PROJECT APPRAISAL DOCUMENT REGIONAL...

Document of The World Bank

Report No: 34083-AFR

PROJECT APPRAISAL DOCUMENT REGIONAL POWER TRADE PROJECT

NILE BASIN INITIATIVE SHARED VISION PROGRAM

November, 2005

AFTNL Nile Team Africa and Middle East and North Africa Regions

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ABBREVIATIONS AND ACRONYMS

AfDB African Development Bank CIDA Canadian International Development Agency CIER Comite de Integracion Electrica Regional DRC Democratic Republic of the Congo EAC East African Community ENSAP Eastern Nile Subsidiary Action Program ICCON International Consortium for Cooperation on the Nile NBI Nile Basin Initiative NELSAP Nile Equatorial Lakes Subsidiary Action Program NGO Nongovernmental organization NILE-COM Council of Ministers of Water Affairs of the Nile Basin States NILE-SEC Nile Basin Initiative Secretariat NILE-TAC Nile Basin Initiative Technical Advisory Committee NORAD Norwegian Agency for Development Cooperation O&M Operations and Maintenance PEWG Power Experts Working Group PMU Project Management Unit RPT Regional Power Trade SAPP Southern Africa Power Pool SAP Subsidiary action program SIDA Swedish International Development Agency SVP Shared Vision Program UNDP United Nations Development Programme

Fiscal Year: January 1 – December 1

All dollar figures are in current U.S. dollars.

Vice Presidents:

Sector Director:

Sector Manager:

Task Team Leader

Gobind Nankani (AFR) and Christiaan Portman (MNA)

Michel Wormser, AFTPI Inger Andersen, MNSRE

David Grey, AFTNL

Mangesh Hoskote, AFTEG

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CONTENTS

A. Project Development Objective 1 1. Background 1 2. Project Development Objective 2 3. Key Performance Indicators (see Annex 1) 2

B. Strategic Context 2 1. Regional and Country Assistance Strategy 2 2. Main sector issues and strategy of Nile Basin countries 3 3. Sector issues to be addressed by the project and strategic choices 5

C. Project Description Summary 7 1. Project Components (See Annex 2 for a Detailed Description and Annex 3 for a Detailed

Cost Breakdown) 7 2. Key Policy and Institutional Reforms Supported by the Project 10 3. Benefits and Target Population 10 4. Institutional and Implementation Arrangements 11

D. Project Rationale 15 1. Project Alternatives Considered and Reasons for Rejection 15 2. Major Related Projects Financed by the Bank and Other Development Agencies 16 3. Lessons Learned and Reflected in Project Design 17 4. Indicators of Borrower and Recipient Commitment and Ownership 18 5. Value Added of Bank and Global Support in this Project 18

E. Summary Project Analysis 19 1. Economic 19 2. Financial 20 3. Technical 20 4. Institutional 20 5. Environmental 22 6. Social 22 7. Safeguard Policies 24

F. Sustainability and Risks 24 1. Sustainability 24 2. Critical Risks 24 3. Possible Controversial Aspects 26

G. Main Conditions 26 1. Requirements for Appraisal 26 2. Requirements for Negotiations 26 3. Requirements for Effectiveness 26 4. Other 27

H. Compliance with Bank Policies 27

Annex 1. Project Design Summary 29 Annex 2: Detailed Project Description 33 Annex 3: Estimated Total Project Costs 49 Annex 4. Energy Sector–Related CAS 51 Annex 5. Financial Summary 57 Annex 6: Procurements and Disbursement Arrangements 59 Annex 7: Project Processing Schedule 69 Annex 8: Documents in the Project File 70 Annex 9: Overview Description of the Nile Basin Initiative 71 Annex 10: Integrated Safeguards Data Sheet 87 Annex 11. Status of Power Sector Reform in Nile Basin Countries 91 Annex 12: Analysis of Regional Power Markets 95 Annex 13: Dar es Salaam Declaration 101 Annex 14: Status of SVP Projects 102

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NILE BASIN INITIATIVE Regional Power Trade Project

PROJECT APPRAISAL DOCUMENT Africa Region (AFR)

Middle East North Africa Region (MNA) AFTNL

Date: October 2005 Team Leader: Mangesh Hoskote

Sector Director: Michel Wormser Sector(s): General Energy & Mining (P)

Sector Manager: David Grey Theme(s):

Project ID: P075945

Project Financing Information [ ] Loan [ ] Credit [X] Grant [ ] Guarantee [ ] Other: For Loans/Credits/Other:Total Project Cost (US$m): 13.9 Cofinancing: 0.88 Total Financing by the NBTF (US$M): 13.1 (Phase 1: 5.71, Phase 2: 7.39)

Finance Plan: Sources Total US$ Million

Nile Basin Trust Fund/(NBTF) 13.1

Recipient Countries 0.88

TOTAL IMPLEMENTATION: 13.98

Borrower/Recipient: Nile Basin Initiative

Responsible Agency: Nile Basin Initiative

Address: P.O. Box 192, Entebbe, Uganda

Contact Person: Mr. Patrick Kahangire, Executive Director

Tel: 256 41 32 13 29 Fax: 256 41 32 09 71 Email: [email protected]

Estimated Disbursements for NBTF Phase 1 (Bank FY/US Million:) Y 2004 2005 2006 2007 2008 2009 2010

Annual 1.42 2.56 1.73 Cumulative 1.42 3.98 5.71 Project Implementation Period: Full project: 4 years; Initial project : 2.5 years Expected Effectiveness Date: May 1, 2004 Expected Closing Date: May 31, 2008

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A. PROJECT DEVELOPMENT OBJECTIVE

1. Background

Nile Basin Initiative. Recognizing their common concerns and interests, the Nile riparian countries1 took an historic step towards cooperation with the establishment in 1999 of the Nile Basin Initiative (NBI). The NBI seeks to develop the river in a cooperative manner, share substantial socio-economic benefits, and promote regional peace and security. The Initiative is guided by a Shared Vision “to achieve sustainable socio-economic development through the equitable utilization of, and benefit from, the common Nile Basin water resources.”2 To translate this shared vision into action, the NBI has launched a Strategic Action Program, which includes two complementary components: (1) a basinwide Shared Vision Program (SVP), and (2) subsidiary action programs.3 The NBI is led by a Council of Ministers in charge of water affairs from the member states (Nile-COM) with the support of a Technical Advisory Committee (Nile-TAC) and a Secretariat (Nile-SEC), located in Entebbe, Uganda. Additional information on the NBI is provided in Annex 9.

Shared Vision Program. The Shared Vision Program (SVP) is designed to establish a foundation for transboundary regional cooperation, promote exchange of experiences, enhance capacity, and create an enabling environment for investments on the ground, within an agreed upon framework. The SVP comprises seven thematic projects focusing on water resources, environment, power trade, agriculture, applied training, communication and stakeholder involvement, and macro-economics benefit sharing. The SVP projects were identified and prepared by the Nile riparians based on a complex participatory, multi-country process involving the NBI institutions and national experts from the Nile countries. These projects address the priority water-related sectors and cross-cutting themes identified by the Nile riparians to ensure an integrated and comprehensive approach to water resources development and management. Cooperative water resources management serve as a catalyst for broader socioeconomic development and regional cooperation, with benefits far exceeding those derived from the river itself. The SVP portfolio also includes an eighth “project,” which will strengthen the capacity of NBI institutions to execute and coordinate cooperative basinwide projects.4

The SVP and project documents for each of the seven SVP projects were approved at the Extraordinary Meeting of the Nile Council of Ministers in Khartoum in March 2001 and were presented to the international community at the first International Consortium for Cooperation on the Nile (ICCON) in Geneva in June 2001.

Regional Power Trade project. The Regional Power Trade (RPT) project, one of the seven thematic projects of the SVP, aims to establish the institutional means to coordinate the development of regional power markets among the Nile Basin countries through the creation of an institution referred to as the Nile Basin Power Forum. The Nile Basin Power Forum will support dialogue and special studies to explore a range of policy-related issues such as potential 1 The NBI currently includes the following countries: Burundi, Democratic Republic of Congo, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, and Uganda. Eritrea has participated in the Nile Basin Initiative as an observer since August 2000 and has stated its intention to formally join soon. 2 Nile Council of Ministers, Policy Guidelines for the Nile River Basin Strategic Action Program, February 1999. 3 The subsidiary action programs focus on the development of joint investment opportunities for two or more countries. Two subsidiary action programs have been formed: the Eastern Nile Subsidiary Action Program, including Egypt, Sudan and Ethiopia, and possibly Eritrea in the future; and the Nile Equatorial Lakes Subsidiary Action Program, including Burundi, Egypt, Kenya, Rwanda, Tanzania, and Uganda. 4 Although the Shared Vision Program is a grand funded, technical assistance (TA) program, it is using the World Bank’s project cycle process for lending operations, adapted to the unique nature of the NBI, to ensure high standards of quality and fiduciary management

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Regional Power Trade Project Appraisal Document

institutional and regulatory frameworks to support regional power trade, and mechanisms for poverty reduction including expanding access of the rural poor.

Project Appraisal Document. The purpose of this project appraisal document (PAD) is to provide a comprehensive description of the RPT project, and give detailed information concerning implementation arrangements, financial management, procurement and monitoring and evaluation. This PAD is subsidiary to the SVP Master PAD, which provides a comprehensive overview of the entire SVP and its implementation and financial arrangements.

2. Project Development Objective

The development objective of the RPT project is to establish the institutional means to coordinate the development of regional power markets among the Nile Basin countries. The long-term goal of the RPT project is to contribute to poverty reduction in the region by improving access to reliable and low cost power in the Nile Basin in an environmentally sustainable manner. The creation of a regional electricity market can play a key role in fostering cooperation among the Nile Basin states and in ensuring that the resources of the Nile Basin are developed and managed in an integrated and environmentally sustainable manner.

3. Key Performance Indicators (see Annex 1)

Key performance indicators for the RPT project include:

Effective dialogue and cooperation among the Nile Basin ministries in charge of electricity and power utilities is established including increased understanding of the legal, regulatory and pricing regimes required to support power trade

• Strategic framework for advancing power trade in the region developed, including:

─ Appropriate institutional mechanism for permanent Power Forum identified; and,

─ Strategy and plans for expanded generation and transmission developed and being implemented

• Investment needs to facilitate power trade are identified and subsidiary level investments are promoted

• Database of regional power systems initiated, managed and in use by members

• Sector reform strategies promoted among Nile Basin countries and advisory services provided.

B. STRATEGIC CONTEXT

1. Regional and Country Assistance Strategy

International rivers and the benefits of cooperation. Where rivers cross or form national borders and river flow is extremely variable, international cooperation is essential for the sharing of a wide range of benefits for riparian states. Cooperation will enable better management of ecosystems, providing benefits to the river that underpin all other benefits. The efficient, cooperative management and development of shared rivers can yield major benefits from the river, such as increased food and energy production. Cooperation on an international river will result in the reduction of transaction costs because of the river; that is, tensions between riparian states will always be present, to a greater or lesser extent, and those tensions generate transaction

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cost, and cooperation inevitably reduces this cost. International rivers can be catalytic agents, because cooperation that yields benefits from the river and reduces transaction cost because of the river can pave the way to much greater cooperation between states, even economic integration among states, generating benefits beyond the river. The NBI, in which all riparian states are seeking to generate and share the benefits of cooperation at all of these levels, is a forerunner in Africa, a continent where more than 60 river basins are shared by two or more nations.

Meeting the Millennium Development Goals. Poverty alleviation and sustainable development are the main objectives of the Millennium Development Goals (MDGs), which were agreed upon at the United Nations Millennium Summit in September 2000. The World Bank is strongly committed to supporting the Millennium Development Goals by aligning its corporate strategy to the MDG agenda. With a focus on institutional capacity building and building regional trust and cooperation, the SVP lays the foundation for unlocking the investment potential of Nile Basin States. The SVP will create an enabling environment for subsequent NBI cooperative investment programs, the Eastern Nile Subsidiary Action Program (ENSAP) and the Nile Equatorial Lakes Subsidiary Action Program (NELSAP). These will support the MDG agenda of poverty alleviation and sustainable development, and in addition will promote regional peace and security. Specifically, MDG goal 1, eradicate extreme poverty, goal 7, ensure environmental sustainability, and goal 8, develop a global partnership for development, will be addressed directly by ENSAP and NELSAP multi-country projects in the areas of watershed management, fisheries, irrigated agriculture, power and flood prevention.

Regional cooperation in Africa. Realizing gains for all parties from cooperation and regional integration has become an important aspect of the development strategy for the Africa Region of the World Bank. A regional integration and cooperation unit has been established in the chief economist’s office. The World Bank has entered into close partnerships with the New Partnership for Africa’s Development (NEPAD) and other regional organizations, including the Eastern African Cooperation (EAC), the Southern African Development Community (SADC), and the Common Market for Eastern and Southern Africa (COMESA). The SVP has played an important role in the recent trend of cross-sectoral and multicountry initiatives. The overall development goal is to build trust and the capacity for regional cooperation, as well as an enabling investment environment for the equitable use of and benefit from common Nile Basin water resources.

Accordance with overall CAS goals. The Country Assistance Strategy (CAS) for each of the countries belonging to the NBI has progressively highlighted support for the power sector. Except for Democratic Republic of Congo and Sudan, the CAS for each country recognizes the strong linkages between power sector development and poverty reduction. Efficient and clean energy supply is central to poverty reduction through many and varied linkages, as well as being important for economic growth. Modern energy sources of energy improve living standards by helping to create jobs and by boosting productivity, and improve the delivery of social services (health, education, clean water). See Annex 4 for detailed energy sector related CAS goals.

2. Main sector issues and strategy of Nile Basin countries

Main power sector issues

Adequate and reliable power supply is critical to meeting the social and economic development objectives of the Nile Basin countries. Yet, in a large majority of the Nile Basin countries, only around 10 percent of the population has access to electricity. This situation exists despite the presence of vast and as yet untapped hydroelectric and other energy resources in the Nile Basin. The present limited development of national power systems in the basin imposes a constraint on

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the exploitation of these resources at affordable costs at the national level. The cost of hydropower in the Nile Basin is also increased by large seasonal variations in hydropower output, while the costs of meeting peak loads on national power systems can be high in countries where these loads are supplied from expensive thermal plants. These constraints on supplying affordable power could be overcome by expanding the market for these resources by promoting power trade among Nile Basin countries.

Rapid demand growth. Power demand is increasing rapidly and the limited availability of electricity is constraining development in the region. There is substantial potential for increased development of reliable, low-cost power, for example through expansion of hydropower production and through exploring opportunities for regional power trade. The region’s current power requirements are 18GW and are forecast to grow to 30GW in 2005, 39GW in 2010 and 65GW in 2020. The forecasted power requirements translate to a need for about 12 000 MW of new capacity to be installed every five years at a cost ranging between US$10 to 20 billion- a formidable task.5

Diversity of Resources. Excluding Democratic Republic of Congo (with its huge generation potential on the Congo River), the power generation potential of the Nile Basin countries for the next 50 years is probably in the order of 550 TWh per year, compared to the present level of about 80 TWh. The region is endowed with both thermal and hydro resources for the production of electricity. Countries such as Uganda, Tanzania, and Ethiopia have considerable hydropower resources which are well above the domestic needs of these countries even in a long term perspective. Other major resources are found in Egypt, Eritrea, Ethiopia, and Sudan in the form of hydrocarbons, particularly natural gas that can be used for large scale power generation. Other countries have complementary resources, mainly in terms of hydropower, but also a potential for geothermal energy—particularly in Ethiopia and Kenya.

Limited Access to Electricity. In all basin countries except Egypt, development of the power systems is limited, as is access to electricity. However, there are good untapped sources for power generation, coupled with a desire to improve access to electricity for both domestic and industrial/commercial consumers to improve the quality of life and increase economic growth. Because domestic markets are small (except for Egypt), an important way to realize benefits from these resources in the near-to-medium term is to sell power to neighboring markets. The prevailing policy regarding sector development is to maintain a high-level of national self-sufficiency as a first priority, and to investigate scope for power trade with neighboring systems, as a secondary priority.

Geography. The area covered by the Nile Basin is enormous so that a future interconnected transmission network from Dodoma in Tanzania would reach 5000 kilometers north to Cairo in Egypt with a breadth between Sudan and Eritrea of 2000 kilometers. Within this area is a multitude of land surfaces from mountains to plains and forest to desert. The nature of such a variety of geographical characteristics will have considerable influence on the siting of future generation and the routing and design of transmission lines.

Limited cross-border electricity trade. At present there is very limited cross border electricity trading between the countries of the basin (see following table). In those cases where network extensions have been made to accommodate trading, such extensions have usually been on the extremities of the power network—often aimed at supplying a remote load or providing grid power to an isolated network in a neighboring country.

5 Opportunities for Power Trade in the Nile Basin Countries. Final Scoping Study. Norconsult/Statnett, September 2000

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Cross-border Electricity Trading in NBI Countries

Trading Partners Year trade commenced Capacity / Energy traded

Uganda–Kenya 195830 MW/167 GWh/year (including exports to Tanzania and Rwanda)

Uganda–Tanzania 1993 9MWUganda–Rwanda 1995 5MWCongo, Dem. Rep.–Rwanda–Burundi Approx. 90GWh/year Electricity market reform. The existing Nile Basin national power utilities are state-owned vertically integrated utilities that require significant improvements in their commercial and financial operations, not only to enhance their credit support for power trade but also to improve reliability of supply. A number of countries in the basin are addressing these issues under ongoing reform programs. For more information on the status of power sector reform in Nile Basin countries see Annex 11.

Furthermore, sector regulations are currently being drafted with only national markets in mind. Most of the basin countries permit IPPs, but, as yet, only a few are operating. However, as countries have been restructuring their power sectors and revising their investment laws, several IPPs are at advanced stages of development. For example, the Sidi Krir in Egypt and Songo-Songo in Tanzania have achieved financial closure. However, harmonization of regulatory practices should be given attention to further stimulate regional trade, particularly regarding access to transmission networks and transmission pricing issues, including the wheeling of power over third party networks.

3. Sector issues to be addressed by the project and strategic choices

Sector issues to be addressed by the project

Countries in the Nile Basin are aware of the potential benefits from trading power. Therefore, while current levels of power trade among basin countries are low, many of them are considering ways to increase the levels of this trade and are looking for suitable investments to realize this objective. A recently prepared scoping study, Opportunities for Power Trade in the Nile Basin6, which was reviewed and revised by the Power Trade Experts Working Group of the SVP, identified several options for increasing power trade in the region. In the short-term, many of these opportunities exist at the subregional level. It also appears that it is important to evaluate power trade opportunities in the context of a broader multipurpose approach to Nile Basin water resources development and management.

The scoping study also found that a more focused and coordinated process for discussing ways to expand power trade in the Nile Basin would advance the development of power supply facilities. The Study recommended that this objective be realized through the creation of a basinwide “forum” of national power experts to facilitate continued dialogue in the region. Power forums are proving effective in developing power trade among other groups of countries, notably Southern African Power Pool, the Mekong Regional Power Market, and Central American Regional Electricity Market, and in the Mercosur region. The establishment of regional power markets has improved system reliability and economies of scale in planning, construction, and

6 Opportunities for Power Trade in the Nile Basin—Final Scoping Study, Norconsult/Statnett, September 2000

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operation of generation and transmission facilities, thereby contributing to the development and integration of regional economies.

Recognizing the potential benefits of power trade, the proposed project will establish a Nile Basin Power Forum within the context of the NBI to support (i) formation of an institutional infrastructure for market development; (ii) a learning environment for understanding the nuances of legal, regulatory, and pricing regime required for regional power trade; and (iii) identification of power generation and transmission projects that will benefit power trade amongst the Nile Basin countries.

The project will also take into account, support and coordinate, where appropriate, with other power trade initiatives that involve one or more Nile Basin countries (see table below).

Nile Basin Initiative Regional Power Trade

Project

Southern Africa Power Pool (SAPP)

East African Community (EAC)

Master Plan

Eastern Africa Power Pool

(sponsored by UPDEA)

Burundi, D.R.Congo, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania and Uganda

South Africa, Namibia, Botswana, Lesotho, Swaziland, Mozambique, Zimbabwe, Zambia, Malawi, , Angola, DRC, Tanzania

Kenya, Tanzania and Uganda

Burundi, DR Congo, Ethiopia, Kenya, Rwanda, , Sudan, Tanzania, and Uganda

Strategic choices

There is abundant international experience in the design and development of regional forums, and evidence shows that the formation of the forum reflects the prevailing regional circumstances and the parties’ objectives for this type of regional institution. A review of about nine such regional organizations shows that they can be broadly categorized into two groups thus providing a choice of two different models for setting up a regional forum that

• Provides for information exchange, special studies, and training in support of forming regional energy markets; that is, the forum is essentially a regional market promoter.

• Supports explicitly the formation of regional electricity markets or power pools through information exchange, special studies, and specialized training; that is, the forum becomes the regional market maker.

A review of nine regional institutions shows that three fall into the market promoter category and six fall into the market maker category. Annex 12 briefly describes each of these institutions.

While the distinction between the choices is indeed subtle, this categorization helps in understanding the motivation for the formation of regional forums and selection of the appropriate model in the present case. In the formative years, the Nile Basin Power Forum will function as a “market promoter” but the aim of the NBI countries, as shown the Long-Term Vision for the Power Forum is to evolve into a “market maker” Forum.

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C. PROJECT DESCRIPTION SUMMARY

1. Project Components (See Annex 2 for a Detailed Description and Annex 3 for a Detailed Cost Breakdown)

The proposed project comprises the following three main components: (1) Regional Coordination and Project Implementation; (2) Establishment of the Nile Basin Power Forum; and (3) Comprehensive Basinwide study. The four-year project will be implemented in a sequential manner in order to align with currently available funding. Funding for components 1 and 2 for the first two and a half years of the project is available. Funding for the last one and a half years of the project will be raised during project implementation.

Component 1: Regional Coordination and Project Implementation (US $ 2.7 million for first phase, $4.23 million total cost)

This component will focus on the overall management arrangements for the project and includes key staff at the project management unit (PMU) responsible for project implementation. The project also includes a project Steering Committee, a Technical Steering Committee, a PMU, and regional coordination across other SVP projects and the Subsidiary Action Programs. This component also comprises knowledge management activities in order to provide project participants and other key stakeholders across the basin with improved access to relevant information on the activities of the RPT project. A stakeholder analysis and the preparation of a public participation plan will be undertaken under this component. Finally, considering the high rates of HIV-AIDS in the African countries and its impact in terms of human and economic development, a training and awareness program for the PMU staff will be implemented as part of this component, under the guidance of the SVP Coordination project.

Component 2: Establishment of a Nile Basin Power Forum (US $ 2.77million for first phase and US $ 3.40 million total cost)

The objective of this component is to establish a Nile Basin Power Forum, define its role and long-term institutional setting, and initiate its activities. It is expected that the Power Forum will foster an enabling environment conductive to increasing power trade in the Nile Basin. This component is expected not only to enhance individual and institutional capacity to manage and develop basinwide hydropower resources, but also to derive large but immeasurable benefits in building intra-riparian cooperation through coordinated power system

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Box 1. Functions of the Power Forum The primary functions of the Power Forum, particularly during its formative period, will be Facilitate dialogue and cooperation among the power

utilities in the region, including (a) collecting and exchanging information and experience, (b) preparing a consistent framework for power data reporting for the Nile Basin countries, (c) increasing awareness through web-based newsletters, (d) scheduling and supporting management and technical meetings, and (e) reviewing and analyzing issues of common interest.

Commissioning special studies, including but not limited to (a) identification of investment projects related to production and transmission systems in order to facilitate power trade, and (b) development of institutional and regulatory frameworks to support regional power trade.

Collaborate on analytical activities with the SVP Water Resources Planning and Management Project, such as to (a) understand system river behavior, (b) assess impacts of multi-purpose hydroelectric power projects, (c) develop and evaluate operational schemes for coordinated river system management, and support informed decision-making from a regional perspective.

Assisting in developing a strategic framework and agreements for advancing power trade in the region.

Preparing a consistent framework for power demand forecasting for the Nile Basin countries.

Facilitating training programs in all aspects of power sector operations.

Mobilizing resources for carrying out these functions. Additional functions of the Power Forum may develop as power trade matures, including developing consistent rules and standards for power market operations.


operations. Furthermore, by developing and incorporating a common culture of good practices through the collaborative development of hydropower and transmission interconnection projects, the Nile Basin riparians seek to formalize and cement the participatory process for sharing the mutual benefits that will result from regional power trade. This is the first basinwide effort to develop a regional power trading architecture that will be developed in the basin and through the active participation of and active collaboration among all countries. The preliminary objectives of the Power Forum include:

• Building necessary institutional and human capacity and establishing the necessary information support systems and tools;

• Facilitate the creation of the institutional and physical infrastructure for power trade;

• Assisting in the development of power markets; and

• Identifying projects to be considered for implementation at the subsidiary level.

This component covers activities in four main areas: long-term planning and analytical tools, training and skills enhancement, financial resource mobilization, and detailed studies.

The nine (Eritrea attended as an observer)Nile Basin Ministers responsible for electricity adopted a long-term vision for the Nile Basin Power Forum during the First Meeting of Nile Basin Ministers responsible for Electricity held in Dar es Salaam on May 21st, and signed the Dar es Salaam Declaration (attached in Annex 13). The Vision was developed during the High-level Meeting of Power Experts, attended by Permanent Secretaries (or equivalent) from the ministries in charge of electricity and CEOs (or equivalent) from the power utilities (Dar es Salaam, February 2003). The vision describes a number of operational functions of the Power Forum, each if which can be achieved in a different time frame, with all elements achievable in a 20-year horizon.

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Box 2: Long-term Vision for the Nile Basin Power Forum

The Power Forum is a regional, self-sustaining, legally established institution that: Manages and updates a database of regional power systems Develops regional plans for expanding generation and transmission Stimulates subsidiary level project investment for regional interconnection Facilitates a common understanding on a power sector reform strategy and a harmonized

regulatory regime Designs the power market and establishes standards for operation of the interconnected system Promotes cooperation in regional power trade, the development of a power market Ensures an equitable trading regime for all participants in the regional power market through a

strong, transparent decision-making process Facilitates a learning environment for understanding the nuances of legal, regulatory and pricing

regimes required for regional power trade Liaise with similar forums in other regions It is expected that, over time, the Power Forum will facilitate the formation of three new entities: a

regulatory forum, a regional dispatch center, and power exchange. The Power Forum will continue to function as a regional planning agency.

Component 3: Comprehensive Basinwide Analysis of Long-term Power Supply, Demand and Trade Opportunities ($0.23 million for first phase and US$4.5 total cost)

This component will be implemented in a sequential manner not only to align with currently available funding but also in order to take advantage of the outputs of the subregional power studies under implementation or to be conducted under the subsidiary action programs, and other regional initiatives. Total budget for this component is US$4.5 million.

This component will launch a large study in order to inform the planning of multipurpose river-basin management and identify potential projects for development within the subsidiary action programs of the NBI. In conducting this study, special working groups of non-power experts (water resource managers, environmental specialists, etc.) will be formed to ensure that hydropower development issues are addressed in the broader context of integrated and multipurpose water resources development and management. The study will follow best practices in options analysis, including extensive stakeholder involvement and multi-criteria options assessment.

Given the complexity of the comprehensive basinwide study that has to integrate both power development and multi-purpose projects’ analysis, this activity will be launched pursuant to an initial assessment study carried out under the supervision of the RPT project, in collaboration with the Water Resources Planning and Management project.

The Comprehensive Basinwide study will collaborate and exchange information, as pertinent, with the Nile Equatorial Lakes Subsidiary Action Program (NELSAP) and the Eastern Nile Subsidiary Action Program (ENSAP) to ensure synergies between the subregional and basinwide work and to avoid duplication of effort. The study will also seek to build upon other studies being undertaken in the region, such as the EAC Master plan.

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Table 2: Component Project Costs for Full Project (US$ million)

Project Cost by Component Local Foreign Total

1. Regional coordination and project implementation

0.88 4.23

2. Establishment Nile Basin Power Forum 3.40 3. Comprehensive basin-wide study 4.50 Total Baseline Cost 12.1 Physical contingencies 0.37 Price contingencies 0.56 Total Project Cost 13.10 Total Financing Required 13.10

2. Key Policy and Institutional Reforms Supported by the Project

The RPT project, as part of the SVP program, is a multicountry, multisectoral program, whereas policy and institutional reforms are national responsibilities. The program recognizes the importance of national sovereignty and the national nature of the reform process. However, to lay a solid foundation for regional cooperation, the Nile Basin Power Forum will initiate a series of initiatives that support regional dialogue on good-practice elements of policy-related issues such as legal and regulatory frameworks at the national level that are required to advance power trade at the regional level, and that will promote a common understanding of the interaction between national policies, regional needs, and cooperative development.

3. Benefits and Target Population

The broad benefits envisaged from the NBI are poverty alleviation through improved, sustainable management and development of the shared Nile waters, and enhanced regional stability through increased cooperation and integration among the Nile states. The SVP provides the first basinwide forum for collaborative action on a range of water-related areas. It will build the relationships, the capacity, and the technical foundation needed to enable cooperative development in the region, and it will promote the exploration of opportunities for cooperation and integration in the basin beyond those sectors that generally are considered water-related.

Just as no one single sector can be singly instrumental in addressing the poverty alleviation challenge, no single Shared Vision project can singly reduce poverty. Yet the poverty reduction strategy acquires added value and momentum when it is buttressed by investments in regional energy projects as well as other sectors that guarantee the integration of disenfranchised communities in growing economy and developing society.

Regional energy integration can play a key role in poverty reduction. The income growth potential that energy services bring to the poor is considerable. It empowers them to take better advantage of the social services that are offered. Affordable and efficient energy enables communities to light their homes and schools, refrigerate their supplies, refrigerate their supplies, power their telephones and TVs, and support productive businesses. Electricity is essential for electronic communications and together with roads connects people and their businesses to national and regional markets and beyond, and open up new job and education opportunities. In energizing productive uses, regional energy integration fuels the economic engine for value creation, growth and connecting goods to markets. In addition, access to electricity reduces the negative impacts of inadequate modern energy access, especially for women, which bear a disproportionately high burden.

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The specific benefits envisaged from the RPT project include:

• Enhanced regional cooperation and understanding of power trade issues;

• Strengthened human and institutional capacity;

• Increased basinwide dialogue and exchanges of information on issues of common concern and transboundary significance on the power sector;

• Sustainable network of professionals;

• Updated database of regional power systems;

• Common understanding on power sector reform and harmonized regulatory regime;

• Adequate learning environment for understanding the nuances of legal, regulatory and pricing regimes required for regional power trade;

• Stimulation of investments on interconnection at the subsidiary level.

• In this project, the main beneficiaries will be the government ministries in charge of electricity and utilities that will benefit from:

• Increased opportunities for capacity building through participation in training program and study tours;

• Expanded opportunities to interact with colleagues from other Nile Basin Governments and utilities;

• Availability of various studies with best practices in key areas for regional power trade cooperation.

Other beneficiaries include:

• National and international private sector through its participation in business and investment seminars, and availability of detailed project profiles prepared by the Power Forum based on different studies conducted at the regional and subregional levels;

• Civil society organizations that represent the population within the basin area affected by power trade issues will also benefit from the project by having increased access to information and participation in consultations on possible regional generation and transmission developments. The Comprehensive Basinwide study will include extensive public consultations as an integral part of the assessment;

In the long-term, it is expected that the civil society as a whole will benefit from improved access to modern energy as a result of increased power trade among the Nile Basin countries.

4. Institutional and Implementation Arrangements

NBI institutional mechanisms

NBI. The Council of Ministers of Water Affairs of the Nile Basin States established the NBI in the minutes of its meeting at Dar-es-Salaam February 22, 1999, and set up “new transitional institutional arrangements.” These arrangements provide for an institutional mechanism comprising the Nile Council of Ministers, the NBI Technical Advisory Committee, and the NBI

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Secretariat, which are located in Entebbe, Uganda. The arrangements are described as transitional because they serve as the basis of cooperation between the Nile Basin countries until a permanent mechanism is established. The establishment of such a permanent mechanism is one of the objects of the Cooperative Framework process that the Nile Basin countries have been working on since 1997 and that is now well advanced.

NBI’s legal and institutional arrangements. At its meeting in Cairo on February 14, 2002,7 the Ministers of Water Affairs of the Nile Basin countries formally agreed to the instrument establishing the NBI as an international organization, i.e., with a constitution, common organs, and a legal personality distinct from that of its member states. This instrument (Agreed Minutes No. 7 of February 14, 2002) provides, inter alia, that: the NBI is invested, on a transitional basis, with legal personality to perform all of the functions entrusted to it; NBI shall enjoy legal capacity and privileges and immunities in the territory of each of the Nile Basin states; NBI’s organs are the Nile Council of Ministers, NBI Technical Advisory Committee, and NBI Secretariat; the NBI Secretariat is headed by an executive director who is the principal executive officer of the NBI. Pursuant to the above-mentioned instrument, the Government of Uganda, through NBI Act 2002 granted the NBI legal status in Uganda, the site of the NBI Secretariat, and entered into a Headquarters Agreement with NBI, which was signed on November 4, 2002.

RPT project implementation arrangements

The SVP comprises seven thematic projects under implementation in nine countries.8 Although each project will have its own structure, the integrated nature of the SVP requires underlying coordination mechanisms. The institutional and implementation arrangements have therefore received much attention and are detailed in the SVP Master PAD. Implementation arrangements for the RPT project align with guidelines for the SVP.9

Project execution. The RPT project will be executed by the NBI Secretariat. The NBI will manage fund flow and disbursement as well as support information sharing, coordination, integration, and monitoring and evaluation. To ensure effective program coordination, a small SVP coordination project will be established at the NBI Secretariat. Generic procedures for reporting, monitoring, and evaluation will be defined at the programmatic level and refined to meet the needs of each project. UNOPS (see below) will co-locate key staff at the Secretariat in Entebbe to build capacity and support program implementation. To ensure effective project implementation, and in accordance with the decentralized approach, the NBI will set up separate PMUs in the basin for each SVP project. The NBI Secretariat will also implement an HIV/AIDS awareness campaign through the eight SVP PMUs that the SVP Coordination Project will coordinate.

Project services agency. The Nile Council of Ministers has decided to employ a project services agency to support the NBI in project execution.10 Support services will be related primarily to financial management and the procurement of goods and services, but also will build the capacities of the NBI, particularly the NBI Secretariat, so that key project service functions can be transferred to the NBI. The Nile Council of Ministers has decided that the NBI will enter into a

7 Nile Council of Ministers, main text of meeting minutes, Ninth Annual Meeting, Cairo, Egypt, February 14, 2002. 8 In its current design the SVP will be implemented in 9 of the 10 basin countries (Burundi, Democratic Republic of Congo, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania and Uganda). Efforts to facilitate the participation of Eritrea and extend the program to the entire basin are ongoing. 9 SVP Master PAD, Annex 10, April 2003. 10 The concept of a project services agency was adopted by the Nile Council of Ministers at its extraordinary meeting in March 2001 in Khartoum, and general terms of reference outlining the scope of services for the project services agency were endorsed by the Nile Council of Ministers at its ninth annual meeting in February 2002 in Cairo.

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partnership with United Nations Office for Project Services (UNOPS) through a contractual arrangement to support SVP execution. This decision by the Council of Ministers was given a no-objection by the World Bank with the approval of the Bank’s Operations Procurement Review Committee (OPRC).11

Project implementation at the regional level (see Implementation Chart below). A regional PMU will be established in Dar es Salaam. The PMU will operate basinwide and will be responsible for ensuring effective coordination of project activities in the NBI countries and the implementation of the Power Forum activities and functions and ensure effective interaction between the steering and technical committees. Through UNOPS as the NBI agent, the PMU also will facilitate local contracting, fund management, local procurement, disbursement, program administration, and project-level monitoring. The PMU will liaise closely with the NBI Secretariat through the SVP Coordination project to ensure overall coordination and integration with the SVP.

The staff of the PMU will include a regional project manager; a power systems operation lead specialist; a hydropower lead specialist recruited competitively, preferably from the region. A finance and procurement officer,12 an environmental specialist and other technical specialists (e.g. IT/knowledge management) will be recruited nationally, as needed, as well as and administrative support. Support staff will be recruited competitively from Tanzania.

A project steering committee will be established to provide strategic guidance, direction and oversight to ensure that the project objectives are achieved within the overall framework of the NBI and its shared vision, and that the project remains within budget and on schedule. The steering committee will review and approve annual work plans and will receive and review annual substantive and financial reports on project activities. The steering committee will consist of two senior representatives from each country of the NBI, the permanent secretary (or equivalent) from the ministry responsible for power; and the executive director (or equivalent) from the power utility.

A project technical committee will also be established to provide technical guidance and oversight of the activities of the Power Forum. The technical committee will consist of two representatives, one from ministry responsible for power with broad knowledge of sector reform and deregulation, and the other from the power utility with expertise in transmission and system operations. Others (i.e. from generation if utility is unbundled) may participate in the technical committee, but at their own expense. Current members of the Power Experts Working Group will continue as part of the technical committee, except as changes needed on individual country basis

To ensure overall program coordination, strengthen the capacity of the NBI to execute basinwide programs, and reinforce strong riparian ownership of the SVP, the eighth SVP project will establish, train, and support a small SVP Coordination project at the NBI Secretariat in Entebbe. This small unit will be responsible for overall program coordination and the development of generic procedures to ensure quality control and fiduciary responsibility. The SVP Coordination project will also be responsible for monitoring and evaluation at the program level, and for facilitating information sharing within the NBI as well as with the public. The PMU will work

11 The Nile Council of Ministers took the decision at its ninth annual meeting in February 2002 in Cairo and communicated the decision to the World Bank in a letter from its chairman dated March 5, 2002. OPRC reviewed the decision and granted the no-objection on April 25, 2002. 12 The finance and procurement officer will be recruited nationally. If a suitable candidate is not identified, the recruitment could be regional.

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closely with the SVP Coordination project to ensure integration of the project within the SVP and NBI frameworks.

Project Implementation Chart

Technical Committee

PROJECT MANAGEMENT UNIT

Regional Project Manager Procurement and Finance Officer

Lead Specialists: • Power System Planning and Economist • Hydropower Planning and Water Specialist

Environment/Water Specialist Support and Administrative Staff

Ad-hoc working groups

Technical Committee to Function as National Focal Points 2 representatives (ministry/utility)

Steering Committee

Management at the national level

In the RPT project, at the national level the Technical Committee representatives will function as the National Focal Point representatives. These Technical Committee members will (i) liaise with relevant national ministries and institutions, the NBI Secretariat, the NBI Technical Advisory Committee members, other NBI projects, and others as appropriate; (ii) facilitate national input into regional studies and activities; (iii) facilitate the identification of representatives to serve on project-related working groups and committees; and (iv) provide national input to the PMU as required for reporting.

The seven SVP projects will be hosted by different sectoral ministries. Thus, to facilitate in-country coordination of NBI activities, the Ministry of Water Affairs in each Nile Basin country has established a government-funded national NBI focal point institution (also referred to as a national NBI office). The national NBI office will support the NBI Technical Advisory Committee member in each country and act as a counterpart to the NBI Secretariat at the national operational level. To facilitate effective interaction among the various ministries and institutions involved in the NBI, the office will include interagency and intersectoral committees. In each country, members of SVP steering committees and SVP national project coordinators (i.e., the technical committee members in each country) are likely to be involved in these intersectoral committees.

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At the operational level, the PMU will coordinate closely with the NBI Secretariat through the SVP Coordination project, to ensure synergies are captured among SVP projects and that all projects operate within the SVP Framework. The SVP Coordination project, located at the NBI Secretariat in Entebbe, is responsible for overall program coordination and the development of generic procedures to ensure quality control and fiduciary responsibility. The SVP Coordination is also responsible for monitoring and evaluation at the program level, and for facilitating information-sharing within the NBI as well as with the public. The SVP Coordination project is funded from the other SVP projects (approximately three percent), including the RPT project, as well as through different funding from the NBTF and direct support from donor partners.

The SVP has several coordination mechanisms in place. These include biannual project manager meetings at the NBI Secretariat co-hosted by the SVP Coordination project and the Benefit Sharing project, and regular NBI forums (at the regional and national levels on alternating years) in which RPT will take part.

D. PROJECT RATIONALE

1. Project Alternatives Considered and Reasons for Rejection

The Power Experts Working Group was established for this project. National power experts from each of the Nile Basin countries worked with members of the Technical Advisory Committee in preparing the project document.13 A consulting firm was also employed to conduct a scoping study to assess the opportunities for power trade among the Nile Basin countries. The study identified several options for increasing power trade in the region. In the short term, many of these opportunities exist at the subregional level. It also appears that it is important to evaluate power trade opportunities in the context of a broader multipurpose approach to Nile Basin water resources development and management.

The scoping study found furthermore that a more focused and coordinated process for discussing ways to expand power trade in the Nile Basin would advance the development of power supply facilities. The study recommended that this objective be realized through the creation of a basinwide “forum” of national power experts to facilitate continued dialogue in the region. Power forums are proving effective in developing power trade among other regional groups of countries, notably in the Southern African Power Pool, the Mekong Regional Power Market, the Central American Regional Electricity Market and in the Mercosur region. The establishment of regional power markets has generally improved systems reliability and economies of scale in planning, construction, and operation of the generation and transmission facilities, thereby contributing to the development and integration of regional economies.

The final design of the RPT project, which incorporates the recommendations of the Scoping Study, represents the consensus arrived at through the participatory preparation process as well as a participatory phase of detailed implementation planning (see table 3 for a list of meetings). The project reflects riparian perspectives on national and regional power trade needs, includes components that are deemed implementable and that confer real benefits, and takes a design approach that incorporates lessons learned from related projects in the basin. In addition, the project adheres to the NBI policy guidelines and address issues of transboundary significance.

13 NBI SVP Nile Basin Regional Power Trade-Project Document. March 2001.

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2. Major Related Projects Financed by the Bank and Other Development Agencies

Southern Africa Power Market. The World Bank is preparing a project to facilitate the development of an efficient regional power market which will drive down electricity prices in the Southern African Development Community countries, foster regional integration, increase competitiveness of the region and create the conditions for accelerated investment in the power sector, including by the private sector. The operating and non-operating members of the Southern Africa Power Pool include Angola, Botswana, Democratic Republic of Congo, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe.

West Africa Power Market Development Project. The project under preparation will facilitate the development of an efficient power market in the West Africa region (Ghana, Cote D’Ivoire, Togo, Benin, Burkina Faso and Mail) in order to foster regional integration, reduce electricity costs, alleviate poverty and promote the use of environmentally cleaner fuels for power generation.

Table 3: Preparation of the SVP RPT Project

Date Location Key Outcomes

December 1999 Entebbe Inaugural meeting PEWG* Defined scope and potential for regional power trade Reviewed and developed draft project concept notes

July 2000 Addis Ababa Second meeting PEWG Reviewed international experience of other power forums Developed detailed project identification document

October 2000 Harare Third meeting PEWG Contributed critical input regarding project formulation Reviewed and revised project documents:

April 2002 Arusha Fourth meeting PEWG Defined key issues for project implementation Started preparations for first meeting of electricity ministers

February 2003 Dar es Salaam First meeting of high-level power experts Developed long-term vision for Power Forum Advanced key project implementation arrangements Finalized preparations for first meeting of Nile Basin Ministers

in charge of electricity *Power Experts Working Group

EAC Master Power Plan. The World Bank supports the EAC in the development of a regional power master plan for mutually beneficial development of the interconnections the power systems of Uganda, Kenya, and Tanzania. The project aims to establish a regional power market in East Africa through the interconnection of the power systems of the three countries and their integration into the already functioning Southern African Power Pool, to which Tanzania already belongs. There has been an informal information exchange between the SVP Power Trade project working group and participants in the EAC Master Power Plan, and this exchange is likely to deepen as the SVP Power Trade project begins implementation. The Power Trade working group determined that the EAC Master Power Plan and the basinwide study to be conducted under the Power Trade project are complementary, and will differ in geographic scope and time horizon.

Greater Mekong Subregion. The World Bank/ESMAP has been supporting since 1996, the development of a regional power market in the Greater Mekong Subregion through a series of

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studies and workshops aimed at advancing power trade and investment in the six Mekong countries (Cambodia, Yunnan Province/People’s Republic of China, Lao PDR, Myanmar, Thailand and Viet Nam).

CIER. In 1999, ESMAP started supporting the Comite de Integracion Electrica Regional, a regional “market promoter” forum for the South American countries, by co-financing a study that was to identify technical and institutional issues affecting regional interconnections (phase 1), and to develop options for dealing with those issues and developing regional power markets (phase 2). The study recommended developing two separate regional markets for South America: one for the Mercosur countries of southern South America and one for the Andean countries of the northern part of the continent.

3. Lessons Learned and Reflected in Project Design

Experience in other regional markets has shown that in order to develop a sustainable regional integration, first and paramount, participants should have a clear and firm political will for integration, including that part of the supply, even under critical conditions, could depend from generation abroad. For example, the Southern Africa Power Pool (SAPP) has received strong political support from its member countries, and SADC provided a well-developed regional institution that already had created subordinate institutions dealing specifically with regional power issues. On the other side, in the Mekong region, there is no evidence of high-level political support for regional power trade during the early years of the process, and there is still no evidence of strong support today. The SVP Power Project, as part of a wider Initiative has received strong political support not only from the Council of Ministers responsible for the overall Initiative but also from the Ministers responsible for electricity who met and signed a Dar Es Salaam Declaration supporting regional power trade, and the CEOs of the utilities.

Experience in other regional power markets has demonstrated that policy, technical, institutional, commercial and financial barriers, if not properly addressed, could prevent the potential development of regional power markets. For example, the South American governments are working on the consolidation of the energy markets and key elements of the strategy include (i) to allow international exchange under rules similar to those applicable to national demand and production; (ii) to promote efficiency in the use of resources; (iii) to guarantee non-discrimination and reciprocity in the treatments of demands and supply from other countries; and (iv) to allow open access to national transmission systems. These characteristics can be found, in general, in most of the region’s national markets.

Experience in the Central American market (SIEPAC) has shown that in order to capitalize the benefits of integration through a regional market, the region needs to develop better transmission facilities. A major incentive for interconnection expansion during the initial stages of integration would be the lifting of any limitations to carry out firm contracts. To materialize interconnection benefits it would be necessary to eliminate any institutional and regulatory barriers that either discriminate against international exchanges with regard to the national market, or limit the products and services for the international exchange

The RPT project aims to reduce or eliminate those barriers early in the process, by establishing a Forum that will promote regional cooperation and dialogue, as well as a common understanding of good practices in all aspects involved in power trade.

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4. Indicators of Borrower and Recipient Commitment and Ownership

Regional level. At the regional level the commitment of the Nile countries has been unprecedented. Leaders in the Nile Basin countries have made it clear that they see the NBI as a tremendous opportunity to bring further cooperation, economic exchange, and eventually greater integration and interdependence. The strength of the NBI partnership was demonstrated at the June 2001 ICCON, at which the countries presented their Shared Vision and their Strategic Action Program to donors and committed themselves to the NBI and the ICCON partnership. The SVP is the first cooperative, basinwide program of the Nile riparians and the first common step toward realizing their Shared Vision.

National level. The governments of the region have committed themselves to finding cooperative solutions to implement this basinwide initiative. The decision of the Nile riparian countries to self-finance the recurrent costs of the NBI Secretariat reflects this commitment. Furthermore, six countries will host PMUs for the seven technical SVP projects, and all countries will contribute considerable in-kind resources and staff time. These actions are a direct result of country ownership and control of the process.

Another demonstration of national commitment is the establishment of a national NBI focal point institution (or National NBI Office) in each country. These offices, which national governments will fund and staff, will play a key role in coordinating NBI activities at the national level. All Nile countries have formed some type of intersectoral committee to ensure communication and coordination among SVP-related ministries. In addition, the government of each country contributes the staff time of a Nile Technical Advisory Committee member to serve as head of its NBI office and provide a general review of the SVP project portfolio, as well as the staff time of project steering committee and technical committee members to provide strategic and technical guidance of the project.

Strong support of the RPT project has also been demonstrated by the extensive participation of governmental institutions and power utilities in the preparation activities for project. Technical experts from the electricity ministries and power utilities took a leadership role in project formulation and the development of detailed implementation plans.

Furthermore, a First Meeting of Nile Basin Ministries in charge of Electricity was held in May 2003 in Tanzania. The Ministers responsible for electricity signed the “Dar es Salaam Declaration” adopting the Vision for the Nile Basin Power Forum (developed during a High-level Meeting of Power Experts, attended by Permanent Secretaries -or equivalent- from the ministries in charge of electricity and the CEOs -or equivalent- from the power utilities held in February 2003 in Dar es Salaam), and approving the RPT Implementation Plan. The Ministers also agreed to meet periodically to review progress of the SVP RPT project and the power investment programs under the Subsidiary Action Programs.

5. Value Added of Bank and Global Support in this Project

The external support provided to the NBI is critical to the success of the SVP as well as the subsidiary action programs. The World Bank, United Nations Development Programme (UNDP), and the Canadian International Development Agency (CIDA) have been strong "cooperating partners” in support of the NBI process since the beginning of the initiative. After ICCON, the circle of partners supporting the SVP widened to include eight additional bilateral donor and international agencies. The World Bank and its partners add value to the program by continuing to facilitate the NBI process, providing technical expertise, mobilizing international funding support, and ensuring quality assurance and fiduciary management.

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The World Bank, UNDP, and other donor partners have global experience in facilitating dialogue and knowledge sharing on international river basins and transboundary waters. They can provide a wide range of practical experience from a series of jointly implemented regional GEF programs (such as for the Baltic Sea, Black Sea, Danube River Basin, Mediterranean Sea, Mekong River Basin, Lake Victoria, and Red Sea). Without the combined resources of the World Bank, UNDP, and other donor partners, implementation of the SVP would proceed at a slower pace and would not fully benefit from the experience of other regional programs worldwide.

The success of river basin development programs in which the Bank and its partners have been involved lends additional credibility to projects that are endorsed by this group of donors. Therefore, the Bank, together with its partners, can mobilize broad multilateral and bilateral donor support for regional programs of this kind.

In addition, the World Bank has well-established procedures for supervision, quality assurance, and fiduciary management, and a successful record of managing multidonor trust funds. The Bank’s technical supervision role, carried out in collaboration with other donor partners, can contribute to effective program implementation. The confidence of other donors in the Bank’s capacity as trust fund administrator strengthens the financial commitment from multiple donors and thus contributes to the financial viability of the SVP.

At the technical level, the Bank is not only providing support to other power trade and regional initiatives in the Africa region such as the West Africa Power Market, the Southern Africa Power Market, and the EAC Master Plan, but is also involved in energy sector projects in many of the Nile Basin countries.

E. SUMMARY PROJECT ANALYSIS

1. Economic

The goal of the overall SVP project is to provide the framework, the relationships and the information that will underpin and enable the cooperative management and development of Nile waters through the NBI. The RPT project is one of the instruments to achieve this goal.

The broad benefits of cooperative Nile waters management and development fall into four categories:

• Environmental benefits derived from integrated river basin management;

• Direct economic benefits derived from more optimal, basinwide planning and development of water resources;

• Regional political benefits, in terms of increased stability and diminished tensions over river control issues;

• Indirect economic benefits, in apparently unrelated sectors, that are enabled by increased economic productivity and interaction, and decreased regional tensions.

The RPT project will generate substantial indirect benefits by enhancing knowledge of power trade issues among power sector decision-makers and professionals in basin countries and establishing the institutional mechanism to advance power trade in the region. Specific quantification of project benefits is not feasible because it is not possible to estimate the value of knowledge enhancement. The added knowledge and skill will position the countries to better advance in the NBI’s subsidiary action programs involving considerable investments in the power

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sector, and the institutional mechanism (i.e., Power Forum) will facilitate the process for future power trading in the region.

2. Financial

The SVP is a US$131 million grant-funded program. Approximately 80 percent of total program costs have been pledged by bilateral donors, the GEF, the African Development Bank, and the World Bank (DGF). The administration of program funds is streamlined by the establishment of the multi-donor Nile Basin Trust Fund (NBTF) which ensures a unified and coherent approach to fund management. Most donors will use the NBTF.

As per the SVP financing plan, the NBTF would cover 95 percent of the total project costs, including taxes and duties. The Nile Basin governments’ contribution in kind (office space, staff time) would cover the balance 5 %. For the full RPT project, costing US$13.1 million, the government’s net contribution would therefore be US$872,000 spread over 4 project years. It is expected that the Nile Basin Power Forum will continue in place after the four years, therefore it is anticipated that additional partner support will be needed in the future. Also, at present, available funding for the project covers only the first two and a half years of the project. Funding for the remaining year and a half will be raised during project implementation.

3. Technical

The RPT project will use web-based systems and electronic communication to the extent possible in order to communicate with the project stakeholders, including Steering and Technical Committee members. The project has allocated sufficient resources (staff and equipment) to ensure that the project is linked electronically with the NBI Secretariat. The project will also provide laptop computers to the Technical Committee members and a communications package in order to ensure an effective communication with the Nile Basin countries implementing the project activities at the national level. In addition, other forms of communication (such as radio, print, and newsletters), as well as regular national and regional conferences and workshops, are integrated into the projects to ensure networking, communication, and information sharing.

At the regional level, an NBI resource center and website will be maintained by the NBI Secretariat in Entebbe. As part of the SVP Coordination function, general guidelines and a framework for the NBI website and for the storage and exchange of information will be established.

4. Institutional

Executing agencies

The NBI, through its executive arm the NBI Secretariat, will execute the GEF/World Bank and Nile Basin Trust Fund-financed components of the SVP14. The NBI will act on behalf of the Nile Basin countries and will be responsible to the World Bank for ensuring that applicable rules and procedures are followed. Each SVP project will be managed by a PMU. These units will be located across the basin and will be designed to function in close liaison with the NBI Secretariat and under its supervision. To ensure that the NBI meets its required fiduciary, procurement, and project management responsibilities, the World Bank and the NBI have agreed on an implementation arrangement through which the NBI will contract UNOPS to support the

14 On behalf of the NBI, the GEF/UNDP–financed portion of Environment project will be executed by UNOPS. GTZ will implement the German contribution to the Water Resources project in close coordination with the NBI Secretariat.

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execution of each project. For the seven thematic projects, no funds will transit directly through NBI, and a procurement and financial management assessment of the NBI is not required.

The SVP Coordination project will strengthen the capacity of the NBI to execute and coordinate the SVP, through its executive arm, the NBI Secretariat. This is essential to ensure both strong ownership of the SVP by the riparian states and effective program execution. The Coordination project will establish, train, and support a small unit at the NBI Secretariat to coordinate the program effectively and to put in place generic procedures to ensure quality control and fiduciary responsibility. The SVP Coordination project also will be responsible for monitoring and evaluation at the program level and for facilitating information sharing within the NBI and with the public. The SVP Coordination project will be primarily financed through the Nile Basin Trust Fund. Other development partners such as Germany/GTZ are also providing direct bilateral support to the project.

Project management

Project management challenges in a multicountry regional setting cannot be underestimated. The commitment of all the Nile countries to the NBI has been and continues to be a key for success. The success of the NBI so far is due largely to the fact that the countries have been squarely in the driver’s seat, and that they have a keen sense of ownership of the initiative. As the program moves into the project implementation phase, attention must be paid to ensure that the PMU and the national project staff identify with and integrate into NBI structures rather than functioning as separate units.

Procurement issues

The SVP will be executed by the NBI through the NBI Secretariat. The Nile Council of Ministers has decided that the NBI will contract a project services agency to implement the SVP. The purpose of the project services agency is to support the NBI in the execution of SVP projects through the provision of project services, particularly related to financial management, procurement of goods and services, and building the NBI’s capacity to oversee basinwide projects. Following an extensive evaluation of options, the Bank agreed to the Nile Council of Minister’s request that UNOPS be selected as the project services agency. For the seven thematic projects of the SVP, including the RPT project, no funds will directly transit through the NBI, and a procurement assessment of the NBI is not required. Bank procurement staff have visited UNOPS during SVP preparation and are satisfied with their capabilities to carryout procurement functions for the projects of the SVP in accordance with Bank Guidelines.

Procurement of works and goods financed by the World Bank will follow the World Bank’s “Guidelines for Procurement under IBRD Loans and IDA Credits” May 2004. Procurement of services financed by the NBTF and GEF Trust Fund will follow the World Bank’s “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” May 2004. The World Bank’s latest editions of standard bidding documents and contracts will be used.

Consultant services. It is envisaged that a large percentage of the consultants used in the program will be individual consultants, many of whom will be selected from the Nile Basin countries, who will work on specific aspects of the different components with both national and basinwide teams. Consultant firms will be used primarily for major studies and training exercises.

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Financial management issues

Because UNOPS will support out the project implementation functions for the NBI, and because the NBI will undertake no direct financial management actions, a financial management assessment of the NBI is not required.

A financial management assessment of UNOPS was conducted by Bank staff and it was concluded that the UNOPS system, as redesigned for the SVP, and capabilities and audit arrangements (internal and external) are sufficient to satisfy the needs of the NBI Shared Vision Program at the present level envisaged (under service contract for all 8 projects). It is therefore understood that the proposed staffing and usage of the UNOPS integrated system are to be maintained at all times at the proposed level.

The certification of UNOPS is valid for all eight projects under the umbrella program and there is no need for case by case assessment. However, as part of implementation supervision, the Bank team should periodically monitor that UNOPS maintains the systems and capacity at the agreed level. Furthermore, a new evaluation of the capacity may become necessary, should the level of funding and volume of transactions increase.

5. Environmental

Environmental category: C (not required)

There is no risk associated with the implementation of the project. The RPT project is of a technical assistance and capacity building nature and is aimed at enhancing cooperation and raising awareness on good practices for power trade. Furthermore, the RPT project aims to raise awareness on transboundary environmental issues vis-à-vis the power sector. One of the studies to be financed by the project will review framework and procedures for environmental impact assessment of power projects in the Nile Basin countries, and the Comprehensive Basinwide study will also seek to incorporate best practices in terms of environmental and social analysis of power development options, including extensive stakeholder consultations.

6. Social

Extensive participation of a wide range of stakeholders is an explicit emphasis of the entire project. Several of the key stakeholders, in particular the public sector and power utilities, are given a direct involvement in the project through their representation on the Steering Committee, and the Technical Committee. In addition, working groups will be formed during the duration of the project to address specific issues related to power trade.

Other public sector stakeholders will be identified in a stakeholder analysis, to be conducted during the first year of the project, and included in information dissemination activities, meetings and workshops. The RPT project will coordinate with the SVP Confidence Building and Stakeholder Involvement project, as relevant. Important public sector stakeholders will include government agencies responsible for water resources, the environment, and attorney general (in relation to legal arrangements) as well as foreign affairs ministries.

Civil society organizations differ substantially among NBI member countries. The focus will be on those organizations that represent the population within the basin area affected by power trade issues, in particular vulnerable groups, like women and ethnic groups. They include local and international NGOs (including environmental organizations), religious groups, labor unions, community-based organizations, universities, and international organizations. The stakeholder analysis exercise will map these stakeholders and their specific interests, and develop a

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stakeholder participation plan whereby information can be exchanged and participation encouraged.

The private sector includes banks and financial institutions, professional associations, business interests and private developers. Energy-intensive businesses in each of the countries are important stakeholders, as these businesses have a strong and direct interest in securing low-cost and reliable power. The private sector will be invited to participate in the seminars.

International donors and other international development agencies, particularly those who have carried out or are carrying out activities of relevance to the SVP in the Nile Basin area, need to be informed and consulted.

The stakeholders in the Nile-RPT project can be categorized into:

• Public sector—political and administrative entities;

• Power utilities—in some cases part of the public sector, in other cases private companies;

• Civil society—nongovernmental organizations (especially environmental organizations);

• Private sector—including local and international investors and energy-intensive businesses;

• International donors; and

• The media.

As far as the tools for public participation are concerned, information campaigns, including newsletters, and local and regional workshops, will be some of the means to reach out to both of these stakeholder groups- agencies/donors and local groups- and to obtain input and feedback from them. To maintain continuous contact with these stakeholders, their representatives would also be invited to participate in Nile-RPT activities, if pertinent.

Communication and public information activities will seek to build upon expertise and information available through the SVP Confidence Building and Stakeholder Involvement project.

Following the stakeholder analysis, a specific mapping of stakeholders with levels of public participation has to be carried out. Information dissemination includes information gathering, consultation also comprise information gathering and dissemination, etc.

In addition, the media in all countries (both local language papers and English/French-language papers) will be kept informed about the objectives, activities, and status of the Nile-RPT project from its initiation.

The third component of the RPT project, the Comprehensive Basinwide study will also include public consultations as an integral part of the assessment. A consultation plan will be developed by the consultants undertaking the study and should include, among others, a stakeholder analysis, methods for stakeholder identification, and identification of appropriate information and consultation tools.

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7. Safeguard Policies

The Integrated Safeguard Data Sheet (ISDS) is attached in Annex 10. There are no anticipated issues surrounding safeguard compliance.

F. SUSTAINABILITY AND RISKS

1. Sustainability

Project ownership. Sustainability of project initiatives depends greatly on the approach adopted during project design and implementation. First and foremost is the question of project ownership. Through a resolutely participatory process of project design, every effort has been made to ensure that riparian countries genuinely “own” the project. The ministries in charge of electricity and the power utilities have been engaged since the initial identification and design of the project. These and other key stakeholders will need to be genuinely engaged in project implementation and encouraged to take ownership of the project and in the long-term of the Nile Basin Power Forum.

Tangible benefits. The second important concern is whether the project outcomes will indeed result in tangible benefits at the local, national and regional levels. It is recognized that the initial beneficiaries of the RPT project are government agencies in charge of electricity and the utilities. For long-term sustainability, project benefits must reach policy-makers, financial planners and private sector investors. Incorporating regional experiences at the national level will need to form an important element of this strategy.

Regional cooperation. Project sustainability will depend on the growing Nile cooperation being maintained and strengthened among the Nile Basin countries. There is a strong sense among the riparians of “crossing the Rubicon”, the sense that so much has been invested in the NBI that they no longer have the option of abandoning it, but must move forward. Regional commitment to the process is high, with the specifics of the cooperation anchored in the Policy Guidelines endorsed by the Nile Council of Ministers. The core institutions governing the NBI (Nile Council of Ministers, Nile Technical Advisory Committee, and the NBI Secretariat) as well as the Policy Guidelines, have emphasized the importance of transparent operational procedures, open communication networks, and information sharing as key principles to guide long-term regional cooperation.

2. Critical Risks

Risk Risk Rating Risk Mitigation Measure

From Outputs to Objective Insecurity and conflict in the region H Leaders of the Nile Basin countries see NBI as a

tremendous opportunity to foster cooperation and poverty alleviation. It is essential that this process has tangible benefits in terms of building trust that can encourage further cooperation and reduce conflict.

Need to realize investments on the ground at the subsidiary level in order to maintain strong support to the Regional Power Trade Project by the Nile Basin countries are not realized

H Strong subsidiary action programs ( ENSAP and NELSAP) that facilitate investments on the ground and actively promote private sector participation

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Investments in infrastructure, particularly hydropower, often carry with them high environmental, social and political risks

H Strategic social and environmental assessments of power development options at the subsidiary level carried out upstream in order to discard environmentally and/or socially unacceptable projects

Continued partner support and financial sustainability, as well as riparian in-kind financing, are not provided at expected levels.

M Demonstrated success throughout implementation, facilitated by a carefully designed project in a highly participatory process

Regional and national level management/institutional capacities are not adequate to ensure effective basinwide coordination.

M Through the broader SVP Program, capacities are being built for regional management at a variety of levels. The present project will contribute to this effort in the power field, through workshops, study tours and targeted training

Lack of riparian government commitment to the power forum development process resulting in reluctance to second qualified staff to the forum

M Build up confidence and collaborative attitudes among the respective riparian institutions through openness and transparency in power forum operations and participatory development of the systems

Sub-regional groupings amongst some of the Nile Basin countries could threaten Nile Basin Regional Power Forum

M Match levels of ambition in the power forum as closely as possible with present sub-regional grouping trends of the riparian governments and develop the power forum in clear response to expressed needs

From Components to Output Lack of understanding within national water-related institutions of the potential use of regional power trade in national water resource management and within related sectors for studies of development scenarios (that could result in inadequate support at the national level including a lack of collaboration on data inputs)

M Include Nile basin universities early on, so that an understanding of the regional power trade in the context of national water resource management forms part of the standard knowledge base of engineering professionals in the region

Insufficient availability of the data and information needed to make regional benefits studies

M Establish a regional energy information database in a standardized manner and link national utility and regulatory institutions through an Energy Information Network

Lack of continued services of trained staff due to rotation or pursuance of other careers

N Design the power forum component to include awareness raising, training and mutual benefits sufficient to motivate the participants in the national NBI networks to provide input and in return have access to the benefits of power forum analytical tools.

Power Forum management team is not business oriented

N Organize on-the-job training for financial management system and procurement specialists at the Power Forum.

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Lack of private sector interest in Power Forum activities and downstream results

M Coordinate workshops with regional business councils and chambers of commerce to disseminate results of technical studies that identify business opportunities in the Nile Basin.

Overall Risk Rating H

3. Possible Controversial Aspects

Possible controversial aspects could include:

• Pace of reforms at the national level might delay power markets integration. • Trade-offs between national self-sufficiency versus regional integration

G. MAIN CONDITIONS

1. Requirements for Appraisal

The NBI Secretariat confirms to the Bank, based on satisfactory evidence, that the RPT project:

• Regional PMU facility has been identified and acceptable proposals have been made by the host country, Tanzania, for its contribution to the PMU.

• Draft project implementation plan has been prepared.

• Acceptable proposal(s) have been made by each government for its contribution at the national level (e.g., staff time for Steering and Technical committees).

2. Requirements for Negotiations

The NBI Secretariat confirms to the Bank, based on satisfactory evidence, that:

• Letter from competent authority (Ministry of Finance and/or appropriate line ministry) confirming host country contribution to supporting the regional PMU has been submitted.

• A project steering committee has been constituted.

• A project technical committee has been constituted

• Project implementation plan, including a procurement plan for the first year, for use in project implementation has been submitted to the Bank and agreed.

• Draft management services agreement for project services support has been prepared.

3. Requirements for Effectiveness

The NBI Secretariat confirms to the Bank, based on satisfactory evidence, that:

• The core staff of the regional PMU has been selected, and the PMU offices are ready for occupation.

• An adequate financial management system for project monitoring and implementation has been established, including, in particular, the conclusion by the NBI, through its

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executive arm the NBI Secretariat, a management services agreement for project services execution to the satisfaction of the Bank.

4. Other

To be met at all times during project implementation:

• Contract with project services agency continues in force.

• Project management unit remains adequately staffed.

• NBI, as the executing agency, is able to operate in accordance with legal Instruments establishing it, provide funds, facilities, services, and other resources required for the project.

H. COMPLIANCE WITH BANK POLICIES This project complies with all applicable Bank policies.

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ANNEX 1. PROJECT DESIGN SUMMARY

Hierarchy of Objectives

Key Performance Indicators Monitoring and Evaluation

Critical Assumptions

NBI Regional Goal Impact Regional power trade is expanded

Increased access/use of affordable, efficient, reliable, environmentally sustainable power

Sector and country reports

Project Development

Objective

Outcomes Monitoring and Evaluation

(From Development Objective to

Goal)

Establish the institutional means to coordinate the development of regional power markets among the Nile Basin countries.

1. Effective dialogue and cooperation among the Nile Basin ministries in charge of electricity and power utilities is established including increased understanding of the legal, regulatory, and pricing regimes required to support power trade

Annual project report, including project monitoring and evaluation, and workshop reports

Investments in transmission at the subregional level advance as planned

2. Strategic framework for advancing power trade in the region developed, including: Appropriate institutional mechanism for a permanent Power Forum identified Strategy and plans for expanded generation and transmission developed and being implemented

Reform of power sector consolidates in the Nile Basin countries

3. Investments needs to facilitate power trade are identified and subsidiary level investments are promoted.

4. Database of regional power systems updated, managed and in use by members.

5. Sector reform strategies promoted among members, advisory services provided.

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Component Outputs

1.1 Project steering and technical committees functioning effectively.15

1.2 PMU manages annual business cycles of project strategic planning, budgeting, implementation, review and evaluation, reporting to membership routinely.

Annual project reviews, quarterly progress reviews on outputs

1.3 PMU formalizes linkages between RPT project and other SVP projects.

Qualified and motivated staff available and retained to effectively implement and sustain project

1.4 X 2 Working Groups functioning effectively. 1.5 Targeted Knowledge Management system established and operational, including:

PMU Office connected to the Internet RPT project website established and used

as knowledge portal to access NBI power trade related reports and for distributing newsletter.

Regularly updated website

Newsletter published regularly and distributed widely to X number of targeted stakeholders, including best practices, workshop information and links to additional resource material of interest for all project areas.

1. Regional coordination and project management arrangements

Public participation plan designed and implemented in all Nile Basin countries

Project newsletter Stakeholder analysis and public participation plan reports

Adequate national level institutional capacity and cooperation to implement and sustain project

2. Nile Basin Power Forum establishment initiated

2.1 Long-term planning and analytical tools are in place: including, Information exchange guidelines developed Reporting processes for Power Forum

members developed and agreed Power sector databank for regional power

systems is developed Long-term strategy for power forum defined Working group on supply/demand and

methodologies established Long term institutional arrangements for

Power Forum developed including Memorandum of Understanding signed by NBI countries

Workshops series implemented on planning and operation of power systems, regulation of power markets and power trade.

Annual progress, technical and financial reports 2.1 Long-term strategy document 2.1 Memorandum of Understanding 2.1 Workshop reports including technical papers presented during workshops 2.1 Reports from working groups

2.1 Riparians are willing to share information and collaborate in the long-term design of the Power Forum

15 See Annex 5 for specific functions of the steering and technical committees.

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2.2 Training and skills enhancement program developed and completed; including, Training program for X number of power

experts from electricity ministries and utilities conducted

Two study tours are organized to visit and exchange experiences on power trade and functioning of power pools.

2.2 Training needs assessment report 2.2 Evaluation and Reports on regional training and seminars 2.2 Reports on lessons learned from study tours

2.2 Training program meets needs of the countries 2.2 Minimum level of trained staff available for regional training and seminars

2.3 Initial financial resource mobilization activities designed and implemented : two investment seminars to promote

investments at the sub-regional level designed and conducted

Investment promotion documentation prepared and distributed

“Drawdown” facility in place and in use by the Nile Basin countries according to generic SVP guidelines

2.3 Seminar summaries 2.3 Reports from investment seminars, including materials for investment promotion 2.3 Reports on “drawdown” facility disbursed funds

2.3 Investment seminars provide useful promotion documentation 2.3 Investment seminars attract important national and international private sector participants

2. Nile Basin Power Forum establishment initiated (continued)

2.4 Special studies intended to promote understanding among Nile Basin power sector specialists on best practices related to power trade conducted and disseminated, including the following studies: Review of best practices in multi-purpose

coordination regimes Review of institutional and regulatory

frameworks Blue chip” study on review of private-public

partnership models for financing and implementing HEP

Review frameworks and procedures for EIA Other specialized studies identified and

conducted

2.4 Reports on studies and dissemination workshops reports

2.4 Studies provide useful insights

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3. Comprehensive basinwide study

3.1 Multi-sector working group established, preparatory study & dissemination workshop completed

Monthly and Quarterly implementation progress reviews. 3.1 Working group reports

Action plans, investment decisions influenced by Study at the subsidiary level

3.2 Comprehensive basinwide study to analyze power supply, demand and trade opportunities for the region in the context of multipurpose water resources development completed

3.2 Study reports

Increased cross-sectoral cooperation based on study Studies provide usable insights

3.3 Basin Study dissemination program conducted (designed to influence action plans at the subsidiary level, to promote cross-sectoral cooperation and to influence investment decisions by potential investors).

3.3 Workshop reports

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ANNEX 2: DETAILED PROJECT DESCRIPTION

1. OBJECTIVE The long-term goal of the RPT project is to improve access to reliable and low-cost power in the Nile Basin in an environmentally sustainable manner. An important element in achieving this goal is to create an effective institutional mechanism to promote and develop power trade opportunities among the countries participating in the NBI. The creation of a regional electricity market can play a key role in furthering cooperation among the Nile Basin states and in ensuring that the hydropower resources of the Nile Basin are developed and managed in an integrated and sustainable manner.

Adequate and reliable power supply is critical to meeting the social and economic development objectives of the Nile Basin countries. Yet, in a large majority of the Nile Basin countries, only about 10% of the population has access to electricity. This situation exists despite the presence of vast and as yet untapped hydroelectric and other energy resources in the Nile Basin. The present limited development of national power systems in the Basin imposes a constraint on the exploitation of these resources at affordable costs at the national level. The cost of hydropower in the Nile Basin countries is also increased by the large seasonal variations in hydropower output, while the costs of meeting peak loads on national power systems can be high in countries where these loads are supplied from expensive thermal plants. These constraints on supplying affordable power could be overcome by expanding the market for these resources by developing power trade among Nile Basin countries.

Countries in the Nile Basin are aware of the potential benefits from trading power. While current levels of power trade among Basin countries are low, many of them are considering ways to increase the levels of this trade and are looking for suitable investments to realize this objective. A scoping study16 - Opportunities for Power Trade in the Nile Basin - identified several options for increasing power trade in the region. The study also found that a more focused and coordinated process for discussing ways to expand power in the Nile Basin would advance the development of power supply facilities. The study recommended that this objective be realized through the creation of a basinwide forum of national power experts to facilitate continued dialogue in the region

2. APPROACH One of the main thrusts of this project is the creation of a Power Forum that will enable stakeholders from the Nile Basin countries to work together to promote basinwide cooperation and awareness, enhance understanding, and build capacity on power trade issues. The Power Forum will promote the following three objectives: (i) formation of an institutional infrastructure for market development; (ii) a learning environment for understanding the nuances of legal, regulatory, and pricing regime required for regional power trade; and (iii) identification of power generation and transmission projects that will benefit power trade among the Nile Basin countries.

Another component of this project, a comprehensive basinwide power study, will analyze power supply, demand and trade opportunities in the context of multipurpose water resources development.

16 Opportunities for Power Trade in the Nile Basin–Final Scoping Study, Norconsult/Statnett, September 2000.

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The project activities will be fully integrated with the other SVP projects. For example, stakeholder involvement and public awareness activities will be coordinated with the SVP Confidence Building and Stakeholder Involvement project (CBSI), which will expand understanding and confidence, and foster basinwide ownership of the RPT project. Cooperative and integrated water resources management, database development and data sharing activities will be coordinated with the SVP Water Resources and Management project and the Decision Support System tool that will be developed in the project. Capacity building and training activities will be coordinated with the SVP Applied Training project. Relevant environmental issues will be coordinated with the SVP Environment project, and power issues for rural communities with the SVP Efficient Water and Agricultural Production project.

The following table summarizes project components, subcomponents, and activities. Detailed descriptions of each component follow.

Summary of Component Activities

Component 1: Regional Coordination and Project Implementation

Subcomponent 1: Regional Coordination and Implementation activities Establish project steering committee, according to the terms of reference in the PIP Establish technical committee, according to the terms of reference in the PIP Establish project management unit (PMU) in host country (Tanzania) Establish liaison and coordination with other SVP projects, especially the Water Resources Planning

and Management project. Establish liaison and coordination with the Subsidiary Action Programs Implement an HIV/AIDS Training and Awareness campaign for PMU Staff

Subcomponent 2: Knowledge Management activities Hire IT/Communications specialist Publish a Power Forum Newsletter Establish and launch a Power Forum web-site linked to the NBI web-site to facilitate dialogue between

power forum members as well as external promotion of the power forum and its activities. Update and maintain website Conduct a stakeholders analysis Prepare a public participation plan

Component 2: Establishment of Nile Basin Power Forum

Subcomponent 1: Long-term Planning and Analytical Tools activities Investigate and review options for establishing the Power Forum as a legal entity. Draft a proposed Memorandum of Understanding or its equivalent, undertake the necessary

consultations, and facilitate the approval and ratification of the MOU. Develop information exchange guidelines in order to formalize necessary agreements and preparation

of appropriate documentation to guide the involvement of governments, public utilities, and other possible participants in the Power Forum.

Coordinate Power Forum member reporting processes and requirements Initiate development of a long-term strategy for the Power Forum Create a regional power sector databank Establish working groups for demand/supply studies and methodologies Convene workshops and meetings, focusing on planning and operation of power systems, regulation of

power markets and power trade.

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Subcomponent 2: Training and Skills Enhancement activities Initiate training needs assessment among the Power Forum members, regulatory agencies, and

government ministries responsible for power. Decide specific training needs in key areas of power trade, including demand forecasting, analysis of

power generation options, transmission pricing and regulatory aspects. Define program for assistance to government ministries responsible for power and regulators, taking

into account other training initiatives under the NBI. Define training for power utilities, taking into account other training initiatives under the NBI Launch training program. Establish liaison and coordination with other SVP projects in terms of training initiatives, and Nile Basin

Universities. Subcomponent 3: Financial Resource Mobilization Activities Liaise with development partners through ICCON meetings in accordance with established NBI

procedures Develop power forum documentation for investment promotion in coordination with subsidiary action

programs, including detailed project profiles Organize investment seminars for private investors and financiers in coordination with subsidiary action

programs Establish a “drawdown’ facility.

Subcomponent 4: Special Studies Activities Review of best practices in multipurpose coordination regimes Review of institutional and regulatory frameworks to support regional power trade Conduct a “blue chip” study on review of private-public partnership models for financing and

implementing hydropower projects Review frameworks and procedures for environmental impact assessment of power projects Conduct study on alternative strategies and mechanisms for poverty reduction Hold regional workshops to present the findings of the studies Determine other specialized studies, advisory services and workshop/seminars

Component 3: Comprehensive Basinwide Power Study

Subcomponent 1: Preparatory Study Activities Develop Terms of Reference, contract and carry out the assessment study to identify past national,

subregional and regional power and water resource management studies; investigate the availability of pertinent data and data harmonization requirements for a multiobjective study; and prepare detailed Terms of Reference for conducting the comprehensive basin wide study. The Lead specialists of the PMU, under the technical guidance of the Technical Committee will undertake this task.

Hold a regional workshop to disseminate findings and discuss Detailed Terms of Reference for the comprehensive study.

Subcomponent 2: Comprehensive Basinwide Study Activities(to be implemented in second funding phase) Establishment of special working groups on non-power experts In coordination with UNOPS, and under the Technical guidance of the Technical Committee, contract

and launch the comprehensive basinwide study Manage and monitor the study implementation Hold regional workshop to disseminate findings

Component 1: Regional Coordination and Project Implementation

This component includes activities related to the project management arrangements that facilitate regional cooperation and project implementation, as well as knowledge management activities including stakeholder identification and development of a participation plan.

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Subcomponent 1: Regional Coordination and implementation

This subcomponent focuses on the institutional set-up necessary to establish overall program and management arrangements for the project, as well as maintain and operate the project. This includes one-time set-up costs for staffing, equipment, installation of a computer system, vehicles, and on-going office maintenance costs. It includes the establishment of the project steering committee17, the technical committee,18 and a regional PMU. It will also establish a liaison with other SVP projects, especially the Water Resources Planning and Management project, and the subsidiary action programs.

Main Activities

1. Establish project steering committee 2. Establish technical committee 3. Establish PMU in the host country 4. Establish liaison and coordination with other SVP projects, especially the water

Resources Planning and Management project 5. Establish liaison and coordination with the subsidiary action programs 6. Procure and install computer hardware and software 7. Conduct operations 8. Implement HIV/AIDS awareness and training campaign for PMU staff

Subcomponent 2: Knowledge Management

This subcomponent will provide project participants and other stakeholders across the Basin with improved access to relevant power trade information, in accordance with NBI guidelines for knowledge management and information sharing. The activities to be carried out by this subcomponent support the exchange of information, workshop materials and lessons learned from project activities, and will provide information about regional activities to a wider range of stakeholders across the basin and thus likely increase transparency and confidence.

The key knowledge management products will include design of a project specific website, a regular project newsletter, addressing special themes/topics as appropriate, and a regularly updating of the project website. This subcomponent will work closely with and support the setup and maintenance of connections to the NBI website and resource center to be established and managed by the NBI Secretariat.19

The IT/Knowledge Management PMU staff will be responsible for compiling and making available resource materials on the project website, and will publish the newsletter at least three times a year. Short-term consultancies will support this effort as needed.

In order to better identify and integrate key stakeholders of the RPT project, a stakeholder analysis will be conducted during the first year of the project and a public participation plan will be developed accordingly. More details of the stakeholder analysis are provided in section 2.2 of this PIP. The stakeholders analysis will be conducted by independent consultants competitively selected. The PMU, in coordination with the Technical Committee and the SVP Confidence Building and Stakeholder Involvement project, will coordinate the implementation of the study and ensure that an appropriate public participation plan is implemented.

17 Project steering committee members will be appointed before project effectiveness. 18 Project technical committee members will be appointed before project effectiveness. 19 The NBI Secretariat will maintain the NBI website. Each SVP project will be linked to the NBI website but will be responsible for maintaining the project-specific site.

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Main Activities

1. Recruit IT/Knowledge Management specialist 2. Publish project Newsletter 3. Establish and launch a Power Forum web-site as part of NBI web-site 4. Update and maintain website 5. Conduct a stakeholders analysis 6. Prepare a public participation plan

Component 2: Establishment of Nile Basin Power Forum

Countries in the Nile Basin are aware that regional power trade can be a useful part of a strategy to increase and improve reliability of power supply. The potential benefits for power trade are related to cost savings in the supply of power from cooperation relative to the cost of independent expansion of national power systems. Such cost savings may arise from a reduction in:

• Operation costs due to economic power exchange

• Investment costs in additional supply due to least cost development of energy resources from a regional as opposed to a national perspective

• Spinning reserve requirements as a proportion of peak load; and

• Coincident peak load relative to average load

Furthermore, significant environmental benefits could arise if regional power trade is developed in a least-cost basis. Such benefits could result from water conservation and land protection effects, and from a reduction in the emission of greenhouse gases and other pollutant emissions caused by a shift from thermal to hydropower based generation.

The development of a regional power market requires the establishment of a power pool concept. All power pools have a common objective: to be able to realize the potential benefits within individual country networks to the mutual economic advantage of all the interconnected countries. But each power pool may be considered unique in having to meet the specific requirements and characteristics of the participating countries’ electrical power networks and generation facilities, and demand profiles.

For the integrated development of regional electricity markets in the basin, it is important to assure that all countries have effective power sector policies and along with activities to build cooperation and foster a regional dialogue and common understanding of good practices. In recent years, there has been much heightened activity in investigating power trading opportunities in the Nile Basin. Efforts to improve regional cooperation and coordination of power systems is seen as an essential step in ensuring effective power project planning capability at the national, subregional and basinwide level.

The Power Forum will bring the following advantages:

• Leveling the playing field. Providing means to the countries to achieve similar quality level in terms of load forecasting and load research, through examples of good practice, and provision of advisory services when required.

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• Project and program support. Increased capacity for project planning and support, through examples of good practice and methodologies, provision of training, and advisory services and development of technical guidelines when needed.

The RPT project will initiate the establishment of the Nile Basin Power Forum and the implementation of the following key activities that will lay the foundation for a long-term regional power market.

Subcomponent 1:Long-term Planning and Analytical Tools

This key subcomponent will focus on defining the role of the Power Forum and creating the long-term institutional setting of the institution. Key activities include:

• Formulation of guidelines and principles for information exchange and reporting mechanisms for the Power Forum member countries as well as the formalization of necessary agreements to control and guide the involvement of governments, utilities and other future members of the Power Forum. The PMU will conduct consultations with the Nile Riparian countries participating in the formation of the Power Forum to draft those guidelines.

• Initiate the development of a long-term strategy for the Power Forum, based on (i) the “Vision” of the Power Forum developed at the High-level Power Experts Meeting in Dar es Salaam, Tanzania, and to be endorsed by the Ministers responsible for electricity; and (ii) the results of the comprehensive basinwide study and other studies undertaken as part of this project. The PMU, supported by individual consultants, as needed, will develop this long-term strategy.

• Draft of a Memorandum of Understanding. The PMU will undertake the necessary consultations with the members participating in the project to draft a proposed Memorandum of Understanding, or its equivalent, and will facilitate the approval and ratification of the MOU.

• Investigate and review options for establishing the Power Forum as a legal entity. The Power Forum will be established under the auspices of the NBI (i.e. as an NBI body). The PMU will conduct this activity supported by independent consultants as needed.

At the same time, the PMU will promote best practices in key areas for the future development of a power pool through the creation of working groups. The Working Groups will review supply/demand methodologies and will convene workshops focusing on planning and operation of power systems, regulation of power markets and power trade issues.

Finally, this subcomponent will create a regional power sector databank, coordinated by the lead specialist on power systems operation/planning and the IT specialist. This subcomponent will liaise with the Water Resources project (DSS Component) on the management of technical related data.

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Main Activities

1. Investigate and review options for establishing the Power Forum as a legal entity 2. Draft a proposed Memorandum of Understanding 3. Develop information exchange guidelines 4. Coordinate Power Forum member reporting processes and requirements 5. Initiate development of a long-term strategy for the Power Forum 6. Create a regional power sector databank 7. Establish working groups for demand/supply studies and methodologies 8. Convene workshops and meetings, focusing on planning and operation of power systems,

regulation of power markets and power trade

Subcomponent 2: Training and Skills Enhancement

The objective of this subcomponent is to initiate the process of building necessary institutional and human capacity at the regional and national level to successfully handle increasing power trade in the Nile Basin countries. Training and long term education of staff will strengthen technical capacity and facilitate self-sufficiency in the planning and development of hydropower and transmission interconnection projects.

An assessment of training needs will be conducted during the first year of the project. Expert consultants will be competitively hired by the PMU to conduct the training needs assessment and develop appropriate training programs for technical experts, regulatory agencies, utilities and government ministries responsible for power.

The training program maybe done through a series of meetings, workshops, and seminars. This regional capacity building effort will also serve as training of trainers, who will conduct, as needed, training on major topics presented at the regional level to disseminate know-how and build capacity at the national and local level. The training activities of this project will be conducted in coordination with the SVP Applied Training project.

In order to incorporate (where possible) best practices and experiences of other regional organizations involved in power sector cooperation and trade, two study tours will be organized for selected Technical Committee members. The identification of the Power Trade organizations for the study tour will be selected based on similarities with the conditions in the Nile Basin countries.

Main Activities

1. Initiate training needs assessment among the Power Forum members, regulatory agencies, and government ministries responsible for power

2. Decide specific training needs in key areas of power trade; including two study tours 3. Define program for assistance to government ministries responsible for power and

regulators, taking into account other training initiatives under the NBI 4. Define training for power utilities, taking into account other training initiatives under the

NBI 5. Launch training program 6. Establish liaison and coordination with other SVP projects in terms of training initiatives,

and Nile Basin universities.

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Subcomponent 3: Financial Resource Mobilization

The activities of this subcomponent can be divided into two main areas. The first one is the financial resource mobilization for the second phase of the actual project20 and for the functioning of the Power Forum beyond the four years of the present project. It is expected that the Power Forum will have an indefinite life span and additional resources will be required from the development partners for the medium/long-term functioning of the Forum until it becomes self-sufficient.. Therefore, additional resources will have to be mobilized at a later stage. The implementation of this subcomponent will be coordinated with the Nile Secretariat through the SVP Coordination project. The project Manager, working closely with the SVP coordination project, will prepare a plan to liaise with the development partners in accordance to NBI procedures to mobilize additional financial resources for the functioning of the Power Forum.

The second area of required financial resource mobilization is project specific. The high capital cost associated with new generation plants optimally sized beyond the needs of the host country, as well as the transmission interconnections to export the surplus capacity, are often beyond the financial capability of the host country. These investments need to be funded by private investment or through joint ventures. A well-prepared, optimal power pool plan, accepted by all the interconnected countries provides the best foundation for a bankable document for funding of such investments. Based on the results of the studies on power development options conducted in NELSAP and ENSAP and the comprehensive basinwide study, the lead specialists of the PMU will prepare documentation for investment promotion, including detailed project profiles and organize two investment seminars for private investors and financiers. Opportunities to collaborate with the SVP Socio-Economic and Benefit Sharing project in this subcomponent will be explored.

In addition, a drawdown support facility will be established for financing special studies as well as specific support that will be made available based on demonstrated national need that contributes to regional power trade issues.21 The drawdown facility will encourage learning by doing and can also provide seed money to initiate institutional efforts, such as private sector participation models, if desired (i.e., for preparation of proposals for mobilizing technical assistance and financial resources. Specific country to country experience exchange and advisory support that will be made available based on demonstrated national need that contributes to regional power trade issues). The PMU will design the drawdown facility, in accordance with NBI guidelines for drawdown facilities.

Main Tasks

1. Liaise with development partners in accordance with established NBI procedures 2. Develop power forum documentation for investment promotion in coordination with

subsidiary action programs, including detailed project profiles 3. Organize investment seminars for private investors and financiers in coordination with

subsidiary action programs 4. Establish and operate a ‘drawdown” support facility.

20 The African Development Bank support for the NBI process, and one of the partners supporting this project (US$ 2 million) is currently being finalized and expected to be effective in early phase 2. 21 A drawdown facility would enable basin countries to gain access to resources (in this case technical support, advice, and assistance) that are provided out of an established fund through mechanisms that minimize administration and bureaucratic procedures.

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Subcomponent 4: Special Studies

This subcomponent will consist of a series of studies aimed at stimulating power cooperation and trade. The primary goal is to produce a series of technical studies that foster regional dialogue and common understanding of best practices.

The following studies have been given high priority:

• Review of best practices in multipurpose coordination regimes. This study includes the compilation of a compendium of best practices and case studies on multipurpose hydropower coordination regimes that promote the management of water resources in an integrated an efficient manner. This study will be coordinated with the SVP Water project.

• Review of institutional and regulatory frameworks to support regional power trade. Extensive power trading, beyond bilateral power purchases requires an approach to opening the power sectors. If power trade is to develop beyond bilateral power purchases it has to be not only economically attractive to all countries, but also some minimum conditions have to be met in the long-term, such as an opening of power sectors, including some degree of compatibility in sector structures, conditions for private entry, and market competitiveness.

The existing Nile Basin power utilities are traditional vertically integrated utilities. This facilitates dialogue between utility management and government in discussing electricity sector developments. However, most of the state-owned power companies require improvements in their commercial and financial operations, not only to support power trade but also to improve reliability and accessibility of supply. The countries of the region are addressing these issues under ongoing reform programs, and several of the utilities are currently being exposed to unprecedented change as a consequence of decisions around power sector reform. The governance nature and structure of each country’s power sector needs to be well understood in developing frameworks aimed at promoting and enhancing regional electricity trade.

The restructuring and unbundling of state-owned vertically integrated national power utilities is already underway in most of the Nile Basin countries. This introduces the need for independent regulation of the electricity supply industry. Uneven regulatory reforms in the region may create greater differences in sector governance between countries, but need not inhibit the introduction of regional electricity trading.

• Conduct a “blue chip” study on review of private-public partnership models for financing and implementing hydropower projects. Many opportunities exist for developing power generation for export in the region. Economically viable projects might be identified through the subsidiary action programs, nevertheless funding may be hampered by the financiers’ perception of risk related to country specific issues and/or the multinational character of projects oriented towards a regional market. This study will review financial models and partnerships that could contribute to reach financial closure in potential regional projects. This study could potentially be conducted in collaboration with the SVP Socio-Economic and Benefit-Sharing project.

• Review frameworks and procedures for environmental impact assessment of power projects in the Nile Basin countries. Regional power trade carries a number of environmental and social aspects and implications. In line with best practices, it is important that environmental, social and other safeguard issues are effectively integrated

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into the planning and design process in an “upstream” manner. Environmental issues should be addressed through a regional approach to resolve conflicts between regions or countries, coordinate regulation and incorporate environmental issues into overall planning. This study will be coordinated with the SVP Environmental project.

• Conduct a study on mechanisms and strategies for poverty reduction, including options such as better targeting of subsidies, expanding access to the rural poor and involving local private sector in small-scale and decentralized power projects.

These studies will be carried out by expert consultants selected competitively, under the technical guidance of the Technical Committee, and supervised by the lead specialists of the RPT project. The results will be widely disseminated, through regional workshops and the Power Forum website, as a key step towards a more informed power trade debate in the Nile Basin. Other studies relevant to power trade will be identified by the PMU lead specialists and the Technical committee.

Main Tasks

1. Review of best practices in multipurpose coordination regimes 2. Review of institutional and regulatory frameworks to support regional power trade 3. Conduct a “blue chip” study on review of private-public partnership models for financing

and implementing hydropower projects 4. Review frameworks and procedures for environmental impact assessment of power

projects in the Nile Basin countries 5. Study on strategies and mechanisms for poverty reduction 6. Determine other specialized studies, advisory services and workshop/seminars 7. Hold regional workshops to present the findings of the studies

Component 3: Comprehensive Basinwide Study

This component could be implemented in a sequential manner in order to take advantage of the outputs of the subregional power studies to be conducted in the subsidiary action programs, and align with currently available funding.

The objective of the comprehensive basinwide study is to analyze power supply, demand and trade opportunities for the region in the context of multipurpose water resources development. The study will seek to incorporate best practices in options analysis, including extensive stakeholder consultations. The detailed basinwide analysis will be used to inform the planning of multipurpose river basin management development in the subsidiary action programs. In addition, the study will also serve to detail the strategic focus of the Power Forum to more precisely define how the forum can assist the Nile Basin countries in moving towards the development of a regional power market.

Subcomponent 1: Preliminary Study

Given the complexity of the comprehensive basinwide power study that has to integrate both power development and multipurpose projects analysis, the study will be launched pursuant to a preparatory study carried out under the supervision of the lead specialists of the PMU. The Terms of reference for this preliminary study will be prepared by the PMU and the Technical Committee, in close collaboration with the SVP Water Resources Planning and Management project, other relevant SVP projects such as the Agriculture and Environmental projects, as well as ENSAP and NELSAP. Close collaboration with the subsidiary action programs is essential to ensure that the basinwide study builds open ongoing power-related work at the Sub-basin level.

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The preparatory study will investigate, from a multipurpose perspective, past power and water resource management studies, the availability of pertinent data and data harmonization requirements for a multiobjective study, and prepare detailed terms of reference for the comprehensive basinwide study.

A regional workshop will be held to disseminate study findings, and to discuss the detailed terms of reference for the comprehensive study.

This preparatory study is targeted to take place during the second year of the project.

Main Activities

1. Develop terms of reference for preliminary study, in collaboration with appropriate SVP projects and ENSAP and NELSAP; contract and carry out the preliminary study to identify past national, subregional and regional power and water resource management studies; investigate the availability of pertinent data and data harmonization requirements for a multiobjective study; and prepare detailed Terms of Reference for conducting the comprehensive basin wide study.

2. Hold a regional workshop to disseminate findings and discuss Detailed Terms of Reference for the comprehensive study.

Subcomponent 2: Comprehensive Basinwide Study

Working groups of power experts and non-power experts (water resources managers, environmental specialists, etc) will be assembled to ensure that hydropower (including social and environmental) development issues are addressed in the broader context of integrated and multipurpose water resources development and management. The study will follow best practices in options analysis and hydropower development, including extensive stakeholder participation and multicriteria options assessments.

Taking into account that the subsidiary action programs and other SVP projects have planned or are undertaking similar regional studies, a coordination mechanism will be designed to avoid overlapping of activities, and to build upon pertinent outcomes of these studies.

The results of the study will be widely disseminated. A regional workshop will be conducted to disseminate findings and the Technical Committee members will also hold national workshops to inform relevant national stakeholders in the pertinent sectors such as water, agriculture and environment.

The full basinwide study is likely to be initiated the third year of the project, assuming that the needed project funds can be mobilized. It is expected that, based on demonstrated success, these resources can be mobilized.

Main Activities

1. Establishment of special working groups of power and non-power experts 2. Under the Technical guidance of the Technical Committee, and in liaison with ENSAP and

NELSAP, contract and launch the comprehensive basinwide study 3. Manage and monitor the study implementation 4. Hold regional workshop to disseminate findings

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ANNEX 2—APPENDIX A SUMMARY BUDGET TABLES PHASE 1

Budget Phase 1 (US$ million)

Components Riparians (in kind)

NBTF Total

1. Regional coordination and implementation 1.1 Regional coordination 0.55 2.33 2.88 1.2 Knowledge management 0.18 0.18 Component 1 subtotal 2.51 3.06 2. Establishment of Power Forum 2.1 Long term planning and analytical tools 0.56 0.56 2.2 Training and skills enhancement 0.59 0.59 2.3 Financial resource mobilization 0.19 0.19 2.4 Special studies 1.22 1.22 Component 2 subtotal 2.57 2.57 3. Comprehensive Study 3.1 Preparatory study 0.21 0.21 Component 3 subtotal 0.21 0.21 Estimated UNOPS Fee 0.42 0.42 TOTAL 5.71 6.26

Riparian Contribution Phase 1 (US$ Equivalent)

Contribution from Nile Countries

9 NBI Countries PMU Host Country (Tanzania)

Total

PMU Office (rent) 150,000 PMU Staff 75,000 75,000 PMU Upgrades 6,250 6,250 Steering Committee Staff 90,000 90,000 Technical Committee Staff 200,000 200,000 Utilities 30,000 30,000 TOTAL 290,000 261,250 551,250

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Nile Basin InitiativeSVP Power Trade Project

Component 1.1 - Regional CoordinationDetailed Costs

Totals Including Contingencies(US$ Million)

2004 2005 2006 Total

I. Investment Costs A. PMU Staff

Project Manager 0.06 0.10 0.10 0.26Financial/procurement officer 0.05 0.07 0.07 0.19Power Systems Operations Specialist 0.04 0.08 0.08 0.20Hydropower Planning Specialist - 0.06 0.08 0.14Environment Specialist - 0.05 0.07 0.13IT/KM Specialist 0.01 0.04 0.04 0.09Office Manager 0.02 0.04 0.04 0.10Bilingual assistant 0.02 0.03 0.03 0.07Relocation allowance /a 0.02 0.01 0.03 0.06

Subtotal PMU Staff 0.22 0.47 0.54 1.24B. Operating Costs

Technical Committee Meetings 0.04 0.08 0.08 0.20Steering Committee Meetings 0.04 0.04 0.04 0.11PMU Staff Training 0.01 0.01 0.01 0.03PMU Basin Travel 0.02 0.01 0.01 0.04PMU International Travel 0.01 0.02 0.02 0.04PMU Travel to NBI Secretariat 0.00 0.00 0.00 0.01Office Renovation 0.01 - - 0.01Phone - land line 0.01 0.01 0.01 0.03Phone - cell connection 0.00 0.00 0.00 0.01Internet access 0.00 0.00 0.00 0.01Office Supplies 0.00 0.01 0.01 0.02Printing (paper, etc) 0.01 0.01 0.01 0.03Insurance 0.00 0.01 0.01 0.01Bank Charge 0.00 0.00 0.00 0.01Report Production and Translation 0.01 0.01 0.01 0.04IT Maintenance /b 0.01 0.01 0.01 0.03Vehicle insurance 0.01 0.01 0.01 0.02Other Operational Expenses 0.00 0.01 0.01 0.02

Subtotal Operating Costs 0.19 0.25 0.25 0.69C. Incidentals

Independent Evaluations - 0.05 - 0.05Annual Audit 0.01 0.01 0.01 0.03Recruitment of Staff (regional) 0.08 - - 0.08Recruitment of Staff (national) 0.00 0.00 - 0.00Legal Advisor 0.01 - - 0.01

Subtotal Incidentals 0.10 0.06 0.01 0.18D. Office and Operational Equipment

Administrative Work Station 0.01 - - 0.01Technical Workstations 0.04 - - 0.04PMU Laptop 0.00 - - 0.00NFP Laptops 0.06 - - 0.06Telephone/polycom 0.00 - - 0.00LCD 0.01 - - 0.01Overhead Projector 0.00 - - 0.00Digital Camera 0.00 - - 0.00VCR 0.00 - - 0.00Air conditioner 0.02 - - 0.02Generator 0.01 - - 0.01TV/video player 0.00 - - 0.00Office Furniture 0.03 - - 0.03Vehicle 0.04 - - 0.04

Subtotal Office and Operational Equipment 0.22 - - 0.22Total 0.73 0.79 0.81 2.33UNOPS Fee (Estimated) 0.06 0.06 0.06 0.19TOTAL INVESTMENT COSTS 0.79 0.85 0.87 2.51\a Assumes 3 international hires of 5 professional staff.\b Assumes approximately 20% of equipment cost.


Component 1.2 - Knowledge ManagementDetailed Costs


2004 2005 2006 Total

I. Investment Costs A. Knowledge Management

Newsletter 0.00 0.01 0.01 0.02Web-site development 0.05 - - 0.05Stakeholder Analysis 0.03 0.08 - 0.11

Total 0.08 0.09 0.01 0.18UNOPS Fee (Estimated) 0.01 0.01 0.00 0.01TOTAL INVESTMENT COSTS 0.09 0.10 0.01 0.19

Component 2.1 - Long-term Planning and Analytical ToolsDetailed Costs


2004 2005 2006 Total

I. Investment Costs A. Long-term planning and analytical tools

Development of Power Sector Database - 0.11 0.03 0.13Power Sector Strategy Development - 0.05 0.05 0.11Development of Inter-utility MoU - 0.05 - 0.05Review options for legal entity - 0.05 - 0.05Workshops and training - 0.11 0.11 0.22

Total - 0.37 0.19 0.56UNOPS Fee (Estimated) - 0.03 0.02 0.05TOTAL INVESTMENT COSTS - 0.40 0.21 0.61

Component 2.2 - Training and Skills EnahancementDetailed Costs


2004 2005 2006 Total

I. Investment Costs A. Training and skills enhancement

Training Needs Assessment - 0.16 - 0.16Regional Training - 0.11 0.11 0.22Study Tours 0.11 - 0.11 0.22


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Component 2.3 - Financial Resource MobilizationDetailed Costs


2004 2005 2006 Total

I. Investment CostsA. Financial Resource Mobilization

Investment Profiles for SAP - 0.05 0.05 0.11Business Roundtables - 0.08 - 0.08

Total - 0.13 0.05 0.19UNOPS Fee (Estimated) - 0.01 0.00 0.02TOTAL INVESTMENT COSTS - 0.14 0.06 0.20

2004

Component 2.4 - Special StudiesDetailed Costs


2005 2006 Total

I. Investment CostsA. Special Studies

Hydropower co-ordination best practices - 0.27 - 0.27Review Regulatory Frameworks for Power Trade 0.23 - - 0.23Review PPP models for financing hydropower - - 0.32 0.32Review EIA Regulatory Regimes - 0.24 - 0.24Other Studes 0.16 - - 0.16


Nile Basin InitiativeSVP Power Trade Project

Component 3 - Comprehensive StudyDetailed Costs


2004 2005 2006 Total

I. Investment Costs A. Comprehensive Study

Preparatory Study /a - 0.21 - 0.21Comprehensive Study /b - - - -

Total - 0.21 - 0.21 UNOPS Fee (Estimated) - 0.02 - 0.02_TOTAL INVESTMENT COSTS - 0.23 - 0.23\a Assumes additional funds of at least US$300,000 will be raised to cover the full cost of this study.\b Assumes additional funds of at least US$4.0 million will be raised to cover this study.

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ANNEX 3: ESTIMATED TOTAL PROJECT COSTS

Project Cost US$ million by Component

Component Local Foreign Total

1. Regional Coordination and Implementation 0.88 4.23 5.11 2. Establish Power Forum 3.40 3.40 3. Comprehensive Basin-wide Power Study 4.50 4.50 Total Baseline Cost 12.1 12.1 Physical Contingencies 0.37 0.37 Price Contingencies 0.56 0.56 Total Project Costs 13.10 13.98 Total Financing Required 13.10

Project Cost By Category US$ million

Category Local Foreign Total

Equipment 0.22 0.22 Consultant Services 8.79 8.79 Training and Workshops 1.56 1.56 Operational Expenses 2.53 2.53 In Kind from Riparians 0.88 0.88 Total Project Costs 13.10 13.98 Total Financing Required 13.10

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ANNEX 4. ENERGY SECTOR–RELATED CAS

Country Energy sector related CAS goal

Burundi CAS 14442-BU, May 2, 1995 The policy dialogue would focus on: 1) increased equity and better

governance, through rapid withdrawal of the State from activities which can be carried out more efficiently by the private sector, reduction of public expenditure and its reallocation to human resource development and maintenance and operation of essential infrastructure, increased transparency of public management, and decentralized delivery of public services.

The private sector must take the lead in a new strategy for accelerated growth, through State divestiture, the promotion of a market-based competitive environment, and improved financial intermediation. The Government would be expected to liquidate rapidly non-profitable enterprises, privatize assets by auctioning (or even distributing) shares in State-owned enterprises, and privatize management in cases where privatization of assets is not yet feasible.

A seminar on experience with divestiture could help build a national consensus and define modalities to accelerate reform.

Sector dialogue on public enterprise reform would also be intensified. In power and water, under the ongoing management assistance partnership program, the State-owned utility (REGIDESO) has undertaken significant cost reduction measures, and has increased power tariffs.

The Bank would support the creation of an enabling business environment including macroeconomic stability, deregulation, more efficient financial intermediation, and better economic infrastructure. It would assist Burundi to reduce the fiscal deficit and generate public savings, accelerate legal and regulatory reform, restructure the financial sector, improve physical infrastructure, and develop human capital and local capacities by: (a) supporting lease management of the electricity and water utility REGIDESCO through the restructuring of the Energy Rehabilitation project and a Water Supply project (FY98), …(d) pursuing studies of cost efficient and environmentally sound alternative energy sources.

Dem. Rep. of Congo Transitional Support Strategy Report no. 22499-ZR, July 9, 2001

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Egypt CAS 22163-EGT, June 5, 2001 Given the important involvement of other development partners, the Bank

will have minimal involvement in energy, industrial restructuring and environment.

Working closely with other development partners, the Bank Group will focus on three interventions (i) interventions that support higher and sustained growth; (ii) targeted interventions for poverty reduction; and (iii) interventions with major indirect poverty reduction impact.

Interventions that support higher and sustained growth: This entails providing support for … improved infrastructure for greater competitiveness.

IFC will focus on (i) developing private sector financed infrastructure. Egypt has already made headway in attracting private investment in infrastructure projects, especially in the power sector (Sidi Krir, Suez and Port Said power generating plants). IFC has been involved in all the three power projects awarded to the private sector. With the Bank providing policy advice and technical assistance, IFC will identify opportunities for investments in other infrastructure sectors…

Other areas of future IFC involvement include possible participation in building pipelines to export Egypt’s large natural gas reserves to Eastern Mediterranean countries.

Since Poverty in Egypt continues to be mainly rural-based, the Bank will prepare a follow-up Natural Resource Management project that will increasingly encourage community-based development.

The Bank will continue to play a facilitating role in the Nile Basin Initiative (NBI). This initiative is led by ten riparian states of the Nile River Basin, and its goal is to develop the river in a cooperative and beneficial manner, overcoming decades of dispute.

In the Energy sector, GEF-financed activities are planned for wind, solar and thermal energy, as well as biodiversity.

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Ethiopia CAS 17009-ET, Aug. 19, 1997 ESW and policy dialogue concerning power.

The Government has agreed to the Bank’s proposal of a study tour on power and telecommunications for the Government’s consideration.

Our two biggest actions in the area of infrastructure are…Energy projects which will also support both growth and distributional objectives, as the rural electrification component will stimulate off-farm activities and broad-based growth. Per-capita electricity consumption in Ethiopia is one-half that in Mozambique and one-sixth that in Kenya; the shortage of electricity is a major impediment to industrial growth.

We expect to present a hydroelectric power project to the board in the second quarter of FY98, followed by a power distribution project early in the next fiscal year.

We will also initiate analytical work on the hydroelectric power and irrigation potential of the Nile and the opportunity cost to Ethiopia of not tapping it. This will be linked to basinwide work that we will be doing FY98 which will promote international support to a limited number of activities within the Nile River Basin Action Plan, to maximize the opportunity for riparian cooperation.

On energy, the Bank/ESMAP’s Energy Sector Assessment provides options and strategies for energy development in Ethiopia and provides and analytical base for lending. The Government recently raised tariffs and proposes to raise them again to commercially viable levels. It has also taken measures to commercialize the electric utility. On private sector investment, the Government has accepted the need in principle but it’s moving cautiously in defining the exact way in which such investment would occur. To date this has not been a pressing issue because of the limited interest shown by private investors.

Interim Support Strategy 21189 ET, Nov. 9, 2000

Engage in longer-term Bank assistance in three areas of critical importance to the Ethiopian economy—food insecurity, the spread of HIV/AIDS, and systemic weaknesses in Ethiopia's capacity to produce and deliver essential services.

A full CAS for Ethiopia will be prepared in the course of FY2002. The Government has indicated that it will seek continued IDA support for major programs of infrastructure development, particularly in the roads and power sectors, as well as for food security and agricultural development and for the effort to build national institutions and human capacity.

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Kenya CAS 18391-KY, September 2, 1998 The main focus of the country assistance strategy will be non-lending

activities that facilitate broad-based, Kenyan-led efforts to tackle economic governance problems.

Country assistance strategy will emphasize three areas: (i) public sector restructuring, (ii) public expenditure management program; and (iii) strengthening of accountability mechanisms.

Public sector restructuring … to establish the basis for performance-oriented public sector management including, among others commercialization, divestiture or closure of non-core functions, rationalizing staffing levels, aggressive and transparent privatization of major parastatal firms, establishing appropriate regulatory structures.

IFC and MIGA support CAS focus on improved economic performance. IFC’s program will focus on expanding the private sector through investment and advisory activities in three areas: privatization of parastatals in public utilities; agro business and public financial institutions, and development of capital markets; and growth of small and medium-sized enterprises.

Rwanda CAS 17478-RW, March 17, 1998 The Bank plans to focus on … (iv) support to policy and regulatory reforms

and selected infrastructure investments to promote private sector trade and investment, and improve Rwanda’s competitiveness.

Progress in policy reform in key areas for successful transition would be considered to move to the higher range of lending (for FY 00-01). The main performance areas would include…progress in improving business climate, including the establishment of a plan for privatization of key public enterprises, and rationalizing business regulation requirements.

The non-lending program aims to assist Rwanda to address transition and long-term issues, and enhance donor coordination. Consequently, the Economic and Sector Work (ESW) has a rural/agricultural emphasis: rural energy and environment study, rural economic growth, updating the NEAP, the CEM, with a strong agricultural, rural and private development focus.

CAS Progress Report 1999 The Bank plans to conduct a study to review rural energy needs, asses the

efficiency of use of woodfuels, and the impact on poverty and the environment.

For the two-year program (FY00-01), the Bank plans to focus on the following themes: (i) the revitalization of the rural economy, with the provision of the social and economic infrastructure required to improve living conditions, improve the functioning of rural markets and raise productivity; …(iii) policy and regulatory reforms to improve economic governance, promote the private sector, and build a broad-based and inclusive economic system, and selected infrastructure investments to improve Rwanda’s competitiveness and promote investments and exports.

The non-lending program will help to deepen dialogue, manage socio-economic reform process, build capacities and institutions and enhance partnerships. The proposed ESW includes…a rural energy and environment study

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Tanzania CAS 20728-TA, June 30, 2000 The focus of this CAS is on higher growth, poverty reduction and

institutional reforms to improve governance and service delivery. CAS strategic direction: adherence to macro-stability, a renewed emphasis

on rural development, improved governance and increased private sector participation in the economy

CAS proposes to focus lending and non-lending interventions in four areas of strategic importance: (i) private sector and infrastructure development, to support the Government’s objective of making private sector the engine of growth, (ii) sustainable rural development, to improve the livelihood of the majority of the poor who live in rural areas; (iii) improved social infrastructure, to improve social indicators and enhance access for the poor to essential public services; and (iv) public sector reform and institution building, to increase the effectiveness of public service delivery and improve governance.

The proposed lending program comprises (i) quick-disbursing, policy-based lending operations in support of overall and sector reforms; (ii) high priority specific investments, particularly those focused on critical infrastructure, social services and environmental protection; and (iii) institutional development operations in support of capacity building and governance efforts.

Inadequate infrastructure remains the most severe constraint to private sector development. The Bank Group will address infrastructure shortcomings, with a focus on sector policy reform and increased private participation. In the power sector, the Bank Group will assist the Government in implementing the Power Sector Restructuring Program; and it will encourage the development of domestic gas markets and generate low cost power through the Songo Songo Gas Development and Power Generation project.

The Privatization & Private Sector Development project (approved FY00) supports the Government’s privatization and banking restructuring programs, and the establishment of an institutional framework for regulation of infrastructure and utilities.

The recently approved Public Sector Reform Program is aimed at improving accountability, transparency and resource management for delivery services

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Uganda CAS 20886-UG, December 18, 2000 Weaknesses in service delivery are among the key constraints to economic

transformation and poverty reduction in Uganda. Basic services (such as electricity, roads, health care) that are critical inputs to development are inadequate. In addition, the services delivered, in particular by the public sector are of poor quality due to various governance problems and capacity constraints. Addressing these problems effectively requires interventions at the sector level (including privatization) so that sector-specific constraints can be addressed. It also requires public sector management reforms to address problems that cut across sectors. Bank group’s assistance in these areas will be provided in the context of the PEAP/PRSP pillars.

The Bank expects to continue with stand alone projects for capacity-building and infrastructure investments directly targeted to poverty alleviation and private sector development, and where institutional strengthening is required for improved service delivery. Where appropriate, as in power, these projects will also explicitly support private participation, with the bank supporting regulatory reform and institutional development and IFC providing financing and technical assistance for the private investors entering the sectors.

Bank activities in the area of private sector development, in addition to support of privatization, will be limited to ESW only, as other donors are providing capacity-building in this area.

No IDA investments will be made in Government parastatals after the Power IV project.

When appropriate, the Bank will explore the possibility of using guarantees in place of lending so as to catalyze private investments in infrastructure.

To promote economic growth and development of private sector in Uganda, the World Bank Group will support activities that focus on removing the constraints to private sector competitiveness, in particular infrastructure constraints, including inadequate and unreliable power and roads. The Bank Group will also continue to support the privatization process and particularly the utility reforms. IFC will directly support foreign direct investment in telecommunications, power and other key sectors.

Lending investment: the Power IV project will aim to increase the power generation capacity and support reforms to promote private participation in the power sector in Uganda. IFC is considering financing the Bujagali Hydropower project under IFC A loan and IFC B loan, while IDA will catalyze the participation of commercial banks under an IDA partial risk guarantee. The Bujagali Hydropower project is tied to milestones in the sector reforms, including progress towards the privatization of the Uganda Electricity Board. Completion of this initiative will double the country’s power capacity and ensure that the transmission and distribution networks, both in terms of physical and institutional capacity, can deliver the power. IDA and IFC are also supporting the rural electrification effort to improve access to electricity and thereby increase the quality of life in rural areas where the bulk of Ugandans live

IDA’s recently approved Privatization and Utility Sector Reform project will support the reform of key utilities and complete the divestiture of the remaining public enterprises slated for privatization.

The Bank Group will continue to provide advisory support to the ongoing Nile Basin Initiative.

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ANNEX 5. FINANCIAL SUMMARY

Main assumptions: NBI (Government) contributions are in kind.

Implementation Period Year 1 Year 2 Year 3 Total Financing Required Project Costs Investment Costs 1.41 2.55 1.74 Recurrent Costs 0.0 0.0 0.0Total Project Costs Total Financing Financing IBRD/IDA 0.0 0.0 0.0 NBI (Governments) 0.14 0.20 0.20 NBTF 1.41 2.55 1.74Total Project Financing 1.55 2.75 1.94

Additional financing of US$7.39 million will be obtained during first two years of project activities.

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ANNEX 6: PROCUREMENTS AND DISBURSEMENT ARRANGEMENTS

A. PROCUREMENT

1. Procurement Arrangements

The SVP Regional Power Trade (RPT) project is a stand-alone project that is financed primarily through the Bank-administered Nile Basin Trust Fund (NBTF) in the amount of US$13.1 million with a first funding phase totaling US$5.71 million and a second funding phase totaling US$7.39 million. Costs shown herein are for the US$5.71 million to be expended under the first funding phase. The project will be executed on behalf of the Nile riparian countries by the Nile Basin Initiative (NBI).

Procurement of works and goods financed through the NBTF will follow the World Bank’s “Guidelines for Procurement under IBRD Loans and IDA Credits” dated May 2004. Procurement of Services financed by the NBTF will follow the World Bank’s “Guidelines for Selection and Employment of Consultants by World Bank Borrowers” dated May 2004. The Bank’s latest editions of Standard Bidding Documents and Request for Proposals will be used.

The Nile Council of Ministers (Nile-COM) decided to select United Nations Office for project Services (UNOPS) as project services agency after serious consultations among themselves, taking full cognizance of the shift from the traditional client–consultant contractual relationship to that of a partnership relation to maintain and enhance dialogue between the Nile riparian and to further the project’s developmental objectives. NILE-COM further recognized the fact that this approach would open the participation of all eligible consulting firms in the various consulting opportunities under the proposed project. The recommendation from Nile-COM was given no-objection by the Bank with the approval of the Bank’s Operations Procurement Review Committee (OPRC).22

All procurement will therefore be undertaken by the UNOPS, on behalf of the NBI. While the specific arrangements will be further detailed in the Management Services Agreement (MSA) negotiated between the NBI and UNOPS, it is anticipated that UNOPS will outpost a senior staff to the NBI at the Nile Secretariat in Entebbe. This senior staff will support the operations of the project management unit (PMU), located in Dar es Salaam, and will draw on UNOPS services (procurement, finance, logistics, etc.). Overall management from the UNOPS side will be from UNOPS/New York.

2. Advertising of Procurement Opportunities

A General Procurement Notice (GPN) was published in the UN Development Business (UNDB) on-line and print version in July 2003 after the regional review. The executive director of the Nile Secretariat, the NBI's administrative body, was listed as the contact. The executive director has been advised of the need for NBI to collect and file all inquiries that are received in response to the GPN. NBI will in turn pass these to UNOPS for action once UNOPS has been appointed under the MSA.

The RPT project as anticipated will not have any major ICB contract for goods. When the project is appraised, and only when required, Specific Procurement Notices (SPN) for goods to be

22 The Shared Vision Program Master PAD (report no: 26222, April 2003) provides detailed information about the selection of UNOPS.

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procured under ICB, and Expressions of Interest for international consultant services estimated to cost the equivalent of US$200,000 or more or special services would also be published in the Development Business as well as in the regional and national press of the Nile Riparian Countries. In addition, Expressions of Interest (EOI) may be sought from prospective consultants by advertising in national newspapers of Riparian Countries or technical magazines. Assignments estimated to cost US$200,000 or less may be advertised regionally in riparian countries and the shortlist may be entirely made up of consultants from the Nile riparian countries, provided that no more than two consultants from any one riparian country are on the short list, at least three qualified firms or individuals from the Nile riparian countries are available, and foreign consultants who wish to participate are not excluded from consideration. Procurement notices for contracts below US$200,000 will be placed in the regional press in each of the Nile riparian countries.

3. Procurement Planning

An Overall Procurement Plan (OPP) for consultant services and goods, which will be part of the Project Implementation Plan (PIP) for the PMU, and a Detailed Procurement Plan (DPP) for the initial period of 12 months was prepared by NBI and made available in draft form for agreement at negotiations. The OPP includes relevant information on consulting services and goods as well as the timing of each milestone in the procurement process. Shortly after negotiations, an 18-month Procurement Plan (PP) was developed to replace the OPP and DPP and adhere to updated policies of the World Bank Guidelines for Procurement under IBRD Loans and IDA Credits, May 2004. The PP includes relevant information on consulting services and goods as well as the timing of each milestone in the procurement process. The procurement plan will be updated whenever required but at least every six months by UNOPS for the NBI, always covering the next 18 months of the project. The PIP will be made available in draft form at the appraisal and negotiations; thereafter, NBI will review and finalize the PIP with UNOPS.

4. Goods including Equipment including Vehicles (total costs US$0.22 million)23

Technical equipment and other goods costing US$80,000 and more per contract will be subject to ICB requirements. For goods contracts below US$80,000 contracts will be awarded on the basis of the Banks’ Shopping procedure, where price quotations will be obtained from at least three qualified suppliers from at least two IDA eligible countries or from comparison of quotations obtained from 3 domestic suppliers from the riparian countries.

5. Consultants’ Services, Audit Fees and Agent’s Fees (total costs US$3.96 million)24

As the majority of work undertaken in this project is capacity building and technical assistance to the Nile riparian countries, a large percentage of the expenditures will be for Consultants' Services, much of which will be based in the Nile Basin. Following the agreed upon criteria, the PMU will maintain and update a list of individual short-term consultants that will be used to establish shortlists. The shortlists will be established based on EOI received through GPNs and Specific Advertisements placed in the Development Business and/or regional newspapers, depending upon the estimated value of such assignments. Consulting firms (including NGOs) financed under the project will be selected in accordance with Bank consultant guidelines through a Quality and Cost-Based Selection (QCBS), and by using the Bank's Standard Request for

23 Includes goods, equipment and vehicles for PMU. Items that fall under shopping procedure will be reviewed when the DPP is prepared. 24 Includes all regional and national long-term consultants, including five long-term consultants staffed at PMU (project manager, finance officer, and three specialists).

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Proposals. Specialized Consultants’ Services from the Nile riparian countries, below an estimated contract value of US$50,000 equivalent, will be selected on the basis qualification from a predetermined roster of consultants. Training and seminars under the project will be implemented according to an annual training & seminar plan that the PMU will prepare and submit to the Bank for no-objection before implementation. More specifically, the following selection procedures would be used:

(a) Quality-and-Cost-based Selection: All technical assistant consulting service of contracts valued at more than US$200,000 equivalent would be awarded through the Quality and Cost Based Selection (QCBS) method. QCBS can also be used for all contracts awarded to consulting firms and academic institution between US$50,000 and US$200,000 equivalent. To ensure that priority is given to the identification of suitable and qualified Regional consulting firms, short-lists for QCBS contracts estimated at or less than US$200,000 equivalent may be comprised entirely of national consultants from the Nile Riparian countries, with no more than two firms on the short-list from any one riparian country, provided that a sufficient number of qualified individual or firms (at least three) are available. However, if foreign firms have expressed interest, they would not be excluded from consideration.

(b) Consultant’s Qualification Selection (CQ) may be used for consults’ services contracts below an estimated contract amount of US$50,000 equivalent, for training, research, and targeted interventions for which organizations with specialized expertise, strong capacities to work with multinational groups and proven track records would be recruited. CQ may also be used for the selection of training institutions for contracts to provide training services that are estimated to cost up to US$200,000 equivalent per contract.

(c) Individual Consultants (IC). Consultants for services meeting the requirements of Section V of the Consultant Guidelines will be selected under the provisions for the Selection of Individual Consultants method. Individual Consultants (IC) will be selected through comparison of curriculum vitae against job description requirements of those expressing interest in the assignment, or those having been identified directly by the PMU. Civil servants from the riparian countries cannot be hired as consultants under the project. This applies regardless of their being on leave or on secondment.

(d) Least cost selection (LCS) may be used for contracts below an estimated contract amount of US$50,000 equivalent, for which well established practices and standards exist such as accounting audits and mid-term evaluations.

Project Services Agency

UNOPS has been selected on sole-source basis (in accordance with provisions of paras. 3.9 through 3.13 of the Consultant Guidelines) as PSA for Financial and Procurement management services for the entire Shared Vision Program by the Nile Council of Ministers (Nile-COM) with Bank’s prior agreement. The above-mentioned Consultant’s expenses include pro-rata shared cost for project services agency fees of US $0.56 million.

The details on the consultants’ services and the proposed selection arrangements are shown in Tables A1 and A2.

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6. Training, Workshops, and Seminars (Total Costs US$1.07 million)

The specific training, workshops and conference, and study tours will be carried out on the basis of discussed and approved annual programs for each riparian country that will identify the general framework of training and related activities for the year, including the nature of training, workshops and seminars, the number of participants, and the detail cost estimates. For national training and workshops, preference will be given to consultants (organizers) from the country in which the training is being organized, provided that a sufficient number of qualified individuals or firms (at least three) are available. For regional training, preference will be given to consultants from the Nile riparian countries, provided that no more than two consultants from any one riparian are short-listed and a sufficient number of qualified individuals or firms (at least three) are available. Foreign consultants who wish to participate will not be excluded from consideration.

The regional and technical nature of this project could result in the possibility that a number of research activities may be best undertaken by existing State-owned academic and research institutions in the Nile riparian countries. In that case, the PMU has to submit case by case basis for the clearance of the Bank. The selection should be based on both quality and costs.

7. Operational and Administrative Expenses (Total Costs US$0.46 million)25

The project will establish a regional PMU in Dar es Salaam, Tanzania. Operational costs, such as travel, related to the RPT, local administrative staff, utilities, fuel, and office supplies, etc., will be purchased following standard UNOPS procedures.

Project costs by procurement arrangement are shown in Table A.

Table A: Project Costs by Procurement Arrangement (US$ equivalent, million)

Procurement Methodsa t

Expenditure Category ICB NCB Otherb NBF Total Cost

1. Works 0.00 0.00 0.00 0.00 0.00 (0.00) (0.00) (0.00) (0.00) (0.00) 2. Goods 0.10 0.00 0.12 0.00 0.22 (0.10) (0.00) (0.12) (0.00) (0.22) 3. Services 0.00 0.00 3.96 0.00 3.96 (0.00) (0.00) (3.96) (0.00) (3.96) 4. Training and workshops 0.00 0.00 1.07 0.00 1.07 (0.00) (0.00) (1.07) (0.00) (1.07) 5. Operational expenses 0.00 0.00 0.46 0.00 0.46 (0.00) (0.00) (0.46) (0.00) (0.46) Total 0.10 0.00 5.61 0.00 5.71 (0.10) (0.00) (5.61) (0.00) (5.71) NBF—Not Bank-financed. a. Figures in parenthesis are the amounts to be financed by the Bank Grant. All costs include contingencies.

25 The project will establish and staff a regional PMU in Dar es Salaam, Tanzania. The PMU will be headed by a project manager, who is professional, and staffed by a finance officer, two lead specialists, and one environmental specialist. These professionals will be recruited on a regional basis by UNOPS as long0term consultants (para 5).

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b. Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units. Table A1: Consultant Selection Arrangement (optional) (US$ equivalent million)

Selection Method Consultant Services Expenditure Category

QCBS QBS SFB LCS CQ Others N.B.F

Total Costs

A. Firm 1.78 0.14 0.7 0.42 3.04 (1.78) (0.14) (0.7) (0.42) (3.04) B. Individuals 0.92 0.92 (0.92) (0.92) Total 3.96 (3.96) Total costs include contingencies. Figures in parenthesis are the amounts to be financed by the NBTF Grant executed by the Bank QCBS—Quality- and Cost-Based Selection QBS—Quality Based Selection SFB—Selection under fixed Budget LCS—Least-Cost Selection CQ—Selection Based on Consultants' Qualification Other—Selection of individual consultants (per Section V of Consultants Guidelines), Commercial practices. etc. N.B.F -Non Bank-Financed

9. Prior Review Thresholds (Table B)

The World Bank will conduct a prior review of the following procurement documentation:

(a) Goods and Equipment: All Contracts above US$200,000 will be submitted for prior review.

(b) Consultants’ Services: All contracts with firms above US$200,000, will be submitted for prior review. Individual consultant contracts above US$50,000 will all be subject to prior review. Terms of Reference will be written by the appropriate NBI/PMU (in many cases by the Subject Matter Specialists) and UNOPS shall be responsible for review of all Terms of Reference. To streamline project operations, the Bank will not review the Terms of Reference for any contract with the exception of:

─ Training needs assessment and program development ─ Study on hydropower coordination and best practices ─ Study to review regulatory frameworks for power trade ─ Study to review PPP models for financing hydropower ─ Study to review EIA regimes ─ Preparatory study for the Comprehensive Basin-wide study ─ Comprehensive Basin-wide study ─ Other studies above US$200,000 equivalent

(c) Operational expenses: All individual long term contracts (greater than six months) for professional project staff will be subject to prior review.

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The contracts that would not be subject to prior review would be subject to ex-post review.

Table B: Thresholds for Procurement Methods and Prior Review

Expenditure Category Contract Value Threshold

(US$ thousand)

Procurement Method Contracts Subject to Prior Review

1. Works 2. Goods >80

<80

ICB Shopping

All Post review

3. Services—Firms >200 100 - 200 <50

QCBS LCS CQ

Each first contract (each type) Post review

4. Services—Individuals >50 CQ All All professionals and project long-term staff (>6 months)

Total value of contracts subject to prior review

approximately US$2 million

9. Overall Procurement Risk Assessment (Average)

Frequency of procurement supervision missions proposed: At least once every 12 months along with the project review mission or independent mission (includes special procurement supervision for post-review/audits). The ex-post review would cover at least 15 percent of the contracts awarded during the transpired period of project in between missions.

First Year Procurement: Under the proposed implementation schedule first year procurement is envisaged to include: limited special international and regional consultancy services; the procurement of most office and IT equipment including vehicle; and, and the selection and appointment of PMU core long-term consultant staff. All procurement will be made through UNOPS.

10. Procurement Processing

All procurement packages will be prepared either by UNOPS directly or by the Procurement Specialist at the PMU. All procurement will be carried out in accordance with the procurement plan and packaging and as agreed with the Bank. The PMU/UNOPS will forward the procurement packages and schedule, to the NBI for endorsement and for onward forwarding to the Bank for prior review and 'no objection', as required. Detailed Terms of Reference for the project Services Agency have been elaborated in main PAD and the project PIP; while summary is provided below.

B. DISBURSEMENT

Management Services Agreement and Blanket Application for Withdrawal

Following the signing of the Grant Agreement with the NBI, will establish a Management Services Agreement (MSA) between the NBI and UNOPS. After the effective date of the Grant Agreement, the NBI will submit to the Bank a copy of the signed MSA along with a blanket

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withdrawal application covering the total estimated cost of the Services, such application to be copied to UNOPS. This will enable UNOPS to request for advances from the Grant proceeds for the purposes agreed in the MSA; however, disbursement will not commence until the Bank Financial Management Specialist (FMS) certifies that the accounting and financial management systems used for the purpose of the implementation of the project are operational and able to produce the agreed upon Financial Monitoring Reports (FMRs).

Table C: Disbursement Allocation of NBTF Grant Proceeds

Expenditure Category Amount (US$ million)

Financing Percentage

1. Goods 0.22 100 2. Consultants' Services 3.54 100 3. Training and Workshops 1.07 100 4. Operating Costs 0.46 100 5. Unallocated 0.42 100 Total Project Costs 5.71 *Operating costs under category 4 a. will be those disbursed under component 1.1 through the NBI special account while operating costs under category 4.b will be those for all other components through the UNOPS deposit account (see paragraph below). Initial request for advance. Upon receipt by UNOPS of a notice from the Bank that the Withdrawal Application has been received in good order and accepted, UNOPS will submit a request to the Bank, with copy to the NBI, for an initial advance necessary to cover project expenditures for the first six months of the project life. This request will be supported by the first set of FMRs. The estimate of funds required will be consistent with the initial work plan as reflected in the project Implementation Plan, which will have been agreed between the NBI and the Bank. UNOPS will start making obligations against the project budget when the initial advance is received.

Quarterly replenishment requests. Replenishment of the project account will be on quarterly basis. UNOPS will submit quarterly replenishment requests of each calendar year to the Bank with copies to the NBI reflecting expenditures paid during the previous three months and an estimate of expenditures for the ensuing six months. These quarterly requests will be in the agreed FMR format, which will include the following for disbursement purposes:

• An introductory Narrative discussing developments and progress • Project Account activity statement • Financial Reports:

─ Sources and uses of funds (period and cumulative) ─ Use of funds by project component (budgeted, actual period, and cumulative)

• Physical Progress Report (narrative may complement or substitute tabular information): ─ Linking of financial information with output indicators or status of activities ─ Outcome indicators

• For contracts above the prior review threshold: ─ The contractor or consultant’s name, nationality, and post code ─ The amount disbursed under each contract

• For contracts below the prior review threshold:

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─ Aggregate disbursements by country of supply ─ Breakdown of aggregate disbursements by percentage and legal category

• Forecast of expenditures for the next two FMR reporting periods (two quarters)

As part of each replenishment request, and in order to reconcile the advance amounts previously made, UNOPS will submit cash-flow projections (estimate of disbursements for project expenditures for the ensuing six months, less unspent balance of previous advances and interest earned).

Deposit Account. Advances from the Grants’ accounts will be deposited into UNOPS US dollar denominated bank account with the JP Morgan Chase Bank, New York. UNOPS will maintain ledger accounts for the NBTF funding of the project.

Bank guidelines. Advances to UNOPS from the Grants’ Accounts will be managed by UNOPS in accordance with Bank Guidelines as set forth in the MSA between UNOPS and the NBI and the Disbursement Letters to be issued by the Bank.

C. FINANCIAL MANAGEMENT For financial management of the program, the services of UNOPS would be retained by NBI under the MSA (See disbursement section)

Bank staff has visited UNOPS and interviewed its management and staff and is satisfied with the capacity and systems in place and procedures and practices for project management services. With regard to the assignment and required business standards, as part of documentation for the negotiations of the MSA, UNOPS will produce a statement of capability, describing its capacity and the salient features of the systems it maintains, and demonstrating its ability to perform at the highest standards all responsibilities conferred to it through the agreement. Furthermore, along with the proposal, financial management manuals and a copy of the FMRs will be submitted to the Bank for review.

Prior to project effectiveness the following two actions will take place: (1) in order to ensure the strengthening of FMS systems and procedures at NBI Secretariat and PMU for long-term sustainability, UNOPS and NBI will develop a time-bound action plan to be implemented during the course of the project; and (2) the Bank project team will further review, if warranted, the systems operated by UNOPS and will satisfy itself that those are operational and able to produce the agreed on FMRs.

Financial Monitoring Reports. UNOPS will report on the financial progress of the project using the quarterly FMR and the Bank will reimburse UNOPS for project expenses based on those FMRs, the content of which has been discussed between the Bank, NBI, and UNOPS. The FMR and any supporting documentation must be provided to the NBI, with a copy to the World Bank. The FMR format will be customized in a format to be agreed between the Bank, the NBI and UNOPS, adapted to the specific needs of the project. The FMR will be submitted on a quarterly basis by the by the UNOPS Finance Section and is forwarded directly by the UNOPS Finance Section to the Bank.

UNOPS will be responsible for preparing quarterly and annual budgets and Project Monitoring Reports, including FMRs, and the annual consolidated financial statements to be submitted to NBI and the World Bank. All documentation relating to financial transactions, procurement, contracts and invoices will be retained and made available to supervision missions and auditors.

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Audit Reports. As UNOPS will be acting as the NBI’s agent, an annual audit of the Grant will be conducted by the UNDP Division for Audit and Management Review and/or by auditors or audit firms contracted by it for this purpose in accordance with established practice in similar arrangements involving UN agencies acting as project service providers under Bank financed projects.

Flow of funds. Upon receipt of the Blanket Withdrawal Application from NBI and the subsequent request for project advance from UNOPS, the Bank shall deposit the requested project advance to a Deposit Account (see below) - funds will be advanced to the project because of the time that it will take UNOPS to collect documentation and confirm accountability of funds disbursed by the PMU in the recipient countries. Thereafter, the Bank shall reimburse UNOPS for project expenses based on the quarterly FMRs and Payment Request. UNOPS in turn, based on agreed work plans and acting on behalf of the NBI, will be responsible for contracting goods and services to achieve the project objectives. Major expenses (salaries, ICB Contracts, QCB Contracts, etc.) shall be paid directly by UNOPS. In order to facilitate smooth project operations and cover minor expenses, UNOPS will open imprest accounts for the PMU. UNOPS will bear full responsibility and all business risks associated with those accounts.

Deposit Account. UNOPS maintains a bank account at the JP Morgan Chase Bank to receive funds, including funds for NBI projects from UNDP and the World Bank - this account is maintained in United States dollars. Therefore, UNOPS will be required to maintain a separate ledger account for the various funding streams for the project (NBTF/World Bank and other grant). It should be noted that UNOPS only serves as the project management agency, which means that it is not the owner of any funds by mandate. Rather UNOPS is the custodian of the funds on behalf of the NBI.

Management Fee. The level of the fee, which will be paid to UNOPS, has been agreed between UNOPS and the NBI as about 8 percent in the estimate. The estimated fee is based on the expected workload and the level of services to be provided. The fee will be requested as part of the Quarterly Payment Requests based on actual expenditures. The estimated categories of the NBTF grant allocation, according to the designed project is reflected in the following section.

Allocation of NBTF Proceeds

The allocation of the Grants’ proceeds is shown in tables C above. The project will be implemented over a period of four years. The anticipated starting, completion and closing dates are as indicated in the inner page of the PAD. Disbursements will be against the four main expenditure categories: Consultants’ Services including audit and legal; Training and Workshop; Goods, Vehicles Equipment and Material; and Administration, Operating and Maintenance Costs.

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ANNEX 7: PROJECT PROCESSING SCHEDULE

Nile Team Working on the Regional Power Trade Project

Mangesh Hoshote Senior Power Sector Specialist TTL Barbara Miller Senior Water Resources Specialist TTL Alexandra Planas Consultant AFTEG AFTNL J.B. Collier Operations Officer

Nile Team Advisers

Disbursement Modupe A. Adebowale Sr. Financial Management Specialist, LOAG2 Financial management Iraj Talahi Lead Financial Management Specialist,

AFTFM Legal Hassane Cisse Sr. Counsel, LEGAF Procurement Rogati Kayani Lead Procurement Specialist, AFTPC V.S. Krishnakumar Lead Procurement Specialist, AFTPC Tesfaalem G. Iyesus Sr. Procurement Specialist, AFTPC Resource management Pauline McPherson Resource Management Officer, AFTRM Quality adviser Willem Zijp Operations Adviser, AFTOS Safeguards Serigne Omar Fye Sr. Environmental Specialist, ASPEN Astrid Hillers Water and Environmental Specialist, AFTES

Project Processing Schedule

Activity Date

Preappraisal mission April 2002, February 2003 Decision meeting May 12, 2003 Pre-/appraisal May 22-23, 2003 Appraisal December 2003 Negotiations January 2003 Effectiveness April 2004

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ANNEX 8: DOCUMENTS IN THE PROJECT FILE

Bank SVP Project Appraisal Documents

• World Bank (October 2002). Project Appraisal Document, Nile Transboundary Environmental Action Project, P070073

• World Bank (April 2003). Master Project Appraisal Document, the Nile Basin Initiative Shared Vision Program.

Subsidiary Action Program Documents

The subsidiary action program documents for the Eastern Nile and the Nile Equatorial Lakes subregions were prepared under the guidance of the Eastern Nile Council of Ministers and the Nile Equatorial Lakes Council of Ministers respectively.

• Nile Basin Initiative (May 2001). Eastern Nile Subsidiary Action Program Project Identification Document*

• Nile Basin Initiative (May 2001). Nile Equatorial Lakes Subsidiary Action Program Project Identification Document*

SVP Regional Power Trade Project Documents

• Nile Basin Initiative (May 2001). Nile Basin Regional Power Trade Project Document*

• Regional Power Trade Report—Norconsult/Statnett (September 2000). Opportunities for Power Trade in the Nile Basin, Final Scoping Study,* including the following country data reports:

─ Draft Data Report, Burundi ─ Draft Data Report, Democratic Republic of Congo ─ Draft Data Report Egypt ─ Draft Data Report Eritrea ─ Draft Data Report Ethiopia ─ Draft Data Report Kenya ─ Draft Data Report Rwanda ─ Draft Data Report Sudan ─ Draft Data Report Tanzania ─ Draft Data Report Uganda.

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ANNEX 9: OVERVIEW DESCRIPTION OF THE NILE BASIN INITIATIVE

THE NILE BASIN The River Nile. The Nile is one of the world’s great rivers. For millennia, this unique waterway has nourished varied livelihoods, an array of ecosystems, and a rich diversity of cultures. As the world’s longest river, it traverses nearly 6,700 kilometers, covering more than 35 degrees of latitude and draining an area of over 3 million square kilometers—one tenth of Africa’s total land mass. It is a basin of varied landscapes, with high mountains, tropical forests, woodlands, lakes, savannas, wetlands, arid lands, and deserts, culminating in an enormous delta on the Mediterranean Sea. It is generally agreed that the Nile has several sources. The principle streams are the White Nile, which begins in the Great Lakes region of Central Africa; and the Blue Nile (Abbay) and the Atbara (Tekeze), both flowing from the highlands of Ethiopia. The most distant source is the Kagera River, which winds its way through Burundi, Rwanda, Tanzania, and Uganda into Lake Victoria.

A transboundary resource. The Nile River is shared by 10 countries: Burundi, Democratic Republic of Congo, Egypt, Eritrea, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, and Uganda. It is home to world-class environmental assets, such as Lake Victoria (the second-largest fresh water body by area in the world) and the vast wetlands of the Sudd. It also serves as home to an estimated 160 million people within the boundaries of the basin, while about twice that number—roughly 300 million—live in the 10 countries that share and depend on Nile waters.

Challenges and opportunities. Despite the extraordinary natural endowments and rich cultural history of the Nile Basin, its people face considerable challenges. Today, the basin is characterized by poverty, instability, rapid population growth, and environmental degradation. Four of the Nile riparian countries are among the world’s 10 poorest, with per capita incomes of US$100–200 per year. Population is expected to double within the next 25 years, placing additional strain on scarce water and other natural resources. Only one other river basin (the Danube) is shared by more countries than the Nile, and the transboundary nature of the river poses complex challenges. Yet the Nile holds significant opportunities for “win-win” development that could enhance food production, energy availability, transportation, industrial development, environmental conservation, and other related development activities in the region. Cooperative water resources management can also serve as a catalyst for greater regional integration, both economic and political, with potential benefits possibly far exceeding those derived from the river itself.

Evolving cooperation. Appreciating the benefits of cooperation, various subgroups within the Nile Basin have engaged in cooperative activities over the past 30 years. One of the early regional projects in the Nile Basin was Hydromet, which was launched in 1967, with the support of the United Nations Development Programme (UNDP), to foster the joint collection of hydrometeorologic data. Hydromet operated until 1992. In 1993, the Technical Cooperation Committee for the Promotion of the Development and Environmental Protection of the Nile Basin (TECCONILE) was formed in an effort to focus on a development agenda. Also in 1993, the first in a series of 10 Nile 2002 Conferences, supported by the Canadian International Development Agency (CIDA), was launched to provide an informal mechanism for riparian dialogue and the exchange of views between countries, as well as with the international community. Within the framework of the TECCONILE, a Nile River Basin action plan was prepared in 1995 with support from CIDA. In 1997, the World Bank agreed to a request by the Council of Ministers of Water Affairs of the Nile Basin states (the Nile Council of Ministers, or

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Nile-COM) to lead and coordinate donor support for their activities. Thus, the World Bank, UNDP, and CIDA began operating in concert as “cooperating partners” to facilitate dialogue and cooperation among the riparians, creating a climate of confidence within which an inclusive mechanism for working together could be established.

New era of regional cooperation

Towards a long-term legal and institutional framework. Aware that sustained Nile cooperation requires a development focus, a permanent institution, and agreement on core legal principles, the Nile riparians established a forum for a process of legal and institutional dialogue in 1997, with UNDP support. With three-person teams from each country (typically senior government lawyers and water resource specialists) a panel of experts produced the draft text of the Cooperative Framework in early 2000. This encompasses general principles, rights and obligations, and institutional structure. The draft framework has moved the riparians a long way and important compromises have been reached. However, some key issues remain to be resolved, and the Council of Ministers agreed in August 2000 to extend the dialogue process to seek further agreement on the outstanding issues. UNDP has pledged its continued support to the process, which by its nature requires time and effort.

Establishment of the Nile Basin Initiative. In 1998, recognizing that cooperative development holds the greatest prospects of bringing mutual benefits to the region, all riparians, except Eritrea,26 joined in a dialogue to create a regional partnership to facilitate the common pursuit of sustainable development and management of Nile waters. In an historic step, they jointly established an inclusive transitional mechanism for cooperation until a permanent cooperative framework is established. The transitional mechanism was officially launched in February 1999 in Dar es Salaam by the Nile Council of Ministers. In May 1999, the overall process was officially named the Nile Basin Initiative (NBI).

Developing a shared vision and objectives. Following extensive consultations, the Nile Council of Ministers, at its Extraordinary Meeting in February 1999, adopted a shared vision and policy guidelines for the NBI27 (see Annex 1). The shared vision is:

To achieve sustainable socioeconomic development through the equitable utilization of, and benefit from, the common Nile Basin water resources.

The policy guidelines, which provide a basinwide framework for moving forward with cooperative action, set forth the primary objectives of the NBI:

• Develop the water resources of the Nile Basin in a sustainable and equitable way to ensure prosperity, security, and peace for all its peoples

• Ensure efficient water management and the optimal use of the resources

• Ensure cooperation and joint action between the riparian countries, seeking win-win gains

• Target poverty eradication and promote economic integration

• Ensure that the program results in a move from planning to action. 26 Eritrea attended its first Council of Ministers meeting in August 2000. It is participating in the Nile Basin Initiative in an observer capacity and has stated its intention to participate fully soon. 27 Policy Guidelines for the Nile River Basin Strategic Action Program, Council of Ministers of Water Affairs of the Nile Basin States, February 1999.

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Pursuing cooperative development. The initiative provides a unique forum for the countries of the Nile to move toward a cooperative process to realize tangible benefits in the basin and build a solid foundation of trust and confidence. The Nile Council of Ministers serves as the highest decision-making body of the NBI. Chairmanship of the Nile Council of Ministers is rotated annually. The Nile Council of Ministers is supported by the Nile Technical Advisory Committee, which is composed of two senior officials from each member country. The NBI maintains a secretariat (sometimes referred to as the Nile-SEC) in Entebbe, Uganda. The NBI Secretariat began operations in June 1999 and was officially launched on September 3, 1999.

NBI Strategic Action Program

From vision to action. To translate the shared vision into action, the riparians are developing the Strategic Action Program, which focuses on two complementary ideas—a shared vision and action on the ground (see Figure 1). The ideas are mutually reinforcing. A common vision provides a framework for activities on the ground, and, in turn, these activities realize the vision. These ideas are being translated into actions through two complementary programs: (i) the basinwide Shared Vision Program to create an enabling environment for cooperative action by building trust and skill, and (ii) subsidiary action programs to plan and implement investments and activities on the ground at the lowest appropriate level, taking into account the benefits from, and impacts of, these activities in all riparian countries.

SHARED VISION

ACTION ON THE GROUND

SharedVision

Program

SubsidiaryAction

Programs

Figure 1. Strategic Action Program

Shared Vision Program. The primary purpose of the Shared Vision Program (SVP) is to create an enabling environment for cooperative management and development in the Nile Basin through a limited but effective set of basinwide activities and projects. The SVP project portfolio includes the seven thematic projects listed below and summarized in Table 1. These projects address the major water-related sectors and crosscutting themes deemed critical by the Nile riparians to ensure an integrated and comprehensive approach to water resources development and management. The projects may also serve as catalysts for broader socioeconomic development. An eighth “project,” the SVP Coordination project, will strengthen the capacity of the NBI institutions to execute and coordinate cooperative, basinwide projects.

• Nile Transboundary Environmental Action • Nile Basin Regional Power Trade • Efficient Water Use for Agricultural Production • Water Resources Planning and Management • Confidence Building and Stakeholder Involvement • Applied Training • Socioeconomic Development and Benefit Sharing.

Although each project is different in focus and scope, they build upon each other to form a coordinated program. All SVP projects contribute to building a strong foundation for regional cooperation by supporting basinwide engagement and dialogue, developing common strategic and analytical frameworks, building practical tools and demonstrations, and strengthening human

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and institutional capacity. Together, the projects of the Shared Vision Program seek to lay the foundations for the shared vision for—as well as build the capacity to achieve—the sustainable development of the River Nile for the benefit of all.

Table 1. Overview of SVP Project Portfolio

Function Project Objectives Indicative Cost*

(US$ million)

Nile Transboundary Environmental Action

Provide a strategic framework for environmentally sustainable development of the Nile River Basin. Support basinwide environmental action linked to transboundary issues in the context of the Nile Basin Initiative Strategic Action Program.

39

Nile Basin Regional Power Trade

Establish the institutional means to coordinate the development of regional power markets among the Nile Basin countries

13

Efficient Water Use for Agricultural Production

Provide a sound conceptual and practical basis to increase availability and efficient use of water for agricultural production

5

Water Resources Planning and Management

Enhance the analytical capacity for basinwide perspective to support the development, management, and protection of Nile Basin waters

28

Creating an enabling environment for cooperative development Basinwide engagement and dialogue

Common strategic and analytical frameworks

Practical tools and demonstrations

Institutional and human capacity building

Confidence Building and Stakeholder Involvement

Develop confidence in regional cooperation under the NBI, both at basin and local levels, and ensure full stakeholder involvement in the NBI and its projects.

15

Applied Training Strengthen capacity in selected subject areas of water resources planning and management in public and private sectors and community groups. Strengthen centers with capacity to develop and deliver programs on a continuing basis. Expand the frequency and scope of basin interchange among water professionals.

20

Socioeconomic Development and Benefit Sharing

Strengthen Nile River basinwide socioeconomic cooperation and integration.

11

Total 131 *Estimated project costs to be finalized during the appraisal process for each project. Estimated costs shown are based on preappraisals as of September 2002 and do not include counterpart contributions.

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The detailed preparation of the Shared Vision Program was accomplished through a unique, multicountry, multisectoral, and participatory process led by the Nile Council of Ministers and NBI Technical Advisory Committee and executed by the NBI Secretariat. More than 70 national experts, including eight technical specialists from each of the nine countries, were involved in detailed project preparation. For many, it was the first time that they have discussed common concerns and potential opportunities with their colleagues from neighboring and co-riparian countries. The creative energy and hope for the future engendered by this preparation process were a visible demonstration of the strong ownership by the Nile riparian countries and their commitment to jointly pursue their common goal.

The objective of the eighth SVP project, referred to as the SVP Coordination project and located at the NBI Secretariat, is to strengthen the capacity of the NBI institutions to execute basinwide programs and to ensure the effective oversight and coordination of the NBI’s Shared Vision Program.

The Shared Vision Program and project documents for each of the seven projects were approved by the Nile Council of Ministers at its Extraordinary Meeting held in Khartoum, Sudan, in March 2001 and presented to the international community to raise support for implementation in June 2001. The SVP projects are currently undergoing detailed implementation planning, with project startup to occur in a phased manner beginning in early 2003.

Subsidiary action programs. In parallel to the Shared Vision Program, groups of countries have initiated subsidiary action programs to cooperatively identify and implement investment projects that confer mutual benefits. The objective of these programs is to translate the Shared Vision into action, realizing transboundary development opportunities within the agreed basinwide framework. Potential types of projects identified by the riparians28 for bundling into subsidiary action programs are summarized in Table 2.

Table 2. Types of Projects for Consideration in Subsidiary Action Programs

I. Generic Water Resources Management Project Possibilities

II. Other Related Joint Development Project Possibilities

Water supply and sanitation Infrastructure

28 Policy Guidelines for the Nile River Basin Strategic Action Program, Council of Ministers of Water Affairs of the Nile Basin States, February 1999.

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Irrigation and drainage development Fisheries development Hydropower development and pooling Watershed management Sustainable management of wetlands and

biodiversity conservation

Sustainable management of lakes and linked wetland systems

River regulation

Flood management Desertification control Water hyacinth and weeds control Pollution control and water quality

management Water use efficiency improvements.

Regional energy networks, including power interconnection and gas pipelines

Telecommunication development Regional transport, including: railway and

road networks; river and marine navigation; and aviation

Trade and Industry Promotion of trade (including border trade) Industrial development Regional tourism development Promotion of private investment and joint

ventures Marketing and storage of agricultural

products Forest crop harvesting

Health, environment, other Malaria and other endemic diseases control Protection of wildlife Environmental management Disaster forecasting and management

The Nile riparians have formed two subsidiary action programs—one in the Eastern Nile region and the other in the Nile Equatorial Lakes region (see below). Based on wide consultation at the political and technical levels, both programs have developed a strategic approach to cooperative management and development at the sub-basin level, as well as a list of priorities and criteria for projects. Both subsidiary action programs have identified the first set of cooperative projects to be prepared, and project identification documents for donor consideration were made available in early June 2001. Initial support for project preparation activities and the implementation of fast-track projects was raised in June 2001 at a meeting of the international community held in June 2001 in Geneva, Switzerland (section 2 of this annex has more information about this meeting). Over the next few years, preparatory activities will include detailed social, environmental, and economic analyses; prefeasibility and feasibility studies; and other design-related activities. Selected preparatory activities have begun in each of the subsidiary action programs.

Eastern Nile Subsidiary Action Program. The Eastern Nile Subsidiary Action Program (ENSAP) currently includes Egypt, Ethiopia, and Sudan.29 As set out in a jointly developed strategy adopted by the Eastern Nile Council of Ministers, the primary objectives of ENSAP are to: ensure efficient water management and optimal use of resources through equitable utilization and causing no significant harm; ensure cooperation and joint action between the Eastern Nile countries seeking win-win gains; target poverty eradication and promote economic integration; and ensure that ENSAP results in a move from planning to action.

Eastern Nile riparians recognize that potential investments need to be assessed within a regional context and that benefits of a win-win nature are most likely to be found in the bundling of projects within a multipurpose context. Consequently, consensus was reached that the objective of a first ENSAP project, referred to as the Integrated Development of the Eastern Nile (IDEN) Project, will be to “initiate a regional, integrated, multipurpose development project through a

29 Eritrea, which is in the Eastern Nile region, participated in its first meeting of the Eastern Nile Council of Ministers as an observer in March 2001 and may join ENSAP in the future.

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first set of investments which confer tangible, win-win gains and demonstrate joint action between the Eastern Nile countries.” IDEN includes a preparation process that facilitates integration, options analysis based on best practices, and prioritization of subprojects within an overall regional, integrated framework.

IDEN, the first ENSAP project, will comprise the following seven major subprojects:

• Eastern Nile Planning Model subproject* • Baro-Akobo Multipurpose Water Resources Development subproject • Flood Preparedness and Early Warning subproject* • Ethiopia-Sudan Transmission Interconnection subproject* • Eastern Nile Power Trade Investment Program • Irrigation and Drainage subproject • Watershed Management subproject. *

Each subproject will be prepared and implemented in a phased manner, and the subprojects will be more fully defined during the preparation process. Some subproject proposals, which can clearly be identified as contributing to an integrated, regional program and are already at advanced stages of preparation, will proceed at an accelerated pace (fast-track) to final stages of appraisal. This will ensure that tangible results are realized early, fostering confidence in the process. Other subprojects will require extensive preparatory work to ensure and maximize win-win gains in a regional context. It is anticipated that additional activities may be identified during the project preparation process and prepared for appraisal or fast-tracked as appropriate. An Eastern Nile technical regional office has been established in Addis Ababa, Ethiopia, to facilitate the process of cooperative development and assist the Eastern Nile Council of Ministers and technical team in the joint and coordinated preparation of IDEN.

Nile Equatorial Lakes Region Subsidiary Action Program. The Nile Equatorial Lakes region includes the six countries in the southern portion of the Nile Basin—Burundi, Democratic Republic of Congo, Kenya, Rwanda, Tanzania and Uganda—as well as the downstream riparians Egypt and Sudan. The water resources of the Nile Equatorial Lakes region include one of the world’s great complexes of lakes, wetlands, and rivers. The region’s economies are characterized by rain-fed agriculture, subsistence farming, low industrialization, and poor infrastructure development.

The objectives of the Nile Equatorial Lakes Region Subsidiary Action Program (NELSAP), as defined by the Nile Equatorial Lakes Council of Ministers, are to contribute to the eradication of poverty, promote economic growth, and reverse environmental degradation. NELSAP is expected to be a long-term program with multiplier effects in broader economic integration as the program shows results on the ground.

Twelve NELSAP projects have been identified by the Nile Equatorial Lakes riparians in a consultative manner, targeting investments in Water Resources Management of shared-sub-basins, Hydropower Development and Transmission Interconnection, Fisheries Development and Lakes Management, Water Resources Management, Agriculture Development, and Water Hyacinth Control.

Depending on the scale and scope of the project, preparation will take between one and three years. Projects will be prepared and implemented by the countries involved and will be guided by * ENSAP subprojects identified for fast-track preparation and implementation.

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regional project steering committees or another suitable regional steering mechanism agreed upon by the participating riparian countries. A Coordination Unit, NEL-CU, has been established in Entebbe, Uganda, in December 2001 to facilitate project preparation and implementation.

The following 12 projects have been identified:

Natural Resources Management

• Enhanced Agriculture Productivity through Rainwater Harvesting, Small Scale Irrigation and Livestock Management

• Fisheries project for Lake Albert and Lake Edward

• Development of a Framework for Cooperative Management of the Water Resources of the Mara River Basin

• Kagera River Basin Integrated Water Resources Management

• Development of a Framework for Cooperative Management of the Water Resources of the Malakisi-Malaba-Sio River Basins

• Water Hyacinth Abatement in the Kagera River Basin.

Hydropower Development and Power Trade

• Rusumo Falls Hydroelectric Power Development

• Ranking and Feasibility Study of Hydroelectric Power in the NEL Region

• Interconnection between Kenya and Uganda

• Interconnection between Burundi, Democratic Republic of Congo, and Rwanda

• Interconnection between Burundi and Rwanda

• Interconnection between Rwanda and Uganda.

Detailed preparation has begun for the river basin management project in the Kagera, Mara and Sio-Malaba-Malakisi River Basins, including the establishment of two Regional project Steering Committees. Preparation steps have also been taken for the Fisheries and Lake Management project targeting Lake Albert and Lake Edward, as well as for the Power Development and Transmission Program with the upcoming launch of a Strategic/Social and Environmental Assessment (SSEA) of Power Development Options in the Nile Equatorial Lakes Region.

Riparian consultative process. The NBI facilitates riparian dialogue and cooperative action at multiple political and technical levels. The Nile Council of Ministers provides the main policy direction for Nile Basin cooperation, including the Strategic Action Program. The NBI Technical Advisory Committee, which coordinates joint activities, is responsible to the council for preparing and implementing the basinwide Shared Vision Program. While the Nile Council of Ministers and the NBI Technical Advisory Committee have promoted the identification of subsidiary action program projects at the sub-basin level, the responsibility for the subsidiary action programs rests with the involved riparians, within the overall basinwide framework. Throughout the process, high priority has been and will continue to be placed on strengthening the process of consultation in order to build trust and confidence. Figures 2 and 3 illustrate how

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country activities will take place within sub-basin frameworks, which will occur within the broader context of the basinwide framework.

The basinwide framework also includes an “international discourse” to promote broad-based discussion on the sustainable development and management of Nile waters. The international discourse, which was initiated in cooperation between the World Wildlife Fund, the World Conservation Union, and the World Bank, is now being implemented by the World Conservation Union with initial support from CIDA. The International Discourse Desk is being established in Kampala, Uganda.

Supporting an historic process

International Consortium for Cooperation on the Nile. The International Consortium for Cooperation on the Nile (ICCON) has been established to support the NBI’s Strategic Action Program. Its first meeting was held in Geneva in June 2001. The ICCON is a unique forum, envisioned as a long-term partnership of the riparian states and the international community. The first meeting of the ICCON raised funding for the portfolio of basinwide Shared Vision projects and the preparation of projects identified under the subsidiary action programs. The first ICCON meeting also celebrated cooperation and demonstrated international solidarity for cooperative development in the Nile Basin. More detailed information on ICCON is provided in Section 2.

Eastern Nile Sub-Basin(ENSAP)

Egypt

SudanEthiopia

Eritrea

Rwanda

Uganda

Kenya

Tanzania

DRC

Burundi

Nile Equatorial Lakes Sub-Basin(NELSAP)

Global (ICCON incl. International Discourse)

Nile Basin (SVP, Cooperative Framework)

Figure 2. Levels of Cooperation within the Nile Basin Initiative

Partnerships. Support for the NBI has been characterized by partnership since it began. The initial partners comprised the World Bank, UNDP, and CIDA. These initial cooperating partners have played the role of concerned facilitators, assisting the process of dialogue. As the NBI moved into the initial preparation of the Strategic Action Program, the governments of Denmark,

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Finland, Germany, Italy, the Netherlands, Norway, Sweden, the United Kingdom, and the United States, together with the United Nations Food and Agriculture Organization (FAO) and the Global Environmental Facility (GEF), supported the initiative, directly or through World Bank trust funds. With the first ICCON, the circle of partners widened as the international development community committed further support for implementation of the Shared Vision Program and for preparation of subsidiary action program projects.

Riparian ownership and commitment. The Nile Basin countries have invested significant time, effort, and resources in launching and sustaining the NBI. The initiative provides a transitional institutional mechanism for cooperation, an agreed vision and basinwide framework, and a process to facilitate substantial investment in the Nile Basin. The initiative is based on the recognition that the basin has a shared past and a shared future, and that there is an urgent need for development and for the alleviation of poverty. It represents deep commitment by the Nile riparian countries to foster cooperation and pursue jointly the sustainable development and management of Nile water resources for the benefit of all. Although various subgroups of Nile riparians have engaged in cooperative activities over the past 30 years, the Cooperative Framework and the NBI process mark the first time that all riparians have joined together in a joint dialogue and a cooperative initiative as equal members. The inclusion of all 10 Nile riparians holds the promise of meaningful, comprehensive cooperation in the basin.30

30 Eritrea is participating as an observer and has stated its intention to participate fully soon.

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Nile-COMNile-TAC

Nile-SEC

Shared Vision Program- Environment- Power Trade- Agricultural Water Use- Water Resources- Confidence Building - Applied Training- Benefit Sharing - SVP Coordination

NEL-CUNEL Coord Unit

NELSAP Program Areas- Watershed management- Sustainable mgt of lakes & wetlands- Agricultural water use- Water hyacinth control- Power development & trade

NEL-COMNEL-TAC

EN-COMENSAPT

ENTROEastern Nile Tech.

Regional Office

ENSAP IDEN Project with subprojects on:- Eastern Nile planning model- Flood preparedness & early warning- Ethiopian-Sudan transmissio- EN power trade investment program- Watershed Management- Irrigation & drainage- Baro-Akobo Multip Water Res Devlp

Basinwide LevelShared Vision

Program

Sub-basin Level Subsidiary

Action Programs

(SAPs)

Policy level(basinwide)

Projects (basinwide)

Policy level(sub-basin)

Projects (sub-basin)

Figure 3: Overview of the NBI and its Strategic Action Programs

2. INTERNATIONAL CONSORTIUM FOR COOPERATION ON THE NILE

Introduction

Mandate. Following a request by the Council of Ministers of Water Affairs of the Nile Basin states, the Bank agreed in 1997 to coordinate donor support for an action plan and to convene a consultative group meeting. This consultative group is now within the broader framework of the ICCON. In accordance with confirmation by the Nile Council of Ministers at its meeting in Khartoum, Sudan, in March 2001, the first ICCON meeting was held June 26–28, 2001, in Geneva, Switzerland. Subsequent meetings will be held when needed, probably about every two to three years

ICCON objective. ICCON is conceived as a partnership between and among the Nile riparian countries and the international community. ICCON will seek to raise and coordinate funding from bilateral, multilateral, and possibly private funding entities, in support of cooperative water resources management and development projects and other related projects in the Nile Basin. ICCON will also provide a forum for discourse that will bring together riparians and donors, and, increasingly, civil society, nongovernmental organizations (NGOs), and the private sector.

ICCON structure. The ICCON structure, which is based on discussions by the Nile Council of Ministers and input from consultations with the donor community, consists of two interrelated

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elements, one a subset of the other, working in close collaboration under the guidance of the Nile Council of Ministers. A schematic of the ICCON partnership structure is presented in Figure 4.

ICCON is a broad partnership, led by the NBI, encompassing the riparian countries of the Nile, the international donor community, public and private lenders, and investors, as well as other interested parties such as civil society, professional organizations, and NGOs, who wish to work together to support achievement of the riparians’ Shared Vision. ICCON will inform and foster a growing international dialogue on the opportunities and options for cooperative development in the Nile Basin.

ICCON Consultative Group. The ICCON Consultative Group, established at the request of the Nile Council of Ministers, is a subgroup of the ICCON. The ICCON Consultative Group is chaired and coordinated by the World Bank according to Consultative Group practice and custom, in collaboration with cooperating partners. The ICCON Consultative Group comprises those donors/lenders that are financially contributing to, or anticipating contribution to, support of the NBI. Additionally the ICCON Consultative Group includes donors providing official development assistance to individual riparian countries, to promote linkages between country development programs and the NBI. Meetings of the ICCON Consultative Group will provide the forum for building and maintaining donor commitment to, and raising funds for, NBI programs, and for detailed reporting to donors on the progress, coordination, and work plans of the NBI.

Other

ICCON International DiscourseLed by the NBI

ICCON-CGWorld Bank Chair at request of COM

NBTF Group COM & WB co-Chair

Riparians & donors contributing to the

NBTF

Riparians Donors NGOs Civil Society Academia Private Sector

Riparians & donors contributing to the NBI

Figure 4. The ICCON Partnership Structure

Funding mechanisms

The financial mechanisms proposed in support of the NBI are designed with several objectives in mind: to maximize riparian ownership and control of the process; to meet donor requirements for fiduciary accountability; and to provide timely and efficient administration of funds. Given the nascent nature of the cooperative Nile institutions, the magnitude of financial resources involved, the imperative for early implementation of projects, and following extensive consultation with potential donors, a World Bank–managed, multidonor trust fund was proposed by the Nile Council of Ministers as the preferred initial funding mechanism (although alternative funding

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mechanisms may also be used). This would allow funds to be transferred according to established disbursement and procurement procedures. An objective would be the eventual transfer of the trust fund to a Nile Basin institution as program implementation progresses and a permanent institutional framework is established.

NBTF Committee. The NBTF Committee will be responsible for overseeing the operation of the Nile Basin Trust Fund and the use of its resources to meet the objectives of the NBI programs.31 The NBTF Committee will foster both close partnership between the Nile Basin Countries, Development Partners and the World Bank, and at the same time, strong ownership of the NBI by the Nile countries. To achieve this, the NBTF Committee will be both consultative and advisory. The NBTF Committee will be co-chaired by the by the Nile Council of Ministers (or its representative) and the World Bank, and will develop its own procedures. The NBTF may be convened at the request of the World Bank; however, it is proposed that the Committee normally meet annually.

Alternative arrangements for donor financing. Some donors may be unwilling or unable to provide their support through the NBTF. In such cases, support to individual projects or to the NBI’s executive arm, the NBI Secretariat, will be arranged through mutually agreed channels, for example, bilaterally to the NBI.32 Donors whose contributions are not channeled through the NBTF would not be members of the NBTF Committee, but would be members of the ICCON Consultative Group and receive regular progress and coordination briefings in that forum. Every effort needs to be made to minimize the proliferation of alternative administrative arrangements due to different donor requirements. As preparation of the subsidiary action programs progresses, innovative financing mechanisms, beyond the NBTF, for preparation and implementation of large-scale investments will be needed.

Riparian contributions. The core costs of the Nile Council of Ministers, NBI Technical Advisory Committee, and NBI Secretariat will be supported by the Nile Basin countries through their continued payment of annual dues. Riparians will be expected to provide counterpart funds for all projects, and may also choose to contribute additional funds to the NBI Secretariat. Sponsorship of SVP PMUs, whose local costs are to be financed by the host countries, will be another avenue of riparian support to the NBI.

The first meeting of ICCON

Launching of ICCON. The first ICCON meeting was held June 26–28, 2001, in Geneva. This meeting consisted of two components. The first day, June 26, was an ICCON event hosted by the NBI and attended by more than 70 ministers and other representatives from the Nile Basin countries, as well as a broad spectrum of invited parties from the international community, including representatives from more than 35 bilateral donors, multinational financing agencies, international agencies, and the NGO community (see Table 3). This event was designed to launch the consortium, to celebrate cooperation in the Nile River Basin, and to further the discourse on Nile development. The chairman of the Nile Council of Ministers launched the meeting and was followed by an invited keynote address by James D. Wolfensohn, president of the World Bank, and statements of support from UNDP, CIDA, the European Union, GEF, and a coalition of interested NGOs. Poems and stories by children of the Nile, followed by presentations on the

31 Terms of reference for the NBTF Committee are under discussion by the Nile Council of Ministers, the Development Partners, and the World Bank. 32 The Nile Council of Ministers approved general procedures for supporting the Shared Vision Program through financing mechanisms other than the NBTF at its ninth annual meeting in Cairo in February 2002 (see Annex 14 of the SVP Master PAD).

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challenges in the basin and opportunities afforded by cooperation, underscored the importance of this initiative in launching a new, unprecedented era of cooperation on the Nile.

Table 3. Participation of the International Community at the First ICCON Meeting

Belgium

Canada

Denmark

Finland

France

Germany Italy Japan

Netherlands

Norway

Sweden

Switzerland

United Kingdom United States

Abu Dhabi Fund for Development

African Center for Technology Studies

African Development Bank

Arab Bank for Economic Development in Africa

East African Community

European Commission

Food and Agricultural Organization

Global Environmental Facility

InterAfrica Group

International Monetary Fund

Islamic Development Bank

Kuwait Fund for Arab Economic Development

Sudanese Environment Conservation Society

Third World Water Forum

Uganda Wildlife Society U.N. Economic Commission

for Africa (UNECA) UNESCO Chair in Water

Resources (UCWR) United Nations Development

Programme

World Bank

World Conservation Union

World Meteorological Organization

Consultative Group meeting. On the second and third days, June 27–28, a meeting of the ICCON Consultative Group, chaired by the World Bank in fulfillment of the request of the Nile Council of Ministers, took place. The purpose of this part of the meeting was to present the details of the NBI’s Strategic Action Program to interested donors, raise financing for the current NBI programs, and lay the foundations for financing future investments. The delegates expressed strong support for the initiative, acknowledged the leadership shown by the Nile Council of Ministers, and welcomed the contribution of NGOs. The initiative was praised as a new paradigm of regional cooperation that could address many of the challenges in the basin and serve as an example to other international waters. As a demonstration of their support of the initiative, development partners expressed initial financial support of at least US$140 million towards financing the implementation of the Shared Vision Program and preparatory activities for the subsidiary action programs. Strong support was also expressed to underwrite the first phase of the investment programs in the sub-basins, estimated at US$3 billion, when ready for funding. The donor partners committed to working with the Nile states to secure financing for this initial phase of investment, as well as for further phases.

Partner interest and post-ICCON activities

Partner interest. Ten bilateral and multilateral partner donors pledged support at ICCON to finance the implementation of the basinwide Shared Vision Program. This includes Canada, Denmark, Germany, the Netherlands, Norway, Sweden, and the United Kingdom, as well as the African Development Bank, GEF (World Bank and UNDP), and the World Bank Development Grant Facility. In addition, Italy, working with FAO as an executing agency, supports the Capacity Building for Water Resources Management project, which also operates within the NBI umbrella. It is expected that full financing will be obtained for the Shared Vision Program, although it is likely that some donors will pledge support on a rolling basis or in tranches, based upon agreed milestones and demonstrated results.

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In support of the sub-basin level investment programs, in addition to the World Bank, the African Development Bank, Canada, Finland, and the United Kingdom pledged support for ENSAP; while the African Development Bank, Canada, Norway, Sweden and the United States pledged support for the preparatory activities of NELSAP. Other donors, such as the European Union, France, Japan, Italy, and Switzerland have expressed interest in the NBI’s Strategic Action Program and may play a role in the future.

Growing partner involvement. A number of partners expressed interest in undertaking a joint SVP appraisal following the June ICCON meeting, which would include the participation of all donors contributing funds for SVP implementation. This would provide a constructive opportunity to resolve details and any outstanding implementation issues, and enable donors to pledge funds at ICCON contingent upon meeting their appraisal requirements or resolving details of project design or execution. An SVP implementation review meeting, attended by representatives from the NBI and more than 14 partners interested in the Shared Vision Program, was held in Entebbe in October 2001. Since that time, the SVP donor partners have been fully involved in the appraisal process and detailed implementation planning for each of the projects.

Similarly, donor partners have been involved with the early preparatory activities of the subsidiary action programs. A planning meeting for ENSAP was held in February 2002 attended by several donors, and the African Development Bank has undertaken identification missions for three ENSAP projects. A NELSAP implementation review meeting was held in Entebbe in September 2002. Key donor partners participated in the meeting, where they re-confirmed their support to NELSAP. Subsequently, they have remained active partners in the project preparation process.

Moving towards implementation. Since 1997, the NBI has progressed from a phase of dialogue and political engagement to a phase of preparation of the Strategic Action Program. Each phase has had unique and complex challenges. Now, since ICCON, a new phase of partnership with a broader circle of the international community has begun. There are many details regarding the implementation of the Strategic Action Program related to financing mechanisms, program management and coordination, and implementation arrangements, which have been under discussion. The Nile riparians have welcomed the active and constructive engagement with the donor community in addressing these issues in ways that have promoted strong partnership yet ensured riparian ownership and direction of the process of Nile cooperation.

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ANNEX 10: INTEGRATED SAFEGUARDS DATA SHEET

Integrated Safeguards Data Sheet

Section I—Basic Information

Date ISDS Prepared/Updated: 29 April 2003

A. Basic Project Data

I.A.1. Project Statistics

RECIPIENT: Nile Basin Initiative (Member countries: Burundi, D.R. Congo, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania, Uganda)

PROJECT ID: PO75945

PROJECT: Nile Basin Initiative/Shared Vision Program- Regional Power Trade Project

TTL: Mangesh Hoskote

APPRAISAL DATE: May 2003 TOTAL AMOUNT ($m): 13 million

BOARD DATE: N/A; SD approval September, 2003

IDA AMOUNT ($m): N/A

MANAGING UNIT: AFTU1 SECTOR: Power

LENDING INSTRUMENTS: Grant (Nile Basin Trust Fund)

STATUS: PAD

I.A.2. Project Objectives

The development objective of the Regional Power Trade project is to establish the institutional means to coordinate the development of regional power markets among the Nile Basin countries. The long-term goal of the Regional Power Trade (RPT) project is to improve access to reliable and low cost power in the Nile Basin in an environmentally sustainable manner. The creation of a regional electricity market can play a key role in fostering cooperation among the Nile Basin states and in ensuring that the resources of the Nile Basin are developed and managed in an integrated and environmentally sustainable manner.

I.A.3. Project Description

Adequate and reliable power supply is critical to meeting the social and economic development objectives of the Nile Basin countries. Yet, in a large majority of the Nile Basin countries, only around 10 percent of the population has access to electricity. This situation exists despite the presence of vast and as yet untapped hydroelectric and other energy resources in the Nile Basin. The present limited development of national power systems in the basin imposes a constraint on the exploitation of these resources at affordable costs at the national level. These constraints on supplying affordable power could mostly be overcome by expanding the market for these resources by developing power trade among Nile Basin countries.

A Scoping Study - Opportunities for Power Trade in the Nile Basin - that was reviewed and revised by the Power Trade Experts Working Group of the Shared Vision Program, identified

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several options for increasing power trade in the region. The Scoping Study found that a more focused and coordinated process for discussing ways to expand power trade in the Nile Basin would advance the development of power supply facilities. The Study recommended that this objective be realized through the creation of a basinwide “forum” of national power experts to facilitate continued dialogue in the region. As a result, a Nile Basin Power Forum will be established within the context of the Nile Basin Initiative (NBI) to support (a) formation of an institutional infrastructure for market development; (b) a learning environment for understanding the nuances of legal, regulatory, and pricing regime required for regional power trade; and (c) identification of power generation and transmission projects to be implemented at the subregional level that will benefit power trade amongst the Nile Basin countries.

The project comprises the following three main components:

Regional Coordination and Project Management.

This component will focus on the overall management arrangements for the project, including a project Steering Committee, a Technical Steering Committee, a PMU, and regional coordination across other SVP projects and the Subsidiary Action Programs. This component also includes knowledge management activities in order to provide project participants and other key stakeholders across the basin with improved access to relevant information on the activities of the RPT project. A stakeholder analysis and the preparation of a public participation plan will also be undertaken under this component.

Establishment of the Nile Basin Power Forum.

The objective of this component is to establish a Nile Basin Power Forum, define its role and long-term institutional setting, and initiate its activities. It is expected that the Power Forum will foster an enabling environment conductive to increasing power trade in the Nile Basin. This component is expected not only to enhance individual and institutional capacity to manage and develop basinwide power resources, but also to derive large but immeasurable benefits in building intra-riparian cooperation through coordinated power system operations. Furthermore, by developing and incorporating a common culture of good practices through the collaborative development of power and transmission interconnection projects, the Nile Basin riparians seek to formalize and cement the participatory process for sharing the mutual benefits that will result from regional power trade. This is the first basinwide effort to develop a regional power trading architecture that will be developed in the basin and through the active participation of and active collaboration among all countries. The preliminary objectives of the Power Forum include:

• Building necessary institutional and human capacity and establishing the necessary information support systems and tools;

• Facilitate the creation of the institutional infrastructure for power trade;

• Assisting in the development of power markets; and

• Identifying possible projects to be considered for implementation at the subsidiary level through regional studies.

This component covers activities in four main areas: long-term planning and analytical tools, training and skills enhancement, financial resource mobilization, and studies in a regional context.

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Comprehensive Basinwide study.

This component could be implemented in a sequential manner in order to take advantage of the outputs of the subregional power studies to be conducted under the subsidiary action programs, and to align with currently available funding.

This component will launch a large study in order to inform the planning of multipurpose river-basin management and identify potential projects for development within the subsidiary action programs of the NBI. In conducting this study, special working groups of non-power experts (water resource managers, environmental specialists, etc.) will be formed to ensure that power development issues are addressed in the broader context of integrated and multipurpose water resources development and management. The study will follow best practices in options analysis, including extensive stakeholder involvement and multi-criteria options assessment.

Given the complexity of the comprehensive basinwide study that has to integrate both power development and multipurpose projects’ analysis, this activity will be launched pursuant to an initial assessment study carried out under the supervision of the Regional Power Trade project, in collaboration with the Water Resources Planning and Management project.

The Comprehensive Basinwide study will collaborate and exchange information, as pertinent, with the Nile Equatorial Lakes Subsidiary Action Program (NELSAP) and the Eastern Nile Subsidiary Action Program (ENSAP) to ensure synergies between the subregional and basinwide work and to avoid duplication of effort. The study will also seek to build upon other studies being undertaken in the region, such as the EAC Masterplan.

I.A.4. Project Location: (Geographic location, information about the key environmental and social characteristics of the area and population likely to be affected, and proximity to any protected areas, or sites or critical natural habitats, or any other culturally or socially sensitive areas.)

The proposed project involves the Nile Basin Initiative countries (Burundi, D.R.Congo, Egypt, Ethiopia, Kenya, Rwanda, Sudan, Tanzania and Uganda) through capacity building activities and implementation of regional studies involving all basin countries. A regional PMU will be located in Dar es Salaam Tanzania.

B1. Check Environmental Classification A [ ], B [ }, C [X], FI [ ], TBD [ ]

Comments: There are no safeguards risks associated with the implementation of the project. The Regional Power Trade project is of a technical assistance and capacity building nature and is aimed at enhancing cooperation and raising awareness on good practices for power trade. Furthermore, the RPT project aims to raise awareness on transboundary environmental issues on the power sector. One of the studies to be financed by the project will review best practices for environmental impact assessment of power projects, and the Comprehensive Basinwide study will also seek to incorporate best practices in terms of environmental and social analysis of power development options, including extensive stakeholder consultations.

C. Safeguard Policies Triggered (from PDS)

Click on Policy name for brief summary of objectives, triggers and requirements

Click on Policy reference number for full policy

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I.C1. Table on applicability Yes No TBD

Environmental Assessment (OP/BP/GP 4.01) [ ] [X] [ ]

Forestry (OP/GP 4.36) [ ] [X] [ ]

Natural Habitats (OP/BP 4.04) [ ] [X] [ ]

Safety of Dams (OP/BP 4.37) [ ] [X] [ ]

Pest Management (OP 4.09) [ ] [X] [ ]

Involuntary Resettlement (OD 4.30) [ ] [X] [ ]

Indigenous Peoples (OD 4.20) [ ] [X] [ ]

Cultural Property (OPN 11.03) [ ] [X] [ ]

Projects in Disputed Areas (OP/BP/GP 7.60)* [ ] [X] [ ]

Projects on International Waterways (OP/BP/GP 7.50) [ ] [X] [ ]

* By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas.

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ANNEX 11. STATUS OF POWER SECTOR REFORM IN NILE BASIN COUNTRIES

Status of Power Sector Reform in Nile Basin Countries

Country Maturity of Reform Process

Regulator Established

IPPs Permitted Transmission Access

Market Characteristic

Burundi The text of the laws ruling the power and drinking water sector is to be studied by Parliament in April 2000. The Government has already expressed its willingness to open the power sector to privatization.

Not yet. Yes, very soon, after passing of the laws.

Not yet Power is still sold exclusively by REGIDESO and DGHER. These institutions distribute power to the consumers’ home.

Democratic Republic of Congo

There is still no institutional reform. Production, transmission, distribution and sales of energy is handled by the state owned company SNEL.

Egypt In progress since 1984. Several laws of deregulation introduced.

Under consideration (1997)

Yes (1996) The Power Sector still operates much as vertically integrated state company, but unbundling in progress both in generation and distribution.

Eritrea Only policy statements of will to deregulate

Corporatization and privatization of the Department of Energy being discussed

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Ethiopia In progress since 1997, and proclamation, and regulation has been issued. Directives are under preparation

Yes, operational since October 1998

Yes Yes, by proclamation

The State power utility EELPA has been corporatized and called EEPCo. Foreign and local private investors are allowed to invest in hydropower generation with out capacity limit.

Kenya The reform process in Kenya is now completed. The final step was the transfer of all public sector owned power generating assets to KenGen and all the transmission and distribution assets to KPLC.

The Electricity Regulatory Board was established through the Electric Power Act 1997 and started operating in 1998.

Operation of IPPs commenced with two PPAs signed in 1996. Two IPP plants started operating in 1997. Two more PPAs have since been signed.

There is no access as yet, although the governing legislation mentions that contracts for the transmission network services are to be approved by the Regulator.

Previous monopolies in the public sector have been reorganised into generation, transmission and distribution companies. Two IPP plants have been in operation since 1997, two PPA were signed in 1998 and another PPA is currently being negotiated.

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Rwanda Preparation of information required to support the tender process for the selection of private sector operators for the sectors Assistance during the negotiations and signing of the agreements. The preliminary report is available

Sudan Reforming is under process since late 1998. The “Electricity Act” has been prepared for Government approval.

No, awaiting “Electricity Act” approval.

Yes, since 1996 No The Power Sector still operated as State Corporation with unbundling in distribution, which is in progress. IPPs in generation are developing, even before the legal frame is approved.

Tanzania The Government has already made a decision to restructure power sector to allow for private participation

Legal and Regulatory Framework is in process

Yes Open access under an independent Transmission Systems Operator is expected.

A move toward more competitive markets in the electricity sector is in its infancy with some competition established in generation.

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Uganda A new Electricity law was enacted in November 1999

Yes Yes Yes Ring fenced business unit within the Transmission company will be responsible for bulk purchase and supply of electric power. In the longer-term, Distribution companies and large consumers will contract generation capacity directly with generators. Introduction of limited retail competition will be in the medium term.

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ANNEX 12: ANALYSIS OF REGIONAL POWER MARKETS

Regional Market Promoters

Comision de Integracion Electrica Regional. CIER was established in 1964 on the basis of a proposition approved during the First Regional Electrical Integration Congress, an initiative of the Uruguayan Electric Sector Authorities. CIER’s main objective is to promote and encourage the integration of electricity markets in South America. Current CIER members include 198 electricity companies from 10 South American countries: Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru, Uruguay and Venezuela. In addition, CIER has six associate members that are utilities from countries outside the region (UK, France, Spain (2), Mexico, Portugal).

Asia Pacific Economic Cooperation Energy Working Group and Regulators’ Forum. The Energy Working Group and the Regulators’ Forum began as the Electricity Working Group and the Electricity Regulators’ Forum in 1990. Their mandate expanded to include other forms of energy and the name was changed accordingly. The participants are from the following APEC countries: Australia, Canada, People’s Republic of China, Indonesia, Japan, Republic of Korea, Mexico, Papua New Guinea, Philippines, Singapore, Chinese Taipei, Thailand, and United States. The Working Group contributes to decision-making through open and frank discussion. The Forum facilitates information sharing on power sector regulation and responds to requests from APEC Ministers. The Working Group and the Regulators’ Forum have established Business Networks to provide the views of the business sector, and supports events such as seminars, training and technology demonstrations. A business sector-ministerial dialogue is held in conjunction with each Energy Ministers’ Meeting.

Association of South East Asian Nations Energy Cooperation Agreement, ASEAN Centre for Energy. ACE was established in 1999, replacing the ASEAN-EU Forum. The ten member countries are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. ACE’s mandate is to catalyze the growth and development of ASEAN through energy cooperation. ACE coordinates, manages, and monitors the implementation of the ASEAN Plan of Action. The current ASEAN Action Plan includes the ASEAN Power Grid. ACE’s working group on electricity and the ASEAN Heads of Power Utilities and Authorities provide input and work with ACE to implement plans in the electricity sector. ASEAN countries are considering forming a joint venture to invest in and operate regional transmission lines.

Greater Mekong Subregion. An exploratory, informal organization—the Greater Mekong Subregion Electric Policy Forum—was formed in 1995, and its experts’ working group was formed in 1998. The Mekong ministers responsible for power endorsed the forum’s draft policy statement on power trade in January 2000, allowing the regional market to proceed, including the formation of market-managing institutions. The working group now is drafting a memorandum of understanding for the establishment of a regional electricity market. Participating organizations are the national utilities and relevant government departments of: Cambodia, Laos, Myanmar, Thailand, Vietnam, and the Yunnan Province of China.

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Table 1: Comparison of the “Market Promoter” Model

Organization APEC Energy Working Group

APEC Regulators’

Forum

ASEAN Centre for Energy

Greater Mekong

CIER

Auspices APEC Regional Organization

APEC Regional Organization

ASEAN Regional Organization

Stand-alone within Greater Mekong subregion regional framework

None

Scope Energy, Power Domestic and Regional

Energy, Power Domestic and Regional

Energy, Power Domestic and Regional

Electricity Trade

Electricity Trade

Primary Objective

Maximize the energy sector’s contribution to the region’s economic and social well being, while mitigating the environmental effects of energy supply and use; contribute to decision-making

Contribute to development of an efficient sector and regulatory arrangements that are conducive to business sector development

Serve as a catalyst for economic growth and development of ASEAN through national and joint activities on energy

Multidimensional strategic development to achieve economic and environmental benefits for the region.

Promote and encourage the integration of the electric markets in South America

Primary Objective- Electricity

Mobilizing environmentally-responsible investment in power infrastructure

Contribute to development of an efficient electricity sector and regulatory arrangements that are conducive to business sector development

Manage and facilitate the ASEAN goals for the electricity sector—to Develop the Trans-ASEAN Power grid; to promote private investment, implementing organization: Heads of ASEAN Power Utilities/Authorities

Contribute to develop an energy system that reliably provides electricity and other forms of energy at reasonable cost and minimizes environmental and social costs

Forum for exchange of information, knowledge and experience; promote investment and business relations

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Organization APEC Energy Working Group

APEC Regulators’

Forum

ASEAN Centre for Energy

Greater Mekong

CIER

Tasks/Activities

Seminars, training courses and information exchange activities; publish energy statistics; manuals on “best practices”; website to facilitate power infrastructure development

Facilitates information sharing on all aspects of power sector regulation; responds to requests from ministers.

Coordinates manages, and monitors ASEAN Action Plan; provides technical coordination and facilitates the task of the implementing organizations

Not applicable Studies on specific problems; special seminars; training; publications; data bank

Internal Organization

[TBD] Government regulators and key advisors; ad hoc forum for cooperation in power infrastructure

Governing Council, Executive Director and Secretariat

Mekong energy ministers endorsed the Policy Statement on Power Trade under which the Electric Power Forum and EWG will become part of governance structure of the market

Central Committee and national committees; technical committees; support by Secretariat - Exec. Dir. and 4 Sr. staff

Formal Business Network

Yes, Business Network - 2 reps from each country

Yes No Yes Yes

External Reporting

APEC Leaders and Energy Ministers

APEC Leaders and Energy Ministers

Consultative Committee of senior officials of ASEAN economic ministries

Greater Mekong Subregion Ministers

None

Financing Members, Business partners

Members, Business partners

Donors, Member contributions

Donors, gov’t depts.. and utilities

Member contributions of constant quota, plus proportional amount (MW -based)

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Regional “Market Maker” Models

Baltic Ring Electricity Cooperation (BALTREL). BALTREL was formed in 1998 on the recommendation of the Baltic Ring Interconnection Study; the regional electricity market is under formation. BALTREL’s initial activities include studies to develop common rules for the Baltic electricity market and to develop methods to implement joint activities. BALTREL’s mandate recently expanded to include gas interconnections. Participating organizations are the 18 utilities and companies that participated in the Study from the countries of Belarus, Denmark, Estonia, Finland, Latvia, Lithuania, Norway, Poland and Sweden.

Mid-Continent Area Power Pool (MAPP). MAPP was formed in 1963 as the Mid-Continent Area Power Planners. At formation MAPPs members consisted of 21 utilities of various sizes (American and Canadian), with a range of ownership and operating structures, each of which had its own regulatory requirements and economic agenda. In 1972, MAPP began operations as a “loose pool,” at which time it changed its name to the Mid-Continent Area Power Pool. MAPP has always stressed the benefits it can bring to its members through a public awareness campaign. MAPP is now reorganizing as a Regional Transmission Organization (RTO) in compliance with US regulatory requirements.

Nordel. Nordel was formed in 1963. Nordel was a technical cooperation and advisory body with representatives from the five Nordic countries (Denmark, Finland, Iceland, Norway, Sweden) without Government participation. The objective of Nordel was to: a) monitor the development of power supply in the Nordic countries and b) promote the best technical, economical and environmental development through discussions and recommendations. Nordel now operates in conjunction with Nord Pool, the power market formed in 1993.33

Southern African Power Pool (SAPP). SAPP was established in 1995 after five years of preparation. Trade in the pool is beginning to build and should accelerate with the completion of the Coordination Centre for SAPP in 2001. SAPP continues to evolve from its bilateral trade origins to include pool-brokered energy sales, as well as changes in membership rules, from vertically integrated utilities to transmission-owning entities. Initial Members were the utilities of: Angola, Botswana, Democratic Republic of Congo, Lesotho, Malawi, Mozambique, Namibia, Republic of South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.

South Eastern Europe Regional Electricity Market. Formal organization and market under formation. In 1999, the ministers responsible for energy in six Balkan countries signed the Declaration of Intent to Establish a Regional Electricity Market in South-Eastern Europe. The Declaration follows three years of study and preparation by the Balkan Interconnection Task Force. The Declaration named the power group task force as the first interim Market Management Committee. Due to the differences between the national systems, the regional market will develop in a phased manner. Participants are the utilities and relevant government departments of Albania, Bosnia and Herzegovina, Bulgaria, Greece Romania, Russia and the former Yugoslav Republic of Macedonia.

33 Information on Nordel and Nord Pool was provided by NVE.

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Table 2: Comparison of “Market Maker” Model

Organization BALTREL MAPP NORDEL SAPP South-East Europe Regional Electricity Market

Auspices Stand alone within Baltic and Nordic States regional framework

Stand alone Stand alone Stand alone within SADC regional framework

Part of Black Sea Regional Energy Center (BSREC)

Scope Electricity Trade, now includes gas

Electricity Trade

Electricity Trade Electricity Trade

Electricity Trade

Study Organization prior to forming Implementation Organization

Yes. Baltic Interconnection Task Force; Steering and Advisory committees; project Management team; 3 Working Groups

Yes. Policy (Utility CEOs) and Engineering Committee

No Yes. Policy Committee and Technical Committee under SADC Electricity Subcommittee

Yes. Balkan Interconnection Task Force

Primary Objective of Study Organization

Study: Development of a Competitive Baltic Electricity Market, identify priority investments; Study: social, macroecon and demand

Studies to explore basis for power trade, identify obstacles and recommend solutions

Study to explore basis for power trade, identify investments

Study: Development of a Competitive Balkan Electricity Market, identify and prioritize investments

Primary Objective of Initial Implementation Organization

Promote development of integrated gas and electricity market

Develop a detailed Agreement, Appoint planning committee

Technical and advisory body to promote optimal use of Nordic trans. system

Implementing body to realize benefits from increased levels of power trade

Clarify fundamental characteristics of REM and determine first steps to achieving, oversee design of REM

Tasks/Activities Initial Implementation Organization

Discussion of pre-conditions for trade; study and elaboration of common rules

See above Monitoring; promoting best technical and economic development

Make trade under the pool operational

Identify obstacles to market and address; identify short, med. and long term objectives to achieve REM

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Organization BALTREL MAPP NORDEL SAPP South-East Europe Regional Electricity Market

Internal Organization, Initial Implementation

BALTREL Committee with Working Groups and subgroups (see Annex A for diagram)

Temporary Management Committee and Planning Committee

Advisory body, reps from five Nordic countries and subcommittees. Rotating chair, responsible for secretariat

Exec. And Management Committees, three subcommittees and technical working groups

Ministers named Task Force as Interim REM Management Committee; technical working groups

External Reporting, Initial Implementation

Council of Baltic States; Nordic Council of Ministers

Complies with Nat’l and state regulations

None SADC energy Ministers

Balkan ministers of energy and BSREC

Financing, Initial Implementation

Donor and members

Members Members Donors Donors

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ANNEX 13: DAR ES SALAAM DECLARATION

NILE BASIN INITIATIVE DAR ES SALAAM DECLARATION ON REGIONAL ELECTRIC POWER TRADE

May 20, 2003

We, the Ministers responsible for electricity affairs in the countries of Burundi, Democratic Republic of Congo, Egypt, Eritrea,34 Ethiopia, Kenya, Rwanda, Sudan, Tanzania and Uganda, make the following declaration.

We recognize that Cooperation can achieve sustainable socio-

economic development through the equitable utilization of, and benefit from, the common Nile Basin water resources;

cooperation in the development of electric power resources in the Nile Basin, including, inter alia, investments in hydro-generation, transmission, and the development and integration of electricity markets, are vitally important strategies for optimizing system benefits; and this cooperation will also realize developmental benefits, including economic prosperity, poverty reduction, peace, and environmental sustainability; and

cooperation in the establishment of a Nile Basin Power Forum is a desirable means for achieving these benefits;

and, we further recognize the growing cooperation in the Nile Basin, including the Shared Vision of the Nile Basin Initiative adopted

by the Nile Council of Ministers in Dar es Salaam on 22 February 1999;

the detailed preparation of the Shared Vision Program (SVP) through multi-country, multisectoral and participatory processes, including a Nile Basin Regional Power Trade project with the proposal to set up a Nile Basin Power Forum;

Subsidiary Action Programs - the Eastern Nile Subsidiary Action Program (ENSAP) and the Nile Equatorial Lakes Subsidiary Action Program (NELSAP) - to plan and implement power sector investments and activities at a subregional level; and

the importance of effective coordination with other initiatives in power generation, transmission, and trade in electricity in the Nile Basin.

We adopt the long-term vision for the Nile Basin Power Forum

that, inter alia, increases cooperation in the development of regional plans and investment for expanding generation and transmission; facilitates common understanding of power sector reform strategies and harmonized regulatory regimes; promotes power trade; ensures equitable trading regimes; facilitates learning, and supports new information and communication technologies.

We approve the Regional Power Trade project implementation

plan, including the establishment of a Nile Basin Power Forum.

We agree to meet periodically to review progress of the SVP

Regional Power Trade project and the power investment programs under the Subsidiary Action Programs.

34 Eritrea is participating in the NBI in an observer capacity and has stated its intention to participate fully soon.

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ANNEX 14: STATUS OF SVP PROJECTS

Project PreAppraisalMission

Decision Meeting

Appraisal Mission

Negotiations* Preliminary Startup

Effectiveness

SVP Coordination Project

Dec02 27Jan03 3-14 March03

14-24April 03 April 03 16 Oct 03

Environment Nov-Dec01 9May02 May02 Aug 02

Bank Board April 03

GA Signature

April 03

April 03 17 Oct 03

Applied Training Jun-Jul02 Dec02

5June03 17-20June 03 8Dec 03 Jan 04 (advertise core

staff)

Apr 04

Confidence Building

Mar02 Dec02

22April03 5-7May03 28-29Jan04 Jan 04 (advertise core

staff)

May 04

Regional Power Trade

Apr02 Feb03

9June03 23-24May03 8Dec03

Feb 04 Jan 04 (advertise core

staff)

May 04

Water Resources Jul-Aug02 27-30May03

2 Oct 03 1-16 Nov 03

Apr 04 Jan/Feb 04 (advertise core

staff)

May 04

Socio-Economic Development. & Benefit Sharing

Mar03 11-13 Nov 03

Feb 04 Feb 04 Apr/May 04 March 04 (advertise core

staff)

Jun 04

Agriculture 29-31 Oct 03 Feb04 Feb 04 Apr/May 04 March 04 (advertise core

staff)

Jun 04

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