INTEGRATED SAFEGUARDS DATASHEET RESTRUCTURING STAGE I. Basic Information Date prepared/updated: 11/27/2013 Report No.: 83130 1. Basic Project Data Country: Pacific Islands Project ID: P098423 Project Name: Sustainable Energy Finance Project Task Team Leader: Kamleshwar Prasad Khelawan Estimated Appraisal Date: January 16, Estimated Board Date: June 12, 2007 2007 Managing Unit: EASNS Lending Instrument: SIL Sector: Other Renewable Energy (86%);Central government administration (9%);SME Finance (5%) Theme: Climate change (100%) IBRD Amount (US$m.): 0 IDA Amount (US$m.): 0 GEF Amount (US$m.): 7.75 PCF Amount (US$m.): 0 Other financing amounts by source: Borrower 0.50 Borrowing Country's Fin. Intermediary/ies 10.20 Sub-borrower(s) 0.50 Financing Gap 0.00 11.20 Environmental Category: C - Not Required Simplified Processing Simple [X] 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 The project aims 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 Recipient's Territory and through knowledge sharing and capacity building in the Participating Island States. 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 Participating Financial Institutions (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 Executive Agency 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 through the Executive Agency 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; (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 Recipient's energy policies and implement measures to address any barriers to significantly increasing 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 Executive Agency (EA) with the services of a Program Manager (PM) to: a. ensure effective management, coordination, monitoring, and evaluation of the Program; b. promote knowledge sharing and regional capacity building to the Participating Pacific Island States; and c. monitor, report, and support any outstanding matters arising from the ongoing Program. 4. Project Location and salient physical characteristics relevant to the safeguard analysis The Project activities will take place in the Recipient's Territory. Knowledge sharing and capacity building will also involve other Pacific Island States. 5. Environmental and Social Safeguards Specialists Mr Svend Jensby (SARDE) Mr Josefo Tuyor (EASDE) 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 expected, the original project did not have any major, large scale, significant or irreversible environmental and social impacts. The two potential safeguards issues identified under the original project include: the unsafe disposal of used lead acid batteries from solar PV and the potential of low voltage lines from pico hydro crossing private lands and properties. The disposal of used batteries was an issue in the original project and remains an issue in the restructured project especially since the original proposal in the ESSF to incorporate an element dedicated to the purchase of the first replacement battery proves to be difficult and cumbersome for PFIs to enforce and administer. The crossing and impact of distribution lines from the pico hydro did not materialize as there was no pico hydro proposal in the original project. This however, cannot be ruled out for the restructured project. In addition to pico hydro activities, and community based biofuel (coconut oil) generators could potentially affect other land owners if low voltage distribution lines are needed from the point of power generation to point of consumption. The generators financed will be small, portable generators. Pico hydro is a run of river scheme with a pipe diverting water into a small turbine. Both will normally use 240V distribution lines. It is possible that some small business may use 415V lines. The wires are strung over small posts or put underground. Pico hydros requiring distribution lines traversing third party properties will be required to obtain permission from the land owner(s). Biofuel generators will generally be for villages supplying a number of people living close together in a community arrangement on community land. The village chief or headman (or a community group) would coordinate such installation and procure necessary permission should the distribution line have to traverse third party properties. The impacts on IPs are deemed positive as they receive equal and culturally appropriate benefits from project activities, which are demand driven and based on individual households or small community groups' own desire to borrow money for sustainable energy investments. There are no adverse impacts on local communities or households from project activities as all physical investments take place on the land of individual households and MSEs (except for the potential support to pico hydro and coconut oil activities that may require a low voltage distribution line to cut across third party properties – these are only supported if third party land owners/users consent to such arrangements). Under the restructured project, the identified environment and social safeguard issues of the original project remain valid and relevant. In addition to OP 4.01 and OP 4.10, OP 4.12 is also triggered for the restructured project. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: Long term impacts will be positive with the switching to sustainable energy sources from non-RE fuels such as kerosene, petrol and diesel. 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 developed an Environment and Social Safeguards Framework (ESSF) to screen and address environment and social safeguard issues of different sustainable energy investments financed by the PFIs. For the restructuring, the ESSF has been updated to reflect changes on safeguards arrangements based on the lessons learned and experience from implementing the original project. Among the changes made is the disposal and management of used lead acid batteries from solar PV by requiring suppliers of batteries to collect back used batteries and to properly dispose them in compliance with the 2007 Fiji Environment Management – Part on Waste Disposal and Recycling. A due diligence of the implementation of this regulation indicates that this is working and can be adopted and relied upon in the context of the restructured project. The Department of Environment has a Waste Management and Pollution Control Unit which is responsible for waste and pollution control in Fiji. The Department normally issues the permit for 3 years to battery supplier companies who, in turn, have to send to the Department their filled Batteries Handling Return forms every 6 months. The Department of Environment's officers normally do random checks on the compliance of companies. The World Bank, as part of its supervision of the project, will conduct random checks of the project's compliance to battery disposal and management consistent with the national regulations. Second change to the ESSF is to include coconut oil facilities, in addition to pico hydro, as those subprojects that may potentially affect/traverse private lands/properties related to the low voltage distribution lines. The implementation of the ESSF by the Implementing Agency and the PFIs and compliance by sub-borrowers will be supervised by the Bank during implementation. In particular, safeguard supervision will focus on how well the buy back and disposal of used batteries have been complied with and whether consent has been secured from private land owners before financing is approved for the sub-borrowers. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. 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 information will also be distributed to Green Peace and other civil society organizations in Fiji. The revised ESSF will also be disclosed in Fiji. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? N/A Date of receipt by the Bank 11/05/2013 Date of "in-country" disclosure 11/08/2013 Date of submission to InfoShop 11/12/2013 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? N/A Date of receipt by the Bank 11/05/2013 Date of "in-country" disclosure 11/08/2013 Date of submission to InfoShop 11/12/2013 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? N/A Date of receipt by the Bank 11/05/2013 Date of "in-country" disclosure 11/08/2013 Date of submission to InfoShop 11/12/2013 Pest Management Plan: Was the document disclosed prior to appraisal? 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? OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as Yes appropriate) been prepared in consultation with affected Indigenous Peoples? If yes, then did the Regional unit responsible for safeguards or Sector Yes Manager review the plan? If the whole project is designed to benefit IP, has the design been reviewed N/A and approved by the Regional Social Development Unit or Sector Manager? OP/BP 4.12 - Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process Yes framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Sector Yes Manager review the plan? 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 Kamleshwar Prasad Khelawan 11/20/2013 Environmental Specialist: Mr Josefo Tuyor 11/20/2013 Social Development Specialist Mr Svend Jensby 11/20/2013 Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Mr Peter Leonard 11/21/2013 Comments: Cleared based on information provided by team in ISDS. Sector Manager: Mr Michel Kerf 11/28/2013 Comments: