Indonesia - Solar Home Systems Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-7000 -IND MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN IN AN AMOUNT EQUIVALENT TO US$20.0 MILLION AND A GEF TRUST FUND GRANT IN AN AMOUNT OF SDR 16.8 MILLION TO THE REPUBLIC OF INDONESIA FOR THE SOLAR HOME SYSTEMS PROJECT December 17, 1996 This document has a restricted distributionand may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit - Indonesian Rupiah (Rp) (As of September 1996) US$ I = Rp 2,341 Rp I billion = US$ 0.427 million FISCAL YEAR April 1 - March 31 WEIGHTS AND MEASURES 1 metric ton = 1,000 kilograms (kg) I liter (1) 0.0063 barrels (bbl) 1 kilometer(km) = 0.6215 mile (mi) I kilovolt(kV) = 1,000volts(V) 1 megavoltampere (MVA) 1,000 kilo-voltamperes(kVA) 1 megawatt(MW) 1,000 kilowatts(kW) 1 gigawatt hour (G Wh) = I million kilowatt hours (k Wh) I terrawatt hour (TWh) = I billion kilowatt hours (kWh) ABBREVIATIONS BAKOREN - National Energy Board BAPPENAS - National Development Planning Agency BPPT - Agency for the Assessment and Application of Technology CO, - Carbon Dioxide DGEED - Directorate-Generalof Electricity and Energy Development DRE - Decentralized Rural Electrification EA - Environmental Assessment FCCC - The Framework Convention on Climate Change GEE - Global Environmental Facility GBHN - Garis-Garis Besar Haulan Negara (Outlines of State Policy) GOI - Government of Indonesia IERR - Internal Economic Rate of Return ISO - International Standards Organization LRMC - Long Run Marginal Cost LSDE - Technical Implementation Unit & Energy Technology Laboratory MME - Ministry of Mines and Energy MOC - Ministry of Cooperatives and Small Enterprises Development PERTAMINA - National Oil and Gas Company PLN - State Electricity Corporation PIP - Project Implementation Plan PSG - Project Support Group PV - Photovoltaic RE - Rural Electrification REPELITA - Five-Year Development Plan SHS - Solar Home System TA - Technical Assistance Actg. Vice President: Ms. Marianne Haug Director: Ms. Marianne Haug Division Chief: Mr. Peter R. Scherer Staff Member: Mr. Arun Sanghvi FOR OFFICIAL USE ONLY INDONESIA SOLAR HOME SYSTEMS PROJECT LOAN/GRANT AND PROJECT SUMMARY1 Borrower The Republic of Indonesia Implementing Agency Private sector firms engaged in the supply and installation of solar photovoltaic home system Beneficiaries Rural households without access to grid electricity in the provinces of West Java, South Sulawesi and Lampung(Sumatera) Poverty Not applicable Loan Amount US$20.0 million equivalent Terms Standard variable interest rate for a term of 20 years, including five years of grace for currency pool loans. Commitment Fee 0.75 percent on undisbursed loan balances, beginning 60 days after signing, less any waiver. Grant Amount GEF Trust Fund Grant of SDR 16.8 million (US$24.3 million equivalent) Terms Grant Financing Plan See Schedule A Economic Rate of Return 39% including global environmental benefits Map IBRD 26570 1 GEF and IBRD are financing mutually dependent activities and therefore this document is intended to meet both GEF and IBRD processing requirements. A GEF project document based on the SAR has been prepared to meet GEF Council and Public Information needs. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN AND GEF TRUST FUND GRANT TO THE REPUBLIC OF INDONESIA FOR THE SOLAR HOME SYSTEMS PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed loan and a GEF Trust Fund Grant to the Republic of Indonesia for respectively $20.0 million equivalent and SDR 16.8 million (about US$24.3 million equivalent) to help finance the Solar Home Systems Project. The Bank loan would be for 20 years, including five years of grace, at the Bank's standard variable interest rate. The proceeds of the loan would be onlent by GOI to Participating Banks (PBs) for a term of 20 years, including five years grace, at a variable rate reflecting the market rate for domestic funds. GOI would bear the foreign exchange risk. The PBs would re-finance up to eighty percent of the credit they extend to subborrowers at prevailing market rates. The GEF grant, except for US$4.3 million for technical assistance, would be channeled to the PBs on behalf of rural households, who are the ultimate beneficiaries of the Project. 2. The Chief Executive Officer of the GEF has endorsed the Project on December 16, 1996, pursuant to paragraph 30 of the Instrument for the Establishment of the Restructured Global Environment Facility. 3. Background The power sector has expanded rapidly during the 1980s and 1990s. Between 1981/82 and 1994/95, PLN's electricity sales grew at an average annual rate of over 14%, while the number of customers grew nearly six-fold, from 3.2 million to about 19.5 million. PLN's implementation capacity has grown significantly, and it is connecting over 1.5 million new customers a year, a pace unmatched by a single utility. Electricity access has reached nearly two-thirds of the rural villages -- a ten- fold increase from the number of electrified villages in 1980/81. 4. Yet the transition to electricity proceeds at a slow pace for much of rural Indonesia. Today, over 115 million Indonesians, out of an estimated 195 million, remain "in the dark", without access to electricity, and most with little or no hope of getting it in the near future. The vast majority of this population segment (about 80 percent) lives in rural areas. For meeting their basic lighting needs, rural households are forced to make do with vastly inferior yet more expensive energy sources than electricity, such as candles, flashlights, and most commonly, kerosene fueled lamps. Illumination produced from such traditional sources utilizing kerosene is dim and creates eye strain if reading is attempted. Furthermore, such forms of lighting are polluting and unsafe. 5. Indonesia's current wide disparities in electricity coverage -- urban-rural as well as regional -- pose a direct challenge to the Government's objective of achieving a balanced spatial distribution of development and to reduce the inequality in quality of life. Indonesia's efforts to provide electricity to all its citizens face daunting technical and financing obstacles on account of the geographic dispersion and low energy demand of much of the rural population. The conventional options of grid extension and scattered diesel generator operations will prove to be impractical in extending coverage to all households, even within 30 years; setting aside the adverse environmental consequences of doing so. For an estimated 8 million rural households -- about 35 million people -- that live in remote islands and villages or are dispersed within the boundaries of villages that have already been electrified, home size solar photovoltaic (PV) systems provide a cost effective and fast alternative to conventional electrification. -2- 6. Government Strategy Until recently, the Government's strategy focused on the conventional mode of grid extensions and deployment of isolated diesel generators for rural electrification (RE). The Government, with Bank assistance, has developed a Master Plan for expanding RE coverage, which it is now implementing with Bank financing. More recently, GOI has started to recognize the potential role for off-grid/decentralized rural electrification (DRE), for example, solar PV home systems, as a complement along side the grid extension program. Underlying the Government's longer term vision of installing one million solar home systems (BPPT's 50 MWp program), is the recognition that increasing penetration of solar home systems (SHS) in rural Indonesia will help to: (i) increase the pace of electrification coverage, at a time when PLN's "hands are full" implementing the Master Plan for grid extension; and (ii) reduce the mounting burden of financing expansion and operations of PLN supply to satisfy uneconomic rural loads. 7. Climate Change Indonesia has ratified the FCCC on August 23, 1994, so that it is eligible to receive GEF funds under this convention. In order to help fulfill its FCCC national commitments, Indonesia has initiated two greenhouse gas mitigation strategy studies. The Asia Least-Cost Greenhouse Abatement Strategy (ALGAS) project, financed by UNDP/GEF, examines Indonesia's GHG emission reduction options in an Asia regional context. Indonesia is also a participant in the second round of study activities financed under the U.S. Country Studies Program. Although both studies are still under preparation, the relevance of photovoltaics as a greenhouse emissions abatement option for Indonesia is clear. Indonesia has a large, growing and dispersed rural population, a substantial fraction of whom are not electrified and who presently consume fossil fuel-based energy for lighting and radio and TV services. As a zero greenhouse gas emitting technology, the Solar Home Systems can meet these basic energy demands while substituting for higher polluting kerosene, diesel and grid-based options. 8. Lessons From Previous Bank/GEF Involvement The Bank has been active in Indonesia's power sector for twenty-five years during which time GOI has borrowed more than US$ 4.7 billion in Bank loans and IDA credits to undertake 25 power projects, of which 19 have been completed and had PCRs prepared. Despite some implementation problems, past Bank-financed PLN projects have been generally successful and have helped strengthen PLN's capabilities in almost every aspect of its operations: expansion of generation, transmission and distribution facilities and rural electrification and institutional development of PLN. The negative lessons largely concern implementation. Most projects have suffered delays due to extended procurement cycles. Technical assistance for institutional capacity building has in some cases fallen short of expectations due to limited absorptive capacity and inadequate supervision and ownership. 9. Starting around 1994, the Bank and Government have shifted their emphasis towards issues of sector structure, private sector participation and regulation. The Bank is now supporting specific interventions where private sector participation is not readily forthcoming; they are transmission and distribution management and investment, sector expansion outside Java, renewable energy and demand side management, and rural electrification. The Bank's first lending operation for rural electrification by grid extension (RE I, Loan 3180-IND), provided US$329 million to finance the bulk of the foreign exchange costs of a time slice of the RE development plan through FY 94/95, and closed in June 1995. OED's evaluative memorandum noted that the project achieved or exceeded most of its physical objectives, in spite of some delays mainly due to procurement procedures. On the institutional side, RE planning was substantially improved by PLN's development of a RE Master Plan for grid extension to electrify the remaining villages. The project's successes prepared the ground for the more ambitious successor lending operation for grid-expansion-based rural electrification, the Second Rural Electrification Project (RE II, Loan 3845-IND approved FY95). The RE II project also aims to reduce the present and future unit costs of RE, and thus address thus to facilitate the long term sustainability of PLN's RE program. -3- 10. Experience with solar PV and decentralized RE Given the Bank's limited involvement in solar PV projects, there are no relevant Bank reports on past projects. Ongoing experience is limited to the IDA/GEF-supported solar PV component of the India Renewable Resources Development Project (Ln. 3544-IN/Cr. 2449-IN). One key lesson learned from the India project is that timely project implementation is facilitated by: (i) pipeline development, i.e., pre-identification and preparation of sub-projects, and (ii) early development and dissemination of technical specifications. Further, the participating dealers can operate more efficiently if they have easy access to commercial banks, and the procedures for procurement and disbursement of Bank funds are simple, straightforward, and in line with normal commercial practices. 11. The proposed Indonesia SHS Project design -- central elements of which are a private-sector based, market-conforming supply, delivery and financing mechanisms, with a key role for the Government in promoting quality equipment and performance by setting standards and certification -- builds upon the international experience and the Indonesia experience, and is fully consistent with the findings and recommendations of two recently released Bank reports'. 12. Rationale for Bank Involvement The Bank is committed to supporting renewable energy development in Indonesia, as stated in the Indonesia Country Assistance Strategy (CAS) that was presented to the Bank's Board on March 21, 1995, and the CAS Progress Report that was discussed on June 4, 1996. The proposed Project design and implementation strategy typify the defining characteristics of the transition that is underway in the assistance strategy for Indonesia: (i) achieving poverty reduction through increased funding for regional development, and a shift towards smalle and regionally oriented projects targeted at reducing urban-rural disparities in the quality of life; and (ii) striking the appropriate balance between public and private roles in energy distribution. 13. The Bank's comparative advantage in supporting decentralized rural electrification (DRE) is by virtue of its status as the strategic and trusted partner of GOI in advancing RE. The Bank has engaged in a long standing and comprehensive dialogue with GOI that goes well beyond this Project, and focuses on the overall framework for rural electrification. The Bank has a close working relationship with all GOI agencies concerned with RE, based on in-depth sector work and two major conventional RE projects (para 9). Solar home systems are one of the key elements of the overall least cost decentralized RE strategy in Indonesia, and they complement the least cost conventional RE program. The SHS Project will provide a means to continue the Bank's dialogue with GOI and to influence the implementation of a sustainable and environmentally sound RE development program, while encouraging private sector participation and the creation of commercial markets for alternative energy, and continue the process of improving the policy and institutional environment, all matters of high priority on GOI's as well the Bank's agenda. 14. Eligibility for GEF Support The SHS Project is fully consistent with the: (i) the guidance from the Convention of the Parties (COP), and (ii) GEF Operational Strategy, in particular with Operational Program 6, which has the aim of promoting the adoption of renewable energy by removing barriers and reducing implementation costs. The barriers targeted by this Project are: (i) the lack of established high-volume supplier dealer chains; (ii) high prices; and (iii) lack of term credit. The SHS Project is expected to help lower the unit costs of solar PV technologies in Indonesia, given the downward sloping technology cost learning curve. In addition, the SHS Project is expected to set a new lower global Rural Energy and Development: Improving Energy Supplies for 2 Billion People, A World Bank Best Practice Paper, Report No. 15912-GLB, July 1996; and Best Practices for Solar Photovoltaic Household Electrification Programs: Lessons from Experiences in Selected Countries, Asia Technical Department, World Bank Technical Paper No. 324, 1996. -4- benchmark price for SHS, thereby stimulating further penetration and global environmental benefits from abatement of GHG emissions in other countries as well. 15. Project Objectives The national objectives of the proposed Project are to: (i) provide the modem energy form of electricity to rural customers who cannot be served economically or in a timely manner by conventional rural electrification; (ii) facilitate participation by the private sector in advancing renewable energy commercialization; (iii) promote environmentally sound energy resource development in Indonesia and to reduce the energy sector's dependence on fossil fuels; and (iv) strengthen Indonesia's institutional capacity to support and sustain decentralized rural electrification using solar photovoltaics. The global environmental objective of the proposed Project is to mitigate emissions of CO2 in Indonesia by replacing the use of kerosene for lighting or diesel-based power generation by SHS. 16. Performance Indicators The key performance indicators for monitoring achievement of the Project objectives are: (i) the number of SHS units sold per year and the cumulative number of people served by the Project, which are measures of the effectiveness of the Project in serving the rural population; (ii) CO2 emissions abated, which is a measure of the extent to which the global objective has been attained; (iii) customer timely repayment rates, which are indicators of customers' satisfaction with their SHS systems and also of the extent of cost recovery; (iv) installed price, which is a measure of the cost- effectiveness of the SHS units in meeting the customers' needs; (v) number of dealers, which is a measure of the extent of market development; (vi) number of dealers considered as having "problem loans" by PBs, which is a measure of the extent to which the Project is successful in establishing a sustainable delivery mechanism; and (vii) timely completion of the various steps for (a) the decentralized rural electrification study and action plan, and (b) strengthening BPPT's capacity to certify the technical capabilities of solar PV systems as well as to monitor their functioning in the field. 17. Project Description The proposed Project consists of: (i) a credit component -- comprising an IBRD loan and a GEF grant -- to enable purchase of solar home systems mainly by rural households on an installment plan basis; and (ii) technical assistance, including support of detailed monitoring and evaluation activities during project implementation. 18. The credit component involves the provision of the modem energy form of electricity to about 0.9 million people in rural areas, by the sale and installation of 200,000 solar PV systems (10 MWp) mainly for homes and in a limited number of commercial establishments such as small shops. The geographical scope of the SHS Project is three selected regions -- centered around the provinces of West Java, Lampung, South Sulawesi -- where PLN service under the least cost grid expansion plan for rural electrification is not expected for at least three years, or where it will be uneconomic for PLN to provide such service. 19. The sales of SHS units to rural households will be made by private enterprises (SHS dealers), who will be responsible for procurement of components, installation and maintenance. The dealers will enter into hire-purchase contracts with the rural households, who will pay for the systems in monthly installments, over a term of about four years, after taking account of: (i) the customer's down payment, determined by each dealer and customer but typically in the range US$75-100 equivalent, and (ii) the GEF grant payment made on behalf of the rural household after the system has been installed -- US$75/SHS in Java and US$125/SHS outside Java. The SHS dealers would bear the collection risk for customer payments. -5 - 20. In turn, the SHS dealers will require access to credit from commercial banks of their choosing -- the PBs -- for up to five years. The credit extended by a PB to a SHS dealer (subborrower) would be based on the dealer's cash flow requirements as well as the PB's standard financial appraisal of the dealer. The PBs' loans to the dealers would be at the prevailing commercial interest rates, with the PBs bearing the risk on the credit extended to a dealer. The PBs, in turn, would re-finance 80 percent of the credit extended to SHS dealers from the IBRD credit made available to them at market rates, under onlendmig arrangements through the Government of Indonesia (GOI). The dealers would not be eligible for any other Government financial support for the SHS units to be sold under the proposed Project. 21. The technical assistance component of the proposed Project comprises of (i) project implementation support; and (ii) capacity building, which provides for (a) assistance to GOI to develop a strategy and corresponding action plan for serving those segments of the rural population for which solar home systems are cheaper than conventional electrification options; and (b) strengthening BPPT's capacity to support solar PV product and market development in areas such as setting of equipment standards, product qualification testing and certification, and best practices identification and dissemination. 22. Project Costs and Financing The total Project cost, inclusive of duties and taxes and price contingencies is estimated at US$ 118.1 equivalent, with a foreign exchange cost component of US$ 85.0 million equivalent, or about 72 percent of the total cost. The proposed Bank loan of US$ 20.0 million equivalent, combined with a GEF grant of SDR 16.8 million (US$ 24.3 million equivalent), would finance about 38 percent of the required financing. Whereas the full GEF grant amount of US$24.3 million equivalent would be committed upon Board approval, disbursements would be authorized in two phases. The first phase grant amount of US$15.75 million equivalent would be available for disbursement upon loan effectiveness, and would cover grant payments for the sale and installation of 120,000 units over the entire Project duration period as well as the bulk of the TA. The second phase amount of US$ 8.55 million equivalent would cover the remaining 80,000 units and the residual TA costs; the second phase grant funds could be disbursed only after authorization by the GEF Chief Executive Officer, based on a mid-term review that would include a panel of independent experts. 23. For the credit component, with a financing requirement of US$ 111.8 million equivalent, the subborrowers would provide an estimated US$ 66.8 million equivalent, consisting of the private dealers' equity and reinvested profits, and the customers' down payments. The balance of US$ 45.0 million equivalent would be provided by a GEF grant of US$ 20.0 million equivalent, with the remainder (US$ 25.0 million equivalent) provided as loans on the basis of 80 percent (US$20.0 million equivalent) from the Bank, and 20 percent (US$ 5.0 million equivalent) from the PBs. The TA component (US$ 6.3 million equivalent) would be financed by a GEF grant of US$ 4.3 million equivalent to BPPT, with the balance of US$ 2.0 million equivalent to be financed by GOI/BPPT and the private sector. Schedule A shows Project costs and the financing plan. Schedule B shows the amounts and methods of procurement and disbursement. Schedule C summarizes key Project processing events, and Schedule D summarizes the status of Bank Group operations in Indonesia. Schedule E presents Indonesia at a Glance. A map is also attached. The Staff Appraisal Report No. 15983-IND, dated December 17, 1996 is being distributed separately. 24. Project Implementation The credit component will be executed by the SHS dealers (para 19). To date, thirteen potential SHS dealers have been identified, and it is expected that some additional dealers will be forthcoming over the next twelve months. The identified dealers have submitted business plans and credit applications to four PBs. It is expected that 5-7 dealers would be able to reach financial closure with their respective PBs shortly following loan effectiveness. BPPT has the responsibility for -6- contracting for the technical assistance components and contractor management. A Project Implementation Plan has been prepared, a key element of which is the appointment of a Director acceptable to the Bank to head the Project Support Group (PSG). The PSG would be responsible for, inter alia, verifying compliance by the dealers of the equipment installed and proper utilization of the GEF grant, establishing contacts with and assessing any new dealers who wish to participate in the Project, maintaining two-way links with prospective and actual customers, and monitoring and evaluation of the Project's progress. Advance preparations for contractor selection for the PSG are underway and it is expected that the PSG would be mobilized within two weeks following loan effectiveness. 25. Benefits The fundamental justifications for this Project are the improvement in the quality of life of the remote rural households as they switch to a clean, modem form of energy for high-value end-uses such as lighting, security, entertainment, and education, and the global environmental benefits. The primary beneficiaries of the SHS will be women and children, as the burden of the low quality, polluting lighting from kerosene lamps falls mainly on them. In particular, kerosene lighting is far less suitable for reading than the lighting provided by the SHS, and the exposure to the fumes from these lights is typically higher for women and children, who tend to stay indoors. Broadly, the proposed Project will lead to: (a) direct household benefits stemming from (i) a quantum improvement in lighting quality and quantity, which is expected to lead to a profound and positive effect on the quality of education and learning experienced by children, increased productivity and potential for in-home income generation activities, made possible by extending available hours of work, particularly for women, and increased freedom of movement and ability for community participation; and (ii) the information flow and outreach provided by television, one of the few channels to the external world available to women and children; (b) global environmental benefits, arising from the reduction in CO2 emissions as a result of the switch from fossil fuels to solar energy; and (c) regional development benefits, arising from the project's inclusion of two provinces (Lampung and South Sulawesi) outside Java, with a higher per unit grant outside Java, where PLN's rural electrification ratios are particularly low, and there is an urgent need to develop sustainable means to serve these areas. 26. Cost-benefit analysis The global environmental benefits are measured by the international community's willingness-to-pay (WTP), i.e., the value of the GEF grant, while the national benefits are measured by the households' WTP. The internal economic rate of return (IERR), including the global environmental benefits, is 39%; if the global environmental benefits are excluded, then the IERR is 12%. These IERR values are under-estimates because the consumer's surplus is excluded from the benefits. 27. Risks and sensitivity analysis The proposed Project faces a number of inter-related implementation risks. First, there is the risk that less than the target number of 200,000 customers are interested in buying the SHS, even though the dealers are willing and able to make the sales, because of factors such as lack of affordability, lack of confidence in or information about the SHS, or concerns that PLN service would become available in the near future. Second, there is the risk that the dealers prove to be incapable of reaching the sales target, or that only 2-3 dealers are able to establish themselves even though, in principle, there is sufficient demand for SHS. This failure could occur due to factors such as lack of management skills, or poor installment collection mechanisms. Third, there is the risk that the consumers are not satisfied with their systems, because of factors such as system failures, poor after-sales service, or an inability of the systems to meet the customers' energy needs. 28. Several key risk mitigation factors have either already been undertaken or identified for use during project implementation. These include: (i) an information campaign to increase customer awareness about SHS; (ii) on an as-needed basis, extending Project market areas to cover districts immediately -7- adjacent to the three selected provinces, or adding a fourth province; (iii) adding new dealers in the initial years; (iv) aiming for good dealer selection by requiring them to have a large stake in the business, and ensuring that they meet the normal appraisal standards of the PBs; (v) encouraging the dealers to "start small, finish big" so that they can resolve any initial weaknesses in their management or operational systems; (vi) requiring the equipment sold to meet world-class technical specifications so as to reduce the odds of equipment failure; (vii) requiring the dealers to offer comprehensive consumer protection packages, including return policies, warranties, and after-sales service; and (vii) maintaining two-way links with the customers, including audits of installations and providing the customers convenient means of contacting the PSG. 29. A sensitivity analysis shows that the IERR is robust with respect to the above risks (para 27). Under Scenario A, sales of only 160,000 SHS, instead of 200,000 are achieved, the IERR declines from 39% to 32%. Under Scenario B, some SHS units fail to provide benefits after they have been installed, and the customers stop making monthly payments or incurring replacement expenditures. The failure rate of the SHS units would have to be 19% for the IERR to fall to 10%. Such a high system failure rate has not been experienced in Indonesia's Government sponsored programs. 30. Sustainability In the post-Project phase, when the GEF grant payments would end, it is expected that the dealers will be able to maintain themselves in business as a result of a combination of the following outcomes. First, there would be cost reductions in real terms stemming from: (i) economies of scale, particularly in sales-and-service chains and assembly of balance-of-system components, (ii) expected long-term world-wide trend reductions in solar PV panel prices, and (iii) the ending of the need to incur the relatively high initial costs of establishing sales-and-service chains. Second, there would be increases in consumer affordability, arising from the expected continued rapid growth of the Indonesian economy as a whole and of rural incomes in particular. Third, the Project would facilitate elimination of other key barriers, such as lack of commercial banks' familiarity with the SHS business, limited customer awareness of SHS, lack of an official decentralized rural electrification plan with a clear role for solar PV products, lack of a local testing facility, and the absence of Indonesia-specific world-class technical standards. 31. Environment and Resettlement The proposed SHS Project is expected to positively affect the environment. Solar home systems are one of the most environmentally benign forms of energy generation, with zero carbon dioxide emissions. There are no air or water emissions associated SHS; in addition, there is replacement of fossil fuels (kerosene and diesel), whose use leads to emissions of green house gases and other pollutants. Lead batteries used in the SHS will be located inside the house; further, they will not affect the environment because there is recycling of lead batteries in Indonesia. There are no resettlement issues as there will be no land transactions under this Project because the solar PV systems will be installed on existing homes or commercial establishments. 32. Agreements Reached with the Borrower During negotiations the following agreements were reached with the Government of Indonesia: (i) terms and conditions of the BI Subsidiary Loan Agreement (SLA), the Onlending Agreements (OLA) with private PBs and Subsidiary Loan Agreements with State-owned PBs, and terms and conditions of the Subloan Agreements between PBs and SHS dealers; (ii) terms and conditions for the authorization and channeling of GEF grant; (iii) eligibility criteria for SHS dealers; (iv) SHS equipment technical specifications and certification requirements; (v) no additional GOI support for SHS dealers; (vii) terms of reference for the mid-term review panel and release of GEF Phase 2 grant; (vii) performance indicators for monitoring the project's progress; (viii) Borrower shall activate the SHS Working Group to provide the local working counterparts to the consultants selected to undertake the Decentralized RE Strategy Study and SHS Action Plan; (ix) Borrower shall: (a) undertake and complete, -8- by March 1998, a "Decentralized RE Strategy" study, in accordance with terms of reference and in a manner satisfactory to the Bank; (b) based on this study's results and recommendations and taking into account the Bank's comments, prepare a draft Decentralized Rural Electrification Plan, with a focus on the niche for solar PV, furnish the said draft plan to the Bank for review and comments, by December 1998, and by June 1999, finalize and adopt the same taking into account the comments, if any, thereon by the Bank; 33. Borrower shall ensure that BI shall: (i) regularly monitor each PB's financial performance; (ii) require that each PB maintain its financially healthy ("sehat") status; and (iii) inform the Bank and the Borrower that a situation has arisen that may require the reallocation of the uncommitted balance of funds allocated to a PB if that PB fails to meet BI's requirements for "sehat" classification; 34. Borrower shall ensure that the PBs shall: (i) utilize the specified eligibility criteria for subborrowers; (ii) utilize the specified subproject review criteria and process; and (iii) take reasonable steps to ensure that the goods and services procured by the subborrowers are at reasonable prices taking account of efficiency, economy, reliability and other pertinent factors; 35. Borrower shall ensure that BPPT shall: (i) with respect to the technical assistance consultancy contract for the PSG, initiate and undertake in a timely manner all steps necessary to ensure that the PSG is mobilized by no later than May 15, 1997, in accordance with TOR, staffing and resources acceptable to the Bank; (ii) with respect to the technical assistance component for strengthening BPPT- LSDE capabilities for testing and technical certification of SHS equipment: (a) LSDE shall initiate and undertake in a timely manner all steps necessary to ensure that the consultants are mobilized by no later than August 31, 1997, in accordance with TOR acceptable to the Bank; (b) submit, by December 31, 1997, a time-bound action plan, including major intermediate milestones, to achieve ISO 25 certification for its LSDE unit, acceptableto the Bank; and (c) the consultants' work shall be completed by March 31, 1999. 36. Condition of Effectiveness. Execution of subsidiary loan agreement between MOF and BI, and at least two SLAs/OLAs between MOF/BI and the PBs, which include provisions governing the channeling of GEF grant funds, satisfactoryto the Bank. 37. Actions to be Taken before Withdrawal of Loan and Grant Proceeds. The conditions of disbursement for each PB are: (i) signing of an SLA/OLA between MOF/BI and the PB, satisfactory to the Bank; and (ii) obtaining prior authorization from the Bank for ceiling amounts on grant disbursement for the subborrower. The condition for disbursement for part or all of the Phase 2 GEF grant funds is the GEF Chief Executive Officer's authorization. 38. Recommendation. I am satisfied that the proposed loan will comply with the Articles of Agreement of the Bank and the proposed grant will comply with the provisions of Resolution No. 94-2 of the Executive Directors relating to the restructuring and replenishment of the Global Environment Facility and recommend that the Executive Directors approve the proposed loan and grant. Attachments Washington DC James D. Wolfensohn December 17, 1996 by Gautam Kaji Schedule A INDONESIA SOLAR HOME SYSTEMS PROJECT Estimated Costs and Financing Plan (US$ million) Local Foreign Total Credit Component 23.0 69.1 92.1 Technical Assistance 2.0 4.3 6.3 of which - Implementation Support 1.0 3.1 4.1 - Policy Support 0.5 0.7 1.2 - Institutional Development 0.5 0.5 1.0 Base Cost 25.0 73.4 98.4 Duties and Taxes 2.5 7.3 9.8 Price Contingencies (Credit Component) 5.5 4.3 9.8 Total project Cost 23A KJ Ulu Financing Plan: IBRD 0.0 20.0 20.0 GEF 0.0 24.3 24.3 GOI/BPPT 1.5 0.0 1.5 Participating Banks 1.2 3.8 5.0 Subborrowers 30.4 36.9 67.3 Total 2 B L Schedule B Page 1 of 2 INDONESIA SOLAR HOME SYSTEMS PROJECT Procurement and Disbursement A. Summaries of Procurement Arrangements (US$ million) Procurement Method Other /a N.B.F. /b Total A. Credit Component 101.9 0.0 101.9 (20) (20) [201 [20 Taxes 0.0 9.8 9.8 Subtotal 101.9 9.8 111.8 (20.0) (0.0) (20.0) [20.0] [0.0] [20.01 B. Technical Assistance Implementation Support 4.1 0.0 4.1 [3.1] [3.1] Policy Support 1.2 0.0 1.2 [0.7] [0.7] Institutional Development 1.0 0.0 1.0 [0.5] [0.5] Subtotal 6.3 0.0 6.3 (0.0) (0.0) (0.0) [4.31 [0.01 [4.3] Total 108.2 9.8 118.1 (20.0) (0.0) (20.0) [24.3] [0.0] [24.3] Note: Terms in ( ) and [] are amounts financed by lBRD and GEF, respectively /a Goods and services to be procured by limited international bidding or established commercial practices /b Not Bank financed Schedule B Page 2 of 2 INDONESIA SOLAR HOME SYSTEMS PROJECT B. Disbursement Arrangements Amount of Percentage of Expenditures Category Loan and Grant to be Financed /a Allocated (US$ mill. equiv.) A. IBRD Loan - Sub-loans 20.0 Refinance 80% of the sub-loans made by participating banks to dealers B. GEF Grant - SHS Installation 20.0 100% /b - T.A. 4.3 100% /c /a Expenditures financed are exclusive of value-added-tax (VAT). /b $75/SHS unit installed in Java, and $125/SHS unit installed outside Java. /c In addition, GOI/BPPT will finance $1.5 million equivalent TA for implementation support, policy support and institutional development, and the subborrowers would finance $ 0.5 million equivalent for implementation support. Estimated Disbursements ($million) Bank Fiscal Year 1997 1998 1999 2000 2001 2002 IBRD Annual 0.3 2.2 4.5 7.0 6.0 0.0 Loan Cumulative 0.3 2.5 7.0 14.0 20.0 20.0 GEF Annual 0.3 3.5 5.2 6.2 7.3 1.8 Grant Cumulative 0.3 3.8 9.0 15.2 22.5 24.3 Schedule C INDONESIA Solar Home Systems Project TIMETABLE OF KEY PROJECT PROCESSING EVENTS (a) Time taken to prepare the project: 2 years' (b) Prepared by: BPPT, but mostly with assistance from Bank-managed grant financed consultants- local and foreign (c) First Bank mission: June 1994 (d) Appraisal mission departure: May 1996 (e) Negotiations: December 1996 (f) Planned date of effectiveness: May 1997 (g) List of relevant PCRs and PPARs: Loan 3180-IND, Rural Electrification ICR Date: December 1995, Report No. 15210 Project processing took more time than the norm for power projects in Indonesia, since preparation for this project has led the Bank's power operations into new areas -- decentralized rural electrification, renewable energy, private sector, rural markets -- that entailed the laying of considerable ground work to collect the baseline data, and to seek out stakeholder views and commitments. Furthermore, there is no single agency/Ministry that has as its mandate the filling of this preparatory void. In addition to ensuring quality at entry, the additional time was required to pre-identify several private sector dealers that would qualify for sub-loans and grants under the project, a process that could normally have been undertaken following loan effectiveness, but that would also delay actual implementation. Increased processing time also resulted from having to comply with two sets of reviews and procedures - IBRD and GEF. The report is based on an appraisal mission undertaken in June 1996 comprising Mr. Arun P. Sanghvi (Task Manager), Messrs. Subodh Mathur and Jim Finucane (consultants), and Mr. Anil Cabraal (ASTAE). Peer reviewers were Messrs./Mmes. Magdalena Manzo (SA2EI), Khalid Siraj (FSD), and Ernesto Terrado (IENPD). The GEF external technical reviewer was Mr. Scott Sklar (Executive Secretary, Council of International Solar Electric Industries Association). Mr. Javad Khalilzadeh-Shirazi, Acting VP (EAP), Mrs. Marianne Haug, Director (EA3DR) and Mr. Peter R. Scherer, Division Chief (EA3IP) have endorsed the project. MOP Schedule D Run Date: 10/16/96 IBRD Loans and IDA Credits in the Operations Portfolio Status of Bank Group Operations in Indonesia Difference Original amount in US$ millions between expected Project Loan or Fiscal and actual ID Credit No. Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements' Number of Closed Loans: 147/ Credits: 48 Active Loans ID-PE-3923 L2932 1988 GOI Jabotabek Urban Transport 150.00 7.83 7.83 ID-PE-3946 L3112 1990 GOI Public Works Institutional Dev. & Tmg 36.10 0.01 0.01 ID-PE-3873 L3158 1990 GOI Second Secondary Education 154.20 25.24 25.24 ID-PE-3973 L3182 1990 GOI Third Telecommunications 350.00 37.50 23.23 60.73 ID-PE-3960 L3209 1990 GOI Gas Utilization 86.00 42.53 42.53 ID-PE-3868 L3219 1990 GOI Second Jabotabek Urban Development 190.00 33.07 32.11 ID-PE-3977 L3246 1991 GOI Third Jabotabek Urban Development 61.00 21.64 20.36 ID-PE-3959 13282 1991 GOI Fertilizer Restructuring 221.70 0.24 10.71 8.05 ID-PE-3981 L3302 1991 GOI Provincial Irrigated Agriculture Dev. 125.00 20.50 22.70 43.20 ID-PE-3943 L3304 1991 GOI East Java/Bali Urban Development 180.30 28.01 28.01 ID-PE-3912 L3305 1991 GOI Yogyakarta Upland Area Development 15.50 3.51 3.23 ID-PE-3922 L3340 1991 GOI Sulawesi-Irian Jaya Urban Development 100.00 11.65 8.87 ID-PE-3975 L3349 1991 GOI Power Transmission 275.00 103.40 19.24 117.14 ID-PE-4002 L3385 1991 GOI Technical Assistance for Infrastructure 30.00 11.33 11.33 ID-PE-3928 L3402 1992 GOI Agricultural Financing 106.10 54.03 48.73 ID-PE-3966 L3431 1992 GOI Third Non-Formal Education 69.50 14.17 2.47 ID-PE-3940 L3448 1992 GOI Primary Education Quality Improvement 37.00 21.20 11.90 ID-PE-4012 L3454 1992 GOI BAPEDAL Development 12.00 2.16 0.66 ID-PE-3860 L3464 1992 GOI Treecrops Smallholder 87.60 46.19 20.09 ID-PE-3997 L3482 1992 GOI Fourth Telecommunications 375.00 222.24 42.24 ID-PE-3949 L3490 1992 GOI Third Kabupaten Roads 215.00 5.06 5.06 ID-PE-3969 L3496 1992 GOI Primary School Teacher Development 36.60 15.34 10.04 ID-PE-3916 L3501 1992 GOI Suralaya Thermal Power 423.60 232.21 13.11 ID-PE-3970 L3526 1993 GOI Financial Sector Development 307.00 39.81 45.14 84.95 ID-PE-3914 13550 1993 GOI Third Community Health & Nutrition 93.50 50.63 7.13 ID-PE-4006 L3579 1993 GOI E. Indonesia Kabupaten Roads 155.00 41.82 17.81 Page 1 of 3 Difference Original amount in US$ millions between expected Project Loan or Fiscal and actual ID Credit No. Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements' ID-PE-4009 L3586 1993 GOI Integrated Pest Management 32.00 23.62 13.12 ID-PE-3999 L3588 1993 GOI Groundwater Development 54.00 36.53 2.73 ID-PE-4018 L3589 1993 GOI Flores Earthquake Reconstruction 42.10 8.96 8.96 ID-PE-4007 L3602 1993 GOI Cirata Hydroelectric Phase Il 104.00 78.51 52.71 ID-PE-3990 L3629 1993 GOI Water Supply & Sanitation for Low Income 80.00 57.70 22.70 ID-PE-3985 L3658 1994 GOI National Watershed Mgmt and Consvation 56.50 49.37 5.07 ID-PE-3945 L3712 1994 GOI Second Highway Sector Investment 350.00 244.10 74.10 ID-PE-3952 L3721 1994 GOI Skills Development 27.70 22.80 17.85 ID-PE-3998 L3726 1994 GOI Surabaya Urban Development 175.00 152.34 54.24 ID-PE-4020 L3732 1994 GOI Fifth Kabupaten Roads 101.50 56.68 -2.81 ID-PE-4010 L3742 1994 GOI Dam Safety 55.00 45.92 8.52 ID-PE-3890 L3749 1994 GOI Semarang-Surakarta Urban Development 174.00 136.27 22.37 ID-PE-4017 L3754 1994 GOI University Research for Graduation Study 58.90 47.60 6.20 ID-PE-3937 L3755 1994 GOI Integrated Swamps 65.00 53.47 6.22 ID-PE-3910 L3761 1994 GOI Sumatera & Kalimantan Power 260.50 244.36 43.86 ID-PE-3954 L3762 1994 GOI Java Irigation Improvements and Wtr Resource 165.70 137.29 21.49 ID-PE-3984 L3792 1995 GOI Land Administration 80.00 72.66 8.64 ID-PE-4019 L3801 1995 GOI Second Accountancy Development 25.00 22.14 9.94 ID-PE-3988 L3825 1995 GOI Second Professional Resource Development 69.00 52.85 -0.16 ID-PE-3979 L3845 1995 GOI Second Rural Electrification 398.00 380.29 46.63 ID-PE-3951 L3854 1995 GOI Kalimantan Urban Development 136.00 115.77 25.27 ID-PE-3972 L3886 1995 GOI Second Agriculture Research Management 61.00 61.00 ID-PE-3968 L3887 1995 GOI Book & Reading Development 132.50 130.22 -2.24 ID-PE-34891 L3888 1995 GOI Village Infrastructure 72.50 39.37 5.63 ID-PE-4001 L3904 1995 GOI Telecommunications Sector Modemization 325.00 325.00 ID-PE-3965 L3905 1995 GOI Fourth Health 88.00 86.72 -1.25 ID-PE-39754 L3913 1995 GOI Second Technical Assistance for Infrastructure 28.00 28.00 ID-PE-3978 L3972 1996 GOI Industrial Technology Development 47.00 46.00 3643.45 ID-PE-4021 L3978 1996 GOI Second Power Transmission and Distribution 373.00 373.00 ID-PE-4003 L3979 1996 GOI Second Teacher Training 60.40 59.60 5.65 ID-PE-39643 L3981 1996 GOI STD/AIDS 24.80 24.30 1.50 ID-PE-4008 L3984 1996 GOI Nusa Tenggara Agriculture Development 27.00 26.20 1.30 ID-PE-4011 L4007 1996 GOI Sulawesi Agriculture Area Development 26.80 26.80 0.75 ID-PE-4014 L4008 1996 GOI Kerinci SeblatICDP 19.10 19.10 ID-PE-39312 L4017 1996 GOI Second E. Java Urban Development 142.70 142.70 14.00 ID-PE-41896 L4030 1996 GOI Human Resource Capacity Building 20.00 20.00 0.51 ID-PE-37097 L4042 1996 GOI E. Java Junior Secondaraya Education 99.00 99.00 ID-PE-4004 L4043 1996 GOI Higher Education Support 65.00 65.00 1.50 Page 2 of 3 Difference Original amount in US$ millions between expected Project Loan or Fiscal and actual ID Credit No. Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements ID-PE-4016 L4054 1996 GOI Strategic Urban Roads 86.90 86.90 ID-PE-3987 L4062 1997 GOI C. Indonesia Secondary Education 104.00 104.00 ID-PE-41894 L4095 1996 GOI Sumatra Secondary Education 98.00 98.00 ID-PE-40521 L4100 1997 GOI Second Village Infrastructure 140.10 140.10 TOTAL 9,4440 0.00 201.45 5 113 4,79.28 Active Loans Closed Loans Total Total disbursed (IBRD and IDA) 3,190.83 14,219.69 17,410.52 Of which repaid 65.78 6,159.40 6,225.18 Total now held by IBRD and IDA 8,176.16 8,082.91 16,259.07 Amount sold 0.00 88.08 88.08 Of which repaid 0.00 82.35 82.35 Total undisbursed 5,051.12 22.63 5,073.75 a. Intended disbursements to date minus actual disbursements to date as projected at appraisal. Note: Disbursement data are updated at the end of the first week of the month. Page 3 of 3 Schedule D Page 4 of 6 Indonesia STATEMENTOF IFC's Committed and Dispursed Portfolio As of 08/31/96 In Millions US Dollars Committed Disbursed ----------IFC-------- ----IFC------------ FY Company Loan Equity Quasi Partic Loan Equity Quasi Partic Approval 1971 Unitex 0.00 .35 0.00 0.00 0.00 .35 0.00 0.00 1980 Semen Andalas 10.35 10.02 0.00 10.98 10.35 10.02 0.00 10.98 1982 Saseka Finance 0.00 .32 0.00 0.00 0.00 .32 0.00 0.00 1984 Saseka Finance 0.00 .06 0.00 0.00 0.00 .06 0.00 0.00 1986 PT Bali .44 0.00 0.00 0.00 .44 0.00 0.00 0.00 1987 Semen Andalas 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1988 Manulife 0.00 .32 0.00 0.00 0.00 .32 0.00 0.00 1989 PT Agro Muko 3.78 2.20 0.00 4.09 3.78 2.20 0.00 4.09 1989 PT Astra 0.00 11.62 0.00 0.00 0.00 11.62 0.00 0.00 1990 PT Indo-Rama 1.84 0.00 0.00 4.91 1.84 0.00 0.00 4.91 1991 LYON-MLF-Ibis 2.30 0.00 0.00 2.30 2.30 0.00 0.00 2.30 1991 PT Argo Pantes 16.88 13.00 0.00 26.50 16.88 13.00 0.00 26.50 1991 PT Astra 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1991 PT Indaci .80 0.00 1.83 0.00 .80 0.00 1.44 0.00 1991 PT Indo-Rama 10.31 6.18 0.00 0.00 10.31 6.18 0.00 0.00 1991 PT RMBA 8.67 .60 0.00 5.00 8.67 .60 0.00 5.00 1991 SEAVIIndonesia 0.00 1.50 0.00 0.00 0.00 1.50 0.00 0.00 1992 PT Bakrie Kasei 21.56 0.00 9.63 85.73 21.56 0.00 9.63 85.73 1992 PT KIA Keramik .94 1.70 0.00 6.18 .94 1.57 0.00 6.18 1992 PT Mitracorp 0.00 15.87 0.00 0.00 0.00 15.87 0.00 0.00 1992 PT Swadharma 24.89 0.00 0.00 44.47 24.89 0.00 0.00 44.47 1992 PT Viscose 7.92 0.00 0.00 16.58 7.92 0.00 0.00 16.58 1993 PT BBL Dharmala .79 0.00 0.00 1.27 .79 0.00 0.00 1.27 1993 PT Indo-Rama 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Generated by the Operations Information System (OIS) Page 1 Schedule D Page 5 of 6 Committed Disbursed ----------IFC ----IFC----------- FY Company Loan Equity Quasi Partic Loan Equity Quasi Partic Approval 1993 PT Nusantara 4.00 0.00 0.00 12.00 3.58 0.00 0.00 11.67 1993 PT Samudera 2.45 5.00 0.00 8.05 2.45 5.00 0.00 8.05 1993 Saseka Finance 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 KDLC Bali 15.00 1.14 0.00 0.00 15.00 1.14 0.00 0.00 1994 Prudential Asia 0.00 6.75 0.00 0.00 0.00 4.19 0.00 0.00 1994 PAMA (Indonesia) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1994 PT Astra 0.00 10.67 0.00 0.00 0.00 10.67 0.00 0.00 1994 PT KIA Keramik 0.00 1.40 0.00 0.00 0.00 1.40 0.00 0.00 1994 PT Mitracorp 2.54 4.12 0.00 0.00 2.54 4.12 0.00 0.00 1994 PT PAMA 0.00 .71 0.00 0.00 0.00 .71 0.00 0.00 1994 PT Saripuri 8.00 0.00 0.00 22.00 8.00 0.00 0.00 22.00 1995 PT Bakrie Kasei 30.00 3.00 0.00 0.00 30.00 3.00 0.00 0.00 1995 PT Bakrie Pet 12.00 2.00 0.00 0.00 12.00 2.00 0.00 0.00 1995 PT Bakrie Pipe 20.00 0.00 9.50 0.00 20.00 0.00 9.50 0.00 1995 PT Bunas Finance 10.00 0.00 0.00 6.00 10.00 0.00 0.00 6.00 1995 PT Citimas Captl 0.00 2.59 0.00 0.00 0.00 1.31 0.00 0.00 1995 PT Hotel Santika 9.00 0.00 5.00 0.00 0.00 0.00 0.00 0.00 1995 PT Indo-Rama 28.33 4.71 0.00 62.68 28.33 2.54 0.00 62.68 1995 PT KIA Serpih 15.00 6.35 0.00 55.00 15.00 6.24 0.00 55.00 1995 PT Panin Finance 6.00 1.93 0.00 8.00 6.00 1.93 0.00 8.00 1995 PT Viscose 25.00 0.00 0.00 35.00 25.00 0.00 0.00 35.00 1996 PT BBL Dharmala 15.00 0.00 0.00 35.00 15.00 0.00 0.00 35.00 1996 PT Dharmala 20.00 0.00 0.00 0.00 20.00 0.00 0.00 0.00 1996 PT Gleneagles 8.30 0.00 3.60 0.00 0.00 0.00 0.00 0.00 1996 PT KIA Keramik 25.00 6.22 0.00 81.00 9.43 .65 0.00 30.57 1996 PT Pramindo Ikat 25.00 7.35 25.00 300.00 0.00 0.00 0.00 0.00 Generated by the Operations Information System (OIS) Page 2 Schedule D Page 6 of 6 Committed Disbursed -----------IFC----------- ------------IFC------------ FY Company Loan Equity Quasi Partic Loan Equity Quasi Partic Approval Pending Commitments 1997 * KSP 20.00 15.00 0.00 15.00 1996 * PANIN FINANCE II 6.00 0.00 0.00 4.00 1996 * PANIN I - BLINC 0.00 0.00 0.00 4.00 1996 * PT ASIANAGRO 40.00 0.00 0.00 40.00 1995 * PT INDO-RAMA RI 0.00 2.50 0.00 0.00 Generated by the Operations Information System (OIS) Page 3 Schedule E Page 1 of 2 Indonesia at a glance Lower- POVERTY and SOCIAL East middle- Indonesia Asia income Development diamond' Population mid-1995 (millions) 1933 1,709 1 154 Life expectancy GNP per capita 1995 (USS) 980 840 1 700 GNP 1995 (bilhons USS) 190.5 1.436 1,962 Average annual growth, 1990-95 Population (%) 1.6 1.3 14 Labor force (%) 2.5 1.4 1 7 GNP Gross per primary Most recent estimate (latest year available since 1989) capita enrollment Poverty: headcount index (% of populatron) 14 Urban population (% of total populabon) 34 32 56 Life expectancy at birth (years) 63 68 67 Infant mortality (per 1,000 live bilths) 56 35 36 Child malnutrition (% ofchildren under 5) 39 17 Access to safe water Access to safe water (% ofpopulafon) 42 67 73 Illiteracy (% of populabon age 15+) 23 16 -Indonesia Gross pnmary enrollment (% of schooL-age population) 114 116 104 - Lower-middle-income group Male 116 119 105 Female 112 115 101 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1994 1995 e1 Economic ratios' GDP (billions USS) 32.1 87.2 175.5 198.1 Gross domestic investment/GOP 23.7 26.2 30.1 31.5 Openness of economy Exports of goods and non-factor services/GDP 23.2 22.6 25.8 25.5 Gross domestic savings/GDP 25.9 29.1 31.5 31.8 Gross national savings,GDP . 24.2 27.6 28.2 Current account balance/GDP -3.5 -2.1 -1.9 -3 4 Saymngs Ivestment Interest payments/GDP 1.0 2.3 2.5 2.7 Total debt/GDP 35.8 42.1 55.3 53.6 Total debt servicelexports 15.1 28.8 31.5 31.0 Present value of debt/GDP . . 51.3 Indebtedness Present value of debtlexports . .. 181.8 1975-84 1985-95 1994 1996a1 1996-04 - Indonesia (average annual growth) - Lower-middle-income group GDP 7.2 7 1 7,5 8.1 8.0 GNP per capita 45 5.5 5.4 6.4 6.2 Exports of goods and nfs -0.6 7.8 7.7 7.2 11.1 STRUCTURE of the ECONOMY 1975 1955 1994 1995e1 (% of GDP) 2rowth rates of output and investment (%) Agriculture 30.2 23.2 17.4 17.2 Industry 33.5 35,9 40.7 41.5 1s Manufactunng 9.8 16.0 23.5 24.3 10 Services 36.3 40.9 41.9 41.3 5 0 Private consumption 65.1 59.1 60.2 59.8 83 90 9i 32 33 59 5 General govemment consumption 9.0 11.8 8.2 82 G --GDP Imports of goods and non-factor services 21 0 19.8 23.8 24.8 - GDI -GDP 1975-84 198595 1994 1995 el (average annual growth) Growth rates of exports and imports (%) Agriculture 4.3 3 4 0.5 4.0 Industry 7.1 94 11.2 10.3 25 Manufactunng 14.4 10.9 12.5 11.1 2s Services 9.5 8 1 7.1 74 : 5 Private consumption 9.1 65 7.7 9.9 0 General government consumption 11.4 4.8 2.3 34 8 90 91 92 93 94 5 Gross domestic investment 14.5 9.6 12.2 12.5 Imports of goods and non-factor services 9.9 7.6 12.7 15.3 -Exports -imports Gross national product 67 8.0 7.3 8.1 Note: 1995 data are preliminary estimates. - The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing. the diamond will be incomplete. Schedule E Page 2 of 2 PRICES and GOVERNMENT FINANCE 1975 1985 1994 1995el Inflaion (%) Domestic prices (% change) 15 - Consumer pnces 191 44 9.6 90 0 Implicit GDP deflator 11.5 4.3 6.0 60 5 Government finance 90 91 92 93 94 95 (% of GDP) -GDPdef -CPI Current revenue 19.2 15.9 15.5 Current budget balance 6.0 6.6 6.0 Overall surplus/deficit . -3.2 0.3 0.8 TRADE (miions US$) 1975 1985 1994 1995 l Export and Import levels (mill. USS) Total exports (fob) 18.823 42,050 46,019 Fuel 12.804 10.344 9,749 5000 Rubber 714 1.316 1,554 40000 Manufactures 2.287 20.272 23,636 30,000 Total imports (cif) 14,056 37,736 44477 20.000 Food 812 782 942 l1 Fuel and energy 2.870 3.988 3.845 0o ooo Capital goods 5,394 15.062 18.135 09 90 91 92 93 94 95 Export price index (1987=100) 120 135 140 Exports a Imports Import price index (1987=100) 85 89 90 Terms of trade (1987=100) . 141 153 155 BALANCE of PAYMENTS 1975 1985 1994 1995el (rllions US$) Exports of goods and non-factor services 6,981 19.371 46,899 51,644 Current account balance to GOP ratio (%) Imports of goods and non-factor services 6,775 17,840 43.392 51,052 0 Resource balance 206 1,531 3,507 592 99 90 91 92 93 94. 91 Net factor income -1,342 -3,542 -6.994 -7,535 Nat current transfers 0 88 0 0 - Current account balance, before official transfers -1,135 -1.923 -3,488 -6,943 -3 - Financing items (net) 284 962 2,233 10.059 Changes in net reserves(+-increase) 851 961 -1,255 3.116 Memo: Reserves including gold (mill. US$) 592 5,794 12.290 13,869 Conversion rate (AocaVUSS) 415.0 1,110.6 2,160.8 2,248.6 EXTERNAL DEBT and RESOURCE FLOWS 1975 1985 1993 1994 (milhons US$) Total debt outstanding and disbursed 11,507 36,709 89,477 96.500 Composition of total debt. 1994 (mill. US$) IBRD 57 3,590 11,283 12.008 IDA 318 844 796 776 A Total debt service 1,060 5,824 14.267 14,792 17109 12008 8 IBRD 2 384 1,620 2,156 IDA 2 12 24 26 D 6362 Composition of net resource flows Official grants 69 136 219 218 Official creditors 515 1.003 2.339 1.467 Private creditors 1.749 154 -3,365 1.627 Foreign direct investment 476 310 2,004 2.109 Portfolio equity 0 0 1,836 3.672 F World Bank program 29656 30589 Commitments 311 1.068 924 1.538 Disbursements 164 777 1,195 1.184 Principal repayments 0 133 782 1,259 A - lBRD E - 8ilaterl Net flows 164 644 413 -76 B-IDA 0 - Othermuslateral F - Private Interest payments 3 262 861 922 C - IMF G - Shorl-term Net transfers 160 382 -448 -998 intemational Economics Department Note: 1. Government finance and trade fiscal year (April to March). 2. New National Accounta Series has been used 3. el indicates estimates for 1995 MAP SECTION  IBRD 26570 -,tHAILAND Bondo Aceh C,scc PHILIPPINES INDONESIA 13 BRUNEl- > 1 -on M I PROVINCE HEADQUARTERS MALAYSIAc NATIONAL CAPITAL 12. PROVINCE BOUNDARIES S ··- INTERNATIONAL BOUNDARIES 12 MALAYSIA N 15 SIN G A P ORE""T T . U AGT B-t ... k 4 . K A L I AN T A- - Pcld9ng 11.. 00 25Ueayopor 12 D. k-y J aemao U L A W E S Ceafe 5 JAWA TIMUR y 1KnaiA 7 BENGKUL 6 2( s. 8 SUMATERA SELATAN Bondor ¯ -. 1 0 JAMBI UBng.d-ggod iI SUMATERABARAT _{- 12 SUMATERA UTARA c 13 D.I. ACEH AAT 14 KAUMANTAN BARAT Fegor Bondz 1 KAUMANTAN TENGAH cZ 2 -neo Fbr 16 KAUIMANTAN SELATAN J A 17 KALIMANTAN TIMUR -3A r'¯- 18 SULAWESI TENGAH 5 Ao 1 9 SU LAWE55 LITAA oykrP~, 5c 20 SULAWESI SELATAN 2 21 SULAWESI TENGGARA Th. b-ed--., -oi-,. Oji j~' e 2 BAL, d--no - -nd D y3o 23 NUSA TENGGARA BARAT oth., nformnohown 23 24 TIMOR 24 NUSA TENGGARA TIMUR tm nm do n SUM Kupong 25 MALUKU Th= d Bnk Group. AN 26 ,RJAN JAYA rneno he g Timr Sea 27 TIMORTIMUR or on*do,.,ASTRAIA 7 b o u n d o e . ... . E-E.- DECEMBER 1994   · ; 」」 치‘ ￡［ & 얇％ r．「〔 .. 』 r, 헌 ；닙『〔」 : D ’」 r: JI D ㅜ v .. ‘」 驢 날믓ㅋ