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Document of The World Bank Public Disclosure Authorized Report No: ICR00003363 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-41200 IDA-H5740 IDA-H7830) ON A CREDIT IN THE AMOUNT OF SDR 4.7 MILLION (US$ 7.0 MILLION EQUIVALENT) Public Disclosure Authorized AND A GRANT IN THE AMOUNT OF SDR 4.0 MILLION (US$ 6.0 MILLION EQUIVALENT) AND A GRANT IN THE AMOUNT OF SDR 3.4 MILLION (US$ 5.2 MILLION EQUIVALENT) Public Disclosure Authorized TO THE REPUBLIC OF DJIBOUTI FOR A POWER ACCESS AND DIVERSIFICATION PROJECT September 27, 2015 Energy & Extractives Global Practice Public Disclosure Authorized Middle East and North Africa Region CURRENCY EQUIVALENTS (Exchange Rate Effective April 30, 2015) Currency Unit = FDJ Euro 1.00 = US$ 1.12 US$ 1.00 = 176.89 FDJ FISCAL YEAR ABBREVIATIONS AND ACRONYMS AF Additional Financing AFD French Development Agency (Agence Française de Développement) AfDB African Development Bank CAS Country Assistance Strategy CMS Customer Management Software (or System) CPS Country Partnership Strategy CERD Djibouti Center for Studies and Research (Centre d’Etudes et de Recherches de Djibouti) EDD Djibouti Electricity Company (Electricité de Djibouti) EHS Environment, Health and Safety EPC Engineer, Procure, Construct ERR Economic Rate of Return ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan ESMAP Energy Sector Management Assistance Program FDJ Djiboutian Franc FDI Foreign Direct Investments GDP Gross Domestic Product GEF Global Environment Facility GoDj Government of Djibouti GWh Gigawatt Hour HFO Heavy Fuel Oil HR Human resources IC Individual Consultant ICB International Competitive Bidding IDA International Development Association IFC International Finance Corporation IPP Independent Power Producer IRENA International Renewable ENergy Agency IT Information and Telecommunication Km Kilometer kVA Kilovolt Ampere kWh Kilowatt Hours LCB Local Competitive Bidding LPC Local Project Coordinator LV Low Voltage MENA Middle East and North Africa MOE Ministry of Energy, Water, and Natural Resources MOF Ministry of Finance MW Megawatts NCB National Competitive Bidding NPV Net Present Value OFID OPEC Fund for International Development O&M Operation & Maintenance ONED Office National des Eaux de Djibouti (National Water Supply Company) ORAF Operational Risk Assessment Framework PADSE Projet d’Accès et de Diversification du Secteur de l’Energie (Project ’s name) PCN Project Concept Note PDO Project Development Objectives PEFA Public Expenditure and Financial Accountability PK Point Kilométrique PMU Project Management Unit PLC Power Line Communication PPA Power Purchase Agreement PPIAF Public-Private Infrastructure Advisory Facility PPP Public Private Partnership QCBS Quality and Cost-Based Selection RE Renewable Energy ROE Return on Equity SIL Specific Investment Loan SG Secretary General SDR Special Drawing Rights SMEs Small Medium-Size Enterprises SOE Statement of Expenditures SW Staff-Week TA Technical Assistance TTL Task Team Leader UGPE Unité de Gestion du Projet Energie (Project Management Unit) WB World Bank WACC Weighted Average Cost of Capital Vice President: Hafez M. H. Ghanem Country Director: Asad Alam Country Manager: Homa-Zahra Fotouhi Senior Global Practice Director: Anita Marangoly George Practice Manager: Charles Joseph Cormier Task Team Leader: Roger Coma Cunill ICR Team Leader and Author: Frederic Verdol Republic of Djibouti Power Access and Diversification Project Implementation Completion and Results Report Data Sheet A. Basic Information ........................................................................................................ i B. Key Dates .................................................................................................................... i C. Ratings Summary ........................................................................................................ i D. Sector and Theme Codes ........................................................................................... ii E. Bank Staff ................................................................................................................... ii F. Results Framework Analysis ..................................................................................... iii G. Ratings of Project Performance in ISRs .................................................................. vii H. Restructuring (if any) ............................................................................................... vii I. Disbursement Profile ............................................................................................... viii 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes ............................................ 10 3. Assessment of Outcomes .......................................................................................... 18 4. Assessment of Risk to Development Outcome ......................................................... 22 5. Assessment of Bank and Borrower Performance ..................................................... 22 6. Lessons Learned ....................................................................................................... 25 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 27 Annex 1. Project Costs and Financing .......................................................................... 29 Annex 2. Outputs by Component ................................................................................. 30 Annex 3. Economic and Financial Analysis ................................................................. 33 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 35 Annex 5. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 37 Annex 6. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 41 Annex 7. List of Supporting Documents ...................................................................... 44 Map ............................................................................................................................... 45 Data Sheet A. Basic Information Djibouti Power Access Country: Djibouti Project Name: and Diversification Project IDA-41200,IDA- Project ID: P086379 L/C/TF Number(s): H5740,IDA-H7830 ICR Date: 06/30/2015 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: SIL Borrower: DJIBOUTI Original Total XDR 4.70M Disbursed Amount: XDR 11.90M Commitment: Revised Amount: XDR 12.10M Environmental Category: B Implementing Agencies: Primature / PMU - Tel. 253/35.18.12 – [email protected] Cofinanciers and Other External Partners: None B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 04/20/2004 Effectiveness: 03/29/2006 03/29/2006 12/31/2008 12/17/2009 Appraisal: 04/18/2005 Restructuring(s): 12/30/2010 03/30/2012 03/31/2013 Approval: 11/01/2005 Mid-term Review: NA NA Closing: 12/31/2009 12/31/2014 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Quality of Implementing Satisfactory Satisfactory Supervision: Agency/Agencies: Overall Bank Overall Borrower Moderately Satisfactory Moderately Satisfactory Performance: Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation Indicators QAG Assessments (if any) Rating Performance Potential Problem Project Yes Quality at Entry (QEA): None at any time (Yes/No): Problem Project at any Yes Quality of Supervision (QSA): None time (Yes/No): DO rating before Moderately Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General energy sector 30 Other Renewable Energy 76 10 Transmission and Distribution of Electricity 22 55 Water supply 2 5 Theme Code (as % of total Bank financing) Climate change 25 25 Infrastructure services for private sector development 25 5 Urban services and housing for the poor 50 70 E. Bank Staff Positions At ICR At Approval Vice President: Hafez M. H. Ghanem Christiaan J. Poortman Country Director: Asad Alam Emmanuel Mbi Practice Manager Charles Joseph Cormier Jonathan D. Walters Project Team Leader: Roger Coma Cunill Anna M. Bjerde ICR Team Leader: Frederic Verdol ICR Primary Author: Frederic Verdol F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objectives are to (i) increase the access of underserved populations to electricity services, through priority investments, (ii) increase reliability of electricity services, through the development of alternative sources of production and targeted technical assistance; and (iii) improve efficiency of the electric utility, through technical assistance. Revised Project Development Objectives (as approved by original approving authority) The revised project development objectives (June 2010) are: (i) to increase access of underserved populations to electricity services; (ii) to improve EDD's efficiency through execution of investment operations aimed at reducing EDD's electricity losses, and; (iii) to reduce the negative effects of drought on