Document of The World Bank Report No: ICR2701 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-48250 IDA-H6180) ON A CREDIT IN THE AMOUNT OF SDR 25.30 MILLION (US$38.10 MILLION EQUIVALENT) INCLUDING SDR 5.40 MILLION (US$8.10 EQUIVALENT) IN PILOT CRISIS RESPONSE WINDOW RESOURCES AND A GRANT IN THE AMOUNT OF SDR 21.10 MILLION (US$31.90 MILLION EQUIVALENT) INCLUDING SDR 5.00 MILLION (US$7.50 MILLION EQUIVALENT) IN PILOT CRISIS RESPONSE WINDOW RESOURCES TO THE KYRGYZ REPUBLIC FOR AN EMERGENCY RECOVERY PROJECT May 12, 2014 Poverty Reduction and Economic Management South Caucasus and Central Asia Unit Europe and Central Asia Region CURRENCY EQUIVALENTS (Exchange Rate Effective May 12, 2014) Currency Unit = Kyrgyz Som (KGS) US$1.00 = 54.4201 (KGS) FISCAL YEAR January 1 = December 31 ABBREVIATIONS AND ACRONYMS CAS Country Assistance Strategy IFC International Finance Corporation CASA Central Asia South Asia IFR Interim Financial Report CAEWDP Central Asia Energy and Water ISR Implementation Status Report Development Program IMF International Monetary Fund CHPP Combined Heat and Power Plant IHS Individual Heating Sub-station CPS Country Partnership Strategy ISN Interim Strategy Note DFID Department for International JCSS Joint Country Support Strategy Development JEA Joint Economic Assessment DPO Development Policy Operation JEPIG Joint Energy Project EC European Commission Implementation Group ECA Europe and Central Asia Region KGS Kyrgyz Som ECF Extended Credit Facility KJKS Kyrgyzjilkommunsoyuz EEAP Energy Emergency Assistance M&E Monitoring and Evaluation Project MIS Management Information Systems EMP Environmental Management Plan MOE Ministry of Energy ERP Emergency Recovery Project MOEI Ministry of Energy and Industry ERSO Economic Recovery Operation MOF Ministry of Finance ESARIP Electricity Supply Accountability MCB Monthly Cash Benefits and Reliability Improvement Project NEG National Electricity Grid FM Financial Management OSCE Organization for Security and FMM Financial Management Manuals Co-operation in Europe GDP Gross Domestic Product PDO Project Development Objective GOKR Government of Kyrgyz Republic PER Public Expenditure Review IBRD International Bank for PIU Project Implementation Unit Reconstruction and Development RVP Regional Vice President ICB International Competitive Bidding SDR Special Drawing Rights ICR Implementation Completion and Results TA Technical Assistance Report US$ United States dollar IDA International Development Association WTO World Trade Organization IDP Internally Displaced Person Vice President Laura Tuck Country Director Saroj Kumar Jha Acting Sector Director Roumeen Islam Sector Manager Ivailo V. Izvorski ICR Team Leader Evgenij Najdov KYRGYZ REPUBLIC EMERGENCY RECOVERY PROJECT CONTENTS Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph 1. Project Context, Development Objectives and Design ................................................... 1 2. Key Factors Affecting Implementation and Outcomes .................................................. 7 3. Assessment of Outcomes .............................................................................................. 12 4. Assessment of Risk to Development Outcome ............................................................. 19 5. Assessment of Bank and Borrower Performance ......................................................... 20 6. Lessons Learned............................................................................................................ 23 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners............... 23 Annex 1. Project Costs and Financing .............................................................................. 24 Annex 2. Outputs by Component...................................................................................... 25 Annex 3. Economic and Financial Analysis ..................................................................... 26 Annex 4. Bank Lending and Implementation Support/Supervision Processes................. 28 Annex 5. Beneficiary Survey Results ............................................................................... 30 Annex 6. Stakeholder Workshop Report and Results....................................................... 31 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ......................... 32 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ........................... 42 Annex 9. Detailed List of Equipment Purchased By Energy Sector Companies ............. 43 Annex 10. List of Supporting Documents* ...................................................................... 60 MAP A. Basic Information Emergency Recovery Country: Kyrgyz Republic Project Name: Project Project ID: P123044 L/C/TF Number(s): IDA-48250,IDA-H6180 ICR Date: 02/18/2013 ICR Type: Core ICR Lending Instrument: ERL Borrower: KYRGYZ REPUBLIC Original Total XDR 45.54M XDR 46.40M Disbursed Amount: Commitment: Revised Amount: XDR 45.54M Environmental Category: B Implementing Agencies: Cofinanciers and Other External Partners: B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 09/01/2010 Effectiveness: 10/08/2010 10/08/2010 Appraisal: Restructuring(s): July 2013 Approval: 09/30/2010 Mid-term Review: Closing: 12/31/2012 12/31/2013 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Substantial Bank Performance: Satisfactory Borrower Performance: Moderately Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Satisfactory Implementing Moderately Satisfactory Quality of Supervision: Agency/Agencies: Overall Bank Satisfactory Overall Borrower Moderately Satisfactory Performance: Performance: i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments (if Indicators Rating Performance any) Potential Problem Project at any time No Quality at Entry (QEA): None (Yes/No): Problem Project at any Quality of Supervision Yes None time (Yes/No): (QSA): DO rating before Satisfactory Closing/Inactive status: D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) General education sector 5 General energy sector 40 40 General transportation sector 10 10 Oil and gas 50 45 Theme Code (as % of total Bank financing) City-wide Infrastructure and Service Delivery 20 20 Conflict prevention and post-conflict reconstruction 20 20 Macroeconomic management 30 30 Social risk mitigation 30 30 E. Bank Staff Positions At ICR At Approval Vice President: Laura Tuck Philippe H. Le Houerou Country Director: Saroj Kumar Jha Motoo Konishi Country Manager Alexander Kremer Alexander Kremer Sector Manager: Ivailo V. Izvorski Kazi Mahbub-Al Matin Evgenij Najdov / Project Team Leaders: Yuriy Myroshnychenko Afsaneh Sedghi Evgenij Najdov / ICR Team Leaders: Yuriy Myroshnychenko ICR Primary Author: Sati Achath ii F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objective of the project was to assist the government in: (a) strengthening the prospects for macroeconomic stability and the government’s fiscal resilience to meet the priority needs of its emergency recovery and reconstruction program; and (b) restoring and ensuring continuous provision of the basic energy (power/heat/gas) services with a focus on the affected areas so as to support economic output and provide adequate heating to population during the winter. Revised Project Development Objectives (as approved by original approving authority) The objective was not revised. (a) PDO Indicator(s) Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Ensure adequate budget financing for education, health and social Indicator 1 : allowances for the poor, measured as percent of GDP Value quantitative or 10.30 7.00 12.40 Qualitative) Date achieved 01-Dec-2009 31-Dec-2012 31-Dec-2012 Comments (incl. % Exceeded the target, though as identified in the ongoing programmatic achievement) Public Expenditure Review, efficiency of spending could be improved. Restore access to power supply in the cities and rural areas of Jalalabad Indicator 2 : and Osh regions as measured by number of re-connected households Value quantitative or 0.00 19,000.00 19,000.00 Qualitative) Date achieved 01-Dec-2009 31-Dec-2012 31-Dec-2012 Comments (incl. % All consumers are connected to electric power network achievement) Maintain the heat supply availability in Osh in 2010/11 and 2011/12 Indicator 3 : winters at levels equivalent to corresponding periods in 2009 as measured by percentage of available heat output 107% in 2010/2011 153% in 2011/2012 Value quantitative or 133% in 2012/2013 0.00 100.00 Qualitative) comparing with 2009/2010 winter Date achieved 01-Dec-2009 31-Dec-2012 31-Dec-2013 Heat supply from OCHP started on November 3, 2011 in 2011/ 2012 Comments (incl. % winter. The variation in the heat supplies is due to differences in achievement) weather conditions in different years. iii (b) Intermediate Outcome Indicator(s) Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Arrears for teacher and doctor salaries, pensions, social allowances Indicator 1 : (UMB and MSB) Value quantitative or 0.00 0.00 0.00 Qualitative) Date achieved 01-Dec-2009 31-Dec-2012 02-Apr-2013 Comments (incl. % No accumulated arrears. achievement) Indicator 2 : Number of restored gas connections Value quantitative or 0.00 1,224.00 1,235.00 Qualitative) Date achieved 01-Dec-2009 31-Dec-2012 15-Jun-2012 Comments (incl. % Connections of both restored and new houses/ apartments are complete. achievement) Indicator 3 : Fuel supply for Osh CHP (tons) Value quantitative or 23,300 tons (2011) 0.00 17,400.00 Qualitative) 21,700 tons (2012) Date achieved 01-Dec-2009 31-Dec-2012 15-Jun-2012 Comments (incl. % achievement) The technical assistance in support of the public outreach and country Indicator 4 : advisors for CASA-1000 delivered. Value quantitative or See comments N/A Qualitative) below Date achieved N/A 31-Dec-2013 31-Dec-2013 Technical assistance activities were included as part of the 2013 restructuring of the operation. Commercial and legal advisory services Comments (incl. % for Central Asia South Asia Electricity Transmission Project (CASA- achievement) 1000) were delivered, the Ministry of Energy website was constructed and a public information campaign was implemented to explain the key problems facing the sector. iv G. Ratings of Project Performance in ISRs Actual Date ISR Disbursements No. Archived DO IP (US$ millions) Moderately 1 05/13/2011 Moderately Satisfactory 30.84 Unsatisfactory 2 12/28/2011 Moderately Satisfactory Moderately Satisfactory 39.00 3 10/14/2012 Moderately Satisfactory Moderately Satisfactory 54.69 4 04/25/2013 Moderately Satisfactory Moderately Satisfactory 59.56 5 11/14/2013 Satisfactory Satisfactory 70.74 H. Restructuring (if any) A Level 2 restructuring of the project was done in July 2013. (For details see Section 1.7) I. Disbursement Profile v 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal. Since independence in 1991, the Kyrgyz Republic has advanced towards the creation of a liberal market economy with the aim of promoting sustained economic growth and reducing poverty, and has sought international integration through trade and investment, notably by membership of the World Trade Organization (WTO). Between 2000 and 2009, Gross Domestic Product (GDP) increased by 57 percent, the massive fiscal deficit of close to 11 percent of GDP in 2000 was replaced with a largely balanced budget and poverty rates were halved from above 60 percent of the population to 32 percent. Still, inflation remained volatile and the Kyrgyz Republic remained one of the poorest countries in the Europe and Central Asia (ECA) region. Politically, the Kyrgyz Republic did achieve some success in fostering open institutions, while political fractions have remained. Organization for Security and Co-operation in Europe (OSCE) missions had criticized the electoral process over the previous decade as having fallen short of good practice. Elections for parliament in 2007 and for the president in 2009 were found to be deficient: regulations were changed arbitrarily and procedures ignored, sometimes at the last minute, leading to widespread public dissatisfaction with the process and its results. Following a period of economic growth and falling poverty in the opening years of this century, the Kyrgyz Republic was hit hard successively by the rise in food and energy prices in 2007-08, the global financial crisis and ensuing economic recession from 2008, and the disruption in regional energy cooperation. These external shocks had hampered exports, inflows of worker remittances from Kazakhstan and Russia, and overall economic activity. The authorities responded rapidly with a relaxation of fiscal and monetary policies, and with stepped-up external borrowing which resulted in a modest growth of 2.9 per cent in 2009 (down from 8.4 percent in the previous year), but also a move from a balanced budget in 2008 to a 3.5 percent of GDP deficit in 2009. However, in April 2010 anti-government demonstrations flared up in various cities of the Kyrgyz Republic. This was directed at the centralization of power within the presidency, growing corruption and the economic decisions taken without public consultation. The protests culminated in riots in Bishkek and several other cities in Kyrgyz Republic and violent crackdown by the government, the subsequent removal of the president from office, and the formation of an interim administration headed by a coalition of opposition political and civic leaders. The provisional government quickly dissolved parliament and disbanded the constitutional court, which had been seen as too compliant to both previous presidents of the Kyrgyz Republic. Provisional Government Decree No.1 concentrated the functions of the parliament, president and government with the provisional government. This was followed by violent inter-ethnic clashes in June 2010, particularly in the cities of Jalalabad and Osh. The two cities and some neighboring areas erupted in a spasm of ethnically-directed violence and targeted arson. The officially reported death toll was 1 over 300 persons, with unofficial estimates as high as 2,000 people, and nearly 75,000 were displaced. Project Background. The political disturbances in April 2010 and the outburst of ethnic conflict in June 2010 amounted to a significant shock to the economy. The events led to loss of life and injuries to persons, damage to infrastructure, destruction of private and public property, and weakening of confidence within the private sector. This had affected investment, including foreign direct investment, adversely impacted trade and services stemming from lack of security and several key border closures, seriously disrupted economic activity, increased fiscal pressures, and resulted in a significant loss in income per head. Wage income declined by around 4 percent in real terms in the second quarter of 2010 and private consumption contracted by around 2 percent. GDP growth collapsed and by mid-2010, the economy was projected to contract by 3.5 percent for the year (by 4.6 percent excluding gold). 1 These clashes also created new and deep social tensions and disrupted peace and stability in the country. In the absence of a large scale and coordinated response from the international community, which also included the Emergency Recovery Project, the situation could have easily reverted to the turmoil seen earlier in the year with disastrous consequences over macroeconomic stability and living standards. Table 1: Selected Macroeconomic Indicators (In percent of GDP unless otherwise noted) 2008 2009 2010 2011 2012 2013 Act. Act. Act. Act. Act. Prel. Real sector GDP, in US$ million 5,131 4,683 4,794 6,199 6,603 7,225 GDP per capita, in US$ 972 864 875 1,120 1,182 1,280 GDP growth, in percent 8.4 2.9 -0.5 6.0 -0.1 10.5 Investment 20.2 22.9 23.9 24.0 26.2 25.6 Fiscal accounts* Revenues and grants 29.9 32.1 30.5 31.8 33.8 33.9 Expenditures 29.3 36.1 36.6 36.3 39.0 37.6 Balance 0.0 -3.5 -6.3 -4.6 -5.3 -4.0 Public debt 48.5 58.1 59.7 49.4 49.0 47.7 External accounts Exports of goods and services 54.0 54.5 52.7 54.7 54.7 55.1 Imports of goods and services 92.8 78.9 81.7 82.3 99.6 95.9 Current account balance -15.5 -2.5 -6.4 -6.0 -15.3 -13.5 External debt 66.6 84.1 88.4 76.7 80.3 84.4 Prices and exchange rates Inflation, period average 24.5 6.8 7.8 16.6 2.8 6.6 Exchange rate, KGS/US$, eop 39.4 44.1 47.1 46.5 47.4 49.2 Source: Bank staff calculations based on data from national authorities. */ Revenues and expenditures do not add up to the deficit due to statistical discrepancies. 1 The Kyrgyz Republic: Joint Economic Assessment. Asian Development Bank, International Monetary Fund and the World Bank, July 2010. 2 In light of budgetary pressures, the government took prompt action to protect certain expenditure categories from fiscal cuts, focusing on social sectors (health, education and social assistance) and wages. This included means-tested monthly cash benefits for children from the poorest families; monthly cash payments extended to individuals unable to work and otherwise not entitled to pensions; other unemployment benefits; social transfers to the disabled, the elderly, orphans and war veterans; pensions; continued investment in public health care; routine education expenditure; social services; social insurance; salaries of civil servants; and expenditure on utilities. In addition, rehabilitation of the damaged property and infrastructure added to fiscal costs. As such, there was no accumulation of arrears in any categories of the protected expenditures, though the fiscal balance rapidly deteriorated and was estimated to widen to an unsustainable level of around 12 percent of GDP for the year, underlining the need for emergency support to keep fiscal accounts solvent. The 2010 developments also put further pressure on the already difficult situation in the energy sector thus increasing risks of collapse in supply over the winter of 2010/11. Funds needed for fuel for thermal plants were not secured as the country was unable to export power during the summer due to the turmoil while urgent investments were needed to bring the generation equipment to minimal service levels and to restore connections damaged during the unrest. The Joint Economic Assessment (JEA) prepared by the international financial institutions in coordination with the government established a framework for international assistance to the Kyrgyz Republic which was presented at a Donors’ High Level Meeting on July 27, 2010. During the meeting donors pledged a total of US$1.1 billion for the next 30 months in support of recovery and reconstruction in the Kyrgyz Republic. The JEA identified three major areas for external support: (i) essential public expenditures and services for the country; (ii) additional social needs including resettlement and integration of internally displaced and affected populations in the south; and (iii) rehabilitation needs for critical infrastructure destroyed or damaged including energy, transport and public buildings, especially in the south. The Bank’s three-pronged response comprised coordination of a multi-donor effort to assess impact and a conference of external partners; adjustment of the existing Bank portfolio to restructure and reallocate funds where possible; and initiation of new operations, including the Emergency Recovery Project (ERP). The concerted efforts of the broader international community, including the World Bank, the International Monetary Fund (IMF), Asian Development Bank (ADB) as well as bilateral support from Russia and Turkey, helped mitigate the impact of the crisis. As a result, GDP contracted by 0.5 percent for the year, while the fiscal deficit was a more manageable 6.3 percent of GDP and was fully financed. The ERP was processed under the Bank’s streamlined and simplified procedures for extending emergency assistance. It was front-loaded, taking advantage of a retroactive component applicable to emergency operations that could provide financial support directly to the budget to strengthen the fiscal position of the government in financing its high priority expenditures particularly in the south of the country. The project in the 3 amount of US$70 million was approved in September 2010 and declared effective in October 2010, less than three months following the start of identification. Rationale for Bank assistance. The Bank’s response was structured in alignment with the government’s overall response strategy, taking into account the emergency nature of the needs of the country. The Bank’s strategy of emergency support was built upon its traditional strengths: diagnosis of the impact of the crisis and an assessment of emergency needs; promotion of cooperation amongst donors to ensure adequate financing of the emergency needs; and its own financial and advisory contribution to support recovery and rehabilitation. The project was fully consistent with the government emergency strategy prepared and presented at the donors meeting along with the JEA. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The objective of the project was to assist the government in: (a) strengthening the prospects for macroeconomic stability and the government’s fiscal resilience to meet the priority needs of its emergency recovery and reconstruction program; and (b) restoring and ensuring continuous provision of the basic energy (power/heat/gas) services with a focus on the affected areas so as to support economic output and provide adequate heating to population during the winter. Key Indicators were: • Ensure adequate budget financing for education, health and social allowances for the poor, measured as percent of GDP • Restore access to power supply in the cities and rural areas of Jalalabad and Osh regions as measured by the number of re-connected households • Maintain the heat supply availability in Osh in 2010/11 and 2011/12 winters at levels equivalent to corresponding periods in 2009/10 winter as measured by percentage of available heat output 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The objective was not revised. An additional intermediate outcome indicator was added as part of the level two restructuring in 2013 to reflect the addition of provision of technical assistance activities under the project. Namely, the scope of Component 2 was expanded to include limited technical assistance to support the implementation of energy sector reforms. Additionally, the technical assistance financed country advisors to support the government in their negotiations of the CASA-1000. Both measures would contribute to the long-term reliability of power supply and financial sustainability of the energy sector and thus fall under the development objective of the ERP. 4 1.4 Main Beneficiaries The expected beneficiaries of the project included: • Government of Kyrgyz Republic (GOK) which would be reimbursed for Eligible Expenditures made prior to the date of the Financing Agreement, but on or after November 1, 2009, and would receive financing for critical expenditures in the education sector. The reimbursement for eligible purchases and financing of education sector expenditures strengthened the government’s fiscal resilience to finance high priority expenditures for reconciliation, recovery and reconstruction, especially in the conflict-affected cities of Jalalabad and Osh. • Affected people who would receive basic energy services (power/heat/gas). • Teachers, doctors, and other budget funded workers who would receive salaries without arrears. • The electricity and heat consumers of power generation and distribution companies as well as thermal power plants and district heating companies which would be assisted with access and rehabilitation of the system. • Students who would receive textbooks and teachers and school administrators who would receive furniture, computers and supplies; furthermore, the ERP financed publication of books in Uzbek language which is expected to have contributed to better access to education for children from that minority. 1.5 Original Components (as approved) Component 1. High Priority Expenditures Pertaining to Emergency Recovery and Reconstruction (US$35 million). Under this component, the operation would finance provision of Eligible Essential Goods and Commodities, as set forth in an agreed positive list, to support government’s high priority expenditures and provide the necessary liquidity needed to contribute to the implementation of the government emergency recovery program. The positive list agreed upon included: fuels including diesel, gas, fuel oil, office furniture and IT equipment for government entities that were destroyed during the April events, school textbooks, furniture, equipment and supplies, telecommunications equipment, trucks and their spare parts, and critical medical equipment. These were essential goods and commodities that were required for the Kyrgyz Republic emergency recovery and reconciliation program. This component included a maximum of US$28 million for retroactive financing of expenditures incurred and payments made no earlier than 12 months prior to signing of the project agreement. The retroactive financing was expected to provide rapid support to the Kyrgyz budget to reduce threats to macroeconomic stability and fiscal solvency by providing financing for budget expenditures as well as foreign currency to stabilize the foreign exchange market. It was also envisaged as a part of a response by the broader international community, including the International Monetary Fund (Rapid Credit Facility in amount of around US$34 million), Asian Development Bank and bilateral support. 5 An additional US$5 million were spent on financing critical learning tools and materials for the education sector, including publishing of textbooks and purchasing of school computers and furniture. Component 2. Rehabilitation and Repair of Energy Infrastructure and Networks (US$35 million). The component would restore the damaged electricity, heat, and gas distribution systems with focus on Jalalabad and Osh regions and would consist of the three main sub-components: (i) restoring power, heat and gas supply to affected areas through the urgent repair and rehabilitation of damaged infrastructure and networks for electricity, heating and gas supply, (ii) carrying out the procurement of fuel for thermal power plants and district heating systems, (iii) rehabilitating and repairing power generation and distribution systems, and (iv) completing activities approved for financing under the Financing Agreement for the Energy Emergency Assistance Project (Credit No. 4524-KG and Grant No. H429-KG) relating to the rehabilitation of the electricity and heat generation facilities of the State Power Plants Company. 1.6 Revised Components The components were not revised. However, technical assistance was added to the scope of Component 2. For details see Section 1.7. 1.7 Other significant changes Extension. In March 2013, the project’s closing date was extended retroactively by 12 months from December 31, 2012 to December 31, 2013 to allow for completion of procuring equipment to improve reliability and security of power supply. 2 Project Restructuring. A Level 2 restructuring of the project was completed in July 2013 to allow for provision of advisory support to the CASA-1000 and technical assistance in support of the energy sector reforms. The restructuring was made possible by savings on the planned activities. As a result, ERP’s focus shifted somewhat from a crisis response operation to also provide technical assistance for critical support for energy sector reform and the CASA-1000. Given the relevance of the activities to ensuring sustainability of ERP outcomes and the lack of other instruments available to remain engaged (as the new CPS was only approved in mid-2013), the management decided to include the activities under the ERP. A new results indicator to monitor progress under these activities was also added. 2 The extension was prepared prior to the original closing date of the ERP in response to a government request to extend the closing date and add technical assistance activities to the scope of activities under component 2; however, it required a countersignature from the Kyrgyz authorities which was not received in time to effectuate the extension due to lack of clarity if Parliament approval would be required. Consequently, the Bank proceeded by first retroactively extending the operation and afterwards processing a level 2 restructuring to add new activities. 6 A second Level 2 restructuring was processed in December 2013 to cancel US$1.3 million (SDR0.9 million) from the credit account of the ERP due to cost savings on some activities under the project. This amount was reallocated to other World Bank projects planned for the Kyrgyz Republic. 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry Quality at Entry. The project’s quality at entry was satisfactory. Consider the following: • The project design was simple and straight forward and it reflected the country’s urgent needs as assessed by the JEA. The elements of each component reflected the analysis of the Bank’s relevant teams and their judgment in the selection of goods to be procured (within the time limitation and following the Bank procurement guidelines) which would be most effective in addressing the emergency needs. • Given the multi-faceted nature of the energy component (Component 2), a separate Joint Energy Project Implementation Group (JEPIG) was set up at the Ministry of Energy (MOE) using resources of existing energy sector Project Implementation Units (PIUs) at the Joint Stock Company “National Electricity Grid” (NEG). Component 1 was implemented by a PIU under the Ministry of Finance (MOF) with some experience in implementing World Bank projects. • In view of the limited preparation time and capacity of the JEPIG and the MOE, it was planned to implement investments in phases. The initial phase included activities and goods that were clearly defined and for which procurement could start immediately. In parallel, development of the subsequent activities was undertaken to initiate the procurement process. Risk Assessment. The overall risk rating for the project during implementation was high. The project faced country level risks, as well as risks specific to implementation of the project and achievements of its objectives, given the country’s fragile social, political and economic situation. There were various measures that were expected to be adopted that would mitigate risk, including those relating specifically to sub-components. Lessons of earlier operations taken into account: The project drew on the key lessons from the Bank’s past emergency operations. These included: • Keep project design and project activities simple to ensure that the requirements for implementation are consistent with existing capacity on the ground, so that rapid results can be achieved under emergency conditions. • Experienced and tested implementation agencies have proven most useful for emergency operations to achieve quick results. Leveraging existing implementing structures which already meet Bank’s fiduciary standards and have good knowledge of Bank procedures (like MOF PIU & JEPIG in this project) will be 7 critical to achieving quick results; the project was built on the existing structures such that the staff in charge of project implementation were fully operational upon project effectiveness. • Substantial hands-on Bank involvement has been important for effective implementation of emergency projects. The project intended to have frequent supervision missions, frequent procurement post-reviews and close Bank country office staff involvement to help mitigate risks to its implementation. • It is important to have a design that accommodates the use of funds to jump-start implementation of the critical activities either from the government’s own resources, or other sources, even before the project becomes effective; the project thus incorporated retroactive financing. Adequacy of government commitment. The interim administration responded to the events of April and June, 2010 with efforts at institutional reform, the introduction of a parliamentary system of government, an emphasis on fiduciary safeguards as part of an anti-corruption program, efforts to address the needs of the conflict-affected, commitment to protect essential social expenditure, attempts to strengthen confidence in the private sector, and efforts at ethnic reconciliation through a participatory approach. In light of budgetary pressures, the government took prompt action to protect certain expenditure categories from fiscal cuts. This included means-tested monthly cash benefits (MCB) for children from the poorest families; monthly cash payments extended to individuals unable to work and otherwise not entitled to pensions; other unemployment benefits; social transfers to the disabled, the elderly, orphans and war veterans; pensions; continued investment in public health care; routine education expenditure; social services; social insurance; salaries of civil servants; and expenditure on utilities. The interim administration responded to the June events by establishing an inter-agency Commission for the Assessment of Damages to assess the extent of destruction to property, livelihood and economic activity in the south. To respond to the impact in the south, a newly established State Directorate for Rebuilding and Reconstruction of Osh and Jalalabad, headed by a vice-prime minister, was established to lead the government’s reconciliation, recovery and reconstruction efforts in the south. The program for recovery centered on the restoration of livelihoods and the reconstruction of housing and of commercial enterprises and markets which would provide critical support to the economy and create jobs. 2.2 Implementation Factors affecting implementation. As an emergency project, the ERP was prepared under an extraordinary situation in a short period of time. The implementation of parts of the program, however, was delayed due to several factors as mentioned below: (i) The main reason for the slow implementation of the project was related to procurement issues. The capacity to prepare technical specifications and to carry out bid evaluation was inadequate in the Energy component. While the 8 PIU in charge of Component 2 was familiar with Bank procedures, for most of Energy companies these were the first major International Competitive Bidding (ICB). There was inadequate competition and contract failures leading to re-invitation which led to delays and eventually to extension of the project’s closing date. (ii) The implementation of Component 2 was initially affected due to the delayed conclusion of the Subsidiary Credit Agreements between the MOF and the energy companies which were the final recipients of the project funds. While the decentralized approach to project implementation might have increased the project ownership by final beneficiaries, it also added to the complexity of the implementation arrangements. (iii) Implementation was also affected by the uncertainties arising from the Parliamentary election on October 2, 2010 and the long process of formation of the new government thereafter. (iv) Another factor which affected implementation was the inability of winning bidders to provide bank guarantees. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization M&E design. Being an emergency project, a simplified results framework was established and three PDO indicators and four intermediate results indicators were developed to monitor the performance of the project. Specific and clear targets for each year were developed during project preparation. Including an indicator indicative of macroeconomic conditions may have been appropriate to track to progress in strengthening prospects for macroeconomic stability. M&E implementation. With the support from the Bank’s task team, PIU was regularly collecting data from the energy and gas companies as well as from the MOF according to both the technical and financial indicators developed during project preparation. These data were closely monitored and the actual figures were compared with the target values. M&E utilization. Appropriate data collected by PIU was evaluated and used for decision- making on certain activities. For example, project funds were reallocated based on the data collected. On the energy side, these data were useful for analyzing the supply of fuel to thermal energy stations in the south. 2.4 Safeguard and Fiduciary Compliance Safeguard Compliance. Based on the discussions and site visits conducted by the Bank’s task team as part of the regular supervision activities, as well as the findings of a 2013 safeguards mission, it was concluded that project activities were in compliance with the provisions of the project Environmental Management Plan (EMP). The EMP environmental requirements were followed by the implementing entities and by Oshelectro, Jalalabatelectro, and by Bishkek district heating company and there were no 9 complaints on the implemented civil works from environmental authorities or local population and thus no need for any corrective measures. Fiduciary Compliance. The project complied with fiduciary covenants during implementation. Internal control arrangements were in place, and adequate financial management and procurement systems at the PIU level were maintained. However, there were delays in submitting audit reports and the audits had pointed out a few procurement issues on which the PIUs took follow-up measures. In addition, capacity in the power companies which were final beneficiaries for some of the component 2 activities was generally lower. 2.5 Post-completion Operation/Next Phase Transition arrangements. The transition arrangements for maintaining the achievements of the project appear to be adequate, as demonstrated by the following measures. • Political: The provisional government that took office in the spring of 2010 drafted a new constitution in a participatory manner. Presidential system has been transformed into a parliamentary one. Parliamentary elections were held in September 2010 and presidential elections in October 2011. Both elections were deemed to be free and fair. There were two changes of government since (in August 2012 and April 2014) which were done expeditiously and in democratic processes. These frequent changes in government, however, highlight the fragile political environment in the country. • Technical: The project has contributed significantly to improve technical reliability of the energy system. For example, distribution substation and lines equipment procured under the project has contributed in reducing technical losses. Billing and collection of energy and gas companies have been improved because of the installation of power and gas meters. • Institutional: The government is trying to improve public services and given the current political environment and new division of power between the government, parliament and the president, institutional arrangements could eventually evolve and be adequate. For example: o In the energy sector, Electricity Supply Accountability and Reliability Improvement Project (ESARIP) aims to reduce losses and revenue leakages by establishing a transparent accountability framework for the power and financial flows in Severelectro, which would be used as a model by the other three distribution companies in the country. o In order to ensure that the provision of technical assistance to the Kyrgyz authorities for the CASA-1000 project continues after the closing date of the project, this activity will be taken over by the Central Asia Energy and Water Development Program (CAEWDP) activity. • Financial: At the sector level, after ERP, the Bank has a sizeable presence through its Public Expenditure Review (PER) which analyzed efficiency of 10 public expenditures in number of sectors, including education, health, social protection etc. PER note for the energy sector (later expanded to a broader power sector review) also assessed the financial stance of the energy sector companies and the consolidated sector, the quasi-fiscal deficit and offered specific recommendations on improving management of expenditure (including prioritization of sector investments and their balancing with maintenance needs), increasing power sector revenues and enhancing operational efficiencies. At the macro level, the International Monetary Fund (IMF) has broadly endorsed the country’s macroeconomic policies and supported these by an Extended Credit Facility (ECF). The ECF was approved in June 2011 to support economic recovery in the short term and a stronger, sustained and inclusive growth in the medium term by promoting gradual fiscal consolidation and strengthening of the financial sector resilience. The authorities have in general met the targets of the ECF resulting in slight improvement in the country’s macroeconomic fundamentals. The fiscal deficit in 2013 was reduced to around 4 percent of GDP, with the medium-term framework envisaging a further reduction in the deficit to below 3 percent by 2016. Public debt has fallen to below 50 percent of GDP (down from close to 60 percent of GDP in 2010) and liquidity buffers have improved. • Staffing and management: Wages in public sector are too low and the staff turnover is still high. The government will need to reform public sector in terms of human resources management and public sector wages. The 2013 civil service pay reform is a step in the right direction, but it would have to be effectively implemented over the medium term. Follow-on projects. The Economic Recovery Operation (ERSO), a single tranche development policy operation approved in 2011, provided budget financing to the Kyrgyz Republic after the 2010 conflict and supported critical reforms in the areas of public sector governance, transparency, and accountability. The programmatic series of two Development Policy Operations (DPOs) was launched in 2012 to support the efforts of the Kyrgyz authorities to promote growth through improving public sector governance and enhancing the business environment. The first Programmatic Development Policy Operation (DPO-1), in the amount of US$25 million, was approved in July 2013. It supported early reform steps in the areas of governance, public financial management, private sector development, judicial reform, and energy. Under the DPO-1 the authorities developed a comprehensive action plan to improve transparency, accountability, and governance in the energy sector. Under the second operation in the programmatic series (DPO-2), negotiated on April 7-8, 2014 in the amount of US$25 million, the energy sector-related prior action supported greater transparency of the public sector entities in the energy sector, by publication of the monthly balances on their accounts, quarterly performance indicators and annual audited financial statements. 11 In addition, World Bank interventions in the human development (HD) sector (Human and Social Protection Project, Education Sector Reform etc.) also helped ensure resources are allocated to social sectors. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation Relevance of Objective. The objective of the ERP was and remains relevant, timely and appropriate to the needs of the country’s social and economic development. The objective was consistent with the Bank’s Interim Strategy Note 3 (ISN), which places substantive emphasis on countervailing the key causes of conflict through its focus on governance and accountability, support for social services and infrastructure, and protection of essential spending during the process of fiscal consolidation. It is also consistent with the FY13-17 Country Partnership Strategy (CPS) which aims at improving governance, focusing on: (i) public administration and service delivery; (ii) business environment; and (iii) management of natural resources and infrastructure. The objective is also in line with the 2013-2017 National Sustainable Development Strategy (NSDS) of the Government of the Kyrgyz Republic (GOKR) which provides the strategic framework for the achievement of objective of establishing a democratic state with stable political system, dynamic economic growth and growing incomes of its citizens in the next five-year period. Relevance of design and implementation. The core design of the project and implementation arrangements remain highly relevant. The project activities were instrumental in achieving the PDO. Likewise, despite suffering delays initially, implementation process of ERP had also turned out, eventually, to be effective and efficient for achieving the project objective. Rating: Considering these factors, the relevance of objective, design, and implementation is rated High. 3.2 Achievement of Project Development Objectives Satisfactory. The project was successful in achieving its objective. The highlights of the project’s achievements are given in the following Table: 3 The ISN was discussed by the Bank’s Board of Executive Directors in August 2011. 12 Indicator Target Actual Value Ensure adequate budget financing for 7.00 12.40 education, health and social allowances for the poor, measured as percent of GDP Restore access to power supply in the cities and 19,000 19,000 rural areas of Jalalabad and Osh regions as measured by number of re-connected households Maintain the heat supply availability in Osh in 100.00 107% in 2010/2011 2010/11 and 2011/12 winters at levels 153% in 2011/2012 equivalent to corresponding periods in 133% in 2012/2013 2009/2010 winter as measured by percentage comparing with of available heat output 2009/2010 winter Arrears for teacher and doctor salaries, 0.00 0.00 pensions, social allowances (UMB and MSB) Number of restored gas connections 1,224 1,235 Fuel oil supply for Osh CHP (tons) 17,400 23,300 tons in 2011 21,700 tons in 2012 The details of the project’s major outcomes and achievements are as follows: Component 1 Retroactive payment. US$29 million was used as retroactive payment towards gas purchases from Uzbekistan to ensure availability of supplies for winter heating and to free up budget resources for the government to finance high priority expenditures. This money was disbursed soon after the start of the project, in early October 2010. The provided financing, together with the assistance of other donors, was critical in meeting the financing needs of the budget and preserving fiscal solvency. The rapid budget support component of the ERP added around 0.6 percent of GDP to government revenues, which together with the 0.7 percent of GDP provided by the IMF covered a significant part of the 2010 budget financing needs and kept public debt below 55 percent of GDP (and also mostly on concessional terms). Follow-on projects by the Bank (ERSO) and other IFIs (Extended Credit Facility by the IMF) provided support in 2011. Financing purchase of textbooks, furniture, and computer for schools. The details are as follows: • Prepress and replication of textbooks for the schools: 27 textbooks with total circulation of 1.05 million copies were printed. The textbooks covered grades 4– 11 with Kyrgyz, Russian and Uzbek languages of education. Another 20 textbooks with total circulation of about 0.97 million copies were printed for school grades 6–11 with Kyrgyz, Russian and Uzbek languages of education. The textbooks were distributed to 2,201 schools. • School Furniture for regional schools: 8,155 items of school furniture were provided to 112 schools in the Kyrgyz Republic, including: Osh region – 19 schools, 1,584 items; Jalal Abad region – 22 schools, 1,616 items; Batken 13 region – 10 schools, 688 items; Talas region – 12 schools, 864 items; Naryn region – 12 schools, 736 items; and Chui region – 37 schools, 2,667 items. • Computer equipment for regional schools: Computers were provided to 160 schools in the Kyrgyz Republic, in`cluding: Osh region – 100 schools, 600 sets; Jalal Abad region – 27 schools, 162 sets; Batken region – 17 schools, 102 sets; Talas region – 1 school, 6 sets; Naryn region – 5 schools, 30 sets; and Chui Region – 10 schools, 60 sets. Component 2 Purchasing and installing equipment. The project financed purchasing and installing the following: 6/0.4 kV and 10/0.4 kV complete distribution substations and distribution transformers of different capacity, 35/6 kV 10,000 kVA transformer, motorized vehicles, switchgears for protection and control, reinforced concrete poles, cables, wires, power and gas meters, fuel oil for Osh CHP and boiler houses of Kyrgyzjilkommunsoyuz (KJKS), and other essentially needed materials, equipment, and spare parts; construction machinery and equipment such as cranes, excavators, bulldozers. Renovation of Individual Heating Sub-stations (IHSs). Bishkek city district heating company installed about 200 new individual heating substations for better and more efficient supply of heat and hot water to consumers. The new substations provide significant reliability and quality of heat supply and are located in the apartment block basements. Rehabilitation of heating pipelines. The project supported rehabilitation of about 10 km of selected segments of the distribution district heating network by replacing the most severely damaged, corroded and leaking pipes with modern pre-insulated pipes. Rehabilitation and/or construction of transmission lines. In Osh and Jalalabad regions, the power distribution companies rehabilitated a number of segments of existing electrical distribution lines (by replacing old wood poles with new concrete ones and replacing old wires with new of higher section), as well as constructed new short lines in the newly constructed areas of the cities (both underground and overhead). Construction of a new electrical substation. Under the project Oshelectro constructed a new 35/10 kV substation which is relatively small in size (about 30x30 meters) and located within the existing right-of way corridor. All construction activities have been coordinated with the city authorities and have been done based on design documents, approved by all interested parties, including environmental authorities. Installation of new transformers. Oshelectro and Jalalabadelectro, as well as other two power distribution companies in the Kyrgyz Republic, have installed a number of new distribution substations. They have been installed in the overloaded segments of distribution systems and new residential areas to ensure a reliable energy supply to the local population. Replacement of old transformers. A number of old power distribution transformers were replaced with new ones with increased capacity. 14 Power generation. To ensure reliable power generation, high voltage facilities and parts were delivered to the Naryn River HPPs. CASA-1000 consultants. As part of the ERP, the MOE hired two international consultants (legal and commercial) and one local legal consultant to serve as country advisors for the Government of the Kyrgyz Republic in preparing for the negotiations on core CASA-1000 project agreements. Both legal and commercial advisors worked closely with the members of the Kyrgyz Republic CASA-1000 working group and the Kyrgyz members of the CASA-1000 Intergovernmental Council. Advisors provided timely advice on how to better structure the Core Agreements and adequately protect the country's interests as well as in better understanding the CASA-1000 financial model, accurately calculating the costs of Kyrgyz power exports and estimating of potential export prices. PR campaign and Website. The ERP financed a public relations company and web- designer in an attempt to develop and implement an effective public relations campaign explaining the key problems facing the sector and raise public awareness. Key staff of the MOE and those from sector entities were trained on communicating key messages based on the results of the undertaken survey to various audiences. A regular practice of organizing bi-weekly meetings with the media representatives was established with the major reform issues from the Action Plan on reforming the energy sector being discussed. Finally, a new-website was developed for the MOE which is more user-friendly and contains important documents concerning the sector and its performance (including financial statements of the companies, key performance indicators, and statements from special accounts). A technical audit of the project was conducted in December 2013 by an independent auditing firm. It covered 46 contracts out of a total of 144 fixed assets procurement contracts implemented under the project. The auditor's main comments were related to lack of clarity in roles and responsibilities; delayed execution of contracts, payments and installation of procured equipment; and validation of quality of supplied goods. Management of the Ministry of Energy and Industry and its PIU responded to all key points raised in the audit report by providing clarifications about division of responsibilities between the Ministry/PIU and the energy companies that received the equipment procured under the project, measures taken in the case of supplier's failure to deliver on time, established practices with respect to verifying quality of goods and scheduling installation of equipment. 3.3 Efficiency The ERP was prepared under streamlined procedures and was part of a broader response to the crisis needs of the Kyrgyz Republic (both budgetary and energy supply system) thus making it difficult to quantify and directly attribute a definite part of any improvement observed to the project. Still, the ERP satisfied the three key criteria that the economic analysis addresses, namely: i) contributing to the country’s socioeconomic 15 development, ii) having a rationale for the public sector provision, and iii) leveraging the value added of the Bank’s support. The retroactive financing provided under component 1 assisted the authorities in preserving macroeconomic stability and financing high priority expenditures during the crisis period. This allowed the authorities to support people’s incomes at times when labor income and remittances were affected thus improving living conditions and stimulating economic activity. With wages falling in real terms during the crisis, it was higher social spending (up 47 percent) and timely payment of government obligations that preserved disposable income and supported consumption. Regarding component 2, by improving availability and reliability of power and heat supply, and reducing the frequency of outages, the project, together with the other actions implemented in the system, helped to reduce economic losses. According to the regulatory department, the losses in the power distribution network declined from 26.7 percent of electricity supplied in 2010 to 17.9 percent in 2013 thus reducing the quasi-fiscal deficit. However, sustainably reducing the quasi-fiscal deficit will require adjusting prices closer to cost-recovery. In addition, the number of power outages declined by almost a quarter between 2011 and 2013, helping Kyrgyz businesses. According to BEEPS, Kyrgyz manufacturing companies experienced, on average, 10.8 power outages in 2013 costing firms that experienced power outages 4.1 percent of annual sales. The reduction in sales lost due to power outages could be as high as 1.5 percent of annual sales. Furthermore, according to BEEPS, electricity is no longer the biggest obstacle to doing business in the Kyrgyz Republic (currently ranked as the 5th biggest obstacle) and at the same time, businesses reported lower losses due to outages. Lower power outages are also very important for the population, as electricity is the major source for lighting, cooking and heating. This is especially true for the poor; according to the Integrated Household Survey (2012) one-third of the poor use electricity for heating and over three-quarters use it for cooking. In 2012, 21.1 percent of households experienced power outages once a month or more frequently compared to a very high 38.6 percent in 2010. 3.4 Justification of Overall Outcome Rating Rating: Satisfactory. Relevance. As explained in Section 3.1, the relevance of objectives, design, and implementation is rated as High. Achievement of PDOs. As explained in Section 3.2, the project has many achievements to its credit. Thus, achievement of the PDO is rated as Satisfactory. Based on the above factors and the discussion in sections 3.1 and 3.2, the overall outcome is rated Satisfactory. 16 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development Poverty Impacts. The GDP decline and the turmoil of 2010 increased the poverty rate in the Kyrgyz Republic by 2 percentage points to 33.7 percent of the population. Still, the broad support effort, which included the ERP, helped avert a much worse scenario for the Kyrgyz Republic in 2010 and is expected to have had a significant poverty impact. With a semi- elasticity of growth on poverty of around -0.7 during 2000-2012, avoiding the scenario of 3.5 percent contraction in GDP in 2010 (mid-2010 projections in the JEA) may have helped around 2 percent of the population avoid falling into poverty. 4 Preserving fiscal solvency in the immediate aftermath of the turmoil helped that authorities meet their obligations on wages and social payments and support purchasing power of the population. In addition, restoring power connections and upgrading of the stability of the power system is likely to have contributed to improved living conditions and preserved jobs, including for the poor. More specifically: • The project facilitated in restoring the business of entrepreneurs and business people who suffered financial losses and damaged properties. The government was able to utilize project funds to support and compensate those affected people. • The project benefited staff employed in public administration and recipients of social assistance by allowing the government to remain solvent and timely pay wages and benefits. • Provision of improved power supply has enabled business people and entrepreneurs to generate more income. • The project helped poor people to receive a more reliable heating and power supply in those areas which were hard hit by the conflicts. As noted in the economic analysis section, the frequency of outages declined significantly between 2010 and 2013. • The project also provided services to schools which would benefit children in terms of receiving better education, which in turn will have a positive impact on poverty alleviation in the long run. Gender Aspects. The project did not have a specific gender component; however, the activities extended financial support also to women entrepreneurs who were adversely affected by the conflicts and enabled them to restore their income earning capacity. The government’s social programs financially assisted women who lost their husbands or 4 This implies that a 1 percent growth in GDP per capita associated with reduction of the headcount poverty rate by 0.7 percentage points; based on authors’ calculations. 17 breadwinners because of the conflicts. In addition, restoring electricity and heating supply benefited women and children staying home, especially during winter season. Social Development. The project financed a number of activities that are critical for social development. Around US$28 million financed under Component 1 has assisted the government to meet its social obligations such as social security benefits, allowances to unemployed people, and payment of salary to government employees. In addition, the remaining funds were spent to improve access and quality of education as well as improve the energy sector performance, both sectors critical for social inclusion. Analyses conducted subsequently on the conflict potential in Kyrgyz Republic have shown that the country’s situation has improved compared to 2010. For example, in November 2010, only 30 percent of the population felt the country was going in the right direction; this percentage increased to 57 percent in February 2012. Even in the South, more than 50 percent feel that the country was moving in the right direction. Also, 36 percent of the population reported an improved economic situation in February 2012 compared to 19 percent in May 2011. By allowing the government to finance its social obligations as well as helping restore energy supply, the ERP may have implicitly supported these outcomes. On the other hand, a significant number feel that the situation is non-improving so the potential for turmoil, though diminished, is still there. For instance, a recent survey conducted by the International Republican Institute found that between 33 and 46 percent fear ethnic conflict and civil war as one of their top three fears. (b) Institutional Change/Strengthening Even though the project did not result in building any new institutions or any new laws, it has resulted in capacity building and knowledge transfer within existing institutions. For instance: • Training programs and handholding support extended under the project has strengthened the capacity of the PIU and government staff on financial management and procurement, especially on the importance of transparency in procurement management. • The project has also encouraged the government to look at having revised procurement law. • Further, the project also ensured that all institutions are in place and that they were maintaining their regular functions without any disruptions after 2010. • The technical assistance provided by the ERP built capacity in the Ministry of Energy and Industry (MOEI) on communicating important reforms to the broader public and negotiating strategic projects in the sector. This will be of critical importance as the country’s moves to reform its power sector, including raising tariffs gradually to cost-recovery levels. 18 (c) Other Unintended Outcomes and Impacts (positive or negative) N/A 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops During the implementation of the ERP, the World Bank team had communications with a non-government organization (NGO) that expressed concerns regarding the procurement procedures followed during the procurement of printing services for textbooks and the quality of the textbooks. The World Bank team worked closely with the Ministry of Education to ensure that the textbooks printed were in line with the prevailing school curricula and were of sufficient quality and that appropriate procurement procedures were followed. 4. Assessment of Risk to Development Outcome Rating: Substantial • The political situation has stabilized since the revolution in 2010, but the nascent democracy continues to face challenges which are keeping the political risks elevated such as the risk of political protests and violence. For example, relations remain strained in parts of the country as the legacy of the 2010 events, and especially in the South. This is illustrated by a range of survey data and a comparison of such data from 2004 and 2014. • The medium-term fiscal prospects are also challenging. A slowdown in economic activity, together with loss of nontax revenues from the closure of Manas transit center in mid-2014 is creating fiscal pressures. The authorities, supported by the IMF, are preparing a tax strategy that will outline tax policy and administration reforms that can support revenues. On the expenditure side, the World Bank’s PER noted the need to revisit the design of social assistance programs, better manage the public sector wage-bill, improve efficiency in education spending, introduce cost-recovery in the energy sector etc. Still, given the difficulty of some of these reforms, significant risks remain. • Macroeconomic risks are also substantial. Sustained lower growth in Russia would weaken inflows of remittances and Kyrgyz exports. Also, another disruption in gold production (similar to 2012) or significant decline in gold prices will negatively impact the external balance. A large fiscal deficit, failure to control expenditures or a disruption to the gold production process could jeopardize sustainability. • There are substantial risks due to the low capacity of public administration, including on ability to design and implement policies, transparency, accountability and fiduciary management. • The viability of the energy sector has improved but remains challenging. While some critical investments are being undertaken, the poor financial performance of 19 the sector has led to severe under-investment. In addition, governance in the sector remains weak, including opaque arrangement for operations and financial flows and an overall poor regulatory environment. In response, the government adopted the 2012-2015 Power Sector Development Strategy and a more detailed Action Plan for Reforming the Energy Sector in 2013-14 with the following objectives: (i) increasing efficiency and transparency in the sector; (ii) development of a medium-term tariff policy to be accompanied by adequate social protection schemes; and (iii) advancing energy investments. The legal framework is being amended to allow clear delineation of powers and responsibilities in the sector and transparent accounting and monitoring. In addition, the Regulatory Department is improving the key performance indicators for the energy sector companies and developing a new tariff methodology based on best international practices. 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory The Bank's performance in the identification, preparation, and appraisal of the project was satisfactory with the project being processed from identification to effectiveness stages within three months. The identification process focused on critical gaps and opportunities for interventions in Kyrgyz Republic’s economic, social and energy sectors. The project was consistent with the government’s development priorities and the Bank’s Joint Country Support Strategy (JCSS) to support implementation of the Country Development Strategy (CDS) covering FY07–10. The components covered were clearly identified as priorities in the Joint Economic Assessment. During preparation and appraisal, the Bank took into account the adequacy of project design and all major relevant aspects, such as technical, financial, economic, and institutional, including procurement and financial management. In addition, major risk factors and lessons learned from the Bank’s earlier emergency operations were incorporated into the project design. The Bank had a consistently good working relationship with the Borrower during preparation and appraisal. Project preparation was carried out with an adequate number of specialists who provided the necessary technical skill mix. The Bank provided adequate resources in terms of staff weeks and financing to ensure quality preparation and appraisal work. (b) Quality of Supervision Rating: Satisfactory 20 Bank's performance during the implementation of the project was satisfactory. The task team focused on the project’s development impact. The Bank allocated sufficient budget and staff resources, and the project was adequately supervised and closely monitored. The task team regularly prepared Aide-Memoires, alerted counterparts at the Government of the Kyrgyz Republic (GOKR) and PIU about issues found during project execution and facilitated prompt corrective action. The Implementation Status Reports (ISRs) realistically rated the performance of the project both in terms of achievement of development objectives and project implementation. Bank’s procurement and financial management staff worked with PIU staff to explain the rules and procedures to be applied during project implementation, with regard to procurement of goods and works, and selection of consultants, accounts and audits, based on the Credit and Grant Agreements. The Bank's technical team provided support and visited sites as part of implementation supervision activities and ensured safeguard compliance. (c) Justification of Rating for Overall Bank Performance Rating: Satisfactory With a Satisfactory rating for quality at entry and a Satisfactory rating for quality of supervision, overall Bank performance is rated as Satisfactory in accordance with IEG’s harmonized rating criteria. 5.2 Borrower Performance (a) Government Performance Rating: Satisfactory As mentioned in Section 2.1, the interim government had shown its commitment to the objective of the project at the time of project preparation, and government was able to manage the situation well after the 2010 conflicts. Subsequent administrations which came to power after the election in 2011 were also generally committed to the project and performed reasonably well. The MOF, MOEI, and other government officials worked closely with the Bank's project team on a continual basis, and cooperated fully with the task team. However, due to lack of experience in dealing with an unusual and fast-paced type of project, at times government officials were not sure of dealing with certain implementation issues. Also, with the division of powers still evolving in response to the constitutional changes introduced in 2010, less-than-full clarity regarding roles and responsibilities of various branches of government (Parliament vs. executive) delayed the processing of the extension and restructuring in 2012 and required the processing of a retroactive extension in March, 2013. 21 Appropriate levels of review and approval were usually in place; financial accountability and follow-up were observed, and expenditures were duly authorized before they were incurred; and documentation was maintained properly for periodic review. (b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory Responsibility for project implementation was split, with Component 1 implemented by a PIU at the MOF with support from a PIU at the Ministry of Education for education related activities and Component 2 implemented by JEPIG, a PIU reporting to the MOEI, supported by the energy companies that were final beneficiaries of the project activities. The capacity of the implementing agencies varied from strong in the MOF PIU to adequate at the MOEI, though some coordination issues were initially experienced in communication with the energy companies. The relatively limited ability of the government to coordinate activities was, at times, also reflected in the relations between the PIUs. This situation was identified during project preparation and the PD envisaged further strengthening of JEPIG capacity as well as a phased approach to project activities; still, establishing effective arrangements took more than initially expected. As project implementation progressed and with significant Bank support, functioning implementation arrangements were established. The twin PIU implementation arrangement was preserved until the close of the operation with the MOF PIU handling the financial management and disbursement for the entire project. Financial Management Review. The financial management (FM) arrangements at the MOF PIU, including accounting, reporting, budgeting and staffing, overall were assessed to be adequate and acceptable to the Bank. The PIU had acceptable planning and budgeting capacity in place. PIU’s internal controls system in general was assessed to be capable of providing timely information and reporting on the project. The Financial Manager of the PIU performed the reconciliation of the Bank disbursement data with the project’s accounting records via Client Connection after each application was sent and payment received. The Financial Management Manuals (FMMs) were in place and properly described internal controls, disbursement, financial reporting and accounting policies and procedures. Procurement Arrangements. Procurement of all works, goods and technical services under the project followed the Procurement Guidelines “Procurement under IBRD Loans and IDA Credits”. During most of the implementation period the project procurement performance was rated as Moderately Satisfactory because of delays, mostly on the part of the final beneficiaries of the ERP, in preparing technical specification and evaluation of bids in energy component which also led to extension of the project closing date by one year. Despite procurement delays in energy component, considering the utilization of funds and comparing with similar emergency operations in other regions, the overall procurement performance is considered Moderately Satisfactory. 22 (c) Justification of Rating for Overall Borrower Performance Rating: Moderately Satisfactory With a Satisfactory rating for Government performance and a Moderately Satisfactory rating for the performance of final beneficiaries, overall borrower performance is rated as Moderately Satisfactory in accordance with IEG’s harmonized rating criteria. 6. Lessons Learned • It is important to set up functioning implementation arrangements (i.e. in this particular case, to sign a subsidiary agreement between the MOEI and energy companies) before project effectiveness so that implementation is not delayed unnecessarily. Further, better coordination between the MOF and MOEI would avoid unnecessary delays and ensure smoother project implementation. • For an emergency project such as ERP, it is imperative to ensure that the PIU has qualified and competent staff who are familiar with the Bank’s procedures, especially on procurement and financial management. • It will be useful that the operational manuals are developed and shared with PIU’s and all implementing entities to get staff familiarized with project management and other procedures so that even if there is a high staff turnover, the transition would be smooth and project implementation would not be adversely affected. • In order to avoid delayed submission of audit reports and breach financial covenants, it is essential to select the auditors in time. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners The Ministry of Finance and the Ministry of Energy and Industry provided their contributions, which are attached as Annex 7 to this ICR. Neither institution had any substantive comments on the draft ICR. (a) Borrower/implementing agencies (b) Cofinanciers (c) Other partners and stakeholders 23 Annex 1. Project Costs and Financing (a) Project Cost by Component (in US$ million equivalent) Appraisal Estimate Actual /Latest Estimate Percentage of Components (US$ million) (US$ million) Appraisal Component 1. High 35.0 33.8 96.57 Priority Expenditures Pertaining to Emergency Recovery and Reconstruction Component 2. 35.0 36.7 104.86 Rehabilitation and Repair of Energy Infrastructure and Networks Total Baseline Cost 70.0 70.5 100.71 Total Project Costs 70.0 70.5 100.71 Total Financing 70.0 - Required (b) Co-financing Appraisal Actual/Latest Type of Percentage of Source of Funds Estimate Estimate Financing Appraisal (US$ million) (US$ million) BORROWER/RECIPIENT 0.0 0.0 0.0 International Development 70.0 70.5 100.71 Association (IDA) (of which US$15m is from CRW) 24 Annex 2. Outputs by Component Component 1. High Priority Expenditures Pertaining to Emergency Recovery and Reconstruction Budgetary support through retroactive financing for an amount of US$28,836,505 for: (i) supporting social spending, and (ii) paying off arrears in budget payments on protected items. The approved list of goods under this component included: fuel, gas, office furniture and computer equipment, textbooks, equipment, furniture and supplies, trucks and spare parts, telecommunications equipment, and basic medical equipment. In addition, this component provided financing for critical education sector expenditures. The details are as follows: (i) Prepress and replication of textbooks for the schools: 27 items of textbooks with total circulation of 1.05 million copies were printed. The list of textbooks covered grade 4–11 with Kyrgyz, Russian and Uzbek languages of education. Another 20 textbooks with total circulation of about 0.97 million copies were printed for grades 6– 11 with Kyrgyz, Russian and Uzbek languages of education. These textbooks were distributed to 2,201 schools. (ii) School Furniture for regional schools: 8,155 items of school furniture were provided to 112 schools of the Republic, including: Osh region – 19 schools, 1,584 items; Jalal Abad region – 22 schools, 1,616 items; Batken region – 10 schools, 688 items; Talas region – 12 schools, 864 items; Naryn region – 12 schools, 736 items; and Chui region – 37 schools, 2,667 items. (iii) Computer equipment for regional schools: Computers were provided to 160 schools of the Republic, including: Osh region – 100 schools, 600 sets; Jalal Abad region – 27 schools, 162 sets; Batken region – 17 schools, 102 sets; Talas region – 1 school, 6 sets; Naryn region – 5 schools, 30 sets; and Chui region – 10 schools, 60 sets. Component 2. Rehabilitation and Repair of Energy Infrastructure and Networks Purchasing and installing equipment. The project financed purchasing and installing the following: 6/0.4 kV and 10/0.4 kV complete distribution substations and distribution transformers of different capacity, 35/6 kV 10,000 kVA transformer, motorized vehicles, switchgears for protection and control, reinforced concrete poles, cables, wires, power and gas meters, fuel oil for Osh CHP and boiler houses of Kyrgyzjilkommunsoyuz (KJKS), and other essentially needed materials, equipment, and spare parts; construction machinery and equipment such as cranes, excavators, bulldozers. Renovation of Individual Heating Sub-stations (IHSs). Bishkek city district heating company installed about 200 new individual heating substations for better and more efficiency supply of heat and hot water to end-user consumers. Rehabilitation of heating pipelines. The project supported rehabilitation of about 10 km of selected segments of the distribution district heating network by replacing the most severely damaged, corroded and leaking pipes with modern pre-insulated pipes. Rehabilitation and/or construction of transmission lines. In Osh and Jalalabat regions, the power distribution companies rehabilitated a number of segments of existing electrical distribution lines (by replacing old wood poles with the new concrete ones and replacing old wires with new of higher section) as well as constructed new short lines in the newly constructed areas of the cities (both underground and overhead). Construction of a new electrical substation. Under the project Oshelectro constructed a new 35/10 kV substation which is relatively small in size (about 30x30 meters) and located within the existing right-of way corridor. Installation of new transformers. Oshelectro and Jalalabatelectro, as well as other two power distribution companies in the Kyrgyz Republic, have installed a number of new distribution substations. They have been installed in the overloaded segments of distribution systems and new residential areas to ensure a reliable energy supply to the local population. Replacement of old transformers. A number of old power distribution transformers were replaced with the new ones with increased capacity. Power generation. To ensure reliable power generation, high voltage facilities and parts were delivered to the Naryn River HPPs. 25 Annex 3. Economic and Financial Analysis Economic and financial analysis at appraisal The program document for the Emergency Recovery Project (ERP) did not include quantitative estimates (NPV, ERR, FRR, Cost-Benefit Analysis, Cost-Effectiveness Analysis) of the project’s anticipated economic and financial net benefits. The ERP was prepared under streamlined procedures and was part of a broader response to the crisis needs of the Kyrgyz Republic (both budgetary and energy supply system) thus making it difficult to quantify and directly attribute a definite part of the any improvement observed to the project. Still, the ERP satisfied the three key criteria that the economic analysis addresses, namely: i) contributing to the country’s socioeconomic development, ii) having a rationale for the public sector provision, and iii) leveraging the value added of the Bank’s support. The rapid budget support provided under component 1 was critical in preserving macroeconomic stability and safeguarding fiscal ability to support high priority expenditures needed for the emergency program. In addition, the ERP PD indicated that the economic losses due to the energy sector crisis were substantial and that the sector represented a key weakness in the economy and a major source of risk to social stability and possible renewed conflict. The public sector had clear mandate to deliver the program supported by the ERP, while the Bank’s strategy of emergency support was built upon its traditional strengths: diagnosis of the impact of the crisis and an assessment of emergency needs; promotion of cooperation amongst donors to ensure adequate financing of the emergency needs; and its own financial and advisory contribution to support recovery and rehabilitation. Post-completion assessment of economic benefits The retroactive financing provided under component 1 assisted the authorities in preserving macroeconomic stability and financing high priority expenditures during the crisis period. This allowed the authorities to support people’s incomes at times when labor income and remittances were affected thus improving living conditions and stimulating economic activity. With wages falling in real terms during the crisis, it was higher social spending (up 47 percent) and timely payment of government obligations that preserved disposable income and supported consumption. Total consumption increased by 1.9 percent in 2010 and partially offset the reduction in investments and exports caused by the turmoil. Regarding component 2, by improving the availability and reliability of heating and power supply, and reducing the frequency of outages, the project, together with the other actions implemented in the system, helped to reduce economic losses. The assessment of the project’s economic benefits has been made by combining qualitative information with 26 quantitative estimates where possible and refers to the combined effect of the project and other actions being pursued by the Government and the implementing entities. According to the regulatory department, the losses in the power distribution network declined from 26.7 percent of electricity supplied in 2010 to 17.9 percent in 2013 thus reducing the quasi-fiscal deficit. However, sustainably reducing the quasi-fiscal deficit will require adjusting prices closer to cost-recovery. In addition, the number of power outages declined by almost a quarter between 2011 and 2013. Also, the Ministry of Economy reported that unmet demand has declined from 36 percent in 2007 to 20 percent in 2011. The economic costs of the unmet demand were estimated at 10 percent of GDP and the recent improvement is expected to have lowered this ratio further. A more stable power supply is helping Kyrgyz businesses. Combining this information with data Business Environment and Enterprise Performance Survey (BEEPS) on costs to manufacturing firms of an average power outage can provide an indication of the economic impact of the reduced number of outages. According to BEEPS, Kyrgyz manufacturing companies experienced, on average, 10.8 power outages in 2013 costing firms that experienced power outages 4.1 percent of annual sales. The reduction in sales lost due to power outages could be as high as 1.5 percent of annual sales. BEEPS results confirm the improvement in the electricity supply (though the comparison in BEEPS is made to 2008). According to BEEPS, electricity is no longer the biggest obstacle to doing business (as it was in 2008) in the Kyrgyz Republic and is currently ranked as the fifth biggest obstacle by businesses and at the same time, businesses reported lower losses due to outages. Lower power outages are also very important for the population, as electricity is the major source for lighting, cooking and heating. This is especially true for the poor; according to the Integrated Household Survey (2012) one-third of the poor use electricity for heating and over three-quarters use it for cooking. In 2012, 21.1 percent of households experienced power outages once a month or more frequently. This ratio was 26.3 percent in 2011 and a very high 38.6 percent in 2010, confirming the results that power outages have declined substantially since 2010. The impact of the reduced power outages should be bigger for the poor who, unlike the non-poor, cannot afford to resort to back-up options for electricity (e.g. diesel generators). However, sustaining the benefits of the ERP and recent investments of the authorities would require concerted efforts to improve the financial viability and governance in the sector. 27 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Responsibility/ Specialty Supervision Achath, Sati Consultant SASDU Consultant Aldayarov, Mirlan Senior Energy Specialist ECSEG Energy Specialist Almanbetova, Asel Program Assistant ECCKG Program Assistant Babirye, Sarah Nankya Program Assistant ECSP1 Program Assistant Balabanyan, Ani Senior Energy Specialist ECSEG Energy Specialist Beknazarova, Jyldyz Executive Assistant ECCKG Executive Assistant Bure, Jacques Lead Transport Specialist ECSTR Transport Specialist Capcelea, Arcadii Senior Environmental Specialist ECSEN Environmental Specialist Chargynov, Zamir Consultant ECSEG Consultant Djoldosheva, Dinara Senior Country Officer ECCKG Senior Country Officer Dubashov, Bakyt Economist ECSP1 Economist Duraiswamy, Naresha Senior Operations Officer ECSSD Senior Operations Officer Fukui, Katsuyuki Senior Power Engineer ECSEG Power Engineer Gibson, Daniel Lead Social Development Specialist ECSOQ Social Development Goncharova, Irina Procurement Specialist ECSO2 Procurement Specialist Houdar, Fabrice Country Officer ECCU* Country Officer Iskakov, Marat Consultant ECSP1 Consultant Jarosewich-Holder, Martha Consultant ECSEG Consultant Khosla, Sunil Kumar Lead Energy Specialist ECSEG Energy Specialist Kiss, Agi Lead Ecologist and Regional ECSOQ Safeguards Coordinator Koilpillai, Hanna M. Senior Finance Officer CTRFC Finance Officer Kurmanaliev, Nurbek Procurement Specialist ECSO2 Mironova, Iuliia Consultant ECSP1 Consultant Alexandrovna Mitra, Saumya Consultant ECSP1 Consultant Mwenda, Kenneth Senior Counsel LEGEM Counsel Myroshnychenko, Yuriy Senior Energy Specialist ECSEG Energy Specialist Najdov, Evgenij Senior Economist ECSP1 TTL Nekaien-Nowrouz, Zakia Program Assistant ECSP1 Program Assistant Ogallo, John Otieno Sr. Financial Management Specialist OPSOR Financial Management Specialist Rozowska, Anita Consultant ECROC Consultant Sedghi, Afsaneh Senior Economist ECSP1 TTL Shmidt, Oxana Program Assistant ECCKA Program Assistant Siagian, Joseph Daulat Information Assistant SECPO Information Assistant Marsangap Swami, Rajeev Kumar Lead Financial Management Specialist EASFM Financial Management Specialist Vatyan, Arman Sr. Financial Management Specialist ECSO3 Financial Management Specialist Worley, Heather B. Sr. Communication Officer ECSEG Communications Officer Youness, Ghada Senior Counsel LEGEM Counsel Zhou, Yuling Lead Procurement Specialist EASR2 Procurement Specialist 28 (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle US$ Thousands (including No. of staff weeks travel and consultant costs) Lending FY10 53.41 252,510.80 Total: 53.41 252,510.80 Supervision/ICR FY11-FY14 60.72 382,435.96 Total: 60.72 382,435.96 29 Annex 5. Beneficiary Survey Results N/A 30 Annex 6. Stakeholder Workshop Report and Results N/A 31 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR A. Ministry of Finance Introduction – General Information on “Emergency Recovery Project” IDA Credit Amount No. 4825-KG US$ 38.2 mln. (SDR 21,100,000) IDA Grant Amount No. H618-KG US$ 31.8 mln. (SDR 25,300,000) Agreement signing date: October 1, 2010 Decree of Temporal Government of KR Agreement ratification date: Dated October 7, 2010, N 13 Date of entering into force: October 8, 2010 Date of closing the Project: December 31, 2013 Ministry of Finance of KR (MOF KR) Executive agencies: Ministry of Energy of KR (MOE KR) Project Implementation Unit (PIU) under the MOF KR Implementing Agencies: Joint Energy Project Implementation Group (JEPIG) under the MOE KR Total used: On Grant Part US$ 32,916,720.30 On Credit Part US$ 37,593,959.79 Project development objective: The objective of the Project is to assist the Recipient in: (a) strengthening the prospects for macroeconomic stability and the government’s fiscal resilience to meet the priority needs of its emergency recovery and reconstruction program; and (b) restoring and ensuring continuous provision of the basic energy (power/heat/gas) services with a focus on the affected areas so as to support economic output and provide adequate heating to population during the winter. The project included two components: (i) High priority expenditures pertaining to emergency recovery and reconstruction, and (ii) Rehabilitation and repair of energy infrastructure and networks. 1. Summary of «Emergency Recovery Project» Component 1: High priority expenditures pertaining to emergency recovery and reconstruction was implemented by Project Implementation Unit (PIU) under the Ministry of Finance of KR. 32 Main Objective: (a) Provision of Eligible Essential Goods and Commodities as set forth in Schedule 4 of Financial Agreement. (b) Carrying out Project management activities in areas of implementation, audit, monitoring and evaluation as well as in coordination of Project management activities. Component 2: Rehabilitation and Repair of Energy Infrastructure and Networks was implemented by Joint Energy Project Implementation Group (JEPIG) under the MOE KR. (a) Restoring power, heat and gas supply to Affected Areas through the urgent repair and rehabilitation of damaged infrastructure and networks for electricity, heating and gas supply. (b) Carrying out the procurement of fuel for thermal power plants and district heating systems. (c) Rehabilitation and repair of power generation and distribution systems. (d) Completion of activities approved for financing under the Financing Agreement for Energy Emergency Assistance Project (Credit #4524-KG and Grant #H429-KG) relating to the rehabilitation of the electricity and heating systems of the Recipient’s Power Plants Company. (e) Carrying out Project management activities in areas of implementation, audit, monitoring and evaluation as well as in coordination of Project management activities. Component 1. High Priority Expenditures Pertaining to Emergency Recovery and Reconstruction (US$35 million). As detailed stated in Annex 4 of the Financial Agreement , the approved list of goods included a fuel, gas, office furniture and computer equipment, textbooks , equipment, furniture and supplies , trucks and spare parts , telecommunications equipment, and basic medical equipment. There was conducted the analysis and evaluation of contracts from November 2009 to September 1, 2010 to determine the retroactive financing for the amount of up to US$28 million, which is acceptable to the Bank, and which may be provided to finance the purchase of basic commodities , implemented and paid for twelve months before signing this operation. There was collected documentation to support the retroactive amount for the accelerated initiation of payments immediately after the entry into force of the project Thus, in November 2010, in accordance with Annex 1 of Emergency Project Paper, and in accordance with item B of Section 4 of the Financial Agreement of the above project, there was spent US$ 28,836,505 for retroactive financing, as budget support 33 Originally, it was planned to equip only schools in the regions affected by the disturbances caused by the political situation in the country , but later , due to the shortfall of funding from the republican budget , and in accordance with the requests of the Ministry of Education of KR, in order to improve the study environment and raise the level of education in educational institutions of the Kyrgyz Republic , it was extremely necessary to solve a number of priorities in education, namely equipping existing and newly constructed schools in the Republic with textbooks , school furniture and computer equipment. One of the obstacles to improving the quality of education is an acute shortage of textbooks and instructional materials in schools of the Republic. Another important task was to equip the existing and newly constructed schools in the country the necessary school furniture and computer equipment. In this connection, the Ministry of Education of KR has developed a list of educational institutions of Republic which need equipment by textbooks, school furniture and computers. Successful achievement of objectives on Component 1 is characterized by the following data: 1. Budgetary support through retroactive financing in the amount of US$ 28,836,505 which allowed: (i) to support social spending in real terms (which were identified as education, health and social protection) in accordance with the budget, and (ii) to pay off debts in budget payments on protected items. 2. In the result of produced procurement of computer equipment, furniture and replication of textbooks for schools of KR there has been significantly improved material-technical base of educational institutions throughout the country, which allowed the secondary schools students to use new textbooks, new school furniture and modern computer equipment. In particular, the important factor is the replication of textbooks in the Uzbek language, which allowed access to quality education for more children, and most importantly, different ethnic groups. There was held the procurement of equipment and furniture for schools of KR as well as replication of textbooks under the 4 international tenders: Contract «Prepress and replication of textbooks for the schools of KR» between the Ministry of Finance of KR and OJSC Uchkun. Under this contract there was replicated 27 items of textbooks with total circulation of 1,049,000 copies for the amount of US$ 1,981,894.06. The list of textbooks covers 4 – 11 school classes with Kyrgyz, Russian and Uzbek languages of education. All textbooks are delivered to all regional educational departments throughout the Republic for further distribution to 2,201 schools. Contract «Prepress and replication of textbooks for the schools of KR» between the Ministry of Finance of KR and Joint Venture ST ART/Kirland. Under this contract there was replicated 20 items of textbooks with total circulation of 974,730 copies for the amount of US$ 1,673,632.77. The list of textbooks covers 6 – 11 school classes with Kyrgyz, Russian and Uzbek languages of education. All textbooks are delivered to all regional educational departments throughout the Republic for further distribution to 2,201 school. 34 Contract “School Furniture for regional schools” between the Ministry of Finance of KR and Mosmebel Ltd. Under this contract there was provided 8155 items of school furniture for the amount of US$ 630,078.0 to the 112 schools of the Republic, including: Osh oblast – 19 schools, 1,584 items, Jalal Abad oblast - 22 schools, 1,616 items, Batken oblast -10 schools, 688 items, Talas oblast -12 schools, 864 items, Naryn oblast -12 schools, 736 items, Chui oblast -37 schools, 2,667 items. Contract “Computer equipment for regional schools” between the Ministry of Finance of KR and Sinobase Company. Under this contract there was provided equipment for the amount of USS 496,400.00 to the 160 schools of the Republic, including: Osh oblast -100 schools, 600 sets, Jalal Abad oblast -27 schools, 162 sets, Batken oblast -17 schools, 102 sets, Talas oblast -1 school, 6 sets, Naryn oblast -5 schools, 30 sets, Chui oblast -10 schools, 60 sets. 2. Lessons Learned and Recommendations When implementing the contracts for Prepress and replication of textbooks there have been delays associated with the disagreement between the parties involved, in particular, the Contractor and the publishers who prepare the books. To prevent such risks, the potential contractor must provide an agreement with copyright holders before the signing the contract or act in consortium with publishing houses. It would be useful to use these lessons in the next projects with similar contracts 3. Indicators In accordance with Annex 2 «Results Framework and Monitoring» of Emergency Project Paper, on Component 1 there were determined the following indicators: Project Development Objective (Preliminary) Project Outcome Indicators PDO is to assist the Kyrgyz Republic in: PO – 1: Support of budget financing for (a) Strengthening the prospects for macroeconomic education, health and social allowances and stability and the government’s fiscal resilience to real calculated transfers as in the budget for meet the priority needs of its emergency recovery August 2010: and reconstruction program through the giving the necessary liquidity Intermediate Results Intermediate Results Indicators Component 1: Budget support through the retroactive financing in the amount of US$ 28,836,505, Payments of teacher and doctor salaries, pensions, which allowed: (i) support the social social allowances (UMB and MSB) expenditures in real calculation (which were determined as education, health and social protection) in accordance with budget; and (ii) to pay debts in budget payments on protected articles. 35 In general, according to the opinion of Government of the Kyrgyz Republic, the implementation of Component 1 of the project should be considered a successful, and indicators implemented, as a consequence of the implementation of project activities were support of social spending through retroactive financing, as well as providing schools with such paramount things as textbooks, computer equipment and school furniture. Thus, the activities of the project led to improved prospects for macroeconomic stability and implementation by the Government its obligations and objectives for emergency recovery program. In accordance with the Financial Agreement, once in six months there was conducted an external audit of the project. Meanwhile, we would like to note that the auditors’ conclusions on all audited periods are of unqualified opinion. B. Ministry of Energy 1. Introduction The Emergency Recovery Project is aimed at providing assistance to the Government of the Kyrgyz Republic in implementation of the emergency program for social reconciliation, recovery, and reconstruction. The Project objectives are: (a) to strengthen the Government's macroeconomic stability and financial resilience to meet the priority needs of its emergency program, and (b) to restore the reliability and security of electricity and heating energy supply services (electric power/heat/gas), especially in Osh and Jalalabat oblasts. The Project is aimed at solving these tasks through financing of: (i) purchases of commodities and equipment for recovery, including materials for rehabilitation and support of power supply services, (ii) additional fuel stockpiles and emergency repair and rehabilitation works in power and gas supply systems, with special focus made on damaged networks in the cities of Osh and Jalalabat in order to restore power supply services, and (iii) purchases of equipment for main generating capacities such as Toktogul and Kurpsai HPP and the Thermal Heating Power Plant in Bishkek, as well as for two additional power distribution companies. 2. Project description (a) Project objectives The Project objectives are: • to strengthen the prospects for macroeconomic stability and financial resilience of the Government to meet the priority needs of its emergency rehabilitation and recovery program; and 36 • to restore the reliability and security of electricity and heating energy supply services (electric power/heat/gas), especially in Osh and Jalalabat regions. (b) Initial conditions and activities under the Project The Project consists of two components: (i) financing of purchases of key goods and commodities to support high priority expenditures required for the emergency program implementation, and (ii) investments for repair and rehabilitation of damaged infrastructure/networks to restore and ensure energy supply services (power, heat and gas), especially in the southern part of the country, as well as key purchases of fuel for thermal power plants and district heating systems. Security measures under the Project are mostly focused on this element in the rehabilitation of the power supply infrastructure. Below is more detailed information about Component 2 (Energy Sector): (A) Emergent restoration of power supply and gas supply in Osh and Jalalabat regions • The OJSC "Oshelectro" is a power distribution company, which was established at the beginning of 2001. It provides services for Osh and Batken regions, and the city of Osh. The OJSC "Oshelectro" comprises 13 district-level power networks (RES) that operate power networks within their respective districts. The Company has more than 2 thousand of operating personnel. The OJSC "Oshelectro" provides power to 17,643 of non-household consumers, and 312,660 of household consumers. The OJSC "Oshelectro" is operating 13 thousand kilometers of overhead lines, 0.6 thousand kilometers of cable lines of 35-10-6-0.4 kv, and 4,626 transformer substations. • The OJSC "Jalalabatelectro" is a power distribution company, which was established at the beginning of 2001. The OJSC "Jalalabatelectro" provides services for Jalalabat region. The OJSC "Jalalabatelectro" provides electric power to 185,062 of household consumers and 9,906 of industrial, agricultural, commercial and other organizations in Jalalabat region. The OJSC "Jalalabatelectro" has 1,514 employees. Under the Project, the distribution companies "Oshelectro" and "Jalalabatelectro" were provided with equipment and materials required for rehabilitation of affected power networks in Osh and Jalalabat regions. The equipment and materials include feeder transformers, pole-arms, cables, wires, meters and other necessary materials, equipment and spare parts. In order to support efforts aimed at repair/rehabilitation activities to restore services for citizens, the following construction machinery and equipment were also purchased: cranes, excavators, and bulldozers. • OJSC “Kyrgyzgas” is a major production and maintenance entity. Its main and primary task is to ensure a smooth and trouble-free natural gas supply of the Kyrgyz Republic consumers. At the same time this joint stock company provides services for the transportation of Kazakh gas using the transmission pipeline located in the north of the Kyrgyz Republic. Natural gas in the Kyrgyz Republic amounts to 30 percent of the total consumption of energy resources. The natural gas consumers include more than 148 state-financed organizations, 2,334 37 industrial and commercial entities, and over 278,671 individual consumers residing in houses and apartments. As to supply consumers of the Kyrgyz Republic with natural gas, OJSC “Kyrgyzgas” operates gas pipelines and gas engineering facilities: o 753,8 km of trunk pipelines; o 656,9 km of medium pressure gas pipelines o 1679,46 km of low pressure pipelines o 116,0 gas distribution points (GDP) o 1061,0 cabinet gas distribution points. OJSC “Kyrgyzgas” received under the Project the necessary pipes, meters and other equipment, and special machinery that will allow completing the gas supply system repair faster. (B) Required repair/rehabilitation of equipment for electric power generation and distribution networks • Electric power generation. About 90 percent of the electricity produced in the Kyrgyz Republic is generated on hydroelectric power plants located in Jalalabat region. Heat power plants are located in the cities of Osh and Bishkek. The main and auxiliary equipment of power plants is morally and physically obsolete and requires replacement due to the prolonged operation. It was planned to purchase oil fuel for the Osh Heat Power Plant under the Project, but because of problems with the rail tracks running through the territory of Uzbekistan the suppliers failed to guarantee the delivery of fuel oil to the city of Osh. It was decided to cancel the purchase. The 125MVA power supply transformer was acquired for the Bishkek CHPP. This measure helped to maintain efforts covered by the Emergency Energy Assistance Project (EEAP) implemented in parallel as to assist the Government in repairing of the main equipment for power generation, such as boilers. Such joint activities allow increasing the production of thermal and electric energy. Toktogul and Kurpsai hydroelectric power plants are the main power generating stations in Kyrgyzstan and the key source of electricity generation. The total capacity of these stations make up to 69 percent of the total installed capacity of all hydropower plants of the Kyrgyz Republic. These facilities are in operation for 30 - 35 years and the switching equipment (switches, transformer bushings) in switchboards required urgent replacement. And that is exactly what has been completed within in the framework of this project. • OJSC “Severelectro” was formed on July 1, 2001 and is in charge of purchase, distribution and sale of electricity, repairs and operational maintenance of electric distribution networks of 35-10-6-0.4 kv located within the boundaries of the Chui and Talas regions and Bishkek. OJSC “Severelectro” comprises of 17 regional electric networks (RES). Its service area totals 30 thousand m2, covers 8.3 thousand of attended substations and transformer substation. Consumer base amounts to 492,000, while there are 20 thousand commercial consumers. The personnel capacity totals 3,127 people. 38 • OJSC “Vostokelectro” was founded in early 2001 on the basis of the Issyk- Kul and Naryn distribution networks. OJSC “Vostokelectro” serves 14 districts and 33 electrical network sectinos. OJSC “Vostokelectro” is in charge of supply and sales of electricity to 164,295 household consumers and 11,421 industrial, agricultural, commercial and other organizations of the Issyk-Kul, Naryn and Toguz-Torouz districts of Jalalabat region. Its personnel capacity totals 1,704 people. The project envisaged provision of the most necessary equipment and materials, such as distribution substations and special equipment for the repair of distribution networks for Severelectro and Vostokelectro companies. • Distribution of thermal energy. OJSC “Bishkekteploset” serves 413.617 km of heat networks and 19 pumping stations. Its personnel capacity totals 930 people. Heat consumers include residential, administrative, cultural and domestic buildings, manufacturing plants and other facilities. Number of connected consumers is more than 89,000. OJSC “Bishkekteploset” was supply with the emergency repairs equipment, such as pipes, hot water and heat point meters. Kyrgyzjilkommunsoyuz State Enterprise provides services for heat supply, water supply and sanitation. The total number of employees is 2852 people. Kyrgyzjilkommunsoyuz State Enterprise is currently administers 190 boilers with a total installed capacity of 898 Gcal/h. It has 403 km of heat network, 487 km of water pipelines, 146 km of sewers and 44 artesian wells. The project envisaged purchasing of 5,000 tons of fuel oil for Kyrgyzjilkommunsoyuz State Enterprise along with special repair equipment. 3. Project Performance Indicators and Results Monitoring (a) Emergency Energy Assistance Project Structure and Results Monitoring (Component 2) 39 Project goals Project performance Baseline 2010 2011 2012 2013 indicators (2009) To assist the PPI 2: Restore access Kyrgyz to electricity in the Republic in: cities of Osh and 6,000 13,000 0 0 Jalalabat regions , (Component which is measured by 0 Total Total 5 Total Total 2) Recovery the number of 6,000 19,000 19,000 19,000 and households with a continuous restored connection to provision of electricity basic energy services (electricity / heating / gas) PPI 3: Maintaining with an access to heating emphasis on services in Osh city Osh and during the winter 100% 91% 127% 106% Jalalabat 2010/2011 and regions to 2011/2012 at the level 123,467.00 112,419.00 156,690.00 130,635.00 support the equivalent to the GCal GCal GCal GCal N/A economic corresponding periods (January– (January – (January – (January – activity and in 2009. It is measured December December December November provide the as a percentage of 2009) 2010) 2011) 2012) public with available thermal adequate energy (GCal) heating during the winter period Output performance Baseline 2010 2011 2012 2013 Output indicators (2009) Component 2: Repair and 27 1170 38 0 restoration of Number of recovered 0 gas network gas connections Total Total Total Total 27 1197 1235 1235 Component 2: 10.8 thous. 17.2 thous. 19.6 thous. 21.1 thous. Supply of oil ton of oil ton of oil ton of oil ton of oil fuel for the Supply of oil fuel fuel fuel fuel fuel N/A Osh Heat (tons) (January– (January– (January– (January – Power Plant 6 December December December November (tons) 2009) 2010) 2011) 2012) As indicated above, the oil fuel for the Osh Heat Power Plant was not purchased under the Project. Nevertheless, the oil was purchased by a third-party financing and, in general, the supply plan for a specified period of time has been executed. The PPI 2 goal to restore access to electricity in the cities of Osh and Jalalabat regions was achieved in 2011. The 5 All target households are connected. 