African Development Fund Nigeria-Niger-Benin-Burkina

AFRICAN DEVELOPMENT FUND

NIGERIA-NIGER-BENIN-BURKINA FASO POWER INTERCONNECTION PROJECT

Public Disclosure Authorized COUNTRY: MULTINATIONAL

APPRAISAL REPORT

Disclosure Authorized

Public

RDGW

November 2017

Translated Document

TABLE OF CONTENTS

Currency Equivalents, Acronyms and Abbreviations, Grant Information, Executive Summary, Results-Based Logical Framework and Implementation Schedule………………………..i - vii

1 STRATEGIC THRUST AND RATIONALE ...... 1 1.1 Project Linkages with Country Strategy and Objectives ...... 1 1.2 Rationale for Bank Involvement ...... 1 1.3 Aid Coordination ...... 2

2 PROJECT DESCRIPTION ...... 3 2.1 Project Description and Components ...... 3 2.2 Technical Solutions Retained and Alternatives Explored ...... 4 2.3 Project Type ...... 4 2.4 Project Costs and Financing Mechanisms ...... 5 2.5 Target Areas and Beneficiaries ...... 7 2.6 Participatory Approach ...... 7 2.7 Bank Group Experience and Lessons Reflected in Project Design ...... 8 2.8 Key Performance Indicators ...... 8

3 PROJECT FEASIBILITY ...... 9 3.1 Economic and Financial Performance ...... 9 3.2 Environmental and Social Impacts ...... 10

4 PROJECT IMPLEMENTATION ...... 12 4.1 Implementation Arrangements ...... 12 4.2 Project Monitoring ...... 15 4.3 Governance ...... 16 4.4 Sustainability ...... 17 4.5 Risk Management ...... 17 4.6 Knowledge Building ...... 18

5 LEGAL FRAMEWORK...... 18 5.1 Legal Instruments ...... 18 5.2 Conditions Associated with Bank Intervention ...... 18

6 RECOMMENDATION ...... 20

ANNEXES

ANNEX 1: Country Comparative Socio-economic Indicators ANNEX 2: Country AfDB Portfolio Tables ANNEX 3: Interventions of Development Partners in the Electricity Sub-sector in the Four Countries ANNEX 4: Map of the Project Area ANNEX 5: Organization Chart of the PMU ANNEX 6: Justification Note on the Level of Counterpart Contribution for Burkina Faso and Niger

Currency Equivalents

September 2017 1 Unit of Account (UA) = USD 1.41 1 Unit of Account = EUR 1.25 1 Unit of Account = XOF 784.04

Fiscal Year 1 January - 31 December

Weights, Units and Measures T Tonne = 1000 kg GW GigaWatt = 1 000 000 kW or 1 000 MW GWh Gigawatt-hour = 1 000 MWh Toe Tonne of oil equivalent kV kiloVolt = 1 000 Volt kVA kiloVolt Ampere = 1 000 VA kW kiloWatt = 1 000 Watt kWh kiloWatt-hour = 1 000 Wh MVA MegaVolt Ampere = 1 000 kVA or 1 000 000 VA MW MegaWatt = 1 000 000 W or 1 000 kW MWh MegaWatt-hour = 1 000 kWh tCO2 Tonne CO2 = 1 000 kg of carbon gas

ACRONYMS AND ABBREVIATIONS

ADF African Development Fund AFD French Development Agency AFIF Africa Finance and Investment Fund CEB Communauté Electrique du Bénin CRP Comprehensive Resettlement Plan CSP Country Strategy Paper EBID ECOWAS Bank for Investment and Development ECOWAS Economic Community of West African States EIB European Investment Bank ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan EU European Union FDs Final Designs FE Foreign exchange GDP Gross Domestic Product IsDB Islamic Development Bank JIC Joint Implementation Committee LC Local currency MPU Major Projects Unit MSC Ministerial Steering Committee NBET Nigerian Bulk Electricity Trading PLC NEPAD New Partnership for Africa’s Development NIGELEC Société Nigérienne d’Electricité (Niger Power Utility Company) OMVG Gambia River Basin Organization PAP Project-affected persons PDs Preliminary Designs PDES Economic and Social Development Plan PIA Project Impact Area PMU Project Management Unit PNDES National Economic and Social Development Plan PSRP Power Sector Recovery Programme RISP Regional Integration Strategy Paper SONABEL Société Nationale d’Electricité du Burkina Faso (Burkina Faso Water Utility Company) TFP Technical and Financial Partners TSF Transition Support Facility UA M Million Units of Account UA Unit of Account WADB West African Development Bank WAPP West African Power Pool WB World Bank

PROJECT INFORMATION SHEET

BORROWERS : BURKINA FASO AND REPUBLIC OF NIGER DONEE : BURKINA FASO EXECUTING AGENCIES : SONABEL AND NIGELEC

AMOUNT IN UA MILLION

BURKINA INSTRUMENT NIGER BENIN NIGERIA TOTAL FASO 17.34 10.40 - - 27.74 Loan ADF (ABP) 7.66 3.60 - - 11.26 Grant

17.34 15.60 - - 32.94 Loan ADF (OR) 7.66 5.40 - - 13.06 Grant

- 11.00 - - 11.00 Loan TSF RO - 16.50 - - 16.50 Loan

Total Loan 34.68 53.50 - - 88.18 Loan

Total Grant 15.32 9.00 - - 24.32 Grant

TOTAL BANK 50 62.50 - - 112.50 GROUP

AfIF/EUROPEAN UNION 12.55 12.55 - - 25.10 Grant

WORLD BANK 129.45 137.51 17.55 20.70 305.21 Loan

AFD 24.07 15.85 - 17.01 56.93 Loan

EBID - 6.52 6.52 Loan

National GOVERNMENTS 1.60 1.35 0.33 5.01 8.29 investment budget

TOTAL 217.67 229.76 18755 49.24 514.55

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KEY FINANCIAL INFORMATION ON BANK GROUP LOANS AND GRANTS ADF loan to ADF grant to EU/AFIF grant to Niger and Burkina Faso and Burkina Faso Burkina Faso Niger Loan/grant Unit of account (UA) Unit of account (UA) Unit of account (UA) currency Interest type Not applicable Not applicable Not applicable Interest rate Not applicable Not applicable Not applicable margin 0.75 % per year on the Service charge for loan amount disbursed N/A N/A ADF loans not yet reimbursed. 0.5 % on the ADF loan undisbursed loan commitment amount 120 days Not applicable Not applicable charge following signature of the Loan Agreement Loan maturity 40 years Not applicable Not applicable Grace periods and 5 years for Burkina repayment of Faso and 10 years for Not applicable Not applicable ADF loans Niger

IFRR 12.73% FNPV UA 115.4 million IERR 54.0 % ENPV UA 3000 million

DURATION AND KEY MILESTONES Concept Note approval 29 August 2017 Project approval 15 December 2017 Effectiveness 31 March 2018 Last disbursement 31 December 2022 Completion 31 December 2022 Last reimbursement January 2058

PROJECT SUMMARY

1. General Project Overview: The Nigeria-Benin-Niger-Burkina-Faso Power Interconnection Project, also called the North Backbone Project, involves the construction of a 330 kV double-circuit line over 842 km with transformer substations. The project will allow for power exchange among the four countries and with neighbouring countries to which they are interconnected, as well as electrification of 394 localities situated along the line within a 5 km radius. Under this project, two double-circuit 450 MW lines will be installed. The project will help to: (i) meet the electricity needs of the population and national economies, in accordance with the national development strategies of the countries concerned and ECOWAS, which aims at universal access to reliable electricity by 2030, with a view to sustainable socio-economic transformation; and (ii) strengthen regional economic integration, through the establishment of power market. Estimated to cost UA 514.55 million, the project will be implemented over five years (2018-2022). AfDB contribution to project financing is estimated at UA 112.50 million, intended to partially finance all project components in Burkina Faso and Niger.

2. Needs Assessment: The project aims to help lift the following power sub-sector constraints in the countries of the hinterland: (i) the structural generation deficit relative to electricity demand; (ii) the high proportion of thermal electricity, whose cost price is relatively high and which contributes to harming the environment; (iii) the low financial capacity of national electricity companies; (iv) the very limited extent of the high voltage power transmission network, which is an obstacle to energy exchanges among ECOWAS countries; and (v) the low access of the population to electricity. Nigeria’s hydropower generation that will be injected into the grid, will enable the various countries to have access to renewable energy at a competitive price, and increase the rural electrification access rate for 294 localities under the project. The project is in line with the objectives of the West African Power Pool (WAPP) to improve network reliability and electricity quality, while reducing costs.

3. Bank’s Value Added: The Bank supports each of the countries concerned in developing its energy sector. With regard to this project, the Bank became involved very early by financing feasibility studies through IPPF/NEPAD. As a leader designated by the countries, it continued to assist in project structuring and the mobilization of four other donors, including the European Union through the Africa Investment Fund, which provided grant resources to subsidize the loans that will finance the project.

4. Knowledge Management: Experiences gained by stakeholders (Bank, countries and WAPP) during various phases of project preparation (feasibility studies, resource structuring and mobilization through the organization of donor roundtables) will be beneficial in the future for the preparation of similar regional projects. For the implementation phase, various problems that the project will encounter and the manner in which they will be handled and resolved, will constitute a knowledge base to be used by the Bank and other stakeholders in implementing future operations. The periodic implementation reports prepared by the consulting engineer, accounts audit reports, and supervision mission and mid-term review reports, will constitute sources of information. The Bank’s completion report will be published to provide greater access to the public interested in power sub- sector projects in the sub-region.

RESULTS-BASED LOGICAL FRAMEWORK

Country and Project Name: Multinational –Nigeria, Niger, Benin, Burkina Faso Power Interconnection Project Project Goal: Ensure energy exchanges and improve power supply in ECOWAS member countries by supplying electricity at a competitive cost

PERFORMANCE INDICATORS RISKS/ RESULTS CHAIN MEANS OF VERIFICATION Baseline MITIGATION MEASURES Indicator (including ISCs) Target (2021) Situation

Electricity access rate: Risk: Insecurity in the Sahel sub-region 1. Niger 21% 11 % Mitigation measures: The combined efforts of the States concerned 2. Burkina Faso and the international community aimed at fighting insecurity and Contribute to improving access to electricity for 19 % 26% 3. Benin restoring the authority of States in the entire Sahel; the electrification people in the countries concerned 4. Nigeria 31% 34 % Statistics of ministries in charge of the of localities along the transmission line will also help to enhance

IMPACT 47% 49% economy in the respective countries security thanks to public lighting; the availability of electricity will Statistics of ministries in charge of energy in allow for the use of modern communication media, especially the the respective countries internet and mobile telephone. Reports of the WAPP General Secretariat Risk: Supply from Nigeria considered as the main exporting country 1. Increase in the energy exchanged (GWh/year) 330 1 350 Mitigation: (i) development of national power generation resources in some countries that could generate surpluses (Kandadji in Niger, 2. CO2 emission avoided (T/year) - 243 090 Solar Programme in Burkina Faso and Maria (450 MW) in Benin); 3. Average kWh cost price (CFAF) reduced and (ii) implementation of the PSRP in Nigeria under the aegis of Increased energy exchanges among countries - Benin/Togo the World Bank. The PRSP should help to revive the privatization Reduced energy cost in Niger, Burkina Faso and - Burkina Faso 88 78 programme. Benin/Togo - Niger 140 107 Jobs created 127 81

OUTCOMES 4. Number of permanent jobs created 0 250, including 60 for Risk: WAPP’s limited experience in implementing projects of this Number of temporary jobs created women 5. scale with several TFPs 0 600, including 17% for women Mitigation measure: Building WAPP’s implementation capacity, creating monitoring structures at national and local level, establishing 1. Dispatching stations constructed 0 2 Project progress reports an environment unit within WAPP; collaboration with NGOs. The interconnection loop is constructed Project mid-term review report The dispatching station is constructed 2. Length of 330 kV lines constructed 0 842 km Project completion report HTB/HTB/HTA substations are constructed 3. Number of HTB/HTB/MT substations constructed or 0 5 Audit reports WAPP’s institutional capacity is strengthened.

reinforced The project audit and progress reports are prepared 4. Localities electrified 0 294 5. Number of progress reports 0 20 OUTPUTS 6. Number of audit reports approved 0 5 7. Number of training laboratories reinforced 0 2 8. Number of multifunctional platforms 0 25

COMPONENTS RESOURCES

IE Component 1: Construction of (i) a 842-km line and 330 kV high voltage line branches; (ii) six substations; and (iii) two dispatching stations Component 1: UA 381.71 million Component 2: Electrification of 294 local communities Component 2: UA 78.34 million

ACTIVIT Component 3: UA 42.90 million Component 3: Project management (operation of the PMU, works control and supervision, audit, assistance to the contracting authority, capacity building) Component 4: UA 9.99 million

KEY KEY Component 4: Mitigation of environmental and social impacts, and enhancement of project social impacts Total project cost: UA 514.55 million ADF loans and grants: UA 112.50 million Other TFPs: UA 392.06 million States: UA 8.29 million

Indicative Project Implementation Schedule

2022 2017 2018 2019 2020 2021 Project Activities Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1. Project Approval and Effectiveness of the Financing Agreements Approval by the Board of Directors Signature of financing agreements Effectiveness of financing agreements Lifting of conditions precedent

2. Transmission Infrastructure Construction Recruitment of the PMU Preparation of works procurement documents Recruitment of works contractors Line and substation construction works Works control and supervision 3. Rural Electrification Recruitment of a consultancy firm to conduct FDs Drafting of FDs and preparation of works procurement files Recruitment of the control mission Line and substation construction works Connection of households 4. Institution Building and Project Management Works control and supervision Audit of project accounts Information, Education and Communication 5. Impact Mitigation Compensation of affected persons Provision of multi-purpose platforms Provision of improved stoves

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MANAGEMENT’S REPORT AND RECOMMENDATIONS TO THE BOARD OF DIRECTORS CONCERNING A PROPOSAL FOR ADF GRANTS AND LOANS TO BURKINA FASO, AND ADF AND TSF LOANS TO NIGER Management hereby submits this report and recommendations concerning proposals for: (i) an ADF grant of UA 15.32 million and an ADF loan of UA 34.68 million to Burkina Faso; and (ii) an ADF loan of UA 26 million, an ADF grant of UA 9.0 million and a TSF loan of UA 27.5 million to the Republic of Niger.

1 STRATEGIC THRUST AND RATIONALE

1.1 Project Linkages with the Country Strategy and Objectives

1.1.1 The project falls within the ambit of the electricity sub-sector development policy letters and the development strategies of the four countries concerned. It is aligned on the third strategic thrust of Burkina Faso’s National Economic and Social Development Plan for the period 2016-2020 (2016- 2020 PNDES), which aims to boost growth sectors for the economy and jobs; and the fourth strategic thrust of Niger’s Economic and Social Development Plan for the period 2012-2015 extended up to end-2017 (2012-2017 PDES), which aims to promote a competitive and diversified economy for accelerated and inclusive growth. In Benin, the project is in line with the Energy Sector Recovery Plan (2015-2020), which aims to ensure adequate energy supply from 2019 to meet the needs of the economy and households. In Nigeria, the project is aligned on the third thrust of the country’s new economic policy, which aims to boost the economy through increased capital expenditure on infrastructure.

1.1.2 At the regional level, the project was retained as part of the Bank’s lending programme under the Regional Integration Strategy Paper (RISP) 2011-2015 for West Africa, extended to end-2017, Pillar I of which concerns the connection of regional markets by supporting investments in regional infrastructure, including power generation and transmission.

1.1.3 The project is aligned on CSP strategic pillars of Burkina Faso (2017-2021), Niger (2013- 2017), Benin (2017-2021) and Nigeria (2013-2017). Furthermore, the project plugs into the Bank’s Ten-Year Strategy for the period 2013-2022, focused on inclusive growth and transition to green growth. It will enable Benin, Niger and Burkina Faso to have access to Nigeria’s clean energy generated from hydropower and gas. All localities near the line will also be connected to the sub- regional power system, thus enabling the population concerned to have access to an affordable modern source of energy. The project accords with the first of the Bank’s High 5s, which aims to light up and power all regional member countries. It is consistent with the New Pact for Energy in Africa strategy, particularly in terms of granting access to people “from the bottom of the pyramid”. By contributing to regional integration and the promotion of energy trade, the project is in line with the objectives of NEPAD, which financed pre-investment studies through its Infrastructure Project Preparation Facility (IPPF). Lastly, the project is in harmony with the Bank’s Youth Employment Strategy. During its implementation, sixty young trainees will be recruited in the various trades servicing the project.

1.2 Rationale for Bank’s Involvement

1.2.1 The Bank’s involvement is justified by the need to continue assisting the four countries to face power sub-sector challenges, especially so for Benin, Burkina Faso and Niger. The power sectors of these countries are characterized by low supply compared to relation to ever-increasing demand and a predominance of thermal electricity generated from liquid fuels. The deficit forecasts of the three countries by 2022 (project infrastructure commissioning year) are estimated at 145 MW, 150 MW and 90 MW, respectively. These challenges are reflected in the low population access rates to electricity (Benin: 31% with 58% in the urban area and 7% in the rural area, Burkina Faso: 19% with 60 % in the urban area and 3% in the rural area, and Niger: 11% with 41% in the urban area and 1%

in the rural area) and average per kWh cost prices that are among the highest in the sub-region (Benin: CFAF 88; Burkina Faso: CFAF 130 to 150; and Niger: CFAF 127). Electricity imported from Nigeria through project infrastructure will increase the access rate and reduce the average cost per kWh made available to consumers. Nigeria has an installed capacity of 6 666 MW. The actual available capacity is 5 388 MW, but due to distribution network constraints, only 4 500 MW are actually provided to consumers, enabling it now to export to its neighbours (Niger, Benin and Togo). The generation projects being developed, especially the rehabilitation of the Kainji (760 MW) and Jebba (578 MW) hydropower plants, will increase Nigeria’s supply by 1 338 MW, and inject 300 MW into the new line.

1.2.2 Project implementation will contribute to total interconnection of the national grids of ECOWAS member countries, thus promoting trade in electricity, while significantly improving quality, quantity and access to cleaner energy services at a competitive cost. Specifically, the project will help to increase the electricity access rate of the people of Niger, Burkina Faso, Benin and Togo, through access to Nigeria’s predominantly gas and hydropower energy resources. It will help to limit these countries’ costly investments in thermal energy generation, based essentially on fossil fuels. The project will contribute to reducing greenhouse gas emissions. This integration project will also lead to improvements in the living standard of people in its impact area (powering of basic social services: health centres, schools and administrative services) and create income-generating activities in the rural area.

1.2.3 The project is in synergy with the Bank’s ongoing or recently completed operations in the region. At the regional level, it will help to secure supply in Benin and Togo, in addition to the first Nigeria-Benin line financed by the Bank and completed in 2007. Furthermore, by fostering an increase in energy supply in Burkina Faso and Niger, the project complements Bank-financed power access projects in both countries, namely: (i) The Electricity Infrastructure Reinforcement and Rural Electrification Project in Burkina Faso, completed in 2015, and which helped to connect 159 localities to the national power grid; (ii) the ongoing Project for the Electrification of the Peripheral Areas of Ouagadougou and Bobo Dioulasso, which plans to connect 17 000 new subscribers; and (iii) the Rural and Peri-urban Electrification Project in Niger aimed at connecting 46 000 households.

1.3 Aid Coordination

1.3.1 Technical and Financial Partners (TFP) that participated in these two roundtables, intervene in the four countries concerned by the project. The table below summarizes their volumes of interventions in the respective power sub-sectors in the last five years. Annex 3 presents TFPs and the volumes of financing in countries benefiting from this project. The interventions are coordinated within thematic working groups, with the Bank as an active member in each of the countries.

Table 1.1 Volume of Donor Intervention in the Power Sub-sector in Each of the Four Countries

Power Sub-sector Importance GDP Exports Labour Benin Not stated 0 % Not stated Burkina Faso Not stated 0 % Not stated Niger Not stated 0% Not stated Nigeria Not stated Not stated Not stated Stakeholders – Annual Public Expenditure (2012-2016) Government Donors Benin - UA 462 million (68 %) ADF Burkina Faso – UA 51 M (17%) UA 253 million (83%) ADF (15%), WB (23%), AFD (19%), EIB (12%), Others (14%) Niger UA 121.89 million ADF, WB, IDB Nigeria 590.36 ADB, WB, AFD Aid Coordination Level

Benin Burkina Faso Niger Nigeria Existence of thematic working groups in the sub-sector Yes Yes Yes Yes Yes Yes Existence of an overall sector programme Yes No AfDB role in aid coordination Member Member Member Member

1.3.2 The Bank is the leader of TFPs for this project. Through NEPAD/IPPF, it provided decisive assistance for the conduct of feasibility studies, the final design, the commercial framework, and the institutional structure that facilitated project conception. In collaboration with the WAPP General Secretariat, it coordinated TFPs during the feasibility study phase by organizing the various study validation workshops, and the two Ouagadougou (November 2016) and Cotonou (April 2017) donor roundtables, intended to mobilize financing for the project. With a planned contribution of UA 112.50 million, it managed to effect financial closure for the project to the tune of UA 514.55 million. Finally, the Bank coordinated the project appraisal mission, which was jointly carried out with the World Bank and the French Development Agency.

2 PROJECT DESCRIPTION

2.1 Project Description and Components

The project consists mainly in the construction of a 330 kV interconnection line between Nigeria, Niger, Benin and Burkina Faso. Other activities related to the construction of the power transmission infrastructure include the electrification of localities situated within a 5 km radius, on both sides of the line, capacity building for WAPP and the countries, and project management activities.

Table 2.1 Project Components Cost (UA Components Bank Financing Description M) - Extension of the 330 kV Birnin Kebbi (Nigeria) substation; - Construction of a 330 kV transmission line between Birnin Kebbi (Nigeria) and Niamey (Niger); - Extension of the 330/132/66 kV substation to Niamey - Construction of the 330/132 kV substation in Zabori (Niamey) - Construction of a 330 kV transmission line between Niamey and Ouagadougou ; - Construction of a 330/225 kV substation in Ouagadougou-East - Extension of the Ouaga South-East substation Transmission 381.71 67.69 - Construction of a 330 kV line between Zabori (Niger) and Malanville infrastructure (Benin) - Extension of the Malanville 330/161/20 kV substation - Installation of static compensators - Installation of frequency regulation equipment in the Gorou Banda and Ouagadougou-East substations - Construction of the Niamey dispatching centre - Integration of the Ouaga-East and Ouaga South-East substations to the Ouagadougou dispatching centre, and the Malanville substation to the CEB dispatching centre 3

Rural - Implementation studies, audit, works control and supervision electrification - Construction of lines and substations for 294 rural communities 80.65 27.09 - Operation of the executing agencies under the rural electrification component Institution building - Operation of the Project Management Unit (PMU) and project - Institutional support to the WAPP General Secretariat management - Works control and supervision 42.20 16.02 - Project audit - Assistance to project management - Capacity building Impact mitigation - Management of environmental and social impacts 9.99 1.70 - Compensation of affected persons TOTAL 514.55 112.50

2.2 Technical Solutions Retained and Alternatives Explored

2.2.1 The project consists in the construction of an 842-km long high-voltage network, including a double-circuit 330 kV line with 930 MW from Birnin Kebbi in Nigeria to Ouagadougou in Burkina Faso, and a link to Zabori-Malanville (for the link, only one circuit will be equipped during the current project phase). The alternative solution envisaged was the continued development of national systems, without taking into account possibilities for energy trade. This solution was rejected because it leads to a very high average per kWh cost, less supply security and lack of operational flexibility, and is at variance with the regional development plan. Given the power transmission capacity at the initial phase of operation and to minimize investments, plans were made to install a single circuit in the current phase of the project, and a second circuit later on. However, given the length of the line and the losses that would result from a single circuit, the installation of the second circuit would be recommended from 2025, or three years after the end of the project. This very short time between the end of the project and the time required for the installation of the second circuit, militated against the single-circuit solution.

2.2.2 The reasons for rejection of technical alternatives are summarized in the table below.

Table 2.2 Technical Alternatives Explored and Reasons for Rejection

Alternative Brief Description Reason for Rejection Continued development No interconnection; of national networks each country faces its - Higher average per kWh generation cost increased demand by - Lesser supply security developing energy - Lack of operational flexibility sources - Not in accordance with the regional development plan and does not allow for optimization of energy generation plans

Construction of a double- A double-circuit line is circuit 330 kV line with constructed and a - Very high losses the installation of a single single circuit installed, - Very short time between the end of the project and the circuit while the second is installation of the second circuit. installed subsequently

2.3 Project Type

The project is a multinational investment operation. The financing instruments proposed are loans and grants on ADF, TSF and EU/AFIF fiduciary fund resources.

2.4 Project Costs and Financing Mechanisms

2.4.1 The total cost is UA 514.55 million, as per the feasibility studies, and was confirmed during project appraisal. This cost includes a 5 % provision for physical contingencies and a 3% provision for price escalation. The project costs by components, sources of financing and expenditure categories, are presented in Tables 2.3, 2.4 and 2.5 below:

Table 2.3 Estimated Cost by Component

Components Foreign Local Total % Local Exchange Currency Currency Transmission infrastructure 316.05 35.12 351.17 90.00% Rural electrification 48.23 25.97 74.20 65.00% Project management 27.17 11.65 38.82 70.00% Mitigation - 9.19 9.19 0.00% Total base cost 391.45 81.93 474.38 82.69% Provision for physical contingencies 21.28 4.45 25.73 82.69% Provision for price escalation 12.77 2.67 15.46 82.69% Total 425.51 89.04 514.55 82.69%

2.4.2 The Bank Group’s contribution to project financing is estimated at UA 112.50 million (UA 50 million for Burkina Faso and UA 62.50 million for Niger), corresponding to 21.83 % of the total cost. The rest of the funding will come from the World Bank, the French Development Agency, the ECOWAS Bank for Investment and Development, European Union AfIF funds, and governments of beneficiary countries. EU/AfIF financing was approved in April 2017; the AFD plans to submit its own financing to the Board of Directors in December 2017, while the World Bank and EBID plan to submit theirs to their respective Boards of Directors during the first half of 2018.

Table 2.4 Estimated Costs by Sources of Financing (UA M)

Foreign Local Sources of Financing TOTAL % Exchange Currency ADF 89.74 22.75 112.50 21.86% WB 263.97 41.24 305.21 59.32% AFD 51.23 5.69 56.93 11.05% EU/AfIF 16.31 8.78 25.10 4.87% EBID 4.24 2.28 6.52 1.27% Governments - 8.29 8.29 1.61% Total 425.50 89.05 514.55 100 %

2.4.3 The first year of project implementation will be devoted mainly to the recruitment of contractors and service providers; disbursements will remain low (about 4%) and will increase in the following year (2019). Table 2.6 below gives the projected schedule of disbursements for each component during the four years of project implementation. Disbursement forecasts are indicated in Table 2.6 below:

Table 2.5 Project Cost by Expenditure Category (UA M)

Foreign Local Expenditure Category TOTAL % Exchange Currency Works 380.24 57.93 438.17 85.04% Goods 8.20 13.08 21.27 4.14% Services 31.16 15.51 46.67 9.07% Others 5.91 2.53 8.44 1.64% Total 425.51 89.04 514.55 100.00%

Table 2.6 Expenditure Schedule by Component (UA M)

Components 2018 2019 2020 2021 2022 Total

Transmission infrastructure - 57.26 133.60 152.68 38.17 381.71 Rural electrification 12.10 20.16 32.26 16.13 - 80.66 Institution building and project 4.22 10.55 12.66 10.55 4.22 42.20 management Impact mitigation 2.00 4.99 2.00 1.00 - 9.99 TOTAL 18.32 92.96 180.52 180.36 42.39 514.55 % of disbursement 3.56% 18.07% 35.08% 35.05% 8.24% 100.00%

2.4.4 ADF resources (a UA 34.68 million loan and a UA 15.32 million grant) will partially finance transmission infrastructure components (Construction of the Ouaga-East substation, reinforcement of the national dispatching station and construction of the Ouaga-East/Ouaga South-East substation 225 kV line); project management and impact mitigation (control mission, operation of the PMU, capacity building, especially procurement of teaching materials for the ISGE and the CFP/SONABEL, and procurement of platforms and improved stoves). In Niger, ADF resources (a UA 26 million loan, a UA 9.1 million grant and a UA 27.5 million TSF grant) will partially finance transmission infrastructure components (construction of the Gorou Banda substation- Burkina Faso border line); rural electrification, project management and impact mitigation (control mission, operation of the PMU, procurement of platforms and improved stoves). Counterpart contributions to the financing of the Burkina Faso and Niger project stand at UA 1.60 million and UA 1.35 million, respectively. The reasons for this low participation are detailed in Annex 7.

Table 2.7 ADF Resources by Expenditure Category (UA M)

Foreign Local Expenditure Category TOTAL % Exchange Currency Works 73.25 13.41 86.65 84.53% Goods 2.88 2.95 5.84 49.38% Services 11.37 5.43 16.80 67.68% Others 2.24 0.96 3.20 70.00% Total 89.74 22.75 112.50 79.78%

2.4.5 EU/AfIF resources (UA 25.10 million), will partially finance the rural electrification component in Burkina Faso and Niger, including the construction of MV/LV networks and the connection of households. For Niger, EU/AfIF resources will be managed by the Bank in line with its accounting, internal control/audit and procurement procedures.

2.5 Target Areas and Beneficiaries

2.5.1 The project concerns four countries: Benin, Burkina Faso, Niger and Nigeria. The interconnection will run from Birnin Kebbi in Nigeria to Ouagadougou in Burkina Faso, passing through Zabori and Niamey in Niger. A branch will link Zabori to Malanville in Benin. In Benin, the power line stretches for 12 km across River Niger and bypasses the Malanville suburban area via the West. The project area is located in Malanville, with a population of 168 641 inhabitants (2013). In Burkina Faso, the 330 kV line goes from the border with Niger to the Ouaga-East substation in Ouagadougou. The project straddles four (4) regions, namely the Centre, the Centre-East, the East and the Central Plateau. In Niger, three sections of the new 330 kV line cross River Niger, i.e. between the border with Nigeria and the Gorou Banda substation in Niamey, between this substation and the border with Burkina Faso, and between the future Zabori substation and the border with Benin. The project straddles three (3) regions, namely Dosso, Tillabéri and Niamey, which, according to the same census, have a population of 2 141 487, 2 645 125 and 1 388 682, respectively. Lastly, in Nigeria, the 330 kV line links the Birnin Kebbi substation to the border with Niger. The area is located in Kebbi State, with a population of 3 630 931 (2011). The map of the project area is presented in Annex 4.

2.5.2 The power transmission infrastructure will first benefit the national power utility companies of Benin (CEB), Burkina Faso (SONABEL), Niger (NIGELEC) and Nigeria (TCN), i.e. operators of the infrastructure. The project will ensure the electrification of 294 rural communities with a total population of 540 000 inhabitants. It will provide electricity to 68 000 households that will subscribe, thus helping to improve their quality of life. The execution of works will create 600 temporary jobs, at least 17% of which will be occupied by women/girls, and about 250 permanent jobs, 60 of which will be occupied by women and girls. In terms of socio-professional integration, at least 36 young graduates in Niger and Burkina Faso, of which 50% girls, will be able to carry out internships of 6 months, renewable once, thus promoting their employability. At the regional level in each of the countries, the project will enable industries and businesses of the respective regions to develop and increase their production and commercial activities. At least 2 000 women and girls will see their income improved through support for income-generating activities. Finally, regional integration and the West African economy will be promoted.

2.5.3 The project will benefit people, especially those living in its direct impact area and various sectors of the economy of the four countries. It will have a major positive impact on the activities of residents of the PIA, in general, and those of women and youths, in particular, through new job opportunities, strengthening of commercial activities, better access to socio-economic infrastructure, the reduction of the load shedding time and electricity tariffs. The most significant expected positive outputs are: (i) improved productivity of socio-economic development sectors, the conditions of care of patients in hospitals and learning in schools; (ii) increased value added for national economies; (iii) increased income of young people and women, through training and the creation of job opportunities; and (iv) a significant reduction in the people’s poverty level.

2.6 Participatory Approach

2.6.1 The inclusive approach was adopted by various countries and applied as part of project design and preparation of ESIAs, ESMPs and RAPs. The consultations were made publicly (in the regions crossed by the project) and specifically (among PAPs). The groups targeted by the stakeholder information and consultation approach are: (i) the ministries and national agencies concerned; (ii) divisional and communal authorities and technical services; (iii) traditional authorities; (iv) communities and households affected by the line route and the location of substations; (v) NGOs and civil society organizations in the fields of nature conservation, development and human rights; and (vi) local residents.

2.6.2 The main concerns and expectations expressed during these consultations concern: (i) the mainstreaming of environmental and social considerations in the choice of the power line route; (ii) the provision of the ESIA report and the CRP/RAP to technical services after validation; (iii) adequate 7

compensation for losses caused and support during resettlement of PAPs; (iv) information and involvement of traditional authorities and communities in the compensation process and planning of works; (v) support for income-generating activities for women; (vi) access to electricity for communities; (vii) use of local labour during construction works; and (viii) proposal of adequate management measures that are adapted to field realities. This approach will continue during the project implementation phase, through the implementation of the stakeholder engagement plan (SEP). This plan provides for the establishment of a mediation and support mechanism that will ensure: (a) regular meetings among stakeholders to increase the sensitization and social mobilization of local people, and public and private operators; (b) dissemination of key information on a dedicated website of national power utility companies and respective ministries of energy, and in national and local media; (c) prevention of tension and conflicts, and development of collaboration around project- related activities. Lastly, the Bank published summaries of the ESIA and the CRP on its website on 14/08/17.

2.7 Bank Experience and Lessons Reflected in Project Design

2.7.1 The Bank’s portfolio in Burkina Faso (June 2017) comprises 16 active projects, including an energy operation. It is considered sound and has no problematic project. In Niger, AfDB portfolio comprises 13 operations, including one in the energy sector approved in 2016. This portfolio’s monitoring suffers mainly from lack of a governmental coordination mechanism as well as from the Bank’s non-presence in this country. However, the Bank’s 2016 portfolio reviews and its project supervision and completion reports in these two countries revealed three types of recurrent problems in project implementation: (i) delays in project start-up due to inadequate ownership by the national party; (ii) delays in the procurement process, especially during the contract signature phase by national authorities; and (iii) weak human capacity for project implementation.

2.7.2 At the regional level, the Bank has financed several projects similar to this one (regional and multi-donor) in the electricity sub-sector, the most recent being the Ghana-Togo-Benin Power Interconnection Project, the Interconnection Project for countries of the Nile Equatorial Lakes (Burundi, Kenya-Uganda, DR Congo and Rwanda), the Côte d’Ivoire-Liberia-Sierra Leone-Guinea Power Interconnection Project and the Project to Interconnect the Power Networks of OMVG Countries. The Bank’s experience from implementing these projects and mentioned in the supervision and completion reports, reveals several challenges to be addressed to improve project performance. These difficulties relate mainly to: (i) the multiplicity of actors who generally have different technical and operational capacity; (ii) lack of harmonization and coordination of project activities in the various countries; (iii) procurement weaknesses noted at the level of countries and national power utility companies; and (iv) late mobilization of the counterpart contribution and performance monitoring. These lessons were taken into account when designing this project by: (i) especially using a sub-regional structure as the executing agency, namely the WAPP General Secretariat, which will be strengthened by technical assistance and supported by a consulting engineer for works control and supervision; (ii) ensuring the availability of all feasibility studies; and (iii) ensuring the availability of the necessary financing for its full implementation.

2.8 Key Performance Indicators

2.8.1 The main expected outcomes as well as the means of verification are detailed in the project matrix. The main outcome indicators are: the electricity access rate, the volume of energy traded, the quantity of CO2 avoided, the fall in the average price per kWh, the infrastructure constructed, the number of localities electrified, and the number of direct and indirect jobs created. The baseline situation for these indicators, as defined in the logical framework, will be verified and an evaluation conducted at mid-term and at the end of the project by the national power utility companies concerned: TCN, NIGELEC, SONABEL and CEB.

2.8.2 Project implementation performance indicators will also be monitored. These indicators took the Bank’s institutional performance indicators into account and include: (i) the deadline for 8

effectiveness and fulfilment of the conditions precedent to first disbursement of funds; (ii) procurement deadlines; and (iii) the trend of the disbursement rate compared to the expenditure schedule. These indicators will be monitored during supervision missions and in routine project management.

3 PROJECT FEASIBILITY

3.1 Economic and Financial Performance

Key project financial and economic performance indicators are given below (see details in Technical Annex B.7):

Table 3.1 Key Project Financial and Economic Performance Indicators IRR: 12.73% NPV: UA 115.4 million Baseline scenario ERR: 54.0% ENPV: UA 3000 million

3.1.1 Financial Performance: The internal financial rate of return (IRR) and net present value were calculated based on the cost-benefit method of implementing and operating the project. The financial benefits taken into account consist of revenue from the transit of electricity through the line and the share, attributable to the line, of gains from the sale of imported energy by participating countries. The costs are those of the project, excluding the provision for price escalation, and the cost for managing, operating and maintaining the facilities. The duration of analysis is 34 years, including 4 years of project implementation and 30 years of operating the 330 kV line.

3.1.2 Tariffs for energy transmitted by the line will be set in accordance with Decision No. 006/15/ERERA of 15 December 2007 of the ECOWAS Regional Electricity Sector Regulatory Authority on the tariff methodology for WAPP’s transmission network costs and tariff. These tariffs will be determined and discussed within the project’s Commercial Framework. They will have to cover the line’s operating and maintenance costs in each country, while remaining accessible to the importer, who will always see an advantage is tapping form the line. In addition, current average energy generation costs in importing countries (Benin/Togo, Burkina Faso and Niger) in the first years of operation, remain higher than the cost of energy to be imported from Nigeria (purchase and transit costs), which justifies the interest in constructing the line.

3.1.3 Economic Performance: The economic costs retained for the calculation of the economic rate of return (ERR) and the economic net present value (ENPV) are project costs, net of taxes and provision for price escalation, corrected by appropriate conversion factors for equipment, works, services and labour. Operating and maintenance costs were treated the same. The quantifiable project- related economic benefits consist of savings on generation costs made by the energy- importing countries, compared to the “without project” situation, when they would generate energy at a more expensive cost. Several other unquantifiable impacts strengthen the project’s economic profitability. These include reduced emission of millions of tonnes of CO2, compared to the “without project” situation, the impact of income earned by the many temporary workers to be recruited during the execution of construction works, and the improvement of the well-being of the population, which would now have access to quality energy in sufficient quantity.

3.1.4 Sensitivity of Project Performance: The sensitivity of project financial and economic performance was analysed in relation to: (i) the 10% increase in investment costs; (ii) the 10% increase in operating expenses; and (iii) the 10% reduction in fuel price. This analysis reveals that the project’s rate of return, although sensitive to the variation of various factors, remains at an acceptable level, thus confirming its financial and economic viability.

3.2 Environmental and Social Impacts

3.2.1 Environment

3.2.1.1 The project was classified in Category 1 in accordance with the Bank’s Environmental and Social Assessment Procedures (ESAP) given: (i) its scale (330 kV line of 842 km); and (ii) the significant negative impacts and risks that it will generate. The project will affect sensitive sites and ecosystems mainly in Niger (giraffe range, the Dallol Bosso Ramsar site, the Dallol Maouri Ramsar site, the Makalondi district ZICO and the Dosso partial reserve). In Burkina Faso, these are the Gonsè classified forest as well as sacred sites. Lastly, the project will affect more than 200 persons. At the level of each country, the project is classified in Category A (equivalent to the Bank’s Category 1). Environmental and Social Impact Assessment (ESIA), Environmental and Social Management Plan (ESMP) and Comprehensive Resettlement Plan (CRP) reports were prepared for each country, in accordance with national regulations and the requirements of the Bank’s Integrated Safeguards System (ISS). These reports were validated by each country.

