World Bank Document - All Documents | The …

1 Document ofThe World BankFOR OFFICIAL USE ONLYR eport No: 24899 IMPLEMENTATION COMPLETION REPORT(CPL-30240; SCL-3024A)ON ALOANIN THE AMOUNT OF US$ 485 MILLIONTO THEGOVERNMENT OF INDIAFOR THENATHPA JHAKRI POWER PROJECT09/25/2002 Energy & Infrastructure UnitSouth Asia RegionThis Document has a restricted distribution and may be used by recipients only in the performance of theirofficial duties. Its contents may not otherwise be disclosed without World bank Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedCURRENCY EQUIVALENTS(Exchange Rate Effective )Currency Unit = Rupee (Rs.)Rs. = US$ I (at SAR)US$ I = Rs. (at Loan Closing Date)FISCAL YEARA pril 1 March 31 ABBREVIATIONS AND ACRONYMSCAT Catchment Area TreatmentCEA Central Electricity AuthorityCERC Central Electricity Regulatory CommissionCMD Chairman and Managing DirectorCWC Central Water CommissionDRB Disputes Resolution BoardGHP government of Himachal PradeshGOI government of IndiaHPSEB Himachal Pradesh State Electricity BoardIBRD International bank for Reconstruction and DevelopmentICB International Competitive BiddingICR Implementation Completion ReportIERR Internal Economic Rate of ReturnNHPC Nathpa Hydro Power CorporationNJPC National Jhakri Power CorporationPAFs Project Affected FamiliesPAPs Project Affected PersonsPFC Power Finance CorporationPIB Public Investment BoardPLF Plant Load FactorPOE Panel of ExpertsPPA Power Purchase AgreementQAG Quality Assurance Group of World BankR&R

2 Resettlement and RehabilitationReAP Rehabilitation Action PlanRBI Reserve bank of IndiaSEB State Electricity BoardSERC State Electricity Regulatory CommissionMEASURES AND EQUIVALENTSI Kilovolt = 1,000 volts (V)I Kilovolt ampere (kVA) = 1,000 volt-amperes (VA)1 Kilowatt-hour (kWh) = 1,000 watt-hours1 Megawatt-hour = 1,000 kilowatt-hours1 Gigawatt-hour (GWh) = 1,000,000 kilowatt-hoursI Million watt (MU) = 1 Gigawatt-hour (GWh) india -Nathpa Jhakri Power Project -Loan 3024A-INImplementation Completion ReportPREFACEThis is the Implementation Completion Report (ICR) for the Nathpa Jhakri Power Project in india ,for which Loan 3024 and 3024A-IN in the amount of US$485 million equivalent was approved on March2, 1988 and made effective on August 31, 1988. The Borrower was india , acting by its President. TheImplementing Agencies for the project were the Nathpa Jhakri Power Corporation (NJPC), the HimachalPradesh State Electricity Board (HPSEB) and the Central Electricity Authority (CEA).

3 The projectcomprised a 1,500 MW hydro generation component, the corporate strengthening of HPSEB, theconstruction of transmission components in Himachal Pradesh, and technical assistance to to force majeur delays in implementation of the hydro generation component, the original loanclosing date of December 31, 1997, was extended twice, firstly to December 31, 1998, and then to March31, 2002. The project had not been completed by March 2002. However, the first of its sixturbo-generators is scheduled for commissioning in December 2002, and it is expected that implementationwill be completed in 2003. In November 2001, the bank informed the government of india that it wouldbe difficult to further extend the loan closing date. GOI did not request an extension, and the loan closedon March 31, 2002. On August 22, 2002, the remaining balance of US$ million in the loan accountwas ICR was prepared by Sunil Khosla (Task Team Leader), Judith Plummer (Senior FinancialAnalyst), I.

4 U. B. Reddy (Social Development Officer), Devesh Mishra, (Senior Procurement Specialist),Tapas Paul (Consultant Environmentalist), Sunil Mathrani (Consultant Economist), Anthony Sparkes(Consultant Engineer) , Alessandro Palmieri (Lead Dam Specialist), Deepti Sharma and Fowzia Hassan(Program Assistants). Reviewed by Penelope Brook, Sector Manager (Energy), South Asia Region andKurt Schenk (Senior Power Engineer, East Asia and Pacific Region).Preparation of this ICR began during the bank 's final project supervision mission in March 2002,and was finalized during an ICR mission in April and May 2002. It is based on material in the project filesand site-specific information collected during the supervision and ICR missions. The aide memoire of theICR mission is provided as Attachment A. The implementing agencies contributed to the preparation of thisICR by providing technical data, details of the cost estimates to project completion, financial records andprojections.

5 The agencies' evaluation of the implementation exercise, NJPC's plans to complete, operateand maintain the hydropower scheme, are provided in Attachment President: Mieko NishuimizuCountry Director: Michael CarterSector Manager: Penelope J. BrookTask Team Leader: Sunil Kumar KhoslaINDIANATHPA JHAKRI POWER PROJECT -Loan 3024A-INImplementation Completion ReportCONTENTSPage Project Data 12. Principal Performance Ratings 13. Assessment of Development Objective and Design, and of Quality at Entry 24. Achievement of Objective and Outputs 65. Major Factors Affecting Implementation and Outcome 146. Sustainability 177. bank and Borrower Performance 188. Lessons Learned 219. Partner Comments 2310. Additional Information 24 Annex 1. Key Performance Indicators/Log Frame Matrix 25 Annex 2. Project Costs and Financing 26 Annex 3. Economic Costs and Benefits 29 Annex 4.

