China - Yantan Hydroelectric Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 6050-CiA STAFF APPRAISAL REPORT CHINA YANTAN HYDROELECTRIC PROJECT May 5, 1986 Projects Department East Asia and Pacific Regional Office. 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.  CURRENCY EQUIVALENTS Currency - Yuan (Y) } Yuan (Y) = US$0.333 1 Yuan = 100 fen (As of November 1985) Fiscal Year January 1 to December 31 Weights and Measures m3 Meter (= 3.2808 ft) m' = Cubic meter (= 35.3147 ft3) km = Kilometer (= 0.6214 miles) ha = Hectare (=0.01 km ) kWh = Kilowatt hour (= 860.42 kcals) CWh = Gigawatt hour (1,000,000 kilowatt hours) TWh - Terawatt hour (1,000,000,000 kilowatt hours) kW = Kilowatt (1,000 watts) MW - Megawatt (1,000 kilowatts) kV = Kilovolt (1,C00 volts) kVA = Kilovolt-ampere (1,000 volt-amperes) MVA Megavolt-ampere (1,000 kilovolt-amperes) PRINCIPAL ABBREVIATIONS AND ACRONYMS USED CAB - Cuangxi Audit Bureau GEPB - Guangxi Electric Power Bureau GIDI - Guangxi Investigation and Design Institute GOC - Government of China IAEA - International Atomic Energy Agency MOF Ministry of Finance MWREP - Ministry of Water Resources and Electric Power PCBC - People's Construction Bank of China SAA - State Audit Administration SBC - Special Board of Consultants SCEPA - South China Electric Power Administration SEC - State Economic Commission SPC - State Planning Commission WREPERI - Water Resources and Electric Power Economic Research Institute  FOR OFFICIAL USE ONLY CHINA YANTAN HYDROELECTRIC PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. I *THE ENERGY SECTOR................. 1 A. Overview -oe.*. ........ I B. Resource Endowment .............................. . 2 C. Efficiency of Energy Use................................. 2 II. THE POWER SUBSECTOR ................ ......... .. ............ . 3 A. Background. ........ ...... * 3 B. The Market for Electricity................................ 3 C. Institutions ...... 0 ........0 ........ ,.00.. * 4 De ..................................... .......... a a a a 4 E. Manpower and Training ................. ......... . 5 Fe Planning ..... o...... ,. 5 C. Technology Transfer ....... ................... .......... a a . 6 H. Subsector Objectives and Policies.^ ,.,................... 6 I. Subsector Problems .... ..... .......................... a a 7 T. Role of the Bank ..................... ................ # a ............ 8 III. THE BENEFICIARY ........... .....**.....*.. 9 A. Legal Status and Organization ......... ............ 9 Be Management,* ........... o............................. 9 C. Staffing and Training*......,.....*..................... 10 D. Planning, Budget andControl................,......... 11 E. Accounting,an Cl i.................. ................. 13 F. Audit .Proesin........................................... 14 G. Tariffsbutio yst..................... ................ 15 H. Billing and Co1lection#*..*.*ee.s*.* .......... , 15 I. Data Processing- ....9...... ....... . ..,, 17 J. nuac ............t 17 K. Distribution System ................... 17 IV. THE POWER MARKET AND THE PROGRAM ......... ........ 19 A. The Guangxi Power Grid. .... ....................... 19 B. Load Forecast ..... ..... .. .. O..* ........... 20 C. The Power Development Program .................. 20 This report was written by K.C. Ling and J. Sopher, who appraised the pr ject in November 1985. This document has a retrictd distribution and may be used by recipients only in the performance of their official duties. ts contents may not otherwise be disclosed without World Bank authorization.  - ii - Page No. V. THE PROJECT . * ****, ......... 44 ........* 22 A. Project Objectives ................. ...o.*.. e44*064044& 22 B. Project ................... 4 ee eo. 22 C. Cost Kstimte.............. ..... .440440 00 e ... 24 D. Financing Plan ................ . 26 Ea Procurement..........................,.. 27 F. Project Implementation ..............................e.* 28 CoDsusmetvee 29 H. Monitoring and R 29 I Environmental Aspects 30 Jo .................. , 30 K. Risks .................. e 4 31 VI* IAC*^**es*r****^*Xsv**s**vv 32 A. Introduction... 32 B. Financial Syeem 32 C. Past and Present Financial Performance....o....nce..... 33 D. Financial Plan ..... ..00...0...4... ................ 35 E. Future Finances......4.....4...4 , 4 37 VII. JUSTIFICATION ................ 40 A. Need for the Pro j e 4 0 40 B. Least Cost Stid i e s 42 C. Economic Rate of Retur n 42 VIII. AGREEMENTS REACHED AND RECOMOMENDATIONS...........O........ * 44 ANNEXES 1. Installed Capacity, Electricity Generation and Sales for the Power Subsector 2. Electricity Generation by Region and by Type of Plant 3. Performance Indicators of GEPB (1980-84) 4. Manpower Development and Training 5. Diagnostic Analyses of Computer-based Information System Needs 6. Electricity Tariff of GEPB 7. Installed Capacity, Energy Generation and Sales of GEPB 8. Major Generating Facilities of GEPB 9. Energy Consumption by Category of Consumers 10. Balance of System Load and Capability of GEPB 11. Estimated Monthly Output of Yentan Hydroelectric Project under various Hydro Conditions 12. Cascade Development of Hongshui River Basin 13. Pertinent Physical Data for Yantan Hydroelectric Project 14. Summary and Recommendations of the first meeting of SBC 15. Project Cost Estimate 16. List of Equipment ad Materials to be procured under Bank Loan  - iii - ANNEXES (Cont'd) 17. Disbursement Schedule 18. Resettlement Plan 19. Financial System in China 20. GEPB's Financial Statements (1980-84) 21. GEPB's Financial Forecasts (1985-95) 22. Assumptions to Financial Projections 23. Economic Rate of Return 24. Selected Documents and Data in the Project File CHARTS 1. Organization of MWREP 2. Organization of CEPB 3. Development Program of Guangxi Power Grid 4. Organization of the Construction Management Unit 5. Project Implementation Schedule MAP Yantan Hydroelectric Project (IBRD 19418)  - iv - Estimated Costs: Local Forsign Total ---($ million) -- Preparatory work 35.9 - 35.9 Land, compensation and resettlement 75.8 - 75.8 Construction equipment and plant 78.3 19.4 97.7 Civil works 124.1 72.0 196.1 Electrical, mechanical equipment and computers 100.5 2.8 103.3 Transmission lines and substations 49.3 17.3 66.6 Engineering and consulting services 5.3 2.5 7.8 Supervision and administration 1.8 - 1.8 Training 1.6 1.0 2.6 Base Cost: 472.6 115.0 587.6 Physical contingencies 44.4 10.3 54.7 Price contingencies 182.6 39.1 221.7 Total Project Cost: 699.6 164.4 864.0 Interest during construction 148.5 20.6 169.1 Total Financing Required: 848.1 185.0 1,033.1 Note: The project is exempted from import duties and taxes. Financing Plan: Local Foreign Total (-$ million) - IBRD loan - 52.0 52.0 Bilateral grants - 2.0 2.0 Local bank loans 848.1 131.0 979.1 Total 848.1 185.0 1,033.1 Estimated Disbursements: Bank FY 1987 1988 1989 1990 1991 1992 1993