Page 1 INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC1726 Date ISDS Prepared/Updated: 07/21/2005 I. BASIC INFORMATION A. Basic Project Data Country: South Africa Project ID: P073322 Project Name: Renewable Energy Market Transformation Task Team Leader: Arun P. Sanghvi GEF Focal Area: Climate change Global Supplemental ID: Estimated Appraisal Date: August 1, 2005 Estimated Board Date: December 6, 2005 Managing Unit: AFTEG Lending Instrument: Specific Investment Loan Sector: Renewable energy (100%) Theme: Climate change (P) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 6.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.00 0.00 B. Project Objectives [from section 2 of PCN] The project development objective is to enhance environmental sustainability in South Africa's energy sector by facilitating significant reduction in South Africa's GHG emissions. The project's global objective, in line with GEF Operational Program 6 (OP6), is to remove the barriers to, and reduce the implementation costs of, renewable energy technologies to help mitigate greenhouse gas emissions. C. Project Description [from section 3 of PCN] The project would provide technical assistance (TA) and capacity building for Renewables-based power generation and Commercial Solar Water Heating (CSWH). The overall objective is the creation and/or strengthening of the organizations and institutions that would help the Government meets its renewable energy target. The capacity areas covered would be the policy setting, promotion, regulation, service provision, and monitoring/evaluation of renewable energy power generation. The agencies covered would include DME, National Energy Regulator (NER), and potential project sponsors and financiers. Page 2 Commercial Solar Water Heating (CSWH). The project will support expansion of South Africa's nascent commercial solar water heating industry by promoting installation of systems for solar water heating for commercial, institutional, and industrial applications; this will be coordinated with an UNDP/GEF program aimed at the residential market. There are already a few companies serving the CSWH market in South Africa, without any subsidies or other incentives; however, they face some barriers which makes it difficult for them to scale-up. The near-commercial nature of the CSWH presents good prospects for rapid take-off during the project with GEF support. The project-supported solar water heating investments will be installed in existing institutional, commercial, and industrial facilities, within the confines of their facility perimeters. In most cases, the solar arrays will be installed on rooftops of existing buildings, but ground mounting of the arrays is possible. The associated water storage tanks, pumps, water softening equipment, etc., will for the most part be installed inside existing buildings but in any case will be in close proximity to the associated (existing) institutional, commercial, or industrial uses of the hot water. No new land taking is envisioned for the investments. Renewable energy power generation. This project is expected to trigger significant private sector investments in renewable energy power generation; these investments will be financed outside of the REMT project by a combination of private equity and debt, with debt financing facilitated by an output-based revenue stream provided by external 'carbon funds' such as the PCF. Preliminary analysis indicates that over 2005-2008 there will be about 5-6 projects: - With a renewable generation capacity of 75 MW that would displace about 900 GWh per year of Eskom's generation, and capital cost of about $ 150 million, with 'carbon funds' providing about $ 50 million; - Which would utilize resources such as landfill-gas-to-electricity, bagasse cogeneration in sugar industry, waste-based generation in the paper industry, small hydro and wind. Alternative development interventions/approaches. The conventional approach of the Bank, including GEF, financing renewable energy power generation investments was rejected - this reflects the emergence of non-Bank funds as well as the well-developed nature of South Africa's private and financial sectors. Lending instrument. The project provides only GEF grants, as there is no need for South Africa to borrow IBRD funds for this project. D. Project location (if known) Project supported solar water heating investments will be installed primarily in the major cities: Johannesburg, Pretoria, Capetown, etc., but eligibility for the program is country-wide. E. Borrower’s Institutional Capacity for Safeguard Policies [from PCN] The Government of South Africa has considerable institutional capacity for renewing, analyzing, and enforcing safeguard policies. Page 3 F. Environmental and Social Safeguards Specialists II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Cultural Property (OPN 11.03) X Indigenous Peoples (OD 4.20) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X Environmental Category: C - Not Required III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: 04/30/2005 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: N/A C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. N/A IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Arun P. Sanghvi 07/21/2005 Approved by: Regional Safeguards Coordinator: Mr Thomas E. Walton Comments: Sector Manager: Mr Yusupha B. Crookes 07/21/2005 Comments: 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in-country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. Page 4