Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) Report Number: ICRR0023543 1. Project Data Project ID Project Name P152936 Myanmar National Electrification Project Country Practice Area(Lead) Myanmar Energy & Extractives L/C/TF Number(s) Closing Date (Original) Total Project Cost (USD) IDA-57270,TF-A6531,TF-A8224 30-Sep-2021 303,555,965.72 Bank Approval Date Closing Date (Actual) 16-Sep-2015 30-Sep-2021 IBRD/IDA (USD) Grants (USD) Original Commitment 400,000,000.00 3,450,000.00 Revised Commitment 305,687,365.34 190,771.32 Actual 303,567,197.96 190,771.32 Prepared by Reviewed by ICR Review Coordinator Group Fernando Manibog Vibecke Dixon Ramachandra Jammi IEGSD (Unit 4) 2. Project Objectives and Components DEVOBJ_TBL a. Objectives The project development objective (PDO) of the National Electrification Project (NEP) is “to help increase access to electricity in Myanmar.” (Financing Agreement dated November 3, 2015, Schedule 2, Page 5). The PDO formulation in the Project Appraisal Document (PAD) is exactly the same. The PDO was revised during the restructuring in August 2017 by adding “and to provide immediate and effective response in case of an eligible crisis or emergency.” Page 1 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) For the purposes of this ICR Review, the two objectives to be assessed are: Objective 1: To help increase access to electricity in Myanmar Objective 2: To provide immediate and effective response in case of an eligible crisis or emergency. Since the project’s ambition expanded while being funded by a re-allocation from an original project component (specifically, lower local community contributions), a split rating will not be conducted, in line with IEG guidelines. (See Dates below for an additional explanation.) b. Were the project objectives/key associated outcome targets revised during implementation? Yes Did the Board approve the revised objectives/key associated outcome targets? Yes Date of Board Approval 24-Aug-2017 c. Will a split evaluation be undertaken? No d. Components Component 1: Grid extension (Appraisal cost estimate: US$375 million, of which the IDA contribution of US$300 million was revised to US$286.245 during the 2017 restructuring. Actual cost: US$203.14 million) The component aimed to support Yangon Electricity Supply Corporation (YESC), Mandalay Electricity Supply Corporation (MESC) and Electricity Supply Enterprise (ESE) for distribution network extensions and connection of communities and households to the national power grid. The component included goods for: (i) the expansion of existing, and construction of new medium voltage (MV) substations; (ii) the construction of new MV lines, low voltage (LV) lines and MV/LV transformers; and (iii) household and community connections and public lighting. Component 2: Off-grid electrification (Appraisal cost estimate: US$172 million, of which the IDA contribution was US$80 million. Actual cost: US$169.37 million) The component was to provide support to: (i) deploy solar photovoltaic systems; (ii) develop mini-grids; (iii) provide community electricity connections (schools, health clinics and other community buildings); and (iv) install public street lights in targeted communities. Component 3: Technical assistance and Project management Page 2 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) (Appraisal cost estimate: US$20 million of IDA contribution. Actual cost: US$17 million) The component aimed to provide support to: (a) the Ministry of Electricity and Energy (MOEE) responsible for electric power and (b) the Ministry of Livestock, Fisheries, and Rural Development (MLFRD) to: (i) strengthen institutional capacity to implement the National Electrification Plan (NEP); (ii) improve the policy and regulatory framework related to electrification and renewable energy; (iii) develop an integrated framework for electrification planning, results monitoring and impact evaluation; (iv) secure technical advice and consulting services, including on standards, technology assessment and technical design, economic and financial analysis, environmental and social impact management, procurement and financial management; and (v) improve project management. Component 4: Contingent emergency response (Zero allocation at appraisal. At the 2017 restructuring: US$13.755 million of IDA contribution. Actual: US$12.06 million). This standby component was part of IDA’s support to an Immediate Response Mechanism (IRM) in Myanmar. The PDO amendment was approved by IDA Management in August 2017 to activate this component without delay. The IRM allowed reallocation of a portion of undisbursed balances of IDA- financed investment projects for recovery and reconstruction support in the event of an eligible emergency. e. Comments on Project Cost, Financing, Borrower Contribution, and Dates Project Cost. The total original project cost was estimated at US$570.5 million. The revised amount at restructuring was US$432.7 million. The actual project cost was US$384.6 million. Financing. The original IDA credit was US$400 million, of which US$303.4 was disbursed. A Trust Fund originally set at US$3 million disbursed US$196,771, while another Trust