Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) AFRICA | Kenya | Energy & Extractives Global Practice | IBRD/IDA | Technical Assistance Loan | FY 2015 | Seq No: 5 | ARCHIVED on 14-Apr-2017 | ISR26848 | Implementing Agencies: Key Dates Key Project Dates Bank Approval Date:24-Jul-2014 Effectiveness Date:02-Oct-2014 Planned Mid Term Review Date:31-Oct-2017 Actual Mid-Term Review Date:-- Original Closing Date:28-Feb-2021 Revised Closing Date:28-Feb-2021 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective (PDO) is to strengthen the capacity of the GoK to manage its petroleum sector and wealth for sustainable development impacts. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Component A: Petroleum Sector - Reforms and Capacity Building:(Cost $45.67 M) Component B: Revenue and Investment Management - Reforms and Capacity Building:(Cost $6.65 M) Component C: Sustainable Impact of Oil and Gas Industry - Reforms and Capacity Building:(Cost $5.12 M) Component D: Project Management:(Cost $3.47 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Satisfactory  Moderately Satisfactory Overall Risk Rating  Substantial  Substantial 4/14/2017 Page 1 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Implementation Status and Key Decisions This ISR summarizes the findings of the third implementation support mission (May 2016) and the progress achieved since the last ISR of December 23, 2015 Overall Progress - Overall the KEPTAP project receives a moderately satisfactory rating. As per the end of the 4th quarter of 2016 the project had disbursed $6.04 million or 14.15% of the credit. Two contracts have been completed and there are a large number of activities under implementation or currenly under procurement. A large number of new activities for inclusion in the procurement plan have been identified during the Mission.61 training programs where 567 persons (one-third of which female) were trained. A training feedback survey conducted in December 2016 indicates that the vast majority of respondents felt the training was extremely relevant and has a very high impact on their jobs. Satisfaction levels are high. The PMU and the two PIT’s are nearly fully staffed, with the one remaining position to be filled in April 2017. With the completion of the Strategic Environmental and Social Assessment (SESA) prior the end of 2016, an important legal covenant of the KEPTAP Financing Agreement was met. The restructuring of KEPTAP to include the co-financing by GAC was completed and the Amendment letter to the Financing Agreement as well as the Grant Agreement for the co- financing were signed. Institutional Review: The Institutional Review kicked off early September 2016. The Interim Report is due to be submitted to the Ministry end February 2017. Strategic Environmental and Social Assessment (SESA): The SESA report received clearance from the Bank on December 31st, 2016 in line with the legal covenant between the Bank and GoK. Additional recommendations made by the Bank will be included in the final version due in February. The report will be presented to the project beneficiaries in April with particular attention to the recommendations presented in the report. Procurements for the Transaction Advisors, the Communications Campaign and to be completed in the next several weeks. Transparency and Accountability: Based on finding from the mission carried-out in May 2016, the challenges in implementing a specific transparency and accountability framework seems to be due to lack of clarity on who the Government champions would be to drive this forward in collaboration with the private sector and the civil society organizations. The mission identified GoK champions from the PDU, the NT and MoEP. Additionally, this agenda will include champions from the civil society and private sector. Over the next several month the Bank team will seek to work with stakeholder in this area to develop an action plan to address transparency and accountability in the sector. 4/14/2017 Page 2 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) 4/14/2017 Page 3 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Risks 4/14/2017 Page 4 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Substantial  Substantial Macroeconomic  --  Low  Low Sector Strategies and Policies  --  Substantial  Substantial Technical Design of Project or Program  --  Substantial  Substantial Institutional Capacity for Implementation and Sustainability  --  Substantial  Substantial Fiduciary  --  Moderate  Moderate Environment and Social  --  Moderate  Moderate Stakeholders  --  Substantial  Substantial Other  --  --  -- Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Policy, legal and regulatory acts, prepared under the project, approved and in force (legally effective) by relevant sector ministries (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Draft Petroleum Bill and Draft Petroleum Bill, draft National Energy Key Policy and draft National Energy Policy submitted for No acts prepared under Legal Acts Value Policy and draft parliamentary approval. the project approved and Sovereign Wealth Fund It is anticipated that that in force Bill submitted it will become an act by early March 2017. Date 01-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments - Approval of SWF Bill has been put on hold until after Presidential elections scheduled for Q4 2017. - Environmental regulatory framework was omitted from this indicator at project design, however upon further evaluation, it will be included at Mid-term review. - Under KEPTAP, a consultant will be procured to support DOSH in the formulation of regulations in occupational, health and safety aspects within the petroleum sectors. Procurement is currently at the EIO stage – four months the consultants will be hired. The regulations will have to be approved by parliament. 4/14/2017 Page 5 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) PHINDPDOTBL  Staff of petroleum sector management institutions trained to regulate, manage and monitor compliance in the sector (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 67.00 428.00 80.00 Date 01-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments MoEP – 97 NOCK – 110 ERC – 45 KPC – 22 NEMA -16 DOSHS – 13 MoH – 5 CSOs – 18 NT – 24 OGA - 34 KRA – 33 KEBS – 11 PHINDPDOTBL  Percentage of petroleum production and transmission projects per year subject to formal environmental and safety inspections following good international practices set under the project (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 Date 01-Dec-2014 15-Jun-2015 01-Feb-2017 28-Feb-2021 Comments With support from KEPTAP, relevant equipment is expected to be delivered in early 2017. However, this indicator will need to be revised at mid-term review as petroleum production activities are not expected until 2020 and the formulation of this indictor is vague. PHINDPDOTBL  Report published, and made publicly available, in accordance with internationally recognized transparency standards. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 4/14/2017 Page 6 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) report Value No reporting No reporting No reporting published Date 01-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments An action plan for transparency in the oil and gas sector is currently being developed under the project. Overall Comments Intermediate Results Indicators PHINDIRITBL  Fiscal policy rule in place for transfer of oil/gas revenue to the annual budget (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No Fiscal policy on No Fiscal policy on Fiscal rule in No Fiscal policy on transfer Value transfer of oil/gas transfer of oil/gas place and of oil/gas revenues revenues revenues enforced Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments As of Feb 2017 - Draft process for the legislation on the SWF has commenced, Macroeconomic analysis is in progress and fiscal rules or guidelines to inform the legislation should be in place by Dec 2017. PHINDIRITBL  Multi-year perspective in fiscal planning, expenditure policy and budgeting (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The majority of important investments are Multi-year budget Multi-year budget Multi-year budget selected on the formulation in place, but no formulation in place, formulation in place, but basis of clear process of but no clear process of no clear process of relevant sector Value investment project investment project investment project strategies and selection and recurrent selection and recurrent selection and recurrent recurrent cost cost budgeting cost budgeting cost budgeting implications in accordance with sector allocations and 4/14/2017 Page 7 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) included in forward budget estimates for the sector. Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments Multi-year budget formulation in place, there is ongoing analytical work on Public Investment Management by another department in the Bank (Governance GP). Discussions are ongoing on the best approach for section B3 of component B PHINDIRITBL  The score of Public Expenditure and Financial Accountability Assessment (PEFA) Performance Indicator (PI) 6 (comprehensiveness of information included in budget information) improved (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value C C C B Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 PHINDIRITBL  Number of staff trained at Treasury to forecast, collect, and manage oil revenues. (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 25.00 10.00 Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments As of Feb 2017 - 25 staff have received training on the IMFs FARI model. 4/14/2017 Page 8 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) PHINDIRITBL  A comprehensive stand-alone Petroleum Policy that covers both upstream and downstream aspects approved and effective (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No Petroleum Policy No Petroleum Policy PP legally in Value No Petroleum Policy (PP) (PP) (PP) force Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 PHINDIRITBL  A new regulatory body for the petroleum sector, "Kenya Petroleum Authority", reporting to the Cabinet Secretary of MEP, is established and functional (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target First deliverable Upstream Petroleum issued Upstream Petroleum Regulatory Authority (e.g.Field Regulatory Authority (UPRA) is provided for Development Kenya Petroleum Authority (UPRA) is provided for Value in the Draft Petroleum Plan does not exist in the Draft Petroleum Bill which has been reviewed/appro Bill which is not submitted to parliament ved, exploration enacted for approval. license approved, etc.) Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 PHINDIRITBL  NOCK is restructured in order to execute its mandate as a National Oil Company that takes commercial positions in oil and gas license as well as represents the State Participation in Joint Ventures (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target NOCK is not NOCK is not NOCK is fully Value NOCK is not restructured restructured restructured restructured Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments As of today, NOCK does not have any regulatory functions, except with regards to the management of data through the data center. The data center will eventually be moved to UPPRA once it’s been established. However one area of consideration is how that transition is made including moving the data and the people who manage it. The IR will provide some of the analytical basis for NOCK in developing the transformation plan, however there were some delays in launching the IR. The IR for NOCK should be finalized in Feb/March 2017 at which time they can commence preparation of the transformation plan. They have the ToRs but they need to be updated (remove references to mandate and organizational structure) and then processed ASAP. Transformation plan to be completed in the next 18 months. 4/14/2017 Page 9 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) PHINDIRITBL  Number of staff from MEP, NOCK, ERC, KPC, OAGDJ and Petroleum Authority that have completed sector-relevant training funded through the KEPTAP project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 35.00 311.00 60.00 Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments As of Dec 2016, 311 people have received preliminary training. The breakdown by government agency is below. MEP – 97 NOCK – 110 ERC – 45 KPC – 22 OAG DJ - 37 PHINDIRITBL  Number of staff from DOSHS and other lead agencies responsible for enforcement of safety and health regulation in the sector (e.g. ERC, Petroleum Authority) that have completed sector-relevant trainin (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 30.00 96.00 10.00 Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments As of Dec 2016, 96 people have received preliminary training. The breakdown by government agency is provided below. DOSHS – 12 ERC – 45 NDOC – 23 NEMA - 16 4/14/2017 Page 10 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) PHINDIRITBL  A dedicated gender assessment identifying any potential gender-specific impacts of the sector is completed (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Gender No gender assessment No gender assessment No gender assessment Value Assessment available available available finalized Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Comments The procurement process for the gender assessment is currently underway. It is expected that the assessment will be finalized by Mid-June 2017. PHINDIRITBL  Number of public agencies plus organizations engaged in transparency and community monitoring trained on transperancy monitoring across the extractive sector value chain (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 5.00 5.00 15.00 Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 PHINDIRITBL  Local content policy approved and effective (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Policy legally in Value No Local content policy No Local content policy No Local content policy force Date 31-Dec-2014 16-Dec-2015 01-Feb-2017 28-Feb-2021 Overall Comments The project will procure consultants to assist with the development of the cross –sectoral Local Content Policy will also cover development of the local content regulations under the Petroleum Bill (MOEP). A TOR has been drafted for comment by MOITC and MOEP to be advertised by week of Feb 20, 2017. The objective of this assignment is to provide clear guidance and assistance to the GOK (MOITC & MOEP) in the development of a local content policy that governs local content across multiple sectors and oil and gas local content regulations to assure the sector does not underperform in delivering local content. The guidance will take into account international best practice with regard to local content and Kenya legislation that impacts the policy and the extractives sector to ensure alignment. It will also account for the recently devolved government structure in Kenya under the Constitution; the ambitions of Vision 2030; regional and international trade agreements; Kenya’s obligations to GATS and GOK FDI polices. 4/14/2017 Page 11 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P145234 IDA-55260 Effective USD 50.00 50.00 0.00 7.57 36.72 15% P145234 TF-A3418 Effective USD 3.51 3.51 0.00 0.00 3.51 0% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P145234 IDA-55260 Effective 24-Jul-2014 14-Aug-2014 02-Oct-2014 28-Feb-2021 28-Feb-2021 P145234 TF-A3418 Effective 24-Jul-2014 16-Nov-2016 16-Nov-2016 30-Jun-2021 30-Jun-2021 Cumulative Disbursements Restructuring History 4/14/2017 Page 12 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Kenya Petroleum Technical Assistance Project (KEPTAP) (P145234) Level 2 Approved on 12-Oct-2016 Related Project(s) There are no related projects. 4/14/2017 Page 13 of 13 Public Disclosure Copy