Documentof The World Bank FOR OFFICIAL USE ONLY ReportNo: 43333-TJ EMERGENCYPROJECTPAPER ON A PROPOSEDGRANT INTHEAMOUNT OF SDR 4.0MILLION (US$6.5 MILLION EQUIVALENT) TO THE REPUBLICOF TAJIKISTAN FOR AN ENERGY EMERGENCYRECOVERY ASSISTANCE PROJECT April 18,2008 SustainableDevelopmentDepartmentand Central Asia Country Unit Europe and CentralAsia Region This document has a restricteddistribution and may be used by recipientsonly inthe performance of their official duties. Its contents may not otherwisebe disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective April 1,2008) Currency Unit = Somoni US$1 = 3.43 Somonis 1 Somoni = US$O.29 FISCAL YEAR January 1 - December31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy DCHP DushanbeCombined Heat and Power Plant EEMAP Energy Emergency Management Action Plan ELRP Energy Loss Reduction Project EMP Environmental ManagementPlan GBAO Gorno-BadakhshanAutonomous Oblast GDP Gross Domestic Product GoRT Government of the Republic of Tajikistan GWh Gigawatt-hours (1 million kilowatt-hours) HPP Hydro-power plant HOB Heat-only boiler IDA International Development Association IF1 International Financial Institution IFR InterimFinancial Report IMG IndependentMonitoring Group LS RFO Low-Sulfur Residual Fuel Oil MoF Ministry of Finance M W Megawatts (one million Watts) NBT NationalBank of Tajikistan PIU Project Implementation Unit PFMMP Public Finance Management Modernization Project SCADA System Control and Data Acquisition TALC0 Tajik Aluminum Company (formerly TADAZ) UK UnitedKingdom UNOCHA UnitedNations Office for Coordination of HumanitarianAffairs UnitedNations Development Programme us UNDP UnitedStates Vice President: Shigeo Katsu Country Director: Annette Dixon Sector Director Peter D.Thomson Sector Manager: Charles Feinstein Task Team Leader: Raghuveer SharmdSodiq Haitov This document has a restricteddistributionand may be used by recipientsonly inthe performanceoftheir official duties. Its contents may not otherwisebe disclosedwithout World Bank authorization. Table of Contents A. Introduction ................................................................................................................ 1 Recovery Strategy................................................................................................................ B. Emergency Challenge: Country and Regional Context, Emergency Responseand 2 C. ProposedEnergy Emergency Recovery Assistance Project....................................... 7 D. Appraisal o f Project Activities ................................................................................. 12 E. Implementation Arrangements ................................................................................. 18 F. Project Risks and MitigatingMeasures.................................................................... 18 G. Terms and Conditions for Project Financing ............................................................ 19 Annexes Annex 1: Energy Emergency Mitigation Action Plan of Government of Tajikistan ........20 Annex 2: Detailed Description of Project Components.................................................... Annex 3: Summary o f Estimated Project Costs ................................................................ 27 29 Annex 4: Procurement Arrangements ............................................................................... Annex 5: Disbursementand Financial Management......................................................... 31 37 Annex 7: Results Framework and Monitoring.................................................................. Annex 6: Implementation and MonitoringArrangements ................................................ 41 43 Annex 8: Project Preparationand Appraisal Team Members........................................... 46 Annex 10: Country At A Glance....................................................................................... 48 Annex 9: Statement of Loans and Credits ......................................................................... 47 Map 33493 FOR OFFICIAL USEONLY This document has a restricted distribution and may be used by recipients only in the performance o f their official duties. Its contents may not be otherwise disclosed without World Bank authorization. Date: April 17,2008 Team Leader: Raghuveer Y SharmdSodiq Country Director: Annette Dixon Haitov Sector Managermirector: Sectors: General Energy Sector Charles Feinsteifleter Thomson Themes: Lending instrument: Emergency Recovery Loan IEnvironmental screening category: B Project ID(s): P110555 Project ID(s): P110555 Total Amount: US$ 6.5 million equivalent Proposedterms: 100percent grant basis Expectedimplementation period: February 15 2008 -June 2010 Expected effectiveness date: M a y 15, 2008 Expectedrevisedclosing date: December 31, 2010 Borrower: Tajilustan Responsible agency: Ministry o f Finance Source Local Foreign Total Borrower Total IDA US$ 6.5 US$6.5 Others (donors/co-financiers) Total US$6.5 US$ 6.5 2007 2008 2009 2010 2011 2012 Total IDA 2.5 4.0 Trust Funds Does the emergency operationrequire any exceptions from Bank policies? Yes [XI [I No (OP4.O 1) Yes[x] N o [ ] Have these been approved by Bank management? Are there any critical risksrated "substantial" or "high"? Yes [XIN o [ ] What safeguardpolicies are triggered, ifany? Environmental Assessment (OP4.O 1) A. Introduction 1.1 This Project Paper seeks the approval of the Executive Directors to provide a grant in an amount of SDR 4.0 (US$6.5 million equivalent) to the Republic of Tajikistan for the Energy Emergency Recovery Assistance Project. 1.2 Dueto the unprecedentedcold weather, shortage of water, and insufficientelectricity and gas supply, Tajikistan i s facing a severe energy deficit with serious socio-economic consequences. The proposed Energy Emergency Recovery Assistance Project responds to the urgent request made by the Government of Tajikistan to support implementation of the Government's Energy Emergency Mitigation Action Plan (EEMAP) and improve energy security inthe country (Annex 1). The objectives ofthe EEMAP include: (i)sustaining thermal and heat energy supply in the shortest possible timeframe; (ii)initiating preparatory actions for the next two winters when the energy situation is likely to remain in deficit; and (iii) identifying actions to be implemented over the medium- and long-term to improve the energy security of the country. 1.3 The proposed Project will contribute to the implementation of the EEMAP, and the rehabilitation of the electricity, gas and heat systems. An outcome will be improved reliability and access to energy sources inthe coming winters. Eligibility for Processingunder OP/BP 8.0 1.4 The harshest winter Tajikistan has seen in decades (including temperatures that have dropped as low as -25 degrees Celsius) has prompted an energy crisis; and the humanitarian conditions are dire. The country is suffering from food insecurity, power shortages, and damage to agricultural assets and water systems in Tajikistan, according to the UN Office for the Coordination of Humanitarian Affairs (OCHA). The proposed Energy Emergency Recovery Assistance Project is being processed under OP/BP 8.0 because it provides rapid response in support of: (i)restoring physical assets (BP 8.0 4 a); (ii) restoring essential services (BP 8.0 4 c); and (iii)supporting measuresto mitigate or avert the potential effects of imminent emergencies or future emergencies or crises incountries at high risk (BP 8.0 4 g). 1.5 This operation responds to an urgent request from the Government to provide technical and policy advice, as well as financial resources, to manage the energy crisis. The Bank team arrived within days of this request to provide support to Government inidentifyingpriority needs (articulated in the EEMAP approved by the Prime Minister on February 9, 2008). The use of streamlined procedures under OP/BP8.0 has helped ensure timely financial resources in direct support of the EEMAP. Also inline with the guiding principlesof BP 8.00, the Bank is working closely with other donors, includingthe UNinthe context of the Flash Appeal. 1.6 The Government requested that the operation be financed from a re-allocation of uncommitted IDA-14 funds, i.e., postponing one operation to the next fiscal year. The team also considered restructuring the existing portfolio, and discussed this option with the Government. The speed and simplicity with which the emergency operation could be prepared under OP 8.00 was a deciding factor, as restructuring individual operations would have proven complex and 1 would have had implications for achieving the development objectives of the portfolio and World Bank program ingeneral. Consistencywith Country Strategy (CAS or ISN) 1.7 The proposed operation is consistent with the 2004 Country Partnership Strategy for Tajikistan, and addresses one of the three strategic objectives of the CPS, namely to improve delivery of energy services and exploit the country's hydropower potential. B. Energy EmergencyChallenge 2.1 Country Context. Tajikistan is a land-locked country with 7.0 million inhabitants. With a per capita GDP of US$402, it is the poorest country in Central Asia. Shortly after independencethe country descended into a five-year civil war that brought widespread physical damage and heavy human losses. Peace and stability were achieved in 1997, followed by macroeconomic and political stabilization supported through extensive collaboration between the Government andthe donor community. 2.2 The electricity sector in Tajikistan accounts for about 5 percent of GDP, and electricity is the most important input for the two most exported commodities - aluminum and cotton. Tajikistan's power generation is in the order of 46 GWh per day, with peak production in the summer (average 52 GWh per day) which drops down to 38 GWWday inthe Jan-Mar (low water flow period). The hydroelectric plant at Nurek dam accounts for some three-quarters of total power generation, but given the cascading structure of the Vaksh river-based hydroelectric power installations, the water level of Nurek influences de facto more than 90 percent of the country's power generation. A rather dilapidated thermal plant in Dushanbe accounts for the remainder but operates on a shoestring by cannibalizing parts from a second old plant at Yavan. As regards consumption, TALCO, the aluminum smelter, consumes up to 43 percent of total supplies; and households about 28 percent. 2.3 Genesis of the current emergency.Since January 2008 extreme winter weather (one of the harshest in 40 years) and related energy emergency caused a humanitarian crisis in Tajikistan. The energy shortage prompted the Government to ration electricity, water and gas supplies. Food insecurity is affecting more than 550,000 people, of whom at least 260,000 need immediate assistance. Most of the country had no regular power supplied outside Dushanbe, with only about 1-3 hours of supply per day. Power cuts and cold weather contributed to the deaths o f several newborn babies in hospitals. The situation has had a dramatic impact on the living conditions of the population and resulted in significant economic costs for the country. 2.4 Economic growth has slowed sharply as a result of the frigid temperatures and related energy shortage. Industrial production gains were particularly hard hit by the weather and energy problems, with output falling 16.1 percent year on year. Power had to be diverted from industrial production to the population. Without the proposed emergency assistance, the conditions could deteriorate, and worsen during the coming winters. 2 2.5 The Nurek reservoir has seen a dramatic drop inits water levels, and, as of end-February 2008, the water reached the dead zone level (the critical level that maintains a sufficient head to runthe turbines), and the HPP is gravely exposedto the risk of shutdown at any time now. The sources of energy were insufficient to meet the winter demand, and due to bad weather conditions inthe region, the neighbors were unable to increase electricity exports to Tajikistan to the levels neededduring muchof January and February 2008. Severe shortagesof gas developed because of supply cuts from Uzbekistan, the supplier of 97 percent of Tajikistan's gas, which had been in turn triggered due to Tajikistan's accumulated payment arrears and supply shortages in Uzbekistan itself. Shutting down the power supply to TALCO in order to assure some increase in supplies to the population would in turn lead to losses per month in the order of 0.5 to 0.7 percent of GDP. A cessation of Nurek operations would put the entire country (with the exception of GBAO, where Pamir Energy Company owns and operates the energy system) into a black-out situation, with consequent impacts in water supply systems which are dependent on electricity. As expected the electricity supply was restored in mid-April when the spring thaw refills the reservoir to sufficient levels to resume reservoir-mode generation. Recovery Strategy 2.6 Government Response. The Government of the Republic of Tajikistan (GoRT) recognized the emergency and acted swiftly to formulate an Energy Emergency Mitigation Action Plan (EEMAP) for addressing the crisis (Annex 1). The Bank and UNDP (on the energy sector and humanitarian aspects respectively) have provided assistance inthe formulation of this EEMAP). The Action Plan insummary calls for: Limiting the water withdrawals at Nurek reservoir. With the levels at the time standing at or slightly below the dead zone, this action was crucial. Combined with the inflows of about 100-150 m3/secthese measures helpedkept the Nurek reservoir from reaching the dead zone level until March 1, 2008, when the water inflows improved and demand on the system decreased with improved weather. In complement to reduced water releases from Nurek, additional actions are to: (a) increase thermal capacity and reduce heating load on electricity; (b) increase gas imports; (c) electricity imports; (d) purchase of fuel oil for use when gas supply decreases (and for some heat generation in heat only boilers); and (e) purchase electricity and gas grid equipment; and Manage the consumption in a responsible way - the priority was given to population, social infrastructure and TALCO (Aluminum smelter) inthat order. These actions were introduced urgently in mid-February with the technical advice of the Bank, and resulted in some slight improvements in management of the severely reduced supply of energy. 