6 The oil fuel supply is financed from other sources. 40 PPI 3 goal to sustain access to heating services in Osh city during the winter 2010/2011 and 2011/2012 at the level equivalent to the corresponding periods in 2009 was achieved. The target level for the restored gas connections was achieved in 2012. Indirect Effect of the Project according to Energy Loss Data Losses in Electrical Energy in Distribution Networks for the Period 2010-13 (In percent) Total Losses for 12 Month # Name 2010 2011 2012 2013 1. OJSC “Severelectro” 25.0 23.5 22.0 18.4 2. OJSC “Vostokelectro” 31.1 23.7 22.6 19.5 3. OJSC "Oshelectro" 26.3 19.9 19.5 16.8 4. OJSC “Jalalabatelectro” 28.7 20.0 19.3 16.3 Total 26.7 22.3 21.2 17.9 By the end of 2013 the above loss reduction were achieved through a variety of activities, including the installation of new and replacement of old complete substations and power transformers during 2011-2013 within the World Bank project. Unscheduled Outages in the Distribution System for 12 Month Period, 2011-13 2011 2012 2013 # Name 12-month 12-month 12-month period period period 1. OJSC “Severelectro” 4,945 5,170 4,540 2. OJSC “Vostokelectro” 2,895 1,298 1,332 3. OJSC "Oshelectro" 3,172 4,553 2,192 4. OJSC “Jalalabatelectro” 2,450 1,993 1,804 Total 13,462 13,014 9,868 Note: 12 months of 2011 according to NESK data; 12 months 2012 and 2013 according to REK data. Detailed information on the supplied equipment for energy companies (see Annex 9). 41 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders N/A 42 Annex 9. Detailed List of Equipment Purchased By Energy Sector Companies (As reported by Ministry of Energy and Industry) Ministry of Finance, pursuant to the Order #15-21/7 of the First Deputy Prime Minister of the Kyrgyz Republic as of 18.02.2011 with regard to make a decision taking into account the views of the Ministry of Energy, sent a letter to the Office of the Government as to set 2.5 percent interest rate for energy companies and 1.5 percent for Kyrgyzjilkommunsoyuz State Enterprise. Further, pursuant to the GoKR Decree #54-R as of 04.03.11, the Ministry of Finance of the Kyrgyz Republic signed the Subsidiary Agreement on 05.03.11 with: 1. OJSC “Electricheskie stancii” - Subsidiarity Agreement worth US$14,705,000. The electric batteries were purchased for OJSC “Electricheskie stancii” (Electric Power Plants) with subsequent installation on the Bishkek Thermal Power Plant and the Toktogul HPP cascade. A 125 MVA/110 kV transformer was supplied and installed at the Bishkek Thermal Power Plant. 110, 220, and 500 kV bushings were supplied to the Toktogul HPP cascade, companies administering HPPs that are currently under construction, Bishkek TPP and Osh TPP. 2 units of mobile high voltage laboratories are currently in operation on the PS HPP. 110, 220, and 500 kV gas-insulated switches were supplied for the Toktogul HPP and Kurpsai HPP. OJSC “Electricheskie stancii Switches Q-ty Unit 1 Switches 110kV 10 pcs 2 Switches 220kV 6 pcs 3 Switches 500kV 4 pcs Bushings 4 High-voltage bushings 110 kV 32 pcs 5 High-voltage bushings 220 kV 39 pcs 6 Transformer bushings 500 kV 12 pcs Transformer 7 Transformer 110 kV 125 МВА 1 pcs Electric battery 8 Electric battery 7 set Specialized machinery 9 Special purpose vehicle with electric laboratory 35 kV 2 units 43 Contract/Lot No. Amount # and Date Contract And Party Name US$ 1 KG PCO 032/1, Supply of gas-insulated switches with external current 279,622.34 22.11.2012 transformers 110 kV - OJSC “BO Electroapparat” 2 KG PCO 032/3, Supply of gas-insulated switches 500 kV - LLP “ABB” 892,750.00 03.12.2012 3 KG PCO 033, Supply of power transformer 125МВА/110kV - LLC 1,234,180.00 23.07.2012 “Uralskiy energeticheskiy soyuz” 4 KG PCO 038, Supply of electric batteries - LLC “Rosmet” 802,488.29 16.04.2012 5 KG PCO 039-2, Supply of transformer bushings 110, 220 kV, 500 kV 2,342,295.76 05.06.2013 with solid insulation (RIP) - LLC “Uralskiy energeticheskiy soyuz” 6 KG-PCO-40 as of Supply of mobile high-voltage laboratory, - LLC 322,220.00 25.03.2013 “ABT” 7 KG-PCO-52 as of Supply of gas-insulated switches 110 kV with external 235,000.00 28.10.2013 current transformers and frame - CJSC “UES Export” 8 KG-PCO-53 as of Supply of gas-insulated switches 220 kV with external 332,220.00 11.11.2013 current transformers and frame - LLC “Profit-Express” Total 6,440,776.39 8 contracts were executed for OJSC “Electricheskie stancii” (Electric Power Plants) totaling US$6,440,413.39. 2. OJSC “Severelectro” – a subsidiarity agreement worth US$385,106. Complete transformer substations and power transformers were purchased for OJSC “Severelectro”. Also truck cranes were supplied along with the 40 tones motor truck, motor car laboratory, hydraulic hammer excavator and articulated vehicle (long vehicle). OJSC "Severelectro" Transformers and cabinets Q-ty Unit 1 Transformer 160 kVА 55 pcs 2 Transformer 250 kVА 115 pcs 3 Transformer 400 kVА 95 pcs 4 Transformer 630 kVА 35 pcs 5 Cabinet 160 kVА 30 pcs 6 Cabinet 250 kVА 40 pcs 7 Cabinet 400 kVА 35 pcs Pole-arms, stubs, cross-arms and insulators 8 Insulators 10 kV 10000 pcs Special purpose machinery 9 Crane truck with 16 ton capacity 2 units 10 Special purpose vehicle with electric laboratory 35 kV 1 units 11 Backhoe loader 1 units 12 Hydraulic hammer excavator (0.18 m3 basket) 1 units 13 Crane truck with 40 ton capacity 1 units 14 Articulated vehicle (long vehicle) 1 units 44 # Contract/Lot No. Contract And Party Name Amount and Date US$ 1 KG-PCO-01/1 as of Supply of complete transformer substations and 863,730.00 05.10.2011 power transformers - OJSC “Kentauskiy transformatorniy zavod” (Kentau Transformer Plant) 2 KG PCO 031/1-1, Supply of 16 ton crane trucks - LLC 210,255.32 25.11.2011 “Asiaautocenter” 3 KG-PCO-41/3, lot Supply of complete transformer substations and 587,425.00 3,6, as of 22.10.2012 power transformers - OJSC “Kentauskiy transformatorniy zavod” (Kentau Transformer Plant) 4 KG-PCO-41/3-3 , lot Supply of complete transformer substations and 530,040.00 1,2,4,5 as of power transformers - OJSC “Kentauskiy 09.01.2013 transformatorniy zavod” (Kentau Transformer Plant) 5 KG-PCO-49/1 as of Supply of special purpose vehicle with electric 144,500.00 29.08.2013 laboratory 35 kV - LLC “Molniya” 6 KG-PCO-049/2-1 as Hydraulic hammer excavator (0.18 m3 basket) - 2 62,000.00 of 23.08.2013 units - CJSC “Envod” 7 KG-PCO-49/3 as of Supply of 40 ton crane truck - LLC “Apex com” 257,000.00 21.08.2013 8 KG-PCO-049/4-2 as Articulated vehicle (long vehicle) - 1 unit - 96,000.00 of 21.08.2013 Consortium Alliance Machinery Group 9 KG-PCO-54/4 as of Supply of power transformers - OJSC “Kentauskiy 105,000.00 10.10.2013 transformatorniy zavod” (Kentau Transformer Plant) 10 KG-PCO-56/4 as of Supply of insulators - CJSC “Alamudunenergo” 55,106.38 23.11.2013 11 KG-PCO-57/4 as of Supply of power transformers - OJSC “Kentauskiy 97,125.00 23.11.2013 transformatorniy zavod” (Kentau Transformer Plant) 12 KG-PCO-58/4 as of Supply of power transformers - OJSC “Kentauskiy 112,560.00 23.11.2013 transformatorniy zavod” (Kentau Transformer Plant) 13 KG-PCO-59/2 as of Supply of computers and computer equipment - 11,494.15 29.11.2013 LLC “Antarex LTD” 14 KG-PCO-59/4 as of Supply of computers and computer equipment - 2,027.85 29.11.2013 LLC “Brand” 15 KG-PCO-59/6 as of Supply of computers and computer equipment - 22,671.36 29.11.2013 LLC “Ultra-Technics” Total 3,156,935.06 15 contracts were executed for OJSC “Severelectro” totaling US$3,156,935.06. 3. OJSC “Oshelectro” - to the amount of US$5,240,505. The package transformer substations and power transformers, pole-arms, cross-arms, wires, cables, meters, truck cranes, personnel transportation vehicles, backhoe loader, anchor trucks, insulators, fuses were purchased for OJSC “Oshelectro”. The detailed information about the purchased equipment is provided below. 45 OJSC "Oshelectro" Transformers and cabinets Q-ty Unit 1 Transformer 160 kVА 80 pcs 2 Transformer 250 kVА 145 pcs 3 Transformer 400 kVА 150 pcs 4 Transformer 630 kVА 45 pcs 5 Cabinet 160 kVА 35 pcs 6 Cabinet 250 kVА 50 pcs 7 Cabinet 400 kVА 55 pcs 8 Transformer 10000 kVА 1 pcs Pole-arms, stubs, cross-arms and insulators 9 Pole-arms steel concrete Type 1 (СВ 110) 2250 pcs 10 Pole-arms Type 2 (СК22) 155 pcs 11 Pole, metal/angle 43 pcs 12 Stubs 172 pcs 13 Pole, treated wood 300 pcs 14 Cross-arms 0.4 kV 650 pcs 15 Cross-arms 6 kV 350 pcs 16 Cross-arms 10 kV 750 pcs 17 Insulators 0.4 kV 7000 pcs 18 Insulators 10 kV 17000 pcs 19 Insulators 35 kV 7000 pcs Wires, cables and box joint 20 Wire АС-50 30000 kg 21 Wire АС-70 11250 kg 22 Wire АС-95 32500 kg 23 Non-insulated wire 50 mm2 40000 kg 24 Insulated wire 10 mm2 12500 m 25 Insulated wire 35 mm2 1050 m 26 Insulated wire 50 mm2 1500 m 27 Insulated wire 4х16 mm2 60 m 28 Protective insulated wire 1х50 mm2 - 10 kV 2500 m 29 Protective insulated wire 1х50 mm2 - 1 kV 4000 m 30 Tee clamps 400 m 31 Twin wire 2х6 mm2 300000 m 32 Aluminum cable with lead coating 3х120 mm2 700 m 33 Aluminum cable with lead coating 3х150 mm2 1700 m 34 Four-core cable 3х16 mm2 + 1х10 mm2 6250 m 35 Four-core cable 3х25 mm2 + 1х10 mm2 2100 m 36 Four-core cable 3х35 mm2 + 1х16 mm2 420 m 37 Four-core cable 3х50 mm2 + 1х25 mm2 1400 m 38 Four-core cable 3х95 mm2 + 1х50 mm2 1050 m 39 Four-core cable 3х120 mm2 + 1х70 mm2 2050 m 40 Four-core cable 3х150 mm2 + 1х95 mm2 1050 m 41 Box joint 3х120/150 mm2 110 pcs 42 Terminal box 3х120 mm2 -- 3х150 mm2 92 pcs Rolled metal Q-ty Unit 43 Rolled metal 4 mm 195000 m 44 Rolled metal 8 mm 17500 m 46 45 Rolled metal 14 mm 8400 m Fuses, chopper switches, closing switches, disconnect switch 46 Fuses 10 kV 350 pcs 47 Hopper switches 0.4 kV 250 А 420 pcs 48 Сhopper switches 0.4 kV 400 А 420 pcs 49 Motored load break switch 35 kV 4 set 50 Motored disconnect switch 35 kV 9 set 51 Load break switch 10 kV 20 set 52 indoor installation breaker switch 10 kV 20 set 53 Outdoor installation breaker switch 10 kV 50 set 54 Single pole switch 40 А 28000 pcs 55 Single pole switch 50 А 2450 pcs 56 Triple pole switch 100 А 140 pcs 57 Switching device cabinet 10 kV 10 set Special purpose machinery 58 Crane truck with 16 ton capacity 2 Unit 59 Wheelbase anchor truck 1 Unit 60 Truck-mounted crane 1 Unit 61 Lift truck 1 Unit 62 Special purpose vehicle with electric laboratory 35 kV 2 Unit 63 Backhoe loader 3 Unit 64 Personnel and equipment transportation vehicle 19 Unit 65 Personnel transportation vehicle 8 Unit 66 Light duty vehicle 4х4 1 Unit 67 Portable compressed air pump, 10 bar 1 Unit 68 Truck with 15.5 ton manipulator arm 1 Unit Meters 69 Single-phase meter 50 А with installation box 19300 pcs 70 Installation box for single-phase meter 12700 pcs 71 Three-phase meter 600 pcs Computer equipment 72 Desktop computer 9 set 73 Notebook with carrying case 7 set 74 MFD 6 set 75 Printer 1 set 76 Telephone set 1 set 77 Digital camera 3 set 78 USB flash drive 5 set 79 Copier А3 1 set 80 Projector 1 set 81 Fax machine 1 set 82 Portable radio set 1 set 47 Contract/Lot No. and Amount # Date Contract and Party Name US$ 1 KG-PCO-01/4 as of Supply of complete transformer substations and 1,161,445.00 05.10.2011 power transformers - OJSC “Kentauskiy transformatorniy zavod” (Kentau Transformer Plant) 2 KG PCO 002 as of Supply of cross-arms - OJSC “Nasosniy zavod-5” 29,976.79 27.10.2011 (Pump Plant #5) 3 KG PCO 002 LOT1А Supply of concrete poles, OJSC “Zavod JBI-4” 83,195.74 as of 03.05.2011 (Concrete Goods Plant #4) 4 KG PCO 002 LOT1В; Supply of cross-arms 10 kV, LLC “AsiaTransCable” 48,404.26 29.04.2011 5 KG PCO 002 LOT2А; Supply of concrete poles, OJSC “Zavod JBI-4” 83,195.74 03.05.2011 (Concrete Goods Plant #4) 6 KG PCO 002 LOT3А; Supply of concrete poles, OJSC “Zavod JBI-4” 83,195.74 03.05.2011 (Concrete Goods Plant #4) 7 KG PCO 002 LOT3В; Supply of cross-arms 0.4 kV, LLC “Energetic TBB” 19,361.70 29.04.2011 8 KG PCO 003/1; Supply of poles, LLC “AsiaTransCable” 398,910.64 14.12.2011 9 KG PCO 004 LOT 1; Supply of metal (detached, angle, anchor) for single 233,837.23 14.05.2011 chain HV line-35 kV, LLC “ChuiElectroStroy” 10 KG PCO 004 LOT 2- Supply of reinforced concrete for metal pole-arms, 142,487.12 1; 12.03.2012 OJSC “Temir-Tash” 11 KG PCO 005 LOT 1; Supply of wires АС-95, АС-70, АС-50, LLC “Cable” 122,872.34 29.04.2011 12 KG PCO 005 LOT 2; Supply of wires АС-95, АС-70, АС-50, LLC “Cable” 6,989.36 29.04.2011 13 KG PCO 005 LOT 3; Supply of wires, LLC “Uralmetprom” 37,190.74 10.11.2011 14 KG PCO 006 LOT1; Supply of cables, LLC “Cable” 111,602.13 29.07.2011 15 KG PCO 006/2-1; Supply of cables, LLC “Uralmetprom” 24,935.89 25.02.2012 16 KG PCO 006 LOT 3 Supply of cables, CJSC “ROSMUFTA” 17,440.00 ОE; 08.08.2011 17 KG PCO 007/1; Supply of crane truck, CJSC “BG-Auto” 247,916.00 01.07.2011 18 KG PCO 008/1-1; Supply of drilling and crane truck, LLC 82,978.72 “Technoexport” 19 KG PCO 008/1-2; Supply of crane truck, LLC “Technoexport” 73,404.26 23.04.2012 20 KG PCO 008/2-1; Supply of truck-mounted crane, LLC “Olivia 50,850.00 31.08.2012 Service” 21 KG PCO 009/1; Supply of special purpose vehicle with electric 259,500.00 28.10.2011 laboratory as to test cable line faults and equipment up to 35 kV, LLC “Molniya” 22 KG PCO 010/1; Supply of backhoe loader, LLC “ABT” 85,400.00 23.08.2011 23 KG PCO 011-1-ОE; Supply of single-phase meters, OJSC “Meridian” 90,650.00 15.07.2011 48 24 KG PCO 012 OJE/1, Supply of personnel and equipment transportation 224,856.35 3, 4; 09.08.2011 vehicles, LLC “ABM-Auto” 25 KG PCO 013/1 O; Supply of power transformer 35/10 kV 10000kVА, 171,131.50 25.07.2012 OJSC “Kentauskiy transformatorniy zavod” (Kentau Transformer Plant) 26 KG PCO 014/1; Supply of metal wires of various sections, LLC 26,390.77 14.12.2011 “AsiaTransCable” 27 KG PCO 015/1-1; Supply of insulators for powerlines; OJSC “UAIZ” 113,265.96 22.10.2012 28 KG PCO 015/2-1; Supply of insulators for powerlines (lot 2); LLC 61,957.45 31.03.2012 “Dafina” 29 KG PCO 016/1-4; Supply of switching equipment; CJSC 416,910.64 30.06.2012 “Soyuzelectroavtomatika” 30 KG PCO 016/2-1/; Supply of switching equipment; LLC “Profit 19,585.11 30.09.2013 Express” 31 KG PCO 016/3-1; Supply of switching equipment; LLC “Dafina” 42,019.36 31.03.2012 32 KG PCO 017/1; Supply of computers and computer equipment, LLC 25,650.68 31.10.2011 “Ultra-Technics” 33 KG PCO 024/2; Supply of portable compressors, LLC “ABC - metal” 28,699.40 01.10.2012 34 KG PCO 025/2; Supply of portable radio set, LLC “Akaziya 44,726.36 03.11.2011 Electronics” 35 KG PCO 029; Supply of wires, LLC “Chuielectrostroy” 99,751.49 14.11.2011 36 KG PCO 030; OJE/O , Supply of wires, LLC “Danko Service” 72,872.34 04.11.2011 37 KG PCO 031/2-1, Supply of specialized machinery, LLC “ABM-Auto” 233,042.55 25.11.2011 38 KG PCO 035/1, Supply of single-phase meters, meter installation 328,162.80 06.12.2011 boxes and triple-phase meters; LLC “Algol” 39 KG PCO 035-2/1, Supply of twin core PU cable 0.4 kV2*6mm2 and 122,772.00 07.12.2011 metal wires of 4mm for grounding; LLC “RIAL Service” 40 KG-PCO-41/1, lot 3,6 Supply of complete transformer substations and 427,525.00 as of 22.10.2012 power transformers, OJSC “Kentauskiy transformatorniy zavod” (Kentau Transformer Plant) 41 KG-PCO-41/1-1, lot Supply of complete transformer substations and 576,483.00 1,2,4,5 as of power transformers, OJSC “Kentauskiy 09.01.2013 transformatorniy zavod” (Kentau Transformer Plant) 42 KG-PCO-42/2 as of Supply of concrete poles, LLC “Apex com” 178,710.70 05.02.2013 43 KG-PCO-43/2- as of Supply of wooden poles, LLC “ABC-metal” 51,462.77 31.08.2013 44 KG-PCO-044/2 as of Supply of cross-arms, LLC “Chuielectrostroy” 25,419.57 15.02.2013 45 KG-PCO-045/2 as of Supply of non-insulated wires, LLC “AK-AU 225,280.00 25.10.2013 Electric DIS TIC. KOLL. STI.” 46 KG-PCO-46/2 as of Supply of: 1) PVC cable with wire cross-section of 28,191.49 29.03.2013 3*120 + 1*70 mm²; 2) High voltage cable with lead coating and cross-section of 3*150 mm2, LLC “Daraut Service” 49 47 KG-PCO-48/2 as of Supply of manual three-pole line two-column 14,265.96 29.03.2013 disconnector of external installation box 10 kV, LLC “Profit Express” 48 KG-PCO-049/2-2 as Wheel-based backhoe loader - 1 0.4, CJSC “Envod” 30,000.00 of 30.08.2013 49 KG-PCO-049/4-1-3 as Truck-mounted crane with manipulator arm: 15.5 ton 69,975.00 of 27.08.2013 - 1 0.4, Consortium Alliance Machinery Group 50 KG-PCO-54/2 as of Supply of power transformers, OJSC “Kentauskiy 145,000.00 10.10.2013 transformatorniy zavod” (Kentau Transformer Plant) 51 KG-PCO-55 as of Supply of concrete poles, LLC “Hydrobetonstroy” 150,702.08 23.11.2013 52 KG-PCO-56/1 as of Supply of insulators, CJSC “Alamudunenergo” 55,106.38 23.11.2013 53 KG-PCO-57/2 as of Supply of power transformers, OJSC “Kentauskiy 135,975.00 23.11.2013 transformatorniy zavod” (Kentau Transformer Plant) 54 KG-PCO-58/2 as of Supply of power transformers, OJSC “Kentauskiy 112,560.00 23.11.2013 transformatorniy zavod” (Kentau Transformer Plant) Total 7,754,191.13 54 contracts were executed for OJSC "Oshelectro" totaling US$7,754,191.13. 4. OJSC “Jalalabatelectro” – to the amount of US$3,772.416. The package transformer substations and power transformers, pole-arms, cross-arms, wires, cables, meters, crane trucks, personnel transportation vehicles, backhoe loader, anchor trucks, insulators and fuses were purchased for OJSC “Jalalabatelectro”. OJSC "Jalalabatelectro" Transformers and cabinets Q-ty Unit 1 Transformer 160 kVА 55 pcs 2 Transformer 250 kVА 135 pcs 3 Transformer 400 kVА 100 pcs 4 Transformer 630 kVА 25 pcs 5 Cabinet 160 kVА 35 pcs 6 Cabinet 250 kVА 40 pcs 7 Cabinet 400 kVА 35 pcs 8 Transformer 10000 kVА 1 pcs Pole-arms, stubs, cross-arms and insulators 9 Pole-arms steel concrete Type 1 (СВ 110) 1450 pcs 10 Pole-arms Type 2 (СК22) 155 pcs 11 Pole, metal/angle 43 pcs 12 Stubs 172 pcs 13 Pole, treated wood 300 pcs 14 Cross-arms 0.4 kV 450 pcs 15 Cross-arms 6 kV 150 pcs 16 Cross-arms 10 kV 550 pcs 17 Insulators 0.4 kV 3000 pcs 18 Insulators 10 kV 13000 pcs 19 Insulators 35 kV 3000 pcs Wires, cables and box joints 50 20 Wire АС-50 30000 kg 21 Wire АС-70 11250 kg 22 Wire АС-95 32500 kg 23 Non-insulated wire 50 mm2 40000 kg 24 Insulated wire 10 mm2 12500 m 25 Insulated wire 35 mm2 1050 m 26 Insulated wire 50 mm2 1500 m 27 Insulated wire 4х16 mm2 60 m 28 Twin wire 2х6 mm2 175000 m 29 Aluminum cable with lead coating 3х120 mm2 300 m 30 Aluminum cable with lead coating 3х150 mm2 1300 m 31 Four-core cable 3х16 mm2 + 1х10 mm2 2000 m 32 Four-core cable 3х25 mm2 + 1х10 mm2 900 m 33 Four-core cable 3х35 mm2 + 1х16 mm2 180 m 34 Four-core cable 3х50 mm2 + 1х25 mm2 600 m 35 Four-core cable 3х95 mm2 + 1х50 mm2 450 m 36 Four-core cable 3х120 mm2 + 1х70 mm2 1450 m 37 Four-core cable 3х150 mm2 + 1х95 mm2 450 m 38 Box joint 3х120/150 mm2 30 pcs 39 Terminal box 3х120 mm2 -- 3х150 mm2 22 pcs Rolled metal 40 Rolled metal 4 mm 130000 m 41 Rolled metal 8 mm 7500 m 42 Rolled metal 14 mm 3600 m Fuses, chopper switches, closing switches, disconnect switches 43 Fuses 10 kV 150 pcs 44 Сhopper switch 0.4 kV 250 А 180 pcs 45 Сhopper switch 0.4 kV 400 А 180 pcs 46 Load break switch 10 kV 10 set 47 Indoor installation breaker switch 10 kV 10 set 48 Outdoor installation breaker switch 10 kV 55 set 49 Single pole switch 40 А 12000 pcs 50 Single pole switch 50 А 1050 pcs 51 Triple pole switch 100 А 60 pcs Special purpose machinery 52 Crane truck of 16 ton capacity 2 units 53 Anchor truck 1 units 54 Truck-mounted crane 1 units 55 Lift truck 1 units 56 Special purpose vehicle with electric laboratory 35 kV 1 units 57 Backhoe loader 2 units 58 Personnel and equipment transportation vehicle 17 units 59 Light duty vehicle 4х4 1 units 60 Truck with 15.5 ton manipulator arm 1 units Meters 61 Single-phase meter 50А with installation box 11700 pcs 62 Installation box for single-phase meter 7300 pcs 63 Three-phase meter 400 pcs Computer equipment 51 64 Desktop computer 9 set 65 Notebook with carrying case 6 set 66 MFD 6 set 67 Printer 1 set 68 Telephone set 2 set 69 Digital camera 2 set 70 USB flash drive 5 set 71 Portable radio set 1 set Contract/Lot # and Amount n # Date Contract and Party Name US$ Supply of complete transformer substations and power KG-PCO-01/3 as of 1 transformers, OJSC “Kentauskiy transformatorniy 852,525.00 05.10.2011 zavod” (Kentau Transformer Plant) KG PCO 002 as of Supply of cross-arms, OJSC “Nasosniy zavod-5” 2 12,847.19 27.10.2011 (Pump Plant #5) KG PCO 002 LOT1А Supply of concrete poles, OJSC “Zavod JBI-4” 3 35,655.32 as of 03.05.2011 (Concrete Goods Plant #4) KG PCO 002 4 Supply of cross-arms 10 kV, LLC “AsiaTransCable” 20,744.68 LOT1В; 29.04.2011 KG PCO 002 Supply of concrete poles, OJSC “Zavod JBI-4” 5 35,655.32 LOT2А; 03.05.2011 (Concrete Goods Plant #4) KG PCO 002 Supply of concrete poles, OJSC “Zavod JBI-4” 6 35,655.32 LOT3А; 03.05.2011 (Concrete Goods Plant #4) KG PCO 002 7 Supply of cross-arms 0.4 kV, LLC “Energetic TBB” 8,297.87 LOT3В; 29.04.2011 KG PCO 003/2; 8 Supply of poles, LLC “AsiaTransCable” 14.12.2011 398,910.64 KG PCO 004 LOT 1; Supply of metal (detached, angle, anchor) for single 9 233,837.23 14.05.2011 chain HV line-35 kV, LLC “ChuiElectroStroy” KG PCO 004 LOT 2- Supply of reinforced concrete for metal pole-arms, 10 142,487.12 2; 12.03.2012 OJSC “Temir-Tash” KG PCO 005 LOT 1; 11 Supply of wires АС-95, АС-70, АС-50, LLC “Cable” 122,872.34 29.04.2011 KG PCO 005 LOT 2; 12 Supply of wires АС-95, АС-70, АС-50, LLC “Cable” 6,989.36 29.04.2011 KG PCO 006 LOT1; 13 Supply of cables, LLC “Cable” 46,674.47 29.07.2011 KG PCO 006/2-2; 14 Supply of cables, LLC “Uralmetprom” 10,686.81 25.02.2012 KG PCO 006 LOT 3 15 Supply of cables, CJSC “ROSMUFTA” 4,540.00 JE; 08.08.2011 KG PCO 007/2; 16 Supply of crane truck, CJSC “BG-Auto” 247,916.00 04.07.2011 KG PCO 008/1-3; Supply of drilling and crane vehicle, LLC 17 82,978.72 23.04.2012 “Technoexport” KG PCO 008/1-4; 18 Supply of crane truck, LLC “Technoexport” 73,404.26 23.04.2012 KG PCO 008/2-2; Supply of truck-mounted crane, LLC “Olivia 19 50,850.00 31.08.2012 Service” 52 Supply of special purpose vehicle with electric KG PCO 009/2; 20 laboratory as to test cable line faults and equipment up 128,500.00 28.10.2011 to 35 kV, LLC “Molniya” KG PCO 010/2; 21 Supply of backhoe loader LLC “ABT” 85,400.00 23.08.2011 KG PCO 011-1-JE; 22 Supply of single-phase meters, OJSC “Meridian” 38,850.00 15.07.2011 KG PCO 012 OJE/1, Supply of personnel and equipment transportation 23 51,778.50 4; 09.08.2011 vehicles, LLC “ABM-Auto” Supply of power transformer 35/10 kV 10000kVА, KG PCO 013/1 J; 24 OJSC “Kentauskiy transformatorniy zavod” 171,131.50 25.07.2012 (Kentau Transformer Plant) KG PCO 014/2; Supply of metal wires of various sections, LLC 25 11,310.33 14.12.2011 “AsiaTransCable” KG PCO 015/1-2; 26 Supply of insulators for powerlines; OJSC “UAIZ” 48,542.55 22.10.2012 KG PCO 015/2-2; Supply of insulators for powerlines (lot 2); LLC 27 26,553.19 31.03.2012 “Dafina” KG PCO 016/2-2/; Supply of switching equipment; LLC “Profit 28 12,170.21 30.09.2013 Express” KG PCO 016/3-2; 29 Supply of switching equipment; LLC “Dafina” 18,008.30 31.03.2012 KG PCO 017/2; Supply of computers and computer equipment, LLC 30 14,634.87 31.10.2011 “Ultra-Technics” KG PCO 025/3; Supply of portable radio set , LLC “Akaziya 31 11,65583 03.11.2011 Electronics” KG PCO 029; 32 Supply of wires, LLC “Chuielectrostroy” 99,751.49 14.11.2011 KG PCO 030; OJE/J , 33 Supply of wires, LLC “Danko Service” 72,872.34 04.11.2011 KG PCO 031/2-2, 34 Supply of specialized machinery, LLC “ABM-Auto” 233,042.55 25.11.2011 KG PCO 035/2, Supply of single-phase meters, meter installation 35 218,775.20 06.12.2011 boxes and triple-phase meters; LLC “Algol” Supply of twin core PU cable of 0.4 kV2*6mm2 and KG PCO 035-2/1, 36 metal wires of 4mm for grounding; LLC “RIAL 81,848.00 07.12.2011 Service” Supply of complete transformer substations and power KG-PCO-41/2, lot 37 transformers, OJSC “Kentauskiy transformatorniy 256,090.00 3,6 as of 22.10.2012 zavod” (Kentau Transformer Plant) KG-PCO-41/2-2 , lot Supply of complete transformer substations and power 38 1,2,4,5 as of transformers, OJSC “Kentauskiy transformatorniy 446,920.00 09.01.2013 zavod” (Kentau Transformer Plant) KG-PCO-42/1 as of 39 Supply of concrete poles, LLC “Apex com” 178,710.70 30.01.2013 KG-PCO-044/1 as of 40 Supply of cross-arms, LLC “Chuielectrostroy” 25,419.57 01.02.2013 KG-PCO-045/1 as of Supply of non-insulated wires, LLC “AK-AU 41 225,280.00 25.10.2013 Electric DIS TIC. KOLL. STI.” 53 Supply 1) PVC cable with wire cross-section of 3*120 KG-PCO-46/1 as of + 1*70 mm²; 2) High voltage cable with lead coating 42 28,191.49 31.03.2013 and cross-section of 3*150 mm2, LLC “Daraut Service” Supply of manual three-pole line two-column KG-PCO-48/1 as of 43 disconnector of external installation box 10 kV, LLC 14,265.96 31.03.2013 “Profit Express” KG-PCO-049/4-1-2 Truck-mounted crane with manipulator arm: 15.5 ton - 44 69,975.00 as of 27.08.2013 1 0.4, Consortium Alliance Machinery Group Supply of power transformers, OJSC “Kentauskiy KG-PCO-54/1 as of 45 transformatorniy zavod” (Kentau Transformer 145,000.00 10.10.2013 Plant) KG-PCO-55/2 as of 46 Supply of concrete poles, LLC “Hydrobetonstroy” 100,468.05 23.11.2013 KG-PCO-56/2 as of 47 Supply of insulators, CJSC “Alamudunenergo” 55,106.38 23.11.2013 Supply of power transformers, OJSC “Kentauskiy KG-PCO-57/1 as of 48 transformatorniy zavod” (Kentau Transformer 135,975.00 23.11.2013 Plant) Supply of power transformers, OJSC “Kentauskiy KG-PCO-58/1 as of 49 transformatorniy zavod” (Kentau Transformer 112,560.00 23.11.2013 Plant) Total 5,542,314.68 49 contracts were executed for OJSC “Jalalabatelectro” totaling US$5,542,314.68. 5. OJSC “Vostokelectro” – to the amount of US$303,191. The package transformer substations and power transformers, crane trucks, pole-arms, cross-arms, wires, cables were purchased for OJSC “Vostokelectro”. OJSC "Vostokelectro" Transformers and cabinets Q-ty Unit 1 Transformer 160 kVА 60 pcs 2 Transformer 250 kVА 125 pcs 3 Transformer 400 kVА 130 pcs 4 Transformer 630 kVА 65 pcs 5 Cabinet 160 kVА 30 pcs 6 Cabinet 250 kVvА 40 pcs 7 Cabinet 400 kVА 45 pcs Pole-arms, stubs, cross-arms and insulators 8 Pole-arms steel concrete Type 1 (СВ 110) 300 pcs 9 Pole, treated wood 300 pcs 10 Cross-arms 0.4 kV 300 pcs 11 Cross-arms 10 kV 400 pcs 12 Insulators 10 kV 10000 pcs Wires, cables and box joint 13 Wire АС-50 20000 kg 14 Non-insulated wire 50 mm2 40000 kg 15 Aluminum cable with lead coating 3х150 mm2 1000 m 54 16 Four-core cable 3х120 mm2 + 1х70 mm2 1000 m Fuses, chopper switches, closing switches, disconnect switch 17 Outdoor installation breaker switch 10 kV 45 set Special purpose machinery 18 Crane truck with 16 ton capacity 2 unit 19 Truck with 15.5 ton manipulator arm 1 unit Contract/Lot # Amount # And Date Contract And Party Name US$ Supply of complete transformer substations and power KG-PCO-01/2 as 1 transformers, OJSC “Kentauskiy transformatorniy 801,040.00 of 05.10.2011 zavod” (Kentau Transformer Plant) KG PCO 031/1-2, 2 Supply of 16 ton crane trucks, LLC “Asiaautocenter” 210,255.32 25.11.2011 KG-PCO-41/4, lot Supply of complete transformer substations and power 3 3,6 as of transformers, OJSC “Kentauskiy transformatorniy 247,650.00 22.10.2012 zavod” (Kentau Transformer Plant) KG-PCO-41/4-4 , Supply of complete transformer substations and power 4 lot 1,2,4,5 as of transformers, OJSC “Kentauskiy transformatorniy 372,650.00 09.01.2013 zavod” (Kentau Transformer Plant) KG-PCO-42/3 as 5 Supply of concrete poles, LLC “Apex com” 89,355.33 of 30.01.2013 KG-PCO-43/3- as 6 Supply of wooden poles, LLC “ABC-metal” 51,462.77 of 31.08.2013 KG-PCO-44/3 as 7 Supply of cross-arms, LLC “Chuielectrostroy” 25,419.57 of 15.02.2013 KG-PCO-045/3 as Supply of non-insulated wires, LLC “AK-AU Electric 8 225,280.00 of 25.10.2013 DIS TIC. KOLL. STI.” Supply 1) PVC cable with wire cross-section of 3*120 + KG-PCO-46/3 as 9 1*70 mm²; 2) High voltage cable with lead coating and 28,191.49 of 31.03.2013 cross-section of 3*150 mm2, LLC “Daraut Service” Supply of manual three-pole line two-column KG-PCO-48/3 as 10 disconnector of external installation box 10 kV, LLC 14,265.96 of 31.03.2013 “Profit Express” KG-PCO-049/4-1- Truck-mounted crane with manipulator arm: 15.5 ton - 1, 11 69,975.00 1 as of 24.09.2013 Consortium Alliance Machinery Group KG-PCO-54/3 as Supply of power transformers, OJSC “Kentauskiy 12 105,000.00 of 10.10.2013 transformatorniy zavod” (Kentau Transformer Plant) KG-PCO-56/3 as 13 Supply of insulators, CJSC “Alamudunenergo” 55,106.38 of 23.11.2013 KG-PCO-57/3 as Supply of power transformers, OJSC “Kentauskiy 14 97,125.00 of 23.11.2013 transformatorniy zavod” (Kentau Transformer Plant) KG-PCO-58/3 as Supply of power transformers, OJSC “Kentauskiy 15 112,560.00 of 23.11.2013 transformatorniy zavod” (Kentau Transformer Plant) Total 2,505,336.82 15 contracts were executed for OJSC “Vostokelektro” totaling US$2,505,336.82. 55 6. OJSC “Bishkekteploset” – to the amount of US$2,800,000. The pre-insulated pipes, heat points, meters, crane trucks and excavators were purchased for OJSC “Bishkekteploset”. OJSC "Bishkekteploset" Special purpose machinery Q-ty Unit 1 Backhoe loader 1 unit 2 Truck with 4.5 ton manipulator arm 2 unit 3 Truck with 15.5 ton manipulator arm 2 unit Pipes for heat supply system 4 PU coated pipes and shaped pieces pcs Individual heat points 5 Individual heat inlets to apartment houses pcs Meters 6 Hot water meters for heat inlets pcs Contract/Lot # and Amount # Contract and Party Name Date US$ KG PCO 026 Supply of insulated pipes and shaped pieces, LLC “PFK 1 714,542.55 BDHE; 07.07.2011 TRUBMET” KG-PCO-026-2; 2 Supply of individual heat points, LLC “CIC” 1,411,344.97 23.08.2011 KG-PCO-026-3; 3 Supply of hot water meters, LLC “Systema” 28,308.99 16.06.2011 KG-PCO-026-4; 4 Supply of individual heat points, LLC “CIC” 418,484.96 17.10.2011 KG-PCO-026-5; Supply of specialized machinery, lot 1-2, LLC 5 364,550.00 20.03.2012 “Asiamotors” KG-PCO-049/4-1-4 Truck-mounted crane with manipulator arm: 15.5 ton - 1 6 69,975.00 as of 21.08.2013 each. Consortium Alliance Machinery Group KG-PCO-50 as of 7 Supply of individual heat points, LLC “CIC” 503,382.54 20.06.2013 Total 3,510,589,01 7 contracts were executed for OJSC “Bishkekteploset” totaling US$3,510,589.01. 7. Kyrgyzjilkommunsoyuz” State Enterprise – to the amount of US$2,090,418. “Kyrgyzjilkommunsoyuz” State Enterprise was supplied with the oil fuel in the amount of US$2,625,000, backhoe loader in the amount of US$256,200. “Kyrgyzjilkommunsoyuz” State Enterprise # Special purpose machinery Q-ty Unit 1 Backhoe loader 6 unit Oil fuel 2 PU coated pipes and shaped pieces 5000 unit 56 Contract/Lot # and Amount # Date Contract and Party Name US$ KG PCO 010/3; Supply of backhoe loader LLC “ABT” and SE 1 256,200.00 23.08.2011 “Kyrgyzjilkommunsoyuz” KG PCO 027; Supply of oil fuel, LLC “Kommuna Express” and 2 2,625,000.00 02.09.2011 SE “Kyrgyzkjilkommunsoyuz” Total 2,881,200.00 2 contracts were executed for SE “Kyrgyzjilkommunsoyuz” totaling US$2,881,200.00. 8. OJSC “Kyrgyzgas” – to the amount of US$1,889.938. The personnel and equipment transportation vehicles, backhoe loader, steel pipes, shut-off valves, gas meters, mobile compressor system, crane truck were supplied for OJSC “Kyrgyzgas”. OJSC "Kyrgyzgas" Special purpose machinery Q-ty Unit 1 Crane truck with 16 ton capacity 2 unit 2 Backhoe loader 5 unit 3 Personnel and goods transportation vehicle 6 unit 4 Portable compressed air pump, 10 bar 1 unit 5 Portable compressed air pump, 100 bar 1 unit Gas pipes 6 Steel pipe D15 20 tones 7 Steel pipe D20 21 tones 8 Steel pipe D25 25 tones 9 Steel pipe D32 1 tones 10 Steel pipe D57x3 17 tones 11 Steel pipe D76x3.2 16 tones 12 Steel pipe D89x3.5 17 tones 13 Steel pipe D108x4 12 tones Valves 14 Ball valve D15 1880 pcs 15 Ball valve D20 1035 pcs 16 Ball valve D25 920 pcs 17 Ball valve D50 50 pcs 18 Ball valve D80 20 pcs 19 Ball valve D100 12 pcs Gas meters, Gas control units, measurement systems, gas meter check systems 20 Gas meters for the public (G4) 12290 pcs 21 Gas control units 7 pcs 22 Gas meters for commercial customers (G6-25) 50 pcs 23 Vortex gas flow measuring system D80 7 pcs 24 Vortex gas flow measuring system D150 2 pcs 25 Gas flow measurement system 3 pcs 26 Gas meter check system 2 pcs 27 Gas meter check system (high capacity) 2 pcs Computer equipment 28 Portable radio set 1 set 57 Contract/Lot # and Amount # Date Contract and Party Name US$ KG PCO 010/4; Supply of backhoe loader LLC “ABT” and 1 213,500.00 23.08.2011 OJSC "Kyrgyzgas" Supply of personnel and equipment KG PCO 012 OJE/2; 2 transportation vehicles, LLC “ABM-Auto” 102,149.81 19.09.2011 and OJSC "Kyrgyzgas" KG PCO 019/1; Supply of pipes, "Redgate Business Corp." 3 75,762.88 31.08.2012 and OJSC "Kyrgyzgas" KG PCO 019/2; Supply of pipes, "Redgate Business Corp." 4 66,126.86 31.10.2011 and OJSC "Kyrgyzgas" Supply of stop valves, "Redgate Business 5 KG PCO 021; 23.01.2012 179,128.15 Corp." and OJSC "Kyrgyzgas" Supply of gas meters for the public, LLC 6 KG PCO 022; 14.11.2011 “Ala-Too Jani Shanchen” and OJSC 430,150.00 "Kyrgyzgas" Supply of gas meters for the public, LLC 7 KG PCO 023; 06.02.2012 “Ala-Too Jani Shanchen” and OJSC 144,160.00 "Kyrgyzgas" (lot #2 and #6) KG PCO 023/1; Supply of gas control units, "Redgate 8 46,528.40 27.08.2012 Business Corp." and OJSC "Kyrgyzgas" KG PCO 023/3; Supply of gas equipment, LLC “IIP Irvis” 9 45,803.81 01.04.2013 and OJSC "Kyrgyzgas" KG PCO 023/4; Supply of gas equipment, LLC “Ala-Too 10 51,000.00 02.10.2012 Jani Shanchen” and OJSC "Kyrgyzgas" KG PCO 023/5; Supply of gas equipment, LLC “Fakel” and 11 264,893.62 25.11.2013 OJSC "Kyrgyzgas" KG PCO 024/1; Supply of portable compressors, LLC “ABC- 12 114,797.62 01.10.2012 metal” and OJSC "Kyrgyzgas" KG PCO 024/2-1; Supply of portable compressors, "Redgate 13 370,212.77 30.11.2012 Business Corp." and OJSC "Kyrgyzgas" KG PCO 025/1; Supply of portable radio set , LLC “Akaziya 14 52,869.57 03.11.2011 Electronics” and OJSC "Kyrgyzgas" KG PCO 031/1-3, Supply of 16 ton crane trucks, LLC 15 210,255.32 25.11.2011 “Asiaautocenter” and OJSC "Kyrgyzgas" Total 2,367,338.81 15 contracts were executed for OJSC “Kyrgyzgas” totaling US$2,367,338.81. The contract and payment details are contained in the contract files and monitoring reports. Subsidiarity agreement term is 20 years, including grace period of 7 years. Interest rates are set at 1.5 percent for SE “Kyrgyzjilkommunsoyuz”, 2.5 percent for the rest of the above companies. 58 Original Subsidiary Executed Contracts Agreements Emergency Recovery Project US$ US$ OJSC "Oshelectro" 7,754,191.13 5,240,505.00 OJSC "Jalalabatelectro" 5,542,314.68 3,772,416.00 OJSC "Severelectro" 3,156,935.06 385,106.00 OJSC "Vostokelectro" 2,505,336.82 303,191.00 OJSC "Kyrgyzgas" 2,367,338.81 1,889,938.00 OJSC "Bishkekteploset" 3,510,589.01 2,800,000.00 SE "Kyrgyzjilkommunsoyuz" 2,881,200.00 2,090,418.00 OJSC "Electricheskie stancii" 6,440,776.39 14,705,000.00 34,158,681.90 31,186,574.00 59 Annex 10. List of Supporting Documents* 1. Project Implementation Plan 2. Emergency Project Paper for Kyrgyz Republic Emergency Recovery Project (ERP) dated September 16, 2010 (Report No: 56065-KG) 3. Aide Memoires, Back-to-Office Reports, and Implementation Status Reports. 4. Project Progress Reports. 5. MOF’s Borrower's Evaluation Report, dated February 2014 6. MOE’s Borrower's Evaluation Report: (i) MOF dated March 2014 *including electronic files 60 72E 74E 76E 78E 80E K A Z A K H S TA N 44N KYRGYZ REPUBLIC To To Ushtobe Burylbaytal To Panfilov Chu BISHKEK ts. u M Kara-Balta Tokmok ata Tyup Kirov ey -Al Cholpon-Ata To Shymkent T Talas alas CHUI K ung Karakol Balykchi Lake Issyk-Kul Peak Pobedy TA L A S Tunuk ISSYK-KUL 7439 m Barskaun Enilchek 42N 42N tkal ha Toktogul Toktogul C Chaek Reservoir Shyirak JALAL-ABAD T i Lake Sonkul a n n S h a Kara-Kul Kara-Say N a ry n Tash-Kumyr Nar yn Naryn U Z B E K I S TAN NARYN At-Bashy To Tashkent Jalal-Abad say Ak Lake 0 25 50 75 100 Kilometers Charyi-Kel' Kurs hab Osh 0 25 50 75 Miles 78E 80E Gul'cha To Kyzyl-Kiya Bukhoro 40N Sulyukta OSH 40N Batken KYRGYZ REPUBLIC B AT K E N Sary-Tash To Daraut- K yz yl Suu Hotan CHINA SELECTED CITIES AND TOWNS Korgan OBLAST CAPITALS NATIONAL CAPITAL RIVERS TA J I K I S TA N MAIN ROADS To Murghab This map was produced by the Map Design Unit of The World Bank. RAILROADS SEPTEMBER 2004 IBRD 33430 The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank OBLAST BOUNDARIES Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. INTERNATIONAL BOUNDARIES 70E 72E 74E 76E