MINING INFRASTRUCTURE INVESTMENT SUPPORT PROJECT TERMS of REFERENCE for REGIONAL ENVIRONMENTAL ASSESSMENT and ENVIRONMENTAL

MINING INFRASTRUCTURE INVESTMENT SUPPORT PROJECT

TERMS OF REFERENCE FOR REGIONAL ENVIRONMENTAL ASSESSMENT and ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT FOR "SHUREN HPP" PROJECT

RFP No. WB/MOF/MINIS/CS/QCBS/1.1.4 (d)/2016 Credit No. 4888-MN

Contents 1 Introduction ...... 4 1.1 Potential resource, development and current condition of hydro-energy in Mongolia 5 1.2 Government Policy of Mongolia ...... 6 1.3 Project Regions ...... 8 1.4 Project Initial screening ...... 8 1.5 Legal Issues and Policy Assessment ...... Error! Bookmark not defined. 2 The scope of work and purpose ...... 10 2.1 Scope ...... 10 2.2 Purpose ...... Error! Bookmark not defined. 2.3 Main issues ...... 12 2.3.1 Environmental issues ...... 12 2.3.2 Social issues...... 16 3 Stages of Environment and Social Impact Assessment ... Error! Bookmark not defined. 3.1 Regional Environmental Assessment Framework ..... Error! Bookmark not defined. 3.1.1 Purpose of regional environmental assessment . Error! Bookmark not defined. 3.1.2 Analysis of Alternatives ...... Error! Bookmark not defined. 3.1.3 Projections of Cumulative Impacts ...... Error! Bookmark not defined. 3.1.4 Regional Environmental Assessment Stages..... Error! Bookmark not defined. 3.2 Baseline study of environment and social impacts .... Error! Bookmark not defined. 3.2.1 Climate and air quality ...... Error! Bookmark not defined. 3.2.2 Physical geography conditions, geology and geomorphologyError! Bookmark not defined. 3.2.3 Surface and ground water...... Error! Bookmark not defined. 3.2.4 Soil ...... Error! Bookmark not defined. 3.2.5 Flora ...... Error! Bookmark not defined. 3.2.6 Fauna ...... Error! Bookmark not defined. 3.2.7 Physical pollution ...... Error! Bookmark not defined. 3.2.8 Natural, historical and cultural heritages ...... Error! Bookmark not defined. 3.2.9 Society and economy ...... Error! Bookmark not defined. 3.3 Potential impacts of proposed project ...... Error! Bookmark not defined. 3.3.1 Hydrology, hydrogeology studies ...... Error! Bookmark not defined. 3.3.2 Micro climate change impact assessment ...... Error! Bookmark not defined. 3.3.3 Biodiversity in Selenge river basin ...... Error! Bookmark not defined. 3.3.4 Environmental impacts of the reservoir ...... Error! Bookmark not defined. 3.3.5 Fish habitat and breeding ...... Error! Bookmark not defined. 3.3.6 Environmental Impact of the Shuren HPP on Downstream areas ...... Error! Bookmark not defined. 3.3.7 Data collection and methodology ...... Error! Bookmark not defined. 3.3.8 Impact from water and infrastructure building and FacilitiesError! Bookmark not defined. 3.3.9 Land use ...... Error! Bookmark not defined. 3.3.10 Archaeological, historical and cultural findings. .. Error! Bookmark not defined. 3.3.11 Resettlement ...... Error! Bookmark not defined. 3.3.12 Indigenous Peoples ...... Error! Bookmark not defined. 3.3.13 Impacts on International Waterways ...... Error! Bookmark not defined. 3.3.14 Disputed Areas ...... Error! Bookmark not defined. 3.3.15 Public Communications ...... Error! Bookmark not defined. 3.4 Environmental and Social management plans ...... 18 3.4.1 Monitoring Program ...... 19 3.4.2 Adaptive Management Plan ...... 19 3.5 Plan for State and Public Consultation ...... 19 3.6 Provision ofPublic Information ...... 20 3.7 Incorporation of Suggestions by the Stakeholders ...... 20

3.8 Capacity Strengthening of Project Stakeholders...... 21 4 PHASING OF ESIA ACTIVITIES ...... 21 5 Deliverables by the consultant ...... 24 5.1 Introduction ...... 24 5.2 Deliverables ...... 24 5.2.1 Progress Reporting ...... 24 5.2.2 Environmental and Social Impact Assessment ...... 25 5.2.3 Russian Participation ...... 26 6 Management of the environmental and social impact assessment work ...... 26 6.1 Roles and Responsibilities ...... 26 6.2 Consultant Time Schedule ...... 27 6.3 Ownership and Control of Information, Data and Documents ...... 28 7 Requirements for the ConsultantTeam ...... 29 7.1 International team minimum to contain ...... 29 7.2 National team ...... 31 8 Payment Schedule ...... 36

1 Introduction The Mining Infrastructure Investment Support Project (MINIS), financed by the World Bank, aims to facilitate investments in infrastructure to support mining-related activities and downstream value-added processes (regardless of funding source) and to build local capacity to prepare and transact infrastructure Projects. In the scope of ―Shuren hydropower plant‖ (―Project‖), a Feasibility Study will be carried out. The power system network in Mongolia consists of four electric power systems such as Central Electric System (CES), East Electric System (EES), West Electric System (WES) and Altai-Uliastai Electric System (AUES). The largest is the Central Electric System (CES) with installed capacity of 774MW, which covers all consumers of the power supply from the electric power system in major cities and some of mining projects located in the central region. During recent years energy consumption in Mongolia has gradually increased due to its growing economy and population1.In the Master Plan of the Energy Sector of Mongolia the projected yearly growth for electric energy demand is as much as 6% for the years 2001- 2020.With the start of major mining exploration projects, such as Oyu-tolgoi copper mine, Tavantolgoi coal mine, and others, the energy demand on the CES is expected to reach 600MW showing at least a 3.5 percentage yearly increase according to the World Bank‘s forecast2.

Mongolia is in danger of a serious energy shortfall as early as 2012, at which point the maximum imported capacity of 255 MW from Russia may not meet demand. Russian power has become more expensive. This shortfall will negatively affect rapid expansion of the country`s mining sector3. To address energy shortfall, the Government cabinet meeting (November 2011) discussed the Shuren hydropower plant (ShurenHPP) along with several other energy projects and recognized the Shuren HPP as a priority project. The main goal of the ‗Shuren HPP Project is to supply the electricity demanded by the mining sector and to fill electricity shortfall faced by the country. Secondary goals are to provide renewable energy, enable energy independence from the Russian power system, and develop a low-cost supply of renewable energy. The MINIS is funding a feasibility study to look at constructing a Shuren hydropower plant on the Selenge River. Within the framework of the MINIS Project, it is planned to hire consulting teams to develop the Feasibility Study and an Environmental and Social Impact Assessment of the proposed Shuren Hydropower Plant. The Project has been classified as Category ―A‖ according to the World Bank Environmental Assessment Operational Policy 4.01, and therefore the proposed project must be supported by conducting an Environmental and Social Impact Assessment (ESIA) and Regional Environmental Impact Assessment (REIA) with public consultation. The Shuren project has been studied at pre-feasibility level, which is reported in the ―Technical Study Report for the Shuren Hydropower Plant Project‖. Assessment of the

1Source:http://www.era.energy.mn

2Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014 3Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014

findings of the pre-feasibility study should serve as the starting point for the development of the ESIA workplan. The work to be done under this TOR is the ESIA; the technical and economic Feasibility Study will be contracted separately. The Feasibility Study must however be closely coordinated with the ESIA.

1.1 Potential resource, development and current condition of hydro-energy in Mongolia The annual average precipitation is 200 - 250 mm, being higher (400 - 500mm/year) in the west and north and lowest in the south (100 – 150 mm/year). The total mean precipitation volume is about 350 km3, with total annual mean runoff of 22 km3 in surface water. According to the research conducted by the Institute of Meteorology, the average flow of the 3800 small and large rivers in the west and north of the Mongolia over many years is 3.46x1010 m3, measures a cumulative 65,000km, and it has the power of 6,300MW, with the possible energyoutput of 56x107 kWh4. According to scientific research, utilization of hydro energy has been possible since the 1950s. In 1960, the first evaluation of source water energy was released showing the total capacity of energy in Mongolia to be estimated at 3,800MW. In the 1960s, Russian Gidroenrgioproikt institute and Ministry of Agriculture of Mongolian researchers were carry out pre-feasibility study of Khovd river, Selenge river and Egiin, Orkhon, Tuul tributary rivers of Selenge river. As a result, installed capacity totals 1,549MW, and annual electricity generation amounts to 7,585.4MWh. In the 1970s, the Ministry of Fuel and Energy, considering the situation of energy supply at that time, recommended the start of research on hydropower stations with capacity of 300 MW on the cliffs of Shuren on the Selengeriver. At that time, the development of national industries was intensifying; however, bigger coalmines such as Baganuur had not been in use,so consequently the capacity of coal mining was unable to supply the demand of then running thermal-power stations. Therefore, hydropower plants were considered to be a way to facilitate the central system of electricity and overcome the shortage of energy. Since the 1990s Mongolian researchers have worked to develop the renewable energy sector, by using hydro energy stations for supplying some aimags, such as the Gobi-Altai, Zavkhan, Khovsgol among other western aimags that were not yet connected to the Central Energy System. Engineers believed that this action would be more suitable and efficient than importing energy from the Russian Federation or using diesel stations. Moreover, at the request of the Ministry and Energy Regulatory Authority they projected technical and economic estimations of renewable energy stations. The first hydropower plant in Mongolia with a capacity of 525 kW was built on the Orkhon River, Kharhorum.Hydropower plants, mostly concentrated in Western Mongolia, have a capacity ranging from 150kW to 12MW, nearly all supplying remote soum centers, with the biggest two supplying Western and Altai-Uliastai energy systems5. Installed renewable energy capacity in Mongolia is 37.4MW that makes up 4.52% of the basic capacity of total

4Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014 5Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014

energy, with 28.175MW (93%) hydropower plants, 5.425MW (14.5%) solar energy; 3.8MW (10.2%) wind power plants. 1.2 Legal and Policy Framework Successful implementation of the project will necessitate strict compliance with all applicable international conventions, domestic laws and donor or lender policy requirements. The ESIA will review relevant domestic legislation, commitments made under treaties, bilateral agreements, and international conventions, as well as the requirements of applicable World Bank environmental and social safeguard policies. World Bank safeguard policies will define the standards and approach to be used in undertaking the ESIA for the Shuren HPP. The consultant shall develop an indicative list of applicable and effective international conventions, bilateral agreements, domestic laws, and policy papers to be presented with the workplan at Inception. The consultant will take account of any new legal or policy developments which may arise during the study. The consultant will also take into account relevant legislation of the Russian Federation in terms of environmental impact assessment procedures in the transboundary context, including consultations with potentially affected stakeholders. In addition to the World Bank Policy and Mongolian legislation, the ESIA and REA should comply with relevant provisions of the Russian Federation laws with due regard for the transboundary impact on the Russian territory. It is known that World Bank policies on environmental and social impact assessment are broader in scope than national provisions, as they take account strategic, cumulative, and induced impacts; and are also in other ways more specific, such as requirements for worker and community health and safety. The Consultant shall undertake a ―gap‖ analysis which provides a comparison of relevant Mongolian environmental and social policies, laws and regulations with the requirements of the World Bank Environmental and Social Operational Policies, which will be the standards used for this World Bank-financed ESIA. The World Bank Operational Policies (OPs) on environmental and social safeguards that are likely to be triggered for theis project, are the following: OP 4.01 Environmental Assessment OP 4.04 Natural Habitats OP 4.10 Indigenous Peoples OP 4.11 Physical Cultural Resources OP 4.12 Involuntary Resettlement OP4.36 Forests OP 4.37 Dam Safety OP7.50 Projects on International Waterways There is no inherent conflict created by gaps between Mongolian environmental and social laws and regulations and the environmental and social safeguard policies of the World Bank as the latter are equivalent to international treaties, which take priority. However, provision of a thorough gap analysis in the ESIA will enable Mongolian policy-makers to consider future measures needed to bring Mongolian practice in line with international norms. 1.3 Relevant Policies of Mongolia Construction of medium capacity hydropower plants with a dam on western area rivers has been implemented successfullyin recent years.A hydropower plant with a RollerCompacted

Concrete (RCC) dam (Taishir hydro power plant) was built over the Zavkhan River and aConcrete-Faced Rockfill (CFRD) dam, (Durgun hydro power plant) was constructed on the ChonoKharaikh River. These hydropower plants were created a stable energy supply and sustainable livelihood in western area of the country. In the northern part, large-scale hydropower plants would supply electricity demanded by the mining sector and fill the electricity shortfall faced by the country, and bring multipurpose benefits to the Selenge River region. The State Great Khural (Parliament) and the Government of Mongolia are highly attentive of these concepts and have mentioned them in the laws and policies listed below: 1. Mongolia‘s Strategy for Sustainable Development of the Energy Sector 2002-2010has been approved by the cabinet in July 2002 and revised in 2004. The aims of theStrategy include: sustainable development of the energy sector, reduced povertyand increased involvement of the private sector and public interest in the sectorthrough a more secure energy supply. 2. Mongolia‘s energy sector has overcome a transition from a centralised, commandbasedsystem to a market-oriented one. Currently, within the Central Energy System(CES), electricity is traded through the main market – the ―single buyer model‖(SBM) – and two other accompanying markets: spot and competitive. 3. In June 2005, the Mongolian Parliament approved the National Renewable Energy Program which sets ambitious goals for broad-based renewable energy development increasing the share of renewable energy in total energy supply from 0.9% in 2005 to 3-5% by 2010 and to 20-25% by 2020. 4. Item 3.8. National Renewable Energy Program; Take measures to perform technical economic feasibility studies of large hydropower stations namely Eg river 220 megawatts station, Artsat 118 megawatts station on Selenge River and Orkhon river 110 megawatts station on rivers with significant hydropower resources such as Selenge, Eg and Orkhon rivers, and to implement these studies. 5. The Renewable Energy Law of Mongolia came into force on 11 January 2007 and regulates the generation and supply of energy from renewable energy sources. The Government is seeking active engagements of donors and local and for sign private investors for the development of Mongolia‘s large renewable potential for utilizing solar, wind, hydro and geothermal energy resources. 6. Item 9.2.3, Renewable energy law of Mongolia; Studies on soil, flora, geological and hydro-geological conditions, geographical location, land surface, air pressure, weather, wind regime, and water study for cases of constructing facilities which will use hydro sources. 7. Item 9.2.4, Renewable energy law of Mongolia; A statement issued by an authority with regard to compliance of equipment, technology and facilities of a renewable energy power source with national and international standards. 8. Item 3.5.1.7 of Mongolian National Security Concept approved by Resolution No.48 by the Parliament of Mongolia, dated 15 July, 2010 - ―Regulate flow of large rivers and construct a reservoir in order to improve usage of surface water in Mongolia‖

9. Item 1.7. Some of action plan of Renewable energy source studies No. 16 Parliament of Mongolia dated 08 June 2010 – ― Intensify for Large scale hydro, solar and wind power plant source studies, promote for NGO and private sector and cooperate‖ 10. Item 8.17.Base line of develop for Economic and society of Mongolia in 2013. No. 37 Parliament of Mongolia dated 18 May 2012 -Initiate large scale hydropower plant construction work (300-350MW) on Selenge River basin. 11. Item 63-3. Implementation plan of action program of Government of Mongolia No. 120 Parliament of Mongolia dated 03 November 2012 - Startup Pre-feasibility study of large scale hydropower plant on Selenge River basin. 12. Item 3.3.2.Water National Program approved by Resolution No. 24 by the Parliament of Mongolia dated 20 May 2010 - ―Regulate flow of Orkhon, Selenge, Tuul and Khovd rivers, some of rivers and construct a reservoir, transmit water in order to Improve usage of surface water in Mongolia‖ 13. Item 3.3.19. Water National Program approved by Resolution No. 24 by the Parliament of Mongolia dated 20 May 2010 – Improve again Mongolian rivers hydro energy potential, Renewable energy development plan, Energy consumption and demand, sector policy and planning connect with operational experience and maintenance difficulties of Taishir and Durgun HPP. 14. Item 3.3.32. Water National Program approved by Resolution No. 24 by the Parliament of Mongolia dated 20 May 2010 – Carry out Feasibility study of HPP on Selenge River with 300MW, Egiin HPP with 220MW and Orkhon HPP with 100MW, studied and resolved to startup the construction work. 1.4 Project Area and Footprint Selenge river is the biggest river of Mongolia. It belongs to the Arctic Ocean Basin and it flows from Mongolia across the border to the Russian Federation supplying 50 percent of the flows to the Baikal Lake. The planned HPP site is located at 3km downstream from the tributary Shuren River joining the Selenge River, which is at the town Orgikh Bag, Tsagaannuursoum, Selenge province. The reservoir area would cover the territory of Selenge and Khangalsoum of Bulgan province as well as Baruunburen, Khushaat, Tsagaannuursoums of Selenge province. Thus, it is required to conduct studies of the detailed environmental, ecological and socio-economic impact of the project. Both positive and negative aspects to the project area should be studied in the feasibility stage. The project area of Influence for the ESIA is divided into two zones: The local zone and the regional zone. The local zone covers the vicinity of the site of the reservoir and associated facilities and extends 5 kilometers upstream and downstream on the river. The regional zone includes the entire basin of the Selengeriver up and downstream from the project site until Lake Baïkal including the wetlands estuary and delta. Additional studies on the Irkutsk reservoir, as well as the downstream pool of the Irkutsk HPP on the Angara are to be undertaken where potential impacts are identified in the Regional Environmental Assessment. The ESIA will study the impacts of the proposed Shuren project on the local and regional zones and propose mitigation for these impacts. 1.5 Project Initial Screening and Site Selection In the Phase 2 of the MINIS project a pre-feasibility study was conducted including an options assessment and initial screening of the environment, social, finance and economics

of a hydropower plant on the Selenge River. Its results were discussed and agreed with the Working Group of the Ministry of Energy. The pre-feasibility study is available for interested bidders and can be obtained by the MINIS Project Management Unit6. The results of the pre-feasibility study for the Shuren HPP is that the investigated area at the Selenge River between Khyalganat and Zuunburen is suited for the proposed construction of Shuren HPP. Within this area, totally six possible dam sites have been identified based on the pre-feasibility study7 and the Russian feasibility study from 1973. Site number Location Latitude Longitude Dam Site 1 49°48'24.45" N 105° 9'51.70"E Dam Site2 49°44'43.07"N 105° 2'58.63"E Dam Site3 49°43'59.27"N 104°57'15.60"E Dam Site4 49°42'29.70"N 104°56'25.72"E Dam Site5 49°41'60.73"N 104°47'54.18"E Dam Site6 49°40'31.20"N 104°45'52.26"E

Two locations, Sites No. 4 and No. 6, were identified as best suited for the construction of a HPP and have to be further investigated in the feasibility study. Thus both sites will need to be studies in sufficient detail to make and informed recomemndatrion based on their E&S impacts and performance. E&S criteria will be an important part of the decision making framework leading to the final site selection. The selection of the final location has be to done by a comparison of sites taking into account the power generation need for the Central Energy System (CES), technical and economic feasibility, and environmental and social impacts. The initial screening of potential sites for the Shuren HPP was followed by preliminary investigations for the Site No. 4 in the pre-feasibility study, which indicated that Shuren HPP is an important and feasible project for the future generation of power for the CES. The ESIAs conducted in the context of the feasibility study shall, review all previously studied sites, confirm the preliminary investigations of Site No. 4 and Site No. 6 to make an informed choice of the best alternative. For both sites both location-specific factors, and design options would be taken into account in comparing the two alternatives, and the best alternative then be further developed and analyzed to a feasibility level design. As due diligence the consultant should reviewthe initial screening of potential sites during earlier phases and verify the rationaleforincluding the options recommended for study in the ESIA. This should include a comparison on all technical, economic,social and environmental issues between the recommended options, options dropped during earlier phases, and assessment of alternatives that involve not proceeding with the project.

6Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014 7Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014

1.6 Tenative Project Design - Key Physical Features The key elements of the planned project would consist of a dam (Roller-compacted concrete [RCC]) of an approximate height of 65 m and a crest length of 1200 m. The dam base is estimated to be 900 m wide, the dam volume estimated to 4,8 Bill m3. The project would create a reservoir with a total storage of 4.5 Bill m3 of which 3.8 Bill m3 would be USEFUL storage. The elevation of the reservoir‘s full supply level (FSL) would lie at 761m above sea level (a.s.l.), the minimum operational level (MOL) at 739 m a.s.l. The project would include the following appurtenant structures: construction camp, later to be converted into logistical support structures (staff housing, storage, workshops); power house; switchyard; new access road (225 km) and connecting roads; and a transmission line of approx. 73 kmto connect the HPPs to the grid. During construction quarries for rock fill and / or aggregate will be operated, the tentative volume to be sourced would be 4 Mill m3. 2 Objective of the Assignment The Consultants shall prepare and present to the Borrower / Project Sponsor a Regionl Environmental Assessment (REA) and an Environmental and Social Impact Assessment (ESIA) including all necessary additional documentation which may be required to satisfy specific World Bank safeguard policies which may be triggered by the planned project activities. Under the ESIA process an environmental management plan (EMP) covering both local and riparian impacts and risks; as well as a resettlement action plan (RAP) addressing physical and economic displacement of affected stakeholders, would be repared. The ESIA and related RAPs and EMPs shall be prepared in a level of detail specific enough for incorporation into a tender package for potential construction works, to allow these activities to be adequately priced and become part of the successful bidder‘s works contract. The ultimate aim is to foster on the ground implementation of effective mitigation, management and enhancement measures during the project execution and operational phases. The REA an ESIA would be carried out as two separate phases of the project, the REA providing a decision basis regarding the wider, transboundary impacts of the planned project. This decision basis shall take into account cumulative impacts on the river basin and sensitive receptors (such as e/g/ Lake Baikal) from existing and planned developments, as well as from this project. Any existing river basin development plans, including hydropower generation, water abstraction, and other stressors (e.g. mining) would also be taken into account. The Consultant shall be independent, hired on a competitive basis and will not be connected to the Designer of the project, or the Contractor, or any other entity assuming a role which a role which might cause a conflict of interest situation. 3 Scope of Work 3.1 Scope Informed by the pre-feasibility study8for the Shuren HPP, an Environmental and Social Impact Assessment and an Environmental Assessment of the region of the ―Shuren HPP‖ project on the Selengeriver are to be undertaken in order to assess the feasibility of

8Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014

proceeding with project development as required by The World Bank‘s Safeguards Policies, which require that a Regional Environmental Impact Assessment (REA) and Environmental and Social Impact Assessment (ESIA) be prepared to meet the requirements of the Environmental Social Management Framework of MINIS, the World Bank‘s Environmental Assessment Operational Policy 4.01, and relevant Mongolian regulations. Dam sites 4 and 6, based on pre-feasibility study of Shuren HPP, are the primarily focus of the assessment as these were decided as more suitable for constructing Shuren HPP along the Selenge river between Khyalganat and Zuunburensoum. However they should be considered alongside other alternatives as part of the REA. After the completion of Shuren HPP dam, the reservoir area would extend into the territory of Selenge and Khangalsoum of Bulgan province as well as Baruunburen, Khushaat, Tsagaannuursoums of Selenge province. Selenge River is a transboundary river originating in Mongolia and then flowing into the Russian federation, with Lake Baikal as receptacle. Selenge river contributes about half of the Lake‘s inflows, and is thus of high importance for its ecosystem. Therefore area of influence to be considered for this assignment will have to extend downstream over the entire Selenge River basin and include Lake Bailkal, especially sensitive areas such as the Selenge River Estuary, spawning grounds, wetlands etc. The performance of REA and ESIA also depends on a menaningful review and assessment of the pre-feasibility study outcomes for the proposed project, the selection criteria for the two prospective sites, the design of additional field research, the delineation of the project area and the the availability, quality and temporal / spatial coverage of data (notably hydrographic and climatic data. These will need to be reviewed and assessed within the scope of this assignment refine and if necessary adjust the scope of study. 3.2 Tasks of the Consultant The tasks the Consultant will be required to accomplish in order to achieve the above outlined objectives are the following: (1) Regional Environmental Assessment (REA):  Identify environmental opportunities and constraints for development planning at the regional level; define and whenever possible quantify environmental and social criteria, against which project performance can be assessed; these would be obligatory to be considered in the energy development process besides economic and technical factors;  Formulate recommendations for environmental and social provisions, responsibility ands sustainability mechanisms to be included (i) into Mongolia‘s energy policies / strategic planning od energy development, and (ii) into any bilateral, multilateral and regional energy generation, transmission, storage, trading and utilization agreements or treaties;  Inform assessment of cumulative impacts (additive, interactive and significant impact) on environmental and social components from project activities in the region;  Compare the environmental and social impacts of the proposed project with other broad strategic options for the region as well as alternative investment, technology, and lowest impact options including, for example, wind and solar power.  Compare the proposed project with feasible alternatives, including assessing options that involve ‗the without project scenario‘

 Explain in detail the feasible options and the assessment which justifies proceeding with a particular alternative; and  Provide recommendations before decision about specific project options has been made and with the purpose of influencing the decision; (2) Environmental and Social Impact Assessment (ESIA):  Identify the project impact area and project‘s area of influence;  Document the key physical, biological and socio-economic and cultural baseline conditions;  Identify key project structures and components and the activities involved in the construction and operation phases that have a potential to change the existing baseline conditions;  Involve public opinion in the decision-making process related to the identification of potential impacts, mitigation measures, and project alternatives;  Identify potential positive and adverse impacts for various proposal alternatives;  Analyse the most critical adverse impacts for the environmentally/economically best alternative;  Prescribe appropriate, practical, cost effective and site specific mitigation measures for the identified adverse environmental impacts to avoid or minimize or compensate adverse impacts and enhancement measures for the capitalization of positive impacts;  Provide recommendations on the overall feasibility of the project from environmental/social prospective to decision makers for further action regarding the development of the project  Outline the elements of environmental mitigation, management, monitoring and auditing and prepare an Environmental Management Plan (EMP) including Land Acquisition and Resettlement Plan, Indigenous and or Vulnerable People Development Plan; and Gender Development Plan; and The work will be divided into two phases: (a) Environmental and Social Impact Assessment and (b) Regional Environmental Assessment as detailed in the following chapters. Additional, detailed information and guidance on the REA and ESIA approach can be found in Annex 2 and 3. 3.3 Key Environmental Issues  Baseline Conditions In order to allow the consultant to assess and make an informed judgenment on the project‘s impacts, both the project features and dimensions, and the existing environmental and social baseline need to be know, described and documented in detail. The interaction of the project with the existing baseline will induce changes, that can manifest as the actual positive or negative impacts. Detailed guidance on conduction the baseline assessment can be found in Annex 1. This would be one of the first and basic tasks for the Consultant to complete.  Technical Project Parameters

The E&S performance of a HPP depends on a number of key parameters, which will need to be included in the Consultant‘s asessments. These parameters can greatly influence a HPP project‘s magnitude of impacts on (i) resettlement; (ii) downstream hydrography; (iii) downstream water quality; (iv) land conversion, impacts on natural habitats and forests; (v) reservoir water quality and GHG (greenhouse gas) emissions. The parameters to consider are: a. surface area vs. megawatt production capacity (ha/MW), b. water retention time (days), c. biomass flooded (m3), d. length of river impounded / left dry, e. useful reservoir life (years), f. persons requiring resettlement vs. megawatt production capacity (no. persons/MW), g. area of critical natural habitats inundated / affected (ha) h. operational parameters - impact of changed river flow regime, including impact during river impounding, and changes in volume, pattern and quality of water downstream of the dam i. likelihood of reservoir stratification j. determination of ecological flow between the dam and tailrace discharge

The resulting effects and impacts are deemed the following, and described in more detail below: k. effect on aquatic fauna and flora l. foliage and vegetation in area to be flooded and removal requirements before flooding m. sedimentation of the reservoir, governed by land use and soil types, including the potential for reservoir landslides and soil erosion n. induced impacts from short-term or long-term migration to the project area (e.g. logging, artisanal mining, hunting, settlements…) o. incidence of water borne and water related diseases p. impact on fisheries and aquaculture q. Impact on downstream irrigation-based agricultural systems and drinking water supply, both during reservoir filling phase and routine operation

 Fisheries The first step to study the fish population in the local zone is to understand the biodiversity of the river in the project‘s area of impacts, both the direct footprint by dam and reservoir, and the effects on the river course up- and downstream the potential sites. It is known that the Taimen trout (Huchotaimen) - an endangered species listed in the Mongolia Red Book - is endemic to the Selenge River. The project‘s impacts on this and other fish species‘ (e.g. Sturgeon or Cisco) habitats will be an important study focus.  Gain and loss of habitat After producing an inventory of identified fish species and their conservation status (with speial attention to endanfgered and threatened ones) their importance within the river ecosystem will have to be etsablished. The consultant will identify, describe and map

habitats, calculate gains and losses, assess, and as far as possible quantify the project‘s potential impacts on fish populations.  Tributaries Tributaries can be important habitats for aquafauna, especially fish. After the reservoir impoundment a tributary‘s ecology and thus function for a fish specie‘s ecology may drastically change. It may become a new spawning habitat, with a net positive impact, or become inhabitable due to changed flow velocity and water quality. Thus special attention should bededicated to the ecology of tributaries. The consultant should also identify any barriers, such as falls and rapids, and assess the potential impacts of their flooding by the reservoir. Such impacts could include the opening of new habitats on the positive side, the spread of unwanted or invasive species on the negative end.  Fish migration The projects impact on fish migration, especially for the Taimen Trout, should be considered as a key issue. The construction of a dam on the Selenge River will block the migration of most aquatic species, and the construction, operation and maintenance of fish ladders usually offers only partial mitigation. Besides proposing design solutions the consultant shall propose low impact fishing techniques to reduce and partly compensate the stresses imposed by the potential project.  Aquatic fauna and flora downstream The Selenge River is approximately 1,200 km long, and the distance along the Selenge River from the proposed Shuren HPP sites to the Selenge Wetlands and Lake Baikal is approximately 360 km. The development of a hydropower plant will modify the flow regime of the river. The impact of the potential operational scenarios on the downstream flow regime will be identified and analyzed from the dam site until the Selenge Estuary in Lake Baikal. The potential new flow patterns and the impact on downstream habitats should be described and modeled. The objectives of these models would be to identify operational regimes that minimize changes in flow pattrerns and resulting adverse impacts on downstream ecosystems, including transboundary impacts. Special attention should be directed to the estuary of Selenge river, river delta and Lake Baïkal. The consultant should indicate the likelihood of a conversion or degradation of any identified critical habitats.  Natural and cultural heritage The Selenge River delta is classified as a Ramsar Site and should be preserved. Similarly, Lake Baikal is a UNESCO World Heritage Site. The consultant should refer to the relevant IUCN guidance9 to assess the likelihood of impact of the project on the Outstanding Universal Value (OUV) of the UNESCO World Heritage Site and the wider delta. Moreover, the possible loss of cultural property (including archaeological and

9 Refer to the IUCN (2013) World Heritage Advice Note: Environmental Assessment and World Heritage (https://cmsdata.iucn.org/downloads/iucn_world_heritage_advice_note_environmental_assessment_draftfin al_060613rev.pdf) For Outstanding Universal Value (OUV) refer to ICOMOS (2008) The World Heritage List: What is OUV? Defining the Outstanding Universal Value of Cultural World Heritage Properties. Berlin: Hendrik BäßlerVerlag,

historical sites) needs to be considered and the assessment should thus include site surveys and provisions for chance finds, as appropriate.  Operation and downstream flow regime The water flow will change at the dam site and downstream on the Selenge River. The consultant should analyze the impact of modification of flow regime near cities, villages, and on water intake for commercial and domestic use.  Erosion The modification of flow regime and the new reservoir may have a potential impact on bank stability, erosion and sediment balance of Selenge River. Potential impacts could include erosion, slope instability, mass movements such as landslides and rock falls, and damage to the vegetation cover aggravating and accelerating soil depletion. During the construction phase these would increase turbildity in the reservoir area and river downstream of the potential dam, while sediment transport would significantly decrease during operation, once the reservoir is filled. The Consultant will thus conduct a morphological mapping and soil survey for the construction site and potential reservoir area to identify and localize areas under risk of (or already impacted by) erosion, mass movements and instabilities. The Consultant will contribute to hazard related maps for dam area and planned site installations such as roads, camps, storage areas, machinery pads, workshops etc., these maps would indicate high risk areas and used as planning tools for mitigation measures. These maps should be compatible in format and contents with geotechnical hazard maps to be prepared for the entire reservoir area (under the technical FS).  Terrestrial Ecology The Consultant shall produce a terrestrial biodiversity inventory for the entire affected project area, including reservoir and dam sites, appurtenant structures, temporary works, areas of indirect impacts and potential reservoir influence (e.g. by microclimate change). The surveys should address terrestrial ecosystems, focus on selected key areas and ―hot spots‖ changes in landscape, water regime and microclimate are expected to have most impact. Biodiversity data should be geo-referenced and maps be prepared for the entire relevant investigation area. The Consultant should assess feasibility and options for protection or rescue/recovery of any rare/endangered species or ecological communities which may be identified through the biodiversity inventory, and the cost of such actions. The total biomass in the reservoir area should be estimated and an assessment made whether it will be necessary to remove vegetation prior to filling the reservoir.  Climate Change The impacts of the potential project‘s construction and operation should be seen within the context of global climate change, which might significantly affect the physical environment of the project. The Consultant should describe and whenever possible quantify topics, processes and factors such as: a. impact on the water balance of the river basin, causing e.g. changes in amount, type and seasonal/annual distribution of precipitation in the project area and the upstream / downstream watershed

b. changes in reservoir temperature and resulting stratification / mixing behavior due to change of average ambient temperature as well as water temperature of Selenge river and other direct inflows, impacts on reservoir water chemistry, fauna and flora; c. changes of upstream / downstream hydrological parameters, notably flow rates and sedimentary load and their seasonal / annual distribution. They might be influenced or controlled by underlying phenomena such as changes in vegetation and resulting impact on erosion / sediment generation and microclimate; d. changes in seasonal / annual demand patterns for water and electricity: shifts in peak demands for energy (heating / cooling) and water (agriculture, irrigation) in the annual cycle, and interaction of these changes with operational requirements and hydrological parameters, such as seasonal flow rates; e. Historical available data on past climate change in each of the countries / regions in the river basin, and all available future climate change forecasts and their impact (a) on water demand and (b) on the design and operation of the potential project; f. Review the Carbon dioxide emission data in Mongolia and the Selenge river Basin and analyze the extent to which the HPP project could help to reduce them, and quanify possible carbon emission reductions. The Consultant is not expected to deliver detailed, quantitative studies on the listed topics, but will analyze them in a comprehensive, qualitative manner, procure quantitative data where available (e.g. from existing global climate models - GCMs) and supplement own best estimates whenever reasonably possible. The Consultant will analyze existing competition among different water uses and develop scenarios how these could be affected by likely climate change scenarios. For this task the Consultant will use available scientific and technical publications and reports.  Seismicity The presence of a major geological fault line is known for the Selenge region. While the investigation and assessment of seismic risk would be part of the technical feasibility study (under the subdivision of geotechnical investigations and assessment), the risk of natural seismicity (earthquakes) and induced seismicity (caused by increased seepage into the gfround from a reservoir) should be considered in terms of community health and safety. 3.4 Key Social Issues  Stakeholder Analysis: identify people with concerns, interests or rights affected by potential changes in access to or use of natural resources, and assess which issues are most likely to be affected by competing or divergent interests (including, but not restricted to competition for natural resources, unclear water or land rights, distribution of project entitlements or benefits, lack of internal community cohesion, differing positions on project choices, quality of consultation and participation).  Public Consultations and Communication: Document understanding of current community awareness and concerns about the project, providing clear communications strategies for each stakeholder group.  Assess Project Alternatives: Compare the proposed project with feasible alternatives, including assessing options that involve the ‗without project‘ scenario, and assessing the sustainability of the project and its opportunity costs for both the water source and the destination regions.

 Cumulative Impacts: Identify and compare positive and negative cumulative impacts between water source and destination regions, including Lake Baikal and the impacts of development of current and planned hydro power sites. Consider projects and consumers of power and water in the future as a potential source of cumulative impact.  Clear rationale for resettlement and indigenous people‘s planning instruments chosen: for both resettlement impacts and for impacts on indigenous peoples, World Bank safeguard polices require the use of site specific action plans whenever the sites or alignments creating impacts are known or selected. Planning or policy frameworks are only required when specific sites or alignments are still unknown or undecided.  Resettlement analysis and documentation: evaluate options to avoid and minimize resettlement, identify all significant impacts on land and resources needed for the project10 (including informal or formal practices of recessional agriculture or transhumance11, identify all social groups and document the patterns of water and land use/tenure, with a focus on risk and vulnerability, identify all significant impacts (on both physically displaced and economically affected people), conduct a 100% census, sample socioeconomic survey, and verification of ownership of assets to be acquired, recommend clear eligibility criteria defining categories of affected persons according to severity and types of impacts, tenure, types of assets affected and vulnerability of those affected.  Resettlement plans include: o Documented consultation with those affected during planning, o Clear options and choices of mitigation measures12, including involvement in selecting relocation sites and replacement assets, o Inventory of affected assets, with methods for valuing market or replacement cost of affected assets, o Clear procedures for delivery of entitlements, o Budget and schedules of the implementation process, linking the schedule of resettlement with civil works packages, and o Livelihoods at the new sites and in the new activities can improve, or at least maintain net incomes and monitoring mechanisms and indicators adequate to credibly measure results.  Indigenous Peoples: Conduct and document a culturally appropriate process of free, prior and informed consultations leading to broad community support, and producing: o Identification of the land and territories that indigenous peoples have traditionally owned or customarily used or occupied, and the natural resources on which they depend;

10Include all “associated facilities” in the project footprint determination (including any relocation or replacement sites for those displaced) and document the amount of land used for the project clearly, using maps and other visual tools. 11 Include all permanent and temporary land use for the project, all restrictions in access to or use of land, or water and includes structures, income, trees and crops, public assets, and cultural property affected. 12Including community mechanisms for assets that are not owned by individual or households, land, compensation, livelihood and income restoration options. Entitlements should be commensurate to the magnitude and severity of impacts. Include the principle of “land-for-land” compensation for affected peoples whose livelihoods are land-based. . If the “land-for-land” principle cannot be applied, there must be a clear and documented justification provided.

o Assessment, based on free, prior, and informed consultation, with the affected Indigenous Peoples‘ communities, of the potential adverse and positive effects of the project on indigenous peoples; o Assessment of the vulnerabilities of and risks to indigenous peoples communities from the project, given their close ties to natural resources; o Plan actions that either avoid adverse impacts or, where avoiding impacts is not feasible, minimizes, mitigate or compensates for those adverse effects; and o Plan actions to ensure indigenous peoples receive culturally appropriate benefits under the project.  Grievance Mechanisms: Accessible procedures to address grievances by the affected people and communities arising from project implementation. When designing the grievance procedures, assess the availability of judicial recourse and existing customary dispute settlement mechanisms.  Implementation Arrangements: identify all the partners, official agencies and individuals whose cooperation and participation is essential to implement the project, assess their capacity to fulfill the roles and responsibilities required, and include a realistic plan to ensure the needed capacity is in place to meet the schedule of implementation. 3.5 Environmental and Social management plans The Consultant Team shall prepare a detailed Environmental Management Plan (EMP) following the mitigation hierarchy (avoid, minimize, mitigate, compensate and offset) and including provisions for monitoring potential environmental and social impacts and risks and their mitigation and management during implementation and operation of the Project. The ESMPs shall include a cost estimate for ESMP implementation. Long term monitoring plan shall be included within the cost estimates. The ESMPs shall also cover work methodology for the Contractor, supervision arrangements, and proposed contractual clauses, remedies and penalties for non-compliance. is the ESMP shall be used to produce environmental and social specifications for civil works construction contracts, provide detaild, site specific management plans and a compliance framework. The Consultant Team shall includethe following components in the plan:  Management Plan for Physical Cultural Resources (including Chance Finds procedures)  Land Acquisition and Resettlement Plans  Rehabilitation plans for temporarily affected sites and borrow sites  Natural Habitat management plan  Worker and Public Health and safety plans for construction and operations  Public communication program  Traffic safety and transportation plan  Dust suppression and noise control plan during construction and operation  Plan to protect construction site from outside influence and camp management plan  Indigenous Peoples Development Plan

 Construction spoils and solid waste handling and disposal plan  Long term monitoring plan  Grievance Management Plan and grievance redress mechanism (GRM) ton ensure grievances from Affected Communities and external communications from other stakeholders are responded to and managed appropriately;  Identification of roles and responsibilities of the implementation organization and various stakeholdersto accomplish the EMP, assessment of the capacity to deliver those responsibilities, and  Recommendations for budgeting and technical assistance for capacity building and support for EMP implementation. The plan to mitigate impacts shall be developed for the construction/installation phase and operations phase, respectively. The Consultant Team shall determine the stakeholders to be involved in mitigating impacts. 3.5.1 Monitoring Program A monitoring program on a timeframe of minimum 10 years should be elaborated in detail. It should include a list of issues to follow up,and identify monitoring indicator. 3.5.2 Adaptive Management Plan The adaptive Management Plans allows an alternative if the mitigation measure doesn‘t work as predicted. The consultant should prepare an adaptive Management Plans for the main mitigation proposed. Information may be found in literature on thesubject (Greig et al. 200813) 3.6 Plan for State and Public Consultation Public consultation of Project Feasibility Study and Environmental and Social Assessment documents is to be undertaken according to applicable World Bank policy guidance on consultation and disclosure as well as other internationally accepted practices for large-scale infrastructure projects. These are crucial mechanisms to support validation of impact assessment and mitigation plans and cost effective and timely preparation and implementation of projects. The project concept has been discussed with the Government of Mongolia and its ministries since its first concept development. This process is required by the Government of Mongolia and most international financing organizations. For example, it was noted in operational policy 4.01 of World bank. The Consultant is to develop a joint Consultation and Communications Program that will allow stakeholder involvement and inputs from public consultations and participation during the environmental and social impact assessment and regional environmental assessment. The development of this programme shall involve mapping relevant project affected stakeholder groups in the project area of influence, and timely disclosure of the consultation plan to these stakeholders prior to implementation. The Consultation and Communications Program will describe how substantive issues will be discussed in dialogue with stakeholders from multiple levels of government, Russian government, residents of the Project area, applied research institutes, civil society organizations, non-governmental organizations and interested individuals and citizens.

13 Greig, L, D. Marmorek and C. Murray. 2008. Guideline for Preparation of Adaptive Management Plans. Prepared by ESSA Technologies Ltd., Richmond Hill, ON for Fisheries and Oceans Canada, Western Arctic Area, Central and ArcticRegion, Yellowknife [NT] 8 pp.

The ESIA should be presented to Russian community and the consultation plan prepared must include Russian consultations. The purpose of the Russian consultation is to validate the work and to support exchange of information between Mongolia and Russian on transboundary impacts. A counterpart Russian consultant is to be identified and included in the design of the REA for the aspects requiring study in Russian territory. Initial consultations should be undertaken with potentially affected stakeholders in both Russia and Mongolia as part of a scoping mission to be undertaken prior to the submission of the inception report for the purpose of confirming the adequacy of the contents of this ToR. Feedback from these consultations should be fully recorded and a matrix developed demonstrating how this feedback is considered in the final ToR presented at the inception meeting. A formal record shall be made for each meeting, including the agenda, a list of participants and a summary of the issues discussed. Special measures will need to be taken to ensure that the views of women and vulnerable social groups are properly obtained and taken into account. Focus group meetings shall be organized with local administrative organizations and representatives in charge of Environment Management issues and special protected areas. The Consultation and Communications Program will commence at the launch of this ESIA and continue during the entire Project implementation process, especially during major construction activities. Although the Consultant Team will no longer be involved at that stage, the Consultant Team will need to train appropriate staff from the beneficiary parties to continue the consultation process during project implementation. 3.7 Disclosure of Information to the Public The purpose of this task is to provide information on project objectives, potential impacts, and mitigation options to the public in an adequate and clear way thereby facilitating public consultations and communication plans. Insufficient or false information to the public in advance of the Environment and Social Assessment Report might cause difficulties for project implementation or cause people to use inaccurate information for their own interest and purposes. Therefore, the Consultant Team should realize these conditions and develop the Environment and Social Assessment Public Consultation Plan—to assure accuracy and consistency. The Consultant Team shall contribute to the official project website, provide information, receive opinions and allow the public to submit requests for information. . The Feasibility Study, Regional Environmental Assessment and Environmental and Social Impact Assessment Reports are to be made available on the website. A special attention should be paid on providing local residents with information prior to project approval and start of construction works. 3.8 Incorporation of Suggestions by the Stakeholders The Environment and Social Impact Assessment should include records of public consultations and their suggestions. Plans for public consultations shall be developed with the cooperation of the stakeholders.

The public consultations shall include a brief Introduction of the project, the environmental and social issues and discuss the main conclusions of the Environmental and Social Impact Assessment including, mitigation of impacts and public opinions of the project‘s implementation. The Draft ESIA is to be disclosed at least four weeks prior to public consultation events involving NGOs and stakeholders from project affected communities. Feedback is to be recorded and a response matrix developed explaining how this feedback has been taken into consideration in the final draft ESIA report. 3.9 Capacity Strengthening of Project Stakeholders The Consultant Team shall develop a training program to strengthen the understanding of project stakeholders. Stakeholders shall be classified as directly affected or indirectly affected people, consumers, state organizations, public organizations and water resource management organizations. The training program shall include the above mentioned stakeholders and shall be specially directed to the specialists of water resource management organizations. A special plan shall be developed towards strengthening the understanding of specialists of Selenge river basin administrators and providers of supplies. The training program shall continue during the entire project development period. Although the Consultant Team will no longer be involved at that stage, the Consultant Team will train appropriate staff to continue the consultation process during Project implementation. 4 PHASING OF ESIA ACTIVITIES The consultancy for the ESIA must be conducted in a phased manner to support the steps of the Feasibility Study. The chart below gives an indication on how the ESIA and feasibility study should interact. The assessment of environmental and social impacts, including cumulative impacts, shall in the first stage of the study be conducted for the alternative sites no. 4 and no. 6 to give input the site selection to be conducted as part of the Feasibility Study. The identification of impacts for these sites shall be based on the Consultant‘s assessments and public consultations. Detailed information on the alternative sites and potential dam characteristics for these sites shall be retrieved by the ESIA Consultant from the Feasibility Study. The ESIA Consultant must actively seek this information from the consultant of the Feasibility Study. The estimated impacts for sets No. 4 and no. 6 shall be shared with the Feasibility study consultant in a transparent and clear way. The ESIA Consultant shall be available for giving clarification to the Feasibility Study consultant, if needed. Once the final selection of the best option for the Shuren HPP, the ESIA Consultant shall in a second stage of the consultancy update and fine-tune the results for this chosen site, and develop the appropriate mitigation and resettlement plans. It is anticipated that this will require further consultations with the project affected people. Again the ESIA Consultant shall coordinate and retrieve necessary detailed information on the planned conceptual design and operations of the proposed Shuren HPP to guide the proposed mitigations and resettlement plans.

The Consultant shall develop a work plan to accommodate the stages indicated in the below chart. TheConsultant shall hold workshops and conduct joint presentations with the Feasbility Study consultant on the proposed work plan after Inception, alternatives assessment and site selection, and Draft Feasibility Study and ESIA report.

Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Feasibility study Inception, Review of previous studies methodology Updated energy demand and sector analysis Update project area characteristic *-Updated hydrology and climate change assessment *-Updated surveys and geotechnical investigations Assessment of power evacuation alternatives and integration to CES Reservoir and Power modelling of alternatives sites Conceptual Desings of alternative sites Cost and benefits of alternative sites Site selection Complementary assessment, surveys and geotechnical investigations for selected sites Feasibility level design of HPP and transmission lines for selected sites Formulation of Implementation Plans Formulation of Dam safety and emergency preparedness plans Final cost estimation Financial and economic analysis Reporting and finalization of study REA/ESIA Stage One: REA Inception and Review of Previous studies Regional Environmental Assessment Update of project area characteristics Review REA findings and Update ESIA ToR

Stage Two: Detailed ESIA baseline Environmental Impact Assessment of Alternative Sites Environmental baseline survey Socio-economic baseline survey Cultural heritage survey Impact assessment of selected project site Cumulative Impacts Assessment Stage Three: Management and Mitigation Design Mitigation Measures Environmental Management Plan Stakeholder consultation Reporting and Finalization of Study International advisory committee review Workshops for presentation of results

5 Deliverables by the consultant 5.1 Introduction There will be a logical sequence of (1) Regional Environmental Assessment (REA) and (2) techno-economic FS, and ESIA. The REA will look at the potential project in a river basin- wide scope, assess the project‘s incremental contributions to the cumulative impacts of existing, planned and potential projects and developments, that cound act or are acting as stressors to the basin‘s hydrological and ecological systems. The REA will also review the site selection criteria and identified sites under the above pretext. The Feasibility Study (FS) and Detailed Environmental and Social Assessment (ESIA) shall be performed simultaneously under individual agreements with separate Consultants. The Feasibility Study shall include hydrological, geological, engineering, technical, financial, economic, legal and institutional studies used for developing the project concept and justifications for its implementation. The Environmental and Social Assessment will include information collected during public consultations. Results from these two consultancies will establish the basis for decisions on implementation of the project. 5.2 Deliverables Deliverables produced as a result of this TOR will be packaged as described in this section. The Consultant must provide short written monthly progress reports during the implementation of the Project to communicate unexpected problems and to resolve problems in a timely manner. The inception reports, monthly progress reports and any other reports must be prepared in English and Mongolian. The main text of the Inception Report shall also be translated into Russian language. Annexes shall include the work plan and schedule and be clearly written. The drafts and final reports will be prepared in both English and Mongolian. Executive summaries and main text shall also be translated into Russian language. The Draft Final Reports must be printed in Mongolian and be submitted to the Client, the Ministry of Energy and to the Public Representatives for comments. All reports will be delivered electronically in Adobe pdf format, with hard copies in the quantities as specified in the contract. The consultant will propose, and upon the Client‘s approval, produce maps with supporting geographic and thematic information, supplementing the ESIA and REA reports. 5.2.1 Progress Reporting All reports listed below should be submitted in English and Mongolian. Unless otherwise stated, reports are submitted to the World Bank through the Project Implementing Unit according to the schedule given below. Inception Report (IR):The inception report shall include an annotated outline of the activities and resulting planned key deliverables in their interim and final versions , and be submitted in English to the PIU 30 days after the date of Contract Award. Proposed Work Program.The proposed work program should be submitted as part of the IR in English to the Technical Steering Committee 30 days after the date of Contract Award. Progress Reports: Short and concise (2-3 pages max) progress reports should be submitted in English to the Project Implementing Unit (PIU) monthly, following contract

signature. The progress report should present a very brief overview of progress in completing the tasks, difficulties in achieving the work as described in the contract, proposed alternate means to achieve the Project objectives, Client decisions required, status of budget and major scheduled milestones. It is anticipated that progress reports would be 1-3 pages maximum in length. 5.2.2 Regional Environmental Assessment (REA)t Draft Regional Environmental Assessment - The Draft Regional Environmental Assessment (REA)should be submitted within the time schedule set out below. The objective of the Report is to present key findings and the most relevant information and data rather than general and non-specific information. The Report should be concise and limited to significant social and environmental issues, but there should be a detailed description of the intended structure of the Final REA, including including full drafts of the subsidiary reports that will be submitted to fulfill the requirements of the specific Safeguard Policies found to be applicable to the Project. Final Regional Environmental Assessment- The Final Regional Environmental Assessment should be submitted within the time schedule set out below. The Report should provide complete details of all work performed, analyses made. This report will build upon the reports completed previously and integrate comments received from the Government of Mongolia, World Bank and other reviewers, and include issues raised and discussed at workshops and review meetings, in addition to written comments. The Final REAwill be delivered to the Project Implementing Unit, and will include the necessary subsidiary reports to meet the specific Safeguard Policies and requirements of this TOR. 5.2.3 Environmental and Social Impact Assessment (ESIA) Draft Detailed Environmental and Social Impact Assessments The Draft Detailed Environmental and Social Impact Assessments and a detailed Executive Summary of key findings and recommendations should be submitted within the time schedule set out below. The objective of the Reports is to present key findings and the most relevant information and data rather than general and non-specific information. The EISA Reports should be concise and limited to significant social and environmental issues, but there should be a detailed description of the intended structure of the Final Environmental and Social Impact Assessments, including full drafts of the subsidiary reports that will be submitted to fulfill the requirements of the specific Safeguard Policies found to be applicable to the Project. Final Detailed Environmental and Social Impact Assessments The Final Detailed Environmental and Social Impact Assessmentsshould be submitted within the time schedule set out below. The Reports should provide complete details of all work performed, analyses made. This report will build upon the reports completed previously and integrate comments received from the Government of Mongolia, World Bank and other reviewers, and include issues raised and discussed at workshops and review meetings, in addition to written comments. The Final ESIAswill be delivered to the Project Implementing Unit, and will include the necessary subsidiary reports to meet the specific Safeguard Policies and requirements of

this TOR, including the Environmental Management Plan, Indigenous Peoples Development Plan, Physical Cultural Property Management Plan, final Resettlement Policy Framework and Resettlement Action Plan. Public Consultation Program Report - The Consultation and Communications Program Report should be submitted to the PIU according to the time schedule set out below. The Project Implementing Unit and Project Steering Committee will organize review meetings and maintain written minutes of meetings to record the major comments. The Consultation and Communications Program Reportwill be delivered to the Project Implementing Unit and should include soft copies of the database of meeting minutes and other public contact records. 5.2.1 Russian Participation The consultant should prepare Russian language versions of both REA and ESIA, to be presented to Russian authorities and public. The public is concerned about potential impact on the Selenge estuary and Lake Baïkal. Therefore they should be informed and consulted on the results of the impact assessment and mitigation measures. Consultation meetings, presentations, and development of information tools suited to the Russian community should be included in this work. Reports should follow World Bank and Government of Mongolia requirements for content and format. 6 Management of the environmental and social impact assessmentwork 6.1 Roles and Responsibilities Roles and Responsibilities of Project Implementing Unit: The Project Implementing Unit is responsible for providing managerial guidance and monitoring progress of the Environmental and Social Impact Assessment. The Project Implementing Unit shall monitor the fulfillments of the Consultant and shall receive the reports on the Project from the Consultant for review and approval by related organizations. The Project Implementing Unit shall monitor the activities of the Consultant all times and shall report to the Client. Roles and Responsibilities of the Client: The Client for the Project is the Ministry of Energy of Mongolia. The Working Group headed by the State Secretary of the Ministry of Energy shall perform the monitoring with assistance of Project Implementing Unit during the Study Phase. The Working Group shall review and discuss the reports on Project phases and shall grant necessary approvals when required. Roles and Responsibilities of the Consultant: To ensure fulfillment of Environmental and Social Impact Assessment within a timeframe, the Consultant will be fully responsible for regulating their activities under transparent and united management. The Consultant shall be responsible for ensuring work interrelations, exchanging official information and organizing meetings with Consultant‘s management and other key and non-key experts —as required --and in a timely manner. In addition, the Consultant will submit work fulfillments and will hand over reports to the PIU and the Client in compliance with Work Schedule for discussion and approval after including their recommendations. Roles and Responsibilities of International Advisory Committee: The Consultant‘s work and output will be reviewed by an international Advisory Committee assigned by the Client. The committee will include international renowned experts in the environmental and social

fields who will review the results of both the feasibility study and the ESIA. The committee will review main outputs, including the draft inception report, site selection report and feasibility report. The Consultant for the ESIA shall respond to the committee‘s comments and recommendation and incorporate these, or if they cannot be incorporated provide clear rationale, in the final report.

6.2 Consultant Time Schedule The work of the Consultant will be supervised by the Project Implementing Unit, which will be the focal point for coordination with all other ministries, agencies and any other international institutions. It will also provide liaison and contacts with the academic and applied research institutions, Civil Society Organizations and Nongovernmental Organizations. The following Tables present the timing of major milestone events for the production of the reports described above. The Consultants Team should begin work upon contract signature. The Consultants Team should submit a detailed work plan and schedule with critical milestones with allowance for Project Implementing Unit and external reviews.

Time-framework for Regional Environmental Assessment (REA) No Objective Month 1 Submit Inception Report 1 2 Participate in Joint Study Launch Workshop 2 3 Submit Consultation and Communication Program 2 4 Submit Annotated Outline of REA 2 5 Submit Draft REA 5 6 Submit Final REA 6

After finanlization the REA will be reviewed and assessed by the Client and the World Bank regarding its implications for the further design and ESIA process, including a decision if to proceed with project development. Also, the REA will be disclosed in-country and in the WBG‘s infoshop. It will be shared with transboundary counterparts in the Russian Federation, and public heatrings organized in Mongolia and Russia, as well as expert consultations. The information and feedback gathered during this process will contribute to a decision if to proceed with further project development. If a decision is taken to proceed with FS and related E&S studies, the tentative timetable would be as follows: Time framework for Final Environmental and Social Impact Assessment (ESIA) Months No Objective from decision point (DP) 1 Submit work program for EISAs DP +1 2 Submit Annotated Outline of EISA and Subsidiary Reports DP+7 3 Submit Draft EISA DP+10 4 Submit Public Consultation and Communications Report DP+10 5 Issue Final Environmental and Social Assessments DP+14

Follow the above time schedule for producing the reports. The Consultant shall start work upon signing a contract. 6.3 Ownership and Control of Information, Data and Documents All information and data, all intellectual property rights, ownership, licensing provided to the Consultant Team shall be used only for this Study and assessment. Documents and information/data provided to and/or generated by the Consultant Team shall not be disclosed without the expressed written consent of the Project Implementing Unit.

7 Requirements for the ConsultantTeam The Consulting Team should be a consulting firm or a consortium experienced in performing work on projects similar in size and complexity. Consultants may associate with other firms in the form of a joint venture or a sub-consultancy to enhance their qualifications.. Minimum qualification requirements of Consultant Team specialists for Detailed ESIA with public consultation are presented below: 7.1 International team minimum to contain ESIA Team Leader  Team leader who should have a minimum of 15years project management experience in environmental and social impact assessments, nature resource utilization planning, river management, land planning strategy and environmental impact assessments It is competative advantage if have a experience of management and coordination hydroelectric project;  Have work experience with environmental impact assessments at overall level implemented by World bank and International Financial corporation in developing countries;  Experienced with similar projects with government, civil society and public;  Experienced with initial studies and research according international requirements;  Has demonstrated the capability to coordinate efficiently multi-directional project implementation including related participants and companies;  Qualified to consult and manage project staff and specialists;  Have a Master‘s degree in environmental management, impact assessment or area planning;  Possess sound organizational skills and able to deliver assignments in a timely manner often under severe time pressures;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project and establish priorities;  Have strong inter-personnel skills and commitment to work in a team-oriented project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Lead Environmental Assessment Specialist  Should have a minimum of 15years project management experience in environmental and social impact assessments, nature resource utilization planning, river management, land planning strategy and environmental impact assessments Should have an experience in hydroelectric project.  Have a Master‘s degree in environmental management, impact assessment or area planning;

 Have work experience less than 5 years with environmental impact assessments at overall level implemented by World bank and International Financial corporation in developing countries;  Have researching skill and capability to decide correctly;  Ability to analyze and summarize multi type of information  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Lead Social Assessment Specialist (Land Management and Resettlement)  Should have a minimum of 10 years experience with land management issues and implementing donor organization resettlement policies; project management experience in environmental and social impact assessments, nature resource utilization planning, river management, land planning strategy and environmental impact assessments  Experienced in planning and implementing resettlement programs for semi-nomadic pastoral populations;  Have a Master‘s degree or higher in a related field;  Have work experience with environmental impact assessments at overall level implemented by World Bank and International Financial Corporation in developing countries;  Experience in conducting and documenting detailed public consultations for resettlement planning;  Have research experience and good decision making skills;  Ability to analyze and summarize multi type of information  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Ichtyologist  Have a Master‘s or higher degree in ichthyology;  Shouldhavea minimum of 10 yearsworkexperience, including field work and data gathering programs;  Have work experience with environmental impact assessments and report writing at overall level implemented by World Bank and International Financial Corporation in developing countries;  Work experience in biological species study, aquatic and fishstudies on similar projects.  Professional skills to process information with work experience in estimation modeling;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;

 Have strong inter-personnel skills and commitment to work in a team-oriented project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Freshwater Ecologist/Limnologist  A Master‘s or higher degree inecology or related field. Shouldhavea minimum of 10 yearsworkexperienceof freshwater ecologist/limnologist, including field work and data gathering programs;  Have work experience with environmental impact assessments and report writing at overall level implemented by World Bank and International Financial Corporation in developing countries;  Have Professional skills to process data;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient in PC based software applications relevant to the ESIA scope; 7.2 National team National team experts should participated in the ESIA depending on availability and qualifications against the following criteria: The Deputy Team Leader for Environmental and Social Assessment  Deputy Team leader who should have a minimum of 5 years project management experience in environmental and social impact assessments, nature resource utilization planning, river management, land planning strategy and environmental impact assessments;  Have work experience with environmental impact assessments at overall level implemented by World bank and International Financial corporation in developing countries;  Has demonstrated the capability to coordinate efficiently multi-directional project implementation including related participants and companies;  Qualified to consult and manage project staff and specialists;  Have a Master‘s degree in environmental management, impact assessment or area planning;  Possess sound organizational skills and able to deliver assignments in a timely manner often under severe time pressures;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project and establish priorities;  Have strong inter-personnel skills and commitment to work in a team-oriented project;  Fluent oral and written English and Mongolian;

 Proficient inPC based software applications relevant to the ESIA scope; Hydrologist  A Master‘s or higher degree in Hydrology or a related engineering field. Should havea minimum of 10 years work experience;  Experienced with projects implemented in Mongolia;  Professional process skills and work experience in estimation modeling;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Meteorologist  A Master‘s or higher degree in Meteorology. Should have a minimum of 10 years work experience;  Have professional software skills to process and summarize weather data;  Professional process skills and work experience in estimation modeling;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Hydrogeologist  A Master‘s or higher degree in hydrogeology or a related technical field;  Should have a minimum of 10 years work experience of underground water investigation in Mongolia or dry land region. It is competative advantage if have a work experience in similar project in Mongolia;  Possess professional skill to process information and work experience in flow estimation and modeling;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Geological Engineer  The specialist shall be a Geological Engineer;  Should have master or higher degree in geology;  Should have a minimum of 10 years work experience in his profession;

 Experienced in geological survey and investigation for hydraulic projects implemented in the dry region, in Mongolia or similar region and have not less than 10 years experience. Similar project experience in Mongolia shall be an advantage;  Information on the development of professional skills and have experience working on computational modeling;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project and prioritize tasks;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Ecologist  A Master‘s or higher degree in Ecology. Should have a minimum of 10 years work experience;  Have work experience in similar project in Mongolia and work experience with environmental impact assessments at overall level implemented by World bank and International Financial corporation in developing countries;  Have Professional skills to process data;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Biologist  A Master‘s or higher degree in Biology. Should have a minimum of 10 years work experience;  Have work experience in similar projects;  Experienced to assess bio diversity of regional biology;  Experiences in research according international requirements  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Botanist  A Master‘s or higher degree in Botany or related field. Should have a minimum of 10 years work experience;  Have work experience in similar projects;  Experienced to assess bio diversity of regional biology;  Experiences in research according international requirements;

 Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Social and land specialist  Should have a minimum of 10 years experience in environmental and social impact assessments, land use planning strategy and environmental impact assessments  Have a Master‘s degree or higher in sociology oreconomics;  Have work experience with socio-economic studies on internationally funded projects;  Have researching skill and capability to decide correctly;  Ability to analyze and summarize multi type of information  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope;

Archaeologist  A Master‘s or higher degree in Archaeology or related discipline. Should have a minimum of 10 years work experience in cultural heritage management;  Have work experience in similar projects;  Experienced to assess tangible and intangible cultural heritage and develop appropriate management plans;  Experiences in research according international requirements  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient in PC based software applications relevant to the ESIA scope;

Anthropologist  A Master‘s or higher degree in Anthropology or related discipline. Should have a minimum of 10 years work experience in cultural heritage management and stakeholder engagement;  Have work experience in similar projects;  Experience in conducting and documenting free, prior and informed public consultations and developing tools and processes for including vulnerable social groups such as women, youth and minorities in community engagement programmes  Experienced to assess tangible and intangible cultural heritage of vulnerable cultural groups inhabiting the project area and develop appropriate management plans;

 Experiences in research according international requirements  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope;

Land Specialist  Should have a minimum of 5years project management experience in environmental and social impact assessments, nature resource utilization planning, river management,both formal and informal land tenure systems, and environmental impact assessments;  Have a Master‘s degree in land management;  Have professional skill for GIS software and process data  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project and establish priorities;  Have strong inter-personnel skills and commitment to work in a team-oriented project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; GIS specialist  Have a Bachelor‘s degree in geography, hydrology, ecology or environmental;  Have professional skill for GIS software and process data  Have a minimum 8 years work experience as GIS specialist, with at least one year experience with the specific GIS software used by the MEGD;  Possess professional skill to process information and work experience in estimation modeling;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project and establish priorities;  Have strong inter-personnel skills and commitment to work in a team-oriented project;  Fluent oral and written English;  Proficient inPC based software and GIS applications relevant to the ESIA scope; Ichtyologist  Have a Master‘s or higher degree in ichthyology;  Should have a minimum of 10 years work experience;  It is competative advantage if have a work experience in similar project in Mongolia;  Work experience in biological species study, aquatic and fish study;

 Work experience with piscalogy in water fond;  Professional skills to process information with work experience in estimation modeling;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; Soil Specialist  A Master‘s or higher degree in profession as a Soil specialist. Should have a minimum of 10 years work experience;  Experiences in research according international requirements;  Professional skill to process data;  Demonstrated initiative in developing practical approaches that improve efficiency and effectiveness of the project;  Fluent oral and written English;  Proficient inPC based software applications relevant to the ESIA scope; The Consultant may propose an alternative team structure or may add required specialists who not listed in above. International specialists should have National counterparts and the ESIA Consultant will have to be prepared for Mongolian translation for all meetings and public interactions. The ESIA Consultant will be required to have a project office in Ulaanbaatar to properly accomplish the work described in this TOR, and be prepared for travel to remote areas with minimal infrastructure to accomplish field work requirements.

8 Payment Schedule Payment schedule:  Ten percent (10%) as an advance payment against the submission of a bank guarantee for the amount.  Five percent (5%) upon acceptance of the Inception Report/Work Program and the Consultation and Communications Program.  Ten percent (10%) upon acceptance of the Annotated Outline of Environmental and Social Impact Assessment Report or the Sub-Studies Reports.  Thirty percent (30%) upon acceptance of Preliminary Draft Environmental and Social Impact Assessment Reports or the Sub-Studies Report.  Five percent (25%) upon acceptance of the Environmental and Social Impact Assessment Report or the Sub-Studies Reports.

 Twenty percent (20%) after receiving an approval letter from the Client and upon acceptance of the Final Environmental and Social Impact Assessment Report or the Sub-Studies Report.

Annex 1: Guidance on Baseline Studies

Baseline study of environment and social impacts The Consultant shall:  Delimit and describe the project‘s area of influence in which impacts and effects, both direct, induced, and cumulative are anticipated and present on a map.  Review the comprehensive ecosystem along Selenge river with trans-boundary section based on biodiversity and its including major habitats that will be affected, (both in the direct and indirect area around project area site) critical habitats, the potential introduction of invasive species, the range of and status of the main species groups that live in the Selenge river area.  Collect and review existing secondary information and undertake field studies to determine baseline environmental conditions in the project‘s area of influence. This includes the characteristics and functions of aquatic and terrestrial ecosystems, biodiversity, and any other salient features characterizing the bio-physical environment;  Review secondary sources and carry out field work to take stock of social and cultural components of the project‘s environment, including identification of infrastructure and settlements, economic activities, and land use, including agriculture and animal husbandry as well as seasonal economic activities, ethnic and cultural factors.  Identify development trends and planned future hydrological or other investments in the project‘s area of influence to assess potential cumulative impacts on relevant sections of the hydrological basin area. This baseline study will document the current condition for comparing any adverse effects that could occur from the project in the future, required boundary conditions for the ESIA, and will be used to determine valued ecosystem components and environmental components, and to assess significant impacts, to develop the management plans for preventing, mitigating, offsetting and monitoring plans. Therefore, when the consultant is preparing to do the environment and social baseline study, work planning must cover both the two types assessment reflected in above 2.1: REA and ESIA. When the consultant is conducting the baseline study, they should consider the following issues, but the Consultants are not limited to only these issues. Climate and air quality Determine the main climate characteristicsof the regional area where the project will be implemented, average monthly based on observation materials of long term period, and determine how the weather and climate conditions affect the livelihood of human beings and project operations. In order to determine the air quality of the region, take air samples and have them analyzed at the laboratory. Select the necessary ones from the following indicators: nitrogen oxide (NOx), sulfuric dioxide gas (SO2), carbon monoxide (CO), small dust particles (PM2.5 and PM10), lead (Pb), other heavy metals, and if necessary, greenhouse gas can be included. Field measurement, sampling, photos, the test results of laboratory, relatedmaps will be attached. Physical geography conditions, geology and geomorphology The first thing that needs to be done when carrying out an environmental baseline assessment is to determine the location, physical geographic conditions and territorial landscape types of the area where the project will be implemented, do the mapping and prepare the table of legends.

The project site, geological formations, stratigraphy, rock structure, historical development, age, tectonic structure and useful minerals of its surrounding area will be determined and the geological maps, crosscuts and layouts will be prepared. Main characteristics, development, types, processes, evolutions, negative and positive forms and morphologic structures of depressions and elevations of the project site should be determined and mapped. When doing this, it will be appropriate to produce separate maps for hillocks, sides and mountain tops by classifying the land surface shapes and geomorphologic elements upon conducting geomorphologic observations, measuring relative elevations and using topographic maps, aerial and satellite images. Terrain observation and analysis shall be conducted during the field study process of the environmental baseline assessment by using the fixed-route method, in order to determine the origin, structure and dynamics of the terrain. The consultant should describe and map the geomorphological shore for fish habitat studies. Surface and ground water During the field research of hydrology will be determined surface water network of the project area, hydrological conditions, surface and ground water resources, procedures, the quality of the many years measurement data and hydrology, and seasonal and annual changes will be determined. Also, current level of surface and ground water use, pollution and resource of the project area, field measurement will be evaluated, test results will be processed and the related map will be developed. The thermal characteristics of the river should be considered as a potential change in the flow regime from the Power plant downstream. The ice cover will be described and the impact of the power plant on the ice cover downstream has to be documented. Determine the main surface water network, hydrological balance and resource (with an appropriate methodology) of regional area where the project will be implemented, do the mapping and prepare the table of legends.Determine and measure the current and future tendency of water distribution, quality, shortage and pollution. Take samples from water objects, label them and forward to domestic or foreign testing laboratories holding a standardization certificate, in order to have the following indicators determined.  Mineral content,  Nutrient pollution indicators,  Oxygen mode indicators (Dissolved oxygen, biochemical oxygen demand – BOD5, permanganate oxidation, bichromate oxidation, etc.)  Heavy metals: Hg,Fe,Mn,Ca,K, Na,Se, Phosporous  Special indicators: petroleum and petroleum products, fat and surface active substances. Furthermore, determine whether there is a cross-impact with groundwater and develop a map of the surface water. This study shall determine the region which the project site belongs to, in terms of regional hydro-geological formation. Also, it will determine to which of the following areas the basin, zone, massive characteristics and project location belong to: the groundwater feeding zone, the watershed, the source of water formation, the water accumulation zones or the feet zone. Moreover, the age order of water containing layers distributed throughout the area, natural formation of the location, collecting characteristics, hydraulic characteristics of the contained

water, numeric indicators of the groundwater dynamics and reserves, chemical properties, quality and reserves will be studied and determined, followed by the preparation of hydro- geological maps, cross-sections and layouts. When and if required, produce hydroisobath maps and pollution distribution maps. If a glacier has been formed throughout many years within the project site, study its thicknesses and structure, determine its physical properties and heat process, and then the map of the glacier can be inserted. Hydro-geological field observation and research work of the environmental baseline assessment must cover the entire territory by recording route lines and observation points. The area of the hydro-geological path direction should be set along the crosscuts and study objects, and the distance between the observation points must be set depending on the locations of water exposures, springs, wells and boreholes. During the study, set the groundwater feeding, accumulation and foot zones separately, and determine which zone the project location belongs to. The main focus should be on determining the impacts that may be caused due to project activities. It is required to accurately record the hydro-geological path survey notes, and the observation must be conducted in an uninterrupted way. Field measurement, sampling, photos, the test results of laboratory, related maps will be attached. Soils and Vegetation cover Determine the soil type of the project site and its regional area, study the soil distribution, morphologic characteristics, physical and chemical properties of water, nutrient and pulp contents, and produce a map of the soil cover. During the field study, select an area that can fully represent the common characteristics of the soil and do the main (1.0-1.5 meters in depth) and partial (50-80 cm) cross cuts in order to determine the morphologic characteristics of the soil distributed in the territory and take soil samples. Once the morphologic properties of the soil are recorded, take samples from each layer of the soil and document them by taking photos and making video records. The weight of each sample must be approximately 0.5 kg, and they must be properly labeled indicating the territory name, location, cross-section number and depth at which the sample was taken. Then the samples are to be forwarded to the respective laboratory. Also, during the field study, study the characteristics of the area, soil fertility and the process of being covered with topsoil. Select monitoring points upon considering the land use forms and utilization types, record the primary soil conditions, measure and take samples. In order to determine the soil fertility and pollution, forward the samples to the laboratory for analysis: 3- pH, pulp, ammonium (NH4), nitrite (NO2), nitrate (NO3), phosphate (PO4 ), petroleum, petroleum products, heavy metals such as As, Hg, Cd, Pb, Ni, Cr and Se, etc. Flora Identify and list the plant species occurring within the project site. Determine the main groups of plants, their characteristics and biomass, and provide comments. Determine which plant species are rare, endangered or acclimatized, their distribution and protection statuses. Also, produce a map of the vegetation cover for the entire project and regional area. During the field study of the environmental baseline assessment, select an area where the reserves and crop yields of the plant species can be determined and make measures of the vegetation growth. It would be appropriate to determine the vegetation cover size by using

the most suitable method from the following ones: visual, cover projection or quantity-weight methods. Forests Identify the forest characteristic and quantify the volume impacted by the project. Propose a strategy of recovery in the reservoir. Undertake a detailed survey in the prospective reservoir area(s) for planning of salvage logging.

Fauna Determine the wildlife species occurring in the territory, their distribution ranges, habitats and movements, as well as the species that became extinct or fled due to economic activities, their populations and future tendency. For birds, amphibians, reptiles, mammals and insects a list of species should be identified. The impact on bird populations of the delta should be studied where Shuren Power Plant changes the water flow regime downstream. During the field study of wildlife, identify the invertebrate and vertebrate species, their concentration and population sizes in accordance with special methods, in order to provide a baseline assessment on the wildlife of the region. Make a list of rare, endangered and critically endangered animals, and evaluate the current status of their populations and habitats. During the field study of animals, the most suitable method can be selected from the following ones: capturing small mammals in the selected area by placing live traps, capture-mark-recapture method by placing live traps and using the linear transect method, animal living forms, activity tracks, shining light on the nocturnal animals. During winter, study tracks left on the snow cover. During the warm season, study animal droppings, habitats, food leftovers and domains. During the mating season, carry out observation near the water sources and estimate the population. The breeding habitat of mammals should to be determined in the reservoir of the project to qualify the impact. The consultant should conduct research and present a list of fish species on the dam site. They should make an analysis of classified species, endangered or threatened. A description of fish habitat for the most important species should be presented. Draft of habitat lost or gain is expected for each species, in the reservoir and downstream. The consultant should identify the spawning site in the Serenge River near the dam site. Migration route for each species should be identified at the dam site. Estimate the fish population by placing samplers in certain parts of the watercourse. The distribution, adaptation, habitats and rarity status (globally and regionally) of vertebrate species of Mongolia can be done assessed according to the criteria set by the International Wildlife Conservation Society, and their conservation statuses can be determined by using other information sources such as the Red Book of birds and mammals of Mongolia, and wildlife conservation plans. Physical pollution The current level of the project areas noise and vibration and physic pollutions will be determined. Drawings, field measurement, original copies of the test results and related equipment will be attached.

Natural, historical and cultural heritage Natural, historical and cultural heritages include areas with cliffs, rivers, lakes and mountains of unique formation, historical monuments, religious sites and objects, cemetaries, sacred trees special protected areas and areas with beautiful nature. Some objects may have special status or significance attached by the local population, regardless of their physical characteristics. The Consultantis required to determine their characteristics, significance, protection status and current state, consider their conservation measures and input assessment andinformation on current management capacity. Society and economy Study the households living in the project site or its surrounding areas who are likely to be affected directly or indirectly by project activities, records of family members, their current living standards, employment statuses, income levels, land ownerships, ownership of immovable and movable real properties, water supply, pasturelands, cultivation territories, information supply, public services (education, hospital, utilities, power supply, etc.); and reflect the results in the report. In addition to this, provide local people with information on the project being planned for implementation and reflect their opinions in the assessment. Study and reflect information on the current level of health of local people, diseases, average lifetime expectancy, vulnerability to infectious diseases, and main sanitary and hygienic indicators. Determine and assess other indicators that document the social and economic development levels, such as the populations of administrative units (bag, soum, district and aimag), age, gender, labor resources, budget revenue, expenditure, employment rate, average income earned, current level of industrial, agricultural and infrastructural developments, trade turnovers, etc. Also, in this section, it would be appropriate to include brief information on other projects being implemented in this area. Potential impacts of proposed project The impact assessment requires an accurate documentation of environmental and social baseline studies identifying the current conditions, in order to assess any adverse impacts from the chosen locations of Shuren HPP, and to select the best scenario with minimum impacts to the environment. After the impact assessment, the ESIA must also develop related management plansas noted in section of 3.4 (see below). Any hydropower project depends on installed capacity and the size and design of the dam and related facilities will produce specific changes to the quality of the environment and its bio-geo-physical-chemical and ecosystem properties. Particular aspects to be considered among others include the micro-climate, water resources, river bottom sediments, sediment transport, hydraulic properties and earthquake risk and vibrations. Areas of the project site will be flooded leading to land use, cultural heritage and resettlement issues in the project area as a result of direct or indirect impact. Hydrology, hydrogeology studies The Shuren HPP project that is planned on the Selenge River, understanding of impacts related to the hydrology and hydrogeological condition greatly depends on the feasibility

study. In the range of this study, the consultant has discussed and worked with the advisory team about required additional research and has determined adverse impacts of regional surface and ground water. Herein, is being considered source of water supply in Erdenet city. • The ESIA should identify the actual and future flow regime at the Serenge River and the influence of this change in the Delta. The consultant should present the water variation level downstream during the reservoir filling, and during the power station production. The zone of influence should be as far as the impact may be registered. The consultant should indicate if there is an impact on the delta or estuary of the Selenge River or in Lake Baïkal. • The cumulative impact on the production of the four power stations (12 000 MW) on the Angara River should be determined. (Irkurstk 662,4 MW, 4500 MW, Bratsk Hydroelectric Power Station Boguchany Dam 2997 MW, Ust-Ilimsk Hydroelectric Power Station, 3840MW). The powerhouse production management should be present as a potential impact on fish habitat, water level downstream and potential impact on erosion.

Micro climate change impact assessment Currently two possible sites are being selected for construction of Shuren HHP. Consultant should assess and compare how selected sites among other alternatives will effect on microclimate condition and surface water balance of the area that where project will be implemented. In order to predict future hydrological condition of Selenge river basin, the regional climate change has to be determined based on regional climate modeling system or results from existing comparable dams. The consultant will evaluate the greenhouse gas emission level during the project construction (using heavy machinery and high traffic volumes) and operation by determining the capacity of power after the project implementation, evaluate the amount of energy that can be produced per year, and make comparisons with the greenhouse gas emission levels from coal-fired thermal power stations to assess net greenhouse gas emission levels. Biodiversity in Selenge river basin This is very hard to determine the long-term impact that has shown from the project area to regional biodiversity and ecosystem services. Though, the consultant should assess the direct and indirect impact to regional biodiversity and ecosystem services of the project area. Also, the receptor of the project impact, interested parties and local people understanding about biodiversity and ecosystem services required to determine by group meeting, opinion poll and so on. In order to assess the impact, it is important to make a rapid ecosystem assessment, which is considered on the main results and conclusions of environmental baseline study. After that, should consider on the adverse impacts that could occur during the project activities, and to determine all impacts that could effecton the biodiversity in regional level. Thus, the consultant identify and to process related information previously collected in the region of the project area, make a summary, conductroute and baseline study during field measurements on the regional environmental important components (see 3.1) of the project area, and to do research on landscape level study on the region of the project area that is

linked with general plan of the project, also to determine on ecosystems important components that could be impacted.

Annex 2: Guidance REA (regional environmental assessment)

Stages of Environment and Social Impact Assessment By pre-feasibility, study of ―The Shuren HPP The project‖ has shown that the convenient options to build the project area based on 2 sites, which are № 4 and № 6located between Khyalganat village and Zuunburensoum. As due diligence the consultant should reviewthe initial screening of these potential sites during earlier phases and explain in detail the rationaleforincluding the options recommended for study in the ESIA. This should include a comparison on all technical, economic,social and environmental issues between the recommended options, options dropped during earlier phases and assessment of alternatives that involve not proceeding with the project. Under this evaluation the consultant is responsible to assess the potential risk, any adverse effects from choosing options on the current status of the project, further to observe the environment, human health and socially acceptable options, to avoid and preventas far as possible any negative effects,, and to develop measures of mitigation and offsets in the regional field. For example, comprehensively take into account both environment and social issues as an important component (water bodies, air, plant, soil and animals and their living environment) of the environment of the Selenge lake (up and down from the hydroelectric power station) and social issues (human health, indigionsand resettlement etc.) Regional Environmental Assessment Framework The Project has been classified as Category ―A‖ according to the Environmental Social Management Framework of MINIS14, World Bank Environmental Assessment Operational Policy 4.0115, and therefore the proposed project must conduct an Environmental and Social Impact Assessment and Regional Environmental Impact Assessment. Proposed location of the project is situated at Selenge River between Khyalganat and Zuunburen. Selenge River is a Transboundary River originating in Mongolia and is important for Baikal Lake's ecosystem. Therefore, the spatial boundary of regional environmental assessment has to be extented up to Baikal Lake. The consultant is to closely review studies and registration of Lake Baikal as a UNESCO World Heritage Site and the Selenge Delta as Ramsar Site 2RU018. A methodology for regional environmental assessment has to be developed by Consultant team. Purpose of regional environmental assessment The main purpose of the REA is to improve investment decisions by bringing environmental opportunities and constraints into development planning at the regional level. It is used during the early stages of development planning, before decisions about specific projects have been made and with the purpose of influencing such decisions. Regional environmental assessment will also inform assessment of comprehensive cumulative impacts (additive, interactive and significant impact) on environmental and social components from the many ongoing projects activities in regional scale.

14Source: http://www.minis.mn/file/files/ESMF_MN_Oct2013.pdf 15Source: http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/EXTPOLICIES/EXTOPMANUAL/0,,contentMDK:20064724~menuPK:45 64185~pagePK:64709096~piPK:64709108~theSitePK:502184,00.html

Analysis of Alternatives The REA should compare the proposed project with feasible alternatives, including assessing options that involve ‗the without project scenario‘ and explaining in detail these options and the assessment which justifies proceeding with a particular alternative. This analysis should involve comparison of the environmental and social impacts of the proposed projectwith other broad strategic options for the region including other known potential hydropower project locations.Alternative investment options, technology options, and alternative mitigation options should also be considered. Different options for reserviour size and dam construction should be analyzed to find the best project with low impact. Projections of Cumulative Impacts The Consultant will identify and compare positive and negative cumulative impacts within the project area. The Consultant should closely review the suggested methods in the guidance of cumulative impact assessment of International Finance Corporation (IFC, 2013 , page 4316 ) and Mongolian guidelines for cumulative impact assessment. The Consultant is responsible for explaining the scientific rationale for the selection of all methods that will be applied during the cumulative impact assessment. The ESIA Consultant will analyze the proposed project on a regional basis and identify the likely impacts that will occur during implementation and over the operating life of the project. The consultant will consider current and known planned projects and consumers of water and power over a period spanning the next 20 years as a potential source of cumulative impact (for example, Orkhon, Egiin and Tuul HPP).This analysis shall focus on Valued Environmental and Social Components (VECs) identified that reflect public concern about social, cultural, economic, or aesthetic values, and also the scientific concerns of the professional community. The Cumulative Impact Assessment (CIA) should meet the following objectives:  Assess the potential impacts and risks of a proposed development over time, in the context of potential effects from other developments and natural environmental and social external drivers on a chosen VEC.  Verify that the proposed development‘s cumulative social and environmental impacts and risks will not exceed a threshold that could compromise the sustainability or viability of selected VECs.  Confirm that the proposed development‘s value and feasibility are not limited by cumulative social and environmental effects.  Support the development of governance structures for making decisions and managing cumulative impacts at the appropriate geographic scale (e.g., airshed, river catchment, town, regional landscape).  Ensure that the concerns of affected communities about the cumulative impacts of a proposed development are identified, documented, evaluated and addressed.  Manage potential reputation risks. The cumulative impacts must consider impacts of other power projects, other potential water uses and the potential impacts of consumers of power.

16Source: http://www.ifc.org/wps/wcm/connect/3aebf50041c11f8383ba8700caa2aa08/IFC_GoodPracticeHandbook_CumulativeImpactAss essment.pdf?MOD=AJPERES

Assessment of cumulative impacts should employ information from a variety of instruments including, regional and local environmental, social and resource studies, programs and/or planning documents; strategic, sectoral, and regional assessments; project impact assessments, cumulative impact assessments, and targeted studies on specific issues.17 Regional Environmental Assessment Stages It is important to determine the stages of regional environmental assessment that will meet the requirements of guidance in both of World Bank and Mongolia. The team shall identify the current environmental and social condition of the Selenge river basin, main negative impacts caused or are being caused on the environment, society and human health, the intensity, scope and distribution of their consequences, sources and courses of the negative impacts, the probability, severity and of impacts, as well as the level of confidence in predictions, or their margin of error. Upon identifying impacts, the team shall assess specific legal / regulatory commitments affected and identify any gaps between Mongolian legal and regulatory provisions and those of the World Bank environmental and social safeguard policies. REA will provide an analysis of such gaps and suggest measures needed to close gaps. The REA will then assess measures for avoiding, minimizing and mitigating regional impacts, including costs and benefits of development options. Finally, the team shall prepare a report, draw conclusions and develop recommendations. The following issues must be dealt with within the framework of the Cumulative impacts assessment work:  Identify reasonable purpose, scope of the regional environmental assessment  Identify a spatial and temporary boundary condition of the regional environmental assessment  Assess and prioritize the additive and interactive cumulative impacts on environment, social, and human health from the proposed and existing projects in Selenge river basin,  Identify valued environmental components (see 3.2 section), and select an valued ecosystem components that were affected by operations of ongoing and any proposed projects within determined spatial boundary condition  Collect baseline information on the region required for the cumulative impact assessment, and evaluate the current environmental and social condition (see 3.2 section) of determined spatial boundary condition, and identify the additive and interactive cumulative impacts of existing and proposed projects,  Identify any adverse impacts on environment, society and human health and valued ecosystem components affected by operations of ongoing and any proposed projects within determined spatial boundary condition  Develop recommendations, plans and monitoring programs on measures to minimize additive and interactive cumulative impacts and their consequences on environment, society and human health in the regional scale,

17Good Practice HandbookCumulative Impact Assessment and Management: Guidance for the Private Sector in Emerging Markets, IFC, 2013

 Conduct significant impact assessment in regional scale  Additional scoping for detailed ESIA: identify project-specific information, significant environmental and social issues and their expected magnitude required in order to proceed with a detailed ESIA. Reflect the findings of additional scoping and the REA component in revisions to the structure of the TOR for the detailed ESIA component. This review and update is to be submitted to the International Advisory Committee and the World Bank for clearance prior to proceeding with the detailed ESIA. Upon receipt of clearance of the revised TOR by the International Advisory Committee and the World Bank the consultant shall proceed to undertake a detailed Environmental and Social Impact Assessment in accordance with the general parameters of the ESIA structure outlined below and any stipulations agreed upon in the update.

Annex 3: Additional Guidance ESIA (environmental and social impact assessment)

Stages of Environment and Social Impact Assessment By pre-feasibility, study of ―The Shuren HPP The project‖ has shown that the convenient options to build the project area based on 2 sites, which are № 4 and № 6located between Khyalganat village and Zuunburensoum. As due diligence the consultant should reviewthe initial screening of these potential sites during earlier phases and explain in detail the rationaleforincluding the options recommended for study in the ESIA. This should include a comparison on all technical, economic,social and environmental issues between the recommended options, options dropped during earlier phases and assessment of alternatives that involve not proceeding with the project. Under this evaluation the consultant is responsible to assess the potential risk, any adverse effects from choosing options on the current status of the project, further to observe the environment, human health and socially acceptable options, to avoid and preventas far as possible any negative effects,, and to develop measures of mitigation and offsets in the regional field. For example, comprehensively take into account both environment and social issues as an important component (water bodies, air, plant, soil and animals and their living environment) of the environment of the Selenge lake (up and down from the hydroelectric power station) and social issues (human health, indigionsand resettlement etc.) Environmental impacts of the reservoir Currently, one of two possible reservoirs could be used to implement the Shuren HPP project on the SelengeRiver. In order to select or recommend the best scenario from above two reservoirs, therefore, consultant team should be developing hydrological model to assess possible adverse effects for flow regime of Selengeriver. In this case, sensitivity analysis has to be carried out. Also consultant should be closely look at historical change of seasonal and multiyears of surface water resource/dynamic of SelengeRiver based on long-term measurement data (discharge and weather variables) by the hydro and weather station within Selenge river basin. As mentioned early, regional climate change assessment should be focused. Once hydrological model has been developed, the probability of flooding events at upper stream of the reservoirs could be predicted by using the results of regional climate change model. On the other hand,the minimum ecological flow that necessary to preserve riparian ecosystemat downstream (up to Baikal Lake) of the reservoirs could be evaluated (these issues will be considered explicitly in feasibility study of Shuren HPP, thereof should to share information.). These include:  To determine the optimal size of the reservoirs, to identify areas related to a steady level of the reservoirs, then to determine further land use changes and compare with exiting land use condition.  In order to reduce any adverse impacts, to explore the possibility of reducing the affected areas by reservoirs  To assess hydrological cycle condition by evaluating evaporation loss into atmosphere from the steady level of the reservoirs.  To determine possible adverse impacts from the reservoirs that could affect to the natural habitat, especially to identify fish migration and mobility, then determine better proper planning of fishing facility.

 To evaluate minimum ecological flow that necessary to preserve riparian ecosystem at downstream (up to Baikal Lake) of the reservoirs18,  To determine water temperature changes summer regime and winter regime  To evaluate the impact of the reservoir on the tributary and fish population,To assess the negative impacts that could influence to the water quality of the reservoirs, to observe biological and chemical oxygen demand, then to assess the potential impact that could be affected to aquatic life (to evaluate the impact to the organic pollution and macroinvertebrate, to assess any process that could occur from the change of algae etc.)  Duration of reservoir filling  Accumulation of sediments in a reservoir and the way to protect from extensive accumulations. Fish habitat and breeding Water flow rates and river levels should be estimated to suit fish ecologyin order to maintain suitable conditions for fish movement, migration and breeding. A Fish Habitat Suitability Analysis will allow for the protection and restoration of fish habits during reservoir filling and operation. Develop feeding sources for fish in the reservoir and provide facilities to prevent fry or alevin and young age fish from damage via modern methods and technologies and determine quality measures to prevent any fish from being damaged. Lost and gain offish habitat should be calculate for the reservoir and downstream in the river. The engineering technical study shall include estimations of hydrology parameters, regulation of spring and summer yellow water flows and regulation of winter regimes during small and medium flow rates. Estimate flow regulations to suit normal growth of fry and alevin either naturally or via artificial breeding during spring breeding periods at any water temperature condition and categorize reservoir zones to establish artificial breeding substrate.Because the water temperature will be colder in spring and warmer in fall the impact of water temperature change should be study for the spawning area downstream to the dam. Need to focus maintaining water flow close to natural regime and duplicate conditions for migrating and easy adaptation by water animals in particular fish. Establish suitable living conditions in the environment for fish with specific emphasis on Huchotaimen and Acipenserbaerii which are registered in the red book of Mongolia. Also, establish their breeding and feeding areas and plan measures to protect them. Evaluate issues related to capacity, structure and operation of fish breeding facilities and prepare location selection and technological conclusion and planning. At the end, confirm impacts of the fish breeding facility on the nature and environment. Environmental Impact of the ShurenHPP on Downstream areas The Shuren HPP is a project on an international waterway (Selenge River) with transboundary impacts. Besides the "national" impacts of the project in Mongolia, it will also create impacts in Russia and may affect the relations between Mongolia and Russia.

18Source: http://www.eflownet.org/download_documents/brisbane-declaration-english.pdf

Assess the impact of the ShurenHPP Shuren on the UNESCO world heritage "Lake Baikal" and the RAMSAR site ―Selenge delta‖ 2RU018, resulting from the interference of the dam with the natural river discharge and the sediment transportation. Assess the possible fragmentation of natural habitats, blocking of wildlife migratory routes (fish passage) and possible land degradation resulting from the erection of the dam and the change of the impact on the natural river discharge. Identify the impacts of the alteration of the natural river discharge in the initial phase of the project, when the reservoir has to be filled up. During this filling up, the minimum ecological flow has to be defined for discharge downstream of the ShurenHPP. This amount of residual discharge must be sufficient for providing water for irrigation purposes, for water supply, wastewater treatment and for environmental issues (flora and fauna in and alongside the Selenge River, especially in the Baikal Delta). Identify the necessary amount and the possible dynamic discharge of the residual or ecological water. Assess the impact of the alteration of the natural river discharge during operation of the HPP, due to peaking operation mode with artificial periods of low and high river discharge downstream of the weir. These artificial changes in the river discharge may affect the ecosystems downstream of the dam. Assess the alteration the sediment transport within the water flow of the Selenge River. The river bed load will settle in the reservoir of the dam due to the lower flow velocity. The sediments will no longer transported downstream of the dam and further on to the Selenge Delta. This may lead to degradation of the cropland downstream of the dam and to negative impacts on the Selenge Delta. It will be important to characterize the potential of erosion of the shoreline of thefuturereservoir to understand the effect of impoundment on turbidity downstream. Assess the blocking of fish migration routes up and down the Selenge River by creating an insuperable obstacle (the dam) for the aquatic species in the river, with emphasis on the Taimen and Siberian Sturgeon. Evaluate feasible mitigation measures like fish ladders, fish locks, fish lifts or compensatory fish breeding in the reservoir. An ecological flow may be necessary to calculate to protect the spawning fish habitat. Assess need to identify and evaluate river sectors that will be potentially affected by the flooding of the dam and construction activities associated to access roads, dam site, camp site, and construction infrastructure. Fishing areas proximate communities need to be examined and the significance of impacts on fish populations evaluated along with appropriate mitigation/compensation measures. Data collection and methodology The consultant should presented a detailed plan of data collection for each survey and study. The protocol of study should be included and presented with the detail of methodology and should be accepted by the client. Impact from water and infrastructure building and Facilities Need to assess water quality of Selenge River downstream of the reservoir and impacts caused by changes in the regime and impacts, if any, to Baikal Lake.

The oxygen rate should be measured in the Serenge river and identify for the future reservoir with or without ice cover. The potential impact on fish at the end of the winter on the reservoir for the oxygen rate should be analyzed. Dam, reservoir, water, buildings, water facilities, including hydropower stations, pipelines, pump stations, roads, power transmission lines and other infrastructure engineering and construction of buildings, operational measures to reduce the adverse effects of taking into account the environmental impact plan  Assess the potential positive (?) impacts of the reservoir (water transportation, recreation, tourism, fisheries, water sports and fishery)  Determine impacts to naturally beautiful places and identify specific protection plans and local protected areas.  Assess impacts to hydro-geological condition of the affected area by buildings and facilities, changes in quality and regime of ground water  Make an assessment for geology and seismicity risk and mark the specific geological region on the map.  Determine impacts to ecosystem during construction and operation of the infrastructure or engineering building and facilities, including ancillary facilities such as camp, power transmission line, reservoirs, road and so on,  Clarify the impacts on ecosystem during the extraction and handling of construction materials for construction of the building and facilities  Specific attention to be paid for selecting the alignment to avoid Natural Park and cultural heritage and tourism attractions.  Determine risk to biodiversity or natural habitat along the electricity transmission line during their construction and operation period.  Measures to protect plant covering, restoration timing and maintain dry channels crossing the transmission alignment and protect it from flood damage.  Develop waste management plan during the construction and operation of the infrastructure or engineering building and facilities Land use By their very nature, hydropower projects generate a significant amount of long term impacts on exiting and future land uses. They usually lead to the disappearance of valuable resources and land uses in reservoir impoundment zones and to widespread modifications to existing land uses in both of upstream and downstream of the power plants and to effect on valued environmental components and social components as well. Changes to land uses and transportation are generally a consequence of the submergence of large areas in riparian zones, permanent modifications to upstream and downstream water levels and water flows and induced development associated with the regulation of water flows and the creation of large reservoirs. A change of ice cover of river in winter time should be consider as the ice cover will not be the same downstream the river. The consultant team shall include the following components in the plan:

 the project area, particularly in areas affected by the project, identify the type of the current land management and land use, accompanied by an appropriate scale mapping.  If the project is implemented in the territory of the state orlocal protected areas,assess their value and disclose information about the location and the area of the protection regime, accompanied by an appropriate scale mapping.  Identify the areas affected by construction and operation of the project, accompanied by an appropriate scale mapping  Explore local development trends, and after the construction of the hydropower station to compare today to assess the changes in land use, and identify objects that requires resettlement and relocation and drawings accompanied by an appropriate scale.  Each soum lands affected by the project purpose and planned future use of long- term issue and may present recommendations for changes in land management planning is developed Archaeological, historical and cultural findings. Project in the territory of ancient history and rich cultural heritage in the area. Currently, archaeological historical and cultural findings on the territory project has not yet been detected19. However, it is necessary to plan measures to protect the cultural heritage following the OP 4.11 of the World Bank. A detailed Archeological field survey shall be conducted at the proposed area of the reservoir, along road and transmission rights of way and sites for hydro-technical facilities. A cultural heritage management plan (including a procedure for Chance Finds during construction or operations) shall be developed following the O.P 4.11 of the World Bank. This will be an integral part of the Environment and Social Assessment. Resettlement The Consultant Team will review the potential for population resettlement based on the Initial Stage Study Report and Recommendation and based on the Feasibility Study designs of facilities, determine the amount of land required for the project, the need for land acquisition and the resulting economic or physical displacement or resettlement during project construction and operation, The ESIA will assess the project‘s need for permanent and temporary land use and acquisition for all of the project components needed for construction and sustained operation, regardless of the source of financing. Such linked components include access roads, Main road, temporary road access, road link between the two sides of the river, lay-down areas, work camps, transmission lines, pipelines, etc. The ESIA will assess the extent and nature of land and assets to be lost identify any restrictions or preclusions of access to land and resources and will stipulate specific needs both for the physical resettlement and/or economic rehabilitation of project-affected people to be addressed by means of a Resettlement Plan (RP). Development of the Resettlement Plan will include a 100% census of affected people and inventory of assets affected, a sample socio-economic survey of baseline characteristics, an entitlement matrix including all types of impacts and all types of affected people (regardless

19Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014

of their tenure status), replacement cost for assets and land acquisition for both private or leased land and assets owned by residents and organizations, and providing options for property dismantling, relocation, resettlement and rehabilitation. The option of built a dam to preserve the integrity of soum should be a part of analyze. Potentially resettled persons should be meaningfully consulted and should have opportunities to participate in planning and implementing resettlement programs. The Consultant Team will interview and exchange opinions with residents to be affected and receive their opinions on resettlement options, in order words, pay attention to each resident or household to be affected. The Consultant shall study social and cultural specific characteristics of the targeted group for resettlement and determine their current sources of livelihood, minimize involuntary resettlements to the extent feasible, and provide conditions for those negatively affected to receive benefit from the project to meet requirements in the OP4.12 of the WB. Introduce and discuss the resettlement plan with the public. It shall be discussed and approved by the aimag and soum‘s Citizen‘s Representative Hural in prior submittal to the Government of Mongolia. The Consultant Team shall follow the latest approved law of Mongolia and WB policy in activities related to resettlement. The cost and compensation related to resettlement shall be included to the Environment Management Plan. Indigenous Peoples The Consultant will review the potential social impacts and review potential factors related to indigenous people in the project area by reviewing the pre-feasibility study20. The Consultant will verify and review potential factors related to indigenous people in the project territory and identify focus groups for free, prior and informed consultations on potential impacts (positive and negative). If necessary the Consultant Team shall develop a standard for determining Indigenous People in Mongolia following the criteria in OP4.10. The team will undertake a social assessment to evaluate the project‘s potential positive and adverse effects on Indigenous Peoples, and where adverse effects may be significant, to examine project alternatives. The social assessment will consider society and culture and sensitivity of the indigenous people to be affected by the project activities following OP 4.10.  Identify characteristics related to indigenous people with cultural heritage and evaluate and study assessments performed by others.  Identify worshiped natural places important to their intelligent mind-set within their territory occupied for generations. The Consultant Team shall prepare an analysis of which indicators are most important for both sharing project benefits, and mitigating negative impacts (considering potential: demographic, social, cultural, or political indicators, inherited lands, lifestyles or access to natural resources). After preparing this social assessment, it will be necessary to assess the negative and positive impacts on indigenous people from the project and produce an ―Indigenous Peoples

20Source: The pre-feasibility study for "Shuren Hydropower Plant", 2014

Development Plan‖ to manage those impacts. This plan must be produced through the free, prior and informed consultations with people and local administrative organizations and leaders in the society, leading to their broad community support. This consultation process must be carefully documented by the Consultant. Impacts on International Waterways The environmental and social impact assessments should address relevant impacts within the framework of World Bank OP 7.50, Projects on International Waterways, and international agreements that Mongolia is bound. Disputed Areas The proposed project is located completely within the sovereign territory of Mongolia, so that World Bank OP 7.60, Projects in Disputed Areas, is not relevant, but the ESIA report should provide confirmation. Public Communications This activity shall be fulfilled by discussing the selection of alternatives in dialogue with the project stakeholders. Consultant should create an official website to allow involvement and inputs from public consultations and participation in the decision making process.The REA and Detailed Environmental and Social Impact Assessments, including information on selection of alternatives, will be placed on the webpage accessible to the project stakeholders. Final decision on the selection of alternatives should be analyzed on the basis of questionnaires taken from the Government and public.