42401-015: Power Distribution Enhancement Investment Program - Tranche 1 | Asian Development Bank

Azerbaijan: Power Distribution Enhancement Investment Program - Tranche 1

Sovereign (Public) Project | 42401-015 Status: Active

The Asian Development Bank is working with Azerbaijan to upgrade power distribution networks that will benefit over 1.4 million consumers and give the wider economy a lift by providing more reliable electricity supplies. The project is helping address the bottleneck in electricity supply and provide round-the-clock and reliable electricity to households in secondary cities and rural areas.

Project Name Power Distribution Enhancement Investment Program - Tranche 1
Project Number 42401-015
Country Azerbaijan
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3407-AZE: Power Distribution Enhancement Investment Program - Tranche 1
Ordinary capital resources US$ 250.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Sector / Subsector

Energy / Electricity transmission and distribution - Energy efficiency and conservation

Gender Equity and Mainstreaming Some gender elements
Description The Power Distribution Enhancement Investment Program (the investment program) aims to support the government's efforts in providing reliable and efficient power supply to meet its growing energy needs for inclusive development, especially in secondary cities and rural areas. Through rehabilitation and augmentation of the power distribution network throughout the country, the investment program will improve power supply reliability and efficiency, and support the improvement of operational and financial performance of the state-owned power distribution company, Azerishiq Open Joint-Stock Company (OJSC).
Project Rationale and Linkage to Country/Regional Strategy A multitranche financing facility (MFF) is proposed for the Investment Program, which will allow ADB to establish a stronger long-term partnership with the government meeting its development goals, support energy sector reform, improve energy policies, and strengthen governance and capacities. The Investment Program has the following key benefits: (i) support to the government in achieving its strategic development targets, (ii) introduction of modern technology and improvements in energy efficiency, (iii) support to Azerishiq OJSC to improve corporate governance and transparency, (iv) knowledge and skills transfer via the training of power utility staff to international standards in the implementation of the latest technology, and (v) improving electricity supply service quality and enhancing productivity of small- and medium-sized enterprises. The investment program will benefit 1.45 million customers, of which 60% are residential customers.
Impact increased availability of reliable electricity supply to all domestic consumers.
Project Outcome
Description of Outcome improved efficiency and reliability of the power distribution networks.
Progress Toward Outcome

To be assessed.

A total of 37 turnkey contracts including meter installation were awarded. Of the 37, 1 has been completed and operational. The rest of the contracts are progressing according to schedule.

Implementation Progress
Description of Project Outputs

Distribution network including distribution lines and substations rehabilitated, augmented, and functional

Customer services lines rehabilitated and smart meters installed and operational

Institutional capacity improved and corporate reform achieved

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

- To be assessed. Implementation of the remaining 37 turnkey contracts are ongoing.

- To be assessed.

- To be assessed.

Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects No major environmental safeguards issues envisaged. Initial environmental examination (IEE) reports including an environmental management plan have been prepared.
Involuntary Resettlement Minimal land acquisition and resettlement (LAR) or livelihood impacts may be expected for rehabilitation works requiring the construction of distribution lines and substations. A LAR framework and a due diligence report have been prepared.
Indigenous Peoples No indigenous peoples will be affected.
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations will be undertaken with affected people with respect to involuntary land acquisition and resettlement and IEE findings will be made available to the interested parties. In addition, consultation will be undertaken with relevant stakeholders.
During Project Implementation field investigations, surveys, and stakeholder consultations
Business Opportunities
Consulting Services supervision consulting firm will be recruited using the quality- and cost-based selection (QCBS) method, in accordance with ADB's Guidelines on the Use of Consultants (2010, as amended from time to time) to assist the EA to implement the project.
Procurement To ensure the project administration efficiency, governance, and integrity, the Project will be implemented through a plant design, supply, and install (turnkey) contracting approach. International consulting firms were engaged to facilitate the project preparation and implementation. The project feasibility studies and preliminary technical design were already completed. The bidding documents are under preparation and expected to be completed by the first quarter 2012. The indicative procurement methods for the main work will be international competitive bidding, in accordance with ADB's Procurement Guidelines (2010, as amended from time to time).
Responsible ADB Officer Tareen, Adnan
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Azerishiq OJSC
[email protected]
13, A. Bakikhanov Street AZ1065 Baku, Azerbaijan
Concept Clearance -
Fact Finding -
MRM 11 Dec 2015
Approval 19 Jul 2016
Last Review Mission -
Last PDS Update 27 Sep 2017

Loan 3407-AZE

Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Jul 2016 22 Jul 2016 02 Sep 2016 30 Jun 2019 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 325.00 Cumulative Contract Awards
ADB 250.00 19 Jul 2016 239.18 0.00 96%
Counterpart 75.00 Cumulative Disbursements
Cofinancing 0.00 19 Jul 2016 169.41 0.00 68%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

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.

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