SUMMARY ENVIRONMENTAL IMPACT ASSESSMENT

HEBEI ZHANGHEWAN PUMPED STORAGE PROJECT

IN THE

PEOPLE’S REPUBLIC OF

April 2002 CURRENCY EQUIVALENTS (as of 1 March 2002)

Currency Unit − Yuan (Y) Y1.00 = 0.1028 $1.00 = 8.2766

ABBREVIATIONS

ADB − Asian Development Bank asl − above sea level EIA − environmental impact assessment EPB − environmental protection bureau EPO − environmental protection office HEP − Electric Power Company Ltd. HSPG − Hebei South Power Grid PRC − People’s Republic of China

SO2 − sulfur dioxide TSP − total suspended particulates ZPSPP − Zhanghewan Pumped Storage Power Plant

WEIGHTS AND MEASURES

0C − degrees Celsius kg/m3 − kilogram per cubic meter km − kilometer km2 − square kilometer kV − kilovolt ha − hectare m − meter m3 − cubic meter m3/s − cubic meter per second MW − megawatt t − ton t/y − ton per year

NOTE

In this report, “$” refers to US dollars. CONTENTS

Page

MAP ii

I. INTRODUCTION 1

II. DESCRIPTION OF THE PROJECT 1

III. DESCRIPTION OF THE ENVIRONMENT 3

A. Physical Environment 4 B. Biological Environment 5 C. Socioeconomics 6

IV. ALTERNATIVES 7

A. No Action Alternative 8 B. Alternative Power Sources 8 C. Alternative Locations 8 D. Alternative Sites for the Upper Reservoir 9 E. Alternative Power Capacities and Water Levels 9

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 9

A. Physical Environment 12 B. Biological Environment 13 C. Socioeconomics 15

VI. ECONOMIC ASSESSMENT 16

A. Project Costs 16 B. Project Benefits 17 C. Costs for Environmental Programs 18

VII. INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PROGRAM 18

VIII. PUBLIC INVOLVEMENT 20

IX. CONCLUSIONS 21

APPENDIX

1. Redeployment Plan for Power Plant Workers 22 ii

I. INTRODUCTION

1. This document summarizes the benefits, adverse effects, and recommended mitigation and monitoring measures related to the construction and operation of the Hebei Zhanghewan Pumped Storage and Rural Electrification Project (the Project) in Hebei province in the People’s Republic of China (PRC). The environmental impact assessment (EIA) report was prepared by the Hebei Provincial Government based on feasibility studies and environmental studies prepared by PRC institutions.1 The Asian Development Bank (ADB) has provided support for project design and EIA preparation beginning in 1995.2 Concurrently, several local government units 3 conducted an analysis of the human population residing in the reservoir area and developed a comprehensive resettlement plan. An ADB Fact-Finding Mission visited the PRC in March 2002. This SEIA is a document of the borrower and has not been reviewed nor approved by ADB.

II. DESCRIPTION OF THE PROJECT

2. At present, the Hebei South Power Grid (HSPG) experiences frequent interruptions in the supply of electric power due to inadequate generating capacity in the grid to meet peak demand. Hebei is one of the few provinces in the PRC with a power shortage. These interruptions have limited economic growth of the area and have reduced the quality of life in the vicinity of the coal-fired generating stations. As a remedial measure, the Hebei Electric Power Company Ltd. (HEP) has operated available coal-fired power generating plants to meet daily peak demand in the grid. Power output from coal-fired generating plants cannot be varied as quickly as that from other types of plants; consequently, operation of coal-fired plants to meet peak demand is extremely inefficient compared with other alternatives.

3. The Project will provide 1,000 megawatts (MW) of new peak-load generating capacity that can be operated with high flexibility; a new 63 kilometer (km) 500 kilovolt (kV) transmission line; expanded rural electrification; closure of 505 MW of capacity at old, inefficient power plants; expansion of irrigation capacity from 867 hectares (ha) to 8167 ha; and institutional strengthening of HEP. The Project will provide capability for “peak shaving” and “valley filling,” enabling more efficient operation of existing coal-fired generating stations that are currently operated on a peaking basis. It will improve grid operations and reduce the frequency and duration of power supply interruptions. All electric supply customers in the HSPG will benefit from the Projecta total of over 45 million people.

4. The Government's program to reduce poverty depends partly on improving infrastructure in the rural areas, particularly in poverty-prone counties. The rural electrification component will improve the social and economic conditions in one city and 23 counties; of these, 10 are nationally designated poverty counties and 2 are provincially designated poverty counties. Approximately 9.55 million people will benefit from the rural electrification component, and 330,964 people will directly benefit from the expanded irrigation capacity and reforestation components.

1 The Hebei Electric Power Corporation and the Beijing Hydropower Investigation, Design, and Research Institute prepared the EIA. Investigations were initiated in 1988; the initial EIA report was completed and approved by the State Environmental Protection Agency in 1992; the updated EIA was submitted to State Environment Protection Agency for approval. 2 Guizhou Hongjiadu/Hebei Zhanghewan, Hebei Zhanghewan Pumped Storage Project, supplementary TA. Work on the TA was suspended two times at the PRC Government’s request between 1997 to 2001. 3 Hebei Provincial Resettlement Bureau, in cooperation with Jingxing County Resettlement Bureau, the Zhanghewan Project Office and the Beijing Hydroelectric Investigation, Design and Research Institute. 2

5. The overall goal of the Project is to stimulate further economic growth in Hebei Province by improving the quality of the power supply, electric transmission and distribution systems, and irrigation system. Project performance can be measured primarily by improvement in system delivery capacity, reduction in the frequency and duration of power supply interruptions, increase in the number of rural residents served, and increase in total irrigated agricultural production in the project area.

6. The Project will consist of the following components (see Map):

(i) 1,000 MW pumped storage power station (a closed hydraulic system consisting of upper and lower reservoirs with a turbine/pump station between the reservoirs); a 63 km single-circuit 500 kV transmission line connecting the pumped storage power plant to the HSPG at Shinan Substation;

(ii) closure of 20 small coal-fired power generating units at five power plants, totaling 505 MW capacity;4

(iii) increase of the irrigation capacity of the Zhanghewan reservoir from 1,467 ha to 8,167 ha, and expansion of the existing domestic water supply by 2.4 million cubic meters (m3) per year;

(iv) expansion of the rural electricity supply in 23 counties in the HSPG consisting of substations and distribution systems at the 10 kV, 35 kV, and 110 kV levels;

(v) institutional reforms and introduction of competitive power market in the HSPG; and

(vi) planting of 16,330 ha of various types of trees.

7. The Zhanghewan Pumped Storage Power Plant (ZPSPP) will be operated on a daily basis to meet fluctuations in the demand for power in the HSPG. Typically, the ZPSPP will generate power in the morning and evening hours, corresponding to peak power demands in the HSPG. Pumping will normally occur from late evening to early morning (23:00 to 06:00), consuming approximately 4.7 gigawatt-hours (GWh) per day of electricity generated by large, high-efficiency plants. Generation will replace approximately 3.6 GWh/day of electricity that is currently generated by smaller plants operating at degraded efficiencies.

