Regional: Trans Borneo Power Grid: Sarawak to West Kalimantan Transmission Link (Malaysia)

Nonsovereign Project | 44921-014

Summary

This proposed project is the second of a two-part project that will enable exchange of power between the power utilities of Sarawak and West Kalimantan. This second part involves construction of necessary transmission infrastructure in Sarawak. The Asian Development Bank (ADB) has financed the first part, the construction of a transmission link on the West Kalimantan side as a separate sovereign loan to the Republic of Indonesia (INO Loan No: 3015). This cross-border power transmission project was identified as part of the long-term plan to connect isolated national power grids on the island of Borneo.

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Project Name Trans Borneo Power Grid: Sarawak to West Kalimantan Transmission Link (Malaysia)
Project Number 44921-014
Borrower/Company
Country Regional
Location
Approval Number
Type or Modality of Assistance
Loan US$ 45.00 million Processing
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 - Electricity transmission and distribution
Gender Equity and Mainstreaming No gender elements
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Energy Division, SERD
Responsible ADB Officer Rehan Kausar
Project Sponsor(s)
Description This proposed project is the second of a two-part project that will enable exchange of power between the power utilities of Sarawak and West Kalimantan. This second part involves construction of necessary transmission infrastructure in Sarawak. The Asian Development Bank (ADB) has financed the first part, the construction of a transmission link on the West Kalimantan side as a separate sovereign loan to the Republic of Indonesia (INO Loan No: 3015). This cross-border power transmission project was identified as part of the long-term plan to connect isolated national power grids on the island of Borneo.
Objectives and Scope The investment will finance (i) construction of the 47 km, double-circuit 275 kV transmission line between Mambong and the West Kalimantan border; and (ii) two 275 kV line bays with 15 megavolt-amperes line reactors per line bay at Mambong substation, to enable power exchange of about 230 MW between the two systems.
Linkage to Country/Regional Strategy

The project is fully consistent with Strategy 2020, and meets the two key complementary development agendas: environmentally sustainable growth and regional integration. The interim country partnership strategy, 2011- 2012 for Malaysia identifies establishment of nonsovereign projects and regional cooperation as priority support areas. The project is consistent with the energy policies of both the Government of Malaysia and the Government of Indonesia, and aligned to the energy road maps of both countries.

ADB's involvement in BIMP-EAGA through this project has been highly catalytic and demonstrative. Through the active involvement since 2007, ADB enabled the two neighboring countries to implement a project that had been planned since the early 1990s. This project demonstrates ADB's role in middle-income countries of improving development effectiveness and encouraging cross-border agreements. This will be the first subregional connectivity project under the BIMP-EAGA subregional program agenda. The project is fully in line with the connectivity and sustainability pillars of the BIMP-EAGA Implementation Blueprint 2012 -2016

Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples B
Summary of Environmental and Social Aspects
Environmental Aspects The final alignment of the transmission line with 144 towers and a 40-meter-wide right-of-way (RoW) will not relocate any houses or other significant structures. The overall impact will be limited to areas of cultivation and secondary vegetation growth that have already been affected by agriculture-- 43 towers will be in secondary forests, 34 in palm plantations, 57 in shifting cultivation, and 10 in paddy fields, and other primary vegetation areas. Good international construction practices such as limiting vegetation removal; erosion control; provision of site drainage; waste management; and the development and implementation of occupational and community health and safety plans will minimize construction phase impacts. No protected areas, primary forest, wetlands, peat lands, swamp forest, mangroves, estuarine areas, areas identified as having special ecological significance, or identified cultural heritage sites will be affected by the transmission alignment. This Project is a grid to grid interconnection with West Kalimantan, Indonesia and there is no mutual interdependence between the project and any source(s) for their viability.
Involuntary Resettlement Sarawak Energy has been implementing land acquisition since July 2012. A draft Resettlement and Ethnic Minority Development Plan (REMDP) and updated REMDP and Compliance Audit Report were disclosed on ADB's website in July 2011 and in October 2014 respectively. According to the updated document, 3 ha of land will be acquired for 144 towers, and 184 ha of land will be utilized for RoW which will require removal of assets (mainly crops and trees) on the land. 734 people (144 for tower bases and 590 for RoW) will be affected. No one will be severely affected and no houses will be relocated. In most cases, existing landowners will be able to continue to use the land beneath the towers and transmission line for livelihood purposes. The substation component of the project will have no resettlement impacts, because it will be located completely within the premises of an existing substation.
Indigenous Peoples

Bidayuh are the main indigenous population in Borneo, with some Chinese, Iban, and Malays who are well-integrated within the communities by marriage. In the context of ADB s safeguard

policy, Bidayuh ethnicity is indigenous but neither a minority nor vulnerable. Although the project will not impede rights to maintain, sustain, and preserve the Indigenous People's cultural identities, practices, and habitats, meaningful consultation has been carried out from the early stage of the project preparation.

Stakeholder Communication, Participation, and Consultation According to the updated REMDP and Compliance Audit Report, Sarawak Energy has taken steps to minimize the project's negative impact by consultation with affected communities. Meaningful consultation with the communities was carried out firstly in 2009 during the social impact assessment and in 2011 during the draft REMDP preparation. After the final transmission line route had been established, Sarawak Energy has been conducting the ground consultation with the affected land owners. During implementation of the REMDP, consultations with local communities in the vicinity of the proposed transmission line and affected persons will continue.
Timetable for assistance design, processing and implementation
Concept Clearance 13 Aug 2010
Due Diligence 17 Feb 2011
Credit Committee Meeting 27 Jan 2014
Approval -
Last PDS Update 12 Aug 2015

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Evaluation Documents

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