ECO / IDB Project Document 

Power Interconnection

Technical Assistance Agreement (GRANT)

 TECHNICAL ASSISTANCE AGREEMENT (GRANT)

 BETWEEN

 THE ISLAMIC DEVELOPMENT BANK (IDB)

 AND

 ECONOMIC CO-OPERATION ORGANIZATION (ECO)

C O N C E R N I NG

A FEASIBILITY STUDY ON POWER INTERCONNECTION OF THE ECO MEMBER STATES

TECHNICAL ASSISTANCE AGREEMENT (GRANT)

   AGREEMENT dated________/__________/1422H, corresponding to__________/________2001G, between the Economic Co-operation Organization  represented by its Secretariat (hereinafter referred to as the “ECO”) and the Islamic Development Bank (hereinafter called the “Bank”).

   WHEREAS, the ECO has requested the Bank to provide Technical Assistance to finance the Feasibility Study on power Interconnection of the Economic Co-operation Organization Member States (hereinafter called “the Study”), as indicated in Appendix No.(1) of this Agreement;

   WHEREAS the Bank has agreed to provide the Technical Assistance upon the terms and conditions hereinafter set forth;

   NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE – I

THE GRANT AMOUNT

Section –1.01

            The Bank shall make available from the Wakf Fund to the ECO a Technical Assistance Grant in an amount not exceeding ID.290,000/- (Islamic Dinars Two Hundred and Ninety Thousand) only (approximately equivalent to US $400,000/-) (United States Dollars Four Hundred Thousand) only.

ARTICLE – II 

WITHDRAWAL AND USE OF THE PROCEEDS OF THE GRANT AMOUNT

Section –2.01

The Grant amount shall be withdrawn in conformity with the Disbursement Procedures of the Bank.

Section –2.02

The proceeds of the Grant shall be used solely to cover the foreign cost of the Study .

Section –2.03               

Date of Requesting First Disbursement.

            If prior to 30/9/2002, or such later date as shall be agreed between the ECO and the Bank, the ECO has not submitted a request to the Bank to make the first disbursement, the Bank may terminate this Agreement upon due notice thereof to the ECO.

Section –2.04 

Closing Date

            If any part of the Grant amount is not withdrawn by 31/12/2004 or such later date as shall be agreed upon between the ECO and the Bank, the Bank may, after consultation with the ECO, cancel the part which has not been withdrawn.

ARTICLE – III 

EXECUTION OF THE STUDY

Section –3.01

            In order to assist the ECO in carrying out the Study described in Appendix No.(I), the ECO in consultation with the Bank shall, in accordance with the procedures of the Bank, select and contract the services of a Consultant.

Section –3.02

            The Consultant shall conduct the Study in accordance with the terms of  reference indicated in Appendix No.(2) of this Agreement.  The said terms of reference may be amended by written agreement between the ECO and the Bank.

Section –3.03

            The ECO shall associate the bank in the negotiations with the selected Consultant, the outcome of which shall be subject to the final approval of the ECO.

ARTICLE – IV 

OBLIGATIONS OF THE ECO

Section –4.01

            The ECO shall cooperate with the Bank and the Consultant to ensure that the Study is carried out promptly and efficiently in conformity with appropriate financial and administrative practices, and, for that purpose, shall make available to the Consultant all existing information relating to the Study.  The ECO shall make available to the Bank regular periodical reports indicating the progress achieved by the Consultant.

Section –4.02

            For the purpose of the Study the ECO will provide the Consultant, free of charge, with such staff, equipment and other services or facilities which are normally required for the execution thereof as will more specifically be set forth in the terms of reference.

Section –4.03 

            The ECO shall cause to provide available qualified local counterpart staff on full-time basis to cooperate with and assist the Consultant in carrying out the Study.

Section –4.04

            The ECO shall make provisions in its budget for the funds needed to meet the local currency cost of the Study and shall also finance any cost overruns that may occur during the execution thereof.

Section –4.05

            The ECO shall cause the Consultant to furnish to the Bank copies of the documents prepared by them for the Study, including reports and drafts thereof, plans, designs, specifications, work schedules and estimates of costs and other relevant information in such number and form as the Bank shall reasonably request.

Section –4.06

            The ECO undertakes to ensure, through requests to the concerned member states, free access to the accredited representatives of the Bank to all land, premises and structures connected with the execution of the Study.

Section –4.07

            The ECO shall maintain or cause to be maintained accounts and records adequate to show the use of the proceeds of the Grant and the progress of the Study (including the cost  thereof).

Section –4.08

            The ECO shall furnish the Bank with quarterly reports detailing progress made, problems encountered, action taken, and other details as the Bank may from time to time request.

Section –4.09

            The ECO shall submit to the Bank within 180 (One Hundred and Eighty) days of the Consultant’s final report, a report evaluating the results of the Technical Assistance provided by the Bank in accordance with this Agreement and the extent to which the objective of the Study has been accomplished.

Section –4.10

            The ECO shall promptly inform the Bank of any condition which interferes with or threatens to interfere with the accomplishment of the purposes of the Study, the maintenance of the service thereof or the performance of its obligations under this Agreement.

Section –4.11

(a) Any taxes or duties which may be levied on the Consultant shall be imputed to the local cost of the Project and shall be financed by the Governments of the ECO member states.

 

(b) The ECO undertakes to inform the Consultant prior to submission of his financial proposal of all taxes and duties which may be levied in the ECO member states.

Section –4.12

            The ECO undertakes to request its Member States to:

(a)  ensure that the Consultant shall be exempted from taxes, customs and other duties  on equipment, materials or supplies brought into the territories of the ECO Member States for the purpose of carrying out the Study and which, after having been brought into such territories, will subsequently be withdrawn therefrom after the completion of the study;

(b)  facilitate prompt clearance through customs of any equipment, materials and supplies required for the Study and of the personal effects of the Consultant and his personnel;

(c)  ensure that the Consultant and his personnel are promptly provided with any necessary entry and exit visas, residence permits, foreign exchange permits and travel documents required for their stay  during the study in the ECO member states, and 

(d)  ensure that all necessary permits and authorizations for the carrying out of the Study are issued  without delay.

ARTICLE – V  

REPORTS AND OTHER MATTERS

Section –5.01

            The ECO and the Bank shall, from time to time, at the request of either party, exchange views on the Technical Assistance, and consult on any report prepared by the Consultant and the implementation of  any recommendations made in any report.

Section –5.02

            The Bank may use any reports prepared by the Consultant for any purpose which the Bank  may consider appropriate but those reports may not be made public except by agreement between the ECO and the Bank.

Section –5.03

            The provision of assistance by the Bank under this Agreement does not commit the Bank to extend financial or further technical assistance to the ECO or to any of its member Government with respect to the implementation of any recommendations of the Consultant.

ARTICLE – VI  

CO-ORDINATION

Section –6.01

            The ECO hereby appoints the Secretary General of ECO to be directly responsible for fulfilling the obligations incumbent on the ECO by virtue of this Agreement and the Director for Energy, Minerals and Environment at ECO’s Secretariat as focal point coordinator and liaison to deal with the Consultant and the Bank. 

ARTICLE – VII  

NOTIFICATION

Section –7.01

            Any notification in writing from one of the parties to another will be deemed to have been properly communicated if it has been conveyed by any means appropriate to the circumstances or transmitted by cable or mail or telex  to one of the following addresses:

For the Islamic Development Bank:

Alternate address for cablegrams and radiograms:

For the Economic Co-operation Organization (ECO):

IN WITNESS WHEREOF, the authorized representatives of the Parties hereto have signed this Agreement on the date indicated in its Preamble.

Appendix No. (1) 

Description for the Study

            The objective of the project is to study the feasibility of interconnecting existing power networks of 10 (ten) ECO (Economic Co-operation Organization) countries.  A group of consultants from the IDB member countries will prepare a feasibility study of this integrated power project which shall include:

1.       A computer simulation analysis of the existing power networks of the ten ECO countries; 

2.       A report of long term new generation and transmission expansion projects of the ECO countries, as available; 

3.       Project feasibility reports for the large size transmission line projects to help ECO governments in negotiations and to raise funds; 

4.       Feasibility reports for consideration of IDB of following five  projects: 

i-                    Expansion of existing 150KV Kizyl Arvat (Turkmenistan) – Alliabad (Iran) line; 

ii-                   New 154KV Zahedan (Iran) – Kalat (Pakistan) transmission line. 

iii-                  The second transmission line between Imishly (Azerbaijan) and Parsabad (Iran). 

iv-                  Construction of 132 kV line between Sarakhs (Iran) – Maru (Turkmenistan). 

v-                   Construction of 132 kV line between Mirjaveh (Iran) – Mand (Pakistan). 

