INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 04/22/2014 Report No.: 87764 1. Basic Project Data Country: Mauritania, Senegal, Mali Project ID: P107940 Additional Project ID (if any): P145657 and P145664 Project Name: Banda Gas-to-Power Project Task Team Leader: Moez Cherif Estimated Appraisal Date: Estimated Board Date: May 22, 2014 Managing Unit: AFTG2 Lending Instrument: Partial Risk Guarantee Sector: General energy sector (60%); Oil and gas (40%) Theme: Infrastructure services for private sector development (100%) IBRD Amount (US$m.): 0 IDA Amount (US$m.): 0 GEF Amount (US$m.): 0 PCF Amount (US$m.): 0 Other financing amounts by source: Borrower 0.00 IBRD Guarantee 0.00 IDA Guarantee 261.00 261.00 Environmental Category: A - Full Assessment Simplified Processing Simple [] Repeater [] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] or OP 8.00 (Rapid Response to Crises and Emergencies) 2. Project Objectives The Project’s Development Objective (PDO) is to enable production of natural gas for generation of electricity to reduce the cost and increase the supply for Mauritanian households and industry, and enable regional integration through exports of electric power from Mauritania to Senegal and Mali. 3. Project Description The World Bank Group’s proposed intervention in support of the 300 MW Banda Gas-to- Power Project includes support from both IDA and MIGA through: (i) Three IDA credit enhancement partial risk guarantees (PRGs) backstopping: a) the creditworthiness of SPEG (of Mauritania) for the payment of gas under the Gas Sales Agreement (GSA), and b) the credit worthiness of two public utilities, SENELEC (of Senegal), and EDM (of Mali), for the payment of electricity exports received under their respective Power Purchase Agreements (PPAs); and (ii) MIGA guarantees covering: a) termination payment under Breach of Contract (BoC) of the GSA backstopped by GoMR; b) BoC coverage of the Production Sharing Agreement and c) equity investment of some of the JV partners against the risks of Transfer Restriction, Expropriation and War and Civil Disturbance. The Banda Gas-to-Power Project consists of the following components: (a) the upstream Banda offshore gas field production, transmission and processing infrastructure (the Banda Gas Project); (b) power generation from Banda gas in Mauritania (the SPEG Power Project) and (c) existing and new power transmission lines to evacuate power from the Project. 4. Project Location and salient physical characteristics relevant to the safeguard analysis The Banda gas field is located approximately 55 km offshore of Nouakchott. The Banda Gas Project consists of two subsea wells tied back to an onshore gas processing plant via a subsea production manifold and a 10-inch sub-sea pipeline. The gas processing plant will be located 14 km north of Nouakchott and 6 km inland, close to the newly constructed SPEG power plant. The SPEG Power Project is designed to be implemented in two phases to match the evolution of electricity demand in Mauritania (and the region) and optimize capital allocation. The proposed WBG intervention is focused on the first phase of SPEG Power Project, which consists of construction of a 300 MW power plant located in the north of Nouakchott that will operate using Banda gas. The SPEG plant includes 180 MW dual fuel engines (HFO, natural gas) to be commissioned by March 2015, and 120 MW combined cycle gas turbines (CCGT) to be commissioned by mid-2016. The 300MW SPEG plant will sell all its generation to SOMELEC, who will, in turn, (a) sell power to Kinross, SNIM and its regular customers in Mauritania, and (b) export power to Senegal (SENELEC) and Mali (EDM). Since the Banda gas field development is a private sector project, jointly supported by IDA and MIGA, the proposed operation will follow the World Bank Performance Standards applicable to private sector projects (OP 4.03). In June 2012 the Board approved the adoption of the IFC Performance Standards as the World Bank Performance Standards for private sector projects supported by IBRD/IDA. The project has been classified as a Category A project in accordance with the World Bank Performance Standards. Power generated by SPEG to SOMELEC will be evacuated through several routes: (i) a greenfield high voltage transmission line to Nouadhibou with a spur to Tasiast, site of Kinross gold mine (the North HV line) owned and operated by SOMELEC and financed by the Saudi Fund, (ii) the existing OMVS high voltage transmission line that will be connected to the power plant through a short extension (the OMVS HV line and the OMVS HV extension), funded by SOMELEC and (iii) a new high voltage transmission line between Mauritania and Senegal, to be financed by AFD and IsDB, with a wheeling capacity of 250 MW (the South HV line). The Banda Gas Project ESIA (upstream