4.1 The World Bank Group’s energy program in Chad

TABLE 4.1 The World Bank Group’s energy program in Chad

Objective

(1) lncrease access to electricity

(2) Enhance sector governance

(3) Diversify the energy mix to reduce costs and emissions

(4) lmprove performance of SNE DPF and related TA

National electrification analysis (MPE)

Chad Energy Access Scale-up MPA

Electrification of N’Djamena, secondary city, and rural areas Electrification of N’Djamena and locations along the HV transmission line Support to the private sector for SSS electrification • Financing private sector • PRG • Political risk insurance for solar projects

Source: World Bank staff proposal. Note: ARSE = Autorité de Régulation du Secteur de l’Energie, the energy regulatory body; DPF = Development Policy Financing; HFO = heavy fuel oil; HV = high voltage; IFC = International Finance Corporation (of the World Bank Group); MIGA = Multilateral Investment Guarantee Agency (of the World Bank Group); MPA = Multiphase Programmatic Approach; MPE = Ministry of Petroleum and Energy; n.a. = not applicable; PRG = partial risk guarantee; PV = photovoltaic; ROGEP = Regional Off-Grid Electricity Access Project; RPP = Revenue Protection Program; SSS = stand-alone solar system; SNE = Société Nationale d’Electricité (national power utility); TA = technical assistance. Cameroon-Chad lnterconnection Project ROGEP IFC and MIGA

• Performance contract • Auditing financial statements (SNE) n.a. n.a. n.a. n.a.

• Least-cost development plan • Switching from diesel to

HFO • Competitive procurement of new generation capacity

• Tariff methodology (ARSE) • Revenue Protection

Program (RPP) (SNE) Hybridizing grids in N’Djamena and secondary cities by leveraging private capital in solar PV and storage Electricity imports from Cameroon

lmplementation of RPP in N’Djamena and secondary cities lmplementation of RPP in N’Djamena n.a.

n.a. • Containerized solar PV and storage • Scaling mini-grid program • Political risk insurance for solar projects

n.a.

• Outsourcing road maintenance to the private sector to address operational inefficiencies. There is a global trend to transfer road maintenance from in-house public entities to the private sector through predefined arrangements called performance-based contracts or output-based contracts for road maintenance. Performance-based contracts have proven to be effective in reducing costs, improving road conditions, and delivering transport services. • Developing better funding mechanisms in the transport sector to achieve sustained improvements to transportation infrastructure. Currently, infrastructure projects and the maintenance of existing infrastructure are funded by the national government, with external support from donors. However, these funding sources have proven inadequate to meet the country’s transportation needs. In 2000, a specific fund was established solely for road maintenance, and it was intended to generate approximately US$19 million per year through a fuel tax. The resources accrued by the fund would be used to maintain approximately 7,500 kilometers of primary roads. However, the fund has failed to meet its goal due to low levels of collected resources, issues with the funds being transferred, and the exclusion of rural communities.

Improving the efficiency of the water sector

The government needs to prioritize the implementation of reforms in the water sector, focusing both on the access and quality of services and on

customer experiences. To address the challenges facing the sector, the authorities should consider the following:

• Strengthening the institutions and governance of the water sector. The ministry responsible for water, and the government more broadly, needs to be equipped with the necessary instruments for piloting, regulating, and managing the sector, spanning from water resources management to various water services (for example, drinking water, water for agriculture, water for ecosystems regeneration, and so on). The instruments need to contribute to a more efficient geographical and subsectoral targeting of external support, which remains poorly managed. • Ensuring appropriate management of water resources. The management and regulation of the use of ground and surface water need to be reinforced at both central and local government levels. Although some monitoring equipment exists in the country, most is not maintained, and water resources (availability, quality, and variability) are not monitored. Due to mounting pressure, both socioeconomic and from climate change, proper monitoring and management of water resources are becoming paramount. The characterization of the all type of uses is important to define and clarify taxation to apply the principles of the polluter-pays and user-pays rules to ensure the sustainability of water resource management (water security). • Ensuring the sustainable financing of the Chadian Water Company (Société

Tchadienne des Eaux, STE). Improving the performance of urban hydraulics is dependent on the financial recovery of STE. A project under preparation, which is receiving funding from the Dutch Development Cooperation, the

French Development Agency, and the European Union, includes institutional support for STE and investments in N’Djamena. However, other STE centers require urgent investments to restore service to some of the country’s largest cities. The government could consider the taxation of water abstraction to fund STE. • Implementing management models for water systems in semi-urban centers.

There is an ongoing discussion on the proper management models for smallpiped water systems in semi-urban centers and the envisaged evolution toward medium-size affermage contracts with private operators. The implementation of a properly managed model should be combined with technical assistance to help define the reforms and investments needed to develop or rehabilitate small urban water systems, including flood protection. The government could pilot different forms of management or technologies (for example, solar) aimed at reducing operating costs and promoting social connections. • Designing and implementing a rural water strategy to strengthen the planning, monitoring, and regulation of the water sector. A rural water strategy is also needed to expand and rehabilitate water supply infrastructure, with a focus on peripheral and conflict-affected or at-risk areas and the inclusion of marginalized population groups. The strategy should include options to secure water for irrigation, including by exploring ways to use water related to oil production for agricultural use. It should also focus on Lake Chad and the impact of climate change on livelihoods.

Expanding the telecommunications network

Several telecommunication regulations have been enacted over the past five years, with a limited impact on private sector investment. These regulations