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Madhya Pradesh Power Sector Development Program




Completion Report
Completion Report
Project Number: 29473
Loan Numbers: 1868 and 1869
June 2008




India: Madhya Pradesh Power Sector Development
Program

CURRENCY EQUIVALENTS

Currency Unit

Indian rupee/s (Re/Rs)



At Appraisal
At Project

Completion



(1 November 2001) (as of 3 April 2007)
Re1.00
=
$0.0208
$0.023
$1.00
=
Rs47.98
Rs43.29


ABBREVIATIONS


ADB

Asian Development Bank

CIDA

Canadian International Development Agency

DFID

Department for International Development

EA

executing agency

EIRR

economic internal rate of return

FIRR

financial internal rate of return

FRP

financial restructuring plan

IDC

interest during construction

MPERC

Madhya Pradesh Electricity Regulatory Commission

MPSEB

Madhya Pradesh State Electricity Board

PMU

project management unit

SDP

sector development project

SGIA

second generation imprest account

TA

technical assistance

WACC

weighted average cost of capital



WEIGHTS AND MEASURES


GWh

gigawatt-hour (1,000 megawatt-hours)

Hz

hertz (frequency, cycles per second)

kV

kilovolt (1,000 volts)

kVA

kilovolt-amperes (1,000 watts)

kWh

kilowatt-hour (1,000 watt-hours)

kW

kilowatt (1,000 W)

MVA

megavolt-amperes (1 million watts)

MW

megawatt (1,000 kW)

MWh

megawatt-hour (1,000 kilowatt-hours)

W

watt (unit of active power)



NOTES

(i)
The fiscal year (FY) of the Government ends on 31 March. FY before a calendar year
denotes the year in which the fiscal year ends, e.g., FY2008 ends on 31 March 2008.
(ii)
In this report, "$" refers to US dollars.











Vice President
L. Jin, Operations 1
Director General
K. Senga, South Asia Department (SARD)
Director
T. Kondo, India Resident Mission (INRM), SARD


Team leader
V.Rao Karbar, Senior Project Implementation Officer (Energy), INRM, SARD
Team member
M. Gomes, Assistant Project Analyst, INRM, SARD
CONTENTS

Page

BASIC DATA
i
MAP
vii
I.

PROGRAM DESCRIPTION
1

II.

EVALUATION OF DESIGN AND IMPLEMENTATION
2

A.

Relevance of Design and Formulation
2

B.

Program Outputs
3

C.

Program Costs
5
D.

Disbursements
6

E.

Program Schedule
6

F.

Implementation Arrangements
7
G.

Conditions and Covenants
8

H.
Related Technical Assistance
8
I.
Consultant Recruitment and Procurement
8
J.

Performance of Consultants, Contractors, and Suppliers
8

K.

Performance of the Borrower and the Executing Agency
9

L.

Performance of the Asian Development Bank
9

III.

EVALUATION OF PERFORMANCE
9

A.

Relevance
9

B.

Effectiveness in Achieving Outcome
10

C.

Efficiency in Achieving Outcome and Outputs
11

D.

Preliminary Assessment of Sustainability
11

E.

Impact
11

IV.

OVERALL ASSESSMENT AND RECOMMENDATIONS
13

A.

Overall Assessment
13

B.

Lessons
14

C.

Recommendations
14


APPENDIXES


1.
Chronology of Main Events in Program Processing and Implementation
16
2
Update of Policy Matrix
18
3.
Program Framework for Policy Loan
22
4.
Project Framework for Project Loan
27
5.
Cost Breakdown by Project Components
32
6.
Summary of Contracts
33
7.
Annual Average Exchange Rates
37
8.
Project Financing Plan
38
9.
Projected and Actual Disbursements of Loan Proceeds
39
10.
Implementation Schedule
40
11.
Organization Chart Of Madhya Pradesh State Electricity Board
42
12.
Status of Compliance with Major Loan Covenants
43
13.
Financial and Economic Evaluation
47
14.
Quantitative Assessment of Overall Program Performance
57


i
BASIC DATA

A.
Loan Identification


1.
Country

2.
Loan Numbers

3.
Program Title


4.
Borrower

5.
Executing Agencies

a. Program Loan

b. Project Loan


6.
Amount of Loan


India
1868 and 1869
Madhya Pradesh Power Sector Development
Program
India


Department of Finance, Government of
Madhya Pradesh
Madhya Pradesh State Electricity Board





a.
Program Loan
$150 million



b.
Project Loan


Net after cancellation
$178.99 million

First cancellation
$13.575 million (14 April 2005)

Second cancellation
$7.434 million (3 April 2007)

7.
Program Completion Report Number IND 1032

B.
Loan Data


1.
Appraisal


Date Started


Date Completed


2.
Loan Negotiations


Date Started


Date Completed


3.
Date of Board Approval


4.
Date of Loan Agreement


5.
Date of Loan Effectiveness


In Loan Agreement


Actual


Number of Extensions

6.
Closing Date
a.
Program Loan


Actual




b.
Project Loan


In Loan Agreement


Actual


Number of Extensions







27 August 2001
18 September 2001


7 November 2001
9 November 2001

6 December 2001

21 March 2002


22 March 2002
22 March 2002
None



28 November 2003


30 June 2006
3 April 2007
One



ii

7.
Terms of Loan

Project Loan


Interest Rate



Maturity


Grace Period






London interbank offered rate-
based
20 years
5 years
8.
Terms of Relending (if any)



Project Loan



Interest Rate
12%


Maturity (number of years )
20 years


Grace Period (number of years)
5 years


Second-Step Borrower
Madhya Pradesh State
Electricity Board



9.
Disbursements


a.
Dates
(i) Program



Initial Disbursements
Final Disbursements
Time Interval

25 March 2002
28 November 2003
20 months

Effective Date
Original Closing Date
Time Interval

22 March 2002
28 November 2003
20 months

(ii) Project



Initial Disbursements
Final Disbursements
Time Interval

31 October 2002
3 April 2007
53 months

Effective Date
Original Closing Date
Time Interval

22 March 2002
31 December 2006
57 months





b.
Amount ($ million)
(i) Program Loan









Tranche Number

Date Disbursed
Amount
Disbursed
First Tranche
25 March 2002
65.00
Second Tranche
25 October 2002
40.00
Third Tranche
28 November 2003
43.50


iii

(ii) Project Loan


Category
Original
Allocation
Last
Revised
Allocation
a

Amount
Canceled
Amount
Disbursed
Undisbursed
Balance
01 Equipment
159.10
181.80
22.70
174.37
7.44
02 Consulting
1.80
0.00
(1.80)
0.00
0.00
03 Front End Fee
2.00
2.00
0.00
2.00
0.00
04 Interest During
Construction

16.20

2.63

(13.58)

2.63

0.00
05 Unallocated
20.90
0.00
(20.90)
0.00
0.00
Total
200.00
184.63
(13.58)
178.99
7.44
a.
The revised allocation was effective on 23 December 2005.
Source: Asian Developm ent Bank records.





C.
Program and Project Data


1.
Program and Project Cost ($ million)



Cost
Appraisal Estimate
Actual



(i) Program Loan


Foreign Exchange Cost
150.00
150.00
Total
150.00
150.00



(ii) Project Loan


Foreign Exchange Cost
200.00
178.99
Local Currency Cost
118.90
81.06
Total
318.90
260.05


2.
Project Financing Plan ($ million)



Appraisal Estimate

Actual
Source

Foreign

Local

Total
Foreign
Local

Total
ADB

200.00

0.00
200.00

178.99

0.00

178.99
MPSEB

0.00
118.90
118.90

0.00
81.06

81.06
Total

200.00
118.90
318.90

178.99
81.06

260.05
ADB = Asian Development Bank, MPSEB = Madhya Pradesh State Electricity Board.
Source: MPSEB.

iv
3.
Cost Breakdown by Project Component ($ million)




Appraisal Estimate

Revised Estimate
a

Actual



Foreign
Local
Total
Foreign
Local
Total
Foreign Local
Total
A. Project Components










1.
33 kV and 11 kV
Systems
Improvement
55.80
27.10
82.90
52.50
28.50
81.00
55.20
12.30
67.50

2.
11 kV Conversion
5.30
1.80
7.10
3.90
1.80
5.70
4.10
1.00
5.10

3.
Transmission
System
Reinforcement
89.10
29.60 118.70
99.50 54.000
153.50 114.45
18.66
133.11

4.
Computerized
Information and
Revenue
Management System

7.80

2.00

0.00

7.80

2.00

9.80

0.00

0.00

0.00

5.
Metering
1.10
0.00
0.00
0.70
0.00
0.70
0.61
0.00
0.