5.      A power trade strategy, including Draft Legal Agreements and analysis of price structure to facilitate the necessary trade between CIS and other ECO countries

Appendix No.(2)

Terms  of Reference for Feasibility Study on Interconnection 

of the ECO Member States Power Systems 

A. Background

Economic Cooperation Organization (ECO) is an intergovernmental regional cooperation organization devoted to the socio-economic development of its member states. The member states of ECO are: Islamic State of Afghanistan, Azerbaijan Republic, Islamic Republic of Iran, Republic of Kazakhstan, Kyrgyz Republic, Islamic Republic of Pakistan, Republic of Tajikistan, Republic of Turkey, Turkmenistan and Republic of Uzbekistan.

The ECO countries seeking regional cooperation in all possible fields, including the field of electrical energy.

Establishment of a joint power system among ECO countries was adopted in the Quetta Plan of Action on 6-7 February 1993. During the 4^th Regional Planning Council (RPC) Meeting (15-18 January 1994) the delegation of Azerbaijan Republic proposed the coordination of the functioning of energy systems of ECO countries to identify technical proposals for ensuring the parallel operation of energy systems with a view to use the existing power capacity(ies) collectively. In the para 15 of Ashgabat Declaration (14 May 1997), this issue was endorsed.

In pursuance of Ashgabat Declaration (which was farther emphasized by Almaty Declaration -11 May 1998), this issue was discussed in the 1^st Ad-Hoc Committee Meeting on Power (12-13 November 1997) and the meeting concluded that the condition of existing and future power generation systems of ECO Member States should be defined and a feasibility study should also be carried out. A questionnaire was circulated to collect the necessary information/data and a Specialized Experts Task Group was established to deal with this issue.

The First Meeting of Specialized Experts Task Group (1^st SETG) on Power (Ashgabat, 25-26 February 1998) decided that a preliminary study should be carried out to analyse the current and future situation of ECO Member States power systems and conception of their unification. Turkey took the responsibility of preparing this study and completed this study with the available data. The said report dated 30 December 1998 was presented at the 2^nd SETG meeting (Ankara 30 November- December 1998).

The findings of the referred study shows that: energy situation of ECO countries presents a very good opportunity for electrical interconnections considering the diversification of primary resources, differences in load characteristics and time among the member countries.

Despite the lack of information on some ECO power systems the derived results in the aforementioned study have justified the savings in new capacities by reserve sharing. The savings in operational costs may also lead to very interesting results. By considering the positive results of this study, 2^nd SETG meeting (Ankara, 30th November-3rd December 1998), concluded that it is worth to carry out a feasibility study on the interconnection of ECO power systems.

B. Objectives

B.l.   The main purpose of the feasibility study is to find out the possibilities of interconnection of ECO countries power systems, considering the existing situation of the power systems of member states, the prospective for the future, bilateral or multilateral interconnection projects, already under progress among member states, and the existing and planned interconnections of member states with non-ECO member power systems.

B.2.   The study will identify the system configuration enabling the secure, stable and reliable exchange of bulk amounts of power and the necessary reinforcements of the above mentioned systems, including assessment of necessary investment and cost/benefit analyses.

C. Organization of the Study

C.1      To ensure full cooperation and sound technology transfer, the participation of the technical experts from the related countries is essential.

C.2. ECO Secretariat and IDB will be responsible for evaluation of the bids to select the consultant. All data collection, verification, simulation of the systems, relations between consultants and the respective authorities, evaluation of the report prepared by the consultants will be the responsibility of ECO Secretariat in cooperation with ECO Member Countries Power Companies.  The ECO Secretariat will act as the Secretariat for the project.

C.3.   The study will include:

-   Power system investigation, data collection and verification.

-   The simulation of power systems.

-    Network analysis and technical studies of joint interconnectin system of all ECO countries.

-    Economic analysis and cost estimates of  possible alternatives.

D. Scope

D.1.   The study will contain a descriptive part dealing with the current situation and strategy of development considered in the respective power systems, completed by the necessary technical and economic input data for achieving objectives as decided under para "B".

D.2.   The Parties will supply the long-term electric energy and power balance of their power systems for the selected time horizon.

D.3.   The study will include: load-flow analysis in normal and maintenance operational conditions, contingency analysis utilizing the technical security criterion of single contingency (n-1), short-circuit current calculations, transient stability analysis, considering anti-emergency automatic devices. 

D.4.   The analysis will be related to the time horizon of 2006, including both winter and summer (light and heavy) load operating conditions.

D.5.  The study will cover the 1150 kV, 500 kV, 400 kV, 330 kV, 230 kV and 220 kV networks of the power systems of all the countries involved. In case more detailed study becomes necessary  or the exactness of the study requires the simulation of parts of 154 kV, 132 kV and 110 kV (or sub-transmission) voltage level networks, then these parts of the system shall be considered. The power systems of the other neighbouring interconnected countries will be simulated up to the level that will ensure the correctness of the analyses.

D.6.  The economic part will include the investments needed for implementation of the interconnection of the ECO Member States power systems. The study will also identify the costs of reinforcements in the interconnection lines and internal systems in order to ensure reliable energy exchanges and transits in all involved power systems. The study further will estimate the feasibility of power exchanges and transits through the ECO member countries power systems.

D.7.   The study shall cover technical as well as economical evaluation of alternative interconnection schemes with different exchange capacities and voltage levels.   The study shall identify the priorities of the projects in order to approach the final goal of ECO countries' interconnection of power systems.

E. Detailed Technical Specifications

Long Term Electric Energy Balance

E.1.      The long term electric energy & power balance for the power systems of the ECO countries will be provided by each ECO country. This analysis will show how the demand in the horizon 2006-2011 will be covered by the production, taking into account the necessary reserves of production capacity. Monthly energy balance & balance of power for the characteristic monthly maximum load conditions will be given for the above mentioned period. 

Load Flow and Voltage Level Calculations

E.2.   Analysis of load flow and voltage levels in the case that there is zero exchange through tie-lines applying the (n-1) security criterion and defining minimum necessary load shedding in case of tripping of the largest generating unit in each of the ECO Member Country power systems.

E.3.   Analysis of load flow and voltage levels is to determine the maximum possible power transfer capacity.

Short Circuit Calculations

E.4.   For the winter and summer maximum load regime of 2006,  the calculation of three-phase and phase to ground short circuit currents and powers in all interconnection buses and in the most critical ones adjacent to them is to be done with the purpose of checking whether the implementation of interconnection of the above mentioned power systems causes the increase of short circuit currents and powers at levels to endanger the installed equipment in those buses.

Transient Stability Calculations

E.5.  The transient stability analysis shall be carried out for winter and summer load conditions for the year 2006 to check reliable operation of the all interconnected systems.

Switching and other Voltage Study

E.6. The energization procedure and switching over voltages along the new interconnection lines shall be studied for minimum and maximum load conditions.

F. Other Requirements

F.I.   The UCTE regulations for the operation of interconnected systems may be considered for ECO Interconnected power system.

F.2.   Conditions for Economic Analysis

            The consultant will specify the following parameters to be used in the study and these figures shall be approved by the SETG:

- Conditions of Loans for investments.

- Unit prices of investment for equipment, substations, transmission lines and power plants.

- Cost sharing principles,

- Wheeling charge tariff.

- Fixed and variable operating costs and maintenance costs of generation and transmission facilities.

Data Sets

F.3.   Each Member States electric company is obliged to provide all necessary data for the realization of the study. All data provided will be considered confidential, will be used only for the study purposes and cannot be given to third parties without the written permission of the electricity company that had provided them. The complete set of data of the alternatives will be provided to ECO Secretariat.

G. Time Schedule

The study shall be completed within 18 months, which starts with the advance payment date.

H. The Cost of Consultant Engineer

Upto US $400,000/-

J. Evaluation Criteria

The evaluation criteria will be defined as per guidelines.