Bangladesh: Siddhirganj Power Project Implementation Review Mission January 2-7, 2019 Aide Memoire 1. During January 2-7, 2019, a Bank Team1 carried out an Implementation Support Review of Siddhirganj Power Project. This Aide Memoire (AM) summarizes the findings on the status of project implementation, recommendations and agreements reached with the relevant agencies to take corrective measures and/or to expedite implementation. The AM was discussed at a wrap-up meeting on January 8, 2019 with Secretary Power Division as the chair. As agreed, the aide-memoire will be classified as public document under the World Bank’s Access to Information Policy. OVERALL STATUS AND KEY PROJECT DATA 2. The mission reviewed present implementation status and performance of the project. The 230 kV power evacuation system, the 60 km gas transmission pipeline, and the 217 MW simple cycle power plant are in commercial operation. EGCB is monitoring energy delivery from the simple cycle to the grid. In the last 8 months (May to December 2018) 713.67 GWh has been delivered. Construction of the steam cycle power plant facilities and implementation of few capacity building contracts of the project are going on smoothly. Implementation performance of the project is satisfactory and the project development objective (PDO) is achievable. Table 1: Project Data Board Approval October 30, 2008 Effectiveness Date March 31, 2009 Closing Date of IDA Credit June 30, 2019 IDA Credit Amount (total): US$ 526.71 million Original: US$ 350 million Additional Financing: US$ 176.71 million Exchange loss: US$ 24.15 million Amount Disbursed: US$ 364.21 million 3. Physical progress of the various activities of the combined cycle power plant (CCPP) facilities is given below: (i) installation of Steam Turbine (ST) and accessories (60%), (ii) installation of cooling tower (85%), (iii) construction of workshop building (40%), (iv) chemical cleaning of pipes (40%) and heat recovery steam generator (HRSG) (0%), (iv) effluent treatment plant (ETP) (80%), and (v) construction of boundary wall of the power plant (50%). Furthermore, commissioning of river intake pump, water treatment facilities, waste water treatment plant, MV motors and CC MV switchgear is ongoing. One gas booster compressor (GBC) is under repair at manufacturer’s plant in Italy. Construction of the other balance of plants (BOPs) is complete. No major procurement of the CCPP is pending and almost all plants/equipment of the CCPP are available at site. Implementation of three capacity building contracts (enterprise resource planning (ERP), construction of School Building, and Owner’s Engineering support) of the project is expected to be complete in June 2019. KEY POINTS DISCUSSED AND AGREED ACTIONS 4. The mission reviewed the latest construction schedule of the CCPP and noted that pre- commissioning will start in June 2019 and commercial operation of the CCPP is expected in October 2019. This is beyond the current closing date of the project (June 30, 2019). Additional time, not more than six months, will be required to bring the CCPP to commercial operation, monitor the PDO 1 Names of the task team with their roles/designations: Md. Iqbal, Senior Energy Specialist; Richard Olowo, Lead Procurement Specialist; Md. Bazlul Kadir, Procurement and Contract Management Consultant; Mohammed Atikuzzaman, Senior Financial Management Specialist; Mohammad Sayeed (Senior Disbursement Consultant); Sabah Moyeen, Senior Social Development Specialist; Iqbal Ahmed, Senior Environmental Specialist; and Md. Tafazzal Hossain, Program Associate. Bangladesh: Siddhirganj Power Project Implementation Review Mission, Jan. 2 – 7, 2019 1|Page indicator, and complete the punch items. Therefore, the government needs to forward a request for time extension for Bank’s processing. 5. The mission estimates that the project has savings of US$ 40.20 million which cannot be utilized in remaining period of the project. The mission is informed that the Power Division and ERD are in discussion to process cancellation of savings. However, the mission recommends the borrower to send a request to the Bank by January 31, 2019 on cancellation of the surplus and extension of the credits closing date for 6 months (for details, please see para 10). 6. EGCB and Samsung have reviewed the spare parts list needed for the gas turbine during warranty period. The mission requests EGCB to conclude the issue and update the Bank by end of January 2019. The mission stated that 3 GBCs should be made available to ensure reliability of the Gas Turbine Power plant and requests EGCB to ensure early shipment of one GBC upon satisfactory repair in Italy. EGCB is to ensure contractual compliance in this regard. 7. Haripur and Siddhirganj regulating and metering stations (RMSs) have been built by GTCL. Titas Gas has been operating them. However, the assets are yet to be formally transferred to Titas Gas. GTCL is working on this and the transfer should be completed by March 31, 2019. FIDUCIARY COMPLIANCE 8. Procurement Performance: All major procurements of the project are complete. EGCB initiated procurement of 3 small value contracts for the school through the e-GP system. The procurement risk of the project is rated as moderate. 9. Financial Management (FM) Performance: There is no major FM issues. GTCL prepared a 10-year business plan but EGCB failed to engage a consultant in this regard. This task may be dropped from EGCB’s procurement plan. The FM risk rating of the project is moderately satisfactory. 10. Disbursements Status: As of December 31, 2018, the cumulative disbursements are US$ 364.21 million ($309.44/Cr. 4508-BD and $54.77 million/Cr.5737-BD (AF) against the total loan amount US$ 526.71 (Original: US$ 350 million and AF: US$ 176.71 million). However, during the implementation, there has been an exchange loss of US$ 24.15 million. As of January 01, 2019, the undisbursed amount is about US$ 138.35 million (Original 17.82/Cr. 4508 plus AF 120.62/Cr. 5737), of which EGCB’s requirement for the remaining period is US$ 97.25, to be financed out of the AF, and GTCL’s pending bill is about US$ 1.52 million under IDA Cr. 4508-BD. PGCB is one of the beneficiaries under the original Credit (Cr. 4508-BD) and all their activities were fully completed about two years back and no further disbursement is pending. The estimated savings are about US$ 39.72 million (Original Credit 4508-BD 16.30 plus 23.42 under AF) excluding a pending refund of encashed Advance Payment Guarantee (APG) from EGCB. 11. In a letter dated November 2, 2017, EGCB was advised for refunding to IDA account the APG in the amount of US$ 830,357.14, EURO 162,603.73 and BDT 42,766,514.39 (total US$1.48 million equivalent). During the last fifteen months the refunds to IDA account have not been made. Therefore, the total proposed cancellation of the estimated savings will be US$ 41.20 million (Original Cr. 4508- BD $ 17.78 plus $ 23.48 under AF 5737-BD) once the refund is complete by EGCB under the IDA Cr. 4508-BD. At the wrap-meeting, it was agreed that the pending refund by EGCB to IDA account will be completed by February 2019 so that the closing date extension of the Credit may be processed by the Bank. SAFEGUARD MANAGEMENT 12. Environmental Safeguards: Overall compliance status of the environment management plan (EMP) at the Siddhirganj 335 MW CCPP site is satisfactory. However, non-compliances were observed at School Building construction, mainly in site fencing/demarcation, lack of use of Personal Protective Bangladesh: Siddhirganj Power Project Implementation Review Mission, Jan. 2 – 7, 2019 2|Page Equipment (PPE) and improper construction waste segregation and storage. EGCB and contractor should provide more attention to comply with the entire EMP. The contractor must engage a safety supervisor at site and should conduct safety training to labors prior to begin of work. Regarding plant emission, it was agreed that the emission data (CO, NOx, SOx etc.) from Continuous Emission Monitoring System (CEMS) would be shared with the Bank at every three months. The mission further requested EGCB to share the chemical cleaning procedure of HRSG/Piping and the operating diagram of the Effluent Treatment Plant, for Bank review. These documents should be reviewed and endorsed by relevant experts of Fichtner, the Owner’s Engineer, prior to sending to the Bank. NEXT REVIEW: The next mission is planned for May 2019. Table 2: Summary of Agreed Actions Actions Responsibility Agreed timeline 1 Completion of Chemical cleaning and start of Steam EGCB March/June 2019 blowing to facilitate commissioning of Steam respectively. Turbine. 2 Achievement of Commercial Operation of CCPP. EGCB October, 2019 3 Borrower’s letter on cancellation of project savings EGCB/Power January 31, 2019 and 6 months extension of credit closing date. Division/ERD 4 Refund of APG to IDA Account. EGCB/Power February28, 2019 Division 5 Handover of assets of two (Siddhirganj and Haripur) GTCL/Petrobangla/ March 31, 2019 RMSs to Titas Gas. Titas Gas 6 Response of government’s request on cancellation of IDA February 28,2019 project savings and extension of Credits closing date up to December 31, 2019 Annex1: List of persons met Annex2: Updated Results Framework Bangladesh: Siddhirganj Power Project Implementation Review Mission, Jan. 2 – 7, 2019 3|Page Annex 1 List of persons met: Power Division: 1. Dr. Ahmad Kaikaus, Secretary 2. Mr. Mohammed Shafiqullah, Additional Secretary 3. Mr. Sayed Mamunul Alam, Joint Chief 4. Mr. Md. Shohelur Rahman Khan, Deputy Chief ERD: 1. Ms. Mahmuda Begum, Additional Secretary 2. Ms. Syeda Masuma Khanam, Deputy Secretary EGCB: 1. Mr. Ali Kausar Muhammad Firoz, Managing Director 2. Mr. Md. Nazmul Alam, Project Director, Siddhirganj 335 MW CCPP 3. Mr. Md. Siful Islam Dy. Project Manager 4. Mr. Mir Mohammad Zinnat Ali, Chief Engineer, P&D 5. Mr. Md. Rasheduzzaman Khan, IT Manager PGCB: 1. Engr. Pranab Kumar Roy, Chief Engineer (P&D) GTCL: 1. Mr. Md. Ainul Kabir, Project Director, BSP 2. Mr. Md. Akhtar Hossain Munshi, Manager 3. Ms. Khadija Taslima Haque Lime, Deputy Manager 4. Mr. Munshi Akhtar Hossain, Financial Management Specialist Bangladesh: Siddhirganj Power Project Implementation Review Mission, Jan. 2 – 7, 2019 4|Page Annex-2 5. Results Framework PDO Indicators by Objectives / Outcomes Increase supply of electricity to Bangladesh grid IN00660126 ►Additional annual electricity delivered to grid: peak and off-peak (Gigawatt-hour (GWh), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 648.00 2,490.00 Date 31-Oct-2008 -- 30-Nov-2018 31-Dec-2019 Intermediate Results Indicators by Components Technical Assistance and MIS IN00659830 ►Utility capacity built in ERP, O&M, OEs, ES impact assessment/mngmt (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 5.00 -- 75.00 100.00 Date 31-Oct-2010 -- 03-Jan-2019 31-Dec-2019 60 km, 30-inch gas transmission line including price/physical contingencies IN00660137 ►60 km gas pipeline built (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 60.00 60.00 Date 31-Oct-2008 -- 31-Dec-2014 31-Dec-2014 230 kV Power Evacuation System IN00659842 ►230 kV 11 km power evacuation system built (Kilometers, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 11.00 11.00 Date 31-Oct-2008 -- 31-Dec-2014 31-Dec-2014 335 MW Combined Cycle Power Plant (CCPP) including price and physical contingencies IN00659843 ►335 MW Combined Cycle Power Plant (CCPP) built. (Megawatt, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 217.00 335.40 Date 31-Dec-2008 -- 01-May-2018 31-Dec-2019 Bangladesh: Siddhirganj Power Project Implementation Review Mission, Jan. 2 – 7, 2019 5|Page