component of this operation), which has already been disclosed in August 30, 2013, has been prepared by Tullow Petroleum and has identified all significant environmental and social impacts as well as the impacts on terrestrial biodiversity. Both impacts on the marine as well as the terrestrial biodiversity have been evaluated as minimal. The social impacts are very limited. A joint MIGA and IDA Environmental and Social Review Summary for the upstream component were disclosed on March 12 2014 and can be found on www.miga.org. The ESIA for the SPEG facilities (including the North HV line) was disclosed on December 2, 2013. SPEG has developed a full ESIA and a Resettlement Policy Framework (RPF) for the SPEG project, including the North HV line and the OMVS HV line extension. The full ESIA is based on a preliminary ESIA completed in 2012. The ESIA has been approved by the Bank and disclosed in country and through the Bank’s Infoshop on December 2, 2013. The SPEG RPF has been approved and disclosed on March 19, 2014. An ESIA for the South HV line has been submitted by the project sponsor on February 19, 2014 to the Bank for review. This ESIA was prepared by Tractebel, the same consulting firm that also undertook the feasibility and engineering study for this infrastructure. Management has reviewed the ESIA and found that the environmental and social risks of this transmission line are manageable. The ESIA meets the criteria of Performance Standard 1 of O.P. 4.03 in that the process of identifying risks and impacts has consisted of an adequate, accurate, and objective evaluation and presentation, prepared by competent professionals. The French Development Agency (AFD), who will be co-financing the South HV infrastructure with IsDB, has similar safeguards policies to those of the Bank. In conclusion the Bank has reviewed the South HV Line ESIA, in its two components (Mauritania and Senegal), and has found it satisfactory. The ESIA for the South HV line for the Mauritania portion of the line was disclosed in the Infoshop on March 3, 2014 (The SPEG RPF that was disclosed on March 19, 2014 also covers the Mauritania portion of the South HV line). The ESIA and the Resettlement Policy Framework (RPF) for the South HV line for the Senegal portion of the line have been disclosed in country and at the Bank Infoshop on April 17, 2014. The portion of the South HV Line located in Senegal will be owned and operated by SENELEC. It is within the Project's area of influence while recognizing that it is not under the direct control of any of the beneficiaries of the IDA Guarantees. As such, the assessment and mitigation of risks for this section takes into account the level of control and influence the Guarantee beneficiaries can exercise vis-à-vis SENELEC. In this case, the ESIA for this section has in fact been shared with the Bank and has been reviewed to assess the risks related to this linked infrastructure. Moreover, the fact that his transmission line will be co-financed by the French Development Agency (AFD) has been taken into account. AFD is applying environmental and social safeguards policies similar to that of the World Bank Performance Standards and the ESIA for this infrastructure explicitly refers to the World Bank Performance Standards. IDA has worked in close coordination with AFD during the review of the ESIA (for both the Mauritania and Senegal segments). An IDA Environmental and Social Review Summary relative to the downstream component, composed of the SPEG power plants, the North HV Line and the South HV Line until the border with Senegal, was disclosed on March 21, 2014. The Table below provides further details on what Performance Standards apply to the project and how the clients have addressed these Performance Standards. 5. Environmental and Social Safeguards Specialists Hocine Chalal (AFTN1), Amadou Konare (Consultant), Salamata Bal (AFTCS) World Bank Performance Standards triggered Yes No TBD PS 1: Assessment and Management of Environmental and X Social Risks and Impacts The Environmental and Social Impact Assessment (ESIA) for the proposed project (upstream component) was disclosed in the Infoshop on August 30, 2013. For the downstream component: (i) the ESIA for the SPEG power plants and the North HV line was reviewed and disclosed in the Infoshop on December 2, 2013; (ii) the ESIA for the South HV line for the Mauritania portion of the line was reviewed and disclosed in the Infoshop on March 3, 2014; and (iii) the ESIA for the South HV line for the Senegal portion of the line were disclosed in the Infoshop on April 17, 2014. The joint MIGA/IDA Environmental and Social Review Summary (ESRS) for the upstream component was reviewed and disclosed on MIGA website on March 12, 2014 and the ESRS for the downstream component was reviewed and disclosed in the Infoshop on March 21, 2014. The Banda gas field is located approximately 55 km offshore of Nouakchott. It is owned by a consortium of investors, with Tullow Oil Plc (Tullow) as the majority shareholder and operator in the Joint Venture (JV). Tullow has prepared a field development plan (subsequently approved by the Government of Mauritania in January 2013) which provides for production of up to 65 million standard cubic feet per day of gas over 20 years. It consists of the drilling and installation of two subsea wells tied back to an onshore gas processing plant via a subsea production manifold and a 10-inch pipelines. Key risks include: vessel collision risk, economic displacement through loss of access to fishing grounds (in the unlikely event of a spill), water and sediment contamination, discharges of commissioning fluids, noise, habitat loss and impacts to marine and coastal habitats and species, well blowout and pipeline rupture, soil erosion, hazardous materials and waste generation and air emissions (including CO2). Based on current information, the upstream portion of the project has not identified impacts that could not be avoided or reduced to acceptable levels through the application of the proposed mitigation measures, as described in the Environmental Management Plan (EMP). The 180 MW dual fuel power plant currently being built and that will be operated for a period of five years by the company Wartsila has not been assessed specifically in this SPEG ESIA, but both the analysis of cumulative impacts and the hazards assessment have taken into consideration the impacts of its operation. SPEG is a new entity set-up by its shareholders (SOMELEC, Kinross and SNIM) for being the entity responsible for the new infrastructures covered by the downstream ESRS with the notable mention that after their construction the North HV and South HV transmission lines will be transferred respectively to SOMELEC and to OMVS. The due diligence carried out by the IDA team has confirmed that SPEG has very little capacity particularly for overseeing the implementation of the environmental and social management plans and the resettlement plans and will have to consequently sub-contract these missions to external specialized firm or other capable government agencies. The two instruments above specify clearly the areas of influence and the monitoring objectives to be achieved and constitute and environmental management system that will ensure the environmental and social integrity of the project. The SPEG ESIA includes a hazards assessment that covers the main risks of accident that could affect the power plant. It also includes an analysis of the four following alternatives: (i) “no project� option; (ii) choice of fuel and supplies; (iii) choice of power plant location and; (iv) route selection for the transmission line. The South HV line project has been segmented in three parts for the purpose of the assessment: - 193km Segment 1: 225 kV line from the new power plant in Nouakchott to the Beni Nadji substation (Mauritania). - 76km Segment 2: 225kV line from Beni Nadji (Mauritania) to Saint Louis substation (Senegal). For this segment three variants have been studied from a technical and environmental point of view as this segment of the line crosses the Senegal River. - 144km Segment: from Saint Louis (Senegal) to Tobène (Senegal) The inter-connection will necessitate the construction of a sub-station in Saint-Louis as well as an extension of the existing substations of Beni Nadji (Mauritania) and Tobène (Senegal). The ESIA assessed several possible corridors and on the Mauritania side concluded that the best compromise between economic, social and environmental imperatives would to recommend a corridor that would avoid passing through the Diawling National Park, an important migratory bird nesting place that made the park a recognized Ramsar site in 1994. However on the Senegal side it would be very difficult to avoid the Senegal River delta and avoid passing near sensitive ecological areas such as the Djoudj national Park. An alternative route is proposed in the ESIA in order to minimize the impact, particularly on birds, on the sensitive ecological zones mentioned as the line crosses the Senegal River. The extra length of line would be 11km. It is not expected that specific permits will have to be obtained as the lines (North HV and well as South HV) will not go through protected areas. The E & S management Plan and Monitoring Plan are exhaustive and cover the pre-construction phase, the construction phase and the post-construction phase and also cover the issue of bird collisions with the line. However, the capacity of SPEG, SOMELEC and SENELEC (SENELEC will have to implement the ESMP for the segment of the line on the Senegalese territory in compliance with the Senegalese environmental regulations and also on the basis of the World Bank Performance Standards) to implement the management plans contained in the above ESIAs is limited and would have to be enhanced through sub-contracting their implementation to a specialized entity or another competent governmental agency. IDA will ensure that environmental and social requirements will be passed on to the builder and operator of the SPEG power Plant. PS 2: Labor and Working Conditions X The clients will establish safe and healthy working conditions for their employees, promote fair treatment, non-discrimination and equal opportunity, promote compliance with national employment and labor laws, protect workers, especially vulnerable groups, will not employ children and avoid the use of forced labor. Adequate Environmental, Health and Safety Plans will be prepared and implemented by Tullow, SPEG and their contractors and sub-contractors, as well as SOMELEC, for the Mauritania segment of the South HV Line. PS 3: Resource Efficiency and Pollution Prevention X The clients will avoid or minimize impacts on human health and the environment by reducing pollution from project activities (waste management plans will be prepared as part of the EMPs in the case of the upstream component). The clients will promote more sustainable use of natural resources, such as water and energy, and reduce project-related greenhouse gas (GHG) emissions. PS 4: Community Health, Safety, and Security X The clients will anticipate and avoid impacts on human health and safety of nearby communities, personnel and property. Workers will be housed in Nouakchott, so that no separate worker camps will be needed. Tullow, SPEG and their contractors and sub-contractors will carry out HIV/AIDS prevention activities. The ESIAs/RPFs prepared for the three components have consulted upon with institutional stakeholders as well as with the potentially affected population. PS 5: Land Acquisition and Involuntary X Resettlement A Resettlement Policy Framework (RPF) for the SPEG Power Project has been prepared and extended to cover the land acquisition necessary for the construction and operation of the gas pipeline from its point of landing to the gas processing and power plant site and disclosed in country and in the Bank’s Infoshop at least 60 days before Board. An RPF has been prepared because final sitings and alignments are yet to be determined for the onshore civil works in Mauritania (gas processing and power plant sites, transmission lines); resettlement impacts are expected to be moderate. In Mauritania, Tullow and the Government of Mauritania are negotiating which of them will pay the compensation; both sides have agreed that such compensation will be undertaken in accordance with PS 5. For the downstream portion, SPEG will handle any compensation related to the power plants and SOMELEC will handle any compensation related to the transmission lines. An RPF for the South HV Line has been prepared to cover both the Mauritania and Senegal segments and has been disclosed. When the final corridor for the transmission lines (both for the North and South HV Lines) have been selected and it has been identified that people will be affected, RAPs will be prepared, consulted upon, and disclosed in country and in the Bank’s Infoshop before any construction activity starts. PS 6: Biodiversity Conservation and Sustainable X Management of Living Natural Resources The Banda Gas-to-Power upstream and downstream project components may encounter sensitive marine and terrestrial ecosystems, including natural habitats. These potential impacts have been identified by the three ESIAs. Adequate safeguard management plans have been developed as part of the EIAs. This World Bank Performance Standard has been triggered even though the impacts on marine and terrestrial biodiversity have been evaluated as manageable. For the South HV line ESIA, the corridor recommended following the ESIA process will minimize impacts as it avoids the Park of Diawling on the Mauritanian side of the Senegal river and the Park of Djoudj on the Senegalese side, both being very rich biodiversity areas. PS 7: Indigenous Peoples X There are no Indigenous Peoples in the project area. PS 8: Cultural Heritage X The Tullow EIA has identified 13 cultural heritage Late Stone Age sites on the project footprint of the gas treatment plant. An adequate cultural heritage management plan has been developed as part of the Tullow EMP. The SPEG ESIA did not identify any cultural heritage sites in the project area. The South HV line ESIA has not reported significant potential cultural heritage sites in relation to that infrastructure. II. Key Safeguard Policy Issues and Their Management A. 