Ex-Ante Evaluation (for Japanese ODA Loan)
South Asia Division 1, South Asia Department, JICA
1. Basic Information
Country: India
Project Name: Project for Renovation and Modernization of Umiam-Umtru Stage-III
Hydroelectric Power Station
Loan Agreement: October 29, 2018
2. Background and Necessity of the Project(1) Current State and Issues of the Power Sector in India
In India, energy consumption continues to increase along with rapid
economic growth in recent years, and in 2015 it became the third largest
electricity consuming country in the world after China and the US (Source:International Energy Agency). According to the Central Electricity Authority ofIndia (Hereinafter referred to as “CEA”), the overall electricity supply and demandin India with actual values in fiscal 2016 are a supply shortage of 0.7% (the supply
amount of 1,135,334 GWh in contrast with the demand amount of 1,142,929
GWh), and a supply capacity shortage at peak times of 1.6% (supply capacity of156,934 MW in contrast with the demand amount of 159,542 MW), both of whichhave an improving tendency compared with those values of fiscal 2015 (a supply
shortage of 2.1%, and a supply capacity shortage at peak times of 3.2%), but it isstill in short supply. Furthermore, according to the Draft National Electricity Planannounced by the CEA in December 2016, it is anticipated that the overall
electricity demand in India will be 2,132,000 GWh in 2026 and the peak demand
will be 317,674 MW, both of which are about twice as large as those of fiscal 2016,
making improvement in the power supply capacity an urgent task.
Located in the northeastern part of India, Meghalaya State has the 23rdlargest land area (22,428 km2) and the 23rd largest population (3,211,000 people
as of 2016) out of the total of 29 states and 7 union territories in India.
Development in the northeastern states including Meghalaya State is delayedcompared with other regions, making power shortage a serious issue. Under
these circumstances, the Government of India emphasizes the development of
the northeastern states including Meghalaya State. It is also known that there aremany hilly areas in the state and it is strongly affected by the monsoon, leading to
an average annual rainfall of 12,000 mm (Source: State Government ofMeghalaya) which is the highest in India and making the state rich in potential
hydropower resources climatically/topographically. The total capacity of thefacilities owned by the state is composed of hydropower/small hydropower;
therefore, hydropower is the most important power source in the state. However,
the total generation capacity of the state as of July 2017 is only about 350 MW(the practical capacity considering aged deterioration situation of each plant isabout 311 MW) in contrast with the peak demand of about 410 MW (expectedvalue for fiscal 2017), and an electric power supply shortage exceeding 5%-15%of the demand is still observed every year even now (Source: Preparatory survey
report of the Project). To cover the electricity shortfalls, power interchange
contracts are made with the NTPC, etc. to purchase relatively expensive
electricity, creating the necessity to secure hydropower sources with low power
generation cost. While it is anticipated that the electricity demand will increase to2,049 GWh and the peak demand will increase to 444 MW in fiscal 2019, thestate government is planning to increase the supply capacity by about 47 MW
through the construction of new solar/small hydroelectric power plants, etc., buthydroelectric power generation has a large fluctuation of output depending on theseason; therefore, it is urgent to repair the existing power plants in parallel inorder to cover the demand increase.
Umiam-Umtru stage III hydroelectric power station (30 MW x 2 units) is oneof the main hydraulic power sources that accounts for about 20% of the facility
capacity of 350 MW held by the state, but aged deterioration has been
progressing remarkably since the commencement of its operation in 1979. Oneof the two generator units is frequently shut down due to damages of the water
turbines, etc., and the remaining unit often has unscheduled shutdowns. For thisreason, the annual power generation amount has fallen to less than 40% of theoriginal amount provided at the commencement of operation.
Joint action plan of the Ministry of Power in the Government of India and theState Government of Meghalaya (24 × 7 Power for All Meghalaya, in March 2015)
clearly states the necessity for renovation of the Umiam-Umtru stage IIIhydroelectric power station (30 MW x 2 units) as the power supply improvementmeasures. Project for Renovation and Modernization of Umiam-Umtru Stage-III
Hydroelectric Power Station (hereinafter referred to as “the Project”) is designed
to improve the intrastate power supply capacity by carrying out the renovation ofUmiam-Umtru stage III hydroelectric power station (30 MW x 2 units) around thebasin of the Umiam River/Umtru River in the state of Meghalaya and to contributeto the industrial development and the improvement in living standards in the state,making the project itself positioned as an important approach in the development
policy of the Government of India and the State Government of Meghalaya.
(2) Japan’s and JICA’s Cooperation Policies for the Power Sector and the Priority ofthe Project
In Japan’s Country Assistance Policy for India (March 2016), promoting
connectivity in the northeastern states region by developing infrastructure suchas electricity is listed as the priority area as “reinforcement of connectivity.” Also,
JICA Country Analysis Paper for India (March 2012) provides an analysis that anincrease in power supply capacity and diversification of power supply are priority
issues to accommodate rapidly increasing electricity demand, and the Project isconsistent with these policies and analyses. Moreover, the Project is considered
to contribute to Goal 7 of the SDGs “Ensure access to affordable, reliable,sustainable and modern energy for all” and Goal 13 “Take urgent action tocombat climate change and its impacts.” Note that there were 80 ODA loan
approval cases totaling 1,243.1 billion yen to the power sector in India as ofSeptember 2018.
(3) Other Donors’ Activity
The World Bank is providing support for the power transmission anddistribution network reinforcement project in the northeastern states including
Meghalaya State and Assam State. Moreover, the Asian Development Banksupports Assam State to reinforce its power sector, as well as providing
assistance for the development of power transmission and distribution networks,
enhancement of the capacity development of the Assam State Power Generation
Company Limited, hydroelectric power generation, energy efficiency
improvement, etc.

3. Project Description(1) Project Objective
The objective of the Project is to improve the power shortage of Meghalaya by
renovating, modernizing, and upgrading Umiam Umtru Stage III HydroelectricPower Plant, situated by the Umtru River, thereby contributing to the industrial
development and living standard improvement in the State and optimum
utilization of water resources.
(2) Project Site/Target Area
Meghalaya State(3) Project Componentsa) Procurement/installation/repair/trial operation of electric/mechanicalequipmentb) Procurement/installation/repair of civil equipment (penstock/gates, etc.)c) Consulting services: detailed design, bidding assistance, construction
supervision, organizational capacity development, etc.
(4) Estimated Project Cost
7,088 million yen (of which, the ODA Loan amount is 5,497 million yen)(5) Schedule
October 2018 – November 2023 (62 months in total). Completion of trial
operation of power plants (in May 2023) shall be the completion of the project.
(6) Project Implementation Structure1) Borrower: President of India
2) Guarantor: None
3) Executing agency: Meghalaya Power Generation Corporation Limited4) Operation and Maintenance Agency: Meghalaya Power Generation
Corporation Limited will continue to perform the operational maintenance andmanagement after the completion of the Project.
(7) Collaboration and Division of Roles with Other Projects and Donors
As JICA supported the “Umiam Hydro Power Station Renovation Project”(completed in 2002) in 1997 and the “Umiam Stage II Hydro Power Station R&M
Project” (completed in 2012) in 2004, the Project mutually complements theseprojects to contribute to stabilization/expansion of the amount of electricity supply
in the state.
(8) Environmental and Social Consideration/Poverty Reduction/Social Development
1) Environmental and Social Consideration(i) Category: C(ii) Reason for Categorization
The Project is considered to impose minimum undesirable impacts on theenvironment according to the JICA Guidelines for Environmental andSocial Considerations (April 2010).
2) Cross-cutting Issues:
The Project is categorized as a project that contributes to climate change
measures (mitigation). The estimated value of the mitigation effect (theamount of greenhouse gas emission reduction) through the Project is126,385 tons/year of CO2 equivalent.
3) Gender Category: (GI) (Gender Mainstreaming Needs Survey/AnalysisProject)<Description of activities and reason for classification>
Although needs for the gender mainstreaming were investigated in thepreparatory survey, implementation of specific measures to contribute togender equality and women's empowerment was not carried out in theProject; therefore, it is categorized as a “Gender Mainstreaming Needs
Survey/Analysis Project.”(9) Other Important Issues
None in particular
4. Targeted Outcomes(1) Quantitative Effects
Performance Indicators (Operation and Effect Indicator)

Indicator
Unplanned Outage Hours(hours/year)
Maximum Output (MW)
Number of Circuit Breaker Trips andEquipment Failures Caused by
Human Error (times)
Repetition of training conductedby leader (times)
Certification of new leader byexamination (persons)Annual generation (GWh/year)**Power Plant Operating Rate (%)**
Operating Time (hours/year)**Overflow Amount Except for Times
of Flooding (m3)***Baseline(Actual value in 2017)
Unit 1

7,613.18

Unit 2

4,034.37
60*Target (2025)[Expected value
2 years after projectcompletion]
8866

Not measured

0Not conducted

3Not conducted

665.3
14Unit 1Unit 20

1,701
3,160

157.5
305,3120* Peak supply capacity is defined as “the maximum power output that can be supplied at peaktimes.” Although Unit 1 frequently stops due to failure, there was a period when it was operated
temporarily, and therefore 60 MW is the baseline value according to the definition.
** It is measured as a reference value, since the amount of annual electric power generation,
power plant operating rate, and operating time are under the influence of the water amountavailable for power generation.
*** The amount of overflow during the time of flooding is an indicator for the purpose of confirming
the repair effect of civil engineering equipment and is considered to be a reference value.

(2)

Qualitative EffectIntrastate power supply stabilization, improvement in the living standards ofresidents, and industrial development of the state(3) Internal Rate of Return
Under the conditions indicated below, the economic internal rate of return (EIRR)
and the financial internal rate of return (FIRR) will be 13.6% and 5.0%,
respectively.
[EIRR]
Cost: Project cost (excluding tax), operation and maintenance expenses

Benefits: Reduction of substitutional goods (amount of electricity purchased frompower supply owned by the central government, operational maintenance andmanagement cost)
Project Life: 35 years[FIRR]
Cost: Project cost, operation and maintenance expenses
Benefits: Revenue from the sales of electricity obtained by the renovation
Project Life: 35 years
5. Prerequisites / External Factors
None in particular
6. Lessons Learned from Past Projects
The results of the ex-post evaluation of “Umiam Hydro Power Station Renovation
Project” in India (Evaluation year: fiscal 2006), etc. list some necessities as a lessonsuch as the implementation of overhaul (disassembly, inspection, repair) and routine
maintenance inspection/thorough data record that were carried out by the executing
agency, in addition to the periodic renewal of major equipment/parts.
At Umiam-Umtru stage III hydroelectric power station, no overhaul has been
conducted even once since the commencement of its operation, and inspections havenot been carried out regularly. For this reason, the Project intends to develop thecapacity for proper implementation of facility maintenance/management work throughconsulting services.
7. Evaluation Results
The Project, to renovate the Umiam-Umtru stage III hydroelectric power stationthat has an important role as an intrastate power source and to prevent its long-term
downtime beforehand, is specified as a priority project in the electric power policy of
the Government of India and the State Government of Meghalaya. It is also consistent
with the support policies/analyses of Japan and JICA that set forth the infrastructure
support such as electricity in the northeastern states. Furthermore, since it isconsidered to contribute to Goal 7of the SDGs “ensuring access to affordable, reliable,sustainable, and modern energy for all,” and Goal 13 “urgent action to deal with climatechange and its impacts,” it is highly necessary for JICA to support the implementationof the Project.
8. Plan for Future Evaluation(1) Indicators to be Used
Same as 4. (1) - (3)(2) Timing of the Next Evaluation
Ex-post evaluation: 2 years after project completion
END