India: MFF - Assam Power Sector Enhancement Investment Program - Tranche 2

Sovereign Project | 41614-033

Summary

The Transmission and Distribution Sector Investment Program (the Investment Program) includes the following components and costs: (i) access to power (transmission) and energy efficiency enhancement (transmission loss reduction), $561.6 million (73.5%); (ii) access to power (distribution) and energy efficiency enhancement (distribution loss reduction) and distribution franchising, $150 million (19.6%); (iii) distributed decentralized generation, $50 million (6.5%). The Investment Program includes $3.4 million for a capacity development program to meet the increasing management capacity requirements including technical assistance (TA). The physical investments will address current unserved energy demand and provide additional capacity to meet forecast demand growth.

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Project Name MFF - Assam Power Sector Enhancement Investment Program - Tranche 2
Project Number 41614-033
Country India
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2677-IND: MFF - Assam Power Sector Enhancement Investment Program - Tranche 2
Ordinary capital resources US$ 66.90 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Energy - Electricity transmission and distribution
Gender Equity and Mainstreaming
Description

The Transmission and Distribution Sector Investment Program (the Investment Program) includes the following components and costs: (i) access to power (transmission) and energy efficiency enhancement (transmission loss reduction), $561.6 million (73.5%); (ii) access to power (distribution) and energy efficiency enhancement (distribution loss reduction) and distribution franchising, $150 million (19.6%); (iii) distributed decentralized generation, $50 million (6.5%). The Investment Program includes $3.4 million for a capacity development program to meet the increasing management capacity requirements including technical assistance (TA). The physical investments will address current unserved energy demand and provide additional capacity to meet forecast demand growth.

The MFF is expected to be utilized in three tranches. Tranche 1 will finance a set of projects for (i) transmission of power for capacity addition in transmission lines of 220 kilovolts (kV) (180 kilometers [km]) and 132 kV (82 km), and capacity addition of transformation through construction of 1 new 220/132 kV substation and 5 new 132/33 kV substations; and (ii) extension and augmentation of 2 existing substations. The tranche will include capacity development.

Tranche 2 is expected to finance a set of projects for

(i) transmission of power for capacity addition in transmission lines of 220 kV (185 km) and 132 kV (160 km), and capacity addition of transformation through construction of 2 new 220/132 kV substations and 6 new 132/33 kV substations; and (ii) extension and augmentation of 11 substations.

Tranche 3 is expected to finance a set of projects for (i) access to power in distribution, (ii) energy efficiency enhancement: distribution loss reduction, and (iii) distribution franchising. This component includes construction of new distribution substations and lines to enable the rollout of relevant franchising models.

Project Rationale and Linkage to Country/Regional Strategy

The Investment Program will (i) strengthen power transmission capacity to deliver reliable and affordable electricity, (ii) improve access to electricity in distribution through grid electricity and off-grid renewable and conventional energy-based electricity, (iii) enhance efficiency and quality of power supply, (iv) ensure financial health of the power sector through continued reform, and (v) promote private sector participation. The Investment Program includes a capacity development program component to meet the increasing management capacity requirements.

The MFF is particularly well suited for the Investment Program because (i) its aim is to support GOA's long-term objectives, as stated in the T&D road map; (ii) the performance of ongoing projects under the MFF can guide the provision of subsequent loans, thereby offering proper incentives for implementation; and (iii) the MFF can offer the flexibility required for the Investment Program to support participation of the utilities at different stages of readiness.

Impact A sustainable state power sector with increased transmission and distribution capacity to support inclusive economic growth
Project Outcome
Description of Outcome Enhanced quality and expanded service delivery of electricity in Assam through improved technical, commercial, and financial performance and capability of the power sector utilities
Progress Toward Outcome --Implementation ongoing.
Implementation Progress
Description of Project Outputs

Access to power: Constructed new transmission lines and substations, and other transmission system improvement activities

Energy efficiency enhancement : Extended and augmented transmission substations, refurbished existing substations, reactive compensation, introduction of new technologies to reduce loss

Status of Implementation Progress (Outputs, Activities, and Issues) Overall implementation of the Loan 2677 is satisfactory and is rated "on track" by the end of Q1 2015. All procurement packages have been contracted and disbursement of funds is ongoing. As of February 2015, contract awards is 95% against the total loan amount and disbursement is 65%. Physical progress is 81%.
Geographical Location Assam
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects ADB classifies the Project as environment category B in accordance with ADB's Environment Policy (2002) and Environmental Assessment Guidelines (2003). An environmental assessment and review framework (EARF) was prepared for the Investment Program, outlining the policy, procedures, and institutional requirements, and the IEE for the Project was also prepared. As covenanted in the Loan Agreement, the Project will be undertaken in accordance with all applicable laws, and regulations of the Government, GOA, and ADB's Environment Policy (2002), Environmental Assessment Guidelines (2003), and the EARF. ASEB is required to submit Compliance Reports to ADB as appropriate during the Project implementation.
Involuntary Resettlement A short resettlement plan, including compensation packages, was prepared, in accordance with ADB's policy on Involuntary Resettlement (1995) and the resettlement framework (RF), in full consultation with stakeholders and affected people. The resettlement framework, Short Resettlement Plan for Tranche-1 component and IPDF were disclosed to the affected people in their local language in May 2009. As covenanted in the Loan Agreement, GOA will cause ASEB, and through ASEB the AEGCL to undertake the Investment Program and the Project in accordance with ADB's policy on Involuntary Resettlement (1995), the RF, and applicable laws and regulations of the Government and GOA. Land acquisition and payment of compensation for the sub stations has already been competed where required for the six substations (Rangia, Nagaon, Kamalpur, Bihiating, Rupai and Sonari) and the land is already in the possession of ASEB.
Indigenous Peoples Compensation for indigenous people was also provided in the resettlement plan since its impacts are not significant.
Stakeholder Communication, Participation, and Consultation
During Project Design AEGCL consulted with stakeholders, including affected communities, during the design stage. During the preparatory stages of the tranche 1 project, consultations were carried out with various stakeholders and government officials concerned. Local communities were consulted as part of the social and resettlement study to gather their views on the proposed projects under tranche 1. All affected people were consulted on a one-to-one basis through questionnaire surveys. Additionally, focus group discussions were conducted within the project influence areas. Stakeholder participation and public consultation will continue during preparatory work for second and/or third tranche projects.
During Project Implementation Consultations will continue during the entire project cycle according to a stakeholder participation plan.
Business Opportunities
Consulting Services Consulting services will be required to provide ASEB and the implementing agencies with assistance for project implementation, including design, construction supervision, and management of the projects under each loan of the MFF; as well as ASEB's processing work and PFR preparation for future loans. Consulting services will be provided for evaluation, monitoring, and reporting purposes. Consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time) in accordance with the procurement plan.
Procurement Goods, equipment, and civil works to be financed under the MFF will be procured in accordance with ADB Procurement Guidelines (2007, as amended from time to time) and the related procurement plan.
Responsible ADB Officer Jyotirmoy Banerjee
Responsible ADB Department South Asia Department
Responsible ADB Division India Resident Mission
Executing Agencies
Assam Electricity Grid Corporation Ltd.PMU_ASEB@REDIFFMAIL.COMAssam State Electricity Board ,
4th Floor Bijuleen Bhawan Paltan Bazar,
Guwahati-781001
Timetable
Concept Clearance -
Fact Finding -
MRM 05 Mar 2008
Approval 05 Oct 2010
Last Review Mission -
PDS Creation Date 30 Jul 2010
Last PDS Update 26 Mar 2015

Loan 2677-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
05 Oct 2010 17 Jan 2011 01 Apr 2011 30 Nov 2013 30 Jun 2016 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 66.90 Cumulative Contract Awards
ADB 66.90 05 Oct 2010 62.96 0.00 94%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 05 Oct 2010 46.29 0.00 69%

Evaluation Documents

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