document of the world bank for official use only program appraisal document on a proposed credit ...

147 Pages·2016·1.83 MB·English

DOCUMENT OF
THE WORLD BANK

FOR OFFICIAL USE ONLY

PROGRAM APPRAISAL DOCUMENT
ON A
PROPOSED CREDIT

IN THE AMOUNT OF SDR XX MILLION
(US$200 MILLION EQUIVALENT)
AND A
PROPOSED SCALING-UP RENEWABLE ENERGY PROGRAM (SREP) GRANT
IN THE AMOUNT OF US$9 MILLION
AND A
PROPOSED SCALING-UP RENEWABLE ENERGY PROGRAM (SREP) LOAN
IN THE AMOUNT OF US$10 MILLION
TO THE

UNITED REPUBLIC OF TANZANIA
FOR A
TANZANIA RURAL ELECTRIFICATION EXPANSION PROJECT
MARCH 21, 2016

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 18, 2016)

Currency Unit = Tanzania Shilling (TZS)
US$1 = TZS 2175
US$1 = SDR 0.7249

FISCAL YEAR 2016

ABBREVIATIONS AND ACRONYMS
AfDB African Development Bank
AG Attorney General
AO Accounting Officer
APP Annual Procurement Plan
AWPB Annual Work Plans and Budget
CHM Complaints Handling Mechanism
CRB Contractor Registration Board
CUIS Common Use Items and Services
ERB Engineers Registration Board
BRN Big Results Now
CAG Controller and Auditor General
CAS Country Assistance Strategy
CASPR Country Assistance Strategy Progress Report
CL Credit Line
CRDB Cooperative Rural Development Bank
DfID U.K. Department for International Development
DLI Disbursement Linked Indicator
DP Development Partner
DPO Development Policy Operation
EC Evaluation Committee
EIRR Economic Internal Rate of Return
EMO Environmental Management Officer
EPP Emergency Power Producer
ESIA Environmental and Social Impact Assessment
ESMAP Energy Sector Management Assistance Program
ESSA Environmental and Social Systems Assessment
EU European Union
EWURA Energy and Water Utilities Regulatory Authority
F&C Fraud and Corruption
FM Financial Management
FSA Fiduciary Systems Assessment
GIS Geographic Information System
GoT Government of Tanzania
i
GDP Gross Domestic Product
GPN General Procurement Notice
GPSA Government Procurement Service Agency
GRS Grievance Redress Service
IAU Internal Audit Unit
ICB International Competitive Bidding
IFC International Finance Corporation
IPP Independent Power Producer
km kilometer
kV Kilovolt
kWh Kilowatt hour
LGA Local Government Authority
LLRF Loan Loss Reserve Fund
LoI Letter of Intent
LTPP Long-term Perspective Plan
LV Low Voltage
MCC Millennium Challenge Corporation
MEM Ministry of Energy and Minerals
M&E Monitoring and Evaluation
MKUKUTA Mpango wa Pili wa Kukuza Uchumi na Kuondoa Umaskini Tanzania
MoF Ministry of Finance
MoU Memorandum of Understanding
MTEF Medium Term Expenditure Framework
MV Medium Voltage
MW Megawatt
MWh Megawatt hour
NAO National Audit Office
NCB National Competitive Bidding
NEMC National Environmental Management Council
NEP National Energy Policy
NPV Net Present Value
NREP National Rural Electrification Program
OGPFM Open Government and Public Financial Management
PAC Parliamentary Accounts Committee
PAYG Pay-As-You-Go
PCCB Prevention and Combating of Corruption Bureau
PDO Program Development Objective
PE Procuring Entity
PEFA Public Expenditure and Financial Accountability
PER Public Expenditure Review
PFI Participating Financial Institution
PFM Public Financial Management
PforR Program for Results
PMC Project Management Consultant
PMU Procurement Management Unit
POM Program Operations Manual
PPA Public Procurement Act
PPAA Public Procurement Appeal Authority
PPRA Public Procurement Regulatory Authority
ii
PSC Program Steering Committee
PSM Payment Security Mechanism
PV Photovoltaic
REA Rural Energy Agency
REB Rural Energy Board
REF Rural Energy Fund
SCF Strategic Climate Fund
SIDA Swedish International Development Cooperation Agency
SPP Small Power Producer
SPPA Small Power Purchase Agreement
SREP Scaling-up Renewable Energy Program
SSMP Sustainable Solar Market Package
TA Technical Assistance
TB Tender Board
TANESCO Tanzania Electric Supply Company
TDV Tanzania Development Vision
TEDAP Tanzania Energy Development and Access Expansion Project
TIB Tanzania Investment Bank
ToR Terms of Reference
TRA Trust Agent
TREEP Tanzania Rural Electrification Expansion Project
UD User Department
VAT Value Added Tax

Regional Vice President: Makhtar Diop
Country Director: Bella Bird
Senior Global Practice Director: Anita Marangoly George
Practice Manager: Lucio Monari
Task Team Leader(s): Natalia Kulichenko/Richard Hosier

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UNITED REPUBLIC OF TANZANIA

Tanzania Rural Electrification Expansion Project

Table of Contents
Contents
I. STRATEGIC CONTEXT ..................................................................................................... 1
A. Country Context ................................................................................................................... 1
B. Sectoral and Institutional Context ....................................................................................... 2
C. Relationship to the CAS/CPS and Rationale for Use of Instrument .................................... 7
II. PROGRAM DESCRIPTION ............................................................................................... 8
A. Government Program .......................................................................................................... 8
B. Program Development Objective/s (PDO) and Key Results ............................................. 10
C. Program for Results Scope ................................................................................................ 10
D. Disbursement Linked Indicators and Verification Protocols ............................................ 14
E. Capacity Building and Institutional Strengthening ........................................................... 14
III. PROGRAM IMPLEMENTATION ................................................................................... 17
A. Institutional and Implementation Arrangements ............................................................... 17
B. Results Monitoring and Evaluation ................................................................................... 19
C. Disbursement Arrangements .............................................................................................. 19
IV. ASSESSMENT SUMMARY ........................................................................................... 19
A. Technical (including program economic evaluation) ........................................................ 19
B. Fiduciary ............................................................................................................................ 21
C. Environmental and Social Effects ...................................................................................... 23
D. Risk Assessment ................................................................................................................. 24
E. Program Action Plan ......................................................................................................... 26
Annex 1: Detailed Program Description ................................................................................... 27
Annex 2: Results Framework Matrix ....................................................................................... 42
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Annex 3: Disbursement Linked Indicators, Disbursement Arrangements and Verification
Protocols....................................................................................................................................... 49
Annex 4: Technical Assessment (Summary) ............................................................................ 57
Annex 5: Summary Fiduciary Systems Assessment ................................................................ 70
Annex 6: Summary Environmental and Social Systems Assessment .................................. 108
Annex 7: Integrated Risk Assessment ..................................................................................... 112
Annex 8: Program Action Plan ................................................................................................ 115
Annex 9: Implementation Support Plan ................................................................................. 118
Annex 10: Scaling Up Renewable Energy Program in Low-Income Countries ................. 121
Annex 11: Financial Analysis of TANESCO and the Electricity Sector in Tanzania ........ 133
Annex 12: Map of Existing MV Lines and Phased Electricity Network Expansion under
National Rural Electrification Program ................................................................................. 137

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PAD DATA SHEET
.
UNITED REPUBLIC OF TANZANIA
Tanzania Rural Electrification Expansion Project

PROGRAM APPRAISAL DOCUMENT

Africa
Energy and Extractives
.
Basic Information
Date: Sectors: Transmission and Distribution of Electricity
(75%), Renewable Energy (25%)
Country Director: Bella Bird Themes: Rural Services and Infrastructure (75%),
Infrastructure Services for Private Sector
Development (25%)
Practice Lucio Monari/Anita Marangoly
Manager/Senior Global George
Practice Director:
Program ID: P153781
Team Leader(s): Natalia Kulichenko/Richard Hosier
Program Implementation Period: Start Date: July XX, 2016 End Date: July XX, 2022
Expected Financing Effectiveness Date: July XX, 2016
Expected Financing Closing Date: July XX, 2022
.
Program Financing Data
[ ] Loan [ X] Grant [ ] Other
[ X ] Credit
For Loans/Credits/Others (US$, millions):
v
Total Program US$1,367 million Total Bank Financing: US$219

Cost: million
Total Co-financing : US$1,148 million Financing Gap :
.
Financing Source Amount (US$, millions)
BORROWER/RECIPIENT 900
IDA 200
SREP GRANT 9
SREP LOAN 10
SREP GRANT (IFC) 5
OTHER DEVELOPMENT PARTNERS 243
Total 1,367
.
Borrower: United Republic of Tanzania
Responsible Agency: Rural Energy Agency (REA)
Contact: Lutengano Mwakahesya Title: Director General
Telephone: [phone] E-mail: [email protected]
.
Expected Disbursements (in US$, millions)
Fiscal Year 2017 2018 2019 2020 2021 2022
Annual 47.3 49.3 48.7 42.3 15.7 15.7
Cumulative 47.3 96.6 145.3 187.6 203.3 219.0
.
Program Development Objective(s)
The program development objectives are to (a) increase access to electricity in rural areas and (b) scale up the supply of
renewable energy in rural areas while strengthening sector institutional capacity.

Compliance
Policy
Does the program depart from the CAS in content or in Yes [ ] No [ x ] [x]
other significant respects?
vi
.
Does the program require any waivers of Bank policies Yes [ ] No [ [x]
applicable to Program-for-Results operations?
Have these been approved by Bank management? Yes [ ] No [x]
Is approval for any policy waiver sought from the Board? Yes [ ] No [x]
Overall Risk Rating: Substantial
Legal Covenants
Name Recurrent Due Date Frequency

Description of Covenant

.
Team Composition
Bank Staff
Name Title Specialization Unit
Natalia Kulichenko Senior Energy Specialist Task team leader GEE01
Richard Hosier Senior Energy Specialist Co-task team leader GEE07
Vladislav Vucetic Lead Energy Specialist Project lead sector specialist GEE01
Sudeshna Banerjee Senior Economist Project economic analysis specialist GEE01
Koffi Ekouevi Senior Economist Project rural electrification GEE04
specialist, technical assessment
Mirlan Aldayarov Senior Energy Specialist Project intuitional arrangements GEE01
specialist, technical assessment
Teuta Kacaniku Infrastructure Finance Project financial specialist GEEFS
Specialist
Bassem Nehme Financial Analyst Program financial analysis GEE07
Patrick Balla Energy Specialist Off-grid development specialist GEE01
Florentina Mutafungwa Energy Specialist Program financial analysis specialist GEE01
Lara Born Junior Professional Officer Program financial and economic GEE01
analysis, technical assessment
Guillermo Hernandez Energy Specialist Project transmission and distribution GEE04
specialist, technical assessment
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Mercy Sabai Senior Financial Project financial management GGODR
Management Specialist specialist
Winter Chinamale Senior Procurement Project procurement GGODR
Specialist
Sanjay Srivastava Lead Environmental Project environmental safeguards GENDR
Specialist specialist
Jane Kibassa Senior Environmental Project environmental safeguards GENDR
Specialist specialist
Helen Shahriari Senior Social Scientist Project social safeguards specialist GSURR

Mary Bitekerezo Senior Social Development Project social safeguards specialist GSURR
Specialist
Inka Schomer Gender and Energy Project gender specialist GEEDR
Specialist
Gloria Sindano Program Assistant Project assistant AFCE1

Bernadette Milunga Program Assistant Project assistant GEE01
Faustina Chande Program Assistant Project assistant AFCE1
Non-Bank Staff
Name Title City
Subodh Mathur Senior Institutional expert Bethesda, MD
Rene Mendonca Senior Power engineer Miami, FL
John Maclean Senior Financial specialist Seattle, WA
Thomas Walton Senior Environmental Safeguards specialist Washington, DC
Alexandra Planas Senior Energy specialist Bogota, Colombia
Carlos Eduardo Vieira Statistical Analysis specialist Dar es Salaam, Tanzania
Batarda
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