The World Bank€¦ · The World Bank Report No: ICR2656 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-39130 IDA-H0920) ON A ... ADB Asian Development Bank ATM Automated teller

Document ofThe World Bank

Report No: ICR2656

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-39130 IDA-H0920)

ON A

CREDIT

IN THE AMOUNT OF SDR 4.4 MILLION (US$7.1 MILLION EQUIVALENT)

AND A

GRANT

IN THE AMOUNT OF SDR 5.8 MILLION (US$8.4 MILLION EQUIVALENT)

TO THE

PEOPLE’S REPUBLIC OF BANGLADESH

FOR A

POWER SECTOR DEVELOPMENT TECHNICAL ASSISTANCE PROJECT

June 24, 2013

Sustainable Development Department Bangladesh Country Management Unit South Asia Region

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CURRENCY EQUIVALENTS (Exchange Rate Effective June 12, 2013)

Currency Unit=Bangladesh Taka (TK) TK 1.00 = US$0.0128 US$1.00 = TK 77.75

FISCAL YEAR July 1 - June 30

ACRONYMS AND ABBREVIATIONS

ADB Asian Development BankATM Automated teller machineAusAid Australian Government Overseas Aid ProgramBERC Bangladesh Energy Regulatory CommissionBPDB Bangladesh Power Development BoardCAS DPL

Country Assistance StrategyDevelopment policy loan

EGCBEMR

Electricity Generation Company of BangladeshEnergy and Mineral Resources

ERP Enterprise Resource PlanningESIA Environmental and Social Impact AssessmentGDP Gross domestic productGSMPS Gas Sector Master Plan and StrategyGOB Government of BangladeshGTCL Gas Transmission Company LimitedIAICR

Implementing AgencyImplementation Completion Report

IDA International Development AssociationIPP Independent Power ProducerISR Implementation Status and ResultsJICA Japan International Cooperation AgencyKPI Key Performance IndicatorkV KilovoltkWh Kilowatt-hourLNG Liquefied Natural GasM&E Monitoring and EvaluationMIS Management information systemMPEMR Ministry of Power, Energy and Mineral ResourcesMW Megawatt NG National Grid OJT On-the-job-trainingPAD Project Appraisal DocumentPB Petrobangla PC Power Cell PDO Project Development ObjectivePSDTA Power Sector Development Technical AssistanceREB Rural Electrification BoardRERED Rural Electrification and Renewable Energy DevelopmentSBU Strategic Business UnitSDR Special Drawing RightsSPPP Siddhirganj Peaking Power ProjectSZPDCTA

South Zone Power Distribution CompanyTechnical assistance

USAID-SARI United States Agency for International Development South Asia Regional InitiativeUSC U.S. centUSoAC Uniform System of Accounts

Vice President: Isabel Guerrero Country Director: Johannes Zutt Sector Manager: Jyoti Shukla (acting)

Project Team Leader: Md. Iqbal ICR Team Leader: Tomoyuki Yamashita

THE PEOPLE’S REPUBLIC OF BANGLADESH Power Sector Development Technical Assistance Project

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design ............................................... 1

2. Key Factors Affecting Implementation and Outcomes .............................................. 4

3. Assessment of Outcomes .......................................................................................... 11

4. Assessment of Risk to Development Outcome ......................................................... 17

5. Assessment of Bank and Borrower Performance ..................................................... 17

6. Lessons Learned ....................................................................................................... 19

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners .......... 21

8. Conclusions ............................................................................................................... 22

Annex 1. Project Costs and Financing .......................................................................... 23

Annex 2. Results Framework ........................................................................................ 24

Annex 3. Bank Lending and Implementation Support/Supervision Processes ............ 29

Annex 4. Beneficiary Survey Results ........................................................................... 31

Annex 5. Borrower’s ICR ............................................................................................. 40

Annex 6. Time Series Data ........................................................................................... 50

Annex 7. List of Supporting Documents ...................................................................... 63

Map ............................................................................................................................... 64

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A. Basic Information

Country: Bangladesh Project Name: Power Sector Development Technical Assistance Project

Project ID: P078707 L/C/TF Number(s): IDA-39130,IDA-H0920ICR Date: 06/24/2013 ICR Type: Core ICR

Lending Instrument: TAL Borrower: PEOPLE'S REPUBLIC OF BANGLADESH

Original Total Commitment:

XDR 10.70M Disbursed Amount: XDR 9.53M

Revised Amount: XDR 10.19M Environmental Category: CImplementing Agencies: Power Cell, Bangladesh Energy Regulatory Commission, and PetrobanglaCofinanciers and Other External Partners: None.

B. Key Dates

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

Concept Review: 08/21/2003 Effectiveness: 10/31/2004 10/31/2004

Appraisal: 03/03/2004 Restructuring(s):

12/04/2007 11/09/2008 06/29/2011 10/30/2012

Approval: 06/03/2004 Mid-term Review: 03/28/2007 08/13/2007 Closing: 12/31/2008 12/31/2012

C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR)Bank Ratings Borrower Ratings

Quality at Entry: Moderately Satisfactory Government: Satisfactory

Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory

Overall Bank Performance: Satisfactory Overall Borrower

Performance: Satisfactory

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C.3 Quality at Entry and Implementation Performance IndicatorsImplementation

Performance Indicators QAG Assessments (if any) Rating

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

NoQuality at Entry (QEA):

None

Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme CodesOriginal Actual

Sector Code (as % of total Bank financing) Central government administration 27 27 Oil and gas 9 9 Transmission and Distribution of Electricity 64 64

Theme Code (as % of total Bank financing) City-wide Infrastructure and Service Delivery 14 14 Corporate governance 28 28 Infrastructure services for private sector development 29 29 Regulation and competition policy 29 29

E. Bank StaffPositions At ICR At Approval

Vice President: Isabel Guerrero Praful C. Patel Country Director: Johannes Zutt Christine I. Wallich Sector Manager: Jyoti Shukla (acting) Penelope J. Brook Project Team Leader: Md. Iqbal Salman Zaheer ICR Team Leader: Tomoyuki Yamashita - ICR Primary Author: Tomoyuki Yamashita -

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F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document)The project Development Objectives are to a) Create effective capacity within the Government (Ministry of Power, Energy and

Mineral Resources) to put in place power sector policies, industry structures, and a gas supply strategy needed for a balanced development of Bangladesh's power sector.

b) Create capacity within the Energy Regulatory Commission (ERC) to regulate the sector effectively.

c) Prepare and secure financing for, at least two well-structured power sector investment projects that are then efficiently implemented.

Revised Project Development Objectives (as approved by original approving authority)

The PDOs were not revised.

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(a) PDO Indicators

Originally, seven PDO Indicators were listed. The number of PDO Indicators was reduced, however, during the project implementation, according to the regional guidance for all projects. In the second ISR (April 14, 2005), when the baseline and target values for each indicators was shown first time, the number of indicators were reduced from original seven to six by merging Indicators 2 and 3. In the fifth ISR (November 9, 2006), the number of indicators was reduced again from six to five by merging Indicators 4 and 6.

In the table shown below, data for “Baseline Value” and “Original Target Values” refer to the fifth ISR and for “Actual Value Achieved at Completion or Target Years” to the seventeenth ISR, archived on January 1, 2013, since these values were not clearly stated in the PAD.

Since the reduction of the indicators was executed only in ISRs, the original seven indicators listed in the PAD were used for this ICR report.

Indicator Baseline Value Original Target Values

Formally Revised Target

Values

Actual Value Achieved at Completion or

Target Years

Indicator 1: Power sector policies adopted (particularly for underpinning financial recovery, faster access for all, and private participation), which are based on robust analysis, and are consistent with principles of commercial viability with safeguards for social & environmental protection.

Value(quantitative or

qualitative)

Baseline was zero. Financial recovery plan to be prepared before policy is formulated; rural access proceeding well, however policies to be updated to improve quality of supply. PPP framework be updated.

100% compliance. FRP, CPP, Corporatization/PPP and Generation Financial Strategy are prepared, adopted, and being implemented.

Financial Restructuring and recovery Plan (FRP), Captive Power Policy (CPP), Gas Master Sector Plan and Strategy (GSMPS), Generation Financing Strategy (GFS), Transaction Advice to Generation Expansion (IPPs and EPC contracts) have been prepared and adopted and are being implemented.

Date Achieved August 31, 2004 December 31, 2012 December 31, 2012 Comments

(inc. % achievement)

Indicator 2: Regulatory processes in place, particularly for power tariff-setting, and quality-of-service monitoring, which are effective in ensuring that customers receive acceptable levels of service at the least-cost (based on a broadly accepted investment, operational & financing plan).


qualitative)

Baseline was zero. There was no separation between policy-making and regulation. Limited separation existed between operation and policy making/regulation.

BERC issues regulations on licensing, tariff setting and performance standard. It issues licenses, sets/vets tariffs, and resolves conflicts. Customers receive satisfactory service at least cost.

100% achieved. Regulatory processes are in place on licensing, power and gas tariff setting, service quality monitoring and investment & operations planning & improved public perception of power.

Date Achieved August 31, 2004 December 31, 2012 December 31, 2012

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Comments (inc. %

achievement)

- Indicator 2 and Indicator 3 were merged in ISR #2 dated April 14, 2005 and created a new indicator “Regulatory process in place, particularly for (i) power tariff setting, (ii) service quality monitoring, and (iii) least cost investment & operations planning and improved public perception of power.”

Indicator 3: Improved public perception of power sector's performance, and customer satisfaction (measured through periodic surveys).


qualitative) N.A. N.A. N.A.

Date Achieved - - - Comments


- This indicator was merged with Indicator 2, as explained in the comments for Indicator 2.

Indicator 4:

- Corporate governance structures and policies put in place for at least 2 power enterprises which would facilitate transparent and efficient decision-making, efficient and accountable management, and credible and timely monitoring of performance (including accounting and audit arrangements consistent with international practices).


qualitative)

Baseline was 15%. The "Corporate" entities created under company law but fallen short of acceptable levels of corporate governance. Siddhirganj plant to be built in two years and South Zone Power Distribution Co. targeted for improvement.

100% compliance. Corporate Governance framework is designed, adopted in 2 power corporations resulting transparent decisions, accountable management, and credible monitoring of performance and management/operations improved by global experts.

95% achieved. Improved capacity observed in power enterprises in investment preparation, corporate governance reporting, transparent decision making, public procurement, company governance, and operating performance. Utility level MOUs on Key Performance Indicators signed and being monitored by Power Division.

Date Achieved August 31, 2004 December 31, 2012 December 31, 2012

Comments (inc. %

achievement)

- Indicator 4 and Indicator 6 were merged in ISR #5 dated November 9, 2006 and a new indicator was created: “Corporate governance structures and policies in place for at least 2 power enterprises to facilitate (i) transparent and efficient decision making, (ii) accountable management, (iii) credible monitoring, and (iv) improved management & operations.”

Indicator 5: Gas sector master plan and strategy updated, including strategy for meeting gas demand from power, industry and other sectors.


qualitative)

Baseline was zero. Gas Sector Master Plan existed, but development decisions appeared to be taken with a greater regard to political and emotive aspects, lacking credible analysis.

Gas Sector Master Plan and Strategy is prepared and adopted. GOB begins to implement Gas Master Plan and Strategy.

100% achieved. Petrobangla updated the Gas Sector Master Plan and Strategy (GSMPS) in 2012 in its recent report on Implementation and Financing Plan for Gas Sector Development, supported by PSDTA. It provides an updated and encouraging reserve estimate and strategy to meet gas demand by power, industry and other users. GOB is continuing to implement the GSMPS.



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Indicator 6: Management and operations of at least 2 power enterprises improved through the participation ofqualified global expertise.


qualitative) N.A. N.A. N.A.

Date Achieved - - - Comments


- This indicator was merged with Indicator 4, as explained in the comments for Indicator 4.

Indicator 7: Monitoring, reporting & invoicing of power flows between "unbundled" enterprises based on accurate system metering.


qualitative)

Baseline was zero. Quality of present data was uncertain and expected to improve with better metering, credible separation of generation, transmission and distribution entities, and autonomous regulation.

Compliance on increased reliability on information on power flow and commercial invoices between unbundled power entities.

100% achieved. Real-time data from interface meters are providing accurate readings on inter-utility energy flow between unbundled entities and on quality of system operations. Monitoring and invoicing of power flows between BPDB and utilities are based on these data.



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(b) Intermediate Outcome Indicator(s)

In the table shown below, data for “Baseline Value” refers to the second ISR (dated April 14, 2005). “Original Target Values” for all Intermediate Outcome Indictors appeared in the third ISR (dated October 27, 2005) and were finalized in the fifth ISR (dated November 9, 2006), and thus data for the target values in the following table refers to the fifth ISR. Information for “Actual Value Achieved at Completion or Target Years” is quoted from the seventeenth ISR (archived on January 1, 2013).

Indicator Baseline Value Original Target Values Formally

Revised Target Values

Actual Value Achieved at Completion or

Target Years

Indicator 1:

Detailed design of power sector restructuring prepared and shared with key stakeholders.Components include:

- Credible financial restructuring and recovery plan (FRP) which will restore power sector’s creditworthiness within a reasonable period while also meeting other sector objectives;

- Corporatization guidelines for public enterprises based on best global practices, tailored to country conditions;

- Update Power Sector Master Plan, and financing and procurement strategy, consistent with efficient mobilization of private and public investment;

- Social safeguard framework to facilitate access and at least a basic level of service for poor people, and effective safeguards for other stakeholders affected by the transition to corporatization and commercialization.


qualitative)

Baseline was zero. There were neither formal FRP for the Power sector nor guideline for corporatization of supply entities; the last update of Power System Master Plan (PSMP) was in 1995. A private power policy existed but had not been applied uniformly.

Credible Financial recovery plan to restore sector's creditworthiness in reasonable time.

100% achieved. A credible financial recovery plan to restore sector's creditworthiness is in place and under implementation. Both tariff and non-tariff measures are under implementation,including Utility Balance Sheet cleaning work, power tariff setting to gradually reach cost level and updating utility financial models to reflect updated figures.



Indicator 2: (1) Priority regulations (tariff setting, lease cost investment, economic dispatch, grid/ and distribution codes, etc.) issued. (2) BERC issues licenses and tariff rulings consistent with good industry practices.


qualitative)

Baseline was 5%. Some draft documents were prepared by ADB consultants a few years ago. Once BERC is properly staffed, it will need to review status of regulations and update/issue as appropriate.

Priority regulations are issued and BERC issues license and tariff rulings consistent with good industry practices.

95% achieved. Priority regulations on licensing and tariff setting on power generation and gas transmission and distribution were made. Tariff regulations on power transmission and distribution are under public hearing. BERC is issuing periodic tariff orders on electricity (bulk and retail) and CNG to achieve gradual

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financial sustainability of the sectors.


(inc. % achievement) Indicator 3: Plan will identify mid and long term gas infrastructure development priorities.


qualitative)

Baseline was zero. Comprehensive plan did not exist.

The Gas Sector Road Map is implemented.

100% achieved. Gas sector master plan was prepared and near-, mid-and long-term gas infrastructuredevelopment priorities were identified. The master plan was updated under the Financing and Implementation plan for gas sector development, supported by the project.



Indicator 4:

Siddhirganj Power Company (SPC) formed to own 3 peaking plants and qualified firm contracted to operate and manage SPC. Qualified management team contracted to improve operations and management of Chittagong & Sylhet distribution companies.


qualitative)

Baseline was zero. Financing two peaking plants were secured from ADB. IDA was considering 3rd plant from PSIDP. There was no agreement with ADB and GOB on Management Structure of Plant. Preparation of Siddhirganj Plant and Chittagong project was underway.

Siddhiragnj and Chittagong Power Co operations are improved through corporate governance framework and introduction of qualified management teams.

95% achieved. EGCB manages and operates two peaking units and contracted National Thermal Power Company (NTPC), India for O&M services. Electricity Generation Company of Bangladesh (EGCB) is working to hire another O&M for 335 MW Combined Cycle Power Plant.

Date Achieved April 7, 2004 December 31, 2012 December 31, 2012 Comments


Indicator 5: Training plan for each beneficiary to be designed under component A and agreed with IDA


qualitative)

Baseline was zero. There was inadequate attention within existing enterprises to human resources development.

Trainings imparted improve human resources of unbundled entities and BERC. This contributes to improve sector performance in terms of customer satisfaction by better electricity supply and service.

100% achieved. Project funded training and study tours on several areas of power, gas, energy and related regulations. These have built the institutional capacity of power and energy ministries, related utilities, planning ministries, etc. Training on twinning/JV resulted in a few MOUs. NTPC- BPDB Power company formed to finance, implement and operate a 1,300 MW coal-fired power plant in Khulna.

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Indicator 6: Sector reform data collected and analyzed in a timely manner. Monthly invoices between enterprises based on accurate meter readings.


qualitative)

Baseline was zero. Decline in funding for Power Cell over last few years resulted in lapse in advancing the reform program and monitoring its progress. State of inter-Enterprise metering needed to be assessed.

Sector reform and performance data are collated and analyzed in timely manner and monthly invoices between entities are prepared and furnished on accurate meter readings.

100% achieved. Allpower and gas utilities provide regular/monthly updates on sector reforms, procurement, operations and investments. All utility websites publish updated information including on procurement, operations and financial performance,governance, and other topics.The BPDB utilizes the system meter readings in inter-utility monthly bills on energy flows.



G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

ActualDisbursements(USD millions)

1 08/31/2004 Satisfactory Satisfactory 0.00 2 04/14/2005 Satisfactory Satisfactory 0.79 3 10/27/2005 Satisfactory Satisfactory 0.94 4 05/04/2006 Satisfactory Satisfactory 1.35 5 11/09/2006 Satisfactory Satisfactory 1.76

6 06/26/2007 Moderately Satisfactory Moderately Unsatisfactory 2.10

7 12/20/2007 Satisfactory Moderately Satisfactory 2.82 8 06/18/2008 Satisfactory Moderately Satisfactory 3.29 9 12/17/2008 Satisfactory Moderately Satisfactory 4.65

10 05/26/2009 Satisfactory Moderately Satisfactory 6.57 11 11/29/2009 Satisfactory Moderately Satisfactory 8.64 12 05/27/2010 Satisfactory Satisfactory 9.11 13 12/12/2010 Satisfactory Satisfactory 10.22 14 06/26/2011 Satisfactory Satisfactory 10.78 15 01/04/2012 Satisfactory Satisfactory 11.23 16 06/06/2012 Satisfactory Satisfactory 12.27 17 01/01/2013 Satisfactory Satisfactory 13.99

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H. Restructuring (if any)

Restructuring Date(s) Change

ISR Ratings at Restructuring

AmountDisbursed at

Restructuring in US$ million

Reason for Restructuring & Key Changes Made DO IP

12/04/2007 Project fund reallocation approved by the Country Director.

MS MU 2.82 The fund reallocation was executed to meet new demands, such as procurement of the South Zone Power Distribution Company Large Customer Meters.

11/09/2008 Project closing date extension approved by the Vice President.

S MS 4.65 The project closing date was extended for 30 months, from December 31, 2008 to June 30, 2011 due to slow project implementation (or disbursement).

06/29/2011 Project closing date extension and fund reallocation approved by the Country Director.

S S 10.78 The project closing date was extended for 18 months, from June 30, 2011 to December 31, 2012 to complete then-ongoing project activities and to support preparation of two major investment projects (feasibility studies for “National Grid 3 & 4” and “Repowering of Existing Power Plants to Improve Efficiency”) and development of an LNG terminal. The fund reallocation was executed as a result of modification of the project activities.

10/30/2012 Project fund reallocation and a partial fund cancelation approved by the Country Director.

S S 13.32 The restructuring was executed to reallocate a part of credit funds to categories originally identified to be financed only through grant fund, to cover shortfall for committed contracts. In addition, estimated amount of SDR 0.51 million that would remain undisbursed were canceled.

I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

At the time of appraisal (2004), Bangladesh had performed well on many macroeconomic indicators, was getting integrated into the world economy, and had achieved laudable progress on several social indicators. While the progress of the 1990s was heartening on many fronts, Bangladesh was still far short of its growth potential compared to most other low-income countries, in large part because of the still-nascent stage of its infrastructure development. Low electricity coverage (only 35 percent of households) and erratic electricity supply were, in particular, major obstacles to economic growth and poverty alleviation. The energy sector’s weak institutional framework and dismal financial situation were constraints to scaling up investment and improving performance in the sector.

Faced with substantial challenges, the sector’s main development objectives were to (a) expand access to efficient and reliable electricity services to the 65 percent of the population that did not enjoy access at that time; (b) improve the quality of service to consumers who already had access; (c) make the sector financially sustainable; and (d) revitalize service providers within an enabling institutional framework.

Bangladesh’s power sector had already made some progress towards putting in place policy measures to achieve these objectives, including, (a) policies for private power development (for independent power producers (IPPs) and small power plants), (b) rationalization of power prices, (c) improvements in the legal framework, (d) a promising model of rural electrification, (e) advances in sector “unbundling” and utility corporatization, (f) adoption of an institutional framework for the sector, and (g) a steady reduction in system losses. Despite these successes, however, there were symptoms of continued systemic weaknesses, such as (i) poor sector finances that creates pressure on public resources and undermined sound sector development; (ii) a slow pace of institutional reform; and (iii) pervasive power outages that imposed a high cost on the economy.1

The Bank had not processed any new lending operations to the energy sector in Bangladesh since 1990 due to the poor performance of the sector and an overall assessment of limited Government commitment and capacity to undertake meaningful reforms. In 2002, the Bank approved the Rural Electrification and Renewable Energy Development I (RERED I) project to support electrification program in the rural area, though the Bank remained reluctant to finance a project in the urban area due to the continued institutional and policy weakness.

It was in this context that the Government of Bangladesh (GOB) requested from the International Development Association (IDA) financial assistance and global experience to help overcome the prevailing capacity constraints and create the institutional framework envisaged in its Three-Year Road Map for power sector reforms. Underlying this request was a growing

1 Lost production because of power outages was US$772 million a year, equivalent to 11.5 percent of industrial production and 1.7 percent of 2001-02 GDP, as per the study “Economic Impact of Poor Power Quality on Industry - Bangladesh” carried out by the USAID-SARI Energy Program in 2002.

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acknowledgment that a sound institutional and policy foundation was necessary for the effective asset utilization and the substantial mobilization of much-needed financing for adequate investments that could improve performance of the power sector and allow it to contribute more fully to the country’s development.

The requested project was consistent with the World Bank’s Country Assistance Strategy (CAS) discussed by the Executive Directors on December 12, 2000. Specifically, it complemented the CAS objectives of better governance and private sector-led growth. By building institutional capacity in a vital sector of the economy, the project aimed to support the government’s evolving poverty alleviation strategy by eliminating a key bottleneck to a higher economic growth path.

1.2 Original Project Development Objectives and Key Indicators

The Project Development Objectives (PDOs) stated in the Development Financing Agreements dated June 23, 2004 were to:2

(a) Create effective capacity within the Ministry of Power, Energy and Mineral Resources (MPEMR) to put in place power sector policies and industry structures needed for the balanced development of Bangladesh’s power sector.

(b) Create regulatory capacity within the Bangladesh Energy Regulatory Commission (BERC) to regulate the sector effectively.

(c) Prepare and secure financing for at least two well-structured power sector investment projects that are then efficiently implemented.

As set out in the PAD, the PDOs were to be measured by the following seven key indicators:

1. Power sector policies adopted (particularly for underpinning financial recovery, faster access for all, and private participation), which are based on robust analysis and are consistent with principles of commercial viability with safeguards for social and environmental protection.

2. Regulatory processes in place, particularly for power tariff-setting and quality-of-service monitoring, which are effective in ensuring that customers receive acceptable levels of service at the least cost (based on a broadly accepted investment, operational, and financing plan).

3. Improved public perception of the power sector’s performance and customer satisfaction (measured through periodic surveys).

4. Corporate governance structures and policies put in place for at least two power enterprises, which would facilitate transparent and efficient decision-making, efficient and accountable management, and credible and timely monitoring of performance (including accounting and audit arrangements consistent with international practices).

5. Gas Sector Master Plan and Strategy (GSMPS) updated, ensuring it includes a strategy for meeting gas demand from power, industry and other sectors.

6. Management and operations of at least two power enterprises improved through the participation of qualified global experts.

2 PDO (a) in the PAD has an additional phrase, “a gas supply strategy”, after “…industry structures.”

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7. Monitoring, reporting, and invoicing of power flows between “unbundled” enterprises based on accurate system metering.

1.3 Revised PDOs and Key Indicators, and Reasons and Justification

The PDOs and the indicators were not formally revised during project implementation. However, from November 2006, the PDOs were monitored using five PDO indicators (not seven) in the Implementation Status and Results (ISR) Reports (indicators 2 and 3, and indicators 4 and 6 were merged as explained in section F of the Data Sheet). This change was based on the regional management guidelines to reduce the number of PDO indicators to five for effective monitoring.

1.4 Main Beneficiaries

Originally intended beneficiaries of the project were the main institutions dealing with the broader power and natural gas sectors, as well as the sector utilities. In particular, the direct beneficiaries were the three governmental implementing agencies (IAs) - Power Cell (PC), Petrobangla (PB), and BERC; the power and gas utilities (as reviewers and recipients of outputs3); and the MPEMR (as the supervisory ministry). IPPs, captive power suppliers, and local/global power sector investors were beneficiaries of investment promotion activities supported by the project. The new policies, strategies, regulations, and investment opportunities supported by the project were expected to eventually benefit the end-users through increased electricity connectivity, supply better services, and longer-term access to the power sector.

1.5 Original Components

The project originally comprised the following five components:

A. Technical Assistance (US$5.5 million)

A.1 Power Sector - Policy Making and Enterprise Restructuring (US$3.5 million) to provide the government (Power Division/PC) with the consulting support to scale up sector reforms by preparing a detailed restructuring plan, using this plan to shape government policies and the regulatory arrangements, and creating corporate structures for at least two urban electricity distribution entities.

A.2 Energy Sector Regulatory Framework (US$0.5 million) to be defined after the BERC is staffed, and to complement activities being funded from other sources.

A.3 Gas Sector Support (US$1.5 million) to assist the Energy and Mineral Resources Division of the MPEMR to strengthen planning and management capacity; prepare and update the GSMPS; and for PB to prepare implementation and financing plans, which will ensure reliable and adequate gas supply to power, industry, and other sectors.

3 The outputs included new policies, strategies, regulations, investment projects and their implementations; on-the-job and overseas training and study tours, information of investment promotion and sector reform workshops; consultations and decisions of donor coordination meetings and disseminated sector updates; and completed triggers implemented under Three-Year Power Reform Road Map.

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B. Power Companies Management Strengthening (US$4.0 million) to introduce modern operating and management practices into electricity distribution in non-rural areas and into a few power plants.

C. Training and Other Capacity Building Measures (US$1.25 million) to be designed under component A, based on feedback from beneficiary entities, and taking into account other ongoing training programs.

D. Goods and Equipment (US$4.25 million) to facilitate project management and install interface and system metering to support the unbundling of power sector enterprises.

E. Support for Project Implementation Operating Costs (US$0.5 million) to ensure the smooth operations of PC and BERC.

1.6 Revised Components

Not applicable.

1.7 Other Significant Changes

No significant changes to the project were made during implementation. The only changes made to the project were reallocation of funds to provide additional resources for some fast-moving categories and new tasks and time extensions to allow for completion of some ongoing/planned tasks. The project was extended twice for a total extension of four years and finally closed on December 31, 2012. In October 2012, an amount of SDR 0.51 million of credit funds was cancelled, as it was not expected to be utilized by the project closing date.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design, and Quality at Entry

Soundness of Background Analysis. The background analysis for the design of the PSDTA was well executed at entry, as shown in Annex 1 in the PAD. A robust analysis, which included a matrix on utility commercial and financial performance, was carried out on the country context, power sector issues, and the challenges of scaling up development of the power sector. The analysis examined the Government’s reform framework and concluded that accelerating sector development would require substantial financial investment.

The analysis precisely captured the situation of the energy sector at the time of project preparation. The power sector was facing growing demand as access to electricity was expanding at 11.5 percent (about 500,000 new connections added) per year. As a result, unmet demand remained high, even though peak demand served rose from approximately 1,600 MW in 1991 to 3,600MW in 2003. At the same time, the sector remained financially unsustainable, with system losses as high as 25 percent due to many factors, including poor planning, inadequate maintenance, and transmission and distribution equipment failures. Tariffs remained below costs, despite increases in average tariffs of 5 percent in both January and August 2002. Since tariffs

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were still below the costs, the sector significantly relied on subsidies from the Government. Accumulated account receivables in the sector piled up to the equivalent of 4.6 percent of GDP. While the need for additional investment was clear, the analysis convincingly concluded that the creation of sound institutions, policies, and an enabling framework was essential to attracting such investment and realizing its potential.

In May 2003, the Government adopted the Three-Year Road Map for Power Sector Reform, aimed at accelerating the slow pace of reforms in order to attract the substantial investments needed to provide electricity to all in a sustainable manner by 2020. The Government then asked IDA for assistance with overcoming prevailing capacity constraints and creating the institutional framework to implement the Road Map. It portrayed this as an urgent need. Therefore, it was rational for the Bank to provide the TA to implement sector reforms involving multiple stakeholders, to prepare a well-structured investment program, and to help the Government mobilize the private and public financing for expanding access and improving service quality.

Some core lessons from past IDA projects that had successfully created and strengthened the institutional and policy foundation for the sector were taken into account for the project. For example, past lending by IDA and other development partners to state-owned entities in the energy sector over the past decade resulted in short-term performance improvements that were not sustained because the projects did not achieve institutional reforms. This project therefore included a strong capacity development to generate sector reform. Another lesson was that institutional development requires focused attention from a competent and empowered reform team within Government to coordinate, debate, arbitrate, disseminate, and implement consultant recommendations. Thus, the PSDTA provided the reform implementation tools to the Government, which could then be supported through investment and lending.

Assessment of Project Design. When the project was being prepared, other donors had proposed a number of development projects that lacked effective sector coordination mechanisms, and the Bank had not provided lending support to the energy sector for a long time. The energy sector in the country was in great need of capacity support to (a) make sound decisions about which proposed projects should be undertaken with what prioritization, (b) prepare investment projects according to such prioritization, and (c) create an enabling environment for these investments to be realized and yield services improvement. Thus, this project, with its strong TA support, was appropriately designed to meet the country and sector needs.

The project design reflected all of the outcomes that the Government aimed to achieve within the scope of energy sector reform over the three-to-five years following PSDTA preparation. Specifically, these were: (a) an effective separation of policy making, regulation, and service providers; (b) improved utilization of existing assets and manpower through an optimal mix of better corporate governance, regulation, and investment in infrastructure; (c) transparency and efficiency in selection, financing, procurement, and implementation of investment projects; and (d) preparation, adoption, and concerted implementation of a realistic financial rehabilitation and recovery plan. In addition, to establish an effective sector coordination mechanism, the Government agreed to invite development partners to a meeting every six to 12 months to review progress in implementing the Three-Year Road Map.

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The PDOs selected were highly relevant to the challenges that the energy sector was facing. The main constraints to sector development - lack of sound institutions and policies, and financial mobilization - were well-targeted through the PDOs. Specifically, the PDOs focused on the policy, institutions, and regulations for improving the enabling environment to complement the investments committed by other donors. The project components were also well structured, since they were highly relevant and supportive to the achievement of the PDOs. To maximize the benefits from the sectoral and institutional reforms, the project also provided TA to prepare investment projects to mobilize investment financing for the sector.

However, the project design may have been too ambitious in its estimation of the implementation period of the TA given the Government’s limited institutional capacity and the large number of implementing and beneficiary agencies. The project implementation plan of four and a half years was clearly very ambitious given its objectives of long-term capacity building and the weaknesses of the institutions in the Bangladesh power sector. This is particularly evident in the fact that the project had to be extended for four additional years.

Assessment of Government Commitment. The GOB was and has remained highly committed to the project objectives. This commitment has been demonstrated, for example, in its assignment of high-level officials to guide and review the project. In particular, PC was assigned to be the leading organization of the project implementation, and a high-level Project Steering Committee, headed by the Principal Secretary in the Prime Minister’s Office was formed to review policy recommendations arising from the project activities. A Task Force headed by the Secretary, Power Division, was established to provide more frequent operational guidance to and coordination for the project and was responsible for reviewing overall policy recommendations. Furthermore, the GOB promised to establish and functionalize BERC as one of the IAs of the project. Although achievement of this promise was delayed, the GOB did functionalize BERC in 2007.

Assessment of Risk. The appraisal document correctly identified the overall risk rating at appraisal to be substantial, as the project was significantly more ambitious than a typical TA project. However, it included appropriate risk mitigation measures. For example, the operation was prepared and implemented in conjunction with several policy reform and investment projects that provided additional policy leverage and financing support in support of the overall development objectives.

The appraisal document appropriately highlighted the risks of strengthening PC and operationalizing the regulatory body, BERC, and empowering them to shape sector policies, regulations, and reforms. Among the other seven major potential risks identified in the PAD, four of them indeed proved to be major risks during implementation: (a) the politicization of key appointments to new institutions, (b) the obstruction of reform by vested quarters, (c) procurement/other procedural delays, and (d) frequent transfers of ministry and agency key officers. Although mitigation measures were identified for each of the potential risks, and the GOB took some steps to empower policy support and regulatory bodies (e.g., strengthening staffing of PC) during appraisal, some aspects of these risks were outside the control of the project. They necessitated broader elements of civil service reform over the medium-to-long term, but appointments in PC and BERC continued to be subject to three-to-five year terms. The

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realization of some of these identified risks led to some of the issues encountered during project implementation - specifically, the implementation delays and the resistance to corporatization of power companies.

2.2 Implementation

Slow Startup and Implementation Delays. At the outset, issues arising from adverse factors and the design of implementation arrangements caused significantly delays in project implementation by delaying procurement and other task completion. The adverse factors included frequent transfers of the Power Division Secretary, periodic transfer/removal of key PC and PB staff, and occasional understaffing in PC and BERC. The main complication with the implementation arrangements were that PC was the IA for the entire Power Sector Component, which was an implementation bottleneck, as the beneficiary power utilities preferred to implement their activities directly rather than routing through PC. Another complication with the IAs was that project funds were implemented through two different divisions of the Ministry of Power, requiring frequent meetings to review project processing and eventual streamlining of implementation. A final factor that significantly delayed project implementation was that BERC was established in April 2003 yet took four years to access project assistance due to the delays from the administrative apparatus in the Government.

From 2007 onwards, however, project implementation improved substantially, and this improved performance continued till the end of the project. The Power Secretaries were highly committed to the agenda and took personal initiative to resolve the implementation bottlenecks. As a result, project implementation was expedited and smoothened. Personnel appointments to BERC, in particular the appointment to BERC of an activist chairman in 2007, also helped move the project agenda forward and make PSDTA component A.2 (Energy Sector Regulatory Framework) operational. As a result, BERC started to access project funds in 2008 (refer to Annex 2 for detailed outputs and outcomes).

Government Commitment to Sector Issues. A key factor that supported the project implementation positively was the GOB’s continued commitment to the broader reform agenda, which it demonstrated in several ways. This commitment sustained despite a change in government and was reiterated in various public fora and recorded documents, including the annual review of the Three-Year Power Reform Road Map. In particular, continued high-level monitoring of key outputs, indicators and performance measures was a critical positive factor in influencing overall project outcomes by providing appropriate high-level management attention to and timely resolution of emerging issues. For example, the Ministry and the Power Division regularly reviewed the progress of the Results Matrix triggers and convened annual briefings almost every year for development partners. These focused on the progress achieved on implementing power sector institutional and policy reforms, summarizing how sector operations were aligned with the evolving sector structure and policies. Inter-IA issues were periodically discussed to resolve implementation issues, such as reallocation of funding categories, ramping up of disbursement, time extension, and finalization of the procurement plan to finance new or large tasks.

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The flow of public funds to the sector was regularly communicated to the sector stakeholders, development partners and people at large through websites. The Government’s, BERC’s, and utilities’ websites publish power and gas sector statistics, progress, procurement, and other necessary information for greater transparency and access to information on the sector.

Additionally, the GOB’s commitment and political support to power and gas distribution governance improvement persisted through the change of government. The respective divisions of the Power Ministry also continued to support and monitor the systems loss reduction and collection drives, the power sector financial restructuring and recovery plan, and the sector corporatization plans, all of which helped them achieve the non-tariff measures of the power sector financial restructuring plan and improve utility finances.

Mid-term Review and Restructuring. In the August 2007 mid-term review, the GOB requested a 2.5-year extension of the project term to allow for completion of ongoing tasks and improve the disbursement ratio from the then 15.4 percent. The project performance rating at that time was “Moderately Satisfactory” for the Development Objective (DO) and “Moderately Unsatisfactory” for Implementation Progress (IP); together these ratings prevented the project extension. To upgrade the project rating to Satisfactory, the Government agreed to complete three key actions: (a) increasing the capacity of Power Cell by hiring at least three experts in the fields of finance, information technology, and engineering; (b) awarding the contract for the Owner’s Engineer to the Siddhirganj Peaking Power Project (SPPP); and (c) preparing the bid evaluation report for the power system interface metering contract. The IAs completed almost all key actions within six months. The project rating was then upgraded to “Satisfactory” for DO and “Moderately Satisfactory” for IP by the implementation support mission of December 2007, which made the project extension possible. Further, project restructurings were carried out as needed to fit with the fast-evolving sector development, meet the emerging demands of the clients, keep the project relevant, and respond to the project implementation delays.

Complementary Bank Operations. As noted above, complementary interventions by the Bank and other multilateral partners were integral in supporting the overall development objectives of this TA operation. The Bank’s four multi-sectoral development policy loans (DPLs) and one Power DPL (totaling US$720 million in budget support) provided complementary support to the implementation of PSDTA, as these had several energy sector triggers for improving utility finances and creating an enabling environment to i) reduce account receivables, ii) reduce system loss, iii) prepare and implement a financial recovery plan, iv) establish BERC, v) upgrade energy prices and specially index petroleum prices to international fuel oil price, vi) reduce Bangladesh Petroleum Corporation’s debt, etc. Other donors, such as the Asian Development Bank (ADB), also provided additional TA in parallel and supported the preparation of the 2006-Power System Master Plan, corporatization of BPDB, and the preparation of investment projects in power generation and transmission. All the above tasks were aligned to the capacity building objectives of the sector and contributed to achieving the sector’s main development objectives. USAID also supported capacity building of BERC and helped it draft and finalize several regulations. With Australian Government Overseas Aid Program (AusAid) trust funds executed by the World Bank, six energy sector companies designed for themselves Key Performance Indicators (KPIs) to strengthen corporate governance and accountability. All six energy sector companies have signed

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an MOU to adopt KPIs with the Power Division. The KPIs are part of PDO indicator 4 of PSDTA.

