Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) LATIN AMERICA AND CARIBBEAN | Mexico | Energy & Extractives Global Practice | Global Environment Project | Specific Investment Loan | FY 2006 | Seq No: 21 | ARCHIVED on 29-Apr-2016 | ISR23287 | Implementing Agencies: SENER Key Dates Key Project Dates Bank Approval Date:29-Jun-2006 Effectiveness Date:18-Apr-2007 Planned Mid Term Review Date:14-Jun-2013 Actual Mid-Term Review Date:02-Jul-2013 Original Closing Date:30-Jun-2014 Revised Closing Date:30-Apr-2016 Global Environmental Objectives Global Environmental Objective (from Project Appraisal Document) The global objective of the project is to reduce greenhouse gas emissions (GHGs) and remove barriers to the development of renewable energy technologies and markets, per the Global Environment Facility Operation Progam 6. To assist Mexico in developing initial experience in commercially-based grid-connected renewable energy applications by supporting construction of an approximately 101 MW IPP wind fram, while building institutional capacity to value, acquire, and manage such resources on a replicable basis. Has the Global Environmental Objective been changed since Board Approval of the Project Objective? No Components Name Financial Mechanism:(Cost $20.40 M) Technical Assistance:(Cost $3.90 M) Project Management:(Cost $0.70 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of GEO  Moderately Satisfactory  Satisfactory Overall Implementation Progress (IP)  Satisfactory  Satisfactory Overall Risk Rating  Low  Low 4/29/2016 Public Disclosure Copy Page 1 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) Implementation Status and Key Decisions The La Venta III wind power plant has been operating since October 2012 and numerous technical assistance activities are now completed or nearly completed. Average capacity factor (October 2012 - March 2016) is 32%, in line with revised expectations. The project has met all the targets for its Global Environmental Objective indicators. The most relevant achievements are: - Generation Capacity of Renewable Energy constructed (target of 100 MW): 102.85 MW; - Increase electricity supply to the national system from renewable energy sources (target of 270.3 GWh/year): 94% of target in 2013, 104.5% of target in 2014 and 106.5% of target in 2015, for an accumulated electricity supply of 1006 GWh (October 2012 to March 2016). - Avoided emissions (target of 166,769 tonsCO2e/year): 94% of the target in 2013, 104.5% of target in 2014 and 106.5% of target in 2015, for accumulated avoided emissions of 620,840 tCO2e (October 2012 - March 2016). The project played a key role in the full-scale deployment of wind power in Mexico (particularly in the Tehuantepec Istmus), as it was the first Independent Power Producer (IPP) at comercial scale, whose demonstration impact paved the way for a major private sector investment in the wind industry in Mexico (approximately 2,700 MW of installed capacity by the end of 2015). Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Low  Low Macroeconomic  --  Low  Low Sector Strategies and Policies  --  Low  Low Technical Design of Project or Program  --  Low  Low Institutional Capacity for Implementation and Sustainability  --  Low  Low Fiduciary  --  Low  Low Environment and Social  --  Moderate  Moderate Stakeholders  --  Low  Low Other  --  --  Low Overall  --  Low  Low Results Global Environmental Objective Indicators 4/29/2016 Public Disclosure Copy Page 2 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) PHINDGEOTBL  Generation Capacity of Renewable Energy (other than hydropower) constructed(Megawatt, Core) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 102.85 102.85 100.00 Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments The project achieved 102.85% of target through the commissioning of la Venta III (102.85 MW installed capacity) in October 2012. PHINDGEOTBL  Generation Capacity of Renewable Energy constructed – Wind(Megawatt, Core Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 102.85 102.85 100.00 Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 PHINDGEOTBL  Increase electricity supply to national system from renewable energy sources, over baseline. (GWh/yr)(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 287.835 GWh from January to 286.68 GWh from December 2015 270.3 GWh annually 7.36 January to December (revised data (257.5 min) 2015 using actual generation) Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments Accumulated 1006 GWh from October 2012 (commissioning) to March 2016; The project achieved 106.5% of target in 2015. 4/29/2016 Public Disclosure Copy Page 3 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) PHINDGEOTBL  Increase total installed renewable capacity, over baseline (MW).(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 101 MW (expected 2 wind farms 102.85 MW 102.85 MW operations) Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 PHINDGEOTBL  Emissions reduced (tons/year), over baseline (CO2, NOx, SOx, and particulates).(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 176,887.10 tCO2e from 177,595 tCO2e 166,769 tons per 0 January to December from January to year of operation 2015. December 2015. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments Accumulated avoided emissions for 620,840 tCO2e from October 2012 (commissioning) to March 2016. The project achieved 106.5% of the target in 2015. PHINDGEOTBL  Barrier Removal results described below under PDO.(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Baseline values Barriers greatly Barriers greatly reduced Barriers removed described in PAD reduced Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments Barriers have been greatly reduced, as shown by the strong development of wind power in recent years (approximately 2,700 MW of installed capacity across the country by the end of 2015), as reported by the Regulatory Energy Commission (CRE for its acronym in Spanish). Wind power development remains strong and AMDEE (Spanish acronym of the Wind Power Mexican Association) estimates that additional 12,000 MW will be installed in Mexico between 2020-2022. 4/29/2016 Public Disclosure Copy Page 4 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) PHINDGEOTBL  Established CFE system short-run marginal cost-based Reference Price combined with agreed maximum U.S. 1.1 cent GEF tariff support sufficient to attract bids, investment, construction and operation(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value System None System established System established established Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments 2 bids received and one contract for 100 MW awarded (target achieved). PHINDGEOTBL  Subsequent POISE include plans for additional wind IPP procurement at higher reference price and/or lower incentive support level (subject to availability of subsidy funds - GEF or other).(Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value None 8 8 POISE includes > 1 Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments The project achieved 800% of target as POISE 2012-2026 included 8 new wind plants which are expected to start operation between 2014- 2019: Sureste III, IV and V (908 MW), Rumorosa I, II, III (300 MW) and Tamaulipas I, II, III (600 MW) - none of which benefits from additional tariff support. Overall Comments Intermediate Results Indicators PHINDIRITBL  Functioning mechanism for the auctioning of tariff subsidy support through competitive bidding established, with incremental tariffsupport provided by GEF. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Mechanism is Value None Achieved Achieved in place and functioning Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments 1 contract awarded for 100 MW through competitive bidding. Tariff support mechanism in place and with monthly disbursements since October 2012. 4/29/2016 Public Disclosure Copy Page 5 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) PHINDIRITBL  Operational Manual for the auctioning mechanism finalized with CFE sign-off, and adopted by CFE. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Operational Value None N/A N/A manual adopted Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments N/A since the auctioning mechanism is in place. PHINDIRITBL  Regional Environmental Assessment is completed and made available for the La Venta III bidding package. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Regional Environmental Value None Partially Achieved Partially Achieved Assessment completed Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments An environmental assessment was prepared prior to the bidding but it did not include a regional review. The SESA, which was recently completed, includes a review of the cumulative environmental and social impacts of wind development on the Tehuantepec area. 4/29/2016 Public Disclosure Copy Page 6 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) PHINDIRITBL  CFE base solicitation allowing for locations other than the currently identified for La Venta III, including those that would require a change in transmission lines. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Authorization to change location Value None Achieved Achieved included in the bidding documents. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments Such flexibility was included in the bidding documents. PHINDIRITBL  Number of qualified bids received from tender. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target At least three Value None Achieved Achieved qualified bids received Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments 2 technical bids and 1 financial bid PHINDIRITBL  IPP solicitation for at least 70 MW of wind power. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target IPP solicitation for at least 70 Value None Achieved Achieved MW of wind power. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments IPP wind contract for 100 MW awarded. 4/29/2016 Public Disclosure Copy Page 7 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) PHINDIRITBL  Only those bids proposing development in sites identified as environmentally suitable for development are accepted as eligible. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Only those bids proposing development in sites identified as Value None Achieved Achieved environmentally suitable for development are accepted as eligible Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments Environmental authorization obtained by CFE for the site. If a different site were chosen, bidder would have been responsible for obtaining the authorization. PHINDIRITBL  Co-financing provided by private entities and export credit agencies by way of capital investments. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Co-financing provided by private entities and export Value None Achieved Achieved credit agencies by way of capital investments. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments Iberdrola, a private firm, was awarded the contract. PHINDIRITBL  Mechanism for payments to ejidos, indigenous communities, and small landowners, with established process through which landowners or ejidos can verify revenue and requisite payments. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Mechanism for payments to ejidatarios, Value None Achieved Achieved indigenous communities, and small landowners, 4/29/2016 Public Disclosure Copy Page 8 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) with an established process through which landowners or ejidatarios can verify revenue and requisite payments. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments Mechanism for payments in place and agreements signed. PHINDIRITBL  Funds disbursed to ejidos, indigenous communities, and small landowners. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Funds disbursed to ejidatarios, indigenous MXN 11.388 million MXN 11.884 million paid Value None communities, paid in 2014 in 2015 and small landowners as indicated in agreements. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments Funds for 2015 were fully paid. Accumulated disbursements since 2012 are MXN 54.423 million. PHINDIRITBL  Significant avian/bat mortality is avoided. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Avian/bat mortality is Value None In progress In progress within acceptable ranges. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 4/29/2016 Public Disclosure Copy Page 9 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) Comments CFE has finally submitted estimations of avian mortality, including the undercounting effect. The information has been deemed acceptable by the team's environmental specialist and he confirmed that avian mortality is line with data from around the world. PHINDIRITBL  CFE purchase tariff proposed for Phase II which reflects SRMC plus RE capacity value and energy portfolio diversification value. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target CFE purchase tariff proposed for Phase II which reflects SRMC plus RE Value None N/A N/A capacity value and energy portfolio diversification value Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments There will be no phase II since no subsidies are required anymore for wind power development. PHINDIRITBL  CFE purchase price tariff proposed for Phase II which requires reduced GEF subsidy from Phase I. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target CFE purchase price tariff proposed for Phase II which Value None N/A N/A requires reduced GEF subsidy from Phase I. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments There will be no phase II since no subsidies are required anymore for wind power development. 4/29/2016 Public Disclosure Copy Page 10 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) PHINDIRITBL  Least-cost methodology for calculation of renewable energy procurement reflecting System Marginal Cost developed. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Least-cost methodology for calculation of renewable energy Value None Achieved Achieved procurement reflecting System Marginal Cost developed. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments This activity was completed using ESMAP funds. PHINDIRITBL  Planning and dispatch model installed and used in CFE to incorporate intermittent sources. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Installed and Value None Partially achieved Partially achieved used Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments CFE implemented dispatch tools to incorporate renewables. In July 2013, a World Bank expert delivered a workshop on integrating renewables into the grid to top technical officials from CFE, SENER and CRE. PHINDIRITBL  Strategic Environmental Assessment is developed and accepted as basis permitting scale-up of wind energy in Oaxaca region. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Strategic Environmental Value None Achieved Achieved Assessment completed and disseminated Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments SESA has been completed. The final report has been submitted to SENER and translation to the Zapoteco dialect is in progress. SENER submitted the final report to the Bank on March 6, 2015. SENER is still negotiating to SEMARNAT to decide whether SESA could be used as a basis for permitting scale-up of wind energy in Oaxaca region. 4/29/2016 Public Disclosure Copy Page 11 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) PHINDIRITBL  Publishing of new intermittent energy connection contract by CRE including RE capacity recognition. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target New intermittent energy connection contract Value None Achieved Achieved including RE capacity recognition is published by CRE. Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments - In July 2011, CRE released a resolution with a methodology to determine such capacity contribution. The technical work benefited from the support of Die Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) - In May 2012, CRE published the General Rules for permit holders (using renewable energy) to be granted the interconnection to the National Grid (Reglas Generales de Interconexión al Sistema Eléctrico Nacional para generadores o permisionarios con fuentes de energías renovables o cogeneración eficiente.) PHINDIRITBL  Strengthening of SENER IPU business development services addressing marketing, permitting issues, financing, facilitation, and business advisory services to sponsors of renewable energy projects (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target UPI's business development Value None Partially achieved Partially achieved services judged adequate Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments The one stop shop design (TA activity) has been concluded and all four deliverables have been accepted by SENER (contract with INFOTEC was signed on June 16, 2014). The actual implementation of the one stop shop (also a TA activity) is in progress (the Bank granted its no objection to the technical evaluation on December 9, 2015, and deliverables are expected before the closing date). 4/29/2016 Public Disclosure Copy Page 12 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) PHINDIRITBL  Institutional capacity sufficient to issue and manage tenders for additional wind farms/other RE resources. (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Assessed as Value None Achieved Achieved adequate Date 18-Apr-2007 09-Dec-2015 24-Apr-2016 30-Apr-2016 Comments Capacity is in place. Development of wind farms has been very strong over the past few years (2700 MW installed capacity across the country by the end of 2015) Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P077717 TF-56781 Effective USD 25.00 25.00 0.00 23.26 1.74 93% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P077717 TF-56781 Effective 05-Oct-2006 05-Oct-2006 18-Apr-2007 30-Jun-2014 30-Apr-2016 Cumulative Disbursements 4/29/2016 Public Disclosure Copy Page 13 of 14 Public Disclosure Copy The World Bank Implementation Status & Results Report Large-scale Renewable Energy Development Project (Phase 1 = $25M; Phase 2 = $45M) (P077717) Restructuring History Level Approved on 18-Jun-2013 ,Level 2 Approved on 12-May-2014 ,Level 2 Approved on 21-Mar-2015 Related Project(s) There are no related projects. 4/29/2016 Public Disclosure Copy Page 14 of 14