Page 1 INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 08/08/2005 Report No.: AC1716 1. Project Statistics 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 Environmental Category: C - Not Required Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] 2. Project Objectives The project's renewable energy objective, in line with GEF Operational Program 6, is to remove the barriers to, and reduce the implementation costs of, renewable energy technologies to help mitigate greenhouse gas emissions. The specific priority is CC-3 Power sector regulatory frameworks and policies for grid-based renewable energy. The principal outcomes of the project will be the establishment of (i) the frameworks and capacity required for meeting the Government's renewable energy target; and (ii) a commercial solar water heating industry. In terms of the Government's ultimate objective, the project will significantly increase the likelihood of meeting the 10,000 GWh target. 3. Project Description The project would provide technical assistance (TA) and capacity building for (i) Renewables-based power generation in South Africa and (ii) Commercial solar water heating (which complements a UNDP-GEF project focused on the residential segment). Renewable energy power generation. The project will assist South Africa in the creation and/or strengthening of the organizations and institutions that would help the Government meet its renewable energy target. The capacity areas covered would be the Page 2 policy setting, promotion, regulation, service provision, and monitoring/evaluation of renewable energy power generation. Commercial solar water heating. The project will provide TA and capacity building to professional, technical and business groups in key market segments and companies engaged in selling CSWH systems and services and implementation support. This will include assistance in developing standards and codes and the establishment of a 'participating CSWH company program'. The program will assist the companies in a variety of ways on as-needed basis: getting certifications that their equipment meets standards, independent installation and performance verifications to increase customer confidence, equipment performance guarantees in case this should be needed initially, performance grants for installed systems that are deemed to be demonstrative or path- breaking. In return, the participating companies will agree to meet the program's code of behavior and risk suspension in case they fail to meet the conduct code. These features will significantly improve the companies' status and make them more credible to the potential customers and lenders. 4. Project Location and salient physical characteristics relevant to the safeguard analysis 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. 5. Environmental and Social Specialists on the Team Mr Christopher James Warner (AFTS1) 6. Safeguard Policies Triggered Yes No 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 II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The technical assistance and solar water heating investments in the project are not expected to present any environmental or social risk. Solar water heating is not a 'listed activity' with respect to South African environmental requirements, and therefore would Page 3 not be subject to the environmental screening or environmental assessment process. Since the project does not involve any land taking, and the only construction will be within the perimeter of existing institutional, commercial, or industrial establishments, (and, in fact, mostly on rooftops) no social safeguards are expected to be triggered. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: Any environmental issues raised by some of the investments financed under the framework developed by this project will be addressed during the course of each such generation projects, which will all have to meet the well-established South African guidelines for such types of projects; these guidelines are acceptable to the Bank. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. During the early stages of preparation for this project, at the end of 2003, when the project included PCF funding and the prospects of physical investments, ASPEN prepared a discussion draft of an Environmental Management Framework for the project. The EMF would have relied heavily on the South African EA process for review and clearance under the Bank's environmental safeguards policy requirements. As these investments will now be handled through separate, future projects, it has been agreed that the task team might revisit this EMF concept with ASPEN if the need arises. The underlying understanding is that of relying as much as possible on "country systems" to meet Bank processing requirements. 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. South Africa has well-established environmental guidelines which are acceptable to the Bank. In addition, the Government of South Africa has considerable institutional capacity for renewing, analyzing, and enforcing safeguard policies. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The Department of Minerals and Energy will contract the Development Bank of Southern Africa (DBSA) to be the implementing agent. DBSA will administer the participating CSWH company program grants for the commercial solar water heating industry. The private sector will be responsible for implementing all the investments supported under the project. B. Disclosure Requirements Date * If the project triggers the Pest Management, Cultural Property and/or the Safety of Dams policies, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or EMP. Page 4 If in-country disclosure of any of the above documents is not expected, please explain why: N/A C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) BP 17.50 - Public Disclosure Have relevant safeguard policies documents been sent to the World Bank's Infoshop? Have relevant documents been disclosed in-country in a public place 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 responsibilities been prepared for the implementation of measures related to safeguard policies? Have costs related to safeguard policy measures been included in the project cost? Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? D. Approvals Signed and submitted by: Name Date Task Team Leader: Mr Arun P. Sanghvi 08/08/2005 Environmental Specialist: Mr Christopher James Warner 07/28/2005 Social Development Specialist Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Comments: This is a Transferred Project, therefore no need for the Reg. Safeguards Coordinator to sign (ref. email dated 7/25/05 from M. Mims.) ISDS cleared by C. Warner (email 7/28/2005.) No signature needed. Sector Manager: Mr Yusupha B. Crookes 08/08/2005 Comments: