Project Administration Memorandum

Project Number: 36107

Loan Number: 2332-BAN/2333-BAN(SF)/2334-BAN(SF)
August 2007

BAN: Sustainable Power Sector Development

Program

The project administration memorandum is an active document, progressively updated and revised as
necessary, particularly following any changes in project or program costs, scope, or implementation
arrangements. This document, however, may not reflect the latest project or program changes.
 ASIAN DEVELOPMENT BANK

PROJECT ADMINISTRATION MEMORANDUM

For the

SUSTAINABLE POWER SECTOR DEVELOPMENT PROGRAM

For the

PEOPLE’S REPUBLIC OF BANGLADESH

[LOAN 2332-BAN/2333-BAN(SF)/2334-BAN(SF)]

FINAL
01 August 2007
ii

CURRENCY EQUIVALENTS
(as of 21 August 2006)

Currency Unit – taka (Tk)

Tk1.00 = $0.0144
$1.00 = Tk69.4750

ABBREVIATIONS

ADB – Asian Development Bank

BERC – Bangladesh Energy Regulatory Commission
BPDB – Bangladesh Power Development Board
CRAM – consultant recruitment and monitoring
DESA – Dhaka Electric Supply Authority
DESCO – Dhaka Electric Supply Company Limited
DPDC – Dhaka Power Distribution Company Limited
EA – executing agency
FY – fiscal year
LIBOR – London interbank offered rate
KfW – Kreditanstalt für Wiederaufbau
MPEMR – Ministry of Power, Energy and Mineral Resources
MOF – Ministry of Finance
NGO – nongovernment organization
NWPGC – Northwest Power Generation Company Limited
PAM – project administration memorandum
PCB – Polychlorinated biphenyl
PGCB – Power Grid Company of Bangladesh Limited
PSDP – power sector development program
REB – Rural Electrification Board
RP – resettlement plan

WEIGHTS AND MEASURES

GWh – gigawatt-hour 1,000,000,000 watt-hours

kV – Kilovolt 1,000 volts
kWh – kilowatt-hour 1,000 watt-hours
MW – Megawatt 1,000,000 watts
MWh – Megawatt-hour 1,000,000 watt-hours
MVA – megavolt-ampere 1,000,000 volt-ampere

NOTES

(i) The fiscal year (FY) of the Government ends on 30 June. FY before a calendar
year denotes the year in which the fiscal year ends, e.g., FY2006 ends on 30
June 2006.

(ii) In this report, “$” refers to US dollars.

 iii

CONTENTS
Page

CURRENCY EQUIVALENTS, ABBREVIATIONS, NOTES ii

CONTENTS iii
LOAN PROCESSING HISTORY v
DESIGN AND MONITORING FRAMEWORK vi

I. PROJECT DESCRIPTION 1
A. Introduction 1
B. Impact and Outcome 1
C. Outputs 1

II. COST ESTIMATES AND FINANCING PLAN 3

A. Cost Estimates 3
B. Financing Plan 4
C. Allocation of Loan Proceeds 5

III. IMPLEMENTATION ARRANGEMENTS 6

A. Executing and Implementing Agencies 6

IV. IMPLEMENTATION SCHEDULE 6

V. DETAILED COST AND FINANCING PLAN DURING IMPLEMENTATION 6

VI. CONSULTANT RECRUITMENT 7

VII. PROCUREMENT 7

VIII. DISBURSEMENT PROCEDURES 8

IX. PROJECT MONITORING AND EVALUATION 9

A. Inception Mission 9
B. Review Mission 9
C. Midterm Review Mission 9

X. REPORTING REQUIREMENTS 9
A. Quarterly Progress Report 9
B. Audited Financial Report 10
C. Project Completion Report 10

XI. AUDITING REQUIREMENTS 10

XII. MAJOR LOAN COVENANTS 10

XIII. KEY PERSONS RESPONSIBLE IN THE PROJECT 10

XIV. ANTICORRUPTION 10
iv

APPENDIXES

1. Proposed Outputs for Project Loan 12

2. Capacity Development Program 17
3. Program Policy Matrix 22
4. Detailed Project Cost Estimates 28
5. Implementation Schedule 33
6. Detailed Cost and Financing Plan During Implementation 36
7. Quarterly and Yearly Contract Awards and Disbursement Projections 37
8. Recruiting Consulting Firms for Loan Project Using QCBS 38
9. Outline Terms of Reference for Consulting Services 39
10. Consultant Recruitment Activity Monitoring (CRAM) 47
11. Procurement Plan 49
12. List of Ineligible Items 52
13. Pro Forma of the Executing Agency’s Project Progress Report 53
14. Project Account – Sample Format 58
15. Pro Forma of the Project Completion Report 59
16. Major Covenants 61
17. Key Persons Responsible for the Project 69
 v

BAN: SUSTAINABLE POWER SECTOR DEVELOPMENT PROGRAM

LOAN PROCESSING HISTORY

MILESTONE EVENT DATES

a. Approval of PPTA : 23 August 2004

b. Fact Finding : 10-27 April 2006

c. Management review meeting (MRM) : 29 June 2006

d. Appraisal mission : 19 July – 3 August 2006

e. 2nd MRM : 28 August 2006

f. Loan negotiations : 26-28 September 2006

g. Board circulation : 5 June 2007

h. Board consideration and approval : 26 June 2007

i. Loan agreement signing : 28 June 2007

j. Loan effectiveness :
 vi

DESIGN AND MONITORING FRAMEWORK

Sector Development Program

Design Summary Performance Targets/Indicators Data Assumptions and Risks

Sources/Reporting
Mechanisms
Impact
Assumptions
Increased capacity • Access to electricity from present • Government • Political and socioeconomic
and reliable power 38% to 60% of national population economic statistics conditions remain stable
supply for by 2015 and reports • Stable economic growth in the
sustained • No load shedding by 2015 • National statistics on region
economic growth • Gross domestic product increases power supply • Stable supply of imported energy
maintained on a sustainable basis • Program and project resources at appropriate prices
completion reports
Outcome

Reforms: • Issuance of a detailed medium-term • Quarterly program Assumptions

Improved power road map for power sector reforms
sector sustainability • Establishment by 2007 of a
through financial long-term planning mechanism for
and organizational power sector operations based on a
restructuring detailed sector reform road map, a
long-term power system master
plan, and a sector-wide capacity
building program
• Fully staffed BERC and licensing
and tariff regulations in place by
2007
• Financial self-reliance of power
sector entities by 2010
• BPDB and DESA converted to
corporatized entities by 2007
• Initiation of fund raising from local
capital market by 2006 for power
sector development, and 50% of
new generation capacity from private
sector by 2008
progress reports • Continued government
• Reports from power commitment for evolution of an
sector entities and enabling policy and regulatory
regulatory framework to facilitate
commission commercialization of utility
• National statistics on company operations
power supply • Level playing field through BERC
• Power sector entities’ for corporatized sector entities,
annual reports and independent power
• Program completion producers
report
Risks
• Tariffs kept below cost-recovery
level
• Delays in approval of BERC
organogram, recruitment of staff,
and appointment of the remaining
commissioners

Clean Energy • Additional peak load generating • Quarterly project Assumptions

Power Supply capacity of 300 MW by 2009 progress reports • Stable economic growth
Capacity • Load shedding reduced from • National statistics on • Timely establishment of NWPGC
Expansion and 770 MW in 2005 to less than power supply
Efficiency 470 MW in 2009 • BPDB’s annual report Risks
Improvements: • Project completion • Mismatch between generation
Expanded peak report and network upgrades
generation capacity • Delays in project implementation
and reduction of
load shedding

Improved Power • Addition of power transmission • Quarterly project Assumption

Transmission capacity by 900 MVA by 2009 progress reports • Stable economic growth
Capacity and • Transmission system losses reduced • National statistics on
Reduction of from 3.4% in 2005 to 3.2% in 2009. power supply Risk
Transmission • PGCB’s annual • Delays in project implementation
System Losses report
• Project completion
report
 vii

Design Summary Performance Targets/Indicators Data Assumptions and Risks

Sources/Reporting
Mechanisms
Dhaka area • Reduction of distribution losses of • Quarterly project Assumptions
distribution system DESCO from 16.7% in 2005 to progress reports • Stable economic growth
efficiency 12.0% by 2009 • National statistics on • Transfer of DESA operations to
improvements • Reduction of distribution losses of power supply DPDC
DESA from 30.0% in 2005 to 20.0% • Distribution entities’
by 2009 annual reports Risk
• Improved reliability and quality of • Project completion • Delays in project implementation
power supply for 820,000 existing report
and 230,000 new consumers
Institutional • Enhanced competitiveness of power • Quarterly project Assumption
Capacity sector entities in corporate and progress reports • Continued support of
Development: financial management, information • Project completion Government for capacity
and communication technology, report development
long-term planning, governance,
customer relations, and research
and development
Outputs • 3-year road map for power sector • Quarterly program Assumptions
reforms and implementation of a progress reports • Continued commitment of
Reforms: regular monitoring system by • Review mission Government for sector reforms
(i) National action December 2006 reports • Timely program implementation
plan for power • Power system master plan for • Counterpart funds made
sector reform generation and transmission for available.
2006–2025 by December 2006
• Preparation of technical project Risk
proposal for a sector-wide capacity • Unwillingness of power sector
development program by December companies to reform
2006
(ii) Fully functional • Government approval of BERC • Quarterly program
legal and regulatory organogram by December 2006 progress reports
framework • Gazette notification of licensing • Review mission
regulations by December 2006 and reports
gazette notification of tariff
regulations by December 2007
• Appointment of BERC’s remaining
commissioner by December 2007
(iii) Financial • Preparation of a draft financial • Quarterly program
restructuring of restructuring plan for BPDB and progress reports
power sector DESA by December 2006, and • Review mission
entities Government approval of the financial reports
restructuring plan by December
2007
• Settlement of unfunded pension
liabilities for the newly corporatized
entities by June 2008
• Reduction of Government’s and its
autonomous and semiautonomous
agencies’ outstanding electricity
dues to less than Tk1.0 billion and
Tk2.5 billion, respectively, by
December 2007
(iv) Continued • Constitution of boards of directors • Quarterly program
restructuring of and appointment of managements progress reports
power sector for the newly corporatized entities by • Review mission
entities December 2006 reports
(v) Increased • Partial off-loading of PGCB and • Quarterly program
public-private DESCO shares by December 2007 progress reports
partnership • Review mission
reports
 viii

Design Summary Performance Targets/Indicators Data Assumptions and Risks

Sources/Reporting
Mechanisms
Power Supply
Capacity
Expansion and
Efficiency
Improvements

Construction of • A 150-MW peaking power plant in • Quarterly progress Assumptions

clean natural Sirajganj and another 150-MW
gas-fired power peaking power plant in Khulna by
plants 2009
Construction and • A 50-km, 400-kV double-circuit
augmentation of transmission line from Meghaghat to
transmission Aminbazar and associated bay
systems extensions by 2009
• A 10-km, 230-kV double-circuit
transmission line from Aminbazar to
Old Dhaka Airport and associated
substations in Old Dhaka Airport and
Dhaka University Areas by 2009
• A total of 158 km in three 132-kV
single-circuit transmission lines and
associated substations in western
and northwestern parts of the
country by 2009
reports • Timely project implementation
• Power sector entities’ • Counterpart funds of project
annual reports components made available.
• Review mission
reports Risks
• Field visits • Approval for construction of
project components is not
• Quarterly progress obtained in a timely manner.
reports • Increase in prices of raw
• Power sector entities’ materials exceeds contingency
annual reports and inflation forecasts.
• Review mission
reports
• Field visits

Distribution system • About 570 MVA of additional • Quarterly progress

upgrade in DESA distribution capacity to connect reports
area about 120,000 new consumers • Power sector entities’
(domestic, commercial, irrigation, annual report
industrial, and others) by 2009 • Review mission
reports
• Field visits

Distribution system • About 450 MVA of additional • Quarterly progress

upgrade in DESCO distribution capacity to connect reports
area about 110,000 new consumers • Power sector entities’
(domestic, commercial, irrigation, annual reports
industrial and others) by 2009 • Review mission
reports
• Field visits

Institutional See Table A1.2 for detailed • Quarterly progress Assumptions

Capacity performance targets. reports • Timely project implementation
Development • Reports from power • Counterpart funds of project
sector entities and components made available.
regulatory Risk
commission • Approval for technical assistance
• National statistics on project proposal is not obtained in
power supply a timely manner.
• Power sector entities’ .
annual reports
• Review mission
reports
• Field visits
 ix

Design Summary Performance Targets/Indicators Data Assumptions and Risks

Sources/Reporting
Mechanisms

Activities with Milestones Inputs

Reforms Program Loan:
1.1 3-year Road Map for Power Sector Reforms approved by September 2006 • ADB: $60.00 million
1.2 BERC organizational chart approved by the Government by October 2006 • Government: $123.00
1.3 Gazette notification of the licensing regulations by September 2006 million
1.4 BERC’s submission of draft electricity generation tariff regulations with tariff-setting
mechanism to the Energy, and Mineral Resources Division of MPEMR by August Project Loan:
2006 • Consultancy services for
1.5 Government approval of a financial restructuring plan of BPDB and DESA by project management,
December 2007 design, implementation of
1.6 Budget allocation of Tk1.8 billion by June 2007 and another Tk1.8 billion by June safeguards, and
2008 to settle unfunded pension and gratuities for the newly corporatized sector construction supervision
entities • ADB: $405.0 million
1.7 Initial off-loading of PGCB and DESCO shares in the stock market by December • Government: $274.9
2007 million

Power Supply Capacity Expansion and Efficiency Improvements

2.1 Field surveys for all project components completed by June 2006.
2.2 Completion of acquisition of land and resettlement by December 2007
2.3 Recruitment of consultants for preparation of bidding documents, bidding,
construction supervision, and commissioning and testing for Sirajganj peaking power
plant, Khulna peaking power plant, and 400 kV transmission line by September 2007
2.4 Design engineering, procurement and construction: starts July 2006, and construction
completion by December 2009

Institutional Capacity Development

3.1 Submission of technical project proposal for a medium-term, sector-wide capacity
building program by the Power Division of MPEMR to the Planning Commission by
October 2006
3.2 Detailed needs assessment completed by October 2007.
3.3 Key training started from January 2008.

ADB = Asian Development Bank, BERC = Bangladesh Energy Regulatory Commission, BPDB = Bangladesh Power
Development Board, DESA = Dhaka Electric Supply Authority, DESCO = Dhaka Electric Supply Company Limited,
km = kilometer, kV = kilovolt, MPEMR = Ministry of Power, Energy and Mineral Resources, MVA = megavolt-ampere,
MW = megawatt, NWPGC = Northwest Power Generation Company Limited, PGCB = Power Grid Company of
Bangladesh Limited.
 x
Sector Road Map and Capacity Building
Objective Impact
Sector Road Map
Generation
• Bringing the entire • Corporatization of the
country under existing power stations
electricity service by under BPDB on an
2020 in phases individual or cluster basis
• Increased private • Development of captive
sector participation power policy
• Making the power
sector financially
viable by 2010 with Transmission
increased efficiency • Completion of system
metering installation
Distribution
• BPDB distribution
segment to be converted
into a number of
distribution companies
• DESA to be corporatized
• REB’s graduation policy
to be implemented for
balance development of
all PBSs
• Completion of asset
transfer to corporatized
distribution entities
Sector Regulation
• BERC to be fully
functional
Private Sector Participation
• Promotion of private
sector participation
• Mobilization of domestic
capital
Operational Performance
• Improved operational and
financial performance of
the power sector entities
.
Performance Target Measurement
Generation
• Completion of study for • Quarterly program and
conversion of BPDB as a project progress reports
holding company by December • Reports from power sector
2007 entities and regulatory
• Corporatization of BPDB commission
holding company by June 2008 • National statistics on power
• Preparation of captive power supply
generation policy by 2006 • Power sector entities’
Transmission annual reports
• Completion of system metering
installation by 2007
Distribution
• WZPDC fully functional by
2006
• Implementation of REB’s
graduation policy from 2007
• Completion of DESA
corporatization by 2007
• NWZPDC to be fully functional
by 2007
• Corporatization of BPDB’s
south zone power distribution
network by 2007
• Corporatization of BPDB’s
central zone power distribution
network by 2008
Sector Regulation
• Approval of BERC organogram
by 2006
• Appointment of the remaining
commissioner by December
2007
• Gazette notification of tariff
regulations by December 2007
Private Sector Participation
• Completion of a study for
promotion of private sector
participation by June 2008
• Direct listing of PGCB and
DESCO shares in local stock
market by December 2007
• Issue of PGCB’s local bonds
by June 2007
Operational Performance
By December 2007
• Distribution losses: 17.4%
Collection to import: 78.9%

Objective Impact
Capacity Development
Sector-wide capacity
development to sustain
reforms and restructuring,
covering:
• Corporate and • Improved corporate and
financial management financial management of
power sector entities
• Information and • Operational efficiency
communication and transparency
technology
• Long-term system • Updated least-cost
planning development plans
• Future investment
projects
• Good governance
• Improved sector and
corporate governance
• Customer relations
• Enhanced customer
• Research and satisfaction
development • Application of latest
energy efficiency and
clean development
• Human resource mechanisms
development and • Safe and efficient
training operation of power
business
BERC = Bangladesh Energy Regulatory Commission, BPDB = Bangladesh Power Development Board, DESA =
Dhaka Electric Supply Authority, DESCO = Dhaka Electric Supply Company Limited, NWZPDC = North West Zone
Power Distribution Company Limited, PBS = palli bidyut samity (rural electric cooperatives), PGCB = Power Grid
Company of Bangladesh Limited, REB = Rural Electrification Board, WZPDC = West Zone Power Distribution
xi
Performance Target Measurement
• Accounts receivable less than
3.5 months, debt service
coverage ratio not less than 1.4
By December 2008
• Distribution losses: 17.1%
Collection to import: 79.2%
• Accounts receivable less than
3 months, debt service
coverage ratio not less than
1.2.
• Enhanced corporate • Quarterly program and
management mechanism in project progress reports
business plan, investment and • Reports from power sector
financial plan, funds entities and regulatory
mobilization, and commission
commercialization • National statistics on power
• Introduction of such advance supply
information and communication • Power sector entities’
technology systems as annual reports
e-procurement and
management information
system
• Regular updates of demand
forecasts; preparation of power
system master plan for
generation, transmission, and
distribution
• Preparation of future
investment projects based on
the least-cost development
plan
• Enhanced predictability,
accountability, transparency,
and stakeholder participation in
the business process
• Improved quality of service and
customer relations
• Improvements in operational
efficiency and reliability of
power supply
• Optimally skilled human
resources in the power sector
with adequate capacity for
planning, engineering,
procurement, construction
supervision, and operation and
maintenance of power supply
systems
 BAN: SUSTAINABLE POWER SECTOR DEVELOPMENT PROGRAM

I. PROJECT DESCRIPTION

A. Introduction

18. On 26 June 2007, ADB approved the Sustainable Power Sector Development Program
(the Program) for the People’s Republic of Bangladesh for the Sustainable Power Sector
Development Program (the Program), comprising the following three loans: (i) Loan 2332-BAN;
(ii) Loan 2333-BAN(SF); and (iii) Loan 2334-BAN(SF).

B. Impact and Outcome

19. The Program is expected to promote sustained economic growth in Bangladesh by

providing improved capacity in the nation’s power sector and reliable power supply to its people.
The Program supports the Government’s goal of providing reliable electricity to the entire
country by 2020, and aims to provide further support and incentives to the Government for
power sector reform through financially stabilizing sector entities and improving their
governance while assisting to expand clean-fuel power generation capacity, enhancing
transmission network reliability and efficiency, and improving quality of supply in Dhaka city and
surrounding areas (the major power market).

1. Project loan1

20. The outcome of the project loan is expanded capacity for clean fuel power generation
and improved efficiency in transmission and distribution to be achieved by (i) increased peak
load generation capacity using clean natural gas, and (ii) augmented and expanded
transmission and distribution systems to improve network efficiency and reliability. It will also
enhance institutional capacity of the power sector entities through development of their capacity.

2. Program loan

21. The policy actions supported by the program loan will be improved power sector
sustainability through financial and organizational restructuring and will focus on five key outputs
that will (i) develop and implement a national action plan for sector reforms, (ii) establish a fully
functional legal and regulatory framework, (iii) enhance the financial health of power sector
entities, (iv) further restructure the sector entities, and (v) promote private sector participation
and public-private partnerships in the sector.

C. Outputs

1. Project loan

22. The outputs of the project comprise four investment components and one capacity
development component as summarized below. The specific activities and rationale for the
investment components are provided in Appendix 1.

(i) Part A: Clean energy capacity expansion. This component will involve
expansion of clean power generation capacity by construction of (a) a new 150 MW

1
Throughout the document, the project loan refers to both Loan 2332-BAN and Loan 2333-BAN(SF).
2

natural gas-fired simple cycle gas turbine peaking power plant in Sirajganj along with its
auxiliaries, and (b) a new 150 MW natural gas-fired simple cycle gas turbine peaking
power plant in Khulna including its auxiliaries and associated underground connecting
transmission line to Khulna central substation.

(ii) Part B: Transmission system efficiency improvements. To improve

transmission efficiency, this component will involve (a) construction of a new 400 kV
overhead transmission line from Meghnaghat to Aminbazar including bay extensions, (b)
augmentation of 230 kV transmission system improvements in Aminbazar–Old Dhaka
Airport, Dhaka Cantonment and Dhaka University areas along with associated
substations, and (c) construction of three new 132 kV transmission lines and associated
substations in western and northwestern regions of the country.

(iii) Part C: Distribution system efficiency improvements in DESA area. This

component will improve Dhaka distribution systems currently operated by DESA through
(a) reinforcing, renovating, and augmenting 10 existing 33/11 kV substations; (b)
developing new 132/33 kV and 33/11 kV substations; procuring and installing 3x50/75
MVA, 132/33 kV transformers and associated equipment in three existing 132/33 kV
substations; and (d) upgrading Shyampur Bangladesh Small and Cottage Industries
Corporation’s 11 kV switching station.

(iv) Part D: Distribution system efficiency improvements in DESCO area. This

component will improve Dhaka distribution systems by (a) upgrading and expanding the
distribution system in Gulshan Circle including Tongi area, and (b) upgrading and
expanding the distribution system in Mirpur Circle.

(v) Part E: Capacity development. This component is to enhance institutional

resources of the power sector to improve utility performance and promote sustainable
operations. Subject to refinement based on the detailed needs assessment, the
indicative priority areas for capacity development include corporate and financial
management, information and communication technology, enhancement of technical
expertise, long-term system planning and preparation of future projects, good
governance, customer relations, research and development, and human resource
development and training. The outline scope of this component is given in Appendix 2.

2. Program loan

23. The policy matrix for the program loan consists of series of specific policy actions
grouped under the five outputs below and the program policy matrix is provided in Appendix 3:

(i) Development and Implementation of a National Action Plan for Power Sector
Reform;
(ii) Establishment of a Fully Functioning Legal and Regulatory Framework:
(iii) Enhanced Financial Health of Power Sector Entities:
(iv) Continued Restructuring of Sector Entities; and
(v) Promotion of Private Sector Participation and Public-Private Partnership.
 3

II. COST ESTIMATES AND FINANCING PLAN

A. Cost Estimates

1. Project loan

24. The project investment cost is estimated at $679.9 million, including taxes and duties of
$113.8 million as given in Table 1 below and further presented in Appendix 4.

Table 1: Project Investment Plan

($ million)
Item Amounts
A. Base Costa
Part A: Clean Energy Capacity Expansion 200.0
Part B: Transmission System Efficiency Improvements 156.0
Part C: Distribution System Efficiency Improvements in DESA Area 71.7
Part D: Distribution System Efficiency Improvements in DESCO Area 135.3
Part E: Capacity Development 7.8
Subtotal (A) 570.8
b
B. Contingencies 50.5
C. Financing Charges During Implementationc 58.6
Total 679.9
DESA = Dhaka Electric Supply Authority, DESCO = Dhaka Electric Supply Company Limited.
a
In mid-2006 prices. Includes taxes and duties of $113.8 million for parts A to D. Includes land
acquisition and resettlement cost under preconstruction heading in the detailed cost estimates.
b
Physical contingencies computed at 5% for total material costs for parts A to D. Price contingencies
for parts A to D computed at 2.0% on foreign exchange costs and 6.0% on local currency costs.
c
Includes interest during construction and commitment charges for parts A to D. Interest during
construction on foreign exchange cost has been computed at London interbank offered rate plus a
spread, total estimated at 6.0%. Commitment charges of 0.75% are levied on unutilized portion of
ADB’s loan against ADB’s staggered disbursement schedule. Front-end fee of 1% is currently waived.
Interest during construction on local currency cost for parts A to D has been computed at 5.0% per
annum.
Source: Asian Development Bank estimates.

2. Program Loan

25. The estimated adjustment costs for the Program are in Table 2 below.

Table 2: Costs of Adjustment

($ million)

Cost of Adjustments FY2007 FY2008 FY2009 FY2010 Total

Funding unfunded pension obligations 25 25 50 63 163
and gratuities
Settling outstanding debts of the 10 10 0 0 20
Government and its agencies
Total 35 35 50 63 183
Source: Asian Development Bank estimates.
4

B. Financing Plan

1. Project Loan

26. ADB will provide two loans under the project loan, one of $400 million from ADB’s
ordinary capital resources to help finance procurement and consulting services for parts A, B, C,
and D, and one of $5 million equivalent from its Special Funds resources (Asian Development
Fund) for part E. The Government will meet the balance of the cost through loans, grants, and
equity contributions to the EAs or the EA’s internal resources including all taxes and duties

27. The ordinary capital resources loan will be provided to the People’s Republic of
Bangladesh with a 25-year term, including a 5-year grace period, an interest rate determined in
accordance with ADB’s London interbank offered rate (LIBOR)-based lending facility, a
commitment charge of 0.75% per annum, and such other terms and conditions as set forth in
the loan and program agreements. The loan proceeds will be relent to Bangladesh Power
Development Board (BPDB) (and later transferred to its successor company) for part A, Power
Grid Company of Bangladesh Limited (PGCB) for part B, Dhaka Power Distribution Company
Limited (DPDC) for part C, and Dhaka Electric Supply Company Limited (DESCO) for part D
pursuant to subsidiary loan agreements with terms and conditions acceptable to ADB.
Relending terms to these entities will include a repayment period of 20 years including a 5-year
grace period, and interest of 5.5% per annum. Foreign exchange risk will be assumed by the
corresponding entities during the life of the respective subsidiary loan and thereafter by the
Borrower.

28. The Special Funds resources loan will have a term of 32 years, including a grace period
of 8 years and an interest charge of 1.0% per annum during the grace period and 1.5% per
annum thereafter. The Borrower will be the People’s Republic of Bangladesh, and the proceeds
will be provided to MPEMR. A summary financing plan is provided in Table 3 below.

Table 3: Financing Plan

($ million)

Source Foreign Local Total Percent

Exchange Currency Cost
Asian Development Bank (OCR) 400.0 0.0 400.0 58.8
Asian Development Bank (ADF) 5.0 0.0 5.0 0.7
Government Long-Term Loans 0.0 108.6 108.6 16.0
Government Equity Injections/EA’s 0.0 162.5 162.5 23.9
Internal Resources
Government Budget Support to 0.0 3.8 3.8 0.6
MPEMR
Total 405.0 274.9 679.9 100.0

ADF = Asian Development Fund, EA = executing agency, MPEMR = Ministry of Power, Energy and Mineral
Resources, OCR = ordinary capital resources.
Sources: Government of Bangladesh and Asian Development Bank estimates.

29. KfW has expressed its interest in cofinancing part C. Once the cofinancing is committed,
ADB loan will be reduced accordingly.
 5

2. Program Loan

30. ADB will provide a loan in various currencies equivalent to $60 million from ADB’s
Special Fund resources (Asian Development Fund) to help finance the program loan. The loan
will have a term of 24 years, including a grace period of 8 years, and an interest rate of 1% per
annum during the grace period and 1.5% per annum thereafter.

C. Allocation of Loan Proceeds

1. Project loan

31. Loan proceeds have been allocated as detailed in Schedule 3 of the Loan Agreement.
The Loan proceeds will be withdrawn from the Loan account on the basis of the percentages
provided in Table 4 and 5.

Table 4: Allocation of Loan Proceeds

(Loan 2332-BAN)

Percentage of Bank Amount

Categories Financing ($ million)
01 Power Station and Connecting 100% of foreign expenditure 123.01
Transmission Lines
02 Transmission Lines and Substations 100% of foreign expenditure 87.47
03 Distribution Lines, Substations and 100% of foreign expenditure 42.05
Other Materials - Part C
04 Distribution Lines, Substations and 100% of foreign expenditure 83.04
Other Materials - Part D
05 Consulting Services 100% of foreign expenditure 1.99
06 Interest and Commitment Charges 100% of amounts due * 38.82
07 Unallocated 23.62
Total 400.0
* Exclusive of local taxes and duties

Table 5: Allocation of Loan Proceeds

(Loan 2333-BAN)

Amount (million)
Percentage of Bank
SDR US$ equivalent
Categories Financing
01 Equipment 100% of foreign 0.337 .500
expenditure
02 Training/Fellowship & 100% of foreign 2.629 3.899
Consulting Services expenditure
03 Interest Charge 100% of amounts due * .041 .061
04 Unallocated .364 .540
Total 3.371 5.000
* Exclusive of local taxes and duties
6

2. Program loan

32. The proceeds of the program loan shall be used to finance the foreign exchange costs of
eligible items in the program in accordance with Schedule 3 of the Loan Agreement and upon
fulfillment of conditions for tranche release (Attachment 2 to Schedule 3 of the Loan
Agreement).

III. IMPLEMENTATION ARRANGEMENTS

A. Executing and Implementing Agencies

1. Project loan

33. The executing agency (EA) for part A of the Project will be BPDB and its successor
company, tentatively called Northwest Power Generation Company Limited (NWPGC).2 PGCB,
DPDC, and DESCO will be the EAs for parts B, C, and D, respectively. The Power Division of
MPEMR will execute part E. Until such time as NWPGC and DPDC can take over project
implementation, BPDB and DESA will assist and carry out all necessary steps and actions to
prepare for and facilitate implementation of their respective components. The EAs and Power
Division of MPEMR will be responsible for supervising project implementation and monitoring of
project operational performance.

2. Program loan

34. For the program loan, the executing agencies (EAs) will be the Finance Division of the
Ministry of Finance (MOF) and the Power Division of the Ministry of Power, Energy and Mineral
Resources (MPEMR).

IV. IMPLEMENTATION SCHEDULE

1. Project loan

35. The project loan will be implemented over a 42-month period. Implementation has
commenced in July 2006 with preparation of requests for proposals for recruitment of
implementation consultants and draft bidding documents by the EAs, and it will be completed by
December 2009. The implementation schedule of the project loan is presented in Appendix 5.

2. Program loan

36. The program loan will be completed by June 2008.

V. DETAILED COST AND FINANCING PLAN DURING IMPLEMENTATION

37. Each EA will prepare detailed cost estimates of foreign exchange costs and local costs
for all major investment components of the project loan following the format given in Appendix 6.
These tables will be revised and updated annually, or more often if necessary, based on

2
Before loan effectiveness, the Government will establish this new company under the Companies Act 1994, as
amended.
 7

progress with contract awards and actual implementation of the project loan and to be attached
to the quarterly progress report.

38. Each EA will also prepare annually the forecast contract awards and disbursements for
the investment components of the project loan on a quarterly basis for one year ahead, in the
format shown in Appendix 7. This will be submitted to ADB by 15 January each year.

VI. CONSULTANT RECRUITMENT

39. International and national consultants will assist BPDB and its successor generation
company (NWPGC) for part A and PGCB for part B in preparing bidding documents, including
basic design, evaluating bids, and project implementation supervision that includes approval of
final design, as well as the Power Division of MPEMR in capacity development.3 All of these
consultants will be recruited in accordance with ADB’s Guidelines on the Use of Consultants
(2007, as amended from time to time). For parts A and B, the simplified technical proposals and
quality- and cost-based selection method will be used. For Part E, the quality- and cost-based
selection method and the simplified technical proposals or biodata technical proposals will be
used. The outline procedures for recruiting consultants following the QCBS procedure are given
in Appendix 8.

40. Consulting services required for part A are estimated at 34 person-months of

international and 72 person-months of national consultants with expertise in design,
construction, testing, and commissioning of gas-fired power generating plants. Consulting
services for part B are estimated at 38 person-months of international and 60 person-months of
national consultants with expertise in design, construction, testing, and commissioning of 400-
kV transmission line and gas-insulated switchyard substations. Consulting services for part E
are estimated at 150 person-months of international and 200 person-months of national
consultants with expertise in various areas including corporate and financial management,
information and communication technology, long-term system planning, governance, research
and development, and human resource development. The outline terms of reference for the
consulting services are provided in Appendix 9.

41. ADB has devised a Consultant Recruitment Activity Monitoring (CRAM) to monitor the
activities in recruiting the consultant and to avoid delays. Indicative CRAM frames based on
forecasted scheduling of recruitment for consulting packages are to be prepared by the EAs
with ADB’s assistance prior to commencement of recruitment. CRAM identifies the main
activities in the recruitment process, the time normally required for each activity and target dates
for completing each activity. The EA and ADB use CRAM to identify delays and take prompt
action to get the recruitment process back on schedule. Appendix 10 shows an example of a
CRAM frame and a flow chart of the CRAM process.

VII. PROCUREMENT

1. Project loan

42. Procurement of goods and services to be financed under the investment components
will be carried out in accordance with ADB’s Procurement Guidelines (2007, as amended from
time to time). For such procurement, bid specifications will be prepared in a manner to ensure
maximum competition under international competitive bidding. A third-party pre-shipment

3
While there are some consulting services budgeted for parts C and D, these will be funded by the EAs and are not
directly connected to the components funded by ADB.
8

inspection provision will be adopted to ensure quality of goods and equipments. In order to
encourage local industry, contracts estimated to cost less than $500,000 for equipment and
related services, and less than $1,000,000 for works, may be procured following national
competitive bidding (NCB) procedures while allowing foreign firms also to participate. Before
commencement of NCB procurement, ADB and the Borrower will review the Borrower’s
procurement procedures to ensure consistency with ADB requirements. Any necessary
modifications or clarifications to the Borrower’s procedures will be documented in the
procurement plan. ADB’s domestic preference scheme may be utilized. A detailed procurement
plan is in Appendix 11. Any contract variations beyond the limit specified in the corresponding
bidding document will require ADB’s prior approval.

43. ADB has approved advance procurement action in July 2006 and EAs have commenced
preparing draft requests for proposals for recruiting implementation consultants and draft
bidding documents for procurement. Retroactive financing is not permitted.

2. Program loan

44. The proceeds of the program loan will be used to finance the costs (excluding local
taxes and duties) of items produced in and procured from ADB’s member countries, preferably
procured for the power sector, other than those specified in the negative list in Appendix 12 and
imports financed by other bilateral and multilateral sources.

VIII. DISBURSEMENT PROCEDURES

1. Project loan

45. Disbursement procedures will be in accordance with ADB’s disbursement handbook, as

amended from time to time, and detailed arrangements agreed upon by the Government and
ADB. Since the disbursements under both project loans will be mainly for procuring goods and
services, ADB’s commitment letter and direct payment procedures will be utilized. The
disbursement handbook can be downloaded from ADB’s website:
http://www.adb.org/Documents/Handbooks/Loan_Disbursement/default.asp

2. Program loan

46. In accordance with the provisions of ADB’s Simplification of Disbursement Procedures

and Related Requirements for Program Loans, the proceeds of the program loan will be
disbursed to the People’s Republic of Bangladesh as the Borrower. No supporting import
documentation will be required. Loan proceeds will be disbursed on the basis of certification
provided by the Borrower confirming that in each year which policy loan proceeds are expected
to be disbursed the value of total imports minus (i) imports from nonmember countries, (ii)
ineligible imports, and (iii) imports financed under other official development assistance are
equal to or greater than the amount expected to be disbursed during such year. The
Government will certify that each withdrawal request complies with this formula. Otherwise,
import documentation under existing procedures will be required.

47. Prior to withdrawal, the Government will open a deposit account at Bangladesh Bank
into which the proceeds of the program loan will be deposited and from which all withdrawals
will be made. The accounts will be managed operated, and liquidated in accordance with terms
satisfactory to ADB. ADB retains the right to audit the use of loan proceeds and to verify the
accuracy of the Government’s certification for each withdrawal application.
 9

48. The program loan will be released in two tranches, each of $30 million equivalent, and
these will be made available upon fulfillment of the actions enumerated in the Program Policy
Matrix (Appendix 3).

IX. PROJECT MONITORING AND EVALUATION

49. ADB will monitor implementation of all components of the Project loan and the Program
loan through (i) quarterly progress reports; (ii) ADB’s review missions and midterm review
mission as mentioned in paras. 47-48. Performance will be evaluated on the basis of
performance indicators stipulated in the Design and Monitoring Framework.

A. Inception Mission

50. An inception mission was fielded during 25 July 2007 – 2 August 2007 to discuss and
finalize this PAM, and to ensure that all administrative matters pertaining to the Program are
properly in place and working relationships are established between concerned Bank staff and
EA’s staff. Details relating to report requirements, accounting system, compliance with loan
covenants, disbursement procedures and withdrawal applications were clarified during the
mission.

B. Review Mission

51. Review missions will be conducted to monitor overall progress of the Program, review
expenditures and cost estimates and most importantly discuss problems and issues causing
delays in project implementation. The review missions will also monitor the overall performance
of the EAs. The first review mission is tentatively set for November 2007 and succeeding review
missions will be fielded by ADB as and when required but at least twice a year.

C. Midterm Review Mission

52. In addition to the normal periodic reviews, ADB and the Government will undertake a
midterm review 2 years after loan effectiveness, focusing on the engineering, resettlement, and
environmental aspects of the ADB supported investments and reviewing the financial status of
the EAs.

X. REPORTING REQUIREMENTS

A. Quarterly Progress Report

1. Project loan

53. Each EA will prepare separate progress reports for its respective component and submit
these to ADB on a quarterly basis within 20 days from the end of each quarter. Each report will
provide a narrative description of progress made during the period, changes in the
implementation schedule, problems or difficulties encountered, the performance of the project
implementation consultants, and the work to be carried out in the next period. A progress report
will also include a summary financial account for the project loan components, consisting of
project expenditures for the year to date and total expenditure to date. Performance will be
evaluated based on indicators and targets stipulated in the design and monitoring framework.
The first quarterly progress report will be prepared for quarter ending 30 September 2007 and
shall be submitted to ADB by 20 October 2007. A sample format of the report and the guidelines
in calculating project progress is in Appendix 13.
10

2. Program loan

54. For the program loan, MPEMR, in collaboration with MOF will send quarterly progress
reports to ADB on the carrying out of the Program and on the accomplishment of the targets
and carrying out of the actions set out in the Policy Letter.

B. Audited Financial Reports

55. Each EA shall maintain separate accounts for the Project and for its overall operations,
and have its annual financial statements, including the income statement, balance sheet, and
cash flow statement, audited by a professional auditing firm acceptable to ADB. The audited
Project accounts and audited corporate financial statement shall be submitted to ADB within 6
months of the close of the financial year. A sample format of the Project Account is in
Appendix 14.

C. Project Completion Reports

56. Within three months from completion of their respective components, each EA shall
submit to ADB a project completion report. The report shall be composed of the execution and
initial operation of the Program, including its cost, the performance of the EAs of their obligations
under the Loan Agreement and the accomplishment of the purpose of the Loan. The format of
the report is in Appendix 15.

XI. AUDITING REQUIREMENTS

57. The accounting, auditing, and reporting systems and procedures for the project loans will
be established in accordance with accounting principles and practices satisfactory to ADB. The
EAs will maintain separate accounts for the project components. Independent auditors whose
qualifications, experience, and terms of reference are acceptable to ADB will audit the project
accounts and related financial statements annually. Certified copies in English of such audited
accounts and financial statements of each EA will be submitted to ADB not later than 6 months
after the end of the financial year to which they relate. All EAs were informed about ADB’s policy
on submitting audited financial statements and possible penalties for delayed submission.

XII. MAJOR LOAN COVENANTS

58. The major loan covenants which have been agreed among the Government, the EAs,
and the ADB, to be complied against the dates shown where applicable are in Appendix 16.

XIII. KEY PERSONS INVOLVED IN THE PROJECT

59. The key persons responsible for the implementation/administration of the Project are in
Appendix 17.

XIV. ANTICORRUPTION

60. ADB’s policy on Anticorruption (1998, as amended to date) was explained to and
discussed with the Government and EAs. Consistent with its commitment to good governance,
accountability, and transparency, ADB reserves the right to investigate, directly or through its
agents, any allegedly corrupt, fraudulent, collusive, or coercive practices relating to the
 11

Program. To support these efforts, relevant provisions of ADB’s policy on Anticorruption are
included in the loan regulations and bidding documents. In particular, all contracts financed by
ADB in connection with the investment components shall include provisions specifying the right
of ADB to audit and examine the records and accounts of the EAs and all contractors, suppliers,
consultants, and other service providers as they relate to the Program.

AGREED

For the Asian Development Bank For the Executing Agencies and
Implementing Agency

For Power Division, MPEMR

Pil-Bae Song
Head, Project Administration Unit (SGD)
Energy Division, South Asia Department S. M. Mesbahul Islam
Joint Secretary (Development)

For BPDB/NWPGC

(SGD)
Md. Mokbul Hossain
Project Director

For PGCB

(SGD)
A.B.M. Harunur Rashid
Managing Director

For DPDC

(SGD)
Md. Ataul Masud
Managing Director

For DESCO

(SGD)
Md. Monzur Rahman
Director (Technical)
12 Appendix 1

PROPOSED OUTPUTS FOR PROJECT LOAN

A. Outputs

1. Part A: Clean Energy Capacity Expansion

1. Part A comprises two sub-components: (i) Part A-1: Sirajganj 150 mega-watt (MW) gas
turbine peaking power plant; and (ii) Part A-2: Khulna 150 MW gas turbine peaking power plant.
Part A-1 is to construct a new 150 MW natural gas-fired simple cycle gas turbine peaking power
plant in a recently developed site in Sirajganj in the Northern region of Bangladesh, near the
western end of the Jamuna bridge about 120 kilo-meter (km) north-west of Dhaka. The output
includes the following main facilities: (i) a 150 MW natural gas-fired gas turbine-generator set
with all necessary auxiliaries; (ii) two 100% capacity gas booster compressors; (iii) step up
11/230 kilo-volt (kV) transformer and 230 kV switchgear with associated equipment and
materials; (iv) central control equipment and computers; (v) tools for erection and maintenance
and essential spares; (vi) civil and building works; (vii) 230 kV transmission line with protection
equipment to connect to the nearby PGCB 230 kV switching station; and (viii) 3 MW generator
for emergency/auxiliary power supply.

2. Part A-2 is to construct a new 150 MW simple cycle gas turbine peaking plant in Khulna
in the Western region of Bangladesh near the Bhairab river. The plant will be installed in the
existing site of Khulna (Goalpara power station). The outputs include the following main
facilities: (i) a 150 MW gas fired turbine-generator set with all necessary auxiliaries; (ii) two
100% capacity gas booster compressors; (iii) step up 11/132 kV transformer and 132 kV
switchgear with associated equipment and materials; (iv) central control equipment and
computers; (v) dual-fuel system; (vi) two oil reserve tanks; (vii) tools for erection and
maintenance and essential spares; (viii) civil and building works; (ix) a 132kV double circuit
underground transmission line to connect to the nearby PGCB substation in Khulna; and (x) 1
MW generator for emergency/auxiliary power supply.

2. Part B: Transmission System Efficiency Improvements

3. Part B comprises three sub-components: (i) Part B-1: a 400 kV overhead transmission
line from Meghnaghat to Aminbazar including extension of two 230 kV bays each at
Meghnaghat and Aminbazar substations; (ii) Part B-2: transmission system improvements in
Aminbazar – Old Dhaka Airport, Dhaka Cantonment and Dhaka University areas including
associated substations; (iii) Part B-3: three transmission lines and associated substations in
Western and Northern Regions of Bangladesh. The detailed outputs are:

(a) Part B-1. Construction of about 50 km of 400 kV double circuit line from
Meghnaghat to Aminbazar, to be operated initially at 230 kV; two line bays for
termination of 230 kV lines at Meghnaghat substation, including all necessary control,
metering, protection, and other equipment (one and half breaker scheme); two line bays
for termination of 230 kV lines at Aminbazar substation, including all necessary control,
metering, protection, and other equipment (double bus scheme), installation of six
control panels in the proposed 400/230 kV network control room to be constructed at
Meghnaghat.

(b) Part B-2: Construction of about 4 km of 230 kV double circuit overhead line from
Aminbazar to Kallyanpur and about 6 km of 230 kV double circuit underground cable
line from Kallyanpur to Old Dhaka Airport; about 7 km of 132 kV double circuit
 Appendix 1 13

underground cable line from Old Dhaka Airport to Dhaka University; about 5 km of 132
kV double circuit underground cable line from Old Dhaka Airport to Dhaka Cantonment;
about 3 km of 132 kV double circuit underground cable line from Rampura to Ullon; two
line bays for termination of 230 kV line at Aminbazar substation, including all necessary
control, metering, protection and other equipment; 230/132 kV, 2x300 megavolt-ampere
(MVA) gas insulated switchgear (GIS) substation at Old Dhaka Airport including all
necessary control, metering, protection and other equipment; 132/33kV, 2x80/120 MVA
GIS substations each at Dhaka University, Dhaka Cantonment and Old Dhaka Airport
including all necessary control, metering, protection, and other equipment.

(c) Part B-3: Construction of about 73 km of 132 kV single circuit line on double
circuit tower from Magura to Chuadanga through Jhenaidah; about 40 km of 132 kV
single circuit line on a double circuit tower from Naogaon to Joypurhat; about 45 km of
132 kV single circuit line from Thakurgaon to Panchagar; new 132/33 kV, 2x25/41 MVA
substations in Magura, Chuadanga, Joypurhat, and Panchagar; one line bay for
termination of 132 kV line each at existing 132/33 kV substations at Naogaon and
Thakurgaon and two line bays at Jhenaidah 132/33 kV substation.

3. Part C. Distribution System Efficiency Improvements in DESA Area

4. Part C comprises four sub-components: (i) Part C-1: Reinforcement, Renovation and
Augmentation of 10 Existing 33/11kV Substations; (ii) Part C-2: Development of New 132/33kV
and 33/11kV Substations; (iii) Part C-3: Procurement and Installation of 132/33kV, 50/75 MVA
Transformers; and (iv) Upgradation of Shyampur Bangladesh Small and Cottage Industries
Corporation 11kV Switching Station to a regular 33/11kV Substation.

(a) Part C-1. Replacement of existing 10/14 MVA transformers of Satmasjid,

Jigatala, Dhanmondi, Tajgoan, Khilgaon, Kazla, Postagola, Fatullah, Demra, and Taltala
substation with 19 numbers of 20/28 MVA power transformers; installation of about 4.2
km of underground 33 kV and about 22.2 km of underground 11 kV connecting cables;
and replacement of other non-performing, worn, or antiquated equipment including
breakers, control panels, structures, and sundry items.

(b) Part C-2. Construction of new substations including transformers, breakers,

protection, and all necessary facilities at Lalbagh 132/33 kV, 2x50/75 MVA, Madertek
132/33 kV, 2x50/75 MVA, Dhanmondi 132/33 kV, 2x50/75 MVA (conversion into a
regular grid substation); 33/11 kV, 2x20/28 MVA substations at Mitford, Dhaka
University, IG Gate, Magbazar T&T Colony, and Sherebangla Nagar; and installation of
about 10 km single circuit 132 kV underground cable; about 5 km four circuit 132 kV
overhead line and about 4 km single circuit 132 kV overhead line (on an existing tower),
about 36 km single circuit 33kV underground cable; and about 10 km single circuit 11kV
underground connecting cables.

(c) Part C-3. Procurement and installation of 3x50/75 MVA transformers and
associated equipment including 3 numbers of 132kV circuit breakers, 13 numbers of
33kV switchgears and circuit breakers in the existing system at Maghbazar, Maniknagar,
and Shyampur 132/33kV substations; and about 3.5 km of 33kV underground cable.

(d) Part C-4. Upgrading of Shyampur Bangladesh Small and Cottage Industries
Corporation 11kV switching station to a regular 33/11kV substation including
procurement of 2x20/28 MVA 33/11kV transformers, 6 numbers of 33kV switchgears, 15
14 Appendix 1

numbers of 11kV switchgears along with connecting 0.6 km of 33kV and 1.5 km of 11kV
cables.

4. Part D. Distribution System Efficiency Improvements in DESCO Area

5. Part D comprises two sub-components: (i) Part D-1: Upgrading and Expanding
Distribution System in Gulshan Circle; and (ii) Part D-2: Upgrading and Expanding Distribution
System in Mirpur Circle.

(a) Part D-1: Construction of four new 33/11kV of capacity 2x20/28MVA at

Bashundhara, Defense Officers Housing Society (DOHS) (Mohakhali), Aftab Nagar
Badda, and Civil Aviation Authority of Bangladesh including necessary switchgear
control and ancillary facilities; rehabilitation and upgrading of Uttara and ADA 33/11kV
Substation by 2x20/28MVA transformers in place of 2x10/14MVA transformers;
construction of about 120km of 33KV underground cable line to connect these new
substations to the nearest grid substations including 180 km of 11kV underground cable
line; about 100km of 11KV and 100km of 0.4kV aerial bundled cable; about 35km of
11kV, 125 km of 11/0.4kV and 125km of 0.4KV overhead lines; conductor and
insulators; 500 numbers of 11/0.4kV, 200kVA distribution substations with necessary
protection equipment; 250 numbers of 11 kV metering unit with necessary accessories,
5,000 numbers of 400V and 100,000 numbers of 230V consumers meters; 11kV
breakers; capacitor banks, accessories and related equipment. This scope includes
additional materials for expansion and rehabilitation of distribution networks in Tongi
area.

(b) Part D-2: Construction of two new 33/11kV of capacity 2 x 20/28MVA at DOHS
Mirpur and Baunia including necessary switchgear control and ancillary facilities;
rehabilitation and upgrading of old Mirpur and Kafrul 33/11kV substations by
2x20/28MVA transformers in place of 2x10/14MVA transformers; construction of about
105km of 33KV underground cable line to connect these new substations with the
nearest grid substations including 210km of 11kV underground cable line; about 10km of
11kV, 20km of 0.4 kV aerial bundled cable; about 125km of 11/0.4kV and 125km of
0.4KV overhead lines; conductor and insulators; 750 numbers of 11/0.4kV, 200kVA
distribution substations with necessary protection equipment; 25 numbers of 11/0.4kV
package type substations; 250 numbers of 11KV metering unit with necessary
accessories, 3,500 numbers of 400V and 40,000 numbers of 230V consumers meters;
11kV breakers; capacitor banks, accessories and related equipment.

B. Rationale

1. Part A: Clean Energy Capacity Expansion

6. The ADB-financed Power System Master Plan Update indicates that about 20% of the
additional capacity would be needed to serve peak demand. The simple cycle gas turbine
technology to be adopted for the power plant provides the least cost generation for peaking duty
because it offers reasonable fuel efficiency combined with low capital cost per KW and low
emission. The site for Sirajganj peaking power station, owned by the Bangladesh Power
Development Board (BPDB), has already been developed and has ample space for the plant.
Khulna peaking power plant will be constructed in the existing site owned by BPDB. The fuel will
be natural gas that will be supplied through the nearby gas transmission network. Natural gas
reserves in Bangladesh are considered sufficient to supply these power plants and all other
 Appendix 1 15

existing and committed plants throughout their service lives. The Power Grid Company of
Bangladesh Limited (PGCB) is constructing a 230/132 KV switching station adjacent to the
Sirajganj site, and electricity from Khulna peaking power plant can be evacuated to the nearby
substation in Khulna owned by PGCB. Placing new power generation in the Northern and
Western region helps balance loads and resources there, improves voltages and stability, and
reduces transmission losses.

2. Part B: Transmission System Efficiency Improvements

7. Part B-1: The Dhaka region, primarily the greater Dhaka area, supplies nearly half the
national demand for electricity. All the regions of the country have been growing at roughly
equal rates over the last ten years, and are expected to continue this pattern. Dhaka’s larger
absolute demand means it has grown and is expected to grow faster in terms of peak demand
in MW and annual energy in Gwh. Accordingly more facilities must be added than in other
regions to keep pace with the demand. The national strategy for serving this load is to build
power plants close to Dhaka and transmit power through a ring of recently completed 230 kV
lines and a ring of 132 kV lines surrounding the Greater Dhaka area. Radial 132kV lines and
underground cables evacuate power to substations within the area that reduce voltages further
for distribution to end-use customers. Nearly all of the generation is on the eastern side of
Dhaka, leading to difficulty in transferring the power to feed demand on Dhaka’s western side.
The Meghnaghat Power Plant on Dhaka’s south-east side now generates 450MW. BPDB plans
for another three 450 MW units at the site, for a total of 1,800 MW. Much of the power from the
new units would flow toward Aminbazar over segments of the 230kV ring that are already
heavily loaded. New lines are mandatory to move this power and serve the growing demand in
western Dhaka. Using 400 kV rather than 230 kV circuits has the advantages of minimizing the
need for additional right-of-ways, reducing losses, and catering for more future load growth. The
line will be built for 400 kV on a schedule to meet the operating date of the second 450 MW unit
at Meghnaghat, currently planned for 2009. Initial operation will be at 230 kV.

8. Part B-2: Load continues to grow at the already heavily-loaded 132/33 kV substations in
western Dhaka. Part B-1 will bring additional power to Aminbazar substation and Part B-2 brings
the power into high load-growth areas within Dhaka to serve the growing load and relieve
currently heavily loaded substations.

9. Part B-3: Several locations in the Northern and Western regions with substantial loads
are served through long 33 kV distribution system lines, which is not well suited for such an
application. This leads to frequent outages, low voltages, and excessive losses. Such problems
with electricity supply hamper economic development and poverty alleviation. In addition to the
current problems, the 33 kV lines will be unable to transmit power to serve expected load growth
in the locations. Installing higher voltage transmission lines under Part B-3 will help resolve
these problems.

3. Part C: Distribution System Efficiency Improvements in DESA Area

10. Ten of the heavily overloaded 33/11 kV substations owned by the Dhaka Electric Supply
Authority (DESA) need urgent improvement. Especially, five of them date from the 1960s,
posing maintenance difficulties due to unavailability of spare parts for such old equipment. The
transformers are undersized for the demand. The areas served by these substations suffer
from load shedding and low voltages, while the system suffers from excessive losses and low
power factors. The substations cannot accommodate existing demand, much less new load
from the rapidly growing areas. Distribution systems in the DESA area also needs new
16 Appendix 1

substations and additional distribution capacity to meet growing demand and to help alleviate
the existing problems of low voltage, low power factor, excessive losses, load shedding, and
overloaded equipment. Part C will upgrade and augment the distribution capacity in this area,
which will improve efficiency in power distribution and reduce the overall system losses.

4. Part D: Distribution System Efficiency Improvements in DESCO Area

11. The Dhaka Electric Supply Company Limited (DESCO) shares the same congested
urban environment and need to accommodate high load growth as DESA. Low voltage, low
power factor, excessive losses, load shedding, and overloaded equipment afflict DESCO as
they do DESA. DESCO has organized its system upgrade projects based on geographical area
rather than existing and new substations. Part D-1 covers the Gulshan Circle including Tongi
area that will be transferred from DESA to DESCO, and Part D-2 covers the Mirpur Circle within
DESCO’s service territory. Both of these subcomponents will upgrade and expand all aspects of
its system, from the 33/11 kV substations to the customers’ meters and all facilities in between
with increased distribution capacity. As a result, the distribution system efficiency in the DESCO
area will be improved, while overall system losses will be reduced.
 Appendix 2 17

CAPACITY DEVELOPMENT PROGRAM

A. Objective

1. The objective of the Capacity Development Program (CDP) is to enhance institutional

resources of the power sector to improve utility performance and promote sustainable
operations. Capacity development will help power sector entities (PSEs) pursue
commercialization through unbundling, corporatization, decentralization and competition, while
supporting, among others, their corporate governance, institutional development, financial
management and audit capabilities, operational improvement, and human resource development
to enhance overall sector efficiency and performance. The CDP will also help strengthen the
policy formulation and monitoring capabilities in the relevant government agencies, especially,
the Power Division of the Ministry of Power, Energy and Mineral Resources to support the
implementation of the reform roadmap. In total, it will support the power sector to improve its (i)
corporate management; (ii) technical expertise; (iii) system planning; (iv) good governance; (v)
customer relations; (vi) research and development; (vii) human resource development; and (viii)
formulation of future investment projects.

B. Guiding Principles and Approach

2. To accelerate knowledge transfer of best practices with some economy of scale, the
CDP will be formulated and implemented in an integrated manner that respects the authority
and autonomy of PSEs. A cost effective approach will be taken by (i) full utilization of existing
facilities and training programs; and (ii) harmonization of various technical assistance and
support being offered by other development partners. The CDP will draw on a combination of
human resource training programs, institutional/organizational setup, and computer systems
with reasonably priced hardware and software. In order to ensure a wide scope of beneficiaries,
the CDP will include specific measures to enable women and other vulnerable groups to
participate in the training programs developed under this component.

3. Keeping these objectives and guiding principles in view, the CDP will begin with a
sector-wide needs assessment to analyze the gap between the current institutional capacity of
PSEs and international benchmarks and standards for power utilities. The needs assessment
will identify priorities of the CDP with specific scope and time schedule to be determined by the
Government in consultation with the relevant PSEs and other stakeholders. Institutional
arrangements for implementing the CDP will also be examined. Given the proposed magnitude
of the CDP, the option of establishing a commercial entity for conducting technical training
programs will be explored with a detailed cost-benefit analysis during the needs assessment.

C. Priority Areas for Capacity Development

4. Subject to refinement based on the proposed needs assessment, the priority areas of
the CDP should include: corporate and financial management, information and communication
technology,1 enhancement of technical expertise, long-term system planning, good governance,
customer relations, research and development, human resource development and training, and
private sector participation.2

1
Management Information Systems are being addressed with support from World Bank; therefore ADB support will
focus on complementary information technology needs.
2
Private sector participation will be addressed under a separate ADB technical assistance.
18 Appendix 2

1. Corporate and Financial Management

5. Several PSEs have been established through an on-going reform process and are
moving towards further commercialization, and additional PSEs are expected to be created in
the near future. Institutional reforms have tended to focus on the engineering side of power
operations, rather than the broader corporate strategy and finance aspects of the power
business. As a result, financial commitments still tend to be entered into without the proper
involvement of the finance departments, leading to risky ventures. The accounting, financial
reporting, and budget functions are highly centralized at the company headquarters. Financial
performance is not properly reported, monitored, or reviewed at the business unit level and
there is an inadequate system of profit measurement and performance related reward. Thus,
corporate and financial management capacity needs to be urgently developed. This component
may include:

(i) Assistance in enhancing the corporate management mechanism of PSEs

including long-term business plans covering corporate strategy, investment and financial
plans, funds mobilization, and commercialization;
(ii) Improvement in the existing organizational structure of the enterprises to
strengthen managerial capability and improve operational efficiency, and cost control;
(iii) Improvement in the staffing structure, including staffing levels and skills mix
needed for efficient operations;
(iv) Strengthening financial management capabilities by, e.g., (i) regular assessment
of accounting and internal control systems to monitor expenditures and other financial
transactions and safe custody of project-financed assets; (ii) enhancement of financial
management disciplines; (iii) advanced accounting and internal control systems; (iv) use
of advanced information technology (IT) based financial management systems; and (iv)
empowerment of domestic external auditors in order to ensure efficient and accountable
financial management systems;
(v) Improvement in budget processing and financial projection modeling;
(vi) Methodologies for a business planning and corporate planning function for short-
term (five years) and long-term (ten years); operational plan preparation and sustainable
operations to strengthen management practices and ensure fiscal transparency for
revenues and expenses; and
(vii) Implementation of a business plan on the basis of the organization, budget, and
financial reviews to guide commercial operations; and assistance with its incorporation
into the organizational plan, human resources plan, and financial plan.

2. Information and Communications Technology

6. The needs assessment will include the review of various requirements for project
monitoring and reporting, and a review of support being offered by development partners. In
addition to utility company management information systems (MIS), additional information and
communications technology (ICT) are required for planning and regulatory commission
activities. Utilities MIS should be adequate to include essential financial management
capabilities, including electronic billing and collection (e.g., on-line billing and payment options).
Additional ICT may be needed for system planning, real-time optimization of grid operations,
generation plant operating and monitoring systems, web-based procurement (e-procurement),
expanded time-of-day tariff implementation, and pilot testing of pre-paid metering. This
component will:
 Appendix 2 19

(i) Determine MIS and other ICT requirements for the sector (accounting for other
donor-funded activities);
(ii) Develop specifications, cost estimates, and ICT implementation plan; and
(iii) Fund short-term, high-priority ICT upgrades.

3. Enhancement of Technical Expertise

7. To improve operational efficiency, especially, for further reduction of power outages and
system losses, technical expertise of engineers and field staff needs to be further developed.
Knowledge and new skills are to be acquired to operate facilities and equipment to be newly
installed, e.g., 400 kV transmission lines and substations. The scope may include:

(i) Improvement in emergency operations using simulators in generation,

transmission, and distribution to reduce outage recovery time;
(ii) Enhancement in methodology and frequency of periodical maintenance;
(iii) Establishment of a knowledge sharing mechanism of best practices among
PSEs; and
(iv) Introduction of a national level skill grading/certification program.

4. Long-term System Planning and Preparation of Future Projects

8. A power system master plan for generation and transmission system has recently been
updated for the period from 2006 to 2025 with technical assistance from the Asian Development
Bank (ADB). The rapid growth of demand, however, requires regular updates of this master
plan. Furthermore, in the absence of a master plan for the distribution system, the Government
and PSEs are unable to develop a comprehensive long-term investment plan for the distribution
system. These skills need to be internalized at the Government and each PSE level. The scope
may include:

(i) Regular updates of demand forecasts at the national and corporate level;
(ii) Preparation of a power system master plan for distribution systems based on a
least cost analysis, placing high priority to the Greater Dhaka Distribution System;
(iii) Introduction of a regular updating system for the power system master plan
covering the full spectrum of generation, transmission, and distribution;
(iv) Preparation of future investment projects for generation, transmission, and
distribution systems including the areas of the Rural Electrification Board based on the
master plan;
(v) Establishing performance audits, standardization of performance indices,
dissemination of performance data, benchmarking with international utilities; and
(vi) Creation of an information sharing mechanism between PSEs in long-term
system planning and demand forecasts.

5. Good Governance

9. Good governance, both at the sector and the corporate level, is invariably emphasized in
the Government’s power sector reform policy papers, and it may be achieved through
enhancing predictability, accountability, transparency, and employee and other stakeholder
participation in the business process of PSEs. Aside from building financial management
capabilities of PSEs as outlined above, this component may include:
20 Appendix 2

(i) Introduction of measures to promote good governance in the power sector based
on international best practices;
(ii) Improvement of the procurement system through (i) bid specifications and
packaging to be prepared to ensure maximum competition under international
competitive bidding procedures; (ii) a third-party pre-shipping inspection provision to be
adopted to ensure quality of goods and equipment; and (iii) introduction of e-
procurement system using ICT technology to increase transparency and efficiency in
procurement;

6. Customer Relations

10. To enhance the quality of service and client satisfaction, customer relations functions
need to be strengthened. The best practice of billing and collection should be shared by all the
distribution entities. Acquiring customers’ understanding on power sector reform and efforts of
each entity to improve efficiency will provide ownership of the people and pave a way for
consensus building on reform measures. This component may include:

(i) Enhancement of client relation functions at each entity, e.g., customer service
centers;
(ii) Development of customer information system on billing, collection, connection,
and disconnection;
(iii) Strengthening of outreach program at sector and corporate level, e.g.,
regularization of client survey;
(iv) Implementation of awareness raising programs to all the employees;
(v) Provision of mission statements for client orientation and corporate action
program to enhance client satisfaction level; and
(vi) Conducting regular customer surveys on the quality of the services.

7. Research and Development

11. To improve operational efficiency and stability of power supply, application of the latest
energy efficiency and clean development technology, e.g., demand side management,
renewable energy, and environment protection. This component may involve:

(i) Review of pre-feasibility studies conducted under the ADB regional technical
assistance program (PREGA) to determine investment potential;3
(ii) Collaboration with international institutes to research the applicability of
advanced technology to the Bangladesh power sector; and
(iii) Implementation of internship program collaborating with academic institutes.

8. Human Resource Development and Training

12. This component will support the overarching human resource development of PSEs and
the Government agencies through structured programs of in-country and international training,
and organized programs of on-the-job training. Recommendations for training programs will be
formulated during the needs assessment, and additional detailed training activities may be
defined during early implementation. This component will:

3
This activity may be supported as part of the TA for private sector participation (see footnote 2).
 Appendix 2 21

(i) Assess the human resource development and training needs for strengthening
the planning, engineering, procurement, construction supervision, operational and
financial management capabilities;
(ii) Evaluate the feasibility of creating a new Bangladesh power sector training
institute;
(iii) Assess the prospects for upgrading current training facilities owned by PSEs,
including physical rehabilitation and acquisition of basic ICT systems for training
programs;
(iv) Develop plans for on-the-job and external training; and
(v) Organize training programs in accounting and financial management including
internal control, audit and financial statements and reporting systems in accordance with
identified needs.

D. Outline Terms of Reference

13. The outline terms of reference are in Appendix 9.

E. Cost Estimates

14. The detailed cost estimates are provided in Appendix 4. They are however indicative,
assuming that the full scope outlined above will be covered. A more accurate cost estimate will
be prepared during the needs assessment stage.
 PROGRAM POLICY MATRIX

22
Impact: Sustainable economic development through increased capacity and improved reliability of power supply.
Outcome: Improved power sector sustainability through financial and organizational restructuring.
Outputs: Program outputs include the following five pillars:

Appendix 3
Pillar 1: Development of a national action plan for power sector reform
Pillar 2: Establishment of a fully functioning legal and regulatory framework
Pillar 3: Enhanced financial health of power sector entities
Pillar 4: Continued restructuring of sector entities
Pillar 5: Promotion of private sector participation and public-private partnership
Strategic Goal Key Targets Progress First Tranche Condition Second Tranche
(Expected by June 2007) Condition
(Expected by June 2008)
Pillar 1: Development and Implementation of a National Action Plan for Power Sector Reform
Develop and A detailed road map for 3-year Road Map for Power Sector Government approval of 3-
implement a time power sector reform based on Reforms (2006–2008) was drafted in year Road Map for Power
bound sector the approved policy papers of November 2005 and presented to Sector Reforms
reform action the Government, i.e., Power development partners in November (2006–2008) as agreed
plan. Sector Reforms in 2005. Development partners’ between Asian
Bangladesh (PSRB), 1994 consolidated comments were forwarded Development Bank (ADB)
and Vision and Policy to the Government in January 2006. and the Borrower.
Statement for Power Sector Final stakeholder consultation process
Reforms, 2000. on 3-year road map was completed in
June 2006.
A strengthened monitoring Power Cell of the Ministry of Power, Establishment and
system to oversee the sector Energy, and Mineral Resources implementation of a regular
reform process. (MPEMR) is mandated to plan, monitoring and reporting
implement, and monitor the power sector mechanism by MPEMR to
reform process, but no systematic oversee the power sector
monitoring mechanism is in place. reform process.

Develop a Updated Power System Completed. Power System Master Plan

long-term Power Master Plan for 2006–2025.
System Master
Plan.
A strategy paper for rural
electrification program’s
transition into unbundled
energy sector.
has been updated for generation and
transmission for 2006–2025 under ADB
TA-4379.
Completed. Strategy paper was
prepared in January 2005.
 3

Strategic Goal Key Targets
Develop a A sector-wide, medium-term
medium-term, capacity building program
sector-wide through a comprehensive
capacity building study on sector capacity.
program.
Pillar 2: Establishment of a Fully Functioning Legal and Regulatory Framework
Establish and Passage in Parliament of
operationalize an Energy Regulatory
independent Commission Act.
energy Establishment of an energy
regulatory regulatory commission
commission. pursuant to the Energy
Regulatory Commission Act.
Operationalization of the
sector regulator.
Set Licensing Publication of the Licensing
Progress First Tranche Condition Second Tranche
(Expected by June 2007) Condition
(Expected by June 2008)
The Power Division of MPEMR is Submission of a technical
drafting a 3-year capacity building project proposal
program for the entire power sector to satisfactory to ADB for a
enhance corporate management, medium-term capacity
financial management, and technical building program by the
skills in generation, transmission, and Power Division of MPEMR
distribution. to the Planning
Commission.
Completed. Parliament passed the
Energy Regulatory Commission Act in
2003.
Bangladesh Energy Regulatory Appointment of the
Commission (BERC) was established in remaining one BERC
April 2004 and three commissioners out commissioner.
of five were appointed during 2004 and
2005. In July 2006, another
commissioner was appointed.
Recruitment of the remaining one
commissioner is to be re-advertised.
An approved organogram is essential for Approval of BERC
BERC to recruit staff. organogram by the
BERC organogram was cleared by the Secretaries Committee on
Ministry of Establishments on 24 July Administrative
2006. BERC pay structure along with the Developments.
approved organogram was sent to the
Finance Division of the Ministry of
Finance on 25 July 2006 for clearance.
The Ministry of Law cleared the Gazette notification of the

Appendix 3
Regulations to Regulations by the Licensing Regulations in June 2006. Licensing Regulations as
ensure safety Government. BERC confirmed the Regulations and finalized by BERC.
and fair business submitted them for gazette notification in
in power supply. June 2006.

23
 Strategic Goal Key Targets Progress First Tranche Condition Second Tranche

24 Appendix 3
(Expected by June 2007) Condition
(Expected by June 2008)
Set Tariff Tariff Regulation and tariff Power pricing framework was approved Submission of the Electric Gazette notification of the
Regulations to adjustment process adopted by the Government in 2005, and Generation Tariff Electric Generation Tariff
achieve cost to achieve cost recovery. accordingly BERC is drafting the Electric Regulations with the tariff- Regulations as finalized by
recovery. Generation Tariff Regulations along with setting mechanism to the BERC.
the tariff-setting mechanism. Energy and Mineral
Resources Division of
MPEMR by BERC.
Incorporate good Collective efforts on Being addressed under ADB TA 4140-
governance into anticorruption taken under BAN by promoting medium- to long-term
sector regulatory supervision of the development of collective efforts at
framework. Anticorruption Commission. various institutes involved in the power
sector.
A system ensuring public Completed. Latest operational and
disclosure of operational and financial information from the power
financial information from the sector entities is available on the Power
power sector entities to Cell website, www.powercell.gov.bd.
enhance transparency in
business.
Pillar 3: Enhanced Financial Health of Power Sector Entities
Prepare and Financial restructuring Power Grid Company of Bangladesh Preparation of a draft Approval by the Ministry of
implement a planned and executed for key Limited (PGCB) and Dhaka Electric financial restructuring plan Finance of the draft
financial power sector entities. Supply Company Limited (DESCO) for BPDB and DESA by the financial restructuring plan
restructuring became profitable organizations, with Power Division of MPEMR for BPDB and DESA.
plan for key net profits since fiscal year 2004. in a manner satisfactory to
power sector Draft financial restructuring plan for ADB.
entities. Bangladesh Power Development Board
(BPDB) and Dhaka Electric Supply
Authority (DESA) was drafted under
ADB TA 4379 in March 2006.
Stakeholder consultation is being
undertaken on the financial restructuring
plan of BPDB and DESA.
 3

Strategic Goal Key Targets
Settle unfunded Budget allocated by the
pension and Government to settle
gratuities to unfunded pension and
accelerate gratuities for corporatized
corporatization entities to (i) establish
process. appropriate trusts or funds for
various terminal benefits, and
(ii) contribute to the trusts for
future service in accordance
with the requirements of
applicable law.
Progress
Budget allocation is being discussed
among Government ministries.
First Tranche Condition
(Expected by June 2007)
Budget allocation of at
least Tk1.8 billion by the
Ministry of Finance for
provision of unfunded
pension and gratuities for
West Zone Power
Distribution Company
Limited (WZPDC),
Ashuganj Power Station
Company Limited (APSC),
and Northwest Zone Power
Distribution Company
Limited (NWZPDC).
Second Tranche
Condition
(Expected by June 2008)
Budget allocation of at least
another Tk1.8 billion by the
Ministry of Finance for
provision of unfunded
pension and gratuities for
Electricity Generation
Company of Bangladesh
Limited (EGCB) and Dhaka
Power Distribution
Company Limited (DPDC).

Reduce accounts Accounts receivable of the Outstanding debts owed by private
receivable of the power sector entities reduced consumers as of December 2005 are
power sector to an acceptable level. reduced to about 3.0 times the average
entities. monthly billing.
Outstanding debts owed by the
Government as of December 2005 are
Tk1.4 billion, or 6.0 times the monthly
average billing.
Outstanding debts owed by the
Government’s autonomous and
semiautonomous bodies as of
December 2005 are Tk3.5 billion, or
12.7 times the monthly average billing.
Reduction of the
Government’s outstanding
debts to less than Tk1.2
billion.
Reduction of the
Government’s autonomous
and semiautonomous
bodies’ outstanding debts
to less than Tk3.0 billion.
Reduction of the
Government’s outstanding
debts to less than Tk1.0
billion.
Reduction of the
Government’s autonomous
and semiautonomous
bodies’ outstanding debts
to less than Tk2.5 billion.

Appendix 3
25
 Strategic Goal Key Targets
Pillar 4: Continued Restructuring of Sector Entities
Restructure the Economically viable
remaining power unbundling of electricity
sector entities supply into a number of
through separate generation and
corporatization. distribution companies, plus a DESCO, APSC, EGCB, and WZPDC.
single transmission
company—all registered
under the Companies Act
1994; appointment of
management, constitution of
boards of directors and
transfer of assets.
Improved corporate
governance through
appointment of competent
boards of directors for the
corporatized entities.
Pillar 5: Promotion of Private Sector Participation and Public-Private Partnership
Promote private Formulation of a policy to
sector promote independent power
investment in producer investments.
power sector
development.
Public procurement policies
reformed to ensure
transparency and fairness in
bidding process.
Progress First Tranche Condition Second Tranche
26
(Expected by June 2007) Condition
(Expected by June 2008)
Appendix 3
A number of companies have been Constitution of boards of
established in accordance with the directors of DPDC, EGCB,
Government’s unbundling policy and and NWZPDC in a manner
started business, including PGCB, satisfactory to ADB, and
advertisement for
NWZPDC was established in 2005 to recruitment of
take over BPDB’s distribution network. management of DPDC and
DPDC was established in 2005 to take NWZPDC.
over DESA’s distribution system.
Corporatization of DESA is being
assisted by ADB TA-3978.
Study for corporatization of BPDB as a
holding company is being assisted by
ADB TA-4626. Work started in March
2006.
Completed. The principles and
procedures for appointment of boards of
directors were agreed upon under ADB
Loan 2038.
Completed. The Private Sector Power
Generation Policy was approved by the
Government in 1996.
Completed. New public procurement
regulations became effective in October
2003.
 3

Strategic Goal Key Targets Progress First Tranche Condition Second Tranche
(Expected by June 2007) Condition
(Expected by June 2008)
Promote public- Local-currency bonds of the Completed. The Government approved
private corporatized sector entities PGCB’s bond issuance in February
partnership. issued to raise fund directly 2004.
through local capital markets.
Shares of corporatized sector In April 2006, the Ministry of Finance Formal approval by the Subject to favorable market
entities partially off-loaded in sanctioned approval in principle for Power Division of MPEMR conditions, initial off-loading
the stock market. off-loading of 25% of PGCB and DESCO for PGCB and DESCO to of PGCB and DESCO
shares in the stock market. off-load up to 25% of their shares in the stock market.
shares in the stock market
in one or more tranches.
Establish good Commercially oriented Completed. Commercially oriented
governance corporate governance system corporate governance systems have
structure at established. been adopted in the corporatized power
sector and sector entities including (i)
corporate levels. independence of the boards of directors
from the Government, (ii) market-
oriented incentive packages for staff, (iii)
defined delegation of powers to staff,
and (iv) improved management
information systems.
Sources: The Government of Bangladesh and Asian Development Bank
.

Appendix 3
27Ap
28 Appendix 4

Detailed Project Cost Estimates

Part A: Clean Energy Capacity Expansion

($ million)

Serial Item Unit Quantity Cost

FC LC Total

1 Pre-construction Cost
1.1 Survey and Design 0.00 0.06 0.06
1.2 Environment and Social Study LS 0.00 0.07 0.07
1.3 Land Acquisition 0.00 0.00 0.00
1.4 Land Requisition 0.00 0.00 0.00
1.5 Resettlement Compensation 0.00 0.00 0.00
1.6 Land Development 0.00 0.03 0.03
Subtotal 0.00 0.16 0.16

2 Civil works
2.1 Non-residential buildings LS 0.00 1.49 1.49
2.2 Residential buildings Sqm 3,780 0.00 1.56 1.56
2.3 Civil Works (Turnkey Part) 0.00 14.96 14.96
Subtotal 0.00 18.01 18.01

3 Power Station Equipment

3.1 New 1 x 150 MW Simple Cycle Gas Turbine Ge No 2 82.12 0.00 82.12
3.2 Step-up transformer No 2 6.87 0.00 6.87
3.3 Central control equipment Lot 0 3.96 0.00 3.96
3.4 Dual fuel equipment No 1 1.69 0.00 1.69
3.5 Special Maintenance Tools Lot 2.99 0.00 2.99
3.6 Essential spares Lot 6.89 0.00 6.89
3.7 230 kV U/G Cable for Power Evacuation Lot 1.72 0.00 1.72
3.8 132 kV U/G Cable for Power Evacuation km 3 4.53 0.36 4.89
3.9 Emergency Power Supply Facilities Lot 0.99 0.00 0.99
3.1 Gas pressurereduction & Metering Stations No 2 1.15 1.02 2.17
3.1 Oil Reserve Tank No 1 1.27 0.14 1.41
3.1 Bay Extension 0.49 0.07 0.56
Subtotal 114.67 1.59 116.27

4 Other Materials
4.1 Transnport Vehicles No. 13 0.00 0.28 0.28
4.2 Fuel for Initial Operation 0.00 12.16 12.16
4.3 Electricity During Construction 0.00 0.02 0.02
4.4 11kV Line for Construction 0.00 0.08 0.08
Subtotal 0.00 12.53 12.53

Internal Transportation Cost(% of Total

5 Material Cost) 0.00 2.29 2.29

6 Indirect Costs
6.1 Consulting Services 1.20 0.16 1.36
6.2 Installation 7.75 0.04 7.79
6.3 Project Management Cost 0.00 0.77 0.77
6.4 Training LS 0.59 0.07 0.65
Subtotal 9.54 1.03 10.57

7 Duties and Taxes (% of Total C&F) 35.0 0.00 40.14 40.14

Total Base Cost 124.21 75.75 199.96

8 Contingencies
8.1 Physical Contingency (% of Total Base Cost) 5.0 6.21 3.79 10.00
8.2 Price Contingency 0.00
- Foreign components 2.0 2.48 0.00 2.48
- Local components 6.0 0.00 4.54 4.54
Subtotal 8.69 8.33 17.02

9 Commitment Fee 1.31 0.00 1.31

10 Interest during Construction 10.90 5.51 16.41

Total 145.11 89.59 234.70

 Appendix 4 29

Part B: Transmission System Efficiency Improvements

($ million)

Serial Item Unit Quantity Cost

FC LC Total
1 Pre-construction Cost
1.1 Survey and Soil Test LS 0.04 0.15 0.19
1.2 Environment and Social Study LS 0.00 0.08 0.08
1.3 Land Acquisition acre 16.7 0.00 8.13 8.13
1.4 Land Requisition acre 0 0.00 0.00 0.00
1.5 Land Development 0.00 2.65 2.65
1.6 Resettlement Compensation 0.00 2.72 2.72
Subtotal 0.04 13.72 13.76
2 Civil Works
2.1 Non-residential buildings sq. m. 14,600 0.95 3.76 4.71
2.2 Residential buildings sq. m. 3,645 0.00 0.67 0.67
2.3 Other Civil Works sq. m. 0 0.00 0.00 0.00
Subtotal 0.95 4.43 5.38

3 Transmission Lines
3.1 400kV Meghnaghat-Aminbazar Transmission Line km 50 8.75 0.00 8.75
3.2 230kV Aminbazar-Kallyanpur Overhead Line km 4 0.40 0.00 0.40
3.3 230kV Kallyanpur-Old Airport Undrground Line km 6 5.30 0.00 5.30
3.4 132kV Underground Line (Old Airport-Dhaka km 15 8.65 0.00 8.65
University, Old Airport-Cantonment and Ullon-
Rampura)
3.5 132 kV Overhead Transmission Line (Chuadanga- km 158 9.88 0.00 9.88
Magura, Naogaon-Joypurhat & Thakurgaon-
Panchagar)
Subtotal 32.98 0.00 32.98
4 Substations
4.1 Bay extension at 230/132kV substations at No. 2 2.03 0.00 2.03
Meghnaghat and Aminbazar, and equipment for
control panels
4.2 230/132kV Substation at Old Airport No. 1 15.00 0.00 15.00
4.3 132/33kV GIS substations at Old Airport, No. 3 17.50 0.00 17.50
Cantonment and Dhaka University
4.4 Extension of 230kV Bays at Aminbazar No. 1 1.49 0.00 1.49
230/132kV Substation
4.5 132/33 kV new substations at Chuadanga, No. 4 9.45 0.00 9.45
Magura, Joypurhat and Panchagarh
4.6 132/33kV substation extension at Jhenaidah, No. 3 2.43 0.00 2.43
Naogaon and Thakurgaon
Subtotal 47.90 0.00 47.90
5 Other Materials
5.1 Transnport Vehicles No. 38 0.00 0.39 0.39
5.2 Special maintenance tools & equipment LS 3.11 0.00 3.11
Subtotal 3.11 0.39 3.50

6 Internal Transportation Cost 0.00 2.81 2.81

7 Consulting Services 0.79 0.56 1.35

8 Installation & Commissioning 2.31 14.76 17.07

9 Training 0.18 0.03 0.21

10 Project Management Cost 0.00 1.68 1.68

11 Duties and Taxes (% of Total CIF) 35.0 0.00 29.40 29.40

Total Base Cost 88.26 67.78 156.04

12 Contingencies
12.1 Physical contingency (% of Total Base Cost) 5.0 4.41 3.39 7.80
12.2 Price contingency
- Foreign components (% of Total Base Cost) 2.0 1.77 0.00 1.77
- Local components (% of Total Base Cost) 6.0 0.00 4.07 4.07
Subtotal 6.18 7.46 13.64

9 Commitment Fee 0.68 0.00 0.68

13 Interest during Construction 9.97 6.23 16.20

Total Cost 105.09 81.47 186.56

30 Appendix 4

Part C: Distribution System Efficiency Improvements in DESA Area

($ million)

Serial Item Unit Quantity Cost

FC LC Total

1 Pre-construction Cost
1.1 Survey and Design 0.00 0.00 0.00
1.2 Environment and Social Study 0.00 0.03 0.03
1.3 Resettlement Compensation 0.00 0.00 0.00
1.4 Land Acquisition & Requisition 0.00 1.52 1.52
1.5 Land Development 0.00 0.03 0.03
Subtotal 0.00 1.57 1.57

2 Civil Works
2.1 Non-residential buildings sqm 12,085 0.00 1.70 1.70
2.2 Residential buildings 0.00 0.00 0.00
2.3 Other Civil Works 0.00 0.15 0.15
Subtotal 0.00 1.85 1.85

3 Transmission and Distribution Lines

3.1 132kV Underground Cable km 32.1 3.01 0.00 3.01
3.2 132 Cable Termination & Jointing Materials LS 0.34 0.00 0.34
3.3 132 kV Over Head Line (4 Ckt) km 5 0.47 0.00 0.47
3.4 132 kV Over Head Line (2 Ckt) km 3.75 0.20 0.00 0.20
3.5 33 kV Underground Cable km 152.35 6.60 0.00 6.60
3.6 33 kV Cable Termination & Jointing Materials LS 0.31 0.00 0.31
3.7 11 kV UndergroundCable km 32.7 0.52 0.00 0.52
3.8 11 kV Cable Termination & Jointing Materials LS 0.24 0.00 0.24
Subtotal 11.68 0.00 11.68

4 Substations
4.1 Rehabilitation of 33/11kV Substations No. 10 5.91 0.00 5.91
atSatmasjid, Jhigatola, Dhanmondi, Tejgaon,
Khilgaon, Kazla, Postagola, Fatullah, Demra and
Taltala
4.2 132/33 kV Grid Substations at Lalbag, Madartek No. 3 14.00 0.00 14.00
and Dhanmondi (Conversion)
4.3 33/11 kV New Substations at Sher-e-Bangla No. 5 5.70 0.00 5.70
Nagar, Dhaka University, Mogbazar, Mitford and
IG Gate
4.4 132/33 kV Grid Substations at Mogbazar, No. 3 4.01 0.00 4.01
Maniknagar and Shyampur (Capacity
Augmentation)
4.5 Upgradation of 33/11kV Substation at Shaympur No. 1 0.75 0.00 0.75
Subtotal 30.37 0.00 30.37

6 Other Materials
6.1 Transnport Vehicles No. 12 0.00 0.29 0.29
6.2 Special maintenance tools & equipment Lot 0.00 0.00 0.00
6.3 Miscellaneous Lot 0.00 0.27 0.27
Subtotal 0.00 0.56 0.56

7 Internal Transpoprtation Cost 3.0 0.00 1.26 1.26

8 Consulting Services 0.00 0.07 0.07

9 Installation (20% of Materials Cost) 20.0 0.00 8.41 8.41

10 Project Management Cost 0.00 1.04 1.04

11 Repair and Maintenance 0.00 0.16 0.16

12 Duties and Taxes (% of Total C&F) 35.0 0.00 14.72 14.72

Total Base Cost 42.05 29.64 71.69

13 Contingencies
13.1 Physical contingency (% of Total Base Cost) 5.0 2.10 1.48 3.58
13.2 Price contingency
- Foreign components (% of Total Base Cost) 2.0 0.84 0.00 0.84
- Local components (% of Total Base Cost) 6.0 0.00 1.79 1.79
Subtotal 2.94 3.27 6.21
 Appendix 4 31

Part D: Distribution System Efficiency Improvements in DESCO Area

($ million)
Serial Item Unit Quantity Cost
FC LC Total
1 Pre-construction Cost
1.1 Survey and Design LS 0.00 0.01 0.01
1.2 Environment and Social Study LS 0.00 0.00 0.00
1.3 Resettlement Compensation LS 0.00 0.00 0.00
1.4 Land Acquisition & Requisition LS 0.00 0.43 0.43
1.5 Land Development LS 0.00 0.08 0.08
Subtotal 0.00 0.52 0.52

2 Civil Works
2.1 Nonresidential buildings LS 0.00 0.29 0.29
2.2 Residential buildings LS 0.00 0.26 0.26
2.3 Other Civil Works 0.00 0.21 0.21
Subtotal 0.00 0.76 0.76
3 Distribution Lines
3.1 33 kV Underground Cable (New) km 225 11.13 3.85 14.98
3.2 11 kV Underground Cable (New) km 390 7.41 0.41 7.82
3.3 11 kV Aerial Conductor (New) km 110 5.40 0.43 5.83
3.4 0.4 kV Aerial Conductor (New) km 120 1.56 0.11 1.67
3.5 11 kV Overhead Line (New) km 35 0.29 0.01 0.31
3.6 11/0.4 kV Overhead Line (New) km 250 3.86 0.21 4.07
3.7 0.4 kV Overhead Line (New) km 250 3.23 0.16 3.39
Subtotal 32.88 5.18 38.07
4 Substations
4.1 33/11 kV Substation (New) No. 6 10.73 1.73 12.46
4.2 33/11 kV Substation (Rehabilitation) No. 4 3.42 0.40 3.82
4.3 Substation Spares LS 0.79 0.06 0.85
4.4 11kV switch gear and RMU No. LS 1.60 0.08 1.68
Subtotal 16.54 2.27 18.81
5 Transformers
5.1 11/0.4 kV 3-phase 200 kVA No. 1,250 5.08 0.32 5.40
5.2 11/0.23kV, 25 kVA 300 0.32 0.02 0.34
5.3 11/0.4kV, 1200/1000/750 kVA Package Type 25 0.72 0.04 0.76
5.4 Transformer Protection Equipment LS 1.58 0.08 1.66
Subtotal 7.70 0.46 8.16
6 Meters
6.1 1-Phase Electronic Meter No. 140,000 2.02 0.13 2.15
6.2 3-Phase Electronic Meter (HT) No. 500 4.30 0.22 4.52
6.3 3-Phase Electronic Meter (LT) No. 8,500 4.18 0.28 4.46
6.4 3 Phase Meters Spares (for Feeder metering) No. 200 0.18 0.00 0.18
6.5 Remote Metering on Turnkey Basis LS 0.42 0.02 0.44
Subtotal 11.10 0.65 11.75
7 Other Materials
7.1 Capacitor Banks LS 0.44 0.02 0.46
7.2 Sectionalizing switch LS 3.60 0.18 3.78
Conductors, Insulator & Hardware, Conductor
7.3 Accessories and Insulators LS 9.63 0.51 10.14
7.4 Meter seals No. 1,050,000 0.29 0.01 0.30
7.5 Special maintenance tools & equipment LS 0.72 0.04 0.76
7.6 Vehicles No. 10 0.00 0.16 0.16
Subtotal 14.68 0.92 15.60
8 Internal Transportation Cost(% of CIF Cost) 3.0 0.00 2.19 2.19

9 Consulting Services (% of Total C&F Cost) 0.00 0.05 0.05

10 Installation (% of Total Materials Cost) 20.0 0.00 6.08 6.08

11 Training 0.14 0.07 0.21

12 Other Costs 0.00 3.49 3.49

13 Duties and Taxes (% of Total C&F) 35.0 0.00 29.59 29.59

Total Base Cost 83.04 52.23 135.28
14 14.1 Physical contingency (% of Total Base Cost) 5.0 4.15 2.61 6.76
14.2 Price contingency
- Foreign components (% of Total Base Cost) 2.0 1.66 0.00 1.66
- Local components (% of Total Base Cost) 6.0 0.00 4.23 4.23
Subtotal 5.81 6.84 12.65
15 Commitment Fee 0.48 0.00 0.48
16 Interest during Construction 10.84 5.48 16.32
Total Cost 100.17 64.55 164.73
32 Appendix 4

Part E: Capacity Development

($ million)

Serial Cost
Item FC LC Total

1 Needs Assessment 0.00 0.30 0.30

2 Corporate and Financial Management 0.60 0.50 1.10

3 Information/Communications Technology 0.30 0.30 0.60

4 Technical Expertise Enhancement 0.60 0.60 1.20

5 Long-Term System Planning 1.00 0.50 1.50

6 Good Governance 0.50 0.30 0.80

7 Customer Relations 0.20 0.20 0.40

8 Research & Development 0.20 0.20 0.40

9 Human Resources Development 0.50 0.50 1.00

Total Base Cost 3.90 3.40 7.30

10 Contingency 1.04 0.40 1.44

11 Interest during Implemetation 0.06 0.00 0.06

Total Cost 5.00 3.80 8.80

 IMPLEMENTATION SCHEDULE
Part A: Clean Energy Capacity Expansion
Year 2006 2007 2008 2009
Description Month 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

T CA
Consultant Services

Design, supply, erection, testing and T CA DA C

commissioning of 150 MW power plant
at Sirajganj

Design, supply, erection, testing and T CA DA C

commissioning of 150 MW power plant
at Khulna

Supply, installation, testing and T CA DA C

commissioning of 132kV underground
cable for evacuation of power from
Khulna power station

C = commissioning, CA = contract award, DA = design approval, kV = kilovolt, MW = megawatt

Source: Asian Development Bank staff estimates.

Appendix 5
33
 Table A9.2:Part B: Transmission System Efficiency Improvments

34
Year 2006 2007 2008 2009
Description Month 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Appendix 5
T CA
Consultant Services

Design, supply, erection, testing T CA LA DA C

and commissioning of 400kV TL

Design, supply, erection, testing T CA LA DA C

and commissioning of 230 kV,
O/H and U/G TL

Design, supply, erection, testing T CA DA C

and commissioning of 132kV U/G
TL

Design, supply, erection, testing T CA LA DA C

and commissioning of 132kV
three O/H TL in west zone

Design, supply, erection, testing T LA CA DA C

and commissioning of 230/132kV
GIS SS at Dhaka Old Airport

Design, supply, erection, testing T LA CA C

and commissioning of 132/33kV
GIS SSs in Dhaka

Design, supply, erection, testing T LA CA DA C

and commissioning of 132/33kV
SSs in west zone

Design, supply, erection, testing T CA DA C

and commissioning of bay
extensions in 230/132kV SSs in
Dhaka

Design, supply, erection, testing T CA DA C

and commissioning of bay
extensions in 132/33kV SSs in
west zone

C = commissioning, CA = contract award, DA = design approval, GIS = gas insulated switchgear, kV = kilovolt, LA = completion of land acquisition and compensations, O/H = overhead,
SS = substation, T = tender, TL = transmission line, U/G = underground.
Source: Asian Development Bank staff estimate
35

Table A9.3: Parts C and D: Distribution System Efficiency Improvements in DESA and DESCO Area
Part E: Capacity Development

Year 2006 2007 2008 2009

Description Month 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Part C - Distribution System Efficiency

Improvements in DESA Area

T CA DA C
Supply, installation, testing and commissioning
of 10 nos. 33/11kV upgraded SSs

Supply, installation, testing and commissioning T CA DA C

of Shyampur 33/11kV SS at existing switching
station

Supply and installation of 132/33kV T CA DA C

transformers and associated materials at
Mogbazar, Maniknagar and Shyampur

T CA DA C
Supply, installation, testing and commissioning
of 2 nos. new 132/33kV SSs and conversion of
one 132/33/11kV SS to regular SS

Supply, installation, testing and commissioning T CA DA C

of 5 nos. new 33/11kV SSs

Supply, installation, testing and commissioning T CA DA

of 132 and 33kV U/G cables

Supply, installation, testing and commissioning T CA DA

of 132kV O/H transmission lines

Part D- Distribution System Efficiency

Improvements in DESCO Area

Supply, installation, testing and commissioning T CA DA C

of 33kV U/G cable

Design, supply, installation, testing and T CA DA C

commissioning of 33/11 kV SSs (new and
upgrade)
T CA S I C
Supply of line materials and installtion

Appendix 5
T CA S I C
Supply of meters and installation

Part E - Capacity Development

T CA
Consultant Services

35
C = commissioning, CA = contract award, DA = design approval, I = installation, kV = kilovolt, O/H = overhead, S = supply, SS = substation, T = tender, TL = transmission line, U/G = underground
Source: Asian Development Bank estimate.
36 Appendix 6

DETAILED COST - DURING IMPLEMENTATION

During Appraisal Actual (to date) Actual (on project completion)

Foreign Local Foreign Local Foreign Local
Exchange Currency Total Exchange Currency Total Exchange Currency Total

Component

Part A 124.2 75.8 200.0

Part B 88.3 67.8 156.0
Part C 42.1 29.6 71.7
Part D 83.0 52.2 135.3
Part E 4.4 3.4 7.8
Base Cost Total 342.0 228.9 570.8

Contingencies 24.2 26.3 50.5

IDC and Commitment Charge 38.9 19.7 58.6

Total Project Cost 405.0 274.9 679.9

DETAILED FINANCING PLAN - DURING IMPLEMENTATION

During Appraisal Actual (to date) Actual (on project completion)

Foreign Local Foreign Local Foreign Local
Exchange Currency Total % Exchange Currency Total % Exchange Currency Total %

Source

ADB (OCR_ 400.0 - 400.0 58.8

ADB (ADF) 5.0 - 5.0 0.7
Government Long -
Term Loans - 108.6 108.6 16.0
Government Equity
Injections/EA Internal
Resources - 162.5 162.5 23.9
Government Budget
Support to MPEMR - 3.8 3.8 0.6
Total 405.0 274.9 679.9 100.0
Appendix 7 37
38 Appendix 8
Recruiting Consulting Firms for Loan Projects Using QCBS
CONSULTANT
Reviews ADBBO or
advertisement and sends
expression of interest
PREPARATION
Receives RFP and
prepares technical
& financial proposals
Submits technical
and
financial proposals
Receives
SELECTION
EA's advice
Arranges to attend
opening or nominates
a representative
(attendance is optional)
Sends representative to
contract negotiations
CONTRACTING
Receives
signed contract
Unsuccessful consultants
receive advice and unopened
financial proposals
Selected consultant
starts work
EXECUTING AGENCY ADB
Advertises project in Concerned division lists
newspapers, etc. project in ADBBO
Discusses Terms of Reference Appraisal mission discusses
terms of reference Developed terms of reference
Receives expressions Concerned division provides
of interest list of firms from DACON
Prepares long list
of consultants
CSC prepares shortlist, SUBMISSION 1 CSC reviews and
RFP, and evaluation criteria, approves
and submits to ADB
Sends RFP to Concerned division sends
shortlisted comments/approval to EA
consultants
Receives proposals, stores
unopened financial
proposals
CSC members
evaluate technical proposals
CSC meeting ranks SUBMISSION 2 CSC reviews and
technical proposals, prepares approves
evaluation report, and
submits to ADB
Advises consultants whose Concerned division sends
proposals did not meet comments/approval
minimum technical requirement to EA
Advises technically qualified
consultants of time,date, Receives copy
and place for opening of notification
financial proposals
Publicly opens
financial proposals
Evaluates
financial proposals
CSC ranks proposals, prepares Concerned division reviews
ranking report, and SUBMISSION 3 and approves. (CSC held
submits to ADB if concerned division
requests one)
Invites first-ranked consultant Sends approval
to contract negotiations to EA
Negotiates contract, submits Concerned division
to ADB minutes of negotiations SUBMISSION 4 reviews and
and draft contract approves
Sends approval
Finalizes contract and sends to EA
copies to consultant and ADB SUBMISSION 5
Receives
signed contract
Advises unsuccessful consultants,
returns unopened financial
proposals, issues notice to
proceed to selected consultant
 Appendix 9 39

OUTLINE TERMS OF REFERENCE FOR CONSULTING SERVICES

A. Project Implementation Support for Part A

1. Scope of Work

1. Under Part A of the project loan, the Bangladesh Power Development Board (BPDB)
and its succeeding company provisionally called Northwest Power Generation Company Limited
(NWPGC) will construct two units of 150 megawatt (MW) simple cycle gas turbine peaking
power plants, one unit each in Sirajganj and Khulna.

2. BPDB/NWPGC intends to procure the plants on a turnkey basis, with the supplier to be
responsible for the design, supply, delivery, erection, testing, and commissioning of the plants.
The role of the consultant in this process will be to assist BPDB/NWPGC in assuring that all
steps are undertaken properly, so that the finished plants will deliver the performance, reliability,
and operational flexibility specified. The assistance covers preparing technical specifications
and bidding documents; support of the tendering process and bid evaluation; oversight of
construction from the owner’s perspective; and oversight of the testing and commissioning of
the power plant from the owner’s perspective; and handing over the plants including issuance of
provisional acceptance certificates and final acceptance certificates.

2. Terms of Reference

a. Preparation of Technical Specifications and Bidding Documents

3. The consultant will prepare a conceptual design of both Sirajganj and Khulna peaking
power plants and preparation of bidding documents. The consulting services will include, but not
be limited to the following:

(i) Determine the detailed scope of work for Sirajganj and Khulna peaking power
plant;
(ii) Prepare a detailed layout dividing the total site into main salient sub-areas, viz.
plant area, residential area, common service area etc. along with approach and
internal roads, jetty, etc.;
(iii) Survey the gas line route and the transmission line route to determine the point
of tapping for gas supply and to make a power evacuation plan;
(iv) Establish design criteria for (i) foundation and civil design, (ii) performance
specification for electrical and mechanical systems, and (iii) environmental
requirements;
(v) Prepare technical specifications and performance specifications for the power
plant, major equipment, auxiliaries, transmission lines, and gas pipe lines; and
(vi) Prepare bidding documents for each power plant as per approved engineering
reports, technical specifications, performance specifications, schedules, and
drawings for bidding of the power plant on a turn-key basis.

b. Support in the Bidding Process

4. The consultant will review BPDB/NWPGC’s approach and schedule for the bidding
process and provide comments and recommendations on the approach, activities, schedule,
organization, and responsibilities. The consultant will assist BPDB through the bidding process
including the following activities.
40 Appendix 9

(i) Assist BPDB/NWPDC in clarifying queries from prospective bidders during the
bidding period;
(ii) Carry out technical and financial evaluation of bids received and submit bid
evaluation reports to BPDB/NWPDC; and
(iii) Assist BPDB/NWPDC in contract negotiations and finalize the contract
documents.

c. Construction Supervision

5. The main turnkey contracts would cover construction of most of the power plant facilities.
The consultant will provide oversight of all aspects of the construction in order to assure that it is
conducted properly. This includes assisting in developing and implementing a quality
assurance program for construction, review and approval of design, monitoring schedule,
inspection of materials upon arrival and upon erection, review of documents to assure quality of
delivered goods, comparison of as-built drawings to design, and addressing shortcomings in
any of these areas.

d. Testing and Commissioning

6. Nearly all of the main components of the facility will be subject to an acceptance test to
demonstrate their capability to meet warranted design criteria. For each component subject to
test, the consultant will review the contractor’s test procedures for compliance with
manufacturers’ requirements and design criteria. The consultant will witness the tests and
review the test results. If test results are not satisfactory, the consultant will require that the
problem causing failure is addressed and that the equipment be re-tested.

7. When the power plant is to generate power, BPDB/NWPGC will initiate operational
activities. The contractor will provide training on the operation of the power plant and all its
systems. The consultant will assist BPDB/NWPGC in this phase of the project and coordinate
with the contractors in addressing any issues with the facilities that affect operation adversely.
At the end of this period, and when all acceptance tests have been completed to the
consultant’s satisfaction, the consultant will advise BPDB/NWPGC that the construction is
complete and the facility is ready to be declared fully operational.

8. The consultant will also prepare and recommend a provisional taking over certificate
whenever due for the works of the contractor and alert BPDB/NWPGC of work deficiencies, if
any. The consultant will also confirm the remedial measures taken by the contractor, and
recommend a final taking over certificate after expiry of the warrantee period.

3. Estimated Person-Months

9. It is expected that about 34 person-months of international consulting services will be

needed from a firm specializing in construction supervision from technical specification through
commissioning, with consultants expert in mechanical and electrical equipment, civil structures,
environmental, and commissioning. The consultant will be supported by about 72 person-
months of national consulting services with expertise in similar areas. Table 1 shows the
indicative positions and their person-months.
 Appendix 9 41

Table 1: Indicative Positions and Person-Months

Particular International Consultants National Consultants
Team Leader/Mechanical Engineer 14 PM 30 PM
Electrical Engineer 12 PM 24 PM
Instrument Engineer 3 PM 6 PM
Civil Engineer 2 PM 8 PM
Environmental Engineer 1 PM 2 PM
Commissioning Engineer 2 PM 2 PM
Total 34 PM 72 PM
PM = person-months.

4. Cost Estimates

10. The cost estimates and financing plan are given in Table 2.

Table 2: Cost Estimates and Financing Plan

($’000)
Item Total
Cost
A Asian Development Bank Financing
1. Consultants
a. Remuneration and Per Diem
i. International Consultants 680.0
ii. National Consultants 288.0
b. International and Local Travel 60.0
c. Reports and Communications 30.0
2. Contingencies 142.0
Subtotal (A) 1,200.0

B Executing Agency Financing

1. Office Accommodation and Transport 140.0
2. Contingencies 20.0
Subtotal (B) 160.0
Total 1,360.0

B. Project Implementation Support for Part B

1. Scope of Work

11. The Power Grid Company of Bangladesh Limited (PGCB) will implement Part B of the
project loan, and intends to recruit consultants who will assist PGCB in preparing technical
specifications and bidding documents; bidding and bid evaluation process; oversight of
construction, testing and commissioning of (i) Part B-1: a new 400 kV overhead transmission
line from Meghnaghat to Aminbazar including bay extensions; (ii) Part B-2: augmentation of 230
kV transmission line in Aminbazar – Old Dhaka Airport and new gas-insulated substations (GIS)
including bay extensions.

12. PGCB intends to undertake each project on a turnkey basis, with the supplier to be
responsible for the design, supply, delivery, erection, testing, and commissioning of the man
facilities. The role of the consultant in this process will be to assist PGCB in assuring that all
42 Appendix 9

steps are undertaken properly, so that the finished facilities will deliver the performance,
reliability, and operational flexibility specified.

2. Terms of Reference

13. The consultant will act as the technical advisor to assist PGCB in the implementation of
the above projects and the terms of reference include:

(i) Prepare the bidding documents including technical specifications, price

schedules, etc.;
(ii) Assist PGCB to clarify queries from prospective bidders during the bidding
period;
(iii) Assist PGCB in evaluation of the bids received and prepare recommendations for
approval;
(iv) Check the contractor’s technical design submissions and drawings and submit
comments and recommendations to PGCB for approval of various design aspects:
(v) Supervise foundation casting, tower erection and stringing of transmission lines;
(vi) Supervise all civil works in substations, erection/installation of substation
equipment;
(vii) Supervise testing and commissioning of all substation equipment including
control, protection and metering;
(viii) Supervise the final testing of power line carrier (PLC) and fiber optic multiplexer
equipment;
(ix) Prepare and submit the following reports (a) reports on supervision works and
quality assurance of the casting of foundations, erection of towers and stringing of
conductors for the line portion, and (b) reports on supervision works and quality
assurance associated with substation civil works, erection of substation equipment,
substation control and protection, and PLC and fiber optic multiplexer equipment;
(x) Check and certify as-built drawings;
(xi) Check and certify operation and maintenance manuals; and
(xii) Provide a site short training program for two weeks on line design, tower design,
substation design, protection and control design, and prepare tender specifications for
transmission lines and substations, PLC and fiber optic communication as protection
signaling system.

3. Estimated Person-Months

14. It is expected that about 38 person-months of international consulting services will be

needed from a firm specializing in construction supervision from technical specification through
commissioning, with consultants expert in design, construction, testing and commissioning of
high voltage transmission lines and substations. The consultant will be supported by about 60
person-months of national consulting services with expertise in similar areas. Table 3 shows the
indicative positions and their person-months.
 Appendix 9 43

Table 3: Indicative Positions and Person-Months

Particular International Consultants National Consultants
Team Leader/Electrical Engineer 20 PM 30 PM
Civil Engineer 10 PM 14 PM
Mechanical Engineer 5 PM 10 PM
Environmental Engineer 1 PM 2 PM
Commissioning Engineer 2 PM 4 PM
Total 38 PM 60 PM
PM = person-months.

4. Cost Estimates

15. The cost estimates and financing plan are given in Table 4.

Table 4: Cost Estimates and Financing Plan

($’000)
Item Total
Cost
A Asian Development Bank Financing
1. Consultants
a. Remuneration and Per Diem
i. International Consultants 684.0
b. International and Local Travel 20.0
c. Reports and Communications 10.0
2. Contingencies 86.0
Subtotal (A) 800.0

B Executing Agency Financing

1. Consultants
a. Remuneration and Per Diem
i. Domestic Consultants 300.0
2. Office Accommodation and Transport 200.0
2. Contingencies 50.0
Subtotal (B) 550.0
Total 1,350.0

C. Capacity Development under Part E

1. Scope of Work

16. The Government of Bangladesh, through the Power Division of the Ministry of Power,
Energy and Mineral Resources (MPEMR), intends to develop and implement a capacity
development program (CDP) for the power sector, aiming to enhance the institutional resources
of the power sector entities to improve their operational performance. In formulating the CDP, a
cost effective approval will be undertaken by (i) full utilization of existing facilities and training
program, and (ii) harmonization of various technical assistance and support being offered by
other development partners. The CDP will draw on a combination of human resource training
programs, institutional/organizational set-up, and computer systems with reasonably priced
hardware and software.
44 Appendix 9

17. Keeping these objectives and guiding principles in view, the CDP will begin with an in-
depth sector-wide needs assessment to analyze the gap between the current institutional
capacity of the power sector entities, and international benchmarks and standards for power
utilities. The needs assessment will identify priorities of the CDP with specific scope and time
schedules to be determined by the Government in consultation with the relevant power sector
entities and other stakeholders. Institutional arrangements for implementing the CDP will also
be examined.

2. Terms of Reference

18. Subject to refinement based on the needs assessments, the indicative terms of
reference for the consultants will include the following:

a. Corporate and Financial Management

(i) Examine the current general corporate management system of power sector
entities with respect to planning, administrative, and accounting services;
(ii) Examine the current organizational structure, staffing, and information flows for
corporate management and finance;
(iii) Recommend improved corporate management systems including effective
delineation of job responsibilities and authority levels;
(iv) Recommend measures for more effective interactive communications among
different offices, and an efficient decision making process;
(v) Analyze the relevancy of the current financial management practice in (a)
accounting and internal control systems to monitor expenditures and other financial
transactions and safe custody of project-financed assets; (b) financial management
disciplines; (c) accounting and internal control systems; (d) use of information
technology; and (e) effectiveness of external auditors.
(vi) Recommend appropriate human resource management changes to support
improved corporate management, including open recruitment of senior technical and
managerial staff, merit-based compensation and promotions, and incentive measures for
fostering work motivation among the employees;
(vii) Recommend measures for disaster management of natural calamities including
flood, earthquake, tsunami, etc.; and
(viii) Suggest necessary logistic and equipment mobilization for modernization of
corporate management.

b. Information and Communications Technology

(i) Examine the existing management information system (MIS), IT system

architecture, information and decision making process and work flows, and proposals for
MIS support form other donors (e.g., World Bank);
(ii) Examine the existing mechanism for sharing operational, financial, budgetary
information within PSEs and identify bottlenecks, redundancies and inconsistencies;
(iii) Suggest ways and means to enhance the existing information and decision
making flows and information sharing mechanism among relevant corporate sections
and between PSEs;
(iv) Evaluate other ICT needs to support system operations, e.g., advanced meters
and pre-paid metering; and
 Appendix 9 45

(v) Using off-the-shelf technologies to the maximum extent possible, design the
structure and contents of short-term, high-priority ICT upgrades that complement other
MIS investments.

c. Technical Expertise

(i) Examine the required technical expertise for engineers and field staff of PSEs,
including women and other vulnerable groups to fulfill satisfactorily efficient operations in
terms of knowledge and skill;
(ii) Examine the existing training programs, facilities, and equipment, and identify the
gaps, including needs assessment (same as above) for procurement of new simulators
for power plant/dispatching operations;
(iii) Analyze financial viability of a potential business for conducting technical training
programs on a commercial basis;
(iv) Conduct cost and benefit analysis for introducing skill level grading/certification
mechanism; and
(v) Conceptualize technical expertise enhancement program;

d. Long-term System Planning and Preparation of Future Projects

(i) Conduct a power market survey, review previous load forecasts and propose
maximum and minimum load growth scenarios;
(ii) Review existing power system data, update as necessary and conduct
simulation studies using relevant software;
(iii) Develop generation, transmission, and distribution capacity expansion plans
based on the results of simulation studies;
(iv) Prepare the power system master plan update report and consult with relevant
stakeholders;
(v) Prepare future investment projects for generation, transmission, and distribution
systems based on the updated power system master plan; and
(vi) Prepare an environmental assessment of the Power System Master Plan update.

e. Good Governance

(i) Examine the existing procurement system in terms of bidding arrangement,

inspection provision, and IT usage.
(ii) Examine the applicability of E-procurement system to PSEs; and
(iii) Review various international best practices on good governance and recommend
suitable measures for the Bangladesh power sector.

f. Customer Relations

(i) Examine the existing customer management systems and procedures for load
approval, extension, inspection, metering, billing, penalization, disconnection, sales
contract, and so forth, and suggest measures to ensure increased efficiency;
(ii) Suggest ways and means to be included as built-in mechanisms in the sales
contracts to safeguard customers’ rights and the companies’ system integrity;
(iii) Recommend measures for building customer awareness on demand side
management as a scarce and valuable natural resource and loss of public revenue;
(iv) Conduct regular surveys on the quality of project services;
46 Appendix 9

(v) Recommend effective internal audits in the respective companies for indexing the
efficiency level of customer management offices; and
(vi) Suggest necessary planning and logistic schedule for improvement of customer
services.

g. Research and Development

(i) Examine the current institutional setup of research and development;

(ii) Examine the opportunity to get assistance from non-profit international
institutions;
(iii) Identify the needs for pilot testing of new programs using the advanced
technology system in the fields of renewable energy development, energy efficiency
enhancement and environmental protection; and
(iv) Recommend measures for improving the organizational setup for research and
development.

h. Human Resource Development

(i) Assess the medium and long-term needs for career building of company
employees with a view to raising their level of competence and general skill of adapting
to changing technological and environmental challenges;
(ii) Assess the current level of the companies’ manpower in relation to upcoming
activities and suggest staffing needs for recruitment;
(iii) Assess the prospects for upgrading current training facilities owned by PSEs,
including physical rehabilitation and acquisition of basic ICT systems for training
programs;
(iv) Suggest basic training outlines for different levels of new recruits, including
women and other vulnerable groups, as well as working employees including exposure
to multidisciplinary skills and knowledge;
(v) Outline a systematic domestic and international training program including
continuous on-the-job skills development; and
(vi) Assess logistic and equipment support for human resource development.
 Appendix 10 47

Consultant Recruitment Activity Monitoring (CRAM)

A. Loan No. and Title Loan 2332-BAN: Sustainable Power Sector Development Project Last edited by:
B. Contract Budget (US$) $1.36M
C. Selection Method QCBS on
D. Type of Technical Proposal Simplified
E. Executing Agency (EA) Bangladesh Power Development Board
F. EA Contact Person
G. Loan Supervision Division of RM
H. ADB Project Officer Initials: Project Assistant:
I. ADB COCS Officer Initials:
J. Actual Date of Short-Listing (SL) by EA

NORM Planned Actual Deviation

Responsible
Activity Cal. Cal. Achived Cum. Cum. Explanation and Action
Staff Dates Days Days
Days Days Date Days Days
1 2 3 4 5 6 7 8 9 10 11

1 EA submitting shortlist to ADB 10

2 ADB CSC-SL meeting 7
3 Signing of the CSC-SL minutes 5
4 ADB sending approval of the shortlist to EA 2
5 EA issuing RFP 7
6 Proposal submission 45
7 EA CSC-EV meeting 21
8 EA submitting technical evaluation report to ADB 10
9 ADB CSC-EV meeting 7
10 Signing of CSC-EV meeting 5
11 ADB sending approval of technical evaluation to EA 2
12 EA issuing invitation for public opening 7
13 Public opening 14
14 EA signing of overall ranking minutes and submitting to ADB 21
15 ADB-CSC-OR meeting 7
16 Signing of CSC-OR minutes 5
17 ADB sending approval of overall ranking to EA 2
18 EA issuing invitation for contract negotiations 3
19 Commencement of contract negotiations 14
20 Completion of contract negotiations 14
21 EA submitting negotiated contract to ADB 21
22 ADB approval of the negotiated contract 5
23 EA signing of the contract 14
24 Consultant mobilization 14
Total number of days 262
Footnotes:
a. Activity NORMS [column 3] are based on calendar days
b. The base date for planning and monitoring is the date of Short-Listing by EA
c. PLANNED dates, days and cumulative days [columns 5 and 6 respectively] are derived from the NORMS and are computed as calendar days
d. ACTUAL achieved dates [column 7] are input by the responsible project officer from the concerned User Division
e. DEVIATIONS are computed in calendar days and cumulative calendar days [columns 10 and 11]

