The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) Integrated Safeguards Data Sheet Restructuring Stage Restructuring Stage | Date ISDS Prepared/Updated: 26-Jul-2018| Report No: ISDSR25319 Regional Vice President: Victoria Kwakwa Country Director: Michel Kerf Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Jie Tang Task Team Leader: Kamleshwar Prasad Khelawan The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. . I. BASIC INFORMATION 1. BASIC PROJECT DATA Project ID Project Name P098423 Sustainable Energy Financing Program Task Team Leader(s) Country Kamleshwar Prasad Khelawan Pacific Islands Approval Date Environmental Category 12-Jun-2007 Not Required (C) Managing Unit Is this a Repeater project? GEE09 PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 19.65 Total Financing 19.65 Financing Gap 0.00 DETAILS -NewFinEnh1 Non-World Bank Group Financing Counterpart Funding 11.20 Borrower 0.50 Borrowing Country's Fin. Intermediary/ies 10.20 Sub-borrower(s) 0.50 Trust Funds 8.45 Global Environment Facility (GEF) 8.45 The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) 2. PROJECT INFORMATION Current Project Development Objective The project aims to (i) significantly increase the adoption and use of renewable energy technologies and the more efficient use ofenergy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in the Recipient's Territory (Fiji) and (ii) support knowledge sharing and capacity building on renewable energy and energy efficiencytechnologies in the Participating Island States. Proposed New PDO The objective of the Program is (i) to significantly increase the adoption and use of renewable energy technologies and the more efficient use of energy through a package of incentives to encourage local financial institutions to participate in sustainable energy finance in the Participating Pacific Island States; and (ii) to support knowledge sharing and capacity building on renewable energy and energy efficiency technologies in the Participating Pacific Island States. . Note to Task Teams: End of system generated content, document is editable from here. 3. PROJECT DESCRIPTION The project will make available a Risk Sharing Facility to guarantee 50% of the loans by commercial banks to individual and micro and small enterprise (MSE) to borrowers to finance renewable energy technologies and energy efficient use of energy. In addition, the project provides funds for technical assistance, market incentives and communications and for the management, monitoring and evaluation of the program. The loans made under this project will need to meet a Covered Loans Criteria and will be to finance equipment as set out in an Approved Product Catalog and in the case of MSE borrowers, based on an approved business plan. The project includes the following components: Component 1. Risk Sharing Fund (RSF) (a) Providing partial credit guarantees through the Fund Manager from the Risk Sharing Fund to Approved PFIs to make Covered Loans to Participating Individual Borrowers and Participating MSE Borrowers to enable them to make investments in Sustainable Energy technologies from the Approved Product Catalog and/or in related Sustainable Energy services under an Approved Business Plan. (b) Providing technical assistance to the Recipient, for the Participating Pacific Island States, in order to: (i) select Approved PFIs to be eligible for partial credit guarantee coverage under the Risk Sharing Fund; and (ii) develop and monitor: (A) the Approved Product Catalog and Approved Business Plans; and (B) the terms and conditions for Covered Loans to be eligible for financing support under the RSF. Component 2. Technical Assistance, Market Incentives and Communications Providing technical assistance to the Recipient, for the Participating Pacific Island States, in order to: (a) strengthen the capacity of Approved PFIs to service client’s borrowing to purchase Sustainable Energy equipment by providing training to establish and maintain a profitable Sustainable Energy portfolio, including support with appropriate management information systems, risk mitigation and recovery techniques; The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) (b) strengthen sales and after sales incentive structures for Sustainable Energy service providers through detailed market surveys; (c) strengthen the financial and technical capacity of MSE Sustainable Energy service providers; (d) assist vocational schools and other training institutions to: (i) provide training on energy planning and Sustainable Energy solutions; and (ii) develop and deliver Sustainable Energy technology repair and maintenance training; (e) develop and implement consumer protection, testing and accreditation programs, including accreditation of renewable energy suppliers, auditors and managers; (f) assist local retailers and MSEs to attend training institutions and trade fairs on Sustainable Energy topics and support trade fairs, showcases and community presentations, to promote Sustainable Energy and energy efficiency technologies; (g) install Sustainable Energy and energy efficiency demonstration facilities to promote their adoption and use; (h) review the energy policies of the Participating Pacific Island States to identify, and recommend actions to remove, barriers to significant increase in the adoption and use of renewable energy technologies and more efficient use of energy, and carry out renewable energy resource and technology studies and studies regarding the efficient use of energy; and (i) develop a communications strategy for the Program to address all relevant stakeholders, including communities, potential Borrowers and potential Approved PFIs. Component 3. Management, Monitoring and Evaluation Providing the services of a Regional Program Manager to the Recipient, for the Participating Pacific Island States, in order to: (a) ensure effective management, coordination, monitoring and evaluation of the Program; (b) promote regional coordination of the Program; and (c) monitor, report and support any outstanding matters arising from the ongoing Program. The SEFP will be expanded into a regional program, for implementation in both Fiji and Vanuatu. The Fund Manager would thus provide Guarantees under the RSF to eligible PFIs in Fiji and to eligible PFIs in Vanuatu. The management of RSF activities in Vanuatu be carried out by the Department of Energy in the Ministry of Climate Change and Natural Disasters of the Government of Vanuatu (GoV), while Fiji’s Department of Energy, in the Ministry of Infrastructure and Transport of the Government of Fiji (GoF) will continue with management of the RSF in Fiji. However, no GEF funds will be provided to the GoV for its management of the RSF activities in Vanuatu; instead, these activities will be supported by the Program Manager (Regional Program Manager) engaged by Fiji, whose terms of reference will be expanded to implement the RSF in Fiji and Vanuatu under the direction of each country’s Department of Energy. The responsibilities of the GoV will be captured through a new Project Agreement between Vanuatu and the World Bank, and the GoF’s responsibilities for implementation of the RSF in Fiji and its support to the GoV will be captured in a second amended and restated GEF Grant Agreement with Fiji. The GoF and the GoV will enter into an Implementation Agreement to coordinate the RSF implementation activities in Vanuatu. The extension of the Fund Manager’s responsibility to Vanuatu will be captured in a second amended and restated GEF Grant Agreement with the Fund Manager. The SEFP program will support the two existing World Bank Rural Electrification Projects (VREP) in Vanuatu. Only those participants in the VREP who meet the criteria for RSF support may access the RSF program in Vanuatu. This will be captured in the Operations Manual developed by Fiji for the existing project, to be updated for the restructured project as a Regional Operations Manual acceptable to the World Bank. The existing agreements for VREP between Vanuatu and The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) the World Bank will be amended to link Vanuatu’s obligations under RSF to the VREP, by specifying that a failure by Vanuatu to meet its obligations under RSF will be an additional condition of suspension under each of the VREP agreements. Note to Task Teams: The following sections are system generated and can only be edited online in the Portal. . 4. PROJECT LOCATION AND SALIENT PHYSICAL CHARACTERISTICS RELEVANT TO THE SAFEGUARD ANALYSIS (IF KNOWN) The Project activities will take place in Fiji and Vanuatu. 5. ENVIRONMENTAL AND SOCIAL SAFEGUARDS SPECIALISTS ON THE TEAM Ross James Butler, Social Safeguards Specialist Nathalie Suzanna Noella Staelens, Environmental Safeguards Specialist SAFEGUARD_TABLE 6. SAFEGUARD POLICIES TRIGGERED Safeguard Policies Triggered Explanation The policy was triggered in the original project because of the environment and social impacts expected from the community-based investments on sustainable energy such as pico hydro and solar PV and the disposal of used lead acid batteries from solar PV. Environmental Assessment (OP) (BP 4.01) Yes For the restructuring, the policy remains triggered as the project is expected to continue supporting these investments in Fiji. The policy if triggered under VREP I and VREP II in Vanuatu as the project will support solar photovoltaic investments and the disposal of batteries is an issue. Performance Standards for Private Sector No Activities OP/BP 4.03 Natural Habitats (OP) (BP 4.04) No Forests (OP) (BP 4.36) No Pest Management (OP 4.09) No Physical Cultural Resources (OP) (BP 4.11) No The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) The policy was triggered for Fiji under the original project and remains triggered as Fiji is known to have IPs, namely the ethnic Fijians, who are indigenous to Fiji, and the “Rotumans,� native to the Rotuma Island and nearby islets. The project is demand driven and IPs will benefit from supported activities; benefits are considered culturally appropriate as individual households and Indigenous Peoples (OP) (BP 4.10) Yes small community groups will choose on their own if they want to borrow funds for small-scale sustainable energy investments. Measures to ensure that IPs are not adversely affected are included in the project’s Environmental and Social Safeguards Framework (ESSF). This policy is triggered for Vanuatu under VREP I but a recent change in policy has meant that it was not triggered for VREP II. ESSF and ISDS states that the distribution lines from pico hydro may affect/traverse private lands/properties in Fiji. The project has thus far not included activities with distribution lines traversing third party properties. The restructured project will not include activities that require land acquisition or relocation. However, OP 4.12 is triggered to the restructured project to provide measures that ensure that third party land owners provide permission for low- Involuntary