The World Bank Report No: ISR6925 Implementation Status & Results Ukraine Power Transmission Project in Support of the Energy Sector Reform & Development Program (P096207) Public Disclosure Copy Operation Name: Power Transmission Project in Support of the Energy Sector Project Stage: Implementation Seq.No: 8 Status: ARCHIVED Archive Date: 11-Jan-2012 Reform & Development Program (P096207) Country: Ukraine Approval FY: 2008 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): National Power Company UkrEnergo Key Dates Board Approval Date 02-Aug-2007 Original Closing Date 30-Jun-2012 Planned Mid Term Review Date Last Archived ISR Date 11-Jan-2012 Effectiveness Date 05-Dec-2008 Revised Closing Date 31-Dec-2014 Actual Mid Term Review Date Project Development Objectives Project Development Objective (from Project Appraisal Document) The overall program objective is to improve the security, reliability and quality of energy supply, and, therefore, facilitateunimpeded operation of the energy market, both domestically and internationally. The main objective of the Power TransmissionProject is to improve the security, reliability and quality of power supply through the rehabilitation of transmission substationsand the strengthening of the power transmission network. The project will also aim to improve institutional capacity and technicalcapabilities of transmission system operator, UkrEnergo (UE), so that it can assure secure and reliable operation of the highvoltage power grid, and, therefore, facilitate unimpeded operation and opening up of the electricity market. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost A1. Rehabilitation of HV substations (Dnieper Electric Power Grid) 38.00 A2. Rehabilitation of HV substations (Donbas Electric Power Grid) 21.00 A3. Rehabilitation of 750 kV substations 77.10 Public Disclosure Copy B. Strengthening of transmission network 28.50 C. Stabilization of Crimea Electric Power Grid 14.00 D1. UE Institutional Development Management Information System 3.00 D2. UE Institutional Development Technical Assistance 3.70 E. Implementation of Grid Code 1.30 Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Page 1 of 9 The World Bank Report No: ISR6925 Previous Rating Current Rating Overall Implementation Progress (IP) Moderately Satisfactory Satisfactory Overall Risk Rating Public Disclosure Copy Implementation Status Overview Implementation has now gained momentum, with most of the contracts signed and works underway. The project is still at too early a stage to report meaningful progress towards meeting its development objectives. A conceptual plan for technical and legal harmonization with EU Energy Market is being updated. The new draft Wholesale Electricity Market law was under public review in June 2012. Locations Country First Administrative Division Location Planned Actual Ukraine Not Entered Zhidachov Ukraine Not Entered Vinnytsya Not Entered Not Entered Vinnytsya Ukraine Not Entered Simferopol'skii Raion Ukraine Not Entered Simferopol' Not Entered Not Entered Simferopol' Ukraine Not Entered Sevastopol' Not Entered Not Entered Sevastopol' Ukraine Not Entered Romny Ukraine Not Entered Radushnoye Ukraine Not Entered Nakhimovskiy Rayon Ukraine Not Entered Murovanokurilovetskiy Rayon Public Disclosure Copy Ukraine Not Entered Mogilev-Podol'skiy Rayon Ukraine Not Entered Mariupol' Ukraine Not Entered Makiyivka Ukraine Not Entered Kiev Not Entered Not Entered Kiev Ukraine Not Entered Kryvyy Rih Page 2 of 9 The World Bank Report No: ISR6925 Country First Administrative Division Location Planned Actual Not Entered Not Entered Kryvyy Rih Public Disclosure Copy Ukraine Not Entered Krynychky Ukraine Not Entered Khon'kovtsy Ukraine Not Entered Feodosiya Ukraine Not Entered Dzhankoy Ukraine Not Entered Dniprodzerzhyns'k Not Entered Not Entered Dniprodzerzhyns'k Ukraine Not Entered Barskiy Rayon Ukraine Not Entered Bar Not Entered Not Entered Bar Ukraine Not Entered Balaklavskiy Rayon Ukraine Not Entered Bakhchisarayskiy Rayon Ukraine Not Entered Bakhchysaray Ukraine Not Entered Artemovo Results Project Development Objective Indicators Public Disclosure Copy Page 3 of 9 The World Bank Report No: ISR6925 Indicator Name Core Unit of Measure Baseline Current End Target Power market opening Text Value 0% Power Market Opening, NERC has finalized WEM law Beginning of transition to a which is planned to be model of bilateral agreements Public Disclosure Copy approved by mid 2012 and with a trial balancing market when this is done Market will in 2013 and a model of be opened 100% bilateral agreements with a balancing market operational in 2014. Date 29-Dec-2006 18-May-2012 31-Dec-2014 Comments Market opening has started in Indicator name, target, and 2010 (about 10%). target date revised in level 2 Considerable progress in restructuring approved May harmonization with the EU 10, 2012. through Ukraine joining Energy Community Treaty ETC from January 2011 and implementation of ETC with gas and power laws. When WEM law is ratified Market will be opened 100% and implementation of WEM during next 5 years from 2012 to 2017. Support sustainable economic development by Text Value Estimated Energy not served Very good progress under Energy not served reduced by improving security, reliability, efficiency and due to transm. system signed contracts for Dnister at least 35 GWh/year quality of energy supply through investments failures: 747.3 GWh and Donbas SS including Transmission losses reduced (rehabilitation and strengthening of Transmission losses: 3.4% finalization of Bar SS by to less than 2.5%. Voltage transmission network) Voltage quality:voltage September but it is still too within acceptable range inall outside accept. range (+/-5% early to monitor ENS and substations included in the of the nominal voltage) in other baseline indicators. project. several substations Date 29-Dec-2006 18-May-2012 31-Dec-2014 Comments Too early to measure. When This indicator was not Public Disclosure Copy SS are in place UE will be included in the revised able to measure at each SS indicators in the restructuring, indicators and provide us with but will continue to be the data to access. monitored by the project team and will be formally added to the indicators through another restructuring later in 2012. Page 4 of 9 The World Bank Report No: ISR6925 Implementation of the Wholesale Electricity Text Value WEM concept adopted in NERC has finalized WEM law Trial Operation of market in Market (WEM) concept 2002 but not implemented. and sent it to MoECI for 2014. Draft law on Operational adoption and submission to Principles of Ukraine's Power Cabmin. When approved by Public Disclosure Copy Market Cabmin it will be sent to Rada for Ratification. Regular operation are expected when WEM law is ratified and all necessary sublaws and procedures approved and put in place by NERC. Date 29-Dec-2006 18-May-2012 31-Dec-2014 Comments Draft law prepared and under Slight change to name of review by different working indicator; end target and end groups and should be target date revised in level 2 submitted to the parliament by restructuring approved on summer 2012 and approved May 10, 2012. by end-2012. Intermediate Results Indicators Public Disclosure Copy Page 5 of 9 The World Bank Report No: ISR6925 Indicator Name Core Unit of Measure Baseline Current End Target Component A: Rehabilitation of Transmission Text Value Obsolete substation Contracts have been signed Completion of reconstruction Substations equipment and are under of 5 220 kV and 330 kV Public Disclosure Copy implementation. Bar SS is in substations. Replacement of final stage of completion. 130 circuit breakers at 750 kV S/S. Completion of installation of relay protection systems and automations systems at 750 kV S/S. Date 29-Dec-2006 18-May-2012 31-Dec-2014 Comments High Voltage Circuit Breakers Target reworded and target for 750 kV substations date extended in level 2 contract signed in December restructuring approved on 2010. Bar substation contract May 10, 2012. signed in April 2011, tendering for 3 other substations in Dniper Power Grid contract signed in July 2011 and for 2 other substations in Donbas signed in December 2011. Last package Protective Relaying and Automation for 750 kV Substations is planned to be signed by June 2012 completing all procurement packages. Implementation of contracts in process but will last for 3 summer seasons till December 31 2014. Component B: Strengthening of Transmission Text Value Inadequate transmission line Dnister - Bar contract was Expansion of Bar substation Network capacity signed in March 2011 and the and construction of Dnister- implementation of the contract Bar PSP transmission line Public Disclosure Copy has started with good completed by 2012. installation progress at the Improved voltage quality by site. As of May 2012 around 12/31/2014. 80 percent of works has been carried out and the contract is expected to be fully completed by October 2012. Date 29-Dec-2006 18-May-2012 31-Dec-2014 Comments Bar - Dniester transmission End target and end target line contract was signed in date revised in level 2 Page 6 of 9 The World Bank Report No: ISR6925 March 2011. By May 2012 restructuring approved on about 80% of the contract is May 10, 2012. completed and it is expected that by end of September Public Disclosure Copy 2012 fully TL will be completed. Component C: Stabilization of the Crimea Text Value Low reliability and quality of Contract 007 Modernization of Completion of modernization electric power grid power supply. 330 kV Simferopol substation of 330 kV S/S. Completion of and contract 008 on modernization of control Upgrading substation controls systems at 220 and 330 kV in the Crimea are signed and substations. under implementation. Date 29-Dec-2006 18-May-2012 31-Dec-2014 Comments Modernization of 330 kV End target and end target Simferopol substation. date revised in level 2 (Package UE/007, contract restructuring approved on amount US$ 7.2m). The May 10, 2012. contract was signed on January 31, 2012. Advance Payments are processed and preparation works are underway. Upgrading substation controls in the Crimea. (Package UE/008, contract amount US$ 6.8m). The contract was signed on December 3, 2011. The contractor provided Bank guarantees and payment documents for the advance payment are under the approval process by the respective ministries. Component D: Management Information Text Value Not established Contract with consultant is Completed implementation Public Disclosure Copy System signed and is under and commissioning, and in implementation. operation. Date 29-Dec-2006 18-May-2012 31-Dec-2014 Comments Consultancy Package UE/011 End target date revised in for the Management level 2 restructuring of May Information System (MIS) the 10, 2012. contract was signed on January 27, 2012. The consultants have started their Page 7 of 9 The World Bank Report No: ISR6925 work and are currently collecting information. Component E: Implementation of Grid Code. Text Value Developing Updated Grid code which was Adopted in 2013. Applied in revised by NERC is ready and 2014. Public Disclosure Copy awaiting WEM law approval and ratification after which it can be approved by NERC. Date 29-Dec-2006 18-May-2012 31-Dec-2014 Comments NERC approval expected End target dates revised in after approval of WEM Law by level 2 restructuring approved mid 2012. May 10, 2012 Data on Financial Performance (as of 01-Jun-2012) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P096207 IBRD-48680 Effective 02-Aug-2007 09-Nov-2007 05-Dec-2008 30-Jun-2012 31-Dec-2014 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P096207 IBRD-48680 Effective USD 200.00 200.00 0.00 36.83 163.17 18.00 Disbursement Graph Public Disclosure Copy Page 8 of 9 The World Bank Report No: ISR6925 Key Decisions Regarding Implementation The loan Closing Date was extended by 2.5 years until December 31, 2014. Public Disclosure Copy Restructuring History Level two Approved on 15-Oct-2011, Level two Approved on 09-May-2012 Related Projects There are no related projects. Public Disclosure Copy Page 9 of 9