The World Bank Report No: ISR13927 Implementation Status & Results Honduras Power Sector Efficiency Enhancement Project (PROMEF) (P104034) Public Disclosure Copy Operation Name: Power Sector Efficiency Enhancement Project (PROMEF) Project Stage: Implementation Seq.No: 10 Status: ARCHIVED Archive Date: 05-Apr-2014 (P104034) Country: Honduras Approval FY: 2009 Product Line: IBRD/IDA Region: LATIN AMERICA AND CARIBBEAN Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 22-Jan-2009 Original Closing Date 31-Dec-2013 Planned Mid Term Review Date 20-May-2013 Last Archived ISR Date 16-Sep-2013 Effectiveness Date 29-Jun-2010 Revised Closing Date 30-Jun-2015 Actual Mid Term Review Date 05-Jun-2013 Project Development Objectives Project Development Objective (from Project Appraisal Document) The project development objective is to improve ENEE's operational and financial performance, thus contributing to the sustainability of the power sector in Honduras. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Improving ENEE's commercial and corporate resource management 18.50 Rehabilitating distribution networks 14.60 Strengthening ENEE's institutional capacity and corporate governance 6.20 Overall Ratings Previous Rating Current Rating Public Disclosure Copy Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate High Implementation Status Overview Implementation status remains Moderately Satisfactory. While the Project closing date was extended, from December 2013 to June 2015, all of the Project components remain in process and on track. These include investments to modernize ENEE, including the installation of automated meters and management software (Component 1); the rehabilitation of distribution networks (Component 2); and institutional strengthening/corporate governance (Component 3). Component 1: Only one third of automated "smart" meters (1,750 in total) have been installed. These meters have been installed to enable ENEE to control and monitor the Page 1 of 6 The World Bank Report No: ISR13927 consumption of consumers that represent nearly half of energy billed. The Integrated Management System is currently being installed. The IMS will be completed by July 2014. The modernization also includes efforts to upgrade ENEE's corporate facilities, data centers, and use of technology. The PIU has organized significant capacity building activities to train employees, and prepare them for change. Public Disclosure Copy Component 2: This component includes the replacement of transformers which are contaminated with PCBs. As of today 100% of 1,000 transformers have been installed. In addition, ENEE has purchased 31 heavy vehicles to support the effort to rehabilitate the country's national distribution network. Component 3: Under Component 3, ENEE has been working to bring its financial reporting up to date. Audited financial statements for 2012 have been prepared, and analysis for 2013 is underway. Disbursements: Up to January 2013 the project has disbursed $18.143 million equivalent to 63% of the total credit. All but around $500,000 are expected to be committed by the end of the calendar year, putting the Project back on a sustainable disbursement trajectory. At the end of 2013, Honduras elected a new president. In parallel, a new electricity law was passed by the Congress of Honduras, in January. The reform promises to transform the electricity sector by allowing, for the first time, private investment in the entire sector (not just generation as previously). The reform contemplates the vertical unbundling of ENEE by, at the latest, July 1 2015, and the concession of ENEE's distribution, transmission, and generation business lines. The new law has the possibility to introduce important reforms. At the same time, the objectives of the Project remain highly relevant. Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Increase in the Cash Recovery Index (CRI) in Text Value To be defined NA 8% improvement from each of the three regional distribution sub- baseline networks Date 31-Dec-2012 31-Mar-2014 30-Jun-2015 Comments Implementation of the IMS is underway. Once completed, ENEE will be able to establish the baseline. Annual decrease in system average Text Value Average of the three month NA Improvement on an annual Public Disclosure Copy interruption duration index (SAIDI) period following basis implementation of the Incident Recording Management System (IRMS) in the whole company.Baseline: 3 mo. period prior to IRMS implementation Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 Comments Implementation of the IMS is underway. Once completed, Page 2 of 6 The World Bank Report No: ISR13927 ENEE will be able to establish the baseline. Annual decrease in system average Text Value Average of the three month NA Improvement on an annual interruption frequency index (SAIFI) period following basis Public Disclosure Copy implementation of the Incident Recording Management System (IRMS) in the whole company. Date 31-Dec-2012 31-Mar-2014 30-Jun-2015 Comments Implementation of the IMS is underway. Once completed, ENEE will be able to establish the baseline. Electricity losses per year in project area (core Percentage Value 22.50 29.00 15.00 indicator) Date 31-Dec-2010 31-Mar-2014 30-Jun-2015 Comments losses have remained around ~30 percent over the past year. Average interruption frequency per year in the Number Value project area (core indicator) Date 31-Dec-2012 31-Mar-2014 30-Jun-2015 Comments 3 month prior to IRMS IRMS not yet in place. To be defined once baseline implementation. value is established. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Outcome 1: Improve ENEE's commercial Text Value 30,000 4140 5,000 management.Indicator: Number of AMRs Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 installed Comments The team will confirm the actual amount during the supervision mission in March. Public Disclosure Copy Outcome 1: Improve ENEE's commercial Text Value Systems are not in place yet. In progress Systems in place and management.Indicator: CMS, IRMS and satisfactorily working CRMIS in place Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 Comments Implementation of the IMS is underway. Page 3 of 6 The World Bank Report No: ISR13927 Outcome 1: Improve ENEE's commercial Text Value 2008:0 40% of total customers management.Indicator: Number of customers Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 in CMS and IRMS database Comments To be monitored only once Public Disclosure Copy the CMS and the IRMS are in place. Outcome 1: Improve ENEE's commercial Text Value 2008:0 CMS: 50 or as needed IRMS: management.Indicator: Number of ENEE 10 or as needed CRMIS: 20 employees trained to use the CMS, IRMS, and or as needed CRMIS Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 Comments Team will be advised of the # of employees trained during the supervision mission Outcome 1: Improve ENEE's commercial Text Value Average of the 3 month Improvement in the average management.Indicator: Number of customer period following semiannual value compared claims related to billing implementation of the CMS in to the previous six month s main office s/whole company. Baseline data for 2008 under collection Date 31-Dec-2012 31-Mar-2014 30-Jun-2015 Comments To be monitored only once the CMS and the IRMS are in place. Outcome 2: Rehabilitate distribution networks. Text Value 2008:0 828 Cumulative Yr 1:0 Yr 2:250 Yr Indicator: Number of transformers replaced 3 750 Yr 4:1000 Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 Comments Outcome 2: Rehabilitate distribution networks. Text Value 2008:0 300 Cumulative Yr1: 0 Yr2: 50 Indicator: Number of PCB-containing Yr3: 200 Yr4: 350 equipment replaced Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 Comments Public Disclosure Copy Outcome 2: Rehabilitate distribution networks. Text Value 2008:0 30 Cumulative: Yr 1:5 Yr 2: 15 Yr Indicator: Number of heavy vehicles acquired 3: 25 Yr 4: 30 Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 Comments Outcome 3: Strengthen ENEE's institutional Text Value Separate business units do In progress Separate business units capacityIndicator: Setup and operation of not exist operational separate business units Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 Comments in Progress. Legal reforms require ENEE to separate Page 4 of 6 The World Bank Report No: ISR13927 business units by 6/2015 so additional urgency. Outcome 3: Strengthen ENEE's institutional Text Value Distribution and In progress. Distribution and capacityIndicator: Setup and operation of the Commercialization Unit does Commercialization Unit Public Disclosure Copy Distribution and Commercialization unit not exist. operational Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 Comments in Progress. Legal reforms require ENEE to separate business units by 6/2015 so additional urgency. Outcome 3: Strengthen ENEE's institutional Text Value No key staff in distribution and Key staff selected and in capacityIndicator: Competitive selection of key commercialization unit place personnel in the distribution and Date 31-Dec-2008 31-Mar-2014 30-Jun-2015 commercialization unit (3 managers, 10 key Comments Personnel for the D&C unit staff) have been competitively selected -- (HOW MANY?) Outcome 3: Strengthen ENEE's institutional Text Value Rate of acceptance of each Improvement in the average capacityConsumer satisfaction and perception group (e.g. consumers, annual value compared to the NGOs, civil society organizati previous year on) at time of first survey. Date 31-Dec-2012 31-Mar-2014 30-Jun-2015 Comments Value will be defined when project activities start implementation on the ground. Data on Financial Performance (as of 11-Mar-2014) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P104034 IDA-45360 Effective 22-Jan-2009 27-Feb-2009 29-Jun-2010 31-Dec-2013 30-Jun-2015 Public Disclosure Copy Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P104034 IDA-45360 Effective XDR 20.20 18.68 1.52 12.00 6.68 64.00 Disbursement Graph Page 5 of 6 The World Bank Report No: ISR13927 Public Disclosure Copy Key Decisions Regarding Implementation Continue implementation of IMS Continue implementation of Distribution Management Unit Restructuring History Level two Approved on 17-Jun-2010, Level two Approved on 04-Oct-2011, Level 2 CD Decision on 19-Dec-2013 Related Projects There are no related projects. Public Disclosure Copy Page 6 of 6