The Financing Agreement between ADB and the ASEAN Secretariat for the transfer and administration of the funds and implementation of the TA was signed in January 2013. TA funds were fully remitted on 6 February 2013. The TA was originally scheduled for completion on 31 December 2012 but was twice extended to until 31 December 2014 on account of the delay in the signing of the cofinancing agreement and the completion of diligence work for the projects supported under the TA. TA activities were completed on time.
A. Project Pipeline Development
The TA supported the initial screening of projects that are expected to contribute toward enhanced connectivity. The first project supported by the technical assistance is the Sumatra-Peninsular Malaysia High Voltage Direct Current (HVDC) Interconnection Project. ADB provided advisory assistance to validate the feasibility and eligibility of the project. The HVDC, along with Coal Fired Power Plant and Coal Mine Mouth projects in Sumatera, Republic of Indonesia, will transmit power to Malaysia expectedly starting in 2019.
To undertake preliminary analysis and due diligence, ADB engaged a team of consultants that comprises a coal power plant specialist, an environment, finance, and social experts and a public-private partnerships specialist. Specifically, the team is expected to review the financial and economic benefits of the HVDC, provide detailed financial and economic analysis, including the calculation of the financial internal rate of return; financial costs, and revenues, and assess the feasibility of financing the project through public-private partnerships. Discussions on other brownfield and other greenfield PPP opportunities with the relevant authorities and institutions are also ongoing. The initial study validated the project's viability and analyzed the possibility of ADB and AIF financing for the HVDC project. A follow-up study was conducted to explore possible ADB and AIF financing and look into details of the possible arrangements, such as ownership structure, buy/sell and/or exchange arrangement, financial arrangement and options to fast forward the HVDC project.
Under the IMT-GT subregion, Malaysia requested ADB to provide assistance in formulating the Green City Action Plan (GCAP) with a prioritized investment program for Melaka. A firm was engaged to provide preliminary and comprehensive scoping work for the preparation of the GCAP Melaka. A consultant was engaged to develop the GCAP and develop a priority program of enabling investment projects. An initial report has been prepared which will be presented at the IMT-GT high level meetings such as the Senior Officials Meeting (21-23 August 2013) and Ministerial Meeting (10-13 September 2013). The final report was presented in March 2014 and further disseminated at a knowledge exchange event for IMT-GT officials in Japan and a workshop on 22-23 April 2014 in Malaysia.
To support power grid development in the BIMP-EAGA subregion, a study was conducted to look at power interconnection between Borneo, potentially connecting Brunei Darussalam, Eastern Malaysia and Kalimantan, and Mindanao, Philippines. The study reviewed the current power systems status and development plans and power demand forecasts in the region. It identified a total of twelve projects as possible interconnection routes to optimize use of the regional energy resources and reduce the required reserve capacity for power utilities in the Island of Borneo. The final results of the study were submitted in December 2014 and further consultations are being pursued by ADB with relevant government agencies.
Active coordination is being maintained with the BIMP-EAGA and IMT-GT subregions to identify suitable regional projects that can be supported by the TA in contribution to the ASEAN connectivity development. Close coordination was also maintained with the Southeast Asia Energy Division, the Indonesia Resident Mission to complete the scoping studies conducted with the support of the TA.
B. Administrative and Technical Support
A national consultant has been engaged to provide continuous administrative and coordination support for the TA, including support for various activities related to the ASEAN Infrastructure Fund Limited (AIF) operations and overall coordination work to implement the technical assistance project.
C. Consensus-Building and Dissemination Activities
ADB Staff participated in various meetings of the ACCC in 2013 and 2014. Consultations continue to further build consensus and effectively disseminate information on the AIF.