Uzbekistan: Power Generation Efficiency Improvement Project

Sovereign Project | 49253-003

1. The project will construct two units of 450 MW energy efficient combined cycle gas turbines at the Talimarjan Thermal Power Plant located in Kashkadarya region, contributing to energy saving, greenhouse gas emission reduction, and reliable power supply in Uzbekistan. The project will build on the experience gained through Talimarjan Power Project (phase 1 project) by further improving the corporate governance and promoting commercialization of the energy sector.

Project Details

  • Project Officer
    Kim, Seung Duck
    Central and West Asia Department
    Request for information
  • Country/Economy
    Uzbekistan
  • Modality
    • Loan
    • Technical Assistance
  • Sector
    • Energy
Project Name Power Generation Efficiency Improvement Project
Project Number 49253-003
Country / Economy Uzbekistan
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3621-UZB: Power Generation Efficiency Improvement Project
Ordinary capital resources US$ 450.00 million
Loan: Power Generation Efficiency Improvement Project
Uzbekistan Fund for Reconstruction and Development US$ 177.00 million
TA 9459-UZB: Power Sector Reform and Sustainability Support Program
Japan Fund for Prosperous and Resilient Asia and the Pacific US$ 2.00 million
Loan: Power Generation Efficiency Improvement Project
European Bank for Reconstruction and Development US$ 240.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Energy / Energy efficiency and conservation - Energy sector development and institutional reform

Gender Equity and Mainstreaming Some gender elements
Description 1. The project will construct two units of 450 MW energy efficient combined cycle gas turbines at the Talimarjan Thermal Power Plant located in Kashkadarya region, contributing to energy saving, greenhouse gas emission reduction, and reliable power supply in Uzbekistan. The project will build on the experience gained through Talimarjan Power Project (phase 1 project) by further improving the corporate governance and promoting commercialization of the energy sector.
Project Rationale and Linkage to Country/Regional Strategy

2. Uzbekistan economy has experienced growth averaging 8% per annum in 2011 -2015. Medium-term growth prospect beyond 2016 remains above 6.5%. The government embraces an ambitious investment plan and industrialization strategy, and the power demand is expected to rise. However, the power supply has grown at less than 2% on average for 2011- 2015. More than 75% of power generation units are 30 years or older with limited availability and low efficiency. Power shortage and high energy intensity may soon become a critical bottleneck for national welfare and economic growth.

3. While diversifying the energy sources with renewable energy, the government's strategy is to modernize the power generation infrastructure that is energy efficient with high availability to ensure reliable power supply at an affordable cost. Thermal power plants contribute 85% of the total power generation, with 11,500 MW installed capacity. However, only 470 MW uses combined cycle gas turbine (CCGT) technology, a modern efficient power unit with thermal efficiency of above 50% --the average efficiency of existing plants is only 32.6%. The government plans to install additional ten CCGT projects with 7,000 MW capacity in the next five years, including this proposed project.

4. ADB has been the leading international financial institution in supporting the adoption of energy efficient CCGT in Uzbekistan. The implementation of the Talimarjan Power Project is satisfactory with 82% completed (as of February 2016); its substantial completion is expected by the end of 2016. The Takhiatash Power Plant Efficiency Improvement Project bidding concluded and contract awarded. The key successful factors identified for project implementation include: (i) the ownership and the capacity of the project executing agency; (ii) appropriate guidance and close supervision by ADB; and (iii) close cooperation among the project executing agency, consultant, and ADB with shared common objectives. These lessons will be incorporated in the preparation and implementation of this proposed project.

5. Sector reforms are under way in the energy sector. The government has passed a decree to encourage foreign investment and foreign managers in the state-owned enterprises. It has also introduced key performance indicators to ensure accountability and financial performance. Uzbekenergo has adopted auditing based on the International Standards on Auditing, and financial statements compliance with the International Financial Reporting Standards, as an effort to improve transparency and financial management. Tariff analysis is under way jointly by the government, the World Bank, and ADB. Further, restructuring is ongoing for project management units (PMU) to increase PMU capacity and knowledge retention. However, further support is required for improving corporate governance, financial management, and sector commercialization for private sector participation.

6. The project follows ADB''s strategy for Uzbekistan, which includes a focus on energy efficiency and reliable power supply. The government requested for stand-alone sovereign lending for the project considering that it is a strategic public asset that is best implemented through a turnkey contract.

