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Advance Action on Procurement and Retroactive Financing

Country/Borrower: People's Republic of China

Title of Proposed Project: Integrated Renewable Biomass Energy Development Sector Project

Name and address of the Executing Agency

Ministry of Agriculture
The People's Republic of China
Attention: Mr. Xie Dongsheng, Deputy Director
Foreign-funded Project Division I
Foreign Economic Cooperation Center
Fax No.: +86 10 6584 2162
Email: D_S_Xie@agri.gov.cn

Brief Description of the Project:

The expected impact of the Project is improved rural environmental management and access to biogas energy. The Project will support the Government's implementation of renewable energy development policies and strategies by increasing the number of large-scale biogas plants, enhancing technical services, and strengthening the biogas subsector performance. The expected outcome of the Project will be improved efficiency of rural biomass renewable energy system and rural social benefits. The Project will introduce a new technical standard, business models for the medium- and large-scale biogas plants (MLBGPs), and a performance monitoring system to improve environmental quality in rural areas, enhance the efficiency of biogas plants, and increase the productivity of the associated eco-farming practices. There are about 130 subborrowers in the Project, including 71 large- and 59 medium-sized farms. Four subprojects are state-owned enterprises, and the remaining are private enterprises. The project farms are leading enterprises in their respective counties and usually contract local small-sized farms as their breeding bases. The social and economic analyses of the Project show that a large-sized farm could contract as many as 1,900 poor households as breeding bases. The improved waste treatment of these large farms will improve the health of the farms' operations; create opportunities for new jobs and expansion of the contract farming, which will generate more income stream for neighboring communities; and stabilize rural employment. The improved eco-farming practices will also increase poor farmers' productivity and the value of their outputs.

The Project consists of four components. The specific outputs under each component are described below:

  1. Component 1-Sustainable Development and Demonstration of Commercial Practices of MLBGPs:
    • 39 MLBGPs constructed by 2010;
    • 72 MLBGPs constructed by 2011;
    • 19 MLBGPs constructed by 2012;
    • 130 MLBGPs perform to technical standards and fully monitored by 2014;
    • Up to 10 centralized biogas plants were operated effectively by 2015;
    • About 80% of energy source of each livestock farm or agro-enterprise is from the biogas plant by 2015;
    • Methane capture device worked about 95% of time when it was required in plants equipped with the device by 2014; and
    • Business models for centralized biogas plants established by 2015.
  2. Component 2-Effective Utilization of Biogas Sludge in Eco-farming:
    • A handbook on eco-farming and application of bio-fertilizers for agricultural productions is developed by 2011.
    • About 85% of biogas plants supply sludge to nearby farms as organic fertilizer for fruit, vegetable, and crop productions by 2015.
    • Farmers using biogas sludge as fertilizer reduce the use of chemical fertilizers by about 50% by 2015.
  3. Component 3-Capacity Building for Improved Sector Performance:
    • A handbook on operation and maintenance of MLBGPs is developed by 2010.
    • Guidelines on the establishment of centralized biogas plants are finalized by 2011.
    • Five provincial technical service centers supported biogas plants as required by 2012.
    • About 400 technicians were trained on the operation and maintenance of biogas plants by 2012.
    • Business models for centralized biogas plants were established by 2015.
    • A performance monitoring system for the design and operation of MLBGPs is prepared by 2014.
  4. Component 4-Project Implementation Support:
    • Project implementation offices with 7-10 staff are established in 2009 and are operational during the project implementation.
    • Adequate budgetary resources are allocated annually.
    • Project performance management system is set up by 2010 and is updated yearly.
    • Subprojects are prepared, reviewed, and approved in line with the review process.

Procurements and Engagement of Consultants Under the Project:

As per the Government's request, and given the urgency of the Project, ADB approved the advance contracting of good, civil works, and consulting services for the Project. The Government was advised that ADB's approval of such advance contracting does not commit ADB to finance the Project. All procurement of goods and works will be carried out in accordance with ADB's Guidelines for Procurement. Each subborrower will engage the services of a qualified tendering agency to carry out the procurement under the supervision and guidance of the respective project implementation office.

The Project will require the services of three teams of consultants to be recruited through three firms in three contract packages.

  1. Package 1 (financed under the Clean Energy Fund of ADB) will comprise 15 person-months of international consultants and 32 person-months of national consultants to support (i) evaluation of technical and financial performance of MLBGPs, (ii) preparation of a performance monitoring mechanism for MLBGPs, and (iii) capacity-building activities. There will be three special studies to be conducted by selected IAs through research institutes or consulting firms.
  2. Package 2 (financed by the Global Environment Facility) will require 30 person-months of international consultants and 64 person-months of national consultants to support (i) the development of centralized biogas plant systems, (ii) the establishment of rules and guidelines for MLBGPs' connection to local power grids, and (iii) capacity-building activities.

Packages I and II consultants will be recruited by the executing agency in accordance with the Guidelines on the Use of Consultants by ADB and its Borrowers. Package 2 consultants will be recruited only after GEF approval of the grant, which is expected in November-December 2009.

Date of Advance Contracting Approval: 4 June 2009