Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00003939 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-45870; TF-94664; TF-99823) ON A CREDIT IN THE AMOUNT OF SDR 47.5 MILLION (US$70 MILLION EQUIVALENT) A GLOBAL ENVIRONMENTAL FACILITY GRANT IN THE AMOUNT OF US$1.8 MILLION EQUIVALENT AND AN AFREA GRANT IN THE AMOUNT OF US$ 2 MILLION EQUIVALENT TO THE REPUBLIC OF BENIN FOR AN INCREASED ACCESS TO MODERN ENERGY (IAME) PROJECT September 24th, 2019 Energy and Extractives Global Practice Africa Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective January 8, 2019) Currency Unit = CFA Francs (CFAF) CFAF 572.77 = US$1 US$1.39 = SDR 1 FISCAL YEAR July 1 – June 30 ABBREVIATIONS AND ACRONYMS AFREA Africa Renewable Energy Access Program ABERME Beninese Agency of Rural Electrification and Energy Mastery (Agence Béninoise d’Électrification Rurale et de Maitrise d’Energie) AFD Agence Francaise de Developpement CFL Compact Fluorescent Lamp CEB Benin Electric Company (Compagnie Électrique du Benin) CAS Country Assistance Strategy CEET Togo Energy Electricty Company (Compagnie Energie Électrique du Togo) CoForMO Comminauté Forestriere du Moyen Oueme DNCMP National Director of Public Contracts Control (Directeur National de Contrôle des Marches Publiques) DGE General Department of Energy (Direction Générale de l’Enérgie) ESMAP Energy Sector Management Assistance Program ESDP Energy Services Delivery Project ESIA Environmental and Social Impact Assessment ESMP Environmental and Social Management Plan EIB European Investment Bank EIRR Economic Internal Rate of Return ENPV Economic Net Present Value KfW German Reconstruction Credit Institute (Kreditanstalt fur Wiederaufbau) GEF Global Environmental Facility GEO Global Environmental Objective PAG Government Action Program (Programme d'action gouvernemental) GoB Government of Benin IAME Increase Access to Modern Energy ICR Implementation Completion and Results Report ISR Implementation Status and Results Report SIGFIP Integrated Public Financial Management System (Système Intégré de Gestion des Finances Publiques) M&E Monitoring and Evaluation MCC Millennium Challenge Corporation NPV Net Present Value PAD Project Appraisal Document PASE Energy Service Improvement Project (Projet d'amélioration du service énergétique) PDO Project Development Objective PIU Project Implementation Unit RAP Resettlement Action Plan REF Rural Electrification Fund SBEE Benin Electric Power Company (Société Béninoise d’Énergie Électrique) SDG Sustainable Development Goal TA Technical Assistance FFEM French Fund for the Global Environment TCN Transmission Company of Nigeria WAPP West African Power Pool Regional Vice President: Hafez M.H. Ghanem Country Director: Coralie Gevers Senior Global Practice Director: Riccardo Puliti Practice Manager: Charles Joseph Cormier Task Team Leader(s): Miarintsoa Vonjy Rakotondramanana ICR Main Contributor: John Rennie TABLE OF CONTENTS DATA SHEET ...........................................................................................................................1 1. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 6 A. CONTEXT AT APPRAISAL .........................................................................................................6 2. OUTCOME .................................................................................................................... 18 A. RELEVANCE OF PDOs ............................................................................................................ 18 B. ACHIEVEMENT OF PDOs (EFFICACY) ...................................................................................... 20 C. EFFICIENCY ........................................................................................................................... 26 D. JUSTIFICATION OF OVERALL OUTCOME RATING .................................................................... 28 E. OTHER OUTCOMES AND IMPACTS (IF ANY) ............................................................................ 28 3. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 30 A. KEY FACTORS DURING PREPARATION ................................................................................... 30 B. KEY FACTORS DURING IMPLEMENTATION ............................................................................. 32 4. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 34 A. QUALITY OF MONITORING AND EVALUATION (M&E) ......................................................... 34 B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE ..................................................... 36 C. BANK PERFORMANCE ........................................................................................................... 38 D. RISK TO DEVELOPMENT OUTCOME ....................................................................................... 39 LESSONS AND RECOMMENDATIONS ......................................................................................... 40 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 42 ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION ......................... 58 ANNEX 3. PROJECT COST BY COMPONENT ........................................................................... 60 ANNEX 4. EFFICIENCY ANALYSIS ........................................................................................... 61 ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ... 65 ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 66 The World Bank Increased Access to Modern Energy (P110075) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P110075 Increased Access to Modern Energy Country Financing Instrument Benin Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Related Projects Relationship Project Approval Product Line Supplement P115064-Benin GEF 23-Jun-2009 Global Environment Project Energy Efficiency Program Organizations Borrower Implementing Agency Societe Beninoise d Energie Electrique (SBEE), Ministère Communaute Electrique du Benin (CEB), Project de l’Energie, des Recherches Pétrolières et Minières, de Coordination Unit hosted with the Ministere de l'Energie l’Eau et du Développement des E R Project Development Objective (PDO) Original PDO The project's objectives are to improve reliability and efficiency of, and access to, modern energy services in Benin. Page 1 of 66 The World Bank Increased Access to Modern Energy (P110075) FINANCING Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) World Bank Financing P110075 IDA-45870 70,000,000 54,382,175 52,777,682 P110075 TF-94664 1,818,182 1,573,361 1,573,361 P110075 TF-99823 2,000,000 1,789,331 1,789,331 Total 73,818,182 57,744,867 56,140,374 Non-World Bank Financing 0 0 0 Borrower/Recipient 51,850,000 1,850,000 1,850,000 EC: European Investment 23,090,000 26,090,000 26,090,000 Bank FONDS FRANCAIS DE L'ENVIRONNEMENT 1,300,000 1,300,000 1,300,000 MONDIAL GERMANY: KREDITANSTALT 18,700,000 18,700,000 18,700,000 FUR WIEDERAUFBAU (KFW) Sub-borrower(s) 9,750,000 3,880,000 3,880,000 Total 104,690,000 51,820,000 51,820,000 Total Project Cost 178,508,182 109,564,867 107,960,374 KEY DATES FIN_TABLE_DAT Project Approval Effectiveness MTR Review Original Closing Actual Closing A P110075 23-Jun-2009 13-Jul-2009 14-Oct-2015 30-Jun-2015 31-Dec-2018 Page 2 of 66 The World Bank Increased Access to Modern Energy (P110075) RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 12-Oct-2011 1.46 Other Change(s) 14-Nov-2013 8.45 Change in Implementing Agency Change in Results Framework Change in Components and Cost Reallocation between Disbursement Categories Change in Institutional Arrangements Change in Financial Management 26-Jun-2015 24.46 Change in Loan Closing Date(s) 13-May-2016 36.35 Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Reallocation between Disbursement Categories Change in Implementation Schedule 20-Jun-2018 52.56 Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Change in Implementation Schedule KEY RATINGS Outcome Bank Performance M&E Quality Moderately Satisfactory Moderately Satisfactory Substantial RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 23-Dec-2009 Moderately Satisfactory Moderately Unsatisfactory 0 02 29-Jun-2010 Satisfactory Moderately Satisfactory 0 03 27-Mar-2011 Satisfactory Moderately Satisfactory 1.37 04 08-Jan-2012 Satisfactory Moderately Satisfactory 1.53 05 12-Jun-2012 Satisfactory Moderately Satisfactory 1.61 Moderately 06 06-Mar-2013 Moderately Unsatisfactory 4.20 Unsatisfactory Page 3 of 66 The World Bank Increased Access to Modern Energy (P110075) Moderately 07 21-Oct-2013 Moderately Unsatisfactory 8.10 Unsatisfactory Moderately 08 17-May-2014 Moderately Unsatisfactory 12.47 Unsatisfactory 09 18-Feb-2015 Moderately Satisfactory Moderately Satisfactory 21.56 10 25-Sep-2015 Moderately Satisfactory Moderately Satisfactory 29.84 11 31-May-2016 Moderately Satisfactory Moderately Unsatisfactory 40.41 12 18-Jan-2017 Moderately Satisfactory Moderately Unsatisfactory 43.77 13 30-Jun-2017 Moderately Satisfactory Moderately Satisfactory 46.68 14 25-Jan-2018 Moderately Satisfactory Moderately Satisfactory 50.42 15 09-Aug-2018 Moderately Satisfactory Moderately Satisfactory 53.32 16 01-Mar-2019 Moderately Satisfactory Moderately Satisfactory 55.89 SECTORS AND THEMES Sectors Major Sector/Sector (%) Energy and Extractives 100 Renewable Energy Biomass 1 Renewable Energy Geothermal 1 Public Administration - Energy and Extractives 21 Energy Transmission and Distribution 75 Renewable Energy Solar 1 Renewable Energy Wind 1 Themes Major Theme/ Theme (Level 2)/ Theme (Level 3) (%) Page 4 of 66 The World Bank Increased Access to Modern Energy (P110075) Private Sector Development 15 Business Enabling Environment 1 Regulation and Competition Policy 1 Jobs 4 Job Creation 4 Public Private Partnerships 10 Urban and Rural Development 94 Urban Development 55 Urban Infrastructure and Service Delivery 55 Rural Development 39 Rural Infrastructure and service delivery 39 Environment and Natural Resource Management 1 Environmental policies and institutions 1 ADM STAFF Role At Approval At ICR Regional Vice President: Obiageli Katryn Ezekwesili Hafez M. H. Ghanem Country Director: Madani M. Tall Coralie Gevers Director: Jamal Saghir Riccardo Puliti Practice Manager: Subramaniam Vishwanathan Iyer Charles Joseph Cormier Miarintsoa Vonjy Task Team Leader(s): Fanny Kathinka Missfeldt-Ringius Rakotondramanana ICR Contributing Author: John Donald Rennie Page 5 of 66 The World Bank Increased Access to Modern Energy (P110075) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. CONTEXT AT APPRAISAL Country Context 1. In 2009, Benin was a low-income country with an underachieving economy. While the country had macroeconomic stability, low debt levels, and political stability and holds a geographically favorable location, it was struggling to translate these advantages into economic growth and diversification. With a population of 9 million that was growing at a rate of 3 percent per year, and a per capita income of US$570, Benin was facing increased demand for basic social services and failing to achieve inclusive growth. From 2002 to 2006, the economy grew at a mediocre rate of 3.3 percent per year. It began to improve in 2007 when it hit a 5 percent to 6 percent growth rate, but the global financial crisis would reduce the rate of growth to around 2 percent in the following years. 2. The key constraints to economic growth were the persistence of corruption, an unfavorable business environment, a weak infrastructure base, lack of competitiveness in agriculture and other industries, an undiversified economy, weak institutional and implementation capacity, and a need for improved basic services. Poverty was widespread in rural areas and a challenge in urban areas. Social indicator trends were improving but still short of the Millennium Development Goal targets, especially in health. 3. In 2007, the Government of Benin (GoB) had prepared a poverty reduction strategy, Growth Strategy for Poverty Reduction, as part of its long-term vision strategy Aladia Benin 2025. The strategy aimed to make Benin an emerging economy by 2025 and achieve double-digit growth rates. The Government’s macroeconomic objectives were to continue to build on the growth sectors (agriculture, trade, and transport) while addressing stagnation in industrial output. The economy was growing primarily through accumulation of factors (increased inputs) rather than increased productivity. The plan to improve industrial efficiency included an increase in public investment in infrastructure, including energy, which would help restore industrial and service sectors. Providing reliable energy services was therefore included as a key area of focus in Aladia Benin 2025. Sector Context 4. Benin had experienced severe energy crises in the preceding years due to the lack of effective energy sector planning and the financial crises facing its energy sector companies, mainly its distribution company, the Benin Electric Power Company (Société Béninoise d’Energie Électrique, SBEE), and also the Benin Electric Company (Communaté Électrique du Benin, CEB), the binational generation company (shared with neighboring Togo). The CEB was responsible for the planning, importation, production, and transportation of electricity for both countries. The CEB sold electricity to the SBEE and to Compagnie Energie Électrique du Togo (CEET). 5. Access deficit. In 2007, Benin’s electricity demand was 758 GWh, with the heaviest load stemming from the coastal area around Cotonou, the capital and largest city. Over the preceding two decades, electricity demand had continually increased at a rate of around 7 percent per year. Almost half of the demand was from households (48 percent), with the use of electricity in the industrial sector limited to a few industries (agricultural foodstuffs, cotton, textiles, pharmaceuticals, and cement). The average household electricity consumption was stable at around 1.23 MWh per year. Like many Sub-Saharan African countries, the main source of energy for nearly half of Benin’s Page 6 of 66 The World Bank Increased Access to Modern Energy (P110075) population was biomass, such as firewood and charcoal. Biomass was mostly consumed in a non- sustainable manner and was contributing to deforestation in Benin. Access to electricity was limited to 32 percent of the population, but in urban areas the access rate was 60 percent. 6. Supply. In 2007, 579 GWh, or 76 percent of Benin’s energy demand, was met through supplies from the CEB. The remaining 180 GWh, or 24 percent, was provided by the SBEE mainly from its own diesel generation. Benin was highly dependent on imports from abroad, which represented 60 percent of total consumption in 2007. For the same year, the main source of electricity imported through the CEB came from Nigeria and totaled 251 GWh (at a price of US$0.07 per kWh), corresponding to 33 percent of Benin’s electricity supply. Other imports came from Ghana, 107 GWh (at a price of US$0.10 per kWh), corresponding to 14 percent of Benin’s supply, and Côte d’Ivoire, 99 GWh (at a price of US$0.13 per kWh), corresponding to 13 percent of Benin’s supply. The completion of the transmission interconnection with Nigeria in 2007 led to an increase in its share of Benin’s imports. The marginal cost of electricity generation by a thermal plant was US$0.25 per kWh. 7. The lack of access to reliable electricity was constraining economic growth. The power sector faced challenges from its high cost of service, inefficiencies of the distribution sector, lack of financial viability, and lack of access to modern energy services for a broader part of the population. In 2006, the Government began taking steps to address the energy sector’s governance in Benin and ameliorate its financial viability. Under the World Bank Energy Services Delivery Project (ESDP) (P111019), the World Bank was providing support to the Government for a program to reduce the operating costs of the SBEE and improve its efficiency, as well as attempting to develop an appropriate sector strategy, including defining the role of private operators. The SBEE had a need to improve the electricity supply to its existing customer base, which experienced frequent outages and poor quality of service. In 2010, the CEB had established plans to construct additional power plants, creating an additional need to focus on improving the existing transmission network so that it could supply power more reliably and to a larger part of the country. 8. The Increase Access to Modern Energy (IAME) Project therefore aimed to build a reliable and efficient transmission and distribution network that would comply with critical technical design criteria while also expanding access to energy. The investments in distribution and energy efficiency were aimed at increasing the resilience of the power system through reduced outages, losses, and peak load. The project’s access activities would bring a bottom-up approach to energy access, providing rural communities with modern energy services for lighting and cooking and through the operationalization of a Rural Electrification Fund (REF) and enhanced biomass energy services. Rationale for World Bank Assistance 9. The IAME Project was prepared as a new investment that would build on the ESDP’s progress, which closed on December 31, 2012 (after the approval of additional financing in 2009). The ESDP closed with a satisfactory rating toward achieving its PDOs, which included (a) accelerating, in a commercially viable manner, the use of electricity for economic growth and social services and thus improving the quality of life in unserved areas (peri-urban and rural); (b) improving governance and ensuring the financial sustainability of the sector, through the involvement of the private sector in partnership with the public sector; (c) reducing deforestation and increasing access and diversifying choice to renewable and cleaner fuels to the household and SME sectors; and (d) promoting regional cooperation while protecting the environment in a sustainable manner. The IAME Project was designed to further address the reliability of the electricity grid and increase access to modern energy. Page 7 of 66 The World Bank Increased Access to Modern Energy (P110075) 10. The IAME Project’s Development Objectives were aligned with evidence from analytical work in the energy sector at the time of appraisal. The research that underlies the World Bank’s Doing Business: Getting Electricity report shows that delivery of reliable modern energy services contributes to the World Bank’s twin goals of poverty reduction and shared prosperity, both indirectly through contributions to economic growth and directly by enriching the lives of beneficiaries of energy services. These studies show that poor electricity supply adversely affects firm productivity and their investment’s productive capacity.1 Further research shows that capital (domestic and foreign) tends to go to economies that can offer a reliable and competitively priced supply of electricity.2 This research, which was published before the time of project appraisal, supports the project’s design as an evidence-based intervention to achieve the project’s development goals. Theory of Change (Results Chain) 11. This Implementation Completion and Results Report (ICR) looks at evidence in the project that illustrates some pathways by which improving reliability, efficiency, and access to modern energy services can contribute to improved service delivery and eventually improved socioeconomic outcomes. In Figure 1, a results chain is provided to summarize these pathways. Figure 1. IAME Project Theory of Change 1 Calderon, César, and Luis Servén. 2003. “The Output Cost of Latin America’s Infrastructure Gap.” In The Limits of Stabilization: Infrastructure, Public Deficits, and Growth in Latin America , edited by William R. Easterly and Luis Servén. Washington, DC: World Bank; Dollar, David, Mary Hallward-Driemeier, and Taye Mengistae. 2005. “Investment Climate and International Integration.” Policy Research Working Paper 3323, World Bank, Washington, DC; Reinikka, Ritva, and Jakob Svensson. 1999. “Confronting Competition: Investment Response and Constraints in Uganda.” Policy Research Working Paper 2242, World Bank, Washington, DC; Eifert, Benjamin. 2007. “Infrastructure and Market Structure in Least-Developed Countries.” Department of Economics, University of California, Berkeley; Limi, Atsushi. 2008. “Effects of Improving Infrastructure Quality on Business Costs: Evidence from Firm-Level Data.” Policy Research Working Paper 4581, World Bank, Washington, DC. 2 Audinet, Perre, and Martin Rodriguez Pardina. 2010. Managing an Electricity Shortfall: A Guide for Policy Makers. Washington, DC: World Bank Page 8 of 66 The World Bank Increased Access to Modern Energy (P110075) Project Development Objectives (PDOs) 12. The PDO is to “improve reliability, efficiency, and access to modern energy services in Benin.” The PDO was unchanged throughout the project.3 13. The Global Environmental Objective (GEO) is to “reduce global greenhouse gas emissions through the introduction of energy-efficient appliances in Benin’s residential and commercial sector.” The GEO was unchanged throughout the project. 14. In supplement to the IDA and Global Environmental Facility (GEF) operations, a US$2 million Africa Renewable Energy Access Program (AFREA) Project grant associated with the IAME Project was approved in 2011.4 Key Expected Outcomes and Outcome Indicators 15. The project’s design was based on a careful consideration of the power sector’s needs and what aspects could benefit the system the most from further investment. With other activities financing the interconnection of northern Togo and northern Benin and the West African Power Pool (WAPP) Adaptable Program Loan 1 (Phase 2) project that was supporting the coastal transmission network covering Ghana, Togo, Benin, and Nigeria, the IAME Project focused on (a) the construction of transmission lines to interconnect the southern and northern parts of Benin and (b) on-grid electrification of some rural areas to increase access to electricity and promotion of sustainable modern energy services. 16. The idea of a transmission line running along the north-south corridor in Benin was especially appealing because the country was importing significant amounts of electricity from Nigeria (42 percent of the energy mix in 2010). The imported electricity would be transported along the existing coastal transmission line and the WAPP Coastal Transmission Backbone between Lagos and Sakété. To reach the northern part of Benin, imported electricity had to follow a circuitous route across Benin, into Togo and up to the north, before crossing back into Benin. This indirect route created higher levels of transmission losses (the laws of physics dictate that when electricity is transported, losses in the form of heat will be a byproduct, technical factors that contribute to losses include the voltage of the line and the efficiently of the substations). The Sakété - Porto Novo line would provide a direct connection from the point of importation from Nigeria to the country’s most important industrial zone (in Porto Novo), while the Onigbolo (south-eastern Benin) and Parakou (northern Benin) connection would form a critical transmission line. 17. The key expected outcome indicators were (a) Reduced power losses in Benin’s transmission networks (in GWh); (b) Increased number of people with improved access to modern energy and electricity services; and (c) Benin transmission network responds to (N-1) criteria. 3The PDO was the same in the Project Appraisal Document (PAD) and the Financial Agreement. 4The AFREA grant supported Subcomponent B.2(b), which supported biomass efficiency, interfuel substitution, and local economic development. Page 9 of 66 The World Bank Increased Access to Modern Energy (P110075) 18. The GEO indicators were (a) Efficiency standards for appliances developed and applied and (b) Compact fluorescent lightbulbs installed. Components 19. The project began with three components and expanded to four following a project restructuring in 2013. Component activities and cost figures are presented in the following paragraphs. 20. Component A: Electrical Network Up-grading (US$93.86 million, of which original IDA amount of US$43.42 equivalent, revised to US$41.72 million equivalent after the restructuring of May 12, 2016)  Subcomponent A.1. (i) construction of electrical transmission interconnection between Onigbolo and Parakou and (ii) provision of and installation of protection and relaying equipment—co-financed by IDA (US$16.34 million equivalent), the European Investment Bank (EIB) (US$23.09 million equivalent), and CEB (US$3.88 million equivalent)  Subcomponent A.2. Construction of electrical transmission interconnection between Sakété and Porto Novo—totally financed by the German Reconstruction Credit Institute (Kreditanstalt fur Wiederaufbau, KfW) in the amount of US$18.70 million equivalent  Subcomponent A.3. Technical assistance (TA) for the supervision of works undertaken under Part A.1 and A.2 of the project, entirely financed by the EIB in the amount of US$3 million equivalent  Subcomponent A.4. (i) rehabilitation and reinforcement of the SBEE’s electrical distribution network in major urban centers in Benin with a view to improving the quality of power supplied and (ii) provision of and installation of prepayment meters and connection equipment—entirely financed by IDA in the amount of US$25.38 million  Subcomponent A.5. Improving lighting and appliance efficiency in urban areas for households that already have access to electricity through, among others (i) promoting the replacement of incandescent lightbulbs by compact fluorescent lamps (CFLs); (ii) introducing energy-efficient product standards and a labeling scheme for air conditioners and CFLs; and (iii) carrying out of public awareness programs—co-financed by the GoB (US$1.65 million) and GEF (TF94664) (US$1.82 million equivalent) 21. Component B: Electrification and Modern Energy Services (US$65.50 million equivalent, of which original Government funding for this component was US$50.2 million equivalent, revised to US$0.2 million, and IDA initial amount of US$12 million, revised to US$3.34 million in the restructuring of May 13, 2016)  Subcomponent B.1. Increasing access to electricity in rural areas by implementing at least four small pilot rural electrification operations, with community participation, under which the REF shall finance the development of business plans from potential Page 10 of 66 The World Bank Increased Access to Modern Energy (P110075) private operators and part of the investment-related costs of the approved pilot operations—financed by IDA in the amount of US$0.54 million equivalent  Subcomponent B.2. Modernizing biomass energy services by (a) Promoting community-based wood-fuel management through the following methods: (i) Implementing a community forestry management plan for approximately 300,000 ha of forests and inventorying and designing a forestry management plan for about additional 3,000 ha in the Moyen Ouémé region (with the Comminauté Forestriere du Moyen Oueme (CoForMO) (ii) Strengthening the capacity of the General Department of Energy (Direction Générale de l’Enérgie, DGE) to implement the biomass energy sector information and monitoring system (iii) Developing the legal and regulatory framework for promoting biofuels efficiency and interfuel (b) Supporting biomass efficiency, interfuel substitutions, and local economic development co-financed by IDA (US$1.30 million equivalent), Energy Sector Management Assistance Program (ESMAP) (US$2.0 million equivalent), French Fund for the Global Environment (FFEM) (US$1.30 million equivalent) and GoB (US$0.20 million equivalent)  Subcomponent B.3. Electrification of three priority localities in the recipient’s territory totally financed by IDA in the amount of US$1.50 million equivalent 22. Component C: Sustainable Energy Services (Totally financed by IDA with an original amount of US$6.68 million equivalent, revised to US$5.14 million equivalent after the restructuring of May 12, 2016)  Subcomponent C.1. Provision of TA to the CEB to improve the monitoring and evaluation (M&E) system and implement the Nangbéto social audit—financed by IDA in the amount of US$0.10 million equivalent  Subcomponent C.2. Provision of TA to the SBEE to (i) improve its financial management, (ii) audit human resources, and (iii) support restructuring of the utility company— financed by IDA in the amount of US$0.70 million equivalent  Subcomponent C.3. Preparation and update to the recipient’s energy sector master plan of 1997 to guide overall least-cost energy sector development and establishment of a sector coordination mechanism to ensure least-cost implementation planning— financed by IDA in the amount of US$0.54 million equivalent  Subcomponent C.4. Provision of TA to enhance the capacity of the relevant recipient’s public entities to actively monitor environmental and social safeguards as they relate to the energy sector—financed by IDA in the amount of US$2.80 million equivalent Page 11 of 66 The World Bank Increased Access to Modern Energy (P110075)  Subcomponent C.5. Carrying out of critical studies related to business development, engineering, environmental, and social studies—financed by IDA in the amount of US$1 million equivalent 23. Component D: Project Preparation (new component introduced after the restructuring of November 2013 in the amount of US$4.30 million equivalent from IDA, revised to US$5 million in the restructuring of May 2016)  Subcomponent D.1. Supporting the preparation of new projects including the Adjarala hydropower project by (i) updating the Environmental and Social Impact Assessment (ESIA)/Resettlement Action Plan (RAP); (ii) hiring experts for project’s preparation phase; (iii) laser, imaging, detection, and ranging of the Mono River Basin; and (iv) other activities related to the preparation of Adjarala—financed by IDA in the amount of US$3 million equivalent  Subcomponent D.2. Carrying out preparation studies of upcoming transmission and distribution projects including (i) technical and environmental studies of a transmission line from Natitingou to Porga and (ii) technical and environmental studies of the rehabilitation and extension of the distribution system—financed by IDA in the amount of US$2 million equivalent 24. The project was fully coordinated with the other donors active in Benin’s energy sector. The French Development Agency (Agence Francaise de Developpement), European Union, German Development Agency (Gesellschaft fuer Technische Zusammenarbeit), and the ECOWAS Bank for Investment and Development were active in the area of rural electrification at the time of appraisal. The Islamic Development Bank, the African Development Bank, the West African Development Bank, and the Nordic Development Fund were active in providing assistance for transmission, distribution, and grid extension in the northern part of Benin. The IAME Project was designed to complement the other donor’s work in Benin’s energy sector. 25. The project was initially supported by six donors and three co-financiers. Financiers for the World Bank Group included IDA, GEF, and ESMAP. Parallel and joint financiers included KfW, EIB, and FFEM—a trust fund signed between France and the GoB. It also included co-financing from the CEB and SBEE and the GoB. 26. The total original financing was US$176.69 million equivalent. The initial contribution from IDA was US$70 million. Following the two restructurings in 2013 and 2016, the total IDA funding to the project was reduced to US$54.50 million. The counterpart contribution was initially US$61.6 million equivalent, of which US$51.85 million was from the GoB, US$8.25 million from the CEB, and US$1.50 million from the SBEE. The GoB’s contribution was revised to US$1.85 million equivalent during the restructuring of 2013 because it was not able to secure the funding. The GEF contributed US$1.3 million and ESMAP contributed US$2 million equivalent. 27. The contributions from the co-financing donors are as follows: EIB - US$23.09 million equivalent, KfW - US$18.70 million, and FFEM - US$1.30 million. The activities financed by the co- financiers were part of the World Bank results matrix but implemented separately. Table 1 presents further details on donor financing and how it evolved with restructurings. Page 12 of 66 The World Bank Increased Access to Modern Energy (P110075) Table 1. Donor Financing (US$, millions) Donor Appraisal 2013 2016 2018 Comment 2009 Component A IDA 10.99 14.23 14.59 16.34 A1 EIB 23.09 23.09 23.09 23.09 CEB 3.88 3.88 3.88 3.88 A.1(b) IDA — 1.40 1.75 — Dropped in 2016 restructuring KfW 18.70 18.70 18.70 18.70 A.2 CEB 4.37 4.37 — — Dropped in 2013 restructuring EIB — — — 3.00 A.3 IDA 1.00 1.10 1.10 1.10 IDA 31.13 14.40 25.87 25.38 A.4 SBEE 1.50 1.50 — — Dropped in 2013 restructuring GEF 1.82 1.82 1.82 1.82 A.5 GoB 1.65 1.65 1.65 1.65 Total 101.13 89.14 95.45 94.96 Component B B.1(a) IDA 2.00 0.50 0.54 0.54 GoB 50.00 — — — Dropped in 2013 restructuring B.1(b) IDA 8.00 — — — Dropped in 2013 restructuring IDA 2.00 1.30 1.30 1.50 ESMAP* — 2.00 2.00 2.00 B.2 GoB 0.20 0.20 0.20 0.20 FFEM 1.30 1.30 1.30 1.30 B.3 IDA 2.00 1.50 1.50 1.50 Total 65.5 6.80 6.84 7.04 Component C C.1 IDA 1.00 0.10 0.10 0.10 C.2 IDA 1.00 0.70 0.70 0.70 C.3 IDA 0.80 0.00 0.54 0.54 C.4 IDA 3.20 2.80 2.80 2.80 C.5 IDA 0.68 1.00 1.00 1.00 Total 6.68 4.60 5.14 5.14 Component D D.1 IDA — 3.00 2.3. 3.00 D.2 IDA — 2.00 2.00 2.00 Total — 5.00 4.30 5.00 *Note: ESMAP funding refers to the AFREA window Revised PDOs and Outcome Targets 28. The PDO remained unchanged throughout project implementation. Similarly, the GEO was not revised during project implementation. Revised PDO Indicators 29. The project was restructured five times, with one major restructuring in 2013 and four minor restructurings (detailed descriptions of each restructuring are discussed in the following subsection and an overview of the changes in project indicators is presented in Table 2). The first restructuring was approved on October 12, 2011, to clarify the activities to be co-financed with the Africa Page 13 of 66 The World Bank Increased Access to Modern Energy (P110075) Renewable Energy Access Trust Fund (AFREA). The second restructuring was approved in November 2013 to cancel activities under Component 2 (amounting to US$15.62 million equivalent of IDA funds cancelled) and extend the closing date of the IDA Credit from June 30, 2015, to June 30, 2016. This restructuring also changed the Results Framework to have nine new project indicators and five intermediate indicators added. Two intermediate indicators were dropped to reflect the restructuring. The third restructuring, approved on June 26, 2015, extended the closing date of the GEF component to June 30, 2016, to align with the closing date of the IDA Credit. The fourth restructuring was approved on May 13, 2016, to reallocate proceeds from the cancelled activities to cover cost overruns in Subcomponent A.1 and costs associated with distribution upgrades, to revise the project Results Framework and extend the closing date of the IDA Credit to June 30, 2018. The fifth and final restructuring extended the project closing date by six months to December 31, 2018, to allow for the completion of the Onigbolo-Parakou transmission line. Table 2. PDO indicators Core Unit Baseline Target - Target - 2013 Target - 2016 Sector PAD Restructuring Restructuring Indicator PDO indicators Power losses in GWh 51 24 24 24 Benin’s transmission networks (in GWh) Increased number of Number 0 400,000 200,000 Dropped people with improved access to modern energy and electricity services Benin transmission Text No Yes Yes Yes network responds to (N-1) criteria Direct project X Number 0 — 200,000 200,000 beneficiaries Female X Number 0 — 100,000 100,000 beneficiaries Percentage 0 — 50 50 Female beneficiaries People provided X Number 2,700,000 — 3,900,000 3,900,000 with new or improved electricity service People provided X Number 450,000 — 650,000 Dropped with access to electricity by household connections People provided X Number 450,000 — 650,000 650,000 with access to electricity by household connections - grid People provided X Number 0 — 650,000 Dropped with access to electricity by Page 14 of 66 The World Bank Increased Access to Modern Energy (P110075) Core Unit Baseline Target - Target - 2013 Target - 2016 Sector PAD Restructuring Restructuring Indicator household connections - off- grid/minigrid—any source except only renewables Electricity losses per X Percentage 22 — 20 20 year in the project area Electricity losses in X Percentage 11 — 10 10 the project area - technical Electricity losses X Percentage 11 — 10 10 per year in the project area - nontechnical X Megawatt 0 — 0 0 Total net injected hour generation (MWh) GEO indicators Efficiency standards Text No Standards Standards Standards for appliances standards developed developed developed developed and developed applied Compact fluorescent Number 0 350,000 350,000 200,000 lightbulbs installed Intermediate results indicators Transmission lines Kilometers 0 310 310 310 constructed under the project (km) Transmission lines Kilometers 0 — 310 310 constructed or rehabilitated under the project A.2. Distribution- Yes/No No Yes Yes Yes level voltage fluctuations less than 7 percent in the project's network area in key cities in Benin A.3/4. Reduction of MW/GWh 0 9.7/14 9.7/14 9.7/14 Benin’s peak load and energy savings (in MW/GWh) A.4. Lighting Text No Standards Standards for Standards for efficiency standards standards for at at least 2 at least 2 developed and least 2 appliances appliances applied appliances Page 15 of 66 The World Bank Increased Access to Modern Energy (P110075) Core Unit Baseline Target - Target - 2013 Target - 2016 Sector PAD Restructuring Restructuring Indicator A.4. Number of Number 0 225,000 225,000 prepaid meters installed A.4. Reduction of Yes/No No Yes Yes Yes Benin’s peak load and energy savings (in MW/GWh) B.1. Rural Yes/No No Yes Yes Yes electrification fund established and fully operational B.2. Number of Number 0 4 Dropped Dropped decentralized, stand- alone generation systems set up B.3. Area of Number 0 300,000 300,000 300,000 managed forest in the context of setting up a community-based sustainable wood- fuel supply system (in ha) B.3. Number of Number 0 500 500 500 people provided with access to electricity under the project by household connections through the electrification of new localities B.2. Number of new Number 0 450 450 450 workers trained in production of efficient woodstoves, and increased use of energy efficient woodstoves. C.1. Energy Sector Yes/No No Yes Yes Yes Master Plan completed and endorsed C.2. SBEE business Yes/No No Yes Yes Yes plan developed and endorsed C.3. CEB business Yes/No No Yes Yes Yes plan developed and endorsed C.4. Environmental Yes/No No Yes Yes Yes and social Page 16 of 66 The World Bank Increased Access to Modern Energy (P110075) Core Unit Baseline Target - Target - 2013 Target - 2016 Sector PAD Restructuring Restructuring Indicator safeguards regularly monitored and mitigation measures implemented D.1. Adjarala ESIA Yes/No No — Yes Yes and RAP updated D.2. Preparation of Yes/No No — Yes Yes studies for transmission and distribution project completed Revised Components, Other Changes, and the Rationale for the Changes and their Implication on the Original Theory of Change 30. Three of the restructurings included changes to components. In 2011, a minor change was made to accommodate AFREA funding. The Financial Agreement indicated that IDA would finance Subcomponent B.2 activities, but the intention was for AFREA to finance the work once it had available funding and approval to fund biomass activities; the restructuring switched the financier from IDA to AFREA following this approval. Subcomponent B.2 on biomass was split into B.2(a) and B.2(b). The former included IDA-financed activities, such as community-based wood-fuel management and the latter included AFREA-financed activities, such as biomass efficiency, interfuel substitution, and local economic development. 31. The 2013 restructuring involved major changes to reduce the number of project activities and eliminate activities that had progressed slowly, as well as add some quick-disbursing strategic priority activities. Under Subcomponent A.1, protection and relaying systems were deemed necessary to meet the PDO on reliability (N-1) and added to the project as Subcomponent A.1(b). Subcomponent A.4 added the financing for the installation of 45,000 prepaid meters and connection equipment to help improve the SBEE’s cash flow, a government priority. It also cancelled US$5.8 million allocated to the supply and installation of a supervisory control and data acquisition system (SCADA) under the original project. 32. Component B on the provision of electricity in rural areas was substantially revised and scaled down, based on slow implementation progress and lessons learned from project implementation. Under S ubcomponent B.1, US$8 million in financing for the REF’s programming was cancelled due to a lack of implementation capacity. Subcomponent B.2(a) was scaled down from US$2 million to US$1.3 million because of the limited local cookstove manufacturing and testing capacity in Benin. A new subcomponent (B.3) was added at the Government’s request to finance the electrification o f priority localities Tolehoudji, Berienou, Sikki, Guessou-Bani, Derassi, and Tantega-Tetonga. 33. Component C, Sustainable Energy Services, was restructured to focus on key activities by dropping studies that had not already begun. It also added a number of critical studies that remained incomplete after the closure of the ESDP but were deemed essential. Component D, a new component, was added to help prepare critical pipeline projects such as the Adjarala Hydropower project’s ESIA/RAP. Page 17 of 66 The World Bank Increased Access to Modern Energy (P110075) 34. The 2015 restructuring was to extend the closing date of the GEF Subcomponent A.4 by one year, to June 30, 2016, to enable the completion of the distribution of the CFLs to reduce peak demand and the introduction of energy efficiency standards and labels. 35. The 2016 restructuring extended the closing date of the IDA Credit from June 30, 2016, to June 30, 2018, to provide enough time for the completion of key project activities, such as the construction of the Onigbolo-Parakou transmission line, that were required to meet the PDOs. It also streamlined the remaining activities under the project by dropping activities that had not yet begun and were not critical for achieving the PDO. This involved dropping the installation of protection and relaying equipment under Subcomponent A.1(b). Component C’s study on the SBEE restructuring was also dropped, as the GoB decided to use funding from the Millennium Challenge Corporation (MCC) to finance it. The topographic studies for the Adjarala dam in Component D were dropped as IDA financing for the project was no longer being pursued. 36. The 2018 restructuring was to extend the closing date by an additional six months to December 31, 2018. The main outstanding activity was the completion of the Onigbolo-Parakou transmission line which required additional time because of the rainy season. The extension also allowed the World Bank to support the client implementing corrective measures on safeguard activities related to the construction of the transmission line and the electrification of some rural areas following the supervision mission conducted in March 2018. 37. Most of the changes related to time lines or funding arrangements and therefore did not have a substantial change on the project’s theory of change. The PDO and GEO remained relevant and unchanged throughout the life of the project. The most substantial change, dropping the funding of the REF, was restructured to address access in another way, through grid connections of priority localities. II. OUTCOME A. RELEVANCE OF PDOs 38. This ICR uses a split ratings approach to assess project outcomes. It pursues this approach because the 2013 restructuring included significant changes to the component financing US$15.62 million equivalent in cancelled funds and also changed the Results Framework to have nine new project indicators and five intermediate indicators added. Two intermediate indicators were also dropped to reflect the restructuring. The two segments are therefore the original project (2010–2013, with 11 percent of total project disbursement) and the restructured project (2013–2018, 89 percent of total project disbursement). The distribution of ranking is displayed in Table 3. Table 3. Overview of Split Project Ratings Before 2013 Restructuring After 2013 Restructuring Relevance of objectives High High Subobjectives 1 and 2: Negligible Substantial Subobjective 3: Negligible Substantial Efficacy Negligible Substantial Efficiency Negligible Modest Outcomes rating Highly unsatisfactory Moderately satisfactory Outcomes rating value 1 5 Amount disbursed (US$, millions) 4.5 52.53 Page 18 of 66 The World Bank Increased Access to Modern Energy (P110075) Before 2013 Restructuring After 2013 Restructuring Disbursement (%) 11 89 Weight value 0.11 4.45 Total weights 4.56 Overall rating Moderately satisfactory Assessment of Relevance of PDOs and Rating Original Project (2010–2013; 11 percent of total disbursed resources) Rating: High Restructured Project (2013–2018; 89 of total disbursed resources) Rating: High 39. The PDO was to improve reliability, efficiency, and access to modern energy services in Benin. 40. The GEO was to reduce global greenhouse gas emissions through the introduction of energy- efficient appliances in Benin’s residential and commercial sector. 41. Throughout project implementation, the project was aligned with the Government’s policy direction for the energy sector and the World Bank’s country strategies. The project design and objectives were consistent with the Government Action Program (Programme d'action gouvernemental, PAG) of 2016. Benin had emphasized the need to modernize its infrastructure, especially in the energy sector, to make the country have a more competitive business climate. The PAG lists energy as a priority sector. It references the Adjarala dam as part of its strategy for developing renewable energy, the importance of improving the SBEE’s grid management and reinforcing the distribution grid, and demand-side management.5 42. The project’s objectives were consistent with the key pillars of the World Bank’s strategies that overlapped with the project implementation period. The project overlapped with three Country Assistance Strategies (CASs): FY09–12, FY13–17, and FY19–23. At approval, the project was closely aligned with CAS FY09–FY12, which emphasized the importance of cost-effective electricity supply as part of Pillar 2, on infrastructure development. Energy was included as one of the three priority areas to be supported. CAS FY13–FY17 also emphasizes increasing access to energy and the quality of infrastructure services as a priority area. The CAS references the IAME Project, rehabilitation and expansion of the distribution network, and the Adjarala dam as important areas of work to meet its strategic objectives. 43. Despite the project’s extended time frame, the project’s relevance remained high. The FY19–23 CAS’ focus area 1, on structural transformation, competitiveness, and productivity, has four objectives that aim to help Benin achieve the structural transformation of its economy that is a top priority for action in both the Systemic Country Diagnostic (Report No. 114822-BJ) and the PAG. Objective 2 is improving the quality of infrastructure and emphasizes increasing electrical generation capacity, maximizing finance for development for electricity generation, climate co-benefits, building governance capacity, and women’s economic empowerment in the energy sector. The IAME Project remained relevant to sector priorities as the construction of transmission lines and reinforcement of substations will reduce transmission losses and increase Benin’s ability to import reliable, efficient, and cheaper generation from neighboring countries. A regional World Bank project, the WAPP’s North 5Présidence de la République du Benin. 2016. Benin Révèle: le Nouveau Départ, Programme d’Action du Gouvernement 2016–2021. Page 19 of 66 The World Bank Increased Access to Modern Energy (P110075) Core/Dorsale Nord Region Transmission project, was approved in the fall of 2018 and shares a similar objective of strengthening regional power trade and reducing the cost of electricity. Furthermore, the IAME Project addressed the SBEE’s performance, capacity building for sector governance, and women’s economic empowerment through energy access. 44. The GEO was also highly relevant to Benin’s national policy objectives. The 2016 PAG references demand-side management as an action area. This is in line with Sustainable Development Goal (SDG) 7.3 ‘doubling the global rate of improvement in energy efficiency’. Moreover, its importance is further underlined by the Intended Nationally Determined Contribution commitments made by Benin at the 2016 Paris Conference of Parties, which established a conditional commitment of 3.5 percent greenhouse gas reduction by 2030 and an unconditional commitment of 21.4 percent reductions.6 B. ACHIEVEMENT OF PDOs (EFFICACY) Assessment of Achievement of Each Objective/Outcome Original Project (2010–2013; 11 percent of total disbursed resources) Rating: Negligible PDO: To improve reliability, efficiency, and access to modern energy services in Benin 45. There were no substantial deliverables before restructuring. The project had a 9 percent disbursement rate after three years of implementation (against the original total financing amount; 11 percent against the revised financing amount after restructuring in 2013). By 2013, the contracts for the transmission lines had been signed and site mobilization was ongoing. A portion of the contract for the distribution subcomponent had been signed. Most of the contracts for the biomass subcomponent had been signed and the implementation of the forest management plan had begun. Implementation of the studies under Component C was slower than expected. Revised Project (2013–2018); 89 percent of total disbursed resources) Rating: Substantial PDO: To improve reliability, efficiency, and access to modern energy services in Benin 46. The project mostly achieved its objectives. Subobjective 1 and 2: to improve efficiency and reliability in modern energy services in Benin7 47. The outputs generated to achieve this are the following:  Construction of the 254.7 km Onigbolo-Parakou 161 kV transmission line (estimated at 280km at appraisal)  Reinforcement or rehabilitation of 9 substations 6 Ministère de l’Environnement Charge de la Gestion des Changement Climatiques du Reboisement et de la Protection des Ressources Naturelles et Forestières, Contributions Prévues Déterminées au Niveau National, 2015. 7 Subobjective 1 (reliability) and Subobjective 2 (efficiency) are being assessed together because activities such as construction of transmission lines and rehabilitation of substations contribute to both reliability and efficiency. Page 20 of 66 The World Bank Increased Access to Modern Energy (P110075)  Installation of 45,000 prepaid meters 48. The project substantively achieved its objective of improving the reliability of electricity in Benin by establishing N-1 criteria and reducing outages. Achieving N-1 criteria was met when the Onigbolo-Parakou transmission line came online in November 2018. Meeting N-1 security criteria means that if any one transmission line fails or is required to shut down, network security is still guaranteed. This is important for a power grid because it means that if a component of the grid fails, there will not be any undue interruptions and the failure will not cascade throughout the network. Benin’s grid was vulnerable to this because it was reliant on a single line to transport electricity to the northern part of the country. With the completion of the IAME Project, the network now comprises a circle and is much more resilient when one component of the grid fails. 49. The project also succeeded in improving reliability by reducing power outages. This can be seen in the data on outages from key substations in the project area (Figure 2). From 2013 to 2015 there were several outages, reaching a total of 8,387 hours in 2015. As the project’s work on substation rehabilitation and installation of prepaid meters took effect, the cumulative duration of outages decreased rapidly and reached only 1,623 hours in 2017. Power outages slow down economic productivity, which is outlined in section 1.A., under rationale for World Bank assistance. Figure 2. Total Annual Outages in Hours, for Akpakpa, Gbegamey, Vedoko, Maria Gleta, and Seme Substations 9,000 8,387 8,000 7,480 7,000 Total outages (hours) 6,000 5,724 5,018 5,000 4,000 3,000 2,000 1,623 1,000 - 2013 2014 2015 2016 2017 Source: The SBEE annual reports. Note: includes estimates for Akpakpa for 2013 and 2014. 50. The IAME Project has the potential to make an important contribution to improving the efficiency of Benin’s transmission and distribution network, but the impact has not been fully realized yet and this is a partially achieved indicator. Quantifying the contributions are difficult because of the delays in implementation and the shortcomings in the way the indicator on transmission losses was structured. The delays in implementation meant that construction of the Onigbolo-Parakou line was completed only in November 2018, only a few weeks before project closing. It will take 12 months until the line transports a full load of electricity. Once the line is fully loaded, it is expected to have a significant contribution to transmission losses as it significantly reduces the distance that electricity imported from Nigeria must travel to reach the northern part of the Page 21 of 66 The World Bank Increased Access to Modern Energy (P110075) country (these reasons are outlined in paragraph 16). There is some early data available from CEB that suggests that the transmission line will perform as expected. The transmission line had transported 183 GWh by Sept 1, 2019. The annual rate of transmission losses for 2018 was 6.13%, whereas the average from Jan 1 – Sept 1 2019 was 4.34%, indicating improved performance following the loading of the line (Figure 3). CEB has also recorded clear improvements in the voltage levels on the grid. Figure 3: CEB transmission grid has reduced its losses (%) since Nov 2018 Source: CEB data 51. Another consideration is that the indicator only measures transmission losses in GWh. This fails to account for the fact that with increased flow on the network, the amount of losses in GWh can increase while the percentage of losses might remain constant or decrease, indicating improved efficiency. In 2009, the losses on the transmission network were 51 GWh and the total flow on the network was 937 GWh, creating a loss rate of 5.44 percent. In 2017, the quantity of losses on the transmission network was 62 GWh, a quantitative increase on the quantity in 2009. However, the overall flow on the network, 1,251 GWh, was substantially higher and the loss rate was only 5 percent—suggesting that the network was performing better in 2017 despite having a higher quantity of losses. 52. This report therefore concludes that contributions to improving efficiency were partially achieved as there are data to support this. Moreover, this is an area that can be reconsidered toward the end of 2019 as more data will be available to measure the impact of the Onigbolo-Parakou line. Subobjective 3: To improve access to modern energy services in Benin 53. The outputs generated to achieve this are the following:  1,220,256 people gained access to new or improved electricity service  1,200,000 direct beneficiaries Page 22 of 66 The World Bank Increased Access to Modern Energy (P110075)  3,566 people provided with access to electricity by household connections through the electrification of new localities  1,500 new workers trained in production of efficient woodstoves and increased use of energy efficient woodstoves 54. Following restructuring, the project substantively achieved its objective of improving access to modern energy services. 55. The number of people with access to new or improved electricity services increased to 3,920,256, which exceeds the target of 3,900,000 by 20,256 people. New connections or improved electricity service on the SBEE grid was brought to 217,903 households, representing 1,220,256 people (5.6 persons per household). 56. The project had 2,311,661 direct beneficiaries at closing, exceeding the target of 1,200,000 by 1,111,661 beneficiaries. Direct beneficiaries are (a) people living in localities where the SBEE networks have been strengthened/rehabilitated, (b) the SBEE subscribers benefiting from prepayment meters and low-cost CFL bulbs, (c) households benefiting from gas cooking equipment and improved stoves, (d) the populations of the areas that benefited from the project’s support for the development of income-generating activities (beekeeping),8 and (e) the populations of the villages where the local structures for the management of rural wood-energy markets (the CoForMO kiosks) were installed. 57. The project’s activities in rural electrification (Component B) accomplished its ta rgets following restructuring. The REF was established, a management plan for 300,000 ha of forest was implemented, 1,500 people were trained in the production of efficient woodstoves (exceeding the target of 450), and 3,566 people gained access to electricity through the electrification of new localities (exceeding the target of 3,000). 58. An original target, establishing four pilot generation projects under the REF, was not accomplished and dropped during the restructuring. The cancellation of parts of Component B reduced the project’s contribution to rural electrification, but a new strategy was introduced for electrification. The 2013 restructuring cancelled funding for Subcomponents B.1 (US$8 million for the REF and developing four pilot decentralized generation systems) and the scaling down of Subcomponent B.2 (b) on cookstoves (from US$2 million to US$1.3 million, due to limited local manufacturing capacity). The Government of Benin funding of US$50 million was also cancelled, due the funds not being available. These cancellations reduced the scale of extending modern energy services in rural areas. However, the restructuring also added Subcomponent B.3 at the Government’s request and allocated funds (US$ 1.5 million) to electrify priority regions. These regions included Tolehoudji, Berienou, Sikki, Guessou-Bani, Derassi, and Tantega-Tetonga. Between 2013 and 2018, 3,566 people gained new connections to the grid through the electrification of new localities, exceeding the target of 3,000 people. The restructuring therefore reduced the scale of the project’s electrification activities but, following the restructuring, the project met or exceeded its targets for energy access. 59. In addition to the electrification activities, direct project beneficiaries include the biomass activities. The biomass activities targeted the Moyen Ouémé region, which comprises approximately 20% of Benin’s territory. The region had been exposed to extensive deforestation due to the 8These income-generating activities incentivized the participants to respect the forest management plans and adopt new cookstoves, which could have been perceived as a threat to their traditional source of income (selling charcoal). Page 23 of 66 The World Bank Increased Access to Modern Energy (P110075) production of charcoal to serve the larger markets in Benin. IAME helped to address this by strengthening the decentralization of forest resource management though promoting community- based sustainable woodfuel supply systems, promoting biomass efficiency and interfuel substitution, and supporting local economic development. 60. IAME helped establish the conventions and partnerships needed for the implementation of a forest management plan covering 300,000 ha in the Moyen Ouémé region. Rural markets for fuel wood were also established and 1,500 farmers received training on improved carbonization and logging techniques in the area under the forest management plan. An additional forest management plan covering 300,000 ha for the regions of Dassa-Zoumè, Glazoué, Ouèssè, Savè, and Tchaourou was adopted in December 2018, achieving the project target. The project provided 24,670 new households access to gas cooking equipment and 25,000 households access to improved cookstoves. With the support of the project, the legal, regulatory, and incentive framework for the promotion of biofuel was established. This helped reduce the aggregate demand for woodfuel and pressure on the forests. 61. The biomass activities also provided support to rural communities in logging areas to diversify income-generating activities, including the construction of 16 honey production sites in the communes of Glazoué and Ouèssè and the communes of Savalou and Bantè as part of the extension of CoForMO. The project also built 22 water boreholes in CoForMO areas. In addition, the project purchased beekeeping equipment for new beekeepers in Ouessè, Glazoué, Bantè, and Savalou. This support for local economic development helped provide an incentive mechanism for compliance with the forest management plan. 62. The GEO is to reduce global greenhouse gas emissions through the introduction of energy- efficient appliances in Benin’s residential and commercial sector. GEO Subobjective 1: Energy efficient standards developed and applied 63. The output generated to achieve this is the Establishment of energy efficiency standards and labeling for CFLs and air conditioners GEO Subobjective 2: Compact fluorescent lightbulbs installed 64. The output generated to achieve this is the Installation of 350,000 CFLs in households that are SBEE customers 65. The project substantively achieved its objective of reducing greenhouse gas emissions through the introduction of energy-efficient appliances. The energy-efficiency measures put in place had saved the power system 11 GWh in annual energy savings, with this figure expected to grow to 65 GWh by 2021. It has reduced peak demand by 6.61 MW. More than 113,000 tons of CO2 emission have been avoided over five years because of the improved efficiency of lighting and appliances. This corresponds to the amount of emissions a 45 MW thermal power plant would generate. A decrease of 4.4 percent of electricity demand (low tension) has been estimated for this period.9 66. Two national norms for energy efficiency have been established. One standard is for the minimum energy efficient performance for lightbulbs and the other for air conditioners. The standards have been approved by the Conseil National de Normalisation. Compliance with these standards is 9Lontchedji, Urbain. 2017. Evaluation finale de sous-volet efficacité énergétique du projet de développement de l’accès à l’énergie moderne. Ministère de d’Energie, de l’Eau et des Mines. Page 120. Page 24 of 66 The World Bank Increased Access to Modern Energy (P110075) currently voluntary, but progress is being made toward passing it into law. A draft decree that established minimal energy efficiency performance standards and an energy efficiency code for bulbs and air conditioners was adopted by the Council of Ministers on 19 December 2019. The Minister of Energy and other relevant Ministers were briefed on initiatives for the national sensibilization, education and communication activities for the 18-month transition period that will conclude on 30 June 2020. The establishment of national norms have proven important in catalyzing further investments in the phasing-out of inefficient lightbulbs in Benin. The World Bank Energy Service Improvement Project (Projet d'amélioration du service énergétique, PASE) (P161015), effective February 2018, includes an activity on replacing inefficient public lighting bulbs with LED bulbs to help reduce peak demand and unpaid municipal electricity bills. This activity has benefited from the development of the norms as they provide a regulatory framework for the sector. 67. Figure 4 displays key data on Benin’s overall emission rates. The data are highly relevant to the GEO; however, there are not enough recent data to see if the project had an impact on the overall carbon intensity of the power sector, which was rising from 1.41 kg to 1.47 kg per kg of oil equivalent energy use for 2012–2014. Figure 4. Benin’s CO2 Emissions Per Capita, 2002–2014 7000 1.5 CO2 intesity (kg per kg of oil equivalent 1.48 Cumulative CO2 emissions (kt) 6000 1.46 5000 1.44 1.42 energy use) 4000 1.4 3000 1.38 1.36 2000 1.34 1.32 1000 1.3 0 1.28 2009 2010 2011 2012 2013 2014 CO2 emissions (kt) CO2 intensity (kg per kg of oil equivalent energy use) Source: World Bank data. 68. 69. 4 shows a summary of the achievement for each aspect of the PDO and GEO. Page 25 of 66 The World Bank Increased Access to Modern Energy (P110075) Table 4. Summary of Achievement of Each Aspect of the PDO Indicators Objective Baseline Target Result Achievement PDO level Reduce power losses in transmission 51 24 61 Partially network (number)a achieved Increased number of people with 2,700,000 3,900,000 3,920,256 101% improved access to modern energy and electricity services (number) Benin transmission network responds Does not Responds to Responds 100% to (N-1) criteria (yes/no), has respond to criteria to criteria redundancy and network security criteria GEO level Efficiency standards for appliances Not developed Developed and Developed 100% (lighting and air conditioners) and applied applied and applied developed and applied (yes/no) Compact fluorescent lightbulbs 0 350,000 350,000 100% installed (number) Note: a. Does not reflect the expected improvements from when the Onigbolo-Parakou line becomes fully operational in 2019. Justification of Overall Efficacy Rating 70. The overall project rating for efficacy is Substantial. The project almost fully achieved its objectives. While the original project underperformed and earned a negligible rating for its poor performance, it is not given much weight in the overall rating due to its low disbursement rate (11 percent of the overall project). The satisfactory performance of the restructured project, weighted much more heavily, provides with overall project with a Substantial rating for efficacy. C. EFFICIENCY Assessment of Efficiency and Rating 71. The project suffered from numerous implementation delays and required three extensions to be completed, ultimately surpassing its original closing date of June 30, 2015, by three-and-a-half years. These delays are mainly due to, among other things, a slow procurement process, low technical capacity in implementing bodies, and difficulties with some of the contractors. 72. The project costs were less than originally projected, mainly because of the project restructurings that eliminated components that were not performing (see Table 1 for a complete accounting of project costs). Economic Analysis 73. Consistent with the evaluation at appraisal, an economic analysis was completed for Subcomponents A.1 and A.2 (transmission lines), Subcomponent A.3 (distribution strengthening), and Subcomponent A.5. An economic analysis for Component B was not included in the PAD because it comprised TA (Subcomponent B.1) or a very small investment spread across three activities (US$2.75 million for Subcomponents B2.1, B2.2, and B2.3). The ICR also does not include them in the economic analysis either. TA is excluded from an economic analysis due to the difficulty in monetizing the Page 26 of 66 The World Bank Increased Access to Modern Energy (P110075) economic benefits for TA and capacity-building activities. Components C and D consisted of TA and are therefore not included in the economic analysis. The PAD also included a financial analysis, but it was only a projection of the CEB’s and SBEE’s finances. The projections proved to be highly inaccurate as both companies’ finances have significantly worsened since 2010—in large part due to the nonpayment of consumption from the public sector and persistent and significant technical and commercial losses. These issues were not addressed in the IAME Project as it was not designed to address the operational or commercial efficiency of Benin’s utilities. The SBEE’s finances are now being addressed as part of Energy Service Improvement Project (Projet d'amélioration du service énergétique, PASE) (P161015) and a multisectoral development policy operation. A financial analysis for the ICR was therefore deemed to be not relevant and was not included. Table 5. PAD Economic Analysis Results NPV at 10% Discount Rate (US$) EIRR (%) Transmission lines (Subcomponents A.1, A.2, and A.3) 59,953,797 22 Distribution (Subcomponent A.4) 10,107,847 16 Energy efficiency (Subcomponent A.5) 4,479,606 53 Note: NPV = Net present value; EIRR = Economic internal rate of return. Table 6: Economic Analysis Results at Project Completion ENPV at 10% Discount ENPV at 6% Discount EIRR (%) Rate (US$) Rate (US$) Transmission lines (Subcomponents 58,394,696 89,409,920 36 A.1, A.2, and A.3) Distribution (Subcomponent A.4) 86,615,748 136,271,185 40 Energy efficiency (Subcomponent A.5) 5,653,800 7,091,957 92 Note: ENPV = Economic net present value. 74. The economic returns on the investments were positive and, in some cases, exceeded the projection at appraisal, despite implementation delays. The transmission line analysis, however, has been completed using the same assumptions on the savings from reduced losses, increased reliability of transmission, and reductions in non-distributed energy that were used in the PAD, as construction of the line was completed just before project closure and data on its impact are not yet available. 75. The positive economic returns can be in part attributed to the use of updated and more accurate data on the Benin power system.  The marginal cost of generation has been updated to the cost of imports (US$0.11 per kWh),10 a more accurate reflection of the marginal cost of generation than that used in the PAD analysis (the average generation cost).  The cost of non-distributed energy was updated to reflect the current economic value (US$0.90 per kWh).11 76. The updated data on the cost of nondistributed energy make the investments more economical than the value used at appraisal, as the supply of electricity has more economical value in 10From CEB Etudes Complémentaires : options de réforme de la CEB by Castalia, November 2018. 11From Etude et plan tarifaires sur l’électricité au Benin : Rapport provisoire 1 : études complémentaires by Idea Consult, July 2017. Page 27 of 66 The World Bank Increased Access to Modern Energy (P110075) 2018 than it did in 2008 because of the country’s economic growth. A detailed discussion of each investment and the economic analysis can be found in annex 4. 77. The project rating for efficiency is Modest. While the project’s investments provide substantial economic results, the lengthy implementation delays that resulted in the project concluding three-and-a-half years after the original closing date are below expectations and lower the project’s rating. However, the delays did result in improvements to the project’s work in budgeting the funds for contractor compensation before the work begins, executing the required studies prior to the implementation of projects, and the necessary reforms in procurement. D. JUSTIFICATION OF OVERALL OUTCOME RATING Rating: Moderately Satisfactory 78. The project remained relevant to the country’s development objectives even though it took eight years to complete. The project’s objectives were substantively achieved, and it made important contributions to the reliability, efficiency, and access to modern energy services in Benin. The project experienced serious implementation delays, which reduced the efficiency of the project. But the economic return on the investments remained positive and favorable and in similar ranges to the projections at appraisal, resulting in overall modest efficiency. The project brought important advancements to Benin’s power system and citizens; it also positions Benin to further expand reliability, efficiency, and access and achieve its SDG goals. E. OTHER OUTCOMES AND IMPACTS (IF ANY) Gender 79. The 2013 project restructuring added a gender perspective to tracking the project’s impact. The nexus between gender and energy access is important because men and women differ in the purposes for which they need and use energy and in their levels of access. Access to modern energy services can benefit women by saving them time by substituting for manual labor and reducing workloads, improving health by reducing indoor air pollution, offering social benefits, and boosting income.12 80. In the 2013 restructuring, the project added a PDO indicator for ‘direct project beneficiaries, female’. Using demographic data from the Institute National de la Statistique, it is estimated that the project had 2,311,661 direct beneficiaries. Just over half (51.7 percent) of these were women, creating 1,195,129 direct women beneficiaries. The direct project beneficiaries are (a) the people living in the localities where the SBEE grid was reinforced/rehabilitated, (b) the connections that installed prepaid meters or CFLs, (c) the households that benefited from woodstoves, (d) the populations that benefited from the revenue-generating biomass activities, and (e) the populations that benefit from the charcoal markets. A full account of the project’s impact on gender issues in Benin requires a stand-alone survey targeting the project’s beneficiary communities and households. Institutional Strengthening 81. TA to the energy sector was useful. This included an audit of the SBEE management and TA to improve the financial management of the SBEE. An assessment of human resource management 12Dutta, S., A. Kooijman, and E. Cecelski. 2017. ENERGIA, International Network on Gender and Sustainable Energy, Energy Access and Gender: Getting the Right Balance. State of Electricity Access Report. Page 28 of 66 The World Bank Increased Access to Modern Energy (P110075) and a performance improvement action plan was developed for the Accounting and Budget Department at the SBEE. Capacity building for the regulation of the electricity sector was also provided. Key studies for the development of the sector were financed, such as an electricity sector master plan and environmental and social management frameworks and impact assessments were developed. 82. The main institutional strengthening component of the project, the institutional strengthening of the Beninese Agency of Rural Electrification and Energy Mastery (Agence Béninoise d’Électrification Rurale et de Maitrise d’Energie, ABERME), was dropped due to a lack of capacity. The IAME Project was initially designed to have the CEB, SBEE, ABERME, and the Project Implementation Unit (PIU) as implementing agencies. At appraisal, the project had identified the low capacity in the ABERME as a risk. It provided support to help build the necessary capacity to implement the project. However, it became apparent during implementation that the technical capacity to properly implement the project was not available. The ABERME was relieved of its implementation duties. Mobilizing Private Sector Financing 83. Mobilizing private sector financing was not a primary consideration for the project. However, the project did make some minor contributions to attracting private finance in Benin’s energy sector. The GEF-financed work on energy efficiency aimed to create an enabling environment for an energy-efficient industry. It succeeded in doing this in most areas. Based on interviews during the ICR mission to Benin, there is now a market for more energy-efficient lightbulbs in the country as consumers are now aware of their benefits. Light emitting diode lamps are now preferred to CFLs, but their introduction will benefit from this awareness. Other areas of work were less successful. A law establishing standards and labelling would have brought greater certainty to the market of energy- efficient appliances, but it has not yet passed by parliament. 84. Component 2’s biomass program also provided support for improved cookstoves and liquefied petroleum gas interfuel substitution programs, both of which were private sector based. Poverty Reduction and Shared Prosperity 85. The project’s implementation has had an impact on jobs, economic growth, household income, and service delivery, but it had not been assessed in a comprehensive way. 86. The positive impact of the biomass program on participant’s lives is worth highlighting. The biomass program included incentive mechanisms to help with compliance with the sustainable community forest management plan, as there was a risk that regulation of the forest would be perceived as limiting one of the surrounding villages’ few sources of employment. The incentive mechanism included encouraging community participation in forest management decisions, improving access to and sustainable exploitation of non-wood forest products by the local communities, generating forest-related employment for local people and promoting sound forest exploitation techniques, promoting apiculture as an alternative to deforestation activities, and using forest revenues to provide financial support to local development plans. This program had only a small amount of funding, but the impact and positive reception of it by its participants is notable. The ICR mission visited some of the participants in this program, such as the village that received the infrastructure and training to establish apiculture harvesting. There was noticeable enthusiasm for the program because of the revenue and employment it generated for the village. Page 29 of 66 The World Bank Increased Access to Modern Energy (P110075) Other Unintended Outcomes and Impacts None. III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. KEY FACTORS DURING PREPARATION Objectives 87. The IAME Project’s objectives of improving reliability, efficiency, and access in Benin’s energy sector were adequately defined. However, they were broad objectives and some of the accompanying targets had shortcomings. The objective on meeting reliability was primarily based on a target for N-1 criteria for network security. This was clearly defined and based on a clear need for Benin’s power sector (see paragraph 95 for complete analysis of the needs). The objective and target on access were moderately well designed; the funding of the REF was unsuccessful, but the 2013 restructuring led to clear targets for increasing household connections to the electricity grid. The targets following the 2013 restructuring were also realistic, managing to make a substantial contribution to electrification in the country without being too ambitious. 88. The objectives and targets on reducing transmission losses were not rigorous enough to be a complete measurement of progress on transmission efficiency. The shortcomings of the objectives and targets on transmission losses meant they could not insulate the project from other activities on the network that could affect losses. The baseline and target for reductions in losses were measured in GWh. This was not appropriate as the quantity of losses can be affected by the total flow of electricity on the network. In 2009, the losses on the transmission network were 51 GWh and the total flow on the network was 937 GWh, creating a loss rate of 5.44 percent. In 2017, the quantity of losses on the transmission network was 62 GWh, a quantitative increase from 2009. However, the overall flow on the network, 1,251 GWh, was substantially higher and the loss rate was only 5 percent— suggesting that the network was performing better in 2017 despite having a higher quantity of losses. Other endogenous factors also affected this target. The quality of the voltage of the electricity supplied by the Transmission Company of Nigeria (TCN) dropped in some years, creating low tension on the CEB grid. 89. The GEO was clear in its objectives of improving lighting and appliance efficiency. The energy-efficiency work also had a broader objective of demonstrating the technical and economic viability of energy-efficient technologies and measures. While the objective of introducing standards and labels for lightbulbs and air conditioners and disseminating efficient lightbulbs to households through a bulk procurement scheme is concrete, the PAD also describes an associated objective of promoting an energy-efficiency culture through consumer information and education, capacity building, and awareness for major players. This is less concrete and more difficult to measure. 90. The Results Framework was sufficient but was hindered by repetitive indicators and many changes. The Results Framework changed twice with restructurings in 2013 and 2016. The 2013 restructuring change added nine new project indicators and five intermediate indicators and dropped two intermediate indicators. The lack of continuity in the Results Framework reflects the implementation challenges the project faced and makes it more difficult to assess the project, but they also reflect the World Bank team’s ability to adapt the project to developments in the field. Page 30 of 66 The World Bank Increased Access to Modern Energy (P110075) 91. The project was evidently not as prepared for implementation as it should have been. The project experienced a significantly delayed beginning due to low implementation readiness and the need to complete a number of studies before construction. These issues are explained in more detail in section 3.B. Project Design 92. The IAME Project was well designed and addressed the main challenges of Benin’s power sector. Transporting electricity was a challenge for the CEB and technical losses, frequency regulation, and maintenance further complicated the management of the transmission and distribution grid (see paragraphs 4 and 16 for a full analysis of these needs). 93. The team worked with the client to design a project that responded to their needs. These discussions were informed by experiences from the ESDP. Negotiations for a TA package were held, but the Government thought it could not justify the TA. But the Government made space for an investment project and had strong interest in establishing N-1 security in their power system. 94. Component A (electrical network up-grading) had five subcomponents that were individually well designed to address clear and important needs in Benin’s power system. However, combining them all as one component to cover transmission, distribution, and energy efficiency created a disjointed component; they should have been separated into different components. 95. The transmission subcomponents addressed a clear and important need for Benin’s transmission network. Benin received almost all its electricity from either Nigeria or Ghana through trade. This created challenges as the electricity had to be transported over long distances, creating high rates of electricity losses. It also meant that the system did not meet N-1 security criteria. Meeting N-1 security criteria means that if any one transmission line fails or is required to shut down, network security is still guaranteed. This is important for a power grid because it means that if a component of the grid fails, there will not be any undue interruptions and the failure will not cascade throughout the network. Benin’s grid was vulnerable to this because it was reliant on a single line to transport electricity to the northern part of the country. With the completion of the IAME Project, the network now comprises a circle and is much more resilient in the face of a failure of one component of the grid. 96. The design of the distribution subcomponent also addressed a clear need for the network. Some substations were more than 25 years old and needed upgrades. They also needed to increase their cable capacity to manage higher frequencies better. The introduction of prepaid meters as part of the restructuring was a very strong adjustment in the project design as it helped increase revenue collection. 97. The availability of a GEF grant and the large potential benefits from some energy-efficiency work led to the energy efficiency component being included. The pronounced difference between peak load (at 120 MW) and base load (at 70 MW) presented a clear challenge to the power system. Meeting this load at peak hours required keeping power plants on standby and incurring high capital costs. The significant gap between peak load and base load was because of the widespread use of inefficient appliances such as incandescent lightbulbs and air conditioners. The baseline scenario at the time was to continue to use fossil fuel-based power plants to meet the peak demand and increasing electricity requirements of households. Energy efficiency was facing many barriers in Benin because of a limited budget; a lack of effective official engagement to promote energy efficiency; a lack of an enabling environment for an energy-efficient industry; the lack of policy instruments to Page 31 of 66 The World Bank Increased Access to Modern Energy (P110075) promote energy-efficient products; the low cost of inefficient equipment combined with the low income of most households; and the lack of education of decision makers, consumers, and equipment suppliers on energy efficiency. 98. Component B (electrification and modern energy services) was clearly designed but proved to be over ambitious. The ABERME was a newly developed agency and its limitations were identified during project design. The project provided assistance to establish the ABERME’s financial management and procurement abilities, with the aim of building the capacity for the ABERME to manage the REF. However, it became evident that the challenges of managing these activities exceeded the agency’s abilities and little progress was being made. The REF was dropped during the 2013 restructuring and the ABERME’s responsibilities as an implementation agency shifted to the PIU due to a lack of implementation capacity. 99. The addition of a biomass component was questioned at the decision meeting, but it was kept in the project in part because of the strong interest from the client in following a benefit-sharing approach that would ensure that the people ‘below’ the transmission lines saw benefits from the project as well. The framework for the biomass component was put in place by the ESDP. 100. Component C (sustainable energy services) was simple in its design and addressed a need to address technical capacity. A lack of technical capacity of the implementing agencies proved an impediment to project implementation. This component anticipated this and provided assistance to build the technical capacity of the project and the energy sector though activities such as designing an M&E framework for the CEB. 101. Component D (project preparation) provided assistance to the preparation of potential World Bank involvement in a project involving the Adjarala dam. The addition of this was motivated by the lesson from the IAME Project’s slow procurement at the beginning, specifically that beginning studies such as ESIAs and RAPs early are important for strong project implementation. It provided support for the preparation of potential IDA financing of a project involving the Adjarala dam, but it was ultimately decided that the World Bank would not pursue investing in the project. 102. The biggest shortcoming in project design was not identifying the lack of preparedness for implementation, such as how long it would take to complete the ESIA and RAP for the transmission lines. Operation-specific risks identified in the PAD included (a) the inability to complete co-financing arrangements, (b) the inability to implement the project within budget and in accordance with the proposed schedule, (c) weak financial management capacity at the SBEE, (d) adverse social and environmental consequences mainly associated with the construction of high voltage transmission lines, and (d) a possible waning of government commitment to project implementation. Both (b) the risk associated with implementation capacity and the project not being completed within budget and in accordance with the proposed schedule and (d) adverse social and environmental consequences associated with construction of the high voltage transmission line were rated as ‘Low’ in the PAD. However, the financial management assessments concluded that the risks associated with the SBEE were ‘High’ and with ABERME ‘Substantial’. Reasonable risk mitigation measures were put in place to manage their lack of experience and capacity. B. KEY FACTORS DURING IMPLEMENTATION 103. The project experienced a significantly delayed beginning because of low implementation readiness and the need to complete a number of studies before construction. The project was approved on June 23, 2009 and became effective on April 30, 2010. The first disbursement was made Page 32 of 66 The World Bank Increased Access to Modern Energy (P110075) in September 2010, 14 months after approval. Disbursement remained negligible (2 percent) until 2013, substantially delaying project implementation. The project’s progress toward achieving the PDO and GEO was rated Satisfactory until March 2013, when it was downgraded to Moderately Unsatisfactory. Its rating was upgraded to Moderately Satisfactory on February 2015 and remained at this level until project closing. The overall project risk rating began and remained at Moderate until February 2015, when it was changed to Low. Procurement and Contract Management (Government and/or Implementing Agencies) 104. From the outset, issues with procurement significantly delayed project implementation. The feasibility studies and environmental studies for the transmission lines had to be complete and the bidding documents were not ready at project effectiveness. These documents took time to complete. 105. By April 2012, only 41 percent of the total contract was under procurement. This began to improve by the 2013 restructuring, when the effort to improve procurement resulted in commitments of US$22 million, representing 31 percent of the total project financing and procurement process having been initiated for approximately 70 percent of works and goods contracted and 75 percent of the consultant’s services contracted. 106. The World Bank team was proactive in meeting with the Personne Responsables des Marchés Publique du Ministère or the National Director of Public Contracts Control (Directeur National de Contrôle des Marchés Publiques, DNCMP) to try to urge faster approval of the IAME Project’s contracts or discuss building further procurement capacity. In some cases, this proved fruitful but in other cases the process was not sped up. The issues encountered included delays in obtaining the opinions of the DNCMP (often one to two months); very long delays in signing and approval of contracts, sometimes exceeding four months; and non-permanent access to the Integrated Public Financial Management System (Système Intégré de Gestion des Finances Publiques, SIGFIP) for the commitment of the counterparty of the contracts. One reason for the delays was frequent turnover among the personnel in the relevant departments. Another reason is that the threshold for contract size is lower for the DNCMP than for the World Bank. This affected the biomass component, where numerous small contracts required approval. Systemic issues affected procurement throughout the project. There were also delays because the two transmission lines and related contract approvals were tendered as a joint process among the co-financiers (World Bank, EIB, and KfW). 107. Further delays were encountered in 2015, when a World Bank mission noted that a main point of delay was the execution of the procurement for lot 2A for the construction of the 161 kV Parakou-Onigbolo line and connection for the 161 kV and 20 kV substation at Onigbolo by the SAE- Gammon consortium. This delay was because of the contractor changing ownership, leading to an inconsistency in the name of the contract on the invoices being sent to the Bank and the suspension of works. An arrangement was eventually agreed by the parties involved. Implementation Capacity (Government and/or Implementing Agencies) 108. The project delays are also attributable to selecting implementing agencies that lacked the capacity to properly manage the project. The CEB, SBEE, and ABERME were originally selected as implementing agencies for (sub)components of the project. The SBEE did not have the capacity to manage its subcomponents and its fiduciary duties were removed and given to the PIU. The ABERME was supposed to manage the REF, but it proved to have very low capacity for financial management, so its fiduciary duties were removed (the REF was eventually dropped). Other delays to the project Page 33 of 66 The World Bank Increased Access to Modern Energy (P110075) occurred because the CEB lacked the funds to make the payments required under the RAP, leading to the to-be relocated people blocking progress on the line. The CEB had to request a short-term loan from a commercial bank to cover the portion of the payments they could not cover. Construction of the transmission line financed by IDA only began in 2016. The CEB also, at times, had disputes with the contractors and the owner’s engineer, which affected their ability to work productively. Issues with Contractors (Partially outside the Scope of World Bank/Implementing Entities’ Control) 109. The transmission line experienced additional delays because of multiple changes in the contractors. The original contractor for the Onigbolo-Parakou transmission line, SAE, was purchased by GAMMON in 2015, during the construction of the line. GAMMON was then purchased by TELL in 2017. Each time the contractor was restructured, the PIU financial management team had to update the payment details, which could be a lengthy process taking up to six months. The workers in the field were not paid during this time and went on strike. The contractors also experienced difficulties mobilizing qualified workers and, in some instances, failed to supply equipment in time, all of which further slowed progress. 110. Implementation of the GEF energy efficiency component proceeded without any notable delays or challenges. IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. QUALITY OF MONITORING AND EVALUATION (M&E) Rating: Modest M&E Design 111. Overall, the M&E design was modestly suited for evaluating the project’s impact. The PAD presented a comprehensive results monitoring framework in annex 3. It set out the project objectives, final and intermediate outcomes, and their respective indicators. It had a matrix table showing the arrangements for results monitoring, with a baseline and annual target values for each indicator, and the methodology for data collection and reporting. Minor issues included some PDOs or intermediate outcome indicators being repetitive or unclearly worded. No theory of change was presented as it was not required at the time. 112. However, the indicator to measure power losses in the transmission network proved to be problematic. The aim of this indicator is important, but its formulation did not capture the dynamics of transmission losses in an open system. Power losses in transmission networks can be influenced by the quality of the electricity injected into them as well as the overall flow. Both these issues affected Benin’s transmission grid during the project. In 2017, the TCN, the main importer of electricity into Benin, had poor quality of supply voltage, resulting in voltage drops in the network. In another instance, construction of the Sakété -Onigbolo line led to the overloading of the Bonicon-Onigbolo and Sakété-Cotonou lines, which further induced technical losses. 113. The actual value for transmission losses at project closing was 63 GWh, far exceeding the target of 24 GWh. This is mainly because construction of the Onigbolo-Parakou transmission line was not completed, but it is also due to an increase in flow across the transmission network (due to increase in imports or other lines being shut down). With higher flow on the network, the quantity of Page 34 of 66 The World Bank Increased Access to Modern Energy (P110075) losses in GWh will increase, even if they are decreasing as an overall portion of total flow (see paragraph 88 for a more detailed explanation). 114. The difficulties of measuring transmission losses have been discussed in an ESMAP study (2009), which suggests that while system loss reduction, measured as a combination of technical (for example, heat or copper losses, magnetic losses, transformation losses) and nontechnical losses (for example, commercial losses, metering failures and theft), is an important metric, it is difficult to operationalize. The overall level of inefficiency can be estimated, but it does not define where the problems are located. The level of system loss could be affected by multiple factors in addition to the increase in the available transmission and distribution capacity under the project.13 This was evident in the case of the indicator on power losses in the transmission network. 115. The GEO had two indicators and two intermediate indicators and provided satisfactory M&E for the energy efficiency component. M&E Implementation 116. The M&E implementation was overall satisfactory. Aide Memoires were routinely filed to document project progress and important issues addressed during the missions. Sixteen Implementation Status and Results Reports (ISRs) were filed over the duration of the project and they systematically reported on the status of outcome indicators. However, while ISRs 1 and 2 were filed, they were not uploaded to the operations portal and were not available for review. There would have been little of substance in these ISRs as it was clear that very low disbursement was the overriding problem to be addressed at the time. 117. M&E implementation was the responsibility of the PIU. This unit performed the same function for the ESDP and were therefore familiar with the process. The responsibilities for the M&E specialist was to design the data monitoring program, collect information under the program, and report on the program’s progress. The Results Framework was adjusted accordingly following the 2013 and 2016 restructurings (see Table 2 for an overview of changes to the PDOs). M&E Utilization 118. The project teams were vigilant in evaluating whether the indicators were suitable and took action to correct where necessary. Aide Memoires and ISRs were prepared on a regular basis and have helped the project stakeholders to be permanently informed of the progress in the field toward the expected outcomes. Implementing agencies used their respective monitoring reports to inform their respective project implementation adjustments and keep project implementation on track. 119. The M&E data were used during the project restructurings in 2013 and 2016 to inform the addition of new targets or adjust targets, such as the nonperformance of Subcomponent B.1 (REF). Nine PDO indicators were added in response to project developments and lessons learned and to ensure that the project was responsive to evolving government priorities. 120. The GEO component was assessed by a thorough M&E report by the nongovernmental organization EVA. The report is an in-depth analysis of the project. It runs to 209 pages and assesses 13Tallapragada, P., M. Shkaratan, A. Izaguirre, J. Helleranta, S. Rahman, and S. Bergman. 2009. Monitoring Performance of Electric Utilities. ESMAP, page 11. Page 35 of 66 The World Bank Increased Access to Modern Energy (P110075) the original methodology, the evaluation of the design and implementation of each subcomponent, and an evaluation of the results.14 Justification of Overall Rating of Quality of M&E 121. M&E performance was Modest. The initial design was appropriate, and needed adjustments were made as required during project implementation, based on the feedback provided through supervision and reporting. Minor problems, such as the difficulties of formulating an indicator that reliably measures transmission losses, were encountered but did not disrupt the ability to assess the impact of the transmission line on system losses through other data. The practical monitoring arrangements and appropriately executed M&E systems were key factors in successful project implementation. B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE Environmental and Social Safeguards 122. At appraisal, the project was rated category B for safeguards, requiring a partial assessment. The project triggered 10 safeguard policies: Environmental assessment (OP/BP 4.01), Natural Habitats (OP/BP 4.04), Pest Management (OP 4.09), Physical Cultural Resources (OP/BP 4.11), Involuntary Resettlement (OP/BP 4.12), Forests (OP/BP 4.36), Indigenous Peoples (OP/BP 4.10), Safety of Dams (OP/BP 7.60), Projects in Disputed Areas (OP/BP 7.60), and Projects on International Waterways (OP/BP 7.50). A number of diverse impacts, especially relating to the construction of the transmission lines, were to be mitigated during implementation. 123. Implementation agencies prepared ESIAs and Environmental and Social Management Plans (ESMPs). The ESMP was managed by the CEB’s environmental service, which was strengthened for this purpose. These documents were disclosed in Benin and in the World Bank’s InfoShop on January 21, 2009. The environmental safeguards remained in compliance throughout the project implementation period. 124. At appraisal, key environmental concerns with regard to the transmission lines included the loss of about 17,800 m3 of unprotected biomass. However, the ESIA found that the overall benefits of the project outweigh its minor negative impacts. It also found that there was no real alternative to the proposed line routing and that it also already circumvented urbanized areas and classified forests and instead mostly passed through land used for agricultural activities. 125. The construction of the transmission lines had relatively significant negative social impacts. At the time of appraisal, a RAP found that for both lines about 1,322 people would need to be resettled and/or compensated. The ‘rights-of-way’ for both transmission lines avoided suburban and urban areas, passing through agricultural lands instead. Sacred areas were also avoided. Extensive public consultations were held with key stakeholders along the proposed transmission lines. The ESIAs found that the overall benefits of the project have more positive than negative effects, especially for urban areas where local inhabitants encounter frequent power shortages. The RAPs were disclosed through the InfoShop on January 21, 2009, and in-country on January 29, 2009. 14Attached in annex 6. Rapport Eva, Évaluation Finale du Sous-Volet Efficacité Énergétique du Projet de Développement de L’Access a l’Energie Moderne. Page 36 of 66 The World Bank Increased Access to Modern Energy (P110075) 126. The project implemented the proposed mitigation measures during construction and operation phases but experienced delays and some related disturbances. These were eventually addressed, and no residual negative impacts are reported. The World Bank’s environmental and social specialists continuously oversaw the implementation progress and supported the execution of the safeguards instruments. In December 2012, a mission with a safeguards specialist provided an in- depth review of the implementation status and rated it Moderately Satisfactory, noting that the arrangements of integrating the safeguard measures were not always followed and that certain documents (studies, permits/certificates, monitoring reports) were not disseminated or archived properly. Semiannual reports on safeguard implementation began in 2014. 127. Most payments under the RAP received compensation on time. Implementation of the RAP was to be financed through the CEB. By October 2012, compensation payments to the first 50 km had been made, plans were in place to begin the next phase in December 2014, which left an additional 60 km of the line that was yet to be accounted for. The CEB had assured the project team that all payments would be made by December 31, 2014. They had encountered some resistance from those who had not received their payments. It would later become evident that the CEB lacked the cash to make the payments as planned and had to seek a commercial short-term loan to cover the payments, leading to project implementation delays. Payments were eventually made in early 2015. In March 2018, during a supervision mission, the World Bank found that there were irregularities in the compensation of project-affected persons regarding the construction of the transmission line and the electrification including the existence of 70 project-affected persons who were identified but did not showed up. An agreed action plan was implemented by the client to close these cases including the setting aside of the amount of the compensation by the CEB for a determined period. Financial Management 128. The overall risk assessment of the borrower’s entities who were involved in the project financial management was rated Moderate. The DGE controlled the overall coordination of financial management and accounting activities and was assessed as moderately prepared for financial management responsibilities. However, the financial management assessments varied depending on the implementing agency, with the SBEE being assessed as High, the CEB as Moderate, and the ABERME as Substantial. While the DGE would manage the SBEE’s and CEB’s financial management, the plan was for the ABERME to handle its own operations as soon as its financial management system and capacity comply with the World Bank’s financial management standards. 129. To strengthen the project’s financial management system, an action plan was established with the aim of reducing implementation risk, mitigating corruption risks, improving governance, and sustaining the project’s achievements beyond its term. Particular attention was given to the quality of internal controls and audits to ensure that they were conducted according to international norms and standards. 130. The ABERME and SBEE struggled to perform their financial management duties. The underlying cause was a lack of technical capacity and high turnover of staff despite training and capacity-building activities. These deficiencies significantly contributed to the implementation delays under the project. The 2013 restructuring transferred their fiduciary duties to the PIU. 131. While disbursement rates were low until 2015, the accounting by the PIU was kept up-to-date, the annual work program was analyzed quarterly, and the financial monitoring reports were submitted to the World Bank within the required deadlines. No anomalies were noted in financial management. Page 37 of 66 The World Bank Increased Access to Modern Energy (P110075) Procurement 132. The procurement arrangements, at appraisal, indicated that the overall coordination of procurement activities would be carried out by the ESDP unit at the DGE, which would serve as the project’s overall executing agency and supervise and coordinate the procurement activities of the other implementation agencies (CEB, SBEE, and ABERME). A capacity assessment was only conducted for the ABERME, as the other units were already implementing procurement activities as part of the ESDP, whose procurement implementation was rated Satisfactory. The procurement risk rating at project start was rated Low due to the experience gained under the ESDP. However, this would prove to be an overoptimistic assessment and the SBEE and ABERME struggled to fulfil their roles. In the 2013 restructuring, the SBEE and ABERME had their procurement responsibilities shifted to the DGE, but still provided technical inputs during the bidding process. 133. Issues encountered with procurement during implementation are discussed in further detail above, in paragraphs 104 to 107. C. BANK PERFORMANCE Quality at Entry 134. The IAME Project was well formulated to address an important strategic priority for Benin’s energy sector. The project’s objectives were not overly ambitious but still a substantial challenge for the Government given its experience and capacity. The project also tried to build this capacity as part of Component C, which is important given the lessons learned from their lack of capacity. 135. The economic analysis for the transmission, distribution, and energy efficiency components were carried out at appraisal to support project feasibility. A financial assessment of the sector was also completed. This analysis proved to be highly overoptimistic. The finances for the CEB and SBEE would deteriorate significantly throughout project implementation. The misplaced optimism behind the financial projections for the CEB and SBEE might have been tied to the overreliance on them as implementing agencies and some of the issues that emerged, such as the CEB’s inability to make timely payments to its contractors. 136. Project implementation arrangements related to fiduciary, M&E, and social and environmental issues were mostly well devised. The project benefited from transitioning from the ESDP into the IAME Project. This brought with it familiarity with the World Bank’s procedures and some technical capacity that could be built upon. It was less successful in areas where the project added new responsibilities, such as to the ABERME and SBEE, and in the case of ABERME the team misjudged the agency’s ability to develop adequate project management capacities. 137. Key project risks were correctly identified at appraisal, but there was overconfidence in the project’s ability to address them. This could be seen in the plan to build the ABERME’s capacity, which never materialized and resulted in the agency losing its implementation status. Quality of Supervision 138. Issues with project implementation were adequately identified and mostly addressed quickly. The World Bank team correctly identified issues with the project and adjusted appropriately. The restructurings in 2013 and 2016 in particular demonstrated a responsiveness to developments in the field. Dropping the REF and transitioning implementation duties strengthened the project, Page 38 of 66 The World Bank Increased Access to Modern Energy (P110075) although they could have been addressed earlier given the poor performance of the project. The introduction of prepaid meters was a successful adjustment that strengthened the project’s impact. Restructuring Component B to include electrification of priority areas for the Government demonstrated an attentiveness to the Government’s priorities and an ability to adapt a component that was not performing. Extending the project in 2016 and 2018 to ensure that the transmission line was constructed and the PDOs were met was the correct decision as the project ultimately succeeded in delivering important benefits to Benin’s energy sector. 139. Some of the key reasons for project delay were outside the World Bank’s direct control. The contractor changed ownership and underperformed in some cases. Benin’s procurement process is unduly slow, and the World Bank team met with them on multiple occasions to try to advance the process, with mixed results. 