The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
Appraisal Environmental and Social Review Summary
Appraisal Stage
(ESRS Appraisal Stage)
Public Disclosure
Date Prepared/Updated: 06/21/2021 | Report No: ESRSA01549
Jun 22, 2021 Page 1 of 17
The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
BASIC INFORMATION
A. Basic Project Data
Country Region Project ID Parent Project ID (if any)
Peru LATIN AMERICA AND P174812
CARIBBEAN
Project Name Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic
Recovery in Peru
Practice Area (Lead) Financing Instrument Estimated Appraisal Date Estimated Board Date
Energy & Extractives Investment Project 6/14/2021 11/30/2021
Financing
Borrower(s) Implementing Agency(ies)
Ministry of Economy and Ministry of Energy and
Finance Mines
Public Disclosure
Proposed Development Objective
To increase the availability and reliability in selected areas of Peru and support the modernization of the power sector
regulatory framework.
Financing (in USD Million) Amount
Total Project Cost 87.50
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 proposed activity focuses on investing in subtransmission infrastructure to help increase the availability and
reliability of electricity service and greening of electricity supply to accelerate COVID-19 recovery in Peru and to also
facilitate overcoming regulatory shortcomings to help modernize the power sector. Delayed investments by the public
electricity distribution companies hinder meeting existing and new electricity demand and are causing emergency
situations in various departments of Peru where polluting emergency diesel generation has to be used to overcome
the resulting electricity supply issues. This constrains economic activities at the regional level, increases electricity
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The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
supply costs, and causes local environmental pollution, which negatively impacts the populations in these regions
including the poorer and more vulnerable populations. The COVID-19 crisis has further delayed critical electricity
system investments, putting at risk the reliability of electricity provision for health facilities and for remote learning
and working. If not addressed, important secondary cities and peri-urban areas may soon face service disruptions,
new electricity customers be turned away and existing commercial and industrial customers unable to expand
production due to the electricity supply constraints resulting from the lack of PIT investments in these areas. This
situation also undermines the provision of electricity to power critical services and economic activities in these areas
and the prospects for inclusive and greener economic recovery. The Government also is seeking to modernize the
power sector’s institutional and regulatory framework to facilitate greater uptake of clean energy technologies,
increase private sector participation as market agents, and to enhance power system reliability and financial
sustainability. This would also include measures to facilitate improving electricity service delivery to enable
distribution companies to become more resilient for facing emergencies such as climate and disaster risks and the
current COVID pandemic.
The proposed project will finance critical electricity system investments needed to increase electricity service
availability, reliability, and greener provision of electricity supply for meeting existing and new electricity demand. The
project will include the following project components: (i) strengthening and expansion of substations and
transmission lines; (ii) technical assistance for regulatory strengthening; and (iii) project management and capacity
building. The Ministry of Energy and Mines (MINEM), through its General Directorate of Rural Electrification (DGER)
would be responsible for implementing the project in close coordination with the country's public electricity
distribution companies.
Public Disclosure
This investment and regulatory support is essential to furthering the Government's post-COVID economic recovery
efforts by increasing the availability, reliability, and sustainability of electricity service to sustain the economy and
enhance social welfare in selected areas of Peru following the COVID-19 crisis to ensure that these regions are not left
behind.
D. Environmental and Social Overview
D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic,
environmental, social]
D.1. Detailed project location(s) and salient physical characteristics relevant to the E&S assessment [geographic,
environmental, social]
Out of the 3 components to be financed by the project, social and/or environmental impacts are expected to arise
from the implementation of those interventions to be financed under Component 1, comprised by four types of
investments: (i) expansion and reinforcement of existing power transformation substations; (ii) repowering of existing
transmission lines within existing rights-of-way; (iii) new substations; and (iv) new transmission lines. The
interventions will be chosen from a list of priority investments identified by MINEM and the public distribution
companies. The long list of potential investments includes 52 investments located in 16 of the 24 regions (also called
Departments) of Peru covering urban, peri-urban, and rural areas and cover the coastal, highlands, and Amazon
regions.
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The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
Their regions and locations are:
San Martin: Moyobamba, Picota
Cajamarca: Jaén
Loreto: Yurimaguas
Amazonas: Bagua Grande
Ucayali: Manantay, Campoverde
Ayacucho: Ayacucho
Junin: Chanchamayo,
Puno: Puno, Juliaca, Azángaro, Ayaviri
Madre de Dios: Puerto Maldonado
Cusco: Cusco
Apurimac: Apurimac
Lambayeque: Chiclayo
Arequipa: Arequipa
Moquegua: Moquegua
Tacna: Tacna,
Piura: Sullana, Morropón
The Emergency Decree 048-2021 (05.24.21) that exceptionally authorizes the Ministry of Energy and Mines to
develop the “Transmission Investment Plan – PIT” Program of the electricity distribution companies under the scope
Public Disclosure
of the National Fund for Financing of the State's Business Activity – FONAFE, states in its considerations that projects
have been selected because in the areas where they will be developed there are hospitals and health centers, which
by not having a guaranteed power supply will put at risk the attention to emergencies such as the supply of oxygen,
operationalization of ICU beds, monitoring of patients infected with COVID-19 and all the infrastructure necessary to
address the pandemic.
