Nepal: Electricity Transmission Expansion and Supply Improvement Project

Sovereign Project | 41155-013

Summary

The project will improve the reliability of energy supply in Nepal and strengthen the transmission infrastructure needed to promote Nepal's capacity for cross-border energy trade. It will provide support in three critical areas in the electricity supply industry, which has experienced severe underinvestment: (i) electricity transmission capacity expansion, (ii) strengthening of distribution systems including those along the Tamakoshi (Khimti)-Kathmandu transmission line, and (iii) rehabilitation of selected small hydropower plants.

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Procurement Documents


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Project Name Electricity Transmission Expansion and Supply Improvement Project
Project Number 41155-013
Country Nepal
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Grant 0270-NEP: Electricity Transmission Expansion and Supply Improvement Project
Asian Development Fund US$ 14.00 million
Asian Development Fund US$ 5.00 million
Loan 2808-NEP: Electricity Transmission Expansion and Supply Improvement Project
Asian Development Fund US$ 42.00 million
Asian Development Fund US$ 14.00 million
TA 7923-NEP: Gender-Focused Capacity Development in Clean Energy
Technical Assistance Special Fund US$ 250,000.00
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 - Energy sector development and institutional reform
Gender Equity and Mainstreaming Effective gender mainstreaming
Description The project will improve the reliability of energy supply in Nepal and strengthen the transmission infrastructure needed to promote Nepal's capacity for cross-border energy trade. It will provide support in three critical areas in the electricity supply industry, which has experienced severe underinvestment: (i) electricity transmission capacity expansion, (ii) strengthening of distribution systems including those along the Tamakoshi (Khimti)-Kathmandu transmission line, and (iii) rehabilitation of selected small hydropower plants.
Project Rationale and Linkage to Country/Regional Strategy The current available generating capacity of 705 megawatts (MW) in Nepal comes predominantly from hydropower. At system peak time, up to 400 MW of load is shed countrywide, depending on variations in available water resources and transmission limitations. Six hydropower projects totaling 592 MW are presently under construction. Another six projects with a total capacity of 1,335 MW are planned or proposed in the near to medium term. Limited transmission capacity in Western region of Nepal has restricted additional electricity imports through the western border with India. The first large-scale cross-border transmission line with India between Dhalkebar (Nepal) and Muzarffarpur (India), with a capacity of 1,000 MW, is at an advanced stage of preparation. This will enable Nepal to import electricity from India initially and later facilitate hydropower export. However, the full benefits of this critical regional connection can be harnessed only when adequate strengthening of the related transmission infrastructure within Nepal is undertaken.
Impact Increased access to reliable supply of electricity
Project Outcome
Description of Outcome Improved electricity supply
Progress Toward Outcome The various components under the project are at different stages of procurement/ implementation and project outcome is expected to be achieved.
Implementation Progress
Description of Project Outputs

Increased electricity transmission

Expanded electricity distribution

Enhanced electricity generation

Efficient project management

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

1. Stringing of second circuit in Kohalpur-Mahendranagar 132 kV transmission line and construction of various substations along the same route is ongoing. Also work is ongoing for Chapali substation expansion project which is situated in Kathmandu. Preparation is underway for the procurement of 400/220 kV Tamakoshi-Kathmandu Transmission Line and associated substations project.

2. All three contracts relate with augmentation of existing distribution systems and expansion of new distribution systems in the vicinity of the transmission lines- Kohalpur-Mahendranagar and Tamakoshi-Kathmandu awarded. Physical works in the sites currently in progress.

3. Preparation is underway for the procurement of the works for the rehabilitation of Sundarijal and Tinau rehabilitation projects.

4. Project Coordination Office is established with Project Coordinator and support staffs. Project manager and other relevant staffs are assigned to each sub project.

5. An international consulting firm has been hired to support in design, procurement and implementation of 400/220 kV Tamakoshi-Kathmandu Transmission Line and associated substations project.

6. An international consultant (individual) has been mobilized to support in design and implementation of Sundarijal and Tinau rehabilitation projects.

7. Under TA7923, an international consultant and a national NGO have been hired to provide energy-based livelihood training. Basic training has been provided to 1,555 individuals which includes 87.9% female participants. Skill based training for 500 women are being conducted. Awareness raising program has also been conducted.

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

The initial environment examinations were prepared following ADBs Safeguard Policy Statement (2009), the governments environmental impact assessment guidelines, and related national policies and legislation. Public consultation and information disclosure requirements have been met. Alignment of transmission lines has avoided any environmentally and ecologically sensitive areas. Out of the total length of the Tamakoshi (Khimti)-Kathmandu line, 16 kilometers have been reported to pass through some forest areas in Chanrawati Watershed area. Any loss of vegetation within the right-of-way will be directly offset by reforestation activities consistent with the requirements of the government. The NEA will ensure that ongoing reforestation initiatives within the Chanrawati Watershed will not be affected. Installation of the second circuit for the Kohalpur-Mahendranagar line will not have any significant impacts as existing right-of-way will be maintained. Decommissioned equipment and materials from the rehabilitation of distribution substations and the small hydropower plants are not expected to cause any risk to community health and safety as these will be stored on site until they can be safely reused and redistributed to other substations. Disposal of unusable equipment will comply with national and international requirements such as the Stockholm Convention.

The environmental management plan (EMP) includes mitigation measures, monitoring, and adequate budgetary provisions for its implementation. The EMP will be part of the bidding documents and the NEA will supervise the construction contracts and EMP implementation. Monitoring reports will be submitted semiannually by the NEA to ADB. EMPs will be updated if unanticipated impacts are identified during implementation. Third-party services will be utilized for monitoring and mitigation activities as necessary.

Involuntary Resettlement A detailed resettlement plan 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 details the institutional arrangements for implementation, a procedure for grievance redress, a structure for periodic and regular monitoring and reporting of project activities, detailed cost and budget estimates, and a time-bound implementation schedule. The resettlement plan will be updated as needed and publicly disclosed to interested stakeholders on the ADB and NEA websites.
Indigenous Peoples No adverse impacts on indigenous groups are expected from project activities. People using or living along the transmission line will be temporarily impacted and restricted to using affected land for agricultural purposes. Affected persons will be eligible for compensation in line with ADB s Safeguard Policy Statement requirements. Project-affected peoples will be consulted on a regular basis as needed, in a timely, open, transparent, and culturally sensitive manner and in the local language.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations were conducted during project preparation with relevant stakeholder groups (i.e., Ministry of Energy, Nepal Electricity Authority, local authorities, civil society groups, the communities living around the facilities funded under the loan, electricity consumers who benefitted from the project and any associations representing them) through field visits and workshops.
During Project Implementation Regular meetings with the executing agency and implementing agency-Nepal Electricity Authority (NEA) being done. Regular missions to review the progress, identify the issues and ways to resolve them are being carried out. Under TA, stakeholder communication, participation and consultation are being done.
Business Opportunities
Consulting Services

A consulting firm has been recruited, using ADB's Quality and Cost-Based Selection (QCBS) method, to provide support for the 220/400kV Tamakoshi (Khimiti)-Kathmandu Transmission Line and capacity building for staff of the Nepal Electricity Authority. Consultant for the design and implementation of Part C (i.e., the rehabilitation of Sundarijal HPP (640KW) and Tinau HPP (1MW) has been recruited based on the procedures acceptable to ADB for recruiting individual consultants.

A national NGO and an international Technical Advisor have been engaged under the TA project in accordance with ADB Guidelines on the Use of Consultants (2010, as amended from time to time).

Procurement

All procurement to be financed under the ADB will be carried out in accordance with ADBs Procurement Guidelines. International competitive bidding procedures are/ will be used for all the components.

Out of 9 packages, 6 contracts have been awarded and other packages are at various stages of procurement.

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 26 Nov 2010
Fact Finding 22 Aug 2011 to 26 Aug 2011
MRM 06 Oct 2011
Approval 15 Nov 2011
Last Review Mission -
PDS Creation Date 02 Sep 2010
Last PDS Update 18 Mar 2015

Grant 0270-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Nov 2011 23 Mar 2012 21 Jun 2012 31 Dec 2017 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 19.00 Cumulative Contract Awards
ADB 19.00 15 Nov 2011 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 15 Nov 2011 0.00 0.00 0%

Grant 0271-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Nov 2011 23 Mar 2012 21 Jun 2012 31 Dec 2017 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 28.05 Cumulative Contract Awards
ADB 0.00 15 Nov 2011 0.00 12.90 52%
Counterpart 28.05 Cumulative Disbursements
Cofinancing 0.00 15 Nov 2011 0.00 1.32 5%

Loan 2808-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Nov 2011 23 Mar 2012 21 Jun 2012 31 Dec 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 56.00 Cumulative Contract Awards
ADB 56.00 15 Nov 2011 23.06 0.00 46%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 15 Nov 2011 9.83 0.00 20%

TA 7923-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Nov 2011 21 Dec 2011 21 Dec 2011 28 Feb 2015 31 Dec 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
250,000.00 0.00 0.00 0.00 0.00 0.00 250,000.00 15 Nov 2011 130,151.14

Evaluation Documents

See also: Independent Evaluation

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