Initial Environment Examination Report

Project Number: 46933 March 2015

KAZ: Akmola Electricity Distribution Network Modernization and Expansion Project

Prepared by LLP “TITECO”

For Akmola Electricity Distribution Company JSC

This Initial Environment Examination Report is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “Terms of Use” section of this website.

In preparing any country program or strategy, financing any project, or by making any designation or reference to a particular territory or geographic are in this document, the Asian Development Bank does not intend to make any judgments as to legal or other status of any territory or area.

Initial Environmental Examination(IEE)

Document status: Final draft [November 2014]

PROJECT ―RECONSTRUCTION OF 110/10 KV ASTANA SUBSTATION― for ―AkmolaElectricity Distribution Company‖ JSC

to be submitted to Asian Development Bank

Prepared by LLP ―TITECO‖

110/10 kV Astana Substation ReconstructionIEE

CONTENTS CONTENTS 2 LIST OF TABLES 5 LIST OF FIGURES 6 ABBREVIATIONS 7 REVIEW 9 I INTRODUCTION 11 1. Purposeand content of the Project 11 2. Description of AEDC production facilities 12 2.1 Review of Akmola Electricity Distribution Company 12 2.2 AEDC organizational chart 17 2.3 Information of AEDC personnel 19 3. Brief description of planned work for reconstruction of substation «Astana» 26 3.1 Reconstruction of 110/10 kv Astana Substation 26 3.2 Methodology and scope of the study 36 II KAZAKSHTAN AND AKMOLA REGION 37 4. Kazakhstan 37 5. Economics 38 6. Akmola oblastand Astana city 38 7. Electric power 41 7.1 Organization of power sector: state regulation 42 7.2 Organization of electric power sector: key participants 44 7.3 Organization of power industry sector: key rules of the market 45 III POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK 47 8. State legislation in the field of environmental protection of the Republic of Kazakhstan, the legal norms and directives 47 9. Environmental policies and guidelines of the Asian Development Bank (ADB) 65 IV ENVIRONMENT DESCRIPTION 71 10. Aspects of the environment, health and safety of existing production facilities (AEDC) 71 10.1 Brief description of the climatic conditions of the area of the project location 74 10.2 Relief and landscape 78 10.3 Soil 79 10.4Local water resources 80 10.5 The structure of the vegetation area and its floristic composition 81 10.6 The fauna of the region under study 85 10.7 Cultural, historical and archaeological assets 88 VSOCIO-ECONOMIC CHARACTERISTICS 90 november 2014 page2

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11. Socio-economic activities of AEDC 90 11.1 Scope of land acquisition, leasing and impact of resettlement 90 11.2 History of land acquisition (and relocation) of the existing production facilities of AEDCandInvoluntary Resettlement 91 11.3 Indigenous people 91 11.4 Social protection and labor protection 92 11.5Monitoring and reporting on the implementation of measures of social adaptation 103 11.6Development of gender policy 105 VI EXPECTED ENVIRONMENTAL IMPACT AND MITIGATION MEASURES 107 12. Assessment of potential impact on air and mitigation measures 109 13. Assessment of potential impact on local water bodies, and mitigation measures 110 14. Assessment of potential impact on soil and land resources, and mitigation measures 111 15. Assessment of potential impact on the flora and fauna of the project area 112 16. Assessment of potential noise pollution and mitigation measures 112 17. Assessment of potential impacts on waste formation and disposal, and mitigation measures 114 18. Assessment of potential impacts in relation to cultural, historical and archaeological assets and mitigation measures 115 VII INFORMATION DISCLOSURE, CONSULTATION AND PARTICIPATION 116 19. Interaction with related parties 116 20. Scheduled disclosure of information 118 21. Comments and responses 118 VIII GRIEVANCE MECHANISM 120 22. Levels of settlement of grievance 120 23. Coordination with the complaints, accounting and reporting 121 24. Disclosure of the complaint process 121 IX ENVIRONMENTAL AND SOCIAL PLANNING AND MANAGEMENT (ECPM) 122 25. Environmental and Social Management Plan 122 X CONCLUSIONS AND RECOMMENDATIONS 125 ANNEX 1Environmental and Social Management Plan 130 ANNEX 2Disaster management / emergency response 139 ANNEX 3List of investment activity prohibited by ADB 141 ANNEX 4Copy of State License of LLP ―TITECO‖ 143 ANNEX 5 Copies of Certificate of Conformity LLP ―TITECO‖ 145

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LIST OF TABLES

Table 2.1: Information on the average number of AEDC employees by 20 category Table 2.2: Information on AEDC authorized personnel complement in 20 the context of their positions Table 2.3: Data on educational background of AEDC employees (as of 24 the end of 2014) Table 3.1: Technical-and-economic indexes 27 Table 3.2: The timing of replacement of 2x40 MVA power transformers with 2x63 MVA power transformers 33 Table 6.1: Administrative districts of Akmola area (as of the beginning of 2014) 39 Table 8.1: Legislation and regulations on environmental assessment in the Republic of Kazakhstan and applicable to activity AEDC and CAEPCO (within the activity connected with AEDC) 48 Table 8.2: Legislation and regulations on labor, health and safety issues, applicable to AEDC and CAEPCO operations (within its activities related to AEDC) 63 Table 10.1: Radiation balance of the surface activity (MJ / m2) under average cloud conditions 74 Table 10.2: Frequency of winds by direction (%) 76 Table 10.3: Wind speed frequency (%) 76 Table 10.4: Listofplants 84 Table 11.1: Data on the land lease 90 Table 11.2: Distribution of AEDC staff by type of work (including company-AEDC Energosbyt, data as of the end of 2014) 93 Table 11.3: AEDC personnel by education level (as of the end of 2014) 93 Table 11.4: Distribution of AEDC staff by the number of years worked in the company 94 Table 11.5: Conventions of International Labor Organization, adopted in the Republic of Kazakhstan 95 Table 25.1: Potential environmental and social impact 124

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LIST OF FIGURES

Figure 2.1: Schematic map of AEDC JSC’s electric networks of 35kV and higher 16 Figure 2.2: Power supply to consumers in the area of responsibility of AEDC 17 Figure 2.3: Organization chart of AEDC 18 Figure 2.4: Organization chart of AEDC branches 19 Figure 2.5: Internal chart of AEDC branches (inter-municipal 19 electric power networks) Figure 2.6: Classification of AEDC employees by category (as of the 23 end of 2014) Figure 2.7: Structure of company's employees by work experience in the power system by category (as of the end of 2014) 24 Figure 2.8: Structure of AEDC employees by categories and by age (as of the end of 2014) 25 Figure 2.9: Gender structure of AEDC employees by categories 26 Figure 3.1: Monitoring of AEDC substation with existing SCADA system 32 Figure 3.2: Transformer hall in Astana substation 34 Figure 3.3: Astana substation 34 Figure 3.4: Disconnecting of one of 40 MVA power transformer in Astana 110/10 kV (de facto) 35 Figure 3.5: Disconnecting of one of 63 MVA power transformer in Astana 110/10 kV (after the proposed investment) 35 Figure 4.1: Administrative map of Kazakhstan 39 Figure 6.1: Map of Akmola oblast and districts 40 Figure 7.1: The review of the main power institutes in the Republic of Kazakhstan 45 Figure 10.1: Wind rose in January 77 Figure 10.2: Wind rose in July 77 Figure 10.3: Annual wind rose 78 Figure 10.4: Yesil river embankment in Astana 80 Figure 10.5 Hardy-shrub species in Astana 84 Figure 10.6: Souslik 86 Figure 10.7: Golden eagle 88

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LIST OF ABBREVIATIONS ADB AsianDevelopment Bank AEDC Joint-Stock Company "Akmola Electricity Distribution Company‖ CAEPCO Joint-Stock Company " Central-Asian Electric Power Corporation" IEE Initial Environmental Examination(survey) SS Substation ESMS Environmental and Social Management System ESMP Environmental and Social Management Plan RK The Republic of Kazakhstan AERC AkmolaEnergyRetailCompany USSR The Union of SovietSocialist Republics KEGOC Kazakhstan Electricity Grid Operating Company MES (IEN) Inter-Municipal Electric Power Network REN Regional Electric Power Network LSS Linear Service Site RZA (PSP) Relay protection and automation (Power system protection) AREM (ARNM) Agency on Regulation of Natural Monopolies ASCAE AutomatedSystem for Commercial accounting of energy AFS Automatic failover switch NPSCP Negative phase-sequence-current protection OCP Overcurrent protection ShC Short circuit HV High voltage CBFP circuit breaker fail protection OLTC On-load tap changing KOREM(KPJMO) Kazakhstan Operator of Electricity and Power Market REDC Regional Electric Distribution Company RPSC Regional power supply company EIA Environmental impact assessment november 2014 page 6

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SES MH Sanitary and Epidemiological Service of Ministry for Public Health MM Mass media CEE Committee for Ecological Expertise DE Department of Ecology ToR Terms of Reference IA Implementation Agency EE Environmental Examination SR Safeguard Requirements GIDP ADB Gender identity and development policy RP Resettlement Plan SPS Safeguards Policy Statement LF Labour force GDP Gross domestic product MSW Municipal solid waste SanPiN Sanitary Regulations and Standards dBA Decibel - ampere PESA Environmental and Social Actions Plan EBRD European Bank for Reconstruction and Development SEP Stakeholder Engagement Plan AP Affected parties PESSHS Protection of the environment, social status, health and safety USD United States Dollar

MVA Mega volt amperes km Kilometer kV Kilovolt c/ha Center per hectare

GES (TM) City/town mains

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REVIEW

JSC ―Akmola Electric Distribution Company‖ and JSC ―Central-Asian Electric Power Corporation‖ (the latter within its activities is related to AEDC) are focused on the development and implementation of the Electricity Distribution Network Modernization and Extension Project, namely the reconstruction of the 110/10 kV voltage Astana substation, including the replacement of two power transformers. The project is implemented by JSC "Akmola Electricity Distribution Company‖ (hereinafter - AEDC) and is funded by the Asian Development Bank (hereinafter ADB). This Initial Environmental Examination(hereinafterIEE) was prepared for the proposed reconstruction of 110/10 kV Astana Substation and to ensure a good practice in the area of environmental protection and compliance with the requirements of the Asian Development Bank (ADB). Under the proposed investment program it is planned the modernization of the Astana substation located in Astana city. This production facility is in operation now. The reconstruction of the substation is being performed within the existing substation building and in accordance with the design assignment. The project provides for the replacement of existing power transformers TRDN-110-U1 of 40,0 MVA capacity by the transformers TRDN-110-U1 of 63,0 MBA capacity. AEDC owns and operates a 21,619 km of electrical power distribution network with voltage from 0.4 kV to 110 kV, and the network operates through approximately 4300 transformers and 3765 substations in total. AEDCthrough its electricity salessubsidiaries currently serves 116,000 end users in 14 districts of Akmola oblast and 181,000 end users in Astana and Stepnogorsk. These end-users are serviced through 22 direct electric power buyers, agricultural business, industrial and residential sectors. IEE complies with the legal and regulatory requirements of the Republic of Kazakhstan and the applicable requirements of the Asian Development Bank, AEDC and CAEPCO (within its activities related to AEDC). AEDCis currently investing in the modernization of electrical equipment (replacement of transformers)which is funded by the internal cash flows. The proposed modernization program will be funded by combination of ADBfunds and internal cash flows. The project belongs to the category ―B‖ in terms of the impact on the environment and to the category C in terms of the impact of the involuntary resettlement and indigenous population. More detailed information on ADB categorization is available in Chapter 9. november 2014 page 8

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Inaccordance with the requirements of ADB,the IEE report considers the potential negative and positive impacts of the project on the environment and recommends any measures needed to prevent, minimize, mitigate, or compensate for the adverse impacts and improve environmental performance. This IEE also includes an Environmental Management Plan (EMP) with a detailed description of mitigation measures.

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I INTRODUCTION

1 Purpose and content of the project

The purpose of this IEE is the regulation of environmental impacts and settlement ofenvironmental management problems related to the proposed reconstruction of the substation. This IEE report includes the Environmental and Social Management Plan (ESMP) aimed at ensuring the compliance with the current laws and Resolutions of the Government of the Republic of Kazakhstan, including the provisions of the ADB Safeguards Policy Statement (SPS) developed in June 2009. An important objective of this project is to determine compliance of the activities of ―Akmola Electricity Distribution Company‖ (AEDC) with the ADB's Directives on environmental security measures, involuntary resettlement and protection of the indigenous inhabitants, as well as other social policies such as Social Protection Strategy (2001), Gender and Development Policy (1998) and the Public Communications Policy (2011). This report consists of 10 parts. Sections 1 and 2 give the brief descriptions of Kazakhstan and Akmola oblast, AEDC’s organization structure and actions plan in the framework of the project which will allow evaluating the scope of work. Section 3 contains the state legislation related to environmental protection and the basic principles of ADB’s environmental policy. The next Section describes the aspects of environment, health and safety of the existing production facility (AEDC), including climatic characteristics, topography and landscape, soil and local water resources, flora and fauna. Section 5 is devoted to the socio-economic aspects of AEDC. The next Section gives the potential impact evaluation on natural resources and possible measures to prevent or mitigate its consequences. Also, this document contains the procedure of the information disclosure to related parties and the grievance mechanism. An important part of the Initial Environmental EvaluationExaminationis making a plan for the environmental and social management, which is contained in this report. All conclusions and recommendations are summarized in the final Section.

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2 Description of AEDC production facility

2.1 Review of Akmola Electricity Distribution Company

Regional Power Management Enterprise (Tselinenergo) was established on July,1,1961 by the order of the Council of National Economic Enterprise Tselinny No.224-p dated June 17, 1961, and was reorganized to "Tselinenergo‖ on October 6, 1980 by Order of the Minister of Energy and Electrification of the Kazakh SSR No.111 dated October 6, 1980. Later, the Power Industrial Group ―Tselinenergo‖ was reorganized into the Power Industrial Association and Electrification ―Tselinenergo‖ based on the order of the Ministry of Energy and Coalmining No.75 dated September 7, 1995. Further on, the Republican State Enterprise ―Tselinenergo‖ was reorganized into Akmola Electricity Distribution Company‖ (hereinafter AEDC) base on the decree of Akmola Regional Committee for State Property Management No.380 dated September,23, 1996. ThenAEDC was reorganized into Open Joint Stock Company ―AEDC‖ and registered byJustice Department of Akmola oblast with the Registration certificate No.328-1902 dated January,21, 1999, in compliance with the new RK law ―On Joint Stock Companies‖ dated July, 10, 1998. State registration certificate No.51-1902- AO was issued by Justice Department of Akmola oblast on September,3. The state registration of ―Akmola Electric Network Company‖ as a legal entity was carried out by Justice Department of Akmola oblast on the basis of Protocol No.1 of the Board of Founders of the JSC ―AEDC‖ dated February, 2, 2001 and theagreement on establishing JSC ―AEDC‖ dated February, 2, 2001, as per Certificate of State registration of a legal entity No.3160-1902- JSC, dated February, 12, 2001. In accordance with the adoption of the law of RK ―On Joint Stock Companies‖ №415-II dated May,13, 2003 and the need to harmonize the constitutive documents of the company in compliance with the new law, the company was re-registered (based on the resolution made by the general meeting of shareholders on June,20, 2003regarding the approval of the new edition of the Charter); and a Certificate on state re-registration of the legal entity No. 160-1902-AO was issued by Justice Department of Akmola oblast on January, 8, 2004. Later, after adoption of laws ―On amendments and additions to some legal acts of the Republic of Kazakhstan on securities market and joint-stock companies‖ (№72-III dated July,7, 2006), ―On amendments and additions to some legal acts of the Republic of Kazakhstan on protection of the rights of minor investors‖ (№230-III dated February 19, 2007) and amendments in the law of RK ―On Joint Stock Companies‖ №415- II dated 13 May 2003, the company was re-registered by the Justice Department of Tselinograd rayon of Akmola oblast and the ―Certificate of Re- november 2014 page 11

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registration of a legal entity‖ No. 198-1902-12 AO was issued on October, 15, 2007. In accordance with the Decree of the President of the Republic of Kazakhstan No.3878 ―On additional measures for the development of Akmola city - the capital of the Republic of Kazakhstan‖ dated March, 24, 1998, starting from July, 1, 1998, AEDC began to operate without the Akmola city electrical network due to transfer of the portfolio of assets of a natural monopoly holder into the ownership of the capital of Kazakhstan. Following the shift of the capital of the Republic of Kazakhstan to Astana in accordance with Resolution of State Property Committee No.43 dated February5,1998, the 10-0.4 kV electrical networks and 110, 10-0,4 kW substations were transferred from the balance sheet of JCS ―AEDC‖ to the balance of the Astana city Akimat (with inclusion of those in the balance sheet of the CJSC ―GES‖). Overhead power lines of 110 kV with a total length of 143 km located in the city of Astana, remained on the balance sheet of JSC ―AEDC‖only because former CJSC ―GES‖ (now JSC ―ASTANA REC‖) did not have the appropriate technical capacities.If JSC ―AEDC‖ does not reconstruct its 110 kV networks, then Astana city Akimat will constructnew 110 kV networks. Hence, JSC ―AEDC‖ is planning to construct overhead power lines 110kV ―HPP –Substation Astana‖. Theinvestmentactivitiesforconstructionofthe new overhead power lines is not coveredin this IEE. In the current situation and taking into account the existing obligations and accumulated debt on secured loans from the construction of permanent power complex―Krasny Yar‖ and ‖Astana‖, procedures were initiated in relation to AEDC based on the decision of the Collegium for Civil Cases of the Akmola regional court on June,11,1999 (the state owned 100% shares of AEDC). On the 16th of January 2001 according to the Decree of the RK Government No.50 ―Some issues of CJSC ―AEDC‖ the bankruptcy proceeding was initiated, and on the 13th of February 2001AEDC was declared as a bankrupt by Decision №K-110/N of Akmola regional court. Certificate of registration No.3160-AO was issued for CJCS ―AEDC‖ by Justice Department on February, 12. Contract No.1 on transfer of the portfolio of assets of the natural monopoly holder to the trust management for the period of bankruptcy procedure of CJCS ―AEDC‖ was signed on March, 1, 2001. On March, 1, 2002, CJCS ―AEDC‖ was transferred to the private ownership as the bankrupt company under Contract #40 КP. Then on the January8, 2004 CJCS ―AEDC‖ was renamed into JSC ―AEDC‖ in accordance with the RK Law ―On Joint-Stock Companies‖ №419-II, dated May, 15, 2003 and a certificate of registration (Certificate No.3160-1902-AO of January 8, 2004) was issued. november 2014 page 12

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At present AEDC is responsible for the distribution (and partially for transmission) of electricity for Akmola oblast and Astana, except for:  Burabay, Enbekshilder, Zerendy rayons,  Administrative centre of the oblast is Kokshetau city. AEDC owns and operates 110 kV, 35 kV, 10 kV and 0.4 kV powernetworks in its area of responsibility, as shown in figure 2.1. This complex structure makes AEDCa hybrid company dealing with the electricity distribution and transmission. The power supply structure in the service area of AEDC is shown in fig.2.2. The flow of energy shown in this figure shows the basic schemes and it is considered that new players can join the game at any time. For example, the private industrial companies can be directly connected to the AEDC electrical network, avoiding KEGOC’s electrical grid. Besides, now the energy flow from KEGOC through other electricity distribution companies to AEDC is a little different. Some of the power coming from KEGOC first goes to AEDC, and then is distributed to AESC as well as to others, such as the AEDC. Despite the availability of power transmission lines and main distribution networks with almost complete electrification of its service area from the USSR period, the degree of wear of the current network assets is high, this is due to limited investments for modernization and maintenance, since the USSR collapse up to 2010. The officials of AEDC stated in their interviews that the main reason for this situation is the limited budget when AEDC was a state-owned company. It was noted that the AEDC investment plans during the period 2001-2010 were not approved, and only a limited annual budget of USD 3 million was available, that is hardly to be enough even for the repair of the existing system. Therefore, this situation puts an additional burden of expenses for operation and maintenance, considering the relatively large service area of AEDC, urging the company to pay more attention to the investment in modernization. Agriculture and food industry play an important role in the economy of Akmola oblast. In addition, the population and electrical networks are widely spread, resulting in the need of modernization of the extensive rural network. A three-year investment plan of AEDC for 2013-15 is very high compared with the investment budgets in previous years. However, it is intended for modernization of only 1,57% of the existing network (i.e. 243 km of 15 500 km of HV/MV electrical network), and also taking into account that the average service life of network equipment is 30 years,AEDC has to increase the budget for modernization. In addition, AEDC also is responsible for continuous transmissionof electric power for power consumers of Astana city, the symbol-city of reconstruction and development of independent Kazakhstan, having clear november 2014 page 13

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goals for expansion and development in the future. We can conclude that the amount of AEDC’s investments in new urban infrastructure of electrical network will be in need of increase in the future, with the expansion and development of cities.

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Figure 2.1: Schematic map of AEDC JSC’s electric networks of 35kV and higher

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Figure 2.2: Power supply to consumers in the area of responsibility of AEDC

2.2 AEDC organization chart

AEDC organizational chart is shown in Figure 2.3. In general, AEDC is divided into three hierarchical levels, namely:  The General meeting of shareholders – supreme body;  Board of Directors – management body;  Board – executive body;  Inter-municipal electric power networks (hereinafter – IEN)(Akmola, Esil, Stepnogorsk). Most of the staff are employed by those Inter-municipal electric power networks (Akmola, Yesil, Stepnogorsk). Schematic structure of these three regional organizations are given in Figures 2.4.-2.5. These schematic structures do not describe the roles within each Department, but rather show how the organization is further divided into 14 rayons of Akmola oblast, except for Borovoye, Enbekshilder and Zerenda rayons as well as the oblast center - the city of Kokshetau. These 14 rayon organizations then divided into 84 linear service sites (LSS). For these sites the Regulations on sites and job descriptions for operational and maintenance staffwere developed. These sites are rather small and managed by Inter-municipal electric power networks.

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Figure 2.3 Organization chart of AEDC november 2014 page 17

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Figure 2.4: Organization chart of AEDC branches

Figure 2.5: Internal chart of AEDC branches (inter-municipal electric power networks)

2.3 Information of AEDC personnel

Data on AEDC personnel is given in tables 2.1. and 2.2. Change in the personnel number is caused by a number of objective reasons:  In 2004, in accordance with the legislation (Law on Electric Power Sector of 2004.) there was a separation of activities on electric power supply from the transmission and distribution of electric power through the creation of a subsidiary - LLP ―AEDC-Energosbyt‖.  In 2006 according to the Order issued by the Department for regulation of natural monopolies of Akmola oblast, the canteen and a design bureau were withdrawn from the staffing structure. november 2014 page 18

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 In 2012 under the RK law "On security activity" the security service of the administrative body was dissolved, since this service became subject to a compulsory licensing.  In 2013 for maintenance and repair works Atbasar RENs AMES created a group of power lines and increased the number of maintenance personnel group of the substations.  In 2014, for introduction of the automated control system of production facilities and assets «Ellipse» it was set a special unit to the support database for MaintenanceandRepair, Procurement, Finance, Human Resources. Thenumber of AMR (automated control system and power metering) personnel was increased to implement the approved investment program and to increase the number of metering points on the upper and household levels.

Table 2.1: Information on the average number of AEDC employees by categories Category 2012 г. 2013 г. 2014 г. person % person % person % Workers 1 283 64 1 308 64 1 320 64 Managers 282 14 285 14 299 14 Specialists 409 21 425 21 446 21 Non-productive 26 1 27 1 22 1 personnel Total 2 000 100 2 045 100 2 087 100

From table 2.1 you can see that when the number of personnel is changed, the percentage ratio remains the same and the balance between the categories is kept. This proves the efficiency of the Company.

Table 2.2: Information on AEDC’s staff size in view of positions

Classification of 2001 2005 2010 2011 2012 2014 employees Repair works 361.1 348.1 308 298.5 299.3 314.6 Maintenance support 448.2 429.5 401.3 386.1 388 384.2 Taking meter readings 104.0 100.4 68.5 76.5 76.5 84.4 Automated Utility Metering systems, 36.0 48 51.0 52 56 relay protection and 63 automation november 2014 page 19

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Classification of 2001 2005 2010 2011 2012 2014 employees Legal service and 16.0 16.0 14.0 14.0 14.0 14.5 claim settlement Mid-level managers, 256 254.5 253.27 252 259 279,9 incl.: Heads of services and 132,5 129,5 142,27 142 149 163,9 sectors Foremen 123,5 125 111 110 110 116 Planning 35 36 42 37 37 43 Dispatching service, 104 101 102 101 101 103 incl.: Managers 5 4 4 4 4 4 Mode Engineers 7 5 6 5 5 5 Operational 92 92 92 92 92 94 dispatchers Security (guard) 102 102 126 121 81 82 Cleaning 61.3 63.4 69.5 69.5 70.5 71.5 Cashiers 22 8.1 6.8 6.8 6.8 1.7 Balance and electric 83 76.7 34 34.3 34.3 34.3 power metering Accounting 44 38.5 43.7 44 43.5 47.5 department Finance 3 4 4 4 4 4 Engineers 166.6 168.1 148.1 144.1 154.6 179.3 Topmanagementincl.: 62 47.5 47.5 48.5 48.5 49.5 Board 4 4 4 5 5 5 Directors of IEN, Managers of REN and 34 20,5 20,5 20,5 20,5 20.5 their deputies Chief Engineers and 24 23 23 23 23 24 their Deputies Others (Drivers,cargo 373.6 356.5 385.5 383.5 389.8 402.8 companies)

Others (loaders etc.) 6 6 6 5 5 5

Total 2,283.8 2,204.3 2,117.17 2,077.8 2,068.8 2164.5

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Table2.2 shows the authorized staff size with all thevacancies.Not allexperts of AEDC workat 8 hour shift, andthere are some categories ofworkers in the company, whichwork at4/7/8/12/24hours shift.Therefore,staffingis made taking into account the specific features of thecompany.In this connection the number ofstaffing positions have decimals. For this reason,the number ofstaff positionsand actuallyworkingemployees differ. The company operation is guided by the current legislationtaking into account theworking timeand according to the staffing. Having considered data from table 2.2 we can come to the following conclusions:  Linear Service Sites are engaged in technical maintenance, overhaul and current repairs, rehabilitation works. Such distribution of duties is observed almost in all distribution companies of the region.  The staff of Linear Service Sites realize the disconnecting or connecting of the power equipment in order to give an access to the crews of the third parties to electrical networks of JSC «AEDC» for the repair and construction works and re-connecting consumers to electric networks.  During a specified period the number of staff of the Legal and Customers ClaimsDepartments has been decreased due to separation of power supply activity. The low level of normative technical losses should be noted:in 2014 - 5,02% comparing with the approved rate of 5,95%. The average percentage of losses in the Republic is 15.3%.  At average, 6 technical maintenance and repair men for one are supervised by one foreman of a Linear Service Site.  At average, one head of a Dispatching Department supervise 23,5 dispatchers. Dispatching Departments work 24 hours a day. The staffing level is 5 dispatchers for one Regional Electric Power Network (REN).  As of Junauary,1, 2014 there were 528 vehicles on the books of the company, including:  Specialized machinery (cranes, drilling machines, laboratory)- 127 pcs.;  Trucks – 162pcs.;  Motor cars – 200pcs.;  Others (tractors, trailers) – 97pcs. At the same time the area of the service territory is 121,15 thousand km2 and it is necessary to deliver the personnel to their working places – LSE, substations which are far from the district center and to deliver the dispatchers at night time. At average, one driver of a motor car serve 10 employees of the company. november 2014 page 21

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In accordance with Figure 2.6, the company employs303 managers including the foremen, 477 specialists of different levels, including engineers, metrologists, mechanics, etc., 22 employees of the office staff, such as secretariesand 1309 workers, including electricians, drivers, cleaners, etc., both the skilled and unskilled.

Figure 2.6: Classification of AEDC employees by category (as of the end of 2014)

The average age of employees is 43 years old. The age of retirement (pension) under the laws is 63 years and with proper management the company will be provided withqualified personnel for many years. JSC "AEDC" has its own training center where the staff is trained annually to improve the skills. Also the employees take the mandatory training on industrial safety and labor protection, transportation of dangerous goods with the third-party institutions, prove certificates of metrologists and professional accountants. One of the technical indicators is the scope of electric networks servicing, which is measured in standard units. Information about the education level of AEDC staff is given in Table 2.3. As it seen from the Table, 26% of AEDC employees have higher education (Bachelor and Masters Degrees), 35% graduated from the Colleges and vocational schools and 39% have secondary education. 63% of the managerial staff has the higher education. This indicates a high level of qualification. november 2014 page 22

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The structure of company's employees by work experience in the power system by categories is given in Figure 2.7. Figure 2.8 illustrates the structure of AEDC employees by categories and by age.

Table 2.3: Data on educational background of AEDC employees (as of the end of 2014) AEDCTo Manager Office Worker Employees Experts tal s workers s Total 2 111 303 477 22 1 309 Higher 546 189 296 9 52 education College and 745 80 158 8 499 vocational schools General 820 34 23 5 758 secondary education

Figure 2.7: The structure of company's employees by work experience in the power system by category (as of the end of 2014)

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Figure 2.8: Structure of AEDC employees by categories and age (as of the end of 2014)

Due to the nature of works (repair of high voltage power lines at a height of 7 m and higher, power equipment with voltage up to 220 kV) 76% of employees are men. At the same time the accounting, economic and financial sectors are staffed by female personnel. Top management is widely represented by women. The human resources department of AEDC also informed that 80% of employees are men, and to increase a number of working women is of great interest for the company. Although the numbers seem low, we understand that the top management in AEDC is mostly represented by women. Due to the specificity of the power business, this rating itself is not so bad. For more detailed information refer to Figure 2.9.

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Figure 2.9: Gender structure of AEDC employees by categories (as of the end of 2014)

3 Brief description of the planned work for reconstruction of substation "Astana"

3.1 Reconstruction of 110/10 kV Substation "Astana"

110/10 kV substation Astana is located in the central part of Astana at the intersection of Omarov and Aimanov streets. Access road to the substation is covered by asphalt. The location of the substation is characterized by the following climatic conditions once for 10 year return period: - area in terms of wind — III - area in terms of slippery surface — II - the number of storm hours per year — 20-40 - area in terms of the atmosphere pollution — IV.

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Table 3.1: Technical-and-economic indexes Name Indexes 1. Project Client JSC ―AEDC‖ 2. Climatic conditions:

- area in terms of slippery surface II

- estimated width of slippery surface, mm 16

- area in terms of wind III

- rated wind speed, m/s 32 IV - area in terms of pollution of the atmosphere 20-40 - the number of storm hours per year, hour 3. Transformers of 63,0 МVА capacity, a set 2 4. Rigid bus arrangement 10 kV Mono Trolley 1000 Duct 120х10, m 5. Arc suppression coil, a set 4 6. Input cell 2500А, 25kА, pc 4 7. A cell of busbar section breaker 2500А, 2 25kА, pc 8. A cell of busbar coupler 2500А, 25kА, pc 2

Electrical solutions. The project provides for replacement of existing 40,0 MVA TRDN-110-U1 transformers by 63,0 MBA TRDN-110-U1 transformers. Existing input cells, cells of busbar section breaker and coupler, 10 kV busbars, and 10 kV busbar bridge of the Switchgear and Control Gear operate at rated current of 1000-1600 A and to be replaced by the similar with rated current of 2500 A. Due to replacement of the transformer, the existing busbar bridge is being rebuilt between the transformer and the 10 kV Switchgear buildings, as the load carrying capacity of the busbar bridge is below than the rated current of the transformer. The existing rigid bus arrangements Mono Trolley Duct 100х10 are being converted into rigid bus arrangements Mono Trolley Duct 120х10. Rebuilding of 10 kV busbar bridge includes replacement of support and wall tube insulators for the new ones that correspondto the nominal current of the designed transformer. november 2014 page 26

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The existing wiring on 10 kV side will be remained. For the smooth operation of the substation in 10 kV Switchgear will be replaced the parts of busbars, four input and four sectional cells 8BK80 for the similar, produced by JSC "KEMONT", with the increase of their nominal current up to 2500A. Worn-out and obsolete devices of arc suppression reactors are replaced with devices of arc suppression reactors with "SAMUR"control system used for reactive power compensation. The fire alarm system and "TUNGUS" dry-chemical extinguishing system will be installed together with the fire alarm device in a duty room of the substation building. Fire alarm system. The project provides for the fire alarm system in the building. Point smoke sensors serve as fire detecting sensors. Alarm control panel is installed in the duty room. Dry-chemical automatic fire extinguishing system "TUNGUS" will be installed in the chambers of power transformers. Fire extinguishing system is arranged in such a way that when the fire sensor is activated the alarm control panel installed in the duty room receives the signal. In order to avoid false alarm and starting up of the fire extinguishing process, the start up of fire extinguishing modules is done manually using the manual fire alarms installed in the corridor, at the entrance to the transformer chamber. Relay protection, automatic equipment and cable facilities. The principles of implementation of relay protection and line automatic equipment In accordance with "Electrical installation code" and the requirements of "Guidelines for the relay protection" section 13B "Relay protection of 110- 500 kV step-down transformers and autotransformers" the following protection measures are taken into consideration at "Astana‖ substation: - transformer differential protection; - transformer gas protection; - voltage controlled overcurrent protection of the transformer on 110 kV side; - overcurrent protection from overload surge current; - overcurrent protection on inputs 10 kV of the transformer. Moreover, it is planned to install an automatic failover switch (AFS) at 10 kW busbar coupler with the circuit restoration after an accident and the stepped automatic frequency load shedding at 10 kV busbars. All protection is performed on the microprocessor units. november 2014 page 27

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Microprocessor digital blocks, apart from protection functions, perform the following additional functions: - measurement of the parameters of the normal operating mode (current error is no more than 2%, voltage error is no more than 3%); - registration of emergency mode parameters - digital oscillography of analog and discrete parameters (maximum number of oscillograms is 8, the maximum recording time is 5 sec); - self-diagnosis of working capacity and control of external measuring and command circuits; - freely programmable discrete inputs and outputs, and LED displays.

Description of logic functions for Relay protection and automation (RPA) 110 / 10-10 kV Substation "Astana". Device 7SJ635. Protection on 110 kV side of the transformer and 110 kV breaker control (Q0). Designation of internal functions of the device: 1.1 ANSI 50, 51. Overcurrent protection 110 kV has three stages at operative current, actuating at monophase and phase-to-phase short circuit in the protected zones. I stage 50-2 (with more set operative current value), with an independent time-lag will work on: - opening of 110 kV circuit breaker and disconnection of the local10 kV switches; - the start of circuit breaker failure protection and blocking of 110 kV circuit breaker. II stage 50-1 (with less set operative current value), with an independent time-lag will work on: - opening of 110 kV circuit breaker and disconnection of local 10 kV switches. III stage 51, with the inverse time-lag will work on: - opening of 110 kV circuit breaker and disconnection of local 10 kV switches; Note: Upon selection of the operating organization, instead of (or in addition to) 3-stagesof overcurrent protection (with inverse time-lag), the second (additional) independent time-lag of the 2nd stage of overcurrent protection with similar opening process can be installed, that shall be done additionally in case of the configuration locomotion (CFC).

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1.2 ANSI 46.The 110 kV negative phase-sequence-current protection has three stages at operative current, acting at asymmetric short circuit in the protected zones. I stage 46-2 (with more set operative current value), with independent time-lag will work on: - opening of 110 kV circuit breaker and disconnection of local 10 kV switches; - the start of circuit breaker failure protection and blocking of 110 kV circuit breaker. II stage 46-1 (with less set operative current value), with independent time-lag will work on: - opening of 110 kV circuit breaker and disconnection of local 10 kV switches. III stage 46-ТОS with inverse or independent time-lag will work on: - opening of 110 kV circuit breaker and disconnection of local 10 kV switches; - the start of circuit breaker failure protection -110 кV. Note: According to the selection of the operating organization, instead of (or in addition to) 3-stages negative phase-sequence-current protection (with inverse time-lag) a second (additional optional) independent time-lag of the 2ndstage of negative phase-sequence-current protection with similar opening process can be installed, that shall be done additionally in case of the configuration locomotion (CFC). 1.3 ANSI 46 Overcurrent protection of the transformer on 110 kV side. 1.4 FR. Fault recording system records and displays on the device screen and provides the possibility of remote data transmission: - phase currents of the switch, zero-sequence current; - phase voltage; zero phase sequence voltage. 1.5 ER. Inside events recording system of the device for storing, displaying on the device screen and for remote transmission of trigger events and internal function errors, and startup signals of binary inputs. 1.6 A measuring device of the analog data of the current, active, reactive and gross output of the transformer, of the voltage and frequency of 110 kV with showing the data on the device display and for remote data transmission. 1.7 ANSI 74ТС. A functional testing of 110 kV switch tripping circuit (2 channels). It acts on the signal and blocking of circuit breaker closing. 1.8 Switching the groups of protection settings of a device with Sx9 switch (or using the device keyboard). november 2014 page 29

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Device 7UT613. Differential protection and process protection of the transformer Purpose of internal functions of the device: ANSI 87Т. Longitudinal differential current protection works for monophase and line-to line short circuit (SC) in the protected zone within the area bounded by the current transformers, without time-lag affect: - opening of 110 kV and 10 kV transformer circuit breaker; - blocking of 110 kV circuit breaker. ANSI 87N. Restricted earth fault protection, actuates at earth fault in the protected zone within the area bounded by the current transformers, without time-lag affect: - opening of 110 kV and 10 kV transformer circuit breaker; - blocking of 110 kV circuit breaker. Note: Function of restricted earth fault protection is used only if the transformer functions with constantly grounded neutral HV winding. ANSI 51. Overcurrent protection of 110 kV at excess current on the side of the 110 kV transformer, without time-lag acts on the blocking of an action (switching) OLTC (on-load tap-changer). FR. Fault recording system screens records on the device display and provides remote data transmission - phase currents of the transformer, zero-sequence current. ER. Inside events recording system of the device for storing, screening on the device display and remote transmission of trigger events and internal function errors, and startup signals of binary inputs. A measuring device of the analog quantity of the currents of the transformer screening data on a device display and remote data transmissing. Switching the groups of protection settings of a device (using the device keyboard). Device REG-D. Automatic voltage control of the transformer. Setting of internal functions of the device: Voltage control device of the transformer on the side of 110 kV, (manual and automatic drive control of OLTC of the transformer), with the definition of OLTC position. FR. Fault recording system screens records on the device display and provides remote data transmission: - voltage on the side 10 kV transformer - current on the side of the 110 kV transformer.

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ER. Inside events recording system of the device for storing, screening on the device display and remote transmission of trigger events and internal function errors, and startup signals of binary inputs. Display of measured and processed analog values: - voltage on the side 10 kV transformer - current on the side of the 110 kV transformer - P, Q, S, cos, , I*sin, f.

Organization of operation The substation operates using the existing facilities, and acquisition of additional equipment is not foreseen by the technical specifications. At present time AEDC can monitor the condition of its electric networks with a maximum delay of 15 minutes using the existing 467 RTU. Monitoring of substations is shown in Figure 3.1. КАРТА-СХЕМА ЭЛЕКТРИЧЕСКИХ СЕТЕЙ ЗАО"АРЭК" 110кВ и ВЫШЕ

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Новосельская Гидроузел 2х10,0 Есиль тяг Буландинский р-он Искра Алексеевка 10,0+7,5 ЕГПП Журавлевка 220 220 2х10,0 Фрунзе 2х6,3 ОП-80 Атбасар Урюпинка Жаксы 2х6,3 Красивинская 1,0+1,6 220 Ирченко 2х10,0 Победа 220 220 Перекатная 2х10,0

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Figure 3.1: Monitoring of AEDC substation with existing SCADA system

This investment activities consisting of installation of 948 metering units in 2013-2015 is important for AEDC, mainly because of the prospect of a gradual replacement of the parts of the existing SCADA and improving AEDC monitoring capabilities with a large network coverage. Replacement of transformers 2x40 MVA with 2x63 MVA is being considered in order to minimize the risks associated with the implementation, taking into account the professionalism and experience of AEDC in such kind of business. Since the substation has two operating november 2014 page 31

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transformers, which will be replaced stepwise, the substation reconstruction will not affect the electricity consumers. Replacement of transformers will not lead to an interruption of the service for the consumers because when one transformer is replaced the second one will remain operating. Completion time for a projectis provided in Table 3.2. According to Table 3.2, the critical stage of this project is, in particular, the process of equipment procurement, which includes the ordering, manufacture, factory testing and temporary switching of power transformers. Nowadays in Kazakhstan there are no transformer plants producing transformers with considerable capacity, such as the transformer of 63 MVA level. Therefore, power transformers will be imported from other countries. Thus, AEDC provides transmission and installation services under the contract of transfer and installation.

Table 3.2: The timing of replacement of 2x40 MVA power transformers with 2x63 MVA power transformers 2014

April May June July August September October November December Maintenance and logistics support Preparation of specifications, collection of quotations Conclusion of a contract ⃰ Transformer, planning and approval Transformer manufacture Installation of the 1st transformer Conclusion of the contract for installation of the 2nd transformer (according to the quotation) Installation of the 2nd transformer

Estimated 2x63 MVA power transformers will be connected to one of the existing transformer halls in 110 / 10kV substation in Astana, one of which is shown in Figure 3.2. The picture of the existing substation is shown in Figure 3.3. november 2014 page 32

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Figure 3.2: Transformer hall in Astana substation

Figure 3.3: Astana substation november 2014 page 33

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Disconnecting of onepower transformer of 110/10 kV Astana substation Astana 110/10 kV substation plays a key role of the only substation in the "Old district" of Astana. Despite the very limited amount of demand it can be shifted into alternative substation via 10 KV distribution level of ―Astana REC‖, it could be observed an unmet demand, that is nearly 18 MW in this case, as shown in Figure 3.4

Figure 3.4: Disconnecting of one of 40 MVA power transformerin Astana 110/10 kV (de facto)

If to assume that after the replacement of the existing 40 MVA power transformers with 63 MVA power transformers there will be unexpected expenses and some adjustments in the work, which are previously taken into consideration to prevent voltage drops, as shown in figure 3.5.

Figure 3.5: Disconnecting of one of 63 MVA power transformerin Astana 110/10 kV (after the proposed investment)

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3.2 Methodology and scope of the study

This IEE covers the environmental requirements applicable in the Republic of Kazakhstan and ADB requirements, description of the background characteristics of environmental and socio-economic conditions, potential impacts on the environment, land acquisition/resettlement, indigenous people and other social issues related to the reconstruction of the substation in Astana City, the recommended mitigation measures and programs for management of ecological and social environment (PMESE). IEE is based primarily on previously prepared project documentation and consultations with representatives of the companies AEDC and CAEPCO (within activities related to JSC "AEDC"). The preparation of this IEE was done on the basis of theoretical study and consultation with the developers of the substation reconstruction project. Consultations were heldwith the participation ofthe Chief Engineerof AEDC, Chief Engineer of AkmolaMES, Project Chief Engineer, Energy Divisionof Akmola Oblast Akimat, Department of Ecologyin Astana, as well as interestedindividuals. This IEE considers the reconstruction of the substation 110/10 kV "Astana"financed by ADB. 110/10 kV Astana substation is located in the Central part of Astana at the intersection of Omarov and Aimanov streets. The territory is not characterized by environmental exposure, the air, water, and acoustic environment is not polluted, and there are no objects of national importance protected or located in close proximity to the facility. Reconstruction and modernization of"Astana"Substation will be performed on the territoryof the existingsubstation, so there are noresidential orpopulated areas in the sanitary protection zone, and thereforeno additionalland acquisitionis required for the substation to be reconstructed. The proposed investment activity includes the works on partial modernization, consisting of the reconstruction of the substation, improvement of the automated system of electricity consumption, the acquisition of specialized equipment, procurement of custody transfer metering station, procurement of computers and software, and so on. Improvements that can be made in Astana include the replacement of the power transformer of the existing substation. The main purpose of these investments is to increase network reliability, reduce losses, ensure security of power supply and reducing the number of failures by improved infrastructure, which is especially important in the harsh winter conditions. november 2014 page 35

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II KAZAKHSTAN AND AKMOLA REGION

4 Kazakhstan

Kazakhstan is the largest landlocked country in the world and is the ninth largest by land area country in the world (figure 4.1). In the North and West it has borders with the Russian Federation — 7548.1 km, in the East with China — 1782.8 km, in the South with Kyrgyzstan — 1241.6 km, Uzbekistan— 2351.4 km and Turkmenistan— 426.0 km. The total length of the land borders – 13,392.6 km. The capital of Kazakhstan - Astana city (since December, 10, 1997). Population - 697,1 thousand people. Nowadays, the system of administrative-territorial structure of the Republic consists of 14 oblasts (provinces), 2 cities of republican significance, 175 administrative rayons, 87 cities, 35 towns and 6982 villages 1.

Figure 4.1: Administrative map of Kazakhstan

Ethnic composition of the country is as follows: 63,1% Kazakhs, 23,7% Russians, 2,9% Uzbeks, 2,1% Ukrainians, 1,4% Uyghurs, 1,3% Tatars, 1,1%, Germans, 4,5% and others. 52.6 % of the population lives in the cities. 3-4% of the population has no access to the electric power.

1Web Site of the Parliament of the Republic of Kazakhstan www.parlam.kz november 2014 page 36

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5 Economics

Kazakhstan shows the "power" growth of the economy. Owing to the high world prices for crude oil, values of GDP growth during the period from 2000 to 2007 made from 8.9% to 13.5%, and in 2008 and 2009 decreased by 1– 3% with the subsequent rise since 20102(average annual growth rate in difficult percent - 8.2% during 2001-2011). Other main points of export from Kazakhstan include wheat, textile products and cattle. It was predicted, that Kazakhstan will become the leading exporter of uranium by 2010, and this forecast really came true3.The power industry is the leading sector of economy. Production of crude oil and the liquefied natural gas from the oil and gas fields of Kazakhstan is the main driving force. Oil export of Kazakhstan in 2003 was estimated more than at 7 billion dollars, representing 65% of total exports and 24% of GDP. According to the industry analysis, the expansion of oil production and development of new fields will give to the country the chance to make to 3 million barrels (480,000 m3) of oil a day by 2015 and Kazakhstan will take a place among 10 best manufacturing countries of oil raw materials. For economic development the most important fact is that RK takes the 11th place in the world on explored reserves of oil and natural gas4. According to 2012-2013 data of the World Economic Forum presented in the Global report on Competitiveness,Kazakhstan takes 51st place in the world on economic competitiveness that is much higher,than the 72nd place by results of the report for 2011-2012 and 2010-20115.

6 Akmola oblast and Astana city

The Akmola oblast is located in northern part of the country. The area was founded in 1939. The Akmola oblast borders with four other areas of Kazakhstan: Kostanay oblast (to the West), the North Kazakhstan oblast (to the North), Pavlodar oblast (to the East), and Karaganda oblast (to the South).

2World Bank, Information search worldbank.org 3Website Kazatomprom National Company, Kazatomprom.kz. 2009-12-30; Uranium and Atomic Energy in Kazakhstan, world-nuclear.org. 2011-02-17 4International Crisis Group. 2007. Energy risks in Central Asia, Asian Report №. 133. May. Available http://www.crisisgroup.org

5TheGlobalCompetitivenessReport 2012–2013 november 2014 page 37

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The total area of the oblast is 146,2 thousand sq.km (as of January,1, 2014) that makes 5,4% of the territory of Kazakhstan. The oblast is a midsize area of the country (9ththe largest, or 6th the smallest oblast). The map of Akmola oblast with rayons is given below, in Figure 6.1:

Figure 6.1: Map of Akmola oblast and districts6

Akmola oblast includes 17 rayons, 10 towns, 2 of which are the towns of the oblast level and 8 towns of the rayon level and 631 settlements. Detailed information on administrative districts of Akmola oblast, including their areas, also number of the towns and settlements are given in Table 6.1: below.

Table 6.1: Administrative rayons of Akmola oblast (as of the beginning of 2014)7 Area, Rayons of the Number of Number Number of thousand oblast rayons of towns settlements sq.km.

Total for the oblast 146.2 17 10 638

Kokshetau town 0.4 - 1 4

6SiteofPrimeMinisteroftheRepublicofKazakhstan 7Source: Agency on Statistics, 2014 november 2014 page 38

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Area, Rayons of the Number of Number Number of thousand oblast rayons of towns settlements sq.km.

Stepnogorsk town 1.5 - 1 12

Akkol 9.4 1 1 30

Arshaly 5.8 1 - 33

Astrakhan 7.4 1 - 36

Atbasar 10.6 1 1 35

Bulandy 5.1 1 1 38

Burabay 5.9 1 1 54

Egindikol 5.4 1 - 13

Enbekshilder 11.0 1 1 38

Ereymentau 17.8 1 1 34

Yesil 8.0 1 1 33

Zhaksy 9.7 1 - 31

Zharkain 12.1 1 1 23

Zerendy 7.8 1 - 79

Korgalzhyn 9.3 1 - 22

Sandyktau 6.4 1 - 41

Tselinograd 7.9 1 - 53

Shortandy 4.7 1 - 29

Joint-Stock Company "Akmola Electricity DistributionCompany" (AEDC) is responsible for all area, except Burabay, Enbekshilder, Zerendy districts and the oblast center of Kokshetau. Astana-the new capital ofthe Republic of Kazakhstan. The city territoryis 0,7thousandsquarekm,bordered with Akmola oblast.By the administrativeterritorial structure the city hasthree areas: Almaty, SaryarkaandYesil. The populationof the city as ofJanuary 1, 2014amounted to814,4thousand people.The population density as of1 January 2014– 1147,1people per 1 square. km. Astana is locatedin the northern partof Central Kazakhstanon the bank of the riverIshim. The relief ofthe urban areais characterized bya lack of november 2014 page 39

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noticeabledeviationsandclearly definedforms.A distinctive featureis itssharply continental climate.Winters are cold, long, severein some years. Steady snowcover is formedin the middle ofNovember and lasts 130-140days.The average January temperature-17º C, some daysit goes down to-42ºC. Summers are moderatelydry, characterized byhot, dryweather.The average temperaturein Julyvariesfrom +23 ° Cto +19ºC, frequently the temperature raises up to +40,+42º C. The duration ofthe warm period is 213days.Annual rainfallis 300 mm.The averageannual wind speedin Astana is 5 m / s. Astana is the political, business and cultural centerof the Republic ofKazakhstan, the center for theinternational symposiums, conferences, summits, seminars, workshopson a widerange of issuesof human development.During theyears ofthe capital establishment, the city economics has been rapidlygrowing.Socio-economic indicators characterizing the development of the city prove on the formed trendofdynamicgrowth ofthe real economy,increase of the investments flow into the economyof the capitaland enhancement of the social indicators.

7 Electric power

The Ministry of Energy is the government body responsible for power policy. The Law on the Electric power was adopted in July, 2004. One more basic law regulating the market of the electric power is a Law on Natural Monopolies and controlled markets with the last amendments of December, 2008. The Agency on Regulation of Natural Monopolies (AREM) acts as the market regulator. The electrical power system of Kazakhstan includes 71 power plants with the general rated volume of 18,572 mV8. 86.5% of the generated electric power is privatized. About 3-4% of the population in rural districts are not connected to the grid. There are no seasonal variations of energy supply. Available capacities don't provide sufficient demand. Northern regions, including Akmola, East Kazakhstan, Kostanay and Pavlodar oblasts have an excess reserve of power of 1,980 MW or 7.6 million kWh annually; the excess power is transmitted to other regions of Kazakhstan and exported to Russia. In the western regions (Atyrau, Mangistau and West Kazakhstan oblasts) deficit of power of 77 MW is observed or 0.2 billion kWh which is covered due to import from Russia. In the southern regions (Almaty,

8Kazakhstan – marketof electric power. Internationalnetworkofpowerregulation november 2014 page 40

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Zhambyl, Kyzylorda and South Kazakhstan oblasts) there is a tendency to formation of deficit of power of 956 MW or 4.8 billion kWh which is compensated for the account of transfer of the electric power from northern regions and import from the Central Asian republics. The central region (which is usually regarded as part of a northern zone), including the Karaganda oblast has a deficit of power of 619 MW. In the Aktobe oblast (which is also a part of the Northern zone) deficit of 325 MW is observed. Thus, in all regions of Kazakhstan, except the northern oblasts where the surplus is observed, there is a regional deficiency of electric energy. The transmission system belongs and is operated by the KEGOC National Company. As of January 1, 2012, the total length of transmission lines made 24,101 thousand km9. There are 18 regional distribution companies (sellers). The Government doesn't regulate a retail selling price of electricity, and consumers have a free choice among the suppliers of the electric power; though the similar isn't applied in practice for a number of reasons, including the standard decisions, such as to keep the process of taking the meters’ readings for the company seller, instead of the company distributor. On the other hand, the Government regulates the tariffs for transmission and distribution. Kazakhstan plans to invest 9.4 trillion tenge to strengthen the power sector up to 2030. About 5.5 trillion tenge will be directed for the power production, 1.4 trillion will be invested in national power grids and 2.5 trillion tenge will be allocated to the regional distribution companies. The draft document published in October 2012 assumes the creation of standard electric system with decreasing the environmental load, increasing a share of renewable energy sources in the energy production in Kazakhstan and introduction of power-efficient technologies10.

7.1. Organization of power industry sector: state regulation

State regulation is explained in the Law on Power Industry of the Republic of Kazakhstan by means of the following items11:

1. State regulation in sector of the electric power is applied for:

9Kazakhstan– marketofelectricpower. Internationalnetworkofpowerregulation 10Kazakhstan project in the amount of 9.4 trillion tenge to strengthen the energy sector until 2030, Central Asian Newspaper (Satrapia), November 8, 2012 11RKLawOn Electric Power Industry‖ dated July, 9 , 2004 november 2014 page 41

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1) the maximum satisfaction of demand of energy consumers and protection of participants' rights of the market of electric and thermal energy by creation of the competitive conditions in the market that guarantee the consumers a right to select the suppliers of electric and thermal energy; 2) ensuring a safe, reliable and stable functioning of an electrical power complex of the Republic of Kazakhstan; 3) unified management of an electrical power complex of the Republic of Kazakhstan as an especially important life support system of economic and social complexes of the country. 2. Goals of state regulation in the field of power industry are: 1) effective, safe functioning and development of an electrical power complex on the basis of unified management and competition development; 2) consumers’ rights to choose the supplier of electric and (or) thermal energy; 3) regulation of activity in the sphere of natural monopoly, and also creation of conditions for protection of domestic producers of energy; 4) creation and improvement of controlled market of electric and thermal energy; 5) effective and economic consumption of electric and thermal energy; 6) use and development of renewable and nonconventional power sources; 7) attraction of investments into development and re-equipment of an electrical power complex; 8) creation of conditions for performance of a set of actions for environmental protection, reliability and safety of construction at operation of power lines, electro - and power installations; 9) creation of conditions for the organization of power supply to the remote regions of the country; 10) establishment of national standards of functioning of the unified electrical power system of the Republic of Kazakhstan and quality of electric energy. 3. State regulation in the field of power industry includes: 1. licensing 2. regulation (prices, tariffs); 3. demonopolization and privatization of power generation facilities; 4. state supervision of reliability, safety and profitability of production, transmission, dispatch control and consumption of electric energy; 5. technical regulation of the power industry sector.

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7.2 Organization of the power industry sector: key participants

Key participants of sector can be described as follows:  The Ministry of Energy establishes the sector policy, controls and regulates the power industry sector;  The Agency on Regulation of Natural Monopolies (AREM) is the regulator of the organizations which are regarded as "natural monopolists", including the companies dealing with the energy transmission and distribution and the central distribution of the electric power; thus, the Agency also regulates the tariffs connected with it. AREM also controls the acquisition of shares or assets of the enterprises of natural monopolies;  KEGOC – the operator of a high-voltage network – includes the National Distribution Centre and serves as the system operator of National System of Power industry;  The Agency on protection of the competition controls work of the competitive markets for determination of the abuses in the market and prevention of market manipulations;  Kazakhstan operator of the electric energy and power market (KOREM) operates the centralized trade platform for short-term, medium- term and long-term trade;  The Committee for ecological regulation, control and the state inspection in an oil and gas complex of the Ministry of Energy of RK creates conditions for preservation, restoration and improvement of environmental quality;  The Regional Energy companies divided into the Regional Electric Distribution Companies (REDC) and Regional Power Sales Companies (RPSC), i.e. into the distribution and sales companies, respectively. Privatization of the regional distribution companies (REDC) moves slower in comparison with energy production sector, since the majority of distribution networks are still not privatized;  Akimats which are the governments of the city, oblast and rayon levels playing the role of RPSD in such significant cities, as Astana and Almaty;  Wholesale companies: The wholesale market of the electric power is based on bilateral contracts.  Production companies: the electric power is generated by more than sixty power plants. Most of electric power producers in Kazakhstan are the private companies with a foreign share in property;

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 Balancing is carried out by the System Transmitting Operator with involvement of power systems of Russia, Kyrgyzstan and Kazakhstan producing companies. The following Figure 7.1 illustrates operations between the main divisions in the power industry sector of Kazakhstan.

Figure 7.1: Review of basic power institutions in the Republic of Kazakhstan12

7.3 Organization of power industry sector: key rules of the market

Some key points of market transactions, which have the main impact on the Electric Distribution Companies, can be described as follows:  According to the privatization model, REDC not only has the rights for operation as the network operator of the electric power distribution, but also owns all assets;  REDCs are the natural monopolies in the sphere of electric power distribution in the regions of service therefore they are regulated by AREM, i.e. the distribution tariff is a regional one;  REDCs are not allowed to get profit by means of volume over the planned sales. After covering the approved capital or operational

12 "KEGOC" (2011) Annual Report november 2014 page 44

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expenditures by the planned volume of electric power sales, the profit received from the additional sales will be transferred either to the account of future collections, or to be transformed to the investments;  Rules of price formation on the controlled markets define the reasonable price as the price determined on the basis of the reasonable cost and profit for anentity of the controlled market. In our case ―an entity‖ in this definition could be the "distribution" company;  As the result of the above, the regulated distribution company is allowed to get reasonable profit only in structure of the authorized value. However, during the 3-year tariff period, additional profits are possible through capital expenditure after improvement of operational efficiency, in particular through gradual reduction of "accounting by heads" by means of the increased use of information technologies in this sector;  On March 1, 2013 the methodology of calculation of tariffs was entered. It is expected that so-called "a method of comparative indicators": o Will determine parameters of operational efficiency of REDC by means of the comparative analysis with other REDC; o Will establish the purposes for each REDC to increase the efficiency by taking into account the cost of the tariffs adjusted for certain parameters of efficiency in accordance with the current method; o Will take into account the tariff investment component including depreciation and profit.  Power supply companies operate on the free competitive market irrespective of "parent" REC that means that in the Kazakhstan sector of the electric power distribution there is a horizontal unbunding of prices, at least, from the theoretical point of view;  The wholesale market is based on bilateral contracts and the market of spot goods;  On the basis of bilateral contracts and results of the centralized trade, the System Operator prepares the preliminary schedule of the electric power distribution;  Wholesale market buyers are the companies-suppliers of the electric power which resell the electric energy to the retail buyers;  KOREM trade platform is the only part of the Kazakhstan wholesale market where the price is generated;  In 2009 for all companies-producers the "ceiling" tariffs were set. The companies-producers were divided into 13 groups, for each of these groups the "ceiling" tariffs were established. No payments are made to the companies-producers above this tariff. november 2014 page 45

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III POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

This Project should comply with the environmental requirements of RK and also the requirements of the financing organization, in this case ADB have to be observed in the Project.

8 National legislation in the field of environmental protection of the Republic of Kazakhstan, legal regulations and directives

The hierarchy of legal acts in the Republic of Kazakhstan corresponds to the following levels: • The Constitution of the Republic of Kazakhstan; • International agreements ratified by the Parliament; • The constitutional laws of the Republic of Kazakhstan, the Government resolution and decrees of the President of the Republic of Kazakhstan which have the force of the constitutional laws; • Codes and ordinary laws; and • Other regulations, normative decrees, etc.

Constitution of the Republic of Kazakhstan The Constitution of the Republic of Kazakhstan (adopted on August 30, 1995) states that land (surface and underground) belong to the State, but also can be privatized (Article 26.3). The state shall set as a purpose the environmental protection favorable for the life and health of the person. Officials shall bear responsibility for concealment of facts and circumstances threatening to the human life and health in accordance with the law (Article 31). Environmental legislation and regulations The comprehensive legislation establishing the legal framework of the Republic of Kazakhstan for environmental protection is briefly described below. In Kazakhstan the protection of nature is under authority of the Ministry of Environmental Protection, which was established by the Environmental Code of the Republic of Kazakhstan (The RK Law 212-III dated January 9, 2007). Adoption of the Environmental Code represents a combination of the majority of the existing nature protection regulations into one document to make the system of environmental standards more transparent and to make environmental information more available. The Environmental Code includes (i.e. the included and existing the most significant policies and practices established by the provisions) three basic november 2014 page 46

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environmental laws of the RK, which prevailed at that time (the Law on Environmental Protection, the Law on Ecological Expertise and the Law on Protection of the Atmosphere): • Law on Environmental Protection (the RK Law 160-1 dated January 15, 1997). Provisions of the Law on Environmental Protection are subsequently included into the structure of the Environmental Code (2007) which establishes the basic principles of environmental protection management, environmental information and its disclosure, environmental monitoring, ecological audit, ecological disaster, and control (survey) of environmental protection. In 2004 the Law was amended by including the provisions on waste management. In 2005 the Law was amended again by introducing the obligatory and voluntary ecological audits. • Law on Ecological Expertise(RK Law No. 85-1 dated March 18, 1997). The Law on Ecological Expertise as amended on December 20, 2004 is included subsequently into the Environmental Code (2007) which regulates the procedure for carrying out the ecological expertise, including the issues of financing, conclusions issued by the commission of experts, and also responsibilities for violation of the ecological expertise legislation. • Law on Protection of the Atmosphere(RK Law 302-11 dated March 11, 2002). The Law on Protection of Atmosphere defined the main conditions and principles of the state control of the air environment , determined the competences of government bodies, identified the rights and obligations of individuals and legal entities, and also established the main requirements forthe state control procedures with regard to hazardous sources of air pollution and air protection.

Table 8.1: The legislation and regulations on environmental assessment in the Republic of Kazakhstan and those applicable to operations of AEDC and CAEPCO (within the activity connected with AEDC) Title of law / regulation Date and number of registration Environmental Code of the Republic of 9 January 2007, № 212-p Kazakhstan Forest Code of the Republic of 8 July 2003, № 477-II Kazakhstan Land Code of the Republic of Kazakhstan 20 June 2003, № 442-II Water Code of the Republic of 9 July 2003, № 481-II Kazakhstan Law on Subsoil and Subsoil Use 24 June 2010, № 291-IV\ Law on Obligatory Environmental 13 December 2005, № 93 november 2014 page 47

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Title of law / regulation Date and number of registration Insurance Methodology for Determining the Approved by the Order of the Minister Normative of Emissions to the of Environment Protection, 19 April Environment 2012, № 110-p Instruction on Conducting Environmental Approved by the Order of the Minister Impact Assessment of Planned Economic of MEP, 28 June 2007, № 204-p Activity when Developing Pre-planning, Planning, Initial Project and Project Documentation The Amendments to the Order of the Approved by the Order of the Minister Minister of Environment Protection of of Environment Protection, 20 March the Republic of Kazakhstan on Approval 2008, № 62-p of ―Instruction on Conducting Environmental Impact Assessment of Planned Economic Activity when Developing Pre-planning, Planning, Initial Project and Project Documentation‖ Regulations on Conducting State Approved by Order of Minister of Ecological Expertise Environment Protection, 28 June 2007, № 207-p The Amendments to the Order of the Approved by the Order of the Minister Minister of Environment Protection of the of Environment Protection, 9 October Republic of Kazakhstan on Approval of 2007, № 296-p Regulations on Conducting State Ecological Expertise Rules for Conducting Public Hearings Approved by the Order of the Minister of Environment Protection, 7 May 2007, № 135-p Instructions for Qualifying Requirements Approved by the Order of the Minister to Licensed Activity on Environmental of Environment Protection, Design, Regulation and Development of 21 October 2003, № 239-p Environmental Impact Assessment Final Environmental Supervision Experts Approved by the Order of the Minister Opinion on Definite Types of Licensed of Environment Protection, Works and Services 1 July 2004, № 192-p The Rules for Licensing and Qualification Approved by the Order of the RK Requirements to Work Implementation Government, Ministry of Environment and Delivery of Services in the Field of Protection, Environmental Protection november 2014 page 48

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Title of law / regulation Date and number of registration 5 June 2007, №457-p The normative base of requiring an Instruction on conducting environmental impact assessment environmental impact assessment of planned economic activity when developing pre-planning, planning, initial project and project documentation, approved by the Order of the Minister of Environment Protection, 28 June 2007, № 207-p RK Law On Amendments and Additions 9 January 2007, № 213-p to Some Legislative Acts of Kazakhstan on Environmental Issues RK Law On Ratification of the Rotterdam 20 March 2007, № 239-p Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade RK Law On Ratification of the Stockholm 7 June 2007, № 259-p Convention on Persistent Organic Pollutants RK Government Regulation on Approval 7 May 2012, № 584 of Rules on Issuing the Quotas on GHG Emission RK Government Regulation on Approval 11 February 2008, № 128 of Rules of Limitation, Suspension of Reduction of GHG Emissions RK Government Regulation on Approval 13 December 2007, № 5094 of Rules of GHG and Ozone-destructive Substance Emissions Inventory Development RK Government Regulation on Approval 13 December 2007, № 5087 of Rules of Standards of Maximum Permissible GHG Emissions and Ozone Destructive Substance Use Order on Approval of Waste Classifier Approved by Minister of Environment Protection, 31 May 2007, № 169-p Order on Approval of a Hazardous Waste Approved by Minister of Environment Descriptor Form Protection, 7 June 2007, № 259-p Order on Approval of Rules of Inclusion Approved by Minister of Environment of Nature Management Conditions into november 2014 page 49

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Title of law / regulation Date and number of registration Emissions Permits Protection, 16 April 2007, № 112-p Order on Approval of Document Forms Approved by Minister of Environment of Environmental Emissions Permits and Protection, 30 March 2007, № 94-p the Rules of Form Completing Order on Approval of Reporting Approved by Minister of Environment Requirements of the Results of Protection, 14 February 2013, № 16-p Production Ecological Monitoring Order on Approval of Typical List of Approved by Minister of Environment Measures on Protection of Environment Protection, 12 June 2013, № 162-p

Environmental impact assessment Environmental protection is under authority of Committee of ecological regulation, control and the state inspection in the oil and gas complex of the Ministry of Energy of the Republic of Kazakhstan. The Environmental Code was adopted on January 9, 2007 and is the main legislative base of nature protection activity. The last edition of the Environmental Code of the RK was adopted by the Law RK and dated July 2, 2014. According to article 36 of the Environmental Code the development of EIA is mandatory for all types of operations which could make a direct or indirect impact on environment or human health. The system of licensing is a component of the Environmental Code. Procedures provide that projects are ecologically safe at three levels: Committee of Ecological Expertise (CEE); Department of Ecology of Astana (DE) and the Project Initiator. CEE is located in the capital and has the right of the first and final opinions regarding to all EIA reports at the national level. After the approval of the Terms of Reference (ToR) and selection of the licensed expert- consultant for the environmental assessment (EA), it is started the preparation of a preliminary environmentalimpact assessment (PreEIA) (in other words it is a theoretical research of scope of work) in parallel with development of justification by equipment of feasibility of the project begins. DE of Astana considers PreEIA and provides written remarks to CEA. If necessary, experts within Administration of Agriculture, Committee for water resources, Committee for forest and hunting management of RK, Ministry of Health and Sanitary and epidemiological service are invited to participate in the work. Available documentation indicates that this is seldom required. CEA receives remarks and recommendations, considers/edits them, and november 2014 page 50

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preparation of EIA is approved. After review and approval of the EIA, it is sent to the Executive Agency (EA) for execution. The agency initiator is the third level. As the initiator of the offered execution, AEDC bears responsibility for carrying out environmental protection measures and ensuring compliance with EIA provisions prior to and at the stage of detailed development of the project, and as well for coordination of the subsequent required environmental protection measures. The consultant who develops PreEIA usually is engaged in preparation of the report of EIA and proceeds to a detailed analysis with a focus on field works and collecting primary data, with exact compliance with standards and codes of the Republic of Kazakhstan. The primary focus of EIA is given to the preparation of a comprehensive plan on monitoring of environment and actions for elimination of consequences (ESAP). The term of the state environmental assessment shall not exceed two months for objects of category I and one month for objects of II, III and IV categories after the date of transmission of all necessary documentation which had preliminary expert examination to the bodies involved in the state environmental assessment. The term of the repeated state environmental assessment for objects of the I category shouldn't exceed one month, for objects of II, III and IV categories shouldn't exceed ten working days from the date of registration. During this period public hearings are held, the announcement is placed in the regional newspaper. After completion EIA is reconsidered and then the final version of the document is created and the certificate allowing the initiator to start the following stage of the project is issued. Projects in Kazakhstan are classified by the Sanitary and Epidemiological Services of Ministry of Health (SES MH) according to five danger levels with one being the highest as defined by norms and standards developed in relation to human health and safety. The sensitivity of project is measured by the SES MH Danger/Sanitary Categories. The categories are: • Danger/Sanitary Categories 1 & 2 projects have levels of severity/danger that trigger a full EIA; • Danger/Sanitary Category 3 projects are considered to have lower levels of severity/danger and as such, a lesser assessment is undertaken, although still referred to as an Environmental Assessment; • Danger/Sanitary Category 4 & 5 projects are considered to present considerably lower risks of severity/danger and generally do not warrant an assessment beyond the initial screening. The SES MH Danger/Sanitary Categories relate to four categories of Environmental Impact Assessment. Categorization largely follows the november 2014 page 51

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sanitary classification of industrial activities established by the Ministry of Health Care under the 2005 ministerial order ―On sanitary-and- epidemiological rules and norms‖. The EIA Categories are:

• Category I- Danger/Sanitary Categories 1 and 2 plus investigations and extractions of minerals, except for common minerals. Risks are ―high‖ and approval by Ministry of Environmental Protection is required. A Category 1 EIA is obligatory for large scale projects; • Category II - Danger/Sanitary Category 3 plus extractions of ubiquitous minerals, forestry activities and special water use. Risks are ranked as ―medium high‖ and approval is required from territorial government representative units. • Category III - Danger/Sanitary Category 4 Risks are ranked as ―low‖ and approval is required from territorial government representative units. • Category IV - Danger/Sanitary Category 5 plus projects involving animals, except recreational fishing and hunting. Risks are ranked as ―low‖ and approval is required from local administrations. The main objective of the EIA is to determine all likely environmental and social impacts associated with the proposed economic activity, and to make recommendations on how to avoid environmental degradation and other adverse impacts. In the context of energy sector projects (including energy transmission through aerial lines), the EIA is required to incorporate information and assess impacts on air, water, soil, underground, flora, fauna, socio-economic environment, etc. According to Article 36 of the Environmental Code the ―Development of an Environmental Impact Assessment is obligatory for all types of activities that can have a direct or indirect impact on the environment or health of the people‖.

Permit process The Environmental Code (2007) provides two types of permits: • Emissions Permits. The emissions permit gives the right to individuals and legal entities to make emissions within the specified limits. The complex ecological permit has stiffer requirements for environmental protection than was previously the case, particularly, regarding the disposal of wastes, and requires that advanced technologies be used in order to minimize adverse impacts. • Ecological Permit. The terms of ecological permits are different for each category of environmentally hazardous activity. Generally, the standard term is three years and for less hazardous activities it is five. The application procedure for the ecological permit is less difficult to secure if environmental november 2014 page 52

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damage arising from the activities is minimal. Ecological permits may be revoked or suspended if the permit holder has been in breach or default of the statutory environmental requirements, the terms set forth in the specific permit or contract in relation to using natural resources, or if the environmental damage is significant. Legal entities holding ecological permits must apply for re-issuance of their permits if they have changed their profile or the way in which they are organized, or have adopted technologies in order to minimize damage to the environment, or if the system for the usage of natural resources has changed. The Environmental Code allows RK to establish limits or annual quotas for emissions. The contractor must obtain a clearance permit to carry out any work where environmental effects are likely, such as tree removal, vegetation clearing, removal of soils, culvert replacement, deviation of natural water ways, etc. These permits can only be issued once the contractor has prepared an environmental work plan or Construction Environmental Action Plan (hereinafter CEAP) showing how the mitigation and monitoring actions will be implemented. The preparation of the CEAP requires a licensed person or company, thus the contractor must retain expertise to do this work and must keep that person/company to oversee the operation throughout the contract period. Compliance monitoring is undertaken by the Inspection Unit of the Oblast Environment Department, which has enforcement and fining powers. Inspection occurs once per year and the contractor must receive at least a two-week notice prior to the inspection visit.

Social protection; Labour legislation; Provisions of the labour legislation The objective of the Labor Code of the Republic of Kazakhstan (№ 251-III dated May 15, 2007) consists in legal regulation of labor relations and other relations directly connected with labor and geared to protecting the rights and interests of the parties to the labor relations and establishing minimal guarantees of the rights and freedoms in the sphere of labor. The tasks of the labor legislation of the Republic of Kazakhstan consist in creating the requisite legal conditions for achieving a balance of the interests of the parties to the labor relations, economic growth, higher production efficiency and human welfare (Article 2). According to Article 4, the principles of the labor legislation of the Republic of Kazakhstan are as follows: inadmissibility of restrictions on human and civil rights in the sphere of labor; freedom of labor; prohibition of discrimination, forced labor and the worst forms of child labor; guaranteed right to working conditions meeting the safety and hygiene november 2014 page 53

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requirements; priority of the life and health of the employee over the results of production activities; guaranteed right to a fair remuneration for labor not below the minimum wage; guaranteed right to rest; equality of the rights and opportunities of employees; guaranteed right of association of employees and of employers for the purpose of protecting their rights and interests; social partnership; state regulation of labor protection and labor safety; guaranteed right of employees’ representatives to exercise public control over observance of the labor legislation of RK. Labor Code specifies rights and obligation of state authorities at different levels in terms of labor relation regulation, basic rights and responsibilities of employee and employer, issues related to employment contracts (including content and term of the contract; documents required for concluding an employment contract; probationary period; procedures for conclusion, amendment, supplementation, termination, cancellation of the employment contract; transfer of the employee; change of working conditions; procedures related to work books and documents associated with labor activities, etc.), protection of worker’s personal data, internal labor regulations and labor discipline, work time (including regulations for part- time work, shift work, night works, overtime), leisure time (including regulations for rest and meal breaks; shift and special breaks, days off, holidays and leave). Normal duration of the working time shall not exceed 40 hours a week (Article 77). A five-day working week with two days off is established for employees. In organizations where the nature of the production and the working conditions make introduction of a five-day working week unfeasible, a six-day working week shall be established with one day off (Article 81). Shift work may be established in cases when the duration of the employer’s production process or production activity mode exceed the standard duration of the working day. Under shift work, the duration of the work shift and transition from one shift to another shall be established by shift timetables approved by the employer on agreement employees’ representatives. It is prohibited for an employee to be engaged to work on two consecutive shifts (Article 84). The duration of a daily (inter-shift) rest period of the employee between the end of work and its start on the next day (work shift) shall be at least twelve hours (Article 95). Employees shall be granted the following types of leave: (1) annual paid leave; (2) social leave. Paid annual leave is intended for the employee to rest, restore his working capacity, strengthen his health and fulfill other personal requirements and is granted for a specific number of calendar days with retention of the employee’s job (position) and average wage. november 2014 page 54

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Employees shall be granted an annual paid leave of twenty-four calendar days, unless a greater number of days in envisaged by other regulatory and legal acts, the employment contract, collective bargaining agreement or acts of the employer (Articles 100, 101). The social leave is understood as a release of the employee from work for a specific period of time for the purpose of creating favorable conditions for maternity, childcare, education while working and for other social purposes. Employees are granted the following types of social leave: (1) unpaid leave; (2) study leave; (3) maternity leave and leave for adoption of a newborn (or newborns) (Article 100). On agreement between the parties to the employment contract and on the basis of an application from the employee, he may be granted unpaid leave. On the basis of a written application from the employee, the employer shall provide unpaid leave of up to five calendar days for: (1) registration of marriage; (2) birth of a child; (3) death of a close relative; (4) in other cases envisaged by the employment contract or collective bargaining agreement (Article 111). Employees studying at educational institutions shall be granted study leave for preparing for and taking tests and examinations, carrying out laboratory work, preparing and defending diploma work (project). Payment for study leave shall be determined by the employment contract, the collective bargaining agreement, and the study agreement (Article 112). Pregnant women, women who have given birth, women (men) who have adopted a newborn shall be granted the following types of maternity leave: (1) ante-natal and post-natal leave (seventy calendar days ante-natal and fifty six calendar days post-natal paid maternity leave); (2) paid leave to employees adopting a newborn (from the date of adoption until expiry of fifty six days from the birth date of the child); (3) unpaid childcare leave until the child reaches the age of three years (Articles 113, 193, 194, 195). Chapter 11 of the Code addresses occupational training, re-training and further training related issues. Social partnership in the Republic of Kazakhstan is designed to fulfill the following tasks: (1) creation of an effective mechanism for regulating social, labor and associated economic relations; (2) promotion of social stability and social consensus on the basis of objective consideration of the interests of all strata of society; (3) promotion of guarantees of the rights of employees in the sphere of labor; their social security; (4) promotion of the process of consultations and negotiations between the parties to the social partnership at all levels; (5) promotion of resolution of collective labor disputes; (6) development of proposals for implementing state policy in the sphere of socio- labor relations (Article 258). Social partnership shall be november 2014 page 55

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ensured in the form of interaction between the parties through social partnership bodies at the republican level, branch level, regional (region, city, district) level, as well as at the level of organizations in form of agreements or of collective bargaining agreements establishing specific mutual obligations in the sphere of labor between employees’ representatives and the employer (Article 260). The principles for holding collective bargaining negotiations are: equality and respect for the interests of the parties; freedom of choice in discussing the matters constituting the content of the collective agreement or other agreement; voluntary assumption of obligations by the parties; abidance by the labor legislation of the Republic of Kazakhstan (Article 281). The law specifies procedure for holding collective bargaining negotiations, elaborating and concluding collective bargaining agreements; content and structure of the collective bargaining agreement; terms and sphere of operation of the collective bargaining agreement; liability of the parties, consideration of collective labor disputes, etc. Labor Code provides detailed consideration of labor protection and labor safety issues. In particular, to ensure labor protection and labor safety the employer shall: undertake measures to preclude any risks in the work place by means of prevention, replacement of equipment and technological processes with safer ones; provide employees with training and instruction in labor protection and labor safety; undertake organizational and technical labor protection and labor safety measures; provide instruction and documents on safe performance of the work; undergo verification of knowledge of labor protection and labor safety and organize testing of managers and experts in accordance with the rules approved by the state labor authority; create necessary sanitary and hygiene conditions for employees, provide for repairs to special clothing and footwear of employees, supply them with means of protective treatment, washing and disinfectant, a first aid kit, milk, therapeutic and healthy meals in accordance with the standards established by the state labor authority; provide the state labor authority and other relevant entities with the necessary information on the state of working conditions, labor protection and safety; fulfill the directives of the state labor inspectors; register, record and analyze industrial accidents and cases of occupational disease; with the participation of employees’ representatives, perform periodical, at least once every 5 years, certification of production facilities with respect to working conditions, as well as mandatory certification after renovation, modernization, installation of new equipment or technologies; insure liability for harm caused to the health and life of the employee in performance november 2014 page 56

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thereby of his job duties; provide safe working conditions; carry out, at its own expense, periodical (during employees’ working lives) medical examination and pre-shift medical certification of employees in cases envisaged by RK legislation; take urgent measures to prevent development of emergency situations and the impact factors capable of causing injury to other persons (Article 317). Obligations of the employee in the sphere of labor protection and labor safety include: provision of immediate notification to superior regarding any accident occurring at work, any signs of occupational disease (poisoning), or any situation jeopardizing human life and health; mandatory periodical medical examinations and pre-shift medical certification, as well as medical certification for transfer to other work for production purposes or in the event of signs of occupational disease; application and use for their designated purpose means of personal and collective protection provided by the employer; carrying out therapeutic and health restoration measures prescribed by medical institutions if financed by the employer; preservation of the requirements of the standards, rules and instructions on labor protection and labor safety, as well as the employer’s requirements on safe performance of work at the work place (Article 315).

Land Use Legislation and Regulations The Land Code of the Republic of Kazakhstan (RK Code № 442-II of 20 June 2003) establishes the foundations, conditions and limits for modifying or terminating ownership of land and land-use rights, describes the rights and responsibilities of landowners and land users, and regulates land relations. It also establishes conditions for granting to citizens and legal entities temporary or permanent use rights to State-owned land (Article 35)). The Code does not permit alienation of land ownership and land use rights without the consent of the owner/land-user, except for alienation for state needs (Article 81.2.2). A land plot can be alienated for state needs by way of purchase or by granting an equivalent plot with the consent of the owner or land user, or by decision of the court (Article 84.1). Construction of the power transmission lines and infrastructure for communities is one of several grounds for compulsory acquisition of a land plot for state needs (Article 84.2.4). Leaseholders of State-owned lands are compensated in full for the losses and, at their request, may be granted an alternative plot subject to availability of suitable land (Article 84.4). The owner of the land or land user must be notified in writing by the body that made the decision to purchase at least one year prior to november 2014 page 57

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acquisition, unless the owner or land user agrees to release the land before (Article 85.2). If the remaining portion of the land can no longer be used for the intended purpose, then the entire plot must be purchased (Article 86.2). If the owner or land user disagrees with the decision to purchase his land for state needs, or disagrees on the price of the acquired land or other terms of acquisition, the local executive authority, which decided on acquisition, may file expropriation case (Article 88). Upon termination of land ownership or land use right the cost of land or land-use right is defined by the amount paid to the state (Article 96.1). Upon termination of land ownership or land use right the value of the land granted for individual housing construction, for individual part-time farm (except field plots) on which an individual house is located, is defined by the cost of the land, not exceeding market cost (Article 96.2 as well as Article 67.2 of the RK law on state property). Upon termination of land ownership right the cost of the land, passed to the owner or user by a contract or court decision is defined by the value specified in a contract or a court decision, but not exceeding the market cost. In case the land cost is not specified in the contract or the court decision, the value of the land is assessed by its cadastre (estimated) cost (Article 96.3). The Land Code provides for base rates of payment for the land plots and the cadastral value of land in order to determine the cost of the land. Basic rates of payment for the land plots when they are transferred to private property in the capital are established by joint decisions of the representative and executive bodies of the capital, depending on local conditions and peculiarities. The rates of payment for land use shall not be established at a level below the land tax rates. Payment for selling the right to lease is differentiated from the cadastral (estimated) cost of a particular plot of land. Base rate of payment for land plots is calculated in accordance with the Decree of the RK Government dated 2 September 2003 № 890 "On establishment of base rates for the land plots". Cadastral (estimated) cost of a land plot is determined by specialized state-owned enterprises responsible for operation of the state land cadastre, in accordance with the base rates of payment for land plots transferred to private property, with application of corrective (increasing or decreasing) coefficients to account for inflation, land conditions and location. In determining the amount of compensation, following shall be included: (a) the cost of land or land-use rights; (b) the market cost of the assets located on the plot, including fruit trees and perennial plantings; (c) cost of the expenditures associated with development of the land, its operation, implementation of protective measures, improvement of soil november 2014 page 58

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fertility taking into consideration their inflation; (d) all losses inflicted on the owner or land user as a result of land acquisition at the time of termination of ownership or land-use right, including losses they incur due to early termination of their obligations to third parties; and (e) loss of revenue (Article 166.2). The amount of compensation is established based on the agreement among the parties (Article166.3). In case of disagreement, the land cannot be taken until the court adjudicates a settlement (Article 166.7). The Land Code does not entitle encroachers to compensation for the right to use the lands they use informally (squatters) or those who have not registered their claims to lands. The Law on State Propertyof the Republic of Kazakhstan (№ 413- IV LRK dated 1 March 2011) states that in case of compulsory acquisition of land or other real property for state needs, the government agency or local executive body should issue a decree that indicates:

 the purpose and grounds for compulsory acquisition for state needs;  the location, size, cadastre number of land plot;  the property owner or private land user;  the date of compulsory acquisition, but not earlier than three months from the date of official publication of the decree;  place of application for land owner or land user for conciliation procedures.

The Decree shall be published in national or local mass-media, within three working days from the date of adoption. In case the right of private ownership of land plot is not registered in accordance with the legislation of the Republic of Kazakhstan, the owner, after the adoption of the decree, may make the necessary arrangements to register his/her right on the affected land plot. The period of compulsory acquisition for state needs set by the decree cannot be extended by more than six months (Article 63). The acquiring authority is required to send to the owner or land user a written notification on the compulsory acquisition for state needs not later than 3 calendar days after the publication of the decree. The notification shall also include the draft purchase agreement for the land plot or other real property in connection with the seizure of land plot for the state needs. The notification shall be sent by mail with the mandatory notice of receipt (Article 64.1). The compulsory acquisition of the land plot or other real property in connection with the seizure of land plot for state needs is carried out november 2014 page 59

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after the expiry of the deadline set in the Decree, either with the consent of the land owner or land user, or by court decision. Termination of the rights to private property and land use rights, as well as the State's right to land and other real property is subject to state registration by the authority responsible for state registration of rights to real property, the purchase agreement for land plot or other real property, or a court decision and the statement of the authority that adopted the Decree. A local executive authority shall submit to the relevant local representative authority the draft purchase agreement for the land or other real property within two months after receipt of notification by the landowner or land user about the acquisition of the land plot or other real property. The draft agreement is considered by the standing commission of the local representative authority not later than two weeks from the date of its submission to the mandatory invitation of the owner and people whose rights in respect of alienated property will be terminated or limited. Upon reaching an agreement with the owner or land user of acquired property and other people whose rights in respect to the acquired property will be terminated or limited, the purchase agreement for the land or other real property is approved by the executive authority in accordance with the local representative authority and is signed by the owner or land user (Article 65). The contract for the purchase of a land plot or other real estate in connection with the seizure of land plot for the state needs, shall include: (1) the price of the land plot to be alienated and characteristics of the real estate or land plot to be transferred to the owner or land user as a substitute for the alienated one, 2) the difference in value if the price of the alienated land plot is higher than the price (value) of land provided as a replacement for the alienated one, (3) the amount of damages to be compensated, including the value of real property received due to alienation of the land plot for state needs, if such damages caused as a result of the forced alienation; (4) the term of payment for the cost of alienated land or other real estate due to alienation of the land plot for public use or transfer of the land plot (or other property) transmitted to the owner as a substitute for the alienated land plot for stateneeds; (6) a list of persons whose rights in relation to the alienated property will be terminated or limited; (7) the procedure for financing the public expenditure on the acquisition of property for state needs. The actual transfer of the land plot or other real property alienated for state needs can take place only after the land owner or land user receives a fair compensation (Article 65). november 2014 page 60

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The cost of the land plot alienated for state needs provided for individual housing construction or private farming (except the field plots), on which an individual house is located, shall be determined by the cost of the land plot not exceeding its market cost (Article 67.2 and Article 96 of the Land Code of the Republic of Kazakhstan). The cost of real estate located on the land plot is determined in an amount not exceeding the market value. The market value of the land plot or other immovable property shall be determined by an independent appraiser at the time when the land owner or land user receives a notice of the forced alienation of the land for state needs (Article 67.3).In agreement with the landowner or land user, the land plot alienated for state needs can be replaced by another land plot, by offsetting the cost of provided land plot or the rights to it in the cost of the alienated land plot or the rights to it, according to cadaster (estimated) value (Article 67.6).Compensation of the cost of the land plot or other immovable property due to alienation of the land plot for the state needs and losses shall be made in full, before the transfer of ownership right for such property to the Republic of Kazakhstan or to the administrative- territorial unit (Article 68.1).Compensation shall be made from the budget (Article 68.2). Non-cash compensation is allowed under the agreement between the Republic of Kazakhstan represented by the Government of the Republic of Kazakhstan or an administrative unit represented by the local executive authorities and the owner of the property. Law of the Republic of Kazakhstan on Housing Relations (№94-I of April, 16, 1997) regulates the provision of housing for the ownership during the demolition of a residential building due to the involuntary acquisition of the land for the state needs. In case of demolition of a residential building in the result of involuntary acquisition of the land plotfor the state needs, the owner of the house before the demolition, in accordance with his/her preferences is offered a well-equipped place of residence as a property or compensation at a price equal to the market value of the house taken.If the cost of the proposed house is higher than the cost of a propertyto bedemolition, the difference in value will not be paid to the owner. If the value of the house to bedemolishedis higher than the cost of the proposed place of residence as a substitute for, the owner will receive the compensation in the amount of the price difference (Article 15). Other legislative acts (including codes, laws, government regulations, orders of the Minister, instructions, standards, etc.) addressing the labor, health and safety issues has been enacted. Basic laws and regulations applicable to the AEDC operations are given in Table 8.2. november 2014 page 61

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Table 8.2: Legislation and regulations on the labor, health and safety issues applicable to AEDC and CAEPCO operations (within its activities related to AEDC) Registration date and Law/Regulation number RK Law "On sanitary-Epidemiological December, 4, 2002, №361 Wellbeing of Population" RK Law "On Public Health and Health September, 18,2009, №193-IV Care System" RK Law "On Industrial Safety at April, 3, 2002, №314 Hazardous Production Facilities"

RK Law "On Safety of Chemical July, 21, 2007, №302 Products" Administrative Directive on Rules for 2002, №34 RK.20.501-02 Technical Operations of Power Plants State Standard for Occupational 1991, №12.02.003-91 Safety Standards. General Safety Requirements.

Some other laws that are not directly related to environmental and social issues of land use, but related to the project are listed below:  Law of the Republic of Kazakhstan on Natural Monopolies and Regulated Markets (№ 272-I dated June, 9, 1998, as amended on July 17, 2009);  Law of the Republic of Kazakhstan On Joint Stock Companies (№ 415-II, dated May, 13, 2003, as amended on February 13, 2009);  Law of the Republic of Kazakhstan On Electric Power Industry (№ 588-II dated July, 9, 2004, as amended on July, 17, 2009);  Law of the Republic of Kazakhstan on Energy Saving (№ 210-I of December, 25, 1997 as amended on, July 4, 2009)  Rules of organization and functioning of the retail electricity market, provision of the services in this market (approved by Government Decree №932 of July, 12,2012);  Rules for differentiation of tariffs for electricity supply companies in accordance with the time zones and (or) depending on the consumption volume of individuals (approved by Order of the Chairman of the Agency for Regulation of Natural Monopolies №57-OD dated February, 20, 200);  Rules for procurement by entities of natural monopolies for purchase of goods, works and services, the costs for which are taken into november 2014 page 62

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account when approving the tariffs (prices, rates) or their threshold levels and tariff estimates for regulated services (approved by order of the President of the Agency on regulation of natural monopolies № 149-OD dated June, 6, 2003).

International standards In accordance with the Law of the Republic of Kazakhstan on Technical Regulation (№ 603-II dated November 9, 2004, as amended and supplemented on July 10, 2012), the Committee for Technical Regulation and Metrology of the Ministry of Industry and New Technologies of the Republic of Kazakhstan is an authorized body carrying out the state control for safety of goods on the stage of its realization to ensure safety of goods, processes for human life and health and the environmental protection, including flora and fauna, as well as to prevent the consumer fraud on the safety and quality of products and processes. The subjects of the state control of the observance of the requirements established by the technical regulations are the products and processes with the application of technical regulations. The state control of the observance of the requirements established by the technical regulations and regulations in the field of technical regulation and uniformity of measurements is performed to audit the legal entities and individuals, including foreign organizations on the territory of the Republic of Kazakhstan. Article 24 specifies that at the territory of the Republic of Kazakhstan may be applied the international and regional standards and standardization rules of foreign states, regional standards of technical, economic, information, rules, guidelines and recommendations, as well as the standards of foreign countries and organizations (which meet the purposes of this Act (Law)). This article also states that the conditions necessary for application of international and regional standards and foreign standards as the national standards are the following:  Membership of the Republic of Kazakhstan in the international and regional organizations for standardization, metrology and accreditation;  International treaties of the Republic of Kazakhstan on cooperation in the field of standardization;  Existence of the agreement between the authorized body for standardization and international or regional organizations on cooperation in the field of standardization.

International, regional standards and foreign standards to be applied in the territory of the Republic of Kazakhstan shall not contradict to the requirements established by technical regulations in force in Kazakhstan, november 2014 page 63

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and shall be harmonized with the standards on quality indicators not lower than the national standards and should be agreed with the relevant public authorities (Article 24). Since 2001, the Republic of Kazakhstan has intensified the activities of enterprises and organizations in connection with the development and introduction of modern management systems. It were issued the Orders of the Prime Minister №28-r dated February,6, 2004 and № 175-r dated June, 27, 2006 on accelerated transition of local enterprises to the international standards.In the country were established the relevant standards for the implementation of international standards of management and compliance of the necessary infrastructure, regulatory and methodological framework. As the state standards of Kazakhstan the following international management systems of International Organization for Standardizationwere adopted: ISO 9000, environmental standards ISO 14000 series, standards for occupational health and safety OHSAS 18001, standards for social responsibility SA 8000, standards of food safety management system ISO 22000, quality management system audit and environmental management - ISO 19011 and others. In addition to these 15 methodological guidelines it were developed 15 guidelines to assist the entities in the introduction of management systems. As of 2012 Kazakhstan continues its membership in the International Organization for Standardization and is a participating member of 16 technical committees and a observingmember of 13 technical committees. AEDCenterprises received the certificatesfor compliance with ISO 9001 (Quality Management System), ISO 14000 (Environmental Management System), ISO 18000 (Occupational Health and Safety).

9Environmental policyand guidelinesof the AsianDevelopment Bank (ADB)

All projects for transmission and/or distribution of electric power are also reviewed and evaluated for compliance with the Safeguard Requirements 1, 2, 3 of ADB Safeguard Policy Statements -2009 and ADB Social Protection Requirements. Policy and principles of the Asian Development Bank There are the following principles and standards of ADB's management of social and environmental risks and impacts: (i) Safeguard Policy Statement of ADB (2009) (ii) Policy of gender and development (1998) (iii) Social Protection Strategy (2001) november 2014 page 64

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(iv) Public Information Policy (2011)

Safeguard Policy Statement of ADB (SPS), 2009 г. SPSdefines the objectives of the policy and conditions, as well as the principles for the following three main areas of security:

(i) Environmental safety; (ii) Safety in the involuntary resettlement; and (iii) Safety of indigenous people.

Objectives and scope of the three main areas are briefly described below. Requirement 1for the Environmental Safeguard (SR1) ensures the environmental soundness and sustainability of the projects, and supports the integration of environmental considerations into decision-making process for the project. Requirements for the environmental safety are activated in the event that the project has the potential likelihood of risks occurrence and environmental impact. At the stage of design, construction and operation of the project, the borrower / customer must apply technologies and practices that meet internationally accepted standards set forth in the relevant international standards such as the Principles of the World Bank Group in respect of occupational environment, health and safety. Requirement 2to ensure securityin involuntary resettlement (SR2). SR2requiresavoidingorminimizinginvoluntary resettlementby exploring the projectanddesign alternativesin order toimproveor atleastrestore the income of alldisplaced peoplein real terms with regard to the preliminary levels of the project andimprovethe standards of living ofthe displacedpoor andsociallyvulnerable groups. Precautions in case of involuntary resettlementincludea physical displacement(loss ofresidentiallandorloss of shelter) andeconomic displacement(loss ofland,assets, access to the assets, income sources ormeans of livelihood) as a result of(i)involuntary restrictions on land useoran access tolegallydesignated parksor protectedareas.These measurescoversuch lossesand involuntary restrictions, regardless of whetherthey arefull or partial, permanent or temporary. Requirement 3to ensure the security for the Indigenouspeople. SR3requires thatthe design andimplementation of projects were carried out

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in sucha way as togive special attention toindigenous people13, namely their identity, dignity, human rights, livelihood systems, andcultural uniquenessas definedbyindigenous peoplethemselves, so thatthey(i) receiveculturally appropriate compensation, social and economic benefits,(ii) do not suffer adverse impacts as a result of the project, and (iii) can participate activelyin projects thataffect them. SR3appliesif theprojectdirectlyor indirectlyimpacts on thedignity, rights, livelihood systemsandon the culture ofindigenous peopleorimpact on the territory, the natural and cultural resources, which the indigenous people own, useandoccupy or state as it their ancestralterritory or assets.

ADB's Policy on Gender Identity and Development (PGID), 1998 ADB Policy on PGID puts forward the achievement of gender equality. In relation to the projects the PGID policy:  Carrying out the gender analysis: the systematic evaluation of the project impact on men and women, as well as economic and social relations between them;  Carrying out the gender planning: formulation of specific strategies, the aim of which to create the equal opportunities for men and women;  Create a strategy to achieve the gender equality: examination of issues of gender identity in all aspects of ADB, together with attempts to encourage women to participate in decision-making on the development of measures. This policy will determine the issues of gender identity, as well as take into account the needs and concerns of women.In particular, AEDC and CAEPCO (within the operations related to AEDC) will provide the following: (i) inclusion of gender analysis into the assessment of the social and environmental impact, (ii) participation of women in the consultations, (iii) development of measures to reduce the impact on women, and (iv) the development of opportunities to help women. Social Protection Strategy, ADB, 2001. ADB’s Social Protection Strategy 2001, requires from the Borrower to

13The term "indigenous people" is used general meaning to indicate a separate vulnerable, social and cultural group having the following characteristics in varying degrees: (I) self-identification as members of a distinct indigenous cultural group and recognition of the identity by others; (II) a collective belonging to geographically different customs or ancestral territories in the project area and to the natural sources of these customs and territories; (III) the existence of cultural, economic, social or political institutions that are separate from the dominant society and culture, and (IV) the presence of a particular language, often different form from the official language of the country or region. In considering these characteristics, the national legislation, the customary law and any international conventions to which the country participates should be taken into account. november 2014 page 66

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comply with all labor laws in relation to the project, and to take measures to comply with the core labor standards. Core labor standards include four basic rights and principles of the international level at work: (i) freedom of labour unionization and full recognition of the right to negotiate a collective agreement; (ii) elimination of all forms of forced labor; (iii) effective abolition of child labor; and (iv) non-discrimination with regard to employment and occupation.

AEDC and CAEPCO (within the operations related to AEDC), as well as contractors and subcontractors, if possible, will use the local labor force, and in addition will take all measures to meet the Requirements for ADB’s Social Security (Appendix 2); Public Information Policy, ADB, 2011 ADB’s Public Information Policy recognizes that transparency and accountability are important elements of effective development. The purpose of this policy is to strengthen the confidence of stakeholders in the ADB and the ability to work with ADB. This policy recognizes the right of people to seek, receive and distribute the information about ADB operation. It supports the exchange of knowledge and provides the development with public participation, or bilateral communication with the people, which are under the impact. This policy is based on the presumption in favor of the information disclosure, only when there is no valid reason for non-disclosure. It forces the ADB to disclose the organizational and financial information related to the project, as a precaution on the ADB website, observing strict time constraints, and also provides a mechanism for resolving issues and complaints. To determine the specific environmental and social requirements will be used the categorization below: Category A: Environment –The project has the potential significant adverse social and environmental impacts, which can be varied, irreversible or unprecedented. These impacts may affect the territory more than the construction site or facilities subject to physical works. Involuntary resettlement–It is recognized, that the project has a significant impact on involuntary resettlement in the event that 200 or more people will experience a serious impact, which is defined as (1) a physical eviction from their homes, or (2) loss of 10% or more of productive assets (income november 2014 page 67

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generation). Indigenous people–Project will significantly affect the traditional rights of using and access to land and natural resources, socio-economic status, cultural and community integrity, health, education, livelihood systems and social welfare state, as well as on the local knowledge of indigenous communities. Category B: Environment –The project has limited potential adverse social or environmental impacts, which in some cases tend to occur in specific areas, mostly reversible, usually evident at the time of evaluation and easily can be reduced with certain measures that require limited or targeted environmental and / or social assessment, or direct application of good environmental choice of the site, pollution standards, design criteria, or building standards. Involuntary resettlement –Project has a limited involuntary impact on involuntary resettlement, if less than 200 people will experience a serious impact, which is defined as (1) a physical eviction from their homes, or (2) loss of 10% or more of productive assets (income). Indigenous people–Project has no impact on the indigenous population. Category C: Environment –The project has minimal or has no environmental or social impact that is not a subject of the further evaluation (because of their identification as such) with the exception of the requirements for certification / provision of information to clients on compliance / non- compliance with local and national laws and environmental, health, safety, and labor regulations. Involuntary resettlement–Project does not require allocation of a land plot, which may have some impact on forced resettlement. Indigenous people– Project has no impact on the indigenous population. The project belongs to the category B in respect of the environmental impact and to category C in respect of the impact on involuntary resettlement and / or indigenous population. The Project "Reconstruction of 110/10 kV "Astana" Substation‖does not fall under the list of investment activities prohibited by the ADB (Appendix 3). The Project is classified as category B in accordance with the november 2014 page 68

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provisions of the Safeguard Policy Statement in respect of security measures ADB (July 2009). ADB uses a classification system to reflect the significance of the potential impact of project activities on the environment. Category of the project is determined in accordance with the category of its most environmentally sensitive component, including the direct, indirect, cumulative, and induced impacts in the zone of the project impact. This Project belongs to the category B due to the fact, that it has limited potential adverse social or environmental impacts than the projects of category A. Such impacts are called as the specific for anobject, only some of them, if any, are irreversible, and in most cases the measures to mitigate the consequences can be taken faster than for the project categories. In accordance with the ADB requirements, the PEIA report considers the potential negative and positive impacts of the project on the environment and recommends the measures needed to prevent, minimize, mitigate, or compensate the adverse impact and improve the environmental performance. This PEIA also includes a Plan for Environmental Management with a detailed description of the mitigation measures. PEIAreport will be submitted to AEDCand CAEPCO (within activities related to AEDC) and will serve as a reference document for the approval by the Asian Development Bank in the field of environmental protection. The project initiator (AEDC) will provide a draft PEIA to the Kazakhstan public with an access to project-affected groups and local NGOs on AEDC site. After PEIAreport is disclosed locally and officially handed over to the ADB, the project is subject to a 120-day disclosure on the ADB website / CAEPCO, before its adoption.

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IV ENVIRONMENT DESCRIPTION

10Aspects of the environment, health and safety of existing production facilities (AEDC)

Currently the Environmental and Social Management System acts in AEDC. Some units of AEDC (e.g., Department of Public Relations, Occupational Safety and Health Department, Human Resources Department, etc.) cover some of the environmental and social issues. Environmental analysis, impact and risk assessment, identification and reduction of negative impacts, environmental monitoring is carried out by third parties under contract with AEDC, in accordance with the legislation of the Republic of Kazakhstan (in most cases, the project consultants hired by AEDC are the subcontracted environmental entities that deal with IEE development). Specialized environmental entities have all appropriate licenses required by local laws and operate in accordance with their requirements. The important fact is that all the activities that are carried out within the framework of the proposed investment project are scheduled to perform in relation to the existing production facility. It means that its environmental impact will be minimized. Currently it is planned to replace the transformers in Astana. After replacement of the existing transformers by the new, as AEDCmanagement considers, that the former equipment will be used in another substation. The entire set of activities will be carried out within the existing infrastructure on the territory of the existing substation in Astana. The potential environmental impact assessment is carried out within the framework of PEIA. This assessment covers the design stage and putting the equipment into operation. This work could have the risks associated with the health and safety violations. However, all the potential consequences will be minimized by proper application of new principles in the planning and operation of the equipment. In the event that the planned activities have a negative impact on private property (trees and crops), the compensation measures will be implemented prior to the start of work. The proposed project eliminates the negative impact on the environment. In order to implement the investment program, the planned activities will be classified, demonstrated, evaluated and implemented in accordance with ADB's Directive on safety precautions and other social needs, taking into account the following environmental and social principles:  It is necessary to perform an assessment of the proposed project activity at the initial stage. This helps to prevent potential consequences; november 2014 page 70

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 Conduct environmental assessment of the proposed working draft;  Study the project location and its potential impact on the environment;  Minimize and mitigate negative impacts, increase the beneficial effects. Preparing optimum environmental and social terms;  Consulting the stakeholders from the beginning of the project design till its implementation in the atmosphere free of intimidation or coercion, taking into accountthe needs of disadvantaged and vulnerable groups. Set the procedures for handling complaints and resolving conflicts;  Improve the standard of living of immigrants, the poor and other vulnerable people, including women;  Development of projects of environmental and social impacts, including ESMP in time.  Lack of design in the field of critical habitat, if (I) it is revealed the adverse effects on such habitat that may prevent it from the normal functioning; (II) if it is established the reduction of population growth or there is a danger of extinction. If the project is located in an area protected by the legislation, it is necessary to implement additional programs for development and protection of such area. In the area of natural habitat should not be done any significant conversion, if there is no alternative (I), or there is no overall benefit (II) of the project or the overall benefit of the project exceeds the potential environmental costs, or if the conversion (III) are mitigated someway;  Prevention and control of pollution in accordance with the international practice;  Provide for the staff the safe and favorable labor conditions, as well as preventing the risk of accidents, injuries and illnesses;  Taking the measures for the compliance with core labor standards by the contractors / subcontractors, according to the labor law. Corporate policy implemented in the labor market, health and safety applicable by AEDC includes:  Labor order of AEDC that is set by the Chairman of the Board of Directors of AEDC, of April 2, 2012, on the basis of trade union leader. Labor legislation provides a description of the work and operations of the divisions of y AEDC company (including employment, changing a workplace, changing the working conditions and termination of the employment contract, basic rights and duties of employees, basic rights and duties of AEDC’s management bodies, protection of rights of employees, work and rest order, procedure for payment of wages, social security basics, safety and november 2014 page 71

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healthorder, training and retraining, work discipline, procedure for consideration of individual and collective disputes, etc.);  Occupational health and safety is regulated by the Rules established by the Chairman of the Board of AEDC of May 22, 2012, in accordance with the relevant requirements of AEDC managers. These Rules define the major functions of employees regarding the issues of occupational health and safety of all structural units of AEDC;  Plan concerning thecivil defense and emergencies in peacetime is set by the First Deputy Chairman of the Board of AEDC of March 2, 2012, and to be agreed with the Head of Department for Emergency Situations in Akmola region.  Corporate structure includes the HR department of AEDC which carries out the activities related to personnel management in AEDC. The main functions are:  Documentation of the employment relations (orders, contracts of employment, staff training, disciplinary actions, etc.);  Collection, processing and evaluation of data on the qualification and quantity of the personnel;  Developing models of the personnel selection and recruitment;  Arrange the activities related to training and staff development;  Making the plans aimed at realization of the HR needs of the company, as well as monitoring of their implementation;  Analysis of possible technical and social factors that negatively effect the efficiency of operating personnel;  Analysis of interpersonal and business relationships of AEDC employees;  Fruitful cooperation with educational institutions, training the AEDC employees;  active participation in the analysis and prediction of potential changes in the organizational structure of AEDC;  keeping records of employees subject to military conscription, as well as pensioners and war veterans, etc.

Occupational health and safety Division of AEDC includes 5 employees who are involved in the development and implementation of a set of legal, social, economic, organizational, technical, sanitary-epidemiological measures aimed at the prevention of occupational accidents and diseases. This Division supervise the operation of the specialized units in the sphere of implementation of environmental monitoring and reporting. november 2014 page 72

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10.1 Brief description of the climatic conditions of the area of the project location

Astana is located in the steppe zone of the northern part of Central Kazakhstan. The climate is sharp continental with long, cold winters and short, hot summers. The air masses of 3 main types come to the city territory: arctic, polar, tropical. In cold season the weather is predominantly determined by the western extension of the Asian anticyclone. In winter clear weather sets. Anticyclonic mode is usually kept in the spring, resulting in dry windy and unstable weather with high daytime temperatures and night frosts. Spring usually comes in the 2ndhalf of March and lasts 1,5-2 months. Increasing the temperature to 0° C is observed predominantly in early April. the stop of frost at night is observed from April, 10-19 (the early stages). Winter is rather long, in some years, the winter in Astana lasts 5,0-5,5 months. Autumn comes in early September, lasts until the end of October and is more dry than the summer. Solar radiation. The sunshine duration in the area under study is 2,200 hours per year, the maximum occurs in July. The values of annual total radiation reach 112 kcal/cm2, and scattered radiation is up to 52 kcal / cm2. The sunshine duration is 2452 hours, the maximum monthly average sunshine duration - 325-329 hours is noted in June and July. According to the data the annual variations of the radiation balance in Astana are given below in Table 10.1.

Table 10.1: Radiation balance of the surface activity (MJ / m2) under average cloud conditions I II III IV V VI VII VIII IX X XI XII Year -26 2 104 266 356 386 365 294 164 60 -7 36 1928

Air temperature. Astana is characterized by persistent severe frosts in winter, intense rise of temperature in a short period of spring and high temperatures in summer. Moving average daily air temperature at 5 ° C in spring usually occurs in the third decade of April, in the fall - in the decade of October. In summer on the steppe areas under the influence of intense heating of the air is set fair cloudless dry, hot weather. The hottest month is - July with an average temperature of 20° C- ЗО°С. On hot days the temperature november 2014 page 73

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may rise up to 40-42° C. Average maximum air temperature of the hottest month is 27° C. In early September it starts a stable freezing and at the same time can be the earliest snowfall. The number of days with temperatures down to 25° C and lower ranges from 10-14 to 38-45 days a year, and in some years up to 18-20 days per month. The coldest month is January – with the monthly average temperature minus -17,2° C. In some cold winters temperature can drop to 49-52° C (absolute minimum), but the likelihood of occurrence of such temperature is quite low (not more than 5%). Average minimum temperature of the coldest month - January is minus 22° C. The estimated air temperature of the coldest five days in Astana is minus 35° C.The duration of the warm period is 194-202 days and cold period is 163-171 days. The frost-free season lasts 105-130 days. Atmosphere precipitation. The average annual rainfall in the city of Astana is about 326 mm. By seasons of the year, the value of precipitation is unevenly distributed: the greatest number of them falls in the warm seasons of the year (May-September) of 238 mm, with a maximum in July. Liquid precipitation in this regard contain 65% of the total volume, solids – about 25%, mixed-about 10%. The seasonal snow cover is formed in the second decade of November, the average time of destruction of stable snow cover - the third decade of March. The annual average of snow cover depth is about 22 cm, the number of days with snow cover are 140-160. The area under study with southeastern quarter winds is marked by atmospheric drought. The average number of drought may be 50-60 days (maximum 113 days). Severe drought in the district of Astana were observed in 1955, 1957, 1961-63, 1965, 1967, 1982, 1984 years. Air humidity. The annual average values of the absolute humidity is 4.8 MB. The smallest value of absolute humidity is registered in January - February – 1,6-1.7 mb; the largest is in July – 12,7 mb. The highest moisture of shortfall is observed in June and July (12,2-12 mb). The average annual relative air humidity in the study area makes 69%. The lowest relative humidity is observed in summer months and contains 40-45%, the highest - in winter (80-82%). Wind. In cold season of the year, the wind regime is determined mainly influenced by the western spurs of the Siberian anticyclone, in warm season – by mild barometric depression. november 2014 page 74

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On the territory of the study area are dominated W, SW and S winds (annual recurrence of about 51%). See Table 10.2 and dr.10.1, 10.2 and 10.3. And in the warm period of the year marked decrease in wind frequency of S and SW rhumb and increases frequency of winds in the E and NE direction. Table 10.2: Frequency of winds by on direction (%)

Lull, N NE E SE S SW W NW calm January 11 13 7 12 28 28 16 3 6 February 2 13 9 11 19 20 14 3 7 March 3 13 11 13 15 22 17 6 6 April 6 12 16 14 11 15 10 10 6 May 8 16 8 10 9 16 16 11 6 June 10 12 12 11 11 15 16 13 8 July 11 16 15 11 8 6 15 6 12 August 13 17 12 9 9 10 15 15 9 September 5 14 11 14 12 16 17 11 9 October 3 8 9 10 13 25 22 8 7 November 2 5 8 12 18 28 22 5 6 December 2 13 9 14 19 25 15 3 8 Year 6 12 11 12 14 20 17 8 7

The annual average wind speed is 4.8 m / s. The strongest winds occur in the cold season of year. Maximum wind speed registered in Astana (formerly Tselinograd) is 36 m / sec. The highest frequency of occurrence (more than 50%) are mentioned the winds with speeds of 2-5 m / s. The highest monthly mean wind speeds are in March. Below, in Table 10.3 provides the wind speed frequency (Astana).

Table 10.3: Wind speed frequency(%) Wind speed (m/s) 0-1 2-3 4-5 6-7 8-9 10-11 12-13 14-15 16-17 18-21 22-25 16,7 31,8 26,5 14,6 6,6 2,4 0,9 0,3 0,1 0,1 0,0

Minimum average monthly value of wind speed is recorded in August. The number of days in a year with strong wind (over 15 m / s) is about 50 days (maximum 100 days). Summer winds have dry hot wind nature. Mean number of days with dry winds are about 14-20. november 2014 page 75

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Figure 10.1: Wind rose in January

Figure 10.2: Wind rose in July

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Figure 10.3: Annual wind rose

10.2Relief and landscape

Relief. Astana is located in the riverine flatland and partly in the valley of the river Ishim. As a whole, the territory relief is characterized by a lack of noticeable deviations and expressed forms. The characteristic elements of the relief are numerous downgrades –as steppe askali flats, which are formed in the spring lakes or swamps. The city is located in the area of dry steppe subzone of dry fescue-feather grass steppes on dark chestnut soils. The soil cover is heterogeneous withintegrated nature. The relief is represented by undulating watershed plain, which occupies 2/3 of the urban area. In general, the relief of the urban area is characterized by a lack of noticeable deviations and clearly defined forms, geomorphic features smoothly and seamlessly melt into each other. Plain is gently sloping towards to the river Yesil. Landscapes. By physical-geographical zoning explored territory is located within the Central Kazakhstan of Tengiz dry steppe undulating plains and riverine-hummocky province. In terms of morphostructural view, the province clearly separated from adjacent areas, locating in a tectonic depression of the Paleozoic basement. According to the Climatic and Natural Conditions the territory belongs to the dry steppes on dark chestnut soils. november 2014 page 77

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The landscape of the investigated area belongs to the plain type and represents a gently rugged pediment plain folded from sedimentary-effusive rocks, overlaid by a low-power gravel clayish weathering crust with fescue- feather grass and feather-fatuoid steppes on dark chestnut soils.

10.3 Soil

By the soil-geographical zoning the area location of the object belongs to the subzone of moderately fescue-feather grass steppes on dark chestnut soils. The soil cover is formed under conditions of the sharp continental climate, which is characterized by a high drought and a harsh change of temperature conditions. The average annual air temperature is +1,3 - +1,8 ° C. In winter the temperature can drop to -40 ° C and below. In conditions of low snow cover it promotes deep freezing of the soil (up to 1.5-2.0 m) and imposes its own characteristics in the processes of soil formation. Annual rainfall varies within 250-300 mm., and their maximum falls in June-July months. The territory of the object is characterized by high wind activity, which is one of the reasons for the intensive development of soil blowing processes. Soil-forming rocks are eluvial-diluvial and diluvial deposits of different mechanical composition, often filled with rubble. Close proximity of dense rock and marl leads to the formation of soil with a short-cut profile - incompletely developed and underdeveloped. In most parts of the territory ground waters are at a depth below than 3.0 meters and have no effect on soil-forming processes. Only by different kinds of drawdown of ground water can play out to the surface or overlie at a shallow depth. This leads to the development of bogging processes and the formation on such sites hydrophilic vegetation. One of the specific characteristics of the soil cover in the territory of the object, as well as all of the subzone of dark chestnut soils is its complexity. The complexity of the soil cover is substantially due tothe microrelief surface, causing a redistribution of moisture and salts for its elements. The changes of mesorelief concerned with the formation of soil association representing an alternation of different soil moisture series. As a result of the cumulative effects of all the factors of soil formation at the territory of the object were formed and were identified in the survey of the following soils: Dark chestnut normal Dark chestnut alkaline Dark chestnut incompletely november 2014 page 78

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Dark chestnut underdeveloped Meadow-chestnut

10.4 Local water resources

Astana is surrounded by three major river systems, the central of which is represented by the river Yesil (Ishim) (dr.10.4), with its lateral channels of streams Akbulak, Sarybulak, South – is Nura River and north - river Selety. The feature of rivers regime and temporary streams of Akmola region supplying with snow-fed almost exclusively, it is the sharp uneven flow distribution during a year. Spring snow melt runoff flowing into rivers in April and May, makes an average of about 90% of annual runoff.

Figure 10.4: Yesil river embankment in Astana

In ephemeral streams proportion of stream flow in the annual spring season reaches 97-100%. In general river in nature annual distribution of stream flow is fairly homogeneous, having small differences are mainly due to some different conditions of ground water feed of the river in northern area of the region. In Yesil river small flow due to the effluent of seepage takes place during the whole warm period, and partially in winter. november 2014 page 79

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The nature of intra-annual flow distribution in different years varies slightly depending on the size of the spring flood. In the relative stability in time for the conditions ground water feed in dry years it usually has a decrease in the proportion of runoff of the spring season in annual and increase in the relative weight of thedrought flow. In wet years the opposite is true. The major features of Yesil river and temporary streams, as well as all the rivers of the Akmola region are determined by the conditions of their feed. In accordance with the exceptional value of melted snow water in streams feeding of the inspecting territory the main phase of their regime is pronounced spring flood, following next a deep low water which comes up to complete drying of small streams and often relatively large. Spring floods begin on average on April 5-10. Specific dates of the beginning of spring floods: before March 20-25; later than April 20-25. By years terms of beginning floods range from latter half of the March until the third decade of April. Flood ends on the most streams often in May and only the largest rivers stretched until July. Duration of flood varies on the average from 10 to 30 days. Water conditions of the river are characterized by a pronounced spring floods and prolonged low-water periods. The duration of seasonal flood in the upper and middle of the river flow is 1-1.5 months and increases downstream to 2-3 months. The share of spring flood has to 86-95% of annual runoff. Large uneven of the flow distribution is not specific only within the year, but from year to year. Annual volume of runoff in wet year may exceed the river runoff in dry year by more than a hundred times. One of the characteristics of long-term progress runoff of Yesil river is the tendency of grouping high-water years and low-water years, which greatly complicates its use in the national economy. Yesil river flow is formed almost entirely by the melted snow water. Rainfall in the conditions of hot summer and very dry soils is lost to evaporation and runoff of the river has no practical importance. The runoff rate in summer and winter low water of Yesil river within, as in a region and the city is determined by currently only releases from Vyacheslavsky reservoir.

10.5 The structure of the vegetation area and its floristic composition

The city territory belongs to the zone of dry sod grass steppes on dark chestnut soils. In areas of the territory dominated by feather- Volga fescue grass communities with forbs. The most widely expansion had steppe november 2014 page 80

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grasses: esparto grass (Stipa capillata), fescue (Festuka sulcata), June grass (Koeleria gracilis); herbs: goldilocks - woolly and Tatarian (Linosyris villosa, Linosyris tatarica), sage-leaf mullein (Phlomis tuberosa) etc., as well as - Austrian wormwood (Artemisia austriaca). Projective ground cover with plants works out - 50-60%. In recent years, vegetation areas heavily modified. According to a survey involving library materials made a map of the vegetation. Vegetation of the area are represented by 6 associations and plant groupings: 1. Fescue-feather grass on dark chestnut soils. Total projective of ground cover vegetation is 50-53%. Vital power of plant formation is satisfactory. Plants usually during the growing season pass all phases of the growth. Herbage two-tiered. The first tier forming feathers- feather grass - (Stipa capillata) andsandy needle-grass (Stipa Lessingiana). The average height of the first tier is about 40-46 cm. The second tier of 15-25 cm tall form fescue, sagebrush, and low herbs. Leading grass of plant formation are horsepine grass, fescue (Festuca sulcata), wormwood sage (Artemisia frigida) and Austrian wormwood (Artemisia austriacus). Among the other plants found Helictotrichon desert (Avenastrum desertorum), Austrian astragalus (Astragalus austriacus), June grass (Koeleria gracilis), cinquefoil forcipate (Potentilla bifurca), spring sedge (Carex praecox). More rarely can find Veronica,goldendrop, spring adonis (Adonis vernalis), gosling or prostreya. Richness in species of herbage is average. An area of 100 m2, there are 12-14 species of plants. The average yield of vegetation is 3.5 t / ha of dry weight. 2. Fescue-stipa-wormwood on dark chestnut soils in complex with fescue-Stipa-feather grass on dark chestnut incompletely soils by undulating plain. This Association of vegetation differs from the previous by the presence of wormwood as a subdominant. Up to 30% of the area takes fescue-sagebrush-feather grass vegetation in the grass stand dominated by fescue (Festuca sulcata), Austrian wormwood (Artemisia austriaca), wormwood sage (Artemisia frigida) and feather grass (Stipa capillata). Projective ground cover by vegetation is up to 40-50%, sometimes on relatively sparse areas works out to 30%. On 100 m2 there are average 15- 22 species of plants. The average yield of this plant association is 3.2 t / ha of dry weight.

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3. Fescue-feather grass on dark chestnut soils in combination with wormwood fescue-feather grass on dark chestnut alkaline soils on undulating plain. It’s different from the first association in the presence of 10-30% of plant communities dominated by the Austrian wormwood (Artemisia austriaca), its accompanied by feather grass (Stipa capillata), fescue (Festuca sulcata),goldilocks (Linosyris villosa). Projective ground cover with vegetation varies between 35-45%. Species richness of plant formation - 15-20 species per 100 m2. Yields of vegetation is 2.8-3.0 t / ha of dry weight. 4. Fescue-sagebrush-feather grass on dark chestnut incompletely developed soils in conjunction with the fescue-wormwood sage on dark chestnut underdeveloped soils up to 40% on the undulating plain. Leading species in the plant formation are fescue (Festuca sulcata), Feather grass (Stipa capillata) and wormwood sage (Artemissia frigida). From other kind of plants found: June grass(Koeleria gracilis), stupets John's-wort and others. Projective ground cover of vegetation is low - 20- 30%. On 100 m2 there is 10-12 plant species. The average yield varies from 1.5 to 1,8 t / ha of dry weight. 5. Grass-sagebrush-mix herbs on meadow-chestnut soils on microdepressions. Vegetation of this association is mixed. Along with mesophilic grasses such as couch grass (Agropyron repens), awnless brome (Bromus inermis) in the plant formation there are also steppe species: red feather grass (Stipa rubens), fescue (Festuca sulcata), sickle alfalfa (Medicado falcata), lady's bedstraw (Galium verum), spike speedwell (Veronica spicata), sage-leaf mullein (Phlomis tuberosa), Austrian wormwood (Artemisia austriaca). Graminoids in the plant formation are on average - 60%, herbs - 25%, wormwood - 15%. Species richness of plant formation is high: at the area of 100 m2 meters species of higher plants encountered to 25. Herbage of the association of vegetation is very valuable as fodder, in 100 kg of hay contains on average 53 kg of feed units. The average yield of the dry mass is 4.0 kg / ha. 6. Fescue -wormwood sage on dark chestnut underdeveloped soils. In this type of herbage dominated drought-resistant plant species. Low moisture and crushed stony soil cover caused sparseness of vegetation. Projective ground cover vegetation does not exceed 10-15%. Herbage is first tier, the average height of 20-25 cm. Leading plants in the plant formation are fescue (Festuca sulcata) and wormwood sage (Artemisia frigida). Sporadically occur: feather grass (Stipa november 2014 page 82

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capillata), June grass (Koeleria gracilis), stupetsJohn's-wort , pink narrow- petaled, Pedicularis crested etc. Species richness of herbage is low, at the area 100 m2 found 8-10 species. The quality of fodder is average. A large area of the city is busy with planting hardy-shrub species (birch, oleaster, maple, acacia, bushes) (Figure 10.5).

Figure 10.5 Hardy-shrub species in Astana

The list of plant species is given in Table 10.4.

Table 10.4: Listofplants Plant name in Plant name in Family name Brief decription Russian Latin Austrian Astragalus Leguminous astragalus austriacus L. Perennial, good fodder value Puccinella distans Gramineous Salt grass P. Perennial, average feed-value Bushgrass Calamagrastis Gramineous Perennial,rough epigeios L. graminaceous plant Linosyris villosa Composite Goldilocks D.C. family Perennial, low fodder value Lessing feather- Stipa Lessingiana Gramineous grass Trin. Perennial, good fodder value Feather grass Itipa canilata L. Gramineous Perennial, average feed value Awnless brome Bromus imrmis Gramineous Perennial, excellent fodder grass Leyss value Cinquefoil Potentilla bifurca Rose family Perennial, low fodder value november 2014 page 83

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Plant name in Plant name in Family name Brief decription Russian Latin Stickseed Lapulla patula L. Borage Perennial, inedible, weed Blue grass Biennial, excellent fodder Poasteppo Gramineous steppe value Festuca culcata Gramineous Perennial, excellent fodder Striated fescue value Fatuoid eremic Avenastrum Gramineous Perennial, average fodder desertorum L. value Spring sedge Carel praecox Cyperaceae Schred. Perennial, low fodder value Fleawort Ialium verum L. Rubiaceae Perennial, low fodder value Redtop Agrostis alba L. Gramineous Perennial, good fodder value Couch grass Agropyron repens Gramineous Beauv. Perennial, good fodder value Agropyron Gramineous Wheat-grass pectiniforme L. Perennial, good fodder value Austrian Artemisia Composite wormwood austriaca Jacg. family Perennial, low fodder value Wormwood Artemisia frigida Composite Perennial, low fodder value sage Web. family Artemisia procera Composite Slovenwood Subshrub. Inedible. Willde. family Capsella bursa- Bindweed Crucials Perennial, inedible. pactoris С.А. Spiraea Spiraea Rose family Perennial bush hypericum Kypericifolia L. Koeleria grasilis Perennial, excellent fodder June grass Gramineous Pers. value Phragmites Bur reed Gramineous Perennial, inedible communis Trin. Jalvia spepposa Salvia steppe Mint family Perennial, inedible Schost.

10.6The fauna of the area under study

The fauna of the city and surrounding area does not differ with significantly richness and diversity. In the vicinity of the boundaries of the area there are a number of animals: Wild sheep - argali,Red-cheeked Ground Squirrel; Spotted Rock Thrush, Black Redstart, Sulphur leaf warbler,gray-necked bunting,mouse- hare, gray hamster,Siberian jerboa;copperhead snake, steppe runner,little november 2014 page 84

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souslik, northern red-backed vole; European hedgehog, great spotted woodpeckers and black; ptarmigan, common lizard, common nothern viper. There are also owls (long eared, Scops Owl, marsh) andpredaceous daytime birds (imperial eagle, greater spotted eagle, common buzzard, black kite, common kestrel, falcon hobby), and magpie, hoodie crow, jackdoor, rook. There are widespread, but not particularly numerous typical steppe animals (dr.10.6). The largest distribution and abundance they reach at the southern border of the city. Here, as in the forest, are commonly found common hamster, wild animals - wolves, foxes, avoiding forest corsac and steppe polecat, brown hare, steppe pika. In winter is not rare in the steppe, especially near lakes and rivers, blue hare. On the short grass steppe areas, mainly on pastures and near some villages there are Red-cheeked Ground Squirrel and little souslik.

Figure 10.6: Souslik

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There are also steppe mouse and a variety of mouse-like rodents, key forage valuable fur-bearing animals. From rodents - granivorous in the tangle of low forest, bushes and tall forest is commonly found common field mouse, the few calomys colosus mouse, in places seldom found harvest mouse, house mouse. From insectivores in the steppes of damp areas with bushes and tall grass can meet shrews. Eared hedgehogs are rare. Bats in the flat steppe are uncommon. Species composition of birds steppes rather monotonous. The most popular are:field-lark, horned lark, white-winged bird and particularly black. Diverse is fauna of rivers and lakes with thickets of willow, reed, cattail, and other moistureloving plants. On the banks of large lakes is found wild boar, usually numerous, and sometimes acclimatized muskrat; in some years very numerous water rat, and of insectivorous found in many places the water shrew - Eurasian water shrew. Inlittoral vegetation of widespread is badger. Particularly diverse is bird fauna in ponds. Among waterfowl nest numerous ducks (mallard, teal, gray Pintail, Shoveler, Common Pochard, Tufted Duck), gray goose, swans (common mute swan, whooper rare). On the waters coot and waterhen live, grebes (great crested grebe red-necked, small, Black- necked), seagulls (silver, blue-gray, black-headed gull, barnacle, Caspian tern). Near water bodies live the yellow, gray and rare bitterns. Among insects are numerous dragonfly supplying feed to gulls, terns, small birds of prey, especially hobby. The fauna of reptiles and amphibians is especially poor. From reptiles are common grass snake, Dione snake, steppe viper, sand lizard, and amphibians from - green toad and moor frog. The most common and popular fish is golden carp living in the vast majority of lakes and rivers. Also are common: ide, tench, roach, pike, river perch, ruffe, burbot, goldfish, minnow. In the Yesil river basin there are a few Arctic grayling, goldilocks, Siberian and ice Hovit - sea lamprey, mottled sculpin and some other species. Of invertebrates are numerous insects, especially grasshoppers, for example, Phillips, white-haired. Siberian and dark red grasshopper, grasshoppers, beetles, click beetles and dark, earthy midges, sob webworm, etc. On the territory near Astana found the following animals listed in the Red Book of Kazakhstan: saker falcon, golden eagle (dr.10.7), bustard, demoiselle crane, red-breasted goose, spoonbill, Sociable Lapwing, imperial eagle of the steppe, see eagle, osprey, little bustard, great black-headed gull. The Red Book also made lybka steppe,ground beetle, flywheel bumblebee, bumblebee lezus, meliturga Rhopalocera, rofitondes gray, scoliid wasps, giant; emperor moth, shriek-owl;European swallowtail,scarce swallowtail Apollo. november 2014 page 86

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Figure 10.7: Golden eagle

World of birds quite rich in the vicinity of the city. It is represented as a species living at this territory, and birds come here for the summer, or pass through the territory of the area in spring and autumn. Migratory birds make brief stops here and are being fed. At this time, you can find large flocks of geese, sandpipers and ducks. There are swans, herons, cranes, many kinds of ducks: baldicoots, grebes, gulls, swamp hens, sandpipers.

10.7 Cultural, historical and archaeological assets Historical and cultural heritage, as the most important evidence of the historical destiny of every nation, as a basis and a precondition of its present and future development, as part of the entire human civilization, requires constant protection from all dangers. Ensuring that in the Republic of Kazakhstan is a moral duty and determined the Law dated 02.07.1992, № 1488-XII (amended on the 29.09.2014) "On protection and use of historical and cultural heritage" duty for all legal entities and individuals, protection of monuments of architecture, archeology and history provided by the provisions of this Law of RK. It should be noted that the responsibility for the safety of monuments provided in the administrative law of the Republic of Kazakhstan. Violations november 2014 page 87

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of the law on protection of monuments of history and culture entail statutory material, administrative and criminal liability. The planned reconstruction of the substation on the territory of Astana does not affect the monuments are registered in the organs of the Committee for Protection of Monuments of Culture of Kazakhstan, with architectural and artistic value and scientific interest in Kazakhstan.

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VSOCIO-ECONOMIC CHARACTERISTICS

11 Socio-economic activities of AEDC

11.1 Scope of land acquisition, leasing and impact of resettlement

The land plot under the existing facilities belongs AEDC on the right oftemporary paidlong-termland use (lease) based on the Resolution of Astana Akimatdated01.27.2014№ 197-114. The lease agreementis concluded betweenJSC "AEDC" and Land Relations Departmentof Astana. The land plot leased for 49 years, is the public property and rented on acommercial basis, in accordance with theterms of the lease agreement. No landis leased from the privateland users. No private landownersare affected.There are nounresolved issues, disputes, complaintsandcourt casesrelating to landare absent. Detaileddata regarding theland lease, which includethe number ofleased plots, their area, annual cost of rent,date of signingand theterm of the leaseare presented in Table11.1.

