INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 03/14/2013 Report No.: AC6886 1. Basic Project Data Original Project ID: P118737 Original Project Name: Energy Efficiency Facility for Industrial Enterprises Country: Uzbekistan Project ID: P133633 Project Name: Additional Financing Energy Efficiency - Industrial Enterprises Task Team Leader: Pekka Kalevi Salminen Estimated Appraisal Date: February 21, Estimated Board Date: April 25, 2013 2013 Managing Unit: ECSEG Lending Instrument: Specific Investment Loan Sector: Energy efficiency in Heat and Power (100%) Theme: Micro, Small and Medium Enterprise support (80%);Climate change (20%) IBRD Amount (US$m.): 0 IDA Amount (US$m.): 100 GEF Amount (US$m.): 0 PCF Amount (US$m.): 0 Other financing amounts by source: BORROWER/RECIPIENT 53.13 Financing Gap 0.00 53.13 Environmental Category: F - Financial Intermediary Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] or OP 8.00 (Rapid Response to Crises and Emergencies) 2. Project Objectives Project Objectives. The Project Development Objective (PDO) is and will remain the same: to improve energy efficiency in industrial enterprises by designing and establishing a financing mechanism for energy efficiency investments in Uzbekistan. 3. Project Description Project Description. The changes proposed under the additional financing include: (i) increase of the current limit on individual sub-borrowers up to US$10 million while the aggregate amount of sub-loans to the group of affiliated companies out of proceeds of the Additional Financing shall not exceed US$30 million; (ii) a new closing date for the Additional Financing, and (iii) The eligibility criteria concerning associated parties will be revised to: (a) Industrial Enterprises (IEs) should not have more than 10% of shares in the Participating Banks (PBs); and (b) PBs should not have more than 10% ownership stake in the IEs. These limitations are in line with the prudential norms and terms of Central Bank of Uzbekistan (CBU) regulations (No.556 dated February 27, 2009). The proposed project would support the following components: a) Component A (US$1 million) – scale up the strengthening the capacity of the MoE and the PCU for Project management, coordinatio and monitoring and evaluation, through the provision of goods, consultants' services and training, notably further energy efficiency capacity building for industrial associations, local energy auditors, energy specialists of the industrial enterprises, and financial intermediaries; post sub-projects commissioning test on selective basis in order to ensure the sub-projects reach announced EE; maintain the Project Coordinating Unit under the MoE to coordinate implementation of the Additional Financing. b) Component B (US$99 million) – operation of a credit facility for the Participating Banks for the provision of Sub-loan(s) to Beneficiaries, enabling such Beneficiaries to finance the costs related to the carrying out of industrial energy efficiency sub-projects. Typical sub-projects include, inter alia: (i) installation of variable speed drives, (ii) replacement of outdated boilers, (iii) installation of energy management systems, (iv) recovery and utilization of exhausted gases via installation of the small steam turbines; etc. 4. Project Location and salient physical characteristics relevant to the safeguard analysis The subprojects location is not known as they will be selected during the project implementation. 5. Environmental and Social Safeguards Specialists Ms Roxanne Hakim (ECSSO) Mr Arcadii Capcelea (ECSEN) 6. Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) 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/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: As specified above in point 3, the project will support various energy efficiency subprojects: (i) installation of variable speed drives, (ii) replacement of outdated boilers, (iii) installation of energy management systems, (iv) recovery and utilization of exhausted gases via installation of the small steam turbines; etc. Typical environmental impacts associated with these sub-projects might include: noise, dust and disposal of nonhazardous wastes common to the installation of new equipment and possibly waste management for the energy inefficient equipment being removed from service. There may be some issues of combustion gas emissions associated with the installation of new boilers, kilns or other types of heat treating equipment. On occasion there may be issues of asbestos removal from older equipment that has been insulated. If high voltage equipment is involved (replacement of transformers, induction furnaces etc.) there may be some occupational health and safety aspects for workers in the presence of the older equipment (electromagnetic fields or possibly PCBS) or in testing the newly installed system. The anticipated adverse environmental impacts will occur mainly during the construction stage and are likely to be site-specific and manageable. Also, as the supported activities will be done within the boundaries of the existing industrial enterprises, it is expected the project will not affect human populations or involve conversion or degradation of natural habitats, or have a negative impact on forest ecosystems. At the same time, the project would provide large environmental benefits in terms of improvement of air quality, and reduction of greenhouse gas emissions. The expected outcomes from the activities to be supported with additional financing will be more than twenty energy efficiency sub-projects with approximately 200 thousand megawatt hours (MWh) of energy saving potential and about 400 thousand tons of CO2 emissions reduction cumulatively. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The project long term and indirect impacts are positive and related to better air quality at the local level and reduction of greenhouse gas emissions. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. N/A 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The original project has been classified as Category FI for environmental assessment purposes and will remain the same for the proposed AF. The new sub-projects under AF will be category B/C and will have predominantly positive impacts on the environment and human health from decreased amount of fossil fuels burned resulting from enhanced energy efficiency, and from reduced air pollution at the local level. As the nature of the works proposed under the AF will not change, existing Environmental Management Framework for the initial project will be applied also for the AF. Similarly, the there are no changes to existing implementation arrangements. The conducted Bank missions in April and September 2012 concluded overall the project environmental management performance is at satisfactory level. The Participating Banks (PBs) have adequate knowledge on EA process. All approved sub-projects have been preliminary assessed from environmental point of view, providing them an environmental category. For all of them the applicants filled out Environmental Eligibility Checklists, provided copies of necessary documents specified in the Project Operational Manual and EMF: environmental permits and approvals, monitoring reports, results of environmental auditing, along with decisions issued by the State Ecological Expertise, regarding the proposed investments. Visited industrial enterprises and discussions with the PBs and enterprises' Management and Environmental Specialists as well as with the State Environmental Inspectors, show that industrial enterprises do not have outstanding environmental issues and operate based on required environmental authorizations, licenses and permits. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The EMF for the initial project was disclosed in the country and in the WB Infoshop and consulted with the key national stakeholders. For the selected subprojects the EMF stipulates if a PB gets an application that is determined to be a World Bank Category B project, at least one public consultation on the EMP will be required. The PB staff responsible for safeguards have been trained how to instruct enterprises to conduct a public consultation and prepare the associated documentation that would be required according to World Bank guidelines. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Yes Date of receipt by the Bank 03/04/2010 Date of "in-country" disclosure 03/09/2010 Date of submission to InfoShop 04/09/2010 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? No Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Sector Manager (SM) Yes review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the Yes credit/loan? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Yes Infoshop? Have relevant documents been disclosed in-country in a public place in a Yes form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities Yes been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project Yes cost? Does the Monitoring and Evaluation system of the project include the Yes monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the Yes borrower and the same been adequately reflected in the project legal documents? D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Pekka Kalevi Salminen 03/08/2013 Environmental Specialist: Mr Arcadii Capcelea 03/08/2013 Social Development Specialist Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Ms Agnes I. Kiss 03/12/2013 Comments: Sector Manager: Mr Ranjit J. Lamech 03/13/2013 Comments: