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World Bank Document Docmwent of The WorId BOnkc Public Disclosure Authorized Report No: 22670/oC-N PROJECT APPRAISAL DOCUMEN Public Disclosure Authorized ONA PROPOSED LOAN IN THE AMOUNT OF US$105 MILLION TO THE PEOPLE'S REPUBLIC OF CHNA FOR HUBEI HYDROPOWER DEVELOPMENT IN POOR AREAS PROJECT Public Disclosure Authorized May 30, 2002 Energy and Mining Sectr Development UUit East Asia and Pacific Region Public Disclosure Authorized CURRENCY EQFUIVALENTS (Exchange Rate Effective 11/15/2001) Currency Unit Yuan (Y) Y;I I - Tuiaau.il TOO^ .a US$1 Y8.28 FISCAL YEAR january I - December 31 ABBREVIATIONS AND ACRONYMS ,m,, - Meter km - Kilometer (=0.62 miles) kW - Kilowatt (=1,000 watts) MW - Megawatt (1,000,000 watts) GW - Gigawatt kWh - Kilowatt hour (=860.42 kcal) MWh - Megawatt hour (=1,000 kWh) CGWh - Cigawatt hour (= l00fO0 kilowatt hniirs kV - Kilovolt (1,000 volts) MVA - Megavolt-Amnpere (1,000 klovolt-am"peres) Vice President: Jemal-ud-din Kassum Country Manager/Director: Yukon Huang Acting Sector Manager/Director: Mohanuad Farhandi Task Team Leader/Task Manager: Barry Trembath ABBREVIATIONS AND ACRONYMS - . 2.... I -m . AtDO - Asiai Djveopmenit Baiik HrrAO - Hiueci Pruvinciai Poverty A;leviation Oflice ASTAE - Asia Alternative Energy Programme HPPDC - Hubei Provincial Planning and Development Commission BP - Bank Procedures IAS - Lnternational Accounting Standards CAS - Country Assistance Strategy IBRD - Intemational Bank for Reconstruction and Development CFAA - Country Financial Accountability Assessment ICB - Intemational Competitive Bidding CFB - County Finance Bureau IDC - Interest During Construction CIF - Cost, Insurance, Freight LGPR - Leading Group for Poverty Reduction COSU - Cer.al Opet..,tion-a1 SerVi.ce 'Jni:t D - M riar.ce Bueau CPC - Chinese Communist Party MOF - Ministry of Finance CPMO - County Project Management Office MMS - Mandated Marked Share CQ - Selection Based on Consultants' Qualifications MS Co. - Hydropower Construction Engineering Consulting CRAES - Chinese Research Academy of Environmental Mid-South Company Sciences MWR - Ministry of Water Resources CRESP - China Renewable Energy Scale-up Program NCB - National Competitive Bidding CWP^C hnjian.g Water Reso es Commission TlT . l DRA - Debt Reserve Account OD - Operational Directives DSCR - Debt Service Coverage Ratio OP - Operational Policies EA - Environmental Assessment PAP - Project Affected People EDR - Equalizing Discount Rate PCD - Project Concept Document EiKR - Economic intemal Rate of Retum PDR - Preliminary Design Report EMP - Environmental Management Plan PIP - Project Implementation Plan ESCO - Energy Service Company DpAAi Prvobable Maximurm Flood ESMAP - Energry Sector Management Assistance Programme POE - Panel of Experts ETI - Sichuan Ertan International Engineering Consulting PPMO - Provincial Project Management Office Company, Ltd. PRA - Participatory Rural Appraisals FIRR - Financial Internal Rate of Return QCBS - Quality and Cost Based Selection FMIS - Finacial Management information System RAP - Resettlement Action Plan FSR - Feasibility Study Report RLG - Resettlement Leading Group _,AAP - yeneral AcAnntMA Annniinfin, Prin.^inlpe SA - S A GEF - Global Environmental Facility SDPC - State Development and Planning Commission GHG - Greenhouse Gas SE - Supervision Engineer GOC - Govemment of China SPC - State Power Corporation GP - Good Practices SPEC - State Power Economic Research Center HEPB - Hubei Environmental Protection Bureau SS - Singie-Source Selection HEPRI - Hubei Environmental Protection Research Institute TTL - Task Team Leader HIDI - Hubei Investigation and Desien Lns:titute IUNDP - Unitted Nations Developm-ent Programme HPFB - Hubei Provincial Finance Bureau I WBOB - World Bank Office in Beijing CHINA kiUJ3il HYDROPOWER DEVELOPMENT IN POOR AREAS PROJECT CONTENT1S A. Project Development Objective Page 1. Project development objective 3 2. Ke, perforxmnance indictors 3 B. Strategic Context 1. Sector-related Country Assistance Strategv (CAS) goal sunppored by the project 3 2. Main sector issues and Government strategy 3 3.,*Set sues to be ad&-Sesse by +u.e ro arA-,sua egc: hics C. Project DeSt-rintin.,mm,a,r 1. Project components l3 2. Key policy and institutional reforms supported by the project 16 3. Beefitsaned- aget population 16 4. Institutional and implementation arrangements 17 D. Project Rationale 1. Project alternatives considered and reasons for rejection 17 2. Maijuiorrela piujcw~ finianced byi[ie Bank and o"mer development agencies 3. Lessons learned and reflected in the project design 23 4. Indications of borrower commitment and ownership 24 5. Value added of Bank support in this project 24 E. Summary Project Analysis 1. Economic 25 2. Financial 26 3. Technical 28 4. Institutional 29 5. Environmental 33 6. Social 37 7. Safeguard Policies A44 V ,Q;~ 11i~,arA WaI,a F . S lfl.taiAUt**Js1 0 0 .......... 1 Sustainabilitv 45 2. Critical risks 45 3. PD co-tannfrnnveraial ianr-tQ 47 G. Main Conditions 1. Effectiveness Condition 47 2. Other 47 H. Readiness for Implementation 50 I. Compliance with Bank Policies 50 Annexes Amlex 1: riuject Desisgn 'uan 51 Annex 2: Detailed Project Description 54 Annex 3: Estimated Project Costs 66 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 67 Annex 5: Financial Sununary for Revenue-Earning Project Entities, or Financial Summary 73 Annex 6: Procurement and Disbursement Arrangements 88 Annex 7: Project Processing Schedule 108 AnneX 82 DlTnn,mntv in the Prniprt File l 09 Annex 9: Statement of Loans and Credits 110 Aniniex 10: Country at a Glance 114 Annex 11: Energy Sector Issues and Bank Strategy 116 Annex 12: Financial Management Assessment 127 Annex 13: Environmental Summary 135 Annex 14: Land Acquisition and Resettlement 145 Annex 15: Social Assessment 159 Annex 16: Poverty Alleviation Impacts 172 Annex 17: Social Assessmennt Appraisal Mission Report 180 Annex 18: Institutional Arrangements for Inplementation and Operation 192 MAP(S) ItiB 35892 CHINA Hubei Hydropower Development in Poor Areas Proiect Project Appraisal Document East Asia and Pacific Region EASEG IDate: May30.2002 Team Leader: BarryvTrembath Country Manager/Director: Yukon Huang Sector Manager/Director: M. Farhandi I ro,ect mI: P068I09 Sector(S): PH = H-- Lending Instrument: Specific Investment Loan (SEL) Theme(s): Environment; Poverty Reduction; Energy Poverrty Targeted intervenuun; N [XI Loan I ] Credit [ ] Grant [ ] Guarantee [ J Other: I Fo Loans.'Credits.Others: Amount (US$m): 105.0 Borrower Rationale for Choice of Loan Terms Available on File: ER Yes roposeU I UerMnS ;;BRCJ;: VdrnU1le-pread Curreney Loan kVSL) Grace period (years): 5 Years to maturity: 20 Commitment fee: 0.75% Front end fee (FEF) on Bank loan: 1.00% Payment for FEF: Capitalize from Loan Proceeds IBORROWER | 0.00 I 0.00 I 0.00 IBRD 0.00 105.00 105.00 LOCAL GOVTS. (PROV., DISTRICT- CITY) OF BORROWTN.G 6.12 0.00 6.12 COUNTRY TOCrAT 4z-TRpn;nR?w r nTrp Iz2QA 1nA2'C1I SUB-BORROWER(S) | 47.18 0.001 47.18 To'ta: j 107.10 1 iiS.3i | 222.41 Borrower: CHINA agency:FINi4CEEesponsiCie BuIREAU Hubei Provincial Project Management Office (PPMO) Address: 8 zhongbei Road, wuchang Distnct, wuhan City, Hubei 4JU071, Lhlfna Contact Person: Mme. Guo Shimin Tel: (86-27) 8784-9682 Fax: (86-27) 8784-9682 Email: [email protected] flthor A.genmrr,floa): Project Companies: Xuan-en Dongping Hydroelectric Power Company Limnited Atr pcq Xnn-en 2n,m ntv Reat Mub-hi 430077 China Contact Person: Mr. Cheng Tao, President Te! (86=1~27)866522 1FAv (862i'7) 8678)1234 >! Laifeng C(Ymntv Naiitan 1-Tvdrnelectric Power Develonment Comnanv Limited Address: 39 Fengnan Road, Xiangfeng Town, Laifeng County, Hubei 445700, China Contac^t Psrvn,r Mr 7lwn RhihAll Vine Precident Tel: (86-718) 6287398 Fax: (86-718) 6287398 Email: Zhushan Duhe Hydroelectric Power Development Company Limited Address: 39 Renmin Roadc Zhushan Countv Seat- Hubei 442200, China Contact Person: Mr. Zhu Ze, President Te:1 (86-719) 4226191 Fnv: 86-719)422d9A1 E.mnil Nanzhang Xiakou Electric Power Company Limited Address: 424 Shuijing Road, Nangzhang County Seat, Hubei 441500, China Contact Person: Mr. Wu Hanxin. President Tel: (86-710) 5258660 Fax: (86-710) 5258660 Email: Estimated Disbursements ( Bank FY/US$m): Annual 12.00 | 27.50 | 32.50 | 20.00 | .00 | 4.00| numuiativel12.00 1 39.50 1 72.00 1 92.00 1 101.00 I 105.00 PProject implementation period: Seven years |Expected effectiveness date: 09/30/2002 Expected closing date: 12/31/2008 -2 - A. Project Development Objective 1. Project development objective: (see Annex 1) The project has three objectives: (a) facilitate economic growth' in Hubei by expanding electric power generation capacity in an economically and environmentally sustainable manner; (b) enhance the efficiency of the electricity sector in Hubei by commercializing county level generation companies; and (c) contribute to poverty alleviation efforts in poor communities in Hubei. 2. Key performance indicators: (see Annex 1) The perfornance indicators for monitoring and evaluation purposes are listed in Annex 1. B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1) Doumen:,u., numbIer:UE. R~ 98-107t iriuFe~~ss Reii1 Da. d.Mscussion. 05/29./I199o The CAS goals were to reduce infrastructure bottlenecks by adjusting the investment pattern in favor of water management, energy, transportation, and telecommunications, to adjust the balance between energy development and conservation, and to develop altemative energy sources. The
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