RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING MADAGASCAR SCALING RENEWABLE ENERGY PROGRAM (SREP) INVESTMENT PLAN (IP)

Transcription

1 Public Disclosure Authorized The World Bank REPORT NO.: RES31786 RESTRUCTURING PAPER Public Disclosure Authorized ON A PROPOSED PROJECT RESTRUCTURING OF MADAGASCAR SCALING RENEWABLE ENERGY PROGRAM (SREP) INVESTMENT PLAN (IP) APPROVED ON JUNE 30, 2016 TO REPUBLIC OF MADAGASCAR Public Disclosure Authorized ENERGY & EXTRACTIVES GLOBAL PRACTICE AFRICA REGION Public Disclosure Authorized Regional Vice President: Country Director: Senior Global Practice Director: Practice Manager/Manager: Task Team Leader: Makhtar Diop Mark R. Lundell Riccardo Puliti Sudeshna Ghosh Banerjee Miarintsoa Vonjy Rakotondramanana

2 ABBREVIATIONS AND ACRONYMS AfDB CY GoM IFC IP MDB RETF SREP TF African Development Bank Calendar Year Government of Madagascar International Finance Corporation Investment Plan Multilateral Development Bank Recipient Executed Trust Fund Scaling up Renewable Energy Program Trust Fund

3 BASIC DATA Product Information Project ID P Original EA Category Financing Instrument Investment Project Financing Current EA Category Approval Date 30-Jun-2016 Current Closing Date 30-Apr-2018 Organizations Borrower Ministry of Finance Economy and Budget Responsible Agency Ministry of Energy and Hydrocarbons Project Development Objective (PDO) Original PDO The project development objective is to support the Malagasy government to prepare a renewable energy investment plan for consideration by the SREP for funding. Summary Status of Financing TF Approval Signing Effectiveness Closing Net Commitment Disbursed Undisbursed TF-A Jun Aug Aug Apr Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No

4 I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING 1. This restructuring paper requests the extension of the Scaling-up Renewable Energy Program (SREP) Investment Plan (IP) from 30 April 2018 to December 31, The Government has submitted to the WB a request for extension of the closing date in order to allow for the completion of this activity. The total allocation was US$300,000. As of March 20 th 2018, the project has disbursed about US$ 230,000 which represents 78 percent of the total amount of financing. 2. SREP IP s letter agreement was signed on August 01, 2016 with an initial closing date of June 30, In June 2017, the closing date was extended to 30 April The Ministry of Water, Energy, and Hydrocarbon (MWEH) delayed its preparation because of the need to complete some priority projects and studies including the Least Cost Power Development Plan (LCPDP) and the National Electrification Strategy (NES). 3. SREP IP remains relevant for the sector given that the country needs to develop Renewable Energy (RE) potential projects which are not included in the LCPDP, in order to enhance the share of renewable energy generation and reduce costs to ultimately increase electricity access rate in the country. While SREP IP projects are related to rural electrification by small hydro and solar power system in remoted areas, the LCPDP targets projects of the interconnected networks and mini grids areas. SREP IP covers all localities not integrated in the LCPDP, hence the two programs are complementary in order to reach universal access in Madagascar. The Government of Madagascar (GOM) may use SREP Grant/Concessional funding to remove bottlenecks and to create enabling environment for attracting private investment. 4. Madagascar is included in the list of countries identified by the Bank that needs to have Renewable Energy Investment Prospectus, and other institutions such as the African Development Bank (AfDB) and the International Finance Corporation (IFC) have also reconfirmed their interest and support on the preparation of the renewable energy investment plan and could contribute to the financing of follow-on projects identified in the SREP IP such as rural electrification projects, hydro and solar power plants, and hybrid thermal-renewable energy generation projects.. 5. MWEH hired a Consultant in July 2017 to support the preparation of the IP. The Consultant undertook missions in country and prepared the inception report, which was submitted to MWEH in October After completing data collection, reviewing past studies, and consulting with the sector institutions, the Consultant prepared and submitted the draft SREP IP to MWEH in January The draft IP was shared with AfDB, IFC, and WB for comments. 6. During the joint mission led by the WB which was held in Antananarivo from March 19 to 23, 2018, AfDB, IFC, and WB reviewed and discussed the draft SREP IP and agreed with the GoM on the priority investments of the IP. The mission supported the MWEH to undertake consultations mainly with private sector involved in Renewable Energy development to finalize the IP. 7. The GoM would need to go through independent review, public consultations and updating of the draft IP (incorporating stakeholder comments) before finalizing the IP and submitting it to SREP Sub-Committee. Due to

5 constraint of funding at SREP level, the GoM and the MDBs agreed that the SREP IP should be submitted to SREP Sub-committee in May 2018 to be approved in June 2018 to increase the chance of receiving funding from SREP for the preparation and implementation of projects identified in the IP. However, restructuring the project to extend its closing date by 6 months from April 30, 2018 to December 31, 2018 would be needed to ensure that this process is fully completed and to have flexibility in case the GoM would need more time to adopt the IP. 8. The client shared with the team the revised project implementation plan detailing the next steps to complete the IP. The team reviewed the revised implementation plan and found it acceptable. The implementation unit has adequate capacity to implement the remaining activities of the IP and this extension request is the last extension of the closing date since December 2018 would be the last SREP Sub-committee meeting. II. DESCRIPTION OF PROPOSED CHANGES 9. The proposed changes concern (i) the extension of the closing date of the Grant TF0A2324 from April 30, 2018 to December 31 st, 2018; and (ii) the adjustment of the implementation schedule. 10. The revised implementation schedule is presented in Annex The implementation schedule indicate that the final IP would be submitted to SREP Sub-committee in early May 2018 to be approved in June However, it is proposed to extend the closing date of the project to December 31, 2018 to have flexibility in case the GoM would need more time to adopt the IP. III. SUMMARY OF CHANGES Changed Change in Loan Closing Date(s) Not Changed Change in Implementation Schedule Change in Implementing Agency Change in Project's Development Objectives Change in Results Framework

6 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE The World Bank Change in Components and Cost Cancellations Proposed Additional Financing Proposed Reallocation between Disbursement Categories Change in Disbursements Arrangements Change in Disbursement Estimates Change in Overall Risk Rating Change in Safeguard Policies Triggered Change of EA category Change in Legal Covenants Change in Institutional Arrangements Change in Financial Management Change in Procurement Other Change(s) IV. DETAILED CHANGE(S) LOAN CLOSING DATE(S) TF Status Original Closing Revised Closing(s) Proposed Closing Proposed Deadline for Withdrawal Applications TF-A2324 Effective 30-Jun Apr Dec Apr-2019 Annex 1. Revised Implementation Schedules # Actions Target 1 Joint donors (AfDB, IFC and WB) March 2018 mission with stakeholders to validate the priority investments of the draft IP 2 Public consultation April 2018

7 3 Review of the IP by an independent expert 4 Integration of the comments of the independent expert 5 Approval of the IP by MEEH and submission to SREP Sub-Committee 6 Approval of the IP by SREP Sub- Committee April 2018 End of April 2018 Early May 2018 June 2018