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Lesson
Need for an in-depth examination of GSE’s financial performance to ensure that the risk of large investments in the 400 kV and 500 kV transmission system can be managed. Also, consideration must be given to include in contracts the benefits from power transit and their associated market risks in neighboring countries and investment. This is in view of GSE being unable to manage the risk if the revenue from power transit is linked only to the power flow (footnote 15).

Project Number: 44183-013
Project Name: Regional Power Transmission Enhancement Project
Report Date:
Lesson
The need to study the structure of the regional power market and hold discussions with the related agencies on introducing measures to increase the price of excess hydropower generation during summer months. This could, for example, be undertaken by a market supervisor or regulator who checks market power.

Project Number: 44183-013
Project Name: Regional Power Transmission Enhancement Project
Report Date:
Lesson
The choice of the MFF as a financing modality appears to decrease the level of due diligence and scrutiny employed when approving single tranches as compared to project-based lending. This needs to be considered as a downside of the MFF modality in general and a more thorough due diligence stage needs to be implemented before approving single tranches, not only at MFF appraisal level.

Project Number: 37139-043
Project Name: Uttarakhand Power Sector Investment Program–Tranche 3
Report Date:
Lesson
Before approving new MFF tranches, it is necessary to ensured that all covenants of the first tranches have been met. This needs to be a condition for the disbursement of new funds, because at a later stage, ADB does not have much leverage.

Project Number: 37139-043
Project Name: Uttarakhand Power Sector Investment Program–Tranche 3
Report Date:
Lesson
More stringent monitoring needs to be employed related to associated assets, such as transmission lines and power generation, as they affect implementation substantially. Associated infrastructures should be implemented earlier and potentially include them as covenants for the borrower to ensure the proper and timely execution of the project. As mentioned in para. 10, the substation was mostly unused at the time of PCR preparation.

Project Number: 37139-043
Project Name: Uttarakhand Power Sector Investment Program–Tranche 3
Report Date:
Lesson
Providing technical assistance to strengthen the institutional capacity of newly established states, executing agencies, and implementing agencies is essential. Capacity building activities should be included to enable smooth project execution according to ADB guidelines. The risk of natural disasters needs to be considered better during project design. More thorough due diligence into the frequency of these events needs to be employed, as for example the Sobla-1 hydropower plant was washed away twice, resulting in the abandonment of the project.

Project Number: 37139-043
Project Name: Uttarakhand Power Sector Investment Program–Tranche 3
Report Date:
Lesson
The choice of the MFF as a modality appears to decrease the level of due diligence and scrutiny employed when approving single tranches as compared to project-based lending. This needs to be considered as a downside of the MFF modality in general. A more thorough due diligence stage needs to be foreseen before approving single tranches, not only at the MFF appraisal level.

Project Number: 37139-033
Project Name: Uttarakhand Power Sector Investment Program–Tranche 2
Report Date:
Lesson
When revising the project scope, ensure that mistakes made during the design phase are not repeated. Before approving new MFF tranches, ensure that all covenants of the previous tranche(s) are met. This needs to be a condition for the disbursement of new funds, as at a later stage, ADB does not have much leverage to enforce such covenants. Focusing on fast loan disbursements can lead to premature procurement and later cancellation, incurring unnecessary financial charges and IDC on the borrower.

Project Number: 37139-033
Project Name: Uttarakhand Power Sector Investment Program–Tranche 2
Report Date:
Lesson
More thorough due diligence needs to be conducted related to the feasibility of realization of associated infrastructure that serves as a prerequisite to the project outputs; e.g., transmission lines directly connected to a planned power plant. The uncertainties about their successful implementation need to be reduced or eliminated, if possible, before approving loan disbursements and procurement activities, even if this leads to disbursement delays. This will reduce the risk of loan proceeds being spent unproductively and the burden of financing charges and IDC.

Project Number: 37139-033
Project Name: Uttarakhand Power Sector Investment Program–Tranche 2
Report Date:
Lesson
Providing technical assistance grants is essential to strengthening the institutional capacity of newly established states, executing agencies and implementing agencies, to enable smooth project execution according to ADB guidelines. The risk of natural disasters needs to be assessed appropriately during the project design stage, with special attention to the frequency of these events.

Project Number: 37139-033
Project Name: Uttarakhand Power Sector Investment Program–Tranche 2
Report Date:
Lesson
ADB would need to identify more adequate indicators for power system reliability to appropriately capture the benefits of transmission projects. The formulation of specific DMFs for the different tranches of an MFF are essential to appropriately measure effectiveness and establish causality between outputs and outcomes. The indicators and targets in the DMF for future projects, prepared under the new guidelines should be closely aligned with project outcomes and outputs.

Project Number: 37192-033
Project Name: Power Transmission Enhancement Investment Program–Tranche 2
Report Date:
Lesson
No additional lessons

Project Number: 38492-013
Project Name: Power Grid Transmission (Sector) Project
Report Date:
Lesson
Regarding results framework and methodology level lessons, this validation suggests that since one of the MFF outcomes was for better financial performance of the distribution companies, ADB should emphasize more on the monitoring of financial performance over the 5 or more years of project implementation. Improvement in the physical infrastructure of the power systems should go hand-in-hand with improvements in the financial soundness of these companies. Corrective measures to financial performance should be during implementation when ADB has the most leverage.

Project Number: 32298-063
Project Name: MFF-Madhya Pradesh Power Sector Investment Program (Tranche 5)
Report Date:
Lesson
The number of projects and subprojects to be implemented under any assistance package must consider the absorptive capacity of local contractors, availability of construction materials, and local labor. Close attention must be given to the quality of the facilities and infrastructures built. Utilizing local contractors and labor have their trade-offs, such as implementation delays and deficiency in financial resources, but the quality of the completed facilities is nonnegotiable. This would require closer supervision, frequent monitoring, and faster processing of payments.

Project Number: 44065-013
Project Name: Conflict-Affected Region Emergency Project
Report Date:
Lesson
It is best to allocate available local resources and assistance, including loans based on sector priorities, through a participatory process involving all stakeholders and beneficiaries.

Project Number: 44065-013
Project Name: Conflict-Affected Region Emergency Project
Report Date: