Document of the World Bank Report No: ICR00003059 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-48210, IBRD-79600) ON A LOAN IN THE AMOUNT OF US$80 MILLION TO THE REPUBLIC OF BELARUS FOR A POST-CHERNOBYL RECOVERY PROJECT March 31, 2014 Sustainable Development Department Ukraine, Belarus and Moldova Country Unit Europe and Central Asia Region CURRENCY EQUIVALENTS (Exchange Rate Effective March 27, 2014) Currency Unit = Belarusian Ruble (BYR) BYR9850.00 = US$1 US$ 0.0001 = BYR 1 FISCAL YEAR January 1 – December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy ERR Economic Rate of Return EED Energy Efficiency Department EMP Environmental Management Plan FMS Financial Management Specialist FSU Former Soviet Union GDP Gross Domestic Product IAEA International Atomic Energy Agency ICB International Competitive Bidding MoE Ministry of Energy M&E Monitory and Evaluation NGO Non-Governmental Organization PCRP Post Chernobyl Recovery Project PMU Project Management Unit SIRP Social Infrastructure Retrofitting Project TCM Thousand Cubic Meters UNDP United Nations Development Program Vice President: Laura Tuck Country Director: Qimiao Fan Sector Manager: Ranjit Lamech Project Team Leader: Elena Klochan ICR Team Leader: Pekka Salminen REPUBLIC OF BELARUS Post-Chernobyl Recovery Project CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ............................................... 1 2. Key Factors Affecting Implementation and Outcomes .............................................. 4 3. Assessment of Outcomes .......................................................................................... 11 4. Assessment of Risk to Development Outcome......................................................... 16 5. Assessment of Bank and Borrower Performance ..................................................... 17 6. Lessons Learned ....................................................................................................... 19 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 19 Annex 1. Project Costs and Financing .......................................................................... 20 Annex 2. Outputs by Component ................................................................................. 21 Annex 3. Economic and Financial Analysis ................................................................. 22 Annex 4. Bank Lending and Implementation Support/Supervision Processes ............ 24 Annex 5. Beneficiary Survey Results ........................................................................... 26 Annex 6. Stakeholder Workshop Report and Results................................................... 32 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 33 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 47 Annex 9. List of Supporting Documents ...................................................................... 48 MAP A. Basic Information Post-Chernobyl Country: Belarus Project Name: Recovery Project IBRD-48210,IBRD- Project ID: P095115 L/C/TF Number(s): 79600 ICR Date: 03/31/2014 ICR Type: Core ICR REPUBLIC OF Lending Instrument: SIL Borrower: BELARUS Original Total USD 50.00M Disbursed Amount: USD 80.00M Commitment: Revised Amount: USD 80.00M Environmental Category: B Implementing Agencies: RUE "BelInvestEnergoSberezhenie" Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 05/06/2005 Effectiveness: 08/11/2006 08/11/2006 Appraisal: 10/03/2005 Restructuring(s): Approval: 04/18/2006 Mid-term Review: 03/14/2009 03/14/2009 Closing: 12/31/2010 12/31/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance: i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No None at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Highly Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Energy efficiency in Heat and Power 85 85 Oil and gas 15 15 Theme Code (as % of total Bank financing) City-wide Infrastructure and Service Delivery 14 14 Climate change 14 14 Natural disaster management 29 29 Pollution management and environmental health 29 29 Rural services and infrastructure 14 14 E. Bank Staff Positions At ICR At Approval Vice President: Laura Tuck Shigeo Katsu Country Director: Qimiao Fan Paul G. Bermingham Sector Manager: Ranjit J. Lamech Peter D. Thomson Project Team Leader: Elena Klochan Maha J. Armaly ICR Team Leader: Pekka Kalevi Salminen ICR Primary Author: Maha J. Armaly F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project aims to provide the population residing in the Chernobyl affected area with energy efficient and reliable heat and hot water services in order to improve their living environment. ii Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Estimated number of beneficiaries reached with improved energy efficient Indicator 1 : services 0.5-1.0 million (estimated Value 250,000 population of quantitative or 0 (direct 250,769 communities Qualitative) beneficiaries) included in the Project) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments Following the approval of the Additional Financing Loan on September 28, (incl. % 2010, results indicators were revised for better measurement and monitoring. achievement) Indicator 2 : Estimated amount of heat energy saved annually [MWh/year] Value 102,000 Gcal; quantitative or 0 158,000 248,736 US$3,672,000 Qualitative) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments The previous indicator - Estimated volume and value of fuel saved - was (incl. % disaggregated into two indicators: Estimated amount of heat energy saved achievement) annually and Estimated amount of electricity saved annually. Indicator 3 : Estimated amount of electricity saved annually [MWh/year] Value 102,000 Gcal; quantitative or 0 12,800 99,478 US$3,672,000 Qualitative) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments The previous indicator - Estimated volume and value of fuel saved - was (incl. % disaggregated into two indicators: Estimated amount of heat energy saved achievement) annually and Estimated amount of electricity saved annually. Indicator 4 : Estimated reduction in pollutants [tCO2] Value quantitative or 0 5,000 t CO2 41,350 121,147 Qualitative) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments (incl. % Project end-target achieved and exceeded achievement) iii (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Indicator 1 : Number of boiler houses renovated Value 40 (included heat (quantitative 0 33 32 substations) or Qualitative) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments One boiler house (Maiski, Mogilev Oblast) was dropped because renovation was (incl. % not economically justified. achievement) Indicator 2 : Number of buildings rehabilitated Value (quantitative 0 300 365 443 or Qualitative) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments Results indicator was revised for Additional Financing Loan in September 28, (incl. % 2010 (number of institutions was replaced with the number of buildings. achievement) Indicator 3 : Number of buildings with window replacements. Value (quantitative 0 0 247 298 or Qualitative) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments (incl. % Results indicator was added for Additional Financing on September 28, 2010. achievement) Indicator 4 : Number of buildings with lighting system replacements. Value (quantitative 0 0 118 145 or Qualitative) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments (incl. % Results indicator was added for Additional Financing on September 28, 2010. achievement) Indicator 5 : Number of houses connected to gas Value (quantitative 0 2,000 4,000 5,005 or Qualitative) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments (incl. % Project end-target achieved and exceeded achievement) iv Indicator 6 : Length of street gas pipelines installed [km] Value (quantitative 0 0 200 219 or Qualitative) Date achieved 07/01/2006 12/30/2010 12/31/2013 11/01/2013 Comments (incl. % Results indicator was added for Additional Financing on September 28, 2010. achievement) Indicator 7 : Direct project beneficiaries Value (quantitative 0 250,000 250,769 or Qualitative) Date achieved 07/01/2006 12/31/2013 11/01/2013 Comments Direct project beneficiaries include users of public buildings in health, education (incl. % and social sectors (250,769) and households connected to natural gas for heating achievement) purposes (5,005) in Project area. Indicator 8 : Female beneficiaries Value (quantitative 0 50 percent or Qualitative) Date achieved 07/01/2006 11/01/2013 Comments (incl. % The estimated number of female beneficiaries is 50 percent. achievement) G. Ratings of Project Performance in ISRs Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 10/30/2006 Satisfactory Satisfactory 0.13 2 06/14/2007 Satisfactory Satisfactory 2.13 3 02/17/2008 Satisfactory Satisfactory 6.27 4 11/13/2008 Satisfactory Satisfactory 10.72 5 06/04/2009 Satisfactory Satisfactory 19.96 6 10/22/2009 Satisfactory Satisfactory 23.01 7 06/26/2010 Satisfactory Satisfactory 36.75 8 11/24/2010 Satisfactory Satisfactory 42.09 9 04/30/2011 Satisfactory Satisfactory 49.27 10 11/04/2011 Satisfactory Satisfactory 50.74 11 06/26/2012 Satisfactory Satisfactory 56.05 12 11/30/2012 Satisfactory Satisfactory 67.71 13 06/13/2013 Satisfactory Satisfactory 75.69 14 12/06/2013 Highly Satisfactory Satisfactory 79.26 v H. Restructuring (if any) Not Applicable I. Disbursement Profile vi 1. Project Context, Development Objectives and Design (this section is descriptive, taken from other documents, e.g., PAD/ISR, not evaluative) The objective of the Post Chernobyl Recovery Project (PCRP) is to provide the population residing in the Chernobyl affected area with energy efficient and reliable heat and hot water services in order to improve their living environment. 1.1 Context at Appraisal (brief summary of country and sector background, rationale for Bank assistance) Country Background At independence in 1991, the standard of living in Belarus was amongst the highest in the Former Soviet Union (FSU). After an estimated decline of about 40% of GDP during 1992-95, the economy experienced an average growth of 6.6% annually between 1996 and 2004. The Belarussian Government maintained a heavy control of the economy and continued reliance on established linkages with ex-soviet states, particularly with Russia. Growth was broad based and driven by favorable external environment, growing demand in traditional markets, and internal consumption that was supported by administratively imposed increases in wages. The Chernobyl Accident The appraisal and approval of the Project occurred 20 years after the Chernobyl Nuclear Reactor Accident of April 26, 1986. While the accident happened in the nuclear reactor in Ukraine, it affected approximately 2.5 million (about 25%) of the Belarussian population and about 20% of the area of Belarus. The Government of Belarus maintained substantial support, through subsidies, compensation and treatment programs, to the population of Belarus affected by the accident. This segment of the population endured the double burden of declining economic opportunities combined with the impacts of the accident on health, the environment and overall fears and concerns of the population inside and outside the affected areas. By the time of Project identification and preparation, the levels and impacts of radioactive contamination in the environment were being reduced, thanks to natural and physical remedial processes supported by Government and international interventions. Nevertheless, the negative economic and social consequences of the accident continued to impact the population and were delaying the transition to healthier economic environments. Energy Sector Background The energy sector played an important role in Belarus’ economy at the time of Project preparation, both as a consumer/importer and as a processor of energy products for exports. After years of lack of appropriate maintenance and new investments due to economic hardships, the sector was due for rehabilitation and renewal: (a) service infrastructure improvements were limited to basic operations and maintenance at the time of economic austerity; (b) infrastructure was geared to large and inefficient operations that needed to be retrofitted to respond to the rising energy market prices; and (c) the economy was dependent on imported energy including for processing and resale. Overall, service to the population was degraded. Often, minimum heat was provided and hot water services were drastically reduced. Investments in old infrastructure facilities were curtailed further reducing the quality and level of services. At the same time, tariffs were increasing consistently, but rarely reached cost recovery levels. The Government’s program focused on energy efficiency measures to reduce wasteful energy consumption, improve services, and limit the increasing burden of energy expenditures on the population. The Government’s efforts in this area focused on retrofitting publicly owned buildings (e.g. schools and hospitals) and rehabilitating trunk infrastructure. 1 Rationale for Bank Assistance International assistance provided to Belarus following the Chernobyl accident focused on the immediate and mid-term consequences of radiation, such as for remediation of contaminated land, health care, radiation exposure monitoring, and other radiation related environmental concerns. These measures were successful in mitigating the immediate physical impacts of the accident. After 20 years and at the time of project preparation, the Government and the international community had realized the need to address the economic and social aspects of the accident. The objective was to provide economic opportunities and to improve living environments, particularly in the rural areas. The affected population continued to be concerned with the impact of radiation on their health and wellbeing. Investors and consumers from outside the affected area were reluctant to undertake economic activities in the region. The Bank was in a unique position to have had the requisite experience in the sector and the region, and to have maintained trusted advisory and investment relationships with the Government of Belarus, especially in the energy sector. The Project fit well into the following higher level objectives outlined in the Country Assistance Strategy (CAS) at the time (FY2002-2004) and the then ongoing CAS discussions (FY08-FY11): (a) to improve the living standards of the Belarusian population by addressing social and environmental risks that affect the weakest members of the population; and (b) to support the country in areas involving Global Public Goods (environment). 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The project aims to provide the population residing in the Chernobyl affected area with energy efficient and reliable heat and hot water services in order to improve their living environment. Key Indicators:  Number of schools, hospitals, other institutions renovated and estimated number of beneficiaries  Number of boilers, substations and kilometers of pipes renovated/replaced  Estimated amount of energy saved  Estimated reductions in pollutants  Number of towns connected to gas  Number of households connected to gas, number of households connected to gas for heating  Annual heating costs using gas vs. costs prior to connections  Collection rates for newly connected gas consumers. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification In October 2010, the Bank responded to the Government’s request to provide additional financing of US$30 million. The PDO was not revised. Key indicators were revised to focus on: (a) number of beneficiaries; (b) estimated amount of heat and electricity saved annually; and (c) reduction of CO2 emissions. Target numbers were increased to account for the increased financing. 2 1.4 Main Beneficiaries (original and revised, briefly describe the "primary target group" identified in the PAD and as captured in the PDO, as well as any other individuals and organizations expected to benefit from the project) The project targets users of schools, hospitals, orphanages and other social public buildings in the Chernobyl affected area of Belarus – the Oblasts of Gomel, Mogilev, and Brest. The extension of the gas pipeline and provision of gas connections benefit households that used inefficient and unhealthy methods (wood stoves) that rely on wood for heating purposes. 1.5 Original Components (as approved) Component I: Energy Efficiency Improvements (appraisal cost estimate $48 million, revised cost estimate US$72.4 million, actual cost US$79.3 million). This component includes investments to upgrade or replace energy infrastructure in order to improve efficiencies, provide better services to the population, ensure savings on fuel and other capital and operational costs, and reduce emissions. Investments were to take place in about 25-30 sites in each of Gomel and Mogilev and Brest Oblasts consisting mainly of social public institutions in the education, health and social protection areas to ensure that the residents and users of these institutions receive adequate heat and hot water supply. This component includes the following sub-components: a) Energy efficiency improvements in heat generation including modernization of communal boiler houses by replacing old and inefficient equipment and installing modern boilers or cogeneration equipment. b) Energy efficiency improvements in the heat distribution system including replacement of old pipelines with high heat and hot water losses, with insulated pipelines and modernization of building level heat substations with modem heat exchangers, regulation equipment and heat meters. c) Energy efficiency improvements in public buildings including replacement of windows, replacement of leaking roofs and improvement of thermal insulation, and replacement of inadequate lighting in schools, hospitals and other social institutions with modern energy efficient lighting systems. Component II: Residential Gas Connections (appraisal cost estimate US$8.5 million, revised cost estimate US$12.05 million, actual cost US$10.9 million). This component connects individual houses that currently utilize wood in home heat stoves, to the gas pipeline in order to provide better heating services to the population living in the contaminated areas. Households are provided with necessary heating equipment (small gas boilers, gas cookers, gas meters and regulators at an estimated cost of $800 per household). Under the Government’s program to supply gas in the Chernobyl affected area, a survey is undertaken before starting the work to determine the needs of the town and the households. Component III: Project Implementation and Management Support (appraisal cost estimate US$5.0 million, revised cost estimate US$6.6 million, actual cost US$1.7 million). This component is designed to ensure effective implementation of the project. Costs include the government contribution for the design and supervision of the gas component and Project Management Unit (PMU) costs, including staffing. The Bank financing will cover: (a) design and supervision of the project investments and (b) implementation support to the PMU including public information and support for fiduciary responsibilities and audit costs. 3 1.6 Revised Components The components were not revised. The scope and coverage of the investments were increased. 1.7 Other significant changes (in design, scope and scale, implementation arrangements and schedule, and funding allocations) The project was restructured in June 2010 to reallocate funds among the categories in the Loan Agreement in accordance with ongoing expenditures. Funds were allocated from the consultancy category to the civil works category as it was agreed that contractors were responsible for the full design of works. The closing date of the original loan was extended by 6 months from December 2010 to June 2011. In October 2010, following a request by the Government, Bank management approved additional financing of $30 million and increased the disbursement percentage to 100%. The closing date for the additional financing was set for December 31, 2013. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry (including whether lessons of earlier operations were taken into account, risks and their mitigations identified, and adequacy of participatory processes, as applicable) Project Preparation The Bank participated with other international agencies in efforts to understand and develop approaches to mitigate the negative impacts in the Post-Chernobyl Accident areas. The Bank was represented in the International Chernobyl Forum, an initiative of the International Atomic Energy Agency (IAEA), which included other international and national participants. The Belarus Chernobyl Review prepared by the Bank (July 2002) provided recommendations to deal with the economic and social consequences of the Chernobyl accident and was used as input into the project concept to shift more attention from radiation mitigation and testing to economic and social mitigation efforts. The Project technical preparation relied on a Bank empirical study entitled “Investments to Improve the Energy Efficiency of Existing Residential Buildings in Countries of the Former Soviet Union” (1997). The study documents energy wastage in post-Soviet economies. It identifies technical opportunities to improve energy efficiency in buildings and verifies the associated economic and financial benefits for different types of intervention such as window replacement, roof repair and insulation measures. The Bank was involved in the energy sector in Belarus and undertook studies in 2006 (Belarus – Addressing Challenges Facing the Energy Sector), which recognized the need to increase energy efficiency in Belarus’ energy intensive economy. The Social Infrastructure Retrofitting Project (SIRP) was ongoing successfully during the preparation of the PCRP and was being implemented country-wide (FY01-FY10 including additional financing). The PCRP utilized the same institutional and implementing arrangements as for the SIRP, but investments of the PCRP focused on the Chernobyl affected areas only. Due to the radiation concerns in the area, the Bank team worked closely with the IAEA and the Chernobyl Impact Mitigation Committee of Belarus (Chernobyl Committee) during Project preparation. 4 With Bank experience in other projects in Belarus, Government and implementing agency officials were aware of requirements for project preparation and implementation. Technical solutions and economic criteria and justifications - particularly for energy efficiency measures - were tested under the SIRP. The PCRP paid additional attention to the social factors associated with a post disaster situation, where understandings of long term unclear impacts, beliefs and concerns lingered and affected daily lives. Implementation arrangements, including fiduciary requirements were in place and utilized staff and experiences under the SIRP. Soundness of Background Analysis Project preparation was based on sound analysis of the social impacts of the Chernobyl Accident prepared by international agencies including the IAEA, the UNDP and the World Bank. The technical and economic analysis of the Project were based on known methodologies and empirical studies (noted above), and were further refined to address the specific experiences in the post-soviet economies which shared many technical similarities in the design of buildings and heating provision where energy sources were undervalued. The solutions were tested and implemented in other projects with similar technical conditions and the lessons learned (from SIRP) were incorporated into the Project. Assessment of Project Design The objective of the Project is to improve energy efficiency and reliability in delivering heat and hot water to improve living conditions. The beneficiaries were specifically identified to be the more vulnerable residents of the Chernobyl Affected Area: residents of social institutions, as well as households using wood stoves for heating. The problems and their solutions that led to the design of the project were identified as follows: (a) Outdated and old equipment such as boiler houses have surpassed their useful lives, were inefficient, based on old technologies, and were often overdesigned. Heat distribution networks were old and insufficiently insulated to prevent extreme energy losses. Windows and doors were old and drafty, installed during the times of very low energy prices with little concern for efficiency. (b) Houses using wood stoves were exposed to unhealthy home environment, and in some cases, could be using radiation contaminated wood and disposing of contaminated ashes. House connections to the gas distribution network and gas meters and stoves were to be provided. Project Organization: Project implementation and monitoring organizations were fully imbedded in the Government’s structure, and additional arrangement outside the Government structure was not required. The PMU is a unit of Belinvestenergosberezhenie, an agency of the Government involved in the implementation of the Government’s energy efficiency program. The PMU reported directly to the Energy Efficiency Department (EED) that oversees the implementation and monitors the achievements of the energy efficiency program in Belarus. The PMU was fairly independent in its daily operations and communications with the Bank. Its integration in the Government’s apparatus facilitated access to Government officials and enabled it to resolve issues quickly. The PMU handled the responsibilities (procurement, financial management) of Component II: Residential Gas Connections, and coordinated with the Ministry of Energy (MoE), which was responsible for the technical preparation and supervision process and had assigned staff to coordinate with the PMU. The PMU coordinated with local authorities and with the owners and users of the facilities. The centralized, and at the same time broadly locally represented implementation arrangement facilitated the monitoring of physical progress of work, as well as monitoring of progress towards achievement of objectives. Monitoring indicators were collected locally based on agreed and uniform parameters, and integrated by the PMU for the whole Project. The Chernobyl Committee’s role was changed 5 from the Project’s overall coordinator, to focus on its governmental role as the coordinator for activities in the Chernobyl affected area of Belarus. The role of the Chernobyl Committee focused mainly on ensuring that project activities take place in areas approved for habitation. The Project did not include policy measures in the energy sector. This was a conscious decision by the Bank and the Government. The project was not perceived as a good vehicle to implement policy changes in Belarus’s complicated energy sector and policy environments. Policy discussions were being conducted separately through country and sector work. The Government was taking slow but consistent actions with regard to tariffs, but the policy was influenced by outside factors beyond the control of the project or its partner agencies. Adequacy of Government Commitment The Government was committed to the Project at the highest levels, and provided timely resources for its preparation and implementation. The project addressed two of the Government’s priority objectives: (a) providing economic support for the population of the Chernobyl affected area in Belarus; and (b) simultaneously addressing its priority area in energy efficiency and environmental concerns. The Government committed to the necessary counterpart resources, maintained a highly skilled PMU to implement the Project and provided the necessary skills to oversee Component II: Residential Gas Connections. The State Program for Mitigating Consequences of the Chernobyl Nuclear Disaster in 2011 – 2015 and up to 2020 with a budget of about $2.3 billion (approved by Resolution of the Council of Ministers of the Republic of Belarus No.1922 dated 31 December 2010) is under implementation. The budget is likely to be maintained or increased for the next 5 year plan. The Government’s success in its energy efficiency programs is reflected in improvements in energy statistics for Belarus. Based on International Energy Agency (IEA) data, Belarus achieved a 50% reduction in energy intensity of its economy since 2002. Figure 1.GDP (in PPP) Energy Intensity in Selected Countries in 2010 compared to 2002, toe/000 USD 0.7 0.62 0.62 0.59 0.6 0.51 0.5 0.47 toe/000 2000 USD 0.42 0.4 0.35 0.3 0.28 0.3 0.25 0.27 2010 0.22 0.24 0.23 0.21 0.21 0.18 0.17 2002 0.2 0.15 0.14 0.17 0.15 0.13 0.11 0.1 0 Source: Key World Energy Statistics. IEA 2004, 2012 Assessment of Risk Two main risks inherent in the Project design were identified: (a) radioactive contamination risk and (b) risk of household weak response to gas connections due to expenditure requirements. 6 Radiation Risk: At the time of appraisal, the fact that the project operated in a radioactively contaminated area was a critical risk. The IAEA was a main partner with the Government and the Bank in identifying and evaluating these risks. The IAEA had been involved in Belarus soon after the Chernobyl accident. All aspects of the accident and its impact had been closely studied and monitored. Scientific and technical cooperation was intensified and Belarus’ capacity in this area was considerably strengthened. The IAEA reviewed the activities of the project, the relevant data concerning wood contamination data, and national radiation protection regulations, and concluded that by virtue of the project’s definition and delineation, the project’s activities will lead to long-term positive radiological outcomes and not entail unusual measures for radiation protection during project implementation. Residential Gas Connections: The second risk was recognized based on experiences of expanding gas pipelines under the program of the Government. While the main trunks and distribution lines were built, households responded with different levels of effort to connect to the gas pipeline because of additional expenses to retrofit the household which led to delays in connecting whole towns. The Government then established programs to support households through subsidies, loans, and public information campaigns. Surveys were undertaken to determine the number of homes and household investment needs prior to undertaking investments in distribution lines. Bank financing was designed to take place where the main gas pipelines already reached the town, and where a minimum of 50% households were ready to connect to the gas pipeline. Fiduciary Risks: The risk assessment for procurement in Belarus was high, but was considered moderate for the Project given the staffing at the PMU and its experiences in implementing Bank projects. The financial management arrangements were assessed and were found to be adequate based on prior experiences and the staffing of the PMU. Other Risks: Risks were consistently evaluated during project implementation. The country and sector environment risks were rated as substantial as Belarus remained a centrally planned economy with heavy top down policies and limited market maneuverability. At the same time, governance, fraud and corruption risks were rated moderate. Project risks were consistently rated low due to strong Government and implementing agency commitment, high technical capacity and low opportunities for fraud and corruption. The project’s simplicity of design, fitness with the Government programs and policies, adequate monitoring, and post operational sustainability made overall project risks low to moderate. Quality at Entry There was no quality at entry assessment by the Quality Assurance Group. 2.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable) Overall project implementation proceeded satisfactorily for the following reasons: (a) PMU personnel were experienced in Bank and Government requirements. Staffing was stable with minimal changes at the managerial, technical and fiduciary responsibilities. The PMU had independence in the daily operations of the Project and relations with the Bank. At the same time, it was well supported by and integrated into the Government’s program and structure which facilitated efforts to (i) resolve problems once identified (e.g. counterpart 7 funding), (ii) monitor physical progress of the project and progress towards achievement of objectives. (b) The Bank team was experienced in the country and sector. The team was adequately staffed. Technical, fiduciary and safeguard staff regularly visited project sites. Regional management supported team decisions and raised concerns to higher levels of the Government. The Minsk country office ensured timely and adequate information flow, and supported project monitoring. (c) Mid-term review was undertaken on time, identified problems (e.g. need to reorient indicators for better measurement and monitoring) and opportunities (use of project savings and additional financing). (d) Implementation support missions were undertaken regularly twice a year. Reports were candid and identified bottlenecks and solutions agreed with the PMU/Government. The Bank team mobilized specialized training on procurement for contractors. (e) The PMU provided training on procurement and Bank policies on project implementation (including monitoring) to the oblast level committees responsible for project implementation and monitoring at the local levels. Delays were encountered in the first year of the project due to delays in the startup of the technical design consultant whose efforts and limited capacities were reportedly diverted by other assignments with the Government. This was followed by some difficulties in attracting eligible bidders, who were reluctant to participate given limited knowledge of Bank procurement procedures, and high requirements for participation in ICB procedures. At the same time, contract amounts were not attractive enough for foreign bidders and in Belarus’ market. The Bank’s response – providing specialized training for the local contractors – was effective in resolving the situation successfully. Subsequent to the training, the PMU took the lead in raising awareness of contractors, keeping contractors informed of bidding opportunities, and encouraging them to bid on Project contracts. Bidder response improved, the number of bids submitted improved to an average of 4 qualified bids per tender. During the financial crisis, there were occasional delays in counterpart funding, the issue of which was raised by Bank management, and addressed within the year by the Government. There was no assessment of implementation by the Quality Assurance Group. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization M&E Design The institutional framework for results monitoring was imbedded in the project management and implementation arrangements. The PMU was responsible for the collection and reporting of data and monitoring indicators. Data collection was undertaken at the site level by the owners of the facilities being rehabilitated. Data for monitoring indicators were to be collected and/or estimated during design and implementation of each component. For example, efficiencies and fuel use of outdated boilers would be replaced by known efficiencies of new boilers. Pollutant contents of different fuels are standard and reductions would be dependent on reductions in or replacement of fuel use. In the case of residential gas connections, the MoE undertook surveys to estimate the number of homes to be connected. During implementation, MoE surveys were accompanied with public information campaigns to encourage the population to prepare their homes to use the supplied gas for heating purposes. The PMU collated the information and included it in the progress reports submitted semi- annually and prior to Bank missions and to EED and to MoE. 8 Mid-term and final social surveys were planned and implemented with the aim to strengthen and verify the outcome measurements of monitoring indicators, and to gauge the satisfaction of the population and the impact of the project and make corrections as needed. M&E Implementation Data collection and monitoring was implemented as designed. Baseline data (before intervention) was collected at the feasibility study stage, and included the number of beneficiaries and amount of fuel used (PDO indicators). Actual data is collected a year after commissioning to determine the amount of fuel used following the investment. M&E data were prepared by and discussed with the PMU in each Bank implementation support missions. In site visits, M&E data was presented by the site owners who were closely associated with the users, e.g. school directors, local government officials, and boiler house engineers). Site owners demonstrated familiarity and knowledge with the works and the outcomes of the Bank- financed activities and their impact on users of the facilities. Directors of social institutions were keenly aware of the benefits of the investments and their impact on users. The mid-term social survey was conducted for both the SIRP and the PCRP at the same time for the energy efficiency components. Overall, the results of the survey were positive and clearly showed the benefits perceived by the residents of schools. For the final report, the PMU engaged a technical consultant in September 2013 to verify energy and environmental savings. Overall, the technical consultant found the quality of the work satisfactory, highlighted the need for maintenance and follow up on contractor’s work, particularly during the warranty period. With regard to savings, the indicators were broadly in line with those observed by the consultant, except in the case of savings in electricity consumption. The targets set by the Project and measured by the PMU measured savings due to changes in lighting. The consultant noted the savings due to installation of the more modern equipment, particularly in boiler houses. The consultant’s calculated savings were MWh99,478 vs. MWh12,800 targeted, and MWh15,800 recorded due to savings due to installation of new more efficient lighting fixtures. M&E Utilization. The Bank team reviewed with the PMU the monitoring indicators to ensure consistency in measurements. Indicators on physical progress were used during implementation support missions to track project progress and contractors’ performance. Project M&E data are reported to Oblast and National authorities to show progress on meeting national targets established in the Government’s programs of energy efficiency and gasification. 2.4 Safeguard and Fiduciary Compliance (focusing on issues and their resolution, as applicable) Environment The project triggers Environment Category B safeguard policy (OP4.01). An Environmental Management Plan was developed at appraisal to cover construction and renovation activities. Civil Works contracts included clauses on environmental mitigation plans, and the supervisory engineer was responsible for their monitoring. The environmental specialist participated in Bank missions and visited project sites. Mission reports verified compliance with the environmental safeguard policy and the environmental management plan. Environmental monitoring starts at the design stage of sub-projects whereby specific activities are agreed to ensure that environmental requirements are 9 followed. During implementation, periodic checks and verification of compliance with norms are undertaken by environmental, sanitary-epidemiological inspectorates. At completion, inspections of sites and testing of equipment are undertaken prior to final acceptance. Compliance with the Environmental Safeguard was rated Satisfactory, and no problems were encountered during implementation. The risk to environmental management at the end of the Project is rated as Moderate. After review of national regulations and project interventions, the IAEA concluded that the project’s activities will lead to long-term positive radiological outcomes and not entail unusual measures for radiation protection during project implementation. The Belarus Government has well-established procedures for radiation protection of the public. The scope of protective measures for the public and for workers that apply to this project are expected to comply with international recommendations and Belarus national regulations. Financial Management Financial management (FM) arrangements were in place throughout project implementation, and relied on skills and experiences from other projects implemented by the PMU (SIRP). PMU staff attended five Bank sponsored seminars on different aspects of financial management. The Bank FMS specialist undertook a minimum of one mission per year. Overall, FM ratings were Satisfactory, but were downgraded on few occasions to Moderately Satisfactory due to insufficient disbursement evidence, deficiencies in the operational manual and/or for insufficient information in financial management reports. Annual audit reports were received on a timely basis. All audit opinions were unqualified. The risk to financial management at the end of the Project was Moderate. Procurement The Project utilized Bank procurement procedures and standard bidding documents. PMU staff attended five Bank sponsored seminars on procurement. Implementation issues arose and some delays were encountered at the start of the Project due to (a) limited market and capacity in technical design consultants due to the prevalence of design consultants associated with the government in Belarus; and (b) limited familiarity of local consultants with Bank procedure and capacity to meet ICB requirements. The relatively small value of contract amounts limited the appetite of foreign consultants to bid in the market of Belarus. The Bank and the EED/PMU worked together to remedy the situation. The Bank provided specialized training for local contractors. The PMU followed up to increase awareness and encourage bidders to bid. For example, bidding for boiler houses was repeated due to weak response. Specifications were adjusted, more extensive advertisement was undertaken, and training for local contractors was provided to familiarize them with Bank procedures and requirements. All contracts were awarded and completed by project closing. The procurement specialist regularly participated in implementation support missions. Procurement performance was consistently rated as Satisfactory. 2.5 Post-completion Operation/Next Phase (including transition arrangement to post-completion operation of investments financed by present operation, Operation & Maintenance arrangements, sustaining reforms and institutional capacity, and next phase/follow-up operation, if applicable) Technical and Institutional: At the completion of each sub-project, operations and maintenance of the facilities will resort to normal operations which are the responsibility of local level institutions. Technical capacities are available at the local levels to continue operations. The institutional framework for the support, operations and management of the Project investments remain strong and 10 in place. The Government is committed to scale up the Project objectives and approach continuing the focus on energy efficiency. Financial and Commercial: The capacity of utilities to operate on a commercial basis is a standard concern in Belarus because of the lack of cost recovery and large subsidies provided by the Government (the fiscal cost of underpriced energy amounts to about 2 percent of GDP annually). The Government has in place a program to gradually increase tariffs to reach 60% cost recovery in the medium term. National and local authorities have shown their long term dedication to the objective of reducing wasteful energy consumption and emissions. The Government has continued to provide the necessary budgetary support as part of its commitment to the Energy Efficiency Programs and Gasification Programs in the country. Monitoring: Because the key monitoring indicators are part of the national statistics (fuel savings and emission reductions, Kms of gas lines and population connected), the efficiency of the project investments will continue to be monitored. Demonstration and Marketing: According to local authorities, their sub-projects have been used as demonstration of success to higher authorities when aiming to obtain budgets for additional energy efficiency projects. School directors indicated that students note their more comfortable environment and are encouraged at school to undertake energy saving measures. Documentary evidence and stories of the improvements has been recorded and are shown in schools and in the media to demonstrate and encourage energy saving behavior. The World Bank has also published some of the success stories of the Project on its own website. 3. Assessment of Outcomes The outcome of the Project is highly satisfactory. The Project focused on energy efficiency measures in the Chernobyl affected area of Belarus. Energy efficiency has been a key element in Belarus’ strategy and its cooperation with the Bank, and the project was therefore responsive to the country’s important priorities. Policy reforms are needed in Belarus, however the Bank avoided including policy requirements given the nature of the Project, and the Government’s clear policy objective. The Government team did not promise policy reforms that it knew would not proceed due to the overall policy environment in the country. This clear approach and the Government’s commitment in the energy sector increased the likelihood that the Project would yield the large benefits of energy savings and improved service delivery to the vulnerable population. The Project has surpassed its objectives on all the indicators measured. The indicators measure outcomes that are directly related to the investments made. Qualitative and quantitative surveys and Bank field visits verified the reported outcome in on-site observations and discussions with beneficiaries. Project efficiency measures in terms of energy savings given capital and operational costs are high. Project achievements are detailed in section 3.2 below. The Bank provided the necessary skills and budgetary support to prepare and implement the Project. Reports were clear and management follow up effective. The Borrower supported the Project with effective staffing and budgetary support. Environmental safeguards were adhered to and supervised adequately. Procurement delays and a case of rebidding occurred. In consultation with the Bank, the implementing agency took timely action to remove obstacles and avoid long delays. Financial management faced some lapses, but were detected and corrected quickly. Project momentum was kept up with continued communications at all levels. 11 3.1 Relevance of Objectives, Design and Implementation (to current country and global priorities, and Bank assistance strategy) Relevance of Objectives is high. The objectives of the Project continue to be relevant to long term strategies in Belarus. The Government completed three energy efficiency programs, the current one of which is valid until 2015. Improving economic conditions of the population, and reducing energy intensity of the Belarussian economy through energy efficiency and other measures remains a priority as outlined in the Bank’s latest Country Partnership Strategy (FY14-17) discussed by the Board in June 2013. The Government has a clear and long term strategy in the energy efficiency sector that has been consistent and successful. It continues to provide monitoring of nuclear contamination and support to the population affected by the long term impact of the Chernobyl nuclear power plant accident. Relevance of Design and Implementation is high. The components of the Project are designed to directly deliver the intended benefits of a warmer and cleaner environment in an efficient manner by installing modern, efficient and environmentally friendly equipment. Capacity building and public information supported the effectiveness of physical investments by ensuring awareness and behavioral changes to enhance the objectives of the Project. In addition to relying on tested arrangements for Bank financed project in the same sector in Belarus, the implementation arrangements were based on the government’s well-coordinated structure which facilitated monitoring of the works and outcomes. 3.2 Achievement of Project Development Objectives (including brief discussion of causal linkages between outputs and outcomes, with details on outputs in Annex 2) The objective of the Project is to provide the population residing in the Chernobyl affected area with energy efficient and reliable heat and hot water services in order to improve their living environment. The Project achieved the objectives by providing direct investments in equipment and infrastructure that would promote energy efficiency and reliability and provide the necessary comfort for beneficiaries. The extent of the Project’s achievement is substantial. Indicators to measure the achievement of these objectives have been surpassed in all cases as follows: (a) Number of beneficiaries receiving reliable and efficient services under the energy efficiency component (250,769 students, teachers, patients, hospital administrators, other users of public social institutions and household residents) surpassed the revised target of 250,000 people estimated at project restructuring. (b) Number of Households connected to the gas pipeline for cooking, heat and hot water services (5,005 households) surpassed the revised target of 4,000 households. (c) The amount of energy saved at completion due to investments in modernization of heat distribution network and installation of heat substations, and energy efficient boiler equipment reached MWh/year 248,736 surpassing the revised target of MWh/year of 158,000. (d) Amount of electricity saved due to installation of new lighting fixtures reached MWh/year 15,800 surpassing the revised target of MWh/year of 12,800. Total electricity saved (including installation of modern boilers, pumps and other equipment) reached MWH/year 100,478. 12 (e) Amount of emissions reduced due to the installation of the modern efficient equipment reached 114,661.6 tons of CO2 surpassing the revised target of 41,350 tons of C02. (f) Efficiency and reliability improved in 32 boiler houses, and overall heating and lighting services improved for 443 and 298 buildings respectively also surpassing the targets. Figure 2. Project Cost by Oblast Project Cost by Oblast, USD 12,846,903 28,791,347 Brest Oblast Gomel Oblast 36,108,061 Mogilev Oblast Figure 3. Number of Beneficiaries by Oblast Number of Beneficiaries by Oblast 31,362 101,023 Brest Oblast Gomel Oblast 123,389 Mogilev Oblast Figure 4. Reduction in Fuel and Energy Consumption by Oblast Reduction in Fuel and Energy Consumption by Oblast, toe 17,541 18,289 Brest Oblast Gomel Oblast Mogilev Oblast 31,721 13 Based on the above, the Project has significantly achieved its development objectives and is rated as highly satisfactory. 3.3 Efficiency (Net Present Value/Economic Rate of Return, cost effectiveness, e.g., unit rate norms, least cost, and comparisons; and Financial Rate of Return) In 2005 at appraisal of the original PCRP, the economic rate of return (ERR) for the different sub- components of Component I: Energy Efficiency Improvements based on a life cycle analysis was estimated based on the gas price of US$67 per thousand cubic meters (TCM) in Belarus and US$150 per TCM in Poland. The ERR for the sub-components varied from 9% for window replacement to 28% for boiler replacements based on the gas price in Belarus and respectively from 14% to 36% based on the gas price in Poland. Upon completion of the Project, the actual ERR for the whole project was estimated using the same methodology, taking into account the actual average capital investments per type of energy efficiency measures (e.g. reconstruction of boiler houses, replacement of windows, installation of energy efficient lighting fixtures, etc.), and actual boarder price of natural gas of US$165 per TCM in 2013. The table below shows the economic rate of return and more details are given in Annex 3. Table 1.Economic and Financial Internal Rates of Return At Appraisal Actual at Completion Gas price in Gas price in Current gas price in Belarus Poland Belarus Energy efficient lighting 11% 18% 18.2% Window replacement 9% 14% 18.8% Boiler replacement 28% 36% 31.4% The prices of natural gas and electricity have increased significantly compared to those at the original project appraisal. The actual ERR, which vary between 18% and 31%, demonstrate strong economic viability of the energy efficiency improvements supported by the project. Taking into account the total investment in the above-mentioned energy efficiency improvements the average weighted ERR for the entire Component I: Energy Efficiency Improvements is estimated to be about 25%. At appraisal a cost effectiveness analysis was conducted for Component II: Residential Gas Connections. The aim of this component was to introduce a clean and safe heating method for individual houses that risked using contaminated wood fuel for heating. At appraisal the gas heating was compared to electric heating with results demonstrating that annual costs of the gas heating option were about half of the annual costs of electric heating. With current gas and electricity prices the annual cost of gas heating are about 40% of the annual cost of electric heating demonstrating that gas heating is the most cost effective clean heating method. 3.4 Justification of Overall Outcome Rating (combining relevance, achievement of PDOs, and efficiency) Rating: Highly Satisfactory 14 The overall outcome rating is Highly Satisfactory because: - The objective and design of the Project, its emphasis on energy efficiency and improving living conditions remains highly relevant to the current strategic objectives of the Government of Belarus and its stated strategic cooperation with the Bank. - The Project is highly satisfactory in achieving and surpassing its key objective in a timely and efficient manner. - Energy savings surpassed expectations and rendered project efficiency as high. 3.5 Overarching Themes, Other Outcomes and Impacts (if any, where not previously covered or to amplify discussion above) (a) Poverty Impacts, Gender Aspects, and Social Development The Project had positive poverty and social development impact. The Chernobyl affected area of Belarus suffered physical, social and economic consequences from the fallout of the Chernobyl accident in 1986. According to the National Report: A Quarter of a Century After the Chernobyl Catastrophe, Outcomes and Prospects (2011), real major losses to the economy since the accident are estimated at USD 43.3 billion (of which USD 13.7 billion is in lost profit) and include lost agricultural, forestry and other production. According to the CAS (FY08-11), the Chernobyl affected area continued to have the highest rates of poverty incidence in Belarus. The Project targets vulnerable beneficiaries in an economically and socially less fortunate area of the country. The Project did not intend in its design to discriminate its focus based on gender given the nature of its intended beneficiaries – mainly children, the elderly, and other vulnerable occupants of social institutions. According to the M&E indicators, the project had an equal gender impact. (b) Institutional Change/Strengthening (particularly with reference to impacts on longer-term capacity and institutional development) While the Project intentionally did not address institutional reform aspects of the energy sector, it enabled continued dialogue with the Government and reinforced the Bank’s commitment to the country and sector. Other technical assistance studies were completed or are under discussions that address the institutional and financial issues in the energy sector (e.g. the completed Renewable Energy Legal and Regulatory Framework Harmonization with the EU, Biomass-Based District Heating, and the planned Heat Tariff Reform and Social Impact Mitigation (FY15)). The Project also gave the Government’s counterparts and the private sector exposure to international best practices in procurement, financial management, and modern technical interventions for optimizing energy efficiency. (c) Other Unintended Outcomes and Impacts (positive or negative) Directors of social institutions, during site visits and in the social survey, often commented on the improved learning and healing environment and cited statistics such as less absenteeism due to sickness from the cold due to improved heating, or fewer complaints from vision deficiencies due to better lights. While it is likely that a warmer school environment is more comfortable, no empirical studies or comparisons with other schools were undertaken in the project to confidently associate such outcomes with the Project interventions. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops (optional for Core ICR, required for ILI, details in annexes) 15 A social survey was conducted at completion of the project, the details of which are in Annex 5. The survey focused on (a) the perceptions of the population in terms of the results of the investments as it affected their comfort, wellbeing, improvements in the learning and healing environments, affordability and ease of use (gas component), and (b) the process of the investment and lessons learned. For the Energy Efficiency Improvements Component, questions to the focus groups were divided to distinguish between investments in (a) windows and doors, (b) lights, and (c) insulation. The focus group interviews indicated overwhelming and high satisfaction with the results of investments in terms of improved and comfortable temperatures, better ventilation, less noise, better lighting and overall more pleasant aesthetics in the social facilities. Because of the immediate visibility and impact on users, window replacement was seen as the most effective in reducing cold and draft, and improving the overall living environment. Administrators associated the improvements with reduction in absenteeism, better health, less complaints with eyesight and overall better environment for children to learn and teachers to teach. In hospitals, administrators especially appreciated the better working conditions due to improved lights, and noted the impact of comfortable warm environments on improved moods and behaviors of patients. With regard to the Residential Gas Connections Component, the survey found that 60% of the households used natural gas for heating purposes during the 2012/2013 season. Some residents (about 40%) continue to use wood for heating while retrofitting their homes for future connection to gas heating. Almost all homes (99.2%) use gas for cooking. Owners of private houses are more likely to prepare their homes (internal piping and equipment) than residents of state or company owned homes. Eighty eight percent of respondents were satisfied with the quality of the installed equipment and services. There is overall satisfaction with the results due to convenience and ease of use (cleaner house, user friendly equipment). 4. Assessment of Risk to Development Outcome Rating: Moderate The risk that the development outcomes of the project will not be maintained is moderate. The project falls within Belarus’ strongly supported energy efficiency program. Supporting the economic and social revitalization of the Chernobyl affected area also remains a Government priority. The institutional framework for maintaining the development objective and the Project’s interventions is strong with adequate skills and government financing. The energy efficiency program in Belarus continues to be renewed with clear performance indicators and measurements of energy saved, environmental consequences, and impact on the economy as a whole. The population is increasingly aware of the need for energy conservation and environmental protection, and public information campaigns continue to take place in and outside schools. One important risk that may affect the replication and expansion of the development outcome is a change in the external environment, namely fuel supply and prices from Russia, which could impact the energy sector in Belarus through increased fuel prices. It is difficult to assess the potential for this risk to materialize or the extent of its severity. Fuel import prices have been increased regularly from US$47/TCM in 2005 to US$263.5/TCM in 2011. In 2011, Belarus negotiated a price of US$165.60 up to 2014. Belarus passed on the price escalations mainly to fuel suppliers. At the same time, the crisis further emboldened the Government in its support to energy efficiency measures. 16 On the one hand, an increase in fuel prices will continue to encourage Belarus to improve on energy efficiency measures, and to maintain project investments which become even more economically valuable (Energy Efficiency Improvements Component). On the other hand, gas price increases which are passed to consumers will encourage them to further regulate their consumption, but may entice them to switch back to other less expensive sources of fuel (Residential Gas Connections Component). Overall Belarus has weathered this risk through negotiations with the Russian Federation. The Government continues to work with the Bank in this area within the agreed strategy. 5. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues) 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry (i.e., performance through lending phase) Rating: Satisfactory Bank performance at entry is satisfactory. The Bank relied on quality studies and analysis related to energy efficiency measures in post-Soviet economies, and ensured the Project is well anchored in the long term strategy of the country. The Bank team included experienced technical and fiduciary staff familiar with the region and the country circumstances. Fiduciary and safeguard challenges and risks were assessed and the necessary implementation framework was in place. The M&E framework was well designed and included achievements that can be directly related to the Project. The Bank team provided hands-on support and training for the Government’s implementation team on procurement and financial management. There were no identifiable shortcomings in the preparation of the Project. (b) Quality of Supervision (including of fiduciary and safeguards policies) Rating: Satisfactory Bank performance during implementation support was satisfactory. The Bank team ensured continuity and consistency of good performance from preparation and throughout supervision. Implementation support visits were undertaken twice a year, were action oriented and focused on resolving problems and monitoring progress towards achievement of objectives. Technical discussions focused on modern technologies appropriate for Belarus, including opportunities to use of local fuels. Field visits verified capacity and institutional framework for the reliability of services and the operations and maintenance of the newly installed equipment. Technical, fiduciary and safeguard issues were addressed in a comprehensive manner; support and training was provided during missions by the relevant Bank experts. Staff verified the social impact of the Project through discussions and field visits. Adequate attention was paid to data collection of the M&E indicators. Country office staff maintained communications with officials and resolved problems directly with the PMU and through discussions with authorities. Sector and country management provided pointed useful comments and supported the team by raising difficult issues (e.g. counterpart funding) with the Government and providing the appropriate budget. Shortcomings in supervision were minor and did not affect Project progress. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory 17 Bank performance during preparation and supervision was satisfactory with minor project delays, timely resolution of problems, attention to technical, fiduciary, safeguard and monitoring aspects of the Project. The overall Bank performance rating is satisfactory. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory The Government’s performance was satisfactory. The Government supports the dual objectives of the project (energy efficiency and improvements in living conditions in the Chernobyl area) with considerable resources in long term and far reaching programs. The sector framework at the national and local levels ensures that interventions made by the Project will be appropriately operated and maintained. For Project preparation and implementation, the Government assigned responsible agencies and provided them with the authority to manage the project within the Government’s framework of the energy efficiency program. The EED was effective in overseeing the Project and coordinating with other agencies including the Chernobyl Committee and the MoE. Delays were encountered in providing counterpart financing to the Project during the global financial crisis and due to economic difficulties at home. The Government addressed the issue and restored counterpart financing within the fiscal year. Overall, shortcomings were minor and did not impact the final achievements of the Project objectives. (b) Implementing Agency or Agencies Performance Rating: Satisfactory The performance of the Project Management Unit was satisfactory. Staff is knowledgeable of the sector and capable of working with the Government and the Bank to ensure progress. The PMU undertook the fiduciary responsibilities on behalf of the MoE, and to coordinate with and to report to MoE and the Chernobyl Committee and the MoE. The PMU handled Bank requirements with a high level of professionalism. The PMU provided training in procurement, project management and monitoring to local level authorities responsible for project implementation and monitoring. One shortcoming in the PMU performance was the supervision of the technical design consultant which initially delayed project start up. The consultant was engaged in other Government related projects and did not give the Project the necessary priority. Nevertheless, the PMU was able to correct the situation through discussions with the Government and the consultant. Legal covenants were adhered to. Procurement performance was consistently rated as satisfactory. Financial management was often satisfactory, but was downgraded to moderately satisfactory for minor shortcomings in reporting and disbursements. Overall, the PMU was able to implement the project in a timely manner, and coordinated the Project among the many levels of Government. The shortcoming in the PMU’s performance did not impact the achievement of Project objectives. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory The overall rating for Borrower performance is satisfactory. The Government and the Implementing agency performed well during the preparation and implementation of the Project, cooperating with the Bank to resolve issues. High level of attention was paid to the Project. Coordination among many actors was performed well by the PMU which also adequately handled fiduciary, safeguard and technical matters in a timely fashion. 18 6. Lessons Learned (both project-specific and of wide general application) 1. The Project was an essential component of the Government’s larger well implemented energy efficiency programs and was aligned with the Government’s program to improve living conditions in the Chernobyl affected area. Government commitment and support which are clearly stated in policies and programs increase the likelihood of project success. 2. The Project did not require changes in pricing and subsidies given the government policies particularly in the Chernobyl affected area, the targeted beneficiaries and the overall level of relationship with the country in terms of policy dialogue. To require deviations from Government policies in projects where the policy environment is not ready is likely to derail good implementation and successful achievements of tangible benefits. 3. By supporting a project with local (improve living conditions), national (reduce energy intensity) and global (reduce global emissions) objectives, the Bank created an environment of confidence conducive to continued future dialogue with Belarus on these important issues. 4. Participation of users and beneficiaries increases their understanding of and commitment to the project and improves end results. The Project encouraged participation of beneficiaries, especially school children and administrators, while using Belarus’ own methodologies such as including energy efficiency in the curriculum and requesting administrators to be part of the monitoring team. 5. Not allowing design consultants affiliated with the Sub-Borrower to participate in the project limited the pool of eligible local design consultants available in the market and constrained the potential for capacity building. 6. Increased awareness of contractors about project bidding opportunities in the early stages of the project (appraisal) helps to limit delays. The continued follow up by the PMU, including training, with bidders during implementation improved the local understanding and the chances of success in future tenders. Revised terms and conditions of bidding documents to adjust to local conditions elicited sufficient number of responsive bids. 7. The establishment and revision of baselines and targets that are directly related to project outputs simplify measurement, monitoring and association with the project outcomes. 8. Continuous dialogue between the Bank and the Government teams facilitates timely resolution of problems, limits delays, and builds strong relations for future dialogue. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies The Borrower/implementing agency prepared a comprehensive Implementation Completion Report and responded promptly to all requests for information that the task team requested. (b) Cofinanciers Not applicable (c) Other partners and stakeholders (e.g. NGOs/private sector/civil society) Stakeholder/beneficiary comments are presented in Annex 5-A: Voices from the Chernobyl affected area of Belarus: Beneficiary reactions to improvements in energy efficiency activities 19 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD million equivalent) Appraisal Revised/Additional Actual/Latest Percentage of Components Estimate (USD Financing Estimate Estimate (USD Appraisal millions) (USD millions) millions) 1. Energy Efficiency 48.00 72.40 79.30 109.53 Improvements 2. Residential Gas Connections 8.50 12.05 10.90 90.46 3. Project Management and 5.00 6.60 1.70 25.76 Implementation Support Total Project Costs 61.50 91.05 91.90 100.93 Front-end fee IBRD 0.125 0.075 0.20 100.00 Total Financing Required 61.63 91.13 92.10 101.06 (b) Financing Appraisal Actual/Latest Type of Percentage of Source of Funds Estimate Estimate Cofinancing Appraisal (USD millions) (USD millions) Borrower 11.13 12.10 108.72 International Bank for Reconstruction and 80.00 80.00 100.00 Development 20 Annex 2. Outputs by Component Component Output Contribution to Objective Component 1: Energy Efficiency - Improvements in living Improvements: Final Cost: US$79.3M environments for 250,769 beneficiaries reached vs. 250,000 targeted - Environmental benefits achieved: 121,147 tons annually of C02 emissions reduction vs. 41,350 tons of C02 targeted - Energy Efficiency and Reliability in - 32 unreliable old boilers Energy savings and reliable heat Heat Generation: Replacement of old replaced vs. 33 planned services provided. inefficient boilers and installing modern - 248,736 MWh/year of heat saved boilers and cogeneration equipment vs. 158,000 MWh targeted. With a conservative estimate of 3 years - Energy Efficiency in Heat life of the Project, about 750,000 Distribution: Replacement of old MWh have been saved already pipelines, modernization of building level heat substations - Energy Efficiency in Public - 443 buildings rehabilitated Energy savings and improved Buildings. Replacement of old vs. 365 buildings planned living environments provided: windows, insulation, and lights with - 145 buildings with window - 15,800 MWh/year of electricity longer life, more efficient equipment replacements vs. 118 saved vs. 12,800 MWh targeted for planned changes in lighting only. - 298 buildings with lights - A total of MWH/year 99,478 of vs. 247 planned savings including from more efficient equipment such as boilers, pumps, etc. Component 2: Residential Gas - 219 Kms of pipelines - 5005 households connected to Connections: Actual Cost US$10.88 M installed vs. 200 planned the gas network and use gas for cooking and/or heating vs. 4000 planned *Figures are from last ISR as of September 2013. The Government’s ICR provides slightly higher figures as of December 2013. 21 Annex 3. Economic and Financial Analysis (including assumptions in the analysis) For the Post Chernobyl Recovery Project (PCRP) Project Appraisal Document (PAD) prepared in 2006, an economic analysis was carried out for Component 1: Energy Efficiency Improvements, which accounted, at the time, for the bulk of the project costs. For Component II: Residential Gas Connections a cost-effectiveness analysis was conducted for the investment in gas connections for residential space heating in regional towns, since the major benefits, such as reduced indoor air pollution, and in many cases, elimination of the use of contaminated wood, are not quantifiable due to the lack of monitoring data. Component 1: Energy Efficiency Improvements At appraisal, the economic internal rate of return (ERR) was estimated for the different sub- components of the Energy Efficiency Improvements Component of the project based on the Belarusian gas price of US$ 65 per thousand cubic meters (TCM) and the Polish gas price at that time of US$150 per TCM. During the project the main sub-components of the Energy Efficiency Improvements were: i. Installation of energy-efficient light fixtures in public buildings, mainly in schools and hospitals. Replacing old and inefficient light fixtures which did not provide sufficient lighting, impairing school children’s eyesight. ii. Installation of low-heat-loss and double-glazed windows in public buildings. Replacing old and deteriorating double wood-frame windows which have become leaky and fragile. iii. Boiler plant replacement. Replacing old and inefficient oil-fired or gas-fired boilers with new gas-fired boilers, and in a few cases, with new wood-fired boilers using woodchips. Upon completion of the Project, the actual ERR was estimated using the same methodology, and taking into account the actual average capital investments (excluding VAT) per type of energy efficiency measures (e.g. reconstruction of boiler houses, replacement of windows, installation of energy efficient lighting fixtures, etc.), demonstrated energy savings from the monitoring and evaluation reports, and the current actual natural gas price of US$165 per TCM in 2013. Component 1, Energy Efficiency Improvements covers about 72% (about US$80 million) of the total funds used during the project. The actual estimated results for ERR are shown in the table below. Table 1. Economic Internal Rates of Return At Appraisal Actual at Completion Belarus Prices Polish Prices Current Prices Energy efficient lighting 11% 18% 18.2% Window replacement 9% 14% 18.8% Boiler replacement 28% 36% 31.4% The prices of natural gas and electricity have increased significantly compared to those at the original project appraisal. The actual ERR, which vary between 18% and 31%, demonstrate strong economic viability of the energy efficiency improvements supported by the project. Taking into account the total investments in the above-mentioned energy efficiency improvements the average weighted ERR for the whole energy efficiency component is estimated to be about 25%. 22 A large part of the project benefits directly related to the project objectives are difficult to quantify and no attempt was made to quantify them under this analysis. These benefits include an increase in the comfort level of users of rehabilitated schools and medical facilities, lower air pollution levels, lower life-cycle costs for buildings rehabilitated and increased employment due to opportunities generated by the Project. Component 2: Residential Gas Connections The primary objective of the regional town residential gas connection investment is to improve heating services and to reduce the health hazards resulted from burning wood for space heating. There is an additional element of pollution from wood burning in the Chernobyl Accident-affected areas of Belarus due to forest contamination from the radioactive fallout and because of concerns of radioactive contamination in the food chain through ash disposal. Table 2. Distributed Residential Space Heating, Gas vs. Electricity, for an Example House Bykhov, Mogilev At Appraisal Actual at Completion Electric Gas Heating Electric Heating Gas Heating Heating US$ US$ US$ US$ Capital Investment per home Including gas connection and 2,400 2,080 2,600 2,200 installation of boiler and internal piping Annualized capital cost over 20 321 278 383 295 years at 12% discount rate Annual cost of fuel/energy 93 769 243 1,330 At local prices Annualized cost including maintenance 414 1,048 626 1,625 At local prices The overall annualized cost of distributed electric heating at appraisal was about 2 times that of the distributed gas heating. At completion the project the prices of gas and electricity have increased however electricity more than gas. With current prices electric heating would result in even higher costs, gas heating annual cost being only about 40% the annual costs of electric heating. 23 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Responsibility/ Names Title Unit Specialty Lending Anarkan Akerova Counsel LEGCF Legal Counsel Senior Municipal Management Maha J. Armaly ECSUW Operations Officer Specialist Nicholay Chistyakov Senior Finance Officer CTRLN Finance Officer Elena Klochan Sr Country Program Officer ECCBY Operations Officer Galina S. Kuznetsova Sr Financial Management Spec. ECSO3 Financial Specialist Feng Liu Senior Energy Specialist ECSEG Energy Specialist Larisa Marquez Operations Analyst MNCA5 Operations Analyst Pekka Kalevi Salminen Senior Energy Specialist ECSEG Energy Specialist Procurement Anna L Wielogorska Senior Procurement Specialist EASR1 Specialist Supervision/ICR Social Development Maria L. Amelina Senior Social Development Spec. SDV Specialist Senior Municipal Management Maha J. Armaly ECSUW Operations Officer Specialist/Consultant Irina Babich Financial Management Specialist ECSO3 Financial Specialist Nicholay Chistyakov Senior Finance Officer CTRLN Finance Officer Daria Goldstein Senior Counsel LEGLE Legal Counsel Environmental Inesis Kiskis Sr Environmental Spec. ECSSD Specialist Elena Klochan Sr Country Program Officer ECCBY Operations Officer Feng Liu Senior Energy Specialist ECSEG Energy Specialist Larisa Marquez Operations Analyst MNCA5 Operations Analyst Peggy Janice Masterson Operations Officer ECSEG Operations Officer Social Development Nicolas Perrin Senior Social Development Spec ECSSO Specialist Procurement Alexander Rukavishnikov Senior Procurement Specialist ECSO2 Specialist Pekka Kalevi Salminen Senior Energy Specialist ECSEG Energy Specialist Alexander Sharabaroff Operations Officer CSBO2 Energy Specialist Procurement Gurcharan Singh Senior Procurement Specialist TWICT Specialist Iwona Warzecha Sr Financial Management Specialist ECSO3 Financial Specialist Procurement Anna L Wielogorska Senior Procurement Specialist EASR1 Specialist Rozena Serrano Program Assistant ECSEG Program Assistant 24 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY05 9.35 34.32 FY06 43.88 167.27 FY11 7.71 30.00 Total: 60.94 231.59 Supervision/ICR FY07 19.02 64.42 FY08 19.89 58.76 FY09 23.50 107.79 FY10 18.96 85.72 FY11 20.57 74.84 FY12 14.7 73.26 FY13 9.14 46.62 FY14 6.54 47.77 Total: 132.32 559.18 25 Annex 5. Beneficiary Survey Results (if any) Social Analysis A social survey was conducted during the preparation of the Project. As planned, two follow up social surveys were conducted during implementation, one at the mid-term review and one for project completion. The social surveys benefitted from experiences and conclusions of similar surveys conducted for the Social Infrastructure Project. In addition, specialized surveys were used by the Ministry of Energy for the extension of gas pipelines for heating purposes to households. Methodology For the Energy Efficiency Improvements Component, a list of facilities where works have been implemented was prepared along with the type of work undertaken. The survey included 15 settlements covering the three participating regions of Mogilev, Gomel and Brest. Fifty two expert interviews (37 interviews with employees of institutions and 15 interviews with representatives of regional and local governments) and 15 focus group discussions with beneficiaries were conducted. For the Residential Gas Connections Component, a quantitative analysis was carried out with 530 face to face interviews with households located in 4 settlements of the participating regions (36% in Gomel, 52.1% in Brest, and 11.3% in Mogilev). Participants were selected through stratified sampling. The sample volume of 530 households was calculated with a 95% confidence level and a sampling error not exceeding 3%. In addition, 3 beneficiary focus group interviews were undertaken. Results The surveys focused on (a) the perceptions of the population in terms of the results of the investments as it affected their comfort, wellbeing, improvements in the learning and healing environments, affordability and ease of use (gas component), and (b) the process of the investment and lessons learned. For the Energy Efficiency Improvements Component, questions to the focus groups were divided to distinguish between investments in (a) windows and doors, (b) lights, and (c) insulation. Windows, doors and lights were the more visible investments associated with benefits. Because of the immediate visibility and impact on users, window replacement was seen as the most effective investment in reducing cold and draft, and improving the overall living environment. The focus group interviews indicated overwhelming and high satisfaction with the results of investments in terms of improved and comfortable temperatures, better ventilation, less noise, better lighting and overall more pleasant aesthetics in the social facilities. The quality, as reflected in the ease of use (e.g. open and close windows) and maintenance (less need to paint) of newly installed equipment, was noted. Impacts were overwhelmingly positive. Improved temperatures and reduction of drafts were immediately associated with the installation of doors and windows. Benefits of installing screens to ward off insects in the summer were also noted. Problems were reported in some facilities. Some were related to the work of the contractor. Some window frames shrank following installation and cracks appeared. Problems with insufficient ventilation, increased humidity, large and difficult to reach windows (for cleaning purposes) were reported. Contractors were called back and problems were resolved under the guarantee period. Some of the lights were reported to have burned out prior to the end of the warranty period. Interviewees stated some preferences with the design of lamps. 26 Administrators associated the improvements with reduction in absenteeism, better health, less complaints with eyesight and overall better environment for children to learn and teachers to teach. In hospitals, administrators especially appreciated the better working conditions due to improved lights, and noted the impact of comfortable warm environments on improved moods and behaviors of patients. The social survey also commented on the process of work, particularly for installing windows, doors and lights which were undertaken within buildings. The survey recommended that more interaction with users is needed throughout the design as well as implementation of the works in order to take their views into account. Timing of the works is important. While it was attempted to finish the works in the summer, particularly in schools, and before the beginning of the cold season, this was not always possible either due to delays or because of the necessity to finish the work. Overall contractors were reliable and efficient, yet in some cases, some were called to finish the work and remove the remaining debris. With regard to the Residential Gas Connections Component, the survey found that 60% of the households used natural gas for heating purposes during the 2012/2013 season. Almost all homes (99.2%) use gas for cooking. The average annual cost of heating with gas for similar traditional size homes is reported to be the lowest at BYR1.0M vs. a cost of BY1.4M for wood. This is due to the highly subsidized gas prices for households in Belarus. Cost of heating with gas was acceptable to respondents. Owners of private houses are more likely to prepare their homes (internal piping and equipment) than residents of state or company owned homes. There is overall satisfaction with the results due to convenience and ease of use (cleaner house, user friendly equipment). Eighty eight percent of respondents were satisfied with the quality of the installed equipment and services. 27 Annex 5-A: Voices from the Chernobyl affected area of Belarus: Beneficiary reactions to improvements in energy efficiency activities Head of Gomel hospital: “It became warmer and lighter, and we have managed to save budget funds. Compared to the time when we didn't have the new windows and lighting, we are now saving 15 to 20 percent. Thanks to the project, the hospital had a surplus that is being used to buy even more energy efficient windows, and make other improvements, such as new sitting areas and gardens for veterans and other patients. “ Principal of Gomel School: “The temperature in the classrooms dropped to 12º C; children sat in the classrooms in their jackets; and 70 percent of the windows were so badly broken that it was impossible to wash them. “ Teacher of Gomel School: “That was the last cold winter inside school. Old windows and doors have been replaced with new and insulated ones, making school warmer and quieter. Traffic noise and other outside sounds no longer disrupt students' concentration. State Standard Committee’s EED: “Certainly, the ecological aspect is very important as these are the affected areas. And the reduction in emissions is considerable – it’s twofold. We bring down the emissions and so help rehabilitate the area…” A resident of Lesnoe settlement: “I myself never expected it could be done so quickly and free of charge. I wish the gas connection was done earlier when we were young” Gas boiler operator, Chausy boiler house: “The boiler house was commissioned last autumn and before that it was just horrible, by early spring all the snow around us was just black. The boiler house has modern equipment, it’s fully automatic, and we’re able to save a lot of fuel. It’s clean, it doesn’t smell of gas and my working conditions are perfect… “ Hospital Chief Physician: “At our hospital, a boiler house was built and windows and doors were replaced. Previously, the heat losses amounted to 15% from each window. How was it possible to keep the building warm if all the heat escaped outside?” Hospital nurse: “Prior to retrofitting the windows were kept in place with two nails. When they needed washing, we took out the windows, washed them and then put them back in place."” The College of Consumer Services in Gomel: “I would like to single out the assembly hall and the gym: the temperature would never go above 15 degrees in there in the wintertime, and it was impossible to have classes there. Whenever events were held in the assembly hall, the window blinds would dangle, as if in the wind. The wind used to blow inside.” A college in Gomel: “… in the winter it was very cold in here, especially in the hallway. There were times when students had to put on their winter clothes inside the building. Naturally, it is impossible to work in such conditions. Some would even put on their gloves. Last winter we did not have any issues of that kind - everyone left their clothes in the cloakroom, it was warm and nice!” A School in Gomel: “According to the number of doctor’s notes, in the course of this school year we have had 1,558 cases of sickness among a total of 930 students. In the school year preceding 28 the replacement of windows – in 2011/2012 – this figure exceeded 2,000 with the same total number of students.” A hospital in Selets: “With the new windows, firstly, the temperature in here rose by about 4 degrees right away, so that’s very good. Secondly, the airing has become much better.” School in Rechitsa: “Firstly, the sound insulation is very good – we get less noise from the street, which means less distraction for the kids. Also, there are no more draughts in here. In the past, children used to be reseated farther away from the windows, and in order to do that their desks had to be moved close together, so sanitary standards had to be infringed on. Now, things have become safer – in the past, whenever the wind blew, a window frame would swing open or even pop out sometimes.” An orphanage in Rogachev: “The building dates back to 1968, so one can imagine what kind of windows we used to have here. They hadn't been replaced since the construction of the building. Naturally, due to the influence of low temperatures and due to the fact that it had been a long time, the windows didn’t perform their function. When we dismounted the windows and drew up an inspection report in which their condition was indicated, it turned out that 90 percent of them were in bad shape.” Secondary School in Stolin: “I have worked for the school for 15 years already, and I remember that in the past children used to walk around the school wearing their mittens and outerwear. We couldn’t even dream of being able to wear light shoes and blouses in school in the wintertime. Now we can do it. We understood it right after the windows were replaced. Last April, when the heating season was over, I made some calculations and ended up with [heat savings of] 19.5 percent compared to the previous heating season.” Secondary School in Stolin: “Prior to the replacement of windows it was very cold here and in the entire school building. The temperature in my room used to be 5 degrees at the most. When the windows had been replaced, it began to feel warmer. When the walls had been done, the temperature in my room came up to 30 degrees - well, to 26 – 27 degrees, the way it should be in the first-aid room. But before that it was very cold in my room… Also, it’s warm in the bedrooms now, so the children can get good sleep. We maintain the proper temperature regime in there (up to the 5th grade, students sleep in the school). So now we can work.” 29 Annex 5-B: Photos from the Chernobyl affected area of Belarus: Project sites before and after energy efficiency improvements Below some photos of for the energy efficiency component: (i) boiler replacement, (ii) window replacement, and (iii) lighting replacement. Boiler Replacement Old Boiler House in 2006 Modern gas-fired boiler house 2010 Boiler Replacement 30 Window Replacement Old Windows 2005 New Windows 2010 Lighting Replacement Old School Lighting 2005 New School Lighting 2010 31 Annex 6. Stakeholder Workshop Report and Results (Not Applicable) 32 Annex 7. Summary of Borrower's ICR 1. Rationale for the Project and Bank Involvement The Chernobyl accident affected approximately 2.5 million people of the 10.5 million population, and about 20% of the area of Belarus. In addition to the economic hardships brought by the transition to the whole post-soviet region, the people living in the Chernobyl affected areas of Belarus had to deal with impacts of radioactive contamination, including health consequences and related anxieties, depressed economic development and elevated levels of poverty. The achievement of the main objective of rehabilitation – real economic recovery and sustainable development – required the improved national approaches and international assistance. In the context of economic constraints, the country needed to raise external loans to address the economic and social problems. The Bank’s involvement was intended to strengthen a dialogue between the Government and the Bank on the important issues in social and energy sectors in the Chernobyl affected areas. 2. Project Development Objective The Project aims to provide the population residing in the Chernobyl affected area with energy efficient and reliable heat and hot water services in order to improve their living environment. The Project contributed to the objectives of the Country Assistance Strategies (CAS) for FY02- FY04 and FY08-FY11which aimed to improve the living standards of the Belarusian population by addressing social and environmental risks that affect the most vulnerable population categories. The Project also supported the CAS in areas involving energy efficiency and Global Public Goods, where benefits can accrue not only to the Belarusian population, but to the rest of the world as well. Improving living standards of the population and increasing energy efficiency in Belarus remain major objectives of the World Bank Group ongoing Country Partnership Strategy (CPS) for FY14-2017. 3. Project components Component I: Energy Efficiency Improvements (а) upgrading or replacement of communal heat production and distribution equipment including replacement of old and inefficient boilers; replacement of old pipelines, modernization of heat substations, replacement of building level heat regulation equipment and heat meters; (b) improvement of thermal insulation including through replacement of windows, insulation or replacement of walls and roofs, installation of new energy efficient lighting systems in public buildings including hospitals, schools and other social institutions. Component II: Residential Gas Connections (а) extension of street pipes and connection to individual houses including installation of the required equipment; and (b) installation of heating equipment inside individual houses including heat boilers, gas cookers, gas meters and pressure regulators. Component III: Project Implementation and Management Support 33 (а) design of the expected Project investments, public information campaign and supervision; (b) financial management, procurement, monitoring and evaluation and training. Table 3. Actual Project Costs at Completion (US$ thousand) № Project Components Original Additional Original Loan + Actual Costs Loan Financing Additional Financing А Energy Efficiency Improvements 1 Optimization of Heat 29,915 16,500 46,415 41,466 Distribution Systems 2 Replacement of Windows 8,760 6,800 15,560 31,174 and Thermal Insulation of Buildings 3 Installation of Energy- 8,782 1,600 10,382 6,693 Efficient Light Fixtures Total 47,457 24,900 72,357 79,333 B Residential Gas Connections 1. Residential Gas 8,451 3,600 12,051 10,884 Connections Total 8,451 3,600 12,051 10,884 С Project Implementation and Management Support 1 Technical Consultant’s 4,479 1,300 5,779 1,332 Services 2 Financial Audit 80 60 140 79 3 Social Survey 93 80 173 28 4 PMU Training 20 5 PMU Costs 279 60 339 9 6 Bank Commission 11 7 Front End Fee 125 75 200 200 Total 5,056 1,575 6,631 1,679 TOTAL Project Costs 60,964 30,075 91,039 91,896 34 Table 4. Project Financing Plan (US$) Original Loan + Original Loan Additional Financing Additional Actual Costs Financing 10,964,000 75,000 11,039,000 11,896,000 Government 50,000,000 30,000,000 80,000,000 80,000,000 World Bank 60,964,000 30,075,000 91,039,000 91,896,000 TOTAL 4. Main Beneficiaries by Project Components The main beneficiaries of the Project were the users of the social sector facilities: students, teachers, patients, orphans, the elderly and disabled, and administrators and employees of the institutions as well as residents of the districts located near the upgraded (retrofitted) heat supply facilities. Secondary beneficiaries were regional and municipal governments and sector institutions benefiting from the savings generated by reduced energy costs. Gas connection works were performed in small towns and villages located near gas pipelines, and the beneficiaries were the population of these communities. Table 5. Number of Beneficiaries by Oblasts and Components Mogilev Gomel Brest Total Component 1 (boiler houses, co-generation units, heat supply networks, windows, 98,785 121,778 30,206 250,769 thermal rehabilitation, light fixtures) Component 2 (gas 2,238 1,611 1,156 5,005 connections) 101,023 123,389 31,362 255,774 TOTAL 5. Project Preparation The Project was the first step in the implementation of the findings of the Chernobyl Forum held in September 2005 and emphasized the need to respond to the social and economic consequences of the Chernobyl accident as a means to provide the confidence and support to the affected communities to focus on improving their living environment. The Project activities were urgently required given the deteriorated state of buildings and of energy infrastructure due to years of lack of maintenance or replacement. 35 The Government requested the World Bank’s assistance in connecting individual houses to the existing gas pipelines as a measure to avoid the burning of contaminated wood in individual house stoves. Wood was widely used in Belarus as a domestic fuel, primarily in rural areas. Wood stoves were used in 25% of houses located in small towns and in 75% of houses located in villages. During the heating season (7 months) one household used 6-9 m3 of firewood which produces 69 kg of potentially contaminated ash. Technical analysis: The Energy Efficiency Department (EED) collected and prioritized a list of proposals for energy efficiency measures to be implemented in the social sector buildings. The project included rehabilitation or replacement of old and worn out boilers in existing heating plants with modern boilers, introduction of small scale combined heat and power plants, and replacing windows, leaking roofs and roof insulation, and installation of energy efficient lighting in schools and hospitals. These investments were traditional and proven interventions that address inefficiencies and waste that occur in old and outmoded heat supply systems. They were designed to provide direct benefits in the form of better services to the consumers, and to improve efficiencies and reduce costs of energy production. Belarus had traditionally undertaken gas supply projects and had the necessary capacity to implement and supervise such activity. The Beltopgas State Production Association and its affiliated gas supply organizations had the technical and staffing capacity to act as Employers in the projects dealing with design, construction and reconstruction of gas supply facilities. Environmental Management Plan Implementation: The Environmental Management Plan (EMP) was developed to address standard environmental aspects of energy efficiency improvements and residential gas connections as well as potential radioactive impacts during the implementation of the project activities in the Chernobyl affected areas of Belarus. The EMP requirements were implemented as follows: (i) the technical part of a contract included environmental regulations and standards that the Contractor was guided by in developing a detailed design, and (ii) construction and rehabilitation of buildings was performed in accordance with a design approved under the established procedure and in compliance with the environmental requirements, fire safety, construction requirements, etc. Detailed design included the section “Environmental Protection Activities” which aimed at: (i) preventing adverse environmental impacts of the construction works; (ii) designating a site for stockpiling (landfilling) construction and processing wastes, as well as the waste management methods based on best available techniques; and (iii) removing, saving and using the fertile soil layer during the construction works. Detailed design was subject to a state expert appraisal which included environmental appraisal. The environmental management and site territory improvement activities were subject to supervision. At commissioning stage, the acceptance committee had access to opinions issued by the state expert appraisal board and the environmental expert appraisal board, as well as the site environmental passport (certificate). 36 The available technical regulatory framework of the Republic of Belarus addressing environmental management activities makes the implementation of contracts and commissioning of facilities clear and rules based. The Law of the Republic of Belarus No. 122-Z “On Radiation Safety of the Population” dated January 5, 1998 facilitates implementation of a unified state policy in this area. State agencies and organizations take action to ensure radiation safety within the bounds of their competence as follows: (a) approve and carry into effect safety norms, rules and hygienic standards; (b) exercise state safety supervision; (c) conduct radiation monitoring; (d) create a unified state system for control and accounting of radiation doses received by individual members of the public; and (e) ensure functioning and execution of state radiation safety programs. 6. Project Implementation Implementation Arrangements: The Chernobyl Impact Mitigation Committee and after Government re-organization its successor, the Department on Chernobyl Impact Mitigation of the Ministry of Emergency Situations, was designated as the National Project Coordinator. The Department was responsible for the general supervision and oversight of the Project activities, coordination of the inputs of the republican government bodies, local executive and administrative bodies and control of the targeted use of the loan. The coordinators (deputies) of the National Coordinator were the representatives of the EED of the State Standardization Committee and of the MoE. The EED was responsible for the general implementation aspects of the Project, staffing and provision of resources required for the implementation of the Project in accordance with the Operational Manual. The EED had the necessary linkages to the ministries and Oblasts to implement the project. The PMU, subordinate to the EED, was responsible for day-to-day management of the Project, procurement of goods, works and services for energy efficiency improvements and gas connection, compliance with environmental management plan, monitoring and evaluation, and reporting to both the EED and the Bank. The PMU worked closely with the staff of the local government and representatives of the sector ministries to ensure that the project was implemented on time. A local engineer was hired to cover each oblast and to monitor, report and supervise project progress and performance of contractors. The PMU was supported by a coordinator from the MoE which retained the responsibility for Component II: Residential Gas Connections. The MoE was responsible for the preparation of design documentation of the residential gas connections and the technical specifications of the bidding documents. The PMU’s responsibilities for the Residential Gas Connections component were to organize the procurement and disbursement procedures in accordance with Bank requirements. The MoE participated in the evaluation of bids for the Residential Gas Connections component. Issues during the implementation period: At the initial stages of implementation of Original Loan the disbursement rates were low due to factors which led to delays in the tendering process, cancellation of tenders and retendering such as: 37  the bidders, who participated in Bank-supported projects for the first time, did not have experience in preparation and execution of contracts in accordance with the World Bank’s requirements, particularly in collaboration with the independent technical consultant  low awareness of potential bidders (Belarusian and foreign) about the tenders including about the electronic and print media where the notifications about the tenders were published as well as about the specifics of ICBs held in accordance with the requirements of the World Bank’s standard bidding documents  poor preparation of bids by the bidders who lacked experience of bid preparation in accordance with the World Bank’s rules Thanks to several joint reviews of the implementation progress of the Original Loan by the Bank and the Government, weaknesses affecting the implementation progress were identified and addressed and the implementation was smooth and efficient. Staff Development: PMU staff was financed by the Government at the salary rates prevailing in the budget sector. The PMU management took efforts to improve staff motivation and incentives and prevent staff turnover. Bonuses and increased additional pays (for example, for complexity and intensity of work) were introduced. Given the increased work load, also due to the launch of new project preparation, the PMU hired additional staff including procurement, financial management/disbursement and technical specialists. Involvement in three World Bank supported projects made it possible for the PMU to build an adequate project implementation capacity and improve staff qualifications. In 2007 through to 2013, PMU specialists attended ten training courses and workshops organized by the World Bank, which allowed them to improve their skills in financial management and procurement. Over the past few years, the PMU staff, on request of the Bank and the Government, conducted several workshops for staff of other PMUs for Bank-supported projects in other sectors. Impact of Global Financial Crisis: The situation at the foreign exchange market in Belarus worsened in 2011. Sharp depreciation of BYR against USD (1.5 times) adversely affected the domestic bidders whose bids were in BYR. Part of equipment under these contracts was expected to be imported; domestic contractors, who submitted their bids in the local currency, were not able to honor their contracts due to the devaluation. The winning bidders refused to sign contracts in BYR in accordance with the terms of their bids. In accordance with ICB rules, such a refusal entails disqualification of bidders and forfeiture of the bid security. This situation implied complications and delays in the Project implementation and disbursement of loan proceeds. On agreement with the Bank, these tenders were cancelled without disqualification of the bidders refusing to sign contracts in BYR in accordance with the terms of their bids. The bidding documents were revised to include the provision permitting local bidders to submit bids in foreign currency with the contract to be signed in this currency with subsequent payment in BYR at the official exchange rate of the National Bank of Belarus as of the payment date. An invitation to bid was furnished to the same bidders who requested the bidding documents in the original tender. The period allowed for the preparation of bids was shortened to 3 weeks instead of standard 6 weeks. 38 Another difficulty arose in tenders for works on window replacements and laying gas pipelines conducted in accordance with an ICB procedure based on the Standard Bidding Documents “Procurement of Works: Smaller Contracts”. The accepted procedures in Belarus do not provide for submission of bids in foreign currency for ICBs. Therefore, it was impossible to introduce a provision allowing local bidder to submit bids in foreign currency, as stated above. To solve this problem, the Bank recommended the use the procedure of National Competitive Bidding which made it possible to add the above-referred provision on the foreign currency to the bidding documents. 7. Monitoring and Evaluation In the PMU, monitoring of key project indicators was conducted by specialists from the technical department through recording and analyzing data for the commissioned subprojects (capacity, saved heat and electric power, length of installed gas pipelines, etc.). Information on the monitored indicators was received from (i) the technical part of the bidding documents, (ii) contracts, (iii) acceptance certificates, and (iv) employers (number of beneficiaries, number of households connected to gas pipelines, etc.).The information was analyzed, aggregated and furnished to the World Bank twice per year in the form of a cumulative report on the monitoring indicators. Table 6. Monitoring Indicators (cumulative from the beginning of the project) Item Unit End-Project Actual End-Project Target Estimated total number of Number 250,769 250,000 beneficiaries reached with improved energy efficient services Estimated amount of heat energy MWh/year 248,736 158,000 saved annually Estimated amount of electricity saved MWh/year 99,487 12,800 annually* Estimated reductions in pollutants [tCO2e] 121,147 41,350 Total number of boiler houses number 32 33 renovated Total number of buildings rehabilitated number 443 365 Total number of buildings with number 145 118 window replacement Total number of buildings with number 298 247 lighting system replacement Total number of houses connected to 5,005 4,000 number gas Total length of street gas pipelines Km 219 200 installed * The target for electricity saved annually was surpassed because the method of calculation was changed to take into account saving from new boiler-houses and pumps and not only lighting fixtures. 39 Social Assessment by a sociological company SATIO: The survey of Component I: Energy Efficiency Improvements in social sector institutions identified the following results:  the microclimate in the majority of the facilities at which modernization took place changed for the better (no drafts, comfortable temperature, good lighting)  as a result of window replacement, warmth is preserved, there are no drafts and good ventilation is secured  the main effect from lighting replacement is the improvement of working conditions and electric energy saving  repair of the facades is estimated positively, improvement of the conditions and comfort of the employees of the modernized institutions are also mentioned (constant temperature conditions, positive aesthetic effect) The survey of Component II: Residential Gas Connections led to the following conclusions:  more than 50% of households use natural gas as fuel; 99.2% of households use natural gas for cooking; almost all households (95.5%) are supplied with hot water;  70% of households regard the annual expenditures on heating as moderate and affordable;  main reasons for gas connection: warmth and cleanness in houses; gas is a cheaper fuel; gas connection was free;  most households positively estimate the quality of works on installation of gas equipment and the equipment as such and are satisfied with installation of gas equipment in their houses;  level of satisfaction with the use of gas as fuel and gas connection in general is high;  level of household awareness about radiation risk associated with the use of ash and local solid fuels is fairly low (below 50%);  about 1/3 of respondents estimate the costs of house preparation for gas connection as “very expensive” and “expensive” and many households needed financial support to equip a house for gas connection for heating and hot water supply;  the main impediments for gas connection of households: no money, no time, a house is not suitable for gas connection. Monitoring and Evaluation by RUE Belgosproject: The PMU requested the firm RUE Belgosproject to conduct a technical survey of the investments undertaken under the project to verify the energy and environmental benefits of the Project. The survey was conducted in facilities that were in operation for at least one year. The survey confirmed the environmental impact and energy efficiency targets suggests that PCRP objective – reduced energy consumption and reduction of GHG emissions, improvement of comfort level for users of health and education facilities and livelihoods in contaminated areas – has been achieved. The annual savings of fuel and energy resources for the Original Loan and the Additional Financing totaled 67.55 thousand tons of oil equivalent. The aggregate reduction of СО2 emissions is estimated at 127.43 thousand tons. 40 Table 7. Achieved results by oblasts per year Oblast Reduction in fuel and Reduction of СО2 energy consumption, toe emissions, tons The Brest Oblast 18,289 33,462 The Gomel Oblast 31,721 61,943 The Mogilev Oblast 17,541 32,028 Belarus 67,551 127,433 Table 8. Achieved results by oblasts and the Project Components Residential Gas Energy Efficiency Improvements Connections Boiler Replacement of houses, heat Length of Number Oblast windows and distribution Installation of energy- gas of thermal networks, efficient light fixtures pipeline, househo renovation of co-generation km lds buildings units Toe 17,937 297 55 The Brest СО2, 33.5 1,156 Oblast 32,825 542 95 tons The Gomel Toe 29,324 1,668 729 79.0 1,611 Oblast СО2, tons 57,645 3,053 1 245 The Toe 16,180 801 560 Mogilev СО2, 106.5 2,238 29,607 1,467 955 Oblast tons Toe 63,441 2,766 1 344 Belarus СО2, 219 5,005 120,076 5,062 2 295 tons The monitoring results for environmental and energy efficiency benefits from energy saving activities for the entire Project broken down by Components are summarized in Tables 9, 10, 11and 12. Table 9. Rehabilitation of boiler houses The Gomel The Mogilev The Brest Item Unit Total Oblast Oblast Oblast Number of renovated # 15 14 3 32 facilities Annual amount of electric thousand 48,827 20,641 28,829 99,478 energy saved kWh 41 Annual saving of Toe 27,507 15,434 16,813 59,754 equivalent fuel Reduction of СО2 Tons 50,342 28,248 30,767 109,357 emissions Table 10. Window replacements The Gomel The Mogilev The Brest Item Unit Oblast Oblast Oblast Total Number of renovated # 64 57 18 139 facilities 44,477 m2 83,445 m2 Total area of windows (windows) and (windows) and m² 32,200 6,768 and doors replaced 2,324 m2 (heat 2,324 m2 (heat insulated walls) insulated walls) Annual amount of Gcal 5341.9 2576.3 487.7 8405.9 heat energy saved Annual saving of Toe 13,96 704 209 2,309 equivalent fuel Reduction of СО2 Tons 2,556 1,288 383 4,227 emissions Table 11. Installation of energy-efficient light fixtures Item Unit The Gomel The Mogilev The Brest Total Oblast Oblast Oblast Number of renovated # 94 114 22 230 facilities Total number of installed energy- # 68,852 36,389 6,231 11,1472 efficient light fixtures Annual amount of thousan 1,257 963 95 2,313 electric energy saved d kWh Annual saving of toe 342 262 26 630 equivalent fuel 42 Item Unit The Gomel The Mogilev The Brest Total Oblast Oblast Oblast Reduction of СО2 tons 587 448 44 1,080 emissions Table 12. Residential gas connections Item The Gomel The Mogilev The Brest Total Oblast Oblast Oblast Gas connections 7 9 3 19 Length of street gas pipelines 79 106 34 219 (km) Number of houses (apartments) 1,611 2,238 1,156 5,005 to be covered by gas connections 8. Safeguard and Fiduciary Compliance Environment: The environmental protection measures were undertaken in strict compliance with the Environmental Management Plan (EMP) which was developed for the Project and consisted of two sections. Section 1 of the EMP covered standard environmental aspects of the projects describing energy efficiency improvements and residential gas connection activities. The safety and environmental impact mitigation measures were included in the contracts. No environmental problems were identified during the Project implementation and EMP requirements were observed. Section 2 of EMP – Radiation Management Plan – dealt with potential radiation impact during the implementation of the proposed project activities in the Chernobyl affected areas of Belarus. The Radiation Management Plan was prepared with the assistance of IAEA expert who had worked in Belarus and other affected countries since the Chernobyl accident. Except the use of potentially contaminated wood in wood burning boilers and disposal of ash, the proposed project activities did not anticipate considerable radiation impacts and did not require additional mitigation measures beyond routine measures. The main requirements of the impact mitigation plans included the use of filtrating masks and water suppression of dust in order to minimize even the low irradiation doses. Procurement: Procurement for the proposed project was carried out in accordance with the World Bank’s Guidelines “Selection and Employment of Consultants by World Bank Borrowers” (dated May 2004 and revised in October 2006), Guidelines “Procurement under IBRD Loans and IDA Credits” (dated May 2004 and revised in October 2006) and the provisions stipulated in the 43 Legal Agreement. For each contract financed by the Loan, the different procurement methods or consultant selection methods, the need for pre-qualification, estimated costs, prior review requirements and time frame were agreed between the Borrower and the Bank in the Procurement Plan. The Procurement Plan was updated annually or as required to reflect the actual project implementation needs. Procurement of Works: Works included installation of new modern boilers or cogeneration equipment, rehabilitation of heat distribution systems, replacement of windows, thermal renovation of buildings, civil works for laying gas pipelines and installation of household equipment. Procurements through competitive bidding for the performance of these works were divided into lots at least by oblasts to expedite implementation and to enable local contractors to meet the financial requirements. Procurement of Goods: Goods procured under the Project included lighting equipment for the public buildings and office equipment and furniture for PMU. Procurement of Consulting Services: The following methods of selection of consultants were used: (a) Quality and Cost Based Selection; (b) Least Cost Selection procedure was used for selection of an auditor to carry out the audit of the Project financial statements; (c) Selection Based on Consultants’ Qualifications was used for contracting the technical consultant under the Additional financing. Issues in implementation of the procurement process and its impact on the project are described under the section on implementation above. Financial management: Budget planning for loan proceeds disbursements was done quarterly and includes the following procedures: (i) preparation of the detailed procurement plan and agreement with the World Bank; (ii) quarterly disaggregation of the budget based on payment schedules endorsed by Director of the PMU and approval of EED; and (iv) the accounting system allows to input and to produce information on all financial transactions under the loans. The PMU prepares unaudited interim financial reports. In addition to daily internal control procedures, appropriate use of funds was periodically inspected in accordance with the Belarusian legislation. EED conducted random inspections to minimize the risk of improper use of the Project funds. Financial audit was conducted annually by an independent auditor acceptable to the Bank and selected on a competitive basis and their reports were submitted to the Bank timely. All Project reports received the unqualified auditor’s opinion. Delayed provision of co-financing and their reflection in PMU accounting records was highlighted. These problems were resolved as confirmed by the auditor’s report for 2011. 9. Post-Completion Activities Energy Efficiency Activities: In 2010 the Council of Ministers of the Republic of Belarus adopted the Strategy of Energy Potential Development focused on (i) adoption of new energy efficient technologies in all economic sectors and technological processes, and (ii) modernization of the existing equipment with reduction of specific fuel consumption by 10% by 2015 and 15% by 2020. The Law “On Energy Efficiency” has a set of the national, sector and regional energy 44 saving programs and pursues a policy on improving efficient use of fuel and energy resources and addressing organizational, technical, economic and regulatory challenges in priority areas of energy saving. The strategic objective in energy efficiency is the reduction of GDP energy intensity by 50% in 2015 relative to the 2005 level and by 60% - by 2020. Energy efficiency activities are reflected in the Republican Energy Efficiency Program for 2011-2015 to be financed from: (i) enterprise funds; (ii) republican budget; (iii) sector innovation funds; (iv) republican and regional energy efficiency programs; (v) local budgets. Efforts to raise awareness about energy saving and gas connection continue. Energy efficiency has become part of secondary education and pre-school education curricula. Activities for mitigation of the Chernobyl impacts: In 2010 the Council of Ministers approved the State Program for 2011-2015 and until 2020 which aims to further reduce adverse health impacts, shift focus toward sustainable socioeconomic development in compliance with the radiation safety requirements. Residential gas connection is one of the priorities to reduce radiation for households. It is intended to improve environmental situation through the use of clean fuels. The State Program provides for gas connection of 21,019 houses (apartments) in the period 2011-2015 and laying 2008.3 km of gas distribution networks. The respective funding totals BYR 404 769.2 million. Regulatory Framework: The framework documents addressing energy efficiency in the Republic of Belarus are: (a) the Directive of the President of the Republic of Belarus of 14 June 2007 № 3 “Saving and economization are the key pillars of economic security of the state” (National Register of Legal Acts of the Republic of Belarus, 2007, N 146, 1/8668); and (b) the Edict of the President of the Republic of Belarus of 17 September 2007 N 433 “On Concept of Energy Security of the Republic of Belarus”. 10. Achievement of Project Objectives Rating: Satisfactory The rating is based on the following: (a) the Project development objective has been met in full; (b) the Project has been timely and relevant; (c) the Project has been properly implemented; and (e) the efficiency targets have been achieved. At the end of the Project, the project indicators were met and exceeded. Social impact: (a) over 250,769 beneficiaries (local residents, personnel, patients, doctors, schoolchildren, teachers, administrative personnel, etc.) reached with better-quality energy efficient services; (b) improved comfort in 443 buildings due to replacement of windows and lighting systems; (c) luminance increased from 200-300 lux to 500 lux and over in 298 buildings; (d) improved living conditions in the heat supply area served by 32 renovated boiler houses; and (e) improved living conditions in 5005 households (219 km of street gas pipelines installed) due to connection to gas and installation of heating and hot water equipment. 45 Energy Efficiency Impact: (a) Amount of saved electric power - 99,487MWh/year; (b) Amount of saved heat – 248,736 MWh/year; (c) Amount of saved fuel – 62,695 toe; and (e) Reduction of emissions (CO2) – 121,147 tons/year. 11. Assessment of Bank and Borrower Performance (relating to design, implementation and outcome issues) Assessment of Borrower Performance Rating: Satisfactory The Government was committed to the Project objectives at all stages of preparation and implementation. The Project was a part of large-scale state program on energy efficiency. Oversight and supervision of energy saving measures responsibilities rested with the EED, and day-to-day operations of the Project were managed by the PMU. They coordinated the input of the involved ministries, local and oblast authorities. Assessment of Bank Performance Rating: Satisfactory The World Bank played an active role and provided helpful and efficient assistance at all stages of the Project. The Bank experts are sufficiently qualified, experienced and skilled to help the Borrower to achieve the agreed objectives. All questions were clarified at the high level. Actions of the World Bank’s management have been very detailed and clear. World Bank team met with the PMU and the Government officials on a regular basis. Efforts toward achieving the Project objectives and addressing eventual problems have been timely and, in some cases, anticipatory. 46 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders Not applicable 47 Annex 9. List of Supporting Documents 1. Project Concept Note (May 20, 2005) 2. Project Appraisal Document (March 22, 2006) 3. Loan Agreement (April 19, 2006) 4. Project Paper on a Proposed Additional Financing Loan for the PCRP (August 26, 2010) 5. Loan Agreement (Additional Financing for PCRP) (October 11, 2010) 6. Environmental Analysis and Management Plan (August 2005; November 2009) 7. Social Survey and Analysis (August and October 2005; October 2010; September 2013) 8. Monitoring and Evaluation by RUE Belgosproject: A technical survey of the investments to verify the energy and environmental benefits (September 2013). 9. IAEA Radiological Management Plan (October 2005) 10. Project Operational Manual (2005; 2010) 11. Aide-memoires (spanning December 2004 through October 2013) 12. ISR Reports (numbers 1 through 14) 13. Country Assistance Strategies, FY02-04, February 2002; and FY08-11, 2007 14. Country Partnership Strategy, FY14-17, June 2013 15. European Commission: Optimal Management Routes for the Restoration of Territories Contaminated during and after the Chernobyl Accident, draft final report, March 1997 16. Chernobyl’s Legacy: Health, Environmental and Socio-Economic Aspects. Proceedings from the Chernobyl Forum, Vienna, Austria (September 2005). 17. Twenty-five Years after the Chernobyl Accident: National Report of the Republic of Belarus (2001) 48 24°E 26°E 28°E 30°E 32°E 34°E BELARUS POST CHERNOBYL L AT V I A To Rezekne RECOVERY PROJECT 56°N To To 56°N Daugavpils Nevel CESIUM 137 CONTAMINATION LEVELS: BELARUS 1480 kBq/m2 40 Ci/km2 Braslau 555 kBq/m2 15 Ci/km2 185 kBq/m2 5 Ci/km2 LITHUANIA Navapolack Poloysk ina zv 37 kBq/m2 1 Ci/km2 oy av aD od Vitebsk To Utena VITEBSK Za kh EVACUATED AREA To Postavy Hlybokae Vilnius Lepel To DISTANCE FROM CHERNOBYL Casniki Smolensk (in Kilometers) RUSSIAN SELECTED CITIES FED. AND TOWNS To Vilnius Viliy a Orsha RUSSIAN OBLAST' CAPITALS Vilejka Molodechno Talacyn F E D E R AT I O N NATIONAL CAPITAL To Borisov Gorky Alytus Be r 54°N RIVERS 54°N ez To ina Mogilev Roslavl Lida MAIN ROADS MINSK Berazino Grodno Ne ma Krichev RAILROADS MOGILEV n OBLAST' BOUNDARIES zh MINSK Slavharad So Kascjukovicy INTERNATIONAL BOUNDARIES To Bialystok GRODNO Osipovichi Volkovysk Slonim Bobruysk Baranovichi Dovsk 22°E Slutsk To Klintsy To Zlobin Zabalocce Bialystok Ivattsevichi Soligorsk D Bjaroza Svetlahorsk Gomel' To Klintsy BREST GOMEL Rechitsa 52°N POLAND Kobrin Luninets Micasevicy Dobrus Kalinkavicy Brest 52°N To Biala Dneprovsko- Pinsk yat Mozyr Podlaska Bugskiy Canal Turov Prip To Hojniki Chernigov Stolin To To Sarny Kovel' To To Chelm Sarny To Ovruch 0 25 50 75 100 Kilometers 20 0 K M 15 0 K M 10 0 K M CHERNOBYL NUCLEAR POWER STATION 0 25 50 75 Miles NOVEMBER 2005 This map was produced by the Map Design Unit of The World Bank. UKRAINE IBRD 34361 The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. KIEV 22°E 24°E 26°E 28°E 32°E