Completion Report Armenia: Water Supply and Sanitation Sector Project
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Completion Report Project Numbers: 40296-013 and 45299-001 Loan Numbers: 2363 and 2860 September 2018 Armenia: Water Supply and Sanitation Sector Project This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011. CURRENCY EQUIVALENTS Currency unit – dram (AMD) L2363 At Appraisal At Project Completion (29 August 2007) (31 December 2012) AMD1.00 = $0.00297 $0.00248 $1.00 = AMD336.50 AMD403.58 L2860 At Appraisal At Project Completion (16 January 2012) (30 April 2017) AMD1.00 = $0.00257 $0.00206 $1.00 = AMD389.00 AMD484.68 ABBREVIATIONS ADB – Asian Development Bank AWSC – Armenia Water and Sewerage Company DMF – design and monitoring framework EIRR – economic internal rate of return EMP – environment management plan FIRR – financial internal rate of return GAP – gender action plan IEE – initial environmental examination ICB – international competitive bidding km – kilometers NCB – national competitive bidding O&M – operation and maintenance PCR – project completion report PCU – project coordination unit PGC – project governing council PMU – project management unit PPMS – project performance management system PPP – public–private partnership SAUR – Société d'Aménagement Urbain et Rural SCWE – State Committee for Water Economy SDR – special drawing right WACC – weighted average cost of capital WSPIU – Water Sector Project Implementation Unit WSS – water supply and sanitation NOTES (i) The fiscal year (FY) of the Government of Armenia and its agencies ends on 31 December. (ii) In this report, “$” refers to United States dollars. Vice-President Wencai Zhang, Operations 1 Director General Werner Liepach, Central and West Asia Department (CWRD) Director Yong Ye, Urban Development and Water Division, CWRD Team leader Cesar Llorens, Senior Urban Development Specialist, CWRD Team members Gohar Mousaelyan, Senior Project Officer, CWRD Anna Sargsyan, Project Analyst, CWRD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page BASIC DATA i I. PROJECT DESCRIPTION 1 II. DESIGN AND IMPLEMENTATION 1 A. Project Design and Formulation 1 B. Project Outputs 2 C. Project Costs and Financing 3 D. Disbursements 4 E. Project Schedule 4 F. Implementation Arrangements 5 G. Technical Assistance 5 H. Consultant Recruitment and Procurement 6 I. Gender Equity 7 J. Safeguards 7 K. Monitoring and Reporting 7 III. EVALUATION OF PERFORMANCE 8 A. Relevance 8 B. Effectiveness 9 C. Efficiency 10 D. Sustainability 10 E. Development Impact 12 F. Performance of the Borrower and the Executing Agency 13 G. Performance of the Asian Development Bank 13 H. Overall Assessment 14 IV. ISSUES, LESSONS, AND RECOMMENDATIONS 14 A. Issues and Lessons 14 B. Recommendations 15 APPENDIXES 1. Design and Monitoring Framework 16 2. Project Outputs 19 3. Project Cost at Appraisal and Actual 33 4. Project Cost by Financier 34 5. Contract Awards and Disbursement of ADB Loan Proceeds 36 6. Procurement Packages for ADB Financing 40 7. Implementation Schedule 46 8. Status of Compliance with Loan Covenants 48 9. Economic Reevaluation 67 10. Financial Reevaluation 70 11. Gender Action Plan 76 12. Contribution to the ADB Results Framework 83 BASIC DATA Original Loan L2363-ARM: Water Supply and Sanitation Sector Project A. Loan Identification 1. Country Armenia 2. Loan number and financing source 2363 (SF) 3. Project title Water Supply and Sanitation Sector Project 4. Borrower Armenia 5. Executing agency State Committee for Water Economy 6. Amount of loan SDR23,498,000 7. Project completion report number 1710 8. Financing modality Sector project loan B. Loan Data 1. Appraisal – Date started 13 April 2007 – Date completed 13 May 2007 2. Loan negotiations – Date started 6 September 2007 – Date completed 7 September 2007 3. Date of Board approval 31 October 2007 4. Date of loan agreement 18 December 2007 5. Date of loan effectiveness – In loan agreement 16 February 2008 – Actual 28 May 2008 – Number of extensions 2 6. Project completion date – Appraisal 31 December 2012 – Actual 31 December 2012 7. Loan closing date – In loan agreement 30 June 2013 – Actual 20 February 2013 – Number of extensions None 8. Financial closing date – Actual 20 February 2013 9. Terms of loan – Interest rate The original interest rate was 1.00% per annum during the grace period and 1.50% per annum thereafter. The original interest rate was revised by the amendment to Loan Amendment effective from 1 January 2017, with an interest rate of 2.93% per annum on the amount of the loan withdrawn from the loan account and outstanding. ii – Maturity (number of years) – Grace period (number of years) 32 8 10. Terms of relending (if any) The Borrower re-lent the proceeds of the Loan to the Armenia Water and Sewerage Company (AWSC) under a Subsidiary Loan Agreement upon the same terms and conditions. – Interest rate The terms for relending the proceeds of the Loan included (i) interest at the same rate as the interest applicable to the Loan; (ii) a repayment period, including a grace period, identical to that of the Loan; and (iii) the AWSC bearing the foreign exchange risk of such proceeds of the Loan relent thereto. – Maturity (number of years) 32 – Grace period (number of years) 8 – Second-step borrower AWSC 11. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 24 June 2008 8 November 2012 52.54 months Effective Date Actual Closing Date Time Interval 28 May 2008 20 February 2013 56.84 months b. Amount ($ million) Original Increased Cancelled Last Amount Undisbursed Allocation during during Revised Disbursed Balance (1) Implemen- Implemen Allocation (5) (6 = 4–5) tation -tation (4=1+2–3) Category (2) (3) Works 9.90 4.79 14.69 14.69 0.00 Equipment and Materials 16.70 0.93 17.63 17.63 0.00 Training 0.60 0.60 0.00 0.00 0.00 Consulting Services (4A Management, Design, and 3.20 0.30 2.90 2.90 0.00 Supervision and 4B Project Management) Interest Charge 1.20 0.40 0.80 0.80 0.00 Incremental Costs 0.29 0.29 0.29 0.00 Unallocated 4.40 4.40 0.00 Total 36.00 6.01 5.70 36.32 36.32 0.00 Note: Numbers may not sum precisely because of rounding. iii Loan L2860-ARM: Water Supply and Sanitation Sector Project – Additional Financing A. Loan Identification 1. Country Armenia 2. Loan number and financing source 2860 (SF) 3. Project title Water Supply and Sanitation Sector Project – Additional Financing 4. Borrower Armenia 5. Executing agency State Committee for Water Economy 6. Amount of loan SDR25,886,000 7. Project completion report number 8. Financing modality Sector project loan B. Loan Data 1. Appraisal – Date started 23 September 2011 – Date completed 28 September 2011 2. Loan negotiations – Date started 9 February 2012 – Date completed 21 February 2012 3. Date of Board approval 12 April 2012 4. Date of loan agreement 3 May 2012 5. Date of loan effectiveness – In loan agreement 2 June 2012 – Actual 14 September 2012 – Number of extensions 1 6. Project completion date – Appraisal 30 April 2017 – Actual 30 April 2017 7. Loan closing date – In loan agreement 31 October 2017 – Actual 31 October 2017 – Number of extensions None 8. Financial closing date – Actual 17 January 2018 9. Terms of loan – Interest rate The original interest rate was 1.00% per annum during the grace period and 1.50% per annum thereafter. The original interest rate was revised by Loan Amendment effective from 1 January 2017, with an interest rate of 2.31% per annum during the grace period and thereafter on the amount of the Loan withdrawn from the Loan Account and outstanding. – Maturity (number of years) – Grace period (number of years) 32 8 10. Terms of relending (if any) The Borrower re-lent the proceeds of the iv Loan to the AWSC under a Subsidiary Loan Agreement upon the same terms and conditions. After the termination of AWSC operations as of 31 December 2016, and the change to a lease contract with Veolia, the Borrower became fully responsible for the terms of the loan. – Interest rate The terms for relending the proceeds of the Loan included (i) interest at the same rate as the interest applicable to the Loan; (ii) a repayment period, including a grace period, identical to that of the Loan; and (iii) the AWSC bearing the foreign exchange risk of such proceeds of the Loan relent thereto. – Maturity (number of years) 32 – Grace period (number of years) 8 – Second-step borrower AWSC 11. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 22 October 2012 26 October 2016 48.16 months Effective Date Actual Closing Date Time Interval 14 September 2012 31 October 2017 61.58 months b. Amount ($ million) Category Increased Cancelled during during Last Original Implemen- Implemen Revised Amount Undisbursed Allocation tation -tation Allocation Disbursed Balance (1) (2) (3) (4=1+2–3) (5) (6 = 4–5) Works 30.00 1.00 31.00 31.00 0.00 Equipment and 2.00 0.90 2.90 2.90 0.00 Materials Consulting Services – 2.37 0.03 2.40 2.40 0.00 Management, Design, and Supervision Project Management 1.18 0.58 0.60 0.60 0.00 Interest Charge 1.10 0.20 0.90 0.90 0.00 Unallocated 3.35 3.35 0.00 0.00 0.00 Total 40.00 1.93 4.13 37.90 37.90 0.00 Note: Numbers may not sum precisely because of rounding. v C. Project Data 1. Project cost ($ million) Cost Appraisal Estimate Actual Foreign exchange cost Not applicable Not applicable Local currency cost Not applicable Not applicable Total 95.00 92.62 2.