Armenia: Power Transmission Rehabilitation Project

Sovereign Project | 46416-002 Status: Approved

Summary

ADB is helping Armenia further overhaul its Soviet-era power network, including expanding its supervisory control and data acquisition (SCADA) system, and upgrading two 220 kilovolt substations at Agarak 2 and Shinuhayr. The project will reduce power losses, boost capacity, and improve the quality and reliability of power supplies to both urban and rural customers.

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Consulting Notices

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Procurement Notices

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Procurement Documents


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Project Name Power Transmission Rehabilitation Project
Project Number 46416-002
Country Armenia
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3150-ARM: Power Transmission Rehabilitation Project
Asian Development Fund US$ 37.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Energy - Electricity transmission and distribution - Energy efficiency and conservation

Gender Equity and Mainstreaming No gender elements
Description The project will upgrade the national power system operation's reliability and efficiency, and enhance transmission capacity. The project will include three main components: (i) expansion of supervisory control and data acquisition (SCADA) system; (ii) rehabilitation of four existing 220/110-kilovolt (kV) substation; and (iii) support for institutional development, capacity building, and project management. The project will help increase the electricity supply to urban and rural consumers to support inclusive and sustainable economic development.
Project Rationale and Linkage to Country/Regional Strategy

Armenia has no proven oil or natural gas reserves and imports most of its fossil fuel resources from Russia (through Georgia) and has begun importing gas from Iran. Imports account for about 77% of total primary energy supply and natural gas imports from Russia account for 81% of total energy imports. Strengthening energy security and improving energy efficiency are the country's top priorities. Development of indigenous energy resources and rehabilitation of old and inefficient generation, transmission, and distribution infrastructure are critical to the country's energy security.

The core problem in Armenia's energy sector focuses on the low efficiency of energy resources utilization. This has been evidenced by very limited utilization of substantial renewable energy resources, low efficiency of thermal and hydro power plants, relatively large electricity transmission and generation losses, and incomplete realization of the electricity export potential.

Much of the sector's infrastructure was built during the Soviet-era and has deteriorated significantly because of the lack of sufficient funding for rehabilitation and maintenance. Roughly 70% of the installed equipment at power generation plants has been in operation for more than 30 years, and 50% for more than 40 years. The average age of power transmission assets including substations is 45 years and, distribution assets 32 years. Much of the existing transmission infrastructure has reached the end of its useful life and requires major rehabilitation or replacement to continue reliable operation. Nearly 90% of 220-kV overhead lines require rehabilitation, and about 42% of low-voltage substations are in deficient technical condition. ADB's Interim Operational Strategy for Armenia, which was approved in 2006, identified the energy sector as one of the priority sectors for ADB's intervention. The Country Partnership Strategy for Armenia is currently under preparation, and is expected to be finalized in 2014. ADB will continue assisting Armenia in improving the utilization of energy resources. The key areas of ADB's operations in the energy sector have been selected on the basis of the government's priorities in the sector, are aligned with ADB's Strategy 2020 and Energy Policy 2009, and include (i) rehabilitation of large hydropower generating assets, (ii) rehabilitation of aging transmission and distribution assets, (iii) improvement of cross-border interconnection of power systems, (iv) development of renewable energy, and (v) policy and institutional development. The project is included in ADB's country operations business plan, 2014 2016.

The expected impact will be improved reliability and efficient power supply in Armenia.

Impact Improved reliability and efficient power supply in Armenia
Project Outcome
Description of Outcome Increased operating efficiency of domestic transmission network
Progress Toward Outcome The Project, amounting to $37 million, was approved by ADB on 31 July 2014 and signed on 5 September 2014. The Project became effective on 12 February 2015. Project supervision and management consultant (PSMC) to assist EPSO was recruited in May 2015, while that of HVEN is currently being recruited. The contract for HVEN-PSMC is expected to be awarded by November 2015. Bidding documents for the substation rehabilitation have been tendered with bid submission deadline on 20 October 2015. Draft bidding documents for the SCADA package have been submitted and reviewed by ADB in September 2015, and expected to be tendered in October 2015. As of 23 September 2015, total contract award is at $1.01 million while total disbursement is at $0.264 million.
Implementation Progress
Description of Project Outputs

Expansion of SCADA system and EMS fully implemented.

Rehabilitation of two 220 kV substations at Agarak 2 and Shinuhayr

Institutional development, capacity building, and project management successfully completed

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

Bidding documents have been reviewed by ADB, and expected to be tendered in October 2015.

Bidding is ongoing, with bid submission deadline on 20 October 2015.

Project supervision and management consultant (PSMC) for EPSO has been engaged and mobilized in May 2015. Selection of PSMC for HVEN is ongoing.

Geographical Location Yerevan
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The Initial Environmental Examination study revealed that only some low negative impacts occur (after having implemented the mitigation measures) mainly during the construction phase. During the operational phase, the positive impacts are obvious and consist in a much more reliable power supply in Armenia. The Initial Environmental Examination has been disclosed.
Involuntary Resettlement There is no Involuntary Resettlement.
Indigenous Peoples No Indigenous Peoples will be affected.
Stakeholder Communication, Participation, and Consultation
During Project Design Public consultation was carried out in conjunction with the preparation of the Initial Environmental Examination.
During Project Implementation There will be stakeholder consultation.
Business Opportunities
Consulting Services

EPSO and HVEN will each employ a project supervision and management consulting firm. The two firms will provide technical, financial, and administrative support to the PIUs during project implementation. Consultant recruitment will follow ADB's Guidelines on the Use of Consultants (2013, as amended from time to time) and the procurement plan developed for the project. Quality- and cost-based selection with a quality- cost ratio of 90:10 will be the default method for recruiting the consulting firms because of the complexity of the assignment and the application of modern technologies.

Contract negotiation with a project supervision and management consultant (PSMC) for EPSO is ongoing, and contract award is expected by April 2015. Recruitment for HVEN's PSMC is ongoing.

Procurement

Procurement of goods and works from ADB loan proceeds will be undertaken following ADBs Procurement Guidelines (2013, as amended from time to time) and a procurement plan developed for the project. The procurement will follow international competitive bidding procedures using standard bidding documents for plants (single-stage, single envelope).

Bidding documents for (i) SCADA system expansion, and (ii) substations rehabilitation are being finalized. Tendering of the bidding documents is expected by Q2 2015.

Responsible ADB Officer Tianhua Luo
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Ministry of Energy and Natural Resources
MINENERGY@MINENERGY.AM
Government Building 2, Republic Square,
375010 Yerevan, Republic of Armenia
Timetable
Concept Clearance 22 Oct 2012
Fact Finding 10 Feb 2014 to 21 Feb 2014
MRM 21 May 2014
Approval 31 Jul 2014
Last Review Mission -
Last PDS Update 24 Sep 2015

Loan 3150-ARM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
31 Jul 2014 05 Sep 2014 12 Feb 2015 30 Jun 2020 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 50.00 Cumulative Contract Awards
ADB 37.00 31 Jul 2014 2.10 0.00 6%
Counterpart 13.00 Cumulative Disbursements
Cofinancing 0.00 31 Jul 2014 0.53 0.00 2%

Safeguard Documents

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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

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Related Publications

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