Report No: FIN-2019-43(E) 25th June 2019 ACCELERATING SUSTAINABLE PRIVATE INVESTMENT IN RENEWABLE ENERGY (ASPIRE) PROJECT MINISTRY OF ENVIRONMENT FINANCIAL YEAR 2018 Contents Auditor General's Report Financial Statement Statement of Receipts and Payments............. .................. 3 Notes to the Financial Statements ....................... ............4 &Yl'/' 0 *1. !'.'. ,r^ # 'c r) tti0tmR 0tl{tRlfs 0Ifl [I AUDITOR GENER{L'S REPORT TgI"tff,MlNrsT&Y"."or ENVTR0NMENT ON THS".ITNANCTAL S]ATEMENT Or ACCELERATING SUSTAINABLE PRIVATE INVESTMENTS IN Rf,NEWABLE, f,NERCY PROJECT Opinion We have audited the accompanying financial statemenq Statement of Receipts and Payments for the year ended 31 December 2018 and notes to this statement, which includes a summary of significant accounting policies and other explanatory information set out in pages 3 to 6, of Accelerating Sustainable Private Investment in Renewable Energy Project financed by World Bank/Intemational Development Association Grant Agreement (SCF Grant No. TFOl 7182) as of 31 August 2014. In our opinion, the accompanying financial statement presents fairly, in all material respects, the cash receipts and cash payments for the frnancial year ended 3 1 December 2018 and cash balances as at the year then ended in accordance with the Intemational Public Sector Accounting Standard: Financiol Reporting under the Cash Basis ofAccounting. In addition, we can provide assurance that: (a) The funds provided under the Grant have been utilised for the purposes for which they were provided; and (b) The Procurement guidelines of the World Bank have been complied with in the procurement of goods and services under the project. Basis for opinion We conducted our audit in accordance with Intemational Standards on Auditing (lSAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit ofthe financial statements section ofour report. We are independent ofthe Management in accordance with the Intemational Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESB Code. We believe that the audit evidence we have obtained is sufficient appropriate to provide a basis for our opinion. Responsibilities of management and those charged with governance for the financial statements The Management is responsible for the prepiuation and fair presentation of this financial statement in accordance with the Intemational Public Sector Accounting Standard (IPSAS): Financial Reporting under the Cash Basis ofAccounting. This responsibility includes: desi Auditor General's Office I Ohaazce Building i Amecl Ahmed Mag! | Male', Republic of Maldives -960 332 3939 I inrb rr audit4qL!1y I rvrv'$ . audit. r.lor . mr implementing and maintaining intemal controls relevant to the preparation and fair presentation of financial statement that are free from material misstatement, whether due to fraud or effor; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Those charged with govemance are responsible for overseeing the project's financial reporting process. Auditor's responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis ofthese financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: o Identify and assess the risks of material misstatement of the financia.1 statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of intemal control. r Obtain an understanding of intemal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the project's intemal control. . Evaluate the appropriateness ofaccounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management. o Evaluate the overall presentation, structure and content ofthe financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with govemance of the project regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in intemal control that we identifu during our audit. 25th June 2019 +*w Hassan Ziyath Auditor General Auditor Ceneral's Office I Ghaazee Buildhg Ameer Ahmed Magu Male', Republic ofMaldives rrrnr! +960 332 3939 inlb ,ilauilit. eor.m r I wwu'.audit.gov.mv ACCELERATING SUSTAINABLE PRIVATE IN'VESTMENTS IN RENEWABLE ENERGY (ASPIRE) PROJECT - 2018 MINISTRY OF ENVIRONMENT STATEMENT OF RECEIPTS AND PAYMENTS FOR THE YEAR ENDED 31 DECEMBER 2OI8 For the For the Cumulative year ended year ended as at 31 Dec Notes 31 Dec 2018 3l Dec 2017 2018 USD USD USD Receipts Disbursements from World Bank J 1,234,634 137,177 1,950,972 Total Receipts 1,234,631 137,177 1,950,972 !4yments TA for Enabling Private Investing in PV 4 24,671 29,882 138,923 Institutional Capacity Building and 183,912 114.449 429.713 5 klowledge sharing Development ol pipeline 6 41,6t3 3t,297 141,528 Project management and implementation 28,846 ) I q)') 92,391 7 support Security Package 8 239,400 239,400 Total Payments 518,442 197,550 1,042,015 Increase/(Decrease) in Cash 776,192 (60,373) Opening Cash Balance 192,766 253,t39 Increase/(Decrease) in Cash 7 t6,192 (60,373) Closing Cash Balance 908,958 192,766 Management of the Project is responsible for the preparation and presentation of the financial statement. The Statement ofReceipts and Payments was approved by PMU on 24ft June 2018. Signed for and on behalf of the PMU: Mr. Maumoon Khalid Mr. oo th eed (Project Manager) (Financial Experr) The accounting policies and notes on pages 4 through 6 form an integral part ofthe Statement of Receipts and Payments. ,,.1,,i 0 6l]r!t rt ofEnvironrnentGreenBuildirp,HandhuvaEeHigun,[rlale,N.'laldives.Tel:+(960)3018?O0,Faxi+(960)3018301,6mai1:secretariat@environnent.gov.mv 3 ACCELERATING SUSTAINABLE PRIVATE INVESTMENTS IN RENEWABLE ENERGY (ASPTRE) PROJECT - 2018 MINISTRY OF ENVIRONMENT NOTES TO THE FTNANCIAL STATEMENTS 1. PROJECT INFORMATION Key Highlights Project Title: Accelerating Sustainable Private Investment in Renewable Energy (ASPIRE) Proj ect Start Date: 31 August 2014 Project Durations 64 Months Closing Date: 31 December 2019 Approved Budget: US$ 11,684,000 (Eleven Million Six Hundred Eighty-Four Thousand U.S. Dollars) Funded by: Scaling Up Renewable Energy Program in Low Income Countries ("ESREP") Multi- donor Trust Fund Trust Fund Manager: World Bank l.l Obiectives The objective ofthe Project is to increase photovoltaic generation in the territory ofthe Maldives through private sector investment. Photovoltaic generation is the generation of electriciry through photovoltaic panels. The technology coverts energ.v in the visible light spectrum into electricity, and in practice PV panels are used to harvest electricity from sunlight at a large scale, used as an altemative source ofelectric power. Since sunlight is a renewable source ofenergy, it is preferred over non-renewable sources (such as diesel-based generation. which is the current practice in Maldives) due to its economic and environmental benefits. Tlie Project consists ofthe following parts: Part 1: Technical Assistance Support (a) Technical assistance for enabling private investments in photovoltaic generation. Provision of support for the creation of an appropriate environment for private investment in photovoltaic generation, and reducing preliminary project development costs, including the development and/or implementation ofi (i) a private sector policy and regulatory framework for renewable energy projects; and (ii) implementation arrangements to guide off-take utilities and private investors, including with respect to negotiating partnerships, and compliance with standard contracts (b) Institutional capacity building and knou'ledge sharing. Provisiorr ofsupport for: EN (i) Institutional capacity building for planning, implementing, operating, and m oll power systems; and = (ii) training and knowledge sharing in the area ofrenewables and energy efficie ofEnvircnmen! Grcen Building, Handhwarce Higun, Mal6, Maldives. Telr+(960) 3018300, Fax +(9e0)3O18301, e-rna : secrctalial@environ 4 ACCELERATING SUSTAINABLE PRIVATf, INVESTMENTS IN RENf,WABLE ENERGY (ASPIRE) PROJECT _ 2OI8 MINISTRY OF ENVIRONMENT (c) Development ofpipeline. Provision ofsupport for the development ofa pipeline ofrenewable energy projects, including identification ofproject sites, resource assessment, pre-feasibility work, and aggregation ofopportunities into saleable project bundles. (d) Project management and implementation support. Provision ofoperational support for Project management, supervision. and monitoring. Part 2: Structuring and Delivery of Tariff Buy-Downs Provision of support for Subprojects through the granting of'l'ariff Buy Downs. Part 3: Security Package Provision of Securities for Subprojects through an Escrow Mechanism. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICTES 2.1 Basis of preparation The Statement ofReceipts and Payments are prepared in accordance with the Intemational Public Sector Accounting Standard: Financial Reporting under the Cash Basis ofAccounting. 2.2 Recognition ofReceipts and Payments Receipts and payments are accounted for on cash basis. Receipts are recognised when the Maldives Monetary Authority (MMA) receives the funds from the World Bank to the bank account maintained for the project with it. This account is maintained in United States Dollars (USD). Payments are recognised at the time of outflow of cash either from the bank account or from the cash account maintained for cash payments. 2.3 Presentation Currency The Statement of Receipts and Payments has been presented using the United States Dollars (USD). All the figures have been rounded to the nearest Dollar. 2.4 Foreign Currency Translation Receipts and payments in currencies other than the reporting currency (USD) are converted at the Mid- Exchange Rate (MMA's published exchange rate Iess 0.05) existing between the transaction currency and USD at the time ofthe receipt/payment. Cash balances in currencies other than USD as at the end ofthe reporting period are shown in the financial statement at the exchange rate that was prevailing at the last day ofthe reporting period. 2.5 Reporting Period Financial statement is prepared for the financial year ending 3 I December 2016. Period for which financial statement is prepared is also disclosed on the face of the financial statement. 2.6 Comparatives In addition to the figures for the financial year ending 3l December 2018, the financial statement shows the figures for the period financial year ended 3 I December 201 7. :. E'V 3 6Iilr T0nme nt Grcen Building, Handhularce HEun,l\4a16, i/aldives. Tel:*(960) 30183,00, Faxi+i960) 3018301, enEil: secElaria@envionmenl.gov 5 ACCELERATING SUSTAINABLE PRIVATE INVESTMf,NTS IN RENEWABLE ENERGY (ASPIRE) PROJECT _ 2OI8 MINISTRY OF ENVIRONMENT 3. Fund Received 20t8 2017 USD TJSD Disbursement (Receipts) from World Bank to DA-l 197,234 137,177 Disbursement (Receipts) from World Bank to DA-2 (Escrow I,037,400 Designated Account) Total I,2-1.1,63.1 137,,177 4. TA for Enabling Private Investing in PV 2018 2017 USD TJSD TA for Enabling Private Investing in PV 21.671 29.882 Total 2t,671 29,882 5. Institutional Capacity Building and Knowledge Sharing 2018 2017 TJSD IJSD Institutional Capacity Building and Knowledge Sharing I 83.91 2 I14.449 Total t 8-i,912 tt1,449 6. Development of Pipeline 20t8 2017 USD iJSD Development of Pipeline 41.613 31.297 Total 41,613 31,291 7. Project Management and Implementation Support 20t8 z0t7 LISD TISD Project Management and Implementation Support 28.846 21.922 Total 28,8,16 21,922 8. Security Package 20t8 2017 USD I]SD Payment made to Escrow Account lbr Phase One 239,400 239,400 of Envircnment Grcen Building, HaMhuvarce Hllun, iral6, Maldives. Tel:{960) 3018300, Far: +(960) 3018301, efiEilr secElaria@envircnmentgov.rw 6