Translated Document

AFRICAN DEVELOPMENT BANK

COTE D’IVOIRE

POWER TRANSMISSION AND DISTRIBUTION NETWORKS REINFORCEMENT

PROJECT (PRETD)

APPRAISAL REPORT

ONEC DEPARTMENT

November 2016

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TABLE OF CONTENTS

PROJECT OVERVIEW ......................................................................................................................... ii

I. IPROJECT PRESENTATION, ALIGNMENT AND BENEFICIARIES ..................................... 1

A. Project Context, Development Objectives and Specific Objectives ....................................... 1

B. Expected Project Outcomes and Impacts ............................................................................... 1

C. Project Outputs ....................................................................................................................... 2

D. Project Rationale..................................................................................................................... 2

E. Project’s Alignment with National Development Goals ........................................................ 2

F. Project Alignment on Bank Strategies and Policies ............................................................... 3

G. Integration of Requirements Set Out Under Presidential Directive No. 02/2005 ................... 3

H. Consultation Process and Ownership by the Country ............................................................ 3

I. Project Target Areas, Beneficiaries and Selection Criteria ........................................................ 4

II. PROJECT COST AND FINANCING........................................................................................ 5

A. Estimated Project Cost and Financing Arrangements ............................................................ 5

B. Coordination of Joint Project Donors ..................................................................................... 5

III. PROJECT FEASIBILITY .......................................................................................................... 5

A. Project Economic and Financial Performance ........................................................................ 5

B. Sensitivity of Project’s Financial and Economic Performance .............................................. 6

C. Environmental and Social Impact ........................................................................................... 6

D. Climate Change ...................................................................................................................... 7

E. Gender .................................................................................................................................... 7

IV. PROJECT IMPLEMENTATION AND MANAGEMENT ....................................................... 7

A. Governance ............................................................................................................................. 7

B. Implementation Schedule ....................................................................................................... 8

C. Procurement Strategy and Plan ............................................................................................... 8

D. Financial Management ........................................................................................................... 9

E. Monitoring and Evaluation ..................................................................................................... 9

F. Sustainability .......................................................................................................................... 9

G. Risk Management ................................................................................................................. 10

V. LEGAL INSTRUMENTS AND AUTHORITY ...................................................................... 10

A. Legal Instrument ................................................................................................................... 10

B. Conditions Associated with Bank’s Intervention ................................................................. 10

40. The Bank’s financing is subject to the following conditions: .............................................. 10

VI. RECOMMENDATIONS .......................................................................................................... 11

Annex 1: Web Links

Annex 2: Map of Project Area

Annex 3: Project Implementation Schedule

Annex 4: Procurement Systems

Annex 5: Justification of Level of Côte d’Ivoire’s Project Counterpart Funding

CURRENCY EQUIVALENTS August 2016

1 Unit of Account = 822.4586 XOF

1 Unit of Account = 1.2529 EUR

1 Unit of Account = 1.3934 USD

1 January to 31 December

WEIGHTS AND MEASURES

1 kilometre (km) = 1 000 m

1 km² = 1 000 000 m²

1 hectare (ha) = 10 000 m²

1 tonne = 1 000 kg

1 kilojoule (kJ) = 1 000 Joules (J)

1 kilovolt (kV) = 1 000 Volts (V)

1 kilovolt-ampere (kVA) = 1 000 Volt – ampere (VA)

1 kilowatt (kW) = 1 000 Watts

1 Megawatt (MW) = 1 000 000 W = 1 000 kW

1 Gigawatt (GW) = 1 000 000 kW = 1 000 MW

1 kilowatt-hour (kWh) = 1 000 Watt-hours = 3 600 000 Joules (J)

1 Megawatt hour (MWh) = 1 000 000 Wh = 1 000 kWh

1 Gigawatt hour (GWh) = 1 000 000 kWh = 1 000 MWh

1 tonne of oil equivalent (Toe) = 41 868 Joules = 11 630 kWh

1 million tonnes of oil equivalent (MToe) = 1 000 000 Toe

i

ACRONYMS AND ABBREVIATION ADF

: African Development Fund

BD : Bidding Documents

CIE : Compagnie Ivoirienne d’Electricité

CI-ENERGIES : Société des Energies de Côte d’Ivoire

CIPREL : Compagnie Ivoirienne de Production de l’Energie Electrique

CLSG : Côte d’Ivoire, Liberia, Sierra Leone and Guinea Interconnection Project

CSP : Country Strategy Paper

DC : Direct Contracting

EIB : European Investment Bank

ERR : Economic Rate of Return

ESIA : Environmental and Social Impact Assessment

ESMP : Environmental and Social Management Plan

GDP : Gross Domestic Product

HV : High Voltage

ICB : International Competitive Bidding LCB : Limited Competitive Bidding LV : Low Voltage

MDG : Millennium Development Goals

MOT : Mean Outage Time

MV : Medium Voltage

NA : Not available

NCB : National Competitive Bidding NDE : Non-distributed energy

OCB : Open Competitive Bidding PAP : Project Affected People

PAR : Project Appraisal Report

PEPT : Electricity for All Programme

PIA Project Impact Area

PIU : Project Implementation Unit

PND National Development Programme

PRONER : National Rural Electrification Programme

PSV : People in Situations of Vulnerability

QCBS : Quality- and Cost-Based Selection

RAP : Resettlement Action Plan

RO : Regional Operations

SDG : Sustainable Development Goals

SP : Simplified Procedures

TFP : Technical and Financial Partners

UA : Unit of Account

ii

PROJECT OVERVIEW

Identification

Project Name Power Transmission and Distribution Networks

Reinforcement (PRETD)

Country Côte d’Ivoire

Project SAP Code P-CI-FA0-014

Geographic Location Districts: Abidjan, Montagnes and Bas Sassandra

Sector Energy

Sub-Sector Electricity

Name and Telephone

of Project Task

Manager

Olivier KOFFI

Tel.: (225) 20 20 61 71

Description

Overall Objective

Acceleration of the economy’s structural transformation

through industrialization and improvement of the

people’s living conditions

Specific Objectives

Improve grid performance in order to provide consumers

with high quality energy and increase the electricity access

rate

Outputs

Transmission lines and sub-stations, distribution lines and

sub-stations, project studies and management, mitigation

of environmental and social impacts

Outcomes Reduction of technical losses, NDE and MOT

Improved access rates

Impacts

Improvement of the people’s quality of life

Job creation

Increased GDP growth rate

Strategic

Thrust

Country Strategy

/Objective aligned on

The 2016-2020 PND and the Energy Sector Strategic Plan

The Bank’s strategy

aligned on

The Bank’s Ten-Year Strategy, High 5s and the New Deal

for Energy in Africa

CSP Pillars aligned

on

Pillar II (2013-2017 CSP).

Beneficiaries

Population 1 400 000

Women (%) 51

Minorities (%) NA

Environmental

and Social

Impacts

Score or Yes/No/N.A.

Environmental Category 1

Does an ESIA exist? YES

Does an ESMP exist? YES

Does an RAP exist? YES

Safeguards

required

Climate change resilience YES

Involuntary resettlement NO

Gender inequalities YES

Governance issues NO

Project

Management

Executing Agency’s Name and

Address

CI-ENERGIES

01 B.P. 1345 Abidjan 01

Procurement strategies adopted National system, Bank’s system and

United Nations system

Implementation Period 36 months

iii

Project

Readiness

Yes/No/N.A.

Have the key executing agency staff assumed duty? YES

Has the executing agency opened a bank account? NO

Have the project counterpart funds been disbursed? NO

Does a Detailed Project Implementation Plan (DPIP) exist? YES

Does a detailed financial plan exist? YES

Does a detailed procurement plan exist? YES

Does a Results Monitoring and Evaluation Framework exist? YES

Estimated Loan/Grant Signature Date 24 October 2016

Cost and

Financing

Amount

(in UA million)

% of total cost

Total cost 162.14 100

ADB loan 137.82 85

Government/Sponsor 24.32 15

Financial

Information

Lending currency Euro (EUR) or any other convertible currency

Loan type Fully Flexible Loan

Tenor To be determined (not exceeding 25 years)

Grace period To be determined (not exceeding 8 years)

Weighted average maturity1 To be determined (depending on the depreciation

profile)

Repayments Semi-annual payments after the grace period

Interest rate

Base rate + Funding margin +Lending spread +

Maturity premium

This interest rate must be above or equal to zero.

Base rate Floating (6-month EURIBOR resets on 1 February

and 1 August or any other acceptable rate)

A free-fixing option is offered to fix the base rate

Funding margin

Bank’s funding margin resets on 1 January and 1

July and applied on 1 February and 1 August with

the base rate.

Lending spread 80 basis points (0.8%).

Maturity premium

To be determined:

- 0% if the average weighted maturity <= 12.75

years

- 0.10% if average weighted maturity<=15

- 0.20% if average weighted maturity >15 years

Front-end fee 0.25% of the loan amount to be paid latest on the

loan signature date.

Commitment fee:

0.25% per year on the undisbursed amount. It starts

to accrue 60 days after loan signature and is payable

on interest payment dates.

Base rate conversion option 2 :

In addition to the free-fixing option for fixing the

base rate, the Borrower is now offered the possibility

of returning to the floating rate or re-fixing all or part

1 An average weighted maturity calculator is available at this website

2 The conversion options and transaction fees are governed by the Bank’s Guidelines for Loan Terms at this website

iv

of the disbursed amount of its loan.

Transaction fees are payable.

Interest rate cap or collar

option 3 :

The Borrower is offered the possibility of

establishing base rate caps or collars for all or part of

the disbursed amount of its loan.

Transaction fees are payable.

Lending currency

Conversion option 4:

The Borrower is offered the possibility of converting

the lending currency for all or part of its disbursed or

undisbursed loan into another Bank-approved

lending currency.

Transaction fees are payable.

3 Idem 2 4 Idem 2

v

RESULTS-BASED LOGICAL FRAMEWORK

Country and Project Name: Côte d’Ivoire- Power Transmission and Distribution Networks Reinforcement

Project Objective: Accelerated transformation of the economy through industrialization and improvement of the people’s living conditions.

RESULTS CHAIN

PERFORMANCE INDICATORS

Means of Verification RISKS/MITIGATION MEASURES

Indicators 2015 Baseline

Situation 2019 Targets

IMP

AC

T

Economic development of

the region and

improvement of the

people’s quality of life

- Jobs created

- GSP growth

- National access rate

-

-

- 80 %

- 3020 jobs, of

which 32% for

women

- +1.5 %

- 81.24 %

Project Completion Reports of:

- Ministry of Planning and

Development

- Ministries of Oil and Energy

- CI-ENERGIES

- CIE

Risk:

- Failure to connect rural households in the event of non-

availability of counterpart funds.

Mitigation measure

- Central government commitment to facilitate the people’s

access to electricity under PEPT.

OU

TC

OM

ES

Enhanced quality of

service, energy efficiency

and improved coverage

- Reduction in Riviera II sub-station load rate

- Improvement of Bingerville voltage plan

- Reduction of NDE in Bingerville

- Reduction in Man sub-station load rate

- Reduction of NDE at Man sub-station

- Reduction of MOT at Man sub-station

- Improved Duékoué voltage plan

- Ensure continuity of service in San Pedro

- Improvement of coverage rate in Tonkpi

- Improvement of coverage rate in Guémon

- Improvement of coverage rate in Cavally

- Reduction in the number of localities supplied by

isolated diesel generators

- 82 %

- 14 kV

- 460 MWh

- 75 %

- 321 MWh

- 36 h

- 30 kV

- N-1 safety

requirements not

met

- 41.24 %

- 57.14 %

- 58.58 %

- 5

- 60 %

- 20 kV

- 153 MWh

- 51 %

- 100 MWh

- 10 h

- 33 kV

- N- 1 requirements

met

- 62.77%

- 87.96 %

- 96.31%

- 0

Reports of

- Ministries of Energy

- CI-ENERGIES

- CIE

Risks:

- Weak capacity of CI-ENERGIES to implement a large-scale

project

- Poor performance of contractors to complete project

- Administrative red tape in granting exemptions

Mitigation measures:

- Recruitment of a control mission to assist CI-ENERGIES in

implementing the project

- Qualification criteria raised to exclude contractors without

relevant references

- Existence of a Tax Unit at CI-ENERGIES responsible for

monitoring exemptions within the different tax administrations

vi

OU

TP

UT

S

HVB lines constructed

HVA lines constructed

HVB/HVA sub-stations

established

MV/LV sub-stations

established

LV lines constructed

Public lighting installed

Connections made

Studies for future

projects

Employees trained

Support to people in

situations of

vulnerability

- Length of 225 kV lines

- Length of 33 kV lines

- Length of LV lines

- Number of HVB/HVA sub-stations constructed/

reinforced

- Number of HVA/LV sub-stations constructed

- Number of public lighting units installed

- Number of connections made

- Number of studies conducted on future projects

- Number of CI-ENERGIES employees trained

- Number of groups of people in situations of

vulnerability assisted

-

-

-

-

-

-

-

-

-

-

-

205 km

1356 km

1445 km

5

351

6568

20 000

4

85

12

Project appraisal reports, reports of

the consulting engineer, quarterly,

supervision, audit, monitoring-

evaluation, completion and DGE

activity reports.

Consulting engineer’s report

Audit reports

KE

Y A

CT

IVIT

IES

COMPONENTS INPUTS

1. Infrastructure: (i) Construction of 205 km of 225 kV lines, 1 356 km of 33 kV lines; (ii) Construction of 2 x 225/33 kV sub-stations, one

225/20 kV sub-station and extension of 2x225/33 kV sub-stations; (iii) Installation of 351x 50kVA pole-mounted sub-stations, 1445 km of

LVA lines; and (v) installation of 6568 public lighting units and completion of 20,000 connections.

2. Project Management: (i) control and supervision of network restructuring and extension work; (ii) external auditing of project accounts;

(iii) procurement of nine works supervision vehicles; (iv) procurement of IT equipment and office furniture; (v) unit’s operating costs; and

(vi) various training courses

3. Environmental and Social Mitigation: (i) Compensation of project affected persons; (ii) support to vulnerable groups; and (iii) project

environmental management.

Resources

ADB : EUR 137.82 million

Government : EUR 24.32 million

Application

Component 1 : EUR 141.56 million

Component 2 : EUR 11.45 million

Component 3 : EUR 9.13 million

1

MEMORANDUM AND RECOMMENDATION OF BANK GROUP’S MANAGEMENT TO

THE BOARDS OF DIRECTORS CONCERNING A PROPOSAL TO GRANT AN ADB LOAN

OF EUR 137.82 MILLION TO THE REPUBLIC OF COTE D’IVOIRE TO FINANCE THE

POWER TRANSMISSION AND DISTRIBUTION NETWORKS REINFORCEMENT

PROJECT

Management hereby submits this Memorandum and recommendations concerning a EUR 137.82 ADB

loan proposal to contribute to finance the Power Transmission and Distribution Networks

Reinforcement Project (PRETD)

I. PROJECT PRESENTATION, ALIGNMENT AND BENEFICIARIES

A. Project Context, Development Objectives and Specific Objectives

1. Between 2012 and 2015, Côte d’Ivoire posted sustained economic growth at an average rate

of 9.4% due to the recovery of the main growth-bearing sectors of the national economy: agriculture,

mining and services. In the electricity sub-sector, this economic growth has led to an annual increase in

power demand of about 12%, which could settle at 6% in the medium and long term. Côte d’Ivoire’s

existing electricity system is unable to meet demand despite the entry into service, in 2015, of additional

capacity of 253 MW, i.e. 17%, following the reinforcement of the AZITO and CIPREL plants. The

Soubré plant, with a capacity of 275 MW, is expected to come on stream in 2017. The study on the

Power Generation and Transmission Master Plan (PDPT), conducted in 2014, highlighted the

dilapidated state and saturation of power networks as one of the major constraints preventing the

electricity sub-sector from playing its role as a driver of the country’s development.

2. The project’s development goal is to accelerate the structural transformation of the economy

through industrialization and the development of infrastructure evenly distributed throughout the

national territory, and environmental conservation. The project’s implementation will contribute to the

launching of mining and cocoa processing projects in the San-Pedro region (these projects await the

availability of electricity). More specifically, the project aims to reduce non-distributed energy and the

total mean outage time as a result of the limited capacity of some structures of the national

interconnected grid. It also aims to restructure distribution networks with a view to relaunching

connections for new customers in the towns of San Pedro, Bingerville, Duékoué and Zagné, and ensure

the rural electrification of 252 rural localities in Montagnes District.

B. Expected Project Outcomes and Impacts

3. The near-to-medium term outcomes are a reduction of the mean outage time (MOT) of the

entire interconnected grid from 44.6 hours to 42 hours, optimal grid utilization, increase in access to

electricity from 80 to 81.24 % at national level, creation of direct jobs during the project phase and

availability of qualified human resources to set up and manage projects at CI-ENERGIES. The project’s

main impacts will be industrial development and the economic opening up of rural areas. The pipeline

of industrial, mining and agri-business projects in the western region of the country has the potential to

create about 3020 direct jobs, of which 32% for women, and their implementation due to the availability

of electricity as a result of the project’s implementation will contribute to the country’s economic and

social development, and to GDP growth. The expected impacts of the electrification of 252 localities

are the reduction of insecurity as a result of public lighting and adequate telecommunication resources,

the rapid dissemination of information by audio-visual equipment, women’s empowerment and gender

equality in rural, urban and peri-urban areas. Indeed, the project will help to reduce the drudgery of

daily chores, allow the development of women’s potential in disadvantaged environments and the

expansion of petty trades in the formal and informal sectors, sources of new jobs for the population,

especially people in situations of vulnerability (youth, women and the unemployed). A negative impact

that could occur would be that the opening up to the outside world through audio-visual media and the

internet could be a source of social unrest

2

C. Project Outputs

4. On completion, the expected project outputs will be: (i) the electricity infrastructure comprising

the Bingerville 225/20 kV sub-station, the Duékoué and Zagné 225/33 kV sub-stations; the extension

of the Soubré and San Pedro sub-stations; Soubré - San Pedro (128 km) and Duékoué-Zagné (77 km)

225 kV lines, the HVA networks in Bingerville, Duékoué, Zagné and Taï, the distribution networks in

42 localities in Cavally Region, 82 localities in Guémon Region and 128 localities in Tonkpi Region;

(ii) Support for people in situations of vulnerability; and (iii) intangible outputs including the

information, education and communication campaign, the project’s environmental and social

management, the audit of project accounts, works control and supervision missions, feasibility studies

on future projects and the training of CI-ENERGIES personnel.

D. Project Rationale

5. The project addresses the sector’s main problems, namely the dilapidated state and saturation

of the networks, which affects the electricity sub-sector’s performance and are the causes of the

suspension of new connections of industrial and household customers in certain regions, especially in

the West of the country. Therefore, the project’s implementation will result in the launching of industrial

and mining projects such as those related to the Feketero, Ouélé and Mahapleu gold mines, the

Touleupleu iron ore mines, the Sampleu nickel mines and the San Pedro iron ore and manganese plant.

The total estimated capacity of these projects by 2018 is 70 MW. The project will also allow wood

processing industries in Montagnes District, currently using their own energy sources (diesel generators

with a total capacity of 3.3 MW) to make significant savings as a result of their connection to the grid,

the cost of which is CFAF 77 per kWh compared to CFAF 117 for the generators, i.e. a 34% saving. As

a result of the project, Compagnie Ivoirienne d’Electricité (CIE) (the power utility company) will close

down eight isolated thermal plants operating in Montagnes District (in Tinhou, Diboke, Medibli, Taï,

Sakre, Zeregbo, Koreahinou and Ouallo-Kouloukoro localities), with a total capacity of 1.3 MW and an

average generation cost of CFAF 169/kWh compared to an average generation cost on CFAF 77 for all

the country’s power generating facilities. CIE will make annual fuel savings of about CFAF 800 million

based on 2014 data. The closure of plants operated by CIE and wood processing industries will avoid

annual CO2 emissions of about 3600 tonnes. Lastly, the project’s implementation will result in the

electrification of 252 rural localities and the connection of 7000 new customers in the town of San Pedro

and efficient power supply to the towns of San Pedro, Bingerville, Duékoué, Zagné and Taï.

E. Project’s Alignment with National Development Goals

6. The reference document for the country’s development goals is the 2016-2020 National

Development Programme (PND 2016-2020), the overall objective of which is to make Côte d’Ivoire an

emerging country by 2020, with a sound industrial base. PND 2016-2020 is focused on the following

five strategic thrusts: (i) enhancement of the quality of institutions and governance; (ii) acceleration of

human capital development and social well-being; (iii) acceleration of the economy’s structural

transformation through industrialization; (iv) development of infrastructure evenly distributed

throughout the national territory and environmental conservation; and (v) strengthening of regional

integration and international cooperation. For the energy sector, PND 2016-2020 aims to develop high

quality power facilities through the following four outputs: (i) strengthening governance in the

electricity and oil and gas sub-sectors; (ii) increasing oil and gas production, storage and transportation

facilities; (iii) increasing power generation, transmission and distribution facilities; and (iv) adopting a

power saving and efficiency policy.

7. The project is in keeping with the country’s development goals and sector objectives. It is

aligned on strategic thrusts (ii), (iii) and (iv) of PND 2016-2020 and its outputs are consistent with

output (iii) of the PND 2016-2020 for the energy sector. By 2020, the targeted objectives for the

electricity sub-sector will be to increase the amount of energy supplied to the transmission and

distribution networks from 8 251 GWh (2015) to 12 662 GWh, scale up power supplied to the mining

3

sector from a peak of 1 260 to 3090 MW and increase the rural population’s electricity access rate from

80 % in 2015 to 81.24 % by 2020. In this regard, the electricity sub-sector 2015-2030 Investment

Programme provides for the construction of 3 025 km of transmission lines and 23 related sub-stations,

and the electrification of 1076 rural localities over the 2015-2030 period,. The project will contribute to

the achievement of these objectives by the construction of 205 km of transmission lines, five sub-

stations and the electrification of 252 rural localities.

F. Project Alignment on Bank Strategies and Policies

8. The Bank’s 2013-2022 Ten-Year Strategy targets inclusive growth and the development of

sustainable infrastructure to more effectively safeguard energy. Approved in 2012, the Bank’s energy

sector strategy aims to increase the modern energy services access rate and to promote cleaner energy

that will protect the environment. The project will contribute to the implementation of these strategies

by providing the country with high quality transmission and distribution infrastructure, and by

increasing the population’s electricity access rate. The project will also contribute to the implementation

of the Bank’s High 5s and the different programmes of the New Energy Deal for Africa, in particular

the “access programme for the bottom of the pyramid” through the connection of 20 000 rural

households, the programme to improve the performance of power utilities by training 85 CI-ENERGIES

employees, the programme to increase the number of bankable projects by conducting feasibility studies

on four future projects, the energy efficiency programme by constructing 205 km of 225 kV lines and

five related sub-stations that will reduce energy losses and outage times.

G. Integration of Requirements Set Out Under Presidential Directive No. 02/2005

9. The project is in line with Presidential Directive No. 02/12015 Concerning the Design,

Implementation and Cancellation of Bank Group Sovereign Operations. The project design is based on

detailed technical studies conducted between 2013 and 2015 using Government resources. The

availability of these studies facilitated project appraisal and the preparation of bidding documents.

Therefore, this is an operation with a satisfactory maturation level. On this basis, the Government

requested and obtained the Bank’s consent to use the Advanced Contracting (AC) procedure, thanks to

which bids were invited from June 2016. As of 30 September 2016, all bids for rural electrification

works were received and appraised, and contracts will be signed as soon as the project is approved. The

initial disbursements could be made in the first quarter of 2017. For works on the transmission lines and

stations, bids will be received in November 2016. Negotiations on the financing agreement were held

on 12 October 2016. The Ivorian party approved the loan conditions proposed by the Bank. The

Government has set up organs charged with implementing the project as set out in paragraphs 26 to 29

of this memorandum. Concerning ongoing operations, it is worth noting that the energy sector project

portfolio in Côte d’Ivoire comprises three operations amounting to UA 96.13 million: two national

private sector operations (the CIPREL Plant Extension Project and the AZITO Plant Extension Project),

and one regional public sector project (the Côte d’Ivoire-Liberia-Sierra Leone-Guinea Interconnection

Project). The two private sector operations were approved in July 2013 with disbursement rates at 74%

and 100%, respectively. The facilities financed are already operational. The public sector project was

approved on 6 November 2013 and the financing agreement signed on 23 November of the same year.

The regional project is behind schedule mostly due to the Ebola epidemic that affected the other three

countries concerned. The disbursement rate for the national component stands at 37%. It is expected

that works will be completed during the first half of 2017.

H. Consultation Process and Ownership by the Country

10. The Government initiated a consultation process with communities living in the project areas,

allowing them to express their main concerns, the most important of which were taken into account in

the project design. These mainly related to their financial difficulties in paying connection charges, their

fear of seeing the project being implemented without compensation for affected persons, fear of

accidents occurring as a result of the mishandling of electricity and the need for financial support to

4

create income-generating activities through the use of electricity. To address these concerns, the project

will finance: (i) household connections by using the payment mechanisms provided for under the

Electricity-for-All Programme (PEPT); (ii) support to people in situations of vulnerability who are

members of women’s and youth associations in their agricultural production, agricultural product

processing and fish-farming revival activities; and (iii) an information, education and communications

(IEC) campaign to provide the population with the necessary information for the efficient use of

electricity. Concerning compensation, works on any given zone cannot be undertaken without prior

recompense of affected persons in the zone.

11. Project ownership by the Ivorian party is highlighted by its inclusion in the National

Development Plan (PND 2016-2020), the Public Investment Programme (PIP 2015-2020), the

Electricity Production – Transmission Master Plan and the 2017 National Budget. The country has

mobilized the necessary resources to prepare the feasibility studies, environmental and social impact

assessments and detailed designs of the main project components, and for the acquisition of land for the

construction of the Duékoué, Zagné and Bingerville sub-stations. Lastly, the project sponsor, CI-

ENERGIES, has formed a project preparation team at its Equipment and Development Department. The

team comprises the Head of the Transmission Division, Head of the Distribution Division, two

employees from the Markets and Logistics Department, an employee of the Finance and Accounting

Department and an employee of the Studies and Planning Department. This team supervised the above-

mentioned feasibility studies and prepared the requests for proposals for the recruitment of contractors

and service providers.

Project Target Areas, Beneficiaries and Selection Criteria

12. The project concerns three of the countries districts: the Autonomous District of Abidjan for

the Bingerville sub-station, the Montagnes District for the Duékoué-Zagné line and related sub-stations

as well as the electrification of 252 rural localities, and the Bas-Sassandra District for the Soubré-San

Pedro line and related sub-stations. The 252 localities are located in Cavally (42), Guémon (82) and

Tonkpi (128) regions. Project sites were selected in compliance with the National Investment Plan,

which anticipates the entry into service of sub-stations and lines planned under the project in 2017. The

Soubré-San Pedro line meets the need to increase transmission capacity to San Pedro to meet the ever

increasing demand and safeguard the town’s power supply. Currently, San Pedro is supplied by a 225kV

line from Soubré (operated at 90 kV) and without back-up supply if it were to be out of service for

scheduled or unpredicted reasons. The construction of the Duékoué and Zagné sub-stations is justified

by the need to offload the Man sub-station which supplies them by long overloaded medium-voltage

lines subject to significant voltage drops. Such occurrence affect the quality of service in these towns

and their hinterland. The projected real estate development and population growth in Bingerville

captured as part of the Abidjan District Development and Expansion Plan, requires high quality supply.

The Rivera sub-station which currently supplies Bingerville is saturated. As regards rural

electrification, the localities to be electrified were selected based on the criteria for the national rural

electrification programme which targets localities with over 500 inhabitants. The Bank’s dialogue with

the country led to consideration of rural localities located in the low access area concerned by the

transmission network reinforcement works. This resulted in the selection of the three regions of

Montagnes District.

13. The direct beneficiaries of the rural electrification component are the inhabitants of 252

localities estimated at 245,000 people comprising 54.1% men and 45.9% women; persons aged under

15 account for 41.8% of the beneficiaries5. The other project beneficiaries are economic operators whose

activities could be launched or increased as a result of the availability of electricity as well as urban

communities whose quality of life will improve thanks to the infrastructure created by the project. Basic

social facilities in rural localities, in particular schools and health centres, will benefit from electricity,

thus improving the quality of service delivery to the population. Other direct beneficiaries will be CI-

5 Results of the 2014 General Population and Housing Census

5

ENERGIES and CIE due to higher turnover as a result of increased quantities of electricity sold and the

reduction of losses.

II PROJECT COST AND FINANCING

A. Estimated Project Cost and Financing Arrangements

14. The total project cost is EUR 162.14 million. The Bank’s contribution to the project’s financing

is estimated at EUR137.82 million, i.e. 85% of the total cost. The remainder, i.e. EUR24.32 million,

will come from the counterpart funding. The Bank’s contribution will be through a Bank Group ADB

sovereign window loan. Use of this financing instrument is justified by the depletion of the ADF

allocation for Côte d’Ivoire when the Government’s request was received and the opportunity provided

by the country’s eligibility for the ADB window. The detailed project cost tables (costs by expenditure

category and by sources of financing) are presented in Annex 2.

B. Coordination of Joint Project Donors

15. The project is financed by the Bank and the Government, with no other donor as co-financier.

However, this project is part of a vast programme which is financed by several technical and financial

partners (TFP), in particular Chinese Cooperation, the European Union and the World Bank. This

programme covering the 2014-2020 period, concerns the rehabilitation and reinforcement of

transmission networks as well as the extension of distribution networks to improve the electricity access

rates of rural and peri-urban communities. Chinese Cooperation (EXIM BANK CHINA), through the

project to construct the SOUBRE hydro-power plant evacuation system, is currently financing to the

tune of EUR 80.7 million (ongoing works) the Soubré – Taabo and Taabo - Yopougon 2 (Abidjan)

transmission lines as well as the necessary works for the Soubré, Taabo and Yopougon sub-stations.

Through the Project to Upgrade and Rehabilitate Côte d’Ivoire’s Electricity Network, the same Chinese

Cooperation (EXIM BANK OF CHINA) is financing to the tune of USD 818.6 million, the construction

of 13 new high voltage sub-stations, the rehabilitation and extension of 12 former ones, the construction

of 1 681 km of high voltage lines and the electrification of 500 rural localities. The World Bank is

preparing its Electricity Transmission, Distribution and Access Project for USD 250 million. This

project concerns the construction of 56 km of 225 kV lines, the construction of 2 x 225kV lines, the

upgrade to 225kV of 3 stations from 90kV, the supply and installation of transformers in the 5 sub-

stations, the reinforcement of 10 x 90kV sub-stations, the extension and reinforcement of distribution

networks in 10 regional administrative headquarters, the underground installation of 400 km of

Abidjan’s overhead HVA grid, and rural electrification of 200 rural localities.

16. The TFPs operating in the energy sector have a consultative framework chaired by the

European Union Delegation. This framework allows discussion on each partner’s activities with a view

to creating synergy among their respective operations and preventing the duplication of efforts. The

appraisal mission coincided with the World Bank’s preparation mission. In collaboration with CI-

ENERGIES, the two teams agreed on the scope of their respective interventions.

III. PROJECT FEASIBILITY

A. Project Economic and Financial Performance

17. The project submitted for Bank financing is a project to reinforce transformer sub-stations and

construct transmission lines in order to connect households and wood and agricultural product

processing industries. The immediate unfulfilled power needs of industries are estimated at 70 MW,

representing annual consumption of 360 GWh. In addition to industrial customers, the project will

connect about 20 000 households in rural areas, 7 000 in the town of San Pedro (awaiting connections

as a result of the saturation of the town’s existing sub-station) and 1 000 new customers in Bingerville.

In addition, the improved quality of service delivery and availability of energy will create 350 new

household subscribers in the towns of Duékoué, Zagné and Guiglo. Based on these scenarios, the

6

project’s financial rate of return will be 11.12%, significantly above the average cost of resources which

is below 5%. The project economic analysis was carried out on the basis of the economic rate of return

(ERR). The ERR calculation is based on the economic costs (investment, operating and maintenance

costs adjusted by conversion factors) and the expected economic benefits of the project, in particular,

those from the sale of electricity to new customers (households and industries), reduction of losses from

saturated lines and sub-stations, and valuation of the reduction in the level of non-distributed energy

following the rehabilitation of transformer sub-stations and construction of transmission lines. The ERR

will be 25.01% and exceeds the economic cost of capital estimated at 10% in April 2016.

B. Sensitivity of Project’s Financial and Economic Performance

18. The sensitivity of the project’s economic and financial performance was analysed in relation

to: (i) a 10% increase in investment costs; (ii) a 10% increase in the cost price of electricity and operating

costs; and (iii) a 10% reduction in the average selling price of electricity. This analysis shows that the

financial rate of return exceeds 5% in every case and that the economic rate of return, while more

sensitive to a drop in the average selling price of electricity than the other factors, remains above the

economic cost of capital estimated at 10%, thus confirming the project’s economic and financial

viability.

C. Environmental and Social Impact

19. The project has been classified in Environmental Category 1. The country has carried out the

project environmental and social assessments, which have been disclosed at national level. The project

has obtained certificates of acceptability issued by the National Environmental Agency. The summary

of these documents were published on the Bank’s website on 15 April 2016 and are accessible by

clicking on the following link:

http://baobab.afdb.org/oivpdept/ONEC/_layouts/15/WopiFrame2.aspx?sourcedoc=/oivpdept/ON

EC/Shared%20Documents/CI%20PRETD_resume%20EIES%20_FR.docx&action=default and

http://baobab.afdb.org/oivpdept/ONEC/_layouts/15/WopiFrame2.aspx?sourcedoc=/oivpdept/ON

EC/Shared%20Documents/CI%20PRETD_%20resume%20PCR_FR.docx&action=default

20. The project’s main negative impacts relate to removal of all obstacles from the corridor (crops

and trees), which will require the clearing of 12 ha of degraded secondary forests, 1 ha of rubber and

cocoa plantations, and 269 ha of fallow land and crops. These impacts on the human environment

concern 2 158 affected assets, the temporary loss of seasonal harvests, health risk, especially an increase

in the prevalence of STD, an increase in the risk of accidents to the population and labour, and the

deterioration of living conditions during the works phase. The most significant positive impact is the

rural electrification of 252 localities that will reduce pressure on forests - currently the main source of

energy.

21. The 2,158 properties include 1,100 built structures (1,068 for the 128-km long Soubré-San Pedro

corridor and 32 for the 78-km long Duékoué-Zagné corridor), 57 uncultivated plots and 986 cultivated

plots (717 for the Soubré-San Pedro corridor and 284 for the Duékoué-Zagné corridor). The

compensation measures are as follows: (i) for built structures, housing and/or facilities located along

the line, compensation based on the replacement value of the property, including the cost of land; (ii)

for lessees of housing located along the line, rehousing assistance; (iii) for land owners affected by the

installation of pylons, payment of customary rights on the area appropriated; (iv) for farmers,

compensation for loss of crops incurred during the construction of the line, including loss of crops not

tolerated during the operations phase because they could present a danger to equipment operators (tall

crops); (iv) for owners of parcelled land who can no longer build without consent from the network

operator to pursue construction, compensation based on the value of the land; and (v) for all land owners,

compensation for overhang to compensate for restrictions linked to the line’s right-of-way. The

population impacted will not relocate from their villages. Public consultation and studies have concurred

on the availability of customary land in the villages concerned.

7

22. The compensation and mitigation measures for the negative impacts and optimization measures

for the positive impacts have been implemented and an ESMP prepared. The cost of compensation is

UA 6.9 million and represents almost 5.3% of the project cost. Evidence of the payment of

compensation as the works progress will be a loan condition. In any event, prior to any start-up of works

in a given area, evidence of the compensation of project affected persons in that area in compliance with

the Resettlement Action Plan (RAP), the Environmental and Social Management Plan (ESMP), and the

Bank’s related Rules and Procedures, in particular its Involuntary Resettlement Policy and its Integrated

Safeguards System, will be a pre-requisite.

D. Climate Change

23. The project’s main positive impacts on climate change are the reduction of 1 200 tonnes of

CO2 following the closure of diesel-fired plants and access to electricity for the population. The project

will provide a less-polluting alternative to the use of wood fuels (fuelwood and charcoal) and kerosene

lamps, which currently represent the main source of energy and lighting. The risks of climate change

on the project were examined and could concern flooding as well as erosion and landslides in the area

where the structures, sub-stations and transmission line pylons will be constructed. However, the lines

and sub-station sites were selected so as to avoid flood-prone areas. Furthermore, the project areas

present a gradual relief, which considerably mitigates the risk of landslides.

E. Gender

24. The project's rural areas are experiencing a situation of gender-based inequality reflected, on

the one hand, by women’s difficulties in accessing electricity and, on the other hand, by the fact that

women are not usually considered household heads and normally do not have access to land legally;

this can undermine the ability to be compensated even when their livelihoods are affected by the project.

Indeed, limited access to electricity is not only due to the unavailability of electricity but also to the lack

of financial resources of households to be connected and to pay the utility bills. For this project, the

issue of subscription is addressed by use of the PEPT mechanism which will cover the subscription

costs estimated at CFAF 150,000 with households paying only CFAF 1,000 francs at subscription. The

balance will be paid over ten years through the utility bills.

25. To enable women cope with the electricity consumption costs, the project will assist (especially

women) groups in processing and trade in farm products in the cassava, rice and fish sub-sectors in the

Montagnes District through the procurement of modern electrical instead of diesel machines. The

project will finance the rehabilitation of the Dompleu hatchery in the Man Department to ensure the

availability of fingerlings and fish feed for fish farming cooperatives made up mostly of women and

youth. This activity will employ 600 women in fish production and marketing. FAO/Côte d'Ivoire,

which will be responsible for providing assistance to associative groups, will propose an individual and

community coaching programme on managing small production units to be provided in order to sustain

the outcomes of the proposed support.

IV. PROJECT IMPLEMENTATION AND MANAGEMENT

A. Governance

26. Société des Energies de Côte d’Ivoire (CI-ENERGIES) will be the project’s executing agency

under the authority of the Ministry of Energy. CI-ENERGIES is a State-owned company responsible

for planning and implementing public investment projects in the electricity sector. It will establish a

Steering Committee (SC) and a Project Implementation Unit (PIU). A Steering Committee (SC), a

Monitoring Committee and a Project Implementation Unit (PIU) will be established. The Steering

Committee and the Monitoring Committee will be established by Inter-ministerial Order of the Minister

in charge of Energy and the Minister of Planning and Development. Members of the Project

Implementation Unit will be appointed by the General Manager of CI-ENERGIES from among in-house

staff depending on their competence.

8

27. The Steering Committee will be composed of the Chiefs of Staff of the following Ministries or

their representatives: Ministry of Petroleum and Energy who will be the chair, Ministry of Planning and

Development (Vice-Chair), Ministry attached to the Prime Minister’s Office in charge of the Economy

and Finance, Ministry attached to the Prime Minister’s Office in charge of the Budget and State

Portfolio, Ministry of Agriculture and Rural Development and the Ministry of the Environment and

Sustainable Development and the General Manager of CI-ENERGIES, which will provide secretariat

services. This Committee will be responsible for approving strategic changes to the project; removing

administrative obstacles the project may face, including the mobilization and disbursement of

counterpart resources and lifting constraints to the exemption process.

28 The Monitoring Committee will be composed of directors of the Directorate General of Energy,

CI-ENERGIES and CIE, the Directorate General of Budget and Finance, the Directorate of Public Debt

and the Directorate of Public Investment Programmes. The Director of Equipment and Development at

CI-ENERGIES will be Chair.

29. Based in Abidjan, the Project Implementation Unit will be responsible for routine, technical,

administrative and financial management, and comprises the following experts: a coordinator, a

procurement expert, a sub-station engineer, a transmission line engineer, a rural electrification engineer,

an engineer responsible for studies, a monitoring/evaluation expert, an environmentalist, an

administrative and financial officer, a driver, an assistant and a representative of the Man District

Regional Agricultural Department to be responsible for monitoring PSV support actions. The Project

Implementation Unit will report to the Steering Committee through reports such as minutes of meetings,

status reports, mid-term review reports, final evaluation reports and the project risk assessment report.

The PIU Coordinator will make a presentation at the quarterly meetings of the Steering Committee or

at any other meeting the Steering Committee may consider useful to organize to review the project’s

progress. The Steering Committee will report regularly to the CEO of CI-ENERGIES on the project

status.

B. Implementation Schedule

30. The project will be implemented over a 36-month period. The project implementation activities

began in June 2016 with the issuing of invitations to bid for works and submit expressions of interest

for the recruitment of the works control mission. The project uses the advance contracting procedure.

The detailed project implementation schedule is presented in Annex 3.

C. Procurement Strategy and Plan

31. Procurement of goods, works, supplies and consultancy services will be made in accordance

with the Bank’s new Procurement Policy approved on 14 October 2015 and effective since 1 January

2016.

32. The national procurement system, the capacity of local firms operating in the electricity sector

as well as the procurement experience and capacity of CI-ENERGIES were assessed. This triple

assessment showed that CI-ENERGIES has the required capacity to carry out the project’s planned

procurement activities and that there were sufficient local or regional enterprises capable of

implementing the low and medium voltage works. However, there were not enough of such enterprises

to guarantee healthy competition for the high voltage works.

- The Bank’s procurement system will be used for the procurement of works for the high

voltage lines and sub-stations, consulting engineering and auditing services. For the

procurement of other works and consulting services, the AfDB system will be used in

compliance with the Procurement Policy for Bank Group Funded Operations dated 14

October 2015.

9

- The National Procurement System will be used for all procurements (except for those for

people in situations of vulnerability); rural electrification work and connections, HVA

grid works, tele-control and telecommunications equipment; services of consultants to

carry out feasibility studies on four future projects, capacity building as well as

information, education and communication.

- Agencies of the United Nations System, in this case FAO, for the procurement of goods

and small works in favour of vulnerable individuals in accordance with paragraph 5.3 (e)

of the Bank’s Procurement Policy approved in October 2015.

The Table in Annex 4 shows the proposed procurement system and method for each procurement. A

procurement plan has been prepared and can be accessed using the following link:

http://baobab.afdb.org/oivpdept/ONEC/_layouts/15/WopiFrame2.aspx?sourcedoc=/oivpdept/ONEC/S

hared%20Documents/Projet%20PRETD_Plan%20de%20passation%20de%20march%C3%A9s%20(0

04).pdf&action=default

33. The country sought and obtained the Bank’s agreement to use the Advance Contracting

procedures. Invitations to bid for the procurement of rural electrification works and to submit proposals

for the works control and supervision mission were published in June of this year, bids and proposals

have been received and their evaluation is nearing completion. Invitations to bid for transmission

network reinforcement works were published in August of this year.

D. Financial Management

34. CI-ENERGIES, the project executing agency, will be responsible for managing the project

funds. An independent auditing firm will be recruited for the annual auditing of the project accounts

based on the Bank’s standard terms of reference. The audit costs will be financed from the loan

resources. In addition, the Internal Audit Unit of CI-ENERGIES will perform the project account audit

as part of its duties. This unit issues an annual audit plan, which includes both the operation of CI-

ENERGIES and the projects implemented by the company. It is worth noting that the different reports

(portfolio review and 2013-2017 CSP Mid-Term Review) show that to-date, there have been no cases

among Bank Group funded projects of non-compliance with the Bank Group’s financial management

rules and procedures. The project’s detailed financial schedule was prepared and can be accessed via

the link in Annex 1.

E. Monitoring and Evaluation

35. The monitoring and evaluation plan was prepared by CI-ENERGIES and approved by the Bank

Group. It will be implemented by the PIU with the support of CI-ENERGIES’ Monitoring and

Evaluation Division. At project start-up, the PIU will update the values of the project indictors set out

in the results-based logical framework. Upon completion, the project’s final evaluation will be carried

out by a firm on a contractual basis.

F. Sustainability

36. The sustainability of the infrastructure established under the project will be guaranteed by the

resources generated by power sales. This infrastructure will form part of the entire state-owned

electricity assets, currently managed by CIE under a 15-year lease contract signed in 1990 and renewed

in 2005 for the same duration. Under this contract, CIE is responsible for all the operating, routine

maintenance and management costs as well as implementation of maintenance work. CIE has the

necessary skills to operate the project facilities efficiently. Furthermore, for a power utility, CIE’s main

efficiency indicators such as energy sold/employee (0.52 GWh/employee), installed capacity per

employee (2.61 MW/employee), number of customers per employee (3.24 customers/ employee) and

the recovery rate (93%) exceed the averages for Africa. The reinforcement and extension of the grids

10

will increase maintenance costs but the project aims to minimize them by procuring equipment that is

similar to or compatible with that currently used on the Ivorian network, thereby reducing spare part

stocks.

G. Risk Management

37. Risks linked to the achievement of project outputs and outcomes: The significant volume

of work at CI-ENERGIES following the simultaneous implementation of several large-scale projects,

namely: the Soubré Hydropower Plant, the Project for the Development and Rehabilitation of Côte

d’Ivoire’s Power Network financed by the Exim Bank of China for USD 800 million and World Bank’s

Electricity Access, Transmission and Distribution Project for USD 250 million). Plans have been made

to recruit a control mission to support CI-ENERGIES and use young professionals, counterparts of the

control mission experts, who will be paid from the project’s counterpart funds for project monitoring in

support of CI-ENERGIES teams. Moreover, the weak performance of contractors in works

implementation and administrative red tape in granting authorizations for exemptions from customs

duties and other tax charges on project equipment and materials could delay project implementation.

These risks will be mitigated by the qualification criteria for firms designed to eliminate those without

the required expertise, and also by the establishment of a tax unit charged with monitoring exemption

documents at the CI-ENERGIES Markets and Logistics Department.

38. Impact-related risks: The failure to connect rural households in the event of the unavailability

of counterpart funding to finance that activity and unequal access to electricity linked to gender or

situations of vulnerability. As a result of the central government’s commitment to provide the population

with access to electricity under the PEPT and from government funds, 90 000 rural households were

connected to the power grid between March 2014 and December 2015. The project will also finance the

income-generating activities of associations in situations of vulnerability to help provide them with the

necessary resources to cover their electricity costs.

V. LEGAL INSTRUMENTS AND AUTHORITY

A. Legal Instrument

39. The Bank and Côte d’Ivoire will sign a loan agreement in line with the conditions of the Bank

Group’s ADB sovereign window.

B. Conditions Associated with Bank’s Intervention

40. The Bank’s financing is subject to the following conditions:

Conditions precedent to Board presentation: the project’s presentation to the Board shall be subject to

the Borrower’s fulfilment of the following conditions, to the Bank’s satisfaction: (i) provide evidence

of the appointment of members of the Project Implementation Unit; and (ii) provide evidence of the

opening of the two bank accounts for the payment of counterpart resources and loan resources meant

for training;

Conditions precedent to loan effectiveness: effectiveness of the loan agreement shall be subject to the

Borrower’s fulfilment of conditions stipulated in Section 12.01 of the General Conditions Applicable

to Bank Loan Agreements and Guarantee Agreements.

Conditions precedent to first loan disbursement: in addition to effectiveness of the loan agreement, the

first loan disbursement shall be subject to fulfilment by the Borrower of the following condition: (i)

provide a copy of the loan resources on-lending agreement signed between the Republic of Côte d’Ivoire

and CI-ENERGIES.

11

Other conditions: the Borrower shall also fulfil, to the Bank’s satisfaction, the following condition: (i)

provide as the works progress, and no later than works start-up in the area concerned, evidence of the

compensation of project affected persons in that area in accordance with the Resettlement Action Plan

(RAP), the Environmental and Social Management Plan (ESMP), and the Bank’s relevant Rules and

Procedures, especially its Involuntary Resettlement Policy and its Integrated Safeguards System; and (ii)

provide, no later than six (6) months after the first disbursement, evidence of establishment of the Project

Steering Committee and the Project Monitoring Committee, as well as evidence of appointment of their

members.

Undertakings: the Borrower shall, to the Bank’s satisfaction, undertake to: (i) implement the Project,

the RAP and the ESMP, and have them implemented by the Executing Agency and its contractors in

accordance with: (a) the Bank’s rules and procedures; (b) national law; and (c) the recommendations,

specifications and procedures contained in the RAP and the ESMP; (ii) not start up any work on specific

areas without ensuring that project affected persons have been fully compensated; and (iii) provide the

Bank with half-yearly RAP and ESMP implementation reports, including, if necessary, weaknesses and

remedial actions taken or to be taken.

VI. RECOMMENDATIONS

41. Management recommends that the Board of Directors approve the proposal for an ADB

sovereign loan of EUR 137.82 million (UA 110 million) to the Republic of Côte d’Ivoire to finance the

Transmission and Distribution Networks Reinforcement Project on the terms and conditions set forth in

this Memorandum and its annexes.

I

Annex 1: Web Links to Annexes

a) Link to the Country Strategy Paper (2013-2017 CSP) :

http://baobab.afdb.org/oivpdept/ONEC/_layouts/15/WopiFrame.aspx?sourcedoc=/oivpdept

/ONEC/Shared%20Documents/RCI%20-%20DSP%202013-

17%20%20RPP%20(2).pdf&action=default

b) Link to the Project Due Diligence Report:

http://baobab.afdb.org/oivpdept/ONEC/_layouts/15/WopiFrame.aspx?sourcedoc=/oivpdept

/ONEC/Shared%20Documents/Rapport%20de%20v%C3%A9rifications%20pr%C3%A9al

ables%20_rev%20az.docx&action=default

c) Link to the Detailed Project Implementation Plan (PDEP), which has been prepared:

http://baobab.afdb.org/oivpdept/ONEC/_layouts/15/WopiFrame.aspx?sourcedoc=/oivpdept

/ONEC/Shared%20Documents/PDEP-

du%20PRETD%20Version%20du%2008%2006%202016-V2%20(1).docx&action=default

d) Link to the Procurement Plan, which has been prepared:

http://baobab.afdb.org/oivpdept/ONEC/_layouts/15/WopiFrame.aspx?sourcedoc=/oivpdept

/ONEC/Shared%20Documents/PRETD%20PLAN%20DE%20PASSATION%20DE%20M

ARCHE.xlsx&action=default

e) Link to the Full Resettlement Plan Summary (English): http://www.afdb.org/fileadmin/uploads/afdb/Documents/Environmental-and-Social-

Assessments/Cote_d%E2%80%99Ivoire_-

_Grid_reinforcement_and_rural_electrification_project_-_Summary_RAP_-_04_2016.pdf

f) Link to the Environmental and Social Impact Assessment Summary (English) :

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Environmental-and-Social-

Assessments/Cote_d%E2%80%99Ivoire_-

_Grid_reinforcement_and_rural_electrification_project_-_Summary_ESIA_-_04_2016.pdf

g) Link to the Environmental and Social Impact Assessment Summary (French):

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Environmental-and-Social-

Assessments/Cote_d%E2%80%99Ivoire_-

_Projet_de_renforcement_du_r%C3%A9seau_de_transport_et_d%E2%80%99%C3%A9le

ctrification_rurale_-_R%C3%A9sum%C3%A9_EIES_-_04_2016.pdf

h) Link to the Full Resettlement Plan Summary (French):

http://www.afdb.org/fileadmin/uploads/afdb/Documents/Environmental-and-Social-

Assessments/Cote_Ivoire-

Projet_de_renforcement_du_r%C3%A9seau_de_transport_et_d%C3%A9lectrification_rur

ale-Resume_PCR.pdf

II

Annex 2 :Map of Project Area

The perimeters framed by a dashed line represent the project area

III

Annex 3: Detailed Project Costs

Project Cost by Expenditure Category

Expenditure Categories

EUR Million

% F.E. F.E. L.C. Total

Works 117.96 13.11 131.06 90%

Goods 0.00 0.90 0.90 0%

Services 6.32 2.71 9.02 70%

Operation 1.12 0.48 1.58 70%

Compensation of PAPs 0.00 7.56 7.56

Total Base Cost 125.39 24.75 150.12 84%

Provision for Contingencies 6.27 1.24 7.51 84%

Provision for Price Escalation 3.76 0.74 4.51 84%

Total Project Cost 135.41 26.73 162.14 84%

Project Sources of Financing

Sources of Financing

EUR Million

% Total F.E. L.C. Total

ADB 121.11 16.70 137.82 85%

GOVERNMENT 14.30 10.01 24.32 15%

Total Project Cost 135.41 26.73 162.14 100%

Project Cost by Expenditure Category and Source of Financing

Expenditure Categories EUR Million

ADB GVT Total

Works 118.03 13.03 131.06

Goods 0.09 0.00 0.90

Services 8.68 0.34 9.02

Operation 0.00 1.58 1.58

PAP Compensation 0.00 7.56 7.56

Total Base Cost 127.62 22.52 150.12

Provision for Physical Contingencies 6.38 1.13 7.51

Provision for Price Escalation 3.83 0.68 4.51

Total Project Cost 137.82 24.32 162.14

IV

Expenditure Schedule/Source of Financing

OUTPUTS 2017 2018 2019 TOTAL

AfDB Gov. Total AfDB Gov. Total AfDB Gov. Total AfDB Gov. TOTAL

Works 53.11 5.86 58.98 41.31 4.56 45.87 23.61 2.61 26.21 118.03 13.03 131.06

Goods 0.35 0.00 0.35 0 .34 0.00 0.34 0.21 0.00 0.21 0.90 0.00 0.90

Services 3.36 0.12 3.48 3.06 0.12 3.18 2.26 0.10 2.36 8.68 0.34 9.02

Operation 0.00 0.71 0.71 0.00 0.47 0.47 0.00 0.40 0.40 0.00 1.58 1.58

Compensation of

PAPs 0.00 3.40 3.40 0.00 2.27 2.27 0.00 1.89 1.89 0.00 7.56 7.56

Total base cost) 56.82 10.09 66.91 44.71 7.42 52.13 26.08 5.00 31.07 127.61 22.51 150.12

Physical

contingencies

(5%) 2.84 0.50 3.35 2.24 0.37 2.61 1.30 0.25 1.55 6.38 1.13 7.51

Price escalation

(3%) 1.70 0.30 2.01 1.31 0.22 1.56 0.78 0.15 0.93 3.83 0.68 4.51

TOTAL 61.37 10.89 72.27 48.29 8.01 56.30 28.16 5.40 33.56 137.82 24.32 162.14

V

Annex 4: Project Implementation Schedule

Project Activities 2016 2017 2018 2019

J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A J J

Approval and Effectiveness

Approval by BD

Loan Agreement Signature

Loan Agreement Effectiveness

Electricity Infrastructure

Bingerville Sub-Station

Recruitment of Contractors

Works Implementation

Duékoué-Zagné Line and Sub-

Stations

Recruitment of Contractors

Works Implementation

Duékoué and Zagné Telecoms

Recruitment of Contractors

Works Implementation

Soubré-San Pedro Line and Sub-

Stations

Recruitment of Contractors

Works Implementation

Soubré and San Pedro Telecoms

Recruitment of Contractors

Works Implementation

Restructuring of HVA networks

Recruitment of Contractors

Works Implementation

Cavally Rural Electrification

Recruitment of Contractors

Works Implementation

Guémon Rural Electrification

Recruitment of Contractors

Works Implementation

Tonkpi Rural Electrification

Recruitment of contractors

Recruitment of consultant

Works Control Mission

Recruitment of mission

Control and supervision

Studies on Future Projects

Recruitment of Consultant

Conduct of Studies

Support to PSV

Signature of Agreement

Service Delivery

Training

Recruitment of Training Firms

Conduct of training

Project Management

VI

Annex 5: Procurement Systems and Methods

Note: figures in parenthesis […] in the table refer to non-AfDB resources

No. Expenditure

Category Description

Lot Cost

(EUR

million)

Procurement

System

Procurement

Method

Works

Establishment of

Bingerville Source Sub-

Station 1

Installation of 3

225/20 kV 50

MVA

transformer bays

8.29 AfDB OCB6

Construction of Duékoué-

Zagné 225 kV line 3

Lot 1:

Construction of

225/33 kV 2x40

MVA sub-station

in Duékoué

10.24 AfDB OCB

Lot 2:

Construction of

Duékoué- Zagné

225 kV line (77

km) and looped

connection to the

Duékoué sub-

station on the

Buyo-Man line

12.36 AfDB OCB

Lot 3:

Construction of

the Zagné 225/33

kV 2x24 MVA

sub-station

9.20 AfDB OCB

Doubling of Soubré-San

Pedro line

3

Lot 1: Extension

of Soubré Sub-

Station

1.57 AfDB OCB

Lot2: San Pedro -

Soubré 225 kV

line (128 km)

19.09 AfDB OCB

Extension and

reinforcement of

225/90 kV sub-

stations,

including 2x

225/90 kV 100

MVA

transformers in

San Pedro

10.55 AfDB OCB

Delivery and assembly of

tele-control and

telecommunications

equipment

2

Duékoué and

Zagné sub-

stations

1.14 ADB ICB7

Soubré and San

Pedro sub-station 0.82 ADB ICB

Restructuring of HVA

networks

2

Lot 1: Bingerville

HVA networks 4.71 ADB NCB8

Telecommunications

equipment for Soubré and

San Pedro sub-stations

Lot 2: Duékoué.

Zagné and Taï

HVA networks

1.96 COUNTRY NCB

Electrification of 42

localities in Cavally

6 Cavally 1

(Blolequin) 1.20 COUNTRY NCB

Cavally 2

(Toulepleu)

[1.71] COUNTRY NCB

Cavally 3 COUNTRY NCB

6 OCB: Open Competitive Bidding 7 ICB: International Competitive Bidding 8 NCB: National Competitive Bidding

VII

(Guiglo 1) 1.26

Cavally 4

(Guiglo 2)

1.35 COUNTRY NCB

Cavally 5 (Taï 1)

[1.11] COUNTRY NCB

Cavally 6 (Taï 2)

1.09 COUNTRY NCB

Electrification of 82

localities in Guémon 11

Guémon 1

(Bangolo 1)

[1.73] COUNTRY NCB

Guémon 2

(Bangolo 2)

1.21 COUNTRY NCB

Guémon 3

(Bangolo 3)

1.95 COUNTRY NCB

Guémon 4

(Bangolo 4)

1.67 COUNTRY NCB

Guémon 5

(Douékoué)

1.96 COUNTRY NCB

Guémon 6

(Facobly 1)

0.75 COUNTRY NCB

Guémon 7

(Facobly 2)

1.47 COUNTRY NCB

Guémon 8

(Kouibly 1 1.09 COUNTRY NCB

Guémon 8

(Kouibly 2

1.47 COUNTRY NCB

Guémon 9

(Kouibly 3

1.10 COUNTRY NCB

Guémon 10

(Kouibly 4

[1.19] COUNTRY NCB

Guémon 11

(Kouibly 5)

[1.25] COUNTRY NCB

Electrification of 128

localities in Tonkpi

13

Tonkpi 1

(Biankouma 1)

1.83 COUNTRY NCB

Tonkpi 2

(Biankouma 2)

1.62 COUNTRY NCB

Tonkpi

3(Biankouma 3)

1.47 COUNTRY NCB

Tonkpi 4

(Sipilou)

1.67 COUNTRY NCB

Tonkpi 5

(Danane 1) 1.85 COUNTRY NCB

Tonkpi 6

(Danane 2)

2.13 COUNTRY NCB

Tonkpi 7(Danane

3)

1.85 COUNTRY NCB

Tonkpi 8

(Danane 4)

1.60 COUNTRY NCB

Tonkpi 9 (Man 1)

[1.86] COUNTRY NCB

Tonkpi 10 (Man

2)

1.37 COUNTRY NCB

Tonkpi 11(Zouan

Hounien 1)

1.14 COUNTRY NCB

Tonkpi 12(Zouan

Hounien 2)

1.16 COUNTRY NCB

Tonkpi 13(Zouan

Hounien 3)

[1.73] COUNTRY NCB

Household connections 1 The 252 localities [4.54] COUNTRY NCB

Rehabilitation of the

Dompleu fry stocking

station and of 20 fish

farms

0.14

United Nations

VIII

2 Services

Consulting Engineering

services for transmission

grid rehabilitation works

-

5.86 ADB QCBS9

Auditing of Accounts 0.09 ADB LCS10

Misc. Training 0.41 COUNTRY QCBS

Information, Education

Communication

[0.33]

COUNTRY QCBS

Preliminary studies on the

Anyama 225/33 kV sub-

station construction

project

0.56

COUNTRY QCBS

Preliminary studies on the

Project to Double the

Abidjan 225 kV loop

COUNTRY QCBS

Preliminary studies on the

construction of the

Tengrela 225/33 kV sub-

station and the Korhogo-

M’bengué – Tengrela –

Boundiali 225 kV high

voltage transmission line

0.56 COUNTRY QCBS

Preliminary studies on the

Project to Construct the

Bouake 3 sub-station and

double the Taabo –

Kossou – Bouaké 2 –

Bouaké 3 225kV line

0.56 COUNTRY QCBS11

3 Goods

Vehicles for PIU (9

vehicles)

[0.25]

COUNTRY NCB

Measurement testing

equipment

[0.10]

COUNTRY SP12

Office supplies [0.10] COUNTRY SB13

Procurement of office

furniture

[0.10]

COUNTRY SP

Vehicle maintenance [0.10] COUNTRY SP

Fuel [0.40] COUNTRY RCB14

Equipment for processing

cassava into attiéke (4)

0.22 United Nations SB15

Equipment for processing

cassava into flour (1)

0.12 United Nations SB

Rice processing

equipment (2)

0.18

United Nations SB

Fish smoking equipment 0.06 United Nations SB

Cold room 0.08 United Nations SB

9 QCBS: Quality and Cost-Based Selection 10 LCS: Least Cost Selection 11 QCBS: Quality-and Cost-Based Selection 12 SP: Simplified Procedures 13 SB: Sealed Bidding 14 LCB: Limited Competitive Bidding 14 SB: Sealed Bidding

15 SB: Sealed Bidding

IX

Annex 5: Justification of Level of Côte d’Ivoire’s Project Counterpart Funding

The proposed project will be jointly financed by the Bank and the Government of Côte d’Ivoire. The Bank’s

contribution covers 85% of the total cost, net of taxes and customs duties, through an ADB loan of EUR

137.82 million (UA 110 million). The estimated counterpart funds are EUR 24.32 million ( UA 19.40

million), i.e. 15% of the project cost. The level of counterpart funding was mutually determined with the

Government based on the following three criteria, in compliance with Section 4.2.2 of the Policy on

Expenditure Eligible for Bank Group Financing (Revised version of 10 December 2014):

i) Country’s Commitment to Implement its Development Programme

Following the implementation of the first National Development Plan (2012-2015 PND) which aimed to lay

the foundations for emergence in the wake of the 2011 post-electoral crisis, Côte d’Ivoire has recently

adopted its second National Development Plan (2016-2020 PND) whose main objective is to lead it towards

emergence by 2020 through a pro-active strategy. The 2016-2020 focuses on the following strategic thrusts:

(i) enhancement of the quality of institutions and governance; (ii) acceleration of human capital development

and social well-being; (iii) acceleration of the economy’s structural transformation through industrialization;

(iv) development of infrastructure evenly distributed nationwide and environmental conservation; and (v)

strengthening of regional integration and international cooperation. The estimated cost of the 2016-2020

PND is CFAF 30,000 billion. Energy sector actions implemented under the 2012-2015 PND raised

generation capacity from 1 391 MW in 2011 to 1 772 MW in 2015, i.e. a 28% increase, helped to rehabilitate

the transmission and distribution networks, and increase the population’s electricity access rate from 77 to

80%.

ii) Financing Allocated by the Country to the Target Sector by Bank Assistance

The estimated cost of the 2016-2020 PND is CFAF 30,000 billion, CFAF 4 589 billion (i.e. 15%) of which

will be allocated to the energy sector. Achievement of the outcomes of strategic thrust (iii) of the 2016-2020

PND and the Government’s determination to provide access to electricity for all by 2020 will require

increased generation capacity and extension of the transmission and distribution networks. According to

Ministry of Petroleum and Energy forecasts, power requirements are expected to reach about 3 000 MW in

2020, up by 69 % on 2015. Given the inherent uncertainty of gas exploration activities, the Government

intends to develop alternative sources, in particular the country’s hydropower potential estimated at 2 500

MW, which will reduce dependency on fossil fuels and the cost of generation. The ongoing construction of

the Soubré plant falls within the framework of this increase in generating capacity and diversification of

energy sources, and will be followed by three others also to be located on the Sassandra River, the ongoing

studies on which are being financed by the Bank.

iii) The Country’s Fiscal Situation and Debt Level

The fiscal policy set out in a medium-term expenditure framework is based on an increase in the expenditure

required to finance infrastructure and other development needs in a post-conflict context. For the past two

years, primary balance equilibrium has been virtually achieved while the overall deficit has been about 3%

of GDP, financed by recourse to regional and international financial markets. The country’s post-conflict

context with vast (re)construction and social and economic (re)insertion needs, coupled with the objective

of accelerated development as set out in the 2016-2020 PND, will continue to weigh heavily on government

finances.

The estimated tax ratio at the end of 2015 was 15.3% of GDP and, according to estimates, is expected to

improve in 2016. Eighty per cent (80%) of the 2016 budget represents domestic resources and 19.7%

external resources; 69.8% of the external resources, estimated at CFAF 988.5 billion, comprises project

loans and 30.2% budget support operations.

Debt restructuring under the HIPC initiative helped to maintain the public debt/GDP ratio at 45.6% in 2015,

with external public debt service representing 12% of central government revenue. Debt remains sustainable

X

according to both the sustainability analysis carried out by IMF services in 2015 and the country risk

assessment undertaken by AfDB services in the same year. The Medium-Term Debt Strategy (MTDS) for

2015-2019, adopted in 2014, will help to maintain this sustainability even if the future accumulation of

external debt, in particular non-concessional debt, must take into account the need to avoid the concentration

of maturities in the mid-2020s, and explore solutions to mitigate the refinancing risk.

iv) Country Financing Parameters

The country's financing parameters (CFP) regarding project cost sharing between the Bank and the Republic

of Côte d'Ivoire is being prepared. While waiting for the Bank to define its own financing parameters, the

still-valid analysis conducted by the World Bank for the Côte d’Ivoire in 2008 can be used. For the World

Bank, financing can attain 100% of the total project cost (including taxes). These parameters have not

changed despite Côte d’Ivoire’s access this year to the “Scale Up Facility” (an intermediate status between

IDA countries and IBRD countries).

In conclusion, based on the foregoing, and at the behest of Government, it is proposed that the national

contribution be fixed at 15% of the total cost excluding taxes for the Project. The contribution of the

Government of Côte d'Ivoire (EUR 24.32 million) for the Project will be used to partially finance the works,

the full cost of expropriations and operation fees of the implementing agency and the tax expenditure

associated with this project related to exemptions from customs duties and other taxes.