INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized I. Basic Information Date prepared/updated: 04/14/ Basic Project Data Original Project ID: P INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE Report No.: AC5124 Original Project Name: Regional and Domestic Power Markets Development Project (Southern Africa Power Market Project: APL-1b) Country: Africa Project ID: P Project Name: Additonal Financing for the Regional and Domestic Power Market Project Task Team Leader: Philippe J-P. Durand Estimated Appraisal Date: April 19, 2011 Estimated Board Date: June 28, 2011 Managing Unit: AFTEG Lending Instrument: Adaptable Program Loan Sector: Renewable energy (67%);Power (25%);Central government administration (8%) Theme: Rural services and infrastructure (25%);Infrastructure services for private sector development (25%);Export development and competitiveness (24%);Corporate governance (13%);Regional integration (13%) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT African Development Bank GERMANY: KREDITANSTALT FUR WIEDERAUFBAU (KFW) Environmental Category: B - Partial Assessment Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) [ ] No [] 2. Project Objectives The development objectives of the additional financing have been re-stated as follows: to improve operational efficiency in the electricity sector and expand renewable generation, transmission and distribution capacity in order to better serve domestic power demand and to support regional power market integration. 3. Project Description The PMEDE Project first approved in May 2007, consists of five main components: (i) Generation - rehabilitation of Inga 1 and Inga 2 hydropower stations; (ii) Transmission - construction of a new 400 kv transmission line from Inga to Kinshasa; (iii) Distribution-

2 rehabilitation, reinforcement and expansion of the power distribution system in Kinshasa; (iv) Capacity building - strengthening of SNEL s operational capabilities including activities regarding the governance within the utility specifically and in the sector generally; and (v) Project Implementation - provision of consulting services for engineering, management and supervision of implementation, procurement and financial management services. The Project provides the required resources to develop GoDRC s goal of quickly improving the governance of the sector and of SNEL s performance through a management contract. Some of the benefits of the Project depend on the proper execution of the ongoing Southern Africa Power Market Transmission Project (SAPMP). The Additional Financing request is for an additional grant of US$288 million equivalent to cover increases in costs due to under-estimation at appraisal, financing gap on specific components, expansion of the power distribution component, and unanticipated additional works of degraded energy facilities. The Project Paper also seeks approval for formal restructuring of the Project for the following changes: (i) Modification of the Project Development Objective; (ii) Extension of the Grant s Closing Date from December 31, 2012 to June 30, 2016, to enable completion of Project activities; (iii) Increase in the scope of the distribution component to alleviate congestion and increase power supply to households, particularly in Kinshasa; (iv) Changes in the results framework, including mainly new indicators and targets to reflect the new Project implementation schedule, the project restructuring and capture the additional focus on corporate governance. 4. Project Location and salient physical characteristics relevant to the safeguard analysis There are three locations at which physical activities relevant to the safeguard analysis will be undertaken as a result of the Project: (i) The Inga site on the River Congo, situated approximately 125 miles downriver from Kinshasa where the works to be undertaken will be at the Inga 1 and Inga 2 hydroelectric facilities and intake canal for both facilities; (ii) The route of the new transmission line from the Inga site to Kinshasa ending at the Kingatoko substation: the alignment is being optimized and a draft resettlement action plan has been prepared. The transmission line from Inga to the Kingatoko substation in Kinshasa passes mostly through agricultural land. A sensitive forest area near the Inga Hydropower station has been avoided; (iii) In Kinshasa, activities to strengthen the power distribution system: these will include rehabilitation activities at two key substations (located at Liminga and Lingwala), the extension of the grid into currently un-electrified areas of Kinshasa (namely 30,000

3 new connections in the Kimbanseke area located to the east of the city, with the associated erection of a new substation) and 20,000 new connections in the Kisenso, Mpasa 1/2/3 and Malweka areas. The alignments of grid extension have yet to be finalized. 5. Environmental and Social Safeguards Specialists Mr Paul Jonathan Martin (AFTEN) Mr Antoine V. Lema (AFTCS) 6. Safeguard Policies Triggered No Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 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 AF focuses on the rehabilitation of Inga 1 and Inga 2 power stations, (i.e. turbines and related equipment), the building of a new transmission line and grid extensions. The environmental and social impacts of the rehabilitation of the Inga 1 and Inga 2 hydropower plants are expected to be moderate and manageable; likewise the building of the new transmission line and the grid extensions. Adverse environmental and social impacts will be mainly related to the construction of the transmission line and the grid extensions, and the impacts will therefore be site specific and controllable. Only a fraction of the water from the Congo River is diverted into Inga 1 and Inga 2 intake canal for hydropower production and there is very little effect on the hydrological regime of the Congo River as a result of the Project. The transmission line from Inga to the Kingatoko substation in Kinshasa passes mostly through agricultural land. A sensitive forest area near the Inga hydropower station has been avoided, and the transmission lines pose manageable environmental and social impacts. An Environmental and Social Management Framework, Environmental and Social Impact Assessment, including an Environmental and Social Management Framework and Plan, were prepared, consulted upon, and disclosed in December, An Addendum to the ESIA and ESMP based on the changes to the transmission line has been disclosed in April Pest Management

4 The project includes control of black flies, a vector for onchocerciasis in the project area, through the use of the pesticide permethrine. A pest management plan was developed and disclosed in March Physical Cultural Resources A framework for managing cultural property was prepared and disclosed at the Infoshop in January Potential sensitive sites include caves of potential cultural significance in the vicinity of the project area. Involuntary Resettlement OP/BP 4.12 were triggered as civil works of the transmission line will require land acquisition. A resettlement policy framework (RFP) was prepared and disclosed incountry 18th January 2007, and at Infoshop also on the same date. A draft resettlement action plan (RAP) for the transmission from Inga to the Kingatoko substation in Kinshasa has been prepared (see above), and it includes impacts of the extension of the grid. A draft resettlement action plan (RAP) has been prepared, consulted upon and disclosed in April 2011 for the transmission from Inga to the Kingatoko substation in Kinshasa; the RAP includes impacts of grid extension and mitigating actions. Safety of Dams Consistent with OP 4.37, and according to ToRs developed in consultation with the relevant Bank specialist, a review of dam safety at the Inga site was completed in June No significant concerns were identified, and a draft program of maintenance, monitoring, and emergency preparedness was prepared. A covenant requiring the preparation and adoption by SNEL of an Emergency Preparedness Plan (EPP) by December, 2007, was included as a covenant in the legal agreement for the Project; however, to-date no such Plan has been adopted. A Bank technical mission in March 2010 did not find significant dam safety risks and agreed with SNEL on the terms of reference for the finalization of the EPP. The consulting firm that had prepared the draft EPP in 2007 has been recruited to revise and complement the EPP by June A panel of experts on dam safety has been appointed, with five experts on geotechnical, electromechanical, dams, sedimentology and concrete, and will initiate its mandate in April Projects on International Waterways OP7.50 applies to Projects that involve the use of international waterways. The Inga rehabilitation component (Component 1) will involve the use of the River Congo, an international waterway that DRC shares with 8 countries and, as such, OP7.50 does apply. However, the Inga dam is a "run of the river" plant, and the proposed activities (rehabilitation of the dam, dredging and reprofiling of the intake canal) will not modify the water volume nor its quality. On this basis, and as set out in paragraph 7(a) of OP7.50, this Project is exempt from the requirement to notify other riparian states about the Project, as the activities will alter neither the quality nor the quantity of the water flowing to other riparian states, nor will the Project be adversely affected by the other riparians s possible water use.

5 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: None anticipated. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The only potential relevant alternatives that were considered in Project design relate to the routing of the transmission line from Inga to Kinshasa. The line passes mostly through agricultural land and the alignment is being optimized to avoid densely populated areas. A sensitive forest area near the Inga site has been avoided. The transmission lines poses manageable environmental impacts which will be mitigated by the actions described in the Environmental and Social Management Plan (ESMP) and draft RAP. 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. Social, environmental and resettlement issues are addressed in the context of the Project s ESRP, including the set of seven documents relating to environmental, social and resettlements aspects of the project, namely: (i) the Environmental and Social Impact Assessment (ESIA) (ii) Environmental and Social Management Plan (ESMP), (iii) the Environmental and Social Management Framework (ESMF), (iv) the Resettlement Policy Framework (RPF), (v) the Management of Cultural Heritage Framework (MCHF), (vi) the ESIA Executive Summary (French); and (vii) the ESIA Executive Summary (English), as supplemented by (viii) the Pest Management Plan (PMP). These documents set out the measures to be taken by the borrower to manage relevant safeguard policy issues, at the level of individual Project components, including applicable environmental and social regulations. For the implementation of the Resettlement Action Plan (RAP) for the Inga-Kinshasa transmission line (currently in draft), the client has opened a special account with an installment of US$1.3 million. The adoption by SNEL and appropriate disclosure of the final RAP for the Inga-Kinshasa transmission line is a condition for appraisal of the additional financing. Finalization and adoption by SNEL of an EPP is a condition for effectiveness of the proposed additional financing. The borrower has laid a solid institutional foundation for managing and monitoring adverse environmental and social impacts. SNEL has established an Environmental and Social Management Unit which will monitor safeguards compliance of the project. The unit (Unité de Gestion Environnementale et Sociale [UGES]) is composed of eight staff (5 environmentalists and 3 social scientists). The project is supporting the training of UGES staff on Bank safeguards policies. The day to day monitoring of safeguards compliance will be ensured by the supervision consultant of the civil works. The contractors will prepare their own Environmental and Social Management Plan, which will be based on the Environmental and Social Management Plan prepared for the project.

6 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The preparation of the PMEDE and additional financing has been participatory at several levels. Key stakeholders, in addition to SNEL management and staff are the Ministry of Energy, the Ministry of Environment, project affected persons (PAPs) and the European Investment Bank (EIB) and the African Development Bank (AfDB). A second group of stakeholders are the people living at Inga neighboring communities, including the six clans that owned the land acquired by SNEL for the construction of the Inga 1 and Inga 2 hydropower sites, and the inhabitants of Camp Kinshasa, a workers camp built at the time of the construction of Inga 1 and Inga 2. This group of stakeholders was extensively consulted in conjunction with the preparation of the safeguards instruments, particularly, the ESIA, ESMF, and the RPF. Safeguards documents prepared for the project were disclosed in country, and at the Infoshop at the Bank. Copies and summaries of safeguards instruments were distributed to relevant local government offices in project affected areas. Consultations with local communities will be continuously organized during the implementation of all stages of the civil works, to minimize conflicts, enhance cooperation, and improve social benefits and performance of the works contracts. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Date of receipt by the Bank 12/15/2006 Date of "in-country" disclosure 01/18/2007 Date of submission to InfoShop 04/13/2011 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? Date of receipt by the Bank 12/15/2006 Date of "in-country" disclosure 01/18/2007 Date of submission to InfoShop 04/13/2011 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank 03/27/2007 Date of "in-country" disclosure 04/10/2007 Date of submission to InfoShop 04/13/2011 * 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.

7 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 Environment Assessment Does the project require a stand-alone EA (including EMP) report? If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the credit/loan? OP Pest Management Does the EA adequately address the pest management issues? Is a separate PMP required? If yes, has the PMP been reviewed and approved by a safeguards specialist or SM? Are PMP requirements included in project design? If yes, does the project team include a Pest Management Specialist? OP/BP Physical Cultural Resources Does the EA include adequate measures related to cultural property? Does the credit/loan incorporate mechanisms to mitigate the potential adverse impacts on cultural property? OP/BP Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan? OP/BP Safety of Dams Have dam safety plans been prepared? Have the TORs as well as composition for the independent Panel of Experts (POE) been reviewed and approved by the Bank? Has an Emergency Preparedness Plan (EPP) been prepared and arrangements been made for public awareness and training? OP Projects on International Waterways Have the other riparians been notified of the project? If the project falls under one of the exceptions to the notification requirement, has this been cleared with the Legal Department, and the memo to the RVP prepared and sent? Has the RVP approved such an exception? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank s Infoshop? Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected No No N/A

8 groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Philippe J-P. Durand 04/14/2011 Environmental Specialist: Mr Paul Jonathan Martin 04/14/2011 Social Development Specialist Mr Antoine V. Lema 04/14/2011 Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Ms Alexandra C. Bezeredi 04/14/2011 Comments: Sector Manager: Mr Subramaniam V. Iyer 04/14/2011 Comments: