INTEGRATED SAFEGUARDS DATA SHEET APPRAISAL STAGE Report No.: ISDSA7281 Public Disclosure Copy Date ISDS Prepared/Updated: 12-Mar-2014 Date ISDS Approved/Disclosed: 12-Mar-2014 I. BASIC INFORMATION 1. Basic Project Data Country: Kyrgyz Republic Project ID: P133446 Project Name: Electricity Supply Accountability and Reliability Improvement Project (P133446) Task Team Ani Balabanyan Leader: Estimated 21-Apr-2014 Estimated 25-Jun-2014 Appraisal Date: Board Date: Managing Unit: ECSEG Lending Investment Project Financing Instrument: Sector(s): Transmission and Distribution of Electricity (80%), Energy efficiency in Heat and Power (20%) Theme(s): Other accountability/anti-corruption (50%), Other urban development (50%) Is this project processed under OP 8.50 (Emergency Recovery) or OP No 8.00 (Rapid Response to Crises and Emergencies)? Public Disclosure Copy Financing (In USD Million) Total Project Cost: 25.47 Total Bank Financing: 25.00 Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 25.00 Free-standing TF for ECA 0.47 Total 25.47 Environmental B - Partial Assessment Category: Is this a No Repeater project? 2. Project Development Objective(s) The proposed development objective is to improve the reliability of electricity supply in the project area and strengthen the governance of Severelectro’s operations. Page 1 of 6 3. Project Description The project involves three components: (i) investments in targeted segments of distribution infrastructure, (ii) incorporation of Management Information Systems, and (iii) institutional Public Disclosure Copy strengthening. Component 1 – Distribution infrastructure strengthening: This component will help improve power supply reliability and reduce losses in the distribution network by supporting priority investments to strengthen the distribution infrastructure of Severelectro (SE). The targeted assets are part of a comprehensive investment plan prepared during the project preparation, and are selected based on their potential for reducing losses and improving power supply reliability. The selected investments include construction of new medium-voltage substations in Bishkek, and replacement of meters for high-consumption customers in Chui region. Component 2 – Customer Service and Corporate Management System Improvement: This component will provide SE with information tools to improve quality of services provided to its customers (power supply and commercial matters), and to enhance overall efficiency of its performance in all business areas; the latter will also help the company in identifying losses and revenue leakages in its operations. To that end, the component will finance supply, installation and commissioning of selected MISs, training to SE employees to apply them, and limited investments into hardware to support the MISs. The MISs will be set-up company-wide and capture all three key areas of SE’s operations: commercial management, corporate resources management, and power network planning and operations. The specific MISs and their technical and functional specifications will be determined based on ongoing assessments and will likely include incorporation of a Commercial Management System, an Incidents Recording and Management System, and a Corporate Resource Management System. 27. Component 3 – Institutional Strengthening and Project Implementation Support: This component will support two key activities for the smooth implementation of the project and Public Disclosure Copy sustainability of project outcomes: (i) implementation support for project management, including monitoring and evaluation and incremental operating expenses of the Project Implementation Unit (PIU) under SE; and (ii) technical assistance to SE to improve its business processes, strengthen its governance and make the company more customer focused. The technical assistance will include strengthening of SE’s procurement system and financial reporting and accountability mechanism, and improving SE’s business processes. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The project will capture the service area of Severelectro involving around 527,000 customers (504,000 residential and 23,000 non-residential customers) in Bishkek city, and Chui and Talas regions. 5. Environmental and Social Safeguards Specialists Arcadii Capcelea (ECSEN) Asli Gurkan (ECSSO) 6. Safeguard Policies Triggered? Explanation (Optional) Yes Page 2 of 6 Environmental Assessment OP/ BP 4.01Habitats OP/BP 4.04 Natural No Public Disclosure Copy Forests OP/BP 4.36 No Pest Management OP 4.09 No Physical Cultural Resources OP/ No BP 4.11 Indigenous Peoples OP/BP 4.10 No Involuntary Resettlement OP/BP Yes 4.12 Safety of Dams OP/BP 4.37 No Projects on International No Waterways OP/BP 7.50 Projects in Disputed Areas OP/BP No 7.60 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: The safeguards issues in the project are expected to arise from Component 1 (Distribution Public Disclosure Copy infrastructure strengthening), which will support construction of three new medium voltage substations. These constructions are of very small scale (facilities with the size of about 20x20 meters) and would use so called “sandwich panels” technology, and thus the potential environmental impacts will be associated only with removing the asphalt and of the top soil, constructing foundations and installing new electricity equipment. Overall, the project is expected to bring social and economic benefits such as improvements in social conditions through better quality and availability of power supply and reductions of power losses. At the same time, construction of the substations may generate some adverse environmental impacts, such as: (a) dust and noise: these impacts occur during the construction activities; (b) waste handling and spill response: the construction activities will generate some solid and liquid wastes including, machine oil, paints, and solvents. Minor spills of fuel and other materials are likely to occur during the course of civil works. Improper handling of on-site wastes and response to spills could result in adverse effects on the local environment including groundwater and soil; (c) health and safety risks while implementing construction activities and installing of electrical equipment, etc.; (d) traffic disturbance in the vicinity of the construction sites. All these impacts are site specific, short term and could be easily avoided or reduced by applying relevant preventive or mitigation measures as well as best construction practices, which are well known and applied in the country and detailed in the EMP. Given that the above specified risks are minor and the project was classified by the World Bank’s safeguards team as Category “B”. Page 3 of 6 Income losses are expected for a small number of individuals as a result of the construction of sub- station in one of the project sites. The impacted individuals include: an entrepreneur, who is currently leasing the land plot from the municipality to manage a parking lot in Bishkek, and the Public Disclosure Copy guards that he has hired to help manage the parking lot. The 5-year lease that is currently in effect for the parking lot will need to be terminated early as a result of construction activities. The Bank team visited this project site during the pre-appraisal mission together with safeguards consultant hired by the PIU and SE staff. SE has prepared a RAP, which documents anticipated impacts and affected individuals from the construction of the substation (Orto-Say). 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: Long term project impacts are indirect and associated with the social and economic benefits, such as improvements in social conditions through better quality and availability of power supply and reductions of power losses. 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. To address the project impacts the borrower has prepared for all three substations to be constructed under the project Checklist Environment Management Plans (EMPs) which follow simplified safeguards procedure for projects involving small-scale, low risk construction works. The EMPs cover typical preventive and mitigation approaches to common civil works contracts with localized impacts, specifying also monitoring and implementing arrangements. While SE has overall project implementation responsibility, the implementation of EMPs is assigned to the dedicated Project Implementation Unit (PIU) of SE. The responsibilities of the company and the PIU with respect to safeguards issues will include the following: (a) ensuring that the requirements of the World Bank safeguards policies as well as national environmental laws and regulations are Public Disclosure Copy met and that all measures set out in the EMPs are implemented; (b) ensuring that Project environmental and social commitments of the construction contractors are fulfilled; (c) reporting on the status of EMPs’ implementation to SE and the World Bank. During the construction phase, monitoring of the implementation of the EMPs will be funded as part of incremental operating costs under Component 3. The construction works contracts will include a provision requiring implementation of mitigation measures stipulated in the EMP during the civil works, and will be the responsibility of the firm selected to execute these works. The provisions of the EMPs will be used for the following: (i) inclusion of the environmental requirements in the project Operational Manual; (ii) inclusion of the environmental requirements in the construction contracts, for both the technical specifications and bills of quantities; the contractors will be required to include relevant costs in their financial bids; (iii) defining the responsibility of the PIU to ensure compliance with the EMPs; (d) specifying mitigation and avoidance measures during implementation of the proposed activities; and (e) monitoring and evaluating mitigation/avoidance measures identified in site-specific reviews and in the EMPs. The PIU will report on implementation of the EMPs and on environmental performance of substations’ construction as part of semi-annual Progress Reports to be presented to the WB. SE prepared a site-specific Resettlement Action Plan (RAP) and screening reports. The objective of the RAP is to help identify the profile of individuals that would be impacted, and to describe the actions that would be used to address impacts in terms of involuntary resettlement, termination of Page 4 of 6 lease, job and income losses. Under OP 4.12 policy, information disclosure, periodic consultations, and setting up a robust grievance redress system to document and monitor social impacts (not only on resettlement, but also other issues caused by the project-funded activities) Public Disclosure Copy throughout the implementation are required. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The draft EMPs were disclosed in the country on February 19, 2014 (http://www.severelectro.kg/ ru/ and http://www.energoforum.kg) for their public consultation. The public consultation of EMPs took place on February 26, 2014 and concluded that the documents specify all potential impacts and necessary avoidance and mitigation measures. The draft RAP was disclosed on February 10, 2014 and consulted with PAPs on February 13, 2014. The finalized versions of the EMPs, the RAP and the screening reports (in English and Russian) were sent to Infoshop and posted on SE's website on March 2, 2014. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 14-Feb-2014 Date of submission to InfoShop 28-Feb-2014 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors "In country" Disclosure Kyrgyz Republic 19-Feb-2014 Comments: The EMPs for three substations two be constructed under the project were disclosed in the country Resettlement Action Plan/Framework/Policy Process Date of receipt by the Bank 20-Feb-2014 Public Disclosure Copy Date of submission to InfoShop 28-Feb-2014 "In country" Disclosure Kyrgyz Republic 10-Feb-2014 Comments: 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 OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) Yes [ ] No [ ] NA [ ] report? If yes, then did the Regional Environment Unit or Sector Yes [ ] No [ ] NA [ ] Manager (SM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated Yes [ ] No [ ] NA [ ] in the credit/loan? Page 5 of 6 OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/ Yes [ ] No [ ] NA [ ] process framework (as appropriate) been prepared? Public Disclosure Copy If yes, then did the Regional unit responsible for safeguards or Yes [ ] No [ ] NA [ ] Sector Manager review the plan? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the Yes [ ] No [ ] NA [ ] World Bank's Infoshop? Have relevant documents been disclosed in-country in a public Yes [ ] No [ ] NA [ ] place in a 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 Yes [ ] No [ ] NA [ ] responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included Yes [ ] No [ ] NA [ ] in the project cost? Does the Monitoring and Evaluation system of the project Yes [ ] No [ ] NA [ ] include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed Yes [ ] No [ ] NA [ ] with the borrower and the same been adequately reflected in the project legal documents? III. APPROVALS Task Team Leader: Name: Ani Balabanyan Public Disclosure Copy Approved By Regional Safeguards Name: Agnes I. Kiss (RSA) Date: 12-Mar-2014 Advisor: Sector Manager: Name: Ranjit J. Lamech (SM) Date: 12-Mar-2014 Page 6 of 6