World Bank Document · ... Rehabilitation and uprating of ten turbo generator units and their associated gates, structural repairs to the power house, dam and dam gates at the Owen

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 15194

PROJECT COMPLETION REPORT

UGANDA

SECOND POWER PROJECT(CREDIT 1560-UG)

DECEMBER 26, 1995

Energy and Infrastructure Operations DivisionEastern Africa DepartmentAfrica Regional Office

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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Currency Equivalents

Currency Unit = Ugandan Shilling (USh)

US$ to UShAppraisal year (1984): 5.2Actual (yearly average)1985 6.71986 14.01987 42.81988 106.11989 223.11990 428.91991 734.01992 1,133.81993 1,195.0

Currency Unit = SDRUSh to SDR (end of year)1985 15.41987 85.11989 486.21991 1,308.81993 1,552.3

USS to SDR (yearly average)1985 1.09841987 1.29311989 1.28181991 1.36821993 1.3963

Abbreviations

AfJDB African Development BankCDC Commonwealth Development CorporationCIDA Canadian International Develop ment AgencyESMAP Joint UNDP/World Bank Energy Sector Management Assistance ProgramGSMD Geological Survey and Mines Department, Ministry of Lands, Mineral and Water ResourcesGWh Giga Watt hour (million kWh)IBRD International Bank for Reconstruction and DevelopmentICB International Competitive BiddingIDA International Development AssociationIRR Internal Rate of ReturnJICA Japanese International Cooperation AgencykW Kilo WattkWh Kilo Watt hourLRMC Long Run Marginal CostMPPT Ministry of Power, Posts and TelecommunicationsMNR Ministry of Natural ResourcesMW Mega Watt (thousand kW)NDF Nordic Development FundNORAD Norwegian Agency for Development CooperationODA Overseas Development Administration (UK)PCR Project Completion ReportPLC Power Line CarrierSCADA System Control and Data AcquisitionSDR Special Drawing RightsUEB Uganda Electricity Board

Fiscal Year

January 1- December 31

FOR OFFICIAL USE ONLYTHE WORLD BANK

Washington, D.C. 20433U.S.A.

Office of Director-GeneralOperations Evaluation

December 26, 1995

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on UgandaSecond Power Project (Credit 1560-UG)

Attached is the Project Completion Report (PCR) on the UJganda: Second Power project (Credit1560-UG, approved in FY85), prepared by the Africa Regional Office. The Borrower provided Part 11.Comments by the co-financiers were considered in the PCR.

The project's main objective was to assist Uganda's economic recovery initiated in the early 1980sby improving electricity supply from the Uganda Electricity Board (UEB). Sector objectives were torehabilitate UEB's power system and strengthen its operational capability and the government's energyplanning capacity.

The project rehabilitated part of the Owen Falls hydroelectric plant and refurbished thetransmission and distribution network. In Kampala, the rehabilitation works went beyond the originalproject design. It also helped the Energy Department plan for a forest plantation inventory (later done bythe Ministry of Agriculture) and conduct a household energy survey. Studies on tariffs, billing, generationand distribution planning were carried out and part of their recommendationis implemented. UEB wasreorganized, its staff trained, and tariffs increased. But poor collection of bills, overstaffing and lowproductivity still mar its performance.

The project cost is estimated at US$I 13.4 million, including rehabilitation works to be completedby 1997 with financing from the Overseas Development Administration. IDA financed US$40.2 millionand succeeded in mobilizing US$68.3 million from four co-financiers and suppliers credits.

IDA's performance was satisfactory: frequent supervision missions, acceptance ofjustified clhaigesto project scope, and reallocation of credit funds helped project execution. Borrower's perfornance wasmarginally satisfactory, best towards the end of the project, when UEB implemented most of the physicalcomponents-not as good all along in the areas of power sales and financial management.

The project outcome is rated as satisfactory mainly because of its physical achievements. Itssustainability is rated as likely because UEB already initiated measures to commercialize its operationsunder the IDA Third Power project. Its institutional development is rated as moderate.

The PCR presents a satisfactory account of project implementation and results.

No audit is planned.

Attachment

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contentsmay not otherwise be disclosed without World Bank authorization.

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FOR OFFICIAL USE ONLY

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Contents

Preface.3Evaluation Summary.5

PART 1: PROJECT EVALUATION FROM THE BANK'S PERSPECTIVE.9

Project Background.9Project Design and Implementation.11Project Objectives and Description.13Project Implementation.15Disbursements.19Procurement.21Project Results.23Project Sustainability.27Bank and Borrower Performance.29Project Relationship.31Project Reporting.33Lessons Learned.35

PART II: PROJECT EVALUATION FROM TIlE BORROWER'S PERSPECTIVE.39

Annex 1: Other UEB contracts Under Second Power Project.49Annex 2: Uganda Electricity Board Units Generated.51Annex 3 Project Cost at Completion as of 30 June 1994.53

PART III: STATISTICAL AND OTHER PROJECT INFORMATION.59

Table 1: Related Bank Group Loans and Credits..61Table 2: Project Timetable..62Table 3: Credit Disbursements..63Table 4: Project Implementation..64

4.1 Contract Completion Dates.644.2 Studies.654.3 Comparison of UEB's Selected Indicators.66

Table 5: Project Costs and Financing..675.1 Project Costs: Comparison of SAR Estimates and Actual Costs.675.2 Project Financing.675.3 IDA Disbursements.68

Table 6: Economic Impact..69Table 7: Status of Compliance with Major Covenants..70Table 8: Use of Bank Resources.72

8.1 Bank Resources: Staff Inputs.728.2 Bank Resources: Missions.73

Table 9: UEB's Balance Sheet..75Table 10: UEB's Income Statement..76Table 11: UEB's Funds Flow Statements..77

document has a restricted distribution and may be used by recipients only in the performance of theirI official duties. Its contents may not otherwise be disclosed wiihout World Bank authorization. I

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Preface

This is the Project Completion Report for the Second Power Project in Uganda, forwhich Credit No. 1560-UG in the amount of SDR 29.5 million (US$ 40.2 million equivalent)was approved on March 19, 1985 and made effective on June 26, 1986.

The Credit was closed on December 31, 1993, compared with the original closing date ofJune 30, 1990. The Credit was fully disbursed and the last disbursement took place on April 20,1994.Co-financing for the project was provided in the form of a CDC loan to UEB of Pound Sterling9.6 million, and an ODA grant of Pound Sterling 9.34 million. ODA later increased the grant toabout Pound Sterling 30 million to cover additional rehabilitation costs at the Owen Fallshydropower station.

Parts I and III of the PCR were prepared by the Energy and Infrastructure OperationsDivision of the Eastern Africa Department. Part II was prepared by the Borrower (the UgandaElectricity Board and the Ministry of Natural Resources).

Preparation of the PCR was begun during the Bank's final supervision/completionmission on June 21-28, 1994. It is based, inter alia, on the Staff Appraisal Report, theDevelopment Credit and Project Agreements, supervision reports, correspondence between theBank and the Borrower, and internal Bank memoranda. The Borrower submitted its first draft ofPart II in June, 1994, and the final report in November 1994. Parts I and III were sent to theBorrower and the cofinanciers for comments on March 2, 1995. Comments were received fromthe Borrower on March 21,1995, and from ODA on Mach 16, 1995. CDC communicated itsresponse on March 17, 1995.

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Evaluation Summary

Introduction

The Second Power Project was the Bank's first operation in Uganda's energy sector inmore than twenty years. The operation was preceded by an energy sector review carried out bythe Joint UNDP/World Bank Energy Sector Management Assistance Programme (ESMAP). Itprovided much of the underpinnings for the project, while detailed project design was based onan engineering study by independent consultants. At the time of appraisal, the political situationin Uganda was unstable, and power sector facilities were in a very poor condition owing toneglected maintenance during the preceding years of unrest. The Second Power Project wasdesigned to support the Government's recovery program, which had as its basic objective therehabilitation of the productive sectors and the improvement of existing productive capacities.

Project Objectives and Description

The primary objective of the project was to prevent the development of a bottleneck inpower supplies that would hinder economic recovery in the medium term, through the upgradeand rehabilitation of existing generation, transmission and distribution facilities. The projectalso aimed at strengthening UEB's operational capability, and the energy sector planningcapability of the ministry in charge of energy (currently the Ministry of Natural Resources).The project included the following three main components:

Part A: Rehabilitation and uprating of ten turbo generator units and their associated gates,structural repairs to the power house, dam and dam gates at the Owen Falls hydro powerstation;

Part B: Transmission and distribution rehabilitation, provision of ancillary items and studies; and

Part C: Technical assistance to the Ministry's Energy Department

Project objectives were ambitious and addressed the priority needs of the energy sector.However, as a result of the escalation of project costs and new requirements in the transmissionand distribution networks in and around Uganda's capital city, Kampala, the scope of Part B waslater modified to focus on the rehabilitation of the Kampala networks.

Implementation Experience

Implementation. Project implementation was at first very slow, but improved towardsthe end of the project. It took eight and a half years from Credit signing to Credit closurecompared to the SAR estimate of five years. The major delays were a result of the followingthree factors: First, the continued unstable security situation at the outset of the project focusedthe attention of the implementation agencies more on ensuring the day-to-day operation of thepower system than on project implementation. Second, the need to modify the scope of Part B asa result of underestimation of the extent of the rehabilitation works, cost-overruns and thedelayed project start-up. Third, the need to re-arrange the rehabilitation plan for the turbogenerators at the Owen Falls hydroplant and more work than originally envisaged. Thegenerators are expected to be fully rehabilitated and uprated in 1997, seven years behind

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schedule. Implementation of the transmission and distribution components improved with thegradual improvement in the security situation, and with the implementing agencies' increasingfamiliarity with the Bank's procedures, in particular, international competitive bidding (ICB).The training provided helped implementation as well.

Project Cost. As of end-1994, total project cost was about US$113 million, comparedto the SAR estimate of US$73.4 million. The actual costs of both the rehabilitation of the OwnFalls generators, and the transmission and distribution networks significantly exceeded the SARestimates, largely due to the underestimation of the scope of the rehabilitation, the unforeseenrequirements of the Kampala system, and delay in implementation.

Bank and Borrower Performance. The Bank's performance was generally satisfactory.The Bank's 17 supervision missions had a substantial impact on improving projectimplementation. At the preparatory stage, the Bank should have paid more attention to projectcosts and scope to avoid cost over-runs and delays. With regard to the financial management ofUEB, the Bank should have been more decisive in enforcing compliance with the financialcovenants, especially the covenant requiring UEB to maintain the agreed relationship betweenaccounts receivable and its annual operating revenues. The borrower's performance inimplementing the physical components of the project improved over time, but its commitment toimproving UEB's commercial and financial management was weak. The borrower did notcomply with the rate of return covenant nor the accounts receivable covenant.

Results and Sustainability

Since the project has not been completed, its results cannot be fully assessed at this time.However, based on the results so far, the project achieved its primary objective to prevent thedevelopment of a bottleneck in power supplies, but was not successful in improving the financialmanagement of UEB. The Internal Economic Rate of Return of UEB's investment program wasre-estimated at about 14 percent. This is a reduction compared to the SAR estimates of between16.7 and 21.6 percent, but is acceptable and justifies the investments made. The IRR should bere-calculated when final data on costs and benefits are available in 1997. The sustainability ofthe project depends on UEB's ability to improve its financial management and operationalefficiency, without which it will not be able to cover the cost of adequate operation andmaintenance of the facilities. To this end, measures have been initiated under the ongoing ThirdPower project.

Structural Repairs to the Owen Falls Power House and Dam. The Project achievedits objective to repair structural damages in the power house and dam, and to re-waterproof theroof of the power house.

Rehabilitation and Upgrading of Owen Falls Generators. By the end of 1993, thecapacity at Owen Falls had been re-instated and the installed capacity of the plant had beenincreased from 150 MW in 1988, to 168 MW in 1993, mainly by rewinding the alternators of thegenerators using modern insulating materials. It is estimated that the rehabilitation andupgrading of the remaining units will be completed in 1997, by which time the total installedcapacity will have been increased to 180 MW.

Distribution and Transmission Rehabilitation. The project achieved its objective torehabilitate priority transmission and distribution systems albeit behind schedule. The increased

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and improved transmission and distribution capacity has made it possible for UEB to connectnew customers to the system and meet the growing demand for electricity by the economy.

Studies. Many of the recommendations of the studies carried out under the project wereimplemented, for instance, electricity tariffs were increased in line with the recommendations ofthe tariff study. Much of the underpinning for the ongoing Third Power Project results from thestudies under the Project. On the other hand, the Billing and Revenue Collection Study did littleto improve UEB's collection performance, largely because more emphasis was placed on theinstallation of a new computer system than on ensuring that appropriate measures to improvecustomer management were in place.

Technical Assistance to the Ministry of Natural Resources. The project contributedto the establishment of the Energy Department which has come to play a more prominent role inUganda's energy scene, especially through its household and renewable energy projects.

Financial and Operational. The project did not achieve its objective to improve UEB'sfinancial performance and operational efficiency. Despite several tariff increases, UEBcontinues to face severe financial difficulties. The main reason is UEB's poor collectionperformance. The number of staff employed by UEB doubled during project implementationand staff productivity, measured as the number of connections per staff employed, remainedsignificantly below the SAR targets. Under the ongoing Third Power Project, UEB has agreed toimplement a number of measures to address the above problems. For instance, the emergencyaction plan to improve billing and collection procedures includes managerial and organizationalchanges, and the investigation of options for improving customer management through possibleprivatization of the billing and collection function.

Key Lessons Learned

(1) Project implementation could have been expedited had project scope and cost estimatesbeen prepared more accurately. However, given that the project was the first Bankoperation in Uganda's energy sector in more than 20 years and that the country hadhardly recovered from an emergency situation, the task of obtaining fully accurate datawas difficult;

(2) The Bank's flexibility in modifying the project scope based on new information ofinvestment priorities and costs was important for achieving project objectives;

(3) In spite of the constrained economic and security situation and the fact that UEB had notundertaken major construction in several years prior to project appraisal, itsimplementation capacity was judged to be strong enough to undertake the project in arelatively tight timetable. In retrospect it is evident that the project timetable,particularly with regard to start-up was too optimistic. Specifically, slow award ofcontracts led to delays;

(4) The Bank should have been more decisive in enforcing compliance with the financialCredit agreements, especially the covenant requiring UEB to maintain an agreedrelationship between accounts receivable and its annual operating revenues; and

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(5) The project has shown that measures to improve institutional and financial performancehave to be initiated up-front and be more comprehensive than those included in theproject. The project should have addressed weaknesses in power sector managementincluding the lack of autonomy and commercial orientation of UEB's operations. Theseissues are now being ddressed under the ongoing Third Power Project, including thepossible privatization of the billing and collection function.

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Part I: Project Evaluation from the Bank's Perspective

P21.=2crFC DF\1rrY

Name: Second Power Project

Credit Nuiber: 1560 - UG

RVP Unit: Africa Region

Country: Uganda

cector: Infrastructure

Sub - Sector: Power

1. Project Background

1.1 In 1981 the Government of Uganda made a dramatic break with the past and, with thesupport from the IMF, the Bank, and other donors, introduced a series of financial and otherpolicy reforms. As a result, economic performance improved despite the negative impact ofinternal security problems and adverse world economic conditions. The Government's recoveryprogram had as its basic objective the rehabilitation of the productive sectors and theimprovement of existing productive capacities. The Second Power Project was designed tosupport this program.

1.2 At project appraisal Uganda's power system was in a very poor condition as a result ofthe prevailing civil unrest in the country. Four out of the ten 15 MW generating units(commissioned between 1954 and 1968) at Uganda's main power generating plant, the OwenFalls hydro station, were out of service, there were cracks in the power house, and the 20 to 30years old transmission and distribution systems needed rehabilitation and reinforcement. Indeed,the need for spares, vehicles, and communication equipment was so acute that financing forthese;.items was provided under the Second Reconstruction Credit (Cr. 1252-UG) as apreparatory measure.

1.3 Years of political insecurity and wars had taken a heavy toll on the Government ownedUganda Electricity Board (UEB), which is responsible for all power generation and distributionin Uganda. Yet, at appraisal, UEB was assessed to be more efficient than most other Ugandanparastatals. The emergency situation that had prevailed in Uganda over the 10 to 15 years priorto appraisal, had constrained UEB to concentrate only on keeping the system operating. TheSAR noted that planning and keeping abreast of development and new technologies had beenneglected. The electricity supply system had continued to be operated at a technology level thatwas 20-30 years old. UEB had difficulty in providing sufficient funds to meet the costs ofimported spares and materials for routine maintenance and had been unable to generate anysignificant contribution toward capital development. The SAR also noted that UEB hadexperienced considerable difficulties in customer billing and account collection due to securityproblems, lack of transport and periodic computer failure. Other reasons quoted comprisedinefficiencies of the Uganda postal system, and the non-payment of Government agencies.

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2. Project Design and Organization

2.1 The project was prepared by the Uganda Electricity Board (UEB) and the Ministry ofPower Posts and Telecommunications (MPPT) with the assistance of international consultants,IDA and ODA. It was designed to support the Government of Uganda's rehabilitation strategy.The ESMAP energy sector review, carried out in 1982, concluded that the rehabilitation of theexisting generating, transmission and distribution facilities was a top priority for thedevelopment of Uganda's power sub-sector.' This study provided much of the underpinning forthe project, while detailed design was based on the ODA-financed feasibility and engineeringstudy by international consultants.2

2.2 The project also included several components to address UEB's financial andinstitutional problems. A new computer would make billings more timely and accurate, theadditional transport would improve the effectiveness of the meter reading, bill delivery andcollection efforts, and availability of connection materials would improve UEB's responsivenessto customer demand and decrease illegal connections. To address UEB's organizational andtraining needs, the project included studies of the organizational, manpower, and trainingrequirements.

2.3 The ESMAP study recommended that an inventory of wood sources and a study onwood consumption be carried out. Both activities were included in the Project. The identifiedenergy conservation options were not picked up by the Project, as further ESMAP work in thisarea was planned. Another ESMAP study entitled: "Institutional Strengthening in the EnergySector" was the basis for the TA to strengthen the Energy Department of the MPPT, whichduring project implementation was reorganized and energy matters were brought under theMinistry of Natural Resources (MNR).

2.4 It was realized at the early implementation stage that project costs were underestimated,and that inadequate provision had been made for the rehabilitation of the Kampala network. Theproject scope was therefore modified to effectively address the requirements of Uganda's powersystem, for instance some contracts were let on a full turn-key basis.

1. 'Uganda - Issues and Options in the Energy Sector", Report No. 4453-UG, July 1983

2. "Rehabilitation and Uprating of the Uganda Electricity System", June 1984.

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3. Project Objectives and Description

3.1 Objectives: The primary objective of the project was to prevent the development of abottleneck in power supplies that would hinder economic recovery in the mnedium term, throughthe upgrade and rehabilitation of existing generation, transmission and distribution facilities. Inaddition, the project aimed at strengthening UEB's operational capability, and the energy sectorplanning capability of the ministry in charge of energy, currently the Ministry of NaturalResources.

3.2 The objectives of the project were ambitious, and were in line with the country's priorityneeds in the energy sector. Given the demanding economic conditions and continued civil strife,the implementation of the project stretched the capabilities of the implementing agencies to theirlimits.

Description: The project included the following components:

Part A: Rehabilitation and uprating of ten turbo generator units, structural repairs to thepower house and dam at the Owen Falls hydro power station:

1. Rehabilitation and uprating of ten turbo generator units;2. Civil works for structural repairs to the Owen Falls dam and power house;3. Rehabilitation and replacement of electrical and mechanical equipment such as

main cables, switchgear, control equipment, auxiliaries, intake and draft tubeequipment, and service gates; and

4. Workshop refurbishment and provision of tools and equipment for maintenance.

Part B: Rehabilitation of transmission and distribution networks and provision ofancillary items and studies:

1. Substation equipment - provision of transmission transformers of 132 kV and 33kV and control and switch gear equipment;

2. Transmission and distribution lines - supply conductors, hardware, wood poles,transmission towers, distribution transformers, underground line material andconsumer connecting material;

3. (a) Kampala-Owen Falls line: uprating of the existing 66 kV transmission line to132 kV (Transferred to Power III);

3. (b) Kampala-Nkenda and Tororo-Lira lines - strengthening of the existing 132 kVlines (Dropped due to funds limitation);

4. Communication and control - provision of new power line carrier and systemcontrol and data acquisition facility (SCADA), telephone and radio equipment(dropped due to funds limitation but funds were provided later by bilateralagencies);

5. Vehicles and tools - provision of about 30 new vehicles, forklifts, cranes and thesupply of tools and workshop equipment for UEB transmission and distributioncrew members and to the existing electrical, mechanical, communication,metering and protection workshops in Kampala;

6. Supply of billing computer to UEB;

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7. Reconstruction of the Jinja training school, provision of education equipment,and the reconstruction of hostel facilities (hostel facilities' reconstruction wasdropped);

8. Reconstruction of district offices at Mbarara and Masaka, civil works repair foroperational and residential buildings (dropped, but later undertaken by UEBusing its own funds);

9. Provision of engineering services and consulting services including supervisionof construction; and

10. Provision of the following studies:l(i) Prioritization study (added)(ii) Tariff study(iii) Billing and collection study(iv) Accounting study (added)(v) Rehabilitation of the Kampala network (added)(vi) Feasibility study to supply electrical power to Western Uganda (added)(vii) Feasibility study of an extension to the Owen Falls hydroelectric station(viii) SCADA study (added)

Part C: Technical assistance to the Ministry's Energy Department

1. Provision of TA for the operation of the Energy Department2. Provision of TA for carrying out:

(i) a forest and plantation inventory (implemented by the Ministry ofAgriculture and Forestry under another project);

(ii) national fuelwood marketing survey; and(iii) household energy survey in the major towns of Uganda.

3. Additional studies were financed by ODA, AfDB, CIDA, and by the Second Technical Assistance Credit, Cr. 1434-UG. Cr1434-UG: An Assessment of management, organization, manpower and training requirements of UEB, and a selective staffdevelopment study and training manual. ODA: A Study to Review Stores and Workshop Facilities and Procedures. AfDB: aDistribution System Rehabilitation and Loss Reduction Study, and a National Electrification Planning Study. CIDA: A study toinvestigate the feasibility of developing hydroelectric capacity at the Bujagali site.

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4. Project Implementation

4.1 Overview. It took eight and a half years from Credit signing to Credit closure,compared to the SAR estimate of five years. Nevertheless, the project was not completed at theCredit closing date. The IDA/CDC-financed components were completed by mid-1994, whilethe ODA financed rehabilitation of the turbo generators at the Owen Falls hydro plant areexpected to be completed only in 1997. The Credit became effective on June 26, 1986, thirteenmonths after credit signing. The main reasons holding up effectiveness were the long time ittook to obtain the legal opinion on the IDA lending documents from the Uganda AttorneyGeneral, and the cross effectiveness of the CDC loan. Because of the continued politicalinstability in Uganda after Credit signing, project start-up was postponed further. UEB's mainconcern at that time was to keep the system in operation, and consequently projectimplementation was given lower priority. The slow contracting of the supervising consultantsfor both the Owen Falls rehabilitation and for the transmission and distribution rehabilitationcomponents also delayed implementation. Additionally, the discovery that the project wasunder-funded and that the original scope no longer effectively addressed the priority needs of thesystem contributed to increasing implementation time as new studies had to be undertaken andsome tendering repeated. Slow payments of contractors, which was primarily caused by the longissuance time of letters of credit by Bank of Uganda, also frustrated project implementation.This situation improved when the special account was transferred from Bank of Uganda to alocal commercial bank. The appointment of a new General Manager and Board of Directors forUEB in mid-1987 proved to be a turning point in strengthening project implementation.Moreover, the improved security situation and the implementing agencies' increased familiaritywith the Bank's procedures, including ICB, contributed to a qualitative change in theimplementation of the physical components of the project

4.2 Structural Repairs to the Owen Falls Power House and Dam. The IDA Credit andthe CDC loan financed repairs to the power house and the dam. These works included theinsertion of 85 massive steel-wire anchors through the structure of the 30 year-old power stationstructure into the bed-rock beneath, to prevent further cracking of the foundations4. This workwas completed in mid- 1990. The re-waterproofing of the power house's roof was completed in1988. The Credit also financed repairs to the dam and dam gates. Further work to investigatethe need for dam strengthening is currently underway under the Third Power project.

4.3 Rehabilitation and uTpgrading of the Owen Falls Generators. Thc implementation ofthis component, which was fully financed by ODA, was significantly delayed. The last generatoris expected to be rehabilitated and uprated by early 1997. The delay was caused partly by thefact that the rehabilitation requirements varied from one generator to another and it wasapparently not possible to define them until the generators were opened up, and partly becauseUEB requested that the generators be dismantled and rehabilitated in series instead of under aprogram of overlapping outages as originally planned. UEB requested this re-arrangementbecause it was concerned that it would not be able to meet the demand for electricity with severalunits out of commission simultaneously. Coupled with the need for more work than originallyenvisaged, the new rehabilitation program significantly extended the rehabilitation time andincreased project costs. As of end-]994, when the rehabilitation of the eighth unit (of 10) was

4. The SAR discussed several causes for the cracking of the foundations ana concluded that regardless of the cause, the onlyremedial action that will prevent further deterioration was Ihe installatior, of the anchors.

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on-going, the costs had already exceeded US$28 million compared to the SAR estimate tocompletion of US$9.8 million.

4.4 Transmission and Distribution Rehabilitation. Under this component, IDA and CDCfinanced more than 20 supply and turn-key contracts for substations, transformers, overhead lineequipment, vehicles, poles, office equipment, hard and software for UEB's billing system, etc.An intemational consulting firm assisted UEB's project coordinator in bid preparation andevaluation, procurement and in the supervision of contractors. This component was originallyintended to rehabilitate the major transmission and distribution systems country wide. When theproject implementation finally started, more than two years behind schedule, it was realized thatthe scope of the rehabilitation works was under-estimated partly because of the delay which hadled to additional deterioration, and partly because of the need to strengthen implementation byletting major contracts on a turn-key basis instead of a supply basis as intended at appraisal. Theproject also was under-funded and UEB was not able to provide the agreed contribution toproject financing. In addition, the rapid load growth in the Kampala area had put its distributionsystem under pressure with frequent interruptions as a result. Consequently, the Bank agreed totwo additional studies: the first study was to examine the rehabilitation needs of the Kampalasystem, and the second study was to prioritize between the several rehabilitation needs in thecountry wide system. Based on the recommendations of these studies, the project scope wasmodified to focus on the rehabilitation and upgrading of the networks in the Kampala area. Dueto the 'iigher cost of the project, four originally planned components could not be funded fromthe Credit as planned: (i) communication and control - provision of new power line carrier andSCADA, telephone and radio equipment; (ii) reconstruction of district offices at Mbarara andMasaka, civil works repair for operational and residential buildings; (iii) Kampala-Owen Fallsline: uprating of the existing 66 kV transmission line to 132 kV; and (iv) Kampala-Nkenda andTororo-Lira transmission lines - strengthening of the existing 132 kV lines. Of these (i) was laterfinanced by NDF and NORAD, (ii) was undertaken by UEB by its own funds, and (iii) is beingcarried out under the ongoing Third Power Project.

4.5 The supply and installation contracts under this project component were substantiallycompleted by mid-1994, compared to the SAR target year of 1987. At UEB's request, parts ofthe transmission and distribution rehabilitation works were carried out by UEB staff using thematerials procured under the Credit. This contributed to improving UEB staff skills intransmission and distribution system rehabilitation.

4.6 Studies. A total of 8 studies were carried out by international consultants. The initiationof the studies was slow, due to, at least partly, the limited staff resources at both UEB and theMNR at the initial stages of project implementation. The studies were completed by 1991 asopposed to the SAR target year of 1988. Some of the studies were deferred at IDA's request.The Accounting Study was added to the project scope at UEB's request as a response to IDA'srepeated remainders that UEB was not complying with the financial covenants of the project.

4.7 Technical Assistance to the Ministry of Natural Resources. The Credit financed apetroleum adviser, a senior energy adviser, and a biogas expert, a Household Energy PlanningProgram, training, vehicles and office equipment. Continued financing for the services of thesenior energy adviser and the biogas expert is currently provided under the Third Power Project.The planned Forest and Plantation Inventory was not carried out because it was moreappropriately carried out by the Ministry of Agriculture and Forestry and for which financingfrom other sources was obtained. The Fuelwood Marketing Survey and the Urban Household

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Energy Survey were combined into the Household Energy Planning Program. It was completedin 1990, and recommended a US$6.5 million investment program mainly aimed at improving theefficiency of charcoal production and use. Although this study was comprehensive, neither theBank nor the Government considered its recommendations adequately justified, and it thus failedto provide the basis for a household energy strategy as envisioned. In 1992, the Ministry agreedto re-allocate about US$2 million to UEB to finance the repair of damages caused by fire atOwen Falls.

4.8 Project Cost. The estimated cost of the project at the time of appraisal was aboutUS$73.4 million. Actual project cost was about US$113 million in December 1994, as shown inTable 5.1 in Part III. The costs of both the rehabilitation of the Owen Falls and the transmissionand distribution systems were substantially higher than estimated in the SAR as a result ofimplementation delays and also because the scope of the rehabilitation was under estimated.Final cost data will be available when the Owen Falls rehabilitation has been completed in early1997.

4.9 Project Risks. The major risk considered during appraisal was the ability of theGovernment of Uganda to maintain public security and secure working conditions for projectimplementation and subsequent maintenance. It was especially expected that the rehabilitationwork on the transmission and distribution systems could be delayed because of security reasons,but the Owen Falls site would not be affected. In retrospect, it can be noted that at least threeadditional risk factors should have been identified and addressed in a greater detail: the weakinitial implementation capacity of UEB and MPPT; the weak financial management of UEBgiven that the appraisal team were unable to obtain up-to date financial data, and that UEB'sfinancial position was judged to be weak; and technical risks in regard to the rehabilitationworks.

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5. Disbursements

5.1 A total of US$40.2 million (SDR 29.5 million) was disbursed. The Credit was fullydisbursed, but the disbursements were much slower than expected in the SAR mainly because ofthe delayed start-up of the project. Disbursements were completed over a period of seven and ahalf years compared to the appraisal estimate of five years. Because of the appreciation of theexchange rate for the SDR, the disbursed amount was higher than the SAR estimate of US$28.8million. At appraisal the disbursements were scheduled at a quicker rate than the standardprofile for power projects in the Eastern Africa Region because the project did not include theconstruction of new facilities. In hindsight, this assessment was too optimistic.

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6. Procurement

6.1 Schedule I of the Project Agreement (PA) stipulated that goods and works shall beprocured under contracts awarded in accordance with the "Guidelines for Procurement underIBRD Loans and IDA Credits " published by the Bank in August 1984, except for civil works forthe Training Center and for the reconstruction of local offices at Mbarara and Masaka whichcould be procured through local competitive bidding. Minor civil works on transmissioninstallation could be carried out by UEB staff. The PA further stated that consultants shall beselected based on the Bank's guidelines for the use of consultants, published in August 1981.The Bank agreed that UEB procure some urgently needed materials for the Owen Falls and thetransmission and distribution systems through international shopping. CDC followed the Bank'sprocurement guidelines, whereas ODA applied its own rules.

6.2 Progress on procurement was reported to have been good during the final project years.At the outset, the borrower and the implementing agencies were unfamiliar with ICB leading todelayed procurement decisions.

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7. Project Results

7.1 Even though the project is not fully completed, project results so far show that theproject contributed substantially to improving the quantity and quality of electricity supply andin improving UEB's technical capabilities. The project was less successful in improving UEB'sfinancial management and operational efficiency and in improving the energy planningcapabilities of the Energy Department. The project was successful in establishing the basis for arational electricity pricing policy.

7.2 Structural Repairs to the Owe Falls Power House and Dam. The project achieved itsobjective to repair structural damages in the power house, dam and dam gates, and to re-waterproof the roof of the power house. These works helped to preserve UEB's key generationasset.

7.3 Rehabilitation and Upgrading of Owen Falls Generators. At the time of thepreparation of the PCR, this project component had achieved about 70 percent of its objective.By mid- 1994, seven of the planned 10 hydro generators had been commissioned, and work hadbegun on the eighth. The installed capacity has increased from 150 MW in 1988 to 168 MW in1993, as a result of the rewinding the alternators of the generators by modem insulatingmaterials. Over the same period, the generation output of the plant has increased from some 570GWh to 980 GWh. Once the remaining units have been rehabilitated and uprated, the totalcapacity will increase to 180 MW, and the reliability of the supply will improve further.

7.4 Distribution and Transmission Rehabilitation. The project achieved its objective torehabilitate priority transmission and distribution systems albeit with delays. The increased andimproved transmission and distribution capacity has made it possible for UEB to connect newcustomers to the system and meet the growing demand for electricity by the economy; thenumber of customers has increased by about 44 percent between 1988 and 1993, and sales havealmost doubled during the same period. In addition, the supply is more reliable. Based oninterviews with a limited number of industrial and commercial sector consumers in Kampala inmid 1994, there has been a noticeable improvement in supply reliability recently. The continuedrehabilitation work under the ongoing Third Power project will further improve the networks.System losses, which accounted for about 34 percent of Uganda supply in 1993, are, however,unacceptably high and were not reduced during project implementation. UEB intends to initiatea loss reduction project based on the Loss Reduction Study financed by AfDB. This key projectshould be initiated as soon as possible.

7.5 Studies. Several important studies were successfully completed under the project andmany of the recommendations were carried out. Following the recommendations of the TariffStudy, completed in 1990, UEB established the Long Run Marginal Cost of Supply (LRMC) asthe basis for tariff setting and its recommendations were fully implemented by July 1993, as acondition of effectiveness of the credit for the Third Power project. The Study to assess themanagement, organization, manpower and training needs of UEB, which was financed outside ofthe Project by ODA, laid the foundations for the reorganization of UEB, and as a result, a staffdevelopment scheme was carried out under which several senior managers received training inEurope. The Billing and Revenue Collection Study recommended the purchase of computerequipment and various improvements in UEB's procedures and practices. A new computersystem was installed albeit with delays. While the new computer offered increased efficiency in

24

billing procedures, UEB failed to improve its revenue collection performance largely becausegreater emphasis was placed on the installation of the computer system than on ensuring thatappropriate measures to improve customer management were in place. Moreover, the importantissue of the quality and accuracy of UEB's customer data base was not adequately tackled.Based on the recommendations of the Accounting Study, UEB computerized parts of itsaccounting and reorganized its Finance Department. Even though UEB currently is able toproduce more reliable financial data than before, the lack of highly qualified accountantshampered the full implementation of the recommendations of the Accounting Study.7.6 In addition, much of the underpinning for the ongoing Third Power Project results fromthe studies under the project. For instance, the feasibility and detailed design for the 102 MWOwen Falls Extension, currently being constructed, was financed under the project.

7.7 Technical Assistance to the Ministry of Natural Resources. The project contributedto the establishment of the Energy Department which has come to play a more prominent role inUganda's energy scene, especially through its household and renewable energy projects. Amajor disappointment was that the Household Energy Planning Program did not produce resultsthat could have been implemented to develop a household energy development plan asenvisaged. Currently, the Third Power Project is providing follow-up financing for the seniorenergy adviser and for the biogas promotion project. Continued support will depend on theongoing review of past achievements. There is also a need to strengthen the Department'sactivities in new areas, and the ongoing Third Power Project is providing TA to assist theDepartment to review legal aspects of private sector participation in the power sub-sector. Anadditional area where the Department would need strengthening is the monitoring of therecently liberalized petroleum products prices to ensure least-cost supplies to consumers.

7.8 UEB's Financial and Operational Performance. The project did not achieve itsobjective to improve UEB's financial and operational performance, and follow-up actions arebeing carried out under the ongoing Third Power project. At project appraisal, in 1984, UEB'sfinancial performance was unsatisfactory. UEB was not able to produce reliable financialinformation. Its accounts receivable were estimated to be equivalent to at least 5 months ofbillings. It was unable to cover the cost of routine maintenance and contribute towards capitaldevelopment. Despite an increase of 400% in the average tariff yield, the average revenue perkWh was equivalent to about US cents 1.5 per kWh, while the supply cost was broadly estimatedby the ESMAP study to some US cents 5 per kWh. In addition, the monitoring of UEB'sperformance in accordance with the Credit agreements, was judged by the appraisal team to put aheavy burden on UEB's accounting systems. The SAR also was concerned whether UEB'sorganizational structure and operational performance would be adequate to administer a majorproject. Adding to these concerns were the low staff morale and attendance resulting from theeroded purchasing power of staff salaries due to high inflation.

7.9 At Credit closing UEB's financial performance and its operational efficiency were stillunsatisfactory, despite the training and studies provided by IDA, ODA and AfDB- . UEB wasnot able to reach the 8 percent rate of return on its fixed assets as covenanted in the legalagreements for the Credit. This was partly due to the revaluation of UEB's assets and the lowbulk tariff for electricity exports to Kenya (sales to Kenya were priced at about US cents 0.3 per

5. ODA and AfDB financed expatriate executive officers for UEB's Finance, Stores, Training, Corporate Planning, CommercialOperations and MIS Departments. Most of these staff have recently been replaced by UEB staff members. In addition, the BritishCouncil provided scholarships for graduate studies in Europe. Continued institutional support is expected from the above sources

25

kWh in 1993), as well as the low domestic tariff which prevailed until mid-1993. Operationalinefficiencies, including high staffing levels, also contributed to the problem; the number of staffemployed by UEB doubled between 1986 and 1993 and staff productivity, measured as thenumber of connections per staff, was low - 34 in 1993 - and below the SAR targets. In spite ofthe increase in the average tariff to some US cents 7.3 per kWh in July 1993, UEB posted a lossin 1993, and was not able to fully service its debt obligations for 1993 nor for 1994 .

7.10 UEB's financial difficulties stem mainly from its inability to collect revenue; in 1993,7receivables stood at more than 9 months of sales, compared to the covenanted 3 months7.

Private consumers accounted for about two thirds of UEB's hilling arrears, as public sectorbilling arrears were covered by an annual debt swap arrangement between UEB and theGovernment. The root causes of UEB's commercial difficulties are the unreliable customer database and systematic problems with inadequate organizational arrangements and managementcontrol systems, ranging through meter reading, staff collusion with customers, and cashcollection. To remedy the situation, UEB has initiated an intensified program to disconnectdelinquent customers, carried out a customer census in Kampala to update its consumer database, and has agreed under the ongoing Third Power Project to implement an emergency actionplan to bring receivables down to 3 months of sales by the end of 1995. This plan includesmanagerial and organizational changes, replacement of meters and investigating options forimproving customer management including possible privatization of billing and collection.

7.11 Economic Impact. The SAR reports two alternative IRR estimates: 16.7 percent and21.6 percent. The difference between these two estimates is the value of incremental sales inUganda made possible by the investments; in the first case the SAR uses the average 1985 tariffyield as the value, and in the other case the projected average annual tariff yield during projectimplementation. The SAR correctly noted that the IRR estimates were financial rates of returnadjusted for price inflation and excluding duties and taxes, and did not take account of consumersurplus. Based on the SAR methodology, adjusted for implementation delays, the IRR forUEB's investment program was re-estimated at about 14 percent. This is a reduction comparedto the SAR estimates, but the IRR is acceptable and justifies the investments made. Despite thesubstantial escalation in investment costs, the reduction in the IRR is not significant because theinvestments were spread out over a longer period and because domestic tariffs were higher thanassumed in the SAR. As was the case with the SAR estimate, the re-estimated IRR did not takeaccount of consumer surplus; it thus underestimates the economic benefits of the project. Detailsof the calculation are shown in Table 6 in Part III. Because the final data on project costs andbenefits will be available only in 1997, it is recommended that the IRR be re-estimated at thattime in conjunction with the supervision for the Third Power Project.

6. By mid-1994, the average tariff yield from domestic sales had increased to around US cents 10 per kWh, as a result of theappreciation of the Uganda Shilling vis-a-vis the US dollar.

7. UEB's accounts receivable position worsened during 1993 and 1994, as a result of substantial tariff increases implemented inJuly 1993 and August 1994.

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8. Project Sustainability

8.1 The sustainability of the project is likely, provided that UEB improve its financialmanagement and operational efficiency, without which it will not be able to finance adequateoperation and maintenance of the facilities. With Bank support, under the ongoing Third Powerproject, UEB has already initiated measures to improve its commercial operations and financialmanagement. In addition, the Government is intent to improve the efficiency of the sub-sector,manifested by its current process to review development options for the energy sector and to

8prepare an energy sector strategy in connection with the ongoing ESMAP study .

8. Issues and options in the Energy Sector. Draft report April 1994.

29

9. Bank and Borrower Performance

9.1 The Bank's performance was generally satisfactory. At the preparation stage, the Bankshould have paid greater attention to project costs and scope, though the difficult economic andsecurity situation in Uganda before and at the time of project appraisal posed limitations. TheBank's 15 supervision missions had a substantial impact on improving the implementation of thephysical components of the project, and the Bank was flexible in accepting changes in projectscope and in reallocating funds when it became evident that the project was underfunded andrequired refocusing. With regard to the financial management of UEB, the Bank should havebeen more decisive in enforcing compliance with the financial covenants, especially thecovenant requiring UEB to maintain an agreed relationship - specified in a supplemental letter -between accounts receivable and its annual operating revenucs (PA 4.01).

9.2 The borrower's performance in regard to the construction aspects of the project improvedtowards the end of the project. While country circumstances beyond the implementing agencies'control were a major impediment to project implementation initially, the borrower's slowprocurement decisions contributed to delays. In regard to improving UEB's commercial andfinancial management, the borrower's commitment to project objectives was weak. Theborrower did not comply with all the financial covenants of the project, submission of auditswas often delayed, and UEB was unable to provide the agreed contribution to project financing.On the positive side, the borrower increased power tariffs to the level of LRMC, identified theneed for the accounting study to improve financial information, initiated institutionalimprovements and staff training programs, and submitted its completion report as requested.

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10. Project Relationship

10.1 IDA maintained a good working relationship and adequate communication with theBorrower, UEB, the Ministry of Natural Resources, and the co-financiers during projectpreparation and supervision. Coordination with other donors was also good.

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11. Project Reporting

11.1 The documents in the project file were adequate to prepare this PCR. The Bank'ssupervision reports were comprehensive. They discussed the progress of the several contractsand studies, reported on UEB's financial situation, and the progress on the technical assistancecomponent. The Borrower's quarterly project progress reports were detailed and of high qualityand provided a good account of implementation progress but they did not discuss theinstitutional and financial aspects of the project. Reporting on the technical assistance to theMNR was limited from the side of the borrower.

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12. Lessons Learned

(1) Project implementation could have been expedited had project scope and cost estimatesbeen prepared more accurately. However, given that the project was the first Bankoperation in Uganda's energy sector in more than 20 years and that the country hadhardly recovered from an emergency situation, the task of obtaining fully accurate datawas difficult;

(2) The Bank's flexibility to modify the scope of the project based on new information ofinvestment priorities and costs was important for achieving project objectives;

(3) In spite of the constrained economic and security situation and the fact that Uganda hadnot undertaken major construction in several years prior to project appraisal, itsimplementation capacity was judged to be strong enough to undertake the project in arelatively tight timetable. In retrospect it is evident that the project timetable,particularly with regard to start-up was too optimistic;

(4) The Bank should have been more decisive in enforcing compliance with the financialcovenants of the Credit; and

(5) The project has shown that measures to improve institutional and financial performancehave to be initiated up-front and have a more comprehensive approach than what wasincluded in the project. The project should have addressed the weaknesses in powersector management including the lack of autonomy and commercial orientation of UEB'soperations. These issues are now being addressed under the ongoing Third PowerProject, including the possible privatization of the billing and collection function.

37


UGANDA


PART II: PROJECT EVALUATION FROMTHE BORROWER'S PERSPECTIVE

39

UGANDA ELECTRICITY BOARD

SECOND POWER PROJECT

PROJECT COMPLETION REPORTPART II

1. INTRODUCTION

During the 1970s the Owen Falls Power Station suffered from a lack of regularmaintenance due to the political and economic situation in the country.

By early 1980s it was clear that the forecast growth in the Uganda system could not bemet by a new hydroelectric scheme without serious shortfalls in generating capacity inthe interim.

Kennedy & Donkin in association with Sir Alexander Gibb & Partners in 1983 proposalto uprate and rehabilitate the existing Owen Falls Power Station from 15MW to 18MW(for each of the 10 units) and the transmission and distribution system was accepted byUEB. The study was funded by ODA.

In 1985 IDA, CDC and ODA extended various credits for the rehabilitation project. Theinitial project cost estimate was US$ 72 Million but at completion the project cost wasapproximately US$ 115 Million.

2. PROJECT START-UP

The start-up of the project was delayed about two and a half years by several constraintsincluding country-wide strife. The original project cost estimates were thereforeinapplicable. The network had further deteriorated, prices had escalated during thatperiod. Meanwhile the Board decided on supply and install contracts rather than meresupply contracts in order to secure suppliers' warranty conditions.

Due to limited funding a prioritisation study was undertaken in 1989 to review the scopeof the work and also to determine a new project implementation schedule. The followingmajor items were left out of the new scope of work:

- uprating of the existing 66kV transmission line between Kampala to 132 kV

40

strengthening of 132 kV transmission lines, Kampala -Nkenda, Tororo - Lira.

communication and control provision of new power line carrier SCADA,telephone and radio equipment. [later financed by NDF and NORADrespectively]

reconstruction of district offices, Mbarara, Masaka and Civil Works repair foroperational and residential buildings. [UEB has undertaken using own funds].

Additional funding shown in Annex 1 was, secured to finance some of the itemsleft out by the prioritisation study.

3.1 Rehabilitation and Uprating of Owen Falls Power Station and Dam.

The works were supervised by ODA financed consultants Kennedy & Donkin inpartnership with Sir Alexander Gibb and Partners. The electrical/mechanical componentwas financed by funds from Overseas Development Administration (ODA) and a civilcomponent financed jointly by International Development Association (IDA) andCommonwealth Development Corporation (CDC). The rehabilitation of the Owen FallsPower Station involved the repair and renovation of the following civil works:

Contract 001: Underwater inspection/repairsContract 002: Power Station repairsContract 003: Re-water proofing Power houseContract 021: Dam gate equipmentContract 028: Consultants' houses

as well as the following supply contracts:

Contract 024: Transformers,anc. equipmentContract 025: Cables and AccessoriesContract 026: Switchgear equipmentContract 029: Consultants' vehicles

The key features of the refurbishment were:

to include new and uprated stator windingsmodernisation of the excitation system for the entire 1O generating setsrefurbishment or replacement of virtually all mechanical moving partsmodemisation of the electrical and control equipment.

41

The programme of refurbishing and rewinding the turbines and generators was still inprogress by the Credit closing date of 31 December, 1993 and was expected to becompleted by 1997. The causes of this delayed implementation are discussed inparagraph 6.

3.2 Transmission, Distribution and Communications Component

This was under supervision of consultants Lahmeyer International of West Germany andcontracts relating to these works were mainly for supply and installation of electricalequipment. The work involved the rehabilitation of the system including thestrengthening of the lines and major substations between Owen Falls Power Station andKampala, Kampala and Mbarara and between Tororo and Mbale, also the replacement ofcommunication equipment linking some substations, District Offices and vehicles.

3.3. Awarded supply contracts

A major part of the funds were used for emergency material to enable UEB to repair theexisting network to install new distribution transformers and connect additionalcustomers. The entire UEB organisation had to be restructured and provided withlogistics like vehicles, office material and working tools. The following supply contractshave been placed and material received:

3.3.1 UEB A 1864 to A 1870 emergency items

A 1864 Distribution transformersA 1866 Radio Transceiver setsA 1867 Photocopy machineA 1868 Air conditionersA 1869 Various itemsA 1870 Office equipment

3.3.2 Supply Contracts

UEB 104 Radio Communication systemsUEB 201 Power Transformers HV/mvUEB 202 Distribution TransformersUEB 203 Cables and AccessoriesUEB 204 Overhead line equipmentUEB 205 Distribution PillarsUEB 206 Tools and equipment

42

UEB 207 Workshop Tools and equipmentUEB 208 Specialised vehiclesUEB 209 Transformer Repair materialUEB 231 Circuit breakersUEB 235 Billing Computer

3.3.3 Supply & Installation Contracts

UEB 302 HV and MV overhead linesUEB 401 132/33/11kV substations.

4. INSTITUTIONAL AND MANAGERIAL CHANGES.

A major institutional change supported by the World Bank was financed by the AfricanDevelopment Bank. This was the Institutional Support Project under which expatriatestaffs were recruited to head the departments of Finance, Commercial, ManagementInformation System (MIS) and a newly created Corporate Planning Department.

5. Further Studies.

In addition to the prioritisation study, various studies were undertaken by consultants toimprove and develop electricity supply in Uganda in the lifetime of the Project.

5.1 Extension of Owen Falls Power Station Study.

This was a feasibility study and engineering design for the next hydro site to bedeveloped in Uganda's least cost power development plan and was complemented withsite subterranean investigations financed by CIDA, Canada.

5.2 Training Studies.

There were two studies related to training and management reorganisation "Assessmentof Management, Organisation, Manpower and Training Requirements of UEB", studyand "Selective Staff Development Study" and training manual.

The consultants recommended the re-establishment of the Niger Training Center, and astructural reorganisation of the Board. As a result a staff development scheme wasundertaken in which several UEB Senior Managers received training in the U.K.

5.3 Finance and Accounting.

43

The consultants assisted UEB to set up a project accounting manual for Second PowerProject. As a variation to the contract allowed the consultants to join hands with UEBstaff in finalising the accounts for 1988 - 1989 which were in arrears.

Their recommendations have formed the basis for computerising the accounting andreorganisation within the Finance Department.

5.4 Billing and Revenue Collection Study.

Following the final breakdown of the KL 1902A computer in 1986 the billing andcollection system was then converted to run on third party equipment on a bureau basis

In 1987 Consultants who carried out a study of current practices in the areas of billingand revenue collection recommended the purchase of new computer equipment as well asproposing improved procedures and practices.

Implementation was not satisfactory. It took a long time to supply all the equipment andproblems were encountered in running an outdated software programme. The accuracy ofthe consumer standing data was also over estimated.

5.5 National Electrification Planning Study

Related to the study mentioned at para 5.1 was the National Electrification Planningstudy undertaken under African Development Bank funding. The objective of the studywas to examine the technical, financial and economic feasibility of a programme forproviding electricity to a substantial number of areas in Uganda during the next 20 years.

5.6 Loss Reduction Study

The Loss Reduction Study was funded by ADB and was meant to close the gap in overallsystem planning and system reliability improvements.

5.7 Tariff Study.

At the inception of the Project it was evident that the Board lacked finances for capitaldevelopment, debt service and a reasonable rate of return. Therefore, Consultants wereengaged in 1990 to carry out a tariff study. The study established the Long Run MarginalCost (LRMC) as the basis for setting tariffs. Recommendations about tariff structures andnew tariff levels have been implemented since 1991.

5.8 Other studies

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The following studies were also undertaken and completed.

- Review of stores and vehicle workshop facilities and procedures.- Feasibility study to supply electrical power to Western Uganda.- Rehabilitation of the Kampala Network.- Household Energy Planning Programme.- Rehabilitation and uprating of Uganda electricity system including 10 amendments.

6. PROJECT IMPLEMENTATION CONSTRAINTS

6.1 Rehabilitation and Uprating of Owen Falls Power Station and Dam

In retrospect the causes of delays in implementation have been:-

6.1.1 Technical problems differed from unit to unit and this could not have been reasonablyforeseen.

6.1.2 Funding constraints experienced influenced and prolonged the implementation schedule.

6.1.3 The base load in 1971/1972 before the expulsion of the Asians and which representedsuppressed demand may not have been properly taken into account in the load forecasting.With revived economic activity it was not possible to hand over the machines to thecontractors as envisaged in the schedule of implementation.

6.1.4 The change of supervising consultants from the study consultants could have contributed tothe delay in implementation as the former needed time to familiarise.

6.1.5 The consultants were paid directly by the funding agency with little indulgence by theemployer and the influence of the employer over the consultants was diluted somewhat.

6.2 Other Constraints

At the inception of the project the Special Account was held at Bank of Uganda and becauseof the then existing exchange controls in the country clearance had to be obtained from Bankof Uganda for most of procurement matters. Long delays in disbursing to suppliers andcontractors were experienced.

The situation improved when the Special Account was transferred to a local Commercialbank. Liberalisation of exchange controls further improved project implementation.

45

Joint financing of the generation component between IDA and CDC in the ratio of 70/30caused some difficulties at the beginning. This was sorted out when IDA agreed toexhaust own funds before utilising CDC funding though maintaining the overall ratios.

7. COST OVERRUNS

7.1 Despite reduction in scope of the works (para 2), cost overruns beyond the budget costestimates for Credit 1560 were experienced and are discussed below.

7.2 The World Bank agreed that cost overruns on UEB-401 contract which is a majorcontract to improve to several main substations throughout the network could bedisbursed from the Third Power Project (Credit 2268-UG). In addition to DM15,756,543 paid out of Credit 1560, extra US$ 10 Million will be disbursed from Credit2268. The costs for the supervising consultant amounting to about US$ 2,306,000 willalso be paid from Credit 2268.

7.3 Costs (including five variations) for the design Consultants for Owen Falls Extensionbeyond the provisions of Credit 1560 were also agreed to be disbursed from the ThirdPower Project Credit in the approximate amount of Canadian Dollars 4.5 million.

7.4 Also to be paid from Credit 2268 are some minor costs for the expatriate staff in the MISdepartment totaling to US$350,000.

8. TECHNICAL ASSISTANCE TO THE MINISTRY OF ENERGY

8.1 Establishment of the Energy Department.

The energy department has been successfully created and is currently staffed with wellqualified professionals who have been trained under the Second Power Project at bothshort and long courses and have also gained considerable experience in the energy sectorover the years. The Department has benefited from provisions of computer hardware andsoftware as well as motor vehicles.

It must be noted however that just as well qualified professional staff are in place, theyare not in sufficient numbers and indeed a number of established posts in the variousdivisions of the energy department are not filled. This has been mostly due to theprevailing high salary and wage disparities.

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8.2 Assistance for carrying out a forest and plantation inventory

This project was not undertaken by the Ministry of Energy because it constituted acomponent of another project, under the Ministry of Agriculture and Forestry. TheNational Biomass Study, financed by sources outside the Second Power Project. TheNational Biomass Study has been completed.

8.3 Assistance for a fuelwood marketing survey as well as an urban household energysurvey in the major towns of Uganda

A fuelwood marketing survey was not undertaken but an urban household energy surveywas undertaken and completed by September 1990 under what w'1s called the "HouseholdEnergy Planning Program (HEPP)". The study was fairly exhaustive but has now beenovertaken by events and needs to be revised to adapt it to present day circumstances.

9. OUTAGES AND LOSSES

9.1 Maximum system demand has shown a steady increase as the units in Owen Falls PowerStation have been rehabilitated. Not only has the system demand increased (136.2 MWin 1991, 151.0 MW in 1992 and 157.2 MW in 1993) but the maximum load sent toKenya has also shown an upward trend, although in 1993 there was a decrease from 1992because of the increased Ugandan demand.

9.2 The availability of energy has improved markedly during the last 12 months. During the7 month period June to December 1993, there was an average of 163 hours per month ofload shedding due to distribution shortfalls and 89 hours per month due to generationoutages at Owen Falls Power Station (a total of 202 hours/month). The average monthlyenergy loss was 690 MWh.

This situation did not change markedly during the first months of 1994, but in the quarterApril to June 1994 there were NO loadsheds due to distribution deficiencies (and thiscoincides with the commissioning of the Mutundwe, Port Bell and Gaba WaterworksSubstations) and only an average of 43 hours per month loadshedding due to faults atOwen Falls Power Station. During this period the energy loss was only 155 MWh/monthand was as low as 65 MWh in June when there was a total of only 15 hours of loadshedding. Note that hours of loadshedding do not indicate that the whole of the systemwas off power for that period; it is the sum of the hours lost on the 12 1 1kV feeders andsix 33 kV feeders from Kampala.

9.3 Technical losses are caused in particular by over loaded transmission lines andtransformers as the maximum demand increases. Other causes are the dilapidated LV

47

distribution network. The poor system voltages are largely due to haphazard growth ofdistribution and connections.

9.4 Future action to reduce the high technical losses will depend on the implementation of theADF funded Urban Power Rehabilitation Project.

10. PROJECT ROLE IN LONG TERM UEB PLAN

The Project has provided relative improvements to power system reliability andefficiency by restoring generating capacity at Owen Falls.

The rehabilitation of Owen Falls Power Station will result into uprating ofcapacity by 20% (30MW). However, the firm capacity of the station afterrehabilitation (with nine units in service and one unit under maintenance) will be162MW.

- Strengthening UEB's Management by provision of training, improved workincentives through annual salary/wage increase and a rationalised organisationstructure.

- Promoting rational pricing policies based on long run marginal cost principles.The downside of the tariff policy which has been targeting the LRMC has been anincrease in receivables.

- Least cost options for timely development of generation capacity, namely, theOwen Falls Extension was identified.

- The numerous studies have provided UEB with useful management data base.

Annex 1OTHER UEB CONTRACTS UNDER SECOND POWER PROJECT

contract 9V. 'Description | Funding Contractor Cureniy I M40ount | ate tEq|iv. VSSUEB 91-402 SCADA Equipment NDF ABB Sweden SEK 29,904,000.00 5.93 5,040,684.00UEB 91-403 PLC and Communication NORAD EB-NERA NOK 16,500,000.00 9.01 1,831,542.00

EquipmentUEB 92-404 Supply & Installation of Mbarara EIB GTA & DM 4,514,992.00 1.71 2,639,728.72

132/33 Kv Substation UEB SAD USH 32,779,000.00 1,140.00 28,753.51UEB 92-405 Supply of Steel Towers EIB Siemens AG DM 5,794,469.00 1.71 3,387,785.90

Masaka-Mbarara UEB USH 143,060,400.00 1,140.00 125,491.58UEB 92-406 Supply of ACSR Conductors EIB Siemens DM 2,394,212.00 1.71 1,399.796.54Amd. No. I ACSR 120/20 EIB Siemens DM 1,083,500.00 1.71 633,477.55UEB 92-407 Supply of Insulator chains, strings EIB Siemens DM 849,440.00 1.71 496.632.37

and fittings _ _

Amd. No. I 33 KV equipment EIB Siemens DM 1,550,824.00 1.71 906,702.53UEB 92-408 Survey Works EIB Lahmeyer DM 1,011,840.00 1.71 591,580.92UEB 92-409 Supervision Works EIB Lahmeyer DM 959,850.00 1.71 561,184.52

UEB 92-410A Supply of 2WD General EIB Toyota DM 228,320.00 1.71 133,489.24Cargo Lorries

UEB 92-410C Supply of 4WD Double Carbin EIB Marubeni DM 155,216.00 1.71 90,748.36Pickups . .

UEB 93-411A Supply of Untreated Wooden EIB SIPI lnt. USH 109,000,000.00 1,140.00 95,614.04Poles

UEB 93-411B Supply of Untreated Wooden EIB IPI Ltd. USH 32,000,000.00 1,140.00 28,070.18Poles

UEB 93-412 Supply of Coal Tar Creosote EIB EXIMP Agency DM 120,000.00 1.71 70,159.03Rehabilitation of Queensway and Japanese JICA Jap-Yen 910,864,000.00 123.10 7,399.382.62Motor Mat Substations, Kampala GrantInstitutional Support Project ADB FUA 5,255,300.00 1.15 6,033,031.85Loss Reduction Study IDB IVO FUA 854,800.00 1.15 981,301.85

I___ 32,475,157.28

Annex 2

UGANDA ELECTRICITY BOARDUNITS GENERATED, LOSSES AND SALES (GWh) & MAX DEMAND (MW)

1985-1993.

1985 1986 1987 1988 1989 1990 1991 1992 1993January 55.3 46.2 56.9 49.7 41.5 62.2 56.2 82.6 82.5February 53.4 47.5 45.3 49.9 45.5 52.7 50.5 75.9 77.3March 59.0 57.2 51.0 53.0 56.4 54.6 55.6 82.8 81.7April 53.9 55.7 49.3 50.7 54.0 66.0 51.6 85.4 77.4May 50.3 46.6 50.3 48.8 52.5 66.4 53.2 77.1 83.1June 47.8 44.4 51.9 4Z0 55.8 63.8 66.2 72.5 76.0July 53.2 5Z5 54.6 48.7 577 62.7 73.1 87.5 83.9

August 53.3 54.5 53.4 49.3 57.2 62.6 74.6 8ZI 83.0September 50.3 56.7 54.0 49.3 56.8 66.2 66.2 78.0 79.8October 50.3 58.9 56.4 470 58.4 6Z7 77.6 877 83.2

November 49.2 54.1 49.0 35.8 60.8 574 76.0 86.8 82.1 HDecember 48.7 56.1 45.7 36.8 62.9 55.0 80.8 89.9 8Z3

I Hydro Electric (GWh) 624.7 635.4 617.8 566.0 659.5 736.7 781.6 993.3 977.32 Diesel 1.7 1.7 1.3 1.5 1.4 1.5 1.2 1.9 1.83 Total Generated 626.4 63ZI 619.1 5675 660.9 738.2 782.8 995.2 979.14 Works Units 1.0 1.0 1.0 1.0 1.1 1.4 1.5 0.64 0.595 Units Sent Out 625.4 636.1 618.1 566.5 659.8 736.8 781.3 994.6 978.516 Uganda Sales 244.1 249.1 344.1 262.7 279.0 406.5 500.0 485.0 472.67 Kenya Sales 215.0 281.0 170.2 110.0 157.0 166.5 150.0 289.1 258.48 Total Sales 459.1 530.1 514.3 372.7 436 573 650 774.1 730.989 Supply to Uganda 411.4 356.1 448.9 457.5 503.9 571.7 632.8 706.1 720.7

10 Losses (GIWh) 166.3 106.0 103.8 193.8 223.8 163.8 131.3 220.5 247.5Losses (%) 27 17 17 34 34 22 17 22 25

12 Maximum Demand (MW) 110.6 IOZ4 103.6 94.6 110.8 122.8 136.2 151 15Z213 Load Factor 64.5% 6Z5% 68.1% 68.3% 67.9% 68.5% 65.5% 75.1% 71.0%

53 Annex 3

PROJECT COST AS OF JUNE 30, 1994

FC LC TotalUS$ US$ US$

OWEN FALLS POWER STATION

A) civil works

Underwater inspection & repairs (001) 5,906,434 245,036 6,151,470Power station repairs (002) 2,585,996 216,027 2,802,023Re-waterproofing of station roofs (003) 524,058 11,567 535,625

Sub-Total 9,016,488 472,630 9,489,118

B) equipment

Dam gate equipment (021) 1,434,528 7,940 1,442,468Transformers & ancillary equipment(024) 245,645 0 245,645Cables & accessories (025) 1,402,280 1,306 1,403,586Switchgear & substation equipment(026) 511,197 80,193 591,390Intake & draft tube gates (027) 2,117,464 0 2,117,464Inspection for rehab of transformers(030) 31,579 0 31,579Consultants' houses (028) 237,485 0 237,485Consultants' vehicles (029) 122,651 1,765 124,416

Sub-total 6,102,829 91,204 6,194,033

Owen Falls turbines & generators (023) 22,857,194 0 22,857,194Supervising consultants (055) 2,357,900 0 2,357,900

Total Owen Falls RehabilitationIDAfCDC/ODA 40,334,411 563,834 40,898,245

54 Annex 3

TRANSMISSION & DISTR. EQUIP. FC US$ LC US$ Total US$Radio communication equipment(l04) 631,524 9,913 641,438Power transformers (201) 1,147,905 0 1,147,905Distribution transformers (202) 2,419,353 0 2,419,353Cables & accessories (203) 1,586,986 0 1,586,986Overhead line equipment (204) 510,032 0 510,032Distribution pillars (205) 1,664,542 0 1,664,542Tools and test equipment (206) 703,758 0 703,758Automotive Workshop tools & equip(207) 146,231 0 146,231Transformer repair materials (209) 16,826 0 16,826Distribution transformers (230 A 1864) 292,708 0 292,708Radio transceiver sets (230 A 1866) 39,415 0 39,415Circuit breakers (231) 157,587 0 157,587HV & LV overhead lines (236) 1,687,533 48,923 1,736,456Landrover repairs (208B) 118,352 0 118,352pecialized vehicles (208C) 1,908,713 28,750 1,937,463Specialized vehicles (208D) 304,640 0 304,640Specialized vehicles (208E) 114,692 0 114,692Suzuki vehicles (208A) 89,121 971 90,092Substations and accessories (401) 10,491,433 0 10,491,433Pole Plant Refurbishment (238) 60,026 0 60,026Exchange Difference Gain (406) 0 0 0GEC Meters 52,930 0 52,930

Sub-Total 24,144,307 88,557 24,232,864

OFFICE EQUIP & BILLING COMPUTERPhotocopy machine (230 A 1867) 11,014 0 11,014Airconditioners(230A 1868) 13,036 0 13,036Emergency items (230 A 1869) 1,720,077 0 1,720,077Office equipment (230 A 1870) 262,189 0 262,189Billing Computer (235) 663,912 0 663,912

Sub Total 2,670,228 0 2,670,228

55 Annex 3

ENGINEERING & SUPERVISIONT & D Consultant main contact (041) 1,221,661 0 1,221,661

emergency items (042) 107,030 0 107,030Tender docs revision (043) 83,242 0 83,242civil works attachment (044) 36,270 0 36,270additional services SCL (045) 99,320 0 99,320supervision substations (049) 2,009,379 0 2,009,379additional services (050) 245,058 0 245,058supervision SCADA (051) 384,572 0 384,572additional services amendment no. 8 243,592 0 243,592Sub-Total 4,430,124 0 4,430,124

STUDIES FC US $ LC US $ Total US $Kampala rehabilitation study (046) 285,818 0 285,818Priortization study (047) 89,491 0 89,491Western line study (048) 536,617 0 536,617Accounting study (056) 111,262 0 111,262Man power study (057) 150,435 0 150,435Billing and collection study (058) 186,029 0 186,029Tariff study (061) 190,663 0 190,663National electrification study (062) 505,764 0 505,764Consulting Services/Amendment 8 (053) 112,312 0 112,312System analyst salary 247,466 0 247,466Passages for Experts 38,131 0 38,131Sub-Total 2,453,988 0 2,453,988

STAFF TRAINING (237) 982,294 0 982,294

POWER III PREPARATIONOwen Falls extension study (060) 3,494,391 0 3,494,391Power III Preliminary Expenses 165,756 2,034 167,790Sub-Total 3,660,147 2,034 3,662,181

UEB Staff salaries & wages, stationery etc. 0 1,440,967 1,440,967Interest during construction 18,287,843 0 18,287,843

TOTAL UEB COMPONENTS 96,963,342 2,095,392 99,058,734

TECHNICAL ASSISTANCE TO MINISTRY 2,953,218 0 2,953,218

POWER II IDA/CDC/UEB/ODA 99,916,560 2,095,392 102,011,952

56 Annex 3

OTHER COMPONENTS UP TO DEC. 1993:SCADA (239) (NDF) 5,040,684 4,779 5,045,463PLC (403) (NORAD) 1,831,542 0 1,831,542

TOTAL POWER II 106,788,786 2,100,171 108,888,957

57 Annex 3

UGANDA ELECTRICITY BOARDPOWER II PROJECT

STATEMENT OF DISBURSEMENT OF FUNDS AS AT 30 JUNE, 1994

SOURCE OF FUNDSCONTRIBUTORS

Total Budget Note 1994 1992('000) US$ '000 US$ '000

International Development Association (IDA) SDR 29,500US$ 868 40,168 32,478

Commonwealth Development Corporation (CDC) GBP 9,601 16,277 16,157CDC Interest Income 2Overseas Development Administration (ODA) GBP 16,460 27,156 23,369Uganda Electricity Board US$ 17,200 4,156 2,508Nordic Development Fund (NDF) SDR 4,000 5,041 4,105Norwegian Agency for DevelopmentCooperation (NORAD) NOK 16,500 1,832 1,832

Total Contribution 1 94,632 80,449

OTHER SOURCES:Creditors 2 14,256 20,049Total Funds Disbursed 108,888 100,498

EXPENDITUREWork-in-progress expenditure 3 108,888 98,498

LOAN REPAYMENT - CommonwealthDevelopment CorporationTotal Expenditure 108,888 98,498

Balance at Bank 4 143 2,000

58 Annex 3

UGANDA ELECTRICITY BOARD - POWER II PROJECT

STATEMENT OF DISBURSEMENT OF FUNDS AS AT 30 JUNE, 1994

NOTES TO THE STATEMENT - 30 JUNE, 1994

2. CREDITORS 1994 1992US$ '000 US$ '000

CDC - accrued commitment, legal and negotiation fees 1,798 261Uganda Govemment - loan interest accrued (IDA) 12,458 9,468Overseas suppliers (letters of credit) - 10,314Sundry creditors - 6Sub-Total 14,256 20,049

3. WORK-IN-PROGRESS EXPENDITURE

Owen Falls Dam 38,541 33,576Transmission and distribution 33,780 35,276Engineering and supervision 3,580 3,580Studies and training 9,853 8,318Technical assistance to Ministry of Energy 2,953 2,853Commitment fees (CDC) 623 621Negotiation and legal fees (CDC) 38 38Interest - IDA Uganda Electricity Board 7,013 5,945

- Ministry of Energy 1,139 752Interest - CDC 5,081 3,547Interest - ODA 3,898 2,599Bank charges - IDA Special Account 67 54Bank charges - Barclays Bank 21 21Power III preliminary expenses 168 167Stationery and sundry expenses 123 118Rehabilitation allowance 459 303Medical expenses 49 34Senior Staff salaries 152 100Wages (Junior and Intermediate staff) 657 424Loan charges NDF 44 44Interest NDF 363 128Experts Salaries 248 0Experts Passages 38 0Sub-Total 108,888 98,498

4. BALANCE AT BANKCitibank New York (IDA Account) 0 (53)Barclays Bank PLC, London (CDC Account) 0 410Standard Chartered Bank Uganda Limited (CDC) 143 1,643Sub-Total 143 2,000


UGANDA


PART III: STATISTICAL AND OTHERPROJECT INFORMATION

61

UGANDASECOND POWER PROJECT

CREDIT 1560-UG

PART III: STATISTICAL AND OTHER PROJECT INFORMATION

Table 1. Related Bank Group Loans and Credits

AmountLoanl (VS$ Tear of

Credit Tftfe miflion) SPurpose Approvaf StatusExpansion and improvement of

Loan 0279-UG 8.4 transmission and distribution 1961 Closedto UEB system and construction of small

hydroelectric and diesel plants.To finance the importation of

Credit 1252-UG agricultural inputs, spare parts(Second 70 and raw materials for industry 1982 Closed

Reconstruction and transport and other largelyProgram Project) non-capital needs of high

economic priorityCredit 1434-UG To assist the Government to

(Second Technical 15.0 address some of the major 1984 ClosedAssistance) weaknesses in its capacity to

manage and rehabilitate theeconomy

Credit 1561-UG To assist in the promotion of(Petroleum 5.1 hydrocarbon exploration by the 1985 ClosedExploration oil industry; and strengthenPromotion) GSMD in the administration and

supervision of explorationpromotion and development ofpetroleum resourcesTo continue with the program of

Credit 2268-IJG rehabilitation of the power(Third Power 125 system begun under the Second 1991 Ongoing

Project)) Power Project, develop Uganda'shydro resources, and expand thetransmission and distributionsystem to provide reliable andleast-cost supplies of electricity.

62

Table 2. Project Timetable

Steps In

Pro0 fr7 ~ct Cyc q'(a 0t nnecf4vate Ac 0Sltua(:(Date . . .. .. . . .. . .. . .. .. . . . . .. .. . . .. .. .. . .. :. . .::::::::::

Date of first presentation to Obtober 1982IDA

Preparation mission January 1984

Appraisal Mission January 1984 July 1984

Credit Negotiation October 1984 February 1985

Board Approval December 1984 March 19, 1985

Signing May, 30, 1985

Effectiveness March 1985 June 26, 1986

Project Completion December31, 1989 19971J

Credit Closing June 30, 1990 December 31, 1993

1/ The IDA-financed transmission and distribution rehabilitation is expected to becompleted in March 1995, while the ODA-financed Owen Falls Rehabilitation isexpected to be completed in early 1997.

63

Table 3. Credit DisbursementsCumulative Estimated and Actual

IOA fisca(Tear andSemester Cumu(ative Cumurative A ctua( as PercentDis6ursements Dis6ursements ofAlppraisaf

lAppraisafEstimate lctuaIs {EstimateVS$ 'VEm((ion) VS$ EQ(mifrton)

FY86 December 31, 1985 3.5 0 0June 30, 1986 8.5 0 0

FY87 December 31, 1986 16.5 0 0June 30, 1987 23.5 2.6 11 %

FY88 December 31, 1987 25.5 2.8 11%June 30, 1988 27.5 3.3 12 %

FY89 December 31, 1988 28.0 3.9 14 %June 30, 1989 28.4 5.7 20 %

FY90 December 31, 1989 28.7 8.3 29%June 30, 1990 28.8 11.6 40 %

FY91 December 31, 1990 0 19.4 67 %June 30, 1991 0 24.0 83 %

FY92 December 31, 1991 0 29.9 104 %June 30, 1992 0 30.8 107 %

FY93 December 31, 1992 0 31.7 110 %June 30, 1993 0 36.2 126 %

FY94 December 31, 1993 0 39.5 137 %June 30, 1994 0 40.2 140 %

Note: The last disbursement took place on April 20, 1994.

64

4. Project ImplementationTable 4.1 Contract Completion Dates

OWEN FALLS POWER STATION

A) Civil works

Underwater inspection & repairs (001) Sept 1990

Power station repairs (002) June 1990

Re-waterproofing of station roofs (003) Sept 1988

B) Equipment

Dam gate equipment (021) Oct 1992

Transformers & ancilliary equipment (024) Aug 1993

Cables & accessories (025) Not yet fully completed

Switchgear & substation equipment (026) Not yet fully completed

Inspection for rehab of transformers (030) Apr 1991

Intake and Draft Tube gates (027)

Consultants' houses (028) 1989

Consultants' vehicles (029) 1989

C) Turbine & generator rehab & uprating (023)

1st Unit June 1991

2nd Unit July 1991

3rd Unit Sep 1991

4th Unit Apr 1992

5th Unit Feb 1993

6th Unit Nov 1993

7th Unit Jul 1994

8th Unit Jan 1995

9th Unit Jul 1995

10th Unit Jan 1996

Upgrade of 2 units Jan 1997

TRANSMISSION & DISTRIBUTION EQUIPMENT

Radio conumunication equipment (104) May 1991

Power transformers (201) May 1992

Distribution transformers (202) May 1992

MV & LV cables & accessories (203) Oct 1990

Overhead line equipment (204) Mar 1992

Distribution pillars (205) Oct 1990

Tools and test equipment (206) Not Completed

Automotive Workshop tools & equipment (207) Oct 1990

Transformer repair materials (209) Jun 1993

Distribution transformers (230 A 1864) Oct 1990

Radio tranceiver sets (230 A 1866) Oct 1990

Circuit breakers (231) 1990

HV & LV overhead lines Kampala (302) Oct 1993

Landrover spares (208B) 1991

Specialized vechicles (208C) 1991

Specialized vechicles (208D) 1991

Specialized vechicles (208E) 1991

Suzuki vechicles (208A) 1991

Substations and accessories (401) Sept 1994

SCADA & PLC end 1994

Photocopy machine (230 A 1867) May 1990

Air conditioners (230 A 1868) Sep 1990

Emergency items distribution (230 A 1869) Feb 1990

Office equipment (230 A 1870) Jun 1990

Billing computer (235) May 1990

Source: UEB

65

Table 4.2. Studies

Project Component/Contract Compretion (Date

Kampala network rehabilitation study (046) Nov 1990

Prioritization study (047) Aug 1989

Western line study (048) Dec 1991

Accounting study (056) Oct 1990

Billing and collection study (058) 1987

Stores & workshop study 1987

Man power study (060) 1990

Tariff study (061) Aug 1990

National electrification study (062) Feb 1993

SCADA study Dec 1992

Owen Falls extension study (060) 1992

Source: UEB

Table 4.3. Comparison of UEB's Selected Indicators

11986 198788 1989 990 199 1991993______ _::_:_::_S__ Actual SAP.1 AetUaI :S SAA Actl : SAR ' ACual4 SAR ActUal SAR ' ACtu:l ACtu : AtUal...Installed capaC;tY at OWenFalls hydroplant (MW)1' 156 150 162 150 168 150 174 150 180 150 180 159 162 168Peak Demand (MW) I -- I

133 107 136 104 1481 95 156 111 164 123 1741 136 151 157Net Generation I I I(Gwh) 660 636 692 618 766 566 818 660 873 737 926 781 995 978Sales (GWh) 597 626 514 6931 373 7391 436 788 572 83-5 1 648 774 731Transmission and I I t I Idistribution lossCsi' (% of I I IUgandaSupply) 14 1 30 12 1 24 11 1 43 10 1 45 n/a 29 n/a 1 21 31 34Number of connections IT

('000) 92.8 80.8 + 95.8 1 103.9 1 114.8 110.8 116.9Number of employees 1

I('°°°) 1 1.7 1 1.9 1 2.4 1 2.7 1 2.9 3.0 3.4Connections per employee 26 28 56 301 43 32 40 5 1 39 39 37 34Rate of retum On fixed I I IOassets(°/O) 5 14 61 -88 71 74 7 -18 81 -11 n/aI I I 0Current ratio 2.6 1 3.0 2.9 1.2 4.5 1.6 5.9 1 0.8 5.7 1.7 7.1 1 0.7 0.8 1.4Debt service coverage I

5.5 3.9 5.2 -1.1 9.8 1.0 20.1 2.6 1.7 0.2 1.8 11 6.5 2.4Number of months ofreceivables 5 8.6 3.0 6.9 3.0 7.5 3.0 5.2 3.01 8.1 3.01 5.6 6.5 8.9Annual average revenue ofUganda sales (USh/kWh) 0.1 0.6 2.7 5.1 9.6 18.9 41.7 73.5Revenue of Uganda Sales(USS/kWh) 1.4 1 0.7 2. 1 1.3 2.6 2.5 2.6 2.0 2.9 2.1 3.4 1 2.4 3.8 6.7

Source: UEB, Power ll SAR, and UEB s audited accounts

LI Owen Falls accountsfor almost all generating capacity in the grid system.2/ Includes technical and non-technical losses.

67

5. Project Cost and FinancingTable 5.1 Project Costs: Comparison of BAR Estimates and Actual Costs

(VS$ milUtonJ

- -mject Component - RjEstimate Actut(Projct Cost

Local TForeign Totaf toca( 'Forwen Total

Owen Falls power station rehabilitation

a) Civil Works 0 4.4 4.4 0.5 9.0 2.5

b) Equipment 0.6 9.2 9.8 0 34.4 34.4

Transmission and distribution equipment, 4.5 17.9 22.4 0 33.8 33.8etc.

Engineering and supervision 0.8 2.9 3.7 0 6.8 6.8

Studies and Training 1.8 1.4 3.2 1.4 6.2 7.7

TA to MTTP 3.4 3.4 0 3.0 3.0

Total Base Cost 7.7 38.8 46.5 1.9 93.2 95.2

Physical Contingencies 0.6 4.7 5.3

Price Contingencies 0.9 5.8 6.7

Total Project Cost 9.2 49.3 58.5

Interest During Construction 11.8 3.1 14.9 18.2 18.2

Total Financing Required 21.0 52.4 73.4 20.1 93.2 113.4

Note: Actual costs include NDF and NORAD-financed PLC and SCADA.

As of December 31, 1994.

Table 5.2 Project Financing(US$ million]

Source Estimate in SAR Actual Difference

IDA (under Credit 1560-UG) 28.8 40.2 + 40%

IDA (under Credit 1434-UG) 0.86

ODA 12 32.5 +171%

CDC 13 16.3 +25%

DOF n/a 5.0

NORAD n/a 1.8

UEB 19.6 4 -80%

Creditors 12.7

Total Project Cost 73.4 113.4 +55%

Source: UEB -Status at December 31, 1994.

Note: EIB and JICA financed additional T& D Rehabilitation and AfDB and ODA financedtraining and studies.

68

Table 5.3 IDA Disbursements

. .... .. ... ... Aettudafftb)~~is6rsemeti 6 Cteoi... .. C .. ry(in tfiusa44 of ~VS$)

(1) Civil Works, mechanical and electricalequipment 7,231

(2) Transmission and distribution worksand ancilliary items 23,196

(3) Uprating and strengthening oftransmission lines 287

(4) (a) Consultant services 4,712(b) Technical assistance to MTTP 2,875

(5) Engineering and design work for thenext hydropower station 1,867

TOTAL 40,168

Table 6: Economic Impact

tINVESTMENT INCREMENTAL. NETYEAR SALES COST O&M COST VALUE OF SALES BENEFTIS BENEFITS

Vgandi Kr"a Tansamia Xpra Tanania VndaGWh GWh C GWh US$'OOO US$5V00 US cents/lkWA UScejat4/kWk US cents/kWh US$00oo US$Goo°

1987 0 0 0 2,175 0 0 0 0 0 -2,1751988 8 4 0 4,634 28 0 0 0 0 -4,6621989 25 12 0 27,745 140 0 0 0 0 -27,8851990 126 59 0 21,772 229 0 0 0 0 -22,0011991 206 97 0 43,047 404 0.4 6.3 1.7 3,993 -39,4581992 364 171 0 16,699 471 0.4 6.3 j 2.4 9,183 -7,9881993 425 199 1 6,698 499 0.2 6.3 3.4 14,718 7,5221994 449 211 3 11,323 545 0.2 6.3 4.0 18,542 6,6751995 491 230 7 6,300 570 0.2 6.3 4.0 20,452 13,5821996 514 241 8 6,300 596 0.2 6.3 4.0 L 21,515 14,6191

1997-2024 537 252 45 0 596 0.2 6.3 4.0 J 24,744 [ 24,148 c

Net Present Value @ 11,85812%

IRR _13.6%

Notes:1. All values are expressed in 1985 prices.2. 1994 values are preliminary and 1995 and 1996 values are projections.3. Capital investment costs per UEB data.4. O&M costs. 0.4% of investment costs, according to the SAR.5. Plant output when rehabilitated is estimated at about 980 GWh and total sales at about 834 GWh (based on the SAR)6 Above results are preliminary asfinal data on project costs and benefits was not available because the project was

notfully completed at the time of the preparation of the PCPR

Table 7. Status of Compliance with Major Covenants

4reement. Section : :Descpt'ir of Covenant:: Co:men S..::

DCA 4.01 2 The Borrower shall take appropriate measures to enable UEB to collect promptly payments for UEB has a debt swap agreement with the CPelectricity supplies from Govemment organizations Govemment

DCA 4.02 13 The Borrower shall consult IDA on the development of the next hydroelectric station in compliance C

DCA 4.03 2 The Borrower shall: (a) take all measures necessary to enable UEB to eam a rate of return as provided in Tariffs were increased in September 1987, CPsection 4.03 of the PA; and (b) approve tariff increases sufficient to enable UEB to achieve the said August 1991, June 1992, July 1993 andobjectives August 1994.

DCA 4.04 10 The Borrower shall carry out a national forestry inventory and studies of urban household energy In compliance. Cutilization and fuelwood marketing according to TORs and timetable acceptable to IDA Forestry inventory was carried out by the

Forestry Department in agreement with IDA.Household energy survey was carried out.

DCA 4.05 5 The Borrower shall take measures to strengthen the Energy Department in MPPT along the lines of the In compliance. CESMAP report " Uganda - Institutional Strengthening in the Energy Sector" (January 1985) Advisors, consultancy services, stafftraining,

office equipment, and vehicles.

PA 2.05 5 UEB shall in consultation with the Borrower and IDA implement the findings of the study on its Study completed in 1990. C oorganizational structure financed under the second technical assistance credit (No. 1434)

PA 2.06 5 UEB shall: a) not later than June 30, 1986, carry out a study on its training and manpower development a) Study completed in 1990. a) CDneeds to 1995; and b) implement the recommendations of the study in accordance with a timetable b) In compliance b) Cacceptable to IDA

PA 2.07 5 UEB shall: a) carry out a study to review its billing and collection system by March 31, 1986; and b) a) Study completed in 1987 a) CDimplement the study recommendations by September 30, 1986 b) Partial compliance b) CP

PA 2.08 5 UEB shall not later than March 31, 1986, implement recommendations of the stores and workshop Study ,ompleted in Feb. 1987. CDstudies financed by the ODA

PA 2.09 5 UEB shall: a) carry out a tariff study according to TORs acceptable to IDA; and b) implement the study a) Study completed in 1990 CDrecommendations by January 1, 1987 b) In compliance in 1993

PA 3.04 5 UEB shall: a) appoint a Project Coordinator by June 30, 1985; and b) appoint four Regional Delayed compliance. CDEngineers/Managers by December 31, 1985

PA 4.01 I UEB shall: a) have its accounts and financial statements and the Special Account audited by Delayed compliance. FY 93 audits received CDindependent auditors; b) furnish to IDA not later than six months after each fiscal year certified copies in January 1995.of its financial statements, and the auditors report; c) fumish to IDA other information concemingaccounts as required

PA 4.02 (a) 9 UEB shall provide IDA with a semi-annual report of outstanding accounts receivable. In compliance C

PA 4.02 (b) 9 The semi-annual report mentioned in (a) shall include the dates and amounts of arrears by major In compliance. Ccustomer categories as of June 30 and December 31 of every year.

PA 4.02 (c) 9 UEB shall maintain relationship acceptable to the Association between outstanding accounts receivable NCand its annual operating revenues (this relationship was be specified in a supplemental letter).

Agreement Section T7ype 1)escnption of Covenant Comments status

PA 4.03 2 UEB shall: a) charge a tariff to ensure that it achieves an annual rate of return of not less than 5% of the Not in compliance. Covenant deferred by NCaverage current net value of UEB's fixed assets in operation. UEB shall in consultation with IDA adjust one year (SPN March 1987).this rate upward as and when economic circumstances justify, with the objective of achieving a rate of6% in FY87, 7% in FY88 and FY89, and 8% in FY90; b) befor June 30 in each fiscal year prepareforecasts to review whether it would meet the requirements in (a), and fumish the results of such reviewto IDA; c) if the review shows that UEB would not meet the requirements in (a), UEB shall take allnecessary measures, including adjustments of the tariffs, in order to meet the requirements.

PA 4.04 2 UEB shall make a Quarterly Review of its tariff and increase expediously whenever necessary to Tariffs were increased in Sept. 1987, Aug. CPmaintain the rate of rctum specified in Section 4.03, and submit it to IDA within one month of the close 1991, June 1992, July 1993 and Aug. 1994.of each calendar quarter

PA 4.05 2 UEB shall revalue its assets in accordance with methods acceptable to UEB and IDA Carried out in 1991. C

PA 4.06 2 UEB shall not incur any debt, unless the net revenus of UEB .... shall be at least 1.5 times the estimated Cmaximum debt service requirements of UEB for any succeeding fiscal year on all debt of UEB lincluding the debt to be incurred

PA 4.07 2 UEB shall consult with IDA prior to making any major investments and changes to the proposed Cinvestments

Covenant Types Present Status:

1 = Accounts/Audits 8 = Indigenous people C = covenant complied with2 Financial performance/revenue 9 = Monitoring, review and reporting CD = complied with after delay

generation from beneficiaries 10 = Project implementation not CP = complied with partially3 = Fow and utilization of project funds covered by categories 1-9 NC = not complied with4 = Counterpart funding 11 = Sectoral or cross-sectoral5 = Management aspects of the project budgetary or other resource allocation

or executing agency 12 = Sectoral or cross-sectoral policy/6 = Environmental covenants regulatory/institutional action7 = Involuntary resettlement 13 = Other

72

8. Use of Bank Resources

Table 8.1. Bank Resources: Staff Inputs

P4nnedV (P~*vsedlZ Actual

'Ot L. IW Wee:iee4 VS$ VS$ee _ Vees ____

Preparation toappraisal n/a n/a n/a n/a 44.5 n/a

Appraisal n/a n/a n/a n/a 45.3 n/a

Negotiationsthrough n/a n/a n/a n/a 7.2 n/aBoard approval

Supervision n/a n/a n/a n/a 118.9 n/a

Completion n/a n/a n/a n/a 7.0 n/a

TOTAL n/a n/a n/a n/a 222.9 n/a

1/ Planned and revised staff weeks available only from FY89. Dollar amounts available onlyfor FY94.

Table 8.2. Bank Resources: Missions

Pre- Jan 1984appraisal __ ____

June 1984 25FA-EC n/a Mission projections showed shortfall in UEB'scash flow for 1985.

Appraisal Jul 1984 4 FA-PE-EC-Co

Supervision _____

May 1985 1 6 FA n/a No operating or financial data available.Nov 1985 1 FA n/aApr 1986 1 29 FA 1 Credit effectiveness delayed, UEB's financial

position weak, problems with transportation.Aug 1986 FA UEB has revenue problems due to devaluation and

poor collection.Mar 1987 6 PE-FA-OA Need to raise tariffs. Appointnment of consultants

delayed. Billing and collections deteriorated.Financial data unreliable. Project classified as aproblem project. Major feeder breakdown in

Aug_1986__FA__UEB_hasrevenue_probems_due to dvaluation anKampala.

Oct 1987 2 6 PE-Co 3 Project start-up delayed by two years. AdequateUEB's financial data unobtainable.

