India: MFF - Himachal Pradesh Clean Energy Transmission Investment Program (Facility Concept)

Sovereign Project | 43464-013

Summary

The Himachal Pradesh Clean Energy Transmission Investment Programinvestment will fund electric transmission system upgrades and expansion in the state of Himachal Pradesh, India in order to increase transmission system capacity. Outputs will be new transmission substations and high voltage transmission lines. A capacity development component will benefit Himachal Pradesh Power Transmission Company Ltd. (HPPTCL), the state's transmission utility, which will assist the state to achieve its power sector reform objectives including the formation and an independent transmission utility.

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Project Name MFF - Himachal Pradesh Clean Energy Transmission Investment Program (Facility Concept)
Project Number 43464-013
Country India
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
MFF Facility Concept 0062-IND: MFF - Himachal Pradesh Clean Energy Transmission (Facility Concept)
Ordinary capital resources US$ 350.00 million
TA 7875-IND: Himachal Pradesh Power Sector Capacity Development and Implementation Support
Technical Assistance Special Fund US$ 600,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Energy - Electricity transmission and distribution

Gender Equity and Mainstreaming No gender elements
Description The Himachal Pradesh Clean Energy Transmission Investment Programinvestment will fund electric transmission system upgrades and expansion in the state of Himachal Pradesh, India in order to increase transmission system capacity. Outputs will be new transmission substations and high voltage transmission lines. A capacity development component will benefit Himachal Pradesh Power Transmission Company Ltd. (HPPTCL), the state's transmission utility, which will assist the state to achieve its power sector reform objectives including the formation and an independent transmission utility.
Project Rationale and Linkage to Country/Regional Strategy

1. To ensure energy security for the country, India has decided to fully develop all domestically available energy options, including hydropower. India is endowed with enormous economically viable hydropower potential , but only about 21% of India's hydroelectric potential has been harnessed to-date and another 15% is under development. The Government recognizes the importance of increasing the share of hydropower generation in the energy mix and introduced the "50,000 MW Hydropower Initiative" in 2003. Under this initiative, the hydro-rich states, including Himachal Pradesh, are given special incentives to promote hydropower development.

3. Himachal Pradesh, a small mountainous state with a population of slightly over 6 million, has abundant water resources in the five major rivers flowing through the state from the western Himalayas. The power generation potential of Himachal Pradesh is about 23,000 MW, which is about one-fourth of the total hydropower potential of India. In its hydropower policy (2006) , the Government of Himachal Pradesh (GOHP) targets its comparative advantage in hydropower with the goal to become the "hydropower state" of the country. The state's hydropower development roadmap includes planned investments in installed capacity by the state, central government, and private sectors, as well as enabling infrastructure such as road access and transmission interconnections to facilitate hydropower development. The state's transmission system master plan aggregates hydropower capacity on a river-basin basis and designs least-cost solutions to transmit the power within the state and to the national grid.

4. In addition to developing its hydropower resources, it is critical that Himachal Pradesh commensurately build out its electric transmission infrastructure so that the additional power can be efficiently transmitted within the state and exported to the national grid. The entity responsible for the state's transmission system is the Himachal Pradesh Power Transmission Company Ltd. (HPPTCL). As the state's transmission utility company, HPPTCL was established in 2009 as part of the unbundling of the former state integrated utility company, Himachal Pradesh State Electricity Board (HPSEB). HPPTCL thus retains staff and considerable transmission system planning and operational experience from HPSEB. As per the Electricity Act, 2003, integrated utility companies are required to be unbundled into separate generation, transmission and distribution entities. In 2006, the Government of Himachal Pradesh formed the Himachal Pradesh Power Corporation Ltd. (HPPCL) as state's generating company , and the erstwhile HPSEB will remain the state's distribution utility. The state also has an independent regulator, Himachal Pradesh Electricity Regulatory Commission, that overseas tariff matters and regulates these new entities as per regulatory guidelines from the Central Electricity Regulatory Commission.

Impact Himachal Pradesh power sector transmits clean energy to end users in Himachal Pradesh and India.
Project Outcome
Description of Outcome HPPTCL has sufficient assets and capacity to support its mandate as the state transmission utility company.
Progress Toward Outcome Implementation is ongoing.
Implementation Progress
Description of Project Outputs

New transmission system assets are operational

HPPTCL's management capacity enhanced

HPPTCL manages implementation of the MFF tranches on time and within budget.

Status of Implementation Progress (Outputs, Activities, and Issues) TA consultants have been engaged and fielded.
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects The tranche 1 and tranche 2 projects ares environment category B. The civil construction work is limited to building foundations for the transmission towers, and substations, and the subprojects do not come within any environmentally sensitive area. Based on the environmental assessment and surveys, associated potential adverse environmental impacts are minimal and can be mitigated through implementation of the EMP. An adequate budgetary provision in both the tranche 1 and the tranche 2 project covers the environmental mitigation and monitoring requirements, and the EMP is part of the construction contracts. The EA will supervise the construction contracts and EMP implementation, and quarterly progress reports of its implementation will be submitted to ADB. Overall, the major social and environmental impacts associated with the tranche 1 project are limited to the construction period and can be mitigated to an acceptable level by implementation of recommended engineering measures and environmental practices. A similar result is expected for tranche 3 based on investigations conducted to date. This will be confirmed during tranche 3 full due diligence.
Involuntary Resettlement The tranche 1 and tranche 2 project are involuntary resettlement category B. Census surveys and consultations were undertaken in accordance with ADB's Safeguard Policy Statement. Both tranches 1 and 2 will entail minimum private land acquisition. There are no structures or buildings to be affected and no physical displacement is foreseen. Regarding gender issues, the loan agreements include a standard assurance related to core labor standards for contractors (including equal pay for equal type of work), and an awareness program on HIV and sexually transmitted diseases and human trafficking.
Indigenous Peoples The tranche 1 and tranche 2 projects are indigenous peoples category C, and future tranche 3 is expected to be the same.
Stakeholder Communication, Participation, and Consultation
During Project Design During the preparatory stages of each tranche under the Facility, consultations will be carried out with various stakeholders and government officials concerned. Local communities, especially all the affected persons, will be consulted as part of the social and resettlement studies and surveys. Public consultations as per Indian laws and regulations as well as ADB's Safeguards Policy Statement, 2009 will be conducted for each subproject.
During Project Implementation Environmental Management Plans and Resettlement Plans devised for each loan tranche will be followed during project implementation.
Business Opportunities
Consulting Services The TA will require the services of individual consultants in the fields of transmission system engineering, transmission system planning, environment and social safeguards, financial management, economic and financial analysis, and human resource management. Detailed terms of reference (TOR) are covered in Appendix 2. ADB will recruit the consultants in accordance with its Guidelines on the Use of Consultants (2007, as amended from time to time). The Government of Himachal Pradesh, through HPPTCL, will provide office accommodate and transport as required, as well as counterpart office staff to be made available. Disbursements will be made in accordance with ADB's Technical Assistance Disbursement Handbook (May 2010, as amended).
Procurement HPPTCL has a procurement unit with a full-time staff of eight personnel, headed by a procurement professional with 20 years of procurement experience. Its tender committee, which will evaluate bids and make recommendations for award, consists of one representative each from (i) the Contract Services Department; (ii) the Materials Management Services, Engineering, Erection, and Construction Department; and (iii) the Finance Department. Proper record-keeping procedures are in place, and HPPTCL's board of directors grants final approval of all procurement transactions. HPPTCL staff have participated in ADB-sponsored procurement seminars, and ADB provided support to HPPTCL in preparing bidding documents in accordance with ADB's Procurement Guidelines (2010, as amended from time to time).
Responsible ADB Officer Andrew Jeffries
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Himachal Pradesh Power Transmission Corp. Ltd.Barowalia House, Khalini, Shimla 171002
Himachal Pradesh, India
Timetable
Concept Clearance 14 Jan 2011
Fact Finding 04 May 2011 to 13 May 2011
MRM 17 Jun 2011
Approval 30 Sep 2011
Last Review Mission -
Last PDS Update 09 Mar 2015

MFF Facility Concept 0062-IND

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 437.85 Cumulative Contract Awards
ADB 350.00 - 0.00 0.00 %
Counterpart 87.85 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

TA 7875-IND

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
30 Sep 2011 17 Nov 2011 17 Nov 2011 31 Dec 2016 - -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
600,000.00 0.00 50,000.00 0.00 0.00 0.00 650,000.00 30 Sep 2011 258,227.38

Evaluation Documents

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