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 Type / Modality of Assistance||Loan
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||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.|
|Description of Outcome||improved efficiency and reliability of the power distribution networks.|
|Progress Toward Outcome|
|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)||
- Implementation of 23 turnkey contracts are ongoing. An additional 6 turnkey contracts were awarded and design stage are yet commence.
- To be assessed.
- To be assessed.
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|
|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|
13, A. Bakikhanov Street AZ1065 Baku, Azerbaijan
|MRM||11 Dec 2015|
|Approval||19 Jul 2016|
|Last Review Mission||-|
|Last PDS Update||28 Mar 2017|
|Approval||Signing Date||Effectivity Date||Closing|
|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||239.12||0.00||96%|
|Cofinancing||0.00||19 Jul 2016||71.10||0.00||28%|
|Status of Covenants|
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 Public Communications Policy (PCP) 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.
|Title||Document Type||Document Date|
|Loan Agreement for Loan 3407-AZE: Power Distribution Enhancement Investment Program - Tranche 1||Loan Agreement (Ordinary Resources)||Jul 2016|
|Guarantee Agreement for Loan 3407-AZE: Power Distribution Enhancement Investment Program - Tranche 1||Guarantee Agreements||Jul 2016|
|Power Distribution Enhancement Investment Program - Tranche 1: Procurement Plan||Procurement Plans||Apr 2016|
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.
|Title||Document Type||Document Date|
|Power Distribution Enhancement Investment Program - Tranche 1: Initial Environmental Examination||Initial Environmental Examination||Aug 2015|
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.