The World Bank Lebanon Energy Sector Reforms Program (P170506) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 10/22/2019 | Report No: ESRSC00888 Nov 13, 2019 Page 1 of 7 The World Bank Lebanon Energy Sector Reforms Program (P170506) BASIC INFORMATION A. Basic Project Data Country Region Project ID Parent Project ID (if any) Lebanon MIDDLE EAST AND NORTH P170506 AFRICA Project Name Lebanon Energy Sector Reforms Program Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date Energy & Extractives Program-for-Results 5/11/2020 7/16/2020 Financing Borrower(s) Implementing Agency(ies) Ministry of Finance Ministry of Energy and Water, Electricite du Liban Proposed Development Objective(s) Public Disclosure Improve the operational, commercial and financial performance of the power sector, and strengthen the governance of Electricite du Liban Financing (in USD Million) Amount Total Project Cost 4451.00 B. Is the project being prepared in a Situation of Urgent Need of Assistance or Capacity Constraints, as per Bank IPF Policy, para. 12? No C. Summary Description of Proposed Project [including overview of Country, Sectoral & Institutional Contexts and Relationship to CPF] The Program will have three components: (i) improving the sector's operational and commercial performance through strengthened enforcement of contracts with the distribution service providers and installation of advanced metering infrastructure; (ii) enhancing the sector's financial viability through replacing the use of expensive gas oil with natural gas in generation, gradual adjustment of tariffs, and debt management; and (iii) strengthening EDL's governance and transparency through the implementation of EDL's modernization plan implemented through the Program for Results instrument. In addition, the Program includes an IPF technical assistance to strengthen the capacity of the Ministry of Energy and Water and EDL to implement the aforementioned reforms. Nov 13, 2019 Page 2 of 7 The World Bank Lebanon Energy Sector Reforms Program (P170506) D. Environmental and Social Overview D.1. Project location(s) and salient characteristics relevant to the ES assessment [geographic, environmental, social] The overall Program will be implemented on a national scale covering all Lebanon but the IPF TA component will not include any physical interventions. This IPF TA component will finance capacity building to strengthen MoEW’s ability to effectively manage the Government’s reform program in general, and implementation oversight of the Bank Program in particular. The activities include setting up the Energy Sector Coordination Unit (ESC) with sufficient personnel including staff and consultants, and environmental and social specialists; assisting MoEW to assess the tariff framework; supporting EDL and MoEW to strengthen the DSP contract implementation and prepare the strategy for post-DSP contracts; supporting MoEW to elaborate EDL’s modernization plan; supporting MoEW to hire the Independent Verification Agency (IVA) to independently verify achievement of the DLIs under the PforR; assisting MoEW to provide oversight for the Transformation Office (TO) at EDL, which will coordinate and facilitate all actions of the EDL modernization plan with periodic reporting of program implementation progress; and supporting MoEW and EDL in implementing the stakeholder engagement plan (SEP) to actively consult and raise awareness about the progress of the Program in particular and the Government program in general. No studies that would lead to downstream environmental and social risks nor physical interventions are planned under this component. D. 2. Borrower’s Institutional Capacity The Ministry of Finance is the Borrower for the IPF component and the MoEW is the implementing agency for the IPF component. The implementing agency for the PforR if Electricite du Liban (EDL). The MoEW will rely on external consultants to prepare any required environmental and social assessments and/or management plans or to conduct any capacity building and training activities under the IPF TA component.- Public Disclosure II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Substantial Environmental Risk Rating Moderate The IPF TA will not have any physical interventions or technical studies which may lead to investments in physical works to be financed under the overall Bank-financed Program. However, the capacity building activities will need to include the environmental aspects that need to be addressed in the PforR component. The IPF TA itself does not have environmental risks, however missing out environmental considerations in any of the capacity building activities or lack of oversight and monitoring of environmental performance may increase the environmental risk of the entire operation. The PforR component has been classified as “Moderate” risk, therefore this IPF TA is accordingly classified the same (Moderate). Social Risk Rating Substantial No social concerns or aspects are associated directly with this IPF TA component which includes mainly capacity building measures for the MoEW and EDL, disclosure of/consultation on Terms of Reference and/or draft outputs for the TA. Having said that, it should be noted that the overall program is associated with potential social risks which are assessed and well covered under the Environmental and Social Systems Assessment (ESSA) of the PforR. Given that the social risk of the overall PforR project is rated ”Substantial”, the IPF component is accordingly classified the same (Substantial). Nov 13, 2019 Page 3 of 7 The World Bank Lebanon Energy Sector Reforms Program (P170506) B. Environment and Social Standards (ESSs) that Apply to the Activities Being Considered B.1. General Assessment ESS1 Assessment and Management of Environmental and Social Risks and Impacts Overview of the relevance of the Standard for the Project: As part of the reform process of EDL, the introduction of better environmental and social practices will be introduced and the system will be enhanced through the follow-up of environmental and social teams as part of the newly set up ESC under the IPF TA component, who will be able to support in the range of activities related to the E&S risk management and the application of good E&S practices. In particular, the E&S teams will support strengthening the capacity of the MoEW and EDL to implement the overall Program Action Plan (PAP) including conducting environmental assessments, adherence to health and safety measures, E&S monitoring and reporting, the internal grievance redress mechanism (GRM), HR strategy, SEP and all the actions that will be stipulated to deal with potential risk on the poor and the vulnerable. The E&S team will also be playing an important role in supporting the formulation of the EDL reform process particularly in relation to HR policies and staff training, and ensuring that any staffing review is done based on a transparent, objective and inclusive manner and that appropriate plans are in place to minimize any potential negative social impacts on staff. The IPF TA component may also include environmental and social studies which address the associated risks and impacts of the overall Program including technical or feasibility studies which may have environmental and/or social implications. The types of environmental and/or environmental instruments which need to be prepared under this component is not determined at this stage since there are no specific technical or feasibility studies determined yet. However, since the IPF TA component entails strengthening MoEW and EDL capacity, general environmental and Public Disclosure social awareness as well as legal compliance with national environment and social legislations are recommended as part of the institutional reform and strengthening MoEW and EDL’s E&S capacity. Areas where “Use of Borrower Framework” is being considered: The national system in Lebanon does not stipulate specific environmental or social measures specifically for Technical Assistance activities. Therefore the "Use of Borrower Framework" is not considered. ESS10 Stakeholder Engagement and Information Disclosure Enhanced engagement with stakeholder including efforts to bridge mistrust between the Citizens and Government comes in the heart of this operation. The risk related to mistrust and potential resistance to the reform from various stakeholders has been analyzed as part of the overall Program and solid measures were included in the Program Action Plan and incorporated in the Disbursement Linked Indicators (DLIs) under the PforR component to ensure that the Government (MoEW) as well as EDL will be preparing and implementing a comprehensive SEP that would include a range of activities for consultation, information sharing and dealing with grievances. A single SEP will therefore be prepared covering both the IPF and PforR components of the Program that will lay out information disclosure requirements, GRM, and communication strategies. The SEP will be prepared and disclosed prior to project effectiveness and will be implemented throughout the Program life-cycle. B.2. Specific Risks and Impacts Nov 13, 2019 Page 4 of 7 The World Bank Lebanon Energy Sector Reforms Program (P170506) A brief description of the potential environmental and social risks and impacts relevant to the Project. ESS2 Labor and Working Conditions The IPF TA component will set up the ESC which will include direct workers such as E&S staff or individual consultants to follow up on and handle the environmental and social risks associated with the overall Program. The TA component will also finance the recruitment of the independent verification agency (IVA) to validate the achievements of the DLIs. As such, the implementing agency will have to prepare labor management procedures (LMP) and ensure that it is disclosed prior to Program effectiveness while the implementation of the LMP that includes a GRM and Occupational Health and Safety (OHS) measures will have to be carried out throughout the Program life-cycle. ESS3 Resource Efficiency and Pollution Prevention and Management The IPF component does not include any studies that would lead to downstream environmental and social risks nor physical interventions that would result in any pollution. Therefore, ESS3 under the IPF-TA component is not relevant. However, since there will be waste generated under the PforR activities associated with the AMI installation, appropriate safeguard instruments (such as waste management plan) shall be prepared to ensure safe disposal of the old meters as part of the overall Program. Therefore, the IPF TA component, which mainly entails capacity building measures of staff in the new ESC at the MoEW, will ensure that there will be better learning opportunities for adequate management and monitoring of such waste management plans that fall under the overall Program. Public Disclosure ESS4 Community Health and Safety None of the IPF components are directly related to this ESS4. The installation of smart meters which comes under the PforR might entail some risks related to community health and safety in case the installation workers are not following good practices in dealing with the communities. As such the E&S teams of the ESC will ensure and monitor that adequate health and safety measures are implemented as part of the overall Program. Therefore, the IPF TA component will improve the knowledge and capacity of staff to adequately monitor and manage health and safety aspects associated with the overall Program. ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement The IPF will not finance any activities of relevance to this ESS ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources The IPF will not finance any activities of relevance to this ESS ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities The IPF will not finance any activities of relevance to this ESS Nov 13, 2019 Page 5 of 7 The World Bank Lebanon Energy Sector Reforms Program (P170506) ESS8 Cultural Heritage The IPF will not finance any activities of relevance to this ESS ESS9 Financial Intermediaries The IPF will not finance any activities of relevance to this ESS C. Legal Operational Policies that Apply OP 7.50 Projects on International Waterways No OP 7.60 Projects in Disputed Areas No III. WORLD BANK ENVIRONMENTAL AND SOCIAL DUE DILIGENCE A. Is a common approach being considered? No Financing Partners No financing partners under this IPF Public Disclosure B. Proposed Measures, Actions and Timing (Borrower’s commitments) Actions to be completed prior to Bank Board Approval: 1) A Stakeholder Engagement Plan (SEP) covering both IPF and PforR will be prepared and disclosed prior to appraisal; 2) Labor management procedures (LMP) will be developed for direct workers including individual consultants (TA consultants of the ESC and IVA) and firms (E&S external consultants) and will be disclosed prior to appraisal; 3) Staff under this IPF/TA component will have adequate qualifications to address environmental and social risks; 4) TORs for environmental and social staff will be publicly disclosed; 5) An adequate budget will be allocated for SEP and LMP implementation; 6) ESCP for the IPF component will be prepared and disclosed prior to appraisal. Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): The ESCP will set forth the client’s environmental and social commitment in relation to the Program. It will include commitment for the preparation of the TORs for the environmental and social staff who will be supporting the PforR component of the Program and implementation arrangements for the SEP and the LMP. The TORs for all TA will be consistent with the relevant ESSs and will be reviewed by the Bank. C. Timing Tentative target date for preparing the Appraisal Stage ESRS 30-Nov-2019 Nov 13, 2019 Page 6 of 7 The World Bank Lebanon Energy Sector Reforms Program (P170506) IV. CONTACT POINTS World Bank Contact: Tu Chi Nguyen Title: Energy Economist Telephone No: 5220+82100 / Email: tnguyen19@worldbank.org Contact: Ani Balabanyan Title: Lead Energy Specialist Telephone No: 458-2277 Email: abalabanyan@worldbank.org Contact: Sameh I. Mobarek Title: Senior Energy Specialist Telephone No: 5367+3318 / Email: smobarek@worldbank.org Borrower/Client/Recipient Borrower: Ministry of Finance Implementing Agency(ies) Implementing Agency: Ministry of Energy and Water Implementing Agency: Electricite du Liban Public Disclosure V. FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects VI. APPROVAL Task Team Leader(s): Tu Chi Nguyen, Ani Balabanyan, Sameh I. Mobarek Practice Manager (ENR/Social) Pia Peeters Recommended on 22-Oct-2019 at 07:50:30 EDT Nov 13, 2019 Page 7 of 7