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Document of The World Bank Public Disclosure Authorized Report No: ICR0000339 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-46660) ON A LOAN Public Disclosure Authorized IN THE AMOUNT OF US$105 MILLION TO THE PEOPLE’S REPUBLIC OF CHINA FOR A HUBEI HYDROPOWER DEVELOPMENT IN POOR AREAS PROJECT Public Disclosure Authorized June 14, 2012 China and Mongolia Sustainable Development Unit (EASCS) Sustainable Development Department East Asia and Pacific Region (EAP) Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate) Currency Unit = Renminbi (RMB) RMB 1.00 = US$0.13 US$1.00 = RMB 7.871 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS BNWPP Bank Netherlands Water IBRD International Bank for Partnership Program Reconstruction and BP Bank Policy Development CAS Country Assistance Strategy ICB International Competitive CBDP Community Benefit Bidding Development Plan ICR Implementation Completion CDCF Community Development and Results Report Carbon Fund ISR Implementation Status Report CDM Clean Development Mechanism kWh Kilowatt hour CERs Certified Emission Reductions M&E Monitoring & Evaluation CO2 Carbon dioxide MOF Ministry of Finance CPS Country Partnership Strategy MW Megawatt CRESP China Renewable Energy NA Not Applicable Scale-Up Program NBF Non Bank-financed DRA Debt Reserve Account NOX Nitrogen oxides DSCR Debt Service Coverage Ratio NPV Net Present Value EIA Environmental Impact OD Operational Directive Assessment O&M Operation and Maintenance EIRR Economic Internal Rate of OP Operational Policy Return PAD Project Appraisal Document EMP Environmental Management PAP Project Affected People Plan PDO Project Development ERPA Emission Reduction Purchase Objectives Agreement PID Project Information Document FIRR Financial Internal Rate of POE Panel of Experts (for Dam Return Safety) FMIS Financial Management RAP Resettlement Action Plan Information System RE Renewable Energy FSR Feasibility Study Report RMB Renminbi (Chinese Yuan) FY Fiscal Year ROE Return on Equity GWh Gigawatt hour RVP Regional Vice-President HPPC Hubei Provincial Power SARS Severe Acute Respiratory Company Syndrome 1 Average exchange rate during the life of the project (derived from Annex 1, Tables A1 and A3: Actual Total Financing Required: 1 US$ = 7.87 RMB). SASAC State-owned Assets Supervision TSP Total Suspended Particulates and Administration TTL Task Team Leader Commission VAT Value Added Tax SO2 Sulfur dioxide WB World Bank TA Technical Assistance WBG World Bank Group Vice President: Pamela Cox Country Director: Klaus Rohland Sector Managers: Mark Lundell / Vijay Jagannathan Project Team Leader: Yanqin Song ICR Main Author: Emmanuel Py PEOPLE’S REPUBLIC OF CHINA HUBEI HYDROPOWER DEVELOPMENT IN POOR AREAS 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 ............................................................... 1 2. Key Factors Affecting Implementation and Outcomes ............................................................... 4 3. Assessment of Outcomes ............................................................................................................. 8 4. Assessment of Risk to Development Outcome ......................................................................... 12 5. Assessment of Bank and Borrower Performance ...................................................................... 12 6. Lessons Learned ........................................................................................................................ 14 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ........................... 15 Annex 1. Project Costs and Financing .......................................................................................... 16 Annex 2. Outputs by Component .................................................................................................. 20 Annex 3. Economic and Financial Analysis .................................................................................. 24 Annex 4. Main Beneficiaries, Results Chain, and M&E Design................................................... 28 Annex 5. Resettlement .................................................................................................................. 31 Annex 6. Poverty Alleviation Impacts of the Project .................................................................... 35 Annex 7. Bank Lending and Implementation Support/Supervision Processes ............................. 42 Annex 8. Beneficiary Survey Results ............................................................................................ 44 Annex 9. Stakeholder Workshop Report and Results ................................................................... 45 Annex 10. Summary of Borrower's ICR and/or Comments on Draft ICR .................................... 46 Annex 11. Comments of Cofinanciers and Other Partners/Stakeholders ...................................... 54 Annex 12. List of Supporting Documents ..................................................................................... 55 MAP .............................................................................................................................................. 56 A. Basic Information Hubei Hydropower Country: China Project Name: Development in Poor Areas Project Project ID: P068049 L/C/TF Number(s): IBRD-46660 ICR Date: 06/14/2012 ICR Type: Core ICR People’s Republic of Lending Instrument: SIL Borrower: China Original Total USD 105.0M Disbursed Amount: USD 105.0M Commitment: Revised Amount: USD 105.0M Environmental Category: A Implementing Agencies: Hubei Provincial Project Management Office B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 06/20/2000 Effectiveness: 07/14/2003 07/31/2006 11/19/2008 Appraisal: 11/15/2001 Restructuring(s): 06/30/2010 01/17/2011 Mid-Term Review Approval: 06/25/2002 (Pre-Appraisal of 06/06/2005 Guangrun Comp.): Closing: 12/31/2008 12/31/2011 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Negligible to Low Bank Performance: Satisfactory Borrower Performance: Moderately Satisfactory i C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Moderately Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Performance: Performance: Satisfactory C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Other social services 3 3 Power 97 97 Theme Code (as % of total Bank financing) Infrastructure services for private sector development 22 22 Other social development 11 11 Pollution management and environmental health 23 23 Poverty strategy, analysis and monitoring 22 22 Rural services and infrastructure 22 22 E. Bank Staff Positions At ICR At Approval Vice President: Pamela Cox Jemal-ud-din Kassum Country Director: Klaus Rohland Yukon Huang Sector Managers: Mark Lundell, Vijay Jagannathan Mohammad Farhandi (Acting) Project Team Leader: Yanqin Song Barry Trembath ICR Team Leader: Yanqin Song ICR Primary Author: Emmanuel Py ii F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project has three objectives: (a) facilitate economic growth in Hubei by expanding electric power generation capacity in an economically and environmentally sustainable manner; (b) enhance the efficiency of the electricity sector in Hubei by commercializing county level generation companies; and (c) contribute to poverty alleviation efforts in poor communities in Hubei. Revised Project Development Objectives (as approved by original approving authority) Not applicable. (a) PDO Indicator(s) Formally Actual Value Original Target Revised Achieved at Indicator Baseline Value Values2 (from Target Completion or Target approval documents) Values3 Years Facilitate economic growth in Hubei by expanding electric power generation Indicator 1: capacity in an economically and environmentally sustainable manner. 1. NA 1. Increased renewable 1. 801 1. Increased renewable generation capacity in GWh per generation capacity in Hubei of 604 GWh per year. Hubei of 740 GWh per year. year. 2. NA 2. Successful 2. Successful completion of EMPs completion of EMPs and acceptance by and acceptance by domestic authorities. domestic authorities: Value -before June 2002 for (Quantitative the original four or components; Qualitative) -in November 2005 for the additional Guangrun component. 3. Resettlers living 3. Resettlers living 3. Resettlers living standards: standards improved. standards: -Average net per capita -Average net per capita income: RMB 1,640 / income: RMB 4,340 / year = US$0.54/day. year = US$1.83/day. -Before the start of the -In addition to this, all 2 Original target values from the PAD. 3 Restructuring on 07/31/2006: reallocation of loan proceeds and addition of