Nepal: Energy Access and Efficiency Improvement Project

Sovereign Project | 40553-013

Summary

The Project consists of seven components under three main categories: (i) energy access, (ii) clean energy, and (iii) capacity building.

Component 1-Energy Access: Facilitating Access to Clean Energy. Component 1 consists of (i) constructing the Middle Marsyangdi Damauli Marsyangdi transmission line and associated facilities to strengthen the evacuation of power from the 70 megawatt (MW) Marsyangdi hydropower station, (ii) constructing the second circuit of the Butwal Kohalpur transmission line to improve cross-border power import capacity, and (iii) constructing and expanding the Chapali and Matatirtha substations and installation of capacitor banks to strengthen the capability of the transmission network to transfer power.

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Consulting Notices

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Procurement Documents


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Project Name Energy Access and Efficiency Improvement Project
Project Number 40553-013
Country Nepal
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0182-NEP: Energy Access and Efficiency Improvement Project
Climate Change Fund US$ 300,000.00
Grant 0183-NEP: Energy Access and Efficiency Improvement Project
Clean Energy Fund - Multi-Donor US$ 4.20 million
Loan 2587-NEP: Energy Access and Efficiency Improvement Project
Asian Development Fund US$ 65.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector Energy - Electricity transmission and distribution - Energy efficiency and conservation
Gender Equity and Mainstreaming
Description

The Project consists of seven components under three main categories: (i) energy access, (ii) clean energy, and (iii) capacity building.

Component 1-Energy Access: Facilitating Access to Clean Energy. Component 1 consists of (i) constructing the Middle Marsyangdi Damauli Marsyangdi transmission line and associated facilities to strengthen the evacuation of power from the 70 megawatt (MW) Marsyangdi hydropower station, (ii) constructing the second circuit of the Butwal Kohalpur transmission line to improve cross-border power import capacity, and (iii) constructing and expanding the Chapali and Matatirtha substations and installation of capacitor banks to strengthen the capability of the transmission network to transfer power.

Component 2- Energy Access Quality Enhancement: Component 2 consists of constructing eight primary distribution substations and three switching stations to strengthen the electricity system's ability to connect new consumers and to improve the quality of electricity supply to existing consumers.

Component 3-Clean Energy Plant Improvement: Clean Energy Plant Improvement. Component 3 involves rehabilitating two small-scale run-of-river hydropower plants at Marsyangdi (69 MW) and Gandak (15 MW) to increase the efficiency. Component 4: Supply-Side Energy Efficiency Improvement.

Component 4- Supply Side Energy Efficiency Improvement: will develop a pilot project to rebuild selected distribution feeders and low-voltage networks which have unacceptably high losses, using international best practice to reduce both technical and commercial losses. Component 5: Energy Efficiency in Lighting.

Component 5-Energy Efficiency in Lighting: involves distributing approximately 1 million compact fluorescent lamps to households and implementation support to improve energy efficiency in lighting.

Component 6-Renewable Energy for Street Lighting: Component 6 consists of the installation of 1,000 solar and solar-wind streetlights in Bhaktapur, Kathmandu, and Lalitpur municipal areas to reduce the burden on the main electricity grid.

Component 7-Capacity Building: Component 7 involves assisting the Nepal Electricity Authority (NEA) by providing expert services to formulate, design, and implement public private partnerships (PPPs) in three identified distribution areas, and capacity building and implementation support to the NEA for component 4.

Project Rationale and Linkage to Country/Regional Strategy The proposed loan and grants will directly address the urgent needs attributed to the electricity supply crisis in Nepal, through rehabilitation of two hydropower plants, supply-side energy efficiency, and demand-side management. The transmission network strengthening will also add supply capacity by increasing evacuation of power from hydropower stations in the western region and allow increased energy imports across the western border in the short term. In the medium term, the transmission network strengthening will allow cross-border energy exports, while distribution strengthening will facilitate additional consumer connections and increased energy efficiency. PPPs in distribution will help the NEA to pilot private sector involvement in improving distribution efficiency. These project interventions will also lead to improved financial performance of the NEA and sustainability of the sector through increased revenues, reduced losses, and improved efficiency.
Impact Increased access to electricity across the country
Project Outcome
Description of Outcome Reliable and energy efficient power supply with increased access and operational efficiency in the project areas.
Progress Toward Outcome The works for some of the components are already complete and others are ongoing; the outcome is likely to be achieved.
Implementation Progress
Description of Project Outputs

1. Component 1 - Construction of Middle Marshyangdi- Marshyangdi 132 kV line, Butwal-Kohalpur 132 kV line second circuit, and Chapali grid substation; expansion of Matatirtha grid sublstation; and installation of capacitor banks;

2. Component 2 - Construction of eight primary distribution substations and three distribution switching stations;

3. Component 3 - Rehabilitation of Marshyandi and Gandak hydropower stations;

4. Component 4 - Rebuilding of of 11kV feeders, relevant low-voltage networks, and associated facilities in pilot areas;

5. Component 5 - Countrywide expansion of the CFL program;

6. Component 6 - Establishment of solar/solar-wind street lighting systems;

7. Component 7 - Introduction of PPP in distribution and Implementation support for component 4

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

1. Works for Dumre-Damauli 132 kV Transmission Line and Middle Marsyangdi-Marsyangdi 132 kV Second Circuit Stringing and New Marsyangdi 132 kV Substation and Associated Line Bay Extension in the surrounding region are in progress. The construction of substations under Butwal-Kohalpur 132 kV second circuit transmission line stringing project is complete and works for the line is almost complete. Works under Chapali is moving towards completion. Matatirtha substation expansion works and installation of capacitor banks in various grid substations is complete. Civil works is ongoing under Grid Substation Reinforcement Project in Birgunj, Parwanipur and Hetauda.

2. Under Supply, Delivery and Construction of 33/11 kV Substation, two substations Barathawa and Mirchaiya are charged and the remaining will be charged by April 2015.: Major works under Supply, Delivery and Construction of 33/11 kV Substation and Switching Stations project have been completed. Construction of 33 kV and 11 kV Lines at Bardiya, Barathawa and Mirchaiya are complete and works are ongoing at Baniyani, Dhanushadham, Paraul, Banskot, Mulpani, Swoyambhu and Mirmi.

3. Marsyangdi Weir Control System Modernization project is complete. Works are in progress for Excitation System Modernization and Modification of Marshyangdi HPS and Supply and Installation of Trash Rack Cleaning Machine of Gandak HPS.

4. Under distribution system reinforcement and loss reduction, supply of transformers is in process, supply of conductors are complete, and construction of lines are being done.

5. Countrywide distribution of CFL is complete.

6. Solar street lights have been installed under two subprojects including solar-wind hybrid systems. Installation of solar rooftop systems at Bir Hospital in Kathmandu and NEA Training Center in Bhaktapur are also complete.

7. Implementation of PPP component is under discussion at NEA; following the report of the PPP consultants.

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement
Indigenous Peoples
Summary of Environmental and Social Aspects
Environmental Aspects The Government of Nepal has undertaken initial environmental examinations and developed an environmental management plan for all relevant packages and included in the bidding/contract documents.
Involuntary Resettlement A full resettlement plan (RP) was prepared during project preparation in consultation with affected parties, local authorities, and the NEA, in accordance with ADB's Involuntary Resettlement Policy (1995). It will guide the resettlement process and describe the nature of impacts, range of and eligibility for entitlements, income and livelihood restoration, rehabilitation assistance, and compensation for losses incurred. The resettlement plan will be updated as needed and publicly disclosed to interested stakeholders on the ADB and NEA websites. Accordingly, EA is currently in the process to update the RP to reflect the change in number of affected people due to change in route alignment in one transmission line package.
Indigenous Peoples No adverse impact is expected on indigenous people's communities.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations were conducted during project preparation with relevant stakeholder groups. District stakeholders were consulted to inform them about the project, collect required information and suggestions relevant to the project, and seek their support tor project preparation. Consultation with the local community, including the project-affected families, was undertaken to (i) disseminate information about the proposed projects and likely impacts, (ii) solicit their view and suggestion, (iii) collect socioeconomic and census data, (iv) assess the scope of effects on private and community assets, (v) assess financial assistance to be made to the affected people.
During Project Implementation Regular review missions and regular meetings are conducted by ADB.
Business Opportunities
Consulting Services

All the consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants.

Contracts for all 6 consulting services for loss reduction project, distribution PPP project, renewable energy for street lighting and waste management policy have been awarded.

Procurement

All procurement to be financed under the ADB will be carried out in accordance with ADB's Procurement Guidelines. International competitive bidding procedures will be used for all the components, except one contract package under component 3(clean energy plant improvement) and the single package under component 5 (energy efficiency in lighting).

All 23 contract packages have been awarded.

Responsible ADB Officer Pushkar Manandhar
Responsible ADB Department South Asia Department
Responsible ADB Division Nepal Resident Mission
Executing Agencies
Nepal Electricity AuthoritySanepa, Lalitpur
Nepal
Timetable
Concept Clearance 14 Mar 2009
Fact Finding 16 Mar 2009 to 27 Mar 2009
MRM 08 Jul 2009
Approval 27 Nov 2009
Last Review Mission -
PDS Creation Date 30 Jul 2009
Last PDS Update 25 Mar 2015

Grant 0182-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2009 11 Mar 2010 04 Jun 2010 30 Mar 2013 30 Sep 2014 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 0.30 Cumulative Contract Awards
ADB 0.30 27 Nov 2009 0.03 0.00 9%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 27 Nov 2009 0.02 0.00 7%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - Satisfactory - Satisfactory Satisfactory

Grant 0183-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2009 11 Mar 2010 04 Jun 2010 30 Mar 2013 30 Sep 2015 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 4.20 Cumulative Contract Awards
ADB 0.00 27 Nov 2009 0.00 3.72 89%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 4.20 27 Nov 2009 0.00 3.63 86%

Loan 2587-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2009 11 Mar 2010 04 Jun 2010 30 Mar 2015 31 Dec 2015 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 89.20 Cumulative Contract Awards
ADB 65.00 27 Nov 2009 51.93 0.00 94%
Counterpart 24.20 Cumulative Disbursements
Cofinancing 0.00 27 Nov 2009 38.50 0.00 70%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - Satisfactory - Satisfactory Satisfactory

Evaluation Documents

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