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Detailed Engineering Study for the Upper Seti Hydropower Project (RRP NEP 43281-02)

Project Administration Manual

Project Number: 43281 August 2010

Nepal: Detailed Engineering Study for the Upper Seti Hydropower Project

Project Administration Manual Purpose and Process The project administration manual (PAM) describes the essential administrative and management requirements to implement the project on time, within budget, and in accordance with Government and Asian Development Bank (ADB) policies and procedures. The PAM should include references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. The Nepal Electricity Authority (NEA) are wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with Government and ADBs policies and procedures. ADB staff is responsible to support implementation including compliance by NEA of their obligations and responsibilities for project implementation in accordance with ADBs policies and procedures. At Grant Negotiations the borrower and ADB shall agree to the PAM and ensure consistency with the Grant agreement. Such agreement shall be reflected in the minutes of the Grant Negotiations. In the event of any discrepancy or contradiction between the PAM and the Grant Agreement, the provisions of the Grant Agreement shall prevail. After ADB Board approval of the project's report and recommendations of the President (RRP) changes in implementation arrangements are subject to agreement and approval pursuant to relevant Government and ADB administrative procedures (including the Project Administration Instructions) and upon such approval they will be subsequently incorporated in the PAM.

Abbreviations ADB ADF DMF EA GON JICA MOE MOF NEA PAI PAM PMU QCBS RRP SPC SPS TOR = = = = = = = = = = = = = = = = = Asian Development Bank Asian Development Fund design and monitoring framework executing agency Government of Nepal Japan International Cooperation Agency Ministry of Energy Ministry of Finance Nepal Electricity Authority project administration instructions project administration manual project management unit quality- and cost based selection report and recommendation of the President to the Board special purpose company Safeguard Policy Statement terms of reference

I.

PROJECT DESCRIPTION

1. Rationale. In the 2008/09 winter, Nepal had no electricity for 16 hours per day. Nepal has been suffering from acute power shortage, particularly in the dry winter season for the past several years. In December 2008, the government of Nepal decided to declare a national energy crisis and to approve the national energy crisis fixation program. To deal with worsening electricity situation in the country, the government announced in 2009 that the Upper Seti Hydropower Project (127 MW) would be one of the most critical three projects for the country as the Project of National Pride. The serious power outages obviously cripple economic activities, social services, and daily life in Nepal. Significant load shedding has resulted in a big decline in the productivity and huge economic loss for the country. Power shortage has also been one of the barriers for extending electrification to rural villages. To respond to the country's highest development priority for improving the energy security, ADB and the government include two separate activities for project preparatory support in the 2010 country program: (i) detailed engineering studies, and (ii) other due diligence and preparatory works, for the anticipated 2012 Upper Seti Hydropower Project. 2. Impact and Outcome. The expected impact from the detailed engineering study (the Study) for the Upper Seti Hydropower Project is increased generation capacity for the country to sustain inclusive economic growth. Additional power generation capacity of 127 MW will help alleviate the power crisis, which has significantly hampered the country's economy and social life. The outcome will be the financing and implementation of the proposed ensuing physical project for Upper Seti hydropower development, based on sufficient project preparation and effective design. The delivery of the follow-on project is expected to promote development of clean hydropower generation for mitigating climate change. 3. Output. The Study will provide consulting services for each of two major engineering design specifications: (i) civil works for geological risk assessments, and (ii) facilities for technical and hydrological risk assessments. During 2006/07, JICA assessed the envisaged physical investment project as feasible while requiring technical investigation to refine the detailed project design. It is essential for hydropower development to clarify the project's uncertain factors and to incorporate preventive actions and risk mitigation measures in the project design, prior to financing decisions and implementation. To minimize project risks, the Study will focus on geological and hydrological assessments through rock tests and hydraulic model simulation to establish engineering design parameters. The results will be included in the design drawings to be attached to the tender documents. 4. Technical Assistance. A separate project preparatory TA (the PPTA) will be attached to the Study mainly to promote project structuring and safeguard requirements as the Study covers only technical aspects. To improve overall project preparedness for complex hydropower development, the PPTA will conduct thorough due diligence and concrete preparatory works mainly for financial structuring, institutional setup, safeguard planning and advance actions, and bid documentation. For the purposes, country partnership strategy programs the PPTA for Preparing Hydropower Development for Energy Crisis, indicating the envisaged loan project for 2012. The PPTA will be financed by a $2.0 million grant from the Japan Fund for Poverty Reduction, funded by the Government of Japan. The PPTA will be implemented concurrently with the Study.

II. A. 5.

IMPLEMENTATION PLANS

Project Readiness Activities The activities for project readiness are summarized below.
Months (2010) 3 4 5 6 May Jun Jul Aug X X X X X X X

Indicative Activities Advance contracting actions Establish project implementation arrangements ADB Board Approval Grant signing Government legal opinion provided Government budget inclusion Grant effectiveness

1 Mar

2 Apr

7 Sep

8 Oct

Who responsible ADB and NEA NEA ADB MOF and ADB MOF MOF and NEA MOF and ADB

ADB = Asian Development Bank, NEA = Nepal Electricity Authority Source: Asian Development Bank assessment

B.

Overall Project Implementation Plan

The Study is expected to start in October 2010 and will be implemented over 24 months.
Period No. Item A Detailed Engineering Study 1 Geological Investigation and Material Test Geological observation in the adits In-situ testing in exploratory adits Geological observation of drilling cores & Geological Report Evaluation of material test results Preparation of geological maps in reservoir critical areas 2 3 Hydraulic Model Test Basic & Detailed Engineering Design (month) 2010 2011 Oct Nov Dec Jan Feb Mar Apr May Jun Jul 1 2 3 4 5 6 7 8 9 10 2012 Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 11 12 13 14 15 16 17 18 19 20 21

Jul 22

Aug Sep Oct 23 24 25

1 4 1 0.5 0.5 12 7

3
B Project Preparatory Technical Assistance 1 Inception Report 2 Studies Hydrology & Sedeiemtology Reservoir Sedimentation Revision of generation scheme Environment and Social Considerations Tender Dicuments Construction Planning and Cost Estimate Preparation of Tender Documents 1 3 2 23 12 3 4 5 Economic & Financial Analysis and Loan Application Report 23

III. A. 6.

PROJECT MANAGEMENT ARRANGEMENTS

Project Stakeholders Roles and Responsibilities The major project stakeholders will be responsible for the following activities. Management Roles and Responsibilities o Implementation of the detailed engineering study and the PPTA o Coordinating the steering committee meetings o Preparation of withdrawal applications o Contract signing of consulting services o Annual audits of the project accounts o Submission of quarterly progress report from the PMU o Rectification of problems hindering the progress of the works which fall within the jurisdiction of one or the other ministry of the government o Suggestion and recommendation of appropriate actions to be taken from the side of the government at the higher level and get clearance o Response to measures to be proposed by any agencies including ADB, contractors and other stakeholders o Occasional visits to the site by the members of the committee to facilitate the work and demonstrate the public and the earnest commitment to the ensuing investment project if necessary o Directives to the other agencies related to the Study and the PPTA to effectively carry out the responsibilities towards the completion of the work o Coordination of all the actions of the government in so far as it relates to the Study and the PPTA o Conducting the steering committee meetings o Rectifying problems that hinders the progress o Coordinate cross-cutting inter-ministrial issues if any o Conducting the official actions on behalf of the government to ADB o Participating the steering committee meetings o Submission of withdrawal application to ADB o Overall coordination and advisory support

Project Stakeholders NEA

Project Steering Committee

MOE

MOF

ADB

MOE = Ministry of Energy, MOF = Ministry of Finance, NEA = Nepal Electricity Authority, PMU = project management unit Source: Asian Development Bank.