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: This project has been classified as a Category A project under the World Bank Performance Standards applicable to private sector projects and the applicable World Bank Group Environmental, Health and Safety Guidelines of April 2007. The project will install upstream infrastructures consisting of two offshore gas wells at around 230 meter depth, a gathering platform, a 10-inch gas pipeline of 57 km offshore and 5.6 km onshore, and a gas-processing plant. The key environmental and social issues for this part of the project include: potential impacts during construction and operation on sensitive marine species, marine ecosystems and marine protected areas, including whale species, various turtle species and their nesting sites, fish species and fisheries, migratory birds and potential impacts on the Banc d’Arguin National Park. The EIA prepared by Tullow clearly demonstrates that the risks of these potential impacts to occur are minimal and manageable. Also the potential risk for minor oil and diesel spills is minimal and will be managed through the implementation of an Oil Spill Contingency Plan prepared and disclosed before the start of operations. The EIA demonstrated that the potential impacts on Important Bird Areas, migratory birds and fisheries resources are minimal and manageable. A specific analysis was carried out for the risks for navigation and the risks of collisions with other vessels and the extent of noise disturbance of the gas-processing facility to nearby communities 5 km away, both of which are manageable. The Tullow EIA developed adequate mitigation measures for all significant potential environmental and social impacts and risks identified. The project will also include the SPEG 300 MW power plant comprised of 180 MW dual fuel engines (HFO, natural gas), and 120 MW combined cycle gas turbines (CCGT) located near Nouakchott, as well as a new high voltage transmission line from Nouakchott to Nouadhibou with a spur to Tasiast (site of the Kinross gold mine). The ESIA for this part of the project has identified a potential issue with air quality when the dual power plant will be using heavy fuel in the interim period before the gas is made available and in case of shut-down of the future gas pipeline or gas plant. The main mitigating measures will be to minimize the interim period without availability of gas and minimize during operation the causes of gas shut-off. Finally the project will also use a downstream infrastructure consisting of the southbound transmission line to export power to Senegal. The main impacts identified are related to the choice of the most appropriate corridor The ESIA has thus recommended a slightly more expensive route that would avoid the impacts on an ecologically sensitive area. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: There has been no significant indirect, long term, irreversible or cumulative impacts identified in relation to any of the infrastructures mentioned above. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. The land-fall for the gas pipeline has been chosen north of Nouakchott in order to avoid potential land acquisition problems linked to the former land fall-chosen south of Nouakchott. The onshore gas pipeline is expected to cross land designated for a proposed multi-use real estate project. This issue has yet to be resolved and Tullow will continue discussions with the Government of Mauritania to agree which party will be responsible for compensation. Any resolution of this matter will be undertaken in compliance with Performance Standard 5.The southbound and northbound assessments for the respective transmission lines have included an analysis of alternative corridors in order to avoid areas of sensitive ecological interest. 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. The main guarantee beneficiary for the upstream component, Tullow, has prepared a good ESIA and EMP and has adequate environmental and social management capacity. It has been assessed that Tullow has the capacity to manage and supervise the environmental and social mitigating and monitoring measures prescribed by the upstream ESIA. SPEG and SOMELEC do not have the capacity to manage the environmental and social aspects of the project (downstream in Mauritania). In order to mitigate this lack of capacity SPEG and SOMELEC will have to contract a specialized entity to carry out this task on their behalf. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. The above mentioned three ESIAs carried out Public Consultation activities during the screening and scoping phases in order to take community and stakeholder concerns into account. Public Consultations were carried out and have been evaluated as adequate. The ESIAs include a Chapter on Public Consultation with annexes that include summaries of meetings. B. Disclosure Requirements Date Environmental and Social Review Summary: Dates of "in-country" disclosure Tullow ESIA: August 30, 2013; SPEG (Power Plant and North T-Line): December 2, 2013; SPEG RPF: March 19, 2014; SOMELEC (South T-Line): March 4, 2014 Date of submission to InfoShop for ESIA and March 19, 2014 for RPF; SENELEC (South T-line) ESIA and RPF on April 17, 2014; ESRS for upstream on March 12 2014 on MIGA Website (http://www.miga.org/); and ESRS for downstream on March 21 2014. For Category A projects, date of distributing the Executive Summaries of the client’s ESIA to the April 22, 2014 Executive Directors If in-country disclosure of any of the above documents is not expected, please explain why: N/A C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) Client’s Environment and Social Assessment Does the project require a stand-alone Environmental and Social Yes [X] No [ ] N/A [ ] Assessment (including EMP) report? If yes, then did the Regional Environment Unit or Sector Yes [X] No [ ] N/A [ ] Manager (SM) review and approve the EA report? Client’s Environmental and Social Management System Has the client developed an appropriately detailed ESMS, and Yes [X] No [ ] N/A [ ] does the client have the technical and organizational capacity to Tullow: yes implement it? SPEG and SOMELEC: to be strengthened Labor and Working Conditions Does the client have a written human resources policy available Yes [X] No [ ] N/A [ ] to all employees that describes labor and working conditions? Tullow: yes SPEG and SOMELEC: to be prepared Biodiversity and Natural Resource Management If PS 6 is applicable, would the project result in any significant Yes [ ] No [X] N/A [ ] conversion or degradation of critical natural habitats? If the project would result in significant conversion or Yes [X] No [ ] N/A [ ] degradation of other (non-critical) natural habitats, does the project include mitigation measures acceptable to the Bank? If the project entails use of living natural resources, has Yes [ ] No [ ] N/A [X] certification been obtained or a time-bound plan established to obtain certification? Physical Cultural Resources If PS 8 is applicable, does the project design include adequate Yes [X] No [ ] N/A [ ] measures related to physical cultural resources? Indigenous Peoples If PS 7 applicable, and have Indigenous Peoples communities Yes [ ] No [ ] N/A [X] been consulted in accordance with requirements of PS 7? Have the requirements for Free Prior Informed Consent been Yes [ ] No [ ] N/A [X] met, and is there reasonable evidence of broad community support by the affected Indigenous Peoples communities? Involuntary Resettlement If PS 5 is applicable, have the requirements been complied with Yes [X] No [ ] N/A [ ] by the client? Pollution Prevention and Efficient Use of Resources Does the project comply with good international industry Yes [X] No [ ] N/A [ ] practice as presented in the WBG EHSGs or a similar internationally recognized benchmark? Is the project designed for energy efficiency and waste Yes [X] No [ ] N/A [ ] minimization? Community Health and Safety Has the assessment determined that local communities could Yes [X] No [ ] N/A [ ] face significant adverse impacts in event of an accident or emergency situation associated with the project? If so, has an Emergency Preparedness Plan (EPP) been prepared Yes [X] No [ ] N/A [ ] and arrangements been made for public awareness and training? Projects on International Waterways Have the other riparians been notified by the Bank of the Yes [ ] No [ ] N/A [X] project? Projects in Disputed Areas Has the memo conveying all pertinent information on the Yes [ ] No [ ] N/A [X] international aspects of the project, including the procedures to be followed, and the recommendations for dealing with the issue, been prepared by the Bank? Disclosure If Category A or B, has the ESRS been sent to the World Bank's Yes [X] No [ ] N/A [ ] Infoshop? Have relevant assessment documents prepared by the client been Yes [X] No [ ] N/A [ ] disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? Monitoring and Reporting Has the client agreed to submit an Annual Monitoring Report to Yes [X] No [ ] N/A [ ] the Bank to report on the management of environmental and will be included social risks and impacts, and does the Legal Agreement contain this provision? Has the client agreed to report at least annually to local affected Yes [X] No [ ] N/A [ ] communities on how the project is performing with respect to environmental and social risks and impacts of concern to those communities? D. Approvals Signed and submitted by: Name Date Task Team Leader: Moez Cherif 04/22/2014 Environmental Specialist: Hocine Chalal Social Development Specialist Salamata Bal Additional Environmental and/or Social Development Specialist(s): Approved by: Regional Safeguards Coordinator: Alexandra Bezeredi 04/23/2014 Comments: Sector Manager: Meike van Ginneken Comments: