 A technical assistance by the Asian Development Bank for preparing a multi tranche financing facility (MFF)
VisionRI has been retained by the Bank to provide this technical assistance (TA 7253-AZE) to the Central Asian country, Azerbaijan. The country has established a power sector capable of providing essential power supply service to all domestic consumers and the network was integrated with neighbouring countries, an extended period of under investment and limited maintenance has resulted in significant deterioration in the quality of the sector's infrastructure, mainly reflecting on unreliable and inadequate power supply and high losses of the transmission and distribution networks.
Some of the key challenges faced by the Government in order to establish a sustainable and financially viable power sector include the need:
• to develop a power sector road map and optimized development master plan, and identify the sector development priorities and policies;
• to increase investment in the infrastructure and secure adequate funding;
• to improve financial performance and governance of power utility, including transparency and accountability through institutional restructuring, commercialization and private sector participation; and
• to improve legislative and regulatory framework with market principles and establish financial discipline.
The present TA is aimed at preparing the MFF for the Power Distribution Development Investment Program. The process of preparing the MFF is structured in two phases. First phase of the TA is to cover a detailed sector assessment encompassing preparation of a power distribution sector road map and investment program, assessment of capacity building needs and preparation of the MFF program and selection of sub projects for Tranche 1 while second phase involves the requisite due diligence assessment (as per ADB’s procedures and guidelines) such as engineering design, economic evaluation, financial analysis and financial management review, environmental assessment, and resettlement, indigenous peoples and social assessment of candidate sub projects under the Tranche 1 of MFF.
The envisaged outcome of the program is improved power system that provides reliable and adequate electricity to all consumers through development of distribution facilities. The output of the TA is to include (i) a power sector assessment; (ii) a distribution sector roadmap with updated investment and capacity development program, (iii) an MFF investment program; (iv) technical design and due diligence assessment for selected Tranche 1 under MFF financing; (v) financial and economic analysis, and financial management assessment, and (vi) social safeguard framework, and social and poverty assessment.
Tags: Azerbaijan : Power Distribution Investment Program - Multi tranche financing facility (MFF), Power Sector Road Map
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