INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 05/11/2011 Report No.: Basic Project Data Country: South Asia Project ID: P Project Name: Nepal-India Electricity Transmission and Trade Project Task Team Leader: Raghuveer Y. Sharma Estimated Appraisal Date: February 18, Estimated Board Date: May 24, Managing Unit: SASDE Lending Instrument: Specific Investment Loan Sector: Power (60%);Renewable energy (40%) Theme: Analysis of economic growth (67%);Climate change (33%) 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 Borrowing Agency 6.00 Local Sources of Borrowing Country Bilateral Agencies (unidentified) Foreign Private Commercial Sources (unidentified) Financing Gap 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 proposed Project are to: (a) establish cross-border transmission capacity between India and Nepal of about 1000 MW to facilitate electricity trade between the two countries; and (b) increase the supply of electricity in Nepal by the sustainable import of at least 100 MW. 3. Project Description The proposed Project includes investments financed by IDA (Part B and C) as well as linked investments not financed by IDA (Part A): Part A: Dhalkebar-Muzaffarpur (D-M) Transmission Line

2 - Component A1: Muzaffarpur-Sursand 400 kv Transmission Line (non-ida financed). Design, construction and operation of approximately 90 km of 400 kv double circuit transmission line between Muzaffarpur and Sursand on the Indian border with Nepal. - Component A2: Dhalkebar-Bhittamod 400 kv Transmission Line (non-ida financed). Design, construction and operation of approximately 40 km of 400 kv double circuit transmission line between Bhittamod, on the Nepal border with India, and Dhalkebar in Nepal. Part B: Hetauda-Dhalkebar-Duhabi (H-D-D) Transmission Line and Grid Synchronization - Component B1: Hetauda-Dhalkebar-Duhabi Transmission Line and Substations. Design, construction and operation of approximately 285 km of 400 kv double circuit transmission line for the Hetauda-Dhalkebar-Duhabi segment, together with concomitant substations in Nepal. - Component B2: Synchronization of Operation of the Nepal and Indian Grids. Installation of properly tuned power system stabilizers in the major power generating stations and other measures in Nepal in order to synchronize its power system with that of India. Part C: Technical Advisory Services - Component C1: Owner s Engineer. Provision of technical advisory services, through an Owner s Engineer for NEA, for overseeing Part B of the Project. - Component C2: Transmission System Master Plan. Provision of technical advisory services to NEA for the preparation of a transmission system master plan for future transmission system development in Nepal and for development of additional crossborder interconnections. - Component C3: Lenders Engineer. Provision of technical advisory services, through a Lenders Engineer, for enabling results monitoring, highlighting obstacles to achieving results in a timely manner, and ensuring the development and implementation of appropriate corrective actions by NEA, Government of Nepal and the Bank. - Component C4: Capacity Development. Provision of technical advisory services to: (i) NEA to strengthen the institutional capacity of its transmission business, including, inter alia, to increase cross-border transmission links; and, (ii) the Ministry of Energy and NEA to develop understanding of the concepts of benefit-sharing in export-oriented hydroelectric projects, and to strengthen their institutional capability to oversee the Project and further the regional power trade agenda from Nepal s perspective.

