WAPP West Africa Power Pool
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Document of The World Bank FOR OFFICIAL USE ONLY Report No: 60789-AFR Public Disclosure Authorized PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 9.9 MILLION (US$16 MILLION EQUIVALENT) Public Disclosure Authorized TO BURKINA FASO AND A PROPOSED CREDIT IN THE AMOUNT OF SDR 16 MILLION (US$25.9 MILLION EQUIVALENT) TO Public Disclosure Authorized THE REPUBLIC OF GHANA IN SUPPORT OF THE FIRST PHASE OF THE INTER-ZONAL TRANSMISSION HUB PROJECT OF THE WEST AFRICA POWER POOL (APL3) PROGRAM June 9, 2011 Energy Group Sustainable Development Department Africa Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective as of April 30, 2011) Currency Unit = West Africa Franc CFA /Ghana Cedi FCFA 441.4387 = US$1 Ghana Cedi 1.4945 = US $ 1 US$ 1.62096 = SDR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AFD Agence Française de Développement (French Development Agency) ADB African Development Bank APL Adaptable Program Loan ARSE Autorité de Régulation du Secteur de l’Electricité BF Burkina Faso BOAD Banque Ouest Africaine de Développement (West African Development Bank) BSP Bulk Supply Point CAS Country Assistance Strategy CEB Communauté Electrique du Bénin (Benin/Togo Generation and Transmission Power Company) CEET Compagnie Energie Electrique du Togo (Togo Power Utility) CRCB Centre Régional de Consommation de Bobo-Dioulasso (Regional Center for consumption in Bobo-Dioulasso) CRCO Centre Régional de Consommation de Ouagadougou (Regional Center for consumption in Ouagadougou) DSCR Debt Service Coverage Ratio EA Environmental Assessment ECG Electricity Company of Ghana ECOWAS Economic Community of West African States EEP ECOWAS Energy Protocol EIB European Investment Bank EMS Energy Management System ERERA ECOWAS Regional Electricity Regulatory Authority ERR Economic Rate of Return ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan FCFA CFA Franc FM Financial Management GRIDCo Ghana Grid Company HFO Heavy Fuel Oil HV High Voltage IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding ii IDA International Development Association IPP Independent Power Producer IRR Internal Rate of Return ISP Implementation Support Plan JIC Joint Implementation Committee LCO Light Crude Oil LNG Liquefied Natural Gas LPG Liquefied Petroleum Gas MCF thousand cubic feet MMCFD Million Cubic Feet per Day M&E Monitoring and Evaluation NCB National Competitive Bidding NCC National Control Center NED Northern Electricity Department NEPAD New Partnership for Africa’s Development NGO Non Governmental Organization NPV Net Present Value OMVS Organisation pour la Mise en Valeur du fleuve Sénégal (Senegal River Basin Organization) PDO Project Development Objective PIU Project Implementation Unit PURC Public Utilities Regulatory Commission RIAS Regional Integration Assistance Strategy TWh Terawatt-hour USAID United States Agency for International Development VRA Volta River Authority WAGP West Africa Gas Pipeline WAPP West Africa Power Pool Regional Vice President: Obiageli K. Ezekwesili Regional Integration Director: Yusupha B. Crookes Sector Director: Jamal Saghir Acting Sector Manager: Anna M. Bjerde Task Team Leader: Issa M.Diaw iii AFRICA THE FIRST PHASE OF THE INTER-ZONAL TRANSMISSION HUB PROJECT OF THE WEST AFRICA POWER POOL (APL3) PROGRAM Table of Contents I. Strategic Context ................................................................................................................ 1 A. Regional and Country Context ......................................................................................... 1 B. Sectoral and Institutional Context .................................................................................... 3 C. Higher Level Objectives to which the Project Contributes .............................................. 7 II. Project Development Objectives ....................................................................................... 8 A. Project Beneficiaries ........................................................................................................ 8 B. PDO Level Results Indicators .......................................................................................... 8 III. Project Description ............................................................................................................ 8 A. Project components .......................................................................................................... 8 B. Project Financing.............................................................................................................. 9 C. Lessons Learned and Reflected in the Project Design ................................................... 12 IV. Implementation ................................................................................................................ 14 A. Institutional and Implementation Arrangements ............................................................ 14 B. Results Monitoring and Evaluation ................................................................................ 14 C. Sustainability .................................................................................................................. 14 V. Key Risks and Mitigation Measures .............................................................................. 15 VI. Appraisal Summary ......................................................................................................... 16 A. Economic and Financial Analysis .................................................................................. 16 B. Technical ........................................................................................................................ 19 C. Financial Management ................................................................................................... 19 D. Procurement ................................................................................................................... 20 E. Social and Environmental Assessment (including safeguards)...................................... 21 Annex 1. Results Framework and Monitoring ......................................................................... 25 Annex 2. Detailed Project Description ..................................................................................... 27 Annex 3. Implementation Arrangements ................................................................................ 33 Annex 4. Operational Risk Assessment Framework (ORAF): Disclosable version ............. 54 Annex 5. Implementation Support Plan ................................................................................... 58 Annex 6. Economic and Financial Analysis ............................................................................. 61 Annex 7: Implementation Status of projects ............................................................................ 80 Annex 8. Team Composition ...................................................................................................... 85 Annex 9. Map IBRD 38632 ........................................................................................................ 86 iv AFRICA THE FIRST PHASE OF THE INTER-ZONAL TRANSMISSION HUB PROJECT OF THE WEST AFRICA POWER POOL (APL3) PROGRAM PROJECT APPRAISAL DOCUMENT AFTEG Date: June 9, 2011 Sector(s): Power (85 percent); Technical Regional Integration Director: Yusupha B. Assistance (15 percent) Crookes Theme(s): Regional Integration (P) Sector Director: Jamal Saghir EA Category: B (Partial Assessment) Acting Sector Manager: Anna M. Bjerde Team Leader(s): Issa M. Diaw Project ID:P094919 Lending Instrument: Adaptable Program Loan Project Financing Data: Proposed terms: Standard Terms for the IDA Grant to Burkina Faso Maturity of 35 years, with 10-year grace period for the IDA Credit to Ghana [ ] Loan [X] Credit [X] Grant [ ] Guarantee [ ] Other: Source Total Amount (US$M) Total Project Cost (US$m.): 111 Cofinancing: European Investment Bank 30.9 Agence Francaise de Développement 32.3 SONABEL 3.4 GRIDCo 2.5 Borrowers: Burkina Faso and the Republic of Ghana Total Bank Financing (US$m): IBRD IDA 41.9 New Recommitted v Borrowers: Burkina Faso Ministère de l’Economie et des Finances Address: 03 BP 7050 Ouagadougou 03, Burkina Faso Fax: +226 50 31 27 15 Republic of Ghana Ministry of Finance and Economic Planning Address: PO Box MB40. Accra, Ghana Fax: +233 302 66 70 69/ 302 66 38 54 Implementing Agencies: 1. SONABEL Contact Person: Mr. Ki Siengui Apollinaire Telephone No: +226 50 31 54 00 Fax No.:+ 226 50 31 03 40 Email: [email protected] 2. GRIDCo: Contact Person: Mr. Charles Darku Telephone No: +233-30-3304818 Fax No.: +233-302-676180 Email:[email protected] Estimated Disbursements (Bank FY/US$ m) FY FY12 FY13 FY14 FY15 FY16 Annual (Burkina 2.1 6.8 5.4 1.2 0.5 Faso) Cumulative (Burkina 2.1 8.9 14.3 15.5 16 Faso) Annual (Ghana) 3.7 10.4 8.4 3 0.4 Cumulative (Ghana) 3.7 14.1 22.5 25.5 25.9 Project Implementation Period: June, 2011- December, 2015 Expected effectiveness date: November , 2011 Expected closing date: December 31, 2015 Does the project depart from the CAS in content or other significant ○ Yes [x] No respects? Does the project require any exceptions from Bank policies? ○ Yes [x] No Have these been approved/endorsed