Table 11.1: Data on the land lease Name 110/10 kW Astana substation Number of land plots 1 Land plot area, sq.m. 13,523 Number of agreements 1 Date of the lease agreement 06/02/2014 signing Date of the lease agreement 27/01/2063 expiry Annual rent cost, KZT 435,038.00 Form lan user Land Resources Department of Astana Type of the land plot Public Location 42, Seifullin Str., Almaty Distrcist,Astana Compensation The lease payment is paid 4 times a year: every quarter before the 10th of the month following the passed quarter

Land lease agreements are executed by the Legal Department of AEDC and all necessary payments are arranged by the Accounting Department. november 2014 page 89

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11.2 History of land acquisition (and relocation) of the existing production facilities of AEDC and Involuntary Resettlement

The land plot that is currently in AEDC’s possession was previously owned by the State and used for energy facilities and infrastructure. Later they were handed over to AEDC. During this time there was no physical and economic displacement of people caused by the leasing of the land plots, which are currently used by the company. The Government has given for rent these land plots for 49 years. Rent of land precludes the use of any land plot, owned or leased by individual / private entity from the state. Hence, the project of Substation reconstruction is categorized as C for IR and indigenous people. Land lease agreement is concluded between AEDC and Land Relations Department. This agreement includes the detailed information about the land plots (location of land plot, cadastral number, surface of the land plot, purpose of the land plot exploitation), cost of land lease, rights and obligations of the parties, liabilities of the parties, procedure for complaints settlement, term of the contract, legal addresses and account details of the parties. The agreement foresees that all disputes and disagreementsbetween the parties can be resolved through informal negotiations. In the event, that the resolution of disputes and disagreements is not possible through the informal negotiations, those issues shall be settled inthe court order. According to the Requirement 2 for safety in case of the involuntary resettlement it is required to avoid or minimize the involuntary resettlement by studying the project and alternatives to improve or at least to restore the income of all displaced persons in real terms relative to the preparatory level of the project, as well as improve the level of life of the displaced poor and socially vulnerable groups.

11.3 Indigenous people

The population of the Republic of Kazakhstan consists of more than 100 ethnic groups (nationalities). In Astana Kazakhs make up the largest part of the resident population (74,3%), followed by Russians (16,2%), which corresponds to the national level indicators, Ukrainians (1,7%) and other nationalities (7,8%). It is unlikely that the classification of the project and preliminary review will indicate that the proposed project will be implemented in the territory having a positive or negative impact on indigenous people. november 2014 page 90

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According to statistics data of 2009, the population of Kazakhstan consists of more than 100 ethnic groups (nationalities), including Kazakhs (10 million people, or 63% of the total population), Russians (3.8 million people, or 24% of the population) Ukrainians (333 thousand people, or 2,1% of the population), Uzbeks (457 thousand people, or 2,9% of the population), the Uighurs (223 thousand people, or 1,4% of the population), Tatars (203 thousand people, or 1,3% of the population), Germans (178 thousand people, or 1,1% of the population). The ethnic groups, besides the major ones, settled in the area many years ago. All ethnic groups are fully integrated into the Kazakh majority, they have the same access to land and natural resources, health, education, human factor and the status of Social Security. None of these ethnic groups assert their cultural and social requirements separately from the Kazakhstan society, and this provision fits the condition of ADB in relation to indigenous peoples as defined ADB SPS (paragraph 6, Safeguard Requirements 3, 2009). Maintaining such an approach is also supported by the documents and reports prepared by international organizations implementing the projects in the Republic of Kazakhstan, including projects implemented with ADB support.

11.4Social protection and labor protection

Total number of AEDC employees at the end of 2014is 2111employees: 76% of them are men and 24% are women. The analysis of the distribution of employees by type of activity shows that the category of managers makes 14% of the total number of employees and includes all levels of management personnel (from the company manager to the site foreman). The category of experts makes 22,6% of the total number of employees. It includes engineers, lawyers, accountants and other specialists. The largest group consists of workers (electricians, drivers, mechanics, loaders, janitors, welders, etc.), which make up 62% of the total number of employees. The smallest group of employees is the office staff (secretaries, translators, manager assistants, etc.), which includes only women. This group makes only 1%. Every year the various number of students , 30-40 people attend the practical training in JSC ―AEDC‖. Students and AEDC conclude the correspondent agreements. AEDC offers the students to be employed after their graduation.

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AEDC adheres a policyof non-interferencetothe workof contractors.It is expected that contractorswill employ12 people forsubstation reconstruction, as well as 2 Technical Supervisors of AEDC will be involved. It should be notedthat the consultantsandcontractors mustadhere to certain legalrequirements established by AEDC. The Contractor shallcomply with the nationallabor legislation andcore laborstandards. The detailed information on the number of employees (as of 2014) and their gender for each category of employees working in AEDC is presented in Table 11.2. Women are engaged in all groups of AEDC. In general, women make approximately 24% of the personnel. All workers who are employed as a support staff - are women (100%). The number of women in the category of specialists is 48,2%. A small number of women are employed in the category of managers (18,1)%, but for the category of workers (14,7%). This is explained by the nature of work (need of physical strength to perform difficult tasks, remoteness of the sites and infrastructure, working in the open air, in the harsh weather conditions in the cold season prevent to involve women. However, AEDC does not make any restrictions to involve women for such positions.

Table 11.2: Distribution of AEDC personnel by type of work (including AEDC Energosbyt, as of the end of 2014) Total number Total for Manager Specialist Support Workers of employees AEDC s s personnel Total 2111 303 477 22 1309 Men 1613 248 247 2 1116 Women 498 55 230 20 193

Among all staff of AEDC, 26% of employees have a university degree (bachelor's and master's degrees), 35% have graduated from the colleges and vocational schools. Detailed information is provided in Table 11.3.

Table 11.3: AEDC personnel by education level (as of the end of 2014)

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Total Total for Managers Specialists Support Workers number of AEDC personnel employees Total 2 111 303 477 22 1 309 Higher 546 189 296 9 52 education College and 745 80 158 8 499 Vocational secondary education General 820 34 23 5 758 secondary education

As for the length of workingin AEDCfor all employment categories, the average length of work is more than 9years. The average number of years for various employment categories is distributed as follows: 11,5 years for managers, 9 years for specialists, 7 years for support staff and workers. In general, 30% of employees work in AEDC for over 10 years, 21% of employees for 5-10 years, 36% of employees work in AEDC over 1-5 years, 13% of employees are the beginners with experience of less than a year. Details are shown in Table 11.4.

Table 11.4: Distribution of AEDC staff by number of years worked in the company Total Total Manager Specialist Support Worker number of for s s personnel s employees AEDC Total 2111 303 477 22 1309 >10 years 652 154 144 1 353 3 – 10 years 614 76 160 4 374 1 – 3 years 410 53 77 6 274 < 1 year 435 20 96 11 308 Employees of IEN/REN work in AEDC for a long time, but the central office and the areas adjacent to the city of Astana face the problem of staff turnover (17,1% in 2014) due to the possibility of higher wagesoffered by competing organizations, in particular KEGOC. According to the Board meeting, which was held in AEDC, the investment project under consideration will not have a significant impact on the number of work places in AEDC, since the Project aims to replace the existing equipment, such as transformers, which transmission capacity can be greatly increased. The 110 kV power lines will be partly laid under the november 2014 page 93

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ground. AEDChas not yet discussed the issue of reducing the number of employees. The relative increase in the number of personnel occurs due to the restructuring of the existing departments and units. Also, there are no exact data on the reduction or enlargement of AEDC personnel. All the steps proposed in the framework of the investment project to be implemented in AEDCvery soon. For some activities, requiring the complex and large works, and in cases that do not require the specialized forces and equipment for the implementation of these works it is planned to involve the contractors. The contractors will be selected by AEDC through a centralized process in accordance with the scope and types provided byAEDC.Previous experience of the potential contractor will also be taken into account. AEDC staff carries out all types of maintenance and troubleshooting works. Typically, such work is carried out during March-November period, , while the routine works are carried out during the rest of the year. Most part of the repair work is performed byAEDC employees. But there could be the situations when the specialized contractors are involved for such works.

Basic norms of the International Labour Organisation and the Labour Code In the Republic of Kazakhstan ratified21 Convention of the International Labor Organization, which includes the basic labor standards of work, such as freedom of association, prohibition of child labor, prohibition of discrimination and the prohibition of forced labor. List of conventions adopted by the Republic of Kazakhstan, is presented in Table 11.5.

Table 11.5: Conventions of the International Labor Organization, adopted in the Republic of Kazakhstan14 Convention Date Status Fundamental

C029 – Forced labor Convention, 1930 (№ 29) May,18, 2001 In force C087 – Freedom of Associations and Protection of the Dec, 13, In force

Right to Organize Convention , 1948 (№ 87) 2000 C098 – Right to Organize and Collective Bargaining May, 18, 2001 In force

Convention, 1949 (№ 98) C100 – Equal Remuneration Convention, 1951 May, 18, 2001 In force

(№ 100) C105 – Abolition of Forced Labor Convention, 1957 May, 18, 2001 In force

14Source: International Labor Organization: http://www.ilo.org/dyn/normlex/en/f?p=1000:11200:0::NO:11200:P11200_COUNTRY_ID:103542 november 2014 page 94

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Convention Date Status

(№ 105) C111 – Discrimination (Employment and Occupation) Dec,06,1999 In force

Convention, 1958 (№ 111) C138 – Minimum Age Convention, 1973 May, 18, 2001 In force (№ 138)minimum age specified: 16 years; C182 – Worst Forms of Child Labor Convention, 1999 Feb,26, 2003 In force

(№ 182) Governance (Priority)

C081 – Labor Inspection Convention, 1947 (№ 81) Jul,06,2001 In force

C122 – EmploymentPolicy Convention, 1964 (№ 122) Dec,06,1999 In force C129 – Labor Inspection (Agriculture) Convention, 1969 Jul,06,2001 In force

(№ 129) C144 – Tripartite Consultation (International Labor Dec,13,2000 In force

Standards) Convention, 1976 (№ 144) Technical

C088 – Employment Service Convention, 1948 (№ 88) May,18,2001 In force C135 – Workers’ Representatives Convention, 1971 Dec,13,2000 In force

(№ 135) C148 – Working Environment (Air Pollution, Noise and Jul,30,1996 In force

Vibration) Convention, 1977 (№ 148) C155 – Occupational Safety and Health Convention, Jul,30, 1996 In force

1981 (№ 155) C156 – Workers with Family Responsibilities Convention, Jan,17,2013 In force

1981 (№ 156)

C162 – Asbestos Convention, 1986 (№ 162) Apr,05,2011 In force C167 – Safety and Health in Construction, 1988 Jun, 18,2008 In force

(№ 167) C183 – Maternity Protection Convention, 2000 Jun,13, 2012 In force (№ 183)The period of maternity leave is 18 weeks (20 weeks in case of obstructed child birth or in the case of the birth of 2 or more children) C185 –Seafarers’ Identity Documents Convention May,17,2010 In force

(Revised), 2003 (№ 185)

According to data provided by AEDC, all operations of the company are carried out in accordance with the norms of the Labor Code of the Republic of Kazakhstan, and is aimed at improving the conditions of labor registration in the country, which contributes to the further development of democratic, november 2014 page 95

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legal and social mechanisms of social consensus and also ensures the economic development and legal support of the decent labor. The Labor Code provides guarantees of labor right, social protection and decent working conditions. This helps to improve the overall productivity and competitiveness of the enterprises. Great attention is paid to the improvement of working conditions and the introduction of international health and safety standards in the companies. According AEDC, the company has not a separate document, which regulates the activities under the Convention of the International LaborOrganization. Therefore, the activity of the company is subject to the requirements of local laws and regulations. It should be noted that the Republic of Kazakhstan is one of the signatories of about 20 documents of the International Labour Organization. Thus, AEDC operates in accordance with the complex requirements and according to local regulations.

Trade Union AEDCTradeUnion is a voluntary public organization, which consists of AEDC employees, whose actions are aimed at the realization of professional interests. AEDCTradeUnion is an affiliate of the TradeUnion of Energy Sector Employees of the Republic of Kazakhstan. Legal entity of the TradeUnion of the Energy Sector Employees of the Republic of Kazakhstan is located in Almaty and is operated in accordance with the certificate of state registration No.623-1900-00 issued by the Ministry of Justice on December 28, 1995. The localTrade Union of AEDCis located in Astana and operates according to the registration certificate of the affiliate № 39-1901-FL, issued by Department of Justice of Astana dated October, 21,2010 (initial registration date - February, 22, 1996). Local Trade Union of AEDC operates in accordance with the Law of the Republic of Kazakhstan ―On Trade Unions‖ No.211-V of 27.06.2014, Charter of the trade professional unions of the energy sector of the Republic of Kazakhstan and Regulation on the local union. AEDC’s local Trade Union has its branches. Each of the IEN (Akmola, Yesil and Stepnogorsk) has its own branch of the Trade-Union of AEDC. The trade union of IEN is controlled by the Chairman, which usually worksin the same place. The Chairman is elected at the general meeting of employees. The decision on membership is a voluntary decision of each employee. According to data provided by the Chairman of AEDC, approximately 70- 75% of AEDC’s employees are the members of local Trade Union of AEDC. The Trade Union’s funds are formed by the monthly contributions, which are november 2014 page 96

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equal to 1% of salary for each working member. A fixed amount is transferred to the account the local Trade Union of AEDC. The Trade Union considers all important issues relating to the labor safety and availability of personal protective equipment. Local trade-union directly involves to the resolution of conflicts, as well as provides consultations and helps to resolve disagreements and disputes through informal discussions. A special commission of the local trade-union, which includes an equal number of workers and management staff deals with the resolution of all conflicts. This Commission reviews the complaints and provides recommendations for their pacific resolution. Also, the Commission provides all participants of the dispute an informal territory necessary to discuss all disputed issues and for their peaceful resolution, before they take a decision to continue the conflict resolution at the court level.The union also provides the applicants with legal and financial assistance. According to the head of the trade-union of AEDC, in most cases, will be reached a win-win solution. Also, the local trade-union of AEDC identifies the priorities of its activity through the meetings and conferences. All matters relating to labor relations, wages, workplace safety, labor safety, health maintenance are usually addressed at the meetings. The main document of the trade-union is a collective agreement signed by the AEDC administration.The collective agreement is drawn up and discussed taking into account all the comments of the Parties. It is approved at the conference of the staff. This agreement reflects the rights and obligations of the parties, as well as directly concerns the issues related to the issuance of wages, social benefits, the staff increase and reduction, labor safety, health and environmental protection. The union-union submits the annual reports and the results of its activities at the Annual Conference. The trade-union also has to provide the transparent information on the activities of its affiliates and a network of MES. Social benefits For AEDC employees are provided the services social insurance, accident insurance, voluntary health insurance. This is obligatory for all employees of AEDC. The accident insurance (insurance of occupational injuries) includes first aid for injuries that occur in the workplace. Voluntary health insurance covers medical care and treatment in the event of a disease. In general, insurance of AEDC staff has been carrying out since 2002. The company provides a full insurance coverage for all employees. As a rule, the agreement with the insurance companies is valid for one year. It can be concluded again for a further one year, subject to the november 2014 page 97

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provision of satisfactory service. The insurance package is particularly important for workers living in rural and remote areas, because there is no possibility of medical examination and treatment, as compared with the regional centers. The insurance package provides an opportunity to come to Astana in time and receive an adequate medical care. In the medical center of AEDC every employee can attend a mandatory medical examination, receive the first aid and necessary treatment. Medical Center, founded in 2006, operates in accordance with the state license № LP-00061DC dated October, 20, 2005 issued by Department of Health of Akmolaoblast. The license for the operation of the medical center is issued for an indefinite period. Medical services are provided by a nurse who has a specialized medical education, and periodically attends the qualification improvement training in the specialized institutions. The last license of the nurse for general practice is valid till 2017. Also, the nurse performs apre- shift medical examination of drivers in the morning, before the start of work (including blood pressure measurement, verification of Breathalyzer, etc.) and enters the results of the examination to a special medical journal. If the nurse has revealed that the health state of the driver is not satisfactory, she may prohibit the driver to perform his duties. Moreover, AEDC employees that operate in hazardous conditions, according to the law, must attend an annual medical examination. Also, it should be prepared the annual lists of employees subject to such examinations, which are agreed by the authorized persons. There are the Mobile medical teams in the headquarters of AEDC and perform the medical examination of employees included into the list. If necessary, the nurse will provide the necessary medical care during the examination. Later, the doctor gives the appropriate recommendations for every employee. The AEDC medical center has a medical treatment room, where the therapeutic measures prescribed by the doctor are provided (including the intravenous, subcutaneous, intramuscular injections, etc.). This room is equipped with the latest equipment (equipment of ultrasonic diagnosis, magnetic therapy, infra-red rays, portable device for inhalation, etc.). Currently, the Republic of Kazakhstan takes the steps to establish an effective pension system. This process is regulated by the state authorities. In accordance with the law, the compulsory social insurance includes the following social risks: loss of job, loss of income due to pregnancy and childbirth, the loss of a breadwinner and disability. The main objective of introducing the compulsory social insurance system is to provide compensation of a part of income lost in the event of social risks. These benefits are paid from the state social insurance fund. november 2014 page 98

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According to the data as of the end of 2014, 41 women working in AEDC are on the maternity leave. The fee for this period is covered from the state social insurance (AEDC does not pay). The other women are on leave for a childcare (children up to 3 years). No payment is provided for this period under the law. But the positions of employment are held for those women in AEDC. This is done to ensure that these women are able to continue their work after returning from the leave for a childcare. However, many women do not want to take the leave for a childcare in full and they take only one year for this purpose. Unemployment benefits, survivors' benefits, disability benefits are paid only on the basis of an application with the attached supporting documents of the public authority. Consultants and Contractors AEDC enter into contracts for the performance of certain actions and assume all risks associated with the performance of works. AEDC follows the policy of non-interference to the work of contractors. However, it should be noted that the consultants and contractors must adhere to certain legal requirements established by AEDC (including the insurance-related and issue of social benefits).

Training and certification of personnel. Education In accordance with the rules and regulations of the Republic of Kazakhstan the AEDC personnel should undergo the certification and pass the periodic qualification exams. For example, the technicians should refresh the basics of safety and health protection every 3 years. Nurse who works in AEDC also must undergo the necessary certification and obtain higher qualifications every five years. Accountants must attend the trainings and undergo the certification every five years. Metrologists have to attend the trainings every three years. Division for Labor Resources coordinates the timing of training and certification, as well as prepares an action plan for the coming year for the employees. Also, according to the internal rules for the implementation of activities in AEDC prepared in accordance with the Rules of work with employees of the power companies, each employee must undergo a periodic training. That is, the personnel should be trained in the training center AEDC at least every five years. Based on these requirements, Division for Labor Resources makes a plan of the AEDC personnel training. Education in the AEDCcenter is an obligatory condition, if the employee is ready for the qualification improvement (according to the availability of jobs that require advanced training). After the employee gets the theoretical training at the training center, he must fulfill the practical part of the work on the site; then, the employee has to pass an examination in prevention of november 2014 page 99

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accidents. And only after that, the Commission may assign the employee an appropriate level of qualification. The workers more often interested in their professional development, as it gives the possibility of obtaining the higher wages. All training costs are covered by AEDC. AEDC managed to keep and maintain a training center created in Tselinenergo during the Soviet times. All schools of AEDC are represented by one central training center. The personnel of the Training Center consists of a Chairman of the Training Center and 3 experienced teachers that impart the important knowledge and skills to the students. The education process includes the lectures and discussions of theoretical material, as well as the practical classes, during which the employees show in practice how well they understood the materials. Classrooms are equipped with modern equipment and literature sources on various topics of study. Practical training includes the use of certain infrastructure objects and facilities required for practical training. In addition to the central training building, there is own small training center, which combines rooms for theoreticalclasses and lectures and rooms for practical classes. As a rule, all training sessions are held from November to April. In addition to the training center of AEDCit was built a hostel and a café. In 2014,171employeeshave been trainedin the training centerof AEDCand obtainedthe allied trade. If an employee takes a special training outside AEDC, it is necessary to conclude a special agreement between AEDC and this employee. This is and obligatory condition that entered into force after the adoption of the Labor Code in 2007. Under this agreement, all training costs are covered AEDC. However, the employee must have to work in AEDCduring the whole set period (in the case of termination of employment before the end date of the period, it will be recalculated the cost of tuition and the employee will be required to reimburse AEDCa certain part of the training costs). AEDC program provides the detailed information on the specialized training courses. This allows to take the right decision of which course is most appropriate for different groups of employees. Under this decision, the Division for Labor Resources is developing a plan of the personnel training. Currently AEDCcooperates with Almaty Institute of Energy (theoretical training), Russian Institutes (theoretical and practical training). Also, AEDC periodically receives offers from the leading foreign institutions and training centers. In order to emphasize the high professional skills of employees of AEDC, it is arranged the special competitions where participants can demonstrate their best knowledge and skills. The winners of november 2014 page 100

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AEDCcompetitions take part in the national contest. As a rule, employees of AEDC get high scores and trophies during the Republican contest. Also, AEDC collaborates with educational institutions in order to attract new graduates and signing a contract with the Power Engineering Department of the Kazakh Agro-Technical University, since 2002. AEDC attracts students of the Power Engineering Department for a production training, starting from the third year of study. Many workers who are employed with AEDC are seeking to get the distance education. For the period of examinations, they are granted with a study leave.

Recruitment and concluding the contracts All vacancy posts and announcements are published by the recruitment centers (one center located in Astana and several centers in the Akmola oblast), according to the requirements of the Employment Act. Moreover, job advertisements are published in newspapers of general circulation in Astana and Akmolaoblast (three newspapers that are printed in Astana, are in use in all provinces: Infotses, Jobs today, Iz ruk v Ruki, etc.). The ads are also published in newspapers of local areas. Besides that, the ads are posted on bulletin boards. Site www.go.job.kz is also actively used for distribution of information about employment ofAEDC. AEDC does not yet have its own website, so it is not able to accommodate a large number of vacancies. But, currently, AEDCis doing the best to open the website in the near future. AEDC ads are usually placed for a period of 15 days, they contain the address, phone number, fax, e-mail address of AEDC, headquarters address in Astana, and other necessary contact details of the company. In case of no feedback for the announcement, it is published again for another 15 days. In certain cases, the ads are placed as long until finding a highly qualified specialist. All resumes that are considered as candidates for the position are invited for an interview to AEDC. If the qualification of the applicant and his/her skills match the requirements of the vacancy in full, the person remains in the company to undergo a probation period (2-3 months) and attend the additional training. New employees undergo the certification, besides that they have to attend the education and training of the accident prevention, pass the exams and tests, as well as the sign the employment contract for a period of one year. At the end of the first year, the head assesses the performance of the employee an in case of receiving the satisfactory results, the employment contract is extended. In this case, the contract is concluded for an indefinite period, and any further changes to be agreed pursuant to the norms of the labor contract. november 2014 page 101

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New employees are given the preliminary training and general awareness, and then their work is being evaluated during the probation period. Each newly adopted employee should know the general information about the company, must be aware of who to contact in case of questions, as well as know how to fill out the documents, how to behave in the company, where the medical examinations are performed, etc. Also, new employees should be informed about the internal control process of AEDCactivities. Employees are provided with a list with the names and contacts. According to the legislation, the plan for the next year is drawn up and agreed with the relevant managers. Division for Labor Resources monitors the compliance with the norms of the local laws, according to which the mandatory leave after 12 months of work is to be provided. Sometimes it is difficult to provide a leave to employees, especially those who workin the control service room in remote areas where it is impossible to replace one employee by another. In such situations, the leave is given in parts,thatdoes not contradict item 3of Article 105of Chapter 8of the Labor Codeof RK.The duration ofannual leave, in averageis 24calendar days. A daily working day in AEDC lasts 8 hours. As a rule, it is divided into two parts with a break every 4 hours. Some employees of AEDC work in shifts (dispatchers and electricians of dispatching departments work 24/7). Shift work is regulated by law indicating the working time and rest period between two periods of duty. The duration of the shift in AEDC is 12 hours and the duration of the rest time is 48 hours. Also, the law provides for an additional payment for working on weekends and holidays. Division for Labor Resources of AEDC supportsthe women's rights and involves them to work with AEDC. Total number of AEDC employees as of 2014 is 2011, 76% of which are men and 24% are women. Women work almost in all groups of employment of AEDC. Most of the women hold the management positions, as well as in a group of specialists and service staff. All activities of AEDCare carried out in accordance with the laws of the Republic of Kazakhstan, including the policy on maternity leave, as well as the provision of maternity leave.

11.5Monitoring and reporting on performance of social adaptation measures

All activities and approaches of AEDC foreseen by the social policy, are under the control of the Department of Human Resources (responsible for november 2014 page 102

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labor relations, training and professional development of employees, analysis of possible technical and social factors that have a negative impact on the efficiency of the staff, the implementation of the analysis of interpersonal and business relationships between employees within AEDC, ensuring cooperation with educational institutions, etc.),the Department of Public Relations (responsible for informing the public and coordination with stakeholders), the Legal Department (responsible for the legal protection of the rights and interests of the company for the matters of interaction with public authorities, the contracting parties, shareholders and employees), Division of Occupational Safety and Health (responsible for the development and implementation of measures to prevent accidents and occupational diseases), Division of Civil Defense and Emergency Management (responsible for activities related to civil defense, emergency, fire safety and the measures required to protect the personnel from potentially dangerous natural and man-made emergencies). In 2013, AEDC established theDepartment for Human Resources. The new Departmentof laborconsists of two divisions-Division for Labor and Wagesand Divisionfor Labor Resources. AEDC has a mechanism of control of the labor standards observance by the employees. Contractors and subcontractors carry out their own monitoring to ensure compliance with the legislation of the Republic of Kazakhstan, and other policies specified in the contract, even AEDC does not monitor them. AEDC also provides methodological and consulting support to Divisions for Labor Resources of AEDC Energosbit. In fact, AEDC- Energosbit is an independent unit, but most of their documents on labor resources are coordinated with AEDC. Division for Labor Resources of AEDC- Energosbit will also be included to the new Department for Human Resources of AEDC. At present, AEDC developed the regulations concerning the functions of this unit. In addition to the activities of the above structural units, the nurse also ensures the compliance with social and labor policies (responsible for the mandatory and periodic examination of employees according to the Order of the Ministry of Health of the Republic of Kazakhstan № 709 dated November, 16, 2009), and the Trade-Union of AEDC protecting the rights of employees and contributing to the process of investigation of the complaints and claims. Compliance with the relevant rules and regulations on health and labor safety are verified through attestation of labor conditions of production units, which are held in all MES through the use of laboratory methods. The details of certification are listed below: november 2014 page 103

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• Akmola MES has been certified in April-May, 2014. Certification was carried out by KAERGO, LLP; • Stepnogorsk MES has been certified in April-May, 2014. Certification was conducted KAERGO, LLP; • Esilsky MES has been certified in April-May, 2014. Certification was carried out by KAERGO, LLP. Certification is carried outevery 5 years. Based on the results of certification, if necessary, for MES is prepared anAction Plan for improving the working conditions. In addition, the passport for each position is made, including a description of the workplace and responsibilities. Employees are provided with a special clothing / uniforms and personal protective equipment, according to Resolution of the Governmentof the Republic ofKazakhstan datedJanuary 30, 2012№ 172"On approval ofrulesfor provision of employeeswith special clothing,shoes andother personal protective equipmentat the expense ofthe employer."

