Guatemala Energy Transition Support Project

pipeline

The proposed project consists of the following three components:Component 1: Support Geothermal and Transmission Infrastructure. This component will focus on financing works and technical assistance to enable geothermal resources for renewable energy generation as well as the expansion of the transmission. This component comprises two subcomponents as follows:• Subcomponent 1.1: Exploration drilling to confirm geothermal resources. This subcomponent will finance superficial exploration studies and well drillings in Tecuamburro and Moyuta fields and related complementary works and analysis to confirm the geothermal resource and complete the feasibility stage of the two geothermal fields. The drilling will include two campaigns, one for reduced diameter wells and another one for production size wells. Activities will also include financing of civil works to access these wells, owner’s engineer to supervise the works, complete feasibility studies of geothermal power plants in these fields, development of all relevant technical specifications and terms of reference, and transaction advisory support for the structuring of these power plants projects. • Subcomponent 1.2: Technical Assistance for Transmission Infrastructure Development. This subcomponent will finance technical assistance to support the development of the 400kV transmission network in Guatemala, in particular the expansion of the 400kV transmission line that currently connects the border with Mexico and Brillantes substation. This expansion aims to connect Brillantes, Escuintla and Guatemala City. This TA will include the preparation of detailed technical studies, Environmental and Social Impact Assessments (ESIAs) as well as other required Environmental and Social (E&S) instruments, and works bidding documentation. This subcomponent will also finance the required support to the Ministry of Energy and Mines (MEM) to improve its planning capacity through the support of the National Transmission Expansion Plan and capacity building on planning.Component 2: Operational Efficiency Improvements for Electricity Municipal Companies (EEMs) and National Electrification Institute (INDE) Performance Enhancement. This component aims to enhance the operational efficiency of EEMs and improve the performance of INDE. It is divided into the following two subcomponents:• Subcomponent 2.1: Performance and Distribution Infrastructure Enhancement for EEMs. This subcomponent focuses on improving EEMs performance through: (i) rehabilitation and reinforcement of distribution networks and substations; (ii) mass installation of meters; and (iii) management systems. It also includes training and technical assistance to EEM staff.• Subcomponent 2.2: INDE Performance Improvement Implementation. This subcomponent aims to implement performance improvement measures for INDE regarding its corporate governance structure and practices, environmental and social management, operational performance and financial practices. Activities to be financed may include, but are not limited to, development of a business plan, efficiency and process improvement plans, corporate governance enhancements, and financial management systems. Component 3: Capacity Building and Project Implementation Support This component will support INDE strengthen its technical, fiduciary and environmental and social capacity to implement the Project, manage E&S risks, and to conduct monitoring and evaluation activities. The support will include hiring expert personnel for the Project Implementation Unit (PIU) at INDE, capacity building activities for both INDE and the EEMs, and coordination among stakeholders to ensure effective project implementation. Additionally, this component will support the development of an E&S management system (ESMS), allowing INDE and the EEMs permanent adequate E&S management.The INDE will be the Project Implementation Agency. INDE will carry out financial management of the project, procurement as well as environmental and social (E&S) management activities. A Project Implementing Unit (PIU) under the CEO’s office will be established to implement project-related activities and coordinate with INDE’s companies responsible of defining the technical design and support implementation, namely the Electric Power Generation Company (EGEE), the Electric Power Transmission and Control Company (ETCEE) and the Power Commercialization Company (ECOE). The PIU will have a Project Coordinator and dedicated fiduciary staff, including E&S staff, and will receive technical support from INDE’s companies and directorates. The PIU will also monitor and report on project indicators and will oversee the Project’s financial reporting.