Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized INTEGRATED SAFEGUARDS DATA SHEET Date ISDS Prepared/Updated: 21 March 2005 I. BASIC INFORMATION A. Basic Project Data Country: Brazil Project ID: P081023 Project Name: PCF Sugar Bagasse Task Team Leader: Jari Vayrynen Cogeneration Project Estimated Appraisal Date: March 31, 2005 Estimated ERPA signature: March 31, 2005 Managing Unit: LCSFE Lending Instrument: Carbon Finance Sector: Energy Theme: Renewable Energy (33,3%), Climate Change (33,3%) and Sustainable Development (33,3%) Safeguard Policies Specialists in the task team: Ricardo Tarifa, Werner Kornexl Loan/Credit amount ($m.): Carbon Finance: up to 3.3Mio Other financing amounts by source: ($m) Country: Brazil Project ID: Project Name: Task Team Leader: Estimated Appraisal Date: Estimated Board Date: Managing Unit: Lending Instrument: Sector: Energy (100%) Theme: Safeguard Policies Specialists in the task team: Credit amount ($m.): $million (CF) Other financing amounts by source: ($m) B. Project Objectives The objective of the Project is to reduce emissions by generating energy from renewable sources. Furthermore, the project supports development of an international market mechanism for "Emission Reductions" (ER), under the framework of the Kyoto Protocol. In this particular case, the project is designed to facilitate the implementation of several subprojects in Brazil of which two sugar bagasse cogeneration projects are presented for approval at this time. These projects were prepared by an intermediary, Econergy International Corporation Brazil. The first two subprojects are Guarani Cruz Alta Bagasse Cogeneration Project (Guarani) and Alta Mogiana Bagasse Cogeneration Project (Alta Mogiana), both located in the State of Sao Paulo. Further biomass projects can be included under the condition that (i) all parties agree to the inclusion of additional projects, (ii) the additional projects qualify as CDM projects, (iii) the additional projects satisfy the World Bank's safeguard policies.
The subprojects produce reductions of C02 emissions through substituting electricity produced by thermal plants with electricity from renewable sources using sugar cane bagasse. The subprojects self supply energy as well as sell it on a commercial basis and will also receive revenue from sale of Certified Emission Reductions (CERs) - often referred as carbon credits. C. Project Description The proposed Project will allow the PCF to provide funding for renewable energy subprojects. The following paragraphs contain short descriptions of the initial subprojects that are included with the approval of the Project. Table 3. Initial Subprojects for Approval Principal Total ERs purchased Value of PCF Subproject financing by PCF purchased ERs Name Subproject (U$ 2002-2012 pucaeer Sponsor (US$ 2002 ( 202 (US$ million) million) (mtco2e) Alta Usina Alta 8.63 (+2.5 170,000 + an 680,000 (to Mogiana Mogiana in third option for 1,180,000 with Mo_iana S.A. phase) 100,000 option) A,cgar 7.56 (+ 7.6 225,000 + an 900,000 (to Guarani Guarani in second option for 2,150,000 with S.A phase) 250,000 option) 395,00 (74,000 1,580,000 (to Total 26.29 with options) 3,330,000 with with options)options) Alta Mogiana Bagasse Cogeneration Project is hosted by Usina Alta Mogiana S.A. and located in the Sapucai Mirim-Grande River Basin in Sao Joaquim da Barra Municipal District, Sao Paulo State. The project focuses on increasing efficiency in the cogeneration process to produce more steam and increase the electricity output to supply the national grid. The project is implemented in three phases. In the first phase, implemented in 2002, two 21 Bar pressure boilers were refurbished at 42 Bar and a new 25 MW turbo generator was installed. Installed capacity reached 37.5 MW. In Phase 2 (2003) a new 42 Bar boiler was installed, and the installation of another 42 Bar boiler is planned for 2005 as Phase 3 of the project. Guarani Cruz Alta Bagasse Cogeneration project is hosted by Acucar Guarni S.A. (Guarani) and focuses on installing new facilities to increase the electricity output from its cogeneration plant. The Cruz Alta Mill is located in the Turvo and Grande River Basin in Olimpia Municipal District, Sao Paulo State. In Phase 1 (2003), Guarani installed a 21.8 MW backpressure turbogenerator and a 63 Bar boiler, with total capacity reaching 29.8 MW. In Phase 2 (planned for 2005/2006), a 25 MW backpressure turbo-generator will be installed, along with another 63 Bar boiler. Therefore, the total installed capacity will reach 54.8 MW.
