Technical Assistance Layout with Instructions

Initial Environmental Examination

May 2020

Mongolia: Aimag and Soum Centers Green and Resilient Regional Development Investment Program

Prepared by the Ministry of Construction and Urban Development for the Asian Development Bank. CURRENCY EQUIVALENTS (16 May 2020)

Currency Unit – Tugrik (MNT) MNT 1.00 = $0.00035 $1.00 = MNT 2,792

ABBREVIATIONS

ADB - Asian Development Bank ALAMGaC - Agency for Land Management and Administration, Geodesy, and Cartography - Aimag and Soum Centers Green and Resilient ASDIP Regional Development Investment Program CEMP - contractor environmental management plan DFE - disease free establishment EIA - environmental impact assessment EMP - environment management plan EMR - environmental monitoring report GOM - Government of Mongolia GRM - grievance redress mechanism IEE - initial environment examination MET - Ministry of Environment and Tourism MCUD - Ministry of Construction and Urban Development MOFALI - Ministry of Agriculture and Light Industry NFPUG - National Federation of Pasture User Groups TOSK - provincial housing authority PIU - project implementation unit TRTA - transaction technical assistance REA - rapid environmental assessment RP - resettlement plan SPS - ADB Safeguard Policy Statement (2009)

WEIGHTS AND MEASURES km - kilometer square km2 kilometer kg - kilogram ha - hectare m - meter m3 - cubic meter mg - milligram mg/l - milligrams per liter t - metric ton NOTE

In this report, "$" refers to US dollars.

This initial environmental examination 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 on ADB’s 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 does not intend to make any judgments as to the legal or other status of any territory or area. EXECUTIVE SUMMARY

1. The feasibility design of Tranche 1 of the Aimag Soum Development Investment Program (ASDIP) has been prepared. The ASDIP will promote local economic development and improve basic urban services in priority Aimags of Mongolia1. The program will support the government in establishing inclusive, green urban development, resilient rangeland management, and sustainable agribusiness values chains in select Aimags. For each Aimag the ASDIP will comprise a sequenced set of green urban and rural infrastructure developments, and agribusiness investments, which are supported by implementation mechanisms, policy actions, and capacity building support. The ASDIP investments will reduce the vulnerability of the country to climate change and further pastureland degradation.

2. The four outputs of the ASDIP are:

(i) climate-resilient, low carbon, and attractive aimag and soum centers developed; (ii) rangelands for climate resilience, high carbon sequestration, and sustainable herding managed; (iii) through accessible finance, low carbon, climate resilient, and inclusive value chains created and strengthened; and (iv) capacity building and policy development for green and competitive agro-territorial development improved.

3. The ASDIP will be financed with a Multi-tranche Finance Facility (MFF) loan modality. Tranche 1 and the focus of this IEE include the three western Aimag centers of Ulaangom of Uvs Aimag, Ulgii of Bayan-Ulgii Aimag, Jargalant of Khovd Aimag, and the two soum centers of Umnugovi and Deluun of Uvs and Bayan-Ulgii Aimags, respectively.

4. To facilitate the Outputs of the project the multisector ASDIP will invest in the three selected aimag centers and two soum centers in the following two major component areas:

(i) basic urban infrastructure, services, and facilities; and (ii) agribusiness facility developments including improved pastureland management.

5. The tables below summarize the planned investments. The urban infrastructure investments will occur primarily inside the Aimag centers and soum centers, whereas the agribusiness investments will occur outside but near the Aimag centers and soum centers. The new agribusiness facility investments will also be supported with infrastructure.

1 An aimag is an administrative subdivision equivalent to province in Mongolia. There are 21 Aimags and Aimag centers. A soum is an administrative subunit of an Aimag, and its center is called a soum center. There are 304 soums in Mongolia (not including Aimag centers). Soums have average populations of 4,000 and cover an average land are of 5,000 square kilometers.

i Planned Urban Investments of ASDIP In Aimag And Soum Centers

Urban and Agribusiness Infrastructure

• Ger housing redevelopment2 • Heating supply network improvements • River and dyke embankments for flood • Road developments and drainage control • Improvements to wastewater collection and new or completed • Water canals upgraded treatment plants (WWTP)

• Water treatment and distribution • Landfill improvements improvements • Upgraded schools, hospitals, • Electrical power upgrades municipal buildings • Communication towers and fibre optic networks

Planned Agribusiness Investments of ASDIP In Aimag and Soum Centers

Agribusiness Investments*

• Community-based micro-projects for • Agroparks PUGs3:

- animal husbandry, - Disease Free Establishments - hay protected areas and storage, - Meat processing facilities - small irrigation, - Laboratory and veterinary - well water development, services - small river/stream bridges - Research Development Center - Business incubator centers - Processing industries • Irrigation schemes and fodder farms

* investments will be supported by infrastructure from table above

6. Briefly, the ASDIP will be executed by the Ministry of Construction and Urban Development (MCUD) with support from a multi-agency Executive Working Group and upper Steering Committee. An MCUD-created project management office (PMO) in Ulaanbaatar will oversee implementation of the urban infrastructure and agribusiness components with technical and policy support from the Ministry of Agricultural and Light Industry (MOFALI). The PMO will coordinate implementation of Tranche 1 with counterpart staff at the three Aimag project offices (APO) which in turn will work with inter-soum project offices. The Financial Intermediary Loan (FIL) component of project will be implemented by the Development Bank of Mongolia (DBM).

2 This is in relation to an ongoing ADB project. ADB. 2018. Report and Recommendation of the President to the Board of Directors: Proposed Loan and Administration of Loan and Grants to Mongolia for the Ulaanbaatar Green Affordable Housing and Resilient Urban Renewal Sector Project. Manila. 3 Pasture User Groups

Assessment Context

7. The ASDIP remains category B for environment pursuant to ADB’s 2009 Safeguard Policy Statement. This category B project will have potential adverse impacts that are less adverse than those of a Category A project because potential impacts of a category B project are short-term, site-specific, largely reversible, and can be mitigated with the supporting Aimag environmental management plans (EMP).

8. The original Category B designation for ASDIP is maintained because the project components for Tranche 1 are not in, near, or will affect national or international protected areas, or critical wildlife habitat (SPS 2009) and are not inhabited by rare or endangered wildlife. Two initially proposed project sites were screened out of Tranche 1 during the site investigations because the sites were located inside a National Park and a Game Reserve. Also, the field investigations confirmed that the potential impacts of planned project components of Tranche 1 are largely short-term construction-related disturbances that can either be prevented or mitigated. The original ADB Rapid Environmental Assessment (REA) of the ASDIP which assigned the project as Category B is found in Appendix A.

Benefits of ASDIP

9. A major comprehensive benefit of Tranche 1 of the ASDIP is the significant increase in standard of living of residents in the target Aimag centers and soum centers that will arise from the improvements to the diverse array of urban infrastructure and services. The attributes of the improvements to the standard of living and family health that will be realized by the affected communities are as follows: (i) In Aimag centers, access to modern, energy efficient apartments to replace traditional ger housing will lead to immediate improvements to in-house air quality (i.e., reduction in PM2.5 from coal and wooding), and a reduction in gastrointestinal- related illnesses from replacement of pit latrines with modern toilets and central wastewater collection. (ii) Expanded piped potable water supply. (iii) New and improved central wastewater collection and treatment. (iv) Expanded and improved central hot water and heating networks. (v) Improved electrical power supply. (vi) Better organized solid waste collection including cleaned and better contained landfills. (vii) Improved flood control and drainage. (viii) Improved utility services to community facilities such as schools, hospitals, and community centers. (ix) Significant improvements to surface water quality from improved wastewater treatment. (x) Estimated 1.1 million tco2 in direct emission reductions over the investment lifetime from the urban energy efficiency and renewable energy infrastructure computed for the climate change mitigation component of the separate Funding Proposal (FP) to the Green Climate Fund (GCF)

10. The second major benefit area of the ASDIP will arise from the agricultural component of the project which will introduce modern agribusiness technology and practices at the Aimag and soum centers which will be defined in Agropark complexes comprised of Disease Free Establishments, laboratories and veterinary services, regional research centers, meat processing

iii facilities, and process industries. Supporting the Agroparks will be irrigated fodder and hay farms. Major positive impacts of the agribusiness and pastureland management components will be:

(i) introduction of modern meat processing, handling and storage technologies (e.g., FAO 1988, WHO 1984, and other international standards), and waste management thereby reducing ongoing environmental pollution from present meat processing practices.

(ii) from #1, increased quality of meat produced for domestic and international markets thereby improving livelihood incomes of herders and exporters from meat exports to previously inaccessible lucrative international markets;

(iii) from #2, decreased size of livestock herds and therefore decreased overgrazing of the pastures in the Aimags leading to pasture habitat restoration;

(iv) from #3, decreased livestock methane (CH4) and nitrous oxide (NO3) emissions, and increased CO2 sequestration in restored pastureland thereby significantly reducing the carbon footprint of the project affected areas of western Mongolia. Specifically, estimates computed for separate Funding Proposal (FP) to the Green Climate Fund (GCF) are 94.0 million tCO2 in direct emission reductions over the investment lifetime from enhanced soil carbon sequestration, and 17.2 million tCO2e in direct emission reductions from reduced methane and nitrous oxide emissions resulting from a reduction in herd sizes.

11. With the estimated 1.1 million tCO2 direct emission reductions over the lifetime from the urban energy efficiency and renewable energy components, the total reductions in emissions over the lifetime of the investments estimated at 112.3 million tCO2. Potential Impacts – Construction Phase

12. The five project sites for Tranche 1 are not in, near, or will affect any area of conservation significance (SPS 2009).

13. The potential impacts of the construction of new and upgraded infrastructure (i.e., utility trunks lines [potable water, hot water, electricity, communications, wastewater], roads, buildings, drainage, riverbank and dyke improvements, water supply canals) for the urban areas and for the agribusiness components outside the urban areas will focus on short-term disturbances and impacts from civil works activities.

14. Common impacts and disturbances caused by the civil works in the Aimag centers and soum centers will consist of reduced and/or blocked public movement and access, disrupted utility services, disrupted business and recreation activity, noise and dust caused by earthworks, heavy truck movement, and equipment use, homestead soil pollution caused by equipment operation and maintenance, risk of public and worker accidents and injury, increased traffic congestion and traffic accidents, land erosion and downstream sedimentation of Aimag/soum rivers, and temporary localized drainage and flooding problems. Solid waste and domestic pollution from temporary worker camps can occur, as well as potential communicable disease and community problems caused by migrant workers. These short-term impacts and disturbances will occur at different levels of magnitude depending on the civil works activity and location in Aimag center or soum center. Specific impacts or disturbances of construction phase of Tranche 1 are summarized below.

iv At Three Aimag Centers And Umnugovi And Deluun Soum Centers

Safe and sustainable water supply

15. The households and businesses of all project areas rely on obtaining drinking water from nearby kiosks, and transporting the water primarily by foot back to homes and businesses. Often children of families are responsible for fetching and carrying the family water to the home.

16. It is critical that this single domestic activity is not disrupted when the infrastructure works and ger housing redevelopments occur. Children and mothers must be able to walk safely and freely near the construction sites while laden with the daily/weekly supply of water. Existing pedestrian routes must be protected with barriers between all construction sites and walkways. Temporary, protected routes must be created for water transport where necessary to protect the public. Similarly, the supply of potable water to the community ger distribution kiosks must also not be interrupted from construction activities.

Batch concrete and asphalt plants

17. Temporary batch plants for asphalt and concrete may be used for the infrastructure works in the urban areas. Batch plants potentially act as point sources of environmental and aesthetic pollution for the affected sites and local community. The issues arise from potential wind and water erosion (dust and sedimentation) from stockpiles of the raw materials of sands and other aggregates, chronic noise and public safety risks from batch processing and heavy truck traffic to/from the plants. Improper handling and storage of raw materials can also cause soil and surface water pollution from the curing chemicals in cement and hydrocarbons from (e.g., oil and thinners) for asphalt.

18. Best practice methods must be conducted to manage the creation, operation, and ultimate decommissioning of temporary batch plants. The contractor under supervision of MCUD must follow international guidelines stipulated by the World Bank (IFC) EHS Guidelines for 1) Cement and Lime Manufacturing, 2) Construction Material Extraction; and 3) Retail Petroleum Networks. The recent USEPA (2014) Code of practice Concrete batch processing can also be consulted.

Disruption of utility services

19. The extensive rehabilitation and expansion of infrastructure and utilities in the Aimag centers and soum centers will undoubtedly cause periods of utility outages for residents and businesses. Where possible temporary auxiliary or alternate utility service will be supplied to minimize the disruptions to the community.

Ulaangom

Flood prevention dyke improvements along levee lake

20. The 5.0km earthen dyke southwest of the city will be upgraded to prevent seasonal flooding of Ulaangom from spring stream-river runoff from the mountains in the west. The north end of the dyke is used to create a small lake for local drinking water and irrigation. Extra care must be taken to ensure that the berms and / or silt curtains are placed between the dyke work areas to prevent erosion and siltation of the levee lake.

v Umnugovi soum center

Dumpsite rehabilitation

21. Tranche 1 will include a detailed needs assessment of solid waste management at all five urban project sites including the five existing dumpsites. The needs assessments will characterize existing conditions, such as type of waste, physical profile (soils, topography and groundwater) and the environmental hazards that need to be remediated during future tranches of ASDIP. Groundwater sampling and testing will occur to assess possible existing contamination. The groundwater assessment is particularly important at Umnugovi soum because the Umnugovi dumpsite is being excavated by the local authorities to contain the garbage and reduce windblow without regard to the depth of the water table and groundwater which the adjacent soum center depends on for drinking water. The depth of the water table and quality of groundwater needs to be determined to ensure that groundwater is not being contaminated by the garbage.

Ulgii

Riverbank improvements to prevent flooding

22. A 1,250m section of the Khovd riverbank in Ulgii will be rehabilitated to prevent recurrent flooding of the city during spring high flow periods. Similar, to the levee lake in Ulaangom, care must be taken to install silt curtains and temporary earthen berms between the river and all riverbank works to prevent erosion and sedimentation of the river.

Potential Impacts - Operation phase

Infrastructure Components

Redeveloped Ger Housing

23. The significant benefit of the redeveloped of ger apartments in three Aimag centers will be a significant increase in the standard of living of the participating families. There are potential issues and impacts of introducing modern, densified apartment living that could detract from the increased standard living. Potential social-family issues with the operation/occupancy of the new apartments could arise from the increased density of family and possibly extended family households. Other potential issues relate to successful affordable operation and maintenance of the upgraded, modern utility services, energy efficient building technologies

Sustainable potable water supply

24. The potential impact of expanded water supplies is creation of water deficit situations from too much consumption. The planned expansion of potable groundwater supplies to the Aimag centers, and in particular soum centers, from additional pumps and/or wells via expanded supply networks must be sustainable. At the detailed design stage of Tranche 1 the seasonal availability of potable water whether groundwater or surface water needs to be examined to confirm sustainability of the sources both in terms of quantity and quality. Knowledge of the future sustainability of potable water is important given the impact of climate change on regional water resources.

vi Air emissions

25. A potential impact of the project is increased air pollution (CO2, NOx and SOx) as a result of the planned expansions of hot water heating networks in all three Aimag city centers (Ulaangom, Ugii, and Jargalant). Improvements to the quality of the coal-fired heating plant emissions are not planned for Tranche 1, and the present heating plants currently do not meet national or international emission standards. This means the ASDIP will need to consider upgrading the emission treatment technologies of the existing heating plants in the three cities to meet national or international (IFC-EHS – WHO) industrial emission standards in Tranche 2 or 3.

Agribusiness components

i. Sustainable water supply

(i) Surface waters

26. A potential impact of the agribusiness component is the creation of water deficit situations for project components that require a supply of surface water (rivers), and thus, potential water deficit creation for other (downstream) users of the water resource. The potential impact involves all planned 200ha and 500ha irrigation schemes. Thus, the feasibility estimates (Chapter III) of required volumes of water of 0.126m3/sec and 0.314m3/sec, respectively from local rivers to irrigate the new 200ha (soum center) and 500ha (Aimag center) fodder farms need to be confirmed at detailed design stage of Tranche 1.

27. Moreover, the available data on low flow discharge of potential source rivers near the irrigation schemes also need to be re-confirmed with accurate seasonal discharge measurements taken at the finalized extraction or diversion points of the source rivers. For example, using the 2018 discharge data the estimated 0.314m3/sec of irrigation water required for a 500ha fodder farm is approximately 35% of the low flow discharge measured at the gauge station on the closest river, which would not likely be sustainable. Further, the sustainable water supply for the planned 500ha irrigation scheme located on the lower reaches of the Teel river in Tarialan soum must be confirmed because a national hydrologist, and the independent results of the public consultations conducted in the area strongly indicate that the lower Teel river runs dry during the summer months.

(ii) Groundwater

28. Similar to the irrigation schemes, the availability of sustainable groundwater supplies at the projects sites, and the potential impact of the feasibility estimates of the water demands of planned meat processing facilities and Disease Free Establishments of the Agroparks on available groundwater yield need to be determined at detailed design phase.

(iii) Hydro-geological assessments

29. Thus, a key activity at the detailed design phase of Tranche 1 will be to conduct hydrological assessments at the project sites to determine the low flow discharge conditions at the finalized extraction points of all source rivers of the irrigation schemes, as well as the competing demand of downstream users of the rivers. Similarly, hydrogeological assessments at the sites are also needed to ascertain that sufficient groundwater is available for the Agropark facilities along with other users of groundwater in the affected areas. Together the water budget information will clarify sustainable water resources for the project.

vii

ii. Impact of Tarialan irrigation schemes on Uvs Lake Strictly Protected Area

30. The two types irrigation schemes planned in Tarialan soum will extract water from a river that discharges into Uvs Lake which is a national Strictly Protected Area. However, the notably small, relative volumes of planned water extractions from the river, along with information obtained on the Kharkiraa-Teel river which indicates that the river dries up before reaching Uvs Lake in summer indicates that the impact of the two irrigation schemes on Uvs lake will likely be nonexistent or negligible.

Existing Facilities of the ASDIP

31. The present wastewater treatment plants (WWTP) and heating plants (HCP) in the three Aimag centers are “existing facilities” (SPS (2009). The three Aimag WWTPs plants will be replaced or completely redesigned during Tranche 1 as part of the overall improvements to wastewater collection and treatment. The WWTPs will be replaced because the original Soviet technologies of the plants are no longer functioning as designed resulting in the plants not meeting national or IFC-EHS operational and environmental protection standards. Thus, the corrective actions (SPS 2009) for the existing WWTPs will become the new or completely upgraded plants that are produced by Tranche 1 of the ASDIP.

32. Tranche 1 will focus on upgrading the heating (hot water) networks in the three Aimag centers. The existing three Aimag HCPs are not part of the planned network upgrades with only water pumps possibly being replaced at a HCP. During detailed design stage of Tranche 1 the technologies, operations, and environmental protection management of the HCPs will be further examined to determine the extent of rehabilitation the HCPs will require for Tranche 2. During the site visit consultations with the HCP operators it was determined that the emissions of the plants do not meet national, and therefore international emission quality standards. Thus, the required corrective actions for the existing HCPs will be confirmed during detailed design stage of Tranche 1 for implementation during Tranche 2.

Cumulative or Induced Impacts

33. The major positive cumulative impact of ASDIP is increased standard of living of affected communities caused by the comprehensive improvements to urban infrastructure and services. Moreover, the significant induced impact of redeveloped ger housing is the effect of improvements to individual and family health on individual and family prosperity, and ultimately strengthened ger socio-economy.

34. Another major positive induced impact of ASDIP is the dual climate change mitigation of the future reductions livestock herds on the sequestration of CO2 into restored pastureland habitat, and the reduction in emissions of methane (CH4) produced by livestock.

35. Potential negative cumulative impacts of the project could become newly created or exacerbated existing water shortages caused by the water consuming components of the project. The water consuming components are defined by the expanded urban potable water supplies (e.g., groundwater), new irrigation schemes (e.g., surface water), and agribusiness components such as planned meat processing facilities (groundwater).

viii Conclusions and Recommendations

36. The construction phase of the diverse array of infrastructure components require careful mitigation measures to ensure construction disturbances and impacts are minimized and managed with standard construction practice and mitigation measures. Of particular importance is that the current practice of manual transport of household water needs from local kiosks must receive maximum protection during construction phase so that no water supply to any household is disrupted for a single day.

37. The infrastructure and agribusiness components of the ASDIP will not negatively impact protected areas, critical wildlife habitat, or rare or endangered wildlife. This was ascertained with the early screening and removal of the Mankhan soum and Myangad soum sites in Khovd Aimag which contained all three sensitive ecological characteristics, and by the determination that the feasibility designs of the two types of irrigations schemes planned on the Kharkiraa-Teel river in Tarialan soum, Uvs Aimag will not impact the Uvs lake protected area. .

38. The water requirements of the project components of Tranche 1 with special reference to the irrigation schemes (surface water) and Agropark facilities (groundwater) need to be clarified at detailed design stage along with source water availability to ensure sustainable water resources are available for all users in the project areas.

39. The Aimag EMPs developed for ASDIP provide impact mitigation plans, environmental monitoring plans, and specify the institutional responsibilities and capacity needs for the environmental management of ASDIP. The EMPs will need to be reviewed and updated at the detailed design phase to ensure that EMPs fully addresses the potential impacts of the final project component designs.