Guide for completing CRAM sheet:

a. Row A-J and column 2-6 are completed by ADB
b. Columns 7and 8 are completed by the EA
c. Columns 8-11 are automatically generated by ADB's CRAM System based on Column 7 inputs
48 Appendix 10
USING CRAM FOR LOAN PROJECTS
COSO
Develops a standard CRAM
template
Receives a CRAM frame for
logging in the system.
Checks planned activity on
daily basis and sends
remi nder to the user division
for action if planned activity i s
not achieved on schedule.
Distributes CRAM frames on
a monthly basis to Directors
of user divisions.
When the recruitment
process is com pleted, stores
com pleted CRAM frames in
database.
Evaluates CRAM frames
annually and if requred,
proposes r ecomm endation for
streamlining recrui tm ent
process.
USER DIVISION
Creates a CRAM frame by
i nputting loan data
During fact-finding/appraisal m ission, ADB proejct officer discusses with the
EA the consultant recuitment schedule based on CRAM targets.
Inputs scheduled shortlis ting date
in the system to generate
recuitment schedule.
Sends the CRAM frame with
recruitment schedule to EA.
Inputs actual date of each
acti vi ty. Takes appropriate
action where actual date
exceeds planned date.
Inputs explanation/reason and
action taken.
Receives Monthly CRAM
frames and forward copies to
the EA. Takes acti on when
needed.
W hen the recruitment
process is compl eted, makes
a hard copy of CRAM frame
and places it in the proj ect file
and sends a copy to EA.
Executing Agency
Receives the CRAM frame
Receives the CRAM fram e with
recruitment schedule for
confirmation at CSC-SL.
Sends the confi rmed CRAM
fr ame to ADB together with
shorlitst and RFP documents.
Assigns a staff to be
responsible for monitoring
recruiment process, if not
already done.
Assigned staff reports to ADB
the actual date of each activity
under EA's supervision and
explains any delays.
Receives Monthly CRAM
frames and takes action when
needed.
Receives a completed CRAM
fram e and inserts it into the
project file.
 Appendix 11 49

PROCUREMENT PLAN

Project Information: Construction of two 150 MW simple cycle gas turbine power plants;
construction of 400 kV, 230 kV, and 132 kV transmission lines and
associated substations; distribution upgrading, installing energy meters,
and capacitors, etc.
Country: Bangladesh
Borrower: People’s Republic of Bangladesh
Project: Sustainable Power Sector Development Project
Loan Reference: Project Number: 36107
Effectiveness: Target: July 2007
Amount: $400 million
Committed: $400 million
Executing Agencies Part A: Bangladesh Power Development Board and
its successor Northwest Power Generation
Company Ltd.
Part B: Power Grid Company of Bangladesh Ltd.
Part C: Dhaka Power Distribution Company Ltd.
Part D: Dhaka Electric Supply Company Ltd.
Part E: Ministry of Power, Energy and Mineral
Resources
Approval of Original Procurement Plan: not applicable
Approval of Most Recent
Procurement Plan: not applicable
Period Covered by this Plan: July 2006–June 2010

Threshold: Goods and Related Services, Works, Supply and Installation

Procurement Method Threshold

International Competitive Bidding (ICB) Works: $1,000,000 and above

ICB Goods/ Supply and Installation: $500,000 and above
National Competitive Bidding (NCB) Works: Below $1,000,000
NCB Goods/ Supply and Installation: Below $500,000

Procurement Threshold: Consulting Services

Procurement Method Threshold

Quality- and Cost-Based Selection (QCBS): All contracts
50 Appendix 11

Tentative Contract Package List

($ million)

Mode of
Procurement/
Contract No. Item Description Contract Type Method of Estimated
Consultant Contract
Selection Value

Part A: Clean Energy Capacity Expansion

1 Design, supply, erection, testing, and commissioning of Turnkey ICB 67.00

peaking power plant (1x150 MW GT) and associated
facilities at Sirajganj

2 Design, supply, erection, testing, and commissioning of Turnkey ICB 73.00

peaking power plant (1x150 MW GT) and associated
facilities at Khulna

3 132 kV double circuit underground cable supply, laying, Turnkey ICB 4.50
testing, and commissioning

4 Consultant Services QCBS 1.36

Total (Part A) 145.86

Part B: Transmission System Efficiency Improvements

1 Design, supply, erection, testing and commissioning of Turnkey ICB 10.00

Meghnaghat-Aminbazar 400 kV transmission line

2 Design, supply, erection, testing, and commissioning of Turnkey ICB 7.00

Aminbazar-Old Airport 230 kV O/H and U/G transmission
line

3 Design, supply, erection, testing and commissioning of Old Turnkey ICB 10.00
Airport-Cantonment, Old Airport-University and Rampura-
Ullon 132 kV U/G transmission line

4 Design, supply, erection, testing, and commissioning of Turnkey ICB 11.00

Magura-Chuadanga, Naogaon-Joypurhat and Thakurgaon-
Panchagar 132 kV O/H transmission line

5 Design, supply, erection, testing and commissioning of 230 Turnkey ICB 5.00
and 132kV bay extensions in Meghnaghat and Aminbazar
substations

6 Design, supply, erection, testing, and commissioning of Turnkey ICB 17.00

230/132 kV GIS substation at Dhaka Old Airport

7 Design, supply, erection, testing, and commissioning of Turnkey ICB 19.00

three 132/33 kV GIS substations in Dhaka

8 Design, supply, erection, testing, and commissioning of two Turnkey ICB 7.25
new 132/33 kV substations and bay extension in two existing
substations in Northwest Zone

9 Design, supply, erection, testing, and commissioning of two Turnkey ICB 6.25
new 132/33 kV substations and bay extension in one
existing substation in Southwest Zone

10 Special maintenance tools and equipment Supply ICB 3.20

11 Consultant Services QCBS 1.35

Total (Part B) 97.05

 Appendix 11 51

Mode of
Procurement/
Contract No. Item Description Contract Type Method of Estimated
Consultant Contract
Selection Value

Part C: Distribution System Efficiency Improvements in DESA Area

1 Design, supply, installation, testing, and commissioning of Turnkey ICB 7.00

10 nos. 33/11 kV upgraded substations

2 Design, supply, installation, testing, and commissioning of Turnkey ICB 1.00

Shyampur 33/11 kV SS at existing switching station

3 Design, supply and installation of 132/33 kV transformers Turnkey ICB 5.00

and associated materials at Mogbazar, Maniknagar and
Shyampur 132/33 kV SS

4 Design, supply, installation, testing, and commissioning of 2 Turnkey ICB 16.00

nos. new 132/33 kV SSs and conversion of one 132/33/11
kV SS to regular SS

5 Design, supply, installation, testing, and commissioning of 5 Turnkey ICB 7.00

nos. new 33/11 kV SSs

6 Supply, installation, testing, and commissioning of 132 and Turnkey ICB 12.00
33 kV U/G cables

7 Design, supply, installation, testing, and commissioning of Turnkey ICB 1.00

132 kV O/H transmission lines

Total (Part C) 49.00

Part D: Distribution System Efficiency Improvements in DESCO Area

1 Supply, Installation, testing, and commissioning of 33 kV Turnkey ICB 15.00

U/G cables

2 Design, supply, installation, testing, and commissioning of Turnkey ICB 18.00

33/11 kV substations (new and upgrade)

3 Supply of cables, conductors, and accessories (Lot A: 11 kV Supply ICB 21.00

U/G cables, lot B: 11 and 0.4 kV aerial conductors, lot C: 11
kV and LV poles, pole fittings and line hardware)

4 Supply of transformers, transformer protection equipment, Supply ICB 10.00

switchgear and RMUs (lot A: 11/0.415 kV, 3-phase
distribution transformers, lot - B: 11/0.23 kV, 1-phase
distribution transformer, lot C: 11/0.415 kV packaged
substation, lot D: Transformer protection equipment and lot
E: 11 kV switchgear and RMU's)

5 Supply of meters (lot A: 1-phase meters, lot B: 3-phase HT Supply ICB 11.50
meters, lot C: 3-phase LT meters, lot D: remote metering
units)

6 Supply of conductors and miscellaneous materials (lot A: Supply ICB 15.00

Conductor and transformer loops, lot B: meter seals, lot C:
sectionalizing switch, lot D: conductor accessories, lot E:
insulators and insulator accessories, lot F: special
maintenance tools and equipment, and lot G: capacitor
banks)

Total (Part D) 90.50

Part E: Capacity Development

1 Consultant Services QCBS 6.00

Total (Part E) 6.00

GIS = gas-insulated substation, GT = gas turbine, HT = high tension, kV = kilovolt, LT = low tension, LV = low voltage, MW = megawatt,
O/H = overhead, RMU = ring main unit, SS =substation, U/G = underground.
Sources: Executing Agencies and Asian Development Bank.
52 Appendix 12

LIST OF INELIGIBLE ITEMS

1. The proceeds of the loan will be utilized to finance the foreign currency expenditures for
the reasonable costs of imported goods required during implementation of the Program.

2. Notwithstanding the provision of para. 1 above, no withdrawals shall be made for:

(i) expenditures for goods included in the following groups or subgroups of the
United Nations Standard International Trade Classification, Revision 3 (SITC, Rev. 3) or
any successor groups or subgroups under future revisions to the SITC, as designated by
the Asian Development Bank (ADB) by notice to the Borrower;

Ineligible Items

Chapter Heading Description of Items

112 Alcoholic beverages
121 Tobacco, unmanufactured; tobacco refuse
122 Tobacco, manufactured (whether or not containing tobacco
substitute)
525 Radioactive and associated materials
667 Pearls, precious and semi-precious stones, unworked or worked
718 718.7 Nuclear reactors and parts thereof, fuel elements (cartridges),
nonirradiated for nuclear reactors
897 897.3 Jewelry of gold, silver or platinum group metals (except watches
and watch cases); goldsmiths’ or silversmiths’ wares (including
set gems)
971 Gold, nonmonetary (excluding gold ore and concentrates)
Source: Asian Development Bank.

(ii) expenditures in the currency of the Borrower or of goods supplied from the
territory of the Borrower;
(iii) payments made for expenditures incurred more than 180 days before the
effectiveness date of the loan;
(iv) expenditures for goods supplied under a contract that any national or
international financing institution or agency will have financed or has agreed to finance,
including any contract financed under any loans from ADB;
(v) expenditures for goods intended for a military or para-military purposes or for
luxury consumption;
(vi) expenditures for narcotics; and
(vii) expenditures for pesticides categorized as extremely hazardous or highly
hazardous in class 1a and class 1b, respectively, Classification of Pesticides by Hazard
and Guidelines to Classification.
 Appendix 13 53

I. PRO FORMA OF THE EXECUTING AGENCY’S PROJECT PROGRESS

REPORT

A. Introduction and Basic Data

Provide the following:

ADB loan number, project title, borrower, executing agency(ies), implementing

agency(ies);
total estimated project cost and financing plan;
status of project financing including availability of counterpart funds and
cofinancing;
dates of approval, signing, and effectiveness of ADB loan;
original and revised (if applicable) ADB loan closing date and elapsed loan period
based on original and revised (if applicable) loan closing dates; and
date of last ADB review mission.

B. Utilization of Funds (ADB Loan, Cofinancing, and Counterpart Funds)

Provide the following:

cumulative contract awards financed by the ADB loan, cofinancing, and

counterpart funds (commitment of funds to date), and comparison with time-bound
projections (targets);
cumulative disbursements from the ADB loan, cofinancing, and counterpart funds
(expenditure to date), and comparison with time-bound projections (targets); and
reestimated costs to completion, need for reallocation within ADB loan
categories, and whether an overall project cost overrun is likely.

C. Project Purpose

Provide the following:

status of project scope/implementation arrangements compared with those in the

report and recommendation of the President (RRP), and whether major changes have
occurred or will need to be made;
an assessment of the likelihood that the immediate development objectives
(project purpose) will be met in part or in full, and whether remedial measures are
required based on the current project scope and implementation arrangements;
an assessment of changes to the key assumptions and risks that affect
attainment of the development objectives; and
other project developments, including monitoring and reporting on environmental
and social requirements that might adversely affect the project's viability or
accomplishment of immediate objectives.
54 Appendix 13

D. Implementation Progress

Provide the following:

assessment of project implementation arrangements such as establishment,
staffing, and funding of the PMO or PIU;
information relating to other aspects of the EA’s internal operations that may
impact on the implementation arrangements or project progress;
progress or achievements in implementation since the last progress report;
assessment of the progress of each project component, such as,
- recruitment of consultants and their performance;
- procurement of goods and works (from preparation of detailed designs
and bidding documents to contract awards); and
- the performance of suppliers, manufacturers, and contractors for goods
and works contracts;

assessment of progress in implementing the overall project to date in comparison

with the original implementation schedule—quantifiable and monitorable target, (include
simple charts such as bar or milestone to illustrate progress, a chart showing actual
versus planned expenditure, S-curve graph showing the relationship between physical
and financial performance, and actual progress in comparison with the original
schedules and budgets, the reference framework or guidelines in calculating the project
progress including examples are shown in Appendix 2); and

an assessment of the validity of key assumptions and risks in achieving the

quantifiable implementation targets.

E. Compliance with Covenants

Provide the following:

the borrower's compliance with policy loan covenants such as sector reform
initiatives and EA reforms, and the reasons for any noncompliance or delay in
compliance;
the borrower’s and EA’s compliance with financial loan covenants including the
EA’s financial management, and the provision of audited project accounts or audited
agency financial statements; and
the borrower’s and EA’s compliance with project-specific loan covenants
associated with implementation, environment, and social dimensions.

F. Major Project Issues and Problems

Summarize the major problems and issues affecting or likely to affect implementation
progress, compliance with covenants, and achievement of immediate development objectives.
Recommend actions to overcome these problems and issues (e.g., changes in scope, changes
in implementation arrangements, and reallocation of loan proceeds).
 Appendix 13 55

Framework and Guidelines in Calculating Project Progress

A. Introduction

1. To ensure that all implementation activities are reflected in measuring

implementation progress against the project implementation schedule, the term “physical
completion” in the PPR has been changed to “project progress.”

2. Physical and pre-commencement activities are considered in calculating project

implementation progress. These activities, which may include recruitment of consultants,
capacity building, detailed design, preparation of bid and prequalification documents,
etc., could constitute a significant proportion of overall implementation and therefore
should be counted.

3. Each activity in the implementation schedule will be weighted according to its

overall contribution (using time as a reference) to progress of project implementation.
These weights will then be used to calculate the percentage of project progress along
the entire time span of the project. This is to provide a holistic view of the pace of
implementation.

B. Framework for Compiling Activity List and Assigning Weights

4. As implementation activities and their corresponding weights will vary according

to the type of project, sector, and country, sector divisions or RMs will be responsible for
determining and including them in the project administration memorandum. The actual
project implementation progress of these activities should be reported regularly through
the EA’s quarterly project progress report. To ensure ADB-wide consistency, the
following framework has been established; its application will be monitored through the
PPR.

1. Compilation of Activity List

5. Sector divisions or RMs concerned should identify major implementation

activities and include them in the implementation schedule, which is attached as an
appendix in the report and recommendation of the President (RRP). The implementation
schedule should follow the critical path of the project’s major activities in project
implementation taking account of various country, sector, and project constraints.

2. Assignment of Weights

6. Corresponding weights for each activity should be assigned to ensure that

“project progress” measures the percentage of achievement (nonfinancial except when
the project has credit components) for all events during the entire duration of the
implementation schedule. To avoid disproportionate assignment of weights, to the extent
possible these should be evenly distributed along the implementation schedule. When
activities are concurrent, avoid “double counting.”

3. Computation of Project Progress

7. Once all activities are identified and corresponding weights assigned, project
progress should be calculated using the following steps:
56 Appendix 13

(i) Determine the actual percentage progress (nonfinancial) of each activity.

(ii) Multiply these percentages by the assigned weight of each activity to arrive at the
weighted progress.
(iii) Add up the resulting weighted progress of all activities to determine the project
progress.

Implementation Schedule with Activities and Weights

Yr1 Yr2 Yr3 Yr4 Yr5

a
ACTIVITIES

C
d
c
D
e f

1. Sum of all weights should equal 100 percent (a+b+c+d+e+f+g = 100%)

2. When calculating the percentage of “project progress,” all completed activities should be counted as accomplished, regardless of when they
were scheduled to be completed. For example, when calculating the percentage of “project progress” after year 3, if activity D is completed in
year 3 rather than in year 2, it should still be included in the computation.
3. Total weight of each activity is as follows: Activity A–a; Activity B–b; Activity C–c; Activity D–d; and Activity E–e + f +g
4. Project progress of a project is the summation of the actual percentage of progress for each activity multiplied by the total weight of each
activity.
 Appendix 13 57

Sample Implementation Schedule

(a) (b) (a) x (b)

Activities Year 1 Year 2 Year 3 Year 4 Assigned Actual Weighted
Weight Progress Progress
Establish PIU 5% 100% 6%
Establish Accreditation Board, etc. 5% 0% 0%
Appoint Staff and Budget 4% 75% 3%
Adopt Architecture Plans 2% 100% 2%
Shortlist Consulting Firms 6% 100% 6%
Prepare Fellowship Program 6% 76% 4%
Prepare Civil Works Tendering 30% 0% 0%
Civil Works: Classrooms, Dorms, etc. 6% 0% 0%
Procurement of Furniture and Equipment 16% 10% 2%
Field Work of Consultants 7% 0% 0%
Provide Fellowships 6% 0% 0%
Conduct Study Tours 6% 0% 0%
Provide Curriculum Standards 6% 0% 0%
Total Weight 100%
Imp. Progress 24%

(a) Assigned weight for each activity

(b) Actual progress of each activity
(a) x (b) weighted progress for each activity
Project progress = sum of all weighted progress for each activity
58 Appendix 14

Notes: One statement should be prepared in the currency of the Borrower. Another Statement should also be prepared in
USD equivalent using appropriate exchange rate.

SAMPLE REPORT FORMAT

PROJECT ACCOUNT

LOAN NO. ___________ :___________________________________________

FOR THE PERIOD__________________________
(in US$ million)/(in local currency million)

ADB FINANCED GOVERNMENT FINANCED TOTAL ADB AND GOVT FINANCED

Expenditure Category */ Foreign Local Foreign Local Foreign Local
Exchange Currency Total Exchange Currency Total Exchange Currency Total
For Current Period

1. Civil Works
2. Equipment and Materials
3. Training
4. Consulting Service
5. Taxes/VAT
6. Overhead
7. Interest Charges

Total

Cumulative Since Start of Project

1. Civil Works
2. Equipment and Materials
3. Training
4. Consulting Service
5. Taxes/VAT
6. Overhead
7. Interest Charges

Total

Note: Exchange Rate used: ______

*/ As applicable, please provide details of each expenditure category as supplementary statements.
 Appendix 15 59

Pro Forma of the Project Completion Report

Suggested Topics for Project Completion Reports to be Prepared by Borrowers

I. PROJECT DESCRIPTION

A. Objectives

B. Components (or subprojects for sector and multiprojects)

C. Implementation methods

D. Description and justification of changes in components (or subproject appraisal criteria)

or implementation methods

II. PROJECT IMPLEMENTATION

A. Compare original and actual implementation schedules. Indicate delays, length and
causes of delays, and remedial action taken.

B. Compare cost estimates made during appraisal and actual costs (foreign and local).
Local currency costs incurred, appropriate exchange rates for their conversion into US dollars,
and the foreign exchange costs financed by cofinanciers must be compiled correctly with
reference to audited project accounts. Indicate factors that contributed to any significant
overruns or underruns.

C. State problems or difficulties in recruiting consultants, with reference to ADB procedures.

Assess the consultant's work and the working relationship between the executing agency (EA)
and the consultant. Use of a logical framework is strongly recommended.

D. State problems or difficulties encountered in procuring goods and services (including

civil works) with reference to ADB procedures. Assess the supplier's or contractor's
performance under the contract.

E. Give the extent of compliance of the borrower and EA with loan covenants, with reasons
for noncompliance or delays in compliance and the remedial actions taken.

F. State reasons for any delays in loan utilization. Evaluate the appropriateness of the
disbursement methods used. Justify the reallocation of loan proceeds.

G. State problems or difficulties with subproject appraisal. Evaluate the EA’s performance
and capacity to appraise subprojects.

II. INITIAL OPERATIONS

A. Describe initial operations of the project and transitional problems encountered from
project completion to initial operations.
60 Appendix 15

B. Describe measures taken to ensure continued smooth operation of the project relative to
management, staffing, funding, and maintenance of project facilities.

C. Analyze the prospects of the project benefits being realized.

IV. EVALUATION OF THE ASIAN DEVELOPMENT BANK’S PERFORMANCE

A. Assess ADB's performance in supervising project implementation. Include comments on

the adequacy of the consultants’ terms of reference and appropriateness of specifications in
tender documents. Evaluate the effectiveness and timeliness of assistance extended by ADB to
solve implementation problems.

B. Comment on problems encountered with ADB's procedures. Note the measures taken to
resolve these problems and suggest changes in procedures and requirements.
 LOAN 2332/2333-BAN(SF): SUSTAINABLE POWER SECTOR DEVELOPMENT PROJECT
MAJOR COVENANTS

Project Specific Covenants Reference Date Due Responsible Status of

Agency Compliance
Administrative
1. Within four months of the effective date, the Borrower shall LA [2333- 4 months after Borrower, MPEMR Not yet due.
cause MPEMR to prepare and submit to ADB the needs BAN(SF)], loan effectivity
assessment as referred to in Schedule 1 to the Loan Sch. 5, para. 4
Agreement. MPEMR shall incorporate ADB’s comment to the
design of the capacity development program and shall start
the implementation of the Project following the areas of priority
identified in the needs assessment.
2. The Borrower shall ensure that women participants are LA [2333- Borrower, MPEMR
included in all training and fellowship courses financed by the BAN(SF)],
Project. Sch. 5, para. 5
3. The Borrower shall ensure that the sector entities, including LA, Sch. 5, Borrower, All EAs
but not limited to BPDB, DESCO, DPDC, and PGCB and such para. 4
other entities which will be incorporated under the Borrower's
applicable laws, shall be autonomous and shall operate
independently in advancing their commercial and
administrative interests.
4. The Borrower shall ensure that each of the power sector LA, Sch. 5 Borrower
entities established under the Companies Act, 1994, as para.5
amended, shall be constituted in accordance with principles
and procedures acceptable to ADB. At least 50% of the
membership of the Board of Directors of each such entity shall
be persons who are neither current employees of such entity,
nor have been Govt. employees in the preceding three years.
At least 25% of all board members of each of these entities
shall be representatives of independent consumer or

Appendix 16
professional interest groups.
5. Within six months of the effective date, the Borrower shall LA, Sch. 5 Borrower
ensure that key officers of NWPGC have been recruited para.6)
through open competitive selection process to implement
Component A of the Project.
6. Within six months of the effective date, key DPDC's officers LA, Sch. 5 Within six months DPDC Not yet due.

61
 62
Project Specific Covenants Reference Date Due Responsible Status of
Agency Compliance

Appendix 16
and officers of NWPGC shall be recruited through open para.7 from effective
competitive selection process by the respective Boards of date
Directors of such companies.
Project Implementation
1. Within six months of effective date, the Borrower shall LA, Sch. 5, 6 months from Borrower, All EAs Not yet due.
cause the EAs to establish a comprehensive Project para. 26 (Loan effective date
Performance Management System (PPMS) acceptable to 2332-BAN);
ADB. The PPMS shall carry out performance monitoring and LA, Sch. 5,
reviews during Project implementation, to evaluate the scope, para. 6 (Loan
implementation arrangements, benefit monitoring, progress, 2333-BAN(SF)
and achievement of the objectives of the Project. PPMS
indicators shall serve as a basis for reports on Project
implementation
2. The Borrower shall cause MPEMR to establish a Project LA, Sch. 5, Borrower, MPEMR
Management Unit (PMU) headed by a full-time Project para. 2 (Loan
Director. The Project Director shall be supported by a team 2333-BAN(SF)
including, at least, a procurement specialist, a transmission
specialist, a distribution specialist, a generation specialist and
sufficient administrative staff. The team shall be supplemented
by consultants as required.
3. The Borrower shall cause each EA to prepare quarterly LA, Sch. 5, 20 days after end Borrower, All EAs Not yet due.
progress reports for its respective component to be submitted para. 27 of each quarter First submission for
to ADB within 20 days at the end of each quarter. Such quarter ending 30
progress reports shall include a summary financial account for Sept 2007, due on 20
the Project loan components. Oct 2007.

4. Throughout the implementation of the Project, the Borrower LA, Sch. 5, At all times, as Borrower
shall ensure that adequate allocations of the required para. 3 needed.
counterpart funds are made, approved and released in a
timely manner in order to ensure proper implementation of the
Project.
5. BPDB, PGCB, DESCO, DPDC and DESA shall maintain PA. Section 6 months after All EAs Not yet due.
separate accounts for the Project and for its overall operations 2.09 close of fiscal
and have such accounts and related financial statements year
audited annually by independent auditors and furnish to ADB
 Project Specific Covenants Reference Date Due Responsible Status of
Agency Compliance
promptly not later than 6 months after the close of the fiscal
year to which they relate, certified copies of such audited
accounts and financial statements and the report of the
auditors relating thereto (including auditors’ opinion on the use
of the loan proceeds and compliance with the Loan covenants.
6. The Borrower shall cause the EAs to appoint an LA, Sch. 5, As soon as first Borrower, All EAs Not yet due.
independent external auditor in accordance with the para. 24 project account is
Companies Act, 1994, as amended, which must also be ready for audit.
auditor acceptable to ADB. The auditor shall conduct annual
review of all disbursements made by the EAs. In addition, ADB
may conduct Project procurement audits during
implementation as part of its regular review.
7. Promptly after physical completion of the Project, but in any PA. Sec At project All EAs Not yet due.
event not later than three months thereafter or such later date 2.07(c) completion
as ADB may agree for this purpose, each EA shall furnish
ADB a Project Completion Report, in such form and in such
detail as ADB shall reasonably request on the execution and
initial operation of the Project, including its cost, the
performance of the EA of its obligations under the Project
Agreement and the accomplishment of the purposes of the
Loan.

Financial
1. The Borrower shall take all necessary actions to make the LA, Sch. 5 31 December Borrower Not yet due.
Bangladesh Energy Regulatory Commission fully functional no para.8 2007
later than 31 December 2007.
2. The Borrower shall cause each of BPDB, DESCO, DPDC LA, Sch. 5 At all times. Borrower, All EAs
and PGCB to comply at all times with the following financial para.9
covenants:
a) ratio of total operating expenses to total operating revenue
shall not be higher than 85%;

Appendix 16
b) debt-equity ratio shall not exceed 70:30;
c) account receivables shall not be more than 2 months billing
for PGCB and shall not be more than 3 months billing for
BPDB, DESCO and DPDC; and

63
 64
Project Specific Covenants Reference Date Due Responsible Status of
Agency Compliance

Appendix 16
d) debt service coverage ratio shall not be less than 1.2.

Environmental
1. The Borrower shall cause the EAs to ensure that the Project LA, Sch. 5, Borrower, All EAs
is undertaken and all Project facilities are operated and para. 17
maintained in accordance with all applicable laws, rules and
regulations of the Borrower, and ADB's Environment Policy
(2002) .
2. The Government will cause the EAs to ensure that (i) all LA, Sch. 5, Borrower, All EAs
necessary environmental clearances are obtained from the para. 18
relevant statutory authorities of the Government and all
environmental mitigation measures set forth in the IEEs for
each component are incorporated in detailed designs
(including any amendments on account of detailed designs
with prior ADB approval) and followed during construction and
operation of the components, (ii) environmentally-friendly
procurement guidelines of ADB are followed, (iii) all
environmental mitigation measures set forth in the IEE and
environmental clearance will be implemented, (iv) all facilities
renovated and/or established under the project loan will only
use transformers that are free of polychlorinated biphenyls
(PCB), and (v) any PCB waste generated during renovation
and upgrade of project facilities will be managed in
accordance with international best practices. The Government
will cause the EAs to submit reports on the monitoring results,
permits, licenses, and clearances obtained for the project loan.
In case of any violation of laws and standards, the report will
also include certification from the relevant authority that such
violation has been remedied or an acceptable plan for its
correction has been approved.

Social
1. The Borrower shall cause the EAs to ensure that all land LA Sch 5, Borrower, All EAs
acquisition, compensation, relocation and resettlement para. 11
activities under the Project shall be carried out in accordance
with (i) all applicable laws and regulations governing land
acquisition in Bangladesh, (ii) ADB’s Policy on Involuntary
 Project Specific Covenants Reference Date Due Responsible Status of
Agency Compliance
Resettlement (1995), and (iii) the agreed-upon RP. In case of
discrepancies between the Government’s laws, regulations,
and procedures and ADB’s requirements, ADB’s requirements
shall prevail. The Government will cause the EAs (i) to ensure
that payment of compensation and other entitlements to the
affected persons will be made prior to possession of land and
assets on the basis of replacement cost and prior to the
relocation of affected persons and commencement of civil
works; (ii) to acquire or make available the land and rights to
land free from any encumbrances required for commencement
of construction activities in accordance with the schedule
agreed under the related civil works contract; (iii) to ensure
timely provision of budget for land acquisition and other
activities outlined in the related RP; (iv) to meet any
unforeseen obligations in excess of budget estimates; and (v)
to ensure that resettlement funds disbursements are audited
annually by an independent auditor.
2. The Borrower shall cause the EAs to update the RP upon LA, Sch. 5 Upon finalization Borrower, All EAs Not yet due.
finalization of alignment and detailed design. para. 12 of alignment and
detailed design
3. In the event of any unanticipated or unforeseen involuntary LA, Sch. 5 Borrower, All Not yet due.
resettlement during Project Implementation in another para. 13 concerned EAs
Component than Component B, the Borrower shall cause the
EAs to update the RP.
4. Such updated RP shall be reviewed and approved by ADB LA, Sch. 5 Borrower, All Not yet due.
prior to award of the Works contract. The updated RP shall para. 14 concerned EAs
contain all final information related to affected households and
related compensation packages. The Borrower shall cause the
EAs to disclose the updated RP and ensure that the
information shall be available to all affected persons, in a form

Appendix 16
acceptable to ADB.
5. Within three months of the Effective Date, the Borrower LA, Sch. 5 Within 3 months Borrower, All Not yet due
shall cause the EAs to engage an independent expert or para. 15 from effective concerned EAs
agency, acceptable to ADB for monitoring and verification of date
the RP implementation. The Borrower shall cause the EAs to
submit quarterly progress reports and completion reports

65
 66
Project Specific Covenants Reference Date Due Responsible Status of
Agency Compliance

Appendix 16
acceptable to ADB, on land acquisition, resettlement, on
implementation of the RP, or updated RP.
6. Within three months of effective date, the Borrower shall LA, Sch. 5 Within 3 months Borrower, All EAs Not yet due.
cause the EAs to establish an independent grievance redress para.16 from effective
Committee to hear any grievance or any complaints related to date
resettlement for the Project.
7. The Borrower shall cause the EAs to ensure that the LA, Sch. 5, Borrower, All EAs Not yet due
project loan shall not cause any negative impact on tribal para. 20
people. In the event of any unanticipated or unforeseen
negative impact on tribal people, the Borrower shall cause the
EAs to ensure that the project loan is implemented in
accordance with ADB’s Policy on Indigenous Peoples (1998)
and the applicable laws and regulations of the Government. In
the event of any discrepancy between the Government’s laws
and regulations and ADB’s policy, then ADB’s policy shall
prevail.
8. The Borrower shall cause the EAs to ensure that the Works LA, Sch. 5, During Project Borrower, All EAs
contractors under the Project comply with all applicable labor para. 21 implementation
laws and regulations and incorporate provisions that
contractors (i) shall not use children as labor; (ii) provide equal
opportunity to women and men; (iii) shall follow legally-
mandated provisions of labor including equal pay for equal
work of equal value, health, safety, sanitation and working
conditions. The contracts shall include termination clauses in
case of breach of any of the stated provisions by the
contractors. Compliance with these provisions shall be strictly
monitored during implementation.
9. The Borrower shall cause the EAs to ensure that Works LA, Sch. 5, During Project Borrower, All EAs
contracts include a requirement on the part of the contractors para. 22 implementation
to conduct an information and education campaign on
communicable diseases, including but not limited to sexually
transmitted diseases and HIV/AIDS for construction workers
as part of the health ad safety program at campsites during the
construction period.
 Project Specific Covenants Reference Date Due Responsible Status of
Agency Compliance
Good Governance
1. The Borrower shall ensure that the Project funds are LA, Sch. 5, As needed. Borrower
utilized effectively and efficiently to implement the Project and para. 23
to achieve the Project objectives. ADB shall have the right to
conduct spot audits at any time during Project implementation
to determine the degree to which Project funds have been
effectively and efficiently utilized to implement the Project and
achieve its objectives, outputs and performance indicators.
ADB shall also have the right to investigate possible financial
or management impropriety in conducting the Project. The
Borrower and each EA shall fully cooperate with any such
investigation and extend all necessary assistance, including
access to all relevant books and records as well as
engagement by the EAs of independent auditors and experts
that may be needed for satisfactory completion of such
investigations. All costs related to such investigations shall be
borne by the Project.
2. The Borrower shall cause the EAs to take pro-active steps LA, Sch. 5,
to ensure good governance and prevent corruption, by among para. 25
other things (i) expanding the use of computerized billing
systems and pre-paid meters; and (ii) including pre-ship
inspection by an independent third party to ensure the quality
of the Goods and equipment procured.

Appendix 16
67
 68
LOAN 2334-BAN(SF): SUSTAINABLE POWER SECTOR DEVELOPMENT PROGRAM
MAJOR COVENANTS

Appendix 16
Program Specific Covenants Reference Date Due Responsible Status of
Agency Compliance
Program Implementation
1. The Borrower shall ensure that the policies adopted and LA, Sch. 5 Borrower
actions taken, as described in the Policy Letter and the para. 4
Policy Matrix will continue in effect during the Program
period and subsequently.
2. The Borrower shall (i) establish and maintain a Program LA, Sch. 5, GOB
performance evaluation system for the Program, which para. 8
shall include a data base on the status of policy measures
and Program indicators based on the Policy Matrix and the
design and monitoring framework for the Program; (ii)
monitor the implementation of the Program and its impacts,
and (iii) submit to ADB quarterly reports on the
implementation of the Program, including accomplishment
of the measures set forth in the Policy Letter and the Policy
Matrix.
3. The Borrower and ADB shall review the implementation LA, Sch. 5 Every 6 Borrower, ADB
of the Program and assess the impact of all relevant para. 9 months during
reforms in the sector every six months during Program program
implementation and at the end of the Program period. To implementation
facilitate such review, the Borrower shall assist ADB by
and at the end
providing relevant data and information in such detail as
ADB may reasonably request. of Program
period.
4. Approximately six (6) weeks before the anticipated LA, Sch. 5, 6 weeks before Borrower, ADB Not yet due.
withdrawal of the Second Tranche, or such other time as para. 10 second
the Borrower and ADB may agree, a review shall be tranche
carried out concerning the Borrower’s progress in release
implementing the policy reforms under the Program set out
in the Policy Letter and the Policy Matrix, including the
fulfillment of the conditions listed in Attachment 3 to
Schedule 3 of the Loan Agreement.
5. The Borrower shall ensure the timely implementation of LA, Sch. 5, At all times GOB
the Project Loan Agreements. para. 11
 Appendix 17 69

KEY PERSONS RESPONSIBLE FOR THE PROJECT

The following are the key persons responsible for the implementation/administration of the project:

For the Borrower:

Name Position Address Contact Numbers

Mr. Md. Aminul Islam Secretary Economic Relations Tel. No.: (880-2) 811 2641/
Bhuiyan Division, Ministry of (880-2) 911 0219
Finance Fax No.: (880-2) 811 3088

For the Executing Agency:

Name Position Address Contact Numbers

Loan 2332-BAN

For Part A:

Mr. Md. Khizir Khan Chairman Bangladesh Power Tel. No. : (880-2) 9556832
Development Board Fax No. : (880-2) 9564765
WAPDA Building
Motijheel Commercial Area

Mr. Md. Mokbul Hossain Project Director Tel.No.: (880-2) 9557518

For Part B:

Mr. A.B.M. Harunur Managing Power Grid Company of
Rashid Director Bangladesh Ltd.
Red Crescent Concord
Tower
17 Mohakhali, 6th Floor
Tel No. : (880-2) 9888716
Fax No.: (880-2) 9888501
Email : pgcb@citechco.net

For Part C:

Mr. Ataul Masud Managing Dhaka Power Distribution Tel No.: (880-2) 9670730
Director Co.
SCADA Bhaban, 2nd Floor
 70 Appendix 17

Name Position Address Contact Numbers

For Part D:

Mr. Saleh Ahmed Managing Dhaka Electric Supply Co. Tel. No.: (880-2) 8860341
Director House-3, Road-24 Fax No.: (880-2) 8859642
Block-K, Banani

Mr. Md. Monzur Director Tel. No.: (880-2) 8831151

Rahman (Technical)

Loan 2333-BAN(SF)

For Part E:

Dr..M. Fauzul Kabir. Secretary Power Division Tel No. : (880-2) 7165918
Khan Ministry of Power, Energy Fax No.: (880-2) 7173316
and Mineral Resources
Bangladesh Secretariat

Mr. S. M. Mesbahul Joint Secretary Tel. No. (880-2) 7168035

Islam (Development) Fax No.: (880-2) 7173316

Loan 2334-BAN(SF)

Dr. Mohammad. Secretary Finance Division Tel No. :(880-2) 7160406/

Tareque Ministry of Finance (880-2) 7162785
Bangladesh Secretariat Fax No.: (880-2) 7165581

Dr. M. Fauzul Kabir Secretary Power Division Tel No. : (880-2) 7165918
Khan Ministry of Power, Energy Fax No.: (880-2) 7173316
and Mineral Resources
Bangladesh Secretariat
 Appendix 17 71

For the Asian Development Bank:

Name Position Address Contact Numbers

Mr. Thevakumar Director, SAEN Asian Development Bank Tel No. : (632) 632-6301
Kandiah South Asia, Energy Fax No.: (632) 636-2338
Division Email: tkandiah@adb.org
6 ADB Avenue
Mandaluyong City
1550 Metro Manila
Philippines
Mr. Pil-Bae Song Head, Project Asian Development Bank Tel. (632) 632-6393
Administration South Asia, Energy Fax (632) 636-2338
Unit Division Email: psong@adb.org
6 ADB Avenue
Mandaluyong City
1550 Metro Manila
Philippines
Mr. Rahman Murshed Project Asian Development Bank Tel No.(880-2) 8156000 - 16
Implementation Bangladesh Resident Fax No. (880-2) 8156018-19
Officer Mission Email: rmurshed@adb.org
Plot No. E 31 Sher-e-
Bangla Nagar, Dhaka 1207
Bangladesh
Ms. Carmencita A. Associate Project Asian Development Bank Tel No.: . (632) 632-6844
Roque Analyst South Asia, Energy Fax No.: (632) 636-2338
Division Email: caroque@adb.org
6 ADB Avenue
Mandaluyong City
1550 Metro Manila
Philippines