ABCDEFGHIJKLMNOPQRSTUVWXYZAAABACADAEAFAGAHAIAJAKALAMANAOAPAQARASATAUAVAWAXAYAZBABBBCBDBEBFBG
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Country, program, and review identifiers
Background data
Fossil fuel production
Fiscal consolidation (% of GDP), based on latest available review
Tariffs & subsidies: Does the IMF call for tariff increase in / for subsidy decrease in:
Impact assessments
World Bank mentions
Support for fossil fuel expansion
Support for investment in renewable energy
Support for green industrial policy
Support for carbon pricing introduction or increase
Conditionality related to energy
2
CountryCountry codeProgram typeStart dateEnd dateReview numberReport codeIncome clasificationRisk of overall debt distressOil GasCoalHigh rentsEstablishedEmergingFiscal balance start yearFiscal balance end yearMagnitude of fiscal consolidationPrimary balance start yearPrimary balance end yearRevenues and grants start yearRevenues and grants end yearExpenditures start yearExpenditures end yearSocial spending measureSocial spending start yearSocial spending end yearMagnitude of social spending increaseSocial spending floorElectricityGasFuelExtractsCombined savings as share of GDPPart of fiscal consolidationCompensatory measuresExtract (compensatory measures)InequalityGendery/nExtracty/nRationaley/nPublic or privateRationaley/nRationaley/nRationale[1][2][3][4][5][6][7][9][10]
3
ArgentinaARGEFF25-Mar-2231-Dec-24R8CR/24/167Upper-middle.1.10%1%.NoYesNo-4.204.2-2.41.71816.720.415.1Social assistance3.740.3YesYesYesYesTight fiscal policy has delivered the first consecutive four-month overall surplus in 16 years, while protecting social assistance. A remarkable fiscal adjustment since end-December— with real spending cuts (26 percent y/y) more than offsetting real revenue declines (8 percent y/y)—yielded a cumulative overall surplus of 0.2 percent of GDP in the first four months of 2024 (Figure 5). On the revenue side, higher fuel excises, export receipts, and temporary taxes on FX access for imports (impuesto pais) are helping to partially offset real declines in domestic taxes, also a result of an earlier decision to raise the PIT floor. Expenditure cuts have been delivered through measures under the Executive’s control, including: (i) discretionary cuts in capital spending and transfers to SOEs and provinces, forcing adjustment across these entities; (ii) energy, transport and water tariff increases;4 (iii) limits to public wage increases; and (iv) the tighter management of decentralized public entities (e.g., streamlining inefficient trust funds), in line with the Public Investment Management Assessment (PIMA) recommendations. (FN4: Electricity prices (PEST) were raised during February–April to reflect full cost recovery for high-income residential users (150 percent) and all commercial user categories (225–480 percent). Effective April 1, natural gas prices (PIST)— frozen since May 2023—were also raised for high income and commercial users (around 300 percent) and for low-and middle-income residential users (around 100 percent). Public transportation (bus and rail) fares in Buenos Aires— frozen since August 2023—were raised by over 200 percent during January–February, although the scheduled April hikes have been postponed for at least two months.)
Deregulation efforts to create a more market-based economy continue. On the relative prices front, while the release of price controls has proceeded more gradually than originally intended, utility tariffs (electricity, gas, water, public transport) are still undergoing notable adjustments to better reflect costs, fuel prices are now aligned with international comparators, and wheat price subsidies have been phased out to boost production and exports.
These efforts need to be complemented by the continued rationalization of subsidies. • On the energy front, following increases to electricity and gas tariffs by an average of 350 percent and 200 percent, respectively, in Q1:2024, the authorities plan to achieve full cost recovery for most electricity and gas users and replace the current tariff segmentation scheme with one that supports only the basic energy consumption basket of vulnerable households during S2:2024.10 To this end, detailed reforms to transition towards the new scheme have been published (end-May 2024, SB) and a new Decree has been issued to remove caps on price increases, which are tied to the wage indexation formula (prior action).11 Further increases in electricity prices (PEST) and gas prices (PIST) are expected to take place in the coming months, following some delays, while tighter caps on subsidized electricity consumption will be instituted as needed. These actions are expected to secure a 0.7 percent-of-GDP reduction in the energy subsidy bill this year and regularize the finances of the sector (¶29). (FN10: The basic energy basket (150–200 kWh of electricity, 30–40 cubic meters of gas per month) may vary depending on household size, location, season, and type of energy access. Means-testing will be conducted using a social registry and cross-checked with data from social security and tax collection agencies. Electricity and gas prices are expected to increase initially by an average of 200 and 500 percent, respectively.)
Particular focus is needed to improve the efficiency and investment incentives in the energy sector. While phasing out subsidies to electricity and natural gas production has been an earlier priority (¶18), the authorities are making effort to alleviate pressure on the energy market's payment chain and improve the viability of the sector. In this regard, transportation and distribution tariffs, which were kept artificially low to contain the energy bills, have been raised (by around 270 percent for electricity and 600 percent for natural gas) and are now being automatically updated to better reflect costs.18 Going forward, the authorities will align pricing to improve cost recovery for lower and middle- income households through the new energy subsidy scheme. A more predictable pricing policy, together with properly- designed reforms of the regulatory framework of the hydrocarbon sector (also in Ley Bases), and continued efforts to expand the gas pipelines are essential to sustain the improvement in the energy balance and support responsible investment in the energy sector. (FN18: Consumer energy bills in the country consist of four key components: (i) generation costs for electricity and gas; (ii) transportation costs; (iii) distribution costs; and (iv) national, provincial, and municipal taxes. Under the previous administration, adjustments to transportation and distribution costs were delayed, leading to distributors accumulating arrears with the wholesale electricity market clearing company.)
Against this still uncertain backdrop, the authorities stand ready to recalibrate policies to evolving outcomes to ensure program objectives are met. The authorities remain committed to the program’s fiscal balance and ambitious reserve accumulation goals and will continue to build consensus for the needed reforms. Should downside risks materialize, the authorities agreed to deploy alternative measures under the control of the Executive as needed to secure all program targets. In the event of delays in congressional approval of the fiscal and structural packages, for instance, the authorities agreed to pursue discretionary measures to safeguard the fiscal anchor, including by: (i) strengthening and expanding excises, particularly on fuels; (ii) accelerating the reduction in energy and transportation subsidies (¶18); and (iii) further streamlining transfers to provinces and SOEs.		0.70%YesYes
Publication of detailed reforms of the current tariff segmentation scheme to better target subsidies on the basic energy basket for vulnerable households.
NoNoYes
Strengthening the integration of databases and social assistance targeting. Efforts are underway, in collaboration with the World Bank, to improve the targeting and efficiency of social support (end-September 2024, SB), including by developing a plan to upgrade the current individual-level database to a household-level one.
YesHydrocarbons legal framework: Deregulates the oil sector to free companies to produce oil and gas. Removes government's prerogative to set export quotas and prices (energy exports can be blocked under very exceptional circumstances). Merges electricity and gas regulators.
ii) spur new large long-term direct investments, including in strategic sectors like energy and mining, through greater predictability and incentives; (iii) strengthen the hydrocarbon sector regulatory framework.
A more predictable pricing policy, together with properly- designed reforms of the regulatory framework of the hydrocarbon sector (also in Ley Bases), and continued efforts to expand the gas pipelines are essential to sustain the improvement in the energy balance and support responsible investment in the energy sector.		No..No.No.
Publication of detailed reforms of the current tariff segmentation scheme to better target subsidies on the basic energy basket for vulnerable households.
Issue a decree to remove the CVS formula (Decree 332/2022), which caps increases in N2 and N3 electricity and natural gas utility bills.
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ArmeniaARMSBA12-Dec-2211-Dec-25R3CR/24/165Upper-middle....NoNoNo-2.1-4.6-2.5-1.5-1.624.325.726.430.3
Social assistance benefits
2.43.51.1YesNoNoNo.....NoNoNo.No.No..No.Yes
Progress with structural fiscal reforms will support a credible medium-term fiscal path and address longstanding bottlenecks in public administration effectiveness. • Mobilizing revenues. Already approved excise and environmental tax rate increases, higher turnover tax rates (totaling 0.3 percent of GDP), and other tax policies to be legislated by end- year are projected to increase total revenues by at least ¾ percent of GDP by 2026. Further tax policy options, identified by IMF TA, include rationalizing VAT exemptions, improving capital and corporate income tax neutrality, and introducing carbon taxes, while sector-specific tax incentives should be avoided to prevent tax base erosion.
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5
BangladeshBGD
EFF, ECF, RSF
30-Jan-2329-Jul-26R2, R2, R2CR/24/186Lower-middleLow.0.50%.NoYesNo-4.6-4.8-0.2-2.5-2.48.29.912.814.7....YesYesYesYesContaining subsidies is key to enabling higher development and social spending while safeguarding fiscal sustainability. During the first eight months of FY24, subsidy spending pressures remained high, notably for electricity producers and fertilizer importers who faced rising import costs against government-regulated retail prices (Annex III). In February 2024, the government raised electricity prices by 4 percent. However, further increases—carefully calibrated to avoid undue negative impact on lifeline tariff consumers—will be required to reduce subsidies back to more manageable levels (MEFP ¶13).7 In line with program commitments, starting March 2024 the authorities have also started implementing an automatic fuel price adjustment mechanism for petroleum products, which prescribes monthly price adjustments and is expected to keep fuel subsidies at zero. (FN7: Residential electricity tariffs increase with consumption, with the lowest “lifeline” tariff applied to households consuming less than 50 kWh per month)
Bangladesh is highly dependent on imports of oil, natural gas, and fertilizers. A sharp rise in global prices of these commodities since 2021 has led to a significant increase in subsidy claims in recent years, concentrated in the electricity and agricultural sectors where domestic price adjustments have failed to keep pace with the rise in costs (see Annex chart). Whereas natural gas and fuel prices were raised broadly in line with international prices, concerns about food security and affordability amid an already inflationary environment led the government to limit price increases on fertilizers and electricity. As a result, subsidy claims by electricity and fertilizer producers and importers have risen substantially and were met in part through arrears and the issuance of special, low-interest bonds to commercial banks to offset outstanding loans to electricity and fertilizer companies.
The government has recognized the unsustainable nature of the current subsidy bill and signaled its intention to raise electricity prices in 2024 and beyond. The government intends to avoid incurrence of new arrears and enable the gradual clearing of arrears and eventual phasing out of electricity subsidies over a five-year horizon. To this end, the authorities implemented a first round of increase in the retail electricity price by 4 percent in February 2024 and are expected to continue raising prices gradually with around four price adjustments per year. Electricity subsidies are thus expected to start declining from FY25. At the same time, electricity tariff reform needs to be carefully calibrated to avoid undue negative impact on poor and vulnerable households. This can be achieved in part through limiting the increase in the “lifeline” tariff offered to households that consume less than 50 kWh per month. However, given that households in the lifeline tariff category make up more than half of all consumers, some increase in tariffs is likely to be necessary and should be complemented with continued strengthening of the government’s social safety net.		.YesYes
At the same time, electricity tariff reform needs to be carefully calibrated to avoid undue negative impact on poor and vulnerable households. This can be achieved in part through limiting the increase in the “lifeline” tariff offered to households that consume less than 50 kWh per month. However, given that households in the lifeline tariff category make up more than half of all consumers, some increase in tariffs is likely to be necessary and should be complemented with continued strengthening of the government’s social safety net.
NoNoYesAssisted by development partners such as Asian Development Bank (ADB), Japan International Cooperation Agency (JICA), and the World Bank, the authorities are improving essential infrastructure and electricity access. This effort aims to bolster the business environment, foster trade growth, and attract FDI sustainably.
In April 2023, the authorities and the World Bank signed a US$500 million financing agreement for the Program on Agricultural and Rural Transformation for Nutrition, Entrepreneurship, and Resilience (PARTNER). This program is expected to transform the agriculture sector by promoting crop diversification, greater efficiency in input use, good agriculture practices, and expanded access to digital agricultural service tools, among other things. As part of PARTNER, the World Bank is aiding the authorities to build a comprehensive database of farmers and experiment with the use of e-vouchers for fertilizers and other agricultural inputs. The new database and experimental findings are expected to yield valuable information, which the authorities can use to rethink the existing agricultural subsidy system and put current budget allocations for fertilizer subsidies to more productive uses.
RM4 is a high feasibility, medium urgency in CCDR and has been discussed with the World Bank (WB) as an important reform area. RM5 is highlighted as a key need in the updated Climate Fiscal Framework and has been discussed with the WB and the ADB as an important reform area that the Fund could contribute. (RM4: Government to adopt a national disaster risk financing strategy while integrating social assistance measures.) (RM5: MoF to adopt and implement a methodology for embedding climate change in the MTMF, through analyzing macro-fiscal risks from climate change and publishing it in the Medium-Term Macroeconomic Policy Statement (MTMPS))
RM6 is a critical area identified in C-PIMA study and has been discussed with the WB and the ADB for synergies in the PIM reform agenda. (RM6: Government to issue a circular on an update to the Green Book1/ to include supplementary guidance on sector- specific methodologies that integrate climate considerations in the appraisal of major infrastructure projects starting from two key sectors)
RM8 and RM9 are critical areas identified in C-PIMA study and have been discussed with the WB and the ADB for synergies in the PIM reform agenda. (RM8: Government to adopt an updated PPP policy and framework that integrates climate-related risks and develop relevant guidelines) (RM9: Government to issue a circular on the adoption of an annex to the Green Book that specifies selection and prioritization criteria for major infrastructure projects that is aligned with the NDC and the NAP)
RM10 targets critical areas identified in C-PIMA study and have been discussed with the WB and the ADB for synergies in the PIM reform agenda. (RM10: Government to establish a public asset register module of the iBAS++ and will incorporate information on climate-related risks and vulnerability of new public assets to the module)
Climate polices for Bangladesh, supported by the World Bank, should help the authorities (1) implement climate-responsive PIM reforms to make infrastructure investment green and resilient and (2) better manage climate-related risks to enhance financial sector resilience. 		No.No..No.No.
Government adopts a periodic formula-based price adjustment mechanism for petroleum products
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BarbadosBRBEFF, RSF7-Dec-226-Dec-25R3, R3CR/24/196High....NoNoNo-2-0.41.62.54.52927.33127.7....YesNoNoNo.....NoNoYesReform measures to be pursued under the RSF have been identified in close collaboration with the World Bank and the IDB to address long-term structural climate resiliency and adaptation challenges and meaningfully strengthen macroeconomic stability, including by sharply reducing balance of payments pressures as the economy fully transitions to renewable energy.
RM1. (i) Approve the Planning and Development Act to improve the climate resilience of roads through improved drainage and other interventions. (ii) Table in Parliament the Water Re-use Bill, incorporating the new water re-use policy. (iii) Fully operationalize the National Environmental and Conservation Trust. (Development Partner Role: World Bank Green and Resilient Recovery Development Policy Loan.)
RM 2. (i) Include a fiscal risk statement focusing on climate change risks in the budget for FY2023/24; (ii) Cabinet to approve Procurement Act regulations to enhance efficiency and effectiveness of public expenditure and support green procurement; (iii) Cabinet to approve a sustainable/green public procurement framework providing operational guidelines to implement sustainable/green procurement, in line with international best practice; and (iv) Cabinet to approve guidelines for climate/green budget tagging, in line with international best practice, and mandate that the results of the budget tagging be published in an annex in the annual budget. (Development Partner Role: World Bank Green and Resilient Recovery Development Policy Loan, and World Bank TA on climate/green budget tagging.)
RM 3. Government to table the National Comprehensive Disaster Risk Management Policy to support mainstreaming of comprehensive DRM principles into ministry and agency budget planning, ensuring resilience in government and business continuity after a disaster event. (Development Partner Role: World Bank Green and Resilient Recovery Development Policy Loan.)
RM 8. Table in Parliament the New Electricity Supply Bill to (i) enhance competition in the electricity market and (ii) introduce local participation in renewable energy investment. (Development Partner Role: World Bank Green and Resilient Recovery Development Policy Loan)		No.YesBothBarbados is moving forwards with implementation of its ambitious climate policy agenda, supported by the RSF arrangement. Given high vulnerability to climate change, the authorities are making strong efforts to increase climate resilience and secure a sustainable and prosperous future, including by making Barbados a green and fossil fuel-free country by 2035.13 Achieving this goal involves implementing a broad set of policies and making investments to adapt to climate change and adopt renewable energy (RE) sources. These efforts are supported by the Fund, including through the RSF arrangement, and other development partners (see Table 8).14 The RSF arrangement is supporting the authorities’ efforts to build resilience to climate change, through its policy reform measures, by increasing policy space for investment through its long-term financing, and catalyzing financing for investment in resilient infrastructure and the envisaged transition to RE sources. Climate investments will also strengthen growth and the external position and mitigate risks to debt sustainability.
An expansion of energy storage is crucial to integrate renewable energy sources, balance supply and demand, and ensure a stable supply of electricity. With the national grid currently only able to absorb around 100MW of electricity, efforts to increase the provision of RE to the grid and facilitate the transition to renewable sources, depends on adding energy storage to the system. Following the recent establishment of a new framework in September 2023, to increase investments in energy storage (RM#6), a four-year pilot project to gather data on the functioning of energy storage systems in Barbados is now underway. In parallel, the authorities are exploring competitive procurement methods, including auctions and direct negotiations with international storage system providers to gather information on the availability and affordability of storage solutions for potential investors in Barbados. The authorities’ goal is to have the first licenses for energy storage in place by end-2024. Meanwhile in May, the Fair Trading Commission delivered its decision on the BLPC utility’s application for pre-approval of investments and cost recovery through the Clean Energy Transition Rider, granting approval for 15 MW of the 90 MW of battery storage originally applied for. The BLPC is conducting a full assessment of the implications of the decision for the market on storage investments by the utility company.
Work is underway to table a New Electricity Supply Bill in Parliament by September 2024 (RM#8). The objective of the new bill is to establish an overarching framework for renewable energy investment, enhancing competition in the electricity market and promoting local participation in RE investment. The draft bill that has been approved by Cabinet is currently under a public consultation process.		No.No.
Government to close remaining regulatory gaps in licensing policy/approvals framework to increase investments into battery storage technologies to meet energy demand.
.
Government to table in Parliament the New Electricity Supply Bill to (i) enhance competition in the electricity market and (ii) introduce local participation in renewable energy investment.
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7
BeninBEN
EFF, ECF, RSF
8-Jul-227-Jan-26R3, R3, R3CR/24/003Lower-middleModerate...NoNoNo-5.5-2.92.6-4.4-2.114.31619.818.9....YesYesNoYesWhile the ongoing phase out of fuel subsidies in Nigeria is generally an opportunity for Benin, it entails BOP costs and loss of income for some population groups, requiring a careful management of the transition (Box 3). • Recent pump price hikes in Nigeria have eliminated the price differential between formal and smuggled gasoline in Benin. This has incentivized the shift towards formal demand for fuel by Beninese households, increasing its share from 11 to 27 percent. • The 2023–24 fuel subsidy bill is now projected to around 0.4 ppt of GDP under current oil price forecasts (and assuming that the above partial shift to formal gasoline consumption is not reverted). • A higher cost of smuggled gasoline provides an opportunity for developing the local fuel distribution network in Benin—undermined over decades by the illicit traffic of fuel. This would also generate revenues and reduce households’ vulnerability. If international oil prices remain elevated amidst geo-political tensions, the authorities are committed to adjust pump prices further in the near-term as needed to contain the budgetary cost of fuel subsidies, considering the impact on formal demand for fuel vis-à-vis the informal counterpart smuggled from Nigeria (volume effect). Fuel pricing could be further informed by the pending IMF TA on fuel subsidy reform.
In the medium term, energy subsidy reform in Nigeria, if sustained,5/ would lead to a better reallocation of resources and higher tax revenues in Benin. Informal sales of gasoline would decline, paving the way for the expansion of the formal fuel distribution network. A tax of CFAF 143 per liter is currently collected on official gasoline prices. Higher formal gasoline sales will in turn generate higher tax revenues. The government has responded by a gasoline pump price hike and designing measures to support the expansion of the fuel distribution network. Official prices of gasoline were increased in August by 40 CFAF (4.6 percent), to FCFA 680, bringing in line with kpayo price levels. In parallel, a pilot of 2000 mini-stations spearheaded by the government is being implemented to foster the formalization of kpayo in view to address safety concerns and levy taxes (kpayo is often unsafely stored in large informal depots and mini-tanks in households, often leading to fire incidents).
Pillar 3: Supporting mitigation efforts. Although Benin’s contributions to global greenhouse gas emissions are very limited, climate mitigation will be necessary along the country’s development path. In addition to containing fiscal cost, a comprehensive fuel subsidy reform informed by upcoming FAD CD (RM11) will preserve competitiveness as the global economy transitions away from fossil fuels; it will also signal Benin’s commitment to the global climate agenda. Such a measure will complement ongoing pump price hikes towards cost recovery levels under the EFF/ECF. To mitigate the negative impact of this measure on poverty, it will be essential to design a compensatory mechanism for the vulnerable population using the Social Registry (RSU). This will require the adoption of an implementation framework for the social registry (RSU), defining the governance structure of the Management Information System (MIS) and providing detailed operational guidance (RM12). The RSF will also aim to implement a comprehensive electricity tariff reform to remove subsidies that indirectly support fossil fuel emissions (RM13) as well as remove obstacles that remain to the development of renewable energy, building up on work already supported by the Millennium Challenge Corporation (RM14). These measures in line with the objectives of the government National Electrification Strategy (SNE) to achieve universal access to electricity by 2030, will require a total investment of around US$1.1 billion over the ten-year period (or 5 percent of 2022 GDP; World Bank CCDR, 2023) with potential BOP implications through higher imports and current account deficits.
RM11. Comprehensive fossil fuel subsidy reform: including (i) the design of a simple tax structure taking into account the specificities of Benin’s local fuel market; and (ii) reform the pricing mechanism, in line with the conclusions of IMF technical assistance. (Institutionalize fuel pricing in a way that systematically aligns domestic pump prices with international oil prices over the cycle. Enables mobilization of private climate finance by sending price signal to investors.)
RM 13. Electricity tariff reform: Design and adopt a comprehensive and gradual electricity tariff reform to fully remove electricity subsidies and reflect cost-recovery levels, with the first phase to be implemented in 2025. (Remove electricity price subsidies that indirectly support fossil fuel emissions, and support progress toward the national objective of reaching a 20-30 percent renewable energy penetration by 2035)		.YesYesTo mitigate the negative impact of this measure on poverty, it will be essential to design a compensatory mechanism for the vulnerable population using the Social Registry (RSU). This will require the adoption of an implementation framework for the social registry (RSU), defining the governance structure of the Management Information System (MIS) and providing detailed operational guidance (RM12).
Accelerating the operationalization of the social registry will facilitate targeting, particularly as social programs are being scaled up. This will also help compensate vulnerable households in the fiscal adjustment process, including as fuel subsidies are phased out. Enhancing the shock-responsiveness of Benin’s social safety nets by supporting the development of a climate-proof social registry would help channel support to the vulnerable when a natural disaster hits. Effectively establishing PNASI as a fully government-managed school feeding program will require timely parliamentary approval of the law adopted by the council of ministers in April.
RM12. Social protection in relation to fuel subsidy reform. i) Establish a compensatory mechanism to limit the effect of fuel subsidy reform on vulnerable groups using the Social Registry (RSU); ii) adopt an implementation framework for the RSU which defines the Management Information System (MSI) governance structure and provides detailed operational guidance, while ensuring adequate financial, human, and material resources to the unit responsible for the operationalization of the RSU. (Enhance Benin’s social safety net by supporting the operationalization of the social registry and institutionalizing it to protect vulnerable groups and ensure social cohesion in implementation of subsidy reform (RM11).)		NoNoYesBenin has sufficient time remaining under the EFF/ECF to implement climate reforms under an RSF, leveraging key diagnostics such as the IMF’s C-PIMA and the World Bank’s Country Climate and Development Report (CCDR).
Box 4. The Cost of Climate Inaction1/ This box draws on the World Bank’s CCDR and other modeling tools to illustrate the cost of inaction in climate adaptation in Benin. Tailored scenarios suggest that Benin’s debt sustainability, while relatively resilient to one-off shocks, could be significantly imperiled in the long term absent decisive climate action (see also DSA). Climate change risks are incorporated into the DSA in a twofold manner: (i) a customized natural disaster stress test (calibrated in line with the shock used for the IMF DIGNAD2/ model; Annex IV); and (ii) an alternative no-adaptation scenario, to account for long-term structural risks. The stress test reveals that the PV of debt-to-GDP ratio would increase in the event of a natural disaster, with the WB-financed contingent line mitigating the effect on debt sustainability. The shock is calibrated to simulate a catastrophic flood event like the one experienced by Benin in 2010. It includes a provision for immediate liquidity on relatively favorable terms through disbursements of the World Bank’s Catastrophe Deferred Drawdown Option (Cat DDO), contingent upon such a shock (see DSA). Nevertheless, the PV of PPG debt-to-GDP ratio would be about 5.2 ppts higher over the long term than under the baseline (Box 4 Figure 1a). Public debt is on an unsustainable trajectory under the no-adaptation scenario (Box 4 Figure 1b). Projections from the World Bank CCDR3/ were used to reflect adverse climate impacts, totaling real GDP losses of up to -16 percent of GDP by 2043, primarily through losses in labor heat stress and productivity.5/ Public debt under this scenario would increase dramatically and quickly become unsustainable, with the PV of debt-to-GDP ratio continuously above its threshold starting in 2030, mainly due to rising GDP losses along the projection horizon in the absence of strong adaptation policies.
Text Table 7. Benin: Climate-Related Priorities Supported by Development Partners. Key Country Challenge; Climate-Related Priority; Diagnostic reference; Development; partner involvement. Social Safety Nets; To strengthen the sustainability and adaptability of the; social protection system, establish responsibilities and; resources for the identification of households living in; flood-risk areas to be integrated into the social registry; World Bank CCDR; World Bank DPO. Cities exposed to climate hazards; To reduce climate risks in cities, adopt and submit to Parliament the draft Urban Planning Code (Loi sur l’urbanisme), taking into account environmental sustainability, climate change adaptation and hazard assessment in urban planning and development (via transmission decree); World Bank CCDR’ World Bank (DPO and Building Resilient and Inclusive Cities Program). Coastal Erosion posing risks to the economy; To reduce the impact of climate change on coastal erosion, adopt decrees (i) creating and approving the statutes of the national unit for the protection and management of the coastline and its subdivisions and (ii) setting the terms and conditions for implementing the directives for the development and enhancement of the coastal zone (via decrees); World Bank CCDR; World Bank DPO AfDB. National Disaster Risk Management; To strengthen the national disaster risk management system, adopt a decree defining the measures and procedures to enhance disaster risk preparedness, financing, and response (via decree); World Bank CCDR; World Bank DPO.
Social protection. In coordination with the World Bank, the RSF will aim to enhance the shock-responsiveness of Benin’s SSN by supporting the development of a climate-proof social registry (RSU+). This would require gathering and updating data on population groups more prone to natural disasters (such as flooding), with a view to channel support when a natural disaster occurs (RM8).
Building code: The RSF will aim to adopt a building code and requisite secondary legislation that incorporate technical standards favoring adaptation to future climate conditions to strengthen buildings’ resilience against floods, heavy rains and increased heatwaves, as well as enhancing energy efficiency (RM10). This reform measure will complement ongoing work supported by the World Bank on urban planning: while the work on urban planning will lead to better informed choices for localization of housing and infrastructure, the work on building code and secondary legislation will improve the resilience of new constructions.
WB is strongly involved in the water sector and provides complementary support to governance reforms. (RM5. Water Resources: (1) Adopt a revised decree of the National Water Council, which would include a mandate to monitor groundwater and surface water resources and equip the Council with sufficient human and financial resources to discharge its mission; and (2) Realize a strategic groundwater assessment and have the National Water Council Supervise and validate this assessment.)
WB is heavily involved in the water sector and may support this reform. (RM6. Water Tariffs in Urban Areas. Institutionalize a mechanism for water tariffication in urban areas based on the following parameters: (i) a tariff study; (ii) a transparent tariff structure in conformity with international good practices and (iii) a financial equilibrium model.)
The World Bank is implementing a Community Driven Development project in the northern part of Benin. (RM7. Local Government: Government to propose an amendment to the 2024 budget law setting the principle of taking into account community-identified climate priorities in the criteria for allocation of transfers to local authorities, [whether they take place in the current framework of FADeC – Fund for Support for Communal Development – or within the framework of the new Communal Investment Fund that will replace FADeC], and simulate the implementation of this mechanism for the 2024 FADeC.)
WB support as part of the Social Safety Net Program for Results (PforR). (RM8. Social protection. Integrate information on climate risks into the Social Registry (RSU), in particular for municipalities identified as being at high risk of flooding.)
Complements ongoing WB work on urban planning and MCC efforts in the areas of energy efficiency. (RM10. Building codes: Government to adopt in Council of Ministers a draft building code (projet de loi portant loi- cadre sur la construction et l'habitation) incorporating technical standards favoring adaptation to future climatic conditions, including with respect to expected climate- hazards’ magnitude and frequency, and favoring low-carbon and climate resilient options for planning, technical design, maintenance and inspections, as well as requisite secondary legislation.)
The authorities will benefit from WB technical support in elaborating the RSU implementation framework and defining an adequate governance structure. (RM12. Social protection in relation to fuel subsidy reform. i) Establish a compensatory mechanism to limit the effect of fuel subsidy reform on vulnerable groups using the Social Registry (RSU); ii) adopt an implementation framework for the RSU which defines the Management Information System (MSI) governance structure and provides detailed operational guidance, while ensuring adequate financial, human, and material resources to the unit responsible for the operationalization of the RSU.)
