OUTLINE TERMS OF REFERENCE FOR CONSULTANTS 1.

The consultants scope of work for this project preparatory technical assistance (PPTA) for Central Asia South Asia Regional lectricity !arket will ha"e two phases an# four tasks. Phase 1 will $e the preli%inary feasi$ility an# econo%ic "ia$ility stu#y. &ase# on the reco%%en#ations fro% this Phase the go"ern%ents will confir% that they woul# like to procee# with the Project. The four tasks are Task 1' the a"aila$ility an# cost of power supply options in Tajikistan an# the (yrgy) Repu$lic* Task +' the nee# for power in Pakistan an# the cost of alternati"es to i%ports to satisfy these nee#s, Afghanistans a$ility to take an# utili)e a##itional power* Task -' the trans%ission options* route* an# costs. .t will also i#entify* as part of the foregoing* the technical risks to the project an# the %anner $y which each %ay $e %itigate#. Task/' en"iron%ental an# social assess%ent will $e un#ertaken as input to the #eter%ination of the route an# #etaile# assess%ent will $e #one on the route chose. The legal* regulatory* financial risks are $eing e0a%ine# through the Co%%ercial Stu#y supporte# $y 1orl# &ank. The results of Phase 1 of the Co%%ercial Stu#y will set the institutional structure for the Project ( ntity). &ecause of the intertwining nature of the risks an# other co%ponents of the two stu#ies* the consultants for $oth tea%s will work together to reflect the fin#ings of each stu#y as well as to a"oi# #uplications. +. The Phase + feasi$ility stu#y for the Project (or su$projects) will co"er four %ajor areas (i) co%pliance with the Asian 2e"elop%ent &anks (A2&) safeguar# policies, (ii) econo%ic an# financial e"aluations, (iii) links $etween econo%ic growth* po"erty* an# the power sector, an# (i") technical project #esign. -. The consultants will work with the !ulti3Country 1orking 4roup (!C14) an# Project 2irector who will $e responsi$le for the o"erall coor#ination an# Project 2e"elop%ent 5nits (P25) in each country. 6or all %aterial an# software which co%es as a result of or use# in the con#ucting the PPTA the consultants will transfer knowle#ge an# pro"i#e han#s on training to the %e%$ers of the P25 an# others as re7ueste#. The consultants ter%s of reference will inclu#e* $ut not necessarily $e li%ite#* to the following. A. Engineering Aspects (international* +8 person3%onths, national* -- person3%onths) /. The engineering consultants will ha"e in3#epth knowle#ge of trans%ission lines an# ha"e e0perience in #ealing with #ifficult terrain. 0perience in cross3$or#er e0port of electricity woul# $e necessary. 9ne of the international engineering consultants will take on the role of tea% lea#er. A national consultant fro% each country will $e the #eputy tea% lea#er for that country. The national consultant shoul# $e an e0pert in the power sector of the country. The consultants outline ter%s of reference will inclu#e* $ut will not necessarily $e li%ite# to* the following tasks' Phase 1 (i) (ii) (iii) (i") (") ("i) ("ii) Re"iew the countries power syste%s an# their %i#ter% in"est%ent plans* an# their a$ility to %eet the re7uire%ents of the Project* i#entify re7uire%ents now %et in the e0isting plans. Pro"i#e regional wi#e interconnecte# si%ulation $ase# on short run a"oi#a$le costs* with an# without the long interconnect. Pro"i#e preli%inary project cost esti%ates for the routing options Pro"i#e preli%inary reco%%en#ation on routing an# #i"i#ing the Project into su$projects fro% a technical point of "iew Pro"i#e preli%inary reco%%en#ation of trans%ission technology to $e use# Preli%inary re"iew an# input to #e%an# an# supply analysis #rafte# $y econo%ist Preli%inary re"iew of countries in"est%ent plans (generation an# trans%ission) an# efficiency %easures for input into #e%an# supply forecast

