Project Appraisal Document
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Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 50298-IN PROJECT APPRAISAL DOCUMENT ON A Public Disclosure Authorized PROPOSED LOAN IN THE AMOUNT OF US$ 648 MILLION TO THDC INDIA LIMITED WITH THE GUARANTEE OF THE REPUBLIC OF INDIA FOR THE Public Disclosure Authorized VISHNUGAD PIPALKOTI HYDRO ELECTRIC PROJECT June 10, 2011 This document has a restricted distribution and may be used by recipients only in the Public Disclosure Authorized performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS (Exchange Rate Effective June 6, 2011) Currency Unit = Indian Rupee Rs. 44.75 = US$1 US$ 0.022 = Rs. 1 FISCAL YEAR April 1 – March 31 ABBREVIATIONS AND ACRONYMS CAS Country Strategy MoEF Ministry of Environment and Forests CAT Catchment Area Treatment MOP Ministry of Power CBIS Capacity Building and Institutional MW, MWh Megawatt, Megawatt-hour Strengthening CEA Central Electricity Authority NAPCC National Action Plan on Climate Change CERC Central Electricity Regulatory NDBR Nanda Devi Biosphere Reserve Commission DRC Design Review Consultant NEP National Electricity Policy EIA Environmental Impact Assessment NGO Non-Governmental Organization EIRR Economic Internal Rate of Return NRRP National Resettlement & Rehabilitation Policy (2007) EMP Environmental Management Plan OP Operational Policy EPC Engineering, Procurement and PAF Project-Affected Family Construction FIRR Financial Internal Rate of Return PAP Project-Affected Persons GAAP Governance and Accountability Action PHRD Policy and Human Resources Plan Development Grant GBR Geo-technical Baseline Report PIC Project Information Center GOI Government of India PWD Public Works Department GOUk Government of Uttarakhand R&R Resettlement and Rehabilitation GW, GWh Gigawatt, Gigawatt-hour RAP Resettlement Action Plan HEP Hydro Electric Project SBD Standard Bidding Documents IBRD International Bank of Reconstruction and SIA Social Impact Assessment Development ICB International Competitive Bidding TBM Tunnel boring machine IDA International Development Association THDC THDC India Limited IEP Integrated Energy Policy UNESCO United Nations Educational, Scientific and Cultural Organization kW, kWh kilowatt, kilowatt-hour VPHEP Vishnugad Pipalkoti Hydro Electric Project Vice President: Isabel M. Guerrero Country Director: N. Roberto Zagha Sector Director: John H. Stein Sector Manager: Jyoti Shukla Task Team Leader: Michael Haney ii INDIAError! Unknown document property name. Vishnugad Pipalkoti Hydroelectric Project CONTENTS Page I. STRATEGIC CONTEXT AND RATIONALE ................................................................. 1 A. Challenges in the power sector ........................................................................................... 1 B. Rationale for Bank involvement ......................................................................................... 6 C. Higher level objectives to which the project contributes .................................................... 7 II. PROJECT DESCRIPTION ................................................................................................. 8 A. Lending instrument ............................................................................................................. 8 B. Project development objective and key indicators.............................................................. 8 C. Project components ............................................................................................................. 8 D. Project Costs and Financing................................................................................................ 9 E. Lessons learned and reflected in the project design ............................................................ 9 F. Alternatives considered and reasons for rejection ............................................................ 11 III. IMPLEMENTATION .................................................................................................... 12 A. Institutional and implementation arrangements ................................................................ 12 B. Monitoring and evaluation of outcomes/results ................................................................ 13 C. Sustainability..................................................................................................................... 13 D. Critical risks and possible controversial aspects ............................................................... 14 E. Loan/credit conditions and covenants ............................................................................... 18 IV. APPRAISAL SUMMARY ............................................................................................. 20 A. Economic and financial analyses ...................................................................................... 20 B. Technical ........................................................................................................................... 21 C. Fiduciary ........................................................................................................................... 21 D. Social................................................................................................................................. 22 E. Environment ...................................................................................................................... 24 F. Safeguard policies ............................................................................................................. 26 G. Policy exceptions and readiness ........................................................................................ 27 Annex 1: Country and Sector or Program Background ......................................................... 28 iii Annex 2: THDC Capacity-Building and Institutional Strengthening Program ................... 33 Annex 3: Results Framework and Monitoring ........................................................................ 38 Annex 4: Detailed Project Description ...................................................................................... 43 Annex 5: Project Costs ............................................................................................................... 50 Annex 6: Implementation Arrangements ................................................................................. 51 Annex 7: Financial Management and Disbursement Arrangements ..................................... 53 Annex 8: Procurement Arrangements ...................................................................................... 69 Annex 9: Economic and Financial Analysis ............................................................................. 78 Annex 10: Safeguard Policy Issues .......................................................................................... 100 Annex 11: Project Preparation and Supervision ................................................................... 133 Annex 12: Governance and Accountability Action Plan ....................................................... 135 Annex 13: Documents in the Project File ............................................................................... 151 Annex 14: Statement of Loans and Credits ............................................................................ 152 Annex 15: Country at a Glance ............................................................................................... 157 Annex 16: Map IBRD 35230 .................................................................................................... 159 Annex 17: Communications, Consultations and Public Disclosure ..................................... 160 iv INDIA VISHNUGAD PIPALKOTI HYDROELECTRIC PROJECT PROJECT APPRAISAL DOCUMENT SOUTH ASIA SASDE Date: June 10, 2011 Team Leader: Michael Haney Country Director: N. Roberto Zagha Sectors: Power (50%); Renewable energy Sector Manager: Jyoti Shukla (50%) Project ID: P096124 Environmental Assessment: Full Assessment Lending Instrument: Specific Investment Loan Project Financing Data: Proposed terms: [ X ] Loan [ ] Credit [ ] Grant [ ] Guarantee [ ] Other: Source Total Amount (US$M) Total Project Cost: 922.0 Borrower: 274.0 IBRD: 648.0 Borrower: THDC India Limited Responsible Agency: THDC India Limited Contact person: Mr. R.S.T. Sai, Chairman and Managing Director Ganga Bhawan Bypass Road, Pragatipuram Rishikesh Uttarakhand India Tel: +91-135-2430721 Fax: +91-135-2438379 FY 2012 2013 2014 2015 2016 2017 Annual 25 80 200 180 125 38 Cumulative 25 105 305 485 610 648 Project implementation period: Start: September 1, 2011 End: August 31, 2017 Expected effectiveness date: September 1, 2011 Expected closing date: December 31, 2017 Does the project depart from the CAS in content or other significant respects? [ ]Yes [X] No Ref. PAD I.C. v Does the project require any exceptions from Bank policies? [ ]Yes [X] No Ref. PAD IV.G. Have these been approved by Bank management? [ ]Yes [ ] No Is approval for any policy exception sought from the Board? [ ]Yes [X] No Does the project include any critical risks rated ―substantial‖ or ―high‖? [X]Yes [ ] No Ref. PAD III.D. Does the project meet the Regional criteria for readiness for implementation? [X]Yes [ ] No Ref. PAD IV.G. Project development objective The objectives of the Project are: (a) to increase the supply of electricity to India‘s national grid through the addition of renewable, low-carbon energy; and (b) strengthen the institutional