The World Bank Siddhirganj Power Project (P095965) REPORT NO.: RES35976 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SIDDHIRGANJ POWER PROJECT APPROVED ON OCTOBER 30, 2008 TO THE PEOPLE'S REPUBLIC OF BANGLADESH ENERGY & EXTRACTIVES SOUTH ASIA Regional Vice President: Hartwig Schafer Country Director: Robert J. Saum Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Demetrios Papathanasiou Task Team Leader: Md. Iqbal The World Bank Siddhirganj Power Project (P095965) ABBREVIATIONS AND ACRONYMS CCPP Combined Cycle Power Plan DO Development Objective EGCB Electricity Generation Company of Bangladesh EIA Environmental Impact Assessment EPC Engineering, Procurement and Construction GTCL Gas Transmission Company Limited GWh Gigawatt-hour O&M Operations and Maintenance PGCB Power Grid Company Bangladesh SIA Social Impact Assessment The World Bank Siddhirganj Power Project (P095965) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. BASIC DATA Product Information Project ID Financing Instrument P095965 Investment Project Financing Original EA Category Current EA Category Full Assessment (A) Full Assessment (A) Approval Date Current Closing Date 30-Oct-2008 30-Jun-2019 Organizations Borrower Responsible Agency Gas Transmission Comapny Limited (GTCL),Power Grid The People's Republic of Bangladesh Company of Bangladesh (PGCB),Electricity Generation Company of Bangladesh (EGCB) Project Development Objective (PDO) Original PDO The primary development objective is to support investments in peaking power supply capability in Bangladesh such that unmet demand for energy is reduced by 1-billion kWh per year. Unmet demand has an economic cost of at as much as 2% of GDP. A secondary development objective is to build capacity among the implementing agencies: Elctricity Generation Company of Bangladesh, Power Grid Company of Bangladesh, and Gas Transmission Company Limited (GTCL). Current PDO Increase supply of electricity to Bangladesh grid network. OPS_TABLE_PDO_CURRENTPDO The World Bank Siddhirganj Power Project (P095965) Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IDA-57370 13-Nov-2015 27-Dec-2015 15-Jun-2016 30-Jun-2019 176.71 58.02 116.10 IDA-45080 30-Oct-2008 13-Nov-2008 31-Mar-2009 30-Jun-2019 350.00 310.19 16.88 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No Note to Task Teams: End of system generated content, document is editable from here. I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING The team recommends to: (a) extend the Closing Date to December 31, 2019; (b) cancel SDR 11,656,850 from the Original Credit (Cr. 4508-BD); and (c) cancel SDR 16,790,000 from the Additional Financing Credit (Cr. 5737-BD). This is the third extension of the Closing Date. This recommendation follows a request from the Government of Bangladesh (GOB) through a letter dated January 24, 2019, to extend the closing date and “take necessary steps” to address the Project’s savings, which it estimated to be approximately US$41 million equivalent. Based on a joint assessment of project savings and financing requirements for the remaining IDA-financed components of the project, the total amount of IDA Credit proposed to be cancelled is SDR 28,446,850. The GOB has clarified through discussions with the Bank team that such steps mean cancellation of funds not needed for project completion. The project had made good progress but has been delayed due to contractor’s performance issues. The 230 kilo-Volt (kV) power evacuation system, the 60 kilometers (km) gas transmission pipeline, and the 217 Mega-Watt (MW) simple cycle power plant are in commercial operation. The project has made steady progress with a new contractor for the 335.4 MW Siddhirganj Combined Cycle Power Plant (CCPP), which is scheduled for commissioning in October 2019. Three additional contracts under a separate component (Enterprise Resource Planning (ERP), construction of school building, and Owner’s Engineering support) are expected to be completed by the new Closing Date. As of the last implementation review mission in January 2019, the project is rated moderately satisfactory in progress toward achievement of the Development Objective and Overall Implementation Progress. Fiduciary ratings are satisfactory for procurement and safeguards