Uch-Kurgan Hydropower Plant Modernization Project: Project ... · Most of the country’s...

Uch-Kurgan Hydropower Plant Modernization Project RRP KGZ (49240-002)

Project Number: 49240-002 March 2019 Loan and Grant Number: LXXXX-KGZ; GXXXX-KGZ

Kyrgyz Republic: Uch-Kurgan Hydropower Plant

Modernization Project

Project Administration Manual

http://www.adb.org/Documents/RRPs/?id=49240-002-3

Contents

I. PROJECT DESCRIPTION 1

II. IMPLEMENTATION PLANS 4

A. Project Readiness Activities 4 B. Overall Project Implementation Plan 5

III. PROJECT MANAGEMENT ARRANGEMENT 7

A. Project Implementation Organizations – Roles and Responsibilities 7 B. Key Persons Involved in Implementation 8 C. Project Organization Structure 8

IV. COSTS AND FINANCING 10

A. Detailed Cost Estimate by Category 11 B. Allocation and Withdrawal of Loan/Grant Proceeds 12 C. Detailed Cost Estimate by Financier 14 D. Detailed Cost Estimate by Output ($ million) 15 E. Detailed Cost Estimate by Year 16 F. Contract and Disbursement S-curve 17 G. Fund Flow Diagram 21

V. FINANCIAL MANAGEMENT 21

A. Financial Management Assessment 21 B. Disbursement 22 C. Accounting 23 D. Auditing and Public Disclosure 23

VI. PROCUREMENT AND CONSULTING SERVICES 25

A. Advance Contracting and Retroactive Financing 25 B. Procurement of Goods, Works and Consulting Services 25 C. Procurement Plan 26 D. Consultant's Terms of Reference 29

VII. SAFEGUARDS 40

VIII. GENDER AND SOCIAL DIMENSIONS 43

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND COMMUNICATION 43

A. Project Design and Monitoring Framework 43 B. Monitoring 46 C. Evaluation 46 D. Reporting 47 E. Stakeholder Communication Strategy 47

X. ANTICORRUPTION POLICY 49

XI. ACCOUNTABILITY MECHANISM 50

XII. RECORD OF PAM CHANGES 50

Project Administration Manual Purpose and Process

1. 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.

2. The executing agency––Open Joint Stock Company Electric Power Plants (EPP) is 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 EPP of their obligations and responsibilities for project implementation in accordance with ADB’s policies and procedures.

3. At Loan/Grant Negotiations the borrower, EPP and ADB shall agree to the PAM and ensure consistency with the Project Financing Agreements. Such agreement shall be reflected in the minutes of the Loan/Grant Negotiations. In the event of any discrepancy or contradiction between the PAM and the Project Financing Agreements, the provisions of the Project Financing Agreements shall prevail.

4. 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 ADF = Asian Development Fund AFS = audited financial statements CAPS = Central Asian Power System CQS = consultant qualification selection DMF = design and monitoring framework EDB = Eurasian Development Bank EMP = environmental management plan EPP = Open Joint-Stock Company Electric Power Plants GACAP = governance and anticorruption action plan ICB = international competitive bidding IEE = initial environmental examination LAR = land acquisition and resettlement MOE = Ministry of Economy PAI = project administration instructions PAM = project administration manual PIU = project implementation unit PIC = project implementation consultant QCBS = quality- and cost-based selection RRP = report and recommendation of the President to the Board SBD = standard bidding documents SPS = Safeguard Policy Statement SPRSS = summary poverty reduction and social strategy TOR = terms of reference

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I. PROJECT DESCRIPTION

A. Rationale

1. The Kyrgyz Republic is rich in renewable energy resources. The energy takes 85% of its total 3,920 megawatts (MW) electricity generation capacity from hydropower, and the rest comes from two combined heat and power plants in Bishkek and Osh. Most of the country’s hydropower generation comes from the Naryn River cascade, with total installed capacity of 2,870 MW.

2. Covering 150 kilometers (km), the Naryn River cascade is the powerhouse of the Kyrgyz Republic; its six hydropower plants (HPP) produce 92% of the country’s hydropower power supply. The Toktogul HPP built in 1975 is the largest of the six plants with 1,200 MW of generation capacity, and the Uch-Kurgan HPP built in the early 1960s is the oldest; the other four plants are relatively new. Rehabilitating Uch-Kurgan is urgently needed to maintain the integrity of the power system in the cascade.

3. Uch-Kurgan is 271 km southwest of Bishkek, near the Uzbekistan border. It was the first installation in the Naryn River cascade and is used to produce baseload for the Kyrgyz Republic and export to Uzbekistan. The Uch-Kurgan HPP has an earth-fill dam and a concrete dam with an outdoor powerhouse of 180 MW, equipped with four vertical Kaplan turbines—suitable for low head and high flow rates—of 45 MW each. Since commercial operations started in 1962, Uch-Kurgan HPP has not had major improvements or modernization to maintain its original performance. As the plant’s condition is very poor and well past its useful economic and functional life, it needs major rehabilitation or replacement. 4. The Uch-Kurgan reservoir has lost some storage capacity to sediments. The HPP operates as a run-of-river plant, and because of sediments three of the eight bottom outlet gates are not operational. If upstream HPPs need to spill water in an emergency flooding scenario, the Uch-Kurgan HPP will be unable to pass it on safely to the downstream river, which may cause the earth-fill dam to fail and potentially cause damage to the downstream population in the Kyrgyz Republic and Uzbekistan. 5. Rehabilitating the Uch-Kurgan HPP is the logical next step to maintaining the integrity of the Naryn River cascade after upgrading the Toktogul HPP in the Toktogul reservoir, a multi-year storage reservoir. Once completed in 2023, Toktogul will have a total capacity of 1,440 MW. 6. Multi-year water storage is crucial for the Central Asian region, and downstream agriculture depends on it. With the added capacity, Toktogul will contribute even better to power generation for the country and benefit the downstream irrigated agriculture in the Kyrgyz Republic and in neighboring Kazakhstan and Uzbekistan by storing water in wet years and releasing stored water in dry years. However, water from Toktogul reservoir could only flow downstream effectively, if the Uch-Kurgan HPP can carry the full upstream discharge. 7. Kyrgyz hydropower plays a critical role in regional energy security. As Central Asia’s clean energy hub, Kyrgyz Republic supplies 90% of the region’s hydropower. That hydropower will become even more relevant as Central Asia will need more clean energy to reduce its overall carbon footprint to meet commitments under the 2015 Paris Agreement on climate change.1

1 United Nations Framework Convention for Climate Change. The Paris Agreement.

https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement

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8. Although almost 100% of the population is connected to the electricity grid and despite substantial investments, 45% of the installed generation capacity is reaching its end of useful economic operation. Most of the generation assets were commissioned in the 1970’s and 1980’s, and lack of investment in maintenance and repair has resulted in poor service reliability and quality. This is especially critical in winter, when the Kyrgyz Republic faces an increasing gap between available generation capacity (especially in low-hydrology periods) and growing demand. The condition of the transmission and distribution assets worsens this situation. 9. Supply reliability (measured by frequency and duration of outages) and service quality (fluctuations in voltage, frequency, or harmonics that can damage equipment) are likely to worsen without new investments and are key concern for the business community. In 1995, the Kyrgyz Republic exported more than 2,000 gigawatt hours (GWh) to Kazakhstan, Tajikistan, and Uzbekistan; since 2014 exports have dropped to less than half of that. 10. The government’s strategy is to rehabilitate existing power plants and invest in long-term export opportunities such as CASA-1000.2 The project, developed on the principle of exporting excess hydropower in the summer from the Kyrgyz Republic and Tajikistan, relies heavily on the timely rehabilitation of the Kyrgyz HPPs. 11. More dollar-denominated export revenues will increase sector profitability. The average tariff in the Kyrgyz Republic is low because the population’s ability and willingness to pay are low. As reform efforts continue, more export revenues can dramatically change the financial well-being of the utilities, since the average export price of about $0.04 per kilowatt hour is higher than the local price. Power sector reform and operational efficiency improvements are also government priorities; the government plans to develop a restructuring plan to step up performance and efficiency, which may also reduce the tariff burden on the population. 12. As more energy becomes available, Kyrgyz power exports are expected to keep growing. Growth in domestic demand is saturated in the summer but barely met in the winter, and opportunities from diversified use of generated power will be part of the submaster plan. The Kyrgyz Republic will hugely benefit from the full rehabilitation of Toktogul HPP, which will add one 360 MW unit each year from 2020; and Kambarata 2 HPP, which will add a 120 MW unit. Hydropower investments are essential for the Kyrgyz Republic’s future economic development. 13. Value Added by ADB Assistance. Since 1996, ADB has led multiple power and district heating rehabilitation projects.3 ADB is leading the Naryn cascade rehabilitation through its ongoing work in Toktogul hydropower rehabilitation where ADB has demonstrated its value in attracting quality bids at highly competitive prices. Lessons from previous and ongoing projects show EPP’s competency in implementing projects. However frequent changes in key people, project knowledge confined to few technical staff, and language issues are the main causes of project delays. In this project, ADB value addition includes (i) use of high technology underwater scanning of hydromechanical structure to better assess its status; (ii) higher quality due diligence in all aspects of project design and standards of environmental safeguard that will mitigate any serious risks; (iii) leverage co-financing from EDB; (iv) integrate some gender element in the project design by creating a special program for 10 women engineers to work in the operations

2 A 1,200 kilometer long power transmission line connecting hydropower rich Kyrgyz Republic and Tajikistan to

Afghanistan and Pakistan. Project details available at: http://www.casa-1000.org 3 Power and District Heating Rehabilitation Project (approved in 1996), Power Sector Improvement Project (2010),

Power Sector Rehabilitation Project (2012), Toktogul Rehabilitation Phase 2 Project (2014), and Toktogul Rehabilitation Phase 3 Project (2016).

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and maintenance of the plant for two years; (v) ADB is supporting introduction of enterprise resource planning across all energy companies and the asset valuation activities are ongoing; and (vi) about $95 million (mitigation: $85 million, adaptation: $10 million) of these investments will be attributed to climate financing. In addition, dredging and dam reinforcements will contribute to climate resilience. 14. ADB’s country partnership strategy, 2018–2022 for the Kyrgyz Republic will support growth and economic diversification, improve access to public and social services, and leverage regional cooperation.7 It is aligned with the country’s medium-term development program and and ADB’s Strategy 2030.8 15. To achieve broad-based growth, ADB is committed to continuing catalytic energy investments to raise efficiency and improve the overall performance of the sector. ADB will use the CAREC program to enable the Kyrgyz Republic to leverage regional initiatives, including opportunities arising from accession to the Eurasian Economic Union. ADB will provide support to improve governance, increase gender equality, develop knowledge products, and explore opportunities for nonsovereign projects to improve energy security. ADB supports climate mitigation through the energy sector, and the project’s climate mitigation financing amount is $100 million based on ADB’s Guidance Note on Counting Climate Finance in Energy.9 16. ADB projects to rehabilitate the four generator and turbine units of Toktogul HPP are pivotal to meeting domestic power demand and raising power exports, Toktogul produces about 40% of the country’s electricity output.10 ADB’s involvement in the sector brings a regional perspective to the project and key insights from other HPP rehabilitation projects in the region including Toktogul HPP. ADB’s energy program will aim to have catalytic effects and create a business-friendly environment, making HPP projects viable for private sector participation. ADB’s country experience will help mobilize funds to close the financing gap. Combined, these are expected to deliver higher value addition with trickle-down effects throughout the country’s power system. The government alone would not be able to incorporate these interventions.

A. Impact and Outcome

18. The project is aligned with the following impact: operational performance of the Kyrgyz Republic power sector improved, consistent with the state policy on energy security.11 The project will have the following outcome: hydropower generation performance Naryn River cascade improved.12

7 ADB. 2018. Country Partnership Strategy: Kyrgyz Republic, 2018–2022—Supporting Sustainable Growth, Inclusion,

and Regional Cooperation. Manila. 8 ADB. 2017. Country Partnership Strategy: Kyrgyz Republic, 2018–2022—Supporting Sustainable Growth, Inclusion,

and Regional Cooperation. Manila. 9 ADB 2017. Available at: https://www.adb.org/sites/default/files/institutional-document/296466/guidelines-estimating-

ghg.pdf 10 Toktogul Phase 1 project refers to ADB Loan 2869/Grant 0294: Power Sector Rehabilitation Project. Toktogul Phase 2 project refers to ADB Loan 3212/Grant 0419: Toktogul Rehabilitation Phase 2 Project. Toktogul Phase 3 project refers to Loan 3422/Grant 0494: Toktogul Rehabilitation Phrase 3 Project. 11 Government of the Kyrgyz Republic. 2016. Concept for Development of Energy Sector of The Kyrgyz Republic Till

2030. Bishkek. 12 The design and monitoring framework is in Appendix 1.

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B. Outputs

19. Output 1: Uch-Kurgan HPP facility modernized. Output 1 will be achieved by (i) restoring the full operation of all four generating units with total capacity of 216 MW (old capacity 180 MW), (ii) reinforcing the hydraulic steel structure, (iii) reinforcing the dam infrastructure, and (iv) making all eight bottom outlet gates operational. The project will deliver additional 36 MW capacity (9 MW from each of the 4 units) from increased efficiency of the new generating units.

20. Output 2: EPP’s commitment to operational sustainability and diversity reinforced. This will be achieved by Electric Power Plants (EPP) close engagement in formulating and implementing the proposed project. The project will help (i) strengthen EPP’s capacity to implement externally funded projects; (ii) design EPP’s project implementation and engineering accreditation program; (iii) train EPP personnel on project implementation (safeguards monitoring, procurement, financial management); (iv) improve EPP’s capacity for planning and implementing sector reform; (v) establish EPP engineers’ accreditation program; and (vi) recruit 10 women engineers for 2 years under the project to create a culture of best practice and modern business processes.

II. IMPLEMENTATION PLANS

A. Project Readiness Activities

ADB = Asian Development Bank, EDB = Eurasian Development Bank, EPP = Electric Power Plants, MOF = Ministry of Finance, MOJ = Ministry of Justice, SLA = Subsidiary Loan Agreement.

Oct Nov DecJanFeb Mar Apr May June July

Advance Actions/Procurement ADB, EPP

Loan/Grant negotiations ADB, EPP, MOF

ADB Board consideration ADB

ADB-EDB Cofinancing Agreement ADB, EDB

EDB council consideration EDB

Financing agreement, project

agreement and SLA signing

ADB, EPP, MOF

Government legal opinion MOF, MOJ, EPP

Government budget inclusion MOF

SLA effectiveness MOF, EPP

ADB Loan/Grant effectiveness ADB, MOF, MOJ

EDB loan effectiveness EDB, MOF, MOJ

Agency

Responsible

2018 2019Indicative activities

B. Overall Project Implementation Plan

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III. PROJECT MANAGEMENT ARRANGEMENT

A. Project Implementation Organizations – Roles and Responsibilities

Project implementation organizations

Management Roles and Responsibilities

• Ministry of Finance (MOF) Borrower

➢ Representing external borrowing ➢ Ensuring financing proceeds are used in accordance

with Subsidiary Loan Agreement ➢ Handling issues pertaining to project-related taxes and

duties ➢ Implementing safeguard measures and safeguard plan

(as required by project initial environmental examination)

➢

• Open Joint-Stock Company Executing Agency

Electric Power Plants (EPP) ➢ Supervising project consultants, contractors and suppliers.

➢ Preparing withdrawal applications ➢ Submitting project financial statement audit and

corporate financial statement audit ➢ Implementing safeguard measures and safeguard plan

(as required by project initial environmental examination)

➢ Submitting periodic safeguard monitoring reports

• State Committee of Industry, Energy, and Subsoil Use (SCIESU)

➢ Supervising project consultants, contractors and suppliers.

• Asian Development Bank (ADB)

Lender ➢ Main project financier; administering EDB loan ➢ Providing timely guidance at each stage of project

implementation in accordance with the agreed implementation arrangements

➢ Reviewing all the documents that require ADB approval

➢ Conducting inception mission, periodic project review missions, midterm review, a project completion report mission

➢ Supervising compliance with ADB loan/project covenants

➢ Timely processing of withdrawal applications and release funds

➢ Partially administering EDB loan (including procurement review and disbursement procedure.

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• Eurasian Development Lender

Bank (EDB) ➢ Project cofinancier for Uch-Kurgan HPP rehabilitation. ➢ Reviewing all documents that require EDB’s approval

➢ Supervising compliance of EDB loan covenants ➢ Participating in ADB review missions (at own cost)

B. Key Persons Involved in Implementation

Executing Agency EPP Officer’s Name

Position Email address Office address

Askar Eshimbekov Director General [email protected] 326 Jibek Jolu Prospect, Bishkek

ADB Central and West Asia Energy Division

Staff Name Position Telephone Email address

Ashok Bhargava Director +632 632-6113 [email protected]

Mission Leader Staff Name Position Telephone No. Email address

Sohail Hasnie Principal Energy Specialist +632 632-5782 [email protected]

Kyrgyz Resident Mission

Staff Name Position Telephone No. Email address

Candice McDeigan Country Director +996 312 624195 / 900445 [email protected]

Cofinancier EDB Staff Name Mr. Andrey Shirokov Position Executive Director Eurasian Fund for

Stabilization and Development (EFSD) Email address

Telephone No.

[email protected]

C. Project Organization Structure

21. EPP Project Implementation Unit (PIU). The EPP has a full-time Investment Project Implementation Department (IPID) administering all consulting and procurement contracts of all foreign-funded projects including ADB’s (e.g. ADB projects: Toktogul Phase 1,13 Phase 2,14 and Phase 315) on behalf of EPP. Under IPID, specific project implementation units (PIUs) are

13 Toktogul Phase 1 project refers to ADB Loan 2869/Grant 0294: Power Sector Rehabilitation Project. 14 Toktogul Phase 2 project refers to ADB Loan 3212/Grant 0419: Toktogul Rehabilitation Phase 2 Project. 15 Toktogul Phase 3 project refers to Loan 3422/Grant 0494: Toktogul Rehabilitation Phrase 3 Project.

mailto:[email protected]



mailto:@adb.org


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assigned to particular projects. The IPID will be expanded to include a PIU for Uch-Kurgan HPP Modernization Project comprising of designated EPP staff and individual consultant. It will be responsible for overall coordination and supervision as well as oversight for bid evaluation, contract award, construction supervision, contract management, and reporting to the government and ADB. 22. The PIU manager and staff will have appropriate academic qualifications with significant experience working on large investment projects and HPP. The PIU manager will be a senior manager with experience in project implementation and operation and must be familiar with projects funded by development partner. The project engineer and project accountant will have relevant experience and academic qualification in their specialty area. The procurement specialist will have the required academic qualifications with significant experience in recruitment of consultants and procurement of contractors. 23. The PIU manager will report directly to IPID Head on project administration and implementation and will be the main point of contact for communication between EPP and ADB. The IPID Head, to be assisted by the IPID Deputy Head, will provide overall direction and management to the PIU team as well as report to EPP Director General on matters pertaining to the project. 24. An international consulting firm will be engaged as project implementation consultant (PIC) to support the EPP PIU in all aspects of project implementation matters. PIC will assist PIU in (i) preparing the bidding documents and procuring EPC packages for electromechanical generation equipment together with the hydraulic steel structure and civil structure repair together with the dam monitoring system, and (ii) supervising and monitoring the related rehabilitation works in Uch-Kurgan HPP. Individual consultants (national) will be recruited to support the PIU functions. 25. Assisted by PIC, the PIU will submit the necessary project plans, bid evaluation reports, progress reports, applications for withdrawal of funds, and any other required reports to ADB, EDB and the government. 26. The terms of reference of the PIU manager and staff are as follows:

Position Terms of Reference

PIU Head • Focal point of PIU in communicating and reporting with ADB, EPP and MOF.

• Provide day-to-day

• Assist PIU Deputy Manager in managing PIC and contractors.

• Assist PIU Deputy Manager in monitoring and supervising consultants’ and contractors’ progress.

• Responsible for control of schedule, quality, quantity, cost, and safety of the physical investments of the project.

• Ensure all project covenants relevant to EPP are met.

• Ensure all safeguard requirements are satisfied.

• Assist PIU Deputy Manager in coordinating with engineers from technical and maintenance department.

• Supervising the installation and commissioning of equipment for the power plant.

• Monitor and supervise consultants’ and contractors’ progress.

• Coordinate with engineers from technical and maintenance department on

• supervising the installation and commissioning of equipment for the power plant.

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Procurement

Specialist/Project

Coordinator

• Prepare request for proposals of consulting services for project implementation.

• Lead evaluation of bids and preparation of bid evaluation reports.

• Lead consultants' contract negotiations and award of contracts.

• Lead contract awards and any negotiations required prior to the award.

• Manage consultants and their contracts.

Project

Accountant

• Maintain separate project financial statements.

• Prepare withdrawal applications.

• Monitor loan covenants.

• Prepare project financial reports.

• Coordinate with EPP’s central accounting department.

Safeguard

Specialist

• Ensure that the requirements identified in the initial environment examination are included in the bidding documents and contracts.

• Ensure the implementation and monitoring of safeguard requirements and publish the results in the project’s quarterly progress reports and semi-annual environmental reports.

• Supervise the PIC on mitigation measures and monitoring plan as specified in the EMP and ensure that the PIC submits its semi-annual environmental monitoring reports.

• Supervise PIC in the preparation of updated initial environment examination. Engineers of EPP

• Assist the project engineer.

• Manage consultants' and consultants' progress and delivery of contract.

• Supervise contractor’s work in the installation and commissioning of electrical and mechanical equipment.

ADB = Asian Development Bank, EPP = Open Joint-Stock Company Electric Power Plants, MOF = Ministry of Finance, PIU = project implementation unit, PIC = project implementation consultant.

IV. COSTS AND FINANCING

27. The project costs consist of (i) one turnkey contract for electromechanical generation equipment and hydraulic steel structure; (ii) one turnkey contract for civil structure repair and dam monitoring system; and (iii) consulting services contracts for (a) project management consultants, (b) various individual consultants; (iv) taxes and duties, and (v) financial charges. 28. The financing plan for the project is shown below. The government has requested a loan of $60,000,000, from concessional OCR loan and a grant of $40,000,000 equivalent from the Asian Development Fund resources. Both ADB loan and grant will be front-loaded. The government has also requested Eurasian Development Bank (EDB) to provide a loan of $45,000,000 equivalent to be provided as joint cofinancing and to be partially administered by ADB. The government will provide $15,000,000 of (i) taxes and duties and (ii) financing charges during implementation for EDB loan.16

16 The government will ensure that either (a) no taxes, duties or other mandatory payments are levied on the Project

expenditure within its territory; or (b) sufficient budgetary allocations are provided to EPP to cover the cost of such taxes, duties or other mandatory payments; or (c) EPP has other financing resources sufficient to cover the cost of such taxes, duties or other mandatory payments.

Table 1: Financing Plan

A. Detailed Cost Estimate by Category

($ million)

Source: Asian Development Bank estimates. a In 2018 prices b Include taxes and duties to be financed by the Government c Physical contingencies computed at 10%. Price contingencies computed at 1.5% onward on foreign exchange costs; and 5.0% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

Amount Share of Total

($ million) (%)

Asian Development Bank

Asian Development Fund Grant 40.0 25%

Concessional Ordinary Capital Resources Loan 60.0 38%

Eurasian Development Bank Loan 45.0 28%

Government 15.0 9%

Total 160.0 100%

Source: Asian Development Bank estimates.

Source

Foreign

Currency

Local

CurrencyTotal

1 Works (turnkey contract) 103.44 9.56 113.00 84.4%

2 Goods (dredging equipment) 2.10 0.90 3.00 2.2%

3

0.81 0.34 1.15 0.9%

4 Environment mitigation 0.02 0.09 0.10 0.1%

5 External audit 0.03 0.17 0.20 0.1%

6 Support for sector reform 0.40 0.10 0.50 0.4%

7 2.80 0.70 3.50 2.6%

Subtotal (A) 109.60 11.86 121.45 90.7%

B. Taxes and Dutiesb 10.96 1.42 12.39 9.3%

Total Base Cost (A+B) 120.55 13.28 133.84 100.0%

Physical Contingency 12.06 1.33 13.39 10.0%

Price Contingency 7.29 2.04 8.84 6.6%

Subtotal (C) 19.35 3.37 22.23 16.6%

D. Financial Charges During Implementation 3.93 - 3.93 2.9%

143.83 16.65 160.00 119.5%

C. Contingenciesc

Total Project Cost (A+B+C+D)

Item

($ million)% of Base

Cost

A. Investment Costsa

Project Implementation Consultant

Consulting Services (sustainable

development and gender diversity)

12

B. Allocation and Withdrawal of Loan/Grant Proceeds

Total Amount Allocated

for ADB Financing

(USD)

Category

1 Works (turnkey contract)** a 43,680,000 38.7% total expenditure claimed*

2 Interest during construction 2,120,000

3 Unallocated 14,200,000

Total 60,000,000

* Exclusive of taxes and duties imposed within the territory of the Borrower

** Subject to the conditions for withdrawal described in paragraph 6 of Schedule 3.

Percentage and Basis for

Withdrawal from the Loan Account

ALLOCATION AND WITHDRAWAL OF LOAN PROCEEDS

(Uch Kurgan Project)

ItemNumber

a [Financing allocated to this items under this Loan Agreement and the Grant Agreement will be utilized first at

100% of every claim with 58.57:41.43 ratio until the Loan and the Grant have been disbursed in full. Thereafter, this

item will be financed under the EDB Loan Agreement at 100% of every claim.]

Total Amount Allocated

for ADB Financing

(USD)

Category

1 Works (turnkey contract)** a 30,900,000 27.3% total expenditure claimed*

2 Goods (dredging equipment) 3,000,000 100% total expenditure claimed*

3


development and gender diversity) 1,150,000 100% total expenditure claimed*

4 Environment mitigation 100,000 100% total expenditure claimed*

5 External audit 200,000 100% total expenditure claimed*

6 Support for sector reform 500,000 100% total expenditure claimed*

7 Project Implementation Consultant 3,500,000 100% total expenditure claimed*

8 Unallocated 650,000

Total 40,000,000






ALLOCATION AND WITHDRAWAL OF GRANT PROCEEDS


Number Item

Percentage and Basis for

Withdrawal from the Grant Account

Category

1 Works (turnkey contract)** a 38,420,000 34% total expenditure claimed*

2 Unallocated 6,580,000

Total 45,000,000






ALLOCATION AND WITHDRAWAL OF EDB LOAN PROCEEDS


Number ItemTotal Amount Allocated Percentage and Basis for

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C. Detailed Cost Estimate by Financier ($ million)

ADB = Asian Development Bank, ADF= Asian Development Fund, EDB = Eurasian Development Bank Source: Asian Development Bank estimates. a In 2018 prices b Include taxes and duties to be financed by the Government c Physical contingencies computed at 10%. Price contingencies computed at 1.5% onward on foreign exchange costs; and 5.0% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate. d Financing for Item 1 will be first allocated 100% to the ADB Loan and Grant for every claim based on 64.7:31.55 ratio until the ADB Loan and the Grant have been fully disbursed. Thereafter, every claim for Item 1 will be 100% financed by the EDB Loan.

Item

Amount

% of Cost

Category Amount

% of Cost

Category Amount

% of Cost

Category Amount

% of Cost

Category

1 Works (turnkey contract) 43.68 38.7% 30.90 27.3% 38.42 34% - 0.0% 113.00

2 Goods (dredging equipment) - 0.0% 3.00 100.0% - 0.0% - 0.0% 3.00

3

- 0.0% 1.15 100.0% - 0.0% - 0.0% 1.15

4 Environment mitigation - 0.0% 0.10 100.0% - 0.0% - 0.0% 0.10

5 External audit - 0.0% 0.20 100.0% - 0.0% - 0.0% 0.20

6 Support for sector reform - 0.0% 0.50 100.0% - 0.0% - 0.0% 0.50

7 Project Implementation Consultant - 0.0% 3.50 100.0% - 0.0% - 0.0% 3.50

Subtotal (A) 43.68 36.0% 39.35 32.4% 38.42 31.6% - 0.0% 121.45

- 0.0% - 0.0% - 0.0% 12.39 100.0% 12.39

43.68 32.6% 39.35 29.4% 38.42 28.7% 12.39 9.3% 133.84

14.20 63.0% 0.65 4.0% 6.58 30.0% 0.80 3.0% 22.23

D. Financial Charges During Implementation 2.12 53.9% - 0.0% - 0.0% 1.81 46.1% 3.93

60.00 37.5% 40.00 25.0% 45.00 28.1% 15.00 9.4% 160.00

% of Total Project Cost 100%


development and gender diversity)

38% 25% 28% 9%


B. Taxes and Dutiesb

Total Base Costs (A+B)

C. Contingenciesc

Total (A+B+C+D)

ADB

Co-financing Loan GovernmentConcessional OCR Loan ADF Grant

Total Cost

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D. Detailed Cost Estimate by Output

($ million)

Source: Consultant and Asian Development Bank estimate. a In 2018 prices b Include taxes and duties to be financed by the Government c Physical contingencies computed at 10%. Price contingencies computed at 1.5% onward on foreign exchange costs; and 5.0% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

Item

% of Cost

categoryAmount

% of Cost

category

1 Works (turnkey contract) 113.00 113.00 100.0% - 0.0%

2 Goods (dredging equipment) 3.00 3.00 100.0% - 0.0%

3 1.15 - 0.0% 1.15 100.0%

4 Environment mitigation 0.10 0.10 100.0% - 0.0%

5 External audit 0.20 0.20 100.0% - 0.0%

6 Support for sector reform 0.50 0.50 100.0% - 0.0%

7 Project Implementation Consultant 3.50 3.50 100.0% - 0.0%

Subtotal (A) 121.45 120.30 99.1% 1.15 0.9%

12.39 12.39 100.0% - 0.0%

133.84 132.69 99.1% 1.15 0.9%

22.23 22.23 100.0% - 0.0%

D. Financial Charges During Implementation 3.93 3.93 100.0% - 0.0%

160.00 158.85 99.3% 1.15 0.7%

B. Taxes and Dutiese

C. Contingenciesc

Total Project Cost (A+B+C+D)


Total Cost

Output 1

Uch Kurgan HPP

modernization

Total Base Costs (A+B)

Output 2

Sustainable

development &

gender diversity

Consulting Services (sustainable development and

gender diversity)

16

E. Detailed Cost Estimate by Year

($ million)

Source: Consultant and Asian Development Bank estimates. a In 2018 prices b Include taxes and duties to be financed by the Government c Physical contingencies computed at 10%. Price contingencies computed at 1.5% onward on foreign exchange costs; and 5.0% on local currency costs; includes provision for potential exchange rate fluctuation under the assumption of a purchasing power parity exchange rate.

Item Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

2019 2020 2021 2022 2023 2024 2025

1 Works (turnkey contract) 113.00 0.34 1.10 39.55 45.20 16.95 5.65 4.21

2 Goods (dredging equipment) 3.00 0.01 0.03 1.05 1.20 0.45 0.15 0.11

3 1.15 0.00 0.01 0.40 0.46 0.17 0.06 0.04

4 Environment mitigation 0.10 0.00 0.00 0.04 0.04 0.02 0.01 0.00

5 External audit 0.20 0.00 0.00 0.07 0.08 0.03 0.01 0.01

6 Support for sector reform 0.50 0.00 0.00 0.18 0.20 0.08 0.03 0.02

7 Project Implementation Consultant 3.50 0.01 0.03 1.23 1.40 0.53 0.18 0.13

Subtotal (A) 121.45 0.36 1.18 42.51 48.58 18.22 6.07 4.53

12.39 0.04 0.12 4.34 4.96 1.86 0.62 0.46

Total Base Costs (A+B) 133.84 0.40 1.30 46.84 53.54 20.08 6.69 4.99

C. Contingenciesc 22.23 0.07 0.22 7.78 8.89 3.33 1.11 0.83

D. Financial Charges During Implementation 3.93 0.00 0.01 0.20 0.59 0.88 0.98 1.27

Total (A+B+C+D) 160.00 0.47 1.52 54.82 63.02 24.29 8.79 7.09

% Total Project Cost 100% 0% 1% 34% 39% 15% 5% 4%

Total

Cost


B. Taxes and Dutiesb

Consulting Services (sustainable development and

gender diversity)

F. Contract and Disbursement S-curve

Baseline projections – Project level

S-curve

Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total

2018 0.0 0.0 0.0 0.0 0.00 0.0 0.0 0.0 0.0 0.00

2019 0.0 0.0 7.1 113.0 120.10 0.0 0.0 0.0 0.36 0.36

2020 0.0 0.2 0.0 1.2 1.35 0.18 0.29 0.35 0.35 1.18

2021 0.0 0.0 0.0 0.0 0.00 6.38 10.63 12.75 12.75 42.51

2022 0.0 0.0 0.0 0.0 0.00 7.29 12.15 14.57 14.57 48.58

2023 0.0 0.0 0.0 22.2 22.23 3.32 5.54 6.64 6.64 22.15

2024 0.0 0.0 0.0 0.0 0.00 4.25 7.08 8.49 8.49 28.30

2025 0.0 0.0 0.0 0.0 0.00 0.29 0.48 0.58 0.58 1.92

143.68 145.00

Contract Awards (in USD million) Disbursements (in USD million)

Total Contract Awards Total Disbursements

0

20

40

60

80

100

120

140

160

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2019 2020 2021 2022 2023 2024 2025

Contract awards

Cum. Disbursements

18

Baseline projection – ADB Concessional OCR Loan

S-curve


2018 0.00 0.00 0.00 0.00 0.00 0.0 0.0 0.0 0.0 0.0

2019 0.00 0.00 0.00 43.68 43.68 0.0 0.0 0.0 0.1 0.1

2020 0.00 0.00 0.00 0.00 0.00 0.1 0.1 0.1 0.1 0.5

2021 0.00 0.00 0.00 0.00 0.00 2.6 4.3 5.1 5.1 17.0

2022 0.00 0.00 0.00 0.00 0.00 2.9 4.9 5.8 5.8 19.4

2023 0.00 0.00 0.00 14.20 14.20 1.1 1.8 2.2 2.2 7.3

2024 0.00 0.00 0.00 0.00 0.00 0.4 0.6 0.7 0.7 2.4

2025 0.00 0.00 0.00 0.00 0.00 0.3 0.5 0.5 12.0 13.2

57.88 60.00



0

10

20

30

40

50

60

70


2019 2020 2021 2022 2023 2024 2025

Contract awards

Cum. Disbursements

Baseline projection – ADB ADF Grant

S-curve


2018 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2019 0.00 0.00 6.80 30.90 37.70 0.00 0.00 0.00 0.11 0.11

2020 0.00 0.20 0.00 1.15 1.35 0.05 0.09 0.11 0.11 0.35

2021 0.00 0.00 0.00 0.00 0.00 1.91 3.19 3.83 3.83 12.75

2022 0.00 0.00 0.00 0.00 0.00 2.19 3.64 4.37 4.37 14.57

2023 0.00 0.00 0.00 0.65 0.65 0.82 1.37 1.64 1.64 5.47

2024 0.00 0.00 0.00 0.00 0.00 0.27 0.46 0.55 0.55 1.82

2025 0.00 0.00 0.00 0.00 0.00 0.20 0.34 0.41 3.98 4.93

40 40



0

5

10

15

20

25

30

35

40

45


2019 2020 2021 2022 2023 2024 2025

Contract awards

Cum. Disbursements

20

Baseline projection – EDB loan



2018 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2019 0.00 0.00 0.00 38.42 38.42 0.00 0.00 0.00 0.11 0.11

2020 0.00 0.00 0.00 0.00 0.00 0.05 0.09 0.11 0.11 0.35

2021 0.00 0.00 0.00 0.00 0.00 2.23 3.72 4.46 4.46 14.88

2022 0.00 0.00 0.00 0.00 0.00 2.19 3.64 4.37 4.37 14.57

2023 0.00 0.00 0.00 6.58 6.58 0.96 1.59 1.91 1.91 6.38

2024 0.00 0.00 0.00 0.00 0.00 0.32 0.53 0.64 0.64 2.13

2025 0.00 0.00 0.00 0.00 0.00 0.32 0.53 0.64 5.21 6.70

Total Contract Awards 45 Total Disbursements 45

S-curve

0

5

10

15

20

25

30

35

40

45

50


2019 2020 2021 2022 2023 2024 2025

Contract awards

Cum. Disbursements

21

G. Fund Flow Diagram

V. FINANCIAL MANAGEMENT

A. Financial Management Assessment

29. The Financial Management Assessment (FMA) for the proposed project in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects. The FMA considered the EPP, in its role as the proposed project executing agency (EA). 30. EPP is an autonomous corporate enterprise with an experienced financial management, accounting and reporting systems. EPP has capitalized on the Toktogul project experience. The financial management arrangements in place for project implementation are considered acceptable in EPP but several areas for improvement, such as internal audit and accounting computer system. The overall financial management risk is assessed to be “Moderate” for EPP. The project level financial management risk is rated “Moderate”, as EPP is the executing agency implementing the project. The following action plan is proposed for EPP to mitigate the identified risks:

22

Action Responsibility Resources Timing

Use the same financial management system of existing PIU from Toktogul project

PIU, EPP PIU Within 3 months after effectiveness

The existing financial staff of Toktogul project are deployed to Uch Kurgan project

PIU, EPP PIU within 3 months after loan and grant effectiveness

Review if additional financial staff to be recruited during the project implementation

PIU, EPP PIU During project implementation

Include Uch Kurgan project in EPP’s annual internal audit review

EPP EPP After loan effectiveness

B. Disbursement Arrangements for ADB and ADB-administered cofinancier Funds

31. Funds flow mechanism. It is expected that a majority of project expenditure will be incurred and withdrawn following the direct payment arrangements by EPP. Following ADB Loan Disbursement Handbook (2017, as amended from time to time).17 32. Direct Payment: at the request of the borrower, ADB will directly remit to the account of the contractor/consultant/supplier, by withdrawing the equivalent amount from the loan proceeds. 33. Commitment Letter: EPP will open a letter of credit in the name of the contractor/supplier, which will be confirmed by ADB through a commitment letter. Payments under the commitment letter will be made by ADB (to the extent of ADB share) directly to the negotiating bank by withdrawal of the equivalent amount from the loan proceeds. It is not expected to use this procedure, as it entails significant avoidable costs to open and maintain letters of credit for several years. 34. The loan and grant proceeds will be disbursed in accordance with ADB’s Loan Disbursement Handbook, and detailed arrangements agreed upon between the government and ADB. Online training for project staff on disbursement policies and procedures is available online.18 Project staff is encouraged to avail of this training to help ensure efficient disbursement and fiduciary control. 35. The project uses direct payment, commitment procedure and reimbursement procedures for all contracts.19 36. Before the submission of the first withdrawal application, the beneficiary 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..

37. For ADB-administered cofinancier funds, the borrower should submit one original of the WA and copies of supporting documents to EDB, and one original of the WA and copies of

17 Available at: http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf. 18 Available at: http://wpqr4.adb.org/disbursement_elearning. 19 ADB funded portion will follow ADB commitment procedure. ADB’s commitment procedure will not be used for EDB

funded portion.

http://www.adb.org/Documents/Handbooks/Loan_Disbursement/loan-disbursement-final.pdf

23

supporting documents to ADB. ADB will review each WA and advise EDB to make the necessary payment, if any.

38. The following conditions for withdrawals from the ADB loan and grant account will be applied: (i) EPP has executed a Subsidiary Financing Agreement, in form and substance satisfactory to ADB, and such Subsidiary Financing Agreement has become fully effective and legally binding on the Recipient and EPP in accordance with its terms; and (ii) an opinion satisfactory to ADB, of counsel acceptable to ADB, has been furnished to ADB, showing that the Subsidiary Financing Agreement has been duly authorized or ratified by, and executed and delivered on behalf of, and is legally binding upon the Recipient and EPP in accordance with its terms. C. Accounting

39. EPP will maintain, or cause to be maintained, separate books and records by funding source for all expenditures incurred on the project. EPP will prepare project financial statements in accordance with the government’s accounting laws and regulations which are consistent with international accounting principles and practices. D. Auditing and Public Disclosure

40. The ADB grant proceeds will be utilized by EPP to recruit an external independent auditor following ADB’s consultant recruitment guidelines, who shall carry out the audit of EPP’s project financial statements. EPP will cause the detailed project financial statements to be audited in accordance with International Standards on Auditing, by an independent auditor acceptable to ADB. The audited project financial statements together with the auditors’ opinion will be submitted in the English language to ADB within six months of the end of the fiscal year by EPP. 41. The annual audit report for the project accounts will include an audit management letter and audit opinions which cover (i) whether the project financial statements present a true and fair view or are presented fairly, in all material respects, in accordance with the applicable financial reporting framework; (ii) whether loan and grant proceeds were used only for the purposes of the project or not; and (iii) the level of compliance for each financial covenant contained in the legal agreements for the project. 42. EPP will also cause the entity-level financial statements to be audited in accordance with International Standards on Auditing, by an independent auditor acceptable to ADB. The audited entity-level financial statements together with the auditors’ report and management letter will be submitted in the English language to ADB within one month after their approval by the relevant authority. 43. Compliance with financial reporting and auditing requirements will be monitored by review missions and during normal program supervision, and followed up regularly with all concerned, including the external auditor. 44. The Government and EPP have been made aware of ADB’s approach to delayed submission, and the requirements for satisfactory and acceptable quality of the audited project financial statements.20 ADB reserves the right to require a change in the auditor (in a manner

20 ADB approach and procedures regarding delayed submission of audited project financial statements:

24

consistent with the constitution of the borrower), or for additional support to be provided to the auditor, if the audits required are not conducted in a manner satisfactory to ADB, or if the audits are substantially delayed. 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. 45. Public disclosure of the project financial statements, including the audit report on the project financial statements, will be guided by ADB’s Public Communications Policy (2011)21. After review, ADB will disclose the project financial statements for the project and the opinion of the auditors on the financial statements within 14 calendar days of the date of their acceptance by posting them on ADB’s website. The Audit Management Letter will not be disclosed.

• When audited project financial statements are not received by the due date, ADB will write to the executing

agency advising that (i) the audit documents are overdue; and (ii) if they are not received within the next six months, requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters will not be processed.

• When audited project financial statements have not been received within 6 months after the due date, ADB will withhold processing of requests for new contract awards and disbursement such as new replenishment of imprest accounts, processing of new reimbursement, and issuance of new commitment letters. ADB will (i) inform the executing agency of ADB’s actions; and (ii) advise that the loan may be suspended if the audit documents are not received within the next six months.

• When audited project financial statements have not been received within 12 months after the due date, ADB may suspend the loan.

21 Available from http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications

http://www.adb.org/documents/pcp-2011?ref=site/disclosure/publications

25

VI. PROCUREMENT AND CONSULTING SERVICES

A. Advance Contracting and Retroactive Financing

46. All advance contracting will be undertaken in conformity with ADB’s Procurement Guidelines (2016, as amended from time to time)22 and ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).23 The issuance of invitations to bid under advance contracting will be subject to ADB’s approval. The borrower, EPP have been advised that approval of advance contracting does not commit ADB to finance the project. 47. Advance contracting will be undertaken for the procurement of goods and works and recruitment of consulting firms and individual consultants. Advertisement, invitation for bids, shortlisting, issuance of requests for proposals, technical and financial evaluations may take place prior to effectiveness of the loan/grant agreements. B. Procurement of Goods, Works and Consulting Services

48. All procurement of goods and works will be undertaken in accordance with ADB’s Procurement Guidelines (2016, as amended from time to time). 49. EPP will use international competitive bidding (ICB) procedures for the procurement of goods and works. ADB’s standard bidding documents for (i) Procurement of Goods, and (ii) Plant: Design, Supply and Installation will be used. 50. Issued bidding documents for similar packages under Toktogul projects will be used as master bidding documents (MBDs). Should revisions be needed to the said MBDs due to a change in detailed design, Employer’s Requirements, change in scope or change in procurement arrangement, ADB must approve the revisions prior to use. 51. An initial 18-month procurement plan indicating threshold and review procedures, goods, works, and consulting service contract packages is in Section C. 52. All consultants will be recruited according to ADB’s Guidelines on the Use of Consultants (2013, as amended from time to time).24 Quality- and cost-based selection method (QCBS) method will be used for recruiting consulting firms with a standard quality cost ratio of 90:10 due to the complex nature of the rehabilitation work and technology adopted in the project, thus the importance of quality. External auditing and public information program consultants will be selected using least-cost selection (LCS). PIU support consultant will be recruited using individual consultants selection (ICS). The terms of reference for all consulting services are detailed in Section D.

22 Available at: http://www.adb.org/Documents/Guidelines/Procurement/Guidelines-Procurement.pdf 23 Available at: http://www.adb.org/Documents/Guidelines/Consulting/Guidelines-Consultants.pdf 24 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/

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

http://www.adb.org/Documents/Guidelines/Consulting/Guidelines-Consultants.pdf

http://www.adb.org/documents/handbooks/project-implementation/

26

C. Procurement Plan

Basic Data

Project Name: Uch-Kurgan Hydropower Plant Modernization Project (formerly Energy Sector Project)

Project Number: 49240-002 Approval Number:

Country: Kyrgyz Republic Executing Agency: OJSC Electric Power Plants

Project Procurement Classification: Category A Implementing Agency: N/A

Project Procurement Risk: Medium

Project Financing Amount: US$ 160,000,000 ADB Financing: US$ 100,000,000 Cofinancing (ADB Administered): US$ 45,000,000 Non-ADB Financing: US$ 15,000,000

Project Closing Date: 1 January 2025

Date of First Procurement Plan: 13 February 2019 Date of this Procurement Plan: 13 February 2019

Advance Contracting: Yes e-GP: No ADB = Asian Development Bank, EPP = Open Joint-Stock Company Electric Power Plant.

1. Methods, Thresholds, Review and 18-Month Procurement Plan

a. Procurement and Consulting Methods and Thresholds

53. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works. Any additional consultant required at the time of implementation will be hired as individual consultants.

Procurement of Goods and Works

Method Threshold Comments International Competitive Bidding for Goods

US$ 1,000,000 and Above

National Competitive Bidding for Goods

Between US$ 100,001 and US$ 999,999 The first NCB is subject to prior review, thereafter post review.

Shopping for Goods Between US$ 1 and US$ 99,999 International Competitive Bidding for Works

US$ 3,000,000 and Above

National Competitive Bidding for Works

Between US$ 100,001 and US$ 2,999,999 The first NCB is subject to prior review, thereafter post review.

Shopping for Works Between US$ 1 and US$ 99,999

Consulting Services Method Comments

Least-Cost Selection for Consulting Firm

For small and well-defined standard assignments, where well-established practices and standards exist.

Quality- and Cost-Based Selection for Consulting Firm

For complex consulting assignment, ratio of 90:10 will be applied

Individual Consultant Selection for Individual Consultant

Individual experts to assist EA in project implementation

b. Goods and Works Contracts Estimated to Cost $1 Million or More

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

27

Package Number

General Description

Estimated Value

Procurement Method

Review (Prior/ Post)

Bidding Procedure

Advertisement Date

(quarter/year) Comments

1 Dredging equipment and related services

3,000,000.00

ICB Prior 1S1E Q2 / 2019 Prequalification of Bidders: N Domestic Preference Applicable: Y Advance Contracting: Y

Bidding Document: Goods

2 HPP electromechanical generation equipment and hydraulic steel structure replacement

113,000,000.00

ICB Prior 1S2E Q1 / 2019 Prequalification of Bidders: N Domestic Preference Applicable: N Advance Contracting: Y

Bidding Document: Plant

ADB = Asian Development Bank, HPP = hydroelectric power plant, ICB = international competitive bidding, EDB = Eurasian Development Bank, EPP = Open Joint-Stock Company Electric Power Plants.

c. Consulting Services Contracts Estimated to Cost $100,000 or More

55. The following table lists consulting services contracts for which the recruitment activity is either ongoing or expected to commence within the next 18 months.

Package Number

General Description

Estimated Value

Recruitment Method


Advertisement Date

(quarter/year) Type of

Proposal Comments

CS-001 Project Implementation Consultant

3,500,000.00 QCBS Prior Q1 / 2019 FTP

Assignment: International

Quality-Cost Ratio: 90:10 Advance Contracting: N Comments: International/ national consultants to assist EPP in project implementation

CS-002 Consultants for Sustainable development and diversity in EPP

1,150,000.00 ICS Prior Q2 / 2019

Assignment: National

28

Expertise: various expertise Advance Contracting: N

CS-003 Environment Mitigation Expert

100,000.00 ICS Prior Q3 / 2019

Assignment: National Expertise: engineering Advance Contracting: N Comments: Various contracts comprising of female engineers for EPP HPP apprenticeship operations

CS-004 External Audit 200,000.00 LCS Prior Q3 / 2019 BTP

Assignment: International Advance Contracting: N

CS-005 Support for Sector Reform

500,000.00 ICS Prior Q2 / 2019

Assignment: International Expertise: various expertise Advance Contracting: N Comments: International/ national consultants to assist EPP in sector reform

CQS = consultant qualification selection, EPP = Open-Joint Stock Company Electric Power Plants, MOE = Ministry of Economy, PIU = project implementation unit.

d. Goods and Works Contracts Estimated to Cost Less than $1 Million

and Consulting Services Contracts Less than $100,000 (Smaller Value Contracts)

56. The following table lists smaller-value goods, works and consulting services contracts for which the activity is either ongoing or expected to commence within the next 18 months.

29

Goods and Works

Package Number

General Description

Estimated Value

Number of Contracts

Procurement Method


Bidding Procedure

Advertisement Date

(quarter/year)

Comments

None

Consulting Services

Package Number

General Description

Estimated Value

Number of Contracts

Recruitment Method


Advertisement Date

(quarter/year) Type of

Proposal Comments

None

2. Indicative List of Packages Required Under the Project

57. The following table provides an indicative list of goods, works and consulting services contracts over the life of the project, other than those mentioned in previous sections (i.e., those expected beyond the current period).

Goods and Works Package Number

General Description

Estimated Value

(cumulative)

Estimated Number of Contracts

Procurement Method

Review (Prior/Post)

Bidding Procedure

Comments

None

Consulting Services

Package Number

General Description

Estimated Value

Number of Contracts

Recruitment Method


Type of Proposal Comments

None D. Consultant's Terms of Reference

58. The Uch-Kurgan Hydropower Plant (HPP) started commercial operation in 1962. Its installations are dated from mid-1950’s and was the first Hydropower installation at the Naryn cascade. It is now the lowest stage of the Kyrgyz Naryn cascade and is mainly operated to produce base load for Kyrgyz Republic and Uzbekistan. The entire equipment is past its useful economic and functional life and needs major rehabilitation or replacement. 59. The Uch-Kurgan HPP consists of: (i) earth filled dam, (ii), reservoir, heavily silted, (iii) concrete powerhouse, integral part of the dam, (iv) hydraulic steel structures: 1 spillway gate, 8 bottom outlet gates with separate maintenance gates, 8 intake gates, 8 trash racks, 8 draft tube gates, 4 outlet gates to irrigation channel, gantry crane at dam site and gantry crane downstream for draft tube gates, 1 trash rack cleaning machine, (v) 4 Kaplan turbines with 45 MW power each, 18.5m to 36m head and rated discharge per unit of 190 m3/s, (vi) 4 x 56.25 MVA, 10.5 kV generators with nominal speed of 115.4 rpm, static excitation, (vii) generator circuit breakers (viii) 2 generators step-up main transformer 10.5 KV/115 kV, (ix) auxiliary transformers, and (x) 110 kV switch yard.

30

60. The refurbishment will consist of procurement of 1 goods (Package 1) and 1 turnkey contracts (Package 2). Package 1 will involve procurement of dredging equipment for EPP. Package 2 covers refurbishment of the dam structures and foundation, the concrete powerhouse, adaptations to the new turbine units, the power intakes and tailrace channels, bottom outlets, the spillway, ice protection walls, the upstream powerhouse concrete bridge, various repairs in the powerhouse including replacement of 4 turbine-generator units and auxiliary systems, refurbishment/replacement of the entire hydromechanical equipment including gantry cranes. 61. Under ADB’s project preparatory technical assistance, ADB recruited a consulting firm to conduct project due diligence for the proposed Uch-Kurgan HPP rehabilitation project. The project is expected to be considered by ADB Board in March 2019. 62. The objective of the executing agency, EPP is to improve the technical and operational performance of the Uch-Kurgan EPP and intends to contract the rehabilitation of the Uch-Kurgan EPP on an Engineering Procurement and Construction scheme. The consultant will work with the PIU of EPP. The assignment will cover project implementation services and total implementation period is approximately 5.5 years. 63. The major assignment is successful implementation of the two turnkey contracts through provision of technical assistance to the PIU of EPP implementation of works. The firm will be responsible for supporting PIU in project administration, design and engineering, services, contract and claims management, management control, procurement and expediting of equipment, materials control, inspection of equipment prior to delivery, shipments, transportation, control of schedule and quality, pre-commissioning and completion, performance guarantee testing during construction and commissioning of the project and through the defects liability period.

1. Objective and Scope of Work 64. The construction contracts will comprise the following:

Package 2, Rehabilitation of Civil Structures:

- Dam Rehabilitation

o Rehabilitation of the dam foundation by placing grout curtains and drainage curtains below the dam.

o Repair of concrete face concrete and expansion joints.

o Repair of parapet wall on the embankment dam.

o Reinstatement and upgrade of a dam monitoring system.

o Construction of mini-hydro facilities on the concrete dam

- Rehabilitation of Powerhouse:

o Removal and construction of new turbine runner chamber lining.

o Refurbishment of concrete draft tubes.

o Refurbishment of concrete structures in power intake, tailrace channels and spillway channels.

o Refurbishment of Bottom outlet waterways and installation of steel lining

31

o Refurbishment of transformer pits.

o Various Repairs in the powerhouse.

o Removal of ice protection walls and placement of floating barrier on the reservoir.

o Refurbishment of upstream powerhouse bridge.

Rehabilitation/Replacement of all 4 generating units including auxiliaries, hydromechanical equipment

- Replacement of turbines of all for turbine units

- Refurbishment of embedded turbine parts

- Replacement of turbine governor systems

- Replacement of generators

- Replacement of main step up transformers T1 and T2

- Replacement of unit control, automation and protection systems

- Replacement of unit bus bars and generator circuit breakers

- Replacement of electrical and mechanical auxiliary systems

- Replacement/Rehabilitation of powerhouse travelling cranes

- Refurbishment of the 110-kV switchyard

- Replacement/refurbishment of drainage system

- Replacement/refurbishment of firefighting system

- Replacement of ventilation and air conditioning system

- Replacement/refurbishment of sewage system

2. Scope of Works and Expected Deliverables

e. Inception Report

65. Within one month from the effectiveness of the contract, consultant will prepare and submit to PIU for approval of an Inception Report detailing the services the firm is to provide, including the capacity building in project management that the consultant will provide to PIU. The Inception Report will also include an overall project implementation schedule covering the bidding and construction stages. The implementation schedule is to be maintained throughout the assignment and updated as required, with the necessary explanation of the reason for any changes.

f. Turnkey Contracts for Uch-Kurgan HPP rehabilitation

66. The scope of works shall include but not limited to:

• Supervision, inspection and monitoring of the civil, mechanical and electrical works of the project to ensure that the works are carried out in accordance with the agreed schedules, design and specifications, and that the quality meets at the minimum, the required technical standards, specifications, systems and procedures;

32

• Regularly review manufacturing schedules and delivery schedules of equipment by the contractor.

• Monitor manufacturing progress and works by regular inspections to ensure the compliance to specifications and specified standards.

• Assist PIU in implementation of EMP;

• Perform environmental monitoring;

• Assist PIU in updating the IEE and EMP;

• Certify volume of works completed and/or as installed based on actual progress.

• Certify the payments to the contractors, after checking and verifying the contractor’s measurements

• Report regularly financial status of the project to PIU by:

o Reporting the disbursement results and financial positions o Actual cash flow position o Performing detail variation analysis between estimated/budgeted position

compared with the actual position o Assessing future requirements and payments schedules o Recommending possible measures for reducing expenditures, if any

• Monitor compliance with environmental mitigation and management plans, and the contractor's health and safety plans;

• Preparation of work related certificates as appropriate;

• Review of supplier’s equipment design and perform shop and/or witness tests/pre-delivery and on-site inspections and acceptance of the equipment as appropriate.

• Coordinate contractors’ activities and ensure that all work programs are coordinated, utilizing the state of the art software and is presented following the international construction standards format.

• Review and approve erection and construction drawings to ensure technical compliance and compatibility with specifications and other requirements.

• Review and approve factory testing procedures and factory test results submitted by the contractors

• Witness factory testing of major equipment and issue corresponding certificates

• Review and approve commissioning test procedures submitted by the contractor.

• Prepare a program for inspection and testing.

• When works are ready for inspection and test for substantial completion

o Examine the works and assure that they are ready for operation o Issue taking over certificate to contractors, if the works are satisfactory for

operation or instruct the contracts’ remedial work and/or further test if failed the verification test.

• Undertake the review, monitoring, supervision of the EPC Contractor’s work-related occupational health and safety program activities. In coordination with the EPC contractor, recommend appropriate revision if deemed necessary to ensure expedient,

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effective and efficient implementation of the safety work program of the EPC Contractor;

• Provide regular project reporting to EPP and other project stakeholders;

• Any other works not sufficiently described in the scope of services, but which can be reasonably inferred as required and necessary to be undertaken to complete the project are presumed included in the scope of works of the Consultant.

Additional services

• The supervisor of the consultant may also be required by EPP to undertake additional services as necessary to resolve any critical problems identified during the implementation of the program, as such services are not reasonably covered by the scope of services in the contract.

g. Training and Capacity Building

67. Training and mentoring of local contractors, engineers, EPP representatives and operators is a crucial part of the project. A capacity building program will require development and implementation which should include:

(i) Regular training of EPP engineering staff supporting the management of implementation,

(ii) Development of a program of workshops for EPP staff during project implementation,

(iii) Several operation and maintenance seminars for EPP staff on nearing project completion.

68. EPP should be involved at all stages of the project to gain understanding of the project process. EPP training and capacity building should be provided both to the EPP Project Management Unit in Bishkek and also to EPP provincial staff. 69. Upon commencement of the project, all training records will be used to build a capacity building plan to be agreed with the EPP. 70. Training and mentoring should be an important part of recruitment or sub-consulting of Kyrgyz staff to support the project.

3. Team Compositions and Qualifications Requirements for Key Experts

71. The consultant should be from a consulting engineering firm with adequate international experience in detailed design, selection, monitoring, supervision and co-ordination of contractors, commissioning, operation and maintenance of hydropower project. Specific experience is required in the field of rehabilitation of live hydropower projects. Since the work will be carried out while Uch-Kurgan HPP powerhouse and switchyard are in operation, it is essential that the firm is familiar with the health, safety, and commercial operational aspects of working next to live electrical equipment. The consultant should meet ADB’s eligibility criteria. 72. The following table give an estimate of the International and National Experts and person months required for the project:

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Positions International consultants

National Consultants

1 Team Leader 22 -

2 Deputy Team Leader - 60

3 Resident site manager 65 -

4 Mechanical Engineer 23 40

5 Electrical Engineer 23 40

6 Civil Engineer 23 40

7 Hydro-mechanical engineer 19 30

10 Environmental, Health and Safety Expert

12 28

Subtotal 186 238

Note: All international experts must spend at least 70% of time in the field (Bishkek or Uch-Kurgan HPP site, resident site manager and deputy site manager must spend 100% of time in Kyrgyz Republic with majority of time on Uch-Kurgan HPP site.

73. The team will comprise a resident site team and visiting specialists. It is preferable that the international team leader, resident site manager and visiting specialist should be drawn from the permanent staff of the consulting firm. 74. The terms of reference outlining the qualifications and specific areas of responsibility/job description for each expert are given below. In addition, the experts are expected to perform any other reasonable duty that may not be mentioned in the job description, but it is expected to be performed in an assignment of this nature. 75. The specific tasks and qualifications for international consultants are outlined below.

Position Qualification Description Team Leader The team leader must possess a university degree in

electrical/mechanical/civil engineering from a reputable university. He/she is preferred to have at least 10 years post graduate experience in design and construction supervision of hydropower plants, at least 3 years of which involved in supervision at senior level of the refurbishment of a hydropower plant of similar capacity to the Uch-Kurgan HPP. He/she should have wide experience in mechanical, electrical or civil engineering aspects of similar projects as well as comprehensive understanding of the operational significance of the rehabilitation process. In addition, he/she should have experience in contracts and claims management. He/she should be aware of the issue relating to the health and safety of personnel working in close proximity to operating plant.

The team leader will be the primary interface between the consultant and EPP. In particular he will be responsible for: - Leading the consultants team

throughout the HPP rehabilitation. - Start-up operations. - Liaison with PIU throughout the

assignment. - Managing the design approvals,

preparation of reports and contracts and claims management.

- Overseeing implementation of both contracts in accordance with the scope of services.

Resident site manager

The resident site manager must possess a university degree in electrical/mechanical engineering. He/she preferably has at least 8 years of post-graduate experience in design and construction supervision of hydropower plant, at least 3 years involved in supervision at senior level of the refurbishment of a hydropower plant of similar capacity to the Uch-Kurgan HPP. He/she should have wide experience in

The Resident Site Manager will be the main interface between the consultant and EPP whilst the team leader is not in Kyrgyz Republic. The resident site manager will be responsible for: - Carrying out detailed site

supervision by himself and his

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mechanical, electrical or civil engineering aspects of similar projects as well as comprehensive understanding of the operational significance of the rehabilitation process. He/she should be aware of the issue relating to the health and safety of personnel working in close to operating plants.

team, acting under the team leader’s overall management.

- Issuing instructions to the contractors during the contract period, approve payment, issue variation orders, prepare and submit reports as defined.

- Witnessing tests on commissioning and issuing the operational acceptance certificates.

- Providing support to PIU during the Defect liability period and issue the Completion Certificate

- Delivering capacity building program to EPP staff

- Ensure that the contractor provide adequate training to the EPP staff under their contract

- Ensure safety in the workplace.

Mechanical Engineer

The mechanical engineer must possess a university degree in mechanical engineering from a reputable university, preferably with at least 8 years post graduate experience in design, installation, testing and commissioning of turbines and other mechanical equipment. Wide experience in mechanical engineering aspects of similar projects. Comprehensive understanding of the operational significance of the rehabilitation process is an advantage.

The mechanical engineer will review the design submitted by the turnkey contractor, support the team leader and electrical engineer and advise on mechanical aspects of the design documents, conducts site visit at key stages of both contracts. He/she will support the national mechanical engineer on technical issues both from his home office and during site visits. He/she will oversee manufacture and factory testing of equipment, as well as the installation, testing and commissioning of the HPP.

Electrical Engineer

The electrical engineer must possess a university degree in electrical engineering from a reputable university. He/she is preferably has at least 8 years of graduate experience in the design, installation, testing and commissioning of electrical equipment. Wide experience in electrical engineering aspects of similar projects. Comprehensive understanding of the operational significance of the rehabilitation process is an advantage.

The electrical engineer will review the design submitted by the turnkey contractor, support the team leader and mechanical engineer and advise on electrical aspects of the design documents, conducts site visit at key stages of both contracts. He/she will support the national electrical engineer on technical issues both from his home office and during site visits. He/she will oversee manufacture and factory testing of equipment, as well as the installation, testing and commissioning of the HPP.

Civil Engineer The civil engineer must possess a university degree in civil engineering from a reputable university. He/she preferably has at least 10 years of post-graduate experience in rehabilitation of dams, civil structures, and powerhouses. Wide experience in civil engineering aspects of similar projects. Comprehensive understanding of the operational significance of the rehabilitation process is an advantage.

The civil engineer will review the design submitted by the turnkey contractor, support the team leader, mechanical and electrical engineer and advise on civil engineering aspects of the design documents, conducts site visit at key stages of both contracts. He/she will support the national civil engineer on technical issues both from his home office and during site visits.

Hydro-mechanical engineer

The hydro-mechanical engineers (gates) must possess a university degree in civil, mechanical or structural engineering from a reputable university. He/she

The hydro-mechanical engineer will review the gate designs submitted by turnkey contractor, conducts site visit at

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preferably has at least 10 years post-graduate experience in design, installation, testing and commissioning of hydraulic gates. Wide experience in hydro mechanical engineering aspects of similar projects. Comprehensive understanding of the operational significance of the rehabilitation process is an advantage.

key stages. He/she will support the leader and site engineer and advise on technical issues relating to the rehabilitation of the hydraulic gates both from his home office and during site visits. He/she will oversee manufacture and factory testing, as well as the installation, testing and commissioning of the gate rehabilitation.

Environment, health and safety expert

The expert must possess a university degree in environmental sciences/ occupational health science from a reputable university. He/she preferably has at least 10 years post graduate experience in the mitigation of environmental/social impacts caused through hydropower constructions contracts.

The environment, health and safety expert will provide support and guidance to the national safeguard specialist to ensure that the consultant responds appropriately to the environmental, health, safety and social issues. Including review of the approval of the contractor’s environmental mitigation plans and the monitoring of the contractors’ compliance with the approved plans. He/she should ensure contractor adhere to international occupational health and safety regulations on site. In addition, he/she should provide support in updating the environmental assessment and EMP as required; undertake monitoring and audits during project implementation and provide necessary monitoring reports; provide support, train and assist the PIU as required within the environmental area; address unexpected impacts that arise during implementation, prepare Corrective Action Plans (CAP) and implement them; support with public consultations and awareness programs as required by the project.

All national consultants

All national consultants should have relevant qualifications with at least 7 years of experiences preferably in the power sector.

The national team will assist the international experts throughout the entire rehabilitation project.

i. Reporting requirements and time schedule for deliverables

76. The consultant shall: 1. Monitor EPP compliance with the ADB loan/grant agreement covenant and assist

the PIU to prepare and submit reports to ADB, track project outputs, outcomes and impacts against ADB’s Design and Monitoring Framework.

2. Prepare monthly progress report, quarterly reports, project completion report and other reports deemed necessary by EPP, ADB.

3. Maintain records of constructions activities which will be eventually needed to prepare completion report, operations and maintenance manual and as-built drawings. They shall include records of: (i) Investigation and monitoring (ii) Drawings (iii) The consultant’s activities

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(iv) The contractor’s activities (v) Payments (vi) Quality Control (vii) Progress of works (viii) Safety control (ix) Notable events (x) Other as required

4. Provide the following reports 5. Inception report 6. Monthly progress report 7. Quarterly progress report, to be prepared and submitted within one month from

the end of the quarter that is being reported. The format of the progress reports shall be drafted by the consultant and endorsed by PIU and ADB, and they should include not limited to, physical progress against schedule and a plan for next term, disbursement against schedule and, quality test results, safety control, survey of quantity when required, environmental monitoring, progress photos, critical issues, mitigation plans in case of delays and any other issues be raised. Quarterly progress reports shall be in a format consistent with ADB’s project performance reporting system.

8. Annual report, to be submitted within one month from the end of the year that is being reported. Variation orders and any other documents deemed necessary by PIU and ADB will be prepared. Consolidated annual reports will include (i) progress achieved by output as measured through the indicator’s performance targets, (ii) key implementation issues and solutions, (iii) updated procurement plan and (iv) updated implementation plan for next 12 months.

9. Semi-annual environmental monitoring report 10. Completion report in a form acceptable to EPP and ADB to be submitted within

one month after project completion. 11. Other reports

77. All reports are to be submitted in draft for review and approved by PIU and ADB following which the final version to be submitted after revision, if required. All final versions should be submitted to EPP and ADB.

78. The consultant will submit a report in English and Russian language and will provide soft and hard copies.

F. Clients Input and Counterpart Personnel

79. Accommodation for the consultant’s personnel during constructions – During construction period, furnished accommodation for the consultant’s personnel on site will be provided by the turnkey contractors as part of their contract. The consultant is to specify his requirements in the proposal. 80. Office equipment and maintenance – EPP will provide office space in Bishkek and on site. The consultant is to provide and maintain the office equipment that he required both in Bishkek and on site. Operational cost needs to be included for purchase of equipment and cost of maintenance of the office and office equipment to be included as an expense item.

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G. Period 81. The expected contract period is from April 2019 to Dec 2024.

B. Individual Consultants: Terms of Reference

1. National Environment Expert – EPP PIU Support Consultant (National, 24 person-

months) 82. The objective is to support the EPP PIU-Uch Kurgan in the environment aspect of ADB financed Uch Kurgan HPP Modernization project. The consultant will work for EPP PIU-Uch Kurgan in monitoring and supervising the implementation of Environment Management Plan (EMP). 83. The individual consultant will report to the head of the EPP PIU-Uch Kurgan. The duration of the assignment is 24 months, intermittently over 3 years. Minimum qualification: university degree with at least 5 years of working experience in the field of health, safety, and environment. 84. Specific tasks include:

(i) Review and endorse the environmental section of periodical project progress reports, ensure the quality of the bi-annual environmental monitoring reports before submission to EPP for submitting it to ADB and public disclosure in accordance with ADB Safeguard Policy Statement requirements;

(ii) Supervise the development of an Emergency Response Plan and be responsible for quality assurance before submission to EPP for approval and then to ADB;

(iii) Coordinate with the EPP Department of Service of Reliability and Safety to ensure the compliance with EMP and the contractor's health and safety plans;

(iv) Support project management consultant in reviewing the technical specifications and operating procedures related to the waste management and carry out the overall supervision of waste disposal;

(v) Perform regular site audits including project site, storage area, and the roads used for transportation of equipment to the project site and transportation of oils and other wastes from the project site to the storage and disposal sites, to ensure that all mitigation measures are implemented adequately. In case of discrepancies the consultant shall report immediately to EPP for implementing proper actions to establish the compliance with the EMP; and

(vi) Supervise, implement and review the updated Initial Environmental Examination (IEE) as necessary.

2. National Project Coordinator/Procurement Expert – PIU Support Consultant

(National, 36 person-months)

85. National Project Coordinator/Procurement Specialist will be hired for assistance project implementation under the Uch Kurgan HPP Modernization project. The consultant will report directly to the EPP PIU-Uch Kurgan. The duration of the assignment is 3 years. Minimum qualification: university degree in engineering with at least 5 years of working experience in energy sector. 86 Specific tasks include:

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(i) Assist in preparation of all procurement and consultant recruitment related communication with ADB, consulting firms in accordance with ADB’s Guidelines on the Use of Consultants, and ADB’s Guidelines in Procurement. Activities includes: prepare advertisement and expression of interest; prepare request for proposals; assist the EA in conducting technical and financial evaluation of proposals and in preparing technical and financial evaluation report; assist in holding of Consultant Selection Committee (CSC) meeting(s) and preparation of required documents; Assist in consolidating Submission 1-4 for submission to ADB; and Coordinate and facilitate communication between ADB and EA on Submission 1-4, Assist EA in holding negotiations with the most technical responsive bidder and in preparing the required documents for such negotiations; assist in finalizing of contract and issuance of notice to proceed to winning consultant; assist in preparation of contract variation(if needed).

(ii) Prepare all required documents necessary for carrying out of international and local bids for procurement of international and local consultants’ services, goods and construction work;

(iii) Carry out bids, prepare reports on bids, agreement with the ADB; (iv) Contract management (contract preparation, signing, supervise the execution of

contracts, amending, closeout etc.); (v) Carry out technical assessment of preliminary and final subproject drafts, maintain

all required procedures on approval of design estimates, its registration and transferring to the contractor for implementation;

(vi) Provide assistance and undertake consultation of project and construction organizations.

(vii) Ensure that the project activities comply with conditions set out in the Financing Agreement between the Government and ADB.

(viii) Any other related work as and when requested by EA.

3. National Financial Management Expert – PIU Support Consultant (national, 24 person-months)

87. National Financial Management Expert will be hired for assistance project implementation under the Uch Kurgan HPP Modernization project. The consultant will report directly to EPP PIU-Uch Kurgan. The duration of the assignment is 24 months, intermittently over 3 years. Minimum qualification: university degree in accountancy with at least 5 years of working experience in financial/energy sector.

88. Specific tasks include: (i) Support preparation project financial statements in accordance with IFRS reporting

system; (ii) Establishment and maintenance of quality financial management system on the

project including budgeting, accounting, internal control, preparation of reports, and flow of funds satisfying ADB;

(iii) Maintenance of the ADB project financial statement system; (iv) Ensure proper management of project funds and their payment in accordance with

the requirements of the accounting and financial procedures of ADB and the Kyrgyz Republic;

(v) Ensure timely reporting of financial activities and monitoring and the provision of all information, documents for internal and external auditors of the project;

(vi) Preparation of quarterly financial reports;

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(vii) Preparation of annual financial report and explanatory notes in accordance with ADB requirements;

(viii) Be responsible for timely conducting of project financial statements audits by independent auditors and for the timely provision of the auditors' report to the ADB and the Government of the Kyrgyz Republic;

(ix) Monthly preparation of the general ledger to ensure the accuracy and completeness of accounting operations by pointing and correcting any errors and distortions;

(x) Monitoring the status of the budget for project components and expenditure categories and reporting to the head of PIU for any significant differences and make recommendations for appropriate action;

(xi) Maintenance of the computer-based accounting system (1C Accounting program) which helps to work out internal financial reports and which ensure timely delivery of internal reports in a form consistent with the requirements of ADB and other donors, and in accordance with the requirements of project financial reporting;

(xii) Preparation of applications for withdrawals from the project account in accordance with the guidance on disbursement and the ADB requirements;

(xiii) Ensure proper operation of bank accounts of the project, including the special account and project accounts in accordance with the procedures of accounting and internal control;

(xiv) Maintain records and control of the basic funds of projects and participate in the annual commission on the inventory;

(xv) Performance of other duties as instructed by project director; and (xvi) Ensures that the project activities comply with conditions set out in the Financing

Agreement between the government and ADB.

4. SAFEGUARDS

89. The project is classified as environmental category B under ADB’s Safeguard Policy Statement (SPS 2009). An initial environmental examination (IEE) including an EMP was prepared to meet requirements of SPS 2009 and national regulations and disclosed per ADB public disclosure requirements. As necessary, the IEE will be updated by the PIU and the PIC based on detailed design by the turnkey contractor. 90. Following potential environmental impacts might be associated to the rehabilitation project: (i) safety and health issues during construction; (ii) increased truck movements during construction period through inhabited areas; transportation of heavy equipment, construction materials and wastes; (iii) disposal of iron/steel, asbestos and other wastes, including obsolete equipment; (iv) construction waste from civil works and some domestic waste generated by the workers; (v) risk of water and soil contamination; and (vi) management and disposal of sediments. The EMP specifies adequate mitigation measures and monitoring plans to cover these impacts, including management and disposal of sediments, if not contaminated. Oils and scrap metals will be kept safe at the on-site storage area, which will be improved with financing under the project. EPP is responsible for ensuring that licensed companies, under the monitoring and supervision of the PMC and PIU, recycle and dispose oils and scrap metals. 91. The PIU will be responsible for EMP implementation with assistance from the Project Implementation Consultants (PIC) and staff of EPP’s Service of Reliability and Safety Department. Environmental mitigation measures will be included in the bidding documents. The cost for implementing the EMP will be covered by the loan and the grant. The costs of mitigation measures

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will be included in the turnkey contract, and the cost for environmental monitoring will be included in the consulting services of the PIC. 92. PIU will be responsible for EMP implementation and will ensure that EMP will be adequately included in bidding documents and all environmental mitigation measures will be included in construction contracts. PIU and PIC will be responsible to ensure the Contractor prepares SEMPs and PIU will approve all SEMPs before start of any construction works. PIU is responsible for transportation from the storage site and final disposal of scrap metals and released oils. Monitoring of environmental quality and the implementation of mitigation measures will be performed by the PIU, with support from the PIC as required, with sufficient TORs and staff-time for this task. The monitoring results will be included in the project quarterly progress reports and semi-annual environmental reports to be submitted to ADB. PIU will submit semi-annual safeguard monitoring reports within 30 days after reporting period to ADB and disclose relevant information from such reports to affected persons promptly upon submissions. PIU will be responsible for establishing and implementing the Grievance Redress Mechanism (GRM) in accordance with the IEE/ EMP and ensure the contractor follows the procedures. 93. PIU will promptly inform ADB of the occurrence of any risks or impacts, with detailed description of the event and proposed corrective action plan if any unanticipated environmental and/or social risks and impacts arise during construction, implementation or operation of the Project that were not considered in the initial environmental examination or any other safeguard document. PIU will report any actual or potential breach of compliance with the measures and requirements set forth in the IEE and EMP promptly after becoming aware of the breach. If required, the PIU shall (i) assess the significance of any unanticipated impacts; (ii) evaluate the options available to address them; and (iii) prepare or update the IEE and EMP to incorporate these impacts 94. Public consultation were conducted during the project design and will continue throughout project implementation. Any environmental grievances will be handled in accordance with the grievance redress mechanism established for the project. According to EMP, a national and a project-specific GRM will be established to receive and manage any community concerns which may arise due to the project. PIU, working through the Environment and social safeguards staff will have final responsibility for management, implementation and reporting of the GRM. 95. Due to uncertainty with regards sediments contamination, before any dredging activity starts, sampling and analysis of deep sediments must be undertaken. Therefore, the following Action Plan has been agreed and must be followed by EPP:

1. Sediments Sampling and Analysis - Before any dredging activity, deep sediment sampling and analysis to be undertaken

by a reputable company; - Prior sampling, a Sediment Sampling and Analysis Plan to be prepared and

submitted to ADB for approval – plan will contain, but not limited to: parameters to analyze (e.g. heavy metals, organic contaminants, agricultural contaminants, radioactive materials, etc), proper sampling and transport plan to recognized and certified labs, methodologies, standards to use for comparison, etc;

- Once results of the analysis are ready, an assessment on the level or not of contamination must be undertaken, including comparing the results with international standards.

2. Scenario 1 – No Contamination

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- In case of no contamination, the following steps for dredging, transport, management and disposal will be undertaken: [follow IEE and design proposal for Option 1 – No Contamination of Sediments].

3. Scenario 2 – Contaminated Sediments

- Decide according to the level of contamination if dredging is still to be carried out; - If yes, agreement with the Government/ EA should be sought on how to deal with the

contaminated sediments, and a plan should be prepared and include the following as a minimum: dredging agreement, schedule, dredging activities, dredging management, transport, storage sites, treatment, disposal and monitoring requirements;

- ADB must review the plan and if cleared, the project will be re-assessed for recategorization, the safeguard documents (i.e. IEE/ EMP) will be updated and cleared by ADB;

- Dredging to start following the agreement and proposed plan. 96. Prohibited investment activities. Pursuant to ADB’s SPS 2009, 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 2009. 97. Involuntary resettlement. The project is classified as Category C for involuntary resettlement impacts under ADB’s SPS 2009. During the project preparation stage, it was confirmed that all the civil works will be implemented within the confines of the existing Uch-Kurgan HPP where no land acquisition or livelihood impacts will occur and that all the lands for sediment disposal sites are public lands. However, if contaminated sediments are identified through sampling tests in deep layers during project implementation stage, all the actions need to be conducted based on the IEE. Land acquisition and resettlement plan needs to be prepared if land acquisition and resettlement is required for addressing issues related, but note limited, to contaminated sediment. Until land acquisition and resettlement plan is prepared, approved and fully implemented, civil work at the impact site cannot start. Public consultation was conducted in August 2018. Grievance Redress Mechanism was prepared and will be functional when project is approved. 98. Indigenous peoples. The project is classified as Category C under ADB’s SPS 2009. The project is not expected to affect Indigenous people as defined under the SPS.

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VIII. GENDER AND SOCIAL DIMENSIONS

99. Gender. There will be some gender element proposed for this project, and monitoring will be required during project implementation. The project is assigned “some gender elements” on the basis that it will by its nature directly improve women's access to reliable electricity and create new economic opportunities. Some efforts were also made during project preparation to include the following elements to enhance benefits to women: (i) recruitment of 10 women-engineers in EPP for two years under the project; (ii) the team will be trained to establish a “best practice” and modern business process culture supporting the new ERP system to be installed; (iii) the team will be equipped with high-technology software and hardware to create a new micro-culture; and (iv) the program will also create a mentoring scheme creating opportunities for secondment for women staff in other international organizations including ADB. List of activities and corresponding timelines are presented in the table below. For monitoring of this initiative, the human resources department will publish gender segregated women employment data at all level of the organization.

Women Engineers’ Program Key Activities and Milestones

Public information dissemination: Q1 2019 to Q2 2019

Recruit at least 10 newly-graduates female engineers: Q3 2019

Training for at least 10 new female engineers: Q1 2020

Apprenticeship/assignment to HPP operations: Q2 2020-Q1 2021

Performance evaluation of at least 10 new female engineers: Q2 2021

Program graduation: Q3 2021

100. Social Dimensions. The project does not entail impacts on affordability or operational employment opportunities. During construction, the civil works contractor will be required to ensure equal opportunities for all social groups, equal work regardless of gender, and prohibition of child labor. The contractor will also be required to undertake HIV/AIDS awareness activities with imported workers.

IX. PERFORMANCE MONITORING, EVALUATION, REPORTING AND

COMMUNICATION A. Project Design and Monitoring Framework

Impact the Project is Aligned with Operational performance of the Kyrgyz Republic power sector improved (Concept for Development of Energy Sector of The Kyrgyz Republic 2030)a

Results Chain Performance Indicators with Targets and

Baselines

Data Sources or Reporting

Mechanisms

Risks

Outcome Hydropower generation performance in the Naryn River cascade improved

By 2025: Uch-Kurgan hydropower plant (HPP) annual electricity generation increased to 1,064 GWh (2017 baseline: 980 GWh).

EPP annual reports; Uch-Kurgan HPP annual operations report

Reduced water volume from prolonged drought reducing total power generated.