June 1988 3 4 PE-FA-EC 2 Not in compliance with financial covenants. UEBnot able to finance local costs. Delays at CentralBank.

May 1989 1 PE 2 Project under-funded. UEB's weak finacial

~:SX S)fh¢^ P}} je a g(n4Yt zM eof <11*y $e#f.~e £b 7 Poet~p fP~~40 . ; ,S:

situation and unsatisfactory collectionperformance. UEB in non-compliance withfinancial covenants.

Nov 1989 213 PE-FA 2 UEB's financial position is precarious. Delays inpayments to contractors.

Feb 1990 316 FA-OA-PE 2Slow establishmnent of letters of credit. UEB rateof retun less than covenanted. Covenanted reportson accounts receivable not prepared.

Sept 1991 19PE 2Disbursements behind schedule. Financialperformance rated 3.

May 1992 111 PE 2High receivables; audits overdue; delays.Financial performance rated 3.

Nov 1992 39 PE-FA-FA 2High receivables.Apr 1993 36 PE-FA-Co 2Two special accounts opened; UEB not in

compliance with rate of return covenant.Mar 1994 223 PE-FA 2UEB's collection performance had deteriorated.

Delays in Owen Falls generating unitrefurbishment. Project cost under estimated.

Completion June 1994 1 5 EC n/a

Overall performance rating: 1 = Problem free or minor problem2 = Moderate problems3 = Major problems

Specialization codes: PE = Power EngineerFA = Financial AnalystEC = EconomistOA = Operations AnalystCo = Consultant

The Second Power Project was supervised together with the Third Power Project (Cr. 2268-UG).

Table 9. INCOME STATEMENT FOR THE YEAR ENDING DEC. 31, 1986 -1993UGANDA ELECTRICITY BOARD (UEB)

1986 1987 1988 1989 1990 1991 1992 1993

Sales (GWh)Domestic 139.00 149.30 160.70 153.20 274.00 328.00 263.30 272.50

Commercial 72.30 70.60 30.90 29.20 37.00 33.00 32.70 29.80Strret Lighting 11.00 11.00 8.70 3.90 3.00 5.00 6.70 6.40

General 36.00 68.30 23.40 46.60 47.00 67.00 109.40 96.70Industrial 40.80 38.90 39.40 46.40 45.00 65.00 72.70 71.00Total Retail 299.10 338.10 263.10 279.30 406.00 498.00 484.80 476.40

Bulk Kenya 231.00 176.20 110.00 156.60 166.30 150.00 289.10 258.30

Bulk Tanzania 0.00 00.00 .00 00.00 .00 00.00 .00 1.20Total Sales 530.10 514.30 373.10 435.90 572.30 648.00 773.90 735.90

Tariff Uganda Shs/KWhDomestic 0.10 0.30 2.90 6.50 12.00 19.40 41.40 65.90Commercial 0.10 1.10 0.70 8.40 11.00 18.70 53.20 87.60

Strret Lighting 0.00 1.70 0.10 7.60 6.00 14.60 47.80 89.20Industrial 0.10 0.20 3.10 5.30 11.00 19.90 39.60 73.50General 0.10 0.50 4.10 4.40 9.60 28.80 51.80 95.10Bulk Kenya 0.10 0.20 0.40 5.40 3.20 4.80 6.10 3.40Bulk Tanzania 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Revenues (million Sha) __

Domestic 14.5 46.2 463.9 793.9 2,525.4 5,502.3 10,035.2 Ul

Commercial 6.5 87.1 22.9 246.1 406.0 616.0 1,741.0Strret Lighting 0.3 18.3 1.2 29.7 18.0 73.0 320.0Industrial 4.0 7.9 123.5 246.1 517.0 1,332.0 4,327.0

General 3.8 31.4 95.0 101.1 431.0 1,872.0 3,768.0Total Retail 29.1 190.9 706.5 1,416.9 3,897.4 9,395.3 20.191.2 29.044.0Bulk Kenya 20.8 31.3 39.3 502.3 528.7 721.4 1,765.1 885.1Bulk Tanzania 109.1

Tariff IncreaseTotal Power Supply 49.9 222.2 745.8 1,919.2 4,426.1 10,116.7 21,956.3 30,038.2Meter Revenue & Others 0.0 1.0 6.6 16.0 16.4 124.1 664.5 669.3Total Revenue 49.9 223.2 752.4 1,935.2 4,442.5 10.240.8 22,620.8 30.707.5

Operating Expenses (million Sha)Fuel- Diesel Stations 2.6 3.3 12.3 55.1 128.4 293.0 364.1 402.0Salaries & Wages 7.9 54.4 186.0 339.7 1,004.8 2,003.5 3,474.4 9,183.0

Repair & Maintanance 19.9 43.8 94.1 451.3 1,690.8 2,805.4 5,601.5 2,315.4

Transport & Travel 7.3 35.7 62.4 253.3 376.8 632.5 839.2 3,069.7Others 8.2 142.6 297.5 965.3 1,341.2 3,242.0 8,495.6 3,789.7

Depreciation 0.4 2.6 1.8 18.7 105.9 104.7 1,765.7 13,886.0

Total Operating Expenses 46.31 282.5 654.01 2,083.4 4,647.9 9.081.0 20,540.5 32,645.8Net Operating Income (Loss) 3.6 -59.3 98.4 -148.2 -205.3 1,159.8 2,080.3 -1,938.3Interest Expenses 4.8 16.5 220.0 105.0 212.0 122.0 -89.5 5,673.6

|Exchange Gain (Loss) _ _ __________15.6 578.3

Net Income (Loss) -1.2 -75.8 -121.6 -253.2 417.3 1,037.8 2,185.4 -7,033.6

|Avwage Plant In Operation (Shs million) 25.31 67.5r 132.41 814.41 1,803.01 114.809.61 228.525.1 394,561.7

Rate Of Retum (%) 14%1 -88%| 74%1 -18%1 -11%| 1%| 1%| 0%9

Source: UEB 's audited accounts

Table 10. BALANCE SHEET AS OF DECEMBER 31, FOR THE YEARS 1986 - 93UGANDA ELECTRICITY BOARD (UEBI

1986 1987 1988 1989 1990 1991 1992 1993ASSETS SHs mlaon SHs million SHs mi0n SHs milion SHs milion SHs miAWn SHs mil6lon SHs milan

Fixed AssetsPlant In Operation 30.7 65.0 186.6 1088.9 2262.5 227591.4 230795.2 564505.0Transport, Tools & Eqt. 9.7 87.4 105.5 629.3 823.6 5912.9 6139.3Accmulated Depreciation 15.1 42.8 136.8 244.7 953.7 104.7 7144.6 11084.4

Net Plant in Operation 25.3 109.6 155.2 1473.5 2132.4 227486.7 229563.5 559559.9Plant Under Construction I _ 464.6 7289.7 22953.3 65529.3 97305.6 19680.7Net Fixed Assets 25.3 109.6 619.8 8763.1 25085.8 293016.0 326869.1 579240.6

[Investments 0.041 0.041 0.041 0.041 0.041 0.041 0.041 0.39

CuTent Asets .Cash 1.0 3.4 269.2 1194.7 2360.1 5680.1 4848.1 5470.3Accounts Recievable 35.7 128.3 464.5 829.4 2983.6 4756.0 11949.9 22256.1Stores 15.0 41.2 125.3 1110.8 5975.4 5170.8 5170.1 9656.4Total Cunent Assets 51.7 172.9 859.0 3134.9 11319.1 15606.9 21968.1 37382.8Total Assets 77.1 282.5 1478.9 11898.1 36404.9 308622.9 348837.3 616623.8

EQUITY & LIABILITIESRetained Earnings(Deficitl 33.6 -10.3 4.2 709.4 408.4 221947.5 40000.0 50416.7Revaluation Surplus 2727.9 227819.9 463167.8Long Term Debt 23.7 140.5 912.0 7291.2 29415.4 62914.2 52189.9 76423.8Pension Fund 2.4 5.5 8.9 11.8 12.2 36.4 99.8 227.3Total Equity & LIabilities 59.7 135.7 925.1 8012.4 29836.0 287626.0 320109.7 590235.6

CURRENT LIABILITIESCreditors & Accruals 13.4 88.6 332.2 3515.6 5925.2 20216.1 28726.5 19609.7Consumer Deposits 0_7 3.5_ 6-9L 19.1_ 34.6_ 57.2| r 122.7Accrued Interest 2.1 16.1 213.6 349.9 607.9 722.5 _ 6654.7Accrued Taxes 1.1 1.1 |_1.1 _ _ __ _ _ _ __ 1.1 1.1Bank Overdraft 37.5Total Current Liabilities 17.3 148.8 553.8 3885.7 6568.9 20997.0 28727.6 26388.2Total Equity & Liabilities 77.1 282.5| 1479.01 11898.1 36404.91 308622.91 348837.3 616623.8

[Current Ratio 3.0 1 1.2 1 1.6 0.8 1.7 0.7 0.8 1.4|DebtEquity Ratio (%) 40%1 104%1 99%1 91%1 99%1 22%1 16%| 13%

Source: UEBs audited accounts

Table 11. FUNDS FLOW STATEMENTS FOR YEARS ENDING DECEMBER 31, 1986-93UGANDA ELECTRICITY BOARD (UEB)

1986 1987 1988 1989 1990 1991 1992 1993Intemal Generation SHs milon SHs million SHs million SHs million SHs million SHs million SHs milOon SHs miKan

Net operating income 3.6 -59.3 98.4 -148.2 -205.3 1,159.8 2,080.3 -1,938.3Depreciation & Provision 2.1 6.11 16.6 32.0 189.4 201.3 5,504.4 11,069.8Pension fund 0.5 3.0 3.5 2.8 0.4 24.2 63.5 127.4Extraordinary items 13.3 31.9' 136.1 958.4 116.2 1,281.8 974.8 4,559.2

Total Intemal Generation 19.5 -18.3 254.6 845.0 100.8 2,667.0 8,623.0 13,818.1

Operating & Construction Requirements

Debt service 5.0 16.5 250.7 323.0 596.0 242.0 1,317.7 5,673.6Increase/decrease in working capital 7.7 8.5 438.6 -904.2 5,774.6 -10,117.8 -2,081.9 17,064.4Total operating requirement 12.7 25.0 689.3 -581.2 6,370.6 -9,875.8 -764.2 22,738.0

Available from operationa 6.8 -43.3 -434.7 1,426.2 -6.269.8 12,542.8 9.387.1 -8,919.8Foreign exchange losses (unrealised) 224.4 488.8 911.9 356.9 15.6 0.0Investment written off 0.0 0.0 0.0 0.0 0.0 0.0Interest accrued 0.1 13.9 197.5 130.4 258.0

Construction Requirements 21.6 93.8 609.8 8,266.4 13,610.2 47,079.7 29,427.6 33,172.4

Balance to be financed by: 14.7 123.1 622.6 6,221.0 18,710.1 34,180.0 20,024.8 42,092.3

Equity 10,416.7IDA 1560 - UG 116.8 528.4 2,449.8 7,344.2 12,554.5 3,229.0 11,041.3IDA P617 - UG 0.0 0.0 0.0 637.2IDA 1434 - UG

CDC 2,903.5 4,435.1 3,159.9 2,942.7

ODA Credit 764.5 6,061.3 7,337.4 4,941.7 4,265.7ODA Technical Assistance Grant 356.9NDF 765.1 2,828.7 1,133.7NORAD 1,932.4

OTHERS 7.2 8.0 _ 9,445.0 1,843.9 13,206.3Capital contribution to fixed assets 7.3 3.4 82.8 91.1 497.1 895.5 1,640.1 2,028.6Consumer's deposits 0.2 2.8 3.4 12.1 15.6 22.6 29.2 0.0

TOTAL FUNDS 14.7 123.1 622.6 6,221.0 18,710.1 34,180.0 20,024.8 42,092.3

Stores -6.4 26.1 84.2 985.4 4,864.6 -804.6 -0.7 4,160.7Debtors 13.2 92.6 336.2 364.9 2,154.2 1,772.4 7,193.9 10,175.5Creditors 0.6 -75.2 -285.1 -3,180.0 -2,409.6 -14,405.5 -8,443.0 2,106.0

Movemnet in net liquid funds I_I

Bank and Cash balances 0.3 2.5 265.7 925.5 1,165.4 3,320.0 -832.0 622.2Bank Overdraft 0.1 -37.5 37.5 _______

Increase or Decrease in Working Capital 7.7 8.5 438.6 -904.2 5,774.6 -10,117.8 -2,081.9 17,064.4

|Debt Service Coverage 3.91 -1.1| 1.0 2.61 0.21 1 1.0 6.51 2.4Intemal Contribution to Construction 0.9s -0.21 0.41 0.1 0.0 0.1 0.3 0.4

Source: UEBs audited accounts

IMAGING

Report No: 15194Type: PCR

Documents

World Bank Document · ... Rehabilitation and uprating of ten turbo generator units and their associated gates, structural repairs to the power house, dam and dam gates at the Owen