Bhutan: Second Green Power Development Project

Sovereign Project | 44444-013 Status: Approved

Summary

The Asian Development Bank is working with Bhutan to export clean energy while supporting social services and providing electricity to the poor. The project is building a run-of-the-river hydropower plant in central Bhutan though a partnership with several private companies. Clean power generated by the plant will be sold to India and will help reduce carbon emissions.

Latest Project Documents

Consulting Notices See also: CMS

No notices are currently available for this project.

Procurement Notices See also: Operational Procurement

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Procurement Documents

None currently available.


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Project Name Second Green Power Development Project
Project Number 44444-013
Country Bhutan
Project Status Approved
Project Type / Modality of Assistance Grant
Loan
Technical Assistance
Source of Funding / Amount
Grant 0421-BHU: Green Power Development Project II
Asian Development Fund US$ 25.25 million
Loan 3225-BHU: Second Green Power Development Project
Ordinary capital resources US$ 70.00 million
Loan 3226-BHU: Second Green Power Development Project
Asian Development Fund US$ 25.25 million
TA 8791-BHU: Acceleration of Hydropower Trading Development
Technical Assistance Special Fund US$ 1.00 million
Loan: Second Green Power Development Project
State Bank of India US$ 41.66 million
Export-Import Bank of India US$ 17.16 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Energy - Large hydropower generation

Gender Equity and Mainstreaming Some gender elements
Description ADB and the Government of Bhutan are working together to export clean energy while supporting social services and providing electricity to the poor. The Second Green Power Development Project is building a run-of-the-river hydropower plant in central Bhutan through a partnership with several private companies. Clean power generated by the plant will be sold to India and will help reduce carbon emissions. The clean energy from Bhutan will allow India to eliminate around 460,000 tons of carbon dioxide emissions every year that it would otherwise have generated through fossil fuels. The revenue generated from exporting power to India will be used to finance social services in Bhutan such as health, education and rural development. The planned 118-megawatt plant will be located on the Nikachhu River in a narrow valley in the central Trongsa District. As a run-of-the-river plant, it does not need a large reservoir for water storage, but comprehensive safeguard management plans are provisioned for the project implementation.
Project Rationale and Linkage to Country/Regional Strategy Bhutan is the only South Asian country with a surplus of power for export. About 75% of the power it generates is exported to India, which contributes to one-fifth of the Bhutan's gross domestic product and accounts for one-third of government revenue. The money generated from power exports to India is the primary source for government spending on social services such as health, education, and rural development. Hydropower is the principal source of energy in Bhutan and as a result it is the foundation of the economy and social services system in the country. As Bhutan's expansion of hydropower has increased in recent years, the quality of life and social services have improved. Continued hydropower development is critical to sustaining government revenue, social services investment and keeping electricity prices low.
Impact Expanded cross-border power trading

Project Outcome

Description of Outcome Increased clean hydropower generation in Bhutan
Progress Toward Outcome Ongoing.
Implementation Progress
Description of Project Outputs

1. Hydropower plant constructed

2. DGPC and THyE project management and implementation capacity enhanced

3. Hydropower development and trading framework improved

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

The main two procurement packages (civil works and equipment) were floated in early December 2014. Their bids were opened in early April 2015 and ADB issued non-objection letter for contract awards in early November 2015. The contract for electro-mechanical package was signed in 30 December 2015. The contract for civil works is expected to be signed in March 2016.

The project site development works have almost been completed as of December 2015. Land acquisition activities have been implemented in compliance with all applicable laws and regulations of the government and the resettlement plan. For monitoring activities, the panel of experts was all appointed.

Geographical Location

Safeguard Categories

Environment A
Involuntary Resettlement B
Indigenous Peoples C

Summary of Environmental and Social Aspects

Environmental Aspects Provided in draft environmental impact assessments disclosed.
Involuntary Resettlement Provided in a draft resettlement plan disclosed.
Indigenous Peoples Not applicable.
Stakeholder Communication, Participation, and Consultation
During Project Design A series of consultations with affected persons and communities have been conducted by the project implementing agency for project preparation, and they will be continued.
During Project Implementation A series of consultations with affected persons and communities will be continued throughout project implementation.

Business Opportunities

Consulting Services The consultants financed by ADB for the attached TA will be recruited according to ADB's Guidelines on the Use of Consultants. An estimated 40 person-months (25 international, 15 national) of consulting services are required to strengthen the power sector's key frameworks and systems to enhance Bhutan's hydropower development and trading by using ADB TA. Consulting firms will be engaged using the quality and cost based selection (QCBS) method.
Procurement Procurement is expected to be in accordance with ADB Procurement Guidelines.

Responsible Staff

Responsible ADB Officer Satoshi Kurimoto
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Department of Hydropower & Power Systems, Ministry of Economic Affairs
Thimphu, Bhutan
Druk Green Power Corporation
*
Bhutan
Tangsibji Hydro Energy Limited
Thori Lam, Thimpu, Bhutan

Timetable

Concept Clearance -
Fact Finding 08 Jul 2014 to 25 Jul 2014
MRM 01 Oct 2014
Approval 15 Dec 2014
Last Review Mission -
Last PDS Update 09 Mar 2016

Grant 0421-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Dec 2014 04 May 2015 26 Jun 2015 30 Jun 2020 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 44.11 Cumulative Contract Awards
ADB 25.25 15 Dec 2014 24.85 0.00 98%
Counterpart 18.86 Cumulative Disbursements
Cofinancing 0.00 15 Dec 2014 0.00 0.00 0%

Loan 3225-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Dec 2014 04 May 2015 26 Jun 2015 30 Jun 2020 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 70.00 Cumulative Contract Awards
ADB 70.00 15 Dec 2014 43.24 0.00 62%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 15 Dec 2014 2.48 0.00 4%

Loan 3226-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Dec 2014 04 May 2015 26 Jun 2015 30 Jun 2020 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 25.25 Cumulative Contract Awards
ADB 25.25 15 Dec 2014 23.53 0.00 99%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 15 Dec 2014 0.00 0.00 0%

TA 8791-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
15 Dec 2014 07 Jan 2015 07 Jan 2015 31 May 2017 10 Aug 2017 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 0.00 0.00 0.00 0.00 1,000,000.00 15 Dec 2014 153,808.00

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.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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