INTEGRATED SAFEGUARDS DATA SHEET RESTRUCTURING STAGE Note: This ISDS will be considered effective only upon approval of the project restructuring Report No.: ISDSR9707 Date ISDS Prepared/Updated: 25-Aug-2014 I. BASIC INFORMATION 1. Basic Project Data Country: Mongolia Project ID: P122320 Project Name: Ulaanbaatar Clean Air Project (P122320) Task Team Leader: Gailius J. Draugelis Estimated Board Date: 03-Apr-2012 Managing Unit: GEEDR Sector(s): Energy efficiency in Heat and Power (83%), Housing construction (7%), Sub-national government administration (5%), Public administration- Energy and mining (5%) Theme(s): Pollution management and environmental health (73%), Urban Economic Development (9%), Environmental policies and institutions (6%), Urban services and housing for the 'poor (6%), Urban planning and housing policy (6%) Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 No (Rapid Response to Crises and Emergencies)? Project Financing Data (in USD Million) Total Project Cost: 21.89 Total Bank Financing: 15.00 Financing Gap: 0.00 Financing Source Amount BORROWER/RECIPIENT 6.89 International Development Association (IDA) 15.00 Total 21.89 Environmental Category: B - Partial Assessment Is this a Repeater project? No Is this a Transferred No project? 2. Current Project Development Objectives The development objective (PDO) is to enable consumers in ger areas to access heating appliances producing less particulate matter emissions and to further develop selected medium-term particulate matter abatement measures in Ulaanbaatar in coordination with development partners. Proposed New PDO (from Restructuring Paper) Not applicable. 3. Project Description The Project comprises the following components: (A) Ger Area Particulate Matter Mitigation, addressing pollution from household heating in ger areas; (B) Particulate Matter Mitigation in Central Ulaanbaatar; (C) Public Awareness Raising, Program Coordination and Project Management. The many initiatives started by donor programs, including those of the World Bank, are likely to run into constraints to sustaining programs, many of which would be unanticipated, given the new ground that is being broken in this sector. The Bank's project is intended to support the Government to fill these gaps, in particular as it continues to focus on macro-economic recovery. The project is also intended to pave the way for a second generation of investments relating to expanding access to more modem, efficient and environmentally friendly heating options and reducing dust where there are significant co-benefits but which would not be picked up by the Government or donors without appropriate preparation. The scope of the components has not changed since the approval of the Project: Component A. Ger Area Particulate Matter Mitigation. The objective of this component is to implement short term mitigation measures, specifically a stove replacement program and a low pressure boiler replacement program, by providing capital subsidies, financed from the IDA credit, to households to partially bring down the capital costs of eligible stoves and low pressure boilers. Associated technical assistance is also included in the component. Component B: Central Ulaanbaatar Particulate Matter Mitigation: The Component has four sub-components as described below. Sub-component (B l) Mitigation of Fugitive Dust from lack of City Greening. This sub-component is supporting (a) preparation of a feasibility study assessing current greening programs of the city and evaluation of options to seed grass and other greenery for the purpose of reducing dust throughout the city and development of recommendations to improve greening; (b) preparation of a pilot project, including support for bid document preparation, supervision, and monitoring and evaluation of the pilot; and (c) investment support for the supply and installation of grass and other eligible plants/trees on a pilot basis. Sub-component (B2) Mitigation of dust from Power Plant Emissions and Ash Ponds. This sub-component is supporting a feasibility study for: (a) the installation of improved emission controls in Ulaanbaatar"s combined heat and power plants; and (b) the mitigation of dust from power plant ash ponds, studying their environmental impacts and recommending cost effective solutions. Sub-component (B3) District Heating Feasibility Study and Knowledge Building. This sub-component is supporting: (a) a feasibility study for the rehabilitation and sustainable expansion of district heating in Ulaanbaatar; and (b) complementary training, including international training, on district heating policy, regulation and management. Sub-component (B4) Affordable Housing Policy Technical Assistance. This sub-component is supporting: (a) an assessment of current policies, laws and practices for affordable housing provision in UB, evaluate effectiveness toward meeting policy objectives, and introduce lessons from international experience on affordable housing; and (b) development of an affordable housing strategy for UB City from which policies and programs can be identified. Component C. Public Awareness Raising, Program Coordination and Project Management. In addition to project management support, this component will build capacity in the MUB to more systematically collect information on air pollution programs, and use that information to strengthen