World Bank to Shift Savings of $ 30 Million from Terbela-4 to Tarbela-5
The $ 30.4 million IDA Credit of World Bank is saved through cost-cutting by Wapda in Tarbela-4 Extension will be shifted to Tarbela-5. This saving will be used for contractors early payment in next phase (Tarbela-5) for which the work is about to be commissioned.
Tarbela-4 was $ 928 million project and Tarbela-5 is about to cost $ 807 million. For T-5 World Bank is providing US$390 million and the Asian Infrastructure Investment Bank (AIIB) US$300 million. World Bank provided $840 million in T4HP. Both extensions have capacity of 1410MW each.
WAPDA is working toward handing over Tunnel-5 to the contractors in September 2022, so that the contractors can start construction works on the tunnel. The progress of civil and electricity and magnetism (E&M) works will accelerate when the tunnel is available for construction. T5HP is expected to be commissioned in July-August 2025.
The World Bank has restructured “Tarbela Fourth Extension Hydro power Project (T4HP)” which will cancel Special Drawing Rights (SDR) 22.86 million (USD 30.4 million equivalent) from IDA Credit in response to the request from the Water and Power Development Authority (WAPDA).
Furthermore, this restructuring will increase the share of co-financing from IBRD for civil works, supply, and installation of electromechanical equipment, switch yard, and a transmission line for the additional financing for Tarbela’s fourth extension hydro power plant as requested by EAD.
IBRD Loan (costly loan) and IDA Credit (cheaper loan) also finance technical assistance, training, and preparation of strategic projects. Earlier, on July 12, 2016, SDR 81.9 million was canceled from IDA Credit as there were savings in the key contracts. The current closing date of IDA Credit is December 31, 2022. This restructuring proposes the cancellation of SDR 22.3 million from the IDA Credit, which are additional savings in the T4HP.
The Asian Infrastructure Investment Bank (AIIB), AIIB Loan LN 0005-PAK, approved by the AIIB on September 27, 2016, to support: a 1530 MW Tarbela Fifth Extension Hydro power Project (T5HP) in Tunnel 5 of the Tarbela Dam and a 500 kilo-Volt (kV) switch yard.
Additionally, IBRD Loan-86460 finances a 500kV transmission line from the switch yard to the Islamabad West substation. It also takes care of multiple social and environmental management plans, and others related to project and construction management and supervision, evaluation of project impacts, technical assistance, future project preparation, and a pilot project with a floating solar plant in the Tarbela Reservoir.
The closing date of IBRD Loan-86460 has been extended to May 31, 2024; and AIIB has extended the closing date of its loan to June 30, 2025. An additional extension of the IBRD and AIIB loans will be necessary to complete the construction and commissioning of T5HP. The period of the next extension will be determined in early 2024.
The Project’s progress towards achievement of the Project Development Objective (PDO), “to facilitate a sustainable expansion of Pakistan’s electricity generation capacity,” is satisfactory; and the overall implementation progress is also satisfactory. The Project’s environmental and social performance, procurement and financial management performance, and project management are all rated satisfactory.
T4HP was commissioned in 2018 and has since generated over 15,500 Giga Watt-hours (GWh) of sustainable energy. The generation from T4HP started on schedule and the plant was completed with cost savings of 10 percent, which is rare for a large hydro power project.
In T5HP, the key contractors for civil works and elector-mechanical (E&M) works have been mobilized. Under civil works, the contractor has been excavating the sites for raised intake, pen stock, powerhouse back slope, and tail race canal of the T5HP. Advance payment has been issued to the E&M contractor, who has been coordinating with the project supervision consultant for design review.
The contract for the 500kV transmission line has been signed by the National Transmission and Dispatch Company (NTDC) (implementing agency for the transmission line). NTDC will issue advance payment to the contractor and mobilize them in early September 2022.