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Document of FL C PYThe World Bank

FOR OFFICIAL USE ONLY

Report No. 3912

PROJECT PERFORMANCE AUDIT REPORT

PAPUA NEW GUINEA SECOND POWER PROJECTLOAN 999-PNG

Operations Evaluation Department

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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PAPUA NEW GUINEA SECOND POWER PROJECT

(LOAN 999-PNG)

TABLE OF CONTENTSPage No.

Preface .................... .......... ............................ iBasic Data Sheet ...................................................... iiHighlights .. ....................................................... iv

Appendices: Comments from the Government ....................... vi

PROJECT COMPLETION REPORT

I. Introduction ............................... ......... 1

II. Project Identification and Preparation ..... 3........... 3

III. Project Implementation ............................ 4IV. Operating Performance ............. 9.................... 9V. Financial Performance ................................... 12

VI. Project Achievements and Economic Re-evaluation .......... 15VII. Bank Performance .............................. ......... 16

VIII. Conclusions and Lessons Learned ..................... .... 16

Annexes

1. Actual Disbursements vs. Appraisal Estimate .............. 18

2. Papua New Guinea Electricity Commission Comparison of

Appraisal Forecasts with Actual - Income Statements.... 19

3. Papua New Guinea Electricity Commission Comparison ofAppraisal Forecasts with Actual - Balance Sheets 20

4. Papua New Guinea Electricity Commission Comparison ofAppraisal Forecasts with Actual - Sources and

Applications of Funds ..................... .......... 21


PAPUA NEW GUINEA SECOND POWER PROJECT(LOAN 999-PNG)

PREFACE

This report presents the results of a performance audit of thePapua New Guinea Second Power Project, for which Loan 999-PNG of US$10.8million was made in May 1974 to the Government of Papua New Guinea Electric-ity Commission (ELCON). The loan was signed in June 1974, became effectivein December 1974, and was closed in December 1979.

The report consists of Highlights prepared by the OperationsEvaluation Department (OED) and a Project Completion Repoit (PCR) preparedby the East Asia and Pacific Regional Office. The PCR takes into accountthe findings of a completion mission which visited Papua New Guinea in March1981, and the information provided in a completion report submitted byELCOM.

In accordance with OED's abbreviated procedures, OED staff havereviewed the Appraisal and President's Reports, the loan documents, the

Minutes of the Board discussions, ELCOM's completion report and the PCR;the project experience was also discussed with Bank staff. On the basisof this limited revLew, the audit finds no reason to disagree with the

general analysis and conclusions of the PCR.

Following normal OED procedures, a copy of the draft audit reportwas sent to the Government and ELCOM for comments. Those comments which werereceived have been taken into account in finalizing the report and are alsoreproduced as appendices to the Highlights.

- ii -

PROJECT PERFORMANCE AUDIT BASIC DATA SHEET

PAPUA NEW GUINEA: SECOND POWER PROJECT(LOAN 999-PNG)

KEY PROJECT DATA

Appraisal Actual orItem Estimate Current Estimate

Total Project Cost (U!S$ million) 17.25 17.13Underrun (%) - 0.7

Loan Amount (US$ million) 10.8 10.8Disbursed ) -10.8

Novembec 30, 1981Repaid )- 0.87

Date Physical Components Completed 12/31/79 12/31/79Proportion Completed by AppraisalTarget Date (%) 100 100

Incremental Financial Rate of ReturnUpper Ramu (%) 18.8 13.5 /aTraining (%) 48.0 neg.-

Financial Performance Good Uncertain despite re-cent tariff increases

Institutional Performance Good Requiring improvement(see PCR paras. 4.04and 8.02)

Cumulative and Actual Disbursements

(US$ million)

As of June 30: 1974 1975 1976 1977 1978 1979 1980

(i) Appraisal Estimate 0.57 3.98 7.26 8.88 10.25 10.80 10.80(ii) Actual - 1.08 5.75 8.58 9.99 10.55 10.80

(ii) as % of (i) - 28 79 97 97 98 100

OTHER PROJECT DATA

Original Plan Actual

First Mention in Files or Timetable - 09/72Government's Application - 12/73Negotiations - 03/74Board Approval Date - 05/30/74Loan Agreement Date - 06/12/74Effectiveness Date 07/74 12/29/74

Closing Date 12/31/79 12/31/79Borrower The Government of Papua New Guinea

Executing Agency Papua New Guinea Electricity Commission (ELCOM)

Fiscal Year of Borrower Through 1977: July 1-June 30; After 1977: Jan. 1-Dec. 31

Follow-on Project Name None

/a See PPAM para. 4 and PCR paras. 6.02-6.04.

- iii -

MISSION DATA

Month/ No. of No. of Staff- Date ofItem Year Weeks Persons weeks Report

Identificatior/a 09/72 2.0 1 2.0 11/14/72Appraisal 06/73 6.0 2 12.0 05/15/74

Total 8.0 14.0

Supervision I/a 12/74 1.5 1 1.5 02/15/75Supervision 1I/a 07/75 2.0 1 2.0 09/08/75Supervision IIL/a 06/76 1.0 2 2.0 08/10/76Supervision IV.ta 09/77 1.0 1 1.0 10/20/77Supervision V 06/79 0.4 1 0.4 07/16/79Completion 03/81 0.4 1 0.4 04/08/81

Total 6.3 7.3

COUNTRY EXCHANGE RATES

Name of Currency (Abbreviation) Kina (K)LbAppraisal Year Average (1973) Exchange Rate: US$1 = K 0.6722Completion Year (1979) US$1 = K 0.6902

/a Including supervision of the First Power Project.

/b Kina was introduced in 1975. 1 K = 100 Toea = 1 A$ (Australian dollar)before 1975.

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PAPIJA NEW GUINEA SECOND POWER PROJECT(LOAN 999-PNG)

HIGHLIGHTS

1. The second power project, supported by a Bank loan (999-PNG)of US$10.8 million, aimed at helping to strengthen the Papua New Guinea

Electricity Commission (ELCOM) and reduce its dependence upon expatriate

assistance. The project consisted of: (i) technical assistance for ELCOM'sin-service training program during the period 1974-79 (about 44% of the

loan); (ii) expansion of ELCOM's distribution network (about 22% of the

loan); and (iii) financing to cover the cost overrun on the Upper Ramu

Hydroelectric Project (34% of the loan), which was the major component of the

first power project (Loan 737-PNG).Il. The total cost of the project wasestimated at US$17.25 million, and the project was to be completed by end

1979.

2. In line with the Government's policy of encouraging Papua New

Guinea nationals to play a greater part in the economy, the objective of

the technical assistance component of the project was to reduce ELCOM's

expatriate staff from 240 in 1974 (21% of total staff) to 34 in 1980 (2%of total staff) by training 528 nationals. The distribution component, which

included rehabilitation, strengthening of existing systems and expansion,

was expected to be sufficient to meet ELCOM's needs through 1979.

3. The physical components of the project were completed on time,

with only few modifications and within the estimated cost (PCR paras. 3.03

and 3.07-3.13). However, the objectives of the technical assistance program,as envisaged at appraisal, were not achieved. Although the degree of local

staff participation reached 94% by mid-1980, the number of expatriates among

ELCOM's personnel totaled 169 instead of the 34 expected at appraisal (PCR

para. 1.05). High turnover of expatriate staff designated as trainers

and the moving of some trainers to technical positions to enable ELCOM tofunction seem to have been the major reasons for the disappointing results

(PCR paras. 3.04-3.05).

4. The incremental financial rate of return (IFRR) on the Upper Ramu

Hydroelectric project is now recalculated at 13.5% compared with 18.8% esti-

mated at the time of appraisal of the second project (PCR para. 6.02);the lower IFRR is due mainly to higher than expected operating costs. At

1/ A Project Performance Audit Report was prepared for the "Upper Ramu

Hydroelectric Project" (Loan 737-PNG) in October 1979, OED ReportNo. 2687. The cost overrun on the first project was mainly attributable

to exchange rate adjustments.

- v -

appraisal, an IFRR was calculated on the training component of the project,

using as benefits the financial savings due to the salary differential between

expatriate and local staff of equivalent grade and responsibility. The

discount rate which equalized ELCOM's cost without the training (continuedemployment of expatriates) and ELCOM's cost with in-service training (reducing

the number of expatriates over time as local staff would accept full opera-tional responsibility) was found to be in excess of 48%. The calculation did

not take into consideration the quality of work performed which is, of course,difficult to quantify, and it is not clear over how long a time period theexpatriates were expected to be phased out, or whether the replacement ofexpatriates by locals was assumed to be on a one-for-one basis. For reasonsfurther described in the PCR (para. 6.04), the IFRR of the training element of

the completed project was not calculated. However, it is expected that theIFRR would be negative in view of the increased number of expatriates and thecost of the consultants who have recently been brought in to strengthenELCOM's planning and engineering capabilities (PCR para. 6.04). No IFRR wascalculated at appraisal or at project completion for the distribution compo-nent of the project (PCR para. 6.03).

5. Actual financial performance during the earlier years of projectimplementation was satisfactory, due principally to tariff increases andrescheduling of debts. However, ELCOM incurred losses in 1980 and with thetariff increases which were approved from November 1980 and from April 1981,it is expected that ELCOM will only just break even in 1981. The rate ofreturn covenant (on nrevalued assets) was met in some years; audited accounts

have only been prepared up to 1977 (PCR paras. 5.01-5.09). ELCOM is currentlyfacing institutional problems, which are partly due to the inexperience ofits management and staff (PCR para. 8.02), and has in consequence recentlyappointed a team of consultants to provide supporting services in management,system planning and engineering (PCR paras 4.04-4.05). While Bank supervisionof the physical part of the project appears to have been adequate, ELCOM could

probably have benefited from more supervision of the training component (PCRpara. 7.02).

6. An important lesson emerging from the experience of this projectand which would be important for any possible future lending to ELCOM isthat training programs should be more carefully planned and supervised toachieve greater success in increasing the degree of local staff partici-pation in the management and operation of ELCOM. Furthermore, as the PCRpoints out (para. 8.04), in-service training should be carried out overa longer period of time and expatriate support should be maintained untillocal counterparts are sufficiently experienced to take over.

- vi -

APPENDIX 1

COMMENTS FROM THE GOVERNMENT

FINANCE NE22,218

MR SHIV S. KAPUR

DIRECTORi':2 NA -8 Ai IV

OPERATIONS EVAL,]ATIQ)JPL

WORLD BANK

wASHJNiTON

REF URTELEX 5 MAR. 82 AND URLETTER Ai\D RPT ON LOAJ4 999 PåG SECOND

POWER PRGJECT 25 JA,N 82. DISCUSSIONS HAVE 3EEN HEL.D WITH

RELEVANT 130VT. OFFICIALS AND PNG ELECTRICITY STAFF.

CCNSENSUS VIEA IS COi 1CURRENCE aITH 3A,mK'S PROJECT PERFRi.AiCE

AUDIT RPT lII PARTICULAR AWREEMENT wITH BAiNK'S STATErIENTS A33UT

ISTITUTIOrN BUILD,G AND LOCALISATION PORTION OF THE LUAtm.

WITH BEST REGARDS

EKERE 'lORAUTA

SECR.ETARY FOR Fi\ýANCE P:3.

WORLDBANK440098

FI'A*CJ 1122218iJ<.i

- vii -

APPENDIX 2

COMMENTS FROM THE GOVERNMENT

WU INFOMASTER 1-003837A068 03/09/82

ICS I·PMWGWC WSH

ZCZC 03130 03-09 r851A EST&:'TLX 89650 WORLDBANK WSH

TB

1-?07679Gn67 03/08/82

IISS F M WUI 08 2049

UW A86n2 SWU184 LAA767 T380

UWNX CC NEXX 058

PORTMIORESBY TLX PNG 58 9 lO1

lH-U S. KAPUR

DI kEGTOR

OPErATIONS EVALUATIUN DEPT

WA SHI NGTON USA

RE YR TEl AND LETTER. PROJECT PERFO:VMANCE AUDI T REPORT IN ORDER

CORPECTION HOQAEVER ON PAGE ELEVEN. DELETE SENTENCE ''THE HEAD OF

THE LONSULTANTS TEAM1 .,!LL ACT Ab ELCOr GENERAL MANAGER' '. REPLACE

vITH '' AN EXPATRIATE GENERAL :ANAGER WJILL E APPOINTED SHDRTLY''

vY APOLOGIES FOR DELAYI% RESPONSEkN A A ONI A) SECHET A hY

Mn5n EcST

PAPUA NEW GUINEA

SECOND POWER PROJECT

(Loan 999-PNG)


I. INTRODUCTION

The Power Sector

1.01 The Papua New Guinea Electricity Commission (ELCOM) was establishedon July 1, 1963. It was originally responsible for the operation of 9 gen-

erating centers consLsting of Port Moresby, Lae, Madang, Goroka, Wewak,

Samarai, Rabaul, Kokopo and Kavieng. In 1972, Kieta, which was supplied fromthe nearby BouganvilLe Copper Mine, was transferred to ELCOM by the Papua

New Guinea Administration and in 1975 following completion of the firstphase of the Upper Ramu hydroelectric scheme (financed under Loan 737-PNG)

the towns of Mt. Hagen, Kianantu and Kundiawa which were supplied from Ramuwere also taken over by ELCOM. The following Government generating centers

were transferred to ELCOM in January 1979: Aitape, Alotau, Bainyik, Buka,

Daru, Finschhafen, Kerema, Kimbe, Lombrum/Lorengau, Mendi, Popondetta andVanimo. In addition, there are about 130 Government-owned small andisolated generating centers served and maintained by ELCOM.

1.02 At the end of 1979, the installed capacity and generation in thecountry were:

Installed capacity (MW) Generation

Hydro Thermal Total (%) (GWh) (%)

ELCOM 94.0 73.7 167.7 (51.9) 395 (31.5)

Government - 10.0 10.0 (3.1) 31 ( 2.5)

Bougainville

copper mine - 135.0 135.0 (41.8) 790 (63.0)

PNG forest products 5.5 - 5.5 (1.7) 23 ( 1.8)

Other private - 5.0 5.0 (1.5) 15 ( 1.2)

Total 99.5 223.7 323.2 (100.0) 1,254 (100.0)

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1.03 The major transmission system, which also forms part of the UpperRamu scheme financed by the Bank, consists of about 540 km of 132/66 kVtransmission lines which link the highland's towns of Goroka, Mt. Hagen,Kundiawa, Kainantu and the north coastal towns of Lae and Madang.

The Borrower and the Beneficiary

1.04 The Borrower of the Bank loan was the Government of Papua New Guinea(which became an independent nation in 1975); the Guarantor, the Commonwealthof Australia; and the Beneficiary, ELCOM. Following independence, Papua NewGuinea adopted its own currency, the Kina, to replace the Australian dollar.ELCOM is a statutory authority established under the Electricity Act of 1961.ELCOM's Board consisted of a full-time Chairman (Commissioner) and fiveother associate commissioners (part time), responsible to the Minister ofMinerals and Energy. ELCOM has four Assistant General Managers who head thedepartments of Management, Commercial, Development and Operations. Followinga recent amendment to the Electricity Act (gazetted on March 27, 1981) theposition of Commissioner was abolished and a general manager was appointed bythe Minister of Minerals and Energy as the Chief Executive Officer. He is notto be a member of the Commission. At the same time, the Commission wasre-established with four Government representatives comprising the departmentheads of Finance, Minerals and Energy, Lands and the National Planning Office.In addition, two commissioners will be appointed to represent the privatesector.

1.05 As of July 31, 1980, ELCOM's personnel totalled 2,734, of whom2,565 (94%) were nationals and 169 (6%) were expatriates. This compares withELCOM-s targets for mid-1980 at the time of appraisal of about 1,700 ofwhom about 34 or 2% would be expatriates. Lack of expertise in sometechnical areas has necessitated continued overseas recruitment. Thepositions of the commissioner, three of the four Assistant General Managersand seven of the twelve division chiefs have been occupied by Papua NewGuinea nationals.

1.06 This was the second power loan to the country. The first one(Loan 737-PNG) financed the Upper Ramu Hydroelectric Development Project,which consisted of the construction of a diversion weir, an underground powerstation (3 x 15 RW), a surface control building and step-up switchyard,540 km of 132/66 kV transmission lines and associated substations, andconsultancy services.

1.07 The conclusions of the PPAR for the Upper Ramu HydroelectricProject were that (i) the project was delayed by about nine months (para.3.07) with a cost overrun of about 29% primarily because of currency fluc-tuations; (ii) financial results were generally lower than originallyenvisaged due mainly to increases in operating costs not fully covered bytariff increases. The lessons learned were that: (i) detailed projectpreparation, particularly extensive exploratory drilling, contributedtowards successful implementation of the project; and (ii) training programshelped to cope with the policy of employing national staff.

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II. PROJECT IDENTIFICATION AND PREPARATION

2.01 The project was identified during a supervision mission of theUpper Ramu Hydroelectric Project in September/October 1972; its preparationwas carried out by ELCOM from October 1972 through May 1973 and it wasappraised in June 1973.

Project Description

2.02 The project consisted of:

Part A: Technical assistance for ELCOM-s in-service training programduring the period 1974 through 1979, which provided for385 trainer man-years and 1,038 trainee man-years;

Part B: Financing to cover the shortfall in funds for meetingthe off-shore expenditures for the Upper Ramu Hydro-electric Project attributable to exchange rate adjustments;and

Part C: Distribution expansion consisting of about 150 distributiontransformers, about 47 km of 11 kV and 22 kV primary dis-tribution lines, and about 119 km of secondary distributionlines together with service connections, street lights andmeters.

Project Role in ELCOM's Long-Term Plan

2.03 Part A of the project was designed to accelerate the replacement ofexpatriate staff by PNG nationals. This followed the government'spolicy of increased localization to enable the national populationto play a greater part in the economy and encourage greater selfreliance.

Part B of the project facilitated the completion of the Upper RamuHydroelectric Project. The construction of the hydropower stationand associated transmission lines was of significant economicimportance, permitting the use of an indigenous, renewable andnon-polluting resource. The Upper Ramu system now forms thesecond largest connected system in Papua New Guinea, and permitsthe diesel stations at Lae, Madang, Goroka, Kundiawa, Kianantuand Mt. Hagen to be operated as standby facilities. The areaserved by Upper Ramu contains almost half of the country spopulation., and has great potential for economic development.

Part C of the project helped finance the off-shore cost of thedistribution system expansion.

-4-

Loan Covenants

2.04 The covenants in the Project Agreement included:-

(a) Sec. 2.06: ELCOM shall continue to maintain in existence andoperate the Training Center.

(b) Sec. 3.02 (d): ELCOM shall exchange views with the Bank beforemaking any new appointments to the positions of the General Manager

the four Assistant General Managers and the Principal of theTraining Center.

(c) Sec. 4.02 ELCOM shall furnish copies of its financial statementsand audit report within 4 months of the end of its fiscal year.

(d) Sec. 4.03 (b): ELCOM shall take all necessary steps to establishand maintain tariffs for electric power services and take such otheractions as shall be required to earn an annual rate of return ofnot less than 9% in the fiscal years 1974 through 1976 and notless than 10% thereafter on average net fixed assets in service,valued from time to time in accordance with sound and consistentlymaintained methods of valuation acceptable to the Bank.

(e) Sec. 4.04: Prior to undertaking any construction projectestimated to cost in excess of $A 10 million, ELCOM shallobtain the approval of the Bank for the financial plan coveringsuch project.

(f) Sec. 4.05 (a): ELCOM shall not incur debt unless its netrevenue for the fiscal year preceding the date of such incurrenceor a later 12 month period, which ever is greater, shall be notless than 1.5 times the maximum debt service requirements.

(g) Sec. 4.06: ELCOM shall not declare or pay any dividendsprior to July 1, 1978.

All the above covenants have been met with the exception of (c) and (d) (seeparas. 5.03-5.08). In the case of (d) the rate of return target was metduring fiscal years 1977 and 1978.

III. PROJECT IMPLEMENTATION

Effectiveness and Startup

3.01 The loan became effective on December 29, 1974, about six monthsafter loan signing but about 4 1/2 months after the due date for loaneffectiveness. The reasons for the delay were: (a) elections in Australia

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which affected the delay in the approval of the Guarantee Agreement by theAustralian Parliament, and (b) receipt of legal opinions from the Departmentof Law, PNG.

3.02 Tenders for the supply of the first-year's requirements of distri-bution equipment and materials (Tender No. 15 A-M 74/75) were called inAugust 1974, opened on October 31, 1974 and awards were made in January 1975.Tenders for the supply of distribution equipment and materials for theremaining three-year-s requirements (Tenders No. 1-17 75/76) were advertisedin early April 1975, opened on June 30, 1975 and awards were made inAugust/September 1975.

Project Implementation and Revisions

3.03 The project was carried out principally as designed. Minormodifications and variations were made during the execution of the project.

3.04 The actual number of trainers and trainees over the period 1974through 1979 compares with the appraisal estimate as follows:

Table 3.1: IN-SERVICE TRAINING - APPRAISAL VS. ACTUAL

Appraisal Estimate ActualTrainers Trainees Trainers/a Trainees/a

1974 99 /b1 162 /b 66 /b 1231975 107 240 75 801976 91 207 85 1451977 75 197 86 1411978 50 221 49 941979 25 /b 184 /b 24 118

Total 385 1,038 352 701(man-

years)

Ratio of trainees/trainers 2.7 2.0

/a Based on the number of trainers and trainees at the end of the fiscalyear.

/b Six months only.

- 6 -

3.05 In the first phases of project implementation (1974 and 1975),ELCOM had problems retaining the trainers due to movement of overseas staffback to Australia following self-government and then independence and diffi-culties in recruiting expatriate staff. Some trainers had to be moved toin-line positions to enable ELCOM to function and this tended to reduce theeffectiveness of the in-service training program. This contributed to alesser number of trainees being trained than originally expected. Anothercontributing factor was the loss of ELCOM trainees and trained staff to otheremployers who offered better salaries and conditions than ELCOM could offer.

3.06 The physical works accomplished under Part C of the project comparewith the appraisal estimate as follows:

Table 3.2: DISTRIBUTION EXPANSION-APPRAISAL VS. ACTUAL

AppraisalUnit Estimate Actual

Distribution TransformersNumber ea 150 109MVA 15 20

22/11 kV Primary Distribution Lines km 47 58.1

Secondary Distribution Lines km 119 152.3

Service Connections ea 8,000 4,165 /a

Street Lights ea 900 798

Meters ea 9,000 4,613 /a

/a The actual service connections and meters installed at Port Moresby,Madang, Goroka, Wewak, Rabaul and Mt. Hagen were all considerably lessthan the appraisal estimates, due to less favorable economic environment.

Implementation Schedule

3.07 Civil works of Part B of the project, the Upper Ramu HydroelectricProject, were completed on May 23, 1975, about three months ahead ofschedule. The commissioning of the generating units was however delayedabout nine months due to the following reasons:

(a) late ordering of cables, the delivery of which was further delayedas a result of industrial disputes at the manufacturers factory;

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(b) delays by the alternator subcontractor in the fabrication of polewheel plates (pole wheel plates were initially rejected during shop

tests for not complying with specifcations);

(c) delays in the manufacture and shipping of turbine governors;

(d) late preparation of the final design data for control board manu-

facture;

(e) lack of coordination and a proper manufacturing and erectionprogram;

(f) late arrival of erection and test personnel; and

(g) an inadequate supply of test instruments.

3.08 Part A and Part C of the project were completed as scheduled.

Procurement

3.09 Preparation of bid documents for procurement of distribution equip-

ment and materials was in accordance with the Bank's guidelines. Processingof tenders and award. of contracts were carried out equitably and

expeditiously. There was little time lost on procurement.

Project Cost

3.10 The project cost is within the original estimate as indicatedbelow:

Table 3.3: PROJECT COST-APPRAISAL VS. ACTUAL(in $000-s)

Appraisal Estimates Actual

Foreign Local Total Foreign Local Total

I. Technical Assistance 4,700 3,111 7,811 5,436 3,598 9,034

II. Ramu Project Shortfall 3,753 - 3,753 3,617 3,617(Loan 737-PNG)

III. Distribution Expansion 2,347 3,339 5,686 1,747 2,734 4,481

Total 10,800 6,450 17,250 10,800 6,332 17,132

-8-

Disbursements

3.11 The loan amount of US$10.8 million was fully disbursed as of theoriginal closing date of December 31, 1979. The actual disbursements againstthe appraisal forecast are shown in Annex 1.

3.12 The actual allocation of the proceeds of the loan compared withSchedule I of the Loan Agreement is as follows:

Table 3.4: ALLOCATION OF THE PROCEEDS OF THE LOAN

Category Original Actual------------ Us$ ---------------

I. Part A: Technical Assistance 4,700,000 5,435,407

II. Part B: Loan 737-PNG Shortfall 3,750,000 3,617,297

III. Part C: Distribution Equipmentand Materials 1,850,000 1,747,296

IV. Unallocated 500,000

Total 10,800,000 10,800,000

3.13 The increase in funds required to meet the in-service trainingwas caused by the higher cost of retaining trainers due to inflation andthe strength of the PNG currency. This applied particularly to theengineering divisions where it was necessary (and is still necessary) torecruit senior expatriate trainers. The problem was compounded by the lackof suitably qualified nationals to hold senior technical positions. As atJuly 31, 1978, expenditures for Part A of the loan reached the originallyallocated amount of US$4.7 million. The unallocated amount of US$0.5million was therefore transferred to Part A. The expenditures required tomeet the shortfall in off-shore expenditures under Loan 737-PNG and thepurchase of goods and services under Part C of the loan were less thananticipated, and an amount of US$235,407 was transferred from Parts B and Cto Part A of the loan.

Project Supervision

3.14 The field supervision of civil works and electrical and mechanicalworks for the Upper Ramu Project was carried out by the consultants (seePPAR of Loan 737-PNG). No consultants were required for the distributionexpansion. All works were undertaken and supervised by ELCOM.

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IV. OPERATING PERFORMANCE

System Growth and Operations

4.01 ELCOM's gowth and operations over the period 1974/75 to 1979 aresummarized below:

Table 4.1: OPERATING STATISTICS

1974/75 1975/76 1976/77 1977/a 1978 1979

(half year)act. (est.) act. (est.) act. (est.) act. act. (est.) act. (est.)

Installed capacity (MW) 88.2 104.3 126.5 127.7 127.9 167.7Maximum demand (MW) 44.0 (50.7) 48.2 (58.6) 51.5 (64.2) 61.0 64.4 (68.2) 79.9(73.3)/bEnergy generation (Gwh) 279.6(259.3) 309.0(295.4) 334.1(318.7) 175.0 396.8(342.6) 440.1(368.9)/b

Energy sales (Gwh) 255.8(234.0) 274.0(265.8) 302.9(285.6) 153.33 338.8(308.1) 379.6(330.8)/b

System losses (%) 8.5 11.3 9.3 12.4 14.6 13.8No. of consumers

- Domestic 21,805 23,435 24,911 25,440 26,721 31,377- General supply 4,848 4,954 5,158 5,393 5,611 6,797- Maximum demand 21 20 21 22 24 29- Public lighting 1 1 1 1 1 1

0

Total 26,675 28,410 30,091 30,856 32,357 38,204

No. of employees

- Expatriate 207(225) 166(180) 123(100) 135 134(75) 127 (50)/b- National 1,553 1,667 1,790 1,795 2,156 2,420

Total 1,760 1,833 1,913 1,930 2,290 2,547

No. of consumers per

employee 15 15 15 16 14 15

Sales per employee

(kWh) 143,340 149,482 158,338 - 147,948 149,038

/a Since 1977, ELCOM's fiscal year was changed to January 1 - December 31.

/b Figures shown in the brackets are those estimated in the appraisal report.

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4.02 ELCOM's generation centres are isolated and because of this thenumber of consumers per employee is low.

Staff Training and Development

4.03 ELCOM operates an extensive training center, offering courses fortechnicians, clerks and trades skills. There are approximately 400 studentsattending various courses at the training center at any given time.Apprenticeships are provided in the electrical, mechanical and commercialfields. Other courses include training in management, supervision andcommunications. In addition to those attending ELCOM's training center,there are about 40 students being sponsored at universities and collegeswithin Papua-New Guinea.

4.04 At the time of appraisal of the Second Power Project, ELCOM-smanagement was described as "able" and the staff "competent." At that timethe management was largely in the hands of expatriate Australians. However,following Papua-New Guinea's independence in 1975, the Government stepped upits localization policy under which it encouraged appointment of youngnationals to positions previously held by expatriates. Thus in pursuance ofthis policy, ELCOM appointed Papua-New Guineans to the top positions in chargeof the Engineering, Administration, Training and Commercial Divisions. Theincumbents were to step aside and become in-service trainers leaving the newappointees and the Commissioner (who was also a national appointed in 1974)to take full responsibility. The Government informed the Bank of thesechanges and the Bank concurred with the appointments. However, shortly

after the new management was in place, the former expatriates who had becomefor practical purposes redundant began to leave. From this point, whichoccurred about the end of 1976, it would appear that ELCOM's current tech-nical and institutional problems began to emerge. The new managers were notsupported by the former managers for sufficiently long to allow them todevelop the experience their new responsibilities required. In 1979, a newcommissioner was appointed from within ELCOM following a review of ELCOM-stop management structure by consultants in consultation with the Government'sPublic Service Commission. In the subsequent reorganization, ELCOM replacedsome of its top management. However, early in 1981 the Government, appar-ently dissatisfied with ELCOM's management and aware of growing institutionaland technical problems, replaced the Commissioner with an expatriate generalmanager on a temporary basis (para. 1.04). It has since appointed a team ofconsultants to strengthen ELCOM's planning and engineering capability. Anexpatriate general manager will be appointed shortly. In addi-tion, ELCOM has increased the number of expatriates particularly in financeand commercial positions and transferred some of the former top managementstaff to other positions. By the end of 1980, ELCOM expected to haveincreased the number of expatriates to 200 from the level at mid-1980 of 169.

4.05 In retrospect, it would appear that the process of localizingELCOM's staff particularly at management levels was too rapid. As a resultit is facing severe institutional and technical problems which are probablynot able to be corrected in the short-term e.g.: decline in the rated

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capacity of some of its plant due to inadequate maintenance, load shedding dueto poor plant efficiency and failure to plan and construct new capacity tomeet long-term system growth.

V. FINANCIAL PERFORMANCE

Financial Results

5.01 Energy sales during the four and one half year period 1973/74 to1979 increased at an average annual compound rate of 11% and revenues fromenergy sales had an average compound growth of 24% p.a. Operating expensesincreased at an average annual compound rate of 23%; and net income beforeinterest at a rate of 30%.

5.02 ELCOM's income statements, balance sheets and sources and applica-tions of funds statements for the period 1973/74 to 1979 are shown inAnnexes 2, 3, and 4. The actual results are compared with those forecast atthe time of appraisal. The key indicators are summarized here:

- 13 -

Table 5.1: KEY INDICATORS

Half-year Dec Dec

to 1978 19791973/74 1974/75 1975/76 1976/77 Dec 1977

Revenue per kWh sold (Toea) Ia.Appraisal 4.00 3.99 4.04 4.04 - 4.04 4.03Actual 3.85 4.34 5.45 6.22 6.22 6.17 6.15

Operating ratio (%) /bAppraisal 67 66 59 59 - 61 63Actual 80 80 69 57 55 61 76

Rate of return (%) /c

Appraisal 9.5 9.7 8.4 6.9 - 7.3 7.4Actual 5.9 6.9 8.7 11.3 12.0 11.5 7.9

Debt service coverage /dAppraisal 2.5 2.1 1.9 1.6 - 1.6 1.6Actual 1.4 1.6 2.9 1.3 2.6 2.7 2.2

Debt/Equity ratio /eAppraisal 80/20 81/19 76/24 75/25 - 78/22 77/23Actual 74/26 79/21 77/23 53/47 50/50 48/52 46/54

/a Toea 1 = US cents 1.45 (10) Toea = 1 kina)./b Operating expenses (including depreciation) as percentage of operating revenue.

Tc Operating income as percentage of rate base on historic cost basis./d Times that internal cash generation (operating income plus depreciation) covers debt

service./e Long-term debt to equity and reserves.

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Financial Covenants

5.03 The Project Agreement requires that ELCOM take all necessary stepsto achieve an annual rate of return /1 of not less than 9% in the fiscal years1974 through 1976 and not less than 10% thereafter (para. 8.03). For FY74and 75, the actual rates of return (ROR) were lower than the covenanted ratebecause of larger than expected increases in operating costs. Two tariffincreases (the first effective from December 1974 and the other from December1975) were implemented which helped increase the average price per kWh soldfrom less than 4 Toea in FY74 to about 6 Toea in FY76 and thereafter. ForFY76, the actual ROR of 8.7% was almost equal to the covenanted rate. In thesubsequent years 1977 (half year) and 1978, ELCOM's actual performance waswell above the 10% ROR covenanted in the Loan Agreement. However, ELCOM-soperating results for 1979 suffered a setback because of a substantial risein fuel costs (much greater than appraisal estimate). The ROR fell to 7.9%.ELCOM's debt service coverage was greater than 1.5 times throughout theperiod except in FY77 because of a much larger amortization of debt in thatyear due to prepayment of some of ELCOM's long-term debt as a part of therestructuring of its finances (paras. 5.04-5.06).

5.04 During a visit to Papua New Guinea by a Bank mission in mid-1975discussions took place with ELCOM and the PNG Department of Finance with aview to strengthening ELCOM-s financial position. Proposals were subsequentlydrawn up which were designed to improve ELCOM's debt/equity ratio from 79/21 in1974/75 to the 60/40 figure recommended by the Bank.

5.05 Since 1963 the Government had lent to ELCOM K42,112,000. This debtcomprised 55 loans bearing interest charges ranging from 5.125% to 10%, andmaturing in periods of either 25 or 40 years. All loans were to be repaid inlump sums at maturity. ELCOM had established a sinking fund to meet thesecommitments.

5.06 The financial package agreed to resulted in: conversion of 40% oftotal debt (K 16.8 million) to government equity; government purchase (atface value) of ELCOM's loan redemption sinking fund of K 4 million, and theuse of the proceeds to reduce the debt; consolidation into a single loan ofthe remaining debt (K 21.3 million) bearing an 8% interest charge andrepayable over 40 years (equal semi-annual payments of K 0.9 million); adividend of K 0.5 million to be paid to the government for fiscal year endingJune 30, 1977, and further dividend payments to be determined by negotiationbetween Government and ELCOM. This restructuring was effective fromJanuary 1, 1977.

5.07 In view of the substantial improvement in ELCOM's liquidity posi-

tion, the Bank agreed to permit ELCOM to make dividend payments before July 1,1978 (the date set in the Loan Covenants).

/1 On average net fixed assets in operation (valued from time to time inaccordance with sound and consistently maintained methods of valuationacceptible to the Bank. In practice ELCOM has not revalued its assets,and the rates of return given in para. 5.03 are on an unrevalued basis.

- 15 -

5.08 Further increases in the costs of fuel during 1980 and two conse-cutive dry years which have forced ELCOM to operate its gas turbine, nearPort Moresby, to supplement the reduced availability of its hydro plant haveresulted in ELCOM incurring a net loss of about US$7.5 million for 1980. Inresponse Government has approved rate increases of 35% from November 1, 1980and 25% from April 1, 1981 which are expected to be sufficient to enable ELCOMto breakeven in 1981 but not to enable it to achieve the 10% rate of returntarget in 1981.

Audit

5.09 Prior to independence in 1975, ELCOM's accounts were audited by theCommonwealth Audit Office which was part of the Australian Government. Since1975 they have beea audited by the Papua New Guinean Auditor General's Officein accordance with the Electricity Commission Act (1973). This arrangementwas accepted by the Bank on the understanding that the Commission wouldemploy an independent firm of professional accountants to either assist theAuditor General or provide a supplementary audit to the Government's auditif the latter did not have the personnel to carry out a commercial audit.The Auditor-General reported on ELCOM's accounts to December 31, 1977 onJuly 25, 1980 but has since been unable to finalize its audits forsubsequent years. Initially, the Papua New Guinea Auditor General haddifficulties attracting and retaining suitably qualified staff but ELCOM,for its part, has not been able to finalize its accounts for 1979. At theBank's instigation ELCOM had discussions with the Auditor-General and a newprogram for complei:ion of the audit reports has been established. A sugges-tion by the Bank that ELCOM engage a public accounting firm to carry out theaudits was not adopted.

VI. PROJECT ACHIEVEMENTS AND ECONOMIC RE-EVALUATION

Project Achievements

6.01 The project was executed as planned and the physical objectives ofthe project have been achieved. The Upper Ramu project is being operatedsatisfactorily and forms the second largest connected system in Papua NewGuinea. The distribution system expansion covering the 12 Governmentcenters is sufficient to meet ELCOM's needs through 1979. About 1/3 ofELCOM's national staff have benefited from the in-service training programbut in terms of meeting the Government's localization objectives it wouldappear to have been too optimistic.

- 16 -

Rate of return

6.02 The internal rate of return for the Upper Ramu Hydroelectric Project

at post project evaluation including the cost overruns financed under this

project and by ELCOM was 13.5% (see PPAR of Loan 737-PNG) compared to 18.8%

estimated during appraisal.

6.03 No rate of return calculation was made on the distribution component

of the project at the time of appraisal due to difficulty allocating incre-

mental revenues to existing and new facilities. Therefore for the same reason

no calculation has been made following project execution.

6.04 In the case of the in-service training component, it has not been

possible to recalculate the internal rate of return achieved because of factors

mentioned elsewhere in this report particularly (paras. 3.05 and 4.04):

a) some trainers had to be moved to in-line positions to enable ELCOM

to function.

b) the loss of ELCOM trainees and trained staff to other employers.

c) ELCOM had problems retaining the trainers due to movement of over-

seas staff back to Australia following self-government and thenindependence.

d) ELCOM has recently had to bring in consultants to strengthen ELCOM's

planning and engineering capabilities and increased the number of

expatriates particularly in finance and commercial positions.

If all these factors could be quantified, it is expected that the rate of

return would be negative.

VII. BANK PERFORMANCE

Project Content

7.01 The project was well packaged to meet ELCOM's specific needs.

Supervision

7.02 Four supervision missions were made from 1975 to 1979. The interval

between missions of about once a year was adequate. Normally only one staff

member was dispatched. However, the level of supervision of the training

component after 1976 was minimal, in retrospect, but given ELCOM's good per-

formance under the first power project and its very able management at the

commencement of the project and the fact that the Ramu hydro plant was operat-

ing satisfactorily by 1976, it would have been difficult to justify assigningmore staff time to supervision. The fact that there was no planned new

operations in the power sector probably contributed to the reduced time of

supervision visits.

- 17 -

Working Relationship

7.03 The working relationship between the Bank, the Government and ELCOMhas been very good. Recommendations made by the Bank missions have usuallybeen accepted or given due consideration (e.g. tariff adjustments and increasein government equity).

7.04 Due to staff constraints, ELCOM was late in the preparation of theproject completion rEport.

VIII. CONCLUSIONS AND LESSON LEARNED

8.01 The project was executed as planned. The objectives of the projecthave largely been met. The project was completed within schedule and withincost.

8.02 ELCOM is currently facing institutional and technical problems,some of which are due to elements beyond its control but others are due tothe inexperience of Lts management and staff. It appears that the process oflocalization has been too rapid. The in-service training program providedELCOM with the most-aeeded period of transition. In the letter ofDecember 10, 1979, t*e Bank asked ELCOM to provide assurances that there aresufficient qualified and trained staff to support the top management to ensurethe efficient operation and maintenance of the country's electricity supplyand to coordinate new construction currently underway or planned. Followingthe recent amendments to the Electricity Act, the Bank sent a telex to theMinistry of Finance on April 8, 1981 requesting information on actions beingplanned or already in course to further strengthen ELCOM's management andstaff. ELCOM has now engaged a consulting firm to provide supporting servicesin management, system planning and engineering.

8.03 Although ELCOM achieved the rate of return objective of 10% in 1977and 1978, it did so without any revaluation of its rate base which continuedto be valued in terms of acquisition or historical costs. If ELCOM had con-ducted regular revaluation of its assets to reflect changes in current pricelevels, it is unlikely that its performance would have met the covenant. Inmid-1979 ELCOM was asked to consider revaluation of its assets. During therecent visit of ELCOM's Acting General Manager, he agreed in principle to theneed for revaluation and to undertake this task subject to the availabilityof staff to accomplish this task.

8.04 An important lesson learned from this Project is that localizationespecially of senior management should be implemented over a much longerperiod of in-service training and expatriate support should be maintaineduntil local counterparts are sufficiently experienced to take over. TheBank's involvement in the power sector is still highly desirable.

- 18 -

ANNEX 1

PAPUA NEW GUINEA

SECOND POWER PROJECT (LOAN 999-PNG)


Actual Disbursements vs Appraisal Estimate

(US$'000)

Cumulative disbursement

Quarter Actual Appraisal

ending A B C Total estimate

1973/74March - - - - 270

June - - - - 570

1974/75September - - - - 1,670

December - - - - 2,800

March 303 - - 303 3,940

June 1,079 - - 1,079 3,890

1975/76September 1,356 361 81 1,998 5,810December 1,658 1,834 471 3,963 6,560March 2,145 2,156 688 4,989 6,910June 2,385 2,452 912 5,749 7,260

1976/77September 2,827 2,946 1,493 7,266 7,700December 2,937 3,185 1,669 7,791 8,100March 3,121 3,198 1,700 8,019 8,500June 3,590 3,246 1,747 8,583 8,880



1979/80September 5,168 3,675 1,747 10,590 10,800December 5,378 3,675 1,747 10,800 10,800

PAPUA NEW GUINEA



Papua New Guinea Electricity Commission

Comparison of Appraisal Forecasts with Actual - Income Statements(In thousands of Kina) /a

6 monthsto /b

Period ended: 06/30/74 06/30/75 06/30/76 06/30/77 12/31777 12/31/78 12/31/79Appr. Actual Appr- Actual p AcLual Appr. Actual Actual Actual Actual

Units generated and purchased (GWh) 245.5 254.9 261.6 279.6 296.1 309.1 319.2 337.9 174.9 350.0 440.1Units sold (GWh) 218.7 231.6 234.0 255.8 265.8 274.0 285.6 302.9 153.2 348.2 380.6Average price per kWh (Toea) 4.00 3.85 3.99 4.34 4.04 5.45 4.04 6.22 6.27 6.17 6.15

Operating RevenueSales of electricity 8,763 9,049 9,336 11,254 10,735 15,087 11,530 18,839 9,603 21,494 23,407Sales of water 38 33 45 35 55 38 65 38 18 39 48Other 75 107 82 100 87 103 92 117 44 102 1,207

Total Operating Revenue 8,876 9,189 9,463 11,389 10,877 15,228 11,687 18,994 9,665 21,635 24,662

Operating ExpensesOperations and maintenance 2,738 3,855 3,168 5,413 3,087 5,905 3,138 6,364 3,008 8,353 12,865Administrative expenses 1,767 2,052 1,541 2,045 1,240 1,705 1,152 1,624 847 1,896 2,657Depreciation 1,482 1,478 1,580 1,62S 2,104 2,894 2,595 2,774 1,424 2,923 3,195

Total Operating Expenses 5,987 7,385 6,289 9,083 6,431 10,504 6,885 10,762 5,279 13,172 18,717

Operating Income 2,889 1,804 3,174 2,306 4,446 4,724 4,802 8,232 4,386 8,463 5,945Nonoperating Income 103 328 106 303 101 197 99 643 69 115 972

Interest

Interest on loans 2,800 2,573 3,721 3,302 3,983 5,236 4,032 3,780 1,954 3,639 3,446Less: Interest capitalized (1,347) (1,009) (1,840) (1,607) (988) (3,284) - - - - (5)

Net Interest Expense 1,453 1,564 1,881 1,695 2,995 1,952 4,032 3,780 1,954 3,639 3,441

Net Income 1,539 568 1,399 914 1,552 2,969 869 5,095 2,501 4,939 3,476

Rate base 30.3 30.5 32.7 33.4 52.7 54.0 69.1 72.9 73.3 73.3 75.6% rate of return thereon 9.5 5.9 9.7 6.9 8.4 8.7 6.9 11.3 12.0 11.5 7.9Operating ratio 67 80 66 80 59 69 59 57 55 61 76

/a Appraisal estimates are in Australian $. In 1975, the Australian $ was replaced by the Kina (K).

/b In 1977 ELCOM changed its fiscal year to the calendar year; hence no appraisal data are given for FY78 and FY79.

PAPUA NEW GUINEA




Comparison of Appraisal Forecasts with Actual - Balance Sheets(In thousands of Kina)

Period ended: 06/30/74 06/30/75 06/30/76 06/30/77 12/31/77 12/31/78 12/31/79

Appr. Actual Appr. Actual Appr. Actual Appr. Actual Actual Actual Actual

Assets

Fixed AssetsGross fixed assets in

operation 40,110 39,565 45,466 45,863 83,198 85,332 84,687 89,262 90,295 93,670 100,633

Less: Depreciation (9,166) (8,603) (10,852) (10,104) (13,392) (13,026) (16,093) (15,821) (17,147) (20,132) (23,045)

Net Fixed Assets in

Operation 30,944 30,962 34,614 35,759 69,806 72,306 68,594 73,441 73,148 73,538 77,588

Work in progress 29,197 22,716 33,263 31,114 961 1,201 1,244 1,158 1,862 5,496 10,386O

Total Fixed Assets 60,141 53,678 67,877 66,873 70,767 73,507 69,838 74,599 75,010 79,034 87,974 1

Long-term investments 4,660 5,916 5,500 5,789 6,500 6,882 7,510 3,639 3,639 3,358 5,719

Current assets 5,201 3,869 4,738 6,147 4,075 8,129 5,540 14,078 18,286 19,954 19,225

Deferred charges 574 176 1,785 749 2,691 1,212 3,300 1,668 2,693 2,486 1,846

Total Assets 70,576 63,639 79,900 79,558 84,033 89,730 86,188 93,984 99,628 104,832 114,764

LiabilitiesEquity 14,275 16,279 15,874 15,224 19,021 18,341 20,172 41,593 44,191 49,130 54,802

Insurance fund 1,960 - 2,180 2,571 2,450 2,983 2,700 3,889 4,325 5,036 6,114

Long-term debt 48,392 44,868 57,534 58,135 60,225 63,020 60,900 46,314 44,906 44,710 45,934

Current liabilities 4,370 1,440 2,357 1,899 1,742 2,350 1,771 1,267 4,562 4,698 6,999

Deferred credits 1,579 1,052 1,955 1,729 595 3,036 645 921 1,644 1,258 915

Total Liabilities 70,576 63,639 79,900 79,558 84,033 89,730 86,188 93,984 99,628 104,832 114,764

Current Ratio 1.2 2.7 2.0 3.2 2.3 3.5 3.1 11.1 4.0 4.2 2.7

Debt/Equity Ratio 80/20 74/26 81/19 79/21 76/24 77/23 75/25 53/47 50/50 48/52 46/54

PAPUA NEW GUINEA




Comparison of Appraisal Forecasts with Actual -Sources and Applications of Funds

(In thousands of Kina)

Period ended: 06/30/74 06/30/75 06/30/76 06/30/77 12/31/77 12/31/78 12/31/79

Appr. Actual Appr. Actual Appr. Actual Appr. Actual Actual Actual Actual

Sources of Funds

ItLernal Cash Generation

Operating & nonoperating income 2,992 1,804 3,280 2,306 4,547 4,724 4,901 8,232 4,386 8,463 5,945

Depreciation & amortization 1,652 1,478 1,892 1,625 2,540 2,894 3,135 2,774 1,424 2,923 3,195

Provision for leave, etc. 747 - 125 - 125 - 140 - - - -

Total Internal Cash Generation 5,391 3,282 5,297 3,931 7,212 7,618 8,176 11,006 5,810 11,386 9,140

Borrowings 16,675 9,195 10,399 13,086 3,333 6,799 1,346 5,078 725 704 1,905

Capital contributions & advances 10 } 1,687 10 } 840 10 } 776 } 10 } 4,634 426 } 868 } 2,006

Deferred interest 626 } 341 } (1,296) } } }

Total Sources of Funds 22,702 14,164 16,047 17,857 9,259 15,193 9,532 20,718 6,961 12,958 13,051

Application of Funds

Construction Expenditures

Upper Ramu project 18,906 9,414 } 9,422 9,723 3,872 6,375 }1,772 - - - -

Other construction ) 2,419 } 4,972 } 3,182 } 3,887 1,737 7,009 11,854

Total Construction 18,906 11,833 9,422 14,695 3,872 9,557 1,772 3,887 1,737 7,009 11,854

Debt Service

Amortization 314 378 270 356 257 329 642 4,630 304 635 667

Interest expense 1,453 1,467 1,881 1,573 2,995 1,803 4,032 3,780 1,954 3,639 3,441

Sinking fund 390 444 420 492 462 502 478 - - - -

Total Debt Service 2,157 2,289 2,571 2,421 3,714 2,634 5,152 8,410 2,258 4,274 4,108

Increase (decrease) in working

capital (446) (437) 2,537 662 337 1,531 1,465 7,756 913 1,478 (3,370)

Training costs capitalized 638 1 479 1,417 } 79 1,236 11,471 11,043 665 12,053 } 197 } 459

Leave pay, etc. 1,447 1 100 } 100 1 1 100 1 1 }

Total Application of Funds 22,702 14,164 16,047 17,857 9,259 15,193 9,532 20,718 6,961 12,958 13,051

Debt service coverage 2.5 1.4 2.1 1.6 1.9 2.9 1.6 1.3 2.6 2.7 2.2 z

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