11.6Development of the Gender Policy

AEDC provides equal employment opportunities for both men and women. The maternity leave is given in accordance with the Labor Code of the Republic of Kazakhstan. Relationship between the civil contractors and subcontractors are regulated by the contract. AEDC follows a policy of non- interference to the work of contractors / subcontractors. Among the major factors that prevent to involve the women to AEDC operations, is the need to combine the family responsibilities and the employment duties. This is especially concerns the women living in rural areas.The women there cannot leave children and a household without attendance for a long time, and be on the job full time. Moreover, they need to spend a lot of time and effort to learn and obtain relevant qualifications, as well as to pass the exams.This is not possible due to care of children and hard living conditions. Younger women prefer to work in cities and Astana, and do not want to work in rural areas. AEDCmanagement noted that it would be appropriate to attract women to work at the dispatching centers and substations of AEDC. If there would work more women, then the men could be redirected to other, more physically hard works. Policy and the concepts of human resources adhered by CAEPCO are not contrary to the laws and regulations of the Republic of Kazakhstan, and ensure compliance with the following principles: not differentiate salary and

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benefits among employees of both genders of the same professional category and to provide maternity leave and benefits to women in childbirth. In employment,AEDC provides the equal opportunities for both men and women. Employment, provision of maternity leave and other regulations were developed in accordance with the Labor Code of the Republic of Kazakhstan. There are no any positions/jobs for which it is prohibited to hire a woman. Women are employed almost for all groups of employment of AEDC. For the project"Reconstructionof 110/10 kV ASTANA Substation", as well as for AEDC operationsas a whole,norestrictions forinvolvement ofwomen to thevarious types of work are set.

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VI EXPECTED ENVIRONMENTAL AND SOCIAL IMPACTS AND MITIGATION MEASURES

Reconstruction of Substation "Astana" is performed within the existing substation site, does not require additional land plot for SS, does not assume any radical restructuring of the electrical circuits and large construction works, during which it would have a significant impact on the environment. It is expected to replace the obsolete transformers or life- expired transformers, bus bridges and cells of 10 kV Switchgears. In order to ensurethe implementation of Rules for treatmentof persistent organic pollutantsand wastescontaining them, approved by order ofthe Minister of MEPof24.02.2012, No. 40 it were carried out the laboratory testsfor the presence ofPCB-containing equipment of JSC "AEDC." TransformersTRDN-63000/110-U1 are delivered withouttransformer oilandtransformer oilis filledat thesite of replacement andinstallationof transformers.Transformer oilhas been testedfor the presence ofharmful impurities by testing laboratoryLLP "Ekolyuks-As." The testconfirmed that the oil is free from any harmfulsubstances such as PCB, in addition, we have made arequestto the plants-suppliers asfor the presence orabsenceof hazardous organiccontaminants inthe compositionofthe suppliedtransformeroils.It was received a reply that the transformer oilsdo not contain any harmfulsubstances (oil refinery "Azerneftyag", "Angarsk Petrochemical Company" are the plantssupplying transformer oils). In this regard, the transformersdo not representan environmental hazard. Old transformersare storedin AEDC warehouseas a reserve equipment, i.e. they canbeused subsequentlyto replacethe damagedsubstation equipment. Decommissioningof the installedpower transformersconnected with theiroverloading capacity.Installation, assemblyand replacementof dismantledtransformerswill be performedat the siteswhere there are the overloadedpower transformers. The new equipment to be installed is environmentally friendly, will not change the environmental conditions in the area of the substation location. In a mandatory manner JSC "AEDC" will take all necessary measures to prevent harmful effects on the environment, both in the process of modernization, and during further operation of the substation. Thus, reconstruction of the substation cannot in principle increase the load on the existing environment. However, the reconstruction project provides certain november 2014 page 106

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measures for minimizing the environmentalimpact in the process of projects of the substations modernization. For the period of reconstruction of the SS "Astana" the following activities for environmental protection will be performed: 1. Compliance with environmental requirements during the installation and operation of substation equipment; 2. Protection against noise and corona discharge and fans for cooling the transformers and reactors; 3. Protection of flora and fauna; 4. Use of technically sound machines and mechanisms; 5. Arranging the stations for washing the wheels and bottoms of vehicles on the exit road from the substation territory with recycle of collected and settled water; 6. Removal of debris, sludge to the specially designated areas; 7. Shielding the debris, sludge during transportation by trucks; 8. Installation of technological platforms and sites for temporary storage of waste on the site. During the reconstruction of the designed project no significant impact on soil, vegetation and fauna in the area of work is expected, because the project is located at the existing residential area. Installation works during the realization of SS "Astana" project reconstruction are conducted in compliance with the environmental regulations. Dismantled equipment is stored on separate designated areas according to the list. The list of dismantled equipment is divided into the equipment to be liquidated, to sell to the third parties and to create a reserve. For the period of operation of SS "Astana" it will be realized the following measures for the environment protection: 1. Organization and drainage of surface runoff from the roof and the territory to the relief; 2. In accordance with the requirements of the Environmental Code of the Republic of Kazakhstan, other legislative and regulatory acts in the field of environmental protection and sanitary-epidemiological well-being of the population, adopted in the country, the production and consumption wastes are collected, stored, detoxified, transported to the place of their utilization or disposal; 3. For the sound waste management it is necessary to keep records and control of all types of wastes generated in the process of the enterprise operation; november 2014 page 107

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4. The separate collection and utilization of all types of industrial waste; 5. Regular watering of green planting and territories, taking care after the existing green planting. The project impact will be provided during the reconstruction works and it is temporary. However, we must take into account the potential impact during the preparatory works. These changes will be temporary and will not require the use of any measures to reduce the impact level, except that the reconstruction project should take account the aesthetic issues.

12Assessment of potential impact on air and mitigation measures

Air pollution can lead to various threats to the health of workers and the public. During the works of the substation reconstruction it is formed a dust in small quantities, which is considered as an impact on the air during the performance of the scheduled works. It is expected that the impact on air quality will be immediate, small, local and short-term. AEDCand CAEPCO (in the case of activities related to AEDC) require from their contractors and subcontractors to provide assurance that any air pollution associated with the workswill not spread beyond the area during a definite period of time, will be in compliance with the provisions of state laws, regulations and standards, and will not worsen "quality of life" of neighboring properties (e.g., causing inconvenience to them). The main sources of pollution during the reconstruction are the special construction equipment, motor vehicles, which have a negative impact on air basin. The pollutants formed in a trace amount during the reconstruction process from the used transport: inorganic dust SiO20-70%, benzo/a /pyrene, aldehydes, nitrogen dioxide, sulfur dioxide, soot, carbon monoxide, hydrocarbons. The following are the examples of activities, which also potentially form the air pollution:  Preparation of the surface, which may result in dust formation;  Dust from vehicles transporting equipment;  Process of the equipment unpacking, installation and others. The Contractor shall include appropriate measures to reduce air pollution levels and the appearance of dust by: (i) providing the dust masks for operating personnel; november 2014 page 108

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(ii) organization of regular water spraying for dust control; (iii) supply the filters or dust collectors for the equipment to reduce dust emissions; (iv)provide protective tents for the trucks transporting the material that can produce dust. It is necessary to take appropriate measures to limit or reduce exhaust emissions from vehicles. The equipment must be in good working condition. The Contractor should arrange a regular training for the working personnel to avoid or reduce the expected impact from the working operations. The trucks with an open container for transportation of dust-raising materials should be equipped with drop sides. Dust-forming materials should be loaded not higher than a level of the drop sides, and they must be covered with a tent. The area of impact on the atmosphere is characterized as local, within the territory of reconstruction and previously assessed as insignificant.

13Assessment of potential impact on local water bodies, and mitigation measures

Water is required for the reconstruction works and for domestic use. During the operational phase of the substation, water is required for domestic consumption, as well as for safety requirements. As for drinking purposes it will be used the imported bottled water. In other cases will be used the process water, which enters to the territory of the existing substation by a municipal water supply system. The following are examples of activities which may result in formation of waste water or examples of activities that may have a potential adverse effect on water quality:  Washing and cleaning of the machines being used (washing the wheels of trucks, etc.);  Irrigation of territory to prevent the formation of dust;  Check for the leaks the systems of fire protection, water supply, sewerage, sanitary sewage, storm drains. Contractor / Subcontractor should be responsible for the proper discharge of wastewater from the site and installation of water drainage in accordance with the contract. During the reconstruction will be arranged the stations for washing the wheels and bottoms of vehicles on the exit roads from the substation territory with recycle of collected and settled water; november 2014 page 109

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In view of rational use of water resources it is organized the drainage of surface runoff from the roof and the territory to the relief. Degree of the impact on water resources is characterized as local, within the reconstruction territory and pre-assessed as insignificant.

14Assessment of potential impact to soil and land resources, and mitigation measures

The works carried out on AEDC substation "Astana" under the modernization program does not require the allocation of new or additional land. The current land use involves the use of land plot that is already rented by AEDC or owned by the company. The current lease agreement have been concluded for 49-year period, so that in the course of the modernization program will not need a new lease agreement. Penetration into areas that are considered sensitive from the environmental, cultural or historical points of view, will not occur in the course of the project. The soil may be contaminated due to spills of transformer oil. Measures for the soil protection The main actions to protection the soils from waste products are: 1. Be responsible for the safety of containers (storage of solid waste); 2. Storage areas of solid waste should be kept in proper a sanitary condition, to prevent contamination of the enterprise area; 3. Landscaping; 4. Provide separate storage of waste from the premises repair, bulky items and tree branches; 5. Planting trees:  Large shrubs are planted at a distance of 1,0 – 1,5 m from each other with a width between rows of 1,5 – 2,0 m;  Small shrubs are planted at a distance of 0,5 meters from each other at the same row spacing. The area free from works, outside the driveways and sidewalks are planted with the trees and shrubs (birch, maple, acacia, lilac and others.), the grass lawn with perennial grasses and flowers are arranged. Based on the analysis and the characteristics of the territory, it can be concluded that with the compliance of the proper requirements, no harmful effectssuch as pollution, erosion and landslide will be made on the soil and subsoil during the reconstruction and operation periods.

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15Assessment of the potential impact on the flora and fauna of the project area

While making the Initial Environmental Examination of the project of reconstruction of substation "Astana" it takes into account the impact on wildlife and habitat. Rare plants and animals listed in the Red Book are absent. To prevent and reduce the harmful effects on wildlife and vegetation cover it is necessary to comply and perform a number of activities to reduce the negative impacts: 1. To prevent the fire of the existing plantations in and around the substation area, it is necessary to observe safety rules and fire safety; 2. Ban the breaking of shrubs for household purposes; 3. Avoid littering of the territory with industrial and household waste; 4. Provide timely care and watering of green plants; 5. Minimizie the movement of vehicles, and ensure their movement on the roads only; 6. Do not allow the spills of transformer oils; 7. Arrange the environmental education for the wildlife protection, prevention and control of fire situations; Herbaceous plants are a source of food and shelter for many species of animals and birds. In this connection, there is a need to take measures to preserve the existing trees and shrubs. The plants also serve as an ornament of the landscape. Both legal and illegal cutting of trees would make a negative impact on the project site. 110/10 kV "Astana" Substation is located in the central part of Astana at the intersection of Omarov and Aymanov streets. Reconstruction of the substation is planned within the existing building of the Substation in accordance with the design assignment, so the negative impact on the flora and fauna in the project area is not expected. Measures to prevent the impact to the flora and fauna mean the compliance with the environmental legislation of the Republic of Kazakhstan.

16Assessment of potential noise pollution and mitigation measures

Sanitary rules governing the noise level in the populated areas are provided in SanPiN RK (Sanitary norms and rules) №3.01.035-97 ―Maximum november 2014 page 111

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permissible noise levels in residential and public buildings and residential territories." In addition to establishing the acceptable standards, the noise level is usually regulated with respect to the noise levels at specific locations, which are called "sensitive receptors" such as schools, hospitals, or, in the absence of such facilities in homes or at a predetermined distance from the noise source. It should be made a schedule of installation works so the noise would not cause any inconvenience near the property owners. Working operations should be carried out only during the day. The Contractor shall take all necessary steps: 1. Select a modern and well-maintained equipment and installations with the reduced noise levels, fitted with the appropriate built-in technologies and necessary damping devices; 2. Restrict the extremely noisy activities and movement of heavy equipment at a specific daily working time; 3. Observe the special restrictions of working hours near the populated and environmentally sensitive areas; 4. Provide the builders with the appropriate hearing protection devices (hearing protectors); 5.Avoid the operation of the machines at low speeds. Noise control measures Measures to limit the adverse effects of noise on the personnel and the local population should be carried out in accordance with the standard "Noise. General requirements for safety." Reduction of the sound pressure at the production site can be achieved by developing the following special events:  Traffic optimization and management;  Reduce to the extent possible, the traffic heavy-duty trucks;  Noise reduction at source (replacement of the noisy processes and mechanisms by the silent or less noisy);  Provide the special silencers for the units that generate excessive noise due to gases exhaust;  Reduction of noise at the route of its distribution propagation h (install the soundproof barriers, screens);  Use the personal protective devices for the hearing protection (earplugs, headphones, helmets).

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There are the standards according to which are established the permitted noise parameters for the various presence of people and animals, depending on the physiological processes and the type of activity under these conditions. In Kazakhstan, currently are effective the hygienic standards of noise levels in the workplace, approved by order of Acting Minister of Health of the Republic of Kazakhstan №139 dated March, 24, 2005, according to which the employees are not allowed to stay in areas with sound pressure levels above 135 dBA of any octave band. Permissible sound level for permanent jobs for the enterprise area is set at a level of 80dBA. There is no indication that the sensitive receptors would be potentially exposed to contamination of operational noise.

17Assessment of the potential impact on formation and disposal of the production waste, and mitigation measures

Solid wastes are formed as a result of the reconstruction project activities. These wastes can include: unprocessed timber (trees, frames, lumber) and processed timber (plywood, wood preservatives, compressed wood),paper and cardboard (from containers, packaging materials, specifications, drawings, reading material), bituminous substances, brick / stone, concrete, aluminum, plastic (of pipes, hoses, fittings, moldings, doors, windows, film, tare, containers, packaging), ferrous metals (steel bars, pipes, lighting, building elements, air tubes, drums, cans, bottles), gravel (soil, stone, concrete, asphalt, brick), non-ferrous metals (aluminum, copper, brass, electric wiring, electrical and plumbing equipment) and etc. All contractors and their subcontractors are responsible for reducing the amount of solid waste formed on the territory of the site. It is expected that the Contractor will plan and implement the entire operating activities so as to reduce the formation of solid waste. AEDCand CAEPCO (in the case of activities related to AEDC) will encourage the contractor /sub-contractor in the implementation of strategies to reduce solid waste:  After the introduction of the waste reduction practice: as far as possible, to provide the large lots supply and carefully monitor the unused materials;  When designing the landscaping and planting must avoid excessive clearing of trees. Instead, better to cut roots and branches, located directly on the job site;  Clarify the conditions for purchase orders, so the suppliers ship november 2014 page 113

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a minimum of packaging material together with the goods, or require from suppliers to remove and process the packaging materials after delivery (unless the packaging material can be reused several times);  Use the purchased materials optimally;  Use the structures of the elements manufactured outside the site;  Materials should be measured, that there were no surplus and the need to cut;  Provide garbage containers on the site area, to avoid the formation of prohibited dumps. These approaches help to save money, time, protect the environment by limiting the potential pollution, and save the material resources. During the reconstruction of the substation the environmental impact as a result of formation of solid waste is regarded as insignificant, because AEDCfollows the policy of waste minimization.

18Assessment of potential impact in relation to cultural, historical and archaeological assets and mitigation measures

Historical and cultural heritage requires the permanent protection from all dangers. Ensuring such protection in the Republic of Kazakhstan is a moral duty and determined by the Law dated 02.07.1992, № 1488-XII (amended on 29.09.2014) "On protection and use of historical and cultural heritage" as an obligation of all legal entities and individuals. Protectionof monuments of architecture, archeology and history is provided by the provisions of this Law of RK. The liability for safety of monuments is prescribed by the administrative law of the Republic of Kazakhstan. Violations of the law on protection of historical and cultural monuments entail the material, administrative and criminal liability foreseen by the law. The planned reconstruction of the substation on the territory of Astana does not affect the monuments registered by the bodies for monuments protection of the Committee of Culture of the Republic Kazakhstan, that have architectural and artistic value and scientific interest in the study of folk architecture of Kazakhstan. Reconstruction of the substation is planned within the existing building substation in accordance with the design assignment, so no impact on the cultural monuments, historical and archaeological assets is expected. Measures to prevent any impact on the cultural, historical and archaeological november 2014 page 114

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assets mean the compliance with the environmental legislation of the Republic of Kazakhstan.

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VII INFORMATION DISCLOSURE, CONSULTATION AND PARTICIPATION

19Interaction with related parties

AEDC adheres to the requirements of the legislation the Republic of Kazakhstan, ESMS, and its internal policies on public relations governing the information transfer and disclosure. Along with Safeguard Policy Statement of ADB and Policy on Mass Communication, managers of PESSHSAEDC should ensure that relevant information on social and environmental security has been provided in a timely manner at an accessible place, in a form and language understood by the people, which are affected, and other interested parties, including the public, so that they could provide meaningful information for the design and implementation of the project. Organizational structure of AEDC includes Departments of Public Relations responsible for coordination with the stakeholders and the public. AEDC has a policy on public relations to communicate with internal and external stakeholders, including employees, customers, corporate partners, investors, government agencies, civil society organizations and the media. Managers ofPESSHSof AEDC with the assistance of a design consultant, construction and renovation contractors, supervision and operation contractors, as well as other personnel carry out the important consultations with various stakeholders. Targeted consultation - a process that (i) starts at the beginning of the preliminary stage of the project and is carried out in the course of the whole project; (ii) ensures the timely disclosure of relevant and adequate information that is easily understood by the people, which are affected; (iii) is taken in an environment in which there is no threat or coercion; (iv) takes into account the gender requirements and specifically adapts to the needs of socially disadvantaged and socially vulnerable groups of the population;( (v) allows to take into account all the points of view of people that are affected and other interested third parties, when taking the decision on the design, measures aimed at protection from the impact, mutual use of benefits and development opportunities, and implementation issues.

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Managers of PESSHSof AEDC with the assistance of the design consultant, contractors for reconstruction and construction, supervision and operation and other staff keep contact with the public, groups or people which are impacted by the project, as well as with the public through the disclosure of information and consultation to ensure the awareness of participants which is carried out in accordance with the risks and impact on the population. The consultation process includes a number of formal and informal methods of consulting, such as the detailed interviews, public meetings, discussions with focus groups, etc. Examples of the main applicants, who must be consulted during the preparation and implementation include the following stakeholders: (i) Heads and members of the family, which may be affected; (ii) The families, which have effect on them and who belong to the socially vulnerable groups; (iii) Representatives of communities impacted by (including women); (iv) Local civil society and non-governmental organizations; (v) representatives of relevant government authorities and organizations. Women's participation is ensured by involving them to the public consultations at various levels and stages of project preparation and with the help of the preparatory work that allow them to attend such meetings. Preparatory workbegan with theconsultative meetingswith representativesof state bodies,AEDC representatives, the local population.In April and May2014were heldtwomeetings anddiscussedissues related to thereconstruction ofthe substation with the followingparties: • Departmentof Energyof Akmola Oblast Akimat; •Department of Ecology ofAstana; • Committeefor Construction,Housing and Utilities; • AEDC Representatives •Local communitiesand private individuals. No problems or concerns were raised from the local communities and other stakeholders that will interfere with the reconstruction of the existing substation were found. AEDC has the Stakeholders Involvement Plan, which is obligatorily to be performed. SEP provides the detailed data on the participation of stakeholders in each of the regional offices of AEDC. In particular, SEP determines the type of information delivered to the stakeholders and for public,places for disclosure of the environmental and social information and november 2014 page 117

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negotiation, the contact details of designated staff of AEDC, mass media, attracted media.

20Scheduled disclosure of information

Some information on environmental and social issues for the interested parties and public is available through: (i) posting the data on the corporate website; (ii) placing on the corporate publications, regional and national newspapers, as well as information leaflets and posters; (iii) (iii) public meetings, hearings, discussions, and providing information through TV and radio.Also the information can be shared through mailing lists, unions and associations. AEDC monitors the implementation of the measures of ПВЗС, and includes the results of the actions to the Corporate Report on the PESD. AEDC reveals through the mass media its annual Audit and Financial Reports, announcements on public hearings, the proposed tariffs for services, norms of technical losses, as well as an annual report on AEDC operations. Announcement of the date and place of such hearings are published in newspapers of general circulation in the region. AEDC cooperates with the regional administration (district towns and the city) by means of telephone communication, and informs them of upcoming meetings and discussions. AEDC is also working with the NGO "Kazakhstan Association of Electricity" which is responsible for the energy sector’s issues. No special publications on the environment and social issues AEDC did. However, the company specializing in the analysis of environmental impacts attracted by design companies engaged by AEDC, fulfill the requirements for the organization of public consultations within the framework of EIA report, to provide the interested parties with the opportunity to review the analysis and feedback.

21Comments and responses

During the consultations, public hearings and meetings all those affected and interested parties have the right to express their comments and ask questions. In its turn, the initiator of the project will provide a response to the comments received and consider all comments on the project and mitigation measures on the environment, with special attention paid to the needs and concerns of the socially vulnerable groups, including women and november 2014 page 118

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children, the poor, the disabled population, older persons and indigenous peoples. Public consultationshave providedthe detailed information onthe planneddesignfeatures,its expectedactionsand pre-project dataon the environment. During the consultationsfor the project development and replacementof power transformers, allinterested partieshad the opportunity toask questionsandmake suggestions. Allrelevant andinteresting questionswere answeredby representatives ofthe Government bodies and AEDC engineers: PavlovA.V.- Chief Engineer ofJSC "AEDC", LamonN.M.- Chief Engineerof AkmolaMES, GolikovA.L.- Chief Engineerof the Project, Martynenko V.A.- Head ofEnergy Department of Akmola Oblast Akimatand the Departmentof Ecologyin Astana.

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VIII GRIEVANCE MECHANISM

22 Levels of settlement of grievances

AEDC considers the complaints in accordance with the Law on the Procedure for considering the complaints of individuals and legal entities No. 221-III, dated January,12, 2007 (Act as amended was adopted on July,27, 2011). The approved term for consideration and discussion of complaints is 15-30 days, depending on the complexity of the process. In AEDCwas established the Commission for the resolution of complaints, which includes an equal number of trade-union representatives, and representatives of the AEDCadministration (appointed by the President of AEDC). The Commission considers the complaints and disputes relating to labor relations. Any disputes, misunderstandings or disagreements in many cases are resolved with the help of an informal discussion with the direct supervisor of a person who wrote the complaint or the Commission on resolves the complaints and in this case, no written complaints aresent to the management. At the level of MES / RES the regular meetings are held with the participation of trade unions, which review and discuss all outstanding issues, disagreements and complaints.In most cases, the complaints concern to the supply of personal protective equipment (boots, special clothing) of a wrong size, delay in the provision of personal protective equipment (in most cases a delay of 1-2 days arises due to the need to deliver the clothes from the warehouse), wrong calculation of the wage and other issues related to payment, etc. Department for Labor Resources informs the new employees on procedures for complaints and call them to share the problems also with the Department of Human Resources and tries to find an informal resolution, thus facilitating the solution of complaints. According to the AEDC management within the whole period of AEDC’ s activities, no single case of the judicial examination of any disputes between employees and management has occurred. Also, in the process of resolution of complaints the trade-union actively participates that seeks to promote to the amicable and informal resolution of complaints. Human Resources Group periodically visits MES / RES, during which it carried out the discussions with management and staff of all outstanding issues and complaints. Moreover, in a situation when the Department for Labor Resources identifies certain problems that may prevent the smooth operation of the affiliate (e.g., staff rotation, etc.), they visit a particular affiliate and discuss the situation with the employees of the company.In some cases, it is arranged an informal interview of employees and analysis november 2014 page 120

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of results. Questionnaire is anonymous, so all workers can express an objective opinion on the situation and make suggestions on ways to improve the situation. Department for Labor Resources adheres this approach when necessary to prevent conflict. In general, in 2012, 34 complaints were received by AEDC. Complaints regarding the tariff increases, the use of differentiated tariffs, installation of metering equipment, theft of electricity (madeby anonymous person), the procedures for concluding contracts for electricity, issuance of technical documentation, etc. All complaints received were addressed and resolved. No complaintswere received regarding the environmental and social issues.

23Coordination with the complaints, accounting and reporting

In addition to the creation of the Grievance Committee, the points to receive complaints will be established at the local level in order to get help, to receive a report or send complaints that received from affected persons and the public. Affected persons or other interested persons may attend, call, send a letter or fax to any of the Complaints Reception Points to register their complaints and suggestions regarding the land use, social and environmental aspects of the project (including, but not limited to violations caused by traffic flow, noise, invasion of foreign territory, etc.). Grievance Committee, Complaints Reception Points at the local level must keep a logbook for recording the complaints and will monitor their status. Complaint forms are available in these areas in order to facilitate the writing of complaints. Information on the resolution of the complaint will be summarized in reports submitted to ADB.

24Disclosure of the complaint process

All contact details of the assigned persons and a detailed description of the mechanism of complaintsconsideration will be published in the print media, and will be distributed in the form of brochures on AEDC website. Such mechanisms to address complaints will be presented during the public consultations and informal meetings on the project. Existing NGOs can also serve as a tool to distribute the information on the procedures for complaints and promote awareness rising in the project area. Information on the dispute resolution process will also be available from Grievance Committee, as well as in the offices of the designated person at the local level. november 2014 page 121

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IXENVIRONMENTAL AND SOCIAL PLANNING AND MANAGEMENT

25 ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN (ESMP)

For the projects of electricity transmission and/or distribution of category B, AEDC with the assistance of consultants of the third party LLP «TITECO» (Appendix 3) has prepared the Initial Environmental Examination (hereinafter IEE), including ESMP. IEE has been prepared in accordance with the Safeguard Requirements of 1 (SR 1) of Annex 1 PSP of ADB 2009. IEE describes the researches needed to determine the potential impacts on the environment. IEE has been prepared and will be made public in accordance with the ADB’s Public Information Policy- 2011. IEE will be available to the public (in English and local language) prior to the Project approval. Based on the Environmental Impact Assessment of the project, it was developed a Plan of Environmental and Social Management (PESM) within the framework of the project on mitigation of the adverse effect on the environment. PESM indicates the adverse effects and possible mitigation measures, the requirements for monitoring, timing, as well as the list of authorities, which are responsible for PESM implementation (Refer to Annex 1 – Environmental and Social Management Plan). The resulting matrix of environmental and social impact and the mitigation measures are presented below in Table 23.1, which provides a detailed environmental analysis of the project sites and review of the environmental impacts of the standard power transmission projects. AEDC will document any unintended consequences of any project activity.

