The World Bank
   Dasu Hydropower Stage I Project (P121507)




                                                                                   REPORT NO.: RES39363

                                     DOCUMENT OF THE WORLD BANK




                                         RESTRUCTURING PAPER
                                                  ON A
                                   PROPOSED PROJECT RESTRUCTURING

                                                      OF

                                  DASU HYDROPOWER STAGE I PROJECT
                                      APPROVED ON JUNE 10, 2014
                                                      TO

                   ISLAMIC REPUBLIC OF PAKISTAN,MINISTRY OR WATER RESOURCES


ENERGY & EXTRACTIVES

SOUTH ASIA




                           Regional Vice President:    Hartwig Schafer
                                 Country Director:     Patchamuthu Illangovan
                                 Regional Director:    Guangzhe Chen
                       Practice Manager/Manager:       Demetrios Papathanasiou
                              Task Team Leader(s):     Mats Johan Rikard Liden, Mohammad Saqib
           The World Bank
           Dasu Hydropower Stage I Project (P121507)



I. BASIC DATA

Product Information

Project ID                                                     Financing Instrument
P121507                                                        Investment Project Financing

Original EA Category                                           Current EA Category
Full Assessment (A)                                            Full Assessment (A)

Approval Date                                                  Current Closing Date
10-Jun-2014                                                    30-Jun-2022




Organizations

Borrower                                                       Responsible Agency
                                                               Water and Power Development Authority
Islamic Republic of Pakistan,Ministry or Water Resources
                                                               (WAPDA),National Transmission and Despatch Company



Project Development Objective (PDO)
Original PDO
The overall project development objective is to facilitate the expansion of electricity supply of hydro-power in Pakistan.
The Project would also improve access to socio-economic services for local communities in the project area and build
WAPDA’s capacity to prepare future hydropower projects. This would be achieved by installing a 2,160 MW
hydropower plant on the main Indus River, which can be expanded to 4,320 MW in future at very low cost. The Project
is a “high-risk-high reward” operation aimed at providing low cost non-carbon renewable energy.
Summary Status of Financing


                                                                                        Net
Ln/Cr/Tf                 Approval         Signing Effectiveness          Closing Commitment Disbursed Undisbursed

IDA-54970              10-Jun-2014 25-Aug-2014 20-Nov-2014         30-Jun-2022          190.30            0        170.13
IDA-54980              10-Jun-2014 25-Aug-2014 20-Nov-2014         30-Jun-2022          398.10      213.99         142.01
        The World Bank
        Dasu Hydropower Stage I Project (P121507)



Policy Waiver(s)

Does this restructuring trigger the need for any policy waiver(s)?
No


I. SUMMARY OF PROJECT STATUS AND PROPOSED CHANGES

This restructuring paper is to extend the deadline for utilization of funds under Category 2 for land acquisition and
resettlement until May 20, 2021 as requested by the Government. This would require an amendment to the Financing
Agreement. In the latest ISR dated August 9, 2019 Achievement of PDO was rated Satisfactory and Implementation
Progress was rated Moderately Satisfactory. Fiduciary was rated Moderately Satisfactory. There are no overdue audit
reports related to this project.

There has been significant progress in the Project in the last six months. Intense supervision and strengthened project
management have resulted in actions to solve blockages for progress. All major contracts have now been procured
and construction of the diversion tunnels has commenced. Most importantly, the deadlock in land acquisition has
been resolved as ECNEC and the Federal Cabinet have approved revised land rates, and award of land will now start
again in earnest. The Deputy Commissioner has confirmed that 1,277 acres in the prioritized construction area will be
ready for award. The land for the construction footprint is expected to be awarded the next three months and the
remaining land for the project awarded within the next six months. Settling of payments and handing over may take
longer time, but is expected to be completed over the next 18 months.

The proposed change is an extension to utilize IDA credit for land acquisition and resettlement. The land acquisition
process has been delayed because of lack of cadastral data in the project area and because of difficulty in reaching
agreement on compensation rates. Consequently, the time allowed under the financing agreement to utilize IDA credit
for land acquisition and resettlement, including the extensions approved to November 20, 2019, has been lost. With
the decisions on revised rates now taken by Federal Cabinet it is expected that the land acquisition will be completed
within the next 18 months. The extension for Category 2 is therefore requested up to May 20, 2021.

Based on the above, team recommends to accept the government’s request to amend the withdrawal schedule of the
Financing Agreement to provide for utilization of funds under Category (2) up to May 20, 2021, which will allow all the
land to be acquired.


II. DETAILED CHANGES