Afghanistan: Energy Sector Development Investment Program - Tranche 3

Sovereign Project | 42094-042

Summary

The government requested ADB to finance the Gereshk Electricity Services Improvement Project. Gereshk, with a population of approximately 70,000, is a district economic center in Helmand province in soutern Afghanistan, where insurgency has been significantly active. Gereshk is strategically located on the national highway (Corridor 1) that connects Herat to Kandahar. With the stability being regained, the government would like to restore the licit livelihood of the town residents and functions of the town as the district economic center. However, the rehabilitation and expansion of the existing hydropower plant is needed to make more power available in Gereshk. Upgrading and expansion of electricity distribution infrastructure and end-user connections are likewise necessary to increase the access to electricity. In addition, enhancement of DABS'' capacity is required to implement the project and improve operation and maintenance of the system.

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Procurement Documents

Title Document Date
Energy Sector Development Program - Project 3 Nov 2013

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Project Name Energy Sector Development Investment Program - Tranche 3
Project Number 42094-042
Country Afghanistan
Project Status Approved
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0280-AFG: Energy Sector Development Investment Program - Tranche 3
Asian Development Fund US$ 43.00 million
Grant 0281-AFG: Energy Sector Development Investment Program - Tranche 3
Energy Sector Dev. Investment Program US$ 20.00 million
Grant 0282-AFG: Energy Sector Development Investment Program - Tranche 3
Energy Sector Dev. Investment Program US$ 12.40 million
Strategic Agendas Inclusive economic growth
Drivers of Change Partnerships
Sector / Subsector Energy - Electricity transmission and distribution - Renewable energy generation - small hydro
Gender Equity and Mainstreaming Some gender elements
Description

The government requested ADB to finance the Gereshk Electricity Services Improvement Project. Gereshk, with a population of approximately 70,000, is a district economic center in Helmand province in soutern Afghanistan, where insurgency has been significantly active. Gereshk is strategically located on the national highway (Corridor 1) that connects Herat to Kandahar. With the stability being regained, the government would like to restore the licit livelihood of the town residents and functions of the town as the district economic center. However, the rehabilitation and expansion of the existing hydropower plant is needed to make more power available in Gereshk. Upgrading and expansion of electricity distribution infrastructure and end-user connections are likewise necessary to increase the access to electricity. In addition, enhancement of DABS'' capacity is required to implement the project and improve operation and maintenance of the system.

The impact of the project will be better power supply in areas south of Kabul. The project will increase access to more reliable power supply in Gereshk. The project outcome will be increased hydropower generation capacity in Gereshk.

The project will rehabilitate and upgrade the Gereshk power supply system. It will increase household connections from 2,500 to 5,000 covering 50,000 people residing within the 6 km radius of the town center. With increased installed generation capacity and upgraded distribution system, the project will improved the access to more stable electricity.

The project will include the following components to improve and expand the Gereshk distribution system and strengthen DABS operational capacity. Physical component of the project will include: (i) rehabilitation and upgrading of hydropower plant with 4.8 MW installation capacity; (ii) replacement of 10 km of 3.3 kV distribution lines to 20 kV line; and (iii) replacement and new installation of end-user meters. Non-physical component will enhance DABS project implementation and operation and maintenance capacities.

Project Rationale and Linkage to Country/Regional Strategy

The access to reliable power supply is severely limited in Gereshk. The estimated population of Gereshk District is 70,000, out of which 50,000 people, or 5,000 households, reside within the 6 km radius of the town center. Presently only about 2,500 households have connections to the local electricity distribution system, while 5,000 households claim to await new connections. Some have their own diesel generators which are too expensive for the mass and the poor. Even for those connected to the electricity network, chronic load shedding during both the morning and evening peak hours means that most receive only a few hours of power supply a day and the existing infrastructure does not allow continued access to power. Power shortage is a critical impediment in promoting licit private sector development, ensuring quality public services, and improving living conditions in Gereshk.

The limited access to reliable power is attributed to the power infrastructure deficiency. Gereshk presently relies on an island electrical grid with power generated predominantly by an old and damaged run-of-river type hydro power plant. The hydro power plant has an installed capacity of 3.2 MW, but operates sub-optimally with 2 MW from two generating sets, although there is space available for a third unit. The peak demand is estimated at 8 MW. The distribution network consists of a combination of 40 kV and 3.3 kV system, which is not efficient and not capable of distributing any increase in the generated output. Further, the distribution network is in a poor state of repair with problems on support structures, transformers, substations and low voltage customer connections. DABS does not have the capacity nor resources to rehabilitate the infrastructure on its own.

Immediate improvement of the electricity services in Gereshk is critical for not just of the people in Gereshk, but also for the Government and the international community. Gereshk is located in the heart of Helmand where insurgency has been active. The Government needs the supports of the community to bring in peace and stability in the region. But people in Gereshk are generally skeptical of the Government considering it has done little for the community in the past. Winning the hearts and minds of people in Gereshk is one of the key successful factors for stability. The improvement of the electricity services will be the largest investment ever to be engaged by the Government for decades. Increasing access to electricity will not by itself achieve it but is expected to contribute to such cause.

The solution to the Gereshk electricity services challenges needs a combination of investments, capacity building, strategic coordination, and stakeholder consultations. The investment components address the generation capacity by rehabilitating and upgrading the ailing existing hydropower plant. Investment is also required to strengthen, improve, and expand the distribution facilities to increase access to power with improved efficiency. An opportunity will be provided to DABS staff to undertake the installation works of the distribution component as a part of capacity building. Coordination and consultations with key stakeholders will be important given that the Project will be implemented in a difficult environment.

