Armenia: Power Transmission Rehabilitation Project

Sovereign Project | 46416-002

ADB is helping Armenia further overhaul its Soviet-era power network, including expanding its supervisory control and data acquisition (SCADA) system, and upgrading two 220 kilovolt substations at Agarak 2 and Shinuhayr. The project will reduce power losses, boost capacity, and improve the quality and reliability of power supplies to both urban and rural customers.

Project Details

  • Project Officer
    Karapetyan, Vardan
    Central and West Asia Department
    Request for information
  • Country/Economy
    Armenia
  • Modality
    • Loan
  • Sector
    • Energy
Project Name Power Transmission Rehabilitation Project
Project Number 46416-002
Country / Economy Armenia
Project Status Closed
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 3150-ARM: Power Transmission Rehabilitation Project
Asian Development Fund US$ 37.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Partnerships
Sector / Subsector

Energy / Electricity transmission and distribution - Energy efficiency and conservation

Gender Equity and Mainstreaming No gender elements
Description The project will upgrade the national power system operation's reliability and efficiency, and enhance transmission capacity. The project will include three main components: (i) expansion of supervisory control and data acquisition (SCADA) system; (ii) rehabilitation of four existing 220/110-kilovolt (kV) substation; and (iii) support for institutional development, capacity building, and project management. The project will help increase the electricity supply to urban and rural consumers to support inclusive and sustainable economic development.
Project Rationale and Linkage to Country/Regional Strategy

Armenia has no proven oil or natural gas reserves and imports most of its fossil fuel resources from Russia (through Georgia) and has begun importing gas from Iran. Imports account for about 77% of total primary energy supply_and natural gas imports from Russia account for 81% of total energy imports. Strengthening energy security and improving energy efficiency are the country's top priorities. Development of indigenous energy resources and rehabilitation of old and inefficient generation, transmission, and distribution infrastructure are critical to the country's energy security.

The core problem in Armenia's energy sector focuses on the low efficiency of energy resources utilization. This has been evidenced by very limited utilization of substantial renewable energy resources, low efficiency of thermal and hydro power plants, relatively large electricity transmission and generation losses, and incomplete realization of the electricity export potential.

Much of the sector's infrastructure was built during the Soviet-era and has deteriorated significantly because of the lack of sufficient funding for rehabilitation and maintenance. Roughly 70% of the installed equipment at power generation plants has been in operation for more than 30 years, and 50% for more than 40 years. The average age of power transmission assets including substations is 45 years and, distribution assets 32 years. Much of the existing transmission infrastructure has reached the end of its useful life and requires major rehabilitation or replacement to continue reliable operation. Nearly 90% of 220-kV overhead lines require rehabilitation, and about 42% of low-voltage substations are in deficient technical condition._ADB's Interim Operational Strategy for Armenia, which was approved in 2006, identified the energy sector as one of the priority sectors for ADB's intervention._ The Country Partnership Strategy for Armenia is currently under preparation, and is expected to be finalized in 2014. ADB will continue assisting Armenia in improving the utilization of energy resources. The key areas of ADB's operations in the energy sector have been selected on the basis of the government's priorities in the sector, are aligned with ADB's Strategy 2020 and Energy Policy 2009, and include (i) rehabilitation of large hydropower generating assets, (ii) rehabilitation of aging transmission and distribution assets, (iii) improvement of cross-border interconnection of power systems, (iv) development of renewable energy, and (v) policy and institutional development. The project is included in ADB's country operations business plan for 2014 to 2016.

The expected impact will be improved reliability and efficient power supply in Armenia.

Impact

Improved reliability and efficient power supply in Armenia

Project Outcome
Description of Outcome

Increased operating efficiency of domestic transmission network

Progress Toward Outcome

After 6.7 years from approval, SDR equivalence in USD has depreciated from $37 million to $33.672 million. All contracts anticipated under the project have been awarded. The cumulative contract awards and disbursement_as of 18 October 2021 are $23.574 million (70.0% of total project amount) and $24.444 million (72.6% of total project amount), respectively. The overall project physical progress is 90% against the elapsed project period of 89%. Although the project is facing implementation challenges, it is rated 'On on track_ as of 18 October 2021 also in terms of compliance with APFS/AEFS and financial covenants and compliance with the Environment, Resettlement and Indigenous people safeguards following ADB's rating criteria.

The Government's intention to complete the transmission rehabilitation component using state budget financing is likely to go beyond the Project allocated timeline. ADB needs to monitor the Project implementation also after the completion date to assess the likelihood of achievement of the outcome.

Implementation Progress
Description of Project Outputs

Expansion of SCADA system and EMS fully implemented.

Rehabilitation of two 220 kV substations at Agarak 2 and Shinuhayr

Institutional development, capacity building, and project management successfully completed

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

EPC SCADA/EMS contract awarded in Oct 2017. The installation of a new Backup Dispatch Center was added in the contract and completed in September 2020. Following the Government's request in Oct 2019 and IEE update in Feb 2020, ADB approved additional installation of OPGW in other substations. Completion of works for the scope added is expected in March 2022.EPC contract for substation rehabilitation was awarded in May 2016. Design was finalized and Contractors have started activities on site, including environmental and social safeguards compliance. Rehabilitation in both substations - namely, Agarak and Shinuhayr, is experiencing delays. Presently, 84% of contracted equipment for Shinuhayr SS have been delivered on site and 41% of the required engineering and civil works have been accomplished. At the Agarak SS, 94% of contracted equipment have been delivered on site and 78% of engineering and civil works have been completed. HVEN issued a unilateral contract termination in Dec 2019 followed by the decision of the Management Board of completing the rehabilitation of the substations undergoing a selection process based on local procurement law and using state budget financing. EPSO and HVEN staff are actively involved on procurement- and safeguards-related activities. SCADA/EMS contractor held trainings for EPSO in January, April, May, August, Sept, November 2018 in Yerevan, Georgia, Vienna and Spain. PSMC for EPSO is engaged to assist in project implementation. PMC Contract for HVEN was terminated in 2018 with no construction works in place since early 2019.

HVEN is intended to advertise a procurement for the completion of substation rehabilitation component in November 2021.

Geographical Location Nation-wide
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects The Initial Environmental Examination study revealed that only some low negative impacts occur (after having implemented the mitigation measures) mainly during the construction phase. The Initial Environmental Examination was initially disclosed in 2015 and updated in 2019 with the expansion of rehabilitation works for the SCADA/EMS component. Semi-annual environmental monitoring reports are regularly submitted and disclosed.
Involuntary Resettlement There is no Involuntary Resettlement.
Indigenous Peoples No Indigenous Peoples will be affected.
Stakeholder Communication, Participation, and Consultation
During Project Design Public consultation was carried out in conjunction with the preparation of the Initial Environmental Examination.
During Project Implementation Stakeholder consultation, together with donor partner coordination, is conducted to ensure efficiency and effectiveness in project implementation.
Business Opportunities
Consulting Services EPSO and HVEN each engages a project supervision and management consulting firm. The two firms are providing technical, financial, and administrative support to the PIUs during project implementation. Consultant recruitment followed ADB's Guidelines on the Use of Consultants (2013, as amended from time to time) and the procurement plan developed for the project. Quality- and cost-based selection with a quality-cost ratio of 90:10 was applied considering the complexity of the assignment and the application of modern technologies.
Procurement

Procurement of goods and works from ADB loan proceeds are undertaken following ADBs Procurement Guidelines (2013, as amended from time to time) and a procurement plan developed for the project. The procurement applied international competitive bidding procedures using standard bidding documents for plants (single-stage, single envelope).

Bidding process for substation rehabilitation has been concluded with contract awarded in May 2016 and for SCADA/EMS and Backup Dispatch Center was awarded in October 2017.

Responsible ADB Officer Karapetyan, Vardan
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Armenia Resident Mission
Executing Agencies
Ministry of Energy and Natural Resources of the Republic of Armenia
Timetable
Concept Clearance 22 Oct 2012
Fact Finding 10 Feb 2014 to 21 Feb 2014
MRM 21 May 2014
Approval 31 Jul 2014
Last Review Mission -
Last PDS Update 22 Nov 2021

Loan 3150-ARM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
31 Jul 2014 05 Sep 2014 12 Feb 2015 30 Jun 2020 30 Jun 2022 01 Aug 2022
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 50.00 Cumulative Contract Awards
ADB 37.00 01 Oct 2022 26.13 0.00 100%
Counterpart 13.00 Cumulative Disbursements
Cofinancing 0.00 01 Oct 2022 26.13 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory 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.

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.

Title Document Type Document Date
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Audited Project Financial Statements (January-December 2021) Audited Project Financial Statements Jun 2022
Power Transmission Rehabilitation Project: CJSC Electro Power System Operator Audited Project Financial Statements (January-December 2021) Audited Project Financial Statements Jun 2022
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Audited Project Financial Statements (January-December 2020) Audited Project Financial Statements Jun 2021
Power Transmission Rehabilitation Project: CJSC Electro Power System Operator Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jun 2020
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Audited Project Financial Statements (January-December 2019) Audited Project Financial Statements Jun 2020
Power Transmission Rehabilitation Project: CJSC Electro Power System Operator Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Dec 2019
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Audited Project Financial Statements (January-December 2018) Audited Project Financial Statements Jul 2019
Power Transmission Rehabilitation Project: CJSC Electro Power System Operator Audited Project Financial Statements (January-December 2017) Audited Project Financial Statements Jan 2019
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Audited Project Financial Statements (January-December 2017) Audited Project Financial Statements Jul 2018
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Audited Project Financial Statements (January-December 2016) Audited Project Financial Statements Jul 2017
Power Transmission Rehabilitation Project: CJSC Electro Power System Operator Audited Project Financial Statements (January-December 2016) Audited Project Financial Statements Jul 2017
Amendment to Loan Agreement (Special Operations) for Loan 3150-ARM: Power Transmission Rehabilitation Project Loan Agreement (Special Operations) Jan 2017
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Audited Project Financial Statements (12 February-31 December 2015) Audited Project Financial Statements Jul 2016
Power Transmission Rehabilitation Project: CJSC Electro Power System Operator (EPSO) Audited Project Financial Statements (6 February-31 December 2015) Audited Project Financial Statements Jul 2016
Էլեկտրաէնէրգիայի հաղորդման համակարգի վերակառուցման ծրագիր : Ծրագրի ամփոփ նկարագիր Translated PDS Sep 2014
Project Agreement for the Power Transmission Rehabilitation Project Project/Program Agreements Sep 2014
Loan Agreement (Special Operations) for the Power Transmission Rehabilitation Project Loan Agreement (Special Operations) Sep 2014
Power Transmission Rehabilitation Project: Procurement Plan Procurement Plans Jul 2014
Power Transmission Rehabilitation Project: Report and Recommendation of the President Reports and Recommendations of the President Jul 2014
Power Transmission Rehabilitation Project: Project Administration Manual Project/Program Administration Manual Jul 2014

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 Transmission Rehabilitation Project: High Voltage Electric Networks Environmental Monitoring Report (July-December 2021) Environmental Monitoring Reports Feb 2022
Power Transmission Rehabilitation Project: Electro Power Systems Operator Environmental Monitoring Report (July-December 2021) Environmental Monitoring Reports Jan 2022
Power Transmission Rehabilitation Project: High Voltage Electric Networks Environmental Monitoring Report (January-June 2021) Environmental Monitoring Reports Aug 2021
Power Transmission Rehabilitation Project: Environmental Monitoring Report (January-June 2021) Environmental Monitoring Reports Jul 2021
Power Transmission Rehabilitation Project: High Voltage Electric Networks Environmental Monitoring Report (July-December 2020) Environmental Monitoring Reports Jan 2021
Power Transmission Rehabilitation Project: Electro Power Systems Operator Environmental Monitoring Report (July-December 2020) Environmental Monitoring Reports Dec 2020
Power Transmission Rehabilitation Project: High Voltage Electric Networks Environmental Monitoring Report (January-June 2020) Environmental Monitoring Reports Oct 2020
Power Transmission Rehabilitation Project: Environmental Monitoring Report (January-June 2020) Environmental Monitoring Reports Jul 2020
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Environmental Monitoring Report (July-December 2019) Environmental Monitoring Reports Dec 2019
Power Transmission Rehabilitation Project: Electro Power System Operator Environmental Monitoring Report (July-December 2019) Environmental Monitoring Reports Dec 2019
Power Transmission Rehabilitation Project: Updated Initial Environmental Examination Initial Environmental Examination Dec 2019
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Environmental Monitoring Report (January-June 2019) Environmental Monitoring Reports Aug 2019
Power Transmission Rehabilitation Project: CJSC Electro Power Systems Operator Environmental Monitoring Report (January-June 2019) Environmental Monitoring Reports Jul 2019
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Environmental Monitoring Report (July-December 2018) Environmental Monitoring Reports Mar 2019
Power Transmission Rehabilitation Project: CJSC Electro Power Systems Operator Environmental Monitoring Report (July-December 2018) Environmental Monitoring Reports Jan 2019
Power Transmission Rehabilitation Project: CJSC Electro Power Systems Operator Environmental Monitoring Report (January-June 2018) Environmental Monitoring Reports Jul 2018
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Environmental Monitoring Report (January-June 2018) Environmental Monitoring Reports Jul 2018
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Biannual Environmental Monitoring Report (July-December 2017) Environmental Monitoring Reports Jan 2018
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Biannual Environmental Monitoring Report (January-June 2017) Environmental Monitoring Reports Jul 2017
Power Transmission Rehabilitation Project: High Voltage Electric Networks Environmental Monitoring Report (July-December 2016) Environmental Monitoring Reports Jan 2017
Power Transmission Rehabilitation Project: CJSC Electro Power Systems Operator Environmental Monitoring Report (January-June 2016) Environmental Monitoring Reports Jul 2016
Power Transmission Rehabilitation Project: CJSC High Voltage Electric Networks Biannual Environmental Monitoring Report (January-June 2016) Environmental Monitoring Reports Jul 2016
Power Transmission Rehabilitation Project - CJSC High Voltage Electric Networks: Environmental Monitoring Report (July-December 2015) Environmental Monitoring Reports Jan 2016
Power Transmission Rehabilitation Project: CJSC Electro Power Systems Operator Environmental Monitoring Report (July-December 2015) Environmental Monitoring Reports Jan 2016
Power Transmission Rehabilitation Project: Biannual Environmental Monitoring Report - CJSC Electro Power Systems Operator (January-June 2015) Environmental Monitoring Reports Jul 2015
Power Transmission Rehabilitation Project: Biannual Environmental Monitoring Report - CJSC High Voltage Electric Networks (January-June 2015) Environmental Monitoring Reports Jul 2015
Power Transmission Rehabilitation Project Initial Environmental Examination May 2014
Power Transmission Rehabilitation Project Initial Environmental Examination Mar 2014

Evaluation Documents See also: Independent Evaluation

None currently available.


Related Publications

None currently available.


The Access to Information Policy (AIP) 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.

Tenders

No tenders for this project were found.


Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
EPC CONTRACT FOR EXPANSION OF SCADA/EMS AND BACKUP DISPATCH CONTROL CENTER Loan 3150 31 Oct 2017 REDINET CJSC / SIEMENS AG OSTERREICH | 24/7-24/8 AZATUTYAN AVE. YEREVAN 0014 ARMENIA, REPUBLIC OF Ministry of Energy and Natural Resources 10,859,438.00 10,800,612.00

Procurement Plan