Though these projects started off well, towards the end of the project period, the Bank support to the energy sector in Bangladesh suffered a significant setback. Concerned with the country-wide quality of the governance of procurement arrangements in the sector, the Bank and some other financiers withdrew much of their support. This led to significant delays in the financial closure of some of the expected IPPs, as some of these had planned to approach the World Bank for financial guarantees. At the time of finalizing this ICR, some of these IPPs are now closer to reaching financial closure by tapping different financing sources, including other parts of the World Bank Group, such as IFC and the MIGA.

2.3 Monitoring and Evaluation Design, Implementation, and Utilization

Monitoring and Evaluation Design. Monitoring and evaluation (M&E) of PDO achievement based on the PDO indicators was difficult. In part, this was simply the result of the nature of a TA project that includes sector reforms; in such projects, the indicators are somewhat perforce subjective, and it is difficult to foresee outputs, outcomes, and degrees of achievement at project entry. However, the linkage between the PDOs and indicators was also unclear, and there were no specific baseline and target values in the PAD (likely as a result of the challenge of foreseeing outcomes). Another cause of this M&E challenge was that the project was designed when the Bank still used a logical framework in project appraisal.

In addition, as explained in the section 1.3, the original seven PDO indicators were reduced to five, by merging PDO indicators 2 and 3 in the second ISR (April 14, 2005) and merging indicators 4 and 6 in the fifth ISR (November 9, 2006) in response to the regional guidance for all projects to make the implementation monitoring more manageable. As a result, however, monitoring of some of the indicators lacked continuity.

M&E Implementation and Utilization. As noted in section 2.2 (paragraph “Government Commitment to Sector Issues”), the GOB set up good systems for monitoring project implementation. The Government’s Task Force for power sector reform, chaired by the Power Secretary, regularly reviewed the project processing progress, outputs and policy recommendations and provided guidance for and endorsements of outputs and policy decisions. The project results were duly monitored and utilized appropriately by the ministry, IAs, and utilities through the preparation and adoption of a financial recovery plan; a corporate governance framework design for Siddhirganj and South Zone; an O&M contract design; the IPP contract revision; an interagency transaction design (PPA and GSA); a generation support framework and updated power system master plan (prepared with ADB support); a gas sector master plan and strategy and its updating; energy pricing policies; and monitoring of sector performance and procurement data, including publishing such data on websites.

The GOB used the results of project M&E in a variety of mechanisms to increase sector transparency and enhance public understanding of tariff reform. As a periodic survey method to monitor public perception of power sector’s performance and customer satisfaction, a public hearing has been held during electricity weeks every year. Information regarding the improved

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power supply and utility services was disclosed to the public through the IAs’ websites, some of which were developed with funds provided by the PSDTA, to enhance a public understanding on the necessity and effectiveness of the sector reform and tariff increases. BERC, strengthened with project support, has been carrying out utility tariff reviews in connection with every utility’s tariff application and seeking public opinions in this regard through websites and media advertisements. This provides scope for transparent flow and dissemination of sector information including utility performance improvements and customer satisfaction. In addition, the EMR Division, PB, and operating companies prepared and disseminated, with BERC support, a report on “Communication Strategy and Campaign for Natural Gas and Energy Reforms” that created awareness and support in favor of gas sector reforms and pricing within stakeholders and consumers.

2.4 Safeguard and Fiduciary Compliance

Safeguards. The project was categorized C, and no safeguards policies were triggered.

Fiduciary. The process of finalizing project outputs from the procurement stage and approving and implementing policy decisions was time consuming and burdensome. The concerned IAs from time to time asked for simplification of the process including some delegation of authority. The IAs did not have the incentives to efficiently implement the TA. The GOB and the IAs did not prefer to supervise firm-level contracts, as these took away their valuable operational time. They rather preferred using high-quality individual consultants housed in their offices and making them available full time with resolution of issues and with advice.

As of the project closing date, PC had settled all outstanding audit observations. At the earlier part of the project, PB failed to report project activities in entity audit reports. After the Bank's follow-ups, however, reporting of project activities in entity audit reports began and continued till closing of the project. Financial management computerization of BERC and its audited report for FY 2012 were not completed by the project closing date. However, BERC's audit report for 2012 has now been completed and reviewed by the Bank. Disbursements were very slow due to slow project implementation until the second project restructuring in November 2008 and the project implementation support mission in June 2009. After that, disbursement improved consistently, and final disbursement reached 92 percent (or SDR 9.35 million) by the project closing date.

2.5 Post-Completion Operation and Next Phase

Given the long-term nature of institutional development and sector reform objectives, continued support to these core sector agencies (PC, PB, and BERC) is needed to continue and sustain the sector reform process and to secure financing to facility development. The support provided through PSDTA went a long way towards furthering the development of institutional capacity of these institutions, but - as would be expected of sector institutions at the level of development of Bangladesh - a significant agenda remains. The GOB has sought continued Bank support to help complete the agenda. They requested financial support for seven activities that the Bank agreed to support under a TA of Rural Electrification and Renewable Energy Development II (RERED II) project recently approved by the Bank. It is presently under implementation.

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3. Assessment of Outcomes

3.1 Relevance of Objectives, Design, and Implementation

The objectives of project are still highly relevant for the country’s priorities and are reflected in the Bank’s current CAS for Bangladesh. Specifically, the project objectives are relevant for the CAS pillar “Accelerate Growth: Increase Transformative Investment and Enhance the Business Environment”, stated in Strategic Objective #1 in the 2010 CAS. The power deficit is cited as the biggest constraint to doing business in Bangladesh. Thus, fulfilling this objective requires a sustainable, broad-based investment program that includes conventional new capacity, rehabilitation of older capacity, and additional natural gas supply. In addition, one of the risks to achieving results under the CAS is “weak institutional capacity”, and institutional capacity development is recognized as a long-term agenda. PSDTA took the first steps toward providing the relevant support to address the sector weaknesses, though further support will be required to address this long-term agenda.

The project design was appropriately aligned with the GOB’s “Three-Year Road Map for Power Sector Reform (2009-2012)”, particularly through its focus on improving policy and regulatory frameworks, developing capacity in the power sector, preparing energy sector projects, and making progress on the GOB’s corporatization agenda. These were very relevant and adequate objectives to accelerate the power sector’s institutional and policy reforms program, improve utility finances, and create an enabling institutional framework to revitalize the service providers.

The project implementation was commendably kept relevant, particularly in its flexibility in adjusting project activities in response to obstacles and a changing country environment. For example, it added, dropped, and adjusted the activities from the project’s original plan based on discussion and agreement with the GOB, the IAs, the Bank, and other donors, such as the ADB and the Japan International Cooperation Agency (JICA). Some dropped activities were completed by PC in-house officers or executed by other donors instead of using PSDTA funds. New activities were added based on emerging demands, such as for partial support to prepare new investment projects.

3.2 Achievement of Project Development Objectives: Satisfactory

Achievement of each component of the PDO is assessed against the subset of the seven PDO indicators listed in the PAD relevant to that component. Annex 2 provides more details on achievement of the indicators, and Annex 6 illustrates that achievement with graphs and tables.

Achievement of PDO (a) Create effective capacity within the MPEMR to put in place power sector policies and industry structures needed for the balanced development of Bangladesh’s power sector, measured against PDO indicators 1, 5, and 7, was rated Satisfactory. Through the critical studies and the development and adoption of vital sector policies and strategies under PSDTA, a significant capacity in systems planning, private participation promotion, and financial recovery has been established in both the power and gas sectors. The training programs also contributed to the effective capacity building of PC,

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according to the information obtained from participants of 56 trainings (details shown in Annex 4). Result/PDO indicator-wise achievement of outcomes is noted below.

The target for PDO indicator 1 was fully achieved. Five robust studies were completed, and seven power sector policies4 were prepared, approved, and adopted. These outputs contributed to the major outcomes in the power sector, such as (a) increased electricity generation capacity - achieved 8,525 MW installed capacity exceeding the 7,158 MW target by December 2012 of the Power System Master Plan, with 3,922 MW added by private IPPs after 2004, 3,207 MW under construction, and 3,635 MW under process; (b) utility balance sheet cleaning for the country’s power sector continued, including making within- and inter-utility adjustments and keeping long-term debts in provision; (c) a significant reduction in system losses (or cost of services) from 20.04 percent in 2004 to 12.26 percent in 2012; (d) a significant reduction in accounts receivable from 6.45 months in 2004 to 2.21 months in 2012; and (e) improved operating income to the power sector.

The target for PDO indicator 5 was fully achieved. The Gas Sector Master Plan and Strategy (GSMPS) has been developed, approved, and adopted. The GSMPS has been guiding the actual investment and development programs in the gas sector. In total, PB completed six studies related to the GSMPS. The GSMPS revealed that the country’s domestic gas supply capacity would diminish after 2020 as reserves dry up. As a result, the government decided to gradually shift electricity generation to combined cycle and coal-based thermal power plants to reduce gas consumption and to start importing LNG to balance domestic gas supply. PSDTA activities were therefore modified to fund preparation for construction of an LNG import terminal.

The target for PDO indicator 7 was fully achieved. The power system interface metering system with 415 meters was installed in 2011 based on an in-house assessment by PC with Bank supervision support in 2006-07. As a result, inter-utility disputes on energy flow have been reduced, and invoices have been published based on accurate readings of the system meters.

Achievement of PDO (b) Create capacity within the Bangladesh Energy Regulatory Commission (BERC) to regulate the sector effectively, measured against PDO indicators 2 and 3, was also rated Satisfactory. BERC is functioning and regulating the power sector adequately with in-house capacity built with PSDTA through various studies, preparation of technical standards and codes, reviewing and processing license applications, and preparation and enforcement of tariff regulations. BERC received trainings on related areas under PSDTA that also built capacity in the institution (details are in Annex 4).

Toward PDO indicator 2, six regulations on licensing and energy tariffs (excluding for petroleum products) were prepared, and four of them have become effective. Based on regulations in place,

4 Seven power sector policies prepared were 1) Private Sector Power Generation Policy(amended in 2004 & 2009), 2) Policy Guidelines for Power Purchase from Captive Power Plant (2007), 3) Policy Guidelines for Enhancement of Private Participation in the Power Sector(2008), 4) Guidelines for Remote Area Power Supply System(RAPSS) (2007), 5) Renewable Energy Policy(2008), 6) . Emergency Energy & Power Supply Special Act (2010), and 7) National Energy Policy (updated in 2012), as shown in “Outputs” for Indicator 1 in Annex 2.

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1,460 licenses (1,250 for electricity sector and 210 for gas sector) and 43 tariff orders (excluding for petroleum products) and directives were issued between 2008 and 2012. As a result, wholesale and retail electricity tariffs were increased by 118 percent (from USC 3.09/kWh to USC 6.71/kWh) and 62 percent (from USC 5.09/kWh to USC 8.21/kWh), respectively, after 2008. This is a significant contribution to the financial recovery and sustainability of the power sector. Different categories of gas tariffs were also increased by between 8 percent and 79.1 percent after 2008. In total, four technical and financial codes and standards were prepared to realize the least-cost investment. The Power Factor Improvement Plan was developed and implemented. As a result, customers are receiving improved power supply and utility service: electricity access increased (from 35 percent in 2004 to 60 percent in 2012); utility services, especially from DESCO and DPDC) improved; and per-capita consumption increased (from 133 kWh in 2004 to 220 kWh in 2012). Setting tariff regulations (or benchmarks) by BERC made private investment to the energy sector more attractive: four IPPs expressed interests, and three among them developed power plants to sell electricity to the grid.

PDO indicator 3 was partially achieved. Public perception of the power sector’s performance and customer satisfaction were monitored through a public hearing held during electricity week every year. However, there is no way to capture and trace the improvement of public perception quantitatively for these sector performance and customer satisfaction. The project developed a mechanism to provide information on better sector performance and services to customers. Now people have improved access to disclosed energy sector data and operations, including on utility operational and commercial performance, acts, regulations, codes, tariff orders, public hearings, procurement notices, and open meeting notices, through BERC and respective utility websites. Online application for new connections was established. Electricity bill-pay facilities, including automated teller machine (ATM), mobile phone, and online, were also improved.

Achievement of PDO (c) Prepare, and secure financing for, at least two well-structured power sector investment projects that are then efficiently implemented, measured against PDO indicators 4 and 6, was rated Moderately Satisfactory. The target of PDO indicator 4 was partially achieved. The project targeted to establish corporate governance and relevant operations in SPPP and the South Zone Power Distribution Company (SZPDC) and provide preparations support to them. PSDTA prepared six investment projects in power generation, transmission, distribution; energy efficiency; and gas transmission and distribution. Two well-structured power sector investment projects (SPPP and SZPDC) were fully prepared, but financing was secured only for the SPPP. Although the SZPDC was also considered for Bank financing, the Bank had to hold the financing because of backtracking of corporatization in the power sector and the Government’s inability to move ahead with the SZPDC corporatization. This was, however, beyond the control of PSDTA.

Four other investment projects (except SPPP and SZPDC) - (a) Siddhirganj 335 MW Combined Cycle Power Project, (b) Ghorasal Repowering Project for increasing power generation efficiency, (c) NG-3 and NG-4 400 kV Transmission Project; and (d) the Remote Metering Project - were prepared with the intention of obtaining Bank financing. However, the Bank was not able to proceed with the appraisal of these projects for financing due to the Bank’s suspension of financing large infrastructure projects.

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Taking into account of the experiences of the corporatization program of the Bangladesh Power Development Board (BPDB), which caused opposition to the corporatization agenda due to fear of job loss in energy sector, the government is now considering following a new model for unbundling: the Strategic Business Unit (SBU) model. The SBU model establishes separate business units within the parent company (in this case, the BPDB) that have relatively independent decision making in business operations and clearly defined accountability. Under this model, each SBU will have to introduce KPIs in order to maintain accountability, transparency, and good governance through continuous monitoring, evaluation, and responsibility fixation. Under a separate capacity development program supported by the AusAid, six corporatized entities of power and gas sectors developed separate KPIs that encouraged the Power Division to enter into MOUs with its utilities on the KPIs. In early 2012, the Power Division signed an MOU to adopt selective KPIs with all of the power sector entities.

PDO indicator 6 was achieved. Efforts were made in improving the governance and management of enterprises in the energy sector. Management and operational support with global expertise was provided to two power enterprises: the BPDB and the EGCB. PSDTA provided global and local expertise to various utilities (the BPDB, the EGCB, and the Rural Electrification Board (REB)) to help with investment project preparation; company governance framework design and implementation; financial modeling and tariff analysis; design of transactions, including operation and maintenance contracts; an institutional effectiveness study; high-quality procurement; and environmental and social impact assessments. This has resulted in improved management and operations capacity of these utilities. Contract documents for several engineering, procurement, and construction (EPC) and IPP power plants were also reviewed and prepared with the support of global expertise. Design of an Enterprise Resource Planning (ERP) System has been advanced with PSDTA for EGCB and Gas Transmission Company Limited (GTCL).

Based on the assessment of achievement of the individual PDOs, the consolidated PDO achievement is rated Satisfactory.

3.3 Efficiency

From a cost-benefit viewpoint, the project was excellent. With only limited investment (US$15.5 million), the project achieved tremendous outputs and outcomes in the country’s energy sector. These included cost recovery, financial sustainability, increased generation capacity, increased access, improved customer services, institutional capacity development, adoption of explicit policies, legally vetted regulations, transparent project selection, better management and decision making, and private investment. In addition, the project prepared at least six projects (one project was implemented with Bank financing, and five of them are now ready to implement), totaling more than several-hundred-million US dollars, and other donors are already interested in financing some of them.

Time-wise, the project efficiency was not up to the mark. The project period was extended by a total of 48 months through two restructurings, neither of which increased the project financing nor expanded the PDOs. In other words, the project required an additional four years to achieve its original PDOs. However, this extension is likely due to an overly ambitious original time

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estimate rather than to project inefficiencies. Technical support for sector reform typically takes a long time, and delays in the initial few years are common while new institutions are put in place, competitive resources are acquired, and procurements occur. Therefore, in such projects, the outputs and the outcomes are often delivered only at the late stage. In fact, legal vetting for regulations, tariff orders, corporatization of utilities, adoption of improved governance and management, new projects preparation, and studies were only realized in the last a few years of the PSDTA. Therefore, an earlier closing of the project would not have allowed for delivery of the significant outputs and outcomes that will sustain the project’s impact in the long term.

Evaluation of efficiency through economic and financial analysis was not applicable to the project.

3.4 Justification of Overall Outcome Rating: Achievement of PDO-Satisfactory

The overall outcome rating of the project is Satisfactory based on the large number of outputs and significant outcomes achieved in a critical sector. The outcomes are expected to deliver significant positive impacts in both the near and distant future. Significant outcomes included the commissioning of new power generation capacity that went beyond the targets of system expansion planning, with active private participation. A robust financial restructuring and recovery plan was prepared to restore the sector’s financial creditworthiness, and its tariff and non-tariff measures are being implemented across the board. Institutional arrangements for sector regulation - particularly power sector regulation - were put into place, and the regulatory body became adequately functional, especially in setting power tariffs in-house and monitoring service quality. A corporate governance framework and international management practices were introduced to the targeted public enterprises in the energy sector, and many more than the planned investment projects were prepared for implementation, though only one of them reached financial closure due to issues beyond the control of PSDTA.

Institutional Change/Strengthening. The most important institutional change PSDTA brought about in the power sector is the elimination of hostility and resistance of the service providers to power sector reforms and against PC and the ministries, particularly by rejecting recommendations and actions on Power Sector Reforms and the Three-Year Reform Road Map. The Power Division, especially in the latter years of PSDTA, succeeded in bringing together all of the utilities and PC under one umbrella on sector reform strategy, regulations, and transmission and distribution expansion program.

In 2009-10, the GOB embarked upon a massive power generation expansion program supported by a fuel diversification program that established the GOB position in terms of accelerating procurement and finalizing contracts of both public and private power plants. This is in contrast to the slow pace of tendering/retendering of public and private power plants in the earlier regime. PSDTA provided strong technical and procurement support with high quality global technical, financial and legal expertise to make this happen. All project implementing agencies and utilities involved developed capacity (which was significant on some areas) in sector reforms and strategy, financial recovery, regulatory response and tariff filing, development planning, physical project preparation, implementation, operations and maintenance of assets, procurement, financial management, and supervision of consultants, through the project.

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PC expanded its position in the sector as a “think tank” for the power sector to assist in solving technical problems and carrying out analytical work. It plays an advisory role to the Power and Energy Ministry on inter-utility and gas-to-power issues and on long-term power sector planning, and participates in all IPP and EPC procurement of GOB/BPDB. BERC became operational as the energy regulator and is demonstrating its due role to issues service providers’ licenses and power tariff orders. The mindset of the power sector has changed through PSDTA implementation and the institutions concerned have acquired confidence and motivation for sector reforms and development.

