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1 Public Disclosure Authorized IEG ICR Review Independent Evaluation Group Report Number : ICRR Project Data: Date Posted : 06/22/2016 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Country: India Project ID : P Project Name : Rampur Hydropower Project Appraisal Actual Project Costs (US US$M): L/C Number: Loan/Credit (US US$M): Sector Board : Energy and Mining Cofinancing (US US$M): N/A N/A Cofinanciers : N/A Board Approval Date : 09/13/2007 Closing Date : 03/31/ /31/2014 Sector(s): Hydropower (100%) Theme(s): Infrastructure services for private sector development (67%); Climate change (33%) Prepared by : Reviewed by : ICR Review Coordinator : Katsumasa Hamaguchi George T. K. Pitman Christopher David Nelson 2. Project Objectives and Components: Group: IEGPS1 a. Objectives: The Project Appraisal Document (PAD page 3) and the Loan Agreement (Schedule 1, page 4) state that the development objectives of the project are : (a) to improve the reliability of India 's s Northern Electricity Grid through the addition of renewable, low carbon energy from the Rampur hydropower project ; and (b) to improve the effectiveness of Satluj Jal Vidyut Nigam Limited (SJVN SJVN) with respect to the preparation and safe implementation of economically, environmentally, and socially sustainable hydropower projects. b.were the project objectives/key associated outcome targets revised during implementation? No c. Components: There were three components : A. Rampur Scheme (cost at appraisal: US$541 million including US$118 million of contingencies; cost at completion: US$ million.) Construction of the 412 MW Rampur run-of-the-river hydropower electricity generation scheme with a gross head of about 139 meters situated downstream of the power station of Nathan Jhakri Scheme on the Satluj River in the State of Himachal Pradesh of the Guarantor consisting, inter alia, of the following: (a) construction of a river diversion tunnel and a river crossing tunnel from the tailrace of the Nathpa Jhakri Project to act as a breaking cistern for the conduction of water to the headrace tunnel referred to in (b) below; (b) construction of a headrace tunnel of about 15 kilometers in length and about 10.5 meters in diameter to take water from the tailrace of the Nathpa Jhakri Project through the tunnels referred to in (a) to the head of three (3) penstocks referred to in (c) below; (c) construction of three (3) above-ground, surface-mounted steel penstocks, and six (6) branch penstocks, to deliver the water to drive turbines in the powerhouse referred to in (d) below; and

2 (d) construction of a surface powerhouse on the right bank of the Satluj River near the village of Bael, including acquisition and installation of turbine generators, generator transformers and electro-mechanical equipment in the powerhouse. B. Improving the Availability of the Nathpa Jhakri Power Plant (cost at appraisal: US$45 million; cost at completion: not available.) Carrying out investment measures for ensuring higher availability of the Nathpa Jhakri Power Plant, including: (a) the provision of spare parts, runners and interventions at the Nathpa intake to combat the deleterious impact of silt affecting that plant; and (b) other investment measures that may be identified based on the results of model tests and other investigations for containing silt in the Nathpa Jhakri Project. C. Institutional Strengthening (cost at appraisal: US$10 million; cost at completion: US$10 million.) Carrying out a program of institutional reform and capacity building to strengthen the Borrower s ability to prepare, implement and manage the development, operation and maintenance of hydropower projects in accordance with international best practices focusing, inter alia, on: (a) planning and management of environment and social issues ; (b) contract management skills; (c) safety and health aspects; and (d) financial accountability and corporate governance. d. Comments on Project Cost, Financing, Borrower Contribution, and Dates: Project cost : The total project cost increased mainly due to the cost overrun in Component A. The TTL subsequently informed IEG that the comparison of appraisal estimate and actual cost of Component A should include the physical and price contingencies. We would therefore propose that IEG refer to an estimate of US $541 million for Component A instead of the US$423 million, giving a cost overrun of this component of 23%. The TTL also informed IEG that due to less than expected interest during construction and managing Component B as part of normal O&M for NJHP, the total cost overrun was only 4% (US$670 million at appraisal, actual US$697.5 million). Financing : The IBRD Loan of US$400 million was a sub-sovereign Loan to the project developer Satluj Jal Vidyut Nigam Limited (earlier the Nathpa Jhakri Power Corporation) that is a joint venture between the Government of India and Government of Himachal Pradesh to develop a range of hydropower projects. The Loan was Guaranteed by the Government of India and it was fully disbursed by project closure. Borrower contribution : At appraisal, the Borrower agreed to finance US$270 million, or 45.4% of the appraised project cost. The Borrower actually financed US$297 million, some 44.1% of the actual project cost, to absorb the cost overrun in component A. This also included all the procurement (US$30 million) for the original Component B. Dates: The project had one level-2 restructuring in October It was proposed to extend loan closing from March 31, 2012 to December 31, 2014 due to delays resulting from poor geology. The project closed on December 31, 2014, 1 year and 9 months after the planned date of March 31, Relevance of Objectives & Design: a. Relevance of Objectives: High. India was facing continuing problems in meeting the electricity demand, especially in the Northern Region. Further, the power sector then accounted for about a half of India s carbon emissions because power generation was mainly based on indigenous coal, a situation that was expected to continue. Thus expanding hydropower, a renewable energy source whose utilization has a very low carbon footprint was highly relevant. Additionally the availability of hydropower post monsoon contributes to the period of greatest energy demand for air -conditioning and cooling. SJVN, the implementing agency of the project, had improved its institutional capacity through experience of the previous project, however, SJVN still lacked the capacity to develop hydropower projects in an economic, environmentally and socially sustainable manner. Therefore institutional strengthening of SJVN was highly relevant. The project development objectives were consistent with the Government of India s Eleventh Five -Year Plan ( ) and National Electricity Policy (NEP) 2015, which expected to facilitate the addition of 60,000-70,000 MW of generation capacity including 16,000 MW of hydropower. The contribution by the project was expected to add

3 412 MW to the planned hydropower expansion. The project development objectives were also aligned to the Bank s country assistance strategy at project appraisal and completion. The Country Assistance Strategy (CAS) for FY05-08 noted the importance of hydropower development (p.33) and the CAS for FY09-12 also emphasized ensuring reliable power (p.16) and deployment of renewable energy (p.24). The Country Partnership Strategy for FY13-17 aims at integration and transformation of electricity sector through improved reliability of the Northern Electricity Grid and increased renewable energy production. b. Relevance of Design: Substantial. The causal chain between the activities financed by the project and the outputs and outcomes is generally logical and clear. In order to improve reliability of the Northern Grid, construction of hydropower station was relevant. While the generation capacity of Rampur (412 MW) is relatively small compared to the size of Northern Electricity Grid, it was expected to operate synergistically in tandem with upstream NJHP (1500 MW). Further, choice of hydropower was relevant considering the abundant hydropower resources availability in the region and avoidance of new CO 2 emissions from alternative power generation based on indigenous coal. Investment support for ensuring higher availability of electricity from the existing upstream NJHP was relevant because any shutdown of the upstream NJHP would negatively affect Rampur s power production, given that Rampur was to be constructed as a cascade with NJHP. Investment support measures was also appropriate because they are technically and economically justified. The Technical Assistance component was relevant because it was designed to improve SJVN s capacity focusing on the areas highlighted from lessons learned from NJHP. The four activities (i) planning and management of environment and social issues,(ii) contract management skills, (iii) safety and health aspects and (iv) financial accountability and corporate governance, were relevant because these were the areas which needed improvement. There were minor shortcomings in allocation of contingency. It is acknowledged that there were strict standard thresholds for contingency used by Government of India at that time. Although major risks were carefully examined and identified in preparation, more cost and time contingency was necessary, given the complexity of hydropower and underestimated technical difficulties associated such development in the challenging Himalayan environment. and the cost of applying improved social and environmental safeguards in a mature sector. 4. Achievement of Objectives (Efficacy): (a) To improve the reliability of India 's s Northern Electricity Grid through the addition of renewable, low carbon energy from the Rampur hydropower project ; and (b) to improve the effectiveness of Satluj Jal Vidyut Nigam Limited (SJVN SJVN) with respect to the preparation and safe implementation of economically, environmentally, and socially sustainable hydropower projects. (a) To improve the reliability of India's Northern Electricity Grid through the addition of renewable, low carbon energy from the Rampur hydropower project. High. Outputs: Construction of the hydroelectric scheme Power House : the main power house, which has six 68.7 MW Francis turbine generator and six generator transformers was completed, and proven to run at full capacity of 412 MW in December Construction of the hydroelectric scheme Head Race Tunnel : the 15 km, 10.5 meter diameter headrace tunnel was completed and functional in March Poor rock quality severely affected the pace of excavation and led to extension of the time needed for construction. Engineering measures to ensure higher availability of the existing upstream NJHP were completed. SJVN completed installing blanking panels and dredging pumps at intake, hard-coating of turbine components and procurement of contingency spares. Outcomes: Although the capacity of Rampur is relatively small compared to the entire Northern Grid, Rampur (412 MW), its joint operation with the upstream Nathpa Jhakri (1500 MW), has a relatively greater impact on the capacity and reliability

4 of the Northern Grid. Thus increased power availability reached 1,957GWh, or 110.6% of the target of 1,770GWh, and the project also contributed to two reliability indicators. Improvement of reliability of Northern Electricity Grid was measured by how much the frequency was within the operating band of Indian Electricity Grid Code, and number of days of outage of NJHP in the wet season. The former was improved significantly from 78.83% to 98.9% in terms of time frequency within the band, exceeding the target of 90.3%. The latter was improved greatly from 32 to 4.6 days, against the target of 24 days. Off-taker satisfaction with respect to SJVN service increased from 96.7% in 2007 to 99.9% in All off-takers rated SJVN highly satisfactory in all 8 survey dimensions. However, the ICR does not provide further information on which survey dimensions were considered. (b) To improve the effectiveness of Satluj Jal Vidyut Nigam Limited (SJVN) with respect to the preparation and safe implementation of economically, environmentally, and socially sustainable hydropower projects. Modest. Indicators listed below are simply monitoring implementation of environmental and social safeguard and do not point to SJVN s permanent capacity improvement, except for output indicator 9 (training on environment and organizational effectiveness (person days)). Outputs: Organizational effectiveness training: Number of training days was 610 for environmental management (target was 1,000) and 1,884 for occupational health and safety (target was 2,000). Environmental Management Plan (EMP) implementation. Muck disposal was completed. Compensatory afforestation (120 ha out of 139 ha, 86%) and funds utilization on Catchment Area Treatment (Rs million out of Rs million, 82%) plan rested with regulatory authorities and was pending full completion at the time of ICR. Environmental management staffing: Aide-Memoire (November 2010) notes that SJVN shared revised staffing structure proposing staffing for environment, which would be placed for approval by the SJVN Board (p. 28). However, Aide-Memoire (December 2012) reports that there were no progress on key actions agreed in the area of the corporate unit (p.20). The Bank s Task Team Leader (TTL) provided additional information on this issue and it is confirmed that environment staffing in SJVN increased from 9 in 2007 to 18 in 2014 and creation of 7 additional posts was approved by the SJVN Board in RAP and Community Development Plan implementation (a) All affected people resettled and/or fully compensated for loss of land by 2007 before start of civil works. End-Term Impact Evaluation showed that income or assets of 99% of PAFs increased. Amount spent on small infrastructure and local contracts awarded was Rs.337 million, against the target of Rs.200 million). Safety action plan: reported cases of non-compliance with safety procedures are reduced by 39% (target was 10% reduction). Dam safety reviews carried out on time and follow up action taken (100%). Financial management action plan (timely and accurate preparation of quarterly accounts : 100%); Contract management plan (variations confirmed through issue of priced variation orders ): 74 out of 98 claims (76%) issued as variation orders by January 2015 (target was 85%). SJVN has formulated a Corporate Social Responsibility policy through which it has sponsored a number of community activities. Outcome: SJVN showed several improvements in terms of safe implementation of economically, environmentally, and socially sustainable hydropower projects summarized in the output section above throughout the implementation of the project. Especially, with regards to social aspect, SJVN built a good relationship with the affected community from an early stage and the Rampur hydropower project successfully gained acceptance from the local community. Also, the independent social surveys confirmed that the average income and other indicators of well-being including literacy, modern durables, house size, and share of people living in permanent housing improved. However, most of these institutional indicators were simply monitoring implementation of environmental and social safeguard and do not point to SJVN s permanent capacity improvement. Without further insight with regards to how the institution has changed, it is difficult to see how it will undertake these commitments in their future work and projects.

5 5. Efficiency: Economic and Financial Efficiency The Economic Rate of Return (ERR) was estimated to be 19.3% at appraisal, based on the following main assumptions: beginning operation in 2011, construction cost at US$ 596m, and a power tariff at Rs.2.4/kWh. The ERR at project closure is estimated to be 14.1%, with the following main assumptions: beginning operation in 2014, construction cost at US$ 687m, and power tariff at Rs.3.4/kwh. The construction cost used for this analysis is different from total project cost of US$ m because it is based on the amount of RS Cr, which was filed to Central Electricity Regulatory Commission (CERC) in January The lower ERR at completion is partly explained by a 21 months delay (32% longer than planned) and a 15% higher construction cost than estimated at appraisal, mainly due to greater than expected geological and engineering challenges. The ERR at completion would be 17.1% if recalculated at an avoided cost of Rs.5.0/kWh, which is still a conservative price. Further, the ERR at completion could be between16.6% to18.5% if carbon emission reduction credits are taken into account. Organizational and Administrative Efficiency There were delays in Community Development activities, the Catchment Area Treatment Plan and the Afforestation Program, mainly due to inaction from State authorities. Taking into account the favorable ERR at completion and minor issue of administrative efficiency of State authorities, efficiency is assessed as substantial. a. If available, enter the Economic Rate of Return (ERR ERR)/Financial Rate of Return (FRR FRR) at appraisal and the re-estimated estimated value at evaluation : Rate Available? Point Value Coverage/Scope* Appraisal Yes 19.3% 100% ICR estimate Yes 14.1% 100% * Refers to percent of total project cost for which ERR/FRR was calculated. 6. Outcome: Relevance of objectives is rated high, and that of design is substantial with minor shortcomings in allocation of contingency. Efficacy is rated as high for the first objective and modest for the second objective due to lack of evidence. Efficiency is assessed as substantial. a. Outcome Rating : Moderately Satisfactory 7. Rationale for Risk to Development Outcome Rating: Technical, financial, social and environmental, and governance risks are generally low. Technical risk Although the project site is prone to natural disasters, the technical design has probably mitigated the risk. Further, SJVN has an emergency preparedness plan in place. SJVN has proven its technical capacity for operation and maintenance (O&M) of large hydropower through the experience of the previous project. This is evidenced by the successful measures to significantly reduce the number of shutdowns due to high silt load and full compliance of dam safety audits. Financial risk SJVN is financially stable already mainly due to the income from the larger NJHP. This will provide necessary resources for the continued operation of the Rampur power station. Further, the final tariff for Rampur power is estimated to be within the range of the Northern Region merit order dispatch, which leads to constant sale of electricity from Rampur. Social and environmental risk Although the resettlement and local area development activities were successfully implemented, there may be some moderate social risk related to the implementation of the final activities by Local Area Development Authorities (LADA) and the new cash benefit sharing programs. Governance risk

6 In order to maintain a sustainable relation between SJVN and the local community, annuity for local development activities need to be paid without delays and with transparency. The Bank team, SJVN and the GoHP highlighted the importance of rapid implementation of the annuity program in the meeting in December 2014, and Directorate of Energy committed the necessary next steps. TTL confirmed that the list of beneficiaries is being finalized by the Chairman LADA/District Administration and cash transfers to affected families will be implemented after completion of this process. a. Risk to Development Outcome Rating : Negligible to Low 8. Assessment of Bank Performance: a. Quality at entry: Overall the Bank took into account international good practice related to hydropower development, and the lessons learned from the previous NJHR. The preparation team included a significant number of staff with experience from the NJHP. The project design was built on other hydropower Bank -supported operations in India, incorporating several lessons including careful analysis of technical design and anticipation of difficult geological conditions. A number of internationally recognized technical experts were assigned to appraise the project, aiming to merge international good practice with Indian standards and procedure. With regards to safeguards, the Bank identified relevant risks and applied necessary safeguard policies. As discussed in the relevance of design, more costs contingencies could have been included to manage the technical problems that caused the delays and higher cost of construction. There were some moderate shortcomings in M&E design, particularly in setting appropriate indicators. Quality-at at-entry Rating : Moderately Satisfactory b. Quality of supervision: The Bank team provided strong support to the client, being attentive and supportive with timely and constructive criticism and proposed solutions to meet challenges that arose. The Bank s task team was mostly country-based and made frequent visits to the site, sometimes as often as every other month. The shortcomings in appropriate indicators in M &E design was not adequately followed-up by the Bank team during implementation. Although the Bank team monitored the technical construction progress and the Resettlement and Rehabilitation (R&R) well, the team less frequently followed-up progress in environmental and capacity-building components. Resettlement Action Plan (RAP) and community development implementation were regularly updated and reported in the official supervision reports and project Aide Memoires. Quality of Supervision Rating : Moderately Satisfactory Overall Bank Performance Rating : Moderately Satisfactory 9. Assessment of Borrower Performance: a. Government Performance: The ownership and commitment from both Federal and State Governments was high in terms of enabling environments and necessary permits for the project. However, the State has experienced capacity constraints causing implementation delays especially in the Community Development activities, the Catchment Area Treatment Plan and the Afforestation Program. Government Performance Rating Moderately Satisfactory b. Implementing Agency Performance: SJVN showed strong commitment towards the project implementation. Counterpart funding from SJVN was timely and adequate, and SJVN increased its financial contribution from US $270 million US$297 to cover the cost overrun in Component A. SJVN also properly handled stakeholder and Project -affected Family (PAF) interaction.

7 However, there were some delays in s follow up activities on muck disposal issues especially in the beginning mainly due to a lack of capacity. There were also shortcomings in the M&E by SJVN in Environmental Management Plan (EMP), community development and capacity building activities.evidence for SJVN s capacity improvement is not clear. Implementing Agency Performance Rating : Moderately Satisfactory Overall Borrower Performance Rating : Moderately Satisfactory 10. M&E Design, Implementation, & Utilization: a. M&E Design: There were some shortcomings in M&E design. For the first objective, the output and outcome indicators are generally logical and clear. Increased power availability, degree in which time frequency is in the operating band of Indian Electricity Grid Code, number of days of outage, off-taker satisfaction were chosen as the outcome indicators to measure improved reliability of the grid. With regards to the second objective, the output and outcome indicators were not clear in respect of improving the effectiveness of SJVN. Output and outcome indicators are simply about implementation of environmental and social safeguard, except for indicator 9 (training on environment and organizational effectiveness (person days)). b. M&E Implementation: SJVN implemented semi-annual project reporting and quarterly reports on implementation progress. Implementation Status and Results Reports (ISRs) and Aide Memoires also reported progress of indicators related to the construction of Rampur, outages of NJHP, Resettlement Action Plan (RAP) and community development implementation. Mid-term evaluation and end-term evaluation was done in November 2010 and March 2015 respectively. An independent impact evaluation was conducted by a third party, Himachal Pradesh University, to determine whether living standard of Project-affected Family (PAF) improved. c. M&E Utilization: For the physical construction work and for the social programs, additional detailed numeric indicators were developed and used to follow up on progress and inform decisions on project implementation. However, for other outcomes and outputs (EMP implementation and capacity building component ), the progress reporting was about general progress rather than reporting on the specific indicators, therefore it was not adequate to be useful for decision- making on implementation. M&E Quality Rating : Modest 11. Other Issues a. Safeguards: The project was classified as a Category A project under OP /BP4.01 Environmental Assessment. In addition five other safeguard policies were triggered: Cultural Property (OP 4.11); Involuntary Resettlement (OP 4.12); Forests (OP 4.36); Safety of Dams (OP 4.37); and Projects on International Waterways (OP 7.50). An Environmental Management Plan (EMP) and a Resettlement Action Plan (RAP) were prepared and disclosed appropriately. However, there were some challenges including slow operationalization of the EMP components mainly due to focus on technical problems in early years. The Bank team s regular supervision and the mid -term review assisted in improving the situation. Environmental Assessment and Management The ICR (p.14) reports that the environmental concerns identified in preparation has overall been addressed and mitigated as of April These were: Impacts on land and forests : Despite the fact that the project impacted only 49 ha, the EMP required 139 ha of compensatory afforestation. The implementation of afforestation by GoHP Forest Department was very slow. According to state authorities, 120 ha of the compensatory afforestation had been done by March 2015;

8 however, further details are unavailable as project monitoring activities did not include those activities for which the GoHP authorities had responsibility. Construction impacts : The impacts of construction have all been addressed. Tunneling work produced large amounts of muck and the contractor had difficulties depositing in accordance with the EMP measures, which led to a fatal accident of a child. SJVN undertook corrective measures after the incident and solved muck disposal issues. Temporary construction impact mitigations, including dust prevention, were managed by the contractors and monitored by SJVN. Impacts on river flows : Rampur reuses water from NJHP which is located upstream. The ICR (p.56) reports that the instream flow provided at NJHP together with the additional water coming from tributaries is more than sufficient to meet the GoHP regulatory guidelines for in -stream flow requirements. Impacts on fish and wildlife : The ICR (p.56) notes that the project has no direct impact on fish and no endangered, rare or protected species was found from the project s immediate influenced area or the directly affected area. Impacts on water quality : The ICR (p.58) reports that the monitoring results showed that there were no problems related to the water quality concerns expressed at preparation. Impacts on physical cultural resources : A field-based archaeological study confirmed that the project area does not have known archaeological or historical sites or remains. Social Safeguards The ICR (p.13) reports that the land acquisition, resettlement and compensation for damages caused by Rampur have been fully completed at the closure of the project and are in accordance with the RAP. Private land acquisition area identified at appraisal was about 30 ha and it remained the same at closure of the project. 208 households were affected and 29 households were relocated (appraisal estimate was 143 and 28 respectively). 99.5% of the compensation amount has been paid to PAFs at closure. The reason for not reaching 100% is that one of the displaced families has refused to accept the generally agreed cash compensation and filed a case in court in the Shimla District. The ICR (p.14) states that SJVN will pay in concurrence with the decision of the court. There were minor delays in the payment of compensation for crop and blasting damages mainly due to some administrative challenges; however, this issue was solved through communications between the Bank team, SJVN and the State Government. An independent impact evaluation was conducted by a third party, Himachal Pradesh University, to determine whether living standard of PAFs improved. The result of the impact evaluation shows improvements over control group in various variables including income, level of education and full-time employment. For example, average annual income of PAFs increased from Rs.251,472 to RS.387,204, while that of control group remained as Rs.207,257 (ICR p.47). Other matters International Waterways. The ICR (p.15) reports that both the upstream and downstream riparian countries, China and Pakistan, were notified and provided with relevant project information in accordance with the World Bank Policy on International Waterways. Neither of the riparian countries raised objection to the project. Safety of dams. The ICR (p.19 and p.22) notes that regular dam safety audits have shown full compliance. b. Fiduciary Compliance: Financial Management SJVN developed and implemented an action plan for strengthening financial accountability and corporate governance. Several improvements were observed including strengthened internal audit, risk management policy, and compliance with the Guidelines on Corporate Governance for Public Sector Enterprises. The ICR (p.15) reports that the Bank s requirements on reporting and management of disbursements have been met and accounts and audit reports have been filed on a timely basis and disbursements recorded in accordance with the Bank system. Procurement The ICR p.5 reports that the procurements in Component B was dropped in the restructuring and done by SJVN using its own funds, and this was not in accordance with the Bank s procurement guidelines. This was partly because of urgent requirement of NJHP. c. Unintended Impacts (positive or negative):

9 None. d. Other: None. 12. Ratings: Outcome: Satisfactory Risk to Development Negligible to Low Outcome: ICR IEG Review Moderately Satisfactory Negligible to Low Reason for Disagreement/Comments Lack of evidence on the second objective Bank Performance : Satisfactory Borrower Performance : Moderately Satisfactory Quality of ICR : Moderately Satisfactory Moderately Satisfactory Satisfactory Inadequate follow-up on shortcomings in M&E design, particularly with regards to the second component around institutional change. NOTES: - When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate. 13. Lessons: The ICR reviewer derived the first and the second lesson, while the third lesson is adopted from the 8 lessons provided by ICR. Lack of relevant output and outcome indicators for institutional strengthening makes it difficult to measure the efficacy of the project. In this project, output and outcome indicators for the second objective are simply about implementation of environmental and social safeguard except for one indicator about training outputs. Lack of M &E arrangements with partner organizations makes it difficult to monitor the progress of the project this project, SJVN and the Bank could not have enough information from the state authority on the progress of compensatory afforestation because there were no M &E arrangements with the state authority.. In Where significant resettlement and livelihood issues are anticipated, it is essential to build trust through early consultation, communication and interaction with the local community. In this project, acceptance from the local community was gained mainly due to the strong effort by SJVN to build a good relationship with the affected community from very early on. 14. Assessment Recommended? Yes No 15. Comments on Quality of ICR: The ICR is outcome-oriented, and the lessons are evidence-based. The ICR would have benefitted from covering more evidence on the second objective (improvement of SJVN s effectiveness). There are some minor errors in numbers in Annex 1 (amount of financing) and in closing date in para 23. a.quality of ICR Rating : Satisfactory

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