NATIONAL ELECTRICITY DIGITALIZATION AND ACCESS OPERATION (NEDA) (P176776) THE REPUBLIC OF CÔTE D'IVOIRE PROGRAM-FOR-RESULTS FIDUCIARY SYSTEM ASSESSMENT November 28, 2022 1. The Fiduciary Systems Assessment (FSA) concludes that the Program's fiduciary systems meet OP/BP 9.00 requirements; the funds will focus on supporting achievement of the Program’s objectives and there is a reasonable assurance that financing proceeds will be used for intended purposes with due regard to economy, effectiveness, efficiency, transparency, and accountability. 2. The FSA reviewed the capacity of the GoCI and the implementing entity CI-Energies for its ability to: (a) record, control and manage all Program resources and produce timely, relevant, and reliable information; (b) follow procurement rules and procedures; and (c) ensure adequate implementation arrangements and risk mitigation. The FSA focused on the quality of legal and institutional framework for Public Financial Management (PFM), Procurement, Governance and Anticorruption (GAC) applicable to the Program, and the fiduciary capacity of implementing entities for budget preparation, budget execution, internal controls, and external Audit. 3. The FSA was conducted through a methodical review of systems and practices involving the review of several analytical works mainly: (i) Public Expenditure and Financial Accountability (PEFA) Assessment; (ii) Public Investment Management Assessment (PIMA); (iii) CI-Energies annual and audit reports; and (iv) National Public Procurement Regulatory Agency (ANRMP), Court of Accounts and General Inspectorate of Finance (IGF) annual reports. The team also reviewed the lessons learned in the implementation of Bank-financed operations in relevant sectors. Several consultations of the FSA had been conducted. The fiduciary assessment virtual mission was conducted in January 2022 with the objective to discuss with key stakeholders. The findings of the mission were presented to stakeholders. 4. The assessment determined that the Côte d'Ivoire PFM and procurement country systems are acceptable to the Bank and meet the requirements for the implementation of a PforR . Côte d'Ivoire PFM has a strong legal and institutional framework, effective PFM planning and budget system and a strong internal control system with clear and relevant segregations of duties at each step of the budget execution. Budget execution and internal control systems are computerized and inter-linked with procurement and treasury systems. There is an adequate legal and institutional framework for fraud and anticorruption in line with international standards. Côte d'Ivoire has also adopted West Africa Economic and Monetary Union (WAEMU) PFM, and procurement directives whose implementation is ongoing1. 5. Meanwhile, there are opportunities to strengthen country systems for internal and external audit, procurement, and anticorruption. The internal audit function needs to adopt international standards and increase the staff capacity in terms of number and skills with an ongoing related reform. External auditors do not conduct performance audits and need additional resources. Procurement timeliness could be improved by streamlining processes, and enforcement of sanctions could be enhanced. Finally, the level of enforcement of anticorruption mechanisms could be strengthened. 6. At the CI-Energies level, the internal audit function is acceptable to the Bank, and prior issues with cash management have been adequately addressed. However, the follow-up and implementation of recommendations from previous audits remains a primary challenge. Two external auditors are appointed by the General Directorate of State Participations (DGPE) of the Ministry of Budget. The current two auditing firms are acceptable to the World Bank. 7. The Fiduciary Risk for the operation is assessed as Substantial given weaknesses identified in FM arrangements, including internal controls, accounting, financial reporting, state-owned enterprise’s governance, and the procurement of goods and works. 8. The FSA identified key fiduciary risks that may affect the Program's development outcomes such as : (i) lack of capacities and unclear role which will can affect the program execution/implementation 1 2017 Public Expenditure and Financial Accountability (PEFA) Assessment for Côte d’Ivoire. (ii) financial management risks including inadequate budget discipline, budget planning risk due to the sectoral readjustments and subsidies for SOEs, weaknesses in the reporting system due on the insufficient integration of the ERP; (iii) procures risks including inadequate and unclear procurement manual, staffs constraints and capacities, weaknesses in documents archiving and delays in the evaluation process; and (iii) the ineffective/no-operationalization of the FAC mechanism including lack of complaint handling mechanism at the CI-ENERGIES level. 9. The FSA has identified a series of mitigation measures that will adequately address the risks identified once put in place : (i) elaboration and publication of quarterly budget execution including commitment plan; (ii) elaborate the Program Operational Manual under ToRs acceptable to the Bank; (iii) Finalize and operationalize the ERP which will cover financial management, reporting, audit, procurement, archiving and monitoring and performance evaluation ( Program DLI); (iii) update the internal audit plan and conduct two submit to the Bank, the internal audit report covering the mission findings and the recommendations follow up; (iv) conduct the audit of the CI-ENERGIES and the Program annual financial statements by independent private auditors on terms of reference acceptable to IDA. This audit will also cover performance audit of the procurement activities. 10. There is an adequate legal, regulatory, and institutional framework in Côte d'Ivoire to deal with fraud and corruption. These arrangements comprise several effective institutions playing complementary roles namely the Court of Auditors, the Inspection General of Finance (IGF), the National Public Procurement Regulatory Agency (ANRMP), The CI-ENERGIES Internal audit Directorate, and the High Authority for Good Governance (HABG). HABG will collect—with support from the abovementioned institutions—and report to the World Bank allegations occurring under the Program through the annual progress reports during Program implementation. The reporting format will include the following: (a) location and date of the complaint; (b) allegation’s description; (c) description of progress in investigation; and (d) investigation outcome. 11. The Program is not expected to procure any large contracts valued at or above the OPRC thresholds for a "Substantial" risk rating i.e., US$75 million for works, US$50 million for goods and non- consulting services, and US$20 million for consultant services. The implementing agencies will report to the World Bank if any large contracts appear during Program implementation. The World Bank will also monitor fiduciary systems and contract management reports to identify any large value contracts throughout the Program implementation. Review of Country Public Financial Management Cycle Overview of the Country PFM Cycle 12. In past years, Cote d'Ivoire had undertaken major reforms in the management of public finances with the implementation of the WAEMU's harmonized PFM framework. On the Budget side, these reforms imply the shift from line-item-based budgeting to a logic of performance-based budgeting with a multiannual perspective. Program-based budgeting became effective in Cote d’Ivoire on January 1, 2020. In 2021, the GoCI pursued implementing the budget program with the overall improvement of the budget program tolls and stakeholders' capacities. The 2022 national budget approved with 150 programs should be the consolidation of the implementation of the budget program which translates mainly into (i) Results-based management (GAR); (ii) Spending programming based on resources that can be mobilized in short to medium term (3 years); and (iii) Establishing a framework for assessing public policy. 13. This reform aims at greater efficiency in the management of public finances through, among other things, the focus on performance, rationalization, and optimization of public expenditure, securing public investment resources, strengthening budgetary discipline, control and transparency, and greater accountability of stakeholders. To reinforce the impact of the reform, a Unit in charge of fiscal reform was created to oversee the budgetary performance permanently. In 2019, the GoCI drafted the Fiscal Risk Declaration (DRB) which is the document compiling the risks facing the public finance, mainly in resource mobilization and expenditures. DRB 2020-2022, DRB 2021-2023 and DRB 2022-2024 were adopted by the Council of Ministers and served as an annex to 2020, 2021 and 2022 finance laws 14. Multi-year programming documents are elaborated and properly integrated in the annual budget. A National Development Plan (NDP) was prepared for 2016-2020. The new NDP 2021-2025 was adopted by the GoCI and articulated under six pillars. The budget 2021 was elaborated under the post COVID-19 recovery plan and the multi-year expenditure programming documents (Documents de Programmation Pluriannuelle des Dépenses - DPPD) 2021-2023 was elaborated and approved. 15. The PAGDS (Enhancing Government Effectiveness for Improved Public Services Project), a world bank-financed project has strengthened the PFM achievements : (a) the implementation of the performance-based budgeting reform; (b) reducing the average length of the procurement process until the contract is awarded (from 198 days to 93 days); (c) the deployment of "AGEROUTEMARCHE", an online tool to monitor the execution of road works contracts (assignment, beneficiary, progress) and performance (quality, cost and deadlines) with a classification of companies according to their performance. As a result, significant progress is made in the production of annual performance reports for all departments and making them available to the public within 6 months of the end of the fiscal year. The Directorate for Budget and Finance (DGBF) has regularly prepared quarterly budget implementation reports and has developed a new performance-based budgeting system (SIGOBE) that will facilitate the production of annual performance reports for each line ministry. The additional funding from PAGDS will complement technical assistance from the International Monetary Fund (IMF) and its Technical Assistance Unit (AFRITAC) on the RCMP; the African Development Bank's (AfDB) Public Financial Management Improvement Project; and support for PFM controls by the European Union (EU). 16. However, budgetary discipline risk remains significant. Despite the PEFA 2017 (report issued in 2019) analysis over the period mentioned above 2014-2016, which shows a robust institutional system supported by efficient IT tools and a firm political will to ensure good overall budgetary discipline; the system of control and verification posteriori of public companies has weaknesses. The management of public services, beyond the obligation to ensure their continuity, the management of public services can be strengthened at the level of strategic sectoral management and own instruments (particularly the tools of results-based management promoted in the framework of the PAGDS project). However, compliance with budgetary discipline could also be weakened by the persistence of certain structural deficiencies, such as, those identified in the internal audit function and the consideration of risks in the missions of ministries' inspections. External control by the Court of Auditors (CC) is also relatively small. 17. The supervision of state-owned enterprises, although recently strengthened, is still insufficient. The real, unassessed risks they pose to the budget have not yet been analyzed or materialized. In general, the assessment of budgetary risks is not a familiar or common practice either at the global or sectoral level. The public procurement system and procedures in Côte d'Ivoire 18. The year 1999 marked the turning point and the beginning of public procurement reform in Côte d'Ivoire. In 2004, World Bank support for procurement reforms began in Côte d'Ivoire to prepare the latest Evaluation Report on the National Public Procurement System (CPAR). However, it was not until February 2, 2005, that a new public procurement code was adopted, subject to Decree No. 2005- 110 of February 24, 2005. This new Code is part of reforming the public procurement system, the objectives of which are to seek greater efficiency in public procurement, establish a transparency framework and align with international standards. In 2006, to remedy the weaknesses observed both in terms of control and regulation of the public procurement system and public service delegations of the Member States of the West African Economic and Monetary Union (WAEMU), Community Regulations were put in place by the adoption of two directives: • Directive No. 04/2005/CM/UEMOA on procedures for the award, execution and settlement of public contracts and public service delegation agreements in the West African Economic and Monetary Union; • Directive No. 5/2005/CM/UEMOA of December 9, 2005, on the control and regulation of public procurement and public service delegations in the West African Economic and Monetary Union. 19. It proved necessary to incorporate the provisions of these directives into the national regulations of WAEMU member States. Thus, the harmonization of the provisions of the Public Procurement Code with Community Regulations motivated the second reform, which aims to strengthen the transparency of public procurement, the effectiveness of the fight against corruption, and fraud and guarantee effective remedies. 20. On August 6, 2009, a new Public Procurement Code, the subject of Decree No. 2009-259 of August 6, 2009, was adopted. In applying the Directive No. 5/2005/CM/UEMOA of the West African Economic and Monetary Union (WAEMU), the new Public Procurement Code advocates for institutional unbundling of control functions and those of regulation of public procurement and public service delegations. Suppose the former is the responsibility of the Directorate of Public Procurement (DMP) which is today the General Directorate of Public Procurement (DGMP). In that case, the regulatory functions are devolved to the National Authority for the Regulation of Public Procurement (ANRMP) which was created the same day, in the Council of Ministers, by Decree No. 2009-260 of August 6, 2009. 21. Under the financial resources of the National Public Procurement Regulatory Authority, two provisions deserve to be highlighted because of their direct impact on the public procurement system. These are: • The regulatory fee set at 0.05% of the amount excluding taxes on the approved contracts. The payment of the fee entitles the ANRMP to issue a non-royalty discharge, which constitutes a mandatory document for a company's participation in a public order. • The costs of registering appeals in accordance with the procedures specified by the related texts/manuals. However, although provided for in a draft decree, these costs are not yet effective and constitute fewer resources in the institution's budget. 22. Order No. 299 MEF/DGBF/DMP of May 27, 2010, specifies the attributions, organization and functioning of the Directorate General of Public Procurement regarding Decree 2009-259 of August 6, 2009, on the Public Procurement Code. Thus, the Directorate General of Public Procurement is now responsible for controlling procurement, the regulation being devolved to the National Regulatory Authority for Public Procurement. 23. Still to improve the context of public procurement in Côte d'Ivoire, a new public procurement code was adopted on July 24, 2019, through Ordinance No. 2019-679. This new Public Procurement Code responds to the need to address the weaknesses of the public procurement system, comply with Community Directives, consider international standards, and strengthen the system's transparency and efficiency through multiple innovations. 24. Financial Management staffing structure. CI-Energies Financial Management is entrusted to the Central Directorate of Financial Management (DCGF). This entity has three directorates (Finance and Accounting, Economic and Financial Studies and Finance and Management Control). In addition, there are three specialized committees of the Board of Directors including (i) the Audit and Risk Management Committee composed of 3 members2; (ii) the Strategy and Investment Committee also composed of 3 members3. 25. The Directorate of Finance and Accounting (DFA) has 21 staff and has recognized experience in managing projects financed by international and regional donors since 2011. For the PforR project, the Directorate of Finance and Accounting (DFA) of CI-Energies, responsible for the monitoring and accounting of donors-financed projects, is headed by a qualified and experienced Manager. This Division under the overall oversight of the Director for the DFA will be strengthened through capacity building activities during the project life. 26. Regarding procurement, CI-Energies has an Acquisitions and Logistics Department (DAL) with an Acquisitions Department which manages the procurement process (see organizational chart in the annex). The establishment of Procurement Units (CPMs) in state-owned companies is not yet effective. However, even if CI-Energies institutional organization for procurement does not follow exactly those of the CPMs, the acquisitions department carries out the task in accordance with the Public Procurement Code and its implementing decrees. The Acquisitions Department is composed of sixteen (16) members including one (1) Head of Department and Senior Acquisition Executives (CPAs), Acquisition Executives (CA) and Technical Acquisition Officers (ATAs). Its mission is to identify the company's needs, proceed to the development and continuous updating of the Procurement Plan and general procurement notices, develop tender documents, launch procedures until contracting, and monitor the execution of contracts in relation to the Contract 2 the Chair of the Committee, the representative of the Ministry of Budget, the Representative of the Ministry of Mines, Petroleum, and Energy and the representative of the Ministry of Economy and Finance 3 The Representative of the Presidency of the Republic, the Representative of the Prime Minister and the representative of the Ministry of the Interior, President of this Committee Administrators (CA). The archiving of files and the monitoring of performance indicators are also the responsibility of the service. Budget planning and investment strategy 27. Cote d'Ivoire has put in place a reliable budget preparation process as shown by the 2017 PEFA. The PEFA report covering 2016, 2017 and 2018 revealed that Cote d'Ivoire’s overall performance in terms of budget execution rate was deemed satisfactory. This trend was confirmed by the budget performance of years 2019 and 2020. The revised 2016 budget was estimated at XOF 6,259.6 billion (variance: +1.5%) compared to the initial budget of XOF 6,165.8 billion. The revised 2017 budget, estimated at XOF 7,116.6 billion, showing a positive variance of 10.4% when compared to the initial budget of XOF 6,447.6 billion, was adopted by the Parliament on December 7, 2017. The revised 2018 budget, estimated at XOF 6,931.6 billion (variance: +2.6%) when compared to the initial budget of XOF 6,756.3 billion. The revised 2019 budget is estimated at XOF 7,726.5 billion (+5.3%) compared to the initial budget of XOF 7,334.3 billion. The revised 2020 budget is estimated at XOF 9,093.6 billion (8.27%) compared to the initial budget of XOF 8,398.9 billion. Budget variance Table: 2016 2017 2018 2019 2020 Initial Budget (billion XOF) 6,158.8 6,447.6 6,756.3 7,334.3 8,398.9 Revised Budget (billion XOF) 6,259.6 7,116.6 6,931.6 7,726.5 9,093.6 Variance % +1.5% +10.4 +2.6% +5.3% +8.27% Source: MEF report 28. Overall, the budget execution rates for revenues and expenditures have been less than 95% of the total budgeted expenditure (revised budget) over the past three years (2016, 2017 and 2018) and over 101.1% to 104.8% for 2019 and 2020: Budget Execution Table: 2016 2017 2018 2019 2020 Expenditures (%) 93.8 94.2 93.7 103.9 102.2 Revenues (%) 92.8 91.9 92.2 104.8 101.1 Sources: MEF Report The budget execution rates have been respectively: • Expenditure : 93.8% (2016) ; 94.2% (2017); 93.7% (2018); 103.9% (2019) and 102.2% (2020). • Revenues : 92.8% (2016) ; 91.9% (2017) ; 92.2% (2018) ; 104.8% (2019) and 101.1% (2020). The execution rate of the 2021 budget at the end of June was about 52.3% (XOF 4,511.5 billion out of a total annual budget of XOF 8,621.1), according to the TOFE and the report on budget execution at the end of June 2021 published on the website of Ministry of budget. 29. At the Ministry of Energy level, the budget performance for the last three years was acceptable as shown in the table below: Table 3: Sectorial Ministry of Energy Budget Performance 2018 2019 2020 Initial Budget 213.781 382 990 336 088 Revised Budget 213.781 319 409 349 890 % Variance 100% 16,60% % Budget Execution 213.781 131 011 271 697 % Execution 100% 41,01% 77,7% 30. The medium-term expenditure framework and budget for the energy sector has improved but is still moderate. The MoE Medium-Term Expenditure Frameworks are aligned globally with sectoral strategies. The low implementation rate of the investment budget (59%) requires a thorough analysis of the causes in the mid-term. At the end of December 2020, the budget recorded an overall implementation rate of 70% but a significant disparity between the Operating Budget (95%) and the Investment Budget (59%). 31. To avoid this budget execution nd resources allocations, the GoCI will Share with the World Bank n+1 budget document (Budget program, DPPD) during the year N third quarter for technical advice. This measure will be acted I the POM and record in PAP. Table 4: Overall budget implementation rate Source : CI-Energies Activity Report 2020 32. In terms of budget implementation, actual expenditure is tracked and compared to the budget with reasonable frequency. The deviations noted are analyzed and explanations are required for significant anomalies and variations. In addition, the Directorate of Budget and Management Control prepares a quarterly budget implementation report, which compares budgets and financial achievements, and comments and gap analyses are produced. Similarly, the Financial Monitoring Reports produced quarterly by the projects’ accounts make it possible to compare the overall budget with each quarter's cumulative payments. 33. The budgeting system is operational. Annual budgets are prepared and submitted to the board of directors. The dedicated FM team will prepare a consolidated AWPB for implementing project activities considering the operation's components for this operation. The work plan and budgets will identify the activities to be undertaken and the role of respective parties involved in the implementation. 34. The financial projections of Côte d'Ivoire's electricity sector are promising but carry risks of budget deficits. Five companies hold 74% of total debt and CI-Energies has the highest amount: CI-Energies (25%), FER (16%), PETROCI (13%), ANSUT (11%), PAA (8%). The financial projections are updated annually based on various technical and financial assumptions (growth rate of domestic demand, tariff adjustment rates, overall yield, parity between the USD dollar and the CFA franc, the production plan and export sales commitments). For the period 2021-2030, the last update of the financial flows of the electricity sector was carried out in August 2021. Table 5: Projection of overall performance: 35. The indebtedness of public enterprises is quantified and internal reports from the administration indicate the evolution of this indebtedness, but these reports do not assess the budgetary risk for the State that this could entail. Nevertheless, the risks of over-indebtedness are real because maintaining the financial equilibrium of the sector requires financial measures such as the ones below mostly due to the electricity supply shortages in early 2021: ▪ the State's contribution to the tune of FCFA 20 billion for the payment of the cost of the Heavy Vacuum Oil (HVO) is estimated at FCFA 32 billion over the year 2021. ▪ the issuance of securities by the State for the payment of arrears of the invoices of state- owned companies at the end of 2021 of FCFA 13.4 billion (these advances to the State could be reimbursed gradually by the state companies from their future budget allocation). ▪ State support for costs related to the security of electricity supply estimated at FCFA 10 billion in 2022. ▪ State support for the issuance of payment guarantees for implementing these projects. ▪ the securitization of export receivables in the 2022 fiscal year (FCFA 43 billion). CI-Energies should review whether further debt reduction is needed to ensure financial balance following the 2019 restructuring of its debt supported by an IDA guarantee. 36. The budget lines to be financed were identified based on how they will contribute to the achievement of the DLIs. The GoCI will provide resources for this program through National Budget under the budget line related to PEPT,PRONEX. The new budget lines related to PDAT, and TA will be related in 2023 budget. The prevision for the coming is presented below: (To be completed by technical assessment) Budget line/code 2023 ($US) 2024 ($US) 2025 ($US) 2026 ($US) 2027 TOTAL 90043500001 10 13 20 20 10 73 78043500047 22 38 51 60 10 181 New budget line 9 12 15 30 0 66 New budget line 6 5 3 3 3 20 Total 51 112 127 110 30 340 Source: 2022 National Budget / 1$=550 XOF 37. There is a process between the implementing agency (CI-Energies) and the Ministry of Budget to negotiate the annual budget. The components and activities determine the overall cost of the program. The income and expenditure of the program are budgeted in sufficient detail and traceable form to be a useful tool for monitoring program implementation. Procurement planning and budgeting 38. At CI-Energies, the stages of developing the procurement plan are as follows : (i) approval of the budget; (ii) provision of the budget; (iii) identification of procurement activites ; (iv) Planning table of these lines according to the deadlines of the initiating parties; (v) submission of procurement plan to CI-Energies management and (vi) transmission of procurement Plan to DGMP. 39. CI-Energies' procurement plan (PPM), like that of the other contracting authorities, is published on the website of the Directorate