TA 8285-VAN: Energy Access Project -1
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TA 8285-VAN: Energy Access Project -1 Draft Final Report – R0 Volume 3 - Feasibility Study of Sarakata-1 Extension Project 29 August 2014 Prepared by: SMEC International Pty Ltd Sarakata Hydropower Project - 2014 This page blank for double siding Table of Contents TABLE OF CONTENTS VOLUME 2: FEASIBILITY STUDY OF SARAKATA-1 EXTENSION PROJECT Executive Summary 1 1 Introduction 3 1.1 Introduction 3 1.2 Approach 4 1.3 Report Structure 4 2 Project Rationale 6 2.1 Introduction 6 2.4 Luganville Power System 8 3 Project Area 10 3.1 Topography 10 3.2 Hydrology 10 3.3 Geology 14 4 Project Options 16 4.1 Project Options 16 4.2 Limitation to the extension 17 4.3 Project Options 24 4.4 Project Particulars Comparison 25 4.5 Recommended Option 28 5 The Proposed Project Arrangement 30 5.1 Project Description 30 5.2 Project Works 32 5.3 Energy 38 6 Environmental Assessment 39 6.1 Background 39 6.2 Project Description 39 6.3 Categorization 39 6.4 Implementation Arrangements 39 6.5 Policy, Legal and Administrative Framework 40 6.6 Environmental Management Plan 40 6.7 Information Disclosure, Consultation and Participation 40 6.8 Grievance Redress Mechanism 40 6.9 Conclusion and Recommendations 41 7 Social Assessment and Resettlement Plans 42 7.1 Introduction 42 7.2 Subproject Profile 42 7.3 Issues and Concerns 48 8 Cost Estimates and Financing Plan 52 8.1 Approach to Cost Estimates 52 8.2 Cost Estimates 52 8.3 Civil Costs 52 8.4 Summary of Cost Estimates 53 9 Financial Analysis 54 9.1 Introduction 54 9.2 Financial Assumptions 54 TA-8285 VAN: Energy Access Project | FS of Sarakata-1 Extension Project R0 | August 14 | Page | i Table of Contents 9.3 Weighted Average Cost of Capital (WACC) 54 9.4 Financial Internal Rate of Return (FIRR) 55 10 Economic Analysis 56 10.1 Macroeconomic Context and Demand Analysis 56 10.2 Economic Valuation of Costs and Benefits 57 11 Project Implementation 59 11.1 Introduction 59 11.2 Access 59 11.3 Construction Material 59 11.4 Procurement Plan 59 11.5 Implementation Schedule 61 12 Conclusion and Recommendations 62 12.1 Conclusions 62 12.2 Recommendations 63 APPENDICES Appendix 1 Photographs 65 Appendix 2 Implementation Plan 67 Appendix 3 Drawings and Maps 69 Appendix 4 Hydrology 78 Appendix 5 Initial Environmental Examination 88 Appendix 6 Land Acquisition and Resettlement Plan 185 Appendix 7 Cost Estimates 228 List of Tables Table 1: Luganville Historical Trends 8 Table 21 Characteristics of Sample Households in Santo Table 2 Luganville Energy and MD Projections 9 44 Table 3 CTF Survey Details 10 Table 22 Educational Attainment of Heads of Sample Table 4 Flow Duration Curve data for Sarakata River 13 Households in Santo 45 Table 5 Ratings of the Equipment 17 Table 23 Occupation of Head of Sample Households by Table 6 Discharge for Different Options 17 Gender, Santo 46 Table 7: Sarakata-1 Extension Options 17 Table 24 Contribution of Sources of Income to total annual Table 8 Potential Limits to Sarakata-1 Extension 17 sample HH Income, Santo 46 Table 9 Sarakata-1 Discharges and their Availability for Table 25 Share of various expenditure items to total Different Options 18 annual expenditures, Santo 47 Table 10 Maximum Height of the Dam 19 Table 26 Sample Households with Savings, Santo 47 Table 11 Headrace Sections 21 Table 27 Access to Basic Amenities in Santo 47 Table 12 Summary of the Limits to Sarakata-1 Extension Table 28 Willingness to Connect to Electricity, Santo 48 23 Table 29 Income and Poverty Status of Male and Female Table 13 Proposed Configurations of Sarakata-1 Extension Headed Household - Santo 48 26 Table 30 Land Requirement and Affected Persons in Table 14 Cost Estimates for Options 3A and 3B 28 Sarakata I &II 50 Table 15: Result of Financial Analysis 28 Table 31 Entitlement Matrix 51 Table 16 Arrangements for Recommended Option 29 Table 32 Implementation Schedule 51 Table 17 Major Works for Sarakata-1 Extension 31 Table 33 Sarakata-1 HPP Extension Cost Estimates 53 Table 18 Elevations at the Headworks 32 Table 34: Weighted Average Cost of Capital (all Projects) Table 19 Amendment to Headrace 34 54 Table 20 Distribution of Sample Households of Santo44 Table 35: Weighted Average Cost of Capital (SHPP-1 Only) 55 TA-8285 VAN: Energy Access Project | FS of Sarakata-1 Extension Project R0 | August 14 | Page | ii Table of Contents Table 36: Sensitivity Analysis 55 Table 40 Contract Packages and Procurement Methods Table 37: Summary of the Results of the Socio-economic 60 Survey 57 Table 41 Scope of Works in the Different Contract Table 38: Cost of Source of Lighting 58 Packages 60 Table 39: Sensitivity Analysis 58 List of Figures Figure 1 Project Location 3 Figure 14 Sarakata-1 Option 3A General Arrangement24 Figure 2 Flow Chart of the Approach taken in the Study4 Figure 15 Sarakata-1 Option 3B General Arrangement25 Figure 3 Sarakata River Catchment 11 Figure 16: 1800 kW and 1500 kW Sarakata 1 flow and Figure 4 Sarakata monthly rainfall distribution 12 generation duration curves 26 Figure 5 Flow Duration Curve for Sarakata River 13 Figure 17: Demand duration curves (hourly) 27 Figure 3 General Geological Map 15 Figure 18: Annual generation forecast 1800 kW and 1500 Figure 6 Sarakata-1 Discharge and their Availability for kW installed capacity 27 Different Options 18 Figure 19 Major Works for Sarakata-1 Extension 30 Figure 7 Sarakata-1 Dam 19 Figure 20 Rubber Dam 33 Figure 8 Generation from SHP-1 and Diesel in Year 2013 Figure 21 Amendment to Settling Basin 34 20 Figure 23: Sarakata 1 & 2 Transmission Configuration36 Figure 9 Headworks Arrangement at Sarakata-1 Dam20 Figure 24: 1500 kW Sarakata 1 Flow and Generation 38 Figure 10 Conveyance Capacity of Headworks 21 Figure 25: 1,500 kW Sarakata-1 Generation 38 Figure 11 Typical Headrace at Sarakata-1 HPP 21 Figure 22 Implementation Schedule 61 Figure 12 Headrace Channel Particulars 22 Figure 13 Sarakata-1 Forebay and Powerhouse Area22 Abbreviations and Acronyms ABC Aerial Bundled Conductor O&M Operation and Maintenance ADB Asian Development Bank O/H Overhead AEP Annual Exceedance Probability PCA Procurement Capacity Assessment ASTER Advanced Spaceborne Thermal Emission PEC Provincial Executive Committee and Reflection Radiometer PER Public Environmental Report BPEV Border Price Equivalent Value PFS Pre-feasibility Study CFO Chief Financial Officer PIC Pacific Island Countries CNO Coconut Oil PLC Programmable Logic Control CO2 Carbon Dioxide PMU Project Management Unit CPS Country Partnership Strategy PPA Power Purchase Agreement DFR Draft Final Report PPTA Project Preparation Technical Assistance DMF Design and Monitoring Framework PREP Provincial Renewable Energy Project DOE Department of Energy PV Photovoltaic EA Executing Agency RBOV Reserve Bank of Vanuatu FS Feasibility Study ROW Right of Way GOV Government of Vanuatu S1HPP Sarakata-1 Hydropower Project GPS Global Positioning System S2HPP Sarakata-2 Hydropower Project HDPE High Density Polyethylene SCADA System Control and Data Acquisition IA Implementing Agency SEMP Site-specific Environmental Management IPP Independent Power Producer Plan ITCZ Intertropical Convergence Zone SHPP Sarakata Hydropower Project LiDAR Light Detecting and Ranging SHPP-2 Sarakata-2 Hydropower Project LV Low Voltage (≤ 1000 V) SHS Solar Home System MAF Mean Annual Flood Peak Flow SMEC SMEC International Pty Ltd MOCC Ministry of Environment, Climate Change SOE State-Owned Enterprise and Disaster Management SOPAC Pacific Islands Applied Geoscience MOF Ministry of Finance Commission MOU Memorandum of Understanding SPO South Pacific Oil Ltd NASA National Aeronautics and Space SPV Special Purpose Vehicle Administration SWL Safe Working Load NGO Non-governmental Organisation T&D Transmission and Distribution NREL National Renewable Energy Laboratory TA Technical Assistance TA-8285 VAN: Energy Access Project | FS of Sarakata-1 Extension Project R0 | August 14 | Page | iii Table of Contents TOR Terms of Reference VPMU Vanuatu Project Management Unit UNICEF United Nations International Children's WHO World Health Organisation Emergency Fund (or United Nations WHPP Wambu HPP Children's Fund) VEAP Vanuatu Energy Access Project-1 ADB Safeguards Terms AP Affected People HH House Holds DDR Due Diligence Report HHS House Hold Survey DD/SCAR Due Diligence / Social Compliance Audit IEE Initial Environmental Examination Report IP Indigenous Peoples EARF Environmental Assessment and Review IPP Indigenous Peoples Plan Framework IPPF Indigenous Peoples Planning Framework ECD Environmental and Conservation Division LA/RP Land Acquisition / Resettlement Plan EIA Environmental Impact Assessment PAP Project-affected Peoples EIS Environmental Impact Statement PSA Poverty and Social Assessments EMP Environmental Management Plan REA Rapid Environmental Appraisal ESMS Environmental and Social Management RP Resettlement Plan System SES Socioeconomic survey FAR Fish and Aquatic Report SPS Safeguard Policy Statement (2009) FGD Focus Group Discussion SPRSS Summary Poverty Reduction and Social GAP Gender Action Plan Strategy GFP Grievance Focal Point GRM Grievance Redress Mechanism Financial and Economic Terms EIRR Economic Internal Rate of Return NPV Net Present Value ENPV Economic Net Present Value SERF Shadow Exchange Rate Factor EOCC Economic Opportunity Cost of Capital SoE Statements of Expenditure FIRR Financial Internal Rate of Return SWRF Shadow Wage Rate Factor FNPV Financial Net Present Value WACC Weighted Average Cost of Capital GDP Gross Domestic Product Glossary: Units AUD Australian Dollar masl metres above sea level GWh Giga-Watt-hour (109 watt-hour) M Mega = Million = 106 k kilo = thousand = 103 MVA Mega Volt-Ampere (106 Volt-Ampere) km kilometre MWh Mega Watt-hour (106 Watt-hour) kV kilovolt (103 volt) MW Mega-Watt (106 Watt) kVA kilo-Volt-Ampere (103 Volt-Ampere) pa per annum kW kilo Watt (103 Watt) VUV Vanuatu Vatu kWh kilo Watt-hour (103 Watt-hour) USD United States Dollar m³/s cubic metre per second (‘cumec’) TA-8285 VAN: Energy Access Project | FS of Sarakata-1 Extension Project R0 | August 14 | Page | iv Executive Summary Executive Summary I Introduction 1.