BF - DPO2 series on Energy and PFM

closed

Closed

This program document proposes the second and final operation in a programmatic series of two Development Policy Financing (DPF) operations designed to support energy and fiscal reforms in Burkina Faso. Fiscal performance has, however, deteriorated, and fiscal space for Government’s ambitions to address large deficits in infrastructure and social services has narrowed. Improving the financial sustainability of the sector and leveraging private investment in cheaper electricity sources is critical to extend reliable and affordable access to electricity. Diversifying the energy mix towards least cost options, namely solar and affordable imports from neighboring countries, will gradually bridge the gap towards full cost recovery electricity tariffs, thereby reducing the need for recurrent transfers to the sector. By attracting private sector in electricity generation, the Government intends to focus scarce public resources on the access agenda. Sector creditworthiness is critical to crowd-in commercial financing in new and cost-effective generation capacities, which would ultimately help secure the delivery of more electricity to households and firms, and therefore lay the basis for greater growth and better living standards. This strategy is fully aligned with the World Bank Group (WBG) principles of the ‘cascade’, to optimize the use of limited concessional resources by enabling private sector participation to deliver sustainable and affordable infrastructure services. The DPF series is closely aligned with the 2016-2020 PNDES and an integral part of the WBG strategy. It has been prepared in coordination with other partners, including the International Monetary Fund (IMF), and incorporates results of the Systematic Country Diagnostic (SCD 2016), lessons from previous development policy operations in Burkina Faso and other low-income countries as well as results from past and ongoing analytical work. Risks, while manageable, remain substantial notably in terms of institutional capacity and social environment, as described in the last section of this program document.

FY17 - Energy and Extractives,FY17 - Public Administration

World Bank Group

Project

Solar, Bridge, Oil and Gas, Commercial, Power Generation (CCGT), Government