Assam Power Sector Investment Program - Tranche 1

To avoid unnecessary financing commitments and fund allocations, it is important to undertake a detailed needs assessment of all planned components. The project cost was 31% lower than estimated because of lower bid prices received under the international competitive bidding, the transfer of part of the project scope to another tranche project, and non-implementation of some project activities. ADB financing was 22% lower than its $50 million loan commitment. The unused loan funds were canceled in two stages: in 2019, after output 1 was completed at a lower cost; and at loan financial closure. While it was not the case with this project, failure to identify the scope of even minor activities could cause significant delays in project completion, with possible negative impact on the overall outlook of the project.