Document of...Document of The World Bank Report No: ICR00001989 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-34760 IDA-3476A) CREDIT IN THE AMOUNT OF SDR 24.2 MILLION (US$35 MILLION

Document of

The World Bank

Report No: ICR00001989

IMPLEMENTATION COMPLETION AND RESULTS REPORT

(IDA-34760 IDA-3476A)

CREDIT

IN THE AMOUNT OF SDR 24.2 MILLION

(US$35 MILLION EQUIVALENT)

TO THE

REPUBLIC OF SIERRA LEONE

FOR A

POWER AND WATER PROJECT

September 29, 2011

Urban and Water Unit (AFTUW) Country Department AFCW1 Africa Region

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CURRENCY EQUIVALENTS

Exchange Rate Effective September 1st, 2011 Currency Unit: Sierra Leonean Leones (SLL)

SLL 1.00 = US$ 0.00 US$ 1.00 = SLL 4,416.96

FISCAL YEAR: January 1 – December 31

Abbreviations and acronyms BADEA Arab Bank for Economic Development in Africa

(Banque Arabe pour le Développement Economique en Afrique) DFID Department for International Development EIA Environmental Impact Assessment EMP Environmental Management Plan EIRR Economic Internal Rate of Return ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan FCC Freetown City Council FM Financial Management FSWMC Freetown Solid Waste Management Company GoSL Government of Sierra Leone GVWC Guma Valley Water Company ICR Implementation Completion Report IDA International Development Association IPP Independent Power Producer ISRR Implementation and Status Results Report M&E Monitoring and Evaluation MoEP Ministry of Energy and Power MoYS Ministry of Youth and Sports MTR Midterm Review N/A Not applicable NCP National Commission for Privatization NGO Non-Governmental Organization NPA National Power Authority O&M Operations and Maintenance OPEC Organization of Petroleum Exporting Countries PAD Project Appraisal Document PDO Project Development Objectives PIU Project Implementation Unit QALP Quality Assessment of Lending Portfolio RAP Resettlement Action Plan RPF Resettlement Policy Framework

SALWACO Sierra Leone Water Company TA Technical assistance TTL Team Task Leader

Units

GBP Great British Pound GwH Gigawatt Hour km Kilometer kV Kilovolt kWh Kilowatt Hour M Million MWh Megawatt Hours US$ United State Dollar

Vice President: Obiageli Katryn Ezekwesili Acting Country Director: Sergiy V. Kulyk Sector Director Jamal Saghir Sector Manager: Junaid Kamal Ahmad Project Team Leader: Hassan Madu Kida ICR Team Leader: Kremena Ionkova ICR Primary Author: Carolina Dominguez Torres

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REPUBLIC OF SIERRA LEONE

Power and Water Project

Contents A. Basic Information .................................................................................................................................... iii B. Key Dates ................................................................................................................................................ iii C. Ratings Summary .................................................................................................................................... iv D. Sector and theme codes ............................................................................................................................ v E. Bank staff.................................................................................................................................................. v F. Results Framework Analysis .................................................................................................................... v G. Ratings of Project Performance in ISRRs .............................................................................................. xv H. Restructuring (if any) ............................................................................................................................. xv I. Disbursement Profile ............................................................................................................................... xv 1. Project context, development objectives and design ................................................................................. 1

1.1 Context at appraisal ............................................................................................................................. 1 1.2 Original project development objective (PDO) and key indicators .................................................... 4 1.3 Revised PDO and key indicators......................................................................................................... 4 1.4 Main Beneficiaries .............................................................................................................................. 5 1.5 Original components ........................................................................................................................... 5 1.6 Revised components ........................................................................................................................... 6 1.7 Other significant changes .................................................................................................................... 7

2. Key factors affecting implementation and outcomes ................................................................................ 8 2.1 Project preparation, design, and quality at entry ................................................................................. 8 2.2 Implementation ................................................................................................................................. 10 2.3 Monitoring and Evaluation (M&E) design, implementation and utilization .................................... 12 2.4 Safeguard and fiduciary compliance ................................................................................................. 12 2.5 Post-completion operation and next phase ........................................................................................ 15

3. Assessment of outcomes ......................................................................................................................... 15 3.1 Relevance of objectives, design and implementation ....................................................................... 15 3.2 Achievement of PDO ........................................................................................................................ 16 3.3 Efficiency .......................................................................................................................................... 18 3.4 Justification of overall outcome rating .............................................................................................. 20 3.5 Overarching themes, other outcomes and impacts ............................................................................ 20

4. Assessment of risk to development outcome .......................................................................................... 21 5. Assessment of Bank and borrower performance .................................................................................... 21

5.1 Bank performance ............................................................................................................................. 21 5.2 Borrower performance ...................................................................................................................... 22

6. Lessons learned ....................................................................................................................................... 24 7. Comments in issues raised by the borrower, implementing agencies, and partners ............................... 25

7.1 Borrower/implementing agencies ..................................................................................................... 25 7.2 Co-financiers ..................................................................................................................................... 25 7.3 Other partners and stakeholders ........................................................................................................ 25

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Annex 1. Project costs and financing .......................................................................................................... 26 Annex 2. Results framework analysis and outputs by component .............................................................. 27 Annex 3. Economic and financial analysis ................................................................................................. 44 Annex 4. Bank lending and implementation support/supervision processes .............................................. 48 Annex 5. Summary of Borrower's ICR ....................................................................................................... 50 Annex 6. List of Supporting Documents .................................................................................................... 54 MAP ............................................................................................................................................................ 55

Tables Table 1. Key outcome indicators by component ........................................................................................... 4 Table 2. Project’s components and subcomponent, with funding (US$ million) ......................................... 5 Table 3. Risks to PDO and proposed mitigation measures ........................................................................... 9 Table 4. Activities subject to safeguards policies and documents prepared ............................................... 13 Table 5. Achievement of PDO .................................................................................................................... 16 Table 6. Risk by development outcome ...................................................................................................... 21

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A. Basic Information

Country: Sierra Leone Project Name: Power and Water Project Project ID: P087203 L/C/TF Number(s): IDA-39450 ICR Date: 09/29/2011 ICR Type: Core ICR Lending Instrument: SIL Borrower: Republic of Sierra Leone Original Total Commitment: XDR 24.2M Disbursed Amount: XDR 22.34M Revised Amount: XDR 24.2M Environmental Category: B Implementing Agencies: Ministry of Energy and Power (MoEP) National Power Authority (NPA) National Commission for Privatization (NCP) Guma Valley Water Company (GVWC) Sierra Leone Water Company (SALWACO) Freetown Solid Waste Management Company (FSWMC)

Co-financiers and other external partners: Arab Bank for Economic Development in Africa (BADEA) Islamic Development Bank (IDB) Organization of Petroleum Exporting Countries (OPEC) UK Department for International Development (DFID)

B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 11/24/2003 Effectiveness: 09/30/2004 09/30/2004 Appraisal: 04/23/2004 Restructuring(s): NA NA Approval: 07/01/2004 Mid-term Review: 10/20/2008 10/15/2008 Closing: 03/31/2010 03/31/2011

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C. Ratings Summary

C.1 Performance Rating by ICR

Outcomes: Moderately satisfactory Risk to Development Outcome: Significant Bank Performance: Moderately satisfactory Borrower Performance: Moderately unsatisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)

Bank Ratings Borrower Ratings

Quality at Entry: Moderately satisfactory Government: Moderately unsatisfactory

Quality of Supervision: Moderately satisfactory Implementing Agencies: Moderately unsatisfactory

Overall Bank Performance: Moderately satisfactory

Overall Borrower Performance: Moderately unsatisfactory

C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance Indicators

QAG Assessments (if any) Rating

Potential Problem Project at any time (Yes/No): Yes

Quality at Entry (QEA): None

Problem Project at any time (Yes/No): Yes

Quality of Supervision (QSA): None

DO rating before Closing/Inactive status:

