The World Bank RESTRUCTURING ISDS South Africa - Eskom Renewables Support Project (P122329) Integrated Safeguards Data Sheet Restructuring Stage Restructuring Stage | Date ISDS Prepared/Updated: 07-Nov-2018| Report No: ISDSR25990 Regional Vice President: Hafez M. H. Ghanem Country Director: Paul Noumba Um Senior Global Practice Director: Riccardo Puliti Practice Manager/Manager: Wendy E. Hughes Task Team Leader: Frederic Verdol, Arsh Sharma The World Bank RESTRUCTURING ISDS South Africa - Eskom Renewables Support Project (P122329) 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 P122329 South Africa - Eskom Renewables Support Project Task Team Leader(s) Country Frederic Verdol South Africa Approval Date Environmental Category 27-Oct-2011 Full Assessment (A) Managing Unit Is this a Repeater project? GEE08 PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 1,228.00 Total Financing 1,228.00 Financing Gap 0.00 DETAILS -NewFinEnh1 Non-World Bank Group Financing Counterpart Funding 488.00 Borrower 488.00 Trust Funds 250.00 Clean Technology Fund 250.00 Other Sources 490.00 Bilateral Agencies (unidentified) 390.00 Foreign Multilateral Institutions (unidentified) 100.00 The World Bank RESTRUCTURING ISDS South Africa - Eskom Renewables Support Project (P122329) 2. PROJECT INFORMATION Current Project Development Objective To facilitate accelerated development of large scale renewable energy capacity in support of the long-term carbon mitigation strategy of South Africa. . Note to Task Teams: End of system generated content, document is editable from here. 3. PROJECT DESCRIPTION The original project had two components: (1) 100 MW Sere Wind Power Plant and (2) Kiwano Concentrating Power Plan. Sere Wind has been operational since March 2015 and Kiwano CSP is being dropped and replaced by the Battery Storage Program (BSP), the subject of the restructuring. BSP will involve installation of containerized battery system at several locations in South Africa. 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 Restructured Project will support installation of container-encased battery storage facilities at 42 sites located adjacent or within existing electrical substations in Northern, Eastern and Western Cape Provinces. These sites and surrounding areas are sparsely populated and largely characterized by semi-arid or arid landscapes predominantly used for grazing sheep or cattle. In determining the appropriate sites for battery storage facilities, a high level environmental screening was carried out to ensure that the selected sites are not close to water bodies and critical biological areas. Sere project site, located in the Western Cape Province, is among the 42 the battery facility will be established within the environmental footprint of the existing Sere wind facility, a 16-km2 site near the northern end of the coast of Western Cape Province characterized by a flat terrain, with low ridges, supporting shrub vegetation that has been used for low- density sheep grazing. The project sites in the Northern Cape Province are largely characterized by flat, sparsely vegetated land in proximity to the Kalahari Desert. None of the project sites are located within sensitive/critical ecosystems and are already disturbed to varying extent by livestock grazing and the construction and operation of the existing electrical sub-stations. For the Rietfontein site the social assessment will determine the social impacts. At project preparation, the Safeguards Diagnostic Review (SDR) confirmed that Eskom, and the environmental regulatory agencies, had the institutional capacity, requisite procedures and track record to meet the acceptability criteria of OP 4.00 with respect to OPs 4.01; 4.04; 4.11 and 4.12. However at the time of project preparation it was not anticipated that Indigenous The World Bank RESTRUCTURING ISDS South Africa - Eskom Renewables Support Project (P122329) Peoples (IP) would be present in, or have collective attachment to a project location and therefore no due diligence regarding Indigenous communities, and/or reviews of South African laws pertaining to IPs, was conducted as part of the SDR. The proposed restructuring of the project, to include the Battery Storage component, includes a project site identified as Rietfontein in the town of Andriesvale in a relatively remote Kalahari location in the Northern Cape province of South Africa. The site is home to the Khomani San who are considered an Indigenous people. In order to proceed with the restructuring, the project is required to comply with OP4.10 in light of the presence of IP’s. 5. ENVIRONMENTAL AND SOCIAL SAFEGUARDS SPECIALISTS ON THE TEAM Kisa Mfalila, Environmental Specialist Abdelaziz Lagnaoui, Environmental Specialist M. Yaa Pokua Afriyie Oppong, Social Specialist Gina Cosentino, Social Specialist SAFEGUARD_TABLE 6. SAFEGUARD POLICIES TRIGGERED Safeguard Policies Triggered Explanation OP 4.00 on the Use of Borrower Systems to Address Environmental and Social Safeguard Issues applies to the project. A Safeguards Diagnostics Review Environmental Assessment (OP) (BP 4.01) No (SDR) was carried our in 2008 and found the South Africa environmental and social management system to be equivalent and acceptable to the requirements of OP 4.01. Performance Standards for Private Sector No Activities OP/BP 4.03 OP 4.00 on the Use of Borrower Systems to Address Environmental and Social Safeguard Issues applies to the project. A Safeguards Diagnostics Review Natural Habitats (OP) (BP 4.04) No (SDR) was carried our in 2008 and found the South Africa environmental and social management system to be equivalent and acceptable to the requirements of OP 4.04. Forests (OP) (BP 4.36) No Pest Management (OP 4.09) No OP 4.00 on the Use of Borrower Systems to Address Environmental and Social Safeguard Issues applies Physical Cultural Resources (OP) (BP 4.11) No to the project. A Safeguards Diagnostics Review (SDR) was carried our in 2008 and found the South Africa environmental and social management The World Bank RESTRUCTURING ISDS South Africa - Eskom Renewables Support Project (P122329) system to be equivalent and acceptable to the requirements of OP 4.11. As part of the project restructuring, OP4.10 is triggered, and