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Appendix DLessons from Completed Transmission and DistributionProjectsAlthough little evidence is currently available from transmissionand distribution projects approved by the WorldBank over 2003–08, evaluation lessons can be drawn fromprevious Bank projects and reform efforts outside theBank.Review of these projects provides some lessons:Large reductions in technical and nontechnical losses arefeasible but are not always achieved.A $201 million 2000–04 Bank project in Uttar Pradesh,India, was successful in its technical component (increasingcapacity and reducing losses) but unsuccessful in overallpower sector reforms because of a change of government.The project was successful in reducing technical losses,from 41 percent in 2002 to 32.8 percent in 2004 (thoughstill behind a target of 30.4 percent) but unsuccessful atreducing nontechnical losses, which remained at roughly11 percent. The ex ante project rate of return was appraisedat 29 percent, and the ex post rate of return was estimated at18 percent (rising to 25 percent when gains to nonbilledconsumers are included); the shortfall was due to a moreconservative valuation of power.Success depends crucially on local utility implementation,particularly for nontechnical loss reductions. It is difficultto reduce nontechnical losses without a local reform“champion.”A $40 million Bank power sector rehabilitation project inAlbania carried out over 2005–06 demonstrated weak resultsbecause of poor management by local utilities. Theproject was designed to increase use of on-grid power andto reduce transmission and distribution losses and outages.The project failed to achieve sustained target improvementsin loss reductions or bill collection. Total losses fell from44.8 percent in 2001 to 39.7 in 2004, but they increased to41 percent by 2006. Technical gains were difficult to estimateand were offset by increases in nontechnical losses.The economic impact of the project was poor, as expectedincreases in electricity sales did not eventuate.Power sector restructuring alone has not been sufficientto improve transmission and distribution performance incountries with high losses.A reform project in Andhra Pradesh, India, carried out bythe state government (without Bank support) over 2000–03had major success in reducing nontechnical losses (Bhatiaand Gulati 2004). The state utility was in poor financial condition,with losses of $0.9 billion in 1997. Despite powersector restructuring, new distribution utilities remainedweak, billing only 42 percent of the power entering theirsystem because of losses and nonmetered agricultural users.The utility companies undertook major institutionalchange, replacing meters and introducing remote- meteringtechnology. Irregularities in billing and metering werefound for 15 percent of the 23,000 industrial connectionsinspected in 2000–01. Total transmission and distributionlosses were reduced from 38 percent in 2000 to 26 percentin 2003 through reductions in nontechnical losses caused byregularization of 2.25 million unauthorized connections.Impacts of transmission projects are tied to activity inthe generation sector. Power planning requires a systemsapproach. Separating transmission from generation isdifficult because of their complementarity.A Bank-supported transmission development project inNigeria (carried out over 2004–08) highlights the impact ofthe generation sector on transmission investment economicreturns, as well as the potential vulnerability of loss reductiongains. The project was designed to respond to criticalpower needs in Nigeria and an urgent request for assistancefrom the newly elected democratic government. It aimed toimplement a major transmission system investment whilesupporting power sector reforms, including commercializationof the power sector. The project was also motivatedby the Bank’s desire for involvement in the power sectorreform process. Total project cost was $122 million ($103million from the International Development Association).Transmission infrastructure investments reduced technicallosses from 11 percent to 8 percent in 2007, but lossesrebounded to nearly 9.5 percent by 2008 because of acombination of poor maintenance and increased powertransmitted through the system transmission. Althoughsignificant gains were made in system reliability, the projectedeconomic benefits were not realized because powergeneration did not increase by enough to take advantage of102 | Climate Change and the World Bank Group
the new capacity. Transmission system collapses were reducedfrom 15 in 2000 to 5 in 2008. The project claimed aneconomic rate of return of 29.2 percent and a net presentvalue of $76.9 million. However, these calculations assumedthat grid users would switch from expensive off-grid powerto cheaper on-grid power, which has not yet happened.A Bank project in Kazakhstan further demonstrates theinterplay between generation and transmission and apotential problem with using “percentage loss” project targetsas a measure of project performance. The project wasimplemented over 2000–05 and added significant transmissioncapacity to the system. The goal was for transmissionlosses to drop from 5.8 percent in 1998 to 5.0 percent by2005, but losses actually increased to 6.9 percent in 2005and 6.2 percent in 2006. However, this increase in losseswas due to a 40 percent increase in generation over the period,which was the result of a booming economy. Higherpower generation causes higher transmission losses, as linesbecome congested. Without the transmission investmentsfrom the project, losses would have been even higher.Appendix D: Lessons from Completed Transmission and Distribution Projects | 103
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Phase II: The Challenge of Low-Carb
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CLIMATE CHANGE AND THE WORLD BANK G
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Table of ContentsAbbreviations . .
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Figures1.1 GHG Emissions by Sector
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AcknowledgmentsThe report was prepa
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Executive SummaryUnabated, climate
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esettlement plans has been ineffect
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of some technologies, such as landf
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Scale up high-impact investmentsEne
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should have been strengthened in th
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Major monitorable IEGrecommendation
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Major monitorable IEGrecommendation
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Chairman’s Summary: Committee onD
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most places. Before we get there, w
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non-Annex I countries. The World Ba
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attention. In a couple of decades,
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GlossaryAdditionalityBankabilityBas
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Joint ImplementationA mechanism und
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Chapter 1evALuAtiOn HiGHLiGHts• T
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of interventions, from technical as
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would allow industrialized countrie
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growth, poverty reduction (includin
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Table 1.1 Map of the EvaluationSect
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Chapter 2eValuaTION HIGHlIGHTS• W
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Table 2.2Evaluated World Bank Renew
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Figure 2.2Breakdown of 2003-08 Low-
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Table 2.4 Commitments to Grid-Conne
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Box 2.1The Economics of Grid-Connec
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on average (Iyadomi 2010). (Reducti
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and industrial policy. An increasin
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Table 2.6Hydropower Investments by
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costs for remaining unelectrified a
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World Bank experienceTwo factors ac
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Box 2.5On-Grid and Off-Grid Renewab
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Energy EfficiencyThe first phase in
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Box 3.1ESCOs and Energy Performance
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have had limited causal impact on t
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measurement of achieved economic re
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Since the early 1990s, public entit
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part with a $198 million IDA credit
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Chapter 4eVAluATioN HigHligHTS• B
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The WBG urban transport portfolio (
Page 87 and 88: y conventional transport systems, i
Page 89 and 90: include the forest carbon projects
Page 91 and 92: for Costa Rica for the period 2000-
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Page 95 and 96: orrowers have demonstrated the abil
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Page 99 and 100: Consequently, the efficiency with w
Page 101 and 102: technologies could accelerate diffu
Page 103 and 104: A second issue, inherent to any adv
Page 105 and 106: goal of promoting wind turbine impr
Page 107 and 108: ConclusionsThe WBG’s efforts to p
Page 109 and 110: Table 5.1Carbon Funds at the World
Page 111 and 112: demonstration initiative. The Commu
Page 113 and 114: Impacts on technology transferThe 2
Page 115 and 116: Chapter 6Photo by Martin Wright/Ash
Page 117 and 118: Figure 6.1800Economic and Carbon Re
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Page 121 and 122: Table 6.1Summary of Sectoral Findin
Page 123 and 124: Table 6.1Sector Intervention Direct
Page 125 and 126: Appendix ARenewable Energy Tables a
Page 127 and 128: Table A.4Grid-Based Biomass/Biogass
Page 129 and 130: Table A.5 (continued)Negative examp
Page 131 and 132: Figure A.4A. Hydro/biomass capacity
Page 133 and 134: Appendix bWorld Bank Experience wit
Page 135 and 136: Table C.2Completed Low-Carbon Energ
Page 137: TAble C.4Reviewed energy efficiency
Page 141 and 142: Table E.2Climate obligationsCoal Pl
Page 143 and 144: Table F.2GHG objectiveModeNumber of
Page 145 and 146: IEG eliminated a few cases of doubl
Page 147 and 148: Table H.1Project andlocationBioener
Page 149 and 150: Appendix ICarbon and Economic Retur
Page 151 and 152: Appendix JRecent WBG Developments i
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Page 161 and 162: Hartshorn, G., P. Ferraro, and B. S
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