The Power and EMR Divisions; PC, PB, and BERC; and the power and gas utilities acquired targeted institutional and policy capacity. Capacity building in policy formulation and implementation, investment promotion, utility operations, project preparation/implementation, and regulations contributed to achieving the sector’s development objectives. Utilities in both electricity and gas sectors benefitted from improved financial, planning, and operational performance; customer service; and an enabling environment. The project also contributed to creating a favorable investment climate and attracting more private capital to the energy sector. The new policies, strategies, regulations, and investment opportunities benefitted the end-users through increased connectivity, electricity supply and better services; and better information about sector updates. The government and all citizens were able to benefit from the supply/service of a scaled-up and improving power sector (refer to Annex-2 for outputs and outcomes).

3.5 Summary Findings of Beneficiary Survey and Stakeholder Workshop

As part of the ICR preparation, a Stakeholder Consultation Workshop for PSDTA was scheduled. However, due to frequent strikes and hartals in Bangladesh in recent months, the workshop had to be cancelled, so an opportunity to get stakeholders’ opinions directly was missed. However, according to the Borrower’s Implementation Completion Report (ICR) attached in Annex 5, the IAs were satisfied with the project and evaluated it as successful. They noted, for example, that discipline, transparency, and accountability in the energy sector have been established; operating efficiency improved; prepared policies by the project created attractive investment environment to private investors; sector regulations supported financial recovery; credibility to future investment from donors improved; systematic development of the sector was achieved; quality of services improved; and customer satisfaction improved.

The questionnaires on quality of training received and how to apply the obtained knowledge and techniques to actual jobs and tasks were distributed to all invitees to the workshop, and their answer sheets were received by email by February 24, 2013. Answers were obtained from 61 respondents (the response rate was 60 percent). Obtained data and information are summarized in Annex 4. In general, trainees were satisfied with the qualities of the training provided.

Based on the results of the data analysis, the training programs contributed to the outputs and outcomes of PSDTA quite efficiently:

- Among the 49 training programs that respondents participated in, 80 percent were linked to produce outputs and outcomes of PSDTA. High Relevance.

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- Eighty-three percent of the trainees actually participated to produce outputs and outcomes of PSDTA. High Participation and Motivation.

- Fifty-nine percent of the outputs and outcomes of PSDTA were produced by applying knowledge and techniques obtained through the training programs. High On-the-Job Application of Acquired Knowledge.

4. Assessment of Risk to Development Outcome: Moderate

In terms of the sustainability of the capacity building through the training activities, only eight of the 16 PC officers who worked during the PSDTA project period remained with PC only eight of the 15 officers who took at least one of the PSDTA training programs remained at BERC. No information regarding officer turnover ratio for PB was available. However, at a working level, frequent turnover or transfer was not observed in PB, and PB retained the last Project Director for more than five years. The capacity of PC and BERC was indeed affected by staff turnover. Since there have been no mitigation measures to dissuade them from leaving, maintaining the capacity developed in PC and BERC through the project is a challenge. Fortunately, all the senior staff who retired from the PC and other power utilities during PSDTA have remained active in the energy sector; therefore, capacity earned through PSDTA has not been fully lost.

The risk that development outcomes are not maintained is moderate. As explained in Section 3.2, the sector policies and regulations and industry structures formulated are now widely accepted, and there was significant capacity improvement within the Ministry of Power and BERC for policy formulation and sector regulation. Through successive tariff increases and decreasing system losses, the Government has also demonstrated its ability to make movement towards sector financial sustainability and improvements in service.

However, further improvements in sector performance to scale up the development outcomes will require a continued improvement in overall sector governance and transparency in decision making to continue to attract private and public sector financing in all ends of the sector. Continued resistance to corporatization from entities such as the South Zone Corporation gives some cause for caution. At the moment, the Government has given in to resistance of corporatization over its fear of losing utility employees. Instead, the Government is promoting the SBU model, which establishes separate business units with independent decision making power on business operations and clearly defined accountability. Under this model, however, the Government needs to make continuous efforts to accomplish adoption of KPIs for its targeted SBUs (to maintain accountability, transparency, and good governance) and to monitor, evaluate, and fix responsibility every six months. At this moment, without a market test, it is uncertain whether the SBU model with KPIs will take firm hold in the energy sector.

To sustain the outcomes achieved by the PSDTA, such as attracting private investment and setting cost-recovery tariffs, the energy sector needs to make continuous progress toward improving the accountability of its management, transparency in decision making, and service quality, among others. This is now being taken care of by the TA of RERED II, where PC is still the IA and can use the capacity it acquired through the PSDTA.

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5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

Bank Performance in Ensuring Quality at Entry: Moderately SatisfactoryBackground analysis was done well; lessons learned from previous operations were taken into account in the project concept; and the project was relevant to the sector’s needs, the government’s priorities, and the Bank’s country strategies. In addition, as is best practice, the TA operation was complemented by other policy-based and investment support interventions to maximize development impact through concerted complementary actions for sector performance improvements. However, the results framework of the PAD could have presented PDO indicators more explicitly linked to the PDOs.

Quality of Supervision: SatisfactorySupervision was conducted regularly, with approximately two missions per year plus interventions with the government and IAs as needed. During the project implementation, a team with a task team leader (TTL) based in the field office supervised the project. The project benefitted from the continuous support of the Bank team, and implementation support to the government and IAs ensured the delivery of project outputs and outcomes. The team also modified and restructured the project to (a) keep the project relevant; (b) avoid redundancy with other donors; (c) maximize the production of useful outputs that would lead to meaningful outcomes in future; and (d) meet newly emerging demands according to the transiting sector environment during the project period with limited funds under the flexibly designed project.

Justification of Rating for Overall Bank Performance: SatisfactoryAlthough there were shortcomings in the design of the results framework, the Bank team made a commendable effort in supervision and succeeded in maximizing the project outputs and outcomes with the implementing agencies. The Bank provided four DPLs during PSDTA preparation and implementation that secured several energy sector actions that complemented the PSDTA objectives. Thus, the Bank’s overall performance was rated Satisfactory.

5.2 Borrower Performance

Government Performance: SatisfactoryIn general, the Government has been supportive of the project. Strong Government commitment to sector reforms and capacity building was critical to the successful enforcement of the policy developed and sector regulations recommended under the project. Conditions and covenants that the Government committed to at the project appraisal, such as setting up the Project Steering Committee for project monitoring, evaluation, and reporting, were achieved. Functionalization of BERC was achieved, but with a four-year delay. Frequent Government-initiated changes in PC top management also caused project implementation delays through 2007. These delays were largely the reason for the first project restructuring.

Implementing Agencies Performance: SatisfactoryThe project was implemented by PC, BERC, and PB, all staffed with committed and qualified personnel (although the turnover rate for the officers during the project implementation period

19

was quite high). The three IAs collaborated well under the leadership of PC. With close communication with the Bank, the IAs succeeded in amending the activities in order to comply with the PDOs, and they produced a large number of outputs. These outputs contributed to sector reform and to the functionalization of organizations, as well as to improving both the quantity and quality of energy supply, increasing private investment, and preparing and implementing new investment projects, among others. The technical capacity of all three agencies was enhanced by training programs and on-the-job-training from international consultants provided through the PSDTA. A key shortcoming, however, was the somewhat high turnover rate in PC and BERC due to the issuance shorter-term contracts that is typical in civil service, making it difficult to retain some of the trained staff. This leaves sustainability of the project outcomes in capacity building as a challenge if no mitigation measures are taken. At this time, however, the continuation of a similar TA component under the RERED II project using the same implementing agencies has significantly mitigated this risk.

Justification of Rating for Overall Borrower Performance: SatisfactoryStrong Government commitment supported endorsement and implementation of new sector policies, strategies, development plans, regulations, and sector reforms. The implementing agencies succeeded in producing a number of meaningful outputs for the energy sector and developed the necessary capacity. However, frequent changes in the core management staff of PC and delayed functionalization of BERC by the Government at the early stages of the project caused project implementation delays. In a balanced assessment, the overall borrower’s performance is rated Satisfactory.

6. Lessons Learned (a) A TA project can provide strong support for furthering sector reforms and capacity development, as well as for developing investment opportunities if there is a strong commitment of Government and continuity of Senior Executives and Utility Heads. A TA project can provide useful technical, intellectual, and global best practice support to the Government, regulator, and utilities on cross-cutting reforms and capacity building and knowledge on Bank’s multiple investment operations. Strong government commitment is critical for enforcing the new sector policies, regulations, and reforms recommended by this type of TA. Also, it takes time for the Government to make decisions and get clearance on a major move in sector reform (such as was the case with operationalizing BERC, launching the major tariff increase, corporatizing South Zone etc.).

(b) TA projects, especially those aiming at sector reforms, should not be too ambitious on what can be achieved and the time frame required to achieve the expected outcomes. In particular, they should account for the time it will take to build consensus among key stakeholders and for the Government to make hard decisions on the major steps of sector reforms that affect many people. In addition, it takes a long time to implement and produce results, including a reasonable time to put in place institutions upon acquiring competitive resources, and completing procurement. The outputs and outcomes, such as policies, strategies, regulations, corporatization, and project formulation, may therefore only be delivered at a late stage in project implementation. Ideally, the project timeline should be sufficiently long to allow the delivery of meaningful outputs and outcomes. In case the original project timeline is not long enough, an early closing (rather than extension) of such project may disrupt project momentum

20

and undermine the set-ups created for project implementation and will not allow time for delivering meaningful outputs and outcomes.

(c) Evaluation of an overarching TA project is complex. For projects that aim to achieve sector reforms (i.e., policy making and regulatory adoptions), it is difficult to foresee at appraisal how outputs will shape policies and reforms and how concerned stakeholders will react to the policy recommendations. Project monitoring indicators should be selected carefully and be objectively measurable. For a project aiming at capacity development for a specific beneficiary group, specific capacity to be developed need to be listed with a clearly defined target value. A baseline value for each of the capacity development items should be provided in the original project design. The degree of improved capacity is intangible and impossible to monitor unless it is specified as (or broken down into) measurable items. Therefore, specific capacities to be developed need to be listed as measureable items during the project design stage. However, subjective evaluation beyond the indicators could be also necessary to evaluate achievement of PDOs practically, in case the originally selected indicators do not fit.

(d) Baselines for the capacity development monitoring items are unable to be collected retroactively; thus, a baseline value for each item must be collected for a targeted beneficiary group and included in the original PAD. Each of the selected measuring items also needs to have a single target value as an achievement goal by project implementation. If the PDO indicators are changed (such as by merging some of the original indicators) during project implementation, a project restructuring process based on prevailing guidelines needs to be undertaken.

(e) Participants that undergo project training program should be retained in the project or involved in similar capacity building activities or in sector reform implementation for as long as possible. This can help retain the capacity and competencies in the sector. For a TA project that involves multiple stakeholders at different stages of preparation and implementation including other ministries, the selected trainees come not only from the parent ministry, utilities and the regulator, but also from other concerned ministries, such as, Planning Commission, Implementation Monitoring and Evaluation Department, Ministry of Finance (Economic Relations Division), Ministry of Law, Ministry of Establishment, and Prime Minister’s Office.

(f) The experience of corporatizing the South Zone utility makes a case for thinking about alternative models of corporatization that can still achieve the same autonomy, accountability and a legal title. The SZ experience shows how vested interests stalled the corporatization program. The SZPDC was established, but the Government faced resistance to corporatize and therefore did not move ahead over fear of losing employments. Resolution of this issue was outside the control of the PSDTA, so the Bank pulled out the funding that was initially intended to improve the Chittagong (South Zone) Distribution area. Based on BPDB’s ongoing corporatization experience, the Government is now proposing to experiment on a SBU model. Under this model, separate business units may be established with independent decision making power on business operations and clearly defined accountability, yet they will remain a part of the BPDB. At some point in the future, if an SBU establishes itself, it can be converted into a full corporate body as per the Company Act.

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7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

7.1 Borrower and Implementing Agencies

The Borrower’s Completion Report is attached as Annex 5. Comments received from the Borrower on this ICR were as follows:

(a) There are factors that led to the project delayed beyond just the institutional weakness in the power sector, such as the time required to judge the effectiveness of a project, the time lag in receiving initial deposit, the Bank’s delay in giving clearances on procurement packages, etc.

(b) The key appointments to new institutions were not always politicized.

(c) Frequent transfers of the Power Division Secretary were a regular phenomenon and were not supposed to affect project implementation.

(d) There has been no formal declaration thus far that the Bank and other financiers withdrew much of their support from the energy sector due to concerns about the country-wide quality of the governance of procurement arrangements.

(e) The institutional capacity of the power sector was improved commendably by the PSDTA.

(f) The implementation of sector reform took time, not only for decision making but also for necessary procedures to be cleared.

(g) Corporatization of SZPDC has not yet been given up.

Other editorial comments from the Borrower were generally incorporated.

7.2 Cofinanciers

Not applicable.

7.3 Other Partners and Stakeholders

Not applicable.

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8. Conclusions

When the PSDTA was appraised in 2004, the energy sector in Bangladesh faced chronic power shortages and rapidly increasing electricity demand (both for additional consumption by connected consumers and for new connections). Electricity system losses were high, electricity tariffs were below cost, the sector was subsidized by the Government, and account receivables piled up. Institutional capacity in the sector was too weak to overcome this situation.

Against this backdrop, the GOB requested Bank assistance in addressing the prevailing capacity constraints and creating the institutional framework to urgently implement its Three-Year Power Reform Road Map. The Bank decided to provide strategic assistance for the sector reform, focusing on (a) capacity development for the energy sectors to prepare policies, strategies, and facility and development plans; introduce accurate interfaces (system metering) among unbundled power sector entities; and improve the level of customer service; (b) energy project preparation through the enhancement of management and operation; and (c) operationalization of BERC.

The project was implemented under extremely difficult condition, including political turmoil, high officer turnover rate, slow procurement, vested interests obstructing reforms, and, more recently, the Bank’s decision to suspend large infrastructure financing. Despite this, the project used its limited funds well, particularly by showing flexibility in project design in coordination with the GOB, IAs, the Bank, and other donors. An extension of the project period from four and a half to eight and a half years was necessary for the project to achieve its objectives, but this is more reflective of an overly ambitious timeline for this type of project and the challenging implementation conditions than poor implementation. With strong support from the Government and IAs staffed with committed and qualified personnel, the project brought tremendous outputs, outcomes, and impacts to the energy sector. These included cost recovery, financial sustainability, increased generation capacity, increased access, improved customer services, institutional capacity development, adoption of explicit policies, legally vetted regulations, transparent project selection, improved accountability of management and transparency in decision making, and increased private investment. The mindset of the power sector has changed through project implementation, and the institutions that received capacity development are now confident.

Evaluation of the project was complex, as the project included sector reforms whose outputs and outcomes were difficult to foresee at the appraisal stage and the PDO indicators were therefore relatively subjective. The project evaluation was executed as objectively as possible, employing the numerical evidence included in the Annexes. While the overall rating was concluded “Satisfactory”, the sector reforms needs to be continued, and thus continuous efforts are still required to ensure that the project’s outcomes are sustained. This project provided a starting point for reform and institutional capacity building in the power sector that requires additional follow-up operations.

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate

(USD millions)

Actual/LatestEstimate (USD

millions)Percentage of

AppraisalA. Technical Assistance 5.01 B. Power Companies Management

Strengthening 3.60

C. Training and Other Capacity Building Measures 1.14

D. Goods and Equipment 3.86 E. Support for Project

Implementation Operation Cost 0.47

Total Baseline Cost 14.08 Contingencies 1.42

Total Project Costs 15.50 Front-end fee PPF 0.00 Front-end fee IBRD 0.00

Total Financing Required 15.50

(b) Financing

Source of Funds Type of Cofinancing

AppraisalEstimate

(USD millions)

Actual/LatestEstimate

(USD millions)

Percentage of Appraisal

Borrower 5.00 International Development Association (IDA) 7.10 6.00 84.5

IDA GRANT FOR POOREST COUNTRY 8.40 8.60 102.3

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Annex 2. Results Framework

PDO (a) Create effective capacity within the Ministry of Power, Energy and Mineral Resources (MPEMR) to put in place power sector policies and industry structures needed for the balanced development of Bangladesh’s power sector.

PDO Indicator 1 Power sector policies adopted (particularly for underpinning financial recovery, faster access for all, and private participation), which are based on robust analysis, and are consistent with principles of commercial viability with safeguards for social & environmental protection.

Outputs Outcomes [Power Cell (Policies)]1. Private Sector Power Generation Policy(amended in 2004 & 2009)

3,922 MW capacity added to the grid from private sector (after 2004 until 2012). 3,207MW under construction 3,635 MW under process

2. Policy Guidelines for Power Purchase from Captive Power Plant (2007)

79MW captive power contractedOut of which 40 MW is connected to the grid

3. Policy Guidelines for Enhancement of Private Participation in the Power Sector(2008)

Grid access open to all Two projects(Chittagong Power Co. 150 MW & Beximco 540 MW coal based power plant) have been identified Govt. will purchase 10% of installed capacity from Chittagong Power Co.& 40% from Beximco Power Co.

4.Guidelines for Remote Area Power Supply System(RAPSS) (2007) Guidelines for RAPSS Fund, 2010

RAPSS project areas (30 nos.) identified 50 MW will be added under RAPSS by 2015

5.Renewable Energy Policy(2008) Policy Target: - 800 MW by 2015, and - 2,000 MW by 2020

Fiscal incentives declared under the policy 102 MW added from RE 200 MW under procurement. 800 MW in pipeline, of which 500 MW is from solar power

6. Emergency Energy & Power Supply Special Act(2010)

1,388.5 MW connected to the grid from 18 quick rental power plants 531 MW under execution (6 quick rental)

7. National Energy Policy (updated in 2012) Coal based power, energy efficiency, and renewable energy are emphasized

Interim Action Plan prepared

[Power Cell (Studies)]1.Financial Restructuring & Recovery Plan(2006) Balance Sheet cleaning (reflects the true value of assets &

liabilities) based on immediate action plan started 2. Energy Demand Assessment (2007)3. Transaction Support for Rental Power Plant Scheme (2007)

Provided basic data and information to develop Emergency Energy & Power Supply Special Act (2010)

4. Road Map for Energy Efficiency Improvement and Demand Side Management (2009)5. Power System Master Plan (PSMP) (2010)Generation target: - 22,000 MW by 2021 - 37,000 MW by 2030

Installed power generation capacity up to December 2012 is 8,525 MW (targeted 7,158 MW by December 2012 by PSMP)

PDO Indicator 5 GSMPS updated, including strategy for meeting gas demand from power, industry and other sectors.

Outputs Outcomes [Petrobangla (Studies)]1. Gas Sector Master Plan and Strategy (GSMPS) (2006)Gas Master Plan and Strategy prepared and being implemented

Petrobangla officers’ capacity were developed by on-the-job training (OJT)-based technology transfer from study reports prepared by consultants Identified long-term investment and financing plan for gas

25

2. Communication Strategy and Campaign for Gas and Energy Reforms (2010) Final report prepared and being used

3. Implementation and Financing Plan for Gas Sector Development [GSMPS Update] (2012) Final Report prepared and will be followed Gas pricing framework prepared.

4. Natural Gas Pricing Framework Study (2012) Final report prepared and will be used by gas utilities, PB and BERC

5. Selection of a Developer for LNG Import Terminal Project (2012) Provided consulting services for selection of terminal developer, now under selection

6. Project Appraisal Document for WB Funding [Gas Debottlenecking and Energy Efficiency project] (2012) Candidate projects for IDA Grant were selected

sector development

PDO Indicator 7 Monitoring, reporting, and invoicing of power flows between "unbundled" enterprises based on accurate system metering.

Outputs Outcomes [Power Cell (Policies)]1. Assessment of Power System Interface Meters (2006-07)

[Power Cell (Goods)]1. Supply and Installation of Power System Metering Equipment on Turnkey Basis(2008)415 power system interface meters installed and in operation

Reduced inter-utility disputes on energy flow Invoices being published based on accurate readings on energy flow Providing data on real-time system faults helped improve the system operations System loss reduced significantly (20.04% in 2004 & 12.26% in 2012) Accounts Receivable reduced significantly (4.12 equivalent months in 2005 which is 2.21 equivalent months in 2012) Facilitated on line billing Overall performance and customer satisfaction improved

26

PDO (b) Create capacity within the Bangladesh Energy Regulatory Commission (BERC) to regulate the sector effectively.

PDO Indicator 2 Regulatory processes in place, particularly for power tariff-setting, and quality-of-service monitoring, which are effective inensuring that customers receive acceptable levels of service at the least-cost (based on a broadly accepted investment, operational & financing plan).

Outputs Outcomes [BERC (Regulations, Standards)] 1. Regulations on licensing and energy tariffs a) BERC License Regulations 2006 (2 revisions in 2011) b) BERC Electricity Generation Tariff Regulations 2008 c) BERC Electricity Transmission Tariff Regulations

2011d) BERC Electricity Distribution Tariff Regulations 2011 e) BERC Gas Transmission Tariff Regulations 2011 (1

revision in 2012) f) BERC Gas Distribution Tariff Regulations 2011 (1

revision in 2012) g) BERC Petroleum Products Transportation Tariff

Regulations 2012 h) BERC Petroleum Products Retail Tariff Regulations

2012i) BERC Petroleum Products Storage, Marketing and

Distribution Tariff Regulations 2011 Only a), b), e), and f) got legal vetting from Law Minister, and others are waiting for the vetting (or approval) in 2011

2. Technical and financial codes and standardsa) Electricity Grid Code b) Electricity Distribution Code c) Technical Quality Indices d) Uniform System of Accounts (USoAC)

3. Power Factor Improvement (PFI) PlanTargeting supply quality: - 0.9 at utility’s substation - 0.95 at customer level

Licenses & OrdersCapacity within BERC was developedBERC became operational Licenses Issued 2008 – 2012 (under 1. a)): - Electricity Sector1,250 - Gas Sector 210 - Petroleum Products145 Tariff Orders 2008 – 2012

a) Electricity Bulk Supply Tariff (BST) - 7 times (October 2008, February 2011, August 2011, December 2011, February 2012, March 2012, September 2012)

b) Electricity Retail Tariff - 30 times (December 2009, March 2010, February 2011, December 2011, February 2012, March 2012, September 2012)

c) Natural Gas Tariff - 3 times (August 2009, May 2011, September 2011)

d) Petroleum Products Tariff - 3 times (October 2008, December 2008, January 2009)

e) LPG Cylinder and Furnace Oil Prices - 2 times (March 2009, June 2009)

f) Bench Mark Prices for Electricity Generation (IPP) - 1 order (March 2009) Tariff Order Directives2008 – 2012

a) Creation of Gas Development Fund (from Output 1. e), f)) b) Electricity Maintenance and Development Fund (from

Output 1. b), c), d)) c) Technical Quality of Services (from Output 1 d)) - Instruction from BERC to distribution companies regarding power quality (ex. frequency, voltage, harmonies) and reliability (ex. power outage)

d) USoAC e) Performance Improvement and Loss savings

PDO Indicator 3 Improved public perception of power sector’s performance, and customer satisfaction (measured through periodic surveys).

Outputs Outcomes [BERC (Goods)]1.BERCWebsite Development Provided office machines were used to improve BERC’s access to updated technology

Information, such as Acts, Regulations, Codes, Tariff Orders, Public Hearing, and open meeting notices is disclosed to the public

27

PDO (c) Prepare, and secure financing for, at least two well-structured power sector investment projects that are then efficiently implemented.

PDO Indicator 4 Corporate governance structures and policies put in place for at least 2 power enterprises which would facilitate transparentand efficient decision-making, efficient and accountable management, and credible and timely monitoring of performance (including accounting and audit arrangements consistent with international practices).

Outputs Outcomes [Power Cell (Policies)]1. MOU of 2012-13 on the Key Performance Indicator (KPI)Signed between Government and power sector entities on 28 June 2012

Continuous monitoring, evaluation, responsibility fixation, etc. established for accountability, transparency and good governance among the power sector entities Sector performance improving considerably

[Power Cell (Studies)]0. Financial Restructuring & Recovery Plan(2006) Duplicated of an output for Indicator 1

1) South Zone Power Distribution Co., 2) North West Power Generation Co., 3) North West Power Distribution Co., 4) Ashuganj Power Station Co., 5) Dhaka Power Distribution Co. &6) Electricity Generation Co. of Bangladesh were established Corporatization & sector strengthening (e.g. good governance and introduction of a financial model) of established companies are in progress

1. South Zone Power Distribution Project(2006)Corporatization framework and investment program prepared

Company formed(but not functional)

2. Feasibility Study on Repowering of Existing Power Plant of the BPDB 210 MW Steam Turbine Units at Ghorashal to Convert to Combined Cycle Units (2012)Draft feasibility study report completed

Tender document under preparationIDA financing for implementation in pipeline (pending management decisions)

3. Feasibility Study for Construction of Aminbazar-Maowa-Mongla Transmission Line & Associated Substations and Anowara-Meghnaghat Transmission Line & Associated Substations (NG- 3 and NG-4 400 kV Power Transmission Line Project Feasibility Study) (2012)Draft final report completed (feasibility study will end at March 2013)

Awaiting appointment of Environmental and Social Impact Assessment (ESIA) consultants

PDO Indicator 6 Management and operations of at least 2 power enterprises improved through the participation of qualified global expertise.

Outputs Outcomes [Power Cell (Studies)]1. Generation Support Framework and Strategy 2007

2. Corporatization Framework(2007-2008) of Electricity Generation Company of Bangladesh (EGCB) and South Zone Power Project

3.Study to Effectiveness of Current Organization and Management Structure [Rural Electrification Board (REB) Effective Study] (2009-10)

4. Environmental Impact Assessment (EIA) Support for EGCB’s Siddhirganj 2x150 MW Peaking Power Plant (2008)

5. ESIA support to South Zone Project(2009)

REB reformed with professionals Strengthening of REB & corporatization of BPDB under process

Projects formulated: 1) EGCB’s Siddhirganj Peaking Power Plant2) Ghorasal Repowering Project 3) NG-3/NG-4 400 kV Transmission Project 4)Remote Metering Project (later on converted into unified pre-payment meter project)

- This investment project was not funded by WB. It was recommended under PSDTA 5) Siddhirganj 335 MW Combined Cycle Power Project

- Converted from Siddhirganj Peaking Power Project (150MW x 2 units)

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6. ESIA support for EGCB’s Siddhirganj 335 MW Combined Cycle Power Plant (2012)[Power Cell (Consultants)]1. Global IPP/Transaction Advisers (2010-2012)IPP advisory support (legal, financial, technical, environment, and procurement) provided for Power Cell under Power Division, BPDB & EGCB. Standard contract document prepared

Capacity developed through OJT Contract documents reviewed and prepared: 1) Bibiyana-1 341 MW Combined Cycle Power Plant2) Bibiyana-2 341 MW Combined Cycle Power Plant3) Meghnaghat 335 MW Combined Cycle Power Plant4) Serajgong 300-450 MW Combined Cycle Power Plant

2. Local Individual Consultants (2010-2012)Technical, legal, human resource development, management information system (MIS), editing and translation, financial, procurement, and ESIA OJT to PC, EGCB, and all power entities Power Division/Power Cell’s web site development Bidding documents review & evaluation for EGCB Siddhirganj 335 MW CCPP

Built capacity of Power Division, Power Cell, BPDB, and other utilities in the respective fields

3. Siddhirganj Owner’s Engineer 2012Prepared bidding document of Siddhirganj 335 MW CCPP under EGCB

Bidding documents evaluation completed

4. Foreign IT expert Expert Enterprise Resource Planning (ERP)/ Management Information System (MIS) services to EGCB and Gas Transmission Company Ltd. (GTCL) (2009-2011)Draft bidding document prepared for ERP to EGCB & GTCL

- Transaction document to select global vendors for supply and implementation of an ERP package

Built relevant ERP capacity of the entities

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Annex 3. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/Specialty

Lending

Ian Alexander Consultant FEUSE - HIS

Raihan Elahi Senior Energy Specialist AFTG1 Shawkat M. Q. Hasan Senior Procurement Specialist AFTPE Shamsul M. Hoque Temporary SASFP Md. Iqbal Senior Energy Specialist SASDE TTL for implementation Zafrul Islam Lead Procurement Specialist SARPS Shakila Parveen Khan Senior Program Assistant SACBD Chrisantha Ratnayake Consultant AFTG1 Joseph Daniel Wright Economist SASDE Salman Zaheer Program Director SACRI TTL for preparation

Supervision/ICR Burhanuddin Ahmed Senior Financial Management Specialist SARFM Mohammad Anis Energy Specialist SASDE Arun Banerjee Consultant SASDI Sudeshna Ghosh Banerjee Senior Economist SEGEN Raihan Elahi Senior Energy Specialist AFTG1 Tanvir Hossain Senior Procurement Specialist SARPS Zafrul Islam Lead Procurement Specialist SARPS Md. Abul Fayez Khan Program Assistant SASDO Ashish Khanna Lead Energy Specialist SASDE Sabah Moyeen Social Development Specialist SASDS Zibun Nessa Pinu Program Assistant SARPS Fabio Pittaluga Senior Social Development Spec LCSSO Zubair K. M. Sadeque Senior Energy Specialist SASDE Ashok Sarkar Senior Energy Specialist SEGEN Alan F. Townsend Senior Energy Specialist EASWE Salman Zaheer Program Director SACRI Mohammad Sayeed Consultant SASDE Kristy Mayer Energy Economist SASDE Tomoyuki Yamashita Senior Energy Specialist SASDE TTL for ICR

(b) Staff Time and Cost

Stage of Project Cycle Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending FY03 33 113.20 FY04 38 125.51

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FY05 0.00 FY06 0.00 FY07 0.00 FY08 0.00

Total: 71 238.71 Supervision/ICR

FY03 0.00 FY04 0.00 FY05 30 56.14 FY06 40 31.56 FY07 22 25.88 FY08 36 87.32 FY09 29 89.40 FY10 27 233.14 FY11 39 160.35 FY12 52 212.57 FY13 33 151.91

Total: 308 1048.27

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Annex 4. Beneficiary Survey Results

1. Quality of Training Program

a) In general, how do you rate the quality of training programs you participated?

Figure 1 Programs’ Overall Quality Evaluation by Trainees

b) Did you get knowledge and/or technique by the training programs you participated?

Figure 2 Trainees’ Feeling of Gaining Knowledge/Technique from Programs

0(0%)

0(0%)

3(5%)

34(55%)

24(40%)

Very low

Low

Fair

High

Very high

0(0%) 0

(0%)

4(7%)

24(39%)

33(54%)

Not at all

Not much

Fairly

Much

Very much

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c) Did you apply gained knowledge and/or technique by the programs to your assigned job?

Figure 3 Application of Gained Knowledge/Technique to Jobs

d) Were the lengths of the training programs you took appropriate?

Figure 4 Appropriateness of Training Programs Length

0(0%)

1(1%)

9(15%)

29(48%)

22(36%)

Not at all

Not much

Fairly

Much

Very much

0(0%)

1(2%)

36(59%)

22(36%)

2(3%) Too short

Short

Appropriate

Long

Too long

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e) Were the training programs provided adequate timings?

Figure 5 Timing of Provided Training Programs

0(0%) 0

(0%)

7(12%)

35(57%)

19(31%) Not at all

Not much

Fairly

Much

Very much

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f) If you have any specific training programs you highly satisfied, please provide names of the program.

Table 1 Specific Training Programs Highly Satisfied

1 Summit on Renewable Energy 1 0.0%2 Corporate Governance Strategies 1 0.0%3 Public Private Partnership (PPP) Strategies 2 2 100.0%4 Public Private Partnership (PPP) Project Contract Compliance 2 2 100.0%5 Electricity Market 2 0.0%6 Total Quality Management (TQM) Convention 3 1 33.3%7 Public Sector Governance8 Designing Legislation in Public Private Partnership (PPP) 1 1 100.0%9 Study Tour to Distribution Utilities 5 1 20.0%10 Sediment Management inHydropower Project11 Training on Financial Modeling 2 1 50.0%12 Bilateral Discussion/Seminor 5 0.0%13 BIMSTECWorkshop14 Road Show for Power Sector Development 4 1 25.0%15 Study Visit 3 0.0%16 D 8Working Committee Meeting on Renewable Energy 1 0.0%17 Bangladesh India Joint Working Committee 5 1 20.0%18 Bangladesh Myanmar Bilateral Discussion on Power Sector 1 0.0%19 Joint Venture Agreement on Coal Based Power Plant20 4th Ministrial Level Conference on Renewable Energy 2 0.0%21 Power Summit 2011 1 0.0%22 Conference on Coal Trans India 2011 1 0.0%23 Study Visit (PowerManagement Institute/NTPC) 1 0.0%24 Assembly of IRENA 2 0.0%25 12th National Conference of NEA26 Energy Engineer Training 3 1 33.3%27 6th Annual Conference FLNG 201128 Study Visit 3 1 33.3%29 Study Visit on Pre Payment Meter 1 1 100.0%30 Feasibility Report Review of Power Plant 1 0.0%31 Coal Based Thermal Plant 1 1 100.0%32 D 8Working Committeee Meeting on Renewable Energy 2 0.0%33 Visit on Coal Based Power Plant 2 1 50.0%34 Workshop of Off Grid Access in South Asia35 Wind IPP Summit 2012 1 0.0%36 Introduction to Carbon Capture & Storage 2 0.0%37 Investor Seminars 2 0.0%38 Designing Legislative Institutional for Public Private Partnership (PPP) 3 3 100.0%39 Managing the Public Private Partnership (PPP) Process 2 2 100.0%40 Uncover LNG Infrastructure Supply Chain and Trade Development 1 0.0%41 Renewable & Clean Energy Policies 2 2 100.0%42 Project Finance & Finacial Analysis 2 1 50.0%43 Meeting on MOUFinalization between BPDB and EGAT 1 0.0%44 Energy Management System under Energy Efficiency 1 0.0%45 Conference on LNGDegasification Terminals 1 0.0%46 Meeting on Import/Construction of Hydropower 2 0.0%47 Meeting of Joint Working Group 2 0.0%48 Study Visit on Renewable Energy & Energy Savings 3 1 33.3%49 Renewable and Islands Global Summit 1 1 100.0%50 Result Based Management Implementation and Performance Indicators 12 10 83.3%51 2nd Indonesia Coal Investment Forum 3 1 33.3%52 Results Based Management Implementation and Performance Indicators 4 3 75.0%53 Renewable Energy Policy, Regulation and Grid Connectivity Issues 1 1 100.0%54 Project Monitoring & Evaluation 4 4 100.0%55 Management of Public Private Partnership (PPP) 10 10 100.0%56 Project Budgeting and Cost Control 8 8 100.0%

126 6249.2%

Participation(Yes or No)

HighlySatisfied

Percentage

Total Number of Training Programs Participated by Respondents (Gross)Percentage of Highly Satisfied

No. Training Programs

35

g) If you have any specific training programs you did not satisfy, please provide names of the program.

Table 2 Specific Training Programs Not Satisfied

h). Please provide names of the program, which were useful to your assigned job.

Table 3 Specific Training Programs Useful to Assigned Job

i) Suggestions to improve training programs to the energy sector in the future.Trainees Selection

The right person should be selected for the right course.The right person should be nominated for the appropriate training program.Selection of Trainee should be relevant and rationalTraining should be imparted to the appropriate participants according to the need of theorganizations/projects of the energy sector.Selection of participant is very important in relation of specific program. Poor selection has anegative impact on the program, as well as on post training implementation.

Program ImprovementSubject specific training program should be undertaken.Should be subject oriented (Relevant to the work field)Appropriate Resource Persons should be provided.More Case Studies.Training on Energy Management System, Standards & Labeling, Innovative Financing Mechanism canbe taken as further programs Training venue & length of training should be appropriate with thespecific training course.

36 Introduction to Carbon Capture & Storage 2 1 50.0%40 Uncover LNG Infrastructure Supply Chain and Trade Development 1 1 100.0%

126 21.6%

PercentageNo. Training ProgramsParticipation(Yes or No)

Unsatisfied

Total Number of Training Programs Participated by Respondents (Gross)Percentage of Unsatisfied

2 Corporate Governance Strategies 1 1 100.0%12 Bilateral Discussion/Seminor 5 1 20.0%15 Study Visit 3 1 33.3%17 Bangladesh India Joint Working Committee 5 1 20.0%26 Energy Engineer Training 3 1 33.3%28 Study Visit 3 2 66.7%36 Introduction to Carbon Capture & Storage 2 1 50.0%38 Designing Legislative Institutional for Public Private Partnership (PPP) 3 2 66.7%39 Managing the Public Private Partnership (PPP) Process 2 1 50.0%41 Renewable & Clean Energy Policies 2 1 50.0%50 Result Based Management Implementation and Performance Indicators 12 1 8.3%52 Results Based Management Implementation and Performance Indicators 4 2 50.0%54 Project Monitoring & Evaluation 4 1 25.0%55 Management of Public Private Partnership (PPP) 9 1 11.1%56 Project Budgeting and Cost Control 8 3 37.5%

126 2015.9%

Useful PercentageNo. Training ProgramsParticipation(Yes or No)

Total Number of Training Programs Participated by Respondents (Gross)Percentage of Usefullness

36

2. Contribution of Training Programs to Outcomes & Outcomes

Table 4 Numbers of Trainees and Benefitted Outputs for Each Program

No. Training Programs Participation(Yes or No)

# of BenefitedOutputs

1 Summit on Renewable Energy 1 12 Corporate Governance Strategies 1 13 Public Private Partnership (PPP) Strategies 2 24 Public Private Partnership (PPP) Project Contract Compliance 2 35 Electricity Market 2 06 Total Quality Management (TQM) Convention 3 37 Public Sector Governance8 Designing Legislation in Public Private Partnership (PPP) 1 19 Study Tour to Distribution Utilities 5 810 Sediment Management inHydropower Project11 Training on Financial Modeling 2 212 Bilateral Discussion/Seminor 5 013 BIMSTEC Workshop14 Road Show for Power Sector Development 4 515 Study Visit 3 516 D 8 Working Committee Meeting on Renewable Energy 1 317 Bangladesh India Joint Working Committee 5 118 Bangladesh Myanmar Bilateral Discussion on Power Sector 1 019 Joint Venture Agreement on Coal Based Power Plant20 4th Ministrial Level Conference on Renewable Energy 2 121 Power Summit 2011 1 022 Conference on Coal Trans India 2011 1 023 Study Visit (Power Management Institute/NTPC) 1 024 Assembly of IRENA 2 025 12th National Conference of NEA26 Energy Engineer Training 3 127 6th Annual Conference FLNG 201128 Study Visit 3 129 Study Visit on Pre Payment Meter 1 130 Feasibility Report Review of Power Plant 1 031 Coal Based Thermal Plant 1 132 D 8 Working Committeee Meeting on Renewable Energy 2 333 Visit on Coal Based Power Plant 2 2

37

No. Training Programs Participation(Yes or No)

# of BenefitedOutputs

34 Workshop of Off Grid Access in South Asia35 Wind IPP Summit 2012 1 136 Introduction to Carbon Capture & Storage 2 137 Investor Seminars 2 038 Designing Legislative Institutional for Public Private Partnership (PPP) 3 539 Managing the Public Private Partnership (PPP) Process 2 140 Uncover LNG Infrastructure Supply Chain and Trade Development 1 241 Renewable & Clean Energy Policies 2 242 Project Finance & Finacial Analysis 2 143 Meeting on MOU Finalization between BPDB and EGAT 1 044 Energy Management System under Energy Efficiency 1 145 Conference on LNG Degasification Terminals 1 146 Meeting on Import/Construction of Hydropower 2 147 Meeting of Joint Working Group 2 248 Study Visit on Renewable Energy & Energy Savings 3 349 Renewable and Islands Global Summit 1 150 Result Based Management Implementation and Performance Indicators 12 1051 2nd Indonesia Coal Investment Forum 3 152 Results Based Management Implementation and Performance Indicators 4 453 Renewable Energy Policy, Regulation and Grid Connectivity Issues 1 154 Project Monitoring & Evaluation 4 355 Management of Public Private Partnership (PPP) 10 1056 Project Budgeting and Cost Control 8 9

Total Number of Training Programs Participated by Respondents (Gross) 126 105

Total Number of Training Programs Respondents Did Not Participate 7 12.5%Total Number of Training Programs Respondents Participated 49 87.5%

Total Number of Training Program Provided 56 100.0%

Total Number of Training Programs Did Not Contribute to Outcomes 10 20.4%Total Number of Training Programs Contributed to Outcomes 39 79.6%

Total Number of Training Programs Respondents Participated 49 100.0%

Total Number of Participants for Training Program Did Not Contribute (Gross) 21 16.7%Total Number of Participants for Training Program Contributed (Gross) 105 83.3%

Total Number of Training Programs Participated by Respondents (Gross) 126 100.0%

3.Be

nefittedOutpu

ts&Outcomes

byTraine

es

Table5Num

bero

fTraineesC

ontributed

toEach

Outcome&Outpu

t

Code

PSDT

AOutpu

ts&Outcomes

Year

#of

Traine

esCo

ntrib

uted

(Gross)

P1Po

licyGu

idelineforP

ower

Purchase

from

CaptivePo

wer

Plant2007

2007

0P2

GuidelineforR

emoteArea

Power

Supp

lySystem

s(RA

PSS)2007

2007

2P3

PolicyGu

idelines

forEnh

ancemen

tofP

rivateParticipationinthePo

wer

Sector

2008

2008

17P4

Rene

wableEnergy

Policy2008

2008

12P5

PrivateSector

Power

Gene

ratio

nPo

licy(Amen

dedin2004

&2009)

2009

3P6

EmergencyEnergy

&Po

wer

Supp

lySpecialA

ct2010

2010

0P7

NationalEne

rgyPo

licy2012

(Upd

ate)

2012

3P8

MOUof

2012

13on

KeyPe

rformance

Indicator(KP

I)2012

15

P9FinancialRestructurin

gandRe

coveryPlan

(FRP

)2006

2006

11P10

Assessmen

tofP

ower

System

InterfaceMeters2

006

2007

2006

1P11

SouthZone

Power

Distrib

utionProject2006

2006

4P12

Gene

ratio

nSupp

ortFramew

ork(GSF)and

Strategy

2007

2007

3P13

TransactionSupp

ortfor

RentalPo

wer

PlantSchem

e2007

2007

0P14

Energy

DemandAssessmen

t2007

2007

1P15

CorporatizationFram

ework(20072008)o

fElectricity

Gene

ratio

nCo

mpany

ofBanglade

sh(EGC

B)andSouthZone

Power

project

2008

0P16

Environm

entalImpactAssessmen

t(EIA)

Supp

ortfor

EGCB

'sSidd

hirganj2x150

MW

PeakingPo

wer

Plant2008

2008

1P17

Stud

yto

Effectiven

esso

fCurrent

OrganizationandManagem

entStructure

[RuralEle ctrificatio

nBo

ard(REB)EffectiveStud

y]2009

2010

2009

3P18

Environm

ental&

SocialIm

pactAssessmen

t(ESIA)sup

portto

SouthZone

Project2009

2009

0P19

Road

Map

forEne

rgyEfficiencyIm

provem

entand

DemandSide

Managem

ent2009

2009

5P20

Power

System

MasterP

lan2010

(PSM

P2010)

2010

4P21

Environm

ental&

SocialIm

pactAssessmen

t(ESIA)Sup

portforEGC

B'sS

iddh

irganj335

MW

Combine

dCyclePo

wer

Plant2012

2012

0P22

F/Son

Repo

weringof

Existin

gPo

we r

Planto

fBPD

B210M

WSteamTurbineUn

itsatGh

orashalto

ConverttoCo

mbine

dCycleUn

its2012

2012

1P23

F/SforC

onstructionof

AminbazarMaowaMon

glaTransm

ission

Line

&Associated

Substatio

nsandAn

owaraMeghn

aghatTransmission

Line

&Associated

Substatio

ns(NationalG

ridNG

3andNG4400kV

Power

Transm

ission

Line

ProjectF/S)2012

2012

1

P24

Sidd

hirganjPeaking

Power

ProjectFormulation

1P25

GhorashalRep

oweringProjectFormulation

1P26

NationalG

rid(NG)

3andNG4

400kV

Power

Transm

ission

Line

ProjectFormulation

0P27

RemoteMeteringProjectFormulation

1P28

Sidd

hirganjand

335MW

Combine

dCyclePo

wer

ProjectFormulation

1

Stud

iesb

yPo

werCell

Policiesb

yPo

werCell

ProjectFormulation

38

Table6Summaryof

Contrib

uted

Outpu

ts&Outcomes

byTraine

es

Categorie

sTotalN

umbe

rTraine

esCo

ntrib

uted

Percen

tage

Stud

iesa

ndPo

liciesb

yPo

wer

Cellrelatedto

Indicator1

129

75%

Stud

iesb

yPe

trob

anglarelatedto

Indicator5

61

17%

Stud

yandProjectb

yPo

wer

Cellrelatedto

Indicator7

22

100%

Outpu

ts&Outcomes

byBERC

103

30%

Stud

iesb

yPo

wer

Cellrelatedto

Indicator6

63

50%

Form

ulated

ProjectsandPrep

ared

ContractDo

cumen

tsrelatedto

Indicator6

97

78%

Stud

iesa

ndP o

liciesb

yPo

wer

Cellrelatedto

Indicator4

44

100%

Total

4929

59%

Code

PSDT

AOutpu

ts&Outcomes

Year

#of

Traine

esCo

ntrib

uted

(Gross)

P29

Bibiyana

1341MW

Combine

dCyclePo

wer

Plant

0P30

Bibiyana

2341MW

Combine

dCyclePo

wer

Plant

1P31

Meghn

aghat335

MW

Combine

dCyclePo

wer

Plant

2P32

Serajgon

g300450MW

Combine

dCyclePo

wer

Plant

2

P33

Installatio

nof

415Po

wer

System

InterfaceMeters2

011

2011

1

P34

GasM

asterP

lanandStrategy

(GMPS)2006

2006

0P35

Commun

icationStrategy

andCampaignforG

asandEnergy

Reform

s2010

2010

0P36

Implem

entatio

nandFinancingPlan

forG

asSector

Developm

ent[Ga

sMasterP

lanan

dStrategy

(GMPS)2012(Upd

ate)]

2012

0P37

NaturalGa

sPricingFram

eworkStud

y2012

2012

0P38

Selectionof

aDe

velope

rfor

LNGIm

portTerm

inalProject2012

2012

2P39

ProjectA

ppraisalDo

cumen

tfor

WBFund

ing[Gas

Debo

ttleneckingan

dEnergy

Efficiencyproject]

2012

0

P40

Developm

ento

fRegulations

onTariffs2006

2012

2006

0P41

Developm

ento

fLicen

seRe

gulatio

ns2006

2012

2006

0P42

TariffO

rder

andDirectives

2008

2012

2008

0P43

Issueof

Licenses

2008

2012

2008

0P44

TechnicalQ

ualityStandard

(TQS)Prep

aration

3P45

Grid/DistributionCo

dePrep

aration

1P46

FinancialCod

e(Uniform

System

ofAccoun

ts)P

reparatio

n0

P47

Power

Sector

Performance

Improvem

ent(ex.Pow

erFactor

Improvem

entP

lan)

1P48

Custom

erSatisfactionIm

provem

ent

0P49

EGo

vernance

Web

site

Developm

ent

0

Outpu

ts&Outcomes

byBERC

ProjectImplem

entatio

n

ContractDo

cumentP

repa

ratio

n

Stud

iesb

yPe

trob

angla

39

40

Annex 5. Summary of Borrower’s ICR

1. Introduction

Electricity is a key ingredient for economic development of a country. To ensure a sustainable economic development of a country adequate, reliable and reasonably priced electricity is desirable. In Bangladesh annual per capita electricity consumption was about 110 KWh and access to electricity was only 32% of total population in 2003. Installed capacity of power plants was about 4300 MW at that time and there was a gap of about 1500 MW between demand & supply. On the other hand, Government has a vision to provide electricity to all by 2021. The Government of Bangladesh (GoB) has taken power sector reform programs to achieve this goal within stipulated time. The GoB, with the assistance of the World Bank had undertaken the “Power Sector Development Technical Assistance (PSDTA)” project with the main intend to assist implementation of power sector reform programs. PSDTA was a follow-on project to the previous Power Sector Reform Program (PSRP) project implemented during 1996-2003. The PSDTA design was based substantially on the previous project experience.

The objectives of the PSDTA project were to: (a) create effective capacity within the Ministry of Power, Energy & Mineral Resources (MPEMR) to put in place sector policies and industry structures needed for the balance development of its power sector; (b) create regulatory capacity within the Bangladesh Energy Regulatory Commission (BERC) to regulate the sectors effectively; and (c) prepare and secure financing for a number of well structured power sector investment projects.

PSDTA project was implemented since its fund effectiveness date on 31 October 2004 with an International Development Association (IDA) Credit amount of SDR 4.9 million (Credit No.-3913 BD) and Grant amount of SDR 5.8 million (Grant No.-H092 BD). Consequent to the success of the project, its huge positive impacts and the strong demand, PSDTA project implementation period was extended for four years since its original closing date of 31 December 2008 with additional scope of works but same financing limit. The project was implemented during June 2004 to December 2012 until final closure on 31 December 2012.

The project was consist of four parts, namely (A) Technical Assistance (For Power sector policy making and enterprise restructuring; Bangladesh Energy Regulatory Commission; & Gas sector support), (B) Management Strengthening, (C) Training and other Capacity Building Measures, and (D) Goods and Equipment.

The project was executed by the three separate agencies namely the Power Cell, Power Division, the BERC and the Petrobangla. They maintained three separate special deposit accounts (CONTASA) in the commercial bank to make expenditures through RPA.

The project implementation was guided by a high level National Steering Committee, headed by the Principal Secretary, Prime Minister’s Office; having Secretary, Power Division; Secretary, Economic Relations Division (ERD); Secretary, IMED; Secretary, Finance Division; Member (Power and Industry), Planning Commission; Secretary, Ministry of Establishment as the members of the Steering Committee. A Task Force headed by Secretary, Power Division taking members from the concern ministries and agencies was established to review and monitor the progress of implementation of the project activities.

2. Assessment of the project objectives, design, implementation experience and outcomes

The project development objectives were highly relevant with the government vision and mission at the time of project preparation and continued to be relevant till the end of the project period. Bangladesh power sector was facing major challenges. Its coverage was low, reliability and quality was poor. The utilities were inefficient and loss making. Private investment in the sector was absent due to inadequate incentive support through proper policies. Under that prevailing situation GoB made vision to provide reliable and affordable power to all by 2021. GoB stated policy statement in 2000 to materialize the vision of the government and to increase the efficiency of the utilities & move them to commercial viability and to increase private participation through sector reforms & restructure. Due emphasis has been given in the “National Energy Policy” to encourage public and private sector participation in the development and management of the sectors and to ensure financial viability of the utilities. Moreover, in the gas sector there had been no long term gas master plan. But, thegas consumption had been increasing so rapidly that the constraints in gas production (due primarily to incommensurate E&P activity), as well as bottlenecks in the transmission system, peak and average-day supplies would have been short of peak demand. As a result gas demand versus gas management went almost beyond expectation/prediction. As such, development of natural gas sector for improving supply of gas to power plants and to other consumers, as well as to attract foreign development partners/donors for financing in the gas sector, Gas Sector Master Plan and Strategy was necessary. Policy formulation, reform & restructuring, regulatory and capacity development activities done under the PSDTA project has played a vital role towards the achievement of the GoB targets. Assessment of the project objectives, design, implementation experience and outcomes are described below:

41

(a) Assessment of the project objectives:

(i) Create effective capacity within the Ministry of Power, Energy & Mineral Resources (MPEMR) to put in place sector policies and industry structures needed for the balance development of its power sector:

Creation of Power Cell:

In order to translate the policy commitment into actual investment projects, GOB created and set up Power Cell under the Power Division, Ministry of Power, Energy & Mineral Resources (MPEMR) in 1995 under PRSP project of the World Bank. After successful completion of the project, World Bank has taken PSDTA project in 2003 to continue its support to Power Cell. The Power Cell has a mandate to lead private power development, recommend power sector reforms & restructuring, conduct studies etc. Power Cell under the guidance of the Power Division implements power sector reform & restructuring programs in Bangladesh; formulates & updates Acts, Regulations, Policies & Guidelines related to power sector; performs studies for improvement of the power sector and to establish accountability, transparency & responsibility in the sector; monitor the performance of the power utilities; implements power generation projects in private sector; prepare model contract documents & security packages for IPP projects; prepare power sector development plans & suggests the utilities for implementation; co-ordinates with the utilities regarding IT & e-governance issues; implements HRD programs; assists to implement the renewable energy – energy efficiency & energy savings programs in Bangladesh. Power Cell works as a “Think Tank” for the Power Division and assists them in any technical issues.

Preparation of Sector Policies: Government policies have a significant impact on attracting private sector investment both in local & foreign. Government declared fiscal incentives and exempted taxes to create an environment to attract private investment in power sector. To attainthe objectives of electrification through balance development of conventional and non-conventional energy the following policies have been prepared by the Power Cell under the PSDTA.

Private Sector Power Generation Policy of Bangladesh (Amendment in 2004 & 2009) Policy Guidelines for Small Power Plant (SPP) in Private Sector Policy Guidelines for Power Purchase from Captive Power Plant, 2007 Guidelines for Remote Area Power Supply System (RAPSS), 2008 Guidelines for RAPSS Fund, 2010 Policy Guidelines for Enhancement of Private Participation in the power Sector,2008 Renewable Energy Policy of Bangladesh, 2008 Emergency Energy & Power Supply Special Act, 2010 Vision Statement & Policy Statement of Power Sector Reform, 2000 National Energy Policy, 2012 update Revision of Electricity Act 1910 Updated 3-year rolling Road Map for implementation of reform programs Power System Master Plan 2010 National Perspective Plan (Power sector component) Sixth Five year Plan (Power sector component)

Following study reports have been prepared by the Consultants' for Petrobangla under the PSDTA: Gas Master Plan and Strategy (GMPS) 2006 Communication Strategy and Campaign on Gas and Energy Pricing and Reforms Study 2010 Implementation and Financing Plan for Gas Sector Development [GMPS Update] 2012 Natural Gas Pricing Framework Study 2012 Provided Consulting Services for Selection of Offshore LNG Terminal Developer (now under selection) 2012 Project Appraisal Document (2012) for World Bank funding future projects in gas sector

42

Reform and restructuring of sector Industries

Power Cell with the assistance of consultants has conducted the following studies for power sector reform & restructuring and to improve the performance of the utilities with an aim to move them into financial viability:

Financial Restructuring and Recovery Plan (FRRP)Transaction Advisor for O&M contracting of Siddhirganj Peaking Power PlantPreparation of South Zone Power Distribution Project (SZPDC)Supervision and Management consultant for Siddhirganj Power Plant (Owners EngineerImplementation of Immediate Action Plan of Power Sector Financial Restructuring and Recovery Plan (Balance Sheet Cleaning)Generation Support Framework and Financing StrategyEnvironmental and Social Impact Assessment South Zone Power Distribution ProjectStudy to Effectiveness of Current Organization and Management Structure of REBIT consultant for ERP selection for EGCB and GTCLLegal, Financial & Technical consultants for IPP Power ProjectsESIA for Siddirgonj CC Power PlantInternational Consultant for Rental Power PlantsFeasibility study for NG-3 and NG-4 (400 KV Transmission Line) Feasibility study for Empowering of BPDB’s Old Power plants

Most of the recommendations provided in the study reports already implemented and the rest will be implemented gradually. Under the reform program the power industry has been restructured to increase efficiency, promote competition and attract private investment. Major components of the reform activities are:

Unbundling of power generation, transmission and distribution functions into separate services Corporatization and commercialization of power sector entities. Effective regulation under BERC for power and energy sector Private sector participation and private-public partnership in the sectors. Balance sheet cleaning of the new & restructured companies. Ashuganj Power Station of BPDB has been converted into Ashuganj Power Station Company Ltd. (APSCL). North West Zone Power Generation Company Ltd. (NWPGCL) has been established in August 2007. Electricity Generation Company of Bangladesh (EGCB) has been established Power Grid Company of Bangladesh Limited (PGCB) has been created and all the transmission assets of BPDB have been transferred to PGCB. DESCO was established and is now functioning at Mirpur, Gulshan, Baridhara, Uttara and Tongi area of Dhaka by taking over distribution assets from DESA West Zone Power Distribution Company (WZPDC) has been created corporatizing West Zone Power Distribution System of BPDB. DESA has been converted into Dhaka Power Distribution Company Ltd. (DPDC) and starts functioning since July 01, 2008. North West Zone Power Distribution Company (NWZPDC) has been formed in 2008. South Zone Power Distribution Company (SZPDC) incorporated in May 2008.

Preparation and Implementation of Plans and programs:

Under the PSDTA project Power Cell has developed the following implementation plans for the power sector reform program based on the policy guidelines provided in the Vision Statement and Policy Statement of the Government:

Preparation of 3 years Road Map for power sector reform programs; Preparation of Financial Restructuring and Recovery Plan (FRRP); Preparation of Load Management and Demand Management Plan Preparation of Power Sector Master Plan (PSMP) Preparation EE and RE development action plan Preparation of Result Base Management (RBM)program

Implementation of the above mentioned plans to achieve the desirable performance improvements, consumer satisfaction and viability of the sector and accelerated development of the sector with optimal utilization of resources:

43

Implementation of 3 years Road Map for power sector reform programs; Implementation of Immediate Action Plan of Power Sector Financial Restructuring and Recovery Plan; Implementation of performance improvement activities of the power sector utilities to increase consumers satisfaction and viability of the sector; Implementation of Load Management and Demand Management programs: Implementation of energy efficiency and energy savings programs Implementation of renewable energy development programs. Implementation of target based performance improvement programs

Implementation of Interface Metering System:

To establish transparency and accountability among the power sector entities for bulk power purchase & sale the Power Cell implemented interface metering programs under PSDTA project. Server based programmable 425 Nos. of digital meters have been installed in the grid substations for the monitoring, reporting & invoicing of power flows between "unbundled" enterprises.

ICT/e-governance activities:

In line with the present government’s vision of "Digital Bangladesh" the following activities have been done under the PSDTA project:

Electricity Bill Payment through Mobile Phone, Online Electricity Bill Payment System, Customer Complain handling System, Online Recruitment System, Online Application for Electricity new Connection. E-filling System, Online Project Monitoring System, Enterprise Resource Planning (ERP) system software, Online Training Software, Online Key Performance Indicator (KPI) software. To ensure the transparency, accountability and efficiency Dynamic Web Site, Electronic Procurement, Store Management Software have also been introduced.

(ii) Create regulatory capacity within the Bangladesh Energy Regulatory Commission (BERC) to regulate the sectors effectively:

BERC has become fully functional through the consultancy support funded by PSDFTA project. BERC’s achievements in the project period in brief are:

Formulation and adoption of regulations, technical codes and quality standards, , financial codes, generation price benchmarking

Tariff setting for electricity (bulk and retail), gas and petroleum products

processing and issuing licenses

creation of funds-Gas Development Fund and Electricity Maintenance and Development Fund (v) themes for development of the energy sector

(iii) Prepare and secure financing for a number of well structured power sector investment projects:

The Power Sector Development Technical Assistance (PSDTA) project has facilitated to prepare two well structured power sector investments projects. These two projects are (i) South Zone Power Distribution project and (ii) Siddhirganj 125X2 MW peaking power plant of EGCB. South Zone Power Distribution Project (SZPDC) has been completed successfully. Transaction Advisor for O&M contracting, Supervision and Management consultant has been provided for Siddhirganj Peaking Power Plant (Owners Engineer) though it is not yet completed. Other major investment projects prepared with PSDTA support are: Ghorasal Repowering project, NG-3/NG-4 400 KV transmission project, Installation of 415 nos. of Interface metering, Per-paid/Remote metering project, RAPSS projects, Renewable Energy (Wind, Solar, Biomass) based projects, Serajgong 300-450 MW combine cycle power plant, Bibiyana-1 341 MW combine cycle power plant, 10 number of small power plants 220 MW capacity, 8 number of rental power plant 355 MW capacity etc.

(b) Assessment of the project design and implementation experience:

The Power Sector Development Technical Assistance (PSDTA) project was design to achieve the objectives of the project and in pertinent to the government's vision and mission. Project activities were divided into four major parts considering three executing agencies. Power Cell was responsible for power related activities, BERC for regulatory and tariff issues and

44

Petrobangla was responsible for gas & energy associated activities. The Project consists of the following four major components:

Part A: Technical Assistance

Power Sector Policy Making and Enterprise Restructuring:

PSDTA was designed to prepare and implement of Power Sector Reform Plan focusing on: (i) Financial restructuring and recovery plan to restore creditworthiness to meet the goals of high quality service in an efficient and sustainable manner, (ii)corporatization modes, single buyer structure and initial market interface arrangements for generation and distribution entities, (iii) electricity /energy demand assessment of main consumer groups and update of the country’s Power System Master Plan (PSMP), (iv) update of the financing and implementation strategies for the PSMP, (v) design of demand side management and energy efficiency programs; (vi) preparation of a sector wide social safeguard framework, including a subsidy strategy to facilitate access by low income and vulnerable people in urban and rural areas and (vii) other policy /program design, including preparation of training and capacity building programs, and design of the communication and consultations strategy. The project was design to provide support for preparation of investment programs, to improve distribution system reliability, to reduce system losses, to improve accountability and customer services.

Energy Regulatory Commission and Gas Sector Support:

The project was designed to provide technical advisory services to strengthen BERC. It included the provision of technical advisory services to assist Petrobangla and the Energy and Mineral Resources Division of MPEMR to: (i) strengthen planning, capacity building and management system of Petrobangla/EMR Division (ii) prepare and update the gas Sector Master Plan (GSMP) and (iii) implementation and financing plan, which ensures and adequate gas supply to power, industry and other sectors.

Part B: Management Strengthening The project was designed to provide management support from qualified operators to improve the technical, financial and customer service performance of the reformed electricity distribution and generation entities with an aim to develop the human resources deployed in the entities.

Part C: Training and Other Capacity Building Measures The PSDTA project was designed for strengthening the capacity of the Power Division of MPEMR and the Power Cell including power sector enterprises in planning, policy making, management, operations, customer and regulatory relations. Provision was there for strengthening the capacity of the BERC to shape and conduct economic regulation and strengthening the capacity of the EMR Division on MPEMR in gas sector policy making and sector reform, and the capacity of Petrobangla in gas sector planning and management.

Part D: Goods and Equipment PSDTA project was designed to provide support for office rent, logistics, management support and equipment for Power Cell/Power Division, Project working groups, BERC and EMR Division and Petrobangla.

The PSDTA project has implemented by the three executing agencies namely Power Cell, BERC and Petrobangla. But the key project activities have implemented by the Power Cell under the Power Division, MPEMR. Implementation of the reform programs were guided by a high level National Steering Committee, headed by the Principal Secretary, Prime Minister’s Office; having Secretary, Power Division; Secretary, Economic Relations Division (ERD); Secretary, IMED; Secretary, Finance Division; Member (Power and Industry), Planning Commission; Secretary, Ministry of Establishment as the members of the steering Committee. To review and monitor the progress of implementation of the reform program and to give policy decision a Task Force headed by Secretary, Power Division was formed, where the Chairman, BPDB; Chairman, DESA; Chairman, REB; Managing Director, PGCB; Managing Director, DESCO; Division Chief, Planning Commission; Director General, IMED; Joint Secretary, ERD; Joint Secretary, Finance Division and Joint Secretary (Development), Power Division worked as member and Director General, Power Cell as Member-Secretary of the Task Force.

The project design was appropriate and according to the requirement of the government. The PSDTA project implementation methodology was simple and easily attainable.

45

(c) Assessment of the project outcomes

The outcomes of the PSDTA project have been assessed on the basis of the some key performance indicators in line with the objectives of the project. Results of analysis are shown in the table below:

Indicators Unit 2003 (At the time of

Inception)

2012 (At the time of Completion)

Power Generation: Total Total Energy supply

Private Captive

Renewable Energy

MW 3428 8100 MKWh 13,453 35,118

MW 1120 3721 MW 0 79 MW 4 80

Nos.of electric consumers Million 70,73,705 1,35,00,000 Electric distribution lines KM 2,08,792 2,81,000 Per Capita Generation kWh 138 272 Per capita Consumption kWh 110 232 Electricity coverage % 34 60 Share of private power % 32 46 Power distribution loss % 21.64 12.26 Accounts Receivable Eq. Month 7.13 2.21 Balance sheet cleaning issues Nos. - 201 Consumer Service Poor Satisfactory Total Gas Supply bcm/yr. 11.93 21.06

In addition to the above, the following outcomes have also achieved through implementation of PSDTA project in Power & Energy sectors:

Fuel diversity for power generation (Gas, Coal, Liquid fuel, Duel fuel, Nuclear energy, Renewable Energy etc.) Preparation and implementation of immediate, short term, medium term and long term power generation plans. Implementation of IPPs, Join venture and PPP projects Grid access open to all RAPSS project areas (30 nos.) identification Declaration of fiscal incentives for private power generation and renewable energy projects through policies Implementation of energy efficiency and energy savings programs. Declaration of power generation targets from renewable energy through adoption of RE policy. 5% of total power generation from RE by 2015 and 10% by 2020. Balance sheet cleaning of the corporatized entities (reflects the true value of assets & liabilities). Introduction of Performance/Result base monitoring system for the utilities Establishment of South Zone Power Distribution Co., North West Power Generation Co., North West Power Distribution Co., Ashuganj Power Station Co., Dhaka Power Distribution Co. & Electricity Generation Co. of Bangladesh. Corporatization & sector strengthening (e.g. good governance and financial model introduced) of established companies Strengthening of REB & corporatization of BPDB under process

Contract documents review and prepared for big IPPs( Bibiyana-1 &2, Meghnaghat CCPP) Increasing financial soundness of the corporatized entities through efficiency improvement

Facilitated on line billing system for the utilities Establishment of LAN and website for Power Cell and Power Division Establishment of on line projects monitoring system Enterprise Resource Planning (ERP) system software Capacity building and Management strengthening through training

Power Cell has implemented 56 training programs on Corporate Governance, PPP, Financial Management, Renewable Energy etc where 127 participants have participated. Under Petrobangla component, 04 persons attended training course titled "Strategic Planning, Management Control & Effective Budgeting" held at Kuala Lumpur, Malaysia during 17-28 December 2012.

46

Under BERC component training on Result-based Management, Project Management, Basic Tariff Setting, Computer networking and e-Governance, and two seminars national and regional, the later titled “Energy Security and Regional Cooperation: Role of Regulators” had participants, apart from local stakeholders, from India, Malaysia, Myanmar, Sri Lanka, Vietnam and USA.

Gas Sector Master Plan and Strategy (GMPS) prepared in 2006 upto to the time horizon of 2025 is helping for guiding the sector with proper planning, development of the projects, remedial measures against existing shortcomings and to attract foreign financing. Better supply of gas to various parts of the country as well as better feeding towards development of gas based industries particularly the development of the power and industry sectors, and development of the clean fuel use followed by improving clean air environment has been achieved by implementation of GMPS. Communication Strategy and Campaign on Gas and Energy Pricing and Reforms Study (2010) final report prepared and being used. Implementation and Financing Plan for Gas Sector Development [GMPS Update] 2012 final report prepared in which long term investment and financing plan for gas sector development identified with a focus on gas demand-supply projection up to the time horizon of 2030. The recommendation of the report will be followed. Natural Gas Pricing Framework Study final report prepared and will be used by gas utilities, Petrobangla and BERC. Provided consultancy services and technology transfer on selection of offshore LNG terminal developer (now under selection).

Goods and office equipments (computer, laptop, printer, UPS, scanner, projector, photocopier, air cooler and office furniture) procured for Petrobangla and EMR Division.

New LAN and Servers installed at Petrobangla. ERP System/Customized Application Software for Petrobangla installed.

Projects formulation o EGCB ‘s Siddhirgang peaking power plant, o Ghorasal Repowering project, o NG-3/NG-4 400 KV transmission project, o Installation of 415 Interface meters, o Remote metering project o RAPSS projects o Renewable Energy (Wind, Solar, Biomass) based projects o Serajgong 300-450 MW combine cycle power plant o Bibiyana-1 341 MW combine cycle power plant o 10 number of small power plants 220 MW capacity o 8 number of rental power plant 355 MW capacity o Project Preparatory Report (Project Appraisal Document) prepared by the consultant and identified future projects for

world bank's funding in the midstream and downstream of gas sector such as construction of gas transmission pipelines, procurement and installation of gas meters for supply efficiency, loss reduction improvement TA, capacity building and HR development TA, comprehensive institutional building/strengthening TA.

3. Factors Affecting Implementation:

The Power Sector Development Technical Assistance (PSDTA) project has executed by the Power Cell, BERC and Petrobangla during 2004-2012. During the long implementation period executing agencies performed all the project activities government rules-regulations as well as World Bank’s guidelines. So there were many positives as well as negative factors that affected implementation of the project.

The major success factors were:

(a) Most of the private power generation projects implemented under the policies prepared by power cell under PSDTA projects of World Bank.

(b) All the private power generation(IPPs) projects followed the same model security packages (PPA, FSA, LLA, IA) developed by power cell

(c) Power cell worked as central procurement entity for policy preparation and IPP tendering process. (d) Entire power sector reform programs implemented under the PSDTA project. Power sector reform programs prepared

& implemented by the same organization (Power cell). (e) Power Division and other concern ministries were very helpful for the rapid implementation of reforms programs. (f) According to the objectives of the project GOB has prepared required policies, plans and programs/road maps.

47

(g) Government as well as World Bank strictly monitor the implementation of reform programs taken under this project (h) Power sector improvement and reform activities implemented creating individual working group in each utility. (i) There was a very close coordination among the ministry, power cell/BERC/pertobangla and the World Bank. (j) Sectors agencies (BPDB, REB, DESCO, DPDC, PGCB, WZPDCo, EGCB etc.) were very cooperative and helpful

during implementation of the project. (k) The PSDTA project objectives were in line with the government vision and mission. (l) Long term support with adequate amount of technical assistance under PSDTA was the key success factor. (m) World Bank increased scope of works and extended the implementation period according to the demand of the project. (n) PSDTA provide support for capacity buildings and HRD which was supportive for project execution and continuation. (o) Formulation and adoption of regulations, technical codes and quality standards, , financial codes, generation price

benchmarking (p) Tariff setting for electricity (bulk and retail), gas and petroleum products (q) Processing and issuing licenses (r) Creation of funds-Gas Development Fund and Electricity Maintenance and Development Fund (s) Themes for development of the energy sector

Negative factors that affected PSDTA project implementation were:

(a) Delay of fund effectiveness. DFA signed between the Government of Bangladesh and IDA in June 2003 but its fund effectiveness date was 31October 2004.

(b) In some cases implementation of power sector reform and restructuring programs opposed by the labor unions. (c) The main component of the project implemented by the power cell but DG, power cell was not delegated as head of

procuring entity. (d) Lengthy procurement process of GOB sometimes delayed the implementation progress. (e) Existing power generation crisis has delayed the implementation of interface metering program. (f) Changed government policies and strategies for power generation program affect implementation of few activities like

Siddirgonj Owner Engineer, Sirajgonj CCPP etc. (g) Frequent change of project director (DG, power cell). Change occurred 7 times during project implementation. (h) Directly so many organizations (Power Cell, Power Division, BPDB, REB, PGCB, EGCB, BERC, Petrobangla, Energy

Division etc.) were involve in implementation process. (i) Project man power was recruiting for short term (one year) basis not for the project period. (j) Activities done under the PSDTA project were special as well as technical in nature which requires experienced and

expertise man power. But the remuneration provided for project key staff was very poor.

Negative factors those affected the implementation of BERC portion of PSDTA were:

a) Delay of project starting and engagement of consultants by 17 months. b) As per TPP there was provision for engagement of 16 counterpart staff and assistants but in effect there were only

five. c) The Commission was provided approval with skeleton staff and all of them couldn’t be recruited and retained due to

absence of market-based compensation. d) Delay of recruitment of staff as well as insufficient staff , on the job training was unmatched with the expectation and

obviously capacity building could not be achieved fully.

4. Transition Arrangements for Sustainability of project Achievements

Foreign consultant engaged under the project prepared study reports, Policy documents, standard tender documents and security packages which have already been shared with the stakeholders. Interface remote metering technology, financial model for cleaning balance sheet of the utilities, project monitoring software etc have been developed during project implementation and handed over to the concern stake holder's with proper training.

5. Risks for Sustainability:

Probable risks for sustainability of the project output and outcome are given bellow:

(a) The Power Sector Development Technical Assistance (PSDTA) project was taken by the Government of Bangladesh mainly to implement the power sector reform programs through Power Cell. Power Cell has conducted many studies on power sector reforms and restructuring, power sector improvement, energy efficiency etc. Some of the recommendations provided in the study reports already implemented and the rest will be implemented gradually. To implement study recommendations properly, continuous monitoring and technical support will be needed.

48

(b) Under the reform program the power industry has been restructured to increase efficiency, promote competition and attract private investment. As outcome of the project South Zone Power Distribution Company (SZPDCo), North West Power Generation Company (NWPGCo), North West Power Distribution Company (NWPDCo), Ashuganj Power Station Company Ltd. (APSCL), Dhaka Power Distribution Company (DPDC) & Electricity Generation Company of Bangladesh (EGCB) has been established and few of them not yet stared its commercial functioning. To make all these newly corporatized companies full functional and to run them on a commercial basis management strengthening & technical support are essential.

(c) Under the PSDTA project power Cell has prepared the following plans to improve power sector and to implement reform & restructuring programs based on the policy guidelines provided in the Vision Statement and Policy Statement.

3 years Road Map for power sector reform programs; Financial Restructuring and Recovery Plan (FRRP); Power Sector Master Plan (PSMP) REB strengthening action plan Energy Efficiency Action Plan Model(South Zone) for distribution companies Renewable Energy Development plan Result Base Management system for performance improvement Central Server based programmable remote metering system (Interface Metering) Web based digital monitoring and data communication system etc.

The aforesaid plans and activities are being implemented by the Government under direct supervision of the Power Cell. The above mentioned plans are rolling and need continuous technical support for their sustainability.

(d) The TA project has been implemented in a comprehensive way as an umbrella project under the close supervision and directives of the government (Power cell) to provide services to the utilities BPDB, REB, DPDC, DESCO, PGCB, WZPDCL, NWZPDCL, IPPs and other emerging entities. Some important activities are still ongoing and will continue for the betterment of the sector. Proper monitoring and support will be required for successful completion of those activities.

(e) Most of the power sectors utilities are newly formed under the project as outcome of the reform program. They have lack of expert and specialized human resources to run the utility efficiently and commercial viability. Absence of HRD activities will increase the risk of sustainability of the project.

To sustain improved performance, consumer satisfaction and accelerated development of the sector additional support from the GoB as well as from the Bank will limit the risk of sustainability of the project outcome.

6. Lessons Learnt:

Under the Power Sector Development Technical Assistance (PSDTA) project some new activities & systems have been implemented as well as several new technologies have been introduced for improvement of the sector and to increase the customer services. Through implementation of new systems and technologies there was a scope to learn and gather experience.

(a) Power Cell has prepared Private sector power generation policy, Captive Power Policy, RAPSS Policy, Renewable Energy Policy and Commercial Power Policy etc. to create an environment to attract private investment in power sector under the project. Government has declared adequate financial incentives and benefits for private investors through those policies. As a result of appropriate policies about 3721 MW power plants have been installed and 6850 MW under procurement process under private sector. So to achieve the targets and objectives appropriate policy framework is a first priority.

(b) Before installation of Interface Metering System there was a gap between bulk power purchase and sale. Power Cell has implemented server based, programmable remote metering system in coordination with the concern utilities to establish transparency and accountability. After successful compilation of the above program system loss has been reduced remarkably. Use of modern and appropriate technology increase efficiency and improve customer services.

(c) From the government point of views the performance of the project is highly satisfactory. One of the key success factors is the top management involvement. Implementation of the reform programs were guided by a high level National Steering Committee, headed by the Principal Secretary, Prime Minister’s Office and the progress of project activities were reviewed

49

and monitored by a Task Force headed by Secretary, Power Division. Involvement of decision makers in the implementation process, ensure rapid and smooth implementation of project.

(d) EA's have done lot of activities and successfully completed the project. Under the project power sector reform and performance improvement activities have been done on the basis of prepared plans as well as on the basis of objectives oriented time bound targets. Preparation of appropriate plan with attainable target is a way to reach the goal.