World Bank also stands ready to provide some support based on their expertise on the electricity market in Benin. (RM 13. Electricity tariff reform: Design and adopt a comprehensive and gradual electricity tariff reform to fully remove electricity subsidies and reflect cost- recovery levels, with the first phase to be implemented in 2025.)
WB may provide some support based on their expertise on the electricity market in Benin. MCC – which provided significant support in this area – is winding down their involvement after the expiration of the MCA-II Compact. (RM14. Support to renewable energy: Remove key obstacles to development of renewable energy (RE) by adopting regulations and decisions to (i) putting in place a connection cost policy supporting connection for RE generation and (ii) committing to carrying out regular assessments of the flexibility of the grid and issues related to renewable integration.)
World Bank may provide some inputs given the joint work with IMF on alignment methodologies. (RM15. Enhance the climate financial information architecture by the adoption by way of decree (arrêté) by the Ministry of Economy and Finance, and subsequent implementation of two complementary frameworks: i) a climate-related taxonomy (reference framework for private sector climate investment) covering mitigation and adaptation needs across key sectors defining financing and climate-related targets and private financing instruments; and ii) a climate mitigation and adaptation data collection and dissemination mechanism, connected to the taxonomy, across key sectors for private companies and key economic infrastructures. This mechanism will be coordinated and implemented by the National Statistics and Demography Institute, requiring the adoption of an arrêté under the 2022 legal framework governing the Institute’s missions.)
The World Bank CCDR highlights the role of risk-sharing mechanisms in Benin to crowd in private sector investment. The report underlines the range of options to not only crowd- in new sources of finance, but also to leverage the more concessional financing to incentivize private sector investment. It emphasizes exploring ways to raise additional public funds through instruments that may be financially efficient, such as credit-enhanced sustainable or green loans, sustainability-linked bonds, and others. These sources of financing could be used in a variety of ways, such as using them for liquidity backstops for climate-focused projects and to incentivize private sector investments—for instance in the energy sector.
The most recent Development Policy Operation (DPO) of the World Bank has an explicit focus on increasing inclusive and resilient growth. The DPO has multiple climate-related triggers including strengthening social safety nets for vulnerable population, urban planning code to decrease exposure to climate-related hazards, comprehensive policy to manage coastal risks, and strengthening disaster risk management. These climate-related triggers are part of the larger aim of the DPO that seeks to foster the private sector development, by for example updating the PPP law and improving investment climate. In addition, as mentioned above, following the Bank’s risk layering approach Benin has received Cat DDO—which would complement the disaster fund, FONCAT, by providing finance for rarer, higher severity events. The DPO also seeks to complement other World Bank programs.
Benin has several programs with the World Bank aimed at increasing resilience to climate change. There are two World Bank active programs specifically addressing urban resilience against climate risks in Benin (Stormwater Management and Urban Resilience Project, and the Building Resilient and Inclusive Cities Program). Addressing issues related to deforestation, the Gazetted Forests Management Project improves the integrated management of targeted forests, to increase access to fuelwood produced sustainably, and to strengthen selected non-timber forest product value chains for forest-dependent communities. Relatedly, the Bank is looking to increase productivity and market access for selected agri-food value chains through Agricultural Competitiveness and Export Diversification Project. Recognizing the rapidly growing emissions from transport, the Grand Nokoué Sustainable Urban Mobility Project is planned to contribute to decarbonizing the urban transport sector while expanding urban mobility.
The World Bank is also active in this area through the Benin Electricity Access Scale-up Project that aims at supporting the increase access to electricity services, including through more resilient networks.		No.YesPrivate
RM14. Support to renewable energy: Remove key obstacles to development of renewable energy (RE) by adopting regulations and decisions to (i) putting in place a connection cost policy supporting connection for RE generation and (ii) committing to carrying out regular assessments of the flexibility of the grid and issues related to renewable integration.
No.No.
Comprehensive fossil fuel subsidy reform: including (i) the design of a simple tax structure taking into account the specificities of Benin’s local fuel market; and (ii) reform the pricing mechanism, in line with the conclusions of IMF technical assistance.
Electricity tariff reform: Design and adopt a comprehensive and gradual electricity tariff reform to fully remove electricity subsidies and reflect cost-recovery levels, with the first phase to be implemented in 2025.
Support to renewable energy: Remove key obstacles to development of renewable energy (RE) by adopting regulations and decisions to (i) putting in place a connection cost policy supporting connection for RE generation and (ii) committing to carrying out regular assessments of the flexibility of the grid and issues related to renewable integration.
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8
Burkina Faso
BFAECF21-Sep-2320-Sep-27R1CR/24/249LowModerate...NoNoNo-6.7-33.7-4.4-0.722.223.828.926.8....YesNoNoYesThe authorities remain committed to their consolidation efforts in line with the program (MEFP ¶20-27). The program envisages a further reduction of the overall deficit from an estimated deficit of 6.5 percent of GDP in 2023 to a projected 5.6 percent of GDP in 2024. The consolidation would be achieved primarily by maintaining strong tax revenue collection efforts (17.9 percent of GDP), and current expenditure rationalization (including lower fuel subsidies (Text Table 3 and Box 2). Improving fiscal governance and transparency, and a strategy to clear existing arrears and prevent their accumulation, will also be key to reduce fiscal risks (Annex VII).
Reducing current transfers, especially energy subsidies (which amounted to CFAF 189.3 billion or 1.5 percent of GDP in 2023), by progressively adjusting fuel pump prices closer to a full pass-through of global oil prices and improving the performance of the two public utilities (SONABHY and SONABEL)		.YesNo.NoNoYesThe authorities have suspended cash transfers reflecting their concerns over financing of terrorism. Cash transfers can be efficient measures to address food insecurity, extend social protection, and help support local economic activity (Annex III), but must be balanced against implementation risks. The authorities are working with partners, including the World Bank, on creating and expanding adaptive social protection systems, which may include cash transfers and other measures.
Ongoing reforms in social protection have benefited from World Bank and IMF support. The World Bank’s Social Safety Net project (US$196 million; 2014-2024) has provided financial and technical assistance to the deployment of the Unique Social Registry and the elaboration of the PAMPV. Further technical assistance was provided through the World Bank- administered Sahel Adaptive Social Protection Program. Various World Bank Development Policy Operations (DPOs) helped advance these reforms (e.g., the institutionalization of the social registry and the creation of the PAMPV). In addition, under the ECF arrangement, the authorities are committed to achieve the goal of covering at least 180,000 of the poorest households by December 2025 (possible SB). IMF program conditionality will thus help maintain Burkina Faso’s reform momentum of putting in place a well-functioning SSN to target the poorest and reduce regressivity in the provision of social assistance.
World Bank Fiduciary Assessment. The World Bank has, as part of its ongoing IDA operations, undertaken a fiduciary assessment of public financial management, disbursement, and auditing aspects, complementing the IMF’s CD efforts.		No.No..No.No.
Conduct a review of energy subsidies and an assessment of the application of the price-setting mechanism, to move towards a reduction in subsidies over the program period.
Adopt performance contracts with SONABHY and SONABEL, as well as the tripartite contract between the government, SONABHY and SONABEL.
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9
BurundiBDIECF17-Jul-2316-Sep-26R0CR/23/270LowHigh...NoNoNo-8.9-35.9-6.4-0.626.228.93531.9
Subsidies and social benefits
3.23.20YesNoNoYesSubsidies. With the still high fuel and fertilizer import prices and the initiated ER unification, containing subsidies and related contingent liabilities is critical, as is improving targeting. Implicit subsidies from tax holidays on fuel products are significant (cumulative cost of about 0.7 percent of GDP, para. 9). Considering the unification-related ER depreciation and consequent currency mismatches and contingent liability risks, the authorities are revising the domestic fuel price structure to reflect cost-recovery prices. 6 If unavoidable, they will limit subsidies to gasoil (mainly used for public transportation and merchandise freight) to temporarily protect the vulnerable. Fertilizer subsidies operated in 2022/23 are expected to cover the cost for 2022–24. The authorities committed to limit additional fertilizer subsidy during the period and discontinue the approach of prepaying subsidies.
Containing subsidies, especially for fuel and fertilizers. With the still high fuel and fertilizer import prices and the initiated ER unification, fiscal policy must be attuned to containing subsidies and related contingent liabilities, while managing domestic inflation. Fuel subsidies will continue to weigh on budget execution owing to global price hikes. Revenue collection is hampered by tax holidays on fuel products implemented since October 2021 to avoid large pump price increases, with a cumulative cost of about 0.7 percent of GDP. In light of the ER unification, revising the domestic fuel price structure with the view of eliminating untargeted subsidies is essential. For example, subsidies could be circumvented to gasoil, which is mainly used for public transportation and merchandise freight. Other types of fuel-related subsidies should also be avoided, including direct subsidies to compensate the oil-related businesses for potential losses stemming from currency mismatches during the ER unification.2		.YesNo.NoNoNo.No.No..No.No..........
10
Cabo Verde
CPVECF, RSF15-Jun-2214-Jun-25R3, R0CR/24/009Lower-middleHigh...NoNoNo-4.3-2.12.2-2022.42626.728.2Social benefits3.83.7-0.1YesYesNoNoCurrent spending is projected at the level agreed in the program; however, there is a compositional shift from other current expenditures to subsidies of 0.2 percent of GDP to support: i) imports of a basic food staples, ii) the inter-island transportation company, and iii) energy/water SOEs to implement the social tariff for energy and water targeted to poor households.
Adaptation will require ecological and sustainable use of water resources, as well as greater energy efficiency. And this depends on a conducive environment to catalyze private investment in climate change resilience. To facilitate this, operators in both sectors need to be compensated for the cost-of-service provision either through the tariff, which might require increasing electricity and/or water tariffs, or through a combination of the tariff and a government transfer from the budget in case the government regulates the tariff, e.g., by providing a social tariff. Putting the sector on a sound economic footing and allowing the operators to run their organizations under commercial-like terms, can enhance efficiency and creates transparency and competition.
Our RSF (i) by ensuring that the tariff reflects the full cost of service provision will support energy efficiency, (ii) by ensuring the availability of financial resources will facilitate the upgrading of network infrastructure, and (iii) by promoting the technical stability of the system and the financial sustainability of the offtake promote the development of appropriate market conditions (RM5, by end-April 2025).		.NoYes
The adverse implications of any adaptation and mitigation reforms on the vulnerable or poor should be compensated through targeted transfers from the social safety net. The reliability of the social safety net could be enhanced by expanding the social registry towards universal coverage. The cost to the government of introducing higher tariffs and compensating the vulnerable and poor could be neutral, while improving the situation of the households that receive compensation. Compensation measures can also be designed to compensate the vulnerable and poor from the impact of the tariff increase while providing extra revenues to the government. A careful design of such a reform and the implementation of a well-designed communication strategy is critical for ensuring the full benefit while avoiding social and political opposition to the reform.
Yes*NoYesWorld Bank has prior actions and triggers in the latest DPF supporting a stronger PIM framework and aligned with the C-PIMA recommendations. (RM2. To improve fiscal risk management, the Ministry of Finance will conduct and publish in the annual Fiscal Risk Statement quantitative analysis of the fiscal risks generated by climate change.)
To enhance the viability and performance of the energy sector, ELECTRA (Empresa de Electricidade e Água), the national electricity and water company separated the electricity and water businesses and started the unbundling of electricity services. The latter, supported by the World Bank, will be an important step towards creating a transparent and competitive environment conducive for private sector investment in energy production.
The C-PIMA identified that climate change considerations are not adequately integrated into the public investment planning process. There is a need to improve awareness of climate-related risks in fiscal planning. The World Bank’s Developing Policy Financing (DPF) loan has conditions that support improved Public Investment Management (PIM), and the RSF will complement them to ensure that better risk analysis and investment planning are also applied to Public-Private Partnerships (PPPs), thus playing a catalytic role in attracting climate finance
Key C-PIMA recommendations have been included in the World Bank’s DPF loan to foster climate sensitive and efficient public investment management. The DPF foresees the development and approval of a PIM legal framework regulating the whole capital project cycle (planning, appraisal, selection, capital portfolio management, etc.) and including climate considerations. Another World Bank’s DPF condition relates to the inclusion of climate and disaster risks assessment in the preparation of public investment projects. The World Bank’s DPF loan also foresees climate budget tagging to improve visibility and tracking of climate investments.
The authorities plan to increase the resilience of the country ’s macro-fiscal stance to climate change, by integrating climate risks into fiscal planning. This is in line with the C-PIMA assessment and complements the World Bank’s engagement.
Social safety nets will be strengthened through improved targeting of social spending. In partnership with our external partners (World Bank and African Development Bank), we will continue to work towards better targeting of social programs and will sign a pact for poverty reduction, with the goal of eliminating extreme poverty by 2026.
Through the 2019 World Bank (WB) Disaster Risk Management Development Policy Financing, we also accessed the Catastrophic Deferred Drawdown Option (Cat-DDO). With WB support we are designing a Climate and Nature Fund.
WB energy projects are providing support on unbundling the energy SOE. (RM5. To support energy transition plans, which will require substantial infrastructure investment the government will, (i) determine the cost-recovery rate for the provision of electricity (fully reflecting operational and capital cost), (ii) identify any discrepancy between the existing tariff and so defined cost recovery, (iii) undertake a distributional impact assessment, and (iv) publish and adopt regulations establishing a methodology for adjusting electricity tariffs to the identified cost-recovery rate, to be applied by the regulator (thereby achieving full cost recovery) by the test date, with transparent periodic adjustments. (Ministry of Industry, Trade and Energy and MoF)).
WB. (RM7. The Unique Social Registry (USR) will be expanded to provide the basis for a social support system that can efficiently mitigate the implications of climate transition and climate hazard events. To this end, the Ministry of Family and Social Inclusion and the MoF will expand coverage of the USR to 100 percent of poor and vulnerable households (including from rural areas) as identified based on the latest household budget survey, and offer inclusion in the USR to 100 percent of the households in climate vulnerable areas.)		No.YesBothEnergy efficiency and transition will support mitigation goals, resilience and, through the link to water, adaptation. More than 80 percent of electricity generation relies on imported fossil fuels products, and the majority of the GHG emissions come from the energy sector. This also represents a fiscal risk as the government shields households from the effect of pass-through costs. However, Cabo Verde has potential from renewable energy sources (RES). The energy transition will: (i) contribute to emission reduction and the attainment of Cabo Verde’s NDC objectives; (ii) allow for a cost-efficient response to growing energy demand from the desalination reliant water sector; and (iii) yield favorable long-term impacts in its balance of payments as fossil fuel imports decline. In turn, the energy transition will require: (i) substantial public investment in electricity grid infrastructure to build the capacity for higher RES in the electricity mix; and (ii) market conditions that encourage private investment in energy production. The RSF will support energy efficiency, facilitate the upgrading of network infrastructure, and promote the development of appropriate market conditions. The RSF will ensure resources for infrastructure investment, which together with reforms will prepare the electricity system for the onboarding of more RES, a precondition for private investment in RE capacity (RM5). The authorities, with support from the WB, are taking important steps to unbundle the energy sector. FAD CD can support the design of tariff reforms including distributional impact analysis of policy measures in this field.
Electricity and water sector operators face important financial challenges. While the energy sector is managed at the national level and the water sector at the municipal level, both sector face similar structural challenges. Energy and water tariffs have not covered the cost-of- service provision and the publicly owned utilities have accumulated losses. This has resulted in a financially unsustainable situation for several entities, including the national electricity company and several municipal water companies, resulting in a low-quality, low-tariff cycle. Important reforms are ongoing in both sectors to address these challenges: • Electricity. To enhance the viability and performance of the energy sector, ELECTRA (Empresa de Electricidade e Água), the national electricity and water company separated the electricity and water businesses and started the unbundling of electricity services. The latter, supported by the World Bank, will be an important step towards creating a transparent and competitive environment conducive for private sector investment in energy production. To this end, it will be important to improve the management and financial performance of the publicly owned transmission and distribution companies to make them a reliable partner for private sector investors, who will have to rely on the public sector entity as the single buyer and off taker. Without further investment, Cabo Verde will only be able to move to about 35 percent RE, far below the 2030 objective of 54 percent. Important public infrastructure investment, including in storage, will be required to move beyond 35 percent renewable target in the energy mix. The coordination required to synchronize the strengthening of grid infrastructure and the expansion of RE capacity is exacerbated by the segregation of the grids, which need to be managed on an island-by-island basis.
Building climate change resilience will require substantial investment in energy and water infrastructure. Infrastructure poses a binding constraint for the efficient operation of the electricity and water sectors and the acceleration of the energy transition. The current electricity infrastructure has only limited capacity to incorporate RE. Cabo Verde’s ability to benefit from the transition to a clean and less expensive generation matrix is limited, since it must maintain significant thermal capacity to cover demand when RE is not available. For the energy sector investment should focus on wind and solar capacity, energy storage solutions and grid reinforcement, e-mobility, and energy efficiency measures.		No.No.
To support energy transition plans, which will require substantial infrastructure investment the government will, (i) determine the cost-recovery rate for the provision of electricity (fully reflecting operational and capital cost), (ii) identify any discrepancy between the existing tariff and so defined cost recovery, (iii) undertake a distributional impact assessment, and (iv) publish and adopt regulations establishing a methodology for adjusting electricity tariffs to the identified cost-recovery rate, to be applied by the regulator (thereby achieving full cost recovery) by the test date, with transparent periodic adjustments. (Ministry of Industry, Trade and Energy and MoF)
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11
CameroonCMR
EFF, ECF, RSF
29-Jul-2128-Jul-25R6, R6, R0CR/24/237Lower-middleHigh...YesYesNo-2.4-0.61.8-3.9-1.31415.616.916.3....YesNoNoYesThe authorities expressed their commitment to maintain a fiscal path in line with the program objectives. They plan to tighten the fiscal stance further from a non-oil primary deficit of 2.6 percent of GDP in 2023 to 2 percent of GDP in 2024. This will be achieved mainly through expenditure rationalization, including through lower spending on the fuel subsidy, following the increase in domestic pump prices in early 2024 and further improvements in non-oil revenue mobilization (Text Table 2). Continued fiscal adjustment through stronger expenditure discipline will be key to address liquidity challenges amidst tight financing conditions
Sustaining Fuel Subsidy Reform while Mitigating the Impact on the Most Vulnerable 19. The authorities remain committed to implementing fuel subsidy reforms. They increased domestic pump prices by 15 percent in early 2024—the second price adjustment since 2016. Staff estimates that the 2024 increase would reduce the subsidy by about CFAF 190 billion (0.6 percent of GDP) given current assumptions, including lower international oil prices (Text Figure 4). The 2024 revised budget, however, includes a carry-over of the fuel subsidy of about CFAF 196 billion (0.6 percent of GDP) from 2022 and 2023, and an additional levy of CFAF 48 billion (0.2 percent of GDP) on fuel products for infrastructure rehabilitation.
The authorities acknowledge that an unexpected increase in international oil prices will increase the fuel subsidy and could undermine fiscal sustainability. They note that the cost of the fuel subsidy in 2022 exceeded CFAF 1000 billion (3.7 percent of GDP) and has had an adverse impact on government finances in 2023 and 2024, narrowing the room for other priority spending. The authorities remain committed to phasing out the fuel subsidy by the end of the program.		0.60%YesYes
To mitigate the impact of higher fuel prices, the authorities envisage new measures in the 2024 revised budget law. These measures include an increase in family allowances and an increase in municipal transfers for the purpose of improving the living environment in cities. The authorities will also keep the higher allocations for monetary transfers (filets sociaux) introduced in 2023. Going forward, staff recommends strengthening the social safety nets to allow for more targeted measures to mitigate the impact of lower fuel subsidies.
NoNoYesIn addition, with the support of the World Bank, the Ministry of Economy, Planning and Regional Development (MINEPAT), in collaboration with the other ministries concerned, has defined the criteria for prioritizing and selecting projects integrating criteria related to climate change and has developed a manual of selection procedures (RM3, MEFP ¶46).
There is an urgent need to advance reforms and resolve the liquidity crisis in the electricity sector. Weaknesses in operational performance, payment discipline by public agencies, and the enforcement of sector regulations, have undermined the financial viability of the electricity sector. The sector receives government subsidies and is not financially self-sufficient. Developing the sector requires substantial investments that could yield significant budget savings over the medium term. The construction of a new hydro power plant (HPP), Nachtigal, is expected to significantly improve energy supply and the generation mix. However, significant investments are needed to build transmission and distribution infrastructure. Until the HPP is connected to consumers, there are associated fixed charges to be borne by the state. The authorities developed an energy sector program that would require an investment of US$945 million (1.8 percent of GDP) over 2024-28 and will be implemented with support from international development partners. The World Bank is planning a US$300 million project over 2024-28 to support a transmission line construction, with the first disbursement of US$60 million expected in 2024. The African Development Bank (AfDB) is planning a sectoral budget support of US$80 million. The reform measures to support the electricity development program include a tariff increase and the installation of electricity meters in public agencies.
With the support of the World Bank, the government has also completed a review of public spending. These assessments will be used to develop a new program of structural measures to strengthen public financial management (supported by a detailed action plan), which will be finalized by June 2024.		YesThe Mining Code has been revised, and the publication of the implementing texts is imminent. The new code reflects the creation of the National Mining Company, SONAMINES, responsible for defending the state's interests in this sector and was presented to Parliament in November 2023. The publication of the implementing texts is expected by end-June 2024 (SB2, June 2024).
Finalize and publish all implementation texts of the 2016 Mining Code (Law n ° 2016/017 of December 14, 2016). The draft implementing texts of the mining code have not been finalized. The creation of the national mining company, SONAMINES, responsible for defending the interests of the State in the sector, necessitated a revision of the Mining Code, which was adopted by Parliament in 2023 Following its enactment in December 2023, the government will publish the implementing texts of the new mining code as soon as possible.
Implementation of the SONARA Restructuring Plan. Carry out the in- depth technical economic and financial feasibility study of option no.3 validated by the President of the Republic related to a refinery complex with a hydrocracking unit, accompanied by the plans and design of the new refinery.		No..No.No.
Finalize and publish all implementation texts of the 2016 Mining Code (Law n ° 2016/017 of December 14, 2016).
Implementation of the SONARA Restructuring Plan. Carry out the in- depth technical economic and financial feasibility study of option no.3 validated by the President of the Republic related to a refinery complex with a hydrocracking unit, accompanied by the plans and design of the new refinery.
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12
Central African Republic
CAFECF27-Apr-2326-Jun-26R2CR/24/198LowHigh...NoNoNo-3.60.33.9-3.7-1.114.417.917.917.6....YesNoNoYesDespite a challenging environment, the authorities have broadly shown strong ownership to reforms. They phased out fuel subsidies
A well-functioning fuel market has emerged as a priority to protect macroeconomic stability and debt sustainability. Persistent uncertainty about the organizational structure has led to (i) subpar fuel supply to power economic activity and revenue collection; (ii) acute government liquidity pressures from revenue volatility; (iii) external arrears; (iv) rising debt service from accessing expensive regional financing to compensate for revenue shortfalls; and (v) inflation when fuel shortages have occurred. The authorities have started addressing these challenges by adopting the action plan for the fuel market (¶14), whose measures will have to be maintained over time.
Unlicensed fuel importers. A new measure will seek to tax such fuel imports at par with formal imports to discourage unfair competition from heavily subsidized fuel from Cameroon, Chad, or Republic of Congo that erodes the tax base. All duties and taxes would now be applied to unlicensed fuel imports and based on the same reference prices as licensed imports plus a 30 percent premium.
The authorities are committed to implementing an action plan of reforms to sustainably improve fuel supply and revenue collection. The action plan was designed with the support of the February 2023 and February 2024 FAD TA missions and in consultation with all stakeholders in the sector. It includes: • Enhancing the transparency of the current price structures (prior action). The authorities are expected to: i) publish the fuel price structures by marketer and import route; ii) introduce a new price structure for unlicensed fuel imports; and iii) modify the tax and quasi-tax components of price structures to respect transit and storage regimes. • Leveling the playing field in the fuel sector (prior action). Importers are supposed to: i) register as CAR taxpayers and establish a local office; ii) adopt the new forward-looking pricing mechanism; iii) obtain an agreement to import fuel into CAR; and iv) provide a written commitment to import at least 80 percent of total petroleum products via the river. Steps will also have to be taken to dismantle the monopoly on the distribution of fuel to large consumers and enforce sanctions for non-compliance. • Establish forward-looking price structures, based on pre-defined international reference prices, augmented with capped margins and transportation costs, and with a capped import premium. At current international reference prices, this new methodology should lead to lower pump prices and further reduce the competitiveness of unlicensed fuel imports. • Publish new price structures monthly (proposed new continuous SB). From July 25, 2024, the authorities will publish online new monthly price structures based on predefined international reference prices, augmented by taxes and quasi-taxes provided by the current regulations, capped margins, transportation costs, and an import premium. • Additional actions were identified to enhance the fuel market. An external audit of the fuel price cost and margin components will be launched in June 2024 (SB for third review). Further, a pump price adjustment mechanism will be adopted by April 2025 (SB for fourth review). This mechanism is part of a comprehensive strategy that also includes improvements in infrastructure and in stocking capacity.		.YesNo.NoNoYescleaned-up the public payroll (under the World Bank’s operation)
Thus, we remain committed to taking all the necessary steps to ensure a continuation of disbursements from the World Bank, that have helped finance wages in social sectors, and from the AfDB.
Further, we are discussing with the World Bank to finance the re-activation of a debt management software.
The new mining code was approved during the first half of 2024. With the support of the World Bank, we are committed to implementing the new mining code through the submission of the model mining agreement and the regulatory instruments that will govern the mining fund and the new public agencies, in line with international best practices.
The government remains committed to working with its technical and financial partners to make environmental reforms sustainable. We are working with the World Bank on the Country Climate and Development Report (CCDR), which is a springboard for refining our climate reform priorities.
With support from the World Bank, we have initiated a study on Natural Capital Accounting and Climate Finance (NCA) in the Congo Basin forests, aimed at assessing the value of forest resources and their impact on domestic revenues.
Revision of the HICP methodology: With the support of the World Bank, we have extended the geographical scope of the Harmonized Index of Consumer Prices (HICP) from one to six regions, increasing the number of products monitored to 700 and carrying out 13,000 monthly surveys across the country, enabling a more accurate assessment of inflation.
Activation of the HISWACA project: The Harmonizing and Improving Statistics in West and Central Africa (HISWACA) project, financed by the World Bank to the tune of 12 billion FCFA for CAR, has been in force since January 11, 2024. It supports statistical capacity building in several key areas, such as population census, agricultural and educational data collection, and institutional capacity building, with a budget of 3 billion FCFA already disbursed.
The implementation of a new legal framework governing SOEs would improve their financial oversight, which, along with other steps, should lead to better debt coverage going forward. Under the World Bank Sustainable Development Financing Policy (SDFP), the government has completed and published in 2021 the audits of the three largest state-owned enterprises operating in the energy, telecommunications, and water sectors (ENERCA, SODECA, SOCATEL). The objective of the audit was to assess their financial viability, increase the transparency in contingent liabilities reporting, and clarify the status of unaudited domestic arrears. 3 The government prepared and approved a cross-debt settlement plan for these SOEs based on these recent audits. 4
The World Bank SDFP provides an avenue to tackle the issues related to budget transparency via FY24 PPAs and onwards. Some additional progress on budget transparency has been accomplished toward building a reliable payroll database (GIRAFE) and increasing the integrity of the system underpinning public wage bill management and the ongoing Public Finance Review (PFR) from the World Bank. Moreover, the government has shown commitment to introducing a new, fully-fledged human resource management (HRM) information system (HRMIS) with the support of the World Bank-financed Public Sector Digital Governance Project (Projet de Gouvernance Numérique du Secteur Public or PGNSP).
For instance, the World Bank approved in June 2022, a US$138 million grant to improve access to electricity, strengthen the sector and promote the provision of off-grid solar systems for schools, hospitals, administrative centers, and agricultural purposes and US$70 million in financing to strengthen and improve the quality of health care to more than 40 percent of the CAR population. Several projects have also been approved over the past years to boost agricultural productivity, support agribusiness, private sector development, digital governance, and the quality of education. The World Bank will use its ongoing portfolio to finance certain non-discretionary government expenditures, including wages and salaries, in critical service delivery areas.
Part of IMF access during the life of the program has been deposited in an escrow account at the BEAC to supplement a World Bank’s wage payment operation. In line with the World Bank, the Fund disbursements benefit from verification processes and safeguarded disbursement arrangements to limit the risk of ineligible expenditures.		No.No..No.No.
Ensure i) the publication on the websites of the ministries of Energy or Finance of fuel price structures by marketer and import route; ii) the introduction of a new price structure for unlicensed fuel imports; iii) the modification of the tax and quasi-tax components consistent with the fuel action plan. Until July 24, 2024, the 10th of each month will serve as the deadline for publishing online the fuel price structures applicable to the previous month’s transactions. If this deadline is not met, the fuel price structures from the previous month will be automatically applied. These changes should be transparently reflected as amendments to the Presidential Decree n⁰18.295 that regulates fuel import prices. safeguarded disbursement arrangements to limit the risk of ineligible expenditures.
Take action to level the playing field in the fuel sector by ensuring all importers depositing at SOCASP follow the operating rules established by Decree n⁰12.019 and Decree n⁰18.295. In particular, all importers should: i) be registered as CAR taxpayers and establish a local office; ii) adopt the new forward looking pricing mechanism consistent with the Action Plan; iii) get a license to import fuel into CAR; and iv) provide a written commitment to import at least 80 percent of total petroleum products via the river.
From July 25, 2024, issue on the websites of the ministries of Energy or Finance new fuel price structures on the 25th of each month to be applied to the transactions of the following month. The new fuel price structures will be consistent with the fuel action plan, and based on predefined international reference prices, augmented by taxes and quasi-taxes provided by the current regulations, margins, transportation costs, and an import premium. This continuous action should be transparently reflected as amendments to Presidential Decree No. 18.295, which regulates fuel import prices.
Adopt a quarterly pump price adjustment mechanism through a ministerial decree signed by the Ministers of Finance and Energy with a corridor that allows pump price to fluctuate in response to international oil price changes.
Consolidate all quasi-taxes into a single quasi-tax within the fuel price equation.
Conduct an audit of fuel procurement costs, including margins and fees, to establish optimal levels that reflect efficient operations by suppliers. Adapt the price structure based on the findings of this audit.
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13
ChadTCDECF10-Dec-2121-Jun-24R1R2CR/23/007LowHigh0.20%..YesYesNo-2.45.37.7-10-5.320.626.42321.2....YesYesNoYesOver the medium term, the authorities aim to: (i) complete the implementation of IFMIS; (ii) improve budget preparation and execution, including by introducing medium-term program budgeting, with a pilot phase starting in 2023, and rationalizing transfers and subsidies spending; (iii) enhance budget execution and controls by decentralizing payment orders and financial control to line ministries; (vi) rationalize the institutional and technical framework of cash management by 2023; and (v) strengthen debt management.
The authorities aim to increase transparency and better assess the size of the in-kind transfers provided to the National Electricity Company (SNE) (MEFP, ¶47). Access to electricity is very low in Chad (less than 11 percent of population in 2020), with electricity tariffs significantly below the cost of supply. SNE receives in-kind transfers from the authorities via the national refinery (SRN), which are reflected in the budget since 2020. In the medium term, the system of transfers in the form of diesel for electricity generation will be replaced by monetary transfers that will be made in the context of a performance contract. The authorities are also in the process of implementing increased transparency on the value of the subsidies provided to the electricity sector, making a clear distinction between subsidies provided and effective payments for electricity consumption of the public sector, with the aim to phase out subsidies with appropriate transfers to households to mitigate the impact on vulnerable ones. This will be implemented with IMF and World Bank TA to improve data collection and reporting.
The authorities also need to step up their efforts to strengthen domestic revenue mobilization, contain the wage bill, and streamline non-priority expenditures, including fuel and electricity subsidies.
They should notably aim at increasing its operational and commercial performance, at reducing its reliance on environmentally unfriendly fuel-fired power plants, at increasing access to electricity, and at gradually adjusting tariffs.		.YesYes
The authorities are also in the process of implementing increased transparency on the value of the subsidies provided to the electricity sector, making a clear distinction between subsidies provided and effective payments for electricity consumption of the public sector, with the aim to phase out subsidies with appropriate transfers to households to mitigate the impact on vulnerable ones.
NoNoYesThe authorities are also in the process of implementing increased transparency on the value of the subsidies provided to the electricity sector, making a clear distinction between subsidies provided and effective payments for electricity consumption of the public sector, with the aim to phase out subsidies with appropriate transfers to households to mitigate the impact on vulnerable ones. This will be implemented with IMF and World Bank TA to improve data collection and reporting.
With World Bank and Fund technical assistance, the authorities will also need to step up their efforts to improve the financial viability of SNE, which places a considerable burden on the budget.
The Tax Department will relocate to the premises left by the Treasury, which will equipped by December 2022 to handle the computerization planned under the World Bank project for mobilization and management of domestic resources (PROMOGRI) and will benefit from the installation of the Integrated Financial Management System (IFMIS) in line with the modernization reforms conducted with IMF assistance.
The strategy, which updates the Strategy for the Development and Modernization of Public Finance Management (SDMFP) of April 2013, was prepared in mid-2019 with the support from the IMF and the World Bank and adjusted in December 2021, as a strong and urgent response to weaknesses existing in our public financial management.
To help create conditions for cost-effective electricity access extension in a financially sustainable manner, the World Bank is supporting these sector reforms under an ongoing technical assistance project to Chad.
The World Bank and IMF are also expected to provide assistance that would strengthen capacity at the Debt Directorate, including the analysis of debt sustainability (DSA) and through the quarterly publication of a public debt bulletin. The World Bank has also been helping in recording debt contracted by SOEs, which will improve debt coverage in the DSA. The Government has made significant progress in disclosing contracts and licenses involving the petroleum sector with support from the World Bank and has published, certified and verified annual financial reports for 2017-2018 for SHT (Société des Hydrocarbures du Tchad) and its subsidiaries.		YesAdditional oil revenue will also help rebuild buffers and reduce domestic arrears and external debt.
Growth was affected by the significant production disruptions suffered by one of the main oil producers, and delay in resumption of oil production in oil fields associated with an exit of another oil producer.
The current account deficit is estimated to have been lower in 2021 (4.5 percent of GDP) than expected at the time of the ECF request (6.5 percent of GDP) owing mainly to higher oil exports.
While oil revenue did not increase as much as could have been expected in the first half of 2022, preliminary third quarter data reflect a strong rebound in receipts, which is expected to be sustained for the rest of the year
The authorities published the quarterly note on the oil sector for December 2021, March 2022, and June 2022 in line with the template designed in consultation with Fund staff.
The medium-term outlook is expected to gradually improve, with both oil and non-oil GDP growth picking up and inflation returning to the BEAC target (MEFP, ¶21). After contracting by about 11 percent in 2020–21, oil production is expected to bounce back in 2022–23, as the one-off factors that affected production are not expected to recur, and as two new oil operators are expected to reopen some fields that had been temporarily closed.
The improvement in the NOPB compared to 2021 and higher oil revenue would still contribute to a substantial improvement in the overall fiscal balance, from -2.4 to +6.3 percent of non-oil GDP.
In view of substantial downside risks, higher oil revenue should be used to build buffers and accelerate the payment of debt (MEFP, ¶23). Given the current oil price volatility, it will be important to take advantage of the current high prices to build cash reserves in case some of the downside risks materialize. Debt is expected to decline faster than envisaged at the time of the ECF request, as higher oil prices would result in accelerated repayments to Glencore, while higher net oil revenue will allow for a quicker reduction of the stock of T-bills and payment of domestic arrears. If oil revenue remains high till then, the scope for further deposit accumulation at BEAC, additional accelerated repayment of domestic arrears, and additional high-priority spending over the medium term could be discussed at the time of the third review.
Chad’s repayment capacity has been enhanced by the increase in oil revenue stemming from elevated global oil prices and by the debt treatment provided by official and private creditors under the G20 CF.
The authorities should take advantage of the sharp increase in oil prices to address the most pressing challenges while rebuilding buffers. With the donors’ help, they must address the food security crisis, including by providing support to the most vulnerable and using part of the SDR allocation to rebuild ONASA’s cereal stock. Beyond meeting these urgent needs, and as oil prices are very volatile, fiscal policy should be prudent and remain anchored by the objective of significantly reducing the NOPB over the medium term. Higher oil revenue should also be used to build cash buffers and reduce more quickly the government’s reliance on expensive domestic bank financing. Additional buffers and lower rollover needs will provide the government with more latitude to respond to a possible drop in oil prices. Would oil prices remain elevated till then, the scope for greater repayment of domestic arrears and additional high-priority spending over the medium term could be considered at the time of the third review.		No..No.No.
Publication of a quarterly note on the oil sector, in line with the template designed in consultation with Fund staff, including detailed information on debt service to Glencore.
Publish an audit report on oil revenue collected by the Treasury, including through the Societé des Hydrocarbures du Tchad (SHT), conducted by an international auditing firm.
.......
14
ComorosCOMECF1-Jun-2331-May-27R2CR/24/212Lower-middleHigh...NoNoNo-4.5-1.53-1.8-0.117.316.621.818.1....YesNoNoNo.....NoNoYes
The government is committed to protecting social spending and priority investments and will aim to increase such expenditures as reforms help create more fiscal space. The 2024 budget law allocated KMF 5.22 billion for health and KMF 1.49 billion for education. These allocations accounted for about one third of transfers, and we commit to maintaining at least these levels in the 2024 budget. With support from the World Bank, we have been implementing the social safety net project (Projet de Filets Sociaux de Sécurité, PFSS) which has been providing unconditional cash transfer to the most vulnerable households. In July, this project was replaced with the Projet de Filets Sociaux de Sécurité Résilient et Réactif aux Chocs (PFSS-RRC), with an expanded mandate to support transfers related to cash for work, livelihood grants, and technical training. We will continue to partner with the World Bank on this important social project and will aim to ensure timely disbursements for the project. We will also continue to work with development partners to prioritize and implement investment projects envisaged under our national development strategy, Plan Comores Emergent, to ensure continued growth and shared prosperity for the Comorian population.
No.No..No.No.
Complete the de jure transfer of the management of fuel products taxes to the customs administration after already having completed the transfer de facto
........
15
Congo, Democratic Republic of
CODECF15-Jul-2114-Jul-24R6CR/24/226LowModerate...NoNoNo-1.4-2.7-1.3..13.815.714.615.5....YesNoNoYesProgress on the fuel subsidies reform is noticeable (MEFP ¶20). The authorities increased pump fuel prices by 7 percent in April 2024, on top of the increase in October 2023. Current pump prices have curtailed new liabilities to oil distributors. The roadmap adopted in November 2023 is being implemented with the monthly publication of the price structure, mining companies have been excluded from the fuel subsidy and the implementation of the molecular marking program in the south to track various fuel products has been implemented. These measures have helped contain the accumulation of liabilities towards oil companies, which declined from US$545 million in 2022 to US$122 million in 2023, with further reductions expected in 2024. The authorities should continue implementing their roadmap, to ensure a timely phasing out of direct fuel subsidies, to reduce tax expenditure (implicit subsidies), and develop targeted social safety nets for vulnerable population.12
Other notable achievements under the program include the progress made in reducing energy subsidies and the development of an arrears’ clearance strategy.
We are continuing the reforms to rationalize the oil subsidy with the aim to control its fiscal cost. Prices at the pump increased by more than 7 percent on April 25, 2024, bringing the increase since 2021 to between 74 and 130 percent depending on the region and the products.		YesYes
The authorities should continue implementing their roadmap, to ensure a timely phasing out of direct fuel subsidies, to reduce tax expenditure (implicit subsidies), and develop targeted social safety nets for vulnerable population.
NoNoYesThe decentralization of spending authorization, which would help to enforce the spending chain, is delayed but is still progressing following the roadmap agreed upon between the authorities and the World Bank under the Enhancing Collection of Revenue and Expenditures Management (ENCORE) project and the upcoming budget support operation (MEFP ¶23).13
Based on the World Bank’s Country Climate and Development Report (CCDR), addressing climate change needs to be prioritized across four key areas: (i) enhancing agricultural productivity through climate- smart practices; (ii) leveraging the country's natural wealth via sustainable forest and landscape management, expanding along the mineral value chain and fully harnessing its hydropower potential; (iii) upgrading infrastructure for climate resilience, particularly in transport and urban development; and (iv) strengthening governance for effective climate action. The country would be uniquely positioned to play a leading role in the global green transition as it (i) holds large reserves of green minerals (primarily copper and cobalt); (ii) provides immense carbon sequestration services thanks to its vast forest resources; and (iii) has vast hydropower potential.
The finalization of the new tax code, with the support of the World Bank, including the code of tax procedures, a section on non-tax revenue collected by sectoral ministries, a revised section on excise duties, and the implementation of a plan to rationalize parafiscal charges (collected by agencies other than the ministries).		No.Yes*n/aBased on the World Bank’s Country Climate and Development Report (CCDR), addressing climate change needs to be prioritized across four key areas: (i) enhancing agricultural productivity through climate- smart practices; (ii) leveraging the country's natural wealth via sustainable forest and landscape management, expanding along the mineral value chain and fully harnessing its hydropower potential; (iii) upgrading infrastructure for climate resilience, particularly in transport and urban development; and (iv) strengthening governance for effective climate action. The country would be uniquely positioned to play a leading role in the global green transition as it (i) holds large reserves of green minerals (primarily copper and cobalt); (ii) provides immense carbon sequestration services thanks to its vast forest resources; and (iii) has vast hydropower potential.
To achieve its growth and development objectives DRC must fully harness the potential of its mining industry by addressing governance and supply chain transparency bottlenecks and by expanding along the value chain. With one of the world’s highest reserves of mineral wealth – DRC is the 5th largest copper producer, and the top cobalt producer globally – DRC can become a pivotal player in the green transition. Achieving this will require expanding along the mining value chain, and particularly the mid-stream sector. However, for DRC to become the supplier of choice significant improvements in mining governance and transparency and in enforcement of regulation that safeguards socially and environmentally responsible mining practices are key prerequisites. Enforcement should cover not only industrial mining but artisanal and small-scale mining (ASM) as well, a sector plagued with human rights violations, child labor and gender-based violence.		YesBased on the World Bank’s Country Climate and Development Report (CCDR), addressing climate change needs to be prioritized across four key areas: (i) enhancing agricultural productivity through climate- smart practices; (ii) leveraging the country's natural wealth via sustainable forest and landscape management, expanding along the mineral value chain and fully harnessing its hydropower potential; (iii) upgrading infrastructure for climate resilience, particularly in transport and urban development; and (iv) strengthening governance for effective climate action. The country would be uniquely positioned to play a leading role in the global green transition as it (i) holds large reserves of green minerals (primarily copper and cobalt); (ii) provides immense carbon sequestration services thanks to its vast forest resources; and (iii) has vast hydropower potential.
To achieve its growth and development objectives DRC must fully harness the potential of its mining industry by addressing governance and supply chain transparency bottlenecks and by expanding along the value chain. With one of the world’s highest reserves of mineral wealth – DRC is the 5th largest copper producer, and the top cobalt producer globally – DRC can become a pivotal player in the green transition. Achieving this will require expanding along the mining value chain, and particularly the mid-stream sector. However, for DRC to become the supplier of choice significant improvements in mining governance and transparency and in enforcement of regulation that safeguards socially and environmentally responsible mining practices are key prerequisites. Enforcement should cover not only industrial mining but artisanal and small-scale mining (ASM) as well, a sector plagued with human rights violations, child labor and gender-based violence.		No..........
16
Congo, Republic of
COGECF21-Jan-2220-Jan-25R4CR/24/002Lower-middleIn distress...YesYesNo12.64.8-7.816.48.344.93332.328.1
Social transfers (Lisungi, COVID-19 and others)
2.330.7YesNoNoYesThe authorities concurred that the revised 2023 budget remains appropriate, while, contingent on an adequate build-up of buffers, any additional fiscal space should be directed to the execution of social spending. Revenue and spending measures need to be fully implemented to underpin achievement of the non-oil primary deficit of 11.7 percent of non-oil GDP in 2023, thereby ensuring that the program still can achieve its medium-term objective to bring public debt back to less vulnerable levels. The consolidation of 4 percentage points of non-oil GDP relative to 2022 would be driven by 1.2 percent of non-oil GDP improvement in non-oil revenue (largely reflected in the revised 2023 budget), combined with the 2023 reduction in fuel subsidies (2.7 percent of non-oil GDP) (Text Table 2). The phasing-out of fuel subsidies continued: to fully achieve the fuel price increase of 30 percent targeted for 2023, diesel prices were increased in November 2023 by 25 percent, following the year’s earlier fuel price increases of 30 percent for gasoline and 5 percent for diesel.
The fuel price adjustments implemented in 2023 have aligned domestic gasoline and diesel fuel prices with international practices both for retail and industrial clients. For the future, the authorities commit to an IMF TA-supported review of the fuel pricing formula and the implementation of an automatic pricing mechanism with smoothing. Once potential cost savings are identified and the necessary institutional setting for the rollout of the automatic pricing mechanism is in place, any remaining fuel price increase to achieve full cost recovery could be implemented within the automatic pricing mechanism.7		2.70%YesYesAccelerated implementation of mitigation measures alleviating related inflationary repercussions on vulnerable households, flanked by public engagement efforts, will help soften CSOs’ and unions’ opposition to the reform that has lately intensified on the back of continued rising living costs (MEFP ¶8).6
In the meantime, the authorities agree to take the opportunity to address the bottlenecks to scaling up well-targeted social assistance, e.g., by leveraging the Single Social Register (MEFP ¶9).
The authorities agree to reprioritize resources freed up by the elimination of fuel price subsidies (2.7 percent of non-oil GDP for 2023) to social spending targeted at vulnerable groups (0.4 percent of non-oil GDP, including measures targeting public transportation) and capital spending (1.5 percent of non-oil GDP), providing a positive impulse to inclusive growth while still achieving fiscal consolidation.		NoNoYesThe revision and simplification of hydrocarbon-related VAT tax laws is progressing with the World Bank and IMF jointly supporting the authorities though technical assistance (SB, Table 13a).
With assistance from the World Bank, we will implement a customs reform resulting in a one-stop window at Pointe Noire by end-December 2023.
We will only procure for projects that are in the budget. To this end, we developed a comprehensive template for consolidated and sectoral public procurement plans, where we worked closely with IMF and World Bank experts to ensure proper coordination across departments (including IT) in both the development and implementation of the template.
With support from the World Bank, Decree No. 2022-1854 of 10-02- 2022 was published, modifying and supplementing Decree No. 2009–161 of 05-20-2009 on the organization and operation of the public procurement management unit.
With the support of the World Bank, we have developed regulations on monitoring, control, and verification methods for upstream activities in the hydrocarbon sector, aimed at enhancing the effectiveness of oversight for oil and gas operations.
We will also strengthen our institutional framework and our statistical apparatus, to take into account the emergence of new subsectors in the energy area. Congo has a strong gas potential that is attracting large investments, whose production is expected to start in 2024. We are developing the regulatory framework (gas code) governing gas operations, with the assistance of the World Bank. The gas code is expected to be published prior to end-December 2024. Our goal is to make this framework as balanced as possible, preserving the country’s limited resources while allowing new projects in the sector to get return on investment. We will regularly consult the World Bank and IMF staff if necessary. National statistics teams are working on integrating this new sector into our national accounts. We will consult World Bank and IMF Staff and may request technical assistance to improve the local statistical capacity to monitor gas sector data.
To improve budget execution, in line with CEMAC regulations, we have operationalized a committee that is monitoring, updating, and coordinating application of the cash flow plan with the consolidated commitment plan and, as of this year, with the procurement plan, consistent with the overall template prepared with the assistance of the World Bank, for the seven pilot ministries.		No.No..No.No.
A comprehensive stock-taking of hydrocarbon-related VAT administration (including exemptions)
Enactment of hydrocarbon-related VAT tax laws, eliminating VAT exemptions in the process
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17
Costa RicaCRIEFF, RSF1-Mar-2118-Jun-24R6, R3CR/24/166Upper-middle....NoNoNo-5.1-32.1-0.31.915.715.120.818.1....NoNoNoNo.....NoNoYesSupervisory tools are being strengthened in line with recommendations of the 2022 World Bank Financial Sector Assessment. Regulations to tighten licensing standards for new banks have been approved, risk weights for unhedged borrowers of FX have been increased, and supervisors have started publishing bottom-up stress test results of individual entities. Drawing on the Basel Core Principles assessment, the authorities have submitted a bill to improve legal protection of supervisory staff and strengthen the legal powers of supervisors, including their corrective and sanctioning powers.
World Bank TA (RM6. MIDEPLAN to develop and publish guidelines to expand the project appraisal process to assess the impact of the project on climate change through the social cost of carbon (September 2023))
World Bank TA (RM9. MIDEPLAN to publish guidelines on project selection criteria including a range of climate change criteria for SNIP entities (December 2023))
World Bank TA (RM10. MIVAH, in collaboration with MINAE, to develop and publish guidelines for including climate change analysis in Regulatory Plans (March 2024).)
(vi) revising our current incentives under the free trade zones to protect our domestic base in line with the new international taxation architecture (Pillar 2) with World Bank (WB) support;		No.YesPrivateRM2. Government to approve implementing regulation to simplify the administrative procedures for private participation in power generation from renewable sources for self-consumption (February 2023)
Fund supported reforms have spanned many areas. These comprise sectoral reforms, PFM, fiscal policy, and financial reforms.1 Since new regulations to facilitate private participation in generation of electricity from renewable sources (RM2), more than 50 operators have joined. Reported benefits include cost efficiencies and increased resilience to El Niño and to oil price volatility.
The implementing regulation for Law No. 10086 to simplify the administrative procedures for private participation in power generation from renewable sources for self-consumption, approved in October 2021, was officially established in February 2023 (¶42).
Renewable energy. Our efforts to increase competition in the energy sector and reduce electricity prices from renewable sources will support decarbonization. We published the implementing regulation of Law No. 10086, as approved by the Legislative Assembly in October 2021, to simplify the administrative procedures for private participation in power generation from renewable sources for self-consumption in February 2023 (RSF reform measure). This regulation is in line with best practice as it boosts competitiveness and investment for market participants by: i) defining responsibilities for owners to promote the safe and reliable interconnection of the electricity grid; ii) securing the economic sustainability of generation projects by authorizing the sale of energy surpluses and encouraging the use of price signals or different tariffs depending on the time; and iii) declaring certain activities, such as energy storage and electric vehicle charging, as "services of general interest", which allows public services to be provided by private players. Since the regulation was issued, more than 50 new operators have participated in electricity production, in addition to the existing operators who have switched to the new framework. Operators report that the regulation has facilitated cost efficiency and reduced vulnerability to climate change and external shocks (i.e., El Niño and oil prices). To complement this action, we completed efforts (i) by the Costa Rican Institute of Electricity to enact tariff reductions by reducing operational costs, restructuring debt, and implementing IFRS; (ii) by the Autoridad Reguladora de Servicios Públicos (ARESEP) to reduce electricity prices charged by other generators beyond ICE with IDB support, applying new tariff methodologies; and (iii) to introduce measures to remove barriers to foreign participation in the energy sector through legislation currently under consideration by the legislative assembly (¶19).		No.No.
RM2. Government to approve implementing regulation to simplify the administrative procedures for private participation in power generation from renewable sources for self-consumption.
.......
18
Cote d'Ivoire
CIV
EFF, ECF, RSF
24-May-2323-Sep-26R2, R2, R1CR/24/223Lower-middleModerate...NoNoNo-5.2-32.2-0.11.316.217.921.520.9
Social security benefits
0.90.8-0.1YesYesNoYesReliable electricity delivery across the country plays a foundational role in economic transformation. Côte d’Ivoire’s energy sector is a regional leader and full electrification of the country is within reach. The government is committed to ensuring commercial viability of the sector (MEFP ¶ 17). To this end, electricity tariffs were adjusted upwards in July and December 2023, with the aim of gradually restoring the financial viability of the electricity company (CIE) and preserving its capacity to continue necessary investments for increasing and maintaining high quality of electricity production. However, recurring shortfalls have hampered CIE’s ability to cover costs, pay its suppliers, including independent power producers, while also having sufficient levels of profitability to cover necessary investment. This could in part reflect the implications of a weak electricity regulator and static electricity tariffs. It is also worth noting that non-payment by neighboring countries for electricity exports continues to accumulate. The authorities are committed to continue monitoring potential budgetary risks arising from the electricity sector and are devising plans to reduce CIE’s payment arrears outstanding to domestic suppliers.
The authorities should carefully monitor potential budgetary risks arising from the electricity sector and accelerate plans to reduce payment arrears to domestic suppliers, including through potential further tariff adjustments.
In December 2023, the government made a second rate adjustment of 10 percent to electricity prices, which came into force in January 2024, following the adjustment made in July 2023. This adjustment affects all customers, including those who were subject to the 10 percent increase in July 2023. This will allow for an increase in the general average rate from CFAF 73/kWh to CFAF 87/kWh, and will help achieve the objective of gradually restoring the sector’s financial equilibrium and preserving the production capacity and quality of the electricity supply.
If higher international oil prices were to erode petrol tax revenues, pump price adjustments would be required (MEFP ¶ 25), to ensure maintaining petrol tax revenues at around 1 percent of GDP.		.YesNo.NoNoYesDevelopment Partner Role/IMF CD: IMF/ World Bank TA available. (RM6. Develop the architecture for climate-related financial information, and adopt a decree on the introduction of two complementary frameworks and the timetable for their implementation, namely (i) a transition taxonomy (reference framework for public and private sector climate investments) covering the country's mitigation and adaptation needs across key sectors, and (ii) introducing an inter-ministerial coordination mechanism on the design of the taxonomy.)
Development Partner Role/IMF CD: IMF/ World Bank TA available. (RM7. Based on the taxonomy introduced as part of RM6, adopt a decree that includes: (i) the introduction of a climate risk disclosure framework for state-owned enterprises and private non- financial private companies, connected to the taxonomy; and (ii) a disclosure requirement that is integrated within the financial reporting of state-owned enterprises and non-financial companies, based on the climate risk disclosure framework, as well as their implementation timeline.)
Development Partner Role/IMF CD: AFD, WMO (World Meteorological Organization) in the framework of Climate Risk Early Warning Systems initiative from the UN, World Bank. (RM9. Strengthen the environment and climate change component and deploy the multi-hazard early warning system in the Adzopé department. This early warning system will enable rapid responses to and mitigation of the impact of disasters, both in the short and long term. Prior to nationwide implementation, the early warning system will be tested in a pilot phase in the Adzopé department. A report summarizing the first alerts will be produced in December 2024.)
Development Partner Role/IMF CD: KFW, World Bank and EU. (RM11. Implement plans to operationalize the mandatory energy audit system for entities with annual energy consumption equal to or greater than a benchmark1 for the industrial, tertiary and transportation sectors in 2025, and complete the first 5 audits by the end of September 2025 and an energy labeling system for new air conditioners, refrigerators and electric lamps by December 2024.)
In addition, while responding to social and infrastructure needs, the government will continue its efforts to control spending. The 2024 budget will aim to keep total spending at no more than 20.6 percent of GDP. Improvements currently being made to the social registry and the expansion of the productive cash transfer program (PTMP) will also make it possible to better target social protection to help the most vulnerable. With assistance from the World Bank, the government plans to expand coverage of the PTMP by enrolling 100,000 additional households per year in the Single Social Registry (RSU) over the next three years. More broadly, social spending targeted to help the poor will be tracked as part of the program, notably in the health, education, social protection, and youth employment sectors, which account for around 28.8 percent of pro-poor spending (see Table 1 of the TMU). Total spending on the poor will continue to be tracked to maintain its effectiveness and increase spending transparency. Total capital expenditures will represent 7.4 percent of GDP on average during the program period, which is 2.8 percentage points higher than the pre-COVID-19 level in 2019.		No.YesPrivate
RM16. Finalize the tendering process for the development, construction and operation of solar power plants to help achieve the NDC targets. In this context, the competitive procurement process for the independent power producers selected as a result of the above-mentioned tenders must be completed by the end of 2025 for a solar power capacity to be installed equivalent to at least 100 MW.
No.YesStrengthen green taxation by creating a carbon tax on CO2 and greenhouse gas emissions, instituting a tax on pesticides, fertilizers, and hazardous materials, as well as an environmental tax on cigarettes.
RM 12. Continue to apply the existing fuel pricing mechanism with automatic adjustment to smooth price volatility and preserve tax revenues. In addition, given that the mechanism already includes a carbon taxation component (Conformité aux Normes de Qualité (CNQ)), the Government undertakes to develop a carbon taxation strategy tailored to Côte d’Ivoire’s needs and in line with IMF technical assistance, and to make any necessary adjustments to fuel prices in line with this strategy by the end of December 2025 at the latest.
Implement plans to operationalize the mandatory energy audit system for entities with annual energy consumption equal to or greater than a benchmark1 for the industrial, tertiary and transportation sectors in 2025, and complete the first 5 audits by the end of September 2025 and an energy labeling system for new air conditioners, refrigerators and electric lamps by December 2024.
Continue to apply the existing fuel pricing mechanism with automatic adjustment to smooth price volatility and preserve tax revenues. In addition, given that the mechanism already includes a carbon taxation component (Conformité aux Normes de Qualité (CNQ)), the Government undertakes to develop a carbon taxation strategy tailored to Côte d’Ivoire’s needs and in line with IMF technical assistance, and to make any necessary adjustments to fuel prices in line with this strategy by the end of December 2025 at the latest
Finalize the tendering process for the development, construction and operation of solar power plants to help achieve the NDC targets. In this context, the competitive procurement process for the independent power producers selected as a result of the above-mentioned tenders must be completed by the end of 2025 for a solar power capacity to be installed equivalent to at least 100 MW.
......
19
EcuadorECUEFF31-May-2430-May-28R0CR/24/146Upper-middle.0.60%..YesYesNo...-0.9238.536.940.536.3
Social benefits [Social security benefits; Social assistance benefits; Employer social benefits]
8.68.5-0.1YesNoNoYesThe authorities’ fiscal plan under the proposed EFF arrangement would target a frontloaded improvement in the NFPS non-oil primary balance including fuel subsidies (NOPBS) of 2.2 percent of GDP in 2024 and an additional 3.3 percent of GDP over 2025-28, totaling 5.5 percent of GDP over the program period. Building on the authorities’ fiscal measures already in train, the consolidation under the program would rely on non-oil revenue mobilization, higher net oil revenue, and non-oil expenditure rationalization that would bring increasing savings over time. The adjustment would be frontloaded and, together with the significant upfront structural reform efforts, would be broadly aligned with the phasing of financial support. The plan will be accompanied by enhancements in the social safety net by further expanding the coverage of social transfers for vulnerable households.
Other revenue mobilization. Fuel subsidies are costly, regressive (disproportionally benefiting the better off), harmful to the environment, and contribute to criminal activities such as smuggling. The authorities eliminated the fuel subsidy for large shrimp farms in 2023, generating about US$150 million in savings. The authorities plan to further improve the targeting of fuel subsidies and promote the energy transition by encouraging the use of non-renewable energy sources, while implementing appropriate social compensatory mechanisms to protect the most vulnerable. In addition, the government plans to increase oil revenues by gradually increasing production and enhancing the capacity of the oil refinery system.		1.70%YesYesThe authorities plan to further improve the targeting of fuel subsidies and promote the energy transition by encouraging the use of non-renewable energy sources, while implementing appropriate social compensatory mechanisms to protect the most vulnerable.
The coverage of the social assistance programs should continue to be expanded to protect the vulnerable and ensure burden sharing of fiscal adjustment. The social safety net should build on the progress made in recent years with the social registry to map vulnerable households. Going forward, the objective should be to expand the social safety net with the overarching objective of gradually covering the most vulnerable families, prioritizing those in the lowest deciles of the income distribution.
Our goal is to ensure that the burden of fiscal consolidation is not borne by the poor and vulnerable. We have made big strides in protecting the social and economic conditions of the most vulnerable in recent years by upgrading our social registry and expanding the coverage of the social protection system with the assistance of the World Bank (WB). We will prepare a plan to complete the social registry to cover all families in the lowest three deciles of the income distribution throughout the country (end-October 2024 structural benchmark).		NoNoYesThe program will continue supporting the authorities’ efforts to enhance the social safety net. Over the past years, the authorities worked on improving the social safety net, supported by World Bank technical assistance, expanding the coverage of their social registry to cover families in the lowest three deciles of the income distribution throughout the country, including in more remote areas.
Our goal is to ensure that the burden of fiscal consolidation is not borne by the poor and vulnerable. We have made big strides in protecting the social and economic conditions of the most vulnerable in recent years by upgrading our social registry and expanding the coverage of the social protection system with the assistance of the World Bank (WB).
Also, with the support of the WB, we have undertaken several actions to make the current social protection system more efficient and comprehensive, not only through monetary transfers but also through the provision of complementary services by the State.		YesBuilding on the authorities’ fiscal measures already in train, the consolidation under the program would rely on non-oil revenue mobilization, higher net oil revenue, and non-oil expenditure rationalization that would bring increasing savings over time.
Other revenue mobilization. … In addition, the government plans to increase oil revenues by gradually increasing production and enhancing the capacity of the oil refinery system.
Enhancing governance in the oil sector will help improve efficiency. The authorities are committed to enhancing governance in the oil sector, as part of their ongoing plans to streamline SOEs and increase their efficiency. In an important transparency milestone, the authorities signed in January a contract with an international audit firm to conduct audits of the financial statements of Petroecuador and Petroamazonas, now merged into a single SOE, the largest in Ecuador. The authorities plan to complete the 2019 and 2020 audits and share the results with IMF staff (end- March 2025 structural benchmark). They are also launching initiatives to increase oil output, including by promoting greater private sector participation and enhancing the capacity of the oil refinery system. Broader steps to increase competition in the distribution of local fuel markets could also be considered in the future.		YesPrivate
Ensuring essential investment to maintain the country’s electricity generation plants should be a priority, while also unlocking private-led investment projects in renewable energy sources such as solar and wind, for which Ecuador has good potential.
No.No.
Complete the audits of the 2019 and 2020 financial statements of Petroecuador and Petroamazonas and share the results with Fund staff.
........
20
EgyptEGYEFF16-Dec-2215-Oct-26R1R2CR/24/098Lower-middle.0.70%1.40%.YesYesNo-6-4.11.91.65.515.418.621.422.7
Subsidies, grants and social benefits
4.54.2-0.3YesNoNoYes
The authorities will continue adjusting energy prices to reign in unaffordable energy subsidies and create fiscal space for enhancing targeted social transfers. Fuel subsidies have increased due to exchange rate depreciation and a failure to fully implement the quarterly automatic fuel price mechanism (recurring structural benchmark). To lower untargeted fuel subsidies, the authorities committed to increase the price of gasoline grade fuels to the level implied by the formula, including catch-up from the failure to fully implement the January 2023, April 2023, July 2023, and October 2023 adjustments (prior action). The authorities will also develop a plan to adjust diesel prices to be fully in line with the level implied by the full implementation of the formula since the start of the program.
.YesYes
The authorities have also planned to increase the price of gasoline grade fuels to align them with the level implied by the automatic fuel price mechanism, including to catch-up for missed adjustments since program approval (prior action), with the objective of containing this untargeted subsidy. To help protect vulnerable groups, the authorities announced an additional social protection package of EGP 180 billion for FY2024/25.
NoNoNo.No.No..No.No.
Increase the retail gasoline prices, including any catch-up adjustments in March 2024 to ensure the gasoline prices are fully in line with the automatic fuel price mechanism formula since the start of the program.
Implementation of the retail fuel price indexation mechanism according to the formula (see TMU). In cases where the indexation mechanism suggests a reduction in fuel prices, fuel prices will not be reduced until the level of fuel subsidies for products covered by the mechanism (that is, all products except LPG and fuel oil for bakeries) in the previous fiscal year has been eliminated.
Develop a repayment strategy to clear accumulated payment arrears by Egyptian General Petroleum Corporation (EGPC) on supply contracts denominated in US dollars, with the objective that no new arrears are accumulated, and existing arrears will be cleared.
......
21
GabonGABEFF28-Jul-2127-Jul-24R1R2CR/22/216Upper-middle.0.20%..YesYesNo-1.82.54.30.94.814.717.616.615.1....YesNoNoYes
Staff underscores the need to gradually phase out fuel subsidies while developing targeted measures to protect the most vulnerable. Staff’s advice is a return to the automatic fuel price adjustment, with full- passthrough on all products except on Butane and Kerosene, mostly consumed by the poor. This will help limit subsidies and reduce leakages to businesses and high-income households (Text Figure 6). The authorities agreed with staff but indicated that their option of protecting all households is based on the absence of well-targeted social safety nets and the need to avoid social tensions, particularly given difficulties already faced by households during the pandemic. Staff underscored that these subsidies should end by end-December 2022 for all products, except kerosene and Butane. Staff also urged the authorities to work closely with the World Bank to finalize the database of the most vulnerable by end-December 2022, and subsequently develop well-targeted measures.
.YesYes
Staff underscores the need to gradually phase out fuel subsidies while developing targeted measures to protect the most vulnerable. … Staff also urged the authorities to work closely with the World Bank to finalize the database of the most vulnerable by end-December 2022, and subsequently develop well-targeted measures.
NoNoYesStaff also urged the authorities to work closely with the World Bank to finalize the database of the most vulnerable by end-December 2022, and subsequently develop well-targeted measures.
Adequate social spending and a stronger social safety net remain key priorities. The pandemic crisis and the fallout of the war in Ukraine on domestic fuel and food prices have reinforced the need for stronger social protection. The authorities have updated the database of the most vulnerable populations —Gabonais Economiquement Faibles (GEF). The next steps, to be implemented with the help of the World Bank, include a census of GEF based on new criteria by end- December 2022 (SB, MEFP, ¶30).		YesAnnex III. Risk Assessment Matrix. Source of Risks; Relative Llikelihood; Impact if realized; Recommended Policy Response. Disruption in domestic oil production caused by aging fields and lower than expected production from new projects. Medium. Medium: Fiscal revenues and exports are susceptible to oil production declines, with potential spillovers to the non-O&G sector. Enhance facility maintenance and plan adequate investment for refurbishment and encourage exploration and discovery of new oil.
Further, stronger returns from recent FDI, including through higher than anticipated oil production, represent an important medium-term upside risk which could also improve the external position.		No..No.No.
Publication on the government’s website of a quarterly note on the oil sector, including reconciliation of oil output and revenues.
Submission of a membership application to the Extractive Industries Transparency Initiative (EITI).
Adoption by the government of restructuring-plans to address issues identified by the audit of the four major companies (GOC, SOGARA, CDC, FGIS).
Hiring of the independent audit cabinet for the oil sector.
Audit by a specialized international firm of cost-oil, agreements between oil companies, the government and public companies. The audit will cover the five major companies.
Carry out a financial audit of the national refinery (SOGARA) to assess its viability.
...
22
Gambia, The
GMBECF12-Jan-2411-Jan-27R1CR/24/218LowHigh...NoNoNo...0.21.520.118.622.819.1....YesYesNoYesThe authorities have increased domestic fuel prices for Diesel by 85 percent since mid-2020. Although domestic prices are currently below full passthrough prices, the authorities aim to continue reducing fuel revenue losses and commit to not reduce domestic fuel prices when global oil prices decrease with a view to recovering past subsidies in the future.9 (9: For diesel, the gap between full passthrough prices and domestic pump prices narrowed by 72 percent in April 2024 compared to the largest gap in September 2023. For patrol, despite the current domestic price being below the full passthrough price, the average difference in the last year shows an average revenue recovery (i.e., clawback) of GMD1 per liter. In multiple episodes in the past, the authorities did not decrease domestic pump prices in line with the decline in global oil prices, especially for patrol (Text Figure 6).)
Our 2024 fiscal framework remains in line with the approved 2024 budget. Revenue collection during Q1-2024 exceeded the target by GMD400 million (or 0.2 percent of GDP). We are reprioritizing spending to accommodate any unanticipated spending arising from the hosting of the OIC summit. Following the decline of fuel subsidies in Q1-2024 relative to the same period in 2023, we aim to continue reducing the subsidies going forward.
The signed and forthcoming contracts with key SOEs are expected to improve their operational and financial performances, and hence allow rationalizing subsidies, including to NFSPMC (GGC), NAWEC and subvented agencies.
Meanwhile, they are rationalizing subsidies to the National Food Security, Processing, and Marketing Corporation (NFSPMC) and National Water and Electricity Corporation (NAWEC).		.YesNo.NoNoYesAccelerate implementation of national energy roadmap with World Bank support, including use of alternative energy production methods.
We are planning additional measures. The process to procure an Integrated Tax Administration System (ITAS) through World Bank funding is on-going.
Additionally, we are working with the World Bank to start CCDR preparation in summer of 2024.		No.No..No.No.........
23
GeorgiaGEOSBA15-Jun-2214-Jun-25R1CR/22/389Upper-middle....NoNoNo.....26.525.829.328....NoNoNoNo.....NoNoYesRenewable Energy Generation. To meet growing domestic energy demand, we have developed a complementary support scheme for renewable power generation that limits fiscal risks (prior action) in consultation with IMF staff and also benefitting from World Bank staff input.
With the assistance of the World Bank, we developed and adopted corporate governance standards for public companies.
Protecting the most vulnerable continues to be a key priority. We aim to strengthen the targeting of the TSA by improving the means testing methodology. We are currently running a pilot program trialing an improved methodology for calculating need, supported by the World Bank.		No.YesPrivateThe authorities have developed a renewable energy support scheme that guards against fiscal risks, fulfilling a prior action (MEFP ¶6). All projects under the scheme will be awarded through competitive auctions and potential fiscal risks will be mitigated by ensuring that the costs of the scheme are passed on to final consumers. In the first phase (2022-2023), total capacity of 300 MW will be auctioned, and the capacities for subsequent years will be determined based on updated demand and supply projections including to reflect progress on other energy projects. For example, if outstanding power purchase agreements (PPAs) are shown to be advancing during a 3-month assessment period, they will move forward with existing terms and will be netted out of the amounts to be supported under the new scheme. If such projects are not advancing, the authorities will seek to terminate them to limit fiscal risks.
Renewable Energy Generation. To meet growing domestic energy demand, we have developed a complementary support scheme for renewable power generation that limits fiscal risks (prior action) in consultation with IMF staff and also benefitting from World Bank staff input. The scheme currently envisages support for a maximum total power generation capacity of 1,500 MW to be awarded through auctions over the next three years. The total capacity will be adjusted as needed based on updated demand and supply projections including to reflect progress on other energy projects. In the first phase (2022-2023), we will auction 300 MW. The capacities for the following years (2023-2024 and 2024-2025) will be subsequently determined in agreement with IMF staff. We will award all projects under the scheme through competitive auctions. We will mitigate potential fiscal risks by ensuring that the costs of the scheme will be passed on to final consumers. For previously approved renewable energy projects supported by power purchase agreements (PPAs) that are not advancing materially, we will allow a three- month assessment period to determine whether projects can move forward with the existing terms. Projects that are not deemed viable under the existing terms will be terminated and can be considered under the new scheme’s auction mechanism.		No.No.
Determine the ultimate ownership of Georgian State Electrosystem
Issue a timebound plan for the implementation of the SOE reform strategy, including to pilot it in three major SOEs starting in the first quarter of 2023, to be selected in consultation with the IMF staff [8: The three pilot SOEs are Georgian Railway, Georgian Gas Transportation Company, and United Airports of Georgia.]
Develop a complementary support scheme for renewable power generation that limits fiscal risks in consultation with the IMF staff
Finalize and adopt public corporation reform strategy in consultation with the IMF staff and in line with OECD principles [EU directives, and the Energy Community acquis], including by ensuring a clear separation between state shareholding and policymaking functions [As part of the SOE reform, ownership of Georgian Railways and the GOGC will be transferred from the Partnership Fund to the government. (GOGC = Georgian Oil and Gas Corporation)]
.....
24
GhanaGHAECF17-May-2316-May-26R2CR/24/213Lower-middleIn distress...YesYesNo-3.6-3.10.5-0.31.5161819.621.1
Social benefits [Comprises of government cash transfer program (LEAP) and subsidy for lifeline consumers of electricity]
0.10.50.4YesYesNoNoFollowing a small reduction in the electricity tariffs in 2024H1,5 the Public Utilities Regulatory Commission (PURC) increased electricity tariffs by about 5 percent in June to reflect exchange rate and inflation developments. However, PURC’s quarterly tariff pricing decisions continue to be subject to discretion, undermining the transparency of the tariff pricing mechanism and preventing tariffs from timely reflecting developments in the cost of energy. To address these pitfalls, the authorities have requested IMF and WB assistance in improving the transparency and methodology of the tariff formula by end-2024, while exploring options to reform energy subsidies. (5: There was no change in the electricity tariff for residential consumers under lifeline (0-30 kWh) and in the 31-300 kWh band. The reduction of tariff for residential consumers of 301 kWh and above was about 6.6 percent and non- residential consumers of 301 kWh and above was 5 percent. Low voltage industrial tariff was reduced by 4.9 percent, and high voltage by 4.7 percent. At the same time, tariff bands were reduced to facilitate meter programming. 6 The CWM was implemented in April 2020 as part of the ESRP to ensure fairness and transparency in distributing energy revenues among relevant electricity value chain stakeholders.)
Entrenching fiscal discipline will hinge on timely and sustained progress in implementing the structural fiscal reform agenda under the program. To this end, the authorities should redouble their efforts to implement comprehensive reforms aimed at enhancing revenue mobilization, consistent with the priorities identified under Ghana’s MTRS, and improving public financial management—including by strengthening expenditure controls and public investment management, streamlining statutory funds, preventing arrears accumulation, enhancing fiscal rules and institutions, and strengthening governance and transparency in public procurement. In the energy sector, recent progress in addressing legacy debt is encouraging, but urgent action is needed to reduce the energy shortfall, improve the transparency of the tariff-setting mechanism, ensure that tariff decisions are rules-based and reflect timely developments in the cost of energy, and strengthen the governance and accountability in the sector.		.YesYes
Developing and operationalizing a framework in consultation with the Fund staff to guide the granting of energy sector subsidies by December 2024. The framework will also cover a mechanism to insulate vulnerable population fully or partially from large tariff increases.
NoNoYesWe have operationalized the Ghana Financial Stability Fund (GFSF) to provide additional support to the financial sector. The GFSF has used government bonds to start recapitalizing some domestic banks. We will frontload any necessary recapitalizations of state-owned banks, which will be underpinned by credible plans to ensure future viability. Meanwhile, the World Bank is finalizing its financial support, which will target undercapitalized banks and provide funding conditional on prior injections by shareholders.
We will review our public spending portfolio to identify efficiency gains and make it fully reflective of our development and social challenges and priorities. A part of this effort will be supported by a comprehensive public expenditure review undertaken with the World Bank and expected to be finalized by end-June 2025.
Reviewing PURC methodology for quarterly adjustment of electricity tariffs with support from the IMF and the World Bank to reduce discretion and ensure that observed macroeconomic developments are fully and timely reflected in the tariff adjustment. To ensure gradual settlement of inter SOE energy sector debt, we will conduct a sector-wide audit of the finances of the SOEs that will identify options to reduce costs and settle outstanding debt, while avoiding implications for the government budget by end-December 2024.
By end-2024, with the support of the World Bank, we will approve and implement the Regulations of the Private Public Partnership Act and of the Corporate Insolvency and Restructuring Act.
By end-2025, with the support of the World Bank, we will enact a new Investment Law that seeks to make the legal framework for investors more binding, robust and predictable.
With the support of the World Bank, the European Investment Bank and the KfW, we have operationalized the Development Bank Ghana to provide wholesale long-term funding to financial institutions to on-lend to creditworthy enterprises in agribusiness, manufacturing, and high value services.
Some key measures have been supported by the World Bank’s Sustainable Development Finance Policy (SDFP): in FY24 it supported fiscal sustainability via revenue measures and energy sector reforms, and included a non- concessional borrowing ceiling, consistent with IMF debt limits.
Reforms to further expand the social protection programs and improve their operational efficiency are advancing with the support of the WB (MEFP¶13). Over the medium term, the authorities aim to: i) achieve significant operational efficiencies across all the programs by improving procurement processes, reducing administrative costs, leveraging digitalization, and enhancing audits; ii) increase the LEAP benefits to 20 percent of pre-transfer household consumption, while gradually expanding its coverage to reach both the extreme poor and the poor households; and iii) increase the GSFP meal benefit to cover 30 percent of children’s daily calory need. In this context, the authorities are updating the current LEAP registry to strengthen targeting and subsequently expand the beneficiaries from 350,000 to 450,000 households by end-2024.
Structural fiscal reforms are advancing despite some delays. Ghana’s ambitious fiscal structural agenda aims to durably restore fiscal sustainability and build resilience by: i) permanently increasing revenue collection through base-broadening and compliance-enhancing measures; ii) rationalizing public spending by strengthening public financial management (PFM) systems—particularly in the areas of budget controls, spending efficiency and transparency, public investment management, and prevention of arrears accumulation; iii) modernizing the fiscal framework and institutions; iv) addressing deep-rooted vulnerabilities in the energy and cocoa sectors; and v) bolstering State-Owned Enterprises (SOEs) governance. Efforts in these areas are being closely coordinated with the WB.
The first quarterly audit of ECG’s single account for the period July 2022-September 2023 was published (end-February 2024 SB). However, the auditor issued a qualified opinion and found significant discrepancies in ECG’s financial allocations and operational practices, in contrast with the provisions under the Cash Waterfall Mechanism (CWM).6 Cognizant of these challenges, the authorities are working with the WB to ensure that the next quarterly audit of ECG’s accounts include an unqualified opinion.
The authorities are implementing their strategy to boost inclusive and private sector- led growth with WB support (MEFP¶62). The key pillars of this strategy are improving private sector access to long-term financing, promoting Special Economic Zones, and deepening reforms to improve the business environment. The WB is currently providing support to operationalize the new Development Bank of Ghana, reduce minimum foreign capital requirements to attract foreign direct investment, and finalize the new policy for Special Economic Zones		YesThe new fiscal regime framework for extractive industries is still being finalized. The draft Extractive Industry Fiscal Regime bill, which has benefitted from technical assistance (TA) from the Fund, is expected to promote a stable environment for investors and ensure a fair share of the revenues for Ghana. Following several delays, it is now expected to be submitted to Parliament by end-December 2024.
Under the Fund-supported program’s baseline, there would be a continued gradual improvement in macroeconomic conditions. Non-extractive growth is projected to strengthen to 5.0 percent by 2029 onwards (Text Table 3) as the drag from fiscal consolidation slows, the economy stabilizes, structural reforms start bearing fruit, and consumer and business confidence recover. Growth in extractive activities is expected to stabilize around 5.0 percent on average within five years, buoyed by high commodity prices, recovery in the small-scale gold mining and the exploitation of new gold and oil fields.		No..No.No.
Publish on PURC's website the final report of the first quarterly audit of ECG's single account. This report will highlight audit findings for the collection of revenues from ECG customers and disbursements to IPPs, SOEs and fuelsuppliers under the cash waterfall mechanism.
........
25
Guinea-Bissau
GNBECF30-Jan-2329-Jan-26R4R5CR/24/132LowHigh...NoNoNo-9.8-36.8-3.40.813.915.922.119....YesNoNoYes
However, the deficit will be reduced by 1.5 percent of GDP through corrective actions including (i) reversal of fuels tax cuts (prior action); (ii) a further increase in fuel taxes made in April 2024…
.YesNo.NoNoNo.No.No..No.No.
Reverse tax reference prices of diesel and gasoline to CFAF 380/liter and CFAF 420/liter, respectively
Complete installation of additional 25,000 pre-paid meters to largest residential clients that use post-paid meters [EAGB]
Complete and publish an audit of EAGB's power purchase agreement and its amendments
Conclude public contracts for all purchase of four food items (rice, cooking oil, meat, fish) and fuel and obtain the MoF's approval
Submit to the Prime Minister and publish a report that (i) calibrates negative economic and financial impact of delay in the Ring Line Project, (ii) presents the testing and inspection results of the Antula-Central line, and (iii) specifies remedial works that the contractor should undertake [EAGB]
....
26
HondurasHNDEFF, ECF21-Sep-2320-Sep-26R0, R0CR/23/337Lower-middleModerate...NoNoNo-2-11-0.70.428.329.230.330.2Social benefits3.94.10.2YesNoNoYes
Tax policy and administration reforms will support revenue mobilization (Box 3). The authorities, with support from the Fund and other IFIs, are advancing a multi-pronged strategy to broaden the tax base and strengthen the efficiency of revenue collection. In addition to these efforts, the authorities should consider reversing the reductions to gasoline and diesel taxes introduced in 2022—at an annual cost of 0.4 percent of GDP—once the social safety nets have been further strengthened.14 (14: 14 Reversing the reduction in fuel taxes would also be supportive of the authorities’ climate policies.)
0.40%YesYesIn addition to these efforts, the authorities should consider reversing the reductions to gasoline and diesel taxes introduced in 2022—at an annual cost of 0.4 percent of GDP—once the social safety nets have been further strengthened.14 (14: 14 Reversing the reduction in fuel taxes would also be supportive of the authorities’ climate policies.)
We remain strongly committed to protecting and strengthening social spending, which is key to reducing poverty. As part of our commitment to safeguarding and expanding resources provided to the most vulnerable, our program includes an indicative target for priority social spending, with a commitment to increase these expenditures over the course of the program. To help improve and guide our fight against poverty and as part of the program, we will update our poverty reduction strategy paper by July 2024, thereby complying with this requirement for programs financed by the IMF Poverty Reduction and Growth Trust, prior to the second program review. In order to create sufficient space for social spending, we are committed to optimizing its targeting and continuing to control other current primary expenditure (indicative target).		NoNoYesWe are strengthening the design of our social safety net through the Red Solidaria program. Red Solidaria – a comprehensive social assistance system introduced in November 2022 – includes programs that are efficiently administered and have broad coverage focused on extreme poverty in some 2,000 villages selected for their precariousness and social vulnerability. The latter is a necessary compromise given the scarcity of resources and widespread poverty in our country. The beneficiaries were identified using an objective and transparent methodology – supported by the IDB and the World Bank – through a census of extreme rural poverty.
We are working toward expanding Red Solidaria to 100,000 households in 500 marginalized urban areas. In order to reach these families, we are working with the help of the World Bank on a census of extreme poverty.		No.No..No.No..........
27
JamaicaJAMPLL, RSF1-Mar-2328-Feb-25R2, R2CR/24/069Upper-middle....NoNoNo0.30.40.164.731.131.230.930.8....NoNoNoNo.....NoNoYesA Fund’s capacity development mission assisted the authorities with preparation of a roadmap for this transition and the World Bank is providing assistance on oversight of market conduct and consumer protection.
Technical Assistance: World Bank. (RM1: The Ministry of Finance and Public Service (MOFPS) to adopt a National Natural Disaster Risk Financing (DRF) policy.)		No.YesPrivateInfrastructure and logistics. Greater investments in roads, rail, and public transportation are needed, as well as resources to expand the use of renewables, lower the production and transmission costs of energy, and improve reliability.
Incentivizing investment in renewable energy (RM7). Jamaica has an array of fiscal incentives to invest in renewables, which include consumption tax exemptions, lower import tariffs for renewable energy items and electric vehicles (also exempted from license fees), and net billing (Annex VIII). To complement these incentives, the authorities intend to introduce personal income tax rebates to incentivize take up of solar panels for residential generation.
The authorities continue efforts to catalyze private climate financing, and investments in renewable energy are in train to materialize. The RSF is playing a convening role to support the authorities’ efforts to catalyze climate financing through the IMF’s Climate Finance Task Force, in coordination with development partners. Last October, the authorities have announced a package aimed at enhancing climate financing (Annex VII). It comprises a three-pronged approach, including: (i) a Project Preparation Facility to develop a pipeline of bankable projects by facilitating identification, prioritization, feasibility assessment, implementation support, and structuring of projects; (ii) a Green Financing Facility to finance climate projects directly or through local financial institutions; and (iii) concessional loan instruments for more resilient infrastructure, with maturities of up to 30 years and 10-year grace period.21 The government has announced a tender to procure renewable generation capacity for up to 100MW (about 10 percent of generation).22 The deadline to present offers is April 1, and successful bidders will enter into a 20-year power purchase agreement with the public electric utility. This is an important step to bring Jamaica closer to its goal to increase the share of renewables in the grid to 50 percent—from the current 12 percent—by 2030.
There is scope to continue building on these incentives to unlock Jamaica’s potential on renewable energy. The authorities have established a broad array of financial incentives designed to make renewable energy solutions more attainable and financially attractive for individual and commercial owners. In line with their consolidated generalized incentives regime’s strategy, authorities are exploring further fiscal incentives that will complement and reinforce the existing ones.		No.No.
The MOFPS to submit to parliament a bill to incentivize investment in renewables through fiscal measures.
........
28
JordanJOREFF10-Jan-249-Jan-28R1CR/24/197Lower-middle....NoNoNo-5.6-2.33.3-2.10.62627.131.529.4....YesNoNoNo.....NoNoYesDiscussions were held with line ministries and key development partners, notably the World Bank and the World Health Organization, on possible measures to address Jordan’s climate vulnerabilities and health risks. These discussions will continue in the coming period.
We have put in place time- bound action plans to review and amend the labor, social security, and competition laws in consultation with the IMF and relevant development partners, notably the ILO and the World Bank, to ensure timely submission of draft legislation to parliament.		No.YesPrivate (ii) parliament has already adopted the necessary legislative amendments to the Renewable Energy Law that will allow for net billing to be introduced for new self-generators (SB for September 2024)
Cabinet to adopt an implementation roadmap for electricity sector cost reduction and efficiency improvement to ensure NEPCO’s long-term financial viability, while also facilitating a further shift to renewable energy sources and an increase in competition.		No.No.
Based on the legislative and contractual analysis, cabinet to adopt a plan to reduce the cost of electricity generation born by NEPCO.
Based on a legislative and contractual analysis, introduce a legally and regulatory permissible levy on electricity generation companies.
Apply time-of-use tariffs to capture at least 15 percent of total electricity consumption.
Introduce and apply an economically efficient tariff design for access to, usage of, and selling electricity to the power grid for new self-generators, by switching from net metering to net billing.
Cabinet to adopt an implementation roadmap for electricity sector cost reduction and efficiency improvement to ensure NEPCO’s long-term financial viability, while also facilitating a further shift to renewable energy sources and an increase in competition.
Introduce biochemical markers to diesel.
Apply time-of-use tariffs to capture at least 30 percent of total electricity consumption.
..
29
KenyaKEN
EFF, ECF, RSF
2-Apr-211-Apr-25R6, R6, R1CR/24/013Lower-middleHigh...NoNoNo-8.3-3.54.8-41.716.119.124.422.7Social spending3.4..YesNoNoYesA review of the fuel pricing mechanism was conducted by a taskforce to ensure price decisions are aligned with budgeted resources and the subsequent decision was communicated publicly on December 11 in a joint press release by the Cabinet Secretary (CS) for Ministry of Energy and Petroleum and CS for National Treasury (end-August 2023 SB). The lengthy process in forming the taskforce and the publication of its decision resulted in a delayed implementation of the SB. This reflects the need for internal consultation on how to finance recent domestic price decisions on October 15 and November 15 which resulted in limited but unbudgeted fuel subsidies (about 0.1 percent of GDP over the two price cycles)
We are taking decisive steps to ensure that decisions on domestic fuel prices are aligned with budgeted resources. We eliminated overall subsidies on March 15, 2023, and cross- subsidies on May 15, 2023. Consistent with the new administration’s priorities and program commitments, we established, albeit with delay, a taskforce in October 2023—comprising members from NT, Ministry of Energy and Petroleum and the Energy and Petroleum Regulatory Authority (EPRA)—to review the functioning of the fuel pricing mechanism so far and provide recommendations on how to ensure that fuel pricing decisions are at all times aligned with the budgeted resources. The findings of the taskforce were publicly communicated on December 11, 2023 through a press release. To ringfence the resources budgeted for price stabilization purposes, we (National Treasury and Ministry of Energy) intend to perform and publish an assessment of the governance structure of the Petroleum Development Fund and recommend actions to strengthen its management (proposed end-March 2024 SB). Consistent with our requests for access under the IMF’s Resilience and Sustainability Facility (RSF), we are committed to transitioning to low-carbon economy by avoiding fossil fuel subsidies going forward.
Complete a review of how the fuel pricing mechanism has been applied to date; publicly announce and constitute a taskforce to oversee the progressive elimination of the fuel subsidy within the first half of FY2022/23 and to ensure that fuel pricing actions are at all times aligned to the approved budget.
The authorities agree on the need to sustain efforts to align domestic fuel pricing decisions with budgeted resources (MEFP¶30). Specifically, the Energy and Petroleum Regulatory Authority (EPRA) will seek confirmation from the NT and the Ministry of Energy and Petroleum (MEP) of the availability of resources for price stabilization purposes before announcing the prevailing domestic fuel prices every 15th of the month. In the event a decision is taken to stabilize prices beyond what can be financed by budgeted resources, the NT will be required to indicate the sources of additional financing (e.g., budget reallocations, borrowing) and EPRA to communicate the financial implications of the domestic price decisions. In addition, the NT and MEP will review by end-March 2024 the governance structure of the Petroleum Development Fund with a view to ringfencing resources budgeted for price stabilization and improving transparency of their management (proposed SB)		.YesNo.NoNoYesOn the expenditure side, the budget will seek to accompany the ongoing efforts to contain expenditures for wages (MEFP¶27) and transfers—including related to public sector entities and subsidies—and to improve the efficiency of public expenditures with new initiatives (MEFP¶¶26, 28, and 29). The latter include achieving new spending saving of about 0.6 percent of GDP by containing recurrent expenditures—including related to travel, allowances, and hospitality—and further rationalizing the portfolio of non-priority projects in line with the recommendations under the World Bank’s 2020 Public Expenditure Review.
The authorities are working toward enhancing predictability of financing and institutional arrangements for social protection delivery systems. Kenya’s National Safety Net Program (NSNP) supports 1.4 million direct beneficiaries and approximately 5 million indirect beneficiaries through cash transfers.18 Reforms under the World Bank Development Policy Operation (DPO), approved in 2023, aim at ensuring timely, secured, and predictable spending on social protection under the NSNP cash transfers to all beneficiaries enrolled in the program.19 The authorities are exploring, with the support of the World Bank, to use the Hunger Safety Net Program (HSNP)—one of Kenya’s key safety net instruments to respond to recurrent droughts and other climate induced shocks—to distribute cash assistance to households affected by recent El Niño flooding in eight northern counties. In this context, the World Bank is working with the authorities on technical aspects of triggers to facilitate the expansion of emergency cash transfers under HSNP’s “shock-responsive” component to include those affected by flooding. Currently, it can only disburse temporary cash assistance to households affected by drought.20 The World Bank is also exploring other areas of social protection program reform under upcoming DPO (expected in early 2024), including the obligatory use of a recently developed digital socio-economic database of poor and vulnerable population (Enhanced Single Registry, ESR) and the indexation of cash transfers to inflation and other economic indicators. The ESR will objectively identify beneficiaries and improve transparency and efficiency of the program. A World Bank analysis suggests that by raising support per household per month to about Ksh.3,000 (one-quarter of average monthly expenditure by poor households), overall social assistance could be higher by 0.1 percent of GDP which could be financed through revenue recycling (i.e., using revenues raised from taxes, such as carbon taxes).21 Potential areas of reforms include increasing the proportion of NSNP beneficiaries who come from the bottom 40 percent of the consumption distribution from 59 to 80 percent and to increase coverage of female-headed households. Under the EFF/ECF program, the authorities are committing to target higher social spending for end-June 2024 than at the fifth EFF/ECF reviews.
KPLC has begun implementing the Cabinet-approved action plan to help restore its financial health, and commitments under a World Bank-supported project, with its shareholders approving private sector’s representation in its Board of Directors.
To facilitate open access in the electricity market, the authorities have developed draft regulations with assistance from the World Bank.
The authorities are proactively managing the challenges to sustain macroeconomic stability and strengthening social protection programs with the support of the World Bank to ensure social cohesion.
To facilitate open access in the electricity market, we have developed draft regulations with assistance from the World Bank. After completion of a Regulatory Impact Assessment, the regulations will be ready for adoption.
The World Bank will assist us with considering reform options for recycling proceeds from carbon taxes towards social protection, bio-diversity/ecosystems protection, landscape restoration, financing adaptation action under the Financing Locally Led Climate Action (FLLoCA), resilience building, and climate proofing of our assets.		No.YesPrivateRM7: Cabinet to approve net metering regulation, electricity market, bulk supply, and open access regulations, including rates determination methodology to promote energy efficiency, electricity wheeling and distributed renewable power generation in the residential, commercial, and industrial sectors including Special Economic Zones and Industrial Parks.
In line with the Action Plan, KPLC will (i) by the end-December 2024, transfer all transmission assets/lines to Kenya Electricity Transmission Company (KETRACO) and pay through the use of on-lent loans from the government upon valuation, (ii) by end-December 2024, settle the outstanding Rural Electrification Schemes (RES) operations and maintenance cost deficit of Ksh.19.4 billion (assessed as of June 2022) and ensure that KPLC and Rural Electrification and Renewable Energy Corporation (REREC) enter into a commercial contract for the future RES maintenance cost…		No.YesRM3: Subject to Parliamentary approval, National Treasury to implement carbon pricing in line with IMF recommendations to better reflect the externalities of fossil fuel consumption and to achieve emissions reduction targets in line with the updated NDC.
The authorities anticipate implementation of the reform measure on carbon pricing (RM3) could take longer than previously envisaged but are not requesting any rephasing of the related financing.
Mobilizing climate-revenue and strengthening efficiency. Given the complexity of green taxes, authorities anticipate implementation of carbon pricing (RM3), initially planned by the second RSF review, could take longer than previously envisaged. Adoption of green fiscal incentives in agriculture, water, and land management sectors (RM6) is being fast tracked. The National Green Fiscal Incentives framework, expected to be adopted before end–2023, sets out options for promoting low-carbon, climate resilient, and environmentally sustainable practices. These include carbon taxes, subsidies, ecological fiscal transfers, research grants, and concessional loans.
Complete a review of how the fuel pricing mechanism has been applied to date; publicly announce and constitute a taskforce to oversee the progressive elimination of the fuel subsidy within the first half of FY2022/23 and to ensure that fuel pricing actions are at all times aligned to the approved budget.
NT and Ministry of Energy to perform and publish an assessment of the governance structure of thePetroleum Development Fund and recommend actions to strengthen its management.
Cabinet to approve net metering regulation, electricity market, bulk supply, and open access regulations, including rates determination methodology to promote energy efficiency, electricity wheeling, and distributed renewable power generation in the residential, commercial, and industrial sectors, including Special Economic Zones and Industrial Parks.
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30
KosovoKOSSBA, RSF25-May-2324-May-25R2, R2CR/24/147Upper-middle....NoNoNo-0.2-1.7-1.50.2-1.229.628.529.930.3....NoYesNoNoCurrent spending remained broadly flat, with a reduction in subsidies and current transfers offsetting the increase in the wage bill due to implementation of the new public sector wage law (½ percent of GDP).
Implementation of reforms supported by the RSF has been strong. RM1 (end-October) was implemented timely. A 2024 budget consistent with RSF objectives (allocation for expansion of renewable energy and implementation of a new definition of vulnerable consumers) was submitted to Parliament in October (¶29),24… (24: The design of electricity subsidies was revamped to better target budgetary support to vulnerable energy consumers. Specifically, the MFLT, with WB and Millennium Challenge Corporation (MCC) assistance, redefined the universe of vulnerable energy consumers. The program subsidizes part of the electricity bill for households with monthly incomes lower than €150 (i.e., the poverty line as defined by the WB), with the actual subsidy amount also considering household composition.)
Social Benefits. Electricity tariffs will continue to ensure that the electricity sector’s financial flows remain balanced in 2024, without the need of blanket government subsidies. The government, in collaboration with the World Bank (WB), has revised the definition of vulnerable energy consumers to ensure that beneficiaries are chosen based on means-testing procedures.
We have improved the targeting of electricity subsidies to support vulnerable energy consumers. The subsidies aim to cover part of the electricity bill for households with monthly incomes lower than €150/household and consider the household composition. More than 60,000 households have qualified and are now receiving this subsidy. The 2024 budget includes an allocation that secures the implementation of this program (end-October 2023 RM). While import electricity prices have eased since mid-2023, we intend to minimize the use of untargeted subsidies should electricity prices rebound, by ensuring that the permanent component of price signals is passed through to non-vulnerable consumers.		.NoYesSocial Benefits. Electricity tariffs will continue to ensure that the electricity sector’s financial flows remain balanced in 2024, without the need of blanket government subsidies. The government, in collaboration with the World Bank (WB), has revised the definition of vulnerable energy consumers to ensure that beneficiaries are chosen based on means-testing procedures.
We have improved the targeting of electricity subsidies to support vulnerable energy consumers. The subsidies aim to cover part of the electricity bill for households with monthly incomes lower than €150/household and consider the household composition. More than 60,000 households have qualified and are now receiving this subsidy. The 2024 budget includes an allocation that secures the implementation of this program (end-October 2023 RM). While import electricity prices have eased since mid-2023, we intend to minimize the use of untargeted subsidies should electricity prices rebound, by ensuring that the permanent component of price signals is passed through to non-vulnerable consumers.		NoNoYesThe authorities continue to make efforts to strengthen tax policy frameworks. A new tax policy division has been created within the Ministry of Finance, Labor, and Transfers (MFLT), but staffing challenges remain substantial. The MFLT is preparing—with World Bank support—a review of tax expenditures and amendments to the Laws on Personal Income, Corporate Income, and Value Added Taxes, aimed at strengthening the equity of the tax system and improving revenue mobilization
The World Bank’s Country Climate and Development Report (CCDR), expected to provide a holistic assessment of climate change mitigation and adaptation challenges and priorities, should be finalized in 2024.
With assistance of the World Bank, we are preparing a comprehensive review of tax expenditures, which in time will serve us to propose policies that would further increase fiscal space and tax fairness.
Social Benefits. Electricity tariffs will continue to ensure that the electricity sector’s financial flows remain balanced in 2024, without the need of blanket government subsidies. The government, in collaboration with the World Bank (WB), has revised the definition of vulnerable energy consumers to ensure that beneficiaries are chosen based on means-testing procedures.
The CBK is preparing a strategy for the management and supervision of climate- related financial risks in the financial sector. By October 2024, the CBK will prepare and adopt a comprehensive strategy for the supervision of climate-related risks in the financial sector, with the support of the World Bank (FinSAC).
A new draft law on Law on Microfinance Institutions is being prepared, with support from the International Finance Corporation (IFC), with a view to sending it to parliament by end-2024. The CBK is working, with WB support, on a new draft Law on Payment Services in line with EU directives, which will be submitted to the government by June 2024.
The design of electricity subsidies was revamped to better target budgetary support to vulnerable energy consumers. Specifically, the MFLT, with WB and Millennium Challenge Corporation (MCC) assistance, redefined the universe of vulnerable energy consumers. The program subsidizes part of the electricity bill for households with monthly incomes lower than €150 (i.e., the poverty line as defined by the WB), with the actual subsidy amount also considering household composition.		No.YesPrivateImplementation of reforms supported by the RSF has been strong. RM1 (end-October) was implemented timely. A 2024 budget consistent with RSF objectives (allocation for expansion of renewable energy and implementation of a new definition of vulnerable consumers) was submitted to Parliament in October (¶29)…
A law promoting the use of renewable energy sources was approved by Parliament. The law, fully transposing EU directives, was approved April 8. The law seeks to modernize the energy sector, reducing carbon intensity and increasing energy efficiency. It establishes a general framework to attract private capital into renewable energy using competitive auctions, regulates the use of PPPs to expand green energy capacity, and establishes market prices as the reference for regulatory purposes, among other provisions. The law also sets the grounds for feed-in premiums and feed-in tariffs, among other schemes, and provides benefits to wind, solar, biomass, biogas, and geothermal energy generation.
Tangible progress is being made to expand green energy generation capacity. Kosovo’s energy strategy aims to increase the share of renewable energy to at least 35 percent by 2031 (from about 9 percent in 2023). The RSF is contributing to progress towards this goal, as well as to achieving higher energy security and the phasing out of coal-based power generation. • The Ministry of Economy has successfully concluded the first competitive auction to construct and operate a 100 MW solar photovoltaic (PV) plant in Rahovec, with USAID support.26 Six companies (from Egypt, France, Germany, Türkiye, and Switzerland) submitted bids, with five shortlisted for an e-auction held March 29. The winner was a consortium led by a Swiss construction company, which offered the lowest price (€48.88 per MWh, well below the ceiling price of €75 per MWh). The winner plans to invest about €70 million and will be awarded a 30- year concession contract and a 15-year power-purchase agreement—the first of its kind established under a competitive mechanism in Kosovo. The additional solar energy generation capacity is expected to be in place by 2026. • Building on lessons learned from this first solar auction, the government is planning to launch a first competitive auction for 150 MW of wind generation (RM2, rescheduled to mid-October from end-June 2024). The Ministry of Economy, with continued assistance from USAID, has signed an agreement with IFC to support the process as transaction advisor. This will help implement the auction and increase the credibility of the project, making it more attractive for potential foreign investors. To implement this project, the authorities have committed resources for about €70 million to attract private capital into wind-based generation through a PPP. The 2024 budget includes a below-the-line allocation in a sub-account of the Treasury Single Account to this end and defines that these resources will be transferred to the entity holding the state’s stake in the project (RM1, end-October 2023). All relevant technical documents are expected to be presented to the PPP Committee by August, defining the entity that will hold the state’s share on the PPP. Upon PPP Committee approval, the government will launch an open, transparent, and competitive tender to select the PPP private partner by mid-October. The RM2 due date has been rescheduled and aligned with the timeline agreed between the government and IFC. • Procurement for the installation of 100 MW of additional solar electricity generation capacity on KEK property—with total financing of about €105 million—is planned to start in June. Financing includes a loan from KfW (€29 million), a European Investment Bank (EIB) loan (€33 million), and a grant (€32 million) channeled through the EU’s Western Balkans Investment Framework (WBIF).27 Upon completion, the new plant is expected to produce around 169 GWh of electricity and displace 174,000 tons of CO2 per year.
The Albanian Power Exchange (ALPEX) is now fully operating under the market coupling mode.28 On January 31, ALPEX launched day-ahead auctions in market-coupling mode for the two bidding zones (Albania and Kosovo).29 Work on the introduction of an intraday wholesale electricity market is underway. As the market gains depth and liquidity, market-determined reference prices would gradually replace those set by ERO in the competitive auctions to attract private capital to renewable energy generation. This process would benefit from increased regional integration. To this end, the ERO has signed a memorandum of understanding with Greece’s and North Macedonia’s power operators aiming to establish a regional day-ahead electricity market coupling. These initiatives and achievements will strengthen regional integration and promote competition in electricity markets, essential to attract private investment.30
RM1 Submission to Parliament of a Budget for 2024 consistent with RSF objectives (allocations for expansion of renewable energy and for implementation of new definition of vulnerable energy consumers); KEK to prepare budget plan securing financing to secure the installation of filters in one unit of Kosova B in 2024
RM3 Submission to Parliament of Law on Renewable Energy delineating the use of competitive auctions to attract private sector investment in renewable electricity generation
RM2 The government will launch by mid-October 2024 an open, transparent, and competitive tender for the construction and operation of 150 MW of wind-based electricity generation capacity in a non-specific location.
RM5 Ministry of Economy to adopt Administrative Instruction allowing the launching of first auction for 100 MW of solar electricity generation during 2023 to be financed by the private sector.		No.YesReducing emissions and air pollution, enhancing energy security, improving targeting of energy subsidies, and increasing preparedness for implementation of carbon pricing are also important goals.
RM4 Working group presents to Cabinet draft report discussing implications of EU carbon price initiatives for Kosovo, using the CPAT tool.
The government submits a budget for 2024 consistent with SBA and RSF objectives; KEK budget plan for 2024 includes an allocation to complement EU financing for the installation of a filter in the B-2 unit.
Submission to Parliament of a Budget for 2024 consistent with RSF objectives (allocations for expansion of renewable energy and for implementation of new definition of vulnerable energy consumers); KEK to prepare budget plan securing financing to secure the installation of filters in one unit of Kosova B in 2024.
The government will launch by mid-October 2024 an open, transparent, and competitive tender for the construction and operation of 150 MW of wind-based electricity generation capacity in a non-specific location.
Submission to Parliament of Law on Renewable Energy delineating the use of competitive auctions to attract private sector investment in renewable electricity generation.
Ministry of Economy to adopt Administrative Instruction allowing the launching of first auction for 100 MW of solar electricity generation during 2023 to be financed by the private sector.
Kosovo Energy Efficiency Fund Board to approve plan to increase energy efficiency of residential buildings to start implementation in 2023:H2
Government to implement actions conducive to the start of the day-ahead electricity market for Kosovo from September 2023 in the context of the Albania-Kosovo Regional Electricity Market (ALPEX).
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Madagascar
MDGECF, RSF21-Jun-2420-Jun-27R0, R0CR/24/205LowModerate...NoNoNo-4.1-3.80.3-2.9-2.912.913.216.716.9....YesNoNoYesThe implementation of an automatic fuel pricing mechanism (PA) should further reduce fiscal risks (Annex VII). The mechanism allows pump prices for gasoline, diesel, and kerosene to fluctuate with reference prices (proxy for market prices) on a monthly basis. It is designed as a “price band” mechanism, with two main characteristics: (i) pump prices in month M are automatically adjusted by the change in the reference price between month M-2 and month M-1, capped at 200 ariary/liter, and (ii) any change in the reference price beyond 200 ariary would be postponed to the next month until the change in pump prices fully reflects that of the reference price. The subsidy resulting from the initial gap between the pump and reference prices and the delayed adjustment would be paid to oil distributors within a month after the end of every quarter. A timely settlement of the subsidy is key to limit pressure on the cash flow of oil distributors and avoid the accumulation of cross-liabilities as observed in the past. For 2024, the estimated subsidy (around MGA 239 billion or 0.31 percent of GDP) has been budgeted for in the revised budget law.
While carbon emissions per capita remain very low compared to other SSA countries, the RSF would support efforts to convey the right price signals in the energy sector. Madagascar’s emissions are increasing, albeit from a low level and with a composition skewed towards land use, land use change and forestry (LULUCF) and agriculture (80 percent of emissions). Reforms under the ECF (automatic fuel pricing mechanism) would go a long way towards reducing fuel subsidies – already relatively modest at 1.6 percent of GDP cumulatively over 2021-23 and expected to decrease to 0.3 percent of GDP in 2024. The full elimination of fuel price subsidies by May 2026 (RM07) would complement these efforts, increase incentives for conservation and create fiscal space to finance social safety nets and/or investment in climate-resilient infrastructure. Similarly, an increase in the diesel excise tax would reduce the tax advantage of using diesel over gasoline with a positive mitigation impact (RM08).		1.20%YesYesWe will gradually increase taxes on diesel to bring them into line with the rates applicable to gasoline. Excise taxes and road maintenance charges are currently lower for diesel than for gasoline - a difference that does not correspond to environmental externalities or the respective impact on road infrastructure of diesel vehicles compared to gasoline-powered cars, and which has favored a largely diesel-oriented fleet structure (60 percent of total consumption of fuel products). We commit to gradually raise excise taxes and other levies on diesel fuel to align them to the level applicable to gasoline (RM8, end October 2026). W We will also benefit from the support of the World Bank to prepare and implement mitigation measures for the most vulnerable groups, including public transport vehicles and their users.
Closing the gap between pump and reference prices would require an increase in pump prices by about 25 percent on average, based on the current price structure.1 The required change would vary across the three types of fuel, with the increase in the pump price being the highest for kerosene whose subsidy is currently the largest (49 percent), and the increase in diesel prices the second highest (29 percent). Given that the administered price for gasoline is currently above the reference price, gasoline prices could even decrease. The change can be implemented gradually, over several months, to smooth the impact on households’ budget. The pace of price increases could also differentiate across the types of fuel, with kerosene prices being increased more gradually than diesel prices, to allow for the implementation of measures to mitigate the impact on poorest households, such as the distribution of solar kits.
We will continue our efforts to fully restore price signals for different types of fuels. Building on the progress already made with the automatic fuel pricing mechanism (prior action under the ECF program) and the expected success of the solar kit program to reduce the need for kerosene for the most vulnerable populations, we will fully eliminate fuel price subsidies resulting from an administered retail price (PMAP) that has durably been below the calculated reference price (PRC) (RM7, end April 2026). It will also increase fiscal space for resilient public investment.		NoNoYesFinally, the authorities committed to reduce tax expenditures (estimated around 3.2 percent of GDP in 2022) by MGA 280 billion per year in each budget law, building on work by the African Development Bank, the World Bank and IMF CD.
Reforms to turn around JIRAMA are key to more effective spending. Transfers to JIRAMA and its suppliers represented 1.3 percent of GDP in 2023. The authorities appointed a new CEO in May 2024 following an international recruitment process initiated in 2023 with the support of the World Bank (PA).
A more robust PIM framework has been adopted in early 2023 with IMF and World Bank support, but its implementation is barely starting, and the framework does not yet include climate considerations.
CD support (European Union and World Bank) will be essential to achieve the objectives under this RM, notably to help put in place adequate institutional arrangements as the authority in charge of water and sanitation created under the 1998 law has not been able to fulfil its mandate effectively.
Climate-responsive social protection is being developed with the support of the World Bank and UNICEF, in connection with the extension of the Unified Social Register.
The RSF will henceforth support adequate budgeting and operationalization of the FNC, as well as improvements in process for emergency expenditure, including adequate transparency and reporting mechanisms (RM06). This action will benefit from World Bank support and will also be able to build on the experience gathered by IMF (FAD) CD, notably through the recent audit of the expenditure chain (2023) and through previous work on COVID spending.
Madagascar has implemented an effective Measurement, Reporting and Verification (MRV) mechanism under the World Bank Forest Carbon Partnership Facility (FCPF), which covers public projects only. Extending the scope of this mechanism to reforestation schemes would tap into significant private interest (RM10). World Bank CD support would help make sure that this new framework is conducive to high-quality projects, not just in terms of mitigation but also in terms of adaptation to climate change (fighting soil erosion for example) and benefits for local communities.
World Bank Synergic Operations. Madagascar Equitable and Resilient Growth Programmatic DPO (2023-2025): aims to mitigate Madagascar’s climate risks through climate-smart and decentralized fiscal management. The DPO supports reforms to strengthen macro-resilience, including the adoption and enhancement of a decree to establish selection criteria - including climate change - for the prioritization of public investment projects. The Safety Nets and Resilience Project (P179466) supports climate change adaptation including agroforestry, landscape management, irrigation, and reforestation, as well as rapid safety net response to climate shocks. The Support to Resilient Livelihoods in Southern Madagascar Project (P171056) covers a range of resilience measures including resource and landscape management. The Madagascar National Water Project (P174477) is financing investments in water supply in major cities across the country and several cyclone-affected areas. The Regional Climate Resilience Project (P180171) will fund the remaining stages of the preliminary drafts study of the Mandrare Multipurpose Transformative Project. The Madagascar Ethanol Clean Cooking Climate Finance Program (P154440) aims to increase household use of ethanol cooking stoves for reduced GHG emissions in Madagascar. The Atiala-Atsinanana Emission Reductions Program Project (P167725) aims to make payments to the program entity for measured, reported and verified Emission Reductions (ER payments) related to reduced deforestation, forest degradation and the enhancement of forest carbon stocks (REDD+) at the national level in Madagascar, and distribution of ER payments in accordance with agreed Benefit Sharing Plan. The Madagascar - Least-Cost Electricity Access Development Project – LEAD (P163870) and the Digital and Energy Connectivity for Inclusion in Madagascar Project (P178701) are implementing grid-based renewable energy solutions. The Atiala-Atsinanana Emission Reductions Program Project (P167725) aims to make payments to the program entity for measured, reported and verified Emission Reductions (ER payments) related to reduced deforestation, forest degradation and the enhancement of forest carbon stocks (REDD+) at the national level in Madagascar, and distribution of ER payments in accordance with agreed Benefit Sharing Plan. Reform Area 5: Mobilize climate finance Madagascar Ethanol Clean Cooking Climate Finance Program (2016-2025) provides technical assistance to establish the institutional and regulatory framework to enable Madagascar's readiness to implement Art. 6 of Paris Agreement The Atiala-Atsinanana Emission Reduction Program (AA-ERP, 2022-2025), aims to reduce deforestation and forest degradation in its area of intervention through carbon market mechanism. The AA- ERP supported the elaboration and adoption of the decree on forest carbon market regulation in Madagascar.
The World Bank’s upcoming CCDR emphasizes the need to design a multi-faceted national strategy for climate finance mobilization and opportunities for private financing.
Madagascar is a pilot country for the IMF-World Bank enhanced cooperation framework for scaled-up climate action. The framework takes into account the specific mandates and relative expertise of each institution and aims to support countries to mobilize both private and public funding for climate action. During and prior to the staff visit, multiple consultations were organized with the World Bank across all reform areas to identify synergies and opportunities and push for ambitious policies as well as technical assistance for implementation. These synergies as well as the catalytic potential for private climate finance are identified in the tables below.
The World Bank is providing support for the water sector and for urban resilience. It is also supporting the transport sector, with support for the maintenance and rehabilitation of the road network channeled through the Madagascar Road Agency and a strong emphasis on designing infrastructures more resistant to climate hazards.
On mitigation, support provided by donors is focused mostly on renewable energy, especially hydropower. The AfDB and World Bank have supported efforts to increase electricity production from renewable energy sources, through direct involvement in large hydropower projects, support for solar projects, or capacity development and institution-building in the energy sector.
Lastly, support against deforestation is provided notably by the World Bank, which supports the REDD+ mechanism, with up to US$ 50 million in financing until 2024 contingent on progress in reduction of emissions, and a first disbursement of US$ 8.8 million in December 2023.
Apart from AfDB and World Bank efforts mentioned above with respect to insurance and risk financing strategy, the World Bank is providing financing and technical assistance to develop social safety nets.
We intend to improve the analysis and regular publication of fiscal risks that may affect the public finance path provided for in our MTFF and in our annual budget. Indeed, we intend to make greater use of the available information to carry out quantitative assessments of these risks and to determine the possible implications for the budget. This will allow us to implement the necessary actions and mechanisms to mitigate the impacts and ensure the necessary budget allocations to counter these risks. We naturally rely on our technical and financial partners, in particular the World Bank and the IMF (AFRITAC South) to help us make progress in this area.
Energy sector reforms undertaken with the support of the World Bank through its DPO operation place emphasis on energy efficiency standards and a stronger regulatory framework that can facilitate private sector participation in renewable energy projects.
We will also benefit from the support of the World Bank to prepare and implement mitigation measures for the most vulnerable groups, including public transport vehicles and their users.		No.YesBothInitiatives to promote the development of renewable electricity will also be encouraged under the RSF. The 2015-2030 New Energy Policy and the 2022 SDG7 implementation plan aim to raise the share of renewable energy in electricity generation from 40 percent currently to about 85 percent in 2030 while increasing household access to electricity from 33 percent to 70 percent by 2030. While most of this increase is expected to accrue from large hydropower projects (Sahofika and Volobe), there is scope to develop mini-grid and off-grid solar or hydropower solutions notably to enhance electricity access in rural areas. Progress in this field could be achieved through the creation of a dedicated financing vehicle called National Sustainable Energy Fund (FNED), which could leverage State contribution and support from donors to support renewable energy projects in rural areas (RM09).
With respect to mitigation, there is scope to improve price signals on fossil fuels and to encourage renewable energy and cleaner appliances. Improving the governance of the State-owned electricity utility – a priority under the ECF program - will be a prerequisite for creating a market more conducive to clean energy.
We will continue our efforts to facilitate the production of renewable energy and promote access to affordable electricity for all in rural areas. As highlighted by the CCDR currently being finalized, the country is already one of the most active markets in sub-Saharan Africa for mini-grids and off-grid installations for solar energy or small hydropower, thanks to a favorable fiscal framework, donor initiatives (World Bank's Off-Grid Market Development Fund, AFD's SUNREF) and the support of the Agency for the Development of Rural Electrification (ADER). We will aim to amplify this dynamic through the operationalization of a dedicated financing vehicle created by Law 2017-021 on the Sustainable Electricity Development Fund (FNED). This dedicated financing vehicle will benefit from contributions from the State’s budget and levies paid by JIRAMA as the incumbent operator; it will also be able to benefit from the support of partners such as GIZ who are interested in rural electrification. The FNED will be able to rely for the examination of projects on the technical expertise of ADER, which will have to be strengthened in its resources and staff. It may possibly conclude one or more agreements with banks or credit institutions to distribute assistance in the form of guarantees or loans, in addition to subsidies that FNED may pay directly. To this end, we will adopt the decree on the FNED and operationalize the FNED financing mechanism to support off-grid and mini-grid electrification and proactively incentivize private sector funding, with at least a total of 11.5 MW in newly installed renewable energy production capacity arising from operations supported by FNED. (RM9, end April 2026)
The potential for clean electricity remains underexploited. While Madagascar has the third-largest hydropower potential in Africa, it currently taps into less than 1 percent of this vast potential, whose size provides a hedge against climate-induced changes in rain or weather patterns. Delays in launching new large-scale hydropower plants, partly explained by the poor financial health of the State-owned utility JIRAMA, have resulted in an increased need for fossil fuels for electricity generation7. Increasing the electricity access rate (currently at 33 percent of households) would also require a wider recourse to off-grid or small-grid developments (based on small hydropower plants or solar energy – with Madagascar also a prime location for developing solar power).		No.No.
Implement an automatic fuel pricing mechanism and provide for the estimated subsidy in the budget
Appoint a new CEO for JIRAMA
Provide IMF staff with a monthly dashboard on JIRAMA's revenue and costs and with the details of any budget transfers to Jirama suppliers within 45 days after the end of each month
Publish calls for tenders, the results of these calls for tenders, and contracts for JIRAMA fuel purchases on the JIRAMA website within a maximum period of 45 days after the end of the month of acceptance of an offer
Finalize and have the Council of Ministers approve JIRAMA's recovery plan prepared by the new management team
Energy prices and subsidies. Fully eliminate all fuel price subsidies resulting from an administered retail price (PMAP) that has durably been below the calculated reference price (PRC).
Fuel Taxation. Gradually raise excise taxes and other levies on diesel fuel to align them to the level applicable to gasoline
Renewable energy production. Adopt the FNED (Fonds National de l’Énergie Durable) decree and operationalize the FNED financing mechanism to support off-grid and mini- grid electrification and pro-actively incentivize private sector funding, with at least a total of 11.5 MW in newly installed renewable energy production capacity arising from operations supported by FNED.
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32
MalawiMWIECF15-Nov-2314-Nov-27R0CR/23/375LowIn distress...NoNoNo-11.7-5.76-6.81.717.217.628.923.3
Social benefits [Social assistance benefits; Fertiliser payments; Maize seed subsidy; Social Cash Transfer-Government]
1.51.50YesNoNoYes
Greater exchange rate flexibility will be accompanied by expenditure-switching measures to contain BOP pressures. Fuel consumption grew on average 7.7 percent during the past 6 years, partly driven by a rapid increase in imports of used motor vehicles, which more than doubled during the same period (Annex II). Some of the authorities’ fiscal policy measures (e.g., operationalizing a specific tax on secondhand cars (PA), repealing VAT relief on motor vehicles for privileged individuals and groups (SB) in ¶15) will also help contain motor vehicles and fuel imports and in turn BOP pressures. Some other measures such as (i) raising import duty, VAT, and excise taxes on motor vehicles to raise the price of motor vehicles to (at least) the regional average, (ii) timely updating the fuel prices to be in line with global prices, and (iii) raising fuel taxes should be considered especially given the persistent lags in upward revisions of fuel prices.7 The authorities are planning to adjust the fuel price and committed to adopt (i) and (iii) as soon as possible but no later than the passage of the FY2024/25 budget (MEFP ¶31).
.YesNo.NoNoNo.No.No..No.No..........
33
MauritaniaMRT
EFF, ECF, RSF
25-Jan-2324-Jul-26R2, R2, R1CR/24/194Lower-middleModerate...NoNoYes-2.5-1.21.3-1.5-0.322.924.925.426....YesNoNoYesTo keep the fiscal performance in line with the program, the government committed to lower expenditures compared to the 2024 budget law approved by Parliament. To meet the NEPB target, i.e., limit the 2024 NEPB deficit to MRU 16.0 billion (3.8 percent of GDP), and considering the downward revision of revenue projection for 2024, the authorities reduced budgeted capital expenditures as follows: (i) by MRU 2.6 billion for domestically financed investments and (ii) by MRU 1.25 billion for externally financed investment. Relative to the end-2023 outturn, revised capital expenditures are now projected to increase by 0.7 percentage point of GDP.10 (10: In 2024, energy subsidies (MRU 4.2 billion) are expected to decline by 19 percent relative to their 2023 level (MRU 5.2 billion) in line with decreasing international fuel prices. Phasing out fuel subsidies, which constitute more than 90 percent of total energy subsidies remains a priority for the authorities, as supported by one of the reform measures under the RSF.)
RM VI In line with IMF TA, the Council of Ministers will adopt a decree for a new fossil fuel price structure that adjusts automatically to changes in international prices, removes discretionary price setting, phases out subsidies, and includes a price smoothing mechanism.
As part of the RSF, a fuel price reform aimed at phasing out subsidies is planned.
The reform of fossil fuel pricing and the introduction of carbon pricing are essential to achieving our reduction targets for GHG emissions. For this purpose, and in line with IMF technical assistance, the government plans to adopt by decree, by March 2025, a new pricing structure for fossil fuels that will (i) automatically adjust to international price variations, (ii) remove discretionary pricing, (iii) phase out subsidies and, (ii) include an automatic price smoothing mechanism to mitigate price volatility (reform measure RSF VI).		1.40%YesYes
A request will also be made to the World Bank to integrate into the existing cash transfer system a mechanism for compensating the most vulnerable economic agents when pump prices exceed a certain threshold.
NoNoYesPFM and expenditure policy: increase the quarterly amount of cash transfers paid to vulnerable households from MRU 2,900 to MRU 3,600 and publish a report by Taazour/World Bank (end-December 2024 SB)
Revenue administration: Reform the codification of imported products in customs, including the additional codes used for tax regimes that allow to identify the imports that benefit from special tax regimes (end-September 2024 SB). 13 (13: The implementation of this SB is underway with support from the World Bank)
The social safety net program to strengthen resilience against key climate shocks (mainly droughts) has been formalized and expanded (end-April 2024 RM V, met). The authorities have adopted a decree, with IMF FAD and World Bank inputs. The decree (i) formalizes the national safety net program Tekavoul, 24 and its climate shock-response component (Tekavoul Choc), making the cash transfers permanent, (ii) expands the coverage of Tekavoul Choc to include all poor households affected by droughts, and (iii) ensures sufficient financing for the transfers. Until this reform, these transfers were largely funded by development partners (24: While being a flagship governmental program, Tekavoul was not legally anchored until the introduction of this decree. The program was launched in 2016 and its component Tekavoul choc was launched in 2020, with World Bank assistance, to support households in extreme poverty and in climate-related food insecurity, respectively. The program uses the national social registry to select beneficiaries, the national payment platforms to deliver cash transfers, and the “cadre harmonisé” as the early warning system to trigger Tekavoul Choc.)
With the support of the World Bank, we will continue to strengthen the targeting of the most vulnerable households.
A request will also be made to the World Bank to integrate into the existing cash transfer system a mechanism for compensating the most vulnerable economic agents when pump prices exceed a certain threshold.
To comply with the WB-UN Zero Routine Flaring by 2030 initiative and to meet the NDC's commitment to achieve zero net emissions by 2050, the government plans to adopt a decree, in line with World Bank technical assistance, to eliminate routine flaring and gas discharges and reduce methane emissions by February 2025 (reform measure RSF X). The measure will also help reduce GHG emissions from oil and gas projects in the country, notably the gas project (GTA), as the legal reforms will apply to existing and future oil and gas projects. Technical support has been requested from the World Bank on gas flaring for the preparation of the decree.		No.YesPrivateThe government is fully engaged in the reform of the energy sector. The aim is to open up the energy sector to competition and attract private investment in renewable energies. The government has already reformed its electricity code in 2022 and intends to reinforce this reform by adopting regulatory decrees (i) to allow independent power producers access to the Mauritanian market and (ii) to establish a non-discriminatory third-party system for access to transmission infrastructure belonging to the public electricity company SOMELEC by August 2025 (reform measure RSF VIII).
The government aims to reduce the mining sector's GHG emissions and encourage the sector to use more renewable energies in its energy production. For this purpose, the authorities will adopt a decree by August 2025 that will require mining companies to increase the share of electricity production from renewable sources in their energy mix by at least 5 percentage points per year. These companies can set up renewable energy facilities on their properties to comply with the requirements of the reform. Any annual targets not met will be offset by compensatory investment in rural electrification, particularly in remote areas. We will cover the costs of maintaining these infrastructures. The Directorate for Mines will be responsible for applying and monitoring these regulations (reform measure RSF IX).
RM VIII In accordance with its New Electricity Code, the Ministry of Petroleum, Mines and Energy will adopt regulatory decree(s) to (i) provide access for independent power producers to the Mauritanian energy market and (ii) establish a non-discriminatory third-party access to transmission infrastructure owned by the public power utility SOMELEC.
RM IX The Ministry of Petroleum, Mines and Energy will adopt a decree requiring mining companies to increase the share of renewable-based electricity generation in their power mix by at least 5 percentage points annually until 2030. The annual objectives not achieved will be subject to a compensatory investment in rural electrification, especially in isolated areas.		No.YesDecarbonization (RMs VI and VII for end-April 2025, third RSF review): The authorities are preparing the communication plan for (i) the fossil fuel pricing structure reform (RM VI) and (ii) the carbon tax (RM VII), and requested additional follow-up CD to support them in setting the technical parameters required for the timely delivery of the RMs.
RM VII In line with IMF TA, the Council of Ministers will adopt the FY 2025 budget law introducing a carbon tax applied starting March 2025 that (i) would be phased in gradually, (ii) is aligned with the country NDCs to address emissions from all sectors of the economy and fuels except LPG and (iii) is supplemented with compensation measures to safeguard poor households when prices exceed a certain threshold.
In addition, the government, in line with the recommendations of the IMF's technical assistance, will introduce a carbon tax, its rate, and its trajectory in the 2025 initial budget law, applicable from March 2025 in a progressive manner in line with the country's NDC, in order to reduce emissions from all sectors of the economy and from all fuels excluding liquefied petroleum gas (LPG), with compensation measures to protect poor households when prices exceed a certain ceiling (reform measure RSF VII). Rising LPG prices may lead to a switch to polluting cooking fuels such as biomass and kerosene, posing a risk to the already sparse vegetation. This is the reason for its exclusion from the scope of this reform. The government has made a request to the IMF for technical assistance in implementing the automatic mechanism for setting fuel prices and the carbon tax. A request will also be made to the World Bank to integrate into the existing cash transfer system a mechanism for compensating the most vulnerable economic agents when pump prices exceed a certain threshold.
In line with IMF TA, the Council of Ministers will adopt a decree for a new fossil fuel price structure that adjusts automatically to changes in international prices, removes discretionary price setting, phases out subsidies, and includes a price smoothing mechanism
In accordance with its New Electricity Code, the Ministry of Petroleum, Mines and Energy will adopt regulatory decree(s) to (i) provide access for independent power producers to the Mauritanian energy market and (ii) establish a non-discriminatory third-party access to transmission infrastructure owned by the public power utility SOMELEC
RM IX The Ministry of Petroleum, Mines and Energy will adopt a decree requiring mining companies to increase the share of renewable-based electricity generation in their power mix by at least 5 percentage points annually until 2030. The annual objectives not achieved will be subject to a compensatory investment in rural electrification, especially in isolated areas
RM X To reduce GHG emissions from the hydrocarbons production, the Ministry of Petroleum, Mines and Energy will adopt a decree, in line with WB TA, to eliminate routine gas flaring and venting and reduce methane emissions through well-defined sanctions for non-compliance
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34
Moldova, Republic of
MDA
EFF, ECF, RSF
20-Dec-2119-Oct-25R5, R5, R1CR/24/208Upper-middleModerate...NoNoNo-2.6-3.8-1.2-2-2.93232.634.636.4
Transfers to households
11.6131.4YesYesYesNoRM4 outlines that, in addition to the current cost of provision of services, the cost-recovery rate should also reflect the cost of the infrastructure needed to support the developments and reforms identified in the Energy Strategy. The cost-recovery rates should then be compared with actual tariffs and tax expenditures identified, followed by a distributional impact analysis. And any gap between tariff and cost-recovery would then be closed in a transparent way, either through tariff adjustments or subsidies. A key tool for this analysis is the Climate Policy Assessment Tool (CPAT) developed by the IMF. The authorities indicated that the work will likely be finalized slightly later than by the indicative due date.
RM5 aims at ensuring that energy price signals are fully preserved and incentivize efficient energy consumption. A key element is to remove the current untargeted in-tariff subsidies, that do not provide adequate incentives to save energy, and replace them with targeted cash- transfers to households. Although the authorities noted concerns related to political sensitivity and timeline, and to capacity to implement this RM in time, preparations are advancing well, with IMF and WB support. They are now confident to have the necessary legislation adopted by September to roll out the new EVRF support in November, as the new heating season starts. Cash-transfers would be delinked from current energy consumption, and progressive, with poorer households benefitting more.
In light of the important reform initiatives, which will require substantial infrastructure investment, we will determine the cost-recovery rate for the provision of electricity and natural gas (fully reflecting operational and capital costs including for future investments and reforms identified in the Energy Strategy), (i) identifying any discrepancy between tariff and so defined cost recovery, considering tax expenditures, (ii) undertake a distributional impact assessment, and (iii) close any gap by adjusting the tariff or by compensating the operating company transparently from the budget (RM4).
By the third review, based on the results from the ongoing pilot project (supported by the UNDP) collecting information through smart meters, we will conduct a review for tariff differentiation options (e.g., day-night tariff) as a tool for managing demand fluctuations with the aim of facilitating balancing, also in light of renewable energy onboarding (RM6).		.NoYes
A key element is to remove the current untargeted in-tariff subsidies, that do not provide adequate incentives to save energy, and replace them with targeted cash- transfers to households. Although the authorities noted concerns related to political sensitivity and timeline, and to capacity to implement this RM in time, preparations are advancing well, with IMF and WB support. They are now confident to have the necessary legislation adopted by September to roll out the new EVRF support in November, as the new heating season starts. Cash-transfers would be delinked from current energy consumption, and progressive, with poorer households benefitting more.
Yes*NoYesWork is ongoing to set up an inter-agency committee with a mandate to develop, implement, and monitor a National Financial Inclusion Strategy (NFIS) with support from the World Bank (end-June 2024 SB).
Our pension system has significant challenges, including a narrow contribution base, an ageing population, and falling replacement ratios. Beginning January 2024, we have started the review of certain beneficiary groups, and effective July 1st, the retirement age for women will be extended by six months, reaching age 61. In consultation with the World Bank, we intend to continue broadening the contribution base to address sustainability risks. Over the medium-term, we will review the old-age and disability pensions for individuals currently or previously employed, and we will continue to raise the retirement age every six months, for women until reaching age 63 and men age 65.
Enhance social assistance programs. In consultation with the World Bank, we initiated the reform of the Ajutorul Social program which strives to strengthen the support of the most vulnerable families, improve the targeting of social assistance programs, and streamlining other program’s eligibility. We also intend to shift resources from categorical (including ad-hoc categorical payments) to means-tested payments and make remote application to means-tested programs operational. The reform also includes a simplification of the proxy test, clarifying qualification criteria for Ajutorul Social and improving the interoperability of information systems.
We adopted the amendments to the Law on State and Municipal Enterprises in April 2023, with the support of the World Bank. These amendments authorize the owners of the state enterprises to: (i) ensure the adoption by SOEs of a corporate governance code according to the model approved by the Government, and (ii) evaluate the performance of SOE Executive Board members.
From the 2024-25 heating season onwards, we are working in coordination with the World Bank and other development partners, and with the view to ensure that the price signals are fully preserved and incentivize efficient consumption, we will (i) assign the administration of payment provision from energy providers to the Ministry of Labor and Social Protection, and (ii) delink the provision of support under the EVRF from current energy consumption by providing targeted cash transfers to beneficiaries (RM5)		No.YesPrivateAt the same time, we are advancing the energy transition by preparing the energy market and the network infrastructure to facilitate the onboarding of additional renewable resources to reach the NDC target of 27 percent of renewable energy by 2030 (from the current 24 percent). The MoE has published the Indicative timetable for the planned tendering procedures for the offer of large eligible producer status for the period 2024–2025: allocated capacity is Wind—105 MW; Solar—60 MW. In addition, ensuring the financial viability of the sector in light of substantial infrastructure investment needs will help encouraging private investment in the sector.
By the third review, based on the results from the ongoing pilot project (supported by the UNDP) collecting information through smart meters, we will conduct a review for tariff differentiation options (e.g., day-night tariff) as a tool for managing demand fluctuations with the aim of facilitating balancing, also in light of renewable energy onboarding (RM6).		No.No.
Ministry of Energy to determine the cost-recovery rate for the provision of electricity and natural gas (fully reflecting operational and capital cost), (i) identifying any discrepancy between tariff and so defined cost recovery, considering tax expenditures, (ii) undertake a distributional impact assessment, and (iii) close any gap by adjusting the tariff or by compensating the operating company transparently from the budget.
From the 2024-25 heating season onwards, in coordination with the World Bank and other development partners, and with the view to ensure that the price signals are fully preserved and incentivize efficient consumption: (i) assign the administration of payment provision from energy providers to the Ministry of Labor and Social Protection, and (ii) implement further measures to delink the provision of support under the EVRF from current energy consumption by providing targeted cash transfers to beneficiaries.
Based on the results from the ongoing pilot project collecting information through smart meters, Ministry of Energy to conduct a review for tariff differentiation options (e.g., day-night tariff) as a tool for managing demand fluctuations with the aim of facilitating balancing, also in light of renewable energy onboarding.
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35
MoroccoMARFCL, RSF3-Apr-232-Apr-25R0, R0CR/23/142Lower-middle....NoNoNo-4.9-3.81.1-2.6-1.526.926.531.830.2Social benefits0.81.60.8NoNoYesNoA reform of the tax system could help generate resources to fund these needs. Successful reform implementation between 2013 and 2015 eliminated most explicit subsidies on fuels, with the exception of those on gas butane. However, as emphasized in the World Bank CCDR, Morocco still has substantial implicit “brown” subsidies stemming from tax exemptions (mainly VAT- related, see Text Table 1) that generate a non-negligible amount of foregone tax revenue (of about 1 percent of GDP in 2022). A reform of taxation that increases the price of carbon, removes the remaining explicit subsidies on gas butane, and eliminates tax exemptions on fossil fuels, could promote behavioral changes aligned with climate objectives, while also mobilizing fiscal resources that could help reduce public debt and boost investment into adaptation or mitigation strategies.
RM11 mandates the MoEF to issue a ministerial decree that gradually phases out the subsidies on gas butane, starting from 2024.17 Removing these subsidies would generate an important flow of tax revenues and limit the consumption of energy with a high carbon footprint. However, it could also negatively affect private consumption, particularly of poorer and vulnerable households, and induce households and small farmers to adopt less environmentally friendly sources of energy, like coal. To mitigate these risks, RM12 envisages the MoFE to i) expand cash transfers to the most vulnerable households under the new Unified Social Registry and ii) help farmers replace gas butane by adopting solar pumps in small fields irrigation and help households replace gas butane with electricity or solar water heaters. (17: This is part of the announced reform of Morocco's social protection system, whereby all remaining subsidies (on gas butane, wheat, and sugar) are to be replaced with more targeted cash transfers, using the new Unified Social Registry. In 2022, Morocco's subsidies for butane gas reached $2.1 billion (about 1.5 percent of GDP)
Under RM10, the MoEF will introduce in the 2024 Budget Law a reform that gradually eliminates the existing brown tax expenditure, by increasing the tax rate on polluting fuel product.		.NoYes
RM11 mandates the MoEF to issue a ministerial decree that gradually phases out the subsidies on gas butane, starting from 2024.17 Removing these subsidies would generate an important flow of tax revenues and limit the consumption of energy with a high carbon footprint. However, it could also negatively affect private consumption, particularly of poorer and vulnerable households, and induce households and small farmers to adopt less environmentally friendly sources of energy, like coal. To mitigate these risks, RM12 envisages the MoFE to i) expand cash transfers to the most vulnerable households under the new Unified Social Registry and ii) help farmers replace gas butane by adopting solar pumps in small fields irrigation and help households replace gas butane with electricity or solar water heaters. (17: This is part of the announced reform of Morocco's social protection system, whereby all remaining subsidies (on gas butane, wheat, and sugar) are to be replaced with more targeted cash transfers, using the new Unified Social Registry. In 2022, Morocco's subsidies for butane gas reached $2.1 billion (about 1.5 percent of GDP)
NoNoYesBut tackling Morocco’s water challenge also requires demand management policies such as revising current water tariffs, particularly for irrigated agriculture. Water tariffs have been kept artificially low and are not aligned either with cost recovery or the scarce value of the resource. Revisiting current water valuation policies would encourage more rational use, increase the private sector’s willingness to invest in the water sector (including in maintenance), and generate fiscal savings. The Moroccan authorities are beginning to take steps in this direction, recognizing that underpricing water for irrigated agriculture is no longer sustainable.3 The World Bank is providing funding and technical assistance to advance these reforms (see Annexes I, VI).
With the help of the World Bank, the country has developed a DRM system building on innovative schemes, including the Natural Disasters Resilience Fund (FLCN), initially created to finance post-disaster reconstruction, and then turned into a mechanism that co-finances disaster risk reduction and preparedness investments at the local level. It has also strengthened its financial resilience to natural disasters through the establishment of a dual catastrophic risk insurance regime that combines a contributory scheme for insured households managed through private insurers and a public compensation scheme that provides partial compensation to those who are not covered, via a Solidarity Fund Against Catastrophic Events (FSEC).
While Morocco does not have a C-PIMA, a CMAP, or a CCPA, the World Bank comprehensive CCDR report published in 2022 provides the analytical underpinning behind most of these measures.
Pillar 1. Tackling Water Scarcity. The World Bank is helping Morocco improve the governance, efficiency, and sustainability of the water sector with a comprehensive Water Security Operation (see Annex I). Pillar 5: Strengthening Preparedness to Natural Disasters. The World Bank Climate Operation has a series of measures aiming at enhancing Morocco’s resilience to natural disasters, particularly of vulnerable groups (like the rural population) and ecosystems (like oasis and forests) (see Annex I).
Morocco has been closely collaborating with the World Bank for climate policies in the areas of water, electricity, and sustainable development, with the following active climate programs: • Morocco Climate Operation1. The Climate Operation / Support to NDC Program for Results (USD350 million) focuses on operationalizing some of the key recommendations of the CCDR, notably the “whole of government” approach aiming at strengthening coordination mechanisms to address urgent climate and development nexus topics both at national and territorial level. In particular, the Climate operation will mainstream climate considerations into financial sector policies and public finance practices, by using fiscal planning, budgeting, public investment management, and procurement practices as instruments to accelerate the climate transition.2 It also establishes institutional mechanisms to foster an integrated approach to climate and development at the territorial level, with a focus on enhancing the resilience of vulnerable groups and ecosystems. • Public Finance Review: one objective of the ongoing PFR is to assist the Government of Morocco in estimating a) the nature and scale of government spending on water over the past ten years (including CAPEX and O&M), b) the channels through which spending flows and who is involved; and (c) the trends that have occurred in public expenditure programs over the past ten years in selected water sub-sectors. • Morocco Water Security and Resilience Program.3 A US$350 million financing program (Program-for-Results) to support the Government of Morocco in implementing its National Program for Potable Water Supply and Irrigation (PNAEPI, 2020-2027) 4in the context of the 30-year National Water Plan (PNE, 2020-2050). The World Bank Program will contribute to a sub-set of activities included in the PNAEPI through three strategic, mutually reinforcing pillars:
Separating ONEE's generation, transmission, and distribution activities and moving toward the development of the transmission network by creating a national electricity network manager as stipulated by Law 48-15 on electricity sector regulation, with the support of the World Bank and the European Union (EU).
In addition, climate budget tagging currently being implemented with the support of the World Bank and the French Development Agency (AFD), would make it possible to better identify, assess, and monitor climate-related public programs and expenditure and thus optimize available resources and determine the financing needed to achieve the country's climate objectives.
A framework for the issuance of sovereign green bonds, with the support of the World Bank, which could facilitate the issuance of such bonds on the international financial market in a second phase if the conditions are met.		No.YesPrivateAttracting private sector investment in RE would require further progress in reforming Morocco’s electricity market. Until a decade ago, Morocco’s state-owned utility company (Office National de l’Electricité et de l’Eau Potable, ONEE) had a monopoly on the generation, transmission, and distribution of electricity in Morocco. The authorities have long recognized the need to reform the electricity market. The law No 13-09 (amended by the law No 40-19) opened RE production to the private sector; the law 48-15 gave the Moroccan Energy Authority (Autorité Nationale de Régulation de l’Energie, ANRE) the power and resources to regulate the electricity sector; and distribution activities were opened to municipalities and private concessionaires. Still, in addition to keeping the monopoly in transmission, ONEE has remained a key actor in generating and distributing electricity in Morocco. This generates conflicts of interest, making it difficult for private operators to compete and contributing to a lack of investment in RE (CESE, 2020).6 Unbundling ONEE into separate generation, transmission, and distribution companies would allow for greater competition, boost investment in RE, and eventually leads to lower electricity prices.7 A preliminary condition for this separation is the unbundling of the financial accounts of ONEE's electricity transmission business from those of its other businesses. ONEE has started working on a proposal for such unbundling and will send it to ANRE for its approval by early 2025.8 Moreover, despite the few steps taken recently, much remains to be done to allow private operators fair and transparent access to the transmission and distribution networks at regulated tariffs.9 To a certain extent, progress in this direction will require the approval of implementation decrees of the legislation passed over the last decade. (9: 9 These steps include: i) the passing of law 82-21 that allows investors to produce electricity for self-consumption while injecting the surplus in the electricity network, and iii) the publication by the ANRE in 2022 of regulations of the access to the transmission network, and ii) the approval of a decree in 2022 that allows the direct sale of electricity produced via RE to small industrial customers)
RM3 ANRE will publish the tariffs for the utilization of the national electricity transmission network and the system service fees (by Oct 2023) and the capacity of the grid to receive electricity from renewable sources.
RM4 ANRE will publish the tariffs for the access of RE producers to the medium voltage electricity distribution network.
RM12 The Ministry of Economy and Finance will mitigate the impact on the population from measure RM11 by expanding cash transfers under the new Unified Social Registry and helping farmers replace gas butane with solar pumps in small fields irrigation.		No.Yes
RM9 mandates the MoEF to draft and initiate the adoption of a design document for introducing a carbon tax.
ANRE will approve the proposal presented by ONEE on the unbundling of its transmission financial accounts.
ANRE will publish the tariffs for the utilization of the national electricity transmission network and the system service fees (by Oct 2023) and the capacity of the grid to receive electricity from renewable source.
ANRE will publish the tariffs for the access of RE producers to the medium voltage electricity distribution network.
The Ministry of Energy Transition and Sustainable Development will adopt gradually ministerial decrees for the implementation of legislation that regulates the electricity sector (law 48-15, 40-19, and 82-21) (in addition to the two decrees envisaged under the EU Energy Verte program.
ANRE will approve and publish i) quality indicators to be met by the national transmission grid in terms of safety, reliability, and efficiency, to be updated regularly, and ii) the code of good conduct for the Transmission System Operator.
The Ministry of Energy Transition and Sustainable Development will complete the legal framework for energy efficiency by i) adopting ministerial decrees specifying the labeling and minimum efficiency standards for a series of products; ii) preparing a similar ministerial decree on lighting products; iii) adopting the draft ministerial decree on ESCO (Energy Service Companies); and iv) prepare a study and regulatory texts on lowering the threshold of energy consumption associated with the obligatory audit.
The Ministry of Economy and Finance will introduce in the 2024 Budget Law a reform that gradually eliminates the existing brown tax expenditure by increasing the tax rate on polluting fuels products.
The Ministry of Economy and Finance will issue a ministerial decree that gradually eliminates the subsidies on gas butane, starting from 2024.
The Ministry of Economy and Finance will mitigate the impact on the population from measure RM11 by expanding cash transfers under the new Unified Social Registry and helping farmers replace gas butane with solar pumps in small fields irrigation.
36
Mozambique
MOZECF9-May-228-May-25R3CR/24/008LowHigh...NoNoYes-5.2-1.24-2.2224.325.130.828....YesNoNoNo.....NoNoYesThe adoption of the new electronic platform (e-SNIP10) and use of the public investment appraisal manual (Manual Geral de Identificação, formulação e avaliação de Projetos) enables the government to appraise and approve public investment projects. The government continues to strengthen its capacity in planning and selecting projects over time, namely by using criteria relating to the climate-change resilience of infrastructure projects, with World Bank support.
Implementing the Medium-term Debt Strategy (MTDS) would strengthen debt management and budget execution. While the MTDS, developed with support from the IMF and the World Bank, aims to increase the share of external concessional financing, the fiscal slippages in 2022 were largely financed by costly domestic debt.
The World Bank’s Country Climate and Development Report (CCDR) and IMF’s Climate-Public Investment Management Assessment (Climate-PIMA) could help identify policy priorities and potential reforms, informed by national climate priorities and strategies, including Mozambique’s just-announced plan for energy transition by 2050 (which seeks $80bn in investment to boost renewable energy capacity and increase electricity availability).		No.No..No.No..........
37
NepalNPLECF12-Jan-2211-Jan-26R3CR/23/384Lower-middleLow...NoNoNo-1.41.22.6-4.4-1.819.322.125.125.7Social benefits4.14.40.3YesNoNoNo.....NoNoYesA strong potential reform agenda could be combined with concessional climate finance (including from the RST) and be based on the NAP and several recent analytical documents: (i) the Climate-PIMA (2021) includes recommendations on reforms to incorporate climate risk in investment planning; (ii) The World Bank Climate Change Development Report (2022) includes a comprehensive action plan of mitigation and adaptation reforms; and (iii) the 2023 Article IV Staff Report and Selected Issues Paper included a focus on climate adaptation including piloting a new IMF model on climate change and food security.
We are in the process of developing the 16th National Development plan, which will guide our medium-term strategy to enhance governance, social justice, and prosperity, expected to be published in early 2024. Despite recent setbacks, we aim to accelerate the development of the National Social Registry (NSR), including a system of national identification cards, supported by the World Bank.		No.No..No.No.The four priority nonfinancial PEs (Nepal Electricity Authority, Nepal Oil Corporation, Nepal Airlines Corporation and Nepal Doorsanchar Company (Nepal Telecom)) will have their FY2022/23 financial statements.
audited		........
38
NigerNERECF, RSF8-Dec-217-Jun-25R3, R0CR/23/254LowModerate...NoNoYes-5.9-32.9..10.814.124.322.3....YesNoNoNo.....NoNoYesThe USR currently includes 417,000 vulnerable households covering all administrative areas. The authorities plan to expand the coverage of the database to up to 800,000 households by 2024, covering 43 percent of the poor. The authorities are receiving technical support from the World Bank in this area.
The implementation of the "Smart Villages" project, aiming to promote Fintech and digital inclusion in rural areas, is on track with the support of the World Bank. Moreover, the WAEMU’s project on the interoperability of financial systems in the monetary union should help support these actions. To strengthen the resilience of the agricultural and livestock sectors to the negative effects of climate change, feasibility studies for the development of an index-based insurance scheme, covering both sectors, have been prepared with World Bank support.
The authorities have already taken steps to strengthen the DRM framework, including the adoption of a new DRM law supported by the World Bank.
The World Bank is conducting an assessment of prevailing electricity tariffs and of the extent of subsidies in Niger. If tariffs are found to be inadequate and/or subsidies inefficient, prompt action should be taken by the authorities.
Proposed reforms complement the interventions of other development partners. For instance, the World Bank has a large portfolio of operations, provides technical assistance and engages in policy dialogue in the areas of disaster risk management, renewable energy, adaptive social protection, water and integrated landscape management, and climate resilient agriculture and infrastructure.
Moreover, other institutional capacity needs include: (i) the operationalization of the DRM law, notably aspects related to the coordination and implementation responsibilities defined in the law and (ii) the preparation of flood and drought risk assessments in urban areas. Support will be provided by the World Bank through its Integrated Urban Development and Multisectoral Resilience Project (PIDUREM).
To strengthen the agriculture sector's resilience to the adverse effects of climate change, the authorities plan to foster the development of index-based, inclusive insurance – covering the agriculture and livestock sectors – with support from the World Bank.
The government plans to develop a climate investment plan with support from the World Bank, to be financed with domestic and external resources.		YesAn extension of the program is warranted to: i) ensure sufficient time to complete key reforms, notably the implementation of the action plan for the new oil revenue management strategy as well as other domestic revenue mobilization initiatives.
The authorities have prepared a first draft of the oil revenue management strategy and are gathering consensus internally on its key elements, building on advice provided by an IMF capacity development mission.
Growth is expected to remain strong in the near term. GDP growth will be driven by higher crude oil production with the start of exports through the new pipeline and the continued momentum of agriculture and retail trade. It is projected at 7 percent in 2023 and will peak at 13 percent in 2024 driven by the ramp-up of crude oil production and spillover effects on the economy, notably through the transportation sector.
The new oil pipeline should become operational in the last quarter of 2023. The development of the Agadem oil field is advancing well with an initial expansion of production capacity to 90,000 barrels per day projected by late 2023. The construction of the pipeline is completed, and crude oil exports should begin in November 2023. In January 2023, the government of Niger signed a credit convention with the West African Oil Petroleum Company (WAPCO) to set the conditions of the Nigerien State’s participation (at 15 percent) in the funding of the pipeline construction.6
The current account is projected to improve with the onset of crude oil exports. The current account deficit is projected to narrow to 12.2 percent of GDP this year and to 5.2 percent of GDP in 2024 due to the onset of crude oil exports, while capital goods imports associated with the pipeline construction decrease.
The oil revenue management strategy will be adopted before the start of crude oil exports (SB#2 and Annex II). The authorities plan to establish a stabilization fund to mitigate the effects of fluctuations in oil prices on the budget. Staff advised the formal adoption of a non-oil primary fiscal balance target to avoid procyclicality in fiscal policy, but the authorities argued that there is already an overall fiscal balance convergence criterion anchoring fiscal policy at the regional level. In their view, the adoption of an additional fiscal target is unnecessary and would lead to a saturation of fiscal rules. The authorities committed to: i) create a technical committee that will oversee a detailed report on projected revenue streams from crude oil production and exports over the economic life of recoverable reserves and assess fiscal risks (new proposed SB #7); and ii) adopt a decree determining the formula for calculating the reference price for the oil stabilization fund and create a committee of experts to implement the calculation (new proposed SB #10).
Fund resources will be made available entirely in the form of budget support. Financing needs should ease with the favorable economic outlook― when the oil pipeline becomes active―and as program reforms are implemented (Text Table 4)
A 6-month extension of the ECF-supported program to June 2025, a rephasing of disbursements (Table 8a), and modification of performance criteria and indicative targets are requested. The extension is needed on a number of grounds. It will ensure sufficient time to complete key reforms, notably the implementation of the action plan for the new oil revenue management strategy and other domestic revenue mobilization initiatives.
Rising oil production and exports over the next 20 years could pose challenges to the transition towards a low-carbon economy, but the authorities’ determination to fulfill their NDC pledges and implement broader climate policy reforms, as indicated in the World Bank assessment letter, is an important mitigating factor.
The authorities are committed to adopting an oil revenue management strategy by end-September 2023 before start of crude oil exports through the new pipeline (SB#2). The adoption of a fully functioning legal and fiscal framework for oil revenue management is urgent given the completion of the oil pipeline to Benin and the start of crude oil exports in the second half of 2023. Such a framework would help the authorities incorporate the oil revenues in the future budget preparation. To achieve this objective, Niger received IMF support through two capacity development missions to pin down the key aspects of the strategy and elaborate an action plan for its implementation. Following the recommendations of these missions, the authorities have started an inclusive and consultative process involving all relevant stakeholders to build consensus on the key elements of the strategy.
Against this backdrop, the IMF advice has focused on four key pillars to ensure an efficient and transparent management of oil revenues, finance the country’s considerable development needs, mitigate the budget’s dependence on oil revenues, and build fiscal buffers: • Enhance the macroeconomic framework for optimal management of oil revenues by: i) preparing detailed oil revenue projections covering the period of oil production and exports; and ii) assessing the quality of past revenue forecasts and including an analysis of forecast errors in the multi-year budget and economic programming document. • Strengthen the budget preparation and execution processes to account for the challenges of oil revenue management. As far as budget preparation is concerned, actions could include: i) a clear identification of priority spending that needs to be financed with the oil receipts, ii) the tagging of oil-related revenue and expenditure operations in the budget, iii) the increase of the number of feasibility studies for projects before the inclusion in the budget, and iv) the expansion of the double accounting system (AE/CP) to the ministries with a large investment portfolio. Regarding budget execution, the authorities would need to: i) clarify the mechanism for transferring 15 percent of oil revenues to local governments; ii) step up the decentralization of payment orders (especially at the regional level); iii) reinforce the production and coordination of infra-annual expenditure programming tools (procurement plan, sectoral and global commitment plans and cash flow plans); and iv) expand the TSA to local governments. • Establish and implement a stabilization fund and non-oil revenue primary fiscal balance target to mitigate the effects of fluctuations in oil prices on the budget. On the stabilization fund, the strategy will define a reference price to be used for projections, the maximum level of the fund and the time frame for building it, as well as rules for deposits and withdrawals. Regarding the non-oil primary balance target, a flexible fiscal rule could be set at a level that smooths spending and is compatible with the WAEMU 3 percent of GDP fiscal deficit ceiling, even after oil production and exports come to an end. The target would have to be flexible and adjustable and included in the budget law. • Ensure fiscal transparency and accountability by: i) strengthening the disclosure of information on the oil sector through the publication of oil contracts, the procedures for granting oil licenses, and an oil licenses registry; ii) assessing, monitoring, and publishing information on fiscal risks in the oil sector, and the financial statements of SOEs operating in the oil sector in the multi-year budget and economic programming document; and iii) strengthening oversight of oil revenue management by independent entities (e.g., Cour des Comptes, Finance Committee of the National Assembly).
Niger’s risk of external and overall public debt distress is assessed “moderate”—unchanged from the previous DSA published in December 2022.1 A series of shocks, including intensified conflict in the Sahel region and severe climate-related events, required higher borrowing, increasing debt vulnerabilities. Debt indicators remain below their thresholds under the baseline scenario due to the reliance on concessional and semi-concessional financing and prospective robust growth, except for one single year breach in the external of revenue mobilization measures, has increased due to the risk of further tightening of financial conditions in the regional market. Sustainability should be buttressed by the envisaged implementation of the government’s reform program, including efforts to boost domestic revenue mobilization, the onset of crude oil exports via a new pipeline, and the adequate management of oil revenues, as well as prudent public debt management.
The onset of exports through the new pipeline is expected to boost revenue through the government’s minority stake to the project and ramp up the natural resource revenue from 1.9 percent of GDP in 2022 to 4.0 percent of GDP in 2025, supporting convergence to the WAEMU norm of three percent of GDP deficit target by 2025.
Consistency between fiscal adjustment and growth (Figure 4). The projected growth path for 2023 to 2024 is driven by the implementation of large projects, including the onset of the oil export through a new pipeline. In 2023, the onset of the oil exports through a new pipeline contributes to higher growth and higher oil-related revenues, and therefore the impact of fiscal consolidation on growth is likely to be muted.		YesPrivateThe National Support Fund for Small and Medium Enterprises and Medium Industries (FONAP) offers an opportunity to address this gap. The RSF arrangement will support a reform aiming to reinforce services offered by the FONAP through the creation of an additional window to promote the development of renewable energy sector (RM11). The window will aim to provide both technical and financial assistance for the generation of green energy projects, while ensuring their implementation as well.
To accelerate the energy transition, the government plans to foster private-sector participation in the development of renewable energies. A strategy on access to electricity for the period 2018-2035 was adopted in 2018 with the aim of providing all Nigeriens with reliable, affordable, and environmentally friendly electricity. Although the current regulatory framework allows independent power producers to be part of the green energy sector, the private sector contribution remains limited due to lack of experience in this area and limited access to financial resources. Technical and financial support for SMEs wishing to invest in renewable energy production or to adopt clean energies is therefore necessary to step up the development of these various energy sources. For this purpose, the government will create a new FONAP window to support this assistance by end-October 2023 (RSF reform measure 11) by: i) modifying order no. 000084/MF/SG/SE-FONAP dated February, 24 2022 laying down the operating rules and intervention mechanisms of the FONAP to add the above-mentioned window; and ii) elaborating an operational manual for the window. In light of the considerable potential benefits expected from investments in renewable energies in Niger, the measure is also expected to speed the mobilization of green funds to finance the country's adaptation and mitigation policy.		No.No.
Adopt an oil revenue management strategy with technical assistance from the IMF.
Create a technical committee comprising representatives from the Ministries of Petroleum, Planning and Finance responsible for preparing a detailed report on projected revenue streams from crude oil production and exports over the economic life of the reserves recoverable and assess fiscal risks
Adopt a decree determining the formula for calculating the reference price for the oil stabilization fund and create a committee of experts to implement the calculation.
Government to create a new window (“Guichet”) within the FONAP that provides technical and financial assistance for improving the bankability of small and medium enterprises projects as well as their implementation in the field of renewable energy.
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PakistanPAKSBA12-Jul-2329-Apr-24R2CR/24/105Lower-middle..0.70%0.20%NoYesNo-7.8-7.40.4-10.411.412.519.220....YesYesYesNoContaining primary expenditure to PRs 12,912 billion (12.1 percent of GDP) while preserving space for priority social spending. As foreshadowed in the first review, federal PSDP was reduced by PRs 61 billion to offset the SBP profit shortfall and further projected savings (PRs 40 billion) are expected from rationalization of unnecessary subsidies.
Energy sector. The circular debt (CD) stock stabilized in late 2023 and early 2024, secured by continued efforts to bring energy tariffs in line with costs and, in the power sector, continued anti-theft measures. Power CD, at PRs 2.6 trillion (2.5 percent of GDP), has remained broadly flat since October 2023 after some slippage earlier in the fiscal year (due largely to lower-than-expected recoveries following the large annual tariff rebasing in July 2023). In the gas sector, the authorities implemented another significant (24 percent on average) gas tariff increase on February 15. The change maintained a progressive rate structure to protect vulnerable residential consumers; significantly increased and equalized prices for fertilizer companies in the system; and modestly increased prices for captive power and some industrial users.
Power sector: With the April 1, 2024 notification of the delayed Q2 FY24 quarterly tariff adjustment, the continuation of anti-theft efforts, and the release of budgeted subsidies, the authorities should be able to meet their FY24 CDMP target of PRs 2.3 trillion (net zero stock accumulation).6 Timely notification of the FY25 annual rebasing will be critical to the continued prevention of further CD flow, as will further collections efforts, including steps to enhance and institutionalize digital monitoring. In parallel, the authorities should press ahead with agricultural tube well subsidy reform, for which a finalized plan is targeted by end-FY24.
Gas sector: After some delays, the resumption of gas tariff adjustments in line with cost recovery has contributed to a modest decline in natural gas CD, to PRs 2,083 billion (2.0 percent of GDP) as of January 2024.7 Continued timely gas tariff determinations and notifications within the required 40-day window, while protecting vulnerable households, starting with the June 2024 semiannual adjustment, are critical to preventing further CD flow. Price adjustments should continue to move toward the full phasing out of captive power usage this year, with cheaper natural gas prioritized for the most efficient power plants. They should also include efforts to fully equalize gas prices for all fertilizer companies. The authorities signaled an intention to move toward fully implementing a weighted average cost of gas (WACOG) across Pakistan, which would introduce a uniform gas price while helping to ensure cost recovery		.YesYesIn the gas sector, the authorities implemented another significant (24 percent on average) gas tariff increase on February 15. The change maintained a progressive rate structure to protect vulnerable residential consumers; significantly increased and equalized prices for fertilizer companies in the system; and modestly increased prices for captive power and some industrial users.
Pakistan’s progressive energy tariff structure continues to protect the most vulnerable, but in the long term this should be replaced by BISP cash transfers.		NoNoNo.No.Yesn/a
However, restoring energy sector viability requires strong cost-side reforms. This includes (i) continuing efforts underway to improve transmission infrastructure, including for better integration and expansion of renewable energy capacity; (ii) improving DISCO performance via either privatization or long-term management concessions; (iii) moving captive power demand to the grid; (iv) revisiting, where feasible, the terms of power purchase agreements; and (v) continuing to convert publicly-guaranteed PHPL debt into cheaper public debt.
No.No.
Notification of the annual rebasing (AR) for FY24 to take effect on July 1, 2023.
Notification of the December 2023 semiannual gas tariff adjustment determination.
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40
Papua New Guinea
PNGEFF, ECF22-Mar-2321-May-26R2, R2CR/24/231Lower-middleHigh...YesYesNo-12.53.5-1.8117.818.822.120.2
Social benefits [direct social assistance]
00.20.2YesNoNoNo.....NoNoNo.No.No..No.No..........
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ParaguayPRYPCI, RSF19-Dec-2320-Nov-25R3, R1CR/24/200Upper-middle....NoNoNo-1.5-0.11.4-2.50.11414.618.116.5Social benefits2.92.90NoNoNoNo.....NoNoYesThe Superintendency of Banks is currently working with the World Bank to include climate-related risks in the financial sector risk assessment framework with the aim of building capacity of the banking sector to perform financial stress tests for future climate-related shocks.
Furthermore, we are elaborating, in collaboration with the World Bank, specifications for the tender for the first photovoltaic power plant in the Chaco region.
Loss reduction and dynamic electricity rates (RM8). To manage demand and reduce peak costs, ANDE can use price signals to spread demand over different time periods. The aim of RM8 is to develop, publish, and phase in a plan for ANDE’s technical and non-technical loss reduction by November 2024 (reform measure). This work, in collaboration with the World Bank, has progressed significantly.		No.Yesn/a
Non-conventional renewable energy (RM4). To ensure that Paraguay maintains its status as a producer and exporter of clean and renewable energy, in February 2024 the MOPC by the Vice Ministry of Mines and Energy (VMME) enacted the regulations of Law 6977/2023 on non- conventional renewable energies by Decree 1168/2024. This decree establishes the regulatory framework for including alternative sources of renewable energy in the national electric system, incorporating interconnection rules for different types of operators (generators, co-generators, self-generators, and exporters), giving the application authority the power to define the reference rate for Non-Conventional Non-Hydraulic Renewable Energy (ERNC) as the average generation cost component for the corresponding connection voltage level to the National Interconnected System (SIN) that is fed to this system , establishing tax exemptions for key inputs necessary for the installation of solar plants and wind farms, and specifying the permits that will govern the relationship between generators and the state-owned enterprise in the electricity sector (ANDE) (reform measure).
No.Yes
Carbon tax on liquid fuels (RM9). To tackle emissions from the transport sector, RM9 aims to introduce an explicit carbon tax (changing the tax base from liters to carbon content, per ton of CO2 equivalent) on liquid fuels by May 2025 (reform measure). Through RM9, it will be established a carbon tax equivalent to the level of current diesel taxes, which will also apply to gasoline and liquefied petroleum gas (LPG). Selective taxes on the consumption of gasoline and LPG will be reduced so that the total effective tax rate imposed on each one does not change. The carbon tax rate will be reviewed and adjusted according to the result of a technical analysis published by the MEF and BCP. This analysis will be conducted periodically to assess changes in the tax, conditional on the state of macroeconomic variables and the initial carbon price when the policy was originally implemented. The tax will be set in consultation with IMF staff.
MOPC and VMME to enact regulation of the non-conventional renewable energy law 6977/2023, including (1) the specification / rationalization of economic incentives, (2) technical aspects (i.e., requisites to connect to the national interconnection system, detailed criteria for licenses, and conditions that would enable an effective development of non-hydro non-conventional renewable energy through all the defined players (generators, co-generators, self-providers, and exporters)).
ANDE to publish an external audit and a study of international benchmarks for its costs at different segments of its operations and efficiency parameters by an internationally reputed firm.
ANDE to develop, publish, and gradually adopt transparent and well-specified methodologies for adapting electricity tariffs in line with Law 966/64, accounting for operating costs, the financial costs of projected capital spending needs for preserving and expanding the clean electricity matrix, and efficiency gains on the basis of the results of the external audit and study by an internationally reputed firm (RM5), and the evolution of losses according to the plan in RM8.
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42
RwandaRWA
PCI, RSF, SCF
12-Dec-2211-Dec-25R3, R3, R1CR/24/141LowModerate...NoNoNo-7.6-5.22.4-12.7-6.822.623.61917.6Social benefits0.30.30NoNoNoYes
In line with our commitment under the RSF program to transition to a green economy, we will refrain from providing any subsidies on fuel prices going forward and, instead, will support poor and vulnerable households through other targeted measures as the need arises. In April 2023, we phased out a subsidy on diesel that was introduced in October 2022, and we have since allowed domestic prices to reflect the international market price of fuel. To recoup the losses from this temporary subsidy, we introduced a stabilization fee on petroleum prices. All losses from the previous policy have been recouped and the current prices are fully in line with market prices. On March 16, 2024, we also discontinued the pandemic-era subsidy on public transportation services.
.NoYes
In line with our commitment under the RSF program to transition to a green economy, we will refrain from providing any subsidies on fuel prices going forward and, instead, will support poor and vulnerable households through other targeted measures as the need arises.
NoNoYesThe measures for additional cost-savings and efficiency gains include rationalization of subsidies, particularly those related to export promotion, and digital delivery of public services, based on recommendations from the World Bank’s Public Expenditure Review (PER) and the IMF’s Public Investment Management Assessment (PIMA).
Following the incorporation of all key ownership principles in the revised National Investment Policy, the draft Privatization Law and Policy, supported by the World Bank, has been passed by Parliament and expected to be enacted by July 2024.
Following the incorporation of all key ownership principles in the revised National Investment Policy, the Privatization Law (supported by the World Bank) has been adopted by Parliament and expected to be enacted by July 2024. The draft Presidential Order, being prepared in consultation with the World Bank, will determine the prerequisites for establishment of an SOE and the rules of its management.
Female access to finance. The NBR, with support from the World Bank, Women World Banking Leadership and Diversity, and the Alliance for Financial Inclusion, developed guidelines for women’s financial inclusion for the financial sector to move the financial system from a gender aware system to a gender transformative system.
With support from the World Bank and development partners, we are working to reduce tariff and non-tariff barriers and seize opportunities for Rwandan exporting firms stemming from the AfCFTA preferential market access.
Finally, in September 2023, Cabinet approved a carbon market framework, developed with the support of the World Bank and the UNDP that establishes a regulatory framework for accessing international carbon markets.		No.No..No.No..........
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SenegalSEN
EFF, ECF, RSF
26-Jun-2325-Jun-26R1, R1, R1CR/23/435Lower-middleModerate...NoNoYes-4.9-31.9-2.3-0.721.223.126.126.1Social benefits0.30.30YesYesNoYesSpending: Primary recurrent spending is projected to decline by 1.6 percentage points of GDP to 14.7 percent of GDP in 2024. This reduction is primarily driven by a fall in energy subsidies to around 1 percent of GDP. Staff urged the authorities to stand ready to increase energy prices in 2024, as needed, in case the 2024 energy subsidy envelope is insufficient. Public wage expenditures and spending on goods and services are expected to remain at around 6.8 percent and 2 percent of GDP, respectively.
The authorities remain committed to implementing the energy subsidies reform roadmap, which was adopted in January 2023. This roadmap is centered on two main pillars: firstly, better reflecting international prices into domestic ones by gradually phasing out untargeted subsidies; secondly, improving targeted transfers to protect the most vulnerable from the effect of rising energy prices. Reforms in these areas are progressing steadily: • An independent committee has been established to determine and publish final consumption prices for fuel and electricity (structural benchmark, November 2023). To ensure that international price fluctuations are accurately reflected in domestic prices, the government has pledged to uphold the committee’s pricing decisions (MEFP ¶14). • A comprehensive review of the current pricing formula for petroleum products (gasoline and diesel) is underway to ensure that pump prices accurately reflect international market developments. This revision will encompass: (i) a thorough examination of the various components of the price structure; (ii) a reevaluation of the reference price; (iii) the implementation of a gradual price adjustment mechanism to minimize abrupt price swings; and (iv) a reassessment of the frequency of price adjustments (structural benchmark, December 2023) (MEFP ¶16). The authorities have sought technical assistance from the IMF in this area. • The government is committed to proposing and introducing a new electricity tariff structure that incorporates a social tariff specifically designed for vulnerable groups (new structural benchmark, September 2024) (MEFP ¶29). The authorities have also requested technical assistance from the World Bank to finalize an audit of the electricity company (SENELEC) (new structural benchmark, May 2024), which will help obtain an updated assessment of the sources and structure of both variable and fixed costs in the electricity sector (MEFP ¶29).		2.60%YesYesThe savings from lower energy subsidies will be redirected to expand social protection programs and increase priority public investments, with a focus on reducing disparities between cities and rural areas, acquiring agriculture inputs, improving access to water and electricity, and expanding transport networks. (MEFP ¶26
• The government is committed to proposing and introducing a new electricity tariff structure that incorporates a social tariff specifically designed for vulnerable groups (new structural benchmark, September 2024) (MEFP ¶29). The authorities have also requested technical assistance from the World Bank to finalize an audit of the electricity company (SENELEC) (new structural benchmark, May 2024), which will help obtain an updated assessment of the sources and structure of both variable and fixed costs in the electricity sector (MEFP ¶29).		NoNoYesThe authorities have also requested technical assistance from the World Bank to finalize an audit of the electricity company (SENELEC) (new structural benchmark, May 2024), which will help obtain an updated assessment of the sources and structure of both variable and fixed costs in the electricity sector (MEFP ¶29).
Progress is also being made in fully implementing the new Urban and Construction codes, taking climate change into account. The draft codes were submitted to the National Assembly in October 2023, and the implementation decrees are expected to be finalized by the end of April 2024, in close collaboration with the World Bank.
RM5 Adopt an electricity tariff adjustment plan based on the results of the financial audit of Senelec, which is conducted with the support of the World Bank, with the aim of phasing out electricity subsidies by 2025.
Propose the new electricity tariff structure to CRSE by introducing a social rate applicable to the vulnerable segment of the population and smoothing mechanisms to avoid high fluctuations (new structural benchmark, September 2024). To implement this measure, the government requested technical assistance from the IMF and the World Bank.		Yes
The authorities have made significant strides in establishing the foundation for the management of hydrocarbon revenues in anticipation of the start of oil and gas production. They have successfully concluded the development of the legal and institutional framework pertaining to the management of oil and gas revenues and are committed to the full enforcement of the corresponding legislation, as stipulated in Law No. 2022-09. Within this framework, two implementation decrees have been adopted to clarify the institutional structure governing the Stabilization Fund (issued in September 2023) and the Inter-generational Fund (issued in October 2023). Furthermore, the authorities have initiated the formulation of an investment strategy that will dictate the utilization of resources from the intergenerational fund. (IMF CD to strengthen the macro-fiscal framework for the management of hydrocarbon revenues)
No..No.No.
Put in place an independent body with the mandate to regularly determine and publish petroleum product prices, based on the revised petroleum product pricing formula, including the frequency of adjustment and the related smoothing mechanism
Revise and publish the current pricing formula for petroleum products (gasoline and diesel) to ensure that prices at the pump reflect developments in international markets. The revision will cover: (i) the various elements of the price structure; (ii) the reference price, (iii) a gradual price adjustment mechanism to avoid large variations, and (iv) the frequency of price adjustments
Finalize the financial audit of SENELEC with a view to revising the maximum authorized revenue (RMA ) formula with a view to better understanding the structure of Senelec's variable and fixed costs and its impact on the cost of electricity production
Propose a new electricity tariff structure by introducing a social tariff applicable to the vulnerable segment of the population
Adopt an electricity tariff adjustment plan based on the results of the financial audit of Senelec, which is conducted with the support of the World Bank, with the aim of phasing out electricity subsidies by 2025.
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44
SerbiaSRBSBA19-Dec-2218-Dec-24R3CR/24/202Upper-middle...0.40%NoYesNo-3-2.20.8-1.5-0.243.343.346.445.5....NoYesYesNoEnergy SOE finances have improved. The electricity utility Elektroprivreda Serbije (EPS) and the natural gas utility Srbijagas benefitted from tariff hikes agreed under the program, lower energy import prices, and improved supply conditions.
EPS finances have improved, and further reforms to its pricing systems aim to underpin the company’s financial sustainability and support investment needs. EPS is developing a new electricity pricing system for the non-regulated sector (mostly firms), to become effective November 1, 2024 (end-August 2024 SB). Starting from May 1, 2024, the authorities replaced the fixed electricity price for the non-regulated sector, introduced during the energy crisis, with pricing that follows pre-energy crisis market-based methodology. As a result, average EPS electricity supply tariffs fell reflecting the decline in regional electricity prices. Should regional electricity prices decline further, there is a risk that average electricity tariffs may fall below cost-recovery levels absent higher tariffs for the regulated sector (mostly households). The authorities are, therefore, developing a holistic electricity pricing system for regulated and non-regulated sectors that aims to address these risks.
Srbijagas agreed to finalize its new gas pricing methodology to support its long-term financial sustainability and its investment needs. After removing gas price controls for the non-regulated sector on May 1, gas prices for this consumer segment (mostly firms) returned to the pre-energy crisis gas pricing methodology, and gas prices fell as a result. Non-regulated tariffs now reflect gas import costs plus an average margin of about 5 percent. To ensure the long-term financial sustainability of Srbijagas, a higher average margin is likely needed, especially given large infrastructure investments needs. The authorities agreed to review the margin and to increase it as needed. This review will help update the pricing methodology for the non-regulated sector, to come into effect on August 1, 2024 (proposed new end-July 2024 SB).		.NoNo.NoNoYes
We remain committed to further modernizing our tax administration in line with our 2021–25 Transformation Program. This program provides strategic guidance in modernizing the tax administration by increasing our use of electronic business processes, improving taxpayer services and fostering a risk-based approach to compliance. Our reforms will reflect the updated Tax Administration Diagnostic Assessment Tool (TADAT) review and will continue to be supported by IMF TA and the World Bank Tax Administration Modernization Project.
No.No..No.No.
Adopt by the General Assembly of EPS a restructuring plan for EPS.
EPS to approve a new electricity supply pricing system for the non-regulated sector, which will become effective with the consent of the General Assembly of the EPS as of November 1, 2024.
Approve by the government a new gas pricing system for the non-regulated sector, which will become effective as of May 1, 2024.
Srbijagas to revise methodology for gas price calculation for the non-regulated sector to reflect the results of the analysis of margin adequacy to accommodate planned investment in gas sector infrastructure (effective August 1, 2024).
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SeychellesSYCEFF, RSF31-May-2330-May-26R2, R2CR/24/191High....NoNoNo0.2-0.8-11.71.631.533.733.635.2
Social program of central government
0.80.90.1YesNoNoNo.....NoNoYesTo increase transparency on foregone revenues, a full report of tax expenditures on VAT and business tax and their cost in terms of foregone revenue is expected by December 2024 (SB). A World Bank-supported review to identify potential audits related to transfer pricing is ongoing and expected to be completed by June 2024.
An expenditure review of the education and health sectors by the World Bank is anticipated by June 2024 to identify essential business needs and redundant positions.
With support from the World Bank, the government is working to address weaknesses in social targeting.
In light of the decline in the number of beneficiaries in the social welfare assistance (SWA) program, the World Bank assisted the Government with conducting a survey amongst past and present beneficiaries of social welfare programs.
The World Bank is also assisting with the public expenditure review for the education and health sector and the results are expected by June 2024.
Seychelles undertook its first Public Investment Management Assessment (PIMA) and Climate PIMA (C-PIMA) assessment during the first quarter of 2023 with the assistance of the IMF’s Fiscal Department and the World Bank.		No.YesPrivateRenewables will be at the center of economic recovery strategies to advance economic, social and climate priorities for a sustainable post-covid recovery. The government will scale-up renewable energy investment through the new Electricity Act and Utilities Regulatory Commission Act and their respective operating regulations and will use this opportunity to increase private sector climate investment through innovative approaches such as distributed electricity generation and renewable energy independent power producers (IPPs). The government will ensure that legal frameworks to support rates determination under various schemes to promote adoption of renewable energy technologies, either at a distributed generation level or at utility-scaled systems (Independent Power Producers, IPPs), and a framework for multi-year electricity tariff system are in place for effective implementation (Reform Measure for end-April 2025). Work on these legal frameworks has already started and together with the recently approved Electricity and Utilities Regulatory Commission Bills will contribute to the transformation of the electricity sector into a low-carbon one.
The government will introduce additional green fiscal incentives to promote climate resilience and environmental sustainability. There are currently several fiscal initiatives that are in place. Goods imported to be used in the process of “conservation, generation or production of renewable energy or environment friendly are exempt from the payment of Value added Tax. The photovoltaic (PV) financial rebate scheme launched in May 2014 has been put in place as an incentive to encourage residential and commercial premises to install PV systems connected to the national electricity grid on their rooftop to power their homes and businesses. Resources for this scheme have been exhausted and expected to be replenished in 2024. In addition, all duties including environment levy were removed on electric vehicles in 2015. Further incentives are being worked on to encourage the importation and use of electric and hybrid vehicles. The government will review its fiscal regime and introduce other incentives to promote climate change and environmental related investment (Reform Measure for end-March 2026). Potential measures fiscal measures include congestion fees, feebates, environmental levy, and/or price incentives for waste reduction as well as new tax schedule to support the development of utility-scaled renewable energy plant based on an Independent Power Producer (IPP) model. Funds for additional support for green finance initiatives between 2025-2027 are SR 90m, this is under the social programmes of government and will be targeting individuals.		No.No.
To scale-up renewable energy in the context of the new Electricity Act and the NDC, (i) the Utility Regulatory Commission (URC) adopts and implements a rates determination framework for renewable energy sources under the net billing and gross metering schemes and publishes the cumulative installed capacity of distributed renewable energy in accordance with the Distributed Generation System Regulations, (ii) the Ministry of Agriculture, Climate Change, and Environment (MoACCE) adopts a Power Procurement Plan from independent power producers (IPPs) that is consistent with the Integrated Electricity Plan, and the URC approves a competitive selection process for renewable energy IPPs in accordance with the IPP Regulations, and (iii) the URC approves an implementation framework for a multi-year tariff system for end-use electricity tariffs that are cost-reflective and publishes tariff trajectory in accordance with the Electricity Tariff Setting Regulations.
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SomaliaSOMECF19-Dec-2318-Dec-26R1CR/24/158LowModerate...NoNoYes0-1.9-1.9..6.34.86.36.7Social benefits1.21.20NoNoNoNo.....NoNoYesThe development of the Integrated Tax Administration System (ITAS) is being supported by the World Bank, though is still in early stage.
The currency exchange project, which is being supported by the World Bank, will reintroduce Somalia Shillings (SOS) as legal tender by replacing old and counterfeit notes in circulation.
Following enactment of the Audit Law in 2023, efforts are ongoing to enhance capacity of the Auditor General’s Office, with support of the World Bank.
To strengthen food systems and build climate resilience, the authorities launched a Food Security Crisis Plan in December 2023, which will be implemented in partnership with the World Bank.
The Gargaara program, with World Bank support, continues to support access to financing for micro, small, and medium-sized enterprises.
We are implementing a social safety net scheme—Baxnaano—with the support of the World Bank and using the systems of the World Food Program.		YesThe authorities continue building capacity on petroleum sector issues. Progress is being made on developing regulations for the Extractive Industries Fiscal Regime Law, with IMF CD support, and for the Petroleum Act. The Prime Minister has indicated that the production sharing agreements (PSA) signed in March 2023—based on direct negotiations with a private firm that holds a seismic option agreement from 2013—will only be valid once they go through the proper legal process, including review by the Inter-Ministerial Concessions Committee (IMCC) to ensure that they are in line with the 2021 model PSA and the legal framework.
For the petroleum sector, the authorities should continue building capacity and ensure implementation of the established legal framework.		No..No.No..........
47
Sri LankaLKAEFF20-Mar-2319-Mar-27R2CR/24/161Lower-middle....NoNoNo-8.3-4.14.20.62.311.115.419.419.5
Social safety net transfers
0.70.70YesYesNoYesTax policy measures and expenditure restraint have underpinned a sizeable adjustment and cost-recovery energy pricing was adopted.
More vigilance is needed to maintain cost-recovery pricing and manage fiscal risks from the CPC and Ceylon Electricity Board (CEB). After introducing cost-recovery energy pricing in 2022, CPC and CEB made profits in 2023. A large downward revision of electricity tariffs (21.9 percent on average) on March 5 should maintain cost recovery on a forward-looking basis, given the projections of hydro power usage, favorable exchange rate and interest rate developments.
We will continue to set retail fuel prices to their cost-recovery levels on a monthly basis using the formula and will compensate the CPC for providing any residual fuel subsidies with on- budget transfers (continuous structural benchmark).
Electricity sector reform. Following the adoption of cost-recovery tariff adjustment, structural reforms in the electricity sector should be pursued with technical support from development partners to reduce Sri Lanka’s high electricity cost and address large investment needs in generation and transmission. These reforms will facilitate financing of renewable energy projects, which would strengthen competition in the energy sector and put further downward pressure on costs.
To mitigate fiscal risks arising from the energy SOEs, we will continue implementing automatic fuel and electricity pricing mechanisms. Since November 2022, retail fuel prices have been adjusted monthly in line with cost-recovery, and CPC has been consistently profitable. CEB recorded a cumulative profit of Rs 61 billion in 2023. Part of these profits was used to repay Rs 40 bn of CEB’s debts.
We will maintain the electricity tariff at its cost-recovery level (overall across different types of final consumers) with quarterly formula-based adjustments on a forward-looking basis in January, April, July and October each year (effective from January 1, April 1, July 1, and October 1, respectively); the CEB will submit tariff revision requests to the Public Utilities Commission of Sri Lanka (PUSCL) by end-October (for January tariff revisions), by end-January (for April tariff revisions), by end-April (for July tariff revisions) and by end-July (for October tariff revisions). We will compensate the electricity sector for providing any residual electricity subsidies with on-budget transfers; and we will use tariff surcharges in the periods between revisions to restore cost recovery in case CEB is making losses (continuous structural benchmark). We will monitor CEB’s financial performance on a continuous basis and stand ready to increase the tariff as soon as losses emerge, to avoid any additional burden for the central government budget. Later in 2024, we will undertake the dispatch audit of the CEB’s operational costs, which would assess the scope for efficiency gains in electricity generation and transmission.		.YesNo.NoNoYesIn addition, strengthening project selection processes and implementing the recommendations of the forthcoming Public Finance Review by the World Bank (WB) are critical to raise public investment efficiency.
We are drafting the SOE law with assistance from the World Bank, which will incorporate many of these transparency and governance requirements.		No.No..No.No.
Set retail fuel prices to their cost-recovery levels with monthly formula-based adjustments, and compensate the CPC for providing any fuel subsidies with on-budget transfers
Maintain cost-recovery level of the end-user electricity tariff schedule (overall across different types of final consumers) with quarterly formula-based adjustments, on a forward- looking basis in January, April, July and October each year (effective from January 1, April 1, July 1, and October 1 respectively); the CEB submits tariff revision requests to the Public Utility Commission of Sri Lanka by end-October (for January tariff revisions), end-January (for April tariff revisions), end-April (for July tariff revisions) and end-July (for October tariff revisions); compensate the electricity sector for providing any residual subsidies with on-budget transfers; and use tariff surcharges in the interim, in case CEB is making losses
Cabinet approval of a comprehensive strategy to restructure the balance sheets of the CEB, CPC, Sri Lankan Airlines, and the Road Development Authority, in consultation with IMF staff
Improve the BSTA to accurately measure the electricity subsidy and start using it to determine the cost-recovery based electricity tariff and government transfer requirement
Cabinet approval of quarterly revisions of electricity tariffs, starting in 2024
Fully operationalize the BSTA by adopting the rule requiring the regulator to use it to determine the cost-recovery based electricity tariff and government transfer requirement
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SurinameSUREFF22-Dec-2131-Mar-25R4CR/24/006Upper-middle....YesYesNo-5.7-0.25.5-0.53.526.425.832.126.1
Cash transfer programs
1.531.5YesYesYesYesDespite a very challenging socio-political environment, the authorities have been able to implement difficult reforms, including the elimination of fuel subsidies, increases in electricity tariffs, expanding the VAT base, and issuing regulations to curtail wage payments to public servants that are unregistered or chronically absent.
The authorities are implementing a range of revenue and expenditure measures including: … Fuel taxes. In March, fuel subsidies were discontinued, and fuel prices are now determined by an automatic pricing mechanism based on international prices. In May, the government reinstated specific taxes on fuel of SRD 3.50 per liter, which is expected to generate 0.7 percent of GDP in revenue in 2023.
Electricity subsidies. In June, the government approved a schedule of tariff adjustments, which included an immediate 28 percent increase in average electricity tariffs, and further increases in Q3 and Q4 by 42 percent and 21 percent respectively. Lump-sum billing discounts have been phased out at end-November 2023.7 Tariffs will be adjusted again effective January 2024, and quarterly going forward to reach cost-recovery by end-2024.8 To promote transparency and accountability, the Energie Autoriteit Suriname has published on its website a quarterly update of the tariffs for each consumer group, the rationale for any adjustment, the estimated cost of providing electricity, and the remaining size of the subsidy (end-October SB, met).
Liquified petroleum gas subsidies. In August, the government announced a schedule of price increases for liquified petroleum gas (LPG) to phase out LPG price subsidies. In September, LPG prices increased by around 425 percent, reducing the subsidy to 55 percent of the cost. Prices will further increase by a fixed amount each quarter beginning in December 2023 yielding full year savings of 0.2 percent of GDP in 2024.		3.90%YesYes
Cash transfers. To protect the poor from the brunt of fiscal adjustment (and particularly the elimination of a range of subsidies) cash transfers under the traditional social protection programs have been increased.9 The government is working with the ILO and IDB on a time-bound strategic plan to improve the efficiency and effectiveness of social benefits (end-Dec 2023SB).10 To improve transparency, the government will begin to publish on the Ministry of Social Affairs and Housing’s external website a monthly report detailing the number of households or individuals covered by each social program in each district, along with the value of cash transfers made to recipients in each district (new proposed end-January 2024 SB). [projected 1.5% increase in social programs spending across the program]
YesNoNo.No.No..No.No.
Publish the financial assessment of EBS that includes its legacy liabilities. (Achieve full cost recovery in the electricity sector)
Publish on the EAS external website quarterly updates of the rationale for each tariff adjustment, the estimated cost of providing electricity, and the remaining size of the subsidy.
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TanzaniaTZAECF, RSF18-Jul-2217-May-26R3, R0CR/24/187Lower-middleModerate...NoNoYes-4.3-2.71.6-2.2-0.314.916.519.219.2....YesYesNoNoAchieving the authorities’ ambitious climate mitigation goals requires ensuring that sectoral climate policies are mutually consistent and aligned with national climate commitments. The RSF will support the authorities to develop a long-term power sector plan that is aligned with climate mitigation goals and coordinated with the long-term plans of other sectors, including agriculture and water (RM8, MEFP¶52). Establishing and implementing a methodology for adjusting electricity tariffs to the cost-recovery rates (reflecting operational and capital cost of the energy transition), while protecting poor and vulnerable groups, (RM9, MEFP¶52) would facilitate the authorities’ energy transition plan.
Efforts will be geared to ensuring that sectoral climate policies are mutually consistent and aligned with national climate commitments. We will develop and start implementing a long- term power sector plan that is aligned with climate mitigation goals and coordinated with the long- term plans of other sectors, including agriculture and water by end-September 2025 (RM8). To support our energy transition plans and to ensure that critical investments needed for energy transition will be funded sustainably, we will determine the cost-recovery rate for the provision of electricity (fully reflecting operational and investment cost, including for energy transition), and establish and start implementing a methodology for adjusting electricity tariffs to the identified cost-recovery rates, with transparent periodic adjustments while protecting poor and vulnerable groups by end-March 2026 (RM9). To allow sufficient time for establishing the methodology for adjusting electricity tariffs, the cost of services assessment and determination of cost-recovery rate will be completed by March 2025. These measures will be critical for our energy sector reform plans and to ensure the financial sustainability of our power sector and enhancing prospects for important private sector investment in power generation, which will be critical for achieving our transition objectives.		.NoYes
Establishing and implementing a methodology for adjusting electricity tariffs to the cost-recovery rates (reflecting operational and capital cost of the energy transition), while protecting poor and vulnerable groups, (RM9, MEFP¶52) would facilitate the authorities’ energy transition plan.
YesNoYesCoordination with the World Bank focused on alignment with the CCDR assumptions and providing TA support in the areas of disaster risk financing, social safety nets, and power sector reforms.
The World Bank conducted a Country Climate and Development Report (CCDR) for Tanzania and is supporting Public Finance Management (PFM) and climate sensitive public investment management. Reforms to strengthen Disaster Risk Management (DRM), including through social protection, have been supported by various DPs including the World Bank and United Nations agencies such as WFP and UNICEF.
The World Bank under the fortcoming CAT DDO is supporting the revision of EMA to anchor a carbon trading mechanism. SIDA (Sweden) is supporting the authorities’ efforts in the implementation and assessment of the Environmental Management Act.
The World Bank, in the context of the CAT DDO engaged in vulnerability risk assessments for Zanzibar and Dar Es Salaam and could assist the authorities in expanding this work to vulnerable parts of Tanzania's territory.
The World bank and WFP TA. The World Bank and WFP are cooperating to support the authorities with the design, implementation, and financing of the PSSN program. Expansion of the coverage of the register and shock responsive benefit design are envisaged for the next phase of the PSSN program and will be supported by the Bank and the WFP (RM4. Expand the Productive Social Safety Net (PSSN) register to include households who could fall under the extreme poverty line if climate and disaster risks materialize.)
The World Bank TA. The World Bank has a long- standing engagement, supporting energy sector related policy discussions and activities in Tanzania, including for power sector transition. (RM8. Present and implement a long-term power sector plan that is aligned with climate mitigation goals and coordinated with the long-term plans of other sectors, including water and agriculture)
The World Bank TA. The World Bank has undertaken some economic and financial assessments of the energy sector and engaged with the authorities on supporting a cost-of-service assessment for the national power company. Other development partners including AFD, EU, JICA, and USAID are also providing assistance in this area. (RM9. To support energy transition plans: (i) determine the cost-recovery rate for the provision of electricity (fully reflecting operational and investment cost of the energy transition); and (ii) establish and implement a methodology for adjusting electricity tariffs to the identified cost- recovery rates, with transparent periodic adjustments while protecting poor and vulnerable groups.)		No.No..No.YesSimilarly, introducing an environmental tax on domestic consumption of sources of carbon emissions (including coal and natural gas), while protecting poor and vulnerable groups, would help reduce GHG emissions (RM10, MEFP¶52). In addition to their climate change benefits, these measures could also improve public finances and enhance debt sustainability.
In the energy sector, introducing an environmental tax on the domestic consumption of the sources of carbon emissions, including coal and gas, as proposed under RM10, would help reduce GHG emissions and improve public finances and enhance debt sustainability. In this regard, the IMF CPAT tool is used to illustrate the expected impact of introducing a USD 5 per tCO2 carbon price imposed in 2025 and increasing linearly to USD 25 per tCO2 by 2030 on coal and natural gas—the two fuels with very low effective tax rates in various sectors in Tanzania (Box 1). The illustrative results show that energy-related CO2 emissions would fall between 5 and 6 percent compared to the baseline in 2030. The revenues collected compared to the baseline could reachUSD 0.4–0.7 billion depending on passthrough constraints in the power sector.Regarding the distributional effects of the carbon tax, government transfers to vulnerable households, using 30 percent of the revenue raised, would alleviate the tax burden on poor households. Under RM10, IMF TA is envisaged to help the authorities determine the level of environmental taxes consistent with Tanzania’s decarbonization commitments in the NDC, taking into account other sectoral mitigation efforts.
RM10. Apply an environmental tax on domestic consumption of sources of carbon emissions (including coal and natural gas) tailored to Tanzania’s circumstances and in line with IMF technical assistance and consistent with Tanzania’s commitment under the NDC.
Present and implement a long-term power sector plan that is aligned with climate mitigation goals and coordinated with the long-term plans of other sectors, including water and agriculture
To support energy transition plans: (i) determine the cost-recovery rate for the provision of electricity (fully reflecting operational and investment cost of the energy transition); and (ii) establish and implement a methodology for adjusting electricity tariffs to the identified cost-recovery rates, with transparent periodic adjustments while protecting poor and vulnerable groups.
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TogoTGOECF1-Mar-2431-Aug-27R0CR/24/079LowHigh...NoNoNo-4.8-31.8-3.9-0.718.419.123.322.1....YesYesNoYesThe authorities will make efforts to limit fuel, electricity, and water subsidies. In February 2024, they will adopt a largely automatic fuel price smoothing mechanism4 and associated fuel price stabilization fund (MEFP paragraph 18). The mechanism should help reduce the fuel subsidies over time. While the authorities have kept projections for fuel subsidies for the coming years constant in nominal terms at their 2023 level out of caution, subsidy spending should be lower already in 2024. Further, the authorities are reviewing electricity and water subsidies with the help of the World Bank.
The authorities’ spending plans balance the goals of effecting priority spending (for security, social, investment, and banking sector repair purposes) and enabling consolidation. Current spending is projected to ease from 15.2 percent of GDP in 2023 to around 14.9 percent of GDP in 2024-27 reflecting restraint on the wage bill, the purchase of goods and services, and fuel subsidies.		.YesYes
The authorities should further develop a solid strategy for raising social and pro-poor spending and enhancing the social safety net. The authorities may wish to consider raising targeted cash transfers even more than currently envisaged, given the favorable international experience with such transfers. Targeted cash transfers can also facilitate the reform of fuel, electricity, water, and other subsidies by protecting the poorest against the impacts of subsidy reductions. To provide a secure basis for expanding targeted transfers to the poor, the authorities should bring their efforts to establish the social register and the biometric ID to a timely conclusion.
NoNoYesFurther, the authorities are reviewing electricity and water subsidies with the help of the World Bank.
Further, with World Bank support, they will publish information on bidders and final investors of bond issuances on the regional debt market.7 7 This is a performance and policy action for FY2024 under the World Bank’s Sustainable Development Finance Policy.
Burden sharing. The program will benefit from strong technical and financial support from other development partners. The World Bank has increased its budget support for 2024, helping the authorities maintain social and pro-poor spending in the face of fiscal consolidation.
Create a single social register and establish a biometric identification platform (by end-December, Table 3, SB 2.2): With the support of the World Bank, we have launched a biometric identification program, and we commit to ensuring that at least 60 percent of residents in Togo have biometric proof of identity by end-June 2024. The combination of the biometric identification platform and the creation of a single social register will strengthen our ability to expand targeted cash transfers for the most vulnerable households going forward.
We are also working with the World Bank to identify ways for improving the targeting of water, electricity, and agricultural subsidies and/or for replacing these subsidies with targeted cash transfers, all while ensuring that water and electricity tariffs remain affordable and while seeking budget savings.		No.No..No.No..........
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UgandaUGAECF28-Jun-2127-Jun-24R5
CR/24/077
LowModerate...NoNoYes-7.6-3.64-4.6-0.414.11621.519.7
Social spending (excluding external financing)
3.73.3-0.4YesNoNoNo.....NoNoYesStreamlining tax expenditures (TEs) with the help of the newly adopted tax expenditure rationalization framework, remains a key priority. This is a critical component of the DRMS as corporate income tax and VAT regimes are characterized by numerous taxexpenditures. With capacity development from the IMF and the World Bank, we have made progress in TE reporting, having established benchmarks and inventories for each major tax category and produced regular annual TE reports for all years since 2015/16.YesGrowth is projected to reach 6 percent in FY23/24 benefiting from favorable weather conditions, construction and investment in the oil sector, subdued inflation, and positive impacts from the roll-out of the Parish Development Model (MEFP ¶17). Exports are expected to recover further amid robust coffee and gold trade, while imports are likely to remain elevated reflecting large investments associated with the oil project. Over the medium term, growth is projected to return to its pre-pandemic trend of 6-7 percent boosted by oil production (Text Figure 5). The East Africa Crude Oil Pipeline (EACOP) project is expected to begin transporting crude oil by end-2025 and a refinery is expected to operate in 2027. This is projected to significantly reduce the CA deficit in the medium term (Tables 4a and 4b).
Over the medium term, the fiscal deficit is expected to improve to around 3 percent of GDP, boosted by oil revenues coming onstream in FY25/26.
Broad-based recovery continues. Economic growth is accelerating, supported by the rapid decline in inflation and construction of a new oil pipeline which is supporting investment and demand for services.
A key aspect of the authorities’ reform program—the third National Development Plan (NDPIII), adopted in 2020 and supported by the current ECF arrangement—is a multi-year fiscal consolidation plan to create space for priority social and high-quality infrastructure spending. The reforms aim at increasing domestic revenue, fostering public sector efficiency, and strengthening governance, while preparing the ground for sound management of oil revenue.
We will seek technical assistance (TA) to strengthen customs administration of the extractive industries sector ahead of oil production and will procure the Integrated Tax Administration System.		No..No.No..........
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UkraineUKREFF31-Mar-2330-Mar-27R4CR/24/199Upper-middle..0.40%0.30%NoYesNo-19.6-3.616-15.70.154.841.674.445.2
Social benefits [Social programs (on budget); Pensions; Unemployment, disability, and accident]
15.216.71.5YesYesNoNoAt the same time, several initiatives are being and have been enacted to adjust price incentives for electricity usage and procurement for households and firms: In late May, the energy regulator NEURC substantially raised the price caps to allow more energy imports by businesses at night, thus far a constraining factor. The authorities have also increased the electricity tariffs for households by up to 64 percent as of June 1, 2024, bringing tariffs closer to cost recovery levels and adjusting incentives for electricity usage during the heating season.
The recent electricity tariff increase for households can raise resources to help make the energy system more resilient, with the most vulnerable households protected to the extent possible, buying time for longer-term plans. Contingency planning should continue.
Meanwhile, we have increased the electricity tariffs for households by up to 64 percent as of June 1, 2024, bringing tariffs closer to cost recovery levels and adjusting incentives for electricity usage during the heating season.		.NoYes
The recent electricity tariff increase for households can raise resources to help make the energy system more resilient, with the most vulnerable households protected to the extent possible, buying time for longer-term plans.
NoNoYesStaff and the authorities discussed the scope for policy measures to address low levels of financial inclusion, particularly in conflict-impacted areas (MEFP ¶62). To quickly deploy targeted support, the authorities have committed to: (i) updating financial inclusion diagnostics on a best efforts basis with World Bank input by end-July 2024.
Taxpayer survey results from 2022 have underscored the need to improve public perceptions of the STS through improved taxpayer services and anticorruption reforms. Currently we are working on eliminating problems identified in the survey. With support from the World Bank, a similar survey, by an independent company, has started in April 2024, with results to be published within two weeks after receipt by the STS, no later than August 2024.
With the help of World Bank TA, we are preparing modifications to the pensions system and mechanisms to support vulnerable layers of the population: • Pensions. We plan to work on a comprehensive conceptual framework to improve the pension system and are reviewing the possibility of introducing a second pillar of the pension scheme, when conditions are in place. We reiterate that any proposed legal amendments that would increase pension expenditures need to be accompanied by a medium-term fiscal and debt sustainability analysis, and a clear identification of the necessary resources in the amendments to the Pension Fund of Ukraine budget. We will refrain from: (i) introducing new special pensions or privileges; (ii) providing further discretionary benefit increases; and (iii) modifications that would lead to a lowering of the legally defined retirement age. • Mechanisms to support vulnerable groups. We are working on further enhancement of targeting and means testing of benefits to vulnerable groups of population. With the support of the World Bank, including through a programmatic loan, we are working on draft legislation to consolidate different types of social entitlements. More specifically, we are exploring the options for integrating various social assistance programs under a single unified package based on individual needs regardless of a recipient’s status (e.g., IDP or non-IDP). In this context, we also have increased the income threshold for eligibility under the Guaranteed Minimum Income (GMI) program by 10 percent.
The MOF, in collaboration with international partners, has commissioned an independent assessment of the BDF (to be completed by end-2024) and its support programs, with the goal of refining their operational design to effectively serve only those SMEs that encounter substantial barriers to funding and of informing the future role of the BDF. Moreover, the World Bank will carry out a policy effectiveness review of the 5-7-9 program in 2024.
Bank capital rules. In recognition of the importance of preparing for EU accession, the NBU issued a regulation to align banks’ regulatory capital structure with the EU Capital Requirements Directive and Regulation in December 2023. With the continued support of the World Bank, we will close key gaps in minimum capital requirements by end-June 2025 and other gaps thereafter.
Property valuations law. In recognition of the need for prudent (fair) valuation of real estate and bank collateral for all economic entities and public authorities, the State Property Fund (SPF) will close the gaps with international standards in consultation with the NBU, NSSMC and IFIs, and: (i) by end-August 2024, in coordination with the World Bank, will develop provisions that will improve the draft amendments to the law registered in Parliament “On Valuation of Property, Property Rights and Professional Valuation Activities in Ukraine” (#7386) that closes the gaps with international valuation standards,		YesLooking ahead to the winter gas heating season and beyond, the country is expected to meet gas consumption solely through domestic gas production according to Naftogaz, resembling the 2023 heating season when no gas imports were needed. Gas underground storage facilities (up to 3km deep) remain safe, although above ground facilities could be targeted. The deployment of additional gas turbines to produce electricity, which may take up to 12–15 months between planning, delivery, and installation, is seen as a more medium-term solution, similar to the authorities’ and the market’s push to decentralize power generation through biofuels, solar or wind.
Discussions are also underway to increase energy import caps from the EU within technical limits, while SOEs are planning to procure gas and diesel turbines to boost power generation over the medium-term (with e.g., plans for up to 1 GW of gas-fired energy generation in 2024 and 4 GW in the coming years).
Risk Assessment Matrix. Commodity price volatility. A succession of supply disruptions (e.g., due to conflicts, export restrictions, and OPEC+ decisions) and demand fluctuations causes recurrent commodity price volatility, external and fiscal pressures in EMDEs, cross- border spillovers, and social and economic instability. Continue rationing access to energy to priority areas, and expand gas production. Secure alternative sources and storage for gas through the heating season. Target transfers to most vulnerable groups within the existing budget envelope. Build on and deepen alternative export routes.		No..No.Yes
Supported by IMF TA, the authorities are also evaluating options to reform the hydrocarbon tax regime.
Transfer the GTSO shareholding directly to the Ministry of Energy and adopt the new charter
Select and appoint a supervisory board for the GTSO
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ZambiaZMBECF31-Aug-2230-Oct-25R3CR/24/190Lower-middleIn distress...NoNoNo-7.8-2.85-1.62.120.421.828.224.6Social protection1.51.70.2YesNoNoYes
Energy. Fuel price adjustments to allow for full cost recovery to Oil Marketing Companies (OMCs) have been inconsistent. 23 While the authorities have already published the fuel pricing formula and adjusted prices since January (end-March 2024 SB), the process of modification of the formula’s parameters needs to be regulated through a statutory instrument to avoid subsidies (proposed end-August 2024 SB). (23 During November 2023 to January 2024, increasing fuel costs were largely offset by reducing the estimated transportation costs in the formula, leading to prices at the pump below recovery costs. The resulting subsidy was then compensated by drawing down the strategic reserve fund. The adjustment in February brought the transportation cost back to a full cost recovery)
.YesNo.NoNoNo.YesCompetitive tenders to implement open access to the Tazama pipeline have faced delays due to procedural disruptions. To ensure full cost recovery more consistently, the retail and wholesale price structures will continue to be published monthly (proposed continuous SB). Remedies to resolve Tazama pipeline tender disruptions are being crafted. The authorities will leverage the support of an independent consultant to revise the Tazama pipeline open access tender procedures (proposed end-August 2024 SB), also committing to the publication of the tender results (proposed continuous SB).
The authorities agreed on the outlook and risks (MEFP, ¶5). They highlighted recurrent adverse climate events as an economic threat, underscoring the crucial need to build resilience. They recognized the major risk posed by commodity price volatility, especially of copper, fuel, and food, which could intensify exchange rate pressures and inflation. Noting the cost-of-living deterioration, they cautioned that higher inflation could entrench inflation expectations and deepen inequality. They expressed their commitment to enhancing agricultural productivity to curb food inflation and insecurity, and to maximizing the use of the oil pipeline to reduce fuel costs.
We face delays toward implementing open access to the TAZAMA pipeline. The TAZAMA pipeline is expected to reduce diesel transportation costs by 73 percent. The open access auctions on the use of the Tazama pipeline by third parties originally planned by end-2024Q1 has experienced delays, caused by misalignment of some provisions in the guidelines to the Public Procurement Act. This halted the process by the Zambia Public Procurement Authority. Additionally, the requirement for additional security clearance resulted in a delayed turnaround time. We plan on requesting assistance from an independent international consultant to issue an SI that will review the e open access framework to align with international best practices and guarantee transparent and fact-based shortlisting of OMCs by August 1st, 2024 (proposed End August 2024 SB).		No..No.No.
Publish the revised arrears clearance strategy integrating the repayment of the fuel arrears as discussed under the IMF program parameters in the MoFNP website. (MEFP ¶10)
Publish the retail and wholesale price structures for the previous month, with all line details, in the monthly fuel price announcements by the Energy Regulatory Board. (MEFP ¶27)
Publish the Tazama open access tender results on the Ministry of Energy website within one month of the contract award, including winning bidder and all unsuccessful bids with price, type and quantities of inputs, total contract amounts and their beneficial owners. (MEFP ¶26)
Publish at the Ministry of Energy (MoE) revised pipeline open access tender procedures as per international best practices to guarantee transparent and fact-based shortlisting of OMCs and shorten ward processing by removing multiple vetting clearances. (MEFP ¶26)
Adopt and publish a statutory instrument to define elements of the fuel price formula (both wholesale and retail) and institutionalize the review process for each element as per best practices, with deviations foreseen only under preestablished exceptional circumstances. (MEFP ¶27)
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