The World Bank Honduras Sustainable Connectivity Project (P181166) Concept Environmental and Social Review Summary Concept Stage (ESRS Concept Stage) Public Disclosure Date Prepared/Updated: 12/12/2023 | Report No: ESRSC04010 Feb 07, 2025 Page 1 of 10 The World Bank Honduras Sustainable Connectivity Project (P181166) I. BASIC INFORMATION A. Basic Operation Data Operation ID Product Operation Acronym Approval Fiscal Year P181166 Investment Project Financing (IPF) HSCP 2025 Operation Name Honduras Sustainable Connectivity Project Country/Region Code Beneficiary country/countries Region Practice Area (Lead) (borrower, recipient) Honduras Honduras LATIN AMERICA AND Transport CARIBBEAN Borrower(s) Implementing Agency(ies) Estimated Appraisal Date Estimated Board Date The Republic of Secretariat of Infrastructure and 25-Oct-2024 17-Dec-2024 Honduras Transport (SIT) Estimated Concept Total Project Cost Review Date Public Disclosure 20-Nov-2023 187,000,000.00 Proposed Development Objective The Project Development Objective (PDO) is to improve climate-resilient and safe transport access in the northwestern region of Honduras and promote sustainable livelihoods in selected areas through landscape management and women- led economic initiatives. 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 Project Development Objective (PDO) is to improve climate-resilient and safe transport access in the northwestern region of Honduras and promote sustainable livelihoods in selected areas through landscape management and women- led economic initiatives. The project components include: Component 1: Construction of the CA-4 – CA-13 Connection Road Corridor (US$158 million). The component will finance the construction of a new two-lane 46-km climate-resilient and safe road connecting the CA-4 (near Macuelizo) and the CA-13 (near Corinto), close to the Guatemalan border. The new road seeks to enhance climate-resilient access from the regions of western Honduras to the country’s main port, Feb 07, 2025 Page 2 of 10 The World Bank Honduras Sustainable Connectivity Project (P181166) Puerto Cortes, on the Atlantic Coast. Currently, the only access from these regions is through the CA-4 which passes through San Pedro Sula, the most congested city in Honduras. The city is particularly vulnerable to climate events due to its location in a flat valley surrounded by mountains, exacerbating floodings especially during rainy seasons. Frequent floodings compound traffic congestion, affecting the functionality of the entire CA-4 corridor. Whenever the road system around San Pedro Sula, that concentrates the CA-4, CA-5 and CA-13, becomes hampered, the national transport system is severely affected as there are no viable alternative routes by-passing the Sula valley in San Pedro Sula to access the country’s main point of exportation. The new road will provide a reliable alternative itinerary far from San Pedro Sula and the Sula valley, less vulnerable to climate events. Climate change-exacerbated flooding is projected to cause increasing shutdowns of the existing road network in San Pedro Sula, disrupting access to markets and services; the new road is planned in part to ensuring more consistent accessibility for beneficiaries who would otherwise become isolated. The component will finance: (a) preparation of the technical social and environmental studies and detailed design, involving a climate change risk assessment that will inform project's detailed design on necessary measures to mitigate climate negative impacts; (b) cost of works; (c) technical, social, and environmental supervision; and (d) cost of resettlements including climate resilient considerations. It is estimated that the corridor will require the acquisition of approximately 185 hectares of land. Housing resettlements is expected to be limited as the alignment will not be passing near or through communities. The final design will also look at possible truck/bus rest areas and define future recharging infrastructure for electric vehicles. Component 2: Resilient improvement of feeder roads (US$14 million). The component will finance the paving of about 41 km of existing unpaved feeder roads that are directly or indirectly connected to the new corridor to improve access of the rural population in the areas where the unpaved roads often become impassable or unsafe due to increasing flooding. The civil works incorporating climate-resilient design will ensure year-round access, contributing to the Municipal Interconnection Roads Program of the GoH. With the available Public Disclosure budget, four municipalities have been prioritized based on their proximity to the corridor. The first criterion for the selection of roads is to consider the most vulnerable to the climate in each municipality for paving. A distribution of the available resources per municipality was determined based on the following parameters: (a) the level of poverty; (b) the extent of existing roads; and (c) the potential for economic development. In each one of these municipalities, a participatory process involving civil society, and the private sector will be carried out to finalize the prioritization with a particular attention to care about women voice. Road works will involve: (a) paving dirt or gravel surfaces using calibrated paving techniques, such as double surface treatment due to traffic