Nepal: Project Preparatory Facility for Energy

Sovereign Project | 47036-001

Summary

The Project Preparatory Facility for Energy (the Facility) is intended to prepare a series of hydropower projects and related transmission infrastructure for development in Nepal, emphasizing private sector participation and regional integration. The first component of Facility will support for project preparatory activities of selected candidate hydropower projects and a Second Nepal - India 400 kilo-volt (kV) cross border transmission line project, and produce a set of bankable documents. The study includes feasibility study and environmental / social impact assessments (EIA/SIA) etc. The hydropower projects for such study will be selected from various candidate projects being considered for development through private or public / public-private sectors. The Facility will also support project implementation consultants and panel of experts.

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Project Name Project Preparatory Facility for Energy
Project Number 47036-001
Country Nepal
Project Status Approved
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0361-NEP: Project Preparatory Facility for Energy
Asian Development Fund US$ 21.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Private sector development
Sector / Subsector

Energy - Electricity transmission and distribution - Large hydropower generation

Gender Equity and Mainstreaming No gender elements
Description The Project Preparatory Facility for Energy (the Facility) is intended to prepare a series of hydropower projects and related transmission infrastructure for development in Nepal, emphasizing private sector participation and regional integration. The first component of Facility will support for project preparatory activities of selected candidate hydropower projects and a Second Nepal - India 400 kilo-volt (kV) cross border transmission line project, and produce a set of bankable documents. The study includes feasibility study and environmental / social impact assessments (EIA/SIA) etc. The hydropower projects for such study will be selected from various candidate projects being considered for development through private or public / public-private sectors. The Facility will also support project implementation consultants and panel of experts. The second component of Facility will support another set of project preparatory activities for an export oriented hydropower project to be developed under the public private partnership (PPP). The activities include Transaction Advisory Services (TAS), detailed design and project procurement processes.
Project Rationale and Linkage to Country/Regional Strategy The current inadequacy and unreliability of the power supply result from a low level of investments in the past. Ongoing weakness in strategic, operational, managerial, and financial policies aggravated the problem. An uneconomic tariff regime dents the financial standing of the Nepal Electricity Authority (NEA), the power sector's only utility, leaving it unable to cover its new capital investments as well as the current operation and maintenance costs. The government lacks the financial means and institutional capacity to resolve the energy crisis alone, and if the private sector is to play a bigger role, it needs more and better entry points for investment. In addition to building greater generation capacity, Nepal must also upgrade and expand its limited transmission and distribution networks. A major obstacle to exploiting Nepal's hydropower export potential is the shortage of adequate infrastructure to transmit electricity to neighboring India. Instead of exporting power, in fact, Nepal imports it from India, despite the fact that its neighbor is also facing acute power shortages. Developing Nepal's hydropower generation, transmission, and export infrastructure would benefit both countries. In 2012, India had a peak power deficit of 17,517 MW, or 12.9% of the total national demand. Northern India, which is the most practical destination for Nepal's potential power exports, already experiences a power deficit of 11.9% (4,860 MW) of regional demand, and this gap is growing.
Impact Infrastructure for hydropower developed
Project Outcome
Description of Outcome High-quality due diligence provided to support investments to transform the power sector
Progress Toward Outcome Ongoing.
Implementation Progress
Description of Project Outputs

Feasibility and detailed engineering studies carried out

PPP project development services provided

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

--Ongoing

--Ongoing

--Ongoing in coordination with OPPP

Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects NA
Involuntary Resettlement NA
Indigenous Peoples NA
Stakeholder Communication, Participation, and Consultation
During Project Design

Summarize the participatory approaches and the proposed project activities that strengthen inclusiveness and empowerment of the poor and vulnerable in project implementation.

A series of consultations was conducted with relevant officers of the executing agency, persons who may potentially be impacted by projects related to the facility, and the general public who live in and around the proposed project sites. Community members and women's groups were consulted. Information on the preliminary facility and its anticipated benefits was shared in these consultations. Consultations also focused on eliciting the concerns, fears, and expectations of people to be affected by facility-related projects and subprojects, as well as the wider general public. Their suggestions and proposals for effective implementation were also sought. Opportunities for community participation in project planning and implementation were discussed and identified.

During Project Implementation Through email and ADB review mission.
Business Opportunities
Consulting Services

Component A will require inputs of five consulting service packages, including one for PIC and one for POE. To fast track Facility implementation, the Government has asked ADB to assist PMU in selection and recruitment of PICs, which in turn, will assist the PMU to procure all other required consulting services for Component A. ADB will assist in the consultant selection process except for negotiation and contract signing. The PIC will support the recruitment, implementation and reporting process. Consulting services requirements for Component B cannot be assessed until the Government has selected a proposed Project for PPP development in consultation with ADB . The PPP project development services will support due diligence (technical, financial and legal) and advisory services for preparation of a flagship export oriented PPP hydropower project up to signing of a Concession Agreement. All procurement activities will be carried out in accordance with ADB Procurement Guidelines (2013, as amended from time to time), and consultants will be recruited using quality and cost-based selection on 90:10 ratio, in line with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).

The Facility will be used over a five year period (2013 2018). The Government will ensure adequate budgetary allocation of counterpart funds for timely completion.

Procurement Advance actions will be undertaken for the recruitment of (i) the project implementation support consultants. This will entail the preparation of requests for proposals and the evaluation of proposals up to the stage of contract negotiation. The government has agreed that these activities will be undertaken by ADB to expedite their completion. ADB will only select the consultant, and the EA retains the responsibility for negotiating and signing the contract with the consultant, issuing the notice to proceed, and supervising the consultant's services.
Responsible ADB Officer Priyantha D.C. Wijayatunga
Responsible ADB Department South Asia Department
Responsible ADB Division Energy Division, SARD
Executing Agencies
Ministry of EnergyP.O. Box 2768, G.P.O. Kathmandu
Nepal
Timetable
Concept Clearance 12 Jul 2013
Fact Finding 05 Jul 2013 to 21 Jul 2013
MRM 26 Jul 2013
Approval 24 Sep 2013
Last Review Mission -
Last PDS Update 25 Mar 2015

Grant 0361-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
24 Sep 2013 29 Nov 2013 14 Mar 2014 30 Jun 2019 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 26.25 Cumulative Contract Awards
ADB 21.00 24 Sep 2013 0.00 0.00 0%
Counterpart 5.25 Cumulative Disbursements
Cofinancing 0.00 24 Sep 2013 0.00 0.00 0%
Title Document Type Document Date
Project Preparatory Facility for Energy: Project Data Sheet (Nepali Translation) Translated PDS Apr 2014
Project Agreement for Project Preparatory Facility for Energy Project/Program Agreement Dec 2013
Grant Agreement (Special Operations) for Project Preparatory Facility for Energy Grant Agreement Nov 2013
Project Preparatory Facility for Energy Reports and Recommendations of the President Sep 2013
Project Preparatory Facility for Energy Gender Action Plans Aug 2013
Project Preparatory Facility for Energy Project/Program Administration Manual Aug 2013
Project Preparatory Facility for Energy Initial Poverty and Social Analysis Jul 2013
Project Preparatory Facility for Energy: Procurement Plan Procurement Plans Jun 2013

Safeguard Documents

See also: Safeguards
Title Document Type Document Date
Project Preparatory Facility for Energy Indigenous Peoples Planning Frameworks/Indigenous Peoples Development Frameworks Jul 2013
Project Preparatory Facility for Energy Resettlement Frameworks Jul 2013
Project Preparatory Facility for Energy Environmental Assessment and Review Framework Jul 2013

Evaluation Documents

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No documents found.


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