42094-022: MFF - Energy Sector Development Investment Program - Tranche 1 | Asian Development Bank

Afghanistan: MFF - Energy Sector Development Investment Program - Tranche 1

Sovereign (Public) Project | 42094-022 Status: Active

ADB is helping Afghanistan develop and rehabilitate energy facilities as well as build the institutional capacity of the power utility. The project will rehabilitate gas fields in Sheberghan, build a 220-kV transmission line from Kunduz to Taloqan, and develop distribution systems in Kunduz and Baghlan. 

 
Project Name MFF - Energy Sector Development Investment Program - Tranche 1
Project Number 42094-022
Country Afghanistan
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0134-AFG: MFF - Energy Sector Development Investment Program - Tranche 1
concessional ordinary capital resources lending / Asian Development Fund US$ 164.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Energy / Electricity transmission and distribution - Oil and gas transmission and distribution - Renewable energy generation - small hydro

Gender Equity and Mainstreaming No gender elements
Description

Scope: The tranche 1 ($164 million) of Energy MFF comprises of following sub-projects:

(i) NEPS 220 kV transmission line (Kunduz - Taluqan) -- $27.8 million - construction of a 67km double circuit 220kv transmission line linking cities of Taluqan to Kunduz.

(ii) NEPS distribution network in Kunduz and Baghlan -- $51.3 million - development and rehabilitation of 20kv and low voltage networks for 45,000 households in Kunduz and Baghlan cities

(iii) Rehabilitation of Sheberghan gas wells in 2 phases -- $21.8 million - rehabilitation of dilapidated gas wells in Shiberghan to enable extraction of domestic gas to power future gas fired power generation in Jawzjan province.

(iv) NEPS 220kv system operation and maintenance (O&M) emergency equipment -- $19.0 million - Consulting services to assist the operation and maintenance of the newly constructed 220kv NEPS. Procurement under process.

(v) Project management and implementation for tranche I & II -- $23.0 million - Consulting services to assist the management of projects in DABS.

(vi) Future sub-projects' preparation -- $5.3 million

(vii) Individual consultants -- $0.5 million

(viii) Implementation supervision Gas wells rehabilitation and capacity building of Ministry of Mines -- $1.2 million - design and supervision consultancy

Project Rationale and Linkage to Country/Regional Strategy The Afghan Energy Sector Development Investment Program aims for improved energy security and sustainable power supply to stimulate economic development in Afghanistan. Ths investments would reduce cost of doing business, cut poverty and improve security. It aims to provide sustainable cost effective power supply in North East Afghanistan (including Kabul) through (i) Improvements in transmission and distribution systems, and (ii) Strengthened institutional capacity of power utility's (DABS) commercial, technical and managerial functions (MIS, financial/revenue management, O&M capabilities, system planning, and project management).
Impact Sustainable and reliable grid connected power supply in north east Afghanistan.
Project Outcome
Description of Outcome Stable power supplies in Taluqan, Kunduz and Baghlan and additional gas production at Sheberghan.
Progress Toward Outcome

Following is the update on implementation progress of 8 subprojects included in Tranche 1:

(i) Kunduz-Taluqan Transmission Line ($29.3 million) Comprised of 70 kms of 220-kV transmission line connecting cities of Kunduz and Taloqan in northern Afghanistan. The contract was awarded in December 2011 to KEC International and project was commissioned and is operational since 2013. The subproject is financially closed.

(ii) Kunduz-Baghlan Distribution Networks ($51.28 million) It comprises commissioning of 25,000 new distribution connections in cities of Kunduz and Baghlan, awarded to joint venture (JV) of CNEEC-Maamar International in January 2013 and made effective in June 2013. At inception, the JV partners had issues related to (i) internal JV agreement and division of project disbursements, and (ii) dismal performance of prime and sub-contractors. Weak supervision by supervision consultant and resolution of issues in time also delayed the fielding of contractors. The situation at project sites has been further accentuated since mid-2015 due insurgent activity and military operation being undertaken by the government. The equipment storage of the contractor including some equipment has been damaged, which hit by rocket fired by insurgents and anti-government elements. The work is around 80% completed. Although as per the revised action plan which was provided during Q4 2016 by the contractor, which confirmed the project will be completed by end Q2 2018, it is likely that further delays will be encountered. DABS also requested ADB to finance purchasing of damaged equipment from the contract savings. The revised contract variation is under preparation in DABS and the no objection by ADB is expected by end October 2017.

(iii) NEPS Operations and Maintenance (O&M) Equipment ($14.26 million) The subproject comprised supply of emergency equipment to DABS. Out of 3, 2 lots were awarded in May 2014 after rounds of rebidding. Lot 3 was advertised twice but failed to solicit technical bidders. Therefore, EA requested for cancellation of Lot 3 ($0.3 million) due to low amount and dismal response. The project is 100% complete.

(iv) Sheberghan Gas Wells Rehabilitation ($10.1 million & $15 million respectively). The subproject comprises rehabilitation of 8 12 gas wells, as technically feasible, in Sheberghan in northern Afghanistan. Phase 1 of the gas wells rehabilitation was awarded to Turkish Petroleum in August 2012 and 6 wells were fully rehabilitated in October 2014. These wells are now producing nearly 1.2 million cubic meters of gas/day for use by the industrial, commercial and residential customers. The Phase-II of gas wells rehabilitation (2 wells) was rebid in March 2016, after failure of first round bidding in 2015. The contract has been awarded in Q3 2016 and contract has been signed in early Feb 2017, with mobilization advance disbursed. The project is on-track and expected completion Nov 2018.

(v) Future Projects Preparatory Facility ($7.56 million). The subproject comprises preparation of future energy projects including formulation or pre-feasibilities, bidding documents and evaluation of bids through till contract award. The contract was awarded to Fichtner GmbH in November 2012 with the current closing date is 30 June 2017. However, due to additional projects preparation included recently by the Office of Afghan President and the EA, the contract was extended by 12 months and ADB approved no cost extension on 16 June 2016 and currently. Recently, DABS requested ADB to extend the contract for another year till through 30 June 2018.

(vi) Program Supervision and Project Implementation Consultant ($21.68 million). The consultant contract was expired on 30 June 2017 and currently the final payments are under process.

Implementation Progress
Description of Project Outputs

Rehabilitation of 8-12 gas wells in Sheberghan

Evacuation of power in NEPS area through Kunduz Taloqan transmission line

Development of distribution systems in Kunduz and Baghlan load centers

Stabilization of NEPS operations and maintenance (O&M) system instituted for efficient functioning of grid.

Improvement of DABS operations and management capacities

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

With substantial donor support confirmed throughout 2016 and ADB's next project was approved in November 2015 it is envisaged that DABS will be able to develop adequate capacity to independently manage its assets and projects by 2017.

The contract for rehabilitation of 8 gas wells in Yatimtaq and Jerguduq was awarded to Turkish Petroleum Company on 16 Oct 2012. The works started from February 2013 and completed in March 2014. Six out of 8 wells were successfully rehabilitated producing 1.2 million cubic meters of gas/day. Rehabilitation of remaining 2 wells was technically impossible because of high corrosion of their production tubings. Therefore, the wells have been plugged and abandoned. The EA has finalized the bidding documents for the second phase of wells rehabilitation which include wells number 31 and 37 in Yatimtaq. The balance funds of $14 million under the project will be utilized for this work. The first round of bidding failed as one unqualified bidder submitted bids. The bidding documents were issued 07 July 2015 and the IFB has been re-announced on 27 April 2016. The package is 1S1E. ADB issued no objection for contract award on 07 August 2016 and National Procurement Committee approved the contract award in January 2017 and contract expected completion date is Q3 2018.

Kunduz - Taloqan T/Line contract was awarded on 18 Dec 2011 and physical work has been 100% complete as of 31 December 2013. The line was inaugurated on 15 January 2014 and is now operational.

As per reconnaissance study undertaken by project consultant, the revised numbers of connections are estimated has been reduced and to be around 25,000 to 30,000. Contract for distribution networks in Kunduz and Baghlan (EPC) was signed between DABS and CNEEC and Maamaar JV on 6 January 2013 and initial work began from May 2013. The project is under implementation with 75% equipment on site, however some equipment was damaged due to hit of a shell in the storage area of the contractor, some equipment has been damaged and DABS is in the process to request ADB to approve a contract variation to replace the burned equipment. The project expected completion date is by end 2017 but due to last year security issue/incident we may expect few months delay in project completion.

Substantial progress has been achieved. NEPS losses currently stand at 39%. With installation of new electronic meters, commercial losses has been reduced by more than 50% in major load centers. AB, World Bank and USAID are working in tandem to improve system stability.

Geographical Location Badakhshan, Baghlan, Baharak, Baharak, Jurm, Khan Abad, Kunduz, Kunduz, Shibirghan, Taloqan, Taluqan, Wilayat-e Bamyan
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects

The tranche was categorized as category B in terms of its environmental impacts. The environmental impacts of the project have been considered to be insignificant and thus the requirement is to prepare and implement IEE for this tranche subprojects.

The IEE and EMPs were uploaded in the ADB website for public disclosure. The other subproject of this tranche i.e. the distribution network component at Baghlan and Kunduz is complied. The Environmental Management Reports are being prepared and posted biannually

The Environmental Management Plans (EMP) for each of the turnkey projects are updated biannually and report disclosed on the web.

Involuntary Resettlement

Tranche 1 projects have been categorized as Category B. Two projects in tranche 1 involve low-intensity LAR are (i) NEPS 220 kV Transmission Line: KunduzTaloqan; (ii) Construction of distribution networks in Baghan and Kunduz. Updated Land Acquisition and Resettlement Plans, based on detailed/final design, have been prepared, reviewed by ADB and disclosed.

Also, an updated Land Acquisition and Resettlement Plan, based on detailed and final design, has been prepared for the NEPS 220kV Transmission line from Kunduz to Taloqan has been prepared and implemented. The implementation progress was monitoring closely and the monitoring reports were reviewed and disclosed. A final compliance report will be submitted by the consultant in 2017.

For design-bid-build subprojects, a civil works contractor will not be mobilized until the LAR plan is fully implemented. The PMO will monitor the LAR plans and report to ADB.

Indigenous Peoples The tranche 1 project has been classified as Category C. No Indigenous Peoples impacts are foreseen under the project.
Stakeholder Communication, Participation, and Consultation
During Project Design Project design, implementation and supervision consultants are undertaking comprehensive analysis and stakeholders consultations (in accordance with ADB's Safeguard Policy Statement) to factor in all land acquisition, resettlement and environmental considerations into projects design.
During Project Implementation Consultation and information sharing with local communities are being undertaken. Necessary social safeguards and environmental analyses are undertaken and updated after design works are initiated for sub-projects. Relevant documentation is approved by ADB experts before contractor are mobilized to begin construction activities at project sites.
Business Opportunities
Consulting Services

The PMO will require consulting services. Firms and individuals (national and international) will be engaged to provide advisory services in the following areas: (i) project management; (ii) due diligence work (technical, commercial, financial, legal, safeguards, gender, governance, etc.) for subsequent tranches; (iii) detailed design engineering, procurement, and supervision; (iv) safeguard management and gender mainstreaming; (v) evaluation,

monitoring, auditing, reporting, and measuring results; and (vi) training and policy advice. Consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants using the quality-based selection method.

Single-source selection may be used to recruit a consultant to help with the Sheberghan Gas Fields Rehabilitation Project. The least-cost selection method will be used to recruit external auditors and external agencies to monitor the implementation of safeguards. Individual consultants may be recruited for other

assignments, in accordance with ADB procedures for recruitment of individual consultants.

Procurement

Procurement of works and goods to be financed under the MFF will be implemented in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). International competitive bidding will be used for supply contracts estimated to cost more than $500,000 and for works of more than $2 million. National competitive bidding will be used for goods and works valued at more than $100,000 and below the thresholds for international competitive bidding. Shopping will be used for goods and works equal to or below $100,000.

