Pakistan: Renewable Energy Development Sector Investment Program - Project I

Sovereign Project | 34339-023 Status: Active

Summary

To develop indigenous, nonpolluting, and renewable sources of energy to help meet Pakistan's power shortage and diversify the power sources. It will also improve the quality of the power system, specially in rural areas. Scope: Under the first set of subprojects North-West Frontier Porvince (NWFP) will develop a cluster of small hydropower from perennial high-head rivers that are abundant in the province. Punjab province will also develop a cluster of low-head, high-volume small hydropower stations that can be installed in the existing irrigation canal system with perennial water flows. The scope may get expanded to cover other renewable sources as well as other provinces in the future. An effort will also be made for capacity development of renewable energy sector related agencies.

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Project Name Renewable Energy Development Sector Investment Program - Project I
Project Number 34339-023
Country Pakistan
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2286-PAK: Renewable Energy Development Sector Investment Program - Project I
Ordinary capital resources US$ 105.00 million
Loan 2287-PAK: Renewable Energy Development Sector Investment Program - Project I
Asian Development Fund US$ 10.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector

Energy - Energy sector development and institutional reform - Large hydropower generation - Renewable energy generation - biomass and waste - Renewable energy generation - small hydro - Renewable energy generation - solar - Renewable energy generation - wind

Gender Equity and Mainstreaming No gender elements
Description To develop indigenous, nonpolluting, and renewable sources of energy to help meet Pakistan's power shortage and diversify the power sources. It will also improve the quality of the power system, specially in rural areas. Scope: Under the first set of subprojects North-West Frontier Porvince (NWFP) will develop a cluster of small hydropower from perennial high-head rivers that are abundant in the province. Punjab province will also develop a cluster of low-head, high-volume small hydropower stations that can be installed in the existing irrigation canal system with perennial water flows. The scope may get expanded to cover other renewable sources as well as other provinces in the future. An effort will also be made for capacity development of renewable energy sector related agencies.
Project Rationale and Linkage to Country/Regional Strategy Pakistan's Medium Term Development Framework sets out a strategic vision and investment program for the sector for the period 2005-2010. The main objective of this program is to support a projected 6-8% growth in gross domestic product. Energy is essential to high and inclusive growth. The poverty reduction agenda depends on it.

The vision for the sector has four main components: (i) increased private sector investment in the entire production chain; (ii) reduced technical, non-technical and financial losses; (iii) improved sustainability and reduced level of government subsidies; and (iv) improved service delivery, efficiency, and governance in the energy utilities. The strategy will deliver various key outcomes: (i) basic sector reforms to create an enabling environment for private sector participation; (ii) better sector analysis and stronger capacity among the relevant sector organizations, including in such areas as financial management, governance, operational efficiency, clean development mechanisms, and project management; and (iii) promotion of infrastructure development projects in generation, distribution, and transmission, while including renewable energy development. The latter will target industry, as well as urban and rural communities.

Annual electricity demand growth is forecast to average 8.3% during 2005-2015. To cope with this demand growth, Pakistan needs annually an additional 2,000 megawatts (MW) of newly installed capacity. The estimated annual investment cost to deliver this capacity is about $6 billion. This additional generated power would need to be evacuated through the formal transmission network to consumers through the distribution system. The transmission system requires a major investment package. The National Transmission and Dispatch Company has developed a nationwide transmission development program for 2005-2012, out of which several priority schemes have already been approved by the Government. ADB will support this program.

Pakistan has considerable potential for developing a broad range of renewable energy resources (RE), principally wind, solar, biomass and small to medium-sized hydropower plants. RE resources can contribute to energy supply and security while helping change the mix. It also can contribute to both off-grid and grid-connected power supply. RE supports rural development and economic activity in remote areas while yielding positive environmental and social impacts. Pakistan has a total identified hydropower potential of more than 45,000 MW. The total installed capacity of hydropower generation in the country is 6,595 MW. Hydropower resources are located mainly in the north, northwest, and central parts of the country. Wind and solar resource potential is highest in the southern provinces of Sind and Balochistan, respectively.
Impact Reduction in CO2 emission

Project Outcome

Description of Outcome Increased production and use of clean energy
Progress Toward Outcome

Punjab Power Development Company Limited (PPDCL) has been established. Both PPDCL and PEDO (formerly SHYDO) actively seek new projects in order to generate cash flow in the future to meet the debt ratio.

