Project Completion Report
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ASIAN DEVELOPMENT BANK PCR: PRC 28125 PROJECT COMPLETION REPORT ON THE HENAN POWER PROJECT (Loan 1400-PRC) IN THE PEOPLE’S REPUBLIC OF CHINA December 2003 CURRENCY EQUIVALENTS Currency Unit – yuan (CNY) At Appraisal At Project Completion (as of 30 September 1995) (as of 12 July 2003) CNY1.00 = $0.118 $0.121 $1.00 = CNY8.45 CNY8.30 ABBREVIATIONS ADB – Asian Development Bank BME – benefit monitoring and evaluation BTG – boiler-turbine-generator CDT – China Datang Corporation CO2 – carbon dioxide DSCR – debt service coverage ratio DSM – demand side management EA – Executing Agency EIA – environmental impact assessment EIRR – economic internal rate of return EPH – Electric Power Henan FIRR – financial internal rate of return HFES – Henan First Electrical Energy Service Company, Ltd. IA – Implementing Agency ICB – international competitive bidding IRP – integrated resource plan IS – international shopping ISO – International Standards Organization MOF – Ministry of Finance NOx – nitrogen oxides PPA – power purchase agreement PRC – People’s Republic of China SEIA – summary environmental impact assessment SP – State Power Corporation SSTA – small scale technical assistance SO2 – sulfur dioxide SOE – state-owned enterprise TA – technical assistance TSP total suspended particulates WACC – weighted average cost of capital XLG – Xuchang Longgang Power Generating Company YEPB – Yuzhou Environment Protection Bureau YMAB – Yuzhou Municipal Afforestation Bureau YMG – Yuzhou Municipal Government YCTP – Yuzhou City Thermal Power Plant YTPP – Yuzhou Thermal Power Plant WEIGHTS AND MEASURES GW (gigawatt) – 1,000 MW GWh (gigawatt-hour) – 1,000,000 kWh kV (kilovolt) – 1,000 V kVA (kilovolt-ampere) – 1,000 kVA kW (kilowatt) – 1,000 W kWh (kilowatt-hour) – 1,000 Wh MW (megawatt) – 1,000 kW MVA (megavolt-ampere) – 1,000 kVA TWh (terawatt-hour) – 1,000 GWh NOTE In this report, "$" refers to US dollars. CONTENTS Page BASIC DATA ii I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 3 C. Project Costs 4 D. Disbursements 5 E. Project Schedule 5 F. Implementation Arrangements 6 G. Conditions and Covenants 7 H. Related Technical Assistance 7 I. Consultant Recruitment and Procurement 8 J. Performance of Consultants, Contractors, and Suppliers 9 K. Performance of the Borrower and the Executing Agency 9 L. Performance of ADB 10 III. EVALUATION OF PERFORMANCE 10 A. Relevance 10 B. Efficacy in Achievement of Purpose 10 C. Efficiency in Achievement of Outputs and Purpose 11 D. Preliminary Assessment of Sustainability 12 E. Environmental, Sociocultural, and Other Impacts 12 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 14 A. Overall Assessment 14 B. Lessons Learned 14 C. Recommendations 15 APPENDIXES 1. Major Events During Project Implementation 16 2. Project Cost and Financing Plan 20 3. Projected and Actual Disbursements 21 4. Project Implementation Schedule 22 5. Organizational Chart of Xuchang Longgang Power Generating Company 23 6. Compliance with Loan Covenants 24 7. Technical Assistance Completion Report 28 8. Summary of ADB-Financed Contracts 30 9. Financial Performance of Project Enterprises 31 10. Financial Evaluation 38 11. Economic Evaluation 40 12. Operating Performance 43 13. Investments for Environmental Improvement 44 14. Environmental Monitoring Indexes 45 15. Training Provided Under the Project 46 16. Project Rating Analysis 47 BASIC DATA A. Loan Identification 1. Country People’s Republic of China 2. Loan Number 1400-PRC 3. Project Title Henan Power Project 4. Borrower People’s Republic of China 5. Executing Agency Electric Power Henan 6. Amount of Loan US$190.08 million 7. PCR Number PCR: PRC 770 B. Loan Data 1. Appraisal – Date Started 17 Jul 1995 – Date Completed 2 Aug 1995 2. Loan Negotiations – Date Started 24 Sep 1995 – Date Completed 28 Sep 1995 3. Date of Board Approval 7 Nov 1995 4. Date of Loan Agreement 18 Jun 1996 5. Date of Loan Effectiveness – In Loan Agreement 19 Sep 1996 – Actual 28 Nov 1996 – Number of Extensions 1 6. Closing Date – In Loan Agreement 30 Jun 2001 – Actual 1 Nov 2001 – Number of Extensions 1 7. Terms of Loan – Interest Rate Pool-based variable lending rate for US$ – Maturity 25 years – Grace Period 5 years 8. Terms of Relending – Interest Rate Pool-based variable lending rate for US$ – Maturity 25 years – Grace Period 5 years – Second-Step Borrowers Electric Power Henan iii 9. Disbursement a. Dates Initial Disbursement Final Disbursement Time -Interval 22 May 1997 01 Nov 2001 53 months Effective Date Original Closing Date Time Interval 19 Sep 1996 30 Jun 2001 57 months b. Amount ($ million) Last Category Original Revised Amount Undisbursed Amount Allocation Allocation Disbursed Balance Canceled 1 Equipment and Materials 159.71 167.99 167.99 0.00 0.00 2 Consulting Services 0.85 0.85 0.39 0.46 0.46 3 Training 0.89 0.89 0.00 0.89 0.89 4 Interest and Commitment Charge 21.70 21.70 21.70 0.00 0.00 Unallocated 16.85 8.57 0.00 8.57 8.57 Total 200.00 200.00 190.08 9.92 9.92 Source: Asian Development Bank. 10. Local Costs (ADB-Financed) - Amount ($) 0 - Percentage of Local Costs 0 - Percentage of Total Cost 0 C. Project Data 1. Project Cost ($ million) Cost Appraisal Estimate Actual Foreign Exchange Cost 377.00 203.87 Local Currency Cost 559.00 195.32 Total 936.00 399.19 Source: Xuchang Longgang Power Generating Company. 2. Cost and Financing Plan ($ million) Appraisal Estimate Actual Item Foreign Local Total Foreign Local Total ADB Loan 200.00 0.00 200.00 190.08 0.00 190.08 Commercial Cofinancing 100.00 0.00 100.00 13.79 0.00 13.79 Domestic Loans 77.00 559.00 636.00 0.00 112.33 112.33 Equity 0.00 0.00 0.00 0.00 82.99 82.99 Total 377.00 559.00 936.00 203.87 195.32 399.19 Source: Xuchang Longgang Power Generating Company. iv 3. Cost Breakdown by Project Component ($ million) Appraisal Estimate Actual Cost Foreign Local Total Foreign Local Total Part A: Yuzhou Thermal Power Plant Land 0.00 5.27 5.27 0.00 7.33 7.33 Equipment 262.41 118.56 380.97 182.17 52.25 234.42 Civil Works 12.35 49.38 61.73 0.00 57.44 57.44 Consultant 0.89 7.71 8.60 0.00 1.36 1.39 Training 0.85 1.81 2.66 0.00 0.56 0.56 Taxes and Duties 0.00 107.72 107.72 0.00 2.29 2.29 Others 0.00 7.31 7.31 0.00 59.35 59.35 Subtotal 276.50 297.76 574.26 182.17 180.58 362.75 Interest and Commitment Charge 71.64 190.79 262.43 21.70 2.30 24.00 Subtotal 348.14 488.55 836.69 203.87 182.88 386.75 Part B: Yuzhou Cogeneration Plant 0.00 1.28 1.28 0.00 0.00 0.00 Part C: Closure of Old Plants 0.00 4.68 4.68 0.00 3.86 3.86 Part D: Afforestation 0.00 8.93 8.93 0.00 8.58 8.58 Contingencies 28.86 55.56 84.42 0.00 0.00 0.00 Total 377.00 559.00 936.00 203.87 195.32 399.19 Source: Xuchang Longgang Power Generating Company. 3. Project Schedule Milestone Appraisal Estimate Actual Part A: Yuzhou Thermal Power Plant Tendering and Evaluation Dec 1995 Feb 1999 Contract Awarding Jun 1996 Mar 1999 Power Plant Building Sep 1998 Jul 2000 Boiler, Unit 1 Mar 1999 Jan 2001 Boiler, Unit 2 Mar 2000 Jun 2001 Turbine, Unit 1 Mar 1999 Feb 2001 Turbine, Unit 2 Mar 2000 Aug 2001 Instrumentation, Unit 1 Mar 1999 Mar 2001 Instrumentation, Unit 2 Mar 2000 Sep 2001 Electrical Equipment Sep 1999 Mar 2001 Stacks Sep 1997 Jun 2001 Central Control Building Dec 1998 May 2000 Coal Conveying System Mar 1999 Nov 2000 Hydraulic Building and Equipment Mar 1999 Dec 2000 Chemical Water Treatment Dec 1998 Oct 2000 Ash Yard and Pipelines Mar 1999 Jan 2001 Distribution Equipment Mar 1999 Mar 2001 Part B: Yuzhou City Plant Conversion to Cogeneration Unit 1 Dec 1999 Conversion was not undertaken Unit 2 Dec 1999 Conversion was not undertaken v Milestone Appraisal Estimate Actual Part C: Closure of Old Power Plants Zhengzhou Cogeneration Power Plant Dec 2000 Dec 2000 Zhengzhou Thermal Power Plant Dec 2000 Dec 2000 Jiaozuo Thermal Power Plant Dec 2000 Dec 2000 Part D: Afforestation Program Dec 2000 June 2001 Source; Xuchang Longgang Power Generating Company. 4. Project Performance Report Ratings Rating Period Development Objectives Implementation Progress Nov-Dec 1998 Satisfactory Satisfactory Jan-Jun 1999 Satisfactory Satisfactory Jul-Dec 1999 Satisfactory Satisfactory Jan-Jun 2000 Satisfactory Satisfactory Jul-Dec 2000 Satisfactory Satisfactory Jan-Jun 2001 Satisfactory Highly Satisfactory July–Dec 2001 Satisfactory Satisfactory D. Data on Asian Development Bank Missions No. of No. of Specialization Name of Mission Date Persons Person-Days of Membersa Fact-Finding 26 Feb–23 Mar 1995 7 101 a, c, g, l Appraisal 17 Jul–2 Aug 1995 9 120 a, c, d, g, h Inception 30 Nov–6 Dec 1995 2 14 a, f Review 12–19 Sep 1996 2 16 a, k Special Loan Review 17–18 Dec 1996 1 2 a Review 10–15 Nov 1998 2 12 a, k Review 10–15 Sep 1999 2 12 a, k Review 6 – 10 Dec 2000 2 10 b, k Review 12–16 Nov 2001 2 10 a, k Project Completion Reviewb 8–12 Jul 2003 4 20 a, b, k, m a a=engineer, b=energy specialist c=financial analyst, d=counsel, e=economist, f=procurement specialist, g=environment specialist, h=programs officer, i=young professional, j=cofinancing officer k=analys t, l=administrative assistant, m=staff consultant.