|1. Project Data:
ICR Review Date Posted:
|Tp: Energy Services Delivery Project
Project Costs(US $M)
Loan/Credit (US $M)
|Energy and Mining
Cofinancing (US $M)
Board Approval Date
|Power (65%), Central government administration (35%)|
|Rural services and infrastructure (33% - P)
Infrastructure services for private sector development (33% - P)
Climate change (17% - S)
Other public sector governance (17% - S)|
||ICR Review Coordinator:
||Gillian M. Perkins
||Christopher David Nelson
|2. Project Objectives and Components:|
According to the Financing Agreement (p. 4), the objectives of the project were to assist the Recipient to stabilize the power services in Dili, by restoring or improving operational efficiency, reliability, safety and availability of the power supply, and to promote long-term sustainability of the power sector.
The objectives as stated in the Project Paper (p. 4) were to stabilize the power services in Dili, by restoring or improving operational efficiency, reliability, safety and availability of the power supply, and to promote long-term sustainability of the power sector. These would, in turn, contribute to the social stability and economic development of the country.
The objectives in the financing agreement will be used as the benchmark for the evaluation. These objectives were not changed. However, the key performance indicators and targets were formally revised as part of the Level 2 restructuring approved on February 10, 2012.
b. Were the project objectives/key associated outcome targets revised during implementation?
If yes, did the Board approve the revised objectives/key associated outcome targets?
Component 1: Emergency Repair and Maintenance of Comoro Power Station (appraisal cost US$0.3 million, actual cost US$0.1 million). This component included investments for: (a) replacement of a radiator, (b) electrical upgrade of the substation switchboard, and (c) improvement of the firefighting system.
Component 2: Rehabilitation and Upgrading of Dili Power Distribution System (appraisal cost US$0.6 million, actual cost not available). This component included investments for: (a) installation of additional distribution transformers; (b) construction of new low voltage lines; (c) upgrading conductors; (d) reinstallation of prepaid meters based on appropriate theft proofing standards; (e) installation of medium voltage feeder reclosures and meters; and (f) installation of power connections to new customers.
Component 3: Distribution of Energy Efficient Light Bulbs (appraisal cost US$0.05 million, actual cost U$0.0 million). This component would purchase and distribute about 38,500 Compact Fluorescent Lights to metered customers.
Component 4: Institutional Capacity Building (appraisal cost US$0.8 million, actual cost not available). In addition to supporting project implementation, this component would finance technical assistance and training to strengthen the longer term capacity of:
(a) the Ministry of Natural Resources, Minerals and Energy Policy to: (i) improve the quality of its policy-making, sector planning, monitoring and conducting of performance audits of the management contractor of Electricidade de Timor-Leste, subsidy and pricing policies; and (ii) carry out project construction supervision, procurement, financial management and other project implementation support activities.
(b) Electricidade de Timor-Leste to address the design and planning of the rehabilitation of the Comoro Power Station and the power distribution system, including the provision of office and field work equipment.
The project underwent a Level 2 restructuring on February 10, 2012 to focus on the distribution and rehabilitation component that was performing well and drop underperforming activities. The project components were revised as follows:
Component 1: The switchboard and firefighting equipment investments for the Comoro Power Station were dropped.
Component 2: Investments in the distribution system were scaled up to increase upgrades to power lines, transformers, metering, and new connections.
Component 3: Distribution of energy efficient light bulbs was dropped.
Component 4: The strategic and longer-term capacity building activities were dropped and the component continued with only small residual implementation support activities.
d. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project Cost and Financing: The actual project cost was US$3.2 million compared to the appraisal estimate of US$2.8 million. The actual Grant amount was US$2.4 million compared to the appraisal amount of US$2.5 million. The actual costs by component are not available. However, the restructured project allocated 93 percent of the IDA grant to Component 2 for the distribution system (Restructuring Paper p.5).
Borrower Contribution: At appraisal, the borrower committed US$0.3 million. The actual contribution was US$0.75 million.
Dates: On December 21, 2011, shortly before approval of the restructuring, the project closing date was extended by six months, to June 30, 2012, to allow enough time for the restructured activities to be completed. The Government had formally requested the restructuring in late October of 2011. However, the Bank's processing and approval of the restructuring was conditioned on a successful design of the restructuring and achievement of pre-agreed milestones in the procurement process. Thus, the restructuring was not approved until February 10, 2012, after the milestones had been achieved. This was a Level 2 restructuring with no change in the objectives, and approval was by the Country Director.
|3. Relevance of Objectives & Design:|
a. Relevance of Objectives:Rated substantial.
The project objectives were highly relevant at appraisal. The Bank's Country Assistance Strategy (CAS) for FY2006-08 included an energy project under the pillar on delivery of sustainable key services for growth and development in recognition of the important role of access to energy services. At appraisal, the project objectives were based on the Government's Sector Policy Paper (2002), the Power Sector Development Plan (2003), and the Sector Investment Plan (SIP) for the power sector (2003). In addition to the sectoral analysis, the multi-donor Trust Fund for East Timor had financed the Power Sector Priority Investments Project, which included a new generator at Comoro. The project sought to continue key priorities of the SIP and to build on the progress made under the Bank's first project as well as projects financed by other development partners.
The strategic relevance of objectives diminished, however during implementation: Government priorities for the sector shifted away from short term stabilization and longer term sustainability towards large scale investment in new capacity financed through its rapidly growing Petroleum Fund (see section 9a below). The Bank’s current Country Assistance Strategy for Timor Leste (2013-2017) does not include investment in the energy sector - although, as remarked in the ICR support could potentially be provided through a program for strengthening country systems particularly in financial management and national capacity building (CAS p. 12). The Borrower’s completion report indicates renewed interest in the issues for sector management and sustainability and points to capacity building as the current priority for Bank support in the sector (ICR p.55).
b. Relevance of Design:Rated substantial.
The results framework linked inputs to expected outputs and outcomes in a logical causal chain. The power generation, distribution, and institutional capacity activities were designed to help quickly stabilize power services in Dili by making the system more reliable while also improving efficiency, safety, and availability of the system in the medium term, and sustainability of the power sector in the longer term.
A key shortcoming of the project design was that it did not consider the impact of shutting down the plant on power supply to Dili while the repairs (rehabilitation of the switchgear) were implemented. This turned out to be crucial as Dili had no alternative source of supply until towards the end of the project when Hera was commissioned, but by which time Comoro was no longer needed.
|4. Achievement of Objectives (Efficacy) :|
The objectives were to “assist the Recipient to stabilize the power services in Dili, by restoring or improving operational efficiency, reliability, safety and availability of the power supply, and to promote long-term sustainability of the power sector." Each part of this objectives statement is assessed separately below.
Pre-restructuring (from approval 06/28/2007 to restructuring 02/10/2012).
- Rehabilitation of the radiator of MAK II generating unit of Comoro Power Plant.
- The proposed purchases of switchgear and firefighting equipment for the Comoro plant were dropped at project restructuring.
- The project assisted in the installation of prepaid meters in Dili. The number of consumers in Dili who purchased prepaid meters increased from about 2,000 in January 2008 to 17,097 in 2011. At appraisal, about 75 to 80 percent of 24,500 pre-paid meters were estimated to have been by-passed or tampered with. During 2009 and 2011, 27,672 prepaid meters were re-installed.
- The total length of concentric cable installed between 2008 and 2011 was 117,279 meters.
- About 4.2 km of additional low voltage lines were constructed, and about 6.8 kilometer of existing low voltage lines were upgraded to reduce the technical losses.
- The project installed 18 transformers.
Post-restructuring (from restructuring 02/10/2012 to project closing 06/30/2012).
- Twelve 250 kVA, transformers were delivered by February 2012. These transformers were installed by December 2012 and were fully utilized by EDTL (ICR p. 30).
- Twelve 315 kV transformers were delivered by February 2012, of which six were expected to be installed by the end of 2013 to replace the other small transformers that were identified to be overloading or near overloading.
- Thirteen load break switch (24 kV) were delivered by February 2012.
- 84,000 meters of concentric cable was delivered in January 2012, however, the installation of the cable was done after project closure.
- Steel poles were delivered in June 2012.
Operational efficiency: rated substantial.
The project investments resulted in substantial reduction in system losses (both technical and non-technical) which declined from 59.0 percent in 2007 to 46.5 percent by 2009, and 36.7 percent in 2011, close to the revised target (35%) but well short of the original target (25%). The improvements in the distribution system and installation of 18 additional transformers contributed to the reduction in technical losses. System losses in 2012 were reported at 60% but this included not only Dili but areas outside Dili serviced by the much larger Hera Power Plant (ICR p 32).
EDTL was able to reduce the non-technical loss as result of illegal connection through the installation of prepaid meters. At appraisal, about 75 to 80 percent of 24,500 pre-paid meters were estimated to have been by-passed or tampered with. The number of consumers in Dili who purchased prepaid meters increased from about 2,000 in January 2008 to 17,097 in 2011. During 2009 and 2011, 27,672 prepaid meters were re-installed. The ICR reports (p. 33) that there have been some instances of meter tampering or meters being by-passed by low voltage customers.
Reliability: rated modest.
Power distribution reliability: The project rehabilitated the radiator, installed distribution transformers, and purchased load break switches, lightning arresters and fuse cutouts - although some of these materials were delivered in January and February 2012 and installed mainly in the second half of the year, after the project had closed. As of end of December 2012, the Project contributed 18 distribution transformers that avoided the imminent overloading of transformers. Had these transformers not been installed in time, the transformers could have been damaged resulting in more and longer customer interruptions.
The ICR carried out the analysis of actual outage and interruptions for December 2007 and December 2012 (the only years for which data were available - the virus in the EDTL's computer destroyed all data stored in the computer. The calculations were based on raw data available in hard copies). The analysis shows:
- The average number of interruptions of customers per year dropped from 62 customer interruptions/customer year in 2007 to only 25 in 2012.
- The average time service was available to the customer increased from a baseline of 98.9 percent to 99.4, almost achieving the target of 99.5 percent.
- The average duration of interruptions per customer per year also dropped from 105 hours/customer to 50 hours/customer.
Since some of the project financed equipment was not installed until after project closure, this implies that the project might be credited with additional benefits that are not captured in the data reported in the ICR.
The Customer Average Interruption Duration Index which measures the average time that power is restored for every interruption increased from 1.68 hours in 2007 hours to 2.04 hours in 2012. The ICR attributes this to the leaving of the management contractor and that Electricidade de Timor-Leste had only one Distribution Engineer supervising 12 linemen.
There were modest improvements in the power distribution reliability.
Power generation reliability: The project was expected to improve reliability of generation by preventing disruptions caused by breakdowns and fire damage, and by repairing broken or inefficiently operating generators and system components. However, only one part of the emergency repairs were actually carried out (radiator replacement), and it was not completed until more than 18 months after approval. The other two activities (switchyard and fire equipment replacement) were not carried out and were later dropped at restructuring. The generation reliability indicator was dropped so there is no evidence on improved generation reliability.
Safety: rated negligible.
The firefighting equipment, that was expected to improve safety at the power station was dropped at project restructuring. The ICR points to likely safety benefits through improvements in the distribution system (p.9), in particular through the re-installation of pre-paid meters to prevent illegal tapping. However, the relevant indicator was not monitored and evidence is not available.
Availability of power services in Dili: rated modest.
The project carried out emergency repairs (MAK II radiator replacement) at Comoro Power Plant. The repairs were completed more than 18 months after project approval. The generating unit was operational and supplied power to Dili until the Comoro Station was shut down in May 2012 (see section 9a below) which coincided with project closing. It is likely that the emergency repairs of the radiator improved availability of power supply in the short run; however, since the generation reliability indicator was dropped evidence is not available. During project restructuring, improvements in the power distribution system were scaled up. However, as discussed above, most of the equipment was installed at or after project closing.
Stabilization of power services in Dili: rated modest. With the improvements in the distribution system, there were substantial improvements in operational efficiency and reliability of power supply in Dili. However, availability of power was improved modestly in the short run. The safety improvements were negligible. The ICR notes (p. 27) that to stabilize power services, a Spinning Reserve mode of operation would require Comoro II to immediately pick-up the load in case the Hera Station shuts down. This would avoid the loss of load due to outages in power generation system. However, it will require a strong transmission interconnection between the two stations and establishing a load dispatching control center which at the time of writing of the ICR was not completed.
Long-term sustainability of the power sector: rated negligible.
The Project Paper at appraisal linked the long-term sustainability goal directly to improving the sector's commercial orientation and strengthening the institutional capacity of Electricidade de Timor-Leste and Ministry of Natural Resources, Minerals and Energy Policy which later became the Ministry of Infrastructure.
There was very little progress in the capacity building component as the most relevant activities were cancelled at restructuring. There were some capacity gains in terms of improvements in metering, increased revenue collection and cost recovery, and reduced system losses. However, sustaining these improvements and phasing out the current level of subsidization as envisaged at project appraisal was not achieved.
At appraisal, the Economic Rate of Return (ERR) was estimated at 28%. The main economic benefits of the project were: (a) improved reliability and availability of electricity services; (b) increased new legal consumers with electricity connections; and (c) the reduction of non-technical loss of the electricity distribution system.
The ex-post ERR of 16% is based on different methodology and assumptions, including the impacts of interruption and outages (VOLL) and Foreign Exchange Premium (FEP) in the analysis and revised assumptions on willingness to pay. The ICR notes some data limitations: in the absence of data on actual market transactions or primary surveys in the area, the assessment of the benefit of distribution system loss reduction was based on estimates (ICR p.17).
The project experienced procurement problems which resulted in implementation delays and cancellation of some activities. By mid-2010, procurement problems had affected virtually all components. Differences between the Government and the Bank on procurement methods affected the Compact Fluorescent Light and distribution components. The Compact Fluorescent Light component was dropped. The project experienced a six months delay beyond the additional year that was already included at appraisal to allow for the difficult country conditions.
Efficiency is rated modest.
a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:
* Refers to percent of total project cost for which ERR/FRR was calculated