Indonesia : Java-Bali Electricity Distribution Performance Improvement Project

Project Name

Java-Bali Electricity Distribution Performance Improvement Project

Project Number

40061-013

Country / Economy

• Indonesia

Project Status

Closed

Project Type / Modality of Assistance

• Grant
• Loan

Source of Funding / Amount

Grant 0198-INO: Java-Bali Electricity Distribution Performance Improvement Project

Source	Amount
Clean Energy Fund under the Clean Energy Financing Partnership Facility	US$ 1.00 million

Loan 2619-INO: Java-Bali Electricity Distribution Performance Improvement Project

Source	Amount
Ordinary capital resources	US$ 50.00 million

Loan 8245-INO: Java-Bali Electricity Distribution Performance Improvement Project

Source	Amount
Agence Francaise de Developpement	US$ 50.00 million

Strategic Agendas

• Environmentally sustainable growth
• Inclusive economic growth

Drivers of Change

• Gender Equity and Mainstreaming
• Governance and capacity development
• Partnerships

Sector / Subsector

• Energy / Electricity transmission and distribution

Gender

Some gender elements

Description

The key objectives of the project are to mainstream energy efficiency as a strategic planning option to reduce the overall cost of operating the distribution business for PLN and its customers; and deliver good quality (less voltage fluctuations and improved harmonics) and reliable (less frequent and shorter-duration interruptions) electricity.

The proposed energy efficiency project will deliver good quality, reliable power with lower losses by using existing distribution resources more efficiently. The proposed project will: (i) improve overall efficiency of electricity distribution in the Java Bali grid, and (ii) promote demand side management practices in the form of Retrofitting to LED by improving capacity within municipal governments, PLN and the private sector in select Indonesian cities to design, finance and implement municipal street lighting upgrade programs.

Project Rationale and Linkage to Country/Regional Strategy

Indonesia ranks among the top 20 polluters in the world. The country's CO2 emissions per capita have grown significantly since the 1980s, a large part of which is from the burning of oil. Emissions will get worse in the short term, as the Government plans to rapidly expand the use of coal for power generation to reduce its reliance on imported oil.

The Government's energy conservation and energy efficiency initiatives will offset part of these emissions, and these efforts need to be part of mainstream planning to have larger impact. PT Perusahaan Listrik Negara (State Electricity Corporation [PLN]), the state-owned power utility, has invested in energy efficiency projects for its power distribution, which has reduced overall distribution losses and CO2 emissions. To maintain the momentum, the PLN has an ambitious plan to invest about $1.2 billion in distribution between 2010 and 2014. A large part of this plan will be financed by internal resources, and loans from bilateral and multilateral partners.

The Asian Development Bank (ADB) will engage with the PLN in its overall energy efficiency improvement initiative, with the proposed small Project covering the entire Java?Bali network with cofinancing from the Agence Frangaise de Diveloppement (AFD). The proposed project components could be implemented within 2 years. If the proposed Project and the partnership in financing is successful, ADB will scale up this operation with a sector project (using a multitranche financing facility) and support part of the PLN's financing needs for the energy efficiency strategy.

The Project's objective is to reduce the peak load demand and system losses by implementing distribution network rehabilitation and an efficient lighting program that will also contribute towards greenhouse gas reduction. Carbon credits will be sought following the approved methodology of the Clean Development Mechanisms (CDM) executive board. This investment is in line with ADB's commitment to clean energy and energy efficiency across Asia.

About 200 megawatts (MW) equivalent in distribution system capacity will be freed and about 400 gigawatt-hours (GWh) will be saved annually through energy efficiency at a cost well below the cost of developing equivalent new capacity. This will reduce the emissions of Indonesia's power sector by about 330,000 tons (t) each year.

Impact

Reduced CO2 emissions by the Indonesian power sector

Project Outcome

Description of Outcome

Contribute to PLN's overall power distribution efficiency and power quality

Progress Toward Outcome

All civil work progress is completed. PLN will calculate the output achievement (and subsequently, the outcome) in the Government PCR.

Recruitment for ADB PCR consultant is ongoing, ADB PCR is planned for circulation in Q2-2017.

Implementation Progress

Description of Project Outputs

1. Reduced distribution losses in selected areas

2. Incremental sales

3. Increased access to power

4. Reduced peak demand and increased awareness of efficient lighting options in isolated grids and selected islands

5. Efficient project implementation

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

All civil work progress is completed. PLN will calculate the output achievement (and subsequently, the outcome) in the Government PCR.

Recruitment for ADB PCR consultant is ongoing, ADB PCR is planned for circulation in Q2-2017.

Geographical Location

Bali, Bandung, Banten, Banten, Banyuwangi, Bekasi, Bogor, Bojonegoro, Central Java, Daerah Khusus Ibukota Jakarta, Depok, East Java, Gambir, Gresik, Jatinegara, Jember, Karawang, Kecamatan Payangan, Kediri, Kramatjati, Madiun, Malang, Mojokerto, Pamekasan, Pasuruan, Pecatu, Ponorogo, Sidoarjo, Situbondo, Surabaya, Tangerang, Tanjung Priok, West Java, Yogyakarta

Safeguard Categories

Environment

C

Involuntary Resettlement

C

Indigenous Peoples

C

Summary of Environmental and Social Aspects

Environmental Aspects

ADB has discussed with PLN the types of distribution lines and devices that will be

installed, the types of waste that could be generated during the implementation of the project, and PLN's corporate management strategy for handling such waste materials. Most capacitors and transformers will be newly installed and some will be reinforced, new distribution lines will be installed, mostly pole-mounted transformers will be added, and no new substations will be built. Waste generated will be minimized and contain no hazardous materials. PLN also confirmed that no circuit breakers and capacitors will be decommissioned under the Project. Such activities do not require UKL/UPL (environmental management certificate) according to the Government's AMDAL or environmental impact assessment process law. The Project is assessed environment category C, and as such, according to ADB's Environment Policy (2002) and Operations Manual Section F1/OP (2006), an Environmental Impact Assessment (EIA) or Initial Environmental Examination (IEE) is not required.

Involuntary Resettlement

The Project will not involve any land acquisition and resettlement. All rehabilitation

activities will be undertaken on land already owned or leased by PLN or within premises of existing facilities. Idle land owned by the Government is often occupied by squatters, but PLN has confirmed that no such cases are involved in this project. PLN also confirmed that the project activities in central and east Java will not involve any involuntary resettlement.

ADB's Project Appraisal Mission visited both of these sites and confirmed this claim. On the basis that no resettlement impacts are envisaged, the resettlement impact of the Project will be category C and therefore no resettlement plan is required. If the Project changes and needs to be recategorized, a resettlement plan will be prepared at that time.

Indigenous Peoples

The Project will not have any negative impact on ethnic minority groups; overall the effects will be significantly positive because customers from all ethnic groups will benefit from the Project. Therefore, ADB's indigenous peoples policy will not be triggered.

Stakeholder Communication, Participation, and Consultation

During Project Design

During the feasibility study, focus group interviews were conducted with customers to identify the potential impact of the Project in terms of accesss to reliable electricity, and its impact on daily life, social services, and business.

During Project Implementation

As part of its own requirements, PLN will meet stakeholders in each of the five regions during implementation with support from implementation consultants. During the feasibility study, focus interviews were conducted with customers to identify the potential impact of the Project in terms of access to reliable electricity and its impact on daily life, social services, and business. ADB and AFD missions will meet stakeholders during project inception and review missions.

Business Opportunities

Consulting Services

All consulting services have been awarded and work is already completed.

Procurement

All packages have awarded and construction is already completed.

1) ICB for supply of 520 km of MV cable 240 mm2, 110 km of MV cable 300 mm2, 8 km of mV 150 mm2 twisted aerial cable

2) ICB for supply of 2,460 km of 150 mm2 AAAC, 2 120 km of 150 mm2 A3CS, 180 km of 240 mm2 A3C and 400 km of 70 m2 A3C conductors

3) NCB for supply of 1,550 km of LV 70 mm2 twisted cable

4) ICB for supply of 3-phase transformers: 160 50 kVA, 1,210 100 kVA, 295 160 kVA, 89 200 kVA, 57 250 kVA, 25 315 kVA, 164 400kVA, 77 630 kVA, 5,630 kVA compact type, 15 1,000 kVA; and 2,900 50 kVA 1-phase transformers

5) ICB for supply and construction of 25 km of 20 kV OHLines and 120 km of LV lines, laying of 180 km of Underground cables, installation of 262 MV/LV transformers

6) ICB for supply and laying of 121 km of Underground cables, construction of 105 km of 20 kV OHLines and 75 km of LV lines, installation of 192 MV/LV transformers, supply and installation of 450 LV panels, construction of 10 switching stations and installation of 73 MV cubicles.

7) NCB for supply and laying of 128 km of underground cables, construction of 86 km of 20 kV OHLines and 100 km of LV lines, installation of 219 MV/LV transformers, supply and installation of 465 LV panels, construction of 5 witching statiosn and instalation of 23 MV cubicles

8) NCB for supply and construction of 97 km of 20 kV OHLines and addition of two phases on 85 km of 1-phase lines installation of 2,888 MV/LV transformers. Supply and installation of 13 capacitor banks

9) ICB for supply and construction of 1,095 km of 20 kV OHLines and 970 km of LV lines installation of 1,055 MV/LV transformers

10) NCB for supply and laying of 4 km of Underground cables, construction of 180 km of 20 kV OHLines and 100 km of LV lines, installation of 296 MV/LV transformers

Contact

Responsible ADB Officer

Palupi, Ira

Responsible ADB Department

Southeast Asia Department

Responsible ADB Division

Indonesia Resident Mission (IRM)

Executing Agencies

P.T. Perusahaan Listrik Negara

Timetable

Concept Clearance

29 Apr 2009

Fact Finding

16 Mar 2009 to 31 Mar 2009

MRM

19 May 2009

Approval

22 Mar 2010

Last Review Mission

-

PDS Creation Date

16 Jul 2010

Last PDS Update

30 Sep 2016

Funding

Grant 0198-INO

Loan 2619-INO

Loan 8245-INO