B.

Key Persons Involved in Implementation

Executing Agency NEA

Officer's Name: Jivendra Jha Position: Managing Director Telephone No. : 977-4153007 Email address: neamd@mos.com.np Office Address: GPO Box: 10020 Durbar Marg, Kathmandu, Nepal

ADB Division Director Staff Name: Ajay S. Guha Position: Director, Office-in-Charge, Energy Division, South Asia Regional Department Telephone No.: 632-6324444 Email address: aguha@adb.org Staff Name: Kaoru Ogino Position: Senior Energy Specialist, Energy Division, South Asia Regional Department Telephone No.: 632-6326211 Email address.: kogino@adb.org

Mission Leader

ADB = Asian Development Bank, NEA = Nepal Electricity Authority Source: Asian Development Bank and Nepal Electricity Authority

C.

Project Organization Structure

7. NEA will be the executing agency (EA) with overall responsibility for execution of the Study. In case the special project company (SPC) is established, it will be an implementing agency. The day-to-day implementation will be done by NEA senior officers, headed by a fulltime project director, in the Engineering Services Department of NEA in close coordination with the concerned departments/divisions. The project management unit (PMU) is established to coordinate all the activities under the Study and the PPTA. To facilitate any policy and high level actions required by ADB during implementation of the Study, an oversight body will be set up as the Steering Committee comprising the Secretary, Ministry of Energy (the chairman); the Joint Secretary, Ministry of Finance (the member); the Managing Director, NEA (the member); and, General Manager, Engineering Services, NEA (the member); and General Manager, Generation, NEA (the member). The implementation organizational chart is as follows.

Ministry of Energy, Government of Nepal

Asian Development Bank (ADB)

Steering Committee
Project Coordination

Executing Agency Nepal Electricity Authority (NEA)

Deputy Managing director


Finance

General Manager, Engineering Services, NEA


Project Administration

PMU Director, Engineering Services,NEA


Project Monitoring

Environment and Social Studies, NEA


Safeguard

Manager, Enginerring Services,NEA


Project Supervision

ADB = Asian Development Bank, NEA = Nepal Electricity Authority, PMU = project management unit

IV. A.

COSTS AND FINANCING

Detailed Cost Estimates by Expenditure and Financer Total Cost

Item A. Asian Development Bank Financinga 1. Consultants a. Remuneration and Per Diem i. International Consultants (26 person months) ii. Domestic Consultants (19 person months) b. International/Local Travel c. Reports and Communications 2. Hydrological Survey (Hydraulic Model Test)b 3. Geological Survey (In-situ Test)c 4. Vehicle Rentald 5. Miscellaneous Administration and Supporte 6. Contingencies Subtotal (A) B. Government/NEA Financing 1. Office Accommodationf and Transportg 2. Remuneration and Per Diem of Counterpart Staff 3. Othersh Subtotal (B) Total
a b c

748.80 76.00 156.00 10.00 260.00 866.00 24.83 13.50 344.87 2,500.00

20.00 32.00 388.00 450.00 2,950.00

Financed by the Asian Development Fund. Exclusive of taxes and duties imposed within Nepal.

Includes cost of laboratory facilities. Includes plate bearing test (at least 12 blocks), block shear test (at least 6 times), and hydraulic fracturing test (3 times for 2 holes). d Vehicle rentals are justified because of the need for project site reviews, surveys, data gathering, and commuting to the offices. e Includes office support staff and utilities. f Includes office space, installation of 2 telephone lines for fax machine, 2 internet connections, air conditioners in the consultant's office, electricity, and water charges. g Includes transport of counterpart staff. h Includes taxes and duties. Source: Asian Development Bank estimates. Cost breakdown of specific items: Vehicle Rentals The usage of the vehicle rentals is (i) site surveys and (ii) city transport. - Four-wheel-drive vehicles to conduct site surveys: $12,180 (=$2,030 x 1 car x 6 months) - Compact vehicles for city transport: $12,650 (= $1,150 x 1 car x 11 months)

B.

Fund Flow Diagram

The diagram of the document and fund flows is given below:


Fund Flow Document Flow

(Reimbursement Procedures)

ADB
Funding: NRB

(Direct Payment Procedure)

NEA

Contractor(s) (Consultant)

(Reimbursement Procedures)

ADB = Asian Development Bank, NEA = Nepal Electricity Authority, NRB = Nepal Rastra Bank

V. A.

FINANCIAL MANAGEMENT

Financial Management Assessment

8. The financial management assessment was conducted in accordance with ADBs Financial Management and Analysis of Projects. With the assistance of the World Bank, NEA is upgrading and computerizing its system of controls and accounting, including segregation of costs into internal business units, to allow greater transparency for regulatory intervention. The updated financial accounting system will meet the requirements of national and international accounting standards and will include cost and management information systems to support timely business decision making by NEA's managers. Under the loan project approved in

November 2009,1 capacity building will be provided through on-the-job training for NEA staff in financial management, internal control, and internal audit. The proposed project financial management arrangements are considered satisfactory. B. Disbursement

9. The Grant proceeds will be disbursed in accordance with ADBs Loan Disbursement Handbook (2007, as amended from time to time),2 and detailed arrangements agreed upon between the Government, NEA and ADB. Pursuant to ADB's Safeguard Policy Statement (SPS, 2009),3 ADB funds may not be applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. 10. ADBs direct payment and reimbursement procedures will be utilized for the Study. Before the submission of the first withdrawal application, the borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the borrower, together with the authenticated specimen signatures of each authorized person. NEA will be responsible for (i) preparing disbursement projections for each year, (ii) requesting budgetary allocations for counterpart funds, (iii) collecting supporting documents, and (iv) preparing and sending withdrawal applications to ADB. Withdrawal applications and supporting documents will demonstrate, among other things that the goods, and/or services were produced in or from ADB members, and are eligible for ADB financing. 11. The disbursements to the consultant are to follow a lump-sum contract which will link payments to the consultant's outputs in a phased manner. The outputs will include (i) geological assessment reports, (ii) hydrological assessment reports, (iii) detailed design specification reports including necessary design drawings and designing parameters, which will be incorporated into the bidding documents. In addition to the consultant's mobilization, each submission of the draft and final reports will be identified as the timing of payments. C. Accounting

12. NEA will maintain separate project accounts and records by funding source for all expenditures incurred on the Study. Project accounts will follow the International Accounting Standards and the Nepal Accounting Standards.4 D. Auditing

13. NEA will cause the detailed consolidated project accounts to be audited in accordance with the International Accounting Standards as well as the Nepal Accounting Standards by an auditor acceptable to ADB. The audited accounts will be submitted in the English language to ADB within 6 months of the end of the fiscal year by NEA. The government and NEA have been made aware of ADBs policy on delayed submission, and the requirements for satisfactory and acceptable quality of the audited accounts. ADB reserves the right to verify the project's financial accounts to confirm that the share of ADBs financing is used in accordance with ADBs
1

2 3 4

ADB. 2009. Report and Recommendation of the President (RRP) to the Board of Directors on a Proposed Loan and Administration of Grants to Nepal for the Energy Access and Efficiency Improvement Project. Manila Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf Accounting Policies follow Institute of Chartered Accountants of Nepal (ICAN). Specific accounting policies based on the accounting standards issued by ICAN have been adopted by the NEA for accounting and preparation of financial statements.

policies and procedures. VI. PROCUREMENT AND CONSULTING SERVICES

14. The Study will be composed of one consulting services package for detailed engineering study to specify major designing parameters in order to prepare technical specifications including necessary design drawings, which will be incorporated into the bidding documents. A. Advance Contracting and Retroactive Financing

15. To expedite implementation, the government and NEA requested ADB for advance contracting for the recruitment of consultants to be selected by ADB while no request for retroactive financing has been made.5 Advance contracting will be undertaken in conformity with ADBs Guidelines on the Use of Consultants (2010, as amended from time to time). The Government and NEA have been advised that approval of advance contracting does not commit ADB to finance the Study. After the ADB Board approval of the Study, NEA will award the contract after its successful negotiations of the contract with the first ranked firm or consortium of firms. B. Procurement of Goods, Works and Consulting Services

16. A consulting firm or a consortium of firms will be recruited in accordance with ADBs Guidelines on the Use of Consultants, while no procurement contract package will be envisaged under the Study. An estimated 45 person-months (26 international and 19 national) of consulting services are required to produce two major engineering design specifications: (i) civil work upon geological risk assessment, and (ii) facilities upon hydrological risk assessment. A consulting firm or a consortium of firms will be engaged using ADBs Quality- and Cost- Based Selection (QCBS) method with a standard quality to cost ratio of 90:10.6 17. All procurement of goods and works will be undertaken in accordance with ADBs Procurement Guidelines. An 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages and national competitive bidding guidelines is in Section C. All consultants will be recruited according to ADBs Guidelines on the Use of Consultants.7 The terms of reference for all consulting services are detailed in Section D. C. Procurement Plan

18. Except as the Asian Development Bank (ADB) may otherwise agree, there are no other procurement packages except one consulting services.

Basic Data
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ADB will undertake the consultant selection process for the design consultant in place of NEA while NEA will retain its responsibility for contract negotiating and signing and supervising of the consulting services. This is because (i) evaluation of the design consultants for a storage type hydropower project is complex, (ii) NEA has little experience and standard to review such a type of design consulting services, and (iii) the selection process needs to be expedited for the urgent and critical national project. According to ADB's Project Administration Instructions 2.02 Part A, para 7, the detailed engineering design for dam could be an example for the 90 to 10 QCBS weighting. Checklists for actions required to contract consultants by method available in e-Handbook on Project Implementation at: http://www.adb.org/documents/handbooks/project-implementation/

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Project Name Country Executing Agency Grant Amount Grant Number Date of First Procurement Plan Date of This Procurement Plan a.

Detailed Engineering Study for the Upper Seti Hydropower Project Nepal Nepal Electricity Authority (NEA) $2.5 Million 43281 3 Mar 2010 20 July 2010

Process Thresholds, Review, and 18-Month Procurement Plan 1. Project Procurement Thresholds

19. Except as ADB may otherwise agree, the following process thresholds shall apply to procurement of good, works, and consulting services package.
Procurement of Goods, Works, and Consulting Services Procurement Method Threshold Procurement of Goods and Works International Competitive Bidding Works At least $1,000,000 International Competitive Bidding Goods At least $500,000 National Competitive Bidding Works Less than $1,000,000 National Competitive Bidding Goods Less than $500,000 Shopping Works Less than $100,000 Shopping Goods Less than $100,000 Recruitment of Consulting Firms Quality- and Cost-Based Selection At least $200,000 Consultants' Qualifications Selection Less than $200,000 Least-Cost Selection Less than $100,000

2.

ADB Prior or Post Review

20. Except as ADB may otherwise agree, the following prior- or post-review requirements apply to the various procurement and consultant recruitment methods.
Procurement Method Procurement of Goods and Works International Competitive Bidding Works International Competitive Bidding Goods National Competitive Bidding Works National Competitive Bidding Goods Shopping Works Shopping Goods Recruitment of Consultants Quality- and Cost-Based Selection Consultants' Qualifications Selection Least-Cost Selection Individual Consultants Prior or Post Prior Prior Prior Prior Post Post Prior Prior Prior Prior Comments

3.

Consulting Services Contracts Estimated to Cost More Than $100,000

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21. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.
Contract Value ($ million) General Description Asian Development Fund Component Consulting services for detailed engineering $2.5 million study Recruitment Method Advertisement Date (Quarter/Year) International/ National Assignment International and national

Comments Financed by ADB

Firm

Q4 2010

The selection is based on ADBs QCBS method with a standard quality to cost ratio of 90:10.

b. 22.

Indicative List of Packages Required Under the Projects The following table provides an indicative list of all procurement for the Study.
List of Contract Packages Total Estimated Value NRs $ million million 176.3 2.5

Contract Item No. Procurement 1 Consulting services for detailed engineering study

Domestic Preference (Yes/No) No

Procurement Mode QCBS

Sources: Nepal Electricity Authority and Asian Development Bank estimates.

c.

