The World Bank Energy Sector Financial Recovery Project (P177871) Project Information Document (PID) Concept Stage | Date Prepared/Updated: 15-Jan-2022 | Report No: PIDC32995 Dec 08, 2021 Page 1 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) BASIC INFORMATION A. Basic Project Data OPS TABLE Country Project ID Parent Project ID (if any) Project Name Kyrgyz Republic P177871 Energy Sector Financial Recovery Project (P177871) Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead) EUROPE AND CENTRAL ASIA Mar 17, 2022 May 19, 2022 Energy & Extractives Financing Instrument Borrower(s) Implementing Agency Investment Project Financing Kyrgyz Republic Ministry of Energy Proposed Development Objective(s) To improve financial performance, operational reliability, and social resilience of electricity sector. PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 50.00 Total Financing 50.00 of which IBRD/IDA 50.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 50.00 IDA Credit 25.00 IDA Grant 25.00 Environmental and Social Risk Classification Concept Review Decision Substantial Track II-The review did authorize the preparation to Dec 08, 2021 Page 2 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) continue Other Decision (as needed) B. Introduction and Context Country Context 1. The Kyrgyz Republic is a land-locked, lower-middle-income country. It has rich endowments, including minerals, forests, arable land, and pastures, and has significant potential for the expansion of its agriculture sector, hydroelectricity production, and tourism industry. Per-capita economic growth has averaged 2.9 percent in 2000-2019, well-below Kyrgyz Republic’s regional, economic and aspirational peers. Growth has been volatile, with expansions interrupted by four contractions during this period: in 2002, 2005, 2010 and 2012. While contractions in 2005 and 2010 were due to internal factors, the other two were due to external shocks. 2. Since gaining independence from the Soviet Union in 1991, the Kyrgyz Republic has experienced considerable political turbulence, accompanied by economic and social fragility, episodes of social unrest and frequent changes of government. The country’s vibrant democracy, while a source of strength in the long term, also carries with it a shorter- term cost of instability which can affect socio-economic goals. There have been six presidents and 22 governments during 2000-2020, a substantial turnover. Understandably, recent surveys indicate that macroeconomic and political instability are near the top of concerns for businesses. 3. The COVID-19 outbreak in early 2020 disrupted a 5-year growth streak in the country’s economy and exacerbated its underlining macroeconomic vulnerabilities. The political turmoil later in the year further worsened the country’s investment climate. To make matter worse, Kumtor, the country’s largest gold mine experienced a sharp fall in production. The country’s real GDP contracted by 8.6 percent in 2020. Weak fiscal revenues and surging expenditures drove a deep wedge into the government’s prior narrow fiscal deficit. In 2020, due to crisis-related tax deferments and exemptions, the Government of Kyrgyz Republic (GoKR) experienced a substantial decline in tax revenues, equivalent of 1.4 percent of GDP. 4. The Kyrgyz economy is expected to recover to pre-pandemic level by 2023 with the fiscal deficit projected to narrow to 3.9 percent of GDP in 2021, driven by higher tax revenues propelled by economic recovery and the expiration of tax deferments and exemptions. The economy is expected to grow by 2.3 percent in 2021, assuming a continued expansion in the non-gold economy in the remainder of the year. Growth is forecast to increase to 4.7 percent in 2022 and to 4.4 in 2023, reflecting gold production growth while non-gold economy stabilizes at its potential level. This scenario assumes a reduction of new COVID-19 cases as vaccines are deployed, that political stability is maintained, and external demand and trading conditions improve. Over the medium term, the authorities are targeting a fiscal deficit of 3 percent of GDP. Fiscal consolidation requires measures to expand the tax base, roll back pandemic-related expenditures, streamline nonpriority purchases, and reduce the wage bill as a share of GDP. 5. The GoKR is currently developing a Medium-term Development Program of the Kyrgyz Republic for 2021-2026, which frames the Government overall development vision, following the fundamental principle of “leaving no one behind� of the Sustainable Development Goals (SDGs). The priority areas are centered around the following seven pillars: Dec 08, 2021 Page 3 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) (i) anti-crisis measures; (ii) management reform; (iii) establishment of an enabling environment for development; (iv) development of key sectors of economy; (v) social development; (vi) foreign policy and national security; and (vii) special priorities. Energy is presented as a key sector to be reformed, including through gradual tariff adjustments towards cost recovery, exploiting the country’s renewable energy potential, modernization of the sector assets, and transition to wholesale electricity market, among others. Sectoral and Institutional Context 6. The energy sector is largely publicly owned and unbundled. The power sector in the Kyrgyz Republic (KR) is mainly state-owned and operated by seven joint stock companies that are responsible for power generation, transmission and distribution and retail. The companies consist of two generation companies, the Electric Power Plants and Chakan HPP, one transmission company, the National Electricity System, and four regionally divided distribution companies: Severelectro, Vostokelectro, Oshelectro and Jalalabadelectro. Of the four distribution companies, Severelectro and Oshelectro are the largest, accounting for 42% and 26% of distribution respectively in 2019. The energy sector also comprises the heating segment with the Bishkek Combined Heat and Power Plant (CHP), a state-owned power company, supplying around 70 percent of the country’s demand for heat. The energy sector is currently under the jurisdiction of the KR Ministry of Energy (MoE) re-established in 2021. It consolidates the policy making functions in the energy sector. The Energy Sector Regulatory Authority mapped under MoE regulates electricity, gas and heating tariffs in the country and carries out licensing functions. A monolithic energy mix compounded by fluctuating hydrology; stagnant and low electricity tariffs; and rising system losses have resulted in a sector struggling to meet its mandate of service delivery to consumers 7. Electricity sector is dominated by hydro resource and characterized by a growing and seasonal demand. Total available generation capacity in KR is 3.8 GW with around 90 percent coming from hydropower and remaining 10 percent fossil fuel-based generation at Bishkek CHP (coal primary fuel with gas as backup). Electricity exports to Kazakhstan and Uzbekistan have traditionally generated revenues for the country, although trade is highly cyclical and dependent on hydrological patterns. In recent years, however, the country has imported electricity to meet its domestic needs in winters. The country experiences energy deficit driven by insufficient generation and inadequate network especially during winter season when the demand is 2.5-3 times higher than summer demand. Around 60-65 percent of electricity consumption comes from residential sector and around 11 percent from industrial production. 8. The Kyrgyz Republic boasts of substantial hydropower and solar power potential with 90 percent of untapped hydropower potential and an estimated annual solar power potential around 1,200+ kWh/kWp . Current domestic generation cannot fully meet domestic demand all year round. Emergency imports from neighboring countries are needed especially in winter with lower hydropower output and higher demand for power. To fully exploit the opportunities hydropower represents, the country needs to add generation capacity and build enough of a reserve margin to mitigate the multi-year hydrological cycle. It also needs to avoid delaying doing so for too long as neighboring countries are already actively engaged in adding capacity. To this end, an Electricity Sector Master Plan is currently under development, which will recommend a least-cost generation expansion scenarios to meet the growing demand. The Master Plan also aims to diversify the energy mix through deployment of non-hydro clean energy sources to ensure energy security and reliable energy supply. 9. Kyrgyz Republic reports one of the lowest electricity tariff rates in the world with concomitant impact on sector financial context. Without sufficient revenues to recover costs of service, the sector heavily relies on foreign and budgetary loans to remain afloat. Weighted average electricity tariff is estimated to be at around 70 percent of its cost (excluding Dec 08, 2021 Page 4 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) profit margin and capex needs). More than half of the country’s electricity consumption in 2020 was billed at the first-tier1 residential tariff (around US¢0.9 kWh), covering only 45 percent of cost-of-service, leaving industries, businesses and large residential customers to help partly offset the losses from servicing the residential consumption. Figure 1. Residential electricity tariffs in selected countries, US¢/kWh, 2020 10. Since 2015, there have been almost no adjustments in tariffs. This consequently led to the tariffs having a declining trend in real terms (net of inflation) over the period, adding up to the sector financial losses and payment arears, and shrinking the funds available for the operational and maintenance purposes and capital expenditures. Cumulative inflation (average consumer price index) in 2015-2020 in the Kyrgyz Republic was 20.4 percent with the annual average of 3.1 percent. Figure 2 below illustrates the tariff trajectory in nominal and real terms. Figure 2. Average electricity tariffs in the Kyrgyz Republic in 2014-2020, US¢/kWh 11. Moreover, the sector is heavily indebted with cumulative debt at KGS 103.3 billion (US$ 1.2 billion or 18% of GDP), representing a heavy fiscal burden to the country. Debt repayment on existing loans is scheduled to quadruple by 2025 compared to 2018 level. The annual debt service obligations of the Electric Power Plants and the National Electricity System make up the majority of the sector’s total debt service; they have increased steadily since 2014 and are expected to increase substantially in coming years because of large investments that have occurred in the system in recent years. 1 Residential customers with consumption of up to 700 kWh electricity per customer per month. Dec 08, 2021 Page 5 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) Most of the current loan balance is from foreign banks and governments, followed by budgetary loans from the Ministry of Finance. 12. Consequently, the sector deficit is projected to grow rapidly in coming years, driven by underpricing, increasing FX-denominated debt service, losses, inflation, and low electricity export revenues due to multi-year hydro cycles and increasing domestic demand. The overall sector deficit is estimated at around KGS 700 million in 2020. Without a change in tariffs and/or other financial stimulus measures, the electricity sector is forecast to have a deficit of KGS 10.4 billion by 2023, around 15-fold increase from the 2020 level. With the MTTP 2021 the electricity deficit would be reduced to approximately by KGS 5.0 billion by 2023 if the CPI adjustments to the tariff take place in the years 2021 to 2023, bringing down sector deficit to around KGS 5.4 billion. 13. Operational performance is compromised by aged infrastructure with poor reliability and high losses due to insufficient investments and under-spending on maintenance and rehabilitation. Reported total losses were about 20 percent of net generation in 2020 and the actual losses were likely higher considering a lack of metering and poor management information systems. About half of generation capacity, and 60-70% of distribution assets are beyond their useful lives. The main inefficiency is in the distribution segment, which accounts for up to 16 percent of reported losses. Consequently, there have been frequent emergency shutdowns of distribution facilities due to equipment congestion and overloading across the country. On top of load shedding, distribution companies have recently started introducing additional solutions to limit the consumption for individual customers up to certain threshold. Applications for new connections are being processed very slowly - and even rejected during winter season – due to the generation and distribution capacity constraints. The distribution companies have been experiencing significant increase in energy demand due to urban development while the aging distribution networks are unable to keep up with the demand growth, leading to more frequent and longer outages and forcing it to reject many new connections. The need to upgrade aging assets and expand distribution capacity through targeted investments is evident in the network. Such investments will lower technical and commercial losses, improve operational performance and financial situation of utilities, while ultimately benefiting households and businesses, thereby creating better employment possibilities and supporting economic development. 14. Kyrgyzstan’s energy tariffs are affordable compared to those of other countries in the region (Figure 1.), and the household electricity expenditure share lower. In 2019, households spent from 2 to 3 percent of their total expenditure on electricity and around 7 percent on total energy consumption. The lowest quintile spent 3 percent and the highest spent 2.5 percent of their total expenditure on electricity, whilst the affordability definition for household expenditure on electricity by the Regulatory Indicators for Sustainable Energy is 5 percent. The low expenditure on electricity is partially the result of the socially oriented tariff which has remained fixed in nominal terms since 2014, and which cross-subsidizes above 80 percent of residential consumption. Despite the relative energy affordability in Kyrgyzstan, the poor may still feel impacts from tariff increases. The rural poor population has few sources of cash income, and due to the seasonal incomes of farming, have the lowest income in the winter, when their energy bills are the highest. To address these concerns, this Project will be supporting the GoKR in designing short-term and long-term measures to protect the poor from tariff adjustments. The Government has adopted an overarching strategy to move towards a well-functioning, transparent and financially sustainable energy sector 15. The GoKR is in the process of preparing a sector reform roadmap with support from the World Bank, which outlines the priority power sector reform actions and their sequence. The roadmap has the following key pillars: (i) financial recovery and tariff reforms, (ii) environmental sustainability and energy security, (iii) sector operational Dec 08, 2021 Page 6 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) efficiency, and (iv) creating enabling environment to ensure energy sector sustainability. The GoKR declared a set of priority measures to tackle the sector challenges, such as tariff reforms, financial viability improvements, hydro and other renewable energy development, network loss reduction, and demand side energy efficiency, as well as regulatory and institutional actions. Particularly, in October 2021 the revised Medium Term Tariff Policy (MTTP) for 2021-2025 was approved, which envisages maintaining residential tariffs and increasing the rates for non-residential customers by 6-125 percent in 2021 and adjusting tariffs for inflation (CPI) in 2022-2025. This represents an important initial step toward sector sustainability after the long pause in tariff adjustments since 2015. Nevertheless, they are still not able for the sector to reach full cost recovery levels by 2025. Moreover, the government is developing a new MTTP with the aim to improve the sector financial situation while protecting the vulnerable population, which is expected to be released in March 2022. 16. Tariff reforms will also need to adopt mitigating measures to protect the livelihood of the poor and vulnerable households. The removal of energy subsidies may negatively impact the consumption and household income both directly, through higher prices of energy, and indirectly through other price changes triggered by the changes in energy prices. The need for effective social protection systems is especially pressing in the context of the COVID-19 pandemic and following recovery which strongly impacted the poor and vulnerable in the absence of social assistance mitigating measures. Effective social protection delivery systems are essential to protect the poor and vulnerable households in the persistent context of the COVID-19 pandemic and following recovery, and to mitigate the impact of future shocks of the energy subsidy reform. 17. Mitigating the impacts of the energy tariff reforms on poor and vulnerable households requires a comprehensive approach to modernizing social assistance. Social assistance systems should provide timely and adequate benefits as well as tailored services and support, swiftly respond to shocks and disasters affecting the income of households and contribute to transitioning beneficiaries to a path to graduate from social assistance and eventually leave poverty. In this framework, three potential areas of improvement have been identified: (i) Strengthening of social assistance and benefits targeting, (ii) responsiveness of social protection delivery systems to disasters, and (iii) IT systems and digitalization in Social Protection (SP). In the area of social assistance, the UBK program is the flagship antipoverty program with the largest in coverage intervention supporting the poorest in the country but it requires adjustment to better contribute to poverty reduction and help beneficiaries to better manage shocks and disasters, such as the energy tariff reforms. 18. Investing in further digitalization of the SP delivery systems is necessary to increase the efficiency of the SP interventions. The development of the Corporate Information System of Social Assistance (CISSA) helped move the delivery system of social assistance significantly forward, reducing errors and fraud cases, simplifying application procedures, and increasing transparency of the process. Yet there is room for improvement when it comes to adding functionalities to CISSA to increase the efficiency of the system and fine-tune the selection of beneficiaries’ process to decrease inclusion errors. This could include linking the registry with “Sanarip Aimak� Automated Information System to enhance the CISSA data with local level Aiyl Aimak Passport databases. The proposed project aims to situate the electricity sector on a financially sustainable path – able to protect the vulnerable consumers; attract private sector investment; and signal appropriate price structures for energy efficient consumption. 19. The proposed Project will aim to contribute to a suite of operational efficiency enhancement measures such as investments in distribution assets, installation of advanced management technologies. Additionally, lower technical and commercial losses and an overall better operational performance will help reduce cost of service delivery, hence lowering Dec 08, 2021 Page 7 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) the need for government subsidies. Also, the tariff revision to be implemented towards a cost-recovery trajectory, which will help narrow the financial gap of the energy sector and reduce the need for subsidies. Overall, this will enable stronger financial standing of the energy sector and move the energy sector onto a sustainable development path, which will contribute to country’s competitiveness and create jobs and income opportunities. Lastly, social protection systems will be strengthened, which are essential to protect the poor and vulnerable households in the context of the COVID-19 pandemic and the following recovery, and to mitigate the impact of future shocks of the energy subsidy reform. The proposed Project will be designed with consideration on the risks related to backtracking by the Government on agreed reform actions and develop mitigation measures accordingly. 20. The proposed Project would build on the WB previous and ongoing projects and activities: (a) recently closed Electricity Supply Accountability and Reliability Improvement Project (ESARIP, P133446); (b) Energy Sector Development Policy Operation (P152440); and (c) Supporting Energy Sector Reform to Improve Financial Viability Programmatic Advisory Services and Analytics (PASA, P174466). The proposed Project will build on the World Bank analytical and policy support in reforming the energy sector in the Kyrgyz Republic over the past years. In particular, the World Bank has been actively supporting the GoKR initiatives in the design of an energy sector reform roadmap, establishment and operationalization of the Energy Sector Regulatory Authority, preparation of medium-term tariff policies, development and implementation of the energy tariff methodology, IFRS transition and loss reduction at distribution segment as well as improving the reliability of electricity and heat supply in the country. 21. The proposed Project would also supplement assistance provided by other development partners. ADB is financing the development of an Energy Sector Master Plan to outline least cost generation expansion scenarios, which is of highly relevance to the proposed Project. EBRD together with EU is financing improvement of the reliability of electricity supply in the South and in the Issyk-Kul and Naryn regions of the country (Osh Electro and Vostok Electro). JICA is exploring financing opportunities in transmission networks. KfW also supported the advanced metering infrastructure program (co- financed with the World Bank’s ESARIP project) and establishment of a billing system in Bishkek city. Going forward, close donor coordination in the energy sector will continue to explore synergies and ensure complementarity. Relationship to CPF 22. The proposed Project is in line with the Bank’s twin goals to reduce poverty and boost shared prosperity in Kyrgyz Republic, as well as the overarching goal of CPF 19-22 to promote diversified, export-oriented, inclusive, and sustainable growth. The high financial burden of the energy sector is not only tightening its sustainability, but also creating little space for investments in the sector both for new capacity development and rehabilitation of existing assets. Consequently, risks of energy shortage persist with poor reliability and efficiency of energy supply triggering significant economic costs and negative impacts to the living conditions of the population particularly the poor, especially in the cold winter months. The proposed Project would support the Bank’s twin goals and CPF 19-22 through (i) reducing significant economic costs and underserved demand, (ii) improving the energy sector financial sustainability, and (iii) improving living conditions whilst enhancing social protection system. 23. The proposed project will contribute to the World Bank Climate Action Plan commitment to increase climate financing to 35 percent of total financing and the government’s updated Nationally Determined Contributions (NDC) 2021. The government has set the mitigation goal to reduce GHG emissions by 36.61 percent in 2025 and 43.62 percent in 2030 with international support. The energy sector is expected to contribute to a reduction of 6.0 billion tons of CO 2 equivalent by 2030. Investments to increase supply-side efficiency and reduce losses of the electricity networks contribute to climate change mitigation. Moreover, the Project is supporting the government’s broader sector reform agenda, particularly tariff reforms. A more cost-reflective electricity and heat tariff will not only incentivize energy conservation Dec 08, 2021 Page 8 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) behaviors from end users, but also create a level playing field for other renewable energy such as solar and wind to be deployed, leading to further reductions in GHG emissions. C. Proposed Development Objective(s) 24. The Project Development Objective (PDO) is to improve financial performance, operational reliability, and social resilience of electricity sector. Key Results (From PCN) 25. PDO level results indicators are: • Reduction of total system losses (percent) • Reduction of average interruption duration per year in the Project areas (minutes) • Reduction of distribution companies' cash deficit (percent) • Share of residential customers protected by social assistance measures (proportion). 26. A set of intermediate results indicators will also be prepared during the project preparation to track the project interim results and outputs. D. Concept Description 27. The proposed project aims to improve the operational efficiency of the energy sector in a multi-dimensional manner - loss reduction methods; modernization and digitalization of the system through advanced metering infrastructure, management; and commercial information systems. The financial performance is expected to improve with adherence to a tariff trajectory towards cost recovery. The social resilience would be strengthened with social protection systems to protect the vulnerable population who might be negatively impacted by tariff increases. 28. The proposed Project (estimated about US$ 50 million) will comprise the following components. The indicative scope and financing amount of each component is presented below, which will be refined during the project preparation. 29. Component 1. Rehabilitation and Upgrade of Distribution Networks. The purpose of this component is to reduce system losses and improve reliability of electricity services in selected areas of the distribution network. Currently, two distribution companies (SevereElectro and OshElectro) submitted their priority investment plans for inclusion into the proposed Project and other distribution companies are still preparing their priority investment plans, which will be reviewed during the project preparation. The subprojects will be selected based on key parameters, including: (i) technical and economic justification in terms of urgencies and potential impact; and (ii) readiness for implementation in terms of environmental and social aspects. 30. The support for the component would include: (i) rehabilitation and upgrade of selected substations (including transformers) and distribution lines; (ii) construction of new substations and distribution lines; (iii) training in network design, proper installation of equipment, and power system loss reduction and basic financial management. The project would also provide additional substation capacity where needed to be able to evacuate the energy supply to expected (new) demand centers. 31. Investments at primary substations will help increase the capacity for distribution thus increasing the supply reliability. Investments at distribution substations and distribution lines will also help reduce technical losses. The component will target key investment needs in major areas of new developments as well as areas where distribution Dec 08, 2021 Page 9 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) overloads are already present (obsolete and/or overloaded) given continuous demand growth. The subprojects will be selected based on key parameters described above. 32. Component 2. Digitalization of distribution network. This component will focus on application of digital solutions and reduction of commercial losses for services distribution companies provide to customers. Financing will be provided for supply, installation, as well as necessary training to employees’ operation of the management information systems. Digitalization solutions and IMS eligible under this Project could include Enterprise Resource Planning (ERP) system, Outage Management System (OMS), Geographic Information System (GIS) and SCADA (Severelectro has integrated some IMS tools under the ESARIP project in 2019). The detailed scope, technical design and functional specifications will be finalized during project preparation, which but may include Commercial Management System (CMS), Incidence Recording and Management System, Corporate Resource Management System. 33. Component 2.2 Installation of advanced metering infrastructure: this component will finance installation of advanced metering systems in the distribution infrastructure where metering devises are not yet installed. The investment may include replacement of old meters and new installations, and the scope will be finalized based on the investment programs and finance priority investments (with highest potential for reducing losses and improving reliability of supply) identified2. 34. Component 3. Strengthening social protection systems. This component will support the GoKR in (1) designing the specific parameters of the social measures to offset potential negative impacts of the energy reform on poor and vulnerable households, and the roll out plan; and (2) improving the effectiveness of its social protection delivery systems to better contribute to sustained poverty reduction as well as the preparedness to protect poor and vulnerable groups from future shocks affecting households’ income. The component can also be PBC-based. It will finance the following activities: • Component 3.1 Enhancing effectiveness of social benefits and improving responsiveness of social assistance to shocks. This subcomponent will aim to improve the UBK program through supporting the following actions: a. adjusting the targeting system and eligibility criteria to reduce exclusion (and inclusion) errors and promote labor participation and link with employment services and income generating activities. (b) testing, adjustment and rollout of the benefit size to ensure a higher contribution of the UBK to poverty reduction, (c) developing the framework of adaptive social protection including a menu of disaster response options based on the current SP system design. • Component 3.2 Modernizing IT systems for social assistance systems. The subcomponent will support the development of the concept of the upgrade of the IT systems, data cross-check and integration. In order to improve efficiency of the system, and fine tune the selection of beneficiaries’ process, the proposed project would support the (development of) modernization of the information system and the strengthening and integration of the registry of beneficiaries with other databases and roll out the utilization of the data cross check to select beneficiaries and reduce errors and fraud. 35. Component 4. Institutional development and project implementation support. This component will support GoKR in design and implementation of priority energy sector reforms, development of necessary institutional capacity of 2 As per the GoKR, out of about 1.5 million electricity customers, currently only around 15 percent are equipped with smart meters. The remaining are mainly with mechanical and/or outdated meters, which are amin drivers of commercial losses and metering inaccuracy. Dec 08, 2021 Page 10 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) energy stakeholders as well as extend project implementation support to beneficiaries of this Project. The specific areas may include, among others, the following: a. Institutional strengthening and capacity building – This subcomponent will support the institutional strengthening of the sector and provide capacity building to key stakeholder. The activities could include support on the (i) establishment of a sector planning unit at MOE and project beneficiaries; (ii) modernization of business process of distribution companies; (iii) design and implementation of communications campaigns to accompany tariff reforms and convey accurate and sufficient information to enhance public acceptance; and (iv) gender action plan and customer satisfaction surveys; b. Project implementation support – this subcomponent will provide implementation support for PMO and PIUs including monitoring and supervision, project financial audit, and training and operating costs; and c. Studies – This subcomponent will support key sector studies, including feasibility studies for future priority investment projects and other sectoral studies to enhance the sector/utility performance. Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No Summary of Screening of Environmental and Social Risks and Impacts . . CONTACT POINT World Bank Yun Wu, Laurent Loic Yves Bossavie, Maksudjon Safarov Senior Energy Specialist Borrower/Client/Recipient Kyrgyz Republic Ruslan Tatikov Deputy Minister r.tatikov@minfin.kg Dec 08, 2021 Page 11 of 12 The World Bank Energy Sector Financial Recovery Project (P177871) Implementing Agencies Ministry of Energy Tilek Aitaliev Deputy Minister aitalievcpd@gmail.com FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects APPROVAL Task Team Leader(s): Yun Wu, Laurent Loic Yves Bossavie, Maksudjon Safarov Approved By APPROVALTBL Practice Manager/Manager: Country Director: Sascha Djumena 17-Jan-2022 Dec 08, 2021 Page 12 of 12