The World Bank Kambarata-1 Hpp: Sustainable And Transformational Energy Program (P509251) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 12/30/2024 | Report No: ESRSC04690 Jan 02, 2025 Page 1 of 9 The World Bank Kambarata-1 Hpp: Sustainable And Transformational Energy Program (P509251) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P509251 Investment Project Financing (IPF) K1 STEP 2026 Operation Name Kambarata-1 HPP: Sustainable and Transformational Energy Program Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Central Asia Kyrgyz Republic, Uzbekistan EUROPE AND CENTRAL Energy & Extractives ASIA Borrower(s) Implementing Agency(ies) Estimated Appraisal Date Estimated Board Date Republic of Ministry of Energy 21-Apr-2025 26-Sep-2025 Uzbekistan, Kyrgyz Republic Estimated Concept Total Project Cost Public Disclosure Review Date 18-Dec-2024 500,000,000.00 Proposed Development Objective To strengthen regional energy-water cooperation in Central Asia. B. Is the operation 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 Activities Operation Abstract: Summary Description of Proposed Operation The Kambarata-1 HPP, currently under development, is a transformative greenfield hydropower project, emerged among the least-cost projects for expanding clean energy resources in the Kyrgyz Republic and the Central Asia region. The project is located upstream of the Naryn river in the Kyrgyz Republic. Although initially conceived during the Soviet Union era in the 1980s, construction never commenced due to a lack of financing, which is estimated at around US$4 billion. In 2014, SNC Lavalin prepared a feasibility study for the project. Upon commissioning, the project will have an installed capacity of 1,860 MW (~50% of current installed capacity in the country), a 256-meter-high dam, 5.4 billion cubic meter reservoir, and 5,600 GWh annual generation. Jan 02, 2025 Page 2 of 9 The World Bank Kambarata-1 Hpp: Sustainable And Transformational Energy Program (P509251) The project will serve as the main foundation of the country’s energy system, facilitating the decarbonization pathway and significantly improving water resource management in Central Asian region. The Kambarata-1 HPP project could generate the following significant economic, social, and environmental benefits for the Kyrgyz Republic if it is developed in a sustainable manner. It will: (i) support the government’s vision towards a green and affordable energy future; (ii) achieve energy security by resolving the country’s winter energy deficits; (iii) enable the energy security and political autonomy by avoiding reliance on imported energy, including from Russia; (iv) significantly gear power generation toward meeting winter peak demand, thus fundamentally solving the country’s seasonal energy deficits; (v) generate sustainable export revenues, thereby improving the sector financing performance; (vi) enable the diversification of the country’s electricity mix through integration of solar and wind energy at scale; (vii) strengthen the regional coordination efforts in energy and water resource management; and (viii) improve resilience to water related risks such as floods, droughts, and managed irrigation in the region. International Energy Agency’s net-zero assessment also confirms the hydropower as the backbone of global electricity security and the most cost-effective, dispatchable, and flexible low- carbon technology option to integrate solar and wind. Kamabarata-1 is a regional project in nature. With demand expected to grow by 40 percent by 2030, and triple by 2050 if carbon neutrality targets are to be met, substantial scale- up of generation capacity is needed for the region to cater to its growing needs while supporting a clean energy transition. The project, if fully funded, would be transformative as it would contribute to meeting the growing energy demand and lower costs of energy transition in the Central Asia region, enhance energy security through the further development of the Central Asia regional power market and help decarbonize the electricity grids in the Central Asia region, which are currently highly dependent on coal and gas (above 70 percent) for power generation. The Bank’s regional planning analyses confirm that Kambarata-1 would displace gas and coal fired generation in the region and thus support the region low carbon development. In addition, the Kambarata-1 project will enable large-scale deployment of Public Disclosure variable renewable energy in the Kyrgyz Republic, Kazakhstan, and Uzbekistan through its flexible and storage capacity, facilitating the decarbonization pathway in Central Asia. Furthermore, the Kamabarata-1 project would allow for better management of water resources in Central Asia across seasonal variations, making it possible to better meet the irrigation and other water needs of the downstream countries (Uzbekistan, Kazakhstan). An adequate financing and development strategy will be required from the very beginning to ensure satisfactory technical, environmental, and social outcomes and address any potential macro-fiscal issues. In this regard, upon the request from the Government, the World Bank is providing a comprehensive support to the development of the Kamabarata-1 HPP project in a manner that is