PESM implementation

The total PESM of the project is given in Annex 1, which defines possible and cost-effective measures to be taken in order to reduce potential adverse effects to an acceptable level in the reconstruction of 110/10 kV Substation "Astana". There are given the appropriate mitigation measures offered for each potential impact, including the detailed information about the responsibility of the parties for the implementation of mitigation measures and supervision.

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Table 25.1: Potential environmental and social impacts Environmental Potential impact Impact type Level of impact parameters None Low Average High Topography Changesinsurface Direct/Local/ X featuresand the Irreversible existingaesthetics due to the works Climate Lack ofclimateimpact Direct/Local X / Irreversible Air Quality Project will havea Direct/Local X negligible impact onair / Reversible quality during the reconstruction stage Noise Noisefrom Direct/Local X generalreconstruction / Reversible works Quality Water discharge from the Direct/Local X ofsurface work site / Reversible andground Domesticwaste waterfrom Direct/Local X water the workingsite / Reversible Soils Damage caused byseismic Direct/Local/ X andGeology activity Reversible Terrestrial Loss ofvegetation Direct/Local/ X ecology Irreversible Terrestrial Disturbance of local Direct/Local/ X fauna faunaduring the Reversible reconstruction Health care Fires, explosions and Direct/Local X otheraccidentsat the site/ PZ Exposure to Direct/Local/ X electromagnetic fields Long-term Labor A positive impact onthe Direct/Regio X availability of jobsduring nal thereconstruction stage. Job opportunities for local

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Environmental Potential impact Impact type Level of impact parameters None Low Average High workers. Jobsorassistance providedto women Cultural Archaeological , Direct/Local/ X objects historicalorcultural Reversible significantobjectsare not affected during the substation reconstruction Formation of The possibility of Indirect/Loc X Solid waste contaminationof surface al/ andgroundwater Reversible

Land Direct/Local X acquisition and resettlement Indigenous Direct/Local X Peoples

Contractors / subcontractors must comply with all applicable national, state and local environmental laws and regulations, social issues and obligations. As mentionedabove, AEDC adheres a policyof non-interferenceto the workof contractors.It is expected thatthe contractors will employ 12 employees for the period ofsubstation reconstruction and 2AEDC technicalsupervisors will be involved. The Contractor creates a functional system to manage the impact on the environmental and social spheres, including all the arrangements for monitoring and impact mitigation outlined in the Environmental and Social Management Plan (ESMP).

Disaster clean-up operations / emergency response management The Contractor shall appoint an emergency response team to respond to the potential environmental incidents. Annex 2 provides more detailed information. AEDC manager for PESSHSis responsible for internal monitoring of ESMP implementation, consideration of reports of technical supervision, pays attention to the state / local requirements, and defines the necessary november 2014 page 124

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measures.

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X CONCLUSIONS AND RECOMMENDATIONS

Land Acquisition The conclusions were made according to the results of the Initial Environmental Examinationof the project for reconstruction of 110/10 kV Substation "Astana". Land plot under the existing production facility and infrastructure isowned by AEDCor rented in accordance with the provisions of the laws of the RK. Land plot is leased from the State for 49 years, and AEDC pays a rental fee stipulated by the contract. The land lease does not include any use of the land plot owned by a private individual / private entity.

Indigenous Peoples/ethnic minorities According to the 2009 census, the population of Kazakhstan consists of more than 100 ethnic groups (nationalities), including Kazakhs (63% of the total population), Russian (24% of the total population), Ukrainians, Uzbeks, Uighurs, Tatars, Germans, etc. The ethnic groups, other than the principal, settled in the area many years ago. All ethnic groups are fully integrated into the Kazakh majority, having an equal access to land and natural resources, health, education, means of living and social security. None of these ethnic groups does not show the cultural and social identity from the rest of society in Kazakhstan, that could be appropriate to ADB's definition on Indigenous population, as defined in ADB Safeguard Policy Statement (paragraph 6, Safeguard Requirements 3 of ADB's SPS - 2009 ). This statement is also supported by the documents and reports submitted by international organizations implementing projects in the Republic of Kazakhstan (including ADB–supported projects), as well as during negotiations with AEDC.

Labor and working conditions, Corporate Social Responsibility AEDC policy in the social sphere is designed to increase the level of social protection of workers and their families through the provision of social assistance, support, warranties, and cover (i) development of appropriate policies and mechanisms; (ii) providing training, improvement of professional skills; (iii) providing compulsory insurance for employees; (iv) preliminary and periodic medical examination of workers; (v) providing financial aid to workers in certain cases (child birth, death in the family, help to large families, families with disabled children, etc.); (vii) continuous monitoring of working conditions and preparation of relevant reports, november 2014 page 126

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etc.Particular attention is paid to supply for the workers of special clothing, personal protective equipment, as well as to provide medical examination for the staff. The company provides the employees with compulsory social insurance and employers' liability insurance against injury or disease, received by employees during the execution of their duties. Collective agreements in subsidiaries are concluded between the employer and employees. Training of managers, specialists and workers (including various training courses on occupational health and safety, industrial safety, improvement of skills and the acquisition of related disciplines) is organized in the training center of the company. To improve the educational level of the staff, the company applies a system of incentives and provides educational scholarships and compensation for travel.

Disclosure, Negotiation and Participation: Stakeholders Involvement AEDC adheres to the requirements of the legislation of the Republic of Kazakhstan, PESA and its internal policies on public relations governing the information transfer and disclosure. Organizational structure of AEDC includes Departments of Public Relations, responsible for working with the stakeholders and the public. AEDC has a policy on public relations to communicate with internal and external stakeholders, including the employees, consumers, corporate partners, investors, government agencies, civil society organizations and the media. Companies specializing in the analysis of environmental impacts, attracted by the design organizations hired by AEDC, fulfill the requirements for the organization of public consultations in the EIA report, to provide the interested parties with the opportunity to review the analysis and feedback.

Resolution of complaints AEDC has a mechanism for resolving the internal and external disputes and the complaints. AEDC uses an internal communication system / intranet to give employees the possibility of submitting their written complaints. If a disagreement or agreement is related to the performance of labor duties, a complaining employee writes a letter to the head of the trade- union, and the trade-union representative discusses then and resolves issues with the foreman and superiors of the employee. To submit a proposal, the employee shall prepare a draft memo, which is sent to the heads of appropriate structural units, for consideration and decision making. No time limit for resolving disputes is indicated, but it is desirable to make efforts to resolve the issue as soon as possible and without delay. november 2014 page 127

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Gender issues Policy and the concepts of human resources, supported by AEDC are not contradict to the laws and regulations of the Republic of Kazakhstan, and ensure compliance with the following principles: (i) do not differentiate salary and benefits among employees of both genders of the same professional category and (ii) to provide maternity leave and allowances for the women for childbirth. AEDC provides the equal employment opportunities for both men and women. Employment, maternity leave and other working provisions are developed in accordance with the Labor Code of the Republic of Kazakhstan. There are no positions/ jobs that are prohibited to employ a woman. Women are employed in almost all groups of employment and subsidiaries. The above is also true for AEDC.

Organizational responsibility, resources and capacity At present the Environmental and Social Management System operates in AEDC. Some units of AEDC (for example, the Department of Public Relations, Division of Occupational Safety and Health, Human Resources, etc.) cover some environmental and social problems. As for AEDC activities it was not required any land acquisition, there is no separate division to address the issues of land acquisition and resettlement, and coordination with the Government on these issues.

Environmental and Social Management Plan Environmental analysis, impact assessment, definition of mitigation measures, monitoring of environmental conditions are drawn up in accordance with the laws of the Republic of Kazakhstan, and executed by the third parties engaged by AEDC under the contract (in most cases the project organizations attracted by AEDC conclude the subcontracts with the specialized environmental organizations for the development of EIA and IEE). With regard to social issues and land use, mostly such issues are solved by Department of Human Resources and Legal Department.

Corporate ESMS. CorrectiveAction Plan According to ADB requirements, AEDC has implemented Environmental and Social Management System (ESMS) that meets the requirements of the ADB SPS (2009) for the implementation of the investment plan of AEDC, funded by the ADB. Environmental and Social Management System focuses on the roles and responsibilities of CAEPCO and AEDC, and also provides guidelines and november 2014 page 128

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procedures for managing the environmental and social risks of the electricity distribution business. The following measures to increase the capacity and conduct trainings are recommended to improve AEDC’s production activities, as well as to solve the environmental and social issues within the proposed investment by the relevant employees:  Training for AEDC staff in accordance with the requirements of ADB SPS (2009), Social Protection Strategy (2001), Gender and Development Policy (1998) and PublicCommunication Policy (2011), the requirements for monitoring and reporting of ADB;  Training for AEDC staff in accordance with the requirements of ISO 9001 (Quality Management Certificate), ISO 14000 (Environmental Management System), ISO 18000 (Occupational Health and Safety), 50001 (Energy Management).  Maintain the relevance of the information on the corporate website of AEDC which serves as a platform for providing information on the activities carried out by AEDC (including the environmental and social activities), as well as for the disclosure of documents;  Organization of periodic public consultations (involving the government agencies, stakeholders, NGOs and the public) to distribute the information about AEDC’s environmental and social events, and reporting on the implementation of environmental management systems and social environment;  Ensuring the availability of boxes of "complaints and suggestions" in pay points of AEDC (AEDC - Energosbyt) and in other appropriate locations, as well as the proper functioning of the window "question-answer" on the corporate website to allow the stakeholders and the public to ask their questions; ensure a mechanism to provide answers and explanations to all questions. The project has no negative impact on the physical, environmental, social and economic environment during the reconstruction of the substation and its operation. Since there are no environmentally sensitive areas in the project area, there are no a potential risk of harm to the environment. 110/10 kV "Astana" Substation already exists, and this project is a project for improvement. Temporary environmental impacts are expected during the reconstruction, but they will be minimized by proper planning, good design and implementation of the proposed mitigation measures. The project is classified as Category B with respect to the impact on the environment and as shows the prepared environmental analysis, the november 2014 page 129

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project has no significant effect on the environment. In this regard, no further inspections are required. Plan on environmental management is prepared with the description of mitigation measures and monitoring actions to be taken during the preliminary phase, the phase of reconstruction and maintenance, as well as at the decommissioning phase. Special environmental provisions that are related, but not limited to ESMP: (a) erosion control, air and water quality control, (b) ensure security (c) basic and ongoing monitoring of noise and vibration in the substation territory, (d) basic and ongoing monitoring of quality of air, water and ecosystems, (e) public relations; Control and monitoring of the environment. It is recommended a basic and ongoing monitoring and review of mitigation measures during the detailed design phase. Strengthening the capacity for environmental management. It is recommended a training program for selected staff in order to improve the management activities.

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Annex 1 ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN Project Potential Offered mitigation Monitoring Measurement Institutional Execution operation impact measures scope and responsibility Schedule /phase periodicity Design and preliminary phase Design of the Inconveniences Provide for safe and Proximity to Technical JSC "CAEPCO", During transformer to adjacent sufficient removal of residential / JSC"AEDC", preparing a specifications - substation areas and obstacles, minimize the office buildings detailed design once Detailed Design modernization people due to activities in the areas and other consultant the disassembly adjacent to residential / structures of and assembly office buildings operations Noise impacts Inconveniences Make a schedule of Noise level Noise level is JSC "CAEPCO", JSC During associated with to neighboring installation works so the determined in "AEDC", preparing a the supply of owners during noise would not cause any the tender detailed design Detailed Design equipment transport and inconvenience. Perform documents - and tender consultant storage / on-site the works only at the once documentation installation daytime. Equipment Impact on the Usinga suitable material Design adapted Review of JSC "AEDC" During which equipment, resistant to weather to the harsh technical preparing a Detailed Design undergone the wires, cables, conditions weather specifications at detailed design consultant changes due to equipment for conditions preliminary and tender severe weather dismantling/ stage of the Supplying company documentation conditions assembly project - once operations

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Project Potential Offered mitigation Monitoring Measurement Institutional Execution operation impact measures scope and responsibility Schedule /phase periodicity Explosions / Security risks Prepare the design Compliance with Tender JSC "AEDC" Detailed During fires in solutions, which should requirements documents Design consultant preparing a substations include the modern fire for the should refer to detailed design

fighting and alarm prevention and the detailed and tender systems control of fire specifications - documentation 1 time Invasion into Loss of precious Avoid the invasion by Loss of habitat of National JSC "AEDC" During the precious ecological selecting a place of an flora and fauna preparing a legislation on Detailed Design ecological areas values/ damage existing object detailed design environmental consultant to valuable protection - 1 species time Reconstruction phase Transportation Safety on roads, On the transportation Visual inspection Once JSC "AEDC" At and installation health and route indicate any reconstruction Detailed Design of equipment safety of obstacles before phase consultant workers transportation Placement and Noise and Technology and selection Visual Construction JSC "AEDC" At installation of of equipment are inspection, the technologies reconstruction vibration Detailed Design equipment designed to minimize the methods used, and equipment phase consultant ground disturbance and equipment that make testing minimal ground disturbance - once at the beginning of reconstruction phase

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Project Potential Offered mitigation Monitoring Measurement Institutional Execution operation impact measures scope and responsibility Schedule /phase periodicity Throwing the Contamination Utilization of recycled Number of Every week JSC "AEDC" At packaging of receptors materials through the recyclables / Detailed Design reconstruction materials (earth, water, processors, send the Number of non consultant phase air) waste that cannot be recyclable waste reused for disposal the (kg) agreed waste collection Electric shock Death or injure Security fences around Proper Every week JSC "AEDC" At of workers or substations. installation of Detailed Design reconstruction the population Installation of warning fences and consultant phase signs. warning signs A clear limitation of the reconstructing area to prevent an unauthorized access Construction Solid Waste Utilization of recycled Location and Acceptablelocat JSC "AEDC" At waste Management materials through the volume (m3) ion-every2 Detailed Design reconstruction processors, send the weeks consultant phase waste that cannot be reused for disposal the agreed waste collection Storing of old Contamination Secure safely the old Location of Storageof old JSC "AEDC" At transformers of receptors transformers(includingoil allplaces of transformers in Detailed Design reconstruction and other (earth, water, used materials AEDC consultant and operation materials (if air) inoldtransformerswhich do storage; warehouse as phase any) notcontainPCBs) ACCIDENTALrep the reserve orts(typeof equipment. spilledmaterial, quantity,

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Project Potential Offered mitigation Monitoring Measurement Institutional Execution operation impact measures scope and responsibility Schedule /phase periodicity measures takento clean up the spilledmaterial, measures to preventspills) Pollutant Air pollution Regular and timely Maintenance of as necessary Contractor At emissions from accounting of vehicle vehicles by the reconstruction vehicles movement; contractors phase Use of good quality fuel

Inconveniencee Infringement on Contract clauses that Contract clauses Include the JSC "AEDC" At xerted to the theneighboring strictlyprohibit the effective reconstruction Detailed Design property territories improperextension ofthe management phase consultant located nearby reconstructing site methods- 1 anddetermine time theexacttechnology of works performance Inadequate Maximizing of Implementation Appropriate Submissionof JSC "AEDC" At monitoringdurin adverse effects ofeffectiveenvironmental contractualcheck duly reconstruction Detailed Design g the monitoring and listsandmeasures completedcheck phase consultant reconstruction reportingusing alist ofall takento lists for each contractualenvironmental eliminate them area-at requirements leastonce a month

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Project Potential Offered mitigation Monitoring Measurement Institutional Execution operation impact measures scope and responsibility Schedule /phase periodicity Appropriate contractual Report on Submission of a clauses to compliance properly issued ensuresatisfactory relatedto the compliance implementation of the environmental report for each contractual environmental aspectsof the contract - at actions contract least once month

Removal Inconvenience Notify in advance the Violation of Technical JSC "AEDC" At ordamage to to population populationof the time otherindustrialan specifications - reconstruction Detailed Design otherutilities andduration of the d social onthe basis of phase consultant enterprise malfunction activities/public complaints complaints Immediately rehabilitate the public in order utility to eliminatethe inconveniences Works Noise Restrict the performance Works schedule Reconstruction JSC "AEDC" At Schedule interferencecaus of worktodaytimeonly, in accordance Detailed Design reconstruction ed to the inform localpeople on the with the consultant phase neighboringresi works schedule planneddates dents

Transportation Inconvenience Transport loading and Availability of technical JSC "AEDC" At and storage to population unloading the designated specificationsof Detailed Design reconstruction ofmaterials, ofmaterialsshould areasat the contracts-on a consultant phase transportation notcause any sitesfor monthly basis and disposal of inconveniences tothe temporarywaste november 2014 page 135

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Project Potential Offered mitigation Monitoring Measurement Institutional Execution operation impact measures scope and responsibility Schedule /phase periodicity garbage population collection. andwaste Building materialsshould Timely removal be storedin closedareasin ofwasteto the order to ensurethe agreed disposal groupingof such materials places by the environmentallyfriendly way, not causing any inconvenience

Occupationalhe Injuriesand Terms of the Contract clauses Rules JSC "AEDC" At althandsafety illnessof workers contractdetermining (number of onoccupational reconstruction Detailed Design andthe theminimum requirements accidents healthandsafety phase consultant population for the andcompletelylos - quarterly reconstructionsites. t work daysdue to injuriesand The Contractor illnesses) shallprepare andimplement a plan foroccupational healthand safety

The Contractor shallorganizeawareness- raising activitiesof health and safety. Operationandmaintenancephase

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Project Potential Offered mitigation Monitoring Measurement Institutional Execution operation impact measures scope and responsibility Schedule /phase periodicity Transformeroils Soil Transformer oilshould be Items from the Checking the JSC ―AEDC‖ During pill contamination stored insuitable Operation and storage operation

containerslocated maintenance conditions– 1 onimpermeable surfacesin manuals time closedstorehouses Insufficient Injuries and Development of guidelines Use of Level of JSC ―AEDC‖ During provision illnessesof foroperation and appropriate expertise forthe operation

ofhealthand employees/staff maintenance, using technologies(lost use of safety of appropriate technologiesto work days due suchtechnologie personnel/empl minimize therisk toinjury or sin crisis oyeesinthe illness) situations-once course of a year operation Preparean action planfor Trainingprogram Numberand firesand training the s/alertprograms percentage of personnel to implement the the planfor emergency involvedstaff response /workers-once a year Instructing the Injury/deathof Familiarizationwith safety Training Numberand JSC ―AEDC‖ During case ofelectric staff/population rules when working with programs/alertpr percentage of operation shock, electricityin the project ograms to be the area performed by involvedstaff the whole staff /workers

Lack ofperiodic Reducingenviron Training of AEDC and Training Numberand JSC ―AEDC‖ (possible During environmental mental and CAEPCO personnel in programs/alertpr with the assistance of november 2014 page 137

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Project Potential Offered mitigation Monitoring Measurement Institutional Execution operation impact measures scope and responsibility Schedule /phase periodicity monitoring social environmental ograms to be percentage of the consultant) operation requirements monitoringof the project performed by the the whole staff involvedstaff /workers

Maintenance Leakage of Ensure compliance with Maintenance of ProperGuidance JSC ―AEDC‖ During and repair of chemicals and the specifications and equipment(the onmaintenance operation the equipment gases into the limits established by local number of and repair receptors (air, law inspections, ofequipment– water, earth) reports on once a quarter breakdowns, etc.) Oil leaking Contamination Use in transformers the oil Oil transformers National JSC ―AEDC‖ Duringoperatio of soil / adjacent without PCBs. should be legislation, best n water bodies Proper handling of handled only by practices in the transformers, recycle certified persons field of waste oil and processors environmental protection Decommissioning phase Contamination Contamination Proper handling with Plans for Availability of JSC ―AEDC‖ At of soil or of soil / adjacent transformers, disposal of decommissioning plans, decommissioni

groundwater water bodies oil wastes of the project: agreements ng phase

during the The proposed with the substation methods of disposal site decommissionin disposal, g recycling possibilities november 2014 page 138

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Project Potential Offered mitigation Monitoring Measurement Institutional Execution operation impact measures scope and responsibility Schedule /phase periodicity considered by the operation period

Identification of Availability of approved approved processing processing entities or places entities, of hazardous agreement with waste them

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ANNEX 2

DISASTER MANAGEMENT / EMERGENCY RESPONSE

AEDC and the contractor shall appoint emergency teams to respond to potential environmental incidents. The purpose of the rescue group is as follows:

 Personnel protection against further hazards  Conversion of the site in a safe condition,  Stop, control or containment of emissions of hazardous materials on the construction site,  Control of cleaning the hazardous materials after emissions  Handling, packaging, storage and disposal of materials as a result of leakage,  Disinfection of the construction site and equipment,  Ensuringand uninterrupted andqualitypower supply to consumers,  Fast and accurateexecution of instructionsand orders of thedispatcher on dutyto conductthe network mode, make routine switchingin both the normalandemergencymodes,  Preparation ofjobs, admission of personnelto work, timely commissioning ofequipmentafter completion of works,  Performsomeoperation and maintenanceworksat substationsby the emergency response teams.

The construction and rescue team will be supervised by a Team Leader for emergency response, a representative of the contracting organization. The purpose of the team leader for emergency response is to provide:  General management and control of the emergency,  Control of safety and supervise the staff at the workplace, members of the rescue group and the public,  Technical supervision and responsibilities to assess, reduce and clean up the spills; disposal of hazardous waste, as well as decontamination of equipment and grounds,  Coordination with external response groups  Notify AEDC management on the environmental incidents  Protection of facilities at the work site. Emergency response teams work at the around the clockschedule approved by AEDC management, the shift duration is 24 hours(from08- 00am till 08-00am of the next day). Emergency response teams are based on 110 /10kVAstana Substation and have the robust telephoneandradio communication meanswith the dispatcher. The vehicle of the emergency response teams should be equipped november 2014 page 140

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withradioto communicate with thedispatcher on duty, as well as a set of necessarytools, protective equipment, materials, first aid kits, fire extinguishers.The vehicle should be equipped with the protective equipment anddevicesthat are transmitted between the shifts and confirmed by a record in theoperating log of the emergency response teams. Evacuation procedure Evacuation procedures should include the mechanisms used to alarm on the evacuation from the work site. These mechanisms should include the means by which the evacuation will be started and determined the evacuation routes, areas for gathering and means for accounting the staff.It is recommended that an alarm system to be used by a rescue group, not in an attempt to gather the employees in various master points. Personnel responsible for evacuation should be specified in the plan, including the case of the appointment of responsible persons during periods of overtime shifts and lack of primary coordinator for emergency situations. Evacuation routes and master points will be developed in collaboration with the staff of "AEDC."

Contact information Communication platform should include:

 Intercomsystems for immediate notification of an emergency and instructing the staff to respond.  Alarm or notification system to provide immediate warning of the site personnel of an emergency such as a fire.  External telephones and wireless communication devices to call for the emergency assistance from the rescue institutions in emergency situations.

Will be a list or a matrix of contact information for regulators and resources for emergency response. Relevant authorities and contact information will be determined by the coordinator for emergency response. It should be given the contact information of the following institutions:

 National Centre for Emergency Response,  Any State Pollution Control Board,  Fire / Police or any local agency, etc.

In addition to the corresponding numbers of institutions, the contact information must be provided to the head of the rescue team or his deputy. The Contractor shall determine a sufficient number of staff to ensure the safety of several shifts and rapid response to emergencies.

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ANNEX 3:

LIST OF INVESTMENT ACTIVITIES PROHIBITED BY ADB

The following activities are not eligible for funding from the Asian Development Bank:

1. Production or activities related to hazardous or exploitative forms of forced15or child labor;16

2. production or trade of any product or activity that is illegal under the laws of the host country or international conventions, agreements, or subject to international phase-out or is prohibited, such as (a) pharmaceuticals,17 pesticides and herbicides,18 (b) ozone-depleting substances,19 (c) polychlorinated biphenyls20and other hazardous chemicals,21 (d) wild animals or wildlife products regulated under the Convention on International Trade of Endangered Species of Wild Fauna and Flora,22 ((e) cross-border trade of wastes or by-products;23

3. Production or trade of arms and ammunition, including paramilitary materials;

24 4. manufacture or sale of alcoholic beverages except beer and wine;

5. manufacture or sale of tobacco products;

6. gambling, casinos and equivalent business;

15Forced labor means any work or services that are not performed voluntarily, that is performed by persons under threat of force or punishment. 16Child labor means the employment of children whose age below the statutory minimum age of employment in the country, or the employment of children is in conflict with the International Labour Organisation Convention №138 "Convention on the minimum working age» (www.ilo.org). 17 List of pharmaceutical products discontinued or banned can be found at http://www.who.int 18 List of pesticides and herbicides discontinued or banned, can be foundhttp://www.pic.int 19 List of chemical compounds, reactive and deplete stratospheric ozone, resulting in the formation of ozone holes is listed in the Montreal Protocol, together with the dates of the target reduction and phasing out. Information is available on the websitehttp://www.unep.org/ozone/montreal.shtml 20Group of highly toxic chemicals, polychlorinated biphenyls were found in oil-filled electrical transformers, capacitors and switchboards in the period from 1950 to 1985. 21List of hazardous chemicals can be found at http://www.pic.int 22The list can be found on the website http://www.cites.org 23By the definition of the Basel Convention. Seehttp://www.basel.int.

24 This does not apply to project sponsors who essentially do not participate in these events. Not substantial borrowed funds of the activity are ancillary to the main activities of the project sponsor. november 2014 page 142

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25 7. Production or trade in radioactive materials, including nuclear reactors and their components;

26 8. production, sale or use of unlinked asbestos fibers;

9. commercial forest harvesting operations or purchase of forest harvesting equipment for use in the primary moist tropical forests or old-growth forests, and

10. marine and coastal fishing methods, such as large pelagic driftnet fishing nets and fishing nets of a fine mesh, dangerous for vulnerable and endangered species in large quantities and are harmful to the marine biodiversity and habitats.

25 This does not apply to the purchase of medical equipment, quality control (measurement), and any equipment, which ADB considers the radioactive source as a minor and largely protected.

26This does not apply to the sale and use of protective coatings connected asbestos -cement protective covers where the asbestos content is less than 20%. november 2014 page 143

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ANNEX4

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ANNEX 5

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