Project Appraisal Document - World Bank Internet Error Page

191 Pages·2012·6.64 MB·English

by  World Bank Group

d
e
z
ri
o
h
ut
A
e
r
u
s Document of
o
cl The World Bank
s
Di
c
bli FOR OFFICIAL USE ONLY
u
P

Report No: 67174-CM

d
e
z INTERNATIONAL DEVELOPMENT ASSOCIATION
ri
o
h
ut
A
e
r
u
s PROJECT APPRAISAL DOCUMENT
o
cl
s
Di ON A
c
bli
u
P PROPOSED CREDIT

d IN THE AMOUNT OF SDR 85.2 MILLION
e
z
ri (US$132 MILLION EQUIVALENT)
o
h
ut
A TO THE
e
ur
s
o REPUBLIC OF CAMEROON
cl
s
Di
c FOR A
bli
u
P
LOM PANGAR HYDROPOWER PROJECT

March 1, 2012

d
e
z
ri
o
h
ut
A
e
r
u
s
o
cl
s This document has a restricted distribution and may be used by recipients only in the
Di
c performance of their official duties. Its contents may not otherwise be disclosed without World
bli Bank authorization.
u
P
CURRENCY EQUIVALENTS

(Exchange Rate Effective February 20, 2012)
Currency Unit = CFA Franc
FCFA 495 = US$1
SDR1 = US$1.544430
Euro1 = US$1.33

FISCAL YEAR
January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AER Agence d’Electrification Rurale (Rural Electrification Agency)
AES-SONEL AES - Société Nationale d’Electricité (National Electricity Company)
AFD French Development Agency
AfDB African Development Bank
Alucam Compagnie camerounaise de l'aluminium (Cameroon Aluminium Company)
AMSL Above Mean Sea Level
ARMP Agence de Régulation des Marchés Publics (Public Procurement Regulatory
Agency)
ARSEL Agence de Régulation du Secteur d’Electricité (Electricity Sector Regulatory
Agency)
B/C Benefit-Cost Ratio
BDEAC Banque de Développement des Etats d’Afrique Centrale (Central African
States Development Bank)
BEAC Banque des Etats de l’Afrique Centrale (Bank of Central African States
Central)
BP Bank Procedures
CAA Caisse Autonome d'Amortissement (Autonomous Sinking Fund)
CAS Country Assistance Strategy
CCP Chad-Cameroon Pipeline
CdP Comité de pilotage (Steering Committee)
COPIL Comité de pilotage et de suivi du projet de renforcement et d'extension des
réseaux électriques de transport et de distribution (Steering Committee for the
Project to Reinforce and Extend Electricity Transmission and Distribution
Networks)
COTCO Cameroon Oil Transportion Company
CPIA Country Performance Indicators Assessment
CQS Selection Based on Consultants’ Qualifications
CSO Civil Society Organizations
CWE China International Water & Electric Corporation
DDNP Deng Deng National Park
EA Environmental Assessment
EDC Electricity Development Corporation
EIA Environmental Impact Assessment
ii
EIB European Investment Bank
EIRR Economic Internal Rate of Return
EOI Expressions of Interest
EPC Engineer, Procure and Construct
EPCM Engineering, Procurement, Construction, and Construction Management
EPP Emergency Preparedness Plan
ESA Environmental and Social Assessment
ESDP Energy Sector Development Project
ESMAP Energy Sector Management Program
ESMP Environmental and Social Management Plan
FCFA Central African Franc
FEICOM Fond Spécial d’Equipement et d’Intervention Intercommunale (Special Fund
for Equipment and Mutual Assistance)
FM Financial Management
FSC Forest Stewardship Council
FSL Full Supply Level
GDP Gross Domestic Product
GIS Geographic Information System
GOC Government of Cameroon
GW Giga watt
GWh Giga watt hour
HDI Human Development Index
HFO Heavy Fuel Oil
HIV/AIDS Human Immunodeficiency Virus/ Acquired Immune Deficiency Syndrome
HT/MT High-tension/Medium-tension
HV High-voltage
IBRD International Bank for Reconstruction and Development
ICB International competitive bidding
IDA International Development Association
IFC International Finance Corporation
IFR Interim Financial Reports
IMF International Monetary Fund
IPP Independent Power Producer
IRR Internal economic rate of return
ISA International Standards on Auditing
ISP Implementation Support Plan
IUCN International Union for the Conservation of Nature
km Kilometer(s)
KPDC Kribi Power Development Company
kV Kilovolt
kW Kilowatt
LCS Least-Cost Selection
LDP Local Development Program
LIB Limited International Bidding
LPHP Lom Pangar Hydropower Project
LV/MV Low-voltage/medium-voltage
iii
M&E Monitoring and Evaluation
MINAC Ministry of Art and Culture
MINADER Ministry of Agriculture and Rural Development
MINATD Ministry of Territorial Administration and Decentralization
MINCAF Ministry of Property Survey and Land Tenure
MINDEF Ministry of Defence
MINEE Ministry of Water Resources and Energy
MINEPAT Ministry of Economy, Planning and Regional Development
MINEPDED Ministry of Environment, Nature Protection, and Sustainable Development
MINEPIA Ministry of Livestock, Fisheries and Animal Industries
MINFI Ministry of Finance
MINFOF Ministry of Forestry and Wildlife
MINIMIDT Ministry of Industry, Mines and Technological Development
MINSANTE Ministry of Health
MINTP Ministry of Public Works
MoU Memorandum of Understanding
MTEF Medium Term Expenditure Framework
MV Megavolt
MW Megawatt
NCB National-Competitive Bidding
NGO Non-Governmental Organization
NPV Net Present Value
NT2 Nam Theun 2
O&M Operation and Maintenance
OECD Organisation for Economic Cooperation and Development
OHADA Organisation pour l’Harmonisation en Afrique du Droit des Affaires
(Organization for the Harmonisation of Business Law in Africa)
OLB Origine Légale Bois
OP Operational Policy
OPEX Operational Expenditure
ORAF Overall Risk Assessment Framework
PANERP National Energy Plan for Poverty Reduction
PAPs Project-Affected People
PDO Project Development Objective
PDSE Plan du Développement du Secteur d’Electricité (Energy Sector Development
Plan)
PIM Project Implementation Manual
PIU Project Implementation Unit
PMP Pest Management Plan
PNDP Community Development Program Support Project
PPA Power Purchase Agreement
PPIAF Public Private Infrastructure Advisory Facility
PRECESSE Environmental and Social Capacity Building Project for the Energy Sector
PREETDN Project to Reinforce and Extend Electricity Transmission and Distribution
Networks
PRG Partial Risk Guarantee
iv
PRSP Poverty Reduction Strategy Paper
QBS Quality-Based Selection
QCBS Quality-and Cost-Based Selection
RAF Resettlement Action Framework
RAP Resettlement Action Plan
REA Regional Environmental Assessment
REF Rural Energy Fund
RFA Redevance Forestière Annuelle (Annual Forestry Fee)
ROW Right of Way
RTA Rio Tinto Alcan
SA Special Account
SBD Standard Bidding Documents
SDR Special Drawing Rights
SFB Selection under a Fixed Budget
SIL Specific Investment Loan
SNH National Hydrocarbons Company
SONARA Société Nationale de Raffinerie (National Refinery Company)
SPV Special Purpose Vehicle
SSA Sub-Saharan Africa
STI Sexually Transmissible Infections
TA Technical Assistance
ToRs Terms of Reference
TPDS Technical Panel on Dam Safety
TTL Task Team Leader
UFA Unité Forestière Administrative (Forestry Management Unit)
UNDB United Nations Development Business Online
UTO Unité Technique Opérationnelle (Operational Technical Unit)
WBG World Bank Group
WCS Wildlife Conservation Society

Vice President: Obiageli K. Ezekwesili
Country Director: Gregor Binkert
Sector Director: Jamal Saghir
Sector Manager: Lucio Monari
Task Team Leader: Meike van Ginneken
v
CAMEROON
Lom Pangar Hydropower Project

CONTENTS

Page
I.  STRATEGIC CONTEXT ....................................................................................................... 1 
A.  Country Context ..................................................................................................................... 3 
B.  Sectoral and Institutional Context .......................................................................................... 6 
C.  Higher Level Objectives to which the Project Contributes ................................................. 17 
II.  PROJECT DEVELOPMENT OBJECTIVES (PDO) ........................................................ 18 
A.  PDO...................................................................................................................................... 18 
B.  Project Beneficiaries ............................................................................................................ 18 
C.  PDO Level Results Indicators .............................................................................................. 19 
III.  PROJECT DESCRIPTION .............................................................................................. 19 
A.  Project Components ............................................................................................................. 19 
B.  Project Financing ................................................................................................................. 22 
C.  Lessons Learned and Reflected in the Project Design ......................................................... 24 
D.  Institutional and Implementation Arrangements ................................................................. 26 
E.  Results Monitoring and Evaluation ..................................................................................... 29 
F.  Sustainability........................................................................................................................ 29 
IV.  KEY RISKS AND MITIGATION MEASURES ............................................................ 30 
V.  APPRAISAL SUMMARY .................................................................................................... 34 
A.  Economic and Financial Analyses ....................................................................................... 34 
B.  Technical .............................................................................................................................. 36 
C.  Financial Management ......................................................................................................... 37 
D.  Procurement ......................................................................................................................... 38 
E.  Environment and Social ....................................................................................................... 39 
F.  Communication .................................................................................................................... 41 
Annex 1: Results Framework and Monitoring ........................................................................... 43 
Annex 2: Detailed Project Description ......................................................................................... 46 
vi
Annex 3: Implementation Arrangements .................................................................................... 57 
A.  Institutional Arrangements ................................................................................................... 57 
B.  Financial Management and Disbursement ........................................................................... 63 
C.  Procurement ......................................................................................................................... 70 
D.  Monitoring and Evaluation .................................................................................................. 79 
Annex 4: Operational Risk Assessment Framework (ORAF) ................................................... 81 
Annex 5: Economic and Financial Analyses ................................................................................ 85 
Annex 6: Environmental and Social Safeguards ...................................................................... 104 
Annex 7: Policy Letter ................................................................................................................. 137 
Annex 7A: English translation of Policy Letter ........................................................................ 153 
Annex 8: Project Budget and Financing Plan ........................................................................... 166 
Annex 9: Implementation Support Plan .................................................................................... 168 
Annex 10: Summary of Related Projects in Cameroon ........................................................... 171 
Annex 11: Team Composition..................................................................................................... 174 
Annex 12: Country at a Glance .................................................................................................. 175 
Annex 14: Map – IBRD #39102 .................................................................................................. 177 

LIST OF TABLES
Table 1: Project Baseline Cost by Component and Source of Financing ............................. 22
Table 2: Total Project Costs .................................................................................................... 23
Table 3: Risk Ratings Summary ............................................................................................. 31
Table 4: Summary of Main Characteristics of the Lom Pangar Hydropower Facility as
Specified in the Bidding Documents ........................................................................ 48
Table 5: Disbursement Categories .......................................................................................... 68
Table 6: Financial Management Action Plan .......................................................................... 70
Table 7: Procurement Action Plan .......................................................................................... 76
Table 8: List of Works, Goods, and Non-Consulting Services Contract Packages to be
Procured .................................................................................................................... 78
Table 9: List of Consulting Assignments with Selection Methods and Time Schedule ......... 78
Table 10: Willingness to Pay of Different Consumers ............................................................. 87
Table 11: Economic Performance of LPHP and Other Downstream Hydro-projects .............. 90
Table 12: Potential Use of Power per Scenario (as Percentage of Power Produced) ............... 90
Table 13: Economic Performance of LPHP and Other Downstream Hydro-projects .............. 92
Table 14: Assumptions Value-Added Aluminum Industry After Hydropower Development . 94
Table 15: Overview of Hydropower Schemes Downstream of LPHP ..................................... 95
vii
Table 16: Summary of Direct and Indirect Benefits of RTA/Alucam ...................................... 96
Table 17: Risk Analysis of Project Economics ......................................................................... 97
Table 18: Summary of Financial Statements for Lom Pangar Power Plant ........................... 100
Table 19: AES-SONEL’s Historical Financial Performance (US$ '000) ............................... 102
Table 20: EDC Key Financial Results and Ratios (US$ million, except for the ratios) ......... 103
Table 21: World Bank Safeguards Policies Triggered by the Project .................................... 106
Table 22: Safeguards Instruments Prepared for LPHP Project and Disclosure Dates ............ 108
Table 23: Comparison of Alternative Reservoir Locations .................................................... 110
Table 24: Major Socio-Economic Impacts Identified in ESA ................................................ 115
Table 25: Project Impacts that Require Mitigation: Construction Phase ................................ 119
Table 26: Project Impacts that Require Mitigation: Operation Phase .................................... 121
Table 27: Surveillance Needs of Deng Deng National Park and Adjacent Areas .................. 134
Table 28: Resources Needed for Implementation Support ..................................................... 169

