow timely release
of pending/new change order proposals of the Contractor, which to some degree could have an
impact on the project cost. Those additional costs have been taken into account in this
Additional Financing. Consequently a Tax exemption of the project‟s activities from local
taxation and custom duties has now been agreed with the Ministry of Finance (MOF).
C. Current Rating explanation and brief summary of Rating history of Component A
8. Component A is currently rated Moderately Satisfactory. After effectiveness the Component
A implementation started on a satisfactory level with timely launch of all major procurement
processes. However in late 2008 the procurement process of the transmission and distribution
rehabilitation contracts of Sub-Component A.1, encountered some severe delays as explained
above.
9. Subsequently the IP rating of the Distribution packages related Sub-Component was
downgraded to Moderately Satisfactory in 2009 and the Task Team and TANESCO took various
measures to enhance the procurement implementation performance under Component A
including: (i) provision of additional World Bank procurement training to TANESCO‟s TEDAP
team; (ii) engagement of an International Procurement Advisor by TANESCO (financed by this
project); and (iii) reallocation of the TEDAP Task Team Leader from Washington DC to Dar es
Salaam.
34
10. While those mitigation measures were proven successful and allowed for an improvement of
implementation speed of the ongoing procurements at that time, Component A faced another
implementation delay that occurred under the 3 transmission rehabilitation contracts,
successfully awarded in May 2009 as explained above. Those additional set-backs led to a
downgrade of the transmission related sub-component under Component A to Moderately
Satisfactory and given the overall weight of Component A under the Project (currently over 60%
of the total credit amount) the Project‟s overall PDO and IP rating was downgraded to
Moderately satisfactory in 2010.
11. During the Mid Term Review in December 2010 additional progress was noted on the
implementation of Component A as most of the Transmission Line sites‟ and substation sites‟
issues had been resolved or were closed to being resolved. At the same time the Mid Term
Review revealed a significant financing gap and since the full mobilization of the transmission
line contractor was neither achieved, the Component A‟s and the overall project‟s rating was
kept at Moderately Satisfactory. This rating is currently maintained.
12. However and as explained in the main text of this Project Paper under Section I, the Project
is expected to reach a Satisfactory level, once this Additional financing is approved and the
proposed Action Plan has been implemented and if no new issues are identified.
II. Small Power Project Component (Component B)
13. The implementation of the off-grid component has been satisfactory. The component has
established a new framework for off-grid electrification to be financed on a public private
partnership basis and the first pilot projects under this framework are being implemented. The
component was initially implemented by the Ministry of Energy and Minerals but was
transferred to the Rural Energy Agency (REA) in 2010 when REA became fully operational.
14. The Component B under the off-grid part consists of four sub-components: (i) small power
generation and distribution (SPGD); (ii) sustainable solar market development (SSMD); (iii)
technical assistance (TA); and (iv) rural/renewable credit line.
15. Under the SPGD sub-component, the project has established a comprehensive framework
consisting of (i) streamlined and simplified regulatory procedures for small power projects,
including standardized power purchase agreement (SPPA) and tariff (SPPT), and (ii) financing
package consisting of a performance grant (US$ 500 per connection) and matching grant (for
pre-investment support). In 2010, Additional Financing was processed to add one additional two
activity under SPGD – B.1 e) low-cost electrification pilot, and one new sub-component B.4
relating to a rural/renewable energy credit line, channeling long-term commercial funding for
rural and renewable projects through Tanzanian commercial banks.
16. The SPGD component is on track to reach its targets. TANESCO has already signed SPPAs
with 5 projects for total of 24 MW, of which 10.4MW are already in operation, and a Letter of
Intent was signed with additional four projects for 17.8 MW. REA has awarded first two
performance grants for 6,000 connections, and three matching grants for a new pipeline of
projects seeking pre-investment support. Two commercial banks pre-qualified for the credit line,
and two sub-projects are currently being considered for credit line financing. A study to design a
new low-cost electrification approach was launched in February 2011.
35
17. The SSMD component has developed two new approaches to electrification with solar
photovoltaic (PV) systems. One of the key issues in the past PV projects in Tanzania was high
prices of PV systems and sustainability. The component is addressing these issues by piloting
new approaches that would aggregate demand in a defined geographic area (reducing costs of
service provision) and require longer term sustainability measures (maintenance, training, market
development activities). The project has financed first three sustainable solar market packages
(SSMP) in Rukwa region, which combine installations of PV systems for public institution with
development of commercial market for households and businesses. The first three packages for
500 public institutions and 8,000 household/business connections were competitively awarded to
a private sector provider, which has already started the installations. Additional packages are
now prepared for eight districts in five regions, and are expected to be bid out in early 2012. A
parallel PV cluster pilot project is working with rural cooperatives, such as agricultural
association (tea, coffee and cashew nuts) to provide solar home systems to their members, with
the cooperatives serving as demand aggregators and providing credits for their members to buy
Solar Home Systems (SHS). The installations are ongoing in two clusters and a scale up to other
cooperatives/regions is now also being prepared.
18. The technical assistance sub-component is also implemented satisfactorily. Main activities
included design and implementation support of SSMP and PV clusters, transaction advice for
SPGD component, and other capacity building activities for REA, MEM and project developers.
36
Annex 4: Revised Procurement Plan
TANZANIA: ADDITIONAL FINANCING - ENERGY DEVELOPMENT AND ACCESS EXPANSION PROJECT
Revised Procurement Plan
April 28, 2011
1. Goods, Works, and Non Consulting Services
List of contract packages to be procured following ICB, NCB and direct contracting and other methods of contracting:
Ref. No.
Contract Description Part of the
Project
Estimated Cost
(US $)
Procurement
Method
P-Q*
Domestic Pref.
(yes/no)
Review by Bank (Prior / Post)
Expected Bid-Opening
Date
Implemen-ting Agency
Remarks/ Status
1 a) Works/ Supply and Installation – TANESCO
1.1 5 132/33 kV Substations in DSM A.1 (Trans.) Contracted ICB No No Prior Completed- bids were opened on 23rd June.
2008 TANESCO
Contract under implementation
1.2 4 132 kV 36Transmisión Lines in Dar es Salaam
A.1 (Trans.) Contracted ICB No No Prior Completed- bids were opened on 23rd June.
2008 TANESCO
Contract under implementation
1.3 1 132/33 kV substation at KIA A.1 (Trans.) Contracted ICB No No Prior Completed- bids were opened on 23rd June.
2008 TANESCO
Contract under implementation
1.4 6 new 33/11 kV substations in DSM
A.1 (Distrib) 16,000,000 ICB No No Prior Completed- bids were opened on November
29. 2010 TANESCO
Bid Evaluation Stage
1.5 Rehabilitation of 5 33/11 kV substations in DSM
A.1 (Distrib) 9,000,000 ICB No No Prior Completed- bids were opened on November
29. 2010 TANESCO
Bid Evaluation Stage
1.6 8 new 33/11 kV substations in Arusha and Kilimanjaro
A.1 (Distrib) 14,000,000 ICB No No Prior Completed- bids were opened on November
29. 2010 TANESCO
Bid Evaluation Stage
1.7 33 and 11 kV overhead lines in Dar es Salaam, Arusha and Kilimanjaro
A.1 (Distrib) 15,000,000 ICB No No Prior Completed- bids were opened on November
29. 2010 TANESCO
Bid Evaluation Stage
1 b) Works – REA
1.8 Low Cost Electrification Pilot B.2.a 4,000,000 NCB No No Selected
for Prior December, 2011 REA Bid preparation
37
Ref. No.
Contract Description Part of the
Project
Estimated Cost
(US $)
Procurement
Method
P-Q*
Domestic Pref.
(yes/no)
Review by Bank (Prior /
Post)
Expected Bid-Opening
Date
Implemen-ting Agency
Remarks/ Status
2 Goods – TANESCO
2.1 a)
Meters, Lot 1-3: Replacement of 60,000 credit meters by prepaid meters, supply and installation of 25,000 new prepaid meters and up to 10,000 new prepaid meters for the HV cluster;;
A.3, A.4 9,200,000 ICB No No Prior Completed TANESCO Bid Evaluation Stage /Contracting stage for Lot 3
2.1 b) Supply and Installation of 1,800 Solid State Remote Meters
A.4 630,000 ICB No No Prior January, 2012 TANESCO Procurement process in preparation.
2.2 Centralized Call Center for Dar es Salaam
A.4 260,000 NCB No No Post January, 2012 TANESCO Procurement process in preparation.
2.3 High Value Customer Cell A.4 130,000 NCB No No Post January, 2012 TANESCO Procurement process in preparation.
2.4
Corporate IT Systems: Lot1: Commercial Management System (CMS); Lot 2: Technical service management System (TSMS); Lot3: Resource Management System (RMS)
A.4 3,315,000 ICB No No Prior September, 2011 TANESCO Procurement process in preparation.
3 Goods – MEM/REA
3.1 First 3 SSMP packages B.2.a Contracted ICB Yes No Prior Completed. MEM Contract under implementation
3.2 Second SSMP packages B.2.a 3,800,000 ICB Yes No Prior September, 2011 REA Bid preparation 3.3 IT equipment B.3 Contracted NCB No No Post Completed MEM Completed 3.4 Office equipment B.3 Contracted Shopping No No Post Completed MEM Completed
3.5 Vehicles B.3 Contracted NCB No No Prior Completed MEM Completed 3.6 Office equipment B.3 50,000 Shopping No No Post September 2011 REA Under Preparation
* P-Q stands for Pre-Qualification (a) ICB contracts for works estimated to cost above US$5,000,000 equivalent per contract, for goods estimated to cost above US$500,000 equivalent per contract and all direct contracting will be subject to prior review by the Bank. However, a specified number of NCB contracts will be identified in the Procurement Plan to be prior reviewed
38
2. Consulting Services
(a) List of consulting assignments.
RefNo.
Description of Assignment
Part of the
Project
Estimated Cost (US$)
Selection Method
Review by Bank
(Prior / Post)
Expected Proposals Submission
Date
Implementing Agency
Remarks/ Status
1 Consulting Services – TANESCO
1.1 Training Needs Assessment for TANESCO
C.1.a Dropped at TANESCO Request; with Self Financing
Completed TANESCO Under Implementation
1.2 (a) Implementation of Capacity Building for TANESCO – to be identified
C.1.b 620,000 Multiple Contracts
– TBD
TBD September 2011 TANESCO Procurement to start upon completion of item 1.1.
(b) Procurement Advisory C.1.b Contracted IC Prior Completed TANESCO Contract Under implementation 1.3 Consultancy services for
A.5 Contracted QCBS Prior Completed TANESCO Contract Under implementation
1.4 (a) Consultancy services for preparation of bid packages for TEDAP - Component A.1 (distribution)
A.5 Contracted SSS Prior Completed TANESCO Contract under implementation
(b) Consultancy services for training, supervision of TEDAP Investments & Project management - Component A.1 (distribution)
A.5 1,000,000 QCBS Prior Completed6 TANESCO Contract initialed but not signed. Will start only after 1.4a) has been completed and after No Objection by World Bank.
1.5 Consultancy for project management (A.3/ A.4)
A.5 1,000,000 QCBS Prior November 2011 TANESCO Procurement process in preparation.
1.6 Planning, design, bid documents, evaluation for HV Distribution Cluster
A.5 Contracted QCBS Prior Completed TANESCO Contract Under implementation
1.7 Consultancy services for Corporate Management Systems: (i) Incorporation of CMS to improve operational procedures and customer information; (ii) Incorporation of TSMS to attend to customers claims; (iii) Incorporation of RMS (including definition of new
A.5 Contracted QCBS Prior Completed TANESCO Contract under implementation
6 A QCBS process for a Time-Based Contract involving Consultancy services (supervision of implementation works up to commissioning and preparation of the final project report) for the TANESCO Distribution System Reinforcement Project for Dar es Salaam, Arusha and Kilimanjaro was negotiated by TANESCO in May 2006 and an initialed contract was provided with a conditional No Objection by the Bank in 2006.
39
RefNo.
Description of Assignment
Part of the
Project
Estimated Cost (US$)
Selection Method
Review by Bank
(Prior / Post)
Expected Proposals Submission
Date
Implementing Agency
Remarks/ Status
operational procedures)
1.8 Design and implementation of the Marketing Department, including the Centralized call Center and High Value Customer Cell
A.5 830,000 QCBS Prior September 2011 TANESCO Rebidding to start
1.9
Mainstreaming Implementation of the KST Reintroduction Management Plan Advisory. (One contract with subtasks)
C.1 263,000 SSS Prior June 2011 TANESCO Procurement under preparation
2 Advisory Services – MEM
2.1 (a) Legal Advisors for Ruhudji HPP
C.2 Contracted QCBS Prior Completed MEM Contract under implementation
(b) Financial Advisor for Ruhudji HPP
C.2 Contracted QCBS Prior Completed MEM Contract under implementation
(c) Technical Advisor for Ruhudji HPP
C.2 3,500,000 QCBS Prior Completed MEM Contract Negotiations
3 Advisory Services to REA
3.1 Various Feasibility Studies B.3 500,000 QCBS Prior September 2011 REA Procurement under preparation Note: Single Source Selection (SSS) to be adopted subject to clearance by the Bank
………… Those lines refer to procurement items that have been completed or are under implementation.
40
3. Goods, Works, now to be financed by TANESCO/GOT counterpart funds
Ref. No.
Contract Description Part of
the Project
Estimated Cost
(US $)
Procurement
Method
P-Q*
Domestic Pref.
(yes/no)
Review by Bank
(Prior / Post)
Expected Bid-Opening
Date
Implementing Agency
Remarks/ Status
1 Works/ Supply and Installation – TANESCO
1.8
HV Distribution Network, Lot 1: Network for 25,000 new customers and new HV Cluster, Lot 2: RMU switching units
A.2, A.3
10,000,000 ICB No No N/A November,
2011 TANESCO
To be procured and financed by TANESCO/GOT counterpart funds
2 Goods – TANESCO
2.1 a)
Meters, Lot 2: Procurement of up to 10,000 new three phase prepaid meters split type;
A.3, A.4
5,000,000 ICB No No N/A October 2011 TANESCO Rebidding and financed by TANESCO/GOT
counterpart funds
2.5 Re-tendering of Vehicles for Project Supervision
A.5 500,000 ICB No No N/A October, 2011 TANESCO Rebidding and financed by TANESCO/GOT
counterpart funds
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Annex 5: Revised Project Financing Plan including other sources of funds
TANZANIA: ADDITIONAL FINANCING - ENERGY DEVELOPMENT AND ACCESS EXPANSION PROJECT
The table below shows the Financing Plan of the entire Project, including counterpart funds and other sources of funds and
how those financing contributions evolved since the original IDA Board approval of the TEDAP in December 2007. IDA sources are shown in US Dollars and have been computed from the approved SDR amounts at the exchange rate applied at
appraisal of each Additional Financing. The format of the table follows the format of the original Project Appraisal Document’s Data Sheet generated in 2007.
Source Original Financing Plan
(November 2007)
With Revised Plan
(April 2010)
With Proposed Plan
(June 2011)
(US$m) (US$m) (US$m)
Borrower 6.80 6.80 22.30
International Development Association (IDA) 105.00 130.00 157.88
Global Environment Facility (GEF) 6.50 6.50 6.50
Other Donors and Bilateral Agencies 3.20 3.20 3.20
Local Sources of Borrowing Country (Private Sector, unidentified) 13.55 13.55 13.55