India : MFF - Himachal Pradesh Clean Energy Development Investment Program (Tranche 1)

Energy / Large hydropower generation

The main objective is to help fulfill local demand, as Himachal Pradesh experiences energy shortages, especially in the winter months of December to February when river flows are at their lowest, with some peak shortages experienced throughout the year. Surplus power, particularly due to strong river flows from the spring snow melt, will be exported to the northern grid, thus serving as an important source of revenue for the state. However, the program will benefit all Northern Grid-connected electricity consumers via the export of excess power and by eliminating the need to import power from the Northern Grid, thus assisting the Government in its efforts to increase its overall generating capacity and achieve universal electrification under the 11th Five Year Plan. The second main objective is to provide capacity development assistance in order to develop the state hydropower generating company, Himachal Pradesh Power Corporation Ltd., into an efficient, corporatized generation company.

The scope of this tranche includes construction of the Sawra Kuddu (111 MW) hydroelectric project and the civil works for the Kashang Hydroelectric project.

A sustainable state electricity sector and improved state finances.

Increased hydropower production, as well as improved planning, implementation, management and sector governance.

Capacity development component: (i) Project-oriented: Implemented capacity development of various departments of HPPCL, focusing on (a) project preparation, implementation and management (including procurement, disbursements, safeguards compliance, and reporting); (b) financial management and accountability; and (c) knowledge transfer for compliance with ADB policies and procedures (ii) Corporate development: (a) Implemented capacity development to improve governance, fiduciary oversight, and organizational structuring; and (b) Developing in-house expertise within HPPCL on private sector participation modalities and CDM procedures. (iii) Implement enterprise resource planning solution at HPSEB.

Tranche 1 funds electro-mechanical contracts and some civil works of the 111 MW Sawra Kuddu Project and Stage 1 of the Kashang Project (65 MW).

100% work Completed under ADB funded components. Tranche 1 closed on 30 June 2017.

111 KV Sawra Kuddu project completed and Stage-1 of 65 MW Kashang project completed.

User Acceptance Test (UAT) of ERP System have been completed.

ERP - "GO LIVE" Completed.

Trainings in Project Management have been imparted.

ADB's Policy on Indigenous Peoples (1998) applies. Based on the initial social assessment of the Tranche 1 sub projects, it is noted that tribal people living in the vicinity of the subproject areas are generally mainstreamed. Therefore, no specific indigenous peoples plan is prepared.

Consulting services are required to provide support to HPPCL for project implementation work, including design, supervision of construction, management for the subprojects under the tranche 1 loan, and for feasibility studies of future loans. Consulting services will be provided for evaluation, monitoring, and reporting purposes. In addition, consultants will support the capacity building component under the tranche 1 loan. Consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time). Consulting firms will be selected using the quality- and cost-based selection method and simplified technical proposal. Individual experts may also be recruited based on biodata submitted in response to

specific terms of reference for assignments.