INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Public Disclosure Copy Report No.: ISDSC672 Date ISDS Prepared/Updated: 15-Feb-2013 Date ISDS Approved/Disclosed: 15-Feb-2013 I. BASIC INFORMATION A. Basic Project Data Country: Sierra Leone Project ID: P120304 Project Name: Sierra Leone Energy Access Project (P120304) Task Team Karan Capoor Leader: Estimated 25-Mar-2013 Estimated 16-May-2013 Appraisal Date: Board Date: Managing Unit: AFTG2 Lending Specific Investment Loan Instrument: Sector: General energy sector (100%) Theme: Infrastructure services for private sector development (100%) Financing (In USD Million) Financing Source Amount BORROWER/RECIPIENT 0.00 Public Disclosure Copy International Development Association (IDA) 25.00 Total 25.00 Environmental B - Partial Assessment Category: Is this a No Repeater project? B. Project Objectives The Project Development Objective are to: (i) increase access and reduce losses in electricity supply in Freetown Capital Western Area; (ii) improve management and implementation capacity of the National Power Authority. C. Project Description Component 1: Improvement of Electricity Supply in Urban Areas Overall losses in NPA currently stand at around 37%-40% for 2012, most of which are technical losses. The distribution grid requires well over $170 million of investment in the Greater Freetown area alone. Some of the most urgently needed system investments are in the process of having specifications prepared under the recently approved Sierra Leone Infrastructure Trust Fund (SLIDF) energy access project. SLIDF TA resources will be used to carry out a condition assessment of the entire Freetown distribution network and to develop a comprehensive investment plan of prioritized Public Disclosure Copy and optimal next investments. The plan, to be based on system studies as well as the existing JICA funded load flow study, will exactly define network sections, routes, lines and equipment needing urgent upgrade to remove serious bottlenecks in the system and to upgrade quality of supply, including the optimal mix of investment in primary and secondary Medium Voltage (MV), Low Voltage (LV) networks and protection systems. Apart from forming the basis for investment under the IDA project, this systematic approach will ensure a sound basis for further financing of the network rehabilitation and upgrade going forward, including from other development partners. A major component of the IDA project will be to upgrade and rehabilitate key primary and secondary MV network infrastructure, including aged MV substations and feeder lines in the Greater Freetown area. Due to decades of neglect, primary MV substations are in a state of disrepair, substation batteries and circuit breakers are mostly not functional, and DC supplies nonoperational. Sections of the system are overloaded, protection relays are faulty and there is a serious risk of infrastructure damage occurring as a result of protection system or circuit breaker failure. The envisaged upgrade will require that certain existing links to be replaced with appropriately sized cables/overhead lines, and will help reduced technical losses and enhance reliability. Appropriately matching needed investments in MV feeder upgrade to appropriate investments in corresponding substations will enable systematic system upgrade and protection of infrastructure. The upgrade will also be complementary to network investments effected under the SLIDF energy access project and will form part of a systematic approach to rehabilitate the Freetown network on an incremental basis. In particular it should be noted there has been an increase in demand in certain areas from newly established commercial operations and consideration will be given to expanding the network to meet this demand. Quality of electricity service in Freetown is poor. Low voltage conditions caused by feeder overloading are present in most areas of the city and regular outages occur due to power shortages as Public Disclosure Copy well as system unreliability. Undersized transformers and excessive LV feeder lengths result in low voltage conditions. Suitable areas for secondary MV and LV system upgrade will be defined in the investment plan developed under the SLIDF energy access project, including consideration of high consumption areas in order to maximize investment benefit and positively impact the commercial performance of NPA. A $5 million IDA investment in this area, matched by coordinated and well- targeted LV upgrade investments supported by the Islamic Development Bank Investments in LV system upgrades will be necessary to reduce technical losses and to improve customer service. As a means to improving commercial performance, NPA has embarked on a program to gradually replace all credit meters with pre-paid meters. This strategy has already paid dividends in terms of reduced non-technical losses and improved collection ratio. The Project will complement NPA’s ongoing re-metering program by financing supply and installation of approximately 10,000 pre-paid meters. NPA currently has no means of precisely locating high loss areas in the network. Therefore, the Project will finance supply and installation of a further 500 statistical meters to complement the investment made under the SLIDF. NPA management and staff currently have little or no ability, tools or resources to properly manage rapid customer response for even minor repairs or complaints. Under the Project, a Working Capital Fund will be established through which there is ready access to working capital in order to enable rapid customer response, make timely repairs and provide access to spare parts. Component 2: NPA Capacity Enhancement and Performance Improvement Public Disclosure Copy While Component 1 of the IDA operation will begin a strategic program of investment in distribution, it is not sufficient by itself to put the sector on a sustainable path. NPA itself needs to be turned around with renewed skills including in management, planning, systems, processes and implementation capacity. Improving the institutional capacity of NPA is key to stabilizing and expanding the energy sector in Sierra Leone. NPA currently has insufficient institutional capacity to execute its mandate. As a result of the 10 year war and subsequent neglect of the utility, staff capacity is limited in terms of numbers and technical expertise. No training was provided in the 10 years subsequent to the end of the war in 2002 Staff members are under resourced and ill-equipped while being fully occupied resolving ongoing emergency situations on the network. Currently there are serious gaps in NPA’s planning and maintenance capabilities. Component 3: Technical Assistance on Options for Power System Development Owing to the enormity of the challenges in the sector, key institutions with limited staff resources find themselves often more reactive rather than proactive, and in fire-fighting mode rather than acting strategically. These institutions are stretched to the maximum in prioritizing their scarce human resources to focus strategically on planning future directions for the sector and selecting future public and private investments in generation, transmission and distribution. Technical assistance under IDA will be provided for feasibility, assessment and/or study of the most promising opportunities in power generation, and/or related transmission and distribution, which may include major infrastructure. D. Project location and salient physical characteristics relevant to the safeguard analysis (if known) Project activities, in particular civil works under Component 1, will be undertaken in the Greater Freetown Area. Freetown is the capital city of Sierra Leone and is located in the Western Area Public Disclosure Copy (which is divided into two districts: Western Area Rural and Western Area Urban. Freetown is on a peninsula with an area of 557 km² and a population estimated by the UN at 875,000 (2009 figures). E. Borrowers Institutional Capacity for Safeguard Policies The project will be implemented by the Sierra Leone National Power Authority (NPA). The NPA has experience working with the Bank through the Power and Water Project and the soon to be approved SLIDF. However, under Component 2 of the Energy Access Project, an external consultant firm with utility management experience will be appointed by the NPA Board to improve performance. The contractor's responsibilities will also include implementation of safeguard policies, including resettlement F. Environmental and Social Safeguards Specialists on the Team Moses Yao Duphey (AFTN3) Angela Nyawira Khaminwa (AFTCS) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes The safeguard category of the Project is B, BP 4.01 since there are no significant and/or irreversible adverse environmental and social issues expected from electricity infrastructure components financed under the proposed Public Disclosure Copy project. In general, the project is expected to positively impact the beneficiary communities and individuals in a number of ways, while potential negative environmental and social impacts of the proposed project activities are expected to be small-scale and site-specific. The proposed Project will develop an Environment and Social Management Framework (ESMF) to guide the approach toward environmental management and resettlement action once the specific investment areas are selected. The ESMF will be disclosed in-country and in the Infoshop before appraisal. Natural Habitats OP/BP 4.04 No The distribution line will not pass through any forested areas hence no impacts on forests are expected nor the substation to be upgraded is close to any forest reserve. Forests OP/BP 4.36 No The distribution line will not pass or even be close to any protected areas, including those with any high biodiversity. Also, the substation to be upgraded is not close to any critical habitat, which is as a consequence may negatively be affected by the project. Public Disclosure Copy Pest Management OP 4.09 No No herbicides or pesticides will be used in the maintenance of the right of way of the distribution line. Physical Cultural Resources OP/ Yes There will be earthworks involved. A chance BP 4.11 find procedure will be included in the contract for the contractor and if needed work on the project will be stopped in case physical cultural heritage sites are discovered. Important sites will be salvaged. Indigenous Peoples OP/BP 4.10 No No indigenous peoples as determined by OP 4.10 are in the project area. Involuntary Resettlement OP/BP Yes Under the project, civil works will be 4.12 undertaken in a populated urban environment. These works may result in loss of shelter, loss of access to assets, and/or loss of income sources or means of livelihood for project affected people. The specific sites of the works have yet to be identified and therefore a Resettlement Policy Framework (RPF) will be prepared prior to appraisal. Safety of Dams OP/BP 4.37 No N/A Public Disclosure Copy Projects on International No N/A Waterways OP/BP 7.50 Projects in Disputed Areas OP/BP No N/A 7.60 III. SAFEGUARD PREPARATION PLAN A. Tentative target date for preparing the PAD Stage ISDS: 15-Mar-2013 B. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing1 should be specified in the PAD-stage ISDS: Environmental and Social Management Framework and A Resettlement Policy Framework will be prepared starting early 2013 and will be completed for Bank review by end-February. IV. APPROVALS Task Team Leader: Name: Karan Capoor Approved By: Regional Safeguards Name: Alexandra C. Bezeredi (RSA) Date: 15-Feb-2013 Coordinator: Sector Manager: Name: Lucio Monari (SM) Date: 15-Feb-2013 Public Disclosure Copy 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons.