INTEGRATED SAFEGUARDS DATA SHEET APPRAISAL STAGE Report No.: ISDSA4415 Public Disclosure Copy Date ISDS Prepared/Updated: 02-Jun-2013 Date ISDS Approved/Disclosed: 15-May-2013, 03-Jun-2013 I. BASIC INFORMATION 1. Basic Project Data Country: China Project ID: P129657 Project Name: Concentrated Solar Power Project (P129657) Task Team Yanqin Song Leader: Estimated 15-Apr-2013 Estimated 10-Sep-2013 Appraisal Date: Board Date: Managing Unit: EASCS Lending Specific Investment Loan Instrument: Sector(s): Other Renewable Energy (100%) Theme(s): Climate change (100%) Is this project processed under OP 8.50 (Emergency Recovery) or OP No 8.00 (Rapid Response to Crises and Emergencies)? Financing (In USD Million) Total Project Cost: 156.40 Total Bank Financing: 80.00 Public Disclosure Copy Total Cofinancing: Financing Gap: 0.00 Financing Source Amount Borrower 76.40 International Bank for Reconstruction and Development 80.00 Total 156.40 Environmental B - Partial Assessment Category: Is this a No Repeater project? 2. Project Development Objective(s) The development objective of the proposed project is to demonstrate the technical viability of Concentrate Solar Power development in cold, dry, and high latitude conditions 3. Project Description The proposed project is a national concessional bidding project organized National Energy Administration (NEA). As one of the leading RE enterprises in China, China Datang Corporation Page 1 of 9 Renewable Power Co. Ltd (Datang RE hereafter), whose mother company is Datang Corporation (Datang), won the bid. Datang RE created and registered a subsidiary, Datang Ordos Renewable Power Co. Ltd., in Ordos, Inner Mongolia, to develop the proposed project. Public Disclosure Copy The proposed project includes the construction of a 50 MW CSP plant on a 200 ha site in the Gobi area. Annual power generation is estimated at 120 GWh. The approved tariff is about US$ 0.15/kWh. According to the concession’s conditions, the project should be built within 30 months after the project company is registered. The project company was registered in December 2011. Technology and cost. Following the requirement in the concession program, parabolic trough technology was selected for the proposed CSP project with 4 hours of thermal storage. Given the water scarcity in the northern region of China, the plant will be dry-cooled. Total cost of the project is US$156.4 million Project scope. The project includes two components at a total cost of US$156.4 million. The first component is a physical investment, estimated at US$152.5 million, which supports the development and construction of a 50 MW concentrated solar parabolic trough plant with 4 hours of thermal storage. The second component is technical assistance(TA), estimated at US$3.9 million, which is designed to strengthen the capacity of the Datang RE Ordos to ensure the smooth implementation of the proposed project and future operation and maintenance of the CSP plant. The TA component includes: (a) capacity building of Datang RE Ordos staff on site and overseas training related to the operation and maintenance of the CSP plant not included in an EPC (engineering, procurement, and construction) type of contract and Owner’s Engineer (OE) contract; (b) acquisition of computer based models and operational methodologies and related training to use them properly; and (c) hiring an OE to assist in improving the technical design and preparing the bidding documents to avoid delays in project implementation. Financing. The total project investment is estimated to be US$156.4 million and the proposed IBRD loan would be around US$80 million. The remaining financing will be covered by (a) Equity from Public Disclosure Copy Datang RE as required by Chinese law (at least 20 percent); and (b) a commercial loan from the China Construction Bank. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) The project is located in Balagong Town of Hangjinqi in Ordos, Inner Mongolia. The site is well suited for solar projects, especially for development of CSP, due to adequate solar resources and proximity to the power grid. An existing 220 kV substation is located 700 meters away from the project site. 5. Environmental and Social Safeguards Specialists Chongwu Sun (EASCS) Jun Zeng (EASCS) 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/ Yes Project related environmental issues appear to BP 4.01 be minimal. In accordance with Chinese Environmental Assessment requirements, A Chinese Environmental Impact Assessment Page 2 of 9 Report was prepared, for a 85 MW CSP power plant, by Nanjing Research Institute of Environmental Sciences, a institute holding EA Public Disclosure Copy Class A Certificate issued by the Ministry of Environmental Protection, and approved by Inner Mongolia EPB in 2008. The capacity of the proposed CSP for Bank financing is reduced to 50 MW, at the same location. Through site visit and discussion with the client and their EA consultant, the task team conducted preliminary environmental screening: The proposed project is located the New Energy Development Zone, in Balagong Town of Hangjinqi in Ordos, Inner Mongolia (see Figure 1-1). The site is well suited for solar projects, especially for development of CSP, due to adequate solar resources and proximity to the power grid. An existing 220 kV substation is located 700 meters away from the project site. There are no farming and other active economic activities in that area and villages are at least 5 km away from the Zone. Environmental Issues-Construction Environment, worker health and safety issues associated with construction are the traditional Public Disclosure Copy aspects of moving men, materials, and machines, namely: Waste gas Pollution during construction period is mainly dust from: excavation and use of explosives, and stacking, transport, loading, unloading of construction materials (concrete, sand, etc.) Exhaust gases and dust from movement of various vehicles and construction equipment, and storage sites of construction rubbish Noise Noise sources include mechanical devices and vehicles including grab, blender, vibrator, concrete transportation vehicles, bulldozer, impact driller, air compressor, welder, multiple function wood planner, trucks, pile drivers and grinders. Page 3 of 9 Waste water The waste water from this project during the Public Disclosure Copy construction period is sewage from the construction crew and small amounts from equipment cleaning and mechanical flushing. Solid waste The solid waste during the construction period of this project is non-hazardous waste generated mainly from the construction rubbish and rubbish from construction crews. Health and Safety Use of heavy equipment, lifting and moving equipment and materials, handling and use of explosives and various hazardous materials (paints, cleaning materials, oil, greases, etc.). Environmental Issues-Operation The project will use a dry cooling system, so water requirements will be minimal. The main pollution during operation period mainly is nonhazardous solid waste and wastewater generated from the workers daily functions. There will also be a small amount of wastewater produced from mirror cleaning and the concentrate stream from the reverse osmosis Public Disclosure Copy desalting system producing purified water for: mirror cleaning, boiler make-up, and cooling system for the heat transfer fluids etc. There are minor health and safety issues associated with the use and handling of the heat transfer fluids (HTF). These materials are relatively inert and safe, but they are combustible. The HTF can burn at elevated temperatures. Its chemical nature is such that its use as heat transfer medium in a properly designed and operated system does not normally constitute a serious fire or explosion hazard: vapor leaking into the air rapidly cools down to temperatures below the fire point. However, high pressure mists can form an explosive mixture with air if there is a leak in the heat exchange system between the molten nitrate salt and the HFT. The feasibility study recommended nitrogen Page 4 of 9 blanketing to avoid the formation of an explosive mixture in case of a HTF to nitrate salt leakage. An emergency response plan is recommended for Public Disclosure Copy the operation of the CSP, included in the EMP. Based on the above, this policy is triggered and the instruments are: EIA and EMP. IFC’s Environmental, Health and Safety (EHS) Guidelines on Community Health and Safety, and Occupational Health and Safety are applicable to this project. The project has been categorized B because (1) there is no hazardous materials/wastes from the proposed technology and processing of the CSP project; (2) the proposed CSP project is not located in a sensitive environmental area, and there is no significant flora and fauna in the area; and (3) the environmental impacts of the proposed project screened and identified are measurable and manageable and none of them are unprecedented. Natural Habitats OP/BP 4.04 No As mentioned above, according to domestic requirement and regulation, an EIA was prepared and cleared in 2008 for a 80 MW CSP at the same site, located in the semi-desert area. However, that project was not proceeded. When this 50 Public Disclosure Copy MW CSP project is proposed for Bank financing, that EIA was provided for Bank information. In that EIA, there was information about survey of natural resource, which indicated that there was no significant natural habitat resource near the site and no significant flora and fauna in that area. Based on this available information, OP4.04 is not triggered. The TT will ask the EA consultant to recheck and confirm this in the EA process. Forests OP/BP 4.36 No The project will not involve any forestry activity. Pest Management OP 4.09 No The project will not involve any pesticides. Physical Cultural Resources OP/ No Initial screening and site visit by the task team BP 4.11 did not reveal any relics or physical resources that are culturally or historically significant. The EA report prepared in 2008 had confirmed this. The task team request the institute which prepared EA to further consult with relevant government Page 5 of 9 authorities responsible for protection of physical cultural resources during EA preparation process. Furthermore, EMP will include chance find Public Disclosure Copy procedures in accordance with both Chinese regulations and World Bank policy. Indigenous Peoples OP/BP 4.10 No The project will be constructed in Bayinger Village at Balagong Town, Hangjing Banner, Ordos Municipality, Inner Mongolia Autonomous Region. The proposed project site is more than 5 KM from the nearest residential area of the village and the project construction/ implementation will not cause any impact to the villagers there. There are 619 households living in the Bayinger Village. Among its 1500 people, 925 are Mongolians and the remaining are Han people. Within the village, there is no clear boundary between Mongolians and Han people; Although Mongolians has its own language, the villagers use Mandarin in their daily lives and they also intermarry. Moreover, they are not presenting customary social and political institutions. And in the village, they live together with Han people and share land and natural resources. The transmission line will be constructed along the existing local highway with no impact on local communities. Based on these discussions, the team considered the OP4.10 is not triggered. Public Disclosure Copy Involuntary Resettlement OP/BP No The project will occupy a total of 200 ha of land 4.12 area. The land acquisition procedures, conducted in accordance with local regulations, were completed in 2008. Therefore, there will be no land acquisition or structure demolishing needed for the project construction. The power plant will be connected to the existing substation with a 110 kV-line. The construction of the required transmission line will be located along the existing highway with no land acquisition required. Safety of Dams OP/BP 4.37 No The project is not expected to involve any dams. Projects on International No The project will not involve any international Waterways OP/BP 7.50 waterways. Projects in Disputed Areas OP/BP No The project will not involve any disputed areas. 7.60 Page 6 of 9 II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues Public Disclosure Copy 1. Describe any safeguard issues and impacts associated with the Restructured project. Identify and describe any potential large scale, significant and/or irreversible impacts: The Bank policy OP 4.01 Environmental Assessment is triggered and the project has been classified as Category B. An Environmental Impact Assessment (EIA) was carried out for the proposed project in accordance with China’s national policy and regulations. As part of the EIA, environmental management plan (EMP) was prepared to summarize the key environmental impacts, to determine the mitigation measures and environmental monitoring program and necessary institutional arrangement. The environmental safeguard document was prepared on the basis of Chinese legal and policy framework for environmental protection and applicable Bank safeguard policies and Bank group’s Environment, Health and Safety Guidelines. Through preparation of safeguard documentation, there was not any potential large scale, significant and/or irreversible environmental impacts to be found. From proposed components, the following benefits are expected: the general population in the project area will benefit from the reduced local air pollution, while society in general will gain the benefits from the mitigation of greenhouse gases. The environmental impacts during construction period were identified and assessed, including noise, wastewater, waste gas, solid wastes from construction activities and construction materials and machines, and all of those are measurable and manageable. The main pollution during operation period mainly is nonhazardous solid waste and wastewater generated from the workers daily functions. There will also be a small amount of wastewater produced from mirror cleaning and the concentrate stream from the reverse osmosis desalting system producing purified water for: mirror cleaning, boiler make-up, and cooling system for the heat transfer fluids etc. There are minor health and safety issues associated with the use and handling of the heat transfer fluids Public Disclosure Copy (HTF). These materials are relatively inert and safe, but they are combustible. The HTF can burn at elevated temperatures. Its chemical nature is such that its use as heat transfer medium in a properly designed and operated system does not normally constitute a serious fire or explosion hazard: vapor leaking into the air rapidly cools down to temperatures below the fire point. However, high pressure mists can form an explosive mixture with air if there is a leak in the heat exchange system between the molten nitrate salt and the HFT. The feasibility study recommended nitrogen blanketing to avoid the formation of an explosive mixture in case of a HTF to nitrate salt leakage. An emergency response plan is recommended for the operation of the CSP, included in the EMP. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: As a long term impact, the general population in the project area will benefit from the reduced local air pollution, while society in general will gain the benefits from the mitigation of greenhouse gases. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. N/A 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. Page 7 of 9 Environmental: The EIA report, prepared by the client and their EA consultants, thoroughly addressed the potential environmental impacts envisaged for the project, and developed adequate measures in the EMP to avoid, minimize, mitigate and compensate the potential adverse impacts. Public Disclosure Copy The preparation of EA documents followed the relevant national laws/regulations and guidelines, as well as Bank’s safeguards policies and environmental health and safety (EHS) guidelines. During the EIA, risk analysis was carried out with proposed mitigation measure and emergency plan, including (1) the general principle is in compliance with relevant regulation and standards, featuring fire compartments based seriously on types and fire-resisting levels of processing units and buildings, according to satisfy requirement on fire-prevention and safe evacuation; (2) adequate techniques should be used to design precautionary measures for safety assurance; (3) combustible gas test detector and poisonous gas test detector should be installed on the sites where are identified as sensitive operation areas. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. Environmental: Two rounds of public consultations were carried out during the EA process. The technique used for the public consultations included surveys using public opinion questionnaires, focus group discussions, and public meetings with key stakeholders and interviews with some project affected persons. The issues raised during these consultations have been incorporated in the EIA and EMP. Furthermore, feedback over the concerns and issues collected in public consultation have been provided to the concerned groups and documented in the EA. The EIA and EMP documents and other project related documents have been disclosed locally through various means (e.g., websites, newspapers, etc.), as required by national and Bank's policies. The EIA and EMP have been disclosed through Bank’s InfoShop on February 11, 2013. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 14-Jan-2013 Public Disclosure Copy Date of submission to InfoShop 21-Jan-2013 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors "In country" Disclosure China 19-Dec-2012 Comments: EA was disclosed in the adminstration office of village close to the project and on the local website If the project triggers the Pest Management and/or Physical Cultural Resources policies, 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 OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) Yes [ ] No [ ] NA [ ] report? Page 8 of 9 If yes, then did the Regional Environment Unit or Sector Yes [ ] No [ ] NA [ ] Manager (SM) review and approve the EA report? Public Disclosure Copy Are the cost and the accountabilities for the EMP incorporated Yes [ ] No [ ] NA [ ] in the credit/loan? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the Yes [ ] No [ ] NA [ ] World Bank's Infoshop? Have relevant documents been disclosed in-country in a public Yes [ ] No [ ] NA [ ] 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 Yes [ ] No [ ] NA [ ] responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included Yes [ ] No [ ] NA [ ] in the project cost? Does the Monitoring and Evaluation system of the project Yes [ ] No [ ] NA [ ] include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed Yes [ ] No [ ] NA [ ] with the borrower and the same been adequately reflected in the project legal documents? III. APPROVALS Task Team Leader: Yanqin Song Public Disclosure Copy Approved By Sector Manager: Name: Mark R. Lundell (SM) Date: 03-Jun-2013 Page 9 of 9