LIST OF BOXES
Box 1: Alucam’s Contribution to the Cameroon Economy ........................................................ 9
Box 2: GOC Policy Letter......................................................................................................... 12
Box 3: The Draft Water Tariff, Decree and Arrêté for the Sanaga River ................................. 12
Box 4: Revenue Cap Regulation ............................................................................................... 14
Box 5: Changing Technology Mix, Changing Generation Cost ............................................... 14
Box 6: Donor Partnership for LPHP ......................................................................................... 58

LIST OF FIGURES
Figure 1: Potential Future Hydropower Sites along the Middle Sanaga ................................. 8
Figure 2: Estimated Average Monthly Sanaga River Water Flow Before and After LPHP . 18
Figure 3: Project Location ..................................................................................................... 46
Figure 4: Implementation Arrangements ............................................................................... 57
Figure 5: IDA and EIB Flow of Funds under Component 1.1............................................... 65
Figure 6: Counterpart Flow of Funds..................................................................................... 66
Figure 7: IDA and DDNP Flow of Funds .............................................................................. 67
Figure 8: Long-Run Marginal Cost Curve for Hydropower Developments (Base Case) ...... 86
Figure 9: Demand Scenarios .................................................................................................. 87
Figure 10: Impact of Power Allocation on Project Rates of Return and Cost of Power into
Public Supply for Nachtigal Amont and Som Mbengue ........................................ 91
Figure 11: Annual Net Cashflow and Cumulated Cashflow for the Lom Pangar Regulating
Dam (in million FCFA) .......................................................................................... 99
Figure 12: Interaction of the Lom Pangar Reservoir and the Chad-Cameroon Pipeline ....... 114
Figure 13: Cumulative Impacts .............................................................................................. 118
Figure 14: Implementation Arrangements for Wood Salvage Logging of the Reservoir ...... 128
Figure 15: Financial Flow for Sustainable Financing of DDNP............................................ 132
Figure 16: Control Post Locations Adjacent to Deng Deng National Park ........................... 133

viii
PAD DATA SHEET
Cameroon
Lom Pangar Hydropower Project

PROJECT APPRAISAL DOCUMENT

Africa Region
Sustainable Development Department
Africa Energy Unit (AFTEG)

Basic Information
Date: March 1, 2012 Sectors: Power (100%)
Country Director: Gregor Binkert Themes: Infrastructure services for private
sector development (67%); Rural
Sector Manager/Director: Lucio Monari / Jamal
services and infrastructure (33%)
Saghir
Project ID: P114077 EA Category: A - Full Assessment
Lending Instrument: Specific Investment
Loan
Team Leader(s): Meike van Ginneken
.
Borrower: Republic of Cameroon
Responsible Agency: Electricity Development Corporation (EDC)
Contact: Dr. Théodore NSANGOU, Director General
Telephone No.: +(237) 22 23 19 30 / 22 23 10 89
Fax No.: +(237) 22 23 11 13
Email: [email protected]
.
Project Implementation Period Start Date: March 27, 2012 End Date: June 30, 2018
Expected Effectiveness Date: June 2012
Expected Closing Date: December 31, 2018
.
Project Financing Data(US$M)
[ ] Loan [ ] Grant [[ ] Other

[ X] Credit [ ] Guarantee
Credit term: Standard IDA terms with 40 years maturity

ix
For Loans/Credits/Others
Total Project Cost : 494.00 Total Bank Financing : 132.00
Total Cofinancing : 362.00 Financing Gap : 0
.
Financing Source Amount(US$M)
BORROWER/RECIPIENT 98.00
BORROWER/RECIPIENT Pre-financing (associated infrastructure) 101.00
IDA: New 115.75
IDA: Recommitted 16.25
Others
- African Development Bank 29.00
- European Investment Bank 40.00
- French Agency for Development 79.00
- Central African States Development Bank 15.00
Financing Gap 0
Total 494.00
.
Expected Disbursements (in USD Million)
Fiscal Year 2012 2013 2014 2015 2016 2017 2018 2019
Annual 1 6 25 25 25 25 20 5
Cumulative 1 7 32 57 82 107 127 132
.
Project Development Objective(s)
The project development objective of the proposed Lom Pangar Hydropower Project is to increase
hydropower generation capacity and reduce seasonal variability of water flow in the Sanaga River and to
increase access to electricity.
.
Components
Component Name Cost (USD Millions)
Component 1: Lom Pangar Regulating Dam US$216 million
Component 2: Lom Pangar Power Plant and Transmission Line US$62 million
Component 3: Environmental and Social Measures US$73 million
Component 4: Technical Assistance and Project Management US$42million
.
x