Bangladesh: Power System Expansion and Efficiency Improvement Investment Program - Tranche 1

Sovereign Project | 42378-015

Summary

The proposed investment program includes three tranches encompassing generation expansion and associated transmission and distribution improvements. Tranche 1 mainly focuses on generation expansion. Tranche 2 focuses on transmission and distribution improvement together with a pilot solar irrigation component. Tranche 3 also invests on generation expansion. Generation expansion in the MFF will be undertaken through supply side energy efficiency improvement so that about 50% power can be generated without burning additional gas. Given the acute gas shortages in Bangladesh, conversion of single cycle gas fired power plants to combined cycle plants the technology adopted in the investment program is the best way to expand the generation capacity. The sequencing of the tranches is well aligned with the sector needs and the government program.

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Project Name Power System Expansion and Efficiency Improvement Investment Program - Tranche 1
Project Number 42378-015
Country Bangladesh
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Grant 0320-BAN: Power System Expansion & Efficiency Improvement Investment Program - Tranche 1
European Investment Bank US$ 7.00 million
Loan 2966-BAN: Power System Expansion & Efficiency Improvement Investment Program - Tranche 1
Ordinary capital resources US$ 185.00 million
Loan: Power System Expansion & Efficiency Improvement Investment Program - Tranche 1
European Investment Bank US$ 91.00 million
Islamic Development Bank US$ 85.00 million
Loan: Power System Expansion and Efficiency Improvement Investment Program - Tranche 1
European Investment Bank US$ 21.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Partnerships
Sector / Subsector

Energy - Electricity transmission and distribution - Energy efficiency and conservation

Gender Equity and Mainstreaming No gender elements
Description

The proposed investment program includes three tranches encompassing generation expansion and associated transmission and distribution improvements. Tranche 1 mainly focuses on generation expansion. Tranche 2 focuses on transmission and distribution improvement together with a pilot solar irrigation component. Tranche 3 also invests on generation expansion. Generation expansion in the MFF will be undertaken through supply side energy efficiency improvement so that about 50% power can be generated without burning additional gas. Given the acute gas shortages in Bangladesh, conversion of single cycle gas fired power plants to combined cycle plants the technology adopted in the investment program is the best way to expand the generation capacity. The sequencing of the tranches is well aligned with the sector needs and the government program.

The Tranche 1 of the proposed Power System Expansion and Efficiency Improvement Investment Program will address two key areas in the power sector aligning with the priorities identified in the CPS: improving energy use efficiency of thermal power plants; and improving the transmission network capacity. The project interventions will include: (i) adding 235 MW capacity by conversion of four single cycle gas fired power plants to combine cycle plants at Khulna, Baghabari, Sylhet and Shahjibazar; (ii) construction of 180 km 132 kV transmission lines and four 133/32 kV substations; and (iii) capacity building. The capacity building component includes training on investment planning, operations planning, energy auditing and monitoring, financial management and auditing, project preparation and appraisal, and operation and maintenance of solar irrigation pumps. In addition, the capacity building component will provide consultants for preparation of subsequent tranches and implementation support.

Project Rationale and Linkage to Country/Regional Strategy About 50% of the population has access to power and those who have access also faces severe power shortages; about 1875 MW (28% of demand) has not been met during the peak periods in 2011. The available power generating capacity in Bangladesh, by June 2011, was of 4890 MW, against the estimated unconstrained demand of 6765 MW, leaving a significant demand-supply gap. The government envisages investing $9.5 billion for generation expansion during the five year planning period and matching investment of about $3 billion on transmission and distribution improvements together with a sound financing plan. Investments envisaged in the sixth five year plan are expected to increase electrification rate to 68% by 2015, eliminate the supply demand gap and resolve reliability and supply quality issues. The proposed MFF aims to support this government investment program by providing $1600 million worth investments mobilizing nearly 50% of the external financing through co- financing arrangements.
Impact Increased access to clean and reliable electricity supply in Bangladesh
Project Outcome
Description of Outcome Improved efficiency in electricity generation, and transmission in Bangladesh
Progress Toward Outcome Project implementation ongoing.
Implementation Progress
Description of Project Outputs

1. Increased generation capacity

2. Increased transmission capacity

3. Enhanced capacity of power sector agencies

4. Project management system in place

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

Consulting service recruitment for Tranche 3 preparation initiated.

Contract for transmission lines and substations (Part B) was signed in Sep 2014.

Contract for conversion of Khulna power plant (Part A) was signed in Dec 2013.

Twelve individual consultants mobilized in Apr 2013 for Tranche 2 preparation completed service in Dec 2013.

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Zhang Lei
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
North-West Power Generation Co. Ltd.(NWPGCL)Bidyut Bhaban, 1 Abdul Gani Road
Dhaka-1000, Bangladesh
Power Grid Company of Bangladesh, Ltd. (PGCB)PGCB@CITECHCO.NET;_WEBSITE:WWW.PGCB.ORGIEB Bhaban (4th Floor)
Ramna,Dhaka, Bangladesh
Power Div-Min of Power, Energy & Mineral ResourcesBangladesh Secretariat
Dhaka
Bangladesh
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 12 Dec 2012
Last Review Mission -
Last PDS Update 30 Sep 2014

Grant 0320-BAN

Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 7.00 Cumulative Contract Awards
ADB 0.00 - 0.00 0.00 %
Counterpart 0.00 Cumulative Disbursements
Cofinancing 7.00 - 0.00 0.00 %

Loan 2966-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Dec 2012 03 Apr 2013 25 Jun 2013 31 Dec 2018 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 393.00 Cumulative Contract Awards
ADB 185.00 12 Dec 2012 174.69 0.00 94%
Counterpart 32.00 Cumulative Disbursements
Cofinancing 176.00 12 Dec 2012 49.34 0.00 27%

Safeguard Documents

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Evaluation Documents

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