AFRICAN DEVELOPMENT BANK
PROJECT : “DESERT TO POWER” INITIATIVE – YELEEN SOLAR PLANT DEVELOPMENT AND NATIONAL POWER SYSTEM REINFORCEMENT PROJECT
COUNTRY : BURKINA FASO
PROJECT APPRAISAL REPORT
Date : September 2019
Team Leader Adama MOUSSA, Chief Renewable Energy Officer PERN1 Co-Team Leader Adiaratou BAH OBRE, Principal Investment Officer PERN1 Modeste KINANE, Principal Environmental Officer SNSC/RDGW4 Sylvain COULIBALY, Senior Procurement Operations Officer SNFI1/COBF Mohamed Aliou DIALLO, Senior Financial Management SNFI2/COML Officer Adèle K. OUEDRAOGO, Disbursement Assistant FIFC3/COBF Team Members Tidiane OUEDRAOGO, Consultant, Gender Specialist RDGW Mohamed SOKONA, Climate Change Expert PICU4 Appraisal Aurélie YAPI, Consultant, Financial Analysis and Modelling PERN1 Team Emile KEMAYOU, Principal Political Economist, Fragility RDTS/RDGW Expert Adwoa AYISI-SALAWOU, Consultant, Jurist PGCL1 Sector Division Engedasew NEGASH PERN1 Manager Country Manager Pascal YEMBILINE COBF Sector Director Daniel SCHROTH PERN Regional Director Marie-Laure AKIN-OLUGBADE RDGW
Raymond KITANDALA, Energy Operations Officer RDGW1 Sylvie MAHIEU, Principal Investment Officer PESR2 Firmin BRI, Energy Operations Officer RDGC1 Barnabé YOUGBARE, Country Programme Officer COBJ Moussa KONE, Principal Electrical Engineer RDGE1
AFRICAN DEVELOPMENT BANK
PROJECT : “DESERT TO POWER” INITIATIVE – YELEEN SOLAR PLANT DEVELOPMENT AND NATIONAL POWER SYSTEM REINFORCEMENT PROJECT PublicDisclosure Authorized COUNTRY : BURKINA FASO
PROJECT APPRAISAL REPORT
Disclosure Authorized Disclosure
Public
PERN/RDGW November 2019
Translated Document
TABLE OF CONTENTS
I. STRATEGIC THRUSTS AND RATIONALE ...... 1 1.1 Project Linkage with Country Strategy and Objectives ...... 1 1.2 Rationale for Bank Involvement ...... 2 1.3 Aid Coordination ...... 3 II. PROJECT DESCRIPTION ...... 4 2.1 Project Description and Components ...... 4 2.2 Technical Solution Adopted and Alternatives Explored ...... 4 2.3 Project Type ...... 5 2.4 Project Cost and Financing Mechanisms ...... 5 2.5 Project Area and Beneficiaries ...... 7 2.6 Participatory Approach in Project Identification, Design and Implementation ...... 7 2.7 Bank Group Experience and Lessons Reflected in the Project Design ...... 8 2.8 Key Performance Indicators...... 9 III. PROJECT FEASIBILITY ...... 9 3.1 Economic and Financial Performance ...... 9 3.2 Environmental and Social Impact ...... 9 IV. PROJECT IMPLEMENTATION ...... 12 4.1 Implementation Arrangements ...... 12 4.2 Monitoring ...... 14 4.3 Governance ...... 16 4.4 Sustainability ...... 16 4.5 Risk Management ...... 17 4.6 Knowledge Building ...... 17 V. LEGAL FRAMEWORK ...... 18 5.1 Legal Instrument ...... 18 5.2 Conditions Associated with the Bank Intervention ...... 18 5.3 Compliance with Bank Policies ...... 20 VI. RECOMMENDATION ...... 20
Annex I : Burkina Faso’s Comparative Socio-Economic Indicators ...... I Annex II: Table of Bank Portfolio in Burkina Faso ...... II Annex III: List of Related Projects in Burkina Faso Financed by the Bank and Other Development Partners in the Last Ten Years ...... V Annex IV: Map of Project Area ...... VI
CURRENCY EQUIVALENTS July 2019
UA 1 = XOF 801.337 UA 1 = EUR 1.22163 UA 1 = USD 1.39021 EUR 1 = XOF 655.957
FISCAL YEAR 1 January to 31 December
WEIGHTS AND MEASURES
1 kilometre (km) = 1,000 m 1 km² = 1,000,000 m² 1 hectare (ha) = 10,000 m² 1 tonne = 1,000 kg 1 kilojoule (kJ) = 1,000 Joule (J) 1 kilovolt (kV) = 1,000 Volt (V) 1 kilovolt-ampere (kVA) = 1,000 Volt-Ampere (VA) 1 kilowatt (kW) = 1,000 Watts 1 megawatt (MW) = 1,000,000 W = 1,000 kW 1 gigawatt (GW) = 1,000,000 kW = 1,000 MW 1 kilowatt-hour (kWh) = 1,000 Watt-hour = 3,600,000 Joules (J) 1 megawatt-hour (MWh) = 1,000,000 Wh = 1,000 kWh 1 gigawatt-hour (GWh) = 1,000,000 kWh = 1,000 MWh 1 tonne of oil equivalent (TOE) = 41,868 Joules = 11,630 kWh 1 million tonnes of oil equivalent (MTOE) = 1,000,000 TOE
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ACRONYMS AND ABBREVIATIONS
ABER Burkina Faso Rural Electrification Agency ADF African Development Fund AFD French Development Agency AfDB African Development Bank ANERE National Renewable Energies and Energy Efficiency Agency ARSE Energy Sector Regulation Agency BIDC ECOWAS Bank for Investment and Development BOAD Bank of West African Development BUNEE National Environmental Assessment Office CEC Control of Energy Consumption CSD-CEC Mines, Quarries and Energy Sector Dialogue Framework CSP Country Strategy Paper DG-CMEF General Directorate of Public Procurements and Financial Commitments Control EIB European Investment Bank ENPV Economic Net Present Value ERR Economic Rate of Return ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan EU-AIF European Union – Africa Investment Fund FIRR Financial Internal Rate of Return FRAP Full Resettlement Action Plan GCF Green Climate Fund GDP Gross Domestic Product HV High Voltage IEC Information, Education and Communication INSD National Institute of Statistics and Population Studies IPP Independent Power Producer IsDB Islamic Development Bank LV Low Voltage ME Ministry of Power (of Burkina Faso) MINEFID Ministry of the Economy, Finance and Development (of Burkina Faso) MV Medium Voltage MW Megawatt MWp Megawatt-peak NGO Non-Governmental Organisation NPV Net Present Value PEPU Electrification Project for the Ouagadougou and Bobo-Dioulasso Peri-Urban Areas PIU Project Implementation Unit PMU Project Management Unit PNDES National Economic and Social Development Plan PPP Public-Private Partnership PS-TIA “Industrial and Handicraft Transformation” Sector Policy RAP Abbreviated Resettlement Action Plan RDGW West Africa Regional General Directorate (of AfDB) RMC Regional Member Country SME/SMI Small and Medium-Sized Enterprise/Small and Medium-Sized Industry SONABEL National Electricity Corporation of Burkina Faso TOE Tonne of Oil Equivalent TFP Technical and Financial Partners UA Unit of Account UNDP United Nations Development Programme USD United States Dollar WAEMU West African Economic and Monetary Union WB World Bank
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PROJECT BRIEF BORROWER : Burkina Faso EXECUTING BODY : Ministry of Power (ME) EXECUTING AGENCY : National Electricity Corporation of Burkina (SONABEL)
Financing Plan
Sources Amounts Amount Instrument (EUR million) (UA million) ADB 48.82 39.97 Loan AFD 75.00 61.39 Loan EU 8.30 6,79 Grant SONABEL 4.57 3.74 Counterpart contribution (equity funds) TOTAL 136.69 111.89
Key Financial Information on the AfDB Loan
Loan Currency Euros (EUR) Loan Type Fully flexible loan Maturity To be determined (up to 25 years, including the grace period) Grace period To be determined (up to 8 years) Average loan maturity* To be determined (depending on the amortization profile) Repayment Half-yearly payments after the grace period Interest type Base rate + Cost of funds margin +Lending margin + maturity premium. The interest rate here should be higher or equal to zero Floating base rate Floating (6-months EURIBOR to be reset every 1st February and 1st August or any other acceptable rate). A floating base rate with a free fixing option Marginal cost of funds The Bank’s marginal cost of funds against 6 months EURIBOR. This margin is reset every 1st February and 1st August every year Loan margin 0.80% (80 base points (Bp)) Maturity bonus To be determined: - 0%, if average loan maturity <= 12.75 years - 0.10%, if 12.75
Timeframe – Key Milestones (expected)
Activities Dates Concept Note Approval April 2019 Project Approval November 2019 AfDB Loan Effectiveness April 2020 Date of Last AfDB Loan Disbursement December 2024 Completion Report March 2025 iii
EXECUTIVE SUMMARY
Project Overview: The Yeleen Solar Plants Development and National Power System Reinforcement Project1 is an investment operation aiming to deploy solar power plants and reinforce power grid. Specifically, it will increase and diversify electricity supply through the construction of 4 new 52 MWc photovoltaic (PV) plants and extend and increase power distribution networks in order to connect 30,000 new households, or about 200,000 people. The total project cost is estimated at EUR 136.69 million with the Bank contributing EUR 48.82 million (36%). The rest of the financing will be provided by AFD (55%), EU-AfIF (6%) and Government/SONABEL (3%). The project implementation is estimated to span a period of five years from 2020 to 2024.
Needs Assessment: In 2018, the national, urban and rural electrification rates were 21.34%, 68.63% and 3.05% respectively, while the national electricity coverage ratio2 was 35.94%. To improve access to quality energy services, guarantee energy efficiency and foster the competitiveness of the economy, the Government of Burkina Faso undertook several reforms in the energy sector including the adoption in 2016 of the Energy Sector Development Policy Letter (LPSE, 2016-2020) and in December 2017 the “Industrial and Handicrafts Transformation” Sector Policy (PS-TIA, 2018-2027). The goal set for 2027 is to achieve: (i) a national electrification rate of 60%; (ii) a national urban electrification rate of 90%; (iii) a national rural electrification rate of 30%; and (iv) national electricity coverage rate of 80%. Government also set the goal of increasing and diversifying energy supply through the massive development of renewable energy (mostly solar) to raise to 50% its share in total production by 2027 against about 14% in 2018 (hydro and solar).
Bank’s Value Added: The Bank’s long-term involvement in energy sector financing in Burkina Faso gives it significant comparative advantage. This project will supplement and strengthen operations that the Bank has financed in the energy sector in recent years, including the Electricity Infrastructure Strengthening and Rural Electrification Project (PRIELER, completed), the ongoing Electrification Project for the Ouagadougou and Bobo-Dioulasso Peri- Urban Areas (PEPU), the Multinational Nigeria-Niger-Benin-Burkina Faso Electricity Interconnection Project (ongoing) and the Energy Sector Reforms Support Programme (PARSE) that supports Government efforts to ensure inclusive access to energy.
Knowledge Building: A baseline situation will be established for monitoring and evaluation to draw lessons from the project’s implementation. SONABEL will prepare an inventory and update baseline data to serve as performance or alert indicators in periodic project reports. Also, the PAP (project affected persons) database to be established as part of the project (value added of the Bank’s intervention) will enable SONABEL to track all PAP data for all ongoing projects, including payments and related complaints. The main sources of project-related information that will be used by the country and the Bank are: (i) monitoring and evaluation reports; (ii) Bank supervision mission reports; (iii) resident consultant’s control mission reports; and (iv) financial audit reports. Lessons drawn from these various reports will inform the design and implementation of similar future Bank operations.
1 Yeleen means “light” in the local Bambara language (Dioula) 2 Ratio between the population living in electrified localities and the total population of the country. iv
RESULTS-BASED LOGICAL FRAMEWORK Project Country and Name: Burkina Faso – “Desert to Power” Initiative - Yeleen Solar Power Plants Development and Power System Reinforcement Project Project Goal: Help to increase and diversify national energy supply within a sustainable development framework and increase sustainable access to electricity to improve the living conditions of the population. PERFORMANCE INDICATORS Means of RESULTS CHAIN Baseline RISKS AND MITIGATION MEASURES Indicators (including CSIs) Situation Targets Verification (2017) The living conditions of the 1. Electricity access rate at national level 21.34% 80% Ministry of Risk: Insecurity in the country which can impede proper project population of Burkina Faso (2018) (2027) Power (ME) implementation in some areas of the country. are improved thanks to the SONABEL availability and affordability 2. Share of renewable energies in national electricity 14% 50% Mitigation Measures: (i) Government commitment to deploy the project of electrical energy from generation (2018) (2027) in all target areas in order to improve the living conditions of the local renewable sources residents and to deploy the necessary security arrangement; (ii) efforts made by Burkina Faso and the other G5 Sahel countries, with the support of partners to secure the entire region; (iii) location of project sites (close to inhabited and relatively less exposed areas); (iv) inclusion of security
IMPACT aspects in financial offers of works contractors; and (v) flexibility possibly offered to electricity distribution network construction companies in case of continuous deterioration of security in a given locality to execute similar works (quantitative) in other localities considering the existing need at the national level as with PRIELER (replacement of certain project localities electrified by Government/SONABEL before works, by other localities situated in the same area).
1. Greenhouse gas emissions 1.1 Quantities of CO2eq avoided per year thanks to the - 48,000 t CO2eq Ministry of Risk: The interconnected national grid’s (RNI) weak transit capacity to are avoided. project from 2024 Power evacuate all the projected solar power generated by 2025 with a strong SONABEL penetration of the latter in the energy mix and the instability of the RNI to 2. The national energy mix is 2.1 National solar power production capacity installed 34.8 MWc 523 MWc (2024) address the intermittence of solar power. improved (2018) (including 52.8
MWc thanks to the Mitigation Measures: (i) Existing interconnection of the grids in Burkina 3.1 Number of persons having access to electricity thanks project) Faso, neighbouring countries (Côte d’Ivoire, Ghana) and those under 3. Number of households to the project - construction (Nigeria – Niger – Benin - Burkina – Benin North 330 kV having access to electricity 200,000 (2025) backbone); and (ii) several projects being implemented (2018-2025) to increased 4.1 Permanent jobs (gender-disaggregated) created in the strengthen the national 90 kV and 225 kV grids.
operational phase - OUTCOMES 4. Permanent jobs created 200 (25% of them 5.1 Area of degraded land rehabilitated women) (2025) - 5.Degraded land rehabilitated 351 hectares of land reforested with trees (2025)
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Solar power plants connected - North-West Ouaga PV Plant (43 MWc) constructed - 01 Reports: Risk: Late mobilisation of land for the construction of the project power to the national power grid - Dori PV Power Plant (6 MWc) constructed - 01 Ministry of plants and the 90kV North-West Ouaga -Gonsin-Kossodo line corridor (33 - Diapaga PV Power Plant (2 MWc) constructed - 01 Energy (ME) km) for the evacuation of electricity generated by the North-West Ouaga - Gaoua PV (1 MWc) plant constructed - 01 SONABEL solar plant on the 90 kV network; - Length of 90 kV line constructed - 33 km Reports - 90/33 kV Gosin substation (North-West Ouaga) - 01 (progress, Mitigation Measures: (i) The process of acquisition of land necessary for constructed - 01 supervision, the deployment of all project plants has been initiated and is well underway - storage capacity of installed power (10 MW/8 MWh) completion) (60 ha land of the North-West Ouaga plant has been acquired by SONABEL); and (ii) the optimised choice of corridor and combined - Length of MV distribution lines constructed - 5,000 km overhead-underground technical option for the 90 kV line by laying an
Electricity distribution - Length of LV distribution lines constructed - 2,000 km underground cable (1.5 km) at the entrance to the Kossodo substation (peri- networks - Number of MV/LV transformer stations created - 500 urban) to minimise social impacts; and (iii) establishment of an effective - Number of new connections installed - 30,000 complaints reception and management mechanism. - Number of public lighting pots installed - 2,500
Risk: Default of companies tasked with the deployment of solar plants and OUTPUTS Study - Feasibility study of a “productive energy” project - the construction of power grids. conducted 01 Mitigation Measure: Recruitment of contractors through international Reports on the - Number of quarterly ESMP and RAP implementation - 16 quarterly competitive bidding process. implementation of ESMP and reports reports Resettlement Action Plan 1,000 (10% of Temporary jobs - Temporary (gender-disaggregated) jobs created - them women) 50 (50% of them - Number of (gender-disaggregated) trainees received - women) and trained Components Resources (EUR 136.69 million) Expenditure (EUR 136.69 million) 1. Solar power plants: (i) Construction, commissioning, operation and maintenance (for two years) of solar plants; (ii) ADB (Loan): EUR 48.82 million Solar plants : EUR 81.05 million
construction of power transmission structures (lines and substations); (ii) installation of solar power storage capacity. AFD (Loan/Grant): EUR 75.00 million Distribution networks: EUR 41.92 million S
EU-AfIF (Grant): EUR 8.30 million Project management: EUR 13.72 million IE 2. Distribution networks: (i) Construction of electricity distribution networks; and (ii) construction of connections. SONABEL: EUR 4.57 million
3. Project management: (i) Control and supervision of construction works of solar plants and power grids; (ii) external
ACTIVIT audits of project financial statements; (iii) external audits of procurements; (iv) logistical support for the project; (v) environmental and social management of the project; (vi) operation of the Project Implementation Unit (PIU); (vii) technical capacity building on the “solar” components targeting the Ministry of Energy and its field agencies including SONABEL; (viii) project monitoring and evaluation; and (ix) IEC and CEC (control of energy consumption) campaigns.
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INDICATIVE PROJECT IMPLEMENTATION SCHEDULE
2019 2020 2021 2022 2023 MAIN PROJECT ACTIVITIES Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 1. APPROVAL AND EFFECTIVENESS Board approval Signing of financing agreements Effectiveness of financing agreements Fulfilment of prior actions 2. CONSTRUCTION OF SOLAR PLANTS Design and launching of BDs for works Signing of works contracts Construction and commissioning of solar plants and operation and maintenance (two years) Installation and commissioning of energy storage devices and operation and maintenance (two years) Construction of electricity transmission lines 3. CONSTRUCTION OF DISTRIBUTION NETWORKS Design and publication of BDs for works Signing of contracts for the construction of distribution networks Household connection works Connection of households 4. PROJECT MANAGEMENT Recruitment of Consulting Engineer for solar plants Control and supervision works of solar plants Recruitment of Consulting Engineer for distribution networks Control and supervision works of distribution works Recruitment of Consulting Engineer for productive energy study Conduct of productive energy study Audit of project accounts Information, education and communication Compensation of project affected persons/Implementation of
ESMP
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REPORT AND RECOMMENDATIONS OF THE BANK MANAGEMENT TO THE BOARD OF DIRECTORS CONCERNING A PROPOSAL TO GRANT AN ADB LOAN TO BURKINA FASO TO FINANCE THE YELEEN SOLAR POWER DEVELOPMENT AND NATIONAL POWER GRID REINFORCEMENT PROJECT
Management hereby submits this report and recommendations concerning a proposal to grant an ADB loan of EUR 48.82 million to Burkina Faso to finance the Yeleen Solar Plants Development and National Power Grid Reinforcement Project as part of the “Desert to Energy” Initiative
I. STRATEGIC THRUSTS AND RATIONALE
1.1. Project Linkage with Country Strategy and Objectives
1.1.1. The National Plan for Economic and Social Development (PNDES) 2016-2020 adopted in July 2016 is the reference framework for development in Burkina Faso. Its general objective of structurally transforming the national economy to achieve a strong inclusive growth hinges on three strategic thrusts: (i) reform the institutions and modernize the administration; (ii) develop human capital; and (iii) stimulate the sectors with growth potential for the economy and employment. This project is in line with the objectives of strategic thrust (iii) above as well as Component 1: Socio-economic development, and the focus areas of the National Emergency Programme for the Sahel (PUS-BF). Indeed, continuous access to modern and sufficient energy at reasonable rates is indispensable for the development and economic and social transformation of the country. The Government of Burkina Faso undertook several reforms in the energy sector to improve accessibility to quality energy services, guarantee energy efficiency and foster the competitiveness of the economy. These include the adoption of the Energy Sector Development Policy Letter (LPSE, 2016-2020) in 2016 and the “Industrial and Handicrafts Transformations” Sector Policy (PS-TIA, 2018-2027) in December 2017. The objective is to make energy affordable and available through: (i) diversification of the energy mix by increasing the share of renewable energy in power generation with special emphasis on solar energy; (ii) promotion of energy efficiency; (iii) strengthening of equipment used in generating power from conventional sources; and (iv) forging of stronger regional cooperation thanks to the development of power interconnections with neighbouring countries.
1.1.2. The electricity access rate in Burkina Faso is among the lowest in Africa with slightly over 21% at the national level in 2018 against an African average of 40% (32% for Sub-Saharan Africa). In 2018, the national, urban and rural electrification rates stood at 21.34%, 68.63% and 3.05% respectively, while the national electricity coverage rate was 35.94%. Therefore, the Government set four goals related to the population’s access to electricity to be achieved by 2027: (i) a national electrification rate of 60%; (ii) a national urban electrification rate of 90%; (iii) a national rural electrification rate of 30%; and (iv) a national electricity coverage rate of 80%. It also set the goal of increasing and diversifying electricity supply through the massive development of renewable energy (solar especially) raising to 50% its share in total production by 2027 against about 14% in 2018 (hydro and solar). The country thus undertakes to allocate significant resources to make electricity “available and accessible to all”, bridging current disparities between urban and rural areas. This project will contribute to achieving specific goals in the energy sector. Specifically, it will help to: (i) boost energy supply through an installed additional cumulative solar capacity of 52 MWc, equivalent to almost 15% of the country’s total installed generation capacity of 355 MW in 2018, including 81% thermal, 9% hydro and 10% solar (the existing solar plants’ installed power is 34.8 MWc including 33.7 MW for the Zagouli plant and 1.1 MWc for Ziga plant), thus, raising by 50% the national solar power generation capacity; and (ii) increase the electricity access rate through the construction
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of distribution networks allowing for connecting 30,000 new households, equivalent to a total of 200,000 inhabitants or slightly over 1% of the total population of the country.
1.2. Rationale for Bank Involvement
1.2.1. The major reason for the Bank’s involvement in the project is its alignment with the Bank’s strategic objectives in Burkina Faso, as outlined in the CSP 2017-2021 which builds on two pillars: (i) Promote access to electricity; and (ii) Develop the agricultural sector for inclusive growth. The project is listed in the indicative programme of operations to be supported by the Bank over the stated period aimed at achieving the CSP Pillar I objective of promoting access to electricity. By improving national energy supply and access in peri-urban and rural areas, the project will support the CSP Pillar II aimed at developing the agricultural sector for inclusive and sustainable growth.
1.2.2. By deploying solar plants and expanding power grids, the Yeleen Project addresses the issue of continuous availability of energy and the poor electricity access of most people in Burkina Faso, especially those residing in peri-urban and rural areas, where over 70% of the country’s total population is concentrated. The project will thus make it possible to: (i) improve the availability of electrical energy in Burkina Faso households (21% of the total population) and public and private structures already connected to the power grid; and (ii) enable 30,000 new households, or about 200,000 inhabitants making up nearly 1% of the total population of the country3 to have access to electricity. By facilitating the electricity access of low-income peri-urban and rural households, the project contribute to making the country’s economic and social development more inclusive, in line with the Bank’s 2013-2022 Ten-Year Strategy, adopted in 2012, with the dual objective of inclusive growth and transition towards green growth in Regional Member Countries (RMC). The project is also consistent with the Strategy’s operational pillar to develop sustainable infrastructure capable of improving energy security.
1.2.3. The project is also in line with the Bank’s High-5s, defined in 2015 to strengthen and accelerate the Ten-Year Strategy’s implementation and development impacts. It will contribute to achieving priority objective No. 1 “Light up and power Africa”, with a catalysing effect on the objectives of two other priorities: “Industrialise Africa” (guarantee the availability of necessary electrical energy for the proper running and creation of small and medium-sized industries) and “Improve the quality of life for the people of Africa”. The project will also contribute to implementing the Bank’s Energy Sector Policy (approved in 2012) whose dual objective is: (i) support RMCs in their efforts to provide all of their populations and productive sectors with access to modern, affordable and reliable energy infrastructure and services; and (ii) assist RMCs in developing a socially, economically and environmentally sustainable energy sector. The Bank’s involvement also stems from the project’s consistency with the Strategy for the New Deal on Energy for Africa (2016-2025) which was approved in 2016 with the key objective of attaining universal access to energy by 2025 and, two of whose landmark programmes target the development of renewable energy and the promotion of programmes of access at the base of the pyramid.
1.2.4. Another rationale for the Bank’s involvement is the project full consistency with the “Desert to Power” Initiative, launched in 2017 by the Bank (Lead donor) and supported by other development partners. It will be recalled that the “Desert to Power” Programme aims to transform the Sahel Region by developing and harnessing a generation capacity of 10GW by solar photovoltaic systems by 2025 through a combination of on- and off-grid public and private projects. Although Sahel countries have the best solar potential in the world (solar irradiation exceeds 5.5 kWh/m2 in 11 countries - Sudan, Chad, Niger, Mali, Mauritania, Eritrea, Djibouti,
3 The population of Burkina Faso was estimated at 19.8 million people in 2018 (Source: AfDB) 2
Senegal, Nigeria, Ethiopia and Burkina Faso), the deployment of solar projects there is still relatively low. The Desert to Power Programme also aims to enable 160 million people have access to electricity through on-grid solutions (solar power generation and electrical network expansion). The project also contributes to the goal of intensifying renewable energy investments under Pillar 2 “Promoting mitigation and low-carbon development in Africa” of the Bank Group’s second Action Plan on Climate Change (2016-2020). The Bank’s involvement also stems from its commitment to support the G5 Sahel countries in the energy sector, one of six priority sectors identified by the Sahel Alliance Initiative, founded by France, Germany, the European Union, the World Bank Group, the United Nations Development Programme and the African Development Bank.
1.2.5. Lastly, the Bank’s intervention is justified in that the project is part of the 2025 Burkina Solar Programme, known as “Yeleen” with three components: (i) Development of photovoltaic plants (PV) connected to the interconnected national grid; (ii) Increase in the electricity distribution network; and (iii) Rural electrification by mini-grids (isolated) and individual solar systems. Since Component (iii) was approved by the Bank in December 2018 (joint financing with EU-AIF and GCF), the Bank’s financial support for this project covering Component (i) and (ii) (joint financing with AFD and EU-AIF) will strengthen its role in the Yeleen Programme and the energy sector in general in Burkina Faso.
1.3. Aid Coordination
1.3.1. In Burkina Faso, development assistance is coordinated by the General Directorate of Cooperation (DG-COOP) in the Ministry of the Economy, Finance and Development. Several partners (bilateral and multilateral) have operations in the energy sector, the key ones being the Bank, AFD, the World Bank, EIB, IDB, BOAD, the EU, the United States (Millennium Challenge Account Burkina Faso (MCA-BF) and India. The Bank is still the country’s leading partner in infrastructure and, since the opening of its Country Office in 2006, plays a key role in strengthening dialogue with the Government and financial partners.
1.3.2. The active Technical and Financial Partners (TFPs) in Burkina Faso are organised in a Troika that interfaces with Government for PNDES (2016-2020) dialogue and supports its implementation. Adopted in July 2016, PNDES outlined 14 planning sectors for concretising the PNDES guidelines through sector policies. Since industry and handicrafts are crucial for Burkina Faso’s socio-economic development, Government has placed them high on its agenda, devoting an entire sector to them, namely “Industrial and handicrafts transformations”. To ensure coherence, the sector ministries involved prepared an Industrial and Handicrafts Transformations Sector Policy (PS-TIA, 2018-2027), adopted by Government in December 2017. TFPs take part in different PS-TIA bodies (annual and mid-term review) and contribute to stakeholder capacity building. They also participate in the monitoring and evaluation of PS- TIA implementation, and contribute to mobilising the resources necessary for achieving the policy goals.
1.3.3. A technical working group was set up in the energy sector. In line with the concerns of all stakeholders, TFP interventions in this sector aim to: (i) increase energy supply (construction or strengthening of electricity generation facilities, reinforcement of regional interconnections with neighbouring countries), and diversify same through the development of renewable energy with emphasis on the solar component; (ii) increase the electricity access rate of the population in peri-urban and rural areas; and (iii) promote energy efficiency especially in public buildings. During the project study, the Bank, AFD and the EU fielded joint identification, preparation and appraisal missions and certain technical missions (study validation workshops). During these missions, other key partners in the electrical energy sub- sector in Burkina Faso (World Bank and Millennium Challenge Account Burkina Faso - MCA- 3
BF) were met to ensure the coherence and complementarity of different TFP interventions in the energy sector.
II. PROJECT DESCRIPTION
2.1 Project Description and Components
2.1.1 The project’s sector objective is to contribute to the increase and diversification of national energy supply within a sustainable development context and boost sustainable access to electricity to improve the living conditions of the population. Specifically, it aims to: (i) increase electrical energy supply from renewable sources by deploying additional solar capacity (photovoltaic) totalling 52 MWc, spread on four sites: North-West Ouaga (43 MW), Dori (6 MW), Diapaga (2 MWc) and Gaoua (1 MWc); and (ii) strengthen and expand electricity distribution networks and connect 30,000 new households.
2.1.2 The project comprises three (3) components: (A) solar power plants; (B) distribution networks; (C) project management. Its implementation will span a period of five (5) years from 2020 to 2024. The details and cost estimates of these components are indicated in the following table.
Table 2.1 Project Components No. Component Cost Description of Components Name Estimates (EUR Million) A Solar power 81.05 (i) Construction, commissioning, operation and maintenance (for two years) of plants 4 PV solar plants of total capacity of 52 MWc: North-West Ouaga (43 MWc), Dori (6 MWc), Diapaga (2 MWc) and Gaoua (1 MWc); (ii) Construction of electrical structures for the evacuation of energy (33/90 kV substation and 90 kV line); (ii) Installation, commissioning, operation and maintenance (two years) of an energy storage system of minimum capacity of 10 MW/8 MWh after 10 years of “end-of-cycle” operation. B Distribution 41.92 (i) Construction of 5,000 km of MV lines; (ii) construction of 2,000 km of LV networks lines; (iv) Installation of 500 MV/LV transformer substations; (v) Establishment of 30,000 connections; and (vi) Installation of 2,500 public lighting pots. C Project 13.72 (i) Control and supervision of solar plants construction works; (ii) Control and management supervision of electrical networks construction works; (iii) Logistical support for the project and the “energy” budgetary programme; (iv) Capacity building; (v) Communication; (vi) External audits (financial, technical, E&S) ; (vii) Feasibility study of the “productive energy” project for the agriculture and mining sectors; (viii) Operation of the Project Implementation Unit (PIU); (ix) Compensation measures for the procurement of land; (x) Environmental and social management; (xi) Monitoring and evaluation. Total Project Cost 136.69
2.2 Technical Solution Adopted and Alternatives Explored
2.2.1 Solar power plants will be constructed using standard solutions with monocrystalline or polycrystalline silicon PV modules which control about 90% of the global market. Modules based on other technologies are not accepted. The storage system (10 MW/8 MWh) to be installed on the North-West Ouaga site will be deployed on 20- or 40-foot containers, or within dedicated areas. Installing it in a particular building is not recommended, since this will entail additional cost compared to the standard configuration. Lastly, the 90-kV transmission line to evacuate energy from the North-West Ouaga plant will be an “overhead/underground line” combination (best technical, economic, environmental and social compromise). The alternative
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solutions (variants) explored for the “solar plants” component and the causes for their rejection are given in the table below. Since the new structures to be constructed under the “distribution networks” component will be adjusted and included in SONABEL’s existing power grids development master plan, no technical alternative solutions or variants were explored (not applicable).
Table 2.2 Alternatives explored and reasons for their rejection Alternative solution Brief description Causes for rejection Construction of solar plants by Construct project solar plants using thin-film - Risk of being tied to a single supplier deploying thin-film technology photovoltaic solar modules (few manufacturers) technology photovoltaic - Less heat-sensitive modules - More complex recycling - Much lower output (amorphous silicon) Power storage system through Install the North-West Ouaga power storage - Additional cost (installation in a a solution involving a system along with an integrated device in a building is only justified for large dedicated building dedicated building capacities (above 20 MW) Construction of the entire 90 Construct the entire 90 kV (about 33 km) - Risk of line crossing over residential kV North-West Ouaga- evacuation line linking the North-West houses at the entrance of Kossodo Kossodo line using the Ouaga plant to the Kossodo substation using substation (peri-urban area) overhead technique the “overhead” technique - Significant social impacts
2.3 Project Type
2.3.1 The project is a stand-alone investment operation whose proposed funding instrument is an ADB loan to be granted to Burkina Faso4.
2.4 Project Cost and Financing Mechanisms
2.4.1 The total project cost, net of taxes and customs duty, is estimated at EUR 136.69 million (UA 111.82 million) including 85% in foreign exchange and 15% in local currency. It includes the cost of feasibility studies conducted in 2019 plus a 4% provision for physical contingencies and technical uncertainties and a 3.5% provision for price escalation. The detailed project costs by component, source of financing and expenditure category are presented in the following tables. The conversion rates used are those indicated on page (i).
Table 2.3 Project cost estimates by component (in EUR million) Components Cost in Cost in local Total cost % Foreign foreign currency exchange exchange Solar power plants 60.32 15.07 75.39 80% Distribution networks 31.02 7.76 38.78 80% Project management 7.66 5.11 12.77 60% Total base cost 99.00 27.94 126.94 78% Physical contingencies 3.96 1.12 5.08 85% Price escalation 3.97 0.70 4.67 85%
Total cost 106.93 29.76 136.69 78%
4 This ADB loan to an ADF country is pursuant to the policy of diversification of Bank products aimed at giving ADF-only countries access to the ADB sovereign window (ADB/BD/WP/2014/48/Rev.2 and ADF/BD/WP/2014/31/Rev.2 5
2.4.2 The project will be financed by the Bank (loan), AFD5 (loan and grant), the EU-AIF6 (grant), and SONABEL (counterpart funds).
Table 2.4 Sources of financing (in EUR million) Sources of financing Costs in Costs in local Total cost % total foreign currency exchange ADB 39.06 9.76 48.82 36% AFD 60.00 15.00 75.00 55% EU-AFIF 7.87 0.43 8.30 6% SONABEL - 4.57 4.57 3% Total financing 106.93 29.76 136.69 100%
2.4.3 The project cost by expenditure category is as follows.
Table 2.5 Project cost by expenditure category (in EUR million) Expenditure categories Cost in foreign Cost in local Total cost % foreign exchange currency exchange Works 101.39 21.58 122.97 82% Services 5.42 3.61 9.03 60% Operating costs - 4.57 4.57 0% Miscellaneous 0.12 - 0.12 100% Total project cost 106.93 29.76 136.69 78%
2.4.4 The provisional expenditure schedule by project component is as follows:
Table 2.6 Expenditure schedule by component (in EUR million) Components 2020 2021 2022 2023 2024 Total Solar power plants 16.21 20.26 36.47 8.10 - 81.05 Distribution networks 4.19 14.67 14.67 8.38 - 41.92 Project management 3.52 3.40 3.40 3.40 - 13.72 Total 23.92 38.33 54.54 19.89 - 136.69 % 17.50% 28.04% 39.90% 14.55% - 100%
2.4.5 The ADB loan resources will be used to partially finance the three project components in a parallel funding arrangement with AFD. The allocation of project resources to the various components is detailed in section B2 of the Technical Annexes. The distribution of ADB loan resources by expenditure category is presented as follows.
Table 2.7 ADB loan resource by expenditure category (EUR million) Expenditure categories Cost in Cost in local Total cost % foreign foreign currency exchange exchange Works 38.29 8.15 46.44 82% Services 1.36 0.90 2.26 60% Miscellaneous (front-end fee) 0.12 - 0.12 100% Total project cost 39.77 9.05 48.82 81%
5 The AFD financing is composed of a loan of EUR 70 million and a grant of EUR 5 million 6 The EU-AIF resources will be managed and administered by AFD. 6
2.5 Project Area and Beneficiaries
2.5.1 The project covers the entire national territory. The “Solar power plants” component will be implemented in the Centre (Ouagadougou), Sahel (Dori), East (Diapaga) and South- West (Gaoua) Regions while the “Distribution networks” component dealing with the reinforcement, densification and expansion of MV/LV power distribution grids will cover the entire country but principally the Sahel, North, Centre North, and East Regions and the peripheral and/or peri-urban areas of Ouagadougou and Bobo-Dioulasso.
2.5.2 The project’s main beneficiaries are the Government, SONABEL, the population and the productive sector (industries, transport, agriculture, etc.) thanks to more readily available power supply induced by the electricity generated by photovoltaic solar plants with a cumulative capacity of 52 MWc to be deployed thanks to the project’s “solar power plants” component. When implemented by SONABEL, the project will help to meet the growing national demand for electrical power (13% on average per year). It will also contribute positively to reduce Burkina Faso’s energy dependency, improve its balance of payments (lower generation costs compared to imported fossil sources like coal, gas and fuel/gasoil), reduce State fuel subsidies and, in the long run, reduce the kWh cost. National and international companies will benefit from supplies contracts and construction contracts linked to works on power grids. Hundreds of direct temporary jobs will be created during the construction phase of the project. Since Burkina Faso is shifting towards the interconnected national grid (RNI) model covering the whole country, power generated by the project’s solar plants will have a direct beneficial impact on the power distribution grids in all zones covered by the SONABEL power grid.
2.5.3 The “Distribution grids” component will enable 30,000 new households, equivalent to 200,000 people, to have access to electricity. Several dozens of schools and apprenticeship/training centres situated in the project area will be connected to the power grid and access to electrical power will improve their operation. Besides, several health (health and social empowerment centres - CSPS) and education (secondary and high schools, vocational and technical training centres, etc.) institutions will benefit from the project outputs. Sometimes, health centres have light conservation and sterilisation equipment (refrigerators, heaters, etc.) that run intermittently on kerosene. Continuous access to electrical power will improve the running of these health centres (better conservation of pharmaceutical products, vaccines, blood products and other medical products, adequate operation of health equipment). The electricity coverage of some hitherto deprived areas will prompt or facilitate the installation of new health equipment such as laboratory, surgery, medical imaging equipment. The result will be better working conditions for health staff, better conservation of medical products (with lower expenditure on pharmaceutical products), better quality healthcare and, consequently, a higher rate of frequentation of health centres.
2.6 Participatory Approach in Project Identification, Design and Implementation
2.6.1 The feasibility studies (technical, economic, financial, environmental and social) were prepared using a participatory approach involving all key stakeholders (the Ministry of Power, SONABEL, ABER, ANEREE and financial partners (AFD, AfDB and the EU). Apart from national-level consultations, a broad-based consultation was held at the local level to prepare the reports of the Environmental and Social Impact Assessments (ESIA), Environmental and Social Management Plan (ESMP) and Resettlement Action Plans. Consultations took place between July 2018 and October 2018, then between March and June 2019 targeting the regional, communal and customary authorities of the project areas. The project affected populations were also consulted. For the North-West Ouaga solar plant and the 90 kV line, consultations took place on the localities of Ziniaré, Boussé, Sourgoubila, Pabré and Ouagadougou (Districts 4 7
and 9). For the Dori, Diapaga and Gaoua plants, consultations took place in the respective localities. The main concerns of the population consulted were captured in the resettlement action plan, provisions for the electrification of some public establishments, communication plan, etc.
2.6.2 The process of validation of E&S safeguards reports involved all key stakeholders. A stakeholder commitment plan was prepared to support the project’s implementation. The plan is accompanied by a detailed complaints management mechanism (all project components). A budget of CFAF 21 million has been earmarked for the implementation and monitoring of this mechanism. The PAPs database that will be established under the project (Bank’s value added) will enable SONABEL to monitor all PAPs for all ongoing projects, including all payments and related complaints. Lastly, annual reports on ESMP implementation will be published on the websites of the Bank and SONABEL.
2.6.3 SONABEL will ensure that the participatory process is maintained throughout the project period. Information, Education and Communication (IEC) campaigns will be organised in the local languages before SONABEL and the works contractors commence works. These will be on themes related to safety on construction sites. Other awareness-raising campaigns will be held by SONABEL in the beneficiary neighbourhoods and localities before new electrical installations are commissioned. They will focus on the benefits of electrical energy, the control of electricity consumption, the potential hazards or dangers of electric current, the need for the population to pay their electricity bills and their civic duty to protect electrical installations which are public property. Lastly, information collection and new subscriber identification campaigns will be organised as part of promotional connection operations at socially-studied rates. During these campaigns, the populations’ concerns and aspirations will be collected and addressed by way of appropriate actions.
2.7 Bank Group Experience and Lessons Reflected in the Project Design
2.7.1 The Bank’s active portfolio in Burkina Faso, at end-September 2019, has 21 projects for a total commitment of UA 482.846 million. It comprises 14 national public sector projects (UA 187.982 million; 39%), 2 private sector projects (UA 32.462 million; 7%) and 5 multinational public sector projects (UA 262.401 million, 54%). The public portfolio covers the following sectors: Transport (51%), Energy (18%), Agriculture and the Environment (16%), Water and Sanitation (7%), Governance (6%), and Social (2%). The detailed portfolio status is presented in Annex II. The overall portfolio performance was deemed satisfactory during the last review in April 2019, scored 3.3 on a scale of 1 to 4. The portfolio does not have any risk or aged project. At end-September 2019, the portfolio’s global disbursement rate was 49.44% (54.21% for national public sector, 100% for the private sector and 39.76% for the multinational public sector) for an average age of 3.3 years. Efforts are still needed to reduce the average time between project approval and first disbursement (estimated at 15 months), or two and a half times the standard time laid down by the Bank (6 months).
2.7.2 Key lessons learned from the implementation of power and infrastructure projects in Burkina Faso and other countries of the region were reflected in the design of this project, including the need for an investment project to ensure sound quality at entry of data. Therefore, donors (EU/ADF) should support the conduct of required studies (technical/economic feasibility and final design studies and environmental and social assessments). Provision should also be made for technical assistance during project implementation by recruiting consulting engineering firms to support SONABEL (executing agency) in controlling and supervising the construction of solar plants and electrical networks. Furthermore, to meet the deadlines for the construction and commissioning of the solar power plants, Advanced Procurement Action (APA) will be used for these works. 8
2.8 Key Performance Indicators
2.8.1 Project performance will be measured using results-based logical framework indicators. Data on output and outcome indicators will be provided in: (i) periodic progress reports prepared by resident consultants tasked with works control and supervision; (ii) quarterly reports on project activities prepared by PIU and forwarded to donors including the Bank; (iii) SONABEL’s annual progress reports; (iv) donors’ supervision mission reports; and (v) the project completion reports (of the Borrower and the Bank). Analysis of the indicators will help to measure their progress so that necessary adjustments can be made as appropriate to achieve the set target values. The project impact indicators will be provided in national reports: SONABEL, Ministry of Power, MINEFID, INSD, periodic reviews of PNDES.
III. PROJECT FEASIBILITY
3.1 Economic and Financial Performance
Table 3.1 Key Project Economic and Financial Data FIRR 12.89 % NPV CFAF 104.7 billion Baseline scenario ERR 13.41% % NPV CFAF 4.7 billion
3.1.1 Project Financial and Economic Performance: These were analysed based on the financial internal rate of return (FIRR) and the economic rate of return (ERR) respectively. FIRR is calculated using the project financial costs and its share in revenue generated from the sale of electricity to new subscribers. Note that 7.5% of investments under the financial model is for contingencies. ERR for its part, is calculated using the economic costs (investment costs corrected by conversion factors) and expected economic benefits of the project, those obtained from electricity sales to new subscribers and potential savings accruing to SONABEL versus the alternative energy sources used prior to the project’s operational phase (electricity imports and power generation from thermal plants).
3.1.2 Sensitivity of the Project Financial and Economic Performance: It was analysed based on the 10% drop in the average sale price of electricity. The analysis shows that the economic rate of return is still higher than the economic cost of capital estimated at 12% in the country, thereby confirming the project’s economic sustainability (see detail in Technical Annex B.7).
3.2 Environmental and Social Impact
3.2.1 Environment: The project is confirmed as Category 1, in accordance with the Bank’s Environmental and Social Assessment Procedures (ESAP) due to the scope of works and the cumulative number of affected persons (over 200). The project is categorised A in accordance with national regulations. For the “solar power plants” component, an ESIA was prepared in 2018 and 2019 alongside an ESMP for each of the solar plants and the 90 kV line. Thus, a Full Resettlement Action Plan (FRP) was prepared in 2019 for the North-West Ouaga plant and the 90-kV line. Lastly, abbreviated resettlement action plans were prepared in July 2019 for the Dori and Diapaga solar plants. For the “distribution grids” component, an Environmental and Social Management Framework (ESMF) was prepared in 2019. The ESMPs that will be prepared for this component will be submitted to the Bank and disseminated per the Bank’s requirements. All reports (ESIA, ESMP, RAP and ESMF) were prepared by SONABEL and reviewed and approved at national level by BUNEE. A certificate of compliance was issued on 24 July 2019 and the full reports were published on the websites of the Ministry of Power and SONABEL on 30 July 2019. The ESIA and FRP summaries as well as complete reports were
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also posted on the Bank’s website on 1 August 2019. All links to the published reports are provided in the Technical Annexes.
3.2.2 The project’s main negative impacts7 and direct environmental risks during the construction phase are linked to: (i) the felling of 1,173 trees and about 1,000 shrubs on the solar plant and 90 kV line sites; (ii) the impacts on water resources around the solar plant sites (physical and chemical pollution, greater vulnerability in Dori zone); (iii) occupational health and safety risks (falls, road accidents, etc.) and, to a lesser extent, for the local population (mainly in Ouagadougou). The operational phase will mainly entail: (i) the risks of electrocution and collision for vultures at certain sections of the 90 kV line (crossing of the N2 and N22 roads and the Kossodo area where the main slaughterhouse in Ouagadougou is located); (ii) occupational health and safety risks for workers and the local populations (road accidents, risk of electrocution, fire, etc.). The main cumulative impacts concern the increased risk of collision and electrocution for avifauna due to the construction of other power transmission lines in the project area.
3.2.3 Appropriate mitigation measures are planned for all these impacts and risks, including: (i) a very ambitious compensatory planting programme of 605,500 plants on 242.2 ha in Ouagadougou, 237,500 plants on 95 ha in Dori, 21,575 plants on 8.63 ha in Diapaga, and 13,700 plants on 5.48 hectares in Gaoua; (ii) the implementation of a water resource management and protection plan during works; (iii) the marking of critical sections of the overhead 90-kV line on a total distance of 1,740 m; and (iv) the incorporation of environmental, hygiene, health and safety (EHHS) clauses in bidding documents (BD). The main positive environmental impacts are linked to the provision of energy that is less polluting than fossil fuels, and the rehabilitation of plant cover and associated ecosystems. The ESMP is estimated to cost CFAF 4.6 billion (see Technical Annexes for details).
3.2.4 Monitoring of ESMP Implementation: Each contractor’s EHHS Officer will implement ESMP measures on his/her lots and will be the first monitor thereof. He/she shall be supported by his/her counterpart of the control mission. A team of three specialists (an Environmental Officer, a Social Development Officer and a Health and Safety Officer) will monitor ESMP implementation at the level of SONABEL. A short-term capacity building plan for the key stakeholders was prepared by SONABEL with a budget provision of CFAF 460 million (details are available in the Technical Annexes). Quarterly and annual ESMP implementation reports will be produced on a format agreed with SONABEL and AFD. Lastly, an independent audit of the implementation of the Resettlement Action Plan and ESMP will be performed by an audit firm.
3.2.5 Climate Change: The project was classified under category 3 in accordance the Bank’s climate monitoring system. Although the project is not particularly vulnerable to climate change, the following measures were taken to build its resilience: (i) construction of solar plant platforms above water level; (ii) establishment of a rainwater collection and drainage system on power plant sites; (iii) construction of boreholes for solar panel maintenance (cleaning); (iv) design of line pylon foundations considering the dominant winds and ground structure. In terms of mitigation, the project will help to prevent annual carbon sequestration of 48,000 tCO2eq from 2024 and is fully consistent with the commitments to reduce greenhouse gas (GHG) emissions contained in Burkina Faso’s Nationally Determined Contribution. In addition, the programme to plant trees on 351.3 ha will allow for the sequestration of at least the equivalent of 134,000 tCO2eq8.
7 See the section on social impact for the main negative social impacts 8 Given that a hectare of trees in a Sahel ecosystem helps to sequester 382 tCO2eq (Hebie S., 2012). 10
3.2.6 Gender: The absence of electricity seriously hinders the social progress and economic development of the population, especially women and girls. In Burkina Faso, like in other ECOWAS countries, male-headed households have greater access to energy (85.2%) than those headed by women (82.4%) in 2013. In 2016, only 11.5% of women-headed households use non-solid fuels as source of energy for cooking against 12.7% among male-headed households. The same year, 29.2% of female-headed households and 42.6% of those headed by men had access to electricity. This electricity access rate leads to greater recourse to traditional biomass, leading to health crisis (high mortality levels due to pneumonia, chronic obstructive lung diseases and lung cancer). Women are the first exposed when vital resources (solid fuels: wood and by-products) are either absent, hard to access or dangerous to use. This is due to their role in obtaining energy supplies (firewood). As they put in so much time and effort looking for the latter, the time spent on their production and capacity building activities reduces greatly. As concerns the unequal access to energy of men and women, it is also worth noting: (i) the low representation of women in the energy trades; (ii) women’s and young people’s poor knowledge of the opportunities offered by energy in rural areas; (iii) the poor electrification of health and educational facilities; and (iv) poor knowledge of gender issues in the energy sector by most workers of the Ministry of Power.
3.2.7 To address the issues described above, the project will facilitate: (i) the electrification of households with special emphasis on those headed by women, widows and/or single women living with children; (ii) the electrification of basic social services (secondary/high schools, health centres); (iii) the electrification of community spaces (headquarters of women’s and youth associations); (iv) public lighting to reduce insecurity and facilitate the development of income generating activities and learning of school lessons by girls and boys at night; (v) the recruitment of young graduate trainees, at least 50% of them women; (vi) information, awareness and education activities on gender, the productive use of energy and the benefits of women’s contribution to local development; and (vii) the training of SONABEL and PIU staff on: “gender and energy”. Consequently, the project is classified in Category 3 according to the Bank’s Gender Marker System.
3.2.8 Social: The project will contribute to providing electricity access to 30,000 new households, or over 200,000 persons. It will generate positive impacts in terms of job creation with an estimated 1,000 temporary jobs during the construction phase and 200 permanent jobs (25% of them for women) during the facilities operation phase (35 years). Furthermore, local small and medium-sized enterprises (SME) will be solicited to provide various services under sub-contracting arrangements (supplies, transport, catering, maintenance, cleaning, health, security, etc.). During the construction phase, priority will be given to the recruitment of local labour. During project implementation, SONABEL will ensure that interns on professional training or graduates (including women) are recruited to enhance their employability. By contributing to guaranteeing the availability of electric energy, the project will support the productive sectors of the national economy. It will also support Burkina Faso in its efforts to improve accessibility to quality energy services, targeting a national electricity access rate of 80% by 2027 (21.34% in 2018). The availability of electric energy in peri-urban and rural areas will not only improve the living conditions of underprivileged segments of the population without modern sources of energy but also reduce their isolation and strengthen local security, hence the project’s contribution to social inclusion.
3.2.9 The project will benefit small and medium-sized industries, traders, administrative and municipal services and all basic social services (education, training, health, hygiene and sanitation, drinking water). Social facilities (schools, training centres, health centres, etc.) located in beneficiary localities will be connected to the mini-grid and thus have access to more reliable electrical energy for various uses (domestic, industrial, commercial, pumping, cultural, security, etc.). Social service quality will improve in the project area thanks to electricity. The 11
project will not only help to promote family leisure and entertainment for greater well-being but also strengthen the security of persons and their properties thanks to the lighting of homes and streets. The introduction of electricity in rural localities will also facilitate the emergence of new income generating activities in diverse spheres; for example, agro-food processing, new information and communication technologies, carpentry, maintenance, sewing, embroidery, handicrafts, petty trading and services. The socio-economic spinoffs in areas covered will be immense. During the construction of mini-grids and installation of individual domestic solar kits (2 to 3 years), an estimated 500 temporary jobs will be created by the project. During the operational phase (about 20 years), an estimated 100 permanent jobs will be necessary to ensure the management of electricity concessions.
3.2.10 Involuntary Resettlement: The “North-West Ouaga solar plant” sub-component will not cause physical or economic displacement since the land already belongs to SONABEL (acquired in 2016). The 243 households affected by the project will include: (i) 17 physically and 213 economically displaced persons on the 90-kV line corridor; (ii) 3 economically displaced persons on the Diapaga solar plant; and (iii) 10 economically affected persons on the Dori solar plant. Additionally, 10 households meet one or two vulnerability criteria. Losses mainly concern residential houses, agricultural land, fruit trees, trading stores and jobs. The RAP budget for the 90-kV line is CFAF 1.420 billion including: (i) CFAF 1.28 billion for compensations; (ii) CFAF 82 million for PAP support; (iii) CFAF 15.4 million for capacity building; and (iv) CFAF 20 million for monitoring and evaluation. The resettlement action plans for the Dori and Diapaga solar power plants will cost CFAF 9.5 million and CFAF 13.79 million respectively. The RAPs will be updated before implementation and the submission of evidence of compensation prior to the start of works will be one of the financing conditions.
IV. PROJECT IMPLEMENTATION
4.1 Implementation Arrangements
4.1.1 Institutional Implementation Mechanism: The Ministry of Power (ME) will be the project executing body. The latter will be attached to the ME “Energy” budgetary programme pursuant to Decree No. 2018-0092 of 15 February 2018 laying down general regulations governing development projects and programmes implemented in Burkina Faso. SONABEL will be the project executing agency and donor resources will be entrusted to the latter by Government. SONABEL will set up within its Directorate of Major Projects (DGP), a Project Implementation Unit (PIU) whose key personnel will comprise a Project Manager (Head of the PIU), a Solar Plants Expert, an HV Lines and Substations Expert, a Distribution Networks Expert and an Accountant assigned to the project (whose qualifications and experience must be deemed satisfactory by the donors), a Secretary, a Messenger and a Driver. The PIU will be supported by staff from DGP’s cross-cutting pool (Procurement Officer, Social Officer, Environment, Health and Safety Officer, an Administrative and Financial Officer, a Monitoring and Evaluation Officer), including two resident consultants during project implementation to control and supervise the construction works of solar power plants and distribution networks.
4.1.2 SONABEL staff have a wealth of experience acquired in the implementation of similar projects, especially the 33-MWc Zagtouli Photovoltaic Solar Plant Project completed and commissioned in 2017 (financed by AFD, EIB and the EU) and distribution network projects financed by the AfDB (PRIELER and PEPU) and other technical and financial partners (AFD, World Bank, etc.).
4.1.3 In line with the General Regulation of February 2018 governing development projects and programmes in Burkina Faso, ministerial orders will be issued after the signing of project financing agreements with donors, including the joint order of the Ministry of Power (ME) and
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MINEFID on the establishment, purpose, classification, administration and operation of the project. The project will be monitored and evaluated by the Projects Review Committee of the “Energy” budgetary programme. It will also be monitored by the services of the “Energy” budgetary programme’s Management Unit, namely the internal control service, the monitoring and evaluation service and the technical service under the coordination of the Budget Programme Officer.
4.1.4 Procurement Arrangements: The project is the subject of parallel financing between the Bank and the French Development Agency (AFD/EU). In accordance with paragraph 10.2 of the Bank Procurement Policy on Bank Group-funded Operations, where Bank financing is provided on a parallel basis with other financiers, the Bank’s Procurement Framework shall apply to the contracts financed solely by the Bank. The respective procurement and integrity policies and eligibility rules of each co-financier apply to the contracts that it finances. Consequently, all procurements of goods, works and consultancy services financed by Bank resources will be done pursuant to the Procurement Policy on Bank Group-Funded Operations (AfDB Procurement Policy), October 2015 edition and according to the provisions set out in the financing agreement.
4.1.5 Pursuant to this policy and following the different reviews conducted, it was agreed that all procurements to be financed by the Bank under this project will be implemented in accordance with the Bank’s system characterised by the Procurement Methods and Procedures (PMP), described in the Procurement Framework for Bank Group-Funded Operations as detailed in Annex B.5 and specified in the Procurement Plan, and through the available Bank Standard Bidding Documents (SBD).
4.1.6 Applicable Eligibility Rules: Since Bank resources allocated to finance the project are from the ADB window, the specific eligibility rules of this window are applicable. Thus, pursuant to paragraph 1(1) of Article 17 of the Agreement establishing the African Development Bank, the funds provided by the Bank under the project can only be used to procure works, goods and services produced in member countries of the Bank. Bidders coming from non-member countries of the Bank offering such goods, works and services are not eligible, even if they offer same to member countries. Any waiver of this rule of origin shall require the authorisation of the Board of Directors.
4.1.7 Procurement Capacity and Risk Assessment (PCRA): To take into account in the project’s specificities, the Bank assessed: (i) risks at the national, sector and project levels; and (ii) the capacity of the executing agency. The results concluded that the procurement risk is “significant”, making it possible to determine the mitigation measures proposed in paragraph 5.9 of Section B5 of the Technical Annexes.
4.1.8 Special Arrangements: In a bid to expedite the project’s implementation o, Government intends to use Advance Procurement Action (APA) for the following procurements in the “Solar power plants” component of the project: (i) Construction of three (3) solar power plants through open bidding in three (3) lots, namely, Dori (6 MW, Diapaga (2 Mw) and Gaoua (1 MW) ; (ii) Installation of an energy storage system (10 MW/8 MWh) by open bidding in a single lot; (iii) Construction of a 90 kV HV electric line (to link the North- West Ouaga solar plant to the Kossodo substation) by open bidding in a single lot. A reasoned request accompanied by a procurement plan for the corresponding operations will be submitted to the Bank for opinion.
4.1.9 Financial Management Arrangements: The project finances and accounts will be managed by SONABEL acting through the Directorate of Major Projects (DGP) which will set up an internal PIU. The PIU will comprise at least one Administrative and Financial Officer
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(AFO), assisted by a dedicated Accountant. An administrative, accounting and financial procedures manual will be prepared to govern the operation of SONABEL as a whole with distinct chapters devoted to the Directorate of Major Projects. The “project management” module of SONABEL’s integrated accounting and financial management software will be deployed in the Directorate of Major Projects and interface with modules used in the Directorate of Financial and Accounts Management (DFC). It will be used for all projects funded by SONABEL partners and implemented by it. Pending operationalisation of the Directorate of Major Projects and the provision of all the instruments cited earlier, this project will use the PEPU administrative, accounting and financial procedures manual, financed by the Bank. This manual will be reviewed and tailored to suit the project components and activities. Additionally, the software used by PEPU will be reconfigured for use in this operation, pending the provision of the project management module of the SONABEL software. A new code will be acquired for that. Project accounts will be kept using private commitment accounting on an integrated software suitable for managing development projects. The accounting plan will be prepared per the standard accounting requirements of the revised Uniform Acts of the Organisation for the Harmonization of Business Law in Africa (OHADA) in force in Burkina Faso.
4.1.10 Disbursement Arrangements: Bank resources will be disbursed pursuant to its rules of procedure, in particular the disbursement manual. The following three disbursement methods will be used: (i) the direct payment method; (ii) the reimbursement guarantee method; and (ii) the reimbursement method.
4.1.11 External Audit Arrangements: The Internal Audit Department of SONABEL will include the project in its annual audit roster, with one or two audit missions planned depending on the assessment of project-related risks. Only one external audit of accounts will be conducted for all donors and will be financed by the Bank. It will be performed by an independent audit firm, recruited based on terms of reference agreed with donors and according to Bank rules and procedures. The shortlist of firms participating in the bidding procedures must be acceptable for all donors involved in the project’s financing. The audit contract will be for three years maximum and the auditor is required to submit its report within six months of the close of the fiscal year to which the mission relates. Audit fees will be paid in full only if the report has been approved by all donors. The auditor’s services will continue for the second and third years only if the services for the preceding year were performed satisfactorily.
4.2 Monitoring
4.2.1 Project implementation will span a period of five years (2020-2024) following the implementation schedule presented on page viii. This implementation schedule, approved during the project appraisal mission, covers all project activities and takes into account for the sequence of activities financed by each donor (Bank, AFD and EU) to guarantee best sequencing in the implementation of the various works planned. During implementation of the project as from the baseline situation established by the Ministry of Power and SONABEL, all project activities will be subject to regular monitoring and evaluation:
(i) The PIU will regularly monitor implementation of all project activities (procurement, management of different contracts, coordination of resident consultants responsible for works control/surveillance and contractors, coordination of all public structures/services concerned, the population and other stakeholders, approval of works progress reports, acceptance and commissioning of structures constructed, etc.) and formulate recommendations, as appropriate, to the project review committee to ensure the proper and timely implementation of the project.
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(ii) The PIU will submit to donors quarterly project progress reports. The donors (AfDB and AFD) and SONABEL will agree on the reporting format, to be approved during the joint project launch mission. These periodic progress reports will be forwarded to the Bank within 45 days of the end of the quarter in review. They will detail the level of physical progress and financial execution of the project, including commitments approved and disbursements made by project component and by source of financing, as well as the main problems or constraints identified likely to affect timely implementation and the solutions proposed. The reports will also highlight the logical framework outcomes obtained over time and the project indicator trends. Donor/Bank supervision mission reports, monitoring mission reports of the Government, resident consultants tasked with works control/supervision and different external audit reports will help to ensure proper project implementation as well as to identify constraints or delays for appropriate action to be taken so that the project can be implemented within the agreed period and achieve its general objectives.
(iii) The Bank will monitor the project through the activities summarised in the table below. These activities will be implemented based on the implementation schedule presented in page (vi). The project will be subject to at least two Bank supervision missions per year (one at least being a joint AfDB/AFD mission) and close monitoring by the Bank’s Country Office in Burkina Faso (COBF).
(iv) At project completion, the PIU will prepare and submit a project completion report to the Bank, which will in turn prepare its own completion report. The Bank will also prepare a project performance review report to assess impacts.
Period Milestones Monitoring activities/Feedback loop - Approval and general information note on the project December 2019 – Approval and effectiveness of - Signature and effectiveness of financing agreements March 2020 Loan - Fulfilment of prior conditions - Launch of project Recruitment of Consultant - Publication of expression of interest October 2019 – Engineer for control and - Approval of shortlist and consultants shortlist file March 2020 supervision of solar power - Approval of the proposals assessment report plants - Signature of the contract - Preparation of bidding documents and launch October 2019- Recruitment of contractors for - Approval of bids assessment reports March 2020 solar plant works - Signature of contracts - Approval of technical implementation documents April 2020 – June Control and supervision of - Worksite supervision and technical controls 2022 solar plant works - Technical acceptance and commissioning of works - Preparation of periodic progress reports Construction works and - Supply of equipment and materials April 2020 - commissioning of solar plants, - Assembly of equipment and commissioning March 2022 operation and maintenance (two years) Recruitment of resident - Design of bidding documents and launch March 2020 - consultant for the control and - Assessment of bids and signature of works contracts August 2020 supervision of distribution - Delivery of connection equipment and meters networks - Design of bidding documents and launch March 2020 – Recruitment of contractors for - Assessment of bids and signature of works contracts August 2020 distribution network works - Connection works - Approval of technical implementation documents September 2020 - Control and supervision of - Worksites supervision and technical controls - December 2022 distribution network works - Technical acceptance and commissioning of works 15
- Preparation of periodic progress reports September 2020 – Construction distribution - Supply of equipment and materials August 2022 networks - Assembly of equipment and commissioning January 2023 – - Borrower’s project completion report Project completion December 2023 - Bank’s project completion report
4.3 Governance
4.3.1 Law No. 014-2017 instituting general regulations on the energy sector in Burkina Faso, adopted in April 2017, is a significant step forward in energy sector reforms in Burkina Faso. This law contains important innovations. It offers a holistic framework for energy sector management and regulation and also deregulates the electricity sector and defines private operators’ role in the production and distribution of electrical energy. It has provisions to promote renewable energies and energy effciciency. The law also extends the regulator’s powers to cover the entire energy sector. For the law to become fully enforceable, Government must approve some thirty implementing instruments. Several instruments that were adopted in 2017 and 2018 plus others expected in 2019 will help to better guide the revision of conditions governing electricity pricing, third-party access to transmission networks, power distribution in the country, the possibility for self-generators to sell their surplus energy and the framework for the production and distribution of renewable energy.
4.3.2 Law No. 014-2017 transformed the Electricity Sub-Sector Regulatory Authority (ARSE), established in 2007, into the Energy Sector Regulatory Authority. A decree issued in October 2017 specified its powers and organisation. Its new responsibilities include proposing rates applicable in the electricity sector, settling disputes between the various stakeholders and ensuring the financial balance of the sector as a whole. At the institutional level, several structures were established in the sector including the Directorate General of Renewable Energy (DGER), the Directorate General of Energy Efficiency (DGEE) and the Directorate General of Conventional Energy (DGEC). A National Renewable Energy and Energy Efficiency Agency (ANEREE) was also established to encourage the renewable energy develoment and energy efficiency in Burkina Faso. Under the Energy Sector Reforms Support Programme (PARSE) supported by the Bank, actions were taken to improve energy sector goverance in the country, including the ongoing adoption of new (statutes) to avoid overlapping responsibilities between the Ministry of Power and its field organs (SONABEL, ANEREE, ABER).
4.3.3 During project implementation, the public finance management system will be used only to include the project counterpart funds in the State budget. SONABEL will be the executing agency of this project and its’s management system will be used. It is a State corporation with a Board of Directors and governed by the terms of the OHADA Uniform Act on commercial companies and enconomic interest groups (EIG) of 30 January 2014, as well as Law No. 025/99/AN of 16 November 1999 instituting general regulations governing business corporations and its various implementing decrees. It has implemented other projects financed by the Bank and other technical and financial partners.
4.4 Sustainability
4.4.1 The sustainability of energy infrastructure (solar power plants, energy storage devices, electrical networks, transformer stations) constructed under this project rests on the resources generated from electrical energy sales by SONABEL tasked with their operation and maintenance in a context where electricity rates have not been revised since 2006 and where the electricity sub-sector’s financial balance depends on State subsidies to SONABEL. Yet, the corporation’s financial situation improved gradually over the last three years and its financial balance sheet turned positive again in 2016 after recording a deficit for several consecutive years. In 2018, the average cost price of kWh was CFAF 118.8 against an average selling price 16
of CFAF 126.4 corresponding to a CFAF 7.60 gain per kWh. This improvement is mainly due to the fact that national thermal production dwindled gradually in favour of imports and solar power generation since 2017.
4.4.2 Sustainability also builds on SONABEL’s capacity to maintain these structures. Although its staff has wide experience in the operation and maintenance of similar infrastructure, several capacity building activities (training sessions) have been planned to train them to implement the project and operate the future solar power plants. Besides, the project developers will ensure solar plant operation and maintenance for two years (North-West Ouaga and Dori) and one year (Diapaga and Gaoua plants) before their transfer to SONABEL.
4.5 Risk Management
4.5.1 The project’s potential risks are as follows:
Risks Mitigation Measures Insecurity in the country which can impede proper (i) Government’s commitment to deploy the project in all project implementation in some areas of the target regions in order to improve the living conditions of country. local residents as well as the necessary security arrangements; (ii) the efforts Burkina Faso and the other G5 Sahel countries have made to secure the entire region with the support of partners; (iii) the location of project sites (close to inhabited and relatively less exposed zones) ; (iv) consideration of security aspects in the financial bids of works contractors; and (v) the flexibility that may be offered contractors tasked with the construction of power distribution lines and in case the security situation continues to deteriorate in a given locality, to execute similar works (quantitative) in another locality given the existing needs at the national level as was the case with PRIELER (pre-works replacement of some project localities electrified by Government/SONABEL by others situated in the same zone). Weak transit capacity of the interconnected (i) Existing interconnections between the Burkina Faso national grid (RNI) to evacuate all the solar power network and neighbouring countries (Côte d’Ivoire, Ghana) generated by 2025 with the significant increase of and those under construction (the North 330 kV Nigeria – the share of solar power in the energy mix and the Niger – Benin - Burkina – Benin backbone) ; (ii) several instability of RNI before intermittent solar power projects being implemented (2018-2025) to strengthen 90 kV supply. and 225 kV national networks. Late mobilisation of land for the construction of (i) The process to procure land necessary for the deployment project solar plants and the 90 kV North-West all the project solar plants has been initiated and is now at an Ouaga-Gonsin-Kossodo line corridor to evacuate advance stage (the 60 ha land of the North-West Ouaga plant electricity generated by the North-West Ouaga has been acquired by SONABEL); and (ii) the optimised solar plant on the 90-kV grid. choice of corridor and the technical option to construct the 90 kV as a combined overhead/underground line by laying a 1.5 km underground cable at the entrance to the Kossodo substation (peri-urban) to minimise social impacts; and (iii) establishment of an effective complaints reception and management mechanism. Default by companies tasked with the deployment Recruitment of contractors through international competitive of the solar plants and the construction of electrical bidding. networks.
4.6 Knowledge Building
4.6.1 The project will undertake knowledge building activities, including training modules, for staff of the Ministry of Power and its field agencies (including SONABEL) in various fields, and specifically solar energy in prelude to the strong penetration of solar production in the energy mix of Burkina Faso. During the period of power plant operation and maintenance by the builders (one to two years), a knowledge transfer plan will be established to enable the 17
SONABEL teams to effectively take over. Furthermore, a PAPs database will be created under the project and will enable SONABEL to monitor the data of all project affected persons for all ongoing projects including payments and all related complaints.
4.6.2 The project quarterly and annual progress reports and financial audit reports will serve as sources of information on the project. The same is true of Bank supervision mission reports and Government’s monitoring mission reports. All these reports as well as the project completion report will make it possible to draw and share lessons on project implementation. Publication by the Bank of the project completion report and the project performance review report will also allow for knowledge acquired during project implementation to be shared with Bank staff and the public. Lessons learned will strengthen effectiveness in the design and implementation of future similar operations in the country and in other regional member countries of the Bank.
V. LEGAL FRAMEWORK
5.1 Legal Instrument
5.1.1 The financing instrument retained is a loan to Burkina Faso.
5.2 Conditions Associated with the Bank Intervention
A) Conditions Precedent to Effectiveness
5.2.1 Effectiveness of the Loan Agreement shall be subject to fulfilment by the Borrower, to the satisfaction of the Bank, of the conditions set out in Section 12.01 of the General Conditions Applicable to Loan Agreements and Guarantee Agreements of the Bank.
B) Conditions Precedent to First Disbursement
5.2.2 Apart from effectiveness, the first disbursement of Loan resources shall be subject to fulfilment by the Borrower of the following conditions to the satisfaction of the Bank:
(i) Provide the Bank with evidence of the signature, pursuant to the General Regulations governing development projects or programme in Burkina Faso, of the order establishing the project and linking the project to the Energy Budget Programme and the Review Committee already established in the Energy Budget Programme (paragraph 4.1.3); and
(ii) Provide the Bank with evidence of the appointment of the Project Manager whose qualifications would have be deemed acceptable by the Bank (paragraph 4.1.1).
5.2.3 Conditions Precedent to Disbursements Related to Works not Involving Resettlement: Subject to the provisions of Section 5.2.1 (Effectiveness) and Section 5.2.2 (Conditions precedent to first disbursement) of this report, the obligation for the Bank to disburse ADB loan resources for works not involving resettlement shall be subject to fulfilment by the Borrower, to the satisfaction of the Bank, of the following additional conditions:
(a) For each works zone of the “Distribution network” component, submit an Environmental and Social Impact Assessment (ESIA) along with a site-specific Environmental and Social Management Plan (ESMP), prepared in accordance with the Environmental and Social Management Framework (ESMF) and the
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Bank’s Safeguard Policies whose form and content are satisfactory for the Bank; and
(b) Submit satisfactory evidence of approval of the said ESIAs/ESMPs by the Borrower’s competent national authority.
5.2.4 Conditions Precedent to Disbursements related to Works involving Resettlement. Subject to the provisions of Section 5.2.1 (Effectiveness) and Section 5.2.2 (Conditions precedent to first disbursement) of this report, the obligation for the Bank to disburse ADB loan resources for works entailing resettlement shall be subject to fulfilment by the Borrower, to the satisfaction of the Bank, of the following supplementary conditions:
(a) Submit an Environmental and Social Management Plan (ESMP) and an abbreviated Resettlement Action Plan (RAP), including an implementation and compensation schedule prepared based on the Environmental and Social Management Framework (ESMF), the Resettlement Policy Framework (RPF) and the Bank Safeguard Policies, satisfactory to the Bank as to form and content detailing: (i) each project works zone; and (ii) the PAP compensation schedule timeframe for compensation of all project affected persons (PAP) for each zone; and
(b) Provide satisfactory evidence that all project affected persons (PAP) on the works zone have been compensated according to the abbreviated Resettlement Action Plan (RAP) and/or the implementation and compensation schedule, as agreed, and the Bank Safeguard Policies, prior to the start of such works and in any case before PAPs move and/or before they lose possession of their land and/or goods; or
(c) In lieu of paragraphs (a) (b) above, provide satisfactory evidence that resources meant for the compensation of PAPs have been placed in a dedicated account in a commercial bank acceptable to the Bank [or entrusted to a trusted third-party acceptable to the Bank], when the Borrower can prove to the satisfaction of the Bank, that PAPs could not be fully or partially compensated, as provided for in paragraphs (a) (b) above, for he following reasons:
(i) PAP compensation by the Borrower was neither feasible nor possible;
(ii) There are ongoing disputes involving PAPs and/or hindering compensation and/or resettlement activities; or
(iii) Any other reason beyond the Borrower’s control, as discussed and agreed with the Bank.
C) Other Conditions
5.2.5 In addition, the Borrower will provide to the satisfaction of the Bank:
(i) The list of staff assigned to the project, three (3) months after signature of the loan;
(ii) Evidence of the signing between the State and SONABEL and within six months of the date of signature of the Loan Agreement, of an On-lending agreement, drafted under terms and conditions similar to the agreement signed with the Bank. 19
D) Commitments under the Environmental and Social Safeguards
5.2.6 The Borrower undertakes and shall ensure that the implementing bodies, the Executing Agency and their respective contractors, sub-contractor and agents:
(i) Implement the project pursuant to the ESMP, RAP and/or implementation and/or compensation schedule, the Bank’s Safeguard Policies and the relevant national legislation in a satisfactory manner for the Bank, as to form and content;
(ii) Prepare and submit to the Bank, quarterly reports on the implementation of the ESMP and RAP, including gaps identified and the corrective measures taken in that regard;
(iii) Refrain from any action that would prevent or impede implementation of the ESMP and RAP, including the total or partial modification, suspension, termination and/or cancellation of any provision of the ESMP or RAP without the prior written agreement of the Bank; and
(iv) Collaborate fully with the Bank when the project’s implementation or a change in its scope of application unforeseeably leads to the displacement and/or resettlement of the population; and to refrain from commencing works in the area affected by project unless all PAPs present in the affected area have been compensated in accordance with the RAP and/or works and compensation schedule.
E) Other Commitment
5.2.7 The Borrower commits to :
(i) Provide the Bank with any document reasonably necessary for monitoring the project’s implementation.
5.3 Compliance with Bank Policies
5.3.1 The project complies with all applicable Bank policies.
VI. RECOMMENDATION
Management hereby recommends that the Board of Directors approve the proposal to grant a loan of EUR 48.82 million to Burkina Faso, for the purpose and under the conditions set out in this report.
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Annex I : Burkina Faso’s Comparative Socio-Economic Indicators
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) 2018 274 30 067 92 017 40 008 Total Population (millions) 2018 19,8 1 286,2 6 432,7 1 197,2 2500 Urban Population (% of Total) 2018 29,4 42,5 50,4 81,5 2000
Population Density (per Km²) 2018 72,1 43,8 71,9 31,6 1500 GNI per Capita (US $) 2017 590 1 767 4 456 40 142 1000 Labor Force Participation *- Total (%) 2018 83,3 65,9 62,1 60,1 Labor Force Participation **- Female (%) 2018 76,5 55,5 47,6 52,2 500
Sex Ratio (per 100 female) 0
2012 2016 2007 2011 2013 2014 2015 2017 2018 99,6 99,8 102,3 99,3 2000 Human Dev elop. Index (Rank among 189 countries) 2017 183 ... … … Popul. Liv ing Below $ 1.90 a Day (% of Population) 2007-2017 43,7 ... 11,9 0,7
Bur kina Faso Africa Demographic Indicators Population Grow th Rate - Total (%) 2018 2,9 2,5 1,2 0,5 Population Grow th Rate - Urban (%) 2018 5,1 3,6 2,3 0,7 Population < 15 y ears (%) 2018 44,9 40,6 27,5 16,5 Population Growth Rate (%) Population 15-24 y ears (%) 2018 20,1 19,2 16,3 11,7 3,5 Population >= 65 y ears (%) 2018 2,4 3,5 7,2 18,0 3,0 Dependency Ratio (%) 2018 89,6 79,2 53,2 52,8 2,5 Female Population 15-49 y ears (% of total population) 2018 23,2 24,1 25,4 22,2 2,0 Life Ex pectancy at Birth - Total (y ears) 2018 61,2 63,1 67,1 81,3 1,5 Life Ex pectancy at Birth - Female (y ears) 2018 61,9 64,9 69,2 83,8 1,0 Crude Birth Rate (per 1,000) 2018 37,9 33,4 26,4 10,9 0,5
Crude Death Rate (per 1,000) 2018 8,1 8,3 7,7 8,8 0,0
2000 2013 2015 2018 2012 2014 2016 2017 Infant Mortality Rate (per 1,000) 2017 51,2 47,7 32,0 4,6 2007 Child Mortality Rate (per 1,000) 2017 81,2 68,6 42,8 5,4 Total Fertility Rate (per w oman) 2018 5,2 4,4 3,5 1,7 Bur kina Faso Africa Maternal Mortality Rate (per 100,000) 2015 371,0 444,1 237,0 10,0 Women Using Contraception (%) 2018 24,9 38,3 61,8 …
Health & Nutrition Indicators Phy sicians (per 100,000 people) 2010-2016 4,7 33,6 117,8 300,8 Life Expectancy at Birth Nurses and midw iv es (per 100,000 people) 2010-2016 63,0 123,3 232,6 868,4 (years) Births attended by Trained Health Personnel (%) 2010-2017 79,8 61,7 78,3 99,0 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 2017 0,8 3,4 1,1 … 30 Incidence of Tuberculosis (per 100,000) 2016 51,0 221,7 163,0 12,0 20 Child Immunization Against Tuberculosis (%) 10
2017 98,0 82,1 84,9 95,8 0
2013 2017 2007 2012 2014 2015 2016 2018 Child Immunization Against Measles (%) 2017 88,0 74,4 84,0 93,7 2000 Underw eight Children (% of children under 5 y ears) 2010-2016 19,2 17,5 15,0 0,9 Prev alence of stunding 2010-2016 27,3 34,0 24,6 2,5 Bur kina Faso Africa Prev alence of undernourishment (% of pop.) 2016 21,3 18,5 12,4 2,7 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 2010-2017 93,7 99,5 102,8 102,6 Primary School - Female 2010-2017 92,9 97,4 102,0 102,5 Infant Mortality Rate Secondary School - Total 2010-2017 38,1 51,9 59,5 108,5 ( Per 1000 ) Secondary School - Female 2010-2017 37,6 49,5 57,9 108,3 100 90 Primary School Female Teaching Staff (% of Total) 2010-2017 45,8 48,7 53,0 81,5 80 Adult literacy Rate - Total (%) 2010-2017 34,6 65,5 73,1 ... 70 60 Adult literacy Rate - Male (%) 2010-2017 44,4 77,0 79,1 ... 50 Adult literacy Rate - Female (%) 2010-2017 26,2 62,6 67,2 ... 40 30 Percentage of GDP Spent on Education 2010-2015 4,2 4,9 4,1 5,2 20 10
0
2000 2007 2013 2017 2012 2014 2015 2016 Environmental Indicators 2011 Land Use (Arable Land as % of Total Land Area) 2016 21,9 8,0 11,3 10,4 Agricultural Land (as % of land area) 2016 44,2 38,2 37,8 36,5 Forest (As % of Land Area) 2016 19,3 22,0 32,6 27,6 Bur kina Faso Africa Per Capita CO2 Emissions (metric tons) 2014 0,2 1,1 3,5 11,0
Sources : AfDB Statistics Department Databases; World Bank: World Development Indicators; last update : Febuary 2019 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
Annex II: Table of Bank Portfolio in Burkina Faso (30 September 2019)
Fulfilment Date 1st Amount UA Cumul Reste à Décaiss. en Taux Loan/Grant Approval Signature Effectivene Disbursem Cumul SECTOR PROJECT NAME TASK MANAGER CODE SAP Disbursem. Disbursem Disburse décaisser au 2019 au décaiss Number Date Date ss Date . Deadline Décaiss. Cond. . Loan/Grant Rate % 01/01/2019 30/09/2019 annuel % SUPPORT TRANSFORMATION ECONOMY - PATECE - GRANTEKPO Alain P-BF-KF0-009 2100155028217 17/09/2014 09/10/2014 09/10/2014 09/06/2015 18/08/2015 30/04/2020 10 000 000 61,25 6 125 000 4 985 580 1 110 595 22,28 Governance SUPPORT ENERGY SECTOR REFORMS - PARSE - LOAN EKPO Alain P-BF-KZ0-001 2100150039794 18/07/2018 28/08/2018 07/12/2018 10/12/2018 28/01/2019 30/06/2020 15 000 000 66,67 10 000 500 15 000 000 10 000 000 66,67 INTERNAL ACCESSIBILITY ROADS - LOAN YOUGBARE Barnabé P-BF-DB0-017 2100150030394 13/11/2013 09/01/2014 17/09/2014 17/09/2014 24/07/2015 31/12/2019 31 218 000 38,42 11 993 956 19 735 992 511 679 2,59 Transport INTERNAL ACCESSIBILITY ROADS - GRANT YOUGBARE Barnabé P-BF-DB0-017 2100155026370 13/11/2013 09/01/2014 09/01/2014 09/01/2014 04/02/2016 31/12/2019 15 220 000 34,83 5 301 126 10 119 638 200 224 1,98 SANITATION OUAGA PERIPHERY - SPAQPO - GRANT N'ZOMBIE Zounoubaté P-BF-EB0-001 2100155025919 09/10/2013 29/11/2013 29/11/2013 15/12/2014 23/03/2015 31/05/2019 33 020 000 82,19 27 139 138 6 156 262 273 856 4,45 Water - Sanitation NARE DAM REHABILITATION STUDY - GRANT N'ZOMBIE ZounoubatéP-BF-EAZ-002 5600155004501 11/04/2016 09/09/2016 09/09/2016 21/11/2016 20/12/2016 29/12/2019 671 689 63,26 424 910 601 226 350 866 58,36 ELECTRIFICATION OUAGA-BOBO PERI-URBAN AREA - LOANKITANDALA Raymond P-BF-FA0-007 2100150035993 21/09/2016 18/10/2016 24/04/2017 04/09/2017 01/12/2017 31/12/2020 20 600 000 89,84 18 507 040 8 401 983 6 309 288 75,09 Energy ELECTRIFICATION OUAGA-BOBO PERI-URBAN AREA - GRANTKITANDALA Raymond P-BF-FA0-007 2100155033166 21/09/2016 18/10/2016 18/10/2016 04/09/2017 27/11/2017 31/12/2020 6 630 000 31,87 2 112 981 5 159 844 642 589 12,45 YELEEN RURAL ELECTRIFICATION - GRANT BAH Adjaratou P-BF-FA0-010 2100155038671 14/12/2018 28/02/2019 28/02/2019 31/12/2023 3 000 000 0,00 0 3 000 000 0 0,00 RURAL YOUTH EMPLOYMENT - PADEJ-MR - GRANT OUEDRAOGO Alfred P-BF-I00-002 2100155038118 17/09/2018 26/10/2018 26/10/2018 18/04/2019 06/06/2019 31/12/2023 10 300 000 1,00 103 000 10 300 000 103 185 1,00 Social SUPPORT SHEA BUTTER VALUE CHAINS - GRANT OUEDRAOGO Alfred P-BF-AAG-001 5700155002552 12/07/2016 09/09/2016 27/02/2017 27/02/2017 16/02/2018 30/06/2019 728 129 83,10 605 075 363 911 246 524 67,74 SUPPORT BAGRE GROWTH POLE - LOAN BABAH M. Aly P-BF-AA0-025 2100150033093 29/04/2015 28/05/2015 01/12/2015 01/12/2015 09/09/2016 30/04/2021 15 000 000 69,96 10 494 000 4 516 759 10 066 0,22 SUPPORT BAGRE GROWTH POLE - GRANT BABAH M. Aly P-BF-AA0-025 2100155029766 29/04/2015 28/05/2015 01/12/2015 01/12/2015 15/02/2016 30/04/2021 6 000 000 36,67 2 200 200 4 073 490 273 709 6,72 SUPPORT CREATION AGRO-BUSINESS BANK - LOAN ATTIOGBEVI Eklou P-BF-HAA-001 2100150040995 14/12/2018 01/03/2019 26/07/2019 31/03/2021 7 500 000 0,00 0 7 500 000 0 0,00 Agric / Environ EMERGENCY AID AMERICAN ARMYWORM - GRANT BABAH M. Aly P-BF-A00-013 5000199005568 30/10/2018 01/03/2019 01/03/2019 01/03/2019 31/12/2019 733 003 0,00 0 733 003 0 0,00 MANAGEMENT CLASSIFIED FORESTS PGFC / REDD+ - GRANTGARBA Laouali VA 5565155000651 28/11/2013 09/01/2014 09/01/2014 11/07/2014 22/10/2014 31/12/2019 8 429 540 67,65 5 702 584 3 606 613 1 024 205 28,40 SUPPORT COMOE CASHEW NUT BASIN - LOAN GARBA Laouali P-BF-AAD-006 5565130000451 16/02/2017 24/03/2017 23/08/2017 18/09/2017 16/02/2018 31/12/2022 2 932 013 22,39 656 478 2 800 841 572 919 20,46 SUPPORT COMOE CASHEW NUT BASIN - GRANT GARBA Laouali P-BF-AAD-006 2100155034216 16/02/2017 24/03/2017 24/03/2017 18/09/2017 04/12/2017 31/12/2021 1 000 000 54,29 542 900 736 258 279 122 37,91 NATIONAL PUBLIC SECTOR PORTFOLIO 187 982 374 54,21 101 908 888 107 791 399 21 908 827 20,33 AFRICA SME PROGRAM FIDELIS DIGUIMBAYE Roseline P-BF-HB0-001 2000130013930 19/06/2014 30/07/2015 30/07/2015 21/08/2015 03/09/2015 30/07/2017 2 003 847 100,00 2 003 847 0 0 Private sector LINE OF CREDIT CORIS BANK INTERNATIONAL DIOP Sidi Gallo P-BF-HA0-001 2000130016582 23/11/2016 14/07/2017 14/07/2017 10/08/2017 23/08/2017 14/07/2019 30 458 480 100,00 30 458 480 0 0 NATIONAL PRIVATE SECTOR PORTFOLIO 32 462 327 100,00 32 462 327 0 0 0,00 RESILIENCE BUILDING P2RS - LOAN BABAH M. Aly P-Z1-AAZ-019 2100150032046 15/10/2014 09/01/2015 01/09/2015 16/10/2015 16/03/2016 30/06/2020 12 725 000 64,84 8 250 890 7 322 876 2 848 678 38,90 Regional Agric / RESILIENCE BUILDING P2RS - GRANT BABAH M. Aly P-Z1-AAZ-019 2100155028526 15/10/2014 09/01/2015 13/01/2015 08/06/2015 03/11/2015 30/06/2020 12 725 000 62,88 8 001 480 6 238 050 1 514 506 24,28 Environ. CLIMATE CHANGE - PIDACC ADF GRANT GARBA Laouali P-Z1-C00-064 2100155038916 07/11/2018 04/04/2019 04/04/2019 24/07/2019 26/09/2019 31/12/2025 2 000 000 2,15 43 000 2 000 000 0 0,00 CLIMATE CHANGE - PIDACC DON GEF GARBA Laouali P-Z1-C00-064 5550155001551 07/11/2018 04/04/2019 04/04/2019 31/12/2025 2 964 886 0,00 0 2 964 886 0 0,00 INTERCONNECTION NIGERIA-NIGER-BENIN-BURKINA - LOANKITANDALA Raymond P-Z1-FA0-146 2100150038699 15/12/2017 14/03/2018 23/07/2018 25/07/2019 31/12/2022 34 680 000 0,00 0 34 680 000 0 0,00 Regional Energy INTERCONNECTION: NIGERIA-NIGER-BENIN-BURKINA - GRANTKITANDALA Raymond P-Z1-FA0-146 2100155036219 15/12/2017 14/03/2018 14/03/2018 31/12/2022 15 320 000 0,00 0 15 320 000 0 0,00 REHABILITAT. AND FACILITATION LOME CORRIDOR - LOANDIOP Maïmounatou P-Z1-DB0-097 2100150027044 27/06/2012 19/07/2012 21/06/2013 30/08/2013 02/12/2014 31/03/2020 21 530 000 80,12 17 249 836 4 280 139 0 0,00 REHABILITAT. AND FACILITATION LOME CORRIDOR - GRANTDIOP Maïmounatou P-Z1-DB0-097 2100155023018 27/06/2012 19/07/2012 19/07/2012 30/08/2013 24/06/2014 31/03/2020 84 600 000 83,12 70 319 520 15 540 187 1 257 778 8,09 Regional REHABILITAT. AND FACILITATION LOME CORRIDOR - GRANTDIOP Maïmounatou P-Z1-DB0-097 5580155000051 23/02/2015 29/05/2015 29/05/2015 29/05/2015 02/12/2015 31/03/2020 934 504 37,59 351 280 590 972 0 0,00 Transport STRENGTHENING GOUNGHIN-FADA RN4 - LOAN YOUGBARE Barnabé P-Z1-DB0-182 2000200001856 24/11/2017 18/12/2017 23/01/2018 22/06/2018 31/12/2022 33 562 300 0,00 0 34 368 814 0 0,00 STRENGTHENING GOUNGHIN-FADA RN4 - GRANT YOUGBARE Barnabé P-Z1-DB0-182 2100155036022 24/11/2017 18/12/2017 18/12/2017 22/06/2018 31/12/2022 25 360 000 0,00 0 25 360 000 0 0,00 STRENGTHENING GOUNGHIN-FADA RN4 - LOAN YOUGBARE Barnabé P-Z1-DB0-182 2100150038495 24/11/2017 18/12/2017 23/01/2018 22/06/2018 16/08/2018 31/12/2022 16 000 000 0,74 118 400 15 882 285 0 0,00 REGIONAL PUBLIC SECTOR PORTFOLIO 262 401 690 39,76 104 334 406 164 548 209 5 620 962 3,42 GLOBAL PORTFOLIO 482 846 391 49,44 238 705 621 272 339 609 27 529 789 10,11
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OVERALL PORTFOLIO BREAKDOWN
National public UA 187,982,374 39% CFAF 152.888 billion Multinational public UA 262,401,690 54% CFAF 213.415 billion Private sector UA 32,462,327 7% CFAF 26.402 billion TOTAL UA 482,846,391 100% CFAF 392.705 billion
PUBLIC PORTFOLIO BREAKDOWN (NATIONAL AND REGIONAL)
SECTOR AMOUNT PERCENTAGE
Governance 25,000,000 6% Transport 228,424,804 51% Water-Sanitation 33,691,689 7% Social 11,028,129 2% Energy 80,230,000 18% Agriculture-Environment 72,009,442 16% TOTAL 450,384,064 100%
Graph 1 : Overall Portfolio Breakdown
7% Public national
39% Public multinational 54% Secteur privé
Graph 2: Public Portfolio Breakdown 6% Gouvernance 16% Transport Eau-Assainissement 18% Social 51% Energie 2% 7% Agric-Environmt
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DISBURSEMENT RATE TRENDS – OVERALL PORTFOLIO
TREND (%) FLAGGED PROJECTS - PUBLIC PORTFOLIO
30% 30%
21%
Mars 2019 Juin 2019 Sept. 2019
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Annex III: List of Related Projects in Burkina Faso Financed by the Bank and Other Development Partners in the Last Ten Years
Project Heading Implementation Source of Financing Total Project Period Cost (in CFAF Billion) Electricity Sub-sector Support Project 2014 - 2021 WORLD BANK (IDA), STATE 87.58 (PASEL) Electricity Infrastructure Strengthening and Rural Electrification Project 2010 - 2016 AfDB, STATE, SONABEL, FDE 26.05 (PRIELER) Bolgatanga (Ghana)-Ouagadougou STATE, SONABEL, AFD, EIB, (Burkina Faso) Electricity Interconnection 2013 - 2017 36.10 IDA Project Project to Promote Jatropha Curcas as a sustainable biofuel source in Burkina 2015 - 2018 STATE, GEF, UNDP 4.44 Faso Rural Electrification Project TEAM-9 2012 - 2016 EXIM BANK INDIA 13.54 Decentralised Rural Electrification Project in Ziro and Gourma Provinces 2014 - 2018 STATE EU 7.08 (ERD-ZIGO) Decentralised Rural Electrification Project through the Decentralised Solar 2015 - 2019 STATE, IDB 6.70 System (PERD/SPV) Energy Sector Budget Support 2015-2017 AfDB 16.63 Programme (PASE) Electrification Project for the Semi-Urban STATE, AfDB (ADF), Areas of Ouagadougou and Bobo- 2016 - 2020 31.42 SONABEL Dioulasso (PEPU) Project for the Extension and Strengthening of Electricity Networks in 2017-2021 STATE, SONABEL, OFID 28.86 Burkina Faso (PERREL) Zagtouli Photovoltaic Solar Production 2016 - 2017 STATE, EU, AFD 31.16 Project (33 MWc) Energy Sector Reforms Support 2018-2020 AfDB (ADF) 11.71 Programme Multinational Nigeria-Niger-Benin- AfDB (ADF), AFD, WORLD Burkina Faso Electricity Interconnection 2018-2022 170.65 BANK, BIDC ; EU-AIF Project AfDB (ADF), GCF, EU-AIF, Yeleen Rural Electrification Project 2019-2022 ABER, PRIVATE PARTNERS 49.04 (PPP) TOTAL 520.96
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Annex IV: Map of Project Area
This map was drawn by the staff of the African Development Bank Group exclusively for use by readers of the report to which it is attached. The names used and the boundaries shown do not imply on the part of the Bank Group and its members any judgement concerning the legal status of any territory or any endorsement or acceptance of such boundaries.
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