Fund grant of US$450,000 did not disburse. Borrower Contribution. The Borrower and local communities originally committed to contribute US$60 million and US$107 million, respectively, for a total of US$167 million. The two sources actually disbursed significantly less, at US$45 million and US$36 million, respectively, for a total of US$81 million, or about half of the originally committed amounts. Dates. The project was approved on September 16, 2015, and became effective on December 9, 2015. A midterm review (MTR) was conducted on May 4, 2018. After the military takeover of February 1, 2021. The World Bank suspended all disbursements in line with OP 7.30 on Dealings with De Facto Governments. The project closed on September 30, 2021, the original closing date. The project was restructured twice. The first was in August 2017, to transfer funds from the project to the Immediate Response Mechanism (IRM) that was activated for emergency recovery of disaster-affected regions by the 2015 floods and landslides. (ICR, page 8). The transferred funds came from the community contribution for the installation of distribution systems. The Government requested a reduction from US$75 million to US$35 million given the impact of the disaster, the reduced fiscal transfers from the national Page 3 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) government, and the lesser availability of local community contributions to the project. The Results Framework and disbursement allocations were adjusted accordingly, and the overall connection targets were reduced by around 8 percent. The second restructuring was in April 2020 to extend the timeline to submit audited financial reports from six months to nine months after the end of the Recipient’s fiscal year. This was done across the entire Bank portfolio in Myanmar. 3. Relevance of Objectives Rationale Country Context. Myanmar is the largest country in mainland Southeast Asia with over 2,800 miles of coastline. Despite its potential as a trading hub and supplier of natural resources, Myanmar was one of the least developed countries in Southeast Asia in 2014/15, facing conflicts, isolation, and ineffective policies. Approximately 26 to 38 percent of the population lived in absolute poverty in 2010, with a majority in rural areas dependent on agriculture. Since 2011, major political and economic reforms have improved civil liberties and removed barriers to commerce and investments. The economy grew around 8.5 percent in 2014, but challenges remained in the weak financial sector, inadequate infrastructure, and low capacity to manage external shocks. Before the 2021 coup, the government aimed to resolve ethnic conflicts and scheduled parliamentary elections for late 2015. The goal then was to ensure inclusive transformation and broad-based economic growth that involved the non-state sector and benefited the whole population while focusing on the vulnerable and marginalized. Sector Context. At the time of appraisal, Myanmar’s energy consumption was among the lowest in the world. The average consumption of 160 kilowatt-hours (kWh) per year was twenty times less than the world average. Around 70 percent of the population, and 84 percent of rural households, lacked grid electricity access. Off-grid schemes were rare, costly, and unreliable. Modern fuels, such as liquefied petroleum gas, were limited to urban areas. Traditional biomass fuels (wood and animal dung) accounted for about two-thirds of energy consumption. Electricity shortages and supply disruptions were rampant, resulting from over-reliance on hydro, investment delays, and accelerating demand. Thus, despite the increase in gas-fired generation in 2014, the country continues to experience load shedding, blackouts, and low reliability of electricity supply. The fragmentation of the sector’s institutional and regulatory framework was especially evident in rural electrification. The Ministry of Energy (MOE) oversaw national energy policy but sector development was done by the Ministry of Electric Power (MOEP), within which the Myanmar Electric Power Enterprise (MEPE) was responsible for gas-fired generation and the high-voltage power grid while acting as single buyer and market operator. MOEP controlled three government-owned utilities for medium voltage (MV) distribution: Yangon Electricity Supply Corporation (YESC) and Mandalay Electricity Supply Corporation (MESC), for Myanmar’s two most populous and urbanized regions, and the Electricity Supply Enterprise (ESE) for the rest of the country. Low voltage (LV) secondary distribution was open to the private sector. In rural areas, the Department of Rural Development (DRD) in the Ministry of Livestock, Fisheries and Rural Development (MLFRD) was responsible for off-grid electrification. In addition, each of the seven States and Page 4 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) seven Regions had their own energy ministry. The Government was transferring part of the 2015-2016 Union electrification budget to State/Region ministries as a part of broader decentralization efforts. The sector’s main challenge is to expand electricity reliable, affordable, and sustainable electricity