Afghanistan: Energy Supply Improvement Investment Program -Tranche 1

Sovereign Project | 47282-003

The Asian Development Bank is working with Afghanistan to finance investments in energy trade and regional cooperation; energy infrastructure; and energy supply to accelerate the electrification rate. The project is improving access to sustainable energy supplies across the country.

Project Name Energy Supply Improvement Investment Program -Tranche 1
Project Number 47282-003
Country / Economy Afghanistan
Project Status Active
Project Type / Modality of Assistance Grant
Source of Funding / Amount
Grant 0464-AFG: Energy Supply Improvement Investment Program - Tranche 1
Asian Development Fund US$ 110.00 million
Grant 0465-AFG: Energy Supply Improvement Investment Program - Tranche 1
Afghanistan Infrastructure Trust Fund US$ 35.00 million
Strategic Agendas Inclusive economic growth
Regional integration
Drivers of Change Partnerships
Sector / Subsector

Energy / Electricity transmission and distribution - Energy utility services

Gender Equity and Mainstreaming No gender elements
Description The subprojects proposed for financing under the requested PFR are: 1) 500 kV transmission line from Sheberghan to Dashte Alwan, 2) 220 kV transmission line from Andkhoy to Sheberghan, 3) project preparation facility for future energy projects and provision of analytical consulting services, and 4) program supervision and implementation consultancy.
Project Rationale and Linkage to Country/Regional Strategy Tranche 1 will allow expanded power imports by constructing the last missing links to forge Turkmenistan-Afghanistan interconnector.
Impact increase in electrification rate and energy security across Afghanistan (project-defined).
Project Outcome
Description of Outcome increased supply of imported power from Turkmenistan.
Progress Toward Outcome The contract was awarded in December 2019. However, there is a delay with the contract effectiveness given that the contractor refused from the advance payment. The contract will be amended to reflect the change in the effectiveness conditions. It is expected that the contract becomes effective by Q4-2020.
Implementation Progress
Description of Project Outputs

306 kilometers (approximately) of 500 kV Transmission Line from Sheberghan to Dashte Alwan operational

66 kilometers (approximately) of 220 kV Transmission Line from Sheberghan to Andkhoy completed.

Future projects designed and prepared for financing by ADB and other development partners

Business plan and tariff model and framework developed for DABS.

12 kilometers (approximately) of 220 kV transmission line from Mazar independent power plant (IPP) to 220 kV Mazar-e-Sharif - Sheberghan transmission line including one switchyard completed.

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

The contract was awarded in December 2019. However, there is a delay with the contract effectiveness given that the contractor refused from the advance payment. The contract will be amended to reflect the change in the effectiveness conditions. It is expected that the contract becomes effective by Q4-2020.

The 500-kV transmission line from Sherberghan to Dash-e-Alwan project contractor has been mobilized. The contractor has been commenced the preliminary activities in the project site. the overall progress of preliminary works, mobilization and survey and design works as per progress of the month of September 2020 is 65.99%.

The EPC contract for 220-kV transmission line from Andkhoy to Shberghan was signed on 19 November 2017 and mobilization advance payment disbursed in December 2017. The contractor mobilized and has commenced the project survey and design works. The overall project progress is about 99.21% as of end of September 2020.

The analytical studies consultancy packages for preparation of the generation and transmission projects were announced through CSRN on 22 June 2016. The original submission date of EoIs was 21 July 2016. The deadline was extended till 3 August 2016. ADB issued its no-objection to Submission 3 on 13 June 2018 and Submission 4 on 16 July 2018. The contracts award was expected by Q1 2019. The analytical studies package was rejected by NPC in December 2018. Based on the additional analysis conducted by the ADB team jointly with the Ministry of Finance and DABS, it was agreed to split the analytical studies consulting package into 5 packages: (i) update of Power Sector Master Plan, (ii) restructuring of DABS, (iii) distribution network development plan, (iv) evaluation of hydropower dams; and (v) preparation of Solar Energy Generation Project 2.

The engagement of the consulting firms to: (a) update the Power Master Plan; (b) prepare distribution system development plan; (c) restructure DABS to make it efficient and operational; and (d) evaluate hydropower dams are at the procurement stage. The contract for the solar energy generation project 2 was signed in May 2020.

The results of the above-listed technical assistance will serve the basis to prepare a policy-based operation to foster the energy sector reforms to make the sector financially viable and attractive to the private sector.

There are delays in engaging the consultants to provide technical assistance to DABS to (i) update the Power Sector Master Plan; (ii) develop distribution network development plan; (iii) evaluate of hydropower dams; and (iv) restructure DABS. The outcomes of this technical assistance will help DABS to establish its investment, financing and operating costs requirements. The technical assistance is expected to be implemented in Q42020 subject to expeditious approval of the procurement documents by the relevant government authorities including the NPA and NPC.

Geographical Location Baghlan, Balkh, Faryab, Samangan, Wilayat-e Jowzjan
Safeguard Categories
Environment B
Involuntary Resettlement B
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects MFF-II Tranche 1 is categorized as category B in terms of its negative environmental impacts. An updated Initial Environmental Examination (IEE) report for the two turnkey projects is updated biannually and disclosed. LARP has been updated and disclosed. The revised version IDEE for IPP Mazar was reviewed and disclosed. Projects have no adverse environmental impact. Initial IEE was posted on ADB's website in October 2015. It is being implemented as project implementation and physical construction is in progress.
Involuntary Resettlement

A resettlement plan has been updated and posted on ADB's website in Feb (Q1) 2019. It is being updated periodically as project implementation and physical construction is in progress.

The social safeguards due diligence reports for the 500kV Sheberghan-Dasht-e-Alwan Transmission Line (Faryab, Samangan, Jawzjan, and Balk provinces) were disclosed in May 2020.

The social safeguards due diligence report for the 500kV Sheberghan-Dasht-e-Alwan Transmission Line (Baghlan province) was disclosed in July 2020.

The Resettlement Plan for the 220kV Sheberghan to Andkhoy Transmission Line project was disclosed in August 2020.

Indigenous Peoples No impact on indigenous peoples.
Stakeholder Communication, Participation, and Consultation
During Project Design ADB project team and the project implementation consultant consulted the stakeholders during project design and preparation. This is reflected in project documentation
During Project Implementation Periodic consultative meetings are being scheduled starting from June 2018. The project consultative meeting is held bimonthly to update the progress and discuss the project issues accordingly.
Business Opportunities
Consulting Services Consultants to be recruited using Quality-Based Selection (QBS) method following ADB Guidelines on the Use of Consultants (2013, as amended from time to time)
Procurement Project works to be carried out under turnkey contracts procured through international competitive bidding following ADB's Procurement Guidelines (2013, as amended from time to time)
Responsible ADB Officer ADB Disclosure
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Timetable
Concept Clearance -
Fact Finding -
MRM 27 Oct 2015
Approval 08 Dec 2015
Last Review Mission -
Last PDS Update 28 Oct 2020

Grant 0464-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Dec 2015 19 Dec 2015 07 Apr 2016 31 Dec 2020 31 Dec 2023 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 115.00 Cumulative Contract Awards
ADB 110.00 17 Jun 2022 65.35 0.00 59%
Counterpart 5.00 Cumulative Disbursements
Cofinancing 0.00 17 Jun 2022 36.94 0.00 34%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory Satisfactory

Grant 0465-AFG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Dec 2015 19 Dec 2015 07 Apr 2016 31 Dec 2020 31 Dec 2023 -
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 35.00 Cumulative Contract Awards
ADB 0.00 17 Jun 2022 0.00 34.16 98%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 35.00 17 Jun 2022 0.00 27.29 78%

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.