China-Shandong-Energy-Efficiency
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The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: ICR00004826 IMPLEMENTATION COMPLETION AND RESULTS REPORT (LN 8059-CN) ON A LOAN Public Disclosure Authorized IN THE AMOUNT OF US$150 MILLION TO THE People's Republic of China FOR THE Shandong Energy Efficiency Project Public Disclosure Authorized July 9, 2019 Energy & Extractives Global Practice East Asia And Pacific Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective May 20, 2019) US$1 = RMB 6.9 FISCAL YEAR January 1 – December 30 Regional Vice President: Victoria Kwakwa Country Director: Martin Raiser Senior Global Practice Director: Riccardo Puliti Practice Manager: Jie Tang Task Team Leader(s): Jonathan Edwards Sinton, Yanqin Song ICR Main Contributor: Yanqin Song, Rachel Mok ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank CHUEE China Utility-based Energy Efficiency CHP Combined Heat and Power CPS Country Partnership Strategy ECSO Energy Conservation Supervision Office ECO Energy Conservation Office EE Energy Efficiency EHS Environmental, Health and Safety EIRR Economic Internal Rate of Return EMS Energy Management System EPC Energy Performance Contracting ESCO Energy service company EMCA Energy Management Contract Association FIRR Financial Internal Rate of Return FYP Five Year Plan GDP Gross Domestic Product GEF Global Environment Facility IFC International Finance Corporation ISR Implementation Status Report MOF Ministry of Finance NDRC National Development and Reform Commission PAD Project Appraisal Document PDO Project Development Objectives PIU Project Implementing Unit RPF Resettlement Policy Framework SCD Systematic Country Diagnostic SEEP Shandong Energy Efficiency Project SOE State Owned Enterprise TCE Tons of coal equivalent TABLE OF CONTENTS DATA SHEET .......................................................................................................................... 1 I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ........................................................... 5 A. CONTEXT AT APPRAISAL .........................................................................................................5 B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE) ..................................... 10 II. OUTCOME ....................................................................................................................... 13 A. RELEVANCE OF PDOs ............................................................................................................ 13 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 14 C. EFFICIENCY ........................................................................................................................... 19 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 21 E. OTHER OUTCOMES AND IMPACTS ......................................................................................... 21 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME .................................. 23 A. KEY FACTORS DURING PREPARATION ................................................................................... 23 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 24 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .... 25 A. QUALITY OF MONITORING AND EVALUATION (M&E) ............................................................ 25 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 27 C. BANK PERFORMANCE ........................................................................................................... 29 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 29 V. LESSONS AND RECOMMENDATIONS ................................................................................ 30 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 32 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 36 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 38 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 39 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 42 ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 44 The World Bank Shandong Energy Efficiency Project (P114069) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P114069 Shandong Energy Efficiency Project Country Financing Instrument China Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency People's Republic of China Shandong Financial Bureau Project Development Objective (PDO) Original PDO The objective of the Project is to improve energy efficiency in selected enterprises in the Borrower's Shandong Province,particularly through financial leasing arrangements, and increase use of biomass for power and heat generation. Revised PDO The objective of the Project is to improve energy efficiency in selected enterprises in the Borrower's ShandongProvince,particularly through financial leasing arrangements. Page 1 of 46 The World Bank Shandong Energy Efficiency Project (P114069) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing 150,000,000 110,081,967 110,081,967 IBRD-80590 Total 150,000,000 110,081,967 110,081,967 Non-World Bank Financing 0 0 0 Borrower/Recipient 167,100,000 0 0 Total 167,100,000 0 0 Total Project Cost 317,100,000 110,081,967 110,081,967 KEY DATES Approval Effectiveness MTR Review Original Closing Actual Closing 09-Jun-2011 25-Nov-2011 03-Nov-2014 30-Sep-2016 31-Dec-2018 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 07-Aug-2013 15.00 Other Change(s) 30-Sep-2016 55.00 Change in Project Development Objectives Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Cancellation of Financing Change in Financing Plan Change in Disbursements Arrangements Change in Implementation Schedule Other Change(s) 29-Mar-2018 116.27 Change in Loan Closing Date(s) Reallocation between Disbursement Categories KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Substantial Page 2 of 46 The World Bank Shandong Energy Efficiency Project (P114069) RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 22-Sep-2011 Satisfactory Satisfactory 0 02 07-Nov-2012 Satisfactory Moderately Satisfactory 15.00 03 23-Jun-2013 Moderately Satisfactory Moderately Satisfactory 15.00 04 22-Dec-2013 Moderately Satisfactory Moderately Satisfactory 15.00 05 24-Jun-2014 Moderately Satisfactory Moderately Satisfactory 15.00 06 09-Dec-2014 Moderately Satisfactory Moderately Satisfactory 15.00 07 16-Jun-2015 Moderately Satisfactory Moderately Unsatisfactory 27.68 Moderately 08 09-Dec-2015 Moderately Unsatisfactory 37.56 Unsatisfactory Moderately 09 24-Mar-2016 Moderately Unsatisfactory 45.12 Unsatisfactory Moderately 10 06-Nov-2016 Moderately Unsatisfactory 55.00 Unsatisfactory 11 04-May-2017 Moderately Satisfactory Moderately Satisfactory 89.71 Moderately 12 27-Nov-2017 Moderately Unsatisfactory 116.27 Unsatisfactory 13 18-Jun-2018 Moderately Satisfactory Moderately Satisfactory 116.27 14 24-Jun-2019 Moderately Satisfactory Moderately Satisfactory 109.71 SECTORS AND THEMES Sectors Major Sector/Sector (%) Energy and Extractives 100 Renewable Energy Biomass 12 Public Administration - Energy and Extractives 1 Other Energy and Extractives 87 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Page 3 of 46 The World Bank Shandong Energy Efficiency Project (P114069) Environment and Natural Resource Management 100 Climate change 100 Mitigation 100 ADM STAFF Role At Approval At ICR Regional Vice President: James W. Adams Victoria Kwakwa Country Director: Klaus Rohland Martin Raiser Director: Ranjit J. Lamech Practice Manager: John A. Roome Jie Tang Jonathan Edwards Sinton, Task Team Leader(s): Gailius J. Draugelis Yanqin Song ICR Contributing Author: Yanqin Song Page 4 of 46 The World Bank Shandong Energy Efficiency Project (P114069) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Context 1. At the time of appraisal, Energy Efficiency (EE) was a key measure for China’s efforts to mitigate Climate Change impacts. China’s leadership had called for a reduction in carbon dioxide intensity of its economy (CO2 emissions per unit of GDP) by 40-45 percent from 2005 to 2020. Achievement of this objective would require sustained efforts to reduce energy intensity in the economy and increase the share of non-coal fuels in the energy mix. Related targets included to reduce energy intensity per unit of GDP by 20 percent from 2005 to 2010 and increase the share of primary energy from non-fossil fuel sources to 15 percent by 2020. The 12th Five Year Plan (FYP) set a target to reduce energy intensity by 16 percent from 2011 to 2015. These national targets indicate recognition that due to China’s size, its efficient use of natural resources is critical not only to its own sustainable