ISDS THE WORLD BANK GROUP AWorld Free of PFovrty I'nIfoShop I h .7t "A Integrated Safeguards Data Sheet (Initial) Date ISDS Prepared/Updated: 03/10/2003 25559 Section I - Basic Information March 10, 2003 A. Basic Project Data Country: CZECH REPUBLIC Project ID: P073542 Project: The Czech PCF Umbrella Project Task Team Leader: Helmut Schreiber Authorized to Appraise Date: May 27, 2002 IBRD Amount ($m): Bank Approval: June 11, 2003 IDA Amount ($m): Prototype Carbon Fund ($m): 7.00 Managing Unit: ECSIE Sector: District heating and energy efficiency Status: Preparation services (34%); Renewable energy (33%); Power (33%) Theme: Climate change (P); Pollution management and environmental health (P); Infrastructure services for private sector development (S) I.A.2. Project Objectives: The objective of the Prototype Carbon Fund (PCF) is to support development of the international market mechanism for the new commodity known as "Greenhouse Gas (GHG) Emission Reductions" (ER), developed in the framework of the Kyoto Protocol. In this particular case, the Project will function as an umbrella to facilitate the implementation of several GHG reduction subprojects in the Czech Republic. The PCF Umbrella Project aims to (a) generate high-quality ERs by Czech private and public sector developers of renewable energy and energy efficiency projects; and (b) support the development of global markets of this new internationally-recognized financial instrument based upon the sustainable use of natural resources. The Czech Republic has already gathered experience with energy efficiency- and renewable energy projects, notably involving Energy Service Companies (ESCOs) as well as use of small hydro-, wind, and biomass utilization at various locations throughout the country. Moreover it has an attractive pipeline of additional energy efficiency- and renewable energy projects some of which are being prepared or implemented already, with some generating ERs already in 2003. These projects have the potential to replace a substantial portion of energy presently generated by coal-fired boilers, which at present contribute to local pollution and are major GHG emission sources. The objectives of some of the proposed subprojects are stated in the section below. I.A.3. Project Description: The Project will support district heating improvements, improvements in building energy efficiency (e.g. in hospitals and public buildings), industrial energy efficiency, cogeneration, as well as use of renewable 2 ISDS energy resources (e.g., use of geothermal heat, biomass, as well as small hydro). Other Project categories (e.g., use of gas generated from municipal waste, or waste incineration projects) may be added upon mutual agreement of PCF and Czech Project counterparts. The following paragraphs contain short descriptions of the initially proposed subprojects. The Decin Geothermal District Heating Project. The town of Decin has a population of about 53,000 and is located directly north of Prague, near the Gernan border. The objectives of the subproject are to provide more efficient and cleaner heat to parts of Decin, and to reduce GHG (C02) emissions by replacing heat generation currently supplied from fossil-fired heat-only boilers with a combination of geothermal and more efficient gas-fired cogeneration. The electric production of the gas motors displaces grid supply of electricity which is predominantly from coal and lignite plants on the margin from the Czech grid. Heat supply will be from an innovative combination of low-temperature geothermal water, 2 x 3.4 MWt heat pumps, 2 gas motor cogeneration units with combined capacities of 2.8 MWe and 3.1 MWt, and 2 x 17 MWt gas boilers with economizers. Heat storage is also included to enhance the efficiency of operation of the cogeneration units. The geothermal water is of very high quality, and will be used after treatment to augment the town's drinking water supply. The Thomayer Hospital Energy Efficiency Project. The Thomayer Hospital is situated in the southem district of Prague. It is situated on the left bank of the Vltava river. The objective of the subproject is to (a) reduce the overall energy bill of the hospital through improved efficiency of energy supply and demand side management, (b) to reduce local air pollution and (c) to reduce greenhouse gas emissions. The hospital currently has an annual heat demand of about 124 TJ and is supplied with heat from its own installations of three gas-fired boilers and uses power purchased from the public grid. A minor portion of power is produced in a co-generation unit. The proposed subproject is focused on the wall insulation and window replacements in buildings with some reconstruction of heating systems within the buildings. Twenty-four buildings covering most of the hospital facilities are included. The heat demand is expected to decrease to about 92 TJ/year. The Small Hydro Projects on the Elbe River. The objective of this group of subprojects is to reduce GHG emissions through the construction or rehabilitation of small hydro power plants (typically, not more than 5 MW capacity each) producing emission-free electricity. I.A.4. Project Location: (Geographic location, information about the key environmental and social characteristics of the area and population likely to be affected, and proximity to any protected areas, or sites or critical natural habitats, or any other culturally or socially sensitive areas.) The Umbrella Project will be applied country-wide in the Czech Republic. Geographic location, information about key environmental and social characteristics of the area, and population likely to be affected, proximity to any protected area, etc. will be dealt with in the process of environmental assessment of the individual subprojects. B. Check Environmental Classification: F (Financial Intermediary Assessment) Comments: This is a typical Financial Intermediary Project. By decision of the Environmental Review Meeting held in Washington on March 26, 2002, the Project has been assigned environmental Category Fl. C. Safeguard Policies Triggered Policy Applicability Environmental Assessment (OP/BP/GP 4.01) * Yes '-No I TBD 3 ISDS Natural Habitats (OP/BP/GP 4.04) C0 Yes * No TBD Forestry (OP/GP 4.36) C Yes * No TBD Pest Management (OP 4.09) C, Yes * No uTBD Cultural Property (OPN 11.03) C Yes * No C TBD Indigenous Peoples (OD 4.20) CYes * No TBD Involuntary Resettlement (OP/BP 4.12) C Yes 0 No C TBD Safety of Dams (OP/BP 4.37) C Yes 0 No 0 TBD Projects in International Waterways (OP/BP/GP 7.50) IC Yes C No * TBD Projects in Disputed Areas (OP/BP/GP 7.60)* .0 Yes * No C TBD *By supporting the proposed project, the Bank does not intend to prejudice thefinal determination of the parties' claims on the disputed areas Section II - Key Safeguard Issues and Their Management D. Summary of Key Safeguard Issues. Please fill in all relevant questions. If information is not available, describe steps to be taken to obtain necessary data. II.D.la. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts. This will be done in the context of individual subprojects. Large-scale, significant or irreversible impacts are unlikely. The proposed small hydro projects on the Fl,be River will be screed carefully for any safety of dams and/or international waters issues. If the issues are deemed to be significant, the respective Bank policies will be applied in addition to the existing Czech and international regulations. II.D.lb. Describe any potential cumulative impacts due to application of more than one safeguard policy or due to multiple project component. N/a. II.D. I c Describe any potential long term impacts due to anticipated future activities in the project area. This will be dealt with in the context of each individual subproject. Significant long-term impacts due to anticipated future activities in the subproject area are unlikely. II.D.2. In light of 1, describe the proposed treatment of alternatives (if required) This will be dealt with in the context of each individual subproject. II.D.3. Describe arrangement for the borrower to address safeguard issues For a financial intermediary (Fl) operation, the Bank requires that each Fl screen proposed subprojects and ensure that subborrowers carry out appropriate EA for each subproject. Before approving a subproject, the Fl verifies (through its own staff, outside experts, or existing environmental institutions) that the subproject meets the environmental requirernents of appropriate national and local authorities and is consistent with the Bank's OP 4.01 and other applicable environmental policies of the Bank. Thus, the FIs, rather than the Bank, will screen the subprojects of the PCF Umbrella Project. In this Project, the State Environment Fund (SEF) and the Czech Energy Agency (CEA) are the Fls. To ensure the maximum level of integration of the Bank's EA principles into the Czech Environmental Impact Assessment (EIA) process while limiting the burden of new procedures on the government staff of the Czech Republic, the environmental categories normally applied by the Czech environmental authorities would be applied to the PCF subprojects. However, for the PCF project implementing agencies, this would imply that a matching category according to OP 4.01 is also assigned as shown in the table below. 4 ISDS The requirement of an Environmental Management Plan (EMP) will extend to all subprojects except Category C, for which a letter from the Ministry of ETnvironment (MOE) will suffice, to confirm that the subproject is exempt from the Czech EIA requirements. The specific procedure for the two Fls to address safeguard issues is described in the Environmental Chapter of the Operations Manual. The development of such a manual for the application by the FIs is the central element in the implementation of the safeguards policies under this Project. The key steps of the procedure developed in the manual are as follows: * When a subproject is presented for PCF approval, CEA/SEF assigns an environmental category (I/A, II/B, n.a./C; numbers and letters refer to categorization of projects in accordance with their impacts; numbers refer to Czech, letters to WB categories) and obtains a written approval from the Czech Ministry of the Environment on the assigned environmental category. * After PCF has approved the project for further preparation, CEA/SEF takes appropriate action to produce documents as described by the table below. Table: The Operational Framework for the PCF Umbrella Project Czech EIA (Act 100/2001 World Bank EA (OP 4.01) Action/Document Coll.) Required Category I Category A EA Report including EMP Category II Category B EA Report if necessary; EMP required in any case. Exempt Category C A letter from Environment Ministry * CEA/SEF submits the respective documents (EA Report, EMP) to the Ministry of Environment for review/approval. * For all Category A subprojects and for the first two Category B subprojects, each implementing agency (CEA and SEF) sends the whole EMP/EA Report to the World Bank for review and approval. * CEA/SEF completes and sends to the World Bank the standard World Bank Integrated Safeguards Data Sheet for each subproject. * The Bank's approval of the Integrated Safeguards Datasheet is a condition of subsidiary Emission Reduction Purchase Agreement (ERPA) approval by the PCF. * The ERPAs will include a provision that disbursement of PCF funds against the GHG reductions achieved would be subject to satisfactory environmental performance of the subproject. In case of a disputed environmental category (which may happen in "border-line" cases - e.g., a subproject not fully within the Bank's definition of Category B or not fully within the Czech definition of 5 ISDS Category II), additional consultations would be held between the Fl, the authorized Environment Ministry staff, and the World Bank staff with respect to the applicable course of action. II.D.4. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. During preparation of the Umbrella Project, a wide variety of consultations have been carried out with government offices (e.g., Ministry of Environment, Ministry of Industry and Trade, Czech Energy Agency, State Environment Fund), public and privale sector energy producers (e.g., hospitals, district heating enterprises, small hydro owners), national and international non-governmental organizations to discuss the potential purchase of emission reductions from the proposed subprojects. Likewise, extensive consultations and stakeholder seminars will be carried out during preparation of the associated subprojects. Public Consultation and Disclosure. Each of the future subprojects shall carry out public consultations in the context of the environmental/social assessments. The Czech law includes the requirements for informing the concerned government bodies as well as notice to the public about planned project activities, and Act 100/2001 Coll. makes important provisions for public hearings. However, these requirements fall short of the more demanding World Bank standard for public consultation and disclosure. Under the PCF Umbrella Project, it will be required that the Bank's standard procedure for public consultation and disclosure be applied. Thus, for Category A subprojects, affected local communities, population and civil society organizations should be consulted at least twice: at the time of the preparation of the terms of reference for an EA study and after a draft EA Report is prepared. For Category B subprojects, at least one public consultation meeting should be held. In all cases, the public consultation meeting results will be documented. E. Safeguards Classification. Category is determined by the highest impact in any policy. Or on basis of cumulative impacts from multiple safeguards. Whenever an individual safeguard policy is triggered the provisions of that policy apply. [ ] SI. - Significant, cumulative and/or irreversible impacts; or significant technical and institutional risks in management of one or more safeguard areas [ ] S2. - One or more safeguard policies are triggered, but effects are limited in their impact and are technically and institutionally manageable [ ] S3. - No safeguard issues [X] SF. - Financial intermediary projects, social development funds, community driven development or similar projects which require a safeguard framework or programmatic approach to address safeguard issues. F. Disclosure Requirements Environmental Assessment/Analysis/Management Plan: Expected Actual Date of receipt by the Bank 8/1/2002 9/17/2002 Date of "in-country" disclosure 3/12/2003 3/12/2003 Date of submission to InfoShop 3/14/2003 3/10/2003 Date of distributing the Exec. Summary of the EA to the ED Not Applicable Not Applicable (For category A projects) Resettlement Action Plan/Framework: Expected Actual Date of receipt by the Bank Not Applicable Not Applicable Date of "in-country" disclosure Not Applicable Not Applicable 6 ISDS Date of submission to InfoShop Not Applicable Not Applicable Indigenous Peoples Development Plan/Framework. Expected Actual Date of receipt by the Bank Not Applicable Not Applicable Date of "in-country" disclosure Not Applicable Not Applicable Date of submission to InfoShop Not Applicable Not Applicable Pest Management Plan: Expected Actual Date of receipt by the Bank Not Applicable Not Applicable Date of "in-country" disclosure Not Applicable Not Applicable Date of submission to InfoShop Not Applicable Not Applicable Dam Safety Management Plan: Expected Actual Date of receipt by the Bank Not Applicable Not Applicable Date of "in-country" disclosure Not Applicable Not Applicable Date of submission to InfoShop Not Applicable Not Applicable If in-country disclosure of any of the above documents is not expected, please explain why. Si2ned and submitted by Name Date Task Team Leader: Helmut Schreiber 20-Mar-02 Project Safeguards Specialists 1: Victor B. Loksha/Person/World Bank 01-Mar-03 Project Safeguards Specialists 2: Project Safeguards Specialists 3: Approved by: Name Date Regional Safeguards Coordinator: Jane E. Holt 09-Mar-03 Sector Manager/Director: Henk Busz 09-Mar-03 For a list of World Bank news releases on projects and reports, click here CERC ; _ FEEDBACK sIT MAP SHOMWCASEA