Technical Assistance Report

Project Number: 53058-001 Transaction Technical Assistance Facility (F-TRTA) June 2019

Islamic Republic of Pakistan: Preparing Sustainable

Energy Projects

This document is being disclosed to the public in accordance with ADB’s Access to Information Policy.

CURRENCY EQUIVALENTS (as of 7 June 2019)

Currency Unit - Pakistan Rupee (PKR)

PKR1.00 - $0.00676 $1.00 - PKR147.85

ABBREVIATIONS

ADB – Asian Development Bank DISCOs – power distribution companies F-TRTA – transaction technical assistance facility LNG – liquefied natural gas NTDC – National Transmission & Despatch Company SPS – safeguard policy statement TA – technical assistance WAPDA – Water and Power Development Authority

NOTES

(i) The fiscal year (FY) of the Government of Pakistan ends on 30 June. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2018 ends on 30 June 2018.

(ii) In this report, "$" refers to United States dollars.

Vice-President Shixin Chen, Operations 1 Director General Werner Liepach, Central and West Asia Department (CWRD) Director Ashok Bhargava, Energy Division, CWRD Team leader Asad Aleem, Principal Energy Specialist, CWRD Team members Isabel Borcena, Senior Operations Assistant, CWRD Ehtesham Khattak, Senior Projects Officer (Energy), CWRD Khurram Shahzad, Associate Project Analyst, CWRD Peer reviewer Toru Ito, Senior Energy Specialist (Gas), Sustainable Development and

Climate Change Department In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS Page

TRANSACTION TECHNICAL ASSISTANCE FACILITY AT A GLANCE

I. THE TECHNICAL ASSISTANCE FACILITY 1

A. Justification 1

B. Outputs and Activities 4

C. Cost and Financing 5

D. Implementation Arrangements 5

II. THE PRESIDENT'S DECISION 6

APPENDIXES

1. Cost Estimates and Financing Plan 7

2. Projects under Technical Assistance Facility 8

3. List of Linked Documents 11

Project Classification Information Status: Complete

TRANSACTION TECHNICAL ASSISTANCE AT A GLANCE

Source: Asian Development BankThis document must only be generated in eOps. 10052019191430111408 Generated Date: 14-May-2019 9:40:35 AM

1. Basic Data Project Number: 53058-001Project Name Preparing Sustainable Energy Projects Department/Division CWRD/CWEN

Nature of Activity Project Preparation Executing Agency Ministry of Energy (Power Division), Ministry of Finance, Ministry of Water Resources

Modality Facility

Country Pakistan

2. Sector Subsector(s) ADB Financing ($ million)Energy Electricity transmission and distribution 0.625

Energy sector development and institutional reform 0.625Energy utility services 0.625Oil and gas transmission and distribution 0.625

Total 2.50qq

3. Strategic Agenda Subcomponents Climate Change InformationInclusive economicgrowth (IEG)

Pillar 2: Access to economic opportunities, including jobs, made more inclusive

Environmentallysustainable growth(ESG)

Global and regional transboundary environmental concerns

Climate Change impact on the Project Low

ADB Financing

Mitigation ($ million) 0.50

qq

4. Drivers of Change Components Gender Equity and MainstreamingGovernance andcapacity development(GCD)

Institutional development

Knowledge solutions(KNS)

Knowledge sharing activities

Partnerships (PAR) Commercial cofinancingPrivate Sector

Private sectordevelopment (PSD)

Conducive policy and institutional environment

Some gender elements (SGE)

qq

5. Poverty and SDG Targeting Location ImpactGeographic TargetingHousehold TargetingGeneral Intervention on PovertySDG Targeting

YesNoNo

Yes

Nation-wide High

SDG Goals SDG7, SDG9, SDG13Qq

6. Risk Categorization ComplexQq

7. Safeguard Categorization Safeguard Policy Statement does not applyqq

8. Financing

Modality and Sources Amount ($ million)

ADB 2.50 Transaction technical assistance: Technical Assistance Special Fund 2.50

Cofinancing 0.00 None 0.00

Counterpart 0.00 None 0.00

Total 2.50

Currency of ADB Financing: USD q

I. THE TECHNICAL ASSISTANCE FACILITY A. Justification 1. The Asian Development Bank (ADB), as the anchor development partner of the Government of Pakistan in the energy sector, leads development coordination and has provided assistance in energy generation, transmission, distribution, energy efficiency, renewable energy development, hydrocarbons (regional gas interconnection), and analytical and advisory assistance. The proposed transaction TA facility (F-TRTA) will provide preparation support to a series of ensuing policy-based loans and investment lending projects, comprising (i) Energy Sector Resilience Program (subprograms 1, 2, and 3 amounting to $1 billion); (ii) Hydropower Development Project ($300 million); (iii) Power Transmission Strengthening Investment Program multitranche financing facility ($800 million); (iv) Second Power Distribution Enhancement Investment Program tranche 2 ($250 million) and (v) Gas Sector Development Project ($150 million). In addition, funds will be provisioned for capacity support on energy policy advice, scope and sequencing of sector reforms and multiple analytical assessments to complement the proposed projects.1 All ensuing energy projects require preparation, due diligence, design, and readiness activities, which will be undertaken under this TA facility, thereby reducing transaction costs. This F-TRTA is listed in the 2019 pipeline in the approved country operations and business plan (COBP), 2019–2021 for Pakistan. 2. After an improved economic growth during fiscal years (FY) 2013–2017, averaging 4.8%, the economic growth declined to 2.8% in FY2018–FY2019 underpinned by acute energy shortages.2 Energy sector entities continue to rely on significant regular fiscal transfers and sovereign credit guarantees to maintain their operations and the power distribution companies (DISCOs) remain major recipient of such transfers accounting to nearly 1.5% of gross domestic product (GDP). Further, Pakistan’s power sector suffers from inefficiencies that cost the economy $18 billion or 6.5% of GDP.3 Shifting energy sector inefficiencies on businesses has undermined country’s competitiveness, and the economy persistently suffers from energy shortages and from relatively high tariffs. More than one-fourth of electricity generated is lost due to poor transmission and distribution infrastructure, theft, faulty metering, and inadequate energy accounting, thereby rendering the sector’s capacity to address energy demand insufficient. On the other hand, the power demand has been growing by about 4% per year beginning 2015 and is estimated to continue to grow between 5%–6% per year until 2025.4 Therefore, going forward, Pakistan must adopt well-designed reforms to address the fundamental structural issues complemented by investments in energy infrastructure to address the technical, fiscal, institutional and governance deficits that make country’s energy sector financially unsustainable.5 3. Following the general elections, the new government assumed office in September 2018. Energy sector reforms and investments remain high on its development agenda as the high level of fiscal transfers to energy enterprises, including the emergence of circular debt, is undermining

1 The proposed F-TRTA and the ensuing projects are included in Pakistan’s Country Operations Business Plan (2019–

2021). The amounts indicated in paragraph 1 are for ADB financing. Scope, nature, preparation timelines, and projects may change as per discussion and agreement in the subsequent country operations and business plans. ADB. 2018. Pakistan: Country Operations Business Plan (2019–2021). Manila.

2 For FY2018–FY2019, the IMF has projected the economic growth rate at 2.8%. 3 World Bank. 2018. Power Sector Distortions Cost Pakistan Billions. Islamabad, Pakistan. 4 Government of Pakistan, National Transmission & Despatch Company. 2019. Indicative Generation Capacity

Expansion Plan (IGCEP) based on 20-year Load Demand and Energy Forecast. Lahore. 31 March. 5 The circular debt as of 31 March 2019 stands at PKR1.45 trillion ($10 billion dollars) which is nearly 3% of GDP.

2

the overall fiscal stability and growth, which is adversely affecting critical investments on social and economic infrastructure, especially when the government has very limited ability to fund such investment through borrowings. To this end, ADB-assisted consultants undertook a diagnostic study to identify sectoral inadequacies and challenges and recommended the way forward to address these gaps through a series of sequenced reforms and coordinated investments as part of the energy policy and plan.6 After a consultative process of dialogue with relevant stakeholders, federal and provincial, supported by analytical work, ADB’s energy sector pipeline for the next 3 years was developed and endorsed by the government. The proposed projects, included in the F-TRTA, fully align with sector priorities of (i) securing financial sustainability, (ii) strengthening institutional and regulatory governance, and (iii) reinforcing infrastructure and supply systems. 4. Energy sector reforms could save Pakistan’s economy $8.4 billion in business losses and could increase total household incomes by at least $4.5 billion per year.7 Reforms must therefore go beyond liberalizing energy prices to address multiple aspects of sector distortions, including prioritizing gas allocation for efficient power generation and adopting tariff mechanisms that encourage performance, and rationalizing consumer prices that reflect supply costs and sector arrears. The F-TRTA will support the preparation of a programmatic approach of policy-based lending, Energy Sector Resilience Program, addressing three sector priorities (para. 3). 5. To regain sustainability in sector finances, however, the average generation tariff must be brought down by optimizing generation mix and requires adding low cost indigenous generation (hydropower and renewable) into grids. Heavy reliance on imported furnace oil, re-gasified liquefied natural gas (RLNG) and, now, coal for power generation is also deepening the pressure on foreign exchange reserves, widening the current account deficit, and depreciating the local currency. Therefore, the F-TRTA will support the preparation of hydropower development project, which will be supplemented with a separate project readiness financing facility to be processed in 2020, to prepare a series of hydropower development projects on the Indus river cascade. 6. While nearly 10 gigawatts of new generation capacity has been added since 2013 to resolve the severe supply deficits, this generation capacity expansion has not corresponded to the downstream investments, thereby placing additional stress on the existing transmission and distribution networks. This needs urgent attention through improved system expansion, augmentation, and maintenance. Old infrastructure and limited use of technology, coupled with excess demand and utilization are increasing the loss levels due to tripping of transformers, feeders, and (during the larger tripping incidents) even generation stations. The transmission network at present carries 17,000 megawatt-peak of electricity only, with average transmission and distribution (technical and commercial) losses estimated at 2.6% and 18.5% respectively.8 In the absence of a reliable network, the power generated cannot be transmitted, which the Central Power Purchasing Agency (CPPA-G) has already termed as a capacity trap. 9 The system upgrade of the National Transmission & Despatch Company (NTDC) requires a $9 billion investment.10 Adding more capacity to match peak demand before strengthening downstream

6 ADB. 2017. Technical Assistance to the Islamic Republic of Pakistan for Update on Energy Sector Plan. Manila. TA

9357, $800,000 approved on 21 August. 7 Footnote 3. 8 Government of Pakistan, National Electric Power Regulatory Authority. 2018. State of Industry Report 2017.

Islamabad. 31 March. 9 Additional procurement of power generation capacity in the absence of matching growth in demand would entail

surplus generation capacity for which the government and consumers would have to make capacity payments without utilizing this energy. Government of Pakistan, Central Power Purchasing Agency. 2018. Brief Report on Market Development Activities. Islamabad. 30 June.

10 Japan International Cooperation Agency. 2017. Project for the Study of Upgrading National Power System Expansion Plan. Islamabad, Pakistan. 15 September.

3

infrastructure is detrimental and increases marginal costs to the energy sector. Therefore, F-TRTA will prepare ADB’s third transmission strengthening program, and its first tranche will focus on NTDC reforms as well as construction of high voltage direct current north-south power transmission line to evacuate new generation from the coastal and southern power plants into the central and northern load centers of Pakistan. 7. The high network losses within the ten distribution companies (DISCOs) partly result due to the absence of any monitoring mechanism that track energy flow from the points of electricity purchases down to the final consumer. A reliable metering and recording system at multiple voltage levels starting with the 132-kilovolt (kV) grid, then 11-kV, and to 400 volts (V) and 230 V is critical for the system. The system will not only eliminate the incidents of theft, but it can also prove to be the solution to unaccounted electricity and to diagnosing the technical problems, which have resulted in poor collection rates at the DISCOs. Installation of supervisory control and data acquisition (SCADA), rolling out smart metering systems and aerial bundled conductors at the DISCOs level will further strengthen the system to reduce losses and improve efficiency. The F-TRTA would prepare the second tranche of the Second Power Distribution Enhancement Investment Program which aims to strengthen system constraints and address leakages in two of the weakest and loss-making DISCOs in northern and southern Pakistan where average loss levels of over 40%.11 8. In addition to electricity, another priority energy subsector is natural gas. Natural gas meets about 50% of Pakistan’s primary energy needs, including as a fuel for power generation.12 Over the years, the performance and financial sustainability of the subsector entities have deteriorated and unaccounted gas losses range as high as 12%. Gas consumers in all categories are receiving inadequate supply, poor service, and are forced to use alternative fuels, which are many times more expensive than domestic gas. Going forward, the government envisages gas sector reforms, with a view to bringing competition, increasing supply, and keeping the sector financially viable through higher wellhead prices in oil and gas exploration to make the country a viable investment destination, incentivizing the private sector, diversifying existing hydrocarbon base with newer, cheaper, and cleaner liquefied natural gas (LNG)—mainly replacing residual fuel oil (RFO) in the power sector; undertaking investments in RLNG pipelines, terminals, and associated gas storage infrastructure; and development of north–south and regional trade gas pipelines. The government has requested ADB’s intervention in developing gas storage systems to optimize seasonal variations and imports pricing, as well as development of gas transmission (national and regional) pipelines. The F-TRTA will prepare a Gas Development Project to explore gas storage options and locations across Pakistan. It will prepare feasibility studies for infrastructure to balance seasonal and shorter-term fluctuations of demand, reduce the costly upstream and imported flexibility needs (supply and transport), and bring efficiency in the LNG supply chain to ensure continuity and safeguard from sudden import price spikes. 9. The newly established Energy Sector Task Force of the Prime Minister has confirmed ADB’s energy program to be prepared under the F-TRTA. The five ensuing projects are well-aligned with the current objectives of the Government of Pakistan as well as with ADB’s Country Partnership Strategy for Pakistan. The preparation of these projects will draw upon the lessons and recommendations confirmed by recently concluded Sector Assistance Program Evaluation

11 Ministry of Energy has identified Peshawar Electricity Supply Company and Sukkur Electric Power Company for

inclusion in the program. 12 Government of Pakistan, Ministry of Energy, Hydrocarbon Development Institute of Pakistan. 2017. Pakistan Energy

Yearbook 2017. Islamabad.

4

for Pakistan’s energy sector.13 This includes ADB’s continued support in (i) developing competitive energy market, (ii) promoting sovereign investments to lower cost of base-load generation, and (iii) financing energy supply chain reinforcements and sector reforms. These projects will improve the quality of energy supply; improve efficiency in the transmission and distribution networks; and help build a sustainable, reliable, and viable energy sector in Pakistan.

B. Outputs and Activities 10. Output 1: Energy sector project feasibility and preparation supported. The F-TRTA facility will provide technical expertise to prioritize, plan, and prepare investment projects for the proposed (i) Energy Sector Resilience Program (subprograms 1, 2, and 3 amounting to $1 billion); 14 (ii) Hydropower Development Project ($300 million); (iii) Power Transmission Strengthening multitranche financing facility ($800 million); (iv) Second Power Distribution Enhancement Investment Program tranche 2 ($250 million); and (v) Gas Sector Development Project ($150 million).15 This will include all requisite due diligence; assessment of technical suitability; and the economic, financial, and social viability of proposed projects. The F-TRTA facility will also address capacity and institutional constraints, environmental and social safeguards, and gender concerns, and identify measures to strengthen project implementation and policy related issues. Detailed activities will include, as required: (i) technical feasibility studies; (ii) economic and financial analysis; (iii) financial management assessment; (iv) procurement assessment, plan, and preparation of bidding documents; (v) poverty, social, and gender assessment; (vi) risk assessment and risk management plan; (vii) safeguards documents on environment, involuntary resettlement, and indigenous peoples; (viii) integrity due diligence; (ix) initial poverty and social analysis; (x) environmental flow assessment for hydropower projects, (xi) climate change adaptation measures, and climate risk and vulnerability assessment; (xii) sector assessment; (xiii) project implementation consultants recruitment; (xiv) assisting resettlement plan implementation; and (xv) analytical work related to power and gas sector reforms, among others. All outputs will be delivered and disseminated through digital publications.

11. Output 2: Project management capacity of the executing agency improved. Some projects will be implemented by new agencies and project management units, which will require start-up capacity support. The F-TRTA will also assist the government to assess its investment pipeline, prioritize and sequence energy projects, and optimize financial and capital structure including private sector participation in the investment. 12. The F-TRTA is considered complex because (i) ADB has no experience with one of the executing agencies, (ii) safeguards classifications for the ensuing hydropower project would be A, and (iii) high-level technology could apply.

13 Independent Evaluation Department. 2019. Sector Assistance Program Evaluation: ADB’s Support to Pakistan

Energy Sector (2005–2017). Manila: ADB. 14 The three subprograms comprise of three pillars with a set of sequential reforms: (i) securing financial sustainability,

(ii) strengthening governance, and (iii) reinforcing infrastructure and supply system. Multiple donors have expressed interest to cofinance subprograms 2 and 3.

15 The approved COBP 2019–2021 for Pakistan listed Gas Transmission Project for approval in 2021. However, during the ongoing country programming mission (22 February–14 March 2019), the Ministry of Energy (Petroleum Division) has requested for financing of a gas storage infrastructure project for approval in 2020.

5

C. Cost and Financing 13. The F-TRTA is estimated to cost $2,750,000, of which $2,500,000 will be financed on a grant basis by ADB’s Technical Assistance Special Fund (TASF-other sources). The key expenditure items are listed in Appendix 1. 14. The government will provide counterpart support in the form of counterpart staff and office accommodation, office supplies, and other in-kind contributions, with an estimated value of approximately 9% of the total cost of the TA facility. The government was informed that approval of the F-TRTA does not commit ADB to finance any ensuing project. D. Implementation Arrangements 15. The F-TRTA activities for ensuing projects will start only after ADB approves the project concept paper for each of the ensuing project. ADB will administer the F-TRTA facility and will be responsible for the selection, supervision, and evaluation of consultants under the F-TRTA. The executing agencies are the Ministry of Finance for the policy-based lending; the Ministry of Energy for the transmission, distribution, and gas development investment projects; and the Ministry of Water Resources for the hydropower project. The implementing agencies will be the Water and Power Development Authority for the hydropower project, the NTDC for the power transmission project, the Interstate Gas Systems Limited for gas development, and the concerned power DISCOs for the power distribution enhancement projects. The Energy Sector Task Force of the Prime Minister will oversee and monitor projects preparatory activities under the F-TRTA. 16. The implementation arrangements are summarized in the table.

Implementation Arrangements Aspects Arrangements Indicative implementation period

July 2019–June 2021

Executing agency Ministry of Finance; Ministry of Energy; Ministry of Water Resources Implementing agencies (i) Ministry of Finance = policy-based lending;

(ii) Water and Power Development Authority = hydropower development;

(iii) National Transmission & Despatch Company = power transmission;

(iv) Relevant power distribution companies = power distribution;

(v) Interstate Gas Systems Limited = gas transmission and storage; and

(vi) ADB and the Economic Affairs Division of the Ministry of Finance will be responsible for the F-TRTA implementation oversight, accountability for the outputs, and communication with the consultants and stakeholders.

Consultants To be selected and engaged by ADB Firm:

(i) International, FBS

Selection title F-TRTA consultant (transmission engineering) for power transmission strengthening MFF

$525,000

(ii) International, FBS

F-TRTA consultant (gas storage systems) for gas development project

$575,000

Individual: Individual selection (International)

(i) Energy policy and planning (20 pm)

(ii) Hydropower development (13 pm)

(iii) Power distribution (8 pm)

$875,000

Individual: Individual selection (National)

(i) Energy policy and planning (37 pm)

(ii) Hydropower development (30 pm)

(iii) Power distribution (5 pm)

$525,000

6

Aspects Arrangements Procurement Not Required due to preparatory nature of projects. Advance contracting Advance actions in recruitment of consultants. Disbursement The TA resources will be disbursed following ADB's Technical Assistance

Disbursement Handbook (2010, as amended from time to time). Asset turnover or disposal arrangement upon TA completion

Not Applicable.

FBS = fixed budget selection, F-TRTA = transaction technical assistance facility, MFF = multitranche financing facility, pm = person-month, TA = technical assistance. Source: Asian Development Bank.

17. Consulting services. ADB will engage all consultants following the ADB Procurement Policy (2017, as amended from time to time) and its associated project administration instructions and/or staff instructions.16 The F-TRTA will require consultancy services of international consulting firms and individual consultants (estimated 196 person-months, comprising 67 person-months of international key experts and 129 person-months of national key experts) for undertaking surveys and preparatory works for the ensuing projects. The consulting firms with experience in energy (transmission, distribution, and gas) will be recruited using the fixed budget selection (FBS). In addition, individual international and national consultants will be recruited, using the Individual Consultant Selection (ICS). For energy policy reforms and targeted assignments for retaining flexibility of engagement, direct contracting will be used as required.17 Any experts required but not identified at this time will be recruited as individual consultants and/or resource persons.

II. THE PRESIDENT'S DECISION 18. The President, acting under the authority delegated by the Board, has approved the provision of technical assistance not exceeding the equivalent of $2,500,000 on a grant basis to the Government of Pakistan for Preparing Sustainable Energy Projects, and hereby reports this action to the Board.

16 Terms of Reference for Consultants (accessible from the list of linked documents in Appendix 3). 17 Use of output-based contracts will be preferred for individual consultants, as appropriate.

Appendix 1 7

COST ESTIMATES AND FINANCING PLAN ($’000)

Item Amount Asian Development Banka A. Consultants 1. Remuneration and per diem a. International consultants 1,450.0 b. National consultants 650.0 2. Out-of-pocket expenditures a. International and local travel 185.0 b. Vehicle rental 20.0 c. Surveys 50.0 d. Training, seminars, and conferences 10.0 e. Reports and communications 20.0 f. Office supportb 15.0 B. Contingencies

Total 100.0

2,500.0 Note: The technical assistance (TA) is estimated to cost $2,500,000, of which contributions from the Asian Development Bank are presented in the table. The government will provide counterpart support in the form of counterpart staff, office space, office supplies, and other in-kind contributions. The value of government contribution is estimated to account for 9% of the total TA cost. a Financed by the Asian Development Bank’s Technical Assistance Special Fund (TASF-other sources). b Provision for consultants’ local office operations (e.g., support staff). Source: Asian Development Bank estimates.

8 Appendix 2

PROJECTS UNDER TECHNICAL ASSISTANCE FACILITY

Table A2.1: Indicative Consultants’ Input Allocation (person-month)

Item Total

Energy Sector

Resilience Program complex

Power Transmission Strengthening Program (T1)

complex

Hydropower Development

Projecta complex

Gas Sector

Development Project

complex

Second Power Distribution

Enhancement Program (T2)

complex International Consultants

Energy policy and planning specialist

10.0 10.0 0.0 0.0 0.0 0.0

Energy regulatory specialist 3.0 3.0 0.0 0.0 0.0 0.0

Power transmission engineer (electrical)

6.0 0.0 6.0 0.0 0.0 0.0

Power distribution engineer (electrical-metering expert)

3.0 0.0 0.0 0.0 0.0 3.0

Power utilities specialist 4.0 1.0 3.0 0.0 0.0 0.0

Gas storage systems specialist 4.0 0.0 0.0 0.0 4.0 0.0

Hydrocarbons specialist 3.0 1.0 0.0 0.0 2.0 0.0

Hydropower planning specialist 4.0 0.0 0.0 4.0 0.0 0.0

Renewable energy specialist 3.0 1.0 0.0 2.0 0.0 0.0

Procurement specialist 3.0 0.0 1.0 0.0 0.0 2.0

Energy economist 6.0 2.0 1.0 1.0 1.0 1.0

Financial management specialist

7.0 2.0 1.0 1.0 1.0 2.0

Social safeguards specialist 4.0 0.0 1.0 1.0 2.0 0.0

Climate change specialist 2.0 0.0 0.0 1.0 1.0 0.0

Environment specialist 5.0 0.0 1.0 3.0 1.0 0.0

Subtotal (A) 67.0 20.0 14.0 13.0 12.0 8.0

National Consultants

Senior energy specialist 6.0 6.0 0.0 0.0 0.0 0.0

Senior energy policy expert 12.0 12.0 0.0 0.0 0.0 0.0

Power systems expert 6.0 6.0 0.0 0.0 0.0 0.0

Power transmission expert 7.0 0.0 7.0 0.0 0.0 0.0

Gas storage systems expert 6.0 0.0 0.0 0.0 6.0 0.0

Hydrocarbons expert (Gas systems)

10.0 2.0 0.0 0.0 8.0 0.0

Renewable energy expert 6.0 1.0 0.0 5.0 0.0 0.0

Civil engineer (hydropower) 6.0 0.0 0.0 6.0 0.0 0.0

Climate change specialist 3.0 0.0 1.0 2.0 0.0 0.0

Procurement specialist 13.0 0.0 6.0 3.0 4.0 0.0

Appendix 2 9

Item Total

Energy Sector

Resilience Program complex

Power Transmission Strengthening Program (T1)

complex

Hydropower Development

Projecta complex

Gas Sector

Development Project

complex

Second Power Distribution

Enhancement Program (T2)

complex Financial management specialist

17.0 9.0 3.0 2.0 3.0 0.0

Social safeguards specialist 13.0 0.0 4.0 4.0 3.0 2.0

Environment expertb 17.0 0.0 3.0 6.0 6.0 2.0

Gender expert 7.0 1.0 1.0 2.0 2.0 1.0

Subtotal (B) 129.0 37.0 25.0 30.0 32.0 5.0

Total (A + B) 196.0 57.0 39.0 43.0 44.0 13.0

MFF = multitranche financing facility, T1 = tranche 1, T2 = tranche 2. a A project readiness financing facility in the amount of $15 million, to be approved in 2020, would support preparation of a

series of hydropower projects. b Inputs of national environment consultants may vary depending on the categories of the projects. National ecological survey

teams may be hired for Category A projects. A project readiness financing facility, currently under process, will finance additional resources for environmental due diligence, surveys, and preparation of requisite projects documentation.

Source: Asian Development Bank estimates.

10 Appendix 2

Table A2.2: Basic Project Information

Item

Energy Sector

Resilience Programa

Power Transmission Strengthening Program MFF

(T1)b

Hydropower Development

Projectc

Gas Sector

Development Projectd

2nd Power Distribution

Enhancement Investment

Program (T2)e

ADB financing $1 billion $300 million $300 million $150 million $250 million

Lending modality PBL subprograms

MFF tranche Project loan Project loan MFF tranche

Approval Q4 2019 Q1 2022 Q1 2022 Q2 2021 Q2 2021

Outcome Financial sustainability

and governance of

Pakistan’s energy sector

enhanced

Coverage, reliability and stability of the

power transmission

service in Pakistan improved

Share of indigenous

hydropower in Pakistan energy mix increased

New gas storage systems

developed to balance out

peak demand

Electrical revenues in

targeted regions increased

Executing agency Ministry of Finance

Ministry of Energy (Power

Division)

Ministry of Water

Resources

Ministry of Energy

(Petroleum Division)

Ministry of Energy (Power

Division)

Implementing agency

Ministry of Finance

NTDC WAPDA ISGS Relevant DISCO

Potential Environment and Social Categorization

ENV = C IR = C IP = C

ENV = B IR = B IP = C

ENV = A IR = A IP = C

ENV = A IR = B IP = C

ENV = B IR = C IP = C

ADB = Asian Development Bank, DISCO = distribution company, ENV = environment, IP = indigenous people, IR = involuntary resettlement, ISGS = Interstate Gas Systems Limited, MFF = multitranche financing facility, NTDC = National Transmission & Despatch Company, PBL = policy-based loan, PEPCO = Pakistan Electric Power Company Limited, T1 = tranche 1, T2 = tranche 2, WAPDA = Water and Power Development Authority. a The policy-based loan comprises of three subprograms as follows: (i) subprogram 1 ($300 million) to be considered

for approval in 2019, (ii) subprogram 2 ($300 million) to be considered for approval in 2020, and (iii) subprogram 3 ($400 million) to be considered for approval in 2021. Individual consultants will be recruited to supplement analytical work required for the preparation of these subprograms.

b This third multitranche financing facility for Pakistan’s power transmission subsector ($800 million) is envisaged to move away from the traditional lending for investment projects. Instead, the program will explore and focus heavily on policy and governance reforms, innovative financing modalities, sustainability and corporatization, grid modernization and digital transformation of utility, technical capacity support, and related soft investments.

c The project will also be supported through a project readiness financing facility to prepare a series of hydropower projects, including detailed engineering design, preparation and evaluation of bidding documents, and capacity support for commercial cofinancing and innovative procurement modalities.

d The ensuing project will build upon earlier assistance by ADB on the development of gas storage systems and related infrastructure. The project is a high priority due to take or pay contracts on imported liquefied natural gas, and the country needs additional storage facilities to stock gas imports for peak months.

e The subsequent tranches will be prepared under a support facility approved in tranche 1 of this Power Distribution Enhancement MFF. Due to urgent request by the government to process this tranche, individual consultants will be recruited in the interim under the F-TRTA to prepare tranche 2 by Q2 2021. The tranche is standby in 2020.

Source: Asian Development Bank. 2018. Pakistan: Country Operations and Business Plan (2019–2021). Manila.

Appendix 3 11

LIST OF LINKED DOCUMENTS http://www.adb.org/Documents/LinkedDocs/?id=53058-001-TAReport

1. Terms of Reference for Consultants

2. Risk Assessment and Risk Management Plan

1

TERMS OF REFERENCE FOR CONSULTANTS I. Energy Sector Resilience Program

A. Individual Consultants

1. Energy policy and planning specialist/team leader (international, 10 person-months [pm]). The specialist will have a degree in engineering or management and have a minimum of 20 years of extensive experience in energy sector policy issues with specific reference to Pakistan. The consultant must have led similar exercises to deliver sustainable reforms in the energy sector (power, hydrocarbons, renewable subsectors), energy policy and plans. The expert will actively engage with a diverse set of stakeholders in Pakistan’s energy sector including ministers, senior government officials, and technical experts working in various energy sector entities in the Government, as well as development partners active in the country’s energy sector. The specialist will coordinate information flow from such stakeholders to develop a comprehensive, sustainable, and sequenced energy sector reforms program spread over three subprograms (2019–2023). The specialist will

(i) provide overall guidance to other individual consultants in designing the reform program comprising financial sustainability of energy sector, managing tariffs and subsidies, improving sector performance and opening the market to private participation, instituting accountability framework and transparency;

(ii) review ongoing policy reforms in the energy sector and assess the progress made since 2010 and recommend a policy matrix into the ensuing sector development program;

(iii) analyze investments roadmap and pipeline and conduct a thorough analysis of the recommendations made in 2010 Friends of democratic Pakistan (Energy Sector Recovery Plan) report and prior policy-based reform programs with way forward suggesting remedial action plan, if required;

(iv) undertake all necessary gap analysis and consultations relating to Pakistan's energy sector as required for putting together a forward looking and practical action plan and the report;

(v) analyze power sector tariff structures and existing subsidies in the sector from the point of view of financial sustainability. Recommend measures necessary to ensure long-term sustainability of the sector;

(vi) assess Pakistan's investment requirements in the energy sector keeping in view the required trend economic growth to create jobs and reduce poverty. Enumerate these requirements in the action plan and the report;

(vii) provide research and analysis support on all aspects of the preparation of the action plan and report; including due diligence on least cost generation plan, ensuing transmission requirements and distribution planning;

(viii) analyze the economic subsidies involved in the current tariff structure and the extent of cross-subsidization between major consumer groups and regions; and review the appropriateness of the existing lifeline tariff block;

(ix) update existing estimates of costs of unserved energy due to unreliability of the system; and develop several scenarios for the load growth forecast; and

(x) review ongoing policy reforms in the hydrocarbon sector and assess the progress made since 2010 and recommend a policy matrix into the ensuing sector development program.

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2. Energy regulatory specialist (international, 3 pm). The specialist will have a degree in law, engineering, or management and have a minimum of 15 years of global experience in energy sector regulations and with specific reference to power sector in developing countries. The consultant must have led formulation of energy regulatory frameworks, recommending amendments in view of changing technical, sectoral, and political economic conditions, and roadmap to implementation that would create requisite checks and balance among industry stakeholders. The expert will actively engage with a diverse set of stakeholders in Pakistan’s energy sector including the electric power and oil and gas regulators, relevant ministers and government officials, technical experts, energy utilities’ lawyers, and development partners active in the country’s energy sector. The specialist will coordinate information flow from such stakeholders to develop a comprehensive, sustainable, and sequenced energy sector reforms program spread over three subprograms (2019–2023). The specialist will

(i) review the existing regulatory regime in electrical power and oil and gas subsectors in Pakistan and analyze the regional context;

(ii) review the current tariff model and demand forecasting regime; (iii) study process flow of tariff petitions and impediments in determination and

notification of annual and multiyear tariffs; (iv) undertake in-depth analysis of recent amendments and conduct regulatory needs

assessment; (v) recommend modifications and allocations of regulatory responsibilities and

institutional design, if required; and (vi) provide a roadmap for implementation along with interim way forward.

3. Power utility specialist (international, 1 pm). The specialist will have a degree in law, engineering, or management and have a minimum of 15 years of global experience in operations of power utilities (transmission and distribution). The consultant must have led and been part of change management programs, recommending amendments in business processes, induction of technology for grid modernization and digitization, in view of changing technical, sectoral, and political economic industry standards and developments. The specialist should have managed the planning, feasibility, development, design, and construction of energy supply chain projects, developed project budgets, spending plans and ability to track costs and invoices associated with various projects. The specialist will

(i) broadly review the existing business processes in the National Transmission & Despatch Company (NTDC) and power distribution companies (DISCOs); undertake gap analyses; identify improvement areas; and recommend technological solutions to cut time, reduce losses, and improve productivity and efficiency;

(ii) communicate with project stakeholders and recommend modern business practices; and

(iii) recommend processes to approach capital markets to access project finance, achieve results, and reduce cost of doing business.

4. Hydrocarbons specialist (international, 1 pm). The specialist will have a university degree in engineering or management and have a minimum of 10 years of global experience in operations of oil and gas utilities (generation, transmission, and distribution). The specialist will

(i) assist the team leader in the efficient assessment and critical analysis of the country’s hydrocarbon sector (oil and gas) including exploration policy;

(ii) review ongoing policy reforms and work undertaken by development partners in the hydrocarbon sector and assess the progress made since 2010, bottlenecks

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encountered, and recommend a policy matrix into the ensuing sector development program; and

(iii) recommend best international and regional practices in hydrocarbon reforms and implementation of projects through private sector participation.

5. Renewable energy specialist (international, 1 pm). The specialist will have a university degree in engineering or management and have a minimum of 10 years of global experience in operations, policy and new technological development in renewable energy (solar and wind). The specialist will

(i) assist the team leader in efficient assessment and critical analysis of country’s renewable energy (wind and solar), including input into the upcoming renewable energy policy 2019;

(ii) review ongoing policy reforms in renewable energy sector and assess the progress made since 2010 and recommend a policy matrix into the ensuing sector development program;

(iii) advise how renewable energy leading countries have integrated variable renewable energy into grid (technical and economic incentives) and what lessons can be incorporated into Pakistan’s renewable energy framework; and

(iv) recommend best international and regional practice in renewable energy reforms and implementation of projects through private sector participation.

6. Energy economist (international, 2 pm). The specialist should preferably have degree in accounting, economics, finance or related fields, possessing at least 10 years of industry experience. The economist is expected to assess economic and sustainability issues and carry sensitivity and risk analyses and possess deep understanding of the application of comprehensive life cycle assessments to the analysis of different energy and electricity generating options, including externalities, in an energy system context. The specialist should have knowledge of the financing of capital-intensive infrastructure projects as well as knowledge of energy analysis and planning tools. The specialist will

(i) prepare input for the assessment and forecast of the medium- to long-term energy and gas supply demand balance based. Develop an economic demand scenario based on market-based pricing including recommendations for price adjustment while responding to market realities, for implementation over a reasonable time period, and a determination of the most optimum gas allocation and share of gas in the primary sources of energy;

(ii) coordinate with financial management specialist to undertake assessment of the economic impact of policy decisions envisaged in energy sector reforms;

(iii) assess the institutional and regulatory environment of the energy sector and identify growth and reform opportunities; and

(iv) undertake focused assessment related to the medium- to long-term impacts of major energy projects, programs and policy developments.

7. Financial management specialist (international, 2 pm). The specialist should preferably have internationally recognized accounting qualification (e.g., Association of Chartered Certified Accountants [ACCA], certified public accountant [CPA], chartered accountant [CA]), of an advanced degree in finance, and the possessing at least 15 years of industry experience. The specialist should be able to under financial assessment and analyses of financial sustainability of the energy sector, including robust debt analyses, the causes and impact of debt on the sector finances. The specialist should prepare a detailed remedial plan with concrete actions (with

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timelines) to address all constituents of circular debt (flow and stock) and advise measures that inhibit recurrence of circular dent in future. The specialist will

(i) revise and update the existing circular debt management plan; (ii) coordinate with all stakeholders (public and private) to understand the factors; and (iii) prepare a sector governance framework and suggest measures to institute this to

bring transparency and accountability in sector finances.

8. Senior energy specialist (national, 6 pm). The consultant must have a degree in relevant field with at least 8 years of national experience in energy sector analysis and projects implementation. The consultant will

(i) undertake all necessary gap analysis and consultations relating to Pakistan's energy sector as required for putting together a forward looking and practical action plan and the report;

(ii) analyze power sector tariff structures and existing subsidies in the sector from the point of view of financial sustainability. Recommend measures necessary to ensure long-term sustainability of the sector;

(iii) assess Pakistan's investment requirements in the energy sector keeping in view the required trend economic growth to create jobs and reduce poverty. Enumerate these requirements in the action plan and the report; and

(iv) provide research and analysis support on all aspects of the preparation of the action plan and report; including due diligence on least cost generation plan, ensuing transmission requirements and distribution planning.

9. Senior energy policy expert (national, 12 pm). The consultant must have a degree in relevant field with at least 8 years of national experience in energy sector analysis and projects implementation. The consultant will

(i) Work in team by contributing insight and knowledge of the energy sector to the preparation of energy sector resilient program comprising policy action and reform agenda;

(ii) analyze and collate information and analysis about Pakistan’s energy challenges through engagements with all relevant stakeholders including government agencies, power companies, and the private sector; and analyze existing take or pay generation contracts and critique institutional structure of energy sector;

(iii) Analyze the economic subsidies involved in the current tariff structure and the extent of cross-subsidization between major consumer groups and regions; and review the appropriateness of the existing lifeline tariff block;

(iv) formulate and present report on electricity policy and action plan that is aligned to Government’s economic corridor development framework;

(v) review of the existing Government of Pakistan policies, laws, vision relating to reforms proposed in the energy sector;

(vi) analyze current data to identify key reform areas, establish bench-mark data and key targets moving forward;

(vii) establish an effective mechanism for monitoring of reforms over the relevant time-period; and

(viii) examine the policy, regulatory, institutional, financial and legislative environment governing activities in Pakistan power development, transmission, dispatch and distribution.

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10. Power systems expert (national, 6 pm). The expert should preferably have a university level degree in electrical engineering or related fields and possess a minimum of 8 years of experience. The expert will

(i) contribute to various power system studies in preparation of the country’s integrated energy plan, grid connection studies, variable renewable energy integration, and operational planning of power systems; and

(ii) undertake analysis of across all voltage levels due to proposed integration of new technologies, increasing grid interconnections, and changing regulatory frameworks.

11. Hydrocarbons expert (national, 2 pm). The expert should preferably have a university level degree in geology, engineering, or related fields and possess a minimum of 8 years of experience. The expert will

(i) provide input and lead in preparation of energy sector policy reform agenda by consolidating and updating oil and gas development policies and plans for Pakistan, including tariff model and framework, measures for enhanced private sector participation, and diagnosis for weak performance and development of hydrocarbons sector in Pakistan; and

(ii) review the current oil and gas sector, identifying the key policy gaps, issues, and interventions required to create business opportunities in the sector

12. Renewable energy expert (national, 1 pm). The expert shall have a university degree in engineering or in related field, and 8 years of experience in design, operations, and policy framework of renewable energy power plants. The expert shall

(i) undertake analytical assessment and preparation of action plan for renewable energy generation options and assess options for tariff model and framework;

(ii) advise government entities in designing and implementing smart incentives and removing disincentives to promote investment in renewable energy (RE), and bring lessons learned to workshops planned under the program; and

(iii) promote the integration of variable renewable energy (VRE) into the grid, improve capacity of policymakers to understand VRE integration challenges and solutions including system limits, and support development of grid codes that facilitate VRE integration and other grid interconnect requirements for VRE connection.

II. Power Transmission Strengthening Multitranche Financing Facility

A. Consulting Firm 13. Power transmission engineer (international, 6 pm). The power transmission engineer will have an advanced degree in electrical engineering and a minimum of 10 years of experience working in development/rehabilitation of transmission lines, substation, and grid systems. Experiences in developing countries is desired. The engineer will undertake the following:

(i) analyze the current status and masterplan of the power grid system, and identify development and expansion needs; assess power transmission and investment plan, assess the sector and project risks, and update the power sector assessment;

(ii) based on the system simulation and review of existing studies on development of transmission, determine whether the proposed subprojects should be priority based on various factors including consideration for least cost solution for meeting the required transmission/substation/distribution system capability;

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(iii) conduct site reconnaissance (route surveys) to collect data/information for feasibility study level design;

(iv) prepare feasibility studies for projects on transmission and distribution network development/rehabilitation and for project components including them (e.g., hydropower project with transmission/distribution components). The studies should include, at the minimum, feasibility study level drawings;

(v) finalize bill of quantities and cost estimates, separating foreign exchange and local currency cost prepare a list of materials, equipment, and works necessary to implement the projects;

(vi) coordinate with team on project implementation schedule and procurement arrangements including contract packaging in accordance with ADB’s Guidelines on Procurement;

(vii) prepare engineering designs and technical specification of transmission lines, including towers, conductors, insulators, ground wires, etc. in accordance with relevant technical standards; prepare engineering designs and technical specification of substations in accordance with relevant technical standards;

(viii) prepare detailed project implementation schedules showing anticipated progress of works and expenditures for each contract package and considering seasonal climatic conditions, prepare engineering drawings required for the preparation of bidding documents, and prepare bidding documents for the subprojects following ADB’s Guidelines for Procurement and Standard Bidding Documents;

(ix) provide on-the-job training (OJT) to counterpart engineer on field of expertise; and (x) provide input in preparation of ADB reports and project documentation for board

approval. 14. Power utility specialist (international, 3 pm). The specialist will have a degree in law, engineering, or management and have a minimum of 15 years of global experience in operations of power utilities (transmission). The consultant must have led and been part of change management programs, recommending amendments in business processes, induction of technology for grid modernization and digitization, in view of changing technical, sectoral, and political economic industry standards and developments. The specialist should have managed the planning, feasibility, development, design, and construction of energy supply chain projects, developed project budgets, spending plans and ability to track costs and invoices associated with various projects. The specialist will

(i) broadly review the existing business processes in NTDC, undertake gap analyses, identify improvement areas and recommend technological solutions to cut time, reduce losses and improve productivity and efficiency;

(ii) communicate with project stakeholders, and recommend modern business practices; and

(iii) recommend processes to approach capital markets to access project finance, achieve results, and reduce cost of doing business.

15. Procurement specialist (international, 1 pm). The expert will have at least a bachelor’s degree, and 15 years of experience in procurement. The specialist will undertake the following tasks:

(i) update country procurement system assessment and prepare risk mitigation plan as an integral part of the fiduciary assessment;

(ii) assess the NTDC’s procurement capacity, and propose risk mitigation and capacity development action plan;

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(iii) prepare the program integrated risk mitigation, and provide inputs to fiduciary assessment and integrated risk mitigation plan;

(iv) prepare the project’s bidding documents in accordance with ADB’s Procurement Framework (2017) and relevant standard bidding documents;

(v) assist NTDC in developing the procurement plan, addressing clarifications during the procurement process, evaluating bids, and preparing bid evaluation reports; and

(vi) recommend necessary procurement capacity building that need to be addressed under the project.

16. Energy economist (international, 1 pm). The specialist should preferably have degree in accounting, economics, finance, or related fields, possessing at least 10 years of transmission industry experience. The economist is expected to assess economic and sustainability issues, carry sensitivity and risk analyses, and possess deep understanding of the application of comprehensive life cycle assessments to the analysis of different gas storage options, including externalities. The specialist should have knowledge of the financing of capital-intensive infrastructure projects as well as knowledge of energy analysis and planning tools. The specialist will

(i) prepare input for the assessment and forecast of the medium- to long-term gas supply–demand balance; develop an economic demand scenario based on market-based pricing, including recommendations for price adjustment while responding to market realities, for implementation over a reasonable time period, and a determination of the most optimum gas allocation and share of gas in the primary sources of energy;

(ii) coordinate with the financial management specialist to undertake assessment of the economic impact of gas storage facilities, circular debt, and basket tariff;

(iii) undertake focused economic assessment related to the medium- to long-term impacts of gas storage projects, programs, and policy developments;

(iv) carry out the economic analysis of the project to be taken by the NTDC. The model will be calculated for several technology, customer segmentation, and rollout options recommended for implementation;

(v) undertake economic analysis of each of the proposed investment components and assess their economic viability; provide the economic rationale for each component and the overall project, including a review of historical electricity demand and supply and projections for the sector nationally and regionally, and an alternatives and least-cost options analysis, in accordance with ADB Guidelines for the Economic Analysis of Projects (2017);

(vi) evaluate the project's direct and indirect impacts and carry out economic analysis of these impacts in terms of economic net present value and economic internal rates of return in accordance with ADB's Guidelines for the Economic Analysis of Projects (2017);

(vii) conduct cost-benefit analysis to assess the project’s economic benefits, and carry out the economic analysis of the project by conducting the following tasks: ▪ calculation of appropriate opportunity costs and conversion factors including

but not limited to standard conversion factor, shadow exchange rate factor, shadow wage rate factor, and any other which may be considered applicable for the project;

▪ estimation of the capital expenditure and operating costs of the overall project and each subproject in economic prices; the economic costs should be exclusive of taxes and subsidies;

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▪ estimation and recommendation of an appropriate proxy to account for the economic price of electricity by way of conducting a survey to assess consumer surplus and willingness-to-pay by the consumers;

▪ calculation of incremental benefits and costs arising from the project by comparing the “with project” scenario to the “without the project” scenario in accordance with guidance provided in ADB’s Guidelines for Economic Analysis of Projects (2017);

▪ estimation of direct incremental benefits and costs—including, but not limited to, operational cost savings, increase of revenue collection, decrease of technical and non-technical losses—in economic prices;

▪ estimation of indirect incremental benefits and costs—including, but not limited to, energy cost savings, improvement of efficiency across the energy resources value chain, indirect energy savings, increase of overall power system efficiency, avoided investment in power generation assets due to reduced demand and improved load management environmental benefits (e.g., carbon dioxide [CO2] emission reduction), national energy security, etc.—in economic prices;

▪ calculation of economic net incremental benefits to the project undertaken by the Interstate Gas Systems Limited (ISGS) for implementing the project, and calculation of the economic internal rate of return (EIRR) and economic net present value (ENPV) for the project;

▪ sensitivity analysis of the economic viability of the project to key input parameters; and

▪ distribution analysis identifying the expected benefits and cost implications to all stakeholder groups.

(viii) in consultation with the social development specialist, incorporate poverty reduction impacts in accordance with ADB's Handbook on Integrating Poverty Impact Assessment in the Economic Analysis of Projects and estimate the poverty reduction impact ratio (PIR) according to ADB's relevant guidelines and requirements;

(ix) develop the Microsoft Excel spreadsheet models for the economic analysis to make them transparent and self-explanatory before handing over the same to ADB; and

(x) prepare the draft project documentation for economic analysis and update the appendix and the tables and analyses to reflect ADB comments and suggestions.

17. Social safeguards specialist (international, 1 pm). The expert will have at least a bachelor’s degree in social development or related field, and 10 years of relevant experience. The specialist will

(i) conduct social, gender and poverty analysis, and prepare necessary strategy and measures;

(ii) undertake review of the initial social impact assessment for the ensuing projects; (iii) prepare resettlement framework, indigenous peoples planning framework,

resettlement plans, and indigenous peoples plan (if required); (iv) identify appropriate compensation methodologies, where required; (v) incorporate all mitigation measures into cost estimates; (vi) prepare a program/action plan for meaningful consultation; and (vii) collect and analyze sex-disaggregated data for project preparation and design.

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18. Environment specialist (international, 1 pm). The expert will have at least a bachelor’s degree in environmental engineering/science, and 15 years of relevant experience in carrying out environmental studies, including initial environment examination (IEE) report for infrastructure projects, especially for power transmission. The specialist will undertake the following tasks:

(i) assess and confirm that the proposed transmission components are not within the protected areas, if any; and if the proposed components lie within such zones, elucidate the regulatory procedures and protection measures needed to obtain environmental and forestry clearance from the relevant national and provincial government agencies; evaluate the presence of bird migratory routes for transmission corridors;

(ii) prepare an IEE for transmission lines and the substations in accordance with ADB's safeguard policy statement (SPS) (2009),1 and any applicable procedures or guidelines for environmental assessment required by the government, considering the likely impacts associated with their locations, designs, and construction activities, as well as the long-term impacts during operation, including identification of environmental issues from activities directly induced by the project;

(iii) prepare an environmental management plan (EMP) for the project based on the detailed design, and ensure that necessary mitigation measures are in place; assess the adequacy of the cost estimates for the proposed EMP;

(iv) review NTDC’s environmental management capability and recommend institutional strengthening measures;

(v) ensure that components such as transmission lines and access roads specifically for the project must have environmental assessments;

(vi) ensure that the costs for implementing recommended environmental management and monitoring plans and any capacity strengthening measures are included in the project's development costs;

(vii) recommend appropriate environmental mitigation measures for identified significant impacts, and monitoring plans to address these impacts; and assess the environmental benefits of the proposed activities and any capacity-strengthening measures that may be needed for implementing the environmental management and monitoring plans; and

(viii) ensure that the EMP is included in the project implementation contracts. 19. Power transmission expert (national, 8 pm). The expert will have at least a bachelor’s degree in electrical engineering, and 8 years of relevant experience in power transmission operation and planning. The expert will assist the power transmission engineer and undertake the following tasks:

(i) assess power transmission and investment plan, assess the sector and project risks, and update the power sector assessment;

(ii) carry out engineering and design activities related to transmission line design (such as engineering analysis and design, route selection, and materials acquisition), structural and foundation design, and project and construction management;

(iii) prepare project construction documents such as plan and profile drawings; design drawings; engineering, material, and construction specifications; project schedules and bills of materials;

(iv) develop project design alternatives and corresponding cost estimates;

1 Available in https://www.adb.org/documents/safeguard-policy-statement.

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(v) assist international specialist in design for the rehabilitation of existing and/or construction of new transmission facilities;

(vi) prepare project design documents, including detailed technical specifications for the project;

(vii) conduct technical due diligence on each subproject, including the related transmission system studies, justification of the selected subprojects to determine whether the proposed subproject provide the least-cost solution for meeting the required transmission enhancement capability, the alignment of subprojects with the least-cost generation plan and regulatory approvals—investment plan approved by Pakistan’s National Electric Power Regulatory Authority (NEPRA);

(viii) develop detailed cost estimates, required technical specifications, and bill of quantities for each subproject;

(ix) prepare detailed project implementation plan, including the resourcing, processes, and detailed schedules for the tranche, and each subproject;

(x) assess the performance and lessons learnt from the previous investment program and projects;

(xi) prepare project feasibility study in the format required by the government for its internal approval;

(xii) supervise all activities under the consultancy contract and manage the project team, and ensure the quality and timely delivery of outputs;

(xiii) act as the project team's point of contact with the NTDC and ADB; (xiv) coordinate with ADB on all project-related matters including ADB missions,

preparation of new tranches, and data/reports required by ADB; (xv) ensure that all reports required under the project are submitted in time with

required quality and standards; (xvi) prepare a Polychlorinated Biphenyls (PCB) and waste management plan of old

and contaminated equipment, if required; (xvii) prepare ADB’s Board documentation following ADB’s standard format along with

all attachments as required by ADB; and prepare all other documents for the Pakistan government required for project processing by ADB; and

(xviii) conduct other duties as reasonably requested by the ADB project officer.

20. Financial management specialist (national, 3 pm). The expert will have at least a bachelor’s degree in economics/ finance, relevant professional qualification (e.g., ACCA, Chartered Financial Analyst [CFA], CPA), or an advanced degree in finance, and 10 years of relevant experience in financial analysis of projects and corporate due diligence. The consultant will

(i) assess the government program’s adequacy and economic efficiency, results, and links with disbursements under the program, expenditures and financing, and implementation arrangements;

(ii) identify necessary measures and actions to be taken to strengthen the government investment program for inclusion in the program action plan;

(iii) assess the program’s fiduciary systems ability to manage fiduciary risks and provide reasonable assurance for the appropriate use of program funds;

(iv) prepare program expenditure and financing assessment; fiduciary systems assessment; financial management systems assessment for NTDC; and risk mitigation plan, including capacity development activities for inclusion in the program action plan; and

(v) undertake financial and economic analysis of the program and the tranche.

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21. Climate change specialist (national, 1 pm). The specialist will have a higher degree in environmental policy, economics, natural resource management, or related area and at least 10 years of experience in designing and implementing climate change projects in a multisector development context at different scales (i.e., regional, national, subnational) in Asia. Related experience in Pakistan will be considered a strong advantage. Experience with multilateral development banks will be an advantage. The specialist will

(i) provide strategic and operational advisory support to assess climate change aspects during project design;

(ii) provide technical input to make the projects climate resilient and design climate proofing aspects;

(iii) in consultation with relevant government agencies, identify project components that are sensitive to climate/weather conditions and develop a detailed work plan for carrying out a climate risk assessment and management study;

(iv) carry out the climate risk and management study, including the development of climate scenarios, assessment of potential risks of climate-sensitive project components to projected climate change, and the identification of possible adaptive measures to manage such risks; and

(v) prepare a detailed technical report on the study, including the overall methodology, data used, assumptions made, key findings, and their implications for the project preparation, possible options to address impacts/risks to ensure climate-resilient design and associated costs, caveats/limitations of the study and their implication for the project preparation.

22. Social safeguards and development specialist (national, 4 pm). The expert should have at least a bachelor’s degree in social development or related field, and 10 years of relevant experience. S/he will support the tasks of the international social development specialist. 23. Procurement specialist (national, 6 pm). The expert should have at least a bachelor’s degree with 10 years of experience in procurement-related area. S/he will support the tasks of the international procurement specialist.

24. Environment specialist (national, 3 pm). The expert should have at least a bachelor’s degree in environmental engineering/science, and 8 years of relevant experience in carrying out environmental studies, including IEE for infrastructure projects, especially for power transmission. The consultant should likewise assist the international expert in assessing and confirming that the proposed transmission components are not within the protected areas, if any. The national specialist will support the international environment specialist in the following tasks:

(i) prepare an IEE for transmission lines and the substations in accordance with ADB's SPS (2009), and any applicable procedures or guidelines for environmental assessment required by the government, considering the likely impacts associated with their locations, designs, and construction activities, as well as the long-term impacts during operation, including identification of environmental issues from activities directly induced by the project;

(ii) prepare EMP for the project based on the detailed design, and ensure that necessary mitigation measures are in place;

(iii) review the NTDC’s environmental management capability and recommend institutional strengthening measures;

(iv) recommend appropriate environmental mitigation measures for identified significant impacts, and monitoring plans to address these impacts; and assess the environmental benefits of the proposed activities and any capacity-

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strengthening measures that may be needed for implementing the environmental management and monitoring plans; and

(v) ensure that the EMP is included in the project implementation contracts.

B. Individual Consultant 25. Gender specialist (national, 1 pm). The expert shall have at least a bachelor’s degree in social science, economics, or other related fields, or its equivalent and 7 years of relevant experience in carrying out gender assessment and analysis, preferably of state-owned companies and of consumer behavior. The expert will help conduct assessments and actions for the project, and support capacity development for the NTDC from a gender perspective. The consultant will provide support to ensure that the project embodies commitment to achieving gender equality and women’s empowerment, and will undertake the following tasks:

(i) prepare sector assessment from the gender perspective, identifying gender-specific issues, including gender representative opportunities for employment and empowerment in decision making;

(ii) collect and analyze sex-disaggregated data for project preparation and design; (iii) review the NTDC’s human resource policy and practices and propose gender-fair

and women-friendly policies/activities/measures; (iv) develop and assist in gender awareness-raising programs and training the NTDC's

key management staff; (v) analyze data on percentage of women taking energy-related courses, such as

engineering, math, and science in technical and vocational education and training institutions and universities, and review these institutions and universities as potential partners of the NTDC to mainstream gender in the gas sector;

(vi) assess the quality of existing reports, information/data generated by the NTDC from a gender perspective;

(vii) assess all potential positive and negative impacts of the project on consumer groups and the NTDC’s staff from a gender perspective;

(viii) prepare socioeconomic profiles of the project-affected communities in the project areas, disaggregated by sex, following relevant ADB guidelines and publications, and government requirements;

(ix) prepare a set of recommendations to engender the transmission program based of the gender analyses conducted;

(x) identify opportunities for employment of local populations in the project, and any skills training that may help improve the capital base of the local populations (if applicable), with key consideration of the different labor market potentials for male and female workers;

(xi) identify community development needs, specifically those that would directly benefit women, children, and vulnerable members of the population, that the project can potentially help address;

(xii) assess the gender category of the project and prepare a set of gender action/activities to meet gender analysis and requirements; and

(xiii) assess the NTDC’s gender capacity for gender-sensitive planning and implementation, as well as the potential institutional partners and stakeholder groups, including relevant nongovernment organizations (NGOs) and communities.

III. Hydropower Development Project

A. Consulting Firm

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26. Hydropower planning specialist (international, 4 pm). The specialist will have a degree in civil, mechanical, electrical, or related engineering field, and at least 15 years of relevant working experience in design and management of major hydropower projects including review of feasibility studies and knowledge of project implementation issues. The consultant will closely engage with the Water and Power Development Authority (WAPDA), Ministry of Water Resources, and other stakeholders. Previous experience in developing mid- to large-sized hydropower projects is highly desirable. The specialist will

(i) review the potential hydropower development feasibility study—Lower Palas (665 megawatts [MW]) and Patan (2,400 MW)—assess the technical, financial, economic, and social safeguards parameters, and report this information along with deficiencies in the feasibility study;

(ii) recommend additional work that needs to be taken in the coming months to prepare this project for ADB financing; and advise and guide on the current and future direction of Pakistan’s hydropower sector;

(iii) identify key issues and concerns regarding the hydropower development projects; (iv) undertake a thorough review of the current feasibility study, institutional analysis,

environmental assessment, resettlement considerations, design and monitoring framework, vulnerability assessment, and preliminary engineering designs;

(v) establish the viability of the project in terms of the economic, financial, and technical aspects for all relevant stakeholders;

(vi) assess alternative options, including the associated costs, benefits, and risks involved in delivering the hydropower projects and recommending the appropriate configurations;

(vii) prepare outputs documenting the technical, environmental, institutional, social, market, demand, and other relevant aspects of both hydropower projects;

(viii) review the feasibility studies and update data necessary to estimate construction costs based on the latest market prices; examine construction methods for civil works in consideration of site conditions; incorporate risks and mitigation measures, including climate change, and ensure to apply technically feasible climate change adaptation solutions in the project design to address projected climate vulnerability;

(ix) review the sedimentation assessment carried out in the feasibility study to identify the least-cost solution with minimum environmental impacts; and

(x) validate the hydraulic model test on sediment flushing facilities that will be conducted by the consultant team for the detailed engineering study (hydraulic model test experts and civil design engineers [headworks]).

27. Renewable energy specialist (international, 2 pm). The specialist will have a university degree in engineering or management and have a minimum of 10 years of global experience in operations, policy, and new technological development in renewable energy (hydropower). The specialist will

(i) provide skilled input to design and documentation of the various renewable hydro subprojects, including assessment of bidding documents;

(ii) evaluate the adequacy of the government policy and regulatory framework and identify measures ADB could take to facilitate participation;

(iii) prepare the project implementation schedule, a Gantt chart showing the schedule, and a procurement schedule;

(iv) assess the plan’s technical risks and carry out sensitivity analysis to check project viability under these risks;

(v) prepare terms of reference, expertise requirements, and person-month and cost estimates for implementation consulting services;

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(vi) undertake the optimization of hydropower and renewable energy resources; prepare a summary of the current status of resources and the energy sector requirements;

(vii) prepare the project design and recommend pro-poor components; assess the project cost estimates, including unit costs and estimates of quantities for project components, identification of local and foreign cost components, and physical and price contingencies;

(viii) determine the financing requirements of the plan, identify options for cofinancing, and evaluate the possibility of private sector participation;

(ix) identify cofinancing opportunities on renewable energy and energy efficiency components by the Global Environment Facility, clean development mechanism, and other funding sources;

(x) identify the goods to be procured and civil works to be undertaken and prepare indicative procurement packages for the ensuing projects in the plan; and

(xi) coordinate activities with the other international specialists and ensure that these international specialists coordinate with their local counterparts.

28. Financial management specialist (international, 1 pm). The specialist would have a master’s or higher degree in finance or related field, preferably recognized professional qualifications (e.g., Association of Chartered Certified Accountants (ACCA), (Chartered Financial Analyst (CFA), Chartered Institute of Management Accountants (CIMA), Fellow of Chartered Accountants (FCA), or an advanced university degree in finance, and at least 10 years of relevant working experience in financial analysis of projects (including financial due diligence and modelling), financial management assessment (including financial projections of a corporate entity), and financial management reforms. The specialist will

(i) prepare WAPDA’s financial management assessment, including to (a) evaluate results of financial management assessments conducted by ADB or/and other agencies; (b) assess capacity for planning and budgeting, management and financial accounting, reporting, auditing, internal controls, and information systems; (c) develop disbursement and funds-flow arrangements; and (d) conclude on the financial management risk rating, guidelines, and technical guidance on financial management assessment;

(ii) assess and recommend the financial management reforms and tariff needed for advancing the commercial operation of the subprojects; and recommend capacity management, and mitigate other risks identified in the analysis;

(iii) conduct financial valuation (financial cost-benefit analyses) using financial internal rate of return (FIRR), EIRR, and weighted average cost of capital (WACC) computations in order to evaluate the financial viability of the project following ADB's guidelines;

(iv) prepare relevant reports and estimates backed with detailed justification with source information and models, including cost estimates and fund flow analysis, financial management assessment, and financial projection and analysis; and

(v) conduct an economic evaluation of the project considering economic costs and benefits (including carbon credits) following ADB’s Guidelines for the Economic Analysis of Projects (1997), Handbook on Economic Evaluation of Environmental Impacts, and Financial Management and Analysis of Projects (2005).

29. Social development specialist (international, 2 pm). The expert will have at least a bachelor’s degree in social development or related field, and 10 years of relevant experience. The consultant will

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(i) conduct social, gender and poverty analysis with the assistance of the national social development specialist, and prepare the Summary of Poverty Reduction and Social Strategy (SPRSS) and Gender Action Plan, as necessary;

(ii) undertake review of the initial social impact assessment for the ensuing projects; (iii) prepare resettlement framework, indigenous peoples planning framework,

resettlement plans, and indigenous peoples plan (if required); (iv) identify appropriate compensation methodologies, where required; (v) collect and analyze sex-disaggregated data for project preparation and design; (vi) incorporate all mitigation measures into cost estimates; and (vii) prepare a program/action plan for meaningful consultation.

30. Climate change specialist (international, 1 pm). The specialist will have a higher degree in environmental policy, economics, natural resource management, or related area and at least 10 years of experience in designing and implementing climate change projects in a multisector development context at different scales (i.e., regional, national, subnational) in Asia. Related experience in Pakistan will be considered a strong advantage. Experience with multilateral development banks will be an advantage. The specialist will

(i) provide strategic and operational advisory support to assess climate change aspects during project design;

(ii) provide technical input to make the projects climate resilient, and design climate proofing aspects;

(iii) in consultation with relevant government agencies, identify project components that are sensitive to climate/weather conditions and develop a detailed work plan for carrying out a climate risk assessment and management study;

(iv) carry out the climate risk and management study, including the development of climate scenarios, assessment of potential risks of climate-sensitive project components to projected climate change, and the identification of possible adaptive measures to manage such risks; and

(v) prepare a detailed technical report on the study, including the overall methodology, data used, assumptions made, key findings and their implications for the project preparation, possible options to address impacts/risks to ensure climate-resilient design and associated costs, caveats/limitations of the study and their implication for the project preparation.

31. Environment specialist (international, 3 pm). The expert will have at least a bachelor’s degree in environmental engineering/science, and 15 years of relevant experience in carrying out environmental studies, including environmental impact assessments (EIA) for hydropower projects, especially for power transmission. The consultant will undertake the following tasks:

(i) assess and confirm that the proposed transmission components are not within the protected areas, if any; and if the proposed components lie within such zones, elucidate the regulatory procedures and protection measures needed to obtain environmental and forestry clearance from the relevant national and provincial government agencies;

(ii) prepare an EIA for transmission lines and the substations in accordance with ADB's SPS (2009), and any applicable procedures or guidelines for environmental assessment required by the government, considering the likely impacts associated with their locations, designs, and construction activities, as well as the long-term impacts during operation, including identification of environmental issues from activities directly induced by the project;

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(iii) prepare EIA for the project based on the detailed design, and ensure that necessary mitigation measures are in place; assess the adequacy of the cost estimates for the proposed EIA;

(iv) review WAPDA’s environmental management capability and recommend institutional strengthening measures;

(v) ensure that hydropower plant, transmission lines, and access roads specifically for the project must have environmental assessments;

(vi) undertake evaluation of an appropriate environmental flow calculation; (vii) ensure that the costs for implementing recommended environmental management

and monitoring plans and any capacity strengthening measures are included in the project's development costs;

(viii) recommend appropriate environmental mitigation measures for identified significant impacts, and monitoring plans to address these impacts; and assess the environmental benefits of the proposed activities and any capacity-strengthening measures that may be needed for implementing the environmental management and monitoring plans; and

(ix) ensure that the EIA is included in the project implementation contracts. 32. Energy economist (international, 1 pm). The specialist should preferably have a degree in accounting, economics, finance, or related fields, possessing at least 10 years of industry experience. The economist is expected to assess economic and sustainability issues and carry out sensitivity and risk analyses and possess deep understanding of the application of comprehensive life cycle assessments to the analysis of different energy and electricity generating options, including externalities, in an energy system context. The specialist should have knowledge of the financing of capital-intensive infrastructure projects as well as knowledge of energy analysis and planning tools. The specialist will

(i) prepare input for the assessment and forecast of the medium- to long-term hydropower energy supply demand balance based; develop an economic demand scenario based on market-based pricing, including recommendations for price adjustment while responding to market realities, for implementation over a reasonable time period, and a determination of the most optimum gas allocation and share of gas in the primary sources of energy;

(ii) coordinate with the financial management specialist to undertake assessment of the economic impact of hydropower and indigenous generation on circular debt and basket tariff;

(iii) undertake focused assessment related to the medium- to long-term impacts of major hydropower projects, programs, and policy developments;

(iv) carry out the economic analysis of the project to be undertaken by WAPDA—the model will be calculated for several technology, customer segmentation, and rollout options recommended for implementation;

(v) undertake economic analysis of each of the proposed investment components and assess their economic viability; provide the economic rationale for each component and the overall project, including a review of historical electricity demand and supply and projections for the sector nationally and regionally, and an alternatives and least-cost options analysis, in accordance with ADB Guidelines for the Economic Analysis of Projects (2017);

(vi) evaluate the project's direct and indirect impacts and carry out economic analysis of these impacts in terms of ENPV and EIRR in accordance with ADB's Guidelines for the Economic Analysis of Projects (2017);

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(vii) conduct cost-benefit analysis to assess the project’s economic benefits; and for the economic analysis of the project, the following tasks will need to be carried out: ▪ calculation of appropriate opportunity costs and conversion factors,

including but not limited to standard conversion factor, shadow exchange rate factor, shadow wage rate factor, and any other which may be considered applicable for the project;

▪ estimation of the capital expenditure and operating costs of the overall project and each subproject in economic prices (the economic costs should be exclusive of taxes and subsidies);

▪ estimation and recommendation of an appropriate proxy to account for the economic price of electricity by way of conducting a survey to assess consumer surplus and willingness-to-pay by the consumers;

▪ calculation of incremental benefits and costs arising from the project by comparing the “with project” scenario to the “without the project” scenario in accordance with guidance provided in ADB’s Guidelines for Economic Analysis of Projects (2017);

▪ estimation of direct incremental benefits and costs—including, but not limited to, operational cost savings, increase of revenue collection, decrease of technical and non-technical losses—in economic prices;

▪ estimation of indirect incremental benefits and costs—including, but not limited to, energy cost savings, improvement of efficiency across the energy resources value chain, indirect energy savings, increase of overall power system efficiency, avoided investment in power generation assets due to reduced demand and improved load management environmental benefits (e.g., CO2 emission reduction), national energy security, etc.—in economic prices;

▪ calculation of economic net incremental benefits to the project undertaken by WAPDA for implementing the project and calculation of the EIRR and ENPV for the project;

▪ sensitivity analysis of the economic viability of the project to key input parameters; and

▪ distribution analysis identifying the expected benefits and cost implications to all stakeholder groups.

(viii) in consultation with the social development specialist, incorporate poverty reduction impacts in accordance with ADB's Handbook on Integrating Poverty Impact Assessment in the Economic Analysis of Projects and estimate the PIR according to ADB's relevant guidelines and requirements;

(ix) develop the Microsoft Excel spreadsheet models for the economic analysis to make them transparent and self-explanatory before handing over the same to ADB; and

(x) prepare the draft project documentation for economic analysis and update the appendix and the tables and analyses to reflect ADB comments and suggestions.

33. Civil engineer hydropower (national, 8 pm). The civil/geotechnical expert will have a master’s level degree in civil, geotechnical, structural engineering, or relevant fields and at least 10 years of relevant experience in geotechnical assessments and design of foundations and structures preferably for energy projects. The expert shall work closely with the executing agency (EA) and relevant agencies to provide expert advice, and ensure the accuracy and quality of

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geotechnical, topographic, or hydrological surveys in accordance with international best practices. The expert will

(i) prepare the pre-design report comprising topographical survey and mapping, geological and geotechnical conditions, hydrology and flood studies, and sedimentation;

(ii) undertake studies related to power-generation planning and economic appraisal, and plant optimization, design and engineering;

(iii) prepare preliminary drawings, cost estimates, and construction schedules with critical path;

(iv) prepare terms of reference for an extensive and detailed design of the project; (v) assess geotechnical design parameters to allow for the safe design of foundation

and related components by the design team—the expert may rely on other members to be responsible for the design of elements of the project but has the overall responsibility to see that all design is undertaken as is necessary to achieve a project that meets acceptable engineering standards;

(vi) assess integrity of the design and provide inputs, and assist the team leader in the delivery of required outputs;

(vii) prepare the feasibility study, including cost estimates and scope, design configuration, support structure, foundations, and other civil works requirements for the power plant, transmission, and all support facilities;

(viii) provide inputs to the capacity development plan and assist in the conduct of training workshops as required;

(ix) provide design criteria and recommendations on required civil works (access road, site preparation, earthworks, excavation, internal access tracks, fences, tracker foundations, cable trench, hydro/transmission/distribution/solar/wind projects, support facilities, backfill, conversion block foundation, substation foundation, and structure);

(x) assist and provide inputs to the client in developing their feasibility study and basic engineering design, including due diligence on client-conducted site surveys such as geotechnical, topographic, and hydrological studies;

(xi) lead in the technical specifications and drawings of required foundations and structures for the projects, transmission system, substations, auxiliary, and support facilities; and

(xii) assist in the preparation of specifications and bidding documents, and assist the client in evaluating bids and preparing bid evaluation reports.

34. Renewable energy expert (national, 5 pm). The expert shall have a university degree in engineering or in related field, and 8 years of experience in design of solar PV power plants. The expert will assist the international expert and shall

(i) prepare feasibility study and lead the formulation of the conceptual engineering/system design, and configuration of the solar PV power plant, transmission system, auxiliary and support facilities;

(ii) review and prepare the project scope, capital and operating cost estimates, implementation schedule, contracting, and implementation arrangements;

(iii) develop and produce the technical specifications and required drawings of the solar PV plant, transmission system, and all associated systems and structures;

(iv) prepare global budget estimates with reference to international and domestic price trends for projects of similar scale and quality;

(v) prepare, in collaboration with relevant team members, the capacity development plan based on the capacity needs assessment; develop the training programs,

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including manuals and system design books for client personnel as well as operation and maintenance (O&M) manuals—the program will include risk management aspects;

(vi) lead the conduct of capacity building needs assessment for solar, and lead the conduct of workshops for the EA and other relevant agencies on solar technologies related to the assignment: technology, site selection criteria, due diligence process, operation and maintenance, design, implementation, and, management;

(vii) prepare the inputs for special sections of the bid documents (desired output specifications for the solar PV system, performance warranties, and related parameters to be used to ensure desired performance, specifications to shortlist bidders on technical commercial and financial parameters, special conditions of contract, etc.);

(viii) draft bidding documents, according to ADB’s guidelines; and (ix) prepare the relevant draft sections of ADB's report and recommendation of the

President (RRP), lead the preparation of reports, and assist ADB’s fact finding missions as required.

35. Financial management specialist (national, 2 pm). The expert will have at least a bachelor’s degree in economics/ finance, relevant professional qualification (e.g., ACCA, CFA, CPA), and 10 years of relevant experience in financial analysis of projects and corporate due diligence. The specialist will

(i) assess the government program’s adequacy and economic efficiency, results, and links with disbursements under the program, expenditures and financing, and implementation arrangements;

(ii) identify necessary measures and actions to be taken to strengthen the government investment program for inclusion in the program action plan;

(iii) assess the ability of the program’s fiduciary systems to manage fiduciary risks and provide reasonable assurance for the appropriate use of program funds;

(iv) prepare program expenditure and financing assessment; fiduciary systems assessment; financial management systems assessment for WAPDA; and risk mitigation plan, including capacity development activities for inclusion in the program action plan; and

(v) undertake financial and economic analysis of the program and the tranche. 36. Climate change specialist (national, 2 pm). The specialist will have a degree in environmental policy, economics, natural resource management, or related area and at least 5 years of experience in designing and implementing climate change projects in a multisector development context. The specialist will support the tasks of the international climate change specialist. 37. Social development specialist (national, 4 pm). The expert should have at least a bachelor’s degree in social development or related field, and 10 years of relevant experience. The consultant will support the tasks of the international social development specialist. 38. Procurement specialist (national, 3 pm). The expert should have at least a bachelor’s degree with 10 years of experience in procurement-related area. The consultant will support the tasks of the international procurement specialist, including the conduct of the poverty, social, and gender analysis on the ground.

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39. Environment specialist (national, 3 pm). The expert should have at least a bachelor’s degree in environmental engineering/science, and 8 years of relevant experience in carrying out environmental studies, including EIA/IEE, for infrastructure projects, especially for power transmission. The specialist will assist the international expert in assessing and confirming that the proposed transmission components are not within the protected areas, if any. The national consultant will support the international environment specialist in the following tasks:

(i) prepare an IEE for transmission lines and the substations in accordance with ADB's SPS (2009), and any applicable procedures or guidelines for environmental assessment required by the government, considering the likely impacts associated with their locations, designs, and construction activities, as well as the long-term impacts during operation, including identification of environmental issues from activities directly induced by the project;

(ii) prepare EMP for the project based on the detailed design, and ensure that necessary mitigation measures are in place;

(iii) review the NTDC’s environmental management capability and recommend institutional strengthening measures;

(iv) recommend appropriate environmental mitigation measures for identified significant impacts, and monitoring plans to address these impacts; and assess the environmental benefits of the proposed activities and any capacity-strengthening measures that may be needed for implementing the environmental management and monitoring plans; and

(v) ensure that the EMP is included in the project implementation contracts.

B. Individual Consultant 40. Gender specialist (national, 3 pm). The expert shall have at least a bachelor’s degree in social science, economics, or other related fields, or its equivalent and 7 years of relevant experience in carrying out gender assessment and analysis, preferably of state-owned companies and of consumer behavior. The expert will help conduct assessments and actions for the project, and support capacity development for WAPDA from a gender perspective. The national specialist will provide support to ensure that the project embodies commitment to achieving gender equality and women’s empowerment, and will undertake the following tasks:

(i) prepare sector assessment from the gender perspective, identifying gender-specific issues, including gender representative opportunities for employment and empowerment in decision making;

(ii) collect and analyze sex-disaggregated data for project preparation and design; (iii) review WAPDA’s human resource policy and practices, and propose gender-fair

and women-friendly policies/activities/measures; (iv) develop and assist in gender awareness-raising programs and training of

WAPDA's key management staff; (v) analyze data on percentage of women taking energy-related courses, such as

engineering, math, and science in technical and vocational education and training institutions and universities, and review these institutions and universities as potential partners of WAPDA to increase women’s technical participation in the gas sector;

(vi) assess the quality of existing reports and information/data generated by WAPDA from a gender perspective;

(vii) assess all potential positive and negative impacts of the project on consumer groups and WAPDA’s staff from a gender perspective;

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(viii) prepare socioeconomic profiles of the project-affected communities in the project areas, disaggregated by sex, following relevant ADB guidelines and publications, and government requirements;

(ix) prepare a set of recommendations to engender the transmission program based on the gender analyses conducted;

(x) identify opportunities for employment of local populations in the project, and any skills training that may help improve the capital base of the local populations (if applicable), with consideration of the different labor market potentials of male and female workers;

(xi) identify community development needs, specifically those that would directly benefit women, children, and vulnerable members of the population, that the project can potentially help address;

(xii) assess the gender category of the project and prepare a set of gender action/activities to meet gender category requirements; and

(xiii) assess WAPDA’s gender capacity for gender-sensitive planning and implementation, as well as the potential institutional partners and stakeholder groups, including relevant NGOs and communities.

IV. Gas Development Project

A. Consulting Firm 41. Gas storage systems specialist/team leader (international, 4 pm). The specialist will have a degree in engineering or management and have a minimum of 15 years of extensive experience in hydrocarbons sector with at least 5 years global experience in gas storage systems. The specialist will lead a team of experts to recommend gas storage options in Pakistan to balance a variable demand with a near-constant supply, speed up delivery, handle supply interruptions, and take advantage of expected price changes. The specialist will

(i) manage the consulting team and individual consultants hired for the project, and ensure quality outputs;

(ii) develop a detailed work plan and implementation schedule; (iii) review the status of gas transmission networks’ investment plan for development

of gas storage systems and evaluating the least-cost option for such facilities; (iv) recommend feasible storage modalities, options and types including analysis of

underground and above-ground options, keeping in view the geography and geology of Pakistan;

(v) prepare feasibility for three sites, develop project design alternatives and corresponding cost estimates, and suggest next steps and way forward;

(vi) assess availability of depleted oil and gas fields, aquifers, and salt caverns with respect to proximity to consuming regions or industry (natural gas-fired power plants), proximity to pipelines and distribution systems, geological porosity of how much volume can be stored, permeability, and confinement;

(vii) undertake study of operational risks, including hazard analysis in close coordination with relevant authorities and regulations required;

(viii) assess possibility of private sector participation, public private partnerships, and public sector funding;

(ix) assess and optimize design of (a) liquefied natural gas (LNG) terminal for LNG imports such as berth, unloading unit, retuning gas unit; and (b) LNG storage tank and associated facilities for gas supply such as forwarding pump unit,

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regasification unit, compressor station, boil-off gas (BOG) compressor unit, flare/vent stack, and miscellaneous utility unit; and

(x) prepare a description of the scope, physical characteristics, and technical specifications of the project, which shall include all physical and technical aspects, specifications and characteristics of the compressor stations, pipelines, and all associated facilities (e.g., project-related infrastructure and above-ground installations), activities during the different project phases, and the project schedule—this should be supplemented with maps that show the location in relation to the background environment of the area, and all information should be adequately cross referenced.

42. Hydrocarbons specialist (international, 2 pm). The specialist will have a master’s or higher degree in engineering, preferably with at least 10 years of international work experience in oil and gas; and hands-on experience in development and/or implementation of at least two gas storage system projects. The specialist will

(i) prepare technical feasibility of gas storage systems and associated facilities (pipeline network, etc.);

(ii) review the scope of investment; and prepare detailed cost estimates, detailed technical specifications for bidding documents, and implementation schedule and arrangements;

(iii) assess current pricing policies for gas storage facilities, and recommend cost reflective pricing mechanism for project sustainability;

(iv) prepare capacity building assessment and timebound action plan to ensure project sustainability;

(v) assess leakages of gas at various stages and conduct hazard analysis and mitigation measures; and

(vi) prepare a PCB and waste management plan of old and contaminated equipment, if required.

43. Energy economist (international, 1 pm). The specialist should preferably have a degree in accounting, economics, finance, or related fields, possessing at least 10 years of industry experience. The economist is expected to assess economic and sustainability issues, carry out sensitivity and risk analyses, and possess deep understanding of the application of comprehensive life cycle assessments to the analysis of different gas storage options, including externalities. The specialist should have knowledge of the financing of capital-intensive infrastructure projects as well as knowledge of energy analysis and planning tools. The specialist will

(i) prepare input for the assessment and forecast of the medium- to long-term gas supply demand balance based; develop an economic demand scenario based on market-based pricing, including recommendations for price adjustment while responding to market realities, for implementation over a reasonable time period, and a determination of the most optimum gas allocation and share of gas in the primary sources of energy;

(ii) coordinate with the financial management specialist to undertake assessment of the economic impact of gas storage facilities, circular debt, and basket tariff;

(iii) undertake focused economic assessment related to the medium- to long-term impacts of gas storage projects, programs, and policy developments;

(iv) carry out the economic analysis of the project to be undertaken by the ISGS—the model will be calculated for several technology, customer segmentation, and rollout options recommended for implementation;

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(v) undertake economic analysis of each of the proposed investment components and assess their economic viability; provide the economic rationale for each component and the overall project, including a review of historical electricity demand and supply and projections for the sector nationally and regionally, and an alternatives and least-cost options analysis, in accordance with ADB Guidelines for the Economic Analysis of Projects (2017);

(vi) evaluate the project's direct and indirect impacts and carry out economic analysis of these impacts in terms of ENPV and EIRR in accordance with ADB's Guidelines for the Economic Analysis of Projects (2017);

(vii) conduct cost-benefit analysis to assess the project’s economic benefits; and for the economic analysis of the project, the following tasks will need to be carried out: ▪ calculation of appropriate opportunity costs and conversion factors,

including but not limited to standard conversion factor, shadow exchange rate factor, shadow wage rate factor, and any other which may be considered applicable for the project;

▪ estimation of the capital expenditure and operating costs of the overall project and each subproject in economic prices (the economic costs should be exclusive of taxes and subsidies);

▪ estimation and recommendation of an appropriate proxy to account for the economic price of electricity by way of conducting a survey to assess consumer surplus and willingness-to-pay by the consumers;

▪ calculation of incremental benefits and costs arising from the project by comparing the “with project” scenario to the “without the project” scenario in accordance with the guidance provided in ADB’s Guidelines for Economic Analysis of Projects (2017);

▪ estimation of direct incremental benefits and costs—including, but not limited to, operational cost savings, increase of revenue collection, decrease of technical and non-technical losses—in economic prices;

▪ estimation of indirect incremental benefits and costs—including, but not limited to, energy cost savings, improvement of efficiency across the energy resources value chain, indirect energy savings, increase of overall power system efficiency, avoided investment in power generation assets due to reduced demand and improved load management environmental benefits (e.g., CO2 emission reduction), national energy security, etc.—in economic prices;

▪ calculation of economic net incremental benefits to the project undertaken by the ISGS for implementing the project, and calculation of the EIRR and ENPV for the project;

▪ sensitivity analysis of the economic viability of the project to key input parameters; and

▪ distribution analysis identifying the expected benefits and cost implications to all stakeholder groups.

(viii) in consultation with the social development specialist, incorporate poverty reduction impacts in accordance with ADB's Handbook on Integrating Poverty Impact Assessment in the Economic Analysis of Projects and estimate the PIR according to ADB's relevant guidelines and requirements;

(ix) develop the Microsoft Excel spreadsheet models for the economic analysis to make them transparent and self-explanatory before handing over the same to ADB; and

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(x) prepare the draft project documentation for economic analysis and update the appendix and the tables and analyses to reflect ADB comments and suggestions.

44. Financial management specialist (international, 1 pm). The specialist should have a master’s or higher degree in finance or related field, preferably recognized professional qualifications (e.g., ACCA, CFA, CIMA, FCA), or an advanced degree in finance, and at least 10 years of relevant working experience in financial analysis of projects (including financial due diligence and modelling), financial management assessment (including financial projections of a corporate entity), and financial management reforms. The specialist will

(i) prepare the financial management assessment of the ISGS, including to (a) evaluate results of financial management assessments conducted by ADB or/and other agencies; (b) assess capacity for planning and budgeting, management and financial accounting, reporting, auditing, internal controls, and information systems; (c) develop disbursement and funds-flow arrangements; and (d) conclude on the financial management risk rating, guidelines, and technical guidance on financial management assessment;

(ii) assess and recommend the financial management reforms and tariff needed for advancing the commercial operation of the subprojects; and recommend a capacity management program, and mitigate other risks identified in the analysis;

(iii) conduct financial valuation (financial cost-benefit analyses) using FIRR, EIRR, and WACC computations in order to evaluate the financial viability of the project following ADB's guidelines;

(iv) prepare relevant reports and estimates backed with detailed justification with source information and models, which include cost estimates and fund flow analysis, financial management assessment, and financial projection and analysis; and

(v) conduct an economic evaluation the project considering economic costs and benefits (including carbon credits) following ADB’s Guidelines for the Economic Analysis of Projects (1997), Handbook on Economic Evaluation of Environmental Impacts, and Financial Management and Analysis of Projects (2005).

45. Social safeguards and development specialist (international, 2 pm). The specialist will have at least a university degree in community development, anthropology, sociology, or other related field; and 5 years of relevant experience in resettlement planning and implementation and addressing issues for development projects. The expert will help conduct assessments and actions for the project, and support capacity development for the ISGS from a gender perspective. The international specialist will provide support to ensure that the project embodies commitment to achieving gender equality and women’s empowerment, and will undertake the following tasks:

(i) analyze legal and regulatory frameworks on social safeguards and recommend gap-filling measures as needed;

(ii) identify potential land acquisition and resettlement impacts of the project, and conduct preparatory surveys as per the requirements of ADB’s SPS (2009);

(iii) conduct meaningful consultations with affected households and other relevant stakeholders;

(iv) incorporate the costs of all mitigation measures in the project cost estimates; (v) prepare social safeguards documents—e.g., land acquisition and resettlement

(LAR) plan, social due diligence report; and (vi) collect and analyze sex-disaggregated data for project preparation and design.

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46. Environment specialist (international, 2 pm). The expert will have an advanced degree in environmental studies (or other relevant field) from an accredited educational institution; and at least 15 years working experience, including practical experience in environmental monitoring, reporting, stakeholder consultations, and preparing EIA and EMP reports. The expert should be familiar with projects financed by international financial institutions. The expert will undertake an EIA study in accordance with, but not limited to, the scope of the services listed below, and prepare an EIA report using the outline in ADB’s SPS (2009). The EIA is required to suit the project and meet ADB requirements. The study shall include, but not limited to, preparation and execution of a scoping exercise, baseline studies, study of alternatives, data analyses, impact assessment, and the identification of applicable environmental mitigation measures to compile the EMP. The expert will undertake the following tasks:

(i) perform a scoping exercise to (a) determine the study (data) boundaries, i.e., to clarify what shall and shall not be included in the EIA study; (b) determine the environmental issues (including direct, indirect, and cumulative impacts) that will be addressed in the EIA, together with the required level of detail and level of aggregation; (c) identify applicable local (communal and municipal), regional, national, and international regulations and standards, and clarify their applicability to the EIA and the project; (d) provide a preliminary assessment of available baseline information and its use for the EIA; (e) select and clarify the assessment methods to be used; (f) include a preliminary identification of project alternatives, which shall be included in the EIA study; (g) outline the conditions and requirements for the baseline studies, as well as a baseline study plan; and (h) enable mutual understanding and commitment among ADB, ISGS, and other competent authorities, consultants, and other stakeholders on the scope, process, and methodology of the EIA;

(ii) present relevant baseline information considering the probable regions of influence of the project; and collect data on relevant physical, biological, and socioeconomic conditions—data collection shall draw upon available information from state agencies, research organizations, digital resources, geographic information system databases, public third parties, and feasibility studies supplemented as necessary by field investigations, including sampling and lab analyses;

(iii) perform an environmental audit of the existing facilities to determine the existence of any areas where the project may cause or is causing environmental risks or impacts—a typical environmental audit report includes the following major elements: (a) executive summary; (b) facilities description, including both past and current activities; (c) summary of national, local, and any other applicable environmental laws, regulations, and standards; (d) audit and site investigation procedure; (e) findings and areas of concern; and (f) corrective action plan that provides the appropriate corrective actions for each area of concern, including costs and schedule;

(iv) perform a full impacts analysis for the construction and operation stages of the project, and propose mitigation measures to minimize and/or remove the impacts; conduct noise and air quality modelling studies for the compressor stations, including any other equipment or facility likely to affect background noise levels and air quality;

(v) identify any associated facilities and assess the impacts of those; (vi) assess environmental impacts of the operation and its ancillary activities, and

discuss cumulative environmental impacts; (vii) perform a systematic comparison of different project alternatives, whereby the

environmental consequences and impacts per alternative are identified, assessed,

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and compared—the study shall support the project with the development of a base case design and rule out some design alternatives that are not viable from an environmental and/or social perspective; and the study of alternatives shall consider, but may not limit itself to, the pipeline route and project sites, technologies, and no project;

(viii) perform a risk-based analysis of the likely risks of the project in terms of explosions, leakages, and emergency scenarios during the operation phase;

(ix) propose state-of-the-art mitigation measures to minimize, mitigate, or altogether remove the impacts;

(x) prepare the EIA report as required by ADB’s SPS (2009)—the EIA should contain maps and figures to explain the details, and all supporting data and studies performed as part of the EIA should be duly annexed;

(xi) as part of the EIA, prepare an EMP including the appropriate mitigation technologies, an environmental monitoring plan with monitoring indicators, and institutional arrangements and responsibilities (including cost estimates and training); as part of the EMP, prepare an outline framework for the site-specific EMPs to be prepared by the contractor as part of the EIA appendix; and ensure that the EIA contains an environmental management cost (i.e., the cost for implementing the EMP in the field);

(xii) prepare the project environment climate mitigation and adaptation assessment; (xiii) assess the possibility of obtaining clean development mechanism (CDM)-related

support for possible greenhouse gas (GHG) reductions; (xiv) conduct an institutional environmental capacity review with regards to the

implementation capacity of ISGS for environmental safeguards; prepare a capacity development program to deal with each of the identified capacity gaps; and

(xv) prepare a grievance redress mechanism that is operational for the project, including community representation along the entire alignment of the pipeline.

47. Climate change specialist (international, 1 pm). The specialist will have a higher degree in environmental policy, economics, natural resource management, or related area; and at least 10 years of experience in designing and implementing climate change projects in a multisector development context at different scales (i.e., regional, national, subnational) in Asia. Related experience in Pakistan will be considered a strong advantage. Experience with multilateral development banks will be an advantage. The specialist will

(i) provide strategic and operational advisory support to assess climate change aspects during project design;

(ii) provide technical input to make the projects climate resilient and design climate proofing aspects;

(iii) in consultation with relevant government agencies, identify project components that are sensitive to climate/weather conditions, and develop a detailed work plan for carrying out a climate risk assessment and management study;

(iv) carry out the climate risk and management study, including the development of climate scenarios, assessment of potential risks of climate-sensitive project components to projected climate change, and the identification of possible adaptive measures to manage such risks; and

(v) prepare a detailed technical report on the study, including the overall methodology, data used, assumptions made, key findings, and their implications for the project preparation, possible options to address impacts/risks to ensure climate-resilient design and associated costs, caveats/limitations of the study, and their implication for the project preparation.

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48. Gas storage systems expert (national, 6 pm). The expert will have least a bachelor’s degree with 8 year of experience in related area. The national consultant will assist the international gas storage systems specialist and will

(i) review status of gas storage options; (ii) review technical specifications and present capacity of the existing transmission

and distribution gas utilities, and evaluate the potentials for gas storage to ensure more efficient operations;

(iii) determine the general technical feasibility of developing the gas storage systems; (iv) assess power losses at various stages and conduct hazard analysis; and (v) determine ancillary infrastructure that need to be developed.

49. Hydrocarbons expert (national, 8 pm). The expert will have a bachelor’s or higher degree in engineering or related field, and at least 10 years of experience in oil and gas sector. The expert will

(i) support the consulting team in collecting and processing major technical data and information;

(ii) provide inputs to prepare the gas sector assessment; (iii) assist in reviewing the status of the gas transmission network plans for development

of storage systems and expansion, and defining/evaluating the least-cost option for such gas infrastructure development;

(iv) support in reviewing the scope and capital, and preparing cost estimates, implementation schedule and arrangements, and contracting; and

(v) support in assessing current natural gas pricing policies and recommending adequate pricing mechanism for project sustainability.

50. Financial management specialist (national, 3 pm). The expert will have at least a bachelor’s degree in economics/ finance, relevant professional qualification (e.g., ACCA, CFA, CPA), and 10 years of relevant experience in financial analysis of projects and corporate due diligence. The national specialist will

(i) assess the government program’s adequacy and economic efficiency, results, and links with disbursements under the program, expenditures and financing, and implementation arrangements;

(ii) identify necessary measures and actions to be taken to strengthen the government investment program for inclusion in the program action plan;

(iii) assess the ability of the program’s fiduciary systems to manage fiduciary risks and provide reasonable assurance for the appropriate use of program funds;

(iv) prepare program expenditure and financing assessment; fiduciary systems assessment; financial management systems assessment for ISGS; and risk mitigation plan, including capacity development activities for inclusion in the program action plan; and

(v) undertake financial and economic analysis of the program and the tranche. 51. Social development specialist (national, 3 pm). The expert should have at least a bachelor’s degree in social development or related field, and 10 years of relevant experience. The national consultant will support the tasks of the international social development specialist. 52. Procurement specialist (national, 4 pm). The expert should have at least a bachelor’s degree, with 10 years of experience in procurement-related area. The national consultant will support the tasks of the international procurement specialist.

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53. Environment specialist (national, 6 pm). The expert should have at least a bachelor’s degree in environmental engineering/science, and 8 years of relevant experience in carrying out environmental studies, including EIA for gas storage projects, especially for power transmission. The consultant will assist the international expert in assessing and confirming that the proposed storage and transmission components are not within the protected areas, if any. The national specialist will support the international environment specialist in the following tasks:

(i) prepare an EIA for transmission lines and the substations in accordance with ADB's SPS (2009), and any applicable procedures or guidelines for environmental assessment required by the government, considering the likely impacts associated with their locations, designs, and construction activities, as well as the long-term impacts during operation, including identification of environmental issues from activities directly induced by the project;

(ii) prepare EIA for the project based on the detailed design, and ensure that necessary mitigation measures are in place;

(iii) review the environmental management capability of the ISGS and recommend institutional strengthening measures;

(iv) recommend appropriate environmental mitigation measures for identified significant impacts, and monitoring plans to address these impacts; and assess the environmental benefits of the proposed activities and any capacity-strengthening measures that may be needed for implementing the environmental management and monitoring plans; and

(v) ensure that the EIA is included in the project implementation contracts.

B. Individual Consultant 54. Gender specialist (national, 2 pm). The expert shall have at least a bachelor’s degree in social science, economics, or other related fields, or its equivalent; and 7 years of relevant experience in carrying out gender assessment and analysis, preferably of state-owned companies and of consumer behavior. The expert will help conduct assessments and actions for the project, support capacity development for the ISGS from a gender perspective and provide support to ensure that the project embodies commitment to achieving gender equality and women’s empowerment. The national consultant will

(i) prepare sector assessment from the gender perspective, identifying gender-specific issues, including gender representative opportunities for employment and empowerment in decision making;

(ii) review the human resource policy and practices of the ISGS, and propose gender-fair and women-friendly policies/activities/measures;

(iii) develop and assist in gender awareness-raising programs and training of key management staff of the ISGS;

(iv) analyze data on percentage of women taking energy-related courses, such as engineering, math, and science in technical and vocational education and training institutions and universities, and review these institutions and universities as potential partners of the ISGS to help increase women’s technical participation in the gas sector;

(v) assess the quality of existing reports and information/data generated by ISGS from a gender perspective;

(vi) assess all potential positive and negative impacts of the project on consumer groups and ISGS staff from a gender perspective;

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(vii) prepare socioeconomic profiles of the project-affected communities in the project areas, disaggregated by sex, following relevant ADB guidelines and publications, and government requirements;

(viii) prepare a set of recommendations to engender the transmission program based of the gender analyses conducted;

(ix) identify opportunities for employment of local populations in the project, and any skills training that may help improve the capital base of the local populations (if applicable) with consideration of the different labor market potentials of male and female workers;

(x) identify community development needs, specifically those that would directly benefit women, children, and vulnerable members of the population, which the project can potentially help address;

(xi) assess the gender category of the project and prepare a set of gender action/activities to meet gender category requirements;

(xii) assess the gender capacity of the ISGS for gender-sensitive planning and implementation, as well as the potential institutional partners and stakeholder groups, including relevant NGOs and communities; and

(xiii) collect and analyze sex-disaggregated data for project preparation and design.

V. Power Distribution Enhancement (Tranche 2)

A. Individual Consultants 55. Power distribution specialist/team leader (international, 3 pm). The team leader shall have a bachelor or higher degree in engineering, with preferably at least 10 years of relevant managerial/supervisory experience in power distribution projects and operations. The expert shall have worked on aerial bundled conductors (ABC) projects dealing with preparation, implementation, and management and operations in power distribution utilities. The consultant shall also have experience in leading reorganization and structural improvements. Previous work experience in Pakistan and with other developing countries, as well as with ADB and other international financial institution (IFI)-financed projects, is desirable. The specialist will undertake the following tasks:

(i) lead in the preparation of feasibility study and conduct of project due diligence; (ii) as the team leader, manage individual consultant in the team and ensure the

quality and timely delivery of outputs; (iii) review and analyze existing metering and distribution system, including

conducting relevant onsite visit(s) in order to assess existing state of the metering, communication, and data management systems used by respective DISCOs, focusing on four main areas: (a) electricity consumption recording (including meters and associated equipment), (b) communication infrastructure, (c) data/information management system and billing system, and (d) load management; and analyze the billing system at the company level in respective DISCOs;

(iv) assess advanced metering solutions and aerial bundled conductors appropriate for the project area, and carry out technical/economic/financial comparison of various options to make recommendation on most suitable solutions; and define technical and functional specifications relevant to Pakistani market and project area;

(v) assess requisite regulatory, legal, and institutional arrangements, develop a

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detailed project implementation plan, and identify main suppliers; and (vi) prepare a PCB and waste management plan of old and contaminated

equipment, if required. 56. Procurement specialist (international, 2 pm). The key expert shall have a bachelor or higher degree in engineering, finance, economics, law, or relevant discipline, with preferably at least 10 years of relevant work experience in the power sector. The expert shall have experience in procurement of advanced metering infrastructure (AMI) and aerial bundled cables (ABCs), IFI-financed projects, and developing appropriate contracting strategy. Previous work experience in Pakistan and with other developing countries, as well as with ADB and other IFI-financed projects, is desirable. Expert shall have experience in developing procurement documents for at least two similar projects (AMI and ABC). The specialist will prepare draft bidding documents for the project, based on the selected technology and solutions, following ADB’s Procurement Guidelines (2017) or as amended. The draft bidding documents will be revised and updated, incorporating comments by DISCOs and ADB. 57. Financial management specialist (international, 2 pm). The expert shall preferably have a master’s or higher degree in finance, economics, or relevant discipline, with at least 10 years of work experience in the power sector. The expert shall have experience in preparing investment plan, financial plan, financial analyses, and undertaking financial management assessment in power distribution utilities. Previous work experience in Pakistan and with other developing countries, as well as with ADB and other IFI-financed projects, is desirable. The detailed terms of reference and inputs required from the expert are as follows:

(i) carry out the financial analysis of the project to be undertaken by the respective DISCOs—the model will be calculated for several technology, customer segmentation, and rollout options recommended for implementation;

(ii) prepare the overall project cost estimates and detailed cost estimates using excel spreadsheet, separating foreign exchange and local currency, including physical and price contingencies, interest during construction, commitment fee, and other financing charges; identify applicable local taxes and duties;

(iii) assist in preparing a financing plan for the project, including proposed ADB lending, different cofinancing options and counterpart funds for local currency expenditures;

(iv) calculate the weighted average cost of capital for the project; (v) undertake financial analysis and cash flow projections for the project, and

assess the Project’s financial viability, in accordance with ADB’s Financial Management and Analysis Guidelines (2007)—the financial analysis of the project will include the following tasks: ▪ estimation of the capital expenditure and operating costs of the project (the

financial costs should be tax inclusive); ▪ tariff analysis for each of the DISCOs for implementing respective

subproject to consider cost recovery and affordability issues; ▪ estimation of direct and indirect incremental benefits and costs (including

energy cost savings, operational cost savings, increase of revenue collection, decrease of technical and nontechnical losses) arising from the project and each subproject by comparing the “with project” scenario to the “without project” scenario in accordance with ADB’s Financial Management and Analysis Guidelines (2007);

▪ estimation of financial net incremental benefits to the overall project and each subproject undertaken by the respective DISCOs for implementing the

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project, and calculation of the FIRR and financial net present value for the project; and

▪ sensitivity analysis of the financial viability of the project to key input parameters.

(vi) develop a fund flow mechanism for the project; (vii) develop the Microsoft Excel spreadsheet models for the financial analysis to

make them transparent and self-explanatory before handing over the same to ADB;

(viii) prepare the project documentation for financial analysis and the preliminary tables and analyses including, but not limited to, project cost estimates table, financing plan, cash flow projections, and sensitivity analysis;

(ix) update the periodic financing request report (PFRR) appendix, and the tables and analyses to reflect ADB comments and suggestions;

(x) conduct the financial management assessment of each of the DISCOs, covering: (a) financial management structure and capacity, including internal control mechanisms; (b) accounting, reporting, and auditing policies and standards of the DISCOs; and (c) historical financial statements review and performance analysis, in accordance with ADB's Financial Management and Analysis Guidelines (2007);

(xi) prepare projected financial tables for each DISCO, including 15 years pro-forma financial statements; and recommend financial indicators and covenants for each DISCOs;

(xii) prepare the project documentation on financial management assessment and financial performance review and projection in accordance with ADB’s Financial Management and Analysis Guidelines (2007); and

(xiii) update the project documentation and the tables and analyses to reflect ADB comments and suggestions.

58. Energy economist (international, 1 pm). The key expert shall have a master’s or higher degree in economics or relevant discipline, with preferably at least 10 years of work experience in power distribution projects and operations. The expert shall have work experience in conducting economic analyses, but not limited to electricity tariff analysis in power distribution utilities. Previous work experience in Pakistan and with other developing countries, as well as with ADB and other IFI-financed projects, is desirable. The expert will

(i) carry out the economic analysis of the project to be undertaken by the respective DISCOs—the model will be calculated for several technology, customer segmentation, and rollout options recommended for implementation;

(ii) undertake economic analysis of each of the proposed investment components and assess their economic viability; provide the economic rationale for each component and the overall project, including a review of historical electricity demand and supply and projections for the sector nationally and regionally, and an alternatives and least-cost options analysis, in accordance with ADB Guidelines for the Economic Analysis of Projects (2017);

(iii) evaluate the project's direct and indirect impacts and carry out economic analysis of these impacts in terms of ENPV and EIRR in accordance with ADB's Guidelines for the Economic Analysis of Projects (2017);

(iv) conduct cost-benefit analysis to assess the project’s economic benefits; and for the economic analysis of the project, the following tasks will need to be carried out:

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▪ calculation of appropriate opportunity costs and conversion factors, including but not limited to standard conversion factor, shadow exchange rate factor, shadow wage rate factor, and any other which may be considered applicable for the project;

▪ estimation of the capital expenditure and operating costs of the overall project and each subproject in economic prices (the economic costs should be exclusive of taxes and subsidies);

▪ estimation and recommendation of an appropriate proxy to account for the economic price of electricity by way of conducting a survey to assess consumer surplus and willingness-to-pay by the consumers;

▪ calculation of incremental benefits and costs arising from the project by comparing the “with project” scenario to the “without the project” scenario in accordance with ADB’s Guidelines for Economic Analysis of Projects (2017);

▪ estimation of direct incremental benefits and costs—including, but not limited to, operational cost savings, increase of revenue collection, decrease of technical and non-technical losses—in economic prices;

▪ estimation of indirect incremental benefits and costs—including, but not limited to, energy cost savings, improvement of efficiency across the energy resources value chain, indirect energy savings, increase of overall power system efficiency, avoided investment in power generation assets due to reduced demand and improved load management environmental benefits (e.g., CO2 emission reduction), national energy security, etc.—in economic prices;

▪ calculation of economic net incremental benefits to the project undertaken by the respective DISCOs for implementing the project, and calculation of the EIRR and ENPV for the project;

▪ sensitivity analysis of the economic viability of the project to key input parameters; and

▪ distribution analysis identifying the expected benefits and cost implications to all stakeholder groups.

(v) in consultation with the social development specialist, incorporate poverty reduction impacts in accordance with ADB's Handbook on Integrating Poverty Impact Assessment in the Economic Analysis of Projects and estimate the PIR according to ADB's relevant guidelines and requirements;

(vi) develop the Microsoft Excel spreadsheet models for the economic analysis to make them transparent and self-explanatory before handing over the same to ADB; and

(vii) prepare the draft project documentation for economic analysis and update the appendix and the tables and analyses to reflect ADB comments and suggestions.

59. Social development specialist (national, 2 pm). The specialist will have at least a university degree in community development, anthropology, sociology, or other related field; and 5 years of relevant experience in resettlement planning and implementation and addressing issues for development projects. The expert will help conduct assessments and actions for the project, and support capacity development for the ISGS from a gender perspective. The national consultant will provide support to ensure that the project embodies commitment to achieving gender equality and women’s empowerment, and will undertake the following tasks:

(i) analyze legal and regulatory frameworks on social safeguards; and recommend gap-filling measures, as needed;

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(ii) identify potential land acquisition and resettlement impacts of the project; and conduct preparatory surveys, as per the requirements of ADB’s SPS (2009);

(iii) conduct meaningful consultations with affected households and other relevant stakeholders;

(iv) incorporate the costs of all mitigation measures in the project cost estimates; (v) prepare social safeguards documents (e.g., LAR plan, update the Land Acquisition

Resettlement Framework (LARF), social due diligence report, among others); and (vi) collect and analyze sex-disaggregated data for project preparation and design.

60. Environment specialist (national, 2 pm). The expert should have at least a bachelor’s degree in environmental engineering/science; and 8 years of relevant experience in carrying out environmental studies, including IEE for infrastructure projects, especially for power transmission. The consultant will assist the international expert in assessing and confirming that the proposed transmission components are not within the protected areas, if any. The national specialist will support the international environment specialist in the following tasks:

(i) prepare an IEE for AMI and ABC deployment in accordance with ADB's SPS (2009), and any applicable procedures or guidelines for environmental assessment required by the government, considering the likely impacts associated with their locations, designs, and construction activities, as well as the long-term impacts during operation, including identification of environmental issues from activities directly induced by the project;

(ii) prepare EMP for the project based on the detailed design; and ensure that necessary mitigation measures are in place;

(iii) review environmental management capability and recommend institutional strengthening measures of the DISCOs;

(iv) recommend appropriate environmental mitigation measures for identified significant impacts, and monitoring plans to address these impacts; and assess the environmental benefits of the proposed activities and any capacity-strengthening measures that may be needed for implementing the environmental management and monitoring plans; and

(v) ensure that the EMP is included in the project implementation contracts. 61. Gender specialist (national, 1 pm). The expert shall have at least a bachelor’s degree in social science, economics, or other related fields, or its equivalent; and 7 years of relevant experience in carrying out gender assessment and analysis, preferably of state-owned companies and of consumer behavior. The expert will help conduct assessments and actions for the project, and support capacity development for DISCOs from a gender perspective. The national consultant will provide support to ensure that the project embodies commitment to achieving gender equality and women’s empowerment, and will undertake the following tasks:

(i) prepare sector assessment from the gender perspective, identifying gender-specific issues, including gender representative opportunities for employment and empowerment in decision making;

(ii) review the human resource policy and practices of the DISCOs, and propose gender-fair and women-friendly policies/activities/measures;

(iii) develop and assist in gender awareness-raising programs and training of DISCOs’ key management staff;

(iv) analyze data on percentage of women taking energy-related courses, such as engineering, math, and science in technical and vocational education and training institutions and universities; and review these institutions and universities as potential partners of DISCOs to mainstream gender in the gas sector;

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(v) assess the quality of existing reports and information/data generated by the ISGS from a gender perspective;

(vi) assess all potential positive and negative impacts of the project on consumer groups and DISCOs’ staff from a gender perspective;

(vii) prepare socioeconomic profiles of the project-affected communities in the project areas following relevant ADB guidelines and publications, and government requirements;

(viii) prepare a set of recommendations to engender the transmission program based on the gender analyses conducted;

(ix) identify opportunities for employment of local populations in the project, and any skills training that may help improve the capital base of the local populations (if applicable);

(x) assess the gender category of the project as Effective Gender Mainstreaming (EGM), and prepare a set of gender action/activities to meet EGM requirements;

(xi) assess DISCOs’ gender capacity for gender-sensitive planning and implementation, as well as the potential institutional partners and stakeholder groups, including relevant NGOs and communities; and

(xii) collect and analyze sex-disaggregated data for project preparation and design.

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RISK ASSESSMENT AND RISK MANAGEMENT PLAN

Risk Description Rating Mitigation Measures Responsibility

Ballooning circular debt threatening the financial sustainability of the energy sector, and counterpart financing not available for ensuing projects

Substantial ADB is leading the energy reforms program under IMF umbrella to complement sustained investments in the sector. Measures are being effected to regain sector finances.

Governement of Pakistan

Pakistan’s inability to import fuel, coal, and LNG and pay its foreign liabilities

Moderate Cost-reflective tariffs are being instituted for imported LNG, and recent increase of 143% in gas tariff bears the testimony.

Governement of Pakistan

Inadequate ownership and participation of key government agencies and staff to support processing and implementation of policy and planning updates and investment proposals

Moderate Sustained engagement with the economic ministries, Task Force on Energy, relevant development partners, and the executing and implementing agencies responsible for the delivery of energy development issues confirm the scope of project preparation and targeted investments.

Governement of Pakistan, TA consultants

ADB = Asian Development Bank, IMF = International Monetary Fund, LNG = liquefied natural gas, TA = technical assistance. Source: ADB.