D. Project location (if known) The Cruz Alta Mill is located in the Olimpia Municipal District, Sao Paulo State, alongside the Rodovia Assis Chateaubriand highway at Km 155 (SP-425). This Mill is located in the Turvo and Grande River Basin, covering an area of 15,975 km 2 with a population of 1,054,267 inhabitants. The Alta Mogiana Mill is located in the Sao Joaquim da Barra Municipal District, Sao Paulo State, 96 kms from Ribeirao Preto and 400 km from the Sao Paulo State Capital. The Mill is located in the Sapucai Mirim-Grande River Basin, covering 9,170 hectares with a population (in 2000) of 609,635 inhabitants. E. Borrower's Institutional Capacity for Safeguard Policies The two cogeneration projects Alta Mogiana and Guarani have already implemented their first phase of the cogeneration plant. Both projects' CDM related project documentation (Project Design Documents, Monitoring Plan) is currently being validated. II. SAFEGUARD POLICIES THAT MIGHT APPLY Applicable? Safeguard Policy If Applicable, How Might It Apply? [X] Environmental Assessment (OP/BP 4.01) [ ] Natural Habitats (OP/BP 4.04) [ ] Pest Management (OP 4.09) [I ] Involuntary Resettlement (QP/BP 4.12) [J ] Indigenous Peoples (OD 4.20) [Xl Forests (OP/BP 4.36) [J ] Safety of Dams (QP/BP 4.37) Ii ] Cultural Property (draft OP 4.11 - OPN 11.03) l l Projects in Disputed Areas (OP/_P/GP 7.60) [ ] Projects on International Waterways (OP/BP/GP 7.50) By supporting the proposed project, the Bank does not intenid to prejudice the final determination of the parties' claims ot7 the disputed areas
Environmental Assessment Category: [] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared. 22 February, 2005 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing' should be specified in the PAD-stage ISDS. IV. APPROVALS Signed and submitted by: Task Team Leader: Jari Vayrynen Date Approved by: Regional Safeguards Coordinator: Name Date Comments fi Sector Manager: NameC,e Date X a V# I Comments 6 Akae ~.i V. Summary of Key Safeguard Issues. D. 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts. The project will most likely be placed in environmental screening category B under the provisions of the World Bank's Operational Policy 4.01, "Environmental Assessment". The project is expected to have a positive environmental impact through the generation of renewable energy, thus reducing global greenhouse gas emissions, and improvement of local infrastructure. Any adverse impacts which will inevitably occur during construction works will be limited and can be prevented by appropriate and known measures in the process of design and implementation of specific activities. As noted, the project supports measures for environmental improvements at the local level through the rehabilitation, replacement, repair or upgrading of existing infrastructure such as for waste water collection and treatment. I 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.
Minor impacts may occur from solid and liquid waste handling and depositing and gases from the cogeneration process D.2 Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area. GUARANI: Liquid Wastes This Mill generates three types of liquid wastes: (i) equipment cooling liquid wastes; (ii) wastewaters; and (iii) distillate. The liquid wastes from the cooling system were previously discharged into the dam on the Bagua9u stream. With the complete closure of the water cooling circuits (heat-exchanger cooling for the generator turbines and grinding mills), the Mill ceased to discharge liquid wastes into the dam. Domestic wastewaters are channeled to septic tanks, while wastewaters from washing floors, the sugar and alcohol plant equipment, the grinding mills and the boilers, the sugar-cane washing sand-box etc., are treated in stabilization ponds, with the liquid wastes subsequently channeled to the plantations for fertilization and irrigation purposes. The distillate left over from the alcohol production system currently reaches some 2,700 m 3 /day, initially channeled to storage tanks and then used for fertilization through the irrigation system, as well as trucks and spray-heads. The fertilization and irrigation process is integrated with the agri-business activities of the sugar and alcohol sector due to the soil fertilization properties of the distillate, fully or partially replacing mineral fertilization of the sugar-cane crops, lowering expenditures on fertilizers and boosting productivity. The use of distillate is limited to at least 200 meters away from any water-bodies, and protective safety slopes are built downstream from the fertilization and irrigation areas in order to retain any run-off, preventing their discharge into water-bodies. The distillate usage plan is submitted annually to the State Environmental Licensing Entity (CETESB) that undertakes regular inspections. The Mill monitors the water table through piezometric wells. Waste Gasses The main atmospheric emission points in the process are: Sulfur furnace gasses - Used when white sugar is produced. This is an important source that may emit SO, should the burning process be poorly regulated for absorption by the juice. Gasses from burning bagasse in the boilers - Incomplete burning of bagasse in the boilers generates particulate matter consisting basically of unburned bagasse and mineral impurities from the fields. This also generates carbon monoxide (CO). In order to control emissions of particulate matter from the boilers, the Mill replaced the multi-cyclones used (dry process) by wet-processed soot traps for the current and new boilers.
A dispersal study shows CO and PM levels well below the air quality standards stipulated by the Federal and State legislation. The last gas emissions monitoring campaign for the three cane bagasse-fired boilers was performed on November 7, 2004, in compliance with the CETESB standards, analyzing NOx, combustion (C02, 02 and CO) and particulate matter, while also assessing the colorimetric density of the smoke, demonstrating compliance with environmental legislation. Solid Wastes The solid wastes produced present the following characteristics and treatment/disposal routes: * Bagasse - This solid waste is reused for burning in the boilers to produce steam and consequently energy for the industry. Its use is continuous, with the bagasse left over after the harvest stored for use during the inter-harvest periods. * Fly-ash from the boiler and soot traps - The Mill works with a soot-pressing system that reduces the moisture content to around 60%-65%, with a reduction of around 30% compared to the current volume. The final disposal site is a landfill on property owned by the Mill. * Cane washing earth - This matter is transported by tipper-trucks to renewal areas of the cane plantations. It is used sporadically to reclaim eroded areas, as well as for landfills, earthleveling and slopes. * Rotating vacuum filter cake - The filter cake is collected through hoppers and removed from the Mill by tipper-trucks that take it to planting and renewal areas on the cane plantations. * C'ommon garbage - The Mill has implemented a hazardous waste separation plan (fluorescent light-bulbs and batteries), in addition to selective collection of recyclable materials. Household garbage goes to the sanitary landfill. * Out-patient clinic and laboratory wastes - These wastes are sent to the Hospital incinerator in the town of Olimpia. * Septic tank sludge - These solid wastes are channeled to the stabilization ponds when the septic tanks are cleaned. * Ferrous and non-ferrous scrap - Both types of scrap are properly stored and sold at the end of the harvest to third parties that accept responsibility for removal and transportation. * Spent lube oils - Classified as Class I (hazardous) solid wastes by the Brazilian Technical Standards Association (ABNT), these solid wastes are partly reused at the Mill to lubricate chains and protect metal work, with the remainder being sold. Transmission lines: Transmission lines were constructed over previously cleared plantation areas. In the case of Guarani, transmission lines are passing over a small forest (0,3 ha) without affecting it. Pest Management: Material used is not on the World Bank's black list.
ALTA M:OGIANA Liquid Wastes The Mill generates two types of liquid wastes: (i) wastewaters; and (ii) distillate. Domestic wastewaters are channeled to septic tanks, while wastewaters from washing floors, the sugar and alcohol plant equipment, the grinding mills and the boilers, the sugar-cane washing sand-box etc., are treated in the distillate tanks, with the liquid wastes subsequently channeled to the plantations for fertilization and irrigation purposes. The distillate is initially channeled to storage tanks and then used for fertilization through the irrigation system, as well as trucks and spray-heads. The use of distillate is limited to at least 200 meters away from any water-bodies, and protective safety slopes are built downstream from the fertilization and irrigation areas in order to retain any run-off, preventing their discharge into water-bodies. The Mill monitors the surface water courses and the water table through piezometric wells, forwarding regular reports twice a year to CETESB. Waste Gases The main atmospheric emissions points in the process are the same as those at the Cruz Alta Mill. During the inspection visit, it was noted that the boiler emissions were 'dark grey', demonstrating that particulate matter was being discharged, not in compliance with environmental legislation. The Mill claimed that it was still encountering problems in adapting its operations, but solutions were on the way. The Mill did not monitor its gas emissions. Solid Wastes The solid wastes produced present the following characteristics and treatment/disposal routes: * Bagasse - reused for burning in the boilers to produce steam and consequently energy for the industry. * Cane washing earth - This matter is transported by tipper-trucks to the cane plantations and renewal areas, as well as for the reclamation of eroded areas, landfills, etc. * Rotating vacuum filter cake - The filter cake is removed from the Mill by tipper-trucks that take it to planting and renewal areas on the cane plantations. * Septic tank sludge - These solid wastes are forwarded to the distillate storage tanks. D.3. Describe the treatment of alternatives (if relevant) Not relevant.
D.4. Describe measures taken by the borrower to address safeguard issues. Provide an assessment of borrower capacity to plan and implement the measures described. Guarani already prepared EA (RAP) required under Brazilian regulations. The RAP was appropriately disclosed. For the CDM project a separate EA summary was prepared that is now being disclosed locally. The second project, Alta Mogiana, has not prepared a separate environmental assessment (RAP). The existing environmental licensing includes all activities of the company, including the cogeneration plant. Therefore, Alta Mogiana prepared a separate Environmental Assessment which is being disclosed locally. The main outstanding environmental matters at ALTA MOGIANA are: * Water Usage Permit - The Mill presented no documentary proof of these permits. * Environmental Licensing - The Mill did not present the Operating License covering its sugar and alcohol production activities. * Monitoring of Gas Emissions - As mentioned above, the gas emissions were noncompliant, and the Mill did not present any monitoring reports. The main outstanding environmental matter of GUARANO is the Environmental Licensing for the power co-generation and alcohol distillation activities: * Temporary Operating License issued for 180 days, expiring on February 27, 2005, for the power co-generation Project with an average output of 21.8 MW. * Lack of Operating License (LO) - Operating License for the last alcohol distillation expansions. The Mill informs that it has implemented all the conditions stipulated in the Installation License, including the gasses emissions reports, and is awaiting an inspection by CETESB. The Bank informs that payments for Emission Reductions will only be made after complete licensing of both operations. Water Usage Permit, Environmental and Operating Licenses are disbursement conditions.