Documentof The World Bank FOR OFFICIALUSE ONLY ReportNo: T7682-IQ TECHNICAL ANNEX FORA PROPOSEDIDA CREDIT INTHE AMOUNT OFSDR 27.0 MILLION (US$40 MILLIONEQUIVALENT) TO THE REPUBLICOFIRAQ FORA DOKANAND DERBANDIKHANEMERGENCYHYDROPOWERPROJECT November30,2006 PrivateSector, Finance,andInfrastructureGroup MiddleEast andNorthAfrica Region 1This document has a restricted distribution and may be used byrecipients only inthe performance of their ! official duties. Its contents may not otherwise be disclosed without World Bank authorization. I REPUBLICOF IRAQ DokanandDerbandikhanEmergencyHydropowerProject (Exchange Rate Effective August 2006) Currency Unit = Iraqi Dinar (ID) ID1475 = US$l Abbreviationsand Acronyms CCGT CombinedCycle GasTurbine COE Commission of Electricity DDEHPP Dokan andDerbandikhan Emergency Hydropower Project EO1 Expression of Interest ESIA Environmentaland Social Impact Assessment ESMP Environmentaland Social Management Plan ESSAF Environmentaland Social Screening and AssessmentFramework FMR Financial Monitoring Report GO1 Government of Iraq IBRD International Bank for Reconstruction and Development ICB InternationalCompetitive Bidding IDA International Development Association (World BankGroup) I S N Interim StrategyNote ITF IraqTrust Fund(administered by the World Bank) KRG KurdistanRegionalGovernment MIM Master Implementation Manual MOE Ministry ofElectricity MOF MinistryofFinance MOPDC MinistryofPlanning andDevelopment Cooperation M W Megawatt NCB National Competitive Bidding OFFP Oil for Food Program OP Operational Procedure OPR Operational Procurement Review PAAH Pollution Abatement and PreventionHandbook PFS Project Financial Statements PIM Project Implementation Manual PMT Project Management Team PP Procurement Plan QCBS Quality and Cost-BasedSelection SBD StandardBiddingDocuments SDR Special Drawing Right TOR Terms of Reference UNDB UnitedNations Development Business us United States r- I Vice President : Daniela Gressani I Country Director : Joseph Saba Sector Director : Inger Andersen Sector Manager : JonathanWalters I Task TeamLeader : TjaardaP. Stormvan Leeuwen Table o f Contents BACKGROUNDAND STRATEGY ......................................................................................................................... 3 COUNTRYBACKGROUND .......................................................................................................................................... 3 INTERNATIONAL RESPONSE ....................................................................................................................................... 3 ELECTRICITY SECTORBACKGRO~D ........................................................................................................................ 4 KEYISSUES ................................................................................................................. 5 BANKRESPONSE STRATEGY.............................................................................................................................. INTHEELECTRICITYSECTOR AND 6 RATIONALEFORBANKINVOLVEMENT ...................................................................................................................... 7 APPLYINGLESSONS LEARNED ................................................................................................................................... 7 DETAILED PROJECTDESCRIPTION .................................................................................................................. 8 PROJECT OBJECTIVES ................................................................................................................................................ 9 PROJECT DESCRIPTION SUMMARY ............................................................................................................................ 9 PROJECTCOST AND FINANCING .............................................................................................................................. 10 INSTITUTIONAL ARRANGEMENTSAND PROJECT IMPLEMENTATION .............................................. 10 PROJECT MANAGEMENT TVRE...................................................................................................................... STRUC 10 PROJECT READINESS ............................................................................................................................................... 10 PROCUREMENT ........................................................................................................................................................ 11 DISBURSEMENT ....................................................................................................................................................... 13 FINANCIALMANAGEMENT ...................................................................................................................................... 14 BANKSUPERVISION, MONITORING EVALUATION............................................................................................ ENVIRONMENTALAND SOCIAL SAFEGUARDS.......................................................................................................... AND 14 15 FINANCIAL AND ECONOMICJUSTIFICATION ............................................................................................. 16 RISKS ......................................................................................................................................................................... 16 ANNEX 1: PROJECT DESIGNSUMMARY AND KEY PERFORMANCEINDICATORS ............,.............18 . . ANNEX 2: DETAILED PROJECTDESCRIPTION ................................................................... ......................... 21 ANNEX 3: PROJECT IMPLEMENTATION ARRANGEMENTS ..................................................................... 26 APPENDIX 3.1:ORGANIZATIONAL STRUCTURE OFIMPLEMENTINGAGENCY-MOE. KRG ......27 ANNEX 4: ELECTRICITY SECTORBACKGROUND ...................................................................................... 28 ANNEX 5: PROCUREMENTARRANGEMENTSAND PROCUREMENTSCHEDULE .............................. 40 APPENDIX5.1: ADDITIONAL PROVISIONS FORNATIONAL 43 APPENDIX 5.2: PROCUREMENTPLAN ...................................................................................................................... COMPETITIVE BIDDING.................................................. 45 APPENDIX5.3: ASSESSMENTMOEOFKRGCAPACITY TO IMPLEMENTPROCUREMENT.................................... OF 50 ANNEX 6: FINANCIAL MANAGEMENT AND DISBURSEMENT .................................................................. 52 FINANCIALMANAGEMENT ...................................................................................................................................... 52 DISBURSEMENT ....................................................................................................................................................... 55 ANNEX 7: ENVIRONMENTAL AND SOCIAL SAFEGUARDS ASSESSMENT FRAMEWORK ................57 APPENDIX7.1: TERMSOFREFERENCEFORENVIRONMENTAL SOCIALASSESSMENT AND ..................................... 61 ANNEX 8: RESPONSIBILITIESAND RESULT-MATRIX ................................................................................ 72 ANNEX 9: PROJECT FILES .................................................................................................................................. 74 ANNEX 10: TIMETABLE OF KEYPROJECT PROCESSINGEVENTS ........................................................ 75 ANNEX 11:NAMESOF STAFF/CONSULTANTSWHO WORKED ONTHE PROJECT ............................ 76 ANNEX 12: BANK PROJECTSINIRAQ ............................................................................................................. 77 ANNEX 13: IRAQAT A GLANCE ......................................................................................................................... 79 Map: IBRD 34967 REPUBLIC OFIRAQ DOKANAND DERBANDIKHANEMERGENCYHYDROPOWERPROJECT TECHNICALANNEX TO THE MEMORANDUM AND RECOMMENDATIONOF THE PRESIDENT MIDDLEEAST AND NORTHAFRICA MNSSD Date: November30,2006 TeamLeader: TjaardaP. StormvanLeeuwen CountryDirector: JosephP. Saba Sectors: RenewableEnergy(100%) Sector Director: Ingerhdersen Themes: Post-ConflictReconstruction Sector Manager: JonathanWalters ProjectID: PO99059 EnvironmentalScreening Category: Partial Assessment LendingInstrument: EmergencyRecoveryCredit ProjectFinancingData [ ] Loan [XI Credit [ 3 Grant [ ] Guarantee [-I Other: ~ For Loans/Credits/Others: Total BankFinancing(US$ million): 40.00 ProposedTerms: 35-year maturity with aten-year grace period. FinancingPlan(US$ mil.) Source US$million YO BORROWER I 0 1 0 I I INTERNATIONALDEVELOPMENT ASSOCIATION (IDA) 40 100% Total: 40 100% Borrower: Republic ofIraq ImplementingAgency: Ministry ofElectricity (MOE) ofthe KurdistanRegionalGovernment(KRG). __ EstimatedDisbursements(Bank FYNS$ millions) I I FY I 07 08 1 09 10 11 I Annual 1 5.00 10.00 5.00 5.00 'Cumulative I 15.00 1 5.00 20.00 30.00 35.00 40.00 I1 1 ~ ExpectedEffectivenessDate: January 31,2007 ProjectImplementationPeriod: October 1,2006 (advance procurement)to June 30,2010 ExpectedClosingDate: December 31,20 10 REPUBLICOFIRAQ DOKANAND DERBANDIKHANEMERGENCYHYDROPOWERPROJECT CREDIT AND PROJECTSUMMARY Recipient: Republic o f Iraq Beneficiary: Households and electricity consumers throughout the Kurdishregion and the rest o f Iraq. ImplementingAgencies: Ministry of Electricity (MOE) o f the Kurdistan Regional Government (KRG) Credit: IDA EmergencyRecovery Credit Amount & Terms: SDR 27.0 million (US$40.0 million equivalent); 35-year term with a ten-year grace period. Objectives& Description The objective o f the project is to help alleviate the current power supply shortfall through urgent repair works, and to prepare for the subsequent rehabilitation o f the Dokan and Derbandikhan hydropower plants to restore their original capacity, 400 and 249MW respectively. BenefitsandRisks: Benefits: The urgentrepairs financed under the project will improve the operating performance of both power stations benefiting households in three KRG Governorates, namely Dohuk, Sulaimaniyyah, and Erbil, as well as the interconnected Iraqi grid. The project is expected to directly impact approximately 490,000 beneficiary households thus improvingthe overall standard o f living. Moreover, the project will also supply power to industrial consumers connected to the grid. Risks: The main risks are the incidence o f corruption due to a weak control environment, slow project implementation progress due to unfamiliarity with the Bank's guidelines and procedures, low level o f competition and therefore high prices due to perception o f poor security and a structure that is not conducive to efficient operation of the sector. A detailed presentation o f risks and the proposed mitigationmeasures are providedinParagraph66. Project AppraisalDocument: This project has been prepared in accordance with Emergency Recovery Assistance procedures (Operational Policy 8.50). As such, this Technical Annex provides the information normally available in a Project Appraisal Document. Disbursement: The Credit will be fully disbursedby December 31,20 10. ProjectIDNumber: PO99059 BACKGROUNDANDSTRATEGY Country Background 1. Large oil reserves and abundant natural and human resources enabled Iraq to attain the status of a middle-income country in the 1970s. Income per capita rose to over US$3,600 in the early 1980s. Today, Iraq's human development indicators are among the lowest in the region. Per capita income dropped to below US$l,OOO by 2001. Per capita income in 2006 i s projected to be about US$1,700, only half o f what Iraqis enjoyed 25 years ago. Surveys suggest that poverty has worsened inrecent years and unemployment is estimated at about 30%. Today, most Iraqis have limited access to essential basic services, including electricity, water supply, sanitation, and refuse collection. Electricity supply, upon which essential services such as water supply, sanitation and hospitals rely, remains unreliable. In 1990, prior to the Gulf War, the total installed generating capacity was 9,295MW with a peak demand o f about 5,100 MW. Approximately 87% o f the population had access to electricity. A combination of wars, sanctions, looting, and vandalism has, however, severely affected the entire power system infrastructure in Iraq. Duringthe 1991 Gulf War the electricity system suffered severe damage: several transmission lines were put out o f service, substations were damaged, and power generation equipment was the most severely affected. The available capacity was reduced to 2,325MW and power cuts of up to fifteen hours or more were common'. Insome areas there was no supply at all. Currently available generating capacity i s inthe range o f 4,300 to 4,60OMW, but average power cuts during the summer lasted up to 12 hours a day. International Response 2. Duringthe summer of 2003, at the request of the international community, the World Bank and the United Nations Development Group produced a Joint United Nations/World Bank Iraq Needs Assessment. The total reconstruction needs, excluding oil and security expenditures, were estimated at around US$35.8 billion. The Needs Assessment served as a basis for an International Donor Conference held in October 2003 in Madrid, where donors pledged about US$32 billion for the period 2004-2007. Following the Madrid conference, the international community established the International Reconstruction Fund Facility for Iraq, which comprises a United Nations Iraq Trust Fund and a World Bank Iraq Trust Fund. Most o f the trust fund deposits have already been committed and projects are being implemented. 3. The major donor to the power sector is the United States (US) which has earmarked about US$4.3 billion for the electricity sector?. About US$1.6 billion is being spent on generation, US$1.7 billion on transmission and controls, and about US$1 billion on distribution. The United Nations Development Program through the Iraq Trust Fund (ITF) i s spending about US$170 million on various projects in the power sector and Japanese bilateral grant assistance i s providing about U S 2 0 0 million. The Japan Bank for International Cooperation has inprinciple allocated up to about US$1.5 billion to the electricity sector. The United Kingdom's Department for International Development currently has US$120 million committed to emergency infrastructure projects in power, water, fuel supply, and sanitation insouthern Iraq. While it i s expectedthat the power supply situation will improve as a result o f these investments, particularly ifthe fuel supply situation can be improved, the donor community has not focused its allocations to electricity projects for the KRG, which is in dire need o f support and development initiatives, especially for the electricity network. While considerable investments were UnitedNations/World Bank Joint IraqNeeds Assessment: Electricity (p. 1) October 2003. * The original allocation was US$5.5 billion, but US$1.2 billionwas reallocated to address security issues. - 3 - made in the power sector in Iraq, the quantity and quality of supply remains highly unsatisfactory and major investmenti s still needed to restorepower supply to acceptable levels. 4. The reconstruction o f Iraq has been hampered by a number o f hurdles, including government bureaucracy, corruption, and security concerns. More than three years since the invasion, Iraqis still complain of a lack of electricity. 5. The Ministry o f Electricity reports that many o f its projects funded by the US Iraq Relief and Reconstruction Fund are still not fidly completed. This is due to a number o f factors, including project delays, cost overruns due to increased security cost, and the constant risk o f insurgent attacks, which are diverting reconstruction resources to pay for security. 6. The Government o f Iraq (GOI) i s preparing an "International Compact for Iraq" -as was done in the case o f Afghanistan - to prepare a framework for the country's economic transformation and integration into the regional and global economy, in partnership with the international community and based on a shared vision. The Government's reform program i s expected to be implemented with financial and technical support from the international community. ElectricitySector Background3 7. While some of the damage of the 1991 war was repaired and about 4,500MW o f generating capacity was available in 2002, power supply remained unreliable throughout the 1990s and load shedding and unplanned power outages were frequent. After the most recent conflict, the situation deterioratedagain, particularly duringsummer months when demand was at its peak. 8. In 1999, Iraq reorganized its electricity sector. The sector was separated from the Ministry of Industry, and the Commission o f Electricity (COE) was established on June 21, 1999. In 2003, the Ministry of Electricity (MOE) was created to replace the COE. The MOE is responsible for both policymalung and electricity supply throughout the country. The operational functions (power generation, transmission, load dispatch and distribution) are no longer autonomous corporatized entities, but were reorganized into 18 geographically based directorates within the MOE. The two electricity departments in the KRG-one covering Sulaimaniyyah and the other covering Dohuk and Erbil Governorates-recently became part o f the MOE of KRG4. The Central Government's MOE cooperates with the localMOEo fKRG. 9. The Central Government's MOE i s worlung on upgrading the electricity system to provide consumers with reliable electricity. To achieve this end, the MOE has drafted a Master Plan for the sector for the years 2006-2015, which will tackle the following issues: . Ending the deterioration in the system through implementing effective operation and maintenance and undertaking comprehensive rehabilitation programs for the generation stations and the transmission and distribution networks; Sources: \~\~~~~.enrp.undp.orgigeneraYdefault.htm#background,United Nations/WorldBank Joint Iraq Needs and Assessment: Electriciw, October 2003. Following the separation from the grid in 1991, Local Electricity Authorities (LEAS)were established inDohuk, Erbil, and Sulaimaniyyah. The total staff o f 7,300 comprised approximately 1,000 in the Dohuk Electricity Authority (DEA), 1,700 in the Erbil Electricity Authority (EEA) and 4,600 in the Sulaimaniyyah Electricity Authority (SEA). - 4 - Upgrading and increasing capacity o f the system to meet the increasing demand for electricity; Developing and expanding the transmission and distribution systems throughout Iraq and executing projects that connect electricity to new residential areas; Improvingthe effectiveness of the system by maintaining the sustainability and stability o f electricity production inaddition to increasing the level o freliability; Providingbetter services to electricity users (households, commercial, industrial, agricultural, and governmental); Developingand supportingthe human cadre at the MOE; Connecting the electricity networkwith neighboring countries; and Enhancing per capita consumption o f electricity, by raising its current annual level of 1,100 kwhto 3,700 kwh. Key Issues inthe Electricity Sector 10. Deteriorated Infrastructure and Unreliable and Inadequate Fuel Supply. The physical and operating conditions o f the existing generation stations are such that many units need refurbishment or even replacement. Some new generating units (mainly gas turbines) were installed, but they often cannot be operated because of fuel supply problems. The transmission and distribution networks also suffered damage during the 1991 and 2003 conflicts and some o f the transmission and distribution assets have suffered from looting, vandalism, and sabotage. This situation combined with the lack o f generating to repeated interruptions. Besides the security o f pipelines, natural gas and diesel - which are the most capacity makes it difficult to meet demand. As a result, some networks are heavily loaded and are subject efficient fuel types for the generationplants inIraq - are largely unavailable. 11. Weakened Capacity. The Iraqi staff has good skills inrepair andmaintenance, which has ensured continued operation o f the power plants despite the shortage o f standard spare parts and incomplete commissioning by contractors who had to evacuate when war broke out. However, there i s a need to expose the staff to the latest technological developments and best practices in operation, maintenance, planning, design, and contract management to ensure efficient and sustainable operation o f the power system. 12. Uncertainty of Availability of Funds. Uncertainty about available donor funds and budgetary allocations from the Government has been an important factor for rehabilitation efforts not havingyet led to the desired results. Inadequate coordination between projects financed from donors and from the Central Government's MOE has also led to delays. Based on estimates carried out by the MOE, the average annual financing shortfall will be about US$1.5 billion over the next 9 years. However, the plan couldbe optimized to reduce the shortfall and the Bank would provide advice inthis respect. 13. Inadequate Tar$s, Low Cost Recovery, and Increased Cost of Doing Business. Prices o f petroleum products, fuel, and electricity are still distorted and do not reflect production costs or international market prices. Although billing has been partially reinstated, collection remains difficult because o f the current security situation. This problem is further exacerbated by the fact that the cost o f doing business has been increasing due to insecurity: security costs often amount to 30% o f the total cost o f a project. In the long term, adjusting energy prices to improve cost recovery and ensuring rationale economic investment choices are key elements in improving the financial viability o f the electricity sector. 14. Institutional Structure, Regulatory Reform, and Corporatization. The currently centralized structure o f the Central Government's MOE may not be the best option for the future o f the Iraq - 5 - electricity sector. Possible reforms could start with reverting back to the autonomous arrangements that were in place in 1999. However, modernization of the current legal and regulatory framework i s also required in view o f the recent decision to open the electricity sector to private investment. Over time private sector participation in the construction and manufacturing companies will increase if conditions are right and the correct signals are given. The M O E has to give careful consideration to moving away from direct management o f the electricity utilities and instead focusing on formulating sound electricity policy for creating a favorable investment climate and a clear regulatory kamework. Bank Responseand Strategy 15. Currently, thirteen projects amounting to about U S 4 0 0 million ingrant funds from the IraqTrust Fund (ITF) are under implementation. Ten of the ITF projects (for education, health, water supplyhanitation and urban services, community infrastructure, private sector development, social protection and a household survey), amounting to US387.6 million, are implemented by the Government o f Iraq and three are Bank-executed programs, of which two are for capacity building and one for assistance to the household survey. After a slow start, implementation is accelerating. Contracts awarded from ITF grant money have doubled since January 2006 and now total about U S 1 6 2 million. About U S 8 4 millionhas been disbursed. Contracts for an additional US$113 millionare inadvanced stages o f tendering. This i s a considerable achievement, considering that Iraq lacks recent experience with international donor procedures and has not borrowed fiom the Bank for 25 years5 An Iraqi consulting firm carries out fiduciary verification of the ITF projects and reports monthly on progress. Two IDA financed projects have been approved (US$ 100 million Third Emergency Education Project -November 2005, and US135 million Emergency Road Rehabilitation Project - June 2006), but these projects are not yet effective. The Bank is malung efforts with the new Government to accelerate effectiveness. The Bank's implementing arrangements seek to ensure Iraqi ownership and strengthen institutional capacity, which contrasts with the implementation arrangements usedby some donors. 16. The Bank also prepared a Second Interim Strategy for Iraq (ISN), discussed by the Executive Directors on September 15, 2005, which seeks to guide the development of efficient, transparent, and accountable institutions as a means o f supporting economic activity. The I S N stresses the need to restore basic service delivery. The importance o f power to the provision o f other basic services cannot be underestimated. Power i s central to sustainable economic, social, and environmental development as well as to poverty reduction and i s paramount to Iraq's overall development process. In this context, the Government o f Iraq has asked the Bank's financial support for the Dokan and Derbandikhan Emergency HydropowerProject (DDEHPP). 17. As indicatedinthe ISNfor Iraq, Governmentpriorities for the US$500 millionIDA allocation are for education, electricity, transport, and water supply. As per the Government's request that 17 percent of donor support be earmarked for projects in the KRG, the KRG explicitly requested that its share of the US3300 millionIDA allocation be concentrated inpower (US40 million) and roads (US45 million). 18. For the power sector, the Bank plans to support the Government with reconstruction and expansion6, as well as provide advice on several o f the aspects affecting efficient operation and sustainability o f the sector, as follows: Iraqreceived six IBRDLoans between 1950 and 1973, the last o f which closed in 1979. 6 Including another proposed IDA project for the rehabilitation o f Units 2 and 3 o fthe Hartha Power Station in southern Iraq, to be implemented by Ministryo f Electricity o f the Central Government. It is inan advanced stage o f preparation. The scope o f this project will also include the Bank's advisory support to the Ministryo f Electricity to help address key sector issues. - 6 - As plannedunder this project, provide investment financing for reconstruction, rehabilitation, and construction of new facilities, as well as technical assistance for institutional development, and capacity building. The Bank would also assist inensuring that projects are preparedproperly and that the bidding process i s transparent and therefore attracts the interest of financiers and contractors, as is the case withthe follow-up rehabilitation o f the two power plants. 0 Advisory support to the Government, including: (i) of the power sector structure and legal review and regulatory framework to help the Government adopt a structure conducive to more efficient and sustainable operation; (ii) preparation o f a strategy for private sector participation; (iii) preparation o f a strategy for conversion fromuse o f crude oil to natural gas for power generation; (iv) review o f planning methodology and criteria to ensure least-cost development, and; (v) design tariff reform to ensure tariffs are cost-reflective while protecting the poor. Rationalefor Bank Involvement 19. Inresponse to the tremendous need to rehabilitate and restore basic infrastructure facilities and services throughout Iraq, initial donor support was primarily directed to financing priority investments in the power and water sectors, as well as to improving key social services. Despite the relatively large resources channeled by the US and Japan for the reconstruction and rehabilitation ofthe electricity sector, current power supply meets only about 50% ofthe demand. 20. The proposedproject i s fully consistent with the World Bank's ISN for Iraq, which was prepared inconsultationwiththe GOI, and submittedto the World Bank's BoardofDirectors inSeptember 2005. The ISN, guided by Iraq's National Development Strategy o f July 2005, emphasizes the need for rapid rehabilitation o f critical infrastructure services and institutional support as pre-requisites for long-term sustainable recovery. 21. The KRG selected the two hydro-plants based on a least cost and rapid result approach. The combination of urgent repairs and technical assistance for subsequent rehabilitation o f the two plants will ensure some increase in generation capacity in the Kurdishregion in the short term and stabilization o f the national gnd when the rehabilitation i s complete. 22. Inaddition, the Bank's experience incapacity buildingand project preparation will help ensure effective future rehabilitation and sustainable performance o f the plants. The Bank plans to provide advisory services that will assist with reforming o f the sector to ensure commercial operation and sustainable development. The most urgent tasks are a review of: (i) the power sector structure, under which the Government i s responsible for policy, regulation, and operation, (ii) planning methodology to ensure least cost development; and (iii) tariffs to ensure they are cost-reflective while protecting the poor. 23. Given the Bank's experience with infrastructure reconstructionprojects and institutionbuildingin conflict-zones, it i s in a good position to assist the Government to complete the project successfully. It also permits the Bank to remain engaged with the Government's power sector rehabilitation and reconstruction plans, and to play a leadrole inthe donor community to attract other donor financing. Applying LessonsLearned 24. The Bank's recent project experience in Iraq has highlighted the importance o f Iraqi ownership and commitment for effective project implementation, and the need for international expertise to assist in project preparation and implementation. The Project Management Team (PMT) concept utilized in previous projects has proven to be quite effective and other donors are adopting it. EachPMT, supported from time to time by consultants, consists o f staff seconded on a full-time or part-time basis from various - 7 - departments within the implementing agency. Early in the preparation o f the project, the MOE o f KRG appointed a PMT, which has been fully involved in the preparatory work o f the project. The MOE is in the process of appointing other consultants to assist with the implementation. 25. Another lesson is that because of the limited capacity o f the PMT, project design should be simple with a limited number o f contracts. For this reason, the procurement plan has packaged together similar components of the two power plants, consisting o f control systems, excitation systems, and dam remedialworks. Except for the Derbandikhan switchyard, the remaining urgent repair contracts, totaling four, will consist o f small supply and install contracts that the KRG will award to the original equipment suppliers, and for which technical specifications have already been prepared. Independent experts will review all negotiated direct contracts for work carried out with funding from the UN Oil-for-Food Program (OFFP) prior to award to ensure that the contract amount and other terms are in line with international norms. For implementation supervision and technical assistance for preparation o f the complete rehabilitation, there will be only one consultancy contract. DETAILED PROJECT DESCRIPTION 26. Dokan and Derbandikhan hydropower plants, with a design capacity o f 400 MW and 249 MW respectively, are the two largest power stations inthe KRG, and are connected to the national power grid. Each i s part o f a multipurpose scheme for power production and imgation at each o f the locations. The Dokan dam i s located on the Lesser Zab River, approximately 220 kmupstream from its confluence with the Tigris River. The site i s located adjacent to the town o f Dokan. The DerbandikhanDam is located on the Sirwan Rwer, immediately upstream o f the town o f Derbandikhan. It is approximately 150 km upstream o f the Hemren Dam. The site i s approximately 395 km northeast of Baghdad and 65 h southeast o f Sulaimaniyyah city. It i s also within 15 kmo f Iranto the southeast. 27. Dokan Power Station became fully operational in 1979. Repair and maintenance have been substandard because of unavailability o f spare parts and equipment, contributing to long outages and unreliable performance. Moreover, due to the long operational period (27 years), the power plant i s now due for rehabilitation. This would need to be preceded by a detailed assessment o f the plant's condition and the safety o f the Dokan dam. The work would also explore the feasibility o f redesign of some of the equipment, inparticular the turbine and generator, inorder to increase the overall efficiency o f the power plant. Itwould also take into account the unavailability o f spare parts from the original manufacturer. 28. The construction o f Derbandikhan Power Station was completed in 1986 but operation commenced in 1990 due to a delay inthe construction o f the overhead line connecting the power plant to the national grid. Only one unit was commissioned by the contractor, who had to evacuate the site because of the Second Gulf War. The other two units came into operation without proper commissioning. A combination o f this and apparent faulty design o fthe turbine system are considered to have contributed to unsatisfactory performance o f this power plant since its commissioning. The plant suffers from severe cavitation o f the runners and draft tubes. It also needs complete rehabilitation preceded by investigation o f the cause o f cavitation and redesign. The Derbandikhan Dam has also suffered in its early days from a large slope failure on the right bank, approximately lOOm upstream o f the dam. As a result, subsequent modifications have been done, and monitoringhas indicated that additional slope movement is minimal. However, the data record i s scarce, and accordingly the current operating restriction on the minimal pool level will be maintained duringthe project, which will support restoration o f the slippage area. 29. Due to shortage o f power generation, it i s necessary that both power plants continue to operate. Therefore the project will support urgent repairs needed to keep the power plants operational, while studies and designs are being conducted for the subsequent rehabilitation. - 8 - ProjectObjectives 30. The objective o f the proposedproject i s to: (i) alleviate the current power supply shortfall in help the Kurdish region through urgent repair work; (ii) strengthen the capacity of local operational staff; and (iii) forthesubsequentrehabilitationoftheDokanandDerbandikhanhydropowerplants. The prepare reliability o f both power plants is very low and the effective capacity of each is below 50 percent. Subsequent rehabilitation would restore their original capacity of 400 and 249MW respectively. Project DescriptionSummary' ComponentI:Repairsfor Dokan (US$9.20 million) 1.1 Replacement o f the excitation systems 1.2 Spare parts for four compressors 1.3 Repair o fGIS for UnitNo. 1 1.4 Completion o f installation o fthe synchronous condenser 1.5 Replacemento f control systems 1.6Dam safety emergency work Component2: Repairsfor Derbandikhan(US$I8.6 million) 2.1 Replacement o f the excitation systems 2.2 Derbandikhan Switchyard 2.3 Replacement o f control systems 2.4 Dam Safety emergency work Component 3: Assessment of RehabilitationNeeds, EnvironmentalAssessment and Dam Safety, Engineeringand Other Support (US12.2 million) 3.1 Engineering services 3.2 Environmental and Social Impact Assessment 3.3 Other urgent remedial works 3.4 Support to the project management team 3.5 Supervision o f urgent repairs 3.6 Capacity building 'Detailed description o f the project components is shown inAnnex 3. - 9 - Project Cost and Financing 31. The estimated cost o f the proposed project, based on consultant estimates and previous quotations, is US$40 million including contingencies. The Ministry o f Finance (MOF) will pass on the total amount o f the IDA Credit to the MOEofKRGunder a Project Agreement. 32. T h e project will be implemented over a period o f 44 months starting October 2006 (reflecting advance procurement). The IDA Credit i s expected to become effective not later than January 2007. 33. The table below provides the cost estimate and financing plan for the project. The IDA Credit will finance all the project-related costs, except for salaries andbenefits o fPMT staff. These, estimated at US$500,000, will be coveredby the MOE o fKRG. ProjectCost Estimateand FinancingPlan __ -- I Excluding - - __ including __ - IDA %of IDA- ~ - _ --- ContingenciesContingencies,%ofTotal Financing Financing , 31.0% I INSTITUTIONALARRANGEMENTS PROJECTIMPLEMENTATION AND Project ManagementStructure 34. The PMT in the MOE o f KRG will be responsible for managing all project activities, including contract management, supervision and quality control, reporting, and administration o f project funds. Making payments to suppliers, consultants, and contractors, and ensuring that funds are disbursed according to Bank guidelines and procedures will also be the responsibility o f the PMT. The PMT model will provide the skills needed for effective project implementation, and yet permit the reintegration of seconded staff into their respective ministry structures at project completion. 35. An interim PMT with 8 to 10 experienced staff was appointed in March 2006 and has been workmg closely and effectively with World Bank staff to complete project preparation. To ensure that project implementation i s carried out promptly and efficiently, the PMT has officially been delegated the responsibility and autonomy to carry out implementation in accordance with World Bank guidelines and procedures and to serve as the focal point for communication with the World Bank, contractors, and consultants. All contracts financed through the IDA Credit will be signed by the Minister or a senior manager o f MOE o f KRG officially designated by the Minister. The PMT i s also responsible for preparing the quarterly project reports. Project Readiness 36. A dam specialist conducted a safety inspection ofbothdams inMay 2006 and submitted a report in July 2006. As recommended in the report, several urgent components have been included in the project scope. Direct contracting for urgent repairs of the two power plants is being finalized and the -10 - selection o f consultants-separately for the environmental assessment and engineering support-and other contracts is inprogress. Procurement 37. Procurement for this project will be carried out in accordance with the World Bank's Guidelines: Procurement under International Bankfor Reconstruction Development (IBRQ) Loans and IDA Credits, dated May 2004, Guidelines: Selection and Employment of Consultants by WorldBank Borrowers, dated May 2004, and the provisions stipulated in the Financing Agreement and the Project Agreement. For each contract to be financed by the Credit, the procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are reflected in the Procurement Plan (PP). The PP will be updated, as required, to reflect the actual project implementation needs and improvements in institutional capacity. A General Procurement Notice was published in the United Nations Development Business (UNDB on-line) on June 5, 2006, and will be revised after the project i s approvedby the IDA'SBoard o f Executive Directors. 38. Procurement of Works: Works procured under this project will include the replacement o f control systems for Dokan and Derbandikhan, rehabilitation o f Derbandikhan switchyard, and reinstatement o f Derbandikhan slippage area. Procurement o f works will be mainly carried out using International Competitive Bidding(ICB) and National Competitive Bidding(NCB) procedures acceptable to IDA. Works estimated to cost more than US$5 millionequivalent per contract will be procured using ICB procedures. The NCB standard bidding documents (SBD) for procurement o f works, which were prepared as part of the Master ImplementationManual (MIM), will be used. Shopping procedures, when needed, will be used for procurement o f works o f small value estimated at US$lOO,OOO or less per contract. 39. Seven works contracts (six will use supply and installation SBD and one works SBD) will be procured under this project. The contracts for works will include the implementation and monitoring o f immediate repair works needed to improve the performance o f the Dokan and Derbandikhan dams. Due to the nature o f the repair works required, the method used for the procurement o f this contract will be International Competitive Biddingfor Small Works (estimated at U S $ 5 million). 40. Procurement of Goods: Goods procured under this project will include excitation systems, compressors, gas insulated switchgear, condensers, IT and office furniture, equipment and supplies needed for project implementation, as well as vehicles. Procurement will be done using the Bank's SBD for all ICB. The NCB SDB for procurement o f goods, which were prepared as part o f the MIM, will be used for contracts estimated to cost less than US$200,000. Shopping procedures will be used for procurement o f goods o f small value estimatedat US$lOO,OOO or less per contract. 41. The supply and installation o f four contracts will be procured using sole source method. The equipment under these contracts totaling approximately US$3.0 million was procured under the UN OFFP, but installation was not completed. No follow-up action was undertaken since and the contracts are no longer valid. The remaining three contracts will be procured as ICB supply and install contracts. 42. Selection of Consultants: Consultants' services procured under this project will include: (i) selection o f consultants to provide engineering services, such as reviewing, updating, and finalizing detailed designs, preparing tender documents, and construction supervision; (ii) ESIA; and (iii)selecting specialized consulting firms and individuals to assist the PMT inproject implementation, training staff in procurement, financial management, project management, and other technical fields, as needed. The selection method will mainly be a Quality and Cost-Based Selection (QCBS) and advertising for expressions of interest (EOI) in the UNDB and local newspapers. International consulting firms may not -11 - be interested in some contracts while the security situation is volatile. Accordingly, it is possible that shortlists for consultants' services for some contracts may be composed entirely of national/regional consultants. It is also expected that consulting offices associated with local universities may be included inthe shortlists. University-based consultants will not be given preference over private consultants. A shortlist o f consultants for services estimatedto cost less than US$200,000 equivalent per contract may be composed entirely of national consultants in accordance with the provision o f paragraph 2.7 of the Consultant Guidelines. Assessment of the implementing agency's capacity to implementprocurement 43. An assessment of the MOE of KRG's procurement capacity has been carried out. This assessment i s based on discussions with MOE o f KRG staff inAmman, during the pre-appraisal mission inJuly 2006 andthe OperationalProcurement Review (OPR) for Iraqpreparedin2005. The completed standard agency procurement assessment report is available inthe Project File. 44. Inthe OPR for Iraqthat was carried out inJune 2005, the lack of clarity ofthe legal framework for public procurement and legal and regulatory instruments were sited as issues requiring urgent government attention. As a mitigation measures, this project will clearly stipulate that all procurement conducted under the project will be carried out usingBank procurement guidelines and procedures. This will be reinforced in the legal agreements and project implementation manual (PIM). A MIM was developed by the Bank for projects in Iraq in 2005 to provide guidance on procurement and financial matters. 45. Procurement activities will be carried out by the PMT with support from other directorates. Although the MOE o f KRG has sufficient implementation capacity, the DDEHPP would be their first experience with World Bank procurement guidelines and procedures. Procurement risk assessment 46. The procurement risk i s rated high. The risks associated with procurement were identified and documented by the MOE o f KRG's procurement capacity assessment, and include: (i)inadequate procurement laws and regulations, and o f modern documentation practices; (ii) entrenched procurement practices that will take time to modernize; (iii)limited experience in the use o f Bank procurement guidelines and international procurement practices; (iv) limited access of international Bank procurement staff to supervise the project inthe field; (v) delays inimplementing the procurement plan due to lack o f experience inprocurement planning and the volatile security conditions in Iraq; (vi) increase in prices o f raw construction materials due to high demand and unavailability o f these materials, which may impact subproject completion due to contractors' unwillingness to continue work based on old contract prices; (vii) possible looting/damage o f construction sites; and (viii) delays in bid submission and/or implementation due to poor security conditions. Measures to mitigate these risks are summarized in Annex 5. 47. Implementation and procurement arrangements have also been established to help mitigate the risks o f fraud and corruption. These include, but are not limited to: (i) publishingand regularly updating procurement plans to ensure a level playing field for interested firms; (ii)staffing the PMTs with procurement and financial management specialists; (iii) subjecting all contract awards to the Bank's prior review; (iv) ensuring that only pre-qualified contractors are invited to submit bids for major works; (v) applying post-qualification criteria for small and medium works contracts to avoid dealing with unqualified contractors and/or intermediaries; and (vi) requiring all goods and works contracts to be supervised by a qualified construction supervision firm. Close monitoring and advice from the Bank's local procurement consultants inIraq will also be available to the PMTs. Finally, the number o f contracts - 1 2 - has been minimized to simplify procurement, and all payments above US$75,000 will be made through direct payment upon receipt ofrequireddocumentation. Procurement Plan 48. A PP, which provides information on procurement packages and methods, is available in Annex 5.2. The initial PP, dated September 16, 2006, was finalized and agreed during negotiations. It will be available at the PMT, in Project Files, and on the Bank's external website. The PP will be updated as requiredto reflect actualproject implementation and improvementsininstitutional capacity. Frequency of Procurement Supervision 49. In addition to the prior review of contracts (all proposed contracts are subject to prior review), most procurement supervision will be carried out from Bank offices. Where security conditions make travel to Iraq impossible for international Bank staff, the Bank will employ an independent supervising agent operating inIraq to support the Bank incarrying out its supervision function. Inaddition, the Bank will rely onreports from consulting firms, as well as the Bank's localprocurement consultants working in Iraq. Disbursement 50. The Credit is scheduled to close by December 31, 2010. The Disbursement Section in Annex 6 shows the allocation o f Credit proceeds by component and according to expenditure category, and provides a disbursement schedule. 51. The Bank's strategy in Iraq i s to ensure ownership and strengthen institutional capacity by financing operations that are implemented by Iraqi ministries and other recipient entities. Trained PMTs will facilitate implementation and help ensure compliance with the Bank's fiduciary and safeguards requirements. The project will finance specialized technical support in procurement, financial management, and other areas, as needed. 52. As a further measure o f control, disbursements will be made primarily through direct payments. Once authorized, direct payments will be made by the World Bank directly to contractors', consultants', or suppliers' commercial bank accounts, or other financial intermediaries that are capable o f receiving funds transferred through the international banking system. Retroactive financing of eligible project expenditures after August 21, 2006, until the expected date o f signing the Financing Agreement will be allowed up to an aggregate amount o f about 10percent o f the Credit. 53. Project management support activities (under A.5 and B.4) and payments below the threshold o f $75,000 normally will be made through payments by the Recipient from its own resources, which will be periodically reimbursed by the World Bank upon presentation o f relevant supporting documents, including proof o f payment, and signed withdrawal applications. Both PMTs and the main financial counterparts from the implementing agencies will be exposed to training in Bank disbursement procedures. 54. Inaccordance with the Country Financing Parameters approved for Iraq in September 2005, the IDA Credit will finance 100 percent of project expenditures. The MOE of KRG's contribution to implementation will include assigning staff to the PMT and covering related operating expenses. -13 - FinancialManagement 55. The Central Government's MOF i s the Representative of the Recipient of the Credit, and accordingly, will sign the Financing Agreement. The MOE of KRG will be the Project Implementing Agency, under the Project Agreement to be signedbetween IDA and MOE o f KRG. 56. Assessment o f the MOE o f KRG's financial management systems was completed during several meetings with MOE o f KRG representatives in Amman, Jordan. The results of the assessment are available inthe Project Files. 57. Based on the results o f the assessment, the financial management risk, as a component o f the fiduciary risk, and which is a combination of country, sector and project specific factors i s high.In light of the Bank Second I S N covering ITF and IDA-financed projects executed by the Iraqi Government, the project financial resources, extended through the IDA Credit, will be managed through the framework o f the MOEo fKRG's financial systems, regulations, and controls. Consequently, a number of measures will be introduced to mitigate the weahesses identified.8 To help diminish the risk, simplify financial transactions, and ensure that the financial management systems at the MOE o f KRG are fully responsive to the Bank's fiduciary requirements, measures will be taken to support project accounting and reporting functions. Direct payments to contractors, suppliers and consultants will be the primary tool for financing project activities. About 99% o f the Credit i s expected to be disbursed through direct payments. Reimbursements to the MOE o f KRG will also be made for eligible expenditures paid from the Recipient's own resources. In view o f the mitigating actions already in place and the further actions agreed inthe FMaction plan, the FM arrangements meet the Bank's minimumrequirements. Inaddition, the PMT includes an experienced Financial Officer, assisted by an accountant, who will undertake the responsibilities o f maintaining financial records including contracts' payments, ensuringtimely payments authorization, submitting withdrawal applications to the Bank, and preparing periodic reports and financial statements. The PMT will draft and use a PIMbased on the MIMprepared for all Bank projects implemented in Iraq. The PMT will be responsible for preparing and submitting financial monitoring reports (FMRs) as part o f the project reports, and carrying out relevant actions listed in the PIM. The project's financial statements will be audited annually by external auditors in accordance with internationally accepted auditing standards. The financial management arrangements and identifiedrisks are detailed inAnnex 6. Bank Supervision, Monitoringand Evaluation 58. Considering the brief exposure o f KRG counterparts to World Bank guidelines and procedures, strong supervision efforts including frequent field visits would be needed, particularly during the early stages o f project implementation. Should the security situation prevent World Bank staff and international consultants from traveling to Iraq duringproject implementation, project supervision would primarily rely on local Iraqi consultants, supported by World Bank staff and international consultants working from outside Iraq. Regional consultants with branch offices in Iraq could also be recruited to assist with project implementation. 59. Performance indicators for the project are shown in Annex 1 and will be measured annually during supervision. The main indicators are: (i) the urgent repairs, increasingthe capacity o fDokan to for its design capacity o f 400MW and improvingthe reliability o f bothpower plants; and (ii) findinga lasting solution for Derbandikhan's operational problems that would be implemented under a full rehabilitation * The public sector's legal framework in the KRG, as described by KRG MOE representatives, is similar to the framework for the 15 central and southern Governorates of Iraq. -14 - program. Monitoring and evaluation will be done through review of operational statistics, quarterly progressreports and consultantreports. Environmentaland Social Safeguards 60. The project will only finance urgent repairs at the Dokan and Derbandikhan hydropower plants and prepare for their subsequent hll rehabilitation. The project is therefore rated as a category "B" project. Based on the Environmental and Social Screening and Assessment Framework (ESSAF) applicable to the current emergency operations in Iraq, the MOE of KRG, with the help o f consultants, will ensure that all environmental mitigation measures are included as part o f the civil works, goods and services contracts. The M O E o f KRG will also ensure that: (i)standard environmental codes o f practice will be included inthe repair and reconstruction bid documents of all project components; (ii)all sort o f waste, inparticular differenttypes of oil and scrap methods will be disposed o f following environmentally and socially sound options;' and (iii)appropriate staffing and adequate budget will be allocated for the effective implementation and monitoring of the management plan. No resettlement issues are envisaged or expected for this project. 61. Previous reports on the safety o f the dams, updated during preparation, recommended some urgent work which forms part o f the project scope. The project scope includes conducting a full dam safety assessmentas part o f the ESIA. 62. Management approved a waiver/exception to the notificationrequirement under para. 7(a) o f the O.P. 7.50 (the operational policy on International Waterways) on the basis that these repairs are not expected to alter the water flow inthe rivers or to have down stream implications. However, as part of the studies to be financed under this project for the subsequent rehabilitation o f both hydropower plants a comprehensive ESIA will be carried out. The need for notification o f riparians will be reassessedonce these studies are completed. 63.. The applicable safeguards policies are mentioned inthe table below. 9A system for collection and recycling ofoil is in place. -15 - Safeguard Policies FINANCIAL AND ECONOMICJUSTIFICATION 64. The full output o f the two power plants will be fully restored after rehabilitation is complete under a subsequent project. Nonetheless, the urgent repairs will increase the amount o f time the power plants can be operated, their availability and reliability, and therefore provide some benefits to the electricity consumers in the short term. The beneficiaries are the three KRG Governorates o f Dohuk, Sulaimaniyyah, and Erbil, with a total number o f direct consumers o f about 490,000 households inKRG, as well as all other consumers connected to the national grid. Although the two power plants are small compared to the total national capacity or demand, they would have a significant impact in ensuring stability o f the national power system due to remoteness of the two sites with respect to the location o f other generation resources. 65. Given the security conditions in Iraq, and the difficulty o f obtaining reliable country and sector data and information, cost-benefit analysis would be difficult to complete. However, an illustrative analysis of the DDEHPP project was carried out by the Bank, which concluded that initial repairs (followed by rehabilitation) rather than a new Combined Cycle Gas Turbine (CCGT) is the best and least cost economic option. At 10% discount rate, the levelized costs for rehabilitation and CCGT were 2.7 USc and 4.1 USc respectively. The urgent repairs financed under the project will improve the operating performance o f both power stations benefiting households in three KRG Governorates namely, Dohuk, Sulaimaniyyah, and Erbil, as well as the interconnected Iraqi gnd. The project i s expected to directly impact approximately 490,000 beneficiary households thus improving the overall standards o f living. Moreover, the project will also supplypower to industrial consumers connectedto the grid. RISKS 66. The following table identifies potential risks that could prevent the DDEHPP's successful implementation, and proposes corresponding mitigationmeasures. -16 - RiskAssessment Table RISK MITIGATIONmASURES The agreed procurement plan requires prior review by the Bank o f all major procurement actions. Expert review o f all negotiated direct contracts for work carried over from the OFFP prior to award to ensure the contract amounts and other terms are inlinewithinternational norms. Corruption due to a weak control environment H Bank staff has provided training in financial management and procurement to PMT staff, additional training i s included inthe project, and Bank specialists will conduct procurement and financial reviews during every supervision mission. An independent auditor will audit the project accounts every year. ' The Government adopted the PMTmodel to help Lack of familiarity with Bank address this issue and enable training to a guidelines and procedures H manageable number o fprofessional staff inproject implementation, and monitoring. There is relatively better security in the North of Iraq. Lack ofinterest by competent consultants and contractors to bidfor H The involvement o f the Bank, the use o f Bank, the work and high contract prices UNmedia, and foreign missions resident inIraq to announce the project and individual contracts are helping to raise interest inthe project. Delays inratification o f Financing Agreement by the National AssemblyKurdistan Parliament leads H ' Close follow upby Bank staff following Board to delays ineffectiveness and approval. imdementation The Bank plans to provide advisory services that will assist with reforming the sector to ensure commercial operation and sustainable The structure and management o f the development. The most urgent tasks are a review power sector is not conducive to M . of: (i) power sector structure, under which the the efficient operation Government is responsible for policy, regulation, and operation; (ii)planning methodology to ensure least cost development; and (iii) tariffs that are cost-reflective while protecting the poor. Overall RiskRating H Legend: H:High S: Substantial M:Medium L:Low. -17- Annex I:Project DesignSummaryand Key Performanceindicators Hierarchyof Objectives Critical Assumptions Sector-related Interim AssistanceStrategy as Goals: (fromGoalto Bank Mission) Restore basic service Increasedpower NationalMOE delivery generation operationalstatistics. Build local capacity to Well functioning power Economic development effectively operate and stations under the reports. manage power stations management of trained staff. Project DevetopmentObjective (PDO): act Indicators: Project Reports: (fromObJectiveto Purpose) Help alleviate the current Availability ofDokan Quarterly project Improved security enables power supply shortfall andDerbandikahn progressreports. work to be carried in all parts through urgent repair works, increasedto 80% Dokan operational o f the country. capacity building of staff and rn A lasting solution found statistics. preparation for the for the operational subsequent rehabilitation of problemsat Consultantreports. the Dokan and Derbandikhan Derbandikhan, in hydropower plants to restore particular the cavitation their onginal capacity of 400 problem. and 249MW respectively. Staff understands the rehabilitation plan and is well preparedfor the rehabilitation. - outputs: OutputIndicators: Project Reports: (fromOutputs to Objectives) 1. Urgent repairs and Excitation and control Quarterly progress Work is properly improvementsofDokan and systemsreplaced; reports. coordinatedby Derbandikhanpower stations switchgear,dam intake consultantsand the PMT. completed. structures, Derbandikhan Bank supervisionreports. damslippage area, hydro- The required warranties 2 A plan for long-term Consultantreports. mechanicaland are observedduring performanceimprovements substationequipment operational acceptance. for the two power plantsin repaired place. Derbandikhanturbine systemredesignreviewed and approved. Rehabilitation needs assessment completed Designs and preparation of biddingdocumentfor recommendedand agreed to rehabilitation completed Stafffully and effectively trained on the various operations,maintenance and rehabilitation aspects. -18- Hierarchyof Objectives KeyPerformanceIndicators Monitoringand Evaluation CriticalAssumptions ProjectComponents/Sub- Inputs: (budgetfor each components: component) ProjectReports: (fromComponentsto Outputs) ComponentOne: Repairsfor US$ 8.15 million Quarterlyprogress Competent contractors Dokan reports. and consultantsare Disbursementreports. recruitedfor the work 1.1 Replacementof the despitethe scare of excitationsystems Audit reports. deterioratingsecurity. 1.2 Replacementof four Key O&M staff is fully compressors involvedinthe work. 1.3 Repair o f GIS for Unit No. 1 Bank staffand 1.4 Replacementof consultantsare able to synchronous condenser supervisethe work. 1.5 Replacementof control systems 1.6 Detailedassessment of the rehabilitationneeds 1.7 Design andpreparation ofbiddocumentsfor rehabilitation ComponentTwo: Repairs for Derbandikhan USS20.75 million 2.1 Replacementofthe excitation systems 2.2 Derbandikhan Switchyard 2.3 Replacement o f control systems 2.4 Re-design ofthe hydraulicsystemto address the cavitationproblem 2.5 Detailedassessment of rehabilitationneeds, fromthe intaketo the switchyard 2.6 Designand preparation ofbiddocumentsfor rehabilitation ComponentThree: 3.1 Assessment o f US$ 11.1million RehabilitationNeeds, EnvironmentalAssessment and -19 - Arrangements for ResultsMonitoring I I Data Collec n and Reportin! Outcome Indicators Baseline YR2 YR3 Frequency Data Collection Responsibility and Reports Instruments for Data Collection Nochange - Dokan and Quarterly: Physical P M U increased to at least about 65%; Derbandikhan progress 80%; Derbandikhan Derbandikhan avail increased -- PMUreports. Operational evaluation, availability increased availability about 60% to 80%. power station to at least 75%; a -Statistics. Consultant logs, consultant lasting solution for reports. analyses. the cavitation I problemat Seriouscavitation IConsultancy Satisfactory Solution to Physical P M U Derbandikhan found; problem at contract progress cavitation -Quarterly: M Ureports. progress staff prepared for full Derbandikhan awarded problem found - POperational evaluation, rehabilitation. -Statistics. consultant Consultaht analyses reuorts. Satisfactory Training Quarterly: Trainee reports, P M U progress complete. performance maintenance and -- PMUreports. Operational evaluation. rehabilitation. Statistics. - Consultant reports. for Each Outdated control and Former Urgentrepairs Quarterly: Physical P M U excitation systems for urgent OFFP and replacement - P M Ureports. progress significantly reduce repairs and contracts o f excitation and - Operational evaluation, 6 availability and consultancy complete. control systems statistics power stahon effective capacity. services complete Logs -- Derbandikhan Power Cavitation problem, - Former OFFP contracts Quarterly: Physical P M U Plant outdated control and for urgent OFFP complete, M U report. progress excitation systems repairs and contracts consultant -- POperational evaluation, significantly reduce consultancy complete. recommendahon statistics power station availability and services -Consultancy for cavitation logs effective capacity. awarded. for future problem rehab. in submitted and progress. approved. Numerous problems Contract Satisfactory Design &bid Quarterly: Tests, analyses, P M U RehabilitationNeeds resulting from poor awarded. progress. documents - P M U Reports etc design, commissioning, complete. - Consultant operation and reports maintenance. -20 - Annex 2: DetailedProjectDescription Background 1. Dokan and Derbendikhan hydropower plants, with a capacity o f 400 MW and 249 MW respectively, are the two largest power plants in the Kurdistan Regional Governorate, and are connected to the national power grid. Each power plant is part o f a multipurpose scheme for power production and irrigationat each o f the locations. 2. The Dokan dam i s located on the Lesser Zab River, approximately 220km upstream from its confluence with the Tigris River. The site i s located adjacent to the town of Dokan and approximately 3 9 5 hnortho f Baghdad and 65kmnorthwest of Sulaimaniyahcity. 3. The Derbendikhan dam is located on the Sirwan River, immediately upstream o f the town o f Derbendikhan. It is approximately 150km upstream o f the Hemren Dam. The site i s approximately 285km northeast o f Baghdad and 65km southeast o f Sulaimaniyah city. It is also within 15km o f Iranianborder to the southwest. 4. Dokan Power Station became fully operational in 1979. Repair and maintenance have been substandard because o f unavailability o f spare parts and equipment. These factors have contributed to long outages and unreliable performance. Moreover, due to the long operational period (27 years) the power plant i s now due for rehabilitation. This wouldneed to be precededby a detailed assessment o f the plant's condition and the safety o fthe DokanDam. The work would also explore the feasibility o f redesign o f some o f the equipment, in particular the turbine and generator, in order to increase the overall efficiency o f the power plant. It would also take into account the unavailability o f spare parts from the original manufacturer. 5. The construction o f Derbendikhan Power Station was completed in 1983 but operation commenced in 1990 due to a delay in construction of the overhead line to connect the power plant to the national gnd. Only one unit was commissioned by the contractor, who had to leave the site because of the Second Gulf War. The other two units came into operation without proper commissioning. A combination o f this and faulty design of the hydraulic system are considered to have contributed to unsatisfactory performance o f this power plant since its commissioning. The plant suffers from severe cavitation o f the runners and draft tubes. It also needs complete rehabilitation preceded by investigation of the cause of cavitation and redesign. 6. The DerbendikhanDamhas also suffered inits early days from a large slope failure on the right bank, approximately lOOm upstream o f the dam. As a result, subsequent modifications have been done since, and monitoring has indicated that additional slope movement i s minimal, but the data record is scarce; and accordingly the operating restriction on the minimumpool levelwill be maintained during the project. 7. Due to shortage o f power generation it i s necessary that both power plants continue to operate. Therefore the rehabilitation work would be implemented intwo phases. This project would constitute the first phase, consisting o f urgent repairs to keep the two power plants operational, as well as studies and designs for the second phase which would involve rehabilitation. -21 - The DerbandikhanDam-General Descriptionand History 8. Derbandikhan Dam i s located on the Diyala Sirwan river approximately 65km south-east of Sulaimanayah and 285km north-east o f Baghdad. The scheme is a multi-purpose hydro-complex and the main structure i s a 128m high embankment dam with a central clay core and rockfill shoulders. The crest length of the dam is 445m. The damis constructedina narrow steep-sided gorge on a series o f sedimentary rocks includingmarls, sandstones, limestones and conglomerate. 9. The reservoir impounded by Derbandikhan Dam had a total design capacity at normal operating level (El. 485.00m ASL) of 3,000 Mm3,o f which 2,500 Mm3is live storage and 500 Mm3being dead storage. The current storage volumes willbeless than this due to 45 years of sedimentation. 10. The reservoir i s controlledby a gated spillway structure located on the rightbank and comprises three 15m x 15m tainter gates installed on an ogee shaped overflow section followed by a steep chute terminating in a deflector bucket. Dividing walls separate the discharges fiom each o f the three gate openings. The maximum discharge capacity o f the spillway at normal operating level (El. 485.00m ASL) i s 5,700m3/s and 11,400m3/sat design flood level(El. 493.50m ASL). 11. There are two low-level outlet tunnels (6m and 9m diameter) connected to steel conduits which discharge water through three irrigation valves. The conduits also originally supplied water to two small turbines for the service generating station and are now connected to the three large turbines of the new power house (see below). An intake tower for the irrigation outlets is located between the spillway approach channel and dam embankment. The intake tower houses three vertical lift gates, each 4.75m x 9.5m - Gate No.1 serves the 6m diameter tunnel; Gates No.2 and No.3 serve the 9m diameter tunnel. 12. The dam was designed by Harza Engineering Company of U S A for the Government o f Iraq Development Board. Construction o f the dam started in 1956 and was completed in summer 1961. The main civil works contractor is not known. 13. Since impounding of the reservoir, the major remedialmeasures undertaken have included: Slope protection above the left and right abutments; Slope stabilization o f the left bank and right bank slide areas; Additional grouting o f the bedrock under the dam; Reinstatement o f the dam crest following settlement in the area adjoining the spillway structure; Removal o f debris produced by the plunge pool development; Refurbishmento fthe irrigationvalves, caterpillar gates and gantry crane at the Intake Tower; Riprap protection o f the upstream face (1999 and 2000); and Further slope protection and stabilization measure to the left and rightbanks (ongoing). 14. Inthe late 1970's, a new power house (3 x 83MW) was constructed at the toe o f the dam. It replaced two smaller generation units (2 x 800kW). Polensky & Zollner o f Germany were the main civil works contractor and Mitsubishi Electric Corporation was the turbine and generator supplier. The commissioning o f the new power station was delayed due to the political disorders and continuous generator only started in 1990. -22 - DokanDam-General Description and History 15. Dokan Dam i s located on the Lesser Zab river approximately 395km north o f Baghdad and 65km southeast o f Sulaimaniyah city. The dam i s a concrete arch with gravity abutment blocks located ina narrow steep sided gorge incised inthe limestone and dolomite bedrock. The crest length o f the dam i s 350m and has a maximum height o f 116m. 16. The reservoir impounded by Dokan Dam had a total design capacity at normal operating level (El. 511.OOmASL) o f 6,870 Mm3,of which 6,140 Mm3is live storage and 730 Mm3being dead storage. The current storages will be less than thisdue to over 45 years of sedimentation. 17. The reservoir is controlled by two spillways, both sited on left bank o f the reservoir. The service spillway, referred to as the gated spillway, has three vertical gates, each closing an orifice with a clear openingof 10mhighby 6.8m wide. The orifices discharge into a short steep chute connecting to an 1l m diameter tunnel with a free outlet set about 50m above the river inthe gorge downstream o f the dam. The gated spillway crest is set 14.5m below the normal top water level o f the reservoir. The maximum capacity o f the gated spillway i s 2,450m3/s. 18. The emergency spillway is a circular 40.26m diameter bellmouth (Morning Glory) spillway with its crest set at the normal top water level o f the reservoir. The bellmouth discharges via a vertical 12.5m diameter drop shaft into a 10.2m diameter tunnel. At its downstream end, the tunnel i s steel lined, reducing in diameter to 9.9m and inclined both 30" upwards and 47" in a downstream direction for a free discharge into the river gorge. The maximum capacity of the emergency spillway is 1,860m3/s. 19. In addition, releases can be made through two irrigation outlets that are fed by a tunnel passing beneath the dam on the right bank. This tunnel bifurcates below the crest o f the dam, where each 2.29m diameter steel lined tunnels can be closed by emergency gates lowered from the dam crest. Each o f these tunnels connects to a steel conduit with a butterfly guard valve and flow i s regulated by a hollow-jet discharge valve with a maximum capacity of 120m3/seach at full reservoir level. Five further steel conduits of 3.65m diameter were constructed through the arch section of the dam. Each o f these can be closed by an emergency gate lowered from the dam crest and each conduit leads to a guard valve and 80m turbineunit inthe mainpower station located at the damtoe. 20. Two emergency gates have been provided for closing off the irrigation tunnels and power conduits, and a traveling gantry crane with a hydraulically operated lifting beam i s installed at the crest o f the dam for handling these gates. 21. The dam was designed by Binnie, Deacon & Gourley of the UK for the Republic o f Iraq. Construction o f the dam was started in 1954 and was completed in 1959. The main civil works contractor was Dumez-Balloz o f France and the gates and associated E&M equipment was supplied by Nerpic o f Grenoble, France. Construction o f the powerhouse at the toe o f the dam did not commence until 1975 and the last o fthe five 80MW turbine unitswas commissioned in 1979. Project Objectives 30. The objective o f the proposed project is to: (i)help alleviate the current power supply shortfall in the Kurdishregion through urgent repair work; (ii) strengthen the capacity o f local operational staff; and (iii)prepare for the subsequent rehabilitation o f the Dokan and Derbandikhan hydropower plants. The reliability o f both power plants i s very low and the effective capacity o f each i s below 50 percent. Subsequent rehabilitation would restore their original capacity o f 400 and 249MW respectively. -23 - Project Description Summary Component1:Repairsfor Dokan (US$9.20million) 1.1 Replacement of the excitation systems: The work will involve installation of equipment supplied under the UN OFFP, testing and commissioning o f the excitation systems, and providing training for operation and maintenance staff o f the power plant. 1.2 Spare parts for four compressors: The work will involve providing spare parts and training for operation and maintenance staff. 1.3 Repair of GIs for Unit No. 1: This will involve the repair of the GIS for Unit No. 1 and the provision o ftraining for operation and maintenance staff. 1.4 Completion of installation of the synchronous condenser: The work will involve installing the equipment supplied under the UN OFFP, and testing and commissioning the synchronous condenser system, as well as providing training for operation and maintenance staff. 1.5 Replacement of control systems: This will involve the design, supply, installation and commissioning o f a new control system, as well as training for operation andmaintenance staff. 1.6 Dam safety emergency work: This will involve the re-establishment of an adequate instrumentatiodmonitoringsystembasedonan instrument-criticality analysis. Component 2: Repairsfor Derbandikhan (USUS.6 million) 2.1 Replacement of the excitation systems: The work will involve installing the equipment supplied under the UN OFFP, testing and commissioning the excitation systems, and providing training for operation andmaintenance staff o f the power plant. 2.2 Derbandikhan Switchyard: This will consist o f replacement of the switchgears, metering, control andprotection equipment, and the provision of required spare parts. 2.3 Replacement of control systems: This will involve the design, supply, installation and commissioning o f a new control system, as well as training for operation and maintenance staff. 2.4 Dam Safety emergency work: The work will consist of needed.emergency work for dam safety precededby the necessary design work camed out by a consultant. Component 3: Assessment of Rehabilitation Needs, Environmental Assessment and Dam Safety, Engineering and Other Support (US$12.2 million) 3.1 Engineering services: This will include: (i) the provision o f pre-contract award services for the emergency repairs; (ii) supervision o f supply, installation and commissioning o f the emergency activities; (iii)reviewandupdate ofpreviousassessmentsofrehabilitationneedscarriedout for the Dokanand Derbandikhan hydropower plants (including the cavitation problem for Derbandikhan), inorder to extend their operational lives by at least 20 years; (iv) carry out hydrographic surveys to assess the current capacities of the two reservoirs; and (v) prepare designs and bid documents for the rehabilitation. -24 - 3.2 Environmentaland Social Impact Assessment: This will include full Environmental and Social Impact Assessments (ESIA) for the future rehabilitation o f the Dokan and Derbandikhan Hydropower Stations and dams, includingthe preparation o f Emergency Preparedness Plans. 3.3 Other urgent remedialworks: The work would involve other urgent repairs at the power stations identified duringthe assessment o frehabilitation needs. 3.4 Support to the project management team. Operating and travel cost o f the PMT, excluding salaries, but including office equipment and fiduciary requirements such as audits and consultancy related to the Environmental Management Plan. 3.5 Supervision of urgent repairs. The work will involve consultancy services to support the PMT in supervisingthe urgentrepair work. 3.6 Capacity building. The work will comprise consultancy services for training and capacity building, including in environmental assessment and environmental monitoring, financial management and procurement. -25 - Annex 3: Project Implementation Arrangements 1. The Bank's strategy for Iraq seeks to ensure local ownershipand strengtheninstitutional capacity by financing operations that are implemented by Iraqi institutions. Based on experience gained through the ITF-financed projects, the proposedmanagement structure for the DDEHP will be similar. It adopts the PMT model, whereby staff from various departments within the implementing ministry and its agencies i s seconded on a full-time and/or on a part-time basis to work in the PMT, with support from outside consultants. 2. The electricity departments inthe three KRG governorates were recently unifiedinto a new MOE of KRG which will be the implementing agency for the proposed project. A PMT, which will be reporting directly to the Director General for Electricity Production (see Appendix 4.1) will be responsible for the day to day management o f the Project. The PMT will be staffed with experienced staffseconded on a full time-and part-time-basis, fromexisting technical and financial units. The core PMT staff comprises: a director, a procurement specialist, technical specialists as required, an environmental specialist, and a financial management specialist. The PMT will closely coordinate its daily activities with other directorates o f MOE of KRG, particularly the Directorate o f Planning and Execution and the Directorate o f Administration and Finance. 3. The PMT will be responsible for managing all project activities, including contract management, supervision and quality control, reporting, and administration o f project funds. Making payments to suppliers, consultants and contractors, and ensuring that funds are disbursed according to Bank guidelines and procedures will also be the responsibility of the PMT. The PMT model will provide the shlls needed for effective project implementation, and yet permit the reintegration o f seconded staff into their respective ministry structures at project completion. 4. An interim PMT with 8 to 10 experienced staff was appointed in March 2006 and has been working closely and effectively with World Bank staff to complete project preparation. To ensure that project implementation i s carried out promptly and efficiently, the PMT has been officially designated delegated the responsibilities and autonomy to carry out implementation in accordance with World Bank guidelines and procedures and to serve as the focal point for communication with the World Bank, contractors and consultants. All contracts financed through the IDA Credit will be signed by the Minister or a senior manager ofMOEof KRG officially designatedby the Minister. -26 - Appendix 3.1:Organizational Structure of ImplementingAgency-MOE, KRG Dokan and Derbandikhan Emergency Hydropower Project KRGMinistry of Electricity (MOW ----L General General Directorate General Project I Directorate for Directorate Subtations Directorate II 7 Management TeamI Electricity Electricity and Planning (PMT)for Generation Distribution Transmission and Projects I DDEHPP I \-,,,,,J I General General Directorate Directorate Directorate Directorate Directorate Administrati Control and i of Electricity Debandikhan Communicat Erbil Suleimaniyy - Hydropower ion I I Station I Dokan D a m Derbandikhan Shei Shazed D a m -27 - Annex 4: ElectricitySector Background TheElectricity SystemNationwide 1. In 1990, prior to the first Gulf War, the total installed generating capacity was 9,295MW with a peak demand o f about 5,100 MW. Approximately 87% of the population had access to electricity. A combination of wars, lack o f maintenance, sanctions, looting and vandalism has; however, severely affected the entire power system in Iraq. During the 1991 Gulf War several transmission lines were put out of service, substations were damaged, and the available generation capacity was reduced to 2,325MW with daily power cuts o f upto 15 hours or more. Insome areas supplywas completely interrupted. 2. According to the Central Government MOE, power cuts during peak summer times are expected to hover around 12 hours a day, while generating capacity to be inthe range o f 4,300-4,600MW. Table 4.land Figure 4.1 - 9000 8000 7000 6000 5000 4000 W Avg. Demand(MW) 3000 2000 1000 0 3. The Central Government MOE i s working on upgrading the electricity system to provide consumers with reliable electricity, and to achieve this end, MOE has drafted a Master Plan" for the sector for the years 2006-2015, which will tackle the following issues: (i) ending the deterioration in the system through implementing effective operation and maintenance and undertaking comprehensive rehabilitation programs for the generation stations and the transmission and distribution networks; (ii) upgrading and increasing the system's capacity to meet the increasing demand on electricity; (iii) 10"The Draft Master Planfor the Electricity Systemfor 2006-2015, Ministryo fElectricity, Planning and Studies " Unit,June 2006. -28 - developing and expanding the transmission and distribution systems throughout Iraq and executing projects that connect electricity to new residential areas; (iv) improving the effectiveness of the systemby maintaining the sustainability and stability o f electricity generation in addition to increasing the level o f reliability; (v) providing better services to electricity users (households, commercial, industrial, agricultural, and governmental); (vi) developing and supporting the human cadre at the Ministry; (vii) connecting the electricity network with neighboring countries-including the group of seven counties' regional grid; and (viii) enhancing per capita consumption of electricity, by raising its current level o f 1 , l O O M W h to 3,700MWh in2009. 4. Electricity supply today remains extremely poor and has particularly worsened in the Baghdad area, where 92% of the population suffers from unstable electricity supply." Demand for electricity (currently estimated at more than 8,300MW) has been growing rapidly and the actual shortfall in generating capacity this summer sometimes reached 4,000MW. Older generation stations, despite emergency repairs undertaken, continue to break down frequently and will have to be replaced eventually. These shortages are creating hardship and undermininggovernment credibility. Moreover, inadequateand poor electricity services and infrastructure impede private sector development and negatively affect employment and growth. The new generation capacity being built with US assistance, mainly gas turbines, is insufficient to fill the gap. Moreover, fuel supply, inparticular natural gas and HFO,remains a major issue and many power stations in the country are currently forced to use crude oil resulting in increased operation and maintenance and environmental problems. Therefore, despite the continuing need for investments in transmission and distribution, adding new generation capacity has become a higher priority for the Government. Figure4.2 -AverageAmount of ElectricityGeneratedNationwide(MW) 5. According to news reports and polls, the three highest priorities-sectors in most need of reconstruction-for everyday Iraqis are oil, electricity, and water. Inelectricity, roughly $4.3 billion has been spent to boost Iraq's electricity production, yielding mixed results. Power generation is below the prewar levels (Table 4.2), which i s still shy o f the 6,000MW objective stated by the Coalition Provisional Authority (CPA) in September 2003. Nationwide, Iraqis on average have power for less than halfthe day, while Baghdadis have about 4 hours/day (Table 4.2 and Figure 4.3). ~ "IraqLivingConditionsSurvey2004,MinistryofPlanningandDevelopmentCooperation,Iraq. -29 - Table 4.2-Statistics on Iraq's Electricity Sector" N/A =Not Available. 6. The estimated pre-war level o f average hours o f electricity nationwide was in the range o f 4-8 hourdday rising to an average of 13 houdday throughout 2004. As for Baghdad, the pre-war level was in the range of 16-24 hourdday dropping to an average of around 14 hourdday throughout 2004. Since the beginning o f 2005 up to April 2006, the monthly hours o f electricity nationwide compared to those of Baghdad are depicted inthe Figure 4.3 below: l2"Zraq Index, The Brookings Institution, p. 31, May 30,2006. " -30 - Figure 4.3 -Average Hours of ElectricityDay 14 12 10 8 6 4 2 0 -Nationwide -Baghdad 7. According to relevant surveys, Iraqis view adequate electricity as a top concern impacting their daily life or family, compared to other matters such as national security, healthcare, unemployment, crime, high prices, etc (Figure 4.4). Immediate intervention for improving electricity generation i s therefore very critical. Figure 4.4 -Three Issues or Concerns Iraqis Feel Most Impact their Daily Life or Family13 45.00% 30.00% 15.00% 0.00% 8. Average production has not changed between 2005 and 2006 although new gas generation stations have entered into service, which shows that production from generation units has been deteriorating. Moreover, Table 4.3 indicates that electricity shortage has worsened by about 25% in2006 compared to 2005 due to the increase inload. Table 4.3 and Figure 4.5 - The Electricity Systemduring the First Five Months of 2005 and 2006 13"Zmq Index, The Brookings Institution,p. 34, October 10, 2005. " -31 - 8000 7000 6000 so00 4000 3000 0Production2006 2000 Demand2006 1000 0 January February March April 9. In terms of electricity users in Iraq, households constituted the biggest chunk o f users during 2005: Figure4.6 -Electricity ConsumptioninIraqaccordingto Users' Category Agricultural Governmental 4yo Households 53% Commercial 5% 10. Even with optimistic scenarios, generation capacity would still be at alarming shortfall levels for the years to come vis-a-vis the increase in demand. Starting at 2010, there should be at least 30% o f available capacity for shortages to vanish: -32 - Table ation 30000 1 I 25000 20000 15000 10000 5000 0 -5000 -10000 J I I -Production MW -Demand M W Shortage MW I The ElectricitySysteminthe KRG 11. Prior to the imposition o f sanctions on Iraq, the three northern governorates o f Dohuk, Erbil, and Sulaimaniyyah were supplied with electricity from the Iraq national grid. Two hydropower stations were constructed in the Sulaimaniyyah Governorate to serve as peaking stations during periods of high demand: the Dokan and Derbandikhan power stations, with a maximum combined total generation capacity o f 649 MW. The three Northern Governorates were supplied with power from several high voltage 132 kV transmission lines fiom the Governorates o f Mosul and Kirkuk. These lines fed into 132- 33 kV transmission substations from where the energy was then distributed. As the electricity system of the three Northern Governorates was part o f the Iraq national grid, technical support was centralized and providedfrom Baghdad. Teams located at either Mosul or Kirkukprovided maintenance o f the system in the north and the northern staff carried out system operation and fault repair. 12. As a result o fthe GulfWar and the ensuing internal conflicts, the electricity supply system inthe three Northern Governorates suffered severe damage. Several distribution and transmission lines were put out of commission, many substations were destroyed, and the control panels at the Derbandikhan power station were ruined by explosives. By early 1998, the electricity generation, substations and transmission and distribution systems became very weak and power cuts o f up to five hours were a regular practice. In certain areas, supply was limited to three to five hours daily, further reduced to one hour per day or no supply in some areas. The Governorates o f Erbiland Sulaimaniyyah had been cut off from the national gnd and had to rely on the hydropower stations o f Dokan and Derbandikhan for their power supply. The generation capacity o f these dams however was insufficient to meet the demand. Both dams and associated power stations sustained considerable damage and suffer from lack of spare parts and funds to ensure proper maintenance. They are in need o f major and urgent rehabilitation. The -33 - Governorate o f Dohuk was still linked to the national grid and was able to obtain limited power from Mosul but received very little supply. The result was a combined shortfall in electricity supply for the three Northern Governorates o f about 350 MW. 13. The situation remains critical given the continuously decreasingpower supply from a capacity of around 700MW in 1991, 300MW in 1998, and approximately 400MW today. About 40 percent o f the demand o f the households connectedto the electricity network i s currently being met inthe three northern governorates but power cuts remain a fact o f life. While still low, it represents a significant improvement over the last three years when only 15 percent o f the demand of households was being met, due to the impact o fthe drought onhydro generation. Electricity Generation in Dokan 14. Throughout the year o f 2004, the Dokan Hydropower Station's (DHS) maximum power generated was 7,509.90 MWh(Figure 4.4), with a yearly maximum o f about 310 MW. The average daily generation in2004 was around 157MW. 15. Throughout the year o f 2005, DHS's maximumpower generated was 5474.46 MWh(Figure 4.5), with a yearly maximum o f about 228 M W and a minimum o f 0, which occurred many days during the year. The average daily generation in2005 was around 99 MW. Figure 4.8 -Dokan Generationduring Jan lS'-Dec31" 2004 (MWh) Doknn Gcncrari~n 8000 7000 6000 5000 4000 3000 2000 1000 0 Figure 4.9 -Dokan Generationduring Jan lSt-Dec31" 2005 (MWh) 16. Throughout the year o f 2006, and till the month of.April, DHS's maximum power generated was 2704.80 MWh(with a maximum o f about 112.70 MW). The average daily generation in2006 up to April was around 47 MW, and the daily M W generated i s depicted inFigure 4.6 below: -34 - Figure 4.10 Dokan's Daily MW Generated (Jan-Apr, 2006) - I20 100 80 60 40 20 0 ElectricityGenerationinDerbandikhan 17. Throughout the year of 2004, the Derbandikhan Hydropower Station's (DKHS) maximum power generated was 4,288 MWh (Figure 4.7), with a yearly maximum of about 159 MW. The average daily generationin2004 was around 96 MW. 18. Throughout the year of 2005, the DKHS's maximum power generatedwas 5,645 MWh (Figure 4.8), with a yearly maximum of about 223 MW. The average daily generation in 2004 was around 99 MW. Figure 4.11 -Derbandikhan GenerationduringJan lS'-Dec31" 2004 (MWh) Figure 4.12 -Derbandikhan GenerationduringJan lSt-Dec31" 2005 (MWh) -35 - 19. Throughout the year o f 2006, and till the month of April, DKHS's maximum power generated was 2431MWh(with a maximum of about 101MW). The average daily generationin2006 up to end of Marchwas around47 MW, and the daily MW generatedis depictedinFigure4.3 below: Figure 4.13 Derbandikhan's Daily MW Generated (Jan-end of Mar, 2006) - 120 100 80 60 40 20 0 9P 20. The total number of electricity consumers in Sulaimaniyyah amounts to 215,421, which is divided as follows: Figure 4.14 - Sulaimaniyyah Electricity Consumersby Category Domestic Commercial Governmental Industrial 21. The following is the list ofconsumedenergy as ofMarch2006: 22. The total amounts to 87,604 of consumers and 20,889,679 kwh of energy consumed. The total revenue from electricity earnedbythe COEas ofMarch 2006 was ID55,140,500. -36 - Table4.6 - Statistical Informationon KRGElectricityConsumers, Units Sold, and Amount inIraqi Dinars Note:Total GenerationinKRGis 2,146,582,680kWh in 2004 and2,151,034,580kWh in2005. LI 601-900 6 .I ep 2 901-1500 12 a E 3 1501-2100 20 2101-3000 45 PI sv) 3001-5000 105 5001andAbove 300 1-300 4 301-600 8 601-900 16 901-1500 24 1501-3000 40 3001-5000 50 5001andAbove 100 1-10,000 4 10.001-20.000 5 20,001-40,000 6 40,001-100,000 8 100,001 andAbove 10 0.4 kV 20 11kV 8 33 kV 6 132kV 4 *c I I -37 - Year Residentialand Industrial Governmental Totat I Comnerciai I I I 2004 I 2,061,588,883 I 1,078,934,455 3,782,079,140 641y5557802 I 2005 3,068,908,261 1,286,791,019 928,872,437 5,284,571,717 I Table 4.9 - Number of Staff of COE in Sulaimaniyyah Region Occupation No. ofStaM Engineer 360 Technical 2,681 Administrator 693 Finance 466 Low Skilled 3,263 Total 7,463 The TransmissionSysteminSylaimaniyyahandErbil I.Sulaimaniyyah Table 4.10 -List of Transmission Lines(132 & 33) kV Dokan-Tasluja 132kV (1) 48 I 120M W 120M W -- 1 Dokan-North Erbil 132 kV 78 140M W Rizgary-Arbat 33 kV 28 35MW Rizgary-Shahd 33 kV (1) 2.8 30 M W Rizearv-Shahid 33 kV (2) I I 30 M W I -38 - 11. Erbil Data on substations are available inthe project files. -39- Annex 5: ProcurementArrangements and Procurement Schedule 1. Procurement for this project will b6 carried out inaccordance with the World Bank's Guidelines: Procurement under IBRD Loans and IDA Credits, dated May 2004, Guidelines: Selection and Employment of Consultants by WorldBank Borrowers, dated May 2004, and the provisions stipulated in the Financing Agreement. For each contract to be financed by the Credit, the procurement methods or consultant selection methods, the need for prequalification, estimated costs, prior review requirements, and time frame are reflected in the Procurement Plan (PP). The PP will be updated, as required, to reflect the actual project implementation needs and improvements in institutional capacity. A General Procurement Notice was published in the United Nations Development Business (UN Development Business on-line) on June 5,2006 and will berevised after the project i s approvedby the Bank's Boardof Executive Directors. 2. To simplify the procurement process, the number o f contracts will be minimized. To facilitate project implementation, M O E o f KRG will hire qualified consulting firms and individual consultants to assist them to implement all project components, including procurement and project management training, supervision o f the four contracts procured following direct contracting procedures, and supervision o f subsequent goods and works contracts. 3. Procurement of Works. Works procured under this project will include the replacement o f control systems for Dokan and Derbandikhan, rehabilitation o f Derbandikhan switchyard, and reinstatement o f Derbandikhan slippage area. Procurement o f works will be mainly carried out usingICB and NCB procedures. Works estimated to cost more than US$5 million equivalent per contract will be procured using ICB procedures. The NCB standard biddingdocuments for procurement o f works, which were prepared as part o f the MIM, will be used. Shopping procedures, when needed, will be used for procurement o f works o f small value estimated at US$lOO,OOO or less per contract. 4. Procurement qf Goods. Goods procured under this project will include excitation systems, compressors, gas insulated switchgear, condensers, IT and office furniture, equipment and supplies needed for project implementation, as well as vehicles. Procurement will be done usingthe Bank's SBD for all ICB. The NCB SDB for procurement of goods, which were prepared as part o f the MIM, will be used for contracts estimated to cost less than US$200,000. Shopping procedures will be used for procurement o f goods o f small value estimated at US$lOO,OO or less per contract. 5. Selection of Consultants. Consultants' services procured under this project will include: (i) selection o f consultants to provide engineering services, such as reviewing, updating and finalizing detailed designs, preparing tender documents, and construction supervision; and (ii) selecting specialized consulting firms and individuals to assist the P M T in project implementation, training staff in procurement, financial management, project management and other technical fields, as needed. The selection method will mainly be a QCBS and advertising for expressions o f interest (EOIs) inthe UNDB and local newspapers. International consulting firms may not be interested in some contracts while the security situation i s volatile. Accordingly, it is possible that shortlists for consultants' services for some contracts may be composed entirely o f nationaVregiona1 consultants. It i s also expected that consulting offices associated with local universities may be included in the shortlists. University-based consultants will not be given preference over private consultants. Shortlist o f consultants for services estimated to cost less than US$200,000 equivalent per contract may be composed entirely o f national consultants in accordance with the provisiono f paragraph2.7 o f the Consultant Guidelines. 6. Operating Costs. The Credit will finance expenditures directly related to the management o f the project, such as: (i) maintenance o f office equipment; (ii) transportation and travel, including per diem allowances for project staff in travel status; (iii) o f office space; (iv) office supplies, utilities and rental -40 - office administration, including translation, printing and advertising; (v) fuel costs; (vi) communication costs; (vii) costs for production of biddingdocuments and drawings; (viii) commercial bank charges; and (ix) any other project management support costs as agreed by the Recipient and IDA, but excluding salaries o f the Recipient's civil servants. These items will be financedby the project and will be procured using the MOE administrative procedures for shopping, satisfactory to IDA. 7. Procurement Risk Assessment. The procurement risk is rated high. The risks with procurement were identified and documented in the MOE procurement capacity assessments (in project files); they included: (i) lack o f adequate procurement laws and regulations, and o f modern documentation the practices; (ii) poor habits acquired by procurement staff from the previous era, which will take time to modify; (iii) limited experience of procurement staff in the use o f Bank procurement guidelines and international sound procurement practice; (iv) limited access of international Bank procurement staff to supervise the project in the field; (v) delays in implementing the procurement plan due to lack o f experience inprocurement planning and the volatile security conditions in Iraq; (vi) increase inprices o f raw construction materials due to high demand and unavailability o f these materials, which may impact subproject completion due to contractors' unwillingness to continue work based on old contract prices; (vii) possible lootingdamage of construction sites; and (viii) delays in bid submission and/or implementation due to poor security conditions. 8. Corrective measures that have been agreed include: (i) assigning one procurement officer at the PMT on a full-time basis; (ii) recruitinga consulting firm to prepare tender documents, assist the PMT in procurement matters, establish procurement monitoring and reporting systems, and carry out construction supervision; and (iii) usingthe MIMto develop a PIM. Seeprocurement risktable below. ProcurementsRisks Risk MitigatingMeasures The lack o f adequate laws and Continuous training will be provided by the Bank and regulations, absence o f modem standard consultants. Close monitoring and advice o f the Iraqi team documentation, and persistent poor through the Bank's local procurement consultant and the procurement habits acquired previously consulting firm. may take time.to modify. ................................. ._ ..... .. ........... ......... ~ ............. .... ~ ~ __" ~ ...... ... ~ Lack o f experience using the Bank's The Bank and consultants will provide training and support to procurement guidelines and sound the PMT on World Bankprocurement guidelines, bidding international procurement practices. document preparation, and bid evaluation. Close supervision by Bank staff and consultants. A project launch workshop in ArabicJEnglish i s planned soon after Financing Agreeement is .................................... signed. "............................."........... Inability o f international Bank H Post reviews and other procurement matters will be covered in procurement staff to supervise the the fust instance by local procurement consultants working for project in the field. the Bank. An independent local firmmay be contracted to conduct uhvsical insuectiono f moiects. Delays inimplementing the H The Bank and consultants will provide procurement training and procurement plan due to lack o f support to the PMT. Close monitoring o f procurement plan by experience inprocurement planning and the Bank. the volatile securitv conditions inIraa. ............. .................................. ...................................................... ~ Possibility o fh g hprices due to security H Price and physical contingencies have beenprovided for inthe conditions inIraq. project budget. -41 - DamageAooting o fproject sites. I H I Insurance will provide cover untilproject i s completed and handed over to the client. Consulting forms may not be able to H International consulting fmwill be encouraged to team up conduct work withinIraq. with local andregional consultants. Meeting of concerned Iraqi staff could be outside Iraq. Overall RiskRating H Leaend: L:Low M:Medium S: Substantial H:High -42 - Appendix 5.1:Additional Provisionsfor NationalCompetitive Bidding Inorder to ensure economy, efficiency, transparency andbroadconsistency withtheprovisions ofSection IoftheGuidelines,thefollowingcriteriashallbefollowedinprocurementunderNationalCompetitive Biddingprocedures: 1. Standardbiddingdocuments approvedby the World Bank shallbe used. 2. Invitations to bid shall be advertised in at least one widely circulated national daily newspaper and bidding documents shall be made available to perspective bidders, at least 28 days prior to the deadline for the submissiono fbids. 3. Bids shall not be invitedon the basis o fpercentage premium or discount over the estimated cost. 4. Biddingdocuments shall bemade available, bymail or inperson, to all who are willingto pay the required fee. 5. Foreign bidders shall not be precluded from biddingand no preference of any hnd shall be given to national bidders. 6. Qualification criteria (in case pre-qualifications were not carried out) shall be stated in the biddingdocuments, and if a registration process is required, a foreign firm determined to be the lowest evaluated bidder shall be given reasonable opportunity o f registering, without any hindrance i.e. no non-registration status should be considered as a non-eligibility-to-bid criterion. 7. Bidders may deliver bids, at their option, either inperson or by courier service or by mail. 8. Bids shall be opened in public in one place preferably immediately, but not later than one hour, after the deadline for submission o f bids. 9. Evaluation o f bids shall be made to strict adherence to the criteria disclosed in the bidding documents, ina format, andwithin the specified period, agreed with the Bank. 10. Bids shall not be rejected on the basis o f a comparison with an official estimate without the prior concurrence o f the Bank. 11. Split award or lottery in award o f contracts shall not be carried out. When two or more bidders quote the same price, an investigation shall be made to determine any evidence o f collusion, following which: (A) if collusion is determined, the parties involved shall be disqualified and the award shall then be made to the next lowest evaluated and qualified bidder, and (B) if no evidence o f collusion can be confirmed, then fresh bids shall be invited after receiving the concurrence o f the Bank. 12. Contracts shall be awarded to the lowest evaluated bidder within the initial period o f bidvalidity so that extensions are not necessary. Extension o f bid validity may be sought only under exceptional circumstances. 13. Extension o f bid validity shall not be allowed without the prior concurrence o f the Bank (A) for the first request for extension if it is longer than eight weeks; (B) for all subsequent requests for extensions irrespective o f the period. 14. Negotiations shall not be allowed with the lowest evaluatedor any other bidders. 15. Re-bidding shall not be carried out without the Bank's prior concurrence and all contractors or suppliers shall provide performance security as indicated in the contract documents. A -43 - contractor's or a supplier's performance security shall apply to a specific contract under which it was finished. 16. All contractors or suppliers shall provide performance security as indicated in the contract documents. A contractor's or a supplier's performance security shall apply to a specific contract under which it was furnished. -44 - Appendix 5.2: Procurement Plan A. General 1. Project Information: Country: Republic o f Iraq Recipient: Ministry ofElectricityofKurdistan RegionalGovernment Project Name: Dokan and Derbandikhan Emergency Hydropower Project Credit No.: PO99059 Credit Amount: SDR million(US$40.00 million equivalent) Project Implementing Agency (PIA): Ministry o f Electricity of KurdistanRegional Government (MOE ofKRG) 2. Bankapproval ofthe procurement plan: September 16,2006 3. Dateof GeneralProcurementNotice: June 21,2006 4. Periodcoveredbythis procurement plan: 44 months B. GoodsandWorks andNon-Consulting Services 1. Prior Review Thresholds: Procurement Decisions subject to Prior Review by the Bank as stated in Appendix 1 to the Guidelinesfor Procurement: 2. Pre-qualification: Pre-qualification o f contracts will be conducted for works contracts estimated to cost more than US$10 million. It i s expected that pre-qualification will be conducted for one or two works contracts. 3. Reference to (if any) ProjectoperationaVProcurementManual: The PMT will prepare a PIM by the start o f the project. The PIM will be based on the Iraq MIM financed under the Capacity Building Trust Fundfor Iraq. 4. Any Other Special Procurement Arrangements: There is no advance procurement or retroactive financing planned under this project. 5. Other SpecialProcurementArrangements: None. -45 - 6. Procurement Packages with Methods and Time Schedule: It is expected that one civil works contract will be procured using ICB procedures. Other works contracts will be procured using NCB. However, given the security conditions in Iraq, internationalhegional contractors may be reluctant to submit bids, and local contractors, which do not have a history o f producing financial statements or providing information on their financial performance, may not be ina positionto satisfactorily respond to bids' financial criteria. This may needto be taken into consideration duringthe preparation of bidding documents by, for example, reducing the financial requirements for qualifying bidders. Goods will be procured using ICB, NCB or shopping, depending on contract value. There i s no domestic preference under the project. A detailedprocurement plan is attached. C. Selectionof Consultants 1. Prior Review Threshold: Selection decisions subject to Prior ReviewbyBank as stated inAppendix 1to the Guidelines Selections andEmployment o fConsultants: SelectionMethod PriorReview Threshold Comments a. Competitive Methods (Firms) >= USS100,OOO and first two contracts irrespective o f the value or the selection method b. Single Source (Firms) All c. Individual Consultants >= US350,OOO d. Single Source (Individual) All 2. Short list comprising entirely of .national consultants: Short list o f consultants for services, estimated to cost less than US$200,000 equivalent per contract, may comprise entirely national consultants inaccordance with the provisions o f paragraph 2.7 o f the Consultant Guidelines. 3. Any Other SpecialSelectionArrangements: None. 4. Consultancy Assignments with Selection Methods and Time Schedule is indicated in the procurement plan. D. ImplementingAgencv Capacitv BuildinpActivitieswithTime Schedule 1. The agreed Capacity BuildingActivities are listed with time schedule. procurement, technical, and and on thejob training included inthe scope of financial staff duringthe project's works o f the principle implementationperiod contract for engineering services (C01/06). Other consultants will be recruited for specialized procurement, financial and -46 - \o 0 \o \o J 0 0 82 8L 8L rn rn 3 3 \o 4 u2 2%. 4 2%. N N 0 p! 2 0 ec: a 2 e, i I co rz d I 3 9 3 N 0 d 2 PI r- c; z N Y m W 9 m 3 W 9 W 0 ? E> N m I M d a 2 ' - r%) M . v) 2 $ Appendix 5.3:Assessment of MOE of KRG Capacityto Implement Procurement An assessment o f the MOE's procurement capacity has been carried out by the Bank team. This assessment is based on discussions with MOE o f KRG staff inAmman, during the pre-appraisal mission in July 2006 and the OPR for Iraq prepared in 2005. The completed standard agency procurement assessmentreport i s available inthe Project File. MOEis one ofthe largest employers inKRG. Ithas about 10,000 employees. Large projects (US$10-20 million) were implemented by MOE during the OFFP, following UN procurement guidelines. Experience, however duringthis period is predominantly inprocurement o f equipment and machinery. In the eighties the MOE implemented projects (works, goods and consultants) with values inthe hundreds o f millions o f US$, whose technical specifications were preparedby the design and planning departments o f MOE. There i s no specialized procurement department in the current organizational structure o f MOE. International procurement is carried out by the Directorate for Planning and Execution within MOE. Local procurement is carried out by each directorate o f MOE through a specialized unit. International and local procurement are closely coordinated with the Directorate of Administrative and Financial Affairs. There are separate Committees for Bid Opening, and Bid Analysis and Study, which are most often standing committees with members having 6-month appointments; however, the latter may be formed on an ad-hoc basis. The Bid Opening Committee opens and tabulates the bids. The Analysis and Study Committee evaluates the bids and recommends selection o f a preferred bidder; it then negotiates with the preferred bidder; and if such negotiations are successful it seeks approval from management, before the Commercial Department executes the contract. Procurement activities under this project will be carried out by a PMTwhich is established inMOE under the direct supervision o f the Director General for Electricity Production. The PMT will be staffed entirely o f MOE staff, who are transferred from their existing departments to work, on full-time or part-time basis, as PMT staff. The PMT will closely coordinate its daily activities with the different departments o f MOE, particularly with the Directorate of Planning and Execution (See Annex 3). It is critical that at least one qualified procurement staff member be selected prior to the Credit signing. H e or she should be trained on and become well-vested in Bank procurement procedures within the first three months after Credit signing. Such training can be obtained through attending formal courses ininternational institutions that deliver training on Bankprocurement. Given that the procurement environment which prevailed in Iraq/KRG during the last two decades was different from the norms o f acceptable international practice and the legal and regulatory changes introduced by the CPA, public procurement will predictably bear a high level of risk in the near future. The risk lies essentially inthe lack o f good laws andregulations, modem standard documentation, lack o f training o f concerned staff in procurement using Bank guidelines and international sound procurement practice, and the inability o f Bank procurement staff to supervise projects inthe field. On the positive side; however, Iraq and KRG have a wealth o f procurement and engineering staff that may be retained rapidly to operate a reformed procurement system and use new procurement documents and tools as they become available. Some MOE staff has already received training courses in procurement, financial, andproject management that were organizedby the World Bank inJordan. RecommendationsandActionPlanto Buildthe Agencies Capacity One procurement officer will be assigned full-time to PMT. He or she will receive both formal project. and ad-hoc procurement training to efficient handling o f the procurement activities under the -50 - ...An international consulting firm will be recruited to assist the PMT with preparation of tender documentsas well as associatedprocurement activities. Series of training sessions and workshops on procurement will be carried out throughout project implementation. The target audiencewould be PMT staff and other employees ofMOE. A MIM for Iraq was prepared by Bank consultants in 2005. The MIMwould provide standard procurement documents, evaluation reports, progress reports, filing requirements that would be followed throughout project implementation. The thresholds for prior review by the Bank are set at a low level, to allow Bank staff to provide hands-ontraining to staff o fthe PMT. -51 - Annex 6: FinancialManagementand Disbursement FinancialManagement FMAssessment 1. An assessment o f the financial management (FM) arrangements at MOE o f KRG and those proposed for the project was undertaken, remotely, during meetings in Amman, Jordan. The purpose of the assessment was to determine whether these arrangements were acceptable to the Bank in providing reasonable fiduciary assurance that the proceeds of the Credit are used for the purposes for which it was granted with due regard to economy, efficiency and the sustainable achievement o f the project's development. The documentation o f the assessment is available inthe project files. 2. Based on the result o f the assessment, the FM risk, as a component o f the fiduciary risk, and which i s a combination o f country, sector and project specific factors is high. Inlight o f the Bank Second InterimStrategy Note covering ITF and IDA-financed projects executed by the Iraqi Government, the project financial resources, extended through the IDA Credit, will be managed through the framework of MOE o f KRG financial systems, regulations, and controls. Consequently, a number of measures will be introduced to mitigate the weaknesses identified. The public sector's legal framework in the KRG, as described by MOE o f KRG representatives, is similar to the framework for the 15 central and southern Governorates o f Iraq. Paragraph 5 below reflects a summary o f the MOE of KRG FM arrangements, which are acceptable for the proposedproject. 3. Country FM Risk: A Country Financial Accountability Assessment (CFAA) has not yet been undertaken for Iraq; however, Iraq has been defined as one of the "high risk-weak control environment countries" that requires special attention, from the Bank, at various levels. Major reasons for this categorization are the impact o f the security conditions and years o f isolation, the weaknesses of the public FM system, the inefficiencies o f the banlung system, the very low ranking in the Corruption Perception Index for 2005, and the various reports issued by independent auditors and other donors, including the International Monetary Fund-World Bank April 2005 report on Iraq Public Financial Management14. To add to the reasons o f this risk, i s the lack o f experience that the Bank has with the KRG, interms o f implementingprojects. However, inview o f the mitigatingactions already inplace and the further actions agreed in the FM action plan, the FM arrangements meet the Bank's minimum requirements. 4. Project FMRisk: The most recognizedrisks are: Lack o f independent verification function. H =High Risk; S=SubstantialRisk; M=Modest Risk; N =Low or Negligible Risk 14Enhancing Sound PFM-Short-to Medium-TermReforms. -52 - MOE FMArrangementsBackground: 5. The MOE o f KRG has four general directorates responsible about the technical activities (Technical, Electrical Power, Distribution, Electrical Networks) and six departments (Commercial, Finance, Legal, Information and Relations, Financial Control, and Administrative). The MOE o f KRG follows the public FMlaws applied inIraq, includingthe UnifiedAccounting Systemthat sets the rules o f the accounting books, periodic reports, pre-disbursements controls and auditing requirements. Each directorate has an independent budget and accounts and is financed directly by Ministry of Finance (MOF), if it is not self-financed. The Finance department receives monthly trial balances from the independent accounting units in directorates, reviews them and sends them to MOF. The Finance department review covers over spending, accounts receivable and payable reconciliation. Request o f budget allocations from MOE i s made based on need. Salaries are financed by the central MOF directly. The MOE f KRG is currently implementing 150projects with a 2005 budget o f IQD80,OOO million. The budget for 2006 is IQD160,OOO million. Each project has separate accounts and records. The book keeping i s done manually; however, the inventory and payroll are automated. MOE of KRG keeps 3 banking accounts: an I Q D account inRasheed Bank for operating budget hnds, an IQDinRasheed Bank - for capital budget funds, and a USD account in Trade Bank o f Iraq for capital budget funds. The process o f initiating, reviewing and authorizing a payment is as follows: Contractor + Project Technical Legal Commerce Finance Engineer Department -b Department Department -b Department Project FMArrangements 6. Internal Control: 6.1. Staffing: The PMT i s supported by an experienced Financial Officer (FO), assisted by an accountant, who will undertake the responsibilities o f maintaining financial records including contracts' payments, ensuring timely payments authorization, submitting withdrawal applications to the Bank, and preparing periodic reports and financial statements. 6.2. Clear Documented Procedures:The PMT will draft and use a PIM based on the MIMprepared for all Bank projects implemented inIraq. The manual will clearly disclose each PMT member job description, the payment verification, authorization and execution processes, authority limits, as well as physical control o f assets, especially spare parts, and equipment. 6.3. Independent Verification: The PMT FO and accountant will apply the segregation o f duties principle inmaintaining and reconciling records. Either o f them will monthly reconcile accounts o f funds disbursedby the Bank to accounting records. Inaddition the external auditor will report, pertinent, and will providerecommendations for its improvement. . in his management letter, on any deficiency in the FM system and controls that is considered 7. Budgeting: The PMT will maintain a project budget and detailed disbursement plan per quarter. This plan will be developed based on the initial procurement plan and estimated payments cycles, and revised upon need. It will be used as a monitoringtool to analyze budget variances and manage cash. 8. Accounting: Based on the number o f the contracts the frequency o f payments, spreadsheet applications will be used to recordthe project's financial transactions and generate reports. Procedures for protecting the data and preventing losses will be maintained. -53 - 9. Financial Reporting:The PMTwill be responsible for preparingthe following: 9.1. Quarterly Interim un-audited financial reportsRMRs as part o f the quarterly project progress reports, and submitting them to the Bank within one month from the quarter then ended. The proposed format o f the reports was agreed upon during the negotiations. These reports consist of a statement o f sources and uses of funds by component; statement o f uses o f funds by category o f expenditure; both comparing actual and planned expenditures; and list o f contracts' commitments. 9.2. Annually Project Financial Statements (PFS), and submitting an audited PFS with the independent auditor opinion having to the Bank not later than six months after the end o f each fiscal year. The PFS include: (i) statement o f sources and uses o f funds by component, (ii) statement o f uses o f funds by category o f expenditures; and (iii) o f contracts' commitments. list 10. Auditing Arrangements: An external independent auditor acceptable to the Bank and with international experience will be engaged to carry out the project audit in accordance with international standards o f auditing, issue the required independent opinion, and prepare the management letter. The audit TORSinclude performing an SOE review for the audit period covered. The audit report and management letter will be submitted by the PMT to the Bank not later than six months after the end o f each fiscal year. An escrow account will be used to pay the auditor after the project's closing date. 11 Funds Flow E-mail Notification of Disbursement Credit Account Reimbursements I Proiect Account I Direct Pavment - Suppliersand Consultants Flow o f documents Flowof Funds -.-.-.-.-. b and Information Supervision 12. Where security conditions make travel to Iraq impossible for Bank staff, supervision missions will be undertaken from an alternative location. Close monitoring o f financial management arrangements will be conducted through out the project life. Supervision during the first year will be conducted about 3-4 times a year. The FO and accountant will get an intensive training on FM arrangements before the project start and also will attend all the capacity building workshops conducted by the Bank for all projects. -54 - FMAction Plan Action ByWhom Date Opening a project account with a sufficient advance KRGMOERMT January 1,2007 amount. Hiringanexternalindependent auditor KRG MOERMT February 28,2007 Prepare Financial Chapter o f PIM KRGMOEPMT December 15,2006 Disbursement 1. The Bank's strategy in Iraq i s to implement projects though the Iraqi Ministries (rather than Project Implementing Units outside government structures), ensuring that appropriate and effective financial controls are inplace over the use of funds provided by the Bank, while at the same time working together to strengthen the Ministries' own financial control processes and procedures. Taking into consideration the high risk environment assessed for the project, including the assessed high financial management risk, the disbursement arrangements will compensate by continuing to use appropriate disbursement methods. The disbursement methods used will be: o Direct Payments to suppliers and consultants for eligible expenditures, for disbursements over US$75,000. o Reimbursement to the MOE for eligible expenditures paid from the MOE resources. The MOE will submit reimbursement applications once per quarter, or whenever expenditures reachUSD 50,000 or more. o Special Commitments to facilitate payments under Letters of Credits for prior review contracts for the importation o f goods as agreed inthe procurement plan. 2. These are the disbursement methods that have been approved for both the ITF and IDA-financed projects under implementation. Extensive training will be provided to the existing MOE of KRG P M T FO and accountant. Supporting documents, e.g., copies o f invoices andreceipts, or Statement of Expenditures (SOE) are required to be provided with all requests to disburse funds. The SOE thresholds are detailed in the Disbursement Letter. The original copies of the supporting documentation will be maintained by the MOEo fKRGandmade available for review byBank representatives uponrequest. 3. Country Financing Parameters (CFP) were approved for Iraq in September 2005. The CFP allow for the financing o f 100 percent o f eligible project expenditures. The MOE o f KRG will provide implementation support, including the assignment o f MOE o f KRG staff to the PMT, MOE staff support in the MOE of KRG Directorates. The MOE will finance staff salaries and some related operating expenses. -55 - 4. The allocation of the proceeds o f the Grantby expenditurecategory is as follows: ExpenditureCategory Amount in Financing US$ Percentage 1 Goods I 100,000 1 I 100% I I 20,400,000 ~ 1 2 Works i 100% I ~ 3 I Consultantsservices andtraining 3,600,000 ~ I 100% 4 Incrementaloperatingcosts I 200,000 j 100% I I I 5 Unallocated I 2,700,000 100% I I I , TotalCredit 1 I 27,000,000 I Table :DisbursementSchedule(US$ million) ~~ CalendarYear (CY) CY07 CY08 CY09 CY10 CY11 Absolute 5.O 15.0 10.0 5.OO 5.00 Cumulative 5.O , 30.0 40.0 Fiscal Year (FY) FY07 FYO8 FYO9 FYI0 I FYI1 Absolute 5.O 15.0 10.0 5.00 5.00 I ~ I I I Cumulative 5.0 1 20.0 30.0 35.OO - 40.00~.____ ~ ~ A_-__- -L -~ ~ -56 - Annex 7: Environmental and Social Safeguards Assessment Framework 1. As outline above, the project will only finance urgent repairs at the Dokan and Derbandikhan hydropower plants and prepare for the subsequent full rehabilitation o f these plants. The project i s therefore rated as a category "B" project. Based on the ESSAF applicable to the current emergency operations in Iraq, the MOE of KRG, with the help o f consultants, will ensure that all environmental mitigation measures are included as part o f the civil works, goods and services contracts. The Ministry agreed prior to appraisal that it will ensure that: (i) standard environmental codes o f practice will be included inthe repair and reconstruction biddocuments o f all project components; (ii) all sort of wastes, specially hazardous ones and PCBs (if any) will be disposed of following environmentally and socially sound options; and (iv) appropriate staffing and adequate budget will be allocated for the effective implementation and monitoring o f the management plan. No resettlement issues are envisaged or expected for this project. 2. The PMT will develop the Environment Management Plan (EMP) inconnection with the urgent repair work within the context o f ESSAF designed for Iraq and with the assistance o f the Bank. A typical content o f an EMP is outlined in the tables below. The areas o f Surface Water, Soil and Groundwater, Biological Environment and Cultural Heritage are irrelevant for the urgent work. Table 8.1 -Analysis of Impacts EnvironmentISocfal Area Construction Operation Air quality Dust emissions from construction None activities, emissions o f carbon monoxide, from construction machmery Noise Noise emissions generated by various None construction machmery Traffic Increase in traffic levels to the None construction sites Surface water Spills o f chemicals and sediments into Proliferation o f aquatic weeds, surface water bodies deterioration o f water quality in reservoir, sedimentation o f reservoir and loss o f storage capacity, formation of sediment deposits at reservoir entrance creating backwater effect and flooding as well as water-logging upstream, scouring o f riverbed, saltwater intrusion inestuary and upstream, land use practices in catchment areas above reservoir which may result in increased siltation and changes inwater quality Soil and groundwater Spills o f chemicals which may leach into Salinization o f floodplain lands, soil and groundwater environmental degradation from increasedpressure on land Socioeconomics Provision o f localjob opportunities. None Health and safety Accidents resulting from the improper Improved health and safety as a result of -57 - materials as well as accidents occurring equipment ~ with the operation o fheavy equipment Landscape and visual Presence o f equipment or material, soil None intrusions heaps, and borrow pits presenting an unsightly view Waste generation Generation o f construction waste and None general refuse Table 8.2 -Mitigation Measures Environment/Socid Area Construction Operation Air quality Including site enclosure, enforcing low speeds on vehicles moving in and around the site, ensuring that construction equipment are well-maintained, and practicing water spaying when needed Noise Limiting site working hours to selected daytime hours, installing silencers or mufflers on construction equipment Traffic Limiting the movement o f heavy NIA machinery to off-peak hours and providing prior notification as well as adequate traffic signs on the roads leading to the site Surface water Proper storage of chemicals on site, Clearance o f woody vegetation from continuous removal o f construction spoils inundation zone prior to flooding to minimize sediment transport, storage (nutrient removal), weed control o f used oils in a proper container for measures, harvest o f weeds for compost, further disposal or recycling fodder or biogas, regulation of water discharge and manipulation o f water levels to discourage weed growth, clearance o f woody vegetation from inundation zone prior to flooding, control o f land uses, wastewater discharges, and agricultural chemical use inwatershed, Limit retention of water in reservoir, provision for multi-level releases to avoid discharge o f anoxic water, control o f land use in watershed (especially prevention of conversion o f forests to agriculture), reforestation andor soil conservation activities in -58 - Environment/Social Area Construction Operation watersheds (limited affect), hydraulic removal o f sediments (flushing, sluicing, release o f density currents), sediment flushng, design o f trap efficiency and sediment release (e.g. sediment flushing, sluicing) to increase salt content o f released water, maintenance o f at least minimum flow to prevent saltwater intrusion, land use planning efforts which include watershed areas above dam Soil and groundwater Proper storage o f chemicals on site, Regulation o f flow, choice o f continuous removal o f construction spoils resettlement site to avoid surpassing to minimize sediment transport, storage carrying capacity o f the land, increase o f o f used oils in a proper container for productivity or improve management o f W h e r disposal or recycling land (agricultural, range, forestry improvements) to accommodate hlgher population Socioeconomic N/A N/A NIA ~ Health and safety Personal Protective Equipment (PPE) for on-site workers, as well as development o f emergency response plans Landscape and visual Enclosing the construction site with non- NIA intrusions transparent fencing Waste generation Reusing construction wastes in filling activities at the site whenever deemed possible, Dispose o f non-reusable construction wastes at a local disposal site agreed uponwith the municipality Table 8.3 -Monitoring Plan Environment/Social Area Criteria ~~Air quality ~~ Dustconcentrations (PMIo) at nearby receptors Noise Noise levels (LeJat nearby receptors Traffic Traffic counts at the access to the construction site Surface water . Rainfall levels, water level in reservoir, annual volume o f sediment transported into reservoir Water quality at dam discharge, different depths o f reservoirs, and at various points along the river (Biological Oxygen Demand (BODS) salinity, pH, temperature, conductivity, Fecal Coliforms, turbidity, Dissolved oxygen, suspended solids, phosphates, nitrates) -59 - EnvironmentISocialArea Criteria 1 Soil and groundwater Visual inspectionof erosioninthe watershed area Groundwater quality (BOD5, salinity, pH, temperature, conductivity, Fecal Coliforms, turbidity, dissolvedoxygen, suspendedsolids, phosphates, nitrates) Socioeconomics Monitor numberof staff employed Health and safety Monitor numberand severity of accidents during construction Landscape and visual Visual inspectionand photographic documentationof vegetationand other landscape intrusions elements Waste generation Regularmonitoringof waste disDosalDractices bv contractors 3. A dam specialist conducted a dam safety review duringpreparationand work that falls under the "urgent" category i s part o f the project scope. The scope also includes conducting a full dam safety assessment andpreparationo f environmentalpreparedness plans for the two dams. 4. A waiver/exception to the notification requirement under para. 7(a) of the O.P. 7.50 (the operational policy on International Waterways) has been approved on the basis that these repairs are not expected to alter the water flow in the rivers or to have down stream implications. However, as part o f the studies to be financed under this project for the subsequent rehabilitation o f both hydropower plants a comprehensive Environmental and Social Assessment will be carried out. The need for notification o f riparians will be reassessedonce these studies are completed. 5. Training and Capacity Building:As part o f the capacity building to be provided under the DDEHPP, Environmental training courses will be heldto ensure the appropriateenvironmental awareness and knowledge and slulls for the implementation of environmental management plans -60 - Appendix 7.1: Terms of Reference for Environmentaland Social Assessment INTRODUCTION 1. The GO1through its MOE has requested funding from the World Bank for emergency repairs o f Dokan and Derbendikhan hydropower plants, both located in the KRG o f Iraq. The objective of the Project i s to help alleviate the current power supply shortage through urgentrepair works and prepare for the rehabilitation o f the hydropower plants to restore their original capacity o f 400 and 249 MW, respectively. At the request o f the World Bank, a reconnaissance dam safe& inspection study including site visits and visual inspection have recently been completed to define emergency actions required at each site. The proposed emervency actions should be considered carefully during the preparation of the present Environmental and Social Impact Assessment (ESIA). 2. Environmental Screening The project will be processed as an Emergency Recovery Project. Considering the emergency situation and the current security conditions in Iraq, an ESSAF designed for Iraq (attached) will be used for this project. At both locations, the main components of the Project consist of emergency repairs at both hydropower stations and the preparation o f the subsequent rehabilitation o f the Dokan and Derbandikhan hydropower stations, which would restore their original capacity o f 400 and 249MW respectively. It is important at the onset to recognize that both the Dokan and Derbendikhan dams and reservoirs have existed for nearly five decades and therefore, they have generally integrated with the surrounding environment prior to the current intervention. On the other hand, the lack o f maintenance and monitoring raised serious technical and safety issues. In addition, environmental and social dimensions have historically not been examined or taken into consideration. The emergency project i s rated as a category "B" and the follow up full rehabilitation project is expected to be rated as category "A" with no direct adverse social impacts and no land acquisition at this point in time. These terms of reference are for the follow up category "A" project. 3. Scope of Analysis The analysis shall include an evaluation o f the "no-action alternative" and an examination o f the direct and indirect effects of the future project. It shall develop an Environmental and Social Management Plan (ESMP) that provides a framework for mitigation, monitoring, and institutional strengthening actions to be integrated into the implementation o f the future project. The terms o f reference also include the preparation of Emergency Preparedness Plans for both hydropower plants. As part o f this process, it is planned that a series o f consultations will be undertaken and that environmental and social studies be disclosed to the public. 4. WorldBank Environmental and Social Policies The Terms o f Reference (TOR) for the ESIA have been prepared in compliance with the environmental and social policies and procedures o f the World Bank. World Bank Safeguard Policies involve mechanisms for integration o f environmental and social issues into decision-malung and are complementedby a Policy on Disclosure o f Operational Information. The World Bank SafeguardPolicies encompasses two main types o f policies namely, environmental and social. Environmental policies include EnvironmentalAssessment, NaturalHabitats, Forestry,Pest Management, Safety of Dams, and Projects involvinginternationalwaters; while social policies include IndigenousPeople, Cultural Property, Involuntary Resettlement, and Projects in Disputed Areas. While it is expected that the Project will trigger more environmental than social policies, the consultant shall provide an overview o f applicable World Bank social & environmental safeguard polices and related requirements. Note that, under current procedures o f the World Bank, all environmental assessments for category "A" projects require that the studies be prepared by an independent consultant that has no conflict o f interest resulting -61 - from having been the lead consultant andor member of a consortium or joint venture responsible for undertaking the feasibility anddesign studies for the proposedproject. SCOPEOF WORK 5. Overall Outputs ESIAreports for both Dokan and Derbendikhan dams, reservoirs and hydropower plants shall be concise and comprehensive. The main text shall focus on findings, conclusions and recommended actions, supportedby summaries o f the data collected and citations for references used in interpreting those data. Detailed or un-interpreteddata are not appropriate inthe maintext and shall be presentedinappendicesor a separate volume. Unpublisheddocumentsused inthe assessment that may not be readily available, shall also be assembledinan appendix. The ESIAreports shall be organized according to the outline below: e Executive Summary which will summarize the project description, the applicable safeguard policies, the environmental and social impacts, the environment and social management summary tables andthe summary o fthe consultation process e Policy, Legal and Administrative Framework e Description o fthe ProposedProject e Environmental and Social Baseline Conditions e Significant Environmental and Social Impacts e Analysis of Alternatives (including the `No-action alternative') e Summary o fthe results of the consultation process e Environmental and Social Management Plan o Resettlement and Land Acquisition Policy Framework/ Resettlement and Land Acquisition Plan, ifapplicable. o Environmental Management Plan: ... Mitigation Measures Monitoring Plan Training and Institutional Strengthening Plan o Summary ofthe Environmental and Social Management Plan e Emergency PreparednessPlan e List o f References e Appendices o List o fPreparers o Records o fInteragency andPublic Meetings o Public ConsultationandDisclosure Planfor the ImplementationPeriod o Data andUnpublishedReference Documents (ifapplicable) o Archaeological and Historical Sites Surveys (ifapplicable) o Archaeological Chance FindProcedures (ifapplicable) o Resettlement andLand Acquisition Policy Framework (ifapplicable) o Resettlement and Land Acquisition Plan(ifapplicable) o Detailed Location Maps for Key Baseline Data and Constraints, including all Project Facilities o DetailedLocationMaps for all MitigationMeasures and Recommended Actions o Copies o fClearances from ConcernedAuthorities (ifapplicable) 6. Objectivesof theAssignment The objective of this assignment i s to conduct an ESIA of the Proposed Project that will: -62 - Be in conformity with the World Bank safeguard policies, taking into consideration the environmental and socialprocedures o fthe GOI; Be based on information and data fiom previous technical studies, original field surveys, and investigations as appropriate; Recognize the environmental, social, and economic impacts o f the proposed project, recommend mitigationand monitoringmeasures to be addressed during the implementation of the project Conduct public consultation, including information meetings and consultation on the scope of work for the ESIA, and timely disclosure o f draft and final ESIAReports. Review and analyze available information regarding the proposed Project and collecting site specific field information related to social and environmental issues inthe primary and extended areas o f influence Prepare an Emergency Preparedness Plan including a flood warning system, and procedures for evacuatingthreatened areasand command and control bodies. 7, Approach The Consultant shall use the existing data, collect and gather supplementary baseline information, and assure a consultation process. The requiredprocedures for completing the ESIA are highlighted below. Task 1.Describetheproject and its associated components 8. The consultant shall provide a detailed description o f the proposed Project with relevant diagrams, maps, tables, and descriptive text based on the existing information. It shall be updated throughout the preparation o f the ESIA. Task 2. Reviewpolicy, legal, and administrativeframeworks 9. The existing policy, legal and administrative frameworks in Iraq related to the construction and operation o f the proposed project shall be reviewed by the consultant and included within the ESIA report. Relevant World Bank Safeguard Policies (outlined in Section A) shall also be reviewed to ensure compliance o fthe project with both local and World Bank regulations. 10. The rehabilitation o f the hydropower plants may require the involvement o f several ministries (Electricity, Environment, Health, Water and Agnculture, etc.) along with various governmental agencies or water authorities. A statement o f the mission o f each shall be included by the consultant in the ESIA report and within the context o fthe proposedproject. 11. InIraq, while existing environmental laws and regulations may not be integrated yet within a well- articulated environmental policy framework, analysis of environmental management and legal- institutional frameworks and capacities shall be conducted by the consultant and included within the ESIA report. It is important to outline sector-specific environmental laws and regulations and put them in the context o f the proposed Project. Iraqi ratified international conventions o f relevance to the proposed Project shall also be presented and analyzed inthe ESIA report. 12. In the context o f the proposed Project, several standards may be adopted including ambient air quality, occupational noise exposure limits, noise guidelines in different zones, water and soil quality standards, etc. As such, the consultant shall identify, summarize, synthesize, and analyze relevant Iraqi environmental standards and will also use the guidelines set forth by the World Bank in its Pollution Abatement and Prevention Handbook (PAAH) which ever are the stricter. Relevant international standards shall also be describedand adopted where feasible and applicable providedthat they are stricter than PAAH and acceptable by the GOI. Such standards could be promulgated by the World Health Organization (WHO), the European Commission (EC), the U S Environmental Protection Agency (USEPA), or other relevant entities. -63 - Task 3. Describe theproject-speciflc environmental and social conditions 13. Baseline conditions define the characteristics o f the existing and future environment with or without the Project implementation. Elements of the environment include its physical (climate and meteorology, surface and groundwater quality, geology, hydrogeology and soil, topography, noise levels, air quality, traffic, rivers and waterways), biological (terrestrial and riverine biodiversity including flora, fauna, rare or endangered species, sensitive habitats, significant natural sites), and socio-economic characteristics (population, land-use, planned development activities, community structure, employment, distribution of income, goods and services, recreation, public health, cultural properties, customs, aspirations, and attitudes). Existingbasic documents (such as topographical and geological maps, technical documents on climate and meteorology, geology, hydrologeology, road characteristics, water qualityiquantity, etc.) shall be collected, reviewed, synthesized, and analyzed. Additional information shall be sought from various government agencies, academic or research institutions, and/or consulting firms. To the extent feasible residents and professionals shall be consulted to validate information from other sources and identify potential gaps in the technical data. Field surveys shall also be conducted where existing site-specific information i s expectedto be inadequate or incomplete. 14. It is particularly important to accurately identify any additional lands that could be required for the Project. In such case, it i s essential to identify any involuntary relocation of people and any individuals whose livelihoods may be affectedby the Project. The numbers, locations, and socio-economic conditions o f the affected people shall be fully documented to assist the GO1 in meeting the objectives o f World Bank OD 4.12. Task 4. Analyze potential environmental and social impacts 15. The potential anticipated environmental and social impacts associated with the proposed project both at the construction and operational phases are typically associated with air quality, noise, traffic, surface water, groundwater and soil, biodiversity, landscape, waste generation, resource use, health and safety, and socio-economics. The consultant shall use both qualitative and quantitative (using analytical and/or mathematical means) approaches to assess the potential impacts. In addition, the consultant shall distinguishbetween significant positive and negative impacts, direct and indirect impacts, and immediate and long-term impacts as well as identify impacts, which are unavoidable or irreversible. 16. The assessment o f impacts is directly related to the definition o f sensitive receptors. As such, the consultant shall identify sensitive receptors located on-site and its surroundings and assess each potential impact separately inthe water shed o f the Project. 17. While minimal social impacts are expected, a Social Assessment shall be conducted as part o f the ESIA to determine how the Project will affect local communities and serve as a broader analysis o f Project related social issues beyond those concerning potential impacts and risks. The Consultant must seek advice from World Bank social specialists to resolve issues in interpretation o f good practice guidelines (http://www.worldbank.org/socialanalysis). 18. For each impact beingidentified, the following shall be provided: Description o f the major issues Documentation o f the cause and effect relationshipsbetween plannedproject activities Identification o f secondary or higher order effects, with clearly defined pathways o f impacts from higher order effects Description o f methods used to predict impacts Assessment o f significance o f predicted direct, indirect, cumulative and trans-boundary impacts, that their relative risks Methods or approaches to assigning impact significance -64 - Justification for the choice o f methods usedto predict environmental impacts Task 5. Analyze alternatives 19. The consultant shall describe the alternatives that were examined in the course of developing the proposedProject and identify other alternatives, which would achieve the same objectives. The concept of alternatives extends to fuel type and specifications, design, technology selection, construction techniques andphasing, and operating and maintenance procedures. 20. The "No Project" scenario shall first be considered inthe analysis of alternatives. Then to the extent possible, the consultant shall compare alternatives in terms o f potential environmental impacts, capital and operating costs, suitability under local conditions, and institutional, training, and monitoring requirements. The costs and benefits o f each alternative shall be quantified, incorporating the estimated costs o f associated mitigation measures. Inthis respect, a set of selection criteria shall be considered to achieve a balance between environmental impacts, the level o f interference with human activities, technical constraints, as well as capital and operational costs. Task 6. Carry outpublic consultation 21. The main objective o f the consultation process i s to inform stakeholders about the Project and allow them to articulate various views, concerns and values to ensure better transparency and accountability in decision-making. In this respect, the consultant with the aid o f concerned governmental authorities shall organize public consultation meeting(s) during the preparation of the ESIA reports inorder to capture the views o f the various stakeholders and the general public, and address them within the ESIA to the extent technically and economically feasible. Task 7. Developan Environmental Management Plan 22. The consultant shall prepare an Environmental Management Plan (EMP) to identify: 1) the mitigation measures that address potentially adverse impacts, 2) the monitoring program that verifies compliance with the recommended mitigation measures and that monitors for unanticipated impacts that might arise, 3) the institutional structure, strengthening and training required to implement the mitigation and monitoring plans. The Consultant shall use the standard World Bank format for the preparation o f the different EMPsummary tables. Task 7.1. Environmental Mitigation Plan 23. The primary adverse environmental impacts that are expected with the construction and operation phases can be eliminated or minimized by careful planning and staging o f construction activities, the adoption o f proper management practices during operation, and relying on effective environmental monitoringand training to support management decisions. The consultant shall devise a mitigation plan to propose several potential impact-mitigation or control measures that shall earn the project more acceptability, by reducing or eliminating to the extent possible many of the expected impacts. Mitigation measures are intended to reduce the effect o f potentially significant impacts on the environment. Thus, they are highlydependent onthe significance of the predicted impact, the nature ofthe impact (permanent vs. temporary), or the phase o fthe project (construction vs. operation). 24. For each negative environmental and social impact (during both the construction and operation phases), the consultant shall identify and describe (wherever applicable): Correspondingprotection measures to mitigate or offset damaging impacts from project activities Costs and benefits for each recommendedmitigation measure developed to resolve a significant environmental issue Appropriateness and cost effedtiveness o f mitigation measures -65 - 0 Technology used in each mitigationmeasure, including information regarding its prior effective use, the range o f environmental conditions under which it i s effective, and the level of skills requiredto operate and maintain the technology Time schedule for implementation o f eachmitigationmeasure, showing that it will be inuse before the project impacts are felt Intervention location(s) for each o f the proposed mitigationmeasures (on an appropriately scaled map) Concernedparties responsible for implementing the mitigationmeasures and the required personnel Defining compensationto affected parties for impacts which cannot be mitigated Task 7.2. Environmental Monitoring Plan 25. The development and implementation o f a continuous, long-term monitoring plan is a crucial step towards ensuring the sustainability o f the Hydropower Plants and associated infrastructure within the surrounding environment. Establishing a database that will be continuously updated will provide a clear indication of potential environmental degradation that will allow remedial action at an early stage thus limitingirreversible damage. The consultant shall develop a monitoringplan within the ESIAreport. The monitoringplan should be implemented at the construction phase and be maintained throughout the entire lifetime o f the project. The main objectives o f the monitoringplan include: 1) monitoringthe performance o f the Plants and associated infrastructure and the effectiveness o f mitigation measures; 2) identifyingthe extent o f the environmental and social impacts predicted in the ESIA on sensitive receivers; 3) determining project compliance with regulatory requirements; and 4) recommending further mitigation measures if found to be necessary. 26. Monitoring indicators o f air quality, noise levels, traffic, surface and groundwater quality and levels, discharge levels, soil, biodiversity, landscape, waste management practices, resource use, health and safety, and socio-economics shall be proposed by the consultant. For certain indicators, sampling and chemical analysis are necessary in order to assess the extent o f the impact, while other indicators require visual inspections and photographic documentation by experienced and specialized personnel. As such, indicators to be monitored, monitoringlocations, analysis methods, equipment required, frequencies, field procedures, responsibilities, implementing parties, as well as relevant comparative standards and budgetary requirements shall be defined by the consultant. Monitoring locations shall be illustrated on detailed scaled maps. Task 7.3. Institutional Strengthening-CapacityBuilding 27. The consultant shall review the authority and capability o f institutions at local, provincial, regional, and national levels and recommend steps to strengthen or expand them so that the management and monitoring plans inthe ESIA can be implemented. The recommendations may include the preparation o f new laws and regulations, new agency functions, inter-sectoral arrangements, management procedures and training, staffing, operation and maintenancetraining, budgeting,and financial support. 28. Appropriate environmental management in the context o f the Project dictates that construction and operation be implemented in accordance with the current state o f the art and knowledge regarding environmental protection. This can be accomplished by hiring competent personnel with the appropriate educational and professional background and institutingperiodic and systematic training programs with site-specific plans that are adequate for protecting the general public and the environment contributing to the mitigation o f potential environmental impacts as well as raising environmental awareness among contractors and operators. For this purpose, the consultant shall develop an environmental training program whereby personnel who will be involved in the construction and operation o f the various components o f the proposed Project will be required to attend prior to the initiation of Project activities. -66 - Similarly, personnel involved inmonitoring activities during both construction and operation shall attend similar workshops to ensure their ability to implement the monitoringplan. Task 8. Resettlement andLand Acquisition Policy Framework and Plan 29. If OD 4.12 i s triggered, the Consultant shall develop a project-specific Resettlement and Land Acquisition Policy Framework, as well as a Resettlement and Land Acquisition Plan. This Policy Framework will provide a detailed review o f the potential need for involuntary resettlement and the general approach, procedures and general principles of compensation for residents, relocations, compensation for the involuntary acquisition of land, compensation for temporary disruption, compensation for damage to crops, and compensation andor costs for removal and replacement of plantings. The Resettlement and Land Acquisition Plan shall also provide detailed involuntary resettlement cost estimates (including entitlements o f different categories o f affected people) that need to be included inthe project and incorporated into the overall project budget. 30. Any required land acquisition additional shall be included in the Resettlement and Land Acquisition Plan by the Consultant so as to comply with World Bank OP 4.12 on Involuntary Resettlement. The Resettlement and Land Acquisition Plan shall be based on up-to-date and reliable information regarding the scale o f the proposed resettlement and land acquisition and its impact on the affected people, including legal issues involved. At a minimum, the Plan shall cover the following elements: (a) an inventory o f lands to be acquired and the numbers of affected persons and assets; (b) description of compensation and other resettlement entitlements to be provided; (c) consultations with affected people about acceptable alternatives; (d) institutional responsibility for implementation; (e) a timetable and budget; (f)participation o f affected people inthe design and implementation o f the resettlement program; (g) gnevance redress system; and (h) monitoring and evaluation o fresettlement implementation. Task 9. Summary of ESMP -Schedule,Responsibilities,and Costs 31. The Consultant shall provide: a) a description o f activities and a time-line schedule for implementing the Resettlement and Land Acquisition Plan (if applicable) and the Environmental Management Plan, with breakdown to the sub-activities of mitigation measures, institutional strengthening, and monitoring activities that are recommended for the Project, showing phasing and coordination with overall Project plans from construction to operations; b) the entity responsible for each activity, and to whom they report functionally and legally; and c) the capital and recurrent cost estimates and sources o f funds for implementingthe ESMP. 32. An ESMP Monitoring Consultant shall be appointed by the GO1to provide assurance and technical advice on effective implementation o f the ESMP. The scope o f work and proposed budget level to appoint and remunerate an ESMP Monitoring Consultant for the construction and implementation phases o f the proposed Project shall be prepared. The ESMP Consultant would report directly to the representativeo f the GO1and coordinate closely with Government environmental officials. 33. The Summary o f the ESMP shall cover enough years to take into account the scope o f work for the ESMP Consultant, and all relatedmitigation, training and monitoringactivities. Task IO. Emergency Preparedness Plan 34. The Consultant shall develop an Emergency Preparedness Plan that encompasses a) Emergency Identification, Evaluation and Classification, b) Inundation Assessment and Mapping, c) Flood Alarm and Early Warning System, d) Evacuation Plan, and e) Transport Links. 35. Emergency Identification, Evaluation and Classification: For each o f the dams, the consultant shall assess the events and conditions that would result in an emergency and evaluate the likelihood o f occurrence. -67 - 36. Inundation Assessment and Mapping: Based on previous studies, stakeholder consultation, topographical maps and other infomation the consultant shall assess and map out the inundation that would result following breach to each o f the dams or their associated hydraulic structures, the communities and number of people that would be affected. The consultant shall also assess the increased steady state flow downstream, as well as the short and long-term impacts. 37. Flood Alarm and Early Warning System: Through consultation with staff at the two power plants, local communities and other stakeholders, the consultant shall recommend a Flood Early Warning System (EWS), the objective o f which will be to providethe decision making authorities withthe earliest possible notice of a possible failure o f the dam or the embankment^'^ that could lead to an uncontrolled release of water from the lake. The flood EWS should comprise: (i)monitoring and alarm system; and (ii) a a communications and early warning system. 37.1 Monitoring and Alarm System: Failure o f the dams are unlikely, especially the concrete Doan dam. The most likely cause o f failure i s probably terrorist attack. This could lead to a n uncontrolled release o f water from the lake that could cause downstream flooding. The monitoring system should include visual assessments, instrumentation readings and automatic recording and relaying of the river level downstream o f each complex. The monitoring system should document and detail the requirements for monitoring at the structure and the various alarm levels relating to discharges at the dam. 37.2 Communication and Early Warning System (CEWS): When the monitoring system, whether by automated alarm or by visual evaluation, causes an alarm to be raised this information must be transmitted automatically to the decision-making authorities. The local Early Communication System (ECS) should be supplemented for the warning o f the affected regions downstream as required by the different levels o f alarm. It should: (i)identi@ the key personnel to be contacted; (ii) determine the most appropriate means o f transmission (radio, telephone, etc); (iii) determine the distribution requirements for each o fthe alert levels; and (iv) determine the organization structure for the CEWS. 38. Evacuation Plan: Following the raisingo f an alert it may be necessary to evacuate people from areas o f flooding. The consultant shall develop the evacuation plan following the completion o f the inundation mapping. The plan shall include: (i) assessment of the communities and areas o f population at risk; (ii) assessment of communication routes, including road, rail and on foot that are available for safe use for evacuation; (iii) identification of safe havens; (iv) assessment o f time scales available for the completion o f the evacuation; and (v) preparation o f the evacuation plandocumentation for inclusion inthe EPP. 39. Transport links: Inaddition to transport routes needed for evacuation inthe event o f an uncontrolled release o f water other transport links will be affected and interrupted. As part o f the development of the EPP, the works shall include: (i) identification o f alternative transport options for crossing the two rivers; (ii) identification o f alternative routes to bypass flooded areas or communication routes downstream; and (iii) development o f an organization structure for control o f transportation following an incident. 15Itis the damowner's responsibilityto detect a warningconditionandinformthe decisionmakingauthorities about the situation. -68 - REPORTING 40. Drafl ESIA Reports with Executive Summary (IO copies). The Draft ESIA Reports shall be submitted within the time schedule set out below. The objective of the ESIA Reports is to present key findings and the most relevant information and data, rather than general and non-specific information. The Draft ESIA Reports shall be concise and limitedto significant social and environmental issues. 41. The Executive Summary shall indicate community/agency consultations undertaken and the budget levels and source(s) of financial support for implementation of the recommended actions. The Executive Summary shall be not more than 30 pages o f text, but shall in addition contain tables, figures, andor maps as necessary. 42. The Main Reports shall focus on findings, conclusions, and recommended actions, supported by summaries o f the data collected and citations for any references used in interpreting those data. Liberal use o f tables, maps, and graphics to present summaries o f data and analyses are strongly encouraged. Detailed or un-interpreted data are not appropriate inthe main text and should be presented in annexes or a separate volume. Unpublished documents that are not readily available should also be assembled in an annex or a separate volume. 43. The Draft ESIAReports shall be delivered to the GO1through the MOEand disclosed to the public as follows: the Executive Summary of the ESIA shall be made available in Arabic and English; the M a i n Report o f the ESIA in English; the Social Assessment with the Resettlement and Land Acquisition Framework and Resettlement and Land Acquisition Action Plan(s), if required, in Arabic and English. Provisions shall also be made for the disclosure o f information to local communities. 44. The GO1 shall organize review meetings and maintain written minutes o f meetings to record the major comments. Main sections o f the ESIA Report that require extensive rewriting and editing shall be re-submitted to the GO1for verification. Once the GO1has issued a letter approving the revisions to the Draft ESIA Reports that incorporate its comments, the Consultant shall submit the Final ESIA Reports. 45. Final ESIA Reports with Executive Summary (25 copies). The Final ESIA Reports shall be submitted within the time schedule set out below. The Final ESIA Reports shall provide complete details of all work performed, analyses made, andjustification of options and recommendations proposed. These reports shall build upon the Draft reports, and integrate comments received from the World Bank, the GO1or other relevant governmental ministries or agencies includingissuesraised and discussed at review meetings, as well as written comments. 46. The Final ESIA Reports shall be delivered to MOE and would be disclosed to the public as follows: the Executive Summary o f the ESIA shall be made available inArabic and English; the M a i n Reports of the ESIA in English; the Social Assessment with the Resettlement and Land Acquisition Framework and Resettlement and Land Acquisition Action Plan(s), if required, in Arabic and English. Provisions shall also be made for the disclosure of information to local communities before the construction phase o f the Project. The Consultant shall prepare a suggested distribution list for the copies, with the objective of a wide dissemination o f the reports to stakeholders, universities and the public. 47. Inaddition, a master hard copies and master soft electronic copies suitable for reproduction purposes shall be provided to MOEto meet any future needs for reprinting. ESIA SUPERVISIONAND TIME SCHEDULE 48. The work of the Consultant shall be supervised by the GO1represented by the MOE. The MOE will -69 - be the focal point for coordination with all other ministries, agencies, and any other international institution. The MOE shall assure free access to all existing data and to all relevant operations and facilities. It shall also provide liaison and contacts with local authorities, NGOs, academic institutions, and will work cooperatively with the Consultant for public consultation activities. 49. The following is the time schedule for the production of the reports described above. This is a relatively short period to conduct the ESIA and receive comments due to the emergency nature o f the proposed project. The Consultant shall begin work upon contract signature. The Consultant shall make all possible efforts to meet the proposed time schedule. Milestone/ Deliverable Weeks to completion 1. Submit Draft ESIA Reports 24 2. Submit Final ESIA Reports Withintwo weeks of receiving comments on Draft ESIA reports STAFFINGAND EXPERIENCEOFTHE CONSULTANT 50. It is anticipated that the Consultant would establish a strong core team o f specialists. It is envisaged that an experienced environmental specialist would serve as the ESIA Project Team Leader. The Consultant should complement the slulls of the core team with other social, environmental, technical, and institutional specialists with experience in Iraq andor internationally. The team is expected to provide pragmatic and insightfulplanning to complete the above scope of work. 51. The Consultant shall propose andjustify the range of disciplines to be included in the core Project team and the complementary skills of other short-term specialists. The inputs of all specialists shall be clearly indicated as it is anticipated that the majority of the work program would be carried out by individuals experienced intheir professional fields and aligned with the tasks assigned. 52. Primary skills and specialties o fthe team are suggestedbelow. The Project Team Leader shall have at least 10years o fprofessional experience working inenvironmental assessment ofprojects, ability to work with government officials, energy and environmental specialists, familiarity with environmental and social assessments for equivalent size projects, and a proven track record inmanaging and coordinating a diverse group of professionals. The team shall include specialists who are highly familiar with specifying detailed mitigation measures, focused training programs, and structured monitoringprograms. The entire proposed Project Team may include, but not be limited to, several o fthe specialists listed below: List of SumestedSpecialists: - Environmental assessment specialist (Team leader); - Hydropowerspecialist; - Waterqualityspecialist; - Terrestrial and river ecologist/ natural habitat specialist; - Environmental health and safety specialist; - Damspecialist - Emergencypreparednessspecialist - SocialScientist. 53. The Consultant shall name individuals to participate in specified roles within the Project Team and provide full curricula vitae and any other information considered relevant by the Consultant. The Consultant shall name the Project Leader, and the other core team members and key short-term -70 - specialists, and provide an assurance that all members o f the proposed team will be made available as specified inthe proposal, ifthe Consultant i s named. 54. The team members should have experience in environmental assessment o f large scale infrastructure projects, preferably in Iraq and/or the Middle East and North Afnca (MENA) Region, and must have familiarity with the World Bank requirements and guidelines. Familiarity with the GO1 environmental guidelines is an asset. The Consultant should have experience in social and environmental studies and be fully familiar withWorld Bank Safeguardpolicies, as well as other relatedguidelines andprocedures. -71 - Annex 8: Responsibilities and Result-Matrix Responsibilities Matrix -72 - monitoringand record keeping system at the PMT 3.04 Prepare simplifiedbidding E R documents for shopping proceduresfor smaller contracts based on the MIM 3.05 Prepare and revisea project R E R operational manual 3.06 Prepare standard bidding E documents for works and goods and RFP for consultants' services basedon the MIM 3.11 Award and sign contracts EN N 3.12 Monitor progressofworks under E E N construction 3.13 Conduct physical inspection of E E N completedprojects 3.14 Coordinateprocurement E S N training to KRG MOE and PMT staff 3.15 Conduct training on E procurement to Iraqi staff Key: R=Review/Clear E=Execute S=Support A=Approve N=Notified Legend: KRG MOE: Ministry of Electncity in KRG, PMT: Poqct ManagementTeam at KRG MOE, Central Government MOE: Central Government's Ministry of Electncity, Cehtral Government MOF: Central Government's Ministry of Finance, Central Government MOPDC: Central Government's Ministry of Planningand DevelopmentCooperahon; KRG MOF: Ministry of Financein KRG, KRGMOP:Ministryof Planningin KRG, WB: World Bank, CONS: Consultants, AUD: ExternalAuditor -73 - Annex 9: Project Files HandoverDocument for Z-59: Rehabilitationof DamsandHydro Power Stations; UNDP; 09/30/2003. Z-59 -ProcessControl andMonitoring System-DerbandikhanPower Station;UNDP; 04/07/2000. RunnersandDraftTubes DerbandikhanHydropowerStationInspectionReport;UNDP; April 2002. Inspectionof Dokanand DerbandikhanDams; Binnie and Partners(Overseas Limited); 02/27/1998; Dokan andDerbandikhanDamInspectionReport; Mark Cordell; July 2006 Procurement CapacityAssessment; World Bank;July 2006; Financial Management Assessment; World Bank; July 2006. -74 - Annex IO: Timetable of Key Project Processing Events Identification October 2005 Request from Borrower October 2005 Preparation and Pre-Appraisal November 2005 throughAugust 2006 Appraisal August 21,2006 Negotiations September 14,2006 Board Approval December, 2006 Expected Effectiveness January 31,2007 ClosingDate (six months after project completion) December 31,20 10 -75 - Annex 11: Names of StafflConsultantsWho Worked on the Project Name Function -76 - Annex 12: Bank Projects in Iraq Difference Between Expected and OrininalAmount in US$ Millions Actual Disbursements a/ Project ID Fiscal ProjectName Year IDA ITF Undisb. Orig. Rev,d Frm PO88945 2004 EmergencyTextbook Provision 40.00 38.56 1.44 1.70 0.00 PO87907 2005 EmergencySchoolConstructionand Rehabilitation 60.00 7.24 52.76 36.00 10.70 PO91305 2005 EmergencyHealth Project 25.00 1.45 23.55 18.95 0.00 PO91344 2005 Emergency PrivateSector Development 55.00 4.15 50.85 35.85 7.35 PO87910 2005 EmergencyWater, Sanitation,and Urban 90.00 4.50 85.50 54.14 35.44 PO87912 2005 EmergencyBaghdadWater Supply 65.00 1.12 63.88 47.99 47.39 PO87881 2005 EmergencyCommunity Infrastructure 20.00 9.72 10.28 5.10 2.10 PO96774 2006 Emergency DisabilitiesProject 19.50 0.09 19.41 1.93 0.00 PO99295 2006 Emergency SocialProtectionProject 8.00 0.00 8.00 0.01 0.oc PO98979 2007 Emergency Household Survey and Policies 5.10 0.00 5.10 0.00 0.00 PO87735 2006 Emergency Road Rehabilitation 135.00 137.00 0.67 PO96234 2006 Third Emergency EducationProject 100.00 101.57 0.02 Total 235.00 387.60 66.83 559.34 202.35 102.98 -77 - STATEMENTOFFC's HeldandDisbursedPortfolio InMillionsofUSDollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2005 INB 8.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 NBKIraq 0.00 0.00 1.89 0.00 0.00 0.00 1.89 0.00 2006 ucc 90.0 8.30 0.00 0.00 0.00 0.00 0.00 0.00 Total portfolio: 98.00 8.30 1.89 0.00 0.00 0.00 I.89 0.00 Approvals PendingCommitment FY Approval Company Loan Equity Quasi Partic. 2004 Iraq SBFF 0.05 0.00 0.00 0.00 ~ ~~ Total pendingcommitment: 0.05 0.00 0.00 0.00 -78 - Annex 13: Iraq at a Glance Iraq at a glance M.East Lower- 8 Hwth middie- kaq Africa inmmw 27.9 312 Z?a4 1,133 2210 1.SP 31.6 744 a m T 2.8 3.B 0.B 3.7 0.7 B1 1W 'De 61 85 2002 mu3 2006 2005 lea 12.6 25.7 34.5 35 2.5 28.5 20.5 Trade 5 1 2 80.0 b92 687 -30.7 h8.5 2.2 10.5 -6.7 -12.5 -7s 257 -34.4 5.2 992a 345.5 1622 1 1 992 345.5 182.2 J 5to n4 2na2 2003 20M 2005 -7.9 4t.4 485 3.7 -5.4 44.2 43.7 5.B -8.8 -27.3 -19.1 3.8 784 2a.5 STRUCTURE OF THE ECOMOMY {% Of GDP1 Growthd irnrstmcnrandGW IK) 21)W 2001 2002 2503 2004 2005 I 6E - 011Se& 603 78 P a80 88.8 ma 658 40 Molbalsccto* 397 239 32.0 31.1 922 342 7 Agriarlk 7 8 7 3 $ I 1 8.4 7 4 -z?? Manufadwang 14b $3 1 1.7 1.0 i a 40 %-me5 69@ 7%3 192 22.8 231 G Pnvateconsumption 866 832 7 9 0 83.9 41 4 354 dc. General g#vennwntconsurnpPon 374 449 5t.7 52.7 56.4 54 1 -GM I m mad mesewices 8814 493 51B 798 934 TB7 (averageamuatgrowth) 2WB 2001 2002 20011 2004 2005 Growthofex~wdimpo~tsffUf I -11 R 1 2 17.0 -28 423 2 2 1 7 -12.1 -10.0 33.5 4 5 8 2 -89 -28.5 -280 6 6 4 8 -2B -20.2 125 -77 - t 5 5 -2z.3 6.9 . 3.3 1 31 0 -21 -06 -2.6 30 0 -3.53 -769 4 4 5 -289 5 0 2.5 1387 1 0 3 -79 - 5.180 333% 11.304 880 2,wQ 2.435 5.000 8.850 1Q.Q 43.9 2M)o r n f zfw2 18.527 "1.008 9.111 2 W 4,W? 9.Wi "10% 817 452 .. 443 44.3 -853 424 . .. .. 1.w I,$% %,E1 -80 - IBRD 34967 IRAQ DOKAN AND DERBANDIKHAN HYDROPOWER REHABILITATION PROJECT SELECTED CITIES AND TOWNS MAIN ROADS GOVERNORATE CAPITALS RAILROADS NATIONAL CAPITAL GOVERNORATE BOUNDARIES RIVERS INTERNATIONAL BOUNDARIES 40E 42E 44E 46E 48E TURKEY To Urmia - - To Urmia ZakhuZakhu - 0 50 100 150 Kilometers To DAHUKDAHUK Al Qamishli - Tigris R. Dahuk 'Aqrah'Aqrah Dahuk - 0 50 100 Miles Haji Ibrahim Haji Ibrahim Rayat Rayat - - (3,600 m) (3,600 m) ARBILARBIL - Sinjar Sinjar - Mosul Mosul Arbil Arbil - 36N EuphratesR. To Dayr Dokan Dam az Zawr N I-N AW Á 36N As As SulaymaniyahSulaymaniyah - - ISLAMIC SYRIAN Al Hadr Al Hadr R. AS SULAYMANIYAH AS SULAYMANIYAH - - REPUBLIC Zab KirkukKirkuk - ARAB AT AT Lesser OF IRAN To Dayr TA'MIM 'MIM - REP. az Zawr Bayji- J Bayji a b a Derbandikhan Dam l H - a - Tikrit krit m 'Anah 'Anah - SALAH AD SALAH AD r i - n - To Kermanshah - - Al Qa'im Al Qa'im DINDIN Samarra' Samarra' - - 34N - R. Al Hadithah Al Hadithah 34N Tharthar Diyala To Hims Lake 'Akashat 'Akashat - - Ba'qubah Ba'qubah - DIYALÁDIYALÁ - Ar Ramadi Ar Ramadi - - Al Fallujah Al Fallujah- BAGHDADBAGHDAD Habbaniyah - - - Lake BAGHDADBAGHDAD A L A N B A R Trebil rebil Razzaza WA- IT WAS To S y r i a n Lake KarbalaKarbala- BABILBABIL - Al Kut Al Kut - Amman TigrisR. Al Hillah Al Hillah KARBALA'KARBALA' - To Dezful - JORDAN D e s e r t 32N Ad Diwaniyah Ad Diwaniyah - - - Al Hayy Al Hayy 32N NukhaybNukhayb An Najaf An Najaf Al 'Amarah - AL QADISIYAH AL QADISIYAH- - Al 'Amarah - Euphrates MAYSANMAYSAN R. As Samawah As Samawah - Ash Shatrah Ash Shatrah To Ahvaz - S DHI- QAR Al 'Uzayr Al 'Uzayr DHI QAR - a AN NAJAF AN NAJAF h r An Nasiriyah An Nasiriyah - - a ' a l H Al Basrah Al Basrah ij a As Salman As Salman - r a AL Az Zubayr AL Az Zubayr h Umm Umm 30N AL MUTHANNÁ AL MUTHANNÁ BASRAHBASRAH Qasr Qasr 30N To Ad IRAQ Damman SAUDI ARABIA KUWAIT This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any 28N endorsement or acceptance of such boundaries. 40E 42E 44E 46E 48E AUGUST 2006