Afghanistan : MFF - Energy Sector Development Investment Program (Facility Concept)

Sovereign Project | 42094-012

The multi tranche financing facility (MFF1) was approved on 28 November 2008 with a total amount of $570 million. The MFF was initially scheduled for 10 years inclusive of procurement and construction activities. The MFF utilization period was extended from 28 November 2018 to 28 November 2020. The MFF was comprised of five trances. Tranches 1 and 2 were closed on 28 November 2018, tranches 3 and 4 were closed on 28 November 2020, and tranche 5 was closed on 28 May 2020. However, the winding-up period of tranches 3 and 4 was extended till 31 December 2023 to be financially closed. The overall outputs of MFF were achieved. The major output components of MFF were comprised of the first phase of the 500 kV Afghanistan-Turkmenistan transmission line, 220 kV NEPS transmission lines, 220/20 kV substations, and distribution networks in northern, southern, and central Afghanistan. MFF also financed the rehabilitation of Sheberghan Gas Fields and a hydropower plant in Helmand Province.

Flickr photos from the 42094-012: Energy Sector Development Investment Program in Afghanistan album.

Project Name MFF - Energy Sector Development Investment Program (Facility Concept)
Project Number 42094-012
Country / Economy Afghanistan
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0026-AFG: MFF - Energy Sector Development Investment Program (Facility Concept)
Asian Development Fund US$ 570.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Sector / Subsector

Health /

Gender Some gender elements
Description The multi tranche financing facility (MFF1) was approved on 28 November 2008 with a total amount of $570 million. The MFF was initially scheduled for 10 years inclusive of procurement and construction activities. The MFF utilization period was extended from 28 November 2018 to 28 November 2020. The MFF was comprised of five trances. Tranches 1 and 2 were closed on 28 November 2018, tranches 3 and 4 were closed on 28 November 2020, and tranche 5 was closed on 28 May 2020. However, the winding-up period of tranches 3 and 4 was extended till 31 December 2023 to be financially closed. The overall outputs of MFF were achieved. The major output components of MFF were comprised of the first phase of the 500 kV Afghanistan-Turkmenistan transmission line, 220 kV NEPS transmission lines, 220/20 kV substations, and distribution networks in northern, southern, and central Afghanistan. MFF also financed the rehabilitation of Sheberghan Gas Fields and a hydropower plant in Helmand Province. The MFF contributed to financing various feasibility studies, designs, infrastructure improvements and maintenance, human resource development, and institutional reforms. The executing agency (EA) for the power component of the Facility was DABS (the government owed electricity utility) and EA for the Gas Wells Rehabilitation component was the Ministry of Mines and Petroleum (MOMP). DABS was responsible for the overall implementation of the Investment Program as well as for all projects to be financed under the MFF except for the Sheberghan gas fields rehabilitation project for which MOMP was the EA.
Project Rationale and Linkage to Country/Regional Strategy

The Energy Sector Development Investment Program aims for improved energy security and sustainable power supply to stimulate economic development and would reduce the cost of doing business and cut poverty. It aims to provide sustainable cost-effective power supply in North-East Afghanistan (including Kabul) through (i) Improvements in the generation, transmission, and distribution systems, and (ii) Strengthened institutional capacity of power utility's (DABS) commercial, technical, and managerial functions (MIS, financial/revenue management, O&M capabilities, system planning, and project management).

The outputs include the following: (i) increase in customers in North-East Power System (NEPS) area through (a) Kunduz-Taloqan transmission line, (b) Kunduz and Baghlan distribution, (b) 500 kV transmission line from Andkhoy to Sheberghan and 220 kV transmission line from Sheberghan to Mazar, (c) replication of Chimtala Substation, and (d) Kabul South extension; (e) distribution network at Logar, Gardez, and Khost, (f) rehabilitated Sheberghan gas wells; (g) Gereshk Hydropower rehabilitated and transmission and distribution equipment supplied, (h) institutional support for DABS: (i) MIS, (ii) metering and billing, (iii) O&M of 220 kV NEPS, and (iv) project management; and (v) due diligence for future tranches and projects

Impact

Secure and stable energy supplies for Afghanistan

Project Outcome
Description of Outcome

Sustainable and reliable grid connected power supply in north, east and south Afghanistan

Progress Toward Outcome The availability period of the MFF1 was extended from 28 November 2018 until 28 November 2020 by ADB Board on 28 September 2018.
Implementation Progress
Description of Project Outputs

Generation capacity from hydro sources and gas wells increased

Transmission network upgraded in project areas through rehabilitation, augmentation and expansion of NEPS

Development of power distribution systems at load centers supplied from NEPS

Technical, managerial, financial and institutional functions of DABS achieves requisite autonomy and corporatization

Project Management:

Projects designed, implemented and monitored within cost, time and quality parameters

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

Achievable before the MFF completion date of 28 November 2020.

As of Dec 2019, around 866Km of transmission and distribution network increased under MFF1 Tranche 1 and Tranche 2.

The additional 3 MW of hydropower project expected completion date is 28 May 2020.

Achievable by completion of all projects by 28 November 2020.

On Track, achievable by completion of all projects by 28 November 2020.

Achievable after completion of project by 28 November 2020.

1. Sheberghan Gas Wells Rehabilitation: The subproject comprises rehabilitation of 8-12 gas wells in Sheberghan in northern Afghanistan. The 1st Phase of the gas wells rehabilitation was awarded to Turkish Petroleum in August 2012 and 6 wells were fully rehabilitated in October 2014. The optimal flow rate of 6 rehabilitated wells about 1.32 million cubic meters of gas/day for use by the industrial, commercial and residential customers. The project has been completed.

2. The second phase of gas wells rehabilitation (Rehabilitation, Re-Entry, Deeping, Testing and completion services service of two existing gas wells (No. 31 & 37) in the Yatimtaq Gas field of Sherberghan), the contract was awarded to M/S Xinjing Zhengtong Oil and Gas Co. Ltd in August 2016. The contractor mobilized at the construction site in February 2018. The contractor drilled the well No.31 and 37 up to the depth 1,600 meters (m) (targeted depth), meanwhile, the contractor explores different options to supply radioactive and explosive materials for logging and perforation of both wells. Wells No. 31 and 37 were completed in August 2018 and MoMP has issued the completion certificate on 21 August 2018. The optimal flow rate of 2 rehabilitated wells is 166,032 m3/day.

On Track, achievable by the completion of all projects by Q4 2020.

As of Dec 2019, out of 1.7 million customers, 98% are metered and more than 92% are recovered through the proper billing system.

Geographical Location
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The EAs are ensuring that (i) the projects are designed, constructed, and operated in accordance with national and local environmental procedures and guidelines and with the Environment Policy (ii) the projects are designed, constructed, and operated in accordance with the EMPs as reflected in the IEEs and EARF; (iii) the EMPs will be incorporated in bidding documents and civil work contracts and implemented; and (iv) environmental performance reports will be submitted to ADB twice annually during the construction period, including progress made on the mitigation measures, monitoring data, problems encountered, enforcement plan, and any violations.
Involuntary Resettlement The EAs will ensure that the design, implementation and operation of the Program are carried out in accordance with the IR Policy, applicable Government's law and regulations, and the agreed LARF. In the preparation and implementation of projects or subprojects under Tranche 1 and following tranches the EAs ensures that: (i) all land and rights of way required by the relevant projects or subprojects are made available in a timely manner; (ii) traditional (non-turnkey) construction contract awards are signed only at the condition that LARP approved by ADB is disclosed to the affected people (AP) and implemented; (iii) for all subprojects, independently from contract type, civil works initiation will be allowed only at the condition that ADB provides no objection and that the relevant LARPs are prepared, approved by ADB, disclosed to the APs and implemented; (iv) contractors' activities are in compliance with requirements of the LARPs; and (v) an independent monitor acceptable to ADB is engaged to carry out monitoring and evaluation and report to ADB based on the requirements of the LARPs.
Indigenous Peoples No impacts of any sort are envisaged for Indigenous Peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design Project funds are being used for studying the feasibility or preparing the designs of projects to be financed from the Facility. During design, stage an extensive process of dialogue will be conducted with local communities apprising them of the new investments and its potential benefits.
During Project Implementation The Investment Program is scheduled for 10 years inclusive of procurement and construction activities and is expected for by 28 November 2018. The physical implementation of Tranches 1 and 2 is expected were completed on 28 November 2018. The implementation of remaining 3 tranches are ongoing and expected to be completed on 28 May 2020.
Business Opportunities
Consulting Services Consulting services will be required for, among others, (i) preparation of subprojects, (ii) detailed design, and (iii) construction supervision and management. 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 through international competition using quality- and cost-based selection method. Individual consultants may be recruited for specific assignments in accordance with the ADB's procedure. It is envisioned that, because of the continuation of a number of tasks during implementation, single-source selection may be used for certain assignments with the prior approval of ADB.
Procurement Procurement to be financed under the Investment Program will be done in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). International competitive bidding (ICB) will be used for goods and works funded under the Investment Program. ICB will be used for supply contracts estimated to cost the equivalent of or more than $1 million. ICB will be used for works contracts estimated to cost the equivalent of or more than $5 million.
Responsible ADB Officer ADB Disclosure
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Afghanistan Resident Mission (AFRM)
Timetable
Concept Clearance 09 Jun 2008
Fact Finding 23 May 2008 to 06 Jun 2008
MRM 23 Jul 2008
Approval 28 Nov 2008
Last Review Mission -
PDS Creation Date 10 Jul 2008
Last PDS Update 30 Sep 2020

Grant 0026-AFG

Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 570.00 Cumulative Contract Awards
ADB 570.00 - 0.00 0.00 %
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.