INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC3946. Date ISDS Prepared/Updated: 01/26/2009 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: 01/26/2009 I. BASIC INFORMATION A. Basic Project Data INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC3946 Country: Botswana Project ID: P Project Name: Botswana - Morupule B Generation and Transmission Project Task Team Leader: Varadarajan Atur Estimated Appraisal Date: February 23, Estimated Board Date: April 7, Managing Unit: AFTEG Lending Instrument: Specific Investment Loan Sector: Power (80%);Mining and other extractive (20%) 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 African Development Bank Financing Gap , B. Project Objectives [from section 2 of PCN] The project objectives are to (a) expand domestic power generation capacity that will support sustained economic growth in Botswana, and (b) build institutional capacity for sustainable development of the energy sector. C. Project Description [from section 3 of PCN] The proposed scope includes the Morupule B power station, transmission lines and substations, water supply connections, and technical assistance (TA). The Morupule B power station consists of a 600 MW (4 x 150 MW) coal fired CFB power plant, right next to the existing Morupule A power station in the township of Palapye, northeast of Botswana. The plant will include: coal yard and coal preparation equipment, coal crushers, limestone preparation and feed systems, CFB boilers with associated particulate removal equipment, fans, steam turbine and balance of plant. Also, the plant will be equipped with air cooled condenser to minimize use of water. Morupule B will be a new plant, but it would utilize existing infrastructure including roads, coal transport system, water supply and solid waste disposal facilities. BPC will build and operate the

2 power plant. During project preparation, further consideration will be given to the need to support investments in emissions control at Morupule A, which currently exceed national and international standards for sulfur dioxide, and which under World Bank guidelines will require mitigation measures at Moropule A to offset the additional emissions from Moropule B. The transmission line part includes the following: Isang 400/220 kv substation, Morupule Phukoje 400 kv line (102km), Isang Morupule 400 kv line (215km),Morupule Isang 220 kv tee in 2 lines, Morupule Phukoje and Morupule Isaang fiber optic lines and control equipment. The water supply component includes an interconnection to the North-South Carrier and, as a backup water supply, water wells and pipelines. The TA component covers five main areas: (a) Morupule B power station: supervision of construction and implementation; (b) Power system: AGC system software, system harmonic studies, control area establishment and training; (c) Morupule A power station: operational improvement study and feasibility studies for CSP and CCS; (d) Sector development: regulatory agency set up and capacity building; and (e) a Strategic Environmental Assessment (SEA) to examine the cumulative impacts, particularly on air quality and water resources, of all the planned and existing energy sector investments on both sides of the border with RSA. D. Project location (if known) Morupule, near the township of Palapye, in the eastern part of Botswana. E. Borrower s Institutional Capacity for Safeguard Policies [from PCN] Institutional capacity for environmental management in Botswana has been significantly strengthened in recent years, culminating in the promulgation of the Environmental Impact Assessment Act 6 of 2005, and the creation of the Ministry of Environment, Wildlife and Tourism (MEWT) with a mandate to coordinate environmental conservation and protection. The Department of Environmental Affairs (DEA) is mandated to implement the Environmental Impact Assessment Act which requires that an Environmental Impact Assessment (EIA, which includes a Social Impact Analysis, SIA) be undertaken for the project. The DEA has sufficient capacity to review the ToR and results of the assessment. The Department of Mines (DM) is separately mandated to implement the Mines and Minerals Act 17 of 1999, which includes requirements for the environmental assessment of coal mining operations. In practice the environmental impact assessment process is driven by the DEA and the Department of Mines is consulted on its requirements during the process. In addition to the EIS authorizations, several additional permits and licenses will be required from several Botswana Government Departments for the successful implementation of the Project. Though there is sufficient government capacity for the review and approval of environmental assessments, there is little experience with implementation and monitoring. Further capacity strengthening is needed in the relevant institutions to handle these new challenges.

3 F. Environmental and Social Safeguards Specialists Mr Paul Jonathan Martin (AFTEN) Ms Paula F. Lytle (ECSSD) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) An EIA has been completed for the Morupule power plant, which indicates that current levels of emissions from Morupule A cause occasional local exceedances of national and international standards for sulfur dioxide, which under World Bank guidelines will require mitigation measures at Morupule A to offset the additional emissions from Morupule B. The DEA has requested that an environmental audit of the existing Morupule A operations be conducted, which should focus in particular on the collection of reliable data on current emissions and air quality. In addition to planned emission control measures, dust control, in particular road surfacing, will be important to control particulate matter concentrations as a result of combined Morupule A and B operations. The EIA also identified existing elevated levels of sulfate in groundwater adjacent to the Morupule A ash disposal lagoon. To avoid further groundwater contamination it is proposed that a new ash lagoon with sealed base be constructed for Morupule B, that run-off be captured for recycling, and that Morupule A ash be rerouted to the new lagoon. In order to mitigate the risk that groundwater depletion occurs as a result of abstraction from the BPC Paje Wellfield for combined Morupule A and B operations, it is proposed that water consumption at Morupule B be minimized by recycling drainage water and runoff, and disposing of ash with minimal wetting. With the operation of Morupule B, the EIA estimates that abstraction of water from the Paje Wellfield (80km northwest of Morupule) will increase from the current 650,000 m3/yr to around 2 million m3/yr. The EIA states, however, that a detailed analysis of the impacts of groundwater usage fall outside the scope of the study. Consequently it is not clear whether this rate of abstraction is sustainable. Clarification will be sought on this point during project preparation. It is planned that some 2.6 million tons per annum (mtpa) of coal for Morupule B operations will be provided by the adjacent coal mine operated by Morupule Colliery Limited (MCL). This additional coal production will comprise an element of the planned expansion of MCL operations from current levels of about 1 mtpa to about 10 mtpa, largely to meet export demand. An EIA of this planned expansion is underway. The EIA of the transmission component has been completed, but has not yet been received in full by the Bank. This will be reviewed during project preparation. Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) During project preparation it will be clarified whether operations to clear vegetation from transmission line alignments will trigger OP 4.09 on Pest Management. Physical Cultural Resources (OP/BP 4.11) The EIA of the Morupule B power plant included an archeological survey, which concluded

4 Safeguard Policies Triggered Yes No TBD that nothing of archeological significance was found within the development area. However, chance finds procedures will be incorporated into construction contracts, including a requirement to inform Botswana National Museum if anything of archeological significance is encountered. Similar procedures will be incorporated into construction contracts for the transmission lines, which although not directly affecting any known sites, pass through areas considered to be of archeological interest. Indigenous Peoples (OP/BP 4.10) In September 2008, social screening was carried out to identify whether indigenous peoples are present in, or have attachment to, the project area. Based on the results of the screening, the decision was taken that OP4.10 is not triggered. Involuntary Resettlement (OP/BP 4.12) Social impact assessments have been carried out for Morupule B and for the transmission lines. Within the immediate area of the proposed Morupule B power station, there is reportedly one family of squatters; the process of re-locating that family is underway. During preparation, it will be confirmed whether that relocation has occurred and whether it met OP 4.12 standards. At the time of the September 2008 mission, the area to be developed under Morupule B had not been fenced to prevent further encroachment, and the mission s aide memoire strongly recommended that this work be carried out as soon as possible. It is also expected that the influx during the construction period would have significant social impact, separate from any safeguard issues. Although HIV/AIDS prevention programs are in place, these will need to be scaled up and carefully targeted. With respect to the transmission lines, the SIA indicates that there is potential negative impact on land use and possible resettlement of individual households. The transmission line SIA includes a Resettlement Framework, citing the IFC s performance standards. During project preparation, this framework will need to be reviewed to ensure that it is consistent with OP/BP 4.12 and that a comprehensive Resettlement Policy Framework (RPF) has been prepared. Safety of Dams (OP/BP 4.37) OP 4.37 on the Safety of Dams applies inter alia to ash impoundment dams for thermal power plants. While both the existing and proposed new ash impoundment dams exceed 15 meters in height, thereby qualifying as large dams under OP 4.37, they do not impound significant amounts of water. During project preparation the team will seek expert guidance on the applicability of OP 4.37 and the safety measures to be implemented. 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: 03/01/2009

5 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. An EIA including a Social Impact Assessment was prepared for Morupule B Power Station in October 2007, and approved by the Department of Environmental Affairs (DEA) in February An EIA of the expansion of MCL operations was submitted to the DEA in November, 2008, and is currently under review. When this report becomes available for public disclosure in Botswana, the Bank will also disclose it in the InfoShop. The Department of Environmental Affairs has requested that BPC contract an environmental audit of Morupule A operations. During project preparation the team will clarify with BPC when this will be completed. An EIS for the Transmission Lines, including a Social Impact Assessment was completed in November 2007, but has not yet been received in full by the World Bank. This will be reviewed during project preparation. For the transmission lines a Resettlement Policy Framework following IFC guidelines has been prepared as of November This needs to be revised to reflect OP 4.12 and endorsed by the government prior to appraisal. If the screening determines the presence of indigenous peoples, the Government and the BPC will prepare an Indigenous Peoples Plan following OP/BP 4.10, prior to appraisal. The existing document refers to the definition of indigenous with respect to Botswana law, not World Bank policy. All safeguard instruments will be disclosed in-country as well as in the Bank Infoshop prior to appraisal. IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Varadarajan Atur 01/16/2009 Approved by: Regional Safeguards Coordinator: Mr Warren Waters 01/22/2009 Comments: Sector Manager: Mr Subramaniam V. Iyer 01/21/2009 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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