Turkmenistan : National Power Grid Strengthening Project
The project will (i) build about 1,100 kilometers (km) of new 110-kilovolt (kV), 220 kV, and 500 kV transmission lines; (ii) construct four new substations; and (iii) expand three existing substations. The project will cover four of the five regions of Turkmenistan, and will help establish an interconnected national transmission grid to improve reliability and energy efficiency of the network. Hydrocarbon-rich Turkmenistan has been an exporter of baseload power to its neighbors, notably Afghanistan. The reinforced transmission network is an essential prerequisite for improving power supply reliability for domestic consumers and current and expanded future electricity exports.
Project Details
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Project Officer
Santiago, Catherine B.
Central and West Asia Department
Request for information -
Country/Economy
Turkmenistan -
Modality
-
Sector
- Energy
Related Projects
Project Name | National Power Grid Strengthening Project | ||||||||
Project Number | 49370-002 | ||||||||
Country / Economy | Turkmenistan |
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Project Status | Active | ||||||||
Project Type / Modality of Assistance | Loan Technical Assistance |
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Source of Funding / Amount |
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Strategic Agendas | Environmentally sustainable growth Inclusive economic growth Regional integration |
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Drivers of Change | Governance and capacity development Partnerships Private sector development |
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Sector / Subsector | Energy / Electricity transmission and distribution |
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Gender | No gender elements | ||||||||
Description | The project will (i) build about 1,100 kilometers (km) of new 110-kilovolt (kV), 220 kV, and 500 kV transmission lines; (ii) construct four new substations; and (iii) expand three existing substations. The project will cover four of the five regions of Turkmenistan, and will help establish an interconnected national transmission grid to improve reliability and energy efficiency of the network. Hydrocarbon-rich Turkmenistan has been an exporter of baseload power to its neighbors, notably Afghanistan. The reinforced transmission network is an essential prerequisite for improving power supply reliability for domestic consumers and current and expanded future electricity exports. | ||||||||
Project Rationale and Linkage to Country/Regional Strategy | Turkmenistan is a sparsely populated country with a total population of about 5.7 million, the lowest among Central Asian countries. Its economy is built around its vast hydrocarbon resources: Turkmenistan is the 12th largest natural gas producer in the world, and the 10th biggest oil producer in Asia and the Pacific. The country''s economy expanded at an annual rate of 12.3% during 1998-2016. Hydrocarbon-related products consistently averaged close to 90% of annual exports from 2001 to 2015. As the Turkmen economy is highly vulnerable to global oil and gas prices, economic growth slowed from over 10% in 2013-2014 to about 6.5% in 2017 because of a sharp contraction in oil and gas export revenues. Turkmenistan has the world''s fourth largest share of natural gas reserves, at 9.4% of the global total or 17.5 trillion cubic meters, after the Russian Federation, Iran, and Qatar. Annual production of natural gas averaged about 60 billion cubic meters (bcm) during 2005-2016. The country is an exporter of gas, primarily to the People''s Republic of China, totaling about 45 bcm per year, half of what it used to export in the early 1990s, to its neighbor countries. Turkmenistan has more than 5.4 gigawatts of installed power generation capacity, nearly all of which comes from natural gas-fired power plants. The country clearly has sufficient gas resources to be a major exporter of gas and electricity. Turkmenistan was a key part of the Central Asia Power System (CAPS) created under the auspices of the Soviet Union in the 1970s. Turkmenistan''s power system was developed at that time with a strong export orientation because of its rich hydrocarbon resources and its proximity to large populations in surrounding countries and regions, such as Afghanistan, Iran, Uzbekistan, and southern Kazakhstan. During the early 1990s, electricity exports from Turkmenistan peaked at 13 terawatt-hours (TWh) per year. The collapse of the Soviet Union resulted in a progressive decline in power trade in the CAPS. Turkmenistan was first to disconnect from the CAPS in 2003. Subsequently, it maintained seasonal export of electricity, especially during the winter months, to Tajikistan through Uzbekistan until 2009, but that also stopped once Tajikistan was disconnected from the CAPS in December 2009. Turkmenistan''s electricity exports declined to 1.5 TWh in 2010. By 2017, its electricity exports had increased to 3.4 TWh thanks to a new export market. The Asian Development Bank (ADB), under its Central Asian Regional Economic Cooperation (CAREC) Program, has been working closely with all regional countries to achieve energy security through power interconnection and power trade. Within CAREC, there are energy resource complementarities and uneven distribution of energy among countries. Central Asian countries are energy rich and can export it, including to large markets in energy-deficient Afghanistan and Pakistan. While Central Asian countries are 100% electrified with stable demand growth, Afghanistan and Pakistan have large populations without access to energy; demand growth is therefore high. Thus, CAREC''s Central Asia-South Asia Regional Energy Market is one of the key pillars of CAREC''s work plan for the energy sector. ADB''s regional energy trade initiatives in CAREC have supported linking Turkmenistan''s large energy resources to large new markets. The proposed 1,800 km Turkmenistan-Afghanistan-Pakistan-India gas pipeline aims to export an annual 33 bcm, equivalent to a supply of about 50,000 megawatts (MW) of power generation capacity to South Asia. Within the Central Asia-South Asia Regional Energy Market framework, through the Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan (TUTAP) and Turkmenistan-Afghanistan-Pakistan power interconnection initiatives, ADB is financing multiple electricity transmission lines to enable power export initially to Afghanistan. This has enabled Afghanistan to access more than 3 TWh of electricity from its neighbors. Collectively, these imports will supply electricity to about 8 million Afghan households, businesses, and industries. But numerous households in Pakistan and Afghanistan still do not have access to modern electricity, especially in cities close to the border with Turkmenistan. The proposed project will enable future power trade with Pakistan. With ADB''s support within the CAREC umbrella, Turkmenistan became the third country to export power to Afghanistan, after Tajikistan and Uzbekistan. Under the TUTAP power interconnection framework, Turkmenistan signed a power purchase and sales agreement with Afghanistan extending to 2028, for an estimated export volume of about 1.5 TWh per year valued at about $75 million per year, assuming an average price of $0.05 per kilowatt hours (kWh). Since 2012, ADB has financed multiple projects in Afghanistan to strengthen Turkmen-Afghan power interconnection. This includes construction of 500-kV transmission line from Afghan-Turkmen border to Kabul, associated sub-stations and distribution networks in several provinces to utilize imported power from Turkmenistan. These projects are under advanced stages of construction and will be completed and put into operation during 2019-2020. ADB is also financing a high voltage direct current back-to-back convertor station inside Afghanistan that will enable synchronized power transfer from Turkmenistan to the Afghan national grid. In parallel, the recent opening of Uzbekistan for power trade in the CAPS as illustrated by each of its bilateral declarations with the Kyrgyz Republic, Tajikistan, and Turkmenistan has created new dynamism and hope in reinvigorating the CAPS. Turkmenistan and Uzbekistan signed a memorandum of understanding that aims to reconnect Turkmenistan with Uzbekistan initially on an island mode supply with a dedicated generator without connecting the two power gridsfor Turkmenistan to export electricity to part of Uzbekistan. It may open new opportunities for power export to Kazakhstan, the Kyrgyz Republic, and Tajikistan. In the backdrop of this promising power export outlook for Turkmenistan, some part of its power grid needs urgent rehabilitation and expansion as described below. Turkmenistan has a 100% electrification rate and a transmission network of more than 6,100 km. Primarily built in 1970s during the Soviet era, Turkmenistan's transmission network is in urgent need of rehabilitation and expansion. Transmission losses on 500 kV and 220 kV are high, at about 5%, which could be halved with a modern transmission system. Power supply reliability is low, with a large number of faults in the network, and weak redundancy makes large sections of the network vulnerable to outages. The absence of strong interconnections between different regions of the country further amplifies the problem for remote regions. Turkmenenergo, the State Energy Corporation is the vertically integrated power utility in the country. In 2017, it produced more than 23 TWh of electricity, exporting 15% of that to neighboring countries. Demand for electricity has grown modestly during 20122017, at an annual average of 1.5%2.0%. The domestic demand growth is expected to be steady and moderate in the medium term, with peak electricity demand increasing from about 3,813 MW in summer 2018 to 4,300 MW by 2024. The government is in the process of reinforcing new generation capacity to come online. It plans to add 2.5 gigawatts of additional capacity by 2020, which will provide adequate headroom to export electricity if the grid is strengthened. |
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Impact | Energy exports diversified and capacity improved. |
Project Outcome | |
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Description of Outcome | Reliability of power supply improved and export volume of electricity increased. |
Progress Toward Outcome | All procurement of goods contracts have been awarded. |
Implementation Progress | |
Description of Project Outputs | Power transmission infrastructure strengthened. Project and financial management capacity of executing agency and implementing agency improved (under attached TA). Regulatory framework and awareness of energy efficiency in Turkmenistan improved (under attached TA). |
Status of Implementation Progress (Outputs, Activities, and Issues) | Delayed contract negotiations with the bidder due to COVID-19. Contract awarded in June 2020. Delayed contract negotiations with the bidder due to COVID-19. Contract awarded in June 2020. Delayed procurement due to delayed contract negotiations with the bidder. Contract was awarded on 26 April 2020 Delayed contract negotiations with the bidder due to COVID-19. Contract awarded in June 2020. Delayed procurement due to delayed contract negotiations with the bidder. Contract was awarded on 26 April 2020 on track on track on track on track |
Geographical Location | Nation-wide, Ashgabat |
Safeguard Categories | |
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Environment | B |
Involuntary Resettlement | C |
Indigenous Peoples | C |
Summary of Environmental and Social Aspects | |
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Environmental Aspects | The initial environmental examination found that the project impacts during the construction stage are expected to be limited, insignificant, and site-specific because of civil works and inappropriate disposal of waste. These impacts will be minimized by the use of effective waste management and good site management practices. Impacts during the operation stage are related to electrocution or collision of birds and will be minimized with design measures. Occupational health and safety risks are also anticipated during the construction stage, and maintenance activities are addressed in the EMP. The PPTA will provide training to PMU and PIU staff for capacity building in environmental management to ensure full compliance with ADB's Safeguard Policy Statement (2009) requirements. |
Involuntary Resettlement | A due diligence report was conducted to support the C categorization. All civil works in substations will be implemented within the confines of existing substations, or on unencumbered land where no involuntary land acquisition or livelihood impacts will occur. The transmission lines will be parallel to existing lines and located in the Karakum Desert, which dominates central Turkmenistan. The scarcity of settlements and arable land is such that the project will not require any land acquisition or impact any assets. Should monitoring during project implementation reveal any unanticipated and unavoidable impacts, a land acquisition and resettlement plan will be prepared. |
Indigenous Peoples | The project will not have any negative impact on indigenous people. Consultations with key stakeholders in Dashoguz and Serdar, and with some local community members, confirmed that no indigenous people live in the project area. |
Stakeholder Communication, Participation, and Consultation | |
During Project Design | Stakeholder's consultation through community meetings, discussions and interviews will be conducted to share information about the proposed project and get views from stakeholders on their expectations. |
During Project Implementation | A grievance redress mechanism to handle both environmental and social safeguard issues will be established after the project effectivity. |
Responsible ADB Officer | Santiago, Catherine B. |
Responsible ADB Department | Central and West Asia Department |
Responsible ADB Division | Energy Division, CWRD |
Executing Agencies |
Ministry of Energy of Turkmenistan |
Timetable | |
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Concept Clearance | 22 Sep 2016 |
Fact Finding | 16 Apr 2018 to 27 Apr 2018 |
MRM | 27 Apr 2018 |
Approval | 08 Nov 2018 |
Last Review Mission | - |
Last PDS Update | 30 Sep 2020 |
Loan 3734-TKM
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
08 Nov 2018 | 15 Nov 2018 | 15 Apr 2019 | 30 Jun 2024 | - | - |
Financing Plan | Loan Utilization | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 675.00 | Cumulative Contract Awards | |||
ADB | 500.00 | 24 Apr 2023 | 469.56 | 0.00 | 94% |
Counterpart | 175.00 | Cumulative Disbursements | |||
Cofinancing | 0.00 | 24 Apr 2023 | 394.87 | 0.00 | 79% |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | Satisfactory | Satisfactory | Satisfactory | Satisfactory | - | Satisfactory |
TA 9637-TKM
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
08 Nov 2018 | 20 Dec 2018 | 20 Dec 2018 | 31 May 2021 | 30 Jun 2023 | - |
Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
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ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
Gov | Beneficiaries | Project Sponsor | Others | |||||
0.00 | 1,500,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,500,000.00 | 24 Apr 2023 | 489,046.59 |
Status of Covenants | ||||||
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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.
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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 |
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National Power Grid Strengthening Project: Environmental Monitoring Report (September-December 2022) | Environmental Monitoring Reports | May 2023 |
National Power Grid Strengthening Project: Environmental Monitoring Report (January-August 2022) | Environmental Monitoring Reports | Oct 2022 |
National Power Grid Strengthening Project: Environmental Monitoring Report (September 2020-December 2021) | Environmental Monitoring Reports | Sep 2022 |
National Power Grid Strengthening Project: Updated Initial Environmental Examination | Initial Environmental Examination | Oct 2020 |
National Power Grid Strengthening Project: Social Due Diligence Report | Safeguards Due Diligence Reports | Oct 2020 |
National Power Grid Strengthening Project: Initial Environmental Examination | Initial Environmental Examination | May 2018 |
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.
$500 Million ADB Loan to Strengthen Turkmenistan's Electricity Supply, Boost Regional Power Trade
ADB's Board of Directors has approved a $500 million loan to reinforce Turkmenistan’s transmission network, improve reliability of the country’s power supply, and increase electricity exports to neighboring countries.
Tenders
Contracts Awarded
Contract Title | Approval Number | Contract Date | Contractor | Address | Executing Agency | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
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LOT 7: DESIGN, SUPPLY AND INSTALLATION OF TELEMECA NICS, COMMUNICATION AND SCADA SYSTEM | Loan 3734 | 22 Jul 2020 | CALIK ENERJI SANAYI VE TICARET A.S. | 163 ZINCIRLIKUYU-SISLI, ISTANBUL TURKEY | Ministry of Energy of Turkmenistan | 12,300,000.00 | 10,000,000.00 |
Procurement Plan
Title | Document Type | Document Date |
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National Power Grid Strengthening Project: Procurement Plan | Procurement Plans | Aug 2018 |