Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) Report Number: ICRR0021788 1. Project Data Project ID Project Name P108440 Mali Energy Support Project SIL (FY09) Country Practice Area(Lead) Mali Energy & Extractives L/C/TF Number(s) Closing Date (Original) Total Project Cost (USD) IDA-46170 30-Sep-2014 92,183,795.38 Bank Approval Date Closing Date (Actual) 18-Jun-2009 30-Jun-2018 IBRD/IDA (USD) Grants (USD) Original Commitment 120,000,000.00 0.00 Revised Commitment 92,122,298.23 0.00 Actual 92,183,795.38 0.00 Prepared by Reviewed by ICR Review Coordinator Group Fernando Manibog Kavita Mathur Ramachandra Jammi IEGSD (Unit 4) 2. Project Objectives and Components DEVOBJ_TBL a. Objectives The project development objective (PDO) is "to improve the access and efficiency of electricity services in Bamako and in other targeted areas in the country" (Schedule 1, page 7 of the Financing Agreement dated June 6, 2009). For the purposes of this ICR Review, the following two sub-objectives will be assessed: Page 1 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) Sub-objective 1: To improve the access [to] electricity services in Bamako and in other targeted areas in the country. Sub-objective 2: To improve the efficiency of electricity services in Bamako and in other targeted areas in the country. b. Were the project objectives/key associated outcome targets revised during implementation? No c. Will a split evaluation be undertaken? No d. Components The project was comprised of three main components, as follows: Component 1: Transmission and Distribution Reinforcement and Extension (appraisal estimate, US$107 million; actual cost, US$78.06 million). This component was intended to finance: (i) the upgrading of the electricity transmission line between Segou and Bamako; (ii) the upgrading and reinforcement of 30- kilovolt (kV) facilities in the Bamako peripheral area; (iii) upgrading and reinforcement of low- and medium- voltage distribution networks in Bamako and, among others, Kati, Segou, Kayes, Mopti, Sikasso and Koutiala; and (iv) connection of Oulessebougou and Kangaba, supplied by isolated diesel units, to the main grid. Component 2: Energy Efficiency and Demand Side Management (appraisal estimate, US$5.0 million; actual cost, US$4.66 million). This component was meant to finance: (i) an urban and rural residential household lighting program to replace incandescent or neon light bulbs with compact fluorescent lamps (CFLs); (ii) a street lighting program in key urban and rural areas centers to replace incandescent or neon light bulbs with CFLs and/or high-pressure sodium vapor lamps; and (iii) a lighting program for public facilities to replace incandescent light bulbs with CFLs. Component 3: Capacity and Institutional Strengthening of Key Sector Institutions (appraisal estimate, US$8.0 million; actual cost, US$9.46 million). This component was intended to finance programs to improve the following: (i) the operational and financial performance of Energie du Mali, Societe Anonyme (EDM SA) through the implementation of the Restructuring and Recovery Plan and capacity-building; (ii) the capacity of the Ministry of Energy and Water (MEW) to assess, monitor, evaluate and make recommendation on energy sector strategy development and planning, governance, environmental and social safeguards, and public dissemination activities; and (iii) the capacity of the Water and Electricity Regulatory Commission (CREE) to improve its regulatory tasks for the electricity and water sectors. Revised components. During the August 2013 Level 2 restructuring, the original project resources were reduced by 21 percent and the above components were revised accordingly. Activities that had not advanced sufficiently or those for which the economic justification became doubtful (in light of the emergent crisis) were dropped. For Component 1, the new 150-kV transmission lines to complete a transmission loop around Bamako and the connection of three secondary centers to the main grid were dropped. Instead, the upgrading and reinforcement of the transmission and distribution facilities around Bamako were expanded. For Component 2, given the already existing large market for CFLs, the Government requested that CFL Page 2 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) procurement be discontinued beyond the 250,000 CFLs already procured, and the funds be reallocated toward street lighting instead. For Component 3, the Government requested the reallocated resources to support the preparation of a new sector investment master plan based on a least-cost development strategy. e. Comments on Project Cost, Financing, Borrower Contribution, and Dates Project Cost. The estimated total project cost at the time of project approval in June 2009 was US$120 million. At the time of project restructuring in August 2013, the project cost was revised to US$95 million. The actual disbursement at the time of project closing in June 2018 was US$92.19 million, or 97 percent of the revised project cost (ICR page 51). Financing and Borrower contribution. IDA fully financed the project. There was no Borrower contribution (ICR page 2). Dates. The project was approved on June 18, 2009 and declared effective on November 5, 2009. A mid- term review was conducted on February 4, 2013. The project had three restructuring events: The first major restructuring was in August 27, 2013, to cancel some of the financing, modify components and costs, reallocate among disbursement categories, adjust the institutional arrangements and implementation schedule, revise the results framework, and extend the closing date. The second restructuring on June 25, 2015 involved another extension of the closing date. The third restructuring on June 20, 2016 involved an adjustment in components and costs, a revision of the results framework and implementation schedule, and an extension of the closing date. The project, which was originally scheduled to close on September 30, 2014, closed with an almost four-year delay on June 30, 2018. Split Rating. In line with the IEG guidelines (page 46), a split rating will not be carried out for this ICR Review because the scope of the project shrank, commensurate with the decrease in commitments through a cancellation of funds, as explained immediately above under "Revised Components". Moreover, the original outcome indicators were not changed in substance, while the targets were adjusted. For example, the outcome indicator related to "increase in the number of households connected to electricity provided by EDM-SA in Bamako" had an original target of 382,000 households, which was decreased slightly after restructuring to 350,000 households. The target was increased slightly from 182,000 to 190,000 households for the outcome indicator related to "increase in number of households connected by EDM-SA outside Bamako." The original indicator on reduction in technical and non-technical losses were more realistically measured by an indicator on "total distribution losses on the interconnected grid reduced to 13.7 percent." 3. Relevance of Objectives Rationale At appraisal, the PDO, which remained unchanged until project completion, was substantially relevant to the Bank’s strategic focus of promoting closer energy sector integration across Mali’s various regions. More specifically, the project was aligned with the 2007–2011 Country Assistance Strategy’s objectives to develop infrastructure, strengthen productive sectors, and consolidate the public sector reforms. In parallel, the PDO was also closely aligned with the two main pillars of the Government’s Growth and Poverty Page 3 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) Reduction Strategy Framework (GPRSF) adopted in 2007 to (a) develop infrastructure and strengthen productive sectors, and (b) consolidate the public sector structural reform agenda. During the early part of project implementation, Mali dealt with a simmering political crisis that culminated with the 2012 crisis. At project closure, one of the largest United Nations (UN) peacekeeping operations still supported the country. With the weaknesses in technical capacity for implementation, in addition to governance and institutional challenges, project implementation delays resulted, leading to the cancellation of a portion of the project’s financial resources. Starting in 2012 and during implementation, the persistent conflict in the north and the unstable security context influenced the Bank’s support for Mali in major ways. With the 2012 political change, and within the context of OP 7.30 (Dealings With De Facto Governments), the Bank restructured its entire portfolio in Mali by way of the 2013 Interim Strategy Note (ISN). The PDO remained substantially relevant until project closure, despite the changes in the partnership framework. The ISN’s priorities for re-engaging with Mali included infrastructure construction and rehabilitation to lay the groundwork for economic recovery. The project was restructured and the Results Framework was revised to reflect on-the-ground realities. According to the ICR (paragraph 20): “The ISN identified emergency activities that were grouped under three priority pillars, of which Priority Pillar 3 aimed to prepare the conditions for economic recovery. A key identified priority under this pillar was the restoration of the EDM-SA’s financial capacity to invest in the extension and modernization of electricity infrastructure and a major expected outcome was an increase in access to electricity in rural areas.” The restructured project was consistent with Pillar 3 of the ISN. It also allocated resources to prepare a new sector investment master plan that included the analytical and technical basis for mapping out future electricity investments. Rating Relevance TBL Rating Substantial 4. Achievement of Objectives (Efficacy) EFFICACY_TBL OBJECTIVE 1 Objective To improve access [to] electricity services in Bamako and other targeted areas of the country. Rationale Theory of Change Through physical inputs including the expansion, rehabilitation, reinforcement and upgrading of the (medium voltage) transmission and (low voltage) distribution network, several major outputs were expected, including the upgrading of the high-voltage transit system, the doubling of the medium-voltage line, improvements in Page 4 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) Bamako substations and new substations in regional urban centers, and the laying of underground electric distribution lines. These outputs would lead to the completion of electrification in Bamako and regional urban centers, from which the directly linked outcomes are increased electricity delivery as evidenced by an increased number of connections and direct beneficiaries. In the absence of the project, the persistent lack of electricity supplies and the low levels of energy access in rural, peri-urban and urban areas could be expected to persist. In terms of achieving the PDO, the project's investments are comprehensive, well-timed and appropriately sequenced. However, demand is growing at such a rapid rate that the project-financed infrastructure would soon be inadequate and further investments would be required. Outputs  Interconnection over 23 kilometers (km) of the second circuit of the 150-kV Kodialani-Sirakoro power line to increase transmission capacity and system availability, including 25 km of optical fiber and a supervisory control and data acquisition (SCADA) system.  Rehabilitation of the 150-kV Bamako-Fana-Ségou power line, including (i) the renovation of the 221- km power line linking Bamako to Ségou; (ii) the setup of a tower at the Fana substation to ensure the feasibility of transmission lines; and (iii) the installation of a 232-km optical fiber cable and accessories to secure transmission and availability of the electrical system.  Upgrading of the transmission system at the Fana substation, including (i) the installation of a set of 150 kV bars with a digital control system; and (ii) installation of high voltage (HV) and medium voltage (MV) equipment, and the Substation Control and Monitoring System.  Upgrading of the HV substations in Kalabancoro and Kodialani.  Construction or rehabilitation of five substations in Bamako and the Kati urban center.  Installation and rehabilitation of 285 km of MV lines and 865 km of LV lines to facilitate the electrification of neighborhoods of the Bamako metropolitan and regional urban centers.  Laying of three, 30-kV underground power distribution lines to link substations, as follows: (i) Kalabancoro and Badala substations; (ii) Badala and Balingue substations; and (iii) Dar Salam/Balingue/Balkou substations.  Installation of 104 MV/LV transformers to facilitate the electrification of districts in Bamako urban centers and the localities of the Kati circle, Koulikoro region. Outcomes The ICR (pages 14 and 15) indicates that: Page 5 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440)  A total of 20,836 connections was completed in the neighborhoods of Bamako and Kati. The details on the neighborhoods that were electrified, together with technical information on the networks completed, are presented in Table 4, page 14 of the ICR.  Electrification and energy access was also provided in the urban centers of Sikasso, Kayes, Koutiala and Segou by connecting 9,863 households to the grid. The details for each of those four regional centers, together with the technical information on the network expansion and connections implemented, are presented in Table 5, page 15 of the ICR.  The actual number of beneficiaries was 998,400, thus exceeding by more than threefold the target (set at the 2013 restructuring) of 285,950 beneficiaries. About half of the beneficiaries were women, which significantly exceeded the target (set at the 2013 restructuring) of 145,834 female beneficiaries. The ICR (paragraph 30) concludes that the project "contributed significantly to increasing energy access", in association with the Government's "deliberate policy to expand energy access" and "reach out to the population and avoid the conflict spiraling down again." The Achievement of Objective 1, however, encountered slow procurement and implementation delays stemming from the political crisis in 2012, leading to the 2013 restructuring that cancelled activities (and corresponding financing) that had not advanced sufficiently at that time, e.g., the completion of the transmission loop around Bamako. On balance, based on these significant outcomes (while noting the crisis-fueled implementation delays), the achievement of sub-objective 1 is substantial. Rating Substantial OBJECTIVE 2 Objective To improve the efficiency of electricity services in Bamako and in other targeted areas in the country. Rationale Theory of Change. The implementation of inputs and activities--specifically a program to replace incandescent light bulbs with compact fluorescent lamps (CFLs), introduce energy-efficient products, and raise public awareness--were expected to produce measurable outputs, including the delivery and installation of electricity meters, CFLs, solar products, and public lighting. These outputs, in turn, were expected to lead directly to improved commercial and financial efficiency of EDM-SA, which would also be provided with training, modernization of information systems, and capacity building in order to achieve the PDO. In the absence of the project's support, distribution losses would have been significantly higher, and utility reform through improvements in financial viability and operational efficiency would be much weaker if not absent. Outputs Page 6 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440)  EDM-SA acquired 13,332 conventional electric meters (of which 10,666 were single-phase and 2,666 were three-phase) and 30,666 prepayment meters (of which 24,533 were single-phase and 6,133 were three-phase).  250,000 CFLs were distributed, equivalent to 4 megawatts (MW). However, this was based on a reduced program, since CFLs already had a significant distribution in Mali.  Solar-powered lamp distribution was also limited. A total of 1,400 streetlights with solar-powered light emitting diodes (LEDs) were distributed. Outcomes  The CFLs distributed under the project resulted in annual gross generation saving of 14 GWh and a total economic present value (EPV) of avoided cost of generation of CFAF 5 billion or US$11 million over the maximum CFL life of 5 years (assumed from the third year, 30 percent of the CFLs will be degraded annually), with a levelized cost of energy saving of CFAF 8 per kWh or US$0.02 per kWh (ICR, page 16).  