Project to Interconnect the Power Grids of the Central African Republic and the Democratic Republic of Congo from the Boali Hydro-Power System –Phase 1

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Language: ENGLISH Original: French

AFRICAN DEVELOPMENT FUND

PROJECT : PROJECT TO INTERCONNECT THE POWER GRIDS OF THE CENTRAL AFRICAN REPUBLIC AND THE DEMOCRATIC REPUBLIC OF CONGO FROM THE BOALI HYDRO-POWER SYSTEM –PHASE 1

MULTINATIONAL: CENTRAL AFRICAN REPUBLIC AND DEMOCRATIC REPUBLIC OF CONGO

PROJECT APPRAISAL REPORT

Date : August 2012

Team Leader J. B. NGUEMA-OLLO ONEC.1 3072 I. KONATE ONEC.1 3418 S. ASSYONGAR-MASRA ONEC.1 3541 D. IBRAHIME ONEC.1 2549 ONEC.3 M.A. BEZZAOUIA 3854 Team Members Cons. R. KITANDALA CDFO 6338 Appraisal Team C. DJEUFO CMFO 6809 J. BISSAKONOU CMFO 6807 M. YARO ORPF. 2 2790 Sector Division Manager A. ZAKOU ONEC. 1 2211 CFFO Resident Representative M. SANGARE CFFO 7160 CDFO Resident Representative V. ZONGO CDFO 6333 Sector Director H. CHEIKHROUHOU ONEC 2034 Regional Director M. KANGA ORCE 2060

A.MOUSSA ONEC. 1 2897 P. DJAIGBE ONEC. 1 3961 N. NDOUNDO ONEC. 1 2725 I TOURINO SOTO ONEC. 3 2533 R. ARON ONEC. 3 2792 A. FOURATI ONEC. 3 3854 ONEC. 1 3854 Peer Reviewers O.T. DIALLO Cons. K.DIALLO ORCE 2578 O. FALL OPSM 3820 S. WAKANA CDFO 6350 S. B. TOUNKARA CMFO 6822 C. AHOSSI CMFO 6811 C. BOLLO TEMA CMFO 6813

TABLE OF CONTENTS

1 STRATEGIC THRUST AND RATIONALE ...... 1 1.1 Project Linkages with the Two Countries’ Strategies and Objectives ...... 1 1.2 Rationale for Bank’s Involvement ...... 1 1.3 Aid Coordination ...... 2 2 PROJECT DESCRIPTION ...... 3 2.1 Project Components ...... 3 2.2 Technical Solutions Adopted and Alternatives Explored ...... 4 2.3 Project Type ...... 5 2.4 Project Cost and Financing Arrangements ...... 5 2.5 Project Target Areas and Beneficiaries...... 7 2.6 Participatory Approach ...... 7 2.7 Bank Experience and Lessons Reflected in Project Design ...... 8 2.8 Key Performance Indicators ...... 8 3 PROJECT FEASIBILITY ...... 9 3.1 Financial and Economic Performance ...... 9 3.2 Environmental and Social Impacts ...... 10 4 PROJECT IMPLEMENTATION ...... 12 4.1 Implementation Arrangements...... 12 4.2 Project Monitoring ...... 14 4.3 Governance ...... 15 4.4 Sustainability...... 15 4.5 Risk Management ...... 16 4.6 Knowledge Building ...... 16 5 LEGAL FRAMEWORK ...... 17 5.1 Legal Instrument ...... 17 5.2 Conditions Associated with Bank’s Intervention ...... 17 6 RECOMMENDATION ...... 18

 Annex I. CAR Comparative Socio-Economic Indicators  Annex II. DRC Comparative Socio-Economic Indicators  Annex III. Table of ADB Portfolio in the Two Countries  Annex IV. Key Projects Related to the Development of the Two Countries  Annex V. Map of Project Area

CURRENCY EQUIVALENTS, WEIGHTS AND MEASURES, ACRONYMS AND ABBREVIATIONS October 2011 UA 1 758.614 XAF UA 1 1.56162 USD UA 1 1.15650 EUR UA 1 9.92398 CNY

Fiscal Year 1 January – 31 December WEIGHTS AND MEASURES M Metre 1 m V Volt 1 V Cm Centimetre 0.01 m KV Kilovolt 1000 V Mm Millimetre 0.001m kVa Kilovolt-ampere 1000 VA Km Kilometre 1000 m W Watt 1 W m² Square metre 1 m² kW Kilowatt 1000 W cm² Square centimetre 0.01 m² MW Megawatt 1000 kW mm² Square millimetre 0.001 m² GW Gigawatt 1000 MW km² Square kilometre 1000 000 m² kWh Kilowatt-hour 1000 Wh Ha Hectare 10 000 m² MWh Megawatt-hour 1000 kWh Kg Kilogramme 1 000 g GWh Gigawatt-hour 1000000 kWh T Tonne 1 000 kg Kgoe Kilogramme of oil equivalent

ACRONYMS AND ABBREVIATIONS ADB African Development Bank ADF African Development Fund ACER Central African Rural Electrification Agency AFD French Development Agency ARSEC Central African Autonomous Electricity Regulatory Agency BCFAF Billion CFA Francs BDEAC Development Bank of Central African States CAPP Central Africa Power Pool CAR Central African Republic CSP Country Strategy Paper DRC Democratic Republic of Congo DSFC Financial and Accounting Services Directorate ECC Energy Consumption Control ECCAS Economic Community of Central African States EIRR Economic Internal Rate of Return ENERCA Enérgie Centrafricaine – (Central African Energy Utility) EU European Union FIRR Financial Internal Rate of Return GDP Gross Domestic Product GEF Global Environment Facility HV High Voltage IEC Information, Education, Communication IEPF Institute of Energy and the Environment of La Francophonie LV Low Voltage MDG Millennium Development Goals MV Medium Voltage NGO Non-Governmental Organization NPV Net Present Value PEFA Public Expenditure and Financial Accountability PRGSP Poverty Reduction and Growth Strategy Paper PRSP Poverty Reduction Strategy Paper MUA Million Units of Account UNDP United Nations Development Programme UPDEA Union of Producers, Transporters and Distributors of Electric Power in Africa WB World Bank

GRANT INFORMATION

Client Information Central African Republic Donees Democratic Republic of Congo CAR Ministry in charge of Energy Executing Agencies DRC Ministry in charge of Energy

FINANCING PLAN PHASE 1 Amount in UA Million Sources Total CAR DRC Instrument TOTAL ADF 35.28 29.73 5.55 Grant ADF Country Share 3.60 1.67 1.93 Grant ADF Regional Share 31.68 28.06 3.62 Grant Total Project Cost 35.28 29.73 5.55

ADF KEY FINANCING INFORMATION Grant Currency Unit of Account (UA) Interest Type Not Applicable Interest Rate Margin Not Applicable Commitment Fee Not Applicable Service Charge Not Applicable Interest Type Not Applicable Tenor Not Applicable Grace Period Not Applicable FIRR 26.04% NPV UA 101.10 million EIRR 45.36% NPV UA 229.98 million

TIMEFRAME AND MILESTONES Concept Note Approval 7 September 2011 Project Approval 19 September 2012 Effectiveness 20 November 2012 Completion 30 June 2017 Last Disbursement 31 December 2017 Last Reimbursement Not Applicable

PROJECT SUMMARY

1 Project Overview: The Project for interconnection of the CAR and DRC power grids from the Boali hydro-power system is an anchor operation which will help to strengthen bilateral economic cooperation and sub-regional integration. It will help to build a section of the electrical system of CAR and DRC border areas and to supply electricity to these areas, which are characterized by an infrastructure deficit. Apart from improving power service quality which will benefit all users, the project will connect 29 000 new subscribers. The project will be implemented in two phases over a 48-month period starting from 2012. Phase 1, which is the subject of this report, will cover the rehabilitation and strengthening of power generating units, transmission lines, transformer substations and distribution grids. It will concern mainly the CAR but also the localities of Zongo and Libenge in DRC. Phase 2 will essentially concern the high voltage line linking Zongo to Libenge.

The total project cost is estimated at UA 59.50 million, of which UA 35.28 million for Phase 1. ADF intervention in CAR falls under an Electricity Infrastructure Emergency Rehabilitation Programme (PURCE) which is also supported by the World Bank, the French Development Agency and China. It comprises energy efficiency measures which will help to (i) reduce line losses (rehabilitation of power grids, switchover from 63 to 110 kV, etc.); and (ii) increase electricity production without increasing the reservoir capacity (rehabilitation of hydro-power plants). These measures will reduce greenhouse gas emissions because they increase the quantity of renewable energy and reduce self-generation by individuals and ENERCA’s thermal generation. Equipping the Boali 3 power plant for power generation will provide more renewable energy and reduce the use of thermal power plants to cover the generation deficit. It is an exemplary climate change adaptation measure which will optimize hydro-power infrastructure and enhance the potential of River M’bali, from the reservoir built about twenty years ago.

2 Needs Assessment: in the energy sector, CAR and DRC are facing constraints related to the deterioration of power infrastructure and, in some cases, its destruction during conflicts. The result of this situation is insufficient power generation and low electricity access rates (14% for CAR and 9% for DRC despite a huge hydro-power potential) which are deepening poverty. The capacity of the key institutional actors is weak. Concerning CAR, the reforms implemented in the sector have not produced the expected results. The situation of the sector, characterized by losses of over 40% and power cuts of more than 10 hours a day, is catastrophic. The rehabilitation of infrastructure and its strengthening in the first phase of the project is the best solution, in terms of cost and time, to the emergency.

3 Bank’s Value Added: PURCE’s objectives will not be achieved without the Bank’s intervention, which will also include actions to build the capacity of the national electricity operator. Lastly, the inclusion of cross-border electrification in a programme initiated by the Central Africa Power Pool is value added for the Bank.

