1

Project Number: 44431 July 2011

INDIA: Gujarat Solar Power Transmission Project

Project Administration Manual

Contents I. PROJECT DESCRIPTION 5

A. Impact and Outcome 5 B. Outputs 6

II. IMPLEMENTATION PLANS 6 A. Project Readiness Activities 6 B. Overall Project Implementation Plan 7

III. PROJECT MANAGEMENT ARRANGEMENTS 8 A. Project Implementation Organizations – Roles and Responsibilities 8 B. Key Persons Involved in Implementation 9 C. Project Organization Structure 10

IV. COSTS AND FINANCING 11 A. Detailed Cost Estimate by Expenditure Category 11 B. Detailed Cost Estimates by Financier 12 C. Allocation and Withdrawal of Loan Proceeds 13 D. Detailed Cost Estimates by Year 14 E. Contract and Disbursement S-curve 15 F. Fund Flow Diagram 15

V. FINANCIAL MANAGEMENT 16 A. Financial Management Assessment 16 B. Disbursement 16 C. Accounting 17 D. Auditing 17

VI. PROCUREMENT 17 A. Advance Contracting and Retroactive Financing 17 B. Procurement of Goods, Works 18 C. Procurement Plan 18

BASIC DATA 18 VII. SAFEGUARDS 19 VIII. GENDER AND SOCIAL DIMENSIONS 20 IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 22

A. Project Design and Monitoring Framework 22 B. Monitoring 24 C. Evaluation 24 D. Reporting 25 E. Stakeholder Communication Strategy 25

X. ANTICORRUPTION POLICY 26 XI. ACCOUNTABILITY MECHANISM 26 XII. RECORD OF PAM CHANGES 26

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 includes references to all available templates and instructions either through linkages to relevant URLs or directly incorporated in the PAM. The executing and implementing agencies are wholly responsible for the implementation of ADB financed projects, as agreed jointly between the borrower and ADB, and in accordance with Government and ADB’s policies and procedures. ADB staff is responsible to support implementation including compliance by executing and implementing agencies of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures. At Loan Negotiations the borrower and ADB have agreed to the PAM to ensure consistency with the Loan agreement. In the event of any discrepancy or contradiction between the PAM and the Loan Agreement, the provisions of the Loan 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 = Asian Development Bank AFS = audited financial statements ASEI = Asia Solar Energy Initiative CSP = Concentrated solar power DEA = Department of Economic Affairs, Ministry of Finance, India

DFID/UK = Department for International Development of the Government of the United Kingdom

EA = executing agency EMP = environmental management plan GEB = Gujarat Electricity Board GERC = Gujarat Electricity Regulatory Commission GETCO = Gujarat Energy Transmission Corporation Limited GOG = Government of Gujarat GOR = Government of Rajasthan GOI = Government of India GPCL = Gujarat Power Corporation Limited GUVNL = Gujarat Urja Vikas Nigam Limited ICB = international competitive bidding IEE = initial environmental examination JNNSM = Jawaharlal Nehru National Solar Mission PAM = project administration manual PCR = project completion report PDPU = Pandit Deendayal Petroleum University PMU = project management unit PPMS = project performance management system PV = Photovoltaic ROW = Right of Way RP = resettlement plan RRP = report and recommendation of the President to the Board SPS = Safeguard Policy Statement TA = technical assistance

5

I. PROJECT DESCRIPTION

1. In May 2010, ADB announced its Asia Solar Energy Initiative (ASEI) to catalyze 3,000 megawatts of solar power generation projects from 2010 to 2013 with the broad objectives to (i) keep the region abreast with technological developments in solar energy, (ii) identify and develop large capacity solar projects, and (iii) design incentive mechanisms and innovative financing mechanisms for rapid diffusion of solar technology for power generation, both grid connected systems as well as distributed stand-alone generation systems. Out of the 3,000 megawatts, at least 500 MW is expected to be developed by India with ADB’s support. 2. India is bestowed with solar irradiation ranging from 4-7 kWh/square meter/day across the country and certain regions namely the western and southern have high solar incidence. With rapidly growing electricity demand, availability of land and increasing reliance on imported sources of fossil fuel, India is perceived to have a large potential for solar energy development. Cognizant of it, the government of India (GOI) launched the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010. The targets of JNNSM are, among others, to (i) create an enabling policy framework for the deployment of 20,000 MW of solar power by 2022; (ii) ramp up the capacity of grid-connected solar power generation to 1,000 MW within 3 years; an additional 3,000 MW by 2017 through the mandatory use of the renewable purchase obligation by utilities backed with a preferential tariff; (iii) deploy 20 million solar lighting systems for rural areas by 2022; and (iv) Create favorable conditions for solar manufacturing capability, particularly solar thermal for indigenous production and market leadership. 3. In this regard, JNNSM envisages setting up utility scale solar power generation plants through the promotion and establishment of solar parks with dedicated infrastructure to setup utility scale plants by state governments, among others, the governments of Gujarat (GOG) and Rajasthan (GOR). The development of solar parks will streamline the project development timeline by letting government agencies undertake land acquisition and necessary permits, and provide dedicated common infrastructure for setting up solar power generation plants, that is expected to reduce the project development cost. This approach will facilitate the accelerated installation of solar power generation capacity while reducing costs by addressing issues faced by stand alone projects. The 2,500 hectares Charanka solar park located in Patan district of Gujarat will site over 500 MW of both solar photovoltaic (PV) and concentrated solar power (CSP) plants. Common infrastructure for the solar park include site preparation and leveling, power evacuation, availability of water, access roads, security and services. Gujarat Power Corporation Limited (GPCL) is the nodal agency for developing the solar park while Gujarat Energy Transmission Corporation Limited (GETCO) is mandated to develop evacuation infrastructure by Gujarat Electricity Regulatory Commission (GERC). The proposed Gujarat Solar Power Transmission Project (the Project) will develop the transmission infrastructure for evacuation of power in a reliable manner from the solar power generation plants to be located in the solar park.

A. Impact and Outcome

4. The project's impact will be large-scale development of reliable solar power projects in a cost-effective manner in India. The project outcome will be the development of reliable solar power transmission infrastructure for the successful operation of the solar park.

6

B. Outputs

5. The physical outputs will be the procurement, installation, and commissioning of (i) one 400/220/66 kilovolt (kV) substation comprising of two 315 megavolt amperes (MVA) transformers and one 125 MVAR bus reactor, (ii) eight 100 MVA transformers at 220/66 kV voltage level, (iii) a 66 kV underground cable grid of about 137 kilometers (km) within the solar park, (iv) about 110 km of 400 kV double circuit transmission line from the solar park to Sankhari, Patan District, Gujarat, (v) about 109 km of 220 kV double circuit transmission line from the solar park to Jangral,Patan District, Gujarat and (vi) two feeder bays at the substations located at Sankhari and Jangral, Patan District, Gujarat. Nonphysical investment outputs include vocational training for skilled employment for up to 300 people with at least 30% women, and energy-based livelihood enhancement training to100 women.

II. IMPLEMENTATION PLANS

A. Project Readiness Activities

Months Indicative Activities 1 2 3 4 5 6 Who responsible June

2011

Advance contracting actions X GETCO/GOG

Retroactive financing actions X GETCO/GOG /ADB

Establish project implementation arrangements X GETCO/GOG

ADB Board approval X ADB Loan signing X ADB/DEA Government legal opinion provided X DEA Government budget inclusion X GOG

Loan effectiveness X GETCO/GOG /DEA/ADB

7

B. Overall Project Implementation Plan

Project Formulation Finalization of Scheme

Preparation of Feasibility ReportImplementation 66/220 kV pooling station, 220kV feeder bays at Jangral s/s, 220kV D/C transmission line Tendering and Award

Preparatory works and Mobilization

Civil works, supply and erection of Equipments

Testing and Commissioning 220/400 kV pooling station, 400kV feeder bays at Sankhari s/s, 400 kV D/C transmission line Tendering and Award

Preparatory works and Mobilization

Civil works, supply and erection of Equipments

Testing and Commissioning

66kV transmission cables within the solar park

Tendering and Award

Preparatory works and Mobilization

Civil works, supply and erection of Equipments

Testing and Commissioning

･Reviews

･Project Completion Report

2014Q3 Q4Q2Q4 Q1

2013Q1 Q2 Q3 Q4 Q1Description 2011 2012

Q2 Q3 Q4Q2Q1 Q3

8

III. PROJECT MANAGEMENT ARRANGEMENTS

A. Project Implementation Organizations – Roles and Responsibilities

Project implementation organizations Management Roles and Responsibilities

Government of Gujarat (GOG) • Overall responsibility for execution of the Project and the solar park

Steering Committee

• To promote and facilitate overall project coordination for smooth project implementation

• Chaired by GOG and attended by members of parties concerned including GOG, GETCO and GPCL.

Gujarat Energy Transmission Corporation Limited (GETCO) • Overall responsibility for implementation of the Project

Coordination Meeting

• To ensure that the evacuation system is ready in accordance with the commencement date of the commercial operation as per the Power Purchase Agreement between the Solar Power Developers and Gujarat Urja Vikas Nigam Limited (GUVNL) (the bulk power purchaser and power trader in Gujarat).

• Headed by Managing Director along with Project Director and Project Manager of GETCO and attended by all the solar park Developers.

Project Management Unit (PMU)

• Responsible for day-to-day coordination, implementation, and administration of the project.

• Headed by a Project Director of Chief Engineer rank.

ADB • Will undertake regular project review and facilitate in project implementation

9

B. Key Persons Involved in Implementation

Executing Agency

Government of Gujarat Energy and Petrochemical Department

Officer's Name Position Telephone Email address Office Address

Palak Sheth Officer on Special Duty to Principal Secretary +91 982 – 500 – 9012 palaksheth@gspc.in Block No.5, Sachivalaya, Gandhinagar-382 010, India

Gujarat Energy Transmission Corporation Limited Head Office

Officer's Name Position Telephone Email address Office Address

B. B. Chauhan Chief Engineer (Project) +91 2652 - 327484 ceproject.getco@gebmail.com .8th Floor S.P. Vidyut Bhavan, Race Course Vadodara-390007, Gujarat, India.

Gujarat Energy Transmission Corporation Limited Field Office

Officer's Name Position Telephone Email address Office Address

U. C. Patel Additional Chief Engineer (Zone) +91 2762 – 235045 acemehsanazone.getco@gebmail.com GETCO Mehsana Zonal Office, Visnagar Road, Mehsana Gujarat, India.

ADB

South Asia Energy Division

Staff Name Position Telephone No. Email address

Yongping Zhai Director, SAEN + 63 2 6325976 yzhai@adb.org

Mission Leader Staff Name Position Telephone No. Email address

Naoki Sakai Senior Climate Change Specialist + 63 2 6325461 nsakai@adb.org

10

C. Project Organization Structure

Government of India

Government of Gujarat (Energy and Petrochemicals Department)

Gujarat Energy Transmission Corporation

Limited

Central Level

State Level

Project Management Unit (Headed by a Project Director, supported by a Project Manager) - Substation Implementation - Transmission Implementation - Engineering - Procurement and Contract Management - Finance/Accounts - Right of Way, Environment, Social Safeguards and Safety

Project Level

Ministry of Power Ministry of Finance

(Department of Economic Affairs)

Gujarat Power Corporation Limited.

(Implementing Agency for the Solar Park)

Steering Committee for the Solar Park

(Chaired by GOG)

Managing Director

Coordination Meeting

Executing Agency (EA)

Executing Agency (EA)

11

IV. COSTS AND FINANCING

6. The total project cost of the Gujarat Solar Power Transmission Project is estimated at $133.69 million, including contingencies and financing charges. ADB will finance $100.00 million.

A. Detailed Cost Estimate by Expenditure Category

    (INR Million)  (USD Million)   

  Item Foreign Exchange 

Local Currency  Total Cost 

Foreign Exchange 

Local Currency  Total Cost 

% of Total Base Cost 

A.  Investment Costs a               1  Civil Works  1003.18 129.67 1132.85  21.59  2.83 24.42 22.0% 2  Equipment  2905.55 270.32 3175.87  63.19  5.94 69.13 62.3% 3  Environment and Social Mitigation  0.00 8.36 8.36  0.00  0.19 0.19 0.2% 4  Land Acquisition and Development Costs  0.00 140.00 140.00  0.00  3.14 3.14 2.8% 5  Overheads  0.00 646.31 646.31  0.00  14.03 14.03 12.7%   Total Base Cost (A)  3908.73  1194.66  5103.38  84.78  26.13 110.91 100.0% B.  Contingencies               1  Physical b  584.35 178.60 762.96  12.67  3.91 16.58 15.0% 2  Price c  118.10 71.71 189.81  2.54  1.55 4.09 3.7%   Subtotal (B)  702.46 250.31 952.77  15.22  5.46 20.68 18.6% C.  Financing Charges During Implementation                1  Interest during implementation   93.64 0.00 93.64  2.00  0.00 2.00 1.8% 2  Commitment Charges  4.60 0.00 4.60  0.10  0.00 0.10 0.1%   Subtotal ( C)  98.24 0.00 98.24  2.10  0.00 2.10 1.9%   Total Project Cost  4709.42  1444.97  6154.39  102.10  31.59 133.69 120.5% 

Source: a ADB Estimates for costs are based on feasibility report submitted by GETCO and discussions with GETCO in 2011 a In 2011 prices, includes freight and insurance cost. Includes taxes and duties applicable in India. b Physical contingencies at 15.0% of base cost c Price contingencies for foreign exchange and local currency expenditures are computed using ADB Financial Management and Analysis of Projects, 2005.

12

B. Detailed Cost Estimates by Financier

  ($ million)              

ADB Govt. of Gujarat TOTAL (through GETCO)   % of Cost % of Cost     Item Amount Category Amount Category Amount A. Investment Costs a 1. Civil Works 21.59 88.4% 2.83 11.6% 24.42 2. Equipment 63.19 91.4% 5.94 8.6% 69.13 3. Environment and Social Mitigation 0.00 0.0% 0.19 100.0% 0.19 4. Land Acquisition and Development Costs 0.00 0.0% 3.14 100.0% 3.14 6. Overheads 0.00 0.0% 14.03 100.0% 14.03 Total Base Cost 84.78 76.4% 26.13 23.6% 110.91 B. Contingencies 15.22 73.6% 5.46 26.4% 20.68 C. Financing Charges during Implementation 0.00 0.0% 2.10 100.0% 2.10 Total Project Cost (A.+B.+C.) 100.00 74.8% 33.69 25.2% 133.69

% Total Project Cost 75%    25%      Source: ADB Estimates for costs are based on feasibility reports submitted by GETCO and discussions with GETCO in 2011.

13

C. Allocation and Withdrawal of Loan Proceeds

$ million Category Financing Number Item Total amt allocated Percentage of ADB-financing For ADB-financing Category Sub Category 1. Equipment and Civil Worksa 84.78 1A. Substation 14.60 100% 1B. Transformers 11.66 - DO – 1C. 400 kV Transmission Line 12.78 - DO – 1D. 220 kV Transmission Line 6.77 - DO – 1E. 66 kV Cable Supply 24.87 - DO – 1F. 66 kV cable erection 14.11 - DO – 2. Contingencies 15.22 Contingencies applicable to ADB packages Total 100.00

14

D. Detailed Cost Estimates by Year

($ million)

Item Total Cost Year 1 Year 2 Year 3 Year 4

A. Investment Costs 1 Civil Works 21.59 2.22  11.67  7.02  0.68  2 Equipment 63.19 8.94  47.02  7.23  ‐  3 Environment and Social Mitigation 0.00 - - - - 4 Land Acquisition and Development Costs 0.00 - - - - 5. Overheads 0.00 - - - - Total Base Cost 84.78 11.16  58.69  14.25  0.68 B. Contingencies 15.22 1.83  10.38  2.86  0.15 C. Financing Charges During Implementation 0.0 0.0  0.0  0.0  ‐  Total Project Cost (A+B+C+D) 100.00 12.99  69.08  17.11  0.83 

% Total Project Cost 100% 13% 69% 17% 1% Source: ADB Estimates for costs are based on feasibility reports submitted by GETCO and discussions with GETCO in 2011

15

E. Contract and Disbursement S-curve

0

20

40

60

80

100

120

2010 2011 2012 2013 2014

Million US $

Contract Award Disbursements

F. Fund Flow Diagram

Payment Claim

Asian Development Bank

Suppliers

’

Document Flow

(Reimbursement Procedures)

PaymentClaimGujarat Energy Transmission

Corporation Limited (GETCO)

Suppliers Bank

(Commitment Procedure)(Direct Payment Procedure)

Withdrawal application

GOI

Fund Flow

GOG

GOI

(Reimbursement Procedures)

16

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

7. Gujarat Energy Transmission Corporation Limited (GETCO) is a registered company under the Companies Act, 1956 and was established in May 1999 as part of the electricity sector liberalization and restructuring efforts. GETCO was promoted by the erstwhile Gujarat Electricity Board (GEB) as its wholly owned subsidiary. In the year 2003, the Government of Gujarat (GOG), under the provisions of Gujarat Electricity Industry (Re-Organization & Regulations) Act, 2003, framed the Gujarat Electricity Comprehensive transfer scheme, 2003, notifying the transfer of the Provisional Opening Balance Sheet as on 31st March 2004 of the erstwhile GEB, to the Six Transferee Companies, including GETCO. In 2004, Gujarat Urja Vikas Nigam Limited (GUVNL), a holding company for handling Trading and Bulk Supply functions was formulated. GETCO is a regulated entity with tariffs (revenues and return on equity) determined by the Gujarat Electricity Regulatory Commission (GERC), in line with revenue requirement petitions filed by GETCO. 8. The present financial management of GETCO was reviewed using ADB’s financial management assessment questionnaire and interviews. The responses by GETCO to the questionnaire revealed that GETCO has defined policies and procedures in place for accounting, budgeting, and auditing activities. As per the annual reports by the statutory auditor GETCO maintains records of fixed assets with yearly physical inspections, including for inventory. GETCO also has adequate internal controls, including outsourcing the function of Internal audit to firm of chartered accountants. The existing organization structure of the Finance and Accounts Department in charge of financial management is adequate and all officers are well qualified, although staff shortage was observed.

9. The regional level officers will be responsible for the implementation of the project, while the monitoring of the project will be carried out at the corporate center. The regional level officers will submit a quarterly progress report to facilitate the monitoring of the physical progress of the project. All payments and procurement for the projects will be carried by the finance and central procurement departments respectively. Training of staff on ADB processes is considered necessary for proper financial management, reporting, and implementation of the project. As per the audited accounts of GETCO, while recording consistently lowering transmission losses and higher revenues from 2006 onwards, GETCO reports increasing accounts receivables from 0.05 months of sales in 2006 to 4.39 months of sales in 2010.

B. Disbursement

10. The Loan proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook (2007, as amended from time to time),1 and detailed arrangements agreed upon between the Government and ADB. 11. Pursuant to ADB's Safeguard Policy Statement (2009) (SPS),2 ADB funds may not be

1 Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf 2 Available at: http://www.adb.org/Documents/Policies/Safeguards/Safeguard-Policy-Statement-June2009.pdf

17

applied to the activities described on the ADB Prohibited Investment Activities List set forth at Appendix 5 of the SPS. All financial institutions will ensure that their investments are in compliance with applicable national laws and regulations and will apply the prohibited investment activities list (Appendix 5) to subprojects financed by ADB.

12. Disbursements of loan funds under the project will be mainly for the supply of equipment. ADB’s commitment, direct payment and reimbursement procedures for supply of equipment, installation and associated civil works will be followed as applicable. Reimbursement procedures will be applicable under retroactive financing in case payments are released prior to loan effectiveness. 13. Before the submission of the first withdrawal application, the EA/borrower should submit to ADB sufficient evidence of the authority of the person(s) who will sign the withdrawal applications on behalf of the EA/borrower, together with the authenticated specimen signatures of each authorized person. The minimum value per withdrawal application is US$100,000, unless otherwise approved by ADB. The EA/borrower is to consolidate claims to meet this limit for reimbursement account claims. 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.

C. Accounting

14. GETCO will maintain separate project accounts and records by funding source for all expenditures incurred on the project. Project accounts will follow international accounting principles and practices or those prescribed by the Government's accounting laws and regulations.

D. Auditing

15. GETCO will cause the detailed consolidated project accounts to be audited in accordance with International Standards on Auditing and/or in accordance with the Government's audit regulations 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 GETCO. The Government and GETCO have been made aware of ADB’s 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 ADB’s financing is used in accordance with ADB’s policies and procedures. For revenue generating projects only, ADB requires audited financial statements (AFS) for the executing agency.

VI. PROCUREMENT

A. Advance Contracting and Retroactive Financing

16. All advance contracting and retroactive financing will be undertaken in conformity with ADB’s Procurement Guidelines (2010, as amended from time to time) (ADB’s Procurement Guidelines)3 . The issuance of invitations to bid under advance contracting and retroactive financing will be subject to ADB approval. GOI, GOG and GETCO have been advised that approval of advance contracting and retroactive financing does not commit ADB to finance the

3 Available at: http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf

18

Project.

17. Advance contracting. In order to expedite project implementation, GOG and GETCO have requested approval for advance contracting for the procurement of the equipment, goods and works. The steps to be concluded in advance include preparation of bidding documents, bidding, and bid evaluation for all the eligible contract packages to be agreed between ADB and GOI, GOG and GETCO.

18. Retroactive financing. Except as otherwise accepted with ADB, the expenditures incurred for equipment and materials will be eligible for retroactive financing, provided these are incurred before the effectiveness of the related loan agreement, but not earlier than 12 months preceding the signing of the related loan agreement and as long as they do not exceed an amount of 20% of the loan.

B. Procurement of Goods, Works

19. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines. International competitive bidding procedures will be followed for all the packages. GETCO has robust organizational capacity for procurement with qualified human resources to handle both local and foreign procurement. In addition, it has excellent experiences with procurement of plant, goods and works for transmission systems. GEB, the predecessor of GETCO experienced ADB funded project, however, GETCO itself does not have any experiences with procurement funded by ADB. Therefore, they will need general guidance and assistance on ADB's Procurement Guidelines and procedures.

20. An 18-month procurement plan indicating threshold and review procedures, goods, works, and plant contract packages is in Section C.

C. Procurement Plan

Basic Data

Project Name Gujarat Solar Power Transmission Project Country India Executing Agency Government of Gujarat,

Gujarat Energy Transmission Corporation Limited Loan Amount $ 100 million Loan Number TBD Date of First Procurement Plan 20 June 2010 Date of this Procurement Plan 23 Mar 2011

Process Thresholds, Review and 18-Month Procurement Plan

1. Project Procurement Thresholds

21. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

Procurement of Goods and Works Method Threshold International Competitive Bidding (ICB) for Works $10,000,000 and more

19

ICB for Goods $1,000,000 and more

2. ADB Prior or Post Review

22. Except as ADB may otherwise agree, the following prior or post review requirements apply to the various procurement and consultant recruitment methods used for the project. Procurement Method

Prior or Post Comments

Procurement of Goods and Works International Competitive Bidding (ICB) for Works Prior ICB for Goods Prior

3. Goods and Works Contracts Estimated to Cost More Than $1 Million

23. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

General Description

Contract Value

($million) Procurement

Method Prequalificationof Bidders (y/n)

Advertisement Date

(quarter/year) Comments

400 KV Transmission Line 12.78 ICB(Turnkey) No 3rd Quarter

2011 Financed by ADB

220 KV Transmission Line 6.77 ICB(Turnkey) No 3rd Quarter

2011 Financed by ADB

400/220/66 KV Substation including

feeder bays at Sankhari and

Jangral substations

14.60 ICB(Turnkey) No 3rd Quarter 2011

Financed by ADB

66/220 KV and 220/400 KV

Transformers 11.66 ICB(Supply) No 2nd Quarter

2011 Financed by ADB

66KV Cable Supply 24.87 ICB(Supply) No 2nd quarter 2011

Financed by ADB

66 KV Cable Erection 14.11 ICB(Turnkey) No 2nd Quarter

2011 Financed by ADB

VII. SAFEGUARDS

24. GETCO is responsible for undertaking the Project in accordance with the initial environment examination (IEE) and implementing the environmental management plan (EMP) and resettlement plan (RP) in accordance with ADB’s Safeguard Policy Statement 2009. A Project Management Unit (PMU) will be responsible for coordinating and implementing all social and environmental activities. The PMU would have a dedicated officer for Right of Way (ROW) clearances including environmental, social and safety issues. The construction of transmission

20

lines will not require any permanent land acquisition; however impact on crop and livelihood sources will be mitigated as per the RP. GOG and GETCO will finalize the full implementation of the RP prior to the commencement of civil works. During project implementation, GOG and GETCO will be responsible for reflecting the occurrence of new and significant impacts resulting from project activities and designing and integrating sound mitigation measures into the EMP and RP. Environmental and social grievances will be handled in accordance to the project grievance redress mechanism. Open and transparent dialogue will be maintained with project affected persons as and when needed, in compliance with ADB safeguard policy requirements. Where relevant, GETCO will ensure that contractor agreements include sufficient safeguard measures to ensure the continuity of the project’s compliance with the EMP and RP, including occupational health, safety and applicable labor standards. GOG and GETCO will monitor the project’s overall environmental and social performance per the terms and conditions specified in Section IX (Safeguards) of this manual.

VIII. GENDER AND SOCIAL DIMENSIONS

25. A Gender Action Plan (GAP) has been prepared for the project. GETCO will be responsible for overseeing the implementation of the GAP and any other potential grant-related activities that may be mobilized for the project to enhance gender equity and women's empowerment. The loan agreements include a standard assurance related to core labor standards for contractors, including provisions to ensure equal pay for equal work (where women are concerned), awareness training on HIV and sexually transmitted diseases and human trafficking. Dialogue and communication (both written and verbal) with stakeholders will be carried out in a culturally sensitive manner and in the local language spoken (Gujarati and/or Hindi) as required.

21

GENDER ACTION PLAN

Outputs Activities & Targets Timeline Responsibility

1 Vocational training for skilled employment Skills training to support solar power development projects, including transmission.

Skills training to be provided to local workforce living in the area of influence of the project (generation and transmission): Target 30% women. Gender sensitive course content and training methodologies will be developed and implemented. Training facilities will also cater to women/girls.

Needs assessment Q3-4 2011. Training delivered 2012.

Pandit Deendayal Petroleum University (PDPU) with the participation of external and local level government partners where available.

2 Energy-based livelihood enhancement Women’s livelihoods enhanced through skills training.

Skills training will be provided to up to 100 local women, including woman headed households in women-led micro-enterprises in up to 5 villages across the project area of influence.

Identify livelihood opportunities and training requirements Q3-4 2011. Training delivered 2012.

GETCO/ with the participation of external and local level government partners where available.

3 Semi-skilled and unskilled employment Local women provided employment and training for semi-skilled and unskilled jobs, both temporary and permanent.

Local workforce will be employed in semi-skilled and unskilled temporary and permanent jobs across project sites in Patan District. Jobs will cover employment demands created by both the transmission and solar park projects. Target 30% women.

In a phased manner as demand for employment increases during project construction.

GETCO/ with the participation of external and local level government partners where available.

4 Community infrastructure development Basic community infrastructure and assistance will be developed in Charanka.

Water and sanitation infrastructure. Educational facilities, including housing for students. Capacity building for maintenance and operations of new facilities. Other small scale infrastructure and supporting services to cover basic community development needs (e.g., street lighting, etc.) as deemed necessary.

During the construction phase.

GETCO/local contractors and partners.

5 Monitoring & Evaluation Key GAP targets will be integrated into the project PPMS system to monitor progress towards gender equality outcomes, targets and indicators.

Monitoring every six-month after the commencement of each GAP activity.

GETCO

PDPU = Pandit Deendayal Petroleum University, GETCO = Gujarat Energy Transmission Corporation Limited, GAP = Gender Action Plan, PPMS = project performance management system

22

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION

A. Project Design and Monitoring Framework

Design Summary Performance Targets and

Indicators

Data Sources and Reporting

Mechanisms Assumptions

and Risks Impact Large-scale development of reliable solar power projects in a cost-effective manner in India

Grid-connected solar power generation capacity to increase to about 1,000 MW by 2013 and 4,000 MW by 2017 (2010 baseline: 6 MW) Grid-connected solar power generation to reach about 500 MW by 2015 in Gujarat (2010 baseline: 0 MW)

MNRE annual report GPCL annual report GERC tariff order

Assumptions Timely and cost-effective development of the first solar park spurs additional solar power development through solar parks in Gujarat. A combination of support measures, including purchase obligations and attractive feed-in tariffs, support solar power development.

Outcome Development of reliable solar power transmission infrastructure for the successful operation of the solar park

Up to 500 MW can be evacuated from the Charanka solar park over the transmission link to the Gujarat and national grid commencing in 2014 (2010 baseline: 0 MW)

GETCO and GPCL annual reports

Assumptions Up to 500 MW of solar power generation is set up at the solar park in a timely manner. Power transmission infrastructure is successfully completed by 2014. Risks Countermeasures may be required to enhance stability of grid at evacuation point

Outputs Physical Investment 1. The procurement, installation, and commissioning of the transmission system and associated facilities for the Charanka solar park

1. One 400/220/66kV

substation comprising two 315 MVA transformers and one 125 MVAR bus reactor by 2014

2. Eight 100 MVA

transformers at 220/66 kV voltage level by 2014

3. a 66 kV underground

cable grid of about 137 km within the solar park by 2014

GETCO Progress reports and GETCO annual report GETCO Progress reports and GETCO annual report GETCO Progress reports and GETCO annual report

Assumptions Counterpart funds for timely project implementation will be available from GOG and GETCO. Approval of contract awards by the relevant authorities is timely. Environmental and social clearances, and approvals for construction of transmission lines are timely. Risks

4 A TA for the Gujarat Solar Vocational Training and Livelihoods Project, equivalent to a total of $400,000 has been

approved to provide vocational and livelihoods training for men and women in 18 primary target villages across Patan district, with the option to expand the geographic coverage of TA activities across the entire district. The TA has a gender mainstreaming focus and is financed by ADB,from funds provided by the Department for International Development of the Government of the United Kingdom, and Government of Gujarat.

23

Design Summary Performance Targets and

Indicators

Data Sources and Reporting

Mechanisms Assumptions

and Risks Non-Physical Investment4 2. Vocational training for skilled employment 3. Energy-based livelihood enhancement

4. About 110 km of 400 kV

double circuit transmission line from the solar park to Sankhari, Patan District, Gujarat by 2014

5. About 109 km of 220 kV

double circuit transmission line from the solar park to Jangral, Patan District, Gujarat by 2014

6. Two feeder bays at the substations located at Sankhari and Jangral, Patan District, Gujarat by 2014

Skills training for up to 300 men and women; target 30% women by 2012 Livelihood enhancement training to 100 poor households headed by women by 2012

GETCO Progress reports and GETCO annual report GETCO Progress reports and GETCO annual report GETCO Progress reports and GETCO annual report Gender action plan monitoring reports and Project performance monitoring system monitoring reports Gender action plan monitoring reports and Project performance monitoring system monitoring reports

Increases in the prices of raw materials exceed contingency and inflation forecasts. Assumptions A sufficiently large group of eligible and interested candidates is recruited. Risks Target local men and women are unavailable and/or unwilling to participate in the training offered.

Activities with Milestones Inputs 66 kV cable procurement and laying within the park 1.1 Procurement of major equipment: Issuance of bidding documents by Q2 2011 and contract awards by Q4 2011 1.2 Construction started by Q1 2012 1.3 Commission by Q3 2014 220 kV Transmission line, pooling substation and feeder bays 1.1 Procurement of major equipment: Issuance of bidding documents by Q3 2011 and contract awards by Q1 2012 1.2 Construction started by Q1 2012 1.3 Commission by Q3 2014 400 kV Transmission line, pooling substation and feeder bay 2.1 Procurement of major equipment: Issuance of bidding documents by Q3 2011 and contract awards by Q1 2012 2.2 Construction started by Q1 2012 2.3 Commission lines by Q3 2014

ADB: $ 100.0 million GOG: $ 33.7 million

24

ADB = Asian Development Bank, GERC = Gujarat Electricity Regulatory Commission, GETCO = Gujarat Energy Transmission Corporation Limited, DC = double circuit, EA = Executing Agency, GPCL = Gujarat Power Company Limited, GoG = Government of Gujarat, GoI = Government of India, kV = kilo Volt, MNRE = Ministry of New and Renewable Energy, MW = megawatt, s/s = sub station, PPMS = project performance management system Source: Discussions during 2 ADB consultation missions with Government of Gujarat

B. Monitoring

26. Overall monitoring of the Charanka solar park in terms of progress will be undertaken by the Steering Committee, which will meet quarterly, as required. GETCO will undertake timely monitoring of the Project including holding of the monthly Coordination Meetings and submission of progress resports to the Steering Committee. The PMU will monitor progress, procurement, quality, contract management and fiduciary management. The Projects Department will undertake regular field visits and provide guidance to the Project Director of the PMU.

27. Compliance monitoring: PMU staff (Safeguard Specialist – responsible for Right of Way, Environment, Social Safeguards and Safety) will undertake regular field visits to review and monitor the implementation of the resettlement plan, conduct consultations with affected persons and report the implementation status/schedule of the RP, GAP and EMP as needed and through bi-yearly compliance monitoring reports. Compliance monitoring shall include occupational health, safety and labor standards and conditions of workers, whether contracted directly or through third parties. GOG and GETCO will also be responsible for the fair and timely disbursement of compensation and assistance/benefits to legitimately entitled project affected peoples. Gender mainstreaming activities, particularly interventions targeting women and women headed households, will be managed sensitively in accordance to ADB policy requirements and will be monitored overtime (per project specific targets and criteria) to assess any changes (positive or negative) in the quality of life, wellbeing or livelihoods of the intended beneficiaries.

C. Evaluation

28. ADB will field regular review missions every six months at the minimum to review status of contract awards, disbursements, physical progress and implementation of the environmental management plan. Within 3 months of physical completion of the Project, GETCO will submit a project completion report (PCR) to ADB.5 Subsequently, ADB will field a mission to finalize the PCR.

Evaluation Methodology

Evaluation Activity Purpose Methodology Who responsible and involved

Review Mission Review the progress of the project and provide guidance to facilitate implementation

Site visits and meetings with EA officials, contractors, consultants at least twice a year

ADB/GOG/GETCO

Mid Term Review Comprehensive review of the project

Not needed as review missions will be

5 PCR format is available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-Sector-Landscape.rar

25

conducted regularly and the project implementation is only 4 years

Project completion report

Evaluate the overall output of the project and its relevance and suitability

Site visit and meetings with GETCO officials, contractors, consultants

ADB/GOG/GETCO

D. Reporting

29. GETCO 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 project completion report within 3 months of physical completion of the Project. To ensure projects continue to be both viable and sustainable, project accounts and the executing agency AFSs, together with the associated auditor's report, should be adequately reviewed.

E. Stakeholder Communication Strategy

30. The Stakeholder Communications Strategy is described in the following table. GETCO will post all relevant information on its website. The website will include at minimum information regarding the bidding process, bidders, contract awards, use of funds disbursed under the Project and physical progress.

Stakeholder Communication Strategy

Project information to be communicated

Means of Communication

Responsibility Audience Frequency

Report and Recommendation of the President (RRP) with linked documents

ADB website ADB ADB, Government of India, Development Partners, Civil Society, Individuals

Once

Project information while planning/ designing

Discussions and stakeholder consultations

GETCO Project beneficiaries

Regular intervals during planning and design

Status of implementation during construction

Boards at site GETCO/ Contractors

Project beneficiaries

All the time at construction sites

26

Project Performance Reports and Project Information Documents

ADB website ADB ADB, Government of India, Development Partners, Civil Society, Individuals

Every quarter

Project completion report

ADB website ADB ADB, Government of India, Development Partners, Civil Society, Individuals

Once

X. ANTICORRUPTION POLICY

31. The Government, the State Government of Gujarat, and GETCO are advised of ADB’s Anticorruption Policy (1998, as amended to date). Consistent with its commitment to good governance, accountability and transparency, implementation of the Project shall adhere to ADB’s Anticorruption Policy. ADB reserves the right to review and examine, directly or through its agents, any alleged corrupt, fraudulent, collusive, or coercive practices relating to the Project. In this regard, investigation of Government officials, if any, would be requested by ADB to be undertaken by the Government. To support these efforts, relevant provisions of ADB’s Anticorruption Policy are included in the Loan Regulations and the bidding documents. In particular, all contracts financed by ADB shall include provisions specifying the right of ADB to audit and examine the records and accounts of the State and GETCO and all contractors, suppliers, consultants, and other service providers as they relate to the Project. Individuals/entities on ADB’s anticorruption debarment list are ineligible to participate in ADB-financed activity and may not be awarded any contracts under the Project.6

32. To support these efforts, relevant provisions are included in the loan and project agreement and the bidding documents for the Project.

XI. ACCOUNTABILITY MECHANISM

33. 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.7

XII. RECORD OF PAM CHANGES

34. To be inserted as and when any changes are necessary and agreed by both sides.

6 ADB's Integrity Office web site is available at: http://www.adb.org/integrity/unit.asp 7 For further information see: http://compliance.adb.org/.

27

SIGNED IN VADODARA, GUJARAT, INDIA ON 24 MARCH 2011

On behalf of Asian Development Bank On behalf of Gujarat Energy Transmission Corp. Ltd. Naoki Sakai M. K. Jani Senior Climate Change Specialist Project Manager