The projects are not yet completed. Six contracts have been awarded and the works are in progress. Due to recent major depreciation of JPY against USD, there is insufficient amount of funds in L2286-PAK to finance Okara HPP in Punjab. The Punjab government will finance Okara HPP from its own resources. In December 2015 the available amount for contract award is only US$108.433 million. The committed amount is $116.185 million leaving a balance of $7.752 million (8%) to be funded additionally by Government of Pakistan for completion of these projects.

A loan review mission was fielded from 5-15 October 2015 and an action plan was agreed to complete the subprojects between June 2015 to February 2016. Staff is closely monitoring the agreed action plan to ensure completion of the subprojects by February 2016 as agreed. A loan extension is required to complete the subprojects for Punjab.

Implementation Progress
Description of Project Outputs

Part A. Clean Energy Development

Small to medium-size hydropower stations are operational in KP and Punjab.

Part B. Due Diligence

Feasibility studies and other due diligence work on new RE schemes completed.

Part C. Capacity Development

Training needs assessment at the provincial and project levels conducted.

Status of Implementation Progress (Outputs, Activities, and Issues)

2 management and supervision consultancy awarded and on-going in KP

1 management and supervision consultancy awarded and on-going in Punjab

1 feasibility study (3 sites) contract awarded and on-going in KP

1 feasibility study (5 sites) contract awarded and on-going in Punjab

17 MW Ranolia HPP contract awarded

2.6 MW Machai HPP contract awarded

7.2 MW Marala HPP contract awarded

3.2 MW Pakpattan HPP contract awarded

5.4 MW Chianwali HPP contract awarded

5.0 MW Deg Outfall HPP contract awarded

17 MW Ranolia HPP contract awarded

2.6 MW Machai HPP contract awarded

7.2 MW Marala HPP contract awarded

3.2 MW Pakpattan HPP contract awarded

5.4 MW Chianwali HPP contract awarded

5.0 MW Deg Outfall HPP contract awarded

All 8 Feasibility Studies are completed.

Construction of PEDO (formerly SHYDO) building is complete.

The current progress of the subprojects and the completion status of the subprojects is: Chianwali (35.4); Deg Outfall (52.3%); Pakpattan (76%); Marala (75%); Machai (99%); and Ranolia (99%). Punjab's subprojects are behind the schedule and a loan extension is required to complete the subprojects.

Contract for consulting services for capacity building/development of PEDO and related entities is completed. The project completion report was already prepared. 23 trainings (international/national) were conducted; 8 courses were implemented; and 57 officials attended the national and international trainings.

The procurement of goods for PEDO building (capacity building) is complete.

In Punjab, the contract between PPDCL and the Clean Energy Development Mechanism (CDM) individual consultant has been signed and under implementation. PPDCL staff are envisaged to receive hands-on training with regards to registration and validation procedure related to CDM.

Geographical Location Punjab and Khyber Pakhtunkhwa (formerly NWFP)

Safeguard Categories

Environment B
Involuntary Resettlement B
Indigenous Peoples B

Summary of Environmental and Social Aspects

Environmental Aspects The subprojects will have very little adverse environmental impacts. The adverse impacts will be adequately mitigated as described in the environmental management plan (EMP) where the implementing agencies (IAs) are committed to implement. However, IAs will obtain maximum benefits from the capacity development component of the investment program. The IAs will improve their capacities to implement and monitor the measures in the EMP. Based on the review, ADB environment category B is appropriate and a full environmental impact assessment is not necessary.
Involuntary Resettlement Land acquistion and resettlement impacts of proposed subprojects under the first tranche have been examined. Part A: Clean Energy Development will require permanent acquisition of 11.78 hectares (ha) in KP, and temporary acquisition of 0.85 ha of 0.45 in KP, and 3.2 in Punjab. Part B: Feasibility Studies and Part C: Capacity Development will not require any acquisition of land or other property and therefore will not have any resettlement impacts. Land acquisition for Part A subprojects will affect 61 households, and 2 residential structures.
Indigenous Peoples Indigenous peoples (IP) are defined as those having a distinct social, cultural, economic, and political traditions and institutions compared with the mainstream or dominant society. In KP, all the affected people, apart for the Machai subproject, belong to sub-tribes. In fact, the great majority of KP population falls under ADB's definition of IP. Traditional decision making mechanisms were taken into account during consultation. In Punjab, none of the affected people (AP) fall under ADB's IP policy.
Stakeholder Communication, Participation, and Consultation
During Project Design

Stakeholder analysis has been undertaken. All stakeholders have been actively involved to reduce the likelihood of grievances and to ensure that benefits are distributed fairly. In addition, for the selection of unskilled labor in the project area, the contracts will consult with local township labor officials, local village leaders and jirgas and will also ensure that labor is hired on a nondiscriminatory basis.

Resource persons in different Government departments and representatives of the local communities were interviewed.

During Project Implementation Consultation with relevant Government departments and representatives of the local communities are conducted during implementation.

Business Opportunities

Consulting Services QCBS (80/20)
Procurement

International competitive bidding (ICB) will be used for turnkey contracts targeting the construction of hydropower plants and supply contracts estimated to cost $1 million or more.

Limited international bidding will be used for supply contracts estimated at $100,000 to $1 million.

National competitive bidding (NCB) will be used for contracts estimated to cost less than $100,000.

Civil works contracts estimated at less than $1.5 million also will be procured following NCB procedures.

Responsible Staff

Responsible ADB Officer Ehtesham Khattak
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Pakistan Resident Mission
Executing Agencies
Government of Khyber Pakhtunkhwa (KP)
Mr. Bahadur Shah
PROJECT@PES.COMSATS.NET.PK
374-WAPDA House, Shami Road Government of NWFP, Peshawar
Government of Khyber Pakhtunkhwa (KP)
S. Ishtiaq Shah
PROJECT@PES.COMSATS.NET.PK
374-WAPDA House, Shami Road Government of NWFP, Peshawar
Alternative Energy Development Board
Mujahid Sadiq
mujahid@aedb.org
House 3, Street 8, F-8/3, Islamabad, Pakistan
Government of Punjab
Mr. Liaqat Ali Iqbal
pdppmu@punjab.gov.pk/pdppmu@gmail.com
209-C, TECH Society, Canal Bank, Lahore, Pakistan
Government of Punjab
Mr. Mohammad Yaqub
engrmmy@hotmail.com
209-C, TECH Society, Canal Bank, Lahore, Pakistan
Alternative Energy Development Board
Arif Alauddin
alauddin@aedb.com
House 3, Street 8, F-8/3, Islamabad, Pakistan

Timetable

Concept Clearance -
Fact Finding -
MRM 16 May 2006
Approval -
Last Review Mission -
PDS Creation Date 03 Aug 2008
Last PDS Update 28 Mar 2016

Loan 2286-PAK

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Dec 2006 05 Oct 2007 29 Nov 2007 30 Jun 2012 30 Jun 2016 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 135.00 Cumulative Contract Awards
ADB 105.00 13 Dec 2006 126.08 0.00 108%
Counterpart 30.00 Cumulative Disbursements
Cofinancing 0.00 13 Dec 2006 99.96 0.00 85%

Loan 2287-PAK

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Dec 2006 05 Oct 2007 29 Nov 2007 30 Jun 2012 30 Jun 2016 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 10.00 Cumulative Contract Awards
ADB 10.00 13 Dec 2006 3.11 0.00 59%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 13 Dec 2006 2.92 0.00 56%

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Renewable Energy Development Sector Investment Program - Project I (Punjab): Biannual Environmental Monitoring Report (July-December 2015) Environmental Monitoring Reports Jan 2016
Renewable Energy Development Sector Investment Program - Tranche 1: DegOut Fall Hydro Power Project (4.04 MW) - Second External Monitoring for the Implementation of Short Land Acquisition and Resettlement Plan Social Monitoring Reports Sep 2015
Renewable Energy Development Sector Investment Program - Tranche 1: Chianwali Hydro Power Project (5.38 MW) - Second External Monitoring for the Implementation of Short Land Acquisition and Resettlement Plan Social Monitoring Reports Sep 2015
Renewable Energy Development Sector Investment Program - Project I (Punjab): Biannual Environmental Monitoring Report (January-June 2015) Environmental Monitoring Reports Jul 2015
Renewable Energy Development Sector Investment Program - Project (Ranolia, Khyber Pakhtunkhwa Component): Biannual Environmental Monitoring Report (January-June 2015) Environmental Monitoring Reports Jul 2015
Renewable Energy Development Sector Investment Program - Project I: Punjab: Biannual Environmental Monitoring Report (July-December 2014) Environmental Monitoring Reports Jan 2015
Renewable Energy Development Sector Investment Program - Project I: Ranolia Hydropower Project, Khyber Pakhtunkhwa: Biannual Environmental Monitoring Report (July-December 2014) Environmental Monitoring Reports Jan 2015
Renewable Energy Development Sector Investment Program - Project I: Machai Hydropower Project, Khyber Pakhtunkhwa: Biannual Environmental Monitoring Report (July-December 2014) Environmental Monitoring Reports Jan 2015
Renewable Energy Development Sector Investment Program - Project 1: Marala Hydropower Project (MHPP 7.64 MW) Due Diligence Report (December 2014) Safeguards Due Diligence Reports Dec 2014
Renewable Energy Development Sector Investment Program - Project 1: Deg Out Fall Hydro Power Project (4.04 MW) Biannual Social Monitoring Report (July 2014) Social Monitoring Reports Jul 2014
Renewable Energy Development Sector Investment Program - Project 1: Chianwali Hydro Power Project (5.38 MW) Biannual Social Monitoring Report (July 2014) Social Monitoring Reports Jul 2014
Renewable Energy Development Sector Investment Program - Project I: Machai Hydropower Project, Khyber Pakhtunkhwa: Environmental Monitoring Report (January-June 2014) Environmental Monitoring Reports Jun 2014
Renewable Energy Development Sector Investment Program - Project I: Punjab: Environmental Monitoring Report (January-June 2014) Environmental Monitoring Reports Jun 2014
Renewable Energy Development Sector Investment Program - Project I: Ranolia Hydropower Project, Khyber Pakhtunkhwa: Environmental Monitoring Report (January-June 2014) Environmental Monitoring Reports Jun 2014
Renewable Energy Development Sector Investment Program - Project I: Punjab: Environmental Monitoring Report (July-December 2013) Environmental Monitoring Reports Dec 2013
Renewable Energy Development Sector Investment Program - Project I: Machai Hydropower Project, Khyber Pakhtunkhwa: Environmental Monitoring Report (July-December 2013) Environmental Monitoring Reports Dec 2013
Renewable Energy Development Sector Investment Program - Project I: Ranolia Hydropower Project, Khyber Pakhtunkhwa: Environmental Monitoring Report (July-December 2013) Environmental Monitoring Reports Dec 2013
Renewable Energy Development Sector Investment Program - Project I: Ranolia Hydropower Project, Khyber Pakhtunkhwa: Environmental Monitoring Report (January-June 2013) Environmental Monitoring Reports Sep 2013
Renewable Energy Development Sector Investment Program - Project I: Pakpattan Hydro Power Project Final Internal Monitoring Report Social Monitoring Reports Jul 2013
Renewable Energy Development Sector Investment Program - Project I: Punjab: Environmental Monitoring Report (January-June 2013) Environmental Monitoring Reports Jun 2013
Renewable Energy Development Sector Investment Program - Project I: Machai Hydropower Project, Khyber Pakhtunkhwa: Environmental Monitoring Report (January-June 2013) Environmental Monitoring Reports Jun 2013
Renewable Energy Development Sector Investment Program - Project 1: Pakpattan (2.82 MW) Hydro Power Project Biannual Social Monitoring Report (June 2013) Social Monitoring Reports Jun 2013
Renewable Energy Development Sector Investment Program - Project I: Initial Environmental Examination for Marala Hydropower Project Initial Environmental Examination May 2006
Renewable Energy Development Sector Investment Program - Project I: Initial Environmental Examination for Pakpattan Hydropower Project Initial Environmental Examination May 2006
Renewable Energy Development Sector Investment Program - Project I: Initial Environmental Examination for Deg Outfall Hydropower Project Initial Environmental Examination May 2006
Renewable Energy Development Sector Investment Program - Project I: Initial Environmental Examination for Okara Hydropower Project Initial Environmental Examination May 2006
Renewable Energy Development Sector Investment Program - Project I: Initial Environmental Examination for Chianwali Hydropower Project Initial Environmental Examination May 2006
Renewable Energy Development Sector Investment Program - Project I: Initial Environmental Examination for Ranolia Hydropower Project Initial Environmental Examination May 2006
Renewable Energy Development Sector Investment Program - Project I: Initial Environmental Examination for Machai Hydropower Project Initial Environmental Examination May 2006

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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