The solar-powered lamps resulted in an estimated peak demand savings of 0.4 MW and annual gross energy savings of 1 GWh, a total EPV of avoided cost of generation of CFAF 0.9 billion or US$21 million over the maximum LED and battery life of 10 years (assumed solar streetlights annual malfunctioning rate of 10 percent from the fifth year), with a levelized cost of energy saving of CFAF 232 per kWh or US$0.5 per kWh (ICR, page 16).  Efficiency improvements also resulted from the rehabilitation and upgrading of the transport and distribution networks under the project, by reducing the peak load and distribution losses. The operational efficiency outcome target was achieved, as is evident from peak load reduction having reached 7 percent, particularly in Bamako urban and suburban neighborhoods (ICR, page 16).  Total distribution losses on the interconnected grid was only partially achieved, however, as the target was missed by 17 percent (i.e., a target of 13.7 percent and achievement in June 2018 of 16 percent). EDM-SA could not fully control all the necessary factors to reduce losses, e.g, it had only partial control on the consumed and billed energy, revenue collection, and non-technical losses (ICR, page 16-17).  The growth in demand and customer base, and the ensuing greater share of low-voltage connections, has resulted in a countervailing increase in technical (and possibly non-technical) distribution losses. On balance, given the important shortcomings indicated above, the achievement of sub-objective 2 is modest. Rating Modest Page 7 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) OVERALL EFF TBL OBJ_TBL OVERALL EFFICACY Rationale The targeted energy access outcomes were achieved or exceeded (threefold with respect to the number of beneficiaries). Efficiency gains at the level of utility operations were also achieved by reducing the peak load; however, the reduction in distribution losses was only partially achieved. Implementation delays early on due to the political crisis also resulted in the cancellation of certain investment activities, with the corresponding benefits foregone. On balance, the project’s overall efficacy in achieving the PDO is substantial. Overall Efficacy Rating Substantial 5. Efficiency The project’s economic analysis at appraisal was conducted for the transmission and distribution component, as well as the CFL and street lighting sub-components; however, there was no economic analysis in the PAD for the project as a whole. At completion, economic analysis was conducted covering 99 percent of the total project cost, and for the two aforementioned components as well. Thus, a direct comparison of the economic analysis at appraisal and at completion is not feasible. At completion, the whole project’s net present value (NPV) was US$84 million and the economic internal rate of return (EIRR) was 21 percent, using a 2.6 percent discount rate based on the Bank’s guidance on the social discount rates. This takes into account the levelized cost of energy savings of about 21 cents per kWh. As indicated above, the PAD did not provide NPV and EIRR estimates for comparison. Regarding the transmission and distribution component, the NPV at completion was US$72 million and the EIRR was 16 percent, compared to the lower figures at appraisal, i.e., NPV of US$9 million and EIRR of 12 percent. At completion, for the CFL and street lighting sub-component, the 250,000 CFLs that were distributed (for an aggregate equivalent of 4 MW) resulted in annual savings in grow generation of 14 GWh. The net present value of the avoided generation cost is about US$11 million over 5 years, i.e., the maximum life of CFLs. At completion, a total of 1,400 streetlights had been outfitted with solar-powered LED lamps, resulting in peak demand savings of 0.4 MW and annual grow energy savings of 1 GWh. The net present value of the avoided cost of generation is US$21 million over the 10 years of LED and battery life. For the financial analysis at completion, the financial NPV was US$319 million when discounted at 0.4 percent (real, whereas the nominal interest rate for subsidiary financing is 2.5 percent). The financial analysis was conducted for the total investment, covering 99 percent of the project costs, since each component had a different implementing agency. In terms of implementation efficiency, the project took almost 9 years to complete, with extensions totaling 3 years and 9 months. However, it is to be noted that the activities with implementation and procurement delays were cancelled at the 2013 restructuring, at which time most of the major transmission and distribution facilities Page 8 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) had already been completed. The closing date extensions were mostly to complete distribution activities, rebuild EDM-SA’s technical capacity and conduct investment planning for the energy sector. On balance, given the project’s economic and financial efficiency, and taking into account the completion of the project’s major investments around the original closing date, efficiency is rated substantial. Efficiency Rating Substantial a. If available, enter the Economic Rate of Return (ERR) and/or Financial Rate of Return (FRR) at appraisal and the re-estimated value at evaluation: Rate Available? Point value (%) *Coverage/Scope (%) 0 Appraisal 0  Not Applicable 99.00 ICR Estimate  21.00  Not Applicable * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome Relevance of objectives, efficacy and efficiency are each rated substantial. On balance—given the shortcomings in achieving results for the reduced distribution programs for CFLs and solar-powered lamps, the partial achievement of distribution loss reduction targets, and project implementation delays initially triggered by the political crisis—the project’s outcome is rated Moderately Satisfactory. This outcome rating is in line with Appendix H, page 38 of the ICR preparation guidelines dated September 27, 2018, which indicates that a substantial rating for relevance, substantial for efficacy, and substantial for efficiency, would lead to a Moderately Satisfactory outcome rating "for a project in which there are moderate shortcomings in the achievement of one or more of the objectives/outcomes in the assessment of the overall Efficacy." This is supported by the modest rating for Objective 2 in the Efficacy section. a. Outcome Rating Moderately Satisfactory 7. Risk to Development Outcome There are negligible risks to the energy access expansion outcomes (Sub-objective One), since the connections are already in place and a large number of beneficiaries were reached. However, there are moderate risks with respect to the quality of service, which depends on the capacity of the Government and Page 9 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) EDM-SA to sustainably provide adequate resources for maintenance and continued investment in the electricity sector. There are significant risks to the energy efficiency outcomes (Sub-objective Two), since the financial viability of EDM-SA continues to also be at significant risk given (i) Mali’s continuing reliance on costly thermal generation to meet increased demand; and (ii) its inability to attract private investments due to the country’s macroeconomic and political risks. In the medium term, subsidies will need to be reduced and the energy mix will also need to be changed to move away from imported petroleum. Moreover, EDM-SA could benefit from electricity imports from the emerging West Africa Power Pool, which could lower the cost of service. There are high risks to the sustainability of solar-powered streetlights, since the concerned municipalities and the regional departments of the Directorate of Energy are unable to perform this public lighting task properly due to lack of trained staff and financial resources. Overall sustainability is enhanced by the project’s support for (i) a Revenue Protection Program; (ii) the installation of advanced enterprise resources planning and information systems; and (iii) the updating of the energy sector strategy and turnaround plan. Energy access and energy efficiency improvements will also continue to be supported under the recently-approved Mali-Energy Sector Improvement Project. 8. Assessment of Bank Performance a. Quality-at-Entry Regarding the choice of the PDO, the Bank’s support for the extension and reinforcement of EDM-SA’s transmission and distribution networks—in order to improve energy access and energy efficiency in Bamako and regional centers—was fully aligned with Mali’s Growth and Poverty Reduction Strategy Framework (2007) and its two main pillars: (i) to develop infrastructure and strengthen productive sectors; and (ii) to consolidate the public sector reform agenda. These were also the key strategic objectives of the Bank’s Country Assistance Strategy (2007-2011). Regarding project preparation, the project’s physical components were based on feasibility studies that were reviewed by the Bank team and approved by the Government. EDM-SA established the technical aspects and cost estimates for the transmission and distribution components and cross-checked them with actual costs from similar activities within the region. Thus, the project’s technical design was sound overall. However, the energy efficiency activities and the measurement of results could have been strengthened. The activity to promote CFLs proved to be unnecessary since CFLs were already in full use in Mali. From the start, the solar-powered street lighting also had doubtful sustainability due to the failure to identify at the outset an entity that would assume maintenance and replacements costs. Moreover, mitigation measures to address procurement weakness were inadequate even though the procurement risk was rated high, leading eventually to implementation delays due to insufficient local capacity to carry out procurement tasks. Financial management risks were rated substantial at appraisal, and the mitigation measures were adequate, leading to smooth transactions during Page 10 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) implementation. Security and political risks were underestimated, thus causing major disruptions in project implementation when they materialized. Quality-at-Entry Rating Moderately Satisfactory b. Quality of supervision Project start-up was slow due to weaknesses in coordination and gaps in readiness for implementation. However, the Bank was quick in carrying out the necessary restructuring in 2013, which eventually proved to be effective in enhancing results that would have been otherwise