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Document of The World Bank

Report No: ICR00003594

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IDA-45360)

ON A

CREDIT

IN THE AMOUNT OF SDR 20.2 MILLION (US$ 30 MILLION EQUIVALENT)

TO THE

REPUBLIC OF HONDURAS

FOR A

POWER SECTOR EFFICIENCY ENHANCEMENT PROJECT (PROMEF)

September 03, 2015

Energy and Extractives Country Management Unit for Central America Latin America and the Caribbean

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CURRENCY EQUIVALENTS

Exchange Rate Effective November 24, 2015

Honduras Currency Unit = Lempira 1.00 Lempira = US$ 0.05

US$ 1.00 = 22.18 Lempiras

FISCAL YEAR January 1 – December 31

ABBREVIATIONS AND ACRONYMS

AFESA-BEFESA Private Company hired by UNDP COPs Project to support and perform PCBs disposal

AMR automated meter reading AMRS automated meter reading system CABEI Central American Bank for Economic Integration CESCCO Centro de Estudios y Control de Contaminantes CMS commercial management system

CPME Comisión Presidencial de Modernización del Estado (Government’s Presidencial Comission for the State’s Modernization)

CPS Country Partnership Strategy CRI Cash recovery index CRMIS corporate resources management information system ENEE Empresa Nacional de Energía Eléctrica FM Financial management GDP Gross domestic product GIS geographic information system GoH Government of Honduras H&S Health and Safety ICR Implementation Closing Report IDA International Development Association IDB Inter-American Development Bank IMF International Monetary Fund IPP independent power producers IRMS Incidence Recording Management System ISR Implementation Status Report PAD Project appraisal document PCB Polychlorinated biphenyls PCU Project Coordination Unit PDO Project development objective PEU Project Executing Unit

PRISMA Proyecto de Recuperación del Ingreso Sostenible en base a medición Automática, unit for the sustainable recovery of revenues based on AMR

PROMEF Proyecto de Mejora de la Eficiencia SAIDI system average interruption duration index SAIFI system average interruption frequency index SDP Secretaría de la Presidencia (Ministry of the Presidency) SDR Special Drawing Rights SEFIN Ministry of Finance SEMEH ENEE’s outsourced metering service provider

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SERNA Secretaría de Recursos Naturales y Ambiente (Ministry of Natural Resources and Environment)

UAP Unidad Administradora de Proyecto (Project Management Unit) UNDP United Nations Development Program UNDP COPs United Nations Development Program – Communities of Practice

Senior Global Practice Director: Anita Marangoly George Practice Manager: Antonio Barbalho

Project Team Leader: Mariano Gonzalez Serrano ICR Team Leader: Mariano Gonzalez Serrano

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REPUBLIC OF HONDURAS Power Sector Efficiency Enhancement Project

CONTENTS

Data Sheet A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Project Performance in ISRs H. Restructuring I. Disbursement Graph

1. Project Context, Development Objectives and Design ............................................. 12 2. Key Factors Affecting Implementation and Outcomes ............................................ 15 3. Assessment of Outcomes .......................................................................................... 20 4. Assessment of Risk to Development Outcome......................................................... 26 5. Assessment of Bank and Borrower Performance ..................................................... 27 6. Lessons Learned........................................................................................................ 30 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners........... 31 Annex 1. Project Costs and Financing .......................................................................... 32 Annex 2. Outputs by Component.................................................................................. 34 Annex 3. Economic and Financial Analysis ................................................................. 37 Annex 4. Bank Lending and Implementation Support/Supervision Processes............. 41 Annex 5. Supporting Tables, Figures and Graphs ........................................................ 42 Annex 6. Stakeholder Workshop Report and Results................................................... 47 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ..................... 48 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ....................... 61 Annex 9. List of Supporting Documents ..................................................................... 62

MAP

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DATA SHEET Republic of Honduras

Power Sector Efficiency Enhancement Project (PROMEF) (P104034) LATIN AMERICA AND CARIBBEAN

Energy & Extractives .

Report No: ICR00003594

A. Basic Information

Country: Honduras Project Name:

Power Sector Efficiency Enhancement Project (PROMEF)

Project ID: P104034 L/C/TF Number(s): IDA-45360 ICR Date: 12/08/2015 ICR Type: Core ICR

Lending Instrument: SIL Borrower: REPUBLIC OF HONDURAS

Original Total Commitment:

XDR 20.20M Disbursed Amount: XDR 18.68M

Revised Amount: XDR 18.68M Environmental Category: B Implementing Agencies: The National Electric Power Company (Empresa Nacional de Energia Electrica - ENEE) Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual Date(s)

Concept Review: 10/29/2007 Effectiveness: 06/30/2010 06/29/2010

Appraisal: 09/08/2008 Restructuring(s): 06/17/2010 10/04/2011 12/19/2013

Approval: 01/22/2009 Mid-term Review: 05/20/2013 06/05/2013 Closing: 12/31/2013 06/30/2015 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Moderately Unsatisfactory

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Risk to Development Outcome: Substantial Bank Performance: Moderately Satisfactory Borrower Performance: Moderately Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Moderately Unsatisfactory Government: Moderately

Unsatisfactory

Quality of Supervision: Moderately Unsatisfactory

Implementing Agency/Agencies: Moderately Satisfactory

Overall Bank Performance:

Moderately Unsatisfactory

Overall Borrower Performance:


C.3 Quality at Entry and Implementation Performance Indicators

Implementation Performance Indicators QAG Assessments

(if any) Rating

Potential Problem Project at any time (Yes/No):

Yes Quality at Entry (QEA):

None

Problem Project at any time (Yes/No):

Yes Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:


D. Sector and Theme Codes

Original Actual Sector Code (as % of total Bank financing) Energy efficiency in Heat and Power 30 30 Public administration- Energy and mining 3 3 Transmission and Distribution of Electricity 67 67

Theme Code (as % of total Bank financing) City-wide Infrastructure and Service Delivery 15 15 Corporate governance 28 28 Urban services and housing for the poor 57 57 E. Bank Staff

Positions At ICR At Approval Vice President: Jorge Familiar Calderon Pamela Cox Country Director: J. Humberto Lopez Laura Frigenti

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Practice Manager/Manager:

Antonio Alexandre Rodrigu Barbalho

Philippe Charles Benoit

Project Team Leader: Mariano Gonzalez Serrano Fernando Lecaros ICR Team Leader: Mariano Gonzalez Serrano ICR Primary Author: Beatriz Arizu de Jablonski F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The project development objective is to improve ENEE's operational and financ ia l performance, thus contributing to the sustainability of the power sector in Honduras. Revised Project Development Objectives (as approved by original approving authority) (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Increase in cash recovery index (CRI) in each of the three distribution regions of ENEE

Value quantitative or Qualitative)

0.63 10% improvement from baseline

8% improvement from baseline -

0.67

Date achieved 12/31/2012 01/23/2009 10/04/2011 06/30/2015 Comments (incl. % achievement)

Indicator 2 : Annual decrease in system average interruption duration index (SAIDI) Value quantitative or Qualitative)

13.55 per client Annual improvements 23.12

Date achieved 12/31/2012 01/23/2009 06/30/2015 Comments (incl. % achievement)

Baseline calculated as the average of 3 months prior to Incidence Recording Management System (IRMS) implementation.

Indicator 3 : Annual decrease in system average interruption frequency index (SAIFI) Value quantitative or Qualitative)

20.22 per client Improvement on an annual basis 33

Date achieved 12/31/2012 01/23/2009 06/30/2015

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Comments (incl. % achievement)

Baseline calculated as the average of 3 months prior to Incidence Recording Management System (IRMS) implementation.

Indicator 4 : Electricity losses per year in project area (core indicator)

Value quantitative or Qualitative)

22.5% 15% 31.18%


The indicator was added at second restructuring. The GoH subsequently advised the baseline should be 27%, as the previous value only included distribution, and not full losses of the system, but the indicator was not formally revised.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Number of AMRs installed Value (quantitative or Qualitative)

0 50000 5000 of the largest consumers

4810

Date achieved 01/23/2009 01/23/2009 04/26/2013 06/30/2015 Comments (incl. % achievement)

While the third restructuring paper did not indicate, in the text, a change in the indicators, the results matrix was revised to reflect the new target.

Indicator 2 : CMS, IRMS and CRMIS in place Value (quantitative or Qualitative)

System not in place System in place and satisfactorily working

Systems in place and satisfactorily working


Indicator 3 : Number of ENEE employees trained to use the CMS, IRMS, and CRMIS Value (quantitative or Qualitative)

0 - CMS, 0 - IRMS, 0 - CRMIS

50 - CMS, 10 - IRMS, 20 - CRMIS

450 - CMS, 37 - IRMS, 250 - CRMIS


Indicator 4 : Number of customers in CMS and IRMS database Value (quantitative or Qualitative)

0% 40% 66%

Date achieved 01/23/2015 06/30/2015 06/30/2015

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Comments (incl. % achievement)

Indicator 5 : Number of customer claims related to billing

Value (quantitative or Qualitative)

Average of the 3 month period following implementation of the CMS in main office s/whole company. - 90.17%

Improvement in the average semiannually value compared to the previous six months

95%


The GoH did not report this information in a periodic manner

Indicator 6 : Number of transformers replaced Value (quantitative or Qualitative)

0 1000 1044


Indicator 7 : Number of PCB-containing equipment replaced Value (quantitative or Qualitative)

0 350 366


Indicator 8 : Number of heavy vehicles acquired Value (quantitative or Qualitative)

0 30 31


Indicator 9 : Setup and operation of separate business units


Separate business units do not exist

Separate business units operational

Business units legally approved but not yet operational.


Funding to operationalize the unit in the draft budget for 2016.

Indicator 10 : Setup and operation of the Distribution and Commercialization unit

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Distribution and Commercialization unit do not exist

Distribution and Commercialization unit operational

Commercial and Distribution Unit established and in the process of appointing staff


Indicator 11 : Competitive selection of key personnel in the distribution and commercialization unit (3 managers, 10 key staff)


Distribution and commercialization units do not exist

Key staff selected an in place

Selection of staff completed, but appointment to positions is still pending.


Indicator 12 : Consumer satisfaction and perception


Rate of acceptance of each group (e.g. consumers, NGOs, civil society organization) at time of first survey. - general perception is good

Improvement in the average annual value compared to the previous year

Perception in general was seen as regular


Information only reported at the end of the project. The Bank has questions regarding the methodology and consistency of the data presented.

G. Ratings of Project Performance in ISRs

No. Date ISR Archived DO IP

Actual Disbursements (USD millions)

1 04/23/2009 Satisfactory Satisfactory 0.00 2 11/19/2009 Satisfactory Satisfactory 0.00

3 05/17/2010 Moderately Satisfactory Moderately Unsatisfactory 0.00

4 12/31/2010 Moderately Satisfactory Moderately Satisfactory 1.00 5 06/08/2011 Moderately Satisfactory Moderately Satisfactory 1.00 6 12/10/2011 Moderately Satisfactory Moderately Satisfactory 1.04 7 05/29/2012 Moderately Satisfactory Moderately Satisfactory 1.12 8 01/23/2013 Moderately Satisfactory Moderately Satisfactory 5.92 9 09/16/2013 Moderately Satisfactory Moderately Satisfactory 9.82

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10 04/05/2014 Moderately Satisfactory Moderately Satisfactory 18.30 11 10/02/2014 Moderately Satisfactory Moderately Satisfactory 22.11

12 02/18/2015 Moderately Unsatisfactory Moderately Satisfactory 25.42

H. Restructuring (if any)

Restructuring Date(s)

Board Approved

PDO Change

ISR Ratings at Restructuring

Amount Disbursed at

Restructuring in USD millions

Reason for Restructuring & Key Changes Made DO IP

06/17/2010 N MS MS 1.00 Need to adjust to new implementation arrangements.

10/04/2011 N MS MS 1.04 Government requested partial cancellation of funds.

12/19/2013 N MS MS 17.40 Extend the project closing date by 18 months.

I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

1. Country economic context: Honduras is a lower middle- income country, one of the slowest-growing economies and poorest countries in the Central America region. In 2007, the per capita income was US$1,600. Macroeconomic conditions weakened due to declining performance of state owned enterprises, and increasing subsidies to transport, fuel and electricity to compensate high prices in oil international markets. In 2007, the state-owned integrated national power utility (National Electric Power Company - ENEE) had financial losses representing over 2 percent of GDP (approximately US$ 141 million), which could threaten macroeconomic stability and hamper poverty reduction efforts. Poverty and inequity remain challenges with indicators that hardly changed since 1997: 64 percent of the population living in poverty and 45 percent in extreme poverty1.

2. Power sector structure and tariffs. ENEE is the dominant company in the power sector, owning all transmission and distribution systems and about 40 percent of generation, with private independent power producers (IPPs) owning the remaining share of power plants. The tariffs were frozen since 2006 and until January 2008, with two adjustments in 2008 on the fuel component of the tariff. The tariff increase was about 34 percent compared to 2007 level, covering the operational deficit of ENEE.

3. Government Strategy and challenges. The Government issued an Emergency Decree in June 2007 to restore sustainable electricity supply and ENEE’s financial health, and strengthen the institutions of the electricity sector. The ambitious goals and plans included implementation of a loss reduction program to reduce total losses from 20.7 percent in 2007 to 10 percent by 2013, and non-technical losses from 12 percent to 2 percent by 2011; improve quality of electricity supply and customer services; rehabilitation and strengthening of distribution networks; reduction of nonpayment to 2 percent; and reviewing/renegotiating the metering, billing and collection outsourcing contract between ENEE and SEMEH (Servicio de Medición Eléctrica de Honduras). In June 2008 the Government had to clear ENEE’s arrears with IPPs, but arrears started to grow again as the fundamental problems had not been addressed.

1.2 Original Project Development Objectives (PDO) and Key Indicators

4. The development objective of the project is to improve ENEE’s operational and financial performance, thus contributing to the sustainability of the power sector in Honduras.

5. The PAD includes three key performance indicators, one to measure financ ia l performance and two to measure operational performance:

o Increase in CRI in each of the three distribution regions of ENEE;

1 About 74 percent of the poor and 86 percent of the extreme poor lived in rural areas.

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o Annual decrease in system average interruption duration index (SAIDI); and o Annual decrease in system average interruption frequency index (SAIFI)2.

6. The Bank team left unquantified baselines of some indicators, due to the lack of

reliable information at project preparation, and decided to postpone their calculat io n after implementation of information systems in Component 1. (see table 1, Annex 5)

1.3 Revised PDO and Key Indicators, and reasons/justification 7. The project faced three restructurings during its implementation period (see table

7, Annex 5). The PDO was not revised in any of the restructurings as it was deemed relevant despite the evolution of the power sector in Honduras since the design phase.

8. The Bank added total losses as a core indicator in the ISRs to facilitate follow up of the Country Partnership Strategy 2012-2015, which included this indicator. This indicator is used to calculate the CRI and publically disclosed by ENEE as part of its internal performance control.

9. The second restructuring reduced the CRI target to 8 percent of the baseline instead of the original 10 percent. This target reduction was consistent with the delays in effectiveness and project implementation, and the negative evolution of ENEE´s loses before implementing the relevant systems (see Figure 3).

1.4 Main Beneficiaries, 10. The primary beneficiary was ENEE, through rehabilitation of its distribution networks

and incorporation of modern management and automatized systems to improve its operational and commercial performance, and strengthen its weak financial situation.

