INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC6042. Date ISDS Prepared/Updated: 01/26/2011 I. BASIC INFORMATION. A. Basic Project Data

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1 Date ISDS Prepared/Updated: 01/26/2011 I. BASIC INFORMATION A. Basic Project Data INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC6042 Country: South Asia Project ID: P Project Name: India-Nepal and India-Bangladesh Cross Border Transmission and Trade Project Task Team Leader: Raghuveer Y. Sharma Estimated Appraisal Date: January 25, Estimated Board Date: March 29, Managing Unit: SASDE Lending Instrument: Adaptable Program 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 Financing Gap B. Project Objectives [from section 2 of PCN] The objective of the Proposed India-Nepal Cross-Border Transmission Project is to enable electricity trade to meet deficits in Nepal and export electricity to India along commercial principles. C. Project Description [from section 3 of PCN] The Proposed Project would comprise, design, construction and operation of: a) In India, a 100 km 400 kv double circuit transmission line between Muzaffarpur and the Nepal border to be owned by a joint venture comprising Power Grid Corporation of India (PGCIL), Sutlej Jal Vidyut Nigam, IL&FS (all from India) and Nepal Electricity Authority (NEA); b) In Nepal, a 40 kilometer 400 kv double circuit transmission line and concomitant substation at Dhalkebar to be owned a joint venture of NEA, IL&FS and PGCIL; and

2 c) In Nepal, a 325 km 400 kv double circuit Hetouda-Duhabi transmission line to be owned and operated by Nepal Electricity Authority (NEA). These transmission lines would be operated as part of the India-Nepal synchronous system, for which PGCIL and NEA will be responsible. The construction of sections of the Hetouda-Duhaby line is part of the Butwal-Dhalkebar- Duhabi 465 km transmission system and would enable the project to deliver the imported electricity to load centers; and bring the exportable electricity to Dhalkebar substation. Part of this additional line, Hetauda-Bharatpur (70 km) section is already under implementation with World Bank financing; and for Bharatpur-Bardghat (70 km) section, World Bank financing has been secured. D. Project location (if known) The most extensive portion of the project # the Hetauda-Dhalkebar-Duhabi 400 KV transmission line, would pass through southern Nepal, mostly Terai flat lands, but also substantial stretches would pass through the Siwalik Hills. The Koshi River, north of its entry into India, would be the most significant water body to be crossed. While the land-use along the line is most likely to be agriculture in the eastern portion, it would also traverse several stretches of forests in the western portion. The Dhalkebar-Bittamod-Muzaffarpur (in India) would pass through almost flat lands with few known sensitive environmental receptors. The proposal for the 400 KV substations would include a new site at Duhabi/Inurawa, a pre-identified site in Hetauda, as well as augmentation or new location of the Dhalkebar. On the India side, the existing substation at Muzaffarpur would be used to transfer power between Nepal and India. E. Borrower s Institutional Capacity for Safeguard Policies [from PCN] NEA has some recent experience of implementing environmental management for transmission projects conforming to the World Bank#s safeguards policies. It is currently implementing its largest project with Bank assistance # construction of 220 KV lines and substations in the Bharatpur-Bardaghat, Bharatpur-Hetauda, and Khimti-Dhalkebar lines, some of which are in the same area as the proposed project. The increased emphasis on the rejuvenation of the power sector in Nepal has meant that the capacity of the NEA#s environmental and social team is being stretched. This would be strengthened as part of this project preparation to include 400 KV transmission lines and substations, which is being attempted for the first time to boost power transfer and trade with India # importing about 150 MW for the short term and then connecting with the hydro projects being developed in Nepal for export after these come on-stream. F. Environmental and Social Safeguards Specialists Mr Chaohua Zhang (SASDS) Mr Gaurav D. Joshi (SASDI) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) The project will involve construction of new 400 KV transmission lines and substations. Though transmission has few direct adverse impacts in the operation stage, planning and

3 Safeguard Policies Triggered Yes No TBD construction of these facilities could require mitigation/enhancement measures to ensure that there is little adverse impact of these important facilities. Impacts pertaining to alignment/route selection across sensitive stretches like forests, siting of sub-stations and ensuring appropriate drainage in the vicinity of their locations, occupational health and safety of construction workers as well as staff, would be some of the key areas of attention. Natural Habitats (OP/BP 4.04) The current proposals for the lines do not pass through any recognized critical natural habitats. However, the during the project preparation phase the assessment will specifically verify, on the stretches through the forest areas in the western portion and across the Koshi river in the east, the extent to which any natural habitats, not recognized currently as critical, may get impacted. Forests (OP/BP 4.36) A substantial portion of the main East-West (Duhabi-Hetauda) line is likely to pass through the Forest Areas in the Siwaliks. The project will identify the extent of impacts, suggest adequate mitigation measures in line with GoN rules, and Bank policy, and put in place appropriate institutional arrangements to ensure their timely implementation. Pest Management (OP 4.09) Physical Cultural Resources (OP/BP 4.11) Since civil works are involved, impacts on #chance finds# at work sites are likely impacts that would have to be managed. Adverse impacts on locally important cultural properties would be examined, if any, for appropriate mitigation during planning and implementation stages. Indigenous Peoples (OP/BP 4.10) TBD Involuntary Resettlement (OP/BP 4.12) TBD 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: 02/01/2011 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: N/A

4 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. Detailed Environmental Impacts Assessment (EIA), called Initial Environmental Examination or IEE in Nepal, and concomitant Social Impact Assessment (SIA) which would include the mitigation and management plans would be prepared before appraisal of the proposed project. Under the on-going Power Development Project, a transmission master planning exercise will be undertaken, which will also have an environmental and social component. The results of this study would also help streamline the procedures for environmental management and social development within the NEA with a view to have its own ESPP as the project progresses. IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Raghuveer Y. Sharma 01/24/2011 Approved by: Regional Safeguards Coordinator: Mr Sanjay Srivastava 01/25/2011 Comments: The PCN stage ISDS is cleared with Category A. Please follow the disclosure requirements and submit the same through the operations portal. Sector Manager: Mr Malcolm Cosgrove-Davies 01/24/2011 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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