PROJECT INFORMATION DOCUMENT (PID)

APPRAISAL STAGE

Report No.: AB3891

Project Name

/ Additional Financing for the Benin Energy Services Delivery Project APL-1
Region / AFRICA
Sector / Power (100%)
Project ID / P111019
Borrower(s) / GOVERNEMNT OF BENIN
Implementing Agency / Direction Générale de l’Energie (DGE); Communauté Electrique du Bénin (CEB); Société Béninoise d’Energie Electrique (SBEE)
Environment Category / [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
Date PID Prepared / May 12, 2008
Date of Appraisal Authorization / May 12, 2008
Date of Board Approval / June 26, 2008

1.  Country and Sector Background

Access to Electricity: Like most countries in Sub-Saharan Africa, the energy sector in Benin is dominated by the use of biomass-based energy sources. The use of electricity is limited to 1.8 million people equivalent to 24% of the population, which is slightly above the average for Sub Saharan Africa of 20 percent. This is due to an active policy pursued by the distribution utility Société Béninoise d’Energie Electrique (SBEE), which has been able to increase its customer base by about 7-10 percent every year since 1990.

Energy Sector at Cross-Roads: The year 2007 marked an important point in the development of Benin's energy sector with the interconnection of the power systems of Nigeria and Benin in February 2007 as a first step towards the West African Power Pool (WAPP). At the same time, Benin has been going through an energy crisis since early 2007 due to curtailed supply from its neighbors Ghana and Côte d’Ivoire. Thus, Benin’s energy sector continues to be caught between the opportunities and challenges that its high dependence on energy supplies from its neighbors presents. To ensure a sound development, both the Governments of Benin and Togo have among others endorsed a strategic plan for their joint generation and transmission utility Communauté Electrique du Bénin (CEB) for the years 2007 – 2026. Furthermore, an action plan for improving performance of SBEE has been agreed at the end of 2007.

Energy Crisis: Since early 2007, Benin has undergone a serious energy sector crisis due to lack of power availability from Ghana and Côte d’Ivoire which export to Benin about 80% of its electricity requirements. Lack of operational capacity at the distribution utility SBEE did reinforce the crisis. Following a brief recovery at the end of 2007 after the rainy season, in mid-2008 Benin is again subject to energy shortages. To address the power crisis, the Government of Benin (GoB) has procured additional power plant, and is supporting the rehabilitation of existing power plant.

2.  Objectives

Objectives: The development objectives of the original Energy Services Delivery Project (ESDP) are to (a) accelerate, in a commercially viable manner, the use of electricity for economic growth and social services and thus improve the quality of life in un-served and under-served areas (peri-urban and rural); (b) improve governance and ensure the financial sustainability of the sector, through the involvement of the private sector in partnership with the public sector, (c) reduce deforestation and increase access and diversify choice of renewable and cleaner fuels to the household and small and medium-sized enterprise sectors; and (d) promote regional cooperation while protecting the environment in a sustainable manner. This Additional Financing aims at scaling up these objectives.

3.  Rationale for Bank Involvement

The Energy Service Delivery credit, as approved by the Board in July 2004, was included in the Benin Country Assistance Strategy (CAS) for fiscal years 2004-2007. A new CAS for Benin is currently under preparation. It sets out a road map for World Bank Group support to Benin for the period of 2009-2011 with a focus on infrastructure, institutions, and policies. The ESDP and its additional financing remain consistent with the new CAS, which notes that affordable and reliable electric power is a key determinant for economic growth of Benin. The ESDP project and its additional financing are also inscribed in Benin's Poverty Reduction Strategy Paper (PRSP), which was approved by the World Bank Board in June 2007, and will remain valid until 2011.

4.  Description

The additional financing will support expanded activities that scale up its program to enhance the project’s development impact in a cost effective manner. The expanded project activities are an expansion of similar, ongoing activities as follows:

·  Original Component 2: Engineering Studies

o  Feasibility study for Maria Gléta as a site for WAPP Regional Power Plant;

o  Preparatory studies for Adjarala Hydro-electric Plant;

·  Original Component 3: Transmission and Distribution System Expansion

o  SBEE rehabilitative measures at the substation of Akpakpa power plant.

o  SBEE improvements of distribution network.

o  CEB Installation of protection equipment at substations to allow for operation of the southern transmission ring in Benin.

o  CEB Provision of cable potheads to link up the Djougou and Parakou substations.

·  Original Component 4: Environmental and Social Component.

o  Environment Audit of Sèmè Oil Field

·  Original Component 5: Institutional Strengthening and Capacity Building.

o  Technical Assistance on Financial Management and Capacity Building for SBEE.

5.  Financing

Source: / ($m.)
BORROWER/RECIPIENT / 0
International Development Association (IDA) / 7
Total / 7

6.  Implementation

The same implementation arrangements as under the original project apply. The three implementing agencies remain the Directorate of Energy at the Ministry of Mines, Energy and Water, the SBEE, and the CEB.

7.  Sustainability

Sustainability of the ESDP and its additional financing are enhanced by the continuing commitment of the GoB to energy sector reform. The implementation of the project rests on well-proven institutions, which will ensure that results achieved under the project are sustained.

8.  Lessons Learned from Past Operations in the Country/Sector

The project and additional financing are based on the experience in Sub-Saharan Africa that isolated diesel power plants have proven to be ineffective in providing reliable power at reasonable cost. Thus, this project targets grid-based electrification and improvements of the grid.

9.  Safeguard Policies (including public consultation)

The environmental and social mitigation measures under the original project still apply for the additional financing, and no additional mitigation measures are required. As the original project, the category of the additional financing is B.

10.  Contact point

Contact: Fanny Kathinka Missfeldt-Ringius

Title: Sr Energy Econ.

Tel: (202) 458-9645

Fax: (202) 614-1337

Email:

  1. For more information contact:

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