FOR OFFICIAL USE ONLY Report No: PAD5214 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 37.7 MILLION (US$50 MILLION EQUIVALENT) OF WHICH US$20 MILLION EQUIVALENT FROM THE WINDOW FOR HOST COMMUNITIES AND REFUGEES AND A PROPOSED GRANT IN THE AMOUNT OF US$3 MILLION FROM THE JAPAN POLICY AND HUMAN RESOURCE DEVELOPMENT FUND TO THE REPUBLIC OF SOUTH SUDAN FOR AN ENERGY SECTOR ACCESS AND INSTITUTIONAL STRENGTHENING PROJECT April 3, 2023 Energy and Extractives Global Practice Eastern and Southern Africa 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 February 28, 2023) Currency Unit = South Sudanese Pound (SSP) US$1 = SDR 0.75 US$1 = SSP 772.17 FISCAL YEAR January 1 – December 31 Regional Vice President: Victoria Kwakwa Country Director: Ousmane Dione Regional Director: Wendy Hughes Practice Manager: Erik Magnus Fernstrom Task Team Leaders: Kenta Usui, David Loew ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AM Accountability Mechanism BESS Battery Energy Storage System CEmONC Comprehensive Emergency Obstetric and Newborn Care CEN Country Engagement Note CMU Country Management Unit COD Commercial Operation Date CRA Commission for Refugee Affairs DA Designated Account E&S Environmental and Social EAC East African Community EAPP East Africa Power Pool EIRR Economic Internal Rate of Return EPC Engineering, Procurement and Construction ESF Environmental and Social Framework ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan ESS Environmental and Social Standards ESTAP Energy Sector Technical Assistance Project FCS Fragile and Conflict-Affected Situations FCV Fragility, Conflict, and Violence FM Financial Management FY Fiscal Year GBV Gender-Based Violence GCRF Global Crisis Response Framework GDP Gross Domestic Product GEMS Geo-Enabling Initiative for Monitoring and Supervision GGA Gender Gap Assessment GHG Greenhouse Gas GIS Geographic Information System GoSS Government of South Sudan GRM Grievance Redress Mechanism GRS Grievance Redress Service GWG Gigawatt Global HEIS Hands-on Enhanced Implementation Support IDP Internally Displaced Person IFC International Finance Corporation IMF International Monetary Fund IPP Independent Power Producer IPR Independent Procurement Review JEDCO Juba Electricity Distribution Company LED Light-Emitting Diode LV Low Voltage M&E Monitoring and Evaluation MDAs Ministries, Departments, and Agencies MIGA Multilateral Investment Guarantee Agency MoED Ministry of Energy and Dams MoFP Ministry of Finance and Planning MoH Ministry of Health MSMEs Micro, Small, and Medium Enterprises MV Medium Voltage NAC National Audit Chamber NDC Nationally Determined Contribution NGO Non-governmental Organization NPV Net Present Value O&M Operation and Maintenance PC Procurement Committee PDO Project Development Objective PFM Public Financial Management PHCCs Primary Health Care Centers PHCU Primary Health Care Unit PHRD Policy and Human Resources Development Fund PIU Project Implementation Unit PMU Project Management Unit PPA Power Purchase Agreement PPP Public-Private Partnership PPSD Project Procurement Strategy for Development PSC Project Steering Committee PV Photovoltaic R-ARCSS Revitalized Agreement on the Resolution of the Conflict in the Republic of South Sudan RBF Results-Based Financing RFP Request for Proposals ROW Right-of-Way SEA Sexual Exploitation and Abuse SEP Stakeholder Engagement Plan SHS Solar Home Systems SMEs Small and Medium Enterprises SOE Statement of Expenditures SSEC South Sudan Electricity Corporation STEM Science, Technology, Engineering, and Math STEP Systematic Tracking of Exchanges in Procurement TICAD Tokyo International Conference on African Development ToR Terms of Reference TPI Third Party Implementation UN United Nations UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Climate Change UNHCR United Nations High Commission for Refugees UNICEF United Nations Children’s Fund USAID United States Agency for International Development WBG World Bank Group WHR Window for Host Communities and Refugees YECO Yei Electricity Cooperative Organization The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) TABLE OF CONTENTS DATASHEET ........................................................................................................................... 1 I. STRATEGIC CONTEXT ...................................................................................................... 8 A. Country Context................................................................................................................................ 8 B. Sectoral and Institutional Context .................................................................................................. 11 C. Relevance to Higher Level Objectives............................................................................................. 16 II. PROJECT DESCRIPTION.................................................................................................. 19 A. Project Development Objective ..................................................................................................... 19 B. Project Components ....................................................................................................................... 20 C. Project Beneficiaries ....................................................................................................................... 29 D. Results Chain .................................................................................................................................. 29 E. Rationale for Bank Involvement and Role of Partners ................................................................... 30 F. Lessons Learned and Reflected in the Project Design .................................................................... 31 III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 32 A. Institutional and Implementation Arrangements .......................................................................... 32 B. Results Monitoring and Evaluation Arrangements......................................................................... 32 C. Sustainability................................................................................................................................... 33 IV. PROJECT APPRAISAL SUMMARY ................................................................................... 33 A. Technical, Economic and Financial Analysis (if applicable) ............................................................ 33 B. Fiduciary.......................................................................................................................................... 34 C. Legal Operational Policies ............................................................................................................... 37 D. Environmental and Social ............................................................................................................... 37 V. GRIEVANCE REDRESS SERVICES ..................................................................................... 42 VI. KEY RISKS ..................................................................................................................... 43 VII. RESULTS FRAMEWORK AND MONITORING ................................................................... 46 ANNEX 1: Implementation Arrangements and Support Plan ................................................. 59 ANNEX 2: Economic Analysis................................................................................................ 66 ANNEX 3: Closing the Gender Gap in South Sudan Energy Sector .......................................... 69 ANNEX 4: A Note on Implementing World Bank-Financed Operations and Managing Fiduciary Risks of Government-led Implementation in South Sudan .................................................... 71 ANNEX 5: Map of South Sudan ............................................................................................ 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) DATASHEET BASIC INFORMATION BASIC INFO TABLE Country(ies) Project Name South Sudan South Sudan Energy Sector Access and Institutional Strengthening Project Project ID Financing Instrument Environmental and Social Risk Classification Investment Project P178891 Substantial Financing 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 [ ] Alternate Procurement Arrangements (APA) [✓] Hands-on Enhanced Implementation Support (HEIS) Expected Approval Date Expected Closing Date 25-Apr-2023 30-Apr-2028 Bank/IFC Collaboration Joint Level Yes Complementary or Interdependent project requiring active coordination Proposed Development Objective(s) To increase access to electricity services and strengthen the institutional capacity of the electricity sector in South Sudan. Page 1 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) Components Component Name Cost (US$, millions) Grid densification and extension in Juba and vicinity areas 20.00 Minigrid pilot 13.00 Off-grid electrification of health and other public institutions through standalone solar 10.00 systems Technical assistance and capacity building 10.00 Contingency Emergency Response Component 0.00 Organizations Borrower: The Republic of South Sudan Implementing Agency: Ministry of Energy and Dams PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 53.00 Total Financing 53.00 of which IBRD/IDA 50.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 50.00 IDA Grant 50.00 Non-World Bank Group Financing Trust Funds 3.00 Japan Policy and Human Resources Development Fund 3.00 Page 2 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) IDA Resources (in US$, Millions) Guarantee Credit Amount Grant Amount SML Amount Total Amount Amount South Sudan 0.00 50.00 0.00 0.00 50.00 National Performance-Based 0.00 30.00 0.00 0.00 30.00 Allocations (PBA) Window for Host Communities and 0.00 20.00 0.00 0.00 20.00 Refugees (WHR) Total 0.00 50.00 0.00 0.00 50.00 Expected Disbursements (in US$, Millions) WB Fiscal Year 2023 2024 2025 2026 2027 2028 Annual 0.00 2.00 5.00 20.00 18.00 5.00 Cumulative 0.00 2.00 7.00 27.00 45.00 50.00 INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Energy & Extractives Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT) Risk Category Rating 1. Political and Governance  High 2. Macroeconomic  Substantial 3. Sector Strategies and Policies  Substantial 4. Technical Design of Project or Program  Substantial 5. Institutional Capacity for Implementation and Sustainability  High Page 3 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) 6. Fiduciary  High 7. Environment and Social  Substantial 8. Stakeholders  Substantial 9. Other  Moderate 10. Overall  High 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 Page 4 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) Environmental and Social Standards Relevance Given its Context at the Time of Appraisal E & S Standards Relevance Assessment and Management of Environmental and Social Risks and Impacts Relevant Stakeholder Engagement and Information Disclosure Relevant Labor and Working Conditions Relevant Resource Efficiency and Pollution Prevention and Management Relevant Community Health and Safety Relevant Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Relevant Local Communities Cultural Heritage Relevant 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). Legal Covenants Sections and Description Financing Agreement, Schedule 2, Section I.A.2: By no later than one (1) month after the Effective Date, the Recipient shall establish and thereafter maintain during the implementation of the Project a Project Steering Committee (PSC), with the composition, functions, staffing and resources satisfactory to the Association, and responsible for providing oversight and policy guidance to the Project. The PSC shall be chaired by the MoED, comprised of representative of MoFP, SSEC, and observer representative including inter alia ministry in charge of health, ministry in charge of education, JEDCO, selected state government representatives, UNICEF, UNHCR, Commission for Refugee Affairs (CRA), World Bank, and the Embassy of Japan. Sections and Description Financing Agreement, Schedule 2, Section I.C: The Recipient shall, not later than six (6) months, or any later agreed upon date, after the Effective Date, hire the Owner's Engineer in accordance with terms of reference and qualifications acceptable to the Association. Page 5 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) Sections and Description Financing Agreement, Schedule 2, Section I.D: For the purpose of carrying out Part 3 of the Project, the Recipient shall enter into, by no later than two (2) months after the Effective Date, and thereafter maintain throughout the period of Project implementation, an agreement with UNICEF, under terms and conditions approved by the Association (the “UNICEF Agreement”) Sections and Description Financing Agreement, Schedule 2, Section I.G: The Recipient shall, no later than two (2) months from the Effective Date and prior to the start of any Works, establish and thereafter maintain at all times during the implementation of the Project, a grievance redress mechanism, under terms and structure satisfactory to the Association. Conditions Type Financing source Description Effectiveness Trust Funds, IBRD/IDA The association is satisfied that the Recipient has an adequate refugee protection framework. Type Financing source Description Effectiveness Trust Funds, IBRD/IDA The Recipient has adopted the Project Implementation Manual (“PIM”) in accordance with Section I.B. of Schedule 2 to this Agreement. Type Financing source Description Effectiveness Trust Funds, IBRD/IDA The Recipient has prepared, adopted, and disclosed the Social Assessment in form and substance acceptable to the Association. Type Financing source Description Effectiveness Trust Funds, IBRD/IDA The Recipient shall have established, the Project Implementation Unit (PIU) within MoED, with a structure, equipment, functions and responsibilities acceptable to the Association, including, inter alia, to assist the Recipient in the day-to-day management of all Project activities, including technical supervision and coordination, overall Project planning, quality oversight, communication, reporting, procurement, financial management, environmental and social risk management, and monitoring of Project activities. Type Financing source Description Effectiveness Trust Funds, IBRD/IDA The Recipient has recruited: (i) the PIU Project coordinator, (ii) PIU environmental specialist, (iii) PIU social specialist, (iv) PIU financial management specialist, (v) PIU procurement specialist, (vi) GBV specialist, and (vii) Security specialist with terms of reference, integrity and qualifications acceptable to the Association. Page 6 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) Page 7 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) I. STRATEGIC CONTEXT A. Country Context 1. South Sudan, a landlocked country in East Africa with a population of approximately 11.4 million, has experienced significant levels of fragility, conflict, and violence (FCV). The country remains caught in a web of conflicts and economic stagnation, exacerbated by multiple shocks including COVID-19 and climate-related hazards. The secession from Sudan came after decades of fighting, followed by a brief period of peace under the Comprehensive Peace Agreement (2005–2011) and a final decision to declare independence in January 2011 following a referendum. South Sudan thereby became the youngest country in the world. However, South Sudan descended into a conflict soon after independence, first in December 2013 and again in 2016 following the collapse of a potential peace deal in 2015. These conflicts eliminated the hard-won gains of South Sudan and the country has remained fragile and beset by development challenges, including widespread poverty, weak institutions, untapped human capital, and poor basic service delivery. The Human Development Index in 2021 placed South Sudan the last out of the 191 countries in the world. 1 2. While South Sudan has achieved a fragile peace at the national level, violence remains elevated in several parts of the country, and long-term prospects for consolidated peace and stability remain fragile. The signing of the Revitalized Agreement on the Resolution of the Conflict in the Republic of South Sudan (R-ARCSS) in September 2018 included provisions to reinforce a permanent ceasefire, create an enabling environment for humanitarian assistance delivery, institute critical reforms, and establish a new transitional government. Subsequently, the Transitional Government of National Unity was established in February 2020, which invited the opposition leader, Riek Machar, as the first Vice President, to form a new cabinet of ministers in March 2020. A transitional national assembly reconstituted in August 2021 and a unified command of the country’s armed forces was announced in April 2022. Despite this progress made, some two-thirds of the total population is estimated to need humanitarian assistance through July 2023, with women and children mostly affected. The Transitional Government is scheduled to hold a national election in December 2024. 3. The history of continued conflicts—both within South Sudan and in neighboring countries—has resulted in a significant number of refugees, asylum seekers, and internally displaced persons (IDPs) and created refugee camps and IDP settlements across the country. According to the United Nations High Commission for Refugees (UNHCR) data as of December 31, 2022, South Sudan hosted 308,374 refugees and 64,225 refugee households, with the vast majority—over 90 percent—located in two locations: Jamjang in Pariang County in the Ruweng Administrative Area and Bunj Town in Maban County in Upper Nile State 2. The Government of South Sudan (GoSS) has maintained an open-door policy and reaffirmed its commitment to address vulnerabilities and respond to shocks for both refugees and host communities. The Refugee Act of 2012, which provides the central legal framework for refugee protection in South Sudan, incorporates provisions that are in line with international and regional treaties. The Government has also maintained a policy of granting refugees’ access to its territory, land for cultivation and livelihoods, and practical arrangements for their initial reception and registration. Refugees are 1 UNDP (United Nations Development Programme). 2022. Human Development Report 2021/22: Uncertain Times Unsettled Lives: Shaping Our Future in a Transforming World. New York. 2 UNHCR. 2022. Operations Data Portal – Refugee Situations: South Sudan. https://data.unhcr.org/en/country/ssd Page 8 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) granted freedom of movement and in principle free to settle anywhere in the country. The Commission for Refugee Affairs (CRA) plays the leading role in developing government policy on refugee issues, including protection, and coordinating government and external support for refugees. The CRA is present in all refugee-hosting areas, even as capacity limitations impede its ability to fulfill its designated responsibilities. In addition, the GoSS has made important progress in fostering longer-term benefits for refugee and host communities since gaining eligibility to the Window for Host Communities and Refugees (WHR) under IDA19. While further progress is needed, the World Bank, following consultation with the UNHCR, confirms that the protection framework for refugees continues to be adequate in South Sudan. 3 Figure 1. Refugee population by location in South Sudan Source: Created based on UNHCR data (October 31, 2022). 3 UNHCR Refugee Protection Assessment, August 31, 2022. Page 9 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) 4. A series of economic and climate shocks has kept South Sudan trapped in the vicious circle of continued poverty, food insecurity, and economic contraction. While the economy of South Sudan showed signs of recovery after the peace accord in 2018, COVID-19, locust infestations, and flooding led to a contraction in real gross domestic product (GDP) by 5 percent in 2021 and 2.3 percent in 2022. The poverty rate is estimated to have increased to 80 percent in 2022, up from 77 percent in 2020. The food security situation has also worsened. In November 2022, 63 percent of the population (7.8 million) was projected to face either acute emergency or catastrophic food insecurity through July 2023 4. Increasing international prices of food and agricultural inputs against severe currency depreciation, coupled with a major flood in March 2022, is bound to amplify food insecurity. 5. South Sudan is highly prone and vulnerable to climate-related shocks, primarily floods and droughts, which have a devastating impact on people’s welfare. The May–November 2021 floods, reportedly the worst since the 1960s, affected 9 out of 10 states, affecting around 760,000 people and displacing more than 300,000. 5 A record-breaking flood in 2022 affected 1 million people (8.6 percent of the population), who were already facing a perilous humanitarian situation. Both long-term climate change impacts, such as the increase in temperatures and more erratic rainfall, and short-term extreme climate events, like flooding, have significant implications for peace and sustainable development. Average temperatures are projected to increase between 1°C and 1.5°C by 2060, leading to more extreme heat days and longer heat waves. 6 While trends for rainfall are more variable, most projections show an increase in total annual rainfall. Overall, South Sudan is likely to experience changes in the frequency and/or severity of extreme climate events, such as heat waves, droughts, and floods. 7 The anticipated increase in the frequency and intensity of extreme climate events would not only threaten people’s lives directly but also exacerbate food insecurity, stimulate tension over scarce resources, and hamper South Sudan’s peacebuilding. 6. South Sudan’s economic performance has been volatile since independence. The economy is highly dependent on its oil sector, which in 2011 accounted for 62 percent of GDP and was the country’s sole exporter. Oil production was halted in 2012 amid negotiations over oil-transfer tariffs with Sudan. Since then, production and exports have been recovering gradually. Though the GoSS has voiced enthusiasm for economic diversification in its annual national budgets, the contribution of non-oil sectors to GDP has been declining since 2012. The economic impacts of the COVID-19 pandemic on South Sudan have been profound. Falling global oil prices and lower oil demand reduced government revenues by 40 percent, increasing the fiscal deficit to 4.9 percent of GDP in 2020 compared to 2.5 percent in 2019. The situation was worsened by the need to divert public funds from their intended uses to fight the pandemic. As a result, the GoSS’s 2021–22 budget of SSP 218 billion (US$1.67 billion) contained a 37 percent budget deficit. 7. Recent macro-fiscal reforms of the Government are bearing fruit but public financial management (PFM) needs to be further strengthened to ensure sufficient budgetary resources to deliver basic services. As a result of the Government refraining from monetizing the fiscal deficit and successfully unifying its official and parallel exchange rates in 2021, there has been notable improvements 4 IPC. 2022. Acute Food Insecurity and Acute Malnutrition Analysis. 5 World Bank. 2022. The World Bank in South Sudan – Country Overview. 6 USAID. 2019. South Sudan Climate Vulnerability Profile. 7 World Bank. 2022. Climate Change Knowledge Portal. https://climateknowledgeportal.worldbank.org/ Page 10 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) in forex availability, South Sudanese pound stabilization, and deceleration of inflation. Domestic inflation dropped from 25.2 percent in 2021 to negative 2.2 percent in 2022 and further dropped to an average of negative 6.2 percent in the first half of 2023. However, opaque PFM and widespread corruption 8 have led to the misappropriation of oil revenue and a lack of predictable fiscal transfers to subnational governments. 9 Despite the significant size of oil revenue to the Government, with oil contributing 90 percent of total public revenue and almost all exports, 10 the salaries of civil servants in South Sudan are extremely low and seldom get paid on time. 11 This has led to a deterioration in morale among civil servants as well as a brain drain to the private sector, notably the oil industry. B. Sectoral and Institutional Context 8. South Sudan has one of the lowest energy access rates in Sub-Saharan Africa and in the world. While 46 percent of Sub-Saharan Africa’s population now has access to electricity, the energy access rate in South Sudan is estimated to be only 5.3 percent based on recent World Bank-funded primary research. 12 Of the 5.3 percent with access to electricity, only 1.8 percent are connected to the grid, while 3.5 percent use off-grid technologies as their primary energy source. The lack of access to reliable and affordable electricity is a serious constraint to South Sudan’s socioeconomic development, and the conflict-driven displacement of people and increasingly frequent climate disasters further complicate the expansion of energy access. 9. Lack of electricity access makes the delivery of basic public services that are critical to addressing fragility, such as medical care, even more difficult. Most health and educational institutions outside of Juba do not have electricity. Even the higher-tier service institutions, such as state hospitals with diesel generators, provide limited electricity services due to the high cost of transporting fuel to rural areas. South Sudan’s transport infrastructure is far from being reliable and numerous checkpoints along the major roads make fuel transport prohibitively expensive and time-consuming. Lack of electricity limits the capacity of public health institutions to operate basic medical equipment, store vaccines at adequate temperatures, and provide an advanced educational curriculum and makes it difficult to retain health care workers and teachers. 10. Displaced populations face unique energy access challenges that have received modest attention and the more vulnerable groups, especially women and children, face compounding risks. Displaced populations arriving from across the border will often be set up in camps that are off-grid with limited to no access to electricity. Even for refugees reaching more urban areas, the situation is just as grim. The transient nature of refugees often leads to loss of personal belongings, including energy assets such as solar home systems (SHS) and rechargeable batteries. Adding to the concern are potential conflicts that can arise due to the proximity of host nationals and refugees competing for scarce natural resources such as fuelwood, which then leads to food insecurity. The fragile environment of limited energy access 8 Transparency International. 2022. Corruption Perceptions Index: 2021. 9 IMF (International Monetary Fund). 2019. Republic of South Sudan: Staff Report for the 2019 Article IV Consultation. p. 9; European Union, Ecorys, VNG International. n.d. Tracking the Flow of Government Transfers: Financing Local Government Service Delivery in South Sudan. 10 World Bank. 2022. World Bank Report: With Peace and Accountability, Oil and Agriculture Can Support Early Recovery in South Sudan. 11 World Bank. 2022. South Sudan Economic Monitor: Towards a Job Agenda. p. 22. 12 World Bank (forthcoming). South Sudan Off-Grid and Mini-grid Market Assessment Page 11 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) in displaced communities disproportionately affects women and girls in the form of malnutrition, low economic activity, and in extreme cases, increased violence, calling for a careful consideration of gender dynamics in the design and implementation of access expansion. 11. With growing energy demand far outstripping grid capacity, many households, institutions, and businesses in South Sudan have turned to off-grid solutions, predominantly diesel generators in urban areas and solar products in rural areas. Off-grid installed generation capacity in Juba has been estimated at a total of 28.93 MW, which is almost as high as the installed capacity available on the Juba grid. About 99 percent of this off-grid capacity is generated from diesel, causing toxic emissions and noise, and only 1 percent is generated from solar energy. 13 Even for diesel generators, the high up-front capital costs, costly and limited spare parts, and high domestic fuel prices mean that only a few households and commercial entities can afford them. Although the off-grid solar market is still nascent in South Sudan, with sales of only around 55,000 solar lighting products estimated in 2021, the continued growth of the market demonstrates the potential to increase energy access through cleaner off-grid solutions. Figure 2. Map of Existing Grid Infrastructure with Nightlight Indicating the Presence of Electricity (2022) Source: World Bank. 13Lemi, L., and M. La Belle. 2020. « Co-supplying the National-Grid: An Assessment of Private Off-grid Electricity Generation in Juba-South Sudan.” American Journal of Electrical Power and Energy Systems 9 (3): 47–59. Page 12 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) 12. Most of South Sudan’s functioning electricity supply and distribution infrastructure is located in Juba, with very little working equipment in other cities and rural areas. The country’s total installed power capacity is approximately 103 MW, all from thermal sources, of which around 76.5 MW is operational but only around 34.5 MW is available to the general public, the remaining 42 MW serving the Paloch oil field as captive power. Other generation plants attached to isolated distribution networks in smaller cities and towns including South Sudan’s state capitals such as Wau, Malakal, Rumbek, and Yambio, as well as other towns such as Yei, are non-operational due to lack of adequate maintenance and destruction during the civil war. South Sudan does not have a transmission network, and even before the conflict, the power system consisted entirely of isolated distribution grids. There are currently two 20 MW utility-scale solar projects under construction around Juba, one an independent power producer (IPP) (Ezra hybridization) and the other Government owned (Nesitu; includes 10 MW/35 MWh BESS 14 ), expected to become operational in 2023. Another 20 MW Juba solar IPP (Gigawatt Global, GWG) is currently in planning, though with a more uncertain timeline. South Sudan imports a small amount of electricity from Sudan through a 32 MW/220 kV interconnector in Upper Nile State that distributes power to local customers through the Renk substation, but the supply from this line has been unreliable due to the power shortage in Sudan. The lack of a transmission system in South Sudan and the limited number of connections around Renk itself means that only a small portion of this line’s capacity is ever used. South Sudan’s geographic location presents a significant opportunity to harness regional power trade through the East Africa Power Pool 15 in the future. South Sudan is currently carrying out a feasibility study for an interconnector with Uganda and has recently signed a memorandum of understanding with Ethiopia for power trade. 13. In Juba, the private sector has played an important role in restoring and improving electricity services amid conflicts and declining public capacity. The Juba Electricity Distribution Company (JEDCO) was established in May 2018 as a joint venture between the South Sudan Electricity Corporation (SSEC)— South Sudan’s public utility, which holds 48 percent of shares—and Ezra Group—a private South Sudanese construction company, which holds 52 percent of shares. Ezra also owns and operates Juba’s only functioning power plant—a 33 MW generation facility supplying power to JEDCO following the signature of an Implementation Agreement and a build-own-operate-transfer 17-year power purchase agreement (PPA) with the Government in 2017. The agreement calls for a total of 100 MW of diesel plants to be built and operated in four phases, though most of this capacity, originally expected by 2023, is facing indefinite delays. SSEC’s difficulties in the Juba grid operation and revenue collection at the time of the signature of the IPP led to the formation of JEDCO as a risk mitigation measure for Ezra, which also holds a majority of seats on JEDCO’s Board, though the Ministry of Energy and Dams (MoED) provides the Board’s chairman. The formation of JEDCO resulted in a significant improvement in the performance of the Juba grid. System losses are reported to be below 10 percent and supply reliability over 95 percent, making the Juba grid one of the top performing systems in the region despite its limited geographical coverage. JEDCO currently serves around 33,000 customers, of which 66 percent are households, 32 percent are commercial entities, 14BESS = Battery Energy Storage System. 15The East Africa Power Pool (EAPP) is a regional institution established in 2005 to coordinate cross-border power trade and grid interconnection among nations of the Eastern Africa region. The EAPP currently has 13 member countries that have signed an Inter-Governmental Memorandum of Understanding and 14 utilities that have signed the Inter Utility Memorandum of Understanding . Source. EAPP (https://eappool.org/). Page 13 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) and 2 percent are government institutions. These 33,000 customers served by JEDCO translate to a 32 percent grid access rate among Juba residents. 14. The cost of electricity from the Juba grid, however, is exceptionally high and there is limited demand growth from JEDCO’s customers. Customers in Juba pay an average tariff of US¢40 per kWh, among the highest in Sub-Saharan Africa. Even the lifeline segment of the tariff for residential customers consuming under 100 kWh per month is priced at US¢31.6 per kWh. This is exceptionally expensive compared to regional peers (lifeline tariffs were US¢4.5 per kWh in Ethiopia and US¢6–20 per kWh in Uganda in 2020). Juba’s dollar-denominated tariffs have become even less affordable to end-consumers in recent years due to the sustained depreciation of the South Sudanese pound, as a result of which tariff has more than doubled in South Sudanese pound terms over the last two years. Peak demand in the Juba grid dropped from 30 MW to a low of around 20 MW in May 2022 (but slightly recovered to around 25 MW since then). The high electricity tariff is also incentivizing grid defection by JEDCO customers in favor of diesel generators and in some cases, solar rooftop systems. With such high tariffs restricting demand, there is also a risk of near-term oversupply as the existing 30 MW Ezra thermal plant will be supplemented by an additional 40 MW of solar from 2023 onward. An ongoing JEDCO study is identifying opportunities to reduce the cost of service as a result of the Ezra hybridization and Nesitu solar plants currently under construction. 15. In the absence of a clear mandate on electrification outside of Juba, investment in rural areas and secondary cities remains critically low. There has been limited focus on investment in downstream electrification planning, particularly in rural electrification, even though the 2013 South Sudan Electricity Policy emphasized its importance. There is ongoing support by the Government of Egypt to rehabilitate thermal generation units in the cities of Rumbek and Yambio, but the distribution networks there remain dysfunctional. While some private sector players are conducting preliminary analyses to rehabilitate and/or construct isolated grids in some state capitals, these are at very early stages and are likely to be financially unviable without public support or concessional capital. The low access to reliable electricity outside the capital has constrained basic services from health and educational institutions as well as state governments. While some large-scale institutions such as state-level hospitals rely on diesel generators, the cost is often prohibitively expensive due to the transportation costs and associated fees levied at various checkpoints throughout the country. 16. Rehabilitation of the existing isolated grid systems presents a low-hanging opportunity of enhancing electrification in South Sudan. Some public and private entities currently work on the initial stage of rehabilitating the existing generation and distribution assets in several state capitals including Aweil, Wau, Rumbek, Yambio, Bor, and Malakal. However, electricity tariffs without public funding are expected to be expensive and most customers are unlikely to be able to afford to pay for electricity. In addition to these state capitals, there are existing generation and distribution assets in three towns, Yei, Maridi, and Kapoeta, which were financed by the United States Agency for International Development (USAID). These isolated grid operations have been suspended for several years due to the lack of technical capacity and funding to rehabilitate the distribution network and would likely require private sector participation to help address the weak technical capacity of local public entities. 17. South Sudan’s weak power sector policy framework has led to conflicting institutional mandates and inadequate ad hoc sector development. MoED is the apex policy-making institution of the Government and also serves as regulator, though few regulations are formally in place. SSEC, a de jure Page 14 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) autonomous public institution, is the main national power utility mandated with expanding and operating generation and distribution assets and operated the majority of South Sudan’s electricity generation and distribution assets before the conflict. However, SSEC’s role in the sector has become increasingly uncertain following the decommissioning and destruction of many of its assets as well as the de facto privatization of the Juba power system after the formation of JEDCO. SSEC now has limited financial autonomy as it is required to transfer most of its revenues to the Ministry of Finance and Planning (MoFP), an arrangement that predates the formation of JEDCO. The lack of financial autonomy, as well as a severe lack of capacity, has made it difficult for SSEC to maintain its remaining assets and adequately remunerate its staff. As a consequence, SSEC has lost many of its staff to the private sector, including to JEDCO and the oil industries. 18. Many of South Sudan’s key energy sector policy, planning, and legal documents are outdated, contain significant gaps, or are yet to be written. While sector policy and strategy documents developed soon after independence—including the South Sudan Electricity Corporation Act 2011 and the National Electricity Policy 2013—had attempted to set out the roles and responsibilities of sector institutions, the loss of grid infrastructure as a result of conflict and increased role played by the private sector have diminished their relevance. A National Electricity Bill was drafted in 2016 and passed by the Cabinet but contains several gaps that threaten to limit its effectiveness as a governing document and has been returned by the Ministry of Justice for revisions that are still ongoing. At this point, South Sudan does not have any formalized sector master plans and lacks the institutional capacity to conduct even high-level planning analyses. The World Bank’s last engagement with the South Sudanese power sector, the 2014 South Sudan Energy Sector Technical Assistance Project (ESTAP; P145581), had attempted to address many of these institutional gaps but the outbreak of the civil war led to cancellation of the project. Figure 3. Electricity Sector Institutional Landscape (theory versus reality) 19. Lack of planning, governance, and project implementation capacity keep South Sudan’s electricity sector trapped in the vicious circle of underinvestment and sluggish growth. Sector planning is largely done on an ad hoc basis and in response to private developer solicitation, which has made the sector vulnerable to short-termism and stakeholder capture. Both MoED and SSEC lack the technical capacity to effectively implement projects and ensure these are well integrated into existing systems. For instance, the Government-owned Nesitu solar plant, currently under construction around Juba, will reportedly only be able to evacuate around 5 MW of its nameplate 20 MW capacity because of inadequate Page 15 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) reactive compensation. This reactive compensation would either need to be added as part of the Nesitu project or provided by the Esra thermal plant at the point of interconnection, but there is no provision for this either in the Nesitu engineering, procurement, and construction (EPC) contract or in the PPA with Ezra. It is also unclear, in the absence of appropriate regulation, how Ezra’s ownership of the largest generation plant and a controlling share in the Juba distribution company will affect dispatch of power from the new MoED and IPP solar plants. The lack of clear planning and regulation and the resulting slow growth of the sector has inhibited further investment, both from the private sector and development partners. Other than Ezra, the only major external investment in the power sector to date is the US$38 million Juba Power Distribution System Rehabilitation and Expansion Project by the African Development Bank (AfDB) in 2017, which rehabilitated and upgraded the Juba grid infrastructure, laying the foundation for a JEDCO joint venture. 20. Establishing effective models and regulatory frameworks for public-private partnership (PPP) will be key to restoring and enhancing access to electricity services. Given the extremely weak PFM capacity in the country and the continued need for humanitarian support, the electricity sector’s access to finance is likely to be limited in the near term. This will severely constrain the sector’s capacity to maintain existing assets and remunerate its personnel, let alone make major capital investments. Faced with weak institutional and financial capacity, it will be critical for the Government to leverage the private sector for both financing and technical expertise. Without a national grid or transmission network and highly limited public funding and capacity, rapidly scaling up electricity access will be dependent on IPPs and private sector operated isolated grids. It is expected that even with high demand growth and significant reductions in the cost of grid power, around half of new connections required to reach 50 percent access by 2030 would need to come from off-grid or mini-grid solutions. A related geospatial analysis also identified high-potential candidate urban centers for near-term mini-grid electrification. 21. Despite these many challenges, there is now a unique opportunity for the World Bank and other development partners to help the GoSS formulate a long-term sector vision and embark on a path of sustainable sector development. South Sudan is richly endowed with renewable energy resources (in particular solar and hydropower); bordered by several countries that have significant green power export potential as well as thriving off-grid solar markets; experiencing increasing interest from private sector energy investors and has already been able to set up functioning PPPs in power distribution in Juba and in the oil sector; and—by virtue of its institutional and infrastructural landscape being so nascent, has the opportunity to draw on experience from other FCV power sectors to lay an early foundation for success. Taking advantage of these opportunities, however, will require balancing immediate investment needs in access and physical infrastructure with developing the requisite planning, legal, regulatory, and institutional capacity to create a durable enabling environment for sustainable sector growth. C. Relevance to Higher Level Objectives 22. The proposed project’s activities are consistent with key objectives of the World Bank Group (WBG) Country Engagement Note (CEN) for South Sudan for the period of FY2021–23 (Report No. 158008-SS). The proposed project will contribute to Focus Area 2 - support basic service delivery and Focus Area 3 - promote resilience and livelihood opportunities. Electrification of public institutions, including health and education institutions, will improve South Sudanese’s access to basic human development services and enhance their quality. Expanding energy access with clean energy—solar—to serve Page 16 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) vulnerable communities outside Juba can strengthen the resilience of local livelihoods and allow for more productive and sustained economic activities. 23. As recommended by the CEN, the GoSS will carry out the implementation of the project. This is aligned with the CEN’s strategic direction to shift the implementation modality away from third-party entities. The Government taking the lead in implementation cannot only strengthen the sense of ownership and responsibility but also enhance institutional capacity. However, the success of such Government-led implementation hinges on a couple of critical factors: (a) strong support from the MoFP to make resources available to build implementation capacity in the energy sector and (b) continued peace at the national level. If these enabling factors are not in place, third-party implementation may need to be considered through project restructuring. 24. The project is aligned with the World Bank Group’s twin goals of ending extreme poverty and promoting shared prosperity and aligned with its Energy Sector Directions Paper. Low service quality and limited access to electricity undermine poverty eradication efforts. Energy is a key driver of economic growth and an important means of improving equity and reducing poverty. Reliable and affordable sources of electricity are an essential precondition for a healthy population and for robust economic activity, especially in the country’s current context of constrained economic activity. This project will increase access to reliable electricity and will lay the technical and institutional foundation for more sustainable development. 25. The project is also aligned with the WBG’s Eastern and Southern Africa priority of reaching universal access to electricity in the region by 2030, and its immediate target to double the pace of access expansion through a scale-up of successful country-based access programs and by leveraging distributed renewable energy between now and 2026 while supporting climate, food security, and human capital goals, including the implementation of the Distributed Access through Renewable Energy Scale-Up Platform Initiative. 26. The project is aligned with key WBG corporate strategies. The project is aligned with the WBG Gender Strategy (2016-2023). The strategy underlines key gender gaps and promotion of gender equality; particularly it emphasizes improving human endowments; removing constraints for more and better jobs toward increasing women’s participation in the labor market including in science, technology, engineering, and math (STEM) fields; and enhancing women’s voice through strategically supporting women participation in leadership and decision-making positions in the energy sector. Gender dynamics is carefully considered in all four project components. In particular, Component 3 (off-grid electrification of health and selected public institutions) pays special attention to improving Comprehensive Emergency Obstetric and Newborn Care (CEmONC) services, which would help lower the maternal and newborn mortality rates in South Sudan. Gender-based violence (GBV), which tends to escalate in a fragile environment, will be carefully monitored and strengthened under the social framework. The gender gap assessment (GGA) has been conducted as part of the project preparation and the summary of the findings with gender action plan are in Annex 3. 27. The project is aligned with the WBG’s FCV Strategy 2020–2025. The FCV Strategy recognizes the need to do more to (a) help close gender gaps in education, economic opportunities, and access to labor markets; (b) provide more employment opportunities for female youth at risk; (c) help prevent and respond to GBV; and (d) enhance women’s participation in all levels of governance, including peace and Page 17 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) state-building processes. 28. The project is aligned with the WBG’s Global Crisis Response Framework (GCRF), particularly Pillar 3 - Strengthening Resilience and Pillar 4 - Strengthening Policies, Institutions, and Investment for Rebuilding Better. The project was carefully designed to best support South Sudan with each component contributing to addressing the country’s FCV. 29. The project supports South Sudan in achieving its Nationally Determined Contribution (NDC) 16 and contributes to both mitigation and adaptation efforts in the electricity sector. Under its NDC, South Sudan continues to focus on renewable energy development. By increasing the share of solar, wind, and hydropower, South Sudan aims to reduce cumulative emissions by 69 percent by 2030 compared to the baseline. The NDC also promotes the use of decentralized renewable energy solutions as time- and cost- effective means to increasing electricity access in rural areas. To address the serious risk of floods, the NDC also outlines South Sudan’s commitment to developing flood-proof infrastructure and increased planning for floods. The project directly supports the NDC by enhancing access to electricity services through isolated grids and off-grid solar interventions and by integrating climate adaptation measures into grid extension investments. Promoting the use of renewable energy and distributed energy generation and incorporating climate resilience into energy sector planning are also priorities under South Sudan’s National Adaptation Plan. 17 30. The project is aligned with the WBG’s Climate Change Action Plan (2021–2025). The project will contribute to the WBG Climate Change Action Plan and New Generation Africa Climate Business Plan 18 by adding extra renewable energy capacity, most likely solar, while ensuring the resilience of the investment to climate change impacts such as floods. It will also contribute to mobilizing finance for development by supporting regulatory framework for private sector participation in the sector and engaging the private sector for the operation of isolated grids and will seek collaboration with the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) where appropriate. On climate mitigation, Component 1 (grid densification and extension in Juba and vicinity areas), Component 2 (mini- grid pilots), and Component 3 (off-grid electrification of health institutions through solar systems) directly contribute to lowering carbon emissions from increased energy consumption. On climate adaptation, the project has assessed the potential impact of physical climate risks, and the entire process of grid densification and extension and mini-grid expansion will proactively factor in climate resilience elements – particularly flooding – from its planning to procurement. Under Component 3, the procurement of standalone solar systems will factor in flooding risk for health institutions particularly at risk (for example, rooftop or elevated systems), and staff will be trained to improve continuity of supply during flooding events. 31. The project is aligned with the GoSS’s Revised National Development Strategy (R-NDS) 2021– 2024, which articulated the role of the infrastructure cluster in achieving the country’s primary development goals, including those on education, health, security, job creation, and the environment. Specifically on the electricity sector, the National Development Strategy highlighted the need to enhance 16 UNFCCC8 2021. South Sudan’s Second Nationally Determined Contribution. 17 UNFCCC. 2021. First National Adaptation Plan for Climate Change: Republic of South Sudan. 18 World Bank’s Next Generation Africa Climate Business Plan provides a blueprint to help Sub-Saharan African economies achieve low carbon and climate-resilient outcomes. See more information at: https://www.worldbank.org/en/programs/africa-climate- business-plan/overview Page 18 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) energy supply across all 10 states through PPPs and the development of renewable energy resources. The project is also aligned with the GoSS’s NDCs under the United Nations Framework Convention on Climate Change (UNFCCC), which notes the electricity sector’s role in increasing the use of clean and renewable energy as well as accelerating electrification in rural areas using decentralized grids. 32. The project is aligned with Priority Area B (Rural Access to Energy Supply), of the Tokyo International Conference on African Development (TICAD V) grants provided by the Japan Policy and Human Resources Development (PHRD) fund, which are directed to increase the delivery of off-grid electricity and other energy services in rural areas of fragile and conflict-affected situations (FCS) in African countries. II. PROJECT DESCRIPTION A. Project Development Objective PDO Statement 33. To increase access to electricity services and strengthen the institutional capacity of the electricity sector in South Sudan. PDO-Level Indicators 34. Progress toward achieving the Project Development Objective (PDO) will be measured by the following project indicators: (a) People provided with new or improved electricity service (number) (b) People served by health and selected public institutions with new or improved electricity services (number) (c) Health and selected public institutions with new or improved electricity services (number) (d) National electricity sector policy updated, adopted and published (Yes/No) (e) At least one revised / new sector law developed, adopted and sent to the Parliament by the Cabinet (Yes/No) (f) Grid code developed, adopted and published (Yes/No) (g) MoED staff have completed at least one update of the integrated electricity sector master plan (Yes/No) (h) SSEC HR and business plan adopted (Yes/No) Page 19 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) (i) SSEC has published externally audited financial statements for the previous financial year (Yes/No) B. Project Components 35. The project consists of four components. The first three components are investment components that aim to increase access to electricity services through isolated grids and off-grid interventions. The fourth component is intended to strengthen the sector’s institutional capacity as well as the overall project implementation capacity, which is foundational to achieving the PDO. Foundation capacity for project implementation, including fiduciary and environment and social capacity, will be further built using the project preparation advance before the grant’s effectiveness. 36. Given the vast investment and development needs of the sector against the finite resources available to the project and the recency of World Bank reengagement, the project has been highly selective in its proposed interventions. Project components were designed using the following principal criteria: (a) the project builds on what is already working in the sector to minimize implementation risk and achieve the most immediate development impact, drawing wherever possible on existing infrastructure and institutional capacity; (b) the project aims to be as resilient as possible to the risks inherent in FCV operations, diversifying components both geographically and institutionally; and (c) the project aims to strengthen the foundational elements of the sector that will maximize opportunities for sustainable future development and financing, both scale-up financing from the World Bank and new financing from the private sector and other development partners. This includes a significant allocation for technical assistance and capacity building on issues that are not just immediately relevant to successful implementation of this project but will create institutional capacity for the rigorous and transparent sector planning and governance required to set clear policy goals and attract the necessary investment to achieve them. Component 1. Grid densification and extension in Juba and vicinity areas (US$20 million IDA equivalent) 37. This component will finance additional grid connections to residential and small and medium enterprise (SME) customers as well as grid expansion works to enable new commercial and industrial connections in Juba and its vicinity. This will deliver 40,000 new connections which will include: (a) up to 20,000 new service drops for residential and SME customers under the existing network, including areas in which 24 new but non-electrified transformers that were installed under the AfDB financed project exist, if they remain unconnected by the time the contractor is onboard; and (b) expansion of the medium voltage (MV) and low voltage (LV) networks to the north, west, and southeastern parts of Juba for an additional 20,000 residential and SME connections. Commercial and industrial customers will also be able to connect to the expanded MV and LV networks, though their connections will not be financially supported by this project. These additional residential and SME connections are expected to more than double the number of connections in and around Juba. The target areas could also include communities in the periphery of Juba. 38. The intervention will also include light-emitting diode (LED) streetlights along distribution poles to improve security in Juba. A total of 11,000 streetlights are expected to be installed in Juba. Assuming one streetlight can serve six residents, around 66,000 people can benefit from better lighting in dark Page 20 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) hours, which can contribute to lowering the insecurity in the city and create a safer environment for businesses, allowing them to operate for longer hours without compromising their safety. The World Bank intervention will not only use high-efficiency LED lamps to ensure the longevity of the lights and minimize the replacement needs but also explore measures to mitigate the risk of vandalism and restore existing lights. Based on the existing agreement between Juba City/County and JEDCO, JEDCO will operate and maintain the new streetlights. 39. To implement the component, MoED will competitively procure an EPC contractor that will be responsible for the entire implementation including design, supply of all necessary materials, installation of MV and LV lines and service drops, and erection of transformers up to test and commissioning. MoED will hire an ‘owner’s engineer’ to review the existing technical materials and support the procurement and contract management of the EPC contractor, including the preparation of bidding documents, evaluation of bids, contract negotiation, design review and approval, and supervision of the contractor’s work during construction. The selected EPC contractor will supply and install the required cables and energy meters for service installation, and JEDCO will register and receive connection fees from all new customers under this project. 40. The investments made under this component will enable the integration of additional solar photovoltaic (PV) generation and reduce the cost of electricity in Juba. Grid densification and expansion will ensure efficient utilization of the current and planned generation facilities around Juba. 19 By expanding the MV and LV networks, the grid’s capacity will be enhanced to absorb power supplied from forthcoming generation assets, including the two 20 MW solar PV plants (Nesitu and Ezra) currently under construction and the planned 10 MW solar plant by a private developer - GigaWatt. According to the NDC, South Sudan plans to promote the use of energy-efficient technologies and decentralized renewable energy grids. The completion of these projects along with appropriate policy choices could reduce the average tariff from US¢40 per kWh to US¢26 per kWh according to initial estimates. Funding from this component could also be used to strengthen the grid’s ability to absorb this intermittent power once it comes online, including through reactive power compensation. The new solar capacity currently under development would result in a generation mix of 55 percent thermal and 45 percent solar and BESS that is estimated to meet the demand growth over the next 5–10 years. 41. For climate resilience and adaptability, investments under this component will proactively factor in increased flooding risk as part of the planning and procurement process. Geospatial analysis will be used to determine locations with lower flood risk for grid densification and extension investments. The overhead distribution system is expected to be designed with 7-meter ground clearance using concrete poles and foundations and pole-mounted transformers (instead of wood poles and ground- mounted transformers) in areas highly prone to floods during the rainy season. The incremental cost to the climate-resilient structure and poles is expected to be approximately US$1 million. 42. The project will subsidize connection fees for residential and SME customers connected under this component. Currently, new customers are expected to pay minimum connection fees of US$300 for single-phase meters, reaching up to US$600 for three-phase meters and several thousand dollars where 19 South Sudan NDC (November 2021): South Sudan intends to increase share of renewable energy by 8 percent in total by 2030. Currently, there is no master plan; however, activities under technical assistance Component 4 will help develop a master plan for electrification of South Sudan. According to the NDC, South Sudan will also promote the use of energy-efficient technologies and decentralized renewable energy grids, which can be both time- and cost-effective, to increase electricity access in rural areas. Page 21 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) additional poles are required. Under the project, households and SMEs will be required to pay a nominal connection fee to ensure that connections are economical and are made to households and SMEs that have a real demand for grid. 43. The additional grid infrastructure financed under the project will be operated and maintained by JEDCO, but ownership of assets will remain with the GoSS. Given that JEDCO is currently operating the Juba grid under a PPP with MoED and SSEC, JEDCO will also connect new customers using prepaid meters and operate new infrastructure added to the grid. JEDCO will also make a secondee available to the Project Implementation Unit (PIU) to ensure effective operation of the newly constructed grid and will be engaged for coordination with the contractor. 44. Component 1 is tagged to GCRF Pillar 4 - Strengthening Policies, Institutions, and Investment for Rebuilding Better. The specific thematic areas of Pillar 4 are ‘resilient construction’ and ‘green and sustainable growth’. Component 2. Mini-grid pilot (US$13 million IDA equivalent) 45. This component will support the solar plus battery hybridization and rehabilitation of the existing isolated grid in the town of Yei. Based on high-level geospatial analysis and survey activities in Yei, necessary additional generation capacity has been provisionally dimensioned at 3 MW of solar and 12 MWh of battery storage, in addition to the existing 1.2 MW of diesel capacity as backup. Generation under this investment will be completely solar-based renewable. This intervention aims to electrify about 10,000 households including refugees and 400 commercial and institutional customers. Geospatial analysis will be conducted to determine locations with low flood risk for the solar installation and batteries. The distribution network will be designed with 7-meter clearance, concrete poles, and pole- mounted transformers. The component will include investments in streetlights in Yei. 46. Yei has been provisionally selected as a pilot mini-grid site based on the following criteria. However, given the fluid political and security situation in the country, the site selection is subject to change during the implementation. (a) High potential electricity demand. According to a survey and consultation with various potential anchor customers, sizable electricity demand including from United Nations (UN) agencies, more than 30 non-governmental organizations (NGOs), factories, and commercial customers were identified. (b) Existing generation and distribution assets. In 2008, the Yei Electricity Cooperative Organization (YECO), which is a community-based organization, commissioned operation of the Yei grid with support from USAID and operated by National Rural Electric Cooperative Association (NRECA), a private company. While grid operation has been suspended since 2016 as a result of conflict, destroyed or dilapidated equipment, and diminished capacity following NRECA’s departure, diesel generators of 1.2 MW capacity are still functional, though the grid network needs to be replaced and rehabilitated. 20 20 SSEC, YECO Asset Value and Assessment Report for Yei River County, Central Equatoria State, 2022, Republic of South Sudan. Page 22 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) (c) GoSS experience and familiarity with the site. SSEC assessed existing generation and distribution assets in Yei in May 2022 and is relatively familiar with its characteristics and needs compared to other more remote or inaccessible urban centers outside of Juba. (d) Favorable security situation. While the Government has identified several regional capitals and cities as high priority for electrification, in many cases the current security situation in those cities or along the roads connecting those cities to Juba makes intervention there infeasible at this point. Yei’s proximity to Juba and relatively favorable security situation help mitigate these risks. 47. The Yei mini-grid pilot is expected to be implemented as an operating concession model between MoED and a private operator. Under the operations concession model, an EPC contractor would be competitively procured to hybridize, build out, and rehabilitate existing generation and distribution assets, following which a private operator would be procured on an operations concession basis for a predetermined period. While ownership of the assets will remain with the GoSS, the operations concessionaire, which could be the EPC contractor depending on market response, would be responsible for all aspects of day-to-day operation of the grid, including managing generation and distribution assets, selling power to customers, collecting payment from customers, and conducting routine operation and maintenance (O&M), and would recover its costs plus a fee directly from collected tariff revenues. Ownership of the assets and responsibility for major investments, including for grid extension and densification, would remain with the public sector. The private operator would be required to meet the specified power quality, reliability, and customer service standards and contribute to the capacity building of related government entities to enable increased local engagement and sustainability over time. Following the initial concession period, the GoSS would be able to decide whether to renew, retender, modify, take over, or cancel the concession. An owner’s engineer as well as legal advisor would be recruited to guide the GoSS on the procurement and the operations concession contract, ensuring that risks are appropriately allocated and mitigated, and potential contingencies anticipated. Figure 4. Service Delivery Model 48. The operating concession model was selected as the pilot operating model as there is insufficient scale and capacity to warrant a full concession, but the approach may be further refined during implementation based on additional private sector feedback. Market sounding and experiences with mini-grid PPPs in other countries in Sub-Saharan Africa suggest that the small size and associated transaction cost of the Yei mini-grid are unlikely to attract significant interest from capable private Page 23 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) investors, who typically favor a larger portfolio approach in which they can benefit from economies of scale. The few mini-grid developers who have contemplated and made initial inroads into setting up fully privately financed and operated grids generally remain highly tentative in their commitments under high perceived political risk and regulatory uncertainty. At the same time, the GoSS currently lacks the experience and capacity to spread project resources across multiple sites, simultaneously engage in several PPPs, and handle individual site-specific regulation and contracting in the absence of a clearer PPP framework and also lacks even basic information on the condition of existing infrastructure and likely energy demand for many candidate sites. At the same time, given the relatively low number of private sector players that are active in or considering market entry into South Sudan, the project will continue a robust market consultation process, involving IFC where appropriate, and will ensure that the ultimate contractual model deployed is one that best supports the joint interests of the GoSS and the private sector. 49. The pilot in Yei will strengthen the Government’s procurement and contracting capacity and ability to collaborate with a private operator and will be crucial to inform the GoSS’s general strategy for future urban electrification outside of Juba. The project will support the GoSS in preparing bidding and contractual documents for the Yei mini-grid specifically as well as strengthening the general framework for power PPPs (Component 4). The Yei pilot will provide critical learnings on the efficacy of the particular model deployed as well as any other gaps in the GoSS’s capacity to deploy mini-grids in urban centers outside of Juba. These experiences, along with the strengthened legal and regulatory framework, will ensure that future public resources mobilized to scale up urban electrification outside of Juba are deployed in the most effective manner. 50. In addition to financing rehabilitation, hybridization, and densification of the Yei mini-grid, the component will finance feasibility studies for selected state capitals and other urban centers outside of Juba, including potentially the towns of Maridi, Kapoeta, and Torit. For many potential mini-grid sites across the country, MoED and SSEC lack even basic information on the condition of existing infrastructure and the energy and infrastructure needs of those communities. This activity will therefore fund stocktaking of existing infrastructure and demand and energy consumption profiles as well as preliminary mini-grid designs in anticipation of future financing from the World Bank, other development partners, or private investors. 51. For climate resilience and adaptability, investments under this component will proactively factor in increased flooding risk as part of the planning and procurement process. Geospatial analysis will be used to determine locations with lower flood risk for grid densification and extension investments. The overhead distribution system is expected to be designed with 7-meter above ground clearance using concrete poles and foundations and pole-mounted transformers (instead of wood poles and ground- mounted poles) in areas highly prone to floods during the rainy season. 52. Component 2 is tagged to the GCRF’s Pillar 2, protecting people and preserving jobs, specifically on special support for refugees/IDPs and Pillar 4, strengthening policies, institutions and investments for rebuilding better, specifically on resilient construction and green and sustainable growth. Component 3. Off-grid electrification of health and selected public institutions through standalone solar systems (US$10 million of which US$7 million IDA equivalent and US$3 million PHRD grant) Page 24 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) 53. This component will finance the delivery of solar and battery-based off-grid solutions for selected health and other public institutions such as education in rural areas. The health sector focus will be on Payam 21-level hospitals (population of 25,000 and over) and primary health care centers (PHCCs). This component is aligned with Priority Area B (Rural Access to Energy Supply) of the TICAD V grants provided by the Japan PHRD fund, which are directed to increase the delivery of off-grid electricity and other energy services in rural areas of FCS in African countries. The component will cover health institutions throughout the country, starting with the states in the Greater Upper Nile Region in which the World Bank is already active (Upper Nile, Jonglei and Unity states, Ruweng Administrative Area, and Greater Pibor Administrative Area), as well as other states identified as a result of further assessment in coordination with the Ministry of Health (MoH), based on the structural integrity of the buildings, level of service provided (availability of CEmONC services and so on), population coverage, preexisting use of electricity, and presence of internal wiring. 54. The component will prioritize health institutions with large catchment populations to maximize impacts. This will include institutions in relatively large regional towns and settlements, including host communities and refugees in Jamjang (Ruweng Administrative Area) and Maban (Upper Nile State). The institutions strengthening CEmONC and reducing maternal and newborn mortality in supported health institutions will have particular benefits for women and girls, especially young mothers. 55. The component will build on ongoing health center electrification efforts currently implemented by United Nations Children’s Fund (UNICEF) with support from the World Bank. UNICEF is currently implementing solarization of 12 secondary health institutions which deliver CEmONC in the Upper Nile and Jonglei regions, providing 24-hour power to facilitate consistent access to essential services. Under this project, UNICEF is providing off-grid solar systems for 12 health institutions, including delivery and operation of the systems through a network of local solar system suppliers with which it has signed long-term agreements. UNICEF also conducts remote monitoring of systems and has a dedicated team of in-house technicians to support O&M. Based on preliminary assessments carried out by UNICEF for an additional 187 health institutions, in-depth analysis will be conducted to determine beneficiary health institutions for the project during the early stage of project implementation. 56. UNICEF’s performance under the proposed energy project will be verified by a third party to be contracted by the Government. The project will also ensure that UNICEF builds internal capacity at MoED and other relevant sectoral ministries to strengthen Government ownership and sustainability. As is typical under these arrangements, UNICEF will charge a fee based on the size of funds under implementation. 57. One of the most critical aspects of the proposed activity is to ensure the sustainability of O&M of installed equipment. The project is exploring various options to this effect: (a) applying the model by UNICEF, who sign O&M contracts with the suppliers of the solar equipment for the duration of one year for major equipment issues, which could be extended under the proposed project; UNICEF is also planning to train local technicians to cover multiple health institutions; (b) providing limited electricity services to the local community (for example, phone charging) in exchange for a fee, from which health centers may be able to build up reserves to cover necessary maintenance; and (c) setting up escrow accounts or other dedicated funding vehicles to ensure the availability of long-term O&M financing. The project will seek to 21 Payam is the lowest unit of local government before chiefdom in South Sudan. Page 25 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) use the initial period of UNICEF responsibility for O&M to develop longer-term arrangements. Considering the remoteness of the health institutions from main cities and the risks posed by increased flooding to accessing the health institutions, any option adopted by the project will have to ensure availability of locally based technicians to ensure uninterrupted daily O&M services for minor issues. 58. In parallel to electrifying health institutions, the component will explore the opportunities and ways to electrify other public institutions, especially those related to education in rural areas, by engaging with the associated government authorities as well as the local stakeholders. Given the importance of education in promoting long-term growth in South Sudan, schools and other education institutions will be prioritized when it comes to providing reliable and affordable off-grid solutions. Building on the experience in the health and education sectors, ways to best serve the energy demand for other sectors, including but not limited to water and agriculture, will also be explored. 59. Component 3 is tagged to the GCRF’s Pillar 2, protecting people and preserving jobs, specifically, routine health services and special support for refugees/IDP; Pillar 3, strengthening resilience, specifically, crisis preparedness and adaptive social protection system; and Pillar 4, strengthening policies, institutions and investments for rebuilding better, specifically, resilient construction, green and sustainable growth. Component 4. Technical assistance and capacity building (US$10 million IDA equivalent) 60. This component will provide technical assistance to MoED, SSEC, and other relevant institutions to build the necessary legal, regulatory, and institutional foundation for sustainable sector growth. The component will also provide funding to support project implementation and strengthen day-to-day institutional capacity and operations. The activities needed to operationalize the project (Subcomponent 4.4) will be prioritized, followed by legal, regulatory, and sector planning work (Subcomponents 4.2 and 4.3). Subcomponent 4.1. Development of electricity sector legal and regulatory framework 61. This subcomponent will support refinement and finalization of the 2016 Electricity Bill, revisions to which have been delayed as a result of inadequate resources and relevant expertise at MoED as well as development of any necessary complementary legislation. The existing bill has several gaps and weaknesses, including an overly narrow focus on establishment of a regulatory body and various ambiguities and inconsistencies that could undermine future sector development. In particular, the mandates and powers of MoED and SSEC will need to be further elaborated. 62. The subcomponent will also support development of sector regulations, including a grid code, a tariff setting and design mechanism, and licensing and quality standards. This will include supporting development of an adequate PPP framework in the electricity sector to effectively attract and regulate private sector players, including for connection and dispatch of new renewable energy generators to the Juba network and operation of isolated grids. Though MoED has made it a priority to establish an independent regulatory authority, development of regulations under this subcomponent will not be contingent on the establishment of such an authority and will also be implementable by the MoED until a regulator has been established. The subcomponent will also review and, if necessary, support enhancements to the 2011 South Sudan Electricity Corporation Act, which established SSEC. Page 26 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) 63. Finally, this subcomponent will also support review and updating of the 2013 National Electricity Policy, which has become increasingly obsolete during the political and sector developments in the decade since its publication. Subcomponent 4.2. Electricity Sector Planning and Capacity Building 64. This subcomponent will support generation, transmission, distribution, and electrification planning and development of planning capacity for all associated sector institutions. Rather than expanding significant resources to develop ambitious, high-level, long-term plans in a volatile environment, plans prepared under this subcomponent will focus on the near to medium term and identify a small number of the most likely key scenarios, providing practical recommendations that MoED will be able to implement immediately. This subcomponent will help facilitate sector planning which is consistent with the NDCs and considers hydrological and flood risks. These scenarios may include, for instance, a base case in which a growing number of isolated grids are eventually reinforced through a core transmission backbone and connected to other EAPP grids with significant importation of low-cost hydropower, and an accelerated scenario in which private sector interests in oil or other key industries accelerate development of interconnectors and other climate-resilient infrastructure. Consideration will also be given to integrating flood preparedness in electricity sector planning. Preparation of plans will be sequenced to ensure that key strategic outputs are made available to MoED at an early stage. Particular emphasis will also be given to building in-house planning capacity at MoED, SSEC and other associated sector institutions through modern digital planning tools and extensive training on their use. Subcomponent 4.3. Strengthening of SSEC 65. This subcomponent will support clearer definition and transparency of SSEC’s role in the future development of the sector and strengthen SSEC’s ability to execute it. Though SSEC is nominally the country’s national power utility, its role in the sector has become increasingly unclear given the PPP arrangement in Juba and the lack of usable grid infrastructure elsewhere in the country. Supported by the clearer vision for its mandate that is expected to emerge from the interventions on the legal and regulatory framework under Subcomponent 4.1, this subcomponent will support preparation of business, human resources, and incentive plans to live up to these better-defined mandates and enhance the credibility of SSEC as a sector player through improved transparency, for instance, in the form of regularly prepared and audited financial statements. Subcomponent 4.4. Empowering the selected private companies in the off-grid solar market 66. This subcomponent will target market development of the nascent South Sudanese off-grid solar sector, aiming to support existing South Sudanese businesses already active in off-grid distribution as well as incentivize increased market entry from more established international actors. Specific activities are expected to include initial conceptualization of a demand-side subsidy program, as affordability was identified by the World Bank-financed off-grid market assessment as the main constraint for households in adopting off-grid products; initial design work on a supply-side financing program, potentially including results-based financing grants or concessional working capital loans, in close consultation with existing off-grid businesses and potential entrants; and development of the basic elements of off-grid regulation and public strategy, including definition of quality standards for systems and components, potential tax implications and exemptions for quality compliance, and consumer Page 27 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) awareness building on the advantages of quality systems. The subcomponent will also pilot direct support approaches to off-grid solar companies to help strengthen business models and improve access to grant and debt financing. This could include helping companies to professionalize operations and identify market opportunities, create links with established off-grid companies in neighboring markets, and access concessional financing. Subcomponent 4.5. Providing technical assistance and capacity building to narrow the gender gap in the electricity sector 67. This subcomponent will support the design and implementation of interventions to close the gender gap in employment opportunities and career advancement of women in the electricity sector. The activities under this subcomponent will be informed by the recently completed gender gap assessment (GGA) and gender action plan and implemented mainly by the MoED and SSEC. The targeted activities aim to promote female staff currently employed by MoED and SSEC and support girls who aspire to develop expertise in electricity related fields through career guidance in primary and secondary schools. The subcomponent will work closely with the associated institutions, including potentially the Ministry of Gender, to mainstream gender elements in South Sudan’s electricity sector at various levels. A summary of the findings of the GGA and gender action plan are outlined in Annex 3. 68. Subcomponent 4.6. Support for the Project Implementation Unit (PIU) and capacity building This subcomponent will support the PIU to cover incremental costs of project management. This includes engagement of individual consultants/consulting firms to support specific component activities as well as strengthening of MoED capability in fiduciary management, gender equality, and environmental and social standards for project implementation. Specifically, this will include recruitment of an owner’s engineer (firm or individual) to support detailed design, procurement, and implementation of grid and mini-grid investments under Components 1 and 2. The subcomponent will also include technical assistance to enhance sector fiduciary arrangements, setting up of an environmental and social (E&S) risk management system to enhance E&S capacity through staffing and training on Environmental and Social Framework (ESF) requirements, and gender equality interventions to address the existing gender gap in MoED and SSEC. 69. Component 4 is tagged to the GCRF’s Pillar 4, strengthening policies, institutions and investments for rebuilding better, specifically thematic areas on climate smart policies and incentives and institutional strengthening and capacity building. Component 5: Contingent Emergency Response Component (US$0 million) 70. The objective of this component is to support the GoSS’s response to an eligible emergency. The component will be governed by paragraph 12 of the World Bank Policy on Investment Project Financing (Rapid Response to Crises and Emergencies). If an eligible emergency is being declared, the GoSS may request the World Bank to reallocate project funds to support the response effort. The component would be capitalized by drawing on unused (or uncommitted funds) under Components 1 to 4. The component could also be utilized for processing additional financing should funding for this become available due to an eligible emergency. Prior to the disbursement of this component, the client will prepare a CERC Manual, which will include a summary of the environmental and social assessment and management arrangements, as well as the Emergency Action Plan. The client will also ensure that the environmental Page 28 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) and social instruments required for the CERC are prepared, disclosed and adopted in accordance with the CERC Manual and the ESCP. C. Project Beneficiaries 71. The project will have four groups of beneficiaries, each of them corresponding to different models of intervention. (a) Households and companies, including female-headed households and women-owned companies in Juba and Yei, through Components 1 and 2. Approximately 340,000 people (272,000 in Juba and 68,000 in Yei), which accounts for more than 40% of the population in Juba and Yei, including owners of SMEs, will benefit from new and/or improved access to electricity services. Larger companies and industrial customers will also benefit from grid extension in Juba and new connections in Yei. (b) Patients who use solarized health institutions, particularly the ones in Greater Upper Nile Region. The project will provide solar power to roughly 50 hospitals, targeting mainly the state and county hospitals. About 1.2 million people identified in these catchment areas will benefit from higher-quality health services. (c) Host communities and refugees. Roughly 750,000 people in host communities (453,232 people) and refugee camps (297,024 people) in Juba, Yei, Greater Upper Nile region, and Ruweng Administrative Area will benefit from both improved access to clean electricity and improved security through increased lighting. (d) Energy sector institutions. In addition to the direct beneficiaries such as households and refugees, the energy sector institutions, primarily MoED and SSEC, will be able to strengthen their planning and implementation capacity through technical assistance and capacity building under Component 4. Other sector stakeholders, including consumers and the private sector, will benefit from clearer and more transparent regulatory and policy frameworks. D. Results Chain 72. The project consists of investments in the grid as well as off-grid energy solutions and capacity- building activities to increase access to electricity services and strengthen the institutional capacity of the electricity sector. Activities under components 1 and 2 will increase the number of people with new or improved access to electricity; solarization of health and other public institutions will improve social services offered by those public institutions; activities under component 4 will improve legal and regulatory frameworks as well as the institutional capacity of the electricity sector in South Sudan. The theory of change is presented in Figure 5 and describes the activities under the project components, the associated outputs, and how they contribute to the achievement of the intermediate outcomes and development objectives. Figure 5. Theory of Change Page 29 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) E. Rationale for Bank Involvement and Role of Partners 73. The World Bank has an important role in laying the groundwork for South Sudan’s electricity sector development and creating an enabling environment that can catalyze investment from the private sector as well as other development partners. The long conflict in South Sudan has deprived the country of consistent support and investment in the electricity sector. AfDB’s assistance in rehabilitating the Juba grid and Egypt’s bilateral support on the expansion of isolated grids are the only international aid received to date. The World Bank’s first lending project in South Sudan’s electricity sector combined with the technical assistance to build the necessary legal, regulatory, and institutional foundation will allow South Sudan to accelerate sustainable electricity sector development and encourage more public and private investment. 74. The World Bank has a wealth of experience supporting countries with Sustainable Development Goal 7 - universal access to affordable, reliable, sustainable, and modern energy for all. While the private sector has been effective in operating the Juba grid, the high costs inhibit access to services for most people and constrain productive activity. A well-designed public intervention, including the strategic use of concessional finance and policy guidance, can make electricity services more affordable for all and put the sector on a more sustainable development path. 75. The World Bank will cooperate with external partners to prioritize protecting the most vulnerable groups in need of immediate assistance. The project, particularly under Components 2 and 3, intends to collaborate with humanitarian and development partners, primarily UNICEF and the UNHCR, to leverage their expertise in providing essential humanitarian services to the most vulnerable groups. The UN agencies and some local NGOs will offer additional insight on the project design and implementation to maximize the impacts and help ensure that the most vulnerable groups, including Page 30 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) women, children, and disabled people, are well protected by facilitating direct engagements with the refugee and host communities. F. Lessons Learned and Reflected in the Project Design 76. The project builds on the findings from the World Bank’s recent Pathways to Electricity Access Expansion in South Sudan (P175227) Advisory Services and Analytics, which served as the primary analytical basis for the project design, consisting of a sector diagnostic that identified the main challenges and opportunities in the sector, high-level geospatial electrification planning and mini-grid site identification, and an ongoing off-grid market assessment. 77. The project reflected other FCV countries’ energy access projects and/or analysis into its design, particularly on the implementation structure and project sustainability. Given the weak institutional capacity of FCV countries, the importance of setting up a PIU and/or leveraging other qualified agencies, such as UN bodies, with ample on-the-ground experience and local networks was highlighted for successful implementation. The proposed project has applied these lessons learned as appropriate and suitable to the South Sudan context. To enhance the sustainability of the project outcomes, each project component, particularly Component 4, was carefully designed to incorporate and prioritize capacity building and sustainability elements, ensuring that each component, individually and combined, can lead to long-term sector development. In practice, other country experience and best practices would be limited in terms of relevance and application for several reasons: (a) the sheer size of energy access deficit (more than 90 percent) and the absence of almost all grid infrastructure outside of Juba; (b) near complete lack of sector plans and regulations; and (c) no preceding World Bank operations or analysis of South Sudan’s energy sector. 78. The opportunities and ways to engage the private sector in scaling up the off-grid sector have been carefully reviewed and adapted into the project design. The team studied various models where the private sector was engaged to play a prominent role in the efficient delivery of outcomes and their sustainability. In the case of energy access projects, making a business case for solar home systems by leveraging the private sector, for instance, provided valuable insights on how the proposed project could be further developed. Notwithstanding the importance of the private sector and the huge potential that SHS could bring to South Sudan, the project concluded that the country’s SHS sector is still too nascent to justify direct financing as (a) there is low affordability and there are high barriers to distribution in rural areas; (b) many of the key enabling conditions for SHS market development, such as consumer financing, mobile money, or even cell phone service, are highly underdeveloped or entirely absent; and (c) there are very few private SHS companies and distributors currently active. The project incorporated a technical assistance intervention targeted at SHS companies and retained flexible contractual arrangements for PPPs under the mini-grid pilots, which would not only help spur the market growth but also lay the foundation for more systematic and proactive private sector engagements in future South Sudan energy projects. 79. Considering the unique sector context and severe capacity constraints, the project primarily builds on earlier interventions by the Government and limited development partner activity, including the AfDB-financed rehabilitation of the Juba grid, the USAID-supported creation of rural electrification cooperatives, and the UNICEF-implemented solarization of health institutions. Drawing on these lessons Page 31 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) learned, the project intends to leverage the private sector where appropriate and the extent practical to enhance the efficiency and effectiveness of project implementation. 80. Early lessons from the existing WHR-supported projects suggest the need for strong coordination with CRA and the UNHCR. As the lead entity responsible for coordinating government policy and support for refugees, as well as its presence and key role in all refugee-hosting areas, CRA needs to be represented in project governance structures, including the Project Steering Committee (PSC), and in technical coordination. Similarly, as noted earlier, the UNHCR plays a unique role in delivering support to refugees and host communities, and successful coordination with it will prove essential for high-impact project delivery, including in the project governance structure. Further, early experience with WHR in South Sudan suggests that it will be important to coordinate closely—at both the strategic and technical level—with other WHR-supported projects operating in the same hosting areas to identify complementarities and avoid duplication on the ground. III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 81. MoED will be the implementing agency for all project components. Inside MoED, a PIU will be established to undertake day-to-day coordination and monitoring of implementation of all project components and cross-cutting activities. In addition to MoED staff, the PIU will include secondees from the relevant agencies such as SSEC, JEDCO, and MoH, who will be assigned to support the project implementation. For Component 3, MoED will sign a standard agreement with UNICEF, which was selected based on its unique experience and current work on electrifying health institutions in South Sudan and the capacity to carry out additional work within the framework of Component 3. The summary of the PIU structure and assigned roles is provided in Annex 1. B. Results Monitoring and Evaluation Arrangements 82. The MoED will submit quarterly reports to monitor and evaluate the project progress toward the PDO and the intermediate indicators as well as the implementation of environment and social instruments and gender action plan. The project monitoring and evaluation (M&E) system incorporates the PDO and intermediate indicators that will be used to track both project implementation progress and attainment of the intended objectives at completion. The M&E framework also includes a collection of several sex‐disaggregated results indicators to monitor and assess the progress in implementing gender‐ related activities, including the narrowing of identified gender disparities, and project benefits for women and men. Monitoring results will be a key responsibility of the PIU in coordination with its contractors and other relevant entities. During the project implementation, a midterm review will be carried out to provide the opportunity to thoroughly assess the overall project performance in achieving the development objectives and ensure that lessons learned thus far are considered in implementation over the remaining period. Adjustments, including funding reallocation and implementation arrangement changes, and/or a broader restructuring will be made if and where necessary. At the end of the project, the PIU will also undertake an end‐of‐term review and write a final Implementation Completion and Results Report. Page 32 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) C. Sustainability 83. Public agencies in South Sudan have struggled with operating and managing grids in a sustainable manner due to multiple factors, including the challenge of retaining competent staff due to the low level of remuneration as well as the lack of financial autonomy. The Juba grid is currently operated by JEDCO (formed as PPP). To ensure the sustainability of investment in isolated grids under Component 2, MoED will invite private operators to operate the grid, including for bill collection, with specific key performance indicators. 84. The sustainability of Component 3 hinges on the selection of appropriate service providers and long-term operation plan of installed solar systems. UNICEF, one of the implementation partners, has gained ample experience in solarization of health institutions and training local technicians for managing the installed solar products. Furthermore, the project will procure additional spares and hardware needed for O&M and seek a way to transfer O&M costs gradually to MoH or the health institutions. Alternative models, such as providing limited electricity services to the local community (for example, phone charging) in exchange for a fee, from which health centers may be able to build up reserves to cover necessary maintenance, will also be explored. IV. PROJECT APPRAISAL SUMMARY A. Technical, Economic and Financial Analysis (if applicable) Technical Analysis 85. The World Bank has reviewed multiple technical materials related to the project . These include the feasibility studies carried out under the AfDB-funded project as ‘Phase 2’ of Juba grid strengthening, technical materials prepared by MoED/SECC/JEDCO on the proposed geographical areas of interventions in Juba, and site-specific assessment of solarization of health institutions carried out by UNICEF. These materials were also supplemented by the World Bank’s sector diagnostics as well as the countrywide geospatial analysis to assess the electrification needs. The World Bank also carried out site visits to potential intervention areas in Juba and Yei. Based on the technical analysis, the project is technically sound to achieve the PDO. However, more in-depth technical review will be needed before engaging contractors to perform the physical work. Economic and Financial Analysis 86. An economic analysis has been carried out to assess the expected impact of the project and its economic viability. Project economic viability was confirmed with an economic internal rate of return (EIRR) of 35.9 percent and a net present value (NPV) of US$175 million. A separate economic analysis for the three components was also conducted. However, it is worth mentioning that the analysis for the mini- grids component and health institutions component is based on conceptual design, which may change after scope and design finalization. The economic viability is further enhanced by including greenhouse gas (GHG) benefits. Financial analysis was not carried out given the grant-based nature of this operation and that the implementing agency (MoED) is not expected to receive revenue associated with the investment. The analysis also covers economic benefits to host communities and refugees, who are an Page 33 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) integral part of beneficiaries for all investment component interventions (see Annex 2 for more detailed economic analysis). Table 1. Project’s EIRR and NPV Component EIRR NPV (at 6% EIRR Including NPV Including (%) discount rate) GHG GHG (US$, millions) Accounting Accounting (%) (US$, millions) All project 35.9 175.00 45.6 219.15 Component 1. Grid densification and extension 61.5 174.02 70.7 224.41 in Juba and vicinity areas Component 2. Mini-grid pilot 11.2 6.00 13.2 10.00 Component 3. Off-grid electrification of health 16.4 6.90 18.0 8.90 and selected public institutions through standalone solar systems B. Fiduciary (i) Financial Management (FM) 87. The outcome of the FM assessment is that basic FM systems and capacity exist in MoED but the overall status is considered weak. Based on these findings, the overall FM risk rating for the ministry is considered High; upon implementation of proposed mitigation measures, the residual risk rating is Substantial. 88. FM assessment of the MoED was conducted for the implementation of the project. The assessment was conducted in accordance with the Financial Management practices manual issued by the World Bank’s Financial Management Sector Board on November 3, 2005, and the Financial Management Manual for World Bank-Financed Investment Operations issued on March 1, 2010. The assessment covered the six key FM elements of budgeting, accounting, internal control including internal auditing, financial reporting, funds flow, and external auditing and oversight arrangements of the implementing entity. 89. The objective of the assessment was to determine whether MoED (implementing entity) maintains adequate FM arrangements to ensure that (a) funds channeled into the project will be used for the purposes intended in an efficient and economical manner; (b) the project’s financial reports will be prepared in an accurate, reliable, and timely manner; and (c) the project’s assets will be safeguarded from loss, abuse, or damage. 90. The outcome of the FM assessment was that significant capacity gaps exist within the implementing ministry, which could materially affect the implementation of the project. This includes inadequate budgeting capacity; lack of a budget monitoring tool; inadequate accounting capacity and system; weak internal control arrangements including segregation of duties in payment processing and lack of internal audit function, in addition to failure to prepare financial reports; and delays in external audit by the National Audit Chamber. Page 34 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) 91. As a mitigation measure a Project Implementation Unit (PIU) staffed with skilled, qualified, and experienced consultants including a Financial Management Specialist will be set up in the ministry to manage this project and other future projects under the ministry. FM staff at the PIU will be headed by a consultant FM specialist, supported by a project accountant hired for the project and complemented by finance staff deployed by the MoED as part of capacity building as the World Bank gradually transitions to a Government-led implementation model. Budgeting and accounting capacity will be improved with the setting up of the PIU and hiring of the qualified and experienced consultants and staff. Training will be provided to the team and necessary accounting, budgeting, reporting, and control tools will be put in place. Internal control systems will be enhanced with the establishment of the internal audit unit. External audit capacity will be enhanced using private audit firms to support the National Audit Chamber. (ii) Procurement 92. Public Procurement Governance - Country Context. Procurement in South Sudan is governed by the Public Procurement and Asset Disposal Act 2018. The Procurement Act 2018 was supposed to replace the Interim Public Procurement Regulations adopted in 2006; however, the Procurement Act remains nonoperational. Public procurement does not have procurement regulatory authority as provided by the law, and procurement regulations and standard procurement documents, including manuals, have not been finalized. The Government, however, has made efforts to expedite the procurement reforms including establishing the procurement authority and preparation of regulations to operationalize the law. Recently, the GoSS established a PFM Oversight and Technical Committee with membership comprising both the Government and development partners with the aim to support the economic reforms envisaged in the Peace Agreement. Establishing a functional procurement system is on the Government’s priority reforms agenda. Nonetheless, most ministries, departments, and agencies (MDAs) do not yet have functional procurement units. 93. All project procurements will be carried out in accordance with the World Bank Procurement Regulations for Investment Project Financing (IPF) Borrowers for Goods, Works, Non-Consulting and Consulting Services dated July 1, 2016, and revised November 2020. The project will be subject to the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006, and revised in January 2011 and as of July 1, 2016, and other provisions stipulated in the Financing Agreements. 94. Institutional procurement arrangement and oversight. The MoED will be responsible for procurement implementation. A PIU will be established under MoED and shall be strengthened through recruitment of experienced procurement consultants including other technical experts that are necessary to process the implementation of project activities. The PIU will have operational, coordination, and technical management responsibility of the project. The procurement decision-making process will utilize the internal institutional structure of MoED, including the Procurement Committee (PC). As the project’s Implementing Agency, MoED will work in collaboration with other supporting agencies such as SSEC and other beneficiary institutions on procurement as necessary. The PIU will closely coordinate with these beneficiary institutions for their technical inputs at each stage of the procurement process. 95. Project Procurement Strategy for Development (PPSD) and Procurement Plan. The MoED, in coordination with SSEC, prepared PPSD which set out the selection methods and approach to be followed during project implementation in the procurement of goods, works, and non-consulting and consulting Page 35 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) services financed under the project. The Procurement Plan for the first 18 months has also been prepared and will be reflected in the Project Implementation Manual. The Procurement Plan will be updated every six months or as required. 96. Procurement capacity assessment. Procurement for the project will be carried out by the PIU. The procurement capacity assessment noted the agency’s gaps. The findings indicate that most MDAs, including MoED, have no experience in public procurement given the limited budget provision for service delivery; most MDAs do not have functional procurement units. Limited and minor procurement activities such as purchases of fuel, vehicles, and so on have been undertaken as administrative functions and there are no dedicated procurement staff. The agency has no experience in implementing World Bank-financed projects. In 2015, ESTAP was cancelled at the project preparation advance stage due to the conflict. The key procurement capacity risks include the incomplete public procurement framework and lack of functional procurement units and oversight functions in the country, including weak PFM governance. The World Bank’s experience and assessment of key issues and risks concerning project procurement processes in South Sudan has also shown several challenges, which include: (a) the narrow window of opportunity (only about six months) in the dry season when most of the country becomes accessible physically; (b) considerable delays in procurement processing, with a significant part of the time spent on the preparation of tender specifications, terms of reference, and evaluation; (c) a nascent market and high costs for goods; and (d) weakness in capacity of procurement staff, procurement planning, procurement process administration including award of contracts, contract management, contract oversight, and procurement record keeping. 97. Procurement risk mitigations include the following: (a) application of World Bank standard procurement documents for all procurement activities and a procurement manual to be developed and adopted by the project; (b) a PIU to be established and supported by experienced procurement consultant and technical experts; (c) MoED to deploy dedicated civil servants to the PIU as part of a knowledge transfer arrangement including continuous procurement trainings; (d) project preparation advance to include an advance procurement of key activities including staffing at the PIU; and (e) establishment of enhanced contract management or M&E team. Based on the above procurement risks, the overall procurement risk rating of the project is High, and given the country context, the residual risk remains High, given that the significant activities will be infrastructure development. 98. National procurement arrangement. When approaching domestic vendors, the country’s own procurement procedures may be used. When the borrower uses its own national open competitive procurement procedures as set forth in Public Procurement and Property Administration Proclamation No. 649/2009, such arrangements shall be subject to the provisions of paragraph 5.4 of the Procurement Regulations. The national standard bidding documents will be modified to reflect the requirements included in this provision including the requirement for disclosure of beneficiary ownership firms. 99. Implementation support and post review. The World Bank will prior review the contracts based on the risks and the complexity of activity, which will be indicated in the Procurement Plan in the Systematic Tracking of Exchanges in Procurement (STEP) tool. The prior review contracts will be updated in the Procurement Plan annually or as necessary during implementation, based on the procurement capacity assessment during implementation support missions. The World Bank will carry out regular procurement supervision missions on an annual basis and procurement post review and/or independent procurement reviews (IPRs) on an annual basis. The sample contracts for the procurement post reviews Page 36 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) and IPRs will be risk based. The World Bank will undertake the post reviews online, accessing procurement documents and data from STEP. The recipient shall upload all procurement process documentation and information in STEP at each stage of the road map. On completion of the contracts, the recipient shall also upload completion documents including inspection, acceptance, delivery, and final payment evidence in STEP. Depending on the progress in building procurement capacity at the PIU, Hands-on Enhanced Implementation Support (HEIS) can be considered upon request from MoED. 100. STEP. All contracts, regardless of the amount, must be conducted through STEP. Comprehensive information on all contracts for goods, non-consultancy services, and consultant services awarded for all contracts subject to the World Bank’s prior review as well as post review will be available in STEP. This information will include, but not be limited to, (a) a brief description of the contract; (b) estimated cost; (c) procurement method; (d) timelines of the bidding process; (e) number of bidders who participated; (f) names of rejected bidders and reasons for bid rejection; (g) date of contract award; (h) name of awarded supplier, contractor, or consultant; (i) final contract value; and (j) contractual implementation period. 101. The MoED will take necessary measures to mitigate the risk of forced labor. There are allegations of forced labor risks associated with the polysilicon suppliers. The recipient 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). In addition, the recipient will include enhanced language on forced labor in the procurement contracts. . C. Legal Operational Policies . Triggered? Projects on International Waterways OP 7.50 Yes Projects in Disputed Areas OP 7.60 No . 102. OP 7.50 (Projects on International Waterways) will be triggered, as the project (Component 3) activities foresee installation of solar panels for selected health institutions, which may also be used to pump underground water in the vicinity. Project activities may rely on water from tributaries and connected aquifers of the White Nile River Basin. However, the quantity of the water to be used as part of these activities will be marginal. While the project anticipates installation of 50 solar systems, only a small portion of the water is expected to be used for water pumping. The project will not support the construction of new boreholes and will only use water from existing wells. Hence, exception to the notification requirement under paragraph 7(a) of the policy has been requested and approved. D. Environmental and Social Environmental Risk Management 103. The project is expected to have positive environmental outcomes as it, among others, will finance activities that may increase the generation and distribution of renewable energy. However, Page 37 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) various potential environmental, health, and safety risks can materialize during the construction and operation phases of mini-grids, SHS, and distribution lines, including at the end of the life cycle of the off- grid materials and products. (a) Generation of hazardous and non-hazardous wastes including e-waste. A solar power system involves the use of rechargeable batteries including lithium-ion, nickel metal hydride, nickel cadmium, and lead acid batteries. These batteries, especially nickel cadmium and lead acid batteries, can potentially have adverse environmental and health impacts if they are not properly transported, stored, and disassembled/recycled. They can cause serious environmental impacts because of the chemicals and heavy metals, namely mercury, lead, cadmium, and nickel. Improper disposal of batteries can cause air pollution and soil and water contamination. Toxic gases could be released into the environment from inadequately maintained and/or physically damaged lithium-ion batteries. (b) Another emerging environmental issue associated with solar PV energy systems is exhausted solar panels. Leachate generated on landfills of PV solar panels could cause water and ground pollution. There are also potential environmental risks from the use of backup diesel generators. Generator sets (diesel generators) can contribute to air pollution during operation and may account for water/ground pollution from fuel spillovers during transportation and storage. Other pollutants include packaging materials of PV panels, battery banks, and so on. Localized air quality pollution could result from operating machinery (that is, fumes) and dust generation from earthworks. Wooden poles for distribution are treated with chemicals during manufacturing that can lead to leaching and the formation of surface residues at the right-of-way (ROW). (c) Small-scale soil erosion, sedimentation, and landscape disturbance. This may result from the civil works of mini-grids, which, among others, include the construction of a powerhouse for the storage of the battery banks, generator sets, battery inverters, and combiner boxes, as well as during erection of distribution network poles. (d) Potential risks to flora and fauna. Wooden poles may be used for distribution line construction, which can lead to cutting of a considerable number of trees. Vegetation clearance under and around mini-grids to not obscure the incoming solar radiation, clearance of ROW, and fuel and oil leakages (during transportation and storage) can affect wildlife and ecosystems. Accidental fire, which could be caused by vegetation/trees falling on the distribution network cables; improperly stored/handled fuel; overheating of battery banks; and so on may have adverse impacts on flora and fauna. Solar systems can pose risks to birds that may confuse solar panels with water bodies. (e) Potential health and safety risks to workers and community. Construction and operation activities may expose project workers to various accidents. Occupational accidents can occur in all stages of the life cycle of off-grid solar materials, from manufacturing, installation, and maintenance to decommissioning and recycling. The transportation of materials and machinery may lead to an increase in traffic congestion and road accidents. Uncontrolled growth of tall trees or vegetation within the transmission ROW may aggravate and lead to an increased risk of electrocution, due to contact of branches and trees with live distribution lines, which ignites forest and brush fires that ultimately endanger the workers who are on duty. Accidental fire may be caused by trees falling on distribution network cables, Page 38 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) improperly stored/handled fuel, and overheating of battery banks. Diesel generators, vehicles, and construction machineries’ activities can increase the noise levels, which can affect project workers and the communities residing near the project sites. (f) MoED has prepared an Environmental and Social Management Framework (ESMF) which will be used as a basis for identification and management of environmental and social risks of the project. It has also prepared an Environmental and Social Commitment Plan (ESCP) which outlines, among others, the ministry’s commitment to (i) implement the project activities in compliance with the requirements of the applicable Environmental and Social Standards (ESS) of the World Bank’s ESF; (ii) screen the subprojects in line with the ESMF and prepare site-specific E&S risk management instruments (for example, Environmental and Social Management Plans [ESMPs]); (iii) put in place E&S risk management implementation arrangements, including the deployment of qualified staff at different levels of implementation; and (iv) monitor and report on the implementation of E&S risk management tools. The ESCP was disclosed on March 10, 2023 on the World Bank’s external website as well as on March 16, 2023 on the MoFP’s website. It has also prepared a Security Risk Management Plan. Other-specific E&S risk management instruments and plans (for example, ESMPs) will be prepared during project implementation (before commencing sub- project activities) following the requirements of the overall ESF and guidance provided in the ESMF. The ESMF was disclosed in the World Bank’s external website on December 31, 2022.22 It has also been disclosed in-country and is available on the MoFP’s website. Social Risk Management 104. The project social risk is rated as Substantial mainly due to the broader contextual risks such as political instability (induced by potential civil unrest), contextual GBV/sexual exploitation and abuse (SEA) risk, risks in the accessibility of subprojects for monitoring and support, and proper utilization and implementation of the project’s E&S risk management tools. There will not be significant land acquisition. The construction of a grid system, hybrid and solar PV plus battery storage mini-grid for households and companies will require small-scale land acquisition. However, as the exact footprint of the activities is not identified during preparation, a framework approach has been followed. 105. Temporary loss of livelihoods mainly applies to people doing business on the streets of Juba. These are mainly women (in most cases women are involved in informal income-generating activities) who will be economically displaced temporarily. (a) Risks associated with influx of migrant workers and social interactions. The workforce for the project will likely interact with the local people and this may lead to increased inherent risk of spreading sexually transmitted diseases such as HIV and AIDS, as well as social tensions among the workers and community residents. To the extent possible, the contractors who will be encouraged to recruit workers from the local community and avoid migrant workers. The contractors that will be engaged in the physical construction will be required to establish a code of conduct that all workers will need to sign and adhere to. 22https://documents.worldbank.org/en/publication/documents- reports/documentdetail/099325012312239814/p17889108ae3bd090a5aa031634e83640b. Page 39 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) Further, the project will ensure that project workers are sensitized on proper social behavior and conduct with respect to community norms. (b) GBV and violence against children. GBV, violence against children, and child labor are highly anticipated given the fragile environment, particularly within the displaced communities. This could arise from the families that may get compensation money and fail to use it properly. A separate GBV Action Plan has been developed; it should be implemented and adhered to by the contractor and MoED. Further, the project has prepared a labor management procedure, which provides guidelines to manage labor and working conditions, including avoidance of child and forced labor. For management of GBV/SEA- related risks, the project will sensitize communities, including children, on the possible causes and effects of GBV and how it can be avoided. Women and children, particularly those in refugee and host settings, will be sensitized on speaking up and reporting cases of violence and abuse. A grievance management system suitable for GBV-related cases will be constituted, and the mechanisms through which incidences can be reported and resolved will be popularized. For land acquisition and livelihood-related impacts, a Resettlement Policy Framework has been prepared, consulted upon, and disclosed. The Resettlement Policy Framework was disclosed on March 10, 2023 on the World Bank’s external website and the MoFP website on March 16, 2023. Further, the client has conducted a social assessment, a security risk assessment and security management plan, and labor management procedure proportionate to the risks and impacts of the project and a GBV risk assessment. (c) Regarding the risk of forced labor, under ESS2, where there is a significant risk of forced labor related to primary supply workers, the borrower requires the primary supplier to identify those risks. If forced labor cases are identified, the borrower will require the primary supplier to take appropriate steps to remedy them. Ultimately, where remedy is not possible, the borrower will, within a reasonable period, shift the project’s primary suppliers to those that can demonstrate that they are meeting the relevant requirements of ESS2. Before beginning the procurement process, the borrower will undertake a market analysis to identify the possible sellers of solar panels to the project. The bidding document will emphasize forced labor risks in solar panels and components and will require that sellers of solar panels will not engage or employ any forced labor among their workforce. Bidders will be required 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). In addition, enhanced language on forced labor will be included in the procurement contracts. The World Bank will prior review procurements of solar panels and components to ensure that enhanced provisions are used by the borrower. 106. Stakeholder engagement. The project will employ a consultation, engagement, and communication strategy, which is included in the Stakeholder Engagement Plan (SEP). The SEP has been developed to provide a detailed road map on the consultation and engagement of relevant stakeholders including affected persons and interested parties, especially the vulnerable and disadvantaged groups including refugees and host communities, during project implementation, undertaking the identification and nature of the anticipated stakeholders as well as their information requirements, timing, and methods Page 40 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) of engagement throughout the project life cycle. The SEP was disclosed on the World Bank’s external website on March 5, 2023 and on the MoFP’s website on March 16, 2023. As part of the citizen engagement process, the project-level grievance redress mechanism (GRM) provides a framework for complaints tracking, response, and resolution within the stipulated response times, thus closing the feedback loop. The MoED PIU will also engage citizen engagement personnel (social/gender specialists) and carry out periodic hearings to ensure opportunities for stakeholders to have dialogue with the sector authorities. The stakeholders’ feedback will be integrated into project interventions and inform any necessary course of action. For activities that target host communities and refugees, MoED will coordinate with CRA and the UNHCR to use existing stakeholder engagement mechanisms. Efforts will be made to ensure the project’s GRM is accessible to the refugee and host community populations to take part in the project interventions. Given the sensitive nature of GBV complaints, the GRM provides different ways to submit grievances. All grievance uptake channels can be used to report on GBV/SEA/sexual harassment (SH)-related grievances and all personnel directly receiving grievances will be trained in handling and processing these grievances. The Results Framework includes an indicator in relation to stakeholder engagement as feedback from public hearings incorporated into project design and published in communication materials. 107. The project will offer options for people to express their views and concerns or file a grievance with distinct means of communication, at the project locality, such as a phone number of a grievance hotline operator, set up and managed by the PIU, that will be widely disseminated among project stakeholders. A help desk will also be set up and manned by the implementing agency staff in close coordination with local authorities during project implementation in an area. Stakeholders can inquire about information related to project activities, or they can file a grievance directly with the person at the help desk. Furthermore, for an anonymous way of filing a grievance or providing feedback, a suggestion box will be installed at the nearest Boma or Payam office of the subproject site. Feedback, comments, and grievances on the project design and implementation will be expected from community members (including vulnerable groups, refugees, host communities), national and state governments, local governments, civil society organizations and NGOs, development partners, business community, PSC, county coordination committee, and so on. MoED will employ its public relations, outreach, and communications activities through radio broadcasts, newspapers, leaflets, notice boards, workshops, community meetings, and so on at the county, Payam, and Boma levels. The feedback mechanism will be able to receive, register, and address suggestions, concerns, and grievances on any project-related issue in a safe and confidential manner, as deemed relevant. Gender 108. This proposed project has a strong focus on bridging the gender gap through identifying key strategic gender intervention areas that intend to attract, retain, and promote women professionals in the energy sector. To facilitate this, adoption of the five-year gender work plan is expected to be done before the grant effectiveness. Strengthening institutional structure and supportive legal frameworks are a priority that includes establishing gender units under the HR Departments of MoED and SSEC, appointing two gender focal persons (women and men) in the gender units of MoED and SSEC, and hiring a gender specialist in the PIU will be given a priority. To create an enabling workplace environment for female and male employees in the energy sector, the project will support the development and adoption of gender- responsive HR Policy with equal wage provision for both MoED and SSEC. Inclusion of gender key performance indicators for leaders and managers to maintain institutional accountability and Page 41 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) development and enforcement of gender equality policy as well as GBV/SEA/SH Policy, code of conduct, and GRM are also among key priority areas. The five-year gender work plan will guide implementation of several activities including targeted long- and short-term capacity development programs for existing female employees to get promoted by the end of their studies, gender equality awareness creation campaigns towards engaging male champions, and school outreach program to inspire girls and boys to aspire perusing their studies in STEM fields. 109. Gender M&E. Three gender-related intermediate indicators are included in the project Results Framework to track progress toward closing the gender gap in employment and career advancement in the energy sector. The indicators are: (a) adoption of institutional gender responsive human resource policy with equal wage provision by MoED until June 2025, (b) adoption of institutional gender responsive human resource policy with equal wage provision by SSEC until June 2025, and (c) female staff completed first degree programs and subject to promotion. These indicators are part of the M&E plan of the project so that annual implementation progress will be reported, and periodic measuring of progress will be followed. Climate Mitigation and Adaptation 110. The project supports the implementation of the WBG Climate Change Action Plan. Investments in grid densification and extension, mini-grid pilots, and off-grid electrification of health and selected public institutions through solar systems directly contribute to lowering carbon emissions and actively support South Sudan’s low carbon development pathway. On climate adaptation, the project has assessed the potential impact of physical climate risks on its investments and has integrated adaptation measures into the design of the project to address these risks. The entire process of grid densification and extension and mini-grid expansion will proactively factor in climate resilience elements—particularly to address flooding—from planning to procurement. The procurement and placement of standalone solar systems will factor in flooding risk for health institutions that are high risk (for example, by using rooftop or elevated systems), and staff will be trained to improve continuity of supply during flooding events. V. GRIEVANCE REDRESS SERVICES 111. Grievance redress. Communities and individuals who believe that they are adversely affected by a project supported by the World Bank may submit complaints to the existing project-level grievance mechanisms or the Bank’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project-affected communities and individuals may submit their complaints to the Bank’s independent Accountability Mechanism (AM). The AM houses the Inspection Panel, which determines whether harm occurred, or could occur, as a result 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), please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the Bank’s Accountability Mechanism, please visit https://accountability.worldbank.org. Efforts will be made to Page 42 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) ensure the project’s grievance redress mechanism is accessible to the refugee and host community populations. VI. KEY RISKS 112. The overall risk rating for the proposed project is High. In particular, the following risks are considered high: (a) Political and Governance, (b) Institutional Capacity for Implementation and Sustainability and (c) Fiduciary. 113. Political and governance (High). A national election is scheduled in 2024 when the current transition government’s mandate will expire. There is a high risk that the forthcoming election will arouse political instability and conflict across the country, hampering smooth project implementation. To mitigate the political and governance risks, the project will remain as agile as possible in its design and implementation arrangements. If implementation becomes infeasible for political reasons, particularly the project components that rely heavily on government engagements such as Component 3 (Off-grid electrification of health and selected public institutions through standalone solar systems), which is primarily assigned to the PIU, a pre-selected third party will be contracted to lead the implementation. The team will also work with the World Bank as well as local communities, other international organizations, and diplomatic communities to carefully monitor the situation, adapt to new developments, and ensure effective project delivery. Even with these mitigation measures, unforeseeable residual risks will remain high. Political risks related to refugee issues are minimal, as the Government and South Sudanese have adopted—in policy and practice—a highly generous posture toward refugees. 114. Macroeconomic (Substantial). The project’s exposure to the country’s macroeconomic risks is rated Substantial. While the GoSS has taken significant steps to mitigate these risks, including the unification of exchange rates, the macroeconomic situation remains volatile, especially in the context of rising global inflation and commodity prices. Since most of South Sudan’s electricity cost is and will continue to be denominated in hard currency (including for imported fuel cost, payment to IPPs, payments to imported power, and payment for off-grid solar systems), depreciation of the South Sudanese pound may result in higher cost of electricity services to customers paying in the local currency. In addition, global supply chain disruption may result in higher project costs. A World Bank survey of the solar market suggests that the cost of solar PV panels and associated accessories (for example, inverters and transformers) and their transport cost increased by 20–30 percent between 2021 and 2022. These risks will be mitigated by allowing for a contingency budget in the project costing and providing technical assistance on the electricity tariff framework. 115. Sector strategies and policies (Substantial). Most of South Sudan’s key energy sector policy, planning, and legal documents are outdated, fragmented or yet to be established. While several sector policy and strategy documents, such as the National Electricity Policy 2013, were developed soon after independence, they have not been reviewed and updated regularly. The National Electricity Bill was drafted in 2016 and passed by the cabinet but contains several gaps that limit its effectiveness as a governing document and has been returned by the Ministry of Justice for revisions that are still ongoing. As of now, South Sudan does not have any formalized sector master plans and lacks the institutional capacity to conduct a systematic planning analysis. To mitigate these risks, Component 4 includes a subcomponent that is dedicated to ‘electricity sector planning and capacity building’. This subcomponent Page 43 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) will support national power sector planning, including electrification, that is consistent with NDCs and enhance the capacity of the key sector institutions in systematic sector planning. 116. Technical design of project or program (Substantial). The project appraisal has already confirmed the technical adequacy of the project’s overall design and its investment components. For some specific technical arrangements, including the specific locations for pilots (e.g., component 2) and costing, an Owner’s Engineer will be recruited to provide technical support during the implementation process and the PIU, which will consist of various qualified experts and engineers, will ensure continued technical coordination and monitoring. 117. Institutional capacity for implementation and sustainability (High). Energy project development and implementation have been limited in South Sudan, largely owing to the political instability and weak institutional capacity that hinder sustainable project implementation. For instance, despite close engagement with the associated ministries and agencies in preparation of ESTAP in 2014, the project was eventually dropped due to the increased conflict and the subsequent restructuring of the ministries . The energy sector overall suffers from a lack of resources and investments. GoSS civil servants are chronically underpaid and often paid with significant delays, which not only lowers their work morale and creates incentives for corruption but also leads to a serious brain drain of essential technical expertise. To mitigate these risks, the World Bank plans to engage in-country staff as well as local consultants/specialists to intensify policy dialogues at both political and technical levels of project implementation. Project Component 4 was specifically designed for strengthening institutional capacity and sustainability but in addition to that, capacity building elements will be systematically incorporated and prioritized in all project components. 118. Fiduciary (High). Project implementation in South Sudan faces a wide range of fiduciary risks caused by a weak regulatory environment, low institutional capacity, and an underdeveloped financial sector. The country also faces high levels of corruption and lack of accountability—ranking 179 out of 180 on the Transparency International index in 2020. The chronic underpayment and/or nonpayment of civil servants creates fertile ground for potential corruption and use of World Bank funds for ineligible expenditures. There is also an associated risk that the pay scale difference between the civil servants and the individual consultants hired for the project may lower the civil servants’ work morale, discouraging their participation and collaboration. Some of these risks, such as that of the pay scale gap, are being discussed with MoFP as a part of its portfolio-wide agenda for project implementation. HEIS for procurement will be considered during implementation. 119. Environmental and social (Substantial). Although the planned project activities are not anticipated to cause major environmental and social harms, the environmental and social risk of the project is rated substantial mainly due to the contextual fallout risks from the abovementioned political, institutional, and fiduciary risks. A detailed description of the potential E&S risks and their management of them are summarized in Section D - Environmental and Social. The key EHS risks include generation of hazardous and non-hazardous wastes including e-waste, small-scale soil erosion, sedimentation, landscape disturbance, risks to flora and fauna, potential health and safety risks to workers and community, temporary loss of livelihoods, risks associated with influx of migrant workers, etc. These risks will be mitigated by implementation of the Environmental and Social Commitment Plan, ESMF, SEP and RPF. Page 44 of 81 The World Bank South Sudan Energy Sector Access and Institutional Strengthening Project (P178891) 120. Stakeholders (Substantial). Inter-ministerial interactions and coordination is generally weak and political in South Sudan. Engagements with the regional and local authorities are also inadequate. As for the power sector, South Sudan’s weak power sector planning and policy framework resulted in fragmented, if not conflicting, institutional mandates, which remain unresolved to this day. The project has strategically set up the structure of the PIU, including in particular the PSC, to enable close and systematic coordination among all sector institutions and stakeholders involved. An observers group consisting various external organization such as UNHCR as well as the state governments and other ministries has been set up to reinforce transparent and organized stakeholder engagements. . Page 45 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) . VII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: South Sudan South Sudan Energy Sector Access and Institutional Strengthening Project Project Development Objectives(s) To increase access to electricity services and strengthen the institutional capacity of the electricity sector in South Sudan. Project Development Objective Indicators RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline End Target People provided with new or improved electricity service People provided with new or improved electricity service (CRI, 0.00 340,000.00 Number) People provided with new or improved electricity service - 0.00 340,000.00 Host communities and refugee camps (Number) People served by public institutions with new or improved electricity service People served by health and selected public institutions with 0.00 1,819,589.00 new or improved electricity service (Number) People served by health and selected public institutions with new or improved electricity service - host communities and 0.00 410,256.00 refugee camps (Number) People served by health and selected public institutions with 0.00 296,262.00 new or improved electricity service - refugee (Number) Page 46 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline End Target Health and selected public institutions with new or improved 0.00 50.00 electricity services (Number) Improved legal and regulatory framework of the electricity sector National Electricity Sector Policy updated, adopted, and No Yes published (Yes/No) At least one revised/new sector law developed, adopted and No Yes sent it to the Parliament by the Cabinet (Yes/No) Grid code developed, adopted, and published (Yes/No) No Yes Improved institutional capacity of the electricity sector MoED staff have completed at least one update of the integrated No Yes electricity sector master plan (Yes/No) SSEC HR & business plan adopted (Yes/No) No Yes SSEC has published externally audited financial statements for No Yes the previous financial year (Yes/No) PDO Table SPACE Intermediate Results Indicators by Components RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline End Target Grid densification and extension in Juba and vicinity areas Households provided with new or improved electricity service by 0.00 40,000.00 Juba grid network (Number) MSMEs provided with new or improved electricity service by Juba grid network (Number) 0.00 800.00 Page 47 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline End Target MV lines constructed (Kilometers) 0.00 64.00 Distribution transformers to be erected (Number) 0.00 60.00 LV lines constructed (Kilometers) 0.00 560.00 Streetlights installed (Number) 0.00 11,200.00 Mini grid pilot Households provided with new or improved electricity service 0.00 10,000.00 (Number) MSMEs provided with new or improved electricity service by minigrid (Number) 0.00 400.00 LV lines constructed and rehabilitated (Kilometers) 0.00 200.00 Renewable energy generation capacity (other than hydropower) 0.00 3.00 constructed under the project (Megawatt) Feasibility studies for potential state capital mini grid sites conducted (Yes/No) No Yes Streetlights installed (Number) 0.00 3,000.00 MV lines constructed/rehabilitated (Kilometers) 0.00 80.00 Off-grid electrification of health and selected public institutions through standalone solar systems People served by health and selected public institutions with 0.00 1,819,589.00 new or improved electricity service (Number) People served by the health and selected public institutions with new or improved electricity service - host communities 0.00 395,000.00 and refugee camps (Number) People served by the health and selected public institutions 0.00 280,000.00 with new or improved electricity service - refugees (Number) Number of public institutions served by new of improved electricity service (Number) 0.00 50.00 Technical Assistance and Capacity Building Page 48 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline End Target Feedback from public hearings incorporated into project design 0.00 5.00 and published in communication materials (Number) Owner's Engineer firm contracted (Yes/No) No Yes MoED & SSEC staff benefitted from capacity building activities under the project (Number) 0.00 10.00 Female staff completed first degree programs and subject to 0.00 15.00 promotion (Number) STEM career counselling program for girls integrated and rolled 0.00 15.00 out in primary and secondary schools (Number) IO Table SPACE UL Table SPACE Monitoring & Evaluation Plan: PDO Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection MOED will monitor the Quarterly/An connection number. People provided with new or improved Annual nual report MOED Household size electricity service (MOED) assumption: 6.8 MOED will monitor the Number of population in number of connections Quarterly/An People provided with new or female headed households within host Annual nual report MOED improved electricity service - Host with new or improved communities and (MOED) communities and refugee camps access to electricity from refugee camps. Juba or Yei grid network Household size assumption: 6.8 Page 49 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) UNICEF will monitor the number of population Number of population in the in catchment areas of Annual People served by health and selected catchment areas served by the health and selected Annual report from UNICEF public institutions with new or improved health and selected public public institutions UNICEF electricity service institutions with new or served by new or improved electricity service. improved electricity service. UNICEF will monitor the number of population in tthe catchment areas Number of population in of health and selected People served by health and selected host communities and Annual public institutions UNICEF public institutions with new or refugee camps served by Annual report from served by new or improved electricity service - host health and selected public UNICEF improved electricity communities and refugee camps institutions with new or service in host improved electricity service. communities and refugee camps. UNICEF will monitor the number of refugees in Number of refugees served the catchment areas of Annual People served by health and selected by health and selected health and selected Annual report from UNICEF public institutions with new or public institutions with new public institutions UNICEF improved electricity service - refugee or improved electricity served by new or service. improved electricity services. Page 50 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) UNICEF will be responsible for Number of health and Annaul monitoring the install Health and selected public institutions selected public institutions Annual report from of standalone solar UNICEF with new or improved electricity services where a standalone solar UNICEF system to the health system is installed and selected public institutions MoED has adopted and National Electricity Sector Policy updated, published am updated One-off MoED MoED reporting MoED adopted, and published National Electricity Sector Policy At least one revised/new sector law Cabinet has developed and One-off MoED MoED reporting MoED developed, adopted and sent it to the adopted at least one revised Parliament by the Cabinet or new sector law MoED or a new national Grid code developed, adopted, and regulatory has developed, One-off MoED MoED reporting MoED reporting published adopted, and published a grid code Component 4 will initially support recruitment of a team of consultants to train MoED staff on planning and modelling and will jointly MoED staff have completed at least one with MoED prepare a first One-off MoED MoeD reporting MoED update of the integrated electricity sector integrated electricity sector master plan master plan. The indicator tracks whether MoED staff have sufficient capacity to perform at least one update of the plan before the end of the project. Page 51 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) SSEC has adopted an HR & One-off SSEC SSEC reporting SSEC SSEC HR & business plan adopted business plan SSEC has published SSEC has published externally audited Annual from externally audited financial SSEC SSEC reporting SSEC financial statements for the previous FY26 statements for the previous financial year financial year ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection MOED will compile and Quarterly/An monitor the total Households provided with new or Number of population that Annual nual report population with new MOED improved electricity service by Juba grid are newly connected to Juba from MOED connection. Average network grid network households size=6 MOED will be reponsible for Number of non-residential monitoring the number Quarterly/An customers with new or of non-residential MSMEs provided with new or improved Annual ual report MOED improved electricity service customers with new electricity service by Juba grid network from MOED from the grid network in electricity service from Juba the grid network in Juba MOED will be Quarterly/An reponsible for Length of MV lines Annual nual report MOED MV lines constructed monitoring and report constructed from MOED the length of MV lines constructed in Juba Page 52 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) MOED will be responsible for Quarterly/An collecting and report Distribution transformers to Annual nual report the number of MOED Distribution transformers to be erected be erected from MOED distribution transformers to be erected in Juba MOED will be Quarterly/An responsible for Length of LV lines Annual nual report collecting and report MOED LV lines constructed constructed in Juba from MOED the length of LV lines constructed in Juba MOED will be responsible for MOED monitoring the Number of streetlights Annual annual/quart MOED Streetlights installed progress of streetlight installed or replaced erly report installation and reporting the status. MOED will be responsible for collecting and reporting Quarterly/An Number of population with Every six the number of Households provided with new or nual report MOED new or improved electricity months population with new or improved electricity service from MOED service by the grid in Yei improved electricity service from the grid network in Yei. Assumption of Page 53 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) household size is 6. Number of non- Number of non-residential residential customers in customers in host Quarterly/An host communities and Every six MSMEs provided with new or improved communities and refugee nual report refugee camps with MOED months electricity service by minigrid camps with new or from MOED new or improved improved electricity service electricity service from from the grid network in Yei the grid network in Yei. MOED will be Quarterly/An reponsible for Every six The length of LV lines nual report collecting and reporting MOED LV lines constructed and rehabilitated months constructed/rehabilitated from MOED the length of LV lines constructed in Yei MOED will be responsible for monitoring the Quarterly/An construction of Renewable energy generation capacity Annual nual report additional generation MOED (other than hydropower) constructed from MOED capacity for mini grid under the project pilot and reporting the total generation capacity constructed. MOED will be This indicator monitors the Quarterly/An responsible for completion of feasibility Feasibility studies for potential state Annual nual report monitoring and MOED study for the selected capital mini grid sites conducted from MOED reporting the number of potential mini- completion of grid sites. feasibility study in the Page 54 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) selected potential mini grid sites. MOED will be responsible for MOED Number of streetlights monitoring the Annual quarterly/an MOED Streetlights installed installed or rehabilitated progress of streetlight nual report under the project installation and reporting the status. MOED will be responsible for Quarterly/An monitoring and Length of MV lines Annul nual report reporting the length of MOED MV lines constructed/rehabilitated constructued or from MOED MV lines constructed rehabilitated through mini grid piloting UNICEF will be responsible for collecting and reporting Number of population in the the number of Quarterly/An People served by health and selected health and selected public Every six population in the nual report UNICEF public institutions with new or improved institution catchment areas months health and selected from UNICEF electricity service with new or improved public institution electricity service catchment areas with new or improved electricity service People served by the health and Number of population in the Every six Quarterly/An UNICEF will be UNICEF selected public institutions with new health and selected public months nual report responsible for or improved electricity service - host institution catchment areas from UNICEF collecting and reporting Page 55 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) communities and refugee camps of host communities and the number of refugee camps with new or population in the improved electricity service health and selected public institution catchment areas of host communities and refugee camps. UNICEF will be responsible for collecting and reporting Number of refugees in the the number of refugees People served by the health and Quarterly/An health and selected public Every six in the health and selected public institutions with new nual report UNICEF institution catchment areas months selected public or improved electricity service - from UNICEF with new or improved institution catchment refugees electricity service areas with new or improved electricity service UNICEF will be responsible for collecting and reporting Number of heatlh and Quarterly/An Every six the number of health Number of public institutions served by selected public institutions nual report UNICEF months and selected public new of improved electricity service served by new or improved from UNICEF institutions served by electricity service new or improved electricity services This indicator is designed to Quarterly/An MOED will be Feedback from public hearings assess the number of public Annual nual report responsible for MOED incorporated into project design and hearing held to reflect to from MOED monitoring the number published in communication materials project design of public hearings held. Page 56 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) PIU has recruited an owner's one-off PIU PIU reporting PIU Owner's Engineer firm contracted engineer Number of MoED & SSE MoED & SSEC staff benefitted from staff who have participated Annual MoED & SSEC MoED & SSEC reporting MoED & SSEC capacity building activities under the in capacity building activities project funded by the project MOED will be responsible for monitoring the This indicator intends to progress of the training MOED's count the number of female program and reporting Female staff completed first degree Annual quarterly/an MOED staff who completed first total number of female programs and subject to promotion nual report degree programs and are staffs who completed subject to promotion the training courses and are subject to the promotion. MOED will be responsible for monitoring and This indicator is to count the reporting total number number of STEM career MOED STEM career counselling program for girls of organizing STEM counselling programs for Annual quarterly/an MOED integrated and rolled out in primary and career counselling girls integrated and rolled nual report secondary schools program for girls out in primary and integrated and rolled secondary schools out in primary and secondary schools. ME IO Table SPACE Page 57 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) Page 58 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) ANNEX 1: Implementation Arrangements and Support Plan Institutional and Implementation Arrangement 1. MoED will establish a Project Steering Committee (PSC) to provide strategic guidance and overall oversight of project implementation and ensure effective coordination among all stakeholders. The PSC will be chaired by the Minister of the MoED along with the Minister of the MoFP and the Chairperson of SSEC as core members. The PSC will review project progress at least once a quarter and provide guidance. The PSC will also include observer organizations, including, but not limited to, JEDCO, Ministry of Health, Ministry of Education, selected state government representatives, UNICEF, UNHCR, CRA, Embassy of Japan (as the PHRD donor), and other relevant stakeholders as needed. Observers can promote transparent decision-making processes and facilitate information sharing where needed to ensure effective and efficient implementation. 2. SSEC will play an integral role in ensuring effective and efficient implementation. The Chairperson of SSEC will sit as a core member of the Steering Committee to provide strategic guidance throughout the entire implementation process. Several qualified technical experts from SSEC will join the PIU, primarily as engineers to support components 1 and 2. A dedicated capacity building program for SSEC is part of component 4, which combined with the role it is going to play under PIU, will enhance the capacity and credibility of SSEC as a key energy sector player in South Sudan. Figure 1.1. Organogram of the Proposed PSC and PIU Page 59 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) Financial Management and Disbursement 3. Under the project, the internal control arrangements will include adequate segregation of functions in payment processing, internal checks, approval, and authorization procedures, will be detailed in the project implementation manual (PIM). This also includes a requirement that all payments must be supported by proper documentary evidence and verified outputs. At the PIU, adequate segregation of functions and internal checks in payment processing will be ensured. MoFP will also deploy an internal auditor to strengthen internal control arrangements before project and during project effectiveness. 4. The disbursement of the Grant will use advances, reimbursement, direct payments and payments under Special Commitments including full documentation or against statements of expenditure, as appropriate. The MoED will open a segregated US dollar disbursement account (DA) with one of the commercial banks. The ministry will be required to have an additional 2nd secondary signatory to meet the required threshold. The PIU at the ministry will prepare quarterly unaudited Interim Financial Reports within 45 days after the end of the quarter, which will be used to account for expenditures in the Bank records. The Grant will be disbursed into the DA following the transaction-based Statements of Expenditure (SoE) method. The PIU will submit Withdrawal Applications (WAs) in Client Connection accompanied by a Statement of Expenditures to the World Bank for replenishment of the DA. Additionally, the project will also maintain a Special Account (local currency sub-project account) for making payments denominated in local currency (South Sudanese Pounds – SSP). Funds will only be transferred from the main DA to the local currency sub-account to meet immediate payment obligations. No significant cash balances will be maintained in local currency to reduce the foreign exchange exposure risk. The responsibility of initiating, incurring and authorizing expenditures under the project in accordance with the specified procedures will be on the ministry, same to initiating the payment process with all the required supporting documentation. Figure 1.2: Funds Flow arrangements IDA Grant Account Direct Payment DA DA Payment for Goods, UN Account In commercial bank works, consultancies Operating Cost 5. The PIU shall prepare quarterly unaudited Interim Financial Reports (IFRs) which will be submitted to the Bank within 45 days after the end of the quarter in line with the Grant Agreement. The format, content and periodicity of the financial report will be reflected in the agreement signed with MoED. Project accounting documents and records will be retained for at least 7 years in line with government rules and regulations for retention of such documents and records. Page 60 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) 6. The project’s annual financial statements will be audited by the National Audit Chamber and the audit report and management letter will be submitted to the Bank within six months after the financial year end on a timely manner as per the Grant Agreement. Any incremental cost of project audit will be met out of project funds. The National Audit Chamber has been auditing the financial statements of all Bank-supported projects in the portfolio with Technical Assistance (TA) support and expressing an opinion on those financial statements. Procurement 7. Procurement for project activities, will be carried out in accordance with ‘The World Bank Procurement Regulations for IPF Borrowers, for Goods, Works, Non-Consulting and Consulting Services, dated July 2016’, revised November 2017 and August 2018 under the ‘New Procurement Framework (NPF)’ and hereafter referred to as the ‘Procurement Regulations’. The project will also be subject to the ‘World Bank’s Anti-Corruption Guidelines, dated July 1, 2016, and the implementation country-specific provisions stipulated in the Legal Agreement including beneficiary disclosure requirements. 8. For implementation of the proposed project, procurement will follow the arrangements below: a) Carry out the project procurement activities in accordance with the World Bank Procurement Regulations. b) Initiate the procurement process only after obtaining no objection from the World Bank to the Procurement Plan (PP). Enter the PP through the World Bank’s STEP and update the PP at least annually; or whenever there are substantial changes in the PP. c) Use the World Bank’s Standard Procurement Documents for goods, non-consultancy services, and works and the World Bank’s Standard RFP for consultancy services. d) Publish the contract award details on official websites. e) Adhere to the prior/post review thresholds prescribed in the PP for first 18 months and subsequent revisions according to the World Bank’s instructions. f) Extend the necessary cooperation for conducting World Bank’s post-procurement review or any other reviews requested by the World Bank including complaints cases if any. g) PIU uploads all relevant procurement documents to the STEP portal. h) Maintain separate complaint registers and procedures for redressing grievances and complaints, if any. 9. PPSD, PP, and STEP. A PPSD was developed to improve the implementation of the project and help achieve results. The PPSD resulted in the preparation of an initial 18-month PP setting forth the selection methods to be followed by the PIU during project implementation in the procurement of goods, works, and non-consulting and consulting services financed by the World Bank. The PP will be updated at least annually or as required to reflect the actual project implementation needs and improvements in institutional capacity. The PIU will use STEP in the implementation of the project. This is a planning and tracking system, which would provide data on procurement activities, establish benchmarks, monitor delays, and measure procurement performance. After getting the World Bank’s agreement to the work plan, all documents at each stage of the procurement process will be uploaded in STEP for the World Bank’s post review. Page 61 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) 10. The PPSD noted that MoED has no experience in implementing a Bank-financed project. The last project preparation had to be cancelled in 2015 due to the conflict in 2013 and there has been no aided support that was implemented by MoED. AfDB supported construction of grids in Juba and the MoED was supported by PIU at the MoFP which did not provide for sustainable capacity building at the MoED. Planning, Design procurement and supervision Consulting (PDPSC) firm will be hired to support the MoED with planning, design, procurement and supervision of Grid densifications and extensions in Juba, Mini grid pilot constructions in Yei and solar electrifications of Hospitals/PHCC/Us by UNICEF. In addition, a technical experienced consultants will be hired in PIU to support the implementation of the project and procurement, MS and Environmental and Social staff will be maintained throughout the project period. The project will also support staff capacity building and training; continuous oversight, reviews, and audits; and use of real-time monitoring and tracking tools. The works/construction activities will use established technological practices and construction methodologies and can be categorized as non- complex works. 11. Standard Procurement Documents. The World Bank’s Standard Procurement Documents shall be used for procurement of goods, works, and non-consulting services under Open International Competitive Procedures. Selection of consultant firms shall use the World Bank’s Standard Procurement Documents, in line with procedures described in the Procurement Regulations. In accordance with paragraph 5.3 of the Procurement Regulations, the request for bids/RFP document shall require that bidders/proposers submitting bids/proposals present a signed acceptance at the time of bidding, to be incorporated in any resulting contracts, confirming application of, and compliance with, the World Bank’s Anti-Corruption Guidelines, including without limitation the World Bank’s right to sanction and the World Bank’s inspection and audit rights. 12. Beneficial ownership pilot. The project involves procurements within the World Bank (Operations Procurement Review Committee) thresholds; hence, beneficial ownership pilot will be applicable. 13. Contract management. High-risk and high-value procurements will be identified in the PPSD for increased contract management support and indicated in the PP. The IAs will develop KPIs for such identified contracts, and the indicators would be monitored during actual execution of contracts. The World Bank team would provide additional due diligence and independent review of the contract performance of such identified procurements. The project will be implemented by the fully staffed PCU/PIU and is responsible for the overall coordination and project/contract management. 14. Operating costs. Incremental operating costs will include expenditures for the maintenance of goods and equipment such as vehicles and computers; fuel; office supplies; consumables; communication costs; workshop venues and materials; and authorized travel costs of officials of the Government, including per diems, travel costs, and accommodation for staff when travelling on duty during the implementation of this project, but excluding salaries of civil/public servants. Items under this category would be procured using the IA national procurement and administrative procedures acceptable to the World Bank. These operational expenditures for implementation of the project are reflected in the Annual Work Plan and submitted to the World Bank. However, these expenditures shall not be included in the World Bank’s PP and not to be entered through the World Bank’s STEP. 15. Procurement oversight. The World Bank shall prior review contracts according to the prior-review Page 62 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) thresholds set out in the PPSD/PP. All contracts not covered under prior review by the World Bank shall be subject to post review during implementation support missions and/or special post-review missions, including missions by consultants or third-party institutions hired or appointed by the World Bank. However, the World Bank may conduct, at any time, independent procurement reviews of all the contracts financed under the credit if it determines the need for such a review based on the assessment of risk. 16. Disclosure of procurement-related information. The following documents shall be disclosed on the ministry’s official website: (a) PP and updates; (b) invitations for bids for goods and works for all contracts; (c) request for expression of interest for selection/hiring of consulting services; (d) contract awards of goods, works, and non-consulting and consulting services; (e) monthly financial and physical progress report of all contracts; and (f) reports on actions taken to address any complaints received on a quarterly basis. 17. The following details shall also be published in the United Nations Development Business and the World Bank’s external websites: (a) General Procurement Notice before making available the initial bidding opportunity, (b) invitation for bids for procurement of goods and non-consulting services following open international market approaches, (c) request for expression of interest for the selection of consulting services following open international market approaches, and (d) contract award details of all procurement of goods and works and selection of consultants using open international market approaches. 18. Complaints handling. For the procurement-related complaints, the project will follow the procedure prescribed in the Procurement Regulations (paragraphs 3.26 and 3.31). To deal with the complaints from bidders, contractors, suppliers, consultants, and the general public at large, a complaint handling mechanism will be set up at the PIU at the IAs and the detailed procedure is prescribed in the PAD. 19. Record keeping and management. All records pertaining to the award of tenders, including bid notification; registers pertaining to sale and receipt of bids; bid opening minutes; bid evaluation reports; and all correspondence pertaining to bid evaluation, communication sent to/with the World Bank in the process, bid securities, and approval of invitation/evaluation of bids, would be retained by the IA and uploaded in STEP on time. The PIU will be responsible for record keeping for ease of retrieval of procurement information. In this respect, each contract will have its own file and should contain all documents on the procurement process. Table 1.1 The Risk Mitigation Action Plan Matrix Description of Proposed Mitigation Risk Owner and Risk Description Through Procurement Process Residual Risk Implementation in decentralized • Proactive engagement of various level MoED manner; remoteness of project of implementation functionaries, and With adequate sites and these are scattered stakeholders support from the top across project sites, which may management, Page 63 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) Description of Proposed Mitigation Risk Owner and Risk Description Through Procurement Process Residual Risk pose challenges related to • Use of Contract Implementation Plan contract management coordination, contract for monitoring and monitoring can be management, and monitoring. improved for • Strengthening of staffing and capacity minimum time/cost Weak procurement and contract at the MoED level in the aspects overrun and management capacity for large related to contract management and reasonable scope. value contracts with potential monitoring. time and cost overruns. Residual risk is • An internal procurement and contract developing and using monitoring web-based application the web-based that is appropriate for monitoring. application for • Procurement Management Manual monitoring. Delay in processing • Training on Procurement MoED procurement/substantial lead Regulations will be carried out. time of around 10 months for • MoED will also check their award of contract. MoED staff processes, identify the bottlenecks, not be familiar with Procurement and take adequate measures to Regulations under the World minimize the delays in decision- Bank’s New Procurement making. Framework. Forced labor in the global supply • Forced labor bidder declarations, MoED chain for solar panels and solar qualification requirements, components strengthened forced labor contractual provision in the advert, bidding documents All contracts prior review/No- objection by the Bank Implementation Support Plan 20. The project will require a substantial level of implementation support, particularly in its early years. Technical specialists and consultants from the World Bank will continue to be involved in supporting the participating agencies in implementation of the activities under the project. Implementation support will be provided through regular missions as well as continuous handholding support. On an as-required basis, additional technical and thematic missions could also be organized to support MoED, SSEC, and other stakeholders on specific issues. Component 4 includes a significant allocation to trainings and ad hoc capacity-building activities. During implementation support missions, the PDO and the Results Framework will be used for monitoring progress, evaluating impact and effectiveness, and adjusting the project design, when necessary. Page 64 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) Table 1.2. Overall Implementation Support Plan Time Focus Skills Needed Annual Resources Estimate (US$) Years 1–2 • Establish working arrangements Engineering (power systems), solar 400,000 • Recruit and onboard owner’s technology, mini-grids, health engineer center solar installation, power • Build capacity (environmental and sector policy and law design, social, FM, and procurement) procurement, E&S, gender • Finalize investment design, ToR, and bidding documents • Procurement • Environment and social assessments and implementation • GBV action plans Years 3–5 • Technical implementation support Specialists in power systems, mini- 300,000 • Environmental and social standards grids, health center solar O&M, implementation support power sector law and policy • Preparation and implementation of implementation/enforcement, the five-year gender work plan regulatory strengthening, off-grid • GBV activities (training, baseline market strengthening, E&S, assessment and data collection, gender and SEA/SH, M&E, FM, and and enhancement of productive procurement and social services) • M&E implementation support • FM and procurement • Implementation support Page 65 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) ANNEX 2: Economic Analysis General Assumptions and Methodology 1. Cost-benefit analysis was used to assess the economic viability of the proposed project. Economic costs were based on the cost estimates for different components of the project obtained from market survey and World Bank experience in neighboring countries. Diesel generation cost was obtained from the local market with 30 percent adjustment for taxes and custom duties. Fuel consumption is assumed at 0.25, 0.25, and 0.3 liter per kWh for Components 1, 2, and 3, respectively, assuming high efficiency for diesel generators in Juba and Yei, and lower generator efficiency in remote villages and towns considered under Component 3 due to lack of maintenance. 2. Cost of unserved energy was used to estimate economic benefits. Diesel generation cost is used as the basis for calculation to estimate unserved energy cost; levelized cost of diesel self-generation is used for Components 1, 2, and 3; and diesel retail price in Juba, Yei, and Boma is used for Components 1, 2, and 3, respectively, with adjustments to reflect the economic cost of diesel. The project is expected to bring other benefits that are difficult to quantify; for instance, health and social benefits associated with the electrification of health institutions and replacement of kerosene as the energy source of lighting as well as health and social benefits driven by increased energy access in Components 1, 2 and 3. The socioeconomic benefit is also expected to materialize with grid densification and mini-grid construction and operation, as this will create new job opportunities. 3. GHG emissions. GHG accounting has been done for each of the project’s components. The GHG emission impacts derive from the reduction of GHG emissions from diesel generation at the project-added connections. Overall, the project will reduce GHG emissions associated with power generation, assuming alternative generation for all components is 100 percent diesel generation, (a) Component 1: while diesel generation will account for 56 percent of generation in the Juba grid, displacing small diesel self- generation with grid electricity generation will still reduce GHG emissions by a considerable amount; (b) Component 2: hybridization of diesel generation in the Yei mini-grid with solar PV/battery system will result in 62 percent solar generation and 38 percent diesel generation; and (c) Component 3: solarization of health institutions and 100 percent replacement of diesel generation in hospitals and PHCCs/Primary Health Care Unit (PHCU). Overall, 1.77 million tCO2e is saved during the project lifetime. The Intergovernmental Panel on Climate Change (IPCC) emission factor for diesel generation of 74,100 kg CO2 per TJ is used assuming heat rate of 10.5 mmBTU per MWh; emission factor is calculated at 820 gCO2 per kWh. Solar PV generation emission factor is assumed at 40 gCO2/kWh. Emission factor for the Juba grid is calculated at 477 gCO2 per kWh assuming 56 percent diesel generation/44 percent solar generation. The Yei hybrid mini-grid emission factor is also calculated at 336 gCO2 per kwh assuming 38 percent diesel generation and 62 percent solar generation. The project is not expected to reduce technical losses and will be implemented in brownfields; thus, there is no GHG emissions reduction due to technical losses or emissions increase due to site clearance. For Component 1, the below projection on generation mix has been assumed with expected increase in the integration of renewable energy. Page 66 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) Table 2.1 Projected Generation Mix Assumption, 2022-27 2022 2023 2024 2025 2026 2027 Load Demand MW -25 -30 -35 -40 -45 -50 Solar Capacity MW 0 30 40 40 50 50 Storage Capacity MW 0 6 8 13 18 23 Diesel Capacity MW 25 24 27 27 27 27 Load Energy consumption GWh/pa -128 -153 -179 -204 -230 -256 Solar Production GWh/pa 0 68 91 91 114 114 Diesel Production GWh/pa 128 85 88 113 116 142 Solar Mix-annual 0% -45% -51% -45% -50% -45% Diesel Mix- annual -100% -55% -49% -55% -50% -55% Table 2.2 Project Economic Returns Sheet, 2023-53 Year 2023 2024 2025 2026 2027 2028 2029 2030 2040 2050 2053 Economic Flows, with project Costs inside project $USM boundary Distribution $USM pattern Project investment $USM Cost IDA Capital Cost components 43 $USM 5.15 9.3 16.4 12.15 0 (1,2,3) O&M cost $USM 0.96 0.96 0.96 0.96 0.96 0.96 0.96 0.96 0.96 0.6 0.6 Generation $USM 0.0 6.4 12.5 17.6 27.2 35.6 37.1 38.6 58.9 71.3 77.7 cost Consumer benefits, grid $29.11 $42.01 $51.57 $53.64 $55.64 $77.62 $96.96 $105.74 $USM $0.083 $9.555 $19.885 sales for new 1 4 2 1 6 0 9 2 customers Total economic flows, with project. $16.67 $30.73 $28.12 $36.58 $38.04 $39.53 $59.88 $71.85 Net Cost $USM $6.110 $29.904 $78.302 8 1 9 3 5 0 5 5 $29.11 $42.01 $51.57 $53.64 $55.64 $77.62 $105.74 Net Benefit $USM $0.083 $9.555 $19.885 96.969 1 4 2 1 6 0 2 Net economic ($6.02 ($7.12 ($10.01 ($1.62 $13.88 $14.98 $15.59 $16.11 $17.73 $25.11 $USM $27.440 flows 7) 2) 9) 0) 5 9 6 6 6 3 $US $175.1 NPV M 4 ERR % 35.9% Note. Discount rate is 6%; complete economic returns sheets can be provided upon request. 4. Sensitivity analysis. A sensitivity analysis was carried out to assess the project’s returns against variations in both costs and benefits. Three scenarios were examined: 5 percent increase in total cost, 5 percent decrease in total benefits, and assuming both cost increase and benefit decrease. Page 67 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) Table 2.3. Sensitivity Analysis No. Case NPV (US$, millions) Internal Rate of Return (%) 1 Base case 175.14 35.9 2 Cost increases 5% 149.85 30.0 3 Benefit decreases 5% 140.87 30.0 4 Cost increases 5% and benefit decreases 5% 111.08 25.0 Page 68 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) ANNEX 3: Closing the Gender Gap in South Sudan Energy Sector 1. Gender disparity in South Sudan is high; the country ranks in the bottom third of all countries worldwide for the ‘life-course gender gap’ on the Human Development Index. 23 Around 50 percent of South Sudan’s population of 13.3 million is female, with 80 percent of the population under the age of 35, placing an inordinate burden on women and children, who represent the majority of those fleeing violence. 24 South Sudanese women and girls have fewer choices and opportunities over the course of their life compared to men and boys and have less agency and options for self-determination. Chronic and widespread poverty contributes to South Sudan’s ranking of 185 out of 189 countries in the Human Development Index 2020, with a life expectancy of only 58 years compared to the global average of 72. 25 The GoSS has promoted the achievement of equal opportunity between women and men in various sectors. The National Gender Policy (NGP) developed and adopted in 2012 pursues the vision of a country free from all forms of discrimination and violence. The policy recommends the establishment of an Inter- ministerial Gender Coordination Committee and has appointed a gender focal person at each ministry to promote gender mainstreaming in various policies and public services. 2. An Institutional gender gap assessment (GGA) was conducted in MoED and SSEC as part of project preparation with the objective of identifying key gender equality gaps in the South Sudan energy sector. The findings of the GGA show that the gender equality supporting structure has never been integrated and considered as one of the areas of support in the energy sector. There is no gender unit/department in the energy sector and gender-responsible staff or focal persons are nonexistent. The energy sector has a large male representation at all levels and female employees are mostly involved in jobs that demand low skills as support staff. None of these female employees passed through college/universities for their first degrees except those in technical areas. All leadership and management positions at MoED and SSEC are held by men. Out of 21 technical staff in MoED, there is only one female technical staff. In the same trend, among 41 technical staff in SSEC, there is only one female technical staff. MoED has a total staff complement of 49, where 34.6 percent (17) are female and 65.4 percent (32) are male. At SSEC, out of a total of 215 staff, female representation is 25 percent (54) and 75 percent (161) male. At MoED, 47.2 percent (17) females are in admin and finance fields compared to 52.8 percent (19) males, whereas at SSEC, 60.8 percent (42) females and 39.2 percent (27) males are in admin and finance. Both at MoED and SSEC on-the-job capacity development opportunities have not been provided since 2016 for all employees. This highly affects the career advancement opportunities of women in the sector. The findings of the GGA further showed that percentage of female students in STEM fields are very low starting from primary education up to tertiary level (e.g. currently there is only one female student in the engineering department at the university of Juba). 3. The GGA further revealed lack of gender-responsive workplace policies and practices, including absence of gender-responsive HR policy, equal wage policy, gender equality policy, GBV/SEA/SH prevention and response policy, absence of on-job career advancement capacity development opportunities, absence of women-friendly washrooms, culture-based social norms and misconceptions, 23 UNDP Human Development Index, https://www.hdr.undp.org/en/countries/profiles/SSD. 24 UNHCR Operations Data Portal 2022. https://www.unhcr.org/en-us/south-sudan-emergency.html. 25 UNDP, 2020 Human Development Report. Page 69 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) and unconscious bias are contributing significantly for the existing gender gap. This workplace environment exposed female employees in the sector to face challenges such as workplace sexual harassment, mistreatment, bullying, discrimination, and so on. 4. In addressing the gender gap strategic gender equality intervention areas are identified and a five-year gender work plan will be developed and endorsed by the MoED and SSEC senior management before project effectiveness. Implementation of the five-year gender work plan will be started as soon as the commences. To ensure effective implementation of the gender work plan, a gender unit under the HR departments of MoED and SSEC will be established. Gender focal persons (a woman and a man) with specific ToR will be appointed in the gender units of MoED and SSEC. Since these gender focal persons are responsible for leading the project’s five-year gender work plan, soon after their appointment, they should be engaged in capacity development trainings on gender equality and women empowerment. Also, a gender specialist will be hired in the PIU and the specialist will be mainly responsible for providing overall technical lead and support for the implementation of the five-year gender work plan and capacity development support for all gender focal persons at MoED and SSEC. In addition, for some of the technical areas of the gender work plan, for example, development of institutional HR policy, gender equality policy, GBV/SEA/SH prevention and response policy, code of conduct and GRM, and capacity development programs targeting women employees, consulting firms will be hired to provide full technical support. The following summary key strategic gender interventions areas will be taken into consideration in the five- year gender work plan (action plan): • Adoption of project five-year gender work plan, establishment of gender unit in HR departments of MoED and SSEC and appointment of two gender focal persons (woman and man) under the gender units in MoED and SSEC • Development and adoption of institutional gender-responsive human resource policy with equal wage provision, 35+ percent affirmative action for women during recruitment and promotion for MoED and SSEC by June 2025 • Development and adoption of gender equality policy for MoED and SSEC • Development and adoption of institutional GBV/SEA/SH prevention and response policy, CoC & GRM • Development of roadmap for in-service capacity development program (scholarship program, short-term training for female staff mentorship and coaching program, gender equality awareness creation training programs for leaders/managers) • Inclusion of gender Key Performance Indicators for key personnel to maintain institutional accountability • Designing and implementing school outreach program to advocate STEM education for girls in primary and high schools • Establishment of gender responsive planning, implementation, reporting, M&E operational system at MoEC and SSEC • Establishment of gender forum to be led by MoED and SSEC to promote male engagement and gender equality champions as well as roll out sector-wide awareness creation campaigns about women’s rights, GBV, gender equality and importance of women’s representation in various decision-making positions • Design and integrate STEM career counselling program targeting girls in primary and secondary schools towards providing them with clear career guidance to aspire joining STEM fields. Page 70 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) ANNEX 4: A Note on Implementing World Bank-Financed Operations and Managing Fiduciary Risks of Government-led Implementation in South Sudan 1. This note provides additional context guiding decisions concerning planned implementation arrangements and measures to manage fiduciary risk in the design of World Bank-financed operations in South Sudan. The note consists of two parts. Part A covers the implementation approaches currently employed by World Bank teams operating in South Sudan and provides information on the selection criteria and consideration used for choosing a particular approach. Part B explains the fiduciary risks facing Government-led implementation of World Bank-financed projects in South Sudan and the mitigation measures that are in place to ensure that World Bank-financing is used for the intended purposes. Part A: Implementing Bank-Financed Operations in South Sudan 2. This part of the note sets out the rationale for differentiated implementation approaches used by World Bank teams designing and implementing project financing operations in South Sudan consistent with the Country Engagement Note period from FY2021-2023. It also provides a summary view of the WBG’s portfolio performance (using these approaches), an explanation of the criteria and operation- specific considerations for choosing a particular approach, and an overview of the FY23 pipeline operations. 3. Strategy on Implementation Approaches in the FY2021-2023 Country Engagement Note (CEN) - The current CEN for South Sudan, discussed with the World Bank Board of Executive Directors on May 13, 2021, provided the contextual information and rationale for using differentiated implementation approaches and for progressively transitioning back to Government-led implementation after more than two years had passed since the signing of the Revitalized Agreement on the Resolution of the Conflict in South Sudan (R-ARCSS) in September 2018. 4. The CEN highlights the significant operational and fiduciary challenges that confronted the WBG’s engagement in South Sudan during the period of conflict and instability that prevailed from 2013 to 2018. During that time, particularly in 2017, the WBG temporarily suspended the financing of development activities due the intensity of conflict and resumed business operations with the new CEN spanning FY2018-19. Under this fragile environment in which the Government’s institutional capacity had been severely eroded by conflict and in which ineligible expenditures had occurred, the WBG opted for financing development operations using a third-party implementation (TPI) approach. 5. After several years of only employing TPI and third-party monitoring approaches, which were the natural options of choice during that immediate post-conflict period, the WBG’s FY2021-23 CEN proposed to return to Government-led implementation over time using a differentiated and phased approach. This direction was informed be several factors including a recognized need to: (i) progressively ensure full Government ownership of development operations to counter the perverse incentives created by prolonged TPI – which can prompt Government authorities to evade their core public responsibilities; (ii) help create an institutional strengthening program and provide opportunities for capacity development Page 71 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) of Government staff by following a ‘learning by doing approach’; (iii) support investments in critical public financial management (PFM) reforms as an essential foundation for government effectiveness; and (iv) enhance accountability and transparency through a closer working partnership with the Government and other stakeholders. 6. The CEN also emphasized that the WBG’s engagement in the country would remain ‘responsive and adaptive’ to the surrounding political and security conditions and that the return to Government-led implementation would be applied dynamically (drawing lessons from implementation experiences and adapting) during the CEN period. 7. Mix of Implementation Approaches – There are three main implementation approaches that the World Bank has been employing in South Sudan. These approaches are third-party implementation (TPI), hybrid implementation and Government-led implementation. Under TPI, the World Bank signs a Financing Agreement (FA) directly with a thirty-party implementor (for example, UNICEF or the International Committee of the Red Cross) which assumes overall fiduciary implementation for implementation. This third party implementor is normally required to help develop the capacity of Government counterparts. Under hybrid implementation, the World Bank signs a FA with the Government represented by the Ministry of Finance and Planning (MoFP), and the MoFP then signs an Output Agreement with a third-party implementor to implement project activities. Using this approach, fiduciary responsibility remains with the Government and implementation risks are mitigated by using a trusted third party. Under Government-led implementation, the World Bank signs a FA with the MoFP and the Government assumes full operational and fiduciary accountability. These approaches are depicted in the graph below. Figure 4.1. Implementation Approaches Third-Party Government-led Implementation (TPI) Hybrid Approach Implementation Banks sign a Financing World Bank signs a Agreement with a third- Financing Agreement with World Bank signs a party implementor the Government Financing Agreement with the Government The Government signs an Third-party Output Agreement with a implementor assumes third-party implementor overall fiduciary The Government assumes to implement project responsibility for full operational and activities implementation fiduciary accountability The Government assumes for project management Third-party fiduciary responsibility – activities implementor works to but assigns certain project build the capacity of activities to the third-party Government implementor counterparts Page 72 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) 8. The CEN envisages the use of a phased approach applicable to transitioning from one implementation modality to another with respect to successive operations with similar development objectives in a given sector. If the respective line ministry or agency demonstrates sufficient capacity and meets criteria set out in the CEN, correspondingly the design of a successive operation may employ more elements of Government-led implementation. This phased transition has been employed in one case with respect to social protection where the South Sudan Social Safety Nets operation (approved in FY2020) was fully TPI whereas the South Sudan Productive Safety Net for Socioeconomic Opportunities (approved FY2022) uses a hybrid implementation approach. 9. Four important development lessons have been drawn from recent experience of using these implementation approaches in South Sudan. First, TPI can certainly be used to address urgent development needs more rapidly – but if used for prolonged periods of time, it can produce perverse incentives that steer Government authorities away from taking on their core responsibilities. Second, the hybrid Implementation approach can be advantageous as it includes a focus on strengthening Government responsibility and accountability for development projects while ensuring the delivery of development results on the ground. Implementing the hybrid implementation approach effectively still requires World Bank support to ensure appropriate fiduciary arrangements and to help foster the development of a working relationship between the Government and the third-party implementor. Third, experience during the CEN period has demonstrated that there still exists sound project implementation capacity among Government civil servants as well as previously Government-contracted individuals. The issue is to prepare operations in a manner that allows for effective recruitment, deployment and incentivization of these available human resources. Performance of Portfolio 10. Over the period of this current CEN, overall portfolio performance has remained solid. At the moment, the portfolio consists of eight national operations and one regional operation with a specific component for South Sudan. Three operations are using TPI, five are using a hybrid model, and one is using full Government-led implementation (the Public Financial Management Project implemented by the Ministry of Finance). No projects have been in problem status (that is, all implementation progress and development ratings have been moderately satisfactory or better). The financial monitoring reports that have been submitted to the World Bank monthly and quarterly have not raised significant fiduciary concerns and the audit reports have been assessed as acceptable. Independent Evaluation Group (IEG) outcome project ratings have also been moderately satisfactory or better in the last eighteen months. CEN Activities to Strengthen Institutions and Build Skills 11. In line with the direction of the CEN, the Bank and IDA took several steps and activities to support institutional capacity development and the building of skills amongst Government officials and development partners. These steps and activities have included: (i) encouraging third-party implementors (i.e. UNICEF and WHO) to organize capacity-building sessions for the Ministry of Health; (ii) organizing a workshop on World Bank procurement and financial management policies and procedures for a wide range of Government representative and development partners; and (iii) convening another workshop on the World Bank’s ESF policies and standards – which was widely attended by participants from Page 73 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) Government and development institutions working in South Sudan. Criteria and Operation-Specific Considerations 12. In selecting a particular implementation approach – specifically between remaining with TPI or moving towards hybrid and full Government-led implementation approaches – the South Sudan CMU and World Bank teams rely on various criteria and operation-specific considerations. The major criteria and considerations are described below: • Level of Government ownership. The degree of Government ownership over a proposed reform or development agenda is one of the key considerations. This ownership is demonstrated by the quality of policy dialogue at the highest levels of a Government ministry or authority and the intensity of the follow-through by working-level and technical representatives. • Basic fiduciary capacity. This type of institutional capacity – involving financial management (FM) and procurement policies and procedures – is an important criterion for selecting a particular approach consistent with the FY2021-23 CEN. This capacity is assessed through several ways including: (i) conducting an assessment of the available number of FM and procurement staff in a Government Ministry or authority; (ii) the timely submission of accurate financial and audit reports on a regular basis; and (iii) the settlement of ineligible expenditures. On the latter point, it is worth noting that the Government of South Sudan refunded all outstanding ineligible expenditures amounting to US$ 6.8 million (which had been pending since 2016) in late FY2022. • Availability of a suitable third-party implementer. In some development sectors, there are tried and tested third-party implementers from among the UN agencies and other international NGOs (that is, International Committee of the Red Cross). In the area of essential health services, there is WHO, UNICEF, and ICRC. In the agricultural and food aid sectors, there is FAO and WFP. In the emergency social assistance sectors, there is UNOPS. In other development sectors such as water, energy, and digital development, there are no potential third-party implementers with dedicated expertise in these sectors on the ground in South Sudan. This limited availability of third-party implementors used for World Bank-financed operations in recent years in South Sudan also feeds into the decision around the most suitable implementation approach for a particular engagement. • Technical complexity. The technical complexity of a particular development operation or sector is also a consideration that factors into the choice of implementation approach. A less technically complex operation would require fewer hybrid elements to support implementation and could perhaps be fully Government led. A more complex operation would require stronger hybrid elements (through output agreements with third-party implementors and possibly contracts with large firms) to ensure the delivery of development results on the ground. • Rapid roll-out requirements. Under emergency circumstances, there is an urgent need for a rapid roll-out of services (that is, responding to the COVID-19 pandemic through the provision of vaccines and vaccination services). In fragile and conflict-affected environments like South Sudan, Page 74 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) there are capacity and logistical challenges to ensuring a rapid response working through Government systems to ensure a timely response (though this of course underscores the need to build such capacity rather than sustaining the capacity of external actors). A hybrid approach or fully Government-led approach would require start-up time periods that would not be fast enough to respond to a particular emergency. In such situations, TPI tends to be the preferred approach to employ. • Past performance. The World Bank seeks to be a long-term partner for South Sudan in delivering on development objectives and correspondingly there is a body of experience in implementing operations, including the performance of Government (and third-party) entities over time. The record of past performance – including, for instance, Government interaction and capacity building under TPI arrangements – informs successive phases of WBG engagement in a given sector. FY2023 Pipeline Operations 13. A summary of planned pipeline operations and planned implementation approaches is provided below. Selection of implementation approach is done on a case-by-case basis. Prior to submission for decision, each operation will be subject to appraisal which, among other things, will confirm appropriateness of implementation arrangements against the criteria set out in the CEN. 14. In the case of the South Sudan Energy Sector Access and Institutional Strengthening Project (P178891), the planned approach will be Government-led implementation. This decision was informed by: (i) strong Government ownership (as demonstrated by high-level dialogue with the Vice President for the Infrastructure Cluster and the Minister of Energy and Dams; and extensive technical discussions at the working level); (ii) an assessment of the basic fiduciary capacity of the Ministry of Energy and Dams undertaken by the World Bank task team; and (iii) there is no potential third-party implementer with sufficient technical expertise to assume responsibility for the entirety of the implementation process in the energy sector. The project will, however, include a hybrid implementation model by relying on a UN agency to help implement the project component related to off-grid electrification of health institutions through standalone solar systems. • Second Additional Financing to the South Sudan COVID-19 Emergency Response and Health Systems Preparedness Project (P180277). Financing amount is US$70 million equivalent. Board delivery date is expected in Q3 FY23. Implementation approach is third-party implementation. • South Sudan Energy Sector Access and Institutional Strengthening Project (P178891). Financing amount is US$53 million equivalent. Board delivery date is expected in Q4 FY23. Planned implementation approach is Government-led but will incorporate a hybrid element. • Eastern Africa Regional Digital Integration Project – Series of Projects – Phase I (P176181). Financing amount for South Sudan is US$67 million equivalent. Board delivery date is expected in Q4 FY23. Planned implementation approach will be Government-led. Page 75 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) • Building Skills for Human Capital Development in South Sudan (P178654). Financing amount is US$57 million equivalent. Board delivery date is expected in Q4 FY23. Planned implementation approach is Government-led but will incorporate a hybrid element. • Regional Climate Resilience Program for Eastern and Southern Africa (P180171). Financing amount for South Sudan is US$215 million equivalent. Board delivery date is expected in Q4 FY23. Planned implementation approach will be Government-led. • Additional Financing to the Enhancing Community Resilience and Local Governance Project Phase II (P180785). Financing amount is US$30 million equivalent. Board delivery date is expected in Q4 FY23. Planned implementation approach is Government-led. • Additional Financing to the Resilient Agricultural Livelihoods Project (P180940). Financing amount is US$30 million equivalent. Board delivery date is expected in Q4 FY23. Planned implementation approach is Hybrid Implementation. Part B: Managing Fiduciary Risks of Government-led Projects in South Sudan 15. This second part of the note outlines the fiduciary risks for Government-led implementation of World Bank-financed projects in South Sudan and the mitigation measures that are in place to ensure that World Bank-financing is used for the intended purposes. The risks were identified through an analysis of the strengths and weaknesses of the Government’s existing public financial management (PFM) system including public procurement. 16. The summary conclusions of the note are as follows: i) the financial management (FM) and procurement assessments conducted during project preparation properly identified institutional and operational gaps and highlighted key risks that required monitoring; ii) ongoing support extended by the World Bank and other development partners to the country’s overall PFM reform agenda remains critical to the successful transition of World Bank-financed projects to Government-led implementation; and iii) the current measures to mitigate fiduciary risks at the project level in South Sudan are considered reasonable for the level of investments but close monitoring and supervision will still be required during project implementation. Country and Fiduciary Risks 17. Fiduciary risks in South Sudan are high. The operating environment remains fragile and weaknesses in the country’s overall governance environment has the potential to materially affect project implementation. While the overall PFM framework in South Sudan contains several elements of a well- functioning PFM system, in general it suffers from poor functionality and results. Fiduciary practices, budget preparation, execution, reporting, auditing and overall accountability and transparency processes are extremely weak – all of which undermine the effectiveness of the budget institutions and the delivery of services to citizens. The low effectiveness of the PFM system, coupled with severe budget deficits due to macroeconomic mismanagement, has also affected the payment of salaries, financial accountability, cash and arrears management, budget preparation and execution, and the accountability for revenues. Page 76 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) The civil service is understaffed, has weak capacity, and is disincentivized by the non-regular payment of public servant salaries. This situation has resulted in many public sector departments barely covering minimum required running costs, hampering and often paralyzing Government services. 18. Risks related to corruption and fraud in various stages of implementation, procurement, and financial management are high. Fiduciary risks are further elevated due to the lack of a functioning public procurement system, weak procurement capacity, and the absence of sound independent oversight functions (audit and parliamentary oversight). Although the Public Procurement and Disposal of Assets Act (PPDA) was enacted in 2018 and the Board of the Public Procurement and Disposal of Assets Authority (PPADA) was appointed in February 2023 (both policy actions representing positive reform progress), the operationalization of the corresponding procurement regulations and standard procurement documents is still pending. Significant knowledge gaps also remain in public procurement across spending agencies at both national and sub-national levels affecting the application of the PPDA and related legal frameworks. PFM Capacity Building and Institutional Strengthening 19. The GoSS has been pursuing economic, governance, and public financial management (PFM) reforms in line with the directions of Chapter IV of the 2018 Revitalized Agreement on the Resolution of Conflict in the Republic of South Sudan (R-ARCSS). The reform process did achieve some early development gains with the unification of the currency exchange rates and the establishment of the Public Procurement and Disposal of Assets Authority (PPADA) in recent years. 20. The strengthening of the PFM system in South Sudan has been central to the World Bank’s engagement in the country since 2020. At the request of the Government, the World Bank alongside the IMF and other development partners, provides technical and financial assistance in support of a multi- year PFM reform agenda. Specifically, the World Bank is supplying just-in-time advisory and technical assistance (TA) to support the implementation of the national PFM Reform Strategy. This TA is focusing on strengthening the budget preparation process including guidance to Ministries and agencies; preparation of a revenue forecasting framework; reporting on revenues and expenditures; and production of budget documents to enhance the transparency of decision-making. The World Bank is also guiding the Government on preparing financial statements and supporting the National Audit Chamber (NAC) to audit the back log of financial statements; providing training for a new revenue team on the preparation of non- oil remittance reports; and advising on public procurement legal and regulatory frameworks. 21. Technical assistance provided by the World Bank and others is complemented by investments in capacity building and strengthening PFM performance through the World Bank-financed Public Financial Management and Institutional Strengthening Project (PFMIS) approved by the Board of Directors on February 24, 2022. The project seeks to improve the budget preparation and implementation process through setting up and making functional foundational processes and systems to improve basic budget planning and allocation including the transparent management of public funds. The project is also addressing existing capacity constraints through several ways: twinning arrangements with consultants mapped to the PMU, training Government staff on PFM policies and procedures, and developing the institutional capacity of the MoFP, targeted line ministries and key oversight institutions. Page 77 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) Measures Mitigating Fiduciary Risks at the Project Level 22. All operations in South Sudan are Investment Financing Projects (IPFs) that have several key measures put in place during the design, preparation, and implementation phases of the project cycle to mitigate the fiduciary risks of Government execution of World Bank-financed activities in South Sudan. These measures are applicable for both Government-led and hybrid implementation approaches. These measures include the following: 23. Embedding appropriate fiduciary risk mitigation in project design and during preparation and implementation. Early in the project design and preparation process, the World Bank fiduciary team undertakes a procurement capacity assessment and a financial management (FM) assessment of the project-implementing entity in line with Bank policy and guidance. The FM assessment covers critical PFM elements of budgeting, accounting, and internal control including internal auditing, in addition to funds flow, financial reporting and external auditing arrangements. The assessment determines whether the implementing entity maintains adequate FM arrangements to ensure that: (a) funds channeled into the project will be used for the purposes intended in an efficient and economical manner; (b) the project implementation arrangements will be able to produce accurate, reliable and timely financial reports; and (c) whether the project’s assets will be safeguarded from loss, abuse or damage. These FM and procurement assessments conducted during project preparation have properly identified institutional and operational risks and the recommended risk mitigation measures flowing from the assessments are currently under implementation for all Government-led projects. 24. Staffing of Project Management Units (PMUs). All projects which will involve Government execution of World Bank-financed activities are managed through PMUs that are established/set up in Government Ministries, Departments and Agencies (MDAs). These PMUs are required to be staffed with experienced and skilled FM and procurement specialists and other subject experts responsible for ensuring effective fiduciary oversight of funds channeled through the PIU managing the project. 25. Procurement. Project Procurement is carried out in accordance with the “The World Bank Procurement Regulations for IPF Borrowers, July 2016” and subject to the World Bank’s Anti-Corruption Guidelines, dated July 1, 2016. A Procurement Committee (PC) is appointed by the accounting officer within the agency to provide internal reviews of all procurement and contracts approvals. The PC is supported with training courses and its membership and functioning is reviewed every two years. All projects procurement plans are reviewed and approved by the Bank before implementation. The prior review of procurement processes is risk-based, where all large-value and high-risk contracts are identified upfront and prior reviewed by the World Bank, while other contracts determined to be low risk and low value are post reviewed annually on a sampling basis. 26. Use of Hands-on Enhanced Implementation Support (HEIS) – On a case-by-case basis and subject to specific assessed risks, the World Bank provides HEIS. This approach which includes the provision of training courses allows World Bank teams to extend more rapid and timely assistance to Government ministries and authorities responsible for project preparation and implementation activities. Page 78 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) 27. World Bank online procurement system. All procurement processes and contracts are managed through the procurement online system - Systematic Transactional Exchanges of Procurement (STEP). The information captured in STEP helps in tracing the progress of the procurement process and provides data for analysis, which supports monitoring and procurement activities. It provides automation of procurement advertisements (notices and awards) to ensure transparency and streamline publication processes. 28. Ringfencing project funds. Project funds are ringfenced for the intended purpose and are not co- mingled with other project or Government funds. Funds do not flow through the Government treasury or Government bank accounts in the implementing entities. Instead, a Designated Bank Account (DA) for the project is opened and maintained in a commercial bank acceptable to IDA. This arrangement makes World Bank funds easily traceable. Payments out of this DA are monitored by the World Bank on a quarterly basis with submission of monthly bank statements and bank reconciliation statements. The World Bank also conducts a rigorous review of each withdrawal applications submitted for documentation or replenishment of the DA, to minimize the risk of irregularities. 29. Small value payment to project DAs. Funds disbursed to the DA are limited to small value payments that cannot conveniently and economically be made through direct payments. Disbursement of funds to the DA is based on accountability and documentation of the previous advances. 30. Reduced threshold for direct payment method. Payment of consultants, contractors and other service providers are made through the direct payment method where funds are paid directly from the World Bank to the beneficiary based on confirmation and approval of the services rendered by the PMU. For the case of South Sudan, there is a lower threshold for use of direct payment method. Direct payments require the Task Team Leader (TTL) and FM clearances. This method promotes efficiency in payment processing, mitigates the fiduciary risks associated with holding funds in the DA and enables the World Bank to exercise an oversight function. 31. Statement of Expenditures (SoEs) disbursement method. Projects in South Sudan use a transaction-based (Statement of Expenditure - SOE) disbursement method where expenditure is reviewed by transaction and only eligible expenditures are charged to the project. The SOE listing all transactions is submitted monthly. This method carries less risk compared to report-based disbursement method. The World Bank must also give a No Objection to large as well as soft expenditures (for example, travel costs, per diems) that are incurred by the project before the expenditure is incurred. 32. Financial reporting. The PMU submits financial reports on a monthly and quarterly basis to the World Bank which are reviewed and cleared if found to be satisfactory. These reports are used to monitor the financial progress of the projects as well as to identify any fiduciary risks. Any identified red flags are promptly followed up and investigated by the World Bank teams and independent auditors. 33. Continuous capacity building. The PC, as mentioned above in the section on procurement, is supported and its performance is reviewed every two years. Orientation, training, and capacity-building is carried out before and during project implementation. Close monitoring and implementation support supervision is carried out frequently by different teams such as, technical, procurement, FM and Page 79 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) disbursement. This system helps promptly identify potential fiduciary red flags and risks and mitigation measures/ actions. 34. Third Party-Monitoring Agencies (TPMA). The World Bank makes selective use of third-party monitoring agencies (TPMAs) to monitor both physical and financial progress of projects. 35. Audits. Private CPA firms acceptable to the World Bank are used to carry out external audits on behalf of the National Audit Chamber (NAC). The Terms of Reference (ToR) are agreed with the World Bank. 36. Use of technology. The World Bank’s Geo-Enabling Initiative for Monitoring and Supervision (GEMS) technology is being used for real-time monitoring of project implementation progress using digital and spatial (GIS) tools. Currently, for example, GEMS is being used to monitor cash transfers to beneficiaries through post distribution monitoring and assessments of health, safety, social and environmental compliance under a social protection project. GEMS also helps identify key implementation gaps. Page 80 of 81 The World Bank South Sudan Energy Access and Institutional Strengthening Project (P178891) ANNEX 5: Map of South Sudan Page 81 of 81