2.7 The EEMAP also included measuresthat would help with the management of the energy supply during the winters on 2008/09 and 2009/10. These comprise: 3 Learning from the current experience, the preparations for next winter include: o Control and management of the Nurek reservoir releases from October 1, 2008 (after the end of the vegetation period). o Ensuring there are no impediments to import of gas or electricity (especially arrears for past supplies) from neighbors and having enough cash working capital in Barki Tajik and Tajik Gas to be able to pay some amounts inadvance for imports; o Having an inventory of at least 30,000 tons of LS RFO by October 1, 2008 and keeping this inventory level up through the winter. In addition, preparatory works will be initiated in the coming weeks to understand the feasibility of rehabilitating as many o f the Heat Only Boilers (HOBS) as possible and identifying the costs of suchrehabilitation. 2.8 Medium and long term measures for increasing energy security as well as reducing deficits overall, even during winter times. These comprise, at the moment, mainly studies and assessments, which would also identify the financing plansfor these measures. Medium Term A project to realize the rehabilitation of the hydro generator units at Nurek. These unitshave beeninoperation for more than 35 years, and are physically worn out, due to lack of maintenance, in turn due to lack of resources. Rehabilitation with newer technology including control system will boost the production by 5-15 percent, in addition to increasing reliability to very high levels. A project to realize the recent agreement between Turkmenistan and Tajikistan to import gas from Turkmenistan via Afghanistan. Rehabilitation of the gas trunk and distribution pipelines-to reduce the unaccounted- for gas which is currently very high at 19 percent (against 1 percent in a well maintained system). Installation of a SCADA system for the transmission grid and establishing Tajikistan's own modern Load Dispatch Center. Realization of a program on alternative energy, including small hydro; and Realization of a program of exploration and production of hydrocarbons, especially gas, inthe country. Long Term Expand generation capacities inTajikistan: o Accelerate work onthe realizationof the RogunHydroelectric project (3600 MW) upstreamofNurek; o Accelerate work on a 1500MW coal-firedthermal power project. These long term large projects would export 2/3 of their production (which will enable them to justify the projects) and have the remaining 1/3 to supply to the domestic system. These projects will be structuredas Public Private Partnerships with substantialprivate sector participation. 4 Accelerate Energy reforms 2.9 In addition, the Government has undertaken to accelerate the energy reforms which are underway to: (a) improve billing and collection; (b) enhance energy efficiency; (c) increase transparency and strengthen corporate governance in the energy entities; (d) adjust pricing and concomitant social protection; and (e) strengthen private sector participation. 2.10 GoRT has begun implementation of the EEMAP, including appealing to neighboring countries to help imports o f electricity, gas and fuel oil, and paying o f f debts to allow more natural gas imports. The Government has also reduced the supply o f electricity for industrial and commercial use. The EEMAP identifies further needs, for which GoRT has appealed to the donor community including the World Bank as assistance. Costs of Implementingthe GovernmentEEMAP 2.1 1 The estimated costs o f the implementing the immediate measures o f EEMAP are summarized in Table 1 below. Essentially the costs involve equipment, materials and services to increase the supplies o f gas and LSRFO, and improve the reliability o f the electricity and gas networks. Table 1: EstimatedCosts (US$ million) 1Settlement o f Arrears (Gas) I 4.0 1 Equipment and Materials for Tajik Gas 1.o EauiDment and Materials for BarkiTaiik 6.0 L o w Sulfur Residual FuelOil 10.0 Total 21.0 Proposed Financingfor the EEMAP 2.12 The proposed financing plan for the EEMAP i s summarized in Table 2 below. Tajikistan's own resources - Barki Tajik and Tajik Gas cash flows and assistance from the budget would account for half o f the needs and the other half i s expected from the Bank, other international financial organizations, and donors. TaiikGas Own Sources 2.0 1Barki Tajik Own Sources 3.0 Ministryof Finance 5.0 ~ World Bank 6.5 Other IFIs and Donors 4.5 1Total j 21.0 1 2.13 ADB recently confirmed it could provide US$2.0 million, primarily for electricity equipment (through reallocation of funds from on-going projects). In addition, UNDP has proposed to help with purchase o f about 5,000 tons o f LSRFO (US$1.8 million) as part of the 5 Flash Appeal (see below). Discussions are underway with other donors/financiers. Government's efforts of appealing to other countries in the region have also yielded some results (e.g., Azerbaijan). 2.14 Overall Donor Community Response to the Energy Crises. The donor community has responded through the United Nations Flash Appeal for some US$25 million, which i s currently being implemented. It covers supplies for humanitarian needs (water supply, food supply, health, etc) and includesthe purchaseof fuel oil for Dushanbe CHP. 2.15 The neighboring countries of Azerbaijan, Russia, Kazakhstan, Turkmenistan and Iranare also sending their humanitarian aid and other governments such as the US Government, UK Government, Government of Japan, Government of Netherlands, and the Governments of Saudi Arabia, UAE and Qatar have already mobilized funding to help the Government of Tajikistan tackle this crisis. The Government of the Swiss Federation is also offering assistance for the implementation of the EEMAP. Rationale for Proposed BankEmergencyProject 2.16 The Government requestedBank support to help them manage the energy crisis-and the Bank's response was immediate. An energy team arrived within days of the Government's request and assisted the Government in preparing a structured emergency response, i.e. the EEMAP. The Bank was naturally placed to take the lead due to the extensive dialogue with Government inthe energy sector and ability to provide a donor coordination role. 2.17 The Bank and Government agreed to defer one investment project to FY09 to free IDA resources in FY08 to finance the most urgent priorities in the EEMAP. It was agreed with Government that the proposed Energy Emergency Recovery Assistance Project will respond to the following subset of emergency-related challenges: (a) increase supply of Low Sulfur Residual Fuel Oil (LSRFO); (b) provide equipment to operate the electricity and gas grids as reliably as possible. 2.18 As part of its ongoing program with the Government in the energy sector the Bank will continue to provide technical and policy advice as needed, including to help manage priority needs and support Government reforms efforts to implementmedium-and long-term measuresto avoid similar crises in the future. In this context, the Bank will provide technical and advisory assistance for the overall implementation of EEMAP. 2.19 A PPF request for US$3.0 million was approved and is being usedfor purchaseof power cables, low sulfur residual fuel oil, and a natural gas odorizing system as well as special vehicles, instruments and materials to attend to gas supply emergency events. An additional US$2.5 would be eligible for retroactive financing of power and gas grid equipment and materials, special vehicles, mobile laboratory for gas pipe testing as well as equipment and materials for rehabilitation of two heat-only boilers and heat supply system to switch them into coal use in select settlements. 6 C. The proposed Energy EmergencyRecovery Assistance Project ProjectDevelopmentObjective 3.1 The development objective of the Project is urgently to increasethe volume and reliability of the national energy supply, especially inthe winter season, by supporting the implementation of the Recipient's Energy Emergency Mitigation Action Plan (EEMAP). 3.2 These objectives will be realized through: increasing, to the extent possible, thermal and heat energy supply from existing assets in the shortest possible timeframe and initiating institutional and technical measures to increase the amount and reliability of energy supplied to the population during the next two winter seasons. The Bank will also continue to provide technical and policy advice as needed, includingto help the Government manage priority needs to enable better reservoir managementat Nurek reservoir to avoid similar crises inthe future. ProjectDescription 3.3 Detailed description of the Project i s given inAnnex 2. Insummary, the Project consists of the following parts: Part A. Rehabilitation of the Electricity, Gas and Heat Systems 1. Installation of an odorizing system to detect gas leaks inthe gas network; 2. Rehabilitation of the gas transmission system; 3. Rehabilitation of the electrical transmission system; 4. Provision of low sulfur residual fuel oil to the Dushanbe combined heat and power plant; 5. Rehabilitation of heat-supply systems inKhujand city at the Northern Tajikistan; and 6. Restoration of coal-based heat-supply systems at selected settlements o f the Southern Tajikistan. Part B.Proiect Management and Capacity-Building and Support Implementationof EEMAP 1. Strengthening the Recipient's capacity for project management, monitoring and evaluation, including environmental management and safety, procurement, disbursement and financial managementactivities. 2. Support implementation of medium-term actions under the EEMAP for electricity and gas systems. 7 ProjectCosts and Financing 3.4 The Bank i s supporting the implementation of the EEMAP, but financing discrete elements of the EEMAP. The costs of the Bank financed portion - the Project - amounts to US$6.5 million equivalent. Details of the items and their costs are provided in Annex 3. Accordingly the Bank would finance the entire costs of the Project. Procurement 3.5 Procurement of the goods, works and services required for the carrying out of the Activities to be financed out of the proceeds of the Bank financing shall be governed by the provisions of the Procurement Plan (Annex 4), approved by the Bank. This procurement plan shall cover the entire period of implementation of the proposed Project and shall be updated quarterly or as needed ina manner acceptableto the World Bank. Such updateswill be provided to the World Bank on a timely basis for approval before execution. 3.6 The primary method of procurement proposed is Shopping for Bank-funded activities on a post review basis except for a few packages of urgent equipmenumaterial that the Energy Entities had already initiated procurement actions that would be subject to prior review (on a retroactive basis) at the request of the GoRT. GoRT and its entities and agencies shall ensure that all imported goods to be financed out of the proceeds of the Bank financing shall be insured against hazards (including theft) incident to the acquisition, transportation and delivery thereof to the place of use or installation, and that any indemnity for such insurance is payable in a freely usable currency to replace or repair such goods. GoRT and its entities and agencies shall ensure that any facilities relevant to the Activities are at all times operated and maintained inaccordance with appropriate practices and that any repairs or renewals of such facilities are promptly made as needed. Disbursementsand FinancialManagement 3.7 Details of the Disbursement and Financial Management Arrangements are provided in Annex 5 and summarized below. 3.8 Disbursement. The expenditures for the following Categories of items is proposedto be financed out of the proceeds of the proposed Grant and shall be used exclusively inthe carrying out of the Components of the proposedProject: 8 Category Amount of the Financing Percentageof Expenditures Allocated (expressed in SDR) to be Financed (1) Goods and works for Part A and Part B of the Project, except for Part 43 1,000 100% A.4 (2) Goods for Part A.4 of the Project 923,000 100% (3) Consultant Services and Training under Part B of the Project 492,000 100% (4) Refundo f Project Preparation Amount payable pursuant to Advance 1,846,000 Section 2.07 of the General I Conditions (5) Unallocated I 308,000 I I TOTAL AMOUNT 4,000.000 3.9 Retroactive financing would be limited to 40 percent o f the proposed financing amount to meet eligible expenditures (Le,, procured according to Bank Guidelines) incurred 30 days prior to the date o f the financing (PPF advance). The retroactive financing would cover only those eligible expenditures incurred by the Recipient. This flexibility was provided to enable carrying out activities in a timely manner. The balance remaining will be accounted for in the same manner after effectiveness o f the loan. 3.10 To facilitate the carrying out o f the proposed Project, the MoF will open and maintain a Designated Account in Dollars in National Bank o f Tajikistan (NBT) and project account in Central Treasury o f the MoF in Tajik Somoni on terms and conditions satisfactory to the Bank. Deposits into, and payments out of, the Designated Account and projects account shall be made inaccordance with the Disbursementletter and Bank disbursement guidelines. 