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50193-003: Maharashtra Rural High Voltage Distribution System Program

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50193-003: Maharashtra Rural High Voltage Distribution System Program Program Safeguard Systems Assessment Project Number: 50193-003 September 2019 India: Maharashtra Rural High Voltage Distribution System Expansion Program ABBREVIATIONS ADB - Asian Development Bank CEA - Central Electricity Authority CHS - construction health and safety DT - distribution transformer EC - environmental clearance EAC - Expert Appraisal Committee ESARF environmental and social assessment and review framework EHS - environmental health and safety EIA - environmental impact assessment EMP - environmental management plan ESMS - environmental and social management system GRM - grievance redress mechanism HVDS - high voltage distribution system HT - high tension IEE - initial environmental examination MERC - Maharashtra Electricity Regulation Commission MoEFCC - Ministry of Environment, Forest, and Climate Change MSEDCL - Maharashtra State Electricity Distribution Co. Ltd. NGO - non-government organization OHE - occupational health and environment OHS - occupational health and safety PSSA - program safeguard system assessment RBL - results-based lending REA - rapid environmental assessment SEIAA - State Environment Impact Assessment Authority SHE - safety, health, and environment SPCB - State Pollution Control Board SSMR - semiannual safeguards monitoring report TABLE OF CONTENTS Page I. INTRODUCTION.................................................................................................................................. 1 A. Program Background and Rational .............................................................................................. 1 II. ADB’s SAFEGUARD POLICY PRINCIPLES TRIGGERED .......................................................................... 5 III. ENVIRONMENTAL AND SOCIAL IMPACTS AND RISKS ...................................................................... 12 A. Environmental Impacts .............................................................................................................. 12 B. Social Impacts ............................................................................................................................. 13 IV. DIAGNOSTIC ASSESSMENT .............................................................................................................. 15 A. Assessment Methodology and Resources ................................................................................. 15 B. Policy Equivalence Assessment .................................................................................................. 19 V. Institutional Arrangement Assessment ........................................................................................... 32 A. Internal Grievances Redressal Cell (IGRC) .................................................................................. 34 B. Consumer Grievances Redressal Forum (CGRF) ......................................................................... 35 C. Electricity Ombudsman .............................................................................................................. 35 VI. PROGRAMME ACTION PLAN............................................................................................................ 35 VII. CONCLUSION ................................................................................................................................... 42 A. Procedural Guideline............................................................................................................. 132 B. Community Meeting and Consultation with Affected Persons ........................................ 133 C. Support to vulnerable APs ................................................................................................... 133 D. Land Transfer of Title ............................................................................................................ 134 APPENDIXES 1. Circular for Land Purchase-MSEDCL------------------------------------------------------------------43 2. Records of Detail Consultations-------------------------------------------------------------------------51 3. Safeguards Screening Checklists Due Diligence---------------------------------------------------98 4. Generic EMP for Bid Document------------------------------------------------------------------------110 5. Safeguards Monitoring Template----------------------------------------------------------------------120 6. Consultations, Formats, Social and Environment-------------------------------------------------124 7. Guidelines Voluntary Donation and Direct Purchase through Negotiated Settlement---------------------------------------------------------------------------------------------------132 I. INTRODUCTION A. Program Background and Rational 1. The Maharashtra State Electricity Distribution Co. Ltd. (MSEDCL) is the largest distribution company in India (24.6 million customers) and is a distribution licensee in the state of Maharashtra in both rural and urban areas. About 17% of consumers (4.1 million) are agriculture consumers. Sales to the agriculture category (30,643 million kWh) comprise 30% of MSEDCL’s total sales while the agriculture category provides 15% (9,060 crores) of MSEDCL’s total revenues in fiscal year (FY) 2018. Only about 65% of agriculture consumers are metered. MSEDCL’s financial performance is affected by the difference between the average revenue collection (including government support) for agriculture and the cost of supply. The state and MSEDCL intend to undertake phased investments for feeder segregation and adoption of high voltage distribution systems (HVDS) through (i) continuing feeder separation of rural domestic and rural agriculture feeders; (ii) release of all new agriculture connections on HVDS; and (iii) eventual replacement of low voltage rural agriculture feeders with high voltage feeders covering all agriculture consumers. 2. The state government of Maharashtra has requested Asian Development Bank (ADB) funding to support HVDS in rural areas for agriculture supply. Adoption of HVDS is an alternative approach that extends the distribution system at higher distribution voltages (11 kV) to the consumer doorstep coupled with lower capacity distribution transformers that can be used for 1- 2 connections. 3. The Maharashtra Rural HVDS Program is proposed to finance a portion of distribution planning development for Maharashtra using the results-based lending (RBL) modality of ADB. ADB received a financing request for $346 million from Department of Economic Affairs (DEA) to support HVDS related investments in rural areas of the state of Maharashtra for supply to agriculture consumers. The executing agencies of the program will be the Energy Department, Maharashtra; and MSEDCL. The outcome will be access to reliable, efficient and sustainable power supply for agriculture usage in rural Maharashtra improved. The Program aims to connect about 156,000 new agriculture consumers on HVDS between 2019-2021 and requires about (i) 132,600 new distribution transformers; (ii) 46,800 km. of HT connections to distribution transformers; and (iii) establishment of 121 new 33/11 kV distribution sub-stations and related 11 kV feeders for upstream strengthening. These interventions would be across the state in the regions of Vidharbha, Marathwada, Konkan, western Maharashtra and northern Maharashtra. 4. The program will extend power supply to the agriculture consumers. All connections are voluntary as investment cost (approximately U$3,800/household) is born by MSEDCL without any contribution from farmers, and electricity bill is also subsidized (approximately Rs. 4/kWh) by the government. Also, the system is not provided to each household in the region but only households who have the need for better reliable electricity connection for irrigation voluntarily apply for the program. The program will bring following benefits to the farmers. (i) dedicated distribution transformer facility to the consumer; (ii) reliable and stable power with proper voltage; (iii) sense of ownership to take responsibility of distribution transformer (DT) among consumers; and (iv) reduction in failure of farmer’s electrical pumps. 5. These benefits will increase the agricultural yield, at the same time lower the maintenance, which will result in financial benefits to farmers. Additionally, the consumers will lead to increase 2 cross subsidy and power purchase cost, however, the cost will be booked as annual revenue requirement. Also increase consumers will result in higher subsidy for Maharashtra. 6. The program safeguard system assessment (PSSA) aims to (i) examine the safeguard systems of the Government of India, Maharashtra, and MSEDCL, as well as related implementation practices and capacities; and (ii) suggested safeguard program actions where gaps and weaknesses are found. The PSSA, which ADB undertook in partnership with MSEDCL, builds on the existing knowledge and practices of MSEDCL and the discussions with MSEDCL on ADBs’ Safeguard Policy System (2009) requirements, as well as on a specific analysis carried out during program preparation. The PSSA is based on document reviews, meetings and extensive discussions with MSEDCL, field investigations, and interviews with relevant stakeholders. Based on the PSSA, the program triggers environment and involuntary resettlement (IR) safeguard principles under ADB’s Safeguard Policy Statement (2009). Thus, the project is categorized as B for environment and IR, and C for IP. 1. Program Activities 1.1 Technical Components and Design Standards 7. The program activities include
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