Sri Lanka: Clean Energy and Access Improvement Project

Sovereign Project | 39419-013

Summary

The Project has three investment components: energy efficiency improvement, renewable energy development, and access for the poor.

The energy efficiency improvement component will include (i) system control modernization (part 1); (ii) transmission system strengthening (part 2); (iii) distribution substations augmentation (part 3); (iv) demand-side management for municipal street lighting (part 4); and (v) consulting services for system control modernization (part 5).

The clean energy development component will be network capacity augmentation for renewable energy projects (part 6).

The access for the poor component will include (i) transmission system strengthening in the Eastern Province (part 7) and (ii) rural household connection (part 8).

Latest Project Documents

Consulting Notices

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Procurement Notices

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Procurement Documents

Title Document Date
Clean Energy and Access Improvement Project Jun 2015

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Project Name Clean Energy and Access Improvement Project
Project Number 39419-013
Country Sri Lanka
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Grant 0149-SRI: Clean Energy and Access Improvement Project
Climate Change Fund US$ 2.20 million
Loan 2518-SRI: Clean Energy and Access Improvement Project
Ordinary capital resources US$ 135.00 million
Loan 2519-SRI: Clean Energy and Access Improvement Project
Asian Development Fund US$ 25.00 million
TA 7265-SRI: Clean Energy and Access Improvement Project
Technical Assistance Special Fund US$ 1.00 million
TA 7266-SRI: Clean Energy and Access Improvement Project
Japan Special Fund US$ 2.00 million
TA 7267-SRI: Clean Energy and Access Improvement Project
Climate Change Fund US$ 800,000.00
Grant 0149-SRI: Clean Energy and Access Improvement Project
Climate Change Fund US$ 2.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change
Sector / Subsector Energy - Electricity transmission and distribution - Energy efficiency and conservation - Energy sector development and institutional reform - Energy utility services
Gender Equity and Mainstreaming No gender elements
Description

The Project has three investment components: energy efficiency improvement, renewable energy development, and access for the poor.

The energy efficiency improvement component will include (i) system control modernization (part 1); (ii) transmission system strengthening (part 2); (iii) distribution substations augmentation (part 3); (iv) demand-side management for municipal street lighting (part 4); and (v) consulting services for system control modernization (part 5).

The clean energy development component will be network capacity augmentation for renewable energy projects (part 6).

The access for the poor component will include (i) transmission system strengthening in the Eastern Province (part 7) and (ii) rural household connection (part 8).

Project Rationale and Linkage to Country/Regional Strategy

Sri Lanka's power sector struggled throught the late 1980s, 1990s, and early 2000s to meet the growing demand for electricity. Electricity is expensive and subject to interruptions. About 20% of households do not have access to it. The Ceylon Electricity Board is burdened with debt, restricting its ability to make capitla investments and discouraging private investment. The Government is fully committed to addressing these issues and has developed a Ten-Year Development Framework (TYDF). Under the TYDF, the Government has developed a national energy policy and strategies (NEPS). The NEPS provides a comprehensive road map for the sector. It includes a long-term investment program and specific policy and reform measures and aims to (i) supply electricity to 86% of households by 2010 and 98% by 2016, and (ii) ensure electricity tariffs are competitive with those in other countries and sufficient for utilities to be viable.

Under the NEPS, the Government is accelerating its long-term generation expansion plan (LGEP) to build up generation capacity, primarily with bilateral funding. At the same time, it is

continuing its loss reduction efforts and launching a demand-side management program to improve energy efficiency. Substantial investments will be required to strengthen the transmission network and for power plants. The huge potential for energy conservation through demand-side management needs to be more actively tapped.

The share of thermal power in the power generation mix has increased dramatically from 1% in 1986 to 58% in 2008 as the entire demand growth has been served by oil-fired thermal generation. This poses a serious threat to the country's energy security as well as to the environment, given Sri Lanka's overdependence on imported fossil fuels. Coupled with fuel price increases and the delayed construction of new hydropower plants, generation costs have substantially increased. There is an urgent need to develop clean energy and indigenous renewable energy sources.

To achieve the electrification target under the TYDF, particular attention needs to be paid to regions with serious power shortages and many unconnected households, including conflict affected areas. The transmission system is currently too weak to meet growing demand in the regions. Despite the Government's intensive investment program to expand the rural distribution network, many poor households remain unconnected even in areas connected to the grid because they cannot afford the initial cost of service connection.

The Project will support the Government to address these issues through investment loans and grant and associated technical assistance.

The Government has taken measures to strengthen governance and rationalize tariffs. The Sri Lanka Electricity Act has been passed by Parliament in March 2009. It will empower the Public Utilities Commission of Sri Lanka (PUCSL) to regulate the power sector. To restore the financial viability of the sector, the Government has restructured the debt of the Ceylon Electricity Board (CEB) and raised tariffs by 30% in 2008 to reduce its cash shortfall substantially. The Project will support further strengthening of the governance of the sector through its associated technical assistance for capacity development of PUCSL and CEB.

Impact Reliable and affordable power supply for sustained and inclusive economic growth
Project Outcome
Description of Outcome Improved coverage and efficiency in service delivery by CEB and LECO
Progress Toward Outcome The project has 13 International Competitive Bidding (ICB) procurement packages on turnkey basis and one consulting services contract, and one ICB goods package. CEB is responsible for 12 ICB procurement packages, and the consultancy services contract and the ICB goods package, while LECO is responsible for one ICB turnkey package. The contract for consultancy services was signed on 8 April 2010, and consultancy services are ongoing. Out of 13 ICB turnkey packages, 7 contracts have been completed while implementation is ongoing for balance 6 packages . Technical bid evaluation is ongoing for ICB goods contract. Procurement under Grant Proceeds has been completed
Implementation Progress
Description of Project Outputs

Energy Efficiency Improvement

1. Strengthened transmission and distribution network and central system control.

2. Demand -side management of municipal street lighting

Renewable Energy Development

3. Removal of network bottleneck for small hydropower projects

Access for the Poor

4. Strengthened transmission network in the Eastern Province

5. Expanded credit support program for service connection in the selected provinces

Capacity Development

6. Strengthened institutional capacity for effective regulation of the power sector

7. Efficient project management

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

1. Under implemetation with delays

2. Completed.

3. Completed

4. Completed

5. Credit line for poor was establised in April 2014. As of 30 June 2015 a total of 13,001 appllication received, 10,158 application approved and 7,894 service connection given

6. Completed

7. As per New implementation arrangemnt CEB is directly implementing the credt line program. The implementation is ongoing

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects

CEB and LECO have prepared initial environmental examinations (IEEs) for parts 1, 2, 3, 6, and 7. CEB has held public consultation meetings. All grid substations planned for augmentation are located within the existing premises of either CEB or LECO. Minimal environmental impacts are experienced from the siting of new facilities. All grid substations have storm water drainage through covered surface drains. The construction and operation phase, measures are being taken to minimize environmental impacts. Some potential environmental impacts associated with the construction of the proposed 132 kV transmission lines were experienced. To minimize these, CEB has observed the route selection criteria set out in the national regulations and has adopted best environmental practices. In general, environmental impacts are ranked low or low to medium and have been adequately addressed through mitigation measures in the environmental management plans prepared for each subproject. Both CEB and LECO have sufficient capacity to implement the safeguard measures based on the Plans. ADB has classified the Project environmental category B

Revised IEEs in connection with with inclusion of details relating to replacement of Earth Wire with Optical Fiber Ground Wire on some transmission lines under Part 1 of the project approved by ADB on 25 Feb 2011.

Involuntary Resettlement The Project is not entail any land acquisition. About 480 ha of private land might be temporarily affected by the erection of transmission towers and stringing of transmission lines. As a result, a maximum of 1,800 households might be temporarily affected, although not significantly. As far as possible, CEB is ensuring that construction of towers and stringing of lines will not be carried out during the cropping season to reduce the impact on the local rice crop. A short resettlement plan has been prepared by CEB for the transmission and substation parts (except for part 1, which does not have any adverse social impact).
Indigenous Peoples No indigenous people are directly affected by the project
Stakeholder Communication, Participation, and Consultation
During Project Design All relevant stakeholders, including affected communities and affected people, were fully consulted during project preparation.
During Project Implementation Public consultation with all stakeholders will continue throughout implementation of the project.
Business Opportunities
Consulting Services Consulting service is ongoing.
Procurement All procurement to be financed under the ADB loan will be carried out in accordance with ADB's Guidelines on Procurement.Contract packages includes, new system control center, construction of new and augmentation of existing grid substations for renewable energy projects and transmission system.
Responsible ADB Officer Ranishka Yasanga Wimalasena
Responsible ADB Department South Asia Department
Responsible ADB Division Sri Lanka Resident Mission
Executing Agencies
Ministry of Power and Energy (MOPE)Mr. M.M.C. FerdinandoNo. 80, Sir Emest de Silva Mawatha, Colombo 07, Sri Lanka
Timetable
Concept Clearance 22 Jan 2008
Fact Finding 13 Feb 2008 to 22 Feb 2008
MRM 09 Jun 2008
Approval 14 Apr 2009
Last Review Mission -
PDS Creation Date 21 Apr 2008
Last PDS Update 25 Aug 2015

Grant 0149-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Apr 2009 17 Jun 2009 09 Feb 2010 30 Sep 2013 31 Mar 2015 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 5.00 Cumulative Contract Awards
ADB 4.20 14 Apr 2009 3.86 0.00 92%
Counterpart 0.80 Cumulative Disbursements
Cofinancing 0.00 14 Apr 2009 3.83 0.00 91%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Partly satisfactory - - - - Satisfactory

Loan 2518-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Apr 2009 17 Jun 2009 09 Feb 2010 30 Nov 2013 30 Nov 2015 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 159.25 Cumulative Contract Awards
ADB 135.00 14 Apr 2009 117.53 0.00 87%
Counterpart 24.25 Cumulative Disbursements
Cofinancing 0.00 14 Apr 2009 97.32 0.00 72%

Loan 2519-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Apr 2009 17 Jun 2009 09 Feb 2010 30 Sep 2013 30 Sep 2015 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 25.00 Cumulative Contract Awards
ADB 25.00 14 Apr 2009 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 14 Apr 2009 0.66 0.00 20%

TA 7265-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Apr 2009 30 Jun 2009 30 Jun 2009 30 Jun 2011 30 Apr 2012 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 0.00 0.00 0.00 0.00 1,000,000.00 14 Apr 2009 915,493.93
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - - - Satisfactory

TA 7266-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Apr 2009 08 Jul 2009 08 Jul 2009 31 Jan 2013 31 Oct 2014 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
2,000,000.00 0.00 500,000.00 0.00 0.00 0.00 2,500,000.00 14 Apr 2009 1,035,420.68
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - - - Satisfactory

TA 7267-SRI

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
14 Apr 2009 16 Jul 2009 16 Jul 2009 30 Jun 2010 30 Sep 2012 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
800,000.00 0.00 200,000.00 0.00 0.00 0.00 1,000,000.00 14 Apr 2009 749,265.73
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - - - Satisfactory
Title Document Type Document Date
Clean Energy and Access Improvement Project Procurement Plans Jun 2015
Clean Energy and Access Improvement Project: Demand-Side Management for Municipal Street Lighting Consultants' Reports Jul 2012
Amendment to Loan Agreement (Special Operations) for Clean Energy and Access Improvement Project Loan Agreement (Special Operations) Jun 2012
Amendment to the Grant Agreement for Clean Energy and Access Improvement Project between Democratic Socialist Republic of Sri Lanka and Asian Development Bank dated 04 June 2010 Grant Agreement Jun 2010
Clean Energy and Access Improvement Project Project/Program Administration Manual Jun 2009
Loan Agreement for Clean Energy and Access Improvement Project between Democratic Socialist Republic of Sri Lanka and Asian Development Bank dated 17 June 2009 Loan Agreement (Ordinary Resources) Jun 2009
Project Agreement for Clean Energy and Access Improvement Project between Asian Development Bank and Ceylon Electricity Board and Lanka Electricity Company (Private) Limited dated 17 June 2009 Project/Program Agreement Jun 2009
Grant Agreement for Clean Energy and Access Improvement Project between Democratic Socialist Republic of Sri Lanka and Asian Development Bank dated 17 June 2009 Grant Agreement Jun 2009
Loan Agreement (Special Operations) for Clean Energy and Access Improvement Project between Democratic Socialist Republic of Sri Lanka and Asian Development Bank dated 17 June 2009 Loan Agreement (Special Operations) Jun 2009
Clean Energy and Access Improvement Project Reports and Recommendations of the President Mar 2009

Evaluation Documents

See also: Independent Evaluation

No documents found.


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