access. This required increasing efficient generation, reducing losses, corporatizing sector enterprises, and reforming prices while protecting low-income consumers. To this end, the National Electrification Plan (NEP) was endorsed in 2015 to develop, finance, and implement the electricity access scale-up program with the target of universal access for 7.2 million households by 2030. Bank Involvement. The World Bank Group (WBG) has supported projects for reliable energy supply, energy access, renewable energy development, electricity tariff reform, renewable energy, and energy efficiency. The NEP was the second Bank-supported energy project, following WBG support for the Myanmar Electric Power Project (MEPP) in 2013. The WBG’s Joint Implementation Plan (JIP) supported public and private efforts to increase electricity access and alleviate acute electricity shortages. The JIP’s first stage (2013- 2015) focused on preparing for national electrification by increasing gas-fired power generation capacity and efficiency. Thus, the US$140 million IDA Credit for the MEPP included finance for the gas-fired power plant in Thaton, Mon State. The International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) supported MOEP to conduct Myanmar’s first competitive bidding for an Independent Power Producer, for a new 240 MW gas-fired plant in Myingyan, Mandalay Region. The WBG also mobilized and maximized the benefit of collaboration with development partners in assisting Myanmar’s energy sector. Relevance of PDOs. The PDOs were consistent with the two Country Program Frameworks (CPFs) corresponding to the entire project period from preparation to closure. The CPFs recognize the critical importance of access to well-being, income generation, poverty reduction, and improving basic health, education, security, finance, and communication services. The project ‘s PDOs were highly relevant to Objective 1.1 of the Myanmar CPF for FY15-FY19, which aimed to improve power supplies and electricity access. The PDOs remain highly relevant to the ongoing CPF for FY20-FY23, despite the World Bank's temporary suspension of disbursements due to the military takeover. The PDOs align directly with Objective 1.1 by expanding electricity access in rural areas and Objective 2.3 by developing power infrastructure and promoting renewable energy. The revised PDO also remains relevant to the current CPF for FY20-FY23, in support of Objective 3.2 to strengthen the resilience of vulnerable communities against climate and natural disaster risks. The energy authorities remain committed to achieving universal electricity access by 2030. The project contributed directly to the NEP’s goals through grid extension, off-grid electrification, and capacity building. Beyond project closure, the Ministry of Electricity and Energy has shown further efforts toward NEP Phase II. Moreover, the IDA Immediate Response Mechanism was activated in June 2016 to enhance the government's disaster response capacity. Rating Relevance TBL Rating High 4. Achievement of Objectives (Efficacy) Page 5 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) EFFICACY_TBL OBJECTIVE 1 Objective To help increase access to electricity in Myanmar. Rationale Theory of Change (TOC). Within Myanmar’s National Electrification Plan (NEP) framework, the project’s TOC (ICR, page 9) follows the established and well-known causal chain that characterizes grid and off-grid electrification projects. The TOC postulates that activities combining investments and capacity building in grid and off-grid electrification, as well as public- and private-led approaches, would contribute directly to achieving the first phase of the NEP. The hybrid, public-private approach for off-grid activities was intended to complement IFC’s efforts as part of an integrated WBG Joint Implementation Plan. (See Bank Involvement under Relevance of Objectives above.) The causal links in the TOC are logical, direct, and consistent with fairly standard upstream supply generation and downstream distribution investments in the electricity sector. The inputs and outputs are well-defined, adequate, and properly sequenced for achieving PDO 1. However, it should be clarified that despite the ICR's lack of documented results at outcome level, it is plausible that the achievements at output level will lead to achievement of the objective. There were three TOC shortcomings, however. First, the critical assumptions (i.e., affordability, proper maintenance, and adequacy of training) seem to have missed the larger and volatile political economy issues in Myanmar, which had historical precedents and, in the end, led to the suspension of disbursements. Second, the arrows simplistically moved from left to right independently for each component, whereas the technical assistance and project management activities permeated the two other components, as they should. This implies the need for more of a “spaghetti chart.” Third, the outcomes presented were in only terms of the “number of people”, thus missing the important, higher-level development outcomes that are presented in paragraph 100, Annex 4 (Efficiency Analysis), including improvements in lighting quality