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Document of The World Bank Report No: ICR2675 Public Disclosure Authorized IMPLEMENTATION COMPLETION AND RESULTS REPORT (TF-58084) Public Disclosure Authorized ON A GRANT IN THE AMOUNT OF US$ 5 MILLION TO THE LEBANESE REPUBLIC FOR THE EMERGENCY POWER SECTOR REFORM CAPACITY REINFORCEMENT PROJECT Public Disclosure Authorized June 20, 2013 Sustainable Development Department Middle East and North Africa Region Public Disclosure Authorized 1 CURRENCY EQUIVALENTS Exchange Rate Effective June 18, 2013 Currency Unit = Lebanese Pound 1.00 = US$ 0.000662 US$ 1.00 = 1,511.51 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy CDR Council for Development and Reconstruction DSP Distribution Service Provider DPL Development Policy Loan EdL Lebanese Power Company (“Electricité du Liban”) ESIA Economic and Social Impact Assessment FM Financial Management FSRU Floating Storage and Regasification Unit GoL Government of Lebanon HCP Higher Council for Privatization ISN Interim Strategy Note ISR Implementation and Status Report LNG Liquefied Natural Gas MMHLC Multi-Ministry Higher Level Committee MOEW Ministry of Energy and Water PDO Project Development Objective PPES Policy Paper for the Electricity Sector PRG Partial Risk Guarantee T&D Transmission and Distribution TFL Trust Fund for Lebanon WB World Bank Vice President: Inger Andersen Country Director: Ferid Belhaj Sector Manager: Charles Joseph Cormier Project Team Leader: Simon J. Stolp ICR Team Leader: Daniel Camos Daurella 2 LEBANESE REPUBLIC Emergency Power Sector Reform Capacity Reinforcement Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ................................................. 15 2. Key Factors Affecting Implementation and Outcomes ................................................ 19 3. Assessment of Outcomes .............................................................................................. 22 4. Assessment of Risk to Development Outcome ............................................................. 27 5. Assessment of Bank and Borrower Performance ......................................................... 28 6. Lessons Learned............................................................................................................ 30 7. Comments on Issues Raised by Borrower/Implementing Agencies ............................. 31 Annex 1. Project Costs and Financing .............................................................................. 32 Annex 2. Outputs by Component...................................................................................... 33 Annex 3. Summary of the Government of Lebanon 2010 Policy Paper for the Electricity Sector ................................................................................................................................ 39 Annex 4. Bank Lending and Implementation Support/Supervision Processes ................. 41 Annex 5. Summary of Borrower's ICR ............................................................................. 42 Annex 6. List of Supporting Documents .......................................................................... 44 Annex 7: Results Framework Indicators dropped at 2010 restructuring .......................... 45 MAP 3 A. Basic Information LB-EMERGENCY POWER SECTOR Country: Lebanon Project Name: REFORM CAPACITY REINFORCEMENT Project ID: P104774 L/C/TF Number(s): TF-58084 ICR Date: 04/02/2013 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: ERL Borrower: LEBANON (GRANT RECIPIENT) Original Total USD 5.00M Disbursed Amount: USD 5.00M Commitment: Revised Amount: USD 5.00M Environmental Category: C Implementing Agencies1: Council for Development & Reconstruction (CDR) Cofinanciers and Other External Partners: French Development Agency (AFD) B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 01/08/2007 Effectiveness: 08/07/2007 06/20/2009 Appraisal: 01/16/2007 Restructuring(s): 12/22/2009 12/29/2010 Approval: 03/19/2007 Mid-term Review: 08/04/2010 Closing: 06/30/2009 12/31/2012 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Substantial Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory 1 According to Article II of the Trust Fund for Lebanon Grant Agreement signed on May 7, 2007. However, three arms of the Government were highly involved in managing some of this project, but these entities will be considered to be “the Government” for the purposes of this document. These were: 1) the Ministry of Energy and Water; 2) the Higher Council for Privatization; and 3) Electricite du Liban. 4 C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry Yes None at any time (Yes/No): (QEA): Problem Project at any Quality of Yes None time (Yes/No): Supervision (QSA): DO rating before Moderately Closing/Inactive status: Satisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 50 50 Energy efficiency in Heat and Power 25 25 Transmission and Distribution of Electricity 25 25 Theme Code (as % of total Bank financing) Infrastructure services for private sector development 25 25 Other public sector governance 50 50 Regulation and competition policy 25 25 E. Bank Staff Positions At ICR At Approval Vice President: Inger Andersen Daniela Gressani Country Director: Ferid Belhaj Joseph P. Saba Sector Manager: Charles Joseph Cormier Jonathan D. Walters Project Team Leader: Simon J. Stolp Anna M. Bjerde ICR Team Leader: Daniel Camos Daurella ICR Primary Author: Daniel Camos Daurella 5 F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objective of the project is to accelerate the implementation of reforms and restructuring of EdL by enhancing the capacity of MOEW, EdL and the multi-ministry higher level committee. Revised Project Development Objectives (as approved by original approving authority) Below are the PDO and intermediate indicators of the post 2010 project restructuring, which were aimed at clarifying and making more measureable the original ones. The indicators dropped during the 2010 restructuring can be found in Annex 7. (a) PDO Indicator(s) Original Target Formally Values (from Revised Actual Value Achieved at Indicator Baseline Value approval Target Completion or Target Years documents) Values Indicator 1 : Roadmap for EdL restructuring/corporatization finalized and agreed across Government. The roadmap for EdL restructuring has been finalized. However, although a cross- Value ministerial committee was quantitative or 0% 100% established to oversee the Qualitative) planning, it is not clear that there was consensus neither amongst this comittee nor amongst wider government. Date achieved 12/29/2010 12/31/2012 12/31/2012 Comments (incl. % Partially achieved. achievement) Final decision to proceed with development of alternate fuel supply (LNG) in the context Indicator 2 : of a broad fuel supply strategy. Value The decision has been taken to quantitative or 0% 100% proceed with LNG terminal, Qualitative) and procurement has started. Date achieved 12/29/2010 12/31/2012 12/31/2012 Comments (incl. % Achieved. achievement) 6 Original Target Formally Values (from Revised Actual Value Achieved at Indicator Baseline Value approval Target Completion or Target Years documents) Values Progress in implementation of policy directions outlined in the Government of Lebanon's Indicator 3 : Policy Paper for the Electricity Sector (PPES). Broad and significant progress has been made on Value implementation of the PPES quantitative or 0% 100% (e.g. distribution service Qualitative) providers or rehabilitation and tendering of new generation). Date achieved 12/29/2010 12/31/2012 12/31/2012 Comments (incl. % Achieved. achievement) Indicator 4 : Planning finalized for EdL to be restructured. Value The steps to be followed for quantitative or No complete planning. Planning finalized EdL restructuring have been Qualitative) developed. Date achieved 12/29/2010 12/31/2012 12/31/2012 Comments (incl. % Achieved. achievement) (b) Intermediate Outcome Indicator(s) Original Target Formally Actual Value Achieved Values (from Indicator Baseline Value Revised at Completion or Target approval Target Values Years documents) Indicator 1 : Fuel source strategy formulated and approved. Fuel strategy prepared and used to determine the Fuel source Value type of fuel and strategy (quantitative No fuel strategy. generation mix of formulated and or Qualitative) generation projects under approved. development (including LNG development). Date achieved 03/19/2007 06/30/2009 12/31/2012 Comments (incl. % Achieved. achievement) 7 Original Target Formally Actual Value Achieved Values (from Indicator Baseline Value Revised at Completion or Target approval Target Values Years documents)