Moderately Satisfactory

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D. Sector and theme codes

Original Actual

Sector Code (as % of total Bank financing) Central government administration 7 7 Other social services 6 6 Power 44 44 Solid waste management 5 5 Water supply 38 38 Theme Code (as % of total Bank financing) Other human development 14 14 Pollution management and environmental health 14 14 Regulation and competition policy 14 14 Rural services and infrastructure 29 29 Urban services and housing for the poor 29 29

E. Bank staff

Positions At ICR At Approval

Vice President: Obiageli Katryn Ezekwesili Callisto Madavo Acting Country Director: Sergiy V. Kulyk Mats Karlsson Sector Manager: Junaid Kamal Ahmad Inger Andersen Project Team Leader: Hassan Madu Kida Paul Kriss ICR Team Leader: Kremena Ionkova ICR Primary Author: Carolina Dominguez Torres

F. Results Framework Analysis

Project development objective. The project’s development objective (PDO) was to improve sustainable access to essential power, rural water supply and sanitation, and urban solid waste management services. Improving access to sustainable power would be achieved by: (i) supporting power sector reform, capacity building, and institutional strengthening; and (ii) maintaining the existing power generation capacity. Improving access to sustainable rural water supply and sanitation, and urban solid waste management services would be achieved by: (i) installing boreholes fitted with hand pumps and hand-dug wells, and building institutional and household latrines in rural areas; (ii) promoting efficiency in urban water supply operations by strengthening the Guma Valley Water Company’s (GWVC) capacity; (iii) cleaning and improving the hygiene situation in Freetown in the short term; and (iv) establishing a solid waste management company in Freetown.

Revised project development objective. The PDO was not revised.

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(a) PDO Indicator(s)

Indicator Baseline Value Original Target

Values (from approval documents)

Formally Revised Target

Values

Actual Value Achieved at Completion or Target Years

Indicator 1 : # of people in rural areas provided with access to improved water sources under the project Value quantitative or Qualitative)

0 150,000 167,000

Date achieved 07/01/2004 12/06/2010 03/31/2011 Comments (incl. % achievement)

Original indicator included in the PAD reads: "Access to improved water supply for 150,000 people in rural and urban areas through the project". The original target was overachieved. In latest ISRRs (# 13 and #14) the end-target was modified to 180,000.

Indicator 2 : # of people in urban areas provided with access to improved water sources under the project. Value quantitative or Qualitative)

0 150,000 25,000


Original indicator included in the PAD reads: "Access to improved water supply for 150,000 people in rural and urban areas through the project". Original target for both rural and urban areas was overachieved.

Indicator 3 : # of people in urban areas provided with access to regular solid waste collection under the project Value quantitative or Qualitative)

0 See comment 115,000


Original indicator included in the PAD reads: "Access to improved solid waste management collection services for Freetown inhabitants". Original target achieved since the service improved as a result of the project.

Indicator 4 : # of people in urban areas provided with access to improved sanitation under the project Value quantitative or Qualitative)

0 See comment 110,000


This indicator was not originally included in the PAD.

Indicator 5 : # of people in urban areas provided with access to electricity under the project by household connectionsValue quantitative or Qualitative)

0 40,000 55,000


Original indicator included in the PAD reads: "Access to improved power supply for 40,000 customers in project area". Target overachieved.

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(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value Original Target

Values (from approval documents)

Formally Revised Target

Values

Actual Value Achieved at Completion or Target Years

Indicator 1 : Enactment of a new Electricity Law and NPA Act Value (quantitative or Qualitative)

n/a Enactment of a new Electricity Law and NPA Act

Achieved


Revision of the NPA Act completed and adopted. The new Electricity Production and Use Act was expected to be published officially in June 2011.

Indicator 2 : Creation of a regulatory function for the power sector within NCP

Value (quantitative or Qualitative)

n/a

Creation of a regulatory function for the power sector within NCP

Not achieved


The provision of technical advisory services and goods for the purpose of assisting the GoSL in establishing a regulatory function within NCP for its power sector was dropped after the failure of the Kingtom plant in September 2006.

Indicator 3 : Establishment of the National Energy Policy and Planning Unit and its operationalization


n/a

Establishment of the National Energy Policy and Planning Unit and its operationalization

Partially achieved


An Energy Policy and Planning Unit within MoEP was established, however the unit did not perform to expected standard.

Indicator 4 : Implementation of a management contract with a private firm for NPA


n/a

Implementation of a management contract with a private firm for NPA

Not achieved


The implementation of a management contract with a private firm for NPA was dropped after the failure of the Kingtom plant in September 2006. Funds for this activity were reallocated to emergency power generation.

Indicator 5 : 85% of energy sales are collected (excluding arrears) Value (quantitative or Qualitative)

70% 85% of energy sales are collected (excluding arrears)

No data


By project closing, improvement of NPA's collection rates and reduction of non-technical system losses were beginning to show some improvement as a result of new operating procedures instituted by the NPA consultant.

Indicator 6 : Fuel efficiency improvement (18 kWh/1G) Value (quantitative Missing 18 kWh/1G No data

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or Qualitative) Date achieved 07/01/2004 12/06/2010 03/31/2011 Comments (incl. % achievement)

Indicator 7 : Reduction in technical losses from 13.6% to 10.2% in 2006 and 6.8% in 2007 Value (quantitative or Qualitative)

13.6% 6.8% in 2007 Partially achieved


Progress in improving NPA's collection rates and reducing some of the non-technical system losses was beginning to show as a result of new operating procedures instituted by the NPA consultant, with strong support from both the Ministry and NCP.

Indicator 8 : Reduction in non-technical losses from 20% in 2002 to 15% in 2006, 10% in 2007, 5% in 2008, and gradually to 1% in 2012 Value (quantitative or Qualitative)

Missing 5% in 2008 and gradually to 1% in 2012

n/a


Indicator 9 : Return of NPA profitability, with average rate of return on fixed assets at 4% by 2005 and debt service coverage ratio at 1.5 and above from end-2005


Missing

Return of NPA profitability, with average rate of return on average fixed assets at 4% by 2005 and debt service coverage ratio at 1.5 and above from end-2005

No data


Indicator 10 : Staff ratio of NPA at 90 customers per employee Value (quantitative or Qualitative)

Missing 90 customers per employee No data


Indicator 11 : Increase in the amount of gross generation (GWh) from 120 GWh to 150 GWh in 2005, and 180 GWh in 2006 Value (quantitative or Qualitative)

120 GWh in 2004 180 GWh in 2006 No data

Date achieved 07/01/2004 12/06/2010 03/31/2011 Comments (incl. %

This intermediate result was no longer applicable after the failure of the Kingtom plant, which led to adjustments in activities, mainly to emergency power generation.

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achievement) Indicator 12 : Increase in the number of people with access to operational, sustained, and improved electricity servicesValue (quantitative or Qualitative)

Missing 40,000 55,000


This indicator was included as a PDO indicator and intermediate outcome indicator. For the purposes of the present ICR, the indicator will be only reported as a PDO indicator from now on.

Indicator 13 : Reduction in NPA operating costs of at least 20 percent between January 1, 2008 and December 31in 2009


Missing

Reduction in NPA operating costs of at least 20 percent between January 1, 2008 and December 31 in 2009

No data


Indicator 14 : Bumbuna PIU performing fiduciary safeguards responsibilities to the satisfaction of the financier


n/a

Bumbuna PIU performing fiduciary safeguards responsibilities to the satisfaction of the financier

Achieved


Not included in the PAD; Included here to reflect the adjustment of activities after the reallocation of funds to emergency power generation.

Indicator 15 : Clarification if the relationship between NPA management and Bumbuna management, and transparent power purchase agreement between NPA and Bumbuna


n/a

Sector structure becomes clear, with separation of ownership and operation. Sector must be financially sound and all revenues substantially accounted for.

Partially achieved

Date achieved 07/01/2004 12/06/2010 03/31/2011

Comments (incl. % achievement)

Not included in the PAD; Included here to reflect the adjustment of activities after the reallocation of funds to emergency power generation. Plan to unbundle the sector approved

Indicator 16 : Spare parts and tools acquired and essential repairs and maintenance performed


Missing

Spare parts and tools acquired and essential repairs and maintenance

Partially achieved

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performed Date achieved 07/01/2004 12/06/2010 03/31/2011 Comments (incl. % achievement)

Some spare parts were procured prior to the plant failure.

Indicator 17 : Degree of improvement in generation auxiliaries at Kingtom Value (quantitative or Qualitative)

Missing Missing Not achieved


Indicator 18 : Fire safety equipment procured, in place, and operating properly Value (quantitative or Qualitative)

Missing Fire safety equipment procured, in place, and operating properly

Not achieved


Indicator 19 : Degree of improvement in air quality and reduction of noise level around Kingtom Value (quantitative or Qualitative)

Missing Missing Not achieved


Indicator 20 : Living standards of resettled population at least as high as before project


Missing

Living standards of resettled population at least as high as before project

Achieved


The Resettlement Action Plan compensation payments for both the 33 kV and 11 kV sub-transmission lines were completed, with 95% of payments to project-affected persons covered. The remaining 5% of compensation funds were placed in an escrow account by NPA

Indicator 21 : Refurbishment and upgrade of low voltage, medium voltage and high voltage distribution network to carry a minimum of 60MW by 2009


Missing

LV, MV, and HV distribution network carries a minimum of 60MW by 2009

Achieved

Date achieved 07/01/2004 12/06/2010 03/31/2011

Comments (incl. % achievement)

Not included in the PAD; Included here to reflect the adjustment of activities after the reallocation of funds to emergency power generation. The INTERSERVE contract was completed by project closing.

Indicator 22 : Power generation from emergency generators 115,000 MWh/year for 2008 Value (quantitative 0

Power generation from emergency Achieved

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or Qualitative) generators 115,000 MWh/year for 2008


Included after the adjustment in activities following the failure of the Kingtom plant in September 2006, and subsequent reallocation of funds.

Indicator 23 : 18 km of 33 kV and 13 km of 11 kV sub-transmission lines constructed or rehabilitated


0

18 km of 33 kV and 13 km of 11 kV sub-transmission lines constructed or rehabilitated

Achieved



Indicator 24 : 40 MW of new or rehabilitated sub-transmission line capacity provided


0

40 MW of new or rehabilitated sub-transmission line capacity provided

Achieved



Indicator 25 : 3 water piped gravity-fed systems, and spring boxes, boreholes, wells, and sanitary facilities rehabilitated and constructed


0

3 water piped gravity-fed systems, and spring boxes, boreholes, wells, and sanitary facilities rehabilitated and constructed

Partially achieved


The construction of 3 water piped gravity-fed systems (two in Kenema and one in Bombali) was dropped due to the inability to secure the water source at Wanjei and Mabeina. At project completion, 200 boreholes and 400 boreholes with hand pumps constructed.

Indicator 26 : % of water schemes constructed in participating communities functioning as designed Value (quantitative or Qualitative)

0 90% Partially achieved at 64%


400 out of the 630 community water points were completed during project implementation.

Indicator 27 : 90% of water and sanitation community-based committees formed under the project functioning, and in charge of operating community water supply and sanitation services Value (quantitative or Qualitative)

Missing 90% Achieved at 95%

Date achieved 07/01/2004 12/06/2010 03/31/2011 Comments 600 participating communities were formed and trained.

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(incl. % achievement) Indicator 28 : % of participating water schemes covering O&M costs Value (quantitative or Qualitative)

0 90% 25%


The scheme is a new phenomenon and not many people are used to paying water

Indicator 29 : % of water committees that are gender balanced and fully functioning Value (quantitative or Qualitative)

0 90% 80%


Indicator 30 : % of project institutional latrines effectively used and maintained Value (quantitative or Qualitative)

0 70% No data


At project completion 100 institutional latrines were constructed.

Indicator 31 : % of project household latrines effectively used and maintained Value (quantitative or Qualitative)

0 80% Overachieved at 93%


The original target was to construct 2,240 household latrines. At project completion 2,100 latrines were constructed.

Indicator 32 : SALWACO's role strengthened. Value (quantitative or Qualitative)

0 Moderately Partially achieved


In spite of the early cancelation of the project management consultant contract, aimed at increasing SAWALCO's capacity over the project's life, the agency managed to implement the project's rural water and sanitation subcomponents.

Indicator 33 : Adoption of a national water supply and sanitation strategy Value (quantitative or Qualitative)

0 National water supply and sanitation strategy in place

Achieved


Water sector policy developed and approved.

Indicator 34 : # of house connections with metering in place Value 2,500 8,500 Partially achieved at 7,500

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(quantitative or Qualitative) Date achieved 07/01/2004 12/06/2010 03/31/2011 Comments (incl. % achievement)

Meter installation underway at project completion.

Indicator 35 : Computerized accounting management information system in place and functioning adequately Value (quantitative or Qualitative)

Missing Missing Achieved


A computerized management information system was set up in 2008.

Indicator 36 : Commercially oriented user fee charges in place Value (quantitative or Qualitative)

Missing Missing No data


Indicator 37 : Debt as % of sales Value (quantitative or Qualitative)

Missing Missing 37%


Indicator 38 : % improvement in billing ratio Value (quantitative or Qualitative)

22% 60% Partially achieved at 42%


The original target was to improve collection ratio to 60 percent of the billing. At project completion collection rate was 42 percent.

Indicator 39 : % reduction in commercial & technical losses of water production at GVWC Value (quantitative or Qualitative)

60% [30% commercial loss] 28% 50%


The original target was to reduce non-revenue water to 28 percent of the water production (18 percent commercial loss). At project completion, non-revenue water was 50 percent (20 percent commercial loss).

Indicator 40 : Emergency solid waste cleanup of Freetown completed Value (quantitative or Qualitative)

0 35% Achieved

Date achieved 07/01/2004 12/06/2010 03/31/2011 Comments Completed within the 3 months of project effectiveness (September 30, 2004).

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(incl. % achievement) Indicator 41 : Establishment of a well-functioning waste management mechanism for Freetown


Missing

Establishment of a well-functioning waste management mechanism for Freetown

Achieved


An independent solid waste management company was established in 2008. In 2009 solid waste management was established under the Freetown Council. At project completion, provision of services was affected by lack of spare parts for solid waste collection.

Indicator 42 : % increase in refuse collected Value (quantitative or Qualitative)

Missing Missing Achieved


The original target was to provide solid waste collection to 120,000 people in Freetown. At project completion, solid waste collection services were provided to 115,000 people.

Indicator 43 : % of waste management equipment purchased under project in operating condition Value (quantitative or Qualitative)

Missing Missing 70%


These equipments are still being used by the present management for waste collection and disposal.

Indicator 44 : User charges structure in place, based on cost recovery calculations Value (quantitative or Qualitative)

Missing User charges structure in place, based on cost recovery calculations

Not achieved


Indicator 45 : Sanitary landfills operating according to guidelines Value (quantitative or Qualitative)

Missing Sanitary landfills operating according to guidelines

Not achieved


Indicator 46 : Number of water utilities that the project is supporting Value (quantitative or Qualitative)

0 2 Achieved


Included as per the World Bank mandatory core indicators initiative. Refers to SALWACO and GVWC.

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G. Ratings of Project Performance in ISRRs

No. Date ISRR Archived

DO IP Actual Disbursements(US$ millions)

1 10/22/2004 Satisfactory Satisfactory 0.00 2 04/30/2005 Moderately Satisfactory Moderately Satisfactory 1.56 3 12/21/2005 Moderately Satisfactory Moderately Satisfactory 3.04 4 06/15/2006 Moderately Satisfactory Moderately Satisfactory 5.44 5 12/14/2006 Moderately Satisfactory Unsatisfactory 7.70 6 06/27/2007 Unsatisfactory Unsatisfactory 8.37 7 11/30/2007 Moderately Unsatisfactory Moderately Unsatisfactory 9.46 8 04/18/2008 Moderately Satisfactory Moderately Satisfactory 11.26 9 08/07/2008 Moderately Satisfactory Moderately Satisfactory 15.95 10 02/06/2009 Moderately Unsatisfactory Moderately Unsatisfactory 22.40 11 06/10/2009 Moderately Unsatisfactory Moderately Unsatisfactory 23.44 12 12/04/2009 Moderately Satisfactory Satisfactory 26.60 13 06/14/2010 Moderately Satisfactory Satisfactory 28.89 14 03/26/2011 Moderately Satisfactory Moderately Satisfactory 32.89

H. Restructuring (if any)

Not applicable

I. Disbursement Profile

1

1. Project context, development objectives and design

1.1 Context at appraisal

1. During the civil war in Sierra Leone (1990-2001), the country’s physical infrastructure, particularly electricity, water and sanitation, suffered from widespread destruction and lack of maintenance. Projects under implementation, including a major hydropower development near the town of Bumbuna, were stopped and power sector assets fell into disrepair. The sparse coverage and unreliability of infrastructure services were recognized as major impediments to sustainable economic growth and poverty reduction. In parallel to the deterioration of infrastructure assets, the conflict took an enormous toll on the population. The 10 years of civil war resulted in 2 million of Sierra Leone's inhabitants rendered homeless, about 500,000 people driven into internal exile, and 20,000 deaths. Despite the significant gains made by the Government during the years following the end of the conflict, 70 percent of Sierra Leone's population lived on less than US$1 per day1.

2. The Power and Water Project intended to address prioritized issues across various infrastructure services (i.e. power, water supply, sanitation, and solid waste management), reflecting a comprehensive development approach.

3. Background of the power sector. After years of conflict, Sierra Leone’s power sector was in a critical stage as power infrastructure assets were dilapidated. The power system was characterized by low capacity and reliability, poor performance of the national utility, and underinvestment. The constrained interconnected power system in the Western Area of Sierra Leone was affected by massive daily blackouts. Whereas the installed generation capacity of the system was 27 MW, much of it was obsolete and available capacity declined to around 11 MW. This situation was a serious impediment to economic growth, particularly in the industrial and service sectors. The suppressed demand was estimated at about 29 GWh (or 35 percent of 2004 electricity supply) for the industrial sector, 9 GWh (or 11 percent of 2004 electricity supply) for the commercial sector, and 48 GWh (or 57 percent of 2004 electricity supply) for the domestic sector. Most of the population (79 percent) depended on kerosene as the main source of lighting, as only 16 percent had access to electricity2.

4. The cost of electricity was also a major issue. Sierra Leone was one of the countries in West Africa with some of the highest costs of electricity generation and delivery. Even with varying degrees of subsidies, these costs translated into relatively high tariffs compared to regional and global benchmarks. Together with unreliable service and poor quality of supply, these tariffs posed major competitive problems for commercial and industrial enterprises. The exploitation of Sierra Leone’s hydrological resources (such as Bumbuna) held the potential to reduce underlying weighted costs of supply to between US$0.13 and US$0.16 per kWh.

5. Given the institutional context and the weak capacity, improvement of the power sector performance was a major challenge. Even though sectoral planning and coordination was delegated to the Ministry of Energy and Power (MoEP), the sector lacked sufficient government oversight and policy

1 Government of Sierra Leone, November 2007. Sierra Leone Integrated Household Survey (SLIHS) 2003/04. Final Statistical Report. 2 Government of Sierra Leone, November 2007. Sierra Leone Integrated Household Survey (SLIHS) 2003/04. Final Statistical Report.

2

guidance. The National Power Authority (NPA) had the monopoly over power supply (including hydro), sub-transmission, and distribution. In addition, the NPA was responsible for operating the Western Area system (27.2 MW), including Freetown, and some of the main provincial centers. Local rural supply plants were operated by other Ministries, under NPA’s technical and logistical support. NPA had oversight responsibilities also for the Bo-Kenema Power System (9 MW). Associated with its inefficient management, NPA was unable to cover its cost, suffered from losses in excess of 30 percent of production, and had a poor billing and collection system in place.

6. A major part of the solution to the insufficient generation capacity included the Bumbuna Support Project (P086903), approved by the World Bank in 2005, a 50 MW hydropower facility located on the Seli River near the town of Bumbuna. Originally, the plant was expected to be commissioned in late 2006 and to start generating power in 2009. The power component of the Power and Water Project was designed to enhance Sierra Leone’s access to electrical power through a series of measures focused on improving NPA performance, in anticipation of the delivery of low-cost hydropower from the proposed Bumbuna hydroelectric plant.

7. Background of the water supply and sanitation sector. The lack of a comprehensive sectoral policy in the water supply and sanitation sector lead to large intervention gaps. The water supply and sanitation sector was overseen by the MoEP. In Freetown, services were provided by Guma Valley Water Company (GVWC) and in rural areas, by the Sierra Leone Water Company (SALWACO). There was no clear sector policy guidance provided by the Water Supply Division of the MoEP, nor was there clear division of responsibilities among the different actors in the sector. For instance, SALWACO simultaneously assumed the roles of policy provider and contract implementer. Also, there was a lack of efficient institutions in rural areas to provide systematic support to communities, and projects undertaken were not sustained.

8. Due to the lack of a clear institutional framework and a sectoral development strategy, development partners’ presence in the sector in Sierra Leone was limited, in particular to urban-oriented interventions. Under the Urban Water Supply Project (Cr. 2702-SL), implemented between April 1995 and December 2005, the World Bank focused in the urban water supply and sanitation sector, helping to expand the water production capacity in Freetown but with limited impact on the policy reforms needed to assure the commercial viability and sustainability of the facilities constructed. Also, the World Bank implemented emergency interventions targeting secondary cities3. Beside urban areas, several international and local NGOs were working in remote areas, in small-scale operations, rehabilitating and constructing water points and sanitary facilities.

9. The provision of water supply and its quality in urban and peri-urban areas was especially poor. In Freetown, GVWC provided an average daily output of 18 million gallons per day, against a daily estimated demand of 35 million gallons/day. Slum-dwellers and poor residents in Freetown relied on stand posts or unprotected wells with questionable water quality. In addition, water in Freetown was

3 The objectives of the Urban Water Supply Project (Cr. 2702-SL) were: (i) improve water supply and sanitation services in Freetown; (ii) make water supply and sanitation services more accessible to the urban poor; (iii) strengthen GVWC and other agencies involved in the water supply and sanitation sector; (iv) encourage private sector participation in the sector; and (v) assist in the preparation of water master plans and development programs for the major towns outside Freetown. In 2000, the project reallocated funds for emergency works throughout the country.

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rationed and few customers had 24-hour supply. In peri-urban areas and densely populated poor urban areas, customers received supplies once a month or none at all. With rapid and uncoordinated expansion of urban settlements, more urban residents were likely to continue depending on vendors and tanker services, at costs far in excess of utility rates. The poor regularly paid US$0.03 to US$0.06 per bucket of water.

10. The absence of adequate intervention in rural areas led to low access to safe water supply and sanitation services, and to poor condition of infrastructure assets. Only around 30 percent of the rural population had access to safe drinking water supply from either water points, gravity-fed systems, spring boxes, or rain water harvesting, often unprotected and polluted. But even where a protected source existed, households used a combination of sources including streams and traditional wells for cooking, washing and bathing to meet their water needs. More than 60 percent of rural household had to walk more than 5 kilometers to reach the closest source of water4. Daily water consumption per capita was between 10 and 15 liters, below the basic requirements of 25 to 30 liters.

11. Access to safe sanitation was exceptionally poor at the time of appraisal. Around one in three rural dwellers practiced open defecation. Common pits were the prevalent form of sanitation in rural areas, with about 42 percent of the population using it as the main form of sanitation5.

12. Solid waste management in Freetown was a major problem, in particular due to institutional capacity constraints. Low service coverage of around 7 percent6of the urban population, substantial inefficiencies, low quality of service and labor productivity, and illegal dumping were the major difficulties in the sector. There was no billing system in place. Solid waste management responsibility was delegated to the Ministry of Youth and Sports (MoYS), which lacked institutional experience in waste management, equipment, and qualified manpower.

13. Government strategy. The project was aligned with key government strategies. Development of the power, rural water supply, and urban sanitation sectors were key elements in the country’s Interim Poverty Reduction Strategy Paper and the National Recovery Strategy. In these strategies, infrastructure and socials sectors were considered essential to revive the economy.

14. In line with the government strategies, the Power and Water Project provided funds for targeted critical investments aiming at establishing core infrastructure services that would contribute to poverty reduction and boost economic growth. In addition, it intended to support reforms in the power and water sectors.

15. Rationale for Bank assistance. The identification of the Power and Water Project grew out of sector-specific assessments of immediate and longer-term infrastructure needs as Sierra Leone was emerging from its post-conflict era. These assessments were based on experience generated by several Bank projects, notably the Power Rehabilitation Project (Cr. 2356-SL), the Freetown Infrastructure Rehabilitation Project (Cr. 2511-SL), and the Urban Water Supply Project (Cr. 2702-SL).

4 Government of Sierra Leone, November 2007. Sierra Leone Integrated Household Survey (SLIHS) 2003/04. Final Statistical Report. 5 Government of Sierra Leone, November 2007. Sierra Leone Integrated Household Survey (SLIHS) 2003/04. Final Statistical Report. 6 Government of Sierra Leone, November 2007. Sierra Leone Integrated Household Survey (SLIHS) 2003/04. Final Statistical Report.

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16. Given the breadth of infrastructure requirements and limited available resources, strategic choices were made based on a broad overview of sector requirements and the commitments made by other development agencies. Important gaps in donor support were identified, with the aim of addressing immediate needs for power, rural water supply and sanitation, and urban solid waste management, while supporting longer term efforts to strengthen institutional capabilities and introduce policy reforms.

1.2 Original project development objective (PDO) and key indicators

17. The PDO was to improve sustainable access to essential power, rural water supply and sanitation, and urban solid waste management services. This objective would be achieved by:

Power. Supporting power sector reform, capacity building, and institutional strengthening; and maintaining the existing power generation capacity;

Rural water supply and sanitation. Construction and rehabilitation of three water piped gravity-fed systems and spring boxes; installing boreholes fitted with hand pumps and hand-dug wells; and building institutional and household latrines in rural areas;

Urban water supply. Promoting efficiency in urban water supply operations by strengthening GWVC’s capacity;

Solid waste management. Cleaning and improving the hygiene situation in Freetown in the short term; and, establishing a solid waste management company in Freetown.

18. Key outcome indicators selected for measuring and monitoring progress towards achieving the PDOs are presented in Table 1. The wording of these indicators was adjusted in line with the World Bank mandatory core indicators initiative.

Table 1. Key outcome indicators by component

Component Key outcome indicators [1]

A. Power # of people in urban areas provided with access to electricity under the project by household connections

B. Water supply, sanitation, and solid waste management

# of people in rural areas provided with access to improved water sources under the project # of people in urban areas provided with access to improved water sources under the project # of people in urban areas provided with access to regular solid waste collection under the project # of people in urban areas provided with access to improved sanitation under the project

Note: [1] Wording of the PDO indicators was adjusted in line with the World Bank mandatory core indicators initiative. This did not affect the substance of the original PAD indicators.

1.3 Revised PDO and key indicators

19. The PDO was not revised as it remained relevant throughout the project implementation.

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1.4 Main Beneficiaries

20. Power component. The project aimed at providing residents of Freetown with a more stable power supply and a sustainable platform to accommodate future power supplies7.

21. Water supply and sanitation component. In the rural water supply and sanitation subcomponent, the project aimed at providing rural residents in the districts of Bo, Kenema, Bombali, and Tonkolili with clean drinking water and adequate rural sanitation facilities, contributing to improved health. At appraisal, the population of the four districts was estimated at about 1.2 million, of which 0.7 million resided in villages.

22. In the urban water supply subcomponent, the project aimed at improving the quality of service provided by GVWC to Freetown’s water consumers.

23. In the solid waste management subcomponent, the project aimed at providing Freetown residents with a reliable, sustainable, affordable, socially acceptable, and environmentally safe solid waste collection and disposal system.

1.5 Original components

24. The project included two major components related to the power sector and the water supply, sanitation, and waste management sectors, as presented in Table 2.

Table 2. Project’s components and subcomponent, with funding (US$ million)

Component IDA Cofinanciers

Subcomponent IDA Cofinanciers

[1] Total

A: Power $19.50 (plus $0.5 PPF Advance)

$14.16

A.1 Power sector reform $7.86 $0.14 $8.00 A.2 Capacity building and institutional strengthening/training

$2.33 $11.78 $14.11

A.3 Infrastructure $6.10 $0 $6.10 A.4 Social impact and environmental mitigation measures

$2.37 $1.64 $4.01

A.5. Project management and supervision for the infrastructure

$0.84 $ 0.60 $1.44

B: Water supply, sanitation, and solid waste management

$14.70 (plus $0.3 PPF Advance

$0.27

B.1 Rural community water supply and sanitation $9.03 $0.33 $9.36

B.2 Freetown solid waste management ($2.80M for IDA) $2.80 $0 $2.80 B.3 Urban water supply $2.87 $0 $2.87

Notes: [1] OPEC, Islamic Development Bank, BADEA and DFID Figures expressed in million; IDA= International Development Association; FSWMC=Freetown Solid Waste Management Company; GVWC= Guma Valley Water Company; kV=Kilovolt; NCP= National Commission for Privatization; NPA= National Power Authority; PIU= Project Implementation Unit; PPF= Project Preparation Facility.

7 Including the 50 MW Bumbuna hydroelectric project, expected to be commissioned in late 2006 and completed in 2009.

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1.6 Revised components

25. Power component. Originally, IDA funds were dedicated to support the Sierra Leone power sector reform, build and strengthen NPA’s capacity, and maintain and rehabilitate the existing generation capacity. However due to the advanced age (more than 30 years old) and deterioration of the equipment, in September 2006 the heavy fuel oil generators at the Kingtom plant failed. This situation left Sierra Leone with virtually no available capacity on the NPA national grid. The Government requested the reallocation of funds to emergency power generation (15MW for 2008) until power from the Bumbuna hydropower plan would become available. Therefore, the Development Credit Agreement was amended to reflect these changes (December 2007)8, which did not affect the PDO.

26. Funds originally planned to finance the management contract for the NPA9 were reallocated to emergency power generation to meet a portion of the cost of an independent power producer (IPP)10. The Government provided the remaining funds for the IPP and entered into a power purchasing agreement with the provider. In addition, International Development Association (IDA) funds were used to rehabilitate sub-transmission and distribution lines11 to allow for the distribution of power generated by the Bumbuna plant after its completion. Therefore, the implementation of the four-year management contract was dropped, with the expectation that the United Kingdom Department for International Development (DFID) would finance this activity.

27. Similarly, some of the activities under the power sector reform subcomponent were dropped to concentrate efforts on building the essential blocks of the power sector (i.e. reestablishment of generation, improvement of NPA, and delivery of upcoming power from the Bumbuna plant) after the collapse of the Kingtom plant. The activities dropped include the creation of a regulatory function for the power sector within NCP.

28. The adjustment in activities and subsequent reallocation of project funds led to amendments in the intermediate results indicators for the power component. Since formal project restructuring did not take place, intermediate outcome indicators were not formally revised. A detailed description of the intermediate indicators that were dropped and included after the reallocation of funds to power emergency generation is presented in Table b1, under section F.

8 According to the Amendment to the Development Credit Agreement (dated December 11, 2007), the words “Maintenance of the Borrower's existing power generation capacity through:" in Part A.3 of Schedule 2 to the Agreement are deleted, and a new paragraph (h) is added to said Part A.3 to read as follows: "(h) Provision of temporary leased power generation equipment at Kingtom until the Borrower has access to alternative sources of power supply”. 9 According to the Annex 4a of the PAD, regarding the implementation of a four-year management contract for NPA, the project “will finance the participation of the private sector in the power sector in Sierra Leone, through a performance based management contract for a period of four years at a cost estimated to be about US$5.0 million. The contract would be the result of a two-phase competitive process, wherein several pre-qualified bidders (Phase I) would submit offers to manage NPA to achieve a number of predetermined performance indicators. The process of selecting a management firm will be monitored through the National Commission for Privatization (NCP), which is empowered by GoSL to oversee the privatization of state-owned enterprises”. 10 The intermediate outcome indicator included in the ISRR’s to track progress on this activity was “Power generation from emergency generators 115,000 MWh/year for 2008”. 11 The intermediate outcome indicators included in the ISRRs to track progress on this activity were “18 kilometers of 33 kV and 13 kilometers of 11 kV sub-transmission lines constructed or rehabilitated” and “40 MW of new or rehabilitated sub-transmission line capacity provided”.

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29. Water supply, sanitation and solid waste management component. Under the rural water supply subcomponent, the three planned gravity-fed systems were not built due to the inability to secure the water source at Wanjei and Mabeina. Therefore, access to rural water supply was provided only through wells and boreholes.

1.7 Other significant changes

30. Closing date. The Closing Date was extended 12 months from March 31, 2010 to March 31, 2011 to allow additional time for completion of works on the low voltage distribution network and completion of the implementation of the Resettlement Action Plan (RAP).

31. Co-financing from government sources. In the original Development Credit Agreement, dated July 6, 2004, it was established that IDA funds would finance 90 percent of some operating costs and local expenditures of the power and water components, and that parallel financing would finance the remaining 10 percent. Later on, the Government requested 100 percent of IDA funding for the mentioned items, which was adjusted in the Amendments to the Development Credit Agreement dated December 11, 2007 and May 9, 2008.

32. Counterpart funding from the OPEC fund. Counterpart funding for the power component provisioned in the original project design from the OPEC fund did not materialized. Consequently, the acquisition of spare parts and tools and essential repairs at the Kingtom plant was dropped, as this activities was to be financed by the OPEC fund 12.

33. Counterpart funding from the Islamic Development Bank. Counterpart funding for the power component provisioned in the original project design from the Islamic Development Bank (Al Aqsa Fund) did not materialized. Consequently, the rehabilitation and reinforcement of the low voltage network, the construction of two customers’ service centers, and the acquisition of prepaid meters were dropped, as these activities were to be financed by the Islamic Development Bank 13.

34. Counterpart funding from DFID (water component). The grant (TF091108) for the project became effective on November 29, 2007 with an original approved amount of GBP 4,116,000 (US$8,517,683 equivalent). The objective of the grant was to support a leak detection program and emergency repairs of pipes, sub-transmission line at water treatment plant, and distribution networks in three pilot areas in Freetown. It also financed technical assistance and capacity building to strengthen the institutional and financial capacity of GVWC to enhance the operational performance of the water utility. Due to the exchange rate deterioration between GDP and US$, the available grant fund was decreased to US$6,569,341 equivalent, resulting in a loss of about US$2 million. Accordingly, the project had to adjust planned procurement and expenditure.

12 See details in PAD Annex 4a (Detailed Project Description). 13 See details in PAD Annex 4a (Detailed Project Description).

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2. Key factors affecting implementation and outcomes

2.1 Project preparation, design, and quality at entry

35. Project preparation. A qualified team with the required skills was in charge of project preparation, and an adequate monitoring system and related tools were established. Financial and economic analyses were conducted using tools already in place in other operations. Safeguards issues were properly covered.

36. However, rapid project preparation compromised the project’s quality at entry. Preparation took place in a rather short time (six months). This hindered proper identification of baseline indicators for most intermediate outcomes and compromised the adequacy of the participatory process. Further consultations with the GoSL and the power utility may have ensured better buy-in and commitment for the realization of the NPA management contract.

37. With regard to the power component, some elements of the project’s design were overly ambitious given the state of the power sector14 and Sierra Leone’s post-conflict environment. The project aimed at introducing a comprehensive power sector reform, including the establishment of a four-year management contract for NPA, as well as substantially improving the operational and financial performance of the utility. In light of the lack of sectoral planning, policy oversight, and meager managerial capacity at NPA, there appears to be a disconnect between the project design and actual capacity of the power component implementation agencies (MoEP, NCP, and NPA).

38. With regard to the water component, building on lessons learned from previous operations,15 the project’s design provided arrangements to deal with the weak capacity of the implementation agencies (SALWACO, GVWC, and MoYS). The design recognized the need to address SALWACO’s weak technical and financial management capacity, and included project management consultants in charge of the implementation process, who would work closely with SALWACO to build its capacity over the life of the project16. Similarly, the design recognized the need to establish sound institutional arrangements in the urban water supply sector and to strengthen GVWC’s managerial capacity, which would be addressed by hiring an external consulting firm17. For the provision of solid waste management, the project envisaged establishing an independent solid waste management company with legal and technical expertise. This model of service provision has worked successfully in other countries in Africa and was sought to be replicated in Freetown18.

39. The project provided for the establishment of two Project Implementation Units (PIU). The PIU at NPA, responsible for most activities encompassing infrastructure development, capacity building, and training and capacity building, was to be staffed with a project coordinator, a financial management

14 Refer to section 1.1. Context at appraisal. 15 These included, among others, the Urban Water Supply Project (Cr. 2428-SL) and the Power Rehabilitation Project (cr.2356-SL), both with overall unsatisfactory ICR ratings. 16 To ensure compliance the project introduced a disbursement condition as follows: “SALWACO project management consultancy firm contract signed”. 17 To ensure compliance the project introduced a disbursement condition as follows: “signature of contract with reform consultant with GVWC, sis months from credit effectiveness”. 18 To ensure compliance the project introduced a disbursement condition as follows: “establishment of FSWMC satisfactory to IDA, 18 months from credit effectiveness”.

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specialist, a power sector technical expert, an environmental specialist, and a social specialist. The PIU housed at SALWACO19 was to be responsible for the rural water supply and sanitation, urban water supply, and Freetown solid waste management subcomponent, and implemented by a management consultant firm recruited internationally on a competitive basis. However, the management consultant contract was cancelled and the PIU at SAWALCO was left understaffed with only a project coordinator and accountant20.

40. The design of a multi-sector project was aligned with guidance presented in the Transition Support Strategy that provides for concentrating engagements and limiting demands on scarce government capacity. This has, however, added to the complexity of project implementation.

41. Risks and their mitigation. The project’s major risks and measures for their mitigation were correctly identified at project preparation, as depicted in Table 3.

Table 3. Risks to PDO and proposed mitigation measures Risk Mitigation measure Low commitment from GoSL to the project and sector reforms

New letters of sector policy received for the power and water sectors. For the water sector, LG election and institutions in place. Disbursement conditionality for the solid waste management and urban water supply subcomponents.

Complex and multi‐sectoral operation

Intense supervision missions will be required and undertaken throughout project duration due to its complex nature.

Government counter‐funding does not materialize

The issue is beyond the direct influence of the project team and needs to be addressed at the country level.

Unavailability of spare parts at SALWACO due to inadequate delivery system

Limiting the number o f types o f pumps and organization o f a spare parts depot ensuring a supply chain in the regions/districts.

Sustainability of rural water sector investments through water tariffs may not materialize

Cost recovery through community contributions will be sought and practiced. Nevertheless, the limited experience with such a practice in Sierra Leone leaves us to evaluate this risk as significant.

Upon completion, communities do not maintain and sustain the facilities constructed

Pump repairmen and caretakers to be trained at the community level.

Note: GoSL= Government of Sierra Leone; SALWACO= Sierra Leone Water Corporation

42. During project implementation nearly all the above listed risks to the PDO materialized. While adequate mitigation measures were identified during project design, implementation difficulties did not allow proper mitigation of some of these risks (see sections 2.2 and 5 below).

43. Adequacy of participatory process. Adequate consultations with stakeholders did not take place due preparation timeframe. Intended beneficiary communities under the rural water sub-component were also not consulted. Consultations were rolled into project implementation instead.

19 The Bank team and the Borrower agreed on relocating the PIU office from the premises of SALWACO to the main office of the MoEP. Aide Memoire- water component, October 21-30, 2007. 20 It lacked staff on procurement and monitoring and enforcement.

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2.2 Implementation

44. Project restructuring. Formal restructuring of the project was proposed in 2007 but it was never formalized. The restructuring was expected to reflect changes in the project activities of the power component as well as key indicators. Reallocation of funds was instead approved in 2007 to allow the funding of the emergency power generation. Restructuring was again planned to take place shortly after extension of the closing date from March 31, 2010 to March 31, 2011, in order to formalize the changes in the intermediate indicators. However, following extension of the closing date, the Government announced that the works would be completed by July 2010. Hence, project restructuring did not take place due to the expected imminent works completion and the proximity of the closing date.

45. Quality Assessment of Lending Portfolio (QALP) by Quality Assurance Group. The QALP assessment in November 2008 considered that the likelihood of PDO achievement (at that time) moderately unlikely. It was found that the water supply, sanitation, and solid waste management development objectives were likely to achieve as they were progressing reasonably well. However, the QALP considered that the power development objective was unlikely to be achieved given the delays in project implementation. It also acknowledged that restructuring of the project was being considered by the time of the assessment.

46. Midterm Term Review (MTR) for the power component. The MTR for the power component was combined with the MTR of the Bumbuna Support Project (P086903) and conducted on February 4- 26, 2009. The recommendations following the review included: (i) strengthen implementation arrangements of the NPA to bring in line with the previous missions’ set of agreed actions for operational efficiency and transparency; (ii) resolve a number of “fiduciary lapses,” including weak recording of procurement contracts and inadequate contracts management; (iii) carry out agreed contracts, following competitive procurement for the rehabilitation the transmission line network in Freetown; and (iv) complete the transmission network routing in order to finalize the scope of resettlement and updating of the 2006 RAP.

47. MTR for the water supply and sanitation component. During the MTR for the water supply and sanitation component of the project held in October 200821, the Bank team recommended, among others actions, that:

GVWC prepare standard utility performance indicators in key operational areas, which was done by the utility with values for base year (2004) and targets (2008 to 2011). These indicators needed to be monitored regularly to assess GVWC’s operational performance;

The GVWC’s Board of Directors start playing a more active role by providing closer and effective monitoring against agreed performance targets;

SALWACO hire consultants for civil works supervision, and initiated the process of awarding contracts for the supply of hand pumps for hand-dug wells.

21 It was originally planned to take place in 2008. However, the government requested rescheduling it to allow the then-newly-recruited management at SAWALCO and FSWMC to recruit key personnel and implement key priority actions agreed with the Bank in the November 2007 and February 2008 missions.

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Environmental specialist should improve the design of the screening checklist to ensure that they can capture the complexity of problems in the field and adequately monitor environmental issues during construction.

48. Factors that contributed to successful implementation. Among other factors:

Flexibility during implementation. The rapid response was essential to deal with the power crisis created after the failure of the Kingtom plant in September 2006. Generation capacity was not only reestablished, but exceeded the initial generation capacity by project closing.

The project continued with the work initiated by DFID of providing financial assistance for commercial and financial managers within NPA. This technical assistance (TA) initiated some limited improvement in billing and revenue collection.

49. Factors that gave rise to problems in implementation, power component. Among other factors:

Lack of commitment within Government to undertake deep reforms in the sector. In 2007, prior to the failure of the generation units at Kingtom, legal covenants were not complied with, and there was no serious effort to improve the operational and financial performance of the utility.

Lack of commitment within Government to pursue the management contract for NPA. None of the commercial or technical parameters for the NPA envisaged under a management contract could be achieved.

Following the failure of the power station, the lack of sufficient generation capacity made it impossible for the Client to meet the project’s financial covenants.

Following the failure at Kingtom plant, the emergency requirements to provide power to Freetown necessitated reallocation of funds and prioritization of activities. Some initially planned activities had to be dropped in full to free financing.

Co-financing funds were not provided, which placed further burden on the IDA resources.

The PIU at the NPA was fired by the line Ministry in 2008 due to disputes related to procurement, after which the PIU function was assumed by the General Manager of NPA and an accountant. The Bank’s recommendations to supplement capacity were not acted on, leading to weak implementation arrangements.

50. Factors that gave rise to problems in implementation, water supply, and sanitation component. Among other factors:

Disagreement within Government as to which agency should have overall responsibility for solid waste management caused significant delays and hampered project implementation.

Significant delays were created by disagreements over contractual responsibilities between SALWALCO’s and the project management consultants hired to implement the project’s rural water supply and sanitation subcomponent.

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2.3 Monitoring and Evaluation (M&E) design, implementation and utilization

51. M&E Design. Adequate indicators were identified to monitor progress toward project development objectives. Also, key performance indicators were put in place to monitor NPA22 and GVWC23 operational and financial performance, in addition to physical indicators to track project implementation. At approval, several baseline data and target values were missing, in particular for intermediate outcome indicators related to the power component. The project design provided for hiring a consultant to assist the NPA’s PIU and NCP to produce baseline data and target values. Progress data was expected to emerge from the various executing agencies and reported to the Bank.

52. Due to weak country capacity for M&E, the project design provided for M&E to be performed by consultants. Under the power component, consultants were recruited to assist NPA’s PIU and SALWACO’s PIU, strengthening their capacity for M&E of project results. M&E reports were to be prepared on a monthly basis for the first year, and on a yearly basis thereafter. Results were to be discussed at annual stakeholder workshops.

53. M&E implementation. The PDO indicators were updated in line with the Bank’s mandatory core indicators initiative, and progress was tracked over the life of the project. However, several intermediate outcome indicators included in the PAD and Credit Agreement were not included in the Implementation and Status Results Reports (ISRR), blurring the tracking of project progress. In addition, the rearrangement of activities under the power component was not adequately reflected in the M&E framework, in particular in the ISRRs.

54. In addition, several monitoring and regulatory tools were not fully put in place and were affected by regular delays. In the 2008 MTR, the Bank team recommended that GVWC prepare standard utility indicators in key operational areas. Accordingly, GVWC prepared a list of performance indicators, with base-line values (2004) and targets for November 2008.

55. The project hired an M&E local consultant to assist SALWACO to develop the M&E framework and was asked to follow up with the monitoring of the works. This gave a clearer understanding on project implementation development.

