Draft IEE: India: Madhya Pradesh Energy

Initial Environmental Examination (Draft) September 2011 India: Madhya Pradesh Energy Efficiency Improvement Investment Program – Tranche 2 Prepared by Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited (DISCOM-C), Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited (DISCOM – E), Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited (DISCOM – W) for Asian Development Bank The environmental assessment 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. TABLE OF CONTENTS Page No. Abbreviations iii Weights and Measures iii 1.0 INTRODUCTION 4 2.0 POLICY, LEGAL, AND ADMINISTRATIVE FRAMEWORK 5 2.1 National Requirements 5 2.2 ADB‟s Requirements 5 3.0 DESCRIPTION OF THE PROJECT 5 3.1 Project Components 5 3.2 Project Location 8 3.3 Need for Project 9 3.4 Implementation Plan 11 4.0 DESCRIPTION OF THE ENVIRONMENT 13 4.1 Physical Resources 13 4.2 Ecological Resources 15 4.3 Economic Development 17 3.4 Social and Cultural Development 20 5.0 SCREENING OF POTENTIAL ENVIRONMENTAL IMPACT AND MITIGATION MEASURES 21 5.1 DISCOM‟S Approach for Route Selection 20 5.2 Environmental Impacts and Mitigation Measures during Design/Pre-Construction Phase 21 5.3 Environmental Impacts and Mitigation Measures during Construction 21 5.4 Environmental Impacts and Mitigation Measures during Operation 25 5.5 Environmental Management Plan 26 6.0 INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PROGRAMME 36 6.1 Institutional Arrangements 36 6.2 Environmental Monitoring Plan 37 6.3 Cost Estimates for Implementation of Environmental Management Plan 41 7.0 INFORMATION DISCLOSURE AND PUBLIC CONSULTATION 41 7.1 Information Disclosure 41 7.2 Public Consultation 41 7.3 Consultation Findings 41 8.0 GRIEVANCE REDRESS MECHANISM 42 9.0 FINDINGS AND RECOMMENDATIONS 44 10.0 CONCLUSIONS 45 List of Annexes Annex 1 Applicable Environmental Policies and Procedures 47 Annex 2 List of 33 kV Substation 50 Annex 3 Details of Public Consultations 51 ii Abbreviations ADB – Asian Development Bank DISCOM – Distribution Company DISCOM-C – Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited DISCOM-E – Madhya Pradesh Poorv Kshetra Vidyut Vitaran Company Limited DISCOM-W – Madhya Pradesh Paschim Kshetra Vidyut Vitaran Company Limited EA – Executing Agency EIA – Environmental Impact Assessment EMP – Environmental Management Plan GOMP – Government of Madhya Pradesh GoI – Government of India MPPCB – MP Pollution Control Board GIS – Geographic Information System GRM – Grievance Redress Mechanism HVDS – High-Voltage Distribution System LV – Low Voltage MFF – Multitranche Financing Facility MOEF – Ministry of Environment and Forests MP – Madhya Pradesh MP TRADECO – Madhya Pradesh Power Trading Company Limited MPERC – Madhya Pradesh Electricity Regulatory Commission MPPSIP – Madhya Pradesh Power Sector Investment Program MPSEB – Madhya Pradesh State Electricity Board MPPTCL – Madhya Pradesh Power Transmission Company Limited MV – Medium Voltage PMU – Project Management Unit ROW – Right of Way VCB – Vacuum Circuit Breaker Weights and Measures ha (hectare) – Unit of area km (kilometer) – 1,000 meters kV – kilovolt (1,000 volts) kWh – kilowatt-hour MW – Megawatt iii 1.0 INTRODUCTION 1. The Government of Madhya Pradesh (GOMP) has restructured the Madhya Pradesh State Electricity Board (MPSEB) on 31 May 2005 by virtue of Notification 226. As a result, five independent companies were formed which includes one generation company, one transmission company and three distribution companies. The five independent companies are as follows: Generation company - Madhya Pradesh Power Generating Co. Ltd. (MPPGCL) Transmission company - Madhya Pradesh Power Transmission Company Ltd. (MPPTCL) Distribution companies - Madhya Pradesh Poorv Kshetra Vidyut Vitran Company, (MPPKVVCL) in Jabalpur; Madhya Pradesh Madhya Kshetra Vidyut Vitran Company (MPMKVVCL) in Bhopal; and Madhya Pradesh Pachim Kshetra Vidyut Vitran Company (MPPKVVCL) in Indore. 2. The residual MPSEB purchases electricity from generating companies and supplied electricity in bulk to the three DISCOMs of the State. However, as provided for by the electricity reforms transfer schemes of 3 June 2006, the functions of the residual MPSEB for bulk purchase and bulk supply of electricity were transferred to the Madhya Pradesh Power Trading Company Limited (MPTRADECO). Therefore, all the three DISCOMs now buy power from MPTRADECO including short-term power. 3. One of the major obstacles affecting the economic growth and development in the rural areas of Madhya Pradesh is inadequate power supply. At present, rural power feeders mix load for about 8-10 hours. Agricultural pumps are provided with three-phase supply for 6-8 hours. During the rest of the period, single-phase supply is made available to households. Farmers use phase splitters1 and run their water pumps for extended hours resulting in power interruptions, abnormal loading of feeders and failures of distribution transformers. The current inefficient system results in households not getting power round the clock, leading to unbalanced loading on transformers and defeating the purpose of load shedding. Moreover, the current system of common supply to households and water pumps makes it difficult to locate and reduce the commercial losses. 4. To ensure better power supply in the rural areas, which would require strengthening of the existing infrastructure and construction of new infrastructure, the GOMP has requested the Asian Development Bank (ADB) through the Government of India (GOI) for a Multitranche Financing Facility (MFF) to finance the feeder separation program (or the distribution improvement program). The first phase of this feeder separation program was approved by ADB in 2007.2 The current MFF is now financing the second phase.3 The second phase covers the installation of separate feeders4 for households and irrigation water pumps, installation of high voltage distribution systems (HVDS), provision of new power connections, installation of meters for unmetered consumers, asset mapping of the DISCOMs using the Geographic Information System (GIS), and an analysis of the network system for better quality of power service to households and financial sustainability of DISCOMs. 1 Once feeders are separated and HVDS systems are in place, illegal tapping of power to run water pumps will not be possible. 2 ADB. 2007. Report and Recommendation of the President to the Board of Directors: Proposed Mutltitranche Financing Facility to India for the Madhya Pradesh Power Sector Investment Program. Manila ($620M in six tranches). 3 ADB. 2011. Report and Recommendation of the President to the Board of Directors: Proposed Mutltitranche Financing Facility to India for the Madhya Pradesh Energy Efficiency Improvement Investment Program. Manila ($556M in two tranches). 4 These are power supply lines from 33 kV∕11 kV substations in the distribution system. 4 5. The three DISCOMs will be the Executing Agencies for the MFF which would have two tranches with similar project components. However, Tranche 2 will include improvements in 33 kV systems. 6. An environmental assessment and review framework (EARF) has been prepared during Tranche 1. The EARF ensures that the subprojects under the MFF are implemented following the safeguard objectives of ADB embodied in the 2009 Safeguard Policy Statement. The DISCOMs, as the Executing Agencies, will be responsible for the preparation of the environmental assessments of the subprojects following the procedures in the EARF and in obtaining ADB concurrence prior to implementation. 2.0 POLICY, LEGAL, AND ADMINISTRATIVE FRAMEWORK 2.1 National Requirements 7. According to the Environment Impact Assessment (EIA) Act 2009 of GOI, feeder separation projects are not listed as environmentally-sensitive projects and hence, no environmental clearance is required from the Madhya Pradesh Pollution Control Board (MPPCB) or the Ministry of Environment and Forests (MoEF). 8. However, clearance from the Madhya Pradesh Forest Department is required only in cases where the subproject is constructed on forestland or requires cutting of forest trees. Details of environmental regulations of GOI are given in Annex 1. 2.2 ADB’s Requirements 9. Under the SPS 2009, the Project is classified as Category B since the potential adverse environmental impacts are site-specific, few if any of them irreversible, and can be readily mitigated. For Category B projects, an initial environmental examination (IEE) is required. Thus, this IEE was prepared following the requirements of SPS 2009 and the EARF. 3.0 DESCRIPTION OF THE PROJECT 3.1 Project Components 10. Similar to Tranche 1, the project components for Tranche 2 are as follows: Component 1 Feeder separation This will involve additional new 11 kV bays at existing primary substations and construction of new 11 kV lines. Currently, the 11 kV line construction work does not identify whether the work is associated with a new agricultural feeder or a new village feeder. New transformers associated with agricultural feeders, and all 11 kV rehabilitation and upgrades are included in the component. Component 2 HVDS and associated low voltage (LV) lines This component will cover the village feeders and the associated works such as movement of existing distribution substations to a more convenient, new location closer to the village, and installation of new transformers in the HVDS as required.

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