3.11 Financial Management. The responsibility for the proposed project financial management arrangements will rest with PFMMP PHRD grant PIU (PIU) within the MoF. The PIU has been implementing the PHRD grant since March 2007 and its staff has reasonable experience inimplementing Bank financed projects. 3.12 Financial management arrangements o f the PIU were assessed in January 2008 and they have beenfound to be satisfactory to the Bank for this emergency project operation. 0 PIU financial management specialist will be responsible for maintaining project bank accounts to be opened with NBT and Central Treasury. Internal procedures o f the Central Treasury and NBT will apply to project bank accounts. 9 0 PIU FM specialist will maintain project accounting records in excel-based spreadsheets. Project accounts will be reviewed and reconciled to source documents by PIU Coordinator once a month to mitigate the risks associatedwith manual accounting record keeping. 0 The PIU will submit to the Bank quarterly interim un-audited financial reports (IFRs) of the project ina format and content acceptableto the Bank within 45 days from the end of the relevant quarter. 0 The annual audited financial statements of the project will be submitted to the IDA within six months after end of each calendar year, and also at the closing of the project. 3.13 The overall financial management risk of the proposed emergency project is substantial before mitigation measures and moderate after mitigation measures agreed with the Recipient. More detailed F M and disbursementarrangementsare provided inAnnex 4. 3.14 The Bank has assessed Barki Tajik and Tajik Gas (the Energy Entities) ineligible to implement Projects as a result of overdue audit reports (especially in Tajik Gas) and weak financial management capabilities. The project management responsibilities could be transferred to Barki Tajik and Tajik Gas. when (a) the overdue audit reports are submitted and are found acceptable to IDA; and (b) Barki Tajik and Tajik Gas have acceptable financial management arrangementsto the Bank. ExpectedOutcomes of the Project 3.15 The Results Framework and Monitoring details are provided inAnnex 6 and summarized below. The LSRFO will provide back-up reserves (contingency plan) for the thermal power generationcapacity inthe country inthe case gas supplies are greatly reduced. o Indicators: LSRFO tank-trucks are delivered to warehouses and stored safely. An additional indicator is the amount of power generated incase it is necessaryto use this back-up reserve. Greater access to electricity for the population, mainly in the city of Dushanbe, through rehabilitation of the power distribution grid. o Indicator: Number of breakdowns decreases and access of population (approx. 9,000 people) improved in terms of quantity and quality of supply. (Note. The Bank's investment only covers a fraction of the rehabilitation cost in Dushanbe city network. It will be hard to measure this outcome as a function of the Bank's investment alone. Ifthe grid equipment is purchasedand installed at the technical specifications defined by the project documents, this will contribute to overall improvements inthe electricity distribution network of Dushanbe city. The utility company, BarkiTajik, and other donors/IFIs will also be purchasing equipment to improve the power grid.) 10 Improvements in the gas distribution network in areas o f the country where gas is supplied; and improvements insafety o f gas supply andleak detection. o Indicator: Reduced number o f gas leaks and no fatalities as a result o f gas usage during the next two winters. Reduction in gas losses measured through energy , balance sheet. Improvements in mobility o f Tajik Gas personnel and ability to respond to emergency events. o Indicator: Increase in response rates to emergency events by Tajik Gas personnel. Residents, schools and hospitals in Khujand have access to heat; this will also improve access to social services. o Indicator: 30 buildings in Khujand (including residences, hospitals and schools) receive heating 24 hours a day throughout the winter, mainly commencing winter season of 2008/09. 3.16 The Bank's policy and technical advice to the Government for the overall implementation o f the EEMAP will help Government manage risks and avoid crisis situations. It i s important to recognize that energy shortages would continue to exist untilcertain medium term and long term measures (detailed in Section B) are implemented. 11 D. Appraisalof ProjectActivities 4.1 A summary o f the economic, financial, technical, institutional, fiduciary, environmental, and social aspects o f proposed project activities are provided inthis section. TechnicalAspects 4.2 The electricity supply in Tajikistan is predominantly - 99 percent - hydro based, reflecting the resource base, as shown in Table 3. The Nurek Baipaza cascade on the Vaksh contributes 90 percent o f the hydro production, thus making it the most critical asset in Tajikistan's economy. Tajikistan i s a net electricity importer, with Uzbekistan the main supplier, but there are seasonal exchanges with Kyrgyz Republic as well. In terms o f consumption, the Aluminum Smelter TALC0 is dominant, accounting for 45 percent of the consumption, which actually i s an increase from about 40 percent in 2003, reflecting increase in aluminum production. The next largest consumer category is residential consumption, accounting for about 25 percent o f the overall consumption. Irrigation pumpingaccounts for about 12 percent of the overall consumption, reflecting the soviet era pattern o f usingelectricity to lift water to large heights, sometimes as highas 100 Minthe Sogd region. 4.3 In the natural gas subsector, supplies are dominated by imports - 98 percent, from Uzbekistan. In addition to unreliable supplies over the last few years, Uzbekistan has increased 12 prices to US$145/1000 m3from 2008 onwards (a 50 percent increase on top o f a 100 percent increase in 2007). Residential consumption in 2007 accounted for 14 percent and the remainder by industrial and commercial consumers. Losses amounted to 15.4 percent in2007 -while this is an improvement over the 25 percent level in 2005 (in part due to the reduction in commercial losses due to metering), the overall level i s extremely high compared to international norms (which are in the 1 percent range). Much o f the losses are in the trunk and distribution pipeline systems. 4.4 Tajikistan faces several critical issues in its energy sector: Despite an extensive energy infrastructure, the country experiences shortages o f supply, especially in the winter. No new generation capacity has been added (except for 14 MW in the Pamir system) since independence, and as a consequence, due to increasing demand (itself a consequence o f sustained economic growth), these shortages are exacerbated. 0 There is overdependence on the electricity system, in part due to the way the supply system exists, and in part due to the problems experienced with Uzbekistan (inability to transmit electricity from south to north, unreliable gas supply, inability to obtain electricity imports). Since the electricity system i s 99 percent hydro, this has resulted in overuse o f the waters in the Nurek reservoir, which occurred even in 2007 (on March 1, 2007, the water level in the reservoir was just 1 meter above the dead zone level). This has forced the authorities to impose drastic measures - shut down supplies to industries, curtail supply to residential users to 3 to 4 hours a day, etc. A third problem is one o f improving efficiency - as mentioned earlier, the level o f losses are quite high inboth the electricity and gas systems. Inaddition, there i s a need to bring institutional efficiency in the sector through reform o f corporate governance, and implementation o f modern management systems. A fourth issue is one o f financial viability resource mobilization. Significant level of investments are needed to meet the demand, but the current electricity tariffs are way below cost recovery levels, and the operating and capital costs are on the increase over the last 12 months. For example gas prices have doubled in 2007, and capital costs of energy equipment have increased by about 50 percent over the last 24 months. Therefore the proposed emergency assistance will only have a limited impact on the medium to long term energy supply security. Nevertheless, the items to be financed and installed have been chosen with the highest social and economic impact (e.g., the actually damaged transformers and cables that were feeding the most number o f people such as multi-dwellingapartment blocks) and feeders on which social objects (hospitals and schools) are located. Moreover, the items chosen, due to its long operational life, will have a beneficial impact over the long term (over the next 20 years). 4.5 There i s an urgent needto address also the medium and long term measures, identified in the EEMAP, to really address the structural issues in the energy sector. The Government has agreed to take all necessary measures, including using additionally available funds from own sources and donors, as well as any savings from the financing o f the proposed immediate 13 measures under the proposed Grant to implement the medium term measures identified in the EEMAP. Environmentaland Social ScreeningFramework 4.6 The Environmental Category is B (Limited Assessment) for the proposed operation, as it would have limited impact on the environment. By ensuring that the energy system does not collapse, the proposed project would avoid environmental degradation (cutting forests and trees for energy needs). By ensuring adequate supply of gas would enable the use of cleanest of the fossil fuels for energy needs. There is the possibility of use of LS RFO, which would increasethe pollution, but the impacts are likely to be very small. 4.7 Under the Project, no significant civil works are planned, although there will be rehabilitation of gas pipelines, electrical power grid and heat-only boilers. The Project also includes restoration of a heat supply system based on coal fuel in a settlement (this is to be determined, but expected to be of limitedscale). Because no new installations are foreseen (only repairs of existing equipment), the main impacts will be temporary, localized and restricted to the sites o f existing energy infrastructure. 4.8 All civil and installation works will be limited to existing facilities and plant, thus land acquisition or involuntary resettlement will not be required. Emphasis will be put on construction waste management. For the case of the generation of potentially problematic waste types (e.g., condensed gas from pipelines, cables, PCB-containing transformers) clear instructions will be issued to separately and safely store suchwaste types until final disposal i s arranged. 4.9 Because construction works relate mainly to rehabilitationhepair and are expected to have limited environmental impacts, the EMP to be preparedunder the Project will focus only on occupational community health and safety measures. It is expected that this document will be prepared speedily so as not to delay disbursements under paragraph l(c) of Section IVB of Schedule 2 of the Financing Agreement. The EMP will also cover safe handling of fuel oil under component A.4 of the Project. However, as procurement of this oil is already under way as a result of the PPF, there i s no requirement for the EMP to be completed as a condition of disbursement. EconomicAspects 4.10 The economic loss due to the energy crisis is huge. No industries, other than TALCO, are being supplied with electricity, and gas supply is curtailed as well. Due to severe rationing in February 2008 (which continues in March 2008) businesses, especially small and medium enterprises are suffering leading to loss of incomes by daily and part-time labor. Government estimate is that the economy i s losing 0.6 to 0.7 of GDP per day during the crisis, due to curtailment of electricity supplies and concomitant reduction ineconomic activity. 4.11 The EEMAP has arrested the un-controlled deterioration in the energy system and enabled the economic agents to be aware of the facts and plans for energy supply controls. Second, the EEMAP and its announcement brought the key economic agents to work with the Government to identify complementary measures that can be taken by them. In particular, 14 TALC0 has contributed US$2.0 million towards gas and electricity imports in exchange for future supplies of electricity. Accordingly, the EEMAP has contributedto lessening somewhat the economic damage. FinancialAspects 4.12 The slow response to the emergency situation in the energy sector in part is due to the weak financial situation of the energy utilities, Barki Tajik and Tajik Gas. Such weaknesses are due to a combination of factors: (a) currently low tariffs, particularly in the electricity sector, below cost recovery levels; (b) high level of losses; and (c) weak financial management capabilities. 4.13 Accordingly, as a pre-condition for the on-going Energy Loss Reduction Project, GoRT adopted an Energy Sector Development Strategy comprising policy measures and investment priorities to address the key problems inthe sector. The policy measuresinclude implementation of a MediumTerm Tariff Policy covering both the electricity and gas sectors; a Social Protection Policy for Energy Services to improve the effectiveness of the scheme and ensure better targeting; and (c) and an Institutional Reform Policy for the energy sector to improve the transparency and efficiency of operations, enable electricity trade, and pave the way for (further) private sector participation inthe sector. 4.14 The policy measures are being implementedin earnest. As regards electricity tariffs, the target is to increase tariffs gradually to reach financial viability tariffs by 2010. Accordingly, after a 68 percent increase in electricity tariffs in 2007, an additional 25 percent increase was made inJanuary 2008, and plans are afoot to increasethem further during July. Inthe gas sector, tariffs have been adjusted periodically to counter the increasing gas import prices, and today stand at US$196/1000 cu. m (comparedto an import price of US$145/1000 m3). 4.15 However, the costs of the electricity business are increasing in part due to: power purchase costs from the newly constructed Sangtuda 1power plant; increase in electricity import prices; increase in gas prices; and debt service burden, among other things on the financing from Peoples Republic of China for major transmission lines. As a result, the financial viability level has increased to about US$O.O4/kWh (compared to the previous target of US$0.03/kWh). With these increases in costs, BarkiTajik has even less working capital for fuel purchases and no cash for capital expenditures. Accelerating the electricity tariff adjustment rate by making a substantial upward adjustment during the planned increase in July 2008 would help address this issue. 4.16 An additional problem that the two utilities have is in their financial management. Assistance is planned under the ELRP to address this and the measures include the implementationof a Financial Management Improvement Program (FMIP) in both the utilities. The FMIP would focus, in Barki Tajik and Tajik Gas, on: (a) Accounting Policies and Systems (Le., moving both the companies to International Financial Reporting Standards (IFRS); (b) Revenue and cash flow management; and (c) internal controls. The FMIP has been designed with help of consultants and it is necessary to accelerate the implementation of FMIP in Barki Tajik and Tajik Gas. 15 4.17 The Government's intentions and commitments to the longer-term development of the energy sector are set out inthe Action Plan. The Bank is also working with the Government to adopt a revision of the Energy Sector Development Strategy (which can be issuedas a revised Letter of Energy Sector Development Strategy, first adopted in March2005 which provides the basis for the on-going reforms, includingthose mentioned above). Social Aspects 4.18 The social impact assessment was prepared by UNDP, who are responsible for the Humanitarian assistancepart of the EEMAP. 4.19 The energy situation has significantly worsened the living conditions of the population over the past two months. The immediatemanifestations of crisis are: (a) severe and worsening electrical shortage, impacting heating and water supplies and mass-care facilities, particularly in urban areas, and (b) increasing food insecurity in rural areas. Further, preliminary indications are that the winter weather is likely to result in increased flooding and landslides during the spring melt, potentially disastrous conditions that will overlap and compound the food insecurity situation inrural areas. 4.20 The combination of underlying factors is causing an immediately live threatening situation as well as a foreseeable life threatening situation a few months from now. These immediate and expected threats to lives in Tajikistan require a mix of: (1) interventions that address the immediately life saving ones; and (2) interventions which need to be executed immediately to avert foreseeable and preventable live threatening situations a few months from now. 4.21 While some of the immediate manifestations of the energy crisis may resolve themselves once electrical supplies return to normal and temperatures return to normal, most impacts of the crisis will require a longer time to restore. The food security situation will last at least until the next harvest in mid summer (July). Livestock production constitutes a second leg for food security. The cold winter has heavily affected the stocks and threatening food security as well. Inaddition, preparedness measures such as pre-positioning of relief items for the predictable increase in floods and landslides need to be undertaken immediately to avoid delays inresponding to avoid foreseeable loss of lives and livelihoods. 4.22 The Flash Appeal covers a time frame of six months, making a distinction for as far as possible between immediate interventions for immediate needs and immediate interventions to avoid foreseeable live threatening situations during spring and early summer. 16 Sector Original Requirements (US$) COORDINATION AND PREPAREDNESS I,752,563 EDUCATION 701,000 EMERGENCY ENERGY SECTOR 1,800,000 FOOD SECURITY 13,281,547 HEALTH 2.694.470 NON-FOOD ITEMS AND SHELTER 2,065,25I SANITATION AND HYGIENE 2,898,008 GRANDTOTAL 25192,839 LessonsLearned 4.23 The Bank has accumulated substantial regional and global experience in supporting recovery from emergencies and disasters. InTajikistan itself, it has implementeda US$3 million Emergency Drought Assistance Project (CR 3240-1 TJ) in 2001, where critical farm inputs to meet the emergency needs to catch up with a narrow sowing season after the drought struck the country. At the general level, experience shows that recovery is essentially a development issue. Accordingly, a recovery program needs to consider the longer-term goals of reducing disaster vulnerability while fostering sustainable development. Operationally, this means that: The design of emergency recovery operation has been kept relatively simple and flexible, while also reflecting the development priorities. The recovery program from the energy emergency reflects the country's priorities, as outlined inthe PRSP. Implementation arrangements have been structured to be straightforward and responsive to the emergency recovery. The proposed operation provides a unique opportunity for the government to take the lead inthe recovery process, while also strengthening its capacity for implementing future projects and leading development efforts. It i s expected that this arrangement will facilitate the decision making process. To succeed, the government will count with the support of the Bank in particular and the donor community at large for technical and implementation support. The main challenge for this emergency recovery operation is implementation, which increases the need for close supervision. It should be mentioned that due to the weak capacity of energy utilities, the decision had been made to utilize existing fiduciary arrangements within the Ministry of Finance, which would also extend the technical assistance necessary to build the necessary capacity at the utilities. In addition, close management attention and adequate resources for supervision are required not only to ensure smooth implementation, but also timely provision of global knowledge and experience. 17 E. ImplementationArrangements 5.1 The Ministry of Finance (MoF) will implement the activities financed under the proposed Project. A PIU within the MoF (known as the technical support group) is currently implementing the PHRD Grant for the Preparation of the Public Finance Management Modernization Project (PFMMP) - TF 057774, and has been assessed by Bank's fiduciary specialists as having the capacity to manage the Project funds. The Ministry of Finance has signed a Protocol on implementation arrangements with the utility enterprises, where all the proposedarrangementswould be formally agreedupon(Annex 7). 5.2 Independent Monitoring and Reporting of the Energy Emergency Recovery Assistance Project. As part off the Bank's supervision efforts, An Independent Monitoring Group - a group of three or four local professionals with skills and knowledge in the energy, economics and finance and project management as well as monitoring and reporting - would be appointed by the Bank (financed with Bank budget) to provide daily monitoring reports to the Government, implementing agencies, donors and the Bank. This IMG would monitor the procurement and disbursement processes and decisions, as per the agreed Procurement and DisbursementPlan. Importantly, IMG would report on the performance of the energy sector on a daily basis as per an agreed format (See Annex 6). It is to be noted that IMG would on a periodic basis verify the physical deliveries and inventories of the equipment and material (e.g., Fuel Oil) procured under the Project. 5.3 To implement the broader EEMAP, the GoRT has established a Government Commission to monitor the situation on a daily basis and take appropriate steps (Attachment A to EEMAP in Annex 10). Decisions made by the Government Commission related to implementation of the tasks given to the Commission will be obligatory for implementation by all legal entities and individuals of the Republic of Tajikistan. In addition, an independent monitoring mechanism has been set up involving the Government commission and donor representatives. F. Project Risksand Mitigating Measures 6.1 The major risks in the emergency operation are associated delays in the delivery o f emergency materials and equipment. However, this risk is mitigated through the advance preparation fund agreement signed between the Bank and the Recipient. Additional risks are summarized below: 18 Risk Rating RiskMitigation Measures Delaysdue to procurement and other Moderate Procurementmethod is agreedto be simplest and implementationrelatedissues. the Bank's review is designed to be rapid.All contracts are post review. Poor accountabilityand results not High A specializedIndependentMonitoringGroup will achieved be set up with Bank funds to monitor the project activities on a daily basis. Unpredictabilityof energy imports due to Moderate Humanitarianassistanceshould continue and be energy constraints in neighboring ready in the case that the crisis deepens. countries Risks associatedwith fragile energy Moderate Immediatepurchaseof LS RFO is a mitigation supply balance measurethat would providefor aback-upsolution for DushanbeCHP. The risk of recurrenceofthe energy High Three measures:(1) Assist GoRT to implement emergency tariff and other sector-related reformsto strengthenthe finances; (2) improve and strengthenmacro-economic management (3) help GoRT to be innovativein terms of attracting commerciallyorientedfinancingfor new capacity development (e.g. coal-firedTPP, Rogun, etc.) Inadequate financial positionof Barki High Accelerationof FinancialManagement Tajik and TajikGas due to weak ImprovementProgram under the on-goingEnergy corporatemanagementresultingin higher Loss ReductionProjectto immediatelymigrate level of arrears which is affectingthe the utilities to IFRS/IAS-basedsystem. In fragility of energy supply balance parallel, continuedialogue with the GoRTon accelerationof energy reform program, including drastic tariff adjustments to bring the tariffs to viability levelsby 2010. G. Terms and Conditionsfor ProjectFinancing FinancingTerms 7.1 The Bank funds would be an IDA Grant to the Republic of Tajikistan. PolicyExceptions 7.2 An exemption under 4.01 was approved regarding the timing of the environmental assessment. 19 Annex 1 Tajikistan Energy Emergency RecoveryAssistance Project Government of Tajikistan's Energy Emergency Mitigation Action Plan APPROVED PRIME MINISTER REPUBLIC OF TAJIKISTAN A. G. Akilov 9 February, 2008 Action Plan to mitigateEmergency in Energy Sector of the Republic of Tajikistan Unprecedented cold weather, shortage of water, as well as insufficiency of electricity- and natural gas supply from neighboring countries have adversely affected the socio-and economic situation of the country. To address the situation, the Government of the Republic of Tajikistan undertook number of actions, which are directed on mitigation of the emergency situation. In particularly, we have been forced to impose very strict limits in the electricity supplies and water saving in the reservoirs; reduce electricity supply to TALCO; cut-off other industrial enterprises from electricity; and social objects have strictly limited electricity supply. Inaddition, measures have beentakento exempt electricity flows, gas supply, fuel oil neededfor thermal power plants, electricity generators and gas equipment from VAT and import duties. Despite the actions taken at present, continued unusual cold weather requires additional measures aimed at mitigation of consequences of emergency in energy sector, and the Government of Tajikistan intendsto implement these actions. To facilitate management of emergency situation the Government of Tajikistan has developed an Action Plan and establishedthe Government Commission to control over the situation on a daily basis and take the appropriate steps (Attachment A). The same Commissions will be established in GBAO, Sogd and Khatlon Regions of the country. Decisions made by the Government Commission related to implementation of the tasks given to the Commission will be obligatory for implementation by all legal entities and individuals of the Republic of Tajikistan. A monitoring mechanism will be set up involving the Government commission and donor representatives; and an Independent representative agreeable to the donors, appointed to constantly monitor the realization of the Action Plan. 20 To prevent complete water withdrawals from Nurek reservoir and maintain generating capacity of Vakhsh Cascade inthe nearest time generation of heat and electricity by thermal stations will be increased. All necessary measures will be taken to be ready to the next two winters when the energy situation is likely to remain in deficit will be implemented.Actions to be implemented over the medium and long term to improve the energy security of the country have been identified. In order to get additional finance the World Bank has beenproposed to reallocate the IDA-14 funds to finance the measuresunder the Action Plan. To improve the management of energy issues, the strict limits will be imposed on water withdrawals from Nurek reservoir to 20 cdday if the imports are minimum 16 GWWday; and withdraw no more than 25 cdday' under any circumstance, including when imports drop below the above targetedamount. The work is continued to encourageneighbors, especially Turkmenistan, Uzbekistan and Kyrgyz Republic to increase imports into Tajikistan. Turkmenistan is able to supply 10 GWWper day; and Uzbekistan and Kyrgyz republic lower amounts (given critical situations in these two countries). Measures will be taken to increase gas supply to the system and to the Dushanbe and Yavan thermal power plants. With adequate gas supply, Yavan could generate 40 MW; and Dushanbe CHP could generate 150 MW. With these levels of thermal generation, there would be a reduction inheating load on the electricity system of at least 75 M W (all of this inthe Dushanbe area). To increase gas supply the following measures will be taken: (a) settling old arrears (of about US$4.5 Million) to Uzbekistan; and (b) paying inadvance for the increased gas supply. Purchaseof low-sulfur Residual FuelOil (mazut) (LS RFO) of about 30,000 tons to provide back up in case of reduced gas supply (lower temperatures affects gas supply negatively); and to be able to fire up Heat-Only-Boilers (HOBS),particularly inDushanbewill be initiated. The procurement of transformers, cables and switchgear (Attachment B) to enable increasing reliability of supply of electricity inthe country have beeninitiated. To managing the demand during the remainder of this winter electricity supply will be ensuredto population, water supply systems and social facilities (such as hospitals and schools). IAt the levelof 3.99 meters (Feb 6, 2008) above the dead zone level of 857 meters above sea level (masl) a 25 cdday withdrawal limit would mean a supply of 14 GWh/dayof hydro-generation.Ignoringthe inflows, then this also meansthat these limits would keep Vaksh cascade operating for another 15 days. Ifthe inflow is an average of 100 cubic metersisec (cusecs), then the level would approximately increaseby 13.5 cdday (at the lower reaches of the reservoir).Inother words, there could enoughwater with these inflows to prolongVaksh cascade operation for another 7-8 days. 21 Inthe worst case scenario, where Nurek releases are limitedto 25cm/day, limited imports, limit supply to all industrial enterprises will be strictly imposed. After additional needs assessment to purchase generators and coal based heat-only-boilers for schools and hospitals and this is should be part of the Humanitarian assistance that is being coordinated by UNDP. Learning from the current experience, the next steps to be taken by the Government will be: o Control and management of the Nurek reservoir releases starting from October 1 (after the end of the Vegetation period). o Eliminate impediments to import of gas or electricity (especially arrears for past supplies) from neighbors and having enough cash working capital in OJSHC BarkiTajik and SUE TajikGasto be able to pay some amounts inadvance for imports; o Having in inventory at least 30,000 tons of LS RFO by October 1, and keep this inventory level up through the winter. In addition, preparatory works should be initiated in the coming weeks to understand the feasibility of rehabilitating as many of the HOBSas possible and identifying the costs of such rehabilitation. The overall costs of these emergency measures (mainly energy supply measures) need about US$20 million as follows: About US$5.0 million to: settle the gas arrears, pay some advance to UzTransGas;and for equipment and materials for operation of SUE TajikGas; About US$6.0 million by OJSHC Barki Tajik for the grid equipment needed; About US$9.0 million for the purchase of 30,000 tons of L S RFO (at $300/ton). As regards to financing, OJSHC BarkiTajik and SUE TajikGas would contribute at least US$5 million together from their respective cash flows; and the remainder would have to come from Tajik Government budget and donor community, which is the subject of next round of meetings with high levels of Government and donors. Inorder to makepaymentsagainst arrears and supply of gas, as well for procurement of fuel and lubricants, the Ministry of Finance is tasked to allocate from the budget of the Republic of Tajikistan a short-term loan for SUE Tajikgas and OJSHC Barki Tajik in the amount of USD 5 millions. As an alternative way of financing this, which had not beendiscussedover the phone, the GoRT may want to consider asking TALC0 to make an advance payment to OJSHC BarkiTajik against future consumption of electricity. This would enable BT to immediate purchasethe mazut inthe volume of 30,000 tonnes, which is, as it seems, the top priority inthe action plan Measures for increasing energy security over the medium and long term which will be implemented comprise mainly studies and assessments, and part of these studies will include identifying the financing plans for these measures. 22 Medium Term perspective comprises a project to realize the rehabilitation o f the hydro generator units at Nurek. These units have been inoperation for more than 35 years, physically worn out, due to lack o f maintenance, in turn due to lack o f resources. Rehabilitation with newer technology including control system will boost the production by 5 percent-15 percent; in addition to increasing reliability to very high levels. At the same time, a project to realize the recent agreement between Turkmenistan and Tajikistan to import gas from Turkmenistan via Afghanistan is planned. Gas trunk and distribution pipelines-to reduce the unaccounted for gas which i s currently very high at 19 percent (against 1 percent in a well maintained system) will be rehabilitated; SCADA system for the transmission grid will be installed and Tajikistan's own modern Load Dispatch Center will be established; the Program on alternative energy, including small hydro will be realized. Long term perspective comprises expansion o f generation capacities inTajikistan, inparticular, to accelerate work on the realization o f the Rogun Hydroelectric project and thermal power stations. These large projects would export 2/3rd o f their production and have the remaining part to supply to the domestic system. These projects will be structured as Public Private Partnerships with substantial private sector participation Speed up the reforms in energy sector which directed at (a) improvement o f system o f preparation o f bills, and collection; (b) improvement o f efficiency in energy-supply; (c) improvement o f transparency and strengthening of corporate management o f energy enterprises (the measures will be implementedunder the requirements of projects financed by domestic and international financial institutions, and under the cooperation of the Government o f Tajikistan with these international organizations); (d) bringing pricing system and social protection system in compliance with; (e) participation o f private sector will be the main directions o f Government's work inenergy sector. 23 Attachment A. Composition of the Government Commission to liquidate consequencesof emergency situation inenergy sector: 1 Bobozoda G.D Ministerof Economic Development and Trade (Chairman of the Commission) 2 Gul Sherali Ministerof Energy and Industry(Deputy Chairman of the Commission) 3 Norinov D.N. Deputy, Minister of Finance 4 Rasulov A. R. Deputy,Minister of Education 5 Rakhmonov S.B. Deputy,Ministerof Health 6 Sanginov E.N. Deputy,Minister of Labor and Social Protection 7 Samiev Sh. Kh. Chairman, "BarkiTojik" OJSHC 8 Mukhsitdinov F. Chairman, "TajikGaz" SUE 9 Bobokalonov R.B. Chairman, "Hojagii Manziliju Kommunali" SUE 10 Sulaimonov A.A. First Deputy Chairman, city of Dushanbe 11 A. Erov Head, Energy and Industry Department, Executive Office of President of RT (Secretary of the Commission) 24 Attachment B Equipmentand MaterialsSupply List for 2007-08 Winter EmergencyRestorationof Power Distribution-BarkiTojik PACKAGEA Description of Equipment Quantity Estimated cost Supplier Delivery required ($) by: 10104 kV distribution 140 1,540,000 KTZ-Kazakhstan & immediately transformers Electrosheet - Russia, T M 1000/10 UETM Electromash- T M 630110 Russia, 6104 kV distribution 40 910,000 KTZ-Kazakhstan & immediately transformers Electrosheet - Russia & T M 100016 UETM Electromash- T M 63016 Russia H V Power Cable & 8,000 m 760,000 HES Kablo -Turkey, immediately accessories Raychem-Germany, 10 kV 3x300 Alcatel, Pirelli- Italy 10 kV 3x240 L V Power Cable and 12,000 m 780,000 HES Kablo -Turkey, immediately Raychem - Germany I O kV Indoor Fused 120 150,000 Electrosheet - Russia, immediately Disconnect Switches Total 1 4,140,000 PACKAGEE Description of Equipment Quantity Estimated cost Supplier Delivery required ($) by: 0.4 kV 1500A Automatic 130 180,000 KTZ-Kazakhstan & Within four weeks circuit breakers Electrosheet - Russia, UETM Electromash- Russia, 0.4 kV 900 A Automatic 400 480.000 KTZ-Kazakhstan & Within four weeks circuit breakers Electrosheet - Russia, UETM Electromash- Russia, 0.4 kV 600 A Automatic 400 400.000 KTZ-Kazakhstan & Within four weeks circuit breakers Electrosheet - Russia, UETM Electromash- Russia, 4 110 kV three-phase, 4.0 kilometers 800,000 Electrosheet -Russia, ABB, Within four weeks 300 sq. mm Cable for Siemens underground installation and - accessories Total 1,860,000 Grand Total 25 Attachment C. List of equipment and materials required by the ministries and agencies o f the Republic of Tajikistan to liquidate consequences of natural disasters inTajikistan. I # Description of Number Estimatedcost Supplier Required deadline materials (thousand Somoni) for delivery 1 Coal 15.000tns 2521 immediately 2 Wood 20 000 cubic 2397 immediately meters 3 Generators Immediately I O Kwt 3450 pieces 24323 Immediately 20 kWt 70 pieces 308 immediately 60 kWt 10 pieces 167 4 Diesel fuel 340 tns 915 immediately 5 Coke 100tns 18 immediately 6 Heating oil/fuel oil 150 tns 158 immediately (mazut) 7 Warm clothe and 10500 p. 1024 immediately shoes for kids and (including 9200 - adults for kids)- 8 IIMedical II132 kits I3020 immediately equipment, medicines and materials considering the WHO standards 9 Wool blankets: immediately Adults kids 2640 pieces 93 860 pieces 15 Bed sheet immediately Adults 5300 pieces 93 kids 1700 pieces 30 1 1 Petrol AM-92 I75 tns 630 immediately 12 Cleaning liquid 13 tns 91 immediately 13 Disinfecting 6.5 tns 46 immediately solution 14 Economic losses 140217 immediately suffered by agriculture sector of the country TOTAL 176083 26 Annex 2 Tajikistan EnergyEmergencyRecovery Assistance Project DetailedProjectDescription ProjectDevelopmentObjective The development objective ofthe Project is urgently to increasethe volume andreliability of the national energy supply, especially inthe winter season, by supporting the implementation of the Recipient's Energy Emergency Mitigation Action Plan (EEMAP). These objectives will be realized through: increasing, to the extent possible, thermal and heat energy supply from existing assets in the shortest possible timeframe and initiating institutional and technical measures to increase the amount and reliability o f energy supplied to the population during the next two winter seasons. The Bank will also continue to provide technical and policy advice as needed, including to help the Government manage priority needs to enable better reservoir management at Nurek reservoir to avoid similar crises inthe future. ProjectDescription The Project consists of the following parts: Part A. Rehabilitation of the Electricity, Gas andHeat Systems 1. Installation of an odorizing systemto detect gas leaks inthe gas network; 2. Rehabilitation of the gas transmission system; 3. Rehabilitation of the electrical transmission system; 4. Provision of low sulfur residual fuel oil to the Dushanbe combined heat and power plant; 5. Rehabilitation of heat-supply systems inKhujand city at the Northern Tajikistan; and 6. Restoration of coal-based heat-supply systems at selected settlements of the Southern Tajikistan. Part B.Pro-iectManagement and Capacity-Building and Support Implementation of EEMAP 1. Strengthening the Recipient's capacity for project management, monitoring and evaluation, including environmental management and safety, procurement, disbursement and financial management activities. 2. Support implementation of medium-term actions under the EEMAP for electricity and gas systems. 27 Purchase of LSRFO of about 30,000 tons will provide back up in case of reduced gas supply (lower temperatures affects gas supply negatively); and to be able to fire up Heat-Only-Boilers (HOBs), particularly inDushanbe. The procurement of transformers, cables and switchgear will enable increasing reliability of supply of electricity in the country; and (a) odorant (with storage tanks) for leak detection (b) line maintenance equipment (excavator, special tools, welding materials), for increasing the reliability of the natural gas. In addition, preparatory works would be initiated in the coming weeks to understand the feasibility of rehabilitating as many of the HOBs as possible and identifying the costs of such rehabilitation. 28 Annex 3 Tajikistan EnergyEmergencyRecoveryAssistance Project Summary of EstimatedProjectCosts Procurement Plan. Barki Tajik Components Description Quantity Estimate (in US$) Barki Ta.iik PPF Component Procurementof cable 4x185 IOOOV 3000 m 195,000 Procurementof cable 4x240 IOOOV 3000 m 195.000 Procurementof cable4x185 IOOOV 3000 m 195.000 Procurementof cable 4x240 IOOOV 3000 m 195,000 Installation of cable 4x185 IOOOV 6000 m I17,000 Installation of cable 4x240 lOOOV 6000 m 117,000 Sub-total 1,014,000 Barki Taiik Retroactive Component Procurementof knife switches0.4 kV type PnC 250A and 630 A 200,000 Procurementof knife switches0.4 kV type PnC 400A Left Drive 850 212,000 Procurementof knife switches 0.4 kV type PnC 400A Right Dnve 850 212,000 Procurementof knife switches0.4 kV type p n IOOOA 25,000 Procurementof Load Breakers I O kV type BHn, 630A 218,750 Procurementof Load Breakers I O kV type BHn. 200A and IOOOA 150 187,250 Procurementof Load Breakers I O kV type BHn. 400A I5o 187,500 Procurementof low sulphur Fuel Oil 2500 tones 750,000 Procurementof low sulphur Fuel Oil 2500 750,000 Consultant services for study and preparationof design specification lot 250,000 for Nurek HPPrehabilitation Provision for procurementof equipment and servicesper lot 200,000 specification TBA Sub-total 3,192,500 Total 4,206,500 29 Procurement Plan. TajikGas Components Description Quantity Estimate(in US$) TaiikCas PPF Component Procurementand Installation of Odorizing Systems 2 100,000 Procurementof wheel-type excavator, 0.5cu. meter bucket 1 40,000 Procurementof special senices vehicle 5 100,000 Procurementof gas welding equipment and benchwork tools N/A 25,000 Procurementpipes of different diameters NIA 235,000 Sub-total 500,000 Ta.iikCas Retroactive Component Mobile laboratory for gas pipelinestesting 2 160,000 Procurementof mobile electnc welding equipment 5 50,000 Procurementof special semces vehicle PARh4-type 2 160.000 Procurementof mobile boarding cars 40,000 Procurementof pipe truck I 90,000 Consultant services for study and preparationof designspecification for rehabilitation of gas lot 250,000 distribution system Prowion for procurement of equipment and services per Iot 300,000 specification TBA Subtotal 1,050,000 Total 1,550,000 procurement Plan. SUE HMK Component Description Quantity Estimate(in US$) HMKRetroactive Component Rehabilitationo f heat-supply systems in Khojant city at the NIA 73,000 NorthernTajikistan Restorationof coal-basedheat- supply systems at selected settlements of the Southern NIA 65,000 Tajikistan Procurement of works for rehabilitationof heat supply system in the Tajikistan NIA 112.000 settlements Procurement pipes of different diameters N/A 180,000 Procurement of thermo- mechanicalequipment NIA 70,000 Total 500,000 30 Annex 4 Tajikistan Energy EmergencyRecoveryAssistance Project ProcurementArrangements Implementation responsibility i s with the Ministry o f Finance and specific actions would be taken by the PFMMP PHRD grant PIU (PIU) within the MoF. The members o f the PIU are familiar with the Bank's procurement and disbursement guidelines and procedures, have received necessary training and have been dealing effectively with the project implementation actions. ProcurementMethod The primary method o f procurement proposed i s Shopping for Bank funded activities. Provisionfor ProcurementMethodsand Procedures financed(a)out o f the proceeds o f the Grant shall be procured in accordance with the requirements General. All goods, works and services required for the Project and to be set forth or referred to in: (9 Section Io f the "Guidelines for Procurement under IBRD Loans and IDA Credits" published by the World Bank in May 2004 and revised in October 2006 ("Procurement Guidelines"), in the case o f goods and works; (ii) Sections Iand IV of the "Guidelines: Selection and Employment of Consultants by World Bank Borrowers" published by the World Bank in May 2004 and revised in October 2006 ("Consultant Guidelines") in the case o f consultants' services; and (iii) the provisions of this Section, as the same shall be elaborated in the procurement planprepared and updated from time to time by the Recipient for the Activities in accordance with paragraph 1.16 o f the Procurement Guidelines and paragraph 1.24 o f the Consultant Guidelines ("Procurement Plan"). (b) Definitions. The capitalized terms used in the following paragraphs o f this Section to describe particular procurement methods or methods o f review by the World Bank o f particular contracts, refer to the corresponding method described in the Procurement Guidelines, or] the Consultant Guidelines, as the case may be. 31 (c) Particular Methods of Procurement of Goods and Works The following methods may be used for procurement of goods and works for those contracts which are specified in the Procurement Plan: (A) Limited International Bidding; (B) National Competitive Bidding, subject to the following additional provisions set forth in the Annex to Schedule 2 of the Financing Agreement; (C) Shopping; (D) Direct Contracting; (E) Force Account; (F) Procurement from procurement agents including UN agencies; (G) Established Private or Commercial Practices which have been found acceptable to the World Bank; (H) International Competitive Bidding, subject to the provisions of paragraph 3.13 (a) of the ProcurementGuidelines; and (I) Community Participation procedureswhich have beenfound acceptableto the World Bank. (d) Particular Methods of Procurement of Consultants' Services (9 Quality- and Cost-based Selection Except as otherwise provided in sub- paragraph (ii)below, consultants' services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. For purposes of paragraph 2.7 of the Consultant Guidelines, the short list of consultants for services estimated to cost less than $50,000 equivalent per contract may comprise entirely national consultants. (ii) OtherProcedures 1. Quality-based Selection. Services for assignments which the World Bank agrees meet the requirements set forth in paragraph 3.2 of the Consultant Guidelines may be procured under contracts awarded on the basis of Quality-based Selection in accordance with the provisions of paragraphs 3.1 through 3.4 of the Consultant Guidelines. 2. Selection Under a Fixed Budget. Services for assignments which the World Bank agrees meet the requirements of paragraph 3.5 of the Consultant Guidelines may be procured under contracts awarded on the basis of a Fixed Budget in accordance with the provisions of paragraphs 3.1 and 3.5 of the Consultant Guidelines. 3. Least-cost Selection. Services for assignments which the World Bank agrees meet the requirements of paragraph 3.6 of the Consultant Guidelines may be procured under contracts awarded on the basis of Least-cost Selection in accordance with the provisions of paragraphs 3.1 and 3.6 of the Consultant Guidelines. 4. Selection Based on Consultants' Oualifications. Services estimated to cost less than US$200,000 equivalent per contract may be procured under contracts awarded in accordance with the provisions of paragraphs 3.1, 3.7 and 3.8 of the Consultant Guidelines. 5. Single Source Selection. Services for tasks in circumstanceswhich 32 meet the requirements o f paragraph 3.10 o f the Consultant Guidelines for Single Source Selection, may, with the World Bank's prior agreement, be procured in accordance with the provisions o f paragraphs 3.9 through 3.13 of the Consultant Guidelines. 6. Individual Consultants. Services for assignments that meet the requirements set forth in the first sentence o f paragraph 5.1 o f the Consultant Guidelines may be procured under contracts awarded to individual consultants in accordance with the provisions o f paragraphs 5.2 through 5.3 of the Consultant Guidelines. Under the circumstances described in paragraph 5.4 o f the Consultant Guidelines, such contracts may be awarded to individual consultants on a sole-source basis. (e) Review by the World Bank o f Procurement Decisions. While all methods of procurement and recruitment o f consultants are provided above to enable their application as the case may be in view o f the emergency nature o f the project, the decisions (by the World Bank) on which procurement method would be appliedallowed; and whether the contracts are subject to prior-review or post review would be made duringthe updating o f the Procurement Plan. The initial Procurement Plan has been agreed by the World Bank and i s presented below. 33 - m d m 0 0" m m 8 0" '0 8 s - 0 8 m 0" 0 0 N 2 N % 2 I I 2 t 2 E. b b E. 2E. c3 c c in 0 v) 0 t6 0 U ai E2' m vl 0 P 0 g00 00 8 vi a i s z z s 000 Z E '0 ' 0 ' 0 8 8 8 d d 00 i z i z d F2 0 . 00 i 4 2 2 2 d i s z z zi 0 t t t t 8 v) 0 0 0 0 0 0 0 t3 4 E! 4 E! i E! i i E! E! 4 E! N N - . 0 00 00 0 0 0 0 B B 0 0 B B 10 10 8 8 00 00 m 0 m 0 4 4 4 8 8 s s4 00 :: 00 0 0 0 0 0 0 0 N m v1 zs : : 8 0 i i i 0 Q Q 4 Annex 5 Tajikistan Energy EmergencyRecoveryAssistance Project Disbursementand FinancialManagement Disbursement Arrangements The expendituresfor the followingCategories of items is proposedto be financedout of the proceedsofthe Advance and shall be usedexclusively inthe carryingout ofthe Activities: Amount of the Financing Percentageof Category Allocated (expressedin Expendituresto be SDR) Financed (1) Goods and works under Part A and Part B ofthe Project, except for Part A.4 43 1,000 100% I (2) Goods under Part A.4 ofthe Project 923,000 100% (3) ConsultantServices and Training under Part B of the Project 452,000 100% (4) Refundof Project Amount payable pursuant PreparationAdvance to Section 2.07 of the 1,846,000 General Conditions (5) Unallocated 308,000 TOTAL AMOUNT 4.000.000 Disbursementand FundFlow Arrangements A DesignatedAccount (DA) will be opened at the National Bank of Tajikistan and will have a ceiling of USD 500,000. Applications reporting eligible expenditurespaid from the Designated Account will be submittedto the Association on a monthly basis. Disbursementsfrom the IDA Grant Account will follow the transaction-based method, i.e., Advances, Direct Payments, Special Commitments and Reimbursement (with full documentation and against Statement of Expenditures (SOEs). Applications for Direct Payments and Special Commitments above the minimum applicationlimit, as specified in the DisbursementLetter, may be submitteddirectly to 37 IDA. Disbursementswill be made on the basis of full documentation for (a) contracts for works, goods and consulting firms costing more then the equivalent o f US$lOO,OOO; and (b) for individual consultants contracts more than the equivalent of US$50,000 equivalent. Disbursements below these thresholds will be made according to certified Statement of Expenditures (SOEs). Full documentation in support of SOEs would be retained by the PIU for at least 3 years after the Association has received the audit report for the fiscal year inwhich the last withdrawal from the Grant Account was made. This information will be made available for review during supervision by Bank Staff and for annual audits. Financial Management The overall financial management residual risk for the project is moderate after mitigation measures incorporated into the project design. Specific financial management assessment and risk ratings are summarized inthe table below: Risk Risk Rating Risk Mitigation Measures Risk Rating after mitigation Measures INHERENT RISK Country level. Perceived high H The World Bank will monitor the process of project S corruption implementation. An Independent Monitoring Group will be set up to provide intensive Bank supervision. The Bank F M and procurementprocedures will be applied. Entity level. This project will be S PIU with adequate staff arrangements will be responsiblefor the M implementedby the PIU within the project implementation. The PIU team is implementing PHRD MoF. grant and has adequate experience in implementing Bank financed projects. Project level. The project will H The PIU will be responsiblefor administering the tendering and S finance procurementand delivery of the materials and equipment. Accounting records of installation of equipment for Barki the project activities will also be maintained by the PIU. The Tajik and Tajik Gas, corporate Procurement Consultant currently working under the ELW governance practices of which are with the Recipient utilities will support the PIU in this. The weak. recipient utilities would be responsible for accepting all materials and equipment procured under the project as well as appropriate and timely installation. The PIU will prepare the necessary documents to transfer the equipment to Barki Tajik, Tajik Gas and KMK (Utility Companies) and will sign equipment and materials acceptance/delivery/installation notedstatements Overall Inherent Risk - H S CONTROL RISK I.Budget M Project budgets will be prepared by PIU and agreed with the M MoF, Utility Companies and the Bank. 2. Accounting S Accounting records of the project will be maintained by PIU M Manual Accounting record F M Specialist. PIU Coordinator will be responsible for keeping. reviewing and reconciling project accounting records on a monthly basis. 3 . Internal controls. The current S All payments out of NBT bank account and Central Treasury M internal control proceduresof the account will be carried out in accordance with the MoF and PIU are weak and will need to be NBT internal procedures. Relevant NBT and The MoF Central strengthened. Treasury officials will be responsible for approving each payment order. PIU will be responsible for accepting and checking all materials and equipment for quality and 38 Risk Risk Rating Risk Mitigation Measures 1 Risk Rating after mitigation Measures ~ consistency with contract conditions. Majority of payments will be paid through direct payment M Moderatedelays are expected in Withdrawal Applications. Designated Account of the project transferring of funds from local will be opened with NBT and Tajik Somoni account will be treasury and NBT accounts to opened with Central Treasury of the MoF for local payments. suppliersof goods and services. Funds will be transferred to the MoF Central Treasury account after converting funds from NBT account. 5. Financial reporting S IFRs will be prepared in excel based spreadsheets. PIU M Coordinator will review and reconcile project accounts before sending them to the Bank. 6. Auditing. M The project financial statements will be audited by audit firm M acceptable to the Bank. Audit reports will be submitted to the Bank within 6 months from the end of relevant calendar year. Overall Control Risk -S M 7 Overall fm Risk Is1 I M Strengths The PIU in the MoF will implement the project. The PIU is already implementing the PHRD grant and its staff has relevant education background. Project accounts to be opened with local treasury andNBT will be operated inaccordance with local legislation requirements. Weaknesses Project Beneficiaries - Barki Tajik and Tajik Gas, Utility Companies- have weak corporate governance practices. Their systems and controls are not strong to ensure full compliance with Bank procedures and guidelines. The PIUwill be given a special authority to monitor the transfer of equipment and materials from PIU to Utility Companies and their subsequentinstallation and utilization. All acceptance acts for installation of equipments will need to be signed by PIU Coordinator after checking physical conditions of installed equipment. Utility Companies will ensure that PIU staff has access to installed equipments and warehouses of Utility Companies where materials and equipmentwill be stored. Budgeting PIU FM Specialist will prepare draft budgets of the project and will agree it with the Bank on a quarterly basis. Accounting system andfinancial reporting Project accounts will be maintained manually by PIU. Project accounts will be reviewed by PIU Coordinator on a monthly basis. All reports will be reviewed by PIU Coordinator before sending them to government agenciesandthe Bank. The Finance Management Specialist of the PIU will be responsible for overall project financial management, maintenance of books and accounts, preparation and dissemination of financial statements and IFR, and timely audits. The PIU will maintain appropriate financial records and 39 reports in accordance with existing government financial and accounting regulations and standards acceptable to IDA. Interim Unaudited Financial Reports (IFR, formerly FMR) in accordancewith formats to be agreed with the IDA will be send to the Bank within 45 days from the end of relevant quarter. Internal Controlsand Internal Audit NBT and the MoF Central Treasury controls and procedures will be applied to project Designated Account to be opened with NBT and the MoF Central Treasury project account respectively. The PIU will develop and agree with Utility Companies procedures for acceptance, transfer, storage and installation of equipment and materials to be procured under the project for the needs of Utility Companies. Disbursement and Funds Flow Arrangements The Borrower will establish a Designated Account in a National Bank of Tajikistan and local currency account in Central Treasury of the MoF. The project funds will be transferred from NBT account to Treasury account after converting funds into local currency. Disbursements from the IDA Grant Account will follow the transaction-based method, Le., traditional Bank procedures: Statements of Expenditure (SOEs), Direct Payments, Special Commitments. For certain payments, above the MinimumApplication Size as specified in the Disbursement Letter, the PIU will submit withdrawal applications to the Bank for payments to suppliers and consultants directly from the Grant Account. FinancialAudits There will be annual audits of the project financial statements, covering all aspects of the project. The audits will be performed by independentauditors acceptable to the Bank, and inaccordance with International Standards on Auditing (ISA), and the Bank's guidelines on auditing as stated inthe guidelines: Annual Financial Reporting and Auditing for World Bank-financed Activities (June 2003). The auditors' TORSwill be prepared by the PIU and cleared by the Bank before engaging the auditor. They will include an audit of financial transactions, an assessment of internal controls, funds flow mechanisms, and the reasonableness of the accounting, reporting and internal controls for the project. The annual audit reports will consist of a single opinion on the financial statements of the project, incorporating the project accounts, including the Special Account Reconciliation, and SOE Withdrawal Schedule as well as a Management Letter. Audit reports will be submittedto the Bank not later than six months after the end of the fiscal year to which they relate. The PIUwill provide the auditor with full access to project-related documents and records, and with the informationrequired for the audit. SupervisionPlan Progress reports on project implementation will be monitored in detail during supervision missions. The IFRs will be reviewed on a regular basis by the field-based FMS, and any results or issues followed up during supervision missions. Annual audited project financial statements and management letters will be reviewed and issues identifiedwill be followed up with PIU. F M supervision missions will focus on procurement, shipment, installation and recording of equipment for which the Utility Companies are beneficiaries. Financial Management supervision will be carried out every six month at initial stages of the project implementation and the frequency can be reduced subjectto satisfactory F M arrangements. 40 Annex 6 Tajikistan EnergyEmergencyRecoveryAssistance Project Implementationand MonitoringArrangements The Ministry of Finance (MoF) will implement the activities financed under the Grant. A PIU within the MoF is currently implementing the PHRD Grant for the Preparation of the Public Finance Management Modernization Project (TF 057774), and has been assessed by our fiduciary specialists as having the capacity to manage these funds. The PIU will be responsible for administering the tendering and delivery of the materials and equipment. Accounting records of the project activities will also be maintained by the PIU. The Procurement Consultant currently working under the ELRP with the beneficiary utilities will support the PIU in this. The beneficiary utilities would be responsible for accepting all materials and equipment procured under the project as well as appropriate and timely installation. The PIU will prepare the necessary documents to transfer the equipment to Barki Tajik, Tajik Gas and KMK (Utility Companies) and will sign equipment and materials acceptance, delivery, installation noteshtatements. IndependentMonitoringand Reporting As part off the Bank's supervision efforts, An Independent Monitoring Group -a group of three or four local professionals with skills and knowledge in the energy, economics and finance and project management as well as monitoring and reporting - would be appointed by the Bank (financed with Bank budget) to provide daily monitoring reports to the Government, implementing agencies, donors and the Bank. This IMG would monitor the procurement and disbursement processes and decisions, as per the agreed Procurement and Disbursement Plan. Importantly, IMGwould report on the performance of the energy sector on a daily basis as per an agreed format (See Annex 6). It is to be noted that IMG would on a periodic basis verify the physical deliveries and inventories of the equipment and material (e.g., Fuel Oil) procured under the Project. EEMAP Implementation To implement the broader EEMAP, the GoRT has established the Government Commission to control over the situation on a daily basis and take the appropriate steps (Attachment A to EEMAP). Decisions made by the Government Commission related to implementation of the tasks given to the Commission will be obligatory for implementation by all legal entities and individuals of the Republic of Tajikistan. Inaddition, anindependentmonitoringmechanismhasbeenset up involvingthe Government commission and donor representatives. An Independentrepresentativehas been appointed to constantly monitor the realization ofthe Action Plan. 41 AveraKe Daily Temperature (deprees Celsius) N u r e k Reservoir W a t e r Balance Inflow m3/sec 160 196 163 190 Release m3/sec 239 212 265 293 Balance MMCM -6.826 -1.382 -8.813 -8.899 Reservoir Level Beginning Level (cm above Deadzone c m 84 74 72 59 Level Increase due to Inflow c m 0 0 0 0 Level Dicrease due to Withdrawal c m 74 72 59 46 Ending Level (cm above Deadzone) c m 74 72 59 46 Absolutr Reservoir Level mas1 857.74 857.72 857.59 857.46 Energy Supply Power Generation HPP CJeneration GWh 19.18 17.17 20.88 22.66 TPP Generation GWh 0.06 2.04 2.44 2.83 Total Generation GWh 19.24 19.21 23.32 25.49 Power Import GWh 12.54 14.14 10.96 9.88 Power F.xport GWh Natural Gas Supply Total Import MCM '1588.6 1959,1 2305.0 2793.4 Total Domestic Gas MCM 35.0 35.0 35.0 37.0 Total Supply MCM 1623.6 1ss4.1 2340.0 2830.4 Thermal Energy Production Dushanbe and Yavan CHPs Gcal 5072 4886 4735 4527 KMK'HOBS Gcal Total Production Gcal 5072 4886 4735 4527 Energy Supply Balance Power GWh 3 1.78 33.35 34.27 35.37 Natural Gas GWh 14.99 '18.40 21.60 26.12 Thermal Energy GWh 5.89 5.68 5.50 5.26 Total Energy Supply GWh 52.66 57.43 61.37 66.76 Energy Consumption Power Consumption TAICo GWh 16.83 16.81 16.82 16.80 Total Power Consumption C z W h 31.78 33.35 34.27 35.37 Natural Gas Consumption TAICo MCM 188.0 200.0 221.o 223.0 Industry other then ~I'AICo MCM 321.2 258.9 203.1 298.7 Dushanbe C1P MCM 278.0 908.0 1044.0 1207.0 fieat Chly Boilers MCM 8.5 11.1 11.3 13.0 Residential customers MCM 144.2 395.3 510.4 483.2 Other M C M 544.0 21.a 129.9 374.7 Total Natural Gas Consumption M C M 1483.8 1795.1 2119.7 259e.6 Themal Energy Consumption Residential customers Gcal Other Gcal Total Thermal Energy Consumption Gcal 0 0 0 0 Energy Consumption Balance Power GWh 31.78 33.35 34.27 35.37 Natural Gas GWh 13.70 16.57 19.56 23.99 Thermal Energy GWh 0.00 0.00 0.00 0.00 Total Energy Consumption GWh 45.47 49.92 53.84 59.36 Energy Losses Power Losses GWh 0.00 0.00 0.00 0.00 0% 0.0% 0.0% 0.0% 0.0% Natural Gas Losses MCM 139.7 199.0 220.3 230.8 0% 8.6% 10.0% 9.4% 8.2% Thermal Energy Losses Gcal 5.89 5.68 5.50 5.26 a!" 100.0% 100.0% 100.0% 100.0% Dushanbe CHP C i a s Consumption MCM 278.0 908.0 1044.0 1207.0 Fuel Oil Inventory Opening Balance Tons 8303 8303 8143 8023 Additions Tons 0 0 0 0 Consumption Tons 0 160 120 120 Closing Balance Tons 8303 8143 8023 7903 Yavan CHP Gas Consumption MCM 0.0 0.0 0.0 0.0 Fuel Oil Inventory Opening Balance Tons 0 0 0 0 Additions Tons Consumntion Tons 42 Annex 7 Tajikistan Energy Emergency Recovery Assistance Project ResultsFramework and Monitoring The development objective of the Project is urgently to increasethe volume and rc.iabi ity of 1 l e national energy supply, especially inthe winter season, by supporting the implementation of the Recipient's Energy Emergency Mitigation Action Plan (EEMAP). These objectives will be realized through: increasing, to the extent possible, thermal and heat energy supply from existing assets in the shortest possible timeframe and initiating institutional and technical measures to increase the amount and reliability of energy supplied to the population during the next two winter seasons. The Bank will also continue to provide technical and policy advice as needed, including to help the Government manage priority needs to enable better reservoir management at Nurek reservoir to avoid similar crises inthe future. Expected Outcomes of the proposedProject: The LSRFO will provide back-up reserves (contingency plan) for the thermal power generation capacity inthe country inthe case gas supplies are greatly reduced. Greater access to electricity for the population, mainly in the city of Dushanbe, through rehabilitation of the power distribution grid. Improvements in the gas distribution network in areas of the country where gas is supplied; and improvements insafety of gas supply and leak detection. Improvements inmobility of Tajik Gas personnel and ability to respondto emergency events. Residents, schools and hospitals in Khujand have access to heat-this will also improve access to social services. The Bank's policy and technical advice to the Government for the overall implementation of the EEMAP will help Government manage risks and avoid crisis situations. It is important to recognize that energy shortages would continue to exist until certain medium term and longterm measures (detailed in Section B) are implemented. 43 Table 1. Results Framework Indicator Baseline Target Volume of Energy Hydro generationdropped down Optimizationof Hydro generationby below 20 GWh a day inthe end replacement of generation inthe early of 200712008 winter due to high winter (October-November) by import hydropower generation in early and keepinghigh water level inNurek winter reservoir To secure highest possible thermal power and heat generationduring all the winter Increasethermal energy supply TBD (soon) Productionof Thermal energy would increase: 0 By additional LSRFO supply to DushanbeCHP; and 0 By rehabilitatedHeat Only Boilers and local district heating networks Technical Measures (see Table 2 below) Better reservoir management Numberof days below dead Zero days below dead zone zone in winter 2008 36 days LSRFO tanks are delivered to NIA Delivery of 4000-4300 tones depending warehouses and stored safely. An on LSRFOprice, which translatesto additional indicator is the amount of incremental supply of 8300-8900 MWh power generatedin case it is ofpower and 17800-19100 MWhof necessary to use this back-upreserve thermalenergy Number of breakdowns decreases NIA The quality of power supply would be and access of population(approx. improvedto considerable part of the 9,000 people) improvedin terms of Dushanbepopulation quantity and quality of supply 2 Reducednumber of gas leaks It is difficult to detect the small Odorizingsystem would allow to gas leakagesin gas system decrease time leakagesdetection time by several times that would result in reductionof gas losses, see below No fatalities as a result of gas usage There were recorded 6 To exclude extendedgas leakages duringthe next two winters explosions that resultedin death of four peoplesand several large gas leakageswhen six peoples were suffocated in 20073 Reduction in gas losses measured 2007 Total Gas Losses 15.4% 2008 Total Gas Losses 13-14% through energy balance sheet Increase in response rates to Absence of tools, materials, and Durationof emergency repairworks emergency events by Tajik Gas repair facility results in would be decreased by 2-3 times personnel increasingof duration o f emergency repair works 30 buildings in Khujand(including Buildingsdid not have heat in It would be restoredheat supply oftwo residenceshospitals and schools) winter 2008 rejoin hospitals with total number of 656 receive heating24 hours a day beds; andrestoredimprovedheat supply throughthe winter two years from of several dozens of apartment blocks now with morethen 10'000 inhabitants 2 The Bank's investment only covers a fraction of the rehabilitationcost in Dushanbecity network. It will be hardto measurethis outcome as a function of the Bank's investment alone. Ifthe grid equipment is purchasedand installedat the technical specifications defined by the projectdocuments, this will contributeto overall improvementsin the electricity distributionnetwork of Dushanbe city. The Utility company, Barki Tajik, and other donors will also be purchasingequipment to improvethe power grid. 3 Source: TajikGas 44 Table 2. Technical Measures - No Item Expected Outcome Monitoring Method 1 Increase safety ( reduce risk of Continuous monitoringof 1.1 Procurementand installationof Odorizingsystem explosions) andreduce gas lossesin Procurement, installationand the system performance Decrease time for repairs, Continuous monitoringof 1.2 Supply of the rework tools, equipment andtrucks consumersdisconnectiontime and Procurement, installationand reduce losses performance - 2 Improvethe reliability of power Continuous monitoringof 2.1 Procurementand installationof suppliesto 19transformer stations cable 4x185 1OOOV covering30 multiple storey Procurement, installationand buildings(9,000 people) performance Improvethe reliability of power Continuous monitoringof 2.2 Procurementand installationof supplies to 15 transformer stations cable 4x240 1OOOV covering30 multiple storey Procurement, installationand - buildings (10,000 people) performance Procurementof knife switches 0.4 Ensureof protectionof 2600 cable Continuous monitoringof 2.3 kV type PnC 250A, 400A and 630 connections. These will be installed Procurement, installationand A, 1000A in 480 transformer substations covering400,000 people performance Procurementof Load Breakers I O Ensureprotectionof 480 Continuous monitoringof 2.4 kV type BHn, 200,300,400A, 630 transformers will be installed in 240 Procurement, installationand - and 1000 substations (200,000 people) performance - 3 Fuel Oil ... - Providethe necessary fuel complement to gas; and a back-up Continuous monitoringof 3.1 Low Sulfur ResidualFuel Oil solution for DCHP in case the Procurement, inventories and weather conditions go bad and gas performance - suppliesreduce. 4 Materials, EquipmentandServicesfor Heat-Only BoilersRehabilitation Heat supply of several dozens of apartment blocks with morethen Continuous monitoringof 4.1 Rehabilitation systems inOfKhujand heat-supply 10~000inhabitants,2 schoo~sand 2 Procurement, installationand kindergartens will be performance - ensuredimproved Restorationof heat supply systems Supply space heatingwith reduced Continuous monitoringof 4.2 at selected settlementsof Southern dependence on the electricity Tajikistan damagedlast winter due system, considerablereductionof Procurement, installationand to adverse winter conditions the power demand performance 45 Annex 8 Tajikistan Energy EmergencyRecoveryAssistance Project ProjectPreparationand AppraisalTeam Members Name Position Sector I 1 Raghuveer Sharma Team Leader 1IECSSD t I I 2 II Sodiq Haitov I OperationsOfficedco-Team Leader I ECSSD 3 Andrea Kucey Country Officer ECCU8 4 Marat Iskakov Energy Specialist (Consultant) ECSSD 5 Christopher Rytel Power Engineer (Consultant) ECSSD 6 Danielle Malek Country Lawyer LEGEM 7 Sally Zeijlon Regional Operations Advisor ECSPS 8 NaushadKhan Lead Procurement Specialist ECSPS 9 Agnes Kiss Lead Ecologist and Regional SafeguardsCoordinator ECAVP 10 Wolfhart Pohl Senior Specialist, Environment & Geosciences ECSSD I Lead I I 11 Siew Chai Ting I I Financial Management Specialist I ECSPS 46 Annex 9: Statementof Loansand Credits TAJIKISTAN Difference between expected and actual Original Amount in US$ Millions disbursements Project ID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. F m . Rev'd PO98889 2007 COTTON SEC RECOV 0.00 15.00 0.00 0.00 0.00 15.47 0.45 0.00 PO96861 2007 PUBLIC SECTOR REFORM TA 0.00 5.00 0.00 0.00 0.00 4.88 I.89 0.00 PI00451 2006 AVIAN FLU - TJ 0.00 5.00 0.00 0.00 0.00 4.08 0.87 0.00 PO98410 2006 TAJSTAT 0.00 1.00 0.00 0.00 0.00 0.43 -0.12 0.00 PO84035 2006 FERGHANA VALLEY WATER RES 0.00 13.00 0.00 0.00 0.00 11.85 3.36 0.00 PO79027 2006 MUNlINFRA 0.00 15.00 0.00 0.00 0.00 12.74 2.74 0.00 PO78978 2006 COMM & BASIC HEALTH 0.00 10.00 0.00 0.00 0.00 6.75 -0.12 0.00 PO89244 2005 ENERGY LOSS REDUCTION 0.00 18.00 0.00 0.00 0.00 14.69 -1.83 0.00 PO89566 2005 LAND REGIS & CADASTRE 0.00 10.00 0.00 0.00 0.00 7.76 2.15 -0.32 PO77454 2004 COMMTY AGRlC & WATERSHED 0.00 10.80 0.00 0.00 0.00 6.34 -2.66 0.00 MGMT PO69055 2003 EDUC MOD 0.00 20.00 0.00 0.00 0.00 8.16 5.55 0.00 PO75256 2002 PAMIR PRIV POWER 0.00 10.00 0.00 0.00 0.00 0.60 -1.11 -1.59 PO57883 2002 DUSHANBEWS 0.00 17.00 0.00 0.00 0.00 6.01 -2.12 0.00 Total: 0.00 149.80 0.00 0.00 0.00 99.76 9.05 - 1.91 TAJIKISTAN STATEMENT OF IFC's Held and DisbursedPortfolio InMillions ofUSDollars Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic EskhataBank 0.96 0.00 0.00 0.00 0.66 0.00 0.00 0.00 2003 Giavoni 0.00 3.00 0.00 0.00 0.00 3.00 0.00 0.00 2002 Pamir Energy 4.50 0.00 0.00 0.00 4.50 0.00 0.00 0.00 2005 SEF AKFED MB Taj 0.00 0.67 0.00 0.00 0.00 0.67 0.00 0.00 2006 SEF AKFED M B Taj 0.00 0.18 0.00 0.00 0.00 0.18 0.00 0.00 2002 SEF FOM 0.19 0.00 0.00 0.00 0.19 0.00 0.00 0.00 2004 SEF FOM 0.50 0.00 0.00 0.00 0.25 0.00 0.00 0.00 2002 SEF TelecomTech 0.09 0.00 0.00 0.00 0.09 0.00 0.00 0.00 Total portfolio: 6.24 3.85 0.00 0.00 5.69 3.85 0.00 0.00 _____ ~~ Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2006 Pamir I1 0.00 0.00 0.00 0.00 Total pendingcommitment: 0.00 0.00 0.00 0.00 47 Annex 10: Country at a Glance TAJIKISTAN Europe h POVERTY and SOCIAL Central Low. Tajikistan Asla Income Development dlamo nd' 2006 Population mid-year(millions) 6 7 460 2,403 GNIpercapita (Atlasmethod US$) 390 4,796 650 Life epectancy GNI (Atlas method, US$billions) 2 6 2208 1582 Average annual growth, 2000.06 T Population(4 12 0 0 19 Laborforce (%) 2 0 05 2 3 GNI Gross per primary Moat recent estlmate (latest year avallable, 2000-06) capita enrollment Poverty (%of population belownetionalpo vertyline) Urbanpopulation (%of totalpopulation) 25 64 30 Lifeepectancyat birth (pars) 64 69 59 Infant mortality (perioooiivebirths) 59 28 75 Child malnutntion (%ofchildrenunder5) 5 Access to imDrOVedwater source Access to an improvedwater source (%ofpopulation) 59 92 75 Literacy (XofpopulafionageS+j 99 97 61 Gross primaryenrollment (%of school-agepopulation) 0 1 0 2 0 2 - Ta]ikistan Male 0 3 0 3 0 8 -Low-incom e group Female 99 00 86 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1986 1996 ZOO5 2006 Economlc ratlos' GDP (US$ blllions) 11 23 2 6 Gross capitalformationlGDP 333 223 u 3 145 Eports of goods andserviceslGDP 73 5 539 46 4 Trade - Gross domestic savingslGDP 8 9 8 9 -46 5 0 Gross nationalsavings1GDP 152 9 7 37 5 Current account balanceIGDP -7 1 54 22 8 Interest paymentslGDP 00 0 5 Domestic Capital Total debt/GDP 664 44 2 savings formation Total debt serviceleports 0 1 5 1 Present value of debt1GDP 333 Present value of debtleports 504 Indebtedness 1986-96 1996.06 2005 2006 2006-10 (averageannual gmwth) GDP -ll6 7 9 6 7 7.0 - Tqikisfan GDP percapita -114 6 6 54 5.4 Low-incomegroup E v r t s of goods andservices 7 6 n 6 STRUCTURE of the ECONOMY 1986 1996 2005 2006 (%of GDP) Agnculture 330 390 24 0 23 6 Industry 402 316 313 26 1 Manufactunng 276 204 23 7 8 4 services 268 295 44 8 50 2 Householdfinal consumption ependiture 726 643 954 87 0 Generalgov't final consumptionependiture 8 5 8 8 92 8 0 lmpOf?SOf goods and SeNlCeS 76 9 72 8 55 9 GCF -GDP 1986-96 1996-06 2005 2006 (averageannualgrowth) IGrowth of exports and Imports (Oh) Agnculture -01 9 0 16 8 0 Industry -94 97 0 4 8 0 Manufactunng -74 9 2 67 80 SeNlCeS -113 5 2 6 7 80 Householdfinal consumption ependiture P 9 Generalgov't final consumption ependiture 22 bi 02 03 04 05 M I Gross capitalformation - P 5 -18 Imports of goods and services 37 Note 2006dataare preliminaryestimates This table was producedfrom the Development Economics LDB database 'Thediamonds showfour keyindicators inthecountry(in bold) comparedwithits income-groupaverage If data are missing thediamondwll be incomplete 48 Taiikistan PRICES and GOVERNMENT FINANCE 1986 1996 2005 2006 (oh/.) _~ Domestic prices (%change) I50 T Consumer prices -252 5 6 5 0 ~;: I4O Implicit GDP deflator -40 4306 9 5 202 Go vemmenf finance ,10 (%ofGDP includes current grants) I O Current revenue 0 2 159 0 8 1 01 02 03 04 05 Current budget balance -48 3 2 2 8 Overall surplus/deficit -5 8 -32 -2 8 ____________-CPI GDPddlator TRADE (US$ miLonsj Totalexports (fob) Aluminum 295 525 525 Cotton Fiber 157 205 229 /is00 Manufactures 32 I 83 85 I 1 I Totalimports (cif) 786 1461 1528 1 Food 149 118 P 4 Oo0 Fueland energy 233 231 242 500 Capitalgoods 78 PO P5 0 Export price index(2000-00) 111 00 01 02 03 04 05 06 Import price index(20OO=WO) m2 pExports nlmpoits Terms of trade (2000=00) XI9 BALANCE of PAYMENTS 1986 1996 2005 2006 ~~ (US$ miLons) /Current account balance to GDP (Oh) 1 Eworts of goods and services 775 1,246 1304 imports of goods and services 811 1683 1571 Resourcebalance -36 -437 -267 Net income -69 -75 -99 Net current transfers 30 636 1007 Current account balance -75 124 641 Financing items (net) 85 -115 639 Changes in net reserves -a -9 -2 Memo: ReSeNeSincluding gold (US$ milhons) 14 8 3 195 Conversion rate (DEC loca//US$) 0 3 3 1 33 1 EXTERNAL DEBT and RESOURCE FLOWS 1986 1996 2005 2006 (US$ millions) Composition of 2005 debt (US$ mill.) Totaldebt outstanding anddisbursed 699 1,022 IBRD 0 0 0 IDA 30 308 339 G:84 I Total debt service 1 77 IBRD 0 0 0 IDA 0 2 3 Composition of net resource flows Official grants 59 m4 Official creditors 36 66 Pnvatecreditors 0 -3 Foreign direct investment (netinflows) 18 54 Portfolio equity(net inflows) 0 0 D 210 World Bank program ,Ii Commitments 55 5 0 l8RD Disbursements E - Bilateral 30 35 6 i, A.13 - IDA D. Other mlidaterel F - Private Pnncipal repayments 0 0 0 I C - I M F G- Shw-term Net flows 30 35 6 Interest payments 0 2 3 Net transfers 30 32 14 Note This table was producedfrom the Development Economics LDB database 9/28/07 49 68°E KAZAKHSTAN 70°E Rayons 39 Kulob 1 Tursunzoda 20 Murghob 40 Baljuvon TAJIKISTAN 2 Shahrinav 21 Nosir Khusrav 41 Moskva 3 Rudaki 22 Shahrituz 42 Shurobod SELECTED CITIES AND TOWNS 4 Hissor 23 Qabodiyon 43 Khovaling 5 Varzob 24 Jilikul 44 Muminobod AUTONOMOUS OBLAST CENTER* 6 Fayzobod 25 Khuroson 45 Pandjakent OBLAST CENTERS To 7 Vahdat 26 Qumsangir 46 Ayni TAJIKISTAN Tashkent 8 Roghun 27 Bokhtar 47 Shahriston NATIONAL CAPITAL 9 Nurobod 28 Kolkhozobod 48 Zafarobod MAIN ROADS 57 To 10 Rasht 29 Jomi 49 Istaravshan Fergana Andijon 11 Tojikobod 30 Vakshs 50 Ghonchi RAILROADS To 12 Tavildara 31 Yovon 51 Spitamen Tashkent Taboshar Valley JAMOAT (SUB-DISTRICT) BOUNDARIES 52 Darya UZBEKISTAN To 13 Jirgatol 32 Sarband 52 Matchin 55 Syr Andijon 14 Darvoz 33 Panj 53 Jabor Rasulob RAYON (DISTRICT) BOUNDARIES Khodjand Kayrakkum Reservoir 15 Vanj 34 Danghara 54 Kuhistoni Mastchoh AUTONOMOUS OBLAST BOUNDARY* Konibodom 16 Ishkoshim 35 Farkhor 55 Ghafurov Chkolovsk 56 17 Roshtqala 36 Norak 56 Konibodom OBLAST BOUNDARIES To 48 51 53 18 Rushon 37 Vose 57 Asht 40°N 58 INTERNATIONAL BOUNDARIES Bukhoro 19 Shughnon 38 Sovet 40°N 58 Isfara SOGD 49Ura- * Area with no oblast-level administrative divisions, Tyube To Kyzyl-Kiya 72°E where rayons are under direct republic jurisdiction. REGION To 50 KYRGYZ REP. Bukhoro 47 To To 74°E Sary-Tash Osh Pendzhikent Ayni Zeravshan 0 20 40 60 80 Kilometers 54 45 46 Pik Lenin 0 20 40 60 Miles Jirgatal' 13 (7134 m ) Tr a n s A l a i - R a n g e 10 Rasht Pik Imeni Lake 11 Ismail Samani Karakul' Komsomolabad (7495 m ) Region under 9 12 4 5 7 8 direct Republic DUSHANBE Obigarm G H O R N O - subordination 1 14 2 6 40 Kalaikhum Pik Revolution B A D A K H S H A N Rangkul' Vanj (6,974 m) CHINA UZBEKISTAN Nurek 43 36 Rukhch A . O . 20 3 Murgab 31 P15a 44 m Bartang Murgab 38 Panj Lake 38°N 25 i r Sarezskoye 38°N 29 34 Kulyab 39 18 s 27 Kurgan- 32 42 Aksu To Tyube 37 Qarshi Alichur 24 30 41 22 Moskovskiy Garavuti 19 28 35 Pamir KHATLON Khorog Shahrtuz 23h 26 33 Pyanj REGION 21 Vakhs Andarob Pik Karl Marx 17 (6723 m ) Vrang To Panj Baghlan Ishkashim 16 IBRD MA AFGHANISTAN This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information 33493R Y2007 PAKISTAN 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 68°E 70°E 72°E endorsement or acceptance of such boundaries.