40275 INTEGRATEDSAFEGUARDSDATA SHEET APPRAISAL STAGE Report No.: Date ISDS PrepareWpdated: February 9,2007 I. BASIC INFORMATION A. Basic Project Data / Country: Bolivia I Project ID: PI04092 I Project Name: Bolivia Urban Wastewater Methane Gas Capture Project Task Team Leader: Daniel Hoornweg Estimated Appraisal Date: April 26, 2007 ERPA Signature: May 3, 2007 Managing Unit: LCSUW Lending Instrument: Community I Development Carbon Fund Sector: Sewerage (100%) Theme: Climate Change (P) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 0.00 CDCF Amount (US$m.): 2.08 Other financing amounts by source: BORROWER 0.00 MUNICIPALITIES OF BORROWING COUNTRY 0.00 LOCAL SOURCES OF BORROWING COUNTRY 1.48* 1.48 Environmental Category: B -Partial Assessment Simplified Processing Simple [ ] Repeater [ ] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [XI * The project developer SAGUAPAC willfinance the installation of the methane capture andflaring equipment, a substantial part of the cost of the infrastructure is already provided for under the IDA "Bolivia UrbanInfrastructure" Project. B. Project Objectives The overarching objective of the proposed Project is to help mitigate global climate change, by facilitating the use of market-based mechanisms sanctioned under the Kyoto Protocol through support to the urban sanitation sector in Bolivia. To this end, the Project is anticipated to displace over 26 thousand tons of C02equivalent per year of operation, rising to over 44 thousand tons by 2012. The Project will also reduce the local emissions of gasses generated from the treatment facilities, which currently carry unpleasant odours to nearby residential areas. The project will contribute to the further development of the international carbon market in Bolivia through the supply of Emissions Reductions under the Clean Development Mechanism (CDM) as set forth under Article 12 of the Kyoto Protocol. The key performance indicator is the creation of VERs through the contribution of methane. The project will also enhance the efficacy of the Bolivia Urban Infrastructure Project in its aims of improving Santa Cruz's urban sanitation infrastructure by providing an additional source of foreign currency to supplement the investment capital SAGUAPAC requires to extend its urban sanitation service coverage. C. Project Description The proposed project will purchase C02 equivalent (tC02e) Certified and Verified Emissions Reductions (CERs and VERs) from the capture of methane gas at the SAGUAPAC wastewater treatment facilities in Santa Cruz. Purchase of Carbon Emissions Reductions The project would provide for all primary treatment anaerobic lagoons at SAGUAPAC owned and operated wastewater treatment facilities in Santa Cruz. These lagoons would be covered with 'geomembrane' sheeting, capturing all produced methane gas. This methane would then be flared off, converting it to carbon dioxide (with a global warming potential 21 times lower then that of methane). The project would reduce over 527 thousand tC02e over 12 years. The World Bank would purchase, on behalf of the Community Development Carbon Fund, a proportion of these emissions reductions in the form of Certified, and Verified Emissions Reductions (CERs and VERs), and the Bio Carbon Fund, in the form of VERs. As a Community Development Carbon Fund project, this project will incorporate a Community Benefits Plan, developed by the operator SAGUAPAC to improve sanitation services in the poor neighbourhoods surrounding the wastewater treatment facilities. The development and implementation of this plan will be financed from a premium over and above the market price for ERs paid by the CDCF to fund such projects. The community benefits include activities such as neighbourhood improvement, increasing sanitation coverage in the area, providing more adequate street drainage to remove a common foci of infection, and improving the sanitation conditions in local hospitals and schools. D. Project location In the municipality of Santa Cruz, the sanitation sector faces immediate challenges. Santa Cruz has a population of about 1.3 million, growing at an annual rate of over 6%. Sanitation services in Santa Cruz are provided by 10 cooperatives of which the largest is SAGUAPAC, serving 65% of the city's area. Sewerage coverage in SAGUAPAC's service area is only about 50%, giving Santa Cruz an overall level of sewerage coverage of only 32%. In addition to the immediate public health and environmental effects associated with low sewerage coverage, sewage infiltration into the city's main aquifer will result, within a few years, in irreversible damage. There is therefore an urgent need to increase the coverage of Santa Cruz's sewerage system to avoid the much larger investments associated with developing an entirely new water supply source for the city. E. Borrower's Institutional Capacity for SafeguardPolicies SAGUAPAC has an Environment and Labour Security Department that will enforce the current environmental legislation as well as implement the specific environmental guidelines laid out by the manuals. Moreover, the project will be monitored during its execution by the Works Supervision Unit to ensure prevention and mitigation of risks. F. Environmental and Social Safeguards Specialists Environmental Specialist: Juan D. Quintero (EASRE) Social Specialist: Haddy Sey (ENVCF), and Ruth Llanos (LCSSO) 11. SAFEGUARDPOLICIES THATMIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP4.01) X Natural Habitats (OP/BP4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP7.50) X Projects in Disputed Areas (OP/BP 7.60) X Environmental Category: B 111. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD- stage ISDS would be prepared: December, 2006 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: April, 2007 C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing1should be specified in the PAD- stage ISDS. February -April, 2007 IV. APPROVALS Daniel A. Hoornweg LCSUW 0 Juan David Quintero EASRE 0 ENVCF 05/29/2007 Francis Ghesquiere IReminder: 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.