Transboundary Joint Secretariat for the Southern Caucasus Promoting cooperation in nature conservation Disclaimer The opinions expressed in this report are those of the authors and do not necessarily reflect the opinions of the KfW Entwicklungsbank of Germany or of the Agency of Protected Areas of Georgia. These opinions are based on observations by the authors and on information obtained from the quoted documents and as provided by stakeholders that were interviewed during the mission. The derived conclusions and recommendations are particularly formulated for the purpose and objectives of this assessment. TJS disclaims all liability to any third party who may place reliance on this report. - i - Impact Assessment of Investments on Assessment Report Kazbegi National Park Development November 2012 Disclaimer: Table of Contents A. Executive Summary................................................................................................... 1 B. Introduction ............................................................................................................... 7 B.1 Background ........................................................................................................... 7 B.2 The Objectives and Scope of the Assignment........................................................ 9 C. Methodology............................................................................................................ 10 D. Results of the Mission ............................................................................................. 11 D.1 Dariali Hydropower Project (DHPP) ..................................................................... 11 D.1.1 Present Situation.......................................................................................... 11 D.1.2 Findings from Meetings and Interviews ........................................................ 17 D.1.3 Potential Environmental Impacts and Risks ................................................. 19 D.1.4 Mitigation Measures and Monitoring............................................................. 20 D.2 Larsi Hydropower Plant ....................................................................................... 21 D.2.1 Present Situation.......................................................................................... 21 D.2.2 Larsi Impacts and Mitigation ........................................................................ 21 D.3 Khadistskali (/Kazbegi) Hydropower Plant ........................................................... 21 D.3.1 Present Situation.......................................................................................... 21 D.3.2 Khadistskali Impact and Mitigation ............................................................... 22 D.4 National Park Forest Land near Stepantsminda Proposal for Hotel Use .............. 22 D.4.1 Findings from Meetings and Documents ...................................................... 22 D.4.2 The Present Situation .................................................................................. 23 D.4.3 Impacts and Risks........................................................................................ 23 D.4.4 Recommendations....................................................................................... 25 D.5 Natural Monuments as Compensation Areas....................................................... 25 D.5.1 Present Situation.......................................................................................... 25 D.5.2 Environmental Impacts................................................................................. 26 E. Impact on the Overall Objectives of German Financial Cooperation ........................ 28 F. Conclusions and Recommendations on Impact on Biodiversity Conservation.............. 29 F.1 Conclusions and Recommendations for Hotel Rooms Plans ............................... 30 List of Annexes Annex 1. Terms of Reference 32 Annex 2. Impact of investments on the LogFrame of the SPPA 36 Annex 3. Mitigation Implementation Plan 39 Annex 4. Relevant Regulations Establishing Kazbegi National Park 41 Annex 5. Itinerary 45 Annex 6. Persons Met 46 Annex 7. Work Plan 48 Annex 8. Document References 49 Annex 9. Debriefing Presentation (29 October in Tbilisi and 31 October in Frankfurt) 50 List of Figures Figure 1. Run-of-River Option for Dariali HPP 13 Figure 2. Proposed Project Headwork Infrastructure 14 Figure 3. Project Tunnel and Construction Activity 15 Figure 4. Main Tergi Gorge (view to south with Stepantsminda at the end) 16 - ii - Impact Assessment of Investments on Assessment Report Kazbegi National Park Development November 2012 Figure 5. Water Flows in Tergi River with and without Dariali Project 16 Figure 6. Larsi Headworks under construction 21 Figure 7. Khadistskali River and Power Station 22 Figure 8. Photos of Stepantsminda National Park forest area and Rooms Hotel 24 Figure 9. Truso Travertines and Abano Mineral Lake 25 Figure 10. Sakhazinari Cliff Columns 26 List of Maps Map 1. Areas set aside for DHPP, other HPP locations, area considered by Rooms and mitigation areas added to the Kazbegi National Park 2 Map 2. Land Excluded from the National Park for DHPP and Required by Rooms Hotel 12 Map 3. Location of Rooms Hotel, Stepantsminda KNP Forest Area and Monastery land 24 List of Tables Table 1. Impact Assessment of DHHP and Private Development Stepantsminda Forest NR against Objectives & Outputs of German Financial Cooperation 5 Table 2. Impact Assessment of DHHP and Private Development Stepantsminda Forest KNP against Objectives & Outputs of the Support Programme for Protected Areas 28 ABBREVIATIONS APA Agency for Protected Areas BMZ German Federal Ministry for Economic Cooperation & Development CO2 Carbon Dioxide EIA Environmental Impact Assessment EMP Environmental Management Plan ENP Ecoregional Nature Protection Programme ha hectare IUCN International Union for Conservation of Nature KfW KfW Entwicklungsbank - German Bank for Reconstruction and Development km kilometre km2 Square kilometre kW kilowatt KNP Kazbegi National Park DHPP Dariali Hydropower Plant HPP Hydropower Plant l litre m3/s cubic meters per second masl metres above sea level MoEP Ministry of Environment Protection and Natural Resources MW Mega Watt NGO Non Governmental Organisation PA Protected Area SPPA Support Programme for Protected Areas TJS Transboundary Joint Secretariat US$ US Dollar WWF World Wide Fund for Nature - iii - Impact Assessment of Investments on Assessment Report Kazbegi National Park Development November 2012 A. Executive Summary Background The German Federal Ministry for Economic Cooperation and Development (BMZ) supports economic, social and political development in the South Caucasus through the “Caucasus Initiative”. A significant part of BMZ’s Caucasus Initiative is the Ecoregional Nature Protection Programme (ENP) for the Southern Caucasus. Under the ENP BMZ finances through KfW three Financial Cooperation (FC) components: i) support programme for individual protected areas, ii) contributions to the Caucasus Nature Fund and iii) running of a “Transboundary Joint Secretariat” (TJS) for Nature Conservation in the Southern Caucasus. The FC financed Support Programme to Protected Areas (SPPA) aims to improve the management of natural resources and protected areas, and simultaneously improve living conditions of the adjacent communities. The activities are to be based on participatory approaches for management planning, biodiversity and nature conservation, and for socio- economic development. Financing and Separate Agreement for the SPPA is to be concluded with the Government of Georgia for implementing this programme. The Kazbegi National Park (KNP) will be one of the target Protected Areas, where boundaries will be redesigned for more effective biodiversity conservation, along with capacity building, preparing a management plan and socio-economic development activities. In 2011 the Government of Georgia singed an agreement with Dariali Energy Company to construct the new Dariali Hydro Power Plant (DHPP). The DHPP is being constructed at a site partially within and for other parts immediately adjacent to the Kazbegi National Park (KNP), north of Stepantsminda town. As construction activities are not allowed in protected areas, 20 ha of protected area was removed from the KNP. As compensation 339 ha of land have been added to the KNP. Early September 2012 it became known that an additional 47 ha is proposed to be removed from KNP for use by a new hotel. The removal of these areas and possible impact on biodiversity conservation has raised concerns on possible risks for achieving the SPPA objectives for the expanded KNP under the SPPA. KfW expressed these concerns to the Agency for Protected Areas (APA)1. Consequently, following consultations, APA requested that TJS employ the services of an international and a national environmental expert to assess the impacts of these developments on the KNP SPPA project. The Objectives and Scope of the Impact Assessment Assignment The assignment was to assess the impact to the two areas of KNP affected (20ha for DHHP and 47ha for the Hotel site see Map 1) and to comment on the addition of the natural monument compensation areas on: • the biodiversity conservation and nature protection objectives in the KNP project area (as described in the feasibility study), and • on the objectives of the Protected Area development support provided by German Development cooperation within the context of the SPPA. 1 )