INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: ISDSC755 Public Disclosure Copy Date ISDS Prepared/Updated: 15-May-2012 I. BASIC INFORMATION A. Basic Project Data Country: Bangladesh Project ID: P131263 Project Name: Rural Electrification and Renewable Energy Development II (RERED II) Project (P131263) Task Team Leader: Zubair K.M. Sadeque Estimated Appraisal Date: 00-undefined-0000 Estimated Board Date: 13-Sep-2012 Managing Unit: SASDE Lending Instrument: Specific Investment Loan Sector: Other Renewable Energy (78%), General energy sector (12%), Energy efficiency in power sector (10%) Theme: Rural services and infrastructure (78%), Other public sector governance (12%), Climate change (10%) Financing (In USD Million) Financing Source Amount BORROWER/RECIPIENT 0.00 International Development Association (IDA) 155.00 US Agency for International Development (USAID) 7.60 Global Partnership on Output-based Aid 5.50 GERMANY KREDITANSTALT FUR WIEDERAUFBAU (KFW) 13.00 LOCAL BENEFICIARIES 30.00 Non-Government Organization (NGO) of Borrowing Country 61.00 Financing Gap 16.90 Total 272.10 Environmental Category: B - Partial Assessment Is this a Repeater project? Yes Public Disclosure Copy B. Project Objectives The proposed project development objective is to increase access to modern, reliable energy by households and enterprises in rural areas through renewable energy and improve the response capacity of the borrower in case of an emergency. The proposed project takes a holistic approach to improving the quality of life and livelihoods of rural households by providing access to electricity through renewable energy and cleaner cooking fuels and cooking methods. This would be achieved by leveraging the capacities of the private sector and NGO communities, while the GOB would be playing an essential market-enabling role. By extending access to electricity and to modern energy services, the proposed project would contribute to improving livelihoods particularly of rural women. Access to modern energy services can play a catalytic role in enhancing the development of productive activities and can increase the impact of social programs. As it stands, lack of access to modern energy services represents a lost opportunity of income generation for women and limits their overall participation in community activities. The lack of access to modern energy services also means that health facilities are rudimentary; assistance during childbirth is basic and occurs in poorly lit environments with candles or kerosene lamps with virtually no modern health equipment. This results in high infant and maternal mortality that can be largely prevented. C. Project Description In support of the vision of the Government of Bangladesh (GOB) of providing universal access to electricity by the year 2020, the proposed project would support the Solar Home Systems (SHS) and mini-grid options for providing access to electricity in areas where grid electricity is difficult, expensive, and will take years to reach. In continuation of the Bank support to the successful SHS program of GOB, the proposed project would extend support for another 550,000 systems following the same model and institutional arrangement as has been proven successful under the on- going Rural Electrification and Renewable Energy Development (RERED) project. The proposed project would also support GOB’s efforts of implementing renewable energy based mini-grids through the private sector in rural areas as stipulated under the Remote Area Power Supply Systems (RAPSS) guidelines. The RAPSS component would be based on the least cost option (solar photovoltaic, biomass gasifier etc) for the consumers building on the lessons learned from the pilots supported under the on- going RERED project. Providing grid-quality electricity from renewable energy sources in the RAPSS areas will serve the commercial needs of the rural markets and small enterprises, where the potential consumption of electricity is much higher than the basic lighting and electricity needs of a typical rural household that could otherwise be met by SHS. Identifying areas where such mini-grids are the least cost option, GOB plans to offer licenses through a competitive process for owning and operating the RAPSS schemes. The proposed project would contribute towards increasing access to modern energy by scaling up adoption of more efficient cook stoves. The proposed household energy component would build on activities currently being undertaken by a number of NGOs and aims towards a scaling up of improved cook stove production, dissemination, and sustained use. The proposed component would include: (i) awareness raising and community outreach, to ensure potential users are aware of the fuel saving and health benefits of higher performing cook stoves (i.e improved cook stoves and possibly advanced cook stoves in urban areas); (ii) research and development to enhance product quality, performance, safety and durability; (iii) setting up of performance standards, labels and testing facilities; (iv) design of an operational funding facility to support initial Public Disclosure Copy capital costs for large-scale stove production and distribution facilities; and (v) development of innovative and pragmatic funding procedures to attract new players into the sector, capitalizing on carbon finance and using a blend of loans and grants. In addition, the proposed project would support implementation of the second phase of the Compact Fluorescent Lamp (CFL) component with the objective of introducing more efficient energy consumption. Finally, the proposed project would provide continued technical assistance for sector reform and capacity building. Given the country’s vulnerability to natural disasters, the proposed project would include a contingent component with zero allocation to allow for the flexibility of a rapid response in the event of an emergency. Should an emergency occur, the proposed project would finance public and private sector expenditures on a positive list of goods, both domestic and imported, required for the Borrower’s emergency recovery program. D. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The SHS and RAPSS components of the proposed project would be implemented in rural areas where grid electricity is difficult, expensive, and will take years to reach. E. Borrowers Institutional Capacity for Safeguard Policies The main implementing agency Infrastructure Development Company Limited (IDCOL) has an environmental consultant overseeing the environmental issues (mainly battery recycling of the SHS program). An Environment and Social Management Framework (ESMF) was adopted under the on-going RERED project that required measures to strengthen the capacity of IDCOL on environmental and social management. Some steps have been made by IDCOL for establishing an Environment and Social Safeguards Management Unit (ESSMU) and a full-fledged unit is expected to be established by June 30, 2012. F. Environmental and Social Safeguards Specialists on the Team Shakil Ahmed Ferdausi (SASDI) Sabah Moyeen (SASDS) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/BP 4.01 Yes Public Disclosure Copy 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 Indigenous Peoples OP/BP 4.10 No Involuntary Resettlement OP/BP 4.12 No Safety of Dams OP/BP 4.37 No Projects on International Waterways OP/BP No 7.50 Projects in Disputed Areas OP/BP 7.60 No III. SAFEGUARD PREPARATION PLAN A. Tentative target date for preparing the PAD Stage ISDS: 31-May-2012 B. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing1 should be specified in the PAD-stage ISDS: 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. Under the ongoing RERED project, an Environment and Social Management Framework (ESMF) has been developed that will continued to be used under the proposed project. The ESMF will be updated to include the two new components (the RAPSS and the household energy). Discharge of lead sulphate in the local environment during recycling of used SHS batteries is a concern. The 2009 additional financing of the RERED project required the battery manufacturers to adopt ISO 14001-2004 (Environmental Management Standard) and OHSAS 18001:1999 (Occupational Health & Safety Management Systems) certifications by June 2011 for proper handling of recycled batteries. Out of the 12 battery manufacturers supplying batteries to the SHS program, 7 large suppliers have already complied with the requirements and the rest are Public Disclosure Copy expected to comply by June 2012. The battery recycling facilities (a total of 3) are also expected to meet the certification requirements by June 2012. Several incentives have been introduced by IDCOL to ensure that the expired batteries are sent to the approved recycling centers and not by backyard smelters. These include introducing: i) a refinancing scheme for customers to purchase replacement batteries so that the old batteries can be easily replaced by the customers after the end of their useful lives; and ii) a mechanism for compensating the Partner Organizations (POs) and the recycling centers for collecting the old batteries from the customers and send it back to the recycling centers. An annual environmental audit would be undertaken to check compliance with the environmental safeguards measures outlined in the ESMF and the report will be submitted to IDA by June 30 of every year. To address the mercury in the CFLs proposed to be financed under the proposed project, a national guideline for safe disposal of CFLs is being developed. Consultant appointment process will be initiated soon. IV. APPROVALS Task Team Leader: Name: Zubair K.M. Sadeque Approved By: Regional Safeguards Coordinator: Name: Sanjay Srivastava (RSA) Date: 15-May-2012 Sector Manager: Name: Bjorn Hamso (SM) Date: 15-May-2012 Public Disclosure Copy