Document of

The World Bank

Report No: 58511

Restructuring PAPER

ON A

PROPOSED Project restructuring

of

ENERGY ACCESS PROJECT GLOBAL ENVIRONMENT FACILITY

PROJECT GRANT NO TF056092

JULY 28, 2005

TO THE

FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA

DECEMBER 09, 2010

Regional Vice President: / Obiageli Katryn Ezekwesili
Country Director: / Kenichi Ohashi
Sector Manager / Director: / Subramaniam V. Iyer
Task Team Leader: / Raihan Elahi

Ethiopia — ENERGY ACCESS PROJECT

P077380

TF056092-ET

Restructuring Paper

1.  Proceeds for Ethiopia, ENERGY ACCESS PROJECT, GEF Grant No: TF056092-ET, P077380 will be reallocated as follow:

Category of Expenditure / Allocation in US$ / % of Financing
Current & Revised / Current / Revised / Current & Revised
1.a) Consultants’ Services / 2,100,000 / 330,000 / 100% of foreign expenditures and 85% of local expenditures
1.b) Supply & Installation / 300,000 / 700,000 / 100% of foreign expenditures and 90% of local expenditures
1.c) Goods / 1,330,000 / 3,500,000 / 100% of foreign expenditures and 100% of local expenditures (ex-factory cost) and 90% of local expenditures for other items procured locally
2. Training / 850,000 / 400,000 / 100%
3. Unallocated / 350,000
Total / 4,930,000 / 4,930,000

2.  This GEF financed project is associated with the IDA financed Energy Access Project (P049395) Cr.3712-ET, which was approved by the Board for a credit amount of SDR 104.9 million (US$ 132.7 million). The purpose of the GEF grant was to support implementation of the Energy Access project through supporting promotion and creating awareness on renewable energy options in Ethiopia.

3.  The project experienced a late start, given the lack of preparedness of the implementing agency – the Rural Electrification Fund (REF) Secretariat. It also encountered high turnover of staff. Over the last year, it has started to implement the project expeditiously and by now it has electrified about 200 Health Posts and 100 Schools using Photo Voltaic Solar Panels. The implementing agency has also awarded contract to electrify additional 345 Health Posts using Photo Voltaic Solar Panels. Evaluation of bids to award contracts to electrify additional 200 schools and supply of 13 Solar Panel Based Systems to the Regional Energy Bureaus for Demonstration and Training are under process. Selection of consulting firms to carry out (i) Environment and Social Impact Assessment and (ii) Technical Design and preparation of procurement documents for five micro hydro power plants are at final stage. No additional procurement will be carried out under this project and it is expected that by the closing date of this project, which is June 30, 2011, all planned activities under this project can be completed.

4.  The requested reallocation of this GEF grant is more than 5%. But, since the outcome indicator of the project is mainly dependent on the effective implementation of the IDA funded Energy Access Project, this reallocation will not change the project outcome indicators. It will strengthen the probability of achieving the project outcome indicators through applying effective promotion and awareness campaign of renewable energy in Ethiopia.

5.  The proposed reallocation is necessary for the following reasons:

·  Government of Ethiopia realized that electrifying remote schools and health posts, which are isolated from the national grid, is an effective means of promoting solar PV technology in rural Ethiopia. Through electrifying these remote schools and health posts, the rural population is not only benefitted from receiving a cleaner and improved lighting source, they also become aware of the availability of this lighting alternative. Government realized that after electrifying a school or a health post, it gets easier to inform the people about the benefits of this technology and penetrate the market effectively.

·  Government therefore planned to electrify rural health posts and schools, isolated from grid network, with PV lighting facility from the funds available under this project. As a result there is a need to increase the disbursement category 1(b) Supply and Installation and 1(c) Goods Disbursement Categories.

·  During the remaining project life, the implementing agency plans to use the fund provided in disbursement category 1(a) Consulting Services to prepare (i) Environment and Social Impact Assessments, and (ii) Technical Design and procurement bid documents for five identified micro hydroelectric projects. Based on the estimated budget of these assignments, funding of this category is revised.

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