PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.: AB7422 Project Name Energy for Rural Transformation II – Additional Financing (Clean Cooking Sector Support) Region Africa Sector Clean cooking sector (100%) Project ID P146135 Borrower(s) Government of Uganda Implementing Agency Private Sector Foundation of Uganda Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared October 1, 2013 Estimated Date of October 31, 2013 Appraisal Authorization Estimated Date of Board N/A Approval A. Key development issues and rationale for Bank involvement 1. This is a Trust Funded Additional Financing in the amount of US$1.5 million to the Republic of Uganda for the Energy for Rural Transformation II Project (ERT-2), which has performed satisfactorily since its approval. Of the US$1.5 million, US$1.0 million will be available in Phase I of the project. The remaining US$0.5 million will be available for the second phase of the activity conditional upon extension of the closing date of the Trust Fund. The original ERT 2 credit amount was US$75 million with an Additional Financing of US$12 million approved in May, 2013 to finance the costs associated with meeting the financing gap and achieving the scale-up of the on-grid connection target of the original project. The proposed second Additional Financing for ERT 2 (Clean Cooking Sector Support) will help scale-up dissemination and adoption of clean cooking solutions, an important aspect to improving and increasing energy access in Uganda. 2. The proposed AF is based on the outcomes of the Uganda country consultation and designed in close coordination with other donor programs. It will focus on: a) provision of business and market development services to promote targeted enterprises and the sector broadly; b) provision of seed grants to address financing needs of entrepreneurs; c) consumer awareness, outreach, and mobilization to strengthen demand for clean cooking solutions and enable consumer feedback; and d) Capacity building and operation costs (PSFU and MEMD). 3. The AF will be linked to the ongoing Energy for Rural Transformation (ERT 2) project and will be implemented by the Private Sector Foundation Uganda (PSFU), an existing implementing agency promoting rural energy and energy efficiency enterprises development under the ERT 2 project. The activity will be entirely financed by the Russian Trust Fund for Energy Small and Medium Enterprise (SME) development in Sub-Saharan Africa. 4. The AF is being undertaken under the overall context of World Bank’s regional support for the cooking sector through the ‘Africa Clean Cooking Energy Solutions’ (ACCES) initiative. 1 ACCES aims to promote enterprise-based, large-scale dissemination and adoption of clean cooking solutions in SSA and is modeled after the Lighting Africa program with a strong focus on Quality Assurance/Technical support aspects. 5. According to OP 13.20 - Processing Additional Financing for Recipient Executed Trust Funds (RETF), the policy allows providing additional financing to projects in the context of ongoing, well-performing projects (also noted in OP 10.00) to address, in this case, point b) “implementation of additional or expanded activities that scale up a project’s impact and development effectiveness.” ERT-2 is a well-performing project (with a moderately satisfactory or better rating). 6. The rationale for the proposed additional financing for ERT2 project is linked to the project’s objective to increase energy access, which under the Sustainable Energy For All (SE4ALL) framework includes both electrification and clean cooking solutions. The following main factors summarize the need and opportunities to support the clean cooking sector in Uganda: (i) there is a very high prevalence of solid cooking fuels combined with a low number of households with clean and efficient cookstoves, (ii) charcoal is becoming increasingly more expensive due to the continuing pressure on biomass resources, (iii) the share of household expenditures for solid cooking fuels in Uganda is one of the highest in SSA, (iv) economic and business opportunities are strong for emergence of enterprises in the cooking sector that can deliver clean cooking solutions with support, and (v) there is government buy-in with steps being taken to establish an inter-ministerial dialogue and develop a common policy for biomass usage. 7. The rationale for undertaking this additional financing is further substantiated by a two day Uganda clean cooking stakeholder consultation organized by ACCES and Global Alliance for Clean Cookstoves in Kampala where the challenges and the needs of stakeholders operating in the sector were communicated. The key challenges for enterprises (stove and fuel entrepreneurs) in the cooking sector in Uganda is achieving scale in terms of production capacity, business growth, and market penetration. A key priority identified by the various stakeholders is the development of skills and capacity for business planning, management, and growth. Another important barrier identified is low awareness among consumers regarding the benefits of clean stoves and fuels. This is compounded by limited access to clean technologies and low affordability among certain consumer segments. The lack of understanding among the producers and distributors of these various consumer segments, their preferences, and needs also inhibits development of appropriate technical and business solutions. B. Country and Sector Context 8. Only about 12% of Ugandans have access to electricity. The majority, about 95%, still use wood and charcoal for cooking.1 Moreover, electricity is rarely used for cooking in connected households because of its higher cost compared to cooking with biomass fuels. The use of fuels such as Liquefied Petroleum Gas (LPG) remains very low at 0.5 – 1% and is 1 Clean and Improved Cooking in Sub-Saharan Africa - A Landscape Report. World Bank 2013. 2 expected to stay at this low rate in the short to medium-term. Biomass fuels are becoming increasingly more expensive due to the continuing pressure on biomass resources. The share of household expenditures for solid cooking fuels in Uganda is one of the highest in Sub- Saharan Africa (SSA).2 Compared to the rest of the developing world, Ugandan urban households spend a significant share of household income on biomass fuels for cooking. Even the lowest quintile spends an average of 9% of their income on woodfuels whereas the highest quintile spends about 15% of their household income.3 9. Uganda’s population growth has put considerable pressure on natural resources, especially on forest resources. Pressure on forests in Uganda comes in different forms such as from large demand on land resulting in clearing of forests for agriculture and settlements as well as from demand of woodfuels. Average rate of deforestation in the country during 2000-2010 was about 2.46% or the fifth highest in SSA.4 The country has the second highest birth rate in the world with a Population Growth Rate (CAGR) of 3.2%, further increasing the demand for natural resources especially in and around the largest cities. 10. Exposure to indoor air pollution (IAP) in Uganda is estimated to cause 13,212 deaths per year with more than 20 million people impacted by exposure to household air pollution each year.5 About 3.8 million households cook on open fires in an enclosed space and nearly 1 million additional households are exposed to carbon monoxide from traditional charcoal stoves. IAP is responsible for 8.2% of infant deaths due to acute respiratory infections (ARI). Awareness of both indoor air pollution and benefits of improved cookstoves among the general population is very low. 11. The rate of improved cookstove adoption nationally has remained relatively low despite the high potential demand for clean cookstoves. In urban communities, especially Kampala, adoption of improved cookstoves is rising, where people benefit from the centralized production and availability. Nationally, however, the adoption of improved cookstoves has remained relatively low at 8.4%.6 Research has shown that many consumers in rural areas have the ability to pay for more advanced cookstoves and 36% of fuelwood users now pay for fuelwood, suggesting that the economic case for improved cookstoves is relatively strong and that more should be done to motivate their adoption.7 Moreover, most rural households live on less than US$3 per day and many spend more than US$8 per month on biomass fuels, so there is a great economic imperative for encouraging the uptake of clean cooking. Uganda’s potential market for improved cookstoves is more than 4.5 million households in rural areas plus another 1.5 million in the urban centers.8 12. Despite there being a number of cookstove producers in the country, there are few of them producing at scale. There are more than 50 cookstove producers in the country but 2 Ibid. 3 Expenditure of Low-Income Households on Energy. http://siteresources.worldbank.org/EXTOGMC/Resources/336929- 1266963339030/eifd16_expenditure.pdf 4 State of the Clean Cooking Sector in SSA 5 http://www.cleancookstoves.org/resources_files/uganda-market-assessment-mapping.pdf 6 Uganda Bureau of Statistics (UBOS) Household survey, 2009/2010 7 Shell Breathing Space research, 2007 8 http://www.energyprogramme.or.ug/wp-content/files/JSRREPORT.pdf 3 with most producing no more than 100 units per month.9 Only two are producing around 1,000 units per month and in need of more developed distribution channels.10 The quality of cookstoves as well as the scale of production and distribution needs to increase significantly to match the demand and deliver lasting impact. Most production is done around Kampala and distribution costs to other areas can be high. Supply side constraints include poor access to land/premises, lack of access to finance, marketing and distribution difficulties, and rising raw material costs. 13. The Government of Uganda acknowledges the biomass energy issue as an important development challenge and is taking steps to address it via a joint coordination framework. GoU has developed the Renewable Energy Policy of 2007 that sets the target to increase the use of modern renewable energy from 6% to 61% by 2017 with the goal to relieve pressure on biomass energy resources. The “Uganda Renewable Energy Policy Objectives and Strategies” document broadly emphasized “utilizing biomass energy efficiently so as to contribute to the management of the resource in a sustainable manner” and more specifically “scaling-up the adoption of efficient charcoal fuel stoves from 20,000 currently to 2,500,000 households by 2017 and increase the adoption of efficient fuelwood stoves from 170,000 currently to 4,000,000 by 2017.” Additionally, the strategy emphasizes promotion of interfuel/intertechnology substitution in households, commercial buildings and industry. 14. The government is currently strengthening the inter-ministerial dialogue for the sector by developing Biomass Energy Strategy (BEST). BEST is a joint coordination framework for the Ministries of Health, Housing, Environment and Energy on the development and implementation of national policies and regulations for the clean cooking solutions. Increasing use of efficient biomass energy technologies is also envisaged. Moreover, The Ministry of Water & Environment and the National Forestry Authority are currently undertaking work in improving the sustainability of charcoal production in an attempt to address the supply side issues of biomass. C. Higher Level Objectives to which the Project Contributes 15. The proposed additional financing is well aligned with the Uganda Country Assistance Strategy for 2010-2015. Among other essential challenges identified, “Arresting environmental degradation and natural resource depletion” has been identified in the CAS as a key development issue. The document acknowledges that despite efforts to improve institutions for environmental management and sustainable use of natural resources, the depletion of Uganda's natural resources and degradation of the environment is constraining growth. The document also recognizes that “there is a high level of deforestation and forest degradation in Uganda while household expenditures for these fuels that are the principal sources of energy have doubled during the last 15 years." 16. As part of its strategic objective to promote inclusive and sustainable growth, one of the CAS outcomes is to improve conditions for private sector growth. The Bank will support 9 http://community.cleancookstoves.org/files/132 10 Author’s assessment from field visits 4 government efforts to improve land registry, streamline regulations, and deepen the financial sector. IFC’s work has also focused on collaboration with intermediaries for SME finance. 17. Proposed objective(s) There are no changes being proposed to the development objectives of the original project. The parent PDO is to increase access to energy and ICTs in rural Uganda. D. Detailed Project Description 18. The proposed additional financing will expand on the activities of the sub-component 1.5 of ERT2, implemented by PSFU to focus on: (i) provision of business development support to promote targeted enterprises and the clean cooking sector broadly; (ii) provision of seed grants to address financing needs of entrepreneurs; and (iii) consumer awareness, outreach, and mobilization to strengthen demand for clean cooking solutions; and (iv) Capacity building and training for PSFU and Ministry of Energy and Mineral Development (MEMD). 19. In an effort to ensure timely completion of the activities under the proposed additional financing, the activities are phased under Phase I and II. Phase I includes activities to be completed before the indicated end date. Phase II activities will be undertaken conditional on the extension of the trust-fund closing date. 20. Business Development Services (BDS) (USD$325K): The additional financing will: (i) promote sector development by facilitating market linkages and information and (ii) provide technical assistance and training for enterprises in business development through consultancy services. The key activities proposed include: (i) Market and Business Promotion - generating and disseminating of business and market information including best practice guides, market studies, etc.; promoting awareness of business opportunities in the sector and facilitating market linkages targeting SMEs, FIs, NGOs, consumer groups, and policy makers; and (ii) Business Advisory and Training Services - business planning, management, and development training for groups/institutions (such as artisan associations) and targeted consultancy services (on a cost-share basis) to stove and fuel entrepreneurs. The screening criteria for selection of entrepreneurs will be developed in due course with one of the main criteria being linkages with the quality and performance of products. To the extent feasible, the selection will strive to be carried out in a way that diverse consumer segments are targeted by different entrepreneurs based on the market segments identified in the consumer research. These activities are planned for completion in Phase I. 21. Access to Finance (USD$600K): A key focus of the BDS component described above is to create investible businesses by identifying gaps and needs to enterprise development, 5 preparing the entrepreneurs for lending and investment by financing intermediaries and investors, and providing technical assistance and capacity building to address their needs. Thus, this activity would: i) provide any necessary funding to entrepreneurs whose business development services assessment revealed a need to address them with seed funding; and ii) make the grants available for other entrepreneurs selected independently on the basis of well- developed business plans.  These grants could support the enterprises in carrying out marketing strategies, enhancing production capacity (buying tools and equipment for production, enhancing workshop space, improving production models, piloting/scaling alternative fuels etc.), improving quality and performance of technologies (such as receiving technical training), implementing distribution strategies (such as through more advanced sales models, decentralized sales outlets, etc.), and other needs identified as requiring financing in the business plans. The grants could also complement the consumer outreach efforts with below-the line marketing as entrepreneurs conduct marketing for their unique products.  The seed financing will be disbursed in two tranches. The first tranche of US$350K is planned for disbursement in Phase I. The second tranche of seed financing (US$250K) will be disbursed conditional on the trust-fund closing date being extended. This financing is designed as a grant to be disbursed by the entrepreneurs prior to the project closing date. The eligibility criteria, selection process, and grant disbursement process will be detailed in an addendum to be appended to PSFU’s operating manual.  This activity will be implemented in close coordination with the Global Alliance’s SPARK11 fund (grants from US$100,000-500,000). Proposed seed financing would build the capacity for enterprises and allow them to bring in co- financing to leverage additional financing from the Alliance. Consumer Engagement and Mobilization (USD$330K): The lack of understanding among the producers and distributors of various consumer segments, their preferences, and needs inhibits development of appropriate technical and business solutions. This activity focuses on communication and outreach to link producers/distributors to their consumers (communication materials, demonstrations, road shows, feedback groups, etc.) and will include implementation of a consumer engagement strategy to catalyze adoption of clean cooking solutions. In addition, there is significant potential for impact and demonstration of scale by promoting efficient cookstoves in institutions such as schools. This activity, therefore, includes: (i) Design and implementation of a consumer engagement strategy to catalyze adoption of clean cooking solutions in households and institutions. The consumer engagement strategy will be based on the recommendations of the ongoing consumer research study for Uganda. 11 Alliance’s fund to support innovative business models. 6 (ii) Pilot outreach to institutional consumers such as schools through advocacy and demonstration. PSFU will coordinate with MEMD to facilitate promotion of institutional cookstoves including liaising with the Ministry of Education. Under this activity, PSFU will support MEMD carry out advocacy with head teachers association, engagement with district education officers, and demonstrate efficacy of efficient institutional stoves in select schools. PSFU will select and procure institutional stoves on a cost-share basis to support dissemination of quality stoves. In Phase I, the activities undertaken include: (a) design of the consumer engagement strategy (USD$150K); and (b) institutional outreach (USD$30K). The implementation of the strategy designed in Phase I will be undertaken in Phase II (USD$150K). 22. Capacity Building, Training, and Operation Costs (USD$260K): Currently, PSFU is responsible for provision of business development training, consultancy services, grants, advocacy, and related activities to support development of private sector actors involved in renewable energy, energy efficiency, and rural energy services under the ERT-2 project. Through the proposed additional financing, PSFU will expand these services to enterprises in the clean cooking sector. In addition, MEMD has a range of activities focused on the biomass sector including promotion of technologies, awareness, training, etc. and the proposed project activities will be coordinated with existing efforts. This activity will support: i) Capacity building, training, and operational costs for PSFU including: (a) procurement of Sector Advisor with specific, relevant, and extensive experience in the clean cooking sector and Procurement Specialist to support project implementation; (b) Local and international training/shadowing for PSFU; and (c) provision of funding for administration and operation costs to support project activity implementation; ii) Capacity building and training for MEMD activities including: (a) local technical training on gassifier stoves for MEMD and SMEs supported; and (b) local and international shadowing to support sector development. Conditional upon successful extension of the trust-fund, the Phase II activities under the Access to Finance and Consumer Engagement and Mobilization sub-components will be undertaken. Therefore, of the total allocation of US$260K for this component, $100K is allocated for operating expenses of PSFU and the services of the Sector Advisor to support implementation of activities under Phase II. 23. Project Financing: The activity will be financed by the Russian Trust Fund for Energy SME development in Sub-Saharan Africa. The Russian Trust Fund was established in April 2009 as a US$30 million fund to foster local private sector entrepreneurship and investment in the provision of energy services in remote, un- served and under-served regions in SSA. The objective of the Russian Trust Fund is to support the establishment and development of stable and viable privately-run enterprise 7 and business models in order to increase access to reliable, sustainable and affordable modern energy services. The Trust Fund, which is administered by the World Bank, helps the design of country specific financing mechanisms aimed at promoting domestic entrepreneurship and investment in infrastructure services in support of shared-growth and poverty reduction. The Bank is collaborating with GVEP International (Global Village Energy Partnership) in the preparation and implementation of the activities funded by the Russian Trust Fund. 24. Flow of Funds: The proposed project will be implemented by PSFU. The grant financing will be provided to GoU which will transfer the funds to PSFU through a subsidiary agreement between PSFU and MoFPED. A separate designated account will be created for PSFU to manage the funds. The funds will be used to implement the above activities through consultancy and training services and include a provision for capacity building and technical assistance to PSFU and MEMD. 25. Results Framework: The proposed additional financing aims to promote the supply and demand side of the clean cooking sector through scale up of enterprises and mobilization of consumer demand. The additional financing for business development, seed financing, and consumer awareness is expected to prepare the ground for further development of the cookstove sector and enable subsequent increase in the volume and sales of the supported enterprises and increase the number of households adopting cleaner, efficient cookstoves and fuels. Considering the limited duration of the project period, outcome level targets cannot be included, such as number of cookstoves sold/adopted. Therefore, the following intermediate indicators are proposed to be included in the results framework12: i) Number of entrepreneurs supported through the project: a. Entrepreneurs who received business advisory services and/or training b. Entrepreneurs supported under seed financing grants ii) Market and Business information product developed and disseminated iii) Design and implementation of consumer engagement strategies and products iv) Number of institutional cookstoves disseminated v) Number of PSFU and MEMD staff trained 12 The revised results framework is included in ANNEX 2 8 E. Safeguard policies that might apply The proposed additional financing for ERT II does not trigger any additional safeguard policies. Progress with safeguards implementation has been satisfactory; the framework documents (ESMF and RPF) have been complemented with Environmental and Social Management Plans and Resettlement Action Plans. Environmental and social issues such as occupational safety will be considered in the selection process of the seed grantees and proposed investments. The screening criteria with these considerations will be included in the addendum to PSFU’s operations manual. ISDS of ERT2 first additional financing for reference F. Safeguard Policies Triggered Safeguard Policies Triggered Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X G. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The ERT II project has been assigned an environmental risk Category B, because some of the interventions to be supported like renewable energy power generation facilities are likely to result into impacts on the ecosystem, and habitat for some endemic aquatic and terrestrial species. Despite the fact that the project is expected to provide significant environmental and social benefits onsite, some of its subprojects are likely to have potential environmental impacts on human populations or environmentally important areas – including wetlands, grasslands, and other natural habitats. At screening stage, the proposed subprojects will be classified as category B, or C, depending on the type, location, sensitivity, and the scale of the project and the nature and magnitude of its potential environmental impacts. For Category B: A limited EIA will be adequate, since the projects may have site-specific environmental impacts, and their mitigation measures can be designed more readily. Under the Category C: Projects are likely to have minimal or no adverse environmental impacts, thus exempted from EIA. 9 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: None anticipated. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Environmental Assessment (OP 4.01) The OP 4.01 is applicable because the program will support renewable energy power generation investments under the component 1.As the works and sites had not been finalized for the original project, an ESMF was prepared, consulted upon, and disclosed before appraisal. To date, Environmental and Social Management Plans for Lines 1-3 were prepared, cleared by NEMA and the Bank; and disclosed in-country on June 18, 2012, and in the World Bank’s Infoshop on June 20, 2012. ESMPs for Lines 4-9 were prepared, cleared by NEMA and the Bank; and disclosed in-country and at the World Bank’s Infoshop on March 19, 2013. The ESMF outlines an environmental and social screening process for subprojects, which will enable the national and local governments, as well as communities, to simultaneously identify potential environmental and social impacts of the proposed subprojects; and to address them by incorporating the relevant mitigation, prevention, and management measures. To ensure that negative impacts are minimized or eliminated, the ESMF requires the inclusion of mitigation impacts at the design of subprojects prior to implementation. The screening process has been developed as the locations and types of subprojects are not yet defined, and therefore potential impacts cannot be precisely identified. The ESMF present guidelines and procedures consistent with the Environmental Management Laws of Uganda and the World Bank’s Safeguard Policy on Environmental Assessment OP/BP4.01. Further, the ESMF lays out procedures for screening and mitigating impacts that may arise during the project implementation, including the following: (a) Guidance on preparation of comprehensive checklists of potential environmental and social impacts and their sources; (b) Systematic procedures for participatory screening of subproject sites and activities and the environmental and social considerations; (c) A guided approach for forecasting the main potential environmental and social impacts of the planned project activities; (d) An institutional arrangement for mitigating, preventing, and managing the identified environmental impacts; (e) A typical environmental management planning process for addressing negative externalities in the course of project implementation; (f) A monitoring system for implementation of mitigation measures; and (g) An outline of recommended capacity building measures for environmental planning and monitoring of project activities. Natural Habitats (OP/BP 4.04) The OP/BP 4.04 is applicable because some ERT II interventions are likely to impact on the area ecosystem, and habitat for many endemic aquatic and terrestrial species. The ESMF will address issues pertaining to this policy. In short, ERTP II will not finance activities that are likely to 10 destroy terrestrial and aquatic natural habitats. Instead, it will support those interventions that contribute to the reversal of degraded natural habitats, such as over-exploited forests and grasslands by promoting energy efficient stoves and alternative sources of energy. Involuntary Resettlement (OP/BP 4.12) The OP/BP 4.12 is applicable because ERT II will support interventions in selected areas that are likely to result into land taking or restriction of access by local communities. Involuntary resettlement policy is triggered not only when land acquisition is evident, but also where there is no physical relocation, such as project activities impact assets, restrict access to other natural resources, and/or negatively impact on livelihoods. Since the interventions in Component 1 are not determined in advance and by appraisal, a Resettlement Policy Framework (RPF) has been prepared and disclosed. The RPF document outlines the principles and procedures for resettlement and/or compensation of subproject-affected people, and establishes standards for identifying, assessing and mitigating negative impacts of project supported activities. In addition, the RPF guides the preparation, and implementation of the resettlement action plans (RAPs) for each individual subproject that triggers the involuntary resettlement policy (OP/BP 4.12). To date, RAPs for Lines 1-3 were prepared, cleared by NEMA and the Bank; and disclosed in- country on June 18, 2012, and in the World Bank’s Infoshop on June 20, 2012. RAPs for Lines 4-9 were prepared, cleared by NEMA and the Bank; and disclosed in-country and at the World Bank’s Infoshop on March 19, 2013. The resettlement action plans have been prepared in consultation with the affected individuals and communities. Resettlement assistance and compensation for impacts is also being determined in the project through the same consultative process to ensure that no one is left worse off as a result of the project. RAPs preparation and implementation are based on existing laws and regulations of Uganda, as well as the World Bank policy OP/BP 4.12. The stakeholder groups like the local government institutions, private sector and CSOs where necessary will be provided with training necessary to equip them with the skills to screen subproject activities for impacts, prepare RAPs, and implement activities set out in the RPFs and subsequent RAPs. The national and local level institutions have been undertaking both desk and field appraisal of the planned interventions, and approving RAPs prior to commencement of the subprojects. Similarly, all compensation will be completed prior to commencement of the subproject. Compensation and resettlement issues will be funded from government counterpart funds or sectoral budget. The grievance mechanisms have been well laid out in the RPF, and they utilize the existing systems and structures from the lowest levels through local governments. If all these channels of handling grievances fail, then the aggrieved individuals can resort to Uganda’s courts of law. 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. Under Phase I of the program, the environment and social safeguards have been handled through the existing government mechanisms. The National Environmental Management Agency 11 (NEMA) reviewed and approved ERT sub-projects. In addition, REA provided oversight for environmental and social due diligence and safeguards compliance for the larger investments (e.g. the Kakira Sugar Mill cogeneration facility, and the West Nile 3.5 MW hydropower station), some of which were done through IDA technical support. Overall compliance monitoring, including a database, was done by REA, which was assisted by a Safeguards Consultant who established a RAP monitoring and tracking system. To coordinate work between NEMA and REA, an Inter-agency Steering Committee was established. The coordination between NEMA and REA on environmental and social due diligence has been satisfactory. These arrangements and capacities for compliance with safeguard policies and Ugandan regulations have been working satisfactorily in Phase I and will continue to be utilized in Phase II. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The Bank’s safeguards policies applicable to ERT II Project are: (i) Environmental Assessment (OP/BP 4.01); (ii) Natural Habitats (OP/BP 4.04); and (iii) Involuntary Resettlement (OP/BP 4.12. The initial safeguards documents prepared were an ESMF and RPF; during implementation several ESMPs and RAPs have been prepared as well. The safeguard documents were prepared following consultations with selected communities, local governments/authorities, national institutions and the private sector. All safeguards documents were cleared by the Uganda National Environmental Management Authority (NEMA) and the Bank. They were then disclosed at the World Bank’s Infoshop on October 31, 2008; and in country on November 10, 2008. The proposed mitigation measures and their monitoring plans are an integral part of the project design and costs. H. Tentative financing Source: Russian Trust Fund ($m.) Total 1.5 I. Contact point: Somin Mukherji Title: Sr. Financial Analyst Tel: (202)458-8253 Email: smukherji@worldbank.org For more information contact: The Infoshop The World Bank 1818H Street, NW Washington DC 20433 Tel: (202)458-4500 Fax: (202)522-1500 Email: pic@worldbank.org/infoshop Web: http://www.worldbank.org/infoshop 12