Nepal - Power Development Project

ISDS THE WORLD BANK GROUP AWorld Frce of Povorty *T4foShop Thi Wortil HMknk Report No AC76 Integrated Safeguards Data Sheet (Initial) Date ISDS Prepared/Updated: 05/16/2003 Section I - Basic Information A. Basic Project Data Country: NEPAL Project ID: P0433 1 1 Project: Nepal Power Development Project Task Team Leader: Mudassar Imran Authorized to Appraise Date: February 14, 1997 IBRD Amount ($m): Bank Approval: May 22, 2003 IDA Amount ($m): 50.40 IDA GRANT FOR POOREST COUNTRY 25 2 Managing Unit: SASEI Sector: Power (80%); Other industry (10%); Lending Instrument: Specific Investment Loan (SIL) Sub-national government administration (10%) Status: Lending Theme: Other environment and natural resources management (P); Other public sector governance (P); Other financial and private sector development (P) I.A.2. Project Objectives: The project objectives are to: (a) develop Nepal's hydropower potential in an environimlentally and socially sustainable manner so as to help meet domestic electricity demand; (b) improve access of rural areas to electricity services; and (c) promote private participation in the power sector as a way to improve sector efficiency and to mobilize financing for the sector's investment requirements. The KoN has identified the development of its hydro-recourse potential as a key priority to serve the energy needs of a vast majority of its population who have little or no access to electricity, and to reduce poverty. The objectives of this project are therefore consistent with the developmental and poverty reduction objectives of the KoN. I.A.3. Project Description: The Project consists of three components, namely: (a) establishment of a Power Development Fund (PDF) to finance private development of small and medium-sized hydro schemes; (b) community-based village electrification through construction of micro-hydro systems (sizes of up to 100 kW); and (c) transmission and distribution improvements. Total project cost including interest during construction (IDC) is estimated at US$ 133.4 million, equivalent, of which IDA financing is US$ 75.6 million comprising an IDA credit of US$50.4 million and an IDA Grant of US$25.2 million. Part A. The PDF Component  2 ISDS The Power Development Fund will be a financing facility to be established by the Government under this project, within the Department for Electricity Development (DOED). The Fund will provide long-term financing for private-sector small and medium-sized hydropower developments in Nepal to overcome: (a) the lack of sufficient debt financing for private-sector hydropower projects; (b) inadequate maturity of available debt financing; and (c) the need to provide comfort to private investors wishing to become involved in "first time" projects. The fund will be wholly owned and operated by the Government, but with administrative management contracted out to a commercial bank. Initial financing of sub-loans for investment projects through the PDF will be provided by IDA. Over time, it is envisaged that resources from other international and domestic financial institutions will be mobilized, which together with reflows of debt service payments from the borrowers, will augment the corpus of investment funds accessible through the PDF. Under this credit operation, the PDF will finance small hydro schemes with an aggregate capacity of about 10 MW and one medium-sized scheme of about 30 MW The US$ 35 million from IDA Credit is expected to leverage financing from other sources, i.e., developers' equity and commercial banks, of about US$40 million. There has been significant interest in participation in the fund already expressed by developers and bankers. The PDF will be managed by a Fund Administrator, which will be a private commercial bank operating in Nepal and selected by the Government through a competitive bidding process agreed with the Bank. Following an evaluation process satisfactory to the Bank the Government has approved selection of a local well established commercial bank, and the Bank has provided its no-objection to this selection. An PDF Board formed by the Government will be responsible for approving sub-loans in accordance with the recommendations of the Fund Administrator. Technical assistance from IDA grant of about $2.5 million (in addition to the credit noted above) will finance the Administrator's fees, as well as the operating expenses associated with the PDF Board during initial years of operation of the PDF. Once this capacity is developed the fund is expected to become self-sustaining. In parallel with the PDF project there are several technical assistance activities which were not all designed solely to support the PDF initiative but which will facilitate the implementation: (a) technical assistance is being provided by GTZ, under its Small Hydro Promotion Project to assist local entrepreneurs in ensuring that their investment proposals are bankable; (b) the Government of Norway is extending technical assistance to the Ministry of Population and Environment (MOPE) for institutional building, with special emphasis on strengthening MOPE's functional capabilities, in the exercise of its regulatory mandate of monitoring environmental conditionalities of the license for development of hydropower schemes to be financed under the PDF; (c) technical assistance to the Department of Electricity Development (DOED) is being provided by USAID through consultants under its Private Sector Hydropower Development Project, to develop DOED's capability in managilg the private power solicitation and award processes for medium- and larger-sized hydro schemes; and (d) USAID is also supporting the strengthening of DOED's capacity to review the environmental and social impact assessments of the investment schemes. Technical assistance provided by USAID is in its second phase. It was renewed in 2001, for an additional period of five years to 2006, after which the need for further assistance will be reviewed. Part B. Micro-Hydro Village Electrification This component will support the scaling-up of community-based micro-hydro village electrification by developing about 2.5 to 3.0 MW of new micro hydropower systems to serve sonnv30,000 consumers. The project will be build on the successes achieved under the UNDP-financed Rural Energy Development Program (REDP) and will extend electrification activities from the 15 districts currently served to another ten more districts. Program implementation will be decentralized through local  3 ISDS government, i.e., District Development Committees (DDC) and the Village Development Committees (VDC), and involves formation of a micro-hydro functional group (MHFG) at each participating community. The Alternative Energy Promotion Centre (AEPC), which is the agency responsible for promotion and development of alternative and renewable energy technologies in Nepal, will assume overall management of this project component. Further, through UNDP co-financing, the existing REDP project support unit will be strengthened to support the increased level of micro hydro system development envisaged. The total cost of this project component is estimated at US$ 8.9 million. Of this, the Bank would provide IDA funding of about US$ 5.5 million to finance the HMGN subsidies for the construction of micro hydro schemes, and support the community mobilization, training/capacity building, productive end-use and conservation efforts. The remainder of the costs will be financed by UNDP (US$ 0.8 million for program support/management), community contributions (US$ 1.1 million) DDC/VDC contributions (US$ 0.7 million), and the balance from loans to the community from local banks, e.g., the Agricultural Development Bank of Nepal. Part C. NEA Component This component involves investment support for the construction of a 220 kV double circuit transmission line (with one circuit strung initially) from Khirnti Power station to the existing 132 kV Dhalkebar substation. Further transmission and sub-transmission investments would be selected based on NEA's priority least cost investment plan and the project eligibility criteria set out in Annex 12, part C. This may include the financing of a 132 kV transmission line from Dhalkebar substation to Bhittamod on the Nepalese side of the border with India (joining the Indian grid at Sitamarhi substation in Bihar about 40 km from the Nepalese border) to facilitate cross border power trade, and the extension of 132 kV line bays at the associated substations. But financing of the Dhalkebar to Bittamod transmission line, and the associated sub-station is contingent on the appropriate institutional, administrative, legal, social and environmental arrangements being in place and salisfactory to IDA. The IDA financing will likewise finance supply and installation of equipment and materials, and civil works for the extension of NEA's sub-transmission and distribution systems to rural areas and towns not electrified, and rehabilitation and reinforcement of NEA's existing distribution systems in urban and semi-industrial centers. The transmission lines will enhance grid reliability and stability reduce system losses. Sub-transmission and distribution schemes will improve access, quality, reliability and operational efficiency of power supply to consumers. Acquisition of spare parts and protection equipment is also included. IDA financing for these investments is estimated at US$ 31.0 million, comprising an IDA credit of US$ 15.4 million and an IDA grant of US$ 15.6 million. Technical assistance (TA) activities will involve several institutional building initiatives at NEA. These include strengthening of NEA's financial management, audit and accounting systems. The TA will also support the conduct of marketing studies to review opportunities for productive use of surplus energy, extension of service to rural areas, power wheeling, and associated pricing studies that would enhanice opportunities for private sector participation in the power sector. Also to be financed is the engagement of engineering consultants to assist NEA in undertaking the 220 kV transmission scheme. IDA financing for TA is estimated at US$ 1.60 million. Components:  4 ISDS Part Al. PDF Investment Funds Part A2. Technical Assistance for PDF Administration Part B 1. Micro-hydro Village Electrification Investments Part B2.1 UNDP-financed TA Part Cl. NEA Transmission and Distribution Investments Part C2. TA for NEA institutional strengthening Part C3. NEA Project Administration and Engineering l.A.4. Project Location: (Geographic location, information about the key environmental and social characteristics of the area and population likely to be affected, and proximity to any protected areas, or sites or critical natural habitats, or any other culturally or socially sensitive areas.) The project area essentially covers the Kingdom of Nepal and any rural household in Nepal is a potential beneficiary. The screening and ranking process undertaken to identify potential sub-projects excluded any sites that resulted in significant dewatering of rivers by major diversions of flow as well as sites that interfered with protected biodiversity, natural and cultural heritage areas. Since all hydro power projects are run of the river type, and transmission and distribution projects generally do not result in resettlement of people, it is anticipated that there will be no segment of the population that will be adversely affected B. Check Environmental Classification: A (Full Assessment) Comments The project has been categorized as "A" considering the potential environmental impacts that may arise due to the construction of a medium sized hydropower project, of approximately 30 MW, and mini hydro projects to an aggregate of 10 MW. Although these projects are run of the river type projects, the larger hydropower projects could result in weir heights of several meters which could result in reasonably large impoundments, which may result in adverse environmental impacts, which should, however, be reversible if requisite mitigatory measures are taken. Transmission lines financed under the project will make every effort to avoid interference with protected biodiversity, natural and cultural areas. Full environmental assessments will be undertaken for each subproject based on the Environmental Policy Framework and the Operations Manual agreed with HMGN and IDA as well as be reviewed and cleared by IDA prior to disbursement of funds for sub-projects. C. Safeguard Policies Triggered Policy Applicability Environmental Assessment (OP/BP/GP 4.01) * Yes 0 No Natural Habitats (OP/BP/GP 4.04) * Yes 0 No Forestry (OP/GP 4.36) * Yes 0 No Pest Management (OP 4.09) 0 Yes * No Cultural Property (OPN 11.03) * Yes 0 No Indigenous Peoples (OD 4.20) * Yes 0 No Involuntary Resettlement (OP/BP 4.12) * Yes 0 No Safety of Dams (OP/BP 4.37) * Yes 0 No Projects in International Waterways (OP/BP/GP 7.50) * Yes 0 No Projects in Disputed Areas (OP/BP/GP 7.60)* 0 Yes * No *By supporting the proposed project, the Bank does not intend to prejudice thefinal determination of the parties' claims on the disputed areas  5 ISDS Section II - Key Safeguard Issues and Their Management D. Summary of Key Safeguard Issues. Please fill in all relevant questions. If information is not available, describe steps to be taken to obtain necessary data. II.D. Ia. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts. The use of renewable energy technology such small and medium hydropower and village hydro projects will yield net positive environmental impacts. Approximately 30,000 new consumers will benefit from the micro hydro village electrification component. These consumers, who currently use kerosene and other fuels for lighting, will benefit from reduced indoor air pollution levels. The expansion of grid connected small and medium hydropower projects would result in expanding the grid connected electricity consumer base and likewise reduce the demand for kerosene and other fuels for lighting, with associated environmental benefits. The supply of Nepal's power generation demands with run of the river hydropower projects, will replace the need for fossil fuel based power generation plants with its associated adverse environmental impacts due to emissions and large scale storage hydropower projects, which are known to create serious social and environmental problems. The replacement of fossil fuel based plants is of particular significance to large urban areas such as the Katmandu valley, which is currently facing serious air pollution problems. Potential adverse environmental impacts due to hydropower projects of the scale proposed under the project, would be associated with partial dewatering of a section of the river bed from the intake until water is returned to the river downstream of the power house and consequent impacts on aquatic life in the dewatered section, potential soil erosion caused by flushing flows discharged from sedimentation basins and by overflows at the forebays, potential ground instability caused by canal/pipe construction, cutting of trees for use as power poles for village hydro projects and impacts on aquatic life and surrounding vegetation caused as a result of submergence due high weirs in the larger run of the river hydropower projects (-.10 MW and above). The end use activities to be financed under the micro hydro village electrification component will be restricted to agro processing ( cereal milling, rice husking and oil processing) where electrical power will replace the current use of manual or water power as well as small scale carpentry workshops. These micro enterprises cater to local community needs. The agro processing schemes to be financed will largely reduce the drudgery by replacing manual milling by machine grinding, reduce cereal losses and increase yield in the case of oil expellers. These plants will be small with plant capacities in the range of 8 kW. With regard to the small scale carpentry workshops, the project will result in replacement of manual implements that are being presently used in existing carpentry workshops by electrical machines or tools. The source of timber will be from community forests The timber required for the carpentry workshops will be brought by prospective clients, who are members of community forestry user groups. These groups provide each member with a specified timber allocation based on domestic needs such as building/repairing houses and personal furniture requirements. The community forestry user groups closely monitor the use of timber by its membership. This monitoring mechanism, which is currently in existence, has proved to be very effective in ensuring sustainable timber use. The enforcement of the "timber quota's" by the community forestry user group will be used under this sub-component to ensure sustainable use of forestry resources. Nevertheless, in order to ensure that excess quantities of timber will not be used, it has been agreed with AEPC that the carpentry workshops will use only the authorized allocation of wood provided to the community by the respective community forest user group. It has also been agreed that their project finances cannot be used for funding saw mills.  6 ISDS Transmission lines and associated facilities impact on natural and socio cultural environments primarily within or in immediate vicinity of corridor rights of way and at the substations. The NEA will identify the trace for the transmission corridors for transmission lines financed under the project in consultation with respective Local Authorities so that every effort can be made to avoid interfering with protected biodiversity, natural and cultural areas. Once suitable traces are identified to minimize impacts to the natural environment, the main adverse impacts will be during construction of the transmission lines. Issues of concern are due to temporary or permanent clearing of crops or natural vegetation in the rights of way for the transmission lines. Longer term impacts are due to permanent clearing of land for access roads, tower foundations and substations. River crossings are common practice and pose engineering challenges, but have more limited adverse environmental impact except for aesthetics. Distribution networks have very limited adverse environmental impacts. Distribution lines generally follow existing way-leave along roads or streams, therefore, there is virtually no adverse environmental impacts. Minor and temporary land disturbances may arise out of laying new distribution lines where there is no possibility to follow roads or streams. Minor impacts could also arise out of clearing vegetation from sites. Distribution lines will not go through forest or wildlife reserves as well as other ecologically sensitive areas. Substations will be the primary source of construction related impacts under the project, but site specific EAs will address the potential impacts and the required mitigatory measures. Potential negative social impacts associated with the PDF and NEA Components, including resettlement and land acquisition, will be minimized as much as possible by selecting optimal locations and exploring alternative projects. Where land acquisition is unavoidable the project will be designed to cause the least amount of social, cultural and economic disruption. Project affected families (PAFs) will be compensated, relocated and rehabilitated, if required, so as to improve their standard of living, income earning capacity or at least to restore them to a living standard they are likely to have achieved if the project had not taken place. Special measures will be taken to protect socially and economically vulnerable groups such as female headed families, ethnic and tribal groups and people living in extreme poverty. With respect to the Micro-hydro Village Electrification Component land acquired for the construction of the canal, penstock, powerhouse and distribution line poles, is to be donated voluntarily by each participating community. Micro-hydro schemes will be developed only in those communities where land is voluntarily donated. All land required under the component will be on a voluntary basis. In addition if any loss of income or physical displaced is envisaged the community based Micro-Hydro Functional Groups (MHFGs) will verify the voluntary acceptance of community-devised mitigatory measures by those impacted. The construction of micro-hydro schemes is not expected to result in the involuntary relocation of any people or structures. Since the equipment required for these projects (<100 kW per sub-project is small it is not anticipated that any new road construction will take place for transport of equipment. Il.D.lb. Describe any potential cumulative impacts due to application of more than one safeguard policy or due to multiple project component. Considering the types of sub-projects eligible for financing under the project, and the stringent screening and ranking process followed to identify the potential medium hydro sites and the screening criteria (agreed with IDA) used to identify potential small hydropower projects, it is anticipated that there will be no cumulative adverse impacts, since the screening process eliminates sites that may result into serious adverse environmental and social impacts. Multiple safeguard policies have been triggered largely as a  7 ISDS precautionary measure, to focus attention on potential safeguard issues during implementation monitoring. To be eligible for financing, all sub-projects have to undertake an EIA in accordance with the Policy Framework and Operations Manual, which require IDA concurrence prior to disbursements. The EIA's will address any potential cumulative impacts and identify mitigation measures that are needed as part of the EMP. Social Impact Assessments (SIA) will be undertaken for all sub-projects and will provide the basis for determining the need to prepared a Resettlement Action Plan (RAP) and/or a Vulnerable Communities Development Plan (VCDP) in accordance with Policy Framework and Operations Manual. For RAPs and/or VCDPs review and clearance by IDA will be required before sub-project financing. II.D. I c Describe any potential long term impacts due to anticipated future activities in the project area. Since specific sites for hydro projects that will seek financing from the PDF and distribution and transmission traces are yet to be finalized, it is difficult to make predictions about potential long tern impacts due to anticipated future activities in the project area. Considering that all hydropower projects are run of the river type and transmission corridors will not interfere with protected biodiversity, natural and cultural sites, potential long term adverse environmental impacts are not anticipated under the project. However, site/sub project specific EAs will be conducted for each sub project, thereby identifying potential long term adverse impacts due to anticipated future activities. The EA would identify remedial measures which will be incorporated into the project design, to minimize long term impacts and will be part of the EMP which will be monitored by DOED and MOPE as well as IDA during implementation. Il.D.2. In light of 1, describe the proposed treatment of alternatives (if required) A Sectoral Environmental Assessment (SEA) was conducted for the power sector in Nepal in April 1997. The SEA included an analysis of alternative technology options for meeting short and medium term power demands in Nepal. The SEA for the power sector was used to examine the cumulative impacts of multiple projects planned in the same sector on the medium to long term. The SEA was to be the basis for identification of development options in the power sector of Nepal. Accordingly, the SEA identified that a small and medium scale hydropower development strategy was identified as the preferred option. The SEA makes it clear that there is significant scope and potential for renewable sources to play a role in Nepal's future power generation. The SEA emphasizes environmentally and socially sustainable development of hydropower resources in the country and recognizes the need to optimize and prioritize the uses of water resources while minimizing conflict. The Screening exercise conducted to identify potential hydropower sites undertook an analysis of alternatives with regard to suitable project sites. Therefore, alternatives with regard to power generation technology has been undertaken as part of the SEA, while water bodies with potential for hydropower generation has also been identified, however, exact locations along the waterbody will be identified as part of the sub-project specific EIA. Therefore, the alternatives with regard to location will be addressed adequately during the EIA. I1.D.3. Describe arrangement for the borrower to address safeguard issues Overall environmental and social issues applicable to the power sector in Nepal have been identified in the SEA. Since sub-projects to be financed under the project is not yet finalized, project specific EAs cannot be conducted at this stage. A EIA/SIA Policy Framework and a Manual to operationalize the EIA/SIA Framework has been prepared by HMGN and agreed with IDA. In accordance with the Policy Framework, developers of medium and small hydropower sub-projects will prepare project specific ElAs which will be reviewed by DOED for technical quality and compliance with the requirements of the Policy Framework, and submitted to MOPE, through MOWR for formal environmental clearance.  8 ISDS Environmental clearance will be a pre-requisite for disbursement of funds from the PDF. Although HMGN Environmental Regulations do not require micro hydro village electrification projects below I MW to seek environmental clearance, HMGN has decided that all such projects too will be required to undertake a simple environmental assessment and prepare an Environmental Management Plan. This will be reviewed, cleared and subsequently monitored by AEPC, on behalf of HMGN. In addition, during sub-project approval and supervision, AEPC will ensure that carpentry workshops will use timber only from entitled quotas from the respective community user groups. All transmission lines to be financed under the project will be subject to EIA in accordance with the Policy Framework. The ElAs will be prepared by NEA and reviewed and cleared by MOPE prior to permission being granted for implementation. Implementation of the EMPs will be the responsibility of the respective sub-project developers, with the DOED (since implementation of the EMP will be a license condition) and MOPE being responsible for monitoring the implementation of the EMP. Social assessments will be carried out as an integral part of the feasibility studies for each sub-project under the Project's PDF and NEA components. Each sub-project will undergo a systematic socio-economic baseline study consisting of the following: (i) socio-economic survey of sample households to determine asset ownership and pre-project incomes and living standards; (ii) land use survey, including formal and informal tenure systems, ownership and use-rights and management of common property resources; (iii) community studies describing social structures and social relations in the project area, including inherent power relationships, caste and class structures, and access of groups such as the poor, women and other vulnerable groups to resources and social services; (iv) institutional analysis of formal and informal community organizations for resource management and of local government institutions or local organizations established by other agencies for resource management or development activities; (v) beneficiary consultations and focus group meetings to determine local perceptions about the project and to ascertain local development needs; and (vi) rapid assessment of project impacts to determine the extent and type of positive and negative impacts the sub-project is likely to have on the project area and provide the basis of determining the need for the preparation of a RAP/VCDP or other social development measures. Site-specific social impact studies will build upon the socio-economic baseline data to quantify the type and extent of project impacts through: (i) site specific entitlement matrix prepared by applying the generic policy of entitlements to specific conditions of the sub-project clearly identifying expect impacts; (ii) detailed census of affected persons who will be eligible for compensation or rehabilitation; and (iii) an inventory of land and other assets being acquired under eminent domain under the Project. Sub-projects that impact 25 or more families with the loss of over 25% of their total land holdings or whose land holding is reduced to an uneconomic holding of less than 5.0 katha or who face relocation will require the preparation of a Resettlement Action Plan (RAP) in accordance with the provisions of O.D. 4.3.0. and the EIA/SIA Policy Framework. The project developer will be responsible for the preparation of a RAP which will document implementation arrangements for resettlement including asset acquisition, compensation, relocation and rehabilitation of persons affected by loss of dwelling, land and other assets or livelihood. The RAP will also clearly define institutional arrangements and responsibilities for the implementation of resettlement activities, budget for resettlement expenditures and detailed monitoring and evaluation arrangements. The presence of ethnic minorities or tribal populations in the project affected area for any sub-project will require the preparation of a separate Vulnerable Communities Development Plan (VCDP) to ensure that ethnic minorities/tribals are provided with assistance in accordance with their own priorities. The VCDP will be prepared in accordance with the provisions of O.D. 4.20 and the EIA/SIA Policy Framework. The VCDP replaces the Indigenous Peoples Development Plan (IPDP) typically prepared to meet the requirements of O.D. 4.20 by extending assistance to vulnerable groups living below the poverty line in the project area.  ISDS Land acquired for the construction of the micro-hydro schemes, including for canal, penstock, powerhouse, and distribution line poles, is to be donated voluntarily by each participating community. Micro-hydro schemes will be developed only in those communities where land is voluntarily donated. All land required under the component will be on a voluntary basis. Under the REDP, Memorandum of Agreements have been established by community functional groups as a means of recording the location and size of land being donated as well as the written consent and names of local witnesses for those community members voluntarily donating land. In addition to the Memorandum of Agreements, which will continue to record and verify the voluntary nature of land donations by each community member, specific provisions will be added to current Memorandum of Agreements to record that the land being donated is free of squatters, encroachers or other claims or encumbrances. In addition, if any loss of income or physical displacement is envisaged, MHFGs will verify the voluntary acceptance of community-devised mitigatory measures by those impacted. These will also be recorded in the revised Memorandum of Agreements. MHFGs will identify the land required for the micro-hyrdo schemes, however, project authorities will confirm whether land identified by MHFGs is suitable for the scheme. The construction of micro-hydro schemes is not expected to result in the involuntarily relocation of any people or structures. Developers of project medium and small hydropower sub-project will prepare project specific SIAs which will be reviewed by DOED to ensure compliance with the requirements of the Policy Framework. RAPs and VCDPs will be submitted to MOPE, through MOWR for formal clearance. Review and clearance by IDA will be required of RAPs and VCDPs for disbursement of funds from the PDF. NEA will be responsible for undertaking SIAs for all transmissions lines. RAPs and/or VCPDs as required will be prepared by NEA and reviewed and cleared by MOPE. Review and clearance by IDA will be required of RAPs and VCPDs related to transmission lines. II.D.4. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The EIA/SIA Framework and provides guidance on the development of a consultation strategy and public information tools to ensure community awareness and involvement in the PDF and NEA components of the project. Participatory monitoring will be undertaken by community members for those components of the sub-projects that directly affect them. The micro-hydro village electricfication component is community driven and the participation of local NGOs and civil society organizations to support the mobilization and formation of community based organizations is fully integrated into its design. The social mobilization strategy adopted for the program will include participatory monitoring involving the community functional groups in assessing the results and impacts of the schemes. The monitoring and evaluation program established at the community level will also be reflected in the monitoring and evaluation programs being established by AEPC. For the grid connected small and medium hydropower projects, and transmission and distribution lines, the stakeholders are the rural communities adjacent to the project sites, the NEA and the beneficiaries of the added power to the national grid. All sub-projects will undergo project/site specific EAs, where public consultation begins at the scooping stage, in accordance with the National Environmental Protection Act 2053 (1996) and Environmental Protection Rules 2054 (1997). Public consultations are mandatory during, scooping, EA report preparation, EA approval and implementation and monitoring of EMPs. The SEA which was completed in 1997 was subject to extensive in-country consultations prior to finalization. The process involved an open consultation and an information-sharing process with public, government, NGOs, and professional community stakeholders and resulted in a successfully completed selection of the most acceptable hydro-projects for meeting Nepal's short and medium term power demands. In addition, HMGN has mandatory rules for public consultation during scoping, IEE and EIA  10 ISDS preparation processes. A 15 day period is provided to the public through a public notice to identify their concerns about a proposed project so that these concerns can be included in the TORs for the IEE and/or EIA, during scoping of a sub-project. While it is strongly recommended that the project proponent consult the public during the TEE process, it is mandatory that the IEE be subject to public review and consultation for a period of 15 days, after completion of the IEE. The EIA preparation process involves a mandatory public hearing during the preparation stage as well as a mandatory public review and consultation period of 30 days once the EIA report is available in draft form. Since sub-projects to be financed under this project and the prospective developers are yet to be identified, no sub-project specific IEE/EIA's have been conducted as yet. However, a Policy Framework for Environmental Impact Assessment which mandates public consultations has been prepared which will serve as a template for undertaking IEE/EIA's for sub-projects once the prospective developers are identified. The Policy Framework was subject to public disclosure and consultations. In May 2002, DOED translated the Policy Framework into the local language and disclosed it to the public in all 75 districts in the country. The public disclosure process commenced on September 11, 2002 and continued for a period of 21 days. E. Safeguards Classification. Category is determined by the highest impact in any policy. Or on basis of cumulative impacts from multiple safeguards. Whenever an individual safeguard policy is triggered the provisions of that policy apply. [X] SI. - Significant, cumulative and/or irreversible impacts; or significant technical and institutional risks in management of one or more safeguard areas S2. - One or more safeguard policies are triggered, but effects are limited in their impact and are technically and institutionally manageable S3. - No safeguard issues SF. - Financial intermediary projects, social development funds, community driven development or similar projects which require a safeguard framework or programmatic approach to address safeguard issues.  11 ISDS F. Disclosure Requirements Environmental Assessment/Analysis/Management Plan: Expected Actual Date of receipt by the Bank 4/25/1997 Date of "in-country" disclosure 6/1/1997 Date of submission to InfoShop 6/23/1997 Date of distributing the Exec. Summary of the EA to the ED 1/11/2002 (For category A projects) Resettlement Action Plan/Framework: Expected Actual Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Indigenous Peoples Development Plan/Framework Expected Actual Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Pest Management Plan: Expected Actual Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop Dam Safety Management Plan. Expected Actual Date of receipt by the Bank Date of "in-country" disclosure Date of submission to InfoShop If in-country disclosure of any of the above documents is not expected, please explain why. Signed and submitted by Name Date Task Team Leader: Mudassar Imran April 14, 2003 Project Safeguards Specialists 1: Sumith Pilapitiya/Person/World Bank April 1 6, 2003 Project Safeguards Specialists 2: Afshan H. Khawaja/Person/World Bank April 16, 2003 Project Safeguards Specialists 3: Approved by: Name Date Regional Safeguards Coordinator: L. Panneer Selvam April 23, 2003 Sector Manager/Director: Penelope Brook; Vincent Gouarne April 23, 2003 For a list of World Bank news releases on projects and reports, click here ISEARCH l L DE C_K_ EWii E IAMAPI | 0W CASE_J