Integrated Safeguards Datasheet s13

INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE

Report No.: 83147 Date ISDS Prepared/Updated: I. BASIC INFORMATION 1. Basic Project Data Country: Senegal Project ID: P143605 Project Name: Taiba Ndiaye Independent Power Producer Project Task Team Leaders: Demetrios Papathanasiou and Manuel Berlengiero Estimated Appraisal Estimated Board Date: December 17, 2013 Date: Managing Unit: AFTG2 Lending Instrument: Partial Risk Guarantee Sector: Thermal Power Generation (100%) Theme: Infrastructure Services for Private Sector Development (100 %) Is this project Yes [ ] No [x] processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) Project Financing Data (in USD million) Total Project Cost : 166.00 Total Bank Financing: Total Cofinancing: Financing Gap: Financing sources Amount Borrower/Recipient 0 (US$m.): IDA (US$m.): 40.00 IFC (US$m.): Other financing amounts by source (US$m.): Private sector and Debt Financiers TOTAL 166.00 Environmental A-Full Assessment Category: Is this a transferred Yes [ ] No [x] project? Is this a repeater Simple [x] Repeater [ ] project?

2. Project Development Objectives

The project development objective is to increase the power generated by Independent Power Producers 3. Project Description

The project consists in the construction and operation of a greenfield thermal power plant and auxiliary installation with an installed capacity of 96 MW and a guaranteed capacity of 70 MW. Four of the five engines will operate in continuous mode; the fifth one will serve as backup during maintenance or abnormal

1 operations. The plant will run continuously, with an annual availability rate of 91% for a total production of 558 GWh.

Taiba Ndiaye will be using HFO as its fuel for the first years of its operation, as the Government is planning to have natural gas available in the country in sufficient quantities in coming years. The Heavy Fuel Oil (HFO) will be trucked-in from Dakar mainly with private transportation vehicles (up to about 70 vehicles per day, 11 fuel delivery trucks per day). Once unloaded, the heavy fuel will be treated by centrifugation before being stored in tanks planned for that purpose. This mechanical processing will help improving the fuel quality by extracting the residues (sludge) and to enhance reliability for an optimum functioning of the engines. A combined cycle system will allow recycling the heat generated by the combustion engines to generate steam and power a steam turbine generator, allowing an efficiency gain of 4% to 6% of the total output of the engines.

The power plant has a footprint of 4.5 hectares and will be connected to the existing Tobene 220/90kV substation owned and operated by SENELEC which is being refurbished and is located less than 100m away from the project site.

Power will be sold to SENELEC on the basis of a 20 year contract. This contract can be renewed according to future energetic challenges facing Senegal. This power plant project is part of more ambitious local industrial development plans, initiated by SENELEC in 2011 over an area of 50 ha, of which includes the Tobene power plant.

The project will be developed by Tobene Power SA (TP), a Special Purpose Vehicle (SPV), incorporated in December 2011 under the laws of Senegal. It will be owned [90 percent] by Melec PowerGen Services S.A. (MPG), a subsidiary of Matelec Group of Lebanon, and [10] percent by IFC InfraVentures.

4. Project Location and salient physical characteristics relevant to the safeguard analysis (if known)

The project will be implemented in the Taiba Ndiaye commune (Tivouane District about 90 km north-east of Dakar) on a 4.5 ha surface area, and more than 500 m away from the nearest village of Miname. The site is located in the ‘’Northern Coast’’ groundwater system which is composed of both permeable sandy and limestone layers; the water table is about 50 m, and there is no surface water body in the surrounding areas. Therefore, the only concern will be the pollution of the aquifers through the incidental infiltration of pollutants during the exploitation, namely in case of failure of the sewage/used oil treatment system On biodiversity aspects, only three partially protected plant species and two protected bird species (the red-billed hornbill and the African Grey Hornbill) have been identified in the influence area of the project.

5. Environmental and Social Safeguards Specialists

Maman-Sani Issa, Sr. Environmental Specialist, AFTN2 Salamata Bal, Sr. Social Development Specialist, AFTCS

6. Applicable Performance Standards (PS)

Performance Standards (PS) Triggered PS 1. Assessment and Management of Environmental and Social Risks and Impacts YES PS 2. Labor and Working Conditions YES PS 3. Resource Efficiency and Pollution Prevention YES PS 4. Community Health, Safety and Security YES

2 Performance Standards (PS) Triggered PS 5. Land Acquisition and Involuntary Resettlement YES PS 6. Biodiversity Conservation and Sustainable Management of Living Natural Resources NO PS 7. Indigenous People NO PS 8. Cultural Heritage NO

II. Key Safeguard Policy Issues and Their Management A. Summary of Key Safeguard Issues 1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts: The project is a category A. Notwithstanding, the environmental analysis revealed no large scale or irreversible significant negative impact either during the construction or the operation phase. The environmental and social adverse impacts of medium magnitude which suggest specific mitigation measures and caution throughout the project lifecycle, as of the Environmental and Social Impact Assessment (ESIA) findings, are related to: (i) air pollution and potential health related risks due to dust and exhausts emissions during construction; (ii) increasing of road traffic related accident risks during the construction and operation phase in case of inappropriate information and signalization; (iii) water resources pollution with used oil and wastewater during the operation as a result of accidental spill and leakages or mishandling; (iv) emission of

substantial quantity of greenhouse gases (CO2, NO2 and Sulfur) during operation phase; (v) occupational diseases because of no observance or compliance with safety work conditions and standards; (vi) risk of accidental fires or explosion with socio-economic damages and losses on-site and in the surrounding communities.

With respect to land acquisition, the process for acquisition of parcels of land was managed by SENELEC from 2011, as part of the acquisition of a total area of 50 ha earmarked for development. The Project site is 4.5 ha, representing less than 10% of the total acquired land. SENELEC’s land acquisition, which took place prior to IFC’s involvement in the Project, resulted in economic displacement for 140 affected people engaged in agricultural activities (fruits trees, manioc, peanuts, beans, millet etc) on the site. There were no persons physically residing on the acquired land however there were four very early stage constructions with basic foundations. As part of the supervision of this Project, a verification of livelihood restoration will take place on a sample of the affected people.

2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: The project design integrated pollution prevention and management mechanism composed of: (i) an effluent treatment system including drainage, storage, flocculation and coagulation before releasing; (ii) sludge and hazardous waste handling mechanism; (iii) domestic waste disposal mechanism; (iv) an overall emergency preparedness mechanism including firefighting, oil spills, incidental leakages of sewage, explosion. Nevertheless, throughout the operation phase, noise impact on the stakeholders and the potential cumulative

effect of the NO2, which computerized emission appeared higher than tolerable limits, must remain of concern and be adequately monitored and reported.

3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. A multicriteria analysis including the ‘’no project’’ option, concluded that the construction of a thermal power plant powered with a combination of heavy fuel oil (HFO) and combined cycle is the current best compromise taking into account technical, economic, social and environmental sustainability in the country context. However, using the railways which cross the project area (2km away of the project site) for the transportation of HFO instead of transporting by trucks from Dakar could be an additional alternative with additional added value on the economic and safety management sides.

3 4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described. The environmental and social management of the project will be carried out considering two complementary approaches: (i) a transactional approach through the implementation, monitoring and reporting of the mitigation measures of the preparation and construction phases as set forth in the Environmental and Social Management Plan (ESMP) approved under the ESIA; (ii) a systemic approach through the implementation, monitoring and reporting of the environmental and social action plan (ESAP), agreed on between the IFC/Bank and the Borrower throughout the operation phase to the expiration of the Guarantee.

In essence, the ESMP provides: (i) a mitigation plan including measures to be implemented by the project for each phase, in order to comply with the Senegalese regulations, standards and international best practices, and detailed procedures to monitor measures, associated costs and corresponding responsibilities;; (ii) an environmental oversight and monitoring plan; (iii) a capacity building and communication mechanism.

In summary, an Environmental and Social Management System (ESMS) was approved through the ESIA and convened to be in place at the early stage of the project implementation. It is composed of:  the mitigation measures of the preparation and construction phase;  the installation and maintenance of functional air quality monitoring system;  quantification of GHG emissions in accordance with internationally recognized methodologies and good practices;  the emergency preparedness and response plan including environment, health and safety (EHS) issues;  the designation of an EHS and social professional responsible of the management of the ESMS;  the hiring of a third party qualified independent expert for the annual verification of the monitoring and evaluation information prior their sharing with the other stakeholders (Bank, Government, communities);  the setting up of a Health and Safety Committee provided with sufficient resources, and operated in compliance with legal requirements.

4 The project developer, Tobene SA., has an experience of environmental and social management of such infrastructure in the country as referred to its Kounoune Thermal Power Plant, which is currently under operation. But it is worthy to mention that the latest Bank visit to Kounoune revealed some deficiencies with regards to failure of the wastewater and used oil management system which are being addressed by Kounoune, and recent failure of the air quality monitoring equipment; these issues are well addressed in the ESMP for the Taiba Ndiaye Project. Furthermore, there are outside the fence issues such as : (a) the 500m buffer zone required by the GoS which was not secured as the Decree regulating such area has expired and has not been renewed by relevant authorities; and Kounoune could not stop the anarchic building of residential properties within this buffer zone; (b) the installation by the SENELEC of approximately 100MW of emergency generation leased which resulted in considerable air pollution within the Kounoune plant beyond WBG guidelines; noting that prior to these generators, the power plant air emission were well within WBG air quality limits. Although these issues have been escalated to the GoS, by the sponsors and Kounoune's Lenders, no concrete actions has been undertaken. IFC has informed the sponsor at a very early stage that we will not accept the situation with the encroachment of the buffer zone to be replicated in Taiba Ndiaye and that at a minimum the required buffer zone from the hazard assessment which is approximately 379m will need to be secured. Tobene Power has agreed to this and has beacons to demarcate the 500m buffer zone (Evidence of demarcation was visible during IFC Broad community support verification in September); and will also have a second demarcation for the 379m. The community was also informed that no residential properties could be built within the buffer zone and that only economic activities could take place.

The Project is located in a sparsely populated area where the population density is between 50 and 100 inhabitants per km2. Agricultural activities (fruit trees (particularly mangoes), manioc, peanuts, beans, millet etc) are reported as the main source of livelihoods in the Rural community of Taïba Ndiaye.

The process for acquisition of parcels of land was managed by SENELEC from 2011, as part of the acquisition of a total area of 50 ha earmarked for development. The Project site is 4.5 ha representing less than 10% of the total acquired land. The land acquired by SENELEC falls under the national domain category allowing expropriation to take place for public utility services. However, both the law on land acquisition dated July 1976 and the December 2008 “guidelines on the legal instruments to secure the land rights of citizens” enable any occupant of a parcel within a national domain land to be compensated for their efforts and investment given that access to national domain land is free

5 SENELEC’s land acquisition, which took place prior to IFC’s involvement in the Project, resulted in economic displacement for 140 affected people engaged in agricultural activities (fruits trees, manioc, peanuts, beans, millet etc) on the site. There were no persons physically residing on the acquired land however there were four very early stage constructions with basic foundations. A special government committee sanctioned by order was put in place in August 2011 - (“Arrêté portant création de la Commission Administrative d'Evaluation des Impenses dans le cadre de l'extension de la centrale de Tobène - Taïba Ndiaye”) to work on the land acquisition process and evaluate compensation amounts. The committee in consultation with the affected people reviewed the official compensation scale which is dated 1994 to bring more in line with current market price. Additional compensation of 300,000 CFA (roughly 600 USD) per person, corresponding to approximately 8 months of minimum agricultural wage was awarded as compensation for the temporary loss of income due to loss of land. Standing assets were also compensated. Alternative land and monetary compensation was provided by the rural authorities for the four affected people that had began foundation works on the Project site. The compensation process by SENELEC was carried out in consultation with the affected people while public consultations indicate communities’ wishes for complementary compensation from Tobene Power for the loss of cultivated land. Full compensation to affected people was carried out between March and April 2012. During the IFC’s appraisal in February 2013 it was observed that agricultural activities were still ongoing at the Project site despite affected people having received compensation. Alternative agricultural land is available within the community. As recommended in the ESIA, Tobene Power will inform the community of the anticipated start of construction to ensure that all farmers harvest their crops prior to land clearance activities and cease all activities on the land; the public hearing for the Project will be an opportunity to do so, and followed with another formal communication.

The Project will result in loss of pedestrian access currently used by the community and as such Tobene Power committed to constructing a new path around the site to ensure continued unrestricted movement for the community.

The regulatory framework clearly spells out the environmental permitting procedure and the obligations of project developers with regards to the implementation of the environmental and social management plan (ESMP). The Directorate of Environmental Assessment and Control (‘Direction de l’Environnement et des Etablissements Classes’’ - DEEC) has the overall responsibility of enforcing the environmental assessment procedure through the approval ESIAs and the monitoring of Environmental and Social Management Plans (ESMPs). Further, at country level, there is sufficient capacity (laboratories, firm, etc.) for the implementation of the approved mitigation measures of the proposed project.

5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. As part of the ESIA, a comprehensive stakeholder engagement was undertaken to meet the requirement of PS1 and included individual as well as group interviews to obtain views on the project from the local communities, and the local, regional, and national authorities; more specifically Rural Community of Taïba Ndiaye; village chiefs and notable of Mbayenne, Keur-Mallé, and Minam Diop; women and young girls; regional and national technical services departments, etc. These consultations took place in August and September 2012 as part of the ESIA process. The Project has been welcomed in the community both for job creation, development of the region and increase access to electricity. No objections to the Project have been raised during the ESIA stakeholder engagement process. No grievances have been received to date. A community grievance mechanism will be put in place to allow community to lodge their grievances. Tobene Power will maintain a register of complaints during construction and operation phases including actions taken to address such complaints.

