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AFRICAN DEVELOPMENT BANK
EMERGENCY POWER INFRASTRUCTURE REHABILITATION PROJECT - PHASE I
SUPPLEMENTARY GRANT PROPOSAL
COUNTRY : ZIMBABWE
APPRAISAL REPORT
ONEC DEPARTMENT
December 2013
Table of Contents
Grant Information .................................................................................................................................. i
Currency Equivalents ........................................................................................................................... ii
Acronyms and Abbreviations ............................................................................................................... ii
RESULT MATRIX ............................................................................................................................ iii
EXECUTIVE SUMMARY .................................................................................................................. v
1 INTRODUCTION ................................................................................................................................ 1
2 ORIGINAL PROJECT ......................................................................................................................... 1
2.1 Project Background and Origin ........................................................................................................... 1
2.2 Project Objective .................................................................................................................................. 1
2.3 Project Components ............................................................................................................................. 2
2.4 Project Costs and Financing Arrangements ......................................................................................... 2
2.5 Project Implementation Status .............................................................................................................. 3
2.5.4 Rehabilitation of the Ash Plant at Hwange Power Station ........................................................... 3
2.5.5 Sub-Transmission and Distribution System Reinforcement .......................................................... 3
2.5.6 Consultancy for Environmental and Social Audit ........................................................................ 4
2.5.7 Consultancy for Project Supervision ............................................................................................ 4
2.5.8 Consultancy for Project Accounts Audit....................................................................................... 4
2.5.9 Environmental Monitoring and Capacity Building ...................................................................... 4
3 REVISED PROJECT FINANCING..................................................................................................... 5
3.1 Objectives and Description .................................................................................................................. 5
3.2 Revised Project Cost estimates ............................................................................................................. 5
3.3 Revised Implementation Schedule ........................................................................................................ 6
3.4 Project Implementation ........................................................................................................................ 6
3.4.2 Institutional Arrangement ............................................................................................................. 6
3.4.3 Monitoring and Evaluation ........................................................................................................... 6
3.4.4 Social and Environmental Management Plan ............................................................................... 6
4 JUSTIFICATION FOR SUPPLEMENTARY FINANCING .............................................................. 7
5 LEGAL INSTRUMENTS AND AUTHORITY .................................................................................. 8
5.1 Legal Instrument ................................................................................................................................... 8
5.2 Conditions Associated with Bank’s Interventions ................................................................................ 8
5.2.1 Conditions Precedent to Entry into Force of the Grant ................................................................ 8
5.2.2 Conditions Precedent to First Disbursement of the Grant ............................................................ 8
5.3 Compliance with Bank Policies ............................................................................................................ 8
6 CONCLUSION AND RECOMMENDATION ................................................................................... 8
6.1 Conclusion ............................................................................................................................................ 8
6.2 Recommendation .................................................................................................................................. 8
Annex I – Project Costs ANNEX II – Project Implementation Schedule
i
Grant Information
Client’s information
RECIPIENT: Government of the Republic of Zimbabwe
Financing plan
ADB’s key financing information
Supplementary Grant
USD 4.61 million
Interest type* N/A
Interest rate spread* N/A
Commitment fee* N/A
Other fees* N/A
Tenor N/A
Grace period N/A
Timeframe - Main Milestones (expected)
Approval of Supplementary Financing by Zim-Fund POC 25/07/2013
Approval of Supplementary Financing by AfDB Board 13/11/2013
Effectiveness 25/11/2013
Last Disbursement 31/12/2014
Source Amount (USD)
million
Instrument
Zim-Fund 4.61 Grant
TOTAL COST 4.61 Grant
ii
Currency Equivalents
July 2013
1UA = US Dollar (USD) 1.50396
FISCAL YEAR:
1 Jan – 31 Dec
Acronyms and Abbreviations
AfDB African Development Bank MTP Medium Term Plan
ADF African Development Fund MVA Megavolt ampere (1,000 kVA)
CAP Consolidated Appeal Framework NCB National Competitive Bidding
EIRR Economic Internal Rate of Return NGO Non-Governmental Organization
ESMP Environmental and Social Management
Plan
O&M Operation and Maintenance
EPIRP Emergency Power Infrastructure
Rehabilitation Project
PA Procurement Agency
ESIA Environmental and Social Impact
Assessment
PMT Project Management Team
GOZ Government of Zimbabwe POC Programme Oversight Committee
GPA Global Political Agreement STERP Short Term Emergency Rehabilitation
Program
HPS Hwange Power Station T&D Transmission and Distribution
IE Implementing Entity Tx Transformer
IG Inclusive Government WACC Weighted Average Cost of Capital
km Kilometer USD United States Dollar
kV Kilovolt (1,000 volts) VAR Volt-Ampere Reactive
MDTF Multi Donor Trust Fund ZEMA Zimbabwe Environmental
ManagementAuthority MMU MDTF Management Unit ZESA Zimbabwe Electricity Supply Authority
MOENRM Ministry of Environment and Natural
Resources Management
ZETDC Zimbabwe Electricity Transmission
and Distribution Company
MOEPD Ministry of Energy and Power
Development
Zim-Fund Zimbabwe Multi-Donor Trust Fund
MOF Ministry of Finance ZPC Zimbabwe Power Company
MOHCW
Ministry of Health and Child
Welfare
iii
RESULT MATRIX
Country and project name: Zimbabwe, Emergency Power Infrastructure Rehabilitation Project Phase I
Purpose of the project : Improve availability and reliability of electricity supply to critical social infrastructure facilities and the people of Zimbabwe
RESULTS CHAIN
PERFORMANCE INDICATORS MEANS OF
VERIFICATION
RISKS/MITIGATION MEASURES
Indicator
(including CSI)
Baseline Target
IMP
AC
T The power production
capability of the installed
capacity fully restored
Utilised installed capacity 1237 MW in 2012 1960 MW by 2016 ZESA, ZPC
Annual Reports;
OU
TC
OM
ES
1.Improved availability
of electricity
1.1 Electrical energy production
at Hwange Power Station
3133 GWh in 2012 4800 GWh by
2016
ZPC Annual
Reports
Risk 1: Revenue risk leading to failure to
properly operate, and maintain the
rehabilitated facilities.
Mitigation Measures: (1) Ensure that the
design of the equipment installed during
the Project is robust and of low
maintenance and (2) support ZESA to
lobby for gradual tariff adjustment
towards a cost reflective tariff through
regular Bank/Government dialogue
meetings. .
Risk 2: Vandalism of rehabilitated
facilities
Mitigation Measures: Enhance security
around the refurbished installations and
Bank support ZESA to lobby for
enforcement of legislation that
criminalizes acts of vandalism and
reduction in power outages ensuring that
the system is live most of the time.
2.Access to reliable
electricity supply
2.1 Number of customers
accessing continuous electricity
supplies in selected project areas
227, 280 customers
in 2012
249,280 by 2016 ZESA and
ZETDC Annual
Reports
3.Improved
environmental quality at
HPS and surroundings
3.1 Level of air particulates in
the air at Hwange Power Station
and surroundings
273 mg/m3 in 2012 180 mg/m3 by
2016
ZPC Annual
Reports
OU
TP
UT
S
1. Distribution Network
Infrastructure upgraded
and rehabilitated
1.1 : 11/0.4kV & 33/0.4kV
distribution transformers
installed (No.)
0 in 2012 521 by 2016 Implementing
Entity Project
Progress Reports;
MMU Weekly,
Monthly &
Quarterly Reports
Risk 1: Implementation delays
Mitigation Measures: i) Engagement of
independent procurement agent; ii)
Engagement of independent
implementing entity; iii) Closer follow up
by MMU and Project Steering
Committee; iv) Effective involvement of
1.2 : Distribution lines
rehabilitated (km)
0 km in 2012 287 by 2016
1.3 Distribution cables
rehabilitated (km)
0 km in 2012 21 by 2016
iv
Country and project name: Zimbabwe, Emergency Power Infrastructure Rehabilitation Project Phase I
Purpose of the project : Improve availability and reliability of electricity supply to critical social infrastructure facilities and the people of Zimbabwe
RESULTS CHAIN
PERFORMANCE INDICATORS MEANS OF
VERIFICATION
RISKS/MITIGATION MEASURES
Indicator
(including CSI)
Baseline Target
2. Sub-Transmission
Capacity Strengthened
2.1 Sub-transmission level
transformers installed (No.)
0 in 2012 7 by 2016
Bank Supervision
Mission Reports
Audit report
Project Management Teams, and v)
Better coordination through sector
governance structures;
2.2 Sub-transmission level
circuit breakers installed(No.)
0 in 2012 16 by 2016
3. Hwange Power Station
Rehabilitated:
3.1 Replace wet ash handling
system
Old ash handling
system in 2012
Completion of Ash
Dam rehabilitation
works by 2016
3.2 Construct new ash plant
control room
Old ash plant in 2012 Control room
completed by 2016
3.3 11kV transformer cable (km) Old cables in 2012 0.50 by 2016
3.4 3.3kV 3-core cables (km) Old cables in 2012 o.50 by 2016
4. Audit Services 4.1 Project Audit Produced 0 in 2012 4 by 2016
INPUTS
KE
Y
AC
TIV
ITIE
S
Component A: Rehabilitation of the Ash Handling Plant at Hwange Thermal Power Station:
Component B: Rehabilitation of sub-transmission facilities and Rehabilitation of distribution facilities
Component C : Environmental Audit
Component D: Engineering &Project Management Consultants
Component E: Audit
Component F : Environmental Monitoring and Capacity Building
Component A: USD 10.62million
Component B: USD 23.91 million
Component C: USD 0.79million
Component D: USD 1.83million
Component E: USD 0.06million
Component F: USD 2.40 million
TOTAL : USD 39.61 million
v
EXECUTIVE SUMMARY
In June 2011, the Board of Directors approved a grant amounting to USD 35 million to finance
the Emergency Power Infrastructure Rehabilitation Project (EPIRP I or the Project) targeting
the power transmission and distribution facilities throughout the whole country and the
rehabilitation of the Ash Handling Plant at the Hwange Power Station in Hwange. The Protocol
of Agreement was signed in September 2011. The envisaged outcomes of the intervention
include: improved environmental management and ash handling at the Hwange Power Station,
improved reliability of sub-transmission and distribution networks, and improved electricity
supply to the water treatment plants of Harare City and other urban water supply systems.
Following the recruitment of the Implementing Entity (IE) in October 2011 and the
Procurement Agent (PA) in November 2011, the Project was launched in December 2011.
Since then, considerable progress has been achieved in the implementation of the Project. The
technical assessments, definition of scope of works and services and preparation of
procurement documents were completed followed by the launch of the procurement process.
The bid evaluation has been completed for the three packages involving physical works and
for three packages for consultancy services. The following contracts have been awarded: the
Rehabilitation of the Hwange Power Station ash dam (EPIRP/002), the Sub-transmission
Facilities reinforcements (EPIRP/003), the Distribution System Reinforcement (EPIRP/004)
the Environmental and Social Audit (EPIRP/005) and the Project Audit (EPIRP/006). The
Environmental Monitoring and Capacity Building contract requires inputs from the
Environmental and Social Audit contract and will be awarded after its commencement.
Despite the progress made in the procurement process, the prices obtained for two of the bids
have been higher than the budgeted figures in the Project Appraisal Report,
ADB/BD/WP/2011/96/Rev.1/Approved, as well as the engineer’s estimate. Generally, the
reasons for the high bid price outcomes were mainly due to: (i) negative perceptions about
Zimbabwe and its dollarized economy; (ii) lack of recent, similar projects with a similar scale
in Zimbabwe to use as references; (iii) the rehabilitation nature of the works and the lack of
sufficient documented information on the current state of the system; (iv) difficult and
unreliable cost estimating in current day Zimbabwe; and (v) the short implementation periods
required for the projects. Taking into account the concluded bidding processes and
contingencies to cater for unforeseen expenditures during the implementation process, the
expected total value of the Project is now estimated at USD 39.61 million. The additional
resources required therefore amount to USD 4.61 million.
If the Project goals and objectives as set out in the PAR are to be met, the Project must be
completed as per the original plan. The additional resources being requested will make it
possible for the Project to be completed as planned and achieve its goals.
1
REPORT AND RECOMMENDATION OF THE MANAGEMENT TO THE BOARD
OF DIRECTORS ON A PROPOSED SUPPLEMENTARY GRANT
FROM THE RESOURCES OF THE ZIM-FUND TO ZIMBABWE FOR THE EMERGENCY
POWER INFRASTRUCTURE REHABILITATION PROJECT (EPIRP I)
Management hereby submits this proposal and recommendations concerning a proposal for a US$ 4.61
million supplementary grant to the Republic of Zimbabwe from the resources of the Zimbabwe Multi-
Donor Trust Fund (Zim-Fund) to finance the full implementation of the EPIRP I.
1 INTRODUCTION
1.1 It is to be recalled that on 30 June 2011, the Board approved on a lapse-of-time basis financing of
the EPIRP I targeting the rehabilitation of the ash handling plant at Hwange Power Station, the
sub-transmission facilities and distribution system throughout the country, and other related
activities.
1.2 The original estimated cost of the Project was USD 35 million and the disbursement rate as of 31
August 2013 was at 9.13%. The Project Protocol of Agreement was signed on 14 September 2011,
and the Project was launched on 15 December 2011 following the recruitment of the
Implementing Entity (IE) in October 2011 and the Procurement Agent (PA) in November 2011.
This was followed by technical assessments, provision of bid documents, and commencement of
the bidding process. By 31 December 2012, the tendering of the major components of the Project
was completed, except for Environmental Monitoring and Capacity Building (EPIRP/007). The
tendering for several of the Project components resulted in bid prices higher than the budgeted
amounts. Due to the importance of implementing the full scope of the Project for achieving the
Project objectives, this proposal is requesting supplementary financing in the amount of USD 4.61
million to enable the full implementation of the Project as originally envisaged.
2 ORIGINAL PROJECT
2.1 Project Background and Origin
2.1.1 The political and economic situation in Zimbabwe for the last decade has severely affected all
sectors of the economy including infrastructure. In this regard, the rehabilitation of key power
sector assets in the generation, transmission and distribution systems has been identified as the
fastest and least cost option for restoring capacity to increase electricity supply in order to meet
part of the current electricity demand and enhance system stability. Following the outbreak of
Cholera in the country in 2008, it was imperative for the water and sanitation situation to be
urgently addressed. In order to address the situation it was also observed that the reliability and
availability of power supply in the country had to be improved, hence the need for the
Emergency Power Infrastructure Rehabilitation Project.
2.2 Project Objective
2.2.1 The objective of the Project is to improve the provision of adequate and reliable power supply
in an environmentally sound manner through the rehabilitation of the ash handling plant at
Hwange Power Station and the sub-transmission and distribution facilities in the country. The
Project will also help to improve the reliability of electricity supply to the treatment plant of the
Harare city water supply and other urban water supply systems and thereby help prevent another
cholera outbreak in the country.
2
2.3 Project Components
2.3.1 The Project complements the ongoing power sector infrastructure rehabilitation program
identified by ZPC and ZETDC, subsidiaries of ZESA Holdings mandated to operate and
maintain the Hwange power station and transmission & distribution networks respectively.
Components included in the project were selected from a list of critical interventions that need
to be conducted in the rehabilitation of power infrastructure to bring the power system to an
acceptable level of performance. The identification of the Project components was undertaken
by the stakeholders - ZESA, ZPC, ZETDC, the Ministry of Energy and Power Development and
the Ministry of Finance - as the priority activities to be supported by the limited funds available.
The Project comprises six components:
(A) Rehabilitation of Ash Plant at Hwange Power Station;
(B) Sub-Transmission and Distribution Reinforcement;
(C) Consultancy for Environmental and Social Audit;
(D) Consultancy for Project Supervision;
(E) Consultancy for Project Accounts Audit; and
(F) Environmental Monitoring and Capacity Building.
2.4 Project Costs and Financing Arrangements
2.4.1 The total cost of the EPIRP Phase I was estimated at USD 35.00 million, excluding the cost of
the services of a procurement agent which is being financed separately through the Fragile States
Facility (FSF). This was the amount approved respectively by the Zim-Fund Project Oversight
Committee (POC) for implementation of Phase I, and the Board. Table 1 summarizes aggregate
costs of the various project components at project appraisal stage.
Table 1: Original Project Cost Estimates by Component
Project Component Cost
(USD million)
A Rehabilitation of ash plant at Hwange power station 14.870
B Sub-Transmission and Distribution system reinforcement 14.960
C Consultancy for Environmental and Social audit 1.200
D Consultancy for Project Supervision 1.500
E Consultancy for Project Accounts Audit 0.070
F Environmental monitoring and capacity building 2.400
Total 35.000
Table 2: Original Project Cost by Category of Expenditure
Category of Expenditure USD (million)
A. Works 32.13
B Services 2.87
C Miscellaneous 0.00
TOTAL PROJECT COSTS 35.00
3
2.5 Project Implementation Status
2.5.1 Despite being approved by the Board in June 2011, the conditions for the first disbursement
were fulfilled in May 2012. This resulted in the late commencement of the technical assessment
phase of the Project. The overall slippage from the indicative schedule in the PAR is estimated
at 12 months.
2.5.2 Despite the delays, the Project has made steady progress. USD3.2 million was disbursed by end
of August 2013 with the project having achieved the following milestones:
Completion of the technical assessment and definition of scope of works and services,
Preparation of procurement documents;
Launch of procurement process including prequalification process;
Completion of tender evaluation for 5 out of a total of 6 packages;
Negotiations and award of five contracts (EPIRP/002, EPIRP/003, EPIRP/004, EPIRP/005
and EPIRP/006). Only one contract (EPIRP/007) is yet to be awarded.
Implementation of the awarded contracts is progressing well.
2.5.3 The paragraphs below provide the detailed status of implementation of each component of the
Project.
2.5.4 Rehabilitation of the Ash Plant at Hwange Power Station
This component entails the replacement and refurbishment of various pumps, discharge lines,
low voltage and medium voltage cables in the ash handling plant at Hwange Power Station. The
main outcome of this will be improved environmental management at Hwange Power Station
ash plant. The Specific Procurement Notice (SPN) for the pre-qualification of bidders for this
component closed on 26th July 2012. The only one bidder that was pre-qualified for this package
pulled out on 7 November 2012. Thus it was agreed to change the mode of procurement to
Limited International Bidding and eleven bidders were pre-qualified for the bid. The bids for
this bidding process were opened on 9 April 2013. The bid evaluation for this complex
rehabilitation package was completed during the second week of July 2013. The contract was
awarded in August 2013 with an eight month contract delivery period.
2.5.5 Sub-Transmission and Distribution System Reinforcement
Sub-Transmission System Reinforcement: The sub-transmission part of this component
involves the supply, installation and commissioning of seven power transformers and
sixteen 132 kV circuit breakers at various substations throughout the country. The contract
for this package was awarded in January 2013. Orders have been placed for equipment
which is currently being manufactured. The target completion date for this contract is 4
January 2014.
Distribution System Reinforcement : The distribution part of this component consists of
the supply, installation and commissioning of 521 distribution transformers and
construction of 287 km of distribution overhead lines and 12 km of underground cables.
The contract for this package was awarded in February 2013. The equipment and materials
are at various stages of being manufactured in South Africa and India. The target completion
date for this contract is April 2014.
4
2.5.6 Consultancy for Environmental and Social Audit
Consultancy has been procured to carry out an Environmental and Social Audit of the whole
Hwange power plant and its operations and a comprehensive Environmental and Social
Management Plan prepared for the plant. The contract was awarded in August 2013 and is
expected to be completed in July 2014.
2.5.7 Consultancy for Project Supervision
The GOZ, with the assistance of the Zim-Fund Management Unit (MMU), procured the services
of Parsons Brinkerhoff as an Implementing Entity for the Project through advance contracting
procedures. The IE provides project management, coordination, technical assessment,
preparation provision of technical documents for tenders and supervision services. The IE is also
responsible for project financial management including accounting and financial reporting. The
IE and GOZ signed the Implementing Entity Agreement in October 2011, with the IE
mobilization commencing in December 2011.
To date, the IE has completed technical assessments, provided technical inputs for tender
bidding documents preparation, prequalification, bidding and evaluation process and contract
award negotiations. With the technical input from the IE, the Procurement Agent is effectively
leading and administering the procurement process. The procurement process for most of the
packages has been completed and the next phase of the PA’s role is now administering the
contracts on behalf of the GOZ. The IE will play the role of Engineer to supervise the works and
services to be provided.
2.5.8 Consultancy for Project Accounts Audit
The project audit for year ending 2012 is being finalized. The Project audit contract was awarded
in May 2013, and the auditor is working on the report for the period ending 2012. The audit
services will include both the EPIRP I and the Zim-Fund Urgent Water Supply and Sanitation
Rehabilitation Project I.
2.5.9 Environmental Monitoring and Capacity Building
This package is made up of an environmental consultancy services to provide Capacity Building
of the Environmental Monitoring Unit at Hwange Power Station and works for the procurement
of Air Quality Monitoring Equipment for the station. The procurement of this component will
be initiated after the completion of the environmental and social audit.
5
3 REVISED PROJECT FINANCING
3.1 Objectives and Description
3.1.1 The project objectives have not changed and remain as described in the PAR, as set out in section
2.2 above.
3.2 Revised Project Cost estimates
3.2.1 The bidding process for all the items in the Project except for one (Environmental Monitoring
and Capacity Building) has been completed and the comparison between the cost estimates by
the IE after the scoping exercise and the costs from the bidders is shown in Table 3. The bid
prices for the Sub-transmission and Distribution System Reinforcement component of the
Project were substantially higher than the revised cost estimate.
3.2.2 The reasons for the high bid prices were mainly due to:
Negative perceptions about Zimbabwe and its dollarized economy;
Lack of recent, similar projects with a similar scale in Zimbabwe to use as references;
The rehabilitation nature of the works and the lack of sufficient documented information on
the current state of the system;
Difficult and unreliable cost estimation in current day Zimbabwe; and
The short implementation periods.
The inclusion of some items that were considered to be essential in addressing the further
deterioration of the distribution network in Harare.
The Project Appraisal cost estimates were not based on a detailed feasibility study.
Table 3 – Comparison between cost estimates and contract prices
Project Packages
Cost estimates
at PAR
(USD million)
Actual bid
prices
(USD million)
Difference
between PAR
and actual
costs
(USD million)
Comments
A Rehabilitation of Ash Plant
at Hwange Power Station 14.87 10.62 -4.25
B
Sub-Transmission &
Distribution System
Reinforcement
14.96 23.92
8.96
Increase in
scope and
bid price
C
Consultancy for
Environmental and Social
Audit
1.2 0.79
-0.41
D Consultancy for Project
Supervision 1.50 1.83 0.33
Increase in
bid price
E Consultancy for Project
Accounts Audit 0.07 0.06 -0.01
F Environmental Monitoring
and Capacity Building 2.40 2.401 0.00
Total 35.00 39.61 4.61
Additional Resources above approved amount 4.61
1 Tender price not yet known hence estimated cost used.
6
Table 4: Supplementary Financing Categories of Expenditure
Categories of Expenditure Amount (USD million)
A Works 4.61
B Services 0.0
C Miscellaneous 0
TOTAL 4.610
3.2.3 Considering the concluded bidding process and making estimates for outstanding contracts and
a contingency, the expected total cost of the Project is estimated at the revised amount of USD
39.61 million as shown in Table 3. Additional resources amounting to USD 4.61 million are
therefore required for the Project to achieve its original goals and objectives.
3.3 Revised Implementation Schedule
3.3.1 The Project was originally planned to be implemented over a period of 21 months. The contracts
for the various project components were originally expected to have been signed by late
November 2011. However, due to the various delays experienced in the implementation process,
the first contracts were signed in March 2013. Project completion for all packages is now
targeted at the end of 2014. The revised implementation schedule is shown in Annex II.
3.4 Project Implementation
3.4.1 Implementation Arrangement
The Project will continue to be implemented within the framework of the instrument establishing
the Zim-Fund and its Operations Manual. In this regard, an independent Project Implementation
Entity (IE) will be responsible for implementation coordination, and monitoring while the
procurement services will be provided by an experienced independent Procurement Agent (PA)
already appointed for the project.
3.4.2 Institutional Arrangement
There will be no change to the institutional arrangements. That is to say, the IE will be assisted
by Project Management Teams (PMTs) that have been set up within ZPC and ZETDC for
general coordination. The already set up Project Steering Committee (PSC) comprising
representatives from ZPC, ZETDC, Ministry of Energy and Power Development, and Zim-Fund
MMU will continue to address all major issues in connection with the Project, and will provide
overall guidance during project implementation.
3.4.3 Monitoring and Evaluation
Zim-Fund is developing a Monitoring and Evaluation (M&E) framework to support the
project.The logframe was retrofitted into the new format and in the process the outcome
indicators revised in line with the requirements for M&E.
3.4.4 Social and Environmental Management Plan
An Environmental and Social Management Plan for Hwange Power Station was developed by
ZPC, and an independent environmental and social audit is being done under the Project
(Contract No. EPIRP/005) which will be followed by the Environmental Monitoring and
Capacity Building component (Contract No. EPIRP/007). The Environmental and Social
Management Plans for the sub-transmission and distribution packages have been systematically
7
included in the works packages for implementation by the contractor, and its implementation
will be monitored and supervised by the current IE ( Parsons Brinkerhoff).
4 JUSTIFICATION FOR SUPPLEMENTARY FINANCING
4.1 The supplementary financing proposal was approved on 25 July 2013 by the POC of the Zim-
Fund, which is composed of the Zim-Fund donors and GOZ representatives, after consideration
of the importance of achieving the original objectives of the Project. The Project is in alignment
with the Bank Group’s 2011-2013 Zimbabwe Country Brief (as well as the draft 2013 – 2015
version) and the Bank’s Strategy (2013-2022) focus on infrastructure development. The
inadequate provision or lack of reliable power supply services has affected the people of
Zimbabwe more so the poor. It therefore significantly responds to the inclusive agenda and should
be supported for the achievement of the full Project objective which is also in line with GOZ
Medium Term Plan for 2011 - 2015.
4.2 This supplementary financing proposal meets the applicable general conditions and specific
conditions for supplementary financing set out in the Bank Group Policy and Procedures for
Supplementary Financing (ADB/BD/WP/97/83). The following factors have been considered in
submitting this proposal:
(i) The execution of the Project has commenced and is progressing satisfactorily from the
technical perspective but will require additional resources to achieve its objectives.
(ii) The cost increases are beyond the control of the GOZ, and the GOZ is not in a position to
provide additional financing.
(iii) There is need to build upon the recent power sector interventions so as to improve the
deteriorated power supply infrastructure in the country. A delay in improvement of power
supply services has high tangible and nontangible economic and social costs.
(iv) It has not been possible to reduce the total cost of the project through changes of
specifications or scope of work or services without significantly affecting the objective of
the Project
(v) The project is technically and economically viable even with the cost overruns.
(vi) The Project cannot be reduced in size without damaging its ability to achieve the set
objectives or its sustainability.
(vii) There are no exogenous constraints: financial, managerial, or technical – that would hinder
the completion of the Project
8
5 LEGAL INSTRUMENTS AND AUTHORITY
5.1 Legal Instrument
5.1.1 The legal instrument to finance the supplementary grant will be a Protocol of Agreement
between the Republic of Zimbabwe (the Recipient) and the Bank, in its capacity as the
administrator of the Zimbabwe Multi-Donor Trust Fund (Zim-Fund), for a grant from the
resources of the Zim-Fund.
5.2 Conditions Associated with Bank’s Interventions
5.2.1 Conditions Precedent to Entry into Force of the Grant
The Protocol of Agreement will enter into force on its date of signature by the Recipient and
the Bank.
5.2.2 Conditions Precedent to First Disbursement of the Grant
The conditions precedent to first disbursement of the initial grant, which will be extended to
the supplementary grant, have been fulfilled. As such, disbursements may be made from the
supplementary grant upon entry into force of the Protocol of Agreement.
5.3 Compliance with Bank Policies
5.3.1 The proposed supplementary grant complies with all applicable Bank policies, including the
Bank Group Policy and Procedures for Supplementary Financing.
6 CONCLUSION AND RECOMMENDATION
6.1 Conclusion
6.1.1 Priced bids received from the tendering process have been significantly higher than the budgeted
figures from the estimates arrived at during the Project appraisal stage. Considering the
concluded bids and estimates on the outstanding packages and the requirements during
execution, the expected total value of the works is estimated at USD 39.61 million, thus
additional resources of USD 4.61 million (13.2% of the original estimated Project costs) is
needed in order to achieve the objectives of EPIRP.
6.2 Recommendation
6.2.1 Considering the many socio-economic and environmental benefits of this Project, it is
recommended that the Bank approves this supplementary grant, from the resources of the Zim-
Fund, for the amount of USD 4.61 million for the EPIRP.
Annex I – Project Costs
Component Package
Number
Description Budget as
appraised
(USD)
Actual
Contract
(USD)
Additional
Resource
Required
(USD)
Rehabilitation of ash plant at
Hwange power station
EPIRP/002 Ash Plant Upgrade and Rehabilitation
14,870,000 10,615,500 -4,254,500
Sub-transmission and Distribution
Reinforcement
EPIRP/003 Sub-Transmission Facilities Reinforcement 4,960,000 8,565,535.77 3,605,535.77
EPIRP/004 Distribution System Reinforcement 10,000,000 15,352,498 5,352,498
Consultancy for Environmental
and Social Audit EPIRP/005 Consulting Services for Environmental and
Social Audit and Environmental
Management Plan 1,200,000 789,095 -410,905
Consultancy for Project
Supervision EPIRP/001 Implementing Entity Services
1,500,000 1,826,964.65 326,964.65
Consultancy for Project Accounts
Audit EPIRP/006 Consultant’s Services for External Project
Audit 70,000 58,899 -11,111
Environmental Monitoring and
Capacity Building1 EPIRP/007 Environmental Monitoring and Capacity
Building 2,400,000 2,400,000 0
Total 35,000,000 39,608,482.42 4,608,482.42
1. The contract for this package has not yet been awarded hence budget price used as contract price.
ANNEX II – Project Implementation Schedule ZIMFUND: EMERGENCY POWER INFRASTRUCTURE REHABILITATION PROJECT SCHEDULE STATUS AND PROJECTION
WORK SCHEDULE
KEY Original Schedule Projection Reporting time original completion projected completion
Current Schedule
SR. NO.
1 EPIRP 002 - Rehab. of Ash Plant
2 EPIRP 003 - Rehab. Sub transmission
3 EPIRP 004 - Rehab. Of distribution sys.
4 EPIRP 005 - Env. and Social Audit
5 EPIRP 006 - Project Audit
Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Jul-13Feb-13 Mar-13 Apr-13 May-13 Jun-13Apr-12 May-12 Jun-12
Inception, scoping, pre-Qualif ication Process
Contract Aw ard
Preparation of Contract Documents
Inception, Technical assessment, Scoping,
Pre-Qualif ication Process
Bidding Documents
Floatation
Evaluation
Jan-12
Bidding Documents
Evaluation
Evaluation
Preparation of Contract Documents
Contract Aw ard
Inception, Scoping, Pre-Qualif ication Process
Bidding Documents
Floatation
Bidding Documents
Floatation
Works Implementation
Works Implementation
Preparation of Contract Documents
Contract Aw ard
1.5
Inception, Scoping, Pre-Qualif ication Process
1.7 Works Implementation
2.7
2.5
3.2
3.3
2.6
3.1
Floatation
Aug-13
5.1 Inception, Scoping, Pre-Qualif ication Process
4.3
4.4
4.5
4.6
3.4
3.5
3.6
4.1
4.2
3.7
1.6
2.1
2.2
2.3
2.4
1.1
1.2
1.3
1.4
Sep-13 Oct-13 Nov-13 Dec-13
5.7 Implementation
5.4 Evaluation
5.5 Preparation of Contract Documents
5.6 Contract Aw ard
4.7 Implementation
Preparation of Contract Documents
Contract Aw ard
Floatation
Evaluation
5.2 Bidding Documents
5.3
Projected completion
by Jan 2014
Projected
completionby Apr 2014
Projected
completion by July 2014
Projected completion
by May 2014
Projected
completion by Dec 2014
