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Electricity Sector Strategy Note for South Sudan Electricity Sector Strategy Note April 1, 2013

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Electricity Sector Strategy Note for South Sudan Electricity Sector Strategy Note April 1, 2013 Report No: ACS3585 Republic of South Sudan Public Disclosure Authorized Electricity Sector Strategy Note for South Sudan Electricity Sector Strategy Note April 1, 2013 AFTG1 AFRICA Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Standard Disclaimer: This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Copyright Statement: The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development/ The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, http://www.copyright.com/. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail [email protected]. South Sudan ESSN 2 CURRENCY EQUIVALENTS Exchange Rate Effective Date: August 15, 2012 Currency Unit = South Sudanese Pound (SSP) SSP 2.68 = 1 United States Dollar (US$) US$ 1.567 = 1 Special Drawing Rights (SDR) FISCAL YEAR South Sudan Electric Corporation (SSEC) April 1 – March 31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank ADF African Development Fund AFD Agence Francaise de Développement APL Adaptable Program Loan CAS Country Assistance Strategy CEO Chief Executive Officer CFL Compact Fluorescent Lamp CPS Country Partnership Strategy EIB European Investment Bank EIRR Economic Internal Rate of Return EMP Environmental Management Plan EPC Engineering, Procurement, and Construction Contract ESIA Environment and Social Impact Assessment ESMF Environment and Social Management Framework ESMP Environmental and Social Management Plan FIRR Financial Internal Rate of Return FIT Feed In Tariff GDP Gross Domestic Product GEF Global Environmental Facility GNI Gross National Income GRSS Government of Republic of South Sudan GPOBA Global Partnership on Output-Based Aid HVAC High Voltage Alternate Current HVDC High Voltage Direct Current ICB International Competitive Bidding ICS Interconnected System South Sudan ESSN 3 ICT Information and Communications Technology IDA International Development Association IFC International Finance Corporation IFRs Interim Financial Reports INT Integrity Vice Presidency IPP Independent Power Producers LED Light Emitting Diode MDG Millennium Development Goals M&E Monitoring and Evaluation MFI Micro Finance Institution MIGA Multilateral Investment Guarantee Agency MOED Ministry of Electricity and Dams MOFEP Ministry of Finance and Economic Planning MOPM Ministry of Petroleum and Mining NBI Nile Basin Initiative NPV Net Present Value O&M Operations and Management PAP Project Affected Persons PC Project Coordinator PIU Project Implementation Unit PPP Public and Private Partnership PSE Private Sector Enterprise PV Photo Voltaic RAP Resettlement Action Plan RPF Resettlement Policy Framework RSS Republic of South Sudan SCS Self Contained System SIL Specific Investment Loan SHS Solar Home System SME Small and Medium Enterprise SSEC South Sudan Electricity Corporation TOR Terms of Reference WB World Bank Regional Vice President: Makhtar Diop Country Director: Bella Deborah Mary Bird Country Manager: Laura Kullenberg Sector Director: Jamal Saghir Sector Manager: Lucio Monari Task Team Leader: Raihan Elahi South Sudan ESSN 4 This report was written by Raihan Elahi (Senior Energy Specialist and TTL), Rahul Kitchlu (Energy Specialist), Fouzul Khan (Consultant), and Chrisantha Ratnayake (Consultant) with contributions from many colleagues of the World Bank Africa Energy Team (AFTEG). The team is grateful for the guidance provided by Lucio Monari, Varadarajan Atur, the peer reviewers, and all those who provided their comments during the review process. The authors would also like to thank the staff of the Ministry of Electricity and Dams in South Sudan and the South Sudan Electricity Corporation who provided valuable support and cooperation in the preparation of this report. The team would like to thank Emmanuel Taban, Joyce Wani Gamba, and the colleagues in the World Bank Juba Office for their support in preparing the report. South Sudan ESSN 5 SOUTH SUDAN ELECTRICITY SECTOR STRATEGY NOTE (ESSN) TABLE OF CONTENTS Page Executive Summary .......................................................................................................................7 I. Introduction ........................................................................................................................9 A. Background and Country Context ................................................................................ 9 B. Sectoral Context .......................................................................................................... 10 II. Government’s Vision for the Sector ...............................................................................11 A. Public Policy Goals ..................................................................................................... 11 B. Emerging Sector Institutions and Capacity Constraints ............................................. 12 III. Demand and Supply .........................................................................................................14 A. Evolution and Forecast of Demand............................................................................. 14 B. Electricity Supply Challenges ..................................................................................... 14 C. Generation Mix ........................................................................................................... 15 D. Transmission and Distribution Networks ................................................................... 20 E. Regional Interconnections .......................................................................................... 21 F. Off-Grid, Renewable Energy, and Energy Efficiency ................................................ 23 G. Access Enhancement .................................................................................................. 26 H. Demand Side Management ......................................................................................... 28 IV. Sector Financial Analysis ................................................................................................28 A. Operational Financial Performance ............................................................................ 28 B. Investment Program Financing ................................................................................... 29 C. Fiscal Impact of Subsidy ............................................................................................. 29 V. Sector Reforms .................................................................................................................31 A. Laying the Foundation for Growth ............................................................................. 31 B. Role of the Public Authorities..................................................................................... 32 C. Private Sector Participation......................................................................................... 35 VI. Sector Strategy and World Bank Support.....................................................................36 ................................42 .................................................................43 South Sudan ESSN 6 EXECUTIVE SUMMARY Country Background 1. South Sudan, a post-conflict fragile state, is embarking on a process of building its government and economy to foster growth and development. This is a daunting task for a new nation whose development related indices are amongst the lowest in Sub-Saharan Africa (SSA) and where core infrastructure is in its infancy. South Sudan’s GDP is about US$ 10 billion with a population of 8.3 million. A large country of 647,095 sq km, South Sudan possesses considerable natural resources (oil and gas, hydropower, etc.). To promote growth and prosperity through efficient use of resources, the Government of Republic of South Sudan (GRSS) announced the South Sudan Development Plan (SSDP), FY2011-13, including plans for key sector investments. Sector Analysis 2. At present, South Sudan has an installed capacity of 22 MW in three isolated distribution networks (major commercial centers) totaling 15 km in length. In FY2011, 22,000 customers (less than 1% of population) consumed about 70 GWh of energy (per capita consumption of about 10 kWh). Currently, electricity generation is thermal based (diesel, heavy fuel oil) which is very expensive (average generation cost is about US$ 0.70/kWh).
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