3.2.1.2 Although the choice of the line route is optimal at the environmental and social level, compared to the variants analysed, the chosen variant will generate the following main negative impacts and risks during construction and operation: (i) the felling of trees along the line right-of- way for a total of 1 905 ha in Burkina Faso (70% of agricultural land and shrubby savannah), 2 102 ha in Niger (63% of agricultural land and 20% of tiger bush), 60 ha in Benin (74% of agricultural land and 21% of shrubby savannah), 310 ha in Nigeria (66% of agricultural land and 18% of tiger bush); (ii) losses, modification and fragmentation of habitats for animals, especially birds in the Dallol Bosso and Dallol Maouri Ramsar sites, the Makalondi ZICO reserve as well as River Niger, and the degradation of the anthropic part of Niger’s giraffe range; (iii) risks of destruction of cultural sites, including 7 in Burkina Faso and 1 in Niger; (iv) risks to the health and safety of both workers and local residents; and (v) loss of property and income for project-affected persons (see the resettlement section for details). The main cumulative negative impacts concern the reduction of natural habitats and disruption of ecosystem services.

3.2.1.3 Mitigation measures are planned for all negative impacts and risks identified. Environmental, Hygiene, Health and Safety (EHHS) clauses will be included in bidding documents (BD). The Environmental Protection Plan (EPP) and the site Hygiene, Health and Safety Plan (HHSP) of the Site ESMP (SESMP) will comply with OHSAS 18001:2007 international standards and the project ESMP. The main specific plans developed under the ESMP are: (i) the biodiversity action plan, which includes Protection Plans for the Niger giraffe range, the Dallol Bosso Ramsar site, the Dallol Maouri site, and the Makalondi district ZICO reserve, (ii) the vegetation management plan, the residual material management plan, the archaeological and cultural heritage management plan, the stakeholder engagement plan, and the emergency measures plan. The total cost of the ESMP (excluding the CRP) is estimated at USD 6.7 million, including: (i) USD 0.64 million for Benin; (ii) USD 1.4 million for Burkina Faso; (iii) USD 3.5 million for Niger and; (iv) USD 1.14 million for Nigeria.

3.2.1.4 The project’s main positive impacts on the environment are: (i) the contribution to the reduction of greenhouse gas (GHG) emissions up to 243 090 teq of CO2 per year (based on the predominantly hydraulic and natural gas energy to be injected from Nigeria); and (ii) the benefits of increasing access to “cleaner’’ energy by households compared to the use of fuelwood.

3.2.2 Climate Change: The project was classified in Category 2 in terms of climate, in accordance with the Bank’s climate screening system. This is an average risk that mostly concerns flood-prone areas on some sections of the line. Substation sites are not located in flood-prone or submersible areas. Moreover, sections of lines at risk represent less than 10% of the route and are located mainly in the crossing areas of rivers, including River Niger. Adaptation measures are included in the line’s design. For instance, the transmission line’s design and construction follow the best international engineering standards to guarantee physical resistance to the main climate risks in 10

the project area. This will require consideration, among others, of: (i) the speed of dominant winds; (ii) the water levels in the crossing and substation areas; and (iii) the class of soils for sizing foundations. At the level of mitigation, the project will avoid GHG emissions up to 243 090 teq of CO2 per year. In addition, tree planting and ecosystem restoration will help to enhance this positive project impact.

3.2.3 Monitoring of ESMP Implementation: The PMU to be set up, will integrate environmental and social expertise. It will work in collaboration with the national power utility companies of countries concerned (SONABEL, NIGELEC, CEB and TCN). These entities have experience and environmental and social expertise. Nevertheless, it was requested that they be strengthened especially at the social level. Furthermore, agreements will be signed between the national power utility companies and the authorities in charge of environmental issues to ensure the monitoring of ESMP implementation. The costs of capacity building and monitoring measures are included in those of the ESMP. Finally, the Bank, in collaboration with the other donors, including the World Bank, will contribute to project supervision.

3.2.4 Gender Promotion and Women’s Empowerment: Most of the project is in rural areas, where agriculture, livestock and petty trading activities predominate and in which women take an active part. However, their contribution is limited because of the use of traditional production and produce processing tools. Added to this is the strenuousness of domestic work, which includes the preparation of meals, fetching of water and fuelwood and the processing of agricultural produce, the daily duration of which is estimated at about 16 hours.

3.2.5 The interconnection project is largely rural, in the countries covered. In these areas, the predominant activities are mainly agriculture, livestock farming and fisheries. Women carry out activities in all production sectors (agriculture, livestock farming, handicrafts, petty trading) but their contribution is limited because of the use of traditional production and processing tools. Moreover, domestic work is strenuous and done mostly by women and girls, with a daily duration estimated at about sixteen hours (preparation of meals, fetching of water and fuelwood, processing of agricultural produce). There is no doubt that access to energy will improve the living conditions of the population, especially women. The interconnection project is a response to the recurrent demand of the community and women, in particular, to improve their working conditions and socio-economic life, in general. To optimize the positive effects of the electrification project, the following actions have been proposed for women: (i) develop multi-purpose platforms and improved stoves (infrastructure and equipment) to contribute to rational energy use, reduction of women chores and diversification of income sources; (ii) support income-generating activities through entrepreneurship training, processing and conservation of agricultural and dairy produce, raising of small ruminants, as well as financial support (in Niger and Burkina-Faso); (iii) organize awareness campaigns on birth registration and acquisition of identification cards, prevention of early and forced marriages, family planning, reforestation and environmental protection, and education of girls (in Niger and Burkina- Faso); (iv) construct boreholes (women walk more than 3 km in some regions of Niger and the Eastern region of Burkina-Faso); and (v) conduct functional literacy in Niger (88% of women and 72% of men cannot read and write). Budgets of UA 0.99 million in Burkina Faso and UA 0.71 million in Niger will be allocated to these activities. The proposed activities could be reviewed to adjust them to resources and budgets.

3.2.6 Energy access will improve the living conditions of the population, and particularly women, who will be empowered through the provision of multi-purpose platforms and improved stoves. Multi-purpose platforms using electricity will include hullers, grain mills, water pumps, welding units and carpentry machines. The platforms will make domestic work less strenuous and create jobs for women and young people in Niger and Burkina Faso.

3.2.7 Employment

3.2.7.1 During electricity infrastructure construction, the project will create about 600 temporary skilled and unskilled jobs, including at least 20% for women and girls. During operation, about 250 direct and indirect permanent jobs will be created, of which at least 15% for women to the extent possible.

3.2.7.2 To promote employability, the project will recruit 60 young graduate trainees in Niger (30) and in Burkina Faso (30), at least 50% of whom will be girls. These young graduates will be placed, respectively, within the management unit, the consulting engineer and the selected contractor, as assistants to the professional experts. The project will cover the monthly allowance that will be paid to each of the trainees.

3.2.7.3 The social enhancement measures that will be developed as part of project implementation will help to promote income-generating activities for women’s groups and girls/men through the provision of the multi-purpose platforms mentioned in 3.2.3 above.

3.2.8 Forced Resettlement: The project will affect 1 348 persons in Niger, 1 896 persons in Burkina Faso, 1 029 persons in Nigeria and 93 persons in Benin. Located in the right-of-way of works, these persons will lose their developed and undeveloped plots/building areas and various goods; some of them will also suffer socio-economic harm with loss of business (temporary and/or permanent) and income. In this regard, and in accordance with the Bank’s requirements, a Comprehensive Resettlement Plan (CRP) was submitted to each of the countries to decide the appropriate measures and conditions that will be taken in favour of project-affected persons. The overall cost of these CRPs stands at CFAF 661 615 298 in Niger, CFAF 33 743 850 in Benin, CFAF 1 210 878 695 in Burkina Faso and NGN 1 385 637 783 in Nigeria. Financing will be covered fully by the four respective countries. The cost of intervention of the Consultancy Firm/NGO recruited for CRP implementation will be covered by the project (funds mobilized by donors). The summary of the CRP was published on the AfDB website on 14/08/17.

4 PROJECT IMPLEMENTATION

4.1 Implementation Arrangements

Institutional Framework

4.1.1 For implementation, the following principle was adopted for the definition of the project’s institutional framework: entrust the implementation of the transmission infrastructure component to a common structure attached to the WAPP General Secretariat; and each country implements the rural electrification component on its territory. Based on this principle, the following institutional system was adopted by Ministers of Energy of the four countries concerned by the project (see details in Annex 5):

- The four national power utility companies (TCN, NIGELEC, SONABEL and CEB) constitute the Project Executing Agency; they will create a Project Management Unit attached to the WAPP General Secretariat, which will be responsible for the implementation of the transmission infrastructure component;

- A Joint Implementation Committee (JIC), comprising General Managers of the four national power utility companies and delegates of the Ministries of Energy and Finance;

- A Ministerial Steering Committee (MSC), comprising Ministers of Energy of the four countries concerned by the project. The MSC is responsible for the strategic directions of project implementation; it shall meet at least once a year;

- There are two types of project agreements: (i) energy purchase contracts between the TCN, on the one hand, and CEB, NIGELEC and SONABEL, on the other hand, as well as the related transmission service contracts; and (ii) an inter-company agreement for the establishment of the PMU;

- Each country will establish a project management unit for the rural electrification component and any other project-related activity (e.g. capacity building and enhancement of the positive impacts of the project);

- Resources approved by the Bank will be transferred to the national power utility companies.

4.1.2 The PMU will be responsible for routine project management during the implementation phase, starting from project approval up to works completion. The PMU will be attached to the WAPP for specific purposes related to this project implementation. For technical and works supervision aspects, the PIU will be supported by a consulting engineer. The PIU’s key responsibilities include: (i) project activity planning and coordination; routine monitoring and supervision/control of project activities, with the support of the consulting engineer; (iii) managing procurement procedures for all project activities, including preparing contracts for submission to the respective authorities in each country for signature; (iv) preparing contractor payment request for submission to the respective authorities of each country for signature; (v) monitoring the implementation of environmental safeguards measures, including managing the compensation of project-affected persons (PAPs), in close collaboration with national and local committees, and in compliance with each country’s laws and regulations; (vi) presenting quarterly project progress reports to the JIC, donors and other stakeholders; and (vii) presenting project account audit reports.

4.1.3 The PMU will comprise a central unit attached to the WAPP General Secretariat and a local branch in each country. The central unit will comprise the following key staff: (i) a project manager, a procurement expert, a chief accountant, a financial management expert, four engineers (lines, substations, civil engineering and SCADA); it will also have support staff (secretary, assistant and drivers).

4.1.4 JIC will be responsible for the monitoring and control of PMU activities in the project implementation phase. Its main responsibilities will include: (i) the approval of the PMU’s annual work programme; (ii) the approval of the PMU’s annual operating budget; and (iii) the approval of major contracts for the construction of major structures (lines and substations) once the procurement has been completed and for the Project Consulting Engineer, before their signature. JIC will meet at least twice yearly, or as often as necessary, to ensure timely project implementation. Meetings may be held in person or virtually, depending on the circumstances.

4.1.5 The MSC will take decisions on matters referred to it by JIC and deal with project matters requiring inter-governmental intervention and solution. At this level, decisions shall be taken by consensus. The MSC will meet at least twice yearly or as often as necessary, as dictated by project exigencies.

4.1.6 The WAPP General Secretariat, through its Planning Department, which piloted the pre- investment studies, is currently implementing project activities mostly in connection with the preparation of procurement files for transmission network works, and the recruitment of key PMU and control mission staff. It is supported by the consultancy firm that conducted the feasibility studies and was strengthened by an individual consultant, specialized in procurement.

4.1.7 In Burkina Faso, activities to support training institutions and those relating to enhancement of project social impacts will be managed by SONABEL through the executing unit of the Electrification of Semi-Urban Areas of Ouagadougou and Bobo-Dioulasso Project approved by the Bank in September 2016 (PIU/PEPU). This unit had already implemented, to the satisfaction of the 13

Burkinabe Government and the Bank, the Electricity Infrastructure Strengthening Project. (completed in 2015, completion report produced in 2017). The PIU has sufficient staff and IT tools to support this additional workload. The Ministry of Energy will issue an order extending the respective responsibilities of the PIU/PEPU and the Steering Committee to the activities mentioned.

4.1.8 In Niger, activities relating to rural electrification and enhancement of project social impacts (support for women’s and youth groups) will be managed by NIGELEC, through its Major Projects Unit (MPU/NIGELEC). The MPU/NIGELEC is responsible for projects financed mainly by Niger’s technical and financial partners (AFD, AfDB, IsDB and WB), including the Urban, Suburban and Rural Electrification Project financed by the Bank and approved in September 2016; it is headed by a coordinator, with unit heads for each project, assisted by engineers specialized in the specific areas of the project. The MPU also has crosscutting units that intervene in all the projects, namely the Civil Engineering Unit, the Safeguards Unit, the Procurement Unit and the Financial Management Unit. The creation of a specific unit for this project’s rural electrification component and the designation of three engineers responsible, for MV/LV lines, MV/LV substations and connections, respectively, will be conditions precedent to presentation of the project to the Bank’s Board. The project will provide material support (computer and office automation equipment, furniture and vehicles) to MPU/NIGELEC for the effective management of the new workload that will be entrusted to it. An inter-office memorandum signed by the NIGELEC Managing Director designating the Major Projects Unit to manage the rural electrification component of this project with the necessary staff shall be forwarded to the Bank prior to presentation of the project to the Board.

