INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE. Power Project

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized I. Basic Information Date prepared/updated: 07/27/ Basic Project Data Original Project ID: P INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE Report No.: AC6472 Original Project Name: EG-Giza North Power Project Project ID: P Country: Egypt, Arab Republic of Project Name: EG-Giza North Additional Financing Task Team Leader: Jianping Zhao Estimated Appraisal Date: August 4, 2011 Estimated Board Date: October 25, 2011 Managing Unit: MNSSD Lending Instrument: Specific Investment Loan Sector: General energy sector (100%) Theme: Infrastructure services for private sector development (100%) 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 EC: European Investment Bank Environmental Category: A - Full Assessment Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) [ ] No [] 2. Project Objectives The project development objective is to contribute to improving the security and efficiency of electricity supply by adding a new generation capacity based on the most efficient thermal power generation technology. 3. Project Description The proposed project activities to be financed by the additional financing would consist of the following: (i) the construction of a third 750-MW unit at the existing Giza North Power Plant with two 750-MW power generation units; and (ii) the construction of a 105- km gas transmission pipeline to ensure sufficient supply of natural gas to the expanded power plant. In addition, the design of the Giza North power transmission substation and outgoing transmission lines is also upgraded to accommodate the larger plant. The power plant component is implemented by Egyptian Electricity Holding Company (EEHC) and the gas pipeline component is implemented by Egyptian Natural Gas Co. (GASCO).

2 4. Project Location and salient physical characteristics relevant to the safeguard analysis The power plant is located at Giza North, on the El-Beheiry canal in El-Kata village, the Sixth of October governorate. It is on El-Manashi / El-Khatatba road, with Riah El- Beheiry canal from the east and agriculture land from the north, south and west sides. The site is located approximately 30 kilometers northwest of Cairo City and along the Manshyyet El-Qanater / Etay El-Baroud Regional Road, which runs parallel to the El- Rayyah El- Beheiry canal. The site is a part of the flat agricultural land partly covered with fruit trees and palm trees. The site has historically been used for cultivation of wheat and vegetables and showed no evidence of any current or past encroachment or squatters. The site with approximately 295,000 square meters of flat land is flanked on three sides (west, north and east) by agriculture lands with similar land use. The main road runs parallel to the southern side of the site connecting to the city - Sixth of October, which is 15 km east with a reported population of over a million people. The site did not indicate presence of any industrial contamination or waste disposal or cultural properties. The site of the Giza North power plant was chosen due to its proximity to water canal, gas network and the national electricity transmission network. The 105 km Nubaria # Metnama pipeline will be buried below the ground level at a depth of 2-3 meters. It will run through agricultural lands and cross transportation routes and waterways. Farming will be temporarily disrupted but no physical resettlement is expected. After completion of works, the land will be fully restored to original condition, and farmers will be allowed to cultivate. There will be some restriction within the right of way with respect to future construction that may potentially damage the pipeline. All river and water body crossing for the pipeline will use Horizontal Directional Drilling (HDD) technique to pass under the river bed, which is an internationally accepted standard practice to minimize environmental obstruction to water course. Most of the land acquisition will be temporary and limited to the construction period. Only about 4 feddans are expected to be acquired permanently for the valve rooms. With regard to temporary land acquisition it should be noted that Egypt has a well-established and transparent crop compensation system that is generally in compliance with Bank safeguard policies. Farmers will be compensated for loss of agricultural income prior to the start of physical works. agricultural income. This approach has successfully been applied in several previous Bank-funded projects and the proposed gas pipeline construction should benefit from this experience. Compensation rates are well known and detailed records are kept. Farmers interviewed generally expressed satisfaction with the system. The exact alignment of the pipeline is not yet finalized but communities have been consulted, and are reportedly supportive of the project. 5. Environmental and Social Safeguards Specialists Mr Knut Opsal (EASER) Mr Sanjay Srivastava (SARDE)

3 6. Safeguard Policies Triggered No 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) II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: An ESIA was undertaken for original Bank funded project, which proposed to finance construction and operation of 2x750 MWe, dual fuel Combined Cycle power plant. The ESIA was reviewed, cleared and disclosed following a rigorous Bank safeguards review process. The proposed additional financing includes financing of an additional unit of 750 MWe, increasing the capacity of Giza North power project to 3x750 MWe. The earlier ESIA study from 2010 was updated by EEHC through independent consultants by assessing environment and social impacts of another unit of 750 MWe, which are summarized below. The 3x750 MWe gas power plant will continue to be based on Combined Cycle Gas Turbines (CCGT) including low NOx burners and once through cooling system designed to meet the World Bank emission and discharge requirements. The additional unit will be housed in the same original site, which is a flat land purchased directly from a private owner through a commercial transaction that has been completed and settled. The site has historically been used for cultivation of wheat and vegetables and showed no evidence of any current or past industrial or commercial activity or encroachment or squatters. Given the location of site, easy and adequate availability of water next to the site, choice of gas as primary fuel and choice of technology and easy access to highway, the ESIA indicates that environmental impacts associated with the site will be primarily construction related such as increased dust, noise, and vibration, which are expected to be non significant, reversible and non-cumulative. Any adverse environmental impacts that may result during construction will be mitigated by implementing an Environmental Management Plan, prepared as part of the ESIA. Regarding the operation of the power plant, the Gas Turbine Units will be dry NOx type, i.e. equipped with low-nox combustors, minimizing the emission of NOx which is the key pollutant associated with combustion of natural gas. Detailed design will also consider further NOx reduction techniques, such as over fire air ports and flue gas re-

4 circulation. Air pollution control systems will ensure compliance with both the WB and EEAA emission standards for power plant. Stack emissions to the air from the proposed plant are expected to be within the Egyptian, as well as the World Bank guidelines, with full compliance with SO2 standards when firing the emergency light fuel oil. The anticipated ambient air quality (PM10, NOx and SOx) due to emissions from 3x750 MWe plant will be well within the Egyptian 24-hour limit of 150 ug/m3. The maximum 24-hour ambient impact level of NOx at Giza North power project is #g/m3 (excluding the background level). The maximum combined 1-hour impact level, including the highest value during 2006, is #g/m3. The Giza North plant contributed #g/m3 at this location. To ensure continuous compliance with the emission levels, monitoring stations equipped with meteorological monitoring system within the power plant site will be installed to regularly monitor air quality in the area. Cooling water and process water for power plant operation will be drawn from the El- Rayyah El-Beheiry (a small branch out of the mainstream of the Nile river) via an intake structure. The quantity of the cooling water that will be returned back to the El-Rayyah El-Beheiry is about 40.8 m3/sec, which represents a loss of only about 0.07%. Potable water will be supplied to the power plant via the El-Kata local potable water system. Cooling water will be returned to the El-Rayyah El-Beheiry via a discharge structure whilst waste process water will be disposed through El-Kata local sewer system or after treatment via discharge system. No ground water or other surface water will be used during power plant construction and operation. The Contractors will be responsible for relevant water/toilet facilities during construction and the need to provide appropriate services will be specified in their contracts. The aquatic environment surrounding the project site is characterized by poor biodiversity and no sensitive ecosystems. The project is expected to have limited and insignificant impacts due to construction of the power plant, dredging and or due to construction of the intake and discharge structures. In addition, good site management and engineering practices during construction will ensure that any residual impacts are reduced to a minimum. A wastewater treatment facility on the site will treat liquid wastes and produce an effluent suitable for discharge into the canal. All oil waste effluents will be collected into a separate network and sent to an oil separator, then disposed of by a specialized company. The use of water treatment chemicals will be reduced to the minimum required to achieve safe and efficient operation of the power plant. Power plant operation will result in a heated plume of returned cooling water being discharged into the El-Rayyah El-Beheiry. Thermal modeling of the discharge plume shows that, at max. operational conditions, the point at which the plume has decreased in temperature to 3 C above ambient, lies at approximately within 100 m from the point of discharge. The temperature of the returned cooling water at the point of discharge conforms to the Egyptian Standard, and the discharge as modeled satisfies the World Bank standard of a maximum increase of 3 C above ambient at the edge of the mixing zone (100 m from the point of discharge).

5 The construction of the Giza North power plant is expected to generate an ambient maximum noise level of 59 db(a) during the day at the fence of the power plant and 57 db(a) at night. These worst-case construction noise levels are both within Egyptian and World Bank guidelines, and for most of the construction periods, the noise levels will be lower than these values. As assessed during the original project, the land requirements for associated infrastructure will be minimal, and a Resettlement Policy Framework has been developed that provides details of policies, procedures and implementation arrangements to address any cases of involuntary resettlement that may arise. In case of land acquisition, resettlement and rehabilitation will be addressed through preparation of a specific Resettlement Action Plan. The associated infrastructure requirements due to new additional unit of 750 MWe continue to remain same. The environmental impacts of associated infrastructure such as gas pipeline, transmission lines, potable water connections and access road are expected to be localized, short lived, and reversible. Mitigation measures have been provided by adequate institutional arrangements and budget for effective implementation, supervision and monitoring. These requirements will be included as conditions of contract on the contractor and any subcontractors employed to build or operate any part of the power plant. The new gas pipeline connection will be provided to the site from the nearest point from an existing gas supply junction. This work will be done in consultation with EGAS. The exact route for this gas supply line is still being determined. The gas pipelines will be buried underground along the identified route and no land acquisition is expected. Most of the impacts will be construction related and are expected to be temporary and insignificant. The anticipated environmental impacts include generation of dust, noise and workers health and safety issue, which will be mitigated by implementing the Environmental and Social Management and Monitoring Plan prepared for the revised power plant project. A separate Environmental and Social Impact Assessment has been prepared for the Nubaria # Metnama pipeline. Finally Resettlement Policy Frameworks (RPFs) have been prepared for the power plant and the Nubaria # Metnama pipeline respectively to ensure that any land acquisition will be in compliance with both Egyptian legislation and Bank relevant rules and regulations. The RPFs will as relevantly be used as a basis to identify, prepare, implement and monitor Resettlement Action Plans. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The updated ESIA indicates that the environmental and social impacts associated with the power plant including the associated infrastructure, if mitigation measures are implemented, will not be of major significance, unprecedented or irreversible. The indirect impacts of associated infrastructures are summarized as follows:

6 Impact due to Transmission Lines. The power plant will be connected through eight lines, connecting to two separate 2x220 kv network interconnected to the National Unified Power System (NUPS). The length of the proposed transmission line route is estimated to be km long. The project will use manual methods for removal of shrubs along the right of way for the transmission lines, and does not envisage use of herbicides or chemicals for maintenance of right of way, therefore, the policy on Pest Management has not been triggered (OP 4.09). ESIA includes procedures consistent with the Bank policy on Cultural Properties OPN4.11, for any chance find of any cultural properties. The majority of affected land owners seem to have fairly large farms, with average land holdings estimated at 8-10 Feddans. The land required for each tower footing is expected to be maximum 20x20 meters. This requirement will be almost half for angle towers compared to suspension towers. Very small pieces of land will be taken against compensation, but no resettlement will be associated to the power interconnecting lines. Access Road. As part of the development of the power plant, an existing access road will be paved from the main regional road on the verge of the site west southern boundary to the inside of the proposed site, over a very short distance of about 1.7 km. The environment impacts of construction will be mitigated and monitored using the Environment Management Plan. It is likely that the right of way of the existing road will be sufficient and additional land acquisition is not expected. Potable water connections: Even though potable water network may exist to the power plant site, the power plant produces its demand of potable water via its own water treatment system. No potable water pipelines are envisaged to be extended particularly for the power plant Local livelihoods: A few part time fishermen utilize the waters near the planned power plant. Based upon experience from a number of similar plants elsewhere along the Nile River and its branches, as well as the opinions of the fishermen, the impacts of slightly warmer water on fisheries are likely to be positive. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. A "no action alternative" was considered but was found to be unviable as it will result in the demand for electricity exceeding supply, with an increasing deficit as demand increases in future years, which is likely to have much higher social and economic implications. The project also considered various choice of technology for meeting the power needs. This included: gas/oil-fired steam units; gas/oil-fired combined cycle units; gas/oil-fired simple cycle combustion turbine units; pumped storage; wind farms; and integrated solarcombined cycle generating units. Other possible options included #importing electricity#, #rehabilitation of existing power plants#, #transmission and distribution investment# and #IPPs#. However, an assessment of various economic, social and environmental parameters favor a gas/oil-fired combined cycle units of a net 3x750 MWe generating

7 capacity at Giza North. An analyses of alternatives indicated that compared to other fossil fuel generating technologies, gas-fired combustion turbine generators have a relatively low emissions of carbon dioxide (CO2), moderate emission levels of nitrogen oxides (NOx) and the lowest emission levels (almost traces) of sulfur dioxide (SO2) and particulates. Analyses of various choice of fuel indicated that Natural gas has the least and social environmental impacts. A comparative analyses of various designs options for power plants was undertaken to decide the current design, which includes a stack designed to maximize buoyancy and dispersion of emissions and its height (82 m) exceeding good engineering practice; Gas Turbines equipped with low NOx combustors minimizing emissions of NOx; direct cooling water to maximize generating efficiency, minimizing visual impact, noise emissions and the potential for visible vapor plumes or ground fogging. The ESIA considered 3 sites for power generation plant. The selected site was chosen due its proximity to road, water canal, transmission links and with low environmental and social impacts. Two alignment options were considered for transmission lines. A shorter connection had also been discussed, but has not been found acceptable as it will likely go through a number of orchards as well as cultivated lands. The proposed option seems to be less intrusive, both in terms of adverse socio-economic impacts and land acquisition challenges. The proposed transmission route of km with an estimated 69 transmission towers would be footed mostly (at least 80%) on dry, unproductive land. The final location of towers and sub stations is yet to be determined following a detailed land survey. A preliminary walk through of these sites does not indicate the presence of any sensitive habitats or receptors indicating that the identified route will cause no significant, cumulative or irreversible environmental impacts. There are several conceivable alternative routes for the Nubaria # Metnama pipeline, but in selecting the proposed alignment GASCO has made a systematic effort to avoid any buildings and structures, including graveyards, religious sites and any possible historical areas. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The Project Management Units will have the overall responsibility for implementation of Environment and Social Management Plans and the RPFs. The PMU will hire environmental and social specialists who will work closely with contractors and subcontractors to ensure that all environment and social impact mitigation measures including occupation, health and safety guidelines are mainstreamed into the project design; monitored and supervised. Assistant Plant Manager reporting directly to Chairman/ General Manager of CEPC/GNPP and supported by CEPC Project Manager in collaboration with PGESCo Site Manager will have direct responsibility for the Environment, Safety and Quality Assurance program on site during construction and operation. All staff employed at the plant will be trained in general operation of the

8 power plant; occupational health and safety; and contingency plans and emergency procedures. Egypt has a well established and transparent crop compensation system that is generally in compliance with Bank safeguard policies. Farmers will be compensated prior to initiating any construction works for any temporary loss of agricultural income. This has been applied successfully in several previous Bank-funded projects and compensation rates are well known and detailed records are kept. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. During the preparation of ESIA and RPF for the original project, the client undertook consultations with a variety of organizations to assist them in the identification of environmental and social concerns and the overall development of the project. These stakeholders included the Egyptian Electricity Holding Company (EEHC), Cairo Electricity Production Company (CEPC), Egyptian Environmental Affairs Agency (EEAA), the 6th of October Governorate and the District Council of the 6th of October, including Imbaba & Menshat El-Qanater zone, Egyptian General Authority for Shore Protection, Hydraulics Research Institute and local population leaders. The purpose of these consultations was primarily to provide information regarding the project, identify published and non-published sources of relevant data and information relating to the site and surrounding area, obtain views on the scope of the project, and open channels for ongoing discussions. The key environmental and social issues raised during these consultations are summarized in the ESIA report and these issues were subsequently taken into account in the preparation of ESIA documentation both for local permitting requirements and this ESIA report. Mini meetings were held with fishermen along the El-Rayyah El-Beheiry at about 5 km to the north west of the proposed site, the El-Kata area representatives, Imbaba and Menshat El-Qanater District Administration, General Authority for Fishery Development and two active NGOs in the 6th of October zone, "October for Environment & Development", 6 of October City, and "Youth and Environment Friends", Siqil, Ossim. In addition to continued consultation during the ESIA process for the original project, formal consultations were undertaken by EEHC and CEPC to discuss the ESIA/ESMP and RPF. A scoping session was convened on October 21, 2009 where a wide selection of stakeholders participated. A second public consultation meeting was held on January 11, No scoping session was held for the additional financing, but a public consultation session was convened at the draft ESIA stage. On February 17, persons participated in the Nubaria # Metnama pipeline consultations, and April 19, 2011 over 150 persons participated in consultations on the power plant. The details of the above meetings have been outlined in the ESIAs for the original project and AF respectively, and the documentation includes Q & A, newspaper advertisements, invitations, consultation agendas, list of participants, nontechnical summary, as well as presentation slides and photos.

9 B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Was the document disclosed prior to appraisal? Date of receipt by the Bank 05/31/2011 Date of "in-country" disclosure 05/31/2011 Date of submission to InfoShop 06/23/2011 For category A projects, date of distributing the Executive 07/07/2011 Summary of the EA to the Executive Directors Resettlement Action Plan/Framework/Policy Process: Was the document disclosed prior to appraisal? Date of receipt by the Bank 05/31/2011 Date of "in-country" disclosure 05/31/2011 Date of submission to InfoShop 06/23/2011 Indigenous Peoples Plan/Planning Framework: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Was the document disclosed prior to appraisal? Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop * If the project triggers the Pest Management and/or Physical Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. If in-country disclosure of any of the above documents is not expected, please explain why: C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) OP/BP/GP Environment Assessment Does the project require a stand-alone EA (including EMP) report? If yes, then did the Regional Environment Unit or Sector Manager (SM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the credit/loan? OP/BP Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy framework/process framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan?

10 OP Projects on International Waterways Have the other riparians been notified of the project? If the project falls under one of the exceptions to the notification requirement, has this been cleared with the Legal Department, and the memo to the RVP prepared and sent? Has the RVP approved such an exception? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Bank s Infoshop? Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? All Safeguard Policies Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? No N/A N/A No D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Jianping Zhao 07/26/2011 Environmental Specialist: Mr Sanjay Srivastava 07/26/2011 Social Development Specialist Mr Knut Opsal 07/26/2011 Additional Environmental and/or Social Development Specialist(s): Ms Hana Salah 07/26/2011 Approved by: Regional Safeguards Coordinator: Mr Hocine Chalal 07/26/2011 Comments: Sector Manager: Mr Jonathan D. Walters 07/26/2011 Comments: