Mozambique - Energy Technical Assistance and Rehabilitation Project

 Energy technical assistance and rehabilitation project Report No: ; Type: Report/Evaluation Memorandum ; Country: Mozambique; Region: Africa; Sector: Other Power & Energy Conversion; Major Sector: Electric Power & Other Energy; Project ID: P001764 December 29, 1995 Mozambique: Energy Technical Assistance and Rehabilitation Project (Credit 1806-MZ) The Implementation Completion Report (ICR) for the Mozambique Energy Technical Assistance and Rehabilitation project (Credit 1806-MZ, approved in FY87) was prepared by the Africa Regional Office with an excellent Appendix B contributed by the Borrower. The IDA credit in the amount of US$20.0 million equivalent was closed on December 31, 1994, two years later than originally envisaged. About US$20.2 million equivalent under the credit were disbursed, and the balance of about US$1.5 million equivalent was canceled at the time of closing. Cofinancing was provided by the Government of Norway. The borrower's comments are in general agreement with the ICR. The primary objective of this first energy project for Mozambique was to improve the supply and distribution of electricity and petroleum products in the main urban areas. The secondary objective was to help energy agencies prepare plans for the sound development of the power, petroleum, and household energy subsectors. The project consisted of the following components: (i) plant, equipment and materials for the maintenance and rehabilitation of power facilities and the petroleum distribution system; (ii) operational support for the power and petroleum companies through the provision of expatriate operations, engineering, and maintenance specialists; and (iii) technical assistance for implementation of manpower training and management and financial systems, and for the preparation of least-cost development programs and a national household energy/woodfuels policy. The results of the project have been mixed, partly as a result of the difficult security situation in the country. The maintenance, rehabilitation, and operational support components of the project were fully implemented, albeit with delays, and are reported to have contributed to an improvement in the supply of electricity and petroleum products. The training objective was only modestly achieved, as the counterpart staff assigned to work with the expatriate specialists were either inadequately qualified or overstretched. The financial systems have been implemented and financial statements have been produced on an annual basis, but the management information systems were not implemented. The least-cost development study for the power sector was unsatisfactory. Studies on petroleum product supply and distribution and household energy/woodfuels policy were completed and have contributed to policy reforms that have been implemented or are envisaged. Overall, while the project has already stimulated a substantive dialogue and some important decisions on policy issues, key actions are still pending. Based on the above, the Operations Evaluation Department (OED) rates the outcome of the project as satisfactory, and its contribution to institutional development as moderate. The sustainability of the project is rated as uncertain (vs. likely in the ICR) because staffing, finances and policy environment remain weak, especially for the power utility. The Bank's performance is rated as satisfactory. The ICR is inadequate. Although it provides a well written summary of the implementation of the project and draws the appropriate lessons, it lacks statistical information on the supply and distribution of electricity and petroleum products to document the achievements of the project. An audit may be carried out to verify the impacts of the project.