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
PDS Updated as of 20 Jul 2014

Project Name Power System Expansion and Efficiency Improvement Investment Program (Facility Concept)
Country Bangladesh
Project/Program Number 42378-014
Status Approved
Geographical Location
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
/ Energy efficiency and conservation
Thematic Classification Capacity development
Economic growth
Environmental sustainability
Climate change
Gender Mainstreaming Categories

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Loan0073Ordinary capital resources700,000
Grant0320European Investment Bank7,000
Counterpart 222,000
TOTAL US$ 929,000

Summary of Environmental and Social Issues

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

During Project Design
During Project Implementation

Description

The proposed investment program includes three tranches encompassing generation expansion and associated transmission and distribution improvements. Tranche 1 mainly focuses on generation expansion. Tranche 2 focuses on transmission and distribution improvement together with a pilot solar irrigation component. Tranche 3 also invests on generation expansion. Generation expansion in the MFF will be undertaken through supply side energy efficiency improvement so that about 50% power can be generated without burning additional gas. Given the acute gas shortages in Bangladesh, conversion of single cycle gas fired power plants to combined cycle plants the technology adopted in the investment program is the best way to expand the generation capacity. The sequencing of the tranches is well aligned with the sector needs and the government program. The Tranche 1 of the proposed Power System Expansion and Efficiency Improvement Investment Program will address two key areas in the power sector aligning with the priorities identified in the CPS: improving energy use efficiency of thermal power plants; and improving the transmission network capacity. The project interventions will include: (i) adding 235 MW capacity by conversion of four single cycle gas fired power plants to combine cycle plants at Khulna, Baghabari, Sylhet and Shahjibazar; (ii) construction of 180 km 132 kV transmission lines and four 133/32 kV substations; and (iii) capacity building. The capacity building component includes training on investment planning, operations planning, energy auditing and monitoring, financial management and auditing, project preparation and appraisal, and operation and maintenance of solar irrigation pumps. In addition, the capacity building component will provide consultants for preparation of subsequent tranches and implementation support.

Project Rationale and Linkage to Country/Regional Strategy

About 50% of the population has access to power and those who have access also faces severe power shortages; about 1875 MW (28% of demand) has not been met during the peak periods in 2011. The available power generating capacity in Bangladesh, by June 2011, was of 4890 MW, against the estimated unconstrained demand of 6765 MW, leaving a significant demand-supply gap. The government envisages investing $9.5 billion for generation expansion during the five year planning period and matching investment of about $3 billion on transmission and distribution improvements together with a sound financing plan. Investments envisaged in the sixth five year plan are expected to increase electrification rate to 68% by 2015, eliminate the supply demand gap and resolve reliability and supply quality issues. The proposed MFF aims to support this government investment program by providing $1600 million worth investments mobilizing nearly 50% of the external financing through co- financing arrangements.

Development Impact

Increased energy sector contribution to low-carbon economic growth in Bangladesh

Project Outcome

Description of Outcome
Increased access to clean and reliable supply of electricity in Bangladesh
Progress Towards Outcome
Project implementation ongoing for Tranche 1 (Loan 2966). Loan effectiveness declared on 14 Mar 2014 for Tranche 2 (Loan 3087).

Outputs and Implementation Progress

Description of Project Outputs
Improved efficiency in electricity generation, transmission, and distribution Increased renewable energy use Enhanced capacity of power sector agencies and farmer organizations Project management system in place
Status of Implementation Progress (Outputs, Activities, and Issues)
Loan 2966 (Tranche 1) Contract for conversion of Khulna power plant (Part A) was signed in Dec 2013. Technical bid evaluation report for construction of 132kV tranmission line and substations was approved by ADB in Jan 2014 and financial bid evaltion report is being prepared by PGCB. Recruitment of implementation support consultants by NWPGCL (Khulna) and BPDB (Baghabari, Shahjibazar and Sylhet) for respective power plants is ongoing. Twelve individual consultants mobilized in Apr 2013 for Tranche 2 preparation completed service in Dec 2013.
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing
Consulting Services
Procurement
Procurement and Consulting Notices
http://www.adb.org/projects/42378-014/business-opportunities

Timetable

Concept Clearance 06 Aug 2012
Fact-finding 07 Aug 2012 to 14 Aug 2012
Management Review Meeting 05 Sep 2012
Approval 28 Nov 2012
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
Cumulative Disbursements

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 0073
Grant 0320

Contacts and Update Details

Responsible ADB Officer Herath M. Gunatilake (hgunatilake@adb.org)
Responsible ADB Department South Asia Department
Responsible ADB Divisions Energy Division, SARD
Executing Agencies

Links

Project Website http://www.adb.org/projects/42378-014/main
List of Project Documents http://www.adb.org/projects/42378-014/documents