INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC6530. Date ISDS Prepared/Updated: 03/14/2012 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: 03/14/2012 I. BASIC INFORMATION A. Basic Project Data INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC6530 Country: Kenya Project ID: P Project Name: KENYA: Lake Turkana Wind Project Task Team Leader: Karan Capoor Estimated Appraisal Date: March 5, 2012 Estimated Board Date: September 27, 2012 Managing Unit: AFTEG Lending Instrument: Sector: Other Renewable Energy (100%) Theme: Rural services and infrastructure (50%);Infrastructure services for private sector development (50%) IBRD Amount (US$m.): 0 IDA Amount (US$m.): 0 GEF Amount (US$m.): 0 PCF Amount (US$m.): 0 Other financing amounts by source: Borrower 0.00 IDA Guarantee B. Project Objectives [from section 2 of PCN] The development objective of the proposed Project is to: increase power generation capacity, contribute to the diversification of the fuel mix; and increase the capacity of clean electricity generation in Kenya through the Lake Turkana Wind Project (LTWP). C. Project Description [from section 3 of PCN] Lake Turkana Wind Power Limited is a special purpose vehicle (SPV) formed to develop, finance, build and operate a EUR 582 million, 300 MW wind farm near Loyangalani in Marsabit County, approximately 12 km east of Lake Turkana in north-eastern Kenya. The Project site is located on the southeast border of Lake Turkana between two high ranging mountains. This location lies in the "Turkana Corridor" where a low level jet stream originating in the Indian Ocean creates favorable wind conditions. The Project area falls within a valley between Mount Kulal and Mount Nyiru which produces a venturi effect (effectively serving as a funnel) in which wind streams are accelerated to high speeds. The site covers an area of 165 km/sq with unique geographical conditions in which daily temperature fluctuations generate strong, predictable wind streams between the lake and the desert hinterland. The closest deep-sea port is Mombasa, 1,200 km southeast of the site.

2 The Project will comprise 365 Vestas Wind Systems A/S V52 wind turbine generators, each of 850 kw generating capacity, a Siemens-supplied and built 33 kv electrical collection network and 33/200 kv substation, and an ABB dynamic reactive power system. The renewable power generated will be fed into Kenya's national grid and make up approximately 17 percent of the country's installed power supply in the first year of operation (2014). The transmission infrastructure required for the Project is the responsibility of KETRACO. The works will include a 428 km, 400 kv overhead transmission line and a sub-station at Suswa, 90 km north of Nairobi. This infrastructure is scheduled to be completed 3 months prior to the commissioning of the first phase (first 50 MW) of the Project. The Project will sell 100 percent of its output to KPLC under a 20 year take-or-pay PPA. LTWP Limited, which was incorporated as a SPV in September 2006, will implement the project. The Bank Group involvement in the Project will comprise an IDA Partial Risk Guarantee (IDA PRG) and MIGA Breach of Contract Insurance. The IDA PRG will be denominated in Euro and will be issued for an initial amount of up to EUR 54 million (US$78 million). This amount will cover three months of energy charge payments under the PPA equivalent to EUR 30 million, and six months of payments associated with delay in completion of the transmission infrastructure equivalent to EUR 24 million. Upon completion of the latter, the amount of the IDA PRG will be reduced to EUR 30 million. The IDA PRG will be implemented using a Letter of Credit Structure. Twenty-five percent of the exposure under the IDA PRG would be counted against IDA's commitment to Kenya. D. Project location (if known) The wind farm site will occupy about 24,000 acres within a concession area of 150,000 acres located about 50 km north of South Horr Township. The nearest turbines will be located at least 10 km east of Lake Turkana, approximately 20 km southeast of the village of Loiyangalani. In addition to building and operating the wind farm, LTWP Ltd. (the private sector project proponent) will upgrade the final 196 km of existing, unpaved, rural road leading up to the project site. Ketraco, a state-owned enterprise, will build with Spanish government financing a 428-km 400 kv transmission line from the wind farm to a new substation to be built on unoccupied, open land near Suswa, about 60 km northwest of Nairobi. For the 250 km stretch of proposed transmission line between Rumuruti and the project site the area is semi-arid to arid with sparse population. For the 190 km between Suswa and Rumuruti, there are more people and agricultural activities located in the proposed corridor. E. Borrower s Institutional Capacity for Safeguard Policies [from PCN] LTWP Ltd. arranged for local consultants to prepare Environmental and Social Impact Assessments (ESIAs) for the wind farm and the 400 kv transmission line; these were submitted to NEMA in May 2008 and July 2008, respectively. Subsequently, a social-economic study report for the proposed wind farm and transmission line was produced in March 2009, an updated ESIA for the wind farm power project was produced in July 2009 that reflected a larger project design and was prepared to meet the requirements of the IFC Performance Standards and Equator Principles, and a draft ESIA was prepared in June 2010 for the proposed strengthening of the existing road from Laisamis to Loiyangalani via South Horr. The project design, the ESIAs for the project components, including the transmission line, and the associated ongoing

3 community consultation programs were subject to an independent review in May 2011 for compliance with IFC Performance Standards. The independent review of the ESIA documentation confirmed that the project, including the associated transmission line, is broadly in line with IFC Performance Standards. The key issues subject to ongoing assessment work include: confirmation of sufficient water supply for construction and operations; confirmation of impacts of building short road bypasses around the communities of Ngurunti, South Horr, and Kurungu; management of road traffic during construction; and location of workers camps and office and maintenance facilities. LTWP Ltd. has demonstrated a sensitivity to the cultural setting of the area and has engaged each tribal group in an equitable manner in relation to consultation, management of employment opportunities, as well as development of the Corporate Social Responsibility Program (CSRP) that is intended to help meet local needs and interests of the respective communities within their particular areas of settlement and pastoralist activity. Key issues and concerns that have been raised during the ESIA process are identified in the ESIA reports. Kenya Transmission Company (KETRACO) will be the implementing entity for construction of the Transmission Line. It is a state-owned company, established in 2008, responsible for building and operating new transmission lines. Under the ongoing IDA-supported Electricity Expansion Project, KETRACO is receiving capacity building in environmental management and monitoring. It is the implementing entity for the Mombasa-Nairobi 220 kv high voltage line (financed by AfDB, EIB, and AFD) and thus has experience in implementing environmental and social management activities. KETRACO has already prepared a standardized Resettlement Policy Framework, largely in line with Bank OP 4.12, which has been reviewed by Bank staff and accordingly revised to ensure full compliance with Bank standards. KETRACO environmental and social staff will be included in training visits to utilities with similar projects that have implemented Bank safeguards. F. Environmental and Social Safeguards Specialists Ms Gibwa A. Kajubi (AFTCS) Ms Noreen Beg (AFTEN) Mr Harvey D. Van Veldhuizen (MIGEP) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) Environment LTWP Ltd. arranged for local consultants to prepare Environmental and Social Impact Assessments (ESIAs) for the wind farm and the 400 kv transmission line; these were submitted to NEMA in May 2008 and July 2008, respectively. Subsequently, a social-economic study report for the proposed wind farm and transmission line was produced in March 2009, an updated ESIA for the wind farm power project was produced in July 2009 that reflected a larger project design and was prepared to meet the requirements of the IFC Performance Standards and Equator Principles, and a draft ESIA was prepared in June 2010 for the proposed strengthening

4 Safeguard Policies Triggered Yes No TBD of the existing road from Laisamis to Loiyangalani via South Horr. The project design, the ESIAs for the project components, including the transmission line, and the associated ongoing community consultation programs were subject to an independent review in May 2011 for compliance with IFC Performance Standards. The independent review of the ESIA documentation confirmed that the project, including the associated transmission line, is broadly in line with IFC Performance Standards. A few specific issues require addition analysis and clarification so that the ESIA findings can be incorporated into Environmental and Social Management Plans for the project, and to produce a detailed Corporate Social Responsibility Program, which is still in progress through ongoing consultations with local groups living in the project area. The key issues subject to ongoing work include: confirmation of sufficient water supply for construction and operations; confirmation of impacts of building short road bypasses around the communities of Ngurunti, South Horr, and Kurungu; management of road traffic during construction; and location of workers camps and office and maintenance facilities. The ESIAs for the wind farm and road improvement will be updated during project preparation before Board approval. KETRACO, a state-owned enterprise, will build with Spanish government financing a 428-km 400 kv transmission line from the wind farm to a new substation to be built on unoccupied, open land near Suswa, about 60 km northwest of Nairobi. Although KETRACO will be responsible for the final environmental and social impact assessment and management of the transmission line, LTWP Ltd. arranged for an environmental and social assessment of the proposed transmission line corridor in the early stages of project design and preparation. Natural Habitats (OP/BP 4.04) The ESIAs for the wind farm and the road improvement describes the area as semi-arid to arid, with sparse plant cover and low density of wildlife. The wind farm will be located well away from Lake Turkana, which is an important natural habitat, and designated protected areas located well to the east and to the west of the wind farm site. Detailed bird studies have been carried out. The wind farm site has been assessed as having low risk of impact to birds and bats. Given the extremely high wind velocity, the site is not heavily populated with avi-fauna, apart from raptors whose flight paths are well above the height of the turbines. Forests (OP/BP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Consultations with local communities have not identified any physical cultural resources on the wind farm site, and an archaeological survey has also been carried out. Significant issues of cultural heritage are not anticipated for the wind farm site or the road improvement. Chance finds procedures will be included in the construction projects. The ESIA for the transmission line identifies a few sites of cultural and religious significance to local communities, and recommends avoidance of these areas. KETRACO's consultants have indicated that there is sufficient flexibility in the routing of the transmission line to avoid these areas. Indigenous Peoples (OP/BP 4.10) The team is exploring the project footprint and its potential impact on or proximity to Indigenous Peoples. Involuntary Resettlement (OP/BP 4.12) The ESIA for the wind farm concludes that there will be no requirement for land acquisition or resettlement, although a RAP has been prepared for the wind farm site, and will be updated

5 Safeguard Policies Triggered Yes No TBD before Board approval to address remaining compensation issues (temporary location of a pastoralist community with improved access to water facilities through provision of a borehole). Consultation with local communities identified access to grazing land as a concern; to minimize impact, the wind farm will not be fenced off apart from the switchyard and individual transformers, for safety reasons. Grazing will be allowed between the turbines. Although no physical resettlement is currently envisaged, a Resettlement Policy Framework (RPF) was prepared for the project in November The initial draft ESIA for the improvements of the existing road as it approaches the project site anticipated the alignment would still pass through the villages of Ngurunit, South Horr, and Kurungu. The project RPF would be applicable to the road improvement component as well; however, current plans are to build bypasses around the three communities, and it is expected that this will avoid the need for any displacement of households or economic activities. The ESIA for the road improvement component will not be finalized until additional planning and design work is completed regarding the new bypass rights-of-way, and associated activities such as borrow pits, access tracks, and the staging area near Laisamis junction. The November 2010 RPF was also prepared with the intent for it to be applied to the transmission line; consultants hired by Ketraco are carrying out additional survey and design work in order to minimize the number of affected properties that may require compensation for land acquisition in accordance with the RPF. There will be a need for a draft RAP to be prepared, approved, and disclosed for the transmission line once the exact alignment and civil works are known. The RPF - and a standardized RPF prepared by KETRACO in accordance with Bank OP 4.12 will also be used to guide preparation of a RAP for either the wind farm or the road improvement, once final design and siting decisions are made and it is known whether households will be displaced or livelihoods significantly impacted by land acquisition. Safety of Dams (OP/BP 4.37) 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: 06/14/2012 B. For 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. 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.

6 The final cleared Safeguards documents, namely the ESIA and the Addendum, as well as the RAP, have been disclosed both in the country and at the Bank Infoshop. IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Karan Capoor 03/12/2012 Approved by: Regional Safeguards Coordinator: Ms Alexandra C. Bezeredi 03/12/2012 Comments: Sector Manager: Mr Lucio Monari 03/12/2012 Comments: