The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Power Sector Financial Recovery Program (P157571) EUROPE AND CENTRAL ASIA | Armenia | Energy & Extractives Global Practice | Requesting Unit: ECCSC | Responsible Unit: GEE03 IBRD/IDA | Program-for-Results Financing | FY 2016 | Team Leader(s): Abdulaziz Faghi Seq No: 5 | ARCHIVED on 24-Apr-2019 | ISR36364 | Created by: Hiwote Tadesse on 18-Mar-2019 | Modified by: Emil Zalinyan on 17-Apr-2019 Program Development Objectives Program Development Objective (from Program Appraisal Document) The proposed Program Development Objective is to support the Borrower’s efforts to ensure adequate and reliable electricity supplythrough improvement of the financial standing of the state-owned power generation companies and the private power distribution company. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Highly Satisfactory Highly Satisfactory Overall Implementation Progress (IP) Highly Satisfactory Highly Satisfactory Implementation Status and Key Decisions Implementation of all activities under the Power Sector Financial Recovery Program-for-Results, which is supported by the World Bank, is on track. The financial performance of the state-owned power generation companies (Armenian Nuclear Power Plant and Yerevan Thermal Power Centre) and the private power distribution company (Electric Networks of Armenia) has improved substantially from 2016 with neither entity experiencing cash shortages to cover operating expenses and meet their debt service requirements. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P157571 IBRD-86150 Effective USD 30.00 30.00 0.00 26.94 3.06 90% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P157571 IBRD-86150 Effective 27-Apr-2016 12-May-2016 19-Jul-2016 30-Jul-2021 30-Jul-2021 Program Action Plan Action Description Include the Program budget into the state budget for 2016. 4/24/2019 Page 1 of 10 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Source DLI# Responsibility Timing Timing Value Status Client Due Date 31-May-2016 Completed Completion Measurement Comments Include the Program review into the annual work-plan of the internal audit unit of the Ministry of Energy and Natural Action Description Resources. Source DLI# Responsibility Timing Timing Value Status Client Recurrent Yearly In Progress Completion Measurement Comments Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Substantial Substantial Substantial Sector Strategies and Policies Substantial Moderate Moderate Technical Design of Project or Program Low Moderate Moderate Institutional Capacity for Implementation and Sustainability Moderate Moderate Moderate Fiduciary Substantial Moderate Moderate Environment and Social Low Low Low Stakeholders Substantial Moderate Moderate Other Moderate Moderate Moderate Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes 4/24/2019 Page 2 of 10 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Total annual electricity supply by ANPP is maintained IN00682166 ►Total annual electricity supply by ANPP is maintained (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2300 GWh 719.7 GWh 2076.1 GWh 2300 GWh Date 01-Feb-2016 31-Mar-2018 31-Dec-2018 30-Jun-2021 The shortfall in total annual electricity supply in 2018 is due to lower generation during the months of Comments ongoing life extension works at ANPP Total annual electricity supply by YTPC is maintained IN00681948 ►Total annual electricity supply by YTPC is maintained (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1400 GWh 302.8 GWh 1384.1 GWh 1400 GWh Date 01-Feb-2016 31-Mar-2018 31-Mar-2018 30-Jun-2021 The small shortfall in the annual electricity supply by YTPC is due to longer (by 12 days) than planned Comments duration of the overhaul of YTPC CCGT turbine, which was carried out in August-September. Average interruption frequency per year in the project area is maintained IN00681949 ►Average interruption frequency per year in the project area is maintained (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.10 1.74 1.74 at least 1.1 Date 01-Feb-2016 31-Mar-2018 31-Dec-2018 30-Jun-2021 Comments IN00682167 Customers served in the project area (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 1,040,000.00 1,019,000.00 1,020,789.00 1,040,000.00 Direct project beneficiaries IN00681950 ►Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3,018,000.00 2,969,900.00 2,934,000.00 3,038,000.00 Date 01-Feb-2016 01-Apr-2018 31-Dec-2018 30-Jun-2021 Comments IN00682168 4/24/2019 Page 3 of 10 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Female beneficiaries (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 1,618,000.00 1,559,197.50 1,554,000.00 1,628,368.00 Intermediate Results Indicators by Results Areas Elimination of cash outflows of state-owned power companies for non-core business related reasons IN00682169 ►No new non-core business related expenditures, borrowing and lending incurred by ANPP (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 01-Mar-2016 30-Jun-2018 30-Jun-2018 31-Dec-2020 Comments Elimination of cash outflows of state-owned power companies for non-core business related reasons IN00682170 ►No new non-core business related expenditures, borrowing and lending incurred by YTPC (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 01-Mar-2016 30-Jun-2018 30-Jun-2018 31-Dec-2020 Comments Elimination of cash outflows of state-owned power companies for non-core business related reasons IN00682171 ►Liquidation of Haigasard (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Revaluation of assets is Revaluation of assets is Value No Liquidation i completed. completed. Date 01-Feb-2016 30-Jun-2018 30-Jun-2018 31-Dec-2020 Comments Elimination of cash outflows of state-owned power companies for non-core business related reasons IN00682172 ►Reduction of cash deficit of ANPP due to the Program (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 4/24/2019 Page 4 of 10 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Value 18.50 No deficit No deficit No deficit Date 01-Mar-2016 30-Jun-2018 31-Dec-2018 31-Dec-2017 Comments Elimination of cash outflows of state-owned power companies for non-core business related reasons IN00682173 ►Reduction of cash deficit of YTPC due to the Program (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 85.40 31.90 31.10 44.80 Date 01-Feb-2016 30-Jun-2018 31-Dec-2018 31-Dec-2020 Comments Reduction of expensive commercial loans, recovery of receivables and repayment of payable for gas IN00682174 ►Reduction of the principal amount of outstanding commercial loans of ANPP to be refinanced under the Program (million US$) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.50 8.50 8.50 Date 01-Feb-2016 30-Jun-2018 31-Dec-2018 31-Dec-2017 Comments Reduction of expensive commercial loans, recovery of receivables and repayment of payable for gas IN00682175 ►Reduction of the principal amount of outstanding commercial loans of YTPC to be refinanced under the Program (milion US$) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 4.60 4.60 4.60 Date 01-Feb-2016 30-Jun-2018 31-Dec-2018 31-Dec-2017 Comments Reduction of expensive commercial loans, recovery of receivables and repayment of payable for gas IN00682176 ►Recovery of ANPP’s receivables from ENA (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 15.00 15.00 15.00 Date 01-Feb-2016 30-Jun-2018 31-Dec-2018 31-Dec-2016 4/24/2019 Page 5 of 10 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Comments Reduction of expensive commercial loans, recovery of receivables and repayment of payable for gas IN00682177 ►Recovery of YTPC’s receivables from ENA (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 25.00 25.00 25.00 Date 01-Feb-2016 30-Jun-2018 31-Dec-2018 31-Dec-2016 Comments Reduction of expensive commercial loans, recovery of receivables and repayment of payable for gas IN00682178 ►Reduction of YTPC's gas payable under Contract referred to in Supplemental Letter No. 3 (in billion AMD) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 12.16 3.13 0.87 3.86 Date 01-Feb-2016 30-Jun-2018 31-Dec-2018 31-Dec-2020 Comments End-user tariffs reflecting changes of electricity supply costs IN00682179 ►Loss (profit) at the private power distribution company due to difference between actual and forecast cost of electricity purchased. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No profit (loss) at power No profit (loss) at power distribution company due distribution company to forecast cost of due to forecast cost of Value Yes No purchased electricity purchased electricity exceeding the actual exceeding the actual cost. cost. Date 01-Feb-2016 30-Jun-2018 30-Jun-2018 30-Jun-2021 Comments End-user tariffs reflecting changes of electricity supply costs IN00682180 ►Loss (profit) at YTPC due to US$/AMD exchange rate fluctuation driven changes to AMD denominated payments for natural gas. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No profit (loss) at YTPC No profit (loss) at YTPC due to change in gas due to change in gas Value Yes price caused by price caused by No fluctuation of AMD/US$ fluctuation of AMD/US$ exchange rate. exchange rate. 4/24/2019 Page 6 of 10 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Date 01-Mar-2016 30-Jun-2018 30-Jun-2018 31-Dec-2020 Comments End-user tariffs reflecting changes of electricity supply costs IN00682181 ►Percent of tariff-setting related questions and inquiries (gender-disaggregated) responded to by PSRC within stipulated service standards for response time (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 100% 100% 100% 100% Date 01-Mar-2016 30-Jun-2018 30-Jun-2018 31-Dec-2020 Comments Maintaining the generation capacity of the gas turbine at YTPC’s CCGT plant IN00682182 ►Overhaul of the gas turbine at YTPC’s CCGT plant (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The overhaul is expected The overhaul was Value n/a to be completed by end completed in Overhaul is c of 2018. September 2018. Date 01-Feb-2016 30-Jun-2018 31-Dec-2018 31-Dec-2018 Comments Disbursement Linked Indicators DLI_IND_TABLE ►DLI 1 DLI 1: Decision at the shareholder meetings of ANPP and YTPC, prohibiting the non-core business related expenditures, lending and borrowing by the above companies. (Output, 2,832,000.00, 100%) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 Value No decision Decision was made Decision was made -- Date 01-Feb-2016 31-Jul-2018 31-Jul-2018 -- Comments ►DLI 2 DLI 2: Liquidation of Haigasard (Output, 2,000,000.00, 75%) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 4/24/2019 Page 7 of 10 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Liquidation is Revaluation of assets is Revaluation of assets is registered by the Value Exists as legal entity completed completed authorized state agency Date 01-Mar-2016 31-Jul-2018 31-Jul-2018 -- Comments ►DLI 3 DLI 3: No new non-core business related expenditures, borrowing and lending incurred by ANPP (Output, 2,500,000.00, 76%) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 ANPP incurs non-core Value business related Yes Yes Yes expenditures Date 01-Feb-2016 31-Jul-2018 31-Jul-2018 -- Comments ►DLI 4 DLI 4: No new non-core business related expenditures, borrowing and lending incurred by YTPC (Output, 2,500,000.00, 76%) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 YTPC incurs non-core Value business related Yes Yes Yes expenditures Date 01-Feb-2016 31-Jul-2018 31-Jul-2018 -- Comments ►DLI 5 DLI 5: Reduction of principal amount of outstanding commercial loans of ANPP (in million US$) (Output, 4,260,000.00, 100%) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 Value 0.00 8.52 8.52 -- Date 01-Feb-2016 31-Jul-2018 31-Jul-2018 -- Comments ►DLI 6 DLI 6: Reduction of principal amount of outstanding commercial loans of YTPC (in million US$) (Output, 2,300,000.00, 100%) 4/24/2019 Page 8 of 10 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 Value 0.00 4.60 4.60 -- Date 01-Feb-2016 31-Jul-2018 31-Jul-2018 -- Comments ►DLI 7 DLI 7: Reduction of YTPC's gas payable under Contract referred to in Supplemental Letter No. 3 (in AMD) (Output, 4,982,000.00, 100%) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 Value 12,161,962.00 3,128,031.00 865,998.00 3,858,962.00 Date 01-Feb-2016 30-Jun-2018 31-Dec-2018 -- Comments ►DLI 8 DLI 8: ENA’s margin for each new tariff period fully reflects the loss (revenue) accrued due to difference between the forecast and actual cost of electricity purchased by ENA during the preceding tar (Output, 2,000,000.00, 70%) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 Value No Yes Yes Yes Date 01-Feb-2016 31-Jul-2018 31-Jul-2018 -- Comments ►DLI 9 DLI 9: Tariffs for YTPC and Hrazdan TPP for each new tariff period fully reflect the loss (revenue) resulting from difference between forecast and actual cost of purchased natural gas due to fluctuati (Output, 2,000,000.00, 70%) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 Value No Yes Yes Yes Date 01-Feb-2016 31-Jul-2018 31-Jul-2018 -- Comments 4/24/2019 Page 9 of 10 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) ►DLI 10 DLI 10: Electricity supplied by YTPC (Output, 4,551,000.00, 74%) Period between January 1, 2020, and December 31, Baseline Actual (Previous) Actual (Current) 2020 Value 1400 GWh 302.8 GWh 1384.1 GWh 1400 GWh Date 01-Feb-2016 31-Mar-2018 31-Dec-2018 -- Comments 4/24/2019 Page 10 of 10