AFRICAN DEVELOPMENT BANK

Transcription

1 AFRICAN DEVELOPMENT BANK EMERGENCY POWER INFRASTRUCTURE REHABILITATION PROJECT - PHASE I SUPPLEMENTARY GRANT PROPOSAL COUNTRY : ZIMBABWE APPRAISAL REPORT ONEC DEPARTMENT December 2013

2 Table of Contents Grant Information... i Currency Equivalents... ii Acronyms and Abbreviations... ii RESULT MATRIX... iii EXECUTIVE SUMMARY... v 1 INTRODUCTION ORIGINAL PROJECT Project Background and Origin Project Objective Project Components Project Costs and Financing Arrangements Project Implementation Status Rehabilitation of the Ash Plant at Hwange Power Station Sub-Transmission and Distribution System Reinforcement Consultancy for Environmental and Social Audit Consultancy for Project Supervision Consultancy for Project Accounts Audit Environmental Monitoring and Capacity Building REVISED PROJECT FINANCING Objectives and Description Revised Project Cost estimates Revised Implementation Schedule Project Implementation Institutional Arrangement Monitoring and Evaluation Social and Environmental Management Plan JUSTIFICATION FOR SUPPLEMENTARY FINANCING LEGAL INSTRUMENTS AND AUTHORITY Legal Instrument Conditions Associated with Bank s Interventions Conditions Precedent to Entry into Force of the Grant Conditions Precedent to First Disbursement of the Grant Compliance with Bank Policies CONCLUSION AND RECOMMENDATION Conclusion Recommendation... 8 Annex I Project Costs ANNEX II Project Implementation Schedule

3 Client s information RECIPIENT: Grant Information Government of the Republic of Zimbabwe Financing plan Source Amount (USD) Instrument million Zim-Fund 4.61 Grant TOTAL COST 4.61 Grant ADB s key financing information Supplementary Grant Interest type* Interest rate spread* Commitment fee* Other fees* Tenor Grace period USD 4.61 million N/A N/A N/A N/A N/A N/A Timeframe - Main Milestones (expected) Approval of Supplementary Financing by Zim-Fund POC 25/07/2013 Approval of Supplementary Financing by AfDB Board 13/11/2013 Effectiveness 25/11/2013 Last Disbursement 31/12/2014 i

4 Currency Equivalents July UA = US Dollar (USD) FISCAL YEAR: 1 Jan 31 Dec Acronyms and Abbreviations AfDB African Development Bank MTP Medium Term Plan ADF African Development Fund MVA Megavolt ampere (1,000 kva) CAP Consolidated Appeal Framework NCB National Competitive Bidding EIRR Economic Internal Rate of Return NGO Non-Governmental Organization ESMP Environmental and Social Management Plan O&M Operation and Maintenance EPIRP Emergency Power Infrastructure PA Procurement Agency Rehabilitation Project ESIA Environmental and Social Impact PMT Project Management Team Assessment GOZ Government of Zimbabwe POC Programme Oversight Committee GPA Global Political Agreement STERP Short Term Emergency Rehabilitation Program HPS Hwange Power Station T&D Transmission and Distribution IE Implementing Entity Tx Transformer IG Inclusive Government WACC Weighted Average Cost of Capital km Kilometer USD United States Dollar kv Kilovolt (1,000 volts) VAR Volt-Ampere Reactive MDTF Multi Donor Trust Fund ZEMA Zimbabwe Environmental ManagementAuthority MMU MDTF Management Unit ZESA Zimbabwe Electricity Supply Authority MOENRM Ministry of Environment and Natural Resources Management ZETDC Zimbabwe Electricity Transmission and Distribution Company MOEPD Ministry of Energy and Power Zim-Fund Zimbabwe Multi-Donor Trust Fund Development MOF Ministry of Finance ZPC Zimbabwe Power Company MOHCW Ministry of Health and Child Welfare ii

