Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 67296-AFR PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR 93.3 MILLION (US$144.5 MILLION EQUIVALENT) TO THE Public Disclosure Authorized REPUBLIC OF LIBERIA FOR A WEST AFRICAN POWER POOL (WAPP) - COTE D'IVOIRE, LIBERIA, SIERRA LEONE, AND GUINEA (CLSG) POWER INTERCONNECTION PROJECT AND A PROPOSED GRANT IN THE AMOUNT OF SDR 20.4 MILLION Public Disclosure Authorized (US$31.5 MILLION EQUIVALENT) TO THE WEST AFRICAN POWER POOL (WAPP) FOR A WAPP INTEGRATION AND TECHNICAL ASSISTANCE PROJECT IN SUPPORT OF THE FIRST PHASE OF THE CLSG POWER SYSTEM RE-DEVELOPMENT SUB-PROGRAM OF THE WAPP APL PROGRAM Public Disclosure Authorized May 4, 2012 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective March 31, 2012) € 1 = US$ 1.33 SDR 1 = US$ 0.64554 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank CEB Communauté Electrique du Bénin (Electric Community of Benin) CLSG Côte d‟Ivoire, Liberia, Sierra Leone, and Guinea ECOWAS Economic Community of West African States EIB European Investment Bank EEP ECOWAS Energy Protocol ERERA ECOWAS Regional Electricity Regulatory Authority ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan FIRR Financial Internal Rate of Return FMM Financial Management Manual FNPV Financial net present value JIC Joint Implementation Committee (see also WAPP JIC below) HV High voltage IDA International Development Association IDC Interest during construction IPA International Project Agreement IPP Independent Power Producer GRIDCO Ghana Grid Company Limited GWh Giga Watt hours KfW Kreditanstalt für Wiederaufbau km Kilometer kV Kilo Volt kWh Kilo Watt hours M&E Monitoring and Evaluation MW Megawatt NEPAD New Partnership for African Development NPA National Power Authority (of Sierra Leone) NPV Net present value OMVG Organisation de Mise en Valeur du Fleuve Gambie (Organization for the Development of the River Gambia) OMVS Organisation de Mise en Valeur du Fleuve Sénégal (Orgnization for the Development of the River Senegal) OPGW Optical Fiber Ground Wire i PPA Power Purchase Agreement PIPES Planning, Investment Programming and Environmental Safeguards Department at the WAPP RAP Resettlement Action Plan RIAS Regional Integration Assistance Strategy RoW Right-of-way RTC CLSG Regional Transmission Company SCADA Supervisory Control And Data Acquisition SIEPAC Sistema de Interconexión Eléctrica de los Países de América Central or Central American Electrical Interconnection System SOGEM Société de Gestion de l‟Energie de Manantali (Energy Management Company for Manantali) SONABEL Société Nationale d‟Electricité de Burkina Faso (National Power Company of Burkina Faso) SPC Special Purpose Company SWER Single wire earth return system SWS Shield wire system TSA Transmission Service Agreement TSO Transmission System Operator WAPP West African Power Pool WAPP JIC West African Power Pool Joint Implementation Committee Regional Vice President: Obiageli K. Ezekwesili Acting Regional Director: Elizabeth Laura Lule Country Director: Yusupha Crookes Sector Director: Jamal Saghir Sector Manager: Lucio Monari Task Team Leader: Fanny Missfeldt-Ringius ii LIBERIA West African Power Pool (WAPP) - Côte d'Ivoire, Sierra Leone, Liberia, and Guinea Power Interconnection Project WAPP WAPP Integration and Technical Assistance Project TABLE OF CONTENTS Page I. STRATEGIC CONTEXT .................................................................................................1 A. Regional Context .......................................................................................................... 1 B. Sectoral and Institutional Context ................................................................................. 6 C. Higher Level Objectives to which the Project Contributes .......................................... 8 II. PROJECT DEVELOPMENT OBJECTIVES ................................................................9 A. PDO............................................................................................................................... 9 B. Project Beneficiaries .................................................................................................... 10 C. PDO Level Results Indicators ...................................................................................... 10 III. PROJECT DESCRIPTION ............................................................................................11 A. Project Components .................................................................................................... 11 B. Project Financing ........................................................................................................ 15 Lending Instrument ........................................................................................................... 15 Project Cost and Financing ............................................................................................... 15 C. Program Objective and Phases.................................................................................... 17 D. Lessons Learned and Reflected in the Project Design ................................................ 17 IV. IMPLEMENTATION .....................................................................................................21 A. Institutional and Implementation Arrangements ........................................................ 21 B. Results Monitoring and Evaluation ............................................................................ 22 C. Sustainability............................................................................................................... 23 V. KEY RISKS AND MITIGATION MEASURES ..........................................................24 A. Risk Ratings Summary Table ..................................................................................... 24 B. Overall Risk Rating Explanation ................................................................................ 24 iii VI. APPRAISAL SUMMARY ..............................................................................................25 A. Economic and Financial Analyses .............................................................................. 25 B. Technical ..................................................................................................................... 27 C. Financial Management ................................................................................................ 27 D. Procurement ................................................................................................................ 28 E. Environmental and Social Safeguards ........................................................................ 28 F. Environmental and Social Issues ................................................................................. 35 Annex 1: Results Framework and Monitoring for the WAPP CLSG Power Interconnection Project ...........................................................................................................................................37 Annex 2: Results Framework and Monitoring for the WAPP Integration and Technical Assistance Project ........................................................................................................................40 Annex 3: Detailed Project Description .......................................................................................41 Annex 4: Implementation Arrangements ..................................................................................53 Annex 5 Operational Risk Assessment Framework (ORAF) ..................................................70 Annex 6: Implementation Support Plan ....................................................................................73 Annex 7: Economic and Financial Analysis ..............................................................................78 Annex 8: Trading Potential and Arrangements ......................................................................102 Annex 9: Institutional Structure for the CLSG Interconnector ............................................107 Annex 10: Implementation Status of Projects of the West Africa Power Pool (WAPP) Adaptable Lending Program ....................................................................................................115 Annex 11: Environmental and Social Safeguards ..................................................................121 iv PAD DATA SHEET Liberia West African Power Pool (WAPP) - Côte d‟Ivoire, Liberia, Sierra Leone, and Guinea Power Interconnection Project WAPP WAPP Integration and Technical Assistance Project PROJECT APPRAISAL DOCUMENT . Africa AFTEG . Basic Information Date: May 4, 2012 Sectors: Power (90%); General Energy Sector (10%) Country Director: Yusupha Crookes Themes: Infrastructure services for private sector Sector Lucio Monari / Jamal Saghir EA Category: A (Full Assessment) Manager/Director: Project ID: P113266 Lending Instrument: Adaptable Program Loan Team Leader(s): Fanny Missfeldt-Ringius Joint IFC: No . Recipient: The Republic of Liberia, The West African Power Pool Responsible Agency: The CLSG Regional Transmission Company Contact: Shahid Mohammed Title: Chief Executive Officer Telephone No.: +231 880