and moderately satisfactory for financial management as Electricity Generation Company of Bangladesh (EGCB) has not finalized its 10-year financial projection. There are no outstanding audits. The World Bank Siddhirganj Power Project (P095965) The performances of the implementing agencies (EGCB, Gas Transmission Company Limited (GTCL), and Power Grid Company of Bangladesh Limited (PGCB)), have been satisfactory, and Bank team and EGCB have agreed on the actions for successful and orderly completion of the project with GOB and all three implementing agencies: (1) EGCB, the implementing agency of CCPP, continues to operate and maintain the 217 MW Simple Cycle Power Plant and monitor, on monthly basis, the additional electricity (GWh) delivered to the grid. (2) EGCB strictly monitors construction of the Steam Cycle Power Plant, ensures commissioning from July 2019 and commercial operation from October 2019; and EGCB completes the overall CCPP facilities in December 2019. (3) GOB will process an extension of the Development Project Proforma (DPP) of EGCB up to June 2020 to enable EGCB to process invoices and finish their project related activities. II. DESCRIPTION OF PROPOSED CHANGES The following changes are proposed: (i) To extend the Closing Date of the Credits to December 31, 2019; (ii) To cancel SDR 11,656,850 from the Original Credit (Cr. 4508-BD) and SDR 16,790,000 from the Additional Financing Credit (Cr. 5737-BD). Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. I. SUMMARY OF CHANGES Changed Not Changed Components and Cost ✔ Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Disbursement Estimates ✔ Implementation Schedule ✔ Implementing Agency ✔ DDO Status ✔ Project's Development Objectives ✔ Results Framework ✔ Disbursements Arrangements ✔ The World Bank Siddhirganj Power Project (P095965) Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_COMPONENTS_TABLE COMPONENTS Current Current Proposed Proposed Cost Action Component Name Component Name Cost (US$M) (US$M) 335 MW Combined Cycle 335 MW Combined Cycle Power Power Plant (CCPP) including Plant (CCPP) including price and 457.75 Revised 418.03 price and physical physical contingencies contingencies 230 kV Power Evacuation 230 kV Power Evacuation System 39.50 No Change 39.50 System 60 km, 30-inch gas transmission 60 km, 30-inch gas line including price/physical 99.25 No Change transmission line including 99.25 contingencies price/physical contingencies Technical Assistance and MIS 56.00 No Change Technical Assistance and MIS 56.00 Exchange rate loss 0.00 No Change Exchange rate loss 0.00 TOTAL 652.50 612.78 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE The World Bank Siddhirganj Power Project (P095965) LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications 30-Jun-2018, 30-Jun- IDA-45080 Effective 31-Mar-2016 31-Dec-2019 30-Apr-2020 2019 IDA-57370 Effective 30-Jun-2018 30-Jun-2019 31-Dec-2019 30-Apr-2020 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation LOAN Disburs IDA-45080- 222,600,000.0 210,943,150.0 RESTRUCTUR ing&Re XDR 11,656,850.00 27-Jan-2019 001 0 0 ING, COST paying SAVINGS LOAN IDA-57370- Disburs 125,900,000.0 109,110,000.0 RESTRUCTUR XDR 16,790,000.00 27-Jan-2019 001 ing 0 0 ING, COST SAVINGS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IDA-45080-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: Gds, Wks, CS, Trng 222,600,000.00 210,337,993.96 210,943,150.00 100.00 100.00 Total 222,600,000.00 210,337,993.96 210,943,150.00 IDA-57370-001 | Currency: XDR iLap Category Sequence No: 1 Current Expenditure Category: Gds,Wks,NonCS, CS under Parts A&D1 The World Bank Siddhirganj Power Project (P095965) 125,900,000.00 101,073,742.14 109,110,000.00 100.00 100.00 Total 125,900,000.00 101,073,742.14 109,110,000.00 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes Year Current Proposed 2009 0.00 0.00 2010 678,463.25 678,463.25 2011 2,235,453.35 2,235,453.35 2012 10,585,330.56 10,585,330.56 2013 60,260,803.70 60,260,803.66 2014 85,166,441.30 85,166,441.05 2015 82,855,877.73 82,855,877.96 2016 81,296,842.05 50,222,259.28 2017 87,000,000.00 39,725,129.31 2018 63,000,000.00 12,686,341.19 2019 30,920,789.00 27,704,479.19 2020 0.00 60,490,000.00 . 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