The Project which aims at increasing access to reliable power is in line with the energy sector strategy under the Afghanistan National Development Strategy (ANDS), the Government strategic platform for development during 2008-2020. The Project is in line with the ADB's Country Partnership Strategy (2009-2013) for Afghanistan identifies the rehabilitation and upgrading of existing infrastructure as priority in the energy sector. It is also consistent with ADB's Strategy 2020 and ADB Energy Policy (2009) by promoting inclusive growth, energy security, and supporting energy efficiency and renewable energy. It will allow ADB to apply its significant sector expertise as well as lessons learned from previous tranches and elsewhere.

DABS is the key instrument for the sector reform to improve the efficiency and the governance of the sector. DABS was corporatized in May 2008 as a vertically integrated power utility to succeed the functions of DABM which was under MEW. Despite some delay, the power sector reform is on-going. After an agreement was reached between MEW and DABS in September 2009, DABM's assets and personnel were finally transferred to DABS on 20 March 2010. During the next five years of the post-transition period, DABS needs to strengthen its capacity to be fully operational. The momentum for the sector reform driven by the creation of DABS as a financially sustainable commercial utility needs continued supports by the donor community.

Impact Better power supply in areas south of Kabul
Project Outcome
Description of Outcome Increase in hydropower generation capacity in Gereshk
Progress Toward Outcome The civil works on rehabilitation of power house and replacement of electro-mechanical and hydro-mechanical equipment started. After introducing certain measures to facilitate the contract implementation the project outcome is achievable by the end 2015.
Implementation Progress
Description of Project Outputs

1. Gereshk power supply system rehabilitated and improved

2. End-user connections increased with improved distribution facilities

3. DABS' operational capacity increased

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

The civil work contract to replace three turbine generators (1.62 MW each) in the power house has started. The target is achievable by end Dec 2015. The contractor is committed to deliver all three units of turbines by May 2015 and commission by Dec 2015. The construction of the annex building and perimeter wall has been started; completion is expected within the time schedule.

Rebidding for procurement of LV transmission and distribution equipment is underway. Construction of distribution network will be done in parallel with rehabilitation of generation facilities by the end of 2015.

EA is intervening in resolving the security matter at higher level with MoI as this issue need to be resolved at the earliest otherwise there may be some delays anticipated on the overall schedule of the project.

DABS operational staff receives on the job training by ADB financed consultants from SMEC, Hill International and contractors working on distribution rehabilitation projects (KEC, FEKA). The target is achievable by end Dec 2015.

Geographical Location Gereshk District, Afghanistan
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects An IEE and EMP were disclosed at ADB website on 4 October 2011. The executing agency conducted a public information dissemination campaign in Gereshk. The project impacts are considered minimal and the security risks to both the local community and undertaker of doing this public consultation far out weigh the benefits. However, should as the Project develops it be identified that there will be particular risks or impacts to the local community then a community relation plan and grievance mechanisms should be developed to enable information and guidance to be disseminated to the local community and to provide them with a mechanism to feedback queries and concerns.
Involuntary Resettlement The Project may have some involuntary resettlement impacts that are not significant. Due to the security situation in the project area the preparation of the required RP will be done after the finalization of the detail design. Updated LARF was disclosed at ADB website on 8 November 2011.
Indigenous Peoples Impacts on indigenous peoples are not envisaged.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultation with key stakeholders has been ongoing throughout project development. No public consultation is envisaged so far, as the security risks to both the local community and undertake. However, as the project develops, should it be identified that there wil be particular risks or impacts to the local community, then a community relation plan and grievance mechanisms should be developed to enable information and guidance to be disseminated to the local community, and to provide them with a mechanism to feedback queries and concerns.
During Project Implementation Consultation and information sharing with local communities. The executing agency conducts public information dissemination campaign in Gereshk.
Business Opportunities
Consulting Services Project supervision consultants - Quality-Based Selection using Full Technical Proposal
Procurement

Rehabilitation and upgrading of Gereshk Hydropower Plant - ICB turnkey

Distribution network upgrade - ICB goods

End-user metering system - ICB goods

Responsible ADB Officer Asad Aleem
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Da Afghanistan Breshna SherkatRAZIQUE.SAMADI@DABS.AFChaman Houzouri,Kabul,Islamic Republic
of Afghanistan
Timetable
Concept Clearance -
Fact Finding 28 Jun 2010 to 03 Jul 2010
MRM -
Approval 22 Dec 2011
Last Review Mission -
Last PDS Update 30 Mar 2015

Grant 0280-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Dec 2011 21 Jan 2012 20 Mar 2012 31 Mar 2015 31 Dec 2016 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 43.00 Cumulative Contract Awards
ADB 43.00 22 Dec 2011 31.93 0.00 74%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 22 Dec 2011 0.00 0.00 0%

Grant 0281-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Dec 2011 21 Jan 2012 20 Mar 2012 31 Mar 2015 31 Dec 2015 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 21.10 Cumulative Contract Awards
ADB 0.00 22 Dec 2011 0.00 13.87 69%
Counterpart 1.10 Cumulative Disbursements
Cofinancing 20.00 22 Dec 2011 0.00 10.02 50%

Grant 0282-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
22 Dec 2011 21 Jan 2012 20 Mar 2012 31 Mar 2015 31 Dec 2015 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 12.40 Cumulative Contract Awards
ADB 0.00 22 Dec 2011 0.00 9.68 78%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 12.40 22 Dec 2011 0.00 5.90 48%

Evaluation Documents

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