Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date 04 Dec 2006
PDS Updated as of 21 Oct 2013

Project Name Electricity Market and Transmission Development
Country Philippines
Project/Program Number 36018-013
Status Approved
Geographical Location Luzon and Mindanao
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector and/or Subsector Classification Energy
/ Electricity Transmission and Distribution
Strategic Agendas
Drivers of Change
Gender Mainstreaming Categories

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Loan1984Ordinary capital resources40,000
Counterpart 20,000
TOTAL US$ 60,000

Safeguard Categories

For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories

Environment B

Summary of Environmental and Social Issues

Environmental Issues The equipment procured under part A of the Project was installed inside TRANSCO s compound in Diliman, Quezon City. Therefore, part A has no adverse environmental impacts. Transmission components under Part B were classified under environment category B. The Luzon transmission upgrading used the ROW of existing transmission lines owned by TRANSCO. As such, the Department of Environment and Natural Resources (DENR) did not require an initial environmental examination (IEE) and issued a certificate of non-coverage to this effect on 16 June 1999. However, TRANSCO prepared an IEE for this component to meet the ADB environmental requirements. The Mindanao substation expansion will be within the boundaries of existing TRANSCO substations; DENR approved a certificate of non-coverage for this component on 31 January 2000. Social Issues Although the upgraded Luzon transmission lines will use the existing ROW, the upgrading work involved land acquisition and resettlement action for transmission tower foundation footing sites within the ROW. At the time of project apparisal, it was estimated that the Luzon transmission upgrading would involve constructing 303 towers, causing land impacts that are widespread but of very small magnitude (no affected families would lose more land than one tower base of 225 to 400 square meters). Permanent land impacts are 6.8 hectares (ha) of farmland and temporary losses are 413.8 ha. Of these, 213.0 ha are occupied by rice, 110.7 ha by sugar cane, 66.0 by corn, and 24.1 by trees. In addition, 299 houses and 92 minor structures will be demolished. Construction of the transmission lines would affect 1,535 landowners. Permanent land impacts would affect 2,391 families (11,955 people) of which 187 families (935 people) are tenants. Temporary land impacts would affect 1,334 families (5,830 people) of which 168 (840 people) are tenants. House loss/relocation will affect 321 families (1,605 people); loss of minor structures will affect 46 families (230 people), and loss of crops/trees would affect 1,535 families (7675 people). About 70 small businesses would also be affected. The above impacts are being reassessed during project implementation.

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

During Project Design
Conducted.
During Project Implementation
None.

Description

The objective of the Project is to develop necessary infrastructure for the power sector restructuring, i.e. (i) to establish the Wholesale Electricity Spot Market (WESM) so that the electricity generation is dispatched on a competitive basis to meet the power demand; and (ii) to upgrade the critical transmission lines and substations as required in the Transmission Development Plan to ensure the reliability of the power supply.

Project Rationale and Linkage to Country/Regional Strategy

ADB has had a long involvement in, and is highly supportive of, the Government's plans to restructure and privatize the electric power industry, and create a competitive electricity market. Important underlying requirements of a competitive electricity market include first of all a fully functional power trading and pooling system and an adequate transmission network. Therefore, timely implementation of the WESM will be a prerequisite for the successful implementation of the power sector's restructuring and privatization. With the operations of WESM, the competition in the power sector is envisioned to bring electricity prices closer to marginal cost in medium and long term. All of the transmission components included in the proposed Project are also of high-priority for TRANSCO as defined in its least-cost transmission development plan. In particular, the substation expansion will enable implementation of accelerated rural electrification programs in Mindanao, which is one the poorest regions in the Philippines and its percentage of barangays with electricity in Mindanao is well below the national average. The Project fits into ADB's country operational strategy for the Philippines. The Project fits into ADB's country operational strategy for the Philippines and in line with TRANSCO's least-cost transmission development plan. As such, the Project will enable implementation of accelerated rural electrification programs, particularly in Mindanao, one of the poorest regions in the Philippines.

Development Impact

Project Outcome

Description of Outcome
Progress Towards Outcome

Outputs and Implementation Progress

Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2006 Dec 04
Consulting Services
About 48 person-months of international and 24 person-months of domestic consulting services with expertise in (i) project and contract management, (ii) electricity market operation, (iii) computer software development, and (iv) computer systems integration and testing will be required to manage the procurement and implementation of the market management system of part A. A consulting firm will be selected by TRANSCO using quality and cost-based selection, based on an evaluation of full technical proposals.
Procurement
For Part A of the Project, a turnkey contract for procurement and installation of hardware and software will be awarded using international shopping. Under part B, a turnkey contract will be awarded for the Luzon transmission upgrading using international competitive bidding (ICB) procedures. Such procedures will also be used for the supply and delivery of materials and equipment for Mindanao substations expansion. Erection and installation will be undertaken and funded by TRANSCO using local competitive bidding in accordance with standard procedures of TRANSCO that are acceptable to ADB.
Procurement and Consulting Notices
http://www.adb.org/projects/36018-013/business-opportunities

Timetable

Concept Clearance
Fact-finding 02 Apr 2002 to 26 Apr 2002
Management Review Meeting 13 Jun 2002
Approval 19 Dec 2002
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Loan 1984 19 Dec 2002 16 Dec 2003 09 Mar 2004 30 Jun 2009 03 Aug 2009

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
31 Jul 2014 Loan 1984 32,182 0 90.00%
Cumulative Disbursements
31 Jul 2014 Loan 1984 35,591 0 100.00%

Status of Covenants

Covenants are categorized under the following categories—audited accounts, safeguards, social, sector, financial, economic, and others. Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory—all covenants in the category are being complied with, with a maximum of one exception allowed, (ii) Partly Satisfactory—a maximum of two covenants in the category are not being complied with, (iii) Unsatisfactory—three or more covenants in the category are not being complied with. As per the 2011 Public Communications Policy, covenant compliance ratings for Project Financial Statements apply only to projects whose invitation for negotiation falls after 2 April 2012.

Approval No. Category
Sector Social Financial Economic Others Safeguards Project Financial Statements
Loan 1984

Contacts and Update Details

Responsible ADB Officer Zhai Yongping (yzhai@adb.org)
Responsible ADB Department Southeast Asia Department
Responsible ADB Divisions Energy Division, SERD
Executing Agencies National Transmission Corporation (TRANSCO)
Project Director

Links

Project Website http://www.adb.org/projects/36018-013/main
List of Project Documents http://www.adb.org/projects/36018-013/documents