Bangladesh: Power System Expansion and Efficiency Improvement Investment Program - Tranche 1

Sovereign Project | 42378-015 Status: Active

Summary

ADB is helping Bangladesh boost its power supply to reduce the outages and shortages that are crippling the economy. The first tranche of the program will add 235 megawatts to the system by converting four single cycle, gas-fired power plants into more efficient combined cycle plants at Khulna, Baghabari, Sylhet, and Shahjibazar. It will also build transmission lines and substations.

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Project Name Power System Expansion and Efficiency Improvement Investment Program - Tranche 1
Project Number 42378-015
Country Bangladesh
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Grant 0320-BAN: Power System Expansion & Efficiency Improvement Investment Program - Tranche 1
European Investment Bank US$ 7.00 million
Loan 2966-BAN: Power System Expansion & Efficiency Improvement Investment Program - Tranche 1
Ordinary capital resources US$ 185.00 million
Loan: Power System Expansion & Efficiency Improvement Investment Program - Tranche 1
European Investment Bank US$ 91.00 million
Islamic Development Bank US$ 85.00 million
Loan: Power System Expansion and Efficiency Improvement Investment Program - Tranche 1
European Investment Bank US$ 21.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Partnerships
Sector / Subsector

Energy - Electricity transmission and distribution - Energy efficiency and conservation

Gender Equity and Mainstreaming No gender elements
Description

The proposed investment program includes three tranches encompassing generation expansion and associated transmission and distribution improvements. Tranche 1 mainly focuses on generation expansion. Tranche 2 focuses on transmission and distribution improvement together with a pilot solar irrigation component. Tranche 3 also invests on generation expansion. Generation expansion in the MFF will be undertaken through supply side energy efficiency improvement so that about 50% power can be generated without burning additional gas. Given the acute gas shortages in Bangladesh, conversion of single cycle gas fired power plants to combined cycle plants the technology adopted in the investment program is the best way to expand the generation capacity. The sequencing of the tranches is well aligned with the sector needs and the government program.

The Tranche 1 of the proposed Power System Expansion and Efficiency Improvement Investment Program will address two key areas in the power sector aligning with the priorities identified in the CPS: improving energy use efficiency of thermal power plants; and improving the transmission network capacity. The project interventions will include: (i) adding 235 MW capacity by conversion of four single cycle gas fired power plants to combine cycle plants at Khulna, Baghabari, Sylhet and Shahjibazar; (ii) construction of 180 km 132 kV transmission lines and four 133/32 kV substations; and (iii) capacity building. The capacity building component includes training on investment planning, operations planning, energy auditing and monitoring, financial management and auditing, project preparation and appraisal, and operation and maintenance of solar irrigation pumps. In addition, the capacity building component will provide consultants for preparation of subsequent tranches and implementation support.

Project Rationale and Linkage to Country/Regional Strategy About 50% of the population has access to power and those who have access also faces severe power shortages; about 1875 MW (28% of demand) has not been met during the peak periods in 2011. The available power generating capacity in Bangladesh, by June 2011, was of 4890 MW, against the estimated unconstrained demand of 6765 MW, leaving a significant demand-supply gap. The government envisages investing $9.5 billion for generation expansion during the five year planning period and matching investment of about $3 billion on transmission and distribution improvements together with a sound financing plan. Investments envisaged in the sixth five year plan are expected to increase electrification rate to 68% by 2015, eliminate the supply demand gap and resolve reliability and supply quality issues. The proposed MFF aims to support this government investment program by providing $1600 million worth investments mobilizing nearly 50% of the external financing through co- financing arrangements.
Impact Increased access to clean and reliable electricity supply in Bangladesh

Project Outcome

Description of Outcome Improved efficiency in electricity generation, and transmission in Bangladesh
Progress Toward Outcome Improved the generation capacity of Khulna Power Plant from 150 MW to 225 MW.
Implementation Progress
Description of Project Outputs

1. Increased generation capacity

2. Increased transmission capacity

3. Enhanced capacity of power sector agencies

4. Project management system in place

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

1. Increased power generation capacity from 150MW to 225MW. Commissioning completed and commercial operation was started on 28 June 2016.

2. Progress of substation work is on track and within the completion schedule. The progress of transmission line component is moderate due to changing the route alignment of Section-A. EA, consultant and contractor have been advised to expedite the progress and to complete the work within the schedule.

3. Not yet completed

4. Completed.

Geographical Location

Safeguard Categories

Environment B
Involuntary Resettlement B
Indigenous Peoples C

Summary of Environmental and Social Aspects

Environmental Aspects No issue has been reported
Involuntary Resettlement No issue has been reported
Indigenous Peoples No issue has been reported
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation

Responsible Staff

Responsible ADB Officer Sherine Taher Ibrahim
Responsible ADB Department South Asia Department
Responsible ADB Division Bangladesh Resident Mission
Executing Agencies
Power Grid Company of Bangladesh, Ltd. (PGCB)
[email protected];_WEBSITE:WWW.PGCB.ORG
IEB Bhaban (4th Floor)
Ramna,Dhaka, Bangladesh
North-West Power Generation Co. Ltd.(NWPGCL)
Bidyut Bhaban, 1 Abdul Gani Road
Dhaka-1000, Bangladesh
Power Div-Min of Power, Energy & Mineral Resources
Bangladesh Secretariat
Dhaka
Bangladesh

Timetable

Concept Clearance -
Fact Finding -
MRM -
Approval 12 Dec 2012
Last Review Mission -
Last PDS Update 27 Sep 2016

Grant 0320-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Nov 2012 - - 31 Dec 2018 - -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 7.00 Cumulative Contract Awards
ADB 0.00 28 Nov 2012 0.00 0.00 0%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 7.00 28 Nov 2012 0.00 0.00 0%

Loan 2966-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Dec 2012 03 Apr 2013 25 Jun 2013 31 Dec 2018 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 393.00 Cumulative Contract Awards
ADB 185.00 12 Dec 2012 177.34 0.00 96%
Counterpart 32.00 Cumulative Disbursements
Cofinancing 176.00 12 Dec 2012 125.58 0.00 68%

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.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

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