| Project Detail |
Project Description
11. With the creation of the KEEF, the EC has agreed to contribute a €10 million grant from the EUInstrument for Pre-Accession (IPA) to be channeled through the World Bank as additional financing (AF via a
recipient-executed trust fund - RETF) to the parent Project. No additional IDA funds are being proposed at this
time. In parallel, the World Bank proposes to restructure the parent Project to include the KEEF as an
implementing partner under Component 1B of the Project (Pilot Energy Efficiency Investment Program for
Municipalities, US$5.6 million), extend the Closing Date and update the Project indicators.
12. Below is a summary of each component, its current status and the proposed changes.
Component 1: Energy Efficiency and Renewable Energy Investments in Public Buildings
13. Description. This component includes the renovation of both central-owned government buildings
(US$22 million) and municipal government buildings (US$4.5 million IDA, US$1.5 million Government
counterpart funding) with the EE and RE measures. It also includes US$1.36 million for technical studies and
supervision (e.g., energy audits, technical designs, construction supervision), and US$0.2 million for contractor
training.
14. Status. The Project has financed renovation of 50 buildings, additional 7 buildings are under renovation,
while contracts were signed for renovation of 30 more buildings, and has energy audits and designs underway
for additional 20 buildings (or 107 out of the 140-building target).
15. Proposed changes. Several changes are proposed.
a. Implementing arrangements. The KEEF will be delegated some implementation responsibilities
under Component 1b (Pilot Energy Efficiency Investment Program for Municipalities) related to
selection of subprojects, procurement of energy audits and technical designs, procurement and
oversight of renovation works, contract management and commissioning and verification of energy
savings. However, the financial management, disbursement and flow of funds arrangements under
the IDA credit will remain under the responsibility of the MED/KEEA. Rather than require cofinancing for Component 1b, the KEEF would enter into energy service agreements, which will
obligate participating municipalities to repay the cost or a portion of the cost of the investment plus
fees from the generated energy cost savings resulting from investments.
b. Municipal Subprojects. It is proposed that the Municipal Subproject definition be expanded to
include municipal-owned and operated public lighting (in addition to public buildings). It is also
proposed that US$1.1 million (or SDR 0.798 million) of the IDA credit be reallocated from
Component 1a to Component 1b. The disbursement category for Component 1b will remain the
same but the disbursement percentage will be increased from 75 to 100 percent.
c. EU-IPA grant. An addition of €8.55 million grant (~US$10.0 million) from EU-IPA funds will be added
as a Recipient-Executed Trust Fund (RETF) to support Components 1b (€7.55m for Pilot Energy
Efficiency Investment Program for Municipalities) and 1c (€1m for Technical Studies and
Supervision). The US$4.5 million in IDA funds and US$1.5 million of Government counterpart
funding allocated under the parent Project for Component 1B will remain the same.
16. For the EU-IPA AF, the funds would be used to support:
(a) Financing of building renovations (€7.55 million): Supporting the financing of renovation works for
eligible buildings4
. About €0.55 million could be used to support partial investment grants to support
renovation investments that would have payback periods greater than 15 years.
(b) Technical studies related to investments (€1.0 million): Support and technical assistance for (i)
awareness raising and marketing; (ii) detailed energy audits; (ii) technical designs and construction
supervision; (iv) building commissioning and measurement and verification; (v) monitoring and
evaluation; and (vi) future business planning.
Component 2: Policy and Regulatory Support for Renewable Energy and Energy Efficiency
17. Description. This US$2.3 million component provides support to the Energy Regulatory Office (ERO) for
EE and RE and support to the MED and the Ministry of Environment and Spatial Planning (MESP) for EE
legislation and implementation.
18. Status. One major RE/EE technical assistance (TA) package has been completed (covering an update of
the feed-in-tariff (FiT) scheme for biomass and biogas, a grid integration study (integration of wind power to the
transmission system), RE barrier analysis, updating of district heating tariffs for Termokos) and another one for
EE (pilot EE program for homeowners’ associations - HOAs) is nearing completion. This support to ERO, along
with other donors/IFIs, has helped increase the installed RE capacity from about 35.8 MW at the beginning of
the Project to about 254.8 MW today. Two additional technical assistance packages have been contracted and
expected to be completed by May 2020. The first will cover support for ERO to determine a least cost planning
for an optimal renewable energy mix and a grid integration study at the distribution level to incorporate
distributed renewable energy generation. The second will cover EE and include scaling-up of EE in HOAs to add
12-15 buildings, secondary legislation for EE/ESCO procurement, and support for a KEEA public awareness
campaign.
19. Proposed changes. None. This component will be completed by June 2020.
Component 3: Project Implementation Support
20. Description. This US$0.64 million component provides funds to support the MED to effectively
implement the project through the creation of a project implementation unit (PIU) under KEEA to carry out
procurement, financial management, technical oversight, project monitoring and reporting, and financial audits.
21. Status. The PIU is staffed with a Project Manager, a Construction Engineer, a Civil Engineer (and
Environmental Focal Point), a part-time Procurement Specialist, and an Office Assistant. A part-time Financial
Management Specialist position was opened as the former Financial Management Specialist resigned in early
September 2019. The PIU is performing their tasks satisfactorily and about half the funds allocated in this
component have been disbursed to date.
22. Proposed changes. An additional €0.80 million from the EC grant would be added to cover additional KEEF operating costs for its first 4 years including salaries for the KEEF Managing Director and staff; office
supplies/equipment, site visits, etc. Staff will continue to do marketing, investment screening, audit/design
reviews, procurement, oversight, environmental and social safeguards, repayment collection, monitoring and
reporting, etc. |
