47101-001: Assam Power Sector Investment Program

Project Data Sheet (PDS): Details

Description

The Assam Power Sector Investment Program (the Program) is a Multitranche Financing Facility (MFF) to fund the generation capacity enhancement and distribution efficiency improvement subprojects in the state of Assam, India. The objective of the investment program is to achieve adequate power supply in Assam. The Program will be for an amount of $300 million with the Tranche 1 expected for up to $50 million. Tranche 1 investment components will be for: (i) replacement of 60 MW, less effieicnt gas turbine generators in Lakwa with 70 MW, new and efficient plant; (ii) implementation and capacity building supports to Assam Power Generation Company (APGC) and Assam Power Distribution Corporation (APDC). Future tranches include construction of 120 MW hydropower project and distribution efficiency improvement projects in urban Assam.

Project Rationale and Linkage to Country/Regional Strategy

The peak electricity demand of Assam during 2011-12 was recorded for 1,250 MW; whereas, the availability of power including the state s own generation was only 960 MW leaving the peak capacity deficit of 290 MW - which is a shortfall of 23.2%. During peak period Assam purchases as much as 200 MW from the open market (Indian Energy Exchange, IEX) at higher costs . The transmission and distribution loss in the state during year 2011-12 is estimated to be 29.29%. Inadequate and unreliable power supply in the state is eroding the competitiveness of state s manufacturing and agriculture industries, and impeding the investments. The per capita consumption in the state is one of the lowest in India. Assam had only 209.21 kWh per capita consumptions per year against the all India average of 739.44 kWh per year in 2009-10. Adequate and reliable power supply at a reasonable cost is essential to boost the state s economy and for the poverty reduction. Out of the State s total 25,124 villages, only 19,729 (78%) villages were electrified till 2010-11. However, under the ongoing government initiatives, all villages are being connected to the grid by the end of 12th five year plan (2012 17). There are about 700 tea gardens in the state with an average demand of 300 kW. The cumulative demands of these tea gardens stand around 210 MW; of which only about 60 MW are grid supplied and rest are being met with the coal. These factors are likely to lead to an exponential growth in the state s electricity demand and which is forecast to reach 2,222 MW in 2019-20 widening the deficit by as much as 516 MW. To cater to the fast growing load, Assam needs significant investment for improving its transmission and distribution network, and enhancing the generation capacity. ADB assisted Assam to prepare a master plan and design the least-cost solution for transmission and distribution system . The master plan was prepared in 2008 with investment plan for Assam up to the end of 11th five year plan (2007 2011). Based on the prepared investment plan, ADB approved a MFF for an amount of $200 million under the MFF: Assam Power Sector Enhancement Investment Program (APSEIP) in 2009. At present the APSEIP is being implemented through - Assam Electric Grid Corporation Limited (AEGCL), the state transmission utility; and Assam Power Distribution Company Limited (APDCL), the state distribution utility. APSEIP s activities include - (i) Improvement of access to power from the construction of new transmission and distribution lines and substations and (ii) Energy efficiency enhancement through augmentation and refurbishment of transmission substations and distribution networks. It is envisaged that at the conclusion of APSEIP, Assam s transmission network will be reliable and efficient to cater to the state s growing demand . However, the investment needs for generation and distribution improvement are still huge. Assam is left with only very limited untapped hydro potential, which is in the range of 500 MW. There are no new gas or coal linkages available and the option of indigenous coalfield development is uncertain due to environmental concerns. To meet the state s growing power demand at affordable price, the state government has decided to optimally utilize its existing gas linkage through replacement of aged and inefficient plants with more efficient plants, and expediting the development of state s available hydro resource through state generating utility. In addition to developing the generation capacity, it is equally critical that Assam commensurately build its distribution infrastructure efficient and adequate, so that the additional power can be efficiently and reliably distributed to the end-users.

Impact

increased availability of electricity in Assam.

Project Outcome

Description of Outcome

increased capacity and efficiency of energy generation and distribution systems in Assam.

Implementation Progress

Description of Project Outputs

Generation system upgraded and expanded Distribution system upgraded and expanded Institutional capacity of APGC & APDC strengthened Project management system in place.

Summary of Environmental and Social Aspects

Environmental Aspect

B

Involuntary Resettlement

C

Indigenous Peoples

C

Stakeholder Participation and Consultation

During Project Design

Stakeholders consultation and participation are being carried out and will continue during the project processing and design.

During Project Implementation

Stakeholders consultation and participation will be arranged during the project implementation.

 

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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