Sri Lanka - Ninth (Distribution, Expansion and Rehabilitation) Power Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 6032-CE STAFF APPRAISAL REPORT SRI LANKA POWER IX: DISTRIBUTION EXPANSION AND REHABILITATION PROJECT September 17, 1986 Energy Division South Asia Projects Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank atorimtion,.  SRI LANLCA POWER IX: DISTRIBUTION EXPANSION AND REHABILITATION PROJECT CURRENCY EQUIVALENTS US$1.0 - = SR Rs 27.4 -SL Rs 1.0 = US$0.036 MEASURES AND EQUIVALENT i kilometer (kin) = 0.6214 mile 1 kilovolt (kV) = 1,000 volt-s 1 megavolt ampere (MVA) 1 million volt amperes 1,0f00 kilovolt amperes I kilowatt (kW) 1,000 watts 1 megawatt (MW) = 1 million watts = 1,000 kilowatts 1 kilowatt hour (kWh) = 1,000 watt hours 1 gigawatt hour (GWh) = 1 million kilowatt hours kgoe = kilogram oil equivalent toe = ton oil equivalent ABBREVIATIONS AND ACRONYMS ADB = Asian Development Bank AMP = Accelerated Mahaweli Program CEB = Ceylon Electricity Board CPC = Ceylon Petroleum Corporation DDRB = Distribution Development and Rehabilitation Branch DGEU = Department of Government Electrical Undertakings EIRR - Economic Internal Rate of Return ESMAP = Energy Sector Management Assistance Program FY = Fiscal Year COSL = Government of Sri Lanka GTZ 5 German Agency for Technical Cooperation 1GB = International Competitive Bidding KfW = Kreditanstalt fuer Wiederaufbau LECO = Lanka Electric Company Limited LRC = Loss Reduction Cell LRMC = Long Run Marginal Cost LV = Low Voltage MPE = Ministry of Power and Energy MASL = Mahaweli Authority of Sri Lanka MV = Medium Voltage ODA = Overseas Development Administration (UK) TOR = Terms of Reference USAID = United States Agency for International Development CEB's Fiscal Year is the calendar year.  FOR OMCIAL USE ONLY SRI LANKA POWER IX: DISTRIBUTION EXPANSION AND REHAILITATION PROJECT Credit and Project Summary Borrower s Democratic Socialist Republic of Sri Lanka. Beneficiary : Ceylon Electricity Board (CEB). Amount- : SDR 43.2 million (US$52.0 million equivalent). Terms : Standard. Onlending Terms 3 The Government would relend the credit proceeds to CEB at an interest rate of ten percent per annum, repayable over 20 years, including five-year grace period. The Covernment would bear the foreign exchange risk. Project Description : The principal objectives of the Project are to improve the reliability and quality of power supply, to reduce losses to economic levels, and expand the distribution system to meet the forecast demand for electricity. The Project consists of a four-year time slice of CEB's distribution rehabilitation and expansion program. The project would comprise the erection of about 950 km of 33-kV lines, extension and rehabili- tation of low voltage distribution networks in Colombo city and elsewhere in Sri Lanka, and technical assist- ance to CEB. Risks: The Project is straightforward and no unusual risks are foreseen. Delay in implementation is, however, possible since the project is spread over a large geographical area and has many interfaces with the existing network. This risk would be minimized through the provision of project management assistance by cossultants. The packaging of the Project, which uses supply and erect contracts and clearly identifies contractual responsibility, would also minimize this risk. Slippage could occur due to delays in appoint- ing contractors and problems in acquiring right of way. Any delays in the appointmerlt of contractors would be minimized by engaging consultants prior to credit effectiveness. Most of the distribution lines would be constructed adjacent to public roadways and Sri Lanka's existing laws give adequate powers to CEB to acquire right of way. Thus the acquisition of right of way is not expected to delay project imple- mentation. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Local Foreign Total -----------US$ million Estimated Cost Main 33-kY Lines 11.7 18.3 30.0 Other hV Networks 5.0 9.5 14.5 Rationalization of LV Networks 3.7 3.8 7.5 Colombo City Network 7.9 9.9 17.8 Network Rehabilitation 2.7 4.8 7.5 Consultancy, Project Management & Training 1.4 4.3 5.7 Total Baseline Costs 32.4 50.6 83.0 Physical Contingencies 3.2 5.1 8.3 Price Contingencies 7.5 9.3 16.8 Total Project Costs 1/ 43.1 65.0 W08.1 Financing Plan IDA 52.0 52.0 ODA - 13.0 13.0 CEB 43.1 - 43.1 43.1 65.0 108.1 Estimated Disbursements IDA FY87 FY88 FY89 FY90 FY91 FY92