FOR OFFICIAL USE ONLY Report No: PAD3995 INTERNATIONAL DEVELOPMENT ASSOCIATION PROJECT APPRAISAL DOCUMENT ON A PROPOSED GRANT IN THE AMOUNT OF SDR 35 MILLION (US$50 MILLION EQUIVALENT) AND A PROPOSED GRANT IN THE AMOUNT OF US$2.7 MILLION FROM THE JAPAN POLICY AND HUMAN RESOURCES DEVELOPMENT FUND TO THE REPUBLIC OF SIERRA LEONE FOR THE ENHANCING SIERRA LEONE ENERGY ACCESS PROJECT JANUARY 5, 2021 Energy and Extractives Global Practice Western and Central 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 November 30, 2020) Currency Unit = Sierra Leonean Leone (SLL) SLL 10,020 = US$1 US$1.42 = SDR 1 FISCAL YEAR January 1 - December 31 Regional Vice President: Ousmane Diagana Country Director: Pierre Frank Laporte Regional Director: Riccardo Puliti Practice Manager: Ashish Khanna Task Team Leaders: Jianping Zhao, Alassane Agalassou ABBREVIATIONS AND ACRONYMS ABC Aerial Bundled Cable ACSR Aluminum Conductor Steel-Reinforced AF Additional Financing AfDB African Development Bank AIDI Infrastructure Development Index ATC&C Aggregate Technical, Commercial, and Collection AWPB Annual Work Plans and Budgets CAPEX Capital Expenditures CHC Community Health Center CHP Community Health Post CHW Community Health Work CLSG Côte d'Ivoire -Liberia-Sierra Leone-Guinea CoC Code of Conduct COVID-19 Coronavirus Disease CPF Country Partnership Framework DPF Development Policy Financing E&S Environmental and Social EAP Energy Access Project ECOWAS Economic Community of West African States EDSA Electricity Distribution and Supply Authority EGTC Electricity Generation and Transmission Company EIRR Economic Internal Rate of Return ENIP Electricity Network Investment Plan EPC Engineer, Procure, and Construct ESCP Environmental and Social Commitment Plan ESIA Environmental and Social Impact Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan ESMU Environmental and Social Management Unit ESP Education Sector Plan ESS Environmental and Social Standards ESURP Energy Sector Utility Reform Project EU European Union EVD Ebola Virus Disease EWRC Electricity and Water Regulatory Commission EXIM Export–Import FCDO Foreign, Commonwealth and Development Office FDI Foreign Direct Investment FHH Female-headed Households FIRR Financial Internal Rate of Return FM Financial Management FMS Financial Management Specialist FY Fiscal Year GBV Gender-based Violence GDP Gross Domestic Product GHG Greenhouse Gas GII Gender Inequality Index GIZ German Agency for International Cooperation GNI Gross National Income GoSL Government of Sierra Leone GRM Grievance Redress Mechanism HDI Human Development Index HFO Heavy Fuel Oil HSSE Health, Safety, Social and Environment IA Implementing Agency ICB International Competitive Bidding IFC International Finance Corporation IFR Interim Financial Report IPF Investment Project Financing IPP Independent Power Producer IRENA International Renewable Energy Agency JSS Junior Secondary Education kW Kilowatt kWh Kilowatt Hour kWp Kilowatt Power LV Low Voltage M&E Monitoring and Evaluation MC Management Contractor MCC Millennium Challenge Corporation MCHP Maternal and Child Health Post MDA Ministry, Department and Agency MFD Maximizing Finance for Development MHH Male-headed Household MIGA Multilateral Investment Guarantee Agency MoE Ministry of Energy MoED Ministry of Education MoF Ministry of Finance MoH Ministry of Health MSME Micro, Small and Medium Enterprise MTNDP Medium-term National Development Plan MV Medium Voltage MW Megawatt MWp Megawatt Power NDC Nationally Determined Contribution NGO Non-government Organization NPA National Power Authority NPP National Procurement Procedures NPPA National Public Procurement Authority NPV Net Present Value NRECA National Rural Electric Cooperative Association O&M Operations and Maintenance OGS Off Grid Solar OPGW Optical Ground Wire PASA Programmatic Advisory Service and Analytics PDO Project Development Objective PFM Public Financial Management PHRD Policy and Human Resources Development PIU Project Implementation Unit PMT Project Management Team PMU Project Management Unit PP Procurement Plan PPIAF Public-Private Infrastructure Advisory Facility PPSD Project Procurement Strategy for Development PSRP Poverty Reduction Strategy Paper PV Photovoltaic QCBS Quality- and Cost-Based Selection RAP Resettlement Action Plans REASL Renewable Energy Association of Sierra Leone RFB Request for Bids RFQ Request for Quotations RPF Resettlement Policy Framework SCD Systematic Country Diagnostics SDR Special Drawing Rights SEA Sextual Exploitation and Abuse SEP Stakeholder Engagement Framework SH Sextual Harassment SHS Solar Home System SL Sierra Leone SLIDF Sierra Leone Infrastructure Development Fund SPD Standard Procurement Document SSA Sub-Saharan Africa STEM Science, Technology, Engineering and Mathematics STEP Systematic Tracking of Exchanges in Procurement T&C Technical and Commercial TA Technical Assistance ToR Terms of Reference UNDP United Nations Development Program UNICEF United Nations Children's Fund UPE Universal Primary Education USTDA United States Trade and Development Agency VAT Value Added Tax WAPP West Africa Power Pool WB World Bank WBG World Bank Group WHO World Health Organization WTP Willingness-To-Pay The World Bank Enhancing Sierra Leone Energy Access Project (P171059) TABLE OF CONTENTS DATASHEET ........................................................................................................................... 1 I. STRATEGIC CONTEXT ...................................................................................................... 6 A. Country Context................................................................................................................................ 6 B. Sectoral and Institutional Context .................................................................................................... 8 C. Relevance to Higher Level Objectives............................................................................................. 11 II. PROJECT DESCRIPTION.................................................................................................. 14 A. Project Development Objective ..................................................................................................... 14 B. Project Components ....................................................................................................................... 14 C. Project Beneficiaries ....................................................................................................................... 19 D. Results Chain .................................................................................................................................. 20 E. Rationale for World Bank Involvement and Role of Partners......................................................... 20 F. Lessons Learned and Reflected in the Project Design .................................................................... 22 III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 23 A. Institutional and Implementation Arrangements ....................................................................... 23 B. Sustainability ............................................................................................................................... 24 IV. PROJECT APPRAISAL SUMMARY ................................................................................... 25 A. Technical, Economic and Financial Analysis ................................................................................... 25 B. Fiduciary.......................................................................................................................................... 27 C. Legal Operational Policies ............................................................................................................... 30 D. Environmental and Social ............................................................................................................... 30 V. GRIEVANCE REDRESS SERVICES ..................................................................................... 34 VI. KEY RISKS ..................................................................................................................... 34 VII. RESULTS FRAMEWORK AND MONITORING ................................................................... 37 ANNEX 1: Implementation Arrangements and Support Plan ................................................. 43 ANNEX 2: Detailed Project Description................................................................................. 60 ANNEX 3: Gender Gap Analysis and Action Plan ................................................................... 82 ANNEX 4: Economic and Financial Analysis .......................................................................... 89 ANNEX 5: WBG Support for COVID-19 Health, Social and Economic Response ...................... 95 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) DATASHEET BASIC INFORMATION BASIC_INFO_TABLE Country(ies) Project Name Sierra Leone Enhancing Sierra Leone Energy Access Project ID Financing Instrument Environmental and Social Risk Classification Investment Project P171059 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 28-Jan-2021 31-Dec-2025 Bank/IFC Collaboration No Proposed Development Objective(s) The Project Development Objective is to increase electricity access in Sierra Leone. Components Component Name Cost (US$, millions) Page 1 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Electrification through of towns and communities through grid extension 35.00 Electrification through mini-grids and standalone solar systems 12.70 Human capital development and implementation support 5.00 Organizations Borrower: Republic of Sierra Leone Implementing Agency: Electricity Distribution and Supply Authority Ministry of Finance PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 52.70 Total Financing 52.70 of which IBRD/IDA 50.00 Financing Gap 0.00 DETAILS -NewFinEnh1 World Bank Group Financing International Development Association (IDA) 50.00 IDA Grant 50.00 Non-World Bank Group Financing Trust Funds 2.70 Japan Policy and Human Resources Development Fund 2.70 IDA Resources (in US$, Millions) Credit Amount Grant Amount Guarantee Amount Total Amount Sierra Leone 0.00 50.00 0.00 50.00 National PBA 0.00 50.00 0.00 50.00 Page 2 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Total 0.00 50.00 0.00 50.00 Expected Disbursements (in US$, Millions) WB Fiscal Year 2021 2022 2023 2024 2025 2026 Annual 3.34 5.76 11.81 14.77 9.06 5.26 Cumulative 3.34 9.10 20.91 35.68 44.74 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 ⚫ Substantial 2. Macroeconomic ⚫ Substantial 3. Sector Strategies and Policies ⚫ Moderate 4. Technical Design of Project or Program ⚫ Moderate 5. Institutional Capacity for Implementation and Sustainability ⚫ Substantial 6. Fiduciary ⚫ Substantial 7. Environment and Social ⚫ Substantial 8. Stakeholders ⚫ Moderate 9. Other ⚫ Substantial 10. Overall ⚫ Substantial Page 3 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) COMPLIANCE Policy Does the project depart from the CPF in content or in other significant respects? [ ] Yes [✓] No Does the project require any waivers of Bank policies? [ ] Yes [✓] No Environmental and Social 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 Not Currently 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 Page 4 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Conditions Type Description Effectiveness (a) the Recipient has prepared and adopted the Project Implementation Manual, in form and substance satisfactory to the Association; and Type Description Effectiveness (b) the Subsidiary Agreement, acceptable to the Association, shall have been duly executed and delivered on behalf of the Recipient and the Project Implementing Entity and shall have become effective and binding upon such parties in accordance with its terms. Page 5 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) I. STRATEGIC CONTEXT A. Country Context 1. The reestablishment of democracy in Sierra Leone over four elections since 2002 is an important achievement but worrying signs of fragility remain. The 2018 election required intervention by the Economic Community of West African States (ECOWAS) to defuse the disputed outcome, and almost every by-election since has been marred by some violence and disputed outcomes. The dominant social contract is within ethnically aligned political structures with multiple centers of power in cultural authorities, which undermines social cohesion. The impact of natural hazards and climate-related shocks, as well as macroeconomic shocks and epidemics, is worsened in the presence of pre-existing vulnerabilities and fragility—notably, a youth demographic with low education and constrained employment opportunities, power asymmetry and elite capture, and limited institutional capacity. 2. There has indeed been progress, reflected in significant poverty reduction from 66.4 percent to 52.3 percent between the end of the war in 2003 and just before the Ebola Virus Disease (EVD) epidemic and iron ore price shocks in 2015. The ample availability of fertile land facilitated growth in agriculture, which contributes half of the country’s Gross Domestic Product (GDP) (2018). Urban areas have become local trading and commercial centers, especially in the capital of Freetown (which accounts for a third of GDP). There has been Foreign Direct Investment (FDI) in mining and agriculture, though the contribution of mining to job creation and fiscal revenues has underperformed. 3. The human capital situation in Sierra Leone is very challenging and is further complicated by the Coronavirus disease (COVID-19) pandemic. The population of 7.8 million has the fifth lowest life expectancy globally (51 years). These issues are further complicated by the COVID-19 pandemic, which, as the EVD, could perpetuate the vicious cycle of poverty and gender inequality. Youth under 35 years of age account for 75 percent 1 of the population but much of this cohort spent their formative years in the decade-long war. The youth bulge is, therefore, associated, in part, with low skills and some frustration around unmet expectations, and is an important source of fragility. On gender inequality, the country has a Gender Inequality Index (GII) value of 0.644, which reflects inequalities in three dimensions, namely reproductive health, empowerment, and economic activity. With this GII, Sierra Leone is ranked 153 out of 162 countries in the 2018 index. Inequality is characterized for example by low educational attainment (19.9 percent of adult women having at least a secondary level of education compared to 32.9 percent of men) and lower female participation in the labor market. 4. The pace of poverty reduction has slowed in recent years. Poverty fell by 1.5 percentage points annually over 2003-2011, and by 0.8 percentage points over 2012-2018, reaching 56.8 percent in 2018.2 While the share of food-insecure Sierra Leoneans decreased from 49.8 percent to 43.7 percent (2012-2018), 3.2 million people remain food-insecure. COVID-19 will likely put additional stress on poor households due to slowing food production, shortages in food imports and higher food prices. The Gini coefficient increased from 0.33 (2011) to 0.37 (2018). Poverty remains disproportionately high in rural areas (78.5 percent) and the largest reduction occurred in urban areas outside of Freetown (by 0.9 percentage points annually over 2012-2018). The major determinants of poverty are large household size, low education of the household head, and employment in 1 Sierra Leone – Country Partnership Framework for the period FY21-FY26, Report number 148025, May 26, 2020 and Bank reports. 2 Sierra Leone – Country Partnership Framework for the period FY21-FY26, Report number 148025, May 26, 2020 and Bank reports. Page 6 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) agriculture and non-wage employment. Furthermore, poverty rates for households with access to electricity are between 13.5 and 20.2 percentage points lower than those without electricity access. Extreme poverty in rural areas increased by 4.3 percentage points (2012-2018); and three (out of 15) districts have poverty rates above 80 percent. 5. Higher economic growth rates and higher poverty elasticity of growth are needed to meet future poverty reduction targets, and this will further be complicated by COVID-19. Growth between 2012-2018 was less pro-poor than between 2003-2011. Starting in 2019, poverty will have to fall at an annual rate of 4.9 percentage points to achieve the World Bank Group (WBG) twin goals (ending extreme poverty and boosting shared prosperity) target of 3 percent in 2030, and a growth rate of 16 percent per year will be needed. 6. The economy struggles to create jobs because it is undiversified and trapped in subsistence agriculture and subsistence household enterprises. The undiversified economy remains dependent on natural resources for revenue and on subsistence farming and petty trading for most employment. Informality with low productivity dominates both the agriculture and non-agriculture labor markets. The country not only has one of the lowest productivity levels in the world3, but with few manufacturing and value-addition activities, there is significant room for improvement in export performance. 7. Weak governance and corruption have had cross-cutting implications: increased cost of doing business, low investor confidence and poor accountability for service delivery to citizens. Governance constraints and coordination failures across ministries, departments and agencies (MDAs), and vertically with local administrative authorities, negatively affect private sector competitiveness and effectiveness of spending on social services. Furthermore, weak infrastructure governance in the power, mobility and digital sectors—in the form of lack of transparency, low accountability and cumbersome regulatory frameworks—deters investors by increasing transaction costs and project risks. These critical institutional constraints furthermore result in a reduced impact of spending on the country’s significant infrastructure gaps. Lack of transparency in management of the natural resource sectors (such as mining) further contributes to low business confidence. 8. While Sierra Leone’s geography, geology and climate endow the country with a wealth of natural resources, these leave the country susceptible to natural disasters and climate changes and add to prevailing fragility risks. With the second most intensive rainfalls in Africa, extreme precipitation and sea-level rise are significant threats for landslides, coastal flooding and erosion, especially given the concentration of population and economic activity in Freetown, as well as deforestation of hills and informal settlement on floodplains. The intensity of rainfall also risks damage to critical service and transport infrastructure, and variability in rainfall patterns brings vulnerabilities as a large share (39.7 percent) of the country’s installed energy capacity comes from hydropower. According to World Bank’s Lifelines report, the costs of disruptions in the power sector for businesses and households amount to 1.1 percent. Sierra Leone ranks 160th on the ND-GAIN vulnerability score4. 9. One of the major binding constraints to growth and poverty reduction in Sierra Leone is lack of reliable and affordable energy (electricity) supply services. During the period of unrest (1991-2001), the country’s physical infrastructure, particularly electricity, water and sanitation, and human capital was severely damaged. Despite strong post-conflict economic recovery, as of 2014, Sierra Leone ranked 181 out of 188 countries in the United Nations Human Development Index (HDI) and had an estimated Gross National Income (GNI) per capita 3 Sierra Leone – Country Partnership Framework for the period FY21-FY26, Report number 148025, May 26, 2020 and Bank reports. 4 https://gain.nd.edu/our-work/country-index/rankings/ Page 7 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) of US$700, placing it in the bottom of countries in Sub-Saharan Africa (SSA). In the following years, the EVD combined with the closure of the two largest iron ore mines resulted in a sharp contraction in economic growth. In early 2016, the Government of Sierra Leone (GoSL) developed an economic recovery plan, but its implementation has been quite challenging as an effective and sustainable resumption of broad-based economic growth needs to be underpinned by adequate infrastructure and human capital. According to the African Development Bank (AfDB), the country’s infrastructure compares poorly to the rest of SSA: it was ranked 46 out of 54 countries on the AfDB’s Infrastructure Development Index (AIDI) in 2016. Inadequate and unreliable power supply constitutes a major barrier to the country’s economic recovery and poverty reduction ambition. A recent World Bank survey of 152 private firms in Sierra Leone shows that they lost on average 11.2 percent of revenue as a result of unreliable electricity services, as compared with the average of 5.3 percent in SSA. B. Sectoral and Institutional Context 10. There is progress on sector reforms albeit at a very slow pace and the corporatization and commercialization of power utilities need to be completed. The National Electricity Act, 2011 (the Electricity Act)5 repealed the National Power Authority (NPA) Act of 1982 and established two state-owned enterprises: (a) the Electricity Generation and Transmission Company (EGTC), and (b) the Electricity Distribution and Supply Authority (EDSA). EGTC is responsible for power generation and transmission at high-voltage levels while EDSA is responsible for the distribution network and Low-Voltage (LV) customer connections and for electricity sales to customers. Some progress has been made since the promulgation of the Electricity Act in 2011 with the two utilities becoming functional on January 1, 2015. Oversight of the sector falls under the Ministry of Energy (MoE) and the Electricity and Water Regulatory Commission (EWRC), which was created in 2014 by the Electricity Act and has the mandate to independently regulate the sector. The mandate of the MoE includes sector policy formulation, sector planning, and coordination. Due to overreliance on funding interventions from GoSL, the MoE is still involved in the day-to-day operations of the two utilities. The corporatization and commercialization of EDSA and EGTC is far from complete. EWRC, five years after commissioning, still has low institutional capacity and little influence on the sector currently. Regulatory issues, including tariff setting, licensing procedures for potential developers, and technical regulation, are currently co-administered by the MoE. As a result, the Electricity Act is far from fully implemented. 11. Sierra Leone has one of the lowest electricity access rates in the world. According to information provided by EDSA, as of end 2019, there were about 178,100 households across the country which are connected to and served by the main grid and isolated grids EDSA owns and operates. It represents about 14 percent of the total 1,248,000 households in the country. As the main grid and the isolated grids only serve Freetown area and some district headquarter towns, almost all these households are considered as urban. There are 55 privately operated renewable energy-based mini-grids across the country, 50 with an installed solar Photovoltaic (PV) capacity ranging from 16 kW to 36 kW each, three systems of 66 - 127 kW and two hydropower mini-grids at 128 kW and 250 kW, respectively. These systems serve villages and communities with households below 100 to 2,000. A total of approximately 10,000 households are served by these mini grids, representing just below 1 percent of the total number of households in Sierra Leone. Most of these mini-grids are developed and installed with grant support from Foreign, Commonwealth and Development Office (FCDO) and the European Union (EU) and are being operated by private operators on commercial ground. Additional diesel-powered mini grids are operated by private companies (three systems) and the local community (one system). In addition, there are a fair number 5 Electricity Act 2011, Supplement to the Sierra Leone Gazette CXLII, No. 62, dated September 22, 2011. Page 8 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) of households which are supplied by stand-alone Solar PV Home System (SHS). There are no statistics from GoSL on the numbers, types and sizes of the SHS. The Sierra Leone Solar Association estimated that about 100,000 households now have solar products at home, mostly Pico systems (over 80 percent) and some small-sized SHS (15 percent). These solar products are sold and installed by private vendors, suppliers and contractors to individual households. 12. The service quality varies significantly among consumers served by the main grid, isolated grids and the mini-grids. Since June 2018, the electricity service of the main grid has improved to an average of 18 hours per day, although supply interruptions are frequent due to planned and unplanned outages of generators, transmission lines and distribution network. The service quality in the isolated grids of EDSA varies by towns, depending on fuel availability and by season where electricity is partly supplied by seasonal hydro plants. It is not uncommon that the electricity supply in some towns could be interrupted for days or even weeks. The mini-grids are supposed to provide electricity for eight hours per day, but this is yet to be verified as most mini-grids only commenced operation in November 2019. 13. Access to electricity for health centers, schools and for productive uses is low. There are a total of about 1,300 health facilities6 in Sierra Leone. As of 2019, only about 25 percent of them are provided with grid electricity or solar PV systems. A small portion of the remaining facilities have diesel generation sets which suffer from poor maintenance and lack of fuel. Even with the ongoing electrification program through grid extension, more than half of the health facilities are unlikely to have grid electricity by 2030. There are a total of 11,165 primary and secondary schools in Sierra Leone according to data collected from the Ministry of Education (MoED) in 2020 and the number increases every year. It is estimated that only about 14 percent of schools (1,587) have access to the grid and that over 77 percent have no access to electricity (8,662). The remaining schools are either powered by generators (449) or solar systems (308). It is important to note that most schools are owned by religious missions (6,221) and only about 3,119 schools are operated by the GoSL and the communities. The remaining are privately owned. 14. The limited generation, transmission and distribution capacity of the main grid are bottlenecks to expanding electricity access and improving service quality. The current installed generation capacity connected to the main grid is about 104 MW, consisting of 50 MW of hydropower (Bumbuna) and 24 MW of heavy fuel oil (HFO) (Kingtom and Blackhall Road) units owned and operated by EGTC as well as a 30-MW biomass (Adax) plant owned by the private sector. In addition, EDSA recently extended the contract for the supply of 60 MW in the dry season and 30 MW in the rainy season from HFO power barges owned by the private sector. However, the available generation capacity, including from the Karpower barge, is about 80 MW in the wet season and only about 70 MW in the dry season because (a) Bumbuna can supply only 10–15 MW in the dry season; (b) Adax is not available due to the lack of biomass as fuel and high cost (more than 20 USc/kWh); and (c) the EGTC’s 24- MW HFO units are not operating as a result of poor maintenance and lack of spare parts. Sierra Leone’s main power network now consists of a 161 kV radial single-circuit transmission line (70 MW capacity in theory and 40 MW in practice) connecting the existing Bumbuna hydropower plant to the distribution network in Freetown. The distribution network in Freetown has a maximum capacity of about 85 MW. It is not yet adequate to deliver all the available generation capacity in the rainy season to customers. Nearly 1,000 km of LV lines/cables are dilapidated and have high technical losses and low reliability. The isolated grids operated by EDSA are mostly supplied by expensive HFO/diesel units which suffer from frequent fuel shortages. Some are partly supplied by 6 WHO Sierra Leone Annual Report 2018. Page 9 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) small hydro plants which are seasonal. The distribution networks in the isolated grids have very limited coverage and are unreliable. 15. The sector’s sustainable development could be achieved through significantly improving EDSA’s technical and financial performance and developing/acquiring low-cost generation. There have been some improvements in EDSA’s technical and financial performance. During the last two years, the total technical and commercial (T&C) losses have been reduced to around 38 percent from about 40 percent in 2016, and the overall collection rate has increased from about 78 percent to about 85 percent. But the aggregate technical, commercial, and collection (ATC&C) losses are still over 40 percent and are much higher than the average losses of 20–25 percent in many SSA countries. At such high losses, the average weighted consumer prices of 18 USc/kWh in 2019, which has declined significantly in US$ terms since November 2016 when the prices were adjusted, will not financially support the operations of any liquid-fuel-fired generation capacity even with the fuel price downturn. The tariff for commercial and industrial consumers is around 18 USc/kWh and there is not much room for further increase due to political considerations and affordability constraints. Currently, the sector’s deficit is financed by the Government’s budget, which is putting a lot of stress on its finances. The continued reliance on the Government’s budget will be challenging as the sector grows. While liquid-fuel power plants are essential to meet the minimum electricity service and may play a limited role in the medium term and long term, especially as the system is adapted to integrating variable energy and during the dry season, its generation cost is very high. 16. The least-cost generation expansion plan indicates that the growing electricity demand could be met by a mix of large hydropower, power import through the Côte d’lvoire-Liberia-Sierra Leone-Guinea (CLSG) interconnection, limited gas-fired plants and solar PV plants over the long term. The peak demand observed in 2020 is 85 MW. In the short term, the only available options are private HFO plants and import through the CLSG line which is expected to be commissioned before June 2021. In the mid-term, a gas-fired plant located in the load center of Freetown, increased import from the West Africa Power Pool (WAPP) and possibly some PV plants could replace the existing HFO plants and meet the increase in demand. The sector financial analysis and projection shows that, if the loss reduction is fully implemented to reduce ATC&C losses to 20 percent, the generation/supply expansion follows the least-cost generation expansion plan and the average consumer tariff is adjusted to and kept at 20 USc/KWh, the sector could become financially viable without government subsidy in 6-7 years. 17. The Government needs to increase electricity access expansion through solar PV-based mini grids and stand-alone solar PV systems. While grid extension is the most economical option to provide electricity service to 60-70 percent of the country’s population, GoSL needs to increase efforts to expand electrification through mini-grid and off-grid solutions in areas and communities which could not be covered by the extension of the main grid in the next decade or so. Over the past five years, the GoSL has taken a number of actions to promote and facilitate the provision of electricity through solar PV-based mini-grids for communities and stand-alone solar systems for businesses and households. In 2016, the GoSL has adopted the Renewable Energy Policy of Sierra Leone, which aims to ensure the provision of electricity to all remote and off-grid areas of the country by utilizing off-grid solar technologies. In 2016 and 2017, it implemented duty and Value Added Tax (VAT) exemptions on imported quality certified (IEC-compliant) solar products. In 2019, GoSL implemented the Mini-Grid Regulation which clearly spells out license issuing, cost-reflective tariff setting, and service quality standards for provision of electricity through the construction and operation of mini grids by the private sector. However, there remain many barriers to the development and scale-up of the mini-grid and stand-alone solar PV market. In Sierra Leone, Page 10 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) a dedicated agency with adequate capacity responsible for planning and coordinating rural electrification through mini-grid and SHS solutions is yet to be established. There is a lack of institutional capacity to collect information and develop a database to record market evolution, summarize good practices and lessons learned. Clear financial incentives to support the solar PV market do not exist. In addition, GoSL is yet to set quality standards for solar products with associated monitoring mechanisms. 18. Weak institutional and staff capacity of key stakeholders is a major constraint to the development of a sustainable sector. Overall, the capacity of the stakeholders is inadequate to carry out sector planning; develop and implement sector strategies and policies; and procure, evaluate, and implement generation projects by the private sector. The NPA’s endemic structural and operational challenges such as lack of adequate technical, operational, Financial Management (FM), and environmental and social (E&S) risk management capacity have been inherited by the two newly established entities, with little change in overall staffing at all levels. Interventions such as the operation and maintenance (O&M) contract with an international firm for the Bumbuna hydropower plant owned by the EGTC and Management Contractor (MC) for EDSA funded under the Energy Sector Utility Reform Project (ESURP; P120304) helped improve the situation to some extent. However, the staff and institutional capacity building needs to be a continuous and long-term effort and process. The MoE Planning Department has a limited number of staff to enable it to perform its role of policy making, planning, and monitoring of the sector. The EWRC now has the required commissioners appointed but it lacks the requisite technical staff and tools to function properly. With support of IDA and other donors, various capacity-building programs for the key stakeholders were implemented, but more needs to be done. 19. The Government has a target to move toward a more sustainable energy mix and a reduction of Greenhouse Gas (GHG) emissions, in line with the Paris Agreement and Nationally Determined Contributions (NDCs), but a detailed implementation plan and path are yet to be developed and defined. Sierra Leone accounts for 0.36 percent of GHG emissions in SSA and 0.03 percent globally every year. The power generation capacity in Sierra Leone is currently dominated by liquid-fuel generation units, which have very high levels of CO2 emissions per unit electricity generated. In the main grid, the total generation capacity of 164 MW (including the private HFO barge) consists of 50 MW of hydropower, 30 MW of biomass and 84 MW of HFO units. Due to the low access and poor quality of grid power, it is estimated that there are more than 160 MW of captive HFO/diesel units owned by the mining sector, industrial and commercial enterprises, public institutions and even households. The total off-grid renewable energy capacity (solar and mini-hydro) is estimated at around 20 MW. The GoSL intends to transition to an energy path which incorporates economics, environment, climate and sustainability. The least-cost generation expansion plan shows, over the long term, the country’s power generation will rely primarily on indigenous and clean resources like hydropower and solar energy, complemented by low-cost power available through the WAPP and supported by limited gas-fired power to respond to variable power generation and load variations. GoSL has committed through the West Africa Regional Energy Trade Development Policy Financing Program (P171225) to provide economic justification and follow least-cost power plans eventually. C. Relevance to Higher Level Objectives 20. The proposed project is consistent with the Medium-term National Development Plan (MTNDP, 2019– 2023). It is a critical priority under the new MTNDP, entitled ‘Education for Development’. The proposed project directly supports three key energy sector objectives of the Government outlined in the MTNDP: (a) electrification of all district headquarters which is a key element of the country’s electrification strategy; (b) increasing rural Page 11 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) electrification through engagement and involvement of key stakeholders including private sector; and (c) improving the financial performance of the sector for sustainable development. 21. The proposed project is also consistent with the WBG’s Country Partnership Framework (CPF) for Sierra Leone for FY2021-2026 (Report number 148025; May 26, 2020), which has three focus areas. The project activities will contribute to “Economic diversification and competitiveness with resilience”, the third focus area of the CPF. They are more specifically aimed at contributing to achieving objective 3.1 “Build resilient infrastructure (power, mobility, technology) for enhanced competitiveness”. The project activities will also contribute to a lesser extent, although still substantially, to objective 3.2 “Boost productivity in key sectors for a diversified economy”. It also indirectly contributes to objective 3.1 “Improve Quality of Education” and objective 3.2 “Deliver Quality and Inclusive Health Services” of the second focal area, through supporting improvement of health facilities and schools through the provision of solar PV electricity. 22. The proposed project is also consistent with the WBG’s COVID-19 Approach Paper and it addresses the deficit of the key infrastructure facilities which is one of the most critical elements for promoting sustainable growth and job creation in a post-COVID-19 recovery. The World Bank’s COVID-19 response in Sierra Leone was guided by the overall strategic approach—as spelled out in the CPF—which is to maintain a balance between short-term to long-term needs, emphasizing: (a) protecting the poor and vulnerable (including food security); (b) supporting businesses; and (c) accelerating recovery and strengthening economic resilience. The WBG- financed COVID response related activities are summarized in Annex 5. The proposed project design is adjusted to echo the World Bank’s response and it directly contributes to Pillar 3: Ensuring Sustainable Business Growth and Job Creation and Pillar 4: Strengthening Policies, Institutions and Investments for Rebuilding Better in the Approach Paper. 23. The proposed project supports the implementation of the Maximizing Finance for Development (MFD) approach laid out in the World Bank’s Development Committee paper by addressing the key infrastructure deficit, lack of electricity, which is critical to attracting private sector investment in the industrial and business sectors. The project directly supports private participation in the operation and expansion of isolated grids and supply of stand-alone PV systems for industrial, commercial, and residential consumers. 24. The proposed project supports the GoSL’s energy transition plan to move toward a more sustainable energy mix and a reduction of GHG emissions. The grid extension component provides imported grid electricity, which is primarily generated by hydropower plants and gas-fired plants, to consumers in towns like Kuido and Port Loko, which are now being supplied by HFO/diesel units in isolated grids; and to new industrial, commercial enterprises and public institutions in other towns currently relying on captive diesel units. The off-grid component will provide solar PV electricity to consumers in Moyamba, health facilities and schools, which either are supplied by small diesel units or have no electricity service. The grid extension and off-grid components are expected to substitute about 28 MW of HFO/Diesel capacity with 24 MW of imported electricity (80 percent gas and 20 percent hydro) and 4 MW of solar PV capacity. The proposed project also contributes to IDA’s commitment to addressing climate change through substituting high emission liquid fuel electricity in two districts headquarter towns and by promoting solar PV projects, contributing to contributes to the objectives of the newly-released Africa Climate Business Plan7 and IDA19’s target to support the development of renewable energy generation. 7 http://documents1.worldbank.org/curated/en/946731593673121971/pdf/The-Next-Generation-Africa-Climate-Business-Plan- Ramping-Up-Development-Centered-Climate-Action-Main-Report.pdf. Page 12 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 25. The proposed project builds on the ongoing IDA program and complements the programs of other development partners. The grid extension component supports the Government’s efforts to double the electricity access rate by extending the activities under ESURP, capitalizing on the electricity which could be imported through the CLSG interconnection and targeting the major towns which are close to the transmission network and have the lowest unit cost of providing electricity service and yield the highest economic and financial return. The off-grid component complements programs of EU, FCDO, United States Trade and Development Agency (USTDA) and non- government organizations (NGOs) which focus on supporting electricity access in rural villages through mini-grids. The off-grid support under the project focuses on large district headquarter towns as well as the public institutions and productive segment which could not be economically served by the main grid. The technical assistance (TA) component will: (a) further improve EDSA’s financial and operational performance through deepening corporatization and commercialization, building on the progress made under ESURP; (b) support further development of human capital with special attention to women and enhancement of institutional capacity of the sector by expanding support to improving technical schools for engineers and technicians; and (c) help demonstrate how the private sector could be competitively procured to operate and expand isolated grids, building on FCDO’s experience in mini-grids for rural villages. 26. The proposed project is implemented in parallel with IDA’s three-year Energy Sector Programmatic Advisory Services and Analytics (PASA; P174792) in Sierra Leone. The PASA is centered around four pillars: (a) energy access expansion; (b) sector financial sustainability; (c) private sector participation; and (d) digital transformation of sector entities. PASA is an amalgamation of tasks, activities and advice directly requested from the GoSL as a result of extensive policy dialogue. The PASA will aim at: (i) providing quick wins and quality analytics to reinforce trust, build consensus both among stakeholders of the country and among development partners; (ii) support the GoSL in laying out and implementing key reforms; and (iii) support implementation of operations in the energy portfolio. 27. The project is also aligned with other interventions of WBG in Sierra Leone including regional energy development policy financing (DPF), national DPF, regional investment projects like CLSG and the existing portfolio of investments. The WBG has been a partner in Sierra Leone’s power sector with a portfolio of projects and continuing support to the Government reform agenda. It has built a close working relationship with all sector stakeholders and has become a trusted partner policy, institutional development, and sector investment. Over the past few years, IDA has supported the following activities: (a) US$16 million under the Energy Access Project (P133424) funded by a FCDO grant through the Sierra Leone Infrastructure Development Fund (SLIDF), which supported the rehabilitation of the distribution network in Freetown to increase distribution capacity and improve supply reliability; (b) the US$40-million IDA-funded ESURP and -reduction investments and measures; (c) an AF of US$59.6 million of IDA credit under the CLSG Regional Interconnector Project (P163033), which would link the transmission network in Sierra Leone with the WAPP network in facilitating power trade; (d) IDA’s assistance to the Government to promote solar PV development by the private sector through both the regional initiative and a TA funded by Public-Private Infrastructure Advisory Facility (PPIAF); and (e) technical support and policy advice on an as-needed basis, including least-cost analysis and option analysis for sector financial viability. 28. The proposed project is aligned with the outcomes of the multi stakeholder energy sector roundtable held in October 2019 and following EDSA turnaround roundtable in November 2019 where the Government and donor groups were in consensus on the sector’s priorities. The project will help address the Government’s priorities on (a) doubling energy access through both grid and off-grid applications; and (b) loss reduction and financial turnaround of EDSA. Page 13 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 29. The project is also designed to capitalize on the availability of the Japan Policy and Human Development (PHRD) grant administrated by IDA. With a limited amount of IDA grants, the largest portion still needs to be focused on provision of electricity for major towns by grid extension. While a small amount of IDA will be used to target key facilities like health clinics and schools in rural areas which could not be provided with grid electricity in the next decade, the expected outcomes and impact will be limited. The overall development objective of the proposed project is well aligned with PHRD’s grant program development objective “increase the delivery of off-grid electricity and other energy services in rural areas of fragile and conflict-affected states in African Countries”. The availability of PHRD co-financing could significantly increase the size of project activities and enhance outcomes and impacts for rural areas in Sierra Leone. The provision of electricity for health facilities and schools becomes ever more important in the wake of the COVID-19 pandemic. II. PROJECT DESCRIPTION A. Project Development Objective PDO Statement 30. The Project Development Objective (PDO) is to increase electricity access in Sierra Leone. PDO-Level Indicators • People provided with new or improved electricity service (number) (Corporate Results Indicator/CRI); People provided with new or improved electricity service – female (number); • Health facilities and schools provided with standalone PV systems (number); • GHG emissions reduced/avoided (tons/year) (Corporate Results Indicator). B. Project Components 31. The project is structured around three main components: (a) provision of grid electricity services in seven district headquarter towns and surrounding communities through distribution network expansion and/or connection with the CLSG line; (b) provision of solar electricity in one district headquarter town and surrounding communities, and a number of large communities, which are not expected to be connected to the main grid in the near future, and provision of electricity to health facilities and schools through stand-alone PV systems with possible extension to mini-grids in selected areas; and (c) TA for human capital development and project implementation support. Component 1: Electrification of towns and communities through grid extension (US$35.0 million IDA equivalent) 32. This component supports activities to provide electricity services to seven major towns and surrounding communities by capitalizing on the availability of grid electricity through the imports over the CLSG interconnection. The component includes: Page 14 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) (a) Carrying out the construction of three (3) segments of connection lines from 225 kV CLSG transmission line to distribution networks in three (3) towns, including: (a) a single circuit 33 kV distribution line of about 35 km, including a 15 MVA 33/11 kV transformer, connecting the distribution network in Kabala with the 225/33 kV Fadugu substation of the CLSG line; (b) a single circuit 66 kV sub-transmission line of about 100 km, including a 66/33/11 kV transformer of 20 MVA, connecting the distribution network in Kailahun with the 225/66 kV Kenema substation of the CLSG line; and (c) a single circuit of 33Kv of about 25km connecting the distribution network in Pujehun along the CLSG line to supply the communities and villages along the CLSG corridor. (b) Expanding the distribution networks in Waterloo, Makeni, Magburaka, and Koidu, and the adjacent communities, including: (a) construction of 11 kV distribution lines and installation of distribution transformers; (b) construction of low voltage distribution lines; (c) construction of service lines and connecting households, commercial, industrial users and public institution like schools and health clinics; and (d) installation of meters. (c) Provision of technical advisory services to the Project Implementing Entity for site supervision and construction management of the distribution network extensions and the connecting lines. 33. The 225 kV single-circuit CLSG line, including the substations, is under the final stage of construction and is scheduled to be completed and commissioned by June 2021. The CLSG line is part of the planned West Africa Power Network to facilitate power exchanges among the countries in West Africa and is partly financed by IDA. It also benefits the towns, villages and communities which are located not far from the line. The GoSL is financing the construction of the distribution networks in the three towns and has selected the contractors through a competitive process and signed the contracts. A 30 percent advance payment has been made against each contract. Construction mobilization already commenced in some towns in early October 2020. 34. The route selection and design of the transmission lines will be completed following a detailed survey. The transmission lines will mostly connect one town to another and pass sparsely populated areas. The selection of transmission routings will aim to avoid any ecologically sensitive or protected areas and the relocation of residential houses and, if possible, sited along existing public roads to minimize E&S impacts. The lines would be mounted mostly on poles (concreate or steel tubular), which have very small footprints (≤ 1m dia.) or on steel- lattice structures (≤ 4m dia.) where land space is not a constraint. All sub-transmission lines would have a 24- band Optical Ground Wire (OPGW) as shield wire not only for use by the utility for their communication and control purposes but also for public use to support the digitization efforts of the Government. The distribution networks will be located mostly in towns and communities. The design of the distribution networks and service connections will be finalized following a site and customer survey. The project activities in each area will be implemented through one or more Engineer, Procure and Construct (EPC) contractors to be competitively procured. 35. There are currently no generation and electricity supply in the towns of Kabala, Kailahun, and Pujehun. The GoSL planned to provide electricity through liquid-fuel generation units if IDA would not finance the connection lines with the 225 kV CLSG line. If these towns would not be connected to the transmission network, the customers would be served by small liquid-fuel generation units, which are costly, polluting and unreliable due to frequent shortages of fuel and spare parts. There is an isolated grid serving a small portion of the customers in Koidu, which is currently supplied by diesel generators. The distribution network expansion in the town of Koidu includes a 33/11 kV transformer and a few hundred-meters of 33 kV lines to link the distribution network with the 33 kV line under construction, which connects with the 225 kV transmission line. Only a very Page 15 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) small portion of the customers in Waterloo is currently served by an 11 kV line linking with the distribution network in Freetown. A double-circuit 33 kV line connecting both with the Freetown network and a substation of the planned Fadugu-Bumbuna 225 kV line, financed by the ongoing ESURP, is under contracting stage. Makani and Magbraka are currently served by a combination of electricity from Bumbuna and backup diesel units and only a portion of the customers are currently served due to lack of generation capacity. There is not generation and electricity supply in the town of Kambia and the town could be connected to the Fadugu-Freetown line. But the town is not included under the project as the Fadugu-Freetown line is expected to be commissioned in nearly three years and financing could be provided in the future. 36. The towns and communties that have been selected for connection to the transmisison network are either already with isolated local grids in operation supplied by small HFO/diesel units or with local distribution networks in early stage of construction. These towns are selected based on the Electricity Network Investment Plan (ENIP) prepared by the National Rural Electric Cooperative Association (NRECA) International Ltd. for the MoE in 2016, taking into consideration the progress made during the last few years. The ENIP identified the ongoing and planned high-voltage transmission lines across the country, including the CLSG line and the 225 Fadugu-Freetown line, the subtransmisison lines and medium-voltage distribution lines, and the distribution networks which would be required to provide grid electricity to the district headquarter towns and communities where population, industrial and commercial activities are concentrated. There are a total of fifteen (15) districts in Sierra Leone. In addition to the towns discussed above, Freetown is mostly electrified, two towns (Kenema, Bo) are being connected and rehabilitated through an AfDB/FCDO funded project, two towns (Koidu, Port Loko) are being supplied by isolated grids through primarily expensive liquid fuel generation, and two towns (Bonthe and Moyamba) currently have no electricity service of any form but could not be connected to the transmission grid in the coming years. Other major towns like Lungi are not included because there are insufficient funds to finance the relatively long connecting line. 37. Although Waterloo, Makeni, and Magburaka are currently connected to the main grid, and Koidu, Port Loko are served by isolated grids, only a portion of the customers in these towns and surrounding communities are connected to the distribution networks with access to electricity. This is primarily due to the lack of generation capacity in the main grid and the isolated grids. As the CLSG line is connected to the main grid, more generation and supply capacity will become available in the main grid. Koidu will have access to reliable electricity from the CLSG line as it is connected to the transmission network. Port Loko will have access to reliable electricity when it is connected to the Fagudu-Bumbuna line, which is still in the design stage. Therefore, only Koidu is selected for expansion to provide electricity to additional customers under the project and Port Loko will be connected in the future. 38. A detailed damage assessment indicated that multiple low-lying areas had power outages due to 2017 landslides and floods in western areas of Sierra Leone8. Although physical damages to the EDSA’s infrastructure did not amount to a large value, implementation of this component will derive lessons from the damage assessment to mitigate impacts in future. Detailed hazard and risk assessments have been conducted in Freetown, Makeni, and Bo with the support from the Global Facility for Disaster Reduction and Recovery (GFDRR)9. In addition, the local engineering studies that will be undertaken for the construction of grid infrastructure will include an assessment of potential impacts from landslides and floods and suggest measures to mitigate such impacts. Integration of climate risks in local engineering/feasibility studies will follow the World 8 https://openknowledge.worldbank.org/handle/10986/28836?locale-attribute=es 9 https://www.worldbank.org/en/topic/disasterriskmanagement/brief/sierra-leone-multi-city-hazard-review-and-risk-assessment Page 16 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Bank’s Good Practice Note for Energy Sector Adaptation10. Potential measures, as identified from good international practices, might include elevating or building a protective wall around assets vulnerable to floods, or selecting a high- elevation site for new power-plant construction. Component 2: Electrification through mini-grids and stand-alone solar systems (US$12.7 million equivalent, of which US$10.0 million IDA and US$2.7 million PHRD) 39. Due to the very low access rate in the country, the GoSL will focus on electrification of major towns and communities close to the transmission lines in the short to medium term through grid extension. A large portion of small towns and rural communities of the country are not likely to be connected to the main grid for at least ten years. This provides a significant market for off-grid solutions. The mini-grid option provides a cost- effective solution for small towns, large communities and settlements. The stand-alone PV system provides a very flexible and cost-effective solution for many homes, schools, clinics and productive businesses. There are private sector players which are interested in and active in the areas of homes and productive businesses. The component will directly support the provision of solar electricity to health facilities and schools as electricity provision for these public instituions would need to be done through public funding. The component includes three subcomponents, all meant to deliver solar energy, and will be co-financed by IDA and Japan PHRD grant: 40. Subcomponent 2 (a). Installation of PV mini-grids with battery storage capacity (US$6.0 million IDA). This subcomponent supports the construction of solar PV plant with battery storage capacity in the town of Moyamba and selected communities, including installation of solar PV capacity and battery storage in Moyamba, and solar PV capacity, battery storage and distribution networks in selected large communities, including conducting a minigrid feasibility study for selection of communities, and minigrid sites. 41. Based on population size and industrial/commercial profiles in Moyamba, a detailed technical and financial analysis was carried out to determine the sizes of the solar PV capacity and battery-storage capacity. It is tentatively considered that a solar PV system with a capacity of 600 kW plus 1,800 kWh of battery storage will be implemented initially. The numbers and the precise siting of mini-grids with solar PV plants and storage facilities will be determined based on a more detailed site survey and design. It is expected that siting of the PV system and battery storage will not require house demolition and land acquisition. A total of 2 MW of solar PV capacity is expected to be installed under the subcomponent. Similarly to Component 1, geophysical and climate risks will be included as part of the implementation of this component. 42. Moyamba is selected as it is one of the two district headquarter towns which could not be economically connected to either the CLSG line nor the planned Fadugu-Freetown line. The other town, Bonthe, is smaller and is being electrified through support of a FCDO grant. The GoSL is financing the construction of the distribution network in Moyamba and has selected the contractor through a competitive process and signed the contract with 30 percent advance payment made in September 2020. The GoSL initially planned to provide electricity through liquid-fuel generation units. If these towns are not connected to a solar mini grid, the customers would be served by small liquid fuel generation units, which are costly, polluting and unreliable due to frequent shortage of fuel and spare parts. 10https://worldbankgroup.sharepoint.com/sites/energy/Documents/Energy%20Resilience%20Good%20Practice%20Note/Energy%20Re silience%20Good%20Practice%20Note_Feb2020.pdf Page 17 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 43. The subcomponent will include the installation of solar PV capacity and battery storage as well as the distribution networks in several large communities. The selection of the communities will be based on the mini grid feasibility study which is being carried out by USTDA and expected to be completed by April 2021. In addition to the usual factors which are considered in the selection of the mini-grid sites, high emphasis will be put on the avaialbility of big industrial/commercial entities to anchor electricity demand and provide constant revenue. Based on the initial analysis and also the experience of the FCDO projects, it is expected that eight to twelve mini grids would be financed under the subcomponent. 44. Based on the financial analysis of the mini grids and affordability analysis of the consumers, it is concluded that all capital costs of the mini grids will need to be financed by grants to ensure sustainability of investments. Therefore, installation of the solar PV systems with storage capacity as well as the networks will be implemented through EPC contractors to be competitively selected and financed by the project. Then private developers would be engaged to operate the mini grids and also be responsible for adding new generation and extending new connections to meet the future needs in these areas. 45. Subcomponent 2 (b). Installation of solar PV systems for selected health facilities and schools (US$3.5 million IDA, US$2.2 million PHRD). This subcomponent support the installation of solar PVsystems for selected health facilities and schools, including: (a) conducting an analysis to select the health facilities, and to review the type and quality of equipment required at said health facilities, and installation of solar PV systems with battery storage; and (b) developing a sustainability strategy. 46. There were a total of about 1,300 health facilities and 11,165 primary and secondary schools in Sierra Leone. However, over 72 percent of health facilities and over 77 percent of schools had no access to grid electricity. Despite the ongoing electrification program through grid extension, more than half of the health and education facilities are unlikely to have grid electricity by 2030. The activities under this subcomponent will aim at installing solar PV systems for about 200 health facilities and about 500 primary and/or secondary schools and special schools which are not going to be electrified through grid extension or mini-grid in the next ten years. An analysis has been carried out to review the types of equpments at different types of health facilities which require electricity servcies of different quality. Depending on the size of the health and education facilities, the solar PV sizes are expected to range from 1 kW to 20 kW with a total capacity of around 2 MW. The systems will not only provide electricity to electrical equipment at the public facilities, but will also power water pumps if a nearby operational borehole is available. The selection of the health facilities will be based on a number of factors, including the potential to exend electricity service to nearby villages and communities through the development of mini-grids in the future and possibly the presence of maternity wards. Libraries of about 50 selected schools will be provided with solar lanterns. The PHRD grant and IDA funds will finance the installation of solar PV systems for a number of health facilities and schools, respectively. 47. This subcomponent will also support the development of a sustainability strategy that will not only include the quality assurance frameworks for the solar component base systems to be installed in these facilities but will also cover the design and installations aspects of the systems, the operation and maintenance and the budget provision for the replacement of the components of the systems at the end of their life time. 48. In addition to landslides and floods, mini-grids and stand-alone solar systems can be impacted by increase in temperature and extreme heat. Temperature increase could not only have the potential to increase Page 18 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) energy demand, but also to reduce the efficiency of solar PV panels, which will be taken into account in the design of the technical specifications and energy production projections during the design stage. Subcomponent 2 (c). Provision of TA for market assessment, capacity building, result monitoring and evaluation (M&E) (US$0.5 million IDA, US$0.5 million PHRD). This subcomponent support the provision of technical advisory services for, inter alia: (a) the carrying out a market assessment and affordability analyses of productive uses in rural areas; (b) raising awareness; (c) building the capacity of rural and urban business communitites, and the private sector in business management specifically focusing on women-led businesses; (d) monitoring and evaluating results on the basis of set targets; and (e) recording experiences and lessons learned. Component 3: Human capital development and project implementation support (US$5 million IDA equivalent) 49. Subcomponent 3 (a) (US$3.5 million IDA). This subcomponent will support MoE with: (a) procurement of services of a private firm for the operation, maintenance and future expansion of the mini-grid under Component 2; (b) preparation of a clean cooking investment project; (c) the institutional capacity for promotion, management and development of renewable energy and implementation of the national electrification strategy; (d) policy and institutional capacity to reduce gender disparity in energy sector employment; and (e) provision of operating costs. 50. Subcomponent 3 (b) (US$1.5 million IDA). The component will: (a) improve the capacity of the Project Implementing Entity’s management and staff, and strengthen the governance and management of the Project Implementing Entity to achieve full autonomy and commercialization; (b) improve the network’s resilience to climate disasters, including improving operations and maintenance procedures and enhancing staff capacity; and (c) improve the capacity for management and implementation of environmental and social requirements. 51. A detailed description of each component and subcomponent is provided in Annex 2. C. Project Beneficiaries 52. The beneficiaries of the project will include the following: (a) Households. About 258,000 people (43,000 households) will be provided with reliable grid electricity. In addition, an estimated 18,000 people (3,000 households) will be provided with solar electricity. Access to electricity contributes to an improvement in the quality of life by enabling newly connected consumers to undertake productive and income-generating activities (less time spent on fetching traditional sources of energy and clean water) and enhanced access to information/communication (through phone, radio, and television). Empirical evidence also points to health benefits owing to the reduction of indoor air pollution due to reduced kerosene consumption. (b) Health facilities, schools, and water pumping stations. About 200 health facilities and 500 schools will be provided with new or improved electricity services. Improvements in the quality of public service delivery are expected through increased electricity connections, especially of public facilities such as schools, clinics, hospitals (for example, for cold chain, vaccine and medicine refrigeration, lighting, and sterilization); and water pumping stations (for example, for safe drinking water) used by poor and vulnerable households. Page 19 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) (c) Enterprises. About 9,100 industrial and commercial entities will be provided with grid or mini-grid electricity services. Improved access to electricity supply will contribute to increased productivity and income of enterprises (particularly for micro, small and medium enterprises (MSMEs)) and will assist them in reducing their dependency on expensive diesel generation that has a substantially higher per unit cost. In addition, increased access to electricity can boost productivity and reduce sales and equipment losses. (d) Electricity sector institutions. The sector institutions, especially MoE and EDSA, are expected to benefit from the strengthening of planning and implementation capacity, which could translate into improved institutional performance as well as cost-effectiveness, efficiency, transparency, and accountability of the sector. (e) Off-Grid Solar (OGS) companies. The solar companies will benefit through increased access to financing for business development support and working capital allowing them to expand their businesses by building inventory, widening distribution channels, increasing training for distribution agents, improving after-sales services through increasing technicians and introduction of trouble- shooting technologies, extending their product line, and introducing innovations. (f) Women. Providing female-headed rural households, social infrastructure, and women-led enterprises with electricity has the potential to promote gender equality, create employment and business opportunities for women, and improve development outcomes in education and health. D. Results Chain Activities Outputs Outcomes PDO Providing financing for electrification of towns and Supply and installation of on-grid Households connected to the Component 1 communities through grid infrastructure procured new on-grid system extension Supply and installation O&M of mini-grid infrastructure for remote communities procured Households, Health Centers, Providing financing for Supply and installation of solar PV Schools and small business Component 2 electrification through mini-grid system for health facilities provided with the new mini-grid and standalone home system and off-grid electricity service Supply and installation of solar PV system and solar lanterns for schools Increase electricity access Improved EDSA management and staff capacity Private O&M of mini-grid infrastructure procured Providing financing for human Preparation of clean cooking Sustainable management of Component 3 capital development and project investment project public electrification investment implementation support Strengthening institutional capacity of key stakeholder Supporting EDSA to improve network resilience E. Rationale for World Bank Involvement and Role of Partners 53. The World Bank has been a major strategic partner in Sierra Leone’s electricity sector development. The World Bank has supported Sierra Leone’s power sector reforms, including the restructuring of the NPA, Page 20 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) implementation of the operational performance of EDSA through policy measures to improve financial viability of the sector, and extension of the distribution network in Freetown. The World Bank, with its ability to design a customized electrification program drawing from decades of global experience, and its ability to harness recent technological advancements to provide reliable, affordable, and sustainable energy services to consumers, is well placed to assist the GoSL in designing and implementing electrification through both grid extension and mini-grid solutions. With this experience in hand, there is an unparalleled opportunity for the World Bank to help Sierra Leone reach a large part of the country with the benefit of modern energy services. 54. The World Bank’s involvement can: (a) help ensure that electrification program design and corresponding policy reform reflect principles of sustainability; (b) support best-practice analysis, such as least-cost geospatial electrification planning and least-cost analysis for optimal generation mix for mini grids; (c) help establish an enabling environment for private sector participation in off-grid operation and expansion; (d) facilitate integrated approach to EDSA turn-around including enhanced distribution infrastructure, metering and commercialization as well as quality of management; and (e) support human capital development in a sector which is still much constrained by the lack of qualified people in almost all fields. Furthermore, the World Bank together with the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) is supporting the GoSL to address the market failures and upstream challenges for private sector financing. Moving forward, WBG would help leverage commercial and private financing for commercially structured transformational projects such as renewable energy and gas-fired generation. 55. Role of development partners. The presence of development partners in the electricity sector is rather limited. During the past seven years, the most important project supported by the donor community for on-grid electrification is the Sierra Leone segment of the CLSG transmission line together with electrification of some communities along the transmission corridor, which is jointly financed by the EU, AfDB and IDA. The project is expected to be completed and commissioned before June 2021. In addition, AfDB and FCDO provided financing for the rehabilitation and expansion of the distribution networks in the two largest districts headquarter towns of Bo and Kenema and their connection to the CLSG line. The project is scheduled to be completed by end-2022. Japan International Cooperation Agency (JICA), IDA and ECOWAS each provided several million dollars for distribution network rehabilitation and expansion in Freetown which are all completed. Currently no specific donor commitment has been secured for further on-grid electrification. In the off-grid space, the largest support so far has been provided by FCDO with a US$47-million grant for installation of mini-grids for rural communities. A total of 90 mini-grids are expected to be constructed and operational by end of 2021. EU also provided US$7.5 million for the development of three mini grids for communities, installation of solar PV systems for a dozen health facilities, schools and agricultural business centers. The project is fully completed and operational. On the TA aspect, the largest piece is the United States Millennium Challenge Corporation (MCC)’s US$22-million program which has supported sector reform, policy development, regulatory change and capacity building. USTDA has provided a grant of US$1.5 million to support a feasibility study for 44 mini-grids with all including health facilities. The Government of Japan is planning to finance the development of six mini grids. Component 2 of the proposed project will finance the installation of 8-12 mini-grids, which are proposed by the USTDA feasibility study and will help build up the capacity to promote solar PV system deployment. Additional support by other development partners can be provided to further expand interventions in the future. Coordination and alignment of efforts by other development partners will continue to be ensured through the donor energy sector coordination group. Page 21 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) F. Lessons Learned and Reflected in the Project Design 56. Recent experience demonstrates the potential impact of consistent World Bank support, for example, in Indonesia, Kenya, and Rwanda. The broad experience worldwide with best-practice access scale-up programs amply confirms that no nation has achieved substantial scale-up in electricity access without significant and sustained public support, especially since recovery of the capital costs associated with the access program (network rollout – medium voltage (MV), LV, service drops, and final connections) through retail tariff and front- end connection charges makes access unaffordable to most potential beneficiaries who are poor. The electrification process is a multi-year effort which should follow a well-articulated national electrification strategy with a consistent approach. On the off-grid side, the project has been informed by experiences in countries across the globe, including Bangladesh, Ethiopia, Kenya etc. In recent years, the World Bank has been increasing support to the electrification of public institutions like health facilities and schools, particularly in the wake of the COVID- 19 crisis. The World Bank has also, taken the experiences and lessons of other development partners like EU and FCDO to support mini-grid, health facilities and schools. Specific lessons from World Bank financed projects worldwide and donors’ projects in Sierra Leone include the following: (a) To mitigate risks of implementation delays, preparatory works are front-loaded. Delays in the selection of consultants and procurement of goods and services have adversely affected project implementation of the previous and ongoing IDA funded projects. To expedite implementation readiness for the proposed project, some of the key preparatory activities such as preparation of the bid documents for some packages have already been launched, and the preparation of safeguards instruments as required during implementation is initiated. These activities will be financed under the ongoing World Bank-funded ESURP. In addition, the proposed project capitalizes on the technical studies completed under previous projects as well as those by development partners, including technical study for the connecting lines and feasibility studies for solar systems for health facilities and productive businesses. These activities will enable improved disbursement performance from the early stages of the project since activity implementation will commence soon after the Board approval and after satisfying effectiveness conditions. (b) Strengthening project supervision, particularly the implementation of safeguards instruments. The lack of adequate capacity in both MoE and EDSA has affected the implementation of previous and ongoing IDA funded projects, particularly the timely and satisfactory implementation of safeguards instruments. To strengthen project supervision and monitoring, further capacity building and training will be conducted for MoE, EDSA, and contractors with focus on implementation and monitoring of safeguards instruments. In addition, an engineering firm will be employed to assist in contract management and site supervision, including monitoring the implementation of safeguards instruments to ensure full compliance. (c) Quality control of PV products. It is crucial to establish quality assurance of product performance at the beginning of a project to establish credibility and consumer confidence. The need for quality assurance for solar PV products was demonstrated in many WBG supported projects. Stringent quality standards will be set, including a five-year warranty for batteries, and strongly enforced. The experiences and lessons from Lighting Africa in establishing and certifying products will be fully taken into consideration. At the same time, in the fast-evolving technology environment, it is important that the quality standards adapt to reflect the latest available technologies so that they do not become a barrier to introducing more efficient technologies. These standards will be included in the procurement documents for solar systems to be publicly procured. (d) Balancing public and private sector role. The health facilities and mini-grids financed by FCDO are considered the most successful off-grid electricity access expansion project in Sierra Leone. The project used grant to finance the construction of solar PV systems and the distribution network. Services of private firms Page 22 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) were then procured to operate the grid and the solar PV facilities. This approach significantly reduced the tariff level to make electricity affordable by the consumers. The solar component of the proposed project will largely follow this approach and capitalize on the experiences and expertise from implementing the FCDO project. (e) Sustainability of mini-grids. One of the key challenges in the past mini-grid operations has been their sustainability, especially in community-based mini-grids, which often resulted in tariffs that were insufficient to cover the costs of O&M or not affordable. The private sector-driven mini-grids on the other hand tended to result in high user tariffs, which limited the household electricity usage and impact, and often led to community and political discontent, due to the large difference between the main grid and mini-grid tariffs. Most governments and donors are therefore exploring public-private partnerships which rely on public resources to reduce the mini-grid costs and thereby reduce user tariff. Therefore, the proposed project fully funds the investment costs of solar PV systems and storage and the Government funds the installation of the distribution network. Private firms will be competitively procured to be responsible for system operation and expansion. III. IMPLEMENTATION ARRANGEMENTS A. Institutional and Implementation Arrangements 57. MoE for Component 2 and Subcomponent 3 (a). The MoE currently has a Project Management Unit (PMU) led by the planning department. The PMU has a communication specialist, a financial management specialist (FMS), planning engineers and M&E officers. However, the PMU is currently staffed to primarily manage the TA component of ESURP. As this project has a big component to support mini-grid and standalone solar PV system deployment, the PMU will be restructured and its capacity enhanced. A project coordinator with experience in mini-grids and solar PV will be appointed to lead and coordinate the implementation of the Component 2 and Subcomponent 3 (a). The PMU will be staffed with people with experience and expertise in solar PV technology and procurement. MoE has been closely involved in the implementation of the solar PV mini- grid projects, including solar PV system for a large number of health facilities and a number of schools supported by EU and FCDO. MoE has staff and experts dealing with preparation of mini-grid projects, and the preparation and implementation of standalone PV systems for public institutions. Some of the staff could be assigned to the PMU and some could provide technical support as needed. Additional international and local experts will be employed as consultants to assist in the preparation of technical specifications for the bid documents and in bid evaluation as needed. MoE will work closely with the Ministry of Health (MoH) and the MoED in the selection of health facilities and schools as well as in the construction and operation of the solar systems for the health facilities and schools. 58. EDSA for Component 1 and Subcomponent 3 (b). EDSA currently has a Project Management Team (PMT) that is implementing the investment component of ESURP. The PMT comprises mainly of staff of the Engineering Department (Planning and Projects), Environmental and Social Management Unit (ESMU) and dedicated staff of EDSA’s Finance Department and the Procurement Unit. The team is supported by experienced consultants that are assisting in project implementation and in building the capacity of the regular EDSA staff. The consultants include a supervision engineer, an environmental specialist, social and gender specialist (under procurement), a senior procurement specialist, and an FMS supported by finance assistance, civil engineer, substation engineer and specialized consultants to be hired as needed. Young professionals (engineers, accountants, and social and environmental officers) are being recruited to augment the staff capacity of the EDSA employees. The PMT is Page 23 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) headed by the Director of Engineering (Technical Services) but the day-to-day coordination of the overall implementation is handled by an experienced project coordinator. The PMT will be responsible for the preparation and implementation of Component 1 of the proposed project to capitalize on the available capacity in terms of procurement, FM and safeguards. But the PMT would need to be expanded and additional consultant support would need to be engaged to meet the increased activities and geographical areas to be covered. In view of the lessons and experiences from ESURP, an engineering firm is expected to assist EDSA in contract management and site supervision. Additional experienced procurement specialists will be employed as needed. Results Monitoring and Evaluation Arrangements 59. While MoE will have the overall responsibility for project coordination, monitoring and reporting on results achieved, EDSA will report progress and achievements under the Component 1 of the project. EDSA already monitors its key performance indicators. EDSA prepares quarterly and monthly reports for its Board and MoE. The utility also has a grievance-handling mechanism in place and carries out routine customer satisfaction surveys. MoE will be responsible for monitoring the implementation progress and results for Component 2. Capacity to monitor results will be key to ensure the success and effectiveness of this component. The proposed operation will support the further strengthening of the MoE’s existing M&E system, which is needed to track and monitor progress against the targets. In addition, MoE through funding under the TA component shall develop the framework, data system and capacity to collect country wide information on the market development of the solar PV industry in Sierra Leone. B. Sustainability 60. Sustainability of Component 1 depends on the following factors: (a) the availability of sufficient generation and supply capacity; (b) the financial health of the utility; and (c) affordability of connections by consumers to be connected under the project. The CLSG interconnection which is expected to be commissioned before June 2021 and has a transmitting capacity of about 200 MW currently. Several countries in West Africa are having surplus generation capacity and more large hydropower and gas projects are expected to come online soon. It is expected that there would be adequate capacity and energy available at reasonable cost for import by Sierra Leone to meet its growing demand in the near and mid-term. The connection of these towns to replace costly liquid fuel electricity with less costly imported electricity is expected to contribute to improve EDSA’s financial position. The continued improvement of EDSA’s operational performance, particularly loss reduction, through the existing IDA supported ESURP and the proposed project will help EDSA reduce its deficit and contribute to its financial health. The wiliness-to-pay analysis carried out in Sierra Leone indicates that the existing tariff level for the different categories of customers are quite affordable. Therefore, the sustainability of investment under this component is likely. 61. Sustainability of Component 2 rests on the following: (a) the affordability of the consumers for the mini- grid electricity and sustainable operation and expansion of the mini-grids; and (b) the sustainable operation of the solar PV systems for health facilities and schools. Although the tariff level for mini-grid electricity could be determined based on the cost of supply, the affordability of the consumers has also to be fully accounted for. The experience shows that the full supply costs of solar PV power mini-grid are beyond the affordability of most consumers in Sierra Leone. Under the project, the design will help ensure that the price of the electricity is affordable for the consumers but also adequate to cover the cost of the private firm for sustainable operation and expansion. The sustainable operations of solar PV systems for health facilities and schools has proved to be Page 24 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) challenging in both Sierra Leone and other sub-Africa countries. The GoSL fully recognizes the need to have stable budget to cover the operation and maintenance costs, particularly the replacement of batteries, of solar PV systems for health facilities and schools, and in principle agreed to provide adequate funding. IV. PROJECT APPRAISAL SUMMARY A. Technical, Economic and Financial Analysis Technical analysis 62. Component 1 will support the expansion of distribution networks and connection of households, industrial and commercial enterprises, and public institutions to the network in a number of towns and support the construction of connecting lines to link the distribution networks in several towns with the 225 kV transmission lines. These activities involve the procurement of works and equipment for MV and LV systems and do not represent any unusual technical or operational challenges which are new to Sierra Leone. The equipment used represents proven technology and is known in the country. The selection of the routing for each connecting line takes both environmental, social, economic, and technical factors into consideration. This includes avoiding environmentally sensitive areas and potential to serve more communities and villages. The selection of voltage level, transformer capacity and conductor sizes for each connecting line is based on the current demand and expected growth in the coming years, the length of the line, costs and potential voltage drop etc. Project costs are based on estimates for connections and line extensions used in the network planning and on recently procured contracts for similar activities. The construction of lines, substations and distribution networks will be implemented through EPC contractors, which will be procured competitively. These contractors will have to meet certain qualifications and have environmental management plans to ensure compliance with the World Bank Environmental and Social Framework (ESF) and gender-based violence (GBV) guidelines. Packaging of the different activities under the component takes into consideration both the geographical locations of the towns and the size of each contract to ensure interests from capable contractors. The major challenge that could present a bottleneck for the implementation of the component relates to the limited interests by internationally well-known contractors in the Sierra Leone construction market, which will be exacerbated by the COVID-19 pandemic if it lasts for a prolonged period of time. 63. The expansion program in Waterloo and surrounding communities, Makeni, Magburaka, and Koidu is expected to provide new electricity access to about 38,300 residential customers and 8,300 industrial, commercial and public institutions. In addition to these newly added customers, the connecting lines for Kabala, Kailahun and Pujehun are expected to benefit about 4,700 residential customers and 950 industrial, commercial customers and public institutions initially through the provision of more reliable grid electricity. The maximum demand from the newly connected and existing customers is expected to be about 22 MW, which is all expected to come from import through the CLSG line soon, far less than CLSG’s transmitting capacity of about 200 MW. 64. During project implementation, measures will be taken to reduce technical, commercial and collection losses. These measures include distribution transformers will be properly spaced and sized to avoid long low voltage lines; all equipment and conductors will meet certain efficient standards; all customers will be provided with pre-paid meters; and all illegal connections in existing towns will be removed. These measures, together with the strengthening of the EDSA’s management and the implementation of other loss reduction measures, Page 25 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) could help achieve ATC&C losses to be lower than 20 percent, which could contribute to about 2 percent overall reduction of EDSA’s ATC&C losses. 65. Component 2 will support the provision of standalone solar PV systems for public institutions like health facilities and schools, as well as the installation of solar PV system with storage capacity to serve the mini-grids in Moyamba and several other large communities. This does not present a major technical challenge as both solar PV based mini-grids and standalone solar PV systems have been adopted. The selection of solar PV and storage capacity is based on well-established approach and methodologies. However, past and existing projects are primarily implemented directly by donors through international consultants. In addition to helping MoE for technical capacity enhancement, experienced consultants need to be employed to assist in implementation of the component. The size of solar PV and storage capacity for each mini-grid and institution needs will be carefully assessed to ensure adequacy but to avoid over dimensioning. In-country technical capacity for providing after- sales services will be mobilized. To ensure quality of service delivery and after-sales service, the MoE will specify the certification requirements for technologies financed under this component as well as the defined minimum warranty and after-sales service requirements. Economic and financial analysis 66. Rationale for public financing. The rationale for public sector financing for investments in the project is based on the major factor that the access rates in Sierra Leone are very low at about 20 percent and electrification initiatives using commercial financing are not considered viable. Experience worldwide amply confirms that scale-up in electricity access cannot be achieved without substantial and sustained public support; because recovery of the capital costs associated with the access program (network rollout - MV, LV, service drops, and final connections) through retail tariff and front-end connection charges make access unaffordable to most potential beneficiaries. Public funding is also warranted for health facilities and schools as they are public goods and do not generate revenue to cover debt. The MoE supports a complementary pathway to universal electrification using both public and private resources. Public resources in the form of IDA grants will be strategically deployed to present de-risked opportunities to the private sector to participate as operators and contractors. 67. World Bank’s added value. World Bank financing would add comparative value given the World Bank’s position to draw upon global experience and expertise areas directly related to the investments and TA in accelerating electricity access. The WBG has supported on-grid and off-grid electrification initiatives in other SSA countries. Lessons and technical expertise from these existing operations can be used for the benefit of the project. Through geospatial electrification planning, the country has already benefited from having a proper design of the electrification program guided by analytics for on-grid and off-grid electrification. 68. Economic Analysis. The economic analysis of the project, assessing its impact on the welfare of Sierra Leone society as a whole, has found that the project will generate substantial benefits to Sierra Leone people and businesses. In particular, economic, social and environmental benefits will derive from: (a) expanded access to electricity in selected towns and communities; (b) increased capacity of the distribution network and reduction of system losses; and (c) displacement of expensive diesel-based generation. 69. The economic viability of the project has been assessed through a standard cost-benefit analysis. The economic analysis has been restricted to the project components that generate benefits for which an economic value can be clearly identified and measured. These notably include benefits associated with the investments Page 26 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) under Component 1 and Components 2. Component 3 has been excluded from the analysis due to the difficulty in valuing the economic benefits of TA and implementation support. 70. The Economic Internal Rate of Return (EIRR) was found to be 52.8 percent, with a Net Present Value (NPV) of US$266 million. The environmental benefits count for incremental returns to the EIRR of 1 percentage points and US$16 million to the NPV. The table below summarizes the results of the analysis: Table 1: Summary of Economic Analysis Unit Result Economic Internal Rate of Return EIRR % 51.7 EIRR including environmental benefits % 52.8 Composition of NPV Total costs US$ million 357 Total benefits US$ million 607 NPV (before environmental benefits) US$ million 250 Environmental benefits US$ million 16 NPV (including environmental benefits) US$ million 266 71. Financial analysis. The financial analysis confirmed that the project is financially viable, with Financial Internal Rate of Return (FIRR) of 10.9 percent and NPV of US$13 million at a discount rate of 3.5 percent. The analysis has focused on grid investments and assessed the impact of Component 1 on the viability of the distribution utility, EDSA. The financial benefits of the project are: (a) the incremental electricity sale through network extension; and (b) reduced generation costs through rehabilitation of the distribution network. The incremental revenues from additional power sales in the project areas were valued at the current average consumer tariff of 18 USc/kWh. The analysis also captures decrease in system losses by 4 percent. Additional details on the financial performances of the electricity sector can be found in the annexes. 72. GHG emission reduction and accounting. Environmental externalities constitute another economic benefit of the proposed project, given that access to grid and off-grid electricity enabled under the project will displace self-generation that use GHG-intensive fuel such as diesel. Table 4.2 of Annex 4 summarizes the assumptions of replacing diesel self-generators with the additional electricity. Using the World Bank’s GHG guidance on energy access operations and the total generation required for new or improved connection, the project will therefore avoid 302,701 tons of CO2 (273,933 tons of CO2 for Component 1 and 28,767 tons of CO2 for Component 2) over the project economic life. Consistent with World Bank guidance on the social value of carbon, carbon emission reductions are valued in the low case at US$40 per ton of CO2 in 2020, in real terms, increasing to US$50 per ton by 2030. Carbon emissions are valued at “high” and “low” levels, both of them increasing at a rate of 2.25 percent per year. B. Fiduciary Financial Management 73. An FM assessment was conducted in accordance with the World Bank Investment Project Financing (IPF) Policy (on FM arrangement), and the FM Manual for World Bank IPF operations issued by the World Bank’s Operations Policy and Country Services (OPCS) on February 10, 2017. The assessment concluded that the FM arrangements of the Finance Unit of the PMU of the MoE and the Finance Unit of the project implementation Page 27 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) unit (PIU) of EDSA meet the World Bank’s minimum requirements for the administration of projects funds under World Bank Policy and Procedure of IPF. The Finance Unit of the PMU of the MoE and the Finance Unit of the PIU of EDSA will each open a segregated US$ denominated DA at a commercial bank approved by the World Bank. 74. The project will use report-based disbursements through the submission of quarterly Interim Financial Report (IFRs) on the sources and uses of project funds. A forecast of the first six months’ expenditures will form the basis for the initial withdrawal of funds from the grant, and subsequent withdrawals will be based on the net cash requirements. The project will follow a cash basis of accounting and financial reporting and will submit, within 45 days of each GoSL fiscal quarter, quarterly IFRs of the project activities. The Finance Unit of the PIU of EDSA will prepare financial reports in respect of the activities of the EDSA and will, not later than 30 days after the end of the quarter, forward same to the Finance Unit of the PMU. The Finance Unit of the PMU of the MoE for consolidation of the reports and submission to the World Bank. 75. At a minimum, the constituents of the IFRs will be: (a) a statement of sources and uses of funds for the reported quarter and cumulative period from project inception, reconciled to opening and closing bank balances; (b) a statement of uses of funds (expenditures) by project activity/component and by expenditure categories, comparing actual expenditures against budget, with explanations for significant variances for both the quarter and cumulative period; and (c) Designated Account Reconciliation Statement. 76. The annual audited financial statements of the project shall be submitted to IDA within six months of the end of the GoSL’s fiscal year (i.e., by June 30 each year). The external auditors will conduct the audits on the project financial statements on terms of reference (ToR)as agreed with the World Bank. The Finance Unit of the PMU of MoE will be responsible for compiling the annual financial statements subject to audit based on submission by the Finance Unit of the PIU of EDSA in respect of the project activities EDSA undertakes. 77. Based on the assessment conducted, the overall FM risks were rated as ‘High’ before mitigation. If the planned risk mitigation measures are properly implemented, the residual FM risk is anticipated to be rated as ‘Substantial.’ A detailed description of the FM assessment is included in Annex 1. Procurement 78. Applicable procurement regulations. Procurement shall be carried out in accordance with the requirements in the World Bank Procurement Regulations for IPF Borrowers: Goods, Works, Non-Consulting Services and Consulting Services dated July 1, 2016 (Revised November 2017 and August 2018); Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants (revised July 1, 2016); and the provisions stipulated in the Financing Agreement. 79. Project Procurement Strategy for Development (PPSD) and Procurement Plan (PP). According to the requirement of the Procurement Regulations, the Recipient has developed a PPSD, based on which a PP has been prepared including contracts that will require a Contract Management Plan. Goods, services, and civil works will be packaged in economical packages to attract bidders who are qualified and can offer good prices and complete contracts within the stipulated period resulting in value for money. Adequate qualification should be provided for contractors and subcontractors for the provision of goods and materials to mitigate the risk of poor quality of materials and delaying by potential contractors in procuring the materials due to inadequate capacity. Page 28 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 80. The PP provides: (a) a brief description of the activities/contracts for the goods, works, non-consulting services, and/or consulting services; (b) the selection methods and market approaches to be applied; (c) estimated cost of each individual contract; (d) time schedules; (e) World Bank review requirements; and (f) any other relevant procurement information. The PP will be updated at least every 12 months, or as required, to reflect the actual project implementation needs. Each update of the PP shall require World Bank approval. All PPs will be publicly disclosed in accordance with the World Bank’s disclosure policy. 81. The World Bank’s system Systematic Tracking of Exchanges in Procurement (STEP) will be used to prepare, clear, and update PPs and conduct all procurement transactions for the project. As part of the preparation, staff from the relevant implementing agencies shall undergo STEP training. 82. Procurement templates. The World Bank’s Standard Procurement Documents (SPDs) shall be used for procurement of goods, works, and non-consulting services under International Competitive Procurement. National Bidding Documents may be used under the National Procurement Procedures (NPPs) subject to the procedures described in the Procurement Regulations and the inclusion of the following: (a) Open advertising of the procurement opportunity at the national level; (b) The procurement is open to eligible firms from any country; (c) The request for bids (RFB)/request for proposals 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; (d) Procurement Documents include provisions, as agreed with the World Bank, intended to adequately mitigate against environmental, social (including sexual exploitation and abuse and GBV), environment, social, health and safety (“ESHS”) risks and impacts; (e) Contracts with an appropriate allocation of responsibilities, risks, and liabilities; (f) Publication of contract award information; (g) Rights for the World Bank to review procurement documentation and activities; (h) An effective complaints mechanism; and (i) Maintenance of records of the Procurement Process. 83. Other national procurement arrangements (other than national open competitive procurement), that may be applied by the Recipient (such as limited/restricted competitive bidding, request for quotations (RFQs)/shopping, direct contracting), shall be consistent with the requirements of the World Bank’s core principles. 84. A procurement risk assessment of the capacity of EDSA and MoE to implement procurement activities under the project was carried out. The assessment included a review of the organizational structures, functions, staff skills and experience, and adequacy for implementation of the project. The assessment revealed several issues, including (a) procurement staff lacking experience in undertaking procurement using the New Procurement Framework; (b) an ineffective procurement filing, and record management system and lack of staff dedicated to procurement records management; and (c) poor contract management leading to delays in completion of contracts. The overall project procurement risk rating is assessed as Substantial. The risks identified and the mitigation measures are summarized in Annex 1. Page 29 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 85. Fiduciary oversight by IDA. IDA shall prior review contracts as provided in the PP. All contracts not covered under prior review by IDA shall be subject to post review during implementation support missions and/or special post review missions, including missions by consultants hired by the World Bank. Prior review contracts will include: (a) all contracts estimated to cost the equivalent of US$10 million or more for works and US$2 million or more for goods and non-consulting services; (b) consulting service contracts provided by a firm estimated to cost the equivalent of US$1 million or more; and (c) each contract for the employment of individual consultants estimated to cost the equivalent of US$280,000 or more. .C. Legal Operational Policies . Triggered? Projects on International Waterways OP 7.50 No Projects in Disputed Areas OP 7.60 No . D. Environmental and Social 86. The project is subject to the World Bank E&S Framework requirement. Eight (8) of the 10 Environmental and Social Standards (ESSs) applies to the project. In accordance with the applicable ESSs, the Government has drafted the following Environment and Social (ES) instruments: (a) Environmental and Social Management Framework (ESMF), including a Social Assessment; (b) Resettlement Policy Framework (RPF); (c) Stakeholder Engagement Framework (SEP); and (d) Environmental and Social Commitment Plan (ESCP) that will guide the management of risks and impacts associated with the project. The SEP and ESCP were disclosed in-country on November 26, 2020 and on the World Bank website on November 24, 2020, respectively. The ESMF, which includes Labor Management Procedures, and RPF were disclosed in country and on World Bank’s website on November 26, 2020. During project implementation, site specific instruments will be prepared to reflect the actual site-specific conditions according to the disclosed ESMF and RPF when project locations and designs are known. The specific safeguards instruments could include Resettlement Action Plans (RAPs), Environmental and Social Management Plans (ESMPs) or Environmental and Social Impact Assessments (ESIAs) as determined by the E&S screening analysis. Each follow-up action/management plan will require World Bank approval and will be publicly disclosed in accordance with the World Bank disclosure policy. The distribution network expansion in Waterloo and surrounding areas is the largest project activity of the project and accounts for about one-third of the total project cost. As the site survey and design of the activity have been completed under the ongoing ESURP, the ESHIA is already prepared and disclosed11 in country and on Bank’s website. It will be redisclosed in country and on World Bank’s website under this project as needed before construction commencement. 87. Environmental and Social Risk Assessment: The overall E&S risk is rated Substantial due to weak institutional capacity of the implementing agencies and the potentially complex implementation arrangement for the various subcomponents and the wide geographical scope of the project that cover several towns and communities. The project is not expected to create significant irreversible E&S impact as the sub-transmission lines are medium and low voltage and the routing is largely along existing public roads to minimize environmental impact and land acquisition. They are not expected to pass any sensitive areas like forest and wildlife habitats. 11Environmental Social and Health Impact Assessment, Report number SFG5270, March 14, 2019 (http://documents.worldbank.org/curated/en/781981552634832532/Environmental-Social-and-Health-Impact-Assessment) Page 30 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Lithium-Ion batteries are also proposed instead of acid batteries for the solar PV systems. The solar PV installation in Moyamba is proposed for an unused site of about 500 acres (202 ha). The solar installation for mini grids will require much smaller plots of land which are expected to be available as land availability is one of the main criteria for mini-grid selection. Nevertheless, because of the nature of the anticipated works (construction of substations, trenching for sub-transmission and distribution lines, pole planting and stringing for on-grid access, batteries and solar panel installation), the key E&S risks of the project may include: (a) removal of vegetative cover; (b) erosion and water pollution; (c) dust and noise pollution; (d) modification of the aesthetic nature of the environment; (e) land acquisition and displacement; (f) disposal of construction and operation wastes like batteries; (g) worksite hazards and injuries; and (h) community health and safety etc. 88. The Sexual Exploitation and Abuse and Sexual Harassment (SEA/SH) risk assessment using the World Bank SEA/SH risk assessment tool returned a Low risk rating. However, considering the high contextual GBV risk in Sierra Leone, potential for labor influx to work and search for job and procurement, which is likely to create grounds for SEA/SH risks for women and girls in particular, the project mitigation measures will be commensurate to a Moderate risk level and shall include the following measures: (a) SEA/SH risk assessment will be integrated in the project ESIAs/ESMPs and Labor Management Plan; (b) the bidding documents will clearly define the requirements and expectations for contractors and workers; (c) contractual obligations will also require the contractor to have a Code of Conduct (CoC) and training on its obligations under the CoC on SEA and Sexual Harassment, as well as a SEA/SH Action Plan and accountability and Response Framework as part of the project ESMP; (d) ToR of the supervision consultant will include the need to incorporate in the team a social specialist with knowledge of GBV; (e) the project grievance redress mechanism (GRM), will include SEA/SH sensitive approaches; and (f) the project is starting to recruit a GBV focused NGO that will support to enhance the GRM in order to adequately and promptly address any potential project-related SEA grievances, conduct service provider mapping, provide training to the Social and Gender specialist, and support with case management and referrals. 89. The project has positive environmental and climate change interventions. Component 1 promotes the use of imported grid electricity, which is produced by a mix of renewable energy and gas fired power plants, to substitute electricity which is produced primarily by liquid fuel units for both customers served by the isolated grids and by captive power generation units. Component 2 promotes the use of solar energy in public institutions, as well as residential customers, commercial and industrial entities. In general, the likely negative environmental, health, and safety effects of the project activities are expected to be localized and temporary in nature, limited to minimal vegetation clearances to enable pitting of poles for distribution network, occupational and community health and safety concerns during the conductor stringing process, and disposal of damaged and replaced batteries and solar panels generated for off-grid technologies. The site-specific safeguards instruments developed under the project, which will be included in the bidding documents and will form part of the construction contracts, will provide mitigation measures for addressing these risks and impacts. Sierra Leone has national laws and institutions for E&S management. However, there are weaknesses in system performance related to institutional links, staffing level, and budget allocation for environmental aspects, as well as human resource skills. 90. The handling of the used or damaged batteries and solar PV panels will be the responsibility of the solar PV vendors and private operators which will store, transport and dispose these products according to Waste Management Plan to be prepared and including in contracts of contractors and operators. Contractors and operators will be responsible for transport, store and disposal of wastes according to the plan in designated locations. Although not likely, there is a possibility that routing may intrude into forests, wetlands, and other natural areas. Considering the uncertainties of the specific location and routes of the power lines at this stage, the Page 31 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) relevance of ESS6 remains to be further assessed during sub-project preparation. The ESMF outlines procedures for screening project activities that will identify potential risks to biodiversity. A detailed ESIA will assess the potential impact on biodiversity and will inform the design and routing of the 66-kV/33-kV transmission and distribution lines. The ESIA will recommend steps to avoid, mitigate, restore or rehabilitate any potential biodiversity impacts. The implementing agencies will ensure that mitigation measures are implemented to reduce the direct, indirect and the residual impacts of these activities. 91. ES Capacity: The institutional capacity of the two Implementing Agencies (EDSA and MoE) were assessed with the goal of identifying opportunities for strengthening identified gaps in E&S risks management of the project. Over the last several years, EDSA and MoE have implemented several projects with funding support from the World Bank and currently implementing the ESURP. Despite the accumulated experiences in delivering similar operations, the assessment identified some issues include: (a) staffing gaps (earlier recommendation to institutionalize E&S management unit in EDSA has yet to be fully implemented). EDSA has an environmental specialist and is in the process of finalizing recruitment of a social development and gender specialist; (b) contractor challenges in fully complying with ESMPs; (c) funds for RAP implementation and compensation payment; and (d) E&S supervision, filing and reporting, and GBV sensitive GRM etc. General compliance with E&S requirements in the existing project has been Moderately Satisfactory. To address the gaps identified, EDSA will complete the recruitment of the social and gender specialist to strengthen the capacity of the Health, Safety, Social and Environment unit (HSSE). The project will finance an integrated E&S information management system to file and enhance E&S reporting and coordination in MoE and EDSA. Relevant staff of the implementing agencies (IAs), including their contractors will undergo targeted E&S training. A digital platform for GRM will be instituted with a GBV service provider contracted to ensure confidential uptake and response to complaints. The Recipient and project implementing agencies will ensure that adequate budget is provided to ensure timely implementation of the RAP. E&S management requirement of this project is also reflected in the ESCP. 92. GRM. A project-specific GRM is being set up to handle complaints and issues. The GRM would be specially designed to collect, collate, review and redress stakeholders’ concerns, complaints and grievances. This process will be carried out using dedicated communication materials (specifically, a GRM brochure or pamphlet) which will be developed to help stakeholders become familiar with the grievance redress channels and procedures. The GRM will be accessible and understandable for all stakeholders in the project and for the entire project life. The GRM will be communicated to all relevant stakeholders and will also be applicable for any contractor that will provide service for the project during the construction and operations phase. The GRM is expected to be operational by around project effectiveness. 93. Gender. The GoSL is strongly committed to gender equality and other national policies, as well as in the signing of international and regional treaties and protocols on women’s rights. However, encouraging active participation by women in energy projects is challenging due to existing social and economic barriers and women’s limited roles in the decision-making processes in their communities. Overall, fewer women than men are heads of households and also tend to be poorer in particular in urban areas. Similar trends for asset- and land ownership can be observed, and women commonly have only limited or no decision-making powers in many areas including their individual participation in development programs such as this. The gender gaps that the project is aiming to address are the following: (a) in urban areas, poorer, female-headed households (FHH) have disproportionately lower access to energy; (b) due to lower asset ownership and access to finance and information, women can launch income-generating activities far less often than men and have less opportunities even when they manage; Page 32 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) (c) women are often under-represented and left out of the talent pool in the energy sector; and (d) effort to address women’s basic needs in health and education is lagging behind that of men. 94. By providing access to electricity for FHHs, the project in addition will improve outcomes for women through enhancing the productive uses of electricity to increase the income of women’s enterprises and livelihoods. Under Component 2, a community awareness campaign will be developed to inform people in target areas of the benefits and costs of electricity services, as well as the payment mechanisms, procedures and safety practices of the electrification process. Women could also earn income and gain employment from productive uses of energy in partnership with the private sector. Women-headed businesses will be targeted to profit from access to electricity to enhance their livelihoods and competitiveness. Beyond community benefits, tailored interventions on women’s employment in the energy sector (both technical and non-technical roles) will be implemented to ensure better balance and the talent pool is enhanced. Women’s health benefits will be targeted by including the electrification of health facilities with maternity wards. 95. M&E. Indicators will track progress towards reduced disparity of household electricity access as well as access of female-headed businesses. Specific indicators focused on tracking percentage of female engineers at EDSA and MoE possibly with other numbers (for example of bursaries) that indicate closing the gap in women’s employment in the energy sector is also considered and alongside other output and gender-related indicators are included in the Results Framework and the Project Implementation Manual (PIM). 96. Citizen engagement: The project will be implemented through a market-based approach and accordingly will facilitate both the supply side and the demand side of the equation. As the project deals with innovative technologies, its success will depend on successful awareness campaigns and capacity building of the ultimate project beneficiaries—citizens and effective Grievance Redress Mechanism. The project supports interventions to inform and train the end beneficiaries and citizens on the use and maintenance of grid and off-grid energy services to reduce misuse and ensure appropriate care of these products. Adequate awareness campaigns and information dissemination will be conducted to inform citizens on their diverse benefits, safe use etc. The productive use aspect of these products is largely unknown to most of the potential beneficiaries, and the project will ensure adequate citizen engagement to achieve intended benefits. Initial stakeholder consultations were undertaken during the preparation of the project and development of the E&S instruments. Relevant stakeholders included the District Councils, MOE, EDSA, Ministry of Youth, Women’s Forum, Chiefdom and local authorities, CSO etc. The project has prepared and disclosed a SEP to ensure that stakeholders are fully engaged, especially the vulnerable and disadvantaged groups throughout the project cycle. Stakeholders will be consulted and their views considered in determination of technical designs, space requirement, selection of routes for service, distributions and transmission networks, siting of min-grids and solar PV system, selection of communities and public institutions, E&S Risk Management and implementation etc. The project will monitor implementation of the SEP and determine through annual stakeholder survey how their engagement in the consultations under the project is useful and represent their views and preferences. GRM -A comprehensive project wide GRM will be instituted to enable a broad range of stakeholders channel their concerns, questions, and complaints to the various implementation agencies, through multiple grievance uptake channels 97. Climate co-benefits: The project will provide primarily mitigation co-benefits by increasing the use of clean energy to substitute for the use of liquid fuel which has much higher GHGs emission. Under the Component 1, the consumers will be provided with imported electricity which consists of 80 percent gas and 20 percent hydropower to substitute liquid fuel electricity. Under the Component 2, all consumers will be provided with 100 Page 33 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) percent solar based electricity to substitute for liquid fuel electricity. The project will provide some adaption co- benefits by considering resilience measures in designing the sub-transmission/distribution lines and distribution network as well as the solar PV systems. The design of the distribution network and selection of transformers and conductors will contribute to lower technical losses. TA will be provided to EDSA to strengthen climate resilience of the power network through improved operation and maintenance practices. V. GRIEVANCE REDRESS SERVICES 98. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress 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 Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate GRS, please visit http://www.worldbank.org/en/projects- operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org. VI. KEY RISKS 99. The overall risk rating for the proposed project is Substantial . The following risks are considered substantial: (a) political and governance; (b) macroeconomic; (c) institutional capacity for implementation and sustainability; (d) fiduciary; (e) E&S; and (f) COVID-19. Appropriate measures have been identified to mitigate the risks to the extent possible. 100. Political and Governance. The political and governance risk is rated Substantial as the country’s political environment is still fragile and the country’s transparency index is low. There will be a general election in early 2023 when the project is going to be still under implementation. There could be incidents to and following the general election, which could impact project implementation temporarily, but these are considered to be manageable. The risk of political interference and governance is mitigated through minimizing the Government’s direct interfering in project implementation and ensuring IDA’s procurement regulation is strictly followed. The project is primarily implemented by the national utility, which is supported by independent consultants for procurement. 101. Macroeconomic. The country’s macroeconomic risk is rated as Substantial although the risk of continuing domestic and external imbalances is high. The recent COVID-19 pandemic is expected to significantly disrupt economic activity and raise the macroeconomic risk. To date, official figures indicate that Sierra Leone has been able to contain widespread transmission of COVID-19. Despite that, economic activity is expected to be seriously affected through three channels, specifically: services sector due to the shock to tourism; imports and related supply chains for industry, and liquidity for the financial sector. The situation continues to be fluid making precise estimates of impacts a challenge. However, the COVID-19 pandemic is expected to significantly reduce growth in FY20. The large shock to GDP growth is expected to substantively reduce revenues while expenditures increase as government programs are implemented to deal with the pandemic, including needed economic support to households, businesses and possibly financial institutions. This is expected to create a significant financing gap. Page 34 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) The risk is mitigated by minimizing the requirement of government funding support to the project and ensuring the dedicated use of the grant proceeds to the project activities. The risk is also mitigated through the strong focus of the project activities to improving EDSA’s financial viability through management improvement and distribution losses reduction. 102. Institutional capacity for implementation and sustainability. The institutional capacity for implementation and sustainability risk is rated Substantial as the capacity in both EDSA and MoE is still weak despite some enhancement made under the previous and existing IDA funded projects. The risk will be mitigated through: (a) intensified and comprehensive training and capacity building for MoE’s and EDSA’s staff; and (b) continued engagement of international specialists in various fields to assist MoE and EDSA to implement the project and enhance staff capacity. Risks to sustainability of the approaches and how that is managed have been discussed in the sustainability section. 103. Fiduciary. The fiduciary risk is rated Substantial as the FM system and capacity in EDSA is assessed as still not adequate and the procurement capacity to implement the Procurement Regulation is not strong. The risk is mitigated through: (a) an experienced international procurement specialist has been employed to assist in carrying out procurement activities; and (b) IDA’s FM and the procurement team will conduct an intensive training capacity building for both EDSA and the MoE on FM system and requirement and the new Procurement Regulation. 104. Environment and social. The E&S risk rating is Substantial due to the still weak institutional capacity of EDSA, although the potential adverse impacts are not expected to be significant and will be of temporary nature. The construction activities within towns may trigger temporary disruption of access and economic activities. Works involving the erection of power distribution poles and stringing of conductors may also result in damage to structures. Primary environmental impacts will also include noise, emissions, and dust and solid waste generated during construction activities. Other concerns relate to occupational safety and health of workers during construction and public safety and health caused by truck movements and construction activities. The project was also assessed for GBV risk with the World Bank’s standard GBV risk assessment tool and this showed a low-risk score of 12.25. Framework instruments will be prepared to guide the preparation of site-specific plans aimed at addressing E&S risks as sub-projects are identified. Environmental, health and safety risks are associated with vegetation clearances, occupational and community health and safety concerns during the stringing process, and end-of-life batteries generated from off-grid technologies. Social impacts associated with project activities will generally emanate from the construction of both electric distribution networks and standalone solar energy facilities, including risks associated with non-compensation for affected crops and trees, influx of labor into targeted areas, lack of adequate consultation of affected persons and access to functioning grievance redress mechanisms, and social exclusion. 105. Other: COVID-19 – Substantial. While all the possible impacts of the pandemic are yet foreseeable and quantifiable, the outbreak has already disrupted: (a) grid rollout construction works, due to the shutdown; and (b) supply chains for off-grid and related equipment from China. The rollout of Components 1 and 2 for grid and off-grid connectivity scale-up is, therefore, vulnerable to country developments. In addition, while the proposed project provides affordability support through partial subsidies, the socio-economic impact of the COVID-19 pandemic and locust crises may severely affect the customer’s possible contributions to grid and off-grid. Component 3 activities may also be disrupted (e.g., engagement of international specialists and market assessments) in case of lockdowns and the broader impact of the COVID-19 pandemic on institutional processes, Page 35 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) private sector doing business, field markets assessments and capacity building activities. The risk is mitigated through maximizing the use of online procurement platform for goods, works and consultant services. 106. Climate and Disaster Risks: The key risks due to climate change impacts are inundation and extreme temperature. As documented by the World Bank Climate Co-Benefits Knowledge Portal and country climate profile, its agriculture sector (particularly rice), which provides livelihoods for 75 percent of the population and contributes more than 50 percent of GDP, is highly sensitive to increased humidity and rainfall intensity. Climate change impacts, particularly higher temperature (1–2.5°C in average expected increased in Sierra Leone by 2060), sea-level rise and more frequent extreme weather events, particularly intense rainfalls will further stress the country’s natural resources that are already under pressure from population growth. Moreover, the high dependence on biomass for energy needs contribute to deforestation and land. The design of lines, transformers and solar PV panels will consider the risks of flooding, storm and wind, and extreme temperature in the design specifications under each Component. Changes in heat will increase cooling demand in the region and increase loading on the line. The distribution network will have adequate capacity to support the additional demand. . Page 36 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) VII. RESULTS FRAMEWORK AND MONITORING Results Framework COUNTRY: Sierra Leone Enhancing Sierra Leone Energy Access Project Development Objectives(s) The Project Development Objective is to increase electricity access in Sierra Leone. Project Development Objective Indicators RESULT_FRAME_TBL_ PD O Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 increase electricity access in Sierra Leone People provided with new or improved electricity service 0.00 0.00 0.00 180,000.00 264,000.00 276,000.00 (CRI, Number) People provided with new or improved electricity 0.00 0.00 0.00 90,000.00 132,000.00 138,000.00 service - Female (CRI, Number) Health facilities and schools provided with standalone PV 0.00 0.00 0.00 500.00 700.00 700.00 systems (Number) Greenhouse Gas (CO2) 0.00 0.00 0.00 3,854.00 12,108.00 15,135.00 emission avoided (Tones/year) PDO Table SPACE Page 37 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Intermediate Results Indicators by Components RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Electrification of towns and communities through grid extension Number of EPC contracts 0.00 1.00 7.00 8.00 8.00 8.00 signed (Number) Aggregated technical, commercial and collection 0.00 0.00 0.00 0.00 20.00 20.00 losses in project areas (Percentage) Percentage of female headed households to be provided 0.00 0.00 0.00 100.00 100.00 100.00 with electricity in project areas (Percentage) Percentage of female headed businesses provided with 0.00 0.00 0.00 100.00 100.00 100.00 electricity in the project area (Percentage) Total length of 33 kV and 66 kV lines constructed (Kilometers) 0.00 0.00 0.00 100.00 160.00 160.00 Electrification through mini-grids and standalone solar PV systems Total PV capacity installed (Megawatt) 0.00 0.00 0.00 3.00 4.00 4.00 Number of households provided with electricity 0.00 0.00 0.00 1,000.00 2,500.00 3,000.00 through off-grid solution (Number) Number of solar PV based 0.00 0.00 0.00 5.00 10.00 10.00 mini-grids installed (Number) Market assessment completed (Yes/No) No No Yes Yes Yes Yes Human capital development, and project implementation support Page 38 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) RESULT_FRAME_TBL_ IO Indicator Name PBC Baseline Intermediate Targets End Target 1 2 3 4 Number of staff trained (Number) 0.00 20.00 200.00 550.00 950.00 1,000.00 Female staff increased in EDSA 9.00 10.00 12.00 14.00 15.00 15.00 (Percentage) Complaints recorded and resolved in three weeks 0.00 85.00 85.00 85.00 85.00 85.00 (Percentage) 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 The data and information will be collected from MoE and MoE and People provided with new or improved Annually EDSA project reports MoE and EDSA EDSA reports electricity service and annual reports, verified by project consultants as needed The data and information will be EDSA and People provided with new or annually collected from MoE and EDSA and MOE MOE reports improved electricity service - Female EDSA project reports and annual reports, and verified by consultants Page 39 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) as needed. The data and information will be The indicator measure the MoE and collected from MoE and Health facilities and schools provided with number of health facilities Annual MoE and EDSA EDSA reports EDSA reports, verified standalone PV systems and schools provided with by consultants as standalone solar PV systems needed. The annual amount of The indicator measure the GHGs will be estimated amount of greenhouse gas based on amount and MoE and (CO2) reduced and avoided Annually types of electricity MoE and EDSA Greenhouse Gas (CO2) emission avoided EDSA as a result of increased supplied for cleaner electricity through consumption by project the project activities consumers. ME PDO Table SPACE Monitoring & Evaluation Plan: Intermediate Results Indicators Methodology for Data Responsibility for Data Indicator Name Definition/Description Frequency Datasource Collection Collection MoE and Data and information This indicator measures the EDSA project will be based on project total number of EPC Annually reports and MoE and EDSA Number of EPC contracts signed and sector reports by contracts signed for under annual MoE and EDSA grid extension reports Aggregated technical, commercial and collection losses in project areas Page 40 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) The data and information will be The indicator measure the MoE and collected from Percentage of female headed households percentage of female EDSA project Annually MoE/EDSA reports and MoE/EDSA to be provided with electricity in project headed households to be and annual verified by a survey to areas provided with electricity in reports be conducted prior to project areas project closing The data and This indicator measures the EDSA and information will be Percentage of female headed businesses percentage of female Annually project collected from EDSA EDSA provided with electricity in the project headed businesses to be reports report and selectively area provided with electricity in verified by survey the project area. The data and information will be EDSA project collected from EDSA This indicator measures the Total length of 33 kV and 66 kV lines Annually progress progress report which EDSA length of the 33 kV and 66 constructed report is prepared with the kV lines completed assistance of the engineering consultant. The data and The indicator measure the MoE project information will be amount of solar PV capacity Annually and annual collected from MoE MoE Total PV capacity installed installed through mini-grids reports project reports and and standalone systems verified as needed. The indicator measure the The data and Number of households provided with number of households Annually MoE reports information will be MoE electricity through off-grid solution provided with electricity collected from MoE through solar PV based project reports Page 41 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) mini-grids The indicator measure the MoE project The data will be based Number of solar PV based mini-grids Annually MoE number of mini-grids reports on project reports. installed developed and operational It will be based on The indicator measure when Monthly MoE review of the report MoE Market assessment completed the market assessment is produced completed The PMU and PIU of MOE and EDSA will The indicator measure the record all persons total number of staff in MoE and Annually trained through MoE and EDSA Number of staff trained MoE, EDSA and other EDSA reports contracts, workshops entities to be trained under and other training the project sessions. The indicator measure the EDSA project EDSA will record number of female staff Annually and annual changes in the number EDSA Female staff increased in EDSA change n EDSA during the reports of female staff project period MoE and The information will be The indicator monitor how EDSA project Complaints recorded and resolved in Quarterly collected from the GRM MoE/EDSA complaints are recorded progress three weeks and project reports and resolved reports ME IO Table SPACE Page 42 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) ANNEX 1: Implementation Arrangements and Support Plan Strategy and Approach for Implementation Support 1. The strategy for implementation support has been developed based on the nature of the project and its risk profile. Implementation support has been designed to guarantee efficient and flexible support to the Client and facilitate implementation of the risk mitigation measures. The objective is to ensure that the implementing agencies implement the project successfully to achieve the PDO. It also ensures that the World Bank’s resources and staff are sufficient to supervise and support project implementation. The World Bank team members will be based at headquarters, in the region, and in the Sierra Leone Country Office to ensure timely and continued coordination with the Recipient, perform close project implementation support, and provide advice on implementation issues as they arise. Implementation Support Plan 2. Technical implementation support will focus on ensuring timely and adequate staffing of the PIUs at MoE and EDSA and the preparation of the PIM outlining the implementation and operational modalities of the project, particularly for the off-grid component. ToRs for staff and consultants required for the PIU positions are being prepared by the Client and shall be reviewed by the World Bank to ensure that tasks are appropriately defined, and the required qualifications and experience are adequate to perform the key functions required for project implementation. The PIUs’ immediate task procurement of consultants which will help with design and preparation of technical specifications and will be the tendering of the major infrastructure packages (under Component 1) and the selection of the mini-grid sites and health/education facilities under Component 2. During supervision, the World Bank team’s support will focus on monitoring of the procurement and construction process, contracts management, disbursements, and effectiveness of capacity-building and TA activities. The World Bank team will include staff and consultants, complemented with specialized expertise as required. Financial Management 3. Financial Assessment Summary. The World Bank conducted FM assessments in accordance with the World Bank IPF Policy (on FM) and the FM Manual for World Bank IPF operations issued by the World Bank’s Operations Policy and Country Services (OPCS) on February 10, 2017. The FM arrangements for the project cover the system of planning and budgeting, accounting, internal controls, funds flow, financial reporting, and auditing. FM arrangements are acceptable if they are considered capable of recording correctly all budgets, transactions and balances, supporting the preparation of regular and reliable financial statements, safeguarding the entity’s assets, and are subject to auditing arrangements acceptable to the World Bank. 4. Country Issues: Country issues that potentially impact project FM include the public FM environment. Sierra Leone’s public financial management (PFM) arrangements were assessed in 2018 using the Public Expenditure Financial Accountability (PEFA) PFM Performance Measurement Framework. According to the assessment, Sierra Leone has maintained its progress since PFM reform started with the Institutional Reform and Capacity Building Project (IRCBP) in 2004. The weaknesses in some areas impact on fiscal discipline (the ability to stay on track), on strategic allocation of resources (alignment with the Page 43 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) Agenda for Prosperity), and on efficient delivery of services. The Public FM Reform Strategy 2018-2021 seeks to improve efficiency, effectiveness and transparency of revenue generation and expenditure management and provide the basis for macro stability, strategic allocation of resources, delivery of vital goods and services to the country and strengthen accountability between the State and citizens. 5. The summary risk analysis presented below is based on the assessment of country risks and project’s proposed FM arrangements. Table 1.1: Key FM Summary Risks and Mitigation Measures - (MoE) Risk Ring Risk mitigating measures Residual Risk rating 1 Country Level H Efforts are being made to help GoSL H Weaknesses in legislative scrutiny, low substantially resolve and enhance human capacity, and energy challenges revenue management framework in affecting timely and adequate the medium term. intergovernmental fiscal transfers. The Public FM Improvement and Consolidation Project (P133424) seeks to address the human capacity issues including FM capacity and improve process aspects. 2 Entity Level H An independent project FM unit with S The political arm of the Entity and / or officers paid by the project will Management may unduly interfere with, manage the fiduciary aspects of the and/or override, project FM controls. project to ensure independence. An independent external audit will be carried out annually under the project. The design of the project will include an enhanced accountability framework to ensure control of soft expenditures from possible abuse. Initially, regular FM reviews will be conducted by the World Bank team to provide support. 3 Project Level H The PMU will be manned by qualified S Weak FM capacity could result in slow personnel that will handle the day-to- execution of the project and delayed day management for the GoSL. The reporting could impact on progress. performance of the staff hired in the Unit will be reviewed annually to act as a basis for renewal of their individual contracts. 4 Budgeting S The Annual Work Plans and Budgets M Budget and annual work plan (AWPB) would be submitted annually preparations may be delayed and may not before implementation starts for be comprehensive. Risk of cost overruns review by the World Bank team which and adverse variations in expenditure would ensure it is realistic and unit could arise due to potential slow cost estimates are reasonable based implementation and padding of the on industry and global experiences related unit costs of goods and services gathered in some jurisdictions that Page 44 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) Risk Ring Risk mitigating measures Residual Risk rating entailed in the implementation. have undertaken similar operations and cross check the same with the local market. Also, budget execution reporting through quarterly IFRs will be routinely monitored by IDA with variations in unit costs tracked to ensure major deviations are followed up and investigated. The Budget Office will also monitor budgeted activities to ensure effective use of budgets 5 Accounting S The PMU will use Quick Book M Government Accounting System not yet accounting system and prepare a FM installed at the Unit. Use of manual Procedures Manual. The World accounting system not generating Bank’s team will provide support to reliable, accurate and timely accounting relevant project staff at PMU. information for project appropriate decision making acceptable to the World Bank. 6 Internal Control S Adequate Internal Control (IC) over M Project funds not being used for the disbursement and accountability intended purposes because of of funds for eligible expenditures will inadequate internal control by be further strengthened by the management and lack of control adoption of an enhanced measures pertaining to soft accountability framework for the expenditures and usage of executive project and internal audit oversight on override. This may give rise to non- the project at PMU will be instituted. compliance with internal control An Internal Auditor will be hired and procedures. paid by the project. The internal auditor will be required to generate periodic internal audit reports which should be shared with relevant stakeholders including the World Bank. The internal controls will also be documented in the FM manual for the project. Internal and external auditors would be expected to clearly identify and report any cases of breach of internal control procedures by the project management. 7 Fund Flow IDA funds will be disbursed through M Possible delays in processing withdrawal S US$-denominated Designated applications leading to problems in Accounts to be opened by project honoring payments to third parties. implementation agencies. The Submission of Withdrawal Applications implementing agencies will provide to delayed. the World Bank through the Ministry Page 45 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) Risk Ring Risk mitigating measures Residual Risk rating of Finance (MoF) the details of the authorized signatories for their respective Designated Accounts. PHRD funds will be disbursed through a separate US$-denominated Designated Account to be opened by the PMU. Simplified flow of funds arrangements will be included in the PIM. 8 Financial Reporting S IFRs shall be submitted to the World M Delays in the preparation and submission Bank within 45 days after end of each of un-audited IFRs and/or unreliable IFRs calendar quarter. The content of the submitted. IFR will include Sources and Uses of Funds, Uses of Funds by Category, bank accounts reconciliation and a schedule of amounts drawn. 9 Auditing S The audit ToR will be agreed, and a M Delays in the submission of audit reports qualified and acceptable auditor and the timeliness of management follow appointed with relevant input of Audit up on audit issues Service Sierra-Leone. Continuous satisfactory performance of auditors will be basis for continuous engagement. The audit would be done in accordance with International Standards on Auditing and, International Public-Sector Accounting Standards. The audited financial statement is expected to be submitted to the World Bank not later than 6 months after the end of each fiscal year. The TOR for the external auditors must be cleared by the World Bank. The World Bank will liaise closely with implementing agencies to ensure that management takes corrective actions on identified weaknesses. OVERALL RISK RATING H S H —High, S — Substantial, M — Moderate and L — Low. Page 46 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) Table 1.2: Key FM Summary risks and Mitigation Measures – (EDSA) Risk Risk Risk-mitigating measures Residual rating Risk rating 1 Country Level H Efforts are being made to help GoSL H Weaknesses in legislative scrutiny, substantially resolve and enhance low human capacity and energy revenue management framework in the challenges affecting timely and medium term. adequate intergovernmental fiscal The Public FM Improvement and transfers. Consolidation project seeks to address the human capacity issues including FM capacity and improve process aspects. 2 Entity Level H An independent project FM unit with S Management may unduly interfere officers paid by the project will manage with, and/or override, project FM the fiduciary aspects of the project to controls. ensure independence. An independent external audit will be carried out annually under the project. The design of the project will include an enhanced accountability framework to ensure control of soft expenditures from possible abuse. Initially, regular FM reviews will be conducted by the World Bank team to provide support. 3 Project Level H The PIU will be manned by qualified S Weak FM capacity could result in personnel that will handle the day-to-day slow execution of the project and management for the GoSL. The delayed reporting could impact on performance of the staff hired in the Unit progress. will be reviewed annually to act as a basis for renewal of their individual contracts. 4 Budgeting S The AWPB would be submitted annually M Budget and annual work plan before implementation starts for review preparations may be delayed and by the World Bank team which would may not be comprehensive. Risk of ensure it is realistic and unit cost cost overruns and adverse estimates are reasonable based on variations in expenditure could industry and global experiences gathered arise due to potential slow in some jurisdictions that have implementation and padding of the undertaken similar operations and also related unit costs of goods and cross check the same with the local services entailed in the market. implementation. Also, budget execution reporting through quarterly IFRs will be routinely monitored by IDA with variations in unit costs tracked to ensure major deviations are followed up and investigated. The Budget Office will also monitor budgeted activities to ensure effective use of budgets 5 Accounting S The PIU will use Quick Book accounting M Government Accounting System system and ensure compliance with its not yet installed at the Unit. Use of FM Procedures Manual. The World manual accounting system not Bank’s team will provide support to Page 47 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) Risk Risk Risk-mitigating measures Residual rating Risk rating generating reliable, accurate and relevant project staff at PIU. timely accounting information for project appropriate decision making acceptable to the World Bank. 6 Internal Control S Adequate Internal Control (IC) over the M Project funds not being used for disbursement and accountability of funds intended purposes because of for eligible expenditures will be further inadequate internal control by strengthened by the adoption of an management, lack of control enhanced accountability framework for measures and absence of internal the project and internal audit oversight on audit. the project at PIU will be instituted. The internal auditors of EDSA will be required to generate periodic internal audit reports which should be shared with relevant stakeholders including the World Bank. The internal controls will also be documented in the FM manual for the project. Internal and external auditors would be expected to clearly identify and report any cases of breach of internal control procedures by the project management. 7 Fund Flow S The PMU will be responsible for preparing M Possible delays in processing and submitting withdrawal applications, withdrawal applications leading to and acceptable service standards for problems in honoring payments to settlement of bills will be established. third parties. IDA funds will be disbursed through the Submission of Withdrawal US$-denominated Designated Account to Applications delayed. be opened by the PMU. Simplified flow of funds arrangements will be included in the PIM. 8 Financial Reporting S IFRs shall be submitted to the World Bank M Delays in the preparation and within 45 days after end of each calendar submission of un-audited IFRs quarter. The content of the IFR will and/or unreliable IFRs submitted. include Sources and Uses of Funds, Uses of Funds by Category, bank accounts reconciliation and a schedule of amounts drawn. 9 Auditing S The audit ToR will be agreed, and a M Delays in the submission of audit qualified and acceptable auditor reports and the timeliness of appointed with relevant input of Audit management follow up on audit Service Sierra-Leone. Continuous issues satisfactory performance of auditors will be basis for continuous engagement. The audit would be done in accordance with International Standards on Auditing and, Page 48 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) Risk Risk Risk-mitigating measures Residual rating Risk rating International Public-Sector Accounting Standards. The audited financial statement is expected to be submitted to the World Bank not later than 6 months after the end of each fiscal year. The TOR for the external auditors must be cleared by the World Bank. The World Bank will liaise closely with implementing agencies to ensure that management takes corrective actions on identified weaknesses. OVERALL RISK RATING H S H —High, S — Substantial, M — Moderate and L — Low. 6. Budgeting Arrangements. The respective entities’ AWPBs will be prepared and approved based on the policy guidelines and strategy planning as will be laid-out in the PIM and consistent with the provisions of the PFM Act 2016. The budget will be activity based and in line with the cost tables of the project. The AWPB is expected to be prepared in a participatory way and will be approved before each new financial year begins. Actual expenditure, including a comparison to budget, will be monitored during project implementation using unaudited interim financial reports. The Finance Unit of the PMU of the MoE will ensure timely preparation, review, consolidation, and approval of the annual work program budget. 7. Accounting Arrangements. The Finance Unit of the PMU of MoE and the Finance Unit of the PIU of EDSA will utilize Quick Books accounting software to record transactions and prepare financial reports. The Finance Units will set up and maintain books of accounts specifically for this project. Books of accounts will include a main cash book, and ledgers, fixed asset registers, and contracts register. The Head of the Finance Unit of the PMU of MoE holds a Master’s degree in accounting graduate with over twenty years’ experience working on World Bank supported projects. The MoE is working on filling the vacant position of the FM Office in the Unit. The Finance Unit of the PIU of EDSA is headed by a qualified accountant with over four years’ experience with World Bank supported projects assisted by an Accounting graduate also with over four years’ experience with World Bank supported projects. 8. The accounting systems will contain: (a) a chart of accounts and a coding system capable of capturing transactions classified by project components and disbursement categories as well as against budget lines; (b) use of the cash or modified cash method of accounting; (c) a double entry accounting system; and (d) the production of annual financial statements and quarterly unaudited IFRs in a format acceptable to IDA. The accounting policies and procedures manuals will include the project financial transactions procedures at each of the implementing agencies. The Manuals will contain the necessary internal controls including internal checks and segregation of duties. 9. Internal control and Internal Audit. The Internal Auditor recruited under this project will carry out periodic internal audit reviews of project’s activities of both implementing agencies and share copies of their report with the World Bank. Page 49 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) 10. Segregation of duties, and full compliance with the provisions of the PIM, especially as pertaining to internal control aspects, will remain a key ingredient in the implementation of the expenditure processing activities at the Finance Unit of the PMU of the MoE and the Finance Unit of the PIU of EDSA and the implementing and executing agencies during the life of the project. 11. Governance and Anti-Corruption. The World Bank’s Anti-Corruption Guidelines (“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) apply to this operation. Sections of these guidelines, especially those relating conflict of interest, procurement and contract administration monitoring procedures, procedures undertaken for replenishing the Designated Account and use of the project’s asset shall be provided as an annex to the project’s FM Procedures Manual. Additional mitigation measures will include advocating good governance, close monitoring and spot checks by the internal audit units of the implementing entities, as well as enhanced social responsibility by the GoSL and implementing entities. 12. Bank Accounts: A Designated Account (DA 1) denominated in US dollars will be opened and maintained by the EDSA for IDA grant to finance activities implemented by EDSA, a second Designated Account (DA 2) opened by MoE for IDA grant to finance activities implemented by MoE, and a third Designated Account (DA3) opened by MoE for PHRD grant to finance activities implemented by MoE. 13. Disbursement Arrangements. The Report – based disbursement method will be used as a basis for the withdrawal of credit and grant proceeds. A forecast of the first six months’ expenditures will form the basis for the initial withdrawal of funds from the Credit, and subsequent withdrawals will be based on the net cash requirements. The project provides for the use of ‘advances, reimbursements, direct payment, and special commitments’ as applicable disbursement methods, and these will be specified in the disbursement letter. 14. Supporting documentation will be retained by the implementing agencies for review by the IDA missions and external auditors. The Recipient will be obligated to refund the World Bank for any ineligible expenditure paid from the Designated Accounts. The Recipient may be requested to refund the World Bank for the amounts advanced to the Designated Accounts if these remain inactive for more than six months. As reflected in the Financing Agreement, the World Bank may suspend disbursement of funds if reporting requirements are not met. The disbursement amount by each category is summarized below. Table 1.3: Disbursements by Categories Category Amount of the Grant Allocated Percentage of Expenditures to be (expressed in SDR) Financed (inclusive of Taxes) (1) Goods, works, non-consulting 25,550,000 100% services, consulting services (including supply and installation of electrification equipment), Training, and Operating Costs for Parts A and C.2 of the Project Page 50 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) (2) Goods, consulting services 6,650,000 100% (including supply and installation of mini-grid and solar system equipment) Training and Operating Costs under Parts B.1 and C.1 of the Project (3) Goods, consulting services 2,800,000 60% (including supply and installation of mini-grid and solar system equipment) Training and Operating Costs under Part B.2 and B.3 of the Project TOTAL AMOUNT 35,000,000 15. Financial Reporting Arrangements. The Finance Unit of the PMU of MoE will be responsible for the preparation and submission of quarterly Interim Financial Reports for the project, to be submitted within 45 days after the end of the quarter to which they relate. It will also be responsible for the preparation of the annual financial statements for the fiscal period to which they relate and having them audited. The information in these reports will be clearly linked with the chart of accounts for the project. The Finance Unit of the PIU of EDSA will prepare financial reports in respect of the activities of EDSA and will, not later than 30 days after the end of the quarter, forward same to the Finance Unit of the PMU of MoE for consolidation of the reports and submission to the World Bank. 16. The following quarterly IFRs and annual Financial Report will be produced: (a) a statement of sources and uses of funds for the reported quarter and cumulative period from project inception, reconciled to opening and closing bank balances; and (b) a statement of uses of funds (expenditures) by project activity/component and disbursement category, comparing actual expenditures against budget, with explanations for significant variances for both the quarter and cumulative period. The amounts presented should be reported for each financing account and expenditures which are reported by EDSA should be shown separately. 17. The annual financial statements should be prepared in accordance with International Public Sector Accounting Standards (which inter alia include the application of the cash basis of recognition of transactions) and International Standard on Auditing within 6 months after the end of each fiscal year. 18. The Financing Agreement will require the submission of audited financial statements to the World Bank within six months after the end of each financial year. These Financial Statements will comprise: a Statement of Sources and Uses of Funds/Cash Receipts and Payments, which recognizes all cash receipts, cash payments, and cash balances controlled by the project entities and separately identifies payments by third parties on behalf of the project entities: (a) statement of Sources and Uses of Funds/Cash Receipts and Payments, which recognizes all cash receipts, cash payments, and cash balances controlled by the project entities and separately identifies payments by third parties on behalf of the project entities; Page 51 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) (b) a comparison of budget and actual amounts either as a separate additional financial statement or as a budget column in the statement of cash receipts and payments; (c) the Accounting Policies Adopted and Explanatory Notes. The explanatory notes should be presented in a systematic manner with items on the Statement of Cash Receipts and Payments being cross-referenced to any related information in the notes. Examples of this information include a summary of fixed assets by category of assets and listing individual withdrawal applications; and (d) a Management Assertion that IDA funds have been expended in accordance with the intended purposes as specified in the relevant World Bank legal agreement. 19. Indicative formats of these statements will be developed in accordance with fiduciary requirements and agreed with the Country FMS. 20. External Audit Arrangement. The Audit Service Sierra Leone (ASSL) is by law responsible for the audit of all government finances and projects. However, in view of the prevailing capacity constraints, it is likely that the ASSL could outsource such service to a private firm of auditors with qualifications and experience acceptable to the IDA. The Finance Unit of the PMU of the MoE will be responsible for engaging an external auditor prior to the end of the reporting period with TORs acceptable to IDA. The cost of the audit will be financed from project proceeds. 21. FM Action Plan. Table 1.4 below shows the FM action plan for the project. Table 1.4: Agreed Action Plan Action Date due by By Whom i. Subsidiary Agreement between GoSL and By project effectiveness GoSL / EDSA EDSA to implement Component 1 and Subcomponent 3 (b) of the Project ii. Recruitment of a FMS. June 30, 2021 MoE’s PMU iii. Recruitment of Internal Auditor August 31, 2021 MOE’s PMU 22. Conclusion of the Assessment. The conclusion of the assessment is that the MoE’s PMU and EDSA’s PIU have adequate systems to manage the IDA project funds. The overall FM residual risk of the project is ‘Substantial’. Procurement and Technical Aspects 23. The World Bank procurement specialists will regularly participate in implementation support missions to assist in monitoring procurement procedures and plans. The World Bank team will include World Bank staff engineers, complemented with specialized expertise, depending on the nature and scope of each component, to review project technical designs, specifications, and proposals. Field visits will be carried out to the construction sites to monitor progress, including E&S safeguard implementation. During the regular implementation support missions, the PPs will be updated at least once each year (or more often as required to reflect the actual project implementation needs) and post procurement reviews will be carried out at least once annually. Page 52 of 97 The World Bank Enhancing Sierra Leone – Energy Access Project (P164331) 24. The World Bank undertook a procurement capacity and risk assessment of MoE and EDSA during the preparation of the project to check their readiness and capacity to undertake procurement under the project. The procurement risk rating using Procurement Risk Assessment and Management System is Substantial as staff are not familiar with the IPF regulations, which the project will be using, including use of STEP; there are no adequate procurement staff within the PIUs to implement the number of activities in the project; and contract management was not properly handled in the past leading to excessive delays in completion of contracts. Table 1.5 lists the risks that have been identified under the project, and the mitigation measures that have been proposed. Page 53 of 97 The World Bank Table 1.5: Identified Procurement Risks and Proposed Mitigation Measures S. Risk Factor Risk Mitigation Measure Time Frame Responsibility No. Impact Likelihood 1 Fiduciary risk relating to Major Unlikely Recruit dedicated procurement specialists experienced in World Before MoE/EDSA main principles of the Bank Procurement Regulations project World Bank Procurement effectiveness Guidelines not being • Attend training on World Bank procurement. Project MoE/EDSA/World followed • Conduct training on new World Bank procurement procedures. duration Bank • Conduct regular supervision support and monitoring. 2 Record keeping and Major Unlikely • Design and maintain a robust procurement records system. Project MoE/EDSA documentation not • Use STEP to upload, submit, and store all procurement related duration maintained data. 3 Delays in completion of Major Likely Ensure bulk procurement of meters and supply to contractors for Project EDSA contracts due to capacity installation. duration constraints of contractors to procure connection materials 4 Inefficiencies and delays Major Likely • Conduct regular monitoring through the PP. Project GoSL and World in procurement process • Ensure timely preparation of ToRs and specifications for Duration Bank especially preparation of requirements. ToRs and schedule of • Train technical staff in the preparation of ToRs and bidding requirements/technical documents. specifications • Sensitize to prioritize meetings for approving procurement decisions. Engagement of TA for network reticulation planning, design, and August 31, EDSA preparation of bill of materials 2021 • Correct procurement packages to ensure attractiveness of Project expected contracts. duration • Ensure fair bidding periods, terms of contract, and timeliness in payment. • Encourage standardization of specifications for requirements and use of generic specifications. Page 54 of 97 The World Bank S. Risk Factor Risk Mitigation Measure Time Frame Responsibility No. Impact Likelihood 6 Contract management Major Likely • Ensure users are clearly identified for each contract signed. Project MoE/EDSA/World not properly fulfilled • Train users and procurement staff in contract management. duration Bank • Prepare Contract Management Plans for complex contracts and Contract Implementation Schedules for all contracts. • Use Civil Society Organizations (CSOs) for tracking delivery of contract deliverables. 7 Procurement staff Major Likely Principal Secretary to continue dialogue with the Government to Project MoE/EDSA turnover in government retain trained staff in the PIU. duration common service 8 Fraud and corruption Major Likely • Disclose the PP. Project MoE/EDSA/World risks (including collusion • Ensure evaluation team members sign Declaration of Interest duration Bank and outside interference or Oaths of Secrecy. in contract processing) • Disclose contract awards. • Disclose fraud and corruption incidences. • Conduct regular reviews such as post procurement review, internal audit, and external audit. 9 Late hearing and Major Likely • Enforce rules and regulations to fast-track hearing and Project MoE/EDSA/World resolution of complaints resolution of complaints. duration Bank • Disclose complaint redress procedure available in the Public Procurement and Disposal of Assets Authority (PPDAA). • Produce quarterly reports of all complaints received and actions taken. • Use STEP to register and track complaints. Page 55 of 97 25. Approach to market. Based on experience and available local market, the following threshold (Table 1.6) will be used for open national/international and RFQ bidding: Table 1.6: Procurement Methods and Prior Review Thresholds Prior Review Threshold in (US$ '000) Procurement Method s Thresholds (in US$'000) Consultants Single Source Works Goods, IT and non-consulting services Shortlist of National & Direct Consultants Contract Goods, IT Firms Individuals Open Open RFQ/ National Open Open RFQ/ National Consulting Engineering RISK RATING Systems+ Non International National or Shopping International National or Shopping services & construction Works Con. Serv or NCB or ICB NCB supervision International Competitive Bidding (ICB) SUBSTANTIAL ≥US$10,000 ≥US$2,000 ≥US$1,000 ≥US$300 ≥US$100 ≥15000 <15000 ≤200 ≥3000 <3000 ≤100 <300 ≤500 26. An open, competitive approach to the market is the World Bank’s preferred approach as it provides all eligible bidders/proposers with timely and adequate advertisement of project requirements and provides equal opportunity to provide the required goods or services. The use of World Bank SPDs for contracts under Open International Bidding Procedures beyond thresholds that will be defined in the PP will be mandatory. For procurements involving national competition below the defined thresholds, the GoSL Procurement Law and associated bidding documents, which have been reviewed and found acceptable by the World Bank, would be used with exceptions stipulated in the PPSD and textual part of the PP. 27. Requirements for national open competition shall include the following: (a) the procurement opportunity is openly advertised at the national level; (b) the procurement is open to eligible firms from any country; (c) the RFB/request for proposal shall require a signed acceptance at the time of bidding to be incorporated in any contract confirming compliance with the World Bank’s Anticorruption Guidelines including the World Bank’s right to sanction, inspection, and audit rights; (d) procurement documents include provisions, as agreed with the World Bank, intended to adequately mitigate against environmental, social (including sexual exploitation and abuse and GBV), health and safety risks and practices; (e) contracts should have appropriate allocation of responsibilities, risks, and liabilities; (f) contract awards should be published; (g) the World Bank reserves the right to review procurement documentation and activities; (h) an effective complaints mechanism must be in place; and (i) records of the procurement process should be maintained. Other national procurement arrangements such as limited/restricted competitive bidding, RFQs/shopping, and direct contracting are consistent with the World Bank’s Core Procurement Principles, Anticorruption Guidelines, and Sanctions Framework and justified in the PPSD. 28. All procurement of goods and non-consulting services above US$3 million will use International Competitive Procurement. Goods to be procured will include various electricity connection materials and IT-related equipment. All items to be procured are in the PP. 29. Selection methods. For goods, works, and non-consultancy services, RFB and RFQ will be used as appropriate. For consultancy services, the preferred method would be Quality- and Cost-Based Selection (QCBS); however, other methods including Direct Selection would be used, as stipulated in the PP. For National Open Competitive Procurement, NPPs will be used, subject to conditions laid down in the PP. 56 30. MoE and EDSA shall publish on the World Bank’s website, their own websites, and in at least one newspaper with national circulation the PP, its updates, and all awarded contracts. Details of contract awards shall also be published though STEP in accordance with the World Bank Regulations and using World Bank templates. Procurement Monitoring Reports shall be submitted on a quarterly basis as part of the quarterly Project Progress Reports. 31. MoE and EDSA shall maintain contract registers and adequate records of all procurement processes—contract by contract. Each contract file shall contain the complete paper trail of procurement processes. 32. Contract strategy. Goods, services, and civil works will be packaged in economical packages to attract bidders who are qualified and can offer good prices and complete contracts within the stipulated period resulting in value for money. The package for connections densification shall be split into bulk procurement of connection materials to mitigate the risk of poor quality of materials procured by contractors as well as the risk of delaying the connections due to challenges that may be faced by potential contractors in procuring the materials due to inadequate capacity. 33. A PP has been developed that includes the summary of the procurement arrangements for the contracts covering the first 18 months of project implementation. Under the project PP, no contract has been identified as complex requiring a mandatory Contract Management Plan. Table 1.7: Procurement Plan a) Goods (Supply and Installation and IT Equipment), Non-Consulting Services S Ref Description Estimated World Selectio Expected Expected Expected date / No. Cost in Bank n date of date of bid of contract N US$ Oversight Method Publication opening sign (million) (Prior/Post s of IFB Review) 1 Distribution 16.0 prior ICB 30/09/2020 30/11/2020 15/04/2021 network expansion in Waterloo area 2 Connecting 11.5 Prior ICB 01/02/2021 01/04/2021 10/01/2022 lines for Kailahun, Kabala and Pujehun 3 Meters and 2.5 Prior ICB 15/06/2021 15/08/2021 15/11/2021 service lines 4 Distribution 4.0 Prior ICB 15/07/2021 15/09/2021 30/01/2022 network expansion in Makani, Magbraka and Koidu 5 PV system and 2.0 prior ICB 15/4/2021 15/06/2021 15/11/2021 storage for Moyamba PV systems and 4.0 prior ICB 15/10/2021 15/12/2021 15/04/2022 network for mini grids 7 PV systems for 3.0 Prior ICB 06/01/2021 08/01/2021 02/15/2022 health and schools (1) 57 8 PV systems for 2.7 Prior ICB 10/01/2021 12/01/2021 05/01/2022 health and schools (2) b) Consultancy Service S/N Ref Description Estimated World Bank Selection Expected Expected Expected No. Cost in Oversight Methods date of date of date of US$ (Prior/Post Publication proposal contract sig Review) of REOI opening 1 Site 1.0 Prior QCBS 11/31/2020 01/15/2021 04/01/2021 supervision and construction management M&E Aspects 34. In addition to monitoring the impact of the project on the ground, the World Bank team will regularly review the overall sector performance as a result of all the investments in the sector. Financial Management Aspects 35. FM supervision will start by assessing the progress of the PMU staffing and reviewing the plan in place to execute disbursements following FM guidance. This supervision will take place before contracts are awarded in case improvement measures need to take place before disbursement. The FM supervision will also review quarterly progress and financial audits. A field-based FMS will dedicate at least eight weeks per year to the project for implementation support. Environmental, Social, and Gender Aspects 36. Environmental safeguards support will include regular visits to project areas and the monitoring of mitigation measures. During construction, monitoring is necessary to ensure compliance with E&S safeguards related to the infrastructure projects. Senior E&S safeguard specialists from the region will supervise and support the implementation of the project and contribute to building the capacity of the client. The World Bank’s gender specialist will provide advisory assistance to support the development of the gender-targeted interventions. Overall Implementation Support Needs 37. The World Bank team should be composed of a mix of skills and experience for successful project implementation. Tables 1.7 and 1.8 outline the expected staff weeks and travel required to make sure the actions and schedule are appropriately resourced. Table 1.8: World Bank Implementation Support Time Focus Skills Needed Resource Estimate (US$, thousands) First 12 Preparation of procurement documents Engineering, procurement, FM, 200 months environmental, social, and Implementation of ESIA and RAP gender 58 Time Focus Skills Needed Resource Estimate (US$, thousands) 12–48 Review of progress in construction and Engineering, sector regulatory 500 months capacity building, review of sector technical and planning, M&E specialist, and financial performance, procurement, M&E, financial analyst, environmental, safeguards, and FM and social Table 1.9: Skills Mix Required Number of Number of Trips Skills Needed Comments Staff Weeks per Year Team leaders 12 4 Off-grid energy specialist 3 2 Financial sector specialist 4 2 Procurement specialist 6 2 Field staff FMS 5 0 Field staff Environmental specialist 6 2 Field staff Social specialist 6 2 Field staff Gender specialist 4 2 From headquarters/region Specialized technical experts 2 As required — Administrative support 3 0 Field staff 59 ANNEX 2: Detailed Project Description 1. The PDO is to increase electricity access in Sierra Leone. The proposed project’s components are: (a) electrification of to towns and communities through grid connection; (b) electrification through mini-grids and stand-alone solar PV systems; and (c) human capital development and project implementation support. Table 2.1 provides the overall cost estimates by the components. Table 2.1: Project Costs by Components Components Implementing Amount (US$, Agency millions) Component 1: Electrification of towns and communities through grid EDSA 35.0 extension • Distribution network expansion and customer connection 19.0 • 66 kV sub-transmission line 9.5 • 33 kV distribution lines to link with transmission network 3.0 • Meters 2.5 • Site supervision and construction management consultant 1.0 Component 2: Electrification through mini-grid and standalone solar MoE 12.7 Subcomponent 2 (a): Installation of PV mini-grids with battery storage 6.0 capacity Subcomponent 2 (b): Installation of solar PV systems for health facilities 5.7 and schools Subcomponent 2 (c): Provision of TA for market assessment, capacity 1.0 building, result M&E Component 3: Human Capital Development and Project 5.0 Implementation Support Subcomponent 3 (a): Implementation support to MoE MoE 3.5 Subcomponent 3 (b): Technical advisers, consulting services and training EDSA 1.5 TOTAL 52.7 Component 1: Electrification of towns and communities through grid extension (US$35 million IDA) 2. The component consists of three types of main activities: (a) three segments of sub- transmission and distribution lines of 66 kV, 33 kV and shield wire with a total length of about 160 km to connect the distribution networks in three districts headquarter towns (Kabala, Kailahun, and Pujehun) to the 225 kV transmission line network. The GoSL is financing the construction of the distribution networks in the three towns and has selected the contractors through a competitive process and signed the contracts. Site mobilization and construction activities already commenced in some towns as of October 2020. The GoSL initially planned to provide electricity through liquid fuel generation units. If these towns are not connected to the transmission network, the customers would be served by small liquid-fuel generation units, which are costly, polluting and unreliable due to frequent shortage of fuel and spare parts; (b) the expansion of the distribution networks in Waterloo, Makani, Magbraka, and Koidu, including several adjacent communities to provide electricity to new customers; and (c) the provision of consulting services to assist EDSA for site supervision and construction management of the distribution network extensions and the connecting lines. 3. The scope of sub-transmission and distribution lines includes: (i) a single-circuit 33-kV distribution line of about 35 km, including a 15 MVA 33/11-kV transformer, connecting the distribution network in Kabala with the 225/33 kV Fadugu substation of the CLSG line; (ii) a single- circuit 66 kV sub-transmission line of about 100 km, including a 66/33/11 kV transformer of 20 MVA, connecting the distribution network in Kailahun with the 225/66 kV Kenema substation of the CLSG line (the general routing of the 66 kV line is selected to pass through four major towns and provision will be made for adding transformers to serve these towns in the future); and (iii) a single circuit 33 kV distribution line of about 25 km connecting the distribution network in Pujehun with the main grid. 60 4. All the lines will be single pole with 240 mm2 ACSR conductors constructed largely along the existing public roads. The selection of voltage levels, number of circuits and other parameters for the connecting lines takes into consideration the length of the lines, the expected power demand of the towns in the future, and the costs of different options. The final selection is to have the least-cost option which would ensure the line would be able to meet the expected maximum demand over the next ten years with acceptable technical standards. For the Kailahun-CLSG line, both single-circuit and double-circuit 33 kV line would have unacceptable voltage drop at the expected maximum demand and a 22 5kV single-circuit line would be too costly for the expected demand. The precise route selection and design of the connecting lines will be completed following detailed survey. The 66 kV and 33 kV lines will mostly connect one town to another and pass sparsely populated areas. The selection of line routings will aim to avoid any ecologically sensitive or protected areas and the relocation of residential houses and, if possible, be sited along existing public roads to minimize E&S impacts. The lines would be mounted mostly on poles (concrete or steel tubular) which have very small footprints (≤ 1m dia.) or on steel lattice structures (≤ 4m dia.) where land space is not a constraint. All 33 kV lines would have a 24-band OPGW as shield wire not only for use by the utility for their communication and control purposes but also for public use to support the digitization efforts of the Government. The distribution networks are all located in towns and big communities. 5. The scope of the distribution network expansion will support the expansion of the distribution networks in Waterloo and surrounding communities, Makeni, Magburaka, and Koidu to connect new customers. The additional activities in each town and community include: (i) 11-kV distribution lines; (ii) distribution transformers; and (iii) LV distribution lines; and (iv) service lines and connections to and meters for households, commercial, industrial users and public institutions. The 11 kV lines will be a standard design of 50 mm or 100 mm2 aluminum conductor steel-reinforced (ACSR) conductors. The LV lines will be aerial bundled cable (ABC). The distribution transformers will be in small capacity of 50 kVA to 250 kVA with a buffer of 500-700 meters so that all customers are located closer than 500 meters from the distribution transformers to avoid lengthy LV lines and voltage drop; The expansion program in Waterloo and surrounding communities, Makeni, Magburaka, and Koidu is expected to provide new electricity access to about 38,300 residential customers and 7,700 industrial, commercial and public institutions and the connecting lines are expected to benefit about 4,727 residential customers and 950 industrial, commercial customers and public institutions initially through the provision of reliable grid electricity. The maximum demand from the newly connected and existing customers is expected to be about 22 MW, which is all expected to come from import through the CLSG line to be commissioned before June 2021. Table 2.2: Number of Customers to be Added or Connected to the Grid Number of Customers to be Added or Connected to the Grid Towns Total Population No of Household No of HH connected No of HH to be connected (HH) to the grid under the Project* Kabala 17,948 2,991 0 1,455 Pujehun 8,850 1,475 0 738 Kailahun 18,411 5,068 0 2,534 Waterloo 320,316 53,386 0 30,000 Makeni 124,634 20,772 12,344 2,850 Magburaka 40,313 6,720 1,050 2,300 Koidu 124,662 20,777 2,904 3,150 61 Component 2: Electrification through mini-grid and standalone solar systems (US$12.7 million, of which US$10.0 million IDA and US$2.7 million PHRD) 6. Due to the very low access rate in the country, the Government will focus on electrification of major towns and communities close to the transmission lines in the short to medium term through grid extension. There is a vast part of the small towns and rural communities of the country which is not likely to be connected to the main grid for at least ten years. This provides a huge market for off- grid solutions. The mini-grid option provides a cost effective solution for small towns and large communitees and settlements. The stand-alone PV system provides a very flexible and cost-effective solution for many homes, schools, clinics and productive businesses. There are private sector players which are very interested in and active in the areas of homes and productive businesses. But it is a relatively new market with many challenges, including high perceived risk, very limited access to finance, lack of reliable service providers for maintenance etc. The component will address the challenges to opening-up and scaling up the market in the productive sector by the private sector and directly support the the provision of solar electricity for health facilities and schools as electricity provision for these public instituions would need to be done through public funding. The component includes three subcomponents: 7. Subcomponent 2 (a). Installation of PV mini-grids with battery storage capacity (US$6.0 million IDA). This subcomponent includes the construction of a solar PV plant with battery storage capacity in the town of Moyamba and the construction of solar PV-based mini grids in several large communities. Moyamba is selected as it is one of the two district heardquarter towns which could not be economically connected to either the CLSG line nor the Indian Export-Import (EXIM)-Bank line. The other town Bonthe is smaller and is being electrified through support of FCDO grant. The GoSL is financing the construction of the distribution network in Moyamba and has selected the contractor through a competitive process and signed the contract. It is expected that construction activities will commence shortly. The GoSL planned to provide electricity through liquid fuel generation units. If these towns are not connected to a solar mini-grid, the customers would be served by small liquid fuel generation units, which are costly, polluting and unreliable due to frequent shortage of fuel and spare parts. 8. The subcomponent will also include the installation of solar PV capacity and battery storage as well as the distribution networks in several large communities. The selection of the communities will be based on the minigrid feasibility study which are being carried out by USTDA. In addition to the usual factors which are considered in the selection of the minigrid sites, high emphasis wil be put on the avaialbility of big industrial/commercial entities to anchor electrcity demand and provide constant revenue. Based on the initial analysis and also the expereince of the FCDO projects, it is expected that 8-12 mini-grids would be financed under the subcomponent. The subcomponent is expected to benefit about 3,000 households and 450 industrial and commercial businesses. 9. Moyamba is a small town in the south of Sierra Leone with approximately 11,500 inhabitants. This section describes the approach and the results of sizing a solar-battery-diesel hybrid power system that would be utilized to power the mini-grid. The process of estimating a suitable system size includes the derivation of a load profile, a decision on the technology to be utilized with related capital costs and O&M costs, as well as a decision on the optimization procedure. The hybrid power system design software HOMER Pro is then used to optimize the design. The load profile is the single most sensitive assumption in the power system design. Two different approaches have been used to estimate the load profile: 62 Figure 2.1: Approach to Estimate Load Profile Derivation of load profile Mini-Grid Sizing Technology incl. Battery, PV to be and Diesel utilised Genset using HOMER Pro Decision on optimisation procedure 10. Derivation of load profile approach 1 – Scaling up based on experience. The building structures in Moyamba were counted utilizing GIS software, with 2,295 structures having been identified in the community. Further to the number of overall structures, 57 specific structures, such as schools etc. are known from an on-ground survey. These specific structures are deducted from the overall count of structures. Estimating that approximately 8 percent of the remaining structures in the community are various forms of businesses, this yields a final number of 180 businesses and 2,058 households in Moyamba. For the estimation of the load profile, it is further assumed that all businesses and 70 percent of households will initially connect to the mini-grid. Of these households, two thirds are classified as “small” households, one quarter as “medium size” households and 10 percent as “large” households. From the UNOPS/FCDO Sierra Leone mini-grid project and other projects in SSA, consumption data of different customer groups in mini-grids after full development of demand is known. The following table provides an overview of the types of connections and their total daily demands in load profile approach 1: 63 Table 2.3: Types of Connections %age of Average kWh/day for Total type of kWh/day for specific type kWh/day for Category Type category Number category per unit specific type Small Household 65% 937 0.05 49.17 Households Medium Household 25% 360 0.18 0.31 112.13 Large Household 10% 144 0.72 103.75 Small shops 80% 144 0.71 101.52 Shops 1.22 Larger shops 20% 36 3.26 117.36 Hospital Hospital 1 2.33 2.33 2.33 Church 6 0.50 3.00 Religious Institution 0.50 Mosque 5 0.50 2.50 Primary School 5 0.70 3.48 School 0.70 Secondary School 4 0.70 2.78 Bars 12 1.50 18.00 Restaurant and Bar 1 3.00 3.00 Telecom transmitter 2 96.00 192.00 Special commercial 10.36 Ware house 5 1.20 6.00 Water works 1 1 1.00 Fuel station 1 8.00 8.00 Police station 1 0.65 0.65 Government Government Quarter 1 1.02 1.20 1.20 Police Quarter 1 1.20 1.20 Other Other small clubs 11 1.00 1.00 11.00 Distribution Grid Losses 8% 59.20 TOTAL 1,678 799.27 11. For each of the categories, load profiles were generated, with the overall load profile based on approach 1 being a load profile with high volatility, considering the high number of household users. The resulting load profile is shown as follows: Figure 2.2: Approach 1 Load Profile - Scaling up Based on Experience Approach 1 Load Profile - Scaling up based on experience 0,140 0,120 0,100 0,080 MWh 0,060 0,040 0,020 0,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Time of Day 64 12. Derivation of load profile approach 2 – Scaling down from Makeni. The GoSL has provided some load data from Makeni. According to structure counts using satellite data, Makeni has approx. 26,800 structures, while Moyamba has 2,295 structures. Through scaling down, it can be assumed that Moyamba has a load which is at most 8.6 percent of the load of Makeni (linear down-scaling). As Makeni is a large town with many customers of various types, the concurrency factor is low resulting in a low volatility of the load profile. This low volatility has been transferred to the much smaller Moyamba when down-scaling the load profile. Probably, there is also more industry in Makeni than in Moyamba. From the data, the following load profile was derived: Figure 2.3: Approach 2 Load Profile - Scaling Down from Makeni Approach 2 Load Profile - Scaling down from Makeni 0,400 0,350 0,300 0,250 MWh 0,200 0,150 0,100 0,050 0,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Time of Day 13. Some conclusions from derivation of load profiles. Considering that the diversity of electricity users, as well as the industrial use of electricity, would take up a much greater fraction of the overall electricity consumption in Makeni than in Moyamba, the scaled-down load profile from Makeni very likely underestimates the volatility of electricity demand that would be experienced in Moyamba. In addition, the specific demand of the average customer is usually higher in large towns than in small towns. Thus, the up-scaling approach is considered more realistic for the initial (year 1) power consumption in Moyamba, while the down-scaling approach can be considered a scenario for the maximum power demand that Moyamba would ever experience. For further simulations, it has therefore been assumed that approach 1 yields the demand of Moyamba in year 1 after commissioning, and that approach 2 yields the maximum demand of Moyamba over the lifetime of the project. 65 Figure 2.4: Estimated Demand Development in Moyamba over Lifetime Estimated Demand Development in Moyamba over Lifetime 0,400 Year 1 Half way toward max. demand Maximum Demand 0,350 0,300 0,250 MWh 0,200 0,150 0,100 0,050 0,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Time of Day 66 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 14. Assumptions on technology to be utilized. Recent capital costs and O&M data has been obtained from Sierra Leone mini-grid projects to be utilized as input into the HOMER simulations as follows: Table 2.4: Cost Assumption by Components Capital Expenditures (CAPEX) Item Cost Genset US$500/kW PV incl. Support Structure and Solar Inverter US$850/kW Battery Inverter US$570/kW Li-Ion Battery US$554/kWh Lead-Acid Battery US$320/kWh Fixed Construction Cost US$100,000 OPEX Item Cost Genset Operation US$0.05/kWh Diesel Fuel Cost US$1.00/L 15. Both Lithium-Ion and Lead-Acid Battery systems have been modelled. While the majority of small-scale mini grids are still constructed using Lead-Acid (LA) batteries, for this particular project Lithium-Ion (LI) batteries would be considered advantageous, given that: (a) The intention is to build up a relatively large (1 MWh+) battery bank to have a reasonable renewable energy fraction in the project; Large LA battery banks consume a lot of space, while LI battery banks take up a fraction of the same space, considering the comparatively higher depth of discharge for LI batteries as well as energy density; (b) Transport of batteries across rural areas in Sierra Leone is similarly advantageous to be carried out with a comparatively small load, considering rough terrain and high temperatures; (c) While not cheaper in an upfront-cost comparison, LI batteries have significantly longer lifespans than LA batteries; and (d) Depth of Discharge and efficiency is higher in LI batteries compared to LA batteries. 16. Optimization Procedure. Two approaches have been utilized in the optimization procedure: (a) An optimization for least levelized cost of energy (LCOE) which essentially compares the lifetime cost of various systems versus one another and ensures that the overall LCOE is reduced; This approach slightly favors comparatively large diesel gensets which can act as a more “flexible” OPEX-driven generation asset; and (b) An optimization for maximum renewable fraction (95 percent+) which ensures that the renewable fraction of the generated electricity is at minimum at the set level; This approach favors large PV and battery banks, which may be more costly upfront but reduces operational costs; However this approach is not the most cost-efficient overall. 17. Other assumptions. Rate of return on capital has been set at 10 percent (which is un-realistic for Sierra Leone in case of private investments, here the CAPEX will largely be covered by grant, and thus the rate of return would benefit the Government while increasing electricity tariffs. Thus, it has been selected as shown.). It should be noted that distribution assets do not feature in the CAPEX calculation and are additional. However, in the load profiles above it was estimated that distribution losses amount to approximately 8 percent of the electricity distributed into the grid. In the scenarios displayed, it is assumed that time-of-use tariffs have been applied, with lower day-time than night-time tariffs. This results in an overall flattening of the load curve and increase in Page 67 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) day-time usage than if standard rate tariffs were applied, with the majority of commercial electricity usage occurring during day-time hours. It should also be noted that HOMER under-sizes the inverter. Inverters should typically not be smaller than 50 percent of the solar PV size. Therefore, in the recommendations the inverter is set at a more appropriate level. 18. Recommendation for mini-grid implementation. The recommendation is to implement a mini grid which: (a) Addresses the initial electricity demand in Moyamba through 100 percent renewable energy; (b) Can cope with a significant growth in demand up to 50 percent of the maximum anticipated demand, allowing the implementing party to monitor demand growth prior to making additional investments; and (c) Is flexible to be upgraded to a larger system once demand exceeds 50 percent of the maximum anticipated demand. 19. As such, the recommendation is to initially implement a 600-kWp PV system, with an 1,800-kWh LI battery bank and a 300 kW inverter for a cost of approximately US$1.83 million (Li-Ion 3 system). Once electricity demand rises, a genset of 220 kW in size can be added to address this demand. This system can cope with growing demand in Moyamba up to more than 50 percent of the maximum anticipated demand, through running the diesel genset more frequently and thereby reducing the renewable fraction. Once 50 percent of the maximum anticipated demand has been reached, an upgrade to a 1,000-kWp PV system with a 3,000 kWh battery bank, a diesel genset of 440 kW and a 500 kW inverter may be considered (Li-Ion 4 system). It is not anticipated that this level of demand will be reached in the first five years of the project. Figure 2.5: Size of PV, Inverter and Genset for Li-Ion 3 and Li-Ion 4 System Size of PV, Inverter and Genset for Li-Ion 3 and Li-Ion 4 System 1200 PV (kWp) and Inverter (kW) size PV Size (kWp) 1000 Inverter (kW) Diesel Genset (kW) 800 600 400 200 Add- 0 On Li-Ion 3 Li-Ion 4 Systems Page 68 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Table 2.5: Cost Breakdown by Components Breakdown of Li-Ion 3 system Li-Ion 4 system component Size Initial Cost Replace- Size Cost (US$) Replace- cost (US$) ment (US$) ment (US$) PV 600 kWp 660,000 - 1,000kWp 1,100,000 - Batteries 1,800 kWh 996,714 897,048 3,000kWh 1,661,190 1,495,080 Inverter 300 kW 171,000 136,800 500kW 285,000 228,000 SUB-TOTAL 1,827,714 1,033,848 3,046,190 1,723,080 Diesel Genset 220 kW 110,000 - 440kW 220,000 - TOTAL 1,937,714 3,266,190 Figure 2.6: Demand Scenarios Total Demand (kWh/day) 7000 Li-Ion 3 system Li-Ion 4 system 6000 5000 kWh/day 4000 3000 2000 1000 0 Year 1 25% of max. 50% of max. 75% of max. Max. Demand Demand Demand Demand Figure 2.7: Electricity Factors under Different Demand Scenarios Li-Ion 3 Li-Ion 4 system system Page 69 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Figure 2.8: System Costs against Demand Factor Costs of Systems 600,000.00 Li-Ion 3 Li-Ion 4 0.8 Operating Cost (mainly fuel) ($/yr) system system 0.7 500,000.00 0.6 LCOE ($/kWh) 400,000.00 0.5 300,000.00 0.4 0.3 200,000.00 0.2 100,000.00 0.1 - 0 Year 1 25% of max. 50% of max. 75% of max. Max. Demand Demand Demand Demand Demand Scenario 20. Tariff Calculation. For the tariff calculations, the latest tariff tool approved by the SLEWRC was used (Version 9.2). The assumptions input into the tariff tool are listed as follows: Table 2.6: Electricity Tariff Estimation Input Value Project Lifetime 20 years Inflation Rate 15% Exchange Rate US$ SLL 10,000 Return on Regulatory Asset Base 0 percent (as all CAPEX is grant-funded) Performance-Related Profit Margin 250SLL/kWh Initial Demand As per approach 1 Growth of Demand Demand in Year 1 is always equal to the “Year 1” demand as outlined above. Four scenarios for demand growth have been derived: 1. Growth resulting in Y5 demand equaling “25 percent of max. demand” 2. Growth resulting in Y5 demand equaling “50 percent of max. demand” 3. Growth resulting in Y5 demand equaling “75 percent of max. demand” 4. Growth resulting in Y5 demand equaling “max. demand” Scenario 1 is considered the most realistic, with other scenarios requiring additional investments in rural industrialization. For scenarios 3 and 4, it would be required to utilize the Li-Ion 4 system from the start of the project to cope with the increase in demand. O&M Costs Assumed US$2.50 per customer per month in O&M costs including overhead for generation assets and general service; US$0.50 per customer per month for payment collection (e.g., mobile money or otherwise); US$0.50 per customer per month in O&M costs for Page 70 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) distribution assets. These costs are reflective of a recent benchmarking of O&M costs carried out by AMDA (Benchmarking Africa’s Minigrids, AMDA 2020). Assets/Reserve account Only the inverters (12 years’ lifetime) and the batteries (eight years’ lifetime) have been entered into the tariff tool, considering that these are the only assets that would require replacement over the lifetime of the project. For these assets, a reserve account mechanism ensures that the operator may put aside revenue for the replacement of these assets. Tariff Indexation It is assumed that from year 3 onwards, the tariff grows by 10 percent on an annual basis. Page 71 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Figure 2.9: Demand Growth Scenario 1 – Up to 25 percent of maximum demand Figure 2.10: Demand Growth Scenario 2 – Up to 50 percent of maximum demand Figure 2.11: Demand Growth Scenario 3 – Up to 75 percent of maximum demand Figure 2.12: Demand Growth Scenario 4 – Up to maximum demand Page 72 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 21. Below, the tariff results for the various demand growth scenarios are outlined. For all scenarios, it is assumed that the mini-grid operator covers 100 percent of the fuel costs and 100 percent of the O&M. The reserve account is activated to ensure that the operator will be able to replace batteries and inverters at the end of their respective lifetime. For scenarios 3 and 4, it has been assumed that the assets in consideration are those of the Li-Ion 4 system. Table 2.7: Electricity Tariff under Different Demand Scenarios Demand Scenario #1 – Up to 25% #2 – Up to 50% #3 – Up to 75% #4 – Up to max. of max of max. of max. demand demand demand demand System Li-Ion 3 Li-Ion 3 Li-Ion 4 Li-Ion 4 Grant for CAPEX incl. connections 100% 100% 100% 100% Resulting Average Tariff for the US$0.48/kWh US$0.41/kWh US$0.41/kWh US$0.39/kWh first five years of the project (covering O&M and the reserve account) Figure 2.13: Typical Tariff Conposition Example Contribution to Tariff - Scenario 2 29% 34% Cost of Fuel Other O&M Performance Related Profit Margin 6% Reserve Account Amount 31% 22. Recommendation for financing structure. Based on the tariff modelling, it is observed as critical to project success to rapidly reach projected demand levels, which can reduce tariff levels required. As such, it is recommended that the capital costs should be 100 percent grant funded, including the customer connections. This will ensure a rapid uptake of demand at the beginning of the project. 23. Subcomponent 2 (b). Installation of solar PV systems for health facilities (US$3.5 million IDA, US$2.2 million PHRD). As of 2016, there were a total of 1,284 and 8,784 primary and secondary schools in Sierra Leone. However, over 72 percent of health facilities and over 77 percent of schools had no access to grid electricity. Page 73 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 24. With the ongoing electrification program through grid extension, more than half of the health and education facilities are unlikely to have grid electricity by 2030. The activities under this subcomponent will aim at installing solar PV systems for about 200 health facilities and about 500 primary and/or secondary school which are not going to be electrified through grid extension or mini-grid in the next five years. Of these health facilities and schools, IDA will finance 120 health facilities and 300 schools, and PHRD will finance 80 health facilities and 200 schools. In addtion, PHRD will finance the supply of solar lanters with phone charge for about 50 school libaries. Depending on the size of the health and education facilities, the solar PV sizes are expected to range from 1 kW to 20 kW with a total capacity of around 2 MW. The systems will not only provide electricity to electrical equipment at the public facilities, but will also power water pumps if a nearby operational borehole is available and/or the workers’ commodities. The selection of the health facilities will be based on a number of factors, including the potential to exend electricity service to nearby villages and communities through the development of mini-grids in the future and possibly the presence of maternity wards. 25. This subcomponent will also develop a sustainability strategy that will not only include the quality assurance frameworks for the solar component base systems to be installed in these facilities but will also cover the design and installations aspects of the systems, the operation and maintenance and the budget provision for the replacement of the components of the systems at the end of their life time Context of the health sector 26. The health system in Sierra Leone is divided into two service-delivery systems: primary and secondary (figure 1). The primary is delivered at four levels with different levels of service, clinical skills, and ability to handle complications. These four levels are: Community Health Center (CHC), Community Health Post (CHP), Maternal and Child Health Post (MCHP), and Community Health Work (CHW). The secondary level delivered at district hospital level and two categories: regional hospitals and district hospitals. 27. The health sector has improved considerably since the end of the EVD epidemic in 2015, thanks to priority given by the GoSL to this sector and to the considerable contribution of donors and other development institutions that are present in the country: World Health Organization (WHO), World Bank, FCDO USAID, UN, and German Agency for International Cooperation (GIZ). 28. Unfortunately, the current COVID-19 pandemic is having and will have a significant impact on the progress made over the past few years in this sector. The GoSL has developed a National COVID-19 Preparedness Plan that serves as the basis for their strategy to fight against COVID-19. The World Bank has provided the GoSL with a fund of US$7.5 million through the Sierra Leone COVID-19 Emergency Preparedness and Response Project (P173803). Other donors are also supporting this initiative. Page 74 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Figure 2.14: Levels of care and hierarchy of health facilities by service provided12 Figure 2: Levels of care and hierarchy of health facilities by services provided 12 Summary Report of the 2017 SARA Plus in Sierra Leon , Ministry of Health and Sanitation, GoSL. 28 Sierra Leone SARA Plus Report 2017 Page 75 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Objective 29. The main objective of the subcomponent is to accelerate access to electricity to off-grid health facilities by supplying and installing solar systems. This will allow the facilities to be fully functional and support the Government in the fight against COVID-19 and addressing other health priorities. To ensure that the supported facilities will be able to provide 100 percent of the service level they are expected to provide, the solar systems will be sized to power water pumps and ensure the access to potable water. For the facilities that also include workers’ housing, the solar home systems will also be provided for basic electricity (e.g., lighting, phone charging, and TV). There are already several ongoing actions from several donors including the World Bank to support the secondary level of the health system, this project will therefore focus on the health facilities providing primary level of service: CHC, CHP, and MCHP. Barriers to be tackled: 30. The main barriers that limit the quality of health care in Sierra Leone are the lack of basic equipment and the lack of access to electricity. By providing access to electricity to the health facilities and the workers’ accommodations, the facility will not only be able to improve the quality of the service provided to its patients (including the provision of night service), but it will also improve the quality of the work environment for the health workers. Attracting quality health workers also represent a key challenge to the sector. Having access to electricity brings many advantages to the quality of life and is expected to help attract more qualified health workers to the rural facilities. Solar systems have already been used in the health sector to provide electricity to health facilities in rural areas. Unfortunately, in many cases, these systems stop working earlier than planned due to lack of maintenance and/or availability of replacement part. This subcomponent with also tackle this sustainability issue. Proposed approach 31. Given the number of donors involved in the health sector in Sierra Leone, it is important to coordinate all the activities of the project with other ongoing and upcoming projects. A local consultant was hired to do an assessment of all the health-related projects and to identify gaps. This preliminary work will be utilized in the design of the project and the selection of the facilities. It will also facilitate the coordination between the different actors, create synergies, and avoid duplication of efforts. 32. Given the urgency due to COVID-19 pandemic, the selection of the facilities is already under way In fact, the recruited local consultant is already assessing the energy needs of the different categories of health facilities in Sierra Leone and identifying the facilities that do not have access to electricity. The selection of the facilities will be separated into two groups: COVID-19 priority health facilities and other facilities. 33. A firm will be recruited, through a competitive process, at the early stages of implementation of the project to develop the sustainability strategy to ensure the functionality of the solar systems for a minimum period of 20 years. It will propose a solution for solar systems already installed in health facilities and another for future systems. It will include but not limited to: (a) Analyses of the cost for operation and maintenance per solar system size over a period of 20 years, including replacement parts; (b) Analyses of the budgeting process of health facilities and proposed solution based on examples from other parts of the world; Page 76 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) (c) For quality assurance the consultant will complement the work already done under existing projects by donors. The developed quality assurance framework will not only cover the equipment’s but also the installation, operation, and maintenance; and (d) Defined process and method for distance monitoring of the solar systems in the health facilities. Table 2.8: Expected Results Direct results • 200 solar systems installed at the priority facilities • Tons of CO2 emissions avoided Indirect results • Improved service level delivery at primary health facilities • Improved quality of care in Sierra Leone • Increased number of health workers willing to move to rural areas • Reduction of the number of emergency cases needing to be transferred to a secondary facility • Improved data collection and communication in the health sector Stakeholders and respective roles • Ministry of Energy: Overall activity coordinator and supervisor through the Director of Energy. o Responsible for all the TAs (procurement aspects, work supervisions, payments, etc.) o Responsible for the M&E of the project • Ministry of Health: o It will also work with closely with the team at and the contractors selected by the MoE. • Private sector: Private sector will play a major role. Since they will be supplying, installing and maintaining the solar systems. The private sector will have to work in close collaboration with all the other parties involved. The Renewable Energy Association of Sierra Leone (REASL) could play a role in the quality assurance framework and the selection for companies. • Beneficiaries: Beneficiaries will be primary level facilities: CHC, CHP, and MCHP. They will also be responsible for the daily operation of the systems. Depending on the outcome of the sustainability strategy, they may also be responsible for the payments to cover maintenance and replacement cost for the systems. This payment may be done directly by the health facility or by another government institutions (e.g., Ministry of Health). Context of the education sector 34. Quality education is considered a key factor in the development of Sierra Leone. One of the key strategic documents for the sector is the Education Sector plan (ESP) 2018-2020 subtitled: “Getting it Right – Service Delivery, Integrity and Learning in Sierra Leone”. This document set several targets and objectives for the sector. Like the health sector, the education sector was heavily affected by EVD epidemic where schools were close for Page 77 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) eight months. The consequences were so significant that the GoSL included an emergency preparedness and response in the ESP 2018-2020 to help mitigate the consequences in case the country faces similar health emergency situations. Today this response readiness should help GoSL mitigate the consequences of the current COVID-19 pandemic. GoSL has a commitment to attain Universal Primary Education (UPE) by 2020. The Government also has a commitment to providing basic education: six years of primary education and three years of Junior Secondary Education (JSS) to all children.13 35. There are a total of 11,615 schools in Sierra Leone, divided into five levels: pre-primary, primary, junior secondary, and senior secondary. The GoSL has set several indicators to help them keep track of the evolution of the quality of education in Sierra Leone and to keep track of the impact of their interventions and the intervention of their development partners. Unfortunately, there are no indicators covering electricity access or energy needs. A national consultant has been recruited to assess the energy needs of the schools that are located in areas with no access to electricity and the solar system size needed to satisfy the energy need. The results of the assessment will help to set more realistic targets to this outcome of this project and the expected results. Objective 36. The main objective of the subcomponent is to accelerate access to electricity for primary and junior secondary schools by supplying and installing off-grid solar systems and by providing solar lanterns (lighting global certified) to students. This will allow the facilities to be fully functional, improve the learning environment and facilitate the distance learning to reduce contamination risks in situations similar to the current COVID-19 pandemic situation. 37. In addition to the main objective, one of primary objectives is to ensure that the supported facilities will be able to provide 100 percent of the service level expected and be able to provide the same learning environment (at school and at home) to the students and the same working environment to the staffs that are in schools connected to the grid. The solar systems will be sized to also power water pumps (if boreholes are available) to provide potable water for the students and to power the staff housing located in the same premises as the school. 38. There are already several ongoing or upcoming actions from the GoSL and other development partners in this sector. It is therefore important to identify ongoing and upcoming actions in the sector to avoid duplication and create synergies. Barriers to be tackled 39. The main barriers that limit the quality of education in Sierra Leone are the lack of basic equipment and the lack of access to electricity. By providing access to electricity to the schools and the workers ’ accommodations, the schools will not only be able to improve the learning environment for their students but it will also encourage more children to attend the school. Attracting quality teachers to work in rural areas is also a critical challenge for the sector. Having access to electricity in teachers’ housing brings many advantages to the quality of life. Solar systems have already been used in the education sector to provide electricity to 13 ESP 2018-2020. Page 78 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) schools in rural areas. Unfortunately, in many cases, these systems stop working earlier than planned due to lack of maintenance and/or availability of replacement part. This subcomponent with also tackle this issue. Proposed approach 40. Like health facilities, solar systems have often been used as source of electricity for schools in off grid areas in West Africa. Unfortunately, due to lack of maintenance and proper budgeting for the replacement parts, these systems often stop before the system lifespan and the facility finds itself back in the dark. These systems usually stop functioning shortly after the end of the guaranty period of the company that was responsible for the supply and installation of the solar system. This solar company is commonly selected through a tender process. 41. The main goal of the proposed approach here is to ensure maximum sustainability while increasing the role of the private sector. The private sector will not only play its traditional role of supplier and installer of the solar system, but it will also be expected to participate in the investment and ensure the O&M and replacement parts over a period of 20 years. The level of investment contribution from the private sector will be defined after the sustainability strategy TA has been concluded. The same strategic document will also indicate the government institutions that will/should be responsible for the payments of the service provided by the private sector. This strategy will help define and establish mitigation measure to minimize the risk on investment. 42. Once the minimum level of investments from private sector and the expected roles and responsibilities of each stakeholder have been well defined, a call for expression of interest will be launch for the private sector. Table 2.9: Expected Results Direct results • 500 solar systems installed (US$2 million; 1 MW) at primary and/or secondary schools. • 50 school libraries provided with solar lanterns • Tones of CO2 emissions avoided Indirect results • Improved service level delivery at primary and secondary schools • Improved quality of education in Sierra Leone • Increased number of children in schools • Increased number of teachers willing to move to rural areas • Improve data collections and communication in the education sector Stakeholders and respective roles • Ministry of Energy: Overall activity coordinator and supervisor through the Director of Energy working closely with the MoED. o Responsible for all the TAs (procurement aspects, work supervisions, payments, etc.) o Responsible for the M&E of the project Page 79 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) • Ministry of Education: The ministry will play a key role as they will not only play the leading role in selecting the facilities to benefit from the project but also in the O&M. It will also play a leading role in the definition of the sustainability strategy and in ensuring budgeting to cover O&M and replacement parts on the long term. • Beneficiaries: Beneficiaries will be primary and secondary schools. They will be responsible for the daily operation of the systems. Depending on the outcome of the sustainability strategy, they may also be responsible for the payments to cover maintenance and/or replacement cost for the systems. These payments may be done directly by schools or by another government institution (e.g., MoED). They will be in the front line to verify the quality of the supply and installed material. They will also play a key role in the collection of data for evaluation and monitoring of the systems. 43. Subcomponent 2 (c). Provision of TA for market assessment, capacity building, result monitoring and evaluation (M&E) (US$0.5 million IDA, US$0.5 million PHRD). This subcomponent support the provision of technical advisory services for, inter alia: (a) the carrying out a market assessment and affordability analyses of productive uses in rural areas; (b) raising awareness; (c) building the capacity of rural and urban business communitites, and the private sector in business management specifically focusing on women-led businesses; (d) monitoring and evaluating results on the basis of set targets; and (e) recording experiences and lessons learned. The activities under this subcomponent will support implementation of the activities above and help achieve the intended outcomes. Component 3: Human capital development and project implementation support (US$5 million IDA) 44. This subcomponent Subcomponent 3(a). This subcomponent will support MoE with: (i) procurement of services of a private firm for the operation, maintenance, and future expansion of the mini grid under Component 2; (ii) prepration of a clean cooking investment project; (iv) the strengthening of the institutional capacity of the key stakeholders in promoting and managing the development of renewable energy and in implementing national electrification strategy; (v) strengthening of policy and institutional capacity to reduce gender disparity in energy sector employment and in energy access; and (vi) operational expenditures. 45. The subcomponent will help reduced disparity in access to energy, consumer education and productive uses of energy, women’s employment in the energy sector. The project will aim to close identified gender gaps in Sierra Leone by: (i) reducing disparity of access of poorer urban households and in particular FHHs to access electricity; (ii) assessing which barriers causing lower levels of asset ownership for women and designing targeted programs potentially involving the private sector that enhance women’s livelihoods and success in participating in income-generating activities also through their businesses; (iii) opening opportunities for women to be part of the energy sector workforce thereby potentially also alleviating weak staff capacity at key energy sector institutions; (iv) enhancing women’s health and education outcomes by targeting electrification of social infrastructure that best responds to their needs. The activities could include the assessment of barriers to connection as well as the development and execution of interventions that could successfully address these. In addition, it would also develop a community awareness campaign to inform people in target areas of the benefits and define costs of electricity services, as well as the payment mechanisms, procedures, and safety practices of the electrification process. The interventions and campaign will also promote the productive and efficient use of energy by all customers and will target both male and FHHs but will also pay particular attention to the poorer community members in urban and rural areas that may be reluctant to take advantage of the Page 80 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) electrification opportunity or face barriers to access information. The activities supported under this subcomponent will provide recurring opportunities for consumers to interact with service providers to share their feedback and concerns, and also strengthen the electrification agenda through tackling issues around affordability. 46. The project will support work focused on enhancing women’s employment in the energy sector and work focused on key stakeholders such as MoE and EDSA assessing the barriers women graduates would face in reaching the labor market and specifically within the energy sector. Therefore, aspects around recruiting, retaining and promoting women in the energy sector will also be assessed. Interventions based on this assessment may include, amongst others, institutional policy design and adoption, data collection, HR reforms, tailored recruitment strategies and communication efforts, and skills development. A specific focus will be placed on assessing challenges faced by female engineers in Science, Technology, Engineering and Mathematics (STEM)-focused positions, and identifying the opportunities to overcome the barriers. 47. The project help will address gaps in income and participation in income-generating activities through the completion of an assessment of the barriers and the preparation of an action plan to address these issues. Under Component 1 and 2, new electricity customers and in particular women who are often disadvantaged for access to credit and information would receive support tailored to their needs in order to increase the income of their enterprises and livelihoods. Partnering with female entrepreneurship networks, for example, is key to creating awareness about the opportunities in the sector (e.g., the grants and specific training programs for private sector entities). Once the assessment for the sector has been completed, key indicators will form part of the action plan to ensure progress towards more equitable business opportunities. 48. Subcomponent 3(b). This subcomponent will: (a) improve the capacity of the Project Implementing Entity’s management and staff, and strengthen the governance and management of the Project Implementing Entity to achieve full autonomy and commercialization; (b) improve the network’s resilience to climate disasters, including improving operations and maintenance procedures and enhancing staff capacity; and (c) improve the capacity for management and implementation of environmental and social requirements. Page 81 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) ANNEX 3: Gender Gap Analysis and Action Plan Rationale: Why a focus on gender in energy matters? 1. Access to reliable household energy, clean and efficient cookstoves, and public lighting can reduce energy poverty, and give women and men additional income-earning opportunities. Favoring electrification of social infrastructure can assist in providing for basic needs and can help close gender gaps in education and health. Women, disproportionately undertaking unpaid work can earn income and gain employment from production, distribution, retail, and maintenance of solar appliances, and related after-sales services. Off-grid technologies can also support income earning activities by extending the working day or setting up small businesses that depend on energy access. Economic opportunities and social dynamics affect which of the above can have the highest impact on closing gender gaps and are realistic to be achieved. Sierra Leone Gender Gap Analysis 2. In order to gain insights into key gender gaps, a preliminary analysis was conducted for Sierra Leone. The aim was to summarize gender gaps across multiple data sources and investigate the existence of a link between key gender gaps and the energy sector: 3. Poverty and wealth14: About 25.1 percent of all households in Sierra Leone are female headed. The share increases slightly in urban areas (28.0 percent) and decreases in rural areas (23.2 percent). Despite differences in income (see below) the share of male and female below the international poverty line is roughly the same at 52 percent of all males and 53 of all females. Likewise, the share of male and female in the bottom 40 percent of the income distribution is 40 percent in both cases. However, a gap appears when looking at households by sex of head15. About 47.5 percent of FHHs are below the poverty line compared to 43.8 percent of those male-headed households (MHHs). 4. The composition of wealth quintiles by sex of household head shows little variation nationwide. Of all MHHs, 19.6 percent is in the poorest wealth quintile, while 21.3 percent of all FHHs fall in the same bin. Furthermore, this small gap is reverted in the second wealth quintile. The gap becomes significative when looking at urban or rural populations. Of all rural MHHs, 31 percent is in the poorest quintile, while this figure is 36 percent for rural FHHs. The share of urban MHHs in the richest quintile is 51 percent, compare to 40 percent of all FHHs. The relationship for urban households is inverted in the fourth quintile; however, adding-up both top quintiles still favors males (84 percent of all urban MHHs are in the top two quintiles, while 77 of all urban FHHs are in the same bins). 5. Labor16: According to International Labor Organization data, there are no important gender gaps in the rates of labor force participation. Of the total female working age population, 56.3 percent participates in the labor force, while the same figure is 57.6 for males. Female workers are, however, slightly more likely to participate in part time employment (29.9 versus 24.4 percent) and in the informal sector (94.1 versus 89.6 14 World Bank’s Poverty & Equity Brief, Sierra Leone, 2019. https://databank.worldbank.org/data/download/poverty/33EF03BB-9722- 4AE2-ABC7-AA2972D68AFE/Global_POVEQ_SLE.pdf; DHS program, 2016 MIS, Sierra Leone. https://dhsprogram.com/publications/publication-mis25-mis-final-reports.cfm. 15 Country Report by Sierra Leone (2014) Ministry of Social Welfare, Gender and Children’s Affairs. https://sustainabledevelopment.un.org/content/documents/13190Sierra_Leone_review_Beijing20.pdf page 11. 16 ILOSTAT database. www.ilo.org/ilostat. Page 82 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) percent) and present disproportionately in unpaid work. Specifically, for the energy sector limited sex- disaggregated data is not available for Sierra Leone, but global data indicates that women are underrepresented in both technical and non-technical roles and that the sector is male dominated. For example, a USAID study of 14 electricity distribution utilities found that women made up about 13 percent of the workforce, ranging from one percent in Pakistan to 30 percent in Ukraine. In the renewable energy sub-sector (wind, solar, and wave power) women represent 35 percent of the workforce according to a recent International Renewable Energy Agency (IRENA) study in 2018. There is indication that in Sierra Leone the trends are towards the lower percentages, but baseline assessment is still needed to determine the exact numbers. 6. Income17: United Nations Development Program (UNDP)’s Human Development Report derives the GNI/capita of male and female members of the population based on the ratio of female to male wages, and female and male shares of economically active population. The estimated female GNI per capita is US$1,238, in 2011 PPP, which is 81 percent of the male GNI per capita (US$1,525 PPP of 2011).18 Moreover, holding all other characteristics constant, men earn three times more than women in wage employment, 2.5 times more in self- employment, and nearly double in agriculture.19 7. Electricity access20: On average, male- and female-headed households have almost the same rate of access to electricity, (20.4 percent of MHHs versus 19.9 percent of FHHs). However, the gap favoring males increases substantially in urban areas (48.7 percent of MHHs versus 42.4 percent of FHHs). This gap may be partially explained by differences in wealth. When looking at access rates in urban areas by wealth quintiles, it is FHHs that have higher access rates, particularly in the top quintiles (89.2 versus 84.9 percent in the fourth quintile and 99.6 versus 97.1 in the fifth quintile). However, FHHs are more concentrated in lower wealth quintiles where electricity access rates are lower. Thus, their average access rate in urban areas is lower. As the probability of accessing energy services is lower when a household is poorer, interventions such as targeted rolling funds and other methods that facilitate and accelerate consumer connection will be key in closing existing gaps. 8. Productivity and access to productive resources (including livelihoods): Men own a higher share of agricultural land. From all MHHs, 58 percent owns land versus 49 percent of FHHs. As MHHs encompass 75 percent of all households, the total number that owns land is 3.5 times higher for males. A similar share of male- and female21headed households owns livestock, herds or farm animals, 51.6 percent of MHHs versus 51.8 of FHHs.22 But again, the majority in the number of MHHs makes their absolute number owning livestock 3.0 times higher than that of FHHs. 9. These gaps are partly explained due to customary law and a legal framework that allow sex discrimination for matters of “adoption, marriage, divorce, burial, devolution of property on death or other interests of personal law”. Moreover, widows cannot inherit family or community property. According to the World Bank Systematic Country Diagnostic, only 12.7 percent of widows inherited the majority of their spouses’ 17 ILOSTAT database. www.ilo.org/ilostat 18 UNDP. http://hdr.undp.org/en/countries 19 World Bank, (2018), Sierra Leone Systematic Country Diagnostics http://documents.worldbank.org/curated/en/152711522893772195/pdf/SIERRA-LEONE-SCD-02132018.pdf, pages 66-67 20 DHS program, 2016 MIS, Sierra Leone. https://dhsprogram.com/publications/publication-mis25-mis-final-reports.cfm 22 DHS program, 2016 MIS, Sierra Leone. https://dhsprogram.com/publications/publication-mis25-mis-final-reports.cfm Page 83 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) assets in 2008. This context has significant impact on economic opportunities, as agriculture is the main activity for most poorer households, and there is strong evidence of a link between land tenure security and productive investments in land.23 Limited ownership of assets will affect how women are able to gain access to energy and how they will be able to benefit in case they obtain access. Assessing what these barriers exactly are and how they could be overcome will be key in making women access and fully benefit from electricity services. 10. Financial Inclusion24: According to the Global FINDEX data, there seems to be a gap favoring males in financial inclusion as measured by typical indicators like owning an account (24.8 percent of all males versus 15.4 of all females), borrowing money in the past year (45.3 percent versus 53.1), saved any money in the past year (57.0 percent versus 51.7), and making or received digital payments in the past year (16.6 percent versus 10.1). However, when looking at the sources of loans, most of the gap arises from informal sources, like family and friends. Moreover, males are more likely to have saved during the last year to “start, operate, or expand a farm or business”, but females are more likely to have borrowed for the same goal. Similarly, to asset ownership, access to financing will be crucial in how women benefit from access to energy and whether or not they will be able to undertake income-generating activities and build businesses. Looking at ways to enhance women’s financial inclusion could help in boosting their economic opportunities through productive uses of energy. 11. Entrepreneurship25: The Enterprise Survey collects data from the manufacturing and service industries around the world. In 2017, in Sierra Leone, only 18.8 percent of firms had female participation in firm ownership which is lower than the average in SSA (29.6 percent) and across all countries (35.7 percent). Additionally, the share of firms with a female top manager was 15.9 percent which is close to the regional average (15.4 percent) and in all countries (18.1 percent). 12. Maternal health: Sierra Leone presents the highest rates of maternal and child mortality in the world. According to United Nations HDI indicators, the maternal mortality ratio amounts to is 1.360 deaths per 100,000 live births, which is 2.4 times higher than the average in SSA (550) and triples the figure in Least Developed Countries (433). 13. Healthcare quality and access are among the priority areas according to the World Bank’s systematic country diagnostics (SCD), particularly for maternal and child health services. Poor maternal health and a lack of adequate family planning limit women’s full economic participation. The median age for the first birth in Sierra Leone is 19 years and the average woman has five children. High maternal mortality rates, combined with high fertility, leads to average odds of one in 20 that a woman will die from complications during childbirth. Outcomes are also unequally distributed among women. The fertility rate of women in the poorest quintile doubles the rate of those in the least-poor quintile. In addition, rural areas have more limited access to health services than urban areas.26 Favoring electrification of maternal wards, in particular in rural areas can therefore have a high potential to address these crucial differences. 23 World Bank, (2018), Sierra Leone Systematic Country Diagnostics. http://documents.worldbank.org/curated/en/152711522893772195/pdf/SIERRA-LEONE-SCD-02132018.pdf, pages 68 24 World Bank Findex (2017) https://datacatalog.worldbank.org/dataset/sierra-leone-global-financial-inclusion-global-findex-database- 2017 25 World Bank Enterprise Survey, http://www.enterprisesurveys.org/data/exploreeconomies/2013/uganda#gender 26 World Bank, (2018), Sierra Leone Systematic Country Diagnostics. http://documents.worldbank.org/curated/en/152711522893772195/pdf/SIERRA-LEONE-SCD-02132018.pdf, pages 63 Page 84 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 14. Education27: Even though the country has narrowed the gender gap in primary education, gender disparities persist at the secondary and tertiary levels. In fact, female enrollment at primary level is slightly higher for girls. However, girls begin to drop out at higher rates at the age of 13, generating a gap that widens at the tertiary level. Surveys have shown financial constraints as the main reason for dropping out of school for both sexes, cultural issues are also important restrictions. For example, there are societal preferences for early marriage and childbirth for girls (see above). There is also evidence suggesting girls’ education being less valued. The Sierra Leone’s 2014 Labor Force Survey found that women were more likely than men to respond that they did not go to school because their family did not allow it (34 percent vs. 28 percent) or because education was not valued (17.6 percent vs. 14.6 percent). As a consequence, female students comprise only about one-third of tertiary enrolments with very few opportunities for employment. Encouraging women’s employment in the energy sector could provide much-needed opportunities for skilled graduates and in turn boost participation in relevant education. 15. To summarize, the identified gender gaps that the project could meaningfully address are the following: a) In urban areas, poorer, FHHs have disproportionately lower access to energy; b) Due to lower asset ownership and access to finance and information women can launch and maintain income-generating activities far less often than men; c) Women are often under-represented and left out of the talent pool in the energy sector; and d) Addressing women’s basic needs in health and education are lagging that of men. Entry Points and Potential Actions 16. The project could be leveraged to close the gender gaps identified above by: a) Reducing disparity of access of poorer urban households and FHHs to access electricity; b) Assessing which barriers causing lower levels of asset ownership, financial inclusion and entrepreneurship could be overcome and designing targeted programs potentially involving the private sector that enhance women’ s livelihoods and participation in business-opportunities and income- generating activities in higher proportion; c) Opening opportunities for women to be part of the energy sector workforce thereby potentially also alleviating weak staff capacity at key energy sector institutions; and d) Enhancing women’s health and education outcomes by targeting electrification of social infrastructure that best responds to their needs. 17. The project could improve outcomes for women by its very design of providing access to electricity to poorer households, especially if specificities for enabling their connection are assessed and taken into account during implementation. In addition, the project could focus also on enhancing the productive uses of electricity to increase the income of women’s enterprises and livelihoods. Beyond community benefits, tailored interventions on women’s employment in the energy sector (both technical and non-technical roles) could be implemented to ensure better balance in the energy sector and that the talent pool is enhanced for future benefits, as described in detail below. 27World Bank, (2018), Sierra Leone Systematic Country Diagnostics http://documents.worldbank.org/curated/en/152711522893772195/pdf/SIERRA-LEONE-SCD-02132018.pdf, pages 67 Page 85 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Closing gaps in access to electricity and in productivity (Components 1, 2 and 3) Rationale 18. Electrification efforts can lead to further disparities between women and men as women usually have more difficulties to own land- and productive assets and also to gain access to electricity. FHHs are also more often below the poverty line, as compared to MHHs. In Sierra Leone, of all MHHs, 19.6 percent is in the poorest wealth quintile, while 21.3 percent of all FHHs fall in the same bin. The gap becomes significative when looking at urban or rural populations. Of all rural MHHs, 31 percent is in the poorest quintile, while this figure is 36 percent for rural FHHs. The share of urban male headed households in the richest quintile is 51 percent, compare to 40 percent of all FHHs. The relationship for urban households is inverted in the fourth quintile; however, adding-up both top quintiles still favors males (84 percent of all urban MHHs are in the top two quintiles, while 77 of all urban FHHs are in the same bins). Potential Actions 19. Actions would focus on closing gender gaps between households headed by women and men. Barriers to connection including financial- and administrative ones as well as cultural- or information-related will be assessed to enable the design of targeted interventions such as rolling funds, information campaigns and other methods that accelerate connection of targeted consumers. For example, under Components 1, 2 and 3 the electrification efforts could be accompanied by a community awareness campaign that would aim to inform people in target areas of the benefits and costs of electricity services, as well as other practical details of the electrification process thereby enhancing its outcomes. These activities would provide recurring opportunities for consumers to interact with service providers to share their feedback and concerns, and also strengthen the electrification agenda through tackling issues around affordability. 20. In addition, the assessment and following interventions could be complemented to address issues that can help promote enterprises and livelihoods at the community level by enhancing knowledge of the productive uses of electricity to increase the income of women’s enterprises and livelihoods. Key will be mapping out entry points under the activities under the relevant Components with potential linkages to enhancing agro-processing and food preservation, various manufacturing/industrial industries, such as carpentry and tailoring, and the service sector, e.g., in catering, bars and restaurants that use electricity for lighting, sound systems and refrigeration, as well as for charging mobile phones. Specific activities could include: (a) Supporting country baseline assessments, i.e., defining the target group and obtaining data for consumers/sites; (b) Designing a community awareness campaign to inform people of the benefits and costs of electricity services, as well as the payment mechanisms, procedures and safety practices of the electrification process; (c) Assessing the drivers of productivity gaps and relevant possible interventions to enhance women’s livelihoods through energy access; (d) Designing and implementing comprehensive approaches that enable women to successfully run their businesses with the newly gained access to electricity and to enhance the productive uses of energy in agricultural, industrial and service sectors by e.g., enhancing the knowledge and skills of small and micro-businesses; and (e) Partnerships could be explored with in-country associations, micro-business support entities, aid Page 86 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) agencies and donors, governments, NGOs, private sector firms, and researchers to assess needs and/or to create awareness about the opportunities in the sector e.g., the grants and specific training programs for private sector entities. Addressing basic need of women for healthcare and education (Component 3) Rationale 21. Healthcare quality and access are among the priority areas according to the World Bank’s2018 SCD for Sierra Leone, particularly for maternal and child health services. Sierra Leone indeed presents the highest rates of maternal and child mortality in the world. According to United Nations HDI indicators, the maternal mortality ratio amounts to is 1.360 deaths per 100,000 live births, which is 2.4 higher than the average in SSA (550) and triples the figure in Least Developed Countries (433). Potential Actions 22. The project foresees to promote stand-alone systems for schools and hospitals. The MoE has initiated a stakeholder consultation with localities to identify institutions of this kind that could be electrified. In order to align the project objectives in a way that enhances the closure of the crucial gender gaps that exist in education and maternal health, it is proposed to establish a method that helps to identify the most impactful social infrastructure among candidate sites. Parameters could include number of potential beneficiaries, distance of similar services, and population dynamics/poverty levels in neighboring areas. Enhancing women’s employment in the energy sector Rationale 23. The GoSL provides tuition support for girls at the junior secondary level and to female students who are admitted into science related fields at public universities. However, female students still comprise only about one-third of tertiary enrolments. This persistent gap may be the consequence of an economic decision based on the reality that there are fewer economic opportunities even for educated women. Specifically, for the energy sector limited sex-disaggregated data is available, but global data that is available indicates that women are underrepresented in both technical and non-technical roles and that the sector is male dominated. Potential actions 24. The project could focus on assessing the barriers a graduate would face in reaching the labor market. These include legal barriers preventing women from entering an industry or advancing to certain roles; limited transport and insufficient workplace infrastructure; inadequate institutional SH policies and reporting mechanisms; regressive organizational culture; gender pay gaps resulting from occupational segregation and unequal pay for equal work; and a lack of care services. The intervention could for example collaborate with the MoED, Science and Technology that already has women-focused skills enhancement programs. The study could also look at employment barriers and opportunities for women in the sites where mini-grids will be built and operated. Interventions could be implemented across project components and focus on: (a) Supporting country gender baseline assessments for the energy sector, i.e., collect key baseline data for Page 87 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) each, specifically related to employment in the sector, SH policies, mapping women’s engagement in the mini-grid and renewable energy sector; (b) Assessing skills needed in the energy sector from a demand and supply perspective and relevant HR policies for promoting women’s employment (with a focus on engineering and STEM fields) in the energy sector with key stakeholders such as MoE, EDSA, as well as within the specific institutions (e.g. for institutional policy design and adoption, data collection, HR reforms, tailored recruitment strategies and communication efforts); (c) Designing comprehensive approaches that cut across the life cycle from the school-to-work transition, to mid-career and broader issues around retention and promotion; and (d) Interventions tailored to project realities and in-country context may include e.g., increasing girls’ and young women’s exposure to jobs in the renewable energy sector, vocational programs, unconscious bias trainings, career choice guidance, addressing childcare service gaps, institutionalizing GBV prevention and response mechanism, establishing women’s professional networks and access to upskilling and training/scholarship opportunities. Collaboration could be envisaged with Women Empowerment Through EAP by UNDP to ensure cross-institutional learning. Page 88 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) ANNEX 4: Economic and Financial Analysis Economic analysis 1. An economic analysis has been conducted to assess the welfare gains generated by the project, which is its impact on the wellbeing of the Sierra Leone society as a whole. The analysis has been restricted to the project components that generate benefits for which an economic value can be clearly identified and measured. These notably include benefits associated with the investments under Component 1 and Components 2. Component 3 has been excluded from the analysis due to the difficulty in valuing the economic benefits of TA and implementation support. 2. Rationale for public financing. The rationale for public sector financing for investments in the project is based on the major factor that the access rates in Sierra Leone are very low and electrification initiatives using commercial financing are not considered viable. Experience worldwide confirms that scale-up in electricity access cannot be achieved without substantial and sustained public support because recovery of the capital expenditure associated with the access program through retail tariff and front-end connection charges make access unaffordable to most potential beneficiaries. The project supports a complementary pathway to universal electrification using both public and private resources. The project is also looking at private sector-led initiatives in the off-grid component. Public resources in the form of IDA funding will be strategically deployed to present de-risked opportunities to the private sector. 3. Value added of World Bank’s support. The World Bank has a significant comparative advantage in financing the project given the World Bank’s position to draw upon global experience and expertise areas directly related to the investments and TA in accelerating electricity access. The WBG has supported on-grid and off-grid electrification initiatives in other SSA countries. Lessons and technical expertise from these existing operations can be used for the benefit of the project. The World Bank is also particularly well-positioned to convene development partners and provide coordinated and strategic support to a long-term vision of energy access. 4. Methodology and assumptions. The economic viability of the project has been assessed through a standard cost-benefit analysis. Net benefits for the project were calculated by comparing the costs and benefits in a scenario that includes the project to one that does not. (a) Project life. The economic life of the project is assumed to be 20 years. (b) Discount rate. An economic discount rate of 5.17 percent is assumed applying 2 times of the average GDP per capita growth rate of the country during 2016-2019. (c) Exchange Rates. An exchange rate of Leone 9,775 to US$1 is assumed. Component 1: Electrification of towns and communities through grid extension 5. Project Benefits. The proposed investments will increase the distribution capacity of the electricity network in the targeted areas, which in turn will enable: (a) incremental electricity consumption in the project areas; and (b) energy savings that will result from reduced technical losses along the rehabilitated grid lines. • Incremental electricity consumption resulting from the improvements in service delivery. A significant part of electricity demand remains unserved in Sierra Leone because of poor grid condition. Electrification of district headquarter towns and surrounding communities through distribution network rehabilitation and expansion will improve supply reliability and efficiency and increase the distribution capacity of the network by 22 MW. As a result, the project will be able to connect an additional 38,300 Page 89 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) residential customers and 7,700 industrial, commercial and public institutions in Makeni, Magburaka and Koidu. Also, the project will benefit about 4,700 residential customers and 950 industrial, commercial and public institutions through the provision of reliable grid connectivity. With the maximum demand of 22 MW, the project is estimated to deliver an additional 142 GWh of power per year to new customers. Such additional consumption can be valued at the consumers’ willingness-to-pay (WTP) for electricity supply. According to the recent WTP study28, WTP for households which do not have any grid connected electricity service is Le 4,232/kWh (US$0. 42/kWh) for the 12-18 hrs service 7 days a week. The WTP for household which has less than 4 hrs service 5 days a week is Le 1,283/kWh (US$0. 13/kWh) for the 12- 18 hrs service 7 days a week. Those WTPs were applied for the new customers and existing customers and average WTP is estimated to US$0.38/kWh. • Energy cost savings resulting from reduced losses. Improvements in the technical condition of the grid will also have a substantial impact on the total system losses. The project is expected to reduce technical losses by 4 percent. 6. Project Costs. The main costs associated with such investments are: (a) capital costs, including, sub- transmission and distribution lines, rehabilitation and expansion of distribution network; (b) O&M costs of the grid infrastructure; and (c) average cost of electricity import. The capital costs under component 1 is estimated to US$35 million and investments are assumed to be developed in five years, with the 20 percent of annual disbursement. The project cost for transmission and distribution network in the four towns (Kabala, Pujehun, Kailahun and Kambia) and 33 kV distribution line in Waterloo is estimated to US$40 million and will be financed by Government’s budgetary appropriation. The capital costs are included for the economic analysis given the complementary feature of the project. O&M costs are estimated as 2 percent of the capital costs. It is assumed that import through CLSG interconnector since 2021 can cover the 22 MW of maximum demand in the project area at US$0.12/kWh. Component 2: Electrification through mini-grid and stand-alone solar systems 7. The project will invest in off-grid electricity solutions in those areas in Sierra Leone where the provision of grid electricity services is not economically or technically feasible in the medium term. The solutions include: • The development of around 4 MW of installed solar PV mini grid with battery storage in Moyamba; • The installation of solar PV systems for health facilities and schools 8. Mini Grids. For the mini-grid, Le 4,003 per kWh (US$0.4/kWh) of the WTP for households which do not have any grid connected electricity service is assumed according to the recent WTP study. 9. Electrification for schools and health centers. The economic returns from promoting productive business and electrifying schools and health centers are estimated as the avoided costs of electricity from diesel gensets. With the emerging emphasis on institutional access to electricity, it is expected that in the absence of this project, diesel gensets would be used to provide these services; diesel is already used in health centers. Electricity from diesel production is assumed to cost US$0.46/kWh. 28 Study on willingness and ability to pay for electricity service (WATP-E), January 2018. Page 90 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) Table 4.1: Key Assumptions of the Off-grid Components Beneficiaries CAPEX Capacity Consumption WTP (US$ (MWh) (Le/kWh)* million) Initially 600 kW with 1,800 kWh Households, commercial, of battery. A Mini-Grids and industrial in the town of 6.0 total of 4 MW 4,003 4,860 Moyamba and other of solar PV communities capacity is expected to be installed Solar PV for 200 health facilities and 500 Health Facilities primary / junior secondary 5.7 2 MW 2,880 4,524** and Schools schools * Study on willingness and ability to pay for electricity service (WATP-E), January 2018. ** Self-generator (12.6 KVA) electricity cost. 10. The proposed project is expected to have a number of additional benefits which are either uncertain or difficult to quantify such as (a) employment generation; (b) health benefits derived from the displacement of some sources of energy for lighting, like kerosene or wood; (c) improvements in the provision of education and health services; and (d) range of E&S externalities. As such, the results of the economic analysis can be considered a conservative estimation of the total economic benefits for society. Environmental externalities 11. GHG emission reduction and accounting. Environmental externalities constitute another economic benefit of the proposed project, given that access to grid and off-grid electricity enabled under the project will displace self-generation that use GHG-intensive fuel such as diesel. Table 4.2 summarizes the assumptions of replacing diesel self-generators with the additional electricity. GHG emissions of the mix of electricity supplied through the grid are lower than GHG emissions from diesel self-generation. Using the World Bank’s GHG guidance on energy access operations and the total generation required for new or improved connection, the project will therefore avoid 302,701 tons of CO2 (273,933 tons of CO2 for Component 1 and 28,767 tons of CO2 for Component 2) over the project economic life. Consistent with World Bank guidance on the social value of carbon, carbon-emission reductions are valued in the low case at US$40 per ton of CO2 in 2020, in real terms, increasing to US$50 per ton by 2030. Carbon emissions are valued at “high” and “low” levels, both increasing at a rate of 2.25 percent per year. Table 4.2: Assumptions of Replacing Diesel Self-generator Percentage of replacing the diesel generator with the additional electricity Grid 50 % Mini-Grid 25% Solar PV for Health Facilities and Schools 25% Results 12. The economic analysis demonstrates that proposed project is economically viable. The economic rate of return of the project is 52.8 percent and the NPV is US$266 million, including environmental benefits. Without Page 91 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) environmental benefits, economic rate of return and NPV would be 51.7 percent and US$250 million respectively. The economic benefits are attributable to on-grid components, but off-grid components are also economically viable. Table 4.3: Summary of Economic Analysis Unit Result Economic Internal Rate of Return EIRR % 51.7 EIRR including environmental benefits % 52.8 Composition of NPV Total costs US$ million 357 Total benefits US$ million 607 NPV (before environmental benefits) US$ million 250 Environmental benefits US$ million 16 NPV (including environment benefits) US$ million 266 Table 4.4: Summary of NPV and EIRR by Component NPV (US$ million) EIRR (%) Grid 277 58.7 Mini-Grid 29 31.9 Solar PV for Health Facilities and Schools 9 29.5 Sensitivity analyses 13. Sensitivity analysis has been conducted against all parameters that have a significant impact on the project’s economic rate of return. These include the average WTP and the discount rate. 14. Average willingness to pay. The additional electricity brought in the grid by the project is valued at the WTP based the recent WTP study. The switching value for the WTP (i.e., to make NPV to zero) is US$0.20 /kWh. Table 4.5: Sensitivity Analysis on WTP for the Grid WTP (US$/kWh) NPV (US$ million) EIRR (%) 0.20 - 3.8 0.38 266 52.8 0.45 371 81.3 15. Discount rate. The choice of discount rate is a critical assumption that has a significant impact on the NPV of a project. The World Bank’s guidance applies the Ramsey formula and recommends using a discount rate between 1 to 2 times the long-term growth rate of the country. While 5.17 percent discount rate is used in the base case, NPV values for 0 percent and 10 percent discount rates are presented as a sensitivity analysis in the Table 4.6. Table 4.6: Sensitivity Analysis on Discount Rate Discount Rate NPV (US$ million) EIRR (%) 0 percent 489 52.8 5.17 percent 266 52.8 Page 92 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) 10 percent 162 52.8 B. Financial analysis 16. The financial analysis focuses on on-grid component that account for about 70 percent of total project investment and assesses the impact of the component on the viability of the distribution utility, EDSA. 17. Benefits. The financial benefits of the Component 1 would be: (a) the incremental electricity sale resulting from the additional connections; and (b) reduced generation cost through rehabilitation of distribution network. The incremental revenues from additional power sales in the project areas have been valued at the average consumer tariff of USc18 per kWh. The analysis also captures a decrease in system losses by about 4 percent. 18. Costs. Assumptions on O&M costs, and additional power supply costs are the same as in the economic analysis; (a) O&M estimated at 2 percent of the capital costs; and (b) unit import costs through CLSG interconnector assumed to be 12 USc/kWh. However, the US$35 million investment under Component 1 was considered as capital costs. Results 19. The financial analysis of the project confirmed that the project is financially viable, with FIRR of 10.9 percent and NPV of US$13 million at a discount rate of 3.5 percent. 20. However, the capital cost funded by the Government budget appropriation for transmission and distribution network in the four towns (Kabala, Pujehun, Kailahun and Kambia) and 33 kV distribution line in Waterloo is not included in the project cost. If the capital costs are included for the financial analysis, the project would not be financially viable. This result is to be expected in a context where electricity tariffs are systematically below cost recovery under the current performance in the sector. The issue does not lie within the project, but rather indicates a systemic problem within Sierra Leone’s electricity sector. Current Financial Performance of the Power Sector 21. The financial performance of the electricity sector in Sierra Leone is weak. EDSA, a state-owned distribution company, has been suffering from a structural operating deficit and dependent on government subsidies and donor grants to cover operating losses and investment expenditures. The company has experienced cash-flow shortages and the deficit mounted to US$19 million in 2017 despite the Government’s supports and capital grants from donor agencies. The annual cash shortfall of the company has been continuously growing. These operational deficits are partially subsidized by the MoF. 22. EDSA’s difficult cash situation caused payment problems with the EGTC, a state-owned generation and transmission company, and the private Independent Power Producers (IPPs). Approximately 25 percent of total power was purchased from the IPPs in 2018, 51 percent in 2019. Payment arrears to the IPPs are raising a concern on continued power supply from the IPPs. The weak state of sector finances is also a disincentive to potential private partners in future IPP projects whose contribution is much needed. 23. Liquidity constraints across the sector value chain have largely disrupted the functioning of the generation and transmission company, leading to payment delays to suppliers and contractors. EGTC’s 2017 payment arrears to critical suppliers, such as fuel, and contractors more than doubled a year later. This ongoing financial distress has significantly impaired the EGTC’s ability to maintain and expand services and invest in more Page 93 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) efficient, lower-cost generating options without which the sector will continue to generate electricity at high costs. Key Drivers of Financial Underperformance 24. Continued inadequate cost recovery is the key driver of the sector’s financial underperformance. Current average consumer tariff, approximately USc18 per kwh, does not fully cover EDSA’s operating cost which includes the power-purchase cost from EGTC and the private IPPs. Only 56 percent of the cost can be recovered by energy sales. 25. Excessive aggregated technical, commercial, and collection losses (ATC&C) have also played a significant role. The current level of aggregated T&C losses is estimated at about 40 percent of total generation, where technical loss and commercial loss are approximate 20 percent and 20 percent, respectively. For 2019, the total bill-collection rate is estimated at 85 percent of total energy charge where the post-paid bill-collection rate is only 51 percent. 26. Liquid fuel generation mix is a major contributor to the sector’s financial losses. The current hydro installed capacity connected to the main grid is seasonal. To prevent electricity shortages, the Sierra Leone Government contracted IPP power plants running on HFO and diesel. These private power plants have imposed a large financial burden on the electricity sector at a price of USc22 per kwh in 2018 and USc17 per kwh in 2019. Power-purchase cost from the IPPs is estimated to more than US$24 million in 2018 and US$44 million in 2019, which is about 45 percent and 67 percent of total power purchase cost, respectively. Page 94 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) ANNEX 5: WBG Support for COVID-19 Health, Social and Economic Response A. Context: Health, Social and Economic Impacts 1. Sierra Leone was one of the last SSA countries to report its COVID-19 index case (March 31, 2020) with infection rates progressively declining in recent months.29 However, the economic costs of the pandemic have been substantial with significant impacts on growth (-2.3 percent to -4.0 percent) compared to the pre- COVID projected growth rate of 5.4%. With the State of Emergency and a partial lockdown enforced, the disruption of economic activity also heightened existing ethnically aligned tensions. Schools were also closed from March 31, 2020 to October 5, 2020, with an estimated 1.9 million of learners unable to continue their education30 although the Government launched a radio teaching program during the COVID-19-induced school closures. Restrictions on movement have now been lifted and the airport reopened,31 although the land borders remain closed. 2. With the confluence of historic fragilities,32 existing macro-fiscal vulnerabilities and prevailing COVID risks, the pandemic has inflicted high human and economic costs threatening to set back the post-Ebola recovery. The key channels of economic impacts were tourism, transportation, manufacturing and mining. The fiscal and current account deficits increased due to elevated government spending to respond to the crisis. Inflationary pressures also increased due to supply-side bottlenecks. The fiscal gap was projected at 2.1 percent of GDP. While Sierra Leone’s debt remains sustainable, the risk of external and overall debt distress remains high, and the COVID 19 shock has elevated these risks.33. Under the G20 Debt Service Suspension Initiative (DSSI), GOSL contacted all bilateral creditors requesting debt relief. No private creditors have been engaged. 3. COVID-19 has put additional stress on poor households due to slowing food production, shortages in food imports and higher food prices with disproportionate impacts on the poorest and most vulnerable households including people with disabilities (PwDs) threatening to worsen the already high levels of poverty and food insecurity in the country. Results of the recently conducted Sierra Leone COVID-19 Impact Monitoring Survey in Sierra Leone (CIMS), July 2020, show that most households have seen a decrease in income since March 2020 from all sources. Nearly two-thirds of rural households reported planting less rice this season, further increasing food insecurity and lowering agricultural production. 4. To respond to the COVID-19 pandemic, the Government drew up the Quick Action Economic Response Program (QAERP) and the COVID-19 Preparedness and Response Plan for the health sector. The five pillars of 29 As of December 22, 2020, there were 2,509 confirmed COVID-19 cases, 75 deaths and 1,856 recoveries in Sierra Leone. Total COVID- 19 tests conducted to date is 82,177 (10.72/1000 population) with an overall Case Fatality Rate (CFR) of 3.0%. Health workers account for 9.5% of cases (Sitrep 264, December 19, 3pm GMT). 30 As experience during the Ebola epidemic showed, school closure is likely to be accompanied by a spike in adolescent pregnancies, dropout rates and lower learning levels, especially for girls who were left vulnerable with increases in unwanted sex and transactional sex for food and other essentials, which saw more than 18,000 girls fall pregnant (Estimated by United Nations Population Fund [UNFPA]) and those of lower socioeconomic status or with disabilities. 31 The easing of COVID-19 Restrictions was announced by the President on June 23, 2020. 32 These fragilities include: the fractious political settlement, political uncertainty and a North-South ethno-regional divide, potential instability from fiscal reform, a frustrated youth demographic and conflict-inducing effects of concessions. 33 IMF Sierra Leone Country Report No. 20/196 (June 2020), Debt Sustainability Analysis. Page 95 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) the QAERP were directed at maintaining macroeconomic and financial stability, maintaining supply of critical commodities, mitigating the shock on businesses, boosting health sector spending and mitigating the shock on households. B. WBG Response 5. The World Bank’s COVID response was guided by the overall strategic approach—as spelled out in the Country Partnership Framework (CPF)34—which is to maintain a balance between short-term to long-term needs, emphasizing: (i) Protecting the poor and vulnerable (including food security); (ii) Supporting businesses; and (iii) Accelerating recovery and strengthening economic resilience. The WBG-financed COVID response is also aligned with the four pillars of the WBG COVID-19 Approach Paper; related activities are summarized below. 6. Health sector. The health response through the US$7.5-million IDA COVID-19 Emergency Response Project (P173803), with a linked Pandemic Emergency Financing Facility (PEF), along with US$1 million (payouts executed by UNICEF) and US$4.9 million, IDA reallocation from the Regional Disease Surveillance Systems Enhancement Project (P154807) focused on strengthening emergency preparedness and response, isolation and treatment centers through the provision of medical equipment and supplies, and heightened surveillance at ports of entry as well as improved laboratory capacity and case management. 7. Socio-economic Response, Support for provision of Public Sector Services, Social Protection and Safety Nets: GoSL utilized the US$4-million contingency funds under the Social Safety Nets (SSN) Project (P143588) to finance Emergency Cash Transfers to help mitigate the COVID-19 impacts on urban and rural poor households. A US$5.2-million SSN EU-financed grant was also recently approved for a third Additional Financing (AF) to the SSN project. Delivery of public sector services: The PPA under the US$50-million IDA Free Education Project (P167897) was used to support the COVID Education response and a further US$6.85-million AF to the GPE-financed COVID 19 Accelerated Education Response Project is also currently under preparation. The World Bank also provided support to community preparedness response targeting 12 high-risk communities in Freetown through the Freetown Emergency Response Project (P166075). Jobs and SMEs: The Portfolio and Pipeline adjustments and re-focus are providing support to SMEs and start-ups address the impact from COVID- 19 through the Economic Diversification Project (P164212) and the Agroprocessing Competitiveness Project (P160295). Energy Sector: The US$6-million IDA Energy Sector Utility Reform Project-AF (P120304; restructured) is providing electricity to COVID-19 response centers (10 health and quarantine centers). Food security: The Smallholder Agriculture Commercialization Development Project (P153437) CERC was triggered to refocus and accelerate US$2.35 million out of total project financing to mobilize emergency support for food production. C. Selectivity, Complementarity, Partnerships 8. The WBG has worked closely with other development partners including the International Monetary Fund (IMF), EU, Irish Aid and FCDO, which has resulted in complementary efforts in budget support and COVID-19 response support. Additionally, the WBG is working hand in hand with UN partners, GAVI and COVAX facility on the country readiness assessment and helping to prepare the necessary steps to implement the 34 The FY21-FY26 CPF for Sierra Leone was presented to the Board on Executive Directors on June 5, 2020. Page 96 of 97 The World Bank Enhancing Sierra Leone Energy Access Project (P171059) COVID-19 vaccination program. An Additional Financing (AF) of US$5 million will potentially be reallocated from the new Health project under preparation for vaccine purchasing, planning and distribution. Significant frontloading is anticipated in FY21 to meet the support needed for the country’s COVID response and recovery efforts (about 45 percent) with the pipeline already reflecting reprioritization of lending operations (e.g., the Government has requested an elevated DPO amount which has necessitated reductions in other investments in the pipeline). Page 97 of 97