6 bank Inputs 32 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 35 Annex 6. Ratings of bank and Borrower Performance 36 Annex 7. List of Supporting Documents 37 Annex 8. Latest Update on Implementation Progress of the Project 38 Annex 9. Attachment A. ICR Mission Aide-memoire 39 Annex 10. Attachment B. Contirbutions to the ICR by the Beneficiaries-NJPC, HPSEB 55and CEAP roject ID: P009869 Project Nanie: Nathpa Jhakri Power ProjectTeam Leader: Sunil Kumar Khosla TL Unit: SASEIICR Type: Core ICR Report Date: September 30, 20021. Project DataName: Nathpa Jhakri Power Project L/C/TF Number: CPL-30240;SCL-3024 ACountrv/Departrnent: india Region: South Asia RegionalOfficeSector/subsector.' Power (95%); Sub-national governmentadministration (5%)KEY DATESO riginal Revised/ActualPCD: 01/28/1986 Effective: 08/31/1988 01/3011990 Appraisal: 11/30/1987 MTR: 07/01/1994 03/31/1997 Approval: 03/02/1989 Closing: 12/31/1997 03/31/2002 Borrower/Implementing Agency.

7 GOI/NATHPA JHAKRI POWER CORPORATION; HPSEB AND CEAO ther Partners:STAFF Current At AppraisalVice President: Mieko Nishimizu Atilla KaraosmanogluCounty Manager: Michael F. Carter Bilsel AlisbahSector Manager: Vincent Gouarne Eugene McCarthyTeam Leader at ICR: Sunil Kumar Khosla Alfonso SanchezICR Primary Author: Anthony E. Sparkes2. Principal Performance Ratings(HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Un]ikely, HUN=HighlyUnlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible)Outcome: SSustainability: LInstitutional Development Impact: MBank Performance: UBorrower Performance: UQAG (if available) ICRQ uality at Entry: U UProject at Risk at Any Time: Yes3. Assessment of Development Objective and Design, and of Quality at Original The proposed project was designed to (a) alleviate the acute shortage of electricity generatingcapacity in the Northem Region of india , especially at times of system peak load, by developing 1500 MWof renewable and versatile run of the river hydro-power at Nathpa Jhakri on the river Satluj in HimachalPradesh state; (b) reinforce and expand the transmission system of Himachal Pradesh; (c) modemize andstrengthen HPSEB operations, and its load and financial management capability.

8 And (d) strengthen CEA,CWC and other selected agencies in the planning, design and management of hydropower These objectives are judged to have been appropriate, as detailed in the following In 1987, the Northern Region of india , was experiencing serious power deficits. Only about 75%of the peak demand and 90% of the energy demand was being met and the utilities of the Northem Regionwere resorting to electricity rationing. Poor supply voltages and periods of low system frequencies wereleading to increased costs to consumers, especially industries. It was also difficult to operate withappropriate flexibility, the predominant thermal capacity to follow the varying peak demand, whichhydropower can usually more easily, efficiently and economically accommodate. To correct the imbalancebetween thermal and hydroelectric sources, and to meet the increasing unsupplied demand, it wasappropriate to develop a large hydroelectric scheme.

9 The 1,500 MW Nathpa Jhakri scheme was thepreferred component in the Northern Region's least cost long-term expansion However, if the scheme was being considered today, its positive contribution of limiting thedeleterious impact on the environment of india 's inevitable power sector expansion, alongwith thermn-of-the-river scheme's minimal social and environmental impacts, especially as they could be mitigatedappropriately, would feature high in its appraisal. Nathpa Jhakri will generate into the Northern Regiongrid about 7,000 GWh of electricity each year. In doing so, it will delay the necessity of the construction ofeither coal or oil-fired thermal plant of a similar capacity, and will thus hugely reduce india 's greenhousesgas emissions, and positively impact on india 's global warming effect. By displacing an equivalent sizedcoal-fired thermal plant, Nathpa Jhakri will obviate the need for india to emit about 40,000 tons of SOxemissions and about 20,000 tons of NOx emissions and about 6 million tons of carbon dioxide into theatmosphere each The second objective (see paragraph ( b) ) of the project was to help HPSEB make efficientuse of its share of the Nathpa Jhakri output, through strengthening the transmission system.

10 Also,HPSEB's transmission system needed to be strengthened and expanded so that the objective of theGovernment of Himachal Pradesh (GHP), to supply electricity to a large majority of the State's population,could be achieved. In several locations HPSEB's system technical losses were high as a result oftransmission line overloads, resulting in poor supply voltages, frequent interruptions to services andconsequent financial losses. The system strengthening and expansion would address these shortcomings,alongwith the objective of supplying more consumers with Northern Region of india now comprises of the states of Himachal Pradesh, Harana, Punjab, Rajasthan, Uttar Pradesh, Uttranchal, Jammu andKashmir, Delhi and the Union Territory of run-of-the- river Nathpa Jhakri scheme, with a small 60-meter high darn for meeting diurnal peaking requirement, is designed to generateelectrical power from india 's renewable hydro resources.