The World Bank Energy Sector Security Enhancement Project (P181811) Concept Environmental and Social Review Summary Concept Stage ( ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 02/18/2025 | Report No: ESRSC04775 Feb 19, 2025 Page 1 of 8 The World Bank Energy Sector Security Enhancement Project (P181811) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P181811 Investment Project Financing (IPF) ESSEP 2026 Operation Name Energy Sector Security Enhancement Project Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Bangladesh Bangladesh SOUTH ASIA Energy & Extractives Borrower(s) Implementing Agency(ies) Estimated Board Date The Government of Petrobangla 15-Jul-2025 Bangladesh Estimated Concept Total Project Cost Review Date Public Disclosure 06-Feb-2025 2,100,000,000.00 Proposed Development Objective The project development objectives are to enhance gas supply security by facilitating access to cost-effective financing, and strengthen the institutional capacity of sector agencies 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 proposed operation involves a revolving working capital facility (“Facility”) backed by IDA-SUW payment guarantee to mobilize commercial financing and address payment security and immediate liquidity needs in the sector, coupled with technical assistance to support the analytical work for short- and long-term gas sector planning, reforms and institutional capacity building. Feb 19, 2025 Page 2 of 8 The World Bank Energy Sector Security Enhancement Project (P181811) D. Environmental and Social Overview D.1 Overview of Environmental and Social Project Settings The project provides a financial mechanism to ensure timely payments for Liquefied Natural Gas (LNG) imports. LNG, transported via specialized carriers, is a critical energy resource for the country, supporting household, industrial, and public sector energy demands. The project will alleviate the burden on the government in managing the country’s ongoing energy crisis. The operation, facilitating the procurement of LNG, does not include any physical intervention. The Project is not anticipated to have any material environmental and social impacts. The project operates within the broader framework of national energy security. The financial guarantee indirectly supports stable energy supplies, contributing to economic resilience and social well-being. Communities benefit from improved energy reliability without experiencing direct disruptions, as no construction, displacement, or development is involved with the project. Moderate risks are associated with the suppliers’ capacity to adequately manage LNG transportation, handling and storage. The adequacy of Petrobangla’s E&S Management System and E&S aspects of the procurement practices and their ability to assess supplier’s E&S Management practices, health and safety records (OHS), life and fire safety and emergency response procedures will be reviewed during appraisal. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts Petrobangla, the state-owned entity responsible for managing natural gas resources, will oversee the implementation of this project. Petrobangla is familiar with Bank ESF and currently coordinating Gas Sector Efficiency Improvement and Decarbonization Project (P179009). Petrobangla, since its inception in 1985, has been operating in the oil and gas Public Disclosure industry, interfacing with international oil and gas players and international financial institutions and has strengthened through the years its technical capabilities and implementation capacity. In addition to its ESMS, Petrobangla relies on the operators managing its LNG facilities to oversight Occupational Health Safety (OHS), Community HS, Fire and explosion hazards, and other safety issues during LNG transport, storage & re-gasification operations. During project preparation, an assessment of Petrobangla procurement practices in relation to E&S aspects will be carried out. If any gaps are identified, a draft Environmental and Social Commitment Plan (ESCP) will address these gaps to strengthen the institutional capacity to manage E&S risks and ensure the ESMS alignment with the WB ESF requirement and with international best practices. By appraisal, the ESCP will be agreed between the Petrobangla and WBG (or Lender), which will be formally negotiated as part of the legal agreement in the project negotiations. This plan will outline the specific measures and actions that must be undertaken by the borrower to manage and mitigate environmental and social risks and impacts throughout the project's lifecycle, within the stipulated timeframe for each specific action. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) Moderate A.1 Environmental Risk Rating Moderate The environmental risk rating is proposed as “Moderate”. This is based on the nature of operational activities; the project is a guarantee that facilitates liquidity to support purchase of LNG and TA to help with institutional strengthening. No physical works will occur under the project. However, the project has indirect environmental and social risks associated with the suppliers’ capacity to transport, handle and store LNG. The E&S risks associated with Feb 19, 2025 Page 3 of 8 The World Bank Energy Sector Security Enhancement Project (P181811) transportation, handling and storage of LNG include occupational health and safety (OHS) and community health and safety risks (including the potential for spills or accidents), air emissions and noise. These risks are managed through Petrobangla’s broad ESMS and E&S aspects of the procurement practices for the natural gas in terms of screening of providers’ environmental, social, health and safety capacity (EHS), OHS records, life and fire safety and emergency response procedures, and labor practices. Petrobangla imports LNG from various suppliers under contracts that are signed for the supply of LNG on a Delivered Ex Ship (DES) basis and has BOOT (build own operate and transfer) contracts with two private LNG terminal operators (Excelerate and Summit) for operating two floating storage & regasification units (FSRUs). In this case LNG suppliers are responsible to ensure the proper conditions for LNG transportation. Petrobangla has its own “LNG import policy”. As per this policy, internationally recognized codes, standards and applicable laws as well as regulations and acts of Bangladesh shall be followed in all relevant areas. Compliance with the Good International Industry Practice (GIIP) regulations, including the WBG EHS Guidelines for LNG Facilities (April 2017) is essential for obtaining effective Merchant Marine Insurance for LNG Carriers. Moderate A.2 Social Risk Rating The social risk of this operation is assessed to be “Moderate.” The project will not involve any construction or any physical facilities enhancement. Hence the project will not require any land acquisition and is not going to cause any economic or physical displacement. The project will engage with different international and domestic stakeholders. Effective stakeholder engagement strategy will be essential for successful project implementation. Downstream E&S risks and impacts associated with Component 2 will be assessed consistent with the ESF during project preparation . Low A.3 Sexual Exploitation and Abuse/Sexual Harassment (SEA/SH) Risk Rating Public Disclosure Based on the screening tool, the SEA /SH risk is rated ‘low’. There will be no physical construction, expansion or rehabilitation of physical infrastructure. Review of the E&S aspects of the procurement practices will include also the review of GBV/SH risk practices of the providers. 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 ESS1 is relevant to this project due to the potential indirect environmental and social risks associated with project activities. The project will not involve construction, land acquisition, or new infrastructure. An assessment of Petrobangla and its suppliers ESMS, in particular life & fire safety and emergency response, and E&S aspects of the procurement practices, including eligibility screening criteria for Petrobangla LNG gas suppliers will be conducted to review alignment with the ESF. During the ESMS assessment and strengthening, the team will conduct comprehensive evaluation of both institutional capacity and regulatory frameworks to effectively manage risks of Greenhouse Gas (GHG) emissions, carbon dioxide (CO₂) and methane (CH₄) leakage during transportation and storage. By appraisal, an ESCP will be agreed between the Petrobangla and WBG. The ESCP will outline the actions to be undertaken by the borrower to manage E&S risks and impacts throughout the project's lifecycle. ESS10 - Stakeholder Engagement and Information Disclosure Relevant Feb 19, 2025 Page 4 of 8 The World Bank Energy Sector Security Enhancement Project (P181811) Stakeholder engagement is important for effective project implementation. A stakeholder engagement plan will be prepared prior to the Project Appraisal. It will map all key stakeholders and modalities of engaging with them. Petrobangla has an existing feedback mechanism. It will be carefully reviewed during project preparation and if necessary, its operation will be strengthened during project implementation. ESS2 - Labor and Working Conditions Relevant ESS2 is relevant to the project as it ensures the fair treatment, safety, and well-being of all workers involved in project-related activities. While the project primarily involves financial guarantees for LNG imports and does not include construction or large-scale labor-intensive operations, labor-related risks, particularly Occupational Health and Safety (OHS) concerns, must be addressed comprehensively. Potential OHS risks include hazards associated with LNG operations, such as gas leaks, explosions, and fires during site visits to LNG facilities or ports where LNG is stored and transferred. An ESMS assessment will be carried out during project preparation. In case it is demonstrated that there are gaps related to labor management, including OHS and ways worker’s grievances are managed, child and forced labor, and non-discrimination, a stand-alone Labor Management Plan (LMP), including the Code of Conduct, will be prepared. Otherwise, elements of LMP will be reflected in the ESCP. ESS3 - Resource Efficiency and Pollution Prevention and Management Relevant ESS3 is applicable to this project due to the environmental risks indirectly associated with the transportation and handling of Liquefied Natural Gas (LNG). Although it does not involve physical construction, land acquisition, or direct infrastructure development, the operations it supports involve potential environmental impacts that need to be Public Disclosure mitigated. As indicated in ESS1, the ESMS review will focus also on both institutional capacity and regulatory frameworks to effectively manage the likely risks of Greenhouse Gas (GHG) emissions during transportation, and storage. The E&S aspects of the procurement practices of Petrobangla will be reviewed to verify that providers selected have the capacity to manage transport and handling of LNG in line with the ESF, Good International Industry Practices (GIIP), World Bank’s Environmental, Health, and Safety (EHS) Guidelines for LNG facilities. ESS4 - Community Health and Safety Relevant The review of the E&S aspects of Petrobangla procurement practices will focus also on the screening of LNG providers and assessment of their practices in term of CHS in relation to transport and handling of LNG. The process will need to be managed under relevant provisions in the WB ESF, World Health Organization (WHO) standards, national circulars, E&S Good International Industry Practices (GIIP), WBG Environmental, Health, and Safety Guidelines. ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Not Currently Relevant ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Not Currently Relevant Resources ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities Feb 19, 2025 Page 5 of 8 The World Bank Energy Sector Security Enhancement Project (P181811) ESS8 - Cultural Heritage Not Currently Relevant ESS9 - Financial Intermediaries Not Currently Relevant B.2 Legal Operational Policies that Apply 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 Use of Common Approach No Public Disclosure B.4 Summary of Assessment of Environmental and Social Risks and Impacts The project involves a financial guarantee for LNG imports, supporting the government’s energy security objectives. The project does not include physical activities such as construction, infrastructure development, or land acquisition. Main risks are associated to proper implementation of Petrobangla’s management system and procurement practices. Under ESS1, ESS2, ESS3, and ESS4, Petrobangla’s ESMS and E&S aspects of the procurement practices will be reviewed. Petrobangla will need to have the capacity to assess providers ESMS, health and safety records (OHS), life and fire safety and emergency procedures, and labor practices. By Appraisal, a draft ESCP and SEP, will be agreed between the Petrobangla and WBG (or Lender), which will be formally negotiated as part of the legal agreement in the project negotiations. These plans will outline the specific measures and actions that must be undertaken by the borrower to manage and mitigate environmental and social risks and impacts throughout the project's lifecycle, within the stipulated timeframe for each specific action. If necessary, the ESCP will include also provisions to strengthen Petrobangla’s ESMS and E&S aspects of the procurement practices. ESS 4 and 10 will address any potential impact or concerns on communities. Stakeholder engagement plan will manage the process of effective information sharing with different stakeholders. The SEP will also build on the existing feedback to strengthen the system of managing grievances. The screening criteria for gas suppliers will also include E&S criteria. Feb 19, 2025 Page 6 of 8 The World Bank Energy Sector Security Enhancement Project (P181811) 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? The following assessment will be carried out during project preparation: review of the existing environmental and social risk management system and E&S aspects of the procurement practices. If significant material gaps with the ESF are identified, an ESCP and SEP to address these gaps will be prepared by Appraisal. The following E&S documents will be prepared by Appraisal: ESCP and SEP. This Operation follows the World Bank Group Guarantee Platform approach, and E&S risks are reviewed and assessed by MIGA. III. CONTACT POINT Contact Point Task Team Leader: Olayinka Mutiat Edebiri Title: Senior Energy Specialist Public Disclosure Email: obisiriyu@worldbank.org TTL Contact: Varun Rachappa Hallikeri Job Title: Senior Infrastructure Finance Specialist Email: vhallikeri@worldbank.org 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): Olayinka Mutiat Edebiri, Varun Rachappa Hallikeri ADM Environmental Specialist: Iqbal Ahmed ADM Social Specialist: Ekaterina Romanova Feb 19, 2025 Page 7 of 8 The World Bank Energy Sector Security Enhancement Project (P181811) V. APPROVAL MIGA Manager, Sustainability, Industries Kate Wallace February 18, 2025 Public Disclosure Feb 19, 2025 Page 8 of 8