Kazakhstan: Karaganda District Heating Network Rehabilitation Project

Sovereign Project | 45068-001

Summary

The proposed Karaganda District Heating Network Rehabilitation project (the Project) aims to ensure security of heat supply, reduce technical and commercial losses, and, enhance operational efficiency of district heating systems in Karaganda province. The Project has two main components: (1) rehabilitation of 7 pumping stations, and, replacement of 127 kilometers of pipelines, as well as modernization of metering, instrumentation and controls through a scalable supervisory, control and data acquisition (SCADA) system; and, (2) capacity building on technical, regulatory, and institutional aspects for relevant Government institutions.

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Project Name Karaganda District Heating Network Rehabilitation Project
Project Number 45068-001
Country Kazakhstan
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8253-KAZ: Karaganda District Heating Network Rehabilitation Project
Technical Assistance Special Fund US$ 1.00 million
TA 8253-KAZ: Karaganda District Heating Network Rehabilitation Project (Supplementary)
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 - Energy efficiency and conservation
Gender Equity and Mainstreaming No gender elements
Description

The proposed Karaganda District Heating Network Rehabilitation project (the Project) aims to ensure security of heat supply, reduce technical and commercial losses, and, enhance operational efficiency of district heating systems in Karaganda province. The Project has two main components: (1) rehabilitation of 7 pumping stations, and, replacement of 127 kilometers of pipelines, as well as modernization of metering, instrumentation and controls through a scalable supervisory, control and data acquisition (SCADA) system; and, (2) capacity building on technical, regulatory, and institutional aspects for relevant Government institutions.

The Project's impact will be improved energy efficiency in Kazakhstan, and the outcome will be a stable, safe and energy efficient district heating distribution network in Karaganda province. Specific performance targets will be determined during the project preparatory technical assistance (PPTA), and will be measured in terms of energy savings and reduction of GHG emissions, as well as the national indicator Satisfaction with the Quality of Utility Services . The PPTA outcome will be a well-prepared Project, and strengthened institutional capacities for energy efficiency, and in developing GHG emission reduction projects.

The project outputs consist of the following components: (i) modernization of the Karaganda city district heating distribution network, and (ii) capacity Building, Project Supervision and Management: project implementation support comprising project management and supervision, safeguards compliance, and capacity building (on project preparation and development, access to finance and development of investment strategy including carbon finance and trading, financial management, and procurement) for the Ministry of National Economy, the Karaganda Akimat, Teplotranzit, and other relevant agencies as necessary.

Project Rationale and Linkage to Country/Regional Strategy While energy has fueled Kazakhstan's recent rapid economic growth, inefficient energy use has also accelerated resource depletion, entailed lost revenues and high opportunity costs, and caused severe negative environmental and health impacts. Half of Kazakhstan's energy infrastructure is older than 30 years, some 50-60 years old, and based on old Soviet technology. Given the country's harsh and long winters, with temperatures reaching as low as minus 50 degrees Celsius, district heating (DH) systems for distributing heat for residential and commercial space and for hot water requirements are critically important. Yet, 80% of the national district heating networks are in urgent need for rehabilitation and replacement, estimated to cost at least $7 billion. Low tariffs, years of underinvestment, partial or full operation and maintenance (O&M) negligence, and depreciation are the main causes for the degradation of this vital urban energy service, which is now approaching the level of a national disaster.
Impact
Project Outcome
Description of Outcome
Progress Toward Outcome
Implementation Progress
Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location karaganda
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Domestic, commercial, industrial energy users, community services in the project area will benefit from more efficient and reliable heat supply. Their participation will be in the public consultations, discussions and interviews to be conducted as part of the preparation of the initial environmental examination as part of the PPTA for the project. In addition, end-user perspectives will be incorporated in project design through focus group discussions with various categories of consumers.
During Project Implementation Domestic, commercial, industrial energy users, community services in the project area will benefit from more efficient and reliable heat supply. Their participation will be in the public consultations, discussions and interviews to be conducted as part of the preparation of the initial environmental examination as part of the PPTA for the project. The PPTA will prepare a shortlist of relevant NGOs. Other interest groups that may prove useful to collaborate with for a possible heat loss reduction program component that may develop during the PPTA could be the condominium associations in Karaganda.
Business Opportunities
Consulting Services A consulting firm was recruited through the quality- and cost-based selection method using a full technical proposal in line with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). The consultant was mobilized in May 2013.
Responsible ADB Officer Cinderella Tiangco
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Dept. for Budget Inv't &PPP Devt,Min of Nat'l EconDinara Issenova, Head of Division010000, Astana, Kazakhstan, 8, Orynbor Street, Kazakhstan
Timetable
Concept Clearance -
Fact Finding -
MRM -
Approval 11 Dec 2012
Last Review Mission -
Last PDS Update 30 Mar 2015

TA 8253-KAZ

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
11 Dec 2012 10 Jan 2013 10 Jan 2013 31 Dec 2013 31 Jul 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,600,000.00 0.00 0.00 0.00 0.00 0.00 1,600,000.00 11 Dec 2012 430,885.90