Kyrgyz Republic: Power Sector Improvement Project (formerly Transmission and Distribution Metering Project)

Sovereign Project | 43456-023

Summary

While the entire power sector needs modernization, the Government places highest priority on loss reduction and strengthening governance. This is not only to improve commercial operations, but to regain the population's confidence in the power sector and to reestablish political stability. Energy security through generation capacity expansion is a priority, but the short-term solutions are to improve system efficiency and reliability, and to enhance regional power trade. The proposed Project contributes to attaining the goals through the following components:

Latest Project Documents

Consulting Notices

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Procurement Notices

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Procurement Documents


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Project Name Power Sector Improvement Project (formerly Transmission and Distribution Metering Project)
Project Number 43456-023
Country Kyrgyz Republic
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0218-KGZ: Power Sector Improvement Project (formerly Transmission and Distribution Metering Project)
Asian Development Fund US$ 28.10 million
Loan 2671-KGZ: Power Sector Improvement Project (formerly Transmission and Distribution Metering Project)
Asian Development Fund US$ 16.70 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Sector / Subsector

Energy - Electricity transmission and distribution

Gender Equity and Mainstreaming No gender elements
Description

While the entire power sector needs modernization, the Government places highest priority on loss reduction and strengthening governance. This is not only to improve commercial operations, but to regain the population's confidence in the power sector and to reestablish political stability. Energy security through generation capacity expansion is a priority, but the short-term solutions are to improve system efficiency and reliability, and to enhance regional power trade. The proposed Project contributes to attaining the goals through the following components:

(i) Automated Metering and Data Acquisition system (AMDA) will bring transparency to the wholesale electricity transaction between the unbundled power companies as well as in regional power trade. AMDA will eliminate errors and rampant metering data manipulation that are untraceable by the current archaic technology. Loss reduction will make more power available domestically and also improve the financial performance of the power companies. Accurate power flow data is indispensible to improve the power companies' commercial operation performance. The system also enhances regional power trade through (i) meeting the CAPS metering accuracy requirement, and (ii) eliminating unauthorized export.

(ii) Substation Rehabilitation will improve reliability of the Kyrgyz power system by replacing dilapidated circuit-breakers and instrument transformers that have reached their economic lives, are technologically obsolete, or do not meet the accuracy requirement for regional power trade. Since the Kyrgyz system is intricately interconnected with the Central Asia Power System (CAPS), rehabilitation increases reliability of the regional system and enhance regional power trade.

(iii) Communications and Supervisory Control and Data Acquisition (SCADA) system will link seven major substations (estimated) and the control centers via optical fiber, and enables the system operator to make efficient dispatching based on real-time data. The scope is limited to system monitoring function of the northern loop. SCADA will reduce technical losses through avoidance of overloading, and also enable faster detection and restoration of faults. The system improves the overall efficiency and reliability of the Kyrgyz system and CAPS.

(iv) Study on Electricity Settlement Center will study the settlement systems appropriate to bring about transparency and accountability to the Kyrgyz power sector, and to maximize the benefits of the AMDA. It will devise mechanisms to publish data on energy flows and manage distribution of sector revenues in a transparent manner.

(v) Corporate and Financial Management Capacity Building for the National Electric Grid of Kyrgyzstan (NEGK) will improve corporate management through the preparation of a corporate business plan including the review of investment needs, operation and maintenance practices, organizational reforms, internal control, asset revaluation, and cost of transmission service. Financial management capacity will be strengthened through introduction of the International Financial Reporting Standards (IFRS) and appropriate corporate accounting software.

The project fits with ADB's Starategy 2020 and ADB's Energy Policy. The latter focuses on energy efficiency, cutting fossil fuel use, energy security, energy access, and regional cooperation. The project also promotoes capacity development and governance.

Project Rationale and Linkage to Country/Regional Strategy Years of neglect since independence have left the Kyrgyz power sector in a state of disrepair. Facilities are dilapidated, losses are high, tariffs are below cost-recovery, and financial performance is poor. The power sector needs an urgent overhaul before the functionality of the system is lost. It needs to improve energy efficiency, energy security, and regional power trade. The proposed project is critical to attaining these goals.
Impact Stronger reliability of national and regional power supply.
Project Outcome
Description of Outcome Better operational efficiency of the power companies
Progress Toward Outcome

NEGK submitted a satisfactory updated IEE on 25 June 2014. The IEE was endorsed by the State Agency on Environmental Protection and Forestry on 8 July 2014 and was posted on both ADB and NEGK websites

Status of all subprojects under the loan and grant are as follows:

The Supply Contract awarded on 5 March 2013 is ongoing. Complete delivery of good is expected by Q1 2015, with 95% disbursed under the contract.

Lot 2 (Turnkey Contract) - revised bidding documents was approved by ADB. Invitation for Bids was posted on ADB website on 16 September 2013 with initial deadline of 3 December 2013. ADB provided no objection to technical bid evaluation in January 2015. NEGK currently preparing financial bid evaluation.

The Consultants' Final Reports for the Settlement Center Study and Capacity Building of NEGK have been submitted to MOE. Consultant's contracts for both components have been completed.

The project implementation contract was concluded in December 2014. NEGK will engage individual consultants to assist the PIU staff for the rest of project implementation period.

As of 30 March 2015 2015, the loan's overall cumulative contracts award is $6.991 million or 44% of the total loan amount; and overall cumulative disbursements is $6.232 million or 39% of the total loan amount. For grant, cumulative contract award is $11.929 million or 43% of total grant amount while cumulative disbursement is $10.958 million or 39% of total.

Implementation Progress
Description of Project Outputs

(Physical)

AMDA linking 190 NEGK substations and EPP facilities commissioned

(Physical)

Over 50 selected substations are rehabilitated

(Physical)

SCADA (Phase 1: System Monitoring) developed for the northern transmission grid system

(Nonphysical)

Suitable settlement mechanism for wholesale electricity transactions is recommended

(Nonphysical)

Stronger financial management capacity of NEGK

(Nonphysical)

NEGK's business plan is prepared

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

Project implementaton is 2 years delayed. Extension of two years has been approved bringing the Project completion date to 30 June 2016. Implementation schedule was revised accordingly. In March 2015, the Government requested for another 18-month extension for ADB consideration.

Bidding documents for the SCADA/AMDA procurement package was issued in Sept 2013. Bids were received in Feb 2014. Technical evaluation was concluded in January 2015. Financial bid evaluation is on-going. Contract award is expected by June 2015.

Supply contract was awarded in March 2013. Equipment expected to be fully delivered by Q2 2015.

Final Reports for the Settlement Mechanism Study and Capacity Building of NEGK have been submitted to MOE.

NEGK awarded external auditor contract in June 2014, the consulting firm will audit the project accounts covering FY2012-FY2016 for both NEGK and MOEI, and financial statements covering FY 2013-2016 for NEGK.

Geographical Location Country wide
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects An initial environmental examination has been prepared and posted in accordance with ADB's Safeguard Policy Statement (2009). The major anticipated impact on the environment will come from the disposal of electrical equipment. The IEE is being updated to include for testing of oil for PCB contamination and management plant for oil disposal for cases of oil with and without PCB contamination. NEGK submitted satifactory updated IEE on 25 June 2014. The IEE was endrosed by the State Agency on Environmental Protection and Forestry on 8 July 2014 and was posted on both ADB and NEGK websites.
Involuntary Resettlement Project investments will be implemented mostly in existing substations where land acquisition and resettlement (LAR) impacts are not envisaged. Work space and access is required only for stringing OPGW over the existing transmission towers to develop a modern communication system. The towers are mostly on farmland. Very limited temporary LAR impact such as crop losses during installation is expected. A LAR framework has been prepared and disclosed in accordance with ADB's Safeguard Policy Statement and Operations Manual F1/OP.12. The turnkey contractor will preparea LAR plan in accordance with the LAR framework based on the contarctor's approved design. The LAR plan will be approved by the PIU and project management consultants, submitted to ADB for endorsement, and posted.
Indigenous Peoples The project is not expected to affect indigenous peoples as defined under ADB's Safeguard Policy Statement.
Stakeholder Communication, Participation, and Consultation
During Project Design The Project does not involve sensitive social or participatory issues.
During Project Implementation Consultations will be conducted in the areas affected by the OPGW stringing works.
Business Opportunities
Consulting Services

(i) Project management. The project implementation contract was concluded in December 2014. NEGK will engage individual consultants to augment the PIU staff for the rest of project implementation period.

(ii) NEGK capacity development. The Consultants' Final Report for the Capacity Building of NEGK have been submitted to MOE. Consultant's contract has been completed.

(iii) Settlement mechanism study. The Consultants' Final Reports for the Settlement Mechanism Study has been submitted to MOE. Consultant's contract has been completed.

Procurement

(i) Plant - design, supply, and install contract for AMDA and SCADA systems and communications. Bidding documents were issued in September 2013. Bids were received in February 2014. Technical bid evaluation report (TBER) was approved in January 2015. Financial evaluation is ongoing, and contract award is expected by June 2015.

(ii) Goods for substation rehabilitation and equipment. Supply contract was awarded on 5 March 2013 is ongoing. Complete delivery of good is expected by Q1 2015, with 95% disbursed under the contract.

Responsible ADB Officer Mirdin Eshenaliev
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
National Electric Grid of KyrgyzstanMr. Medetbek Aitkulov, General Director326 Jibek Jolu, Bishkek 720070, Kyrgyz Republic
Ministry of Energy and IndustryAhunbaev Str. 119, Bishkek City
720055, Kyrgyz Republic
Timetable
Concept Clearance 23 Apr 2010
Fact Finding 26 May 2010 to 14 Jun 2010
MRM 06 Aug 2010
Approval 27 Sep 2010
Last Review Mission -
PDS Creation Date 05 Oct 2010
Last PDS Update 30 Mar 2015

Grant 0218-KGZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Sep 2010 08 Dec 2010 15 Jun 2011 30 Jun 2014 31 Dec 2017 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 39.30 Cumulative Contract Awards
ADB 28.10 27 Sep 2010 23.46 0.00 83%
Counterpart 11.20 Cumulative Disbursements
Cofinancing 0.00 27 Sep 2010 12.69 0.00 45%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - - - Satisfactory

Loan 2671-KGZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Sep 2010 08 Dec 2010 15 Jun 2011 30 Jun 2014 31 Dec 2017 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 16.70 Cumulative Contract Awards
ADB 16.70 27 Sep 2010 13.85 0.00 86%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 27 Sep 2010 7.29 0.00 45%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - - - Satisfactory

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Power Sector Improvement Project: Environmental Monitoring Report (July - December 2014) Environmental Monitoring Reports Jan 2015
Power Sector Improvement Project: Environmental Monitoring Report (January-June 2014) Environmental Monitoring Reports Dec 2014
Power Sector Improvement Project Initial Environmental Examination Jun 2014
Power Sector Improvement Project Initial Environmental Examination Aug 2010
Power Sector Improvement Project Resettlement Frameworks Jul 2010

Evaluation Documents

See also: Independent Evaluation

No documents found.


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