Resettlement (OP) (BP 4.12) Yes voltage distribution lines and are not adversely affected by such arrangements. This policy has not been triggered for VREP I in Vanuatu as the systems are plug and play solar home systems. This policy has been triggered for VREP II in Vanuatu for component 2, mini grids which will not be supported by the restructured project. The restructured project will support component 1, solar home systems and single owner micro grids that will not have an impact on neighboring properties or assets. Safety of Dams (OP) (BP 4.37) No Projects on International Waterways (OP) No (BP 7.50) The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) Projects in Disputed Areas (OP) (BP 7.60) No KEY_POLICY_TABLE 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 large scale, significant and/or irreversible impacts. The current safeguard classification of Category C for operations in Fiji will remain no changes to the ISDS or safeguards instrument (Environmental and Social Safeguards Framework - ESSF) for Fiji. Safeguards arrangements established under the Vanuatu Rural Electrification Projects (VREP I - P150908 and VREP II - P160658) will apply for the Vanuatu part of the operations. This ESSF manages environmental and social safeguard risks and issues associated with the program in Fiji. Specific safeguard instruments apply to the two World Bank supported energy projects in Vanuatu (VREP I and VREP II - the Environmental Code of Practice for Disposal of Batteries, Environmental and Social Management Framework), to which this program is being extended. The legal agreements refer to the relevant safeguards instruments applicable for operations in Fiji and Vanuatu. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area. There are potential direct and indirect negative impacts as a result of the activities. The physical works are limited to very minor works and are effectively managed via the existing safeguard instruments and implementation architecture. 3. Describe any potential alternatives (if relevant) considered to help avoid or minimize adverse impacts. There are many alternatives to decentralized renewable energy which will be supported by this project; almost all of which have significant long term environmental impact both in the project area and elsewhere. Low scale renewable energy such as that supported by this project are universally seen as having a lower negative impact and greater positive impact than other energy generation and distribution alternatives. 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 project activities are managed via existing safeguard instruments in both Fiji and Vanuatu which have been effectively applied in both countries over an extended period. Both Fiji and Vanuatu have proven capacity in terms of undertaking the activities which will be partly funded by this project. 5. Identify the key stakeholders and describe the mechanism for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) The EAs, PM and PFI are the key stakeholders. The PM will prepare safeguards information in a brochure which will be part of the information package provided to potential beneficiaries. The revised ESSF will also be disclosed in Fiji and Vanuatu. DISCLOSURE_TABLE B. DISCLOSURE REQUIREMENTS ENV_TABLE Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank Date of submission for disclosure 05-Nov-2013 12-Nov-2013 For Category ‘A’ projects, date of distributing the Executive Summary of the EA to the Executive Directors “In country� Disclosure Country Date of Disclosure Fiji 08-Nov-2013 Comments Country Date of Disclosure Vanuatu 02-Aug-2014 Comments VREP II 30 December, 2016 RESETTLE_TA BLE Resettlement Action Plan/Framework Policy Process Date of receipt by the Bank Date of submission for disclosure 05-Nov-2013 12-Nov-2013 “In country� Disclosure Country Date of Disclosure Fiji 08-Nov-2013 The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) Comments INDIG ENOUS_TA BLE Indigenous Peoples Development Plan/Framework Date of receipt by the Bank Date of submission for disclosure 05-Nov-2013 12-Nov-2013 “In country� Disclosure Country Date of Disclosure Fiji 08-Nov-2013 Comments COMPLIANCE_TABLE C. COMPLIANCE MONITORING INDICATORS AT THE CORPORATE LEVEL EA_TABLE OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? No IP_TABLE OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as appropriate) No been prepared in consultation with affected Indigenous Peoples? IR_TABLE OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process framework No (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Practice Manager NA review the plan? Is physical displacement/relocation expected? No Is economic displacement expected? (loss of assets or access to assets that leads No to loss of income sources or other means of livelihoods) The World Bank RESTRUCTURING ISDS Sustainable Energy Financing Program (P098423) PDI_TABLE The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank for Yes disclosure? Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups Yes and local NGOs? ALL_TABLE All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been Yes 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 monitoring Yes of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower Yes and the same been adequately reflected in the project legal documents? III. APPROVALS Task Team Leader(s) Kamleshwar Prasad Khelawan Approved By Practice Manager/Manager . Note to Task Teams: End of system generated content