5 IMPACT RESULT MATRIX Country and project name: Zimbabwe, Emergency Power Infrastructure Rehabilitation Project Phase I Purpose of the project : Improve availability and reliability of electricity supply to critical social infrastructure facilities and the people of Zimbabwe PERFORMANCE INDICATORS MEANS OF RISKS/MITIGATION MEASURES RESULTS CHAIN Indicator (including CSI) Baseline Target VERIFICATION The power production Utilised installed capacity 1237 MW in MW by 2016 ZESA, ZPC capability of the installed Annual Reports; capacity fully restored OUTCOMES OUTPUTS 1.Improved availability of electricity 2.Access to reliable electricity supply 3.Improved environmental quality at HPS and surroundings 1. Distribution Network Infrastructure upgraded and rehabilitated 1.1 Electrical energy production at Hwange Power Station 2.1 Number of customers accessing continuous electricity supplies in selected project areas 3.1 Level of air particulates in the air at Hwange Power Station and surroundings 1.1 : 11/0.4kV & 33/0.4kV distribution transformers installed (No.) 1.2 : Distribution lines rehabilitated (km) 1.3 Distribution cables rehabilitated (km) 3133 GWh in GWh by , 280 customers in mg/m 3 in mg/m 3 by 2016 ZPC Annual Reports 249,280 by 2016 ZESA and ZETDC Annual Reports ZPC Annual Reports 0 in by 2016 Implementing Entity Project Progress Reports; 0 km in by km in by 2016 MMU Weekly, Monthly & Quarterly Reports Risk 1: Revenue risk leading to failure to properly operate, and maintain the rehabilitated facilities. Mitigation Measures: (1) Ensure that the design of the equipment installed during the Project is robust and of low maintenance and (2) support ZESA to lobby for gradual tariff adjustment towards a cost reflective tariff through regular Bank/Government dialogue meetings.. Risk 2: Vandalism of rehabilitated facilities Mitigation Measures: Enhance security around the refurbished installations and Bank support ZESA to lobby for enforcement of legislation that criminalizes acts of vandalism and reduction in power outages ensuring that the system is live most of the time. Risk 1: Implementation delays Mitigation Measures: i) Engagement of independent procurement agent; ii) Engagement of independent implementing entity; iii) Closer follow up by MMU and Project Steering Committee; iv) Effective involvement of iii

6 Country and project name: Zimbabwe, Emergency Power Infrastructure Rehabilitation Project Phase I Purpose of the project : Improve availability and reliability of electricity supply to critical social infrastructure facilities and the people of Zimbabwe PERFORMANCE INDICATORS MEANS OF RISKS/MITIGATION MEASURES RESULTS CHAIN Indicator Baseline Target VERIFICATION (including CSI) 2. Sub-Transmission Capacity Strengthened 2.1 Sub-transmission level transformers installed (No.) 0 in by Sub-transmission level circuit breakers installed(no.) 0 in by 2016 Bank Supervision Mission Reports Audit report Project Management Teams, and v) Better coordination through sector governance structures; KEY ACTIVITIES 3. Hwange Power Station Rehabilitated: 3.1 Replace wet ash handling system 3.2 Construct new ash plant control room Old ash handling system in 2012 Old ash plant in 2012 Completion of Ash Dam rehabilitation works by 2016 Control room completed by kV transformer cable (km) Old cables in by kV 3-core cables (km) Old cables in 2012 o.50 by Audit Services 4.1 Project Audit Produced 0 in by 2016 INPUTS Component A: Rehabilitation of the Ash Handling Plant at Hwange Thermal Power Station: Component B: Rehabilitation of sub-transmission facilities and Rehabilitation of distribution facilities Component C : Environmental Audit Component D: Engineering &Project Management Consultants Component E: Audit Component F : Environmental Monitoring and Capacity Building Component A: USD 10.62million Component B: USD million Component C: USD 0.79million Component D: USD 1.83million Component E: USD 0.06million Component F: USD 2.40 million TOTAL : USD million iv

7 EXECUTIVE SUMMARY In June 2011, the Board of Directors approved a grant amounting to USD 35 million to finance the Emergency Power Infrastructure Rehabilitation Project (EPIRP I or the Project) targeting the power transmission and distribution facilities throughout the whole country and the rehabilitation of the Ash Handling Plant at the Hwange Power Station in Hwange. The Protocol of Agreement was signed in September The envisaged outcomes of the intervention include: improved environmental management and ash handling at the Hwange Power Station, improved reliability of sub-transmission and distribution networks, and improved electricity supply to the water treatment plants of Harare City and other urban water supply systems. Following the recruitment of the Implementing Entity (IE) in October 2011 and the Procurement Agent (PA) in November 2011, the Project was launched in December Since then, considerable progress has been achieved in the implementation of the Project. The technical assessments, definition of scope of works and services and preparation of procurement documents were completed followed by the launch of the procurement process. The bid evaluation has been completed for the three packages involving physical works and for three packages for consultancy services. The following contracts have been awarded: the Rehabilitation of the Hwange Power Station ash dam (EPIRP/002), the Sub-transmission Facilities reinforcements (EPIRP/003), the Distribution System Reinforcement (EPIRP/004) the Environmental and Social Audit (EPIRP/005) and the Project Audit (EPIRP/006). The Environmental Monitoring and Capacity Building contract requires inputs from the Environmental and Social Audit contract and will be awarded after its commencement. Despite the progress made in the procurement process, the prices obtained for two of the bids have been higher than the budgeted figures in the Project Appraisal Report, ADB/BD/WP/2011/96/Rev.1/Approved, as well as the engineer s estimate. Generally, the reasons for the high bid price outcomes were mainly due to: (i) negative perceptions about Zimbabwe and its dollarized economy; (ii) lack of recent, similar projects with a similar scale in Zimbabwe to use as references; (iii) the rehabilitation nature of the works and the lack of sufficient documented information on the current state of the system; (iv) difficult and unreliable cost estimating in current day Zimbabwe; and (v) the short implementation periods required for the projects. Taking into account the concluded bidding processes and contingencies to cater for unforeseen expenditures during the implementation process, the expected total value of the Project is now estimated at USD million. The additional resources required therefore amount to USD 4.61 million. If the Project goals and objectives as set out in the PAR are to be met, the Project must be completed as per the original plan. The additional resources being requested will make it possible for the Project to be completed as planned and achieve its goals. v

8 REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD OF DIRECTORS ON A PROPOSED SUPPLEMENTARY GRANT FROM THE RESOURCES OF THE ZIM-FUND TO ZIMBABWE FOR THE EMERGENCY POWER INFRASTRUCTURE REHABILITATION PROJECT (EPIRP I) Management hereby submits this proposal and recommendations concerning a proposal for a US$ 4.61 million supplementary grant to the Republic of Zimbabwe from the resources of the Zimbabwe Multi- Donor Trust Fund (Zim-Fund) to finance the full implementation of the EPIRP I. 1 INTRODUCTION 1.1 It is to be recalled that on 30 June 2011, the Board approved on a lapse-of-time basis financing of the EPIRP I targeting the rehabilitation of the ash handling plant at Hwange Power Station, the sub-transmission facilities and distribution system throughout the country, and other related activities. 1.2 The original estimated cost of the Project was USD 35 million and the disbursement rate as of 31 August 2013 was at 9.13%. The Project Protocol of Agreement was signed on 14 September 2011, and the Project was launched on 15 December 2011 following the recruitment of the Implementing Entity (IE) in October 2011 and the Procurement Agent (PA) in November This was followed by technical assessments, provision of bid documents, and commencement of the bidding process. By 31 December 2012, the tendering of the major components of the Project was completed, except for Environmental Monitoring and Capacity Building (EPIRP/007). The tendering for several of the Project components resulted in bid prices higher than the budgeted amounts. Due to the importance of implementing the full scope of the Project for achieving the Project objectives, this proposal is requesting supplementary financing in the amount of USD 4.61 million to enable the full implementation of the Project as originally envisaged. 2 ORIGINAL PROJECT 2.1 Project Background and Origin The political and economic situation in Zimbabwe for the last decade has severely affected all sectors of the economy including infrastructure. In this regard, the rehabilitation of key power sector assets in the generation, transmission and distribution systems has been identified as the fastest and least cost option for restoring capacity to increase electricity supply in order to meet part of the current electricity demand and enhance system stability. Following the outbreak of Cholera in the country in 2008, it was imperative for the water and sanitation situation to be urgently addressed. In order to address the situation it was also observed that the reliability and availability of power supply in the country had to be improved, hence the need for the Emergency Power Infrastructure Rehabilitation Project. 2.2 Project Objective The objective of the Project is to improve the provision of adequate and reliable power supply in an environmentally sound manner through the rehabilitation of the ash handling plant at Hwange Power Station and the sub-transmission and distribution facilities in the country. The Project will also help to improve the reliability of electricity supply to the treatment plant of the Harare city water supply and other urban water supply systems and thereby help prevent another cholera outbreak in the country. 1

