INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized I. Basic Information Date PreparedlUpdated: July A. Basic Project Data INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Country: Tunisia I ProjectID: P I Additional Project ID (if any): Project Name: CBF Sidi Daoud Wind Farm Project Task Team Leader: Silvia Pariente-David Estimated Appraisal Date: Managing Unit: MNSSD I Estimated Board Date: NI A I Lending Instrument: NI A Sector: Energy Theme: Carbon Finance IBRD Amount (US$m.): 0 IDA Amount (US$m.): 0 GEF Amount (US$m.): 0 PCF Amount (US$m.): 2.6 Other financing amounts by source: 0 BorrowerlRecipient (US$m.): 0 Environmental Category: B Simplified Processing Simple [] Repeater [] Is this a transferred project Yes [] No [] B. Project Objectives: The development objective of this project (PDO) is to reduce greenhouse gas emissions by replacing electricity generated from fossil fuel-fired power plants by electricity from the Sidi Daoud wind farm. The objective of this stand alone carbon [mance operation is the purchase of about 50,000 tc02e annually of emission reductions (ERs) generated by the newly built wind farm through an Emissions Reduction Purchase Agreement (ERPA) under the Bank-managed Spanish Carbon Fund. The emissions reductions will arise from the displacement of fossil fuelbased power generation by grid-connected electricity production from wind power. The project activities will generate Certificates of Emission Reductions (CERs) and revenues through the sale of CERs under the Clean Development Mechanism (CDM) of the Kyoto Protocol. 2. It is the first project of this size in Tunisia and the first to be connected to the national grid, thus paving the way to the scaling-up of wind power in the country. The project will contribute to reduce energy dependency and improve energy security in Tunisia. The secured revenues obtained will contribute to improve the profitability of the project and alleviate one of the barriers to investment in wind power in Tunisia.

2 C. Project Description: 3. The project consists in the purchase of about 50,000 tc02e annually of ERs through an Emissions Reduction Purchase Agreement (ERPA) under the Bank-managed Spanish Carbon Fund. The exact amount of ERs eligible for purchase will be subject to further study and CDM validation and verification process. There is no IBRD lending involved in this project. The Spanish Carbon Fund (SCF), administered by the IBRD as Trustee, will purchase ERs from the proj ect and will make annual payments upon verification of the generated ERs by an independent entity (Designated Operational Entity, or DOE). 4. The emission reductions will result from substitution of electricity generated by a newly built wind farm with an installed capacity of MW for electricity generated by fossil fuel fired plants. The project sponsor is Societe Tunisienne de l'electricite et du Gaz (STEG), the state-owned vertically integrated power 'utility in Tunisia. STEG owns and operates the project and dispatches the electricity produced by the wind farm into the national grid. STEG has a so-undfinancial track record. STEG reported US$ 2.9 billion in assets and total revenues ofus$ 1.1 billion in The wind farm was financed with a concessional loan from the Spanish Government. STEG has in-house expertise in the field of wind power project development and operations due to the first two pilot projects developed in Tunisia and located at the same site, a MW pilot in operation since 2000, and 8.72 MW pilot in operation since Carbon Finance revenue streams generated by the sale of emission reductions will provide an additional source of fmancing, which was already taken into account by STEG at the time of the decision to invest in the wind farm. The wind farm operations started in February Testing of the wind farm will take place until November 2009, when commissioning is expected. 5. The wind farm is located in Sidi Daoud approximately 100 km North-East of Tunis, next to the first two pilot wind power projects in Tunisia, owned by STEG. It comprises 26 wind turbines of KW each and a transformation substation. A newly built 22.5 km high voltage transmission line allows the dispatching of the power generated by the wind farm to the Tunisian interconnected grid. The wind farm is expected operate with a capacity factor of 33% and produce approximately 95,000 MWh. D. Project location and salient physical characteristics relevant to the safeguard analysis (if known): 6. The wind farm site, including the previous two pilot projects, is located in the North East of the village of Sidi Daoud at 37 02' oflatitude and 10 56' oflongitude. The site is 6 Km long and 5 Km large and it lays on a slightly hilly landscape that extends in Est-West direction with heights between 40 and 100 meters. The highest elevation points correspond to the peaks of Dj. El Hammam and Dj. Ghormane. 7. The site is uninhabited. The landowners cultivate barley in the project area and use it for sheep grazing. Barley is the main crop in the surroundings of Sidi Daoud because it is specially adapted to the geology and climate of the region.

3 E. Borrower's Institutional Capacity for Safeguard Policies: 8. The Government of Tunisia has experience with the Bank's safeguard policies. However, the public company involved in this project, STEG, has no recent experience with the Bank's safeguard policies. F. Environmental and Social Safeguards Specialists on the Team: Gael A. Gregoire, MNSSD, Environ..rnental Safeguards Specialist Laila Al Hamad, MNSSD, Social Safeguards Specialist II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered (please explain why) Yes No TBD Environmental Assessment (OPIBP 4.01) STEG prepared an Environmental Impact Assessment (EIA) in May before the project was considered by the Bank- and submitted it to the Bank. When the project was prepared, wind farm projects in Tunisia had to prepare an EIA as per Decree At that time, the ANPE (National Environmental Protection Agency) cleared the EIA. The EIA has been reviewed by the team and has been considered insufficient to comply with Bank's safeguard policies. The EIA is currently being completed and updated by STEG as requested by the team. As prescribed by OP 4.01, the Bank will review the Environmental Assessment (EA) to ensure its consistency with this policy and, if necessary, might require additional EA work, including public consultation and disclosure. The EA will include the Environment Management Plan (EMP) for any adverse impact of the construction activities as well as of the operation of the project may have on the environment. The EMP will consist of mitigation measures, a monitoring program, and an institutional development/strengthening program for implementation of the EMP. A public consultation about the project was held on June 20, A stakeholder consultation for the CDM project was held on March 17,2009. Natural Habitats(OPIBP 4.04) Forests (OPIBP 4.36) Pest Management (OP 4.09) Physical Cultural Resources (OPIBP 4.11) Indigenous Peoples (OPIBP 4.10) Involuntary Resettlement (OPIBP 4.12) The project will not trigger OP Based on documentation received by STEG, land for the project has been leased by STEG for 30 years on a voluntary basis with the relevant landowners.

4 Safeguard Policies Triggered (please explai1l why) Yes I No TBD Those landowners who were not interested in leasing their land did not have to do so, and the project circumvented their specific plot. Through voluntary agreements, STEG acquired the rights of way from local landowners for the wind farm and transmission line. This process was a result of consultations held between STEG, the local government, and the community for all three stages of the project. For each stage, the STEG conveyed the background and benefits of the project, and the community was able to express its questions and concerns openly. Most of the landowners were supportive of the project. Their concerns were mainly related to leasing their land at market value, price differentiation of irrigated and nonirrigated land, the hiring of local people for some of the works, ensuring that the land is not affected by the construction works, and having the new project road linked to the school for the disabled. STEG took into consideration all of their concerns; the price orland was mutually agreed upon by STEG and the landowners (with the price differentiation requested for irrigated and non irrigated land), the new access road was linked to the road on which there is a school for the disabled, and approximately 500 community members were involved in works during the construction phase. The land sites in question continue to be used for agricultural and grazing purposes by the community. STEG has an office on the land site, which receives questions, complaints, etc. from anyone in the area. On the World Bank side, the safeguards specialist will continue to liaise with STEG to make sure they are fully aware of the Bank's O.P If it turns out that some remedial additional measures needs to be prepared and implemented in the context of land, this will be agreed between the Banlc and STEG prior to Negotiations of the Emission Reduction Purchase Agreement. Safety of Dams (OPIBP 4.37) I Projects on International Waterways (OPIBP 7.50) I Pro.lects in Disputed Areas (OPIBP 7.60) I Piloting the Use of Borrower Systems to Address Environmental and Social Safeguard Issues in Bank- Supported Projects (OPIBP 4.00) III. SAFEGUARD PREPARATION PLAN 9. STEG has prepared an Environmental Assessment Report in May The document has been reviewed by the World Bank and will need to be updated and disclosed at least 30 days prior to registration (formal acceptance by the CDM Executive Board) or signature of an Emission Reduction Purchase Agreement, before appraisal (i) at the Info Shop and (ii) incountry, at publicly accessible locations and in a form and language that are accessible to potentially affected persons.

5 10. Public consultations of the project were held in June 2006 with the landowners, local authorities and other interested persons. Through voluntary agreement, STEG acquired the rights of way from local landowners for the wind fann and transmission line. Those landowners who were not interested in selling their land did not have to do so, and the project circumvented their specific plot. The price of land was mutually agreed upon by STEG and the landowners. Landowners continue to cultivate their plots of land and to rear livestock on the land in question. In addition, the STEG responded to a request by the community to tie the access road to a school for the disabled. 11. If it turns out that some remedial additional measures needs to be prepared and implemented in the context of land, this will be agreed between the Bank and STEG prior to Negotiations of the Emission Reduction Purchase Agreement. IV. APPROVALS Sif[ned and submitted by: Task Team Leader: Name: ~~ C'\ J'J..J:k!:l Date Approved by: Regional Safeguards Coordinator: Comments: Sector.Manager: Comments: Silvia Pariente-David v "... ~ June 22, 2009 I " Name: Date ""'). H!ocine Chalal lo~6-fd\ o ~(D It {'""'.3 ~ Name: Jonathan Walters :\LY ::7 _., Date It,, OfiJ.! 0'1, J g

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