difficult to achieve. The rapid interaction between the Bank’s management and the project team was critical to this effort. The Bank’s new arrangements that enabled operations in fragile environments were also used effectively to maintain a sustained dialogue with key stakeholders within Mali and with the donor community, restructure the portfolio as well as the project, and lay the basis for preparing an Interim Strategy Note. The ICR (paragraph 71) indicates that: “The reporting of implementation performance was candid. Aide Memoires and ISRs were prepared carefully and kept all stakeholders abreast of the project status and the perspectives toward achieving the outcome. All ISRs had an updated status of the Results Framework that provided the World Bank management and all internal stakeholders the information necessary to chart out the course of business continuation in Mali, and to provide guidance to operational staff.” Quality of Supervision Rating Satisfactory Overall Bank Performance Rating Moderately Satisfactory 9. M&E Design, Implementation, & Utilization a. M&E Design The PAD provided an adequate Result Framework that also delineated the arrangements for monitoring results on the ground. The performance indicators were measurable and formulated to enable accurate tracking of the expected outcomes. The design of the M&E framework was consistent with the project’s theory of change. For each of the indicators, the PAD delineated the data to be collected, the instruments for collecting data, the reporting frequency, and the institution/s specifically responsible for collecting the data. One moderate shortcoming is the need for stronger indicators and targets with respect to the energy efficiency activities, better control of distribution losses, and EDM-SA’s commercial and financial viability. Page 11 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) b. M&E Implementation A medium-term review was conducted in January-February 2013, leading to a decision by the Borrower and the Bank to restructure the project’s scope and content, cancel a portion of the financing (21 percent of the originally approved amount), reallocate the remaining amount, revise the results framework, and extend the closing date. Consequently, the indicators were revised and the respective levels of the targets were adjusted. A new indicator related to the number of project beneficiaries was added; moreover, the separate indicators related to the reduction of distribution losses were all integrated into one indicator, given the technical difficulties of measuring each sub-component of those losses. According to the ICR (paragraph 74): “All ISRs updated the status of the progress toward the outcome target. Throughout project implementation, progress toward the outcome was documented and reported in the ISRs and this provided key stakeholders with a timely picture of the progress of the project on the ground.” c. M&E Utilization M&E data as reported in the ISRs enabled the Bank’s management to provide guidance to the project team on specific measures to address project implementation bottlenecks. This was especially important given the rapid and unpredictable changes and challenges in the project’s implementation arising from the politically fragile context in Mali. The results matrix in the ISRs proved to be a reliable instrument in achieving consensus regarding the actions needed to resolve implementation obstacles as they arose. M&E Quality Rating Substantial 10. Other Issues a. Safeguards The project was assigned a Category B rating, having triggered two Bank safeguard policies: (a) Environmental Assessment (OP/BP 4.01) and (b) Involuntary Resettlement (OP/BP 4.12). Although it was assessed at the appraisal stage that the expected environmental and social impacts of the infrastructure investments would be minimal, mitigation measures still needed to be established. An Environment and Social Management Framework and a Resettlement Policy Framework were prepared. These called for a systematic screening process for the investment components, including the selection in clusters of the distribution infrastructure and the expansion and rehabilitation of transmission investments. The ISRs consistently rated safeguards compliance as satisfactory, given the limited social and environment incidents during project implementation. The ICR (paragraph 78) indicates that: “At project closure, the project had no pending claims from communities and individuals affected by the project and was therefore in full compliance of environmental and social safeguards.” b. Fiduciary Compliance Page 12 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) Financial management (FM) risks were rated substantial at appraisal. As one mitigation measure, the Project Implementation Unit (PIU) was given the responsibility for overall coordination of the FM and accounting system. The project contracted a qualified FM specialist to strengthen PIU’s FM capacity. Also, a new computerized accounting system was set up, customized to project needs and the information requirements of the financial statements. Despite initial disbursement delays for to weak technical capacity and inadequate readiness for implementation, FM was rated satisfactory throughout the project period. No FM issues were raised in the ISRs and aide-memoires. Annual audits were prepared on time, including the final external audit. None of the audits were qualified. Procurement risks were rated high at project entry. As a mitigating measure, it was initially proposed that EDM-SA and the Water and Electricity Regulatory Commission (CREE) oversee procurement and regulation but this did not materialize since both bodies lacked the necessary skills and expertise. This capacity had to be outsourced. Although there were delays in initiating procurement transactions, the ICR rated procurement as satisfactory overall (ISRs had some moderately satisfactory ratings), despite some cases of weak performance. c. Unintended impacts (Positive or Negative) --- d. Other --- 11. Ratings Reason for Ratings ICR IEG Disagreements/Comment Moderately Outcome Moderately Satisfactory Satisfactory Moderately Bank Performance Moderately Satisfactory Satisfactory Quality of M&E Substantial Substantial Quality of ICR --- Substantial 12. Lessons The ICR provided the following key lessons (with some adaptation in wording): A focused project design produces better results than a complex project with multiple objectives. The project’s positive achievements can be traced to having allocated most of the project’s resources to reinforcing the transmission and distribution networks (90 percent of project funds). The remaining funds were assigned to supporting energy efficiency activities, capacity building, and institutional strengthening. The PDO was also formulated such that the desired results focused on increasing electricity access and efficiency. The Bank team also gave consistent Page 13 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) emphases to electricity infrastructure on the ground, which in turn also helped achieve efficiency gains. More diverse and lower achievement levels may have been obtained if the project had been expanded to include power utility reform or the expansion of rural electrification. The World Bank can achieve results in fragile environments, if it can move more quickly toward a systematic approach containing a set of dedicated procedures and guidance for projects in fragile countries. The 2012 security crisis in Mali was overwhelming and initially pointed towards the Bank’s closing up its operations until security was fully restored. The new World Bank arrangements that allow operations in fragile environments can be effective if they are timely and rapidly implemented. The preparation of an Interim Strategy Note (ISN) based on a sustained dialogue with the key stakeholders in Mali and in the donor community, the overhaul of the country’s portfolio, and the restructuring of the project all contributed to the success of this project. Past experiences from operations completed in Mali and elsewhere should be fully captured to ensure that new procedures tailored to the FCV context are adopted and become effective. For activities to successfully contribute to the project objective, they should be highly consistent with the borrower’s immediate needs and priorities. This project's performance in building the transmission and distribution infrastructure was satisfactory because that activity was in line with the Government’s plan to expand energy access. Despite political instability and changes in the power utility management, all resources devoted to this activity were used to deliver the expected output. Activities supporting the energy efficiency and innovation (loss reduction and solar- powered energy) were less successful, because they were not on the priority plate of the borrower. Activities to be supported by a World Bank project should be carefully researched and tested for close strategic alignment with the Government’s key priorities before their selection as project components. Inadequate readiness impedes the timely launching of project implementation. Implementation readiness means that the project implementing agency must have (i) all stakeholders on board at approval, and (ii) the required expertise (including fiduciary management and safeguards) by the time the project reaches effectiveness. In the case of this project, all stakeholders were not ready for implementation, as EDM-SA became effectively operational after the creation of an implementation unit three years after effectiveness (2002). Procurement expertise and technical experts were also lacking until the recruitment of a private firm and competitive staff to assist EDM-SA to procure and install transmission and distribution equipment. 13. Assessment Recommended? No 14. Comments on Quality of ICR The ICR was well focused on providing evidence for the performance ratings. The Results Chain (Table 1) was well prepared, although the critical assumptions missed one factor of performance related to adequate operational readiness and implementation capacity. Indeed, the assumption that this was in place proved erroneous, as weak institutional capacity led to many implementation delays. The ICR was sufficiently candid Page 14 of 15 Independent Evaluation Group (IEG) Implementation Completion Report (ICR) Review Mali Energy Support Project SIL (FY09) (P108440) and analytical. Its structure and substance complied closely with the Bank's guidelines for ICR preparation. However, it was overly detailed and had repetitious information, thus leading to 31 pages of the main text, or double the length expected of ICRs. Many of the lessons were useful as they were broadly applicable and replicable but a few lessons were specific just to this project. a. Quality of ICR Rating Substantial Page 15 of 15