Environmental context:
According to the National Environmental Information System (SINIA) of the Ministry of Environment (MINAM), these
16 regions cover five natural regions of the country (Tropical Forest, Yunga, Andean, Coastal, and Aquatic Ecosystems)
and different types of ecosystems according to the National Ecosystem Map, among which are: savannas, mountain
forest, dry puna, paramos, high altitude wetland, scrublands, and coastal desert. The country's forest coverage is
estimated at 56.8% (2018 data) according to the World Bank geoportal and 60% according to MINAM. In this context,
the potential environmental risks that could be generated in the planning and construction stages of the subprojects
to be financed will be related to the physical and biological characteristics of the area where each subproject will be
implemented. Additionally, the potential impacts of each subproject will depend on factors related mainly to the
proposed design, the precise location, the routes of the power lines, the extent of the works, and the
electromechanical equipment to be installed or replaced.
Social context:
The interventions that will be financed under Component 1 will be situated mainly in urban and peri-urban areas of
provincial cities, such as district capitals, and a few rural areas in the periphery of cities of yet unknown social
characteristics. The investments to be financed by the Project will be carried out exclusively by public distribution
companies’ infrastructure linked to the Interconnected National Electric System and subprojects that cause physical
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The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
displacement of formal and informal occupants would not be eligible. The proposed investments will benefit a variety
of stakeholders such as end users, both private and institutional (populations that receive the electricity services,
businesses, service providers such as health care facilities and education sector, government agencies, among others),
as well as third parties that seek and/or receive services from these end users of the electricity service, including
vulnerable and disadvantaged groups and individuals (such as people with disabilities and the poorest, city dwellers
from disadvantaged indigenous or ethnic groups, and afro descendants, among others). The project is designed to be
carried out in 16 regions located in the Andes and the Peruvian Amazon. Within these regions, the provinces where
the subprojects will be carried out are characterized by the low quality of basic social infrastructure in health,
education, sanitation, housing, transportation and communications, as well as the low presence of productive
economic infrastructure. In these scenarios of low presence of state institutions and formal markets, these projects
could generate positive effects on the social and economic life of the end beneficiaries. In these places, urban and
peri-urban contexts (mainly district capitals) are characterized by low population density, traditional lifestyles and
economies that combine services with agricultural activities. On the other hand, rural contexts are characterized by
dispersed settlement patterns, dedication mainly to agriculture and cattle raising, and the presence of vulnerable
peasant communities in the Andes and native communities in the Amazon. Aspects such as settlement patterns of the
population centers, land ownership, use of natural resources, economic activity, among others, will be considered in
the identification and evaluation of specific subprojects’ social risks.
D. 2. Borrower’s Institutional Capacity
The project will be implemented by the Ministry of Energy and Mines (Ministerio de Energía y Minas - MINEM)
through the Directorate General of Rural Electrification (Dirección General de Electrificación Rural - DGER) and within
this Directorate, the Directorate of Competitive Funds (Dirección de Fondos Concursables - DFC).
Public Disclosure
To date, the following institutional actors have been identified: i) DGER as the executing agency and Project overseer;
ii) DFC as the coordinating unit and PIU; iii) distribution companies which through contract administration will ensure
that national, local and the World Bank E&S requirements are put in place; iv) contractors which will be responsible
for implementing measures, actions and plans embodied in the E&S site-specific instruments; and v) supervisors of
civil works, which will supervise and monitor contractors’ compliance with the national and the World Bank E&S
requirements.
DGER/DFC currently lacks the institutional capacity to manage the E&S aspects of the Project. During preparation one-
time external consultants were hired to prepare the Borrower’s environmental and social risk management
instruments and DGER/DFC had no experienced E&S specialists available to supervise the work of the consultants or
to work with World Bank’s E&S specialists. For the implementation phase of the Project, DGER agreed to create an
E&S management unit as part of its PIU, which will comprise an E&S Coordinator, a full-time environmental specialist
and a full-time social specialist, who will ensure E&S management in accordance with the Project’s E&S instruments.
The PIU will be staffed following Project Effectiveness and these institutional capacity commitments will be clearly set
out in the ESCP.
In order to achieve adequate environmental and social management, all mapped actors will need to develop their
capacity to comply with the Project’s E&S standards; therefore, once the PIU, distribution companies, contractors and
supervision companies have been identified, a new assessment should be carried out to determine their capacity
development needs. Relevant actions from the assessment will be included in the Project’s Environmental and Social
Commitment Plan (ESCP), promoting the strengthening of the Borrower’s capacity.
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The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
II. SUMMARY OF ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS
A. Environmental and Social Risk Classification (ESRC) Moderate
Environmental Risk Rating Moderate
The environmental proposed risk classification for the Project is Moderate. Classification responds to the scale of the
activities, which relates to expansion and strengthening of existing power transformation substations, repowering of
existing transmission lines within existing rights of way, new substations and new transmission lines, which
correspond to routine and construction activities that have been previously carried out by the distribution
companies. Potential preliminary risks and impacts are: (i) not likely to be significant, comprising mostly of small
nuisances during construction and assembly works; (ii) not expected to be complex, with existing mitigation and
management mechanisms in place that have been proven to be effective; (iii) predictable and expected to occur
only during construction; (iv) site-specific, with Project activities taking place within fenced areas, and without the
likelihood of impacts beyond the Project footprint; (v) low probability of serious adverse effects to human health
and/or the environment, although hazardous materials containing Polychlorinated Biphenyls (PCBs) will be required
to be managed as hazardous waste during parts replacements following local regulations and international
agreements; (vi) routine safety precautions as related to civil works and assembly of electrical parts are sufficient to
prevent accidents, and; (vii) will be easily mitigated in a predictable manner. The most relevant potential
environmental risks preliminary identified to date are: • Those related to the generation of hazardous wastes which
will likely contain PCBs, and its inadequate transportation, storage, and/or disposal. The generation of these types of
Public Disclosure
waste will be assessed, and strict management measures put in place for adequate and safe handling,
transportation, and treatment or disposal. These measures will follow the WBG General EHS Guidelines, and local
regulations specific to these hazardous wastes. PCB management plan(s) will be prepared considering these
guidelines, to respond to the needs of each investment. • The increase in transportation activities will also pose risks
related to possible environmental pollution due to normal vehicle operations, possible incidents or accidents, as well
as possible impacts to the workforce, however, these risks are predictable and prevention and mitigation measures
are easy to implement. • Potential environmental impacts will be small nuisances such as noise, dust, and air
emissions. These are not to reach community members as substations are located at a safe distance from receptors.
Some clearance of vegetation may be required; however, this would involve work in areas that are already modified
and/or not legally protected. Components 2 and 3 of the Project are not considered to generate environmental
impacts, since they are focused on administrative activities related to technical assistance for regulatory
strengthening and Project management and capacity building. Should the Project be implemented during the
COVID-19 (C19) emergency, the ESMF will consider measures for surveilling workers' health and avoiding
transmission of C19 from project workers to local communities and vice versa. These measures will consider: (i)
workers screening before traveling to project sites, (ii) maintaining social distancing, (iii) providing adequate PPE, (iv)
setting up disinfection protocols, and (iv) contingency plans in the event someone showing symptoms or carrying
SARS-CoV-2, among others. If more information becomes available in the future or the Project is updated, the
environmental risk rating will need to be reviewed to ensure that it reflects the environmental risks and impacts
generated as subprojects are identified and assessments are done.
Social Risk Rating Moderate
The social proposed risk classification for the Project is Moderate. This classification responds to the scale and
magnitude of potential social impacts in the context of implementation of the four types of subprojects to be
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The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
financed (refer to section D). The subprojects are expected to produce a number of benefits. However, since they
involve new infrastructure, they could also potentially generate negative social impacts. Potential social impacts are:
(i) temporary access restrictions, (ii) inconvenience to locals due to air pollution from dust and noise from the works,
(iii) increased traffic, (iv) community health and safety risks (communicable diseases, increased incidents of road
accidents), and (v) land acquisition and/or temporary or permanent restrictions on land use, among others. Land
acquisition or land use restrictions could affect vulnerable people whose economic and social activities depend on
the land and its resources. The project is not expected to support any subprojects that would generate physical
displacement; however, it could finance subprojects that may cause economic displacements under certain
conditions as stipulated in the Resettlement Framework prepared for the Project. Also, the project will not finance
subprojects that could adversely affect indigenous communities and their lands. In the case of investments in new
substations and new transmission lines, especially those located in peri-urban and rural areas, the social impacts
would be highly positive, due to the infrastructure and services gap in general that hinders the development of
these areas and the wellbeing of its inhabitants, according to the National Rural Electricity Plan (MINEM, 2010). The
project will benefit electricity end users, including vulnerable groups in underserved areas, by strengthening existing
energy systems and providing more stable access and delivery of electricity service. These activities will, in turn,
provide local development opportunities and improve the social welfare and living conditions of end-users.
Dissemination of project information (design, proposed investments, job opportunities, opportunities for the
provision of local goods and services, environmental and social management, etc.) and access to grievance
mechanisms, aligned with the Stakeholder Engagement Plan (SEP) prepared under ESS10, will create a mechanism to
address beneficiary concerns, manage expectations and collect stakeholder suggestions. Regarding workers, the
Borrower will prepare labor management procedures (LMP) in line with ESS 2, and a project-level Environmental and
Public Disclosure
Social Management Framework (ESMF) will provide guidelines to identify and manage project risks, impacts, and
opportunities once investment selection is carried out and substations and transmission lines locations are known.
Although the level of risk related to sexual exploitation and abuse (SEA) and sexual harassment (SH) is considered
Low at the Appraisal stage, this risk will be further reassessed when specific information is available on the
subprojects to be financed, particularly their locations and social characteristics. Similarly, the social risk will be
continuously assessed and measures to increase social inclusiveness will be explored, through stakeholder
consultation at the subproject level. The World Bank will periodically review the risk rating assigned to the Project,
including during Project implementation, and modify the rating as necessary, in line with adaptive management, to
ensure that the risk and the E&S risk mitigation measures proposed remain adequate.
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:
This standard is relevant.
The Ruling for the Environmental Protection in Electrical Activities (“Ruling”), approved by Supreme Decree (SD) 014-
2019-EM establishes that in the cases where the developer has a pre-existing “Environmental Study” or a
complementary “Environmental Management Instrument” for an electrical facility and wishes to carry out an
extension and/or modification of its original Project, it must apply for a modification of its Environmental License
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The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
through the submission of an “Environmental Management Instrument” specific for this change. The “Environmental
Management Instrument” to be used to request such change will depend upon the scope of the change asked and
the level of the original “Environmental Management Instrument” (per national law, that includes a detailed EIA,
semi-detailed EIA, or a Declaration of Environmental Impact, DIA, depending on potential adverse impacts and risk).
This would apply to the expansion of substations or replacement of transformers under Component 1, which are
expected to be operating under an existing Environmental Instrument. On the other hand, this Ruling also indicates
that rural electrical systems of generation of electricity up to 1500 kW should carry out a DIA. Notwithstanding the
foregoing, DGER/DFC will coordinate with the distribution companies to update or obtain new licenses for all the
investments to be implemented under component 1, in full compliance of national and local laws and regulations.
The Project ESMF – to be finalized at the latest within 30 days of Effectiveness, but available in advanced draft by
Project Appraisal for consultation – lays out the process by which gaps between national laws and the World Bank’s
ESF will be filled to allow a comprehensive set of instruments to attach to the bidding process for contractors.
Environmental impacts preliminarily identified:
- Noise, dust, and air emissions generation. Small nuisances to the surrounding communities are expected to occur
during the works. Dust generation is expected to be low in magnitude and not to reach nearby houses or sensitive
areas outside the fenced areas in a manner that affects them. Noise and air emissions generated from the use of
construction equipment are also unlikely to seriously affect surrounding communities. An assessment of the
potential measures to address these impacts will be carried out according to the environmental instruments
applicable for each investment.
Public Disclosure
- Clearance of vegetation consisting of small bushes and grasses or previously disturbed sites outside environmentally
protected areas. For safety purposes, it may be required to clear vegetation that may be present within the fenced
areas or ROWs. A site visit (or if not possible, photos) will provide information on this to assess its need before
construction or installation activities.
- Generation, transport, and disposal of hazardous wastes which will likely contain PCBs. Old transformers are likely
to have PCBs, so the replacement of these transformers and expansion of substations will generate this type of
hazardous waste. During Project preparation, DGER/DFC through the distribution companies will assess the possibility
of encountering these wastes and the adequate disposal and/or treatment methods available and compliant with
local regulations and international best practices, including those from the General EHS guidelines focusing on Waste
Management.
- Occupational health and safety risks are those common from works at substations and electricity facilities. They are
related to works with energized equipment, working at heights, transportation of equipment, and from the
manipulation of materials potentially contaminated with hazardous oils, including PCBs. Environmental and
occupational health and safety impacts and risks will be assessed, and guidelines for each specific impact and risk will
be developed. These guidelines will build from the General EHS Guidelines and Industry Specific Guidelines.
Social impacts preliminarily identified:
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The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
- Temporary access restrictions to businesses and houses. Due to construction activities, transportation of supplies
and materials, personnel, etc., required for all four types of investments.
- Inconvenience for local inhabitants due to air pollution from dust, vibrations and noise from the construction work.
Construction activities could generate environmental impacts affecting the local population, especially those located
near the work area.
- Increased traffic. The number of vehicles and frequency of transport will increase as construction activities develop,
which could generate traffic episodes and an increase in the presence of heavy machinery.
- Risks to community health and safety. Peru is currently in a state of health emergency and the presence of foreign
workers could lead to the possible spread of COVID-19 and other contagious diseases. Also, the increase in traffic
increases the risk of traffic accidents. Is important to consider the risk of environmental impacts that are not
adequately mitigated.
- Land acquisition and/or temporary or permanent restrictions on economic use. Particularly for subproject
investments corresponding to type 3 and 4 investments, i.e. new substations, and transmission lines, here new
infrastructure may require land acquisition or permanent rights of way.
Given the lack of knowledge regarding the specific locations where the proposed investments would be made, the
borrower has prepared an Environmental and Social Management Framework (ESMF) to help screen activities once
Public Disclosure
locations and scope of works are known. This ESMF provides guidelines on (i) subproject eligibility criteria, (ii)
procedures for screening subprojects for E&S risks and impacts, (iii) proposed methodologies for carrying out the
environmental and social risk assessment of the Project, and (iv) guidelines for developing a gap analysis between the
national environmental and social instrument of each subproject and the World Bank’s environmental and social
standards, among main issues addressed in the ESMF. The draft ESMF was disclosed for purposes of public
consultations on June 4 (for more details on stakeholder engagement see ESS10 below). Further to public
consultations, the ESMF will be revised and finalized (incorporating stakeholder opinions), adopted and disclosed by
the Borrower no later than 30 days after Effectiveness, as set out in the ESCP.
However, during Project preparation the Borrower, through DGER, already identified a group of seven specific
subprojects to be part of the first financed package under the Project once the Loan Agreement is signed. Thus, the
E&S assessment for subprojects under the Project is to be conducted under two scenarios:
• For the seven specific investments identified during Project preparation, the DGER, as per World Bank’s ESSs,
submitted to the Bank the site-specific environmental and social instruments prepared to comply with the national
legislation. Since gaps with the ESF have been identified, supplemental studies to the existing E&S instruments will
have to be carried out prior to the bidding process to ensure that relevant E&S requirements identified through these
studies become binding commitments as part of the awarded contract(s). No site-specific investment (civil works) will
be carried out without prior preparation and implementation of E&S instruments to the satisfaction of the Bank, in
line with the ESSs. This will be clearly set out in the ESCP.
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Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
• Any other subprojects to be identified and included for financing under the Project during its implementation
must meet the E&S eligibility criteria embodied in the Environmental and Social Management Framework and need
to be prepared in line with this and other applicable instruments (e.g., the Resettlement Framework). The ESMF
developed by DGER explains the methodology to be followed to ensure the eligibility of the subprojects in relation to
these three criteria and subsequent processes to ensure the adequate environmental and social management of the
selected subprojects to Bank’s satisfaction.
In order to adequately manage the risks preliminary identified during the environmental and social due diligence
(DD), an Environmental and Social Commitment Plan (ESCP) will be agreed between MINEM/DGER and the World
Bank, which reflects the responsibilities of the Project's institutional actors with respect to environmental and social
management and establishes the deadlines for the execution of each agreed action.
ESS10 Stakeholder Engagement and Information Disclosure
This standard is relevant.
Key stakeholders include institutions such as MINEM, DFC/DGER, and FONAFE, as well as relevant non-governmental
stakeholders, as well as the population that could be impacted by the investments and/or would benefit
(beneficiaries) from the improved electricity service where the Project investments will be made. Beneficiaries (end
users) encompass different subgroups such as local governments and agencies that provide services to citizens
Public Disclosure
including disadvantaged and vulnerable people and groups, economic agents (micro, small, medium and large
enterprises, business, industries, etc.), health care and education facilities, among others. DGER has prepared a draft
Stakeholder Engagement Plan (SEP), proportionate to the risk of the Project, that was disclosed on June 4
(http://dger.minem.gob.pe/Transparencia/PIT/PIT-DGER.pdf,), along with the ESMF, RF and LMP, and consulted on
June 10th, before Project appraisal, through a virtual workshop with 100 registered participants. These included
regional authorities from Apurímac, Arequipa, Junín, Piura, Puno, San Martín, Tacna, and Ucayali; representatives of
Distribution Electricity Companies that would benefit from the Project, and representatives from OSINERGMIN, MEF,
and consulting firms. The draft SEP includes the results of key stakeholders mapping for the Project and a Grievance
Redress Mechanism (GRM) that will be ready and publicly available to process any complaints resulting from Project
activities as soon the final SEP is published. Beneficiaries will be informed about the availability of this Mechanism as
soon as the draft SEP is published. The final SEP will be adopted and disclosed by the Borrower within 30 days of the
Project’s effectiveness date as set out in the ESCP. All technical information and ESF compliance requirements will be
disclosed in an ongoing manner and in a way that is satisfactory to the Bank. Also, once the location and scope of the
specific intervention are known, each intervention will be screened following ESMF guidelines (ESS 1) and this will
include a stakeholder mapping to engage local stakeholders, using culturally appropriate approaches and materials
whenever necessary, to address specific concerns and risks identified by these stakeholders, including risks to
vulnerable people, security and/or safety risks affecting the delivery of services, past social liabilities regarding access
and service or related to past electrification Projects, etc.
Due to the ongoing pandemic, the Borrower will carry out consultations and other participatory engagements
respecting WHO’s guidelines and existing national norms related to this issue such as the Legislative Decree N° 1500
(05.11. 2020) which establishes special measures to reactivate, improve and optimize the execution of public, private
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Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
and public-private investment projects in view of the impact of COVID-19, as well as the Technical Note on “Public
Consultations and Stakeholder Engagement in WB-supported operations when there are constraints on conducting
public meetings” (March 2020). Remote engagement strategies will be preferred whenever feasible. When in-person
engagement activities need to be carried out to ensure robust and inclusive engagement with key stakeholders, all
necessary precautions will be taken to protect Project personnel and the stakeholders involved in the activities.
B.2. Specific Risks and Impacts
A brief description of the potential environmental and social risks and impacts relevant to the Project.
ESS2 Labor and Working Conditions
This standard is relevant.
Project workforce will include direct workers (consultants working in the PIU), civil servants (staff working in the
Project of MINEM/DFC/DGER/FONAFE, the state holding corporation National Fund for Financing of State Companies
that manages the 11 public distribution companies), and contracted workers (contractors, and subcontractors). The
construction workforce is expected to be small and mainly locally sourced through third party hiring. Just the same,
the investments will be screened for sexual exploitation and abuse and sexual harassment (SEA/SH) risks.
The standard recognizes the importance of promoting sound worker-management relationships and enhancing
Project development benefits by treating workers fairly and providing safe and healthy working conditions. Given the
scope of the interventions to be financed the necessary workforces are not expected to be extensive, and no major
Public Disclosure
issues associated with labor influx are anticipated. The Project will not hire children under the age of 18. Workers’
rights are protected by government organizations such as the Ministry of Labor and Employment Promotion and the
National Superintendency of Labor Inspection (Superintendencia Nacional de Fiscalización Laboral - SUNAFIL), among
others. National work regulations recognize equal opportunities and non-discrimination.
The Borrower prepared a Labor Management Procedure (LMP) in line with ESS 2, which will set out how all types of
Project workers will be managed. The LMP (disclosed before Project Appraisal) describes the working conditions and
management of worker relationships, the terms and conditions of employment, provisions for non-discrimination and
equal opportunity, worker’s organizations and freedom of association, occupational health and safety for workers,
provisions to protect the workforce, including child labor and minimum wage, and the prevention of forced labor. The
LMP also provides general guidelines regarding the provision of housing or accommodation for workers to be
included in contractor’s bidding documents to ensure that working conditions are adequate if such facilities are
required.
The LMP will further ensure that the health and safety of workers are adequately addressed using World Bank Group
General Environmental, Health, and Safety (EHS) Guidelines as pertinent. Key industry occupational health and safety
risks for this Project would be those related to i) electric power transmission and distribution (EHS, such as electric
and magnetic fields, hazardous materials, live power lines, etc.); and ii) construction and decommissioning activities
(WB EHS Guidelines 4.2), such as overexertion, slips, and falls, works in heights, struck by objects, dust, moving
machinery, exposure to chemical, hazardous or flammable material, waste, etc. Also, key general H&S risks
considered under WB EHS Guidelines 2.0, such as workspace, physical hazards, chemical hazards, etc. will be
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Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
addressed. These risks will be confirmed during Project implementation once the exact nature and scope of the
works for each subproject are known.
Regarding work safety issues under the COVID-19 pandemic, all actors involved in the electricity sector have prepared
and submitted to the Supervisory Body of Investment in Energy and Mining (Organismo Supervisor de la Inversión en
Energía y Minería – OSINERGMIN) and MINEM their Contingency Plan (protocols and measures) to address health
and safety issues related to COVID-19, following WHO guidelines and national regulations. The Contingency Plan,
protocols and measures are also mandatory for contractors and subcontractors as well as for members of the general
public going to public distribution companies’ premises. This Contingency Plan is included in the LMP.
Likewise, a Workers Code of Conduct, which contains obligations of all workers involved in the Project, will be
prepared and included in the final LMP (to be finalized after extensive consultations immediately after Project
Effectiveness), and adherence to the Code of Conduct will be a condition of employment for all workers. The Code of
Conduct will explicitly address issues of sexual exploitation and abuse (SEA), sexual harassment (SH), and gender-
based violence (GBV).
The LMP includes the details of the grievance mechanism for workers and the roles and responsibilities for
monitoring such workers. SUNAFIL is the national mechanism for any labor complaints. Workers in the PIU and
elsewhere, independent of their level, will have access to this mechanism. How SUNAFIL functions regarding
grievances is described in the LMP. Moreover, a Project-specific worker’s grievance mechanism that additionally
covers the subprojects to be financed will also be established and implemented. This workers GRM is included in the
Public Disclosure
LMP and will be made available to all Project workers.
Final LMP will be adopted and disclosed before start of bidding process (estimated for September 2021) as set out in
the ESCP. During Project implementation, the LMP will be revisited and updated as required, as additional labor-
related risks or issues unfold.
ESS3 Resource Efficiency and Pollution Prevention and Management
This standard is relevant.
The following issues related to Resource Efficiency and Pollution Prevention are relevant and will be addressed during
Project preparation and implementation.
Generation of Hazardous Waste. Existing transformers identified as hazardous waste due to PCB content will pose
health and safety risks to humans and the environment if environmentally sound final disposal is not undertaken.
Waste management will follow World Bank Group EHS Guidelines on Solid Waste Management (storage,
transportation, and disposal) of hazardous waste, international best practice guidance, and local regulations. These
will be in line with both national legislation and applicable international conventions. These protocols will be
developed by the DGER/DFC through the distribution companies in charge of each investment.
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Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
Pollution. No significant pollution issues are preliminary expected to arise from civil works under Component 1
(expected to be small scale works). Nevertheless, the ESMF will include (i) provisions to consider ESS3 requirements
in the screening of all investments to exclude any with significant adverse impacts related to this standard; and (ii)
Guidelines for Pollution Prevention, to be developed as part of the site-specific ESMPs. These guidelines will include
measures to prevent and/or mitigate any pollution-related adverse impact due to Component 1 interventions in
compliance with national regulation, the applicable provisions of this ESS, and WBG General EHS Guidelines for the
potential handling of hazardous material.
Pesticide use. Works requiring clearing and later re-installation of vegetation may require the use of pesticides. The
ESMF will include guidelines for pest management approaches stating that the Project will not use any pesticide
products containing active ingredients that are restricted under applicable international conventions or their
protocols or that are listed in, or meeting, the criteria of their annexes.
In compliance with ESS3, during project execution, impacts related to environmental pollution will be prevented and
mitigated through the application of the provisions detailed in the specific instruments for each investment and the
complementary studies to be carried out. This management is described in the ESMF.
In addition, as part of the environmental and social assessment of the Project, the Borrower, with the Bank's
assistance, estimated the gross greenhouse gas (GHG) emissions resulting from the Project. By displacing diesel-fired
self-generation with cleaner grid-supplied power, the investments are expected to result in GHG reductions.
According to a preliminary assessment, the Project will result in a GHG reduction of about 2.82 million tons of CO2 or
Public Disclosure
0.17 million tons of CO2 on average per year.
ESS4 Community Health and Safety
This standard is relevant.
Key risks and impacts related to community security, health, and safety are linked to (i) construction, and assembly
works, (ii) traffic safety during transportation of equipment, and (iii) potential spills of hazardous materials.
(i) Construction, and assembly works: most works will be within specific and fenced areas, with access controlled by
the contractor’s personnel. Ambient noise and dust will be controlled in Projects according to the specific
environmental instruments of each investment, to ensure no unintended impacts are in place. Works to be
conducted outside substations fenced areas, such as existing or new transmission lines will require the
implementation of adequate measures to prevent accidents, such as security protocols, signaling of the work and
security areas, ample communication of works to be done, control of access to the work areas, among others.
(ii) Traffic safety during transportation of equipment: transport of equipment, such as transformers, will involve the
use of trucks along the road. Although no significant traffic impact is expected, it is important to put in place
measures to prevent accidents to communities from these activities.
(iii) Potential of spill(s) of hazardous materials: the Project will be discarding or managing parts potentially
contaminated with PCBs. The Project should have a contingency plan in place to ensure that remediation actions,
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The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
communication procedures, and cleaning of sites are undertaken in an adequate and timely manner if these events
were to occur.
The Project’s risk level related to sexual exploitation and abuse (SEA) and sexual harassment (SH) is Low, per the
evaluation conducted by the World Bank during Project preparation. Moreover, a worker's Code of Conduct to be
prepared by DGER, and complemented as needed by Contractors, will specifically address SEA/SH risks. Adherence to
the Code of Conduct will be a condition of employment and mandatory for the entire Project workforce (from
managers to workers).
It is not known at the moment if the Project will require the use of security personnel, but it is possible that some
substations may require these personnel during project construction or assembly (Component 1). This will be further
assessed during project implementation, and ESS1 and ESS4 requirements will be considered.
Relevance of this ESS will continue to be assessed as part of the Bank’s due diligence, as more information becomes
available about the scope and location of interventions to be financed.
ESS5 Land Acquisition, Restrictions on Land Use and Involuntary Resettlement
This standard is relevant.
DGER and World Bank have determined that new substations and transmission lines that could require land
Public Disclosure
acquisition for the construction of new infrastructure or establishment of rights-of-way might be needed by the
Project under certain conditions. In these cases, DGER expects that the impacts involved will stem from economic
displacement, and not physical displacement. In other words, if new land acquisition is required, project authorities
will seek to avoid affecting productive land or requiring the displacement of structures of any kind, on the principle
that the Project should generate the least possible impact. If the resettlement of any persons are involved, it will be
the result of a negotiated process, akin to a “willing buyer-willing seller” transaction, in which those persons 1) are
fully informed of the options available to them, as well as their right to reject all of them if they wish; and 2) indicate
their acceptance of the final agreement reached in writing. In other words, the resettlement will be fully voluntary, in
that the affected parties will have a right to say “no”, in which case the distribution company involved will have to
seek alternative alignments for the transmission line or modify the physical footprint of the substation, as the case
may be.
The ESMF for the Project includes guidelines for the selection of subprojects according to criteria that will allow it to
remain at a Moderate risk in terms of land acquisition. A draft Resettlement Framework (RF) has been prepared by
DGER to address specific ESS5 issues and serve as the basis for managing any economic displacement or voluntary
resettlement that may occur. The draft RF was disclosed on June 4th and consulted on June 10th. The final RF will be
disclosed no later than 30 days after the Project Effectiveness date. If gaps with ESS5 are identified, DGER-DFC will
develop resettlement/ compensation or other types of action plans that are consistent with the requirements of ESS5
and the guidelines set forth in the RF. Finally, as agreed between DGER and the Bank, subprojects that would be
implemented in land where indigenous communities, as defined under ESS7, are physically present will not be eligible
for Project financing.
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Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
ESS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources
This standard is not relevant.
Interventions under Component 1 will be located in already-modified areas, and although these areas may be within
natural habitats, it is not preliminary expected that the activities will generate significant impacts in natural habitats
or on natural resources. This conclusion, taking note of the available information, is based on (i) works are expected
to be site-specific, of small scale, and limited scope; (ii) according to the second E&S eligibility criteria of the Project,
investments will not be eligible if they encroach environmentally sensitive areas, such as reserves, protected areas or
natural forest areas; and (iii) investments with environmental risks deemed substantial or high, and/or which pose
potential significant adverse impacts over natural habitats will be screened out through the ESMF.
Based on the available information, and to mitigate any potential low-scale impacts from the expected small scale
civil works, the ESMF and site-specific environmental instruments will include guidelines and measures to manage
impacts in natural habitats and on natural resources (e.g., area of native vegetation patches).
The relevance of ESS6 will be further reviewed during Project implementation when exact intervention sites are
identified and will be assessed through the ESMF.
ESS7 Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Local Communities
The information available indicates that most of the subprojects will be located in urban and peri-urban areas in
Public Disclosure
district capitals. Although the location of the majority of subprojects that will be financed by the Project (substations
and transmission lines) is currently unknown, it is possible that some subprojects in the extended prioritized list of 52
subprojects will be planned for areas where indigenous peoples are physically present, as defined under ESS7.
However, as agreed between the Bank and DGER, the Project will not support any subprojects that may negatively
affect indigenous populations and their lands, such as those that promote the involuntary resettlement of IPs or
encroachments on their communal territories, especially in the Andean and Amazon regions. Thus, this standard is
currently not relevant.
ESS8 Cultural Heritage
This standard is not relevant.
The Project activities are unlikely to generate risks or impacts on tangible or intangible cultural heritage as
subprojects are expected to be implemented in existing footprints or in previously modified areas.
Potential impacts on cultural heritage (if any) could be identified during the preparation of each subproject, and
mitigated during implementation. The ESMF includes guidelines in line with ESS8 to manage possible risks and
impacts on cultural heritage. In the event of an encounter with any physical cultural heritage, the chance finds
procedure included in the ESMF must be followed. Relevance of ESS8 will be further reviewed during Project
implementation.
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Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
ESS9 Financial Intermediaries
This standard is not relevant.
C. Legal Operational Policies that Apply
OP 7.50 Projects on International Waterways No
OP 7.60 Projects in Disputed Areas No
B.3. Reliance on Borrower’s policy, legal and institutional framework, relevant to the Project risks and impacts
Is this project being prepared for use of Borrower Framework? No
Areas where “Use of Borrower Framework” is being considered:
None
Public Disclosure
IV. CONTACT POINTS
World Bank
Contact: Janina Andrea Franco Salazar Title: Senior Energy Specialist
Telephone No: +1-202-458-9860 Email: jfranco3@worldbank.org
Contact: Laura Wendell Berman Title: Energy Specialist
Telephone No: +1-202-473-8506 Email: lberman@worldbankgroup.org
Borrower/Client/Recipient
Borrower: Ministry of Economy and Finance
Implementing Agency(ies)
Implementing Agency: Ministry of Energy and Mines
V. FOR MORE INFORMATION CONTACT
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The World Bank
Transmission Investment Plan (PIT) Program to support Post-COVID-19 Economic Recovery in Peru (P174812)
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): Janina Andrea Franco Salazar, Laura Wendell Berman
Practice Manager (ENR/Social) Maria Gonzalez de Asis Cleared on 21-Jun-2021 at 15:24:20 GMT-04:00
Public Disclosure
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