FOR OFFICIAL USE ONLY Report No: PAD3283 Public Disclosure Authorized INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND/OR INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT FROM THE ENERGY SECTOR MANAGEMENT ASSISTANCE PROGRAM IN THE AMOUNT OF US$0.86 MILLION AND A Public Disclosure Authorized PROPOSED GRANT FROM THE READINESS FUND OF THE CARBON INITIATIVE FOR DEVELOPMENT IN THE AMOUNT OF US$0.38 MILLION AND A PROPOSED CARBON FINANCE TRANSACTION FROM THE CARBON FUND OF THE CARBON INITIATIVE FOR DEVELOPMENT IN AN AMOUNT UP TO US$5.2 MILLION Public Disclosure Authorized TO THE LAO PEOPLE’S DEMOCRATIC REPUBLIC FOR THE CLEAN COOK STOVE INITIATIVE PROJECT June 25, 2019 Public Disclosure Authorized Energy & Extractives Global Practice East Asia And Pacific Region The World Bank 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 May 31, 2019) Currency Unit = Lao Kip (LAK) US$0.0001 = LAK 1 US$1 = LAK 8686.08 FISCAL YEAR January 1 - December 31 Regional Vice President: Victoria Kwakwa Country Director: Ellen A. Goldstein Senior Global Practice Director: Riccardo Puliti Practice Manager: Julia M. Fraser Task Team Leader: Rutu Dave ABBREVIATIONS AND ACRONYMS ADALY Averted Disability Adjusted Life Years ASEAN Association of Southeast Asian Nations BIX Base of the Pyramid Impact eXchange CDM Clean Development Mechanism CERs Certified Emission Reductions CO Carbon Monoxide CO2 Carbon Dioxide CPF Country Partnership Framework CSI Clean Stove Initiative DA Designated Account DDEM District Departments of the Ministry of Energy and Mines EAP East Asia and Pacific EAPGIL East Asia and Pacific Gender Innovation Lab ECCH Efficient Clean Cooking and Heating Program ERPA Emission Reduction Purchase Agreement ERs Emission Reductions ESCP Environmental and Social Commitment Plan ESF Environmental and Social Framework ESMAP Energy Sector Management Assistance Program GDP Gross Domestic Product GEF Global Environment Facility GHG Greenhouse Gas GNI Gross National Income HAP Household Air Pollution HGNDP Health Governance Nutrition Development Program HMTA Hydro-Mining Technology Assistance IREP Institute for Renewable Energy Promotion IRR Implementation Rule and Regulations ISO International Organization for Standardization LDC Least Developed Country LPG Liquified Petroleum Gas M&E Monitoring and Evaluation MEM Ministry of Energy and Mines MOES Ministry of Education and Sports MOF Ministry of Finance MOH Ministry of Health MOIC Ministry of Industry and Commerce MONRE Ministry of Natural Resource and Environment MOST Ministry of Technology and Science MRV Monitoring Reporting, and Verification NDC Nationally Determined Contribution NO2 Nitrogen Dioxide NSEDP National Socio-Economic Development Plan ODA Official Development Finance OA Operating Account PDEM Provincial Departments of the Ministry of Energy and Mines PDO Project Development Objective PDR People's Democratic Republic PM Particulate Matter PoA Programme of Activities PPP Public-Private Partnership PPSD Project Procurement Strategy for Development PRF Poverty Reduction Fund RBF Results-Based Financing RCT Randomized Control Trial REDS Renewable Energy Development Strategy ROI Return on Investment SDG Sustainable Development Goals SEP Stakeholder Engagement Plan SNV Netherland’s Development Organisation SO2 Sulfur Dioxide STEP Systematic Tracking of Exchanges in Procurement TOR Terms of Reference UNFCCC United Nations Framework Convention on Climate Change UNIDO United Nations Industrial Development Organization WFP World Food Programme WHO World Health Organization WMP Waste Management Plan The World Bank Lao PDR Clean Cook Stove Initiative (P169538) TABLE OF CONTENTS DATASHEET ................................................................................. Error! Bookmark not defined. STRATEGIC CONTEXT ............................................................................................................. 8 A. Country Context................................................................................................................................ 8 B. Sectoral and Institutional Context .................................................................................................... 9 C. Relevance to Higher Level Objectives ............................................................................................. 12 PROJECT DESCRIPTION ........................................................................................................ 13 A. Project Development Objective ..................................................................................................... 13 B. Project Components ....................................................................................................................... 13 C. Project Beneficiaries ....................................................................................................................... 21 D. Results Chain .................................................................................................................................. 22 E. Rationale for Bank Involvement and Role of Partners ................................................................... 25 F. Lessons Learned and Reflected in the Project Design .................................................................... 26 IMPLEMENTATION ARRANGEMENTS ................................................................................... 29 A. Institutional and Implementation Arrangements .......................................................................... 29 B. Results Monitoring and Evaluation Arrangements......................................................................... 30 C. Sustainability ................................................................................................................................... 31 PROJECT APPRAISAL SUMMARY .......................................................................................... 32 A. Technical, Economic and Financial Analysis (if applicable) ............................................................ 32 B. Fiduciary .......................................................................................................................................... 36 C. Legal Operational Policies ............................................................................................................... 37 D. Environmental and Social ............................................................................................................... 37 GRIEVANCE REDRESS SERVICES ............................................................................................ 38 KEY RISKS ............................................................................................................................ 38 RESULTS FRAMEWORK AND MONITORING ................................................................... 40 ANNEX 1: Implementation Arrangements and Support Plan .......................................... 48 ANNEX 2: Lessons Learned Integrated in the Project Design .......................................... 57 ANNEX 3: Clean Cooking Technology in Lao PDR: Summary of Impact Evaluation Design 60 ANNEX 4: Technology Specifications ............................................................................. 63 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) DATASHEET BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name Lao People's Lao PDR Clean Cook Stove Initiative Democratic Republic Project ID Financing Instrument Environmental and Social Risk Classification Investment Project P169538 Moderate Financing Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC) [ ] Series of Projects (SOP) [ ] Fragile State(s) [ ] Disbursement-linked Indicators (DLIs) [ ] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternate Procurement Arrangements (APA) Expected Approval Date Expected Closing Date 25-Jun-2019 31-Dec-2025 Bank/IFC Collaboration No Proposed Development Objective(s) Generate environment and gender benefits for targeted households through a switch to clean, energy efficient gasifier cookstoves using biomass pellets across selected provinces. Page 1 of 64 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) Components Component Name Cost (US$, millions) Carbon Finance Capacity Building 0.38 Project Management and Implementation Technical Assistance 0.86 Carbon Emission Reduction Program 5.20 Organizations Borrower: Lao People's Democratic Republic Implementing Agency: The Ministry of Energy and Mines (MEM) PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 6.44 Total Financing 6.44 of which IBRD/IDA 0.00 Financing Gap 0.00 DETAILS-NewFinEnh1 Non-World Bank Group Financing Trust Funds 6.44 Carbon Initiative for Development 5.58 Energy Sector Management Assistance Program 0.86 Expected Disbursements (in US$, Millions) WB Fiscal Year 2019 2020 2021 2022 2023 2024 2025 2026 Annual 0.00 0.42 0.55 0.91 1.19 1.15 1.18 1.03 Cumulative 0.00 0.42 0.97 1.88 3.08 4.23 5.41 6.44 Page 2 of 64 The World Bank Lao PDR Clean Cook Stove Initiative (P169538) INSTITUTIONAL DATA Practice