levels; (b) upgrading road drains and culverts to enhance flood resilience; (c) stabilizing slopes to mitigate landslide risks from rainfall; (d) constructing small bridges; and (e) implementing road safety measures, such as increasing road visibility during intense rainfall, building protected sidewalks and traffic calming measures along roads that pass-through towns. Component 3: Inclusive and integrated sustainable landscape management (US$5 million). This component will combine gender-inclusive sustainable landscape management with community-driven economic development in priority areas adjacent to the CNP (including declared micro-basins) along the new road alignment West to the CNP. These areas are considered vulnerable to droughts, wildfires, as well as hurricanes, requiring an improvement of ecological integrity and resilience. In areas adjacent to the CNP and selected declared micro-basins along the corridor, the interventions, that will involve studies, technical assistance, building capacity, training, the acquisition of goods, will cover, inter alia, the following activities: (i) the involvement of local populations in restoration, including reforestation, of degraded landscapes to enhance ecological resilience and connectivity within the network of existing protected areas and biological corridors; (ii) the promotion and adoption of sustainable value chains based on local productions that promote sustainable agroforestry and climate-smart agriculture in targeted areas; and (iii) community-based ecotourism initiatives and women’s entrepreneurship. The component will exclude interventions that can negatively impact community rights and access to natural resources or land, and any interventions within the CNP. Component 4:Institutional strengthening, Feb 07, 2025 Page 3 of 10 The World Bank Honduras Sustainable Connectivity Project (P181166) capacity building, and project management (US$10 million). This component will finance consulting activities, training, and goods. - Subcomponent 4.1: Institutional capacity building (US$3 million), including: (i) strengthening the asset management capacity; (ii) promotion of gender equality in the road sector; and (iii) citizen engagement activities. - Subcomponent 4.2: Road Safety (US$2 million), including: (i) capacity assessment with review of institutional arrangements to inform the National Road Safety Strategy; (ii) development of an online integrated road safety database; (iii) safety assessment of the primary and secondary paved road network to identify high-risk locations; (iv) training and certifying road safety auditors and trainers, including women, in collaboration with academic institutions; and (v) development of a road safety engineering manual and updating of road design and construction standards, with a focus on safety. - Subcomponent 4.3: Project Management Support (US$5 million), including: (i) hiring of specialists for the Project Executing Unit (UEP, in Spanish) for the day-to-day implementation, monitoring, and evaluation of the Project; (ii) hiring of a consulting firm to provide support to the UEP; and (iii) financial audits. D. Environmental and Social Overview D.1 Overview of Environmental and Social Project Settings The proposed road would connect CA-4 near Quimistán and CA-13 near Corinto on the Guatemalan border. The vegetation cover is mainly pine, broad leaf and mixed forests. It also includes the Cusuco National Park (CNP), a montane forest of conservation significance within the Meso-American biodiversity hotspot, recognized as a Key Biodiversity Area due to the overlapping ranges of several globally threatened amphibian species, which also supports important populations of many cloud forest specialist species (including several that are endemic). The CNP is part of the National Protected Areas System of Honduras and has a management plan in place. . The National Institute of Public Disclosure Forest Conservation and Development, Protected Areas, and Wildlife (ICF in Spanish) manages the park. The main economic activities identified in the area include cardamom, cacao, and coffee monocultures. Livestock farming was also observed within park grounds and “maquiladoras” along CA-4. Land ownership is mostly private, including in sections within CNP. Owners predate the park’s declaration and have land titles or recognizable claims. There is noticeable land demarcation for crops and livestock in the project area, including within CNP. There is migratory movement along legal and illegal crossings at the Guatemala border. Local community leaders report illicit activities with the movement of people and products, which have caused violent incidents. Gender Based Violence (GBV) is prevalent in the region. Road workers without personal protective equipment and young workers were identified in the project area. No indigenous communities meeting ESS7 criteria have been identified in the project area. There are various declared archaeological sites in the proximity of the project area, with Lenca mounds identified in the El Urraco and La Coroza communities. D.2 Overview of Borrower’s Institutional Capacity for Managing Environmental and Social Risks and Impacts Feb 07, 2025 Page 4 of 10 The World Bank Honduras Sustainable Connectivity Project (P181166) The Secretaría de Infraestructura y Transporte (SIT) has been designated as the implementing agency with overall implementation responsibilities. The SIT is a Ministry created in January 2022 through Executive Decree PCM-05-2022, after restructuring the previous Ministry of Infrastructure and Public Services (INSEP). SIT structure includes an Environmental Management Unit (UGA for its acronym in Spanish) that mainly provides services related to the environmental licensing and E&S compliance of infrastructure projects executed by SIT. SIT has newly hired an Environmental Specialist and a Social Specialist who will be tasked with the preparation of E&S documentation and monitoring of consultants carrying out E&S work as relevant. A new Project Implementation Unit (PIU) will need to be created for coordination, planning monitoring and supervision of project activities, including the assessment and management of environmental, social, health and safety (ESHS) risks and impacts in accordance with the World Bank’s Environmental and Social Framework (ESF) and national requirements. The exact structure of the PIU, including the number of E&S specialists will be determined during project preparation. SIT does not have previous experience implementing the World Bank’s ESF and, considering the nature and location of the project, will require training and strong support from the Bank throughout preparation. As such, the Bank will provide ES Hands-on Implementation support in accordance with the relevant E&S standards (ESS); this will involve a dedicated plan for enhancing capacities and a specific training strategy with the support of external consultants. II. SCREENING OF POTENTIAL ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS A. Environmental and Social Risk Classification (ESRC) High A.1 Environmental Risk Rating High Public Disclosure The main risks and adverse impacts are associated with the construction of a greenfield regional corridor of about 40 km long (2-4 lanes). Expected works will encompass significant earth movement, infrastructures (bridges), drainages (culverts, longitudinal drainages), pavement, ancillary facilities (e.g., quarries or borrow pits, laydown areas and workers camps) and road safety. The most significant adverse impacts are related to habitat alteration/fragmentation, reduced wildlife mobility and potential effects on archeological remains due to earth movement and clearing of vegetation (this impact is direct and irreversible; its magnitude and level of significance will be assessed during the E&S assessment process - ESA); the corridor won’t go through the CNP, and the project’s ESA will confirm whether any of the road segments and ancillary facilities cross areas with high biodiversity value and/or known archeological sites. The other direct environmental, health and safety risks and adverse impacts identified are expected to be predictable, temporary, localized, and for which there are proven mitigation strategies. During operation, potential indirect impacts could be generated as a result of a rise in logging activities (legal and illegal), and the potential conversion of habitats for increased agricultural and livestock activities due to an improved physical access and lower transportation costs. Cumulative impacts of the project could also be generated in combination with impacts from other relevant past, present and and reasonably foreseeable developments in the project area of influence. . The level of significance of these risks and impacts will be assessed as part of the ESA, including how likely the indirect impacts would occur. Based on the above and the limited E&S management capacity of SIT, the environmental risk is considered High. Substantial A.2 Social Risk Rating Social risk is considered Substantial. Based on initial screening, main direct project risks include i) land acquisition and possible restrictions on land use and natural resources resulting in involuntary resettlement, including physical and Feb 07, 2025 Page 5 of 10 The World Bank Honduras Sustainable Connectivity Project (P181166) economic displacement; ii) labor influx associated with road construction works with potential impacts on local communities, including SEA/SH; iii) occupational and community health and safety risks from civil works including impacts from dust, noise or air pollution; v) child labor risks in construction activities; iv) road safety risks; v) risk of exclusion from project benefits for vulnerable groups, including access to jobs created by the project; vi) exacerbation of existing conflicts over the use of natural resources; vii) contextual risks related to the existence of illicit activities in the area; and viii) limited experience and capacity for social risk management under the Bank’s ESF, including involuntary resettlement. The P-ESA to be carried out during project preparation will assess and confirm the project’s direct and indirect social risks. 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 main risks and impacts are associated with the construction of a greenfield regional corridor. The most significant adverse impacts are related to habitat alteration/fragmentation, reduced wildlife mobility and effects on archeological remains due to significance earth movement and vegetation clearance. Potential indirect impacts could be generated as a result of a rise in logging activities (legal and illegal), and the potential conversion of habitats for increased agricultural and livestock activities due to an improved physical access and lower transportation costs. The significance of these risks and impacts will be assessed during the ESA process to be carried out in two phases; a Preliminary ESA (P-ESA) will be undertaken, consulted and disclosed by appraisal (with site selection assessment) and Public Disclosure a full ESIA prior to the start of works. A Cumulative Impact Assessment (CIA) and country-level Contingency Emergency Response Component (CERC)-manual will also be part of the ESA. ESS10 - Stakeholder Engagement and Information Disclosure Relevant Key local stakeholders include community patronatos (local committees), sectorial patronatos (representing multiple local committees), community assemblies, water boards, and parent committees, women’s organizations, among other community organization spaces. Vulnerable groups include women and girls, children, migrants, persons with disabilities, among others. Relevant government entities include the municipalities of Quimistan and Omoa, the ICF, Customs Authorities, the SERNA), Secretaría de Estado, IHAH, among others. Local and international conservation NGOS are also relevant stakeholders. The P-ESA will be informed by consultations with the key stakeholders. A draft SEP will be developed as part of the P-ESA to include the stakeholders and consultation approach for the ESIA to ensure project design includes the feedback from relevant stakeholders. The SEP for project implementation will be updated as part of the ESIA preparation process. ESS2 - Labor and Working Conditions Relevant The project will likely involve direct, contracted and community workers, and possibly primary supplier workers. For road construction workers, which fall under the category of contracted workers, the P-ESA will assess relevant risks including occupational health and safety risks, risks of child laborand the need to involve primary suppliers. Labor Management Procedures will be prepared as a standalone document and will also include a dedicated GRM for project workers. No workers under the age of 18 will be employed or engaged in activities under C1. Feb 07, 2025 Page 6 of 10 The World Bank Honduras Sustainable Connectivity Project (P181166) ESS3 - Resource Efficiency and Pollution Prevention and Management Relevant The project will include climate-resilient designs and explore the use of sustainable construction materials. Air quality could be affected primarily from fugitive dust generated during earthmoving activities and heavy machinery and vehicles. The P-ESA will estimate sources of air pollution (it is unknown whether project related emissions warrant an estimation of gross GHG emissions). Water and land pollution could be generated by sedimentation from storm water runoff, waste generation and uncontrolled spills of bitumen, lubricants, oils, solvents, and degreasers, for example from poorly maintained or operated vehicles and equipment, from poor handling and storage of equipment and materials, including poor siting of storage facilities. Mismanagement of ancillary facilities (e.g., gravel borrow pits, sand, stone quarries) can also generate pollution. These risks and impacts are expected to be predictable, temporary, localized, and for which there are proven mitigation strategies. ESS4 - Community Health and Safety Relevant Community health and safety risks may include risks related to Labor Influx in rural communities surrounding the project site, including SEA/SH cases. In addition, the road construction may generate noise, dust, air pollution, and vibrations, as well as road safety risks, temporary access, and public service restrictions, among other issues. The potential need for security forces will be assessed during preparation. The P-ESA will assess these risks, and the ESIA will include specific community health and safety, traffic management, and any other relevant plans to manage them as part of the project’s ESMP. In addition, the ESMP and LMP will include SEA/SH prevention measures to address direct project related risks, including a code of conduct for workers, capacity building measures and a dedicated GRM for SEA/SH, and as part of its design the project provides for other type of activities aimed at broader SEA/SH Public Disclosure prevention and women’s economic empowerment. ESS5 - Land Acquisition, Restrictions on Land Use and Involuntary Resettlement Relevant It is likely that all the alignment options to be evaluated during the pre-feasibility study will involve involuntary resettlement considering that the majority of the area is privately owned and there are existing houses and crops throughout the zone. However, the physical resettlement of a large number of people is not anticipated as urban settlements in the area are limited. One of the objectives of the pre-feasibility study will be to determine the needs for land acquisition and involuntary resettlement and to avoid, as much as possible, physical and economic displacement. The ESIA to be developed based on the results of the P-ESA, will include a full RAP that will ensure resettlement impacts of the chosen alignment are mitigated based on the requirements of ESS5. If any restrictions of access to natural resources in the project are are identified, a Process Framework will be prepared and approved prior to any impacts. ESS6 - Biodiversity Conservation and Sustainable Management of Living Natural Relevant Resources Site corridor selection will consider areas of high biodiversity value, including the CNP. As such, the corridor and related civil works are expected to be mostly in modified terrestrial habitats. The most significant adverse impact is habitat alteration/fragmentation and reduced wildlife mobility due to earth movement and vegetation clearance (this impact is direct and irreversible; its level of significance will be assessed by the ESA). Potential indirect impacts on biodiversity and habitats associated with the corridor may be generated by a rise in legal and illegal logging activities. Improved physical access and lower transportation costs may cause conversion of habitats for increased agricultural Feb 07, 2025 Page 7 of 10 The World Bank Honduras Sustainable Connectivity Project (P181166) and livestock activities. I. The P-ESA will include an exclusion list to avoid activities in critical or sensitive natural habitats and will assess whether a comprehensive biodiversity assessment and related biodiversity management plan (BMP) will be required as part of the ESIA. ESS7 - Indigenous Peoples/Sub-Saharan African Historically Underserved Traditional Not Currently Relevant Local Communities Not currently relevant. Based on initial screening, no communities meeting the ESS7 Criteria have been identified in the project area. The P-ESA will confirm whether are any communities present. If IP communities are identified, the ESIA will include an IPP to be developed in consultation with the affected communities, approved, and disclosed prior to the start of activities. ESS8 - Cultural Heritage Relevant There are known archaeological areas in the project area. The P-ESA will assess the project alternatives for avoiding areas with potential archaeological remains. If any are found, the ESIA will carry out a more detailed assessment of risks to tangible and intangible cultural heritage and will include a cultural heritage management plan. In any case, the ESIA will include a chance finds procedure. ESS9 - Financial Intermediaries Not Currently Relevant Not currently relevant. Public Disclosure 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 Not applicable Use of Common Approach No Not applicable as there are no financing partners 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 P-ESA will be carried out by an independent firm hired by the borrower in parallel and in coordination with the pre- feasibility study with an alternatives analysis, including site locations. P-ESA including: o an environmental and social baseline conditions of the project area. Feb 07, 2025 Page 8 of 10 The World Bank Honduras Sustainable Connectivity Project (P181166) o a preliminary assessment of the E&S risks and impacts for each alternative and suggested generic mitigation measures to address them (this includes a high level CIA and biodiversity analysis to assess whether a detailed CIA and biodiversity assessment are needed as part of the ESIA). o an assessment of involuntary resettlement impacts of each alternative and potential mitigation measures. o the results of a preliminary consultation with the potentially affected and benefited population, as well as a Stakeholder Engagement Plan (SEP). o Terms of Reference (ToRs) for the development of an ESIA , which will include, as relevant, an Environmental and Social Management Plan (ESMP), an updated Stakeholder Engagement Plan (SEP), a Resettlement Action Plan (RAP), a Biodiversity Management Plan (BPM), a GBV Action Plan, a Security Forces Management Plan and any other specific plans that may be necessary to comply with the ESF based on the results of the P-ESA. Draft Environmental and Social Commitment Plan (ESCP) Possible issues to be addressed in the Borrower Environmental and Social Commitment Plan (ESCP): o Prepare, consult, and disclose the specific ESIA and any specific plans required based on the results of the P-ESA (a different independent firm will be hired to undertake the ESIA) o Update the SEP o Prepare, consult, and disclose, and fully implement the RAP prior to any impacts o Prepare and disclose LMP o Implement the country-level Contingency Emergency Response Component (CERC) manual developed for Honduras, and review and update if necessary. Public Disclosure o Regarding construction material sourcing, all contractors hired by the Borrower will be required to prepare relevant site-specific E&S studies and instruments and obtain all required permits as part of their acquisition, operation, and restoration once their locations are confirmed. These studies/instruments will require prior approval by relevant national authorities and the Bank prior to the start of works. III. CONTACT POINT World Bank Task Team Leader: Eric R. Lancelot Title: Lead Transport Specialist Email: elancelot@worldbank.org TTL Contact: Rohan Shah Job Title: Transport Specialist Email: rshah9@worldbank.org IV. FOR MORE INFORMATION CONTACT Feb 07, 2025 Page 9 of 10 The World Bank Honduras Sustainable Connectivity Project (P181166) 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): Eric R. Lancelot, Rohan Shah ADM Environmental Specialist: Jorge Alberto Quinonez Zepeda ADM Social Specialist: Norman Russle Howard Taylor Public Disclosure Feb 07, 2025 Page 10 of 10