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Outputs 1. Uch Kurgan HPP facility modernized

By 2024: 1a. Uch Kurgan HPP installed capacity increased to 216 MW with at least 40 years of economic life (2017 baseline: 180 MW approaching end of life) 1b. All 4 generating units fully operational (2017 baseline: 3 units operating at 100% capacity, 1 unit operating at 80% capacity) 1c. Hydraulic steel structure reinforced (2017 baseline: not applicable) 1d. Dam civil structural support established (2017 baseline: not applicable) 1e. All 8 bottom outlet gates operational (2017 baseline: 4 operational)

1a-b: EPP annual report; Uch Kurgan HPP annual operations report; commissioning and operational acceptance certificates 1c: Commissioning and operational acceptance certificates 1d: Commissioning and operational acceptance certificates; Uch Kurgan dam stability annual reports 1e: Commissioning and operational acceptance certificates

Changes in transboundary water- sharing arrangements altering downstream release requirements Seismic activities, landslides and other force majeure conditions limiting rehabilitation works

2. EPP’s commitment to operational sustainability and diversity reinforced

2a. At least 10 newly-graduated women engineers engaged in HPP operations and maintenance (2017 baseline: none) 2b. EPP engineers’ accreditation program established (2017 baseline: not applicable)

2a-b: EPP annual report on personnel and human resources

Low participation because of limited awareness

Key Activities with Milestones

Output 1: Uch Kurgan HPP facility modernized

1.1 Prepare bidding documents: Q4 2018.

1.2 Bid and award of turnkey contracts: Q2-Q4 2019.

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1.3 Award EPC and supply contracts: Q4 2019 (for HEM, HSS and dam stability); Q4 2019

(dredging equipment)

1.4 Dredge sediment deposits: Q2 2020-Q4 2024.

1.5 Rehabilitate civil and dam structure: Q4 2020-Q1 2022.

1.6 Refurbish hydraulic steel structure: Q4 2020-Q1 2022.

1.7 Replace electromechanical generation equipment: Q4 2022-Q1 2024.

1.8 Test and commission: Q1 2025-Q2 2025.

Output 2: EPP commitment to operational sustainability and diversity reinforced

2.1 Coordinate with technical universities on the selection of newly graduated women engineers

for the EPP program: Q2 2019

2.2 Engage under 2-year contract selected women engineers for the program: Q3 2019

2.3 Monitor performance of women engineers under the program: Q1 2020 to Q4 2022.

2.4 Assess EPP’s capacity gap in implementing externally-funded projects and maintaining the

same after completion: Q3 2019

2.5 Design EPP project implementation and engineering accreditation program: Q4 2019

2.6 Train EPP personnel on project implementation (safeguards monitoring, procurement,

financial management) as well as project operations and maintenance: Q1 2020-Q4 2023

Project Management Activities

1. Engage project implementation consultant: Q1 2019-Q3 2019.

2. Hold kick-off meeting with executing agency: Q3-Q4 2019.

3. Undertake procurement activities: Q1 2019-Q4 2019.

4. Supervise project implementation: Q3 2019-Q4 2024.

5. Finalize reports: Q3-Q4 2024.

Inputs Asian Development Bank Ordinary capital resources: $60.0 million (concessional loan) Special Funds resources: $40.0 million (Asian Development Fund grant) Eurasian Development Bank (Loan): $45.0 million (joint cofinancing) Government: $15.0 million

Assumptions for Partner Financing NA

EPC = engineering, procurement and construction, EPP = Electric Power Plants, GWh = gigawatt-hour; HPP = hydropower plant, GWh = gigawatt-hour, MW = megawatt, Q = Quarter. a Government of the Kyrgyz Republic. 2016. Concept for Development of Energy Sector of The Kyrgyz Republic 2030.

Bishkek. Source: Asian Development Bank.

___________________________________ __________________________________

F. Sean O’Sullivan Director, Energy Division Director General Central and West Asia Department Central and West Asia Department

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B. Monitoring

101. Project performance monitoring. Following indicators will be updated in the quarterly progress reports and at the time of semi-annual meetings and the midterm review expected in 2 years from the date of project effectiveness.

Indicator

Units

EA responsible for data collection and

Reporting

• Additional generating capacity by Uch-Kurgan HPPs MW EPP

• Load factor for Uch-Kurgan HPPs % EPP

• Monthly volume of power traded within Kyrgyz Republic, by source

kWh/month, $/kWh, $ month

EPP

• Monthly volume of power traded between Kyrgyz Republic and CAPS

kWh/month, $/kWh, $ month

EPP

• EPP financial statement n/a EPP

EPP = Open Joint-Stock Company Electric Power Plants, HPP = hydroelectric power plant, kWh = kilowatt-hour, MW = megawatt.

102. Compliance monitoring. Loan and grant covenants (policy, legal, financial, economic, environmental, and others) will be monitored through semi-annual project reviews and the midterm review. 103. Environmental monitoring. Monitoring will be performed by the PIC and reported to PIU. Monitoring results and the implementation of mitigation measures will be included in the project quarterly progress reports and submitted to the PIU. With assistance from the PIC, the PIU is responsible for development, in-country disclosure, and submission to ADB of semi-annual environmental monitoring reports.

104. Gender and social dimensions monitoring. Monitoring wi l l be required for gender as the project does not have a gender element. Monitoring on equal employment opportunities for all social groups, equal pay for equal work regardless of gender, and prohibition of child labor will be monitored by the PMU and EPP’s PIU. The results will be included in the quarterly progress reports, and semi-annual environmental reports. C. Evaluation

105. Inception Mission. ADB will field an inception mission after loan and g r an t ag r eem en t signing to (i) establish a working relationship between ADB and the executing agencies; and (ii) to ensure that the borrower and executing agencies understand ADB's procedures. 106. Review Missions. ADB will field review missions at least once a year to review overall implementation of the project and update project implementation schedule based on mission findings. 107. Midterm Review Mission. ADB will field a midterm review mission after 2 years of loan/grant signing to assess whether attainment of the project’s immediate objective (purpose in terms of the design and monitoring framework) is still likely.

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108. Project Completion Review Mission. ADB will field a project completion review (PCR) mission upon physical completion of the project to commence preparation of ADB's project completion report. EPP will submit a project completion report to ADB within 6 months of physical completion of the project.25 D. Reporting

109. EPP will provide ADB with the following: (i) quarterly progress reports, including a section on safeguard compliance, in a

format consistent with ADB's project performance reporting system; (ii) bi-annual environmental monitoring reports within one month after each half of the

calendar year and post-construction environmental audit after project completion; (iii) 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

(iv) a project completion report within 6 months of physical completion of the Project. To ensure projects continue to be both viable and sustainable, project financial statements and audited corporate financial statements of EPP together with the associated auditor's report, should be adequately reviewed.

110. EPP is responsible for submission of reports to ADB. Preparation and submission of consolidated annual reports and project completion report in Russian and English languages. E. Stakeholder Communication Strategy

111. Project information will be strategically disseminated through media at main milestones including loan signing, contract awards, and project completion. 112. The following table outlines the framework of communication strategy to be adopted for the project.

Project Documents Means of

Communication Responsible

Party Frequency Audience(s)

Project Information Documents (PID)

ADB website ADB Initial PID no later than 30 calendar days of approval of the concept paper, quarterly afterwards.

General public

Design and Monitoring Framework (DMF)

ADB’s website ADB Draft DMF after post fact-finding mission

Project-affected people

Environment Impact Assessment

ADB’s website ADB At least 120 days before Board consideration

General public, project-affected people in particular

Resettlement Planning ADB’s website ADB Post fact-finding General public,

25 Project completion report format available at: http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-

Sector-Landscape.rar

http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-

http://www.adb.org/Consulting/consultants-toolkits/PCR-Public-

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Project Documents Means of

Communication Responsible

Party Frequency Audience(s)

Documents mission project-affected people in particular

Report and Recommendations of the President

ADB’s website ADB Within 2 weeks of Board approval of the loan

General public

Legal Agreements ADB’s website ADB No later than 14 days of approval of the project

General public

Initial Poverty and Social Assessment

ADB’s website ADB Within 2 weeks of completion


Documents produced under Technical Assistance

ADB’s website ADB Within 2 weeks of completion

General public

Project Administration Manual

ADB’s website ADB After loan negotiations


Social and Environmental Monitoring Reports

ADB’s website ADB Routinely disclosed, no specific requirements

General public

Major Change in Scope ADB’s website ADB Within 2 weeks of approval of the change

General public

Progress Reports ADB’s website ADB Within 2 weeks of circulation to Board or management approval

General public

Completion Reports ADB’s website ADB Within 2 weeks of circulation to Board for information

General public

Evaluation Reports ADB’s website ADB Routinely disclosed, no specific requirements

General public

ADB = Asian Development Bank, DMF = design and monitoring framework, PID = project information documents.

113. A grievance redress mechanism (GRM) will be established and a public communication program (PCP) will be developed by EPP throughout the Project. The design of GRM was proposed in the IEE Phase 1. PCP will be developed by the PIU environment and waste management specialist. Grievance redress committees will be in place to receive and resolve complaints, as well as to act upon stakeholders’ reports of irregularities on project-related matters, including grievances concerning land donation procedures. EPP will widely publicize the existence of this mechanism to ensure that stakeholders are aware that a venue is available to address concerns or grievances relating to fraud, corruption, abuse, and any other aspects of project implementation.

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X. ANTICORRUPTION POLICY

114. ADB reserves the right to investigate, directly or through its agents, any violations of the Anticorruption Policy relating to the project.26 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 and/or 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.27 115. To support these efforts, relevant provisions are included in the financing agreement/regulations and the bidding documents for the project. Procurement will follow ADB's Procurement Guidelines (2015, as amended from time to time), consultant selection will adopt ADB's Guidelines on the Use of Consultants (2013, as amended from time to time), and disbursement will be made in accordance with ADB's disbursement policies, guidelines, practices, and procedures. 116. EPP shall ensure that the website is updated. This should reflect detailed information on implementation of the project, specifically procurement related information, including the list of participating bidders, name of the winning bidder, basic details on bidding procedures adopted, amount of each contract awarded, and adequate details of the goods, works and consulting services procured for the project. 117. Project information will be strategically disseminated through media at main milestones including loan signing, contract awards, and project completion. 118. ADB’s Anticorruption Policy designates the Office of Anticorruption and Integrity (OAI) as the point of contact to report allegations of fraud or corruption among ADB-financed projects or its staff. OAI is responsible for all matters related to allegations of fraud and corruption. For a more detailed explanation refer to the Anticorruption Policy and Procedures. Anyone coming across evidence of corruption associated with the project may contact the Anticorruption Unit by telephone, facsimile, mail or email at the following numbers/addresses:

by email at [email protected] or [email protected] by phone at +632 632 5005 by fax to +632 636 2152 by mail at the following address (Please mark correspondence Strictly Confidential) Office of Anticorruption and Integrity Asian Development Bank 6 ADB Avenue, Mandaluyong City 1550 Metro Manila, Philippines

26 Anticorruption Policy: http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf 27 ADB's Integrity Office web site: http://www.adb.org/integrity/unit.asp



http://www.adb.org/Documents/Policies/Anticorruption-Integrity/Policies-Strategies.pdf

http://www.adb.org/integrity/unit.asp

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XI. ACCOUNTABILITY MECHANISM

119. People who are, or may in the future be, adversely affected by the project may submit complaints to ADB’s Accountability Mechanism. The Accountability Mechanism provides an independent forum and process whereby people adversely affected by ADB-assisted projects can voice, and seek a resolution of their problems, as well as report alleged violations of ADB’s operational policies and procedures. Before submitting a complaint to the Accountability Mechanism, affected people should make a good faith effort to solve their problems by working with the concerned ADB operations department. Only after doing that, and if they are still dissatisfied, should they approach the Accountability Mechanism.28

XII. RECORD OF PAM CHANGES

120. All revision/updates during course of implementation should be retained in this Section to provide a chronological history of changes to implemented arrangements recorded in the PAM.

Date Revised/Updated PAM Section Revision/Updates

28 For further information see: http://www.adb.org/Accountability-Mechanism/default.asp.

http://www.adb.org/Accountability-Mechanism/default.asp

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