INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Report No.: Date ISDS Prepared/Updated: 16 January 2007 I. BASIC INFORMATION A. Basic Project Data INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Country: Pakistan Project ID: P Additional Project ID (if any): Project Name: Pakistan Community-Based Renewable Energy Development in Northern Areas and Chitral Task Team Leader: Jeremy Levin Estimated Appraisal Date: TBD Estimated Board Date: NA Managing Unit: Environment Lending Instrument: Carbon Offset Sector: SASSD Theme: Climate Change IBRD Amount (US$m.): IDA Amount (US$m.): GEF Amount (US$m.): PCF Amount (US$m.): TBD Other financing amounts by source: Local equity, in-kind and land contribution 2.99 PPAF IDA grant 6.67 Government of Pakistan (Northern Areas) 2.54 Domestic Borrowing 1.13 Royal Norwegian Embassy 1.64 Total Environmental Category: B Simplified Processing Simple [ ] Repeater [ ] Is this a transferred project Yes [ ] No [ x] B. Project Objectives: The proposed development objectives of the Carbon Offset Project are: Reduce global emissions of carbon dioxide. Increase access to modern energy from renewable energy sources. The Carbon Offset project will provide additional support for the achievement of the following objectives, namely: (a) develop hydropower potential in an environmentally and socially sustainable manner so as to help meet local electricity demand, (b) improve access of rural areas to modern electricity services, and (c) improve standards of living for the poor through provision of community level infrastructure.

2 The project will reduce infrastructure bottlenecks and will allow for increased use of modern energy sources by generating electricity at different locations in rural areas of NAs & Chitral through mini and small capacity hydroelectric projects (ranging from 0.05 MW to 0.5 MW). The project will increase opportunity for income generating activities in Pakistan s remote and underprivileged Northern Areas and Chitral through better and improved access to reliable and renewable sources of energy. The increased use of hydroelectric power will also produce local environmental and health benefits such as reduced exposure to indoor air pollution and reduced pressure on forestry resources used to meet household heating and cooking needs, reduced local air pollution from diesel-fired gensets, and economic benefits from the reduced need to transport and store fossil fuels in remote areas for power, heating and cooking. The project will also produce global environmental benefits by annually reducing GHG emissions through the substitution of hydropower for diesel and kerosene usage at the village level. C. Project Description: The electricity supply in the Federally-administered Northern Areas of Pakistan currently does not meet even half of the local demand. As a result, use of diesel-run generators is common practice, a practice which is further encouraged by government subsidies on fuel prices. With both national and regional electricity demand increasing rapidly, the likelihood of significant additional diesel-generation being installed in the area is high. This will result in additional fossil fuel consumption and increased GHG emissions, besides imposing significant additional local costs from fuel import, transportation and storage expenses. This Carbon Offset project will produce greenhouse gas emission reductions and support the development of the international market mechanism for trading Emission Reductions (ERs) developed in the framework of the Kyoto Protocol. The project will reduce greenhouse gas emissions that would otherwise be produced from the use of diesel-based generators, as these are the most ready means of meeting the current power deficit, especially during winters, in the region which is not connected to the national electricity grid due to its remoteness and mountainous terrain. The project consists of purchase of ERs generated from at least 51 run-ofriver hydroelectric plants ranging in size from.05 MW to 0.5 MW, with combined capacity of ~10 MW in different locations in Pakistan s remote Northern Areas and Chitral by the World Bank-managed Community Development Carbon Fund (CDCF). The hydroelectric plants would be managed on a community basis, with program implementation support from the Aga Khan Rural Support Program, and would include active community involvement at the identification, design, implementation and operation stages. The operation of these renewable energy systems will provide increased access to modern energy services to an estimated 150,000 people (with associated social benefits) currently depending on traditional fuels, kerosene, and diesel-fired gen-sets to meet their energy needs. Operational costs will be recovered from users through tariffs whose level shall be determined by the operator of the plant, a Maintenance Committee formed by the beneficiary community, and other stakeholders at a level which shall be sufficient to cover all maintenance, repair and depreciation expenses.

3 The project has a number of financiers, including; Government of Norway, Pakistan Poverty Alleviation Fund (PPAF), the Government of Pakistan, and local banks. D. Project location and salient physical characteristics relevant to the safeguard analysis (if known): The remote mountain valleys of the Northern Areas and Chitral form Pakistan s northern borders with Afghanistan, the People s Republic of China, and Indian-controlled Kashmir. The area is rugged and mountainous, located at the confluence of four of the world s highest mountain ranges, including the Himalayas, the Karakoram, the Pamirs, and the Hindukush. The region s ecology is characterized by a fragile, high mountain environment and extreme climatic conditions. The region supports over a million people, mostly living in extreme poverty in approximately 850 villages. The use of renewable energy technology through proposed hydropower project will yield net positive environmental impacts and will relieve the burden on forest in the area threatened by cutting of wood for cooking and heating in winters. E. Borrower s Institutional Capacity for Safeguard Policies: AKRSP has supported the installation of about 240 microhydel schemes in six districts of northern areas of Pakistan since The organization has recently also installed a few larger mini hydel power plants, which are operating successfully. To date, AKRSP has implemented a total of about 10 MW of micro-hydel projects in the region. These projects have been executed and maintained by the local communities, while AKRSP has provided technical and financial support and trained plant operators from within the communities. AKRSP has developed a series of environmental assessment forms starting from screening of projects to scoping of issues and their management, and environmental review form evaluating projects environmental performance. Their overall institutional capacity for safeguards review is satisfactory. AKRSP will undertake an environmental assessment using the existing environmental assessment forms and will follow the procedures laid down in the Manuel for Environmental Assessment under the environmental management framework developed for PPAF supported projects. This EMF developed by PPAF has already received clearance by the World Bank. It is understood that AKRSP will enter into MoUs with the potential benefiting communities to acquire land on voluntary basis and there will therefore be no involuntary resettlement and/or land acquisition issues. AKRSP in the past has screened and assessed a number of their community projects on environmental aspects. Some of such projects were financed by PPAF which required a complete environmental assessment of community driven schemes before the actual implementation of such schemes. The World Bank review of PPAF s environmental procedures as well as those developed by AKRSP s themselves indicate that generally these are adequate and cover a majority of the environmental issues likely to arise out of such projects. AKRSP also has the experience in using environmental assessment procedures and in ensuring environmental safeguards. Examples of such projects include micro-hydel power generation units, small irrigation channels, and other community physical infrastructure projects.

4 The project is not expected to result in any significant, long term, irreversible adverse environmental or social impacts. Since some of the power generated through these micro-hydel stations may be used for commercial purposes including running saw mills, there is a possibility of consequent increased wood cutting from the forests in the area. This aspect, along with other potential site specific environmental and Indigenous Peoples (IP) issues, specifically if the IP policy is triggered, will be further examined during project preparation. Finally, AKRSP has also won the prestigious Ashden award (Green Oscars) in 2004 for its micro-hydel projects in the area. F. Environmental and Social Safeguards Specialists on the Team: Javaid Afzal, Environment Specialist TBD, Social Development Specialist II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered (please explain why) Yes No TBD 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) III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: N.A

5 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: March 2007 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: May IV. APPROVALS Signed and submitted by: Task Team Leader: Jeremy Levin January Approved by: Regional Safeguards Coordinator: Afshan H. Khawaja January Comments: The Task Team will look into Indigenous Peoples (IP) issues and provide a documented explanation if the IP policy is not triggered (i.e. there are no groups in the project area which fit OP 4.10 policy criteria). Sector Manager: Adriana Jordanova Damianova January 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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