INTEGRATED SAFEGUARDS DATA SHEET APPRAISAL STAGE Report No.: ISDSA166 Public Disclosure Copy Date ISDS Prepared/Updated: 11-Jul-2012 I. BASIC INFORMATION 1. Basic Project Data Country: Indonesia Project ID: P121003 Project Name: ID - Chiller Energy Efficiency Project (P121003) Task Team Leader: Johannes Heister Estimated Appraisal Date: 04-Jun-2012 Estimated Board Date: 04-Sep-2012 Managing Unit: EASIS Lending Instrument: Specific Investment Loan Focal Area: Climate change Sector: General energy sector (50%), Energy efficiency in Heat and Power (50%) Theme: Climate change (70%), Other environment and natural resources management (30%) Financing (In USD Million) Financing Source Amount BORROWER/RECIPIENT 19.40 Global Environment Facility (GEF) 3.66 Montreal Protocol Investment Fund 1.00 Total 24.06 Environmental Category: B - Partial Assessment Is this a Repeater project? No 2. Global Environmental Objective(s) To support the replacement of inefficient CFC and HCFC-based chillers with energy efficient CFC/HCFC-free chillers and to contribute to a reduction of consumption and use of ozone depleting substances, greenhouse gas emissions and demand for electricity. Public Disclosure Copy 3. Project Description ICEEP pursues this objective by supporting the installation of new energy efficient chillers with a grant and by a variety of promotional activities that are designed to transform the chiller market in Indonesia. ICEEP is designed to overcome the barriers of investment in energy efficient chillers through demonstration, awareness raising, capacity building and a partnership with a new KfW-supported program for emission reduction investments (ERI). While ICEEP’s grant component can only support a limited number of eligible chillers, the project’s promotional components target the wider chiller market and generally awareness of energy efficiency opportunities in large buildings. ICEEP therefore includes the following four components: (i) Financial incentive for chiller replacement, (ii) measurement and monitoring of chillers, (iii) technical assistance and awareness raising activities and (iv) project management. Component 1: Financial Incentives for Chiller Replacement – This component will provide a grant to chiller owners of approximately 15% of the cost of a new energy efficient chiller – which will leverage the beneficiaries’ own funding contribution. Component 2: Measurement and Monitoring – This component will measure and monitor the old and new chillers to determine their eligibility and energy savings. Component 3: Technical Assistance – This component will provide information to chiller owners and stakeholders on technical aspects of chiller replacement and energy savings in buildings, assist the project management unit (PMU), promote the project and provide training. Component 4: Project Management – This component covers operational and management costs and supports the PMU. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The program will be implemented nationwide 5. Environmental and Social Safeguards Specialists Andrew Daniel Sembel (EASIS) Krisnan Pitradjaja Isomartana (EASIS) Page 1 of 3 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/BP 4.01 Yes EA is a process whose breadth, depth, and type of analysis depend on the nature, scale, and potential environmental impact of the proposed project. These impacts are very limited and transitory for chiller replacement activities. The EA has identified these potential impacts and included mitigation measures in an environmental management framework for the project. Public Disclosure Copy Natural Habitats OP/BP 4.04 No The project will not affect any protected areas, known natural habitats, or established or proposed critical natural habitats. Forests OP/BP 4.36 No The project will not finance activities that involve forest areas or natural habitats as defined under the policy. Pest Management OP 4.09 No The project will not finance procurement of pesticides or pesticide application equipment. Physical Cultural Resources OP/BP 4.11 No The project will not adversely affect sites with archeological, paleontological, historical, religious, or unique natural values. Indigenous Peoples OP/BP 4.10 No The project will not affect Indigenous Peoples as defined in the policy, and project activities will not limit or prevent access to natural resources vital to the sustainability of their culture and livelihoods. Involuntary Resettlement OP/BP 4.12 No The project will not finance any land acquisition. Safety of Dams OP/BP 4.37 No The project will not finance construction or rehabilitation of dams as defined under this policy. Projects on International Waterways OP/BP No The project does not involve international waterways as defined under the policy. 7.50 Projects in Disputed Areas OP/BP 7.60 No The project is not located in any known disputed areas as defined under the policy. II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the Restructured project. Identify and describe any potential l arge scale, significant and/or irreversible impacts: The project is an environment project to reduce CFC and HCFC emissions from old chillers, which damage the ozone layer and contribute to global climate change. The project will support the replacement of existing inefficient chillers with energy efficient chillers. Reduced energy consumption of new chillers will result in additional carbon dioxide emission reduction. The investment component of the Project will entail dismantling and removal of existing and installation of new industrial-sized chillers in large buildings (office buildings, malls …) and industrial facilities; the specific project sites will be confirmed during project implementation. The environmental impacts considered include ozone depletion, global climate change, as well as noise, solid waste, hazardous materials (e.g. asbestos, if any), handling of ODS-based refrigerants, and occupational health and safety standards. Chillers and their replacement can have local environmental and health impacts: noise Public Disclosure Copy (movement and operation of large equipment can generate local dust and noise pollution), liquids (lubricating oils and greases contained in old chillers together with the refrigerant), solid waste (scrap material and asbestos from buildings parts that may have to be removed to move chillers), destruction of ODS (the incineration of ODS, if not carefully controlled in an appropriate facility, can lead to release of harmful substances, such as dioxins and furans), emissions from power plants (chillers consume large quantities of electric power, however, the project will reduce electricity consumptions and ensure that old inefficient chillers cannot be reused). An environmental management framework has been developed for the project. The framework requires (i) an assessment of environmental impacts related to removal of old chillers, handling of used refrigerants, and installation of new equipment; (ii) compliance with proper procedures for all chiller replacement activities including monitoring and reporting, and (iii) preparation of an environmental management plan for each chiller replacement activity and site. The framework includes relevant information on safeguard policies and proper procedures, environmental impacts and mitigation measures, responsibilities and institutional arrangements and a template for environmental management plans. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: No negative indirect or long-term environmental or social impacts are foreseen by this operation. 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 Ministry of Environment (MoE) has been empowered by the Government of Indonesia with overall responsibility for the implementation of the Montreal Protocol. The National Ozone Unit (NOU), established within MoE, is responsible for day-to-day operations of the Montreal Protocol Program under the guidance of a National Steering Committee, which includes the concerned ministries. Through the implementation of the ODS project, the NOU has gained experience with the implementation of Bank projects. A Project Management Unit (PMU) will be established within the NOU for the day-to-day management of the project. The NOU has prepared an Environmental Management Framework (EMF) for the project. Potential environmental impacts and mitigation measures are identified in the EMF. They are reflected in the project design and must be included in the Environmental Management Plan (EMP) for each chiller replacement activity and site, a draft of which is included int he EMF. An EMP will be prepared by each chiller owner, reviewed by the NOU and becomes part of the legal agreement with the chiller owner. The EMP will spell out the environmental obligations and accountabilities of each chiller owner related to the chiller replacement activities at the site. The cost of the specified safeguard activities will be borne by each chiller owner and are included in the project budget as part of chiller owner's co-financing. The EMF includes capacity building and institutional strengthening measures, and provisions for the monitoring of EMP implementation. The PMU will organize technical workshops for chiller owners, suppliers and other stakeholders, which will include a section on the decommissioning of old chillers and the installation of new chillers, the proper handling of refrigerants, and other Page 2 of 3 environmental requirements. They will also cover the required documentation to be provided by the chiller owners, in particular the chiller replacement implementation plan and the EMP. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Key stakeholders such as building owners and managers, chiller supplies, and related organizations were consulted during the project preparation phase; and the draft EMF was disclosed and comments received were integrated in the final version of the EMF. The PMU will further strengthen participation of, and consultations with, all stakeholders as part of the outreach activities during project implementation. Public Disclosure Copy B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 09-May-2012 Date of "in-country" disclosure 09-May-2012 Date of submission to InfoShop 03-May-2012 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors If the project triggers the Pest Management and/or Physical Cultural Resources policies, 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 Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes [ ] No [ ] NA [ ] The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank's Infoshop? Yes [ ] No [ ] NA [ ] Have relevant documents been disclosed in-country in a public place in a form and language Yes [ ] No [ ] NA [ ] that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for Yes [ ] No [ ] NA [ ] the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Yes [ ] No [ ] NA [ ] Does the Monitoring and Evaluation system of the project include the monitoring of safeguard Yes [ ] No [ ] NA [ ] impacts and measures related to safeguard policies? Public Disclosure Copy Have satisfactory implementation arrangements been agreed with the borrower and the same Yes [ ] No [ ] NA [ ] been adequately reflected in the project legal documents? III. APPROVALS Task Team Leader: Johannes Heister Approved By: Sector Manager: Name Franz R. Drees-Gross (SM) Date: 19-Jul-2012 Page 3 of 3