The World Bank Implementation Status & Results Report Power Recovery Project (P144029) Power Recovery Project (P144029) EUROPE AND CENTRAL ASIA | Albania | Energy & Extractives Global Practice | IBRD/IDA | Investment Project Financing | FY 2015 | Seq No: 9 | ARCHIVED on 14-Nov-2019 | ISR38973 | Implementing Agencies: Ministry of Infrastructure and Energy, Republic of Albania Key Dates Key Project Dates Bank Approval Date: 29-Sep-2014 Effectiveness Date: 30-Jan-2015 Planned Mid Term Review Date: 07-May-2018 Actual Mid-Term Review Date: 07-May-2018 Original Closing Date: 30-Nov-2019 Revised Closing Date: 30-Nov-2019 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to improve reliability of power supply and financial viability of the power sector. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Short Term Complementary Power Import Support:(Cost $30.00 M) Upgrading Distribution Infrastructure:(Cost $93.00 M) Transmission Meter/Data Center Upgrade:(Cost $20.00 M) Supporting Power Sector Reforms and Project Implementation:(Cost $7.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO ►Moderately Satisfactory ►Moderately Satisfactory Overall Implementation Progress (IP) ►Moderately Unsatisfactory ►Moderately Satisfactory Overall Risk Rating ►High ►High Implementation Status and Key Decisions 11/14/2019 Page 1 of 10 The World Bank Implementation Status & Results Report Power Recovery Project (P144029) 1. Project implementation has been expedited since the mid-term review. The project is contributing to lowering electricity distribution losses in Albania, and increasing reliability of the medium-voltage network in the Tirana area, measured by the capacity utilization percentage of substations. Based on the latest status, the project Implementation Progress rating is upgraded to Moderately Satisfactory. The project restructuring, including a one year closing date extension, is underway. 2. Financial viability of the power sector. While progress has been made over the last three years, placing KESH and OST on a relatively sound financial framework, OSHEE continues to face a financial gap, especially during a dry year such as 2017 and expected again in 2019. With some delays, an updated Financial Recovery Plan was approved by the Council of Ministers in April 2019 and provides guidance on the key financial drivers to help improve OSHEE financial condition, in particular, a distribution loss reduction trajectory for 2018–2021, and a prioritized investment focusing on loss reduction. 11/14/2019 Page 2 of 10 The World Bank Implementation Status & Results Report Power Recovery Project (P144029) 11/14/2019 Page 3 of 10 The World Bank Implementation Status & Results Report Power Recovery Project (P144029) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- ►Substantial ►Substantial Macroeconomic -- ►Moderate ►Moderate Sector Strategies and Policies -- ►Moderate ►Moderate Technical Design of Project or Program -- ►High ►High Institutional Capacity for Implementation and Sustainability -- ►High ►High Fiduciary -- ►High ►High Environment and Social -- ►Low ►Low Stakeholders -- ►High ►High Other -- -- -- Overall -- ►High ►High Results PDO Indicators by Objectives / Outcomes Electricity losses per year in the project area IN00756658 ►Electricity losses per year in the project area (Percentage, Custom) 11/14/2019 Page 4 of 10 The World Bank Implementation Status & Results Report Power Recovery Project (P144029) Baseline Actual (Previous) Actual (Current) End Target Value 45.00 24.00 24.00 14.00 Date 03-Jul-2014 31-Dec-2018 31-Dec-2018 30-Jun-2019 Latest total distribution losses data for the full year 2018. Technical and non-technical losses are not updated due to their Comments: inaccuracies. These sub-indicators will be deleted at project restructuring. IN00756777 ►Total net injected generation (Megawatt hour(MWh), Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 7,145,000.00 6,437,000.00 6,437,000.00 7,850,000.00 IN00756778 ►Electricity losses per year in the project area- Technical (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 15.30 16.30 16.30 12.60 IN00756779 ►Electricity losses per year in the project area- Non-Technical (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 29.80 7.70 7.70 1.40 Collection rate of distribution company IN00756659 ►Collection rate of distribution company (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 78.00 93.00 93.00 93.00 Date 03-Jul-2014 31-Dec-2018 31-Dec-2018 30-Jun-2019 These are collections of bills in 2018, excluding arrears from the past. A total of 64.7b lek were billed in 2018, of which 51.8b lek were collected, and 8.4b lek were under regular collection (0-60 days age), and remaining 4.5b lek (7 percent of Comments: total billed in 2018) were over 60 days unpaid. Reliability of MV level at Tirana area IN00756660 ►Reliability of MV level at Tirana area (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 100.00 89.00 89.00 70.00 Date 03-Jul-2014 31-Dec-2018 31-Dec-2018 30-Jun-2019 11/14/2019 Page 5 of 10 The World Bank Implementation Status & Results Report Power Recovery Project (P144029) Total amount of intercompany arrears IN00756776 ►Total amount of intercompany arrears (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1,200.00 546.00 600.00 550.00 Date 03-Jul-2014 31-Dec-2017 31-Dec-2017 30-Jun-2019 This is based on audited financial data in 2017 Comments: Intermediate Results Indicators by Components Supporting Power Sector Reforms and Project Implementation IN00756783 ►Debt-to-Capitalization Ratio of OShEE (shown), KESh and OST (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 300.00 23.70 23.70 60.00 Date 03-Jul-2014 31-Dec-2017 31-Dec-2017 30-Jun-2019 This is the average of the Debt-to-Capitalization Ratio of three Utilites. Comments: For OSHEE only this value is 143. Based on 2017 audited financial statements. IN00756786 ►Debt to Equity Ratio of OShEE (shown), KESh and OST (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.10 -0.48 -0.48 1.60 Date 03-Jul-2014 31-Dec-2017 31-Dec-2017 30-Jun-2019 Audited 2017 financial statements. Comments: IN00756787 ►OShEE monthly revenues used to pay for energy purchases to KESh and transmission fees to OST (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 40.00 100.00 100.00 100.00 Date 03-Jul-2014 31-May-2018 31-May-2018 30-Jun-2019 in terms of account payable to kesh in the non auditted 2018 Comments: IN00756789 11/14/2019 Page 6 of 10 The World Bank Implementation Status & Results Report Power Recovery Project (P144029) ►Power sector reforms implemented (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The consultant (NordPool) supported by The consultant (NordPool) the Bank and Vienna supported by the Bank and Energy Secretariat, was Vienna Energy Secretariat, working together with was working together with Ministry of Energy to Ministry of Energy to establish the proposed establish the proposed power power exchange in exchange in Albania by the Albania by the end of end of 2018. The Bank 2018. The Bank (IBRD (IBRD and IFC) is and IFC) is supporting supporting financially the financially the establishment of Albanian establishment of Albanian Market Operator and Market Operator and Albanian Balancing Market. Albanian Balancing The distribution company is Market. The distribution prepared to unbundle the company is prepared to wires from retail supply. The unbundle the wires from plan for deregulation of MV retail supply. The plan for customers and IPP is under deregulation of MV implementation. Since Jan customers and IPP is The cost recovery tariff 1st 2018, all customers (96 under implementation. mechanism is customers) connected in 35 Since Jan 1st 2018, all implemented. Value No kV distribution network are customers (96 customers) New market is functioning equipped with new metering connected in 35 kV and 40% of market is system and are deregulated. distribution network are deregulated Actually only 17 customers equipped with new from total 96 are fully metering system and are supplied by qualified deregulated. Actually only suppliers; the others (79) are 17 customers from total 96 actually supplied by are fully supplied by OSHEE. qualified suppliers; the In 2018 only 14% (974 others (79) are actually GWh) of the total supplied by OSHEE. demand(7639 GWh) was In 2018 only 14% (974 deregulated; those are 12 HV GWh) of the total customers connected in demand(7639 GWh) was transmission network and deregulated; those are 12 few 35 kV customers. HV customers connected For 2019 the percentage is in transmission network reduced in 11%. and few 35 kV customers. For 2019 the percentage is reduced in 11%. . . Date 03-Jul-2014 30-Apr-2019 30-Apr-2019 30-Jun-2019 11/14/2019 Page 7 of 10 The World Bank Implementation Status & Results Report Power Recovery Project (P144029) Twelve customers connected in HV are qualified as eligible deregulated customers; the annual consumption in 2018 was is expected to be above GWh 960 which is 14% of total demand in Albania. At the beginning of 2018 the other 96 MV customers connected in 35 kV were qualified but only 17 are actually suppled in deregulated market; the total deregulated customer consumption was 974 GWh (inluding 14 GWh in 35 kV level). During Jan-Apr 2019, the total deregulated consumtion was 375 GWh and the total demand was 3303 GWh. There are 300 MV customers equped with new metering system and ready to chose a supplier in the deregulated market Comments: The Albanian government adopted the decision to set up power exchange (APEX) on May 15, 2019 (with day-ahead and intraday markets). The power exchange will be established in accordance with EU directives and as a step-in power sector reform. The power exchange will speed up the electricity market liberalization and deregulation. OST, Albania’s state- owned transmission system operator, will be in charge of setting up a company to operate the power exchange. The operator will be a joint stock company, and the Albanian government will select its shareholders. Transmission Meter/Data Center Upgrade IN00756782 ►Number of medium voltage customers in deregulated market (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 96.00 96.00 5,000.00 Date 03-Jul-2014 10-Jun-2019 10-Jun-2019 30-Jun-2019 IN00756785 ►Share of meters installed by OST (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 19.00 19.00 100.00 Date 03-Jul-2014 10-Jun-2019 10-Jun-2019 30-Jun-2019 The total number of meters to be installed is 2,328. Comments: Upgrading Distribution Infrastructure IN00756781 ►Implementation of a new billing and collection management system (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Final acceptance test of the billing system is Final acceptance test of the The new Billing and The risk management delayed to November Value billing system is targeted for Management System in mechanism is not in place 2019. The installation is completion by end June 2019 Operation completed and the system is operational. Date 03-Jul-2014 10-Jun-2019 15-Oct-2019 30-Jun-2019 IN00756784 ►Direct project beneficiaries (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 11/14/2019 Page 8 of 10 The World Bank Implementation Status & Results Report Power Recovery Project (P144029) Value 0.00 60,000.00 60,000.00 200,000.00 Date 03-Jul-2014 31-May-2019 31-May-2019 30-Jun-2019 IN00756788 ►Female beneficiaries (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 50.00 50.00 52.00 Short Term Complementary Power Import Support IN00756780 ►Implemented Risk management mechanism for weather related power imports (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target This weather risk This weather risk mitigation mitigation is being is being provided under a provided under a separate separate World Bank World Bank technical technical assistance (Albania The Risk Mitigation assistance (Albania Growth and Jobs Policy Mechanisms are Value No Growth and Jobs Policy Implementation Support established and Implementation Support P168919). This originally implemented. P168919). This originally planned activity would be planned activity would be cancelled under project cancelled under project restructuring. restructuring. Date 03-Jul-2014 10-Jun-2019 10-Jun-2019 30-Jun-2019 Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P144029 IBRD-84290 Effective USD 150.00 150.00 0.00 78.17 59.59 57% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P144029 IBRD-84290 Effective 29-Sep-2014 03-Nov-2014 30-Jan-2015 30-Nov-2019 30-Nov-2019 Cumulative Disbursements 11/14/2019 Page 9 of 10 The World Bank Implementation Status & Results Report Power Recovery Project (P144029) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 11/14/2019 Page 10 of 10