and quantity, pollution reduction, access to communication and refrigeration, and others. A detailed summary of the project’s outcome indicators, targets, and achievements is presented in Table 2, pages 16-17 of the ICR. Efficacy of Objective 1: Albeit mixed between grid and off-grid, the project successfully provided new or improved electricity services to nearly 4 million people overall, accounting for 69 percent of the project's revised outcome target of 5.7 million people. The challenging off-grid component performed exceptionally well, reaching over 2.1 million people, equivalent to 92% of its target. The grid component performed less well, connecting 1.7 million out of the revised 3.2 million target, or 53 percent. Additionally, Bank data indicates that between 2016 and 2020, 8.81 million people (1.8 million households) in Myanmar gained electricity access, with the project contributing approximately 44% of these connections. A significant and noteworthy achievement is that the project connected more than 25% of the households targeted by Myanmar's NEP, which aimed to connect 7.2 million households by 2030. Page 6 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) Community electricity connections (grid and off-grid) were almost completely achieved at 98 percent of the targeted 21,400 connections. More than 5,000 grid, and 15,000 off-grid community facilities were electrified. Off-grid connections totaled 15,807 community facilities compared to the original 11,400 targeted, representing a 139 percent achievement. The public lighting target was exceeded off-grid and almost achieved for grid connections, with 77,597 streetlights connected via the grid (69 percent of the 113,000 target) and 51,978 via off-grid solutions (274 percent of the 19,000 target). The project resulted in significant institutional capacity-building outcomes. The grid component strengthened procurement processes. IDA and government funding also helped to implement a new policy that reduced the burden of connection costs on households, by covering low-voltage distribution lines, in-house wiring, and meters. With improved procurement and the new connection policy in place, grid connections accelerated in 2020. The off-grid component strengthened the capacity of the Department of Rural Development (DRD) to deploy mini-grid and off-grid systems. systems. With technical assistance, DRD built its capacity to adequately evaluate proposals and conduct quality assurance checks. The project partnered with the private sector to establish 53 Post Warranty Maintenance Service Centers that provide long-term after-sales services for users of solar home systems, serving 5,299 project villages in 144 townships. The centers have provided more than 10,500 repair services. After the military takeover, however, only 14 centers remain open. The service centers have successfully provided more than 10,500 repair services. Finally, the project also built the capacity of local private mini-grid developers, resulting in positive responses to a survey conducted by the ICR team. Overall, with around two-thirds of grid targets achieved and off-grid targets significantly exceeded, and given the significant institutional capacity-building outcomes, the project’s efficacy in achieving Objective 1 is rated Substantial with shortcomings associated with the grid connection activities. Rating Substantial OBJECTIVE 2 Objective To provide an immediate and effective response in case of an eligible crisis or emergency. Rationale Following the 2015 floods and landslides, the United Nations Office for Project Services (UNOPS) supported the procurement and distribution of goods, which were completed in September 2018. Additionally, IRM funding from five IDA projects totaled US$54 million, of which US$13.755 million came from the National Electrification Project. The IRM funds were used for critical machinery and equipment, production inputs, and other required goods. Emergency Operation Centers were established with improved resources including speed boats, vehicles, and baily bridges used to support emergency response during the 2018 floods. IRM funds also enabled the procurement of road repair machinery, water pumps, and weather forecasting and meteorological equipment, which were used in more recvent disasters. The enhanced disaster risk Page 7 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) management (DRM) capacity was an important contribution, particularly the increased collaboration of Government officials at union, state, and regional levels. The project’s efficacy in achieving Objective 2 is rated substantial. Rating Substantial OVERALL EFF TBL OBJ_TBL OVERALL EFFICACY Rationale The project’s efficacy ratings in achieving Objectives 1 and 2 are Substantial, with shortcomings related to the partial achievement of around two-thirds of the targets for the grid components while off-grid component targets were more than achieved, and Substantial, respectively. Overall, the project’s efficacy is rated Substantial, with moderate shortcomings. Overall Efficacy Rating Substantial 5. Efficiency Economic Analysis The ICR (Annex 4 on Efficiency) indicates that the calculation of the NPV and EIRR followed the same methodology and assumptions as was used in the PAD at appraisal using a 10 percent discount rate; calculations were also made using 6 percent in line with more recent Bank’s economic analysis guidelines. The latter figures are presented below. Both the PAD and ICR calculated the NPVs and EIRRs for the grid, mini-grid and off-grid components separately. For the grid component, which utilized the majority of the project’s funds, the EIRR is 23.4 percent. This excludes the benefits of better-quality lighting, the charging of mobile devices, and broader environmental benefits. For the mini-grid component, the EIRR is at a relatively low 11.3 percent, which is explained by a consumption rate that lagged behind the estimated demand (reaching at best about 66 percent of projections), and possible overdesign of the investments that undermined the component’s economic viability. The EIRR is a high 52.3 percent for the off-grid solar component, without including the benefits of solarizing public institutions and the extended life cycle of the off-grid products due to improved customer services. Except for the mini-grid component, these EIRRs compare well with the PAD estimates at 25.4 percent, 17 percent, and 62.2 percent, respectively. Page 8 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) Administrative and Implementation Efficiency The project closed on the original September 2021 closing date, due to the military takeover of February 2021, which led to the suspension of disbursements. There were measures taken, however, to address delays that were encountered. For example, there were delays in the delivery of concrete poles and transformers. This was to be addressed by hiring local manufacturers and installers to build the grid network. Several technical workshops were also organized for private companies to improve the implementation efficiency and the quality of the key parts of grid and mini-grid development, such as concrete poles and transformers. For the off-grid and mini-grid components, the call for proposals procedure shifted from individual to batch review of individual proposals, thus improving the efficiency of the proposal review process. The Government’s off-grid solar tendering process was also streamlined to enhance the efficiency of deploying off-grid solar products Efficiency Rating Substantial a. If available, enter the Economic Rate of Return (ERR) and/or Financial Rate of Return (FRR) at appraisal and the re-estimated value at evaluation: Rate Available? Point value (%) *Coverage/Scope (%) 60.00 Appraisal  25.40  Not Applicable 60.00 ICR Estimate  23.40  Not Applicable * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome The relevance of the project’s objectives is high. The project’s efficacy in achieving the grid and off-grid development objectives is substantial, with moderate shortcomings in the achievement of the grid components. The project’s efficiency is rated substantial. Based on these ratings, and taking into account the moderate shortcomings in efficacy, the overall project outcome is rated moderately satisfactory. The project’s ratings for development outcome (DO) and implementation progress (IP) were either Satisfactory or Moderately Satisfactory throughout its implementation history. a. Outcome Rating Moderately Satisfactory Page 9 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) 7. Risk to Development Outcome The military takeover on February 1, 2021 prevented the completion of the final year of project implementation. Given the unstable situation in the country, it is uncertain how the project's achievements and activities can be sustained or how they will progress further. Still, the project's efforts in strengthening institutions have laid a solid foundation for future Bank support to energy access in Myanmar, as evidenced by the qualitative and quantitative results presented under the Efficacy assessment above. The project implemented measures to mitigate risks to development outcomes, such as the establishment of Post Warranty Maintenance Service Centers and capacity building for private sector energy service providers. However, in light of the fragile situation in the country, there are remaining risks, including potential challenges for authorities to continue investing in maintenance services, and for the private sector to sustain their energy service businesses (mini grids and solar home systems). 