Impact Reliable energy supply increased and energy intensity reduced
Project Outcome
Description of Outcome Efficiency and reliability of clean power supply improved
Progress Toward Outcome ADB no objection to bidding documents for EPC contract issued on 22 June 2020. IFB and BD to be issued in Q3 2020.
Implementation Progress
Description of Project Outputs

Talimarjan TPP capacity increased

JSC Talimarjan TPP financial operation and performance improved

Institutional capacity enhanced

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

IFB for EPC contract projected in Q3 2020, contract signing in Q3 2021, and commissioning in Q2 2024. The loan will be extended.

IFB for EPC contract projected in Q3 2020, contract signing in Q3 2021, and commissioning in Q2 2024. The loan will be extended.

MOF gave no objection to the power sector master plan on 8 Aug 2019 (ref letter 02/19-04-32/1207).

New tariff methodology approved on 13 Apr 2019 (ref. Resolution of the Cabinet of Ministers 312).

Financial recovery plan prepared in 2018 and initially implemented by JSC Talimarjan TPP in 2019.

At least 20 JSC Talimarjan TPP staff trained by 2019.

The project mgt and supervision consultant (PMSC) will assist in the training.

JSC Talimarjan TPP's IFRS-based AEFS from FY 2019 to be submitted in 2021.

The maintenance and service agreement will be secured after commissioning the two CCGTs in 2024.

To divest their non-core assets, JSC Talimarjan TPP is planning to hand over the community social center to the local government. After transferring ownership, the operation plan will be developed.

Geographical Location Nation-wide
Safeguard Categories
Environment A
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects It is a large scale gas-fired thermal power plant although it adopts energy efficient combined cycle gas turbine technology. An environmental impact assessment will be conducted to abide by ADB's Safeguard Policy Statement (SPS) (2009).
Involuntary Resettlement Based on the EA/IA's preliminary information, the power plant will be constructed within the territory of the existing Talimarjan TPP and there is no need for any land acquisition. As a part of project preparation due diligence, the project team will reconfirm if there is any land acquisition and/or involuntary resettlement, and if there is, appropriate measures will be discussed and agreed with the EA/IA.
Indigenous Peoples The project is about constructing two units of 450 MW energy efficient combined cycle gas turbines within the existing Talimarjan Thermal Power Plant. The project area does not have IP communities as described in the SPS for operational purposes.
Stakeholder Communication, Participation, and Consultation
During Project Design

As a part of the preparation of environmental impact assessment, at least two stakeholder consultations will be conducted by the project implementation agency with the assistance of project preparatory technical assistance consultant.

In addition, as a part of rapid poverty and social assessment, PPTA consultant will organize Focus Group discussions (FGD) and structured interviews in Nuristan town.

During Project Implementation A grievance redress mechanism (GRM) to handle both environmental and social safeguard issues will be established after the project effectivity. Consultations were carried out at preparatory stage of the project and during resettlement due diligence preparation, however Uzbekenergo through its Project Management Unit shall ensure continued meaningful consultations with the stakeholders during project implementation.
Business Opportunities
Consulting Services Project management and supervision consultant was engaged to support JSC Talimarjan Thermal Power Plant (formerly Uzbekenergo) during project implementation with an estimated 512 person-months input. Quality- and cost-based selection (QCBS) method was used with quality:cost ratio of 90:10. All consultants will be recruited according to ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers.
Procurement

A turnkey contractor will be engaged to construct the CCGT units in Talimarjan Thermal Power Plant. The procurement will follow open competitive bidding procedure using ADB's two-stage bidding method without pre-qualification. ADB's standard bidding document for Plant: Design, Supply and Install will be used. All procurement of goods, and works will be undertaken in accordance with ADB

Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers.

Responsible ADB Officer Kim, Seung Duck
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
JSC Talimarjan TPP
[email protected]
Kashkadarya Province, Nishan District Nuristan City Uzbekistan
Timetable
Concept Clearance 19 Apr 2016
Fact Finding 04 Sep 2017 to 06 Oct 2017
MRM 24 Oct 2017
Approval 12 Dec 2017
Last Review Mission -
Last PDS Update 30 Sep 2020

Loan 3621-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Dec 2017 20 Jun 2018 12 Apr 2019 30 Jun 2023 31 Dec 2025 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 828.60 Cumulative Contract Awards
ADB 450.00 26 Jul 2022 7.97 0.00 2%
Counterpart 201.60 Cumulative Disbursements
Cofinancing 177.00 26 Jul 2022 3.78 0.00 1%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory Satisfactory Satisfactory Satisfactory - Satisfactory

TA 9459-UZB

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
12 Dec 2017 03 Jan 2018 03 Jan 2018 31 Mar 2019 31 Dec 2019 01 Jun 2020
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 2,000,000.00 0.00 0.00 0.00 0.00 2,000,000.00 26 Jul 2022 1,867,409.39
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating 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 Generation Efficiency Improvement Project: Procurement Plan Procurement Plans Jun 2022
Power Generation Efficiency Improvement Project: Updated Project Administration Manual Project/Program Administration Manual Jun 2022
Power Generation Efficiency Improvement Project: Updated Project Administration Manual Project/Program Administration Manual May 2021
Amendment to the Loan Agreement (Ordinary Operations) for Loan 3621-UZB: Power Generation Efficiency Improvement Project Loan Agreement (Ordinary Resources) Dec 2019
Amendment to the Project Agreement for Loan 3621-UZB: Power Generation Efficiency Improvement Project Project/Program Agreements Dec 2019
Loan Agreement (Ordinary Operations) for Loan 3621-UZB: Power Generation Efficiency Improvement Project Loan Agreement (Ordinary Resources) Jun 2018
Project Agreement for Loan 3621-UZB: Power Generation Efficiency Improvement Project Project/Program Agreements Jun 2018
Power Generation Efficiency Improvement Project: Report and Recommendation of the President Reports and Recommendations of the President Nov 2017
Power Generation Efficiency Improvement Project: Gender Action Plan Gender Action Plans Nov 2017
Power Generation Efficiency Improvement Project: Project Administration Manual (As of Board Approval) Project/Program Administration Manual Nov 2017
Проект улучшения эффективности выработки электроэнергии : Информация о проекте Translated PDS 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.


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

Tender Title Type Status Posting Date Deadline
Power Generation Efficiency Improvement Project Firm - Consulting Closed 24 Dec 2021 22 Jan 2022
3621-UZB: Talimarjan 2 TPP Power Generation Efficiency Improvements - CORRIGENDUM 2 Invitation for Bids Closed 25 Feb 2021 16 Mar 2021
UZB: Power Generation Efficiency Improvements Project - CORRIGENDUM Invitation for Bids Closed 28 Jan 2021 02 Mar 2021
3621-UZB: Talimarjan 2 TPP Power Generation Efficiency Improvements - ORIGINAL Invitation for Bids Closed 03 Nov 2020 16 Mar 2021
Project Management and Supervison Consultant Firm - Consulting Closed 20 Oct 2018 10 Dec 2018
Power Generation Energy Efficiency Project Firm - Consulting Closed 29 Mar 2018 12 May 2018
IFRS National Expert (4) - Power Sector Reform and Sustainability Support Program Individual - Consulting Closed 22 Feb 2018 28 Feb 2018
TA coordinator - Power Sector Reform and Sustainability Support Program Individual - Consulting Closed 22 Feb 2018 28 Feb 2018
IFRS National Expert (3) - Power Sector Reform and Sustainability Support Program Individual - Consulting Closed 20 Feb 2018 26 Feb 2018
Power Sector Master Plan - Power Generation Efficiency Improvement Project Firm - Consulting Closed 23 Nov 2017 22 Dec 2017
Roadmap for Tariff Reform for Improved Sector Sustainability - Power Generation Efficiency Improvement Project Firm - Consulting Closed 22 Nov 2017 21 Dec 2017

Contracts Awarded

Contract Title Approval Number Contract Date Contractor | Address Executing Agency Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
PROJECT MANAGEMENT AND SUPERVISION CONSULTANT Loan 3621 03 Oct 2019 JV AF-CONSULT (SWI) AND BC BUSINESS CONSULTIN | TAEFERNSTRASSE 26 BADEN, AG 5405 SWITZERLAND Joint-Stock Company Uzbekenergo 7,967,550.00 7,967,550.00
Policy and Advisory Technical Assistance 9459 10 May 2018 CORPORATE SOLUTIONS CONSULTING LTD.(UNITED KINGDOM) | CHURCH HOUSE, 36 BYRON HILL ROAD HARROW-ON-THE-HILL, MIDDLESEX HA2 OHY UNITED KINGDOM UzbekEnergo 900,000.00

Procurement Plan