6 The ESRS and ESAP were prepared by IFC, in collaboration with the Bank safeguards team, per the requirements of OP 4.03. The Bank/IFC ESRS and ESAP are available at the IFC website: http://ifcext.ifc.org/ifcext/spiwebsite1.nsf/651aeb16abd09c1f8525797d006976ba/c398d03a1bfa063085257b 870060c962?OpenDocument

B. Disclosure Requirements Date Environmental Assessment/Audit/Management Plan/Other: Date of receipt by the Bank 6/16/2013 Date of submission to InfoShop 7/23/2013 For category A projects, date of distributing the Executive Summary of the EA to the October 2013 Executive Directors Date of "in-country" disclosure 7/9/2013 Comments: Resettlement Action Plan/Framework/Policy Process Date of receipt by the Bank N/A Date of submission to InfoShop Date of "in-country" disclosure Comments: Indigenous Peoples Plan/Planning Framework Date of receipt by the Bank N/A Date of submission to InfoShop Date of "in-country" disclosure Comments: Pest Management Plan/Vector Management Plan Date of receipt by the Bank N/A Date of submission to InfoShop Date of "in-country" disclosure Comments: * If the project triggers the Pest Management and/or Cultural Resources, the respective issues are to be addressed and disclosed as part of the Environmental Assessment/Audit/or ESAP. If in-country disclosure of any of the above documents is not expected, please explain why:

C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting) PS1. - Assessment and Management of Environmental and Social Risks and Impacts Does the project require a stand-alone EA (including EMP) Yes [ x ] No [ ] N/A [ ] report? If yes, then did the Regional Environment Unit or Sector Manager Yes [ ] No [ ] N/A [ ] (SM) review and approve the EA report? Are the cost and the accountabilities for the ESAP incorporated in Yes [ x ] No [ ] N/A [ ] the credit/loan? PS 2. – Labor and Working Conditions Does a Human resources policy has been agreed on as part of the Yes [ x ] No [ ] N/A [ ] ESMS ? PS 3 - Resource Efficiency and Pollution Prevention

7 Does the EA adequately address pollution prevention, control and Yes [ x ] No [ ] N/A [ ] abatement issues? Is a separate PMP/VMP required? Yes [ ] No [ ] N/A [ x ] If yes, has the PMP/VMP been reviewed and approved by a safeguards specialist or Sector Manager? Are PMP/VMP Yes [ ] No [ ] N/A [x ] requirements included in project design? If yes, does the project team include a Specialist? PS 4. Community Health, Safety and Security Does the EA adequately address communities and workers Yes [ x ] No [ ] N/A [ ] exposure to hazards and safety issues ? Has an Emergency Preparedness and Response Plan (EPRP) been Yes [ x ] No [ ] N/A [ ] prepared in stand-alone or as part of the ESAP ? PS 5. Land Acquisition and Involuntary Resettlement Has a resettlement plan/abbreviated plan/policy Yes [ ] No [ x ] N/A [ ] framework/process framework (as appropriate) been prepared? If yes, then did the Regional unit responsible for safeguards or Sector Manager review the plan ? Yes [ ] No [ ] N/A [ x ] PS 6. Biodiversity Conservation and Sustainable Management of Living Natural Resources Does the project result in significant conversion or degradation of Yes [ ] No [ x ] N/A [ ] natural habitats or threatening of endangered/iconic species? Have Biodiversity Action Plan (BAP) been prepared Yes [ ] No [ ] N/A [ x ] Does the project design include satisfactory mitigation measures Yes [ x ] No [ ] N/A [ ] acceptable to the Bank ? PS 7. Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as appropriate) been prepared in consultation with affected Yes [ ] No [ ] N/A [x ] Indigenous Peoples? PS8. –Cultural Heritage Does the EA include adequate measures related to cultural Yes [] No [ ] N/A [ x] property? Does the credit/loan incorporate mechanisms to mitigate the Yes [X] No [ ] N/A [ ] potential adverse impacts on physical cultural resources? The World Bank Policy on Disclosure of Information Have relevant safeguard policies documents been sent to the Yes [X] No [ ] N/A [ ] World Bank's Infoshop? Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and Yes [X] No [ ] N/A [ ] accessible to project-affected groups and local NGOs? All Performance Standards Have satisfactory calendar, budget and clear institutional Yes [X] No [ ] N/A [ ] responsibilities been prepared for the implementation of measures related to performance standards ? Have costs related to safeguard measures been included in the Yes [X] No [ ] N/A [ ] project cost? Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to Yes [X] No [ ] N/A [ ] performance standards ? Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project Yes [X] No [ ] N/A [ ] legal documents?

8 D. Approvals

Task Team Leaders: Demetrios Papathanasiou & Manuel Berlengiero Approved by: Regional Safeguards Advisor: Alexandra Bezeredi Sector Manager: Meike van Ginneken