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 Name||Power Transmission Rehabilitation Project|
|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||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|
|Description of Outcome||Increased operating efficiency of domestic transmission network|
|Progress Toward Outcome||The Project, amounting to $37 million, was approved by ADB on 31 July 2014 and signed on 5 September 2014. The Project became effective on 12 February 2015. Project supervision and management consultant (PSMC) for EPSO and HVEN are engaged to assist in project implementation. EPC contract for the substation rehabilitation is ongoing with contract awarded in May 2016 while procurement of EPC contract for SCADA/EMS installation is ongoing with contract award expected by Q1 2017. As of 27 March 2017, total contract award is at $16.906 million (or 52% of total project amount) while total disbursement is at $3.75 million (or 11% of total project amount).|
|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 contract for substation rehabilitation was awarded in May 2016. Design is being finalized for HVEN clearance. Contractors are expected to commence activities on site, including environmental and social safeguards compliance.
EPSO and HVEN staff are actively involved on procurement- and safeguards-related activities.
Capacity development plan is yet to be prepared.
PSMC for EPSO and HVEN are engaged to assist in project implementation.
SCADA/EMS procurement is ongoing with contract award expected by Q2 2017.
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. During the operational phase, the positive impacts are obvious and consist in a much more reliable power supply in Armenia. The Initial Environmental Examination has been 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, will be conducted to ensure efficiency and effectiveness in project implementation.|
|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 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 while that of SCADA system expansion is ongoing with contract award expected by Q2 2017.
|Responsible ADB Officer||Luo, Tianhua|
|Responsible ADB Department||Central and West Asia Department|
|Responsible ADB Division||Energy Division, CWRD|
Ministry of Energy and Natural Resources of the Republic of Armenia
Government Building 2, Republic Square
375010 Yerevan, Republic of Armenia
|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||31 Mar 2017|
|Approval||Signing Date||Effectivity Date||Closing|
|31 Jul 2014||05 Sep 2014||12 Feb 2015||30 Jun 2020||-||-|
|Financing Plan||Loan Utilization|
|Total (Amount in US$ million)||Date||ADB||Others||Net Percentage|
|Project Cost||50.00||Cumulative Contract Awards|
|ADB||37.00||31 Jul 2014||16.91||0.00||51%|
|Cofinancing||0.00||31 Jul 2014||3.97||0.00||12%|
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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