4 Knowledge Building: during implementation, the Bank’s project team will benefit from the experience through workshops, study validation seminars and site meetings that could be tapped to resolve major technical problems. The Bank will also be able to use of results of the Information, Education and Communication (IEC) and Energy Consumption Control (ECC) campaigns envisaged, in assessing the degree of ownership of the project by the beneficiaries. These results will serve as a basis for designing similar projects that the Bank could initiate in other countries.

iii

RESULTS-BASED LOGICAL FRAMEWORK • Country and Project Name : Multinational - Interconnection of CAR and DRC Power Grids from the Boali Hydro-Power System • Project Goal : Increase the availability of electricity and meet the growing electricity needs of the two countries • Start-Up Date : June 2013 • Completion Date : December 2017 • Design Team : J.B. NGUEMA-OLLO, O. FALL, M. ADAMA, S. MASRA Performance Indicators Baseline Situation in Means of Results Chain Indicator Target by 2017 Risks/Mitigation Measures 2009 Verification (including CSI) CAR DRC CAR DRC Reduction in electricity costs Energy cost reduction rate Costs could fall by at least 10% in 2017 Reports Number of income-generating activities not not Evaluation during supervision and created recorded recorded at end of project Population’s purchasing power increased Number of income-generating activities not not Evaluation during supervision and Impacts created by women recorded recorded at end of project

Number of household appliances not not Evaluation during supervision and purchased recorded recorded at end of project Population’s living conditions improved Number of women trained in optimal not not Evaluation during supervision and use of electricity recorded recorded at end of project Increased generating capacity Installed power in MW 37.03 3200 57.03 4539 Statements of Risks Increased energy exchanges Volume of energy exchanges in GWh 0.72 1400 1.00 2600 Electrification rate improved Countries’ electrification rate 4% 9% 7% 16% Electricity access rate improved Electricity access rate 14 % 9% 22 % 21% Outcome Rural electrification rate improved Rural electrification 1% 1% 3% 3% s Reduction in technical losses Rate of reduction in technical losses 42% 25% 25% 10% Reduction in commercial losses Rate of reduction in commercial losses 42% 5% 5% 2% Number of km. of HV/MV/LV Increased HV/MV/LV grids 750 43044 1014 transmission lines 61058 • Installation of Boali 3 plant Installed power in MW 0 0 10 0 • Rehabilitation of Boali 1 and Boali 2 Installed power in MW 18 0 28 0 • Installed power in MV 2.5 MV 0 8 MV 500 kW Rehabilitation and strengthening of • Rehabilitation of thermal power plant  Fragility of power power generation units • Construction and strengthening of 110 kV Number of km of 110 kV lines 100 0 137 120 generation and distribution Construction and strengthening of transmission lines management companies. transmission network • Construction and strengthening of MV Number of km of MV lines 226 0 290 105  Weak State financial and transmission lines  Appraisal Report institutional capacity. • Construction of HV/MV substations  Grant Agreement Number of HV/MV substations 352 0 420 45  Weak capacity of • Construction of MV/LV substations  Engineering implementation units • Construction of HV/MV substations Number of MV/LV substations 4 5 0 2 Contracts Project Management composed of staff of the • Construction of MV/LV substations Indemnifications paid 214 4 240 20  Contracts with two national electric power • Indemnifications and individual contractors 18 0 7 6 utilities compensation  Status reports • Monitoring control, auditing and IEC 21667 0 63.000 2000  Supervision reports • Studies on Bangui-Zongo-Libenge  Completion reports Outputs transmission line  Audit reports • Works control and supervision • Auditing of accounts Not stated 0 500 200 • Environmental and social audit • Operating and maintenance equipment • Logistical support to executing agencies • Training activities • Individual and collective compensations. Compensation plan completed in 2014 • Control of monitoring, audit and IEC Action plan completed in December 2014 • Studies on Bangui-Zongo-Libenge Recruitment process Studies completed in 2013 transmission line • Works monitoring and supervision Quarterly Status Report Mitigation Measures • Auditing of accounts Audit of accounts carried out Annual report submitted on 30 June • Environmental and social audit Half-year audit carried out Report submitted and quarterly status report • Operating and maintenance equipment Procurements made All procurements completed in 2012 • Logistic support to the executing agency Logistic equipment procured All procurements completed in 2012  Efficiency of power • Training activities Training programme carried out Training programme completed in 2013 distribution utilities under iv

Components (base costs, the impetus of institutional Activities Financial Resources Sources of Financing Human Resources Phase 1 and 2) reforms in this sector. Rehabilitation and strengthening of  Contractors  Availability of necessary • Recruitment of works contractors UA 7.41 million ADF; generating units  Consultants human resources. Construction and strengthening of  Recruitment of technical • Recruitment of works contractors UA 30.98 million ADF;  Executing Agency transmission grid  Bank’s monitoring assistance (firm) to assist Rehabilitation and extension of the unit in different areas of • Recruitment of works contractors UA 16.84 million ADF; team distribution grid  Other financial expertise Key • Recruitment of individual consultants UA 7..89 million ADF; partners Activities • Recruitment of consulting engineer (Assistance)

• Recruitment of auditors of accounts and ESI controllers Project Management • Operating and maintenance equipment • Logistic Equipment, management tools • Implementation of staff training programme • Personnel costs (allowances)

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PROJECT IMPLEMENTATION SCHEDULE

REPORT AND RECOMMENDATION OF MANAGEMENT TO THE BOARD OF DIRECTORS CONCERNING A PROPOSAL TO AWARD ADF GRANTS TO THE CENTRAL AFRICAN REPUBLIC AND THE DEMOCRATIC REPUBLIC OF CONGO

Management hereby submits this report and recommendation concerning a proposal to award an ADF grant of UA 29.73 million to the Central African Republic (CAR) and an ADF grant of UA 5.55 million to the Democratic Republic of Congo (DRC) to finance the first phase of the Project to Interconnect the Power Grids of CAR and DRC from the Boali Hydro-power System.

1 STRATEGIC THRUST AND RATIONALE

1.1 Project Linkages with the Two Countries’ Strategies and Objectives

1.1.1 Access to basic social services constitutes the project’s linkage with the national strategies of the two countries. In fact, in CAR, one of the strategy guidelines is the development of human capital and essential social services (Poverty Reduction Strategy Paper – PRSP2 2011-2015). In DRC, one of the pillars of the Poverty Reduction and Growth Strategy Paper (PRGSP-II, 2011- 2015) seeks to improve access to basic social services and strengthen human capital. The project is in keeping with the joint Bank and World Bank strategy (JCPSP, 2009-2012) for CAR one of whose thrusts is the rehabilitation and development of socio-economic infrastructure. The project plugs into the second pillar of the Results-Based Country Strategy Paper (RBCSP 2008-2012) prepared by the Bank and which is aimed at achieving pro-poor growth by improving, among other things, the population’s access to basic services including electricity through the rehabilitation of power infrastructure and rural electrification.

1.1.2 At the regional level, the project is in line with the regional integration strategy recommended by the Economic Community of Central African States (ECCAS) and the Central African Economic and Monetary Community (CEMAC). One of the objectives of the strategy in the energy sector is to evolve from a compartmentalized community space to an integrated space, with the establishment of a programme to interconnect the electrical grids of Central African countries in order to ensure sufficient power supply in each State and enable the country to have access to a supply mix allowing it to choose between local power generation and purchase of electric power to optimize its electric power mix. The project forms part of the cross-border electrification programme established by the Union of Producers, Transporters and Distributors of Electric Power in Africa (UPDEAC) and the Central Africa Power Pool (CAPP) whose vision is to tap the region’s hydro-power potential to “meet all forms of demand through efficient and prosperous energy highways and power markets”. The implementation of this project is in line with the objectives of the Regional Integration Strategy Paper (RISP) 2011-2015 one of whose two pillars is the development of regional infrastructure.

1.2 Rationale for Bank’s Involvement

1.2.1 The CAR and DRC are facing major economic and social development difficulties stemming from numerous constraints. Constraints related to the energy sector are due to the deterioration of power infrastructure and, sometimes, their destruction owing to conflicts. The result of this situation is insufficient power generation and low electricity access rate (14% for CAR and 9% for DRC) which are deepening poverty.

1.2.2 The Bank’s intervention will help to remove the sector’s constraints by increasing generating capacity by 10MW and developing access to electricity thanks to the rehabilitation of power plants and the construction of distribution grids as well as the implementation of 29; 000 connections in border localities. In the 1990s, CAR and DRC signed an electrification agreement for Zongo town (DRC) from CAR power grids. The agreement served as a basis for the design of the first phase of this project. In June 2006, both countries agreed to extend the transmission line to Libenge, 100 km from Zongo, thereby l supplying power to six DRC localities along the line. The finalization of studies on this line will help to design the second phase of the project.

1.2.3 The construction of the power transmission line between CAR and DRC, included in the second phase of the project, will strengthen cooperation between the two countries and regional integration. It will ultimately help build a major link in the infrastructure for interconnection of power grids in Central Africa, specifically between the Boali and Lobaye (CAR) and Mobayi Mbongo (DRC) power plants. The result will be an improvement in electric power supply security. The Bank’s intervention in this project is in line with ADF-12 priorities which focus on the promotion of poverty reduction through growth driven by investment in infrastructure, governance and regional integration. It will complement those of other donors (notably AFD, World Bank and China) and is indispensable for restoring minimum capacity following the destruction and deterioration of power infrastructure.

1.3 Aid Coordination

1.3.1 In both countries, the task of seeking financing and development aid falls within the remit of the Ministries of Finance, Economy, Planning and International Cooperation. These Ministries coordinate and centralize preparation and monitoring activities relating to public investment programmes, management of which is the responsibility of the sector ministries. The financial partners intervening in the energy sectors in the two countries include: AFD, ADB, the World Bank, the European Union, UNDP, GEF, the Kuwait Fund, EIB, Chinese Cooperation, JICA and IEPF. Their interventions have included, in particular:

A.) In CAR: (i) the establishment of the Central African Rural Electrification Agency (ACER) and the Central African Autonomous Electricity Regulatory Agency (ARSEC); and (ii) implementation of power generating, transmission and distribution infrastructure, energy sector electrification and support programmes, as well as implementation in recent years of the following operations: (a) partial rehabilitation of the Bangui distribution grids in 2000 on AFD financing, (b) peri- urban connections from 2008 to 2011 on EU financing; (c) preparation in 2004 of the Electricity Code and analysis of the of the poor populations’ access to energy services, on UNDP financing; and (d) energy sector human capacity building on financing from IEPF, Chinese Cooperation and Japanese Cooperation.

B.) In DRC: (i) preparation of the Electricity Code and the Oil Code; (ii) preparation of a rural electrification master plan; (iii) establishment of a Public-Private Partnership Development Framework; and (iv) strengthening of power infrastructure as well as implementation of the following projects: (a) rehabilitation of the Inga and Katanga province hydro-power plants; (b) rehabilitation of the transmission and distribution grid; and (c) the Inga site development study.

1.3.2 In addition to these projects, the two countries will receive assistance from the Bank Group, ECCAS and CAPP for: (i) implementation of a common energy policy; (ii) implementation of the cross-border electrification programme; (iii) development of power grid interconnections; and (iv) promotion of renewable energy.

1 The Boali 3 Dam is intended to regulate River Boali flows in order to optimize the operation of the Boali 1 and 2 hydro-power plants located downstream. The Bank contributed to financing Boali.

2 PROJECT DESCRIPTION

2.1 Project Components

2.1.1 The Project will: rehabilitate and strengthen the Boali 1 (8.75 MW), Boali 2 (20 MW) and Boali 31 (10 MW) hydro-power plants in CAR as well as the Bangui (CAR), Zongo and Libenge (DRC) thermal power plants; build and strengthen the transmission grid with, in particular, a 110kV line between Bangui and Libenge; rehabilitate and extend the distribution grid including implementation of connections. It will be implemented in two phases. This phasing of the project is justified by the need to urgently respond to the calamitous situation regarding electric power generation, transmission and distribution infrastructure in CAR, which no longer meets the needs of basic services such as drinking water supply.

2.1.2 The first phase of the project will mainly involve the rehabilitation and strengthening of generating units as well as preparatory studies for the second phase. The major activity of the second phase will be the construction of the line from Bangui to Libenge. The two phases will involve the extension of distribution grids.

2.1.3 Phase I will involve the rehabilitation and strengthening of: (i) the Boali system generating units; (ii) the 110kV transmission line linking Boali to Bangui currently operated with 63kV; (iii) the obsolete Bangui, Zongo and Libenge thermal generating plants; (iv) the electrification of CAR localities crossed by the lines; (v) the electrification of Zongo; and (vi) building of the human and technical capacity of ENERCA, SNEL and CAPP. During this phase, all the necessary studies for the construction of the 110kV line from Bangui to Libenge will be finalized.

2.1.4 Phase 2 will concern: (i) construction of the 110/132kV HV line from Bangui to Libenge and the related substations; and (ii) electrification of 5 other localities in DRC crossed by the line. The project cost and cost by component and by phase are as follows:

Table 2.1 Detailed Project Costs by Component, Phase 1 and 2

No. Components Sub-components Phase Phase Description 1 2 Rehabilitation and extension of Boali 2 and Boali Rehabilitation Rehabilitation and and Rehabilitation of the Bangui thermal power plants 1 Strengthening of 7.41 Strengthening of Generating Units Generating Units Rehabilitation of the Zongo and Libenge thermal power plants Construction and

Strengthening of Construction of 123 km of 110/132 kV transmission line (Bangui-Zongo-Mole-Libenge) Construction and Transmission Lines Strengthening of Strengthening of 130 km of Boali 2 to Bangui 2 the Construction and 5.04 15.94 transmission line (from 63kV to 110kV) Transmission Construction of two 132 kV HV substations (DRC) Grid Strengthening of Strengthening of three 110 kV HV substations (CAR)

Transformer Construction of 45 MV/LV substations (CAR 45) Substations

Rehabilitation Construction, Rehabilitation of 26 km of underground MV and Extension of Rehabilitation and transmission line in Bangui (CAR) 3 12.08 4.76 the Distribution Extension of MV/LV Grid Grids Construction of 29 km of MV line in Bangui (CAR)

Connections and Rehabilitation of 90 km of LV line in Bangui (CAR) Public Lighting Construction of 90 km of LV line (CAR)

Construction of 105 km of MV line in Zongo – Libenge (DRC)

Construction of 81 km of LV line in Zongo-Libenge (DRC)

Single-phase connections (CAR and DRC)

Three-phase connections (CAR and DRC)

Public lighting units (CAR and DRC) Land transport (three 4x4 vehicles)

Operating and maintenance tools and equipment

CAR and DRC ESMP Operating and

Maintenance CAR and DRC CRP Equipment

Energy Consumption Control Establishment of the Project 4 ESMP 6.97 0,92 Management Information-Education-Communication (IEC)

Project Studies, Recruitment of consulting engineer and technical Control and auditor Supervision

Recruitment of technical assistance firm Project Administration

Audit of project accounts

Environmental and social audit Total Base Cost 31.50 21.62 Physical Contingencies 2.21 1.51 (7%)

Price Escalation 1.58 1.08 (5%) 35.28 24.22 Total Cost 59.50

2.1.5 The technical design of structures, detailed costs and financing arrangements are presented in paragraphs C.8 of Technical Annexes.

2.2.1 The technical solution adopted is based on the rehabilitation and strengthening of power plants to increase generating capacity instead of the construction of new generating units. It is justified by the fact that none of the alternatives explored produced the expected results within the timeframes imposed by the emergency situation. The options explored take into consideration their feasibility and their short- and medium-term operating impacts. Table 2.2 below presents the alternatives for enhancing power generation and strengthening the transmission grid explored and the reasons for their rejection in the current context.

Table 2. 2: Alternative Solutions Explored and Reasons for their Rejection Solutions Descriptions and Characteristics Reasons for Rejection Strengthening The construction of this plant requires the permanent closure of generation by Boali 1 and limits any expansion of Boali 2. This would amount to a new power Increase of generating capacity by 28 a 47 % reduction in existing generating capacity and would plant (Boali 4 MW increase the deficit or require the use of thermal power with highly

significant GHG emissions.

Strengthening Given its multinational character and the very high cost of the dam, generation by this project’s feasibility can only depend on CAR and, therefore, Construction of the dam on the a new power cannot be the subject of any short- or medium-term planning. Oubangui and a 30 MW hydro-power plant plant. (Palambo Plant) Strengthening Development of the Lobaye plant for 24 Not all the required studies for development of the Lobaye are generation by MW will ensure the expansion of the available and would take a very long time to prepare, especially in a new power interconnected grid and rural the case of the environmental studies for a new hydro-power plant (Lobaye electrification. facility. Plant) Strengthening Operation in an un-looped network is acceptable. However, the Equipping of Boali 3 + transmission to regarding transmission line losses, the positive impacts of transmission Boali 2 switching over to 110 kV will not be visible, and the supply will grid not be , fully guaranteed.

2.3 Project Type

2.3.1 This is a multinational investment project. The Bank will provide ADF resources in the form of grants to CAR and DRC. The Bank’s financing will complement that of other development partners including Chinese Cooperation, the French Development Agency and the World Bank. In August 2011, Chinese Cooperation signed a financing agreement with the Government of the Central African Republic, with one third of the funding concerned in grant form and two thirds as an interest-free loan. AFD and the World Bank will also contribute to the project financing through their emergency programmes approved in 2007 and 2009, respectively. These two operations have just been restructured and should now be completed in 2014.

2.4 Project Cost and Financing Arrangements

2.4.1 Project Financing Arrangements: the entire project (Phases 1 and 2) is included in the ADF-12 programme of regional integration operations for a total amount of UA 59.50 million. ADF financing comes from the DRC (UA 1.93 million) and CAR (UA 1.67 million) country allocations as well as from the regional operations envelope (UA 31.68 million, comprising UA 3.62 million for DRC and UA 28.06 for CAR). Both countries will transfer the resources granted to their respective national power utilities, ENERCA and SNEL, in the form of a grant and on the same terms as the ADF. CAR and DRC are not expected to contribute to the project financing, given their classification in the category of “Post-crisis, Fragile States”.

2.4.2 In CAR, ADF financing is complementary to that already granted by the World Bank (USD 12.26 million or UA 7.85 million), the French Development Agency (EUR 2.78 million or UA 2.41 million) and China (CNY 172.86 million or UA 17.42 million), within the overall framework of support to the electricity sector. ADF and World Bank financing were approved respectively in 2007 and 2009, for the Boali Electricity Infrastructure Emergency Rehabilitation Programme (PURCE). There has been a long delay in implementing PURCE. The two institutions have just restructured it and its completion is now scheduled for 2014. Chinese Cooperation’s contribution concerns the installation of Boali 3 electrical facilities and the construction and strengthening of HV lines linking the power plants as well as Bangui.

2.4.3 Project Cost (Phase 1): the total project cost, net of taxes and customs duties, is estimated at UA 35.28 million, comprising UA 24.70 million in foreign exchange (FE) and UA 10.58 million in local currency (LC). This cost includes a 7% provision for physical contingencies and 5% for price escalation. The project cost by component, source of financing and expenditure category as well as the expenditure schedule are indicated in Tables 2.3 to 2.6 below.

Table 2.3 Estimated Project Cost by Component, Phase 1 Amounts in UA million % Components FE LC Total FE Rehabilitation and Strengthening of Generating Units 5.18 2.22 7.41 70% Construction and Strengthing of Transmission Grid 3.53 1.51 5.04 70% Rehabilitation and Extension of Distribution Grid 8.46 3.62 12.08 70% Project Management 4.88 2.09 6.97 70% Total Base Cost 22.05 9.45 31.50 70% Physical Contingencies (7%) 1.54 0.66 2.21 70% Price Escalation (5%) 1.10 0.47 1.58 70% Total Cost 24.70 10.58 35.28 70%

Table 2.4 Sources of Financing, Phase 1 (Amounts in UA million) Source of Financing Cost in FE Cost in LC Total %Total Cost ADF 24.70 10.58 35.28 100%

2.4.4 Government Counterpart Contributions: the AfDB policy on expenditure eligible for Bank Group Financing and the note on counterpart financing determine the criteria for States to be fully or partially exempt from counterpart financing. Both CAR and DRC have financial parameters that allow them to be fully exempt from counterpart financing. Furthermore, both countries are considered by the Bank to be post-conflict, fragile States and no direct contribution is therefore expected from them. Nevertheless, the two power utilities will participate in project implementation by providing personnel, logistic resources and consumables. New customers will contribute partially to the financing of connections.

Table 2.5 Project Cost by Expenditure Category, Phase 1 (Amounts in UA million)

Total Project DRC CAR Expenditure Category FE LC Total FE LC Total FE LC Total Goods 0.39 0.17 0.56 0.19 0.08 0.28 0.19 0.08 0.28 Works 17.17 7.36 24.53 2.34 1.00 3.35 14.83 6.36 21.18 Services 3.98 1.71 5.69 0.54 0.23 0.76 3.45 1.48 4.93 Operation 0.09 0.04 0.13 0.05 0.02 0.07 0.05 0.02 0.07 Other Items 0.41 0.18 0.59 0.35 0.15 0.50 0.06 0.03 0.09 Total Base Cost 22.05 9.45 31.50 3.47 1.49 4.96 18.58 7.96 26.55 Physical Contingencies (7%) 1.54 0.66 2.21 0.24 0.10 0.35 1.30 0.56 1.86 Price Escalation (5%) 1.10 0.47 1.58 0.17 0.07 0.25 0.93 0.40 1.33 Total Cost 24.70 10.58 35.28 3.88 1.66 5.55 20.81 8.92 29.73 Percentage 70% 30% 100% 70% 30% 100% 70% 30% 100%

Table 2.6 Expenditure Schedule by Component, Phase 1 (Amounts in UA million)

Components 2013 2014 2015 2016 2017 Total Rehabilitation and Strengthening of Generating Units 1.29 2.90 1.29 0.65 0.32 6.45 Construction and Strengthening of Transmission Grid 0.75 1.69 0.75 0.37 0.19 3.74 Rehabilitation and Extension of Distribution Grid 3.01 6.77 3.01 1.51 0.75 15.05 Project Management 1.25 2.81 1.25 0.63 0.31 6.25 Total Base Cost 6.30 14.18 6.30 3.15 1.58 31.50 Physical Contingencies (7%) 0.44 0.99 0.44 0.22 0.11 2.21 Price Escalation (5%) 0.32 0.71 0.32 0.16 0.08 1.58 Total Cost 7.06 15.88 7.06 3.53 1.76 35.28

2.5 Project Target Areas and Beneficiaries

2.5.1 The project area extends from the Ombella M’poko Prefecture in CAR to Equateur Province in DRC. It covers thirteen localities, including villages and some neighbourhoods on the CAR side, and six localities on the DRC side, that is respective target populations of 111,030 and 112,193 inhabitants. In CAR, Bangui, the capital, is the largest town with a population of about 630,000 and a density of 9,295 inh./km2. The main activity on the CAR side of the project area is food crop farming which employs almost 80% of the workforce. Bangui’s industries manufacture textiles, food products, beer, shoes and soap. The main exports are diamonds, cotton, wood, coffee and sisal. The Zongo locality in DRC, with its population of about 54,000 lies opposite Bangui. The two towns are linked by ferry and trading has resumed since the re-opening of the CAR border. . The commercial interdependence between Bangui and Zongo brings the populations closer together - a key factor in sub-regional integration. The urbanization rate in the area is low and the population makes a living from agriculture and trading. Agriculture is dominated by food crops (cassava, maize, groundnut, plantains, coco-yam and sweet potato) and perennial crops (coffee and oil palm).

2.5.2 The project impact area in CAR and DRC is poor. In 2010, 62% of the CAR population lived below the poverty line. Most make a living from extensive farming (64%) and the informal urban sector (26%) with a high youth and male migration rate (51.3%). The poverty situation in both countries kept life expectancy at birth low in 2010 (47.7 years in CAR and 48 years in DRC). The two countries have very low human development index ratings (0.315 in CAR and 0.239 in DRC). They are ranked 159th and 168th respectively, out of 169 countries according to the 2010 classification. This situation of poverty also has an impact on maternal and child health; under-5 mortality rates in 2010 were 79.36‰ for DRC and 101‰ for CAR, compared to an African average of about 70‰

2.5.3 The main project beneficiaries are: (i) ENERCA and SNEL, whose generation costs will drop and whose income will increase as a result of new customers and enhanced reliability of the grid; (ii) ENERCA and SNEL’s customers, including the private sector, who will benefit from improved service quality; (iii) the inhabitants of the project area who will be employed on the project sites; and (iv) the two governments, which will collect additional tax revenue and benefit from increased productivity of the administration, thanks to improved working conditions.

2.6 Participatory Approach

2.6.1 Concerning Phase 1 of the project, socio-economic surveys were conducted in CAR and DRC among the populations concerned and validation seminars organized, bringing together the stakeholders identified. These activities made it possible to accurately determine the population’s expectations, adopt measures to protect housing and minimize damage to farms and natural sites.

They also offered an opportunity to measure the determination of the Central African and Congolese Authorities, for whom this project is a vehicle for transforming the economic and social development of the communities concerned.

2.6.2 The population, local authorities, civil society and NGOs have been consulted and their opinions on the project taken into account. The list of persons affected by the project has been validated and approved by the administrative and customary authorities. This approach that was followed at project preparation and appraisal will continue during its implementation through IEC and ECC campaigns and through the measures to mitigate the negative environmental and social impacts.

2.7 Bank Experience and Lessons Reflected in Project Design

2.7.1 Bank Group Interventions: in CAR, the Bank’s last intervention in the energy sector dates back to 1988 with the financing of M’Bali dam (Boali 3), whose performance was deemed satisfactory. However, given its age, with its Completion Report prepared in 1966, it is the lessons learned from the recent portfolio review that are deemed more relevant for the design of this project. The review highlighted the poor project quality at entry and the limited capacity of the Administration to provide the indemnification due. There is need to conduct detailed technical studies and carry out in-depth institutional and fiduciary assessments.

2.7.2 In DRC, the Bank’s activities in the energy sector had been suspended after the approval in 1989 of a last project relating to power transmission. Cooperation in the energy sector was resumed in 2007 with the approval of the Project to Rehabilitate and Strengthen the Inga Hydro-Power Plants and the Kinshasa Distribution Grid followed by the Peri-urban and Rural Electrification Project in 2010. The main lessons from the implementation of these projects relate to the fulfilment of conditions precedent to disbursement concerning compensation and delay in the procurement of goods, services and works.

2.7.3 At regional level, both countries are involved in the Study on the Interconnection of the Power Grids of ECCAS Member Countries on ADF financing, the Study on Cross-border Electrification Projects in Central Africa on IPPF/NEPAD financing and the Study on the Development of the Inga Hydro-Power Site and Related Power Interconnections on ADF financing. During the implementation of these multinational operations, there were difficulties in establishing the study organs and in meeting conditions precedent to disbursement and procurement.

2.7.4 The main lessons from the national and multinational projects taken into account in this project are as follows: (i) the need to define conditions precedent to first disbursement that take into account the fragile State status of both countries; and (ii) the need to build capacity for project preparation and implementation. Hence, conditions precedent to first disbursement have been relaxed and the project has made provision for the recruitment of a consulting engineer and technical assistance for ENERCA.

2.8 Key Performance Indicators

2.8.1 The indicators presented in Tables 2.7 and 2.8 below will ensure the timely identification of factors likely to affect project implementation and taking of appropriate corrective measures for the attainment of the set objectives. In particular, these factors include the timely fulfilment of the grant conditions precedent, plans for any resettlement, indemnification and compensation for persons affected by the project, the recruitment of consulting engineering firms and works contractors, and the timely availability of ENERCA and SNEL resources.

Table 2.7: Impact and Outcome Indicators in CAR CAR Impact Indicators Expected Progress at Project End  Electricity access rate (Number of households  From 14% in 2009 to 22% in 2017 electrified/Total number of households)  Costs could fall by at least 10% in 2017  Electricity generation and cost reduction rate Outcome Indicators Expected Medium-Term Progress  Number of localities electrified in the project area  From 18 in 2009 to 30 in 2017  Number of cases of load shedding and outages  Duration of load shedding and outages  From 4015 in 2009 to less than 1000 in 2017  Technical loss reduction rate  From 3011 hours in 2009 to less than 1500 in  Commercial loss reduction rate 2017  Country’s electrification rate (Number of localities  From 42% in 2009 to less than 25% in 2017 electrified/Total number of localities)  From 42% in 2009 to less than 5% in 2017  Rural electrification rate  From 4% in 2009 to 7% in 2017  From 1% in 2009 to 3% in 2017

Table 2.8: Impact and Outcome Indicators in DRC DR Congo Impact Indicators Expected Progress at Project End  Electricity access rate  From 9% in 2009 to 21% en 2017  Electricity cost reduction rate  Costs will fall by at least 10% in 2017 Outcome Indicators Expected Progress in 2017  Number of localities electrified in the project  From 0 in 2009 to 6 in 2017 area  To less than 1000 in 2017  Number of power outages and cuts  To less than 1500 hours in 2017  Duration of power outages and cuts  To less than 25% in 2017  Technical loss reduction rate  To less than 5% in 2017  Commercial loss reduction rate  From 9% in 2009 to 16% in 2017  Country’s electrification rate  From 1% in 2009 to 3% in 2017  Rural electrification rate

3 PROJECT FEASIBILITY

3.1 Financial and Economic Performance

Table 3.1: Key Project Financial and Economic Indicators (Amounts in UA million) Financial Performance FIRR FNPV Baseline scenario 26.04% 101.1 A 5% increase in investment costs 21.56% 84.17 A 5% increase in operating costs 24.60% 91.47 A 10% increase in electricity 26.01% 100.89 tariffs in CAR A 10% reduction in the average 25.87% 99.71 electricity selling price in CAR Economic Performance EIRR ENPV Baseline scenario 45.36% 229.98 A 5% increase in investment costs 37.28% 213.48 A 5% increase in operating costs 44.01% 220.59 A 10% increase in electricity 47.29% 245.82 tariffs in CAR A 10% reduction in the average 44.72% 224.84 electricity selling price in CAR

3.1.1 Financial Performance: the project financial internal rate of return (FIRR) and the net present value were calculated based on costs and revenue related to the construction and operation of the project facilities. Project revenue is derived from additional sales of energy linked to consumption of new customers assessed at the 2010 average tariff. Project costs comprise investment costs net of price contingencies, annual operating and maintenance costs estimated at an average of 3% of the investment cost and the cost price of power supplied.

3.1.2 Economic Performance: the economic costs used in calculating the economic internal rate of return (EIRR) and the economic net present value (ENPV) are the investment costs, net of taxes and price escalation, adjusted by appropriate conversion factors for equipment, works, services and labour. Maintenance and other operating costs have been similarly adjusted. The project’s economic benefits are savings on fuel consumption due to the closure of the thermal plants as well as the reduction in technical and commercial losses. In addition to these benefits, the installation of additional capacity will result in savings on the trade balance (CAR), owing to the replacement of thermal power by hydro-power. In light of ENERCA’s current generating structure, this saving is estimated at about EUR 20 million per year, beginning from 2014, i.e. EUR 1.1 billion over a total operating period of 25 years, not considering the upward trend in oil prices.

3.1.3 Sensitivity: the sensitivity of the project’s financial performance was analysed in relation to: (i) a 5% increase in investment costs; (ii) a 5% increase in operating costs; (iii) a 10% increase in electricity rates in CAR; and (iv) a 10% drop in the average selling price of CAR electricity. The sensitivity of the project’s economic performance was analysed in relation to: (i) a 5% increase in investment costs; (ii) a 5% increase in operating costs; (iii) a 10% increase in electricity rates in CAR; and (iv) a 10% drop in the average selling price of CAR electricity. This analysis shows that the project’s internal economic and financial rates of return and net present value, although sensitive to changes in these different factors, remain at acceptable levels and above the weighted average cost of capital and the opportunity cost of capital in all the cases considered, as shown in Table 3.1 above, thus confirming its financial and economic viability.

3.2 Environmental and Social Impacts

3.2.1 Environment: on 24 April 2011, the project was classified under Environmental Category 2. From the environmental standpoint, Phase 1 of the project includes works to rehabilitate and strengthen the generating capacity and rehabilitate the former HV lines. Since works will be implemented within the generating sites or on land pre-prepared for that purpose, they will only have environmental and social impacts that are specific to the project sites as presented in paragraphs B.8.3 of the Technical Annexes. Regarding the construction of the 7 km of HV line between Boali 3 and Boali 2 and the 30 km of the Bangui loop, these will not have a significant impact on the environment since the areas crossed have become savannah due to extremely intensive forest clearing. The ESMP summary was posted on the Bank’s website on 16 November 2011.

3.2.2 The most significant negative impacts of the project during the works’ phase relate to the establishment of the workers’ camp (waste water and ordinary household waste) and the generation of solid waste (excavated materials, scrap iron, dirty rags and barrels contaminated by chemical products, etc.) and used lubricants, all during the works implementation phase. The contractor shall take every measure to prevent erosion, restore topsoil after filling trenches and completing the concrete base work on the poles and pylons, level the access roads to the improved or rehabilitated lines after the works, strip polluted top soil and ensure the disposal of such waste at the proper sites. The contractor shall also take care not to discharge polluting effluents on the soil or into rivers, and to organize the cleaning up of the work sites. In addition, the mitigation measures will involve choosing works itineraries away from parks and reserves, avoiding forest areas and minimizing the works rights-of-way as much as possible. ENERCA and SNEL will be responsible for proper implementation of all ESMP-related activities on their respective territories.

3.2.3 Climate Change: the project comprises many energy efficiency measures which will help to: reduce line losses (rehabilitation of distribution and transmission grids: switchover from 63 to 110kv); and (ii) increase electricity production without increasing the reservoir capacity (rehabilitation of hydro-power plants). These measures will contribute to increasing the quantity of renewable energy and reducing self-generation by individuals and ENERCA’s thermal generation.

Combined with the rehabilitation of power plants (to reduce specific consumption) which are indispensable elements of the energy mix, they will help to mitigate climate change through the reduction of greenhouse gas emissions.

3.2.4 Equipping the Boali 3 power plant to increase generating capacity by 10 MW will ensure availability of more renewable energy and reduce the use of thermal power plants to cover the generation deficit. Generation from the Boali 3 dam which has been used only as a regulating dam since its construction in 1992 is an exemplary adaptation measure. The project is designed to tap the available hydro-power potential of River M’Bali to the maximum. Power generation is increased from the same reservoir with very little decay of plant matter in the reservoir. The project will hardly emit GHG, given the age of the reservoir (more than 20 years).

3.2.5 Gender: in the project area in CAR and DRC, there are marked gender disparities in terms of income-generating activities. Many constraints and socio-cultural obstacles continue to impede women’s participation in economic activities and limit the optimization of their savoir faire and skills. The project will have a very small negative impact on gender. In rural areas, the recruitment of labour to clear the route would concern the men or youth. This would omit part of the labour pool available for agriculture and increase the chores of women, who would have to carry out most of the agricultural and domestic tasks alone.

3.2.6 In contrast, the expected positive impact on gender will be enormous. Electrification, while facilitating the supply of stable energy to the population, will be especially beneficial to women and children who will be relieved of the chore of gathering fuel wood especially for lighting. The purchase of household appliances will facilitate the domestic duties of women and girls, and improve the living environment of households. The freed-up time will enable them to develop new lucrative activities, and access formal and literacy education. The electrification of villages and households will have an impact on school performance due to improved lighting for studies; it will also improve girls’ access to schooling and to NICTs, as well as the functioning of basic social services and the promotion of micro-businesses initiated by women. Women’s access to sources of information through the media will emancipate them and encourage them to acquire production assets to build up their financial resources.

3.2.7 Social: The project could have some negative effects on the populations concerned and the availability of energy may lead to an increase in noise pollution in the villages and neighbourhoods. The process of social and cultural exchanges between Bangui City and the Zongo border post could step up, with the risk of acculturation as a result of the intercultural influences. However, these negative impacts will be very rapidly mitigated by the project’s positive effects that will contribute to poverty reduction and promote economic and social activities. The project’s expected positive impacts far outweigh its negative consequences. Obviously, electricity is a factor of production, the availability and quality of which can boost the productive sector, improve economic growth and consequently create decent jobs for the poor and disadvantaged segments of the population. Industrial development is only possible with the availability of energy sources. Small generating, transmission and service units could spring up in villages, helping to reduce the unemployment rate in the project area. The sources of energy will facilitate IEC activities through the use of equipment for the projection of educational films to raise awareness on communicable diseases and reproductive health and for sexual education of young people and information on major endemic diseases. The electrification of villages will undoubtedly reverse rural-urban migration, as it is expected that young people who acquire know-how will return to the land. Consequently, labour will become more readily available for agricultural activities and the local economy.

3.2.8 The project will help to develop handicrafts and transform the economic landscape in the target area. The electrification of neighbourhoods and lighting of public thoroughfares will improve security conditions for the population and consequently bring down crime and delinquency rates in

the towns and villages. The project will foster major changes in the social indicators in the localities concerned and consequently contribute to the achievement of the MDGs. About 3,000 rural households are concerned by rural and peri-urban electrification in CAR, and 2,000 households in Zongo (Phase 1) in DRC. The cost of sensitizing the population to the risks of accidents during the works phase of the project components and the participatory approach-related expenditures are estimated overall at CFAF 14,000,000, i.e. about UA 18,500.

3.2.9 Involuntary Resettlement: the components under Phase 1 of the project financed by the Bank do not entail any involuntary resettlement measures. However, the construction, on Chinese Cooperation financing, of the 110 kV transmission lines for 7 km between Boali 1 and Boali 2,as well for 30 km to circumvent Bangui, will entail eviction and expropriation measures. Although the route defined is based on the least social cost incurred in terms of the shorter and least costly option, it will run through highly urbanized areas on the outskirts of the town. An Inter-ministerial Committee has been tasked with identifying and assessing adequate indemnification and compensation for land, private property and goods affected by the project. This Committee has already drawn up a list of names of persons (both genders) and the amounts owed. Under the contract signed with the Chinese company, the cost of the environmental and social impact mitigation measures will be borne by CAR. The Central African Government has already included CFAF 500 million in the 2012 budget in respect of project-related indemnification and compensation. It shall provide the Bank with evidence of a cohesive mechanism for compensating displaced persons and resources secured for that purpose. Furthermore, the Government shall undertake to inform the Bank, as the works progress, of the status and outcome of the indemnification of persons affected by the construction of the Chinese cooperation-financed 110 kV transmission lines over lengths of 7 km between Boali 1 and Boali 2, as well as 30 km bypassing Bangui.

4 PROJECT IMPLEMENTATION

4.1 Implementation Arrangements

4.1.1 The CAR and DRC Ministries of Energy will be the project executing agencies. They will establish a Joint Steering Committee (JSC), including the Central Africa Power Pool (CAPP). The JSC will have a decision-making role. It will ensure compliance with project objectives and implementation conditions, and be responsible for: (i) issuing strategic guidelines and directions to the national project implementation units; (ii) approving the annual work plan and budget as well as the periodic activity reports; and (iii) evaluating the performance of the project implementation units. CAPP will act as the secretariat for the JSC. Project implementation will be entrusted to ENERCA and SNEL. Both companies have financial deficits and cash flow situations marked by the use of costly bank overdrafts and adversely affected by the cumulative debts of the central government and para-statals, as well as weak management and internal control capacity. ENERCA and SNEL will set up autonomous Project Implementation Units (PIUs) within their structures and run by their staff, including: a project Coordinator, one substation engineer, one network engineer, one civil engineer, an environmentalist, a procurement expert, a financial and administrative officer and an accountant. In the case of ENERCA, the CVs of the said personnel will receive the Bank’s prior approval based on their qualifications and experience in the required areas of expertise. In the case of SNEL, the implementation unit of the on-going Rural Electrification Project approved in October 2010 will be strengthened to enable it to monitor this project as well. These arrangements will ensure joint implementation of the project, which will rely more on the sector capacities in both countries.

4.1.2 A consulting firm will be recruited to control and supervise works. It will assist the PIUs in the procurement of goods, services and works. Furthermore, there are plans to recruit technical assistance under the project, to strengthen the ENERCA implementation unit during the project

implementation period and provide the PIU with adequate accounting and financial management resources. The technical assistance agency will assign experts to ENERCA, who will back up its technical, commercial, accounting, financial, environmental, logistics and supply management capacities.

4.1.3 Procurement: procurements related to all activities financed by the Bank will be made in accordance with Bank Rules of Procedure for the Procurement of Goods and Works or Bank Rules of Procedure for the Use of Consultants, as the case may be, using the appropriate Bank standard bidding documents. In CAR, the public procurement reform carried out by the Government led to the adoption of Law No. 08.917 of 6 June 2008 on the Public Procurement Code. The main management and regulatory organs provided for under this Code have already been established, with the support of the World Bank and the Bank under the Economic and Financial Management Capacity Building Support Project (PARGEF). However, these bodies do not have adequate technical and human resources to fully perform their duties. The two power utilities will, through the PIUs be responsible for procurement. The project implementation unit personnel will receive training in the Bank’s Rules and Procedures for the Procurement of Goods, Works and Services. Each procurement unit will have a procurement expert and keep the project’s financial status up to date. The procurement plan is attached as Technical Annex C. 15.

4.1.4 Financial Management: an assessment of the financial management capacities of ENERCA and SNEL was carried out, as well as an analysis of the fiduciary risks inherent in their management and control environment, with a view to proposing adequate measures to ensure efficient and effective use of the ADF grant resources awarded for the project. The assessment was conducted within the context of co-financing with other donors. This assessment shows that the public financial management and control environments in DRC and CAR continue to present significant fiduciary risks in terms of administrative/judicial controls, and central government budgetary, accounting and cash-flow management (refer to details in Annex B4).

4.1.5 The recommended financial management mechanisms for the project will operate within ENERCA and SNEL’s administrative, financial and accounting control and management systems. A capacity building plan will be prepared for each utility. In the case of ENERCA, a technical assistance firm will be selected following competitive bidding. It will provide ENERCA with two experts who will work under the supervision of the DSFC Director to transfer knowledge to the personnel. One will provide expertise for the project’s budgetary, financial and accounting management tasks and activities, and the other will see to the smooth administrative management of ENERCA’s fixed assets and stocks. The DSFC Procedures Handbook will be updated to include procedures for the administrative management of fixed assets and stock, and will contain specific procedures for project financial and accounting management. DSFC personnel will be trained on Bank procedures. A budgetary, financial and accounting management software package will be purchased and configured to meet the project and DSFC requirements.

4.1.6 The Management Control Directorate, the Internal Auditor and the Human Resources Directorate will form part of the DSFC internal control mechanism, ensuring and encouraging good practice in budgetary control, application of procedures and staff performance evaluation. To enable them to fulfil these tasks and activities, they will be provided with software, formalized procedures and training opportunities for their personnel. In the case of SNEL, the existing software will be configured to meet project requirements and the procedures handbook will be updated to take into account specific project procedures. The Organization and Control Department will form part of the SNEL internal control mechanism. Project supervision will include an off-site review of audit, financial monitoring or the internal audit reports, as well as an on-site review scheduled bi-yearly, given the high level of overall fiduciary risk attached to the present ex ante control.

4.1.7 Disbursements: grant resources will be disbursed in compliance with the Bank’s rules and procedures. The three disbursement methods will be used: (i) direct payment method for contracts for works, goods and services signed with contractors, suppliers and service providers; (ii) the reimbursement method to be used for expenditure eligible on the grants, effected by ENERCA and SNEL from their own resources; and (iii) the special account or revolving fund method – to cover operating, training and field mission expenditure and costs, etc. The funds will be disbursed by the Bank in the form of advances into a special account in the name of the project.

4.1.8 Audit Arrangements: an external auditor acceptable to the Bank will be recruited to conduct the annual external audit of project accounts in accordance with the Bank’s TOR. The report will be submitted to the Bank latest six months following the end of each financial year under review. For the first project audit, the auditor could produce a single audit report covering the first 18(eighteen) months, provided that the disbursement is made between July and December of the year of effectiveness. The Bank will also request the different reports of the external auditor on ENERCA accounts for the same period. The same modalities will be maintained for SNEL because, in addition to the reports on the annual project accounts audit, the Bank will receive SNEL audit reports.

4.1.9 Institutional Arrangements: the infrastructure set up under the project will be owned by CAR and DRC as per the investments made on each national territory. These installations will be operated and managed on behalf of the States by the two national electric power utilities, ENERCA and SNEL. A Memorandum of Understanding for implementing the project has been signed between the two countries under the CAPP cross-border electrification project. The institutional support planned under the project, which includes the training programme and the strengthening of the operating and management capacity for the facilities, will guarantee the performance of sector operations officers.

4.2 Project Monitoring

4.2.1 The main project implementation stages are presented in Table 4.1 below

Table 4. 1 Main Project Implementation Stages Duration Stages Monitoring Activities/Feedback Loop Approval of Grants 90 days Approval and Effectiveness General Information Note

Signature and Effectiveness of Grant Agreements

ADB Launching Mission Fulfilment of Conditions Precedent to First 90 days Information Note on the Status of Fulfilment of Conditions Precedent to First Disbursement Disbursement

Recruitment of a Consulting Preparation of Bidding Documents 150 days Engineering Firm Bidding and Contract Award Consulting Engineering Support to Project Implementation Unit for Works Control and Supervision, and Preparation of 950 days Services the Power Transmission Grid Master Plan Preparation of Bidding Documents 150 days Recruitment of Contractors Launching of Bidding and Contract Award Implementation of Supply and Works Contracts Preparation of Periodic Project Status Reports Project Physical 610 days Bank Supervision Missions Implementation Project Environmental and Social Monitoring Bank Mid-Term Review Recruitment of the Auditor 120 days Audit of Project Accounts Conduct of Annual Audits Borrower’s Project Completion Report 70 days Project Completion Bank’s Project Completion Report

4.2.2 Donor Meetings: the project also provides for six-monthly donor consultation and coordination meetings to ensure the successful orientation and achievement of all project objectives as well as the sound implementation of all provisions towards efficient project implementation.

4.3 Governance

4.3.1 The governance risk in project implementation usually arises in relation to goods, works and services procurement and project financial execution. This risk is mitigated by the fact that the Bank will ensure the strict enforcement of the applicable rules of procedure. In addition, Bank supervision missions to be regularly carried out by experts from the Bank’s Headquarters and from its Field Offices and technical/financial audits will ensure conformity and consistency between the specifications, the services provided, the works actually executed, the disbursements and the grant agreement. The involvement of the Ministries of Finance, Energy and Portfolio of both countries in aid coordination and project management constitutes a further guarantee of good governance.

4.3.2 In CAR, in addition to diagnostic studies, PEFA 2010 and ROSC A&A 2010, a self- assessment of public finance management was carried out through the strategy paper as evidenced by the CAR Public Finance Management Reform Programme. The computerization of the expenditure chain through introduction of the new accounting software “GES’CO” is underway. Reporting (commitment basis) and preparation of management accounts are effective since 2008. The Organic Public Finance Law (LOFIP) and General Public Accounting Regulations (RGCP) are in place. New accounting management tools are already being used: the new budget nomenclature and the new accounting plan compliant with OHADA standards. A public investment programming, management, monitoring and evaluation manual has been adopted. In DRC, the socio-political situation in the 90s - marked by the withdrawal of the main partners - partly explains the current state of the country’s power infrastructure. This led to the suspension of private project funding and investments in the country. From 2010, promising signs of an improvement in the business climate and the economy in general have been emerging. These concern: (i) the February 2010 promulgation of the law authorizing ratification of the Treaty of the Organization for the Harmonization of Business Law in Africa (OHADA); and (ii) the USD 12.3 billion debt relief for DRC, comprising USD 11.1 billion under the HIPC Initiative and USD 1.2 billion under the Multilateral Debt Relief Initiative.

4.4 Sustainability

4.4.1 Project sustainability will depend, among other aspects, on the degree of ownership of, and interest shown in the project and its objectives by the two Governments. ENERCA and SNEC both have qualified and skilled staff that will be strengthened by a consulting engineering firm, to ensure quality control and compliance of the infrastructure set up under the project with the standards established. The project mid-term review in 2013 will confirm the implementation of investments and indicate any need for corrective measures. Project sustainability will depend on ENERCA’s and SNEL’s capacity to operate and manage hydro-power dams and transmission and distribution lines as well as maintain the structures.

4.4.2 Based on ENERCA’s and SNEL’s experience, it is estimated that annual maintenance of project structures will account for about 3% of the investment amount, i.e. UA 3 million for both countries. This level of expenditure does not pose any major risks of financial resource constraints provided electricity bills are regularly paid. The instructions as well as the operating rules and the procedures in force to renew some components will guarantee the sustainability of investments and control of the related recurrent costs. Capacity building is required for project financial and accounting management at both national companies. The Bank will ensure that the two companies have the necessary technical and financial capacity to ensure project sustainability as well as adequate technical and human capacity to operate and maintain project structures. Summaries of ENERCA’s and SNEL’s performances in 2009 are presented in paragraphs C.4 of the Technical Annexes.

4.4.3 Pricing is an important element in project sustainability. Both countries have a tariff scale distinguishing between the various categories of customers. The main objective of this provision is to protect the most vulnerable segments of the population and ensure recovery of generating costs by the power utilities. In CAR, the Energy Regulatory Agency is currently conducting a tariff study to define and submit to the Government new bases for defining CAR’s pricing policy. Concerning DRC, a regulatory agency has not yet been established but a social block has been introduced.

4.5 Risk Management

Project implementation could be confronted with the following risks, for which mitigation measures have been identified:

4.5.1 Risk related to procurement: this risk, of an average level, is the risk of choosing service providers that are technically or financially incapable of implementing the various project components. It will be mitigated by the type of competitive bidding, which will include prequalification and requirements in terms of financial and technical references.

4.5.2 Risk related to the weak capacity of Executing Agencies: this risk, of an average level, relates to poor operational performance of SNEL and ENERCA. This risk is mitigated by the fact that ENERCA and SNEL have solid experience in building this type of structure. Furthermore, a consulting firm will be recruited to assist them and strengthen their capacity.

4.5.3 Financial risk: this is a risk related to the two preceding risks. Long delays due to works defects or weak capacity could result in supplementary costs for some components. Mitigation of the risk related to procurement and that related to the capacity of Executing Agencies will have a positive impact on this risk.

4.5.4 Environmental and social risk: this is associated with related structures, d which need to be taken into account. It is the risk of failing to correctly compensate the population affected by the building of non-Bank-funded facilities to which those financed by the Bank are however connected. This risk, of an average level, will be mitigated by: (i) Government’s undertaking to pay all compensation; surveys have already been conducted to that end; and (ii) Government’s commitment to inform the Bank, as the works progress, of the status and outcome of compensation of persons affected by works concerning these related facilities.

4.6 Knowledge Building

4.6.1 The project comprises aspects that provide opportunities for the Bank, ENERCA and SNEL to generate practical knowledge for their future activities. During project implementation, the Bank’s project team will benefit from experience, through workshops, study validation seminars and site meetings that could be tapped into to resolve major technical problems as well as through the use of the results of the IEC and ECC campaigns. These results will enable the Bank to determine the level of ownership of such projects by the beneficiaries. More importantly, they will serve as a basis for designing similar projects that the Bank could initiate in other countries.

4.6.2 The staff of ENERCA and SNEL will benefit from a technological update through specific training in recent technical generating equipment to be purchased by the project. In addition, the technical staff will be involved in the various project implementation phases to enable them to acquire new knowledge. The contractors’ contracts will include a “training” component and provisions concerning the preparation of manuals and operation instructions for the use of technical staff. Periodic reports will help monitor project outputs and outcomes.

5. LEGAL FRAMEWORK

5.1 Legal Instrument

5.1.1 To finance this project, the Bank will award grants to the main beneficiaries, namely the Central African Republic and the Democratic Republic of Congo.

5.2 Conditions for Bank Intervention

(A) Conditions Precedent to Effectiveness

5.2.1 Effectiveness of the ADF Grant Agreements for the Central African Republic and the Democratic Republic of Congo shall be subject to their signature.

(B) Conditions Precedent to First Disbursements

5.2.2 In addition to effectiveness of the Grant Agreements, the first disbursement of each Grant shall be subject to fulfilment of the following conditions by the respective Donees, to the Fund’s satisfaction:

(i) Provide the Fund with evidence of establishing the Project Implementation Unit (PIU) within ENERCA, comprising: one coordinator (an electromechanical engineer), one transformer engineer, one network engineer, one civil engineer, one environmentalist, one procurement expert, one administrative and financial officer and one accountant, whose qualifications and experience will be submitted to the Fund for prior approval;

(ii) Provide the Fund with the original or a certified true copy of the attestation showing that a special account has been opened for the project in a bank deemed acceptable to the Fund to receive the grant resources;

(iii) Provide evidence of the on-lending of the Grant under the same conditions as those accorded by the Fund; and

(iv) Provide the Fund with the Energy Exchange Agreement signed between CAR and DRC.

Concerning CAR, the Donee shall undertake to:

5.2.3 To the Fund’s satisfaction:

(i) implement the Environmental and Social Management Plan in accordance with the Fund’s applicable policies and guidelines;

(iv) inform the Fund, as the works progress, of the status and outcome of the indemnification of persons affected by the construction of the 7 km of 110 kV transmission line between Boali 1 and Boali 2 as well as the 30 km of the same line required to bypass Bangui, financed by Chinese Cooperation; and

(iii) clear its cumulative arrears and regularly pay to ENERCA fees due for electricity consumption by government departments, municipalities and public enterprises.

6. RECOMMENDATION

6.1.1 Management recommends that the Boards of Directors approve the proposal for an ADF Grant of UA 29.73 million to the Central African Republic, and an ADF Grant of UA 5.55 million to the Democratic Republic of Congo to finance Phase 1 of the Project to Interconnect the Power Grids of the Central African Republic and the Democratic Republic of Congo from the Boali Hydro-Power System.

Annex I Page 1/1 CAR Comparative Socio-Economic Indicators

Central African Republic COMPARATIVE SOCIO-ECONOMIC INDICATORS

Central Develo- Develo- Year African Africa ping ped Republic Countrie Countrie Basic Indicators GNI per capita US $ Area ( '000 Km²) 623 30 323 80 976 54 658 Total Population (millions) 2010 4.5 1,031.5 5,659 1,117 1800 1600 Urban Population (% of Total) 2010 38.9 39.9 45.1 77.3 1400 Population Density (per Km²) 2010 7.2 34.0 69.9 20.4 1200 1000 GNI per Capita (US $) 2009 450 1 525 2 968 37 990 800 Labor Force Participation - Total (%) 2010 47.2 40.1 61.8 60.7 600 400 Labor Force Participation - Female (%) 2010 46.6 41.0 49.1 52.2 200

Gender -Related Dev elopment Index Value 0

2004 2007 2003 2005 2006 2008 2009 2007 0.354 0.433 0.694 0.911 2002 Human Dev elop. Index (Rank among 169 countries) 2010 159 n.a n.a n.a Popul. Liv ing Below $ 1 a Day (% of Population) 2008 62.8 42.3 25.2 … Central African Republic Demographic Indicators Population Grow th Rate - Total (%) 2010 1.9 2.3 1.3 0.6 Population Grow th Rate - Urban (%) 2010 2.4 3.4 2.4 1.0 Population < 15 y ears (%) 2010 40.3 40.3 29.0 17.5 Population >= 65 y ears (%) 2010 4.4 3.8 6.0 15.4 Population Growth Rate (%) Dependency Ratio (%) 2010 79.3 77.6 55.4 49.2 2.5 Sex Ratio (per 100 female) 2010 96.6 99.5 93.5 94.8 2.0 Female Population 15-49 y ears (% of total population) 2010 24.4 24.4 49.4 50.6 Life Ex pectancy at Birth - Total (y ears) 2010 47.7 56.0 67.1 79.8 1.5 Life Ex pectancy at Birth - Female (y ears) 2010 49.2 57.1 69.1 82.7 1.0 Crude Birth Rate (per 1,000) 2010 34.4 34.2 21.4 11.8 0.5

0.0

2003 2007 2005 2006 2008 2009 Crude Death Rate (per 1,000) 2010 16.4 12.6 8.2 8.4 2004 Infant Mortality Rate (per 1,000) 2010 101.4 78.6 46.9 5.8 Child Mortality Rate (per 1,000) 2010 172.2 127.2 66.5 6.9 Central African Republic Total Fertility Rate (per w oman) 2010 4.6 4.4 2.7 1.7 Africa Maternal Mortality Rate (per 100,000) 2008 850.0 530.2 290.0 15.2 Women Using Contraception (%) 2006 19.1 … 61.0 …

Health & Nutrition Indicators Phy sicians (per 100,000 people) 2004-09 8.0 58.3 109.5 286.0 Life Expectancy at Birth Nurses (per 100,000 people)* 2004-09 22.5 113.3 204.0 786.5 (years) Births attended by Trained Health Personnel (%) 2006 53.4 50.2 64.1 … Access to Safe Water (% of Population) 2008 67.0 64.5 84.3 99.6 71 61 Access to Health Serv ices (% of Population) 2005-07 … 65.4 80.0 100.0 51 Access to Sanitation (% of Population) 2008 34.0 41.0 53.6 99.5 41 31 Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2007 6.3 4.9 0.9 0.3 21 Incidence of Tuberculosis (per 100,000) 2009 327.0 294.9 161.0 14.0 11

2003 2004 2007 2006 2008 2009 Child Immunization Against Tuberculosis (%) 2009 87.0 79.9 81.0 95.1 2005 Child Immunization Against Measles (%) 2009 94.0 71.1 80.7 93.0 Underw eight Children (% of children under 5 y ears) 2005-08 … 30.9 22.4 … Central African Republic Daily Calorie Supply per Capita 2007 1 986 2 465 2 675 3 285 Africa Public Ex penditure on Health (as % of GDP) 2008 4.4 5.7 2.9 7.4

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2009 88.6 102.7 107.2 101.3 Infant Mortality Rate Primary School - Female 2009 73.6 99.0 109.2 101.1 ( Per 1000 ) Secondary School - Total 2009 13.6 37.8 62.9 100.1 Secondary School - Female 2009 9.8 33.8 61.3 99.6 120 Primary School Female Teaching Staff (% of Total) 2009 14.2 47.0 60.5 81.4 100 80 Adult literacy Rate - Total (%) 2008 54.6 64.8 80.3 98.4 60 Adult literacy Rate - Male (%) 2008 68.8 74.0 86.0 98.7 40 Adult literacy Rate - Female (%) 2008 41.1 55.9 74.8 98.1 20

2004 2005 2006 2007 2008 2009 Percentage of GDP Spent on Education 2008 1.3 4.6 3.8 5.0 2003

Environmental Indicators Land Use (Arable Land as % of Total Land Area) 2008 3.1 7.8 10.6 10.9 Central African Republic Africa Annual Rate of Deforestation (%) 2005-09 … 0.7 0.4 -0.2 Annual Rate of Reforestation (%) 2005-09 … 10.9 … … Per Capita CO2 Emissions (metric tons) 2009 0.1 1.1 2.9 12.5

Sources : ADB Statistics Department Databases; World Bank: World Development Indicators; last update : May 2011 UNAIDS; UNSD; WHO, UNICEF, WRI, UNDP; Country Reports. Note : n.a. : Not Applicable ; … : Data Not Available.

Annex II Page 1/1

DR Congo Comparative Socio-Economic Indicators

Congo (DRC) COMPARATIVE SOCIO-ECONOMIC INDICATORS

Develo- Develo- Congo Year Africa ping ped (DRC) Countrie Countrie Basic Indicators GNI per capita US $ Area ( '000 Km²) 2 345 30 323 80 976 54 658 Total Population (millions) 2010 67.8 1,031.5 5,659 1,117 1800 1600 Urban Population (% of Total) 2010 35.2 39.9 45.1 77.3 1400 Population Density (per Km²) 2010 28.9 34.0 69.9 20.4 1200 1000 GNI per Capita (US $) 2009 160 1 525 2 968 37 990 800 Labor Force Participation - Total (%) 2010 38.0 40.1 61.8 60.7 600 400 Labor Force Participation - Female (%) 2010 40.7 41.0 49.1 52.2 200

Gender -Related Dev elopment Index Value 0

2004 2007 2003 2005 2006 2008 2009 2007 0.370 0.433 0.694 0.911 2002 Human Dev elop. Index (Rank among 169 countries) 2010 168 n.a n.a n.a Popul. Liv ing Below $ 1 a Day (% of Population) 2006 59.2 42.3 25.2 … Cong o (DR C) Africa Demographic Indicators Population Grow th Rate - Total (%) 2010 2.7 2.3 1.3 0.6 Population Grow th Rate - Urban (%) 2010 4.6 3.4 2.4 1.0 Population < 15 y ears (%) 2010 46.4 40.3 29.0 17.5 Population >= 65 y ears (%) 2010 2.9 3.8 6.0 15.4 Population Growth Rate (%) Dependency Ratio (%) 2010 96.2 77.6 55.4 49.2 3.5 Sex Ratio (per 100 female) 2010 98.3 99.5 93.5 94.8 3.0 Female Population 15-49 y ears (% of total population) 2010 22.6 24.4 49.4 50.6 2.5 Life Ex pectancy at Birth - Total (y ears) 2010 48.0 56.0 67.1 79.8 2.0 1.5 Life Ex pectancy at Birth - Female (y ears) 2010 49.6 57.1 69.1 82.7 1.0 Crude Birth Rate (per 1,000) 2010 43.7 34.2 21.4 11.8 0.5

0.0

2006 2004 2005 2007 2008 2009 Crude Death Rate (per 1,000) 2010 16.6 12.6 8.2 8.4 2003 Infant Mortality Rate (per 1,000) 2010 113.9 78.6 46.9 5.8 Child Mortality Rate (per 1,000) 2010 193.7 127.2 66.5 6.9 Total Fertility Rate (per w oman) 2010 5.8 4.4 2.7 1.7 Congo (DRC) Africa Maternal Mortality Rate (per 100,000) 2008 670.0 530.2 290.0 15.2 Women Using Contraception (%) 2005-08 … … 61.0 …

Health & Nutrition Indicators Phy sicians (per 100,000 people) 2004-09 11.0 58.3 109.5 286.0 Life Expectancy at Birth Nurses (per 100,000 people)* 2004-09 50.2 113.3 204.0 786.5 (years) Births attended by Trained Health Personnel (%) 2007 74.0 50.2 64.1 … Access to Safe Water (% of Population) 2008 46.0 64.5 84.3 99.6 71 61 Access to Health Serv ices (% of Population) 2005-07 … 65.4 80.0 100.0 51 Access to Sanitation (% of Population) 2008 23.0 41.0 53.6 99.5 41 31 Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 2005-09 3.2 4.9 0.9 0.3 21 Incidence of Tuberculosis (per 100,000) 2009 372.0 294.9 161.0 14.0 11

2004 2005 2006 2007 2008 2009 Child Immunization Against Tuberculosis (%) 2009 95.0 79.9 81.0 95.1 2003 Child Immunization Against Measles (%) 2009 86.0 71.1 80.7 93.0 Underw eight Children (% of children under 5 y ears) 2007 28.2 30.9 22.4 … Cong o (DR C) Daily Calorie Supply per Capita 2007 1 605 2 465 2 675 3 285 Africa Public Ex penditure on Health (as % of GDP) 2008 1.8 5.7 2.9 7.4

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2009 90.3 102.7 107.2 101.3 Infant Mortality Rate Primary School - Female 2009 83.0 99.0 109.2 101.1 ( Per 1000 ) Secondary School - Total 2009 36.7 37.8 62.9 100.1 Secondary School - Female 2009 26.2 33.8 61.3 99.6 140 120 Primary School Female Teaching Staff (% of Total) 2009 26.3 47.0 60.5 81.4 100 Adult literacy Rate - Total (%) 2008 66.6 64.8 80.3 98.4 80 60 Adult literacy Rate - Male (%) 2008 77.5 74.0 86.0 98.7 40 Adult literacy Rate - Female (%) 2008 56.1 55.9 74.8 98.1 20

2004 2005 2006 2007 2008 2009 Percentage of GDP Spent on Education 2005 … 4.6 3.8 5.0 2003

Environmental Indicators Land Use (Arable Land as % of Total Land Area) 2008 3.0 7.8 10.6 10.9 Cong o (DR C) Africa Annual Rate of Deforestation (%) 2005-09 … 0.7 0.4 -0.2 Annual Rate of Reforestation (%) 2005-09 … 10.9 … … Per Capita CO2 Emissions (metric tons) 2009 0.0 1.1 2.9 12.5

Annex III Page 1/2 Table of ADB Portfolio in the Two Countries

CAR

Bank Contributi App Sign on (UA M) Closi SEC- rova atur Effe First AD PROJECTS ng TORS l e ct. Disb. F FSF Date AWF Disb. Date Date GR GR GRANT Rate AN ANT T Multis Economic and ector Financial Management 31.0 25.0 25.0 05.0 31.12. 16.41 Capacity Building 1.20 2.20 2.20 7.20 4.00 0.50 2015 % Support Project 11 11 11 11 (PARGEF) Agricu Rural Infrastructure 17.1 21.1 21.1 05.0 31.12. 26.94 lt-ure Rehabilitation Support 2.20 2.20 2.20 7.20 3.85 2015 % Project (PARIR) 09 09 09 10 Social Project for Community 22.0 24.0 24.0 27.0 Development and 31.12. 17.34 7.20 7.20 7.20 5.20 8.00 Support to Vulnerable 2014 % 09 09 09 10 Groups (PDCAGV) Public Drinking Water Supply 03.1 10.1 10.1 21.0 Utilitie and Sanitation Project 31.12. 1.20 1.20 1.20 7.20 7.00 2.89 0.64% s (DWSS) in 3 2014 09 09 09 10 Prefectures Water Sector 02.0 31.0 31.0 30.0 Development 31.03. 36.51 7.20 8.20 8.20 4.20 1.71 Institutional Support 2012 % 09 09 09 10 Project (PAIDSE) Multin Transport and Transit ational Facilitation Programme 05.0 29.0 29.0 20.0 Transp on the Douala- 31.12. 27.8 30.00 7.20 2.20 2.20 1.20 t. N’Djamena and 2012 0 % 07 08 08 09 Douala-Bangui Corridors

Annex III Page 2/2 DRC

Amount Perform Statu Key Dates Project (UA) Disburseme ance s Sector Abbreviation Committe nt Rate Approval Project PI DO d Date Age 18 000 19/05/200 88.81% 7 years 000.00 4 2.5 PARSAR 1.86 non pp/ ppp 7 000 19/05/200 0 Agriculture 95.56% 7 years 000.00 4 and Rural 35 000 12/12/200 3.0 non pp/ non Development PRESAR 80.65% 6 years 2.57 000.00 5 0 ppp 6 790 17/11/200 2.0 PRODAP 30.89% 7 years 1.89 non pp/ppp 000.00 4 0 Nsele-Lufimi 52 450 19/12/200 3.0 non pp/ non 64.94% 6 years 2.36 ROADS 000.00 5 0 ppp 88 600 27/09/201 Air Security 0.00% 0.5 years no supervision 000.00 0 35 700 18/12/200 2.0 Infrastructure PMEDE 0.00% 4 years 1.15 pp 000.00 7 0 69 690 15/12/201 PEPR 0.00% 0.2 years no supervision 000.00 0 70 000 06/06/200 2.2 PEASU 32.67% 4 years 2.50 non pp/ ppp 000.00 7 5 20 000 17/03/200 40.41% 7 years non pp/ ppp PAPDDS/HE 000.00 4 2.0 2.31 ALTH 5 000 17/03/200 0 Social Sectors 53.65% 7 years non pp/ ppp 000.00 4 15 000 24/07/200 2.0 PARSEC 24.26% 4 years 2.00 000.00 7 0 20 000 19/01/201 Multisector PRM-RH 8.28% 0.1 years no supervision 000.00 1 443 230 Value in UA 28.43% 000.00 Total 4.6 years USD 691 438 28.43% Equivalent 800.00

Annex IV Page 1/1 Major Related Development Projects of the of the Two Countries

CAR

i) The PDCAGV has received parallel IDA financing for USD 8 million

ii) The Transport Facilitation and Transit Programme for the Douala-Bangui and Douala-Ndjamena Corridors is co-financed to the tune of UA 409 million by the ADF, the World Bank, the European Union and the French Development Agency

DRC

i) Project to Rehabilitate the Inga Hydro-Power Plants and the Kinshasa Distribution Network (PMEDE)

ii) South African Power Market Project (SAPMP)

iii) Nile Equatorial Lakes Subsidiary Actions Project (NELSAP)

iv) Ruzizi I Power Plant Rehabilitation Project (RUZIZI I)

v) Zongo II (Bas Congo) 150 MW

vi) Katende for 18 MW (West Kasai) for projected capacity of 36 MW to supply Kananga and Mbuji-Mayi towns, as well as the surrounding areas;

vii) Kakobola (Bandundu) 9 MW to supply Kikwit and Gungu towns, and the surrounding areas.

Annex V Page 1/1

Map of Project Area

The staff of the ADB Group has provided this map for the exclusive use of readers of this report to which it is appended. The appellations and the demarcations on this map do not imply any judgment on the part of the ADB Group and its members concerning either the legal status of a territory or the approval or acceptance of its boundaries.