11. The electricity end-consumers would benefit from better quality and reliability of services. Indirectly, the elimination of Polychlorinated biphenyls (PCBs) in the transformers has an implicit benefit on public health and the environment in general.

12. Finally, the Government of Honduras may benefit from a reduced need of periodic public transfers to ENEE and the alleviation of the pressure on the Budget.

1.5 Original Components 13. The Project consists of three complementary components to improve ENEE’s

operational and commercial performance, and governance (Intermediate Indicators and Monitoring Framework are detailed in Tables 2, 3 and 4, Annex 5).

14. Component 1: improving ENEE’s commercial and corporate resource management, through four activities: • Installation of automated meter reading system (AMR) equipment that allows

remote metering of consumption and disconnection or reconnection of the clients,

2 SAIDI and SAIFI are standard performance indicators used internationally

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including: (1) completing ENEE's ongoing effort to install AMR systems for the existing consumers in the "industrial" and "high consumption" categories; and (2) extending the installation of AMR to low voltage consumers (residential and commercial) starting with customers with a monthly consumption above 400 kWh;

• Installation of a new automated commercial management system (CMS) including: (1) the acquisition and implementation of the new CMS; (2) the creation and maintenance of a constantly updated and reliable customer database; and (3) the creation of a call center;

• Implementation of incidence recording management system (IRMS) including: (1) the acquisition and implementation of the new IRMS; (2) the creation of three distribution operation centers in the Recipient's municipalities of Tegucigalpa, San Pedro Sula and La Ceiba; and (3) the building of an installations and supply database which will include data on medium-voltage networks and on each customer's connection to the corresponding transformation station; and

• Development and implementation of a corporate resources management information system (CRMIS) for ENEE, including specific modules for: (1) accounting and finance; (2) integrated human resources management; (3) purchases and contracts; (4) logistics; (5) asset management; (6) corporate planning; and (7) regulation.

15. Component 2: Rehabilitation of distribution networks, including: (i) replacement of transformers, purchase of related distribution equipment, and disposal of PCBs found in replaced PCB-containing transformers; and (ii) purchase of maintenance equipment, spare parts and materials for distribution networks, mainly heavy vehicles.

16. Component 3: Strengthening ENEE’s institutional capacity and corporate governance through four sub components:

• 3.1 Strengthening of the governance in the Recipient's power sector, includ ing specific actions agreed with the Association and set forth in the Operational Manual which are aimed at: (1) enhancing transparency, accountability and attention to ENEE's customers; (2) improving ENEE's corporate governance; and (3) strengthening the fiduciary aspects of ENEE's operations.

• 3.2 (1) Carrying out an analysis of the long-term financial sustainability of ENEE, including but not limited to, an analysis as to the required tariff and subsidy structure to support such sustainability; and (2) the development of a strategy and business plan for a new distribution and commercialization unit.

• 3.3 Implementation of a communication, outreach and participation program, including: (1) outreach to the consumer and consumers' participation to save energy and reduce electricity thefts and illegal connections; (2) communica t ion and transparency efforts to renew communication procedures establishing quality standards and an information system that will enable users to monitor and provide feedback on ENEE's performance; and (3) institutional strengthening through the provision of training and technical assistance to improve coordination among all areas in ENEE, both central and regional, in the area of customer service.

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• 3.4 (1) Project management, including studies and consultancies, Training, Operating Costs, acquisition of equipment and other goods needed for Project implementation, and minor office renovations/refurbishments; and (2) carrying out of monitoring and evaluation activities and audits.

1.6 Revised Components 17. Components were not revised although the scope of activities under Components

2 and 3 were adjusted. At the request of the Government3, funding was reduced by SDR 1.52 million (Component 2 by SDR 0.32 million, Component 3 by SDR 0.82 million, and contingencies by SDR 0.38 million) in the second restructuring in September 2011. The Bank team together with ENEE, tailored a scope reduction aiming at mitigating potential impacts to the PDO. CRI and AMR targets were cut to eight percent and 5,000 respectively (See Table 5, Annex 5). In order to mitigate potential impacts to the PDO, the installation of new AMRs was redirected to the largest consumers representing around 45 percent of billing, which is similar to the PAD consideration of targeting around 50 percent of consumption.

1.7 Other significant changes 18. One of the two implementing agencies set at project preparation was withdrawn

to avoid unnecessary administrative burden. The implementation arrangements in the PAD included two separate agencies: one under the President’s office responsible for fiduciary matters, and another in ENEE responsible for technical matters. A restructuring in 2010 switched the “fiduciary” implementing agency to a different unit, under the President’s office. A second restructuring in 2011 consolidated all responsibilities into a single implementing agency in ENEE.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry 19. The Project design was analytically grounded and aligned with the Government

Strategy in the power sector. The Government Strategy and the findings and recommendations in the Bank’s “Power Sector Issues and Options” report (July 2007) were the basis for the Project design. Lessons learned from similar projects were taken into consideration and the design focused on the quality of service, ambitious loss reductions and improvements in governance, including the restructuring of ENEE. The CMS and IRMS would support distribution and commercial operations, while the CRMIS would enhance the control functions in the entire company.

20. The Bank intervention in the Energy sector responded to a coordinated effort with

3 The GoH requested on July 2011 partial cancellation of resources (DGIP-190/2011) for three Bank financed projects, IDA 4536-HN, IDA 4583-HN and IDA 4465-HN, in order to release funds for a Development Policy Credit requested by the Government.

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other donors. The rationale for the Bank´s involvement in ENEE´s performance enhancement plans was based on its experience in supporting the introduction of modern systems and technologies to reduce electricity losses. The PAD describes the agreement reached with other donors by which the IDB committed to support transmission and the Central American Bank for Economic Integration (CABEI) would finance the rehabilitation of the distribution networks.

21. To mitigate the risks identified in the PAD, some activities within Component 3 provided flexibility to adapt to potential changes. Component 3 in the PAD covered a broad range of activities, which allowed for flexibility and proved to be key to respond to an evolving environment, like the support provided to the sector reform promoted by the new Electricity Law enacted in 2014. The downside of this adaptation and the transfer of resources is that some activities initially envisaged within Component 3, like the outreach and communication campaigns, were not finally implemented.

22. Other mitigating measures, like the alignment with the Government Strategy in the Power sector, proved ineffective. The project was considered in the PAD as “high risk, high reward”. The alignment with the Government Strategy was expected to mitigate ownership risks, but proved ineffective as soon as the Government changed.

23. The initial design with two implementing agencies created an administrative burden and delays in implementation. The Project’s original design had a project coordination unit (PCU) in the Presidential Commission for State Modernizat ion (CPME) responsible for fiduciary matters, monitoring and evaluation, and overall coordination; and a project execution unit (PEU) in ENEE responsible for technica l matters. Although the allocation of procurement and financial management to CPME was justified in mitigating procurement risks and possible delays in implementat ion, the procurement risk was still rated high, as CPME had no experience in procurement of large contracts and small works 4, and had to rely on consultants to strengthen management and institutional weaknesses. Implementation proved that this design caused additional delays and unnecessary administrative complexities, and two of the three project restructurings introduced modifications to the implementing agencies arrangements until finally setting a single unit within ENEE.

24. Project success highly depended on timely implementation of Component 1. To ensure integration, the three systems under Component 1 were procured as a single package, requiring sophisticated bidding documents, which was a risky approach and took significantly more time to finalize than originally anticipated. The initial tender failed and had to be re-launched with a different scope. In this case, the optimal solution, from an economic perspective and to ensure a correct system integrat ion, turned out to be unrealistic and suboptimal, and added up to a 2-year delay.

2.2 Implementation 25. Changes in political and legal framework context resulted in significant delays in

4 Supporting consultants were envisaged to strengthen the implementing agencies.

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contract effectiveness and project implementation. The complex political situatio n in Honduras between June 2009 and January 2010, up until a few months after the new Government was in place, delayed project effectiveness and project implementation of institutional arrangements, and modified the context and initial support to the Project. When project implementation gained momentum, the Government introduced a new Electricity Law (2014) that mandates the restructuring and unbundling of ENEE into a holding company with subsidiaries for each activity. In addition, the Government set specific Trust Funds per activity, with a mandate to find an international investor with capacity to operate the different business of the unbundled ENEE. The Project had to adjust to the new environment, facing additional delays. The uncertainty created in the sector by the new Law, with unclear operational arrangements between ENEE and the new operators to come, introduced additional complexity to project implementation.

26. Repeated changes in ENEE’s management burdened the Project implementation. Management in ENEE changed five times during the project life cycle (see Table 6, Annex 5). Thus, the Bank had to constantly re-engage and re-build support during implementation, and the project suffered from delays in decision making.

27. The Bank worked in coordination with the IMF to ensure alignment of program´s requests in the Power sector and speed up Project implementation. The new IMF program5 is consistent with the PDO and loss reduction priority. Through the IMF program, Project activities were backed by the IMF and prioritized by the Government.

28. The Bank has been vigilant to ensure sustainability of the investments of the Project. With the new Electricity Law enacted in 2014, there is uncertainty on the final set up of ENEE and the arrangements with the new operators. The Bank has insisted in the need of ring-fencing the investments and the Government has committed to this endeavor. Currently there are conversations on a new follow-up operation. Project Restructurings

29. The Project was restructured three times to modify and simplify administrative arrangements (implementing agencies), reduce IDA funding, and extend the closing date. Although intermediate indicators showed delays, no new measures or modification of indicators were adopted to mitigate implementation delays and risks to achieve the PDO. Table 7, in Annex 5, summarizes the three restructurings.

30. The reduction of funding in the second restructuring was allocated to the lowest impact activities. The Government requested to reallocate resources from PROMEF for a new Development Policy Credit, affecting Component 3 (above 50%), Component 2 (reduced funding for maintenance vehicles), and contingency amounts. Component 1 was not affected and there was no impact on counterpart funds. The PEU operational and financial impact assessment (report August 2011) considered that the proposed credit reduction would not affect the achievement of the PDO.

31. The third restructuring extended the closing date to complete implementation of the systems and start the operation of the distribution and commercialization unit.

5 IMF program 2014-2017 for the Government to reduce fiscal deficit, in particular ENEE’s deficit

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The Bank recognized the risk of new approaches being discussed to introduce private sector participation, and required confirmation of the Government’s commitment to the Project. The restructuring paper was optimistic in considering that the PDO and outcome indicators could be achieved by June 2015. The restructuring lost the opportunity to revise the indicators that could no longer be achieved.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization 32. Several baselines were unquantified at entry and remained undetermined

throughout most of the implementation phase. Due to ENEE´s lack of reliable information systems, the team decided to postpone the setting of baselines until investments under Component 1 were performed and systems implemented, establishing in the PAD that Project monitoring data would be collected from those systems.

33. Lack of quantitative baselines resulted in meaningless indicators, preventing adequate monitoring of progress in implementation. Less than 12 months before the final closing date, the results matrix still had empty baselines that required implementation of the IRMS. During this period, the Project showed an increased focus on M&E, and the PEU used existing data in ENEE to retroactively calculate baselines and progress of indicators, which showed increasing losses and a lower CRI. Final key performance targets were not achievable and it was too late to react and propose alternatives. The indicators did never played their role as a supervision tool and the Project was blind regarding the deterioration of key performance indicators while waiting for implementation of the investments under Component 1. The monitoring activities focused on the number of AMR procured and installed, with some confusion on targets being declared as achieved by PEU, when AMRs had been procured, but still not all installed. 3,600 of the targeted 5,000 AMR, were expected to be bought with PROMEF credit proceeds and the remaining 1,400 should come from a former purchase made by ENEE and be reallocated.

2.4 Safeguards and Fiduciary Compliance 34. Safeguards Compliance. The project only triggered OP 4.01. ENEE has an

environmental unit which provided Moderately Satisfactory support to the project. For the activities financed for Component 2 (construction of a storage place for contaminated PCB material), the Bank closely reviewed the design and construction of the works and provided examples according to international standards. The environmental license for the works was granted by the Ministry of Environment (SERNA) and the EMP was reviewed and found acceptable to the Bank. During implementation of this project the Bank provided guidance on improving ENEE´s environmental management practices of electrical residues.

35. The long term environmental and health impact resulting from the PCB disposal and processes and manuals established under Component 2 go beyond the life of the Project. ENEE’s existing operational and environmental practices in substations with potentially contaminated electrical waste and storage of old equipment were

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suboptimal. The project supported identification, replacement and storage for disposition of equipment and oil contaminated with PCBs. At the time of the PAD, it was estimated that there were at least 500 PCB-contaminated units requiring special environmental handling and disposal. The project found that most of PCB-contaminated equipment was no longer in use. Delays in the construction of a permanent storage building, specifically designed to safely store the PCB-contaminated transformers, increased the probability of leakages. The Bank and the PEU followed-up and the storage was completed by Project closing date.

36. There were delays in ENEE completing inventory and temporary storage, but the Project benefited from collaboration with the Ministry of Natural Resources and Environment (SERNA), with UNDP support. Shortages in counterpart funding delayed the temporary storage of equipment and the inventory of PCB-contaminated transformers. The risk of delays in disposition of PCB was mitigated by ENEE Cooperation Agreement with CESCCO, the agency in SERNA responsible for the National Plan for Elimination of PCBs, which supported finalizing ENEE Action Plan for Substitution and Management of Transformers with PCBs, including storage and elimination of PCB. Complementing the Project’s PCB efforts, UNDP COPs 2 project contracted a specialized international firm (AFESA-BEFESA) to carry out the transport and destruction or final disposal6 of equipment or residues with PCBs. BEFESA provided local capacity building in handling of PCB contaminated material, resulting in the definition of relevant procedures for the management of contaminated transformers, and operational and contingency plans in the storage building.

37. The Bank ensured best Health and Safety standards during the construction of the storage building. The team realized during a routine site visit that the works were not being carried out in accordance with Bank´s standards on Health and Safety (H&S) for the workers. The team reported the outcomes of the visit to ENEE requesting immediate action to restore the situation. The PEU was also requested to intensify site monitoring activities. ENEE provided additional resources to better monitor the works, and requested the contractor to implement additional H&S measures and to have an H&S specialist on site. The PEU also intensified their supervision and the Bank contracted additional support from a Safeguards consultant to improve its own control.

38. At the start of the project, there were moderate shortcomings in financial management (FM), which were addressed for the timely and reliable provision of information. Performance was downgraded in 2012 due to the inability to prepare acceptable FS and IFRs and the first audit report for the project (August 2010-December 2011) delayed more than five months. Capacity building and Bank´ support addressed those issues, and allowed the project to close with clean audits and no pending FM issues.

2.5 Post-completion Operation/Next Phase

6 Following international standards such as Stockholm Convention and Basilea Convention, and Code IMDG on transport of dangerous residues.

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39. The Project built capacity in ENEE for the continued operation and use of the new systems implemented. The Project exceeded the initially envisaged number of ENEE staff trained in the new systems. The unit for the sustainable recovery of revenues based on AMR (PRISMA), operating since 2014, has developed expertise in managing the system and evaluating results. Training was also provided for the handling of PCB-contaminated materials, in line with international standards.

40. There is a dialogue with the Government to analyze a potential new operation in the Power sector in Honduras, realizing the relevance of PROMEF in modernizing the ENEE. The new potential operation is envisaged to include a component to support the adaptation of the systems installed through PROMEF to the new unbundled ENEE, to reflect the new reality and operational needs of the different subsidiaries to ensure the continuous use of the systems implemented.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation Rating: Moderate Relevance of Objectives: High Relevance of Design: Moderate Relevance Implementation: Moderate 41. The Project objectives remain highly relevant. These objectives responded to the

analysis of the Power sector and issues identified at the time of preparation remain as challenges and priorities for the power sector’s sustainability and the country’s macroeconomic stability. ENEE´s level of debt and arrears in payment to IPPs continued to increase during the last few years. The IMF agreement with the Government requires the reduction of the fiscal deficit7 , and improvements in the power sector to become self-financing as part of the fiscal deficit reduction. Targets include a five percent reduction of losses in the period 2015-2017, to which the Project has contributed with the provision of adequate tools to ENEE, like the installed AMR and the creation of the PRISMA unit. The Project has also contributed to improve ENEE´s control over its assets through the implementation of the CRMIS, which will provide timely information to the decision makers, homogenize the information acquisition and reporting systems and allow ENEE to start producing auditable Financial Statements8 in line with best international practices on transparency.

42. The design and components of the Project are relevant to achieving the PDO, and

7 In 2013, ENEE was responsible for nearly half of the budget deficit.

8 ENEE failed to get its Financial Statements audited in 2010. The lack of reliable information and acceptable internal control procedures were the central arguments raised by the Auditing Company for not subscribing ENEE´s financial statements.

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are linked to the intermediate outcome indicators. To fight non-technical losses is key to count on adequate information tools and control mechanisms, as proved with the creation of the PRISMA unit. While the first two components financed systems and physical investments in the distribution system, Component 3 was designed to provide the flexibility to improve governance and respond with technical assistance and support. The Project design proved to be flexible to adapt to an evolving environment.

43. Implementation was challenging due to the fiduciary arrangements and unexpected changes in the context of the Project. As previously highlighted, Component 3 provided flexibility to adapt to changes in the legal framework, though some delays were caused by lack of timely counterpart funds to complete activit ies required for the operationalization of the systems. Component 1 required additiona l complementary equipment, and the CRMIS required a broader scope to be useful for ENEE, resulting in higher costs, as shown in Annex 1. However, delays and sector reforms did not allow to finalize full implementation and adequate operation of the CRMIS and one module of the CMS (energy balance) by Project closure.

3.2 Achievement of Project Development Objectives Rating Efficacy: Modest Improve operational performance: Modest Improve financial Performance: Negligible

44. The Project did not achieve the ambitious results set at design but produced impacts commensurate to the size of the operation. The Project was justified by the critical situation of ENEE requiring programs to achieve a substantial change. By the closing date, the outcomes that can be attributed to the Project are lower technical losses (versus without the Project), as described in Annex 2, and reduction in commercia l losses 9 . In this regard it´s relevant to highlight that during the first 18 months of operation of the PRISMA Unit USD 57 million have been recovered from invoic ing mistakes, fraud and theft of electricity. This amount represents around 2.6 percent of the total invoicing of ENEE and amounts a higher recovery than the total Project cost. Currently, loses of ENEE have peaked at 31.18 percent and would have reached around 35 percent without the recovery achieved by PRISMA. Regarding the systems implemented, discontinuous Government support and delays left little time for systems to be fully operational and effective, to achieve targeted outcomes.

45. Improved Operational Performance: Outputs in physical investment to rehabilitate the distribution system under Component 2 exceeded the targets, contributing to lower technical losses and an improved quality of service as captured by the SAIDI and SAIFI indicators. Although the second restructur ing slightly reduced IDA funds for Component 2, the material investments exceeded the output targets. Further details on investments under this Component are provided in

9 Commercial losses are not calculated but rather assumed as the different between total losses measured and estimated technical losses. However, technical losses can change and easily increase if insufficient network investments cause overloads.

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Annex 2. The outcome of annual reductions in SAIFI and SAIDI were achieved in 2013, one year after the investments were done, but a lack of continuity in investments in the grid led to a subsequent deterioration of these indicators. Thus, the SAIDI indicator at closing shows this deterioration. (See Table 8 and Figure 1, Annex 5)

46. The scope and results under Component 3 were mixed; affected by the new Law, entrance of new players (fideicomisos) and reduction in funding allocation, target indicators were not achieved, and no consumer outreach and communication campaigns were implemented. The remaining funds under Component 3 after the second restructuring were mainly used for project management, assistance to the unbundling into new units, and tariff studies 10 . The outreach and communicatio n activities (3.3), initially amounting almost one quarter of Component 3, to be funded 50 percent by ENEE, showed no significant progress (See Table 9, Annex 5). This was not identified in the PEU impact assessment of the proposed second restructur ing. However, implementation was successful in adapting activities to changes introduced by the new Electricity Law. Further information is provided in Annex 2.

47. Improved financial performance: The financial performance measured by the cash recovery index (CRI) and losses have deteriorated from Project preparation, but the AMR and revenue protection program based on Component 1 systems (PRISMA) provide a robust platform for continued improvement. The Project financed systems, training and investments, but losses reduction and improvement of CRI requires that outputs be used in day-to-day operation, planning and commercia l activities of ENEE, with proactive loss reduction programs and managerial support to address vested interests. Implementation does not seem to have initially received the required level of support from ENEE’s management and the Government, though lately the support has increased, especially after the outcomes of the Project were included by the IMF in its program. Delays in counterpart funds, internal opposition inside the ENEE, and difficulties in adopting the commercial and corporate systems have negatively affected the outcome. The target of eight percent improvement compared to 2010 0.68 baseline11 has not been achieved in any region (See Figure 2, Annex 5). However, the CRI has slightly improved during the last year, driven mainly by better collection, ENEE´s cost reduction associated to staff cuts and the contribution of the PRISMA unit. Additionally, system losses and CRI may be affected by external factors to the Project, such as additional distribution investments not done. In the 2013 midterm review, the Bank assessed that reducing losses by 10 percent would require at least 3 to 4 years after systems implemented, and only if combined with a strong loss reduction campaign and Government support. Indicators may have been modified accordingly.

48. However, the Project has positively contributed to the Power sector sustainability and fiscal stability of Honduras, by: (i) installing information systems and control

10 The project financed the development of a tariff definition methodology and a former update of this methodology after the approval of the new Energy Industry Law in 2014.

11 A single value was adopted, due to existing difficulties to separate and discriminate losses by region.

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tools which will allow ENEE´s management to better control the Company and inform the decision making process, (ii) creating a dedicated unit to fight fraud and theft of electricity among the highest consumers, with remarkable results so far, and (iii) the empowerment to ENEE to issue Financial Statements based on a consistent data collection and information system, which will increase transparency. The timeliness and relevance of the Project has been endorsed by: (i) the IMF by the inclusion of the Power sector sustainability as key to the macroeconomic stability of the country; (ii) the IDB by requesting the use of the systems in the elaboration of ENEE´s Financia l Statements to be audited; and (iii) the Government of Honduras and its request of the information generated by the systems to inform the tendering process for the support of a new external operator for the Distribution network. The financial deterioration of ENEE in the last few years would be able to be reversed with a strong management at ENEE, political will and support, additional investments, and full deployment and adequate use of the information systems and control tools implemented by the Project.

49. Financial performance outcomes have not been achieved as systems financed by the Project are still not fully operational and not being used for billing. Loss reduction programs and customer services need to be strengthened with the outputs from the new systems. One of the main burdens for an adequate financial management of ENEE was the lack of reliable information systems and control tools. The IRSM final deployment was completed only in 2015, just before the Project closing. SEMEH, the subcontractor in charge of measuring, billing and collecting electricity bills, has not adopted the new systems yet12. The operation of the CRMIS was delayed until financia l data was cleaned and consolidated. The update of the database was also delayed and the process had to be restarted after Project closing date. An operational interface to share information with the Ministry of Finance system (SIAFI) has been put in place, though it´s not fully operational yet.

50. Upon comparison of losses’ scenarios, with and without PRISMA, data reflects that with PRISMA the trend of growing losses has been curbed. Analysis of the scenario without PRISMA show that losses could have reached almost 35 percent without this unit aimed at preventing fraud, theft and metering anomalies. In the absence of PRISMA, anomalies couldn’t have been identified in real time, only upon in-situ inspections, which are not so frequent and require higher costs to be performed.

51. As a complement to the PRISMA unit, investments in IRMS, CMS and distribution management software have provisioned ENEE with the tools to fight non-technical losses. As the systems data population gains progress, ENEE team gains knowledge to create and implement differentiated strategies to fight non-technica l losses, customized to each prioritized circuit in the distribution network, to achieve loss reductions. However, some systems are not in use, like the balance of energy module of the CMS, requiring management decisions to become operative (See Tables 10 and 11, Annex 5).

12 SEMEH provides data in the format of its own system and ENEE requires an interface to transform into the format of the new system.

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Figure 1: Evolution of ENEE´s Energy Losses from January 2009 – June 2015

3.3 Efficiency Rating Efficiency: Substantial

52. Cost overruns of Component 1 correspond to the additional equipment deemed necessary for adequate functioning of the systems, and the need to broaden the scope defined for the CRMIS. Components 1 and 2 provided the rationale in loss and demand reduction that justified the economic and financial benefits of the Project. Unsuccessful tender showed that costs of the systems were underestimated in the PAD. Measuring the largest consumers, spread all over the country, required AMR devices with different technical features than those assessed at design. These devices were more expensive and the PEU found that a new communications platform was required for the correct functioning of the AMR, to be procured by the Project. The number of AMR was then adjusted as available funds were insufficient to comply with the number of AMR committed in the PAD. An analysis by PEU estimated that the revised target would cover 45 percent of consumption, near the 50 percent envisaged in the PAD, but in a more efficient manner. On the other hand, some Component 2 elements procured at a lower unit cost than PAD estimates and additional units were acquired.

Table 1: Actual costs compared with PAD

Comparison PAD Actual AMR 100% CMS 108% IRMS 169% CRMIS 272% Component 1 142% Component 2 71% Component 3 43% Total 93%

53. For the economic and financial evaluation, assumptions were updated to reflect current

situation and outputs of the Project. Details are provided in Annex 3. The economic and financial results from the evaluation of updated assumptions, costs, and benefits of

20.00%

25.00%

30.00%

35.00%

ENER

O 09

ABRI

L 09

JULIO

09

OCTU

BRE

09

ENER

O 10

ABRI

L 10

JULIO

10

OCTU

BRE

10

ENER

O 11

ABRI

L 11

JULIO

11

OCTU

BRE

11

ENER

O 12

ABRI

L 12

JULIO

12

OCTU

BRE

12

ENER

O 13

ABRI

L 13

JULIO

13

OCTU

BRE

13

ENER

O 14

ABRI

L 14

JULIO

14

OCTU

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14

ENER

O 15

ABRI

L 15

Progression of ENEE's Losses

Progression with Prisma Progression without PRISMA

%

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components 1 and 2 based on 2013 costs, are as follows: Economic Evaluation Financial Evaluation Present Value of Costs $17.63 million $17.63 million Present Value of Benefits $41.78 million $191.59 million Net Present Value $12.61 million $166.90 million IRR 37.1% 66%

54. Investments in PRISMA, from Component 1, have shown to be highly efficient and effective in increasing ENEE’s revenues. AMR and PRISMA set-up required an estimated US$4 million investment, enabling remote reading and real-time monitor ing of control of the largest consumers, and enabling real time detection of unusua l behavior in energy consumption or meters. The reports on anomalies are followed by ENEE’s staff investigation and correction. As previously mentioned, PROMEF has already helped ENEE in recovering US$57 million, compared to billing without the project. These results enabled the recovery of all Project cost and investments.

3.4 Justification of Overall Outcome Rating Rating: Moderately Unsatisfactory

55. The Project, though relevant and partially successful, was unable to achieve most PDO indicators. Efficacy is rated as Modest due to the fact that key outcome indicators have not been achieved, specifically the reduction of loses and CRI improvement anticipated in the PAD. Relevance is rated as Moderate as the PDO and components target the key issues and priorities in the power sector, but the design and the results framework were over optimistic to achieve the objectives, and implementation did not adapt the indicators to delays and changes in actual situation and the actual project investments. Efficiency is deemed Substantial as the use of resources and procurement of goods and services has been efficient, and the overall savings through the systems implemented and the unit created have been far larger than the investment required, with the amount of the Project recovered before its closing.

3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development n.a (b) Institutional Change/Strengthening

56. The Project provided training, system and credible databases to strengthen ENEE’s commercial and financial management, and better and more responsive customer services. This represents a significant change compared to ENEE’s situation prior to the Project. Previously, ENEE did not have adequate information commercia l systems or integrated management and practices on customer services and pro-active monitoring to detect fraud or theft and determine load profiles. The support provided to ENEE to restructure the Institution and select key managerial positions through competitive processes based on merit is also relevant. Operational management was strengthened through the incidence tool and investments in maintenance equipment.

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(c) Other Unintended Outcomes and Impacts (positive or negative) n.a.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops 57. To disseminate and increase awareness on the Project, the Government organized

a stakeholder’s workshop as closing activity. Consultants evaluated each component’s impact and sustainability, and provided recommendations. Main results of the workshop include increased empowerment of the staff re-assigned to the new institutional structure, a clearer vision of Project outputs and outcomes, definition of next steps and deployment of sustainability actions for project achievements.

4. Assessment of Risk to Development Outcome Rating: Substantial

58. Sustainability of outcomes achieved must be carefully monitored and shielded. With the implementation process of the new Law and possible entrance of new external actors due to the distribution trust fund (fideicomisos), PROMEF’s achievements should be carefully monitored and a strong political will should be clearly demonstrated to continue implementing management changes promoted by the project. Tools have been provided but only a day to day use of these tools in management can produce the remaining expected results from the project. Moreover, the Government’s decision to keep using SEMEH’s metering system in parallel with the CMS, leaves ENEE without control of the billing and still depending on a third party regarding client’s informatio n and losses management.

59. There is a substantial risk that the lack of required investments may impact the sustainability of improvements in distribution and commercial operation. It is uncertain whether ENEE will have the necessary funding and skilled resources (due to staff reduction) to carry out maintenance, improve and continue implementing the systems after the Project closes. There is still no mechanism in place to ensure that the new systems under Component 1 will continue to be utilized by ENEE and any successor entities or private operator in the future. The corporate management system has been designed for a single company and could be adapted to a single distribut ion company successor of ENEE, or implemented for the separated companies in the unbundling of ENEE, but this would require remodeling and additional funds.

60. The Government could impose obligations of adopting the systems financed by PROMEF to the new operator of the distribution and commercialization activity. PRISMA has the potential to reduce non-technical losses caused by fraud and theft. It is critical that the Bank continues working closely with ENEE and engaging with the Government, providing advice on PROMEF’s benefits and ensuring the Government’s interest that the systems continue in place and are used. The medium and long- term benefits of the Project depend on continuous implementation of the systems and drive changes in operational practices and effective loss reduction programs. PRISMA would need to be a part of the new distribution and Commercialization Company, independent of who owns it. However, additional requirements from the IMF have triggered Government actions, which have included reductions in ENEE’s staffing that

26

negatively affected Project implementation.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Moderately Unsatisfactory

61. While the analytical preparation, the Project design and coordination with donors was comprehensive, the design of indicators, results framework and implementation schedule was over ambitious and did not provide sufficient mitigating measures to manage risks. The Bank carried out a comprehensive study, coordinated with donors and supported the government strategy to design the PDO and components. However, the design was not ready to manage the challenges experienced, the delay in the implementation timeframe of components, and indicators were over ambitious, in particular taking into consideration the country and ENEE's context:

• The very early restructurings proved that the initial implementing agencies arrangement caused delays instead of facilitating procurement.

• Loss reduction and CRI improvement targets did not take into consideration the size of the Project compared to ENEE’s needs, external factors, and the possible vested interests and opposition to reduction in commercial losses. Similarly, the interruption indicators are affected by total investments in ENEE’s system, and the Project could not necessarily achieve improvements on its own.

• The lack of baseline values in relevant indicators hindered an adequate supervis ion and early response to deviations in Project implementation.

(b) Quality of Supervision Rating: Moderately Unsatisfactory

62. The Bank supervision of Component 1 and 2 was over optimistic in expecting that delays would not affect outcomes, instead of a realistic revision of timeframes and indicators. The Bank Team may have not been fully aware on the deterioration of relevant indicators, partly due to problems in the original design of the results framework and partly due to delays in the deployment of Component 1. However, the Bank was aware of the delays in implementation, the difficulties in completing data, the reduced target of AMR -with a conceptual approach different than the PAD´s- and the discontinuous management support, most of which justified mitigating measures. ISRs did not adequately inform that indicators could not or had not been achieved. The third restructuring was a lost opportunity to adapt the results framework and indicators to feasible outcomes with a clear view on what was feasible to do in one year. Instead an optimistic expectation that all outcomes would be achieved with the 18 months extension was presented. In general, the Bank should have taken advantage of the opportunities presented to propose deeper and more thorough restructurings.

63. The Bank engaged with the Government seeking to ensure continued commitment

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to the Project, and with ENEE’s management seeking support for implementation. The Bank Team faced significant challenges due to the change in Government and several changes in ENEE’s management. Despite the difficulties, the Team continued efforts to engage with the Government, seeking commitment in counterpart funding and in ensuring that any change in the power sector model would be consistent with PROMEF. The Bank required for the approval of the third restructuring the confirmation of permanent staff for IRMS (PRISMA) and that counterpart funds would be incorporated in ENEE’s 2014 budget. During the final years of implementation, after the third restructuring and the approval of the new Law, the Bank supervision became more proactive and realistic in recognizing that outcomes may not be achieved and requiring the PEU to calculate all baselines and estimate previous years´ indicators.

64. There was a close and comprehensive supervision of environmental safeguards in the PCBs’ activity and financial management. Initial failure of PEU compliance with timely financial audited reports was reflected in ISRs with a downgrade in rating, and the issues were resolved. The environmental team was active in visiting and ensuring the PCB storage had adequate arrangements and on requirements for staff handling PCB. ISRs show ratings were downgraded when implementation was delayed and the construction of the storage deviated from standards. The follow up in supervision led to these issues being addressed and the storage completed by closing date.

(c) Justification of Rating for Overall Bank Performance Rating: Moderately Unsatisfactory

65. Both quality at entry and supervision are rated moderately unsatisfactory. Overall, the Bank prepared studies and dedicated efforts to obtain high-level support to the Project. However, the Project faced challenges that went beyond Bank´s support. The design was over optimistic and ambitious, in particular in setting the results framework and not recognizing procurement potential delays. Supervision could have highlighted concerns in the achievement of indicators and a review of the results framework could have improved the outcomes. Fiduciary supervision was satisfactory.

5.2 Borrower Performance (a) Government Performance Rating: Moderately Unsatisfactory

66. Project received stronger support during the final implementation stage. Changes

in management (See Table 6, Annex 5) significantly affected project implementat ion, delaying decision making and changes in management visions. PROMEF received stronger support in its final phase of implementation, supported by shared expected outcomes with the IMF program. Moreover, the Government has prioritized the implementation of the remaining activities of the Project before the project closing.

67. The Government provided limited financial support to ENEE for the Project, and insufficient counterpart funds delayed implementation of the project which had negative impact on outcomes. Key activities with complementary Government and

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IDA financing were delayed. For example, completion of Installation and Supply Database for the IRMS had to wait due to delays in the required counterpart financ ing. Meetings were organized to address this issue and ensure that counterpart funding would be made available in a timely manner, but funds allocated were reduced due to fiscal limitations13. The PEU and Bank Team had to manage this situation through careful administration of the remaining available IDA, and prioritization of activities.

68. The Government’s power sector reform affected a few outcomes and created a potential risk to sustainability. The power sector in Honduras is embedded in a structural reform which has caused uncertainty on the final structure of ENEE, with a potential impact on the sustainability of certain elements of the Project. In 2013 the Bank Team met with the Minister of Energy to anticipate potential impact of the reforms on the Project and received formal confirmation from the Government that no new model would be adopted within two years to give time to implement PROMEF, and show the improvements after systems were fully in operation. However, in early 2014 the new Electricity Law was passed. The Government, in order to meet the agreements reached with the IMF, instructed ENEE to reduce staff, which impacted the Project by reducing the number of staff trained in the new systems. The modeling of corporate resource management system (SAP) will need to be adapted to the holding structure, once restructuring of ENEE is completed.

(b) Implementing Agency or Agencies Performance Rating: Moderately Satisfactory 69. The PEU has faced changes throughout the lifespan of the Project, with mixed

results on their performance due to the inadequate initial design. The init ia l structure of the PEU was not adequate and hindered the Project implementation. The elimination of the fiduciary PEU improved implementation and allocation of fiduc iary responsibilities to the PEU at ENEE, and the performance of the PEU improved. Once transferred to ENEE, the performance of the PEU was overall satisfactory.

70. The PEU faced a steep learning curve on Bank procurement and fiduciary procedures under Component 1. The PAD recognizes that the PEU at ENEE required support to strengthen capacity on procurement and fiduciary aspects. ENEE had previous experience in traditional distribution investment and AMR, but had none on scope and procurement of the systems financed by the project. Initial delays were caused until the two implementing agencies were consolidated into a single agency (ENEE’s PEU) and the formality of fiduciary functions was completed.

71. The PEU was responsive in preparing studies or assessments for the Project and in seeking support from ENEE’s management for system’s implementation, but optimistic in that delays and lack of support could be addressed. Overall, the PEU was partly isolated from ENEE’s management decision making. PEU documents

13 During 2013 the Project required around US$6 million of counterpart funds, but only US$ 2 million were allocated.

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inform delays and describe difficulties that were negatively affecting the Project, for the Bank Team to assess and make decision on potential impact in outcomes. Reporting was not always sufficiently clear or fully consistent. Upon the Bank Team request, the PEU assessed impact on PDO and indicators of the proposed IDA reduction in the second restructuring and the report went beyond the request in including a reduction in number of AMRs installed (to 3,600 AMR that added to 1,400 pre-existing AMR of ENEE would total 5,000). The conclusion optimistically summarizes that PDO and outcome indicators would not be affected, but does not adequately highlight implementation and PDO achievement risks.

72. The PEU was proactive in defining additional equipment for distribution rehabilitation in Component 2, seeking investments that would result in reduction of interruptions and improve network management. The implementation and results of the Project prove that the PEU and ENEE were more comfortable in dealing with distribution physical investments. Additionally, there were periodic reporting by the PRISMA unit on progress in the installation and monitoring of AMRs, implementation and performance of the communications platform, as well as results and impact in detecting possible theft, metering issues and preparation of load profiles.

(c) Justification of Rating for Overall Borrower Performance Rating: Moderately Unsatisfactory

73. Both Government and implementing agencies performance are rated moderately unsatisfactory and satisfactory, respectively. The negative impact of lack of continuity in ENEE´s management support and changes in the Government has not been fully compensated by higher support to the implementation at later stages. Given the uncertainty created by the legal framework reform, the sustainability of the outcomes of the Project are not assured, even though the Government has committed to preserve the investments made through the Project.

6. Lessons Learned 74. Procurement of large batches should be carefully planned. When procurement of

large batches is envisioned in project design, a careful planning and risk mitiga t ion should be considered. Experience in PROMEF showed that delays and/or errors in international bidding processes can significantly impact project implementa t io n causing major delays and affecting outcomes delivery.

75. Restructurings should have been more thorough, and more realistic evaluations should be performed. During project implementation, opportunities were missed to better reflect project situation and likelihood of achievements. History, implementa t ion progress and final results shown an overoptimistic perspective of project potential impacts, resulting in missed opportunities to adapt indicators to the sector and institutional reality. Moreover, the bank’s team kept an overly optimistic perspective even though because implementation delays, some of the outcomes had not time left to show results during project lifetime.

76. Projects that target reductions in high non-technical losses (fraud and theft) need to be cautious in selecting attributable outcome indicators and targets, and

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recognize the need for sustained and continued high level support and commitment by the Government and power company’s management, as well as close supervision and dialogue by the Bank and an adequate penal framework. Reduction of theft and fraud will face resistance by vested interests. As shown in the Project, a successful implementation of modern monitoring systems and AMR is necessary, but not sufficient, to achieve a reduction in commercial losses and improve billing and collection rates. Outcomes, such as reduction in non-technical losses and CRI, require complementary intensive loss reduction and collection programs that go beyond an investment or technical assistance that can be provided in a project.

77. The indicators and result framework need to build on what already exists and use historical data to assess reasonable targets. A project should not be designed to start without baselines. The lack of SAIDI and SAIFI baselines in this Project was due to ENEE not having record of interruption or a methodology and practice of calculat ing those indicators. Therefore, they were selected without knowing initial interruptions performance in the regions or the causes of interruptions. Moreover, due to not being able to differentiate causes of interruptions prior to IMRS implementation, there was no formal methodology and data collection in place, and had to be developed and tested by the PEU in estimating the baseline and annual indicators retroactively. Low quality data prior to IRMS implementation would have been more helpful than to have no baselines and wait for reliable indicators to track progress.

78. Improvements in operational indicators need to be consistent with the investments (funds and type) in the project (attribution). A good and recommended practice is to adopt operational indicators only for the area covered by the project and that in the area the size of the investment financed by the project is significant compared to total investment needs to justify improvements as outcome. However, defining indictors by project area is more data intensive and requires the power company to have and implement adequate data collection and validation.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies See Annex 10. (b) Cofinanciers n.a. (c) Other partners and stakeholders n.a.

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate (USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

Component 1: 18.5 26.34 142% Installing AMR equipment 4.8 4.82 100.4% Installing Automated Commercial Management System (CMS)

7.3 7.90 108.3%

Implementing Incidence recording and Management System (IRMS)

3.7 6.2 169.5%

Developing Corporate Resource Management Information System (CRMIS) for ENEE

2.7 7.34 271.9%

Component 2: 14.6 10.31 71% Replacing transformers, purchase dist. equipment and dispose PCB

4.0 2.29 57.2%

Maintenance equipment, spare parts and materials for dist. network, mainly heavy vehicles

10.6 8.02 75.6%

Component 3: 6.2 2.70 43% Strengthening power sector governance

1.8 0.84 46.4%

Analyzing ENEE long-term financial sustainability and developing strategy for commercial operations

0.5 0.13 26.6%

Implementing communication, outreach and participation program

1.4 0.05 3.9%

Project management, M&E, audits

2.5 1.67 66.9%

Total Baseline Cost 39.3 39.34 100% Physical Contingencies 1.5 Price Contingencies 1.5

Total Project Costs 42.3 39.34 93%

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(b) Financing

Source of Funds Type of Cofinancing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

ENEE 12.3 11.35 92% International Development Association (IDA) 30.0 28.0 (*) 93%

Note: (*) In the second restructuring, IDA was reduced to USD 27.6 million equivalent. Counterpart financing was not modified.

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Annex 2. Outputs by Component Component 1: 1.1 Procurement and installation of smart meters, communications, data collection and management software, hardware and laptops for the data management center, including:

• Procurement of 4,305 AMR, of which 3,892 have been installed, and by June 2015 165 kept as spare, and remaining in the process to be installed or prepared for installation;

• Data management software/system (MDMS) to collect and process readings from AMR.

• Command center for data collection and communication between AMR and MDMS, with a capacity for 100,000 points and allowing for future expansion;

• Design and development of communication platform in the 14 main cities of Honduras, including procurement and installation of 14 collectors, 32 routers, and other necessary accessories for the installation and operation of the communication system to establish a robust communication system that ensures continued access to monitored data in AMR;

• Hardware to manage and process database.

This AMR, software and systems enable to (i) identify unusual consumption or conditions that may be theft or fraud to combine with active loss reduction programs and investigations in the field, (ii) develop load profiles for monitoring and distribution system planning; and (iii) overall monitor system conditions and customers consumption. 1.2 Procurement, implementation and operation of the following modern management systems for distribution and commercialization: (a) Commercial management system (CMS) and customers database to enhance ENEE commercial operation and customers services, including

• Commercial Management System with unlimited user licenses; • Two licenses for data base management; • Hardware for the three systems and data bases; • Computer equipment for system users; • Remodeling of commercial offices in two regions (Noroccidente and Litoral

Atlántico) • Furniture and equipment for ENEE offices and call center for customer services; • Hardware for the communication platform for the three systems.

(b) Incidence management system (IMS) including geospatial data of distribution system (main substations and connections) to link distribution assets with connections, and three distribution operation centers, which combined enhance and monitor operational performance through monitoring the distribution system and outages, responding to interruptions, including:

• Incidence management system (IMS); • Server and hardware for the IMS; • Remodeling of the 3 distribution operation centers; • Procurement of video walls; • Computer systems for users of the system;

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• Geospatial Information System (GIS) of the distribution system through procurement of materials, GPS and licenses for ArcGIS software.

1.3 Procurement and implementation of a corporate resources management information system (CRMIS), to integrate and enhance financial management, human resources and overall access to quality information and transparency, including:

• Corporate resource management information system (CRMIS), with 288 licenses for users of the system (the system uses the same hardware as CMS);

• Computer equipment for system users.

Component 2: 2.1 Replacing transformers and disposing PCBs, including:

• 366 transformers replaced; • Kits to test contaminated equipment; • Materials and tools for voltage conversion and transformers installation; • Storage for potentially PCB contaminated transformers and oil management.

2.2 Purchasing transformers and maintenance equipment, mainly heavy vehicles, spare parts and materials to rehabilitate the distribution network and improve its operational performance and reduce technical losses, including:

• 1,044 transformers; • 81 restorers and 21 voltage regulators; • Fault indicator devices, current recorders and thermal cameras; • Video wall for the SCADA; • Computer and other equipment for SCADA; • Power system analysis software (21 modules) for distribution studies and planning,

and computer equipment; • Maintenance vehicles, including one crane; • Two tables for meters calibration and verification of electronic counters

Component 3: Subcomponent 3.1: Technical assistance to improve ENEE’s governance:

• Profile and selection of staff for the Distribution and Commercialization unit for ENEE. (2012);

• Organization, profile and selection of staff for the Distribution and Commercialization unit/department, incorporating Information Technology and Communication unit, Administrative and Financial Management Department, and Human Resources. (2013)

• Organizational structure of high and intermediate management areas for the Holding, for Generation and for Transmission, and definition of the complete organizational structure for Distribution and Commercialization, including Information Technology and Communication unit, Financial and Administrative Department, and Human Resources Department, aimed at supporting the implementation of the new Electricity Law. (2014)

• Software and development of a scorecard system management tool, to strength results driven management.

Subcomponent 3.2: Technical assistance to improve financial situation of ENEE

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• Definition and review of the methodology for the determination and adjustments to electricity supply/retail tariffs to end consumers (2013)

• Review and recommendations of the methodology for the determination and adjustments to electricity supply/retail tariffs to end consumers within the framework established in the new Electricity Law (2014)

• Assistance for ENEE to develop financial statements at December 31, 2013 (2013), and assistance for statements at December 31, 2014 (2014)

Subcomponent 3.3: Technical assistance

• Within the profile for Distribution and Commercialization unit, preliminary strategic plan to improve consumer services and attention of consumers. (2012)

Subcomponent 3.4: Project Management • Audits 2010-2013 (2012 and 2013) and at project closure (2014) • Procurement audits (June, 2010-December, 2013 and January, 2014-June, 2015)

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Annex 3. Economic and Financial Analysis 3.1 Benefits. In the PAD, the economic benefits are defined as reduction in technical losses and improved service quality, measured in resource savings associated with new AMR systems and loss reduction only. Additionally, the installation of AMR and associated data management software and systems have an economic and financial benefit due to more accurate data used in billing and detection of fraud and theft. 3.2 Assumptions: 14 The evaluation in the Annex of the PAD was reviewed to take into consideration results and data at the end of the Project, and to update assumptions. In particular, the review covered assumptions and energy estimates related to the target AMR consumers considered in the PAD, and the actual large consumers where AMR was installed and monitored, comparing the percentage of total billed energy or billed amount. Loss reduction: The assumption in the PAD was that the project would contribute to reduce losses by 10 points by the end of the 4 years duration of the Project), from approximately 20-25 percent of generation to around 10-15 percent of generation. This reduction represented 700 GWh/year savings (estimated generation at the start of the project was 7,000 GWh/year). It is important to note that the assumed outcome was a reduction of 10 percent, rather than achieving a specific loss target. This approach provides the required flexibility on uncertainties about actual losses at the time the Project initiated the installation of AMR and systems under Component 1, and the implementation of the distribution system rehabilitation under Component 2. In this analysis, the assumption has been revised to 8 points reduction in non-technical losses (including improved billing) between 2015 and 2020, based on the following:

• 1 percent reduction in 2015 and 2 percent in 2016, similar to 2015 result reported by PRISMA;

• 5 percent reduction in 2017 based on IMF program;

• 1 percent additional annual reduction as from 2018, as a result of the full implementation of the module in the CMS that analyses the balance in each district to identify areas with largest share of theft. The module reports the areas for ENEE to follow up and investigate. The full implementation of this activity is expected to start after the reorganization of ENEE is finalized with the dedicated Distribution and Commercialization unit.

AMR target consumers. The PAD estimates 2,900 GWh/year billed energy for the target large consumers. Considering 20 percent losses, 7,000 GWh/year generation would correspond to 5,600 GWh/year sales and the target large consumers represented around 52 percent of the billed energy. (Considering 25 percent losses, the large consumers would represent about 54 percent of billed energy.) During Project implementation, the target was modified after the second restructuring to 46-47 percent of consumption. The assumption for this analysis is that actual AMR

14 The description is based mainly in Annex 9 of the PAD with the Economic and Financial Analysis, and the results described in the main text of the ICR.

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installation and monitoring at Project closing date covered 40 percent of total consumption. The assumption is based on information provided by PRISMA on the installation and monitoring of AMR since January 2014, as shown in Table 3.1. Table 3.1 Monitored AMR Consumers

Reduction in consumption. The PAD estimated consumption of targeted large consumers as 3,600 GWh (to reflect energy not billed due to non technical losses). The assumption is that that those consumers will decrease consumption by 1 percent, as AMR and systems detect theft or fraud and under-billing is eliminated. The assumption in consumption reduction was not modified, but actual and forecasted consumption of the AMR consumers monitored by the Project was updated to reflect PRISMA information and demand forecasts. Technical Losses. The analysis in the PAD assumed a reduction of technical losses by 2 percent, resulting in energy savings at peak of around 1l GWh in the first year. This reduction is valued as generation savings at peak, and at the corresponding marginal cost for energy and capacity, which is considered representative of the marginal cost from ENEE’s energy purchases from IPPs. As Component 2 was successfully implemented and exceeded the target, the assumption was not modified. The prices of IPPs were updated to current values. 3.3 Economic Analysis: The economic benefits were evaluated similar to the PAD, but with the updated values, costs and assumptions, as follows:

• Benefits of 1 percent reduction in consumption of AMR monitored large consumers, as a response to better billing and fraud detection. As described in the PAD, it is expected that consumers will respond with a more efficient use of electricity and reduce consumption. The benefit is quantified as (i) resource savings due to lower energy generation (or reduced purchases from IPPs) valued at the marginal cost of energy, estimated at current prices of thermal IPPs; and (ii) a

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welfare loss associated with the reduced consumer surplus valued the consumption reduction at 50 percent of the electricity tariff (valued at the average between zero and the tariff).

• Reduction of technical losses of 2 percent, representing generation savings, during peak period, valued at the marginal cost for energy and capacity, considered at the prices of ENEE’s purchases from thermal IPPs. This is considered a conservative evaluation, as it does not take into consideration transmission and distribution savings, which are considered a sunk cost.

The economic results from an evaluation of costs and benefits of components 1 and 2 based on 2013 costs are shown in Table 3.2: Table 3.2 Economic Evaluation

Results for Economic Evaluation Present Value of Costs $17.63 million Present Value of Benefits $41.78 million Net Present Value $12.61 million IRR 37.1%

The calculated IRR can be considered a lower bound, as the economic benefits of better customer service are not included because those are difficult to quantify reasonably. 3.4 Financial Analysis: The financial benefits were evaluated similar to the PAD but with the updated values, costs and assumptions

• The resource savings valued as savings in production costs, as described in the economic analysis;

• Reduction in non technical losses, as described for the economic analysis;

• Increase in ENEE revenues as a result of better metering, billing and collection (reduction in fraud).

The financial results from an evaluation of costs and benefits of components 1 and 2 based on 2013 costs are shown in Table 3.3: Table 3.3 Financial Evaluation

Results for Financial Evaluation Present Value of Costs $17.63 million Present Value of Benefits $191.59 million Net Present Value $166.90 million IRR 66%

3.5 Financial Benefits based on PRISMA results Investments in AMR and the systems in PRISMA, from Component 1, have proved effective in increasing revenues of ENEE. An analysis of the results from the first 18 months of PRISMA operation (January 2014 until closing date of the Project in June 2015) demonstrate the benefits of PROMEF’s investments in detecting fraud or theft, and improvements in metering accuracy, both leading to increase in revenues for ENEE

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and reduction in losses. PRISMA set-up required around US$4 million investment to enable remote reading and real-time monitoring of target largest consumers. The AMRs were progressively installed since January 2014, as shown in Table 3.1, providing data to profile consumption and detect unusual behavior in energy consumption or anomalies in meter readings. Through the installed AMRs, communication system, and PRISMA software and systems, the specialized staff in PRISMA identifies unusual behavior and sends an alert to the Large Consumers Unit to verify and confirm through field inspections whether there is theft or fraud by the consumer, or errors in the meter that cause under-billing. In the 18 months since January 2014, PRISMA identified 960 cases that resulted in an increase in energy and amount billed. Table 3.4 Increase in ENEE’s revenues

As shown in Table 3.4, with this tool and use of results through adequate management and follow up by ENEE, AMR investments and PRISMA combined with ENEE’s field staff has already benefitted financially ENEE to increase billing and revenues around [US$57] million compared to billing and revues without the Project. In addition, PRISMA alerts and the response by ENEE’s staff allowed identifying 121 cases of theft during the same 18 months period. Based on current regulations, those consumers received an additional billing for estimated 3 months consumption, representing around additional 350,000 US$ for ENEE. These results show the impact in theft detection, which it is expected will also impact in demand reductions, as consumers will have to pay for all energy consumed.

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/ Specialty

Lending Fernando Lecaros Consultant GEEDR Lucio Monari Practice Manager GEEDR Dante Ariel Mossi Reyes Resident Representative LCCPY

Supervision/ICR Etel Patricia Bereslawski Aberboj Senior Procurement Specialist GGODR

Maria E. Castro-Munoz Sr Social Scientist LCSSO - HIS

Alejandro M. Deeb Consultant GEN04 Jimena Garrote Senior Counsel LEGLE Pilar Elisa Gonzalez Rodriguez Senior Counsel LEGCF

Fernando Lecaros Consultant GEEDR Almudena Mateos Merino Energy Specialist GEEES Viviana Mariela Maya Iglesias Counsel LEGOP

Dante Ariel Mossi Reyes Resident Representative LCCPY

Beate Gisela Mueller Procurement Specialist LCSPT - HIS

Jose Simon Rezk Sr Financial Management Specia GGODR Xiaoping Wang Senior Energy Specialist GEEES Rigoberto Yepez-Garcia Senior Energy Economist GEEDR

(b) Staff Time and Cost

Stage of Project Cycle Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending

Total: 77.6 378,522.09 Supervision/ICR

Total: 147.09 739,312.14

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Annex 5. Supporting Tables, Figures and Graphs

Table 2: Key Performance Indicators Indicator PAD Baseline PAD Target Comments

Cash Recovery Index (CRI) (Loss index times collection index)

Year 2010 based on 2008 ENEE annual data.

Increase in 10% of the CRI in each of three distribution regions.

Baseline agreed in midterm review: December 2012, 0.63 with target 8% improvement

SAIDI Average of 3 months prior to Incidence Recording Management System (IRMS) implementation

Annual Improvements

At midterm review, baseline set at December 2012, SAIDI = 14 hours/client.

SAIFI Average 3 months prior to IRMS implementation

Annual Improvements

At midterm review, Baseline set December 2012, SAIFI 20.22 interruptions per client

Table 3: Component 1 Intermediate Indicators and Monitoring Framework

Outcome Indicator Baseline (PAD) Target PAD Number of AMR installed. 30,000 50,000 CMS, IRMS and CRMIS in place

No system in place All three systems operational and working satisfactorily

Number of customers in CMS and IRMS database

Zero 40 %

Number of ENEE staff trained to use the CMS, IRMS, and CRMIS

Zero - CMS: 50 or as needed - IRMS: 10 or as needed - CRMIS: 20 or as needed

Number of customer complaints related to billing

3 months since CMS implemented in main offices

Improvement of semiannual average compared to previous six months

Table 4: Component 2 Intermediate Indicators and Monitoring Framework

Outcome Indicator Baseline Target Number of transformers replaced Zero 1,000 Number of PCB-containing equipment replaced Zero 350 Number of heavy vehicles acquired Zero 30

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Table 5: Component 3 Intermediate Indicators and Monitoring Framework Outcome Indicator Baseline Target

Setup and operational business units No separate units Business units operational Setup and operation of Distribution and Commercialization unit

Does not exist Distribution and Commercialization Unit Operational

Competitive selection of key personnel in the distribution and commercialization unit

No staff 3 managers, 10 key staff competitively selected

Consumer satisfaction and perception Baseline Survey rate of acceptance (A survey was done in 2012)

Improvement in annual result of survey compared to the previous year.

Table 6: Target number of AMR financed by the Project

Description PAD Baseline

PAD Target

PAD (and description in Financing Agreement)

Complete ongoing effort to install AMR for 1,800 “Industrial” and “High Consumption” customers, and extend to low voltage residential and commercial with monthly consumption above 400 kWh.

30,000 50,000

WB Project restructuring paper (2011)

No change 30,000 Additional 28,600; cumulative 58,600

PEU (ENEE) assessment of impact of reduction

Target the first 5,000 in ENEE’s list of large consumers, which represents 46% of billing.

3,600 (to total 5,000 monitored AMR by including 1,400 preexisting AMR in large customers.)

ISRs after restructuring

5,000

Table 7: Changes in ENEE’s Management

Manager Period 1 Rixi Moncada January 2008 - June 2009 2 Jacobo Dacosta Gomez July 2009 - December 2009 3 Roberto Matinez Lozano January 2010 - January 2012 4 Emil Hawit February 2012 - August 2014 5 Roberto Ordoñez September 2014 - up to date

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Table 8: Restructurings to the Project Restructuring Date Scope

1. Level two amendment

Approved on June 17, 2010

Reassigned PCU fiduciary and coordination responsibilities from CPME to the State Secretary of President Office unit for project administration (UAP-SDP)


Approved on October 4, 2011, and effective on February 24, 2012

Simplified administrative process by eliminating the PCU and all functions assigned to PEU (ENEE), and UEP’s Financial Management (FM) and procurement capacity strengthened through capacity building and consultant support; (ii) cancellation of SDR 1.52 million upon Government request and allocate this reduction among component activities; and (iii) reduce scope of indicators.


CD Decision on December 19, 2013

Extended 18 months the closing date due to the delays experienced in project effectiveness and implementation.

Table 9: Component 2 Outcome Indicators

Outcome Indicator Target Actual Number of transformers replaced 1,000 1044 Number of PCB-containing equipment replaced 350 366 Number of heavy vehicles acquired 30 31

Figure 1: SAIDI and SAIFI Indicators

Table 10: Component 3 Outcomes PAD Indicators Outcome Target Adaptation Comment Setup and operational business units (functional unbundling)

Business units operational: Not achieved

2014 study prepared organizational structure for ENEE full unbundling, in accordance to new Electricity Law

Legal creation of entities could start, but regulations and institutions required in new Law are still not in place.

Setup and operation of Distribution and Commercialization unit

Distribution and Commercialization Unit Operational: not achieved. In 2013 ENEE’s

The organizational structure for the full unbundling (see previous indicator) includes Distribution and

Similar to previous indicator.

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(specialized unit)

Board approved the structure, but not implemented as new Law instructed full unbundling

Commercialization developed for the approved business unit.

Competitive selection of key personnel in the distribution and commercialization unit

3 managers, 10 key staff selected: competitive selection completed, but final approval / appointment pending

Competitively selected staff could be appointed, as the new structure proposed is consistent with the business unit design.

Consumer satisfaction and perception

Improvement in annual result of survey compared to the previous year

None A survey was done in 2012 and followed in 2015, but content and scope was not as required 15. No campaigns were implemented.

Figure 2: Annual CRI for ENEE, and CRI by Regions 16

15 The survey covered only 400 residential (small) and commercial customers. The PAD assigned US$ 1.4 million to the outreach and communication activity, with survey expected to cover more than 1 million persons, customers and in the society.

16 Year 2015 considers CRI data from January to June.

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Table 11: Component 1 Outcome Indicators Outcome Indicator Target PAD/PEU Actual

Number of AMR installed.

50,000 [5000] (*) Not achieved. 4,810 installed

CMS, IRMS and CRMIS in place

The three systems operational and working satisfactorily

IRMS operational and working satisfactorily, although distribution system data still to be fully updated. CMS operational but not being fully used. CRMIS not achieved

Number of customers in CMS and IRMS database

40 %

Number of ENEE staff trained to use the CMS, IRMS, and CRMIS

- CMS: 50 or as needed - IRMS: 10 or as needed - CRMIS: 20 or as needed

Exceeded outcome CMS: 400 IRMS: 35 CRMIS: 250

Number of customer complaints related to billing

Semiannual (every 6 months) improvements since CMS implemented in main offices

Not achieved. Number of customer complaints (total and related to billing) increased

Table 12: Customer complaints related to billing

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Annex 6. Stakeholder Workshop Report and Results 1. A workshop was organized to disseminate the relevance and benefits of the Project, to

build interest and support for sustainable implementation and longer-term outcomes. The workshop covered scope and achievements of the Project, highlighted shortcomings and provided recommendations on next steps. Working groups includ ing participants that are beneficiaries or impacted by the project, reviewed each component to collect perception about the Project, and feedbacks on impact, sustainability and efficacy.

2. Main results of the workshop include increased empowerment of the staff re-assigned

to the new institutional structure, a clearer vision of Project outputs and outcomes, definition of next steps and required sustainability actions for project achievements.

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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

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ICR IL

Resumen Ejecutivo Informe de Cierre del Proyecto

Empresa Nacional de Energía Eléctrica Proyecto Mejora de la Eficiencia del Sector Energía IDA 4536-HO

Elaborador por la UEP-BM-ENEE

Octubre, 2015

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PRESENTACIÓN El Proyecto Mejora de la Eficiencia del Sector Energía (PROMEF) IDA 4536-HN fue una iniciativa del Gobierno de Honduras (GOH) con apoyo del Banco Mundial, orientado a mejorar la gestión operativa y financiera de la ENEE bajo un principio rector de atención integral a los clientes, mediante la implementación de herramientas de gestión, una nueva estructura funcional y metodologías validadas que, acompañadas de inversiones orientadas a la mejora en calidad del servicio y reducción de pérdidas, permiten mejorar el índice de recuperación de efectivo y la calidad del servicio (medido a través del índice de frecuencia y duración de las fallas). El inicio del proyecto se aprobó para el 30 de junio 2009, sufriendo un año de demora para lograr su efectividad por los eventos acontecidos días previos, obteniendo ésta finalmente el 29 de junio de 2010. La gestión financiera estuvo a cargo inicialmente de la Secretaría del Despacho de la Presidencia (SDP) y a solicitud de la SEFIN, dicha responsabilidad fue trasladada posteriormente a la UEP-BM-ENEE; la dirección técnica siempre estuvo bajo la responsabilidad de la ENEE. El monto inicial del crédito fue de USD 42.3 millones (30.0 FE y 12.3 FN), reduciendo FE en USD 2.4 millones de dólares, ejecutando al cierre del mismo USD 40.2 millones que incluye el uso las ganancias obtenidas con los derechos especiales de giro – DEG, reflejando una ejecución final de 100.8%. A lo largo de la implementación, la Unidad Ejecutora llevo a cabo 290 procesos de adquisiciones/contrataciones contenidos en los PAC aprobados, de los cuales 69 se ejecutaron con FE y 221 con FN .Todos estos procesos fueron objeto de auditorías especiales. El proyecto también fue objeto de revisiones anuales a la gestión financiera de parte de firmas de auditoría externas, obteniéndose en todos los periodos una Opinión Limpia.

I. FORMULACIÓN La formulación del PROMEF consideró además del diagnóstico del sector, la propuesta para la implementación del Proyecto de Mejoramiento de Gestión (PMG) desarrollada en mayo de 2008. La propuesta de la Ejecución del PMG, fue el antecedente para poder reducir en forma sostenible las pérdidas de electricidad, mediante: Asegurar ausencia de las pérdidas que se producen por mecanismos no técnicos. Establecer una nueva estructura de gestión con nuevos sistemas de gestión. Definir un plan de inversiones para evitar las pérdidas generadas por aspectos técnicos, permitiendo

de esta forma una ostensible mejora de la calidad del servicio brindado por la empresa.

El objetivo de desarrollo del proyecto es mejorar el desempeño operacional y financiero de la ENEE, contribuyendo a la sostenibilidad del sector energético de Honduras.

COMPONENTE 1: MEJORAMIENTO DE LA GESTIÓN COMERCIAL Y DE RECURSOS CORPORATIVOS DE LA ENEE. (U.S. $ 16.1 Millones FE + U.S. $2.4 Millones FN) Este se enfoca en el mejoramiento del desempeño comercial y corporativo de la ENEE, proveyendo a la compañía con herramientas de información para contar con una gestión moderna y eficiente de sus clientes y los servicios que provee. Este incluye las siguientes actividades: 1.1.1 Instalación de equipo de lectura automática de medición (AMR). 1.1.2 Instalación de un nuevo sistema automatizado de gestión comercial (SGC). 1.1.3 Implementación de un sistema de registro de incidencias (SGI). 1.1.4 Desarrollo de un Sistema de Gestión de Recursos Corporativos (SGRC) para toda ENEE.

COMPONENTE 2: REHABILITACIÓN DE REDES DE DISTRIBUCIÓN (U.S. $ 6.9 Millones FE + U.S. $7.2 Millones FN)

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Los objetivos de este componente consisten en mejorar la confiabilidad y reducir las pérdidas técnicas de los sistemas de distribución de la ENEE al fortalecer la red de distribución, las sub-estaciones, y el equipo de distribución para control de supervisión, control de voltaje y distribución (“switching”). Contempla el apoyo a los planes de inversión desarrollados por la ENEE para sus tres sub-regiones de distribución: (i) Centro-Sur, (ii) Nor-occidente, y (iii) Costa Atlántica. Los planes de inversión incluyen las actividades siguientes: 2.1.1 Sustitución de transformadores, compra de equipo de distribución relativa y eliminación de los

PCB’s. 2.1.2 Compra de equipos de mantenimiento, repuestos y materiales para redes de distribución

principalmente vehículos pesados.

COMPONENTE 3: FORTALECIMIENTO DE LA CAPACIDAD INSTITUCIONAL Y GOBERNABILIDAD CORPORATIVA DE LA ENEE (U.S. $ 6.9 Millones FE + U.S. $2.7 Millones FN) Este componente se centra en el fortalecimiento del contexto de gobernabilidad y financiero en que la ENEE opera: 3.1.1 Fortaleciendo la gobernabilidad del sector energético. 3.1.2 Analizando la sostenibilidad financiera de la ENEE, incluyendo estructura de tarifas y subsidios, y

desarrollo de una estrategia para operaciones comerciales (directamente relacionada con el trato con los clientes).

3.1.3 Implementando un programa de comunicación, extensión social y participación. 3.1.4 Gestión, monitoreo y evaluación, y auditorías

II. IMPLEMENTACIÓN A. Hitos Claves de Ejecución

Los hitos claves de ejecución se presentan en orden cronológico, marcan los aspectos más importantes en el desarrollo del Proyecto y su impacto en el cumplimiento de los objetivos e indicadores de desarrollo e intermedios del Proyecto previamente definidos.

2010 Los principales logros reportados: i) Unidad Ejecutora con dedicación exclusiva a la coordinación del proyecto con fondos de BM, dando

paso a la conformación de la unidad ejecutora del proyecto con personal técnico mínimo e inicio del trabajo en equipo con los responsables directos de la ENEE en cada proceso definido con anterioridad;

ii) Actualización de documentos de planificación necesarios para generar capacidad interna en la unidad ejecutora;

iii) Seguimiento y modificación a las especificaciones técnicas elaboradas en periodos anteriores; acercamiento y aceptación del organismo financiero de la nueva coordinación del proyecto;

iv) Delegación de la autoridad a la coordinación para llevar a cabo los planes definidos por el banco en sus objetivos;

La situación de “pausa” de la cooperación internacional y en este caso de BM con el Gobierno de la República, fue una limitante, ya que la efectividad del proyecto se declaró hasta el 29 de junio de 2010; la necesidad de reelaborar las especificaciones técnicas de los procesos más importantes del proyecto, licitaciones públicas internacionales para hacerlas más competitivas, fue otro aspecto que tuvo que ser superado.

2011

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i) Re-elaboración de las especificaciones técnicas de los principales procesos, que pesaban 63% de los fondos a comprometer ($16.2 millones), para lograr iniciar procesos de adquisiciones tanto nacionales como internacionales, así:

Sistema de gestión comercial, administración de recursos corporativos e incidencias, dirigidos a la

mejora de la gestión de la ENEE y a las prácticas comerciales, con un servicio orientado al cliente. Adquisición de equipos informáticos (390 computadoras para la parte comercial, equipamiento 30

puestos en la gerencia comercial, 50 puestos para operadores de call center, con 3 supervisores y 1 jefe, 54 puestos para las oficinas ENEE).

Adquisición de Sistema de Gestión de Datos de Medición (MDMS), Equipo de Medición Remota y Terminales Portátiles para la ENEE.

Adquisición de equipos de mantenimiento, materiales y repuestos.

ii) Modificación del Convenio de Crédito para que la ENEE coordine totalmente la ejecución del proyecto, lo anterior significó primeramente fortalecer a la Unidad Ejecutora de Proyecto - UEP-ENEE en el área de adquisiciones, para lo cual se contó con el apoyo inmediato del Banco a través de su especialista internacional de adquisiciones.

iii) El proceso de licitación para la adquisición de equipo de mantenimiento, repuestos y materiales para las

redes de distribución, incluyó la adquisición e instalación de transformadores, restauradores, seccionadores, reguladores de voltaje, medidores de corriente, indicadores de falla y video wall, para el centro SCADA de distribución. El proceso de licitación, hasta el informe de evaluación, estuvo a cargo de la SDP y no fue hasta noviembre 2011 que la UEP-ENEE, se hizo cargo de continuar con el proceso.

iv) Con el fin de generar la información que alimentaría el Sistema de Gestión de Incidencias, la UEP inició

el sub Proyecto Levantamiento, Digitación y Digitalización de la Red de un circuito de red primaria. v) Cancelación de US$ 2.4 millones, afectando las categorías elegibles del Convenio Financiero 2,3 y 4

con US$500,000, US$1,300,000 y US$600,000 respectivamente.

vi) La decisión tomada en junio de reestructurar el préstamo y el traslado de la capacidad fiduciaria de la SDP a la ENEE, hizo que los procesos de adquisición encaminados hasta el primer semestre del 2011 prácticamente estuvieran detenidos desde el mes de junio.

2012 i) El 24 de febrero de 2012, con la contratación del especialista internacional de adquisiciones se cumplen

las condiciones que hacen efectivo el traslado de la capacidad fiduciaria desde la SDP a la ENEE. El inicio de la ejecución presupuestaria, no fue posible hasta que la SEFIN ajustó el SIAFI-UEPEX.

ii) Considerando la magnitud de reformas que se proponían con la implementación del PROMEF, desde el

mes de mayo se dio paso al proyecto de Gestión del Cambio con la identificación de los equipos técnicos y gestores del cambio que acompañarían la implementación de las herramientas de gestión. Dicho proyecto lideró en dos talleres, la homologación de más de 120 procesos que constituyen el núcleo del negocio de distribución y comercialización. Producto de los talleres, la Sub Dirección de Desarrollo Empresarial, preparó el documento denominado “MANUAL DE PROCESOS Y PROCEDIMIENTOS” enmarcado en los lineamientos emitidos por la Oficina Nacional de Desarrollo Integral del Control Interno (ONADICI).

52

iii) En el marco de mejora institucional, la junta directiva de la ENEE aprobó en diciembre de 2012, el

proceso que mediante participación interna - externa y evaluación en base a perfil, permitiría conformar la nueva subgerencia de distribución y comercial junto con la estructura operativa requerida para su funcionamiento, como parte del PMG. Esta nueva estructura complementaría la implementación del SIG proyectado para finales del 2013.

iv) En el tema ambiental, durante este período se elaboró y suscribió una Carta de Entendimiento entre la

ENEE y CESCCO/SERNA, que estableció las acciones y mecanismos de cooperación acordados por ambas instituciones, a través de los cuales se facilitaría la coordinación de esfuerzos que permitieron el manejo adecuado de los transformadores, para que la ENEE cumpliera con los compromisos que establece el Convenio de Estocolmo.

v) El proceso de licitación para la adquisición del equipo de medición remota y MDM se llevó a cabo

recibiéndose No Objeción al Informe de Evaluación el 10 de julio y notificándose la adjudicación el 12 de julio de 2012 por US$3,489,056.55.

La dotación del equipo informático a las oficinas comerciales de la ENEE a nivel nacional relacionadas con la ejecución del Proyecto, llevada a cabo mediante un proceso de Licitación Pública Internacional, resultó en la adjudicación de 5 contratos por un monto total de US$969,636.20. Para la Adquisición del equipo del Componente II para el mantenimiento de la red, se llevó a cabo una licitacion pública internacional, que resultó en la adjudicacion de 2 contratos en febrero 2012 por un monto total de US$3,411,098.00, para la compra de transformadores, restauradores, reguladores de voltaje y material relacionado para su instalación. Como parte de los servicios conexos el proveedor impartió una capacitación de tres días en materia de restauradores. Para la adquisición de 19 Vehículos y 1 Grúa Articulada se llevó a cabo una LPI que resultó en la adjudicación de 2 contratos en septiembre 2012 por un monto total de US$646,253.43. La recepción de la grúa se realizó el 13 de diciembre de 2012.

En concordancia con los acuerdos establecidos en la Carta de Entendimiento con CESCCO, se llevaron a cabo 5 procesos de adquisición para la obtención de reactivos de PCBs, equipo para la protección de contaminantes, etiquetas autoadhesivas para identificación de transformadores contaminados con PCBs, y un montacargas (Hyster), para la carga y descarga de transformadores, por un monto total de: US$67,895.66. La licitación pública internacional para la adquisición del Sistema Integrado de Gestión se contemplaba para finales del mes de junio e iniciar contrato en el mes de julio del 2012. Sin embargo, en el segundo semestre del 2012, considerando que todas las propuestas económicas superaron significativamente el presupuesto base, el proceso se declaró fracasado. Razón por la cual se procedió a revisar las Especificaciones Técnicas con miras a lanzar un nuevo proceso de licitación, obteniendo no objeción al Documento Base de licitación el 21 de diciembre y publicado el día 24 de diciembre de 2012.

vi) Durante el mes de Septiembre, en el marco de la gestión del cambio para el fortalecimiento institucional

y la gobernabilidad corporativa, se desarrollaron dos talleres: • Taller de capacitación para la implementación del Balanced Scorecard, Tablero de comando y tablero

de gestión. • Taller de planificación estratégica mejora de la productividad en la ejecución del tablero de gestión

para garantizar el logro de las metas estratégicas

53

2013 i) El gobierno por medio del Ministro de Energía y GG de la ENEE, confirmó que los arreglos

visualizados como parte de la iniciativa de tercerización de servicios de la ENEE no tendrían implicaciones negativas sobre la efectividad de los SIG en proceso de licitación (párrafo 7. AM abril 2013); acordando con BM, que las inversiones por más de 12 MM de USD a ser realizadas a través de PROMEF para la adquisición y puesta en marcha del SIG serán parte integrante de cualquier eventual gestión tercerizada de servicios ya que esta inversión corresponde a criterios de eficacia y eficiencia en el uso de los recursos IDA prestados por BM (párrafo 16, N3-AM abril 2013).

ii) En Junio 2013 se llevó a cabo la revisión de cartera y evaluación intermedia del Proyecto.

Considerando que el plazo de vigencia del crédito era diciembre de 2013 y dada la presencia de la Misión de Supervisión y Evaluación de Medio Término del crédito (3-7 junio 2013) se pusieron a consideración de BM las situaciones acontecidas desde: i) la conceptualización del crédito; ii) entrada en vigencia; iii) reestructuración vivida; iv) desarrollo de la unidad ejecutora; v) situación de País, y su impacto en la implementación del proyecto. La Misión concluyó que alcanzar los objetivos del proyecto en 5 de 11 indicadores, a la fecha actual de cierre de diciembre de 2013, no sería posible, debido a los siguientes factores: La conceptualización de 4 años para implementación del crédito, considerando la complejidad de la

realidad institucional y del sector, apuntaba a que debía ser al menos de 5 años. La pausa vivida por el país después de junio del 2009, retrasó el inicio de implementación del

proyecto en un año completo. La finalidad primordial de transparentar los procesos licitatorios, conllevó redefinir bases de licitación

para los procesos de Medición Inteligente, Sistema Integrado de Gestión, Equipo Informático, Equipos y Materiales Eléctricos, entre otros, lo que tomó casi 6 meses.

El proceso de saneamiento de la información financiera de la ENEE, a pesar del apoyo recibido por el BID, requería una nueva estructura funcional del área de recursos corporativos para garantizar la implementación del nuevo sistema de gestión.

La adjudicación del SIG, que representó la columna vertebral del PROMEF, se vio postergada debido a que el proceso de adquisición inicial fue declarado fracasado. La adjudicación del segundo proceso se otorgó en mayo 2013, representando un atraso de más de un año. La implementación del Sistema, de acuerdo a la experiencia en procesos similares en otros países, tomaría aproximadamente un año, por lo que se estimó que estaría concluida en junio 2014 y requeriría de un año adicional, para que su impacto fuera significativo.

iii) En septiembre de 2013, dio inicio la implementación del SIG incluyendo la socialización de la integración

del modelo conceptual de negocio que se deseaba implementar, con el personal del área de D&C, SGAF, Infotecnología, GG, RRHH, área técnica de generación y transmisión.

2014 i) En el mes de enero de 2014 el Congreso Nacional aprobó la nueva Ley de la Industria Eléctrica

cuyo contenido en el artículo 29 manda una modernización en la Organización de la ENEE que genera una vinculación con los objetivos del PROMEF.

79. ii) En el mes de febrero, se efectuó la validación del Modelo de negocio (BBP) definido a finales del

2013 y se inició el proceso de capacitación a más de 450 personas en el uso de los diferentes módulos del SIG.

54

iii) A la fecha de suscripción del contrato entre la ENEE y la firma consultora para la implementación

del SIG la ENEE tenía vigente un contrato con el consorcio SEMEH, en el cual se incluían aspectos asociados a la gestión comercial de la ENEE. En vista de lo anterior, la ENEE se comprometió a gestionar entre ambos consorcios: SEMEH y el Proveedor, para la construcción de una interface entre el Sistema actual de la ENEE que interactuara con un Sistema desarrollado con SEMEH y 2 de los elementos que el Proveedor desarrollaba: El Sistema de Gestión Comercial (SGC) y el Sistema de Gestión de Incidencias (SGI). El objetivo de la gestión a la cual se comprometió la ENEE fue garantizar el correcto funcionamiento SGC y del SGI que contractualmente el Consorcio de la Firma Consultora suministraba a la ENEE.

80. iv) A solicitud de la SEFIN y en coordinación con las directrices del Gabinete Económico, se

reorientaron los fondos del programa de comunicación, extensión social para consumidores a la línea de acción: Modernización de la ENEE para crear las unidades de negocio: generación, transmisión, operación del sistema y distribución.

81. v) Con la finalidad de asegurar la implementación del SIG del 21 al 22 de mayo, se llevó a cabo una

Misión de Supervisión de BM, que contó con la participación del Gabinete Económico, funcionarios de SEMEH, ENEE y particularmente del equipo líder de implementación de los SIG y personal técnico de PROMEF. Los principales temas tratados, giraron alrededor del estado de implementación de los Sistemas, requisitos necesarios para continuar y completar exitosamente la instalación, ratificación de apoyo del Gabinete Económico. El Gobierno Central hizo una reasignación como contraparte del proyecto, para cubrir necesidades de equipamiento para redes y comunicaciones (U.S. $2,600,000.00) indispensables para el adecuado funcionamiento de los SIG y para la adquisición del software para detección de pérdidas en la red eléctrica (U.S. $ 400,000.00).

vi) El 16 de junio se llevó a cabo el lanzamiento del SGRC, incluyendo los procesos de contabilidad,

finanzas, presupuestos, compras, mantenimiento, tesorería, recursos humanos, gestión de proyectos y administración de materiales y repuestos, al que se convocó a los subgerentes de las diferentes oficinas regionales, subgerente AF, director de planificación, directora interina de RRHH, y Gerente Técnico de la ENEE.

vii) En el segundo semestre del año, continuaron las reuniones entre SEMEH-ENEE, para

calendarizar a nivel detallado las actividades necesarias para lograr la implementación del SIG en TGU y Comayagüela, al 1 de agosto de 2014 y a nivel nacional el 1 de octubre.

viii) En el proceso de reestructura, para la separación de las áreas de negocios conforme a lo

establecido en la nueva ley de la industria eléctrica en Honduras, se contrató a la firma consultora HQ Solutions para apoyar el proceso culminando el 13 de Octubre del 2014, la Junta Directiva de la ENEE, con el fin de iniciar el proceso de escindir la ENEE para modernizarla, en cumplimiento a lo estipulado en el artículo 29 de la Ley General de la Industria Eléctrica, aprobó la estructura funcional del nuevo grupo empresarial ENEE: la nueva estructura del grupo empresarial, incluye estructura organizacional propuesta inicialmente para la Gerencia de Distribución y Comercial-D&C; Sub Gerencia Administrativa y Financiera-SGAF; Dirección de Recursos Humanos-RRHH; Unidad de Tecnologías de Información y Comunicaciones-UTIC).

ix) El 16 de diciembre de 2014 se firmó el Informe de Aceptación Operacional de los SIG.

55

2015 i) A mediados de febrero se obtuvo el permiso de construcción para iniciar la construcción de la Bodega

de Almacenamiento para los transformadores contaminados con PCBs. El certificado de terminación de la obra a satisfacción, fue emitido el 18 de junio de 2015, con un costo final de L. 5, 486,634.57.

ii) En el mes de marzo, se efectuó una reunión con los gerentes regionales para certificar la entrada en

operación y uso del Sistema de Gestión Comercial, SGI y los requerimientos para el uso del ERP-SAP.

iii) En el mes de Abril se concluyó la emisión de los estados financieros 2014 con apoyo de la firma DES Consulting.

iv) En el mes de mayo se realizó la recepción de las últimas adquisiciones del equipo para redes de

comunicación, máquinas calibradoras de medidores y las licencias adicionales del software para la detección de pérdidas de la red eléctrica.

v) Dentro de los compromisos a la ENEE y en base al acuerdo de cooperación interinstitucional SERNA-

ENEE, estaba pendiente completar la capacitación de personal especificado por cada uno de los jefes de las Gerencias Regionales, involucrados en cualquiera de las actividades de operación, mantenimiento y manejo de los transformadores y/o material relacionado. El taller se convocó en forma conjunta con el proyecto COPs2, Prevención y Riesgos y la Unidad Ambiental de la ENEE y donde se compartió la experiencia realizada el primer trimestre del 2015, la disposición final de 113 toneladas de material contaminado con PCB´s, donde el mayor porcentaje del equipo eliminado procedió de la ENEE, de los transformadores en desuso inventariados y confirmados con PCB´s, a través de análisis cuantitativos de CESCCO. La eliminación la realizó una firma española quién durante el taller compartió la experiencia del proceso pionero de eliminación de PCB´s en Honduras. La agenda desarrolló además, temas sobre el efecto de los PCB´s en la salud e impacto en el medio ambiente, marcos legales y el manejo racionalmente ambiental.

vi) En relación a la reestructura planteada para el fortalecimiento institucional de cara a la gobernabilidad corporativa de la ENEE, se logró la aprobación no solo de los puestos inicialmente considerados al estructurarse el PROMEF, sino de la nueva estructura organizacional del nuevo grupo empresarial ENEE.

vii) Los principales retos identificados para la sostenibilidad del proyecto han sido: i) el uso del ERP dentro

de la Empresa y la elaboración de los estados financieros a través del sistema; ii) la instalación del sistema de gestión comercial en las oficinas de SEMEH eliminando el uso del sistema paralelo 390.

viii) Aunque las gestiones ante el banco concluyen el 31 de octubre los Recursos de contrapartida

continuaran desembolsándose hasta el cierre del año, al 31 de octubre se habrán desembolsado US$11.48 millones (93.37%) y los recursos alcanzaron un nivel de compromisos del 99.5% US$12.24 millones.

ix) En septiembre concluyó la Auditoria de Adquisiciones. Los informes de Auditoria Especial en

Adquisiciones son producto de la revisión del 100% de los procesos de adquisición y contratación, y reflejó que la Unidad Ejecutora de Proyecto Banco Mundial llevo a cabo los procesos de contratación en apego a la normas de Contratación del Banco Mundial, asegurando que el importe del crédito se destinara únicamente para los fines concebidos, atendiendo los criterios de economía, eficiencia, libre competencia y transparencia.

56

III. EVALUACIÓN FINAL B. Cambios en la Situación del País Posterior a la formulación del PAD del PROMEF (diciembre de 2008), incluyendo su objetivo y componentes; la Republica de Honduras tuvo un proceso político complejo que produjo profundos cambios en materia política y de gobernabilidad, este proceso dejó huellas institucionales profundas que hicieron cambiar drásticamente la situación del país. Este proceso impactó claramente en las condiciones preexistentes con las cuales se elaboró el PAD y marcaron distorsiones en el proceso de ejecución del PROMEF.

Fideicomisos Vigentes Al cierre del 2012 e inicios del 2013, con la finalidad de buscar un alivio a la crisis financiera de la ENEE y su impacto en el déficit del país, en el marco de un Plan de Rescate de la ENEE que debería ser aprobado por el Congresos Nacional surge la creación de un esquema fiduciario para la reducción de pérdidas en los componentes de: (i) alumbrado público, (ii) transmisión-despacho, (iii) Distribución de la energía provista por la ENEE; lo anterior en coordinación con la SEFIN y aprobado por el Congreso Nacional. Dentro de este marco, los operadores establecidos por dichos Fideicomisos mediante las correspondientes Licitaciones Públicas Internacionales (LPI) llevadas a cabo por la Comisión para la Promoción de la Alianza Público-Privada (COALIANZA) del GOH, potencialmente podrían absorber total o parcialmente las nuevas estructuras organizativas propuestas, con su respectivo personal seleccionado para las empresas de transmisión y de distribución, o bien quedar las mismas como la contraparte del Grupo Empresario ENEE para lograr el fiel cumplimiento de lo establecido en las LPI mencionadas anteriormente, para los futuros operadores.

Nuevo Marco Regulatorio de la Industria Eléctrica

Ley general de la Industria Eléctrica. Esta nueva ley fue introducida en noviembre 2013 y aprobada el 20 de mayo de 2014 y cambió completamente el funcionamiento de la industria eléctrica en la República de Honduras. Antes de la emisión de la Ley General de la Industria Eléctrica, la ENEE era una empresa estatal verticalmente integrada, a partir de la creación de la nueva ley, se ordena su separación en una empresa de generación, una de transmisión y operación del sistema y al menos una de distribución, todas propiedad del Estado por medio de la ENEE como empresa matriz. La mejora operativa y financiera de la ENEE por medio de los componentes del PROMEF, tuvo que interactuar con visiones que se contraponían, con soluciones en discusión de participación privada que iban desde el extremo de privatización, concesión sindical o inversionistas operadores con garantía fiduciaria para el repago de inversiones. Lo anterior también incidió en que las inversiones necesarias por parte de la ENEE en optimización de la red y medición para la reducción de pérdidas, fueran postergadas por el gobierno de la república. No obstante lo antes expuesto, la participación de 2 gerentes de la ENEE en el periodo 2010-2013, sostuvieron la prioridad de implementación del PROMEF, pero la incertidumbre en el sector y particularmente de la población al interior de la ENEE, genero un des aceleramiento en el efecto de cambio que se buscaba con la implementación de herramientas de gestión y nueva estructura funcional. La conformación de un nuevo ministerio sectorial de servicios públicos a cargo de la ENEE a partir del 2014, impulso nuevamente la implementación de las herramientas de gestión y gracias a ello se pudo lograr la instalación y aceptación operacional de las mismas, no obstante, el inminente periodo de cierre del proyecto, no permitió que los efectos de contar con la maduración en la implementación de las herramientas bajo la nueva estructura funcional, permitieran la implementación de las nuevas metodologías de trabajo, que pudieran derivar en mejoras de los indicadores de calidad del servicio (SAIDI, SAIFI) y del índice de recuperación de ingreso (CRI). El marco de resultados final del proyecto, se presenta a continuación.

57

MARCO DE RESULTADOS

Marco de Resultados PROMEF Línea base

Estimación valor Meta

Indicador dic-12 15-Jun

Indicadores relaticos a los objetivos de Desarrollo del Proyecto

1. Incremento del índice de recuperación de

efectivo (CRI) Por defini r Definida Línea Base : 0.63 0.67

8% de mejora sobre la l ínea base

2 Reducción anual en el índice de duración de interrupciones (SAIDI)

Por defini r Definida l ínea base : 13.55 horas por cl iente 23.12 (1) mejora anual

3

Reducción anual en el índice de frecuencia

de interrupciones (SAIFI)

Por defini r Definida línea base: 20.22 veces por

cl iente 33 mejora anual

4 Pérdidas de

electricidad por año (indicador básico BM)

22.50%

DIC 2011 = 27%,

31.18% 15%

Diciembre 2012 = 29%

La decis ión de telemedir los primeros 5,000 a ltos consumidores

que representan el 45% de la factura , deberá incidi r en el tema de reducción de pérdidas en a l

menos un 1% a l cierre del 2013, s i se acompaña con un plan

estratégico de reducción de pérdidas .

Matriz de Indicadores Intermedios

Componente 1: Mejoramiento de la Gestión Comercial y Corporativa de la ENEE

1 Número de s i s temas

de lectura AMR insta lados

30,000

A la fecha exis ten cerca de 41,000 medidores inteligentes instalados , s in embargo solo se encuentran cerca de 250 dentro de los primeros

5,000 a l tos consumidores . El PROMEF está adquiriendo 4,140 para acercarnos a telemedir los primeros 5,000 a ltos consumidores, lo que permitirá controlar el 45% de

la factura de la ENEE.

4810 47% del total de la factura

de la ENEE

58,600 (este indicador fue modi ficado para que la cobertura de medición fuera el 45% del total de la factura , lo cua l apunta a los primeros 5000 a l tos

consumidores)

2

Sis temas de Gestión Comercial, Gestión de Incidencias y Gestión

de Recursos Corporativos

instalados y operando a satis facción

Los s istemas no

están instalados

No estarán insta lados

Sis tema insta lado y funcionando

correctamente. Presupuesto 2015 cargado en el ERP

permitiendo eva luar ejecución mensual ,

trimestral y semestral por centro de costo

Sis temas insta lados y funcionando

correctamente

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3

Número de empleados de la ENEE

capacitados para usar el Sistema de Gestión Comercial, Sistema de Gestión de Incidencias y Sis tema de Gestión

de Recursos

0

GC=0 450 GC: 50

GI=0 37 GI: 10

GR=0 250 GR: 20

4

Número de clientes en la base de datos del s i s tema de lectura

AMR y de Gestión de Incidencias

0 66% 40% del tota l de

cl ientes

5

Número de reclamos de cl ientes

relacionados con la facturación

Por defini r 90.17% 95% Mejora en el va lor

semianual

Componente 2: Rehabilitación de Redes de Distribución

6 Número de

transformadores insta lados

0 370 1000 Tota l : 1,000

7 Número de equipos

con PCBs reemplazados

0 6 368 Tota l : 350

8 Número de vehículos pesados adquiridos 0 20 31 Tota l : 31

Componente 3: Fortalecimiento de la Capacidad Institucional y Gobernabilidad Corporativa de la ENEE

9 Establecimiento y

operación de unidades de negocio separadas

No exis ten En proceso de estructuración los Centros de Costos de la ENEE

Sis temas insta lados y funcionando

correctamente con Unidades operativas en

anteproyecto de presupuesto 2016.

Unidades operativas

10

Establecimiento y operación de la

Unidad de Dis tribución y

Comercia l i zación

No exis ten No exis te

Unidad de Dis tribución y Comercial insta lada y en proceso nombramiento

de reestructura

Unidad operativa

11

Selección competitiva del personal clave de

la Unidad de Dis tribución y

Comercia l i zación: incluye 3 gerentes y

10 miembros del personal clave

No exis te

Personal seleccionado en forma competi tiva en la Unidad de

Dis tribución y Comercia l .

Unidad de Dis tribución y Comercial insta lada y en proceso nombramiento

de reestructura

Personal contratado

59

12 Grado de satisfacción y percepción de los

cl ientes

Definida l ínea base

Iniciada aplicación de l ínea base Segunda medición

rea lizada. (percepción en genera l es regular)

Mejora en el va lor medio anual

Ejecución Física y Financiera Fondos Externos Al 30 de junio 2015, se lograron desembolsar US$ 27,992,017.40, alcanzándose así un nivel de desembolso de 101.42% de los US$ 27.6 millones originales del crédito, obteniéndose una ganancia en los Derechos Especiales de Giro (DEG) de US$ 392,017.40, llegando a comprometer así los recursos en US$ 27,992,017.09, quedando un devolución de aproximadamente US$ 0.31 de la cuenta designada. Fondos Nacionales Respecto a los Fondos de contraparte se han logrado comprometer a la fecha US$ 12, 233,454.73 (99.45%) de los US$ 12, 300,000.00 contractualmente establecidos, con un nivel de desembolso de US$ 9 602,622.37 que representa el 78.07% del aporte nacional, este monto incluye inversiones por US$ 3,5 que fortalecerán la Red de Distribución.

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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders n.a.

61

Annex 9. List of Supporting Documents Power Sector Efficiency Enhancement Project (PROMEF), Project Appraisal Document (PAD), December 15, 2008. PROMEF Financing Agreement, February 27, 2009. First amendment to Financing Agreement, June 17, 2010. Second restructuring (2011):

• Aide memoire of meeting between Ministry of Finance, SDP, ENEE and the Bank to discuss proposed second restructuring, July 22, 2011.

• Analysis on impact on indicators and results framework of proposed restructuring (“Análisis de Cumplimiento e Impacto de los Indicadores de Resultado Intermedios y Finales del Proyecto, considerando los tiempos de implementación real del mismo”). Project Execution Unit (PEU), August 2013.

• Restructuring Paper, September 27, 2011. • Second amendment to the Financing Agreement, October 3, 2011.

• Letter from Government requesting partial cancellation of fund to reallocate resources for a new DPC. DGIP-190/2011.

Aide memoire mid term review, June 2013. Third restructuring (2013):

• Results framework (April 2013) • Analysis on achievement and impact on indicators and results framework taking

into consideration implementation time (“Análisis de Impacto sobre los Indicadores de Resultado Intermedios y Finales Producto de la Reestructura Financiera Acordada para el Proyecto de Mejora de la Eficiencia del Sector Eléctrico en Honduras, PROMEF”). Project Execution Unit (PEU), August 2011

• Restructuring Paper, November 18, 2013

New Electricity Law (May 2014) ISR 5 to 11 (2011-2015) Safeguards:

• Ayuda Memoria Final-promef Misión Marzo 2014 • Ayuda Memoria promef-rtiffer Junio 6, 2013 • Ayuda de Memoria videoconferencia-promef nov20, 2012 • VC PROMEF-PCBs-Honduras-Agosto 2, 2013 • TORs Supervision PCB • Informe Gestión Ambiental PROMEF

Project Closing Reports prepared by consultants for PEU:

• Component 1 Final Report, and Annexes (Ariel Carlos Acevedo Delor, July 24, 2015)

62

• Component 2 Final Report (Mario Ruben Zelaya, June 2015) • Component 3 Final Report (Gustavo Vullo, May 2015)

PROMEF, AMR data Management and Monitoring (PRISMA):

• Evolución de patrones de comportamiento en clientes PRISMA, March 2015 • Informe de Actividades PRISMA, August 2015

PROMEF Report for first semester 2015 (draft), PEU, July 2015 Analysis of SAIDI, SAIFI and CRI 2009-2014, PEU/ENEE, September 2015 Consumer Perception Report and survey forms (July 2015) PCB cleaning and disposal report under PNUD Project (August 2015)

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Annex 10. Comments on Issues Raised by Implementing Agency

Después de un análisis al borrador de Informe Final de Ejecución recibido, es importante destacar que en la evaluación final de los diferentes actores, el desempeño de la UEP es calificado como Moderadamente Satisfactorio; siendo la del Banco, en su calidad de garante, supervisor y evaluador general: Moderadamente Insatisfactorio; el prestatario (Gobierno de Honduras), desde la óptica de rendimiento y evaluador: Moderadamente Insatisfactorio.

I.- ANÁLISIS DEL MARCO DE RESULTADOS:

La página 7 evidencia:

• Que se alcanza el 79.3% de la meta trazada de mejora del CRI.

La página 8 evidencia:

• Se alcanza el 96.2% en la instalación de AMR • Los Sistemas (Comercial, Incidencias y ERP) fueron instalados en la ENEE y

trabajan satisfactoriamente. • Se sobrepasó sustancialmente la meta de capacitación a personal de la ENEE en

el uso de los sistemas (Comercial, Incidencias y ERP).

Especial énfasis lo expresado en la Página 9, en el sentido que no obstante las Unidades de Negocio han sido aprobadas, aún no están operativas y se requiere que se estructure el presupuesto 2016 en función de estas unidades para que sean realmente operativas.

La página 11 presenta una caída sustancial en el Informe de situación de implementac ión de octubre 18 2014 a 18 de febrero del 2015, pese a que el nivel de ejecución en desembolsos creció en 3.32 millones. No se pudo observar la gráfica del perfil de desembolso.

II.- CONTEXTO DE PROYECTO, OBJETIVOS DE DESARROLLO Y DISEÑO:

A) FACTORES CLAVE QUE AFECTARON LA EJECUCIÓN Y RESULTADOS:

En este apartado, de cara a incorporar en el informe final y las posteriores reuniones de análisis al interior del Gobierno de Honduras, es importante destacar:

19: El diseño del proyecto fue concebido y alineado con la Estrategia de Gobierno en el sector eléctrico, pero su diseño fue centrado en la calidad del servicio, las reducciones ambiciosas de pérdida y mejoras en la gobernanza, incluida la reestructuración de la ENEE, lo cual requería un acompañamiento fuerte del gobierno en materia financiera (inversiones) y apoyo político.

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20: El Banco Mundial baso su participación en los planes de mejora de la ENEE considerando su experiencia en el apoyo a la introducción de sistemas y tecnologías modernas para reducir las pérdidas de electricidad, situación que, aún y cuando hay transformación en el sector, debe ser un elemento que el gobierno debe apoyar.

25. Cambios en el contexto del marco político y jurídico resultaron en demoras significativas en la ejecución del proyecto. La compleja situación política en Honduras entre junio de 2009 y enero de 2010, hasta un par de meses después de que el nuevo Gobierno tomara posesión, retraso la eficacia del proyecto y la puesta en marcha de los acuerdos institucionales. Cuando la ejecución del proyecto cobró impulso, el Gobierno introdujo una nueva Ley de Electricidad (2014) que exige la reestructuración y la desagregación de la ENEE en un holding con filiales para cada actividad. Además, el Gobierno estableció fondos fiduciarios específicos por actividad, con el mandato de encontrar un inversor internacional, con capacidad para operar los diferentes negocios desagregado de la ENEE (Generación, Transmisión y Distribución). El proyecto, además los retrasos ya incurridos tuvo que adaptarse al nuevo entorno. La incertidumbre creada en el sector por la nueva Ley, con arreglos operacionales poco claras entre la ENEE y los nuevos operadores de venir, introdujo una complejidad adicional a la implementación del proyecto.

28. El Banco ha estado vigilante para garantizar la sostenibilidad de las inversiones del proyecto. Con la nueva Ley de Electricidad promulgada en 2014, existe incertidumbre sobre la estructura final de la ENEE y los acuerdos con los nuevos operadores. El Banco ha insistido en la necesidad de asegurar las inversiones efectuadas y el Gobierno se ha comprometido a este esfuerzo. Actualmente hay conversaciones sobre una nueva operación con el banco que incluye el aseguramiento de las inversiones realizadas con PROMEF.

31. La tercera reestructuración extendió la fecha de cierre para completar la implementación de los sistemas e iniciar el funcionamiento de la unidad de distribución y comercialización. El Banco reconoció el riesgo de nuevos enfoques para introducir la participación del sector privado, y requirió la confirmación del compromiso del Gobierno con el Proyecto. Durante el análisis de la 3ra reestructuración se determinó que los objetivos de desarrollo y los indicadores de resultados intermedios del proyecto no se verían afectados a junio de 2015. La reestructuración perdió la oportunidad de revisar los indicadores que podrían ya no ser alcanzados

B) DISEÑO DEL MONITOREO, EVALUACIÓN, IMPLEMENTACIÓN Y USO:

32. Previo a la entrada en operación del proyecto, no se cuantificaron las líneas de base y se quedaron sin determinar en la mayor parte de la fase de implementación. Debido a la falta de sistemas de información confiables al interior de la ENEE, el Banco Mundial y la UEP acordaron aplazar el establecimiento de líneas de base hasta que las inversiones en el Componente 1 se realizaran y los sistemas fueran implementados, tal y como se había

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establecido en el PAD, que los datos de seguimiento del proyecto se obtendrían de esos sistemas.

Una situación lamentable, pero real, es lo expuesto en el numeral 33:, cuya redacción podría ser mejorada: ….. Los indicadores nunca jugaron su papel como herramienta de supervisión y los equipos del banco y la UEP pese a sus intervenciones ante el Gobierno de Honduras para que se evitara el deterioro de los mismos, permaneció a la espera de la ejecución de las inversiones en el Componente 1…..

No obstante lo anterior, es importante potenciar los siguientes elementos:

38:…… La capacidad al interior de la UEP y el apoyo del banco para reforzar estas capacidades, permitieron que el proyecto cerrara con auditorías limpias y sin problemas pendientes en sus Estados Financieros.

39. El proyecto construyo capacidades al interior de la ENEE para asegurar la operación continua y el uso de los nuevos sistemas implementados. El proyecto superó el número previsto inicialmente del personal de la ENEE entrenados en los nuevos sistemas. La unidad para la recuperación de Ingreso sostenible con medición automática, (PRISMA), en funcionamiento desde 2014, ha desarrollado su experiencia en la gestión del sistema y en la evaluación de sus resultados. También se brindó capacitación para el manejo de materiales contaminados con PCB, en consonancia con las normas internacionales.

Es importante aprovechar el proceso de socialización con el gobierno de Honduras para potenciar la nueva operación delineada en el párrafo 40.

III.- LOGRO DEL OBJETIVO DEL PROYECTO: Mejoramiento operativo y financiero de la ENEE, contribuyendo así a la sostenibilidad del sector energía.

44: A la fecha de cierre, los resultados que se pueden atribuir al Proyecto son las pérdidas técnicas inferiores (frente sin el proyecto), como se describe en el Anexo 2, y la reducción de las pérdidas comerciales. En este sentido es relevante destacar que durante los primeros 18 meses de funcionamiento de la Unidad de PRISMA, USD 57 millones se han recuperado de los problemas asociados a facturación, el fraude y el robo de electricidad de los mayores consumidores

A) MEJORAMIENTO OPERATIVO:

45. Mejora del Desempeño Operativo: Resultado de la inversión física para rehabilitar el sistema de distribución en el Componente 2 han sido superados, lo que contribuye a reducir las pérdidas técnicas y una mejor calidad de servicio evidenciado en los indicadores SAIDI y SAIFI.

ENFOCARSE EN EL TITULO 46. El alcance y los resultados del Componente 3 fue mixto; afectados por la nueva Ley, entrada de nuevos actores (Fideicomisos) y la

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reducción en la asignación de los fondos, los indicadores finales no se alcanzan, y no se efectuaron las campañas de comunicación y contacto con el consumidor.

B) MEJORAMIENTO FINANCIERO:

47. Mejora del rendimiento financiero: El desempeño financiero medido por el índice de recuperación de efectivo (CRI) y las pérdidas se han deteriorado desde la preparación del proyecto, pero el programa de AMR y protección de los ingresos sobre la base de Componente 1 Sistemas (PRISMA) proporcionan una plataforma sólida para la mejora continua

C) SOSTENIBILIDAD DEL SECTOR ENERGÍA.

48: El proyecto tiene la posibilidad de contribuir a la sostenibilidad del sector energía y la estabilidad fiscal de Honduras:

1) Ha dotado de herramientas de gestión que mejoran la toma de decisiones (SGC, SGI y ERP)

2) Instaló una unidad antifraude (PRISMA)

3) Dotó de la capacidad de emitir Estados Financieros con información confiable (ERP).

Además se evidencia la relevancia del proyecto para Honduras, ya que:

1) El FMI determinó la inclusión de la sostenibilidad del sector de energía como clave para la estabilidad macroeconómica del país

2) El BID requirió el uso de las herramientas de gestión en la auditoria a los Estados Financieros de la ENEE

3) El gobierno determinó de suma importancia la información emanada del SIG en el proceso de búsqueda de un operador del área de distribución.

D) OTROS ELEMENTOS

51. Como complemento a la unidad de PRISMA, las inversiones en SGC, SGI y el software de gestión de la distribución han dotado a la ENEE con las herramientas para combatir las pérdidas no técnicas. A medida que avanzan los beneficios por el análisis de informac ión de datos de los sistemas (SGC, SGI, y Software de gestión de la distribución), los equipos contraparte y usuarios al interior de la ENEE adquieren mayor conocimiento para crear e implementar estrategias diferenciadas para combatir las pérdidas no técnicas; con acciones de prioridad para cada circuito de la red de distribución, y así lograr la reducción de pérdidas. Pese a lo anterior, se requieren acciones gerenciales para que los sistemas se posicionen como las herramientas que facilitan la toma de decisión.

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58. La sostenibilidad de los resultados obtenidos deben ser monitoreados y protegidos cuidadosamente. Las herramientas de gestión han sido implementadas pero sólo el uso diario de estas herramientas en la gestión de la ENEE puede producir los restantes resultados esperados del proyecto.

60. El Gobierno podría imponer obligaciones de la adopción de los sistemas financiados por PROMEF al nuevo operador de la actividad de distribución y comercialización

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