Uzbekistan: Advanced Electricity Metering Project Phase 2

Sovereign Project | 41340-014

Summary

Following the progress of Asian Development Bank (ADB) financing on Advanced Electricity Metering Project, this phase 2 project will replicate and expand the advanced electricity metering (AEM) system that uses modern, accurate, and theft-proof revenue meters for the power grid system and the end-user in five new regions (Andijan, Ferghana, Kashkadarya, Namangan, and Surkhandarya). The project will help improve energy efficiency in the power distribution sector, by reducing commercial losses and improving the efficiency of electricity revenue collection. The project will include installation of 3.1 million meters and meter data management (MDM) system that includes billing and energy data management, and capacity development for operational improvement in reducing commercial losses.

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Project Name Advanced Electricity Metering Project Phase 2
Project Number 41340-014
Country Uzbekistan
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8376-UZB: Advanced Electricity Metering Project Phase 2
Technical Assistance Special Fund US$ 500,000.00
Agence Francaise de Developpement US$ 250,000.00
TA: Advanced Electricity Metering Project Phase 2 (Supplementary)
Technical Assistance Special Fund US$ 20,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change
Sector / Subsector

Energy - Electricity transmission and distribution - Energy efficiency and conservation

Gender Equity and Mainstreaming Effective gender mainstreaming
Description

Following the progress of Asian Development Bank (ADB) financing on Advanced Electricity Metering Project, this phase 2 project will replicate and expand the advanced electricity metering (AEM) system that uses modern, accurate, and theft-proof revenue meters for the power grid system and the end-user in five new regions (Andijan, Ferghana, Kashkadarya, Namangan, and Surkhandarya). The project will help improve energy efficiency in the power distribution sector, by reducing commercial losses and improving the efficiency of electricity revenue collection. The project will include installation of 3.1 million meters and meter data management (MDM) system that includes billing and energy data management, and capacity development for operational improvement in reducing commercial losses.

The economy has sustained high growth, averaging 8.5% since 2006. Growth in 2013 and beyond is expected to remain at 7.5-9%. The Government of Uzbekistan (the government) prioritizes modernizing industry and developing infrastructure and the private sector. Reliable and affordable electricity supply is vital to achieving these goals. One of the key challenges is the high level of commercial losses in the power sector. The state joint stock company Uzbekenergo, a vertically integrated utility fully owned by the government, estimates losses of 7.2% in transmission and 12.6% in distribution in 2011 (national average). Distribution losses in the targeted five regions ranged between 10.4% and 27.6% in 2011.

The high level of commercial losses is caused by the lack of investment in modernizing the distribution assets together with outdated manual operation that results in inaccurate, unreliable and inefficient revenue collection. Electricity meters are generally old, inaccurate, and susceptible to tampering, but still in service beyond their designed economic life without proper recalibration. Without proper grid metering, Uzbekenergo faces difficulty in accounting for electricity use or identifying electricity tampered. Manual-based tariff collection operation and billing system are subject to inaccurate, inefficient, and ineffective accounting of revenue collection. Current incentive mechanism to reduce commercial losses is not sufficiently institutionalized.

To overcome these challenges, Uzbekenergo has requested international financial institutions (IFIs) with ADB as the lead development partner to help implement and finance a nationwide AEM program. AEM, or smart metering with digital meters, allows two-way communication between the utility and consumers. AEM enables the utility to remotely monitor and disconnect supply without sending reading personnel to the site. It provides consumers with power usage information more frequently. AEM can also help identify losses, reduce commercial losses, and improve tariff collection.

Uzbekenergo aims at gradually covering all 6 million customers across the country. It has initiated its first large-scale AEM project financed by ADB, covering 1 million customers. The implementation consultant has been recruited, bidding has been launched, and prebid meeting was successfully held with participations from more than 20 firms. Based on the smooth implementation of the phase 1 project, Uzbekenergo has requested ADB to finance the second phase project covering five regions.

The project follows ADB's strategy for Uzbekistan, which includes a focus on energy efficiency and reliable power supply.

Project Rationale and Linkage to Country/Regional Strategy

The PPTA is necessary on the following grounds:

(i) The project is urgently needed in Uzbekistan;

(ii) While the Government of the Republic of Uzbekistan has a plan to invest in the project, there is a need for due diligence and to prepare a feasibility study to process a loan for the project; and

(iii) Expertise of competent international and national consultants is needed to prepare the project considering the project's technical complexity and scale.

Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Andijan,Ferghana, Namangan, Kashkadarya, Sukhandarya
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Stakeholders' consultations through community meetings, discussions, and interviews will be conducted during the PPTA. Strategies to encourage poor women's participation as individual consumers or as representative of interested groups will be encouraged. At the same time, women leaders in government and business will be involved to participate in the consumer education campaign.
During Project Implementation Stakeholders' consultations through community meetings, discussions, and interviews will be conducted during project preparation.
Business Opportunities
Consulting Services

Individual international consultants totalling 8 person-months (4 positions) for preliminary advance works necessary for due diligence.

Consulting firm services totalling 9 person-months (5 position) for international and 10 person-months (4 position) for national, respectively, for assessing the operation improvement for meter monitoring and inspection and preparing feasibility study.

Recruitment selection method: quality-and cost-based selection (QCBS) with simplified technical proposal.

Responsible ADB Officer Keiju Mitsuhashi
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
UzbekEnergoZafar Karimov, Project Manager6 Istiklol Street Tashkent, 100000, Uzbekistan
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 05 Jun 2013
Last Review Mission -
Last PDS Update 30 Mar 2015

TA 8376-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Jun 2013 25 Jun 2013 25 Jun 2013 31 Jan 2015 31 Jan 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 250,000.00 0.00 0.00 0.00 0.00 750,000.00 05 Jun 2013 432,618.29

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