National Competitive Bidding (NCB Annex)

23. National competitive bidding (NCB) shall be in accordance with that described as "by inviting bids and a national level" as set forth in "The Public Procurement Act, 2007" (PPA) and "The Public Procurement Regulations, 2007" (PPR) and subject to the following: (i) The first NCB document for both goods and works procurement shall be reviewed and approved by ADB prior to issue. These will be used for all NCB procurement under the project. The document shall include qualification and evaluation criteria and ADB's right to audit and inspect in accordance with para 1.14 of ADB's Procurement Guidelines. No other criteria other than that described in the bidding document may be used to determine the lowest evaluated responsive bidder and no form of domestic preference may be employed. A positive assessment of a bidder's qualifications to perform a contract will be a pre-requisite to an award. (ii) All qualified ADB member bidders and ADB member produced goods, services and works shall be eligible. Registration and licensing shall be permitted only as a condition of contract award and not participation in bidding. No award may be withdrawn for failure to obtain tax registration; license or fulfill any similar requirement without ADB's prior concurrence. No bidder will be held ineligible based on provision 63 of the PPA without ADB prior concurrence. (iii) Invitations to bid shall be advertised in at least one widely circulated national daily newspaper or freely accessible, nationally-known website allowing a minimum of twenty-eight (28) days for the preparation and submission of bids. Invitations for bids for contracts

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estimated at $500,000 or more for goods and $1,000,000 or more for civil works shall be advertised on ADBs website. No restriction will be placed on the sale of bidding documents. (iv) The approved Standing List of a Procuring Entity prepared in accordance with the law shall only be accepted to supplement an advertised open pre-qualification exercise for the specific contract provided that those on the standing list meet the qualification criteria. (v) Bids shall be opened at a single location immediately after the deadline for submission. Multiple locations for submission and opening are not acceptable. (vi) Government-owned enterprises in Nepal shall be eligible to participate only if they meet the conditions of para 1.8 (c) of the Procurement Guidelines. (vii) Extension of bid validity of more than 4 weeks beyond the original validity shall not be allowed without the prior concurrence of ADB. (viii) Cancellation of bidding and re-bidding shall not be carried out without the prior concurrence of ADB. (ix) Percentage variations from rates fixed by a district rate fixation committee shall not be used for the purpose of evaluating bids. (x) In the event of a conflict between these provisions and the law, these provisions shall prevail. D. Consultant's Terms of Reference

Outline Terms of Reference for Consultants 24. The TA consultant team will include 13 areas of expertise: (i) power sector management, (ii) financial analysis and structuring, (iii) economic analysis and evaluation, (iv) environmental assessment and management, (v) social development and safeguards, (vi) legal and contractual aspects, (vii) communication development, (viii) community development, (ix) hydropower planning, (x) hydrological engineering, (xi) construction planning, (xii) electrical engineering, and (xiii) mechanical engineering. The team leader will be an international expert in power sector management or hydropower planning. The team leader will coordinate the inputs of all the other consultants, provide quality control on all outputs, harmonize proposals and recommendations, and ensure that the consultation process is adequate in terms of stakeholder participation and ownership. The national experts will be supervised by the counterpart international experts. The international experts will supervise the consultant team for the detailed engineering study for the Upper Seti Hydropower Project when necessary. The experts will collaborate with executing and implementing agency staff as well as central and local government officials to enhance their capacity building. The consultants outline terms of reference will include, but not necessarily be limited to, the following tasks. 1. Power Sector Management Specialist (international, 6.5 person-months)

25. The expert will develop the institutional setup and its process, sector road map, and management actions including institutional policy actions to strengthen the hydropower sector and accelerate hydropower development projects. The expert will do the following:

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(i) (ii) (iii)

(iv)

(v) (vi)

(vii)

(viii) (ix) (x)

(xi)

(xii)

Review the feasibility studies prepared by the Japan International Cooperation Agency. Review the existing regulations, policies, and plans for hydropower development; and assess legal regulatory constraints for hydropower development in Nepal. Assess overall mitigation measures to improve the investment climate in hydropower development in Nepal. Incorporate their requirements and impacts in the overall project design. Group potential hydropower projects into generic categories such as domestic or export, run-of-river or storage, or small or large capacity. For each category, evaluate options for ownership, structures, governance, pricing, returns, risks, and incentives of private participation; and recommend options. Assess power sector performance and reforms, key challenges and opportunities, and barriers and risks associated with hydropower projects. Assess options of possible ensuing project structure (e.g., publicprivate partnership. Identify advantages and disadvantages, and propose the best structure for the ensuing investment project. Promote private sector involvement and support strategic communications among stakeholders such as government ministries and agencies, and potential private enterprises for strategic partnerships. Prepare documents that establish the organizational and procedural framework if any. Assess and formulate benefit sharing among the project stakeholders. Develop a strategy for hydropower development, and formulate a time-bound sector road map for policy actions as well as a long-term investment plan. Assess NEA's institutional capacity and governance system to manage hydropower development projects. Prepare ADBs checklists including (a) Peace Filter for Project Design and Implementation of Project, (b) Disaster and Climate Change Risks Screening Tool, and (c) Governance Risk Assessment and Management Plan. Identify priorities for institutional capacity building with timebound action plans. Prepare a problem-tree analysis. Specify indicators to monitor benefits from the ensuing physical project, and establish procedures and provide a benefit monitoring and evaluation framework in terms of ADBs Guidelines for Benefit Monitoring and Evaluation and a design and monitoring framework including impacts, outcomes, outputs, inputs, and activities and milestones. Prepare and disseminate the project findings on the project development process for knowledge management, in a final report at the end of the TA. Financial Specialist (international, 4.0 person-months; national, 2.0 personmonths)

2.

26. The experts will analyze project financial viability and coordinate the financing structuring. The experts will review NEA's financial management using ADBs Financial Management Guidelines (2005) and Financial Due Diligence Methodology Note (2009) as guides. The international expert will supervise the national expert. In accordance with ADBs Financial Management and Analysis of Projects, the experts will do the following: (i) Review the feasibility studies and analyze the financial viability of the ensuing physical project. Identify all risks for revenues and costs based on sensitivity analyses, and evaluate financial internal rates of return. Include risk mitigation and risk transfer plans as necessary. Evaluate the financial attractiveness and availability of the ADB Future Carbon Fund and/or other similar products in

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(ii)

(iii)

(iv)

(v)

(vi)

collaboration with ADB's technical support facility for the Clean Development Mechanism. Help engineers prepare the project cost estimates, including physical and price contingencies, and interest and charges during construction (including other financing charges, if any). Promote financial structuring with the public and private development partners. Simulate and evaluate optimal financial structuring and modeling in terms of profits, costs, and risks through all measures such as equity, loans, or an insurance (guarantee) mechanism from private investors and lenders, export credit agencies, multilateral development banks, and bilateral donors. Incorporate a risk mitigation mechanism or a sufficient security package as applicable. Help the executing and implementing agencies arrange counterpart funds. Review and assess the executing and implementing agencies financial management of corporate planning and budgetary control, financial and management accounting, cost accounting, internal control and audit system, and data processing; and assess capacity-building needs (refer to ADB's financial management guidelines). Develop financial projection models comprising financial statements and financial ratios for the next 10 years to assess the project and its institutional financial viability and impacts using key performance indicators. Help the community development specialist assess financial implications for social action programs, including benefit-sharing arrangements with affected communities. Economist (international, 1.0 person-months; national, 2.0 person-months)

3.

27. In accordance with ADB guidelines for the Guidance of Economic Analysis and the Financial Management and Analysis of Projects, the experts will analyze demand, supply, and economic viability; and assess tariff pricing. They will assess the governments fiscal condition and impacts on the ensuing physical project, and undertake the following: (i) Review the feasibility studies and analyze the economic viability of the ensuing physical project. Identify all economic costs and benefits based on sensitivity analyses and evaluate economic internal rates of return. Analyze determinants and elasticity of demand for electricity, and quantify economic benefits estimated on willingness-to-pay data (demand and affordability) from the socioeconomic survey. Analyze forecasted load growth and the sectors function-wise revenues and costs in relation to tariffs, cost recovery, and cross-subsidy among customer groups and in the power sectors value-chain process. Determine future sustainable tariffs to support the ensuing loan project. Review and assess the impacts of the governments fiscal position and debt sustainability on nonconcessional term loans if applicable. Simulate the governments revenues (e.g., taxes, dividends, and royalties), expenditures, and borrowing capacity for various scenarios for the financing plans, using a debt sustainability model that is consistent with International Development Association and International Monetary Fund guidelines. Identify stakeholders and conduct a distribution analysis in accordance with ADBs Handbook for Integrating Poverty Impact in Economic Analysis for

(ii)

(iii)

(iv)

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(v)

Projects (2001). Calculate the poverty impact ratio and undertake risk and sensitivity analyses. Help the community development specialist assess economic implications for social action programs. Environment Specialist (international, 3.5 person-months; national, 4.0 personmonths)

4.

28. In accordance with relevant policies and guidelines of the government and ADB, in particular, the ADB Safeguard Policy Statement and its guidelines, the experts will do the following: (i) Review the feasibility studies and available environmental impact assessments (EIA) reports. Interact with the consultant conducting the detailed engineering study and assess a design suitable for the environment and climate change through hydraulic model tests. Improve and report on initial environmental examinations (IEE) and/or EIA. Pay special attention to safety, water quality, cultural and ecological impacts to set up the baseline information for monitoring. Conduct additional surveys if applicable. Prepare an environmental management plan (EMP) for the project-affected area and the river catchments including upstream and downstream areas. Include a monitoring program (indicators, frequency, and reporting), and recommend mitigating measures, and budgets and institutional arrangements to implement them. Assess environmental benefits. Prepare livelihood restoration programs in the environmental management plan with the community development specialist. Coordinate with ADB's technical facility for the Clean Development Mechanism to prepare the project design document for its application. Assess environmental safety of the relocation sites for physically displaced persons. Assess and incorporate design and management to adapt to climate change (e.g., riverbank protection and early warning systems) and improve safety measures. Assess any climate change risks (e.g., flash floods and glacial lake outburst floods) and their mitigation measures if any. Document and organize public consultations at least once in representative project sites, and invite local stakeholders. In case of environment category A, carry out at least two public consultations (once during the early stages, and once when the draft EIA report is available and before loan appraisal). Support communications with stakeholders including donors, civil society, NGOs, and media with a help desk function, in collaboration with the communication development specialist. Social Development Specialist (international, 4.5 person-months; national, 6.0 person-months)

(ii)

(iii) (iv) (v)

(vi)

(vii)

5.

29. The experts will prepare documents for a resettlement plan and indigenous peoples development plan, with special attention to vulnerable people including women, children, and the poor and socially excluded. In accordance with the ADB Safeguard Policy Statement and its relevant guidelines, the experts will do the following: (i) Review the feasibility studies and design the ensuing physical project to minimize resettlement effects, in collaboration with engineers and environmental

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(ii)

(iii)

(iv)

(v)

(vi)

specialists. Analyze alternatives to minimize adverse impacts and maximize positive social effects. Compare selected routes with rejected routes and locations; map the impact corridors; identify stakeholders and their involvement, through further consultation in identifying the alternatives. Identify permanent and temporary socioeconomic impacts arising from land acquisition, changes in land use, and restrictions of access, due to changes of river flow and project facilities. Include measures to minimize the number of affected land users within the river catchments including upstream and downstream areas. Prepare a resettlement plan, and an indigenous peoples development plan if required, with full participation of stakeholders. The plans should be based on (a) socioeconomic profiles (including local ethnic minority profiles) of the project-affected communities, including resettlement sites; (b) a full census and inventory of lost assets (permanent or a temporary), indicating the scope and magnitude of likely resettlement effects, and list likely losses of households, agricultural lands, business and income opportunities, as well as affected communal assets and public buildings; (c) an entitlement matrix, listing all likely effects, such as permanent and or temporary land acquisition, and a study to determine the replacement costs of all categories of losses based on the asset valuation process, with particular attention to vulnerable groups including indigenous peoples, women, children, and the poor and socially excluded; (d) exact cost estimates and clear budgets for land acquisition and resettlement costs with a specific sourcing and approval process; (e) an implementation schedule consistent with all the resettlement plan requirements, making sure that all compensation is carried out before the civil works (the compensation framework should be agreed with affected people in advance, at least during TA implementation); (f) compensation determination committees with affected people and government officials (particularly in local district offices); (g) a grievance mechanism and appeal procedures and mechanisms for disclosing the resettlement plan to affected persons; (h) social action programs; and (i) a monitoring framework including monitoring indicators to ensure safeguard implementation. Prepare and implement public consultations and disclosure to ensure that the executing and implementing agencies have consulted all affected people and obtained their views about the ensuing project and resettlement effects, entitlements, schedule, and options for compensation and assistance in a form and language they can understand. Review activities for local ethnic minorities and the poor in implementing other hydropower projects; and assess lessons, issues, and action plans. Develop an independent monitoring mechanism and indicators for resettlement, and ethnic minority-related activities. Set up the resettlement-related committees (e.g., the compensation determination and resettlement coordination committees, resettlement steering committee, grievance redress committee) and develop an agreement on the compensation framework including compensation packages, compensation rates, replacement cost, resettlement assistance, and asset verification.

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(vii)

(viii)

(ix)

(x)

(xi)

(xii)

(xiii)

(xiv) 6.

Develop detailed implementation plans for land purchase and acquisition, payment of compensation, livelihood restoration programs, and community development plans. Assess the capacity of the executing and implementing agencies to plan, manage, implement, finance, and monitor, and prepare capacity-building measures and training workshops for stakeholders. Collect willingness-to-pay data used for economic analysis to estimate benefits in conducting the socioeconomic survey. Compile and analyze the data in the database using global positioning system (GPS) and geographic information system (GIS). Develop a checklist for a stakeholder analysis. Prepare a summary poverty reduction and social strategy, including a social analysis, social impact assessment, and gender development and other relevant documents according to ADB guidelines and format. Social and gender analysis includes pro-poor design, benefits, and other mitigation measures for social risks such as sexually transmitted infections, labor, affordability, or human trafficking. In consultation with local communities and government, and with the community development specialist, develop a project-specific social and gender action plan including rehabilitation of rural infrastructure, livelihood-related activities, and any specific training or awareness programs for local communities and vulnerable people such as women and the socially excluded. Include the cost and the checklist for monitoring the baseline data in the plan. Coordinate social action programs and community development plans, using a participatory approach with the community development specialist. Explore partnerships with host communities, grassroots NGOs, and civil society for planning and implementation. Assess measures to ensure compliance with national labor laws (e.g., minimum wages, equal pay, safe working conditions, or social security contributions) and international core labor standards (e.g., nondiscrimination, prohibition of child labor), to improve employment opportunities for vulnerable persons. Consult with labor unions or any beneficiary groups as needed. Legal and Contractual Specialist (international, 1.5 person-months)

30. The expert will prepare and/or review any legal and contractual documents. The expert will do the following: (i) (ii) Assess legal regulatory constraints for hydropower development in Nepal. Support the institutional setup for the ensuing physical project (e.g., articles of incorporation of a special project company) and publicprivate partnership arrangements if applicable. Support any commercial arrangements (e.g., power purchase agreement) if applicable. Support the contractual process with stakeholders in tendering, procurement, negotiation, and financial arrangements and agreements as necessary. Communication Development Specialist (international, 3.0 person-months; national, 5.0 person-months)

(iii) (iv)

7.

31. In collaboration with the social development specialists, the environment specialists, and the community development specialist, the expert will do the following:

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(i)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

(ix)

(x)

Develop safeguard enhancement programs to improve and facilitate public awareness among affected people. Focus on separate consultation programs designed for each group, gender, peoples, and social classes; eliminating barriers to their participation. Provide capacity development to the executing and implementing agencies to facilitate corrective actions of safeguard measures and planning. Assess success and failure of past communication with stakeholders or during ongoing similar projects in Nepal and other countries, and identify lessons. Organize local facilitators to enhance effective communication with affected people including political leaders, women, children, school teachers, and socially vulnerable groups. Lead and support constructive discussions or negotiations on safeguard issues including resettlement procedures and community development plans, among internal stakeholders including affected people, executing and implementing agencies, and central and local government officials. Develop effective consultation materials (in local language if necessary) to support a participatory approach to meet the expectations of each stakeholder group on resettlement procedures and community development plans. Lead and support effective communications on safeguard and other social issues with external stakeholders including academia and civil society, NGOs, media, and other development partners. Conduct effective measures to disseminate factual information to each of the stakeholders, to sort out any negative reactions or concerns. Establish an information help desk with executing and implementing agencies, and provide responses and solutions to questions on safeguard documents raised by affected people to the executing and implementing agencies and the government. Organize a single association that represents affected people for each of the project areas, by preparing an article of association to improve and coordinate an effective and constructive communication and negotiation framework. Help the association or affected people classify and summarize their demands to the executing and implementing agencies and/or central and local governments to facilitate communications among the stakeholders. Organize and coordinate discussion forums and stakeholder meetings among the executing and implementing agencies, affected people, and other stakeholders. Community Development Specialist (national, 4.0 person-months)

8.

32. In collaboration with the environment specialists, the social development specialists, and the communication development specialist, the expert will do the following: (i) Review the feasibility studies and assess social action programs for rural electrification, irrigation, health and sanitation, watershed management, education, vocational training, woman and vulnerable people development in affected communities including the host communities. Focus on sustainable livelihood programs for affected areas. Provide consultations on suitable social action programs with the affected people, local government officials, and resettlement host communities, along with the resettlement plan and indigenous people development plan if required. Take a participatory approach, and explore partnerships with host communities, grassroots NGOs, and civil society for planning and implementation.

(ii)

19

(iii)

(iv) (v) (vi) (vii) (viii)

Conduct detailed surveys to assess the exact cost estimate for each social action program. Compile and analyze the data collected (e.g., by ethnic group, sex, other social factors) in the database using GPS and GIS if applicable. Prepare detailed implementation plans (e.g., schedule and implementation mechanism, procurement, consulting services) for the social action programs. Assess financial and economic impacts in collaboration with the financial specialists and economists. Prepare and implement a public consultation and disclosure plan in a form and language community members can understand. Set up a monitoring framework including monitoring indicators for the implementation plan, based on the data collected. Assess the capacity of the executing and implementing agencies to plan, manage, implement, finance, monitor, and prepare capacity-building measures and training workshops for stakeholders. Hydropower Planning Engineer (international, 6.5 person-months; national, 6.0 person-months)

9.

33. The experts will coordinate all outputs from other engineers in the project team and consultants conducting the detailed engineering study. In collaboration with other experts including the power sector management specialist, the financial specialist, the environmental specialist, and social development specialist, the experts will do the following: (i) (ii) (iii) Review the feasibility studies from the viewpoint of overall engineering aspects in accordance with international best practices. Review past and ongoing hydropower projects in terms of engineering design and cost. Assess the cost compared with other projects in neighboring countries. Review the reservoir sedimentation study carried out by the hydrological engineer to identify the least-cost solution with minimum environmental impacts. Reflect the optimal design in the cost estimates and tender documents. Help plan a hydraulic model test on sediment flushing facilities that will be conducted by the consultant team for the detailed engineering study (in particular hydraulic model test experts and civil design engineers (head works). Review and supervise activities of the counterpart specialists in the consulting team of the detailed engineering study, if any. Prepare any disaster risk management plan including local flood control and early warning systems, with the hydrological engineer. Revise and finalize a generation scheme based on the reservoir sedimentation study with the hydrological engineer. Finalize the overall cost estimates and implementation schedule. Plan design works for the ensuing physical project with the consultant team of the detailed engineering study, and supervise all the consultants' activities and outputs for the overall design works, if any. Assess advantages and disadvantages of conventional construction contracts and engineering, procurement, and construction (EPC) contracts scheme; and finalize the suitable scheme for procurement and implementation. Prepare general and technical parts of civil works in the tender documents in the procurement process, incorporating clear evaluation criteria. Prepare tender documents for the construction works in accordance with the ADB Procurement Guidelines for components financed by ADB. Coordinate with other development partners with other procurement guidelines.

(iv)

(v) (vi) (vii) (viii)

(ix)

(x) (xi)

20

(xii)

Coordinate with other experts concerned to prepare the tender documents. Support the executing and implementing agencies and/or ADB in evaluating the bids if applicable. Hydrological Engineer (international, 4.5 person-months)

10.

34. The expert will coordinate activities and outputs from other engineers in the project team and consultants conducting the detailed engineering study. The expert will do the following: (i) (ii) (iii) (iv) Review and simulate hydrological and sedimentological data in the feasibility studies. Review and finalize a suitable option from hydrological assessment reports updated from the consultant team of the detailed engineering study. Revise inflow data at the dam site, if necessary, to be used for revision of the generation scheme. Prepare input data used for the reservoir sedimentation simulation, and plan the simulation under discussion with the hydropower planning engineers to optimize the sediment flushing operation. Prepare a final assessment on reservoir sedimentation and sediment flushing operation. Prepare any disaster risk management plan including local flood control. Revise the generation scheme based on the reservoir sedimentation study and recalculate the installed capacity and annual generating energy for the project in coordination with hydropower planning engineers. Construction Planning Engineer (international, 4.5 person-months; national, 6.0 person-months)

(v) (vi) (vii)

11.

35. The experts will coordinate activities and outputs from other project team engineers and consultants conducting the detailed engineering study. The experts will do the following: (i) (ii) Review the feasibility studies and update data necessary to estimate unit prices of construction costs for the civil works based on the latest market prices. Examine construction methods for civil works in consideration of the site conditions, and geological and geotechnical assessments from the detailed engineering study. Incorporate risks and mitigation measures. Prepare a construction schedule for civil works. Coordinate between civil works and other works with relevant engineers in the consultant team if any, and prepare overall construction schedule compiling a schedule for equipment and transmission line works. Finalize construction optimal least-cost estimates of civil works based on the construction methods and schedule. Assess the executing and implementing agencies implementation capacity for construction and operation, and recommend any mitigation measures to improve their management capacity (e.g., any implementation support, EPC contracts, operation and maintenance contracts). Compile the cost of all works and environmental and social safeguards, and social action programs; and estimate the project cost including administration end engineering fee, management fee, and contingency.

(iii) (iv)

(v) (vi)

(vii)

21

(viii)

(ix)

Help the hydropower planning engineers prepare general and technical parts of civil works in the tender documents for the procurement process, incorporating clear evaluation criteria. Coordinate with other experts concerned to prepare all the tender documents. Support the executing and implementing agencies and/or ADB evaluate the bids if applicable. Electrical Engineer (international, 4.5 person-months)

12.

36. The expert will coordinate activities and outputs from other project team engineers and consultants conducting the detailed engineering study. The expert will do the following: (i) Review the feasibility studies and finalize the design of the electrical equipment and transmission lines prepared by the consultant team for the detailed engineering study. Incorporate risks and mitigation measures. Examine methods of electric equipment installation works, considering the site conditions. Prepare the implementation schedule for installation works of electric equipment and transmission lines. Prepare the technical section for the electrical equipment and transmission lines in the tender documents. Help the hydropower planning engineers prepare a schedule for design, transportation, and installation works for the electrical equipment and transmission lines. Finalize construction cost estimates for electrical equipment and transmission lines based on the construction schedule. Coordinate with other experts concerned to prepare all the tender documents. Support the executing and implementing agencies and/or ADB evaluate the bids if applicable. Mechanical Engineer (international, 4.0 person-months)

(ii) (iii) (iv) (v)

(vi) (vii)

13.

37. The expert will coordinate activities and outputs from other engineers in the project team and consultants conducting the detailed engineering study. The expert will do the following: (i) Review the feasibility studies and finalize the design for the mechanical equipment prepared by the consultant team for the detailed engineering study. Incorporate risks and mitigation measures. Examine methods of mechanical equipment installation works, considering the site conditions. Prepare the implementation schedule for design, transportation, and installation works of mechanical equipment. Help the hydropower planning engineers prepare technical sections for the mechanical equipment in the tender documents. Finalize optimal construction cost estimates of mechanical equipment based on the construction schedule. Coordinate with other experts concerned to prepare all the tender documents. Support the executing and implementing agencies and/or ADB evaluate the bids if applicable.

(ii) (iii) (iv) (v) (vi)

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VII.

SAFEGUARDS

38. Because of the consulting services only, the Study expects no negative impacts on environment, resettlement, and indigenous people; safeguard categories are "C". VIII. GENDER AND SOCIAL ANALYSIS

39. Because of the consulting services only, the Study expects no negative impacts on gender and social impacts. IX. A. 40. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION

Project Design and Monitoring Framework The design and monitoring framework is as follows:
Performance Targets and Indicators with Baselines Data Sources and Reporting Mechanisms

Design Summary Impact Increased generation capacity for the country to sustain inclusive economic growth

Assumptions and Risks Assumptions Governments high policy priority for project development Adequate financing arrangements and timely implementation for the proposed ensuing project Continued upgrades for transmission and distribution network for reliable power supply Continued capacity building of NEA for project implementation Risks Exogenous economic and political shocks Undue security situation

The winter power shortage alleviated by 2019 (from load shedding of 16 hours in 2008) Carbon dioxide emissions reduced by at least 400,000 tons per year by 2019

NEA annual reports

UNFCCC registry

Outcome The ensuing physical project for the Upper Seti hydropower development financed and implemented A least-cost project design adopted by ADB, the government, and NEA by 2012 Financial closure by 2012 Loan agreements Construction contracts United Nations Framework Convention

Assumptions Government commitment to the proposed ensuing project Adequate financing sources including

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Design Summary

Performance Targets and Indicators with Baselines Validated project design document for Clean Development Mechanism

Data Sources and Reporting Mechanisms on Climate Change registry

Assumptions and Risks cofinancing and counterpart funding by the government and NEA

Outputs 1. Detailed engineering studies (DES): Design specification and drawings for civil works (dam and waterways) Accurate geological evaluation, including appropriate mitigation measures from at least 25 boring tests completed by NEA Optimal hydrological assessment including appropriate mitigation measures from hydraulic model tests by 2012 Design reports including drawings and bills of quantity agreed by 2012 Project progress reports

Assumptions Satisfactory consultant performance

Back-to-office reports of Availability of engineering data investigated by NEA ADB review missions Minutes of tripartite meetings Appropriate and timely stakeholder consultation and coordination Timely environmental and social safeguard clearance process Risks Consultants lack adequate experience Lack of coordination between consultants who conduct detailed engineering studies and PPTA

Design specification and drawings for facilities (powerhouse and transmission)

Consultant reports Tender documents Bid evaluation reports

Detailed engineering design 2. Attached PPTA: Financial and economic assessment

Financial and economic viability assessment by 2012 Financial structuring including cofinancing with public and private cofinancers by 2012

Institutional arrangements

Setup of project management unit or separate special purpose vehicle by 2012 Publicprivate partnership setup and contractual arrangements (e.g., institutional setup, power purchase) if applicable, by 2012

Environment and social safeguard assessment and feasible planning for implementation

Environment assessment agreed by 2012 Environment

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Design Summary

Performance Targets and Indicators with Baselines management plan agreed by 2012 Project design document to apply for Clean Development Mechanism Resettlement assessment and plan agreed by 2012 Indigenous peoples assessment and development plan agreed by 2012 if appropriate Poverty and gender assessment and related action plans agreed by 2012 Community development plan agreed by 2012 Asset valuation for compensation and compensation rates agreed by 2012

Data Sources and Reporting Mechanisms

Assumptions and Risks

Sector assessment

Sector development road map for generation Policy and institutional development road map

Tender documents

Tender documents (for civil works and electromechanical works, including turbines and transmission lines) floated and evaluated by 2012 Final cost estimates and implementation schedule agreed by 2012

Activities with Milestones 1. Submission of inception reports to ADB and executing and implementing agencies (1 month after assignment) 1.1. Assessment of issues and strategy (DES, PPTA) 1.2. Initial assessment of environmental and social survey (PPTA)

Inputs Grant from ADF and JFPRa ADB: $4.5 million Item Amount ($ million)

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1.3. Adjusted work plan and schedule (DES, PPTA) 2. Submission of first midterm report to ADB and executing and implementing agencies (7 months after assignment) 2.1. Evaluation of material test results (DES) 2.2. Interim assessment of hydraulic model test (DES) 2.3. Initial assessment of cost estimates (PPTA) 2.4. Financial structuring options (PPTA) 2.5. Institutional action plans (PPTA) 2.6. Initial social analysis (PPTA) 2.7. Asset valuation profiles (PPTA) 2.8. Final environment management plan (PPTA) 3. Submission of second midterm report to ADB and executing and implementing agencies (15 months after assignment) 3.1. Final geological assessment (DES) 3.2. Final hydrological assessment (DES) 3.3. Basic detailed engineering design (DES) 3.4. Design for sedimentology (PPTA) 3.5. Design of generation scheme (PPTA) 3.6. Final assessment of cost estimates (PPTA) 3.7. Interim financial structuring plan and commercial arrangement (PPTA) 3.8. Financial and economic assessments (PPTA) 3.9. Setup of compensation related committees (PPTA) 3.10. Social and poverty action plan (PPTA) 3.11. Social action programs and community development plans (PPTA) 4. Submission of draft final report to ADB and executing and implementing agencies (22 months after assignment) 4.1. Final implementation schedule (PPTA) 4.2. Financial and economic viability assessments (PPTA) 4.3. Final financial plans (PPTA) 4.4. Social and environmental clearances (PPTA) 4.5. Agreed compensation framework (PPTA) 4.6. Final design specification and drawings (DES) 4.7. Bid documents (PPTA) 5. Submission of final report to ADB and executing and implementing agencies (24 months after assignment)

Detailed engineering study PPTA for project structuring


a

2.5 2.0

JFPR is funded by the Government of Japan and administered by ADB.

Government: $0.81 million Item Detailed engineering study PPTA for project structuring Amount ($ million) 0.45 0.36

ADB = Asian Development Bank, CDM = clean development mechanism, DES = detailed engineering study, EA = executing agency, IA = implementing agency, JFPR = the Japan Fund for Poverty Reduction, NEA = Nepal Electricity Authority, PPTA = project preparatory technical assistance, PPP = public private partnership, UNFCCC = United Nations Framework Convention on Climate Change. Source: Asian Development Bank

B.

Monitoring

41. Project performance monitoring. ADB, the government and NEA will conduct semiannual reviews throughout the implementation of the Study. The review will monitor the (i) project output quality, (ii) implementation arrangements, (iii) implementation progress, and (iv) disbursements.

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42. Compliance monitoring: In addition to the standard assurances, compliance with the specific assurances will be monitored. They will be based on the Grant Agreement and Project Agreement as well as include Consulting Services, Procurement and Disbursement Guidelines. All consultants will be recruited according to ADB's Guidelines on the Use of Consultants (2010, as amended from time to time). The procurement of goods, related services, and works financed by the grant will follow procedures outlined in the ADB's Procurement Guidelines (2010 as amended from time to time). The grant proceeds will be disbursed in accordance with ADB's Loan Disbursement Handbook (2007, as amended from time to time), and Technical Assistance Disbursement Handbook (2010, as amended from time to time). C. Evaluation

43. NEA will submit a technical completion report for the Study to ADB within 6 months of the study completion if necessary.8 D. Reporting

44. NEA will provide ADB with (i) quarterly progress reports in a format consistent with ADB's project performance reporting system; (ii) consolidated annual reports including (a) progress achieved by output as measured through the indicator's performance targets, (b) key implementation issues and solutions; (c) updated procurement plan and (d) updated implementation plan for next 12 months; and (iii) a technical assistance completion report within 6 months of physical completion of the Study. To ensure projects continue to be both viable and sustainable, project accounts, together with the associated auditor's report, should be adequately reviewed. These reports will provide information necessary to update ADB's project performance reporting system. 9 E. Stakeholder Communication Strategy

45. NEA will cause the consultant to submit the quarterly progress reports and the deliverables for geological and hydrological assessments and detailed design specification including necessary design drawings and designing parameters, which will be incorporated into the bidding documents. The disclosure of the information will be based on the ADB Public Communication Policy.10 X. ANTICORRUPTION POLICY

46. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the Study.11 All contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the executing agency and all Project contractors, suppliers, consultants and other service providers. Individuals/entities on ADBs anticorruption debarment list are ineligible to participate in ADBfinanced activity and may not be awarded any contracts under the Study.12

8 9

The completion report format available at: http://www.adb.org/Documents/Manuals/PAI/PAI-608.pdf ADB's project performance reporting system is available at: http://www.adb.org/Documents/Slideshows/PPMS/default.asp?p=evaltool 10 Available at: http://www.adb.org/PCP-Review/keyfeatures.asp 11 Available at: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf 12 ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp

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47. To support these efforts, relevant provisions are included in the grant agreement and the bidding documents for the Study. XI. ACCOUNTABILITY MECHANISM

48. People who are, or may in the future be, adversely affected by the project may address complaints to ADB, or request the review of ADB's compliance under the Accountability Mechanism.13 XII. RECORD OF PAM CHANGES

49. All revisions/updates during course of implementation will be retained in this Section to provide a chronological history of changes to implemented arrangements recorded in the PAM after the ADB approval for the Study.

13

For further information see: http://compliance.adb.org/.

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