Central African Republic - Project to Interconnect Power Grids from the Boali Hydropower System Phase I: CAR Component- Supplementary Grant

The proposed operation is a supplementary grant of UA 2.51 million to finance the Central African Republic (CAR) component of the Project to Interconnect the Power Grids of CAR and DRC from the Boali Hydro-power System. In September 2012, the ADF approved a grant of UA 29.73 million to the Central African Republic (CAR) to finance the BOALI Phase I Project (interconnection of the CAR and DRC power grids from the Boali hydropower system). The goods procurement process -i) Rehabilitation and extension of Boali 2 plants; -ii) Rehabilitation of the transmission network; and -iii) Rehabilitation and extension of the distribution network) revealed that the cost of the winning bids exceeded the budget by UA 2.51 million. The reasons for this budgetary gap stem, on the one hand, from the bidders' perception of country risk and, on the other hand, from monetary inflation between the project approval date (September 2012) and the bid submission date (in 2018). Hence, following the Bank President's commitment to contribute to the financing of the crossborder project to electrify 9 provincial localities from the Mobayi power station (PETMobayi), it appeared necessary to finance the project update cost. The supplementary grant will provide additional resources to complete the infrastructure works and achieve most of the project's objectives. The project components are: (i) Rehabilitation and strengthening of generating units; (ii) Construction and strengthening of the transmission grid; (iii) Construction and strengthening of distribution grid; (iv) Project management. The total cost of the CAR component of the revised project, net of taxes and customs duties, is estimated at UA 32.23 million.