FOR OFFICIAL USE ONLY Report No: PPIAF000195 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT PAPER ON A PROPOSED ADDITIONAL GRANT IN THE AMOUNT OF SDR 5.7 MILLION (US$7.7 MILLION EQUIVALENT) TO ASEAN CENTRE FOR ENERGY FOR AN ADDITIONAL FINANCING FOR THE CLEAN ENERGY AND POWER TRADE DEVELOPMENT IN SOUTHEAST ASIA PROJECT AS PHASE 1 OF THE MULTI-PHASE PROGRAMMATIC APPROACH ACCELERATING SUSTAINABLE ENERGY TRANSITION PROGRAM WITH AN OVERALL FINANCING ENVELOPE OF US$2,500 MILLION APPROVED BY THE BOARD ON SEPTEMBER 24, 2024 May 20, 2025 Energy & Extractives Global Practice East Asia and Pacific Region This document is being made publicly available prior to Board consideration. This does not imply a presumed outcome. This document may be updated following Board consideration and the updated document will be made publicly available in accordance with the Bank’s policy on Access to Information . The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER CURRENCY EQUIVALENTS (Exchange Rate Effective Apr 30, 2025) Currency Unit = US$ SDR 0.73740331 = US$1 US$ 1.35611 = SDR 1 FISCAL YEAR January 1 - December 31 Regional Vice President: Manuela V. Ferro Regional Practice Director: Sudeshna Ghosh Banerjee Practice Manager: Jie Tang Task Team Leaders: Claudia Ines Vasquez Suarez, Shinya Nishimura, Xiaodong Wang The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER ABBREVIATIONS AND ACRONYMS Abbreviation Definition ACE ASEAN Centre for Energy ADB Asian Development Bank AF Additional Financing AIMS ASEAN Interconnection Masterplan Study AM Accountability Mechanism AMS ASEAN Member States APG ASEAN Power Grid APGF ASEAN Power Grid Financing ASEAN Association of Southeast Asian Nations E&S Environmental and Social EAP East Asia and Pacific ESCP Environmental and Social Commitment Plan ESRC Environmental and Social Risk Classification ESS Environmental and Social Standards FM Financial Management FY Fiscal Year GHG Greenhouse Gas GIS Geographic Information System GRM Grievance Redress Mechanism GRS Grievance Redress Service GW Giga Watt HAPUA Heads of ASEAN Power Utilities/Authorities HEIS Hands-on Expanded Implementation Support IDA International Development Association IP Implementation Progress IPF Investment Project Financing ISR Implementation Status and Results Report Lao PDR Lao People’s Democratic Republic M&E Monitoring and Evaluation MFD Maximizing Finance for Development MPA Multiphase Programmatic Approach MW Mega Watt PACE Partners for ASEAN Connectivity and Energy PAD Project Appraisal Document PCE Private Capital Enabled PDO Project Development Objective PMU Project Management Unit POM Project Operations Manual PPP Public-Private Partnership PPSD Project Procurement Strategy for Development The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER PrDO Program Development Objective PV Photovoltaic RE Renewable Energy SDR Special Drawing Rights SESA Strategic Environmental and Social Assessment TA Technical Assistance WB World Bank The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER TABLE OF CONTENTS I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING ........................................................................... 1 II. DESCRIPTION OF ADDITIONAL FINANCING ........................................................................................................... 9 III. KEY RISKS .............................................................................................................................................................. 11 IV. APPRAISAL SUMMARY ......................................................................................................................................... 12 V. WORLD BANK GRIEVANCE REDRESS .................................................................................................................... 15 VI. PROPOSED CHANGES ........................................................................................................................................... 15 VII. DETAILED CHANGE(S) ........................................................................................................................................... 16 The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER @#&OPS~Doctype~OPS^dynamics@afaprbasicdata#doctemplate OPERATION INFORMATION BASIC DATA - MAIN Product Information - Accelerating Sustainable Energy Transition Program (P181555) Operation ID Product/Financing Instrument P181555 Investment Project Financing (IPF) Task Team Leaders Claudia Ines Vasquez Suarez, Shinya Nishimura, Xiaodong Wang Beneficiary Country/Countries Geographical Identifier East Asia and Pacific Requesting Unit Responsible Unit IEAE1 (9259) IEAE1 (9259) Approval Date Closing Date 24-Sep-2024 30-Jun-2029 Practice Area (Lead) Approval Fiscal year Energy & Extractives 2025 Environmental and Social Risk Classification (ESRC) Substantial Is there collaboration between Bank and IFC? No Implementing Agency ASEAN Centre for Energy IMPLEMENTATION MODALITIES – MAIN Situations of Urgent Need of Assistance or Capacity Constraints [✓] Fragile State(s) [ ] Fragile within a non-fragile Country [✓] Small State(s) [ ] Conflict [ ] Responding to Natural or Man-made Disaster i The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER Other Situations [ ] Financial Intermediaries (FI) [ ] Series of Projects (SOP) [ ] Performance-Based Conditions (PBCs) [ ] Contingent Emergency Response Component (CERC) [ ] Alternative Procurement Arrangements (APA) [✓] Hands-on Expanded Implementation Support (HEIS) @#&OPS~Doctype~OPS^dynamics@afaproperationstatus#doctemplate OPERATION STATUS Development Objective (DO) Development Objective (Approved as part of Approval package on 27-Sep-2024) To help accelerate renewable energy scale up in the ASEAN countries, including through regional power trade. Key Information from Last ISR Operation Ratings NAME LAST ISR RATINGS 04-Apr-2025 Progress towards achievement of PDO  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory Overall Risk  Substantial Overall ESS Performance  Moderately Satisfactory Financial Management  Moderately Satisfactory Project Management  Satisfactory Procurement  Moderately Satisfactory Monitoring and Evaluation  Moderately Satisfactory Disbursement Summary (in USD million) Source of Funds Net Commitment Disbursed Undisbursed % Disbursed IBRD -- -- -- 0 IDA 5.13 0.99 4.14 19.32 Grants -- -- -- 0 @#&OPS~Doctype~OPS^dynamics@afaprmpa#doctemplate Multi-Phase Programmatic Approach (MPA) ii The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER MPA Development Objective Original MPA Program Development Objective (Approved on 15-May-2025 as part of Additional Financing in P181555) To accelerate the scale-up and grid integration of renewable energy in participating countries across the East Asia and Pacific region. Current MPA Program Development Objective (Approved on as part of in P181555) To accelerate the scale-up and grid integration of renewable energy in participating countries across the East Asia and Pacific region. Proposed MPA Program Development Objective MPA Status Under implementation. The last ISR was filed on April 4, 2025. MPA FINANCING DETAILS (US$, Millions) Board Approved MPA Financing Envelope: 2,500.00 MPA Program Financing Envelope: 2,532.20 of which Bank Financing (IBRD): 1,900.00 of which Bank Financing (IDA): 600.00 of which Other Financing sources: 32.20 MPA Expected Results Original MPA Program expected Results and Indicators (Previously approved on 15-May-2025 as part of Additional Financing in P181555) The proposed MPA has been designed to address the critical constraints to renewable energy deployment. It is expected to enable the development of 2,500 MW of renewable energy capacity and reduce 60 million tons of CO2eq. Current Expected MPA Results and their Indicators for the MPA Program (Previously approved on as part of in P181555) The proposed MPA has been designed to address the critical constraints to renewable energy deployment. It is expected to enable the development of 2,500 MW of renewable energy capacity and reduce 60 million tons of CO2eq. iii The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER MPA Program Risk Program Risk Substantial @#&OPS~Doctype~OPS^dynamics@afaprprocessing#doctemplate BASIC DATA – ADDITIONAL FINANCING Additional Financing No. 1 Additional Financing Type [✓] Activities are being added to expand the scope of the operation, perhaps in geography or in outputs (Scale-up) The operation has incurred increased costs due to inflation, exchange rate changes, and factors that were not [ ] anticipated at appraisal (Cost-overrun) The operation has experienced shortfalls in co-financing, counterpart financing, or cost recovery that were [ ] anticipated at appraisal but did not materialize. (Financing gap) The design of the operation has changed, and the new designs cost more than the original ones (Change in Project [ ] Design) Expected Approval Date Review Type/Corporate Review Level 12-Jun-2025 Regular Decision Meeting (DM) Will consulting services be required? Is this an Urgent Need or Capacity Constraint request? Yes No IMPLEMENTATION MODALITIES – ADDITIONAL FINANCING Situations of Urgent Need of Assistance or Capacity Constraints [✓] Fragile State(s) [ ] Fragile within a non-fragile Country [✓] Small State(s) [ ] Conflict [ ] Responding to Natural or Man-made Disaster Other Situations [ ] Financial Intermediaries (FI) [ ] Series of Projects (SOP) [ ] Performance-Based Conditions (PBCs) [ ] Contingent Emergency Response Component (CERC) [ ] Alternative Procurement Arrangements (APA) [✓] Hands-on Expanded Implementation Support (HEIS) iv The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER @#&OPS~Doctype~OPS^dynamics@afaprcostfinancing#doctemplate COSTS & FINANCING Summary (Total Financing in US$, Millions) Proposed Last Approved Additional Total Total Operation Cost 5.00 7.70 12.70 Total Financing 5.00 7.70 12.70 Of which IBRD/IDA 5.00 7.70 12.70 Financing Gap 0.00 0.00 Financing Details (in US$, Millions) Proposed Source Last Approved Additional Total International Development 5.00 7.70 12.70 Association (IDA) IDA Grant 5.00 7.70 12.70 Total Financing 5.00 7.70 12.70 IDA Resources (in US$, Millions)- Additional Financing Credit Grant SML Guarantee Total Other 0.00 7.70 0.00 0.00 7.70 Regional 0.00 7.70 0.00 0.00 7.70 Total 0.00 7.70 0.00 0.00 7.70 @#&OPS~Doctype~OPS^dynamics@afaprsort#doctemplate v The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER SYSTEMATIC OPERATIONS RISK- RATING TOOL (SORT) Last Approved Rating Risk Category Proposed Rating (ISR Seq. 01) Package - 04 Apr 2025 Political and Governance  Moderate  Moderate Macroeconomic  Substantial  Substantial Sector Strategies and Policies  Substantial  Substantial Technical Design of Project or Program  Moderate  Moderate Institutional Capacity for  Substantial  Substantial Implementation and Sustainability Fiduciary  Substantial  Substantial Environment and Social  Substantial  Substantial Stakeholders  Moderate  Moderate Overall  Substantial  Substantial @#&OPS~Doctype~OPS^dynamics@afaprclimate#doctemplate CLIMATE Climate Change and Disaster Screening Has this operation been screened for short-term and long-term climate change and disaster risks? Yes, it has been screened and the results are discussed in the Appraisal Document Where risks exist, have potential resilience-enhancing measures been identified in the appraisal document? No, significant risks were not identified Does this operation address specific risks, vulnerabilities, gaps or needs with respect to Climate Change that are identified in the SCD or the CPF? Yes Greenhouse Gas Emissions Accounting and Shadow Price of Carbon Gross Emissions Net Emissions (annual average, Net Emissions (economic lifetime, tCO2e) (economic lifetime, tCO2e/year) tCO2e) Not Applicable Not Applicable Not Applicable Explanation for Not Applicable As the proposed Additional Financing will scale up the number of pre-feasibility studies currently financed under the ongoing regional technical assistance project, the proposed AF is not subject to GHG Accounting, as it was with the original grant. The exemption was confirmed with the GHG Team. vi The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER Has the operation applied the Shadow Price of Carbon in the Economic Analysis? Not Applicable Explanation for Not Applicable As the proposed Additional Financing will scale up the number of pre-feasibility studies currently financed under the ongoing regional technical assistance project, the proposed AF is not subject to shadow price of carbon in the economic analysis, as it was with the original grant. The exemption was confirmed with the GHG Team. POLICY COMPLIANCE Does the operation depart from the CPF in content or in other significant respects? No Does the operation require any waivers from Bank policies? No @#&OPS~Doctype~OPS^dynamics@afaprteam#doctemplate TEAM Core Team Name Role Specialization ADM Responsible? Claudia Ines Vasquez Team Leader Yes Suarez Xiaodong Wang Team Leader No Shinya Nishimura Team Leader ACE TA Program No Financial Management Christina I. Donna Yes Specialist Michael Graeme Osborne Procurement Specialist Yes Khalid Bin Anjum Procurement Specialist No Khine Thwe Wynn Environmental Specialist Yes Ross James Butler Social Specialist Yes Duangrat Laohapakakul Counsel No Natalia Robalino Counsel No Nur Sarah Osza Ria Procurement Team Procurement No Nia Yuniarti Procurement Team No Julian Jose Palma Diaz Team Member No vii The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER Jackwin Simbolon Team Member No Vilayvanh Phonepraseuth Team Member Operations No Zayra Luz Gabriela Romo Team Member No Mercado Priyank Lathwal Team Member No Matteo Maria Malacarne Team Member No Fiona Evelyn Bingham Team Member No viii The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER I. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING 1. This Project Paper seeks the Executive Directors’ approval for a proposed Additional Financing (AF) in the amount of SDR 5.7 million (US$7.7 million equivalent) from the International Development Association (IDA) for the Clean Energy and Power Trade Development in Southeast Asia Project, which was approved on September 24, 2024 as part of Phase 1 of the Multiphase Programmatic Approach (MPA) Accelerating Sustainable Energy Transition Program. A. Background 2. The East Asia and Pacific (EAP) region faces a dual challenge of meeting rising energy demand while accelerating the transition to a low-carbon power system. Electricity supply in the region remains heavily reliant on fossil fuels, particularly coal, which still accounts for 59 percent of the electricity mix. This poses significant risks to both energy security and climate objectives. Within EAP, the Association of Southeast Asian Nations (ASEAN) subregion exemplifies these tensions: electricity demand is projected to triple by 2050, yet over 80 percent of generation still comes from fossil sources. At the same time, ASEAN member countries have set ambitious renewable energy (RE) targets and are actively exploring expanding regional power trade to enhance supply reliability and integration of variable renewable sources. However, decarbonization efforts face several challenges, including rapidly growing electricity demand, the need for firm capacity to ensure reliability, and a large existing stock of fossil fuel-based generation. The EAP region hosts 1,211 Giga Watt (GW) of operating coal-fired power plants—57 percent of the global total—with China alone accounting for 90 percent of this capacity. Despite renewable electricity supply growing at twice the rate of total demand over the past decade, coal remains a dominant fuel in the regional electricity generation mix. 3. Progress on RE development has varied significantly across the region. China and Viet Nam have rapidly scaled up RE deployment, while other EAP countries have lagged behind expectations. Today, RE is already the lowest-cost power supply option and has reached cost parity with coal in many countries around the world, including China and India. China has installed more solar and wind capacity than the rest of the world combined—adding 105 GW in 2021, 123 GW in 2022, and a record 293 GW in 2023, reaching a total of 1,050 GW by the end of 2023. Viet Nam developed over 20 GW of solar photovoltaic (PV) capacity before the COVID- 19 pandemic, including a significant share of rooftop PV, as well as wind power, mobilizing substantial private capital. However, the pace has slowed considerably since 2020 due to regulatory and institutional barriers to investment in the power sector. In contrast, capacity additions in other EAP countries have been much more limited. Between 2017 and 2022, Indonesia added only 170 Mega Watt (MW), the Philippines 475 MW, and Thailand 540 MW, with even smaller additions in other countries. 4. The ASEAN Power Grid (APG) represents the region’s long-standing vision to establish a fully integrated power network across Southeast Asia by 2045. The Greater Mekong Subregion power market initiative was established in 1992, emphasizing regulatory harmonization, technical standards, infrastructure investments, and market design among the Mekong River basins. This initiative laid the groundwork for the APG, officially envisioned in 1997 under ASEAN Vision 2020. Despite its ambitious goals, progress has been gradual. As of October 2024, only nine of the 18 planned interconnection projects have been completed, resulting in a total transfer capacity of around 7 GW compared with the APG vision of ~17.6 GW by 2040. These interconnections Page 1 The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER primarily facilitate bilateral energy trade through long-term power purchase agreements. Consequently, cross-border electricity trade accounts for approximately 5 percent of total electricity generation in ASEAN, with most trade occurring bilaterally. A noteworthy exception was the Lao-Thailand-Malaysia-Singapore Power Integration Project, which started operation in 2024, and transmitted 100 MW of power from hydropower sources in Lao People’s Democratic Republic (Lao PDR) to Singapore. The project inspired and sparked a new interest in regional power trade within ASEAN member states (AMS). 5. Regional power trade offers significant benefits, including improved reliability, affordability, flexibility, and resilience of power systems, while enabling a more sustainable and decarbonized energy transition. By connecting national grids, countries can enhance energy security through mutual support during shortages— as recently demonstrated in Cambodia and Viet Nam—where cross-border electricity flows became vital in periods of supply stress. Shared infrastructure fosters economies of scale, making RE deployment more cost- effective and accessible by pooling regional demand. Cross-border trade also enables better balancing of electricity supply and demand, which helps maximize the use of renewable resources and reduces reliance on fossil fuel-based backup systems, such as in Lao PDR’s case of energy surplus. Additionally, a more integrated grid lowers carbon emissions, attracts RE investments, and increases system stability by leveraging the diversity of resources—such as wind and solar—across countries. 6. Key challenges to realizing the APG include political fragmentation, prioritization of domestic infrastructure, regulatory misalignment, limited technical data, and lack of synchronized planning. Furthermore, financial barriers are particularly acute. Broadly, achieving the APG vision by 2045 will require approximately US$764 billion in generation and transmission investments. The ASEAN Interconnection Masterplan Study (AIMS III) identified 18 priority interconnection projects requiring an estimated US$17 billion, with at least US$90 million still needed for feasibility studies alone. While most cross-border transmission projects have historically relied on public financing, the scale of upcoming needs demands deeper private sector participation. Public-private partnerships (PPPs), especially for high-voltage infrastructure, offer a viable path forward in select markets. B. Rationale for Additional Financing MPA Program status 7. The MPA’s Program Development Objective (PrDO) along with the Program-level indicators remain relevant and unchanged for this AF. The PrDO of the MPA is to accelerate the scale-up and grid integration of renewable energy in participating countries across the EAP region. The aim is to enable the development of 2.5 GWof RE capacity, resulting in a net reduction of 60 million tons of CO2 equivalent greenhouse gas (GHG) emissions. To achieve its PrDO, the MPA activities are organized around three pillars: (i) Pillar One: Enabling policies and strengthening institutions; (ii) Pillar Two: Expanded and more flexible energy systems; and (iii) Pillar Three: De-risking clean energy investments. Phase 1, approved on September 24, 2024, includes Papua New Guinea and the Republic of Marshall Islands alongside a technical assistance (TA) project implemented by the ASEAN Centre for Energy (ACE). With Phase 1, the Board approved an overall financing envelope of US$2.5 billion for the six EAP countries listed under the MPA, including US$1.9 billion in IBRD and US$600 million in IDA financing. On October 29, 2024, the ACE grant became effective, thereby rendering the overall Program effective. Phase 2 and 3 of the MPA, consisting of an IBRD loan of US$47 million for Mongolia and an Page 2 The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER IDA grant of US$42 million for the Federated State of Micronesia, were approved by the Regional Vice President on November 13, 2024, and March 21, 2025, respectively. 8. Progress towards the achievement of the Project Development Objective (PDO) and the overall implementation progress (IP) of the MPA projects are rated Moderately Satisfactory (MS) or better. Financial management, project management, procurement and environmental and social (E&S) received ratings of MS or better in the first implementation status and results reports (ISR) filed in December 2024, for the Papua New Guinea and the Republic of Marshall Islands operations (Phase 1) and February 25, 2025 for the Mongolia operation (Phase 2). Other operations in Indonesia, Mongolia and Cambodia are under preparation as future phases of the MPA. Project Status 9. Parent Project – Phase 1: Clean Energy and Power Trade Development in Southeast Asia Project. The PDO of the parent project is to help accelerate RE scale up in the ASEAN countries, including through regional power trade. A US$5 million IDA grant was provided for the TA activities implemented by ACE, which comprises three components: (i) regional RE policy support and climate financing – designed to provide analytical support on policy issues and capacity development at the regional level to facilitate the development and financing of RE investments; (ii) regional power trade – building on the dialogue and experience that ACE has accumulated in supporting the evolution of the APG; this set of activities aims to provide additional technical and analytical support to initiate transboundary power trade within Southeast Asia, and to incorporate climate-resilient considerations into analyses of grid infrastructure; and; (iii) knowledge sharing, consultations, and capacity building –leveraging ACE’s regional network and access to consult, disseminate knowledge, and provide capacity building to member states and their agencies. 10. The ISR for the project, dated April 4, 2025, reflects steady progress, with all key project ratings—including progress toward the achievement of the PDO and overall implementation—currently rated as MS. The project faced initial delays due to the implementing agency’s limited familiarity with World Bank (WB) procurement procedures, as well as the delayed appointment of a new Executive Director at ACE, which temporarily slowed decision-making. However, with targeted support and training from the WB, ACE was able to build capacity and accelerate implementation. As a result, early key milestones have now been achieved: the Project Management Unit (PMU) was established in February 2025, and both the Project Operations Manual (POM) and Work and Budget Plan were finalized and cleared by the WB by end-March 2025. All legal covenants were met as of January 2025. Procurement of additional PMU staff will be completed by end of May 2025. Disbursements stand at US$990,680 (19 percent) as of May 16, 2025. 11. Performance on Financial Management (FM), Procurement and E&S Safeguards was rated MS, citing delays. On FM, there is no outstanding audit report for the project. The first audit report covering FY2025 will be due on June 30, 2026, and the project is in the process of hiring a Financial Management consultant. On E&S, the E&S specialist is expected to be hired by end May 2025 under the PMU and the Terms of Reference for the specialist has been cleared by the WB. As per the Environmental and Social Commitment Plan (ESCP), the establishment of the Grievance Redress Mechanism (GRM) is delayed, but ACE obtained their management’s approval for the establishment of the GRM on May 15, 2025 and is now working to establish it by end May Page 3 The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER 2025. There has also been delay in the Procurement process which has led to the rating of MS. The assessment of ACE’s procurement capacity revealed several challenges, including a lack of experience working on a WB- funded project. ACE is in the process of signing the contract with the external procurement specialist and seeking training to mitigate risks. Overall, ACE demonstrated a commitment to overcoming challenges with a focus on capacity building and efficient procurement processes. The WB will also provide close collaboration and support to mitigate the capacity risk for environment and social safeguards aspects while ACE is building up their knowledge, experience and capacity. 12. Progress has been made on the MPA’s Learning agenda and Gender activities with full buy-in of ACE management and coordination with the gender team of the WB. ACE is leading the MPA’s learning agenda under Component 3. Initial consultations have been carried out with participating countries and the first phase of learning will focus on E&S, regulatory reforms and digitization. Additionally, gender activities are progressing well. Specifically, ACE is planning, in consultation with female energy professionals in management positions as well as the WB gender team, to: (i) utilize gender-based data included in data collection for the ASEAN Energy Database to inform the regional ‘gender in energy sector’ diagnostic, (ii) hold a separate “Gender Summit” style conference as part of the ASEAN energy events, and (iii) start an internship program, including specific program for female staff utilizing the gender-based database, for AMS’ ministries of energy and utilities to intern at ACE. Additionally, ACE is also working and coordinating with the Gender team at the WB to further develop this program through their inclusion into Phase III of the EAP Energy and Gender Facility which is under preparation. These actions directly support the MPA results indicator on “Energy utilities among participating countries that have an increased share of women in technical, engineering, and/or management positions (Number)” which remains unchanged. Periodic assessments at the MPA Program level will be conducted to assess progress, adapt strategies as necessary and monitor advancements to ensure the TA’s objectives are achieved. Rationale for Additional Financing 13. Regional power trade in Southeast Asia has gathered recent momentum, with growing political commitment and convergence of market signals. At the same time, investor interest is rising, largely driven by falling RE costs, energy security concerns, carbon neutrality goals, and rising demand for clean energy imports. For instance, Singapore’s plan to import 6 GW of clean electricity by 2035 has sparked bilateral agreements with Cambodia, Indonesia, and Viet Nam, while Lao PDR and Viet Nam have also approved cross- border trade arrangements. Malaysia, the rotating chair of ASEAN for 2025, have identified APG development as one of their priority actions to make significant progress this year. These developments signal a shift from political vision to concrete action—and highlight the urgent need to expand transmission infrastructure and harmonize regional market frameworks. 14. The parent TA and the proposed AF are an integral part of joint efforts with Asian Development Bank (ADB) and ACE to channel this momentum into actionable investments through establishment of ASEAN Power Grid Financing (APGF) initiative. Along with ADB and other development partners, the WB is working closely with ASEAN to establish the APGF initiative to be launched in November 2025—an end-to-end, regionally coordinated platform designed to: (i) support early-stage project preparation, (ii) streamline investment planning, (iii) align project sequencing, and (iv) mobilize concessional and commercial finance to accelerate RE scale-up and integration in support of the 2045 APG target. A central feature of the initiative is support Page 4 The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER and resources for project preparation through ACE, which will play a fundamental role in building a pipeline of bankable projects that can crowd in investment from diverse financing sources while mitigating technical, E&S, and commercial risks (see Figure 1 below). Drawing lessons from regional power pools such as the Southern Africa Power Pool and European Union, the APGF will prioritize projects based on readiness, impact, and strategic alignment. It will also serve as a platform to coordinate efforts among development partners and financiers—public and private—facilitate regional consensus at the ministerial and utility levels and mobilize grant and concessional resources for technical studies and investment cost buy-downs. The APGF will also convene various development partners under Partners for ASEAN Connectivity and Energy (PACE) to facilitate mobilization of resources and TA for various projects identified as part of the APG development efforts, as well as provide project information to attract public and private financiers to encourage financing to the projects in their advanced stages. Figure 1: ASEAN Power Grid Financing (APGF) 15. Support to ACE through the IDA regional window for the implementation of TA activities meets the IDA regional window eligibility criteria for grants to regional organizations. There are six eligibility criteria for access to IDA grants by regional organizations: (i) it has been confirmed ACE is a bona fide regional organization since it has been established by AMS to facilitate regional economic growth and development by facilitating national, joint, and collective activities on energy in Southeast Asia. ACE has the legal status and fiduciary capacity to receive grant funding and carry out the planned activities; (ii) ACE cannot take on IDA credit as it is not a revenue-generating entity; (iii) the planned activities cannot be easily undertaken as part of national programs – the implementation of the activities under the TA project must be undertaken at a regional level with consultations and input from across the participating countries as needed. Regional research and TA delivered will then support and inform national actions; (iv) the activities to be financed by the regional IDA grant will be part of coordinated interventions to address the regional objective of accelerating the scale-up and grid integration of RE; (v) grant co-financing is not readily available to ACE from Page 5 The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER other development partners; and (vi) ACE is an active regional organization with ongoing engagement across AMSs and issues, and supports the strategic objectives of IDA on regional integration . ACE has and maintains its mandate from the AMS on technical support to energy issues in the region, and the activities to be scaled up under the AF are in line with the regional window eligibility criteria as outlined above. 16. Specifically, the activities identified for the scale up under this AF, to be implemented by ACE, will help strengthen regional integration across EAP, with significant benefits to IDA countries. The TA project and the AF will support IDA countries in ASEAN in building stronger institutional frameworks, enhancing their capacity for policy making, and improving the implementation of RE scale-up programs. As described above, TA activities are regional in nature since they require coordinated interventions that cannot easily be achieved at the individual country level: the TA project to be implemented by ACE will also focus on regional power trade in Southeast Asia, which would benefit IDA countries such as Cambodia and Lao PDR. 17. On March 19, 2025, ACE submitted a formal request for AF to respond to growing demand from AMS to accelerate implementation and address key barriers to project readiness . The request emphasizes the urgent need for funding to support a wide array of technical studies and address critical gaps in the preparation of cross-border interconnection projects. These resources are essential to scale up project development efforts, enhance technical capacity within AMS, and attract investment for priority interconnections under the APGF initiative. Ensuring ACE has the necessary support at this stage is crucial to sustaining implementation momentum and meeting the APG’s target of full operationalization by 2045. Although the current project has been active for less than a year, an exception has been granted by the Regional Vice President on April 4, 2025 to proceed with AF. 18. The proposed AF will accelerate preparation of the 18 priority interconnection projects identified under AIMS III and ensure alignment with the evolving power sector landscape in ASEAN. Scaling up pre-feasibility studies is essential to make these projects investment-ready, particularly in IDA countries such as Lao PDR and Cambodia, which have already requested support. Lao PDR, for example, submitted a request on March 18, 2025, for technical studies related to interconnections with Cambodia and Viet Nam. The emergence of subsea cable concepts further increases complexity requiring substantial preparation. Early-stage support will help demonstrate the feasibility and benefits of such infrastructure, as seen in other regions. Preparation of AIMS IV will also ensure regional planning reflects new developments, including subsea links, RE growth, and grid modernization. As regional power trade progresses, AMS—especially those with more limited capacity—will need support not only for investment preparation but also for commercial arrangements and regulatory reforms. This will help ensure fair risk-sharing and long-term sustainability of the APG. The AF will enable countries to advance both technical and commercial groundwork, including discussions on tariff structures where capital costs will be a key consideration. 19. The proposed AF is fully aligned with the PrDO, results chain and pillars of the MPA. The MPA’s PrDO indicators include: (i) RE capacity enabled with direct support, indirect support, and/or enabling policy support [2.5 GW]; and (ii) projected lifetime net GHG emissions form results achieved [60 million metric tons of CO2eq]. Both indicators remain unchanged from Board approval and continue to be aligned with the World Bank Group Corporate Scorecard. The proposed AF is aligned with the Program’s results chain and second pillar of the MPA - Expanded and more flexible energy systems - as it is expected to support investments that would strengthen domestic grid and interconnection capacity that are expected to increase utilization of Page 6 The World Bank Accelerating Sustainable Energy Transition Program (P181555) PROJECT PAPER existing RE capacities and encourage new RE investments through increased access to markets. Similarly, the proposed AF is aligned with Pillar One: Enabling policies and strengthened institutions and Pillar Three: De- risking clean energy investments as the technical studies will support AMS and ACE to develop their capacity to sustainably develop the transmission and interconnection investments, as well as support private sector participation projects to further leverage private capital. 20. The proposed additional IDA grant of SDR 5.7 million (US$7.7 million equivalent) does not exceed the approved Program financing envelope for IDA. In the MPA Project Appraisal Document (PAD) (P181555, Report No. 5623),1 the initial allocation for the Federated States of Micronesia (FSM) was tentatively US$70 million in IDA financing. A final allocation of US$42 million was confirmed during negotiations for FSM, given the availability of IDA financing, and the scope of the project was adjusted accordingly. To date, US$307 million of the approved IDA financing envelope has been utilized, allowing for this AF to remain within the approved Program financing envelope. Please refer to Table 1 below for an updated Program Framework. 