Indonesia: Java-Bali Electricity Distribution Performance Improvement Project

Sovereign Project | 40061-013

Summary

The key objectives of the project are to mainstream energy efficiency as a strategic planning option to reduce the overall cost of operating the distribution business for PLN and its customers; and deliver good quality (less voltage fluctuations and improved harmonics) and reliable (less frequent and shorter-duration interruptions) electricity.

The proposed energy efficiency project will deliver good quality, reliable power with lower losses by using existing distribution resources more efficiently. The proposed project will: (i) improve overall efficiency of electricity distribution in the Java Bali grid, and (ii) promote demand side management practices in the form of Retrofitting to LED by improving capacity within municipal governments, PLN and the private sector in select Indonesian cities to design, finance and implement municipal street lighting upgrade programs.

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Consulting Notices

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Procurement Notices

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Procurement Documents

Title Document Date
Java-Bali Distribution Improvement Project Jun 2013

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Project Name Java-Bali Electricity Distribution Performance Improvement Project
Project Number 40061-013
Country Indonesia
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Grant 0198-INO: Java-Bali Electricity Distribution Performance Improvement Project
Clean Energy Fund - Multi-Donor US$ 1.00 million
Loan 2619-INO: Java-Bali Electricity Distribution Performance Improvement Project
Ordinary capital resources US$ 50.00 million
Loan 8245-INO: Java-Bali Electricity Distribution Performance Improvement Project
Agence Francaise de Developpement US$ 50.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector Energy - Electricity transmission and distribution
Gender Equity and Mainstreaming Some gender elements
Description

The key objectives of the project are to mainstream energy efficiency as a strategic planning option to reduce the overall cost of operating the distribution business for PLN and its customers; and deliver good quality (less voltage fluctuations and improved harmonics) and reliable (less frequent and shorter-duration interruptions) electricity.

The proposed energy efficiency project will deliver good quality, reliable power with lower losses by using existing distribution resources more efficiently. The proposed project will: (i) improve overall efficiency of electricity distribution in the Java Bali grid, and (ii) promote demand side management practices in the form of Retrofitting to LED by improving capacity within municipal governments, PLN and the private sector in select Indonesian cities to design, finance and implement municipal street lighting upgrade programs.

Project Rationale and Linkage to Country/Regional Strategy

Indonesia ranks among the top 20 polluters in the world. The country's CO2 emissions per capita have grown significantly since the 1980s, a large part of which is from the burning of oil. Emissions will get worse in the short term, as the Government plans to rapidly expand the use of coal for power generation to reduce its reliance on imported oil.

The Government's energy conservation and energy efficiency initiatives will offset part of these emissions, and these efforts need to be part of mainstream planning to have larger impact. PT Perusahaan Listrik Negara (State Electricity Corporation [PLN]), the state-owned power utility, has invested in energy efficiency projects for its power distribution, which has reduced overall distribution losses and CO2 emissions. To maintain the momentum, the PLN has an ambitious plan to invest about $1.2 billion in distribution between 2010 and 2014. A large part of this plan will be financed by internal resources, and loans from bilateral and multilateral partners.

The Asian Development Bank (ADB) will engage with the PLN in its overall energy efficiency improvement initiative, with the proposed small Project covering the entire Java?Bali network with cofinancing from the Agence Frangaise de Diveloppement (AFD). The proposed project components could be implemented within 2 years. If the proposed Project and the partnership in financing is successful, ADB will scale up this operation with a sector project (using a multitranche financing facility) and support part of the PLN's financing needs for the energy efficiency strategy.

The Project's objective is to reduce the peak load demand and system losses by implementing distribution network rehabilitation and an efficient lighting program that will also contribute towards greenhouse gas reduction. Carbon credits will be sought following the approved methodology of the Clean Development Mechanisms (CDM) executive board. This investment is in line with ADB's commitment to clean energy and energy efficiency across Asia.

About 200 megawatts (MW) equivalent in distribution system capacity will be freed and about 400 gigawatt-hours (GWh) will be saved annually through energy efficiency at a cost well below the cost of developing equivalent new capacity. This will reduce the emissions of Indonesia's power sector by about 330,000 tons (t) each year.

Impact Reduced CO2 emissions by the Indonesian power sector
Project Outcome
Description of Outcome Contribute to PLN's overall power distribution efficiency and power quality
Progress Toward Outcome The project supports the improvement of distibution power system in Bali and Central Java as all of the activities in this region have been completed. The project supports the reduction of losses and number of trips and interuptions.
Implementation Progress
Description of Project Outputs

1. Reduced distribution losses in selected areas

2. Incremental sales

3. Increased access to power

4. Reduced peak demand and increased awareness of efficient lighting options in isolated grids and selected islands

5. Efficient project implementation

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

All of 11 packages (5 packages goods and the other are civil works) have been awarded this year, and remaining 4 packages are expected to be completed by next year. This loan was extended until 30 November 2015 to accomodate the delays due to the prolonged permit from Local Governments, particularly in West Java region.

Grant to retrofit street and power substation lamps have been initated and PLN, ADB and MEMR are working closely to implement this program. Two cities, one unit power plants and two unit substation have been selected for the pilot projects. Additional resources from ADB supports this project for procuring the LED lamps for street light.

Geographical Location Java Bali Island, Indonesia
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

ADB has discussed with PLN the types of distribution lines and devices that will be

installed, the types of waste that could be generated during the implementation of the project, and PLN's corporate management strategy for handling such waste materials. Most capacitors and transformers will be newly installed and some will be reinforced, new distribution lines will be installed, mostly pole-mounted transformers will be added, and no new substations will be built. Waste generated will be minimized and contain no hazardous materials. PLN also confirmed that no circuit breakers and capacitors will be decommissioned under the Project. Such activities do not require UKL/UPL (environmental management certificate) according to the Government's AMDAL or environmental impact assessment process law. The Project is assessed environment category C, and as such, according to ADB's Environment Policy (2002) and Operations Manual Section F1/OP (2006), an Environmental Impact Assessment (EIA) or Initial Environmental Examination (IEE) is not required.

Involuntary Resettlement

The Project will not involve any land acquisition and resettlement. All rehabilitation

activities will be undertaken on land already owned or leased by PLN or within premises of existing facilities. Idle land owned by the Government is often occupied by squatters, but PLN has confirmed that no such cases are involved in this project. PLN also confirmed that the project activities in central and east Java will not involve any involuntary resettlement.

ADB's Project Appraisal Mission visited both of these sites and confirmed this claim. On the basis that no resettlement impacts are envisaged, the resettlement impact of the Project will be category C and therefore no resettlement plan is required. If the Project changes and needs to be recategorized, a resettlement plan will be prepared at that time.

Indigenous Peoples The Project will not have any negative impact on ethnic minority groups; overall the effects will be significantly positive because customers from all ethnic groups will benefit from the Project. Therefore, ADB's indigenous peoples policy will not be triggered.
Stakeholder Communication, Participation, and Consultation
During Project Design During the feasibility study, focus group interviews were conducted with customers to identify the potential impact of the Project in terms of accesss to reliable electricity, and its impact on daily life, social services, and business.
During Project Implementation As part of its own requirements, PLN will meet stakeholders in each of the five regions during implementation with support from implementation consultants. During the feasibility study, focus interviews were conducted with customers to identify the potential impact of the Project in terms of access to reliable electricity and its impact on daily life, social services, and business. ADB and AFD missions will meet stakeholders during project inception and review missions.
Business Opportunities
Consulting Services

1) ICB for supply of 520 km of MV cable 240 mm2, 110 km of MV cable 300 mm2, 8 km of mV 150 mm2 twisted aerial cable

2) ICB for supply of 2,460 km of 150 mm2 AAAC, 2 120 km of 150 mm2 A3CS, 180 km of 240 mm2 A3C and 400 km of 70 m2 A3C conductors

3) NCB for supply of 1,550 km of LV 70 mm2 twisted cable

4) ICB for supply of 3-phase transformers: 160 50 kVA, 1,210 100 kVA, 295 160 kVA, 89 200 kVA, 57 250 kVA, 25 315 kVA, 164 400kVA, 77 630 kVA, 5,630 kVA compact type, 15 1,000 kVA; and 2,900 50 kVA 1-phase transformers

5) ICB for supply and construction of 25 km of 20 kV OHLines and 120 km of LV lines, laying of 180 km of Underground cables, installation of 262 MV/LV transformers

6) ICB for supply and laying of 121 km of Underground cables, construction of 105 km of 20 kV OHLines and 75 km of LV lines, installation of 192 MV/LV transformers, supply and installation of 450 LV panels, construction of 10 switching stations and installation of 73 MV cubicles.

7) NCB for supply and laying of 128 km of underground cables, construction of 86 km of 20 kV OHLines and 100 km of LV lines, installation of 219 MV/LV transformers, supply and installation of 465 LV panels, construction of 5 witching statiosn and instalation of 23 MV cubicles

8) NCB for supply and construction of 97 km of 20 kV OHLines and addition of two phases on 85 km of 1-phase lines installation of 2,888 MV/LV transformers. Supply and installation of 13 capacitor banks

9) ICB for supply and construction of 1,095 km of 20 kV OHLines and 970 km of LV lines installation of 1,055 MV/LV transformers

10) NCB for supply and laying of 4 km of Underground cables, construction of 180 km of 20 kV OHLines and 100 km of LV lines, installation of 296 MV/LV tansformers

Procurement An international consulting firm will be engaged to manage implementation of the Project. The firm will deliver 105 person-months of consultingservices (15 person-months of international and 90 person-months of national consulting) following ADB's quaity-and cost-based selection method with 80;20 ratio and using full technical proposal. Individual consulatns wil deliver 18 person-months of consulting services (6 person-months of international and 12 person- monthss of national consulting) for implementation of the pilot project for efficient lighting.
Responsible ADB Officer Bagus Mudiantoro
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Indonesia Resident Mission
Executing Agencies
Perseroan PT. Perusahaan Listrik NegaraNurah AdnyanaJalan Trunojoyo Blok M1/135
Kebayoran Baru, Jakarta 12160
Indonesia
Timetable
Concept Clearance 29 Apr 2009
Fact Finding 16 Mar 2009 to 31 Mar 2009
MRM 19 May 2009
Approval 22 Mar 2010
Last Review Mission -
PDS Creation Date 10 May 2006
Last PDS Update 31 Mar 2015

Grant 0198-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Mar 2010 29 Jun 2010 25 Apr 2011 30 Nov 2012 30 Nov 2015 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 1.00 Cumulative Contract Awards
ADB 0.00 22 Mar 2010 0.00 0.53 53%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 1.00 22 Mar 2010 0.00 0.11 11%

Loan 2619-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Mar 2010 22 Jun 2010 25 Apr 2011 30 Nov 2012 30 Nov 2015 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 50.00 Cumulative Contract Awards
ADB 50.00 22 Mar 2010 40.06 0.00 80%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 22 Mar 2010 29.64 0.00 59%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

Loan 8245-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Sep 2009 03 Jun 2010 03 Jun 2010 30 Nov 2012 31 Oct 2014 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 50.00 Cumulative Contract Awards
ADB 0.00 30 Sep 2009 0.00 36.78 74%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 50.00 30 Sep 2009 0.00 9.64 19%

Safeguard Documents

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Evaluation Documents

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