Projects

Project Information

Sustainable Rural Electrification

Country and Location

16 districts in Bhutan (7 in the Western Region, 4 in the Central Region, and 5 in the Eastern Region) namely Paro, Thimphu, Punakha, Wangdue Phodrang, Samtse, Chhukha, Dagana, Bumthang, Tsirang, Trongsa, Sarpang, Lhuentse, Yangtse, Mongar, Trashigang, and Pemagatshel.

Date of Approval

25 November 1999

Project Description

The Project is an integral part of the rural electrification master plan of Bhutan. The Project will provide electricity to 6,038 consumers including 23 hospitals, 24 schools, and other public facilities for local communities in rural villages of 16 districts where more than two thirds of project beneficiaries are living below the poverty line. The project scope includes (i) rural electrification through 33kV, 11kV, and 0.4kV distribution systems; (ii) remote rural electrification using renewable energy sources by providing solar panels for local community centers including schools, hospitals, and other local community facilities in three districts; and (iii) a small-scale pilot Supervisory Control and Data Acquisition (SCADA) system for substations close to Thimphu.

Loan Amount and Terms

The equivalent in various currencies of Special Drawing Rights 7,206,000 ($10 million equivalent) from ADB's Special Funds resources with a term of 32 years, including an 8-year grace period with a 1 percent per annum interest charge during the grace period and 1.5 percent per annum thereafter.

Period of Utilization

Until 30 March 2004

Borrower

Kingdom of Bhutan

Executing Agency

Division of Power (DOP) of the Ministry of Trade and Industry.

Procurement

All project equipment and materials to be financed under the ADB loan will be procured in accordance with ADB's Guidelines for Procurement reflecting ADB's Anticorruption Policy and mandatory use of ADB's standard bidding documents. ADB has approved advance procurement action.

Technical Assistance

A TA grant of $600,000 financed from the Japan Special Fund will support DOP's transition from a Government division to a corporation. The scope of work will include (i) conducting asset registration and valuation of DOP; (ii) recommending a financial structure for DOP; (iii) formulating the organizational structure of the corporatized DOP including administrative matters; (iv) establishing a tariff adjustment mechanism based on financial projections; (v) facilitating registration of the corporatized DOP as a company; (vi) finalizing a necessary human resource development program in consultation with ADB; and (vii) providing necessary training on commercial accounting and corporate and financial management to DOP staff.

Consulting Services

A total of 10 person-months of international consulting services will be required for project implementation to assist with ADB-financed procurement, project implementation, and monitoring. The consultants will be selected in accordance with ADB's Guidelines on the Use of Consultants. ADB has approved advance action for recruitment of consultants.