8. The ZPSPP will utilize the existing Zhanghewan reservoir as its lower reservoir. The maximum water level of the reservoir will be raised by 23.4 meters (m), from 466.6 m above sea level (asl) to 490 m asl, by completing the construction of the original Zhanghewan Dam.5 The existing storage capacity of the Zhanghewan reservoir provides irrigation for 1,467 ha of land along the west bank of the Gantao River. The increased storage capacity of the reservoir will provide reliable water supply to the original design area of 8,167 ha. Operation of the generating station and the irrigation system are compatible according to the design of the Project.

4 Units to be closed are Xingtai (90 MW), Baoding (100 MW), “150” Power Plant (100 MW), Handan (80 MW), and (135 MW). 5 The original construction was discontinued in 1980 due to lack of funding. The dam is owned and operated by the Water Conservancy Department of Jingxing County; associated irrigation systems are also under the control of this government agency. 3

9. The upper reservoir will consist of an artificial impoundment located on the top of Laoyemiao Mountain, immediately adjacent to the Zhanghewan reservoir. Laoyemiao Mountain is a mesa, characteristic of the mountains in the immediate vicinity of the project area. The impoundment’s embankments will be constructed by cut-and-fill methods: Materials removed from the reservoir area will be used to construct the embankments. The entire upper reservoir will be lined with concrete/asphalt to prevent leakage.

10. Four 250 MW pump/turbines and associated equipment will be housed in an underground powerhouse, excavated in the bedrock underlying Laoyemiao Mountain. The powerhouse will be connected to the upper and lower reservoirs via underground penstocks. Material excavated from the tunnels and powerhouse cavern will be used to construct a sediment control dam in the lower Zhanghewan reservoir; this dam will divert sediments to the face of the existing dam, where they can be sluiced downstream and avoid being entrained into the pump turbines.

11. The main access road to the site will be along an existing highway from Jingxing County town to the project site. The existing road will be upgraded and the alignment modified to avoid passing through existing villages.

12. The 500 kV transmission line will be constructed between the ZPSPP and the Shinan Substation located approximately 20 km southeast of Shijiazhuang. The 63 km transmission line will convey electricity generated by the power station to the HSPG and will alternately convey energy to the power station during the pumping phase of operation.

13. The existing irrigation supply system consists of a 47 km canal (Stage 1 Xiyue Canal), along the west bank of the Gantao River between the Zhanghewan Dam and Jingxing town. This canal has a design capacity to supply irrigation water to 1,467 ha, but currently the Zhanghewan reservoir provides sufficient water to reliably serve only 867 ha. The canal system will be expanded to provide additional capacity for delivery of water to 8,167 ha of agricultural land. The irrigation network will be expanded in three areas: Stage 2 of the Xiyue Canal, servicing 2,000 ha; the Dongyue Canal, servicing 2,200 ha; and the Youganjimian- Mianyouyougan Canal, servicing 2,500 ha. The total irrigated area after project completion will be 8,167 ha).

14. The rural electrification component will be implemented in two phases. Phase I includes construction and/or rehabilitation of (i) nineteen 110 kV substations; (ii) fifty three 35 kV substations; (iii) approximately 197 km of 110 kV transmission lines; (iv) approximately 369 km of 35 kV transmission lines; and (v) approximately 4,715 km of 10 kV distribution lines. Retrofit of low-efficiency transformers, and rehabilitation of approximately 6,495 km of low-voltage distribution lines will also be included.6

III. DESCRIPTION OF THE ENVIRONMENT

15. The existing Zhanghewan reservoir is located on the Gantao River in southwestern Hebei Province. The site is approximately 54 km southwest of Shijiazhuang City (capital of Hebei province), near Ceyu village in Jingxing County. The Zhanghewan Dam was constructed between 1977 and 1980 to provide irrigation and domestic water supply for the lower Gantao River basin. The original design was for irrigation water to serve 8,167 ha of land in the Gantao

6 A total of 11,776.5 km of lines, according to the summary initial environmental examination (SIEE) for the rural electrification component. 4

River basin. However, due to lack of sufficient funds, the project was not completed and currently provides a reliable source of water for only 867 ha.

A. Physical Environment

16. Air quality in the vicinity of the ZPSPP is considered to meet Class I ambient air standards.7 No significant industrial sites are located within the vicinity of the project area, and the region is considered rural as defined in the PRC Air Quality Standards.

17. The Gantao River is one of the main tributaries of the Hutuo River in the Haihe River basin. The Gantao River arises in Province and, together with the other tributaries of the Haihe River, drains the central portion of Hebei Province to the Yellow Sea. The primary source of water in the river is precipitation runoff.

18. The Gantao River basin is located in a temperate zone with a continental monsoon climate. The mean annual precipitation is 527 millimeters. Precipitation events are highly seasonal: 90% of the annual precipitation occurs between May and October. The average annual temperature is 12.8 degrees Celsius (0C), ranging from extremes of 42.80C during the summer months to –17.90C in winter in Jingxing town. At the project site, the average annual temperature is 9.70C. The region is subject to frequent prolonged drought conditions coupled with periods of freezing temperatures during the winter.

19. Flow in the Gantao River is highly seasonal and is dependent almost entirely on precipitation runoff. The average annual discharge in the river immediately upstream from the existing Zhanghewan River is 4.4 cubic meters per second (m3/s). Seasonally, maximum discharge occurs during the wet season (May through October), with the highest discharges ranging upward of 600 m3/s. Minimum inflows to the Zhanghewan reservoir are on the order of 1 m3/s. The maximum flood of record at the Quankou Hydrologic Station was 4,100 m3/s in 1996. A flood of 3,300 m3/s was observed in 1963.

20. Outflow from the existing reservoir is directed primarily to the Xiyue irrigation canal. Controlled release from the Zhanghewan Dam to the Gantao River occurs only during the wet season. During the remainder of the year, the Gantao River is generally dry from approximately 10 km downstream from the dam to the confluence of the Mianhe River near Jingxing town.

21. Water in the Gantao River and the Zhanghewan reservoir generally meets Class III ambient water quality standards. 8 Water quality is influenced by more than 20 factories discharging wastewater into the tributaries of the upper basin in Shanxi Province. Effluents from coal mines, electroplating factories, phosphate fertilizer factories, and pharmaceutical plants contribute pollutants to the river. Loading of pollutants from human settlements and agricultural lands still occurs in the basin but has been reduced significantly in the last 10 years.

7 GB 3095 - 1996 Standard for Quality of the Atmospheric Environment (annual daily average concentrations in micrograms per cubic meter) Class I Class II Class III Total suspended particulates 80 200 300 Sulfur dioxide 20 60 100 Nitrogen oxides 50 50 100 Carbon dioxide 4,000 4,000 6,000 8 GHZB 1-1999 Quality Standards for Surface Water. Class III is applicable mainly to the second class of protected areas for centralized sources of drinking water, protected areas for common fish, and swimming areas.

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22. The mean annual sediment load is 953,000 tons, with a bedload of 209,700 t. The mean annual sediment concentration is 11.1 kilograms per cubic meter (kg/m3) with a seasonal high of 16.9 kg/m3. Although the sediment and bedload are relatively high, no significant accumulation of sediment has been observed in the upper reaches of the reservoir since its construction in 1977.

23. Low, flat-topped mountains of the Taihang mountain range dominate the topography of the project area. The mountains are generally characterized as mesas, with the flat summits topping vertical rock cliffs. Elevations of the mountains range between 800 and 1,600 m asl, with the valleys at elevations of 300- 500 m asl.

24. Proterozoic and Mesozoic sedimentary rocks generally dominate the area overlaying metamorphic rock of the Archeozoic and Lower Proterozoic groups. The mesas are formed by erosion through the sedimentary layers into the metamorphic layers.

25. Three comparatively large-scale faults traverse the project area but have been inactive since the middle Pleistocene period. The Project lies between the North China and Fenwei earthquake zones and is comparatively stable. Historical earthquakes of intensity 6 have been reported in the region.9 According to earthquake risk analyses, the probability that an earth- quake greater than intensity 6.6 will occur once every 50 years is 10%. The proposed design of the pumped storage facilities has accounted for the maximum credible earthquake in the project area.

26. The soils of the basin are generally a drab soil type. Narrow bands along the margins of the river have meadow soils with high moisture content. Alluvial drab soils predominate at elevations between 1,300 and 1,800 m asl. Shrubland drab soils comprise 72.9% of the soils in the project area between 800 and 1,500 m asl. Drab soil is found between 700 and 1,200 m asl and comprises approximately 17% of the project area.

B. Biological Environment

27. Thirty-five species of fish have been identified in the Zhanghewan reservoir. Of these, 19 species are present downstream from the Zhanghewan Dam in small pools within the river channel. Nine species are present in the Gantao River, upstream from the Zhanghewan reservoir. The majority of the species were introduced to the river and reservoir and represent species commonly raised in commercial aquaculture facilities. A small cage-culture fishery is currently operated in the reservoir where tilapia is cultured. The remainder of the species are commonly found within Hebei Province and neighboring Shanxi Province. No threatened or endangered species are known in the project area.

28. Originally, the area in and around the Project was vegetated with deciduous hardwood forests. Both original and secondary forests have long been removed from the area. Land area not currently under cultivation is sparsely vegetated with shrubs and grasses. The only forested areas in the project area have been planted along the river margins and in the villages upstream and downstream from the reservoir. The nearest remnant original forest area is located approximately 10 km to the southwest of the project site. No endangered or otherwise protected plant species are known to exist in the project area.

9 The PRC has adopted the Modified Mercalli Scale, an internationally accepted measure that qualitatively describes effects of and damage caused by earthquakes. Earthquakes of intensity 6–7 will cause some structural damage to buildings and earthworks that are not designed and constructed with appropriate seismic protection. 6

29. The fauna of Ceyu and Nanhaoting townships consists of remnant populations of all vertebrate groups. Lack of forest habitat and extensive application of pesticides in the 1950s and 1960s are the primary causes for the loss of diversity within vertebrate communities. The diversity of invertebrate communities is also low due to the same factors. Animal communities observed in the project area are dominated by species commonly associated with shrubland and grassland communities. Mammalian species are mostly smaller rodents. Two protected mammal species are known from the forested areas of Nanhaoting township. Small populations of the wolf (Canis lupis) and a few leopards (Felis bengalensis) have been observed in these areas, but none are known from the project area. Approximately 170 species of birds have been observed in the project area. The majority of these are observed during migratory periods, with only 17 species (about 10%) of the observed birds known to reside in the area. Of the observed migratory bird species, seven are protected under the State Protected Species Act and another four are listed under the Hebei Provincial Species Protection Law. Eighteen amphibian and reptilian species have been observed in the project area. Amphibian species are characteristic of small ponds, lagoons and backwater areas of streams and rivers. Reptilian species live in generally adapted to arid and semiarid environments.

30. The pumped storage component will affect approximately 5.8 square kilometers (km2) of land, with the two reservoirs occupying an area of 3.9 km2. Of this, approximately 225 ha of cultivated land will be inundated by the reservoirs. The grass and shrub areas are used for grazing and some fuelwood collection. The existing Zhanghewan reservoir currently occupies the remainder of the project area.

C. Socioeconomics

31. Hebei Province covers an area of 187,693 km2. Its population in 2001 was 66.7 million. The provincial gross domestic product grew at 8.3% per annum in real terms between 1985 and 1990, 14.6% between 1991and 1995, and 11% between 1996 and 2000. During the 1990s, economic growth in the province exceeded the national average. The economic structure has gradually shifted from primarily agricultural to more industrial.

32. The per capita gross domestic product of Hebei Province was Y6,932 in 2000. The rural income per capita was Y2,479. Hebei Province is relatively underdeveloped compared with the coastal areas of the PRC.

33. Of Hebei’s 23 cities and 115 counties, 40 counties are designated as poverty counties by the Central Government. Hebei Province identifies six other counties as poverty counties. As a result of the Government’s poverty reduction efforts, the number of absolute poor or people under the Government’s poverty line (annual per capita income of Y635) has been reduced substantially. However, since 1996, repeated flooding has reduced rice production in some counties (particularly 11 counties in the vicinity of the Project) by almost 70% resulting in an increase in the number of absolute poor. Of 95 counties covered by the HSPG, 28 are identified as poverty counties, all of which receive financial assistance from the Central and provincial governments. In the 15 poverty counties in the project area, use of electricity is limited due to lack of adequate transmission and distribution facilities.

34. The region is subject to frequent prolonged droughts coupled with periods of freezing temperatures during the winter, resulting in variable agricultural productivity. Agricultural production from the area was greatly affected by the flood of 1996, which destroyed 7 considerable agricultural land along the valley of the Gantao River. Primary crops include wheat and corn, which are somewhat resistant to the more harsh temperate conditions.

35. Primary and secondary educational facilities are available in the villages that will be affected by the Project. Nearly 90% of the population has attended primary and secondary school. High school facilities are available in Jingxing town located 40 km to the east of the project area.

36. Health care facilities in the villages around the Zhanghewan reservoir consist of small, locally funded clinics. Health care personnel are trained in Jingxing town and return to the respective villages to practice in the local communities. The village of Nanhaoting has undertaken the construction of a well-equipped clinic and pharmacy. The clinic has an 8-bed inpatient care capability, and has ambulance service to the main hospital in Jingxing town.

37. No cultural or historic structures or features are known to exist in the project area.

IV. ALTERNATIVES

38. Several alternatives were evaluated by least-cost analyses conducted to select an optimum design for the Project, including no action, additional coal-fired power plants, gas turbine plants, natural gas-fired plants, conventional hydropower plants, nuclear power plants, renewable energy technologies, pumped storage, and demand side management (energy conservation). Project alternatives are summarized in Table 1 and described in paras. 39-43.

Table 1: Analysis of Alternatives

Project No Alternate Distributed Demand-side Component Action Power Sources Generation Management

1,000 MW Continuation of Distillate-fired gas turbine units Small-scale hydropower Effective for ZPSPP inefficient use of coal- Natural gas is not available on a is limited by small reducing base- fired capacity to meet preferential service basis. number of suitable sites. load demand, peak demand Conventional hydropower would Microturbine technology but limited require expansion of existing is limited by availability application for reservoir, or construction of new of natural gas. Fuel cell peak-load capacity at different location(s). and renewable management in Renewable technologies technologies are not the project area (geothermal, solar, wind) are not commercially viable. commercially viable for peak-load supply. Nuclear power is not viable.

63 km 500 kV No need for new line New line configuration is Transmission line could No need for Transmission dependent on site of new peak- be constructed on new line Line load plant smaller scale.

Closure of Plants would not be Plants cannot be closed Plants cannot be closed Plants cannot small, old closed between 2002- independently of Project. independently of Project. be closed power 2008. independently generation of Project. units

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Project No Alternate Distributed Demand-side Component Action Power Sources Generation Management

Irrigation Not possible without Not possible without new reservoir Not possible without new Not possible System new reservoir capacity capacity reservoir capacity without new Improvement reservoir capacity

Expansion of Possible to construct Expansion would be similar to Transmission and Expansion Rural Electric independently of proposed design. distribution system could would be System proposed Project, but be constructed on similar to system would be smaller scale. proposed subject to peak-load design. service interruptions km = kilometer, kV = kilovolt, MW = megawatt, ZPSPP = Zhanghewan Pumped Storage Power Station.

A. No Action Alternative

39. Under the no-action alternative, use of coal-fired generating units to provide peak power will continue to degrade air quality because of the low efficiency associated with variable operation of coal-fired units. The disparity between the minimum and maximum daily power demand in the HSPG will continue to increase. The continued increase in the base load for the grid and relative reduction in available peak-load generating capacity will further increase the frequency and duration of power outages and load shedding.

B. Alternative Power Sources

40. Natural gas is not readily available on a preferential basis in the project area. Other renewable energy alternatives (e.g., geothermal, solar, and/or wind) are not optimal for peak- load power supply. New distributed generating capacity (e.g., based on small-scale cogeneration plants, microturbines, and/or fuel cell technologies) would also be subject to fuel supply and peak-demand delivery limitations. Likewise, demand-side management could readily reduce base-load outputs, but is not considered to be effective in meeting daily peak requirements in the project area. Nuclear power is not considered to be cost-effective. The only viable alternative power source is the construction of coal-fired thermal generating stations or gas turbine units. The impacts associated with coal-fired plants include incremental increases in particulate and sulfur dioxide (SO2) emissions and fly ash, and depletion of finite coal resources. The flexibility of operating coal-fired thermal units for peak demand is limited, and inefficient use of the stations consumes an estimated excess of at least 100,000 t of coal per year. Based on the least cost study, the alternative power source is selected to be 1,000 MW gas turbine units. Selection of a pumped storage facility to meet the increasing peak demand for power provides a number of benefits to the system including flexibility in generating capacity, minimization of incremental increases in emissions from coal-fired plants, reduction in the rate of depletion of coal reserves, reduced requirements to dispose of fly ash, and reduction in required investment cost.

C. Alternative Locations

41. Five alternative locations were identified and evaluated for construction of a pumped- storage generating station. Other sites were eliminated from consideration on the basis of insufficient water, need for constructing both the upper and lower reservoirs, and limited available area for project facilities. Of the five locations considered, the Zhanghewan site has 9 the clear advantages of an existing lower reservoir, adequate space at a suitable elevation for an upper reservoir, minimal number of residents in the impoundment area, adequate accessibility for construction equipment and materials, and a highly disturbed ecological condition with extremely low diversity. After implementation of the proposed environmental management plan, the ecosystem in the project area should recover.

D. Alternative Sites for the Upper Reservoir

42. Three potential sites for the upper reservoir were investigated. Two of the three sites were eliminated due to the distance from the existing Zhanghewan reservoir and availability of space for the upper reservoir. Laoyemiao Mountain was selected because it is immediately adjacent to the Zhanghewan reservoir, eliminating the need for extensive tunneling or pipelines for the water conductors.

E. Alternative Power Capacities and Water Levels

43. Three power capacity options for the ZPSPP were considered: 1,200 MW, 1,000 MW, and 800 MW. The size and construction requirements for the upper reservoir were the primary consideration in selecting the size of the Project. The 1,000 MW installed capacity was selected on the basis of the balance between the amount of material required for construction of the upper reservoir embankment and the volume to be excavated from the upper reservoir area. The 1,000 MW option will provide adequate, economical capacity for meeting the peak energy demands of the HSPG. The proposed raising of the dam and expansion of the reservoir are based on the original design of the Zhanghewan reservoir and irrigation system: the foundation of the dam was originally designed and constructed to accommodate the proposed expansion; the increased storage volume and water level of the reservoir are needed to meet the submergence requirements of the intake/tailrace of the power station. The increased storage capacity of the Zhanghewan reservoir has the additional advantage of allowing expansion of the irrigation system to its original design.

V. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

44. The Project will generate positive environmental benefits via reduced regional and indoor air pollution, reforestation, and improved flood control. Major negative impacts will be associated with reservoir inundation and acquisition of right-of-way for transmission and distribution systems. Anticipated project benefits, negative impacts, and mitigation measures are summarized in Table 2.

Table 2: Summary of Environmental Impacts and Proposed Mitigation Measures

Project Proposed Mitigation Component Benefits Negative Impacts Measures

1000 MW ZPSPP Rationalized baseload vs. Inundation of 576 ha of land, Inundated land will be offset by Siting and Design peak plant operations; including 225 ha of agricultural improved agricultural conversion of unused land at land, which cannot be readily productivity in resettlement upper reservoir site to replaced in immediate area areas; combined with expanded beneficial use irrigated area, greater unit and aggregate productivity will result. 10

Project Proposed Mitigation Component Benefits Negative Impacts Measures

Creation of new upper Relocation of total projected "Land-for-land" resettlement reservoir and expansion of 3,254 residents in 905 and "rehabilitation" program for existing lower reservoir will households, of which 304 displaced resident allow expansion of fish people in 95 households will proposed resettlement areas and waterfowl populations, move a short distance and have available agricultural land, and provide capacity for remain in the reservoir area currently producing below expanded irrigation and capacity.a water supply

Environmental rehabilitation Watershed management plan of Laoyemiao Mountain includes reforestation and upper reservoir area revegetation, resulting in ecological restoration; increase in variety and amount of fauna expected over long term

Construction Disturbance during Appropriate construction construction; temporary mitigation (paving and spraying occupation of 86 ha of of roads for dust suppression) agricultural land will maintain air quality within Grade II Standards (text footnote 7).

Operation Creation of new lake Possible depletion of dissolved Removal of structures and ecosystem will enhance oxygen due to decaying plant vegetation from reservoir areas watershed characteristics material; possible fish mortality to be inundated; pumping/ and support expanded caused by depleted dissolved turbining operation will maintain aquaculture. Future tourism oxygen; possible algal blooms dissolved oxygen levels. development is a possibility.b and eutrophication.

Development of aquaculture Possible loss of habitat for Existing Zhanghewan and (< 0.5 ha) in lower reservoir some fish species. Huangbizhuang dams have expected to have positive permanently altered migratory financial and economic fish habitat (new aquaculture benefits.c will offset any incremental loss of habitat).

Reforestation program will Sedimentation in reservoirs Lower reservoir configuration generate positive benefits causing backwater flooding and includes sediment dam and from "economic" forests loss of storage capacity sluice structures for sediment (apple, date, peach, and management. Watershed walnut trees) and sustainable management plan will control timber harvesting. excessive upstream erosion and sedimentation.

Expansion of water supply by Deterioration of water quality Hebei and Shanxi EPBs’ 2.4 million m3 per year, with from upstream industrial cooperative program to reduce economic benefit of Y3 effluents and control upstream industrial million/year to Jingxing wastewater discharges; water County quality expected to meet Class III quality standards

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Project Proposed Mitigation Component Benefits Negative Impacts Measures

Socioeconomic development Possible increase in Public health program will be in project area will improve. waterborne diseases; possible augmented to provide greater uncontrolled influx of people to awareness and capacity to project area control diseases. Management zone will strictly control access to project area.

Improved flood control Loss of land area due to Overall improvements in construction design regional environment will offset requirements land acquisition requirements.

63 km Transmission Expansion of electric supply Permanent acquisition of 1.86 Minimal disturbance of Line capacity in southern Hebei ha of land for construction of agricultural land; no Siting and Design Province transmission lines; 0.73 ha will displacement or resettlement be permanently occupied for will be required; no sensitive or operation protected areas will be disturbed

Construction Possible creation of job Air pollution from earthmoving Appropriate construction opportunities for local and construction equipment; mitigation (paving and spraying residents sanitary wastes from worker of roads for dust suppression) camps. will maintain air quality within Grade II Standards (GB 3095- 96). Provisions have been made for adequate sanitary facilities. No resettlement will be required.

Operation May support creation of Disturbance associated with Local government will control feeding and nesting sites for maintenance of lines (e.g., access to right-of-way, birds, "edge effect" benefiting vegetation control); potential precluding health hazards. ecosystem adjacent to right- health hazard due to Vegetation control will favor of-way electromagnetic fields mechanical maintenance over herbicide application.

Closure of Small, Old Coal consumption will be Cleanup of decommissioned Cleanup of power plant sites Power-Generating reduced by approximately 1.5 sites; redeployment of power will follow national guidelines for Units million tons per year. Air plant workers redevelopment of industrial emissions and fly ash will be lands. Reassignment, reduced proportionately. retraining, and reemployment will be conducted under existing HEP program.

Irrigation System Achieve original design Land required for Improved water supply and Expansion capacity to serve 8,167 ha construction/rehabilitation of agricultural productivity will Siting and Design irrigated area canals has already been provide economic benefit, acquired. offsetting acquisition of land.

Operations Improved productivity of Possible increase of erosion Best management practices to agricultural land; improved due to tilling and harvesting; be implemented for erosion supply of water for other uses possible increased use of control and agricultural agricultural chemicals chemicals application

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Project Proposed Mitigation Component Benefits Negative Impacts Measures

Expansion of Rural Increased availability of grid- Right-of-way required for Routing to minimize disruption Electric System Siting based electric power to rural construction of transmission of residents and agricultural and Design and impoverished areas, with and distribution lines is 3.13 ha; activity; construction practices increased economic an additional 8.56 ha will be and schedules will be designed opportunities for rural occupied by substations. to reduce traffic and residents communications disruptions

Operations Expanded electric supply will Minor inconvenience of Compensation for right-of-way reduce residential coal additional distribution poles and access has been or will be consumption, improving lines on right-of-way made according to existing indoor air quality and PRC laws and regulations. reducing health risks

EPB = environmental protection bureau, ha = hectare, HEP = Hebei Electric Power Company Ltd., HSPG = Hebei South Power Grid, km = kilometer, m3 = cubic meter, PRC = People’s Republic of China, MW = megawatt, ZPSPP = Zhanghewan Pumped Storage Power Plant. a Current residents in resettlement areas have shifted to industrial work near Shijiazhaung rather than traditional farming. b Tourism development has been a compatible land use at the Shi San Ling Pump Storage Project near the Ming Tombs in northern Beijing. Spoil has revegetated; 1 km buffer zone tourism facilities include bird-watching towers, ancient model houses, underground gallery tours, and guest house/resort. Entrance fee is Y50 per person. c Aquaculture will be limited based on water quality objectives. Dissolved oxygen concentrations to be maintained at Class III standard.

A. Physical Environment

45. Regional air quality will improve due to more efficient use of coal-fired thermal generating units, improved transmission and distribution efficiencies, closure of small power generating units, and reduction of residential coal use in rural areas. On the average, the estimated reductions in air emissions from improved efficiency are 8,366 tons per year (t/y) of SO2 and 19,633 t/y of total suspended particulates (TSP), 10,355 t/y of nitrogen oxides (NOx) 10 and 1.8 million t/y of carbon dioxides (CO2). Rural electrification will reduce residential coal consumption and improve indoor air quality.

46. Short-term impacts on atmospheric resources will occur during construction at the ZPSPP site, along irrigation canals, and along power transmission and distribution corridors. Construction traffic, excavation and earthmoving, and aggregate processing facilities will generate dust, which will be suppressed using “wet” methods. Short-term increases in sulfur oxides, nitrogen oxides, and hydrocarbons from vehicle exhaust will occur, but air quality is expected to remain within Class II standards during construction, and to be within Class I standards during operation.

47. The primary source of pollutant discharge into the atmosphere will be the emissions from construction vehicles and stationary equipment for aggregate processing and concrete mixing. Construction access roads will be paved with asphalt or sprayed with water as needed to prevent dust. Earthmoving equipment and other construction machinery will utilize emission control devices and be maintained on a regular schedule. The proposed emissions control measures will maintain Class II or better air quality during construction. Class I air will be maintained during long-term operations.

10 Estimation of improved efficiency is based on the least-cost analysis. The estimated coal savings is 607,437 t/y. 13

48. Short-term impacts on water quality will occur during construction. Excavation, grading, filling, and other ground disturbances will increase potential soil erosion into the reservoir and downstream in the Gantao River basin. Construction camps will generate human wastewater, requiring treatment prior to discharge. Maintenance of construction equipment will also generate some wastewater. No significant effect on the existing hydrologic regime is anticipated as a consequence of the construction or operation of the ZPSPP except during the primary filling of the lower and upper reservoirs. Significant effects on water quality in the Zhanghewan reservoir or the Gantao River are not expected once the Project becomes operational.

49. The primary source of potential dam failure will be from earthquakes. The threat of dam breach of the upper reservoir from flood events is minimal due to the lack of a drainage basin on Laoyemiao Mountain.

50. Proposed measures to minimize erosion include construction of settling basins, berms, and dikes to channel runoff into settling basins. Clarified water will be discharged from these settling basins to the local watercourse. When construction is complete, the disturbed areas will be regraded to follow natural contours and revegetated with shrubs and grasses to minimize erosion from the disturbed areas. Agricultural areas will be regraded and rehabilitated for restricted future use. Construction wastewater and human wastewater from the labor camps will be collected and treated prior to discharge into the river or reservoir. To minimize the potential for low dissolved oxygen concentrations in the lower Zhanghewan reservoir, all vegetation and human-constructed facilities will be removed from the inundation zone prior to filling of the lower reservoir.

51. Reservoir filling will occur during the wet season when the effect on downstream water supply will be minimized. Operation of the pumped-storage facility will prevent stratification and promote uniform dissolved oxygen concentrations throughout the water column due to the turbulence associated with the generating phase of operation.

52. Current sources of pollutants to the reservoir include discharge from manufacturing facilities located in the upper portion of the Gantao River basin in Shanxi Province. The environmental protection bureaus (EPBs) of Hebei and Shanxi provinces will cooperate to reduce the discharge of pollutants from these manufacturing facilities. The Executing Agency will assist the Hebei EPB in promoting the reduction of pollutant discharge in the upper Gantao River basin. Fish and waterfowl populations are expected to increase.

53. Flood control dams in the upper basin of the Gantao River, coupled with the design capacity of the lower reservoir, will minimize the threat of failure of the lower dam. Dams and embankments of both reservoirs are designed to withstand the maximum credible earthquake in the project area.

B. Biological Environment

54. Currently, the Zhanghewan reservoir becomes weakly stratified during the summer months. Operation of the pumped-storage facility will prevent stratification due to the turbulence associated with the generating phase of operation. The turbulence associated with operation will also promote uniform dissolved oxygen concentrations throughout the water column. Fish and waterfowl populations are expected to increase after construction and reservoir filling.

14

55. Reduced coal consumption and reduced emission of air pollutants will indirectly benefit aquatic resources, via reduction in pollutants transferred from air to water. Wastewater generated by small power plants will be reduced.

56. In the area around the reservoirs, land use and watershed management programs will foster habitat restoration and ecosystem recovery to preproject or better conditions. Increased agricultural production will result from expansion of the irrigation area. An area of 20,000 ha will be reforested; an additional area of approximately 3,333 ha will be planted with “economic forests” (apple, walnut, apricot, and date trees).11

57. Watershed management and reforestation programs will be implemented to offset reservoir inundation and the acquisition of the transmission/distribution right-of-way. Reforestation and erosion control will be implemented throughout the immediate drainage area of the reservoir. A management zone, including a buffer zone around the ZPSPP reservoirs, will be designated to restrict noncritical land use, enabling the establishment of native vegetation. Limited grazing will be allowed. Additional agricultural production is expected due to expanded irrigation service and better agricultural practices in the areas designated for resettlement.

58. More than 90,000 ha of land in western Hebei Province has been designated for reforestation. Of this, approximately 20,000 ha will be reforested as a result of the Project. An additional area of approximately 3,333 ha will be planted with fruit trees. Initially, the area will be planted with rapidly growing species to establish erosion control in the reservoir basin. This will facilitate return to of the area of native species. Establishment of forest cover and habitat will promote the reemergence of forest animals. The project-specific activities will be integrated with a reforestation program that has been implemented throughout Jingxing County.12

59. Aquatic vegetation in the ZPSPP area is limited to phytoplankton communities within the existing reservoir and some rooted aquatic vegetation along the margins of the river upstream and downstream from the existing reservoir. The lack of rooted aquatic vegetation is due to the variable water surface elevation caused by irrigation operations. The ZPSPP component is not expected to affect negatively aquatic vegetation.

60. Fish communities of the Zhanghewan reservoir, comprised largely of introduced species, are expected to improve as a consequence of the increased habitat area in the reservoir. The fish population will be subject to entrainment into the pump/turbine system. However, this effect is expected to be negligible, with a net increase in stable fish population.

61. Short-term impacts are expected during construction of the 500 kV transmission line and rural distribution corridors, mainly due to increased erosion potential related to excavation and earthmoving. Closure of small power plants will not negatively impact aquatic resources. The expanded irrigation system will alter the regional water balance by distributing more water to the service area.

11 When mature, the economic forests and sustainable timber harvesting are estimated to generate up to $68 million and $400 million/year, respectively, when mature (future estimated value based on current market prices, not discounted). 12 The county reforestation program covers over 90,000 ha on the eastern flank of the . More than 64,000 ha has been replanted; an additional 2300 ha/year will be reforested through the year 2010. 15

C. Socioeconomics

62. A resettlement plan for residents in the project area has been prepared. A centerpiece of the resettlement action plan is the “land-for-land” replacement of agricultural land. Designated agricultural land in resettlement areas is currently underutilized or underproducing. The resettlement program will include training in more modern agricultural management techniques; net increases in crop production and incomes are consequently expected.

63. Power plant workers will be redeployed under an existing HEP program. Expansion of the irrigation capacity will benefit a population of 69,300, of whom 11,700 are considered poor. Rural electrification will benefit approximately 9.56 million people.

64. Flood events downstream from the ZPSPP will be reduced in severity due to the additional storage capacity of the reservoirs and expanded irrigation area.13

65. The ZPSPP reservoirs and construction spoil disposal areas will require approximately 576 ha, including 225 ha of cultivated land. During construction an additional 86 ha of cultivated land will be disturbed, but this will be rehabilitated to agricultural production following the construction period.

66. The 500 kV transmission line will temporarily occupy 1.8 ha of land and permanently occupy 0.732 ha of land. The rural electrification component will require 3.13 ha of right-of-way for transmission and distribution lines, and 8.56 ha for substations.

67. The major impact of the Project is the relocation of a projected total of 3,254 persons in 905 households residing in seven villages in the impoundment zone. A detailed resettlement action plan has been prepared in consultation with the affected people.

68. During construction, the construction labor force will be housed at three residential sites within the construction area. On average, the work force will be about 3,670 persons, with an estimated maximum total of 4,900 workers required for all construction components. The additional population will temporarily affect the social and economic structure within the project area. However, major disruptions are not expected, as a portion of the labor force will come from Hebei Province, and no cultural conflicts are expected to occur, as all residents and most laborers will be of the Han majority. The influx of the laborers will create somewhat of a boom for the economic structure in Ceyu and Nahaoting townships. Planning for the influx of laborers to the site includes management of public health, a program of inspection and certification of entrepreneurial businesses, and management of human wastes generated by the workforce.

69. Traffic and communications may be occasionally disrupted during construction of the 500 kV line and rural electrification system.

70. A detailed land acquisition and resettlement action plan has been prepared in consultation with the affected people. Resettlement will include compensation for land and homes. Approximately 304 people in 95 households will move to higher ground adjacent to the

13 A devastating flood in 1996 caused damage estimated at $7 million − $10 million in direct and indirect losses. Damage estimated by the Reservoir Statistics Bureau included erosion; damage to irrigation canal and sluice gates, irrigation control systems, communication lines, and electromechanical equipment; inundation of 2,733 ha of farmland and 20 ha of fisheries; 820 houses destroyed; 50 small-scale enterprises affected; and damage to high voltage lines, the Pingshi Road and ShiTai Expressway, and one iron bridge. 16 lower reservoir. The remainder will be moved to one of five host villages in the northern portion of Jingxing County. Two of the host sites include villages where residents from the Zhanghewan site were relocated when the existing reservoir was constructed in 1977-1980. In effect, this will reunite those villages. The relocation and rehabilitation of the population will be financed through a resettlement fund financed by a Y0.001 per kilowatt-hour fee assessed from the ZPSPP component of the Project.

71. The influx of the labor force to the construction area will constitute the primary potential impact of the Project on public health. To minimize the potential for increasing the occurrence of epidemic diseases in the project area, all laborers will be required to present a health certificate as part of their application for employment. Workers will have periodic health examinations while employed on the project site. Cottage businesses, including restaurants, will be required to obtain health certificates and undergo sanitary inspections throughout the construction period.

72. Health clinics will be constructed to provide health care to the workforce. Additional clinics will be constructed in the local villages and host sites for the relocated population to provide health care and health information to the local populations. Five doctors and their supporting organizations will perform public health programs.

73. No significant impacts are expected from the transmission and rural electrification components. Compensation has been or will be paid for acquisition of the necessary right-of- way for the transmission, distribution, and irrigation components. Similarly, no significant adverse impacts are expected from the closure of old, inefficient thermal power plants. HEP is committed to redeployment of workers from closed power plants. Of 2,283 affected power plant staff, 392 will be transferred directly to new units, 1,787 will receive additional training and be assigned to new power plants, and 104 will be placed in noncore business units.14 The workers’ redeployment plan is summarized in Appendix 1.

VI. ECONOMIC ASSESSMENT

A. Project Costs

74. A summary of the project cost estimates is given in Table 3; the financing plan is presented in Table 4. The total project cost is $774.9 million equivalent, including physical and price contingencies, and interest and other charges during construction. Of the total, the foreign exchange costs are $165.3 million, or about 21.3%.

14 Approximately three or four workers from each closed unit are expected to retire during 2002–2005. 17

Table 3: Project Cost Estimates ($ million)

Item Foreign Local Total Exchange Currencya Cost A. Base Cost 1. Pumped Storage Power Plant 121.1 301.0 422.1 2. 500 kV Transmission Line 0.0 16.5 16.5 3. Rural Electrification 0.0 135.5 135.5 4. Closure of Coal-fired Power Plants 0.0 1.6 1.6 5. Afforestration 0.0 10.6 10.6 6. Institutional Strengthening 0.5 0.9 1.4 7. Irrigation 0.0 12.9 12.9 Subtotal 121.6 479.1 600.7

B. Contingencies 27.6 89.5 117.1

C. IDC 16.1 41.0 57.1 Total 165.3 609.6 774.9 IDC = interest and other charges during construction, kV = kilovolt. a Based on an exchange rate of $1.00 = Y8.3.

Table 4: Financing Plan ($ million)

Source Foreign Local Total Percent Exchange Currency Cost Equity HEP 11.7 124.0 135.7 17.5 HCIC 9.6 63.2 72.8 9.4 Local Government -0 29.3 29.3 3.8

Loans ADB 144.0 144.0 18.6 China Development Bank 275.8 275.8 35.6 Agricultural Bank of China 117.3 117.3 15.1 Total 165.3 609.6 774.9 100.0 ADB = Asian Development Bank, HCIC = Hebei Construction and Investment Corporation, HEP = Hebei Electric Power Company Ltd.

75. ADB will finance the Project with a loan of $144.0 million to finance the bulk of the foreign exchange cost of the Project (18.6% of the total project cost). The local costs amounting to $609.6 million equivalent and the remaining foreign exchange costs of $21.3 million will be financed with equity from HEP and the Hebei Construction and Investment Corporation (HCIC) and with loans from China Development Bank, Agricultural Bank China and the local government.

B. Project Benefits

76. The project design has been based on a least-cost analysis of alternatives. The estimated economic internal rate of return ranges from 19% to 21%.A number of economic and non-economic benefits will be realized by the Project. Improved air quality is a primary benefit resulting from more efficient and reliable electric service in the HSPG. The expanded irrigation 18 service area will support increased agricultural productivity. The Zhanghewan reservoir will also provide 2.4 million m3 of water per year for domestic use.

77. Secondary economic and social benefits will result from the resettlement program. Relocated families will have access to improved agricultural technology and better management practices. Agriculture-derived incomes should increase with improved crop yields. The resettlement fund will include a revolving fund for the establishment of new enterprises in the relocated communities.

78. Implementation of the watershed management program will provide multiple benefits to the environment, including reduced erosion and provision of suitable habitats for a variety of plant and animal species not currently present in the project area. Enlarging the lower reservoir will provide an additional habitat for 35 existing species of fish and will increase capacity for aquaculture.

C. Costs for Environmental Programs

79. An investment of $1.29 million equivalent is planned for environmental protection, monitoring, and management programs to be implemented with the construction of the Project. These measures include a program for watershed management, improvement of public health facilities, treatment of “three wastes,”15 control and monitoring of noise during construction, construction of an environmental monitoring station, reforestation of the project area and the construction areas, and funding of the environmental protection office (EPO) during construction. An additional investment of $1.3 million equivalent is budgeted for closure of the small power plants.

VII. INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PROGRAM

81. HEP and the Zhanghewan Pumped Storage Power Plant Company Ltd. will establish an environmental protection office within the project construction management staff. The EPO will consist of a department supervisor assisted by three full-time environmental engineers during construction and operation. Sociologists, water quality technicians, noise and dust monitoring technicians, and aquatic and terrestrial biologists will be engaged to support the EPO as necessary during construction and operation.

82. During normal operations, three environmental engineers will be responsible for organizing and implementing the environmental protection programs such as wastewater treatment, landscaping of the construction site and implementation of the reforestation program in the construction area and in the resettlement sites, and construction of the water supply system for the construction area. Environmental institutes may be retained on a periodic basis to support environmental management efforts. Implementation of long-term environmental monitoring and management duties will be coordinated with local government agencies responsible for environmental protection and for forestry and wildlife resources. Environmental management activities are summarized in Table 5.

15 The “three wastes” include waste water, waste gas and solid waste. 19

Table 5: Environmental Mitigation, Monitoring, and Management Activities

Monitoring Management Stage Major Impacts Mitigation Measures Frequency Program

Construction Air and noise - dust from Spray water for dust Daily/ongoing as Air program - ZPSPP earth moving, equipment suppression; equipment needed; continue EPO (director + 3 emissions certified and maintained operation of existing environmental to meet national emission meteorological station engineers) standard and noise standards

Water-eroded sediment Sediment barriers, runoff Daily/ongoing as Water quality program - flux and construction control dikes and ponds; needed ZPSPP EPO (director + waste runoff sanitary wastewater 3 environmental treatment for construction engineers) camps

Land - grubbing and Spray water for dust Daily/ongoing as Sediment management clearing of reservoir; suppression as needed program - ZPSPP EPO demolition of houses and necessary; routing of (director + 3 removal of debris. transmission line to environmental clearing and preparation minimize tree loss engineers) of transmission line right- of-way

Public health - sanitary Preemployment health Daily/ongoing as Public health program - wastes and infectious screening/ certification of needed ZPSPP EPO and health diseases workers; clinics specialists (5) plus established to support support from Jingxing construction camps County Public Health Department

Operation Changes in local climate Continuous operation Management zone conditions of existing program to control meteorological station; access to project area, ambient air monitoring in support of all on quarterly basis environmental management activities

Water - sedimentation; Erosion control structures Quarterly for routine Water quality program - accumulation of and revegetation; water quality; monthly ZPSPP EPO (director + pollutants sanitary wastewater for human wastewater 3 environmental treatment systems; engineers) and EPBs cooperation with Shanxi EPB to limit upstream pollutant discharges

Fish population - possible Active aquaculture Annual for first 5 Water quality program - entrainment in limited to maintain years, then every 5 ZPSPP EPO (director + pump/turbines desired dissolved oxygen years if population 3 environmental content thrives; correction engineers) and EPBs action to be developed if fish population does not expand 20

Monitoring Management Stage Major Impacts Mitigation Measures Frequency Program

Land - inundation and Buffer zone established; Annual for first 5 Afforestation and potential erosion revegetation and years; every 5 years sediment management reforestation; control of after that programs - ZPSPP human access EPO (director + 3 environmental engineers); coordinate with forestry and water resource agencies

Social structure and Land acquisition plan, Ongoing according to Public health program - public health - resettlement plan, and resettlement due to ZPSPP EPO (director resettlement and worker worker redeployment power plant closure plus Sociologist), health redeployment plans approved by the schedules specialists (5); Government and ADB coordination/support from Jingxing County Public Health Department ADB = Asian Development Bank, EPB = environmental protection bureau, EPO = environmental protection office, ZPSPP = Zhanghewan Pumped Storage Power Plant.

VIII. PUBLIC INVOLVEMENT

83. A number of agencies were involved in planning the environmental and resettlement program associated with the Project, with emphasis on the resettlement planning process.16 Agencies that were consulted and asked to participate in the planning process included the Jinxing County Government, Civil Administration Bureau, Land Management Bureau, Water Resources Bureau, Central Hydroelectric Power Plant of Shijiazhuang City, and Beijing Hydroelectric Investigation, Design and Research Institute. During the planning process, other agencies also participated. Communication Bureau, Urban Construction Bureau, Water Resources Bureau, Agricultural Bureau, and the Land Management Bureau were among those that were consulted during the planning process.

84. Resettlement planning was based on three random sample stratified socioeconomic surveys carried out in 1995, 1996, and 1999 to supplement the detailed design investigation. The surveys enabled acquisition of data on household incomes, expenditures, and assets and were disaggregated by gender. Participatory rapid assessment techniques provided additional information on needs and preferences of people affected. ADB also commissioned a study in 1999 to clarify the costs and benefits of the Project relative to poverty alleviation. This survey was conducted primarily to evaluate the effect of the rural electrification component of the development. This study consisted of field interviews in selected poverty counties and focused on the needs and priorities of low-income people. Participatory rapid assessment methods were used to collect data from low-income household electricity users and potential users in the selected sites. The study identified patterns of energy use, energy needs, and current problems and costs of both connection and use. Both domestic and industrial electricity users were interviewed as part of the study. The study determined the ability and willingness of households

16 Two laws of the PRC provide the primary basis for implementing environmental protection measures in association with the construction and operation of the Project. These are the Law on Environmental Protection of the People’s Republic of China and Regulations for Design of Environmental Protection for Construction Projects. Other pertinent laws and regulations include: Environmental Impact Assessment Standards for Hydroelectric Projects, the Law on Water Pollution Protection of the People’s Republic of China, Inundation Treatment Design Standard for Hydroelectric Projects, The Land Management Law, Regulations for Sanitation and Antiepidemics, and Geologic Prospecting Standards for Reservoir Projects. 21 to use more electricity under the proposed new electricity tariff levels. Interviews were conducted with both men and women to gain an understanding of any differences in use patterns and priorities.

85. Public meetings were convened throughout the planning process to discuss various aspects of the resettlement action plan. Representatives from each of the affected villages (both those that are to be relocated and those that will host the resettled population) provided comments and suggestions for improving the resettlement action plan. A significant contribution was provided by the Women’s Advocacy Group of Jingxing County, which assisted in obtaining input from the women who will be directly affected by the Project.

IX. CONCLUSIONS

86. Overall, the Project will create some significant short-term environmental impacts. However, full implementation of the mitigation and management programs will result in an overall improvement in the environmental quality of the project area and surrounding areas. Successful implementation of the Project will result in more efficient operation of the regional power supply system, and reduction of emissions from coal-fired power plants in the HSPG. Implementation of the reforestation program and watershed management programs will offset the expected adverse environmental impacts and provide additional habitats for fish and wildlife within the project area. The combination of improved efficiency of power supply operations, closure of small power plants, rural electrification, ecosystem rehabilitation in the reservoir area, and improved agricultural productivity will result in net environmental benefits.

REDEPLOYMENT PLAN FOR POWER PLANT WORKERS

Number Time of Total Number Redeploye Number Units to be Closure and Number Redeployed d to New Redeployed Power Plant Closed Worker of Without Re- Unit for Plants with Unit for to Other Unit for Reassignment Workers training Reassignment Retraining Reassignment Departments Reassignment

Xingtai 1, 2, 3 2002-2003 431 86 Xingtaia 327 Xingtaia 18 Noncore businessb Baoding Cogeneration 1, 2, 3 2003-2004 594 90 Baoding 476 Baoding 28 Noncore Cogeneration Cogeneration businessb Planta Planta 150 Power Plant 3, 4 2005 204 30 150 164 150 10 Noncore Power plant Power plant businessb Shijiazhuang 1, 3-10 2002-2005 728108 Shijiazhuanga 584 Shijiazhuanga 36 Noncore businessb Handan 3, 7, 8 2002-2003 326 78 Handan 236 Handan 12 Noncore Cogeneration Cogeneration businessb Planta Planta

Total Workers 2,283 392 1,787 104 a Renovation and/or expansion at existing power plant site. b Noncore business service center e.g., guesthouse or dining hall of the rehabilitated power plants or other noncore business service center of other power plants. Source: Summary initial environmental examination prepared by the Zhanghewan Project Office.