Sri Lanka : Supporting Electricity Supply Reliability Improvement

Project Name

Supporting Electricity Supply Reliability Improvement

Project Number

49216-002

Country / Economy

• Sri Lanka

Project Status

Active

Project Type / Modality of Assistance

• Grant
• Loan

Source of Funding / Amount

Grant 0486-SRI: Supporting Electricity Supply Reliability Improvement Project-Renewable Energy Micro-grid

Source	Amount
Clean Energy Fund under the Clean Energy Financing Partnership Facility	US$ 1.80 million

Grant 9186-SRI: Productive Energy Use for Small Isolated Island and Rural Communities

Source	Amount
Japan Fund for Prosperous and Resilient Asia and the Pacific	US$ 2.00 million

Loan 3409-SRI: Supporting Electricity Supply Reliabiity Improvement

Source	Amount
Ordinary capital resources	US$ 115.00 million

Strategic Agendas

• Environmentally sustainable growth
• Inclusive economic growth

Drivers of Change

• Gender Equity and Mainstreaming
• Governance and capacity development
• Partnerships

Sector / Subsector

• Energy / Electricity transmission and distribution - Energy efficiency and conservation - Renewable energy generation - solar - Renewable energy generation - wind

Gender

Effective gender mainstreaming

Description

The project will directly benefit the development of lagging areas. It will cover 106 rural electrification schemes and 2,372 kilometers (km) of low voltage line extensions. Innovative hybrid mini grids, consisting of windsolar and efficient diesel generation systems coupled with energy storage (lithium-ion batteries), will be implemented in the small isolated islands. As a result, the project will help to ensure inclusiveness and access to electricity by all the population. The project is expected to provide electricity to about 35,710 rural households, including the former conflict-affected Northern and Eastern provinces as well as Uva and North Central provinces where the current electrification level is lower than in other parts of the country. Improvement of the medium voltage network will enhance the quality and reliability of electricity supply to more than 493,000 consumers. The project is consistent with the interim country partnership strategy for Sri Lanka of the Asian Development Bank (ADB). It builds on previous ADB interventions focused on supporting transmission and distribution investments to expand access to clean and reliable electricity, and renewable energy development.

Project Rationale and Linkage to Country/Regional Strategy

Sri Lanka has improved its energy sector performance, and achieved a national electrification ratio of 98% in 2014 compared with 29% in 1990. The remaining 2% of electrification is the most difficult to accomplish, and is mainly in underdeveloped areas and small isolated islands around the country. Although some provinces have achieved 100% electrification, the former conflict-affected Northern and Eastern provinces have only 92% and 94% electrification; and Uva and North Central provinces achieved 95%, with several districts falling well below this level. Improvement of the 33-kilovolt (kV) medium voltage network is needed to ensure system reliability and expand power supply into these rural areas, where many poor households remain unconnected and those connected have poor quality of electricity supply. Several small isolated islands with a population of 1,8004,500 people cannot be provided with electricity through extension of the grid. These islands are supplied by expensive electricity generated by inefficient, old diesel generation sets that provide electricity for limited hours during the day, with an electrification ratio of 38%60%.

The Government of Sri Lanka aims to ensure sustainable development of energy resources by improving the power supply systems to provide access to electricity services to the entire population. Sri Lanka has a national investment program, including sector investments that are based on the National Energy Policy and Strategies. The National Energy Policy and Strategies includes a sector road map, a long-term investment plan, and policy and reform measures. The country's installed generation capacity of 3,932 megawatts produces 12,357 gigawatt-hours of electricity (2014), adequately covering current demand. Generation capacity is sufficient to expand electricity supply further. The government intends to provide electricity to the population through the grid on the main island and mini-grid systems on small isolated islands. The project will contribute to the government's goal of expanding access to electricity and developing clean energy.

Impact

Access to clean, reliable, and affordable power supply in Sri Lanka increased by 2024 (National Energy Policy and Strategies of Sri Lanka)

Project Outcome

Description of Outcome

Electricity supply, and distribution system efficiency and reliability enhanced

Progress Toward Outcome

Implementation is ongoing

Implementation Progress

Description of Project Outputs

1. Renewable energy systems established

2. Reliability of the medium voltage network improved

3. Rural electrification network extended and distribution performance monitoring improved

4. Reactive power management in the transmission system improved

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

In progress; on track to achieve the specific target; RO plant completed and commissioned.Completed for 100% of households below poverty line.Completed; 933 individuals trained of which 61% were women.Completed for 100% BPLs. 615 persons trained. 77% of trainees BPL women.Completed.This component has been cancelled and funds reallocated to emergency assistance to Sri Lanka.Completed.Due to cancellation of 1a, emission avoided will be reduced.In progress; on track to achieve the specific target with delay with in extended contract period.Completed; these are goods packages; all equipment purchases completed; construction to be carried out by CEB; DMF revisions in line with this had been proposed.Completed; these are goods packages; all equipment purchases completed; construction to be carried out by CEB; DMF revisions in line with this had been proposed.Completed; these are goods packages; all equipment purchases completed; construction to be carried out by CEB; DMF revisions in line with this had been proposed.Completed; 615 people trained of which 77% were women below the poverty line.In progress; on track to achieve the specific target.In progress; on track to achieve the specific target with delays.

Geographical Location

Nation-wide

Safeguard Categories

Environment

B

Involuntary Resettlement

B

Indigenous Peoples

C

Summary of Environmental and Social Aspects

Environmental Aspects

CEB has prepared initial environmental examinations for their components and held public consultations. Construction are ongoing and steps are taken to minimize environmental impacts. CEB has observed the route-selection criteria in the national regulations and has adopted best environmental practices. Adequate provisions have been made for the environmental mitigation measures, monitoring requirements, and their associated costs in the environmental management plans (EMPs). CEB has sufficient capacity to implement the safeguard measures incorporated in the EMPs. Mitigation measures related to construction and specified in the EMPs are being incorporated into civil works contracts. The contractors is having primary responsibility for implementing the mitigation measures, but CEB is responsible for and periodically report to ADB on overall implementation of its site-specific EMPs. CEB adhere to ADB 's Safeguard Policy Statement (2009) and local and government environmental regulations. The project is classified category B for environment. CEB has submitted the semi annual environment safeguards reports for Jan 2018 - Jul 2020.

Involuntary Resettlement

None of the project components will have any significant social safeguard impacts. The distribution lines primarily cross public and unused lands. Where croplands are affected, adequate compensation are being paid. Project construction will be going on during the crop off-seasons. Where new grid substations are built on commercial and private lands, adequate compensation is being paid to their owners. The project is classified category B for involuntary resettlement impacts. CEB prepared a resettlement plan for the distribution components.

Indigenous Peoples

No impact on Indigenous Peoples and the project is classified category C for impacts on indigenous peoples.

Stakeholder Communication, Participation, and Consultation

During Project Design

Extensive consultations with the government and stakeholders, including local communities, local authorities, focal groups, civil society groups, were undertaken to ensure participatory approach throughout the design stage during the project preparatory technical assistance. The stakeholders are bring consulted on the relevant issues, including environmental, social and other issues that may affect communities and poor people.

During Project Implementation

The consultation process with the stakeholders are being continued during project implementation as per Sri Lankan regulations.

Business Opportunities

Consulting Services

Recruitment of consultants will be in accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time).

The consulting services include recruitment of a firm or NGO and 4 individual consulting contracts.

Procurement

All procurement will be carried out in accordance with ADB's Procurement Guidelines (2015, as amended from time to time).

There are 8 International Competitive Bidding procurement packages and 1 National Competitive Bidding procurement package.

Contact

Responsible ADB Officer

Haputhanthri, Dinuk P.

Responsible ADB Department

Sectors Group

Responsible ADB Division

Energy Sector Office (SG-ENE)

Executing Agencies

Ceylon Electricity Board

Timetable

Concept Clearance

14 Sep 2015

Fact Finding

19 Jan 2016 to 28 Jan 2016

MRM

08 Apr 2016

Approval

26 Jul 2016

Last Review Mission

-

Last PDS Update

18 Dec 2022

Funding

Grant 0486-SRI

Grant 9186-SRI

Loan 3409-SRI