8. Assessment of Bank Performance a. Quality-at-Entry The project provided strong support for the government's priorities and commitment to achieve universal electricity access by 2030. The technical design and activities were enhanced by thorough analytical work, including assistance to the government in developing the National Electrification Geospatial Plan and Investment Prospectus, as well as conducting Multi-Tier Framework (MTF) surveys. These efforts provided a solid technical foundation for Bank engagement and the Poverty and Social Impact Analysis (PSIA). Extensive consultations were held with national, regional, and local governments, the local and international private sectors, and multilateral and bilateral development partners. These consultations resulted in a strong government commitment to adopt the national electrification program (NEP) aiming for universal access by 2030. All multilateral and bilateral development partners aligned their resources with the shared objective outlined in the NEP. Quality-at-Entry Rating Satisfactory b. Quality of supervision During implementation, the Bank team was led by almost the same co-Task Team Leaders (TTLs), thus ensuring stability. One of the TTLs who prepared the project remained in charge for the first two years of implementation, maintaining continuity. Specialist consultants who were involved in project preparation were also involved in implementation, contributing to this continuity. The Bank brought together a multidisciplinary team of experts, including financial management and procurement specialists, who closely collaborated with counterparts. The team promptly addressed the Government's requests and received support from the Bank's technical and fiduciary and safeguards teams, who made adjustments and Page 10 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) provided guidance to implementing agencies. The team adapted to the client's evolving needs and revised indicators accordingly. Regular technical missions and supervision missions were conducted approximately every six months to assess progress. The ISRs provided comprehensive information, and the supervision team offered clear recommendations and debriefings. The client's validation of the findings and recommendations was recorded in official aide-memoires. The Bank team also provided a Reimbursable Advisory Service (RAS) for the supervision and monitoring of a €30 million Italian Soft Loan to the Myanmar government for off-grid electrification. This included support in implementing environmental and social safeguards, ensuring adequacy of fiduciary agreements, and evaluating the project. Quality of Supervision Rating Satisfactory Overall Bank Performance Rating Satisfactory 9. M&E Design, Implementation, & Utilization a. M&E Design The design of the M&E framework was appropriate and effective. The PDO was clearly defined. Indicators were developed to monitor outcomes, such as the number of people and villages benefiting from new or improved electricity services. The selected indicators were directly relevant to monitoring project activities, and adequate for signaling and assessing PDO achievement. They were integrated into the government's M&E system to track the progress of universal access as outlined in the NEP. The MOEE and DRD reported results and progress semi-annually, which were verified by the Bank team during implementation support missions. For off-grid connections, data from private mini grid developers and off-grid solar companies provided evidence on the progress achieved. An independent verification agency validated the results for off-grid connections, including mini grids and standalone solar products. The data on main grid connections were corroborated by YESC, MESC and ESE. Moreover, a phone survey by a reputable local firm in 2022 quantified the project's impact. b. M&E Implementation The efficiency of M&E implementation was enhanced by using recent technology such as remote sensing and geospatial data, complemented by field verification surveys. Consultants specialized in GIS and data collection helped both PMOs to increase their M&E capacity and provided additional support. They have enabled PMO staff to combine traditional project M&E methods with a real-time GIS monitoring platform. An innovative MIS has been developed to oversee the installation, verification, operation, and maintenance of solar PV systems, as well as payment authorization. Field staff, including installers, IVAs, and DRD union and township officers, have been trained to collect data using tablet-based applications. This data is then transmitted to the PMO's data center. A customer database has also been established, recording customer information, system details, GPS coordinates, supplier data, and maintenance Page 11 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) records. When a solar product is installed, the installer can scan the barcode, and the information is automatically sent to the server and updated on the monitoring dashboard. The M&E system also monitored women's satisfaction, participation in decision-making (e.g., light bulb placement), system maintenance, and minority representation among the project's beneficiaries. c. M&E Utilization The M&E system provided valuable information that improved technical specifications, product design, and implementation plans for off-grid energy solutions. It also helped the government prioritize potential sites and villages for electrification. End-user feedback collected through the M&E system informed the government about the technical specifications and design of solar products and mini grids for public facilities such as schools, rural clinics, and public lighting. The Bank team and PMO used the indicators to monitor progress and make necessary adjustments to implementation plans. For example, when the M&E indicators identified delays in the grid component due to insufficient production capacity of local suppliers, the team was able to propose multiple solutions: (i) considering international suppliers; (ii) exploring alternative technologies like spun pole; (iii) reducing production time requirements while maintaining technical standards and extending the guarantee period in bids; and (iv) effectively communicating market growth potential and incentivizing suppliers to quickly increase production. M&E Quality Rating High 10. Other Issues a. Safeguards Environmental. The project was assigned an Environmental Category B (Partial Assessment). The project's environmental risk rating was initially Substantial, based on the nationwide scope of the project and the inadequate capacity of implementation agencies in safeguard implementation, monitoring, and reporting. However, after the military takeover in February 2021, the rating was raised to High due to uncertainties surrounding environmental risk management, supervision, and monitoring during implementation. There were also concerns about the government's capacity and commitment to implementing environmental safeguards, as well as the Bank’s limited communication with the government and project beneficiaries. Despite these challenges, both PMOs demonstrated commitment and made strong efforts to fulfill the safeguard requirements. They regularly submitted progress reports that included sections on safeguard management, and provided frequent training sessions to township engineers, the community, and the contractors. Social. The project triggered three social safeguards policies: Environmental & Social Assessment OP/BP 4.01, Indigenous People OP/BP 4.10, and Involuntary Resettlement OP/BP 4.12. The last Bank supervision mission in November 2020 confirmed that the project had a high social risk level and a moderately satisfactory performance rating. However, since the military takeover in February 2021, the Bank team has been unable to access on-the-ground information about social safeguards activities. The PMOs (Grid and Off-grid) have demonstrated their commitment to managing the project’s social risks. The MOEE PMO has utilized the Kobo Toolbox application to screen and monitor safeguards activities and has provided training Page 12 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) to field-level engineers and contractors. The DRD PMO's safeguards team has also exhibited strong commitment to managing social risks, particularly regarding ethnic inclusion, land ownership transformation, community health and safety, Grievance Redress Mechanism, and community consultations. Notably, the DRD safeguards team has effectively coordinated various stakeholder departments at both the Union and State/Regional government levels to advance the land ownership transformation process. b. Fiduciary Compliance During the last Bank mission of November 2020, the financial management (FM) performance was rated Moderately Satisfactory. The FM staff from both PMOs improved their skills and knowledge, particularly in preparing their project's annual work plans and budgets. Previously, these reports were submitted late, but during the 2020-2021 fiscal year, the PMOs submitted them on time. Payments to contractors and suppliers were handled correctly and efficiently. However, although MOEE agreed to conduct physical asset verifications once a year, no verifications took place throughout the project. The same applies to internal audits and inspections, as none were carried out for the project implementation activities. Procurement. Despite the initial implementation delay, the PMOs effectively managed procurement throughout the project by diligently overseeing contract management, maintaining effective communication with contractors and suppliers, and ensuring steady progress. These efforts persisted despite challenges posed by COVID-19. The November 2020 Bank mission rated procurement performance as satisfactory for both on-grid and off-grid components. c. Unintended impacts (Positive or Negative) --- d. Other --- 11. Ratings Reason for Ratings ICR IEG Disagreements/Comment Moderately Outcome Moderately Satisfactory Satisfactory Bank Performance Satisfactory Satisfactory Quality of M&E High High Quality of ICR --- Substantial 12. Lessons Page 13 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) The project’s implementation experience generated several lessons, which are summarized below: The IDA Immediate Response Mechanism (IRM) deployment required capacity building for the government and task team, and IRM procedures should be improved for future projects. The GoM and task teams needed training and preparation support for IRM activation and implementation, especially in procurement, safeguards, and fiduciary matters. World Bank procedures limited the IRM to a specific disaster, thus hindering its use for broader disaster prevention and preparedness. In fragile contexts like Myanmar, IDA should consider project-specific Crisis and Emergency Risk Communication (CERC). Improving the procedures would enable more flexible deployment of IRMs for enhanced disaster prevention and preparedness. Making grid connection fees and internal wiring more affordable increased the adoption of grid connection. Households and Village Electrification Committee (VECs) bear the costs of low- voltage infrastructure and household connections. With IDA support, alleviating some of the burden on VECs to secure their own financing could expand the main grid's reach into lower-income communities. Connection costs remained a significant barrier for low-income households even in electrified villages. Establishing mechanisms to support internal wiring and finance connection costs over time (e.g., grid connection subsidy) accelerated the adoption of main grid electricity by lower- income households and SMEs. To ensure successful mini grid development at scale, a holistic approach is crucial, including a suitable business model, enabling environment, planning, finance, Productive Use of Energy (PUE), and government and developer capacity building. Under NEP, the private sector selected sites for development, which proved attractive for private sector mini grid developers. The project focused on creating an enabling environment and regulatory framework to attract private investors. It emphasized the importance of productive uses of electricity for mini grid economic viability. Future mini grid programs should explicitly support enabling environments and promote financial viability. Moreover, strengthening local manufacturing capacity for key materials in grid extension, such as electric poles and transformers, improved the sustainability of grid expansion and reduced costs. International consultants and workshops helped local manufacturers learn global standards and efficient operation modalities. Combining public and private-led approaches involving grid, mini grid, and off-grid technologies can effectively accelerate energy access in fragile countries. Myanmar's experience shows that a hybrid approach requires well-defined scope, close coordination between private and public entities, and coordination between different technologies. Leveraging all three technologies and public sector-led approaches can target remote, less accessible unelectrified villages in border or fragile states and areas with high poverty incidence and low electrification rates where the private sector is less interested. Collaboration among the World Bank, IFC, and MIGA enhances the success of energy projects. The Joint Implementation Plan facilitated comprehensive electricity tariff reform and private sector involvement in power generation. Sharing information and resources between the WB and IFC led to innovative off-grid solutions. MIGA's risk mitigation increased sector attractiveness to foreign investors, contributing to universal electricity access in Myanmar. Close partnership and coordination among donors under the NEP are critical for achieving scalable results. Partners supporting energy access in Myanmar include the Asian Development Bank, Government of Italy, GIZ, KfW, AFD, JICA, and GEAPP. Design and implementation of future Page 14 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) energy access projects should be coordinate among these partners. NEP played a pivotal role in supporting this coordination, despite and limited resources. More broadly, the project identified technical-level best practices and lessons learned that can benefit the design of future energy access projects in Myanmar. These include early onboarding of an independent verification agent, designing calls for proposals to balance speed and local private sector growth, capacity building for participants and evaluators, updating tripartite agreements for effective governance of mini grids, and improving modular mini grid designs. The testing of public and private sector approaches for off-grid solar required coordination, public-private partnerships, commitment to quality standards, and consideration of social inclusion aspects, which should be carried forward into future projects. 13. Assessment Recommended? No 14. Comments on Quality of ICR The well-prepared ICR was clear, transparent, and strongly based on quantitative evidence without neglecting qualitative aspects. It was drafted with a clear focus on achieving a high degree of accountability. It adhered closely to the project’s theory of change (which had some minor weaknesses) and was therefore consistently results-oriented. The ICR was also consistent with OPCS guidelines. There were some shortcomings, however. It is too long at 36 pages for the main text, and repetitive in some parts. It does not explain Moderately Satisfactory rating for outcome although it assigns ratings of High for relevance and Substantial for both Efficacy and Efficiency (the implied reason is the mixed performance and shortcomings in meeting grid connection targets). Rather, it applies what seems to be an incorrect method of obtaining an average of the efficacy sub-ratings for the three components, which should be evaluated each on their own merit. While taking into account these shortcomings, the overall quality of the ICR is rated Substantial. a. Quality of ICR Rating Substantial Page 15 of 16 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Myanmar National Electrification Project (P152936) Page 16 of 16