FOR OFFICIAL USE ONLY Report No: RES35737 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT RESTRUCTURING PAPER ON A PROPOSED PROGRAM RESTRUCTURING OF POWER DISTRIBUTION DEVELOPMENT PROGRAM-FOR-RESULTS APPROVED ON APRIL 22, 2016 TO PERUSAHAAN LISTRIK NEGARA (PLN) April 5, 2019 Energy & Extractives Global Practice East Asia And Pacific Region Regional Vice President: Victoria Kwakwa The World Bank Power Distribution Development Program-for-Results (P154805) Country Director: Rodrigo A. Chaves Senior Global Practice Director: Riccardo Puliti Practice Manager: Julia M. Fraser Task Team Leader(s): Stephan Claude Frederic Garnier, Tendai Gregan The World Bank Power Distribution Development Program-for-Results (P154805) ABBREVIATIONS AND ACRONYMS DLI Disbursement linked indicator DSCR Debt service coverage ratio ERP Enterprise resource planning FGD Focus Group Discussion P4R Program for Results PAP Program Action Plan PLN Perusahaan Listrik Negara (Indonesia’s power utility) SAIDI System average interruptions duration index SAIFI system average interruptions frequency index The World Bank Power Distribution Development Program-for-Results (P154805) DATA SHEET (Power Distribution Development Program-for-Results - P154805) BASIC DATA Project ID Financing Instrument IPF Component P154805 Program-for-Results Financing No Approval Date Current Closing Date 22-Apr-2016 30-Apr-2020 Organizations Borrower Responsible Agency PERUSAHAAN LISTRIK NEGARA (PLN) Perusahaan Listrik Negara (PLN) Program Development Objective(s) The Project's development objective is to increase access to electricity services and to improve the efficiency and reliability oftheir delivery in selected areas of Indonesia. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Approval Effectiveness Closing Ln/Cr/TF Signing Date Commitment Disbursed Undisbursed Date Date Date IBRD-86100 22-Apr-2016 20-May-2016 18-Nov-2016 30-Apr-2020 500.00 337.57 162.43 Policy Waiver(s) Does the Program require any waivers of Bank policies applicable to Program-for-Results operations? No Page 1 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) I. PROGRAM STATUS AND RATIONALE FOR RESTRUCTURING Project status 1. An IBRD loan of US$500 million in support of a Power Distribution Development Program for Results (P-for-R) for Indonesia's power utility, PT Perusahaan Listrik Negara (PLN), was approved by the Board on April 22, 2016. Loan and Guarantee agreements were signed on May 20, 2016. The Loan became effective on November 18, 2016. The Project's development objective is to increase access to electricity services and to improve the efficiency and reliability of their delivery in selected areas of Indonesia. 2. The project is rated satisfactory for both progress towards achievement of development objective and implementation progress. Most of the Development Linked Indicators are well above expected results. Based on the last supervision mission in October 2018, disbursement1 (already at 67.5%) is expected to be over 90% after the next disbursement scheduled in May 2019 covering the results of the year 20182. 3. In addition to good physical installation implementation progress, the Program Action Plan (PAP) continues to see progress, even if some PAP items are still ongoing and have experienced some delays. These will continue to be closely monitored as per the action plan and timeframe agreed at mid-term (April 2018). Rationale for restructuring 4. The pace of investment has been much faster than the original expectation (as demonstrated under DLI#1, 2 and 4, while the increase in energy sales (DLI#5) has been lagging behind3. As discussed during the mid-term review (in April 2018) and confirmed during the last supervision mission, to maintain the pace of investments until the end of the project, PLN has requested the WB (Ref. No. 4664/KEU.00.01 /DIVPRSUM/2018) to reallocate USD50 million from DLI#5 to DLI#1 (USD10 million), DLI#2 (USD20 million) and DLI#4 (USD20 million), as shown in the revised withdrawal of proceeds below in Table 1. 5. Accordingly, new targets are proposed for the DLIs 1, 2, 4 and 5. Targets for DLI#3 is also proposed to be revised as results are already better than the end-target and to show continued progress in network reliability. Finally, targets for DLI#9 have been clarified by introducing an intermediary target to ensure a clear common understanding of the objectives of the new Distribution Planning Guidelines. 1The first disbursement of US$107.65 million was made on January 9, 2017. A second disbursement of US$229.93 was made on June 2018 covering the results of the Project up to December 31, 2017 2Annual verification by IVA of 2018 program results and program action plan (including site visits) took place from February 18 to March 1st, 2019 and Joint ADB/WB review mission to discuss and agree 2018 results and disbursement is scheduled April 8 to 11, 2019. 3 Residential Energy Sales continue to be well below the original assumption (this phenomenon is widespread in all Islands and not under the control of the Project). As agreed during the Mid-Term Review mission, the target for Energy Sales will be revised following the proposed project restructuring to reflect the current (2016-2018) trend of residential sales growth within PLN. The World Bank Power Distribution Development Program-for-Results (P154805) Table 1: Revised withdrawal of proceeds 6. Change in baseline and targets of one PDO indicator: In addition, the proposed restructuring will solve an issue identified from the beginning of project implementation related to two of the PDO indicators which measures distribution system reliability -- namely the system average interruptions duration index (SAIDI) and the system average interruptions frequency index (SAIFI). The measurement of these indicators has been comprehensively improved from the time the project was prepared4. In 2014-2015, PLN was recording manually interruptions only on 20kV feeders. In 2016, PLN started to computerize the recording of interruptions and calculation of SAIDI/SAIFI and extended the recording of interruption to the entire value chain (generation/transmission/distribution for both medium and low voltage) therefore capturing the real quality of service perceived by customers. Since the first year with comprehensive information was 2017, it is proposed to use 2017 SAIDI and SAIFI as the baseline. Targets for 2018 and 2019 have been discussed and agreed with PLN and reflected in the revised Results Framework. 7. On November 22, 2018, PLN wrote a letter to the Bank (Ref. No. 4664/KEU.00.01/DIVPRSUM/2018), formally requesting the project to be restructured as agreed with the Bank during the mid-term review mission (April 2018) and confirmed follow-up supervision mission (October 2018). Arising from this proposed restructuring of the project, changes to the Results Framework, Allocation of Proceeds, Development Links Indicators, and Disbursement Estimates are proposed. 4In 2017 the SAIDI and SAIFI were 1989 minutes/customer/year and 17.81 times/customer/year compared to targets of 475 minutes/customer and 8.32 times/customer, respectively. The World Bank Power Distribution Development Program-for-Results (P154805) 8. There is no change in the risk rating which remains moderate and the Safeguards Action Plan remains valid. There is also no change to the project’s requirements for Procurement, Disbursements, and Financial Management. The restructuring will not change fundamentally the economic and financial analysis. The project implementation agency remains the same, PT Perusahaan Listrik Negara (PLN). 9. There are no outstanding financial audit reports; and the Project is in compliance with all its legal, Financial Management (FM) and safeguard requirements, with the exception that PLN has not met the loan covenant requiring that its Debt Service Coverage Ratio (DSCR) remains above 1.5. The Bank has, however, issued waivers for the DSCR covenant over the last five years (including for 2018). This recurrent issue is being addressed through the Bank’s advisory and analytical work. II. DESCRIPTION OF PROPOSED CHANGES 10. In summary, four changes are proposed:  Change in Allocation of Proceeds to maintain the pace of investments (see Table 1 above).  Change in Disbursement Estimates, to better reflect the pace of disbursement.  Change in Development Linked Indicators to reflect the reallocation of proceeds and the results at mid-term (see Table 2 below). Table 2: Revised Schedule 4 of the Loan Agreement - Disbursement-Linked Results Disbursement-Linked Results to be achieved in DLI # Sept. 2015 – Oct. 2016 – CY 2018 CY 2019 Cumulative Sept. 2016 Dec. 2017 Number of new residential customers 330 1028 319 0 1,677 DLI#1 (households) connected (in thousands) Allocated amount in USD million 30.640 95.378 29.538 0 155.556 Additional length of MV distribution lines 6053 3604 3855 0 13,512 DLI#2 constructed (in thousands circuit kilometers) 8255* 1402**+2202* Allocated amount in USD million 21.400 33.600 20.000 0 75.000 Number of MV feeder interruptions per 100 21.12 21.08 18.0 16.0 NA DLI#3 circuit kilometers MV network Allocated amount in USD million 28.276 14.070 9.761 7.893 60.000 Additional distribution transformers units 10187 4257 3764 0 18,208 DLI#4 installed 11615* 2829**+1428* Allocated amount in USD million 17,690 47,866 20,000 0 85.556 Volume of increased energy sales to 1152 369 524 543 2,588 DLI#5 residential customers (in GWh) Allocated amount in USD million 21,920 10,733 11,252 11,651 55.556 * Achievements being higher than allocated amounts for DLI#2 and DLI#4, overachievements at the end of year 2017 will be paid together with achievement of 2018 if reallocation of proceeds is effective. ** Achievements needed in 2018 to get full disbursement. The World Bank Power Distribution Development Program-for-Results (P154805) Approval of the Annual Work Plan for CY 2016 approved by Annual Work DLI#6 PLN Board of Commissioners Plan Allocated amount in USD million 15,000 PLN has collaborated with development partners in the recruitment of an Independent IVA recruited DLI#7 Verification Agent Allocated amount in USD million 1,000 Integration of budgeting with ERP in all Done in all seven DLI#8 Program Wilayahs and distribution Units Wilayahs Allocated amount in USD million 19,000 New Distribution Submission of revised planning guidelines Planning FGD and TOR for Guidelines acceptable to the Bank, to the Director of consultant approved approved by the DLI#9 Regional Business of Sumatera and the by PLN Corporate Director Regional Director's approval of the guidelines planning Business for Sumatera Allocated amount in USD million 12,500 12,500 Integrate of planning software with GIS At least five DLI#10 facilities feeders Allocated amount in USD million 8,332 Note that based on the last supervision mission in November 2018 and assuming approval of the restructuring, disbursement for results in 2018 is estimated to be about USD130 million, which would make the total project disbursement about USD 467 million, representing 93.4% of the IBRD financing.  Changes to the Results Framework — amending the project’s indicators and targets to better reflect: (i) the new and more comprehensive way of capturing SAIDI and SAIFI (PDO indicator); (ii) to take into account better than expected results during the first half of the project and the reallocation of proceeds which will allow PLN to go beyond the original end-of-project targets; and (iii) lower than originally anticipated growth in electricity demand (see Table 3 below) Table 3: Summary of changes in the Results Framework PDO Indicator Baseline Value End-target Value Comment Number of new customers 11,180,000 14,410,000 As mention in the PAD (Footnote 10 page 39) – the number connected of new customers to be connected by PLN over the (number) Program period is higher than the Bank Program target Unchanged Revised (DLI#1) End-target value has been revised to match with the PAD Results Framework SAIDI 1,989 1,650 Since the first year with comprehensive information was (minutes per customer per 2017, it is proposed to use 2017 SAIDI and SAIFI as the Revised Revised year) baseline. Targets for 2018 (1800 for SAIDI and 16.00 for SAIDI 17.81 15.5 SAIFI) and 2019 (End-target) have been discussed and (number of interruptions per agreed with PLN and reflected in the revised Results Revised Revised customer per year) Framework Distribution electricity losses 11.92 10.00 Unchanged per year in the program area Unchanged Unchanged The World Bank Power Distribution Development Program-for-Results (P154805) Intermediate Results Baseline Value End-target Value Comment Additional length of MV 92,716 106,228 End-target has been revised to reflect additional financing distribution lines of USD 20 million for DLI#2. Unchanged Revised constructed End-target in revised RF and for DLI are now the same. (thousands of kilometers) Number of MV feeder 21.22 16.00 End-target has been adjusted to reflect the actual technical interruptions improvements and incentivize for further improvements in (number of interruptions per Unchanged Revised the next two years of the program. Agreed with PLN. 100 km MV network) Additional distribution 80,130 98,338 End-target has been revised to reflect additional financing transformers units of USD 10 million for DLI#4. (number of MV Unchanged Revised End-target in revised RF and for DLI are now the same transformers) Additional capacity of 7,981 9,880 End-target has been revised to reflect additional financing distribution transformers Unchanged Revised of USD 10 million for DLI#4. (MVA) Volume of increased 15,850 18,438 Residential Energy Sales continue to be well below the residential energy sales original assumption (this phenomenon is widespread in all (GWh) Indonesia and not under the control of the Project). The Unchanged Revised target for Energy Sales is proposed to be revised to reflect the current (2016-2018) trend of sales growth within PLN Issue revised planning No Yes Intermediate target (for 2018) has been clarified by guidelines acceptable to the introducing an intermediary target to ensure a clear Bank common understanding of the objectives of the new Unchanged Unchanged Distribution Planning Guidelines All other Intermediate Indicators have not been changed. The low rate of growth in Residential Energy Sales in the period 2016 to 2018 is illustrated in Table 4, with a sharp decline in year-on-year growth from 2016 to 2017 — both in Sumatra (the project area) and Indonesia as a whole. Table 4: Residential Energy Sales by PLN, Indonesia & Sumatra, 2014-2018 INDONESIA SUMATRA INDONESIA SUMATRA Actual Actual Residential Residential Residential Residential energy sales energy sales energy sales energy sales (GWh) (GWh) % Growth Y-on-Y % Growth Y-on-Y 2014 84,086.46 15,850.42 2015 88,682.13 16,889.37 5.47% 6.55% 2016 93,634.63 17,902.42 5.58% 6.00% 2017 94,457.38 18,271.21 0.88% 2.06% 2018 97,035.00 18,923.00 2.73% 3.57% CAGR 2014-2018 3.65% 4.53% CAGR 2016-2018 1.80% 2.81% Sources: [2014-2017] - PLN Statistics 2017, Table 46, p. 50; [2018e, Indonesia] - RUPTL 2019-2028, Table 5.16, p. V-17; [2018, Sumatra] - P-for-R Quarterly Report, Q4-2018, 14 February 2019, p.17. The World Bank Power Distribution Development Program-for-Results (P154805) Addendum 1: Rationale for revised DLIs 1 and 2 (Portal does not keep the rationale for change) To be deleted before disclosure DLI#1 The value at closing has to be revised for two reasons: (1) the value in the system has been miscalculated and does not reflect the PAD (Bank Disbursement Table) nor the Legal Agreement (Schedule 4 – Disbursement-Linked Results) – correct calculation described below; and (2) to reflect the addition of USD 10 million for this DLI following the proposed reallocation. (1) Calculation of end-target: Baseline (number of customers): 11,180,000 Additional customers targeted for initial Bank Financing (USD145.56 million): 1,569,000 End-target before reallocation (original Project): 11,180,000+1,569,000=12,749,000 (2) After reallocation of proceeds Additional customers from the additional USD10 million: 108,000 End-target after reallocation (revised Project): 12,749,000+108,000=12,857,000 DLI#2 The value at closing has to be revised for two reasons: (1) the value in the system has been miscalculated and does not reflect the PAD (Bank Disbursement Table) nor the Legal Agreement (Schedule 4 – Disbursement-Linked Results); and (2) to reflect the addition of USD 20 million for this DLI following the proposed reallocation. (1) Calculation of end-target: Baseline (length of MV distribution lines): 92,716 Additional length targeted for initial Bank Financing (USD55 million): 9,909 End-target before reallocation (original Project): 102,625 (2) After reallocation of proceeds Additional length targeted from the additional USD 20 million: 3,603 End-target after reallocation (revised Project): 106,228 Addendum 2: Explanation of “As % of Total Financing Amount” numbers in Annex 3 The percentage represents the current disbursement per DLI to the DLI allocation (post-restructuring/after reallocation) III. SUMMARY OF CHANGES Changed Not Changed Change in Results Framework ✔ Reallocation between and/or Change in DLI ✔ Change in Disbursement Estimates ✔ Change in Implementing Agency ✔ The World Bank Power Distribution Development Program-for-Results (P154805) Change in Program's Development Objectives ✔ Change in Program Scope ✔ Change in Loan Closing Date(s) ✔ Change in Cancellations Proposed ✔ Change in Disbursements Arrangements ✔ Change in Systematic Operations Risk-Rating Tool ✔ (SORT) Change in Safeguard Policies Triggered ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Implementation Schedule ✔ Other Change(s) ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Year Current Proposed 2016 99,000,000.00 0.00 2017 77,000,000.00 104,000,000.00 2018 108,000,000.00 229,000,000.00 2019 95,000,000.00 117,000,000.00 2020 121,000,000.00 50,000,000.00 OPS_DETAILEDCHANGES_EA_TABLE . The World Bank Power Distribution Development Program-for-Results (P154805) ANNEX 1: RESULTS FRAMEWORK . . Results framework Program Development Objectives(s) The Project's development objective is to increase access to electricity services and to improve the efficiency and reliability oftheir delivery in selected areas of Indonesia. Program Development Objective Indicators by Objectives/ Outcomes RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Increase access to Electricity Services People provided with access to electricity by household 11,180.00 14,410.00 connections (CRI, Number) Rationale: Action: This indicator has been Revised End target value has been revised to match with the PAD. Electricity losses per year in the project area Electricity losses per year in the project area (Percentage) 11.92 10.00 Improve reliability in the Project area System average interruption duration index (SAIDI) in minutes 1,989.00 1,650.00 per customer year (Minutes) Page 9 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) RESULT_FRAME_TBL_PDO Indicator Name DLI Baseline End Target Action: This indicator has been Revised System average interruptions frequency index (interruptions per 17.81 15.50 customer per year) (Number) Action: This indicator has been Revised PDO Table SPACE Intermediate Results Indicators by Result Areas RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Improved Access to electricity Annual work plans approved (on time) (Yes/No) No Yes Percentage of planned capital expenditures realized (Percentage) 82.00 85.00 Distribution lines constructed or rehabilitated under the project 92,716.00 106,228.00 (Kilometers) Action: This indicator has been Revised Distribution lines constructed under the project (Kilometers) 92,716.00 106,228.00 Action: This indicator has been Revised Improved quality of service Number of MV feeder technical interruptions per 100 km 21.22 16.00 (Number) Action: This indicator has been Revised Rationale: Page 10 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target End-target has been changed to reflect the current level of technical interruptions per 100 km and be aligned with the revised DLIs Increased efficiency Number of distribution transformer units added (Number) 80,130.00 98,338.00 Action: This indicator has been Revised Increase in distribution transformer capacity (MVA) (Kilovolt- 7,981,000.00 9,880,000.00 Amphere(KVA)) Action: This indicator has been Revised Improved power consumption by residential customers Increased volume in power sales to residential customers (GWh) 15,850.00 18,453.00 (Gigawatt-hour (GWh)) Rationale: End target has been revised to reflect the lower than originally anticipated growth in electricity demand. Residential Energy Sales continue to be well below the original assumption (this phenomenon is widespread in all Islands and not under Action: This indicator has been Revised the control of the Project). As agreed during the Mid-Term Review mission, the target for Energy Sales will be revised following the proposed project restructuring to reflect the current (2016-2018) trend of residential sales growth within PLN. Institutional strengthening and capacity building PLN collaborated with development partners in the hiring of an No Yes independent verification agent (Yes/No) Integrate budgeting with ERP in participating Wilayahs (Yes/No) No Yes Issue revised distribution planning guidelines acceptable to the No Yes Bank (Yes/No) Page 11 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) RESULT_FRAME_TBL_IO Indicator Name DLI Baseline End Target Integrate distribution planning software with GIS facilities No Yes (Yes/No) Conduct procurement audits for at least 15% of contracts issued No Yes by each procuring unit and share results with the Bank (Yes/No) IO Table SPACE Disbursement Linked Indicators Matrix DLI IN00673079 ACTION DLI 1 Number of new Residential (Household) customers connected Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Number Outcome Yes 145,560,000.00 86.57 (Thousand) Period Value Allocated Amount (USD) Formula Baseline 