The World Bank Punjab Clean Air Program (P508222) Appraisal Environmental and Social Review Summary Appraisal Stage (ESRS Appraisal Stage) Public Disclosure Date Prepared/Updated: 02/20/2025 | Report No: ESRSA04024 Feb 23, 2025 Page 1 of 9 The World Bank Punjab Clean Air Program (P508222) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P508222 Program-for-Results Financing (PforR) P-CAP 2025 Operation Name Punjab Clean Air Program Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Pakistan Pakistan SOUTH ASIA Transport Borrower(s) Implementing Agency(ies) Estimated Appraisal Date Estimated Board Date Islamic Republic of Transport and Masstransit 18-Feb-2025 31-Mar-2025 Pakistan Department, Government of Punjab, Planning and Development Board, Government of Punjab, Agriculture Department, Government of Punjab, Public Disclosure Industries Department, Government of Punjab Estimated Decision Total Project Cost Review Date 15-Feb-2025 621,000,000.00 Proposed Development Objective To strengthen air quality management and reduce emissions from targeted sectors in Greater Lahore 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 The Punjab Clean Air Program aims to strengthen air quality management governance and reduce PM2.5 concentration across targeted sectors affecting Greater Lahore, Punjab province, Pakistan. The Program will be organized along three results areas - air quality management governance and awareness raising, transport sector abatement measures, and Feb 23, 2025 Page 2 of 9 The World Bank Punjab Clean Air Program (P508222) agriculture and industrial sector abatement measures. The project will strengthen air quality management governance across sectors and support a public awareness campaign on air quality issues. Sectoral abatement measures will focus on transport, agriculture and industries, and will include the expansion of public transport through electric buses, expanding electric vehicle adoption, retiring aged polluting vehicles and expanding access to agricultural technologies. The IPF component will support assessments on transport to support Program implementation, capacity building activities for the transport sector, as well as assessments on industries, transport and agriculture to inform subsequent operations in the series of projects supporting the clean air agenda. D. Environmental and Social Overview D.1 Overview of Environmental and Social Project Settings The project is located in the province of Punjab with most project activities in Lahore District. Major sectors responsible for air pollution in Punjab include industry (industrial boilers operating on solid fuel, typically coal, without air pollution control technologies, power plants, and brick kilns and steel melting and re-rolling mills); transport (trucks and buses, two- and three-wheelers, and cars are the main contributors to PM2.5); agriculture (farmers burn straw and stubble on fields with citizen in cities such as Lahore affected by resulting smoke drifts); and domestic cooking (open fires or cookstoves). No high-biodiversity settings have been identified within the program areas and the biodiversity hotspots are not as prominent as in some other regions of the country, but they still hold important ecological and conservation value. Female uptake of project-supported infrastructure and services is likely to lag men due to social norms that constrain women’s agency, and lack of institutional capacity to design and deliver gender-inclusive transport infrastructure and Public Disclosure services. Women’s exposure to SEA/SH and GBV in public is high and closely linked to mobility. In Lahore, 82% of women experience harassment at bus stops and 90% report incidents on buses. Women are also significantly underrepresented in the transport sector in Pakistan, comprising only 30,200 employees out of a total workforce of 4.79 million in 2022. The Punjab Mass Transit Authority's workforce consists of approximately 90.62% men and only 9.38% women and there are no women employed in technical and managerial positions at the Punjab Transport Company, highlighting the broader gender disparity in the sector. In agriculture, women play a crucial yet often unrecognized role, contributing up to 70% of farm labor in Pakistan but remaining largely excluded from decision-making and resources. Despite their involvement in fieldwork, post-harvest processing, and residue management, they have limited access to sustainable practices. Per the 1998 census, most persons with disabilities in Pakistan reside in Punjab (around 56%). Without access to the physical environment, transportation, information and communications technologies, digital platforms and systems, and other facilities and services open or provided to the public, persons with disabilities are often excluded from equal opportunities to participate in their societies. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts The Government of Punjab has established a P-CAP Program Coordination and Monitoring Unit (PCAP-CMU) under the Planning and Development (P&D) Board. The PCMU will be responsible for overall Program coordination across the different implementing agencies responsible for respective DLIs and results areas, as well as monitoring and reporting of Program progress. The PCAP-CMU will be headed by a Program Coordinator. A Program Steering Committee (PSC) will oversee Program implementation and provide strategic guidance to the PCMU and implementing agencies. The PSC will be led by Chairman P&D, represented by Secretaries of Transport, Environmental Protection and Climate Change Feb 23, 2025 Page 3 of 9 The World Bank Punjab Clean Air Program (P508222) Department (EPCCD), Agriculture, Industry and Energy. Program implementation units (PIUs) will be established in the key implementing agencies, viz. the EPCCD, Transport and Mass Transit Department (T&MD), and Agriculture Department. Other agencies under these departments will carry out Program activities or assessments, viz. Punjab Masstransit Authority (PMA), the Punjab Transport Company (PTC), Environmental Protection Agency (EPA), and the Energy and Industries, Commerce, Investment & Skills Departments who will contribute to Program implementation using their existing staff. The Borrower has experience in managing ES risks in the WB-financed Punjab Green Development Program (PGDP) where implementing agencies included T&MD, Environment Protection and Climate Change Department (EPCCD), and Punjab Energy Efficiency and Conservation Agency (PEECA), and initiatives such as the 2023 Clean Air Policy and 2024 Smog Action Plan. Implementation performance on ES Systems was rated Moderately Satisfactory in PGDP. EPCCD has dedicated environment and social specialists under PGDP. T&MD has experience under PGDP in Vehicle Inspection and Certification System and standardizing three-wheeler operations but will need capacity building to implement ESS related IPF. T&MD does not have any dedicated environment and social specialists. Experience from PGDP reveals challenges in enforcement, monitoring, and institutional coordination due to limited resources in implementing agencies. The agriculture component of the PforR will be implemented by the Field Wing of the Agriculture Department. The Field Wing does not have experience of WB projects and will need capacity building on managing ES risks as per WB ESF if any IPF supported studies are identified during implementation. ES staff in the Agriculture Department under the World Bank financed projects can be utilized to build the capacity of the Field Wing of the Agriculture Department. The TA activities are intended to build the capacity of program implementation agencies to manage environmental, Public Disclosure health and safety risks. Measures and actions have been incorporated in the ESCP based on a detailed institutional capacity assessment. This includes the hiring or appointment of an environment specialist and a social and gender specialist to the PCAP-CMU and the T&MD PIU, which will be conducting the bulk of the TA studies under the IPF. In addition, the ESCP includes measures on the appointment of ES focal points at other agencies responsible for project activities including PMA, PTC, EPA, EPCCD, Agriculture Department, PEECA, and Industries, Commerce, Investment & Skills Departments as required. Training will be for relevant PCAP-CMU and PIU staff at the start of project implementation and annually thereafter on the World Bank ESF, stakeholder engagement and grievance mechanism (GM), Gender Based Violence and Sexual Exploitation and Abuse/Sexual Harassment (SEA/SH), Labor Management Procedures, community and occupational health and safety aspects especially related to T&MD activities, and e-waste management. II. SUMMARY OF ENVIRONMENTAL AND SOCIAL (ES) RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Substantial A.1 Environmental Risk Rating Substantial The Environmental Risk Rating is retained as Substantial. The environmental impacts arise from the provision of TA through feasibility and technical studies, capacity building, policy and research for transport and agriculture sector activities. The TA itself will not involve the procurement of goods, services, or civil works. However, the nature of TA can lead to significant downstream impacts during the implementation of the program for results (PforR) activities, the design of which will be informed by the TA. Th associated downstream risks are sumarized as follows: 1. Within 5- Feb 23, 2025 Page 4 of 9 The World Bank Punjab Clean Air Program (P508222) 10 years, the batteries of e-buses and e-2/3 wheelers will require replacement, raising concerns about their disposal and recycling. To address these challenges, the IPF component incorporates TA for the development of battery waste management rules (along with SOPs for e-waste management) and the identification of strategies for ecosystem development. This approach will also tackle the risks associated with informal recycling practices in Punjab, which are environmentally hazardous and poorly regulated, potentially causing significant environmental and health risks due to the release of heavy metals and toxic materials. 2. The buyback scheme will produce stock of old/polluted vehicles in the province whose recycling/disposal will be an environmental challenge. This challenge would need to be addressed by formulating and implementing environmentally sound recycling/disposal strategies in the province. 3. Electric 2/3 wheelers adoption will generate GHG emissions indirectly from the grids (grid supply is 60% based on fossil fuels) due to battery charging through grid electricity. 4. Feasibility/technical studies for super-seeders procurement will incorporate design considerations for resource efficiency and awareness raising of beneficiaries, to ensure the associated risks can be properly addressed during downstream implementation of activity. These TA activities entail substantial environmental risks which require complex mitigation measures, as well as technological and regulatory solutions, to adequately address them. With relation to the institutional capacity, the lessons learnt from the implementation of PGDP for ES Management have been considered and included in both the Environmental and Social Commitment Plan (ESCP) and ESSA. Moderate A.2 Social Risk Rating The Social Risk Rating is Moderate due to the following factors: (i) lacking attention to livelihood impacts and exclusion of vulnerable groups (e.g., low-income communities, women, persons with disability, youth, and elderly) in stakeholder consultations and studies which inform the design of Program activities (e.g., e-bus deployment, vehicle Public Disclosure buyback schemes and electric two- and three-wheeler adoption schemes); and (ii) low institutional capacity for management of social risks in line with the ESF. Poorly designed technical and feasibility studies may result in downstream impacts such as the loss of livelihoods due to tightened emission standards and retirement of vehicles, and exclusion of vulnerable groups from project benefits. The project will ensure that terms of reference for such studies incorporate screening for accessibility and safety of services for disabled persons and female users and aspects of Just Transition, for example, by examining the impacts of introducing e-buses on bus drivers and poor and vulnerable groups. B. Environment and Social Standards (ESS) that Apply to the Activities Being Considered B.1 Relevance of Environmental and Social Standards ESS1 - Assessment and Management of Environmental and Social Risks and Impacts Relevant The IPF component comprises TA activities which will not involve the procurement of goods, services, or civil works. However, the implementation of TA activties can lead to significant downstream impacts during the implementation of the program for results (PforR) activities, the design of which will be informed by the TA. The detailed assessments of the downstream ES impacts have been outlined in a draft ESSA under the PforR. Downstream impacts will include: i) the release of heavy metals and toxic materials in the environment due to improper recycling/disposal of waste lithium ion batteries, ii) generation of stock of old/polluted vehicles in the province whose recycling/disposal will be an environmental challenge, and iii) adoption of e-2/3 wheelers will generate GHG emissions indirectly from the grids (grid supply is based on fossil fuels) due to battery charging through grid electricity. Bus drivers and poor and Feb 23, 2025 Page 5 of 9 The World Bank Punjab Clean Air Program (P508222) vulnerable groups, especially disabled person and women are at risk of being excluded from consultations and studies, and consequently the design of vehicle buy-back schemes, electric two- and three-wheeler adoption programs. Specifically, there is a risk of lack of access for women and disabled persons to public transport supported under the PforR, which can be mitigated by incorporating accessibility provision into the design under the TA assessments. Similarly, access to financing for 2 and 3 wheelers by lower income individuals, students and women will be limited due to stringent banking requirements. Design to incentivize financing opportunities for women and students may be covered under the relevant TA assessments. There may be workplace grievances over recruitment, harassment, and discrimination. ToRs for TA activities will include screening for ES risks, following which appropriate E&S instruments will be prepared accordingly including EIA/IEE, ESMP and SOPs for e-waste management. The Borrower and the Bank has also agreed upon a set of E&S actions as delineated in the ESCP, which will be an integral part of the legal documents. ESS10 - Stakeholder Engagement and Information Disclosure Relevant The Stakeholder Engagement Plan (SEP) is being developed to ensure the project is designed with input from all stakeholders, especially vulnerable groups, and to guarantee equitable access to program benefits. During implementation, a Program-wide SEP may be created based on the findings of the Environmental and Social Systems Assessment (ESSA). Aligning the public communications plan under the PforR with the SEP can help achieve Program outcomes and manage ES risks effectively. The SEP will identify key stakeholders and create a strategy to engage with them, including government bodies, civil society organizations (CSO), industry players, local businesses, transport sector workers, the poor, women, youth, informal sector workers, persons with disabilities, and the elderly. It will also facilitate citizen-government information exchanges to build support for project interventions and mitigate Public Disclosure misperceptions about project impacts and benefits. Additionally, the SEP will include a Grievance Mechanism (GM), providing various channels for feedback, building on existing GMs, and addressing SEA/SH related complaints. The government of Punjab and implementing agencies have functional GM systems at provincial and departmental levels, which were assessed to be operational during the ESSA preparation and can be used by the Project with additional measures to improve accessibility for vulnerable groups and ensure all relevant grievances are collated, monitored, and reported. Existing GM systems include the province-wide Punjab Portal, monitored by the Chief Minister’s office, and specific GMs for the T&MD and EPCCD. ESS2 - Labor and Working Conditions Relevant The project involves direct workers, including government officials and consultants, and contracted workers, including staff of consulting firms who will be hired to conduct the TA assessment studies. Potential risks include grievances over recruitment processes and selection, workplace harassment, and discrimination against vulnerable groups. The ESCP will include the following LMP provisions which will be defined in the Project Operations Manual: (i) define measures to avoid discrimination; (ii) require the establishment of a worker’s grievance mechanism; and (iii) include a worker’s Code of Conduct. ESS3 - Resource Efficiency and Pollution Prevention and Management Relevant ESS3 is relevant to the IPF component of the program, and the TORs of the TA will account for downstream risks associated with resource use (energy/fuel consumption) for designing a buy-back schemes for polluting vehicles, procuring super-seeders and during monetizing GHG emissions reductions from the shift to cleaner vehicles in the Feb 23, 2025 Page 6 of 9 The World Bank Punjab Clean Air Program (P508222) form of carbon credits. Resource efficiency and pollution control are critical concerns. The E&S screening of the studies will address environmental issues related to pollution generation and resource use and will recommend the development of relevant E&S instruments as needed, in accordance with Environmental Health and Safety Guidelines (EHSGs) and Good Internation Industrial Practices (GIIP), whilst taking into consideration the local context (the implementation is under PforR and the ESSA utilized country systems for addressing risks). A well-designed buy-back scheme will facilitate the safe disposal and recycling of vehicles, thereby minimizing hazardous waste and reducing environmental impacts. The implementation of battery waste management rules (SOPs) will reduce environmental hazards and improve health and safety of the associated workers. ESS4 - Community Health and Safety Not Currently Relevant ESS4 is not relevant. However, the improper recycling and disposal of waste batteries and polluted vehicles will pose community health and safety risks. Under the TA, the environmentally sound recycling practices will not only protect environment, workers but also the communities. Additionally, incorporation of sound Life and Fire Safety (L&FA) elements in the feasibility and technical studies for the bus charging stations will be ensured. These risks will be addressed under ESS1 and will be appropriately considered in the TORs for the TA. ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant The Project comprises TA activities which do not entail land acquisition. ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Not Currently Relevant Resources Public Disclosure ESS6 is not relevant. As mentioned earlier, the TA does not pose direct risks; however, the studies related to disposal of polluting vehicles—may indirectly affect natural habitats. Improper disposal of vehicle waste, hazardous materials (such as used lithium batteries) could result in pollution that impacts local biodiversity. These risks will be addressed under ESS1 and will be appropriately considered in the TORs for the TA. Additionally, the exclusion criteria under PforR explicity includes screening out of activites avoid in ecologically sensitive areas or posing any significant ecological impacts. ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities There are no recognized indigenous people in the Province of Punjab. ESS8 - Cultural Heritage Not Currently Relevant This standard is not relevant to the TA activities financed under this project. ESS9 - Financial Intermediaries Not Currently Relevant The project does not involve financial intermediaries. B.2 Legal Operational Policies that Apply Feb 23, 2025 Page 7 of 9 The World Bank Punjab Clean Air Program (P508222) OP 7.50 Operations on International Waterways No OP 7.60 Operations in Disputed Areas No B.3 Other Salient Features Use of Borrower Framework No Borrowers Framework will not be utilized for the IPF component of the Program. Use of Common Approach No Not applicable 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 implementation? A draft Environmental and Social Commitment Plan (ESCP) and a draft of Stakeholder Engagement Plan (SEP) are being prepared for the IPF component of the Program. Both documents will be finalized and disclosed during appraisal. Key requirements from the borrower during project implementation include: implementing the SEP to ensure continuous communication and involvement of stakeholders, operationalizing an accessible grievance mechanism to address concerns and complaints promptly, preparing SOPs for e-waste management, conducting E&S screening with proceeding E&S instruments, proportional to the nature and risks of the proposed activities, including Initial Public Disclosure Environmental Examination (IEE)/Environmental Impact Assessment (EIA), as mandated in the local Environmental Protection Act and associated regulations, Environmental and Social Management Plan (ESMP) requirements in the design of bus depots, implementing labor management-related measures and ensuring a worker grievance mechanism, hiring or appointing environmental and social staff, facilitating environmental and social capacity building for relevant agency staff, and providing quarterly reports to the Bank. III. CONTACT POINT World Bank Task Team Leader: Shyam Srinivasan Title: Transport Specialist Email: shyamsrinivasan@worldbank.org TTL Contact: Shafick Hoossein Job Title: Senior Environmental Specialist Email: shoossein@worldbank.org IV. FOR MORE INFORMATION CONTACT Feb 23, 2025 Page 8 of 9 The World Bank Punjab Clean Air Program (P508222) 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): Shyam Srinivasan, Shafick Hoossein ADM Environmental Specialist: Nida Asif ADM Social Specialist: Kamakshi Nadisha Mubarak Public Disclosure Feb 23, 2025 Page 9 of 9