FOR OFFICIAL USE ONLY Report No: PAD00133 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON PROPOSED CREDITS IN THE AMOUNT OF US$40 MILLION TO GRENADA SDR 23 MILLLION (US$30 MILLION EQUIVALENT) TO THE CO-OPERATIVE REPUBLIC OF GUYANA SDR 22.9 MILLION (US$30 MILLION EQUIVALENT) TO SAINT LUCIA PROPOSED GRANTS IN THE AMOUNT OF SDR 2.6 MILLION (US$3.3 MILLION EQUIVALENT) TO THE ORGANISATION OF EASTERN CARIBBEAN STATES COMMISSION SDR 0.6 MILLION (US$0.7 MILLION EQUIVALENT) TO THE CARIBBEAN CENTRE FOR RENEWABLE ENERGY AND ENERGY EFFICIENCY US$1,791,900 TO SAINT LUCIA FROM THE GLOBAL ENVIRONMENT FACILITY AND A PROPOSED LOAN IN THE AMOUNT OF US$8.5 MILLION TO GRENADA FROM THE CLEAN TECHNOLOGY FUND FOR A CARIBBEAN EFFICIENT AND GREEN-ENERGY BUILDINGS PROJECT February 6, 2025 Energy and Extractives Global Practice Latin America and Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective November 30, 2024) Currency Unit = US Dollar (US$) SDR 0.76 = US$1 US$1.31 = SDR1 FISCAL YEARS Caribbean Centre for Renewable Energy and Energy Efficiency, Grenada, and Guyana: January 1 – December 31 Organisation of Eastern Caribbean States: July 1 – June 30 Saint Lucia: April 1 – March 31 Regional Vice President: Carlos Felipe Jaramillo Regional Director: Maria Marcela Silva Country Director: Lilia Burunciuc Practice Manager: Gabriela Elizondo Azuela Task Team Leader: Jari Väyrynen, Nguyet Anh Pham ABBREVIATIONS AND ACRONYMS AGD Accounting General Department GRENLEC Grenada Electricity Services Limited AM Accountability Mechanism GRS Grievance Redress Service (World Bank) AWP Annual Work Plan GWh Gigawatt-hours (1 billion Wh) BESS Battery Energy Storage System HLO High Level Objective BTU British Thermal Unit IBRD International Bank for Reconstruction and Development CAPEX Capital Expenditure ICR Implementation Completion and Results Report CARICOM Caribbean Community IDA International Development Association CCEFCF Canada Clean Energy and Forests Climate Facility IDB Inter-American Development Bank Caribbean Centre for Renewable Energy and Energy IE Implementing Entity CCREEE Efficiency IEA International Energy Agency CDB Caribbean Development Bank IFR Interim unaudited Financial Report Caribbean Efficient and Green-Energy Buildings IPCC Intergovernmental Panel on Climate Change CEGEB Project IPF Investment Project Financing CO2 Carbon dioxide IPP Independent Power Producer CO2eq Carbon dioxide equivalent IRENA International Renewable Energy Agency COVID Covid Virus Disease LAC Latin America and the Caribbean CPF Country Partnership Framework LED Light-Emitting Diode CARICOM Regional Organisation for Standards and CROSQ LMP Labor Management Procedure Quality LUCELEC Saint Lucia Electricity Services Limited CTF Clean Technology Fund M&V Measurement and Verification DA Designated Account MBIA Maurice Bishop International Airport DBIS Demerara-Berbice Integrated System Ministry of Climate Resilience, the Environment and DFIL Disbursement and Financial Information Letter MCRERE Renewable Energy DPV Distributed Photovoltaic MFD Maximizing Finance for Development DRE Distributed Renewable Energy Ministry of Infrastructure and Physical Development, Public DSI Design, Supply and Installation MIPDPUCAT Utilities, Civil Aviation and Transportation E&S Environmental and Social Ministry of Infrastructure, Ports, Transport, Physical MIPTPDUR ECCU Eastern Caribbean Currency Union Development and Urban Renewal EE Energy Efficiency MOF Ministry of Finance EPC Engineering, Procurement, and Construction MTR Mid-Term Review ERR Economic Rate of Return NAP National Adaptation Plan ESA Electricity Supply Act NCC National Coordinating Committee ESCO Energy Service Company NDC Nationally Determined Contributions ESCP Environmental and Social Commitment Plan NEP National Energy Policy ESMAP Energy Sector Management Assistance Program NPV Net Present Value ESMF Environmental and Social Management Framework NURC National Utilities Regulatory Commission ESMP Environmental and Social Management Plans The Organization for Economic Cooperation and OECD ESS Environmental and Social Standards Development FIRR Financial Internal Rate of Return OECS Organisation of Eastern Caribbean States FM Financial Management OECSC Organisation of Eastern Caribbean States Commission FNPV Financial Net Present Value OHS Occupational health and safety GCRF Global Crisis Response Framework OPEX Operating Expenditure GDP Gross Domestic Product PAU Project Accounting Unit GEA Guyana Electricity Agency PDO Project Development Objective (s) GEF Global Environment Facility PIU Project Implementation Unit GHG Greenhouse Gas Emissions POM Project Operations Manual GoG Government of Grenada PP Procurement Plan GPL Guyana Power and Light PPG Project Preparation Grant PPS Pooled Procurement Service SEP Stakeholder Engagement Plan PPSD Project Procurement Strategy for Development SIDS Small Islands Developing States PrDO Program Development Objective SoP Series of Projects PUC Public Utility Commission SPC Shadow Price of Carbon PURC Public Utilities Regulatory Commission STEM Science, technology, engineering, and math PV Photovoltaic STEP Systematic Tracking of Exchanges in Procurement RE Renewable Energy SVG Saint Vincent and the Grenadines RF Resettlement Framework TA Technical Assistance RPF Regional Partnership Framework TAC Technical Advisory Committee RSC Regional Steering Committee WASCO Water and Sewerage Company Inc. SAI Office of the Director of Audit WB World Bank SCADA Supervisory Control and Data Acquisition XCD Eastern Caribbean Dollar The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) TABLE OF CONTENTS DATASHEET ........................................................................................................................... ii I. STRATEGIC CONTEXT ...................................................................................................... 1 A. Regional and Country Context .......................................................................................................... 1 B. Sectoral and Institutional Context .................................................................................................... 2 C. The “Series-of-Projects” Approach ................................................................................................... 5 D. Relevance to Higher-Level Objectives .............................................................................................. 6 II. PROJECT DESCRIPTION.................................................................................................... 7 A. Project Development Objective ....................................................................................................... 7 B. Project Components ........................................................................................................................ 8 C. Project Beneficiaries ...................................................................................................................... 11 D. Results Chain .................................................................................................................................. 11 E. Rationale for Bank Involvement and Role of Partners................................................................... 12 F. Lessons Learned and Reflected in the Project Design ................................................................... 13 III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 14 A. Institutional and Implementation Arrangements ........................................................................... 14 B. Results Monitoring and Evaluation Arrangements ......................................................................... 16 C. Sustainability ................................................................................................................................... 17 IV. PROJECT APPRAISAL SUMMARY ................................................................................... 17 A. Technical, Economic and Financial Analysis ................................................................................... 17 B. Fiduciary .......................................................................................................................................... 19 C. Environmental and Social and Legal Operational Policies .............................................................. 20 D. Grievance Redress Services ............................................................................................................ 21 V. KEY RISKS...................................................................................................................... 21 VI. RESULTS FRAMEWORK AND MONITORING.................................................................... 23 ANNEX 1: Implementation Arrangements and Support Plan ................................................. 37 i The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) @#&OPS~Doctype~OPS^dynamics@padbasicinformation#doctemplate DATASHEET BASIC INFORMATION Project Operation Name Beneficiary(ies) Grenada, Guyana, St. Caribbean Efficient and Green-Energy Buildings Project Lucia Environmental and Social Risk Operation ID Financing Instrument Classification Investment Project P179519 Moderate Financing (IPF) GEF Focal Area Climate Change @#&OPS~Doctype~OPS^dynamics@padprocessing#doctemplate Financing & Implementation Modalities [ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC) [✓] Series of Projects (SOP) [ ] Fragile State(s) [ ] Performance-Based Conditions (PBCs) [✓] Small State(s) [ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country [ ] Project-Based Guarantee [ ] Conflict [ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster [ ] Alternative Procurement Arrangements (APA) [ ] Hands-on Expanded Implementation Support (HEIS) Expected Approval Date Expected Closing Date 28-Feb-2025 30-Jun-2031 Bank/IFC Collaboration No ii The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Proposed Development Objective(s) To save energy, increase the use of renewable energy in public buildings and facilities, and enhance the regulatory framework for investments in energy efficiency and renewable energy in participating Caribbean countries. Components Component Name Cost (US$) Component 1: Investment in EE measures and distributed RE systems in the 112,350,000.00 public sector Component 2: Regulatory Framework Development 3,700,000.00 Component 3: Support to Pooled Procurement and Project Implementation, 15,822,852.00 Capacity-Building and Gender @#&OPS~Doctype~OPS^dynamics@padborrower#doctemplate iii The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Organizations Borrower: Caribbean Center for Renewable Energy and Energy Efficiency, Co-operative Republic of Guyana, Grenada, Organisation of Eastern Caribbean States Commission, Saint Lucia Contact Title Telephone No. Email Mohammad Rafik Nagdee Executive Director mohammad.nagdee@ccreee.org Ashni Singh Senior Minister, Office of 5922273992 asingh@finance.gov.gy the President, with Responsibility for Finance Mike Sylvester Permanent Secretary 473-440-2928 PS@mof.gov.gd Chamberlain Emmanuel Head of Environmental 758-285-5766 chamberlain.emmanuel@oecs.int Sustainability Division Didacus Jules Director General 7584556327 oecs@oesc.int Francis Fontenelle Permanent Secretary 758-468-5503 ps.finance@govt.lc Implementing Agency: Grenada Electricity Services Ltd. , Grenada Ministry of Climate Resilience, the Environment and Renewable Energy, Guyana Energy Agency, St Lucia Ministry of Infrastructure, Ports, Energy, and Labour Contact Title Telephone No. Email Leroy A. E. Abraham Chief Executive Officer 473-440-2097 labraham@grenlec.com Clive Hosten General Manager 4734070255 chosten@grenlec.com Peron Johnson Permanent Secretary 440-0366 Ps@cre.gov.gd Mahender Sharma Chief Executive Officer 5926245905 mahender.sharma@hotmail.com Lenita Joseph Permanent Secretary 1-758-468-4303 ljoseph@govt.lc @#&OPS~Doctype~OPS^dynamics@padfinancingsummary#doctemplate PROJECT FINANCING DATA (US$, Millions) Maximizing Finance for Development Is this an MFD-Enabling Project (MFD-EP)? Yes iv The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Is this project Private Capital Enabling (PCE)? Yes SUMMARY Total Operation Cost 131.87 Total Financing 131.87 of which IBRD/IDA 104.00 Financing Gap 0.00 DETAILS World Bank Group Financing International Development Association (IDA) 104.00 IDA Credit 90.00 IDA Grant 4.00 IDA Shorter Maturity Loan (SML) 10.00 Non-World Bank Group Financing Trust Funds 18.87 Canada Clean Energy and Forest Climate Facility Trust Fund 8.58 Clean Technology Fund 8.50 Global Environment Facility (GEF) 1.79 Other Sources 9.00 Caribbean Development Bank 9.00 IDA Resources (US$, Millions) v The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Country/Region Regional Institution Credit Grant SML Guarantee Total Window Guyana 20.00 0.00 10.00 0.00 30.00 National Performance-Based 0.00 0.00 10.00 0.00 10.00 Allocations (PBA) Regional 20.00 0.00 0.00 0.00 20.00 Other 0.00 0.70 0.00 0.00 0.70 Regional 0.00 0.70 0.00 0.00 0.70 St. Lucia 30.00 0.00 0.00 0.00 30.00 Regional 20.00 0.00 0.00 0.00 20.00 National Performance-Based 10.00 0.00 0.00 0.00 10.00 Allocations (PBA) Caribbean 0.00 3.30 0.00 0.00 3.30 Regional 0.00 3.30 0.00 0.00 3.30 Grenada 40.00 0.00 0.00 0.00 40.00 National Performance-Based 20.00 0.00 0.00 0.00 20.00 Allocations (PBA) Regional 20.00 0.00 0.00 0.00 20.00 Total 90.00 4.00 10.00 0.00 104.00 @#&OPS~Doctype~OPS^dynamics@paddisbursementprojection#doctemplate vi The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Expected Disbursements (US$, Millions) WB Fiscal 2025 2026 2027 2028 2029 2030 2031 2032 Year Annual 1.80 4.68 10.96 35.27 41.13 25.41 2.34 1.28 Cumulativ 1.80 6.48 17.44 52.71 93.84 119.25 121.59 122.87 e @#&OPS~Doctype~OPS^dynamics@padclimatechange#doctemplate PRACTICE AREA(S) Practice Area (Lead) Contributing Practice Areas Energy & Extractives CLIMATE Climate Change and Disaster Screening Yes, it has been screened and the results are discussed in the Operation Document @#&OPS~Doctype~OPS^dynamics@padrisk#doctemplate SYSTEMATIC OPERATIONS RISK- RATING TOOL (SORT) Risk Category Rating 1. Political and Governance ⚫ Moderate 2. Macroeconomic ⚫ Moderate 3. Sector Strategies and Policies ⚫ Moderate 4. Technical Design of Project or Program ⚫ Moderate 5. Institutional Capacity for Implementation and Sustainability ⚫ Substantial vii The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) 6. Fiduciary ⚫ Substantial 7. Environment and Social ⚫ Moderate 8. Stakeholders ⚫ Moderate 9. Overall ⚫ Moderate @#&OPS~Doctype~OPS^dynamics@padcompliance#doctemplate POLICY COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No Does the project require any waivers of Bank policies? [ ] Yes [✓] No ENVIRONMENTAL AND SOCIAL Environmental and Social Standards Relevance Given its Context at the Time of Appraisal E & S Standards Relevance ESS 1: Assessment and Management of Environmental and Social Risks and Relevant Impacts ESS 10: Stakeholder Engagement and Information Disclosure Relevant ESS 2: Labor and Working Conditions Relevant ESS 3: Resource Efficiency and Pollution Prevention and Management Relevant ESS 4: Community Health and Safety Relevant ESS 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant ESS 6: Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources viii The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) ESS 7: Indigenous Peoples/Sub-Saharan African Historically Underserved Not Currently Relevant Traditional Local Communities ESS 8: Cultural Heritage Relevant ESS 9: Financial Intermediaries Not Currently Relevant NOTE: For further information regarding the World Bank’s due diligence assessment of the Project’s potential environmental and social risks and impacts, please refer to the Project’s Appraisal Environmental and Social Review Summary (ESRS). @#&OPS~Doctype~OPS^dynamics@padlegalcovenants#doctemplate LEGAL Legal Covenants Sections and Description Institutional Arrangements: Grenada, Guyana, Saint Lucia, Organisation of Eastern Caribbean States, Caribbean Centre for Renewable Energy and Energy Efficiency | Section I.A of Schedule 2 to the Financing/Grant Agreements. | The Recipient, by no later than 90 days from the Effective Date, shall establish, and thereafter maintain adequate representation and participation in the Regional Steering Committee and the Regional Technical Advisory Committee. Institutional Arrangements: Grenada, Guyana, Saint Lucia | Section I.A of Schedule 2 to the Financing Agreements | The Recipient (for Grenada, the Recipient and GRENLEC (the Project Implementing Entity)), by no later than ninety (90) days after the Effective Date, shall establish and thereafter maintain throughout the Project implementation: (i) a National Coordinating Committee; and (ii) National Project Implementation Unit led by a project manager with qualifications, experience, and terms of reference satisfactory to the Association; both with composition, powers, functions, staffing, facilities and other resources acceptable to the Association. Institutional Arrangements: Organisation of Eastern Caribbean States | Section I.A of Schedule 2 to the Grant Agreement. | The Recipient, by no later than ninety (90) days after the Effective Date, shall establish and thereafter maintain throughout a Regional Project Implementation Unit with composition, powers, functions, staffing, facilities and other resources acceptable to the Association. Institutional Arrangements: Caribbean Centre for Renewable Energy and Energy Efficiency | Section I.A of Schedule 2 to the Grant Agreement. | The Recipient, by no later than ninety (90) days after the Effective Date, shall establish and thereafter maintain throughout the Project implementation a technical team with composition, powers, functions, staffing, facilities and other resources acceptable to the Association. Institutional Arrangements: Grenada, Guyana, Saint Lucia, Organisation of Eastern Caribbean States, Caribbean Centre for Renewable Energy and Energy Efficiency | Section I.A of Schedule 2 to the Financing/Grant Agreement. | The Recipient shall enter into a memorandum of understanding for the purpose of establishing a collaboration framework for the activities described in Parts 2.4 and 3.4 of the Project, including specifically, on the use of the OECS, through the Regional Implementation Unit, and with the support of the Caribbean Centre for Renewable Energy and Energy Efficiency, to prepare the bidding documents and related actions for the Participating Caribbean Countries’ procurement of goods, works, and services for the EE and RE investments under Part 1.2(a) of the Project; the terms and conditions of said MOU shall acceptable to the Association, and the Recipient shall maintain such collaboration framework during the Project implementation, in a manner satisfactory to the Association. ix The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Subsidiary Agreement: Grenada and GRENLEC (Project Implementing Entity) | Section I.B of Schedule 2 to the Financing Agreement. | The Recipient shall make part of the proceeds of the Financing available to the Project Implementing Entity under a subsidiary agreement between the Recipient and the Project Implementing Entity, under terms and conditions approved by the Association and in accordance with the legal agreement. Project Operations Manual: Grenada, Guyana, Saint Lucia, Organisation of Eastern Caribbean States, Caribbean Centre for Renewable Energy and Energy Efficiency | Section I.B / Section I.C (for Grenada) of Schedule 2 to the Financing/Grant Agreements. | The Recipient (and for Grenada, both the Recipient and the Project Implementing Entity – for Parts 1.2(b) and 3.2(b)) shall prepare and adopt the Project Operations Manual (“POM”) in accordance with the legal agreement and thereafter, shall ensure that the Recipient’s respective parts of the Project are carried out in accordance with the arrangements and procedures set out in the POM; and shall not amend, abrogate or waive any provision of the POM unless the Association has agreed otherwise in writing. Subproject Eligibility and Requirements: Grenada, Guyana, Saint Lucia | Section I.C / Section I.D (for Grenada) of Schedule 2 to the Financing. | The Recipient shall conduct the necessary energy assessments, screening potential public buildings and facilities, and perform energy investment audits in accordance with the procedures acceptable to the Association and detailed in the POM prior to the carrying out of any Sub-projects. • The Recipient shall ensure that a proposed Sub-project shall be selected on the basis of the eligibility criteria and requirements set forth in the legal agreement as further detailed in the POM. • The Recipient shall, prior to the approval of a proposed Subproject involving a public building or facility used for security purposes: (a) notify the Association of such proposed Subproject and afford the Association a reasonable opportunity to assess any risks related to the carrying out of the proposed Subproject; and (b) at the Association’s request, develop a risk mitigation plan for the carrying out of such proposed Subproject, in form and substance acceptable to the Association. Annual Work Plan: Grenada, Guyana, Saint Lucia, Organisation of Eastern Caribbean States, Caribbean Centre for Renewable Energy and Energy Efficiency | Section I.D / Section I.E (for Grenada) of Schedule 2 to the Financing/Grant Agreements | By not later than November 30 annually, the Recipient (and for Grenada, both the Recipient and the Project Implementing Entity) shall prepare and furnish to the Association an annual work plan during the implementation of the Project containing relevant Project activities and expenditures proposed to be included in the Project in the following fiscal year, including a specification of the sources of financing; and thereafter shall ensure that the Project is implemented with due diligence and efficiency in accordance with such work plan as shall have been approved by the Association. Environmental and Social Standards: Grenada, Guyana, Saint Lucia, Organisation of Eastern Caribbean States, Caribbean Centre for Renewable Energy and Energy Efficiency. | Section I.E / Section I.F (for Grenada) of Schedule 2 to the Financing/Grant Agreements |The Recipient (and for Grenada, both the Recipient and the Project Implementing Entity) shall (i) ensure that the Project is carried out in accordance with the Environmental and Social Standards and the ESCP (including the management tools and instruments referred to therein) in a manner acceptable to the Association, and (ii) not amend, abrogate, repeal, suspend or waive any of their provisions unless the Association agrees otherwise, and report on their status of implementation as part of the project reports. Associated Facilities: Grenada | Section I.F of Schedule 2 to the Financing Agreement and Section I.D of Schedule to the Project Agreement.| The Recipient shall, and shall cause the Project Implementing Entity to, cause the Solar PV Entity, through the relevant contractual arrangements, to ensure that the installation of the solar photovoltaic systems associated with the Project is carried out with due diligence and efficiency, and in conformity with appropriate technical, financial, economic, environmental and social standards and practices, including with the applicable requirements of the ESCP and the Environmental and Social Standards , all in a manner acceptable to the Association. • The Recipient shall, and shall cause the Project Implementing Entity to, ensure, inter alia, that: (a) prior to the Solar PV Entity carrying out of works which involve resettlement (as determined by the Association), Affected Persons are x The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) compensated at replacement costs, resettled and provided with assistance in accordance with the site-specific resettlement plans to be prepared in accordance with the Resettlement Framework; and (b) complaints related to land acquisition are addressed in a timely and adequate manner, as further detailed in the respective site-specific resettlement plans as approved by the Association. • The Recipient shall, and shall cause the Project Implementing Entity to ensure that the Solar PV Entity allows the Association’s representatives to visit the construction site in which the installation of the solar photovoltaic systems is being carried out. Mid-term review: Grenada, Guyana, Saint Lucia, Organisation of Eastern Caribbean States, Caribbean Centre for Renewable Energy and Energy Efficiency | Section II.B of Schedule 2 to the Financing Agreements. | The Recipient (and for Grenada, both the Recipient and the Project Implementing Entity) shall, not later than 30 months after the Effective Date, prepare and furnish to the Association a mid-term report in form and substance satisfactory to the Association. @#&OPS~Doctype~OPS^dynamics@padconditions#doctemplate Conditions Type Citation Description Financing Source the Memorandum of Understanding (“MOU”) CCREEE IDA Financing has been duly executed by Effectiveness Agreement, Article IV all parties to the MOU IBRD/IDA 4.01.(a) under terms and conditions acceptable to the Association (b) the Project Operations Manual has been adopted Agreement, Article IV Effectiveness by the Recipient in form IBRD/IDA 4.01.(b) and substance satisfactory to the Association. The Financing Agreement has been executed and Grenada CTF Loan delivered and all conditions Effectiveness Trust Funds Agreement Article IV 4.01 precedent to its effectiveness have been fulfilled. The CTF Loan Agreement has been executed and delivered and all conditions Grenada IDA Financing precedent to its Effectiveness Agreement, Article IV IBRD/IDA effectiveness or to the right 4.01.(a) of the Recipient to make withdrawals under it (other than the effectiveness of xi The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) this Agreement) have been fulfilled. The Memorandum of Understanding (“MOU”) Grenada IDA Financing has been duly executed by Effectiveness Agreement, Article IV all parties to the MOU IBRD/IDA 4.01.(b) under terms and conditions acceptable to the Association; The Project Operations Manual has been adopted Grenada IDA Financing by the MCRERE and the Effectiveness Agreement, Article IV Project Implementing IBRD/IDA 4.01.(c) Entity in form and substance satisfactory to the Association. The Financing Agreement have been executed and delivered and all conditions precedent to their effectiveness or to the right Guyana CCEFCF Financing Effectiveness of the Recipient to make Trust Funds Agreement, Article IV 4.01. withdrawals under them (other than the effectiveness of this Agreement) have been fulfilled. The execution and delivery of this Agreement on Guyana CCEFCF Grant behalf of the Recipient Effectiveness Agreement, Article IV Trust Funds have been duly authorized 4.01.(a) or ratified by all necessary governmental action. The CCEFCF Financing Agreement has been executed and delivered and all conditions precedent to Guyana CCEFCF Grant its effectiveness or to the Effectiveness Agreement, Article IV right of the Recipient to Trust Funds 4.01.(b) make withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled. xii The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) the CCEFCF Financing Agreement and the GE- SIDS Grant Agreement have been executed and delivered and all conditions Guyana IDA Financing precedent to its Effectiveness Agreement, Article IV effectiveness or to the right IBRD/IDA 4.01.(a) of the Recipient to make withdrawals under them (other than the effectiveness of this Agreement) have been fulfilled; The Memorandum of Understanding (“MOU”) Guyana IDA Financing has been duly executed by Effectiveness Agreement, Article IV all parties to the MOU IBRD/IDA 4.01.(b) under terms and conditions acceptable to the Association. The Project Operations Guyana IDA Financing Manual has been adopted Effectiveness Agreement, Article IV by GEA in form and IBRD/IDA 4.01.(c) substance satisfactory to the Association. The Memorandum of Understanding (“MOU”) OECS IDA Financing has been duly executed by Effectiveness Agreement, Article IV all parties to the MOU IBRD/IDA 4.01.(a) under terms and conditions acceptable to the Association; and the Project Operations OECS IDA Financing Manual has been adopted Effectiveness Agreement, Article IV by the Recipient in form IBRD/IDA 4.01.(b) and substance satisfactory to the Association. The GEF Grant Agreement have been executed and Saint Lucia IDA Financing delivered and all conditions Effectiveness Agreement, Article IV precedent to its IBRD/IDA 4.01.(a) effectiveness or to the right of the Recipient to make withdrawals under them xiii The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) (other than the effectiveness of this Agreement) have been fulfilled. the Memorandum of Understanding (“MOU”) Saint Lucia IDA Financing has been duly executed by Effectiveness Agreement, Article IV all parties to the MOU IBRD/IDA 4.01.(b) under terms and conditions acceptable to the Association; and The Project Operations Saint Lucia IDA Financing Manual has been adopted Effectiveness Agreement, Article IV by MIPTPDUR in form and IBRD/IDA 4.01.(c) substance satisfactory to the Association. The execution and delivery of this Agreement on Saint Lucia GEF Grant behalf of the Recipient Effectiveness Agreement, Article IV Trust Funds have been duly authorized 4.01.(a) or ratified by all necessary governmental action. The Financing Agreement has been executed and delivered and all conditions precedent to its Saint Lucia GEF Grant effectiveness or to the right Effectiveness Agreement, Article IV Trust Funds of the Recipient to make 4.01.(b) withdrawals under it (other than the effectiveness of this Agreement) have been fulfilled. for Eligible Expenditures under Category (3), until and unless the Co-financing Grenada IDA Financing Agreement has been Agreement, Section executed and delivered and Disbursement IBRD/IDA III.B.1(b) of Schedule 2 to all conditions precedent to the Agreement its effectiveness or to the right of the Recipient to make withdrawals under it have been fulfilled. xiv The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) for Eligible Expenditures under Category (1), until and unless the Co-financing Grenada CTF Loan Agreement has been Agreement – Section executed and delivered and Disbursement Trust Funds IV.B.1(c) of Schedule 2 to all conditions precedent to the Agreement its effectiveness or to the right of the Recipient to make withdrawals under it have been fulfilled xv The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) I. STRATEGIC CONTEXT A. Regional and Country Context 1. The countries in the Caribbean Community (CARICOM) share several physical characteristics that make their economic development vulnerable to disruption. The small size of these countries, in terms of land area and population, limits their ability to take advantage of cost savings possible due to economies of scale. Geographical isolation, particularly for the islands, restricts their scope for economic diversification and international trade. Economic activity is concentrated in a few sectors, most notably tourism. This sector, on average, contributes to over 40 percent of the region’s gross domestic product (GDP) and accounts for about 45 percent of total employment. 2. The three CARICOM countries to participate in the Caribbean Efficient and Green-Energy Buildings Project (CEGEB) – Grenada, Guyana, and Saint Lucia – hereafter referred to as “the three participating countries,” vary in population, GDP per capita and economic activities. Grenada and Saint Lucia have populations under 200,000 and economic activity is heavily oriented toward the service sector, 62.9 percent in Grenada and 70.3 percent in Saint Lucia. The per capita income of Saint Lucia is US$13,031, or about 34 percent higher than that of Grenada, which is US$9,689. Also, both countries are net importers of petroleum products. In contrast to these two countries, Guyana has a much higher population (approximately 800,000), with industry making up the largest share of economic activity, 50 percent of total GDP. Guyana imports petroleum products but is a net exporter of fossil fuels due to the country’s production and export of crude oil. 3. All three participating countries have experienced major weather-related disasters, resulting in damage costs equivalent to large amounts of GDP. Located in the Atlantic hurricane belt, Caribbean countries are highly exposed to recurrent extreme weather events such as hurricanes, floods, and rising sea levels, all of which are exacerbated by climate change. Grenada and Saint Lucia have, respectively, the 24th and 51st highest Climate Risk Index for 2000-2019, among 180 countries, while Guyana ranks 119th, and thus are highly vulnerable to natural disasters and extreme weather events. Disasters from extreme weather are estimated to have cost the Eastern Caribbean countries an average of 3.6 percent of GDP between 1997 and 2016. In 1980, Hurricane Allen caused a loss equivalent to 70 percent of Saint Lucia’s GDP. After Hurricane Ivan struck Grenada in 2004, the resulting losses were valued at 210 percent of the country’s GDP. In 2021, Guyana experienced the worst flooding in two decades. It affected 52,000 households, causing damage to homes, crops, and buildings1 . Flooding remains a major threat in Guyana, where 90 percent of the population lives on the low-lying plain bordering the Atlantic Ocean, the county’s agricultural region. In addition, most countries in the region are exposed to risks of earthquakes and volcanic eruptions. 4. Grenada’s economy continues to recover from severe economic contraction in 2020, due to a substantial decline in tourism resulting from the COVID-19 pandemic. In 2020, Grenada’s GDP per capita fell to US$8,437, from US$9,888 in 2019. It rose closer to the 2019 level in 2022, reaching US$9,6892 with tourist arrivals in that year at 87 percent of their 2019 level. Debt as a proportion of GDP rose to 73.9 percent of GDP in 2020,3 the first year of the pandemic. By 2022, it had dropped to 63.9 percent.4 Debt is forecast to decline to 55 percent by 2025. Nevertheless, Grenada remains in debt distress, with outstanding arrears of about US$37 million to official bilateral creditors. Policy priorities include reforming the Fiscal Responsibility Framework, improving the efficiency of the tax system and public spending, and increasing the 1 https://reliefweb.int/report/guyana/guyana-floods-dref-final-report-operation-ndeg-mdrgy003 2 World Bank, GDP per capita (current US$)-Grenada. https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=GD 3 Ministry of Finance, Economic Development, Physical Development, Public Utilities and Energy, 2020 Economic Review and Medium-Term Outlook, November 2020. https://nowgrenada.com/wp-content/uploads/2020/12/2020-Economic-Review-and-Medium-Term-Outlook_FINAL_Nov20.pdf 4 Ministry of Finance, Grenada 2022 Economic Review, November 2022. https://www.finance.gd/docs/2022/2022%20Annual%20Economic%20Review.pdf Page 1 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) value added by the tourism sector. The downside risks are the volatile nature of the tourism market, increases in food and fuel prices, the persistent threat of natural disasters, and a slowing of the Citizenship by Investment program. 5. Guyana has experienced rapid economic growth in recent years, driven primarily by the discovery of oil, which the country started producing in 2019. This new driver of economic growth combined with solid growth in the country’s non-oil economy resulted in a tripling of GDP per capita, from US$6,477 in 2019 to over US$18,199 in 2022. A strong fiscal position allowed Guyana to contain debt despite the onset of the COVID-19 pandemic and a non-oil GDP contraction of 7.3 percent in 2020. The economy is expected to continue to grow at an average annual rate of nearly 25 percent over the medium term, boosted by increased oil production. Debt is forecast to stabilize at 24-26 percent of GDP between now and 2025. Managing the large revenue inflows from oil sales presents the greatest policy challenge, along with enhancing resistance to climate shocks and volatility in commodity prices, which could erode economic growth. 6. Saint Lucia’s GDP growth, estimated at 3.6 percent in 2023, is well above its pre-pandemic trend rate of 1.4 percent. The country’s economy is gradually recovering, with tourist arrivals increasing by 79 percent between 2021 and 2022. They rose a further 11.5 percent in the first quarter of 2023 but were still 16 percent below the 2019 level. The economy is expected to have recovered to pre-pandemic growth levels in 2024. Debt fell from its pandemic peak of 95 percent of GDP to 74 percent in 2022 but is forecast to rise slightly by 2025, to 76.5 percent. Fostering a sustainable and inclusive economic recovery presents a significant challenge in the face of multiple risks, notably higher global food and energy prices and the need to maintain tight fiscal discipline if public debt is to be reduced. 7. Poverty in all three participating countries has been historically high but there are signs that it has been decreasing in recent years. In Grenada, the official poverty rate declined from 38 percent to 25 percent between 2008 and 2018, though a methodology change makes these two figures not strictly comparable. In Guyana, the poverty rate fell from 61 percent to 48.4 percent between 2006 and 2019, based on a daily income level of US$5.50 at purchasing power parity in 2011. A further 35 percent of the population remained vulnerable to falling into poverty in 2019, having a daily income of between US$5.50 and US$13.00. Saint Lucia’s official poverty rate dipped from 29 percent in 2005 to 25 percent in 2016. Nevertheless, all three countries have experienced elevated income inequality during the past two decades, with Gini coefficients moving from 0.46 to 0.52 between 2006 and 2019 in Guyana; from 0.37 to 0.40 between 2008 and 2018 in Grenada; and from 0.43 to 0.51 between 2005 and 2016 in Saint Lucia. 8. Regional integration has helped overcome some of the challenges faced by small economies in the Caribbean region and there is potential for further cooperation, particularly in facilitating cooperation for greater energy efficiency (EE) and renewable energy (RE) development. CARICOM has extensive experience in developing regional policies and regulations in multiple sectors, including in the energy sector. The Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE) is an organization established in 2018 as the specialized energy agency under CARICOM, to operate autonomously within the framework of the CARICOM Energy Policy. CCREEE supports member countries with the identification, development, and implementation of technology, policy, regulatory, and other “fit for purpose” solutions that can accelerate their just energy transition. To date, the Centre has supported the development of the existing CARICOM Regional Energy Efficiency Building Code and has been assisting countries with the development of Integrated Resource and Resilience Plans for their electricity sectors. Grenada and Saint Lucia are members of the Organisation of Eastern Caribbean States (OECS), which consists of 11 member states with similar physical and cultural characteristics as well as common development goals. OECS members also belong to the Eastern Caribbean Currency Union, with the Eastern Caribbean Dollar as a common currency. B. Sectoral and Institutional Context 9. The high dependence of the Caribbean region on costly imported petroleum products for energy supply threatens energy security and economic competitiveness. Petroleum is the main source of primary energy in the Caribbean and of the 15 countries in CARICOM, 12 are net oil importers. Petroleum imports by these countries account Page 2 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) for about 90 percent of petroleum consumed, far above the global average of 21 percent.5 This dependence makes the countries in the region vulnerable to supply and price volatility in global energy markets, particularly the price shocks that have occurred in recent years with international crude oil prices fluctuating between US$66 to US$100 per barrel. Regarding the three participating countries, fuel imports as a share of total merchandise imports, on average, are around 16.2 percent for Grenada, 22.8 percent for Guyana, and 16.8 percent for Saint Lucia, compared to 11.2 percent for the Latin America and Caribbean (LAC) region as a whole and 15.7 percent for middle-income countries as a group.6 10. Electricity systems are small, isolated, and highly dependent on diesel-fired electricity generation. Grenada’s power system has an installed capacity of about 53 MW and peak demand of 36 MW. Guyana, in 2022, had 191 MW of installed capacity in the Demerara-Berbice Integrated System (DBIS) and 18 MW of installed capacity in isolated systems. Saint Lucia’s installed capacity was 88 MW and peak demand at 62MW in 2022. About 96 percent of the electricity generating capacity in the Caribbean consists of diesel-fired power plants. Guyana produces crude oil but is lacking a domestic oil refinery and depends on imports of refined petroleum products. In all three countries, the dependence on diesel fuel for power generation and the inability to take advantage of economies of scale in operations and procurement has weakened energy security and resulted in high operational costs. 11. Electricity prices in the Caribbean Region are among the highest in the world. They range from about US$0.25- 0.40 per kWh, compared to an average of about US$0.16 per kWh in the United States, US$0.18 per kWh in Central America and Mexico, and US$0.15 across LAC.7 Regarding the three participating countries, residential electricity tariffs are US$0.37/kWh8 in Grenada, US$0.20/kWh9 in Guyana, and US$0.34/kWh10 in Saint Lucia. In addition to high tariff levels, the volatility of oil prices requires unpredictable tariff adjustments, often passed on as a fuel surcharge, making it difficult for governments and firms to budget accurately. 12. Electricity supply in the three participating countries has been constrained by aging equipment, inadequate maintenance, low investment, a shortage of technical skills for management, and climate extremes. It is important to address all these factors in small power grids because the failure of a single generating unit can result in widespread power loss. In Grenada, most of the generating units will reach the end of their economic life in the next two to four years. About a third of Guyana’s installed capacity in the DBIS is at least 25 years old and half of those in the isolated systems has been classified as unreliable. Saint Lucia’s power system has not added new generating capacity since 2012. In addition to capacity constraints due to technical factors, severe weather conditions threaten power systems and their fuel supply. Both Grenada and Saint Lucia are vulnerable to strong winds and landslides that result from hurricanes and Guyana’s power system is prone to flooding. Flooding can cause submersion of electrical equipment, causing short-circuits, wear or destruction of equipment. Drought and heatwaves reduce power generation efficiency and reliability and cooling water availability, as well as increase transmission and distribution losses, while increasing demand due to the need for ambient cooling and pumping of water. Hurricanes and strong wind gusts can cause power outages and impassable paths to access the damages to conduct repair works and quick restoration of electricity. The costs of weather damage in Caribbean countries have been high. For example, the cost to rebuild the power grid of Grenada following devastation by Hurricane Ivan in 2004, was equivalent to about six percent of the country’s GDP.11 5 Atlantic Council, A Roadmap for the Caribbean’s Energy Development, September 2023. 6 The average percentages are based on the period 2018-2020 for Grenada, Guyana, LAC and middle-income countries as a group and 2016-2020 for Saint Lucia. The percentages are based on total value of merchandise imports in the corresponding periods amounting to US$ 589 million for Grenada, US$ 3,620 for Guyana, and US$ 504 million for Saint Lucia. These figures are based on World Bank data for 2022. 7 The range of electricity prices in the Caribbean is from AskWBCaribbean: Talking Energy, Finding Solutions, the average electricity rate for the United States is from chooseenergy.com, the rates for Central America and Mexico are from Hub de Energía America Latina y El Caribe. 8 Grenlec rates and fees - https://grenlec.com/customers/ratesandfees/, for first 180kWh/month 9 Guyana Power and Light rates and tariffs - https://gplinc.com/bill/rates-and-tariffs/ for demand below 75kWh/month, including standing charge. 10 Lucelec rates and service standards - https://www.lucelec.com/content/rates-service-standards 11 It is estimated that 80% of GRENLEC’s distribution system was damaged and a 6 -month period was necessary to bring back power to all customers. Grenada, Macro Socio Economic assessment of the damages caused by Hurricane Ivan, September 7th 2004. Page 3 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) 13. Improvements in EE and the installation of distributed photovoltaic (DPV) systems are key elements in the planned least-cost expansion of power systems in the Caribbean and critical to build resilience against climate change. The energy intensity in CARICOM countries, estimated at 4,618 British Thermal Unit (BTU) per US$, is significantly higher than the average for countries in the LAC Region, estimated at 4,003 BTU per US$ of GDP. Increasing EE in buildings, installing DPV systems, and investment in battery storage can help replace power from national power utilities, lower energy costs and reduce or defer investment needed in new generation, transmission, and distribution infrastructure. At the same time, investment in these systems supports the diversification of the power matrix away from fossil fuels, enhancing energy security and increasing resilience to climate shocks. Furthermore, in Caribbean countries, electricity from DPV systems generally is less expensive than from diesel-fired generation units. The estimated levelized cost of electricity from rooftop DPV systems ranges from US$0.13-0.2812 compared to about US$0.20-0.2813 for electricity from diesel-fired generators. However, limits on the permitted size of DPV systems and related tariff schemes are constraints to major DPV expansion. These constraints will need to be addressed to obtain the full benefits of investment in these systems. 14. Grenada, Guyana, and Saint Lucia have basic legal and regulatory frameworks in place for the electricity sector and continue to address regulatory gaps that need to be filled for a green-energy transition. In Grenada, the Public Utilities Regulatory Commission (PURC), which began operation in July 2019, is responsible for developing the regulatory framework to implement the Electricity Supply Act (ESA) of 2016. The PURC has developed a modern tariff-setting methodology along with regulations on competitive procurement for RE generation. In April 2021, the PURC launched a self-generation program with size limitations depending on customer category, to promote the scaling up of RE. To date, over 260 permits have been approved by PURC for a total of 3.5 MW. In Guyana, the GEA was created in 1994 to support the development of indigenous RE resources. The Guyana Public Utility Commission (PUC) regulates the electricity sector under the Public Utilities Commission Act of 1999 and the Electricity Sector Reform Act. These acts have several amendments to enable development of distributed RE generation (DRE). In Saint Lucia, the Electricity Act, amended in 2016, made it possible for independent power producers (IPPs) to generate electricity from RE and established the National Utilities Regulatory Commission (NURC). Further, the Government of Saint Lucia is drafting a new Electricity Act (EA) with a comprehensive list of secondary regulations to facilitate its implementation. The new EA and regulations were submitted for stakeholder consultations in October 2024 and are expected to be submitted for approval by the Parliament in 2025. 15. There is substantial potential for improving EE and expanding RE through the installation of rooftop DPV systems in the public building stock. In Grenada, public buildings account for about 10 percent of total electricity consumption. Potential savings from improved EE are estimated at 12.5 percent of their energy consumption.14 Audits of public buildings conducted in Grenada in 2017, financed by the Caribbean Development Bank (CDB) and in 2022-2023 in Grenada and Saint Lucia, with support from the World Bank, indicate that investments in efficiency measures and rooftop DPV systems are economically viable. The combined payback period for EE improvements in the surveyed buildings was estimated to be less than three years. EE measures and DPV systems are highly attractive in Grenada and Saint Lucia in the short-to-medium term, given limited land availability, due to mountainous terrain, for installing large-scale, centralized, solar-powered electricity generation. Guyana has reported receiving 317 applications for an aggregate of 7.5 MW of DRE generation, of which 222 applications were for government systems, totaling 4.2 MW. 16. Despite the advantages of DPV systems, small and isolated power grids find it difficult to absorb, integrate and deliver solar power to end users. There are several significant barriers to the expansion of these systems in Grenada, 12 IRENA Renewable Power Generation Costs in 2022 https://www.irena.org/Publications/2023/Aug/Renewable-Power-Generation-Costs-in-2022; OECD Projected Costs of Generating Electricity 2020 - https://www.oecd-nea.org/jcms/pl_51126/low-carbon-generation-is-becoming-cost-competitive-nea-and-iea-say-in-new-report; Lazard 2023 Levelized Cost of Energy+ - https://www.lazard.com/research-insights/2023-levelized-cost-of-energyplus/ 13 Sustainable Energy Paths for the Caribbean – https://publications.iadb.org/publications/english/viewer/Sustainable_Energy_Paths_for_the_Caribbean.pdf. 14 WB estimates-Benefits of energy efficiency in Grenada, March 2021. Page 4 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Guyana and Saint Lucia. These include aging equipment, limited spinning reserve, outdated networks and lack of automated dispatch, forecasting and system operations. Moreover, power utilities in the Caribbean Region have limited knowledge and experience in the planning and operation of solar-powered electricity generation. They are reluctant to integrate a significant volume of this generation without adequately upgrading system operations to ensure supply security and reliability. At the same time, the current pilot net-metering schemes in several countries do not provide adequate financial incentives for power utilities to make such investments. 17. The supply chain for energy-efficient equipment, DRE equipment, and related services is weak. Surveys of the Caribbean islands in 2022 indicated that there was no energy service company (ESCO) active in the region. There were suppliers of lighting and air-conditioning equipment and installers of RE systems, but most were based in Barbados and Saint Lucia. Grenada lacks any such services, but the number of EE and RE suppliers is growing. Guyana is better placed for suppliers of EE equipment and services due to recent rapid economic growth and efforts by the GEA to support installation of light-emitting diode (LED) lighting in rural areas. Furthermore, the Caribbean region has a small skilled labor force, which varies in size considerably by country. Interviews with service providers have revealed that despite some improvements, such as support for LED lighting, progress in expanding EE has been limited. 18. Investment in a sustainable energy pathway offers the Caribbean countries substantial economic benefits . A study by the Inter-American Development Bank (IDB)15 has indicated net economic benefits of US$16.1 billion from investments in a combination of RE, improvements in EE, and increased resilience of energy infrastructure. Of this total, 38 percent of benefits would come from greater EE, 35 percent from the switch to RE and 27 percent from more resilient energy infrastructure. Barriers to EE include lack of financing, limited and uncompetitive supply of equipment, incomplete information, and problems of agency, in which the beneficiary of a measure is not the agent of its introduction. Standards to promote EE and regulatory frameworks to encourage investment are deficient or not enforceable. RE faces similar difficulties. Also, financing mechanisms and replicable business models to attract private capital, as well as capacity to manage public procurement, are largely absent. 19. Women are under-represented in the Caribbean energy sector’s labor force, particularly in management and technical positions. Men account for 80 percent of the labor force in the energy sector. Across the region, women occupy only 17 percent of senior leadership positions and 9 percent of executive positions.16 Globally, women account for 22 percent of the oil and gas workforce and about 32 percent of the RE workforce. While the Caribbean has a high representation of women working in public service positions, there is evidence that they are significantly underrepresented in science, technology, engineering, and math (STEM) fields and at many levels in technical energy- related jobs. Technical positions require one or more associate degrees in electrical, civil, or mechanical engineering. In addition, apprenticeships or internships are critical, as there are limited entry-level positions available in Grenada, Guyana, or Saint Lucia. Without apprenticeships, it can be difficult for new graduates to obtain their first technical job. C. The “Series-of-Projects” Approach (a) Rationale 20. The Project is designed as a Series of Projects (SoP) to tackle constraints for increased uptake of distributed RE and EE. The first binding constraint is the combination of high cost and poor availability of goods and services for improving EE and developing RE resources due to the small size of power systems. Thus, there are few entities or individuals likely to be interested in developing improvements to efficiency or self-generation. The second binding constraint is the lack of capacity within individual countries to develop and manage programs for EE and RE. Therefore, project design focuses on facilitating regional cooperation to prepare projects of a size that will allow participating countries to benefit from 15 IDB Sustainable Energy Paths for the Caribbean (2020) https://publications.iadb.org/publications/english/viewer/Sustainable_Energy_Paths_for_the_Caribbean.pdf 16 Ernst & Young, Women in Power and Utility Index. Page 5 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) economies of scale, while also making it possible to pool capacity, thus freeing the scarce resources to tackle country- specific policy and implementation issues. The SoP format is well-suited to this design because it will enhance regional integration and multiply the benefits of a coordinated sustained development and maintenance of capacity at the regional level, while giving individual countries the ability to pursue national-level activities best suited to their circumstances. 21. Grenada, Guyana, and Saint Lucia have common characteristics in the energy sector and meet readiness criteria for the first project in the SoP. All three countries are dependent on imported petroleum products for electricity generation. Their power systems are small and aging. They lack an effective supply chain for goods and services needed to attain objectives for greater EE and substantial development of RE. Suitable land is scarce or costly, making investment in utility-scale RE less viable than decentralized systems. The expected economic benefits from both improvements in EE and the development of DRE generation, in the form of avoided investment in the electricity sector, is substantial. While Guyana may eventually take advantage of its oil and gas production for domestic purposes, reductions in demand on any of its existing systems now will help ensure more economically efficient investment in the future. (b) Program Development Objective 22. The Program Development Objective (PrDO) is to save energy, increase the use of renewable energy in public buildings and facilities, and enhance the regulatory framework for investments in EE and RE in participating Caribbean countries. The progress towards achieving the PrDO will be measured by outcome indicators that are the same for each operation in the SoP, as shown in Table 1. (c) Program Framework 23. The SoP is expected to include at least two operations over the ten-year period of 2024-2034. Following the first operation with Grenada, Guyana, and Saint Lucia, other countries may join subsequent operations when they meet readiness criteria. Readiness will be based on a balanced scorecard encompassing country commitment, economic viability of proposed investments, domestic capacity, and willingness to subscribe to centralized program management and procurement led by the OECSC. All operations in the SoP will share the same PDO. They will have a similar scope of work at the national level, which may be adjusted as necessary, and will apply similar implementation arrangements as the regional platform created for the first operation. Any follow-up operation will benefit from the capacity-building, investment planning and preparation support to the regional platform under the initial operation. D. Relevance to Higher-Level Objectives 24. The SoP objectives are consistent with the World Bank Group’s Regional Partnership Framework (RPF) for Eastern Caribbean States (FY22-25) (Report #160349-LAC) and the Country Partnership Framework (CPF) for Guyana (FY23-26) (Report #168273-GY). Under the RPF’s High Level Objective (HLO), “Strengthening resilience to climate change and other shocks,” the Project will contribute to achieving two subordinate objectives. The first subordinate objective, “Enhance environmental protection and climate change response,” will be achieved by reducing the use of diesel oil for electricity generation and increasing the adaptive capacity and resilience of power systems. The second subordinate objective, “Improve fiscal, debt and public management,” will be attained by lowering the electricity costs of public services and expenditure on imported fuel. Under HLO 3 of the RPF, “More and Better Jobs,” the Project will contribute to attaining Objective 5, “Enhance the Enabling Environment for Businesses,” by leveraging and expanding the regional market for EE and RE products and services. These activities will create local and regional jobs for installation and maintenance services, thus lowering costs of these products and services. The Project also addresses HLO 2, “More and Better Jobs”, and HLO 3, “Enhanced Climate and Environmental Resilience)”, of the Guyana’s CPF—through the objectives “Enhance the Competitiveness of Guyana’s Non-Oil Economy” and “Strengthen Flood Resilience and Climate Change Adaptation”. 25. The Project will support the World Bank Group’s Maximizing Finance for Development (MFD) approach in the participating countries. By reducing regulatory barriers to EE and RE investment under Component 2, and potentially Page 6 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) lowering costs through economies of scale under Component 1, the Project will spur investments, especially in solar PVs, by private investors. Further, the investment in battery storage systems and the associated transmission infrastructure, at the Maurice Bishop International Airport (MBIA) in Grenada, under subcomponent 1.2.b, will enable the development, with private capital, of up to 15 MWp of utility-scale solar PVs. The achievement of this development, estimated to cost US$28 million, will be measured by the results indicator that tracks the amount of RE enabled under the Project. 26. The Project is aligned with the participating countries’ updated Nationally Determined Contributions (NDC), National Adaption Plans (NAPs), and National Energy Policies. On mitigation, according to the latest NDCs submitted to the United Nations Framework Convention on Climate Change, by 2030, both Grenada and Saint Lucia have targets set lower than emissions in 2010, by 40 percent17 and 7 percent,18 respectively. Guyana’s NDC is equivalent to a 70 percent reduction in 2030 against base year emissions.19 All three countries have energy policies designed to achieve lower emissions through improvements in EE and a major expansion in the development of RE. The Project will support these objectives by instituting EE measures and installing distributed RE (DRE) systems to meet the energy needs of public buildings. Thus, the Project will contribute to substantial GHG emissions reduction through reduced energy demand from the electrical grid, currently heavily dependent on fossil fuels. 27. On adaptation, the Project is consistent with the NAPs of the participating countries in two areas: (i) enhanced infrastructure-based climate adaptation and (ii) strengthened preparedness for climate variability and extremes. The Project will support these objectives by developing DRE solutions for public buildings, including battery energy storage system (BESS) for critical public facilities such as hospitals, emergency services, etc. DRE systems will reduce reliance of public buildings on electricity service from the power grid, which is vulnerable to extreme weather conditions such as strong wind, landslide, and floods. Also, the Project will enhance climate resilience of these buildings, by allocating funds to structural repair and strengthening before installing rooftop solar-PV systems or other retrofits. II. PROJECT DESCRIPTION A. Project Development Objective PDO Statement 28. The PDO is to save energy, increase the use of renewable energy in public buildings and facilities, and enhance the regulatory framework for investments in energy efficiency and renewable energy in participating Caribbean countries. PDO Level Indicators 29. The proposed PDO-level indicators are as follows: Table 1: Key Results and Indicators Key Results Indicators A) Energy savings in public buildings and facilities Lifetime energy savings from EE improvement under the Project (GWh). RE capacity enabled (MW) (Corporate Scorecard Indicator) B) Increased use of RE in public buildings and Lifetime RE generation from PV systems installed in public buildings and facilities under facilities the Project (GWh) Lifetime Greenhouse Gas (GHG) emissions reduced or avoided from EE and RE For both A and B above investments under the Project (tons of CO2 equivalent (CO2eq)) (Climate Indicator) 17 Grenada second NDC 2020 18 Saint Lucia Second NDC 19 https://op.gov.gy/index.php/2021/11/02/president-irfaan-alis-statement-at-cop-26/ Page 7 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Key Results Indicators Share of value of contracts awarded under the regional pool procurement out of total contract value under the Project (Percentage) C) Regulatory framework for investments in EE Harmonized regional and national regulations, standards to promote EE and RE and RE enhanced investment developed and adopted for implementation under the Project (Number) B. Project Components 30. Overview. The Project will support investment and technical assistance for EE retrofitting and the installation of DRE systems in public buildings and other facilities in Grenada, Guyana, and Saint Lucia. These structures may include central and regional administrative buildings, universities and schools, hospitals and clinics, stadiums, airports, and water supply and sewage utilities. To benefit from economies of scale, the participating countries will procure these EE and DRE investments in public buildings through a process called pooled procurement with support from the OECSC. The Project will also include technical assistance to address regulatory and technical constraints to EE and RE investments, and build capacity in the planning, implementation, and sustainable operation of these investments. The Project has three components, as described below. Following this description, Table 2 shows allocation of project costs US$131.87 million and financing, by component, for each of the three participating countries and two regional organizations. 31. Component 1: Investment in EE measures and distributed RE systems in the public sector (estimated cost of US$112.35 million, with financing consisting of: a US$86 million loan from IDA a US$1.65 million grant provided by the GEF, a US$8 million loan from the CTF, a US$7.7 million loan from the Canadian Clean Energy and Forest Climate Facility (CCEFCF), and a US$3 million grant and US$6 million loan co-finance from the CDB. This component will finance investments in EE retrofits and the installation of new DRE systems20 in public buildings and other facilities, along with technical assistance for identification, design, and implementation supervision of the EE and RE investment. It will also support grid integration of DPV systems.21 The EE retrofits may include active and passive EE measures, improvements in building-control systems and safe disposal of used equipment and materials.22 The Project envisages investment in EE and DRE for about 500 buildings, across three participating countries, to be implemented in batches until all allocated funds have been utilized. Component 1 will build resilience in the country’s power system by reducing reliance on imported fossil fuels, through substantial EE measures and integration of distributed RE into the system. Distributed RE and battery storage, and utility scale BESS, will also build resilience against power outages in the grid due to extreme climate events by supporting a continuous and more reliable electricity service. Subproject eligibility criteria at the screening stage will include confirmation from the energy assessment/audits that the proposed measures will result in an estimated energy savings of 20 percent or more and a maximum payback period of 20 years for the overall EE and DRE investment. Component 1 will consist of three subcomponents, one for each of the participating countries, as described below. • Subcomponent 1.1: Saint Lucia’s investment in EE measures and distributed RE systems (estimated costs of US$26.95 million with the financing consisting of US$25.3 million loan from IDA and US$1.65 million grant from GEF). This subcomponent will support the implementation of subprojects to improve EE performance and increase use of RE in selected public buildings and facilities in Saint Lucia. It will also provide technical and operational assistance for identification, design, construction, and operation phases of the subprojects. A GEF grant will co- finance activities focused on subprojects in Saint Lucia Water and Sewerage Company Inc. (WASCO) and selected 20 The DPV systems for critical buildings may include BESS to enhance resilience against power cuts and support optimal delivery of solar electricity to the power grid. 21 The activities will include technical assistance, capacity-building and investment to enable efficient integration of the systems to the grid and reliable grid operation by the utilities. The investment may support upgrading of the distribution grid, BESS installation, and modern energy-management solutions and systems for utilities. 22 Active EE measures include the replacement of inefficient equipment and appliances, or installation of new efficient ones. Passive EE measures may include windows and shutters, shading, insulation, cool surfaces, etc. Passive EE measures will bring adaption Co-Benefits, protecting building users from extreme heat waves. DRE systems in Grenada and Saint Lucia will be designed to resist strong winds and Category 5 hurricanes. Up to 15 percent of the investment may be allocated to measures that ensure the integrity of buildings prior to retrofits. Page 8 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) grid integration to support investment in DPVs. The subcomponent will also enhance resilience to climate risks and strengthen the adaptive capacity of the country's power system. • Subcomponent 1.2: Grenada’s investment in EE measures, distributed RE systems and variable RE Integration (estimated cost of US$51.6 million with the financing consisting of a US$34.6 million loan from IDA, a US$8 million loan from CTF, a US$3 million grant and a US$6 million loan co-financing from CDB). This subcomponent will be divided into two parts as follows:  Subcomponent 1.2.a: It will support the Implementation of subprojects to improve EE and increase use of RE in selected public buildings and facilities in Grenada along with the provision of technical and operational assistance for identification, design, construction, and operation phases of the subprojects (estimated costs of US$25.6 million with financing all from the IDA credit). This sub-component will also include selected investments for the integration of DPVs in the power grid.  Subcomponent 1.2.b. It will cover technical support and investment for: (i) installation of utility-scale BESS at the MBIA and (ii) associated transmission system upgrade for connecting the BESS to the national grid. The estimated financing allocation for US$26 million as follows: (i) US$4 million loan from CTF and US$3 million grant and US$6 million loan from the CDB for BESS, and (ii) US$9 million loan from IDA and US$4 million loan from CTF for transmission system upgrades. GRENLEC is the implementing agency for this activity. The transmission system upgrade will include: (i) a new transmission substation at MBIA to house the BESS; (ii) upgrading of an existing substation at Grand Anse and two short 33 kV transmission lines (one overhead and one underground) connecting these two substations. 23 • Subcomponent 1.3: Guyana’s investment in EE measures and distributed RE systems (estimated cost of US$33.8 million, with the financing consisting of US$26.1 million loan from IDA and US$7.7 loan from CCEFCF). This sub- component will support the implementation of subprojects to improve EE and increase use of RE in selected public buildings and facilities in Guyana. It will also provide technical and operational assistance for identification, design, construction, and operation phases of the subprojects. These activities will also enhance resilience to climate risks and strengthen the adaptive capacity of the country's power system. 32. Component 2: Regulatory Framework Development (estimated cost of US$3.7 million with the financing consisting of US$3 million IDA credit, and US$0.7 million IDA grant). This component will have four subcomponents. Subcomponents 2.1, 2.2, and 2.3 will support the development of regulatory frameworks for scaling up EE and RE investments in Saint Lucia, Grenada, and Guyana, respectively, and promoting harmonization with relevant regional regulations and rules, with each country receiving an estimated US$1 million from an IDA credit for this development. The subcomponent for each country may include: (i) support for the development of tariff policies and regulations on DPVs, such as net billing, grid codes, and a standardized contract for RE; (ii) policies and regulations and guidelines for EE building retrofits, EE equipment and appliances; Minimum Energy Performance Standards, EE labeling, electric vehicles and charging infrastructure, and existing buildings’ benchmark regulations, and (iii) other activities, including climate risk assessments, studies and capacity building, to develop and strengthen the national regulatory frameworks in harmonization with regional regulations and rules. Subcomponent 2.4, with an estimated US$0.7 million IDA grant will support multiple regional regulatory and policy development activities. An assessment was carried out to confirm CCREEE’s eligibility to receive the IDA grant from Regional Window and its capability to carry this sub-component. The activities will include: (i) updating of the existing CARICOM Regional Energy Efficiency Building Code; (ii) design of a 23The investment in Subcomponent 1.2.b will enable integration of the distributed RE to be installed under Sub-component 1.2.a and of utility-scale solar PV projects at the MBIA, to be developed with private investors in a separate investment initiative to be launched in parallel with the CEGEB Project. The construction of a new underground transmission line (estimated cost of US$7 million vs US$0.8 million for the overhead line) provides a resilient option again the risks of hurricanes and floods and creates redundancy for the BESS connection to the grid. This design is in line with the GoG’s requirement for making the grid resilient to natural disasters. Page 9 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) regional waste-management strategy and regulation for waste streams from EE and RE investments; (iii) the implementation of other relevant aspects of regional regulatory development; dissemination and capacity building activities to facilitate EE and RE market expansion; and (iv) provision of technical support to the pooled procurement process. 33. Component 3: Support to Pooled Procurement and Project Implementation, Capacity-Building and Gender Program (estimated cost of US$15.82 million with the financing consisting of US$11 million loan and US$3.3 million grant from IDA; US$0.14 million grant from GEF, US$0.5 million loan from CTF, and US$0.5 million loan and US$0.38 million grant from CCEFCF). Subcomponents 3.1, 3.2, and 3.3 will support project implementation in Saint Lucia, Grenada, and Guyana, respectively, as well as the gender-related training program in Guyana. Subcomponent 3.4 will support pooled procurement and communications with stakeholders, as well as the establishment of a regional Project Implementation Unit (PIU) and related capacity building. • Subcomponent 3.1: Saint Lucia’s Project Implementation Support, and Capacity-Building (estimated cost of US$3.84 million with the financing from US$3.7 million loan from IDA and US$0.14 million grant from GEF). This subcomponent will support strengthening the capabilities of the national PIU, stakeholder engagement and capacity-building in planning, execution and operation of EE and distributed RE investment. It will also provide technical and operational assistance for coordination, financial management, procurement, environmental and social risk and impact management, monitoring and evaluation, and auditing of the Project. • Subcomponent 3.2. Grenada’s Project Implementation Support, and Capacity-Building (estimated costs of US$4.9 million with the financing of US$4.4 million from IDA and US$0.5 million from CTF). It will support strengthening the national PIU to manage investment in: (i) EE measures and distributed RE systems in public buildings (with US$3.4 million from IDA); and (ii) the installation of a utility-scale BESS and the upgrading of the transmission system (with US$1 million from IDA and US$0.5 million from CTF). This support will encompass: (i) stakeholder engagement and capacity-building in planning, execution and operation investment; (ii) provision of technical and operational assistance for coordination, financial management, procurement, environmental and social risk and impact management; (iii) monitoring and evaluation, and (iv) auditing of the Project. • Subcomponent 3.3. Guyana’s Project Implementation Support, Capacity-Building and Gender Program (estimated costs of US$3.78 million, with the financing of US$2.9 million loan from IDA, and US$0.5 million loan and US$0.38 million grant from the CCEFCF. It will support strengthening the capabilities of the national PIU, stakeholder engagement and capacity-building for: (i) planning, execution and operation of EE and distributed RE investment; (ii) implementation of a gender program to increase female competency and employment in the energy sector; and (iii) provision of technical and operational assistance for coordination, financial management, procurement, environmental and social risk and impact management, monitoring and evaluation, and audit of the Project. • Subcomponent 3.4. Support to Pooled Procurement, Communication and Capacity-Building (estimated cost of US$3.3 million, financed with a grant from IDA). This subcomponent will support: (i) establishment and operation of a regional PIU; (ii) provision of technical assistance for implementing a pooled procurement for the participating countries; (iii) creation of stakeholder communication programs at the regional level; (iv) provision of capacity- building support for procurement and dissemination of regional regulations on EE and RE; and (v) facilitation of harmonized regulations, standards and tools for EE and DRE. The OECSC is the implementing agency for this sub- component. Page 10 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Table 2. Cost Estimates and Proposed Financing, in US$ million C. Project Beneficiaries 34. The direct beneficiaries of the Project include citizens of the three participating countries who rely on retrofitted public buildings for services, national utilities, regulatory agencies, and regional organizations benefiting from capacity- building and knowledge-sharing activities, as well as women seeking technical jobs in the energy sector who receive training provided by the Project. Indirect beneficiaries include professionals and workers with skills in engineering and equipment installation for EE and solar PV systems, taxpayers benefiting from lower electricity bills due to EE and RE investments and expanded national and regional markets for energy equipment and services contributing to GDP growth. D. Results Chain 35. The Project’s Theory of Change is illustrated in Figure 1. Page 11 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Figure 1. Theory of Change E. Rationale for Bank Involvement and Role of Partners 36. Unlocking the EE and RE potential of the Caribbean region is the cornerstone of the Bank’s assistance strategy for a resilient energy transition at regional and country levels. The Project has emerged from a solid technical assistance program and investment operations with the countries in the region. Table 3 shows the Bank’s investment program to support renewable energy, resilience, and regulatory framework development for the energy sector in the region. Table 3: Investment Projects Supporting the Energy Transition of Caribbean Countries Project Number Project Name Status P101414 Eastern Caribbean Energy Regulatory Authority Project Closed in 2018 P153404 Solar PV Demonstration and Scale Up Project in Grenada, Saint Lucia, and Saint Closed in 2019 Vincent and the Grenadines. P149522 Belize Energy Resilience and Adaptation Project Closed in 2024 P162149 Dominica Geothermal Risk Mitigation Project Ongoing (approved in 2019) P161316 Saint Lucia Renewable Energy Sector Development Project Ongoing (approved in 2021) P179845 Dominica Geothermal Risk Mitigation 2 Project Ongoing (approved in 2024) P179520 Belize Reliant and Resilient Energy System Project Ongoing (approved in 2025) 37. In addition to the projects noted, the World Bank has provided technical assistance to accelerate the development of EE measures and RE. The governments of Grenada and Saint Lucia have received technical assistance to update national energy policies and regulatory frameworks for the energy sector, such as development of new Grid Code Page 12 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) and draft EE Act in Grenada and finalization of tariff regulation under the new Electricity Bill in Saint Lucia. More recently, the World Bank has provided technical assistance to Saint Lucia and Grenada to develop a near-term strategy and action plan for EE measures and RE options through preliminary energy audits and surveys for more than 65 buildings that are government-owned and occupied. The results of these audits have informed the Project’s design approach and have created potential pipelines for the Project in both countries. In Guyana, this Project will complement existing EE and RE initiatives by other development partners, such as the IDB. 38. The Bank has extensive international experience designing and implementing projects for EE and DPV systems and can leverage its convening power to align key stakeholders and attract a larger pool of knowledge. As a result of this experience, the Bank has the capacity to incorporate best practices and technologies for sustainable investments in EE improvement and DPV development. It has experience with the implementation of replicable business models, high- quality technology and innovation, cost efficiency, enhanced impact, and robust monitoring systems. The World Bank has the capability to bring together all stakeholders in the value chain (public institutions, equipment suppliers, and service providers, and building owners) to help overcome financing barriers, demonstrate impact, increase transparency, enhance coordination, establish a credible system for monitoring and verifying energy savings achieved, and create trust in the initiatives, providing a pathway for market transformation through the EE and DPV investments. 39. The Bank also has experience in regional investment projects in the energy sector worldwide, including ongoing regional projects with the OECS countries and can facilitate a pooled procurement approach for EE and RE investments in the region. The experience has shown that procurement of equipment and services through contracts of a larger value across the region can result in significant cost savings over procurement through contracts of a smaller value by individual countries, especially if these countries are small islands with a limited market and implementation capacity. The Bank is therefore strategically positioned to work with regional organizations and individual countries to implement a pooled procurement approach for these types of energy investments through this SoP. This coordinated approach can accelerate regional integration by generating economies of scale, reducing costs, and setting up new technological and price benchmarks for EE and DPV development, which would be extended to all consumers in the region. 40. The Project will be jointly co‐financed by the CDB to support activities to be implemented by GRENLEC as part of Sub-component 1.2(b) in Grenada. The CDB aims to support the Government and GRENLEC in strengthening the ability of the power system to integrate more RE, mitigate GHG emissions, and increase the system’s climate resilience. These priorities closely resonate with World Bank priorities and make for high synergies emanating from the partnership. In the highly unlikely event that the joint co‐financing from the CDB does not materialize, this will be addressed by an appropriate scaling down of the sub-component and/or reallocation of funds within the broader Grenada sub- component, and modification of the results framework through restructuring; this could also be addressed through additional financing from IDA if such resources may be available and/or conversion of the CDB joint co-financing into parallel co-financing, with the CDB and the World Bank financing separate contracts under Sub-component 1.2(b). F. Lessons Learned and Reflected in the Project Design 41. Carefully designed and implemented regional investment projects to improve EE and support the transition to RE can have substantial benefits to the energy sector and the broader economy. Public-sector investments in EE measures can substantially lower the operational costs of public buildings and facilities. These cost savings create fiscal space to support development priorities in other sectors. The benefits of EE investments demonstrated in the public sector can encourage similar investments by the private sector. The expansion of interest in EE measures eventually results in the creation of domestic markets for EE services and equipment. These new markets often lead to expanded employment in the energy sector. The installation of DPV systems, in addition to being cost-effective, can enhance energy security, especially when coupled with BESS, helping improve resilience against electricity interruptions in the power grid. These systems also provide a buffer against price shocks that result from the grid’s heavy dependence on imported petroleum Page 13 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) products, which have a history of price volatility. Adequate, reliable electricity supply is particularly important to maintaining a competitive tourism sector, which constitutes a large portion of GDP in many Caribbean countries. 42. A project design focused on clearing multiple barriers to EE and DPV development simultaneously is likely necessary to expand EE and DPV systems sufficiently for a substantial economic development impact in Caribbean countries. The development of EE measures and DPV systems faces financial, technical and institutional barriers. The small size of most EE and RE projects in the Caribbean results in the high cost of procuring equipment and services. Public institutions in the Caribbean lack incentives for energy savings and the capability to prepare and manage EE and DPV investment projects. Furthermore, they tend to have limited budgets for investment and lack access to commercial financing. Regulatory frameworks generally need adjustment to provide financial incentives for EE and DPV development. Energy auditing to prepare EE investment projects for buildings requires standardization, for quality control, with Measurement & Verification (M&V) Protocols linked to building typology. Because power utilities may see DRE systems as a threat to their business, information campaigns for raising stakeholder awareness of the benefits that EE measures and DRE systems can provide, are critical for success. The importance of addressing multiple barriers at the same time derives from World Bank findings on the performance of multiple projects for improving EE24 and a regional project in the Caribbean for developing DPV systems.25 43. To ensure the timely achievement of development objectives, an implementation framework for regional EE and DPV investment projects should have strong oversight capacity, allow flexibility in meeting national needs, and be responsive to the concerns of key stakeholders. The PIU should have a clear mandate, well-trained staff, and a robust marketing plan for engaging the private sector in the development of EE measures and DPV systems. In addition, projects for EE and DPV development should have an oversight committee of stakeholders. This committee should include power utilities, as their ability to integrate an intermittent energy source into the grid, while ensuring system reliability, is essential to the expansion of DPV projects. On the technical side, grid interconnection requirements often need simplification to facilitate connection of DPV systems. Regarding financial management, to encourage high-quality work and accountability, payments to contractors for DPV systems should be performance based. The Project provides a strong implementation framework that takes account of the aforementioned factors. At the regional level, it will support policy and regulatory development as well as the operational aspects of pooled procurement. At the national level, the Project will provide institutional strengthening for managing components, aligned with the needs of each participating country. The Project also will provide technical support for the integration of distributed RE into the power grid, a detailed results monitoring and evaluation framework, and a comprehensive plan for stakeholder engagement. III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 44. Overall institutional arrangements. The Project will be implemented at the national and regional levels, under a regional coordination framework. The implementation arrangements are designed to: (i) ensure strong ownership of the PDO and the implementation of components by the participating countries, (ii) facilitate synergy and economies of scale, and (iii) strengthen coordination among Caribbean countries at the regional level. At the national level, the line ministry and agency responsible for the energy sector in each of the participating countries will be responsible for the Project’s execution, in close collaboration with the Ministry of Finance (MOF) and other ministries associated with project sub- components. A regional steering committee (RSC) with senior official representatives appointed by the participating countries, as well as by OECSC and CCREEE, will be created to provide strategic oversight of Project implementation. The arrangements for the three participating countries and regional organizations are discussed below, followed by Figure 2, 24 Jas Singh, Energy Efficiency in the Public Sector, Live Wire, The World Bank, Washington DC, 2018. 25 ESMAP, From Sun to Roof to Grid: Distributed PV in Energy Sector Strategies . The World Bank, Technical Report 017/21. Washington, DC, 2021. Page 14 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) which illustrates the Project’s framework for implementation and governance. 45. Grenada. A new PIU will be created for all activities under the Project. Accounting staff from the Project Accounting Unit (PAU) in the Accounting General Department (AGD) and procurement staff from Project Coordination Unit within the MOF will be assigned to the CEGEB Project. The PIU will be established under a National Coordinating Committee (NCC), chaired by the Grenada Ministry of Climate Resilience, the Environment and Renewable Energy (MCRERE). MCRERE will manage the public buildings retrofits and GRENLEC the MBIA VRE Integration subproject. 46. Guyana. A new PIU for the Project’s activities in Guyana will be created under the GEA, with professional staffs from GEA and additional consultants to be recruited, as may be needed. The NCC for Guyana will be established for overseeing the Project with representatives from the MOF, other relevant ministries, public entities, and Guyana’s PUC. 47. Saint Lucia. The existing PIU for the Renewable Energy Sector Development Project (P161316) under Saint Lucia’s Ministry of Infrastructure, Ports, Transport, Physical Development and Urban Renewal (MIPTPDUR) will be expanded and strengthened for the implementation of Saint Lucia’s activities under the Project. The NCC for Saint Lucia will include representatives of MOF, other relevant ministries and entities, the NURC, etc. The NCC will coordinate and oversee the project activities at country level. 48. OECS Commission. Through expanded Pooled Procurement services (PPS) for the energy sector, a Regional PIU with project officers will be created under its Environmental Sustainability Division. The Regional PIU will provide the PPS to the participating countries for their investment in EE and DPVs and implement the regional capacity building activities financed under Component 3, by providing comprehensive procurement training and resources, inter alia, on effectively utilizing framework agreements for building retrofits and contract management. 49. CCREEE. The CCREEE will be strengthened with a technical team, consisting of CCREEE staff and external consultants, to implement activities for the development of the regional regulatory framework and related regional capacity-building under Subcomponent 2.4. The CCREEE will also provide technical inputs, as necessary, to the pooled procurement process led by the OECSC, through its members appointed to the regional RSC and TAC. Figure 2. Project Framework for Implementation and Governance 50. Framework Agreement Approach for Investment Implementation. Investment for EE retrofits and DRE systems under Component 1 will be implemented through pooled procurement following a framework agreement (FA) approach in accordance with World Bank (WB) procurement regulations (September 2023). This approach will involve selecting buildings and retrofitting them continuously during the Project’s implementation until all allocated funds for each country are fully utilized. Most of the supply of goods, works, and installation services for retrofitting public buildings with EE Page 15 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) measures and distributed RE systems will be procured at regional level. This will take place through an expanded PPS, to be administered by the OECS following procedures agreed with the participating countries. This model consists rapidly identify and assess an investment pipeline of projects at the country level and subsequent investment grade audits by the national PIU, followed by pooled procurement for equipment and services, by the Regional PIU for these projects, followed by investment project implementation at the country level. A memorandum of understanding has been agreed among the participating countries, OECS and CCREEE to facilitate the coordination for pooled procurement and the POMs describe the process in detail. 51. PIUs will be responsible for preparing, procuring and implementing their relevant technical assistance at the country level and coordinating with the regional PIU for regional activities. The CCREEE will lead implementation of the regional regulatory framework and related capacity building activities in EE and RE investments. The Regional PIU at the OECSC will lead in capacity building activities for procurement and contract management, through workshops, online training modules, and collaborative platforms, fostering a culture of knowledge sharing and innovation, ultimately contributing to more sustainable and economically viable building practices across the three countries. B. Results Monitoring and Evaluation Arrangements 52. Project results and intermediate indicators will be monitored continuously and each national PIU, as well as the Regional PIU, will regularly collect and track key information. Project progress will be monitored based on completed procurement, Project disbursements, physical progress of renovation works and Project indicators. Each national PIU will develop and maintain a database that includes all building applications. It will also monitor the status of preparation and implementation, such as selection, rapid assessment, investment-grade audits, stage of renovation, and commissioning. The Regional PIU will maintain a database on pooled procurement and regional activities. The database will be updated on a semiannual basis. Following the commissioning of a batch of buildings and verification of energy savings, progress will be measured periodically and reported as part of semiannual reports and World Bank supervision missions. Social surveys before and after renovation will be conducted as well as surveys to evaluate the impact of awareness raising and communication campaigns. 53. M&V of energy savings. These savings will be initially reported based on the data and calculations contained in the final energy audit reports. These audits will assess projected energy savings for the building to meet required functionality and indoor comfort levels (minimum cooling temperature of 24°C). For the buildings renovated in Year 1 of the Project, the national PIUs will conduct M&V for all the buildings over a one-year period following completion of the renovation. This will include installing sensors to collect data on indoor temperature, humidity and air quality, and collecting of bills for electricity and any other fuels. For the buildings renovated in the subsequent years of the Project, the PIU will conduct M&V on a 20 percent sample of buildings. Any variances between the estimated savings and actual energy savings will be documented and actions developed to improve the quality of future energy audits, technical designs, renovation implementation, and operations and maintenance of the buildings. 54. Mid-Term Review (MTR). This review will assess the Project’s overall progress, identify critical implementation issues, and make any necessary revisions to the Project’s design or schedule. Among other things, the effectiveness and impacts of the pooled procurement approach will be assessed at MTR. A unified framework for monitoring and evaluating the effectiveness of the pooled procurement process, including the performance of selected contractors, will be developed to help ensure the process meets the agreed-upon timelines, budgets, and quality standards. The MTR is expected to take place at the end of the third year of the Project’s implementation. Each PIU will be responsible for preparing the MTR for its respective activities and assisting with the preparation of the World Bank’s ICR report. Page 16 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) C. Sustainability 55. Macroeconomic and sector policies of the participating countries support EE and DRE investments . The participating countries have updated national energy policies and strategies up to 2030, under which EE and DRE are critical for the energy transition, especially for Saint Lucia and Grenada, as both countries have mountainous terrain and land constraints. The governments recognize that the Project will lower operational costs of public buildings, providing additional fiscal space for other public services that have been under serious constraints since the onset of the COVID-19 pandemic in 2020. In the medium term, the Project will reduce the investment costs for EE measures and RE systems and will stimulate similar investment in private sector and households, reducing reliance on imported fuel. While there are strong incentives for financial ministries and other public entities to retrofit their buildings under the Project, power utilities may be less enthusiastic, given that the Project will likely result in a slower growth rate in demand and the loss of revenue from reduced consumer bills. 56. The Bank has been supporting the update of the sector regulatory frameworks in Grenada and Saint Lucia to support sustainable EE and RE development. The Project will accelerate this support, especially on the development of a tariff regime and net billing scheme for RE investment, which will: (i) ensure all consumers and utilities benefit from investment in EE and RE and (ii) stimulate further, the sustainable green transition of the sector. The close engagement with utilities initiated during the project preparation will continue during implementation. The Project will also support limited investment and technical assistance to power utilities, for system modernization and DRE integration. 57. Effective operation of pooled procurement is critical to the success of the Project. The proposed pooled procurement model is based on the success of this model used by OECS for the procurement of pharmaceutical and medical supplies. The Project will apply the model for the goods and services in the energy sector. The OECSC and the participating countries have strong incentives to make the platform work in the energy sector because it will likely expand the size of the market, increase competition among suppliers, and overcome limited technical capacity at the country level, reducing transaction costs and achieving efficiency gains through economies of scale. It is critical that the procurement processes for the Project are robust, efficient, transparent, and sustainable, fostering strong collaboration between the countries and with suppliers. IV. PROJECT APPRAISAL SUMMARY A. Technical, Economic and Financial Analysis Technical 58. The planned retrofits of public buildings under the Project are based on the preliminary results of building audits as well as proven and commercially available technologies. The Project will finance technologies for improving EE of building equipment for lighting, cooling, storage etc., as well as rooftop solar-PV systems, and solar water heating. The proposed EE measures and RE systems are based on the results of walk-through audits for 68 buildings in three participating countries assessing the viability of retrofits. The Bank has found the audit reports satisfactory. A Project Preparation Grant (PPG) will finance investment-grade audits and provide design services for the first batch of 33 buildings selected for retrofitting. Technical requirements of eligible investments, to be included in the POM, will be finalized before the Project becomes effective. For the proposed BESS and associated transmission system upgrade by GRENLEC, the Bank has reviewed the technical studies and found them satisfactory. 59. The Project may include one prison in Grenada and police training facilities and stations in Grenada and Saint Lucia. While the inclusion of a prison and police training facilities and stations could raise concerns about the World Bank's involvement in the criminal justice sector, the investment focus is solely on reducing energy consumption and enhancing Page 17 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) sustainability, with no connection to the operational aspects of the prison or police training facility. Furthermore, the implementation of subprojects will not involve the security forces in the country. All subprojects for investments in public buildings and facilities under Component 1 will be carried out MCRERE in Grenada and the MIPTPDUR in Saint Lucia. Depending on the circumstances, a risk mitigation plan will be developed by the respective ministry when a public building or facility used for security purposes is proposed as a subproject. To mitigate any reputational risks, the Project’s development objectives and broader benefits to public infrastructure and sustainability will be clearly conveyed through the communication campaign and stakeholder consultations. Economic and Financial Analysis 60. The Project’s economic rate of return (ERR) is well above the hurdle rate and the economic analysis is robust based on testing of sensitivity to changes in the key variables likely to affect it . The ERR for the planned investment in all three participating countries combined is 14.6 percent (NPV of US$92.2 million) based on the avoided cost of fossil fuels. At the low estimate of the shadow price of carbon (SPC), the ERR increases to 18.4 percent (NPV of US$142.4 million), and at the high estimate, the returns rise to 22.0 percent (NPV of US$192.7 million). These ERRs are more than double the six percent hurdle rate and are robust with respect to the main uncertainties: higher than expected investment costs, lower than expected electricity from solar PVs production and EE savings, and lower than expected oil prices. 61. The financial returns are even higher because the cost of capital from concessionary IDA financing is low - one percent compared to six percent discount rate in the economic analysis. However, given the large number of potential projects, investment decisions should still be made primarily based on economic benefits (i.e. at the avoided cost of fossil fuel). The main impact on the utilities will be slower growth rates in demand, and the loss of revenue from reduced consumer bills. However, because the power utilities of the participating countries are fully or partially government- owned, the net financial impact on governments will still be positive. Climate Considerations 62. Paris Alignment. The Project is aligned with the goals of the Paris Agreement on both mitigation and adaptation. a. Assessment and reduction of mitigation risks. The Project presents no risk of having a negative impact on the participating countries’ low-emissions development pathways or create GHG lock-ins. The Project’s focus on enhancing the efficiency of energy use and increasing RE supply in public buildings is aligned with climate-change mitigation goals. The EE and RE investments contribute to the decarbonization of the three participating countries by reducing energy consumption and use of grid-based electricity from fossil fuels, while increasing RE generation in the power matrix. RE-based electricity generation, transmission and distribution, and the retrofitting of buildings resulting in energy savings of at least 20 percent, as envisaged under the Project, are considered Universally Aligned with the Paris Agreement’s Mitigation Goals,26 and will lead to substantial GHG emissions reductions. b. Assessment and reduction of adaptation risks. The Project adequately reduces the physical climate risks to the Project outcomes, and the Project’s climate resilience and adaptation design considerations limit the exposure to a low level of residual risk. In overall, the Project investment in distributed RE and BESS will reduce the reliance of the participating countries on imported fossil fuels for electricity generation and improve reliability of the electricity service for public sector against power outages in national grids due to extreme climate‐related events. The potential impacts of identified climate and disaster risks (risks of flooding and hurricanes) on the Project’s 26J. Energy Sector: “Generation of renewable energy (e.g., from wind, solar, wave power, etc.) with negligible lifecycle GHG emissions.” “Electricity transmission and distribution, including energy access, energy storage, and demand-side management.” Buildings and public Installations: “Buildings (education, healthcare, housing, offices, retail, etc.)” World Bank criteria of 20% energy savings. Page 18 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) investments are taken into consideration in the subproject design and requirements.27 B. Fiduciary Financial Management 63. Overall, the Financial Management (FM) arrangements for the Project are assessed as adequate, with residual risk rated as Substantial. The objective of FM assessment was to determine whether institutions to manage financing under the Project meet the World Bank’s minimum FM requirements as specified in OP/BP 10.00. The assessment covered OECSC, CCREEE, Saint Lucia’s MIPTPDUR, Grenada’s PAU at the AGD and GRENLEC, and the Guyana’s GEA. The assessment, which was conducted on November 18, 2024, concluded that the proposed project FM arrangements are adequate. However, additional measures were agreed upon to further strengthen the arrangements, especially in CCREEE, MCRERE, GRENLEC and GEA as they have no experience implementing projects funded by the World Bank. Annex 1 provides the details of FM arrangements (including agreed mitigating measures) and detailed FM assessments. Based on the Project’s residual risk, the World Bank will supervise the Project every six months, to assess the continued adequacy of the FM arrangements and update the Project’s FM performance and risk rating. 64. Retroactive financing. The Project includes retroactive financing for Grenada and Guyana from the CTF Loan and from the CCEFCF Loan and Grant, respectively. Procurement 65. The Regional PIU and national PIUs procurement will be carried out in accordance with the World Bank’s Procurement Regulations for IPF Borrowers (Procurement Regulations) dated September 2023). Moreover, the World Bank’s Anticorruption Guidelines dated October 15, 2006 (revised January 2011 and July 1, 2016) shall be observed and applied. The Regional PIU will conduct pooled procurement at the regional level for the investment in the EE measures and DPV systems in public buildings under Component 1, on behalf of the participating countries. The Framework Agreement approach will apply to regional procurement. Rated criteria and scoring value will be used in accordance with the procurement regulations. National PIUs will conduct procurement for other goods, works, and consulting services for preparation of investment in building retrofits and for contract management. A combined PPSD has been developed, however each implementation agency has a procurement plan that cover the first 18 months. The Project will use the Systematic Tracking of Exchanges in Procurement system to plan, record, and track procurement transactions, documents, and complaints. The assessment was conducted during the period of October 28 to November 1, 2024, which covered St Lucia MIPTDUR, GRENADA PCU, GRENLEC and Guyana GEA. Following the assessment, the procurement risk is rated substantial. The risk rating will be adjusted periodically during project implementation based on the implementation agency’s performance. See Key Risks section below for a discussion of the related risk mitigation measures. The POMs provide details on the planned procurement process. @#&OPS~Doctype~OPS^dynamics@padlegalpolicy#doctemplate 27 All distributed PVs systems to be installed in Saint Lucia and Grenada are required to sustain category 5 hurricanes. The subproject eligibility criteria and screening mechanism are in place to ensure no buildings structurally unsafe with high flood risks or low hurricane resistant are included in the Project. In Grenada, the transmission substations and lines to connect the utility-scaled BESS to the national grid will be constructed to standards and features which harden them against extreme weather events and subsequent effect such as flooding or erosion. For example, the second transmission line to connect BESS to the grid will be underground which would protect it against impacts of wind and floods from hurricanes and create redundancy for the grid connection in case the overhead line falls. In addition, the project may include technical assistance to support GRENLEC to develop an emergency preparedness plan and safety regulation for the BESS and concerned transmission system. Page 19 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Area OP 7.60 No C. Environmental and Social and Legal Operational Policies 66. Environmental and social risks are rated as Moderate. The main environmental and social impacts are primarily associated with building renovations and construction activities, including the installation of solar panels on the roofs or parking areas of existing buildings or facilities. The impacts are expected to be temporary, site specific, and manageable. They will be addressed through standard mitigation measures and good international industry practice, as delineated in the WB Group General Environmental, Health and Safety Guidelines. Potential adverse environmental impacts may be caused by dust and noise; emissions from vehicles and machines; construction waste and potentially hazardous materials; disposal of old electrical appliances, asbestos-containing materials, lead-based paints and stormwater runoff to the marine environment. Installation of solar arrays on lands owned by the Grenada Airport Authority will be an Associated Facility to the Project. The regional waste management strategy to be developed under the Project will entail a review and analysis of the waste management situation across several Caribbean countries and recommend measures to manage the waste. The main social risks and impacts are associated with labor and working conditions, particularly the health and safety of workers and the surrounding community where the work will take place. While all three participating countries have legal Organizational Health and Safety (OHS) frameworks, potential issues may arise during implementation due to weak enforcement; therefore, OHS measures will be built into the Environmental and Social Management Plans (ESMPs) and contract documents. There is also a risk of forced labor in the global supply chain for solar panels and solar components, requiring specific mitigation measures.28 Because most of the planned subprojects are associated with existing public buildings, the Project is not expected to have any land acquisition impacts. The Project is also not expected to have any significant impacts on vulnerable groups. The risks of sexual exploitation and abuse and sexual harassment have been assessed as low. 67. Eight environmental and social standards (ESS) are relevant to the Project (ESS1-6, ESS8 and ESS10). To manage the environmental and social risks, draft country-specific Stakeholder Engagement Plans (SEPs) and client specific Environmental and Social Commitment Plans (ESCPs) were prepared and disclosed by the World Bank and the clients prior to project appraisal.29 In addition, a draft Environmental and Social Management Framework (ESMF) including the Labor 28 To mitigate against forced labor, the Bank requires its borrowers to strengthen procurement processes to ensure that any solar panels and related components for solar energy production do not involve forced labor.The Borrower will require bidders to provide two declarations: a Forced Labor Performance Declaration, which covers past performance, and a Forced Labor Declaration, which covers future commitments to prevent, monitor and report on any forced labor, cascading the requirements to their own sub-contractors and suppliers. 29 The SEPs were publicly disclosed in all three project countries on their respective government websites. Saint Lucia disclosed their draft SEP on April 13, 2023, Grenada on October 23, 2024, and Guyana on December 8, 2023. Grenada disclosed the ESCP on October 23, 2024; Saint Lucia disclosed the ESCP on July 5, 2024; Guyana disclosed the ESCP on October 2, 2024; the OECS Commission disclosed the ESCP on October 24, 2024; CCREEE disclosed the ESCP on November 18, 2024. Page 20 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Management Procedures (LMP) and a draft Resettlement Framework (RF) have been prepared for the Project. 68. Gender program. Across the LAC region, women account for only 17 percent of senior leadership positions and 9 percent of executive positions in the energy sector.30 In Guyana, the share of women in technical positions at the power utility GPL represents 6.1 percent of the work force – i.e., only 35 women out of 578 technical employees. In the Caribbean, the labor market is limited in general, but particularly in skilled labor necessary for EE and RE equipment installation, operation, and related services. Engineering degrees are critical to obtaining technical-level positions in the energy sector. Apprenticeships or internships are also critical to obtain a first employment opportunity. The Project will support a gender program in Guyana, to be implemented by GEA, which aims to increase female employment and reduce labor gaps in enegy sector technical jobs, through educational, apprenticeship and employment opportunities in electrical and mechanical engineering, and other relevant majors. The Project will in particular target vulnerable, underprivileged, and single mothers, providing them 20 sponsorships to pursue studies required to seek entry into the electrical trade and progress towards becoming a licensed electrical installation contractor and inspector. The one-year technical course will be followed by a mandatory 12-month apprenticeship for all 20 female candidates. As part of the program, a survey on the gender gap in technical fields in Guyana will be carried out. The Project’s target is that a minimum of 60 percent of the female beneficiaries of the sponsorship program be successfully employed in technical positions in the energy sector within three years of completion of the respective programs. Progress towards this target will be measured through intermediate results indicators as part of the results framework. 69. Citizen engagement. The SEP outlines the stakeholder engagement activities, including on-site interviews, building walk-throughs at subproject sites, focus groups with stakeholders and other creative engagement activities around the theme of RE/EE (e.g. school competitions). A pre- and post-renovation perception survey will be conducted among building users to assess the satisfaction rate with the building renovation process. Awareness-raising campaigns will be implemented using a variety of communication channels, ranging from posters to the creation of mass media and social media content. The community liaison officers and social specialists in each respective PIU will implement an accessible and effective grievance mechanism. D. Grievance Redress Services 70. Grievance Redress. Communities and individuals who believe that they are adversely affected by a project supported by the World Bank may submit complaints to existing project-level grievance mechanisms or the Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed to address project- related concerns. Project affected communities and individuals may submit their complaint to the Bank’s independent Accountability Mechanism (AM). The AM houses the Inspection Panel, which determines whether harm occurred, or could occur, because of Bank non-compliance with its policies and procedures, and the Dispute Resolution Service, which provides communities and borrowers with the opportunity to address complaints through dispute resolution. Complaints may be submitted to the AM at any time after concerns have been brought directly to the attention of Bank Management and after Management has been given an opportunity to respond. For information on how to submit complaints to the Bank’s Grievance Redress Service (GRS), visit http://www.worldbank.org/GRS. For information on how to submit complaints to the Bank’s Accountability Mechanism, visit https://accountability.worldbank.org. V. KEY RISKS 71. The overall residual risk of the proposed Project is rated as Substantial. This is mainly due to the substantial risk associated with implementation capability and fiduciary performance, specifically related to pooled procurement of EE 30 Ernst & Young Women in Power and Utility Index. Page 21 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) and RE investments, underscoring the importance of coordination, technical assistance, and training. Key substantial risks are described below. 72. Institutional capacity for implementation risk is rated as Substantial. The participating countries vary in their capacity to manage the Project’s country-specific components and regional level coordination. Grenada MCRERE, Guyana GEA, and CCREEE lack experience and capacity in implementing World Bank financed projects and require strengthening in their capacities, as does the Saint Lucia MIPTPDUR. At the regional level, the OECSC needs to strengthen its capacity in technical aspects of the energy sector. There is a risk of delays in establishing the new PIUs given the limited national and regional talent pools. To mitigate these risks, the Project will create an RSC along with a Regional TAC to address technical and Project coordination risks. The Project will establish an expanded PPS through a new Regional PIU at the OECSC to facilitate pooled procurement. Recruitment of key staff for all PIUs will be completed no later than ninety days after effectiveness and recruit an Owner’s engineer to support Grenada PIU. Targeted technical trainings will be organized for PIU staff through the project implementation period. 73. Fiduciary risks are rated as Substantial. This is attributed to (i) potential ineligible expenses due to noncompliance with WB procurement procedures, (ii) delayed procurement due to lack of experience with implementing pooled procurement, (iii) limited budget fiscal space that may affect budget allocation for the project and (iv) bureaucratic internal controls that may delay approval of contracts and payments. The mitigation measures include (i) conduct regular training on WB requirements, especially procurement regulations, (ii) consider providing OECS with HEIS on pooled procurement, (iii) recruit an Owner’s engineer to support the Grenada PIU, (iv) recruit internal consultants to support the PIUs in three countries and CCREEE on pre-investment preparation and contract management (v) ensure each PIU prepares timely budgets, to ensure its incorporated in the Government or the Institutions approved annual budget, (vi) design applicable project internal controls in the POM and regularly review internal controls to address identified bottlenecks. Page 22 The World Bank Caribbean Efficient and Green-Energy Buildings Project(P179519) VI. RESULTS FRAMEWORK AND MONITORING @#&OPS~Doctype~OPS^dynamics@padannexresultframework#doctemplate PDO Indicators by PDO Outcomes Baseline Period 1 Period 2 Period 3 Period 4 Period 5 Closing Period Energy savings in public buildings and facilities Lifetime energy savings from energy efficiency improvements under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 4.00 42.33 87.45 137.40 194.15 222.50 ➢Lifetime energy savings from EE measures in public buildings and facilities in Grenada under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 5.50 13.75 24.75 38.50 46.32 ➢Lifetime energy savings from EE measures in public buildings and facilities in Guyana under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 4.00 12.00 19.90 29.90 39.80 51.46 ➢Lifetime energy savings from EE measures in public buildings and facilities in Saint Lucia under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 24.83 53.80 82.75 115.85 124.72 Increased use of renewable energy in public buildings and facilities Lifetime clean-energy generation from PV systems in public buildings and facilities under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 Page 23 The World Bank Caribbean Efficient and Green-Energy Buildings Project(P179519) 0 34 200 408 659 926 1,694 ➢Lifetime clean-energy generation from PVs systems in public buildings and facilities in Grenada (including MBIA) under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 24 72 144 215 857 ➢Lifetime clean-energy generation from PVs systems in public buildings and facilities in Guyana under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 34 137 257 377 514 595 ➢Lifetime clean-energy generation from PVs systems in public buildings and facilities in Saint Lucia under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 39 79 138 197 242 Renewable energy capacity enabled under the project (Megawatt) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 1.20 6.90 14.00 22.30 31.40 50.70 ➢Renewable energy capacity enabled by public investment in Grenada (Megawatt) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 0.80 2.30 4.50 6.80 8.10 ➢Renewable energy capacity financed by private capital enabled in Grenada (Megawatt) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 0 0 0 0 13.70 ➢Renewable energy capacity enabled in Guyana (Megawatt) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 1.20 4.90 9.20 13.50 18.40 21.20 ➢Renewable energy capacity enabled in Saint Lucia (Megawatt) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 Page 24 The World Bank Caribbean Efficient and Green-Energy Buildings Project(P179519) 0 0 1.20 2.50 4.30 6.20 7.60 For both PDO Outcomes Lifetime GHG emissions reduced or avoided from EE and RE investments under the project (tons of CO2eq) (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 25,800 163,189 331,991 532,530 749,317 1,260,634 ➢Lifetime GHG emissions reduced or avoided from EE and RE investments in Grenada (including MBIA) (tons of CO2eq) (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 18,960 54,983 108,069 163,052 575,534 ➢Lifetime GHG emissions reduced or avoided from EE and RE investments in Guyana (tons of CO2eq) (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 25,800 100,218 186,046 273,364 372,092 434,720 ➢Lifetime GHG emissions reduced or avoided from EE and RE investments in Saint Lucia (tons of CO2eq) (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 44,011 90,962 151,097 214,173 250,380 Share of value of contracts awarded under the regional pool procurement out of total contract value under the project (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 20 30 50 60 60 60 Regulatory framework for investments in EE and RE enhanced Harmonized regional and national regulations, standards to promote EE and RE investment developed and adopted for implementation under the Project (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 0 1 2 2 3 Intermediate Indicators by Components Page 25 The World Bank Caribbean Efficient and Green-Energy Buildings Project(P179519) Baseline Period 1 Period 2 Period 3 Period 4 Period 5 Closing Period Component 1: Investment in EE measures and distributed RE systems in the public sector Total new capacity of solar PV installed under the project (kWp) (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 1,224 6,885 13,913 22,314 31,326 50,670 ➢New capacity of solar PV installed in Grenada (including MBIA PV) under the project (kWp) (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 755 2,267 4,533 6,800 21,855 ➢New capacity of solar PV installed in Guyana under the project (kWp) (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 1,224 4,897 9,181 13,466 18,362 21,253 ➢New capacity of solar PV installed in Saint Lucia under the project (kWp) (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 1,233 2,465 4,315 6,164 7,562 Average annual RE production under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 1.70 10.00 20.40 33.00 46.30 78.71 ➢Average annual RE production in Grenada (including MBIA PV) under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 1.20 3.60 7.18 10.76 36.86 ➢Average annual RE production in Guyana under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 1.71 6.85 12.85 18.84 25.70 29.74 Page 26 The World Bank Caribbean Efficient and Green-Energy Buildings Project(P179519) ➢Average annual RE production in Saint Lucia under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 1.97 3.95 6.91 9.87 12.11 Annual energy saving by EE measures installed under the project (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0.40 4.23 8.74 13.73 19.41 22.25 ➢Annual energy saving by EE measures installed in Grenada (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 0.55 1.37 2.47 3.85 4.63 ➢Annual energy saving from EE measures installed in Guyana (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0.40 1.19 1.99 2.98 3.98 5.15 ➢Annual energy saving by EE measures installed in Saint Lucia (Gigawatt-hour (GWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 2.48 5.38 8.28 11.59 12.47 Buildings retrofitted with EE measures commissioned under the project (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 20 100 190 295 410 494 ➢Buildings retrofitted with EE measures commissioned in Grenada under the project (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 10 25 45 70 84 ➢Buildings retrofitted with EE measures commissioned in Guyana under the project (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 20 60 100 150 200 259 Page 27 The World Bank Caribbean Efficient and Green-Energy Buildings Project(P179519) ➢Buildings retrofitted with EE measures commissioned in Saint Lucia under the project (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 30 65 100 140 151 Capacity of battery storage installed for integration of renewable energy in Grenada (Megawatt hour(MWh)) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 0 21.20 21.20 21.20 21.20 Volume of private and public direct finance enabled for renewable energy (USD million) (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 5 10 15 25 35 43.80 Component 2: Regulatory Framework Development National Regulations to enable scaling up EE and distributed renewable energy supported under the project (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 0 1 1 1 2 Regional regulations and tools for EE and distributed RE supported under the project (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 0 0 1 1 1 Regional Outreach/advocacy workshops/events for EE and RE (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 1 1 2 3 3 3 Component 3: Support to Pooled Procurement and Project Implementation, Capacity-Building and Gender People in the region benefitted from trainings under the project (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 Page 28 The World Bank Caribbean Efficient and Green-Energy Buildings Project(P179519) 0 10 25 45 65 80 80 ➢Female beneficiaries (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 10 20 30 40 40 40% Grenada: Satisfaction rate with the building renovation processes, including consultations, and results. (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 20 40 60 70 70 70% ➢Of which female respondents (Percentage) 0 20 40 60 70 70 70% Guyana: Satisfaction rate with the building renovation processes, including consultations, and results. (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 20 40 60 70 70 70% ➢Of which female respondents (Percentage) 0 20 40 60 70 70 70% Saint Lucia: Satisfaction rate with the building renovation processes, including consultations, and results. (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 20 40 60 70 70 70% ➢Of which female respondents (Percentage) 0 20 40 60 70 70 70% Outreach/advocacy workshops/events to promote females in technical jobs in Guyana (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 1 2 2 2 2 2 Scholarships provided for female students to pursue electrical, civil or mechanical engineering degrees in Guyana (Number) Page 29 The World Bank Caribbean Efficient and Green-Energy Buildings Project(P179519) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 10 20 20 20 20 20 Apprenticeships/internship support provided for female students in STEM field in Guyana (Number) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 10 20 20 20 20 Female beneficiaries successfully employed in technical positions in the energy sector within three years of completing scholarship and apprenticeship programs in Guyana (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 0 0 10 20 40 60% Grenada: Feedback received and implemented during stakeholder consultations and engagement during project implementation (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 40 40 50 50 60 70% ➢of which female respondents (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 40 40 50 50 60 70% Guyana: Feedback received and implemented during stakeholder consultations and engagement during project implementation (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 40 40 50 50 60 70% ➢of which female respondents (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 40 40 50 50 60 70% Saint Lucia: Feedback received and implemented during stakeholder consultations and engagement during project implementation (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 Page 30 The World Bank Caribbean Efficient and Green-Energy Buildings Project(P179519) 0 40 40 50 50 60 70% ➢of which female respondents (Percentage) Dec/2024 Jun/2026 Jun/2027 Jun/2028 Jun/2029 Jun/2030 Jun/2031 0 40 40 50 50 60 70% Page 31 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Monitoring & Evaluation Plan: PDO Indicators by PDO Outcomes Energy savings in public buildings and facilities Lifetime energy savings from energy efficiency improvements under the project (GWh) Energy savings derived from energy efficiency investments in public buildings and facilities under the project and per Description country (GWh). Frequency Semi-annual Data source Energy audits and monitoring and verification (M&V) reports Methodology for Data Reporting is based on energy audits (before renovation) and will be updated based on M&V reports (after renovation) Collection Responsibility for Data Monitored, calculated, and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, Collection and report indicator Increased use of renewable energy in public buildings and facilities Lifetime clean-energy generation from PV systems in public buildings and facilities under the project (GWh) Description Distributed electricity production from PV systems installed under the project and per country. Frequency Monitored monthly, and reported semi-annually Measurement and data acquisition & monitoring systems (ex: Meters, Weather Measurement Station, SCADA). Those data Data source to be included in the M&V reports Methodology for Data Data will be collected via web Collection Responsibility for Data Monitored, calculated, and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, Collection and report indicator Renewable energy capacity enabled under the project (MW) Description Total capacity of PV systems installed under the project, including 13.8 MW IPP at MBIA in Grenada Frequency Monitored monthly, and reported semi-annually Measurement and data acquisition & monitoring systems (ex: Meters, Weather Measurement Station, SCADA). Those data Data source to be included in the M&V reports Methodology for Data Data will be collected via web Collection Responsibility for Data Monitored, calculated, and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, Collection and report indicator For both PDO Outcomes Lifetime GHG emissions reduced or avoided from EE and PV investments under the project (tons of CO2eq) Lifetime GHG emissions avoided by replacing diesel or electricity consumption from the grid by EE and solar PV generation Description under the project and per country in tons of CO2eq Frequency Semi-annual Data source Energy audits and M&V reports Methodology for Data Reporting is based on energy audits (before renovation) and will be updated based on M&V reports (after renovation) Collection Responsibility for Data Monitored, calculated, and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, Collection and report indicator Share of value of contracts awarded under the regional pool procurement out of total contract value under the project (percentage) Share of value of contracts awarded under regional procurement pool for EE and distributed RE investment out of total Description contracts value under the project Frequency Semi-annual Data source World Bank Client Connect System and Systematic Tracking of Exchanges in Procurement (STEP) Methodology for Data The PIU will monitor and collect data from the World Bank Client Connect System Collection Page 32 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Responsibility for Data PIU of each country. The Regional PIU to collect and aggregate data per country, and report indicator Collection Regulatory framework for investments in EE and RE enhanced Harmonized regional and national regulations, standards to promote EE and RE investment developed and adopted for implementation under the Project (Number) Regulation is issued/approved/gazetted/ published in institutional web sites by the government/regional institutions to set Description strengthened requirements for promote the use of distributed renewable energy and energy efficiency Frequency Semi-annual Data source Official gazettes, institutional web sites or other sources used by the government/regional institutions Methodology for Data Document evidence of publishing of the regulation and confirm the requirements related to RE and EE Collection Responsibility for Data Monitored and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, and report Collection indicator Page 33 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Monitoring & Evaluation Plan: Intermediate Results Indicators by Components Component 1: Investment in EE measures and distributed RE systems in the public sector Average annual RE production under the project (GWh/year) Description Electricity production per year from PV systems installed under the project and per country in GWh Frequency Semi-annual Data source Measurement and data acquisition & monitoring systems (ex: Meters, Weather Measurement Station, SCADA). Those data to be included in the M&V reports Methodology for Data Data of generation from PV systems to be collected via web Collection Responsibility for Data Monitored and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, and Collection report indicator Buildings retrofitted with EE measures commissioned under the project and per country Description Number of buildings renovated (including EE measures and/or distributed PV systems) under the project and per country Frequency Semi-annual Data source Database to be elaborated by the country’s PIU Methodology for Data Data from PIU’s databases Collection Responsibility for Data Monitored and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, and Collection report indicator Annual energy savings by EE measures installed under the project (GWh/year) Description Energy savings per year derived from energy efficiency investments under the project and per country (MWh). Frequency Semi-annual Data source Energy audits and monitoring and verification (M&V) reports Methodology for Data Reporting is based on energy audits (before renovation) and will be updated based on M&V reports (after renovation) Collection Responsibility for Data Monitored, calculated, and reported by the PIU of each country. The Regional PIU to collect and aggregate data per Collection country, and report indicator Total new capacity of solar PV installed under the project (kWp) Description Total capacity of PV systems installed under the project Frequency Monitored monthly, and reported semi-annually Data source Measurement and data acquisition & monitoring systems (ex: Meters, Weather Measurement Station, SCADA). Those data to be included in the M&V reports Methodology for Data Collection Data will be collected via web Responsibility for Data Monitored, calculated, and reported by the PIU of each country. The Regional PIU to collect and aggregate data per Collection country, and report indicator Capacity of battery storage installed for integration of renewable energy in Grenada (Megawatt hour (MWh)) Description Capacity of battery storage installed at MBIA Frequency Semi-annual Data source PIU progress reports Methodology for Data Monitored from BESS contract progress Collection Responsibility for Data Monitored, calculated, and reported by Grenada’s PIU. Collection Volume of private and public direct finance enabled for renewable energy (Amount (USD million)) Description Private and public direct finance enabled for renewable energy under subcomponents 1.2.b (Grenada) and 1.3 (Guyana). This includes US$28 million private finance under subcomponent 1.2.b and US$15.8 million public finance under subcomponent 1.3. These figures are monitored for the purposes of the CTF and CCEFCF, respectively, Frequency Semi-annual Data source PIU progress reports Methodology for Data Monitored from contracts under subcomponents 1.2.b and 1.3. Collection Page 34 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Responsibility for Data Monitored, calculated, and reported by Grenada’s and Guyana’s PIUs, respectively. Collection Component 2: Regulatory Framework Development National Regulations to enable scaling up EE and distributed renewable energy supported under the project (number) Description Regulation is issued/approved/gazetted/ published in institutional web sites by the government to set strengthened requirements for promote the use of distributed renewable energy and increasing energy efficiency in the construction of new and renovation of existing public buildings and facilities Frequency Semi-annual Data source Official gazettes, institutional web sites or other sources used by the government Methodology for Data Document evidence of publishing of the regulation and confirm the requirements related to RE and EE Collection Responsibility for Data Monitored and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, and Collection report indicator Regional regulations and tools for EE and distributed RE supported under the project (number) Description Tool (for example, templates for energy audits, M&V protocols, energy service agreements, etc.) is developed to support and facilitate the scale up of EE and distributed RE investments in the construction of new and renovation of existing public buildings and facilities Frequency Semi-annual Data source Institutional websites Methodology for Data Document evidence of publishing of the tool that supports the scale up of EE and RE investments Collection Responsibility for Data Monitored and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, and Collection report indicator Regional outreach/advocacy workshops/events for EE and distributed EE (number) Description Number of regional outreach/advocacy workshops/events for EE and distributed EE supported by the project Frequency Semi-annual Data source Training institutions Methodology for Data On completion of each event, training institution or event organizers to provide a report to the PIU on the training Collection undertaken, the numbers of people trained and qualitative outcomes Responsibility for Data Monitored and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, and Collection report indicator Component 3: Support to Pooled Procurement and Project Implementation, Capacity-Building and Gender People in the region benefitted from trainings under the project (Number) Description Number of people trained in various training sessions organized under project (e.g., technical trainings on energy audits, design, construction supervisions, and GHG accounting), including PIU staff. Percentage of female participants will be collected supplementarily. Frequency Semi-annual Data source Attendance forms from training events Methodology for Data Attendance forms will be collected at each training by the event organizers (public/private institution, consultants, etc.) Collection Responsibility for Data PIU of each country. The Regional PIU to collect and aggregate data per country, and report indicator Collection Satisfaction rate with the building renovation processes, including consultations, and results per country (Percentage) Description (Citizen engagement indicator) Percentage of beneficiaries surveyed within the renovated buildings under the project satisfied with the renovation processes, including consultations, and results of the renovation. Percentage of female beneficiaries will be collected supplementarily Frequency Semi-annual Data source Survey results Methodology for Data Surveys, including those measuring satisfaction with citizen engagement process, will be distributed: (i) at each pre- and Collection post-renovation monitoring meeting organized for participants, and (ii) through separate post-renovation surveys (both in-person and virtual) for building users Responsibility for Data PIU of each country Collection Page 35 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Outreach/advocacy workshops/events to promote females in technical jobs (Number) Description (Gender indicator) Number of outreach/advocacy workshops/events to promote females in technical jobs supported by the project Frequency Semi-annual Data source Training institutions Methodology for Data On completion of each event, training institution or event organizers to provide a report to the PIU on the training Collection undertaken, the numbers of people trained and qualitative outcomes Responsibility for Data Monitored and reported by the PIU of Guyana. The Regional PIU to collect and aggregate data per country, and report Collection indicator Scholarships provided for female students to pursue electrical, civil or mechanical engineering degrees (Number) Description (Gender indicator) Number of scholarships provided for female students to pursue electrical, civil or mechanical engineering degrees supported by the project, and disaggregated for Guyana Frequency Semi-annual Data source Training institutions Methodology for Data On completion of each round of trainings, training institution or event organizers to provide a report to the PIU on the Collection training undertaken, the numbers of people trained and qualitative outcomes Responsibility for Data PIU of Guyana. The Regional PIU to collect and aggregate data per country, and report indicator Collection Apprenticeships/internship support provided for female students in STEM field (Number) Description (Gender indicator) Number of apprenticeships/internship support provided for female students in STEM field supported by the project, and disaggregated for Guyana Frequency Semi-annual Data source Training institutions Methodology for Data On completion of each round of trainings, training institution or event organizers to provide a report to the PIU on the Collection training undertaken, the numbers of people trained and qualitative outcomes Responsibility for Data PIU of Guyana. The Regional PIU to collect and aggregate data per country, and report indicator Collection Female beneficiaries successfully employed in technical positions in the energy sector within three years of completing scholarship and apprenticeship programs in Guyana (Percentage) Description (Gender indicator) Share of female successfully employed in technical positions in the energy sector within three years of completing scholarship, apprenticeship, internship programs supported by the project Frequency Semi-annual Data source Survey result Methodology for Data PIU of each country will conduct surveys among scholarship/apprenticeship participants to determine whether they are Collection employed in the energy, EE, or STEM sector 3 years after the completion of their training Responsibility for Data Monitored and reported by the PIU of Guyana. The Regional PIU to collect and aggregate data per country, and report Collection indicator Feedback received and implemented during stakeholder consultations and engagement during project implementation (Number) Description (Citizen engagement indicator) Frequency Semi-annual Data source Stakeholder engagement monitoring reports Methodology for Data The PIUs of each country will keep track of suggestions and feedback provided by stakeholders during consultations or Collection engagement activities and report the number of inputs collected from citizens that have actively influenced the project’s design or implementation arrangements. Responsibility for Data Monitored and reported by the PIU of each country. The Regional PIU to collect and aggregate data per country, and Collection report indicator. Page 36 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) ANNEX 1: Implementation Arrangements and Support Plan Subproject Implementation Process and Procurement 1. The EE and DRE investment subproject (Component 1) identification, energy auditing, procurement, contract implementation, and monitoring and verification process is illustrated in Figure A1.1. and described in detail in the POMs. The proposed investment subprojects will be implemented following the Framework Agreement approach under the Bank’s Procurement Regulations (September 2023), referenced at Annex xv. See also Fiduciary section of the PAD on procurement. Figure A1.1. - Overview of Implementation Process Page 37 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Financial Management 2. An assessment of the FM arrangements for the project concluded that the Implementing Entities (IEs) have adequate FM capacity to provide reasonable assurance, that project funds are used for the intended purpose, and that they are capable of recording, reporting and tracking the project transactions accurately and reliably. Key aspects of these FM arrangements include staffing, budgeting, funds flow, accounting, internal controls, financial reporting, and auditing. 3. Risk Assessment: The PIU in Saint Lucia, the PAU in Grenada and the OECSC have experience in implementing World Bank-financed projects. However, this will be the first World Bank-financed project for the PIU under MCRERE and GRENLEC in Grenada and the GEA in Guyana. While the entities have adequate FM rules, regulations, and checks and balances that will apply to the Project, the assessment identified risks, including (i) likelihood of poor coordination of the multiple IEs from different OECS institutions and countries, (ii) pooled procurement which will be piloted for the first time under the project, (iii) the potential delays in establishing the PIUs and hiring the accountants to be dedicated to the project; (iv) the potential insolvency conditions and weak internal environment of CCREEE, which is one of the OECS regional bodies, an (v) non-compliance with fiduciary covenants due lack of experience with implementing WB funded projects four out of six implementing agencies. This could imply a substantial risk leading to unsuccessful execution, which will lead to the project not achieving its objectives. 4. The following measures are envisioned to mitigate the FM risks. Each IE will submit a separate set of Interim Financial Reports (IFRs), to document its expenditures, and annual audit reports within six months of the close of the financial year. All relevant internal controls will be detailed in the POM with clear roles and responsibilities assigned to key project officials. In addition, the Project will maximize the use of Country Systems, including following the national budget system, using the Government’s FM System (Smart Stream), processing of payments by the Treasury, and engaging the Office of Director of Audit to audit the Project’s annual financial statements. In addition, the World Bank will train Project staff on relevant Bank policies and guidelines. FM risks and compliance will be monitored during implementation support missions every six months, as well as through annual external audits. 5. Staffing: The project FM arrangements in the participating countries will be executed by the designated IEs, including the Finance Unit in the OECSC, the CCREEE in Barbados, an existing PIU in the MIPTPDUR in Saint Lucia, and by the GEA in Guyana. For Grenada, the relevant IEs will be the MCRERE, GRENLEC and the PAU of the ACD. While all entities have existing FM staff, additional staff will be hired under the Project. The FM staff in OECSC PIU will work under the supervision of the organization’s Finance Business Partner Manager; in Saint Lucia, this position will work under the supervision of the PIU’s Project Manager; in Grenada, both GRENLEC and the Accountant General will supervise this post; and in Guyana the FM specialist will work under the GEA PIU Manager. Table A1.1 below provides details on the additional FM staff to be hired for each IE. Table A1.1. FM Staff to be hired by each Implementing Entity (IE) OECS Commission One accounts staff will be hired who will be supervised by the Business Partner Manager. Saint Lucia (MIPTDUR PIU) The FM Analyst vacancy will be filled under the project. Grenada MCRERE PIU PAU AGD-MoF A project accountant assigned from the PAU will be dedicated to performing the Project’s FM role. Grenada GRENLEC One FM Specialist will be hired and be dedicated to the Project Guyana GEA One FM Specialist will be hired and be dedicated to the Project CCREEE One FM Specialist will be hired and be dedicated to the Project 6. The functions, responsibilities, and procedures of different stakeholders in the execution of the FM for the Project will be outlined in the POM. This ensures that all parties understand their functions and responsibilities to facilitate proper planning, coordination, and seamless execution of activities under the Project. Page 38 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) FM and Accountability Arrangements 7. Planning and Budgeting: The IEs will designate FM staff to undertake the record keeping for the Project. Each IE will prepare a budget for the life of the Project, which will be revisited periodically and updated, as needed, to reflect the implementation progress. An annual work plan (AWP) and annual budget will be derived from this overall budget, which will be agreed with the World Bank and then included in respective ministries’ annual budget for approval by parliament (except for the OECSC, where it will be included in the entity’s budget). The IEs are expected to follow a uniform line-item classification for preparing budgets in the agreed format, which will allow the consolidation of the budgets for all the project implementing entities. The implementation of these budgets will be monitored regularly during the life of the project, and significant variances between actual and budgeted figures will be investigated and addressed. The external auditors will also monitor the execution of the AWP and will recommend mitigation measures to strengthen the Project’s internal control, as needed. The Bank FMS will review the quarterly IFRs and advise the PIUs on the mitigation measures. 8. Disbursements and Funds Flows: The funds flow and disbursement arrangements will be in line with Bank disbursement guidelines and procedures. Advances from the proceeds of the loan will be disbursed by the World Bank to a segregated US$ Designated Account (DA) opened at an agreed bank of each IE. For Grenada, the World Bank will disburse loan proceeds into two segregated DA. The first account (DA-A) will finance sub-component 1.2a EE retrofits and distributed RE systems for public buildings and facilities, implemented by MCRERE. The second account (DA-B) will be used to finance sub-component 1.2.b Variable RE integration at the MBIA implemented by GRENLEC, who will have a subsidiary agreement with the Government of Grenada. The DA account will be used to receive project funds and pay the US$ currency expenditures. Disbursement from the World Bank to the DA will be based on IFRs. The project will submit a 6- month cash forecast to the Bank for the TTL to approve, as an initial Advance. Subsequent Advances will be based on a 6- month cash forecast, net of the total closing cash balance of the previous quarter. Funds will be periodically transferred from the DA to segregated local currency operating account for each IE, which will also be maintained at the agreed bank. For Grenada, both the AGD and GRNELEC will open a segregated local currency account. The local currency operating account will be used to pay local currency expenditures. Disbursement methods available to the Project will be Advance, Reimbursement, Direct Payment, and Special Commitment. The overall disbursement arrangements will follow standard disbursement policies and procedures are included in the Disbursement and Financial Information Letter (DFIL) and as established in the Disbursement Guidelines for Investment Project Financing, dated February 2017. The minimum application size for Direct Payments and Reimbursements will be recorded in the DFIL. The IEs will account for Advances in the DA expenditures in the quarterly IFRs and document the expenditures in the Bank client connection system. The IEs will submit to the Bank the ‘authorized signatory letter’ to designate the officials that will be responsible for signing the withdrawal applications in the Bank client connections system. The funds flow chart is provided in Figure A1.2 below. Figure A1.1. Flow of Funds 9. Accounting and Internal Controls: The respective IEs will use their existing FM systems to record and maintain all project transactions and will follow the cash basis of accounting. The annual budget for the Project, once approved, will be the guiding factor for recording all the project transactions. To do this, each IE will develop and incorporate a distinct Page 39 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Chart of Accounts into their respective accounting systems. This will allow for the project transactions to be captured by categories, components, subcomponent, and activities in the system. 10. Internal Controls: Each IE will prepare a project financial manual guidance for their Project staff, which will also be an integral part of the POM, which will govern the internal control framework of the project. The POM will be reviewed and approved by the World Bank. The POM will be a disbursement condition for each IE. The POM will include strong FM internal controls, which will be extracted from the national Public Financial Management legal frameworks, the financing agreement, POM, DFIL, and PAD. The internal audit department of each IE shall review the Project’s internal controls periodically, and recommendations for improvements. The internal auditors shall submit internal audit report recommendations to the PIU and respective senior management to implement. 11. Financial Reporting: Each IE will submit to the World Bank separate quarterly unaudited IFR within 45 days after the close of each quarter. The elements of the IFR include sources and uses of funds, uses of funds by component/category, DA activity statement, bank account reconciliation statements, and summary Statement of DA Expenditures for Contracts subject to Prior Review. The IFRs will be generated from the accounting records, and they will indicate actual revenues and expenditures compared to budgeted figures. The IFR format will be agreed during negotiations and will be included in the DFIL. Advances will be disbursed to the respective IEs based on a six-month cash forecast, and expenditures will be documented in the IFRs. The IEs will also prepare the project annual financial statements and submit these to the external auditors three months after the end of the fiscal year. The project financial statements will include a Statement of Sources and Uses of Funds/Cash Receipts and Payments. 12. The Accounting Policies Adopted and Explanatory Notes: The IEs will systematically present the explanatory notes with items on the Statement of Cash Receipts and Payments being cross-referenced to any related information in the notes. Examples of this information include a summary of fixed assets by category of assets, a summary of the IFR Withdrawal Schedule, a listing of individual withdrawal applications, and Management Assertion. The financial statements will include a ‘management assertion’ that the IE has spent the project proceeds in line with the intended purposes as specified in the relevant agreements. 13. External Auditing: The external audit of the Project will be conducted by the agreed audit entities (referred to as external auditors) as briefed in the table below. The project will produce annual financial statements that will be submitted to the external auditors to be audited as per Terms of Reference agreed between the IE and the World Bank. The project budget will include audit fees for private audit firms and the cost of the technical support to be obtained by the Office of the Director of Audit (SAI), if needed. The project will submit the Audit Report along with the Audited Financial Statements and the Management Letter to the World Bank no later than six months after the close of each financial year. Table A1.2 provides further details of the agreed FM arrangements at the respective IEs: Page 40 The World Bank Caribbean Efficient and Green-Energy Buildings Project (P179519) Table A1.2: Financial Management Arrangements Grenada Saint Lucia (Accountant Guyana Energy FM element OECSC CCREEE (MIPTPDUR ) General, MOF; Agency (GEA) GRENLEC) CIBC First Designated US$ First National Bank of Caribbean Grenada Cooperative & local currency Bank of Saint Lucia Bank of Guyana Saint Lucia International Bank Bank bank accounts at (Barbados) Limited ERP Software (Line QuickBooks. Line items for the project SAP Business One, QuickBooks. Line items for items for the project to be created, which to be created-a the project to be created, to be created, which SAGE. The GEA will Accounting will allow capturing of CEGEB distinct which will allow capturing will allow capturing incorporate a software used the project Chart of Accounts of the project transactions of the project customized chart of for record transactions by to record, analyze, by categories, transactions by accounts for the keeping categories, track, and record components, categories, project in SAGE. components, the project subcomponent, and components, subcomponent, and transitions. activities. subcomponent, and activities. activities. Basis of Cash basis Cash basis Cash basis Cash basis Cash basis Accounting July – September July-September, April – June January – March January – March IFRs to be October – December October- July – September April – June April – June submitted for January – March December, January- October – December July – September July – September the quarters April – June March, April-June. January – March October – December October –December Develop and Include strong Develop and Develop and Develop and incorporate strong Develop and incorporate FM internal incorporate strong incorporate strong incorporate strong FM internal strong FM internal controls in the FM internal controls FM internal controls FM internal controls controls in the controls in the POM. POM in the POM. in the POM. in the POM. POM. Annual external January to audit reports to July - June April - March January– December January – December December be submitted for Project’s audited Audit report to Project audit report financial Project audit report to be Project audit report Project audit report be submitted to to be submitted by 31 statements to be submitted by 30 to be submitted by to be submitted by the Bank December submitted by September 30 June 30 June December 31. An audit firm deemed acceptable to the A private audit firm Selection of Bank and appointed selected based on The Office of the Director Auditor General of Audit Office of external auditor as per WB ToR acceptable to of Audit (SAI) Grenada (SAI) Guyana procurement the Bank. procedures Page 41