Azerbaijan : Power Distribution Enhancement Investment Program - Tranche 1

Project Name

Power Distribution Enhancement Investment Program - Tranche 1

Project Number

42401-015

Country / Economy

• Azerbaijan

Project Status

Closed

Project Type / Modality of Assistance

• Loan

Source of Funding / Amount

Loan 3407-AZE: Power Distribution Enhancement Investment Program - Tranche 1

Source	Amount
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

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

All works on distribution lines, installation of CTS and meters are completed.

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)

Rehabilitation of distribution network, distribution lines & substations completed.

Rehabilitation of customer services lines & installation of smart meters completed.

Various trainings are ongoing for the capacity building of EA.

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).

Contact

Responsible ADB Officer

Tareen, Adnan

Responsible ADB Department

Central and West Asia Department

Responsible ADB Division

Energy Division, CWRD

Executing Agencies

Azerishiq OJSC

Timetable

Concept Clearance

-

Fact Finding

-

MRM

11 Dec 2015

Approval

19 Jul 2016

Last Review Mission

-

Last PDS Update

27 Sep 2018

Funding

Loan 3407-AZE