Mbarara-Nkenda & Tororo-Lira Power Transmission Lines Project Country : Uganda
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Language : English Original : English PROJECT : MBARARA-NKENDA & TORORO-LIRA POWER TRANSMISSION LINES PROJECT COUNTRY : UGANDA PROJECT APPRAISAL REPORT Date : 2 December 2008 Team Leader V. ZONGO Principal Financial Analyst OINF.0 3352 Team Members B. RAM Chief Power Engineer OINF.3 2266 D. LEKOETJE Public Utilities Economist OINF.3 2651 P. MWESIGYE Environmentalist, Consultant OINF.3 ATR M.L. EPIE Financial Management Expert ORPU. 2346 Appraisal Team D. RUTABINGWA Infrastructure Specialist UGFO 3894 Division OINF.3 A.T. DIALLO 2125 Manager Sector Director G. MBESHERUBUSA OINF 2034 Regional OREA A. ORDU 2065 Director Mr. E. NZABANITA, Power Engineer OINF.3 3081 Mr. M. DIENNE Chief Infrastructure Specialist- ORQR3 3395 Mr. E. ROBLE, Procurement expert ORPF.1 2648 Peer Reviewers Mr. R. HEERO, Infrastructure Specialist, GHFO GHFO 3319 Mr. J.B. NGUEMA-OLLO, Power Engineer OINF.3 3072 Mr. A. ZAKOU, Power Engineer OINF.3 2211 Mrs L. MOOLA, Disbursement Officer FFCO 2603 Mr O. SOMALI, Consultant, Financial Analyst OINF.3 3905 Mr G. MOLLA Consultant , Financial Analyst OINF.3 ATR TABLE OF CONTENTS 1 STRATEGIC THRUST & RATIONALE.....................................................................1 1.1 Project linkages with country strategy and objectives .............................................1 1.2 Rationale for Bank’s involvement ..............................................................................2 1.3 Donors Coordination ...................................................................................................2 2 PROJECT DESCRIPTION ............................................................................................2 2.1 Project Objective..........................................................................................................2 2.2 Project components......................................................................................................3 2.3 Technical solution retained and other alternatives explored...................................4 2.4 Project type...................................................................................................................4 2.5 Project cost and financing arrangements ..................................................................4 2.6 Project’s target area and population..........................................................................6 2.7 Participatory process for project identification, design and implementation........7 2.8 Bank Group experience, lessons reflected in project design....................................7 2.9 Key performance indicators……………………………………………………… 7 3 PROJECT FEASIBILITY ..............................................................................................9 3.1 Financial and Economic Performance.......................................................................9 3.2 Environmental and Social impacts...........................................................................11 4 IMPLEMENTATION ...................................................................................................13 4.1 Implementation arrangements .................................................................................13 4.2 Monitoring..................................................................................................................14 4.3 Governance.................................................................................................................15 4.4 Climate Change..........................................................................................................16 4.5 Sustainability..............................................................................................................16 4.6 Risk management and lessons learnt from Bujagali ..............................................17 4.7 Knowledge building ...................................................................................................18 5 Financing instrument and conditions ……………………………………………. 17 5.1 Financing instrument……………………………………………………………… 17 5.2 Conditions associated with Bank’intervention……………………………………18 5.3 Compliance with Bank Policies.................................................................................20 6. RECOMMENDATION.................................................................................................20 Appendix I: Comparative Socio-Economic Indicator ........................................................1 Appendix II: Project Map......................................................................................................2 Appendix III: ADB Portfolio in Uganda as at 31 July 2008 ................................................3 Appendix III Projects financed by the Bank and Other Development Partners...............4 Appendix IV: Energy Sector Development Partners Project Matrix 2008-2011...............5 Annex1: Country’s development agenda, sector brief and donor’s support ……………... 1 ANNEX2: Uganda development agenda and donor support ……………………………….4 ANNEX3: BACK UP OF KEY ARGUMENTS OF THE REPORT………………………………………….5 ANNEX4: PROJECT COSTS ESTIMATES………………………………………………………………6 ANNEX5: IMPLEMENTATION ARRANGEMENTS……………………………………………………...7 CURRENCY EQUIVALENTS As of 1 August 2008 UA = 1.59891 USD UA = 2638, 87 USh Fiscal Year January 1st – December 31st Weights and Measures • 1metric tonne = 2204 pounds (lbs) • 1 kilogramme (kg) = 2.200 lbs • 1 metre (m) = 3.28 feet (ft) • 1 millimetre (mm) = 0.03937 inch (“) • 1 kilometre (km) = 0.62 mile • 1 hectare (ha) = 2.471 acres • 1 kV = kilovolt = 103 volts (V) • 1 kVA = kilovolt ampere = 103 volt amperes (VA) • 1 MVA = Megavolt ampere = 103 kilovolt amperes (kVA) • 1 MVAr = Megavolt ampere reactive • 1 kW = kilowatt = l03 watts (W) • 1 MW = Megawatt = l03 kilowatts (kW) • 1 kWh = kilowatt hour = 103 watt hours • 1 MWh = Megawatt hour = 103 kilowatt hours (kWh) • 1 GWh = Gigawatt hour = 106 kilowatt hours • 1 barrel = 0.159 m3 = 158.987 litres • 1 km = kilometre = 103 meters (m) • 1 cm = centimetre = 10-2 meters (m) • 1 ha = hectare = 104 m2 • 1 ton = Metric ton = 1000 kg • 1 TOE = tons of oil equivalent = 11630 kWh ABBREVIATIONS • ACODE Action Coalition for Development and Environment • ADB African Development Bank • ADF African Development Fund • ADO Automotive Diesel Oil • AOI Area of influence • APA Advance Procurement Action • BIP Bujagali Interconnection Project • BOOT Build, Own, Operate and Transfer • DFID Department for International Development • EA Executing Agency • EIRR Economic Internal Rate of Return • EPC Engineering, Procurement and Construction • ERA Electricity Regulatory Authority • ERD Energy Resources Department • ESMP Environmental and Social Management Plan • ESIA Environmental and Social Impact Assessment • EU European Union • FC Foreign Cost • FIRR Financial Internal Rate of Return • GIEK Guarantee Institute for Export Credits of Norway • GOU Government of Uganda i ii • GPN General Procurement Notice • GTZ Gesellschaft für Technische Zusammenarbeit • HFO Heavy Fuel Oil • IDA International Development Association • IPP Independent Power Producer • JBIC Japan Bank for International Cooperation • KML Kilembe Mines Ltd • LC Local cost • LDPG Local Development Partners Group • LV Low Voltage • MDG Millennium Development Goals • MEMD Ministry of Energy and Mineral Development • MUIENR Makerere University Institute of Environment and Natural Resources • NDF Nordic Development Fund • NEMA National Environmental Management Authority • NFA National Forestry Authority • NGO Non-Governmental Organisation • NORAD The Norwegian Agency for Development Cooperation • NPV net Present Value • MV Medium Voltage • O&M Operation and Maintenance • PAP Project Affected Persons • PCR Project Completion Report • PEAP Poverty Eradication Action Plan • PEPD Petroleum Exploration and Production Department • PIC Public Information Centre • PIU Project Implementation Unit • PSD Petroleum Supplies Department • PSR Poverty Status Report • QPR Quarterly Progress Report • RAP Resettlement Action Plan • REA Rural Electrification Agency • REB Rural Electrification Board • REF Rural Electrification Fund • SEA Social and Environmental Assessment • SEAP Social and Environmental Action Plan • SIDA Swedish International Development Agency • UA Unit of Account • UEB Uganda Electricity Board • UEDCL Uganda Electricity Distribution Company Limited • UEGCL Uganda Electricity Generation Company Limited • UETCL Uganda Electricity Transmission Company Limited • UJAS Uganda Joint Assistance Strategy • UTB Uganda Tourism Board • UWA Uganda Wildlife Authority • WACC Weighted Average Cost of Capital • WWF World Wide Fund for Nature ii LOAN INFORMATION Client’s information BORROWER: The Republic of Uganda EXECUTING AGENCY: The Uganda Electricity Transmission Company Limited (UETCL). Financing Plan Sources of financing Amount (UA) Instrument ADF 52.51 million Loan GOU/UETCL 19.98 million Counterpart Funds Total cost 72.49 million ADF’s key financing information Loan disbursement currency Tbd Commitment Fees 0,50% Service Charge 0,75% p.a. Tenor 50 Years Grace period 10 Years FIRR, NPV (base case) 17,07%FNPV 90, 374 million EIRR (base case) 32.89% ENPV 177,542 million Timeframe - Main Milestones Concept Note approval August 2008 Project approval December 2008 Effectiveness June 2009 Last Disbursement December, 2014 Completion March, 2013 Last repayment 2059 i ii PROJECT SUMMARY 1. PROJECT OVERVIEW The Mbarara-Nkenda & Tororo-Lira Power Transmission Lines Project is located in west, north and eastern Uganda respectively. It will