9 2.3 Project Components The Project complements the ongoing power sector infrastructure rehabilitation program identified by ZPC and ZETDC, subsidiaries of ZESA Holdings mandated to operate and maintain the Hwange power station and transmission & distribution networks respectively. Components included in the project were selected from a list of critical interventions that need to be conducted in the rehabilitation of power infrastructure to bring the power system to an acceptable level of performance. The identification of the Project components was undertaken by the stakeholders - ZESA, ZPC, ZETDC, the Ministry of Energy and Power Development and the Ministry of Finance - as the priority activities to be supported by the limited funds available. The Project comprises six components: (A) Rehabilitation of Ash Plant at Hwange Power Station; (B) Sub-Transmission and Distribution Reinforcement; (C) Consultancy for Environmental and Social Audit; (D) Consultancy for Project Supervision; (E) Consultancy for Project Accounts Audit; and (F) Environmental Monitoring and Capacity Building. 2.4 Project Costs and Financing Arrangements The total cost of the EPIRP Phase I was estimated at USD million, excluding the cost of the services of a procurement agent which is being financed separately through the Fragile States Facility (FSF). This was the amount approved respectively by the Zim-Fund Project Oversight Committee (POC) for implementation of Phase I, and the Board. Table 1 summarizes aggregate costs of the various project components at project appraisal stage. Project Component Table 1: Original Project Cost Estimates by Component Cost (USD million) A Rehabilitation of ash plant at Hwange power station B Sub-Transmission and Distribution system reinforcement C Consultancy for Environmental and Social audit D Consultancy for Project Supervision E Consultancy for Project Accounts Audit F Environmental monitoring and capacity building Total Table 2: Original Project Cost by Category of Expenditure Category of Expenditure USD (million) A. Works B Services 2.87 C Miscellaneous 0.00 TOTAL PROJECT COSTS

10 2.5 Project Implementation Status Despite being approved by the Board in June 2011, the conditions for the first disbursement were fulfilled in May This resulted in the late commencement of the technical assessment phase of the Project. The overall slippage from the indicative schedule in the PAR is estimated at 12 months Despite the delays, the Project has made steady progress. USD3.2 million was disbursed by end of August 2013 with the project having achieved the following milestones: Completion of the technical assessment and definition of scope of works and services, Preparation of procurement documents; Launch of procurement process including prequalification process; Completion of tender evaluation for 5 out of a total of 6 packages; Negotiations and award of five contracts (EPIRP/002, EPIRP/003, EPIRP/004, EPIRP/005 and EPIRP/006). Only one contract (EPIRP/007) is yet to be awarded. Implementation of the awarded contracts is progressing well The paragraphs below provide the detailed status of implementation of each component of the Project Rehabilitation of the Ash Plant at Hwange Power Station This component entails the replacement and refurbishment of various pumps, discharge lines, low voltage and medium voltage cables in the ash handling plant at Hwange Power Station. The main outcome of this will be improved environmental management at Hwange Power Station ash plant. The Specific Procurement Notice (SPN) for the pre-qualification of bidders for this component closed on 26th July The only one bidder that was pre-qualified for this package pulled out on 7 November Thus it was agreed to change the mode of procurement to Limited International Bidding and eleven bidders were pre-qualified for the bid. The bids for this bidding process were opened on 9 April The bid evaluation for this complex rehabilitation package was completed during the second week of July The contract was awarded in August 2013 with an eight month contract delivery period Sub-Transmission and Distribution System Reinforcement Sub-Transmission System Reinforcement: The sub-transmission part of this component involves the supply, installation and commissioning of seven power transformers and sixteen 132 kv circuit breakers at various substations throughout the country. The contract for this package was awarded in January Orders have been placed for equipment which is currently being manufactured. The target completion date for this contract is 4 January Distribution System Reinforcement : The distribution part of this component consists of the supply, installation and commissioning of 521 distribution transformers and construction of 287 km of distribution overhead lines and 12 km of underground cables. The contract for this package was awarded in February The equipment and materials are at various stages of being manufactured in South Africa and India. The target completion date for this contract is April

11 2.5.6 Consultancy for Environmental and Social Audit Consultancy has been procured to carry out an Environmental and Social Audit of the whole Hwange power plant and its operations and a comprehensive Environmental and Social Management Plan prepared for the plant. The contract was awarded in August 2013 and is expected to be completed in July Consultancy for Project Supervision The GOZ, with the assistance of the Zim-Fund Management Unit (MMU), procured the services of Parsons Brinkerhoff as an Implementing Entity for the Project through advance contracting procedures. The IE provides project management, coordination, technical assessment, preparation provision of technical documents for tenders and supervision services. The IE is also responsible for project financial management including accounting and financial reporting. The IE and GOZ signed the Implementing Entity Agreement in October 2011, with the IE mobilization commencing in December To date, the IE has completed technical assessments, provided technical inputs for tender bidding documents preparation, prequalification, bidding and evaluation process and contract award negotiations. With the technical input from the IE, the Procurement Agent is effectively leading and administering the procurement process. The procurement process for most of the packages has been completed and the next phase of the PA s role is now administering the contracts on behalf of the GOZ. The IE will play the role of Engineer to supervise the works and services to be provided Consultancy for Project Accounts Audit The project audit for year ending 2012 is being finalized. The Project audit contract was awarded in May 2013, and the auditor is working on the report for the period ending The audit services will include both the EPIRP I and the Zim-Fund Urgent Water Supply and Sanitation Rehabilitation Project I Environmental Monitoring and Capacity Building This package is made up of an environmental consultancy services to provide Capacity Building of the Environmental Monitoring Unit at Hwange Power Station and works for the procurement of Air Quality Monitoring Equipment for the station. The procurement of this component will be initiated after the completion of the environmental and social audit. 4

12 3 REVISED PROJECT FINANCING 3.1 Objectives and Description The project objectives have not changed and remain as described in the PAR, as set out in section 2.2 above. 3.2 Revised Project Cost estimates The bidding process for all the items in the Project except for one (Environmental Monitoring and Capacity Building) has been completed and the comparison between the cost estimates by the IE after the scoping exercise and the costs from the bidders is shown in Table 3. The bid prices for the Sub-transmission and Distribution System Reinforcement component of the Project were substantially higher than the revised cost estimate The reasons for the high bid prices were mainly due to: Negative perceptions about Zimbabwe and its dollarized economy; Lack of recent, similar projects with a similar scale in Zimbabwe to use as references; The rehabilitation nature of the works and the lack of sufficient documented information on the current state of the system; Difficult and unreliable cost estimation in current day Zimbabwe; and The short implementation periods. The inclusion of some items that were considered to be essential in addressing the further deterioration of the distribution network in Harare. The Project Appraisal cost estimates were not based on a detailed feasibility study. Project Packages Table 3 Comparison between cost estimates and contract prices Difference Comments Actual bid between PAR Cost estimates prices and actual at PAR (USD million) costs (USD million) (USD million) A B C D E F Rehabilitation of Ash Plant at Hwange Power Station Sub-Transmission & Distribution System Reinforcement Consultancy for Environmental and Social Audit Consultancy for Project Supervision Consultancy for Project Accounts Audit Environmental Monitoring and Capacity Building Total Additional Resources above approved amount Tender price not yet known hence estimated cost used. Increase in scope and bid price Increase in bid price 5

13 Table 4: Supplementary Financing Categories of Expenditure Categories of Expenditure Amount (USD million) A Works 4.61 B Services 0.0 C Miscellaneous 0 TOTAL Considering the concluded bidding process and making estimates for outstanding contracts and a contingency, the expected total cost of the Project is estimated at the revised amount of USD million as shown in Table 3. Additional resources amounting to USD 4.61 million are therefore required for the Project to achieve its original goals and objectives. 3.3 Revised Implementation Schedule The Project was originally planned to be implemented over a period of 21 months. The contracts for the various project components were originally expected to have been signed by late November However, due to the various delays experienced in the implementation process, the first contracts were signed in March Project completion for all packages is now targeted at the end of The revised implementation schedule is shown in Annex II. 3.4 Project Implementation Implementation Arrangement The Project will continue to be implemented within the framework of the instrument establishing the Zim-Fund and its Operations Manual. In this regard, an independent Project Implementation Entity (IE) will be responsible for implementation coordination, and monitoring while the procurement services will be provided by an experienced independent Procurement Agent (PA) already appointed for the project Institutional Arrangement There will be no change to the institutional arrangements. That is to say, the IE will be assisted by Project Management Teams (PMTs) that have been set up within ZPC and ZETDC for general coordination. The already set up Project Steering Committee (PSC) comprising representatives from ZPC, ZETDC, Ministry of Energy and Power Development, and Zim-Fund MMU will continue to address all major issues in connection with the Project, and will provide overall guidance during project implementation Monitoring and Evaluation Zim-Fund is developing a Monitoring and Evaluation (M&E) framework to support the project.the logframe was retrofitted into the new format and in the process the outcome indicators revised in line with the requirements for M&E Social and Environmental Management Plan An Environmental and Social Management Plan for Hwange Power Station was developed by ZPC, and an independent environmental and social audit is being done under the Project (Contract No. EPIRP/005) which will be followed by the Environmental Monitoring and Capacity Building component (Contract No. EPIRP/007). The Environmental and Social Management Plans for the sub-transmission and distribution packages have been systematically 6

14 included in the works packages for implementation by the contractor, and its implementation will be monitored and supervised by the current IE ( Parsons Brinkerhoff). 4 JUSTIFICATION FOR SUPPLEMENTARY FINANCING 4.1 The supplementary financing proposal was approved on 25 July 2013 by the POC of the Zim- Fund, which is composed of the Zim-Fund donors and GOZ representatives, after consideration of the importance of achieving the original objectives of the Project. The Project is in alignment with the Bank Group s Zimbabwe Country Brief (as well as the draft version) and the Bank s Strategy ( ) focus on infrastructure development. The inadequate provision or lack of reliable power supply services has affected the people of Zimbabwe more so the poor. It therefore significantly responds to the inclusive agenda and should be supported for the achievement of the full Project objective which is also in line with GOZ Medium Term Plan for This supplementary financing proposal meets the applicable general conditions and specific conditions for supplementary financing set out in the Bank Group Policy and Procedures for Supplementary Financing (ADB/BD/WP/97/83). The following factors have been considered in submitting this proposal: (i) The execution of the Project has commenced and is progressing satisfactorily from the technical perspective but will require additional resources to achieve its objectives. (ii) The cost increases are beyond the control of the GOZ, and the GOZ is not in a position to provide additional financing. (iii) There is need to build upon the recent power sector interventions so as to improve the deteriorated power supply infrastructure in the country. A delay in improvement of power supply services has high tangible and nontangible economic and social costs. (iv) It has not been possible to reduce the total cost of the project through changes of specifications or scope of work or services without significantly affecting the objective of the Project (v) The project is technically and economically viable even with the cost overruns. (vi) The Project cannot be reduced in size without damaging its ability to achieve the set objectives or its sustainability. (vii) There are no exogenous constraints: financial, managerial, or technical that would hinder the completion of the Project 7

15 5 LEGAL INSTRUMENTS AND AUTHORITY 5.1 Legal Instrument The legal instrument to finance the supplementary grant will be a Protocol of Agreement between the Republic of Zimbabwe (the Recipient) and the Bank, in its capacity as the administrator of the Zimbabwe Multi-Donor Trust Fund (Zim-Fund), for a grant from the resources of the Zim-Fund. 5.2 Conditions Associated with Bank s Interventions Conditions Precedent to Entry into Force of the Grant The Protocol of Agreement will enter into force on its date of signature by the Recipient and the Bank Conditions Precedent to First Disbursement of the Grant The conditions precedent to first disbursement of the initial grant, which will be extended to the supplementary grant, have been fulfilled. As such, disbursements may be made from the supplementary grant upon entry into force of the Protocol of Agreement. 5.3 Compliance with Bank Policies The proposed supplementary grant complies with all applicable Bank policies, including the Bank Group Policy and Procedures for Supplementary Financing. 6 CONCLUSION AND RECOMMENDATION 6.1 Conclusion Priced bids received from the tendering process have been significantly higher than the budgeted figures from the estimates arrived at during the Project appraisal stage. Considering the concluded bids and estimates on the outstanding packages and the requirements during execution, the expected total value of the works is estimated at USD million, thus additional resources of USD 4.61 million (13.2% of the original estimated Project costs) is needed in order to achieve the objectives of EPIRP. 6.2 Recommendation Considering the many socio-economic and environmental benefits of this Project, it is recommended that the Bank approves this supplementary grant, from the resources of the Zim- Fund, for the amount of USD 4.61 million for the EPIRP. 8

16 Annex I Project Costs Component Package Number Description Budget as appraised (USD) Actual Contract (USD) Additional Resource Required (USD) Rehabilitation of ash plant at Hwange power station EPIRP/002 Ash Plant Upgrade and Rehabilitation 14,870,000 10,615,500-4,254,500 Sub-transmission and Distribution Reinforcement EPIRP/003 Sub-Transmission Facilities Reinforcement 4,960,000 8,565, ,605, EPIRP/004 Distribution System Reinforcement 10,000,000 15,352,498 5,352,498 Consultancy for Environmental and Social Audit Consultancy for Project Supervision Consultancy for Project Accounts Audit Environmental Monitoring and Capacity Building 1 Total EPIRP/005 EPIRP/001 EPIRP/006 EPIRP/007 Consulting Services for Environmental and Social Audit and Environmental Management Plan Implementing Entity Services 1. The contract for this package has not yet been awarded hence budget price used as contract price. 1,200, , ,905 1,500,000 1,826, , Consultant s Services for External Project Audit 70,000 58,899-11,111 Environmental Monitoring and Capacity Building 2,400,000 2,400, ,000,000 39,608, ,608,482.42

17 ANNEX II Project Implementation Schedule ZIMFUND: EMERGENCY POWER INFRASTRUCTURE REHABILITATION PROJECT SCHEDULE STATUS AND PROJECTION WORK SCHEDULE KEY Original Schedule Projection Reporting time original completion projected completion Current Schedule SR. NO. 1 EPIRP Rehab. of Ash Plant Inception, Technical assessment, Scoping, 1.1 Pre-Qualification Process Bidding Documents Floatation Evaluation Preparation of Contract Documents Contract Aw ard Jan-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Projected completion by May Works Implementation 2 EPIRP Rehab. Sub transmission 2.1 Inception, scoping, pre-qualification Process Bidding Documents Floatation Evaluation Preparation of Contract Documents Contract Aw ard Projected completion by Jan Works Implementation 3 EPIRP Rehab. Of distribution sys. 3.1 Inception, Scoping, Pre-Qualification Process Bidding Documents Floatation Evaluation Preparation of Contract Documents Projected completion by Apr Contract Aw ard 3.7 Works Implementation 4 EPIRP Env. and Social Audit Inception, Scoping, Pre-Qualification Process Bidding Documents Floatation Evaluation Preparation of Contract Documents Projected completion by July Contract Aw ard 4.7 Implementation 5 EPIRP Project Audit 5.1 Inception, Scoping, Pre-Qualification Process 5.2 Bidding Documents 5.3 Floatation 5.4 Evaluation 5.5 Preparation of Contract Documents Projected completion by Dec Contract Aw ard 5.7 Implementation