(e) The objectives of the project taken by the World Bank were highly pertinent with objectives of the government which was the main reason behind the success of the project. Projects should be taken by the donor agencies considering the vision and objectives of the government.

7. World Bank's Performance

GOB rates the World Bank’s performance during preparation and implementation of PSDTA as ‘Highly Satisfactory’. All stakeholders including MOPEMR, BPDB, REB, PGCB, EGCB, DPDC, DESCO, WZPDC, BERC and Petrobangla representatives were regularly consulted with World Bank's officers during implementation period. The project implementation progress was reviewed by the WB mission at a regular basis.

The World Bank was responsive to request to change project scopes according to the demand of the Government of Bangladesh and EA's. The extension of the Project period two times for additional four years ensured that funds were fully & properly utilized. The Bank provided shared its experiences and provided valuable advice on the various new technologies that were being introduced during implementation of reform and restructuring programs in the power & energy sectors.

The Bank was particularly involved in efforts to resolve problems relating to the implementation of Interface Metering program, Supervision and Management consultant for Siddhirganj Peaking Power Plant (Owners Engineer), Appointment of other consultants, arranging of foreign trainings, workshops and studies, procurement of goods and vehicles.

However, in some cases the World Bank took long time for their concurrence/approval regarding EOI evaluation, RFP document, technical evaluation etc. for selection of consultants.

The country Director and the officials in the H/Q were supportive and accommodating to adjust scope of works and to extend the project implementation period for a longer time according to the demand of the Government. They invited several time of our policy makers and high officials to visit Washington DC to share knowledge and experience which was very helpful for decision making during implementation of the critical activities. The task team leader and the concern officials of Bank's local office were very co-operative and sincere for implementation of the project. They regularly consulted with the executing agencies for smooth execution of the project.

8. Conclusion

To materialize the vision of the government through reforms and improvement of the sector PSDTA project was essential. After successful completion of the project transparency & accountability has been established this has improved the operating efficiency of the utilities. Preparation of appropriate policies has created an environment to attract private investment in thesectors; it has also increased the donor’s confidence to come forward for future investment programs. Preparation of Power Sector Master Plan, Gas Master Plan, FRRP etc. have been playing very vital for systematic development of the sector. Besides, quality of gas and electricity supply has been increased, as a result overall costumer services has been improved considerably after implementation of the project.

Regulation of the energy sector entities has brought discipline, accountability and transparency resulting in efficiency improvement and increased customers’ satisfaction. Energy tariff is being set by adopting specific methodologies with an aim to reach cost plus progressively. The bulk supply electricity tariff during the span of PSDTA recorded 130% increase while the retail electricity tariff accumulated 67% hike. Similarly, gas and CNG tariff increases were 11% and 79% respectively.

Reform is a continuous process. Though the objectives of the project were achieved and many reforms activities have been done under the PSDTA but still some important activities are under implementation process. Extended support from IDA will be needed to complete the unfinished tasks and sustain the achievement of the project.

In conclusion the Government of Bangladesh is of the opinion that the Power Sector Development Technical Assistance (PSDTA) project achieved its objectives and played a crucial role in the development of power & energy sectors in Bangladesh.

50

Annex 6. Time Series Data

Source: Power Cell Annual ReportFigure 1 Annual Government Investment for Electricity Sector (2002 2012)

Source: Power System Master Plan 2010Figure 2 Average Future Investment for Electricity Sector (2013 2030): US$ 3,504 Million/year

272.8334.2

441.7 472.5 485.3409.1 442.8

382.4

175.3

616.7

1,026.4

0

200

400

600

800

1,000

1,200

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

US$ Million

Year

GovernmentInvestmentUS$ 681

Million/year(19.4%)

PPP InvestmentUS$ 1,269Million/year(36.2%)

Private InvestmentUS$ 1,554Million/year(44.3%)

51

Source: Bangladesh Power Development Board Annual ReportFigure 3 Power Generation Share for Public and Private (MW)

Source: Bangladesh Power Development BoardFigure 4 Electricity Access Ratio

01,0002,0003,0004,0005,0006,0007,0008,0009,000

2009 2010 2011 2012

3,100(60%)

3,110(59%)

3,651(55%)

4,604(54%)

2,066(40%)

2,161(41%)

2,988(45%)

3,922(46%)

MW

YearPrivate Power Generation Capacity (MW)

Public Power Generation Capacity (MW)

30 32 34 35 37 41 43 44 47 48 50

60

100

0102030405060708090100

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

%

Year

52

Source: Bangladesh Power Development Board Annual ReportFigure 5 Per Capita Electricity Consumption

Source: World Development Indicators and Bangladesh Bureau of StatisticsFigure 6 Per Capita GDP

106 113 122 133 139 150 150 158 165 170 180220

600

0

100

200

300

400

500

600kWh/year

Year

356 354 380 408 429 435475

547608

675743

848

0

100

200

300

400

500

600

700

800

900

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

US$

Year

53

Source: Bangladesh Power Development Board Annual Report and Power SystemMaster Plan 2010Figure 7 Total Domestic Power Generation Capacity

Source: Bangladesh Power Development Board Annual ReportFigure 8 Cumulative IPP Connected to the National Grid

3,033 3,217 3,428 3,592 3,720 3,782 3,7174,130

5,166 5,271

6,639

8,100

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MW

Year

310670

1,120 1,253 1,253 1,253 1,2931,538

1,894

2,414

3,3773,721

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

MW

Year

54

Source: Power Cell/BPDB and Power System Master Plan 2010Figure 9 Total Domestic Power Supply

Source: Power Cell/BPDB and Power System Master Plan 2010Figure 10 Total Domestic Power Supply Capacity Expansion Plan

16,25517,445

13,453

20,30221,40822,987

23,268

24,94626,533

29,24731,355

35,118

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

GWh/year

Year

020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

GWh/year

Year

55

Source: Power Grid Company of Bangladesh and Bangladesh Power Development BoardFigure 11 Electricity Import Plan (Cumulative)

0500

1500

5000

8,500

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

2013 2015 2020 2025 2030

MW

Year

56

Source: Power Grid Company of BangladeshFigure 12 Length of Power Transmission Line

Source: Power Grid Company of BangladeshFigure 13 Length of Power Transmission Line Extension Plan

5,349 5,7436,363 6,463 6,758 6,843

7,0437,891

8,328 8,4278,742 8,774

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Circuit km

Year

02,0004,0006,0008,000

10,00012,00014,00016,00018,000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Circuit km

Year

57

Source: Management Information System Report of Utilities and Bangladesh Power Development BoardFigure 14 Length of Power Distribution Line

Source: Management Information System Report of Utilities and Bangladesh Power Development BoardFigure 15 Length of Power Distribution Line Extension Plan

173,357

187,993208,792

225,597241,984

246,505

252,105

255,208

257,104

265,147271,267

281,000

0

50,000

100,000

150,000

200,000

250,000

300,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

km

Year

0

100,000

200,000

300,000

400,000

500,000

600,000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

km

Year

58

Source: Bangladesh Power Development Board Annual Report and Power SystemMaster Plan 2010Figure 16 Electricity Supply and Demand (Balance)

Source: Bangladesh Power Development Board Annual Report and Power SystemMaster Plan 2010Figure 17 Electricity Supply and Demand Forecast

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

3,3943,6593,9474,259

4,5974,6935,112

5,5696,0666,2546,365

6,600

3,0333,2173,4283,5923,720

3,7823,7174,1304,162

4,6064,890

6,066

MW

Year

Demand (MW) Supply (MW)

05,00010,00015,00020,00025,00030,00035,00040,000

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

8,34912,644

18,838

33,708

9,521

17,334

24,000

39,000MW

YearDemand (MW) Supply (MW)

59

Source: Bangladesh Power Development Board Annual Report and Power SystemMaster Plan 2010Figure 18 Electricity Supply and Demand Gap Forecast

Source: Bangladesh Energy Regulatory CommissionFigure 19 System Loss (Distribution)

3,000

2,000

1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

MW

Year

26.09 25.3423.92

21.6420.04

17.8316.53 16.26 15.56

14.33 13.49 12.75 12.26

0

5

10

15

20

25

30

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

%

Year

60

Source: Power Cell Annual ReportFigure 20 Account Receivable for Distribution Company (Equivalent Months)

Source: Bangladesh Energy Regulatory CommissionFigure 21 Operating Income for Electricity Sector

8.327.74

7.136.45

4.12 3.83

2.76 2.45 2.44 2.40 2.22 2.21

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

%

Year

100

0

100

200

300

400

500

600

700

800

900

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

US$ Million

Year

PDB

REB

DPDC

WZDC

DESCO

61

Source: Bangladesh Energy Regulatory CommissionFigure 22 Electricity Tariff (USC/kWh)

Source: Bangladesh Energy Regulatory CommissionFigure 23 Gas Tariff (TK/m3)

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

1/De

c/1998

1/Sep/1999

1/Jun/2000

1/Mar/200

1

1/De

c/2001

1/Sep/2002

1/Jun/2003

1/Mar/200

4

1/De

c/2004

1/Sep/2005

1/Jun/2006

1/Mar/200

7

1/De

c/2007

1/Sep/2008

1/Jun/2009

1/Mar/201

0

1/De

c/2010

1/Sep/2011

TK/m3

Power

Fertilizer

Industry

Commercial

Tea Garden

Compressed Natural Gas

Captive Power

Brick Field (Seasonal)

Domestic (Metered)

6.71

8.21

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

USC/kWh

Year

Wholesale (Bulk) Electricity Tariff

Retail Electricity Tariff

5.09

3.09

62

Source: Implementation and Financing Plan for Gas Sector DevelopmentFigure 24 Domestic and Imported Gas Supply (2000 2030)

Source: Implementation and Financing Plan for Gas Sector DevelopmentFigure 25 Gas Supply and Demand (2000 2030)

0

5

10

15

20

25

30

35

40

45

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Billion m3

Year

Total Gas Supply

Domestic Gas Supply

Imported Gas Supply

0

5

10

15

20

25

30

35

40

45

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

Billion m3

Year

Supply

Demand

63

Annex 7. List of Supporting Documents

1. Project Appraisal Document, Power Sector Development Technical Assistance Project for Bangladesh, May 7, 2004, World Bank.

2. Development Financing Agreement for Power Sector Development Technical Assistance Project between the People’s Republic of Bangladesh and International Development Association, June 23, 2004

3. Implementation Status and Result, Sequence No.1 to No.17, World Bank.

4. Mission Aide Memoires and Management Letters, World Bank.

5. Mid-Term Review of Paper, Power Sector Development Technical Assistance Project (PSDTA) August 13-20, 2007, World Bank.

6. Restructuring Paper, Power Sector Development Technical Assistance Project for Bangladesh, November 9, 2007, World Bank.

7. Country Assistance Strategy for The People’s Republic of Bangladesh for the Period FY11-14, June 30, 2010, World Bank.

8. 3-Year Road Map for Power Sector Reform (July 2009 – June 2012), June 2010, Power Division, Ministry of Power, Energy and Mineral Resources, Government of the People’s Republic of Bangladesh.

9. Restructuring Paper, Power Sector Development Technical Assistance Project for Bangladesh, June 29, 2011, World Bank.

10. Restructuring Paper, Power Sector Development Technical Assistance Project for Bangladesh, October 30, 2012, World Bank.

11. Consulting Services for Preparation of Implementation and Financing Plan for Gas Sector Development, December 2012, Bangladesh Oil, Gas & Mineral Corporation (Petrobangla).

R A J S H A H IR A J S H A H I

D H A K AD H A K A

S Y L H E TS Y L H E T

K H U L N AK H U L N A

B A R I S A LB A R I S A L

C H I T T A G O N GC H I T T A G O N G

PANCHAGARPANCHAGAR

THAKURGAONTHAKURGAONNILPHAMARINILPHAMARI

LALMONIRHAT

LALMONIRHAT

DINAJPURDINAJPUR

RANGPURRANGPURKURIGRAMKURIGRAM

GAIBANDHAGAIBANDHA

JOYPURHATJOYPURHAT

NAOGAONNAOGAON

NOWABGANJNOWABGANJ

RAJSHAHIRAJSHAHI

NATORENATORE

BOGRABOGRA

JAMALPURJAMALPUR

SERPURSERPUR

NETROKONANETROKONA

MYMENSINGHMYMENSINGH

TANGAILTANGAILSERAJGANJSERAJGANJ

PABNAPABNA

KUSHTIAKUSHTIA

MEHERPURMEHERPUR

CHUADANGACHUADANGA

JHENAIDAHJHENAIDAH MAGURAMAGURA

RAJBARIRAJBARI

FARIDPURFARIDPUR

MANIKGANJMANIKGANJ

DHAKADHAKA

GAZIPURGAZIPUR

KISHORGANJKISHORGANJHABIGANJHABIGANJ

SUNAMGANJSUNAMGANJ

SYLHETSYLHET

MOULVI BAZARMOULVI BAZAR

BRAHMANBRAHMANBARIABARIA

NARSINGDINARSINGDI

NARAYNGANJNARAYNGANJ

MUNSHIGANJMUNSHIGANJ

SARIATPURSARIATPUR CHANDPURCHANDPUR

COMILLACOMILLA

MADARIPURMADARIPURGOPALGANJGOPALGANJ

NARAILNARAILJESSOREJESSORE

SATKHIRASATKHIRA

KHULNAKHULNA

BAGERHATBAGERHAT

PEROJPURPEROJPUR

BARISALBARISAL

JHALUKATHIJHALUKATHI

PATUAKHALIPATUAKHALIBHOLABHOLA

BARGUNABARGUNA

LUXMIPURLUXMIPUR

NOAKHALINOAKHALI FENIFENI

KHA

GRA

CH

HA

RI

KHA

GRA

CH

HA

RI

RANGAMATIRANGAMATI

CHITTAGONGCHITTAGONG

BANDARBANBANDARBAN

COX’SCOX’SBAZARBAZAR

RangpurRangpur

GaibandhaGaibandha

DinajpurDinajpur

BograBogra

SerajganjSerajganjNatoreNatore

JoypurhatJoypurhat

NaogaonNaogaon

NowabganjNowabganj

JamalpurJamalpurSerpurSerpur

NetrokonaNetrokona

SunamganjSunamganj

PabnaPabna

KushtiaKushtia

RajbariRajbariMeherpurMeherpur

ChuadangaChuadanga

JhenaidahJhenaidahMaguraMagura

NarailNarail

SatkhiraSatkhira

BagerhatBagerhat

PerojpurPerojpur

JhalukathiJhalukathi

GopalganjGopalganj

MadaripurMadaripurSariatpurSariatpur

FaridpurFaridpur

JessoreJessore

NoakhaliNoakhali

KhagrachhariKhagrachhari

PatuakhaliPatuakhali

BholaBhola

BargunaBarguna

ComillaComilla

Moulvi BazarMoulvi Bazar

MymensinghMymensingh

TangailTangail

ManikanjManikanj

RangamatiRangamati

BandarbanBandarban

Cox's BazarCox's Bazar

ThakurgaonThakurgaon

NilphamariNilphamari LalmonirhatLalmonirhat

KurigramKurigram

PanchagarPanchagar

FeniFeni

GazipurGazipurNarsingdiNarsingdi

NaraynganjNaraynganj

MunshiganjMunshiganj

ChandpurChandpur

LuxmipurLuxmipur

BrahmanbariaBrahmanbaria

HabiganjHabiganj

KishorganjKishorganj

RajshahiRajshahi

KhulnaKhulna

SylhetSylhet

BarisalBarisal

ChittagongChittagong

DHAKADHAKA

JJaammuunnaa

GGaannggeess

GGaannggeess

MMeegg

hhnnaa

Kaptai KaptaiLakeLake

GG aa nn gg ee ss DD ee ll tt aa

SS uu nn dd aa rr bb aa nn ss

R A J S H A H I

D H A K A

S Y L H E T

K H U L N A

B A R I S A L

C H I T T A G O N G

PANCHAGAR

THAKURGAONNILPHAMARI

LALMONIRHAT

DINAJPUR

RANGPURKURIGRAM

GAIBANDHA

JOYPURHAT

NAOGAON

NOWABGANJ

RAJSHAHI

NATORE

BOGRA

JAMALPUR

SERPUR

NETROKONA

MYMENSINGH

TANGAILSERAJGANJ

PABNA

KUSHTIA

MEHERPUR

CHUADANGA

JHENAIDAH MAGURA

RAJBARI

FARIDPUR

MANIKGANJ

DHAKA

GAZIPUR

KISHORGANJHABIGANJ

SUNAMGANJ

SYLHET

MOULVI BAZAR

BRAHMANBARIA

NARSINGDI

NARAYNGANJ

MUNSHIGANJ

SARIATPUR CHANDPUR

COMILLA

MADARIPURGOPALGANJ

NARAILJESSORE

SATKHIRA

KHULNA

BAGERHAT

PEROJPUR

BARISAL

JHALUKATHI

PATUAKHALIBHOLA

BARGUNA

LUXMIPUR

NOAKHALI FENI

KHA

GRA

CH

HA

RI

RANGAMATI

CHITTAGONG

BANDARBAN

COX’SBAZAR

Rangpur

Gaibandha

Dinajpur

Bogra

SerajganjNatore

Joypurhat

Naogaon

Nowabganj

JamalpurSerpur

Netrokona

Sunamganj

Pabna

Kushtia

RajbariMeherpur

Chuadanga

JhenaidahMagura

Narail

Satkhira

Bagerhat

Perojpur

Jhalukathi

Gopalganj

MadaripurSariatpur

Faridpur

Jessore

Noakhali

Khagrachhari

Patuakhali

Bhola

Barguna

Comilla

Moulvi Bazar

Mymensingh

Tangail

Manikanj

Rangamati

Bandarban

Cox's Bazar

Thakurgaon

Nilphamari Lalmonirhat

Kurigram

Panchagar

Feni

GazipurNarsingdi

Naraynganj

Munshiganj

Chandpur

Luxmipur

Brahmanbaria

Habiganj

Kishorganj

Rajshahi

Khulna

Sylhet

Barisal

Chittagong

DHAKA

I N D I A

I N D I A

I N D I A

MYANMAR

BHUTAN

Jamuna

Ganges

Ganges

Meg

hna

KaptaiLake

B a y o f B e n g a l

M o u t h s o f t h e G a n g e s

To Dispur

To Dispur

To Dispur

To Silchar

To Goalpara

To Patna

To Katihar

To Katihar

To Gangtok

To Sittwe

To Calcutta

To Calcutta

G a n g e s D e l t a

S u n d a r b a n s Mt. Mowdok(957 m)

26ºN

25ºN

24ºN

23ºN

22ºN

21ºN

25ºN

24ºN

23ºN

22ºN

21ºN

88ºE 89ºE 90ºE 91ºE

89ºE 90ºE 91ºE 92ºE

92ºE

BANGLADESH

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other informationshown on this map do not imply, on the part of The World BankGroup, any judgment on the legal status of any territory, or anyendorsement or acceptance of such boundaries.

0 10 20 30 40

0 10 20 30 40 50 Miles

50 Kilometers

IBRD 33368R

MARCH 2008

BANGLADESHDISTRICT CAPITALS

DIVISION CAPITALS

NATIONAL CAPITAL

RIVERS

MAIN ROADS

RAILROADS

DISTRICT BOUNDARIES

DIVISION BOUNDARIES

INTERNATIONAL BOUNDARIES