China, People's Republic of: MFF-Gansu Heihe Rural Hydropower Development Investment Program - Project 2: Dagushan Hydropower Project

Sovereign Project | 39652-033

Summary

The Investment Program will finance the construction of 2 medium-sized hydropower plants (HPPs) in the Heihe river cascade hydropwoer development scheme. The Investment Program's main impact will be to provide environmentally clean power supply in rural areas of Gansu Province.

Latest Project Documents

Project Results

 

13

kilometers of transmission lines installed or upgraded

 

195,751

tCO2 equivalent per year in greenhouse gas emission reduction

 

65

MW installed energy generation capacity using conventional and renewable energy sources


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Project Name MFF-Gansu Heihe Rural Hydropower Development Investment Program - Project 2: Dagushan Hydropower Project
Project Number 39652-033
Country China, People's Republic of
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2408-PRC: MFF-Gansu Heihe Rural Hydropower Development Investment Program - Project 2: Dagushan Hydropower Project
Ordinary capital resources US$ 28.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector Energy - Large hydropower generation
Gender Equity and Mainstreaming
Description The Investment Program will finance the construction of 2 medium-sized hydropower plants (HPPs) in the Heihe river cascade hydropwoer development scheme. The Investment Program's main impact will be to provide environmentally clean power supply in rural areas of Gansu Province.
Project Rationale and Linkage to Country/Regional Strategy

PRC's sustained economic growth and low per capita energy consumption are increasing the demand for electricity, which has outpaced economic growth in the last 3 years. The result is power shortages in many parts of PRC. The power shortages have affected the rural population disproportionately. With coal-fired power plants supplying about 81% of the country's electricity, the electricity sector is a major air polluter. More than 60% of the cities do not meet air quality standards. Acid rain falls on one third of the country. The Government is committed to minimize emissions and improve air quality. In 2006, it enacted the Renewable Energy Law, which is expected to lead to about 120 gigawatts (GW) of additional clean and renewable energy in the country by 2020. Small and medium hydropower development is an integral part of the renewable energy program and is expected to provide 80 GW of the additional capacity by 2020.

In Gansu, about 81% of the electricity was produced by coal-fired power plants in 2005. Thirteen of Gansu's 14 cities do not meet air quality standards; its capital, Lanzhou, has the worst air pollution index of 47 major cities. Some parts of Gansu, such as the Hexi corridor, have faced chronic power shortages due to limited local generation capacity and large distances from nearby power plants. Heihe river, flowing in the remote mountainous areas of Zhangye, a predominantly rural area located in the middle of the Hexi corridor, presents an excellent source of clean and renewable energy closer to the power-deficient area in Gansu. ZCG and GPG are committed to utilize this clean energy source to provide benefits to Zhangye and the Hexi corridor in an environmentally sustainable manner.

ADB has an ongoing successful engagement with one of the seven HPPs of the scheme. ADB has approved a project loan in 2003 to support construction of the 102 MW Xiaogushan HPP, which was completed in July 2006, 1 year ahead of schedule. Project implementation is rated as highly satisfactory and has complied with all loan covenants. The Project Implementing Agency, Zhangye City Government, and Gansu Provincial Government are fully familiar with ADB's requirements and have the required institutional capacity to implement the Investment Program. ADB is also supporting the development of clean and renewable energy in Gansu since 2001. The enactment of the Renewable Energy Law, and Gansu Provincial Government and Zhangye City Government's commitment to utilize clean and renewable energy in Zhangye have created the enabling conditions for accelerated hydropower development on Heihe river. ADB's previous engagement in the scheme has strengthened the rationale for the Investment Program. Considering the discrete components of the scheme, sequential construction, and staggered financing needs, the MFF is the most appropriate financing tool for the Investment Program.

Impact Environmentally clean power supply supporting economic growth in the rural areas of Gansu Province.
Project Outcome
Description of Outcome Reliable, clean and afforadable hydropower generation supplied to the rural consumers in Zhangye City of Gansu Province.
Progress Toward Outcome Domestic physical completion acceptance was obtained in Sep 2011. Outcome being achieved towards the project completion of Dec 2012.
Implementation Progress
Description of Project Outputs 1. Hydropower developed - Tranche 2 (Project 2): Dagushan Hydropower Project
Status of Implementation Progress (Outputs, Activities, and Issues) Acheived. Dagushan Hydropower Project was put into operation in July 2009 with 65 MW installed capacity and 259 GWh power production was achieved in 2010 which is 129% of the planned annual power generation.
Geographical Location Dagushan, Zhangye City, Gansu Province, PRC.
Safeguard Categories
Environment A
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The Project prvoides significant environment benefits in terms of avoided air pollution. External environmental montoring reports have been submitted on time.
Involuntary Resettlement The resettlment impact is insignificant. Only a few households were affected. Lanzhou University was recruited as the external agency to monitor resettlement impact. Monitoring reports have been submitted on time.
Indigenous Peoples Not applicable.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations with stakeholders, including various levels governments, implementing agencies, and beneficiaries were undertaken.
During Project Implementation Consultations with stakeholders, including various levels governments, implementing agencies, and beneficiaries were undertaken.
Business Opportunities
Consulting Services

Procurement Method to be used when the value ($) is

QCBS Larger than 200,000

CQS Below 200,000

LCS Below 100,000

Procurement The PIA submitted a draft Procurement Plan consistent with the procurement threshold level agreed in the FFA. It was reviewed by ADB in June 2007 and endorsed. The advance contracting and 20% retroactive financing for both tranches in the MFF were approved by ADB.
Responsible ADB Officer Xinjian Liu
Responsible ADB Department East Asia Department
Responsible ADB Division PRC Resident Mission
Executing Agencies
Gansu Provincial GovernmentMr. Zhu Xingjiedjj-118@163.comQingnian East Street, Zhangye City, 734000, Gansu Province, P. R. China
Timetable
Concept Clearance 28 Apr 2006
Fact Finding -
MRM 06 Mar 2007
Approval 28 Jan 2008
Last Review Mission -
PDS Creation Date 10 Jun 2008
Last PDS Update 23 Feb 2012

Loan 2408-PRC

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Jan 2008 04 Mar 2008 27 Jun 2008 31 Dec 2012 - 13 Mar 2012
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 60.88 Cumulative Contract Awards
ADB 28.00 28 Jan 2008 28.00 0.00 100%
Counterpart 32.88 Cumulative Disbursements
Cofinancing 0.00 28 Jan 2008 28.00 0.00 100%

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