2.4 Safeguard and fiduciary compliance

56. Environmental and social safeguards. The project triggered OP4.01 (Environmental Assessment) and OP4.12 (Involuntary Resettlement) and was classified as Category B. These policies were applicable to activities detailed in Table 4. Quality of implementation of activities in compliance

22 Operational performance: energy generated in kWh; station use in kWh; energy sold in kWh; commercial losses (%); sales billed (in kWh); revenues collected ; revenues to billed (%); total debtors ; debtors expressed as months of sales (months of sales); cost of sales ; cost of sales per kWh; generated ; cost of sales per kWh sold (Le/kWh); marine fuel oil used (kg); DFO used (kg); lubricant used (kg); kWh generated lubricant (kWWkg); number of workforce including contractors; number of customers; and number of customers per employee. Financial performance: rate of return on average fixed assets in operation; debt service coverage ratio; return on equity; net profit margin; revenue/sales ratio; gross operating margin; debt to equity ratio; collection ratio; and debtor/sales ratio. 23 Number of house connection with metering in place; computerized accounting/ MIS system in place and functioning adequately; commercially oriented fee user charges in place; debt as % of sales; % of improvement in billing ratio, and % reduction in commercial and technical losses.

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with these policies was rated moderately satisfactory in the last ISRR (March 2011) for overall safeguards compliance.

Table 4. Activities subject to safeguards policies and documents prepared Component Subcomponent Documents prepared Power Infrastructure ‐ EIA of the Kingtom power station in Freetown [1]

‐ EIA and EMP for the 33 kV sub‐transmission line network in Freetown [1] ‐ RAP for the 33 kV and 11 kV sub‐transmission lines [2]

Water supply, sanitation and solid waste management

Rural water supply and sanitation Urban water supply Solid waste management

‐ ESMF for guidance on safeguards requirements for potential water and sanitation sub‐projects [2] ‐ EIA and EMP for boreholes, pumping stations, storage tanks, and communal water points [2] ‐ Impacts covered possible wastewater contamination from muddy pathways and standing pools and solid waste management in Freetown and vicinity [2]

Notes: [1] Prepared and disclosed in‐country and in the World Bank’s InfoShop in March 2004; [2] Prepared and disclosed in‐country and in the World Bank’s InfoShop in April 2004. EIA=Environmental Impact Assessment; EMP=Environment Management Plan; ESMF=Environmental and Social Management Framework; kV= Kilovolt; RAP=Resettlement Action Plan

57. Environmental Impact Assessment (EIA) for the Kingtom power station in Freetown. The EIA was carried out and an environmental audit was done in June 2008, which also covered associated ancillary facilities in Power Plant I, and the Japan International Cooperation Agency (JICA) projects for power generators and a sub-station. The audit assessed that progress encompassed mitigation measures for preventing further environmental damage from potential oil spills, including potential spills from the 15 MW oil-fired emergency power generation plant. After the failure of the Kingtom plant in September 2006, the implementation of environmental mitigation measures in Kingtom was discontinued by NPA. This failure to complete the environmental clean-up measures and the postponement of GoSL to undertake repairs in the sub-station were the major reasons for downgrading the progress in implementation of the EIA to moderately satisfactory in the latest ISRR (March 2011).

58. EIA and Environmental Management Plan (EMP) for the 33 kV sub-transmission line network in Freetown. The activities recommended in the EIA and later included in the EMP –with specific mitigation measures– were reviewed in June 2008. The review found implementation to be satisfactory and recommended removal of the structures threatening human health and sub-transmission line security. These structures were removed in a satisfactory manner in connection with proper disposal of materials. The only structure that posed a significant environmental damage was a gas station at the end of the 11 kV sub-transmission line, but since the project was not funding this segment of the sub-transmission line network, the EMP guidelines would apply to future possible project interventions for rehabilitating this line. As the recommended actions were completed, the implementation progress rating of the EIA and EMP was satisfactory.

59. Resettlement Action Plan (RAP) for the 33 kV and 11 sub-transmission lines. The RAP was updated in 2006 to correspond with changes in the sub-transmission line routing and clearance limits. Due to delays in construction, the RAP was updated a second time in November 2009 to take into account changes in tower locations and other technical adjustments, which in turn increased the number of

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project-affected persons. Additionally, in January 2010, the GoSL and NPA requested the inclusion of the 11 kV sub-transmission line in the RAP, focusing on the critical structures along the existing line. The RAP compensation payments for both the 33 kV and 11 kV sub-transmission lines were completed, with 95 percent of payments to project-affected persons covered. The remaining 5 percent of compensation funds were placed in a set-aside (escrow) account by NPA until the disputes with project-affected persons were resolved. The RAP Completion Report was submitted by the local consultant and NPA in August 2011. Due to the extensive consultations, including during each update of the RAP, and the comprehensive livelihood restoration programs that were developed in a highly participatory manner24 the RAP implementation rating was highly satisfactory.

60. Environmental and Social Management Framework (ESMF) for guidance on safeguards requirements for potential water and sanitation sub-projects. The ESMF served as a functional tool for developing more detailed environment and social mitigation measures for identified sub-projects. However, the ESMF for the solid waste component was prepared only after the mid-term review (i.e. after the emergency clean-up had taken place). Nonetheless, it allowed some mitigation measures to be undertaken.

61. Resettlement Policy Framework (RPF) for boreholes, pumping stations, storage tanks, and communal water points. A RPF was completed to address potential problems arising from construction of these facilities. These potentially infringed upon owned or leased property resulting in potential temporary or permanent loss of land, crops, and other physical assets. RPF and RAP implementation progress is rated satisfactory.

62. In terms of the institutional set-up within the ministry for overall environmental management of water and sanitation projects, compliance by GoSL was inconsistent to be deemed sustainable over the long-term. For example, prior to 2008 there was no environmental specialist on the government side. While this changed in 2008 and compliance improved after an environmental specialist was assigned to SALWACO, mitigation measures were not always included in the bidding documents, which was a major shortcoming throughout implementation.

63. Procurement performance was rated moderately satisfactory in the latest ISRR (March 2011). Procurement was guided by the IDA Guidelines and provisions of the Sierra Leone Public Procurement Act. Various reviews by the Bank confirmed compliance with the provisions of the Project Agreement. In particular:

Power component. A review of NPA’s files in February 2009 found no procurement issues with respect to the Interserve contract or the contract for emergency generation. However, this component was significantly impacted by NPA's delay in timely processing of contractors’ invoices. In particular, the completion of the 33 kV line was delayed due to delays in payments to Interserve.

Water supply and sanitation component. No significant procurement issues were found with the implementation of the water supply and sanitation component. Procurement for the component was carried out by three agencies: GVWC, SALWACO, and FWMC.

24Three stakeholder committees were set up at the inter-ministerial, inter-community, and project-affected persons levels

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64. Financial Management (FM) was rated moderately satisfactory in the latest ISRR (March 2011). Whereas the FM arrangements and systems at entry were assessed as satisfactory and adequate with agreed FM actions and met the World Bank's FM requirements, during implementation the project faced some FM challenges. These included delays in submission of the financial reports (Audited Financial Statements and Interim Financial Reports) for most part of the project implementation. This was resolved by giving repeated reminders of the submission deadlines by the Bank, follow-up meetings, which led to submission of the various reports albeit substantially delayed. For instance, NPA did not comply with its obligation to submit annual financial statements for 2009 and 2010. The observed weaknesses in the FM arrangements were improved by regular supervision FM implementation support missions and regular communication of review comments of the financial reports to the project team. Processing of withdrawal applications for project expenditures were not without challenges, in particular in terms of providing accurate documentation and correct payment information.

2.5 Postcompletion operation and next phase

65. Following the closure of the present project, a new engagement is planned in the power sector funded from the Sierra Leone Infrastructure Development Fund established in 2010. The follow-up engagement aims at continuing the implementation of the reform program to increase access to power and enhance NPA’s financial and operation performance. It will build on initiated reforms and include:

A study for an integrated resources plan for service expansion, taking into consideration physical, technical, commercial, operational, environmental and social aspects

A study of NPA’s costs and how these reflect in a cost-effective tariff

A pre-feasibility study of hydropower potential for increased capacity

Rural electrification studies

A new commercial information system (billing and collection)

Further upgrade of the distribution system

Installat