INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC3842. Date ISDS Prepared/Updated: 03/09/2009 I. BASIC INFORMATION. A. Basic Project Data

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Date ISDS Prepared/Updated: 03/09/2009 I. BASIC INFORMATION A. Basic Project Data INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC3842 Country: Indonesia Project ID: P Project Name: Upper Cisokan Pumped Storage Power Project Task Team Leader: Leiping Wang Estimated Appraisal Date: August 18, 2009 Estimated Board Date: February 18, 2010 Managing Unit: EASIS Lending Instrument: Specific Investment Loan Sector: Power (100%) Theme: Infrastructure services for private sector development (P) IBRD Amount (US$m.): IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: Borrower B. Project Objectives [from section 2 of PCN] The development objective of the proposed project is to improve the overall efficiency of the power generation system in Java-Bali. This will be achieved through: (a) the development of the proposed Upper Cisokan Pumped Storage hydropower plant in an environmentally sustainable and socially responsible manner, and (b) the implementation of an institutional and technical assistance program to improve PLN s managerial and operational capabilities. Achievement of the development objective will be assessed through the following indicators: (a) reduction of the generation cost in real terms; and (b) the efficiency improvements of baseload fossil fuel power plants. Output indicators for technical assistance implementation will be determined at a later stage of project preparation. C. Project Description [from section 3 of PCN] The proposed project will provide support for PLN s development of the country s first pumped storage power project, in an effort to provide a best practice case of sustainable hydropower development in Indonesia s power sector. In addition, it will assist PLN s on-going reorganization in strengthening its planning, operational, and managerial capacity to improve the long term overall efficiency of the power industry in the country. The total project cost

2 (excluding price contingency) is estimated at US$ 661 million and it is proposed by PLN that around US$ 530 million will be financed by the Bank. Component 1: Upper Cisokan Pumped Storage Power Project The proposed Upper Cisokan Pumped Storage power project will be the first pumped storage project in Indonesia. It is located 150 km south east from Jakarta, the capital of Indonesia, and at the upstream basin of the Cisokan River, one of the tributaries of the Citarum River in the West Java Province. In the vicinity of the project, there are two existing large hydropower stations, all financed by the Bank in the 1980s. The project site was identified in the mid 1980s and the feasibility study of the project was carried out during During , the detailed engineering design was undertaken. From , the Bank financed its supplementary engineering design. The development consists of (i) a new lower reservoir with around 10 million cubic meters of volume and impounded by a roller compacted concrete (RCC) dam with a maximum height of 98.0 meter, (ii) a new upper reservoir with around 10 million cubic meters of volume and impounded by a RCC dam with a maximum height of 75.5 meters; (iii) waterway structures including two headrace tunnels with a total length of 2,375 meters connecting the lower and upper reservoirs; (iv) an underground powerhouse with an installed capacity of 4x260 MW; (v) associated 500 kv transmission lines to connect the power station to the Java-Bali power system; and (vi) consulting services to assist in engineering design, procurement, construction management, and supervision. Component 2: Community Development Program Subject to the final approval of PLN s management, a community development program would be financed under the project. The program will target all people living in the project area; not just the people who are directly affected by the project. The objective of the program will be to deliver benefits to the local communities above and beyond the entitlements under the Land Acquisition and Resettlement Action Plan (LARAP). The activities to be carried out as part of the Community Development Program will be separate from the measures included in the LARAP, i.e., the measures to compensate persons who lose land and other assets and to facilitate the relocation and rehabilitation of displaced persons. The community development program, proposed to PLN during the identification mission in June, 2008, would provide: (a) physical infrastructure, such as electricity, roads and water supply; (b) community infrastructure such as schools and clinics; (c) assistance in formulating and piloting income generating activities either at the community level or by individuals; and (d) assistance in financing such activities after pilots have been proved successful. Design and implementation of activities should take into account the respective strengths and weaknesses of the local community, local government organizations and the project developer. Lessons learned from projects in other countries would be incorporated in the program design if confirmed by PLN. Component 3: Technical Assistance and Capacity Building Component It has been agreed that this component will consists of following activities:

3 Feasibility Study and Preparation of Basic Design and Bid Documents for Matenggeng Pumped Storage Project: Preparation of Matenggeng project is well advanced since a good prefeasibility study was carried out by EDF in This study included a substantial amount of site investigation. The objective of further studies will be updating of previous studies to verify engineering and economic feasibility and preparation of basic design and bid documents. Corporate Business Strategy Study: This study will be carried out in cooperation between PLN and high caliber international consultants in the context of PLN s recent re-organization. It would assess PLN s corporate strategy with the aimof improving the financial viability of PLN and maximizing the shareholders value. The study will develop the strategy for PLN s business and operations covering (a) business development; (b) investment portfolio management; (c) business units/subsidiaries/affiliates alignment; and (d) corporate and financial management to ensure effective capital investment, sound fund raising strategy and strong cash management with minimum risk exposures; taking into account the economic, regulatory, market and organizational capability as well as current and future business challenges of PLN. In addition, training and high level advisory services will be provided to PLN s management on IPP negotiation, strategic planning and other important issues as required by PLN. Updating of system planning and operation capability: PLN has a good planningteam and relatively strong system operation capability. Its planning capacity, however, had been weakened by the different restructurings and the transfer of several team members to other duties. The recent restructuring reestablished the Planning Department which requires tailored training programs and assistance to improve the planning team skills, especially in the areas of hydropower and renewable energy development. The activity will also assist PLN in, if required, upgrading the existing models to meet new planning requirements. The technical assistance would include on-the-job training provided by international experts and a tailored training program for the planning team to bring their skills up to international practice. On the operation side, a priority program will be the training of PLN s concerned staff to efficiently use and adequately maintain and operate pumped storage plants. D. Project location (if known) The Upper Cisokan Pumped Storage Project (upper and lower reservoirs, quarry, powerhouse, intake, outlet, access road and transmission lines) will be located at the upstream basin of the Cisokan River in West Java, about 150 km south east of Jakarta and about 30 km west of Bandung. The project area is spread over the West Bandung Regency and the Cianjur Regency. The climate in the project area is a wet tropical climate with one dry and one wet season. It is influenced by the monsoon. The project area is covered by an alluvial and young volcanic sediment with an elevation from 400 to 1,000 meter above the sea level (asl). It is located in a Seismic Area 4 and considered as a low to medium risk. The forest around the project site consists of productive and natural forest located at the western side of the Cisokan River. The productive forest is mainly planted with pine, abbizia, hindi teak and callandria. The natural forest is located at the eastern side of the Cisokan river.

4 E. Borrower s Institutional Capacity for Safeguard Policies [from PCN] PLN s institutional capacity for safeguards policies have been weakened by the multiple restructuring of the company during the last few years. The institutional capacity for safeguard policies will be thoroughly assessed during preparation and required building capacity will be incorporated in on-the-job training during preparation and in the EMP institutional capacity building component. F. Environmental and Social Safeguards Specialists Mr Juan D. Quintero (EASRE) Ms Sulistiowati Ms. (EASTE) Mr Jose Vicente Zevallos (EAPCO) Ms Francisca Melia Setiawati (EASIS) Mr Andrew Daniel Sembel (EASIS) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) The project is proposed as category A. EIA and EMP were prepared under the existing TA loan of Java Bali transmission project, by international consultants. Although the EIA and EMP have been developed, based on field visits by the Team and meetings with PLN, it has been agreed that several elements of the EIA still merit further improvement. Because of the various specialized environmental studies to date on the Cisokan Pumped Storage Project and detailed design studies carried out in the project area, much of the EIA improvement can be compiled and synthesized from existing information. Nevertheless, additional data collection and analysis and desk review will be needed to complement the issues identified and prepare an updated and "improved EIA". Several areas for concentration in further analysis include: Analysis of Alternatives: Demonstration that the pumped storage plant is the least cost power generation development from the economic viewpoint can be drawn from the updated least cost studies. Description of alternatives considered with respect to the project itself as discussed in the feasibility and design reports (such as routing of access roads, type of dams), will also be carried out. Downstream Impacts: A more thorough analysis of downstream and upstream impacts will be undertaken. This should include the management of water releases from the reservoir, especially during filling of reservoirs, potential impacts on socioeconomic activities downstream (water uses including irrigation and water supply, number of potentially affected population), fish and fisheries, property and cultural resources impacts, water quality (and measures to improve it), navigation and health issues associated with the formation of the reservoir and operation of the hydropower plant. Biodiversity Issues: The EIA report will clarify the presence or absence of endangered species or critical habitats in the areas to be affected by the project. Construction-related Impacts: The EMP will be complemented to provide the detail necessary to effectively plan all construction related impacts and the impacts stemming from the

5 Safeguard Policies Triggered Yes No TBD large workforce that is necessary for the construction of the project. The analysis will include: (i) Impacts and management plan for the workers camp: (i) the management of camp waste (liquid and solid); (ii) workers environmental and social behavior (prohibitions such as hunting, poaching, social interaction with local population); (ii) the management of health issues in the camp and surrounding communities, especially sexually transmitted diseases; (iii) local hire policies and training needs for local population; (iv) environmental education and awareness, as well as health and safety (see section on health above), of workers and local communities; and, (v) analysis of strategic options for camp management (self contained, food supply, engagement of local producers); (ii) Management of all construction impacts.(i) the management of air quality (dust) and noise in all work areas; (ii) the planned restoration of all affected areas such as borrow pits and quarries, and, (iii) alternatives for the control of vehicle speed in public roads; and (iii) The definition of the presence or absence of cultural properties in the reservoir area, borrow pits, workers camp, and quarries. As a minimum, the analysis should propose chance finds procedures to be applied during site preparation, pre-construction and construction periods. Access Road and Transmission Line: The environmental and social assessment will be conducted on each proposed development (lower and upper reservoirs, waterway tunnels, underground powerhouse, access roads, quarry, and 500kV transmission lines), as well assessing the overall cumulative impacts of these proposed developments. In addition, environmental, health and safety will be assessed especially in terms of emergency measures during construction and operational due to natural disaster and technical failure. For the access road, field surveys of environmental and social issues will be carried out along expected ROWs of the projected road infrastructure. This will include social surveys, definition of land acquisition needs and ecosystem mapping of critical points for the management of erosion, stability, and drainage. Identification and management plans for the disposal of earth cuts and construction wastes. Restoration of roadside economic activities should be a priority. Design of Environmental Management Plans and Resettlement Plans for the Access Road. These plans will be prepared either as separate plan or as included in the overall EMP for the project, depending on the timing of the initiation of construction of the access road. Environmental Management Plan: The existing EMP does not include any measures for cultural property or chance finding procedures or measures to manage of downstream impacts. An improved Environmental Management Plan will be prepared, with sufficient detail for implementation, including specifications for contractors, detailed description of all activities, necessary arrangements and costs for all mitigation measures. Measures such as dealing with fluctuations in upper reservoir, traffic safety, camp management, will be detailed in the improved EMP. Institutional capacity: Institutional capacity will be assessed during project preparation to see current capacities and way forward to strengthen the implementing agencies, in particular in implementing the EMP of each development. An establishment of environmental and social project team who will be mainly based in the field - will be proposed to manage and implement the environment and social aspects of the project. The team will be integrated into the existing corporate environmental unit of PLN. Adequate provisions (e.g. budget, training, etc) will need to be provided to accommodate the strengthening efforts.

6 Safeguard Policies Triggered Yes No TBD Public consultation and disclosure will be adequately prepared and implemented. Two approaches to public consultation will be carried out: For the EIA : projects affected groups and local NGOs on environmental aspects at least twice shortly after environmental screening/before the TOR for the EAare finalized; and once a draft EA report is prepared. During implementations: throughout project implementation as necessary to address EA related issues that affect them. The PLN will be responsible to conduct these consultations and disclosure. Natural Habitats (OP/BP 4.04) The project site is located in mountainous area with intensive land use for cultivating rice and other crops. Upper reservoir vegetation consist of home garden, lawn (vegetable, fruits, etc), bushes, rice fields, pine wood plantation, and dry field (uncultivated) owned by the forestry department. Whereas the natural forest found in the lower reservoir with a status of protection forest to preserved water resource. No endangered species of flora are found (listed in the IUCN), though the literature mentions that there are 17 species of protected animals are found in the region of the lower reservoir area (e.g. silvery gibbon Hylobates Moloch and Panthera Pardus are some of the primate rare types which get species attention from the IUCN). However, there are no reports that these species are found in the project area and it is unlikely that these species will be flooded. The EIA will include additional surveys and further review on the application of this policy and present any findings on the mentioned species. Forests (OP/BP 4.36) The project will not affect critical forest areas or related critical natural habitats. A few patches of natural forest that still remain in the areas may be inundated and their impacts will be dealt through the natural habitats policy. Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) According to existing studies, there are no historical resources found, however, there are several places which are still considered as holy place by the local community, amongst others at the upper reservoir location a holy cemetery called Mbah Dongkoherang and Gunung Masigit (located in Cicadas Village, Rongga Sub-district) which according to local residence are occupied by supernatural creature. The lower reservoir inundation area, at Ciseupan Hamlet, Margaluyu Village (Campaka Subdistrict), a Masjid Ajengan Gelar (mosque) was found as a religious Moslem ritual place used by most of the religious leader, informal leaders and the community in general. Other holy area in Cibeber Subdistrict is the cemetery of Eyang Tubu (not inundated) and the cemetery of Eyang Sahid. Further surveys will be carried out as part of the EIA improvement exercise. Chance finding

7 Safeguard Policies Triggered Yes No TBD procedures will be prepared and included in construction management plans. Indigenous Peoples (OP/BP 4.10) Indigenous Peoples, as defined in the policy, will not be impacted by the project. Most of the people in the project area are Sudanese, the dominant ethnic group in West Java, and speak the national language. Rice farming is the principal occupation, employing approximately 82% of the population affected by the project. Agricultural land is individually owned and rice production is sold in local markets. According to a survey carried our in 2001, 47% of the farmers to be affected by the project obtain income from a second occupation. Social organizations in the study area are principally religion-based. The investigations carried out as part of the Environmental Assessment did not identify cultural, social or political institutions that are separate from those of the dominant society and culture. Involuntary Resettlement (OP/BP 4.12) According to the Environmental Impact Assessments carried out in 2007, a total of 765 hectares will have to be acquired for the project: 105 for the upper reservoir, 356 for the lower reservoir, 79 for the disposal areas, 18 for the quarry, 107 for the new access road, and 100 for the 500 kv (29,5 km) transmission line. A total of 1,866 households will be affected by the project: 224 households (12 percent) by the upper reservoir; 557 households (30 percent) by the lower reservoir; 154 households (8 percent) by the disposal areas; 37 households (2%) by the quarry; 345 households (18%) by the existing road; 222 households (12%) by the new road; and 327 households (18% percent) by the transmission line. A total of 987 households will be physically displaced and will need to relocate. Of these, 194 households occupy the upper reservoir area; 281 households occupy the lower reservoir area; 36 households occupy the disposal areas; 37 households occupy the quarry area; 345 households occupy the right of way of the existing road; and 94 households occupy the right of way to be established for the new road. Land Acquisition and Resettlement Action Plans (LARAPs) will be developed in the next few months to address the impacts of: (1) the access roads, including the quarry; (2) the upper reservoir, including the dam, the green belt and the spoil bank; (3) the lower reservoir, including the dam, the green belt, the spoil bank and the surge tank; (4) the transmission towers and the switchyard; and (5) the right of way (ROW) of the transmission lines. The level of vulnerability of the affected communities is very high, according to field observations and data presented in different reports. The upper and lower reservoirs will affect mostly rice farmers. Agriculture is the primary or secondary occupation of nearly 90 percent of the affected households. Educational levels are low and poverty indices are high. Most farmers displaced by the two reservoirs have land rights, but do not have formal title to the land. Instead, they have traditional rights or documents issued by local officials that demonstrate ownership. Over 50 families are landless and the majority of families affected by the access roads do not appear to have land rights (the majority are occupants of the right of way of the existing road, and have been there for many years).

8 Safeguard Policies Triggered Yes No TBD Safety of Dams (OP/BP 4.37) Two dams at heights of 98 meters and 75.5 meters will be built under the proposed project. Therefore, a Panel of Experts on Dam Safety will be established up to review designs and management of contingencies downstream. Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60) Environmental Category: A - Full Assessment III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: 04/09/2009 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: N/A C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: B. For simple projects that will not require a QER, the target date for preparing the PADstage ISDS: C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing should be specified in the PAD-stage ISDS: to be determined IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Leiping Wang 02/13/2009 Approved by: Regional Safeguards Coordinator: Mr Panneer Selvam Lakshminarayanan 03/04/2009 Comments: Sector Manager: Ms Sonia Hammam 03/06/2009 Comments: 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.

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