China - Shandong Flue Gas Desulfurization Project

Page 1 INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC1796 Date ISDS Prepared/Updated: 12/01/2005 I. BASIC INFORMATION A. Basic Project Data Country: China Project ID: P093882 Project Name: Shandong Flue Gas Desulfurization Task Team Leader: Jianping Zhao Estimated Appraisal Date: May 8, 2006 Estimated Board Date: October 31, 2006 Managing Unit: EASEG Lending Instrument: Specific Investment Loan Sector: Power (100%) Theme: Pollution management and environmental health (P) IBRD Amount (US$m.): 104.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER 0.00 LOCAL SOURCES OF BORROWING COUNTRY 7.61 SUB-BORROWER(S) 100.00 107.61 B. Project Objectives [from section 2 of PCN] The project development objective is to reduce sulfur dioxide (SO2) emissions in Shandong Province. The objective will be achieved through development and implementation of a province-wide SO2 emissions reduction program in the heat and thermal power sector, and supported by the following project components: (a) A Technical Assistance component to strengthen the institutional capacity for environment planning and implementation, particularly the environmental standard monitoring and enforcement capacity of the local environmental protection agencies; (b) An Investment Component to finance the installation of FGD facilities in a number of coal fired power and heat plants that are currently operating or are under/planned for construction. C. Project Description [from section 3 of PCN] Technical Assistance Component: The technical assistance component of the project would include: (i) transfer of knowledge for least-cost environmental planning and strategy Page 2 development; (ii) institutional capacity building for monitoring and enforcement; and (iii) purchase and installation of monitoring equipment and instrument. The Investment Component: The physical component of the project will support the installation of FGD equipment at a number of existing or new-built coal fired power and heat plants in Shandong Province. Shandong has provided a list of eight subprojects it wishes to be financed, however the list is still open to discussion to ensure that (i) subprojects have met, or can reasonably be expected to meet, all the internal GoC approvals; (ii) subprojects meet the Bank's safeguard requirements; and (iii) subprojects meet the technical, economic and financial criteria. The subprojects which have not met or could not meet the above three requirements will not be financed under the project. The current list includes: Donghai Heat & Power Group. The proposed subproject consists of retrofitting two existing 150 MW coal-fired boilers (300 MW total) with SO2 control facilities. Haihua Group Heat & Power Plant. The proposed subproject includes installation of SO2 control facilities on three new 650 TPH coal-fired boilers. Zhenghe Chemical Group. The proposed subproject includes installation of SO2 control facilities on five existing coal-fired boilers (3x35 TPH and 2x75 TPH) and two new 130 TPH coal-fired boilers. Lubei Power Company. The proposed subproject consists of installing SO2 control facilities on two 300 MW coal-fired boilers (600 MW total) to be built at a greenfield location. Zibo Thermoelectricity Company. The company operates six steam boilers (total capacity 1140 TPH) and plans to construct two cogeneration facilities (480 TPH/150 MW each). The proposed subproject consists of installation of SO2 control facilities on three of the six existing boilers (550 TPH) and also on two new 480TPH/150MW units. Zibo Boneng Thermal Power Plant. There are thirteen cogeneration plants in operation at the site, which is a pulp and paper mill complex. The company proposes to adopt the appropriate SO2 control means and technics on all boilers to meet the new government SO2 emission standards. Huangtai Thermal Power Plant. The proposed subproject will finance wet lime/limestone scrubbers to two new 300MW units. The new boilers will also allow shutdown of about 140 small boilers used in the area for residential heating, since the new boilers will feed into the local district heating grid. Xintai Thermal Power Plant. The proposed subproject would install FGD systems at three separate sites: a new site for two 480TPH/150MW power units; two existing 75TPH/12MW units at the Liangzhuang site; and two existing 130TPH/25MW units at the Taishan site. On-line monitoring equipment will be installed together with the installation of the SO2 control facilities. The need and scope of technical assistance component for each subproject will depend Page 3 on the nature of the subproject and the capacity of the subproject sponsor. These will be discussed and determined during project preparation. D. Project location (if known) The proposed eight sub-projects are located in different parts of Shandong province. Two of the sub-projects involve only FGD retrofitting in existing generation units. Six of the sub-projects involve the installation of FGD in both existing and new generation units. Of these six sub- projects, four do not involve land acquisition and people relocation as the new units are located within the areas owned by the existing power plants. Two will involve the construction of new units in new location and will required land acquisition. But no house demolishment and people relocation are expected. The total land acquisition is estimated at 35 ha, mainly farm-land owned by two villages. The project is expected to bring both positive and negative environmental impacts. The installation of FGD in existing and new units would reduce the total amount of SO2, NOx and particles in the project areas and the province as a whole. But the operation of FGD would increase the plant noise and produce a by-product of which must be managed properly. E. Borrower