The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
REPORT NO.: RES51015
RESTRUCTURING PAPER
ON A
PROPOSED PROJECT RESTRUCTURING
OF
LIBERIA ACCELERATED ELECTRICITY EXPANSION PROJECT (LACEEP)
APPROVED ON MAY 30, 2013
TO
THE REPUBLIC OF LIBERIA
April 27, 2022
Energy and Extractives Global Practice
Western and Central Africa Region
Regional Vice President: Ousmane Diagana
Country Director: Pierre Frank Laporte
Acting Regional Director: Ashish Khanna
Practice Manager: Ashish Khanna
Task Team Leaders: Ky Hong Tran, Zubair K.M. Sadeque
The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
ABBREVIATIONS AND ACRONYMS
AF Additional Financing
CMS Customer Management System
GoL Government of Liberia
HFO Heavy Fuel Oil
FY Fiscal Year
LACEEP Liberia Accelerated Electricity Expansion Project
LEC Liberia Electricity Corporation
LV Low Voltage
MME Ministry of Mines and Energy
MV Medium Voltage
PDO Project Development Objective
RAP Resettlement Action Plan
TA Technical Assistance
WAPP West African Power Pool
The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
BASIC DATA
Product Information
Project ID Financing Instrument
P133445 Investment Project Financing
Original EA Category Current EA Category
Partial Assessment (B) Partial Assessment (B)
Approval Date Current Closing Date
30-May-2013 30-Apr-2022
Organizations
Borrower Responsible Agency
Liberia Electricity Corporation,Ministry of Lands, Mines
Republic of Liberia
and Energy
Project Development Objective (PDO)
Original PDO
The project development objectives are to increase access to electricity and strengthen institutional capacity in the
electricity sector.
OPS_TABLE_PDO_CURRENTPDO
Summary Status of Financing (US$, Millions)
Net
Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed
IDA-56800 24-Jun-2015 20-Aug-2015 28-Nov-2016 30-Apr-2022 60.00 53.88 5.73
IDA-52520 30-May-2013 03-Jul-2013 25-Nov-2013 30-Apr-2022 35.00 32.55 0
Policy Waiver(s)
Does this restructuring trigger the need for any policy waiver(s)?
No
The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING
1. The original financing of the Liberia Accelerated Electricity Expansion Project (LACEEP), in the amount of
SDR 23.4 million (IDA Credit 5252-LR), and its Additional Financing (AF), in the amount of SDR 42.7 million (IDA Credit
5680-LR), were approved by the World Bank Board of Executive Directors on May 30, 2013, and June 24, 2015,
respectively. The Financing Agreement (FA) for the original financing was signed on July 3, 2013 and became effective on
November 25, 2013. The FA for LACEEP-AF was signed on August 20, 2015 and became effective on November 28, 2016.
The original closing date of LACEEP was April 30, 2018, which was extended to April 30, 2020, following the approval of
the AF for the project. A second extension of the project closing date to April 30, 20221 was approved on January 13,
2020. The project is implemented by the Liberia Electricity Corporation (LEC) and the Ministry of Mines and Energy (MME),
previously Ministry of Lands, Mines and Energy (MLME). With MME implemented component completed already, LEC
remains the only implementing agency at this stage of the project.
2. The purpose of this restructuring is to extend the closing date of the IDA Credit 5680-LR by another three months
from April 30, 2022 to July 31, 2022. The request for closing date extension was received from the Government of Liberia
(GoL) on April 13, 2022.
A. Implementation Status
3. The Project Development Objective (PDO) is to “increase access to electricity services and strengthen the
institutional capacity in the electricity sector”. Progress towards the achievement of the PDO is rated Satisfactory, and the
overall implementation progress is also rated Satisfactory. The project has already exceeded its target of reaching 280,000
people with access to electricity. As of March 2022, some 350,000 people have been reached with electricity and another
50,000 people (10,000 connections) can be reached within the proposed three-month extension of the closing date of IDA
Credit 5680-LR.
4. All contracts under LACEEP-original financing (IDA Credit 5252-LR) have been completed and funds have been fully
disbursed. About 100 percent of the funds under the LACEEP AF (IDA Credit 5680-LR) have been committed with the total
disbursement rate standing at 89.552 percent as of April 12, 2022. The implementation of the project was negatively
impacted by the COVID-19 pandemic (2020-2022) which delayed some works by contractors and the shipment of materials
as a result of supply chain issues. The project will not be able to complete currently on-going works by the scheduled
closing date of April 30, 2022, leaving about 10,000 households unconnected. A three-month extension of the closing date
to July 31, 2022 is needed to ensure successful completion of the on-going activities and enhance the impact of the project
by providing additional households with access to electricity.
Status of Implementation Progress
5. Activities financed under the LACEEP original financing included the following:
1 Second extension was requested due to accumulated initial delays caused by the factors that were largely outside the project’s
control such as Ebola Pandemic, delays with compensation to project affected people and insolvency of the contractors.
2 As of April 12, 2022 – total disbursement rate of all sources of financing is 93.3 percent and FY22 disbursement ratio is 45.7 percent.
Total disbursement of AF is 89.55 percent.
The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
(a) Component 1: Extension of electricity transmission and distribution systems (US$20 million equivalent). This
component financed the 66 kV Paynesville (Monrovia)- Kakata distribution and transmission lines and the 66/33
kV Kakata substation. This was completed and has been energized since March 31, 2020. The distribution network
in communities along the Monrovia - Kakata corridor and within Kakata was also completed in December 2017.
About 168 km of Medium Voltage (MV) and Low Voltage (LV) distribution networks were constructed and 17,800
customers were connected (against than the original target of 10,300). All Technical Assistance (TA) and project
management activities under the component have also been completed.
(b) Component 2: Construction of heavy fuel oil (HFO) facilities for off-loading, transport, and storage of and
support for optimization of HFO procurement (US$11 million equivalent): This component financed the
construction of a 16,200 m3 capacity HFO storage facility and a 1.2 km pipeline from the pier to connect the storage
facilities. This facility has been completed and LEC is now able to use HFO for running its thermal plants in the dry
season instead of the more expensive diesel fuel that was used previously. All TA activities under this component
have also been successfully completed. The assessment of options for procurement of HFO fuel on a competitive
basis was completed in 2017 and LEC has been procuring HFO competitively from the international market since
the 2019/20 dry season.
(c) Component 3: Support for the expansion of supply options and for the strengthening of the sector’s institutional
capacity (US$4 million equivalent). The activities under this component were to support a least cost supply and
sector planning for generation. This component was dropped at the request of the GoL as additional generation
capacity was not deemed as an immediate priority of the sector. All other activities related to project management
under this component were successfully completed with total costs of approximate US$1.0 million equivalent and
the Project Management Unit at the MME was dissolved on December 31, 2017. Support for a least cost
generation expansion option was later supported from the West African Power Pool - Cote d'Ivoire, Sierra Leone,
Liberia, and Guinea Power System Re-development Project (P113266).
6. Activities supported by the AF3 under the select components of LACEEP which have been renamed include the
following:
(a) Component 1: Extension of electricity transmission and distribution systems and connection of new users (total
amount of financing: US$73 million equivalent including US$53 million of AF). Three out of four transmission
lines as part of works to electrify the Greater Monrovia (Northwest) have been completed and handed over to
LEC for operation in 2021. The remaining transmission line (Gardnersville–Kle) will be completed in end-April 2022.
Four out of five 66/22 kV substations financed under the project were also completed in 2021. The remaining
substation is pending final tests before handing over to LEC by the end of April 2022. The distribution network to
enable providing new connections to communities along the transmission corridors however is behind schedule
and will not be fully completed by the current closing date. It is estimated 90 percent of the distribution network
will be completed by the project closing date. The uncompleted work in distribution lines is estimated to cost up
to US$1.2 million, equivalent to 2.0 percent of the project budget. An estimated 10,000 households will not be
connected if the project closing date is not extended. There were initial delays in mobilizing contractor and in
shipment of materials due to COVID-19 pandemic (2020-2022). Some delays were also due to some unresolved
Resettlement Action Plan (RAP) issues that emerged after RAP implementation, which required compensation to
newly identified Project Affected Persons (PAPs) as well as re-alignment of the transmission and distribution lines
to minimize the number of PAPs.
(b) Component 2: Strengthening LEC’s commercial capacity (total amount of financing: US$11 million equivalent
including US$7 million of AF). All activities under the component have been completed. The Integrated
3No additional funding was provided for the Component 2: Construction of HFO Facilities for Off-loading, Transport, and Storage and
Support for Optimization of HFO Procurement.
The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
Management System (IMS) for LEC has been completed and all the main modules are now operational. The take-
over of the token generator, the critical component for operationalizing the Customer Management System
(CMS), has also been completed to allow customer vending to be managed on the CMS. The component also
supported the interim management in 2017 when LEC was transitioning from one management service contract
to another.
7. Risks of ineligible expenditure. One of the supply and installation contractors (Shenzhen Farad) for the
construction of distribution network in Bomi/Grand Cape Mount under the AF credit was terminated in May 2019 by LEC
due to non-performance by the contractor. The works were later completed by a different contractor. However, an
advance payment of US$606,964.67 was paid to Shenzhen Farad before the contract was terminated, but it was not
recovered by LEC before the advance payment guarantee expired. After a partial recovery, an amount of US$416,063.10
remains outstanding despite numerous notices and efforts to reach the contractor by LEC. LEC has sent a final notice on
April 6, 2022 with a claim of US$506,656.90 (which includes a liquidated damage claim) to be settled by May 30, 2022.
LEC intends to initiate legal proceedings against the contractor after May 2022 and also intends to request the World Bank
for debarment of the contractor as per IDA procurement guidelines.
8. Outstanding complaint registered with World Bank’s Grievance Redress Service (GRS). A complain from a private
company is registered with the World Bank GRS related to a dispute over ownership of a land where one of the project
substations (Kakata) is constructed financed under the original credit. The land was acquired by the implementing agency
LEC through voluntary land donation from the former land-owner (an individual) in possession of the legal title to this
land. Later, the complainant company filed a case in the national court after rejecting LEC’s proposal for dispute referral
to a professional mediation. The matter is pending at the national court and the World Bank will continue monitoring
LEC’s response to the ultimate decision from the court (as part of supervision of another on-going project, LESSAP-
P173416).
9. The project has already exceeded its main outcome indicator of reaching households with access to electricity
compensating for the deficit in reaching the other outcome indicator of connecting commercial customers (62 connected
as of March 31, 2022 against the target of 450). The legal covenants stipulated in the legal agreements have been complied
with, and there are no overdue audits or interim financial reports. Safeguards, financial management4, procurement and
project management performance are rated Moderately Satisfactory.
B. Rationale for Restructuring
10. The project remains of strategic importance and relevance to the GoL. The PDO is in line with the country’s
National Electricity Policy promulgated in 2009 and the National Electrification Strategy developed in December 2020
aiming for universal access to electricity by 2030. By providing electricity to households, institutions, and businesses, the
4 Overall, the FM rating for the project is maintained at Moderately Satisfactory and the FM risk is Substantial. The current rating
indicates that there are minor shortcomings in FM, but these do not prevent the timely and reliable provision of information required
to manage and monitor the implementation of the project. The Interim Financial Report (IFR) and the Designated Account
Reconciliation Statements were reviewed during the last implementation support mission with the objective of ensuring that IFRs
records are maintained, and the reconciling items resolved. The IFRs were reviewed without exceptions. The audited financial
statement for the fiscal year ending June 30, 2021 was received on time and an unqualified opinion was issued by the Auditor General
of the Republic of Liberia.
The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
project supports livelihood development and will facilitate economic recovery in the aftermath of the COVID-19 pandemic.
It also supports the financial recovery of LEC by regularizing illegal connections and corresponding commercial losses.
11. The GoL’s request for the extension of the closing date is justified as it will enhance the impact of the project by
reaching 10,000 more connections (50,000 people) by the extended closing date. The task team discussed with LEC the
possibility of completing the remaining activities with LEC resources, but given the current financial position of the utility,
LEC is unable to mobilize internal resources to complete the work. Without the completion of the LV line construction and
installation of the meters, materials already procured will be left un-utilized or stolen, and the distribution network will
be vandalized. LEC has made concrete plans to complete these connections within the extended closing date and the task
team will maintain close monitoring to ensure completion of the work within the extended closing date. While the COVID-
19 pandemic caused scarcity of equipment and delays in arrival of goods on sites and expatriates travel restrictions, the
project is now on track to complete ongoing activities by the proposed closing date of IDA Credit 5680-LR.
II. DESCRIPTION OF PROPOSED CHANGES
12. Credit closing date extension. It is proposed to extend the closing date of IDA Credit 5680-LR by another three
months, from the current closing date of April 30, 2022 to July 31, 2022 to allow for adequate time to fully implement all
project activities. The proposed three-months extension will be the second extension of the closing date of IDA Credit
5680-LR and will result in cumulative extension of 27 months beyond its original closing date. With this extension the
overall duration of the project will be 85 month old. The proposed closing date extension meets the requirements of the
World Bank Investment Project Financing (IPF) Directive regarding extension of closing dates, specifically: (i) the PDOs
remain achievable, and the performance of the Recipient remains satisfactory; (ii) the World Bank and the Recipient
agreed on actions that will be undertaken by the Recipient to complete project critical activities (attached in this
restructuring paper); and (iii) there are no outstanding audit reports or audit reports which are not satisfactory to the
World Bank.
13. Disbursement estimates and implementation schedule are revised to reflect the new closing date of IDA-56800
credit.
III. SUMMARY OF CHANGES
Changed Not Changed
Loan Closing Date(s) ✔
Disbursement Estimates ✔
Implementation Schedule ✔
Implementing Agency ✔
DDO Status ✔
Project's Development Objectives ✔
Results Framework ✔
Components and Cost ✔
The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
Cancellations Proposed ✔
Reallocation between Disbursement Categories ✔
Disbursements Arrangements ✔
Overall Risk Rating ✔
Safeguard Policies Triggered ✔
EA category ✔
Legal Covenants ✔
Institutional Arrangements ✔
Financial Management ✔
Procurement ✔
Other Change(s) ✔
Economic and Financial Analysis ✔
Technical Analysis ✔
Social Analysis ✔
Environmental Analysis ✔
IV. DETAILED CHANGE(S)
OPS_DETAILEDCHANGES_LOANCLOSING_TABLE
LOAN CLOSING DATE(S)
Original Revised Proposed Proposed Deadline
Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal
Applications
30-Apr-2020, 30-
IDA-52520 Effective 30-Jun-2018
Apr-2022
IDA-56800 Effective 30-Apr-2020 30-Apr-2022 31-Jul-2022 30-Nov-2022
OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE
DISBURSEMENT ESTIMATES
Change in Disbursement Estimates
Yes
Year Current Proposed
The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
2013 0.00 0.00
2014 222,515.00 222,515.00
2015 990,701.59 990,701.59
2016 7,841,868.55 7,841,868.55
2017 19,157,624.15 19,157,624.15
2018 17,137,024.17 17,137,024.17
2019 14,141,553.81 14,141,553.81
2020 13,029,382.54 13,029,382.54
2021 7,949,260.45 7,949,260.45
2022 8,000,000.00 7,000,000.00
2023 0.00 1,000,000.00
.
The World Bank
Liberia Accelerated Electricity Expansion Project (LACEEP) (P133445)
Annex 1. Actions that will be undertaken by the Recipient to complete the project critical activities
No Activity May June July
1 Importation of all materials
2 Completion of MV/LV network
3 Installation of meters
4 Resolution of all RAP issues
5 Final commissioning/handover