fiscally, financially, technically, socially, and environmentally sustainable. The Bank’s ongoing $18.6mln Technical Assistance for the Kambarata-1 HPP will finance: (i) updating previous studies to verify the technical feasibility and economic viability; (ii) strengthening the environmental and social framework; (iii) developing a fiscally sustainable financing plan and commercial framework; and (iv) project implementation support and capacity building. The Bank is in discussion with the Governments for financing of the project in phases, and have been requested to play a lead arranger role to attract other financiers for structuring a sustainable financing package for the project. The proposed Bank support under this MPA builds upon the long-standing partnership with the Government of Kyrgyz Republic, Government of Uzbekistan, and Government of Kazakhstan as the Bank has been selected as the lead partner in designing and implementing broader energy sector and tariff reforms. The MPA will also contribute to the Bank’s ongoing initiative on strengthening the energy connectivity and trade in Central Asia, including through the establishment of a regional electricity market under a pipeline project. Phase 1 of the K1-STEP Program will consist of the following components. The division of construction activities between the phases of the MPA will be further refined as the preparation progresses. Component 1: Early works. This component will finance the early works such as diversion tunnels, dam, powerhouse and substation pre-excavation, site installation. Component 2. Project design, management and supervision. This component will finance the PMC, project implementation support, and the operationalization of Jan 02, 2025 Page 3 of 9 The World Bank Kambarata-1 Hpp: Sustainable And Transformational Energy Program (P509251) the Kambarata-1 Regional JV. (a) Subcomponent 1. Operationalization of the Kambarata-1 Regional project company. (b) Subcomponent 2. Project Management Consultancy (PMC). (c) Subcomponent 3. Project implementation support. (d) Subcomponent 4. Owner’s cost. Component 3. Implementation of social and environmental management plans. This component will finance the implementation and monitoring of E&S instruments including ESMP, Resettlement Policy Framework (RPF) and Livelihood Restoration Plan (LRP) requirements. This component will also support the implementation of a comprehensive benefit sharing plan in support of possible affected communities and national social programs. Component 4. Water management institutional capacity and regional coordination support. This component will finance a set of hydro meteorological instrumentation and consultancy services required for the Kambarata-1 HPP project, including key monitoring investments in the upper Naryn river basin to support the operation of Kambarata-1 HPP and mitigate future climate risks, and improve the water management institutional foundations within the Kambarata-1 HPP project and broader regional framework. D. Environmental and Social Overview D.1 Overview of Environmental and Social Project Settings The proposed site is in the Jalal-Abad oblast, about 14 km upriver of the existing and operating Kambarata 2 on the Naryn River. There are five dams on Naryn downriver of the site, and Atbashyn HPP located further upstream, on its tributary . Kambarata 1 HPP would create a 60km2 reservoir extending about 68km into the Karabash gorge, within a tectonic block composed of a Precambrian and Lower Palaeozoic sediments, often interlaced with Silurian granites. . The project area is sparsely populated and no legally protected areas are identified in the project sites. As per Integrated Biodiversity Assessment Tool (iBAT), minimum distance of such areas, beyond a 1km buffer, is 2.6 km from upstream edge of the reservoir (Toguz Toro Wildlife Refuge). 10 species of plants and animals that are Endangered or Public Disclosure higher risk could be present within 50km buffer around the project area. Around 10,000 people live around the project area in scattered settlements and four main rural centers (Nichke-Sai, Toluk, Sary-Kamysh, and Kazarman). A significant proportion of the population are working-age people and children. Remoteness of the area affects the quality of social infrastructure and living conditions of the local population. Their main economic activity and source of income is livestock breeding, which is highly dependent on natural pastures. The area is severely affected by emigration both within the Republic and overseas due to the lack of local job opportunities. The most common uses of water downstream countries are domestic use and irrigation. A largemajority of the population uses Kygyz as their only language of communicationand local cultural identity is based on nomadic pastoralism withshepherd families annually moving with their herds from villages to pastures—including the project’s area—where they stay for several months. Currently, a local access road from K-2 is being improved on the left bank of its reservoir and a bridge across the Naryn is being constructed. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts The Ministry of Energy (MoE) will provide guidance on overall Project implementation and coordinate with other government agencies as needed to facilitate Project implementation. It has prepared several projects with Bank support using the ESF assisted by environmental and social consultants, last ones being the KRED MPA and TA for Kambarata 1. These are in initial stages of implementation and are rated satisfactory, even as works on the ground are just beginning. With support under the on-going TA (P181086), a separate PMO for Kambarata 1 HPP is under establishment at the MoE, separating out the responsibilities for the other ongoing projects. The PMO will take the lead responsibilities on project management, including Environmental and Social aspects, procurement management, financial management. It will include an environmental specialist, a social specialist, and an OHS specialist. An international consultant team, not Jan 02, 2025 Page 4 of 9 The World Bank Kambarata-1 Hpp: Sustainable And Transformational Energy Program (P509251) involved in the design of the project is currently undertaking the Environmental and Social Impact Assessment for the project. Further, as with all High risk projects, a panel of experts on Environmental and Social issues has been mobilized for the project and already supporting the PMO . A panel of experts for dam safety, being mobilized in a calibrated manner, will also be retained throughout the design and construction phase provide high level and professional independent advice and guidance. MoE also has experience of working with ADB on Toktogul hydro power plant (HPP) rehabilitation project, EBRD on some other small hydro projects as well as KfW and other development partners. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) High A.1 Environmental Risk Rating High For such a large HPP, environmental risks and potential impacts would include permanent inundation of the reservoir area and changes in landscapes; alteration of flow in some stretches of the Naryn River, its water quality, and hydromorphology, including sediment transport; and changes in terrestrial and aquatic biodiversity in ecosystems dependent on it. Construction of Kambarata 1 HPP will involve significant civil works, including for ancillary facilities like access roads and/or bridges, transmission infrastructure, and related facilities, which are expected to have significant adverse and long-term impacts on the biophysical environment, if not managed well. Given the anticipated scale of the works, air and noise pollution and vibration impacts from blasting and movement of heavy equipment and waste disposal issues during construction are anticipated. Occupational and community health and safety risks Public Disclosure and impacts are also expected to be adverse and significant considering the large number of workers to be deployed at the site during construction; the need for substantial movement of material and equipment during construction, and substantial security measures to protect the large site. The works and inundation of the reservoir area are expected to have potential adverse risks and impacts on both terrestrial and aquatic ecosystems and biodiversity, including potential cumulative impacts and transboundary impacts. The variety of impacts of identified project activities, which include irreversible impacts as well as those that would alter the natural flows and terrain significantly, augmented further by the need for more robust management due to the complexities associated with project impacts and implementation, even with the current familiarity and experience of the Borrower with ESF requirements, have led to environmental risk being rated as High. Substantial A.2 Social Risk Rating The envisioned social risks of the project refer to limited stakeholder engagement, project information disclosure, and the need for an effective grievance mechanism for handling complaints. Labor influx is expected to be significant for around 10 years, with a peak of 3,000 workers, creating challenges for this low-density area. Also, even if the initial social screening has shown that there are only a few permanent human settlements in the dam site and impounded area, every year, shepherd families move with their herds from villages to the pastures located in the project area, where they stay for several months –in some areas of the valley from April to October, for spring and autumn pastures; in others, from October to April, for winter pastures-. Because of it, the project would likely cause the displacement of some structures used for seasonal animal husbandry and temporary residence, limit the use and access to some seasonal pastures, potential economic displacement due to more limited of access to pasturelands for communities living around the project area impacting local livelihoods, or the removal and changes of some local Jan 02, 2025 Page 5 of 9 The World Bank Kambarata-1 Hpp: Sustainable And Transformational Energy Program (P509251) infrastructures. Additional concerns coming from local stakeholders refer to the restoration of livelihoods (mainly animal husbandry, but also others) and opportunities for benefit-sharing, including local job creation. The project would require attention to labor management aspects, including working terms and conditions, OHS, and safe and effective work camps; plus community health and safety issues, gender-based violence, SEA/SH, transmission of disease and security issues. The project’s ancillary facilities and associated facilities are expected to traverse land already owned by the Government. The project area has had human presence for millennia, with the presence of cemeteries, holy sites, etc. Other risks may include impacts on livelihoods downstream, in particular, related to domestic use, irrigation, and fishing. B. Relevance of Standards and Policies at Concept Stage B.1 Relevance of Environmental and Social Standards ESS1 - Assessment and Management of Environmental and Social Risks and Impacts Relevant The project poses significant environmental and social risks, due to permanent inundation of the reservoir area, alteration of river flow and water quality, on land and water based biodiversity, pasture use restriction, and labor influx. Additionally, air and noise pollution, waste disposal, and occupational and community health and safety risks are likely. Other impacts include on livelihoods downstream, such as water supply, irrigation, and fishing. An Environmental and Social Impact Assessment (ESIA), also covering associated facilities, is being undertaken. Its Screening and scoping report is currently under review. The ESIA will include focused assessments and plans covering, inter alia, Labor Influx and Community and Labor Safety, Pasture Management and Livelihood Restoration, Public Disclosure Cumulative Impacts, Biodiversity management, including Ecosystem Services, Cultural Heritage, etc. OP7.50 is applicable as the Project will be located on the Syr Darya River, an international waterway. ESS10 - Stakeholder Engagement and Information Disclosure Relevant The early engagement and active participation of a wide range of stakeholders (local, national, and regional; public, private, and CSOs) will be key to the Project's success. The Project's TA has financed the preparation of a Stakeholder Engagement Plan (SEP), which will summarize the consultation process and the public disclosure strategy to be carried out during the preparation phase. Also, the SEP will define a consultation, information sharing, and grievance management strategy during the Project's implementation phase. Early consultations with affected and interested local and national-level stakeholders have shown their high expectations about mitigating potential negative socio- environmental impacts and enhancing the Project's development benefits. The SEP will also include a GRM, established by the Project's effective date, and provisions to address labor-related complaints and SEA/SH cases. Consultations will be also undertaken with key stakeholders in Riparian Countries. ESS2 - Labor and Working Conditions Relevant The construction phase is expected to have a substantial number of workers involved in the construction and installation of equipment. Even if previous estimates reported a significant labor influx for ten years, with a peak of 3,000 workers, the actual number cannot be determined at this stage. It will be further estimated as part of the FS and design studies. Therefore, the Project's TA is financing the preparation of the Project's Labor Management Procedures (LMP), as well as an Occupational Health and Safety Plan to meet the requirements of the national labor Jan 02, 2025 Page 6 of 9 The World Bank Kambarata-1 Hpp: Sustainable And Transformational Energy Program (P509251) law, the ESS 2 and the WBG's Environmental Health and Safety Guidelines. The LMP will follow World Bank Group guidelines in establishing and operating worker accommodations with the necessary standards of hygiene and safety. Also, the LMP will stipulate safe working conditions and procedures (including OHS and measures to address SEA/SH risks), workforce protection measures, and a labor grievance mechanism. ESS3 - Resource Efficiency and Pollution Prevention and Management Relevant The construction of Kambarata 1 HPP , will generate large volume of spoils/waste for disposal. It will also require a large volume of resources and construction materials and will generate air and water pollutants during construction. Key risks include air, water pollution, improper handling of hazardous materials, and hazardous waste. With Roller Compacted Cement being the chosen dam type, embedded emissions in the dam body, as well as transport of cement will need to be accounted for. GHG analysis will also need to be undertaken for material use and reservoir. All such risks and impacts relevant to ESS 3 will be assessed in the ESIA and relevant measures and plans will be developed to address these as part of the project. The ESIA will include assessment of environmental flows (e-flows) using the IFC Good Practice Handbook on Environmental Flows for Hydropower Projects. ESS4 - Community Health and Safety Relevant During construction, the main risks relate to the impact of labor influx and potential GBV/SEA/SH in low-density rural areas. Also, construction activities can introduce or exacerbate traffic hazards. To address such risks and impacts, the ESIA and ESMP will also undertake an assessment and introduce mitigation measures to address work-related health risks; works and road safety; excessive noise and dust, site safety and access restrictions; and GBV/SEA/SH. A Labor Public Disclosure Influx Management will be prepared to cover aspects of labor camps, relations with the community, safety and workers welfare and proper living conditions, as well as security management. The already mobilized Dam Safety Panel will review and advise on dam safety and other critical aspects of this new high dam in line with requirements of Annex 1 of ESS4. E&S Panel of Experts is also established and providing critical review and inputs into the project preparation. ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant There are only a few permanent human settlements in the dam site and impounded area. However, every year, shepherd families move with their herds from villages to the pastures located in the project area, where they stay for several months. Because of it, the Project would likely cause the displacement of structures used for seasonal animal husbandry, limit the use and access to some seasonal pastures, potential economic displacement due to more limited of access to pasturelands, remove and change some local infrastructures, or livelihood impacts. The project’s ancillary and associated facilities are expected to traverse land owned by the Government. To address ESS5-related impacts, before the Bank's appraisal, the Project will prepare an RPF, including provisions for livelihood restoration activities. In addition to screening the scope of land acquisition and livelihood impacts and preparing a budget estimate. After appraisal, a site-specific RP will be prepared before implementation. ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources HPP construction and operation can increase risk to biodiversity by water quality deterioration, changes to riparian ecosystems, including hindrance to movement paths, changed flow regime, increased pressure on natural resources Jan 02, 2025 Page 7 of 9 The World Bank Kambarata-1 Hpp: Sustainable And Transformational Energy Program (P509251) and induced development. IBAT analysis indicates potential presence of one fish (sturgeon) and one bird (lapwing) species that are Critically Endangered while and eight are Endangered. Presence of Snow Leopard will be investigated in the project area following recent reports. Extraction of construction materials, from uncontrolled quarries along riverside may also have adverse impact on biodiversity if not managed well. Sites-specific Biodiversity Assessment is being undertaken as part of the ESIA being supported under the TA by qualified Biodiversity Specialists. A Biodiversity Management Plan will be prepared, if required, to inform design, and bid documents. If needed, potential of biodiversity offsets will also be assessed. ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities There are no people in the project area that the meet the criteria of this standard. ESS8 - Cultural Heritage Relevant The project area has had human presence for millennia, with cemeteries, animal burials, cultural heritage, holy sites, and Mazars, so the project's ESIA/ESMP currently under preparation will include a Cultural Heritage Management Plan. It will also include a chance finds procedure to address potential risks and impacts on any tangible and intangible cultural heritage are being studied and explored as part of the consultations to confirm whether these are adversely impacted due to inundation, access restriction and/or resettlement. ESS9 - Financial Intermediaries Not Currently Relevant Public Disclosure This is not a FI operation. B.2 Legal Operational Policies that Apply OP 7.50 Operations on International Waterways Yes OP 7.60 Operations in Disputed Areas No B.3 Other Salient Features Use of Borrower Framework No Use of Common Approach TBD While ADB, AIIB, EIB, IsDB, Islamic Funds, OPEC Fund and other development partners have joined the donor coordination committee and may support the construction of Kambarata 1 through financing of works and equipment, discussions have not yet been initiated on this aspect. Jan 02, 2025 Page 8 of 9 The World Bank Kambarata-1 Hpp: Sustainable And Transformational Energy Program (P509251) C. Overview of Required Environmental and Social Risk Management Activities C.1 What Borrower environmental and social analyses, instruments, plans and/or frameworks are planned or required by Appraisal? Draft ESIA and /ESMP (including several issue specific plans), a RPF, (including provisions for livelihood restoration activities), an LMP, a SEP -including a project's GRM, to be prepared, consulted, and disclosed prior Bank's Appraisal. After the Bank's Appraisal, a site-specific RP will be prepared, consulted, and disclosed before the project's implementation. The ESCP will be ready with the draft ESIA, RPF, LMP, and SEP at the time of Appraisal. III. CONTACT POINT World Bank Task Team Leader: Maksudjon Safarov Title: Senior Energy Specialist Email: msafarov@worldbank.org TTL Contact: Aleix Serrat Capdevila Job Title: Senior Water Resources Specialist Email: aserratcapdevila@worldbank.org Public Disclosure IV. FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects V. APPROVAL Task Team Leader(s): Maksudjon Safarov, Aleix Serrat Capdevila ADM Environmental Specialist: Gaurav Dilipkumar Joshi ADM Social Specialist: David Jorge Baringo Ezquerra Jan 02, 2025 Page 9 of 9