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: IECE1 IBRD/IDA | Program-for-Results Financing | FY 2016 | Team Leader(s): Emil Zalinyan Seq No: 6 | ARCHIVED on 31-Oct-2019 | ISR39128 | Created by: Hiwote Tadesse on 28-Oct-2019 | Modified by: Emil Zalinyan on 31-Oct-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. As confirmed by the audit of financial statements of Yerevan Thermal Power Center (YTPC) and Armenian Nuclear Power Plant (ANPP) for 2018 neither entity has incurred any expenditures or borrowings, nor provided loans outside of its core business activities. Neither experienced 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 10/31/2019 Page 1 of 11 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) DLI Disbursement Achievement Disbursed amount in Disbursement % DLI ID DLI Type Description Coc DLI Amount Status Coc for DLI Loan: IBRD86150-001 DLI#1 Decision at 001 Regular USD 2,832,000.00 Fully Achieved 2,832,000.00 1% shareholder meetings DLI#2 Liquidation of Partially 002 Regular USD 2,000,000.00 1,500,000.00 1.3 % Haigasard Achieved DLI#3 No new non-core Partially 003 Regular USD 2,500,000.00 2,100,000.00 1.2 % busi expd of ANPP Achieved DLI#4 No new non-core Partially 004 Regular USD 2,500,000.00 2,100,000.00 1.2 % busi expd of YTPC Achieved DLI#5 Reduc of princ amt 005 Regular USD 4,260,000.00 Fully Achieved 4,259,595.50 1% of loan of ANPP DLI#6 Reduc of princ amt 006 Regular USD 2,300,000.00 Fully Achieved 2,300,000.00 1% of loan of YTPC DLI#7 Reduc of gas 007 Regular USD 4,982,000.00 Fully Achieved 4,982,000.00 1% payable of ANPP DLI#8 ENAs tariff margin Partially 008 Regular USD 2,000,000.00 1,600,000.00 1.3 % for each period Achieved DLI#9 Tariffs for YTPC Partially 009 Regular USD 2,000,000.00 1,600,000.00 1.3 % and Hrazdan TPP Achieved DLI#10 Elect supplied by Partially 010 Regular USD 4,551,000.00 3,351,000.00 1.4 % YTPC is maintai Achieved Program Action Plan Action Description Include the Program budget into the state budget for 2016. 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 10/31/2019 Page 2 of 11 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) 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 Total annual electricity supply by ANPP is maintained IN00761351 ►Total annual electricity supply by ANPP is maintained (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2300 GWh 2076.1 GWh 2076.1 GWh 2300 GWh Date 01-Feb-2016 31-Dec-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 ongoing life extension works at ANPP. Life extension works are planned to be completed in 2021, and Comments ANPP will come out of it with 10% high generation capacity able to supply more than 2300GWh of electricity to the grid. Total annual electricity supply by YTPC is maintained IN00761348 ►Total annual electricity supply by YTPC is maintained (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 10/31/2019 Page 3 of 11 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Value 1400 GWh 1384.1 GWh 1384.1 GWh 1400 GWh Date 01-Feb-2016 31-Mar-2018 31-Dec-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 IN00761349 ►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-Dec-2018 31-Dec-2018 30-Jun-2021 The deterioration of the indicator is due to the aging electricity distribution infrastructure. This is not attributable to the financial standing of the private power distribution company, which, in fact, has improved over the implementation period of the Program since 2016. The private power distribution company, the Comments Electric Networks of Armenia, is implementing an ambitious 10-year investment program (2018-2027) for over USD 500 million to upgrade the network, reduce the losses and increase the reliability of electricity supply. IN00761352 Customers served in the project area (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 1,040,000.00 1,020,789.00 1,020,789.00 1,040,000.00 Direct project beneficiaries IN00761350 ►Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3,018,000.00 2,934,000.00 2,934,000.00 3,038,000.00 Date 01-Feb-2016 31-Dec-2018 31-Dec-2018 30-Jun-2021 Comments IN00761353 Female beneficiaries (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 1,618,000.00 1,554,000.00 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 IN00761354 ►No new non-core business related expenditures, borrowing and lending incurred by ANPP (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 10/31/2019 Page 4 of 11 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Value No Yes Yes Yes Date 01-Mar-2016 30-Jun-2018 30-Jun-2019 31-Dec-2020 Comments Elimination of cash outflows of state-owned power companies for non-core business related reasons IN00761355 ►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-2019 31-Dec-2020 Comments Elimination of cash outflows of state-owned power companies for non-core business related reasons IN00761356 ►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 IN00761357 ►Reduction of cash deficit of ANPP due to the Program (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 18.50 No deficit No deficit No deficit Date 01-Mar-2016 31-Dec-2018 31-Dec-2018 31-Dec-2017 Comments Elimination of cash outflows of state-owned power companies for non-core business related reasons IN00761358 ►Reduction of cash deficit of YTPC due to the Program (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 85.40 31.10 31.10 44.80 Date 01-Feb-2016 31-Dec-2018 31-Dec-2018 31-Dec-2020 10/31/2019 Page 5 of 11 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 IN00761359 ►Reduction of the principal amount of outstanding commercial loans of ANPP to be refinanced under the Program (million US$) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 8.50 8.50 8.50 Date 01-Feb-2016 31-Dec-2018 31-Dec-2018 31-Dec-2017 Comments Reduction of expensive commercial loans, recovery of receivables and repayment of payable for gas IN00761360 ►Reduction of the principal amount of outstanding commercial loans of YTPC to be refinanced under the Program (milion US$) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 4.60 4.60 4.60 Date 01-Feb-2016 31-Dec-2018 31-Dec-2018 31-Dec-2017 Comments Reduction of expensive commercial loans, recovery of receivables and repayment of payable for gas IN00761361 ►Recovery of ANPP’s receivables from ENA (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 15.00 15.00 15.00 Date 01-Feb-2016 31-Dec-2018 31-Dec-2018 31-Dec-2016 Comments Reduction of expensive commercial loans, recovery of receivables and repayment of payable for gas IN00761362 ►Recovery of YTPC’s receivables from ENA (million US$) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 25.00 25.00 25.00 Date 01-Feb-2016 31-Dec-2018 31-Dec-2018 31-Dec-2016 Comments 10/31/2019 Page 6 of 11 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Reduction of expensive commercial loans, recovery of receivables and repayment of payable for gas IN00761363 ►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 0.87 0.87 3.86 Date 01-Feb-2016 31-Dec-2018 31-Dec-2018 31-Dec-2020 Comments End-user tariffs reflecting changes of electricity supply costs IN00761364 ►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 IN00761365 ►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. Date 01-Mar-2016 30-Jun-2018 30-Jun-2018 31-Dec-2020 Comments End-user tariffs reflecting changes of electricity supply costs IN00761366 ►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 31-Dec-2018 31-Dec-2020 10/31/2019 Page 7 of 11 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) Comments Maintaining the generation capacity of the gas turbine at YTPC’s CCGT plant IN00761367 ►Overhaul of the gas turbine at YTPC’s CCGT plant (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The overhaul was The overhaul was Value n/a completed in September completed in Overhaul is c 2018. September 2018. Date 01-Feb-2016 31-Dec-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 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 Baseline Actual (Previous) Actual (Current) January 1, 2020, 10/31/2019 Page 8 of 11 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) and December 31, 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%) 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 10/31/2019 Page 9 of 11 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) ►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 12,161,962.00 865,998.00 865,998.00 3,858,962.00 Date 01-Feb-2016 31-Dec-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 ►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 1384.1 GWh 1384.1 GWh 1400 GWh Date 01-Feb-2016 31-Dec-2018 31-Dec-2018 -- Comments 10/31/2019 Page 10 of 11 The World Bank Implementation Status & Results Report Power Sector Financial Recovery Program (P157571) 10/31/2019 Page 11 of 11