Procurement of Goods, Works and Services

4.1.9 Procurements financed under the project will be in accordance with the Procurement Policy for Bank Group-financed Operations, October 2015 edition, and in accordance with the provisions set out in the Financing Agreements. More precisely, procurements will be made using:

- The Borrower’s procurement system (PS): Procurement methods and procedures (PMP) under the Borrower’s procurement system, including its laws and implementing decrees, notably:

- Niger: Law No. 2011/037 of 28 October 2011 on the general principles, control and regulation of public contracts and delegations of public services and all the implementing instruments putting it into force, notably Decree No. 2016 - 641 /PRN/PM of 1 December 2016 on the Public Procurement Code and delegations of public services as well as various instruments relating to procurement using national standard bidding documents (NSBD);

- Burkina Faso: Law No. 039-2016/AN of 2 December 2016 on general public procurement regulations and all the implementing instruments that put it into force, using national standard bidding documents (NSBD).

4.1.10 The Bank’s Procurement Methods and Procedures (PMP): The Bank’s standard procurement methods and procedures (PMP), using the relevant standard bidding documents (SBD) for contracts that are above the thresholds indicated in Annex B5, will be used in accordance with recommendations following the outcomes of the Bank’s evaluation of national procurement systems.

4.1.11 Procurement Risk and Capacity Assessment (PRCA): Risks at country, sector and project level as well as the procurement capacity of the executing agency (EA) were assessed, and the outcomes informed the Bank on the choice of the procurement system used for part of the given project activities. Appropriate risk mitigation measures were included in the PERCA action plan indicated in Para. B.5.9. of Annex B5.

4.1.12 Procurement preparatory activities are under way. They are carried by the WAPP General Secretariat and concern the preparation of procurement files, the recruitment of PMU staff (the project manager, the financial management expert and the chief accountant) and the control mission for the transmission infrastructure component. The General Secretariat is supported by the consultancy firm that conducted the feasibility studies and a consultant specialized in procurement.

Financial Management and Accounting Audit Arrangements

4.1.13 Project financial management will be determined from the project institutional framework, with a PMU attached to WAPP and responsible for the transmission infrastructure component; SONABEL in Burkina Faso and NIGELEC in Niger will be responsible for the rural electrification components, through their respective implementation units in charge of ongoing Bank projects (PIU/PEPU in Burkina Faso and PMU/NIGELEC in Niger).

4.1.14 Financial Management: Project accounts will be kept routinely on a commitments basis as per the OHADA accounting principles. Project accounting monitoring statements will be produced quarterly and 45 days after the end of the quarter, by the PMU; for ISGE and CFP/SONABEL support by PIU/PEPU (Burkina Faso); and for rural electrification and support for women’s and youth groups by PMU/NIGELEC (Niger). Annually, these structures shall present their budget for approval by their respective Steering Committees and produce the financial statements, no later than three months after the end of the accounting year, to ensure verification by external auditors.

4.1.15 In Burkina Faso, SONABEL will host the project management agency. It has the management structure of the Semi-Urban Areas Electrification Project that produced results in conformity with project management rules. The management unit will include at least a procurement specialist and an accountant, in addition to the technical positions. It has a procedures manual, an accounting management software and skilled staff for project implementation.

4.1.16 In Niger, the project management unit set up by the power utility company will take over the project’s rural electrification activities. It also has a project management procedures manual, a project accounting management software and skilled staff for project implementation. For this project, it will include at least a procurement specialist and an accountant, in addition to the technical positions.

4.1.17 Cash Flow and Disbursements: Project funds will be disbursed according to the Bank’s three disbursement methods as follows. Line construction activities, managed by the PMU attached to WAPP, will be paid through the direct payment method, as will the rural electrification activities managed by the PMU/NIGELEC. Special accounts will be opened at national level in Burkina Faso and Niger to support rural electrification management costs and project management structures. Finally, reimbursements will be accepted for expenses authorized by the project manager at WAPP level and national branches. The accounts will be managed under the joint signatures of the agency coordinator and accountant. Similarly, accounts will be opened for the management of counterpart contributions.

4.1.18 Financial and Accounting Audit: Project activities will be subject to an annual financial and accounting audit by an external audit firm. The firm will be recruited on terms of reference previously validated by the Bank, and the auditor will have to produce his/her report latest six (6) months following the end of the accounting year. The auditor’s contract may only be extended after the Bank would have validated the first report produced by the auditor. The duration of services may not exceed 3 years.

4.2 Project Monitoring

4.2.1 Monitoring will be carried out by PMU organs and national organs for the rural electrification component. Each structure will be supported by the implementation control mission

relating to its activities. Each country will establish a monitoring-evaluation system for project socio- economic impacts on its territory. Works execution will be subject to monthly and quarterly reports prepared by the consulting engineer. Project executing agencies will submit quarterly report on project implementation to the Bank.

4.2.2 For the Bank and other donors, launching, supervision and mid-term review missions will provide opportunities to monitor project implementation. These missions will be supplemented by others (completion and evaluation of project socio-economic impacts). Project co-financiers have agreed to jointly conduct supervision and mid-term review missions, as they did for the appraisal mission.

4.2.3 The monitoring of project impacts will help to identify and analyse outcome indicators related to project implementation, and contribute to the achievement of expected results.

Table 4.1 Monitoring of Project Activities/Feedback Loop

Period Stages Monitoring Activities/Feedback Loop - Approval and general information note on the project - Notification to Government - Signing of the ADF grant and loan agreements December 2017- Approval and effectiveness - Grant and loan effectiveness March 2018 of financing agreements - Lifting of conditions precedent to effectiveness and the first disbursement of the ADF loan - Project launching - Recruitment of the firm responsible for recruiting the PMU Recruitment of the PMU and November 2017- - Publication of the notice for expression of interest works control and June 2018 - Approval of the shortlist and bidding dossier supervision missions - Approval of the bid analysis report - Signing of the contract - Approval of bidding documents March 2018- Recruitment of works - Publication of tender notices December 2018 contractors - Approval of bid analysis reports - Signing of contracts January - April Approval of implementation - Approval of technical documents 2019 studies - Approval of implementation technical studies - Factory reception of electricity equipment - Supply of electricity equipment and materials - Installation of power networks and substations April 2017- Avril Power infrastructure - Supervision of worksites and technical controls 2022 construction works - Technical acceptance and commissioning of facilities - Preparation of periodic progress reports - ESMP implementation June to December - The Borrower’s project completion report Project completion 2022 - The Bank’s project completion report

4.3 Governance

4.3.1 The main governance-related problems or risks could arise during implementation of the procurement plan, particularly line and transformer station construction works, and works supervision and control. These problems may also concern the transparency of the procurement process and compliance of materials, goods and works with the specifications set out in the bidding documents. Considering the weaknesses identified in the internal procurement systems of the countries and WAPP, and to ensure the application of relevant good governance rules, there are plans to use donor rules and procedures for the procurement of goods, works and consultancy services, especially those of the Bank and the World Bank. An internal audit system will be established within the PMU to ensure compliance with procedures, control of budget execution and performance auditing.

4.3.2 To ensure compliance with equipment standards and works execution according to rulebook, the contractors to be selected will work under the supervision of a consulting engineering firm, in collaboration with technical assistance to the contracting authority and the PMU.

4.3.3 As concerns project financial governance, the executing agency will keep separate accounts for the project, which will help to identify expenditure by component, category and source of financing. Project accounts will be audited annually by a firm recruited for this purpose. The financial and audit reports will be submitted to the Bank within six months following the close of the accounting period.

4.4 Sustainability

4.4.1 The four countries involved in the project took an active part in the various phases of project preparation in terms of commitment and ownership. This was seen in their active participation in various pre-investment study monitoring and validation workshops organized by the WAPP General Secretariat. This commitment was sustained in the financing mobilization phase with their participation in two roundtables organized for this purpose in Ouagadougou in November 2016 and Cotonou in April 2017.

4.4.2 To ensure energy trade after commissioning the infrastructure, the four countries agreed to establish a commercial framework specifically for that purpose. The commercial framework study is part of the project’s pre-investment studies. The study proposed a commercial framework that will be governed by two agreements among the States: a standard energy trade agreement and an energy transmission agreement. Presentation to the Bank of copies of the signed agreements will be one of the conditions for Bank financing.

4.4.3 In addition, the implementation of the following measures will ensure the sustainability of the project outputs: (i) the commitment of the countries concerned to continue and complete the ongoing reforms aimed at improving energy sector management; (ii) capacity building activities for sector actors (Ministries of Energy and national power utility companies) financed by project resources; and (iii) the planned interconnection of the 330 kV project line with Ghana, Côte d’Ivoire and Mali from Burkina Faso.

4.5 Risk Management

Table 4.2 Risk Management Risks Mitigation Measures

The prevailing insecurity situation in The combined efforts of the four countries of G5 Sahel (Nigeria, Niger, Burkina Nigeria, Niger and Burkina Faso Faso, Chad and Mali) aimed at securing the sub-region, with the support of the international community.

The electrification of localities along the transmission line will also help to enhance security thanks to public lighting; the availability of electricity will allow for the use of modern communication media, especially the internet and mobile telephone. The limited experience of the WAPP Strengthening of the implementation capacity of the WAPP General Secretariat; General Secretariat in implementing of creation of monitoring structures at the level of each country; support expected from projects of this scale with several TFPs the consulting engineer and the recruitment of a management unit made up of experienced persons. Inadequate supply from Nigeria considered - The generation projects undertaken by the Main Stream firm in connection with as the main exporting country and with a rehabilitation of the Kainji (760 MW) and Jebba (578 MW) hydropower plants total installed capacity of 6 666, 6 388 MW will increase Nigeria’s supply by 1 338 MW; of which are available - The implementation of the Power Sector Recovery Programme (PSRP) in Nigeria with World Bank financing. The PRSP should revive the programme to privatize the rehabilitate generation units currently out of service.

4.6 Knowledge Building

4.6.1 The project’s implementation will enable staff of national companies and nationals of member countries of the Organization involved in project management to acquire knowledge in the management of major projects, environmental management, and population resettlement as well as the operation of 330 kV lines for Burkina Faso and Niger, the highest voltages in their respective networks, which currently do not exceed 225 kV and 161 kV, respectively. The project will also be an opportunity for WAPP Secretariat staff to contribute to implementing a large-scale regional project, and the experience acquired will be duplicated in future projects.

4.6.2 The project will be a training and site demonstration framework for counterparts of experts hired to work with the teams of works contractors and consultancy firms to learn line and substation construction, plant testing techniques, and procurement, financial management and environmental procedures through mentoring.

4.6.3 The quarterly and yearly project progress reports, financial audit reports and contract audits will be sources of information on the project. The same is true of donor supervision mission reports and Government monitoring missions. All of these reports as well as the project completion reports will draw and share lessons on project implementation. The Bank’s publication of the project completion report and the project performance evaluation report will ensure sharing of the knowledge gained through project implementation with donor staff and the public. The lessons learned will enhance the design of future similar operations in its regional member countries.

5 LEGAL FRAMEWORK

5.1 Legal Instruments

5.1.1 As regards Burkina Faso, two (2) agreements will be signed: (i) a loan agreement between Burkina Faso (“the Borrower") and the African Development Fund ("the Fund") for a UA 34.68 million loan; and (ii) a protocol agreement between the Fund and Burkina Faso for a UA 15.32 million grant.

5.1.2 As regards, Niger, four agreements will be signed: (i) an agreement between the Republic of Niger (“the Borrower”) and the Fund for a UA 26 million loan; (ii) an agreement between the Republic of Niger (“the Borrower”) and the Fund (acting on behalf of the Transition Support Facility) for a UA 27.5 million loan; (iii) a protocol agreement between the Fund and the Republic of Niger for a UA 9 million grant; and (iv) a protocol agreement between the Bank (acting on behalf of the EU/AfIF Fund) and the Republic of Niger for a UA 12.55 million grant.

5.2 Conditions Associated with Bank Intervention

A. Conditions Precedent to Grant and Loan Effectiveness

i. The effectiveness of ADF grants shall be subject to the relevant protocol agreements (Article X, Section 10.01, General Conditions Applicable to Protocols of Agreements for Grants of the African Development Fund) on their date of signature by the parties concerned;

ii. The effectiveness of ADF and TSF loans shall be subject to fulfilment by the borrowers of the conditions provided for in Section 12.01 of Article XII of the General Conditions Applicable to Loan Agreements and Guarantee Agreements of the African Development Fund (Sovereign Entities).

B. Conditions Precedent to First Disbursement of Grants and Loans for Burkina Faso

In addition to fulfilment of the conditions for effectiveness of the above-mentioned Loan Agreement and Grant/Loan Protocol Agreement, the Borrower/Donee shall fulfil the following first disbursement conditions:

i. Forward to the Fund, evidence of the signing of an agreement of transfer of the resources received to SONABEL, under terms acceptable to the Fund;

ii. Forward to the Fund, evidence of the recruitment of key PMU staff by WAPP (project manager, chief accountant, financial and administrative management expert, and environmental expert).

C. Conditions Precedent to First Disbursement of Grants and Loans for the Republic of Niger

In addition to fulfilment of the conditions for effectiveness of the above-mentioned Loan Agreements and Grant Protocol, the Borrower/Donee shall fulfil the following first disbursement conditions:

i. Forward to the Fund, evidence of the signing of an agreement to transfer the resources received to NIGELEC, under terms acceptable to the Fund;

ii. Forward to the Fund, evidence of the recruitment of key PMU staff by WAPP (project manager, chief accountant, financial and administrative management expert, and environmental expert).).

D. Condition Precedent to Disbursement for Works Requiring Expropriation

In addition to effectiveness of the Loan Agreements and the Grant Protocol Agreements and fulfilment of the condition precedent to first disbursement, disbursement for works requiring expropriation shall be subject to the Borrower’s fulfilment of the following condition, to the Bank’s satisfaction:

Forward to the Fund latest prior to works start-up in a given area: (a) evidence of procuring land or compensating project-affected persons (PAPs), in line with Bank rules and procedures, in particular the Involuntary Resettlement Policy, the Integrated Safeguards System, the Environmental and Social Management Plan (ESMP), the Comprehensive Resettlement Plan (CRP) and the national regulation concerned; or (b) where it is impossible to undertake such procurement or compensate certain PAPs, evidence of paying the financial resources meant to fund the procurement of such lands or compensation of these persons into an escrow account acceptable to the Fund, in compliance with the above rules.

E. Other ADF Grant and Loan Conditions

i. Transmit to the Fund, before the commencement of works, evidence of the approval of the AFD, World Bank and EBID financing;

ii. Transmit to the Fund, latest twelve (12) months after project approval, evidence of the signing of energy purchase contracts between the TCN, on the one hand, and CEB, NIGELEC and SONABEL, on the other hand, as well as the related transmission service contracts;

F. Commitments

The Borrower/Donne undertakes to act as follows, to the Bank’s satisfaction:

i. Implement the Project, the ESMP and the CRP and have them implemented by its contracting parties in accordance with: (a) Bank rules and procedures; and (b) national law;

ii. Not start work on a given project zone without fully compensating and/or resettling project-affected persons in such a zone, in accordance with the CRP as necessarily updated.

iii. Provide to the Fund, quarterly reports relating to implementation of the project, the ESMP and the CRP and any document, reasonably, necessary for the monitoring of project implementation.

5.3 Compliance with Operational Bank Policies

The project is in line with all applicable Bank policies.

6 RECOMMENDATION

Management recommends that the Board of Directors approve the proposed: (i) ADF grant of UA 15.32 million and ADF loan of UA 34.68 million to Burkina Faso; and (ii) ADF loan of UA 26 million, ADF grant of UA 9 million and TSF loan of UA 27.5 million to the Republic of Niger, according to the conditions set out in this report.

Annex 1: Comparative Socio-economic Indicators

Benin COMPARATIVE SOCIO-ECONOMIC INDICATORS

Develo- Develo- Year Benin Africa ping ped Countries Countries Basic Indicators GNI Per Capita US $ Area ( '000 Km²) 2016 115 30,067 97,418 36,907 Total Population (millions) 2016 11.2 1,214.4 6,159.6 1,187.1 2500 Urban Population (% of Total) 2016 44.4 40.1 48.7 81.1 2000

Population Density (per Km²) 2016 99.0 41.3 65.1 33.8 1500 GNI per Capita (US $) 2015 860 2 153 4 509 41 932 1000 Labor Force Participation *- Total (%) 2016 71.7 65.7 63.5 60.0 Labor Force Participation **- Female (%) 2016 70.0 55.7 48.9 52.1 500

Sex Ratio (per 100 female) 0

2000 2011 2015 2009 2010 2012 2013 2014 2016 99.6 100.1 106.0 105.0 2005 Human Dev elop. Index (Rank among 187 countries) 2015 167 ...... Popul. Liv ing Below $ 1.90 a Day (% of Population) 2011 53.1 ... 15.9 ...

Benin Africa Demographic Indicators Population Grow th Rate - Total (%) 2016 2.6 2.5 1.3 0.6 Population Grow th Rate - Urban (%) 2016 3.7 3.6 2.4 0.8 Population < 15 y ears (%) 2016 41.9 40.9 27.9 16.8 Population Growth Rate (%) Population 15-24 y ears (%) 2016 20.0 19.3 16.9 12.1 3.5 Population >= 65 y ears (%) 2016 2.9 3.5 6.6 17.2 3.0 Dependency Ratio (%) 2016 81.2 79.9 54.3 52.0 2.5 Female Population 15-49 y ears (% of total population) 2016 24.1 24.0 25.7 22.8 2.0 Life Ex pectancy at Birth - Total (y ears) 2016 60.0 61.5 69.9 80.8 1.5 Life Ex pectancy at Birth - Female (y ears) 2016 61.4 63.0 72.0 83.5 1.0 Crude Birth Rate (per 1,000) 2016 35.2 34.4 20.7 10.9 0.5

Crude Death Rate (per 1,000) 2016 9.1 9.1 7.6 8.6 0.0

2009 2012 2014 2005 2010 2011 2013 2015 Infant Mortality Rate (per 1,000) 2015 64.2 52.2 34.6 4.6 2000 Child Mortality Rate (per 1,000) 2015 99.5 75.5 46.4 5.5 Total Fertility Rate (per w oman) 2016 4.6 4.5 2.6 1.7 Benin Africa Maternal Mortality Rate (per 100,000) 2015 405.0 476.0 237.0 10.0 Women Using Contraception (%) 2016 18.3 31.0 62.2 ...

Health & Nutrition Indicators Phy sicians (per 100,000 people) 2005-2015 14.6 41.6 125.7 292.2 Life Expectancy at Birth Nurses and midw iv es (per 100,000 people) 2005-2015 60.4 120.9 220.0 859.4 (years) Births attended by Trained Health Personnel (%) 2010-2015 77.2 53.2 69.1 ... 80 Access to Safe Water (% of Population) 2015 77.9 71.6 89.4 99.5 70 60 Access to Sanitation (% of Population) 2015 19.7 39.4 61.5 99.4 50 Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 40 2015 1.1 3.4 ...... 30 Incidence of Tuberculosis (per 100,000) 2015 60.0 240.6 166.0 12.0 20 Child Immunization Against Tuberculosis (%) 10

2015 89.0 81.8 ...... 0

2009 2013 2005 2010 2011 2012 2014 2015 Child Immunization Against Measles (%) 2015 75.0 75.7 83.9 93.9 2000 Underw eight Children (% of children under 5 y ears) 2010-2015 18.0 18.1 15.3 0.9

Prev alence of stunding 2010-2014 34.0 33.3 25.0 2.5 Benin Africa Prev alence of undernourishment (% of pop.) 2015-2016 7.5 16.2 12.7 ... Public Ex penditure on Health (as % of GDP) 2014 2.3 2.6 3.0 7.7

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2010-2016 129.0 101.2 104.9 102.4 Primary School - Female 2010-2016 123.7 98.4 104.4 102.2 Infant Mortality Rate Secondary School - Total 2010-2016 56.8 52.6 71.1 106.3 ( Per 1000 ) Secondary School - Female 2010-2016 46.8 50.2 70.5 106.1 100 90 Primary School Female Teaching Staff (% of Total) 2010-2016 23.9 47.1 59.8 81.0 80 Adult literacy Rate - Total (%) 2010-2015 38.4 66.8 82.3 ... 70 60 Adult literacy Rate - Male (%) 2010-2015 49.9 74.3 87.1 ... 50 Adult literacy Rate - Female (%) 2010-2015 27.3 59.4 77.6 ... 40 30 Percentage of GDP Spent on Education 2010-2015 4.3 5.0 4.0 5.0 20 10

2005 2012 2009 2010 2011 2013 2014 2015 Environmental Indicators 2000 Land Use (Arable Land as % of Total Land Area) 2014 23.9 8.7 11.2 10.3 Agricultural Land (as % of land area) 2014 33.3 41.7 37.9 36.4 Forest (As % of Land Area) 2014 38.7 23.2 31.4 28.8 Benin Africa Per Capita CO2 Emissions (metric tons) 2014 0.6 1.1 3.5 11.0

Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update : June 2017 UNAIDS; UNSD; WHO, UNICEF, UNDP; Country Reports. Note : n.a. : Not Applicable ; … : Data Not Available. * Labor force participation rate, total (% of total population ages 15+) ** Labor force participation rate, female (% of female population ages 15+) I

Burkina Faso COMPARATIVE SOCIO-ECONOMIC INDICATORS

Develo- Develo- Burkina Year Africa ping ped Faso Countries Countries Basic Indicators GNI Per Capita US $ Area ( '000 Km²) 2016 274 30,067 97,418 36,907 Total Population (millions) 2016 18.6 1,214.4 6,159.6 1,187.1 2500 Urban Population (% of Total) 2016 30.3 40.1 48.7 81.1 2000

Population Density (per Km²) 2016 68.1 41.3 65.1 33.8 1500 GNI per Capita (US $) 2015 660 2 153 4 509 41 932 1000 Labor Force Participation *- Total (%) 2016 83.4 65.7 63.5 60.0 Labor Force Participation **- Female (%) 2016 76.6 55.7 48.9 52.1 500

Sex Ratio (per 100 female) 0

2000 2011 2015 2009 2010 2012 2013 2014 2016 98.6 100.1 106.0 105.0 2005 Human Dev elop. Index (Rank among 187 countries) 2015 185 ...... Popul. Liv ing Below $ 1.90 a Day (% of Population) 2014 43.7 ......

B ur kin a Fa so A fri ca Demographic Indicators Population Grow th Rate - Total (%) 2016 2.9 2.5 1.3 0.6 Population Grow th Rate - Urban (%) 2016 5.7 3.6 2.4 0.8 Population < 15 y ears (%) 2016 45.4 40.9 27.9 16.8 Population Growth Rate (%) Population 15-24 y ears (%) 2016 20.0 19.3 16.9 12.1 3.5 Population >= 65 y ears (%) 2016 2.4 3.5 6.6 17.2 3.0 Dependency Ratio (%) 2016 91.4 79.9 54.3 52.0 2.5 Female Population 15-49 y ears (% of total population) 2016 23.1 24.0 25.7 22.8 2.0 Life Ex pectancy at Birth - Total (y ears) 2016 59.3 61.5 69.9 80.8 1.5 Life Ex pectancy at Birth - Female (y ears) 2016 60.6 63.0 72.0 83.5 1.0 Crude Birth Rate (per 1,000) 2016 39.1 34.4 20.7 10.9 0.5

Crude Death Rate (per 1,000) 2016 9.1 9.1 7.6 8.6 0.0

2009 2012 2014 2005 2010 2011 2013 2015 Infant Mortality Rate (per 1,000) 2015 60.9 52.2 34.6 4.6 2000 Child Mortality Rate (per 1,000) 2015 88.6 75.5 46.4 5.5 Total Fertility Rate (per w oman) 2016 5.4 4.5 2.6 1.7 B ur kina F aso A fric a Maternal Mortality Rate (per 100,000) 2015 371.0 476.0 237.0 10.0 Women Using Contraception (%) 2016 21.4 31.0 62.2 ...

Health & Nutrition Indicators Phy sicians (per 100,000 people) 2005-2015 4.7 41.6 125.7 292.2 Life Expectancy at Birth Nurses and midw iv es (per 100,000 people) 2005-2015 63.0 120.9 220.0 859.4 (years) Births attended by Trained Health Personnel (%) 2010-2015 23.0 53.2 69.1 ... 80 Access to Safe Water (% of Population) 2015 82.3 71.6 89.4 99.5 70 60 Access to Sanitation (% of Population) 2015 19.7 39.4 61.5 99.4 50 Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 40 2015 0.8 3.4 ...... 30 Incidence of Tuberculosis (per 100,000) 2015 52.0 240.6 166.0 12.0 20 Child Immunization Against Tuberculosis (%) 10

2015 98.0 81.8 ...... 0

2009 2013 2005 2010 2011 2012 2014 2015 Child Immunization Against Measles (%) 2015 88.0 75.7 83.9 93.9 2000 Underw eight Children (% of children under 5 y ears) 2010-2015 26.2 18.1 15.3 0.9 Prev alence of stunding 2010-2014 35.1 33.3 25.0 2.5 B ur kin a Fa so A fri ca Prev alence of undernourishment (% of pop.) 2015-2016 20.7 16.2 12.7 ... Public Ex penditure on Health (as % of GDP) 2014 2.6 2.6 3.0 7.7

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2010-2016 88.0 101.2 104.9 102.4 Primary School - Female 2010-2016 86.1 98.4 104.4 102.2 Infant Mortality Rate Secondary School - Total 2010-2016 33.7 52.6 71.1 106.3 ( Per 1000 ) Secondary School - Female 2010-2016 32.2 50.2 70.5 106.1 120 Primary School Female Teaching Staff (% of Total) 2010-2016 44.6 47.1 59.8 81.0 100 Adult literacy Rate - Total (%) 2010-2015 37.7 66.8 82.3 ... 80 Adult literacy Rate - Male (%) 2010-2015 47.6 74.3 87.1 ... 60 Adult literacy Rate - Female (%) 2010-2015 28.3 59.4 77.6 ... 40 Percentage of GDP Spent on Education 2010-2015 3.9 5.0 4.0 5.0 20

2005 2012 2009 2010 2011 2013 2014 2015 Environmental Indicators 2000 Land Use (Arable Land as % of Total Land Area) 2014 21.9 8.7 11.2 10.3 Agricultural Land (as % of land area) 2014 44.2 41.7 37.9 36.4 Forest (As % of Land Area) 2014 19.8 23.2 31.4 28.8 B ur kin a Fa so A fri ca Per Capita CO2 Emissions (metric tons) 2014 0.2 1.1 3.5 11.0

Niger COMPARATIVE SOCIO-ECONOMIC INDICATORS

Develo- Develo- Year Niger Africa ping ped Countries Countries Basic Indicators GNI Per Capita US $ Area ( '000 Km²) 2016 1,267 30,067 97,418 36,907 Total Population (millions) 2016 20.7 1,214.4 6,159.6 1,187.1 2500 Urban Population (% of Total) 2016 18.4 40.1 48.7 81.1 2000

Population Density (per Km²) 2016 16.4 41.3 65.1 33.8 1500 GNI per Capita (US $) 2015 390 2 153 4 509 41 932 1000 Labor Force Participation *- Total (%) 2016 64.7 65.7 63.5 60.0 Labor Force Participation **- Female (%) 2016 40.3 55.7 48.9 52.1 500

Sex Ratio (per 100 female) 0

2000 2011 2015 2009 2010 2012 2013 2014 2016 101.7 100.1 106.0 105.0 2005 Human Dev elop. Index (Rank among 187 countries) 2015 187 ...... Popul. Liv ing Below $ 1.90 a Day (% of Population) 2014 45.7 ......

N ig er A fri ca Demographic Indicators Population Grow th Rate - Total (%) 2016 4.1 2.5 1.3 0.6 Population Grow th Rate - Urban (%) 2016 5.5 3.6 2.4 0.8 Population < 15 y ears (%) 2016 50.5 40.9 27.9 16.8 Population Growth Rate (%) Population 15-24 y ears (%) 2016 18.0 19.3 16.9 12.1 4.5 Population >= 65 y ears (%) 2016 2.6 3.5 6.6 17.2 4.0 Dependency Ratio (%) 2016 113.3 79.9 54.3 52.0 3.5 Female Population 15-49 y ears (% of total population) 2016 20.5 24.0 25.7 22.8 3.0 2.5 Life Ex pectancy at Birth - Total (y ears) 2016 62.3 61.5 69.9 80.8 2.0 Life Ex pectancy at Birth - Female (y ears) 2016 63.4 63.0 72.0 83.5 1.5 Crude Birth Rate (per 1,000) 2016 49.0 34.4 20.7 10.9 1.0 0.5

Crude Death Rate (per 1,000) 2016 8.6 9.1 7.6 8.6 0.0

2009 2012 2014 2005 2010 2011 2013 2015 Infant Mortality Rate (per 1,000) 2015 57.1 52.2 34.6 4.6 2000 Child Mortality Rate (per 1,000) 2015 95.5 75.5 46.4 5.5 Total Fertility Rate (per w oman) 2016 7.5 4.5 2.6 1.7 N ige r A fric a Maternal Mortality Rate (per 100,000) 2015 553.0 476.0 237.0 10.0 Women Using Contraception (%) 2016 16.0 31.0 62.2 ...

Health & Nutrition Indicators Phy sicians (per 100,000 people) 2005-2015 1.9 41.6 125.7 292.2 Life Expectancy at Birth Nurses and midw iv es (per 100,000 people) 2005-2015 14.0 120.9 220.0 859.4 (years) Births attended by Trained Health Personnel (%) 2010-2015 29.3 53.2 69.1 ... 80 Access to Safe Water (% of Population) 2015 58.2 71.6 89.4 99.5 70 60 Access to Sanitation (% of Population) 2015 10.9 39.4 61.5 99.4 50 Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 40 2015 0.5 3.4 ...... 30 Incidence of Tuberculosis (per 100,000) 2015 95.0 240.6 166.0 12.0 20 Child Immunization Against Tuberculosis (%) 10

2015 77.0 81.8 ...... 0

2009 2013 2005 2010 2011 2012 2014 2015 Child Immunization Against Measles (%) 2015 73.0 75.7 83.9 93.9 2000 Underw eight Children (% of children under 5 y ears) 2010-2015 37.9 18.1 15.3 0.9 Prev alence of stunding 2010-2014 43.0 33.3 25.0 2.5 N ig er A fri ca Prev alence of undernourishment (% of pop.) 2015-2016 9.5 16.2 12.7 ... Public Ex penditure on Health (as % of GDP) 2014 3.2 2.6 3.0 7.7

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2010-2016 72.5 101.2 104.9 102.4 Primary School - Female 2010-2016 66.8 98.4 104.4 102.2 Infant Mortality Rate Secondary School - Total 2010-2016 20.7 52.6 71.1 106.3 ( Per 1000 ) Secondary School - Female 2010-2016 17.2 50.2 70.5 106.1 120 Primary School Female Teaching Staff (% of Total) 2010-2016 49.7 47.1 59.8 81.0 100 Adult literacy Rate - Total (%) 2010-2015 19.1 66.8 82.3 ... 80 Adult literacy Rate - Male (%) 2010-2015 27.3 74.3 87.1 ... 60 Adult literacy Rate - Female (%) 2010-2015 11.0 59.4 77.6 ... 40 Percentage of GDP Spent on Education 2010-2015 6.7 5.0 4.0 5.0 20

2005 2012 2009 2010 2011 2013 2014 2015 Environmental Indicators 2000 Land Use (Arable Land as % of Total Land Area) 2014 12.6 8.7 11.2 10.3 Agricultural Land (as % of land area) 2014 35.4 41.7 37.9 36.4 Forest (As % of Land Area) 2014 0.9 23.2 31.4 28.8 N ig er A fri ca Per Capita CO2 Emissions (metric tons) 2014 0.1 1.1 3.5 11.0

III

Nigeria COMPARATIVE SOCIO-ECONOMIC INDICATORS

Develo- Develo- Year Nigeria Africa ping ped Countries Countries Basic Indicators GNI Per Capita US $ Area ( '000 Km²) 2016 924 30,067 97,418 36,907 Total Population (millions) 2016 187.0 1,214.4 6,159.6 1,187.1 3500 Urban Population (% of Total) 2016 49.0 40.1 48.7 81.1 3000 Population Density (per Km²) 2016 205.3 41.3 65.1 33.8 2500 2000 GNI per Capita (US $) 2015 2820 2 153 4 509 41 932 1500 Labor Force Participation *- Total (%) 2016 56.4 65.7 63.5 60.0 1000 Labor Force Participation **- Female (%) 2016 48.5 55.7 48.9 52.1 500

Sex Ratio (per 100 female) 0

2000 2011 2015 2009 2010 2012 2013 2014 2016 103.8 100.1 106.0 105.0 2005 Human Dev elop. Index (Rank among 187 countries) 2015 152 ...... Popul. Liv ing Below $ 1.90 a Day (% of Population) 2009 53.5 ......

N ig er ia A fri ca Demographic Indicators Population Grow th Rate - Total (%) 2016 2.6 2.5 1.3 0.6 Population Grow th Rate - Urban (%) 2016 4.5 3.6 2.4 0.8 Population < 15 y ears (%) 2016 44.0 40.9 27.9 16.8 Population Growth Rate (%) Population 15-24 y ears (%) 2016 19.1 19.3 16.9 12.1 3.0 Population >= 65 y ears (%) 2016 2.7 3.5 6.6 17.2 2.5 Dependency Ratio (%) 2016 87.6 79.9 54.3 52.0 Female Population 15-49 y ears (% of total population) 2016 22.7 24.0 25.7 22.8 2.0 Life Ex pectancy at Birth - Total (y ears) 2016 53.3 61.5 69.9 80.8 1.5 Life Ex pectancy at Birth - Female (y ears) 2016 53.7 63.0 72.0 83.5 1.0 Crude Birth Rate (per 1,000) 2016 38.6 34.4 20.7 10.9 0.5

Crude Death Rate (per 1,000) 2016 12.5 9.1 7.6 8.6 0.0

2009 2012 2014 2005 2010 2011 2013 2015 Infant Mortality Rate (per 1,000) 2015 69.4 52.2 34.6 4.6 2000 Child Mortality Rate (per 1,000) 2015 108.8 75.5 46.4 5.5 Total Fertility Rate (per w oman) 2016 5.5 4.5 2.6 1.7 N ige ria A fric a Maternal Mortality Rate (per 100,000) 2015 814.0 476.0 237.0 10.0 Women Using Contraception (%) 2016 16.4 31.0 62.2 ...

Health & Nutrition Indicators Phy sicians (per 100,000 people) 2005-2015 37.6 41.6 125.7 292.2 Life Expectancy at Birth Nurses and midw iv es (per 100,000 people) 2005-2015 148.9 120.9 220.0 859.4 (years) Births attended by Trained Health Personnel (%) 2010-2015 38.1 53.2 69.1 ... 80 Access to Safe Water (% of Population) 2015 68.5 71.6 89.4 99.5 70 60 Access to Sanitation (% of Population) 2015 29.0 39.4 61.5 99.4 50 Percent. of Adults (aged 15-49) Liv ing w ith HIV/AIDS 40 2015 ... 3.4 ...... 30 Incidence of Tuberculosis (per 100,000) 2015 322.0 240.6 166.0 12.0 20 Child Immunization Against Tuberculosis (%) 10

2015 68.0 81.8 ...... 0

2009 2013 2005 2010 2011 2012 2014 2015 Child Immunization Against Measles (%) 2015 54.0 75.7 83.9 93.9 2000 Underw eight Children (% of children under 5 y ears) 2010-2015 19.8 18.1 15.3 0.9 Prev alence of stunding 2010-2014 32.9 33.3 25.0 2.5 N ig er ia A fri ca Prev alence of undernourishment (% of pop.) 2015-2016 7.0 16.2 12.7 ... Public Ex penditure on Health (as % of GDP) 2014 0.9 2.6 3.0 7.7

Education Indicators Gross Enrolment Ratio (%) Primary School - Total 2010-2016 93.7 101.2 104.9 102.4 Primary School - Female 2010-2016 92.8 98.4 104.4 102.2 Infant Mortality Rate Secondary School - Total 2010-2016 55.7 52.6 71.1 106.3 ( Per 1000 ) Secondary School - Female 2010-2016 53.5 50.2 70.5 106.1 120 Primary School Female Teaching Staff (% of Total) 2010-2016 52.9 47.1 59.8 81.0 100 Adult literacy Rate - Total (%) 2010-2015 59.6 66.8 82.3 ... 80 Adult literacy Rate - Male (%) 2010-2015 69.2 74.3 87.1 ... 60 Adult literacy Rate - Female (%) 2010-2015 49.7 59.4 77.6 ... 40 Percentage of GDP Spent on Education 2010-2015 ... 5.0 4.0 5.0 20

2005 2012 2009 2010 2011 2013 2014 2015 Environmental Indicators 2000 Land Use (Arable Land as % of Total Land Area) 2014 37.3 8.7 11.2 10.3 Agricultural Land (as % of land area) 2014 77.7 41.7 37.9 36.4 Forest (As % of Land Area) 2014 8.1 23.2 31.4 28.8 N ig er ia A fri ca Per Capita CO2 Emissions (metric tons) 2014 0.5 1.1 3.5 11.0

Annex 2: AfDB Portfolio in Burkina Faso and Niger

Burkina Faso (As at 30 April 2017

Project Name Approval Approved Complet. Disbursed Disbursem. Date Amount Date Amount Rate Project for the Electrification of Suburban 0% 1 Areas of Ouagadougou and Bobo-Dioulasso 21/09/2016 27.23 31/12/2021 N/A 2 Internal Access Roads Project 13/11/2013 46.44 31/12/2019 7.76 16.67% 3 Burkina-Faso Facilitation Corridor 27/06/2012 106.34 31/12/2017 50.97 47.90% 4 Support Project for the Bagré Growth Pole 29/04/2015 21.00 30/04/2021 3.00 14.30% 5 Participatory Forest Management Project 28/11/2013 7.67 30/06/2018 1.42 18.50% Cashew Development Support Project in the 6 0% Comoé Basin for REDD-(PADA-REDD+) 17/01/2017 5.86 31/12/2022 N/A 7 PPG PGFC/REDD++ FIP Preparation 22/03/2013 0.36 30/06/2017 0.14 38.90% 8 Resilience Enhancement Programme - P2RS 15/10/2014 25.45 31/12/2019 1.91 7.50% 9 Resilience Enhancement Programme - P2RS 15/10/2014 10.00 31/12/2019 1.87 18.70% PPF Insertion for Agro-sylvo-pastoral Sector 1.70% 10 Youth and Women 25/05/2016 0.60 31/08/2017 0.01 Sanitation Project for Ouaga Peripheral 41.40 % 11 Neighbourhoods 09/10/2013 33.02 30/06/2018 13.66 Study for the Rehabilitation of the NARE 4.60 % 12 Underground Dam 11/04/2016 0.66 31/12/2018 0.03 Support Project for Economic 14.80% 13 Transformation (PATECE) 17/09/2014 10.00 30/09/2018 1.40 Private Sector - Africa SME Program - 100% 14 Fidelis 19/06/2014 2.00 30/07/2017 2.00 15 Support to the Shea Butter Value Chain 12/07/2016 0.72 30/06/2018 N/A 0 Grant of a Line of Credit to Coris Bank 0 16 International 23/11/2016 38.00 30/06/2019 N/A TOTAL 335.35 84.13 28.1

Niger (As at 30 September 2017

Project Name Authorization Commitment Closing Approved Disbursed Disbursement Date Date Date Amount Amount Rate MARADI, ZINDER AND THAOUA WATER 20/09/2011 29/11/2011 12/07/2012 30/11/2018 55.74 9.34 16.76% MOBILIZATION PROJECT MARADI, ZINDER AND THAOUA WATER 20/09/2011 29/11/2011 12/07/2012 30/11/2018 65.15 23.39 35.90% MOBILIZATION PROJECT KANDADJI ECOSYSTEMS REGENERATION 29/10/2008 17/11/2008 15/10/2009 30/12/2017 20.13 20.00 99.35% AND DEVELOPMENT PROGRAMME KANDADJI ECOSYSTEMS REGENERATION 29/10/2008 17/11/2008 15/10/2009 30/12/2017 38.10 20.00 52.49% AND DEVELOPMENT PROGRAMME PPCR-NIGER- INFORMATION AND 24/09/2012 22/11/2012 17/12/2013 31/12/2018 17.91 6.73 37.58% DEVELOPMENT PROJECT PPCR-NIGER- INFORMATION AND 24/09/2012 22/11/2012 17/12/2013 31/12/2018 7.12 2.48 34.83% DEVELOPMENT PROJECT PPCR-NIGER- RESOURCE MOBILIZATION 25/09/2012 22/11/2012 17/12/2013 31/12/2018 17.33 8.86 51.13% AND DEVELOPMENT PROJECT PPCR-NIGER – RESOURCE MOBILIZATION 25/09/2012 22/11/2012 17/12/2013 31/12/2018 29.22 6.73 23.03% AND DEVELOPMENT PROJECT RURAL DWSS PROJECT PHASE 2 20/09/2011 29/11/2011 10/09/2012 30/11/2017 64.03 16.00 24.99% RURAL DWSS PROJECT PHASE 2 20/09/2011 29/11/2011 10/09/2012 30/11/2017 99.83 33.50 33.56% PREPARATION AND DEVELOPMENT OF THE 23/12/2013 16/04/2014 12/06/2014 30/05/2018 53.34 0.84 1.57% NATIONAL ACTION PLAN SONIBANK SOCIETE NIGERIENNE DE 16/01/2013 08/07/2013 12/09/2013 31/12/2016 100.00 10.89 10.89% BANQUE SONIBANK SOCIETE NIGERIENNE DE 04/11/2015 14/10/2016 08/07/2021 0.00 5.16 0.00% BANQUE EDUCATION AND TRAINING DEVELOPMENT 15/12/2010 22/12/2010 18/02/2011 31/07/2019 43.43 7.87 18.12% SUPPORT PROJECT EDUCATION AND TRAINING DEVELOPMENT 15/12/2010 22/12/2010 18/02/2011 31/07/2019 42.45 17.63 41.53% SUPPORT PROJECT INTERNAL RESOURCE MOBILIZATION 26/01/2012 10/02/2012 25/01/2013 30/09/2018 64.16 10.00 15.59% SUPPORT PROJECT FINANCIAL REFORM AND SECURITY 04/11/2015 14/11/2015 11/12/2015 31/12/2016 100.00 20.00 20.00% SUPPORT PROGRAMME FINANCIAL REFORM AND SECURITY 02/11/2016 07/11/2016 19/01/2017 30/06/2017 100.00 10.00 10.00% SUPPORT PROGRAMME NIGER- INSECURITY RESILIENCE 15/10/2014 27/01/2015 02/11/2015 31/03/2020 2.00 14.48 72.50% ENHANCEMENT PROGRAMME TRANSAFRICAN ROAD PROJECT (RTS)- 11/12/2013 08/03/2014 12/06/2015 31/12/2019 11.03 58.98 53.40% NIGER NIGER – EMERGENCY HUMANITARIAN 19.08.2016 04.11.2016 31.08.2017 0.71 0.00% ASSISTANCE TO THE WAR DISPLACED 0.71 RURAL, SUBURBAN AND URBAN 09.12.2016 10.03.2017 31.12.2020 15.07 15.07 0.00% ELECTRIFICATION PROJECT RURAL, SUBURBAN AND URBAN 09.12.2016 10.03.2017 31.12.2020 29.25 0.00% ELECTRIFICATION PROJECT 29.25 RURAL, SUBURBAN AND URBAN 09.12.2016 10.03.2017 31.12.2020 7..40 0.00% ELECTRIFICATION PROJECT 7.40 TRANSSAHARAN OPTICAL FIBRE 09.12.2016 06.04.2017 30.06.2021 19.38 0.00% BACKBONE (DTS) 19.39

Annex 3: Intervention of Other Donors at National Level in the Four Countries of the Project

Financing Country Projects Donors Period Amounts

Millennium Challenge Corporation MCC USD 375 000 000 2014-2020 Benin Energy Services Improvement Project WB USD 60 000 000 2017-2023

AFD XOF 7 500 000 000 2016-2020 Ghana-Burkina Faso Interconnection XOF EIB 15 000 000 000 Burkina Faso Zagtouli Photovoltaic Plant EIB 2016-2017 XOF Reinforcement of the Bobo Thermal Plant WADB 2016-2017 15 000 000 000 Energy Access Project WB USD 41 100 000 Niger-Electricity Access Expansion WB USD 65 000 000 2016-2020 Project Soraz-Zinder and Maradi-Malbaza 132 kV China USD 73 320 000 2015-2017 Line Niger Electricity Distribution in 14 New Neighbourhoods of Niamey and AFD EUR 41 000 000 2015-2020 Connection of Gouré and Ouallam Towns to the Network Project for the Reinforcement Water AFD USD 170 000 000 2016-2020 Supply around Abuja City. Project for the Modernization of the National Institute for Training in AFD 2016-2020 Electricity Trades Nigeria Line of Credit for the Investments of USD 42 600 000 AFD 2016-2021 Electricity Distribution Companies EUR 8 700 000 Nigeria Power Sector Guarantees WB USD 395 000 000 2014-2019 Electricity and Gas Services Improvement WB USD 300 000 000 2012-2019 Project I and II

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Annex 4: Map of the Project Area

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Annex 5: Organization Chart of the PMU

Annex 6: Justification Note on the Level of Counterpart Contribution for Burkina Faso and Niger

This note aims to justify a waiver to finance the Nigeria-Niger-Benin-Burkina Faso 330 kV Power Interconnection Project with ADF resources, in accordance with the Policy relating to Expenditure Eligible for Bank Group

Financing (ADB/BD/WP/2007/106/Rev.2- ADF/BD/WP/207/72/Rev.2 of 2 May 2008).

A. BURKINA FASO

Burkina Faso’s Commitment to Implement its Development Programme: Burkina Faso adopted its second national development programme (2016-2020 PNDES), which is part of a structural dynamic aimed at transforming the country’s economy. The PNDES is structured around three main strategic thrusts: (i) reform institutions and modernize the administration, (ii) develop human capital and (iii) revitalize growth sectors for the economy and jobs. The third strategic thrust includes energy and aims to achieve the United Nations seventh Sustainable Development Goal (SDG 7): Ensure access for all to reliable, sustainable and modern energy services, and at an affordable price. As concerns energy, the vision announced in the 2016-2020 PNDES is explained in the reference framework of the national energy strategy, which is the Energy Sector Policy Letter (LPSE) adopted by Government on 14 November 2016. The LPSE sets three objectives: (i) increase the share of renewable energies in the national energy mix; (ii) promote energy efficiency; and (iii) reinforce the conventional energy generation fleet. By 2020, the LPSE plans to achieve a national electrification rate of 45 %, increase the installed capacity from 325 to 1000 MW, including 50% of renewable energies, and increase subscribers to the network from 500 000 to 1 000 000. The LPSE is structured around seven strategic thrusts, notably the development of energy generation from renewable sources, increased access by the population to modern energy, promotion of regional energy cooperation and the search for the sector’s financial balance.

The Financing Allocated by the Country to the Sector Targeted by Bank Assistance: The estimated cost of the 2016-2020 PNDES stands at CFAF 12 850 billion, including 478 billion (3.72%) that will be allocated to the energy sector. According to forecasts from the Ministry of Energy, power needs will be around 1 000 MW in 2020, an increase of more than 200 % compared to 2016. Given the strong predominance of thermal energy in the national mix, Government has set about developing its solar potential to reduce the average generation cost per kWh. In this context, a first photovoltaic plant of 33 MWc is being built in Zagtouli, on the outskirts of Ouagadougou, with the support of the EIB and the AFD. This solar potential development programme is supported by the Bank, which intends to finance a 50 MWc plant, in collaboration with the AFD. The achievement of the LPSE’s strategic objectives will then require increased generation capacity and the extension of transmission and distribution networks, and consequently a greater need for funding than the resources provided by Government.

Burkina Faso’s Budget Situation and Debt Level: As part of a medium-term expenditure framework, fiscal policy is based on an increase in the expenditure needed to finance infrastructure and the other development needs, in a context where security constraints are increasingly demanding resources from the State. The overall budget deficit (commitments basis) showed 3.1% of GDP in 2016, up sharply compared to the 2% recorded in 2015. For fiscal year 2017, the expansion of investment expenditure planned in the PNDES and the maintenance of recurrent expenditure to meet social and security demands, would lead to a deeper widening of the budget deficit: 4.6% of the GDP. As part of this management of public finances, government held discussions with the IMF for a nine- month programme supported by the Extended Credit Facility (ECF), with a disbursement on completion. The insecurity context, on the one hand, and strong social demand, on the other hand, will continue to weigh heavily on public finances.

Burkina Faso’s Financing Parameters: The country’s financing parameters (CFP) concerning the sharing of project costs between the Bank and Burkina Faso are being prepared. While waiting for the Bank to define its own financing parameters, the analysis made by the World Bank for Burkina Faso can serve. For this sister institution, financing can reach 100% of the total project cost (all taxes included) for this country, and this will be the case for this project, to which it can contribute up to UA 130.16 million.

In conclusion, based on the above, and at Government’s request, the level of the counterpart contribution may be acceptable. Therefore, the contribution of the Government of Burkina Faso (UA 1.60 million) to project financing will be used to finance all expropriation costs and the fiscal expenditure associated to this project, resulting from exemptions from customs duties and other taxes.

B. NIGER

Niger’s Commitment to Implement its Development Programme: During this year, Government prepared its Economic and Social Development Plan for the period 2017-2021 (2017-2021 PDES) which aims overall to strengthen the resilience of the economic and social system in order to build a peaceful country, well governed with an emerging and sustainable economy, and a society founded on the values of equity and sharing of the fruits of progress. The 2017-2021 PDES is structured around the following strategic thrusts: (i) Cultural renaissance, (ii) Acceleration of economic growth; (iii) Improvement of governance, peace and security; (iv) Sustainable environmental management; and (v) Social development and demographic transition.

The country makes efforts to allocate substantial resources in the sector, despite the pressure on public finances to ensure national security. Under the PDES Priority Action Plan (2017-2021 PAP-PDES), own resources allocated to the specific objective “Development of energy infrastructure” stand at CFAF 26.23 billion and account for 7.46 % of needs estimated at CFAF 353 billion.

The cost of implementing the PAP-PDES was estimated at CFAF 922 billion, the share reserved for energy infrastructure development standing at CFAF 26.35 billion, or 2.86 %. The sector’s priority actions aim to combine the construction of solar (Gorou Banda, Guesselbodi, Soraz, Maradi, Zinder and Lossa) and thermal plants (additional generator at Gorou Banda, Miradi and Malbaza). This development programme requires more substantial resources than those that can be mobilized at local level.

The Country’s Budget Situation and Debt Level: Since the 2014 oil crisis, the basic budget deficit has deepened from -0.7% of GDP in 2013 to -7.5 % in 2015. In 2016, and thanks to adjustment efforts, it dropped to -4.4%. Government budget policy consisted in financing energy transmission infrastructure. A substantial increase in security and defence spending was also observed to address security threats. Niger’s risk of debt distress is considered moderate, according to the debt sustainability analysis, jointly carried out by the IMF and the World Bank in 2016. However, Nigerien authorities were called upon to adopt more prudent debt management to preserve its sustainability. Niger’s debt level has risen from 25.6 % of GDP in 2013 to 47 % of GDP in 2016, with State equity investments in the mining and hydrocarbons sectors, investments in structuring infrastructure, PPP contracts as well as securitization of domestic arrears. Macro-economic prospects are positive, although subject to various risks. Growth should accelerate to reach 5.4% in 2019, driven by food crops under the impetus of the 3N initiative (Nigeriens Nourish Nigeriens), the expansion of extractive industries and increased public and private investments. The fiscal consolidation policy being implemented under the Extended Credit Facility (ECF), signed with the IMF in January 2017,

and the support of other TFPs, including the Bank, should lead to a fall in the primary deficit to -2.8% in 2019. The increase in the money supply is projected at a level between 10.6 and 11.1% per year, at an overall unchanging rate compared to 2016. Inflation should remain low below 3%. However, the fragile regional security situation and natural disasters (floods, drought) are the major risks that can affect these good prospects. Government’s challenge is to make growth more resilient and inclusive.

The Country’s Financing Parameters: The country’s financing parameters (CFP) concerning the sharing of project costs between the Bank and Republic of Niger are being prepared. While waiting for the Bank to define its own financing parameters, the analysis made by the World Bank for Burkina Faso can serve. For this sister institution, financing can reach 100 % of the total project cost (all taxes included) for this country, and this will be the case for this project to which it can contribute up to UA 137.51 million.

In conclusion, based on the above, and at Government’s request, the counterpart contribution may be acceptable. The contribution of the Government of Niger (UA 1.35 million) to project financing, will then be used to finance all expropriation costs. Added to this amount is the fiscal expenditure associated to this project resulting from exemptions from customs duties and other taxes.

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