General of Public Procurement. However, consultations with the available MPCs show that they are not disaggregated by market but grouped by budget line. This way of presenting the procurement plan does not allow the user to obtain relevant information on the contracts provided for by CI-Energies. In addition, although CI-Energies has its own website, no information about the GPP is included. Based on all the above, the GPP is not in fact available or of any use to potential bidders. Bidding and procurement processes and procedures 40. At CI-Energies, the procurement process takes place according to the Public Procurement Code. Tendering is the default method. However: i. The procurement plan is not detailed enough to allow future bidders to make decisions; ii. Average procurement times are longer than the deadlines provided for in the texts; iii. The deadlines for evaluating tenders exceed those provided for in the Public Procurement Code; iv. Leaked information was sometimes detected during bid evaluation sessions; v. CI-Energies has difficulty reaching the threshold prescribed by the Public Procurement Code for contracts awarded to local SMEs. Although contracting processes appear to be conducted in accordance with established rules, these dysfunctions need to be addressed for sound and effective program management. Procurement profile of the Program Procurement Profile Composition: Overall procurement profile of the program would cover three main procurement categories as listed below a) Works and Goods : Amounting 192.4 million USD and representing 90% of the program b) Services : Amounting 14.06 million USD and representing 6% of the program c) Non consulting services : Amounting 8.26 million USD and representing 4% of the program Accounting and reporting 41. At the national level, the GoCI is greatly enhancing fiscal reporting and transparency in line with its commitment to the Open Government Partnership (OGP). In 2015, Cote d'Ivoire became the first francophone country to be accepted as a member of OGP and is now implementing the 2020- 2022 Action Plan (third action plan) to improve fiscal transparency. This 2020-2022 action plan consists of ten commitments covering six policy areas. In addition to ongoing reform coming from the previous plan, this new plan includes new areas such as legislation development (teleworking and school canteen provision) and better alignment with the National Development Plan (NDP). Some progress has been made and strengthened relations between government and the civil society and the government's inclusion of civil society in validation sessions for budget guidelines is beginning to increase civic participation in fiscal processes at the national level. 42. The Ministry is responsible for producing quarterly budget implementation reports which are posted on the Ministry's website. A brief analysis and annexes accompany the quarterly budget implementation report. In-year reports provide information on expenditure both at the commitment, scheduling (liquidation) and payment stage as well as some analysis. In-year fiscal reporting (budget execution reports) are produced on a quarterly basis and are generally released within six weeks after the end of the quarter and adopted by the council of ministers. The score for the PI-28 is C according to the 2017 PEFA report. 43. According to the information provided, the quarterly execution reports were produced and published on time. These execution reports were published on the websites4 of the MEF or MPMBPE According to Article 80 of the general provisions and accounting standards of the State Accounting Plan (PCE-UEMOA), the annual accounts of the State are drawn up by the Minister of Finance and include the General Account of the Administration of Finance and the financial statements. Consolidated government financial statements (Compte Général de l'Administration des Finances, CGAF) are produced in a timely manner and transmitted to the court of accounts. The 2020 financial statements (CGAF and the Loi de Reglement) were submitted to the Court of account in July 2021. 44. At CI-Energies, the accounting division is under the responsibility of the DFA, which includes a dedicated FM team for the purpose of donor-financed projects. The prevailing accounting policies and procedures in line with the West African Francophone countries accounting standards – systeme comptable OHADA or SYSCOHADA, currently in use in Côte d'Ivoire, will be applied. The accounting systems and policies and financial procedures used by the operation will be documented in the Program's administrative, accounting, and financial manual. 45. The accounting system generates reliable reporting of the different entities at the central and regional levels. There is a system in place to prepare the annual financial statements for the Program. The accounting system allows for accounting for each program, which serves as the basis for the preparation of the financial statements for each program. The statements are edited and audited within the deadlines specified by the donors. 46. Accrual accounting is used on a day-to-day basis, in accordance with the principles and postulates of the "Uniform Act on Accounting Law and Financial Reporting and the Accounting System of OHADA (SYSCOAHADA). The OHADA Chart of Accounts sets out the rules for the preparation of financial statements, which allow comparisons in time and space in accordance with the principles generally recognized by international standards. Amendments are sometimes made to the accounting of projects to ensure their integrity and good understanding. 47. At CI-Energies, the annual financial statements are adopted by the Board of Directors and approved by the Shareholder before being published on the website of DGPE. A quarterly reporting of CI-Energies’ overall Financial Information summarizes operations for the General Management. The system also provides quarterly reporting to donors of financial commitments (invoices, payments, deposits, bank accounts, etc.) for each project through the Financial Monitoring Reports. A quarterly report on the Financing mobilized and the Loans Contracted is also prepared at the Public Debt Department. Financial reporting is carried out according to a model developed on the implementation of the program. Integration of Information Systems 48. The operationalization of ERP (Enterprise Resource Planning) is still at the design and start-up stage. Indeed, there are risks of delays in the completion of work on the Enterprise Resource Planning (ERP) system, which has not yet integrated all the functionalities of financial, accounting, human resources and procurement management. For financial management of projects financed by international and regional bodies, however, it is worth noting the progress related to budget allocations, the creation of contracts, the authorization of donors, the invoicing and payment of contracts and the creation of projects (such as PTDAE). 49. The ERP System will integrate all the functionalities including human resources management, accounting and financial management, decision support, sales, distribution and procurement, import 4 www.finances.gouv.ci; www.dgbf.gouv.ci; www.budget.gouv.ci functions of fixed assets, the calculation and monitoring of depreciation, and the disposal of fixed assets. 50. The operationalization of this ERP system could be backed by a DLI. The operationalization of this ERP will improve the CI-Energies management process including data collection, storage, monitoring, transparency and accountability. By implementing this ERP, CI-Energies will have five main advantages: (i) higher management performance; (ii) improved coordination; (iii) precise planning and enhanced reports; (iv) cost-effectiveness and (v) scalability and flexibility. 51. After the design of the ERP, the system will have to be deployed entirely for use by all CI- Energies structures to increase the efficiency of programming, budgeting and financial management procedures and thus increase the contribution to the monitoring and evaluation of the results of the Program (Results Framework). The operational manual should detail the responsibilities of the Directorate of Finance and Accounting of CI-Energies (DFA) and the IT Directorate (DSI) with regard to the production of the data necessary for reviewing this potential DLI. Treasury management 52. At national level, the Treasury Single Account (TSA) framework is operational. Nevertheless, the payment timeline should be improved. Payments are made by the Treasury for all line ministries. Line ministries have reported delays of payments following cash flow issues due to domestic revenue mobilization being lower than anticipated and unreliable forecast of required cash flow. These shortcomings at the National Treasury could affect overall program implementation performance, especially during the COVID-19 crisis where the GoCI faces resources mobilization challenges. CI- Energies will prepare quarterly commitments plans to be shared with the National Treasury to improve forecasting of disbursement requests. 53. There is a Treasury Committee within CI-Energies, consisting of the CEO, the Special Advisor, the Central Director Financial Management, the Director of the Budget, the Director of Economic and Financial Studies, the Financial and Accounting Director, and the Head of Treasury Department. It meets weekly to: - Develop and monitor CI-Energies’ annual cash flow plan; - Assess the company's ability to meet its payment commitments in the short and medium term; - Take stock of planned and realized receipts vs. planned and realized disbursements; - Motivate fundraising missions for the operation or financing of projects not taken into account by donors (in particular on rural electrification works or improvement of product quality). The payments are only made by the authorized signatories and designated on the projects or by direct payment to the lessor. 54. The policy of CI-Energies is to plan the uses or disbursement flows up to the expected resources or cash flows to avoid cash deficits. The Treasury Committee make a rigorous follow-up of the planned receipts and adjust the disbursements accordingly. However, management often uses short- term sources of financing such as draft discounts received from CIE's main clients, in order to finance in a shorter period of time work in the sector. In addition, for more flexibility in the management of transactions, the company has an overdraft line of 2 billion FCFA in 2019 which has been increased to 7 billion in 2021. 55. All flows are traced in an adapted treasury software "XRT Sage" which allows the daily reconciliation of the entries of the service with the statements of the various banking institutions hosting our accounts. The average payment time for work invoices is 90 days and 60 days for service invoices. 56. The table below presents the payment arrears for the last three years. Table 6: Payment arrears millions FCFA) 2018 2019 2020 Amount of mandate de payment (Year N) 43 710 383 622 306,002 543,940 264,252 367,714 (Factures engagées en N) Amount paid as of 30/04/N+1 (Règlements hors paiements 9,401,487,877 22,870,047,565 54,081,058,540 directs) % of payment 21,51% 7,47% 20,47% 57. A Designated Account in FCFA will be opened at the Central Bank (BCEAO) to receive the amounts of the initial advance and the amounts corresponding to the DLIs achieved. The DA will be managed by the Directorate General of the Treasury and Public Accounting (Direction Générale du Trésor et de la comptabilité publique – DGTCP); specifically, the Directorate of Public Debt (Direction de la Dette publique et des dons (DDPD). The DDPD will transfer within five (5) business days to the Treasury Account (Compte du Tresor) managed by CI-Energies. 58. CI-Energies can request advances up to 25% of the Financing allocated to DLIs that have not yet been achieved by following the relevant procedures. This will ensure that the government has the funds required to fulfill the intermediate operational requirements of the Program, leading to achievement of the Disbursement Linked Results (DLRs). When the DLI against which an advance has been disbursed is achieved, the amount of the advance will be deducted from the total amount due to be disbursed under that DLI. The Bank will record the amount disbursed to achieve a Disbursement Linked Result ("recovered") after it has notified the Borrower of its acceptance of the evidence of achievement of the result. 59. The Government, through the budget execution procedures, will transfer its contribution to the Program via the Treasury Account managed by the DDPD. This contribution could pre-finance the expenditure. The Government will transfer its annual contribution to the Treasury Account twice a year (e.g. February and August) based on the approved annual plan and budget as well as the payment estimates for the next 6 months. 60. The DLI achievement verification process. The Independent Verification Agent (private firm) will serve as the verification entity for the Program and will perform an independent review to confirm achievement of the results. The World Bank multi-disciplinary team will conduct the final review to confirm the achievement of the results which will allow the release of funds. The World Bank will retain the right to make the final decision on whether a result has been achieved and may undertake independent quality assurance checks to ensure continued robustness of the system. Independent verification agency will be appointed by CI-Energies within six (6) months after project effectiveness based on ToR approved by IDA. 61. The Government would claim disbursements5 from the Bank as the DLIs are achieved. All DLIs will be independently verified by an independent verification agent (IVA). The IVA will prepare a Results Verification Report which will be shared with CI-Energies and the World Bank. A key use of the Results Verification Report will be to determine the amount of the eligible disbursement to be made based on the results achieved. If the World Bank finds that the disbursement request meets the terms of the Financing Agreement, the World Bank will disburse the corresponding funds. Control of public procurement 5 To be confirmed 62. A priori control of public procurement is exercised by the Directorate General of Public Procurement under the authority of the Minister in charge of Public Procurement. CI-Energies contracts are awarded from the reference threshold in accordance with Article 5 of the Public Procurement Code and Order No. 692 of 16 September 2016 setting thresholds for the award validation and approval of public contracts as well as Order No. 112 MPMBPE/Dgbf/Dmp of 08 March 2016 on simplified competitive procedures. At the level of CI-Energies, these said procedures make it possible to consider all the expenses incurred. 63. The Regulatory Authority ensures the ex-post control of CI-Energies’ public contracts and all the contracting authorities. It also carries out independent audits of public procurement and monitors the implementation of recommendations. It should be noted, however, that this last point constitutes a weakness of the system in that the recommendations are not always implemented; for example, the report of the last Audit of the ANRMP has still not been officially transmitted to CI- Energies. Contract Management 64. The assessment of CI-Energies' contract management capacity shows that it is underdeveloped. Even if the contract administrators seem to have experience in contract management, nothing in the elements analyzed allows us to say that it is done in an efficient manner at CI-Energies. For example, there is no electronic contract tracking system. Data is difficult to obtain. The circuit for the reception of the works as well as the preparation of the statements in the case of works contracts seems too long, which is likely to lengthen the deadlines for the service provider, once the work is completed. In conclusion, data are difficult to be collected and this will be a challenge during the implementation. 65. It is therefore important for the success of this program that a good team be dedicated to contract management and that a computerized system for monitoring work contracts in the energy sector is set up before the start of the program. The procedures manual should also clearly define the procedures for managing guarantees and insurance and the provisions surrounding the management of statements. Years Contracts Value of contracts Categories 2018 2019 2020 2018 2019 2020 Works 127 191 259 66 041 119 285 129 967 845 395 222 267 061 038 Goods 9 24 39 325 102 386 2 411 316 988 Consultants 33 41 61 4 318 796 000 3 447 949 094 6 056 275 962 Total 160 241 344 70 359 915 285 172 740 896 875 230 734 653 988 Complaint management 66. The management of complaints to CI-Energies complies with the directives of the Public Procurement Code and does not seem to pose any problem in its application. Few appeals have been filed in previous years regarding the procurement procedures. However, the complaint management process must be clearly documented in the procedures manual and communicated to bidders so that they are aware of the possibilities of recourse. Years Activities Complaints % 2018 159 2019 241 0 0 2020 344 4 1,16% Of the four (4) complaints recorded in 2020, 3 concerned the contestation of the reasons for the rejection of the offers made by the tenderers, while the last related to an anonymous denunciation relating to fraudulent practices within the company. All of these complaints were dealt with diligently and decisions were rendered. These have in no way called into question the integrity of the procurement processes within the company. The deadlines for processing complaints fully comply with the provisions of the Public Procurement Code and it can therefore be noted that these complaints have been dealt with diligently. It should be noted, however, that the increase in the number of contracts signed naturally seems to lead to an increase in complaints. Attention should therefore be drawn to the fact that the addition of this program, which should increase the volume of activities within the structure, is therefore not likely to reverse the trend. Auditing Controls and integrity 67. The recommendations of the last Audit of the ANRMP have not been implemented because the report has not been transmitted by ANRMP to CI-Energies. There is also an Internal Audit Plan that systematically provides for a review of procurement procedures on selected projects. 68. As part of their missions, the auditors carry out specific due diligence relating to the verification of compliance with the provisions of the Public Procurement Code , in application of Circular No. 10/MPMB of 18 December 2014 on the governance rules governing the functioning of the administrative and management bodies of public companies. 69. A follow-up work is done from one exercise to another regarding the audits carried out by the other entities internal and external to CI-Energies. However, it is necessary that rigorous work be done to ensure that all recommendations are considered as soon as possible. Internal Audit and control 73. At the Central level, the institutional framework for control is adequate at the central government level but the overall performance of institutions of internal control requires additional improvements. There are several administrative control bodies in Cote d'Ivoire, along with the (i) General Inspectorate of Finance (IGF); (ii) Inspectorate General of the Ministries (IGM); and (iii) State Inspectorate Generale (IGE). At the CI-ENERGIES level, The Internal Control Unit (ICU) is headed by Internal Audit and Social Responsibility Directorate (DAIRS). Internal control system aims to ensure: (i) the effectiveness and efficiency of operations; (ii) the reliability of financial reporting; and (iii) the compliance with applicable laws and regulations. 74. The Program’s internal audit arrangements to be performed by IGF and ICU are adequate. A risk-based audit approach is being developed. Both entities have experience with World Bank financed projects and are familiar with procedures. These two entities report directly to the MEF and the Audit Committee / CI-ENERGIES and have sufficient staff to execute their annual audit work plan. However, lack of capacities remains a challenge and the monitoring of the audit recommendations. For instance, according to PEFA 2017 (PI-26 – D+), 68 percent of the planned inspections are realized. Moreover, internal audit reports are not publicly disclosed. l. 75. Despite the improvements noticed, there is room for additional efforts and strengthening of the IGF. For example, some delays are still noted in finalizing the internal audit missions on Bank- financed projects. Furthermore, there are also some weaknesses in monitoring the implementation of the recommendations of the control and investigation missions. According to the 2017 PEFA report, only about 56% of IGF recommendations were implemented (refer to IGF 2017 annual report 2017). 76. The Audit and Risk Management Committee (CAGR) of CI-Energies is a specific committee responsible for monitoring and evaluating financial and accounting information, as well as internal control and risk management. The Charter of the Audit Committee includes all the missions relating to internal control; the Internal Audit function (an annual internal audit report is produced and communicated to the members of the CAGR; financial and accounting information; the Statutory Auditor and external auditors as well as risk management: (monitoring of financial risks and any form of significant risks to which the entity is exposed, examination of the company's investments.). The composition of the CAGR includes 3 administrators representing the ministries of the Budget and the State portfolio: Economics and Finance, as well as Mining, Petroleum and Energy. Finally, Internal Audit staff participates without deliberative voice in meetings of CAGR. External Audit 77. The Court of Auditors has developed an acceptable audit methodology that is compliant with the International Standards of Supreme Audit Institutions. However, staffing constraints and limited financial independence could prevent the Court from auditing the Program adequately and providing timely audit reports. According to OHADA law, CI-Energies has two reputable audit firms appointed as external auditors called commissaires aux comptes. They are appointed by the General Directorate of State Participations (DGPE) of the Ministry of Budget. The Program audit report will be conducted by the two appointed « commissaires aux comptes » or recruitment of separate audit firm per specifications in ToRs agreed with the World Bank. CI- Energies shall submit the audit report to the World Bank no later than nine months after the end of the fiscal year. The audited program financial statement will be publicly disclosed in compliance with the World Bank policy on access to information dated July 2010. 78. The mission examined the reports for the last three fiscal years: 2018, 2019 and 2020 - drawn up by the Statutory Auditors by examining the opinion reports. For the three financial years examined, the opinion on the annual financial statements was unqualified. The external Audit is conducted in accordance with the accounting rules and methods published by the OHADA Uniform Act on Accounting Law and Financial Reporting. Specific checks carried out by the auditors in application of the law and regulatory texts, draw attention to certain points that seem important to them in terms of good governance such as the expiry of the mandate of all the members of the Board of Directors of CI-Energies (duration of the mandate of 3 years) for the 2020 financial year. Table 9: Certification of CI-Energies' financial statements for the last three financial years Audited Opinion expressed by the Date of certification of the financial exercises Statutory Auditors statements 2018 Unmodified 7 June 2019 2019 Unmodified 1 September 2020 2020 Unmodified 22 June 2021 Fraud and corruption 79. There are adequate legal, regulatory, and institutional frameworks in place in Côte d'Ivoire on fraud and anticorruption. The mains risks of fraud and corruption are related to the lack of transparency in the procurement ( selection process) and contract management. These risks will be mitigated by the DLI ( ERP including procurement monitoring and electronic monitoring), actions included in the PAP. Three main institutions including Court of Audit (Cour des comptes), ARMP and High Authority for Good are in place to jointly fight these unappropriated behaviors. They are empowered to prevent and act on cases of fraud and corruption. HABG will assume the responsibility of the FAC in this program. HABG collect—with support from the abovementioned institutions—and report to the World Bank allegations occurring under the Program through the annual progress reports during Program implementation. The reporting format will include the following: (a) location and date of the complaint; (b) allegation’s description; (c) description of progress in investigation; and (d) investigation outcome. HABG : 80. HABG is an administrative autonomous authority create under the ordonnance 2013-660 ( September 20, 2013) in charge of prevention and fighting corruption. According to the strategic plan of the HABC, there are five pillars : (i) Transparency; (ii) Ethics and responsibility; (iii) Sensibilization; (iv) Fighting corruption; and (v) and coordination of fighting corruption activities in Ivory Coast. The scope of the HACB 81. The HABG is a recent institution under construction. In this way, there is no data covering the period of 2015 to 2020. Since 2021, HABG put in place, a M&E system which allows the collection and data’s analysis. For 2021, the data are summarized as below : Tableau XX : Statistiques des dossiers traités par type d’infraction (2021) STATISTIQUES DES DOSSIERS TRAITES PAR TYPE D’INFRACTION NOMBRE Dossiers de corruption et infractions assimilées 41 Dossiers de blanchiment de capitaux et de financement du terrorisme (BC/FT) 199 Dossiers de trafic de stupéfiants 16 Dossiers de détournement de deniers publics 17 Dossiers de cybercriminalité 58 Dossiers des infractions économiques (abus de confiance, escroquerie, vol, faux et 240 usage de faux…) 82. For 2022, a total of 107 cases were treated, and 93% of this number are related to the public sector, and 54% are related to corruption and fraud. It is important to highlight that for 2022, any cases reported are not related to the ministry of energy. 83. The risk of fraud and corruption under the Program is Substantial given overall adequacy of internal controls in place at MEE and CI-Energies. To further reduce the risk of fraud and corruption associated with the Program implementation, it will be aligned to the World Bank Anti-Corruption Guidelines (ACG) applicable to PforR operations. In particular, the following will be implemented. (i) Sharing of debarment list of firms and individuals. The Borrower will use the World Bank’s List of Debarred and Cross-Debarred firms and individuals to ensure that persons or entities debarred or suspended by the Bank are not awarded contracts under the Program during the period of such debarment or suspension. The list can be accessed on the World Bank’s website (www.worldbank.org/debarr). The compliance with this requirement would be checked will be checked by the Program’s auditor. (ii) Sharing of information on fraud and corruption allegations. The Borrower will share with the World Bank information on all complaints and actions taken or being taken on complaints and grievances received on fraud and corruption under the Program. The World Bank will be also informed about the actions and decisions taken by the relevant institutions to address the matter raised in the complaint. (iii). Investigation of fraud and corruption allegations. 84. The implementing agencies will provide full support to the HABG and the World Bank when carrying out investigations related to fraud and corruption allegations made during the Program implementation. The World Bank will be informed on all credible and material allegations or other indications together with the investigative and other actions that the Borrower proposed to take with respect thereto. The World Bank will retain a right to investigate allegations, and the Borrower will provide the World Bank the necessary access to needed persons and information applicable to the Program. 85. In addition, at CI-ENERGIES level, the adoption of the code of the ethics rules for CI-Energies will be finalized. This code will present the Responsibilities, accountabilities and sanctions against individuals and companies found guilty of fraudulent practices or corruption will need to be clearly defined and regularly enforced and respected. Implementation support 86. During the Program implementation the Bank's fiduciary team will: (i) review the implementation progress and examine the achievement of Program results and/or legal covenants/PAP that are of a fiduciary nature; (ii) help the Recipient to resolve implementation issues and carry out institutional support; (iii) monitor the performance of fiduciary systems and audit reports, including the implementation of the PAP; and (iv) monitor changes in fiduciary risks to the Program and, as relevant, compliance with the fiduciary provisions of legal covenants capacity building. 87. Detailed Mitigation Action Plan: Based on the assessment, following key risks and proposed mitigation actions have been proposed as PAP: Due Responsible Type of Completion Action Description Date/Schedule Party measure6 Measurement Planning and Budgeting Elaborate and publish the Starting from Directorate of PAP Finance law with quarterly budget execution the first year of Budget/ST of consistency of report including the the Program. the Program. budget allocations commitment plan of CI- with national Energies and share with the priorities. World bank N+1 budget document (Budget program, DPPD) during year N quarter for technical advice. Internal Control and Internal Audit Elaborate Operational Manual Three months CI-Energies. Legal Covenant Copy of the covering Program Fiduciary following the approved OM Actions, budget monitoring Program and program implementation effectiveness. support, KPI Reporting, ACG Protocol. 6 To be confirmed. Due Responsible Type of Completion Action Description Date/Schedule Party measure6 Measurement Conduct semester inspections Two months CI-Energies/ PAP. Copy of the reports and internal audit missions following the DAIRS. of inspections and covering procurement, end of each reviews of the financial, and technical calendar Program activities aspects of the Program semester implemented. including the follow up on starting from internal audit the first year of recommendations. Program effectiveness. Third-party Verification Recruitment of the IVA. Six months CI-Energies/ Legal IVA team following the DAIRS. Covenant. contracted. Program effectiveness. Accounting and financial reporting Accelerate the pace of Three months computerization work on the following the Reporting (Budget, various functionalities of the Program CI-Energies. DLI. treasury, ERP system including effectiveness. procurement) procurement tools. issued by ERP System. External Audit Audit of the Program to be Six months CI-Energies. Legal Covenant Copy of the audit conducted by the external following the report submitted auditors, private firm named Program to the World Bank "commissaires aux comptes" effectiveness. nine months after of CI-Energies, to cover this end of year. Program including the performance audit of the procurement activities. Procurement Establish a fiduciary Six months CI-Energies PAP complaint handling following the mechanism at CI-ENERGIES Program level effectiveness. Fraud and Anticorruption Establish FAC report (The Semi-annual. HABG / CI- PAP. Report available reporting format will include Energies and share with the following: (a) location world bank and and date of the complaint; HABG. (b) allegation's description; (c)description of progress in investigation; and (d) investigation outcome). FM Assessment of the IPF Component 1. The implementation of the Program involves an IPF component for an amount of US$ 10 million. The IPF component will be implemented by CI-ENERGIES which has a good track record being the implementing agency of : Cote d'Ivoire - Electricity Transmission and Access Project (P157055) a World Bank-financed IPF project. However, the fiduciary risk under this component is deemed moderate. To mitigate this risk, the project will update a project operation manual/ to describe procedures related to the IPF component. 2. In addition, to mitigate FM’s inherent risk to the extent that meets the World Bank’s minimum requirements under IPF Policy, the following aspects will be considered: • Budgeting: CI-ENERGIES will prepare an annual work plan and budget (AWPB) according to the budget procedures that will be described in the POM. The AWPB will be submitted to the WB no later than November 30 of each calendar year throughout the implementation of the Project • Accounting Arrangements. The prevailing accounting policies and procedures in line with the West African Francophone countries accounting standards—SYSCOHADA—in use for ongoing World Bank- financed operations will be applied for the IPF component. • Accounting Staff. CI_ENERGIES financial staff will be appointed and will handle the FM activities under the IPF component. • Internal Controls. Project will be implemented under the FM procedures approved for the ongoing project . The accounting software will be updated to take into account this IPF component. In addition, the same internal audit arrangement for the ongoing project will be applied. • Financial Reporting Arrangements: The PIU will prepare and submit bi-annual unaudited interim financial reports (IFRs) and annual audited financial statements in form and content satisfactory to the Bank. The IFR and the annual report for the IPF component and for the PFoR will be included in the same document, in a separate section. Further details will be provided in the POM. The annual reports will be established in compliance with International Accounting Standards and IDA requirements, for annual financial statements • External Audit Arrangements: A private audit firm will audit the IPF component under the ToR acceptable to IDA. • Funds Flow Arrangements. The project will open a Designated Account (DA) in a commercial bank acceptable to the Word Bank in local currency (XOF). Disbursement arrangements will follow Bank’s disbursement guidelines. The project funds will be used in line with the Financing Agreement and Bank FM procedures. The disbursement methods as described in the World Bank’s Disbursement Handbook (i.e., advance, direct payment, reimbursement, and special commitments) will apply. • Governance and Anti-Corruption (GAC) Arrangements: For the IPF component, the fraud and anti- corruption arrangement will follow the Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants (revised as of July 1, 2016) . Table A.4.6: FM action plan for IPF component No Action Due Date Responsibl e 2 Update the manual of procedures and Not later than three (3) months after CI- customize the accounting software effectiveness ENERGIE S 3 Recruit an external Auditor based on ToRs Not later than five (5) months after PCU acceptable to the World Bank effectiveness Procurement Assessment of the IPF Component 3. Guidelines. Procurement for goods, non-consulting and consulting services will be carried out in accordance with the procedures specified in the World Bank Procurement Regulations, dated July 2016, revised November 2017, August 2018 and November 2020 (Procurement Regulations), and provisions stipulated in the Financing Agreement. Procurement will be carried out in accordance with all relevant policies and procedures: (a) with the World Bank’s “Procurement Regulations for IPF Borrowers� dated November 2020 under the “New Procurement Framework�; (b) “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants�, dated July 1, 2016, and other provisions sti pulated in the Financing Agreements using the Standard Procurement Documents (SPDs) accompanying the Procurement Regulations. STEP will be the platform for preparing, submitting, reviewing, and clearing Procurement Plans and prior review procurement activities. STEP will also be used for uploading the documents and evaluation reports for post review contracts. The PIM will detail the procurement procedures, SPDs, and model contracts associated with the market approaches and selection methods for various procurement categories. Details of the Procurement Plans will be done in STEP. 4. Procurement documents. For international competitive procurement for goods, non-consulting services, and consulting services, the borrower shall use the World Bank’s Standard Procurement Documents with minimum changes, acceptable to the World Bank, as necessary to address any project specific conditions. 5. Procurement Capacity Assessment: The designated implementing agency is the MF. A procurement assessment was done by a Bank procurement specialist during preparation, in accordance with the World Bank Group Procurement Risk Assessment and Management System (PRAMS). Based on this assessment, the procurement risk factor is Substantial. The residual risk will be Moderate after implementing the agreed mitigation action plan 6. Project Procurement Strategy for Development (PPSD) and Procurement Plan. As part of the preparation of the project, the Borrower will prepare its Project Procurement Strategy for Development (PPSD), which will describe how fit-for-purpose procurement activities will support project operations for the achievement of project development objectives and deliver value for money. The procurement strategy will be linked to the project implementation strategy at the country, regional, and international levels, ensuring proper sequencing of the activities. It will consider institutional arrangements for procurement, roles and responsibilities, thresholds, procurement methods, prior review, and the requirements for carrying out procurement. It will also include a detailed assessment and description of the execution agency(ies) involved in the project, and Government capacities for carrying out procurement and managing contract implementation, within an acceptable governance structure and accountability framework. Other issues considered include behaviors, trends, and capabilities of the market (that is, market analysis) to inform the procurement plan. The World Bank will review the PPSD prepared. 7. Procurement information and documentation—filing and database. The Project’s activities include procurement of an electronic archiving system (Acquisition of electronic archiving software) to record procurement information: (a) Complete procurement documentation for each contract, including bidding documents, advertisements, bids received, bid evaluations, letters of acceptance, contract agreements, securities, and related correspondence will be maintained at the level of respective ministries in an orderly manner, readily available for audit. (b) Contract award information will be promptly recorded and contract rosters, as agreed, will be maintained. (c) Comprehensive quarterly reports will be prepared indicating: (i) revised cost estimates, where applicable, for each contract; (ii) status of ongoing procurement, including a comparison of originally planned and actual dates of the procurement actions, preparation of bidding documents, advertising, bidding, evaluation, contract award, and completion time for each contract; and (iii) updated Procurement Plans, including revised dates, where applicable, for all procurement actions. 8. General Procurement Notice, Specific Procurement Notices, Requests for Expression of Interest, and results of the evaluation and contracts award should be published in accordance with advertising provisions in the Procurement Regulations. For request for bids and request for proposals that involve international bidders/consultants, the contract awards shall be published in the United Nations Development Business in line with the provisions of the Procurement Regulations. 9. Training, workshops, study tours, and conferences. Trainings (including training materials and support), workshops, and conference attendance (based on individual needs as well as group requirements), and on-the- job training will be carried out based on an approved annual training and workshop/conference plan that will identify the general framework of training activities for the year. A detailed plan and terms of reference providing the nature of the training/workshop, number of trainees/participants, duration, staff months, timing, and estimated cost will be submitted to IDA for review and approval before initiating the process. The appropriate methods of selection will be derived from the detailed schedule. After the training, each beneficiary will be requested to submit a brief report indicating what skills have been acquired and how these skills will contribute to enhance his/her performance and contribute to the attainment of the PDO. Reports by the trainees, including completion certificate/diploma upon completion of training, shall be provided to the project coordinator, kept as parts of the records, and shared with the World Bank if required. 10. Implementing entity. The procurement activities for the project will be executed by CI-ENERGIES. It will carry out the fiduciary responsibilities and the following activities: (a) Monitor and/or manage overall procurement activities and ensure compliance with the procurement process described in the relevant manuals. (b) Ensure compliance of bidding documents, draft requests for proposals, evaluation reports, and contracts with WB procedures. (c) Coordinate the preparation, consolidation and updating of the Procurement Plan. (d) Monitor the implementation of procurement activities. (e) Develop procurement reports. (f) Seek and obtain approval of internal designated entities and of IDA on procurement documents, as required. 11. CI-ENERGIES will conduct all processes of all procurement activities: (a) preparation of terms of reference and the bidding documents; (b) preparation of evaluation reports and contracts in line with World Bank procedures; and (c) preparation of procurement commission activities and all related meetings. It will also be responsible for the coordination and quality control of all procurement-related activities funded by the project. 12. Procurement procedures. When approaching the national market, the country’s own procurement procedures may be used with the requirements set forth or referred in National Procurement Procedures and subject to certain requirements for national open competitive procurement. Other national procurement arrangements (other than national open competitive procurement) that may be applied by the Recipient (such as limited/restricted competitive bidding, request for quotations, shopping, local bidding, and direct contracting) shall be consistent with Bank’s core procurement principles and ensure that the Bank Anti-corruption Guidelines and Sanctions Framework and contractual remedies set out in the Legal Agreement apply. 13. Operating costs financed by the project are incremental expenses, incurred by the PIU as approved by the World Bank, for project implementation, management, including utilities; office space rental; office supplies; bank charges; vehicle operation, maintenance, and insurance; maintenance of equipment and buildings; communication costs; travel and supervision costs (that is, transport, accommodation, and per diem); and salaries of contracted and temporary staff. These expenses related to operating costs will be procured using the procedures specified in the project manual for administrative, financial, accounting, and procurement procedures, accepted and approved by the World Bank. 14. Frequency of procurement supervision. In addition to the prior review supervision which will be carried out by the World Bank, semiannual supervision missions are recommended. Annual World Bank procurement post review will be conducted by the Bank designated procurement specialist. The sample size will be based on the overall procurement risk rating. The prior review procurements will be reviewed and cleared in STEP by the procurement specialist.