41193 INTEGRATED SAFEGUARDSDATASHEET APPRAISAL STAGE Report No.: Date preparedlupdated: October 16,2007 I. BasicInformation 1.Basic Project Data Country: Indonesia 1 F'roject ID:PO96677 I AdditionalProject ID (ifand: ProjectName: :LahendongI1Geothermal Power Project Task Team Leader: Leiping Wang Estimated Appraisal Date: October 31,2007 1 Estimated Approval Date: November, 10,2007 ManagingUnit: EASTE I LendingInstrument: CarbonFinance Sector: Energy Theme: Climate Change IBRD Amount (US$m.): IDA Amount (US$m.): GEF Amount (US$m.): Otherfinancing amountsby source: BORROWER 8.67 ASIAN DEVELOPMENTBANK 17.50 Environmental Category: B Is this a transferred project ( Yes [XI No [ I Simplified Processing I Simple [ ] Repeater [ ] Is this project processed under OP 8.50 (EmergencyRecovery) Yes[] I No[A 2. Project Objectives: The development objective of the proposed project is to mitigate global environmental impacts of carbon dioxide (CO2) emissions through purchase of CO2 emissions avoided by the development of the Lahendong 11 geothermal project under the clean development mechanism (CDM). The plant has been developed to meet growing power demand in the North Sulawesi area of Indonesia. The key project performance indicators are (a) the actual Emissions Reduction (CERs) induced by the geothermal plant and certifiedby an independent verification entity; and @) the quantity of electricitygenerated. 3. Project Description: The Lahendong I1 Geothermal Power Plant is one subproject of the ADB-financed Renewable Energy Development Sector (REDS)Project which includes twelve subprojects. The Lahendong II Geothermal Power Project includes a single 20 MW geothermal steam turbo-generatorplant procured and operated by PLN. The project is designed to deliver up to 158 GWh of electricity annually to PLN's Minahasa system of North Sulawesi. Steam for the project is supplied from an extension of the existing Lahendong geothermalfield, under a take-or-pay agreement with the field's owner and developer,Pertamina,the national oil and gas company. .The project is located within the existing Lahendong geothermal fields that have been producing since 2001 in the North Sulawesi Province of Indonesia.,The geothermal field already supplies an existingpower plant of 20 MW owned and operated by the PLN and a third extension of 20 MW is being considered for h d i n g by JBIC. 4. Project Location and salient physical characteristics relevant to the safeguard analysis: Theproposed LahendongI1 GeothermalPower Project site is located on the land of the village of Leilem (adjacent to Lahendong village) and close to TondangowVillage, Sub-DistrictTomohon Selatan, Tomohon City, North Sulawesi Province, about 30 km south from Manado. Topographicallythe site is located on a hillyplateau 700 - 1200m above sea level. The natural vegetation within the site comprises grasses and weeds. Adjacent to the site the vegetation comprises secondary forests (Lengkoan which is located 7 km south of the project, and Tampusu located 6 km East from the project) and scrub that has been highly disturbed by human activities. Land to the north, east and west of the site is used primarily for estate crops and farming In relation to project activities, cooling system during the operation of PLTP Lahendong I1 is conducted by means of cooling tower. The water will be taken from Pangolombian Lake and circulating within the system during operation of the power plant. Based on document review and field visit, it is confirmed that the pipe from the PangolombianLake does not go through the secondary forests (Lengkoan and Tampusu), it mainly goes through rice fields and is buried underground. 5. Environmental and SocialSafeguards Specialistson the Team: Vivianti Rarnbe, Environmental Specialist Ninin K. Dewi, SocialDevelopment Specialist 6. Safeguard Policies Triggered (pleaseexplain why) Yes No Environmental Assessment (OPBP k01) x Natural Habitats (OP/BP 4.04) X Forests (OPIBP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OPIBP 4.11) x Indigenous Peoples (OPBP 4.10) X Involuntary Resettlement (OPBP4.12) X Safety of Dams (OPIBP 4.37) X - Projects on International Waterways (OPBP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X 11. KeySafeguardPolicyIssues and Their Management A. Summary ofKey Safeguard Issues 1.Describe any safeguard issuesand impacts associatedwith the proposed project. Identify and describeany potential large scale, significantandlorirreversibleimpacts: Based on findings of the approved EMP (UKL-UPL) for Lahendong IX Geothermal Power Project, Lahendong I1will have a neutral or only very smallimpact on the environment. This is largelydue to the fact that the project will be developed within the existing site of Lahendong I, as such it will not entail activities associated with full blown geothermal power development such as building of new roads, clearing of forested area for temporary facilities, and drilling of several exploratory wells, and that water conservation and water and air pollution control measures are effectively built into the project design. In addition, PLN will incorporate the recommended mitigation and monitoring measures into the reIevant phases of project implementation, appropriate mitigation measures have either been incorporated into the project design or proposed alongwith a monitoringplan and an appropriatebudget has been allocated in the project cost. Impacts related to disruption of local hydrology will be insignificant. Prior to commissioning, approximately 1,000m3of water will be abstracted step by step during the wet season so as not to impact on water discharge and other water uses of Pangolombian Lake. This process will be repeated approximately once every three years during major maintenance work. Daily abstraction of 20 m3per day during operation will have an insignificant impact on water levels and other water uses (irrigation, domesticwater supply etc) as the surface area of the lake is over 3hectaresand volume of the lack is around 210,000m3. Liquid waste management systems will be installed to ensure that there will be no unacceptable impacts on the surrounding land or water bodies. Domestic and sanitary wastewater from site facilities will be directed to a septic tank and soak-away pit. Condensate and excess cooling water along with water from the demister 1separator will be collected in a condensate-settling basin before being reinjected into well LHD7. Duringroutine maintenance coolingwater will be drained from the cooling towers and treated in the settlingbasin (pH reduction with caustic soda) before being reinjected into well LHD 7. Sludge will then be removed from the base of the cooling towers, placed in a concrete-lined solid waste pond (located adjacent to the site) and allowed to dry naturally before being deposited in a nearby landfill. Site runoff fiom areas where oil and grease are used (turbine oil, garage) will be filtered in a grease trap prior to discharge through the site stormwater drainage system. Thus, there will be no water polluting discharges from the site. In addition to the above, other outflow prevention measures will be installedincluding: - A storagetank capable of accommodating 15minutes supply ofhot water flow in case of failureof the re-injectionpumps. - An oil retention pit with sufficientcapacity for generator lubricant and transformer oil, should leakageoccur. - The causticsoda (for water treatment) storagetank will be enclosed in a bunded area. A gas waste management system will be installed to ensurethat the concentration of HzS in Non Condensable Gas (NCG) emissions from the cooling towers are minimized and in compliance with Government of Indonesia Environmental Standards on Air Emissions from Stationary Sources (KEP13MENLW3J1995). Detailed calculations of concentrations of H2S emissions from the coolingtower undertaken during the feasibilitystudy (2001) show that during operation of Lahendong 11, the concentration of H2Sftom the cooling tower will be well below the H2S discharge standard. As has been the experienceduringoperationof Lahendong I GPP, noise impacts of Lahendong11 on the nearest residents of Tondangow Village during operation of the plant will be negligible. This is due to the noise attenuation afforded by 300 m distance between the site perimeter and the nearest houses. Potential environmentalimpacts during the construction stage such as silt run-off, noise and dust nuisance due to site traffic and constructionworks will be minor, temporary and easilymitigated through inclusion of relevant clauses in the construction contract for good environmental site practice. On social aspect, there is no ethnicminority or indigenouspeopIe/communities, as characterized by Bank's policy, are located in the project area. The Minahasan is the majority group of people in the project site. They are generally integrated into Indonesian society and do not exhibit any special issues or problems that would set them aside from the general mainstream. Furthermore, there will be no land acquisition as the extension of Lahendong I1is still within the PLN-owned land. A letter confirming land ownershp has been made availableby PLN, and it is included in the project document. 2. Describe any potential indirect and/or longterm impacts dueto anticipated hture activitiesin the project area: Not relevant 3. Describe any project alternatives(if relevant) considered to help avoid or minimize adverse impacts: Not relevant 4. Describemeasures taken by the borrower to address safeguardpolicy issues.Provide an assessment of borrower capacityto plan and implement the measures described: A detailed environmental management plan (EMP) was prepared for the project by PLN and approved by the Minahasa Regional Environmental Agency in November 2003. According to ADB, an appropriatebudget (approximatelyUS$ 550,000) has been allocated in the project cost exclusively forboth social and environmentalmitigation, management and monitoring. The Borrower's capacity for implementing World Bank safeguard policies were reviewed and regarded as satisfactory to the Bank. The Bank's safeguard specialists noted that under Lahendong I operation, PLN has been implementing an environmental monitoring and managementreview program and producing a regular report stating a baseline data and the trend as a result of the operation. The report also statesthe occupationalhealth and safetymeasures. In addition, PLTP Lahendong 1 received an award for best performing environmental management of the year fiom the Governor of North Sulawesi on June 6, 2007 (on the EnvironmentDay). 5. Identify thekey stakeholdersand describethe mechanisms for consultation and disclosureon safeguardpolicies, with an emphasison potentially affectedpeople: The due diligence report (confirmingthat the proposed expansionof the existingpower station is in full compliance with the ADB's and the Bank's Policies on Environment Assessment, Resettlement/Land Acquisition and Indigenous Peoples and the relevant Indonesian Laws and Regulations and there are no legacy issues) prepared by the Bank staff and the final EIW approved by the ADB has been disclosed. In addition, the approved EMF' has been located at the Local Environmental Agency in the City of Tomohon, as well as at the project site (GPP) for public access. B. Disclosure RequirementsDate Environmental Assessment/Audit/ManagementPlanlother: EMP Date of receipt by the Bank January 2007 Date of "in-country"disclosure November 2003 August 10,2007, and Date of submissionto InfoShop September 14,2007 For categoryA projects, date of distributingthe Executive Summaryof the EA to the ExecutiveDirectors Resettlement Action Plan/FrameworWPoIicy Process: N/A Date of receipt by the Bank I Date of "in-country'' disclosure Date of submissionto InfoShop IndigenousPeoples PlanIPlanningFramework: NIA Date of receipt by the Bank Date of "in-country"disclosure Date of submissionto InfoShop Pest ManagementProcess: NIA Date of receipt by the Bank Date of "in-country" disclosure Date of submissionto InfoShop *If the project triggers the PestManagement andlorPhysical Cultural Resourcespolicies, the respectiveissues are to be addressedand disclosedas part of the Environmental Assessment/Audit/orEMP. If in-country disclosure of any of the above documentsis not expected, please explain why: C. ComplianceMonitoringIndicators at the CorporateLevel (to befdled in when the ISDS is finalized by theproject decision meetin& OPBP 4.01 EnvironmentAssessment - Does the project require a stand-aloneEA (including Yes [XI No[ 1 N/A [ 1 EMP) report? If yes, then did the Regional EnvironmentUnit or Sector Yes (EMF') Manager (SM)review and approvethe EA report? Are the cost and the accountabilities forthe EMP No, the cost was incorporatedinto incorporatedin the creditfloan? the deveIopment cost by PLN. OPIBP4.04 Natural Habitats - Would the project result in any significant conversion or Yes [ ] No[ 1 NIA [ X I degradation of critical natural habitats? If the project would result in significantconversionor degradation of other (non-critical) naturalhabitats, does the project includemitigation measures acceptableto the Bank? OP 4.09 Pest Management - Does the EA adequatelyaddress the pest management Yes [ ] No[ 1 NIA [ X I issues? Is a separatePMP required? Yes [ ] No [ ] NIA [ x ] If yes, has the PMP been reviewed and approved by a safeguards specialistor SectorManager? Are PMP requirements included in project design? If yes, does the project team include aPest ManagementSpecialist? OPIBP 4.11 -Physical Cultural Resources Does the EA include adequate measures related to Yes I1 No[ 1 NIA [ X I cultural property? Does the credit/loan incorporatemechanisms to mitigate the potential adverse impacts on physical cultural resources? OPIBP4.10 Indigenous Peoples - Has a separate Indigenous PeoplesPlanlPIanning Yes [ 1 No[ 1 NIA [ X I Framework (as appropriate)been prepared in consultationwith affected IndigenousPeoples? If yes, then did the Regionalunit responsible for safeguardsor SectorManager review the plan? If thewholeproject is designedto benefit IP,has the designbeen reviewed and approvedby the Regional SocialDevelopmentUnit? OPJBP 4.12 Involuntary Resettlement - Has a resettlement planiabbreviated pldpolicy Yes [ 1 No[ 1 NIA [ X I fiameworWprocessframework (as appropriate) been prepared? If yes, then did the Regionalunit responsible for safeguards or SectorManager review and approve the plan/policy fi-ameworWprocessframework? OP/BP 4.36 -Forests Hasthe sector-wideanalysisof policy and institutional Yes [ ] No[ 1 N/A[x] issues and constraintsbeen carried out? Does the project design include satisfactorymeasures to overcomethese constraints? Does the project finance commercialharvesting,and if so, does it includeprovisions for certificationsystem? OPIBP4.37 Safety of Dams - Have dam safetyplansbeen prepared? Yes [ ] No [ ] NIA [ x ] Have the TORSas well as composition for the independentPanel of Experts (POE)been reviewed and approved by the Bank? Has an EmergencyPreparedness Plan (EPP)been prepared and arrangementsbeen made for public awarenessand training? OPBP 7.50 Projects on International Waterways - Have the otherriparians been notified of the project? Yes [ 1 No [ ] NlA[x] If theproject falIsunder oneof the exceptionsto the notification requirement, has this been cleared with the Legal Department, and the memo to the RVP prepared and sent? What are the reasons for the exception? Please explain: Has the RVP approved such an exception? OP/BP 7.60 Projects in Disputed Areas - Has the memo conveying all pertinent information on the Yes [ ] No[ 1 N/A [ x ] international aspectsof the project, includingthe procedures to be followed, and the recommendationsfor dealing with the issue, been prepared Does the PADNOP include the standarddisclaimer referred to in the OP? The World Bank Policy on Disclosure of Information Haverelevant safeguardpolicies documentsbeen sent to Yes [ x ] No[ 1 [ 1 the World Bank's Infoshop? Have relevant documentsbeen disclosedin-country in a Yes public place in a form and languagethat are understandableand accessibleto project-affected groups and localNGOs? All SafeguardPolicies Have satisfactorycalendar,budget and clear institutional Yes [ x ] No[: 1 N/A [ I responsibilitiesbeen prepared for the implementationof measuresrelated to safeguard policies? Have costsrelated to safeguard policymeasuresbeen included in the project cost? Does the Monitoringand Evaluation system of the project include the monitoringof safeguardimpacts and measuresrelated to safeguardpolicies? Have satisfactoryimplementation arrangementsbeen agreed with the borrower and the samebeen adequately reflected in the project legal documents? D. Approvals