Limited international bidding may be needed for the Sheberghan Gas Fields Rehabilitation Project. While this is not an ideal procurement approach, attracting competent contractors for this type of project has been difficult in the past. Project implementation has been delayed for several years.

For each ADF-financed project, advance contracting for the procurement of equipment, civil works, consulting services, and other expenditures will be permitted, subject to these being eligible according to agreed upon procedures, and ADB's Procurement Guidelines and Guidelines on the Use of Consultants (2007, as amended from time to time).

Retroactive financing is proposed under individual tranches for expenditures incurred 12 months before the signing of the corresponding financing agreement, with a ceiling of up to 20% of the tranche amount. The Government, MOM, and DABS have been informed that approval of advance contracting and retroactive financing does not commit ADB to financing any of the proposed projects.

Responsible ADB Officer Barseghyan, Areg Arcady
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Da Afghanistan Breshna Sherkat
Dr. Jalil Shams
[email protected]
Near Kabul Nandari, Kabul, Afghanistan
Ministry of Mines and Petroleum
Mr. Wahidullah Shahrani
[email protected], [email protected]
Pashtoonistan Watt across MOF, Kabul
Timetable
Concept Clearance 09 Jun 2008
Fact Finding 23 May 2008 to 06 Jun 2008
MRM 23 Jul 2008
Approval 02 Dec 2008
Last Review Mission -
PDS Creation Date 29 Dec 2008
Last PDS Update 28 Sep 2017

Grant 0134-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
02 Dec 2008 01 Feb 2009 26 May 2009 30 Jun 2014 30 Jun 2018 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 164.00 Cumulative Contract Awards
ADB 164.00 02 Dec 2008 151.66 0.00 92%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 02 Dec 2008 126.85 0.00 77%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - -

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Energy Sector Development Investment Program - Tranche 1: Kunduz-Taloqan 220 kV Double Circuit Transmission Line Environmentall Monitoring Report (January-June 2016) Environmental Monitoring Reports Dec 2016
Energy Sector Development Investment Program - Tranche 1: Kunduz and Baghlan 20kV Distribution Network Environmental Monitoring Report (January-June 2016) Environmental Monitoring Reports Dec 2016
Energy Sector Development Investment Program - Tranche 1: Kunduz-Taloqan 220 kV Double Circuit Transmission Line Social Monitoring Report (January-June 2016) Social Monitoring Reports Nov 2016
Energy Sector Development Investment Program - Tranche 1: Sheberghan Gas Fields Rehabilitation Environmental Monitoring Report (October 2016) Environmental Monitoring Reports Oct 2016
ESDIP - Tranche 1: Kunduz-Taloqan 220 kV Double Circuit Transmission Line Social Monitoring Report (July-December 2015) Social Monitoring Reports May 2016
Energy Sector Development Investment Program - Tranche 1: Kunduz and Baghlan 20/0.4 kV Distribution Project Initial Environmental Examination Initial Environmental Examination Feb 2016
Energy Sector Development Investment Program - Tranche 1: Kunduz-Taloqan 220 kV DC Transmission Line Environmental Monitoring Report (July-December 2014) Environmental Monitoring Reports Dec 2015
Energy Sector Development Investment Program - Tranche 1: Kunduz-Taloqan 220 kV DC Transmission Line Environmental Monitoring Report (January-June 2014) Environmental Monitoring Reports Dec 2015
Energy Sector Development Investment Program - Tranche 1: Kunduz-Taloqan 220kV Double Circuit Transmission Line Project - Social Monitoring Report (January-June 2015) Social Monitoring Reports Sep 2015
ESDIP - Tranche 1: Kunduz–Taloqan 220kV Double Circuit Transmission Line Project LARP Implementation Progress Monitoring Report (July-December 2014) Social Monitoring Reports Jun 2015
Energy Sector Development Investment Program - Tranche 1: Kunduz-Taloqan 220kV Double Circuit Transmission Line Project Resettlement Plan Resettlement Plans Oct 2014

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

No tenders for this project were found.

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan