INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE Public Disclosure Authorized 1. Basic Information Report No.: Date prepared/updated: 11/16/2006 1. Basic Project Data P098572 Country: Philippines Project ID: Project Name: Northern Negros Geothermal Power Project Task Team Leader: Selina Shum Date: N/A Estimated A raisal Date: November 2006 Estimated Board carbon finance Managing Unit: EASEG Lending Instrumenf: -_- Sector: Renewable energy Rural services and Theme. Infrastructure services for private sector development, infrastructure, environmental policies and institutions Public Disclosure Authorized IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 l PCF Amount (US$m.): 8.30 Other financing amounts by source (US$m.): ER/RECIPIENT 38 BORROW 107 JBIC Environmental Category: A - Partial Assessment Repeater [I - Simplified Processing N/A Simple [] Yes ] NNo i Is this project processed under OP 8.50 (Emergency Recovery) 2. Project Objectives power plant in the Pataan The project aims to develop a 40-MW capacity geothermal of Negros. The additional sector of the Mt. Kanlaon geothermal prospect in the island Public Disclosure Authorized in demand for electricity power generating capacity will help meet the projected growth steam for power generation will in the Negros-Panay Grid. The utilization of geothermal fuels and contribute towards the also help reduce the country's dependence on imported global objective of reducing greenhouse gas (GHG) emission. 3. Project Description within the Mt. Kanlaon 'I'he proposed 40MW geothermal project is the first development the multiple-use and buffer zones geothernal prospect, a 4,191-ha block which includes Geological exploration works of the 24,388-ha Mt. Kanlaon Natural Park (MKNP). drillings were conducted within the prospect began in the late 1970s and exploratory The present project is located within Catugasan, Hagdan and Pataan sectors in 1994-95. commercially viable of the three in the Pataan sector which was found to be the most been delineated outside the Mt. Kanlaon sectors. '\ development block of 220-ha has major components: Natural Park. The present project includes the following MW power plant: * Construction, installation and commissioning of a 40 wells; Public Disclosure Authorized * Drilling and maintenance of 15 production and 3 reinjection and Reinjection System (FCRS . * Construction/installation of the Fluid Collection stations and associated control consisting of a network of pipelines, separator facilities; and, facility and a 24-km, 138-kV. single * Construction and operation a switchyard circuit spur transmission line. in geothennal power development in T he project builds on PNOC-EDC's experiences (200MW) and Bacon-Manito (20(MW 1. Leyte (700MW), Palinpinon (1 92MW), Mt. Apo in 1997 and as of this update, most of the Development works in the project site started and all wells have already been drilled. projeci's civil works have already been completed of FCRS, the power plant and The current activities are geared towards the construction the transmission line. relevant to the safeguard 4. Project Location and salient physical characteristics analysis slope of the Mt. Kanlaon The proposed project will be located at the northwestern City, Negros Occidental. 'rhis is volcano, in Sitio Pataan, Barangay Mailum, Bago the project were formerly private outside of the MKNP. The lands occupied by generally mountainous with elevations agricultural lots. The topograplly of the area is from 70(-S0() masl. Kanlaon Natural Park The Mt. Kanlaon Geothermal Prospect and Mt. Contract (prospect) area includes portion The 4,191-ha Mt. Kanlaon Geothermal Service Results of geological explorationis in the of the 24,388-ha Mt. Kanlaon National Park. block namely, the Catugasan, llagdan and 1980s have identified three sectors within the determined that the commercially viable Pataan. Subsequent resource assessments have have also determnined that although the resource is in the Pataan sector. The assessments 40 MW geothermal power plant, part of the resource outside the Park is able to sustain a from) inside the Park. resource is situated (or can be accessed only system may allow PNOC-IEDC to Recent developments in Philippine protected area The National Integrated Protected Area develop the geothermal resource inside the Park. others, the re-classification and re- System (NIPAS) law of 1992 provides for, among Parks. It also provides for the delineation of all protected areas such as National where controlled economic activities establishment of "buffer" or "multiple-use" zones the fringes of the protected area to shield such as energy development may be allowed at NIPAS, a bill converting the Mt. ii from further human encroachment. Pursuant to Park (MKNP) underwent public Canlaon National Park into Mt. Kanlaon Natural 13, 1997. The bill which desigilates a consultations from September 23, 1996 to January as a buffer zone specifically 169-ha area within the northwestern flank of MKNP enacted into law by Philippine reserved for geothermal energy development was II, 2001. The implementing rules and Congress as Republic Act No. 9154 in August have yet to be issued by DENR. PNOC- regulations for the utilization of the buffer zone in the future. However as far as the FDC has indicated it may develop this buffer zone all development activities outslde the present 40MW project is concerned, it is restricting boundaries of the MKNP. 5. Environmental and Social Safeguards Specialists Mr. .lonas Bautista (EASEN) Mr .osefo Tuyor (EASEN) Ms Victoria Florian S. Lazaro (EASSD) Yes No 1 6. Safeguard Policies Triggered X EEnvironmental Assessment (OP/BP 4.01) (OP/BP 4.04) X Natural Habitats X (OP/BP 4.36) Forests X (OP 4.09) Pest Management X Resources (OP/BP 4.11) Physical Cultural X Peoples (OP/BP 4.10) - Indigenous X Involuntary Resettlement (OP/BP 4.12) X of Dams (OP/BP 4.37) Safety X l on International Waterways (OP/BP 7.50) ___- Projects | X Projects in Disputed Areas (OP/BP 7.60) I. Key Safeguard Policy Issues and Their Management A. Sunmmary of Key Safeguard Issues with the proposed project l Describe any safeguard issues and impacts associated and/or irreversible impacts; Identify and describe any potential large scale, significant include displacement of 43 farming The safeguard issues associated with the project lands into industrial use, the families, the conversion of 100 hectares of agricultural Mt. Kanlaon Natural Park, the hydrogen alleged encroachment of the project into the and the possible contamination of surface sulfide (H1-S) emission from the power plant have been well analyzed, clarified water and groundwater. All of these issues however consultations, including the fonnulation and resolved in the EIA report and the various and implementation of a resettlement plan. has implemented a resettlemenm On the issue of displacement of families, PNOC-EDC Under the program, the 25 families and compensation program for the affected families. are now living within a newl-, who have opted to avail of the resettlement package who have opted to receive cash developed resettlement site while the 18 families of land use conversion of the projecl compensation have since left the area. On the issue of Agriculture (DA), the site underwent thorough screening by the Department other government agencies involved Department of Agrarian Reform (DAR), DENR and however were mostly of marginal in land use conversion process. The converted lands and hence were clearly unsuitable for productivity being mountainous and erosion-prone of encroachment into the Natural Park. continuous agricultural production. On the issue within alienable and disposable PNOC-EDC has restricted all development activities impacts, the hydrogen sulfide emission lands outside the Park. In terms of environmental levels with maximum concentration from the power plant is expected to be at acceptable water quality is expected to be only in predicted at around 60ptg/Ncm while impacts on earth-moving activities in the protect the form of short term turbidity due to remaining as spent geothermal brine will he site. Contamination of river water is highly unlikely from the earth's surface reinjected back to the geothennal reservoir 2-3 km underneath interaction of geothermal wells and Finally, the contamination of groundwater due to the of an impenneable cap rock that the aquifer has been ruled out because of the presence wells are lined with cement and steel separates the two plus the fact that the geothermal casing up to a depth of 1,600 m. impacts due to anticipated future 2. Describe any potential indirect and/or long term activities in the project area: buffer zone within the nortliweste-rti PNOC'-EDC may develop in the future the 169-ha energy development. This will be flank ot MKNP, specifically reserved for geothermal covered by a separate EIA study. to help avoid or minimiize 3. Describe any project altematives (if relevant) considered adverse impacts. such as hydro, wind, solar, biomass, The development of indigenous energy resources Philippines. Geothermal is the mosL natural gas and geothermal are encouraged in the Negros-Panay Grid. It also stands out readily available indigenous energy resource in the land area requirements. The proposed as the better alternative in terms of investment and increase in power demand in the 40MW geothermal plant will help meet projected energy sources are not readily islands of Negros and Panay. As other indigenous the installation of additional generating available, the most feasible alternative would be would entail either of the capacity from diesel or coal-fired power plants. This or the acquisition of new diesel powk et repair/overhaul of old diesel-fired power plants one option but these plants are not plants and barges. Bagasse cogeneration plants are base load plants. safeguard policy issues. Provide 4. Descrihe measures taken by the borrower to address the measures described. an assessment of borrower capacity to plan and implement 4.01) a) Re: Environmental Assessment (OP/BP/GP EAs, one for the geothermal stcairi hteld The project sponsor has prepared two separate The EA for the geothermal steam development and another for the Transmission Line.