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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Report No: 3 1844-SL Public Disclosure Authorized PROJECT APPRAISAL DOCUMENT ON A PROPOSED IDA PARTIAL RISK GUARANTEE IN SUPPORT OF A LOAN IN AN AMOUNT OF UP TO US$38 MILLION IN PRINCIPAL GRANTED BY A COMMERCIAL BANK TO BUMBUNA HYDROELECTRIC COMPANY LIMITED AND Public Disclosure Authorized A PROPOSED IDA GRANT IN THE AMOUNT OF SDR8.3 MILLION (US$12.5 MILLION EQUIVALENT) TO THE REPUBLIC OF SIERRA LEONE FOR THE COMPLETION OF THE BUMBUNA HYDROELECTRIC PROJECT UNDER A PUBLIC-PFWATE PARTNERSHIP (“PPP”) Public Disclosure Authorized MAY 20,2005 Energy Group Project Finance and Guarantees InfrastructureDepartment InfrastructureEconomics and Finance Africa Region This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its content may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized CURRENCY EQUIVALENTS Exchange Rate Effective: April 30, 2005 Currency Unit = Leone (SLL) SLL2835 = US$1 US$1.51209 = SDR1 FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank BCA Bumbuna Conservation Area BHC Bumbuna Hydropower Company BHP Bumbuna Hydroelectric Project BOT Build-Operate-Transfer BWMA Bumbuna Watershed Management Authority BWMP Bumbuna Watershed Management Plan CAP Communication Action Plan CAS Country Assistance Strategy CDD Community-Driven Development CDM Clean Development Mechanism CFB Carbon Finance Business CFAA Country Financial Accountability Assessment cu Communication Unit DECSEC Decentralization Secretariat DGA Development Grant Agreement DP Development Partners DRP Dam Review Panel EA EnvironmentalAssessment EL4 EnvironmentalImpact Assessment EIRR Economic Internal Rate of Return EMF Electro-magneticField EMP EnvironmentalManagement Plan EO1 Expression ofInterest EPC Engineering/Procurement/Construction ERPA Emissions Reduction Purchase Agreement ESAP Environmentaland Social Advisory Panel ESKOM Electricity Company of South Africa FMR Financial Monitoring Report GDP Gross Domestic Product GoSL Government of Sierra Leone GWh Giga-watts per hour IBRD International Bank for Reconstruction and Development IDB Islamic Development Bank ICB International Competitive Bidding FOR OFFICZAL USE ONLY IDA International Development Association IDC Interest during construction IEC International Electrotechnical Commission IEC Information, Education and Communication ISA International Standards of Auditing ISWL Insulated Shield Wire Line IUCN International Union for Conservation of Nature and Natural Resources kV Kilovolt LAIR Livelihood Assessment and Income Restoration LAWCLA The Lawyers Centre for Legal Assistance M&E Monitoring and Evaluation MDGs Millennium Development Goals MFO Marine Fuel Oil MLGCD Ministry of Local Government and Community Development MOEP Ministry of Energy and Power MOU Memorandum of Understanding MVA Megavoltampere MW Megawatt NaCSA National Commission for Social Action NCP National Commission for Privatization NCRRR National Commission on Resettlement, Rehabilitation and Reconstruction NEPPCU National Energy Policy Planning and Coordinator Unit NGO Non-Governmental Organization NPA National Power Authority NPV Net Present Value O&M Operations and Maintenance OPBP Operational Policy/Bank Procedures (World Bank) OPEC Organization of Petroleum Exporting Countries PAP Project Affected Persons PDO Project Development Objective PIP Project Implementation Plan PIU Project Implementation Unit PPA Power Purchase Agreement PPIAF Public-Private Infrastructure Advisory Facility PPP Public Private Partnership PRG Partial Risk Guarantee PRSP Poverty Reduction Strategy Paper PWP Power and Water Project RAP Resettlement Action Plan RO Resettlement Officer ROW Right of Way RU Resettlement Unit SAP Stabilized Agriculture Program SLL Sierra Leone Leone (currency) SRBDA Seli River Basin Development Authority TA Technical Assistance TL PAP Transmission Line Project Affected Persons TOR Terms of Reference TSP Total Suspended Particulates This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. USCDI Upper Seli Community Development Initiative VRC Village Resettlement Committee Vice President: Gobind Nankani Country Managermirector: Mats Karlsson Sector Manager: Yusupha Crookes Task Team Leader: Dona1 O’Learv SIERRA LEONE COMPLETION OF THE BUMBUNA HYDROELECTRIC PROJECT CONTENTS Page A . STRATEGIC CONTEXT AND RATIONALE.................................................... 10 1. Country and Sector Issues ..................................................................................... 10 2 . Rationale for Bank Involvement ............................................................................ 12 3 . Higher Level Objectives to which the Project Contributes ................................... 12 B. PROJECT DESCRIPTION.................................................................................... 12 1. Instruments ............................................................................................................ 12 2 . Project Development Objective (PDO) and Key Indicators .................................. 13 3 . Project Components ............................................................................................... 13 4 . Lessons Learned and Reflected in the Project Design .......................................... 16 5 . Alternatives Considered and Reasons for Rejection ............................................. 17 C . IMPLEMENTATION............................................................................................. 18 1. Partnership Arrangements ..................................................................................... 18 2 . Institutional and Implementation Arrangements .................................................. -19 3 . Complementary Projects.,...................................................................................... 23 4 . Communication Program ....................................................................................... 24 5 . Monitoring and Evaluation of OutcomesResults ................................................. 25 6 . Sustainability ......................................................................................................... 25 7. Critical Risks and Possible Controversial Aspects ................................................ 27 8. Grant and Guarantee Conditions and Covenants ................................................... 29 9 . Main Features of the Proposed Financing P-ackage............................................... 31 10 . Project Cost Estimate ............................................................................................. 32 D. APPRAISAL SUMMARY ...................................................................................... 32 1. Economic and Financial Analyses ......................................................................... 32 2 . Fiduciary ................................................................................................................ 37 3 . Social ..................................................................................................................... 37 4 . Environment .......................................................................................................... 38 5 . Safeguard Policies ................................................................................................. 39 6 . Political and Other Risks ....................................................................................... 42 7 . Policy Exceptions and Readiness .......................................................................... 42 Annex 1: Country and Sector or Program Background.............................................. 44 Annex 2: Major Related Projects Financed by the Bank and/or Other Agencies ..... 48 Annex 3: Results Framework and Monitoring ............................................................. 51 Annex 4: Detailed Project Description .......................................................................... 55 Annex 5: Project Costs .................................................................................................... 64 Annex 6: Implementation Arrangements ...................................................................... 65 Annex 7: Bumbuna Communication Action Plan (Summary) ................................... 71 Annex 8: Financial Summary for Revenue Earning Project Entities. BHC. and the Project Company ............................................................................................................. 75 Annex 9: Salini Construttori. S.p.A.: Technical and Financial Capabilities ...........83 Annex 10: Project Implementation Schedule ............................................................... 84 Annex 11: Financial Management and Disbursement Arrangements ..................... 35 Annex 12: Contractual Arrangements ......................................................................... 91 Annex 13: Letter of Sector Policy ................................................................................ 92 Annex 14: Procurement Arrangements ......................................................................... 94 Annex 15: Economic and Financial Analysis .............................................................. 100 Annex 16. IDA Guarantee Structure .........................................................................
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