Indonesia: West Kalimantan Power Grid Strengthening Project

Sovereign Project | 41074-013 Status: Active

Summary

ADB is helping Indonesia build a cross-border high-voltage transmission line and substation linking the West Kalimantan grid with that of Sarawak, Malaysia. The project will also construct a new distribution network to improve the reliability of power in West Kalimantan and supply more households with electricity.

Latest Project Documents

Consulting Notices See also: CMS

No notices are currently available for this project.

Procurement Notices See also: Operational Procurement

No notices are currently available for this project.

Procurement Documents


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Project Name West Kalimantan Power Grid Strengthening Project
Project Number 41074-013
Country Indonesia
Project Status Active
Project Type / Modality of Assistance Grant
Loan
Source of Funding / Amount
Grant 0354-INO: West Kalimantan Power Grid Strengthening Project
Clean Energy Fund under the Clean Energy Financing Partnership Facility US$ 2.00 million
Loan 3015-INO: West Kalimantan Power Grid Strengthening Project
Ordinary capital resources US$ 49.50 million
Loan 8272-INO: West Kalimantan Power Grid Strengthening Project
Agence Francaise de Developpement US$ 49.50 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Energy - Electricity transmission and distribution

Gender Equity and Mainstreaming Some gender elements
Description The proposed project is perfectly aligned with ADB's Energy Sector Assessment Strategy and Roadmap, which supports investment in strategic transmission assets that connects regions or countries across seas or international boundaries to optimize power networks by reducing the overall need for reserve capacity, improving system reliability, removing transmission bottlenecks, and transmitting cheaper power from one area to the other, addressing overall regional socio-economic and environmental improvement.
Project Rationale and Linkage to Country/Regional Strategy

In West Kalimantan, Sumatera and the other outer islands of Indonesia, most of the power generation is either oil or diesel based, and, as a result, cost of power generation is more than 25 cents/kWh. Large numbers of customers also do not have access to grid connected power supply in those areas, and the power grid will need strengthening to accommodate new customer connection. In addition to strengthened network, supply to new customers will need new generation capacity, especially low cost power generation to reduce the overall cost of power generation. The proposed project will address all these issues in West Kalimantan.

PLN, the state owned power utility in Indonesia, plans to reduce its cost of power generation in West Kalimantan by importing hydropower generated electricity from neighboring Sarawak, Malaysia by building about 83 km 275 kV transmission line from its Bengkayang substation to the border with Sarawak, Malaysia. On the other side of the border, in Sarawak, PLN's counterpart, SESCO, the state owned power utility in Sarawak will build about 42 km 275 kV transmission line from Mambong substation to the border with West Kalimantan. Together, these transmission lines in the two countries will form the first regional BIMP-EAGA flagship project and the first leg of the Trans Borneo Power Grid that aims to connect West Kalimantan across Sarawak, and Brunei, to Sabah (Malaysia) enabling power trading between the BIMP-EAGA countries.

PLN's investment in West Kalimantan is part of its nationwide plan to connect about 10 million new customers between 2011 and 2015 to support Government's commitment to 90% electrification by 2020 from about 62% in 2009. This national plan will need large investments and PLN will have to increase its operational income for it. Currently, PLN's income from its operation is insufficient to cover its cost of operation as the tariffs have been set low by the Government (average of 6.9 cents/kWh) for social reasons. As the cost of generation is much higher than the average tariff, PLN's operations are subsidized by the Government through a public service obligation (PSO) program that is approved by the Parliament each year. For 2011 PLN subsidy, the Government has allocated about $7.3 billion from the 2010 level of $6.46 billion ($82 million for West Kalimantan). PLN's cost reduction will reduce the need for larger subsidy by PLN.

The proposed strengthening of the 150 kV distribution network, and PLN's import of cheaper power will also avoid emissions of about 400,000 tons of CO2 that would have been generated by the old rental oil fired that PLN currently uses in West Kalimantan.

This is a priority project for strengthening distribution network in rural areas and for regional cooperation. It is consistent with ADB's country strategy and program for 2006-2009 and country operations business plan 2009-2011 that support the Government's economic growth target rate of 6.3%-6.8% per annum in 2010-2014 to reach at least 7% by 2014. They highlight the importance of removing infrastructure bottlenecks and promoting regional cooperation.

Impact Sustainable power supply in West Kalimantan

Project Outcome

Description of Outcome Cost of operating West Kalimantan power system reduced
Progress Toward Outcome

The loan and grant were declared effective as of 4 April 2014.

Construction for 275 kV transmission line and substation has been completed. First and second circuits were energized on 20 January 2016 and 5 April 2016. Construction of the 150 kV transmission line is in progress and 150kV substations is completed with pending minor civil works.

The contract for grant component is awarded and construction is ongoing.

Implementation Progress
Description of Project Outputs

Construction of Sarawak-West Kalimantan interconnection network

Construction of new transmission network in West Kalimantan (Bengkayang-Ngabang-Tayan)

New connections to households in West Kalimantan

Construction of new transmission network in West Kalimantan (Tayan-Sanggau-Sekadau)

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

- The 275kV TL transmission line to Malaysia is now fully constructed. First circuit was energized on 20 January 2016, and the second circuit is energized on 5 April 2016

- Construction of Bengkayang substation is completed, with pending minor civil works.

- Construction of Ngabang substation and extension of Tayan substation (Package 4)is completed, with pending minor civil works.

- The construction of 150kV transmission line and substations (Package 3) are experiencing delays due to prolonged land acquisition issues. Current target of completion is December 2017.

- The contract for grant component is awarded and construction is ongoing.

Geographical Location

Safeguard Categories

Environment B
Involuntary Resettlement B
Indigenous Peoples B

Summary of Environmental and Social Aspects

Environmental Aspects

This is classified as a Category B project for environment. The projects poses no significant environmental risks. The draft IEE prepared shows the proposed 275 kV transmission line: (i) passing through flat to hilly country, with scattered villages and associated small farms and gardens mainly along the roads including shifting cultivation and re-growth; (ii) does not pass through any protected areas, areas with rare or endangered species, or areas of high ecological diversity; (iii) requires 9.04ha land in West Kalimantan area for tower sites; and (iv) requires tall trees to be cleared on land of 30m width, from the centre line, in West Kalimantan

In the project area, the vegetation is already highly modified by human activity through shifting and permanent cultivation. The area involves no protected areas, no primary forest, no cultural heritage sites, 30% of land occupied by crops and grassland, 68% is high canopy vegetation such as plantations and forest, and only 2% other land use.

Involuntary Resettlement

- A Resettlement and Customary Communities Plan (RCCP) is being implemented for the 275kV section from Bengkayang to the Malaysian border and for the 150kV section from Benkayang through Ngabang to Tayan.

- Additional RCCP is being reviewed and endorsement is expected for the 150 kV section from Tayan-Sanggau and Sanggau-Sekadau.

Indigenous Peoples The ethnic minority plans are incorporated in the RCCPs.
Stakeholder Communication, Participation, and Consultation
During Project Design Stakeholders meetings were conducted in West Kalimantan; near the border area in Bengkayang and in other areas along the proposed route of the transmission line.
During Project Implementation

PLN and ADB confirmed that internal monitoring are conducted semi-annually, and external monitoring will be conducted twice (three months after compensation payment for 50% of towers, and once 30% of ROW compensation has been provided, for 275 kV TL and 150 kV TL each), according to the updated RCCDP for 275 kV and draft RCCP for 150 kV. All the monitoring reports will be submitted to ADB for web posting, and internal monitoring report will be made available to the affected people as well. PLN will submit the first internal monitoring report in June 2014 both for 275 kV TL and 150 kV TL.

During construction, PLN is required to submit the progress of EMP implementation and monitoring twice a year which will be uploaded to the ADB website.

Business Opportunities

Consulting Services The PIC is already contracted and mobilized: a Joint Venture of Tractebel Engineering GDF Suez (TE) (Thailand) and Powergrid International Limited (Thailand) in subconsultancy with PT Caturbina Guna Persada (Indonesia).
Procurement

Four ICB packages have been bidded out in August 2012 and were awarded in 2013:

Package 1: Design, Supply, Installation, Testing and Commissioning of 275kV Overhead Transmission Lines Bengkayang Substation - Jagoibabang

Package 2: Design, Supply, Installation, Testing and Commissioning of 275/150kV Bengkayang Substation

Package 3: Design, Supply, Installation, Testing and Commissioning of 150kV Transmission Lines Bengkayang - Ngabang - Tayan

Package 4: Design, Supply, Installation, Testing and Commissioning of 150/20kV Substation at Ngabang and Tayan;

Grant component: Connection to Households in West Kalimantan through Extension of MV and LV Network

Responsible Staff

Responsible ADB Officer Palupi, Ira
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Indonesia Resident Mission
Executing Agencies
P.T. Perusahaan Listrik Negara
Kepala Dinas Rencana Pendanaan
Gd.Timah Lt.III,Jl. Gatot Subroto Kav.18
Jakarta Selatan, Indonesia

Timetable

Concept Clearance 28 Aug 2010
Fact Finding 14 Feb 2011 to 17 Feb 2011
MRM 09 Aug 2011
Approval 27 Aug 2013
Last Review Mission -
Last PDS Update 30 Sep 2016

Grant 0354-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Aug 2013 20 Oct 2013 04 Apr 2014 31 Jul 2016 31 Jul 2017 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 2.00 Cumulative Contract Awards
ADB 0.00 27 Aug 2013 0.00 1.66 83%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 2.00 27 Aug 2013 0.00 1.66 83%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - -

Loan 3015-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Aug 2013 17 Oct 2013 04 Apr 2014 31 Jul 2016 30 Jun 2018 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 78.50 Cumulative Contract Awards
ADB 49.50 27 Aug 2013 32.88 0.00 66%
Counterpart 29.00 Cumulative Disbursements
Cofinancing 0.00 27 Aug 2013 27.68 0.00 56%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - Satisfactory - - - -

Loan 8272-INO

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
16 Nov 2011 08 Feb 2013 08 Feb 2013 31 Jul 2016 30 Jun 2018 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 49.50 Cumulative Contract Awards
ADB 0.00 16 Nov 2011 0.00 31.98 65%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 49.50 16 Nov 2011 0.00 0.00 0%

Safeguard Documents See also: Safeguards

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.

Title Document Type Document Date
West Kalimantan Power Grid Strengthening Project: Tayan-Sanggau-Sekadau Resettlement and Customary Communities Plan Combined Resettlement Plan and Indigenous Peoples Plans Aug 2016
West Kalimantan Power Grid Strengthening Project: 150 kV Tayan-Sanggau-Sekadau Transmission Line Initial Environmental Examination Initial Environmental Examination Jul 2016
West Kalimantan Power Grid Strengthening Project: Quarterly Environmental Monitoring Report (January-March 2016) Environmental Monitoring Reports Mar 2016
West Kalimantan Power Grid Strengthening Project: Quarterly Social Monitoring Report (January-March 2016) Social Monitoring Reports Mar 2016
West Kalimantan Power Grid Strengthening Project: Resettlement and Customary Communities Plan Implementation (July-September 2015) Social Monitoring Reports Oct 2015
West Kalimantan Power Grid Strengthening Project: Social Monitoring Report (July 2014) Social Monitoring Reports Jul 2014
West Kalimantan Power Grid Strengthening Project: Environmental Monitoring Report (January-June 2014) Environmental Monitoring Reports Jul 2014
West Kalimantan Power Grid Strengthening Project: Updated Resettlement and Customary Communities Plan Combined Resettlement Plan and Indigenous Peoples Plans Mar 2014
West Kalimantan 275 KV Transmission Line Project: Updated Resettlement Customary Communities Development Plan Combined Resettlement Plan and Indigenous Peoples Plans Aug 2013
Strengthening West Kalimantan Power Grid: Initial Environmental Examination Initial Environmental Examination Aug 2011
Strengthening West Kalimantan Power Grid: West Kalimantan 275 KV Transmission Line project (Draft) Combined Resettlement Plan and Indigenous Peoples Plans Jul 2011
Strengthening West Kalimantan Power Grid: West Kalimantan 150 KV Transmission Line project (Draft) Combined Resettlement Plan and Indigenous Peoples Plans Jul 2011

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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