11,180.00 Project closing 13,177.00 145,560,000.00 Action: This DLI has been Revised. See below. Page 12 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) DLI IN00673072 ACTION DLI 1 Number of new Residential (Household) customers connected Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Number Outcome Yes 155,556,000.00 81.01 (Thousand) Period Value Allocated Amount (USD) Formula Baseline 11,180.00 Project closing 12,857.00 155,556,000.00 DLI IN00673084 ACTION DLI 2 Additional Length of MV distribution lines Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Kilometers 55,000,000.00 100.00 Period Value Allocated Amount (USD) Formula Baseline 92,716.00 Project closing 104,510.00 55,000,000.00 Action: This DLI has been Revised. See below. DLI IN00676760 ACTION DLI 2 Additional Length of MV distribution lines Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Kilometers 75,000,000.00 73.33 Period Value Allocated Amount (USD) Formula Page 13 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) Baseline 92,716.00 Project closing 106,228.00 75,000,000.00 DLI IN00673087 ACTION DLI 3 Number of MV feeder technical interruptions per 100 kilometers Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome No Number 60,000,000.00 70.58 Period Value Allocated Amount (USD) Formula Baseline 21.22 Project closing 21.02 60,000,000.00 Action: This DLI has been Revised. See below. DLI IN00676811 ACTION DLI 3 Number of MV feeder technical interruptions per 100 kilometers Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Outcome No Number 60,000,000.00 70.58 Period Value Allocated Amount (USD) Formula Baseline 21.22 Project closing 16.00 60,000,000.00 Page 14 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) DLI IN00673092 ACTION DLI 4 Additional distribution transformer units Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Number 65,560,000.00 100.00 Period Value Allocated Amount (USD) Formula Baseline 80,130.00 Project closing 94,082.00 65,560,000.00 Action: This DLI has been Revised. See below. DLI IN00676812 ACTION DLI 4 Additional distribution transformer units Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome Yes Number 85,560,000.00 76.62 Period Value Allocated Amount (USD) Formula Baseline 80,130.00 Project closing 98,338.00 85,560,000.00 DLI IN00673094 ACTION DLI 5 Growth in residential energy sales Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Gigawatt-hour Outcome Yes 105,550,000.00 30.92 (GWh) Period Value Allocated Amount (USD) Formula Page 15 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) Baseline 15,850.00 Project closing 21,471.00 105,550,000.00 Action: This DLI has been Revised. See below. DLI IN00676647 ACTION DLI 5 Growth in residential energy sales Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Gigawatt-hour Outcome Yes 55,550,000.00 58.74 (GWh) Period Value Allocated Amount (USD) Formula Baseline 15,850.00 Project closing 18,433.00 55,550,000.00 DLI IN00673095 ACTION DLI 6 FY 2016 Annual Work Plan approved Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Yes/No 15,000,000.00 100.00 Period Value Allocated Amount (USD) Formula Baseline No Project closing Yes 15,000,000.00 Page 16 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) DLI IN00673096 ACTION DLI 7 PLN has collaborated with development partners in the recruitment of an independent verification agent Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Process No Yes/No 1,000,000.00 100.00 Period Value Allocated Amount (USD) Formula Baseline No Project closing Yes 1,000,000.00 DLI IN00673097 ACTION DLI 8 Integrate budgeting with ERP in all Program Wilayahs Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Yes/No 19,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No Project closing Yes 19,000,000.00 DLI IN00673098 ACTION DLI 9 Issue revised planning guidelines acceptable to the Bank Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Intermediate Outcome No Yes/No 25,000,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No Page 17 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) Project closing Yes 25,000,000.00 DLI IN00673099 ACTION DLI 10 Integrate of planning software with GIS facilities Type of DLI Scalability Unit of Measure Total Allocated Amount (USD) As % of Total Financing Amount Output No Yes/No 8,330,000.00 0.00 Period Value Allocated Amount (USD) Formula Baseline No Project closing Yes 8,330,000.00 Page 18 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) ANNEX 2: PROGRAM ACTION PLAN . . PAP_NOT_CHANGE_TBL Action Description Source DLI# Responsibility Timing Completion Measurement Provision of planning software with GIS capability New planning software with GIS and corporate capability used in at least one license Technical Client Due Date 31-Dec-2016 Wilayah Application of planning software for distribution Application of planning software investment Technical Client Due Date 29-Dec-2017 in at least one Wilayah Improving application of GIS data base in at Application of planning software least 5 feeders Technical Client Due Date 31-Dec-2018 in at least one Wilayah Increasing number of skilled and certified PLN staffed certified increased at systems planners Technical Client Due Date 31-Dec-2019 95% at the end of 2019 Review options for loss computations by using alternative methodologies e.g. load flow based calculations and simplified New methodology applied for loss spreadsheet computations (using new methods Technical Client Due Date 30-Jun-2017 planning software) Review and updating power distribution New power distribution planning planning criteria Technical Client Due Date 29-Nov-2019 guidelines approved Identification study of (distribution control upgrades) upgrades needed Technical Client Due Date 30-Dec-2016 Identification study completed Engineering design of distribution Engineering design of distribution control centers control centers upgrades upgrades Technical Client Due Date 29-Jun-2018 completed Page 19 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) Implementation of distribution control centers upgrades Technical Client Due Date 31-Dec-2019 At least one DCC upgraded Post procurement regulations on Post procurement regulations on PLN's website Fiduciary Systems Client Due Date 30-Jun-2016 PLN's website Implementation of upgraded e- procurement system and announcement of award details through e- procurement as per PLN regulations Fiduciary Systems Client Recurrent Continuous Continuous Restrict open book method for less than 3 suppliers in DPT (qualified suppliers in DPT) for Main distribution items (MDUs). No additional items beyond the existing 16 MDU items to be procured using open book method under this Program Fiduciary Systems Client Recurrent Continuous Continuous No direct procurement/dire ct appointment of SOEs and/or PLN's subsidiaries/joint ventures/affiliates under this Program Fiduciary Systems Client Recurrent Continuous Continuous No direct procurement or direct appointment of small or micro industries under this Program for contracts above IDR300 million Fiduciary Systems Client Recurrent Continuous Continuous Page 20 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) Conduct assessment of local manufacturing capacity for MDU Environmental and Social items Systems Client Due Date 30-Sep-2016 Assessment completed Improve accountability/cre dibility of SPKK reporting by integrating Division Head Sumatra's validation of KPIs as reported by the Wilayahs (prior to SPKK reporting) Fiduciary Systems Client Recurrent Continuous Continuous Procurement audits by SPI of 15 percent of contracts awarded by each procuring unit under the Program to be shared with the Bank Fiduciary Systems Client Recurrent Continuous Continuous No contract awards to firms and individuals on PLN's sanctions list and/or on the Bank's debarred/tempora ry suspension lists - upload PLN's black list onto website and electronic portal as per PLN regulation 166/2012 Fiduciary Systems Client Recurrent Continuous Continuous Integrate budgeting with ERP for Wilayahs participating in the Program Fiduciary Systems Client Due Date 31-Dec-2018 Integration completed Roadmap to strengthen existing whistleblower regulations and system, including Technical Client Due Date 30-Sep-2016 Roadmap completed Page 21 of 22 The World Bank Power Distribution Development Program-for-Results (P154805) guarantees to protect whistle blowers Develop procurement performance monitoring framework and report Framework completed and performance as reporting done according to per the framework Fiduciary Systems Client Due Date 30-Jun-2016 framework Undertake environmental and social monitoring and training in environmental health and safety standards for PLN Environmental and Social and its contractors Systems Client Recurrent Continuous Continuous . 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