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ESSA) Public Disclosure Authorized INDONESIA POWER DISTRIBUTION DEVELOPMENT PROGRAM for RESULTS Public Disclosure Authorized Public Disclosure Authorized

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ESSA) Public Disclosure Authorized INDONESIA POWER DISTRIBUTION DEVELOPMENT PROGRAM for RESULTS Public Disclosure Authorized Public Disclosure Authorized 104284 REV Environmental and Social Systems Assessment (ESSA) Public Disclosure Authorized INDONESIA POWER DISTRIBUTION DEVELOPMENT PROGRAM FOR RESULTS Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized January 15, 2016 The Environmental and Social Assessment (ESSA) of the Indonesia Power Distribution Development Program for Results was prepared by a Bank team comprised of Kian Siong (Environmental Specialist, GP ENR) and Sulistiowati (Social Development Specialist, Consultant). i Acronyms and abbreviations ABBREVIATIONS ADB – Asian Development Bank AMDAL – Analisis Mengenai Dampak Lingkungan (EIA) BLH/BPLHD – Badan Lingkungan Hidup/Badan Pengelola Lingkungan Hidup Daerah (provincial/district Environment Agency) EGSS – Electricity Grid Strengthening – Sumatra EIA – Environmental Impact Assessment ESSA – Environmental and Social System Assessment EMP – Environmental Management Plan GOI – Government of Indonesia HQ – Headquarter IBRD – International Bank for Reconstruction and Development IUCN – International Union for Conservation of Nature K3-L – Keselamatan, Kesehatan Kerja, Keamanan dan Lingkungan (Safety Occupational Health, Safety and Environment) KBA – Key Biodiversity Area kV – kiloVolt LH – Lingkungan Hidup (Environment) MOEF – Ministry of Environment and Forestry OP – Operational Policy PERMEN – Peraturan Menteri (Ministry Regulations) P3BS – Pusat Penyalur dan Pengatur Beban Sumatra (loan dispatch center of Sumatra) PAP – Program Action Plan PDDP – Power Distribution Development Program PforR – Program for Result PCB – Polychlorinated Biphenyls PIU – Program Implementation Unit PLN – Perusahaan Listrik Negara (State Electricity Corporation) PLN Decree – Decree of the Board of Directors of PLN PMU – Program Management Unit ROW – Right-of-Way RUPTL Rencana Usaha Penyediaan Tenaga Listrik (Indonesia’s power expansion plan) SAIDI – System Average Interruption Duration Index SAIFI – System Average Interruption Frequency Index SCM – Supply Chain Management SILM – Sistem Informasi Laporan Management (Information System for Management Report) SMK3 – Sistem Manajemen Kesehatan dan Keselamatan Kerja (occupational health and safety management system) SPPL – Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan ii Hidup (letter of commitment for the EMP and EMoP) TA – Technical Assistance UKL/UPL – Upaya Pengelolaan Lingkungan Hidup/Upaya Pemantauan Lingkungan Hidup (environment management efforts and environment monitoring efforts) Wilayah – PLN Regional Office iii TABLE OF CONTENTS Executive Summary ………………………………………………………………………….... v Introduction …………………………………………………………………………………….1 1 Program Description....................................................................................................................... 1 1.1 Program Scope ................................................................................................................................ 1 1.2 Typology of Works .......................................................................................................................... 6 1.3 Main Stakeholders related to the Program .................................................................................. 8 2 Program context and potential impacts ........................................................................................ 9 2.1 Environmental Context .................................................................................................................. 9 2.2 Potential Environmental Impacts ................................................................................................ 10 2.3 Potential Social Impacts ............................................................................................................... 11 2.4 Mitigation and Prevention Measures to Reduce Environmental Impacts ............................... 13 3 Environmental Management System .......................................................................................... 14 3.1 Institutional Responsibilities ........................................................................................................ 14 3.2 National Regulatory Framework ................................................................................................. 14 3.3 Safeguard Application to PDDP Subproject .............................................................................. 19 3.4 Program Capacity in the Environmental Management - Performance Assessment .............. 22 3.5 Relevance with the Principles of OP 9.00 ................................................................................... 23 4 Social Management System .......................................................................................................... 25 4.1 Institutional responsibilities ......................................................................................................... 25 4.2 Description of the regulatory framework ................................................................................... 25 4.3 Program Capacity in the Social Area and Performance Assessment ....................................... 26 4.4 Relevance to the Principles of OP 9.0 .......................................................................................... 26 5 Assessment of Program System ................................................................................................... 28 6 Inputs to the Program’s Action Plan ........................................................................................... 40 6.2 ESSA Consultation and Disclosure ............................................................................................. 41 7 Environmental and Social Risks .................................................................................................. 42 7.1 Potential environmental and social risks .................................................................................... 42 7.2 Past project performance track-record on safeguards .............................................................. 42 7.3 ADB involvement in the Program ............................................................................................... 43 7.5 Evaluation of the Environmental and Social Risks ..................................................................... 43 8 Inputs to the Program Implementation Support Plan ............................................................... 44 iv Figures and Tables Figure 1 Local Flow of Sumatra interconnection Systems at Peak Time (June 2015) 10 Figure 2 Institutional and Implementation Arrangement 14 Figure 3 PLN Call Center 123 Accessibility 20 Table 1 Program Results Chain 2 Table 2 Typology of Activities Which Will Support the Program 7 Table 3 Main Regulations Applicable to the Operation of the PLN Program 16 Table 4 Main Processes of the Program Implementation and Environmental 22 Management Table 5 Evaluation of the Program Environmental and Social Systems amd Its Relation 29 to the OP 9.00 from the World Bank Table 6 Environmental and Social Measures for the Program Action Plan 40 Table 7 Global Risk Assessment of the Program 43 Table 8 Environmental and Social Support Plan for the Implementation of the Program 44 Annex 1 Sumatra Island Power Transmission Lines (Existing and Future Development) A. Existing interconnection system of Sumatra Island Power 45 B. Future interconnection system of Sumatra Island Power 46 Annex 2 Forest Area (National Park, Protected Forest and Production Forest) 47 Annex 3 Minutes of Public Consultation on Draft ESSA and the list of participants 48 v EXECUTIVE SUMMARY The Indonesia Power Distribution Development Program for Results (PDDP or “the Program”) aims i) to increase access to electricity supply, ii) to improve quality of service and distribution efficiency (through reduction of distribution losses) and reliability (through reduced outages and improved voltage conditions) of its delivery in selected geographic areas of Indonesia, iii) To improve power consumption and iv) to improve PLN’s institutional capacity for program planning, design, implementation, and monitoring and evaluation. The State Electricity Corporation (PLN) has selected the Sumatra region for coverage under the proposed program based on several specific criteria. Sumatra, with an electrification ratio of about 85% ranks in the middle between Java Bali and eastern Indonesia and it is the largest population center outside Java Bali. Of the total of about 54 million people, nine million have no access to electricity. To improve the likelihood of meeting its program targets, PLN’s strategy is to mobilize multilateral funding to complement its own and fill the financing gap for the Sumatra distribution program. Positive environmental and social benefit is expected as major results, specifically, up to almost 3 million customers could be added to the grid in the five year period through 2019 resulting in an increase in the electrification ratio to about 90%. The Program will only finance the power distribution activities in rural and urban areas in Sumatra and most of the additional customers would be in areas already electrified and would thus tend to represent the lowest income households in these areas. The Program to be supported by the Bank is a geographic slice of the distribution component of the RUPTL (Indonesia’s power expansion plan) covering Indonesia’s Sumatra region for the period 2015-2019. The estimated cost of the Sumatra distribution program is US$1.45 billion or about
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