140. Supervision missions were well staffed and regular. More than 12 World Bank missions visited the country to support the implementing agencies during the project life. The task team leaders were generally accompanied by multisector specialists and consultants to advise the team on the best ways to address implementation hurdles in the field. However, the continuous presence of resident task team leaders throughout project implementation could have been beneficial in resolving many implementation obstacles. Justification of Overall Rating of Bank Performance Rating: Moderately satisfactory 141. The World Bank team performed its duties moderately satisfactorily. While the team ensured that the project was based on a rigorous understanding of Benin’s power sector and the investment’s impact, it misjudged the client’s capacity to implement the project. Major changes had to be made to the project during implementation to respond to this, but the World Bank did an adequate job of providing the implementing agencies with an opportunity and the resources to perform. Many of the reasons for delays, such as inadequate implementation capacity, slow procurement, and changes in the contractors, were outside the World Bank team’s control. When problems were encountered, the World Bank team mostly responded on time. The World Bank team was responsive to the GoB’s priorities from project design through project restructurings. D. RISK TO DEVELOPMENT OUTCOME Rating: Substantial 142. While the IAME Project’s achievements in upgrading the transmission and distribution infrastructure are irreversible, the extent to which it ultimately improved the quality of the power sector and the quality of service customers and businesses received is in part dependent on the CEB’s and SBEE’s ability to reform and establish themselves as sustainable business entities. The SBEE’s financial situation remains precarious. Persistent inefficiencies and the use of rented thermal generation have caused the SBEE’s cost of service to rise and its deficit has been increasing and the SBEE has been struggling to clear account payables. Days payable outstanding reached three years in 2015. The financial situation negatively affects the financial viability of the power sector and transmission and distribution infrastructure require significant investments over time to maintain their reliability. This requires a genco and utility that is capable of making such investments. Improving the SBEE’s financial situation is the objective of the PASE World Bank project in Benin, which became effective in February 2018. Page 39 of 66 The World Bank Increased Access to Modern Energy (P110075) 143. Power imports must also continue to be reliable to fully realize the benefits of the project. When Ghana experiences droughts or Nigeria faces gas supply constraints, imports become more expensive or unreliable and the supply-demand gap grows, negatively affecting the reliability of Benin’s power sector. 144. Long-term sustainability of the GEO will also be dependent on the SBEE’s ability to reform into a sustainable business entity. It will also be dependent on continued awareness of the benefits of energy-efficient appliances. The Government must continue to make enforcing standards and labeling a priority, as these policies are only as strong as their implementation. The PASE (P161015) is making important contributions to further IAME’s activities. V. LESSONS AND RECOMMENDATIONS 145. Important lessons from the IAME Project are described in the following paragraphs. 146. Lesson 1: Projects that are continuously aligned to national priorities are in a strong position to succeed. The IAME Project faced substantial delays, but strong interest from the Government in the project and a recognition of its importance to the country helped get the project to completion. Benin wants to develop its energy infrastructure and the IAME Project was clearly aligned with the goals established in the 2009 and 2018 Country Partnership Frameworks. 147. Lesson 2: Key project studies should be completed or well advanced before project effectiveness. The project experienced a very slow beginning and disbursement was only at 2 percent until 2013. The delay is primarily attributable to tendering of the studies required for the transmission line only beginning after project effectiveness. These studies included the feasibility study and the environmental impact assessment. These studies should be able to begin before project effectiveness, as this saves considerable time and ensures a smoother transition from project design to implementation. The World Bank has since made reforms to provide for this and procurement can now begin as soon as the project is approved by the Board. The experience of the IAME Project further emphasizes the importance of this reform to ensure effective project implementation. 148. Lesson 3: Efficient procurement process are critical to effective project implementation. The project encountered many issues with slow procurement process on the national level. These issues were with the national institutions (the DNCMP and CCMP) and not the World Bank, which approved tenders on time and has a higher threshold for the transaction amount at which a formal approval is required rather than a letter of ‘no objection’. However, the GoB’s process for procurement approval involves sending a request for approval to the DNCMP and then receiving approval from the ministry. The DNCMP has a much lower threshold than the World Bank for requiring full approval and the time line for receiving approval is often substantially longer than the stated time line of 15 working days. This was especially an issue for a project in which some components, such as the biomass component, had a large number of very small contracts that required approval. This both delayed the project and consumed a lot of time for the PIU. This is an issue that extends beyond this project, but it is one worth highlighting given the positive impact a more streamlined national procurement process could have on project implementation. 149. Lesson 4: Comprehensive assessment is critical for the establishment of project implementation arrangement and for the reinforcement of capacity. The IAME Project’s implementation was frequently hindered by a lack of technical capacity within the implementing agencies to execute the required tasks, an issue compounded by the complex project design. The two Page 40 of 66 The World Bank Increased Access to Modern Energy (P110075) utilities (CEB and SBEE) did not have the required procurement, financial management, and safeguards capacities to implement the project. The project adjusted to this by moving fiduciary responsibilities to the PIU established under the Ministry of Energy, but this did not address the issues at the utilities/country level. Moreover, the project’s multitude of activities and complex structure, including more technically complex activities such as the financing of transmission lines and TA for hydropower, was not well suited for a low-capacity country. Going forward, capacities in electricity utilities in Sub- Saharan Africa should continue to be strategically reinforced in terms of planning, technical design and supervision, dispatching, procurement and financial management, and safeguards given that the electricity sector remains a top priority for countries. . Page 41 of 66 The World Bank Increased Access to Modern Energy (P110075) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: to improve reliability, efficiency, and access to modern energy services in Benin Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Benin transmission network Text No Yes Yes responds to (N-1) criteria 28-May-2009 30-Jun-2016 31-Dec-2018 Comments (achievements against targets): This target is met. The 161kV Onigbolo-Parakou Transmission Line was completed in November 2018. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Power losses in Benin's Gigawatt- 51.00 24.00 67.60 transmission network hour (GWh) 28-May-2009 30-Jun-2016 31-Dec-2018 Page 42 of 66 The World Bank Increased Access to Modern Energy (P110075) Comments (achievements against targets): This indicator is measured annually. The losses on the Beninese transmission network in 2009 was 51GWh for an energy flow of 937 GWh which is equivalent to a loss rate of 5.44% (baseline). In 2014, the energy loss represented 58 GWh for a total energy flow of 1,170 GWh which is equivalent to a loss rate of 4.96%. In 2016, losses represented 50.7 GWh for an energy flow of 1,101.5 GWh which is equivalent to a rate of 4.6%. For 2017 , the loss rate was of about 5% representing 62GWh for an energy flow of 1,251 GWh. 2017 was a specific year. In fact, the loss rate was higher than the one for 2016 because of (i) poor quality of supply voltage from TCN (Nigeria) which resulted in voltage drops in the network; and (ii) the logging of the Bohicon-Onigbolo line necessary for the construction of the Sakété-Onigbolo line. In fact, the energy coming from Nigeria which was increasing had to go through the only Sakété-Cotonou line, thus inducing overload. For 2018 (data yet to be validated by CEB), the energy losses amounted to about 67.6 GWh for an energy flow of 1409 GWh which corresponded to 4.8% loss rate. The restoring of the Bohicon-Onigbolo line and the construction of the 161kV Onigbolo-Parakou transmission line which was completed in November 2018 reduced the energy losses. The energy losses have decreased in terms of percentage from 5.44% in 2010 to 4.8% in 2018. Page 43 of 66 The World Bank Increased Access to Modern Energy (P110075) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Direct project beneficiaries Number 0.00 200000.00 2214235.00 07-Oct-2013 30-Jun-2016 31-Dec-2018 Female beneficiaries Percentage 0.00 100000.00 50.00 Comments (achievements against targets): This target is surpassed. The project beneficiaries are: (i) people living in localities where SBEE networks have been strengthened / rehabilitated; (ii) SBEE subscribers benefiting from prepayment meters and low-cost compact fluorescent light bulbs; (iii) households benefiting from gas cooking equipment and improved stoves; (iv) the populations of the areas that benefited from the project's support for the development of incomegenerating activities (beekeeping) and (v) the populations of the villages where the local structures for the management of rural wood-energy markets (the CoForMO kiosks) are installed. The number of these beneficiaries is estimated at 2 311 661 taking into account demographic dynamics. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion People provided with access to Number 2700000.00 3900000.00 3880116.00 electricity by household connections 07-Oct-2013 30-Jun-2016 31-Dec-2018 People provided with access Number 2700000.00 3900000.00 3880116.00 Page 44 of 66 The World Bank Increased Access to Modern Energy (P110075) to electricity by hhold 07-Oct-2013 30-Jun-2016 31-Dec-2018 connections-Grid Comments (achievements against targets): This target is almost achieved. Between 2009 and 2017, 210,735 new subscribers were registered, representing 1,180,116 people (5.6 persons per household). This brings the number of people with access to electricity by domestic connection to 3,880,116. During the first quarter of 2018, an additional 7168 connections were completed which benefited 40,140 people. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Electricity losses per year in the Percentage 22.00 20.00 23.09 project area 07-Oct-2013 30-Jun-2016 31-Dec-2018 Total net injected generation Megawatt 0.00 0.00 0.00 hour(MWh) Electricity losses per year in Percentage 11.00 10.00 10.00 the project area- Technical Electricity losses per year in Percentage 11.00 10.00 13.09 the project area- Non- Technical Page 45 of 66 The World Bank Increased Access to Modern Energy (P110075) Comments (achievements against targets): This target is not met. The level of electrical energy losses today is mainly due to the extent of nontechnical (commercial) losses which have not been addressed in the DAEM project. This situation led the Government of Benin to put in place a plan to improve the performances of SBEE. The ongoing Energy Services Improvement Project (ESIP-P161015) funded by IDA is helping the GoB to improve SBEE's commercial performance. Objective/Outcome: to reduce global greenhouse gas emissions through the introduction of energy-efficient appliances Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Efficiency standards for Text No standards Standard developed Standards for CFLs and appliances developed and developed air conditioners applied developed and applied 23-Jun-2009 30-Jun-2015 31-Dec-2018 Comments (achievements against targets): This target is met. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Page 46 of 66 The World Bank Increased Access to Modern Energy (P110075) Compact fluorescent light bulbs Number 0.00 350000.00 350000.00 installed 28-May-2010 30-Jun-2015 31-Dec-2018 Comments (achievements against targets): This target is met A.2 Intermediate Results Indicators Component: Component A1-a: Construction of 161 kV interconnections between Onigbolo-Parakou Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Transmission lines constructed Kilometers 0.00 310.00 284.70 or rehabilitated under the project 07-Oct-2013 07-Oct-2013 31-Dec-2018 Transmission lines Kilometers 0.00 310.00 284.70 constructed under the project 07-Oct-2013 07-Oct-2013 31-Dec-2018 Comments (achievements against targets): This target is met. This indicator includes the length of the Sakété-Tanzoun line (30 km long) and that of the Onigbolo-Parakou line (254.7 km). Initially, the length of the Onigbolo-Parakou line was estimated at 280 km. During the design review / finalization induding the right-of-way of Page 47 of 66 The World Bank Increased Access to Modern Energy (P110075) the line, the final length of the line became 254.7 km. The Sakété-Tanzoun line has been commissioned (thus 30 km of built line) and the Onigbolo-Parakou line was completed. That gives a total of 284.7 km of built lines. Component: Component B1 a: Planning and Development of Modern Energy Services of rural areas. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component B1: Rural Text REF not functional REF fully functional. REF fully functional. electrification fund (REF) established and fully 28-May-2009 28-May-2009 31-Dec-2018 operational Comments (achievements against targets): This target is achieved. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component B2: Number of Number 0.00 4.00 0.00 decentralized, stand-alone generation systems set up 28-May-2009 28-May-2009 31-Dec-2018 Comments (achievements against targets): Page 48 of 66 The World Bank Increased Access to Modern Energy (P110075) Initially, it was planned to implement four pilot operations of rural electrification concessions. Due to the delay in the realization of the ABERME rural electrification concession study, the World Bank and the client, during the project's restructuring in 2013, reallocated the funds dedicated to the implementation of these pilot projects to the on-grid electrification of new localities. Component: Component A4: Rehabilitation and Reinforcement of the SBEE network. Acquisition of metering equipment. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component A4: Distribution- Yes/No N N Y level voltage fluctuations less than 7 percent in the project's 28-May-2009 28-May-2009 31-Dec-2018 network area in key cities in Benin. Comments (achievements against targets): This target is achieved. After the completion of the rehabilitation and strengthening of the SBEE distribution networks in the cities of Cotonou, Porto-Novo, Sakété, Bohicon, Allada, Parakou and Natitingou, the measurement campaigns which were carried out have shown that the voltage fluctuation has been eliminated at these cities. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component A4: Number of Number 0.00 45000.00 45000.00 Page 49 of 66 The World Bank Increased Access to Modern Energy (P110075) prepayment meters installed 07-Oct-2013 07-Oct-2013 31-Dec-2018 Comments (achievements against targets): This target is met. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component A4. Reduction of Text 0 9.7/14 6.61/12.06 Benin's peak load and energy savings (in MW/GWh) 28-May-2009 28-May-2009 31-Dec-2018 Comments (achievements against targets): This target is 73.4% achieved in terms of MW and 86.14% achieved in terms of GWh. The information provided for July 2018 came from the final evaluation of the Energy Efficiency sub-component, which looked at the calculation of the indicators. The December 2016 data came from an estimate based on the basic assumptions of "the replacement of 60W incandescent bulbs by compact fluorescents". But in practice, because there were not many incandescent bulbs in Benin, economic bulbs of 40 W were also replaced by compact fluorescents . This situation has lowered the level of achieved energy savings. Component: Component A5: Improving Lighting and Appliance Efficiency Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Page 50 of 66 The World Bank Increased Access to Modern Energy (P110075) Component A5: Efficiency Text No standards Standards for CFLs and Standards for CFLs and standards for appliances air conditioners air conditioners developed and applied developed and applied developed and applied 28-May-2009 28-May-2009 31-Dec-2018 Comments (achievements against targets): This target is met. Component: Component B2: Modernizing Biomass Energy Services Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component B2: Area of Hectare(Ha) 0.00 300000.00 300000.00 managed forest in the context of setting up a community- 28-May-2009 28-May-2009 31-Dec-2018 based sustainable woodfuel supply system (in ha) Comments (achievements against targets): This target is achieved. The first set of forest management plans covering 300,000 ha of the protected area of Moyen Ouémé has been developed. These plans are being implemented. Thus, the following steps have been taken: (i) Signing Land Lending Agreements; (ii) Partnership signing between DGEFC and CoForMO; (iii) Approval by the DGEFC of these management plans, (iv) Signing of contracts for the training of Local Management Structures (SLG) and for the development and implementation of an operational plan for income generating activities. The installation of Rural Wood Markets in rural communities was also completed. Page 51 of 66 The World Bank Increased Access to Modern Energy (P110075) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component B2: Number of Number 0.00 450.00 1150.00 new workers trained in production of efficient wood 28-May-2009 28-May-2009 31-Dec-2018 stoves, and increased use of energy efficient wood stoves. Comments (achievements against targets): This target is surpassed. 1150 farmers benefited from training sessions on improved carbonization and logging techniques in the CoForMO areas. Component: Component C: Sustainable Energy Services Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component C - C1: Energy Text No current Master Master plan prepared Master plan prepared Sector Master Plan completed Plan and endorsed and endorsed and endorsed 28-May-2009 28-May-2009 31-Dec-2018 Comments (achievements against targets): Page 52 of 66 The World Bank Increased Access to Modern Energy (P110075) The Master Plan for the development of the electricity sub-sector was prepared and approved in August 2015. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component C - C4. Yes/No N N Y Environmental and social safeguards regularly monitored 28-May-2009 28-May-2009 31-Dec-2018 and mitigation measures implemented Comments (achievements against targets): This target is achieved. Component: Component B3: Electrification of three priority localities Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component B3: Number of Number 0.00 3000.00 3150.00 people provided with access to electricity under the project by 07-Oct-2013 07-Oct-2013 31-Dec-2018 household connections through the electrification of Page 53 of 66 The World Bank Increased Access to Modern Energy (P110075) new localities Comments (achievements against targets): This target is surpassed. Component: Component D: Project Preparation Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component D - D1: Adjarala Yes/No N N Y ESIA and RAP updated 07-Oct-2013 07-Oct-2013 31-Dec-2018 Comments (achievements against targets): This target is achieved. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Component D - D2: Preparation Yes/No N N Y of studies for transmission and distribution project completed 07-Oct-2013 07-Oct-2013 31-Dec-2018 Page 54 of 66 The World Bank Increased Access to Modern Energy (P110075) Comments (achievements against targets): This target is achieved. The following studies have been completed: the technical study of the 161 kV Natitingou-Tanguiéta-Porga line; the environmental and social studies of the Natitingou-Tanguiéta-Porga 161 kV line; and the technical study for the standardization and extension of SBEE networks. Page 55 of 66 The World Bank Increased Access to Modern Energy (P110075) B. KEY OUTPUTS BY COMPONENT Objective/Outcome 1: Improve reliability, efficiency, and access to modern energy services in Benin 1. Reduce power losses in Benin’s transmission networks (in GWh) 2. Increased number of people with improved access to modern energy and electricity services 3. Benin’s transmission network responds to (N-1) criteria 4. Direct project beneficiaries 4.1 Female beneficiaries Outcome Indicators 5. People provided with new or improved electricity service 6. People provided with access to electricity by household connections 7. Electricity losses per year in the project area 7.1 Total net injected generation (MWh) 7.2 Electricity losses per year in the project area (%) 7.3 Electricity losses per year in the project area - nontechnical (%) A.1. Construction of 310 km of transmission lines  Transmission lines constructed under the project (km)  Transmission lines constructed or rehabilitated under the project  Transmission lines constructed under the project A.2. Distribution-level voltage fluctuations less than 7 percent in the project's network area in key cities in Benin Intermediate Results Indicators A.4. Number of prepaid meters installed B.1. Rural electrification fund established and fully operational B.2. Number of decentralized, stand-alone generation systems set up B.3. Area of managed forest in the context of setting up a community-based sustainable wood-fuel supply system (in ha) B.3. Number of people provided with access to electricity under the project by household connections through the electrification of new localities Page 56 of 66 The World Bank Increased Access to Modern Energy (P110075) B.2. Number of new workers trained in production of efficient woodstoves, and increased use of energy efficient woodstoves. C.1. Energy Sector Master Plan completed and endorsed C.2. SBEE business plan developed and endorsed C.3. CEB business plan developed and endorsed C.4. Environmental and social safeguards regularly monitored, and mitigation measures implemented D.1. Adjarala ESIA and RAP updated D.2. Preparation of studies for transmission and distribution project completed 1. The construction of the 254.7 km Onigbolo-Parakou 161 kV transmission line (estimated at 280 km at appraisal) Key Outputs by Component 2. The reinforcement or rehabilitation of 9 substations (linked to the achievement of the 3. The installation of 45,000 prepaid meters Objective/Outcome 1) 4. Electrification of households, providing 1,180,116 people with access to electricity 5. 450 new workers trained in production of efficient woodstoves and increased use of energy efficient woodstoves Objective/Outcome 2: reduce global greenhouse gas emissions through the introduction of energy-efficient appliances in Benin’s residential and commercial sector 1. Efficiency standards for appliances developed and applied Outcome Indicators 2. Compact fluorescent lightbulbs installed A.4. Lighting efficiency standards developed and applied Intermediate Results Indicators A.4. Reduction of Benin’s peak load and energy savings (in MW/GWh Key Outputs by Component 1. The establishment of energy efficiency standards and labeling for CFLs and air conditioners (linked to the achievement of the 2. The installation of 350,000 CFLs in households that are SBEE customers Objective/Outcome 2) Page 57 of 66 The World Bank Increased Access to Modern Energy (P110075) ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION A. TASK TEAM MEMBERS Name Role Preparation Supervision/ICR Miarintsoa Vonjy Rakotondramanana Task Team Leader(s) Mathias Gogohounga Procurement Specialist(s) Angelo Donou Financial Management Specialist Abdoul Wahabi Seini Social Specialist Awa Seck Team Member Rahmoune Essalhi Team Member Natalie Tchoumba Bitnga Team Member Pepita Hortense C. Olympio Team Member Fatoumata Diallo Team Member Alain Ouedraogo Team Member Franklin Koffi S.W. Gbedey Team Member Abdoulaye Gadiere Environmental Specialist B. STAFF TIME AND COST Staff Time and Cost Stage of Project Cycle No. of staff weeks US$ (including travel and consultant costs) Preparation FY08 14.850 110,578.59 FY09 28.813 164,066.52 Total 43.66 274,645.11 Supervision/ICR FY10 19.628 94,334.88 FY11 11.175 46,906.53 Page 58 of 66 The World Bank Increased Access to Modern Energy (P110075) FY12 22.706 121,175.89 FY13 22.433 94,750.43 FY14 32.191 94,662.74 FY15 37.960 125,649.54 FY16 28.900 93,925.53 FY17 16.325 64,068.31 FY18 18.447 102,109.59 FY19 12.198 93,261.54 Total 221.96 930,844.98 Page 59 of 66 The World Bank Increased Access to Modern Energy (P110075) ANNEX 3. PROJECT COST BY COMPONENT Components Amount at Actual at Project Percentage of Approval Closing (US$, Approval (US$, Millions) Millions) Component A.1(a) and A.3: Construction of 11.99 14.59 121.68 161 kV interconnections between Onigbolo- Parakou Component A.4: Rehabilitation and 31.34 25.38 80.98 reinforcement of the SBEE network. Acquisition of metering equipment. Component A.5 (GEF): Improving lighting and 1.82 1.82 100.00 appliance efficiency Component B.1(a): Planning and 2.00 0.54 27.00 development of modern energy services of rural areas. Component B.1(b): Rural Electrification Fund 8.00 0.00 0.00 Component B.2: Modernizing biomass energy 2.00 1.30 65.00 services Component C: Sustainable Energy Services 6.68 5.14 76.94 Component B.3: Electrification of three 0.00 1.50 n.a. priority localities Component D: Project Preparation 0.00 4.30 n.a. NEW: Component A.1(b): Supply and 0.00 1.75 0.00 installation of protection and relaying equipment Contingencies 8.00 0.00 0.00 Total (IDA + GEF) 71.82 56.32 78.41 Page 60 of 66 The World Bank Increased Access to Modern Energy (P110075) ANNEX 4. EFFICIENCY ANALYSIS 1. The project suffered from numerous implementation delays and required three extensions to be completed, ultimately surpassing its original closing date of June 30, 2015, by three-and-a-half years. These delays are mainly due to, among other things, a slow procurement process, low technical capacity in implementing bodies, and difficulties with some of the contractors. 2. The project costs were less than originally projected, mainly because the project restructurings that eliminated components that were not performing (see Table 1 for a complete accounting of project costs). Economic Analysis 3. Consistent with the evaluation at appraisal, an economic analysis was completed for Subcomponents A.1 and A.2 (transmission lines), Subcomponent A.3 (distribution strengthening), and Subcomponent A.5. The other components consisted of TA and are excluded from an analysis due to the difficulty in monetizing the economic benefits for TA and capacity-building activities. The PAD also included a financial analysis, but it was only a projection of the CEB’s and SBEE’s finances. The projections proved to be highly inaccurate as both companies’ finances have significantly worsened since 2010. The SBEE’s finances are now being addressed as part of PASE (P161015). A financial analysis for the ICR was therefore deemed to be not relevant and was not included. Table 4.1. PAD Economic Analysis Results NPV at 10% Discount Rate (US$) EIRR (%) Transmission lines (Subcomponents A.1, A.2, and A.3) 59,953,797 22 Distribution (Subcomponent A.4) 10,107,847 16 Energy efficiency (Subcomponent A.5) 4,479,606 53 Table 4.2. Economic Analysis Results at Project Completion ENPV at 10% ENPV at 6% Discount EIRR (%) Discount Rate (US$) Rate (US$) Transmission lines (Subcomponents A.1, 58,394,696 89,409,920 36 A.2, and A.3) Distribution (Subcomponent A.4) 86,615,748 136,271,185 40 Energy efficiency (Subcomponent A.5) 5,653,800 7,091,957 92 Subcomponents A.1, A.2, A.3: Transmission Lines 4. The construction of the key Onigbolo-Parakou transmission line was completed only in November 2018. It will be tested and progressively carry heavier loads through 2019, eventually reaching its optimal load capacity. This means that while the transmission line was completed during the project, data on the effect of the transmission line on key indicators, such as reduced transmission losses, increased reliability of transmission, and reduced nondistributed energy were not available at the time of ICR analysis. The economic analysis for the transmission lines therefore relies on the same assumptions used in the PAD analysis for the projected benefits. Page 61 of 66 The World Bank Increased Access to Modern Energy (P110075)  Savings in transmission losses of 24.31 GWh per year  Savings in outages of 5.28 GWh per year  Savings in nondistributed energy of 14.11 GWh per year (with the first year being 50 percent) 5. Some of the economic data used in this analysis were updated to better reflect the Benin power sector:  The marginal cost of generation has been updated to the cost of imports (US$0.11 per kWh),15 a more accurate reflection of the marginal cost of generation than that used in the PAD analysis (the average generation cost).  The cost of nondistributed energy was updated to reflect the current economic value (US$0.90 per kWh).16 Results and Base Case Comparison 6. Investments in the transmission lines yielded a strong economic return. With an NPV of US$58.3 million at a 10 percent discount rate and an NPV of US$89 million at a 6.6 percent discount rate, this was a strong return, especially given the implementation delays. The negative impact of the implementation delays is offset by the use of updated and more accurate data in the assumptions, in particular the use of an updated figure of the economic cost of lost load. An EIRR of 36 percent also indicates that the returns were well above the cost of capital. 7. When using a 10 percent discount rate, the NPV of the transmission investments are very close to the NPV projected in the PAD analysis, approximately US$59 million. The delayed implementation and construction of the transmission line would have negatively affected the NPV as the benefits were delayed. However, the use of updated and more accurate assumptions is more favorable for the transmission line’s NPV, particularly the inclusion of updated data on the economic cost of unserved energy, as it has a greater economic cost in 2019 than it did 10 years ago. 8. The EIRR increased from 22 percent to 36 percent. This can mostly be attributed to the use of a 6.6 percent discount rate for the EIRR in the ICR analysis. Sensitivity Analysis 9. A sensitivity analysis was run to test the results in case the assumptions used are overestimated. The sensitivity analysis used assumptions that the benefits from the transmission lines would be half of original assumptions. With the sensitivity analysis, the results are still positive, with an NPV of US$21.3 million with a discount rate of 10 percent and an NPV of US$35.8 million with a discount rate of 6.6 percent. The EIRR is 23 percent. This suggests that even if the assumptions for the transmission line economic analysis are overly optimistic, the investment should still yield positive economic returns. 15From CEB Etudes Complémentaires : options de réforme de la CEB by Castalia, November 2018. 16From Etude et plan tarifaires sur l’électricité au Benin : Rapport provisoire 1 : études complémentaires by Idea Consult, July 2017. Page 62 of 66 The World Bank Increased Access to Modern Energy (P110075) Subcomponent A4: Distribution Network 10. Investments in the rehabilitation of the distribution network included upgrades to key substations and the installation of prepaid meters. The investments were made between 2012 and 2017 and totaled US$23.3 million. The economic analysis assesses the benefits delivered through reduced losses and reduced unscheduled outages. Some of the economic data used in this analysis were updated to better reflect the Benin’s power sector:  The marginal cost of generation has been updated to the cost of imports (US$0.11 per kWh),17 a more accurate reflection of the marginal cost of generation than that used in the PAD analysis (the average generation cost).  The cost of nondistributed energy was updated to reflect the current economic value (US$0.90 per kWh).18 Results and Base Case Comparison 11. Investments in the distribution network had strong economic returns. The NPV with a 10 percent discount rate is US$86.6 million. The NPV with a 6 percent discount rate is US$136.3 million. The EIRR is 40 percent, well above the cost of capital. 12. These returns exceed the projections from the bases case analysis, which projected an NPV of US$10.1 million (with a 10 percent discount rate) and an EIRR of 14 percent. A couple of reasons explain the improved results. While the distribution component also experienced implementation delays that hindered the efficiency of the project, they were not as severe as the transmission lines and most of the costs came in 2015, closer to when benefits began to be realized. The analysis also uses the updated and more accurate use of economic data, including a higher cost of unserved energy. The frequency and duration of outages on the grid significantly worsened following project appraisal, creating a higher base case projection for outages. The ICR’s economic analysis also has updated and higher projections for Benin’s energy consumption in the project area, creating greater benefits from reduced losses and reduced unscheduled outages. Sensitivity Analysis 13. A sensitivity analysis was run to test if the distribution results of energy consumption in the project area were lower than initially projected and were only 4 percent per year. The results remain positive, with an NPV of US$33.9 million with a discount rate of 10 percent and an NPV of US$55.1 million with a discount rate of 6 percent. The EIRR is 28 percent, above the cost of capital. This shows that with lower- than-expected rate of energy consumption in the project area, the investments in the rehabilitation of the distribution network will remain positive. 17From CEB Etudes Complémentaires : options de réforme de la CEB by Castalia, November 2018. 18From Etude et plan tarifaires sur l’électricité au Benin : Rapport provisoire 1 : études complémentaires by Idea Consult, July 2017. Page 63 of 66 The World Bank Increased Access to Modern Energy (P110075) Subcomponent A.5: Energy Efficiency 14. Investments in energy efficiency were made through the distribution of CFLs, which replaced less efficient bulbs. The implementation of this component was straightforward, and it did not experience any significant delays. Investments began in 2014 and benefits began to be realized in 2016. The benefits included are savings from reduced losses over eight years. Results and Comparison with Base Case 15. Investments in energy efficiency generated positive returns. The NPV with a 10 percent discount rate is US$5.7 million and US$7 million with a 6 percent discount rate. The EIRR is 92 percent, well above the cost of capital. 16. The NPV at completion with a 10 percent discount rate, US$5.7 million, is slightly higher than the assessment at appraisal, which was US$4.5 million. The project reduced losses at 12.6 GWh per year, a rate that is slightly lower than what was projected in the base case, which was 15 GWh. This underperformance is offset by the use of an updated and more accurate cost of generation, which is also higher and provided greater benefits for the loss reductions. Both evaluations have high EIRRs, at 53 percent and 92 percent, respectively. Page 64 of 66 The World Bank Increased Access to Modern Energy (P110075) ANNEX 5. BORROWER, CO-FINANCIER, AND OTHER PARTNER/STAKEHOLDER COMMENTS 1. The PIU team completed an internal review of the IAME Project.19 The report covers the results of the project for each of the four components and its subcomponents, with detailed data for each indicator. These data are all consistent with the World Bank indicator data. The report also covers other results from implementation of the IAME Project and notes areas for improvement on report and data tracking. The report also notes the PIU team’s lessons learned and recommendations from the project. Some of these lessons have not been covered in this report and include taking into account extreme weather conditions during the construction, the importance of technology and information transfer within the team, and the need for improved documentation. 2. The ICR team reached out to co-financiers for comment on the project but did not receive any responses. 19 PIU, Rapport d’Achèvement Projet DAEM. Page 65 of 66 The World Bank Increased Access to Modern Energy (P110075) ANNEX 6. SUPPORTING DOCUMENTS (IF ANY) 1. IAME Project Appraisal Document (P110075; Report no. 47481-BJ; May 28, 2009) 2. IAME Restructuring Paper 2011 (Report no. 64944 v1; October 7, 2011) 3. IAME Restructuring Paper 2013 (Report no. 82524; October 14, 2013) 4. IAME Restructuring Paper 2015 (Report no. RES18350; June 25, 2015) 5. IAME Restructuring Paper 2016 (Report no. RES22736-BJ; April 18, 2016) 6. IAME Restructuring Paper 2018 (Report no. RES32461; June 20, 2018) 7. Financing Agreements for IAME 8. ISRs (14/16) 9. Benin Country Assistance Strategy FY09–12 (Report no. 46485-BJ; January 30, 2009); Country Assistance Strategy FY13–17 (Report no. 75774-BJ); Country Assistance Strategy FY19–23 (Report no. 123031; June 6, 2018) 10. PIU Rapport D’Achèvement du Projet DAEM Page 66 of 66