fbpx 49370-002: National Power Grid Strengthening Project | Asian Development Bank

Turkmenistan: National Power Grid Strengthening Project

Sovereign (Public) Project | 49370-002 Status: Active

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

Project Officer
Sohail Hasnie Central and West Asia Department Request for information
Country
  • Turkmenistan
Sector
  • Energy
 
Project Name National Power Grid Strengthening Project
Project Number 49370-002
Country Turkmenistan
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3734-TKM: National Power Grid Strengthening Project
Ordinary capital resources US$ 500.00 million
TA 9637-TKM: Improving Energy Efficiency and Capacity
Japan Fund for Poverty Reduction US$ 1.50 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Governance and capacity development
Partnerships
Private sector development
Sector / Subsector

Energy / Electricity transmission and distribution

Gender Equity and Mainstreaming 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 grids for 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 2012 2017, 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.

Impact

Impact the Project is Aligned with

1. Improved economic growth and sector profitability

2. Diversified economic structure and export base.

Project Outcome
Description of Outcome Regional cooperation and power export opportunities maximized.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Regional and national power transmission infrastructure reinforced.

Power system planning, forecasting improved

Investment project management and procurement capacity in energy sector strengthened

Pilot projects for energy efficiency demonstrated.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Nation-wide, Ashgabat
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
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 Sohail Hasnie
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Executing Agencies
Ministry of Energy of Turkmenistan
[email protected]
55, 2022 Str.
Ashgabat 744000
Timetable
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 15 Nov 2018

Loan 3734-TKM

Milestones
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
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 675.00 Cumulative Contract Awards
ADB 500.00 08 Nov 2018 0.00 0.00 0%
Counterpart 175.00 Cumulative Disbursements
Cofinancing 0.00 08 Nov 2018 0.25 0.00 0%

TA 9637-TKM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
08 Nov 2018 20 Dec 2018 20 Dec 2018 31 May 2021 - -
Financing Plan/TA Utilization Cumulative Disbursements
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 08 Nov 2018 0.00

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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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
International Financial Reporting Standand (IFRS) Experts- National Power Grid Strengthening Project Firm - Consulting Closed 02 Aug 2019 16 Aug 2019
Loan No. 3734-TKM: National Power Grid Strengthening Project [Package 1] Invitation for Bids Closed 20 Nov 2018 14 Jan 2019
Loan No. 3734-TKM: National Power Grid Strengthening Project [Package 2] Invitation for Bids Closed 21 Nov 2018 14 Jan 2019
Loan No. 3734-TKM: National Power Grid Strengthening Project [Package 3, Lot 8] Invitation for Bids Closed 20 Nov 2018 14 Jan 2019
National Power Grid Strengthening Project - Electrical Engineer Individual - Consulting Closed 21 Jun 2019 27 Jun 2019
National Power Grid Strengthening Project - Energy Efficiency Expert (End User Equipment) Individual - Consulting Closed 05 Apr 2019 11 Apr 2019
National Power Grid Strengthening Project- Energy Efficieny Expert (Generation, Transmission and Distribution) Individual - Consulting Closed 05 Apr 2019 11 Apr 2019
National Power Grid Strengthening Project- Energy Efficieny Expert (Policy and Regulation) Individual - Consulting Closed 05 Apr 2019 11 Apr 2019
TKM: National Power Grid Strengthening Project Advance Notice Active 16 Nov 2018

Contracts Awarded

No contracts awarded for this project were found

Procurement Plan