coordination efforts and for dissemination of public information through this enhanced program monitoring capability. It has three subcomponents: Subcomponent (Cl) Air Quality Monitoring and Analysis. The component plans to support: (a) equipment for air quality monitoring and analysis, including for the Ulaanbaatar Air Quality Agency; and (b) training, including international training, in urban air quality analysis and management to UB municipality. This sub-component is coordinating with an ongoing Japan International Cooperation Agency (JICA) air quality capacity building project. Sub-component (C2) Program Coordination Support. This sub-component supports: (a) consultants to assist UB city"s air pollution program coordination efforts, including to (i) maintain links with stakeholders, (ii) collect, synthesize and archive information on air quality for use by decision makers and the public, and (iii) provide support to various air quality working groups or coordination mechanisms that UB participates in (or leads) to improve effectiveness and sharing of information; and (b) training, including international training, on air quality management and policy making, to gain knowledge on various approaches and common difficulties associated with air quality improvement programs. Sub-component (C3): Project Management, Public Awareness, and Monitoring and Evaluation. This sub-component is supporting the hiring of a PR firm to assist the UBCAP PMU with developing a communications program for the project and a management fee for the Project Management Unit. 4. Project location and salient physical characteristics relevant to the safeguard analysis (if known) Ulaanbaatar (UB), Mongolia's capital city, is located in the foothill of the Khentii Mountain range, at an elevation of 1,350 m, along the Tuul River and in valleys of its tributaries- the Tolgoit, the Selbe, and the Uliastai. UB's climate is continental, with very cold and dry winters with limited snowfall, and short summers (June-August). The temperature is below zero from November through May. The annual precipitation is 250mm, of which 94% falls from April to October. Under Project Component B 1, the specific locations for city greening were not selected at the time of project approval. During implementation, the Tasganii Ovoo location was selected for the demonstration project, which includes two sites: * Site 1: 1.7ha on the hill of Tasganii Ovoo; which is located in the centre of Ulaanbaatar city, Chingeltei District, khoroo 5. * Site 2: 305m x 2.5m green lanes along the main road located down to Tasganii Ovoo, west side. The Ovoo of Tasganii hill has high religious significance and is a part of the cultural heritage of Ulaanbaatar. Thus the selection triggers OP 4.11 (Physical Cultural Resources) in accordance with paragraph 5b "any project located in, or in the vicinity of, a physical cultural resources site recognized by the borrower". 5. Environmental and Social Safeguards Specialists on the Team Bernard Baratz ( GFMDR) Jun Zeng ( GURDR) 6. Safeguard Policies Triggered? Explanation (Optional) Environmental Assessment OP/BP 4.01 Yes The proposed project will have positive environmental benefits from a reduction in PM emissions. The project will provide significant stimulus to the introduction of clean stove and low pressure boiler technologies, replacing existing stoves. It is expected that the replaced stoves (bought back and removed from use) will be sold as scrap metal at scrap metal recycling centers (one located in Darkhan municipality in Mongolia). Domestic manufacturers have limited capacity so the new stoves are sourced internationally as well. The temporary environmental impacts directly generated from the project are currently anticipated in the (a) renovation of the laboratory building to accommodate testing facilities for low pressure boilers; and (b) planting of trees, grass and other eligible plants/trees in UB on a pilot basis to mitigate fugitive dust from a lack of city greening. In addition, the project is also supporting a number of feasibility studies, namely: (a) a Power Plant Emissions Control Strategy to (i) improve emission controls in Ulaanbaatar's three power plants and to (ii) improve mitigation of dust from power plant ash ponds, studying their environmental impacts and recommending cost effective solutions; (b) district heating rehabilitation and expansion opportunities. The project was prepared in accordance with the previously disclosed ISDS. A Safeguards Report was prepared and disclosed locally. An EMP was prepared for the city greening pilot as discussed in this ISDS for project restructuring. Natural Habitats OP/BP 4.04 No The project does not involve activities that will impact natural habitats or be located in areas which may have critical natural habitats. Forests OP/BP 4.36 No The project does not involve activities in forested areas nor conversion/degradation of critical forest areas. Pest Management OP 4.09 No The project does not anticipate promotion of the use of pesticides nor procurement of pesticides. It it is unlikely that herbicides would be used for land preparation for re-vegetation activities. However, Guidelines on good practices and precautions regarding pesticide use, if needed, for the city greening pilot will be prepared. The Guidelines shall be referred to in the TOR of the feasibility study which shall screen recommended re-vegetation measures for potential triggers of OP 4.09. Physical Cultural Resources OP/BP 4.11 Yes During implementation, the Tasganii Ovoo location was selected for the demonstration project under Project Component B 1. The Ovoo of Tasganii hill has a high religious significance and is a part of the cultural heritage of Ulaanbaatar. Thus, the selection triggers OP 4.11 (Physical Cultural Resources) in accordance with paragraph 5b "any project located in, or in the vicinity of, a physical cultural resources site recognized by the borrower". An Environmental Management Plan (EMP) is required specifically to address potential impacts on the physical cultural resources within this component. A public consultation on the demonstration project for city greening that includes the Ovoo on Tsaganii hill location was held on July 18, 2014. Based on the comments/suggestions received at the public consultation, the EMP was finalized and publicly disclosed on August 12, 2014 on the Project Management Unit's website (http://www.tisip.mn/101-main/news/483 -environmental-and-social-safeguards). It was also disclosed in the Mongolian language on the PMU website (www.usip.mn) and UB municipal website (www.baigal.ub.gov.mn) on August 18, 2014 as well as on websites www.ulaanbaatar.mn and www.ubservice.mn on August 20, 2014. The demonstration project is designed to avoid adverse impacts on cultural property. The EMP, satisfactory to the Bank, includes mechanisms to mitigate any potential adverse impacts on cultural .__ -property. Indigenous Peoples OP/BP 4.10 No The project will operate in the Ger Areas and parts of central Ulaanbaatar where no indigenous peoples have been identified by previous Bank projects. The Bank's previous urban projects in UB operating in Ger areas and Ulaanbaatar, (USIP 1, 2 and 3) did not identify indigenous peoples as defined in the Bank's OP/BP 4.10. The latest determination was made on June 30, 2010 by the Safeguards Screening for USIP3. Involuntary Resettlement OP/BP 4.12 No The project consists mostly of subgrants, studies and technical assistance which will not cause any involuntary resettlement as defined in the Bank's OP/BP 4.12 on Involuntary Resettlement. Component A: Community-based product centers established for the distribution of project supported clean stove technologies will be set up by a separate commercial bank (XacBank). These centers are the traditional tents themselves and may require temporary land acquisition in ger districts. However, the temporary use of land for the centers will be on voluntary basis and if needed the Xac Bank will lease land from the land-owners if the owners agree to do so. The emission laboratory was set up in August 2010 under the ADB project. The Bank's support of the laboratory renovation might need additional land for its expansion. The Team confirmed that the additional land taken for expansion will be government owned and no involuntary resettlement will be caused for this purpose. Component B: Subcomponent (B 1) piloting the city-greening activities will involve small scale of civil works. The city greening pilot is on municipal land and within Twithin the right-of-way of existing urban streets within Central Ulaanbaatar and no land taking is needed. Subcomponent (B3) will finance feasibility study for the rehabilitation and sustainable expansion of district heating in Ulaanbaatar. Downstream impact of the FS might involve temporary land taking during heating pipeline system construction. The Team confirmed that all pipeline construction will be along the existing city roads and no involuntary land taking will be needed. Component C: No involuntary land taking is needed. Safety of Dams OP/BP 4.37 No The project will not include activities involving any dams as defined in the policy. Projects on International Waterways OP/BP No The project components do not involve 7.50 international waterways as defined in the policy. Projects in Disputed Areas OP/BP 7.60 No The project is not located in any known area of territorial dispute. II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the Restructured project. Identify and describe any potential large scale, significant and/or irreversible impacts: Potential environmental impacts associated with the project are currently anticipated in the (a) operation of the laboratory to test cook stoves and low pressure boilers; (b) planting of trees, grass and other eligible plants/trees in UB on a pilot basis to mitigate fugitive dust from a lack of city greening, and (c) upstream and downstream issues regarding the subsidy and promotion of new stoves, including: management of scrap metals from the old replaced stoves, and domestic stove fabrication facilities. In addition, the project will also support a number of feasibility studies, namely: (a) a Power Plant Emissions Control Strategy to (i) improve emission controls in Ulaanbaatar's three power plants and to (ii) improve mitigation of dust from power plant ash ponds, studying their environmental impacts and recommending cost effective solutions; (b) district heating rehabilitation and expansion opportunities. There could be potential environmental issues associated with the recommended investments resulting from preparation of the feasibility studies. The restructured project triggers additional safeguard policy Physical Cultural Resources OP/BP 4.11, as the Tasganii Ovoo location was selected for the project component B2-city greening, which has a high religious significance and is a part of the cultural heritage of Ulaanbaatar. Potential environmental impacts of the demonstration project consist of those associated with the movement of machines, materials and men (noise, dust, nonhazardous waste disposal etc.). There may be minor excavations, so the issue of "chance find procedures" is also relevant. Also, although the ovoo is a movable structure, the project will not displace or replace it by any other structure. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: N/A 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The project is based on dialogue conducted through the Bank#s Economic and Sector Work on evaluating urban air pollution, health impacts and mitigation options, an ADB supported pilot project examining the stove subsidy mechanism, and ongoing outputs from the East Asia and Pacific Region Clean Stove Initiative, a Bank-executed Trust Fund AAA generously supported by the Australian Government. The project has selected measures where gaps have been identified to ensure feasible short term measures have the best chance of successful implementation and medium term measures have time for preparation. The project was designed as the optimum selection of mitigation strategies to reduce one of the worst air quality situations in the world. 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. A safeguards report was prepared by the Borrower to address all the potential environmental and social aspects of the project discussed above (see Section II A 1). The report was reviewed and accepted by the World Bank prior to Board Approval. As noted above, the UBCAP Project Management Unit of the Municipality of Ulaanbaatar has satisfactorily implemented the project thus far and is in compliance with safeguards measures listed in the safeguards report. The capacity of this PMU has not changed since the approval of the Project and is assessed as adequate to manage safeguards requirements, including the additional ones listed in the EMP for the city greening pilot. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The Safeguards Report was publicly disclosed on July 16,2011, on the PIU website. Interviews of stove producers and users were conducted jointly between the Bank team and the PIU during the preparation of the rapid assessment of upstream and downstream impacts of development of new stoves and discarding of old stoves. The project has a feedback mechanism through (a) quality assurance; (b) consultations with stove suppliers; (c) interactions through sales with users that incorporates lessons learned in project design for the stoves switching component. A public consultation on the demonstration project for city greening that includes the Ovoo on Tsaganii hill location was held on July 18,2014. Based on the comments/suggestions received at the public consultation, the EMP was finalized and publicly disclosed in English on August 12, 2014 and in Mongolian on August 18, 2014 on the Project Management Unit's website (www.usip.mn). The EMP was also disclosed in Mongolian in multiple websites www.ulaanbaatar.mn and www.ubservice.mn on August 20, 2014. The demonstration project is design to avoid adverse impacts on cultural property. The EMP, satisfactory to the Bank, includes mechanisms to mitigate any potential adverse impacts on cultural property. B. Disclosure Requirements Environmental Assessment/Audit/Management Plan/Other Date of receipt by the Bank 12-Aug-2014 Date of submission to InfoShop 25-Aug-2014 For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors "In country" Disclosure Mongolia 12-Aug-2014 Comments: 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: Potential environmental issues associated with the Tsaganii Ovoo greening subproject, which triggered the Physical Cultural Resources policy, have been adequately addressed in a separate EMP, which was disclosed on August 12, 2014. 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) report? Yes [X I No I ] NA I I If yes, then did the Regional Environment Unit or Practice Manager Yes I 1 No [X I NA I I (PM) review and approve the EA report? Are the cost and the accountabilities for the EMP incorporated in the Yes [ X I No I I NA I I credit/loan? OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? Yes [ x I No I ] NA I I Does the credit/loan incorporate mechanisms to mitigate the Yes [X] No I I NA [ I potential adverse impacts on cultural property? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the World Yes (.X I No I I NA I I Bank's Infoshop? Have relevant documents been disclosed in-country in a public place Yes [X I No I I NA I I 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 [X] No I I NA [ ] responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the Yes [X] No [ I NA I I project cost? Does the Monitoring and Evaluation system of the project include Yes (XI No [ I NA [ ] the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with Yes I XI No I ] NA I I the borrower and the same been adequately reflected in the project legal documents? III. APPROVALS Task Team Leader: Name: Gailius J. Draugelis Approved By: Regional Safeguards Advisor: Name: Peter Leonard Date:y2/2014 Practice Manager/Manager: Name: Julia M. Fraser Date: 9/3/2014