3 The three physical components of the project will be constructed and owned by three entities - two of them special purpose vehicles (SPV) in which NEA would be a shareholder. - The Indian portion of the project would be owned by an SPV called "Crossborder Power Transmission Company Private Limited" (CPTC). This is a joint-venture comprising Power Grid Corporation of India Ltd. (PGCIL) (26%); Sutlej Jal Vidyut Nigam Ltd (SJVNL) (26%); and IL&FS (48%). A recent shareholders meeting endorsed a 10% share for NEA (with a concomitant reduction in IL&FS shareholding). This SPV has been incorporated and is functioning. - The SPV to own the Nepal portion of the cross-border transmission line is called "Power Transmission Company Nepal Limited" (PTCN) and is also a joint-venture. The current shareholders are NEA (50%); and IL&FS (50%). PGCIL has received its Board s authorization to take up to 26% equity in PTCN (with a concomitant reduction in IL&FS shareholding ). This SPV is also established and functioning. - The Hetauda-Dhalkebar-Duhabi (H-D-D) line will be built and owned by NEA. Commercial/Legal Arrangements. The project is being developed on a commercial basis and therefore the legal framework will comprise the following agreements: - A Power Sales Agreement (PSA) between NEA and PTC India (formerly Power Trading Corporation, India); - An Implementation and Transmission Service Agreement (ITSA) between CPTC India and NEA (ITSA-CPTC); - An Implementation and Transmission Service Agreement (ITSA) between PTCN and NEA (ITSA-PTCN). These documents have been drafted and are being negotiated between the Indian parties led by IL&FS (the main developer of this project) and NEA for the ITSAs; and between PTC and NEA for the PSA. These agreements are expected to be signed by July Signature of these agreements is proposed as a condition of disbursement of the IDA financing against Part B of the proposed Project. 4. Project Location and salient physical characteristics relevant to the safeguard analysis - For the India portion, for the about 90km long line from Muzaffarpur to the Nepal border, the alignment is in flat terrain, with a stretch of about 0.75ha forest land to be acquired. No other sensitive receptors have been identified along that stretch. - For the Dhalkebar to India border the 40 km line running north-south, there are a few sensitive environmental receptors along the corridor.

4 - The East-West Duhabi-Hetouda (D-H) portion of the proposed transmission line (the largest component of the proposed Project) mostly runs parallel to existing infrastructure or in already anthropogenically impacted areas. Of the 285km length of this line, the initial 18.6 km (Hetauda- Hurnamadi) stretch of transmission line passes through a hilly area. Over the next 23.4 kilometers (Hurnamadi- Nijgadh), the line route gradually changes from hills to Terai. The remaining km (Nijgadh- New Duhabi) passes through flat plain of Terai and runs almost parallel to, and on the northern side of the East-West Highway. The substations are being expanded in Hetauda and Dhalkebar, while a new station is proposed in Duhabi. The proposed alignment often co-shares the Right Of Way (RoW) of the existing 132 kv transmission line and the Mahendra Highway, especially in sections where it passes through the core forest area. The proposed alignment has been selected to entirely avoid going through the critical natural habitat zones of Koshi Tappu Wildlife Reserve (KTWR) and the Parsa Wildlife reserve. The EA indicates that the proposed line does not go through any national park, wildlife reserve, buffer zone, conservation area, wetlands, or historically and archaeologically important sites. However the transmission line passes close to but still avoids the buffer zone of Koshi Tappu Wildlife Reserve, which is known to contain sensitive flora and fauna. 5. Environmental and Social Safeguards Specialists Mr Chaohua Zhang (SASDS) Mr Ishwor Neupane (SASDT) Mr Gaurav D. Joshi (SASDI) Mr Wolfhart Pohl (ECSS3) Mr Toran Sharma (SACNP) 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: Scope of Environmental and Social Impact Assessment. The developers of the Nepalese sections of the proposed Project (components A2 and B1) and the Indian section (component A1) have used separate approaches and arrangements in addressing the