Phase + (i) Perfor% #etaile# re"iew countries power syste%s an# their %i#ter% in"est%ent plans* an# their a$ility to %eet the re7uire%ents of the Project* i#entify re7uire%ents now %et in the e0isting plans using loa# flow analysis for each country on with an# without Project $asis. 6urther #etaile# analysis to #eter%ine whether the propose# Project pro"i#e the least cost solution, Pro"i#e #etaile# project cost esti%ates* separating foreign e0change an# local currency* prepare a list of %aterials* e7uip%ent* an# works necessary to i%ple%ent the su$projects* an#* $ase# on the result of the route sur"ey* prepare a trans%ission line profile an# tower spottings, Prepare project i%ple%entation an# procure%ent arrange%ents inclu#ing contract packaging in accor#ance with A2&s Guidelines on Procurement* an# a project i%ple%entation sche#ule, Prepare engineering #esigns an# technical specification of trans%ission lines* inclu#ing towers* con#uctors* insulators* groun# wires* etc. in accor#ance with rele"ant technical stan#ar#s* prepare engineering #esigns an# technical specification of su$stations in accor#ance with rele"ant technical stan#ar#s* prepare $ill of 7uantities for all %aterials re7uire#* $ase# on the engineering #esign* an# prepare #etaile# cost esti%ates for contract packages* specifying whether costs are in foreign e0change or local currency, an# Prepare #etaile# project i%ple%entation sche#ules showing anticipate# progress of works an# e0pen#itures for each contract package an# taking into account seasonal cli%atic con#itions* prepare engineering #rawings re7uire# for the preparation of $i##ing #ocu%ents* an# prepare $i##ing #ocu%ents for the su$projects following A2&s Guidelines for Procurement an# Standard Bidding Documents.

(ii) (iii)

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B. Financial Analysis (international, ! person"#ont$s% national, & person"#ont$s' :. The international financial analyst(s) will ha"e e0perience in power trans%ission projects an# $e fa%iliar with A2& re7uire%ents an# gui#elines. The consultants outline ter%s of reference will inclu#e* $ut will not necessarily $e li%ite# to* the following tasks' Phase 1 PR ;.!.<AR= C9ST ST.!AT S >in conjunction with the engineers sti%ate cost of e0port to Pakistan an# Afghanistan Cost at generation Cost of trans%ission to Pakistan fro% the (yrgy) Repu$lic an# Tajikistan Cost of trans%ission to Afghanistan fro% the (yrgy) Repu$lic an# Tajikistan 0plore possi$le 7ualification for car$on cre#its. Phase + .n accor#ance with Guidelines for the Financial Governance and Management of Investment Projects Financed by the Asian Development Ban (+??1)! the consultant will con#uct financial analysis of the propose# Project (or su$project) an# the rele"ant 5tilities or ntity that will e0ecute the Project (or su$project). This will inclu#e preparation of rele"ant sections of the report an# reco%%en#ation of the Presi#ent of A2&. The consultant will'
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Perfor% financial i%pact assess%ents of Project (or su$project) to #eter%ine financial rate of return in accor#ance with Guidelines for the Financial Governance and

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Management of Investment Projects Financed by the Asian Development Ban ! i#entify all risks to project re"enue an# costs an# con#uct rele"ant sensiti"ity analysis, Prepare an entire project cost esti%ate* separating foreign e0change an# local currency* inclu#ing physical an# price contingencies* interest #uring construction* co%%it%ent fee an# other financing charges, Prepare a financing plan for the Project (or su$project)* inclu#ing any propose# A2& len#ing* prospecti"e cofinancing* an# appropriate counterpart fun#s for local currency e0pen#itures, Re"iew the power tariff structure to #eter%ine whether the true cost of supply is a#e7uately reco"ere# an#@or su$si#i)e# through a transparent %echanis%* an# i#entify the specific sources an# projection of re"enue fro% the Project to ensure the financial "ia$ility of the Project* taking into account re#uctions in technical line losses an# i%pro"e%ents in operational efficiency, Re"iew the au#ite# an# unau#ite# financial state%ents of the 5tility to assess (a) historical financial perfor%ance* ($) retail tariff le"els* (c) capital structure* an# (#) whether the 5tility has sufficient internal fun#s to ensure sustaina$ility of ongoing operations (i.e.* to finance a reasona$le percentage of capital e0pen#itures an# to ser"ice e0isting #e$t)* an# re"iew recent au#ite# project accounts of the 5tility to #eter%ine whether proper accounting an# cost control are in place, Prepare an appen#i0 to the report an# reco%%en#ation of the Presi#ent $riefly su%%ari)ing past historical an# projecte# financial perfor%ance* which 1ill inclu#e 1?3 year pro for%a financial state%ents ($alance sheet* inco%e state%ent* state%ent of cash flows) for the 5tility* reco%%en# appropriate financial perfor%ance %easures an#@or ratios for the 5tility* an# assess co%pliance with such %easures an#@or ratios in pro for%a state%ents, an# Assess the 5tilitys financial %anage%ent capa$ilities* inclu#ing a re"iew of earlier A2& an# other len#er stu#ies of the 5tility* an# a re"iew of the "ountry Diagnostic Study of Accounting and Auditing prepare# for country* an# fro% these #ocu%ents an# the consultants own assess%ent* %ake reco%%en#ations for institutional strengthening of financial %anage%ent along with a reco%%en#e# ti%e3$oun# i%ple%entation plan.

C. Econo#ic E(al)ation (international* 1+ person3%onths, national* 8 person3%onths) 8. The consultant will ha"e an a#"ance# #egree in econo%ics* with e0pertise in #e"elop%ent econo%ics an# energy econo%ics* or closely relate# fiel#s. The consultant 1ill also ha"e e0perience in the #esign an# analysis of #e"elop%ent projects in general* an# power projects in particular. The consultants will utili)e e0isting infor%ation inclu#ing re"iew of e0isting esti%ates an# forecasts to the e0tent possi$le. The consultant will' Phase 1 (i) Task 1' R S95RC ASS SS! <T' A"aila$ility an# Cost of Power Supply 9ptions in Central Asia (Tajikistan an# (yrgy) Repu$lic) Assess the "olu%e of electricity that %ay $e a"aila$le for e0port fro% +??A to +?-? (annually* seasonally) forecast #o%estic electricity #e%an#* forecast supply of electricity Bscenarios with e0isting an# planne# a##itional generating capacity (ranke# in ter%s of feasi$ility)* planne# technical an# co%%ercial loss re#uction progra%s are i%ple%ente#* planne# reha$ilitation continue# of e0isting facilities. (ii) Task +' PR ;.!.<AR= 2 !A<2 ASS SS! <T' (1) incre%ental generation re7uire%ents in Pakistan* (+) the cost of such alternati"e generation an# (-)

Afghanistans a$ility to take a##itional power fro% the (yrgy) Repu$lic@Tajikistan > Pakistan link in the near3 an# longer3ter%. Assess the incre%ental generation re7uire%ents in Pakistan an# forecast supply of electricityBscenarios with e0isting an# planne# a##itional generating capacity (ranke# in ter%s of feasi$ility)* planne# technical an# co%%ercial loss re#uction progra%s are i%ple%ente#* planne# reha$ilitation continue# of e0isting facilities. Assess the cost of incre%ental generation an# #e%an#3si#e options in Pakistan. The costs to the syste% of these generation an# #e%an#3si#e options are to $e co%pare# to the #eli"ere# i%port costs. Assess AfghanistanCs physical (infrastructural) capa$ility to take a##itional power. The tapping of power shall $e through a suita$le su$station that is tentati"ely propose# to $e place# in the (a$ul region.

Phase + .n accor#ance with A2&s Guidelines for the #conomic Analysis of Projects* $andboo for Integrating %is Analysis in the #conomic Analysis of Projects* $andboo for Integrating Poverty Impact Assessment in the #conomic Analysis of Projects* an# 9perations !anual341 on cono%ic Analysis of Projects (+??-)* the consultant will un#ertake* $ut will not $e li%ite# to* the following tasks' (i) .n colla$oration with the power syste% engineers* re"iew rele"ant #ata an# reports relating to power #e%an# forecast of the i%porting country. Con#uct a -?3year loa# #e%an# forecast rele"ant to the propose# project in ter%s of resi#ential* co%%ercial* in#ustrial* agriculture* pu$lic ser"ices* an# other sectors using econo%etric or other techni7ues that incorporate the price of electricity. .n colla$oration with the engineers* re"iew the latest generation an# long3ter% trans%ission e0pansion plans of the i%porter. .n colla$oration with the power syste% engineers* un#ertake a least3cost analysis to #eter%ine the $est alternati"e $ase# on #ifferent loa# forecasts* one of which is $ase# on socially efficient electricity prices. Calculate the econo%ic internal rate of return ( .RR) for each project section* an# the project as a whole. 5n#ertake sensiti"ity analysis $y i#entifying the %ost critical factors an# #eter%ine the i%pact of such factors on the .RR* inclu#ing "arying project cost an# $enefits* i%ple%entation perio#* power #e%an#* an# co%$inations of these factors. Calculate switching "alues. Con#uct a risk analysis (using the !onte Carlo %etho#) $y consi#ering the possi$le "alues for key "aria$les $ase# on past recor#s* an# their occurrence pro$a$ility* in accor#ance with A2&s Dan#$ook for .ntegrating Risk Analysis in the cono%ic Analysis of Projects. .n colla$oration with rele"ant specialists* prepare a project fra%ework in the A2& for%at* inclu#ing %onitoring in#icators that will $e use# to assess project perfor%ance* an# $aseline an# target "alues for the selecte# in#icators.

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*. En(iron#ental Aspects (international* 8 person3%onths, national* 1E person3%onths) 8. The consultants outline ter%s of reference will inclu#e* $ut will not necessarily $e li%ite# to* the following tasks' Phase 1

Perfor% preli%inary assess%ent of the en"iron%ental i%pact on the route options $eing consi#ere#. Phase + .n accor#ance with the rele"ant gui#elines an# policies for en"iron%ental assess%ent* the consultants will un#ertake the following tasks* inclu#ing preparation of rele"ant sections of the report an# reco%%en#ation of the Presi#ent as outline# $elow' (i) Con#uct an initial en"iron%ental e0a%ination for the trans%ission line an# su$stations* taking into account the likely i%pacts associate# with their locations* #esigns* an# construction acti"ities* as well as the long3ter% i%pacts #uring operation* inclu#ing i#entification of en"iron%ental issues fro% acti"ities #irectly in#uce# $y the Project, &ase# on the re"iew of rapi# an# co%prehensi"e en"iron%ental i%pact assess%ent reports an# en"iron%ental %anage%ent plan prepare# for the entire projects inclu#ing policy* pro"i#e the rele"ant go"ern%ent entity an# utility with specific an# #etaile# reco%%en#ations for re"isions an#@or a##itional stu#ies* if nee#e#* to %ake the en"iron%ental assess%ents an# .A confor% to A2&s re7uire%ents $ase# on &perations Manual F'(BP and F'(&P (+??-)* #nvironment Policy (+??+) an# #nvironmental Assessment Guidelines (+??-)! an# consi#er lessons learne# fro% past an# ongoing trans%ission finance# $y A2& an# other international financial institutions, Assess whether the propose# trans%ission co%ponents are within the protecte# areas an#* if they lie within such )ones* #eter%ine the regulatory proce#ures an# protection %easures nee#e# to o$tain en"iron%ental an# forestry clearance fro% the rele"ant national an# pro"incial go"ern%ent agencies an# further assess the a#e7uacy of the .A report an# en"iron%ental %anage%ent plan ( !P) with specific reference to ri"erine ecology an# suggest a##itional %easures* if the !P is foun# to $e ina#e7uate, nsure that necessary %itigation %easures are in place* assess the a#e7uacy of the cost esti%ates for the propose# en"iron%ental %anage%ent plans* an# re"iew the en"iron%ental %anage%ent capa$ility of %anage%ent units of the utilities an# reco%%en# institutional strengthening %easures, Prepare a su%%ary .A for the trans%ission an# the su$stations in accor#ance with A2&s &perations Manual 61@&P an# 61@9P (+??-)* #nvironment Policy (+??+)* #nvironmental Assessment Guidelines (+??-)* an# any applica$le proce#ures or gui#elines for en"iron%ental assess%ent re7uire# $y the 4o"ern%ent, an# ensure that co%ponents such as trans%ission lines an# access roa#s specifically for the project %ust ha"e en"iron%ental assess%ents e"en if they are not finance# $y A2&, Reco%%en# appropriate en"iron%ental %itigation %easures for i#entifie# significant i%pacts an# %onitoring plans to a##ress these i%pacts, an# assess the en"iron%ental $enefits of the propose# acti"ities an# any capacitystrengthening %easures that %ay $e nee#e# for the i%ple%entation of en"iron%ental %anage%ent an# %onitoring plans* an# .f the . reco%%en#s a full .A* con#uct the .A an# prepare the report an# its su%%ary* inclu#ing an en"iron%ental %anage%ent plan to i%ple%ent %itigation %easures.

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E. In(ol)ntary Resettle#ent an+ In+igeno)s ,eoples, (international* 8 person3%onths, national* 1E person3%onths) A. The consultants will' (i) re"iew national laws an# policies on lan# ac7uisition an# in"oluntary resettle%ent to "erify their a#e7uacy an# consistency with A2&Cs policy on Involuntary %esettlement (1FF:)! an# Policy on Indigenous People (1FFE)* an#* if gaps are foun#* reco%%en#

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%easures to $ri#ge the%* an# assist the go"ern%ents an# utilities to #esigning the Project so as to %ini%i)e the resettle%ent effects, in accor#ance with all rele"ant policies of A2& an# in particular with A2&s policy on Involuntary %esettlement (1FF:)* &perations Manual F) on Involuntary %esettlement (+??8) an# any applica$le proce#ures or gui#elines re7uire# $y the 4o"ern%ent* prepare an# su$%it' (i) a Resettle%ent 6ra%ework (a.k.a. Co%pensation Policy 6ra%ework an# Proce#ural 4ui#elines) for each of the countries crosse# $y the trans%ission line an# (ii) #raft lan# ac7uisition an# resettle%ent plans (;ARP) as nee# to A2& for co%%ents an# appro"al* which shoul# su$se7uently $e incorporate# in final ;ARP(s) agree# with the authorities, i#entify an# prepare socioecono%ic profiles of the Project3affecte# co%%unities in the project areas in ter%s of househol# si)es* #e%ographic tren#s* inco%e sources an# le"els* occupations* socioecono%ic con#itions* social ser"ice infrastructure* an# social organi)ations* in accor#ance with rele"ant A2& gui#elines an# pu$lications an# the re7uire%ents of Pakistan* inclu#e gen#er an# local ethnic %inority profiles* assess the nee# for an in#igenous peoples #e"elop%ent plan (.P2P) an#@or an in#igenous peoples #e"elop%ent fra%ework (.P26) $ase# on A2&s &perations Manual Section F*(&P (+??8)* an# con#uct further sur"eys as necessary, Re"iew the institutional capacity an# resources a"aila$le at the country le"el to super"ise the i%ple%entation of .P2Ps@.P26s, un#ertake* $ase# on a #esign #etaile# enough to clearly i#entify trans%ission line route an# i%pacts corri#or* towers locations an# tower $ase areas* a full census an# in"entory of lost assets (loss of ho%es an# agricultural an# other lan#s* or loss of access to current inco%e3generating acti"ities* inclu#ing i%pacts cause# $y per%anent or te%porary ac7uisition) of affecte# people an# a $aseline socioecono%ic sur"ey of the affecte# population* #eter%ine the scope an# %agnitu#e of likely resettle%ent effects* an# list likely losses of househol#s* agricultural lan#s* $usiness an# inco%e opportunities* as well as affecte# co%%unal assets an# pu$lic $uil#ings* an# i#entify an# enu%erate all people likely to $e affecte#* inclu#ing i%pacts on the poor* in#igenous people* ethnic %inorities* an# other "ulnera$le groups* inclu#ing wo%en* through a sur"ey or census an# asset in"entory that i#entifies all types of losses, in consultation with go"ern%ents an# utilities* #e"elop an entitle%ent %atri0* on the $asis of the socioecono%ic sur"ey* an# in"entory of losses that will #eter%ine the a%ount of co%pensation for a set of i#entifie# losses an# other assistance to ensure that any affecte# househol#s will not $e any worse off with the project than without the project in accor#ance with A2&s .n"oluntary Resettle%ent Policy (1FF:) an# &perations Manual F) on Involuntary %esettlement (+??8)! $andboo on Poverty and Social Analysis (+??+)+ $andboo on %esettlement, A Guide to Good Practice (1FFE) an# Gender "hec list, %esettlement (+??1). Particular attention shall $e gi"en to in#igenous peoples* as #efine# $y A2&s Policy on Indigenous Peoples (1FFE)* an# other "ulnera$le groups* inclu#ing poor househol#s an# wo%en, since the Project is likely to in"ol"e significant resettle%ent* prepare a resettle%ent plan with full stakehol#er participation* inclu#ing participation of 4o"ern%ent an# utility* that shoul# $e appropriate for the Pakistan conte0t an# still %eet A2& policy re7uire%ents* carry out consultations with affecte# persons an# co%%unity3$ase# organi)ations to ensure that all affecte# persons ha"e $een fully infor%e# of entitle%ents through the consultati"e processes initiate# $y 4o"ern%ent an# utility* ensure that co%%unities an# #isplace# persons un#erstan# the project* its i%pacts an# the responsi$ilities of parties concerne#, analy)e an# confir% the following aspects (at national an# local le"els) that will apply to lan# ac7uisition an# resettle%ent in the Project area' (a) laws an# regulations* inclu#ing local practices* ($) $u#getary processes (tentati"e agree%ent fro% concerne#

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authorities on pro"ision of outlays necessary for lan# ac7uisition an# resettle%ent)* an# (c) rele"ant a#%inistrati"e arrange%ents an# re7uire%ents, i#entify an in#epen#ent %onitoring an# e"aluation %echanis% (to $e incorporate# in the project structure) to assist 4o"ern%ent an# utility to prepare a pu$lic consultation an# #isclosure plan to ensure full stakehol#er consultation an# #isclosure of the resettle%ent plan an# any rele"ant infor%ation to affecte# persons #uring resettle%ent planning an# i%ple%entation, an# on the $asis of the socioecono%ic sur"ey* i#entify i%pacts on tri$al groups* #eter%ine the nee# for specific in#igenous peoples (.P) action consistent with A2&s policies an# proce#ures on .n#igenous Peoples $eing as it %ay' (a) .P action to $e incorporate# in the ;ARP(s) or ($) a stan#3alone .P #e"elop%ent plan (.P2P) inclusi"e of a specific $u#get an# sche#ule. .n for%ulating #e"elop%ent inter"entions* .Ps will $e consulte# an# pro"i#e# opportunities for participation to ensure their nee#s* priorities an# preferences are a#e7uately #ealt with in #e"elop%ent plans.

F. Reporting an+ -or.s$op Re/)ire#ents E. The consultants will prepare inception report (within -? #ays)* Phase 1 Report (within -.: %onths)* interi%* #raft final* an# final reports. !eetings in"ol"ing !C14* A2& an# the consultants will $e hel# after the su$%ission of the inception* Phase 1 report* interi%* an# #raft final reports. 9ther stakehol#ers will $e in"ite# to atten# as nee#e#. The consultants will prepare status reports (at least on %onthly $asis) for the specific scope of work* highlighting issues that coul# $eco%e critical for the ti%ely co%pletion of the PPTA an# that re7uire attention fro% !C14 an#@or A2&. A##itional %ilestone reports will $e su$%itte# as an# when co%ponents of the T9R are co%plete#. 6or ease of reference an# ti%ing* reports will $e su$%itte# $y country or #i"i#e# into country sections where appropriate. The consultants will arrange for other workshops an# on3the3jo$ training for !C14 staff as re7uire#. .t is e0pecte# that #etaile# reports an# position papers will $e re7uire# for each area of the PPTA* an# these reports will for% part of the interi% an# #raft final reports* $ut shoul# $e #istri$ute# to all concerne# i%%e#iately they ha"e $een co%plete#.