Environmental Assessment and Review Framework August 2014 Republic of Maldives: Preparing Outer Islands for Sustainable Energy Development Prepared by Ministry of Environment and Energy, Government of Maldives for the Asian Development Bank This Environmental Assessment and Review Framework is a document of the borrower. The views expressed herein do not necessarily represent those of ADB's Board of Directors, Management, or staff, and may be preliminary in nature. Your attention is directed to the “terms of use” section of this website. In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank doe s not intend to make any judgments as to the legal or other status of any territory or area. CURRENCY EQUIVALENTS (as of 31 March 2013) Currency Unit = Maldivian Ruffiyaa (MVR) MVR1.00 = US$ 0.065 US$1.00 = MVR 15.410 LIST OF ABBREVIATIONS ADB - Asian Development Bank CFC - Chlorofluorocarbons DG - Diesel Generator EA - Executing Agency EARF - Environmental Assessment and Review Framework EIA - Environmental Impact Assessment EPA - Environmental Protection Agency EMP - Environmental Management Plan EPC - Engineering, Procurement and Construction FENAKA - Fenaka Corporation Limited GoM - Government of Maldives GDP - Gross Domestic Product GHG - Green House Gases GRC - Grievance Redress Committee GFP - Grievance Focal Point IA - Implementing Agency IEE - Initial Environmental Examination MEE - Ministry of Environment and Energy MOF - Ministry of Finance PCBs - polychlorinated biphenyl PMC - Project Management Consultant PPTA - Project Preparatory Technical Assistance PV - photovoltaic REA - Rapid Environmental Assessment SPS - Safeguard Policy Statement STELCO - State Electric Company Limited TA - Technical Assistance WHO - World Health Organization NOTES (i) The fiscal year (FY) of the Government of Madives ends on 31 December. FY before a calendar year denotes the year in which the fiscal year ends, e.g., FY2012 ends on 31 December 2012. (ii) In this report, "$" refers to US dollars 1 TABLE OF CONTENTS Page A. INTRODUCTION 3 B. PROJECT AND OUTPUT REVIEW 3 C. ASSESSMENT OF LEGAL FRAMEWORK AND INSTITUTIONAL CAPACITY 5 1. The Government Environmental Laws and Regulations 5 2. International and Regional Agreements and Conventions 8 3. Environmental Assessment Process in the Maldives 9 4. ADB’s Environmental Safeguard Requirements 10 5. Institutional Capacity 14 D. ANTICIPATED PROJECT IMPACTS AND BENEFITS 14 E. ENVIRONMENTAL ASSESSMENT AND SUB-PROJECT SCREENING 20 1. Project IEE 20 2. Sub-Project Screening 20 3. Sub-Project Environmental Assessment 21 4. Project and Sub-Project Review 21 F. CONSULTATION, INFORMATION DISCLOSURE, AND GRIEVANCE REDRESS MECHANISM 21 1.1 Consultation and Information Disclosure 21 1.2 Grievance Redress Mechanism 22 G. INSTITUTIONAL ARRANGEMENT AND RESPONSIBILITIES 24 H. ENVIRONMENTAL MONITORING AND REPORTING 27 APPENDIX 1: INDICATIVE LIST OF SUB-PROJECTS 28 APPENDIX 2: TERMS OF REFERENCE FOR ENVIRONMENTAL CONSULTANT 31 APPENDIX 3: SUB-PROJECT SELECTION CRITERIA 32 APPENDIX 4: RAPID ENVIRONMENTAL ASSESSMENT (REA) CHECKLISTS 33 APPENDIX 4: TABLE OF CONTENTS FOR SUB-PROJECT IEEs 43 APPENDIX 5: CONTENTS OF ENVIRONMENTAL MONITORING REPORT 46 2 A. INTRODUCTION 1. This document provides the Environmental Assessment and Review Framework (EARF) for the assessment for sub-projects to be included in the sector program for the proposed Preparing Outer Islands for Sustainable Energy Development Project (POISED or the Project). These sub-projects to be planned during the implementation of the Project. The Project components include (i) development of renewable energy ready mini grid systems for outer islands, and (ii) capacity enhancement of MEE, FENAKA and STELCO to implement renewable energy mini grid projects. Under renewable energy mini-grid system, hybrid energy systems comprise generation mix of solar-diesel will be installed in about 160 medium to small outer islands of the Maldives. 2. A suitable renewable energy system (sub-project) for each island is identified as part of the sector program as defined in the long-term roadmap and these sub-projects will be progressively reanalyzed, screened and assessed during Project implementation. The EARF outlines the procedures that will be followed for environmental assessment and review of proposed sub-projects in accordance with the Asian Development Bank (ADB) Safeguard Policy Statement (SPS, 2009) as well as in compliance with Government of Maldives (GoM) environmental assessment requirements. The EARF is intended primarily for use and reference by: (i) the Ministry of Environment and Energy (MEE); and (ii) ADB; but also by (iii) State Electric Company (STELCO) and the Fenaka Corporation Limited (FENAKA); (iv) participating communities and Atol/City/Island Councils; and (v) other stakeholders, including equipment vendors and energy services suppliers. Prior to Project appraisal, the EARF will be translated into Dahevi and disseminated accordingly, with the English version posted on the ADB website B. PROJECT AND OUTPUT REVIEW 3. The proposed “Preparing Outer Islands for Sustainable Energy Development (POISED)” project is part of the Scaling Up Renewable Energy Program (SREP) to reduce diesel dependence in the Maldives, improve the electricity sector, and address key macroeconomic issues through tapping into indigenous and cheaper sources of electricity. 4. The Project would enhance renewable based sustainable energy sector in the Maldives to be measured by increase of renewable energy (RE) in the supply mix of the Maldives, reduction in CO2 emissions, and increase in cost coverage through tariffs. The outcome would be the reduction of diesel usage for electricity generation in outer islands of the Maldives to be measured by reduction of diesel consumption per unit of electricity in the outer islands by 2020. The outputs include (i) development of renewable energy ready mini grid systems for outer islands, (ii) capacity enhancement of EA and IAs to implement renewable energy mini grid projects. 5. A phased intervention strategy has been proposed for the introduction of the RE in Maldives. In the first phase demonstration hybrid RE projects are proposed be implemented on five outer islands of Maldives namely: B. Goidhoo, Lh. Kurendhoo, Th. Buruni, Ga. Villingili and Addu City; under ADB financing and in the subsequent phases these RE hybrid solutions shall be extended in about 160 outer islands of Maldives at commercial development under the sector program as defined in the Road Map long-term strategy. 6. A detailed assessments of the RE resources (solar and wind) in Maldives has been undertaken and optimal individual RE solutions are proposed for each Islands. The scope of 3 RE solutions envisaged under the Project in mostly include introduction of Solar-Diesel Hybrid System on about 160 outer islands of Maldives. Various components of the proposed RE solution on islands include: Component 1: Installation of solar PV system (ground mounted and roof top) Component 2: Diesel generation by replacement of inefficient DG sets and addition of new DG sets Component 3: Refurbishment of distribution mini-grid systems Component 4: Capacity building of PMU/FENAKA/STELCO staff on O&M of RE systems. 7. The Project will construct and operate hybrid energy systems that include solar power generation units (on ground and roof-top) with a total capacity of 20888 kWp and 40170 kW diesel generations on about 160 target islands. The combined capacity of proposed hybrid energy system is 61058 kW. Diesel generation would be added to the existing generation system by installing additional generators in existing power plants or by changing the inefficient equipment in each island whereas solar energy generation would be new addition. Solar generation would be manly by installing solar PV panels (ground mounted and roof-top of public buildings). The hybrid system would range from 20 kWp to 1 MWp solar PV system and 35 kW to 1600kW diesel generators. Besides this, Li-Ion based battery storage system will also be installed in each island as part of hybrid energy system. The solar power generation units will consist in a set of solar photovoltaic (PV) modules, power inverters, switchgear, associated protection, control and monitoring equipment’s, and associated civil works. The electricity output will be directly fed into existing distribution networks of STELCO/ FENAKA / island councils for further distribution. Wherever required distribution grid will be upgraded by replacing grid assets such as underground cable, distribution boxes, switchgears etc. Table 1 presents the proposed capacity by components under the Project. Table 1: Proposed Interventions and Estimated Capacity under the Project Proposed Capacity (kW) Proposed System On 5 Priority Islands On 160 Islands Diesel 8164 40170 Solar 2500 20888 Total 10664 61058 8. Indicative list of sub-projects1 proposed for implementation on about 160 outer islands as part of the POISED Project is provided in Appendix 1. 9. The key agencies to be involved in the Project are the Ministry of Finance and Treasury (MoET) as Project’s Executing Agency (EA), and MEE, FENAKA and STELCO being the Implementing Agencies (IAs), project management consultant (PMC), EPC contractor(s), and other line agencies including the Environment Protection Agency (EPA) and Waste Management Division within EPA. EA has overall