5 social and environmental impacts of the transmission lines due to different financing, regulatory and institutional structures in the two countries. For the Nepalese sections of the transmission line (components A2 and B1), an independent environmental and social impact assessment has been completed that is consistent with the World Bank s Safeguards policies, as well as with the local regulatory requirements in Nepal. The Indian portion (component A1) will follow a framework approach consistent with Indian requirements as the exact alignment of the transmission line and the exact locations of the towers will only be finalized during implementation (explained below). The proposed Project is expected to contribute overall positively to the local economies through improved power supply.the local populations are also expected to benefit through enhanced employment opportunities, training, and extension services planned under the Project. Environmental and Social Management Framework for the Indian section of transmission line. The 90 km Muzaffarpur-Sursand line (component A1), i.e. the Indian portion of the line, will be implemented by CPTC, including the environmental and social mitigation measures. CPTC shareholders have indicated that the company would adopt environmental and social policies and procedures for the Indian portion in line with those of PGCIL s ESPP that have previously been reviewed and approved by the Bank under the provisions of OP/BP 4.00 (Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank-Supported Projects) for use in the Bank-financed Fifth Power Sector Development Project (PSDP-V, Ln. 7787) in India approved in The line will pass through the Muzaffarpur and Sitamarhi districts of Bihar, where Sursand is located at the India-Nepal border. Three alternative routes (of length 86.4 km, 85.7 km and km) for the transmission line were assessed by the shareholders through a consulting firm, during a walkover survey. Considering the route length, vicinity of industrial belts and growing cities, accessibility by roads for construction and maintenance and operation, the first alternative route (or Alternative 1) of 86.4 km route was chosen. A preliminary assessment based on the Forest Atlas, topographical sheets, Google maps and the walkover survey of the area by Bank safeguard specialists indicate that about 0.75 ha of forest land will be needed under the proposed (Alternative 1) transmission line route. The route alignment was carefully selected to avoid any villages or habitations. The line would also not pass through any tribal areas. In addition, the needed expansion of the Muzaffarpur substation can be accommodated within the existing substation premises. For the transmission line route, only the right of way is to be acquired (i.e., not the land), and the line routing will pass through agricultural land, and no people would need to be resettled. Keeping the requirements of the Forest (Conservation) Act in mind, the alignment was selected to avoid major forest areas. As the exact location and alignment of line and towers will be finalized during implementation, in line with PGCIL s ESPP, an Environmental Assessment and Resettlement Action Plan (RAP) will be prepared during implementation for this line. Environmental assessment and impacts for Nepalese Sections. In accordance with OP 4.01, an Environmental Assessment, as part of the Initial Environmental Examination (IEE) was undertaken for both the Dhalkebar-Bhittamod section of transmission line in

6 Nepal (component A2), as well as the Hetauda-Dhalkebar-Duhabi section of transmission line in Nepal (component B1). The assessment included developing baseline environmental and social conditions along the anticipated ROW as well as identification and evaluation of impact resulting from proposed intervention. The assessment indicates that environmental and social impacts associated with the project activities are not direct, irreversible or significant in nature. Hence the project is rated Environmental Category B. Also in compliance with OP 4.04 Natural Habitats, the Project avoids critical natural habitats; and includes mitigation measures for those non-critical areas that the Project would affect. Additionally, as part of the environmental assessment, in compliance with OP 4.36, the use of such forest land has been minimized - only a part of the HDD line would pass through some forest land - and to the extent of forest land and trees affected, mitigation measures in accordance with Nepalese law and regulations are included to be implemented under the Project. The findings are summarized below: - Dhalkebar-Bhittamod Section (Component A2): The proposed 40 km stretch of transmission line is located in Dhanusha and Mahottari district of Janakpur zone in Eastern Nepal. The project area does not lie in any national park, wildlife reserve, buffer zone, conservation area, wetlands, historically and archaeologically important sites or environmentally sensitive or fragile areas. The proposed alignment does not pass through forest land. The beneficial impacts include: employment of up to 400 people, increase in economic opportunity, enhancement of technical skills, increase in power exchange facilities and rural electrification. Potential adverse impacts typically associated with transmission lines, such as changes in land use pattern, water pollution, waste disposal and land degradation, are not expected to be significant or irreversible. The biological impacts during construction and operation phase include loss of 728 private trees, loss of 500 bamboo grooves on private property; and potential risk in some locations of birds striking the transmission line. The project-affected people would receive monetary compensation for the losses of trees and bamboo groves. To mitigate the impact on birds, proven methods for minimizing collisions with lines will be used. An Environmental Management Plan (EMP) has been prepared to mitigate and monitor the impacts during the construction and operations phases. These include land use restrictions, loss of agricultural production, land fragmentation and farming hindrance, withdrawal of economic opportunity, occupational safety and livelihood. Overall the environmental assessment shows that adverse impacts on physical, biological as well as socioeconomic and cultural heritage due to implementation and operation of the Dhalkebar-Bhittamod component of the project are limited and can be mitigated. - Hetauda-Dhalkebar-Duhabi section of transmission line in Nepal (component B1). The proposed 285 km 400 kv H-D-D transmission line (the largest component of the proposed Project) mostly runs parallel to existing infrastructure in already humanimpacted areas. The proposed alignment often co-shares the Right of Way of the existing 132 kv transmission line and the Mahendra Highway, especially in sections where it passes through the core forest area. The IEE indicates that the proposed line does not go through any national park, wildlife reserve, buffer zone, conservation area, wetlands, or historically and archaeologically important sites. While the proposed transmission line alignment was chosen to completely avoid going through Koshi Tappu Reserve and Parsa

7 Wildlife Reserve, its buffer zone which is approximately 10 km from the proposed Right of Way is known to contain sensitive flora and fauna, habitats for migratory birds and migration routes of the wild Asian Elephant. The anticipated direct impacts on these sensitive locations by the construction and operation of the H-D-D transmission line, however, are not expected to be significant. Any direct and indirect adverse impact on an area significantly broader than the immediate RoW or on facilities subject to physical work, will be mitigated, closely monitored and supervised. According to the IEE, the existing RoW of the 132 kv transmission line is not reported to have caused adverse impacts on the migration of birds or the wild Asian Elephant that continues to migrate over the highway and under the 132 kv line. The proposed 400 kv line which for the most part will run parallel to the existing 132 kv line will have a greater vertical ground clearance than the 132 kv line, and elephants (which are actually attracted by the crops and their traversing by elephants happens close to the harvesting season) can continue to pass through unhindered under the new line. The NEA environmental team supported by the Owners Engineer and the Bank s Safeguards team will closely monitor and supervise the construction and implementation phase of the Hetouda-Dhalkebar-Duhabi transmission line. Social Assessment and Impacts for the Nepalese sections. The total length of transmission lines in the Nepalese section is about 325 km (Hetauda-Dhalkebar-Duhabi 285 km + Dhalkebar-Bhittamod 40 km). NEA has carried out a Social Impact Assessment (SIA) for the entire length. In accordance with OP 4.12, involuntary resettlement has been avoided where possible; and where it would not be possible to avoid, a Resettlement Action Plan has been prepared through which affected persons would be assisted to improve their livelihoods and standards of living. While preventive planning approaches have been integrated into the Project using alternative engineering design options, appropriate mitigation measures have been planned to address residual adverse impacts. The SIA provides the socioeconomic and demographic profile in the Project districts, identifies potential positive and adverse impacts resulting from the Project s interventions, and screens the indigenous communities in the Project areas. In accordance with OP 4.10 Indigenous Peoples, the SIA team carried out extensive consultations with local communities and governments to identify Project-related impacts and possible mitigation, as well as recorded their expectations and recommendations for the Project. The SIA has confirmed the presence of indigenous communities in the Project areas and a process of free, prior and informed consultations has confirmed their support for the Project. A Vulnerable People Development Framework (VPDF) has been prepared that will guide proactive interventions to minimize potential impacts on the indigenous communities. The exact nature of impacts and interventions will be identified consultatively during finalization of the exact alignment and location of the transmission line, towers and substations. A RAP has been developed to resettle and rehabilitate people who will be affected due to the known specific locations of transmission line, towers and substations, while a Social Impact Management Framework (SIMF) has been developed to address the transmission lines, towers and substations whose alignment and specific locations are expected to be finalized only during implementation (described below). Additionally, in compliance with OP 4.11 Physical Culture Resources, during preparation, some minimal impacts on physical cultural resources have been identified,

8 and in consultations with the communities, mitigation measures have been included to be implemented under the Project. Resettlement Action Plan for transmission line, towers and substations for the Nepalese sections whose locations are known. The RAP (details in Annex) was developed based on data from a household survey of socio-economic status and impacts. It indicates that the affected population belongs to 29 different caste/ethnic groups scattered along the transmission line. Extensive consultations with the affected households were carried out to record their concerns and to inform them about Project impacts, and to develop mitigation measures. Overall, the towers and substations will require 21 hectares (ha) of land; relocation of nine private structures belonging to six households; and affect 133 households comprising 873 people. The RAP describes in detail the impacts; compensation policy and entitlements; compensation payment and relocation arrangements for the private structures, one primary school and three temples; and institutional setup and monitoring arrangements. Social Impact Management Framework is to be applied within Nepal where exact locations are currently unknown. The SIMF will be applied to those sections of transmission line and suspension towers whose alignment and specific locations will only be finalized during project implementation. The procedures described in the SIMF have been designed to comply with the relevant local regulations and the World Bank s Safeguards policies. The SIMF contains a framework with procedures and guidelines to identify, evaluate and prepare plans to address involuntary resettlement; issues concerning vulnerable communities including Indigenous Peoples; and consultation and participation and grievance redress mechanisms. The SIMF also describes policy objectives and principles, planning approach and requirements, review and approval procedures, and institutional responsibilities and implementation arrangements. During implementation, a site-specific RAP and Vulnerable People Development Plan (VPDP) will be prepared as soon as the exact location of the transmission line and suspension towers is established prior to finalization of the engineering designs. The site specific RAP and the VPDP will be reviewed, monitored and supervised by the independent environmental and social management unit of the NEA, supported by the Owners Engineer and the Bank s Safeguards team. The ITSA-PTCN will include the necessary provisions for the application of appropriate Safeguards policies. Natural Habitats: With careful reworking of the alignment, two recognized protected areas have been avoided resulting in increased length of the H-D line. In the portions of line through forest areas, some sections of the line alignment cross migratory paths of wild animals like elephants in the west of Dhalkebar, and migratory birds close to the KTWR. Forests: There are no forest lands in the RoW for the Dhalkebar Bhittamor line, and less than 1 ha of forest land will be acquired in India for transmission towers. For the H-D-D line, it is envisaged that trees in about 390 ha of forest land will be felled in Nepal along the D-H line as each lost tree will be compensated by planting 25 saplings, as per the regulation in Nepal. No commercial logging is envisaged under the project.

9 Physical Cultural Resources: The angle towers and substations of the two sections in Nepal will require the relocation of three small local temples (Gram Devata Dewhar Than, Shiva Teimple, Hanuman Temple) that the project will undertake in consultation with the local community. Involuntary Resettlement. The project has two sections with a 90 km in India and 325 km in Nepal. The 90 km of the Indian section has agreed to adopt the Indian Power Grid Corporation s safeguard policy, which has been accepted as equivalent to the World Bank s safeguard policies. For the 325 km in Nepal, NEA has carried out a Social Impact Assessment (SIA) for the entire length. The SIA provides the socioeconomic and demographic information in the project districts, and provides a screening of the indigenous communities in the project areas. NEA has disseminated project information and carried out extensive consultations with local communities and governments over the entire proposed transmission route. The SIA has confirmed the presence of indigenous communities in the project areas and a free, prior and informed consultations have confirmed their support for the project. An impact inventory survey and a census survey of the affected population were carried out for the angle towers and substations. They confirm that they will require 21 ha of land and relocation of nine private structures, affecting 133 households (873 people), including six households who will lose their structures. Three temples and one primary school will also need to be relocated. The affected population belongs to 29 different caste/ethnic groups. A resettlement action plan (RAP) has been developed for power towers at angle points and sub-stations, while a Social Impact Management Framework has been developed for the transmission lines and suspension towers whose alignment and locations are expected to be finalized with contractors technical input during implementation. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: No significant, irreversible indirect and/or long term adverse impacts are currently envisaged. Habitat fragmentation and operational impacts on wildlife are expected to be minor and decrease with the operational life of the transmission line. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The original alignment of the east-west line was reworked to avoid two recognized conservation areas - Core and buffer of the Koshi Tappu Wildlife Reserve; and buffer area of the Parsa Wildlife Sanctuary. While this has resulted in an increase in the length of the line, potential adverse impacts have been permanently avoided. For the selection of locations of the substations, alternative sites were analyzed including specific criteria for environmental aspects.

10 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. Environmental and Social Impact Assessment (ESIA): As an output of its assessment, in line with GoN requirements, an IEE that has also included an EMP with separate budget and implementation responsibilities clearly laid down has been prepared by the NEA. The EMP includes the measures that the contractor will be required to take in the implementation stage, including bio-engineering measures for tower base areas, and protection measures for the workers and public close to the project sites. The social provisions in this document include a survey of affected stakeholders and a framework for all required measures relating to compensation, resettlement and restoration of livelihoods. Natural Habitats: In addition of avoiding the recognized conservation areas, the project has also endeavored to align the line close to the existing 132-KV line so that the land take in forest areas, and fragmentation are minimized to the extent practical. Other restrictions on siting labor camps will also be in place. In addition, laborers will be instructed not to damage local flora and fauna. Forests: In line with GoN requirements, the project will plant 25 times as many saplings, as trees are cut. It will eventually require about 1000 ha area to be planted which will be identified and afforested under the project. This will result in increase of forest cover over the life of the project infrastructure. Physical Cultural Resources: The alignment will affect two locally important shrines whose relocation will be under the project after consultations with the communities concerned. In case of chance finds, the process to be followed for conservation/protection has been included in the EMP. Involuntary resettlement. A resettlement action plan (RAP) has been prepared for the Nepal side for power towers at angle points and substations. The RAP follows relevant domestic and World Bank policies. It is developed on the basis of an inventory survey of impacts and census survey of the affected population as well as extensive consultations with the local communities The RAP describes in detail the impacts, compensation policy and entitlements, compensation payment and relocation arrangements for the private structures, one school and the three temples. It also describes the institutional setup and monitoring arrangements. Indigenous Peoples. A Social Impact Management Framework is prepared for transmission lines and towers whose alignment and locations are yet to be finalized during project implementation. This framework is developed to guide the preparation of the social planning to address impacts under the transmission lines and suspension towers. The SIMF covers involuntary resettlement; vulnerable communities including indigenous peoples, consultation, grievance redress mechanisms and institutional arrangement. It includes an overall policy framework on resettlement and indigenous peoples, a resettlement and rehabilitation framework, a vulnerable community people s

11 development framework, consultation and grievance redress mechanisms, institutional and monitoring evaluation arrangements. Physical cultural resources. Consultations were carried out with local communities over the relocation impacts and arrangements. Local communities agreed with proposed arrangements to relocate the temples to nearby sites with better structures. The project will compensate for the structures and will provide assistance in their relocation and reconstruction. These are included in the Resettlement Action Plan. However, given the extent of construction and the pending finalization of the transmission lines and supporting towers, the EMP also includes mechanisms to handle chance finds and possible impacts under these activities. Implementation Arrangements: As mentioned earlier, for the Muzaffarpur-Sursand line in India (Component A1), CPTC shareholders will address the joint supervision arrangements among themselves in the ITSA-CPTC; and IDA will have no supervision rights for this component. Similar joint supervision arrangements would be entered into in the ITSA-PTCN for the Dhalkebar-Bittamod line (Component A2) in Nepal, which is also not financed by IDA. However, IDA would be able to monitor, through NEA the implementation of this component, including adherence to the Safeguards aspects satisfactory to the Bank. IDA would of course supervise the HDD line and concomitant substations, which it would be financing. While the NEA s capacity is being strengthened for safeguards management through other ongoing engagements in the power sector in Nepal as well as through this project, a two-level monitoring and supervision framework is proposed for the implementation of the H-D-D line. The PMO will have a specialized Safeguards Monitoring Unit (SMU); and the construction Contractor s team will be required to have a trained environmental and social development specialist on their team to assist during implementation. An Owners Engineer will assist the NEA to oversee the work of the Contractor. In addition, a Lenders Engineer with sufficient expertise on the environmental management aspects of transmission line construction will also be hired to help with safeguards monitoring and supervision. For the Dhalkebar-Bhittamod line, PTCN will prepare similar suitable site specific plans to address environmental management measures specified in the IEE and share them with NEA. PTCN will also share required information with NEA so that NEA can report to the Bank on compliance with these requirements each trimester. The total estimated environmental and social management cost for the Nepalese portion of the proposed Project is approximately US$15 million. This includes: costs of compensation and livelihood assistance; compensatory reforestation and biodiversityrelated mitigation measures; relocation of a primary school and three temples; environmental monitoring during pre-construction, construction and operation phases of the Project; provision of a communications/outreach centre; supervision and monitoring of implementation; and capacity building of NEA staff on environmental management and social issues.

12 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The key stakeholders are residents of the 77 VDCs and 2 municipalities, especially those living close to the alignment and locations of the substations across 10 districts in Nepal for the D-H line, and those who will bear direct negative potential impacts by construction and operation of the TL. Also, local, national and regional NGOs are recognized as important stakeholders, e.g. in nature and wildlife conservation and social protection. For the Dhalkebar-Bihittamor section, such stakeholders include residents of the 25 VDCs through which the alignment passes. Extensive consultations were carried out during the project planning process with local stakeholders, including local communities, various ethnic groups and local governments. Public meetings were organized during the assessment study and information regarding the project benefits and impacts was shared with the local residents. In addition, officials of the Forest Department, and those charged with the protected areas - KTWR and Parsha sanctuary have also been consulted as key stakeholders. During the IEE preparation, 47 Forest User Groups were also consulted for the D-H line. B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Date of receipt by the Bank 02/16/2011 Date of "in-country" disclosure 02/16/2011 Date of submission to InfoShop 02/17/2011 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 02/16/2011 Date of "in-country" disclosure 02/16/2011 Date of submission to InfoShop 02/17/2011 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank 02/16/2011 Date of "in-country" disclosure 02/16/2011 Date of submission to InfoShop 02/17/2011 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.

13 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/BP Natural Habitats Would the project result in any significant conversion or degradation of critical natural habitats? If the project would result in significant conversion or degradation of other (non-critical) natural habitats, does the project include mitigation measures acceptable to the Bank? 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 Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as appropriate) been prepared in consultation with affected Indigenous Peoples? If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan? If the whole project is designed to benefit IP, has the design been reviewed and approved by the Regional Social Development Unit or Sector Manager? 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 Forests Has the sector-wide analysis of policy and institutional issues and constraints been carried out? Does the project design include satisfactory measures to overcome these constraints? Does the project finance commercial harvesting, and if so, does it include provisions for certification system? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank s Infoshop? No N/A No N/A No No

14 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 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? No D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Raghuveer Y. Sharma 05/02/2011 Environmental Specialist: Mr Gaurav D. Joshi 02/16/2011 Social Development Specialist Mr Chaohua Zhang 05/07/2011 Additional Environmental and/or Social Development Specialist(s): Mr Toran Sharma Mr Ishwor Neupane Mr Wolfhart Pohl 02/16/ /16/ /06/2011 Approved by: Regional Safeguards Coordinator: Mr Sanjay Srivastava 05/08/2011 Comments: cleared. Sector Manager: Mr Malcolm Cosgrove-Davies 05/06/2011 Comments: cleared.