financing for the Rietfontein site will be provided once the IPP and SIA are finalized and Indigenous Peoples (OP) (BP 4.10) Yes approved by the Bank. Prior to that, and as part of the restructuring, the Bank has requested receipt of a satisfactory ToR for the IPP and the SIA OP 4.00 on the Use of Borrower Systems to Address Environmental and Social Safeguard Issues applies to the project. A Safeguards Diagnostics Review Involuntary Resettlement (OP) (BP 4.12) No (SDR) was carried our in 2008 and found the South Africa environmental and social management system to be equivalent and acceptable to the requirements of OP 4.12. Safety of Dams (OP) (BP 4.37) No Projects on International Waterways (OP) No (BP 7.50) 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 Restructured Project entails installation of container-encased battery storage facilities (approximately 8m high) consisting of grid-scale electrochemical batteries on 42 project sites along the power grids and within the vicinity of renewable energy power plants (wind or solar) sites. The facilities will store electricity from the power plants and evacuate the power when needed. Potential negative impacts of electricity storage depend on the type and efficiency of storage technology. If not disposed of or recycled property, the raw material used in the battery will likely lead to generation of hazardous waste with negative impacts to the environment. Initial environmental assessment carrying out by Eskom, concluded that likely hazardous waste to be generated from the technology will not be or exceed 500 cubic meters to require a full Environmental Impact Assessment in line with the South Africa EIA laws and regulations. Other potential negative environmental impacts from the Restructured Project are low to moderate, limited to the sites where the containers housing the batteries will be installed, largely occurring from clearing vegetation during site preparation, construction of access/haul roads, undertaking of excavation works for anchoring the containers, maneuvering and operating cranes for unloading and installation of equipment. Decommissioning activities may include removal of the temporary project infrastructure and site rehabilitation. The project was approved by the Board in 2008 for the "Use of Borrower Systems to Address Environmental and Social Safeguard Issues" according to OP 4.00. However, at the time of carrying out the Safeguards Diagnostic Review, Indigenous Peoples were not anticipated to be present in any of project sites. Consequently, OP 4.10 was not included The World Bank RESTRUCTURING ISDS South Africa - Eskom Renewables Support Project (P122329) in the review. One of the new sites under the restructured project is Rietfotein, located in the town of Andriesvale, and home to a Khomani San community. The community meets the OP4.10 definition of Indigenous Peoples. As part of the project restructuring, OP4.10 is triggered and financing for the Rietfontein site will be provided once the Indigenous Peoples Plan (IPP) and the Social Assessment are finalized and approved by the Bank. Prior to that, and as part of the restructuring, the Bank has requested receipt of a satisfactory Terms of Reference (TORs) for the IPP and the Social Assessment. Recent census data is unavailable, however, today the population is estimated at approximately 800 individuals with approximately 400 to 500 residing in the Andriesvale area. The Khomani San community is marginalized, underserved, and has high rates of poverty and food scarcity. In addition, the community has low levels of formal educational participation and attainment due to lack of access to education; low access to basic services including water, health, electricity, and limited employment and traditional livelihood opportunities. They are also dependent on Government handouts to supplement their income. Informal consultations with some community members indicates that the provisioning of electricity is welcome, however the community is uncertain of whether or not electricity will be affordable and what additional project benefits and impacts are. As per OP4.10, Eskom financing for this sub-project is contingent upon Eskom engaging in a process of free, prior and informed consultations resulting in broad community support to the project. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area. The battery storage systems will be containerized and the containers installed in already disturbed areas within existing electrical sub-stations, generating low environmental impacts. Additionally, the operation and maintenance of the facilities will be carried out remotely. Therefore, no potential indirect or long term environmental impacts are expected from the project. However, should access to electricity services be improved in the project areas, the Project will have a multiplier effect on the local economy through development of small businesses and tourism. The battery storage technology is currently being piloted in South Africa. Should the technology prove successful, there is a potential of scaling up similar technology to allow increased capacity in energy storage from future wind and solar powered projects. This, in turn, will lead to increased access to energy in other geographical areas of South Africa. Electricity storage can also be used to help integrate more renewable energy into the electricity grid. Electricity storage can also help generation facilities operate at optimal levels, and reduce use of less efficient generating units that would otherwise run only at peak times. Further, the added capacity provided by electricity storage can delay or avoid the need to build additional power plants or transmission and distribution infrastructure. Other long-term impacts include reduction in Greenhouse Gas (GHG) emissions with increased adoption of solar and wind powered electricity generation. 3. Describe any potential alternatives (if relevant) considered to help avoid or minimize adverse impacts. Alternative project sites were examined during planning of the battery storage facilities to ensure that the selected project sites are not within the proximity to sensitive ecosystems such as water bodies and critical habitats. 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 World Bank RESTRUCTURING ISDS South Africa - Eskom Renewables Support Project (P122329) Since 2016, Eskom - the Borrower - has tested thoroughly the main battery storage technologies at its Research center in Pretoria. These tests included security and environment aspects during operation within the context of South Africa's local conditions. Testing results have been extrapolated to estimate the expected lifetime of the future battery systems. Discussions with the manufacturers of the battery storage technologies included safe handling and disposal of battery waste. It has been agreed that the Owner's Engineer (OE) to be hired by Eskom, will include specifications in tender documents for suppliers to provide training of Eskom technical staff on the maintenance and disposal of the battery systems. Eskom has adequate technical capacity and knowledgeable on the operation and maintenance of battery storage technology including management of environmental aspects associated with battery storage system. OP 4.00 applies to the project. As such, Eskom is using "Borrower Systems in Addressing Environmental and Social Safeguard Issues" in the project. Fourty-two (42) sites have been selected for the installation of the battery storage facilities. According to the South Africa EIA law, a full EIA is required if the volume of hazardous waste generate from a facility is above 500 liters. Based on a high-level environmental analysis carried out by the Eskom environmental team, the each battery storage facility will not generate hazardous waste at a volume greater that 500 liters. As such, a Basic Environmental Impact Assessment is currently being carried out for each individual site by third party international consultants overseen by four (4) Eskom Environmental managers located at the provincial level and reporting to Environmental Manager located at the Headquarters. Given that most the project sites are located in the Western Cape province, six (6) EIA consultants have been appointed for the sites in this province while one (1) EIA consultant has been appointed for the project sites located in the Eastern, Northern Cape and Kwazulu Natal provinces. The Department of Environment Affairs (DEA), as the competent authority, will reivew and issue EIA licenses for each individual sites before construction commences. Overall, Eskom anticipates the environmental approval process timeframe of 6 months per site (which will be carried out in parallel). A full EIA will also be carried out for Eskom financed distributed solar PV sites (which could take up to 18 months, but will include the battery storage component). Eskom does not have experience in the application of OP4.10. As a result the company does not have the requisite in-house capacity for interpreting and implementing the policy and will need to rely on outside expertise. A consultant has been hired to prepare the SIA and one will be hired for the IPP for the project site. The Bank has reviewed and cleared the TOR’s for the IPP and SIA. In addition, the Bank will clear the finalized IPP and SIA prior to the commencement of works and will closely support and supervise the IP aspects. 5. Identify the key stakeholders and describe the mechanism for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Key stakeholders include: The Department of Environmental Affairs (DEA) and the National Energy Regulator (NERSA) which are national institutions tasked with the responsibility of providing authorization to build and operate the battery storage systems, and (ii) the local communities in the decentralized areas where Eskom plans to install the battery storage facilities together with the associated decentralized photovoltaic new generation capacity. OP 4.10 will apply for the Rietfontein site. Eskom held one consultation with the community (September 28, 2018). Prior to this time, Eskom has only met with the Community Property Association whose membership consists of some members of the community. The Community Property Associations are landholding institutions established under the Communal Property Associations Act No. 28 of 1996 (the CPA Act) for use of communities who have received restituted land. The CPA Act provides for government registration of CPAs and also government oversight. Going forward, the main mechanism for consultation with the community will be through community consultation meetings to ensure that free, prior and informed consultations leading to broad community support is obtained and the The World Bank RESTRUCTURING ISDS South Africa - Eskom Renewables Support Project (P122329) community is inclusively engaged throughout this project. Additional stakeholders include traditional representatives, women and youth who will be part of the broader consultation meeting but will have additional focus group discussions to ensure their views are reflected in the project. Moreover, as the ESIA is not yet complete, it is unclear what the extent of labor influx will be. DISCLOSURE_TABLE B. DISCLOSURE REQUIREMENTS INDIG ENOUS_TA BLE Indigenous Peoples Development Plan/Framework Date of receipt by the Bank Date of submission for disclosure 26-Nov-2018 22-Nov-2018 “In country� Disclosure Country Date of Disclosure South Africa 22-Nov-2018 Comments Acceptable TOR for IPP and SIA received on 27-Nov-2018. COMPLIANCE_TABLE C. COMPLIANCE MONITORING INDICATORS AT THE CORPORATE LEVEL IP_TABLE OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as appropriate) Yes been prepared in consultation with affected Indigenous Peoples? If yes, then did the Regional unit responsible for safeguards or Practice Manager Yes review the plan? If the whole project is designed to benefit IP, has the design been reviewed and Yes approved by the Regional Social Development Unit or Practice Manager? PDI_TABLE The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank for Yes disclosure? The World Bank RESTRUCTURING ISDS South Africa - Eskom Renewables Support Project (P122329) 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 Frederic Verdol Task Team Leader(s) Arsh Sharma Approved By Safeguards Advisor Practice Manager/Manager . 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