1Publicly disclosed information regarding the Program and Phase 1 is available here: https://documents1.worldbank.org/curated/en/099082024140036078/pdf/BOSIB16d1369c00f61bfa71a84f0a92dfe3.pdf Page 7 The World Bank Accelerating Sustainable Energy Transition Program (P181555) Table 1: Updated Program Framework for the Accelerating Sustainable Energy Transition Program [Phase 1 Additional Financing] Phase Project title and ID Proposed PDO Instrument Estimated Estimated Estimated Estimated Estimated IBRD IDA Other Approval E&S Risk (US$, (US$, Concessional/ Date Rating millions) millions) Grant (US$, millions) One IPF – 5.00 – September Substantial Clean Energy and Power Trade Help accelerate renewable energy scale up in the ASEAN countries, 24, 2024 Development in SE Asia Project including through regional power trade. IPF (AF) – 7.70 – June 12, Substantial (P181555) 2025 Papua New Guinea: National Energy Increase access to renewable energy and enhance the reliability of the IPF – 200.00 4.20 September Substantial Access Transformation Project (P173194) electricity supply. 24, 2024 Republic of the Marshall Islands: (i) Increase renewable energy generation and (ii) improve the reliability and IPF – 60.00 – September Moderate Renewable Energy Generation and quality of electricity service in targeted main and outer islands. 24, 2024 Access Increase Project (P181250) Two Mongolia: Third Energy Sector Project increase the capacity and reliability of the transmission grid in the Project IPF 47.00 -- - November Moderate (P178190) Areas for renewable energy integration. 13, 2024 Three Federated States of Micronesia: Access Improve the reliability of electricity service, increase access, and enhance IPF – 42.00 – March 21, Moderate Reliability Improvement and Sustainable resilience of the power sector. 2025 Energy (P181253) Four Indonesia: Sustainable Least-cost Increase access to sustainable electricity in the Kalimantan and Sumatra PforR [600.00] – [28.00] (June 12, Substantial Electrification Program-2 (P501217) regions. 2025) Mongolia: Fourth Energy Sector Project Increase the capacity and reliability of the transmission grid in the project IPF [78.00] – – Q4 FY25 Moderate Later (P509161) areas for renewable energy integration phases Indonesia: Electricity Network Increase the delivery and reliability of electricity supply and integrate PforR [500.00] – – Q4 FY25 Moderate Transformation Program (P180992) distributed energy resources in the Java-Bali-Madura region. Indonesia: Grid and Renewable Energy Improve the electricity utility’s capacity to raise Sustainability Linked Guarantee [675.00] – – FY26 High Financing Facility Guarantee Finance to accelerate Indonesia’s energy transition. Cambodia: Power Grid Strengthening Support Cambodia in achieving its energy transition by promoting energy IPF – [285.30] – FY27 [TBC] Project efficiency through supply and demand interventions Totals [1,900.00] [600.00] [32.20] Grand Total [2,532.20] Page 8 The World Bank Accelerating Sustainable Energy Transition Program (P181555) II. DESCRIPTION OF ADDITIONAL FINANCING 21. An Additional Financing of SDR 5.7 million (US$7.7 million equivalent) is proposed to scale up Components 2 and 3 of the Clean Energy and Power Trade Development in Southeast Asia Project (parent project) and finance the below additional key activities (see Table 2): a. Scaling up pre-feasibility studies to support Project Preparation for regional power trade. (US$5.15 million) The original US$900,000 allocation under the parent project is sufficient to finance only one or two pre-feasibility studies—well below current regional demand for technical assessment. Lao PDR and Cambodia have formally requested support for feasibility assessments, and additional interest has emerged around transmission bottlenecks along the Thailand–Malaysia–Singapore corridor. With the proposed AF, ACE estimates it would be able to undertake four additional studies to advance investment preparation and technical due diligence for priority interconnectors. Studies to be undertaken are as below: i. Additional Pre-feasibility Studies for Interconnection and supporting domestic power grid investments. (US$3.6 million) The studies would not only include interconnections but bottlenecks in the domestic transmission system that is connected to it. This will ensure the sustainability of the interconnection, including climate and disaster risk screening/assessments, and incentivize national utilities to fully coordinate the investments into their Power Development Plans. In addition, complex projects, such as proposed subsea cables between Singapore and Viet Nam or Cambodia, require specialized assessments that exceed the scope of the current project would also be addressed. Additional resources are essential to enable these studies and support the region’s cross-border clean energy trade ambitions. ii. Accelerating readiness for private sector participation. (US$1.55 million) Assistance will be provided to national governments and utilities to support the preparation of bankable projects involving both public and private sector actors. The aim is to promote coordinated project development and innovative financing solutions to scale up regional power trade under the APG. This support will include: (i) identifying potential greenfield or brownfield PPP transmission projects; (ii) providing project preparation assistance for selected PPP candidates; and (iii) offering transaction structuring support, including asset monetization strategies, recycling opportunities, and future potential credit enhancements. b. Preparation of the ASEAN Interconnection Masterplan Study IV (AIMS IV). (US$1.2 million) The AIMS series serves as ASEAN’s strategic blueprint for regional interconnection. The previous master plan— AIMS III, identified 18 priority cross-border investments, which were endorsed by the APG working group. AIMS IV will update this analysis to reflect new interconnection proposals—including subsea cable projects—and incorporate evolving policy, market, and financing dynamics. In addition to technical assessments, AIMS IV will serve as a consultative platform to align AMS investment priorities and strengthen coordination on policy and financing frameworks. The Study will also include climate and disaster risk screening/assessments. Once finalized, it will be adopted as an ACE-endorsed policy document to guide regional power integration efforts. Page 9 The World Bank Accelerating Sustainable Energy Transition Program (P181555) c. Strengthening Implementation and Project Management. (US$1.35 million) The component will address the increased cost for PMU and recurring technical costs associated with the increased activities and coordination requirements: i. Additional Personnel and Recurring technical costs. (US$600,000) The allocation takes into account addition of FM personnel who will be managing the increased financial flows through ACE, legal resources that may be required due to increased complexity of the investments supported and increase in man-hours required from ACE technical staff to work on increasingly complex activities and tasks. The PMU will also facilitate the utilization of the gender- disaggregated data into a regional diagnostic report for publication. ii. Coordination with ASEAN Member States and other ASEAN meetings. (US$750,000) As the APG development efforts proceed, there has been a significant increase in coordination and consultation needs not only amongst the member states and ASEAN, but also with other sector meetings in economy and financing, to ensure that the member states are aware of the technical support being provided and potential investments that are being prepared which may require fiscal and public support in financing. The consultant will be hired and report to ACE based on the scope of work that the individual consultant will be required to lead on. Table 2: Proposed allocation in US$ equivalent Component Amount (US$) Additional (US$) Total (US$) 1. RE policy support and climate financing 1,500,000 - 1,500,000 2. Regional power trade 1,700,000 6,350,000 8,050,000 3.1. Knowledge sharing, consultations, and 500,000 - 500,000 capacity buildings 3.2. Strengthening and supporting the 1,300,000 1,350,000 2,650,000 implementation and overall management Total allocation 5,000,000 7,700,000 12,700,000 22. Change in Project Closing Date. To accommodate the implementation of additional activities financed under the AF, the project closing date will be extended by one year—from June 30, 2029, to June 30, 2030. The PDO remains achievable within the revised timeframe, including all activities supported through the AF. 23. Update of the Project Operations Manual. With more pre-feasibility studies being planned, the Recipient will be required to update the POM not later than 45 days after effectiveness to include selection criteria for the selection of pre-feasibility studies as well as development of the terms of reference for the studies, which will be subject to the Association’s non-objection. 24. Change in Disbursement Estimates. Disbursement projections will be updated to reflect the AF and the revised project implementation schedule. 25. Change in the Results Framework. The existing PDO indicator and intermediate indicators will remain unchanged but the target values and timelines of some of these indicators will be updated to reflect the scope of new Page 10 The World Bank Accelerating Sustainable Energy Transition Program (P181555) activities financed by the AF. Specifically, the target for the indicator on “Pre-feasibility studies conducted” and “Number of workshops and/or knowledge sharing successfully implemented” will be revised. In addition, four new intermediate indicators will be introduced to track a) transaction structuring support provided, b) amount of private capital enabled, c) completion of AIMS IV, and d) gender-disaggregated data in energy sector in ASEAN is collected, analyzed and diagnostic is produced (see Table 3). Table 3: Proposed revisions to the Results Framework Original Revised Indicator Unit Target Targets PDO indicator Updated RE strategies and/or regional integration Number 2 - plans adopted by countries Intermediate indicators Centralized database developed Yes/No Yes - Inclusion of gender-disaggregated data on Yes/ No Yes - employment data as part of the centralized database Pre-feasibility studies conducted Number 3 5 Number of workshops and/or knowledge sharing Number 5 6 successfully implemented Proposed New Intermediate Indicators Transaction structuring support provided Number - 1 US$140 Amount of Private Capital Enabled US$ - million Completion of AIMS IV Yes/No - Yes Gender-disaggregated data in energy sector in ASEAN Yes/No - Yes is collected, analyzed, and diagnostic is produced 26. Alignment with Parent Project. The activities proposed under the AF are aligned with the PDO of the parent project and meet the eligibility criteria for the IDA Regional Window. No changes are required to the PDO, implementation arrangements, fiduciary systems, environmental and social safeguards, or legal provisions. III. KEY RISKS 27. The overall risk to achieving the PDO is rated Substantial mainly due to the impact of the macroeconomic, sector policy and institutional capacity risks. The AF introduces no additional risks beyond those identified in the original project. 28. Macroeconomic risk is Substantial. Macroeconomic conditions will strongly impact the appetite and need for the AMS to request and implement the support that the ACE TA project is offering. The risk will be mitigated through identification of interconnection needs based on long-term power system development plans and to Page 11 The World Bank Accelerating Sustainable Energy Transition Program (P181555) identify the interconnection projects that are complementary not only from an economic standpoint, but from system operations. 29. Sector strategies and policy risk are Substantial. Changes in the AMS’ sector strategy and policies may lead to lower demand for the TA support being offered under ACE. To address this risk, the project will target the projects and issues that are based on long-term system planning and investment needs, rather than economic and financial justification alone. 30. Institutional capacity for implementation and sustainability risk is Substantial. While ACE has been implementing technical assistance and studies as its core function, it also lacks capacity in safeguards and fiduciary expertise. The risk is mitigated by the recruitment of external consultants to ensure full compliance and to conduct capacity building and training for the ACE staff to ensure continued sustainability. 31. Environmental and Social risk is Substantial. As indicated, ACE lacks E&S capacities and the project provides the resources to recruit external expertise to ensure compliance and capacity building. The E&S specialist will provide close support and also ensure that the GRM will be implemented, monitored and reported as per the original Financing Agreement. 32. Fiduciary risk is Substantial. While ACE has long experience in utilizing grants and completing procurement for consultants, they do not have the experience in WB financing and its requirements. As a mitigation measure, ACE will onboard external FM and Procurement specialists to their PMU who will be hired by end May 2025. In addition to including capacity building of ACE staff by these external specialists, they will also take advantage of training and capacity building opportunities that are made available through the WB specialists. IV. APPRAISAL SUMMARY A. Economic and Financial (if applicable) Analysis 33. Regional power system integration in ASEAN is expected to have not only positive economic and financial benefits but also emission reduction impact as well. The achievement of the APG and regional power trade among ASEAN countries can bring economic benefits from deferment or avoidance of investments in domestic power generation for the region and provide an alternative clean energy source. For example, there are significant hydropower development opportunities in the northern Mekong River basin that could be developed and traded to reduce cost, emissions, and enhance reliability of the interconnected power systems. Analysis conducted by the WB (2019)2 for the Greater Mekong Sub-region, estimated that regional integration could achieve savings of US$1.6 billion (in net present value (NPV) terms) while realizing carbon emission reduction potential of 7 percent by 2035. B. Technical 2Ricardo Energy and Environment (together with Intelligent Energy Systems and Nordpool Consulting). 2019. “Greater Mekong Subregion Power Market Development.” Final report prepared for the WB. Page 12 The World Bank Accelerating Sustainable Energy Transition Program (P181555) 34. Climate and disaster risk screening. The climate and disaster risk screening of the parent project applies to this AF. EAP’s high degree of vulnerability to climate change requires that investments in energy systems not only produce lower carbon emissions but also build resilience. More than half of the annual losses from natural disasters worldwide occur in EAP amounting to about US$50 billion in 2021. Without major adaptation efforts, flooding alone could lead to losses of 5 to 20 percent of GDP by 2100 in China, Indonesia, the Philippines, and Viet Nam. 35. The proposed AF is aligned with the goals of the Paris Agreement on both mitigation and adaptation. Paris Alignment assessments have been conducted for the activities identified for additional financing as summarized below: a. Assessment of consistency of operation with the country’s climate strategies. The proposed AF is consistent with EAP countries’ national and regional climate strategies. It supports EAP countries' carbon neutrality and energy resilience goals by enabling investments in domestic and regional grid investments that reduce Transmission and Distribution losses, expand renewable energy, and improve grid reliability to withstand climate hazards. The AF is consistent and supports the implementation of ACE’s strategy and vision on low- carbon development. It has recently released its Strategy for Carbon Neutrality designed to complement the AMS’ national initiatives in meeting their respective Nationally Determined Contributions, reinforcing the commitment to advance RE integration and the development of the APG. b. Assessment and reduction of mitigation risks. All activities to be financed by the MPA aim to accelerate RE integration across the EAP region to support low-carbon development and are considered aligned. Specifically, activities to be supported under this AF ‒ project preparation and transaction support, completion of AIMS IV ‒ are universally aligned. c. Assessment and reduction of adaptation risks. As mentioned above, the EAP region is highly vulnerable to climate risks. However, activities to be implemented through ACE are not likely to be materially impacted by climate hazards. Activities on training for capacity building will also ensure that overall adaptive capacity in addressing risks from climate hazards is further enhanced, as appropriate, while ensuring that the institutional framework and applicable systems of the borrower can adequately manage risks from climate hazards. These measures ensure that risks from climate hazards for the MPA and participating countries are acceptable. 36. Maximizing Finance for Development (MFD): The project is aligned with the World Bank’s MFD approach and private investment enabled through the project is counted towards MFD-E and Private Capital Enabling (PCE) under Component 2 - Regional Power Trade. Pre-feasibility studies will align investment priorities, strengthen coordination on policy and financing frameworks and support project preparation for regional power trade, interconnection and domestic power grid investments. This will accelerate readiness for private sector participation through identification of potential PPP transmission projects, project preparation assistance, offering transaction structuring support and credit enhancements. As a result, the volume of private capital enabled has been estimated based on an assumption that two average sized (70 MW) utility level RE private sector financed investments would be enabled with an estimated investment amount of US$140 million. This has been captured under the indicator “Amount of Private Capital Enabled (USD)” and the project has been tagged for both MFD-E and PCE. C. Financial Management 37. The AF would be used mainly for technical assistance, and therefore, the agreed FM arrangements for the parent project are adequate, including quarterly interim financial reporting and annual external and internal audit. There are no changes to the existing FM and Disbursement arrangements. Page 13 The World Bank Accelerating Sustainable Energy Transition Program (P181555) D. Procurement 38. The procurement capacity assessment conducted under the main project identified that ACE generally lacks experience with the WB’s Procurement Regulations. Key risks include insufficient capacity, poor quality of procurement documentation, and high workload on staff. To mitigate these risks, the proposed mitigation measures include hiring and onboarding of procurement consultant, staff training, capacity building with detailed guidance in the POM, and adhering to the WB’s Procurement Regulations. The Procurement Specialist has been hired and is now being provided with onboarding training and support from the Bank procurement specialist. 39. The POM will be updated and reviewed by the WB. The AF includes the procurement of additional consultants for the ACE PMU, including specialists in FM, and resources for legal advisory for complex projects that may require their services. 40. The Project Procurement Strategy for Development (PPSD) for the project, including the activities under AF, has been updated and agreed upon by the WB. The draft Procurement Plan for the AF activities was submitted to the WB via STEP on May 15, 2025, for review and is expected to be finalized by June 10, 2025. E. Legal Operational Policies Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No F. Environmental & Social 41. The AF is sought for the ACE TA project. Although the AF will not apply to any physical investments, the TA activities will involve design and feasibility studies for large and potentially complex subsequent investments. Due to the need to consider these potential downstream impacts during the design and feasibility activities to be funded by the AF, the Environmental and Social Risk Classification (ESRC) for the project remains Substantial. The existing project design has considered the management of potential downstream impacts and, via the Environmental and Social Commitment Plan (ESCP), requires prior WB approval of all Terms of References for TA activities carried out under the operation, which will apply to activities funded by the AF. No substantial update of the Stakeholder Engagement Framework (SEF) is required for the AF, and all requirements under the original project's SEF will be applied for the AF activities. Likewise, there is no material change in the ESCP. Both SEF and ESCP of the parent project were updated for the AF and disclosed publicly on the World Bank’s website on May 14, 2025, and on ACE’s website on May 19, 2025. 42. The AF activities will ensure the implementation of required mitigation measures from the parent project, including recruiting external experts, establishing a Grievance Redress Mechanism (GRM), and building E&S capacity within the ACE to ensure compliance and sustainability. The AF activities will adopt all the E&S Page 14 The World Bank Accelerating Sustainable Energy Transition Program (P181555) requirements stated in the ESCP such as preparation of Terms of References for all TA activities in line with provisions of the Environmental and Social Framework ; preparation and disclosing a Strategic Environmental and Social Assessment (SESA) based on the approved SESA’s Terms of Reference; adopting and implementing the outcome of SESA; and initiating the preparation of any plans, policies, programs, and strategies that may be recommended by the SESA. ACE has informed the WB that while the establishment of GRM has been delayed, ACE management approved its establishment on May 15, 2025 and expect the mechanism to become operational by end May 2025. The WB will continue to provide close support in this process and discuss with ACE whether additional support would be required. V. WORLD BANK GRIEVANCE REDRESS 43. Grievance Redress: Communities and individuals who believe that they are adversely affected by a project supported by the WB may submit complaints to existing project-level grievance mechanisms or the WB’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 complaint to the WB’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 WB’s Grievance Redress Service (GRS), visit http://www.worldbank.org/GRS. For information on how to submit complaints to the WB’s Accountability Mechanism, visit https://accountability.worldbank.org. @#&OPS~Doctype~OPS^dynamics@afaprproposedchanges#doctemplate Summary changes VI. PROPOSED CHANGES Operation Information Proposed Changes Operation Information Proposed Changes MFD/PCE Yes Loan Closing Date Extension Yes Results Yes Loan Cancellations No Disbursements Estimates Yes Reallocations No Components Yes Financial Management No Development Objective No Procurement No Summary Description No Institutional Arrangement No (Operation Abstract) Legal Operational Policies No Implementation Schedule No Page 15 The World Bank Accelerating Sustainable Energy Transition Program (P181555) Legal Covenants No Implementation Modalities No Conditions No Implementation Modalities No Disbursements Arrangements No Additional Regional No Institutions Clients No @#&OPS~Doctype~OPS^dynamics@afaprdetailedchanges#doctemplate VII. DETAILED CHANGE(S) COMPONENTS Last Approved Proposed Component Name Cost (USD) Action Component Name Cost (USD) Regional Renewable Energy Regional Renewable Energy Policy Support and Climate 1,500,000.00 No Change Policy Support and Climate 1,500,000.00 Financing Financing Regional Power Trade 1,700,000.00 Revised Regional Power Trade 8,050,000.00 Knowledge Sharing, Knowledge Sharing, Consultations, and Capacity 1,800,000.00 Revised Consultations, and Capacity 3,150,000.00 Building Building TOTAL 5,000,000.00 12,700,000.00 COSTS & FINANCING Private Capital Facilitation Is this an MFD-Enabling Project (MFD-EP)? YesUnder revision Last approved as part of PAD Data Sheet (Approval) on 26-Sep-2024 Is this project Private Capital Enabling (PCE)? YesUnder revision Last approved as part of PAD Data Sheet (Approval) on 26-Sep-2024 LOANS Loan Closing Page 16 The World Bank Accelerating Sustainable Energy Transition Program (P181555) Original Revised Proposed Proposed Deadline Loan/Credit/Trust Status Closing Closing(s) Closing for Withdrawal Fund Applications IDA-E3430 Effective 30-Jun-2029 30-Jun-2029 30-Jun-2030 31-Oct-2030 DISBURSEMENTS Operation Dates & Projection Details Reasons to change the full Disbursement date and/or the projection Additional Financing Implementation Start Date Operation Closing Date 24-Sep-2024 30-Jun-2029 Projected Date for Full Disbursement 30-Dec-2030 Expected Disbursements (in US $) (Absolute) Original Estimation at Preparation Actual Year Revised Estimation (Approval Package – 27 Sep 2024) FY2025 454,546.45 1,175,900.00 990,680.00 FY2026 1,000,000.00 2,586,600.00 0.00 FY2027 1,500,000.00 3,880,200.00 0.00 FY2028 1,500,000.00 1,146,700.00 0.00 FY2029 500,000.00 600,000.00 0.00 FY2030 0.00 480,000.00 0.00 FY2031 0.00 130,600.00 0.00 ENVIRONMENTAL & SOCIAL Overview Operation Location Operation location and salient physical characteristics relevant to the ESS Assessment (geographic, environmental, social) (if known) All activities to be supported under the additional financing are consultancy services, consultation/coordination and capacity building implemented by ASEAN Centre for Energy. Detailed operation location(s) and salient physical characteristics relevant to the ESS Assessment (geographic, environmental, social) Overall, the geographical scope of the proposed activities under the additional financing covers multiple countries within the ASEAN region with a focus on enhancing regional power trade, renewable energy integration, and Page 17 The World Bank Accelerating Sustainable Energy Transition Program (P181555) infrastructure development to support the ASEAN Power Grid initiative. The additional financing (AF) aims to scale up of pre-feasibility studies, making projects investment-ready. The activities proposed under the AF fall within the original scope of the parent project. Borrower’s Institutional Capacity The additional financing (AF) aims to scale up of pre-feasibility studies, making projects investment-ready. The scope of AF is the same as the parent project, so information from the parent project applies here. The AF activities, will ensure the implementation of required mitigation measures from the parent project, including recruiting external experts, establishing a GRM, and building E&S capacity within the ASEAN Centre for Energy (ACE) to ensure compliance and sustainability. Assessment Environmental & Social Risk Classification Environmental Risk Rating Social Risk Rating Substantial Substantial Original Environmental and Social Risk Rating (ESRC) Revised Environmental and Social Risk Rating (ESRC) Substantial Substantial Environmental & Social Standards E & S Standards Relevance ESS 1: Assessment and Management of Environmental and Social Risks and Relevant Impacts ESS 10: Stakeholder Engagement and Information Disclosure Relevant ESS 2: Labor and Working Conditions Relevant ESS 3: Resource Efficiency and Pollution Prevention and Management Relevant ESS 4: Community Health and Safety Relevant ESS 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant ESS 6: Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources ESS 7: Indigenous Peoples/Sub-Saharan African Historically Underserved Relevant Traditional Local Communities ESS 8: Cultural Heritage Relevant ESS 9: Financial Intermediaries Not Currently Relevant Summary of Assessment of Environmental and Social Risks and Impacts The AF is sought for the ACE TA project. Although the AF will not apply to any physical investments, the TA activities will involve design and feasibility studies for large and potentially complex subsequent investments. Due to the need to consider these potential downstream impacts during the design and feasibility activities to be funded by the AF, the Environmental and Social Risk Classification (ESRC) for the project remains Substantial. The existing project design Page 18 The World Bank Accelerating Sustainable Energy Transition Program (P181555) has considered the management of potential downstream impacts and, via the Environmental and Social Commitment Plan (ESCP), requires prior WB approval of all Terms of References for TA activities carried out under the operation, which will apply to activities funded by the AF. No substantial update of the Stakeholder Engagement Framework (SEF) is required for the AF, and all requirements under the original project's SEF will be applied for the AF activities. Likewise, there is no material change in the ESCP. Both SEF and ESCP of the parent project were updated for the AF and disclosed publicly on May 14, 2025. 22. The AF activities will ensure the implementation of required mitigation measures from the parent project, including recruiting external experts, establishing a Grievance Redress Mechanism (GRM), and building E&S capacity within the ACE to ensure compliance and sustainability. The AF activities will adopt all the E&S requirements stated in the ESCP such as preparation of Terms of References for all TA activities in line with provisions of the Environmental and Social Framework ; preparation and disclosing a Strategic Environmental and Social Assessment (SESA) based on the approved SESA’s Terms of Reference; adopting and implementing the outcome of SESA; and initiating the preparation of any plans, policies, programs, and strategies that may be recommended by the SESA. ACE has informed the WB that while the establishment of GRM has been delayed, ACE management approved its establishment on May 15, 2025 and expect the mechanism to become operational by end May 2025. The WB will continue their support in this process. Last Finalized Date Is a common approach being considered? 18-May-2025 No Page 19 The World Bank Accelerating Sustainable Energy Transition Program (P181555) RESULTS COUNTRY: Accelerating Sustainable Energy Transition Program @#&OPS~Doctype~OPS^dynamics@afaprresultframework#doctemplate Project Development Objective(s) To help accelerate renewable energy scale up in the ASEAN countries, including through regional power trade. PDO Indicators by PDO Outcomes Baseline Period 1 Completion Period For Official Use Only To help accelerate RE scale up in the ASEAN countries, including through regional power trade Revise Updated RE strategies and/or regional integration plans adopted by countries (Number) Apr/2024 Nov/2027 Jun/2030 0.00 0.00 2.00 Intermediate Results Indicators by Components Baseline Period 1 Completion Period Regional Renewable Energy Policy Support and Climate Financing Revise Centralized database developed (Yes/No) Mar/2024 Nov/2027 Jun/2030 No No Yes Revise Inclusion of gender-disaggregated data on employment data as part of the centralized database (Yes/No) Mar/2024 Nov/2027 Jun/2030 No No Yes Revised Regional Power Trade Revise Pre-feasibility studies conducted (Number) Page 20 The World Bank Accelerating Sustainable Energy Transition Program (P181555) Mar/2024 Nov/2027 Jun/2030 0 2 5 Revise Completion of ASEAN Interconnection Masterplan Study IV (Yes/No) May/2025 Nov/2027 Jun/2030 0 No Yes Revise Transaction Structuring Support provided (Number) May/2025 Nov/2027 Jun/2030 0 0 1 Revise Amount of private capital enabled (Amount(USD)) May/2025 Nov/2027 Jun/2030 0 0 140,000,000 For Official Use Only Revised Knowledge Sharing, Consultations, and Capacity Building Revise Number of workshops and/or knowledge sharing successfully implemented (Number) Mar/2024 Nov/2027 Jun/2030 0 3 6 New Gender-disaggregated data in energy sector in ASEAN is collected, analyzed, and diagnostic is produced (Yes/No) May/2025 Nov/2027 Jun/2030 No No Yes Page 21 The World Bank Accelerating Sustainable Energy Transition Program(P181555) PROJECT PAPER Monitoring & Evaluation Plan: PDO Indicators by PDO Outcomes PDO Outcome To help accelerate RE scale up in the ASEAN countries, including through regional power trade Indicator Name Updated RE strategies and/or regional integration plans adopted by countries (Number) Adoption of updated RE strategies and regional integration plans by the government authorities of countries participating in the MPA program. Updated RE strategies and regional integration plans may include official government records, policy documents, or strategic plan publications such as (but not limited Description to): national RE action plans, regional energy integration frameworks, climate change mitigation strategies, green growth strategies, energy sector reform policies, investment plans for RE, technology-specific deployment plans, or energy access expansion plans. Frequency Annual Data source ACE to aggregate data from AMS Methodology for Data ACE to obtain data from Heads of ASEAN Power Utilities/Authorities (HAPUA). Senior Officials Meeting on Energy (SOME) or ASEAN Member States (AMS) Collection directly Responsibility for Data ACE Collection Page 22 The World Bank Accelerating Sustainable Energy Transition Program(P181555) PROJECT PAPER Monitoring & Evaluation Plan: Intermediate Results Indicators by Components Results Area Regional Renewable Energy Policy Support and Climate Financing Indicator Name Centralized database developed (Yes/No) The centralized database should include GIS data on renewable potential, energy projects, and environmental and social data including employment data. Description It will serve as a platform for knowledge sharing and collaboration. Frequency Annual Data source ACE Methodology for Data ACE is the implementing agency Collection Responsibility for Data ACE Collection Indicator Name Inclusion of gender-disaggregated data on employment data as part of the centralized database (Yes/No) The centralized database should include GIS data on renewable potential, energy projects, and environmental and social data. The centralized database Description should include gender-disaggregated data on employment data. Frequency Annual Data source ACE Methodology for Data ACE is the implementing agecny Collection Responsibility for Data ACE Collection Results Area Regional Power Trade Page 23 The World Bank Accelerating Sustainable Energy Transition Program(P181555) PROJECT PAPER Indicator Name Pre-feasibility studies conducted (Number) Pre-feasibility studies will focus on transmission and/or interconnection projects identified in the ASEAN power grid initiative. Studies will assess the Description technical, economic, and/or environmental aspects to assess the viability of such projects and provide recommendations for their implementation. Frequency Semi-annual Data source ACE Methodology for Data ACE is the implementing agency Collection Responsibility for Data ACE Collection Indicator Name Completion of ASEAN Interconnection Masterplan Study (AIMS) IV The AIMS series serves as ASEAN’s strategic blueprint for regional interconnection and updated analysis provided under AIMS IV will reflect new Description interconnection proposals—including subsea cable projects—and incorporate evolving policy, market, and financing dynamics to the regional power trade strategies. Frequency Annual Data source ACE Methodology for Data ACE is the implementing agency Collection Responsibility for Data ACE Collection Indicator Name Transaction Structuring Support provided (Number) Assistance will be provided to national governments and utilities to support the preparation of bankable projects involving both public and private sector Description actors. Frequency Annual Data source ACE Methodology for Data ACE is the implementing agency Page 24 The World Bank Accelerating Sustainable Energy Transition Program(P181555) PROJECT PAPER Collection Responsibility for Data ACE Collection Indicator Name Amount of private capital enabled (Amount(USD)) Indicator will track the private sector participation enabled through identification of potential PPP transmission projects, project preparation assistance, Description offering transaction structuring support and credit enhancements. Frequency Annual Data source ACE Methodology for Data ACE to obtain data from Heads of ASEAN Power Utilities/Authorities (HAPUA), Senior Officials Meeting on Energy (SOME) or ASEAN Member States (AMS) Collection directly Responsibility for Data ACE Collection Results Area Knowledge Sharing, Consultations, and Capacity Building Indicator Name Number of workshops and/or knowledge sharing successfully implemented (Number) Number of events successfully implemented. "Successfully implemented" means that the event in question was conducted as planned and met its stated Description objectives. Events may include (but are not limited to): workshops, seminars, conferences, trainings, roundtables, or other capacity-building or knowledge- sharing events. Frequency Semi-annual Data source ACE Methodology for Data ACE is the implementing agency Collection Responsibility for Data ACE Collection Indicator Name Gender-disaggregated data in energy sector in ASEAN is collected, analyzed, and diagnostic is produced (Yes/No) Description The Gender-disaggregated data collected in the database will inform and be utilized in the regional diagnostic to be completed. Page 25 The World Bank Accelerating Sustainable Energy Transition Program(P181555) PROJECT PAPER Frequency Annual Data source ACE Methodology for Data ACE is the implementing agency Collection Responsibility for Data ACE Collection Page 26