Transcript First Phase of the - CASA

FIRST PHASE OF THE
CENTRAL ASIA SOUTH ASIA REGIONAL
ELECTRICITY MARKET (CASAREM)
March 2012
1
The CASAREM Vision
The Central Asia South Asia Regional Electricity Market
(CASAREM) will help develop a modern, sustainable
electricity market between the two neighboring regions.
Central Asian countries, endowed with large energy
resources, can help South Asian Countries meet their rapidly
increasing demand for electricity – a key growth constraint
The Central Asian countries could diversify markets for their
energy exports and create a source of revenue for their own
economic development.
2
CENTRAL ASIAN REPUBLICS
ARE ENDOWED WITH VAST ENERGY RESOURCES
Kazakhstan
Oil
Natural Gas
Coal
Hydro Power
Reserves:
30 billion bbl
85 TCF
31.3 billion tons
20,000 MW
Kyrgyzstan
Oil
Natural Gas
Coal
Hydro Power
Reserves:
0.04 billion bbl
0.2 TCF
0.9 billion tons
26,000 MW
Uzbekistan
Oil
Natural Gas
Coal
Hydro Power
Reserves:
594 million bbl
66 TCF
3.3 billion tons
1,700 MW
Turkmenistan
Oil
Natural Gas
Coal
Hydro Power
Reserves:
600 million bbl
280 TCF
Modest
Modest
Tajikistan
Oil
Natural Gas
Coal
Hydro Power
Reserves:
0.01 billion bbl
0.2 TCF
3.6 billion tons
40,000 MW
SOUTH ASIAN COUNTRIES FACE SEVERE ELECTRICITY SHORTAGES
WITH RAPIDLY INCREASING DEMAND
Country
Population GNI per capita
Million
Current US$
Per Capita
Electricity
Consumption
(KWh/year/cap)
Installed Access Rate
Capacity
Peak shortage
(GW)
(MW)
Afghanistan
29
310
31
0.5
13%
Bangladesh
160
580
195
5.5
47%
-1,500-1,800
(summer)
Bhutan
0.68
2020
1278
1.5
60%
20 (winter)
India
1,140
1220
527
174.4
70%
11,460
Maldives
0.30
3970
793
0.1
--
--
29
440
88
0.7
44%
400 (summer)
Pakistan
166
1000
413
19.8
84%
5,022
Sri Lanka
20
1990
391
2.6
88%
300-500
Nepal
4
CASA-1000, THE FIRST PHASE OF CASAREM, WOULD SUPPORT 1,300 MW
OF CLEAN ELECTRICITY TRADE BETWEEN CENTRAL ASIA (KYRGYZ REPUBLIC &
TAJIKISTAN) AND SOUTH ASIA (AFGHANISTAN & PAKISTAN)
5
PROJECT COMPONENTS

500 kV line Datka-Khudjand (477 km),
with Tajik network transferring Kyrgyz
exports to Sangtuda

Tajikistan Grid Strengthening

1300 MW AC-DC Convertor Station at
Sangtuda

750 km HVDC line Sangtuda-KabulPeshawar

300 MW Convertor Station at Kabul
(with both import & export
capability)

1300 MW DC-AC Convertor Station at
Peshawar
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A CHALLENGING BUT TRANSFORMATIVE PROJECT
Opportunities
Challenges
•A significant first step in realizing the CASA
Regional Electricity Market (CASAREM) vision.
•Would demonstrate landmark cooperation
between the Kyrgyz Republic, Tajikistan,
Pakistan, and Afghanistan.
•Provide economic benefits to all four
countries.
•Large investment at US$1 billion.
•Significant security and geopolitical
challenges.
•Involves four countries with constrained
commercial borrowing capacity.
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SIGNIFICANT BENEFITS TO ALL COUNTRIES
CASA-1000
Ensure a steady
source of revenue
from power
exports for
Tajikistan and
Kyrgyz Republic
Alleviate electricity
shortages in
Pakistan during
the peak summer
season
Establish
Afghanistan’s role
as a viable transit
country ,
enhancing growth
prospects
8
FEASIBILITY STUDY UPDATE CONFIRMS SOUNDNESS OF PROJECT
Feasibility Study Update
Sufficient quantities of
surplus electricity are
available in summers in
the Central Asian
Countries (the Kyrgyz
Republic and Tajikistan),
even under the
conservative assumption
of no new generation
projects.
Significant need for
electricity imports exists
in South Asia (particularly
Pakistan) to meet existing
and projected demand.
Differences in the cost of
electricity between the
importing and exporting
countries provides a
strong economic and
financial rationale to make
transmission investments
in order to support the
electricity trade.
9
ESTIMATES OF SUMMER SURPLUS BASED ON EXISTING
GENERATION PROJECTS ONLY
 Summer Surplus, in the base case scenario, has been estimated by using:
 Generation from existing plants only over the projection period; and
 The countries’ demand based on GDP growth and other relevant factors.
 Kyrgyz Republic and Tajikistan have been exporting power to neighbors (up to
2.5 TWh annually ) and spilling water from the reservoirs without any generation.
Combined Surplus (GWh) in the base case would reduce every year
10
FEASIBILITY STUDY DEMAND FORECAST HIGHER THAN
OTHER STUDIES ESTIMATES
Demand Projection
30
25
TWh
20
TAJ-CASA Feasibility Update
TAJ-ADB CA Power Master Plan
15
KYZ-CASA Feasibility Update
KYZ-ADB CA Power Master Plan
10
5
0
2010
2015
2020
2025
2030
CASA-1000 IS ECONOMICALLY VIABLE EVEN WITH
CONSERVATIVE ESTIMATES OF SURPLUS
 The base case economic analysis gives a
Benefits to Cost ratio of 1.34 and EIRR1 of 15.6% {excludes
benefits of GHG reduction and Telecom connectivity).
 Sensitivity:
New generation added enabling a constant yearly exportable
surplus of 4 TWh Benefits to Cost ratio of 2.11 and EIRR of 20.8%
 Sensitivity:
Opportunity cost of US$ 0.20/kWh for Pakistan - Benefits to
Cost ratio of 2.89 and EIRR of 31.9%
1- EIRR: Economic internal rate of return.
12
HUGE DIFFERENCE IN COST OF ELECTRICITY BETWEEN IMPORTING
AND EXPORTING COUNTRIES
Kyrgyz and Tajikistan:
• Current Cost < US¢ 3.0 /kWh
• Based on existing IPPs in Tajikistan.
Pakistan:
•the operating cost is US¢ 9.2/kWh and
•the cost including capacity charges is US¢ 13.2/kWh
•Fuel costs estimated based on the international crude price of USD 70-75 per barrel
PROJECT COST ESTIMATES AS PER THE FEASIBILITY STUDY
Kyrgyz Republic
US$ 200 million
Tajikistan
US$ 250 million
Afghanistan
US$ 300 million
Pakistan
US$ 200 million
Total
US$ 950 million
14
MAJOR MILESTONES
May 2006 - Invitation from the Government of Islamic Republic
of Pakistan for the CASA conference and first InterGovernmental MoU signed.
Aug 2008 - the MOU and the Inter-Governmental Agreement
(IGA) for CASA signed by all of the four countries
June 2011 - Pakistan and Afghanistan signed a joint declaration
calling for ‘speedy implementation of the CASA-1000 power
transmission line’
Sept 2011 - Bishkek Inter-Governmental Council (IGC) meeting
sought IFI help in speedy preparation of the CASA-1000 Project.
Nov 2011 - Country Working Groups (WG) established and the
first monthly Technical WG Meeting in Dushanbe
Dec-Feb 2012- Three subsequent meetings of the Country
Working Groups
15
PROJECT BUILDING BLOCKS – CURRENT STATUS
Techno-economic feasibility study completed, establishing the economic
viability of the project even without new power generation.
Initial Environmental and Social Assessment completed; supplementary
studies in advanced stages.
Financial Model prepared to help all countries build negotiations
strategy.
Legal and commercial Advisors for the IGC are in place; recruitment of
the IGC Executive Director is in progress.
Community benefit sharing design studies and project structure and
draft Power Purchase Agreements under preparation.
16
17
NEXT STEPS
Finalizing the Structure of the Project for its development and
operation (May 2012)
Security Assessment Study (June 2012)
Other supporting analysis {Tajik grid strengthening; Governance
Arrangements for Export Revenues, etc.} (August- 2012)
Bidding Documents and Concession Agreement (Oct 2012)
Finalizing Country Specific ESIA based on Consultations (Nov 2012)
Closing the Financing Gap (early 2013)
18
DONOR PARTICIPATION
The US State Department, AusAid, DFID, ADB, Islamic Development Bank,
USAID, IFC and the World Bank are among the donors who have
supported pre-preparation activities of the project to-date.
Donors who attended the Sept 2011 IGC Meeting in Bishkek include:
Islamic Development Bank, JICA, KfW, Eurasian Development Bank, DFID,
EBRD, IFC, USAID, US State Dept, Russia, China.
19
CASA-1000 PROJECT TIMELINE 2006-2013
Oct 2006
First Intergovernmental
MoU signed.
August 2008
Intergovernmental
Agreement Signed –
Intergovernmental Council
(IGC) created and Secretariat
established in Kabul
February 2011
Feasibility study update
completed.
June 2011
Draft ESIA delivered
September 2011
IGC meeting in Bishkek,
MOU signed
Nov 2011 – Dec 2011
Country Working Groups
were set up and monthly
WG meetings started
2006-2008
2009 - 2011
- Strengthen IGC, recruiting
Executive Director, advisors
- Hire country advisors and
start negotiation
- Completion of ESIA studies
and community consultation
- Prepare and issue bidding
documents
- Build the financing
plan/structure with firm
commitments
2012-2013
WORLD BANK ENGAGEMENT IN ENERGY AND WATER
•
•
•
Around US$ 3 billion in energy-water project investment commitments
Development Policy Operations (DPOs) to advance fundamental energy policy reforms at
the national level – Kyrgyz Republic and Tajikistan
Analytical, institutional development and investment support being provided under the
umbrella of the Central Asia Energy Water Development Program
Kyrgyz Republic
• Improving water
management systems
• Urgent rehabilitation
of generation assets,
electricity , gas and
heat distribution
• Winter energy support
• Policy Operations – for
energy development
strategy, tariff
reforms, and energy
governance
•
•
•
Tajikistan
Afghanistan
Pakistan
• Fergana valley water
resources & watershed
management
• Policy Operations –
budget control, tariff
and governance reforms
• Climate resiliency pilotAdaptation investments
• Energy loss reduction
• Winter energy
management support
• Power supply options
study; Assessment study
for proposed Rogun
HPP & Rehabilitation for
Nurek HPP
• Improve electricity
supply and access in
major towns on the
North East Power
system ;
• Improve revenue
collection and
distribution efficiency.
• Rehabilitate power
generation capacity
(e.g.Naghlu, Mahipar)
• Demand side energy
efficiency
• Irrigation
rehabilitation
• Reduce excessive
dependence on costly
imported oil by expanding
indigenous hydropower
(e.g. Tarbela) and
improving efficiency of
gas supply.
• Improving sector financial
condition and
strengthening the sector,
jointly with other
development partners.
• TA for capacity building
on all aspects of water
resource management
including feasibilities of
new hydro.
Regional Programs
Central Asia – South Asia (CASA) electricity exports
Analytic work with regional institutions – International Fund for Saving the Aral Sea (IFAS)
Central Asia Regional Economic Cooperation (CAREC)
Afghanistan-Pakistan trade facilitation and customs Reforms