Public Disclosure Copy The World Bank Implementation Status & Results Report Energy Supply Reliability and Financial Recovery (P169117) Energy Supply Reliability and Financial Recovery (P169117) EUROPE AND CENTRAL ASIA | Georgia | Energy & Extractives Global Practice | IBRD/IDA | Investment Project Financing | FY 2019 | Seq No: 9 | ARCHIVED on 28-Mar-2024 | ISR59956 | Implementing Agencies: Georgia, Georgian State Electrosystem Key Dates Key Project Dates Bank Approval Date: 23-May-2019 Effectiveness Date: 28-Nov-2019 Planned Mid Term Review Date: 30-Sep-2022 Actual Mid-Term Review Date: 30-Sep-2022 Original Closing Date: 31-Dec-2024 Revised Closing Date: 31-Dec-2025 Guarantee Expiration Date: Guarantee Information Deli Coverage: [✓] Loan Guarantee [ ] Payment guarantee Type of Implementing entity: Public Guarantee beneficiary: Not known yet Includes Payment Guarantee Yes Guarantee fees: UpFront Are guarantee fees current? Guarantee fees payment due dates: pdoTable Project Development Objectives Project Development Objective (PDO) Project Development Objective (from Project Appraisal Document) The objectives of the Project are to increase electricity supply reliability in the western part of Georgia, achieve the financial viability of GSE, and help it access long-term commercial financing. HRPDODELs Components Table 3/28/2024 Page 1 of 8 Public Disclosure Copy The World Bank Implementation Status & Results Report Energy Supply Reliability and Financial Recovery (P169117) Name Strengthening of the power transmission network:(Cost $66.00 M) Support to financial recovery of GSE and preparatory work to access the capital markets:(Cost $6.50 M) IBRD Guarantee to help GSE raise long-term commercial financing:(Cost $50.00 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The implementation of the Project is overall Moderately Satisfactory. The rating towards the achievement of PDO is Moderately Satisfactory. Construction of the Tskaltubo substation is progressing well and completion is expected by Q3 2024. Implementation of the Jvari-Tskaltubo transmission line component is also progressing, albeit with delays as GSE is still waiting for issuance of construction and E&S permits. This is also due to the rerouting of the middle section of the line (Part 2) for which a revised full ESIA is required and delays in the mobilization of the contractor. GSE has made significant progress on its financial viability, with its cash deficit eliminated since the financial year 2021 and the bankruptcy regime completed. Preparations for the first commercial transaction are ongoing. Guarantee Conditions Precedent Description Status The decision on deployment of guarantee for local GEL bond issuance Expected soon would be made by end of Q2 depending on feedback from the market Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Low Moderate Macroeconomic Moderate Moderate Low Sector Strategies and Policies Moderate Substantial Substantial Technical Design of Project or Program Moderate Low Moderate Institutional Capacity for Implementation and Substantial Substantial Substantial Sustainability Fiduciary Moderate Moderate Moderate Environment and Social High High High Stakeholders Substantial Substantial Substantial 3/28/2024 Page 2 of 8 Public Disclosure Copy The World Bank Implementation Status & Results Report Energy Supply Reliability and Financial Recovery (P169117) Other -- -- -- Overall Substantial Substantial Substantial Results PDO Indicators by Objectives / Outcomes Electricity supply reliability in the western part of Georgia IN01403132 ►Number of end-user outages caused by failures of 500 kV OHLs in the western part of Georgia (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 4.00 2.00 2.00 0.00 Date 31-Dec-2018 31-Dec-2022 31-Dec-2022 31-Dec-2025 This indicator measures improvements in reliability of electricity supply in the western part of Georgia. This indicator would track outages caused only by failures on the 500 kV Imereti, Zekari, Jvari-Tskaltubo, and Tskaltubo-Akhaltiskhe OHLs. Comments: The Actual outage data changes from year to year based on actual outages on the mentioned existing lines. The target remains unchanged. The latest value is for the full year of 2022 (2 outages). IN01403135 ►Average annual duration of end-user outages caused by failures of 500 kV OHLs in the western part of Georgia (Minutes, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 161.00 24.00 24.00 0.00 Date 31-Dec-2018 31-Dec-2022 31-Dec-2022 31-Dec-2025 This indicator measures the improvement of electricity supply reliability in the western part of Georgia. The duration of outages in the western part of Georgia will be changing from year to year in an unpredictable manner until the new line is constructed. There is no change in the Target Value of this Comments: indicator. The latest value is 24 for the full year of 2022. Financial viability IN01403133 ►End of GSE rehabilitation regime (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 31-Dec-2018 31-Jul-2023 28-Feb-2024 30-Sep-2020 This indicator measures the progress with the financial recovery of GSE. Comments: GSE has exited the bankruptcy regime and has made substantial profits in 2023. IN01403156 ►Reduction of cash deficit of GSE (Amount(USD), Custom) 3/28/2024 Page 3 of 8 Public Disclosure Copy The World Bank Implementation Status & Results Report Energy Supply Reliability and Financial Recovery (P169117) Baseline Actual (Previous) Actual (Current) End Target Value 3,064,460.00 0.00 0.00 0.00 Date 31-Dec-2017 31-Dec-2022 31-Dec-2023 30-Jun-2021 This indicator will measure the adequacy of the operating cash revenues of GSE (as a Group) to fully finance the required recurrent operating and maintenance costs, debt service, and taxes. Comments: The actual value is updated reflecting the latest year for which financial statements are available (2022), and therefore dated December 31, 2023. IN01403157 ►Improved decision-making on new investments in power transmission network as a result of institutional strengthening (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New investments in New investments in New investments in New investments in power transmission power transmission power transmission power transmission network are always network are not always network are consistent network are consistent Value consistent with the consistent with the with the principles of with the principles of principles of least principles of least least economic cost least economic cost economic cost economic cost planning. planning. planning. planning. Date 31-Dec-2018 31-Jul-2023 31-Dec-2023 31-Dec-2025 This indicator will measure the progress with strengthening of institutional capacity of GSE. Comments: Access to long-term commercial financing IN01403134 ►Long-term commercial financing mobilized (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 100,000,000.00 Date 31-Dec-2018 31-Jul-2023 31-Dec-2023 31-Dec-2025 This indicator measures progress with securing long-term commercial financing. The target was for GSE to raise US$100m by June 2021. However, progress on this indicator has been Comments: delayed. Overall Comments PDO Outage data for Western Georgia for 2023 is not yet available. Will be updated during next ISR. Intermediate Results Indicators by Components Strengthening of the power transmission network IN01403158 ►Jvari-Tskaltubo 500 kV OHL constructed (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target 3/28/2024 Page 4 of 8 Public Disclosure Copy The World Bank Implementation Status & Results Report Energy Supply Reliability and Financial Recovery (P169117) Value 0.00 0.00 0.00 77.00 Date 31-Dec-2018 31-Jul-2023 31-Jul-2023 31-Dec-2025 Comments: This indicator will measure the progress with construction of the target transmission line. IN01403161 ►500/220 kV Tskaltubo substation constructed (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Dec-2018 31-Jul-2023 31-Jul-2023 31-Dec-2025 This indicator will track progress with completion of 500/220 kV Tskaltubo substation. Comments: The timeline for completion of the substation was extended to end of September 2023. Financial recovery of GSE and preparatory work to access capital markets IN01403159 ►Adequately staffed Environmental and Social Unit is established and maintained at GSE (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No Yes Yes Yes Date 31-Dec-2018 31-Jul-2023 31-Jul-2023 31-Dec-2019 This indicator will measure the progress with strengthening of in-house capacity of GSE in adequately managing the environmental and social aspects of investment projects. Comments: The indicator was upgraded as the position of the head of the E&S unit within GSE was filled. IN01403162 ►Mechanism is introduced to reduce or eliminate exposure of GSE to FX risks (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Dec-2018 31-Jul-2023 31-Jul-2023 31-Dec-2025 This indicator will measure the progress with introduction and implementation of mechanism to eliminate Comments: or reduce GSE exposure to FX risks. IN01403163 ►GSE is issued a credit rating by an international reputable rating agency (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Dec-2018 31-Jul-2023 31-Jul-2023 31-Dec-2025 This indicator will measure the progress with preparedness of GSE to access commercial financing. This Comments: has been delayed, even though a contract with a credit rating agency was signed at the end of 2021. IN01403164 ►Percentage of grievances recorded by the Project and resolved within a two-week period (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target 3/28/2024 Page 5 of 8 Public Disclosure Copy The World Bank Implementation Status & Results Report Energy Supply Reliability and Financial Recovery (P169117) Value 0.00 100.00 100.00 100.00 Date 31-Dec-2018 31-Jul-2023 31-Jul-2023 31-Dec-2025 Comments: This indicator will monitor efficiency of GRM under the Project. IN01403165 ►Percentage of citizens who believe that the project has established effective engagement processes (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 90.00 90.00 75.00 Date 31-Dec-2018 31-Jul-2023 31-Jul-2023 31-Dec-2025 This indicator will help to monitor progress of citizen engagement activities. Social questionnaires will be distributed to citizens in affected communities during RAP implementation. Comments: The results will be updated once the survey findings are processed. IN01403166 ►Increase in demand for gender-based violence support services in project regions (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 10.00 Date 31-Dec-2018 31-Jul-2023 31-Jul-2023 31-Dec-2025 This indicator will monitor the progress on gender-related activities. Under the ESCP, GSE has an obligation to mobilize a qualified expert on the issue of gender-based violence and conduct an awareness campaign in each project-affected community about GBV risks and Comments: available support services. As of July 2023, GSE has completed the process of mobilizing the gender expert, who is supporting project implementation during RAP implementation and construction of the OHL. Support in accessing long-term commercial financing IN01403160 ►Closure of the transaction to raise commercial financing (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No No No Yes Date 31-Dec-2018 31-Jul-2023 31-Jul-2023 31-Dec-2025 This indicator will measure the progress in raising long-term commercial financing for GSE. Comments: There is currently no clear timeline for the first commercial financing transaction. Performance-Based Conditions Data on Financial Performance Disbursements (by loan) 3/28/2024 Page 6 of 8 Public Disclosure Copy The World Bank Implementation Status & Results Report Energy Supply Reliability and Financial Recovery (P169117) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P169117 IBRD-89520 Effective USD 70.70 70.70 0.00 33.95 35.21 49% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P169117 IBRD-89520 Effective 23-May-2019 18-Jun-2019 28-Nov-2019 31-Dec-2024 31-Dec-2025 Guarantee Amount Project Guarantee No. Status Currency Original Revised Cancelled Current Amount P170552 IBRD-G2870 Not Effective EUR 43.87 43.87 0 43.87 Guarantee Dates Orig. Guarantee Rev. Guarantee Project Guarantee No Status Approval Date Signing Date Effectiveness Date Expiration Date Expiration Date Not P170552 IBRD-G2870 23-May-2019 Effective Cumulative Disbursements 3/28/2024 Page 7 of 8 Public Disclosure Copy The World Bank Implementation Status & Results Report Energy Supply Reliability and Financial Recovery (P169117) Restructuring History Level 2 Approved on 06-Mar-2023 Related Project(s) P170552-Energy Supply Reliability and Financial Recovery Guarantee 3/28/2024 Page 8 of 8