India: Himachal Pradesh Clean Energy Development Investment Program - Tranche 4

Sovereign Project | 41627-053

Summary

Output 1: Hydroelectric Power Capacity Addition:

The ADB Tranche 4 loan will fund the turn-key civil works contract for the Shongtong Karcham Hydroelectric project.

The Shongtong Karcham Hydroelectric Project is a 450 MW facility located on the Sutlej River in District Kinnaur, Himachal Pradesh, India. The Shongtong Karcham project consists of a) civil works, namely an underground powerhouse, river diversion barrage, intake and desilting chambers, head race tunnel and tail race tunnel (to be funded 100% by the ADB Tranche 4 loan); and b) electro-mechanical works, which consists of the turbines and power generation equipment, controls and electrical interconnection works (to be funded via separate cofinancing).

Output 2: Information Technology Infrastructure:

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Project Name Himachal Pradesh Clean Energy Development Investment Program - Tranche 4
Project Number 41627-053
Country India
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2914-IND: Himachal Pradesh Clean Energy Development Investment Program - Tranche 4
Ordinary capital resources US$ 257.00 million
Loan: Himachal Pradesh Clean Energy Development Investment Program - Tranche 4
KfW Bankengruppe US$ 200.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change
Sector / Subsector Energy - Energy sector development and institutional reform
Gender Equity and Mainstreaming Some gender elements
Description

Output 1: Hydroelectric Power Capacity Addition:

The ADB Tranche 4 loan will fund the turn-key civil works contract for the Shongtong Karcham Hydroelectric project.

The Shongtong Karcham Hydroelectric Project is a 450 MW facility located on the Sutlej River in District Kinnaur, Himachal Pradesh, India. The Shongtong Karcham project consists of a) civil works, namely an underground powerhouse, river diversion barrage, intake and desilting chambers, head race tunnel and tail race tunnel (to be funded 100% by the ADB Tranche 4 loan); and b) electro-mechanical works, which consists of the turbines and power generation equipment, controls and electrical interconnection works (to be funded via separate cofinancing).

Output 2: Information Technology Infrastructure:

This consists of computer equipment and system infrastructure, including installation of a data center and disaster recovery center, local area network infrastructure, wide area network equipment, phase II of the enterprise resource planning (ERP) system, and procurement of additional computer hardware.

Output 3: Capacity Development:

$800,000 of training funds is included in tranche 4 in order for HPPCL to continue its personnel training program for the duration of the MFF (which was started under the Tranche 1 loan).

Project Rationale and Linkage to Country/Regional Strategy Himachal Pradesh is home to about one fourth of India's hydropower potential, and maximizing this potential is articulated in the Hydropower Policy, 2006 of the Government of Himachal Pradesh (GOHP), as well as their power sector roadmap. Beneficiaries are not just the electricity consumers of Himachal Pradesh, but of all of India, as excess power generated is intended for export to India's national grid. India has for many years faced acute power shortages and has a massive need for additional power generating capacity, given the growing economy, the still approximately 35% of the population without access to electricity, and the importance of adequate power supply as an indirect contributor to poverty alleviation. The Government of India's Integrated Energy Policy, 2006 warns that the country's energy challenges are considerable and that electricity generating capacity alone will need to increase 5 to 6 times from their 2003-04 levels by 2031-32, and that hydropower must therefore play a role in this increase in overall generating capacity. India currently faces nationwide peak power deficits of about 12%, which hydropower is particularly useful to address. In addition, the primary alternative, namely coal-fired power generation and its associated coal mining and coal transport, has considerable impacts on the environment as well as climate change, including substantial emissions of carbon dioxide emissions and of suspected particulate matter.
Impact Increased hydropower production and contribution to climate change mitigation with improved project management and sector governance in Himachal Pradesh.
Project Outcome
Description of Outcome Improved capacity of HPPCL to generate and sell electricity from hydropower and manage its operations.
Progress Toward Outcome _
Implementation Progress
Description of Project Outputs

1. Shongtong Karcham Hydroelectric Project becomes operational on time and within budget.

2. Data center and disaster recovery center installed in HPPCL corporate facilities and are operational

3. Capacity of HPPCL personnel on project management, operations and maintenance improved

Status of Implementation Progress (Outputs, Activities, and Issues) Contracts have been awarded, and project implementation is under progress.
Geographical Location
Safeguard Categories
Environment A
Involuntary Resettlement A
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects For Tranche 4, the Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) were disclosed on ADB's website since 28 September 2010. An updated version was posted on 19 December 2011. Consultations were carried out during EIA preparation, including holding meetings and individual interviews involving stakeholders, particularly project affected persons. The environmental assessment process included determining baseline levels for the existing status of physical-chemical, ecological and socio-economic aspects of the environment, followed by identification of potential impacts due to construction and operation activities, and prediction of significant impacts using appropriate simulation models. This was followed by the preparation of an Environmental Management Plan (EMP) outlining measures to minimize adverse impacts during construction and operation phases, including a catchment area treatment plan, fisheries management plan, and muck management plan, including an estimation of cost for implementing the plan and guidelines for monitoring its progress. Expected impacts include impacts on the water, air, noise levels, land and biological environments and have been separated into construction phase impacts and operating phase impacts. Impacts on the water environment stem from sewage from labor camps and effluent from crushers and muck disposal. Operating phase impacts include reservoir water quality, sediments and river flows within the project area. Air impacts predominantly occur during construction and include emissions from construction equipment and increased vehicular movement, and dust emissions from blasting operations and muck disposal. Noise impacts are from construction machinery and vehicles and to a limited degree due to their underground nature, from the blasting operations. Land impacts stem from soil erosion, muck disposal and quarrying operations. Biological impacts on flora and fauna have also been evaluated, as well as socioeconomic impacts from the influx of the labor force.
Involuntary Resettlement Total private land acquisition is 6.3 hectares which will have 141 affected families consisting of 666 affected persons. As an integral part of the safeguards planning, affected persons and local communities were consulted during tranche 4 resettlement plan preparation. The 141 affected families were consulted as part of the census survey in the project area through a household questionnaire survey, and focused group discussions were also conducted in the affected villages. Consultation will continue through the project cycle. A total of 6 residential structures are being affected, of which 2 are purely residential and 4 include small shops. Loss of these structures will not lead to physical displacement since these structures are built on agricultural land and are not used as primary homes. In addition to the structures, a total of 154 trees will be affected which out of which 51 are fruit trees. None of the affected families are to be rendered landless as they are only partially losing their land. Similarly, no squatters or non-titleholders are affected. The resettlement cost estimate for this subproject includes eligible compensation, resettlement assistance and support cost for resettlement plan implementation. All activities related to the land acquisition and resettlement have been planned to ensure that compensation is paid prior to commencement of civil works. Public consultation, monitoring and grievance redress will be undertaken intermittently throughout the project duration.
Indigenous Peoples As the project has been classified as Indigenous Peoples category C, no separate Indigenous Peoples Plan was prepared. However, the resettlement plan contains specific measures through additional entitlements accorded to scheduled tribes who are considered as vulnerable groups, should any be affected in the future. This is not expected.
Stakeholder Communication, Participation, and Consultation
During Project Design

Public participation and community consultation has been taken up as an integral part of social and environmental assessment process of the project. Consultation was used as a tool to inform and educate stakeholders about the project. The participatory process helped in involving the local people in project activities. Initial Public consultation has been carried out in the subproject areas with the objectives of minimizing probable adverse impacts of the project through alternate design solutions and to achieve speedy implementation of the project through bringing in awareness among the community on the benefits of the project. The consultation process has been going on since 2009 during project design, environment impact assessment study, and fresh rounds of consultations were also conducted during the social impact assessment, land acquisition and resettlement study.

Attempts have been taken to involve the concerned government official in the project preparation. A holistic approach was adopted during the design stage in order to gather the information about the project area and about the other developmental activities which are going on parallel to the proposed plan. These officials represent from local, district and state level.

During Project Implementation Consultations will continue during the entire project cycle according to the stakeholder participation plan.
Business Opportunities
Consulting Services No consulting services are funded by this loan tranche (they were funded via the tranche 1 loan)
Procurement Procurement will be in accordance with ADB's Procurement Guidelines (2010, as amended from time to time). International competitive bidding (ICB) will be used to procure the civil works construction contract. HPPCL has utilized advanced contracting for this contract. The electro-mechanical equipment contract will be funded via parallel cofinancing by KfW. A procurement plan is presented in Annex 4 of the PFR. As this is the 4th tranch in this MFF, the EA is now highly experienced in ADB procurement policies and procedures.
Responsible ADB Officer K. Vallabha Rao
Responsible ADB Department South Asia Department
Responsible ADB Division India Resident Mission
Executing Agencies
Multipurpose Projects & Power Dept of Govt of HPHP Secretariat
Shimla-171 002
Himachal Pradesh, India
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 02 Oct 2012
Last Review Mission -
Last PDS Update 19 Mar 2015

Loan

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 435.00 Cumulative Contract Awards
ADB 0.00 - 0.00 0.00 %
Counterpart 235.00 Cumulative Disbursements
Cofinancing 200.00 - 0.00 0.00 %

Loan 2914-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
02 Oct 2012 19 Nov 2012 17 Jan 2013 30 Jun 2018 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 692.00 Cumulative Contract Awards
ADB 257.00 02 Oct 2012 166.36 0.00 65%
Counterpart 235.00 Cumulative Disbursements
Cofinancing 200.00 02 Oct 2012 30.94 0.00 12%

Evaluation Documents

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