40. The IEE concludes that the description of the feasibility designs of Tranche 1 of the ASDIP combined with available information on the affected environments is sufficient to identify the scope of potential environmental impacts of ASDIP. Providing significant changes do not occur to the design of one or more of the ASDIP components, that information on available water resources obtained at detailed design does not identify water shortages problems, and that new sensitive environmental or social receptor data are not discovered, the ASDIP will remain Category B for environment and will not require further detailed environmental impact assessment (EIA).

ix TABLE OF CONTENTS EXECUTIVE SUMMARY I I. INTRODUCTION 1 A. Background to IEE 1 B. Assessment Context 3 C. Structure of report 4 II. POLICY, LEGAL, AND ADMINISTRATIVE FRAMEWORK 4 A. Environmental Impact Assessment 4 B. Legal Framework for Environmental Protection 5 C. ADB Safeguard Policy 11 III. DESCRIPTION OF THE ASDIP 11 A. Uvs Aimag 13 B. Bayan-Ulgii Aimag 56 C. Khovd Aimag 90 IV. DESCRIPTION OF AFFECTED ENVIRONMENTS 107 A. Physical Environment 107 B. Ecological Resources 144 C. Socioeconomic Profile 150 V. PUBLIC CONSULTATION 154 A. Identification of Stakeholders 155 B. Consultation Discussion Topics 156 C. Consultation Procedure 157 D. Results of Public Consultation in the Aimag centers and soum centers 158 VI. POTENTIAL ENVIRONMENTAL IMPACTS AND MITIGATIONS 164 A. Benefits to the three Aimag centers and two soum centers 164 B. Impacts and Mitigations 165 C. Cumulative or Induced Impacts 173 D. Existing Facilities of Feasibility Design of Tranche 1 173 E. Climate Change 174 VII. ANALYSIS OF ALTERNATIVES 175 VIII. INFORMATION DISCLOSURE AND GRIEVANCE REDRESS MECHANISM 176 A. Information Disclosure 176 B. Grievance Redress Mechanism (GRM) 176 IX. INSTITUTIONAL CAPACITY AND TRAINING NEEDS 179 X. CONCLUSIONS AND RECOMMENDATIONS 180 APPENDIX A: ORIGINAL RAPID ENVIRONMENTAL ASSESSMENT OF THE ASDIP 181 APPENDIX B: NATIONAL QUALITY STANDARDS RELEVANT TO ASDIP 186 APPENDIX C: COMPLETE PUBLIC CONSULTATION MEETING MINUTES 194

Table 1: Planned Urban Investments of ASDIP in Aimag and Soum Centers ...... 2 Table 2: Planned Agribusiness Investments of ASDIP in Aimag and Soum Centers ...... 2

x Table 3: Summary of laws relevant to the ASDIP...... 6 Table 4: Relevant International Conventions to Which Mongolia is Signatory ...... 10 Table 5: Planned Urban Infrastructure Investments of Tranche 1 In Ulaangom ...... 17 Table 6: Planned Urban Infrastructure Investments of Tranche 1 in Umnugovi Soum ...... 30 Table 7. Hay and fodder storage requirements ...... 40 Table 8: Example Equipment and Consumables Required for Laboratory Support...... 41 Table 9: Estimated process industry water requirements of Agroparks ...... 45 Table 10: Plant Rotation and Production For Feedlot ...... 48 Table 11: Proposed Seasonal Diversion of 3% of River to Storage Ponds ...... 54 Table 12. Plant Rotation and Production for Feedlot ...... 56 Table 13: Planned Urban Infrastructure Investments of Tranche 1 in Ulgii ...... 60 Table 14: Planned Urban Infrastructure Investments of Tranche 1 in Deluun Soum ...... 71 Table 15: Hay/fodder Storage Needs ...... 83 Table 16: Example Required Equipment and Consumables for Inspection Laboratory...... 84 Table 17: Estimated Process Industry Water Requirements of Agroparks ...... 86 Table 18: Crop Rotation and Production for Feedlot ...... 89 Table 19: Planned Urban Infrastructure Investments of Tranche 1 in Jargalant ...... 93 Table 20: Hay and Fodder Storage Requirements ...... 104 Table 21: Example Required Equipment And Consumables For Inspection Laboratory ...... 104 Table 22: Estimated Process Industry Water Requirements of Agropark ...... 106 Table 23: Climate Data For Ulaangom, Uvs Aimag ...... 110 Table 24: Climate Data For Umnugovi Soum, Uvs Aimag ...... 110 Table 25: Climate Data For Ulgii, Bayan-Ulgii Aimag ...... 111 Table 26: Climate Data For Deluun Soum, Bayan-Ulgii Aimag ...... 111 Table 27: Climate Data For Jargalant, Khovd Aimag ...... 112 Table 28: Air Quality In Ulaangom, Uvs Aimag Center ...... 112 Table 29: Air Quality In Ulaangom, Uvs Aimag...... 113 Table 30: Air Quality in Ulgii, Bayan-Ulgii Aimag Center 2002-2018 ...... 113 Table 31: Air Quality In Ulgii Soum Of Bayan Ulgii Aimag ...... 113 Table 32: Air Quality In Jargalant, Khovd Aimag Center (last 17 years) ...... 114 Table 33: Air Quality In Jargalant Soum, Khovd Aimag ...... 114 Table 34: National And International Ambient Air Quality Standards ...... 115 Table 35: Boiler Emission National Standard and WHO Guidelines ...... 115 Table 36: Ambient Noise In Jargalant Of Khovd Aimag ...... 116 Table 37: Ambient Noise In Ulaangom Of Uvs Aimag ...... 117 Table 38: Ambient Noise In Ulgii Of Bayan-Ulgii Aimag ...... 117 Table 39: Number Of Rivers, Springs, And Lakes In Khovd, Uvs And Bayan-Ulgii Aimags ..... 119 Table 40: Available Discharge (m3/sec) Data of Rivers Near Project Sites ...... 122 Table 41: Mongolia Surface Water Quality Standards ...... 127 Table 42: Bacteria Levels In Kharkiraa River And Tributaries Of Ulaangom ...... 129 Table 43: Bacteriology Levels In Namir River Upstream And Downstream Of Umnugovi ...... 130 Table 44: Bacteria Levels In Khovd River Upstream And Downstream Of Ulgii...... 130 Table 45: Bacteria Levels In Chigertei River Upstream And Downstream Of Deluun ...... 131 Table 46: Bacteria Levels In Buyant River In Jargalant, Khovd Aimag ...... 13 1 Table 47: Heavy Metal Content In Five Rivers At ASDIP Project Areas...... 132 Table 48: Heavy Metal Content In Wastewater Effluent ...... 133 Table 49: Chemical Properties Of Groundwater At ASDIP Project Sites ...... 134 Table 50: Bacteria Levels In Groundwater At Project Sites ...... 135 Table 51: National Soil Quality Standards For Heavy Metals ...... 141 Table 52: Summary Of Public Consultations Of Affected Persons And Local Government ..... 155 Table 53: Environmental Components to Guide Discussions ...... 157

xi Table 54: Guiding Questions And Information Requests For Stakeholder Consultations ...... 158 Table 55: Summary Of Key Discussion Points Of Consultations In The Five Project Sites ...... 159 Table 56: Estimated Land Acquisition And Resettlement (LAR) ...... 165

Figure 1: Three Western Aimags of Tranche 1 ...... 12 Figure 2: Aerial View of Ulaangom Highlighting Bag 4 (red) and Bag 9...... 14 Figure 3: Bag 4 of Ulaangom ...... 15 Figure 4: Example Khasha in Ulaangom Representative of Other Aimag Centers ...... 16 Figure 5: Plan Views of Infrastructure Investments of Tranche 1 in Ulaangom ...... 20 Figure 6: Planned Improvements To Public Buildings And Sanitation In Umnugovi Soum ...... 29 Figure 7: Plan Views of Infrastructure Investments of Tranche 1 in Umnugovi Soum ...... 32 Figure 8: Location of Agropark Just North of Ulaangom ...... 38 Figure 9: Location of Agropark at Umnugovi Soum ...... 39 Figure 10: Irrigated fodder farm in Tarialan soum southeast of Ulaangom ...... 46 Figure 11: Aerial View of Subprojects 1 and 2 of MET’s HMWM Proposal in Tarialan ...... 52 Figure 12: Plan View of Subproject 2 of HMWN and 500 ha Irrigation Scheme ...... 52 Figure 13: Subproject 2 of HMWM in Tarialan Soum ...... 53 Figure 14: Site of irrigated fodder farm north of Umnugovi soum ...... 55 Figure 15: Aerial View of Ulgii Highlighting Bag 13 (red) and Bag 5...... 57 Figure 16: Bag 13 of Ulgii ...... 58 Figure 17. Plan views of infrastructure investments of Tranche 1 in Ulgii ...... 62 Figure 18: Planned Improvements to Public Buildings and Sanitation in Deluun Soum ...... 70 Figure 19: Plan Views of Infrastructure Investments of Tranche 1 in Deluun Soum ...... 73 Figure 20: Location of Agropark South of Ulgii Center ...... 81 Figure 21: Location of Agropark at Deluun Soum ...... 82 Figure 22: Location of Irrigation Scheme Southeast of Ulgii In Buyant Soum ...... 87 Figure 23: Location of Irrigated Hay Growing Area in Deluun Soum ...... 89 Figure 24: Aerial View of Jargalant Highlighting Alagtolgoi (Bagh) ...... 91 Figure 25: Alagtolgoi (Bag) of Jargalant ...... 92 Figure 26: Plan View of Infrastructure Investments of Tranche 1 in Jargalant ...... 95 Figure 27: Location of Agropark East of Jargalant...... 103 Figure 28: Soil Types In Western Aimags ...... 109 Figure 29: Noise Levels In Jargalant ...... 116 Figure 30: Noise Levels In Ulaangom ...... 117 Figure 31: Noise Levels In Ulgii ...... 118 Figure 32: Surface Waters Of Western Aimag Project Areas ...... 120 Figure 33: BOD5 and pH levels in Gashuun River at Ulaangom ...... 123 Figure 34: Nutrient and pH levels in Namir River, Umnugovi Soum ...... 124 Figure 35: Nutrient and pH Levels in Khovd River at Ulgii ...... 125 Figure 36: Nutrient, pH, and BOD5 Levels in Buyant River at Jargalant ...... 126 Figure 37: Nutrient and pH Levels in Deluun Soum, Bayan-Ulgii Aimag ...... 127 Figure 38: Groundwater Resources Of Project Areas...... 135 Figure 39: Soil Heavy Metals In Two Locations In Jargalant ...... 137 Figure 40: Soil Arsenic Content In City’s Market And Powerplant Area In Jargalant ...... 137 Figure 41: Soil Heavy Metals In Polluted Areas Of Ulgii ...... 138 Figure 42: Soil Heavy Metals In Deluun ...... 139 Figure 43: Soil Heavy Metals In Ulaangom ...... 140 Figure 44: Soil Arsenic in Ulaangom ...... 140 Figure 45: Soil Heavy Metals In Umnugovi Soum ...... 141 Figure 46: Permafrost in Western Aimags ...... 143 Figure 47: Vegetation Types of Western Aimags ...... 144

xii Figure 48: Location of Altai-Sayan Ecosystem ...... 145 Figure 49: Geographic Range of Saiga Antelope ...... 146 Figure 50: Protected Areas in Western Aimags ...... 147 Figure 51: Grievance Redress Mechanism ...... 178

xiii I. INTRODUCTION

A. Background to IEE

1. The Aimag and Soum Development Investment Program (ASDIP) will promote local economic development and improve basic urban services in priority Aimags of Mongolia1. The program will support the government in establishing inclusive, green urban development, resilient rangeland management, and sustainable agribusiness values chains in select Aimags. For each Aimag the ASDIP will comprise a sequenced set of green urban and rural infrastructure developments, and agribusiness investments, which are supported by implementation mechanisms, policy actions, and capacity building support. The ASDIP investments will reduce the vulnerability of the country to climate change and further pastureland degradation.

2. The four outputs2 of the ASDIP are:

3. The ASDIP will be financed with a Multi-tranche Tranche (MFF) loan modality. Tranche 1 and the focus of this IEE are the three western Aimag centers of Ulaangom of Uvs Aimag, Ulgii of Bayan-Ulgii Aimag, Jargalant of Khovd Aimag, and the two soum centers of Umnugovi and Deluun of Uvs and Bayan-Ulgii Aimags, respectively.

4. To facilitate the Outputs of the project the multisector ASDIP will invest in the following two major component areas:

(i) Basic urban infrastructure, services, and facilities; and (ii) Agribusiness developments including improved pastureland management

in the three selected Aimag centers and two soum centers. Tables 1 and 2 summarize the planned investments. The urban investments will occur primarily inside the Aimag and soum centers, whereas the agribusiness investments will occur outside but near the Aimag and soum centers.

1 An Aimag is an administrative subdivision equivalent to province in Mongolia. There are 21 Aimags and Aimag centers. A soum is an administrative subunit of an Aimag, and its center is called a soum center. There are 304 soums in Mongolia (not including Aimag centers). Soums have average populations of 4,000 and cover an average land are of 5,000 square kilometers. 2 From Fact Finding Mission (11/19) with national project counterparts (MCUD/ALAMGac, MOFALI/NFPUG).

1 Table 1: Planned Urban Investments of ASDIP in Aimag and Soum Centers

Urban Investments • Heating supply network • Ger housing redevelopment3 improvements • River and dyke embankments for • Road developments and drainage flood control • Improvements to wastewater collection, and new or completely • Irrigation networks upgraded treatment plants (WWTP)

Table 2: Planned Agribusiness Investments of ASDIP in Aimag and Soum Centers

Agribusiness Investments*

• Community-based micro-projects for • Agroparks PUGs4:

* investments will be supported by infrastructure in Table 1 ** irrigation network and fodder farm not planned for Khovd Aimag Source: Asian Development Bank.

5. The ASDIP will be executed by the Ministry of Construction and Urban Development (MCUD) which will receive direct technical and policy support from the Ministry of Agricultural and Light Industry (MOFALI). The MCUD will oversee implementation of the urban infrastructure and services components of the project while the MOFALI and the Development Bank of Mongolia (DBM) will implement the agribusiness and rangeland management components. The dual ministerial technical and policy support of ASDIP is essential for the successful and sustainable implementation of the two major, and very different project investments.

3 sensu, Ulaanbaatar Affordable Green Housing and Resilient Urban Renewal Project (AHURP), TA 9030, 2017. 4 Pasture User Groups

2 B. Assessment Context

6. The ASDIP remains category B for environment pursuant to ADB’s 2009 Safeguard Policy Statement5 and recent good practice sourcebook6. A category B project will have potential adverse impacts that are less adverse than those of a Category A project, are site-specific, largely reversible, and can be mitigated with an environmental management plan (EMP)7. The original Category B designation for ASDIP is maintained because the project components for Tranche 1 are not in, near, or will affect national or international protected areas, or critical wildlife habitat (SPS 2009) and are not inhabited by rare or endangered wildlife. Two initially proposed project sites were screened out of Tranche 1 during the site investigations because the proposed sites created Category A conditions being located inside a National Park and a Game Reserve. Also, the field investigations confirmed that the potential impacts of planned project components of Tranche 1 are largely short-term construction-related disturbances that can either be prevented or mitigated. The original Rapid Environmental Assessment (REA) of the ASDIP is found in Appendix A.

7. Pursuant to the Mongolian Law on Environmental Impact Assessment (2012), the ASDIP will require a Detailed Environmental Impact Assessment (DEIA) to guide and ensure safeguard compliance with the Law. The DEIA will be conducted following the completion of the PPTA for the ASDIP and will be prepared based on the future detailed designs of Tranche 1.

1. Impact footprints of ASDIP

8. The urban investments (Table 1) will occur inside established urban areas and on existing urban development impact footprints. Thus, the dominant environmental impacts of the urban developments in general will be the short-term disturbances and impacts of the construction and civil-works phase of the infrastructure investments. The planned improvements to water treatment, wastewater collection and treatment, solid waste management, and drainage and flood control will result in significant net positive impacts on the urban environments.

9. The planned agribusiness investments (Table 2) will occur mostly outside urban areas in primarily pastureland areas. The agribusiness investments of the modern Agroparks, animal husbandry, and livestock complexes of meat processing and animal health centers are new to Mongolia and thus will be new to the affected pastureland areas. Some agribusiness investments were screened out of sensitive ecological areas during the field investigations (see Chapter VI).

2. FI Implementation

10. Some of the agribusiness components of the ASDIP will be implemented by three private sector financial intermediaries (FI) as per SPS (2009) which are defined by the following commercial banks: the Asset Management Corporation (AMC) of the Development Bank of Mongolia (DBM), Xac Bank, and Khan Bank. Safeguard direction and support for the participating FIs (PFI) will be provided by a separately prepared Environmental and Social Management System (ESMS) that the PFIs will follow to supplement their in-house ESMSs.

5 ADB. 2009. Safeguard Policy Statement. Manila. 6 ADB. 2012. Environmental Safeguards, A Good Practice Sourcebook, Draft. Manila. 7 Footnote 5, pg 19.

3 3. Assessment Framework

11. As a MFF loan project that will be disbursed in a series of three tranches, the ASDIP will require an Environmental Assessment and Review Framework (EARF) to guide project counterparts with their assessment and safeguard developments of the subsequent tranches of the ASDIP8. The EARF for the ASDIP was prepared separately.

C. Structure of report

12. A single IEE was prepared for the three Aimags including both soum centers. This report on the IEE follows closely the format of an EIA outlined in Annex 1, Appendix 1 of the SPS (2009). The results of the IEE are presented by Aimag center / soum center. Common environments and assessment results are presented together in order to prevent or minimize redundancy in the assessment. However, three single environmental management plans (EMP) have been prepared for the three Aimags and constituent soum centers.

II. POLICY, LEGAL, AND ADMINISTRATIVE FRAMEWORK

13. The ASDIP will be executed by the Ministry of Construction and Urban Development (MCUD) and be implemented jointly with Ministry of Agricultural and Light Industry (MOFALI), and the Development Bank of Mongolia (DBM). The DBM will oversee the implementation of Agribusiness component of ASDIP to the private sector through three Financial Intermediaries (FI) defined by the Asset Management Company (AMC) of DBM, Xac bank and Khan Bank. The MCUD will oversee implementation of the urban infrastructure and services components of the project while the MOFALI and DBM will implement to agribusiness and pastureland management components. The dual ministerial technical and policy support of ASDIP is essential for the successful and sustainable implementation of the two major, and very different project components.

A. Environmental Impact Assessment

14. Environmental impact assessment in Mongolia is guided by the Law on Environmental Impact Assessment (2012) which is administered by the Ministry of Environment and Tourism (MET). The EIA protocol for all projects is two tiered defined initially by a general EIA (GEIA) - initial screening, followed by either a full detailed EIA (DEIA) or an Environmental Management Plan (EMP). The initial GEIA is normally conducted by the MET which identifies the required level of further impact assessment of a project. For major projects the GEIA prescribes the follow-up requirement a DEIA, whereas for minor impact projects, the GEIA can prescribe only an environmental management plan (EMP) be prepared for the project.

15. The initial step in the EIA process is the submission by the project owner of an application to the MET or provincial/municipality environment department for a GEIA to be conducted on the proposed project. The initial application is comprised of the following information components: i) original baseline description of the affected environments; ii) description of the detailed design of the project including drawings; and iii) technical and economic justification for the project. As introduced above, the possible outcomes of the GEIA are:

(i) project may be implemented without conducting a detailed environmental impact assessment (DEIA) or EMP;

8 Footnote #4

4 (ii) project may be implemented without conducting a detailed environmental impact assessment (DEIA), but with specific conditions and/or impact mitigation measures specified in an EMP; (iii) project requires a full DEIA; or (iv) project rejected on grounds of non-conformity with relevant legislation, or the adverse impact of the equipment and technology on the environment are too great, or absence of the project in the land management.

16. Finally, in accordance with the EIA Law (2012) for minor-impact projects the initial GEIA of a project can be prepared by the provincial environment department or the municipality office in which the project will occur. The provincial department or municipality then reviews and approves the requirements specified by their GEIA which is normally an EMP. This approach facilitates a faster review of any environmental issues of projects which is preferred for projects that are relatively benign with respect to environmental impacts.

17. The Ministry of Construction and Urban Development (MCUD), who is the owner of the ASDIP, is responsible for preparing and submitting an application for the initial GEIA to be prepared by the MET. As part of the environmental due diligence of the ASDIP the national consultant will prepare and submit the required GEIA application to the MET using the FS design for Tranche 1. Given the complexity of the ASDIP, the outcome of the GEIA will most likely be the requirement for a DEIA. Implementation of the DEIA, however, must wait and be based on the detailed designs of Tranche 1 of ASDIP. When the GEIA application is submitted to the MET the MET will also review and approve the IEE.

18. The GEIA application is very helpful to the ADB IEE and overall environmental safeguard requirements of the SPS (2009). In particular, are the original environmental baseline data and information that is collected and data for the GEIA application. This information strengthens the IEE and supporting EMPs.

B. Legal Framework for Environmental Protection

19. The Government of Mongolia has established specific laws and environmental standards for the protection of the environment, resources, and protected areas, and for pollution management. The elements of the broader legal framework of Mongolia that are relevant to the ASDIP are summarized in Table 3. The relevant national environmental quality and technical standards for ASDIP are listed in Appendix B. The GEIA for a nationally or donor funded project that is prepared by the MET that is followed by either the preparation of DEIA or EMP by a licensed Mongolian EIA Institute is the single comprehensive domestic safeguards requirement. The environmental due diligence conducted by ODA or donor agencies such as the ADB are not required to be reviewed and endorsed by the government.

5 Table 3: Summary of Laws Relevant to the ASDIP

Relevant Responsible Ministry / National Law Chapter Agency

1. Law on the Development Policy Planning Ministry of Urban Development and Construction (MCUD)

Convene public consultation with the affected communities on the scope and 19 impacts of policies, strategies and programs. 2. Law on Water Ministry of Environment and Tourism (MET)

Protection of water resources 22

Protection of water resources from pollution: Dismiss water use rights of entities in case of excessive discharge of wastewater or non-compliance with applicable 24 standards

The Government shall establish fees for water pollution and depletion of water 25 resources

Conditions for termination of the water use contracts 29

Obligations of water users 30

Water use fees and tariffs 31 3. Law on Fees for Water Pollution MET

Determination and registration of water polluters 4

Subject for water pollution fees 5

Exemptions and discounts from water pollution fees 8

Operations of urban water supply and sewerage network 9

Tasks and compositions of the Regulatory Commissions for Water Supply and 9 Sewerage Network

Technical specifications for the operations of urban water supply and sewerage 11 networks

Special permits and licenses 12

Contracts 13

Obligations of the service providers 14 The service provider shall not be allowed to impede consumers rights without legal basis and reject applications for the technical specifications

Users rights and obligations 15

Conditions for suspension of water supply and sewerage services 16

Protection zone for sewerage line and it is not allowed to construct facilities and 17 utilities within 6 meters from sewerage line.

The technical requirements for locations of wastewater treatment plants 18

6 Relevant Responsible Ministry / National Law Chapter Agency MET and MCUD 4. Law on Land

Transfer of the land title 39

The land leaser shall release land on the expiration of land possession certificate 41

The public land owner shall pay compensation for premature termination of the 43 land lease agreement

Use of land for special and public purposes 46

Use of third party land for temporary and transit uses 48

The requirements for proper use of land 50

Public health requirements for land use 51

Proper use and protection of urban land 56

Compensation for land damage 61 5. Law on Re-Development of Urban Settlements MCUD

The re-development of urban settlements shall comply with the requirements and principles set forth in the Paragraph 4.1 of the Law on Urban Planning. The top 5 priority is to represent interests of the residents.

Types of re-development activities shall include 12.1.3 re-development of ger 12 areas land

Regarding planning of the ger areas 17

Rights and obligations of the developers 23

Tripartite agreement shall be made between the land possessor, developer and 24 respective administrative unit Governors

The land title shall be transferred to the developer in accordance with terms and 25 conditions of the tripartite agreement 6. Law on Land Privatization MCUD

Rights and obligations of the land owner 27

Termination of the land ownership rights 31

Re-possession of the land right by the state 32

Conditions for the servitude 33

Confiscation of the land 35

Conditions for resettlement 37 7. Law on Land Fees MCUD

Determination of the Land Use Fee payers 3

The Subjects to Land Fees 4

7 Relevant Responsible Ministry / National Law Chapter Agency

Exemptions from land fees 8

Liabilities of land fee payers 12 8. Law on Environmental Protection MET

Rights and obligation of citizen with regard to environmental protection 4

Immunity of natural resources 6

Protection of environment from pollution 21

Rights and obligations of entities and organizations 31

Compensation for damage to environment 49, 57 9. Law on Soil Protection and Preventing Desertification MET

Soils protection measures 6

Compensation for damages to soil 9 10. Law on Environmental Impact Assessment MET

Detailed EIA 8

Environmental Management Plan (EMP) 9

Obligations of program and project proponents 14

Rights and obligations of the licensed EIA entity 15

Financing institutions shall refrain from supporting project with adverse 17 environmental and public health impacts

Public consultation process in EIA 18

Compensation for damages from non-compliance with EIA and EMP 20 MET 11. Law on Air

Rights and obligations of individuals and organizations 9

Air quality data 12

Principles and measures to reduce air pollution 13

Critical zone to improve air quality 15

List of prohibited activities in the critical zone 16

Air emissions 20

Technical requirements for construction works to protect air quality 21 12. Law on Fees for Air Pollution MET

Registration of air polluters 4

Physical factors to determine air polluters fee 6

Fees 7

8 Relevant Responsible Ministry / National Law Chapter Agency

Exemptions and discounts of fees 8 13. Law on Construction MCUD

Permits for construction 7 11,12, Technical requirements for design, construction materials and civil works 13

Requirements for construction sites 16

Servitude in accordance with civil code and other applicable legislations 17

The client for construction projects shall not be entitled to modify the original 37 design without prior consent of the author

14. Law on Wildlife MET

Protect wildlife 6

Compensation for damage to wildlife 37 MET 15. Law on Plant Protection

Obligations of individuals and organizations on plant protection 13

Plant quarantine 14 Ministry of Education, 16. Law on Protection of Cultural Heritage Culture and Science (MECS)

Registration and database on cultural heritage 21

Any activities related to mining, agriculture and construction of infrastructure are 38 prohibited in historical sites. 17. Law on Work and Health Safety Ministry Labor and Social Welfare (MLSW) and Ministry of Health (MH)

Work safety requirements for construction and production sites 7

Safety requirements for work equipment and tools 9

Fire safety requirements 13

Obligations of the employers with regard to work safety and public health 28

Response to industrial disaster and employment injuries 29

State compliance inspections 33 National Emergency 18. Law on Fire Safety Management Agency (NEMA)

Rights and obligations of individuals on fire safety 16

9 Relevant Responsible Ministry / National Law Chapter Agency

General requirements for fire safety 19

Technical requirements for fire control equipment 23 19. Law on Waste 2016 MET

General rights and obligations of citizen and entities with regard to solid waste 9

Disposal of solid wastes 11

Collection and transportation of solid wastes 12 MET 20. Law on Toxic and Hazardous Chemicals

Basic requirements for handling of toxic and hazardous chemicals 13

Risk assessment 17 21. Law on Hygiene MH

Sanitary requirements to environment 4

Sanitary requirements to urban planning and construction 5

Sanitary requirement to work place 6 Source: Asian Development Bank.

20. Mongolia is signatory to international environmental treaties and conventions which provide a comprehensive legal framework related to environmental management. Table 4 outlines these conventions.

Table 4: Relevant International Conventions to Which Mongolia is Signatory

Responsible International Convention / Protocol Joined Ministry or Agency

MET United Nations Framework Convention on Climate Change 1993 (r) MET Kyoto Protocol 1999 (a) MET Convention on Biological Diversity 1993 (r)

Ramsar Wetlands MET Vienna Convention for the Protection of the Ozone Layer 1996 (a) MET Montreal Protocol on Substances That Deplete the Ozone Layer 1996 (a) MET Washington Convention on International Trade in Endangered 1996 (a) Species of Wild Fauna and Flora (CITES) MET, Ministry of Stockholm Convention on Persistent Organic Pollutants 2004 (r) Foreign Affairs (MFA) (a) accession; (e) entry into force; (r) ratification. Source: Asian Development Bank.

10 C. ADB Safeguard Policy

21. The ADB safeguard policy statement (SPS, 2009) along with the recent Good Practice Safeguard Sourcebook (2012) clarify the rationale, scope and content of an environmental assessment. The SPS (2009) and Sourcebook (2012) are supported by the comprehensive World Bank Group/IFC Environmental Health and Safety (EHS) Guidelines (2007) for development projects. The IFC-EHS guidelines provide directives for environmental protection and safety for a range of sectors relevant to the ASDIP including water and sanitation, liquid and solid waste management, agribusiness including animal product processing, and road development which provide general and industry -specific Good International Industry Practice (GIIP) guidelines. The IFC-EHS guidelines also provide environment quality standards for air, water, effluent, and emissions. When national environmental standards are less stringent than IFC standards, the relevant IFC standard is used.

22. Projects are initially screened to determine the level of assessment that is required according to the following three environmental categories (A, B, or C). Category A is assigned to projects that normally cause significant or major environmental impacts that are irreversible, diverse or unprecedented such as hydroelectric dams (an Environmental Impact Assessment is required). Category B projects have potential adverse impacts that are less adverse than those of category A, are site-specific, largely reversible, and for which mitigation measures can be designed more readily than for category A projects (an Initial Environmental Examination is required). Category C projects are likely to have minimal or no negative environmental impacts. An environmental assessment for Category C projects is not required but environmental implications need to be reviewed and reported. As indicated above the ASDIP is category B for environment. The structure of the required IEE follows Annex 1 of Appendix 1 of the SPS (2009).

23. The SPS (2009) requires a stakeholder consultation strategy be developed that embodies the principles of meaningful engagement, transparency, participation, and inclusiveness to ensure that affected and marginalized groups such as women and the poor were given equal opportunities to participate in the design of the project. To support stakeholder engagement a grievance redress mechanism (GRM) is required for the ASDIP. The GRM ensures that issues or concerns of potentially affected persons will be heard easily by the authorities.

III. DESCRIPTION OF THE ASDIP

24. The description of the components of ASDIP was prepared by the engineering and agricultural teams which they submitted as part the project final report9. The ASDIP is comprised of the following two major types of investment:

(i) Improvements to basic urban infrastructure and services including ger housing and community buildings; and (ii) Development of agribusiness facilities including improved pasture management.

25. Tranche 1 of the ASDIP will occur in the three western Aimags of Uvs, Bayan-Ulgii, and Khovd (Figure 1) in the Aimag city centers of Ulaangom (Uvs), Ulgii (Bayan-Ulgii), and Jargalant (Khovd). Investments will also occur in the soum centers of Tarialan and Umnugovi (Uvs Aimag), and Deluun and Buyant (Bayan-Ulgii Aimag). A soum center of Khovd Aimag is not included in Tranche 1.

9 Final Report on ASDIP, April 2020, 5 Vols + Annexes

11 Figure 1: Three Western Aimags of Tranche 1

**From ASDIP Draft Final Report Source: Asian Development Bank.

Structure of project description

26. The description of the project is structured by the three Aimags in the following order: Uvs, Bayan-Ulgii, and Khovd including the constitutent Aimag soums10. Within each Aimag section the Infrastructure components are presented first followed by the Agribusiness components.

27. In the Aimag centers the infrastructure components consist: (i) of ger housing redevelopment; and (ii) other basic infrastructure such as heating, wastewater, water supply, electricity, roads, solid waste etc which also support the ger housing redevelopments. In the soum centers the infrastructure components are defined by: (i) public building improvements; and (ii) other basic infrastructure such as heating, wastewater, water supply, electricity, roads, solid waste etc which also support the public building redevelopments.

10 A project soum is not included for Khovd Aimag.

28. In both the Aimag and soum centers the agribusiness components consist of: (i) Pasture User Group Support; (ii) Agroparks; and (iii) Irrigation schemes and fodder farms. Unlike the infrastructure components the agribusiness components in the Aimag and soums centers are presented together because the components are the same. The only deviation is in Tarialan soum (Uvs Aimag) and Buyant soum (Baya-ulgii Aimag) in which only irrigation schemes and fodder farms will be developed.

A. Uvs Aimag

Overview

29. The improvements to basic urban infrastructure, and the development of agribusiness facilities will occur Ulaangom; the center of UVs Aimag and at the selected soum centers of Umnugovi and Tarialan. Unlike the infrastructure and agribusiness investments in Umnugovi soum, only irrigation schemes will be developed in Tarialan soum. Most of the urban infrastructure will occur inside both urban centers while the agribusiness activities will occur just outside both urban areas. Urban infrastructure planned for Ulaangom and Umnugovi soum is presented first followed by planned agribusiness investments.

1. Urban Infrastructure

a. Ulaangom

30. Urban infrastructure investments in Ulaangom are defined by the following 2 main components:

(i) Ger area housing redevelopment and services rehabilitation; and (ii) a complex of basic infrastructure and utility service improvements throughout Ulaangom comprised of water supply, heating, wastewater collection and treatment, electricity, communications, solid waste management, roads and drainage, and flood control.

i. Ger area housing redevelopment in Ulaangom

31. Figure 2 provides an aerial view of Ulaangom which highlights the perimeters of urban districts of Bag 4 (red) and Bag 9. Ger housing redevelopment is planned for Bag 4 and optionally in Bag 9. Ger redevelopment in Bag 9 may wait until Tranche 2 which will be determined at detailed design stage of Tranche 1. Redevelopment of housing and utility services will occur along a selected pilot road in Bag 4 (Figure 3). The pilot road will be upgraded and new and upgraded utility trunk lines to service the redevelopment area will be installed along the right-of-way (ROW) of pilot road.

32. Redevelopment of ger area housing will occur in individual khashas and will consist of small 1-2 story apartments that are constructed with modern energy efficient construction materials. The apartments will be serviced with hot water heating, wastewater collection disposal, electricity, and solid waste recycling facilities. Technical Units (TU) comprised of toilets, bathing and laundry facilities will be included.

Figure 2: Aerial View of Ulaangom Highlighting Bag 4 (red) and Bag 9.

Source: Asian Development Bank.

14 Figure 3: Bag 4 of Ulaangom11

(a) Bag 4 showing pilot road (white line) (b) Ger housing redevelopment along pilot road

**Map and schematic provided by project architect Source: Asian Development Bank.

33. Owners of a khasha plot will be able to swap (cede) all or some of their khasha property for an apartment and/or TU. The options for participation with ger housing redevelopment that were determined from focus group discussions (FGD) with khasha owners is summarized as follows and shown in Figure 3b.

(i) No land swap for an apartment but may buy serviced TU (ii) Partial land swap for small apartment including TU (iii) Total swap of khasha land for multi-family apartment and TU. (iv) No decision on participation

34. For all ger redevelopment in Ulaangom and in the other Aimag centers of Ulgii and Jargalent there is not a minimum required level of participation of individual khasha owners. Individual owners can cede entire land for upgraded housing or services, or not participate at all. Also, there is not a minimum requirement of the number of khashas that must participate in the

11 Bag 4 perimeter plot, pilot road ger development provided by project architect

15 ger redevelopment program in the Aimag centers. The level of collective khasha interest determines the scope of redevelopment including infrastructure support. The strict definition of khasha in the Aimag centers is fenced area. Traditionally land plots allocated households by government is defined by the wooden fence, or khasha as exemplified in Figure 4.

Figure 4: Example Khasha in Ulaangom Representative of Other Aimag Centers

Source: Asian Development Bank.

ii. Basic urban infrastructure for Ulaangom

35. The planned urban infrastructure and utility services investments of Tranche 1 in Ulaangom are summarized in Table 5. Figure 5 shows plan views of the infrastructure investments for Ulaangom. Schematic drawings of planned infrastructure will be prepared for the detailed designs of Tranche 1. The scope of infrastructure investment in Ulaangom includes utility services to re-developed ger housing of Bag 4 and optional redeveloped ger housing of Bag 9, and some of the agribusiness investments for Ulaangom. (see below).

16 Table 5: Planned Urban Infrastructure Investments of Tranche 1 In Ulaangom15

Activity Description Type Rehabilitate buildings, pumps, controls and related equipment at two locations, Water Resource and Distribution System Upgrades including chlorination systems; Replace connecting pipeline between sources. Rehabilitate leaking water mails with internal lining. New pipelines with manholes to connect the Bag 4 and Bag 9 rehabilitation areas New Water Pipes to Support Ger Area Rehabilitation to the existing water supply network adjacent to existing roads. Water source well for new Agropark, including submersible pumps, controls and New Well and Pipes to Support the Agropark electrical connection, with a small reservoir and wellhouses, with pipelines to connect the various Agropark facilities. New wastewater treatment facility (WWTP) to be constructed at previously New Wastewater Treatment Plant, collector pipeline, designated location north of the city. Gravity sewer main to connect the existing pump station rehabilitation city collection network with the new WWTP. Existing wastewater pump station will be demobilized. New gravity sewers with manholes to support project facilities and to replace Sewer pipelines to support Ger Area Rehabilitation some existing lines larger new pipes of higher capacity. Lines will be installed and Urban Areas mostly adjacent to existing roads.

Wastewater Plant capable of treating industrial wastewater generated by the Agro- Park to Wastewater Treatment Plant and Pipelines for the standards appropriate for disposal by infiltration, tentatively located 250 m north Agropark of the park. Includes gravity sewers to connect the various Agropark facilities with the new wastewater treatment plant.

State Heating Plant Circulation Pump Upgrades Possible replacement of heating plant circulation pump Heating distribution substations will be installed at previously designated locations. Facilities are of a standards configuration and are necessary to control heat and water distribution to area buildings. Substations will be owned by the New Heating substations and heating lines to support State and operated by the organization responsible for operating the housing ger area upgrading areas. Heating supply and return lines will be installed in 1500mm concrete

channel with potable water line, including valve stations and access manholes. Lines will be installed adjacent to existing roads.

Heating New coal-fired heating plant to serve the Agropark with heat and hot water and New Heating Plant and Heating Lines to support the connecting pipelines to the Agropark facilities with valve stations and manholes. Agropark Plant will meet national and international operations and environmental protections standards ASDIP will introduce heat meters as a means to initiate usage-based heat tariffs Heat Metering in Ulaangom that will serve as a incentive to improve energy conservation and building energy efficiency.

15 From engineering description of Annex 3, Vol II of ASDIP Final Report

Activity Description Type Line and distribution station upgrades (on existing poles) to Western Power Grid to increase capacity and efficiency, which will allow upgrading of aging New feeder from Western Power Grid and Distribution distribution infrastructure Substation Upgrades 10kV from 6kv to allow new installations (including Bag 4 and 9 ger area rehabs) to be served with the current 10kv standard. Includes new switchgear and will be installed within the existing distribution site. Replacement and upgrading of deteriorated overhead distribution lines, with pole replacements as required, and replacement of some aging 6kV/0.4kV Distribution Line and Substation Upgrades

Electrical transformers to 10kV/0.4kV, at existing locations. This program can be continued in Tranche 2-3 Power Lines and Substations to support Ger Area Overhead distribution lines with new poles and transformers for Bag 4 Ger Area Upgrading Rehabilitation area, mostly located within the rehab area. Power Line Upgrade and Substation to support Replacement of old overhead 6kV line and substation to improve reliability and Agropark provide needed capacity for the Agropark facilities

General Aimag Center and Ulaangom-Omnogovi Upgrade fiber optic capacity and improve reliability of data transmission to and Communications Upgrades from the aimag center. New communications tower and new underground optic cable to Omnogovi soum

Upgrades to Support Ger Area Rehab Upgrade capacity and improve reliability of data transmission to and from the Communications soum center and support the Rehab Areas.

Communications Upgrade capacity and improve reliability of data transmission to and from the Upgrades to Support the Agropark Communications soum center and support the Agropark

Upgrade and pave 1.8km of existing road for connection to nearest paved road, Upgraded road to Agropark with drainage and street lighting. Roads Coordinated improvements to the city drainage facilities in accordance with the Drainage improvements for Urban Center Drainage Plan prepared by the ASDIP TA

Construct lined channels and culverts so that drainage water from the rehabilitated area and immediate vicinity can be directed away from adjacent Drainage improvements to Support Ger Area Rehab settlement areas. Does not include drainage facilities within the rehab areas and these designs must be coordinated. Drainage Preparation of a comprehensive drainage plan for the urban areas of Ulaangom TA for Urban Area Drainage Plan that will calculate drainage flows, develop design criteria and identify improvement projects needed to implement the plan and guide local planners

Activity Description Type Following the existing plan made by the Aimag, the existing 5 km flood protection levee will be repaired and strengthened with erosion protection. The levee will be provided with a bike-pedestrian access way that will serve for restricted maintenance access. The existing pond at the northern end of the levee will be Rehabilitate Levee, develop lake and provide overflow improved with embankment protection and a connection with a flow control scheme structure to the planned channel to the Agropark area. A small recreational green park and environmental enhancements will be included. The slopes of levee will be vegetated down and into the shallow nearshore of levee lake to create a small wetland area for wildlife and public interest. An overflow from the lake into existing irrigation channel will be installed to manage flood events. Rehabilitate 2.5 km of existing irrigation channel and construct 2.9 km of new

Flood Protection Flood channel to connect the pond at the northern end of the flood protection levee with the storage pond at the Agropark. The pond will hold 1000 m3 of water and Channel Rehabilitation and Supply to Agropark will be used for irrigation and livestock watering, with separate distribution piping from the potable water system supplied by the well (1.1c). It will be constructed with an impervious HDPE liner and a floating cover to restrict evaporation and extend the time that the pond can be used in cold weather. TA support to first phase program to provide the aimag center with an environmentally sound and sustainable solid waste program: Characterization of existing conditions - Includes physical situation (soils, TA on site assessment, business plan, formalize groundwater, topography) and the environmental.

collection, recycling Initiate formulation of a solid waste management plan at the local level. Recycling plan. T2-3 Investment Program First phase of project works anticipated as follows:

Solid Waste Solid • Identify area to designate for permanent development and consolidation of Initial cleanup, priority actions, fencing and access existing waste and construct a fence with access control and security. control • Priority activities to correct current bad practices. • Initiate site cleanup • Pilot containerized waste collection Source: Asian Development Bank.

Figure 5: Plan Views of Infrastructure Investments of Tranche 1 in Ulaangom

Water And Wastewater

Source: Asian Development Bank.

20 Heating

Source: Asian Development Bank.

21 Electricity And Communications

Source: Asian Development Bank.

22 Flood Protection And Drainage

Source: Asian Development Bank.

23 Location And Cross Section Of Dyke Rehabilitation, And Existing Levee Reservoir

Source: Asian Development Bank.

(i) Additional context for most environmentally sensitive infrastructure from Table 5

(excerpted from engineering description from Vol II of ASDIP Final Report)

Wastewater:

36. The present wastewater treatment plant (WWTP) in Ulaangom is at the site of mechanical plant constructed in 1986 which became non-functional during economic transition in the early

24 1990's, and which today provides little treatment (25-27% BOD16 reduction). The plant is affected by drainage water during summer rainstorms due to open manholes rather than by infiltration in to the piping system. There is one lift station with screening equipment that is in need of repairs and upgrading and a pressure sewer that conveys wastewater to the WWTP. The pressure line terminates at small surge tank with pump that is part of the old mechanical plant site that supplies the settling ponds. All equipment is in poor condition. Construction of the new WWTP will allow the existing facilities to be decommissioned.

37. In addition to a new WTTP, the collection network in the developed area of the city will be upgraded and expanded by replacement of 1.45 km of existing lines with new DN400 pipes. New gravity sewer lines will be required to serve the Ger Area Rehabilitation projects in Bag 4 (DN200) and optional Bag 9 (DN300).

38. The Agropark (see below) will generate wastewater not suitable for treatment by the city system which will be designed for domestic wastewater only, so the agropark will have its own small treatment plant (250 m3/day) on-site that will be specifically designed to treat the Agropark waste, which then can be safely discharged to the environment. A small collection network will connect the Agropark facilities to the new plant.

39. A site for new wastewater plant (Figure 5a) has been identified by the government which is located in an open area northeast of the city. Surface soils at site are dry and sandy with apparent deep groundwater. There is a small stream about 300m from the site that may be used for effluent disposal that drains to Uvs Lake about 22km away. The new WTTP will be designed to meet national and international operations and environmental protection (i.e., treated effluent) standards as Uvs Lake is a national protected area. The design of the plant will be done during detailed design stage of Tranche 1.

Heating:

40. The developed portions of Ulaangom are served by two district heating plants. The original plant, which was privatized after the 1990 economic transition, and was constructed in 1986 and was converted from steam to hot water production in 2003. The plant has a capacity of 39 MW and consumes 12-18 thousand tons of coal per year. The company has maintained and upgraded portions of the piping network with their own resources. The private company operates their plant and portions of the distribution piping network, which is owned by the State. The State- owned heating plant was commissioned in 2014 and provides heat to approximately 1500 families and 340 organizations. 75% of the families and 25% of the organizations are also supplied with hot water.

41. The Ulaangom heating plants operate only in the cold months (1 October to 1 May), so residents and organizations must generate their own hot water when the plants are not running. This is commonly done with electric water heaters. The portion of the heating network served by the State heating plant is 3-10 years old and is in good condition. Heating in the ger areas and places outside the service area of the heating network is typical of all urban ger areas in Mongolia where heating and cooking are by residential stoves that burn coal, wood or dung. Larger structures heat by unregulated, low-pressure heat-only combustion boilers that primarily use coal.

42. The operations of the two heating plants and the distribution networks is generally satisfactory to providing heat to the city and supporting the planned ASDIP improvements without

16 Biological Oxygen Demand reduction is a standard measure of WWTP effectiveness.

25 additional interventions by the project. The State-owned heating plant is in need of upgrades to its circulation pumps, but no other actions are planned at either heating plant.

43. The planned Agropark (see below) is located far enough from the city heat distribution network that a separate small, coal-fired heating plant is the most economical means of providing heat. There will be heat distribution pipes installed in concrete channel that will serve the various Agropark facilities. The separate heating plant will allow an operating schedule that conforms to the needs of the Agropark.

44. The Rehabilitation Areas in Bag 4 and Bag 9 (above) will require the construction of a total of five heat distribution substations (CTPs), which will make domestic hot water for distribution with heating and cold water to the buildings in its service area. The locations for substations in both areas have been previously identified in the Ulaangom Master Plan, which will simplify the connection piping design and operations. Pipelines to convey heat and cold water will be constructed to serve the new CTPs. These pipes will be installed together in concrete channels buried adjacent to existing streets in accordance with Mongolian construction standards.

Solid Waste: 45. Solid waste collection and disposal has only been loosely regulated in the aimag centers such as Ulaangom, and large areas of land have been impacted by indiscriminate dumping and uncontained windblown trash. Governments have only recently begun to plan for improvements to collection and containment, but there has been little funding available and there are large challenges to overcome to change the situation.

46. The large impacted area in Ulaangom is now close to developed areas. Uncontrolled, random dumping of waste from commercial enterprises in addition to household waste present significant risks to public health and the environment. Fencing and access control have been initiated in some locations but there has been no funding available for the equipment and operations costs to manage disposal, mitigate impacts and to do anything to clean and reduce affected land areas.

47. The Ulaangom solid waste dumpsite is located approximately 2.5 km to the southeast of the city and due to largely unregulated operations has expanded to an area of 74 hectares. The city has constructed some fencing and an access control gate and guardhouse but these are fairly recent. A large portion of the impacted area is windblown trash and there is no provision or equipment available to cover or consolidate the waste. The city does not presently have a formal solid waste collection and transport system that fully covers all areas, and waste from commercial and industrial waste generators is handled by the respective organizations.

48. Ash from the heating plants is disposed separately from the city dumpsite, but ash from small stoves and boilers makes up a large portion if the waste at the city site. The dumpsite is situated on a hill about 1 km from a river the flows into Uvs Lake, 27 km distant. There is no evidence that there is near-surface groundwater at the dumpsite, but there are no measures in place to prevent runoff from the site from entering the river. The operators of the dumpsite have begun to separate waste with potential recycling value, such as glass and metals, but there is no program or plan for implementing a recycling program.

49. The existing situation with solid waste collection and disposal in Ulaangom and the need to meet current environmental standards and practices is too large a problem to be quickly solved.

26 ASDIP Tranche 1 will be the first phase of a program to provide Ulaangom with an environmentally sound and sustainable solid waste management system and clean up/ remediate the results of past uncontrolled solid waste disposal practice. The activities will be a mix of technical assistance and works projects:

(i) Characterization of existing conditions - Includes type of waste, physical situation (soils, groundwater, topography) and the environmental hazards that need to be remediated and mitigated, based on the existing waste and projected future use of the sites. This will result in recommendations for design of cleanup programs and site improvements. Includes drilling, groundwater sampling and testing. (ii) Initiate formulation of a solid waste manage plan at the local level that includes collection, disposal and cost recovery mechanism(s) and capacity development needs, as well as implementation of a phased cleanup and restoration plan. (iii) Construct a fence with access control and security around areas designated for permanent development and consolidation of existing waste (15 ha). (iv) Initiate priority activities to correct current bad practices that are public health risks, such as groundwater contamination. (v) Research and formulate opportunities for recycling with associated costs and benefits, coordinated with Aimag and regional programs. (vi) Develop a capital investment program for new facilities and equipment that can be done in T2-3 and with State funding. (vii) Initiate cleanup of existing dump sites. (viii) Pilot containerized solid waste collection in urban core and ger rehabilitation areas with five trucks and 50 bins or skips.

50. The results of the Tranche 1 programs will be the basis for scoping Tranche 2 activities that will include facility construction and equipment.

51. The potential for recycling programming has yet to be explored at Ulaangom and other Aimags. The markets for recycled materials are not defined, so it is not yet possible to ascertain if there will be sufficient cost recovery to justify investments. Recycled materials from Ulaanbaatar are shipped to China for processing, but the logistics for this in the western Aimags is far different and local or regional processing of recyclables may be more feasible than export.

27 b. Umnugovi soum

52. The infrastructure investments in Umnugovi are similar but smaller in scale than planned investments in Ulaangom. The investments do not include a ger area redevelopment plan. Instead public buildings and amenities will be improved. Similar to Ulaangom improvements to infrastructure will also service some of the agribusiness facilities that will be developed in Umnugovi (see below).

i. Public Buildings and Amenities

53. Urban infrastructure and services of Tranche 1 include improvements to sanitation housing, and public buildings which are described below and outlined in Figure 6. Sanitation: 54. Indoor toilets are inadequate or are lacking in most public buildings such as schools- kindergartens, dormitories, and hospitals. The ASDIP will finance rehabilitation or construction of new sanitary units which will replace the existing dominant pit latrines which are often located at uncomfortable distances away from buildings. Dormitories: 55. One of the biggest handicaps for education in the rural areas is the lack of beds for children at school. The ASDIP will construct required student dormitories. Multi-purpose buildings: 56. These buildings are required to support activities that are lacking such as such as libraries or recreation for students on school property. The project will rehabilitate or construct new buildings to enable various multi-purpose functions. Sport: 57. The ASDIP will construction simple sport complexes for the community. The complexes will serve playground needs of young children as well as more organized sport for young adults. Staff housing units: 58. In order to attract and keep outside staff (e.g., teachers, medical professionals) whether permanent or seasonal staff, housing accommodation is required. The project will construct simple housing apartment units for this purpose. All buildings will be equipped with an additional supply of electricity through the implementation of PV solar panels with batteries as power storage.

28 Figure 6: Planned Improvements to Public Buildings And Sanitation In Umnugovi Soum

Source: Asian Development Bank.

ii. Basic infrastructure improvements in Umnugovi soum

59. The planned improvements to basic infrastructure in Umnugovi soum is summarized in Table 6. Aerial plan views of the infrastructure are provided in Figure 7.

29 Table 6: Planned Urban Infrastructure Investments of Tranche 1 in Umnugovi Soum17

Activity Description Type Water source wells (2) for the soum center developed area to be located in the New Water Source with reservoir and pipelines vicinity of the developed area, including submersible pump, controls and

electrical connection, with a small reservoir and wellhouse Underground pipelines with manholes to connect the various major buildings in Water distribution network for soum center soum center. Water 2 water source wells for new Agropark to be located with in the designated New Well and Pipes to Support the Agropark Agropark area and underground pipelines to connect the various Agropark facilities with the new water. Plant capable of treating domestic wastewater generated by the schools and public buildings, to standards appropriate for surface disposal, tentatively located New Wastewater Treatment Plant, Collection Network north of the schools. Buried gravity sewers will connect the schools and other public facilities with the new wastewater treatment plant. New tanker trucks will be provided configured for cold climate operations equipped with a vacuum pump and hoses that can extract sewage and sludge Vacuum truck for septic system service from holding tanks, cesspits and septic tanks as required for maintenance and transport the waste to a designated location for treatment and/or disposal. New

Wastewater trucks will not replace existing trucks Plant capable of treating industrial wastewater generated by the Agropark to standards appropriate for surface disposal, tentatively located adjacent to the Wastewater Pre-treatment for Agropark Agropark. Buried gravity sewers to connect the various Agropark facilities with the new wastewater treatment plant.

New coal-fired heating plant to serve the Agropark with heat and hot water and connecting pipelines to the Agropark facilities with valve stations and manholes. New Heating Plant with Lines to support Agropark Plant design will incorporate national and international operation and Heating

environmental protection standards. . Power line cable and pole replacement for main supply to the soum center with General Electrical Distribution Upgrades (includes substation equipment upgrading, and replacement of overhead cables and new water source) transformers to increase the capacity and reliability of power distribution within the soum center.

Electricity New overhead power distribution lines and transformers to serve Agropark Supply Line and Substation for the Agropark facilities.

Upgrades to Support Soum Center and Agropark New Optical cable with 500 user MSAN station to support Deluun soum and Communications Agropark (Communications) Commun ications

17 Modified from engineering designs of Annex 3, Vol II, of ASDIP Final Report

30 Activity Description Type

26.4 km, two lane asphalt with guard rail sections and some drainage New Road - Umnugobi soum to Ulgii soum

Roads New Road - Tarialan soum to Paved Network 9.0 km, two lane asphalt with guard rail sections and some drainage

First phase of project works anticipated as follows: • Identify area to designate for permanent development and consolidation of Initial cleanup, priority actions, fencing and access existing waste and construct a fence with access control and security. control • Priority activities to correct current bad practices. • Initiate site cleanup Solid Waste Solid • Pilot containerized waste collection Source: Asian Development Bank.

31 Figure 7: Plan Views of Infrastructure Investments of Tranche 1 in Umnugovi Soum

Water and Wastewater

Source: Asian Development Bank.

32 Electricity

Source: Asian Development Bank.

33 Communications

Source: Asian Development Bank.

34 Dumpsite

Source: Asian Development Bank.

(i) Additional context for most environmentally sensitive infrastructure from Table 6

(excerpted from engineering description from Vol II of ASDIP Final Report)

Wastewater: 60. There is no formal wastewater collection, treatment or disposal system in Umnugovi soum center. All public buildings and housing areas use pit latrines exclusively. In conjunction with upgraded water supply system will be a wastewater collection network that will connect to a small (100 m3/day) wastewater treatment plant capable of treating domestic wastewater generated by

35 the schools and public buildings to standards appropriate for surface disposal, tentatively located north of the schools.

61. The Agropark (see below) will generate wastewater unsuitable for treatment by the soum center system, which will be designed for domestic wastewater only, so the park will have its own small treatment plant (50 m3/day) on-site that will be specifically designed to pre-treat Agropark waste so it can be safely discharged into the main soum center WWTP. A small collection network will connect the Agropark facilities to the new agropark plant.

62. Umnugovi will also be supplied with a 5m3 sewage tanker truck equipped with a vacuum pump for servicing holding and septic tanks, and other on-site sanitation systems. Provisions for receiving, treating and correctly disposing of waste collected by the truck will be included in the WWTP design and plan for overall wastewater treatment and disposal for the soum center.

Heating: 63. There is one privately owned, coal fired heating plant in Umnugovi with a piped distribution network that that serves most of the public buildings and operates during the winter heating season. Smaller public buildings and residences heat by individual stoves that burn coal, wood, or dung. There are no planned ASDIP Tranches to be associated with the privately owned and operated heating system in the soum center. The Agropark is located far enough from the soum center heat distribution network that a new, separate small coal-fired heating plant is the most economical means of providing heat and hot water. There will be heat distribution pipes installed in concrete channel that will serve the various Agropark facilities.

Solid Waste Collection and Disposal: 64. The existing situation with solid waste collection and disposal in Umnugovi is similar to that in Ulaangom, although on a smaller scale, and the need to meet current environmental standards and practices is too large a problem to be quickly solved. The Umnugovi solid waste dumpsite is located approximately 1.5 km to the south of the soum center and due to largely unregulated operations has expanded to an area of approximately 50 hectares. The dumpsite is located in a flat area and there is no surface water near the site. Groundwater is believed to be at a depth of 8-10 meters and at the time the site was visited a company doing road and bridge construction had excavated two deep pits to mine gravel that were planned to be used for depositing waste There is no fencing or access control and a large portion of the impacted area is windblown trash. There is no provision or equipment available to cover or consolidate the waste.

65. The soum center does not have a formal solid waste collection and transport system, and residents are responsible for their waste disposal. A large proportion of the waste is stove ash, but there is also waste from livestock slaughtering openly dumped with the household waste.

66. Tranche 1 of ASDIP will be the first phase of a program to provide an environmentally sound and sustainable solid waste management system and clean up/ remediate the results of past uncontrolled solid waste disposal practice. The activities will be a mix of technical assistance projects as follows: (i) Characterization of existing conditions - includes type of waste, physical situation (soils, groundwater, topography) and the environmental hazards that need to be remediated and mitigated, based on the existing waste and projected future use of the sites. This will result in recommendations for design of cleanup programs and site improvements. Includes drilling, groundwater sampling and testing.

36 (ii) Initiate formulation of a solid waste manage plan at the local level that includes collection, disposal and cost recovery mechanism(s) and capacity development needs, as well as implementation of a phased cleanup and restoration plan. (iii) Construct a fence with access control and security around areas designated for permanent development and consolidation of existing waste (5 ha). (iv) Initiate priority activities to correct current bad practices that are public health risks, such as groundwater contamination. (v) Research and formulate opportunities for recycling with associated costs and benefits, coordinated with Aimag and regional programs. (vi) Develop a capital investment program for new facilities and equipment that can be done in T2-3 and with State funding. (vii) Initiate cleanup of existing dump sites. (viii) Pilot containerized solid waste collection for the larger buildings with one truck and 5 bins or skips.

2. Agribusiness investments at Ulaangom and Umnugovi and Tarialan soums

67. Tranche 1 of ASDIP will develop the following three types of agribusiness investments Ulaangom and in the soum centers of Umnugovi and Tarialan (only irrigation scheme).

(i) Community-based projects for Pasture User Groups (ii) Agroparks (iii) Irrigation schemes and fodder farms

a. Community-based projects for Pasture User Groups (PUG)

68. Community micro-projects for herders will be financed by the project to increase animal productivity. Herders must be a member of local PUG to access support. Members of PUGs will contribute through the provision of in-kind labor, cash and/or materials. The locations of the projects have not been determined.

69. The indicative types of community micro-projects to be financed are listed below. (i) Hay protected areas: a 15ha pastureland perimeter near a river will be selected and enclosed with stonewalls. Water canal diversions likely established for irrigation by gravity. (ii) Small equipment and trucks: mini-tractors equipped with agricultural machinery and tools to support pasture management will be provided. (iii) Storage for hay and fodder (shelters). (iv) Animal combing and shaving facility and equipment with storages and disinfecting bath. (v) Winter wind shelters for animals. (vi) Water wells: Construction of 6 new wells and rehabilitation or fixing of 4 old wells will be performed. (vii) Animal bathing facilities. (viii) Animal drinking water facilities. (ix) Small bridge/river/stream crossing and earth road repair.

37 b. Agroparks

70. The Agroparks in Ulaangom and Umnugovi soum will consist of Disease Free Establishments, meat processing facilities, laboratory and veterinary services, a Research Development Center, business incubator centers, and agricultural processing industries. The Agroparks will be located just north of Ulaangom (Figure 8) and just southeast of Umnugovi soum (Figure 9). The Agroparks will be utility-serviced in part by the urban infrastructure planned for the urban centers defined above.

i. Disease Free Establishments

71. The Disease Free Establishments in the Agroparks will include the following sub- components: (i) Inspection laboratory and animal inspection zone. (ii) Animal feedlot – disease free zone with quarantine activity for disease controlling.

72. The Disease Free Establishment will be located to enable easy reach by livestock herds. The irrigation perimeter and fodder farms (see below) will produce fodder that is necessary for the Disease Free Establishment to function.

Figure 8: Location of Agropark Just North of Ulaangom

** Map provided by agricultural team. Source: Asian Development Bank.

Figure 9: Location of Agropark at Umnugovi Soum

** Map provided from project agricultural team. Source: Asian Development Bank.

73. The Animal Feedlot of the Disease Free Establishment in Ulaangom will have a capacity of 1,000 animals that can be kept isolated for two to three weeks in case of animal disease outbreaks or for export requirements. On average the required area for small and big animals is 10 m2/animal. The required total area for the disease-free zone and feedlot is 1ha. To be added is a 0.5ha animal inspection unit with offices and laboratories, a 0.5ha animal shelter, a 0.5ha hay and fodder shelter area, a 0.5ha abattoir zone, and a 0.5ha agricultural machinery parking lot.

39 74. The facility will include enough hay and fodder storage in order to feed the 1000 head of livestock during a 2-3 week isolation period without grazing. Table 7 estimates hay/fodder storage requirements of 2,592 tons which considers the single harvest for hay at the end of the summer.

Table 7. Hay and fodder storage requirements

Daily Number Number Number of Total (kg of nutrition, kg of of days cycles in a hay/fodder) animals year Small 1.5 800 18 12 259,200 animals Big animals 7 200 18 12 302,400 Total 561,600 ** Table provided by agricultural team

75. The animal feedlot of the Disease Free Establishment will include the following features:

. 1.5m stone perimeter to delimit the isolated 1ha feedlot and protection zone. . Shelter for the animals from the wind and snow with total area of about 5,000 m2. . Elevated hay storage (to prevent overconsumption) for a total capacity of 500 tons. . Livestock food containers to feed the animals. . Drinking water for the animals and water supply connection. . 2km road connection to the nearby paved road. . Agriculture machinery and equipment park area. . Veterinary inspection center with offices and laboratories.

76. The animal feedlot in Umnugovi soum will be half the capacity of the feedlot in Ulaangom. Similarly, the Disease Free Establishment will be integrated within the Agropark at Umnugovi soum. Capacity of the disease-free zone and feedlot is 500 animals and an area of 0.5 ha.

77. The Disease Free Establishment of Ulaangom will include an inspection laboratory and animal inspection zone that will form part of the main laboratory for veterinary services and disease and quality control. The main laboratory will be integrated within the Agropark. Since 2018, the Veterinary Agency became separated from the Ministry of Food, Agriculture and Light Industry (MOFALI) and therefore need new offices. The offices and the laboratory will be combined in the same building in the Agropark.

78. The laboratory in Umnugovi soum will also be integrated within the Disease Free Establishment at the Agropark at the edge of the soum center. The Disease Free Establishment will also include veterinary offices.

79. It is necessary to provide a building and properly designed laboratories, equipment, and laboratory consumables for the operation of Veterinary Agencies at Ulaangom and Umnugovi soum relative to the animal disease prevention, traceability, clinical services, and activities in the disease-free zone. The main features of the laboratories including equipment are exemplified in Table 8.

40 Table 8: Example Equipment and Consumables Required for Laboratory Support18.

Amount needed Items Purpose Ulaangom Umnugovi

Equipment 1 Thermostat Drying samples and glasses 2 pc 1 pc 2 Sterilization for tools and Autoclave 2 pc 1 pc glasses Determining toxic substances 3 LC tandem MS in meat and food such as 1 pc - antibiotics, pesticides, toxins Determining fat, moisture, 4 NIR spectroscopy carbohydrates and sugar in 1 pc 1 pc milk and other substances For extraction of 5 Centrifuges sedimentation from various 2 pc 2 pc biological samples Determining acidity condition 6 pH-Meter 2 pc 2 pc of samples 7 Microscopes Analytical purpose 2 pc 2 pc Car equipped for 8 veterinary For mobile laboratory activity 1 pc 1 pc services For keeping animals during 9 Mobile fence 7 pc 7 pc the veterinary activity For animal wash and 10 Disinfecting bath 7 pc 7 pc disinfecting purpose 11 Laminar hood For aseptic isolation activity 1 pc - Consumables For blood and other biological 1 Sample label 40,000 pc 40,000 pc samples Container for 2 For carrying samples 40 pc 40 pc labels 3 Biological tubes For blood sample 40,000 pc 40,000 pc For syringe for blood 4 Aseptic needle 40,000 pc 40,000 pc withdraw 5 Needle stand For blood sampling 400 pc 400 pc 6 Gloves For aseptic purpose 500 box 500 box Laboratory safety For aseptic and disinfecting 7 1000 pc 1000 pc clothes activity Lab kits for fast 8 For field test 40 pc 40 pc testing of rabies Lab kits for fast 9 For field test 40 pc 40 pc testing of cow-pox For training and capacity building activity For data processing in the 1 Laptops 1 pc 1 pc field For data processing in the 2 Desktops 1 pc 1 pc office

18 Table provided by project agricultural team

41 Amount needed Items Purpose Ulaangom Umnugovi 3 OH projector For data presentation 1 pc 1 pc 4 Microphone For data presentation 1 pc 1 pc 5 Color printer For data sharing 1 pc 1 pc 6 White screen For data sharing 1 pc 1 pc

(i) Water needs

80. The water requirements of the Disease Free Establishment in Ulaangom are estimated at drinking water: 2.6 m3/day, and process water: 50 m3/day

ii. Meat processing facilities

81. There are three functional meat processing facilities in Ulaangom center and two under construction. The existing meat processing facilities have similar capacities of about 600 animals per day, but none are functioning at full capacity. The project will provide financing support to the private sector to build a new meat processing facility close to the Disease Free Establishment on the Agropark site. The capacity of the meat processing facility will be 150 big animals and 600 small animals per day and will function 8 months a year.

(i) Water Needs

82. The water requirements of the meat processing facility in Ulaangom are estimated as: drinking water: 105 m3/day and a total of 210 m3/day with meat processing.

83. There isn’t a proper meat processing facility in Umnugovi. Animals are simply killed outside by hand. The project will build a simple meat processing facility respecting international environment standards and equipped with storage facilities and sorting rooms. The capacity of the meat processing facility will be 150 animals per day in a combined line (small and big animals) which will function 8 months a year. The meat processing facility will be located close to the Disease Free Establishment within the Agropark.

(ii) Water Needs

84. The water requirements of the meat processing facility in Umnugovi are estimated as: 30 m3/day without meat processing (60 m3/day with meat processing).

(iii) International standards for meat processing and production for Tranche 1

85. The design of the meat processing and storage facilities for Ulaangom, Umnugovi soum, and for the other Aimag and soum centers will follow FAO (1988) and WHO (1984) standards for operations and environmental protection along with the international standards as summarized below. All meat processing facilities of Tranche 1 will incorporate and follow key international standards in order to produce a quality of meat that can be marketed to international markets. There are four primary standards that will be applied to meat processing developed by ASDIP which are: (i) CAC/RCP 58-2005; (ii) ISO/FSSC 22000; (iii) HACCP system; and (iv) HALAL certification for Islamic countries such as Islamic Republic of Iran, and Kazakhstan.

While each country market has their own regulations and standards on food quality and safety to comply in domestic supply chains of food products, international bodies, such as the CAC (Codex Alimentarius Commission), the ISO (International Organization for Standardization), and the OIC (Organization of the Islamic Conference), regulate and ensure the quality and safety of food production, distribution, and export in worldwide. The scope of each of the four standards from above s briefly summarized below.

CAC/RCP 58-2005

The CAC or the Codex Alimentarius Commission was established by the Food and Agriculture Organization of the United Nations (FAO) and the World Health Organization (WHO), and is recognized by the World Trade Organization as an international reference point for the resolution of disputes concerning food safety and consumer protection. The CAC works on internationally recognized standards, codes of practice, guidelines, and other recommendations relating to foods, food production, and food safety.

The CAC/RCP 58-2005 or “Code of Hygienic Practice for Meat” is the main regulation which to be complied by the abattoirs, slaughterhouses. The scope of this code covers hygiene provisions for raw meat, meat preparations and manufactured meat from the time of live animal production up to the point of retail sale. The CAC/RCP 58-2005 is translated and adopted as Mongolian as “MNS CAC RCP 58:2013” (Махны эрүүл ахуйн дадлын дүрэм). The primary elements of the CAC/RCP 58-2005 for meat processing facilities are as follows:

• Primary production: • Personal hygiene: • Presentation of animals for slaughter: • Transportation • Establishments: design, facilities, and • Product information and consumer equipment awareness • Process control: • Training • Establishments: maintenance and sanitation

ISO/FSSC 22000

The ISO 22000:2018 or “Food safety management systems” consists the requirements for a food safety management system in any organization in the food chain. It defines what an organization must do to demonstrate its ability to control food safety hazards and ensure that food is safe for consumption. ISO 22000 is based on the CAC/RCP principles for food hygiene and this enables authorities to refer to ISO 22000 in national requirements and government inspections to ensure that all the criteria for food safety are met.

The FSSC 22000 or “Food Safety System Certification (FSSC)” is a certification scheme system was designed to provide companies in the food industry with an ISO-based food safety management system certification that is recognized by the Global Food Safety Initiative (GFSI). The FSSC 22000 system uses a management systems approach to food safety, using ISO 22000 for the management system requirements and ISO Technical Standards (for prerequisite program requirements). In accordance with ISO/FSSC 22000, meat processing facilities must to consider the requirements on following elements of meat processing and production: . Management responsibility: . Resource management: . Planning and realization of safe products . Validation, verification and improvement of the food safety management system:

43 HACCP system

The HACCP is a scientifically based control system to be implemented at all stages of food production, storage and marketing from ingredient preparation to delivery of end products relying on control of factors exerting adverse impacts on food safety, identification of potential hazards and prevention measures rather than testing of end products. The HACCP consists seven principles and 12 steps. HACCP concept that a system of controlling and inspecting ready end products is not capable of certification of food safety resulted in its development to be worldwide standard. In accordance with HACCP system, meat processing facilities must to consider the requirements on following key process and operations elements:

• Prerequisite Requirements: • Hazard Responsibilities • Scope of HACCP Plan • Confirmed Food Safety Objectives (FSOs) • Product Description and Intended Use • Critical Control Point (CCP) Determination • Setting Initial Food Safety Objectives • Establishing Critical Limits Process • Constructing a Process Flow Diagram • Monitoring CCPs • Job Descriptions • Setting Corrective Actions • Raw Material Hazard Identification • Verification of the HACCP Plan • Process Step Hazard Identification • Documentation and Record keeping

HALAL certification

In order to export meat and meat products to Muslim countries such as Islamic Republic of Iran, Republic of Iraq, Saudi Arabia, the United Arab Emirates, Malaysia, Indonesia, some provinces of China, Azerbaijan, and Kazakhstan, animals must be slaughtered in HALAL way in accordance with the provisions of Islamic Sharia. In accordance with CAC/GL 24-1997 or “General guidelines for use of the term ‘Halal’”, and GS 993/1998 or “Animal slaughtering requirements according to Islamic Law”, all lawful land animals should be slaughtered in compliance with the rules laid down in the CAC/RCP 58-2005 and the following requirements: (i) The person should be a Muslim who is mentally sound and knowledgeable of the Islamic slaughtering procedures. (ii) The animal to be slaughtered should be lawful according to Islamic law. (iii) The animal to be slaughtered should be alive or deemed to be alive at the time of slaughtering. (iv) The phrase “Bismillah” (In the Name of Allah) should be invoked immediately before the slaughter of each animal. (v) The slaughtering device should be sharp and should not be lifted off the animal during the slaughter act. (vi) The slaughter act should sever the trachea, esophagus and main arteries and veins of the neck region:

44 iii. Processing industries, storage, and business incubation

86. The Agroparks will support development of small agro-process industries and business promotion. It is envisioned that the Agropark will host a non-exhaustive list of business and agro- process opportunities that will be dictated by and support local Agribusiness Development Planning. Example processing facilities are dairy products, greenhouses, vegetable processing, leather finishing (not tanneries), and wool processing.

(i) Water requirements

87. The estimated water requirements of planned processing industries of Agroparks are summarized in Table 9.

Table 9: Estimated process industry water requirements of Agroparks

Wool factory Leather finishing Dairy farm Greenhouse farm Vegetable processing factory process water: 1.0 process water: 0.1 potable water: process water: 1.0 1.0 m3/ton of product m3/ton product, m3/u, potable water: 1.5m3 / m3 of milk litre/m2, potable potable water: 100 litre/day water: 100 litre/day 1000 litre/day

iv. Environmental Management System for Agroparks

88. The government will need to develop an Environmental Management System (EMS) for the Agroparks in Ulaangom and Umnugovi that will be managed by the Aimag and soum governing authorities. The EMS will consist of a set of procedures and guidelines to ensure the protection of local environment and natural resources. The PISC will assist with the development of the EMS during the detailed design phase of Tranche 1. The requirement for an EMS for the Agropark will form part of the project loan covenants.

c. Irrigation perimeters and fodder farms

i. Ulaangom – Tarialan soum

89. An existing irrigation system to support a 500ha fodder farm will be rehabilitated in Tarialan soum southeast of Ulaangom (Figure 10) The site was a previous irrigation perimeter during the Soviet era. Due to land availability, proximity of an existing paved road and electricity supply, and closeness to Ulaangom, the 500-ha site was selected in the Teeliin Gol river basin, Khukh-Ukhert, of Tarialan soum. The system will divert water from the Teelingol (Teel) river into a head structure which will feed water by gravity along a 7.5 km main canal to the irrigated area. The irrigation system will be implemented in two phases:

(i) The head structure and main irrigation canal will be rehabilitated with upgraded equipment (i.e., sluice gates etc). (ii) A Water Resources Management Plan will be prepared. (iii) Financing support (concessional loans) will be provided to the private sector (cooperative or private company) to develop a water irrigation scheme on the identified 500 ha.

Figure 10: Irrigated fodder farm in Tarialan soum southeast of Ulaangom

Source: Project agricultural team.

Site characteristics:

90. Chemical and physical parameters of the soil of irrigated perimeter have been determined. The soil salinity is low (0.04%) which indicates the soil is suitable for crop farming with appropriate cultivation technologies. The low level of the three primary nutrients, nitrogen, phosphorus and potassium (N - undetected) in the soil indicates the need for appropriate application inorganic fertilizers as well as cultivation of leguminous plants, such as alfalfa in a crop rotation regimen.

91. The soil is classified as sandy brown – dry land pasture soil comprised 45.5% (±3.7%) of 0.25-0.05 mm of particles; 11.8±1mg/kg of phosphate (P) levels; and 15-20 cm of humus. The

46 soil is alkaline with pH of 8.14). The low level of humus composition (0.92%) strongly indicates a need of organic fertilizers such as composts made of animal manure. The proximate mineral compositions are as follows: calcium (Ca) = 13.4±1.5 meq/100g), magnesium (Mg) = 7±0.9 meg/100g), and potassium (K) = 39.4±2.8 mg/100g). The Ca/Mg ratio of 2 suggests the soil fertility needs to be improved with inorganic calcium (gypsum or lime) and with potassium-based fertilizers.

Planned development:

92. Irrigation water will be delivered by gravity from a head structure that diverts water from the Teelingol river. Water will flow in open and closed concrete canals with water gates, and irrigation machinery. The irrigation system will include the following sub-components which will be owned and managed by the soum government:

(i) Head structure and main concrete closed and open canals (ii) Water use management plan in the Tarialan river basin area (iii) 5 pawed irrigation machines. (iv) 2 tractors equipped with agricultural machineries for soil and crop cultivation activities. (v) One silage preparation unit with a capacity of 1,000 tons. (vi) One fodder and silage storage house. (vii) One fence with garages for agricultural machinery parking. (viii) Financing support for 500 ha irrigation scheme and Irrigation machineries

Proposed Crops:

93. The purpose of this irrigation system and fodder farm is to supply the Disease Free Establishment and the herders with food for animals. The irrigated perimeter will produce a combination of cereal and leguminous crops to be used for fodders such as oat, barley, wheat, corn, beans/peas, and alfalfa, and these crops will be mixed together to produce fodder.

94. The proposed crop plants will be cultivated in a five-year rotation scheme based on cultivation schedule of the perennial crop alfalfa for 5 years as a purpose of enhancement of soil organic matters. Potato plant will also be introduced in the crop rotation scheme for weed suppression and soil loosening purpose. According to the five-year rotation plan, the field will be divided into 5 sections as described Table 10. The first plant in the 5-year rotation is alfalfa followed by corn. After corn, wheat and barley will be introduced to the rotation. Potato will be entered to the field at the penultimate order. The last plant in the rotation are oats. It is estimated that the area needed for the irrigation perimeter is 500ha. Expected yields for silage are 3,100 tons and for dry grain are 200 tons.

47 Table 10: Plant Rotation and Production For Feedlot

Crop plants Purpose Field, (ha) Yield, Total yield, (ton/ha) (ton) Alfalfa silage 100 2 200 Corn silage 100 25 2500 Wheat and dry grain 50 2 100 Barley silage 50 4 200 Potato crop rotation 100 - - Oat dry grain 50 2 100 silage 50 4 200 Total - 500 - 3300 Source: Project Agricultural Team.

(i) Water requirements

95. The estimated water requirements to irrigate the 500ha irrigated fodder farm in Tarialan soum are at 0.315 m3/sec. The water requirements and sustainable, seasonal water availability from the Teel river will be examined and finalized at detailed design phase.

ii. Environmental protection of all irrigation perimeters of Tranche 1

96. All irrigated perimeters (schemes) of ASDIP will include design structures to mitigate contamination of running and ground waters by agri-inputs which will be regularly monitored (see EMPs). As part of the Environmental Management Systems (EMS) that the government will be required to develop and implement for the Agroparks, all concessional loans to private sectors as part of the FIL component of ASDIP will be conditional on strict compliance with agro- environmental safeguards dictated by the EMSs. Comprehensive, in-depth training on agro- ecology is included as part of the agribusiness component in support of the EMS formulation and implementation. are included in ASDIP capacity building component (incl. theoretical and on-the- site follow-up). Specific environmental protection is summarized as follows:

(i) Soil protection and conservation (a) Protective banks, peripheral embankments and drains will be constructed to protect both irrigated perimeters and surrounding area from floods and prevent soil erosion. (b) Productive windbreaks area (25 meters width min.) surrounding the perimeter will (i) primarily protect the irrigated perimeter and surrounding area from wind erosion; (ii) act as drained-water filter and absorb excess nutrients and other agri-inputs; (iii) act as a pool of life and biological diversity, hence increasing biological control of pests and diseases. Windbreaks will be composed of high, medium and small size species, including fruit trees and shrubs that will be harvested by local herders’ households and rural communities. (c) Productive windbreaks hedges will be set-up inside the irrigated perimeters and inserted between cultivated strips. Ratio of windbreak hedges over cultivated are will be at least 1ha/ 100 ha. (d) Cropping technical itineraries will be elaborated on a 5 years minimum rotation scheme, including roots vegetable for biological soil loosening and

48 decompaction. Rotation schemes will be strengthened, elaborating largest collaboration scheme with other crop producers and mutually benefiting to each. (e) Crops residues, such as straw, cobs and brans will be used as mulching materials to protect soils from heavy rains and wind erosion, and will contribute (i) to organic matter enrichment and; (ii) improved water management thanks to mitigation of evapotranspiration. (f) Access to conditional loans will be favorized for entities relying on low impact mechanical soil preparation and cultivation practices such as surface tillage, shallow stubble ploughing or tillage across the slope.

(ii) Water use efficiency and mitigation of water contamination

(a) All irrigation canals (primary and secondary – bottom and slopes) will be lined with waterproofing membranes (i.e. geotextiles) to prevent water losses by infiltration and leaks. (b) Water efficient irrigation techniques will be favored. Not only the irrigation technology will be considered for assessment but the entire set of cultivation practices impacting water usage and mitigation of evapotranspiration. (c) In case of drought only complemental irrigation will be authorized, ensuring crop survival and avoiding to dry out rivers’ flows. Decision for such measure will be taken by River Basin Administrations and Councils, themselves informed by NAMEM on meteorology, hydrology, hydrogeology, water quality and environmental conditions of shared watercourses. (d) Windbreaks hedges surrounding and within the irrigated perimeters will be watered by drip irrigation systems. (e) Excess irrigation water will not be driven back to rivers or aquifers but channelized through a network of vegetated ditches to absorbing beds constructed downstream the perimeters (i) collecting and containing excess runoff from irrigated perimeters (i) acting as filters absorbing excess of nutrients and other agro-inputs (phytopurification); (ii) facilitating water percolation and evaporation; (iii) stabilizing soils.; (iv) offering biodiversity support. (f) A surface and groundwater monitoring and evaluation system will be implemented by NAMEM to ensure that cropping practices are not contaminating running and ground waters. Every year, samples of water will be collected downstream the irrigated perimeter (exit of vegetated strips, in the river downstream, and in aquifer downstream) and compared to samples collected upstream. All data will be compared to the ones collected during previous years in order to assess long-term water quality evolution and potential cumulative contamination. A first data collection and analysis will be performed in Year 1, before setting-up of the irrigated perimeter, and will be used as a baseline.

49 (iii) Weeds, pests and diseases control and management

(a) Access to concessional loans will be favorized for entities relying on organic production practices. Whereas Government of Mongolia is subsidizing herbicides and pesticides for fodder production countrywide it is commonly accepted that Western region of Mongolia is (i) less sensitive to pests and diseases because of altitude and specific climate; (ii) hosting unique ecosystems, hydrologic systems and related wildlife populations, which are extremely sensitive to chemical agri-inputs (particularly aquatic fauna and flora). Organic weed, pest and disease control, management and practices will be thus disseminated under the ASDIP capacity building component, with specific emphasis on prophylactic practices. (b) Adapted seeds (cold on drought resistant) will be compulsory. Hardy varieties cultivated under similar climates (i.e. Russia, China) will be favorized, especially Mongolian ones. (c) Crops rotation (minimum 5 years) and crops association plans will be compulsory to favorize biological control agents and limit large scale contamination. Monoculture will not be tolerated. (d) Biological or chemical inputs (i.e. Mycete based solutions developed by MULS for fungus diseases on grain fodder crops; Bordeaux mixture), for both preventive and curative measures, will be accepted only if listed in Mongolian Law of Organic Agriculture, and are respecting the dosages stated in the related standards. Residual chemical molecules will be filtered by vegetated strips established downstream the irrigated perimeter. (e) Weeds will primarily be controlled by mechanical solutions such as false seed bed and mechanical wedding.

(iv) Fertilizer use

(a) Fertilization inputs, application and management will strictly comply with (i) the International Organization for Standardization set of criteria for fertilizers, soil conditioners and beneficial substances19; (ii) the International Code of Conduct for the Sustainable Use and Management of Fertilizers (FAO, 2019); (iii) the Mongolian agri-inputs’ market regulation procedures and related Laws on Standardization and Accreditation (2003); on Food (2013), on Food Safety (2013), and on Organic Food (2016). (b) Sound soil analysis will be performed in every year to accurately inform soil composition and characteristics, identify fertilization needs according to the specie cultivated, and avoid overuse of fertilizer. (c) Considering that compost production by valuing effluents from Disease- Free Establishment and meat processing facilities will request a minimum of two years, usage of chemical fertilizers will be authorized until enough compost is produced to meet fertilization need. Dosage of in-organic fertilizer is estimated to amount 112 kg of N.P.K. per ha and per year (thus, 56 tons for 500 ha and 22.4 tons for 200 ha).

19 https://www.iso.org/committee/52376/x/catalogue/p/1/u/0/w/0/d/0

50 (d) Once compost (2-year preserved manure compost) will be made available in sufficient amount (estimated in Year 3), it will be used for soil fertilization up to a maximum of 60 tons/ha. (e) In accordance with soil analysis liming will also be performed to improve soil pH, in the limit of +0.5 pH point increase per amendment.

iii. Tarialan – Regulated Irrigation System

Rationale:

The National Agency for Meteorology and Environmental Monitoring, during the last seventy years recorded the following important climate change data: . Average annual temperature increase of 2.26°C; . Decrease of the frost days by 15d. and increase of the summer days by 19d.; . Decrease of western glacier area from 535km2 to 375km2; . Increase of the Dzud conditions.

97. Since 2014, the Ministry of Environment and Tourism (MET) has been developing the concept of integrated water basin management (IWBM) applied to the 29 water basins covering the whole country20. The MET has developed a proposal called High Mountain Water Management (HMWM) which aims to build climate change resilience for the vulnerable populations that are highly water-dependent essentially due to its agricultural activities: water for animal husbandry, pasture, farming and households use. The HMWM is in line with the Mongolian Law on Water. Completion of the feasibility assessment of the HMWM in Tarialan soum by the MET is in progress. The main objective of the MET is to create a capacity for storage of heavy runoff water from glacier melt and during the rainy season in order to: (i) avoid the wastage of river waterflow; (ii) regulating waterflow in order to preserve the ecosystem in receiving waterbodies in this case the Uvs Lake which is a national Critically Protected Area; (iii) reducing high river flow losses from evaporation in the shallow Uvs lake; (iv) avoiding flood and soil quality degradation; and (v) providing for the irrigation needs of the area during water shortages to support to the crops and livestock value-chain as developed in Output 2 of the ASDIP.

98. This whole-basin approach relies on river basins in which natural, potential storage ponds exist adjacent to the river courses. The MET’s HMWM scheme involves 4 subprojects which will harvest the spring-summer high flows of rivers by diverting a portion of the high flows to adjacent natural storage ponds for later irrigation use. The four subprojects are located in Uvs and Bayan- Ulgii Aimags.

99. Figure 11 shows subprojects 1 and 2 of the HMWM scheme near Tarialan soum center including the planned 500ha irrigation scheme of Tarialan soum located downstream closer to Uvs Lake (green polygon) from Figure 10. Figure 12 shows a different perspective plan view of

20 From 2010 to 2013: setting up of the first 13 river basins resources management plans.

51 subproject 2 as well as the 500ha irrigation scheme, and Figure 13 shows closeup view of subproject 2.

Figure 11: Aerial View of Subprojects 1 and 2 of MET’s HMWM Proposal in Tarialan

Source: Adapted from Vol III of ASDIP Final Report

Figure 12: Plan View of Subproject 2 of HMWN and 500 ha Irrigation Scheme

Source: Adapted from MET power point presentation of High Mountain Water Management Scheme

52 Figure 13: Subproject 2 of HMWM in Tarialan Soum

Source: Asian Development Bank.

100. Tranche 1 of ASDIP will include subproject 2 because it is located just upstream and thus considered complementary and consistent with the planned 500ha irrigation scheme described above (Figure 10), which is also shown in Figures 11 and 12. Subproject 2 consists of abandoned 12.5 km water canal through which water from the Kharkiraa-Teel river at Tarialan will be channeled to two storage reservoirs (Figure 13). The abandoned canal and storage reservoirs (ponds) were once used for local irrigation.

101. The proposal is to divert 3% of Kharkiraa-Teel river flow during April-August period (Table 11) through the 12.5km canal to fill the two storage ponds for later discharge for local irrigation (Figure 13). Columns B and C in Table 11 indicate, respectively, long-term average monthly discharge (m3/s) of the river just above the mouth of the 12.5km canal, and the corresponding 3% volume of average flow (m3/s) that would be diverted to the two storage ponds. Table 11 indicates that the proposed 3% extraction from the river is notably small relative to the mainstem flow.

102. The upstream catchment area providing source water is approximately 55km2. Storage in the two ponds is approximately 64 million m3. The HMWM subprojects 3 and 4 (not shown above) and subproject 1 (Figure 11) may be considered for subsequent Tranches of the ASDIP after the formal feasibility studies are completed.

53 Table 11: Proposed Seasonal Diversion of 3% of River to Storage Ponds

A B B-2 C D E F G

Available water 3% Number of days for volume (April Total Water Irrigated area in discharge reservoir filling +40,000m3 = pre- volume per ha - 7t fodder/ha - Discharge for irrigation (approx. 40,000m3) filled reservoir) Month month 210m3 water/ton Remarks (m3/s) (m3/s) (m3) fodder: = 40000/ 1470 ha = b*3% (C*3600*24) = c*3600*24*nb. days January 0,20 frozen February 0,20 frozen March 0,30 frozen April 4,84 12 545 280 0,15 3,19 416 358 283 May 7,20 19 284 480 0,22 2,14 578 534 394 vegetation June 14,68 38 050 560 0,44 1,05 1 141 517 777 growing July 18,28 48 961 152 0,55 0,84 1 468 835 999 season August 11,28 30 212 352 0,34 1,37 906 371 617 September 4,76 October 5,36 November 2,87 frozen December 0,20 frozen

TOTAL 149 053 824 4 511 615 3 069 Source: Adapted from Hydro Fountain Engineering Firm, retained by Uvs government to do analysis.

iv. Umnugovi soum

103. Similar Tarialan soum just south of Ulaangom, an irrigation scheme and fodder farm is planned for Umnugovi soum. Based on local government’s suggestion, an abandoned irrigated scheme located in 10 km north from the soum center was selected (Figure 14) for fodder crop farming. Similar to Ulaangom, the irrigated scheme will produce hay for the Disease Free Establishment of the Agropark in the soum center and local herders.

54 Figure 14: Site of irrigated fodder farm north of Umnugovi soum

Source: Project Agricultural Team.

Site characteristics:

104. Analyses of physical and chemical properties of the soil indicate that the soil is suitable for crop farming activity with introduction of appropriate crop farming rotation techniques and soil fertility improvements. In general, the soil is classified in light loamy soul (30.76% of 0.05-0.01mm particles) with 15 cm depth. Chemical conditions of soil are defined as: humus content is moderate (2.28%); major nutrient levels are poor, i.e., potassium - 15.8mg/100g, phosphorus - 1.88 mg/100g, nitrogen - 1.01mg/100g, calcium - 26.4 meq/100g, and magnesium - 5.8 meq/100g. The alkaline pH (7.9) of soil indicates a requirement for organic (manure) fertilizers during the crop farming activity.

Planned development:

105. The irrigation system of 200ha will function by gravity starting with a head structure that will divert water from nearby river into an open concrete canal with water gates. The irrigation system will include the following sub-components:

(i) Rehabilitation of existing head structure and main concrete open canals with public investment. (ii) Water use management plan developed from public investment (iii) Financing support for construction of surface irrigation distribution canals from a financial intermediary.

55 Proposed crops:

106. The same five-year crop rotation plan described for the field of Ulaangom-Tarialan soum is suggested for Umnugovi soum. Alfalfa will start first in the rotation for 5 years followed by corn. After corn, wheat and barley will be introduced to the rotation. Potato will be entered to the field at the penultimate order. The last plant in the rotation are oat. It is estimated that the area needed for irrigation perimeter is 200ha. Expected yields for silage are 1,240 tons and for dry grain are 80 tons (Table 12).

Table 12. Plant Rotation and Production for Feedlot

Crop plants Purpose Field, Yield, Total yield, (ha) (ton/ha) (ton) Alfalfa silage 40 0.8 80 Corn silage 40 10 1000 Wheat and dry grain 20 0.8 40 Barley silage 20 1.6 80 Potato crop rotation 40 - - Oat dry grain 20 0.8 40 silage 20 1.6 80 Total - 200 - 1320 Source: Project agricultural team.

(i) Water requirements

107. The estimated water requirements to irrigate the 200ha irrigated fodder farm of Umnugovi soum are estimated at 0.126 m3/sec.

B. Bayan-Ulgii Aimag

Overview

108. The improvements to basic urban infrastructure, and the development of agribusiness facilities will occur Ulgii; the center of UVs Aimag and at the selected soum centers of Deluun and Buyant. Unlike the infrastructure and agribusiness investments in Deluun soum, only an irrigation scheme will be developed in Buyant soum. Most of the urban infrastructure will occur inside both urban centers while the agribusiness activities will occur just outside both urban areas. Urban infrastructure planned for Ulgii and Deluun soum is presented first followed by planned agribusiness investments.

1. Urban Infrastructure

a. Ulgii

109. Urban infrastructure investments in Ulgii are defined by the following 2 main components:

(i) Ger area housing redevelopment and services rehabilitation; and (ii) a complex of utility service improvements throughout Ulgii comprised of water supply, heating, wastewater collection and treatment, electricity, communications, solid waste management, roads and drainage, and flood control.

i. Ger area housing rehabilitation

110. Figure 15 provides an aerial view of Ulgii which highlights the perimeters of urban districts of Bag 13 (red) and Bag 5. Ger housing redevelopment is planned for Bag 13 and optionally in Bag 5. Ger redevelopment in Bag 5 may wait until Tranche 2 which will be determined at detailed design stage of Tranche 1. Redevelopment of housing and utility services will occur along a selected pilot road in Bag 13 (Figure 16a). The pilot road will be upgraded and new and upgraded utility trunk lines to service the redevelopment area will be installed along the right-of-way (ROW) of pilot road.

111. Redevelopment of ger area housing will occur in individual khashas and will consist of small 1-2 story apartments that are constructed with modern energy efficient construction materials. The apartments will be serviced with hot water heating, wastewater collection disposal, electricity, and solid waste recycling facilities. Technical Units (TU) comprised of toilets, bathing and laundry facilities will be included.

Figure 15: Aerial View of Ulgii Highlighting Bag 13 (red) and Bag 5.

Source: Project architect.

Figure 16: Bag 13 of Ulgii21

(a) Bag 13 showing pilot road (white line) (b) Ger housing redevelopment along pilot road

Source: Asian Development Bank.

112. Owners of a khasha will be able to swap (cede) all or some of their khasha property for an apartment and/or TU. The options for participation with ger housing redevelopment that were determined from focus group discussions (FGD) with khasha owners is summarized as follows and shown in Figure 16b.

1. No land swap for an apartment but may buy serviced TU 2. Partial land swap for small apartment including TU 3. Total swap of khasha land for multifamily apartment and TU. 4. No decision on participation

ii. Basic urban infrastructure for Ulgii

113. The planned complex of infrastructure and utility services investments for Ulgii in Tranche 1 are summarized in Table 13 and shown in Figure 17. Schematic drawings of planned

21 Bag 13 perimeter plot, pilot road ger development provided by project architect

58 infrastructure will be prepared for detailed designs of Tranche 1. The scope of infrastructure investment in Ulgii includes utility services to re-developed ger housing of Bag 13 and optional redeveloped ger housing of Bag 5, and some of the agribusiness investments for Ulaangom. (see below).

59 Table 13: Planned Urban Infrastructure Investments of Tranche 1 in Ulgii22

Activity Descriptions Type Install new water well at the existing water source and two water storage reservoirs that will improve flow and pressure regulation of the southern portion of the city water distribution network, which Water Resource and Distribution Upgrades includes the Bag 13 redevelopment area. Twin 300-millimeter diameter water lines to connect the water source directly to the new water reservoirs. Rehabilitate buildings, pumps, controls and

Water related equipment at the water source, including new chlorination system Pipelines with manholes to connect the various Agropark facilities with the city water distribution New Pipelines to support the Agropark network. Sewer Lines and Pump Station to Support Ger Area New gravity sewers with manholes to support project facilities. Lines will be installed mostly adjacent

Rehab in Bag 5 and Bag 13 to existing roads Plant capable of treating industrial wastewater generated by the Agropark to standards appropriate Wastewater Treatment and Collection Lines for the for disposal by infiltration, located near the park. Gravity sewers to connect the various Agropark Agropark facilities with the new wastewater treatment plant will also be constructed. New wastewater treatment facility (WWTP) to be constructed at previously designated location. Wastewater New Wastewater Treatment Plant and Supporting Existing wastewater pump station and pressure sewer to the WWTP capacity will be increased to Facilities handle additional loading from urban development, with improved reliability. Heat distribution network rehabilitation necessary to support Bag 5, which will also reduce system Heat Distribution System Upgrade losses due to old pipe. Network pipes will be publicly owned A heat distribution substation will be installed at a new location to be incorporated in the Bag 5 rehabilitation design. Facilities are of a standards configuration and are necessary to control heat and water distribution to area buildings to generate domestic hot water. Substations will be owned Heating Components to Support Bag 5 Rehab by the State and operated by the organization responsible for operations and maintenance of the housing area infrastructure. New heating supply and return lines installed adjacent to existing roads in 1500mm concrete channel with potable water line Heating Similar to Bag 5 requirements, with a new heating distribution substation and connecting pipelines Heating Components to Support Bag 13 Rehab in concrete channel New coal-fired heating plant to serve the Agropark with heat and hot water, and connecting pipelines New Heating Plant to support Ulgii Agropark with valve stations and manholes.

Electrical equipment replacements in central distribution station to improve efficiency. Upgrade Central Electrical Distribution and System Upgrades parts of the distribution system to current 10kV standard to improve efficiency and reliability. Replacement of aging 6/0.4 kV transformers with 10/0.4 kV, concurrent with line replacements. Overhead distribution lines with new poles and transformers for both Bag 5 and Bag 13, and some Electrical Upgrades to Support Ger Area Rehab Electricity buried distribution lines, mostly located within the rehab areas. Electrical Upgrades to Support the Agropark New overhead power distribution lines and substation to serve Agropark facilities

22 Modified from engineering description of Annex 3, Vol II of ASDIP Final Report

Activity Descriptions Type

General Ulgii Aimag Center Communications Upgrade capacity and improve reliability of data transmission within the aimag center Upgrades

ns Communications Upgrades to Support Ger Area Provide internet, IP TV and phone service to the Bag 5 and Bag 13 rehab area residents and Rehab businesses, and adjacent areas

Communicatio Communications Upgrades to Support the Agropark Provide internet, IP TV and phone service to the Agropark businesses, and adjacent areas. Rehabilitate and upgrade 6.9 km of the 15.3 km of urban roads as shown in the plan provided by the Aimag Government, comprising of 5 sections: 3.5 km of existing earth road on the north side of the Khovd rIver to be upgraded to serve as a flood protection embankment with erosion protection and asphalt paved, with lighting and sidewalks. 420 m of urban street in the area of the Military Camp will be upgraded with drainage and rebuilt water, sewer and heating, paving with sidewalks and lighting. Urban Roads with drainage and utilities 540 m of urban streets in the area between the Soum Governor's Office and School No.3 will be

Roads upgraded with drainage and rebuilt water, sewer and heating, paving with sidewalks and lighting. 310 m of urban street between the Thermal Plant and Eagle's Nest Hotel will be upgraded with drainage and rebuilt water, sewer and heating, paving with sidewalks and lighting. 1.9 km of earth road starting near the communications tower going south past the new Agropark site will be upgraded with drainage features and erosion protection, and asphalt paved, with lighting and sidewalks. Construct lined channels and culverts so that drainage water from the rehabilitated area and

Upgrades to Support Ger Area Rehab immediate vicinity can be directed away from adjacent settlement areas. Does not include drainage facilities within the rehab areas. Upgrades to Support the Agropark Concrete lined channel to convert and convey drainage water away from the Agropark site. Preparation of a comprehensive drainage plan for the urban areas of Ulgii that will calculate Drainage TA on Urban Area Drainage Plan drainage flows, develop design criteria and identify improvement projects needed to implement the plan and guide local planners.

Flood protection embankment approximately 1.25 km along the northern side of Bag 5, starting at Flood embankment to Bag 5 (Similar for West the Khovd River bridge. Embankment will be designed with recreational amenities such as foot/bike embankment project) paths and rest areas following the guidance of the concept drawings prepared by the Aimag Government. Flood Protection -Bukhun section - Industrial zone - ASDIP will fund construction of part of the flood protection system around the southern industrial 3.98 km zone, following the plan prepared by the Aimag Government

Flood Protection Flood Flood Protection- Urban Perimeter Completion of Flood Protection Levee system planned by the Aimag

First phase of project works anticipated as follows: • Identify area to designate for permanent development and consolidation of existing waste and Works Projects for Initial Site Cleanup, Priority construct a fence with access control and security. Interventions, Waste Collection Pilot • Priority activities to correct current bad practices. • Initiate site cleanup Solid Waste Solid • Pilot containerized waste collection

61 Figure 17. Plan Views Of Infrastructure Investments Of Tranche 1 in Ulgii

Water And Sewage

Source: Asian Development Bank.

62 Heating

Source: Asian Development Bank.

63 Electrical And Communication

Source: Asian Development Bank.

64 Roads

Source: Asian Development Bank.

65 Flood Protection And Drainage

Source: Asian Development Bank.

66 (i) Additional context for most environmentally sensitive infrastructure from Table 13

(excerpted from engineering description from Vol II of ASDIP Final Report)

Wastewater 114. Ulgii has a non-functioning mechanical wastewater treatment plant (WWTP) that was constructed in the 1980s. The Aimag government has increased the number of simple settling ponds to meet growing capacity needs. The facility is designed for 2700 m3 per day but often receives 3000 to 3500 m3 per day. The volume increases after summer rainstorms and when the nearby wool washing plant is in operation. There is no formal sanitation system in the ger areas with most residents using pit latrines that risk groundwater contamination.

115. The MCUD requested ADB to include funding for a new WWTP in ASDIP Tranche 1. A site for the new wastewater plant is tentatively located near the existing WWTP. There are no significant problems identified for the collection system piping. Rehabilitation of the primary sewage pump station and a DN250 replacement of the existing pressure sewer from the pump station will be done concurrently with the new WWTP.

116. The planned Agropark (see below) will generate wastewater not suitable for treatment by the city system, which will be designed for domestic wastewater only, so the park will have its own small treatment plant (250 m3/day) on-site that will be specifically designed to treat the Agropark waste. A small collection network will connect the Agropark facilities to the new plant. New gravity sewer lines will be required to serve the Ger Area Rehabilitation projects in Bag 5 and Bag 13. A small 50 m3/hr sewage pump station will be required for service of Bag 5 because of the low elevation at the eastern end.

Heating: 117. The developed portions of Ulgii are served by a single coal-fired heating plant, which was privatized after the 1990 economic transition. The private company owns and operates both the heating plant and the heat distribution network. The boiler equipment dates to 1983 but the company says that some of the pipe network dates back to 1955. The plant has a capacity of 65 MW using 4 boilers. The company has maintained the plant and the piping network with their own resources.

118. The company estimates that an additional 45 MW capacity will need to be added to meet planned growth in the next 20 years. The Ulgii heating plant operates only in the cold months (1 October to 1 May), so residents and organizations must generate their own hot water when the plants are not running. This is commonly done with electric water heaters. Heating in the ger areas and places outside the service are of the heating network is typical of all urban ger areas in Mongolia, where heat and cooking is by residential stoves that burn coal, wood or dung. Larger structures heat by unregulated, low-pressure heat-only combustion boilers that primarily use coal. The existing heating plant has the capacity to meet immediate heating demands for the city, but efficiency can be improved with replacement of some of the old, leaky pipes serving the central city. Approximately 1.2 km of dual DN 500 heating lines will be installed under Tranche 1, which will delay the need for additional heating plant capacity.

119. The Agropark (see below) is located far enough from the city heat distribution network that a separate small coal-fired heating plant is the most economical means of providing heat. There will be heat distribution pipes installed in concrete channel that will serve the various Agropark

67 facilities. The separate heating plant will allow an operating schedule that conforms to the needs of the Agropark.

120. The Rehabilitation Areas in Bag 5 and Bag 13 will each require the construction of two heat distribution substations (CTPs), which will make domestic hot water for distribution with heating and cold water to the buildings in its service area. The Locations for substations in the Bag 5 areas have been previously identified in the Ulgii Master Plan, which will simplify the connection piping design and operations. Pipelines to convey heat and cold water will be constructed to serve then new CTPs. These pipes will be installed together in concrete channels buried adjacent to existing streets, in accordance with Mongolian construction standards.

121. The Aimag government has requested for support to construct a new heating plant of 45- 60 gcal/hr near the old airport. While the additional capacity will be needed in the future, rehabilitation of the aging pipe network will increase efficiency and effectively add some capacity to meet near-term needs. A budget for the new heating plant has been included for ASDIP Tranche 2-3. The request to install heating infrastructure in the settled areas north of the Khovd River is also designated for Tranche 2-3 along with the water and sewer systems. The configuration of the heat distribution network north of the river should be done to take advantage of the new heating plant.

Solid Waste Collection and Disposal: 122. The existing situation with solid waste collection and disposal in Ulgi center is similar to Ulaangom and the need to meet current environmental standards and practices is too large a problem to be quickly solved. The Ulgii solid waste dumpsite is located on a hillside north of the Khovd River, and due to largely unregulated operations has expanded to an area of approximately 160 hectares. It is now quite close to residential settlements that have expanded from the south. Access is essentially limited to one road entering from the south, but there is no access control and no designated areas for dumping different types of waste. A large portion of the impacted area is windblown trash and there is no provision or equipment available to cover or consolidate the waste. The dumpsite is situated in an elevated area about 1.5 km from the Khovd river, but there is a large settlement area in between the dumpsite and the river. There is no evidence that there is near-surface groundwater, but there are no measures in place to prevent runoff from the site from impacting the nearby settlements.

123. The city does not presently have a formal solid waste collection and transport system that fully covers all areas, and waste from commercial and industrial waste generators is handled by the respective organizations. Ash from the heating plants is disposed separately from the city dumpsite, but ash from small stoves and boilers makes up a large portion if the waste at the city site. There are no fees of fee collection mechanisms for dumping at the site.

124. Tranche 1 will be the first phase of a program to provide Ulgii with an environmentally sound and sustainable solid waste management system and clean up/ remediate the results of past uncontrolled solid waste disposal practice. The activities will be a mix of technical assistance as follows: . Characterization of existing conditions - Includes type of waste, physical situation (soils, groundwater, topography) and the environmental hazards that need to be remediated and mitigated, based on the existing waste and projected future use of the sites. This will result in recommendations for design of cleanup programs and site improvements. Includes drilling, groundwater sampling and testing.

68 . Initiate formulation of a solid waste manage plan at the local level that includes collection, disposal and cost recovery mechanism(s) and capacity development needs, as well as implementation of a phased cleanup and restoration plan. . Construct a fence with access control and security around areas designated for permanent development and consolidation of existing waste (15 ha). . Initiate priority activities to correct current bad practices that are public health risks, such as groundwater contamination. . Research and formulate opportunities for recycling with associated costs and benefits, coordinated with Aimag and regional programs. . Develop a capital investment program for new facilities and equipment that can be done in T2-3 and with State funding. . Initiate cleanup of existing dump sites. . Pilot containerized solid waste collection in urban core and ger rehabilitation areas with five trucks and 50 bins or skips.

b. Deluun soum

125. The infrastructure investments in Deluun are similar but smaller in scale than planned investments in Ulgii. The investments do not include a ger area redevelopment plan. Instead public buildings and amenities will be improved. Similar to Ulaangom improvements to infrastructure will also service some of the agribusiness facilities that will be developed in Umnugovi (see below).

i. Public Buildings and Amenities

126. Urban infrastructure and services of Tranche 1 include improvements to sanitation housing, and public buildings in the soum center which are described below and illustrated in Figure 18. Sanitation: 127. Indoor toilets are inadequate or are lacking in most public buildings such as schools- kindergartens, dormitories, and hospitals. The ASDIP will finance rehabilitation or construction of new sanitary units which will replace the existing dominant pit latrines which are often located at uncomfortable distances away from buildings. Dormitories: 128. One of the biggest handicaps for education in the rural areas is the lack of beds for children at school. The ASDIP will construct required student dormitories. Multi-purpose buildings: 129. These buildings are required to support activities that are lacking such as libraries or recreation for students on school property. The project will rehabilitate or construct new buildings to enable various multi-purpose functions. Sport: 130. The ASDIP will construction simple sport complexes for the community. The complexes will serve playground needs of young children as well as more organized sport for young adults. Staff housing units:

69 131. In order to attract and keep outside staff (e.g., teachers, medical professionals) whether permanent or seasonal staff, housing accommodation is required. The project will construct simple housing apartment units for this purpose. All buildings will be equipped with an additional supply of electricity through the implementation of PV solar panels with batteries as power storage.

Figure 18: Planned Improvements to Public Buildings and Sanitation in Deluun Soum

Source: Asian Development Bank.

ii. Basic infrastructure improvements in Umnugovi soum

132. The planned improvements to basic infrastructure in Deluun soum are summarized in Table 14. Aerial plan views of the infrastructure are provided in Figure 19.

70 Table 14: Planned Urban Infrastructure Investments of Tranche 1 in Deluun Soum23

Activity Description Type Two water supply wells with wellhouses. with water reservoirs and connecting pipelines, for soum center and Agropark. There should be a hydrogeology study

New Water Source with reservoir and pipelines done to confirm the best well location as part of the design TA for the soum center infrastructure.

Water Buried water supply pipe network with manholes and building connections for the Water distribution network (includes Agropark) major public buildings and the Agropark.

Plant capable of treating domestic wastewater generated by the schools and New Wastewater Treatment Plant, Collection public buildings to standards appropriate for surface disposal, tentatively located Network southeast of the soum center, and a buried gravity sewer collection network to convey sewage from major public buildings to the wastewater treatment plant. Tanker truck configured for cold climate operations equipped with a vacuum pump and hoses that can extract sewage and sludge from holding tanks, cesspits and Vacuum truck for septic system service septic tanks as required for maintenance and transport the waste to a designated

Wastewater location for treatment and/or disposal. Plant capable of pre-treating industrial wastewater generated by the Agropark to Wastewater Pre-treatment for Agropark standards appropriate for treatment by the community WWTP.

New coal-fired heating plant to serve the soum center and Agropark with heat and hot water, and connecting pipelines to the major buildings and Agropark facilities New Heating Plant and Distribution Network with valve stations and manholes. Heating Replacement of overhead cables and transformers to increase the capacity and New Compact Transformer substations and 0.4 kV reliability of power distribution within the soum center. Includes new overhead high lines with meters and boxes for Soum Center voltage supply with transformer to provide power to the new water supply well (design is done) pumps New overhead power distribution lines and 400kVA substation to serve Agropark Electricity New 10 kV lines and Substation for Agropark facilities

23 Modified from engineering designs of Annex 3, Vol II of ASDIP Final report

Activity Description Type

New Optical cable with 500 user MSAN station to Provide internet, IP TV and phone service to the soum center and Agropark support Deluun soum and Agropark residents and businesses. Communications

First phase of project works anticipated as follows: • Identify area to designate for permanent development and consolidation of Initial Site Cleanup, Priority Interventions, Waste existing waste and construct a fence with access control and security. Collection Pilot • Priority activities to correct current bad practices. • Initiate site cleanup Solid Waste Solid • Pilot containerized waste collection Source: Asian Development Bank.

72 Figure 19: Plan Views of Infrastructure Investments of Tranche 1 in Deluun Soum

Water And Sewage and New WWTP

Source: Asian Development Bank.

73 Heating

Source: Asian Development Bank.

74 Electrical

Source: Asian Development Bank.

75 Communications

Source: Asian Development Bank.

76 Dumpsite

Source: Asian Development Bank.

77 (ii) Additional context for most environmentally sensitive infrastructure from Table 13

(excerpted from engineering description from Vol II of ASDIP Final Report)

Wastewater: 133. There is no formal wastewater collection, treatment or disposal system in the soum center. Public buildings and housing areas use pit latrines and cesspits that present potential risks of groundwater contamination. There are no provisions for servicing pit latrines or holding tanks, and when they become full, they are covered and relocated.

134. Companion to the water supply system will be a wastewater collection network that will connect to a new small (100 m3/day) wastewater treatment plant capable of treating domestic wastewater generated by the schools and public buildings to standards appropriate for surface disposal, tentatively located east of the settled area of the soum center.

135. The planned Agropark (see below) will generate wastewater not suitable for treatment by the soum center system, which will be designed for domestic wastewater only, so the park will have its own small treatment plant (50m3/day) on-site that will be specifically designed to pre-treat the Agropark waste so it can be safely discharged to the soum center treatment plant. A small collection network will connect the Agropark facilities to the new plant.

136. Deluun will also be supplied with a 5m3 tanker truck equipped with a vacuum pump for servicing holding and septic tanks, and other on-site sanitation systems. Provisions for receiving, treating and correctly disposing of waste collected by the truck will be included in the WWTP design and overall plan for wastewater treatment and disposal for the soum center that will be developed at detailed design stage of Tranche 1.

Heating: 137. There is one privately owned, coal-fired heating plant in Deluun with a piped distribution network that that serves some of the public buildings and operates during the winter heating season. Smaller public buildings and residences heat by individual stoves that burn coal, wood, or dung. Heating needs for the Deluun and the Agropark exceed the capacity of the present privately-run heating plant, so a new 1.5gcal/hour plant will be constructed under ASDIP Tranche 1 that will serve the public buildings and the new Agropark. There will be a new buried heat distribution network installed in concrete channels that will also contain water lines, which will connect to all serviced buildings.

Solid waste management: 138. The existing situation with solid waste collection and disposal in Deluun, although on a smaller scale, is similar to that in Ulgii and the need to meet current environmental standards and practices is too large a problem to be quickly solved. The Deluun solid waste dumpsite is located approximately 2.2 km to the east of the soum center and due to largely unregulated operations has expanded to an area of approximately 50 hectares. There is no fencing or access control and a large portion of the impacted area is windblown trash. There are no provisions to cover or consolidate the waste. The dumpsite is located in a flat area and there is no surface water near the site. Groundwater is shallow in the area, but the dumpsite is located at a lower elevation from settled areas and the planned ASDIP Agropark.

78 139. There is presently no formal solid waste collection and transport system, and residents are responsible for their waste disposal. The soum center does have a truck and front-end loader that can be used to support dumpsite operations, but there is limited funding support. A large proportion of the waste is stove ash, but there is also waste from livestock slaughtering openly dumped with the household waste.

140. Tranche 1 will be the first phase of a program to provide an environmentally sound and sustainable solid waste management system and clean up/ remediate the results of past uncontrolled solid waste disposal practice. The activities will be a mix of technical assistance as follow: . Characterization of existing conditions - Includes type of waste, physical situation (soils, groundwater, topography) and the environmental hazards that need to be remediated and mitigated, based on the existing waste and projected future use of the sites. This will result in recommendations for design of cleanup programs and site improvements. Includes drilling, groundwater sampling and testing. . Initiate formulation of a solid waste manage plan at the local level that includes collection, disposal and cost recovery mechanism(s) and capacity development needs, as well as implementation of a phased cleanup and restoration plan. . Construct a fence with access control and security around areas designated for permanent development and consolidation of existing waste (5 ha). . Initiate priority activities to correct current bad practices that are public health risks, such as groundwater contamination. . Research and formulate opportunities for recycling with associated costs and benefits, coordinated with Aimag and regional programs. . Develop a capital investment program for new facilities and equipment that can be done in T2-3 and with State funding. . Initiate cleanup of existing dump sites. . Pilot containerized solid waste collection for the larger buildings with one truck and 5 bins or skips.

2. Agribusiness investments at Ulgii and Deluun and Buyant soums

141. Tranche 1 of ASDIP will develop the following three types of agribusiness investments Ulgii and in the soum centers of Deluun and Buyant (only irrigation scheme).

(a) Community-based projects for Pasture User Groups (b) Agroparks (c) Irrigation schemes and fodder farms

a. Community-based projects for Pasture User Groups (PUG)

142. Community micro-projects for herders will be financed by the project to increase animal productivity. Herders must be a member of local PUG to access support. Members of PUGs will contribute through the provision of in-kind labor, cash and/or materials. The locations of the projects have not been determined.

79 143. The indicative types of community micro-projects to be financed are listed below: . Hay protected areas: a 15ha pastureland perimeter near a river will be selected and enclosed with stonewalls. Water canal diversions likely established for irrigation by gravity. . Small equipment and trucks: mini-tractors equipped with agricultural machinery and tools to support pasture management will be provided. . Storage for hay and fodder (shelters). . Animal combing and shaving facility and equipment with storages and disinfecting bath. . Winter wind shelters for animals. . Water wells: Construction of 6 new wells and rehabilitation or fixing of 4 old wells will be performed. . Animal bathing facilities. . Animal drinking water facilities. . Small bridge/river/stream crossing and earth road repair.

b. Agroparks

144. The Agroparks in Ulgii and Deluun soum will consist of Disease Free Establishments, meat processing facilities, laboratory and veterinary services, a Research Development Center, business incubator centers, and agricultural processing industries. The Agroparks will be located just south of Ulgii (Figure 20) and just southeast of Deluun soum (Figure 21). The Agroparks will be serviced in part by the urban infrastructure planned for the urban centers defined above.

i. Disease Free Establishment

145. The Disease Free Establishment will include the following sub-components: . Inspection laboratory and animal inspection zone. . Animal feedlot – disease free zone with quarantine activity for disease controlling.

Figure 20: Location of Agropark South of Ulgii Center

Source: Asian Development Bank.

146. The Disease Free Establishment will be located to enable easy reach by livestock herds. The irrigation scheme and fodder farm (see below) will produce fodder that is necessary for the Disease Free Establishment to function.

81 Figure 21: Location of Agropark at Deluun Soum

Source: Asian Development Bank.

147. The Animal Feedlot of the Disease Free Establishment in Ulaangom will have a capacity of 1,000 animals that can be kept isolated for 2 to 3 weeks in case of animal disease outbreaks or for export requirements. On average the required area for small and big animals is 10 m2/animal. The required total area for the disease-free zone and feedlot is 1ha. To be added is a 0.5ha animal inspection unit with offices and laboratories, a 0.5ha animal shelter, a 0.5ha hay and fodder shelter area, a 0.5ha abattoir zone, and a 0.5ha agricultural machinery parking lot.

148. The complex will include enough storage for hay and fodder in order to feed the 100 head of livestock during the two to three week period without grazing. Table 15 calculates the corresponding hay/fodder storage need as 2,592 tons, given that there is only one harvest for hay at the end of the summer.

82 Table 15: Hay/fodder Storage Needs

149. The animal feedlot of the Disease Free Establishment will include the following features:

(i) 1.5m stone perimeter to delimit the isolated 1ha feedlot and protection zone. (ii) Shelter for the animals from the wind and snow with total area of about 5,000 m2. (iii) Elevated hay storage (to prevent overconsumption) for a total capacity of 500 tons. (iv) Livestock food containers to feed the animals. (v) Drinking water for the animals and water supply connection. (vi) 2km road connection to the nearby paved road. (vii) Agriculture machinery and equipment park area. (viii) Veterinary inspection center with offices and laboratories.

150. An Animal Feedlot will be also established in Deluun soum but with half the capacity. Similarly, the Disease Free Establishment will be integrated within the Agropark at Deluun soum. Capacity of the disease-free zone and feedlot is 500 animals and an area of 0.5 ha. 151. The Disease Free Establishment of Ulgii will include an inspection laboratory and animal inspection zone that will form part of the main laboratory for veterinary services and disease and quality control. The main laboratory will be integrated within the Agropark. Since 2018, the Veterinary Agency became separated from the Ministry of Food, Agriculture and Light Industry (MOFALI) and therefore need new offices. The offices and the laboratory will be combined in the same building in the Agropark. 152. The laboratory in Deluun soum will also be integrated within the Disease Free Establishment at the Agropark at the edge of the soum center (see below). It will also include veterinary offices. 153. It is necessary to provide a building and properly designed laboratories, equipment, and laboratory consumables for the operation of Veterinary Agencies at Ulgii and Deluun soum relative to the animal disease prevention, traceability, clinical services, and activities in the disease-free zone. The main features of the laboratories including equipment are exemplified in Table 16.

83 Table 16: Example Required Equipment and Consumables for Inspection Laboratory

Amount needed Items Purpose Ulgii lab. Deluun lab. Equipment required 1 Thermostat Drying samples and glasses 2 pc 1 pc 2 Autoclave Sterilization for tools and glasses 2 pc 1 pc Determining toxic substances in meat and 3 LC tandem MS 1 pc - food such as antibiotics, pesticides, toxins NIR Determining fat, moisture, carbohydrates 4 1 pc 1 pc spectroscopy and sugar in milk and other substances For extraction of sedimentation from 5 Centrifuges 2 pc 2 pc various biological samples 6 pH-Meter Determining acidity condition of samples 2 pc 2 pc 7 Microscopes Analytical purpose 2 pc 2 pc Car equipped for 8 veterinary For mobile laboratory activity 1 pc 1 pc services For keeping animals during the veterinary 9 Mobile fence 7 pc 7 pc activity 1 Disinfecting bath For animal wash and disinfecting purpose 7 pc 7 pc 0 1 Laminar hood For aseptic isolation activity 1 pc - 1 Consumables needed 1 Sample label For blood and other biological samples 40,000 pc 40,000 pc Container for 2 For carrying samples 40 pc 40 pc labels 3 Biological tubes For blood sample 40,000 pc 40,000 pc 4 Aseptic needle For syringe for blood withdraw 40,000 pc 40,000 pc 5 Needle stand For blood sampling 400 pc 400 pc 6 Gloves For aseptic purpose 500 box 500 box Laboratory safety 7 For aseptic and disinfecting activity 1000 pc 1000 pc clothes Lab kits for fast 8 For field test 40 pc 40 pc testing of rabies Lab kits for fast 9 testing of cow- For field test 40 pc 40 pc pox Training and capacity building activity 1 Laptops For data processing in the field 1 pc 1 pc 2 Desktops For data processing in the office 1 pc 1 pc 3 OH projector For data presentation 1 pc 1 pc 4 Microphone For data presentation 1 pc 1 pc 5 Color printer For data sharing 1 pc 1 pc 6 White screen For data sharing 1 pc 1 pc Source: Asian Development Bank.

84 (i) Water needs

154. The water requirements of the Disease Free Establishment in Ulgii are estimated as drinking water: 2.6 m3/day, and process water: 50 m3/day.

ii. Meat processing facilities

155. There are two meat processing facilities in Ulgii which use apply the Halal standardization. Both have contracts established to export raw meat to China and Iran. Existing meat processing facilities have similar capacities, about 600 animals per day, but none of them function at full capacity. The project will provide financing support to the private sector to build a meat processing facility close to the Disease Free Establishment. The capacity of the meat processing facility will be 150 big animals and 600 small animals per day, functioning 8 months a year. The design of the meat processing facility will follow FAO (1988) and WHO (1984) standards for operations and environmental protection.

(i) Water Needs

156. The water requirements of the meat processing facility in Ulgii are estimated as: drinking water: 105 m3/day and a total of 210 m3/day with meat processing.

157. There is not a proper meat processing facility in Deluun. Animals are simply killed outside. The project will build a simple meat processing facility respecting international environment standards and equipped with storage facilities and sorting rooms. The capacity of the meat processing facility will be 150 animals per day in a combined line (small and big animals) functioning 8 months a year. The meat processing facility will be located close to the Disease Free Establishment within the Agropark (see below).

(ii) Water Needs

158. The water requirements of the meat processing facility in Deluun are estimated as: 30 m3/day without meat processing (60 m3/day with meat processing).

(iii) Design standards for meat processing

159. The design of the meat processing and storage facilities for Ulgii and Deluun will follow FAO (1988) and WHO (1984) standards for operations and environmental protection along with the other international standards for meat processing facilities summarized above for Ulaangom and Umnugovi.

iii. Processing industries, storage, and business incubation

160. The Agroparks will support development of small agro-process industries and business promotion. It is envisioned that the Agroparks will host a non-exhaustive list of business and agro- process opportunities that will be dictated by and support local Agribusiness Development Planning. Example processing industries are dairy farm, greenhouses, vegetable processing, leather finishing (not tanneries), and wool processing.

85 (i) Water requirements

161. The estimated water requirements of planned processing industries of Agropark are summarized in Table 17.

Table 17: Estimated Process Industry Water Requirements of Agroparks

iv. Environmental Management System

162. The government will need to develop an Environmental Management System (EMS) for the Agroparks in Ulgii and Deluun that will be managed by the Aimag and soum governing authorities. The EMS will consist of a set of procedures and guidelines to ensure the protection of local environment and natural resources. The PISC will assist with the development of the EMS. The EMS will form part of the project loan covenants.

c. Irrigation networks and fodder farms

i. Ulgii / Buyant soum

163. An abandoned irrigation scheme and fodder farm will be rehabilitated. A 500ha site has been selected in Buyant soum due to land availability, and close proximity to an existing paved road and electrical power supply lines. The irrigation scheme will be implemented into three parts:

o The head structure and the main irrigation canal will be rehabilitated with associated equipment (water gates, etc). The system will function by gravity. o A Water Resources Management Plan will be prepared. o Financing support (concessional loans) will be provided to the private sector (cooperative or private company) to develop a dual water irrigation scheme on 500 ha comprised of two perimeters of 230ha and 270ha.

164. The selected site was an irrigated perimeter during the Soviet era. It is easily accessible from Ulgii and can be easily connected to needed infrastructures, including the main irrigation canal / head structure. The proposed existing head-structure of the irrigation scheme, irrigation canal, and irrigation perimeter of a total of 500ha are shown in Figure 22.

Figure 22: Location of Irrigation Scheme Southeast of Ulgii In Buyant Soum

Source: Asian Development Bank.

Site characteristics:

165. The chemical and physical parameters of the soil of the irrigated perimeters have been determined. The low salinity level (0.05%) of the soils indicate the perimeter areas are suitable for crop farming with appropriate cultivation technologies. The low levels of the three primary nutrients, NPK (N=0.91 mg/100g), suggests the need for appropriate application of inorganic fertilizers as well as cultivation of leguminous plants, such as alfalfa, in the crop rotation plan.

166. The soil is classified as light loamy brown – dry land pasture soil with 61.4%±4 of 0.01- 0.25 mm of particles; 19.7±1mg/kg of phosphate (P) levels; and 15-20 cm of humus. The alkaline pH 8.16±0.2) indicates a need of organic fertilizers such as compost comprised of animal manure in order to normalize the pH level. The soil has sufficient amount of humus (2.07%±0.1) for proper crop farming activity. The composition of calcium (Ca = 17.89±1.3 meq/100g), magnesium (Mg =

87 5±0.6 meg/100g) and potassium (K = 29.3±2.3 mg/100g), as well as the Ca/Mg ratio of 3.9 suggests the soil fertility needs to be improved with inorganic calcium (gypsum or lime) and potassium-based fertilizers.

System implementation:

167. The irrigation system will function by gravity with a head structure diverting water from the nearby river into open and closed concrete canals with water gates and irrigation machinery. The irrigation system will include the following sub-components which will be owned and managed by the soum government: . Head structure and main concrete closed and open canals . Water use management plan in the Umnugovi river basin area . 5 pawed irrigation machinery. . 2 tractors equipped with agricultural machinery for soil and crop cultivation . One silage preparation unit with a capacity of 1,000 tons. . One fodder and silage storage house. . One fence with garages for agricultural machinery parking. . Financing support for 500 ha irrigation scheme and machinery

(i) Water requirements

168. The estimated total water requirements to irrigate the entire 500ha irrigated fodder farm of Ulgii / Buyant soum are estimated at 0.315 m3/sec.

Expected crops

169. The purpose of this irrigation system/fodder farm is to supply the Disease Free Establishment and herders with food for animals. The irrigated perimeter will produce a combination of cereal and leguminous crops to be used for fodder such as oat, barley, wheat, corn, beans/peas, and alfalfa, and these crops will be mixed together to produce fodder. The proposed crop plants will be cultivated in a five-year rotation scheme based on cultivation schedule of the perennial crop alfalfa for 5 years as a purpose of enhancement of soil organic matters. Potato will also be introduced in the crop rotation scheme for weed suppression and to loosen the soil. According to the five-year rotation plan, the field will be divided into 5 sections as described in Table 18. The first plant in the rotation is alfalfa to be grown for 5 years, followed by corn After the corn, wheat and barley will be introduced to the rotation. Potato will be entered to the field at the penultimate order. The last crop in the rotation are oats. It is estimated that the needed area of the irrigation perimeter will be 500 hectares. Expected yields for silage are 3,100 tons and for dry grain are 200 tons.

88 Table 18: Crop Rotation and Production for Feedlot

ii. Deluun soum

170. As recommended by local government, an abandoned 200ha irrigated perimeter located 5km southwest of the soum center will be re-used for hay production (Figure 23). Similar to Ulgii, the irrigated perimeter will produce hay for the Disease Free Establishment of Agropark and local herders.

Figure 23: Location of Irrigated Hay Growing Area in Deluun Soum

Source: Asian Development Bank.

89 Site characteristics 171. In general, the soil is classified in light loamy soil with depth of <15 cm (51.8% of 0.05- 0.25mm particles). Chemical conditions of soil are: humus content is moderate (1.43%); major nutrient elements compositions are poor, such as, K- 24.17mg/100g, P- 2.27 mg/100g, N- 0.12mg/100g, Ca- 11.33meq/100g, and Mg- 5.5meq/100g. Alkaline pH level (7.7).

Planned development:

172. The irrigation system for the hay field of 200ha will function by gravity starting with a head structure that will divert water from nearby river into an open concrete canal with water gates. The irrigation system will include the following sub-components:

o Rehabilitation of existing head structure and main concrete open canals with public investment. o Water use management plan developed from public investment o Financing support for construction of surface irrigation distribution canals from a financial intermediary.

(i) Water requirements

173. The estimated water requirements to irrigate the 200ha irrigated hay field of Deluun soum are estimated at 0.126 m3/sec.

C. Khovd Aimag

Overview

174. The improvements to urban infrastructure and services, and the development of agribusiness facilities will occur in Jargalant; the center of Khovd. A soum center for Khovd Aimag has not been selected with Tranche 1. Most of the urban infrastructure will occur inside the urban area while most of the agribusiness activities will occur just outside Jargalant. Urban infrastructure planned for Jargalant is presented first followed by planned agribusiness investments.

1. Urban infrastructure

175. Urban infrastructure investments in Jargalant are defined by the following 2 main components:

a) Ger area housing and services rehabilitation; and b) a complex of utility service improvements throughout Jargalant comprised of water supply, heating, wastewater collection and treatment, electricity, communications, solid waste management, flood protection, and roads and drainage.

a. Ger area housing rehabilitation

176. Figure 24 provides an aerial view of Jargalant center which highlights the perimeter of Alagtolgoi (Bagh) in which ger housing redevelopment is planned. Redevelopment of housing and utility services will occur along a selected pilot road in Alagtolgoi (Figure 25a). The pilot road

90 will be upgraded and new and upgraded utility trunk lines to service the redevelopment area will be installed along the right-of-way (ROW) of pilot road.

Figure 24: Aerial View of Jargalant Highlighting Alagtolgoi (Bagh)

Source: Project architect.

177. Redevelopment of ger area housing will occur in individual khashas and will consist of small 1-2 story apartments that are constructed with modern energy efficient construction materials. The apartments will be serviced with hot water heating, wastewater collection disposal, electricity, and solid waste recycling facilities. Technical Units (TU) comprised of toilets, bathing and laundry facilities will be included.

91 Figure 25: Alagtolgoi (Bag) of Jargalant24

(a) Alagtolgoi showing pilot road (white line) (b) Ger housing redevelopment along pilot road

Source: Asian Development Bank.

178. Owners of a khasha will be able to swap (cede) all or some of their khasha property for an apartment and/or TU. The options for participation with ger housing redevelopment that were determined from focus group discussions (FGD) with khasha owners is summarized as follows, and shown in Figure 25b.

b. Basic urban infrastructure improvements

179. The planned improvements to the complex of infrastructure and utility services for Tranche 1 for Jargalant are summarized in Table 19. Plan views of infrastructure upgrades are provided in Figure 26. Schematic drawings of planned infrastructure will be prepared for detailed designs of Tranche 1. The scope of infrastructure improvements includes utility services to planned ger housing rehabilitation of Alagtolgoi, and to the planned agribusiness investments (see below).

24 Alagtolgoi perimeter plot, and pilot road ger development provided by project architect

92 Table 19: Planned Urban Infrastructure Investments of Tranche 1 in Jargalant25

Type Activity Description

Rehabilitate wellhouse buildings, pumps, controls, electrical supply and control wiring. Replace and enhance flow and pressure monitoring with appropriate SCADA so that water production and equipment status can be monitored and Water Source and Booster Pump Station controlled; Replace connecting pipeline between locations and rebuild fences Rehabilitation, new Chlorination System and security features as required. Booster pump station rehab to strengthen network pressurization, and new chlorination system. Upgrade system metering

and identify leaks for prioritizing pipe replacements New water pipeline with manholes to connect the Rehabilitation Area to the Water New Pipelines to support Ger Area Rehab existing water supply network. New water pipeline with manholes to connect the Agropark to the existing water New Pipelines to support Agropark (single pipeline) supply network. Water source well for new livestock health facility, including submersible pump, Water well for Livestock Health Facility controls and electrical connection, with a small reservoir and wellhouse

Major rehabilitation of existing wastewater treatment plant (WWTP) to bring plant up to secondary treatment standards and projected loading through 2040 Rehabilitate and upgrade of existing WWTP, pump (3000 m3/day), including replacement of all major equipment, rehabilitation of

station and pressure sewer pipeline tankage and piping to repair leaks, chlorination system and effluent disposal system. Add facility to receive latrine waste from remote locations. Work will be done within existing WWTP site. New Sewer Lines to support Bag Takhilt and New gravity sewers with manholes to support project facilities. Lines will be Alagtolgoi Ger Area Rehab installed mostly adjacent to existing roads. Wastewater Wastewater treatment plant designed to stabilize industrial wastewater from the Wastewater Treatment and Effluent Lines for the Agropark so that the plant effluent can be safely introduced into the city Agropark collection and treatment system, which is designed for domestic waste.

Possible upgrade to the heat distribution pumps at the State heating plant to Circulation Pump Upgrade at State Heating Plant improve capacity until the Tranche 2-3 major upgrading project

New heating supply and return lines, previously planned and designed, to serve Heating Components to Support Bag Takhilt and the ASDIP Ger Area Rehab will be installed in 1500mm concrete channel with Alagtolgoi Rehab potable water line, including valve stations and access manholes. Lines will be

Heating installed adjacent to existing roads. New heating supply and return lines installed in 1500mm concrete channel with Heating Components to Support the Agropark potable water line, including valve stations and access manholes, and new heating distribution substation for the Agropark. Facilities are of a standards

25 Modified from engineering designs of Annex 3, Vol II of ASDIP Final Report.

93 Type Activity Description

configuration and are necessary to control heat and water distribution to area buildings and include heat exchangers to generate domestic hot water. Rehabilitation and efficiency upgrades for central distribution substation.

General Aimag Center Electrical Upgrades Preparation for eventual conversion to 10 kV from 6kV. Replacement of 35 aging and inefficient 6.0/0.4kV transformers. Electrical Upgrades to Support Ger Area Rehab New substations to satisfy load requirements of ASDIP ger area rehab. Overhead line from the central distribution substation and 10/0.4 kV substation Electricity Electrical Upgrades to Support the Agropark at the Agropark for service to new facilities

General Khovd Aimag Center Communications Cable replacement to upgrade capacity and improve reliability of data Upgrades transmission to and from the aimag center

Communications Upgrades to Support Ger Area Provide internet, IP TV and phone service to the rehab area residents and Rehab businesses, and adjacent areas Provide internet, IP TV and phone service to the Agropark businesses and

Communications Communications Upgrades to Support the Agropark adjacent areas.

Upgrading of 2.2km of ger area earth roads with asphalt paving, sidewalks and improved lighting, incorporating water, sewer and heating infrastructure. 0.2 km New roads for urban and ger areas, Agropark asphalt road connecting the Agropark to the nearest paved road, with sidewalks Roads and lighting Construct lined channels and culverts so that drainage water from the rehabilitated area and immediate vicinity can be directed away from adjacent Drainage Improvements per Jargalant Soum Master settlement areas. Does not include drainage facilities within the rehab areas nage Plan and these designs must be coordinated. Drainage structures will be constructed

Drai adjacent to existing roads whenever possible. Work to begin in Tranche 1 and continue in Tranche 2-3 after drainage master plan is completed and approved. Staged construction of flood protection channels on the south and east

Flood protection channels and storage pond per perimeters of the city that will integrate flood protection with a pond that can Master Plan to Protect Urban Center Flood Flood Protec tion that can hold drainage water for reuse for irrigation First phase works projects: • Identify area to designate for permanent development and consolidation of existing waste and construct a fence with access control and security. Initial cleanup, priority actions, fencing and access • Priority activities to correct current bad practices. control • Initiate site cleanup

Solid Waste Solid • Pilot containerized waste collection

Source: Asian Development Bank.

94 Figure 26: Plan View of Infrastructure Investments of Tranche 1 in Jargalant

Water And Wastewater

Source: Asian Development Bank.

95 Heating

Source: Asian Development Bank.

96 Electricity

Source: Asian Development Bank.

97 Flood Protection

Source: Asian Development Bank.

98 (i) Additional context for most environmentally sensitive infrastructure in Table 18

(excerpted from engineering description from Vol II of ASDIP Final Report)

Wastewater: 180. Jargalant city center is served by a mechanical treatment plant that was constructed in 1987 and was upgraded with new air blowers, pumping equipment and a chlorination system in 2012. The plant was designed capacity is 7,200 m3/day and the reported maximum flow is 4,800 m3/day, but the plant's treatment effectiveness is reported as 50%-60% under normal operations. Discharge from the WWTP is pumped to unlined settling ponds that are located about 300 m from a small stream that is part the Buyant River channel.

181. The Jargalant WWTP is in need of major repairs and upgrading to meet national and international discharge standards, but it is not presently included in any Aimag Center WWTP upgrading programs. A detailed analysis of the existing facility and detailed design of improvements will be conducted at detailed design stage of Tranche 1 to determine what actions will be required. However, the anticipated major upgrades should be able to meet environmental requirements for treated effluent and have the capacity to adequately treat anticipated wastewater flows until the year 2045. With the new WWTP from Tranche 1 there should be upgrading or replacement of the existing wastewater pump station and pressure sewer that connects the city collection network to the new plant.

182. The planned Agropark for Jargalant (see below) will generate wastewater not suitable for treatment by the city system, which will be designed for domestic wastewater only. The park will have its own small treatment plant (250 m3/day) on-site that will be specifically designed to pre- treat the Agro-park waste so that the effluent can be disposed through the city sewage collection system without disrupting operations of the WWTP. A small collection network will connect the Agro-park facilities to the new plant. New gravity sewer lines will be required to serve the Ger Area Rehabilitation project in Bag Takhilt and Alagtolgoi and other urban areas to connect them to the city sewage collection network.

Heating: 183. The developed portions of Jargalant are served by two coal-fired district heating plants. The original plant, which was privatized after the 1990 economic transition, serves the northern portion if the city. The company has maintained and upgraded portions of the piping network with their own resources. The State-owned heating plant was commissioned in 2014 and provides heat to approximately 50% of Jargalant Soum - 1600 families, 24 organizations and 25 businesses. The plant is designed to produce 14MW from 3 boilers but is already running at nearly full capacity and the Aimag Government is proposing an upgrade to double the plant's capacity.

184. The State plant was designed for coal with a heating value of 6100-6200 kcal/kg and to operate at 80%-85% efficiency, but the coal that they receive is lower quality, with a heating value of 4200kcal/kg, so they are presently operating only at about 55% efficiency and are unable to meet emissions standards. The State heating plant gets its coal from the Khusurt mine operated by the company that owns and operates the private heating plant in Khovd, and this is apparently the only feasible coal source for the plant.

185. A large portion of the heating network served by the State heating plant relatively new and is in good condition, but there are some older sections that date as far back as the 1960s. The

99 Khovd heating plants operate only in the cold months (1 October to 1 May), so residents and organizations must generate their own hot water when the plants are not running. This is commonly done with electric water heaters.

186. Heating in the ger areas and places outside the service are of the heating network is typical of all urban ger areas in Mongolia where heat and cooking is by residential stoves that burn coal, wood or dung. Larger structures heat by unregulated, low-pressure heat-only combustion boilers that primarily use coal.

187. Additional heating capacity is needed for Jargalant. The existing State-owned plant is not operating as it was designed due to a lower grade fuel source, and it is not reasonable to plan for an expansion of the plant until there is a plan to solve this problem. This can be done by either retrofitting the boilers to burn lower grade coal or changing the coal source, and ASDIP will conduct a TA study to define alternatives and recommend solutions.

188. Tranche 1 will fund some small upgrades to the existing State plant's circulation pumping system that will improve delivery capacity to accommodate network expansions, including the Ger Area Rehabilitation project. A new Heat Distribution Substation (CTP) will be required to provide heat to the Agropark, and new dual DN200 heating lines, installed in a concrete channel with the DN150 water supply pipe, will connect the new substation to the city heat distribution network.

The rehabilitation areas in Bag Takhilt and Alagtolgoi will require the construction of a new heat distribution substation (CTP), which will make domestic hot water for distribution with heating and cold water to the buildings in its service area. The locations for the substation have been previously identified in the Khovd Master Plan, which will simplify the connection piping design and operation. Pipelines to convey heat and cold water will be constructed to serve then new CTPs. These pipes will be installed together in concrete channels buried adjacent to existing streets, in accordance with Mongolian construction standards.

Solid Waste Management: 189. The existing situation with solid waste management in Jargalant similar to Ulgii and Ulaangom and the need to meet current environmental standards and practices is too large a problem to be quickly solved. Jargalant has a head start over some of the other aimags, but their existing dumpsite is significantly larger.

The Jargalant waste dumpsite is located in close proximity to developed areas to the southeast of the city and due to largely unregulated operations has expanded to an area of over 280ha. The city has constructed 600m of fencing that partially encloses the dumpsite and an access control gate and guardhouse but dumping outside the fenced area was observed during the ASDIP team site visit. A large portion of the impacted area is windblown trash and there is no provision or equipment available to cover or consolidate the waste.

190. The Jargalant government, who is responsible for solid waste collection and disposal, is planning a formal solid waste collection and transport system that fully covers all areas, but is lacking the resources for implementation. There is some organized waste collection, but transport and disposal of waste from commercial and industrial entities is handled by the respective organizations.

191. Ash from the heating plants is disposed separately from the city dumpsite, but ash from small stoves and boilers makes up a large portion if the waste at the city site. The dumpsite is

100 situated on a high ground to the southeast of the developed area of the city. There is no evidence that there is near-surface groundwater at the dumpsite, but there is a high potential for rainfall runoff to convey leached materials from the dumpsite. The Aimag has constructed a lined drainage channel along the lower boundary of the site that conveys water to open land near the dump site.

The government would like to implement a recycling program in Jargalant, but they do not have the financial resources for detailed planning or implementation. Solid waste user fees are set and collected by the Aimag government and tariffs revenues are not directly applied to recover operating costs or fund capital improvements.

192. Tranche 1 will be the first phase of a program to provide Jargalant with an environmentally sound and sustainable solid waste management system and clean up/ remediate the results of past uncontrolled solid waste disposal practice. The activities will be a mix of technical assistance as follows: (i) Characterization of existing conditions – Includes type of waste, physical situation (soils, groundwater, topography) and the environmental hazards that need to be remediated and mitigated, based on the existing waste and projected future use of the sites. This will result in recommendations for design of cleanup programs and site improvements. Includes drilling, groundwater sampling and testing. (ii) Initiate formulation of a solid waste manage plan at the local level that includes collection, disposal and cost recovery mechanism(s) and capacity development needs, as well as implementation of a phased cleanup and restoration plan. (iii) Construct a fence with access control and security around areas designated for permanent development and consolidation of existing waste (15 ha). (iv) Initiate priority activities to correct current bad practices that are public health risks, such as groundwater contamination. (v) Research and formulate opportunities for recycling with associated costs and benefits, coordinated with Aimag and regional programs. (vi) Develop a capital investment program for new facilities and equipment that can be done in T2-3 and with State funding. (vii) Initiate cleanup of existing dump sites. (viii) Pilot containerized solid waste collection in urban core and ger rehabilitation areas with five trucks and 50 bins or skips.

2. Agribusiness investments at Jargalant

193. Tranche 1 of ASDIP will focus on developing agribusiness facilities in Jargalant. A soum center will not be included. An irrigation scheme and fodder farm will also not be included with the investments in Khovd Aimag. The following three types of agribusiness investments will be developed in Jargalant:

a) Community-based projects for Pasture User Groups b) Agroparks c) Irrigation schemes and fodder farms

101 a. Community-based projects for Pasture User Groups (PUG)

194. Community micro-projects for herders will be financed by the project to increase animal productivity. Herders must be a member of local PUG to access support. Members of PUGs will contribute through the provision of in-kind labor, cash and/or materials. The locations of the projects have not been determined.

195. The indicative types of community micro-projects to be financed are listed below. . Hay protected areas: a 15ha pastureland perimeter near a river will be selected and enclosed with stonewalls. Water canal diversions likely established for irrigation by gravity. . Small equipment and trucks: mini-tractors equipped with agricultural machinery and tools to support pasture management will be provided. . Storage for hay and fodder (shelters). . Animal combing and shaving facility and equipment with storages and disinfecting bath. . Winter wind shelters for animals. . Water wells: Construction of 6 new wells and rehabilitation or fixing of 4 old wells will be performed. . Animal bathing facilities. . Animal drinking water facilities. . Small bridge/river/stream crossing and earth road repair.

b. Agropark

196. The Agropark in Jargalant will consist of a Disease Free Establishment, meat processing facility, laboratory and veterinary services, a Research Development Center, business incubator center, and agricultural processing industries. The Agropark will be located just east of Jargalant (Figure 27). The Agropark will be serviced as needed by the urban infrastructure investments of planned for Jargalant.

i. Disease Free Establishment

197. The Disease Free Establishment will include the following sub-components: . Inspection laboratory and animal inspection zone. . Animal feedlot – disease free zone with quarantine activity for disease controlling.

102 Figure 27: Location of Agropark East of Jargalant.

Source: Asian Development Bank.

198. The Disease Free Establishment will be located to enable easy reach by livestock herds. It will have a capacity of 1,000 animals, to be kept isolated in case of animal disease outbreaks or exportation purpose for a period between two to three weeks. On average small animal and big animals require 10 m2 / animal. Required total area for the disease free zone and feedlot is 1ha, 0.5ha for animal inspection unit with offices and laboratories, 0.5ha for animal shelter, 0.5ha for hay and fodder shelter, 0.5ha for abattoir zone, and 0.5ha for agricultural machinery parking lot.

199. The complex will include enough storage for hay and fodder in order to feed this number of livestock during the 2 to 3 week periods without grazing. Table 20 estimates the corresponding need for hay/fodder storage as 2,592 tons, given there is only one harvest for hay at the end of the summer.

103 Table 20: Hay and Fodder Storage Requirements

200. The Disease Free Establishment will include the following features: (i) 1.5 m stone-walls to delimit the isolated 1ha feedlot and protection zone. (ii) Shelters for the animals from wind and snow. The shelter will have a total covered area of 5,000 m2. (iii) Elevated hay storage (to prevent overconsumption) will have a total capacity of 500 tons. (iv) Livestock food containers to feed the animals. (v) Drinking water facilities and water supply connection. (vi) 6km road connection to the paved road. (vii) Agriculture machinery and equipment park area (viii) Veterinary inspection center with offices and laboratories

201. The Disease Free Establishment of Jargalant will include an inspection laboratory and animal inspection zone that will form part of the main laboratory for veterinary services and disease and quality control. It is necessary to provide proper designed laboratory facilities in a dedicated building, equipment, and laboratory consumables for proper operation of Veterinary Agencies at Jargalant relative to the animal disease prevention, traceability, clinical services, and activities in the animal health zone.

202. Since 2018, the Veterinary Agency has been separated from the Ministry of Food, Agriculture and Light Industry (MOFALI) and therefore new offices are needed. The offices and the laboratory will be combined in the same building (see agropark below). The main features of the laboratory including equipment are detailed in Table 21.

Table 21: Example Required Equipment And Consumables For Inspection Laboratory

Items Purpose Amount needed Ulgii lab. Deluun lab. Equipment required 1 Thermostat Drying samples and glasses 2 pc 1 pc 2 Autoclave Sterilization for tools and glasses 2 pc 1 pc Determining toxic substances in meat and 3 LC tandem MS 1 pc - food such as antibiotics, pesticides, toxins NIR Determining fat, moisture, carbohydrates 4 1 pc 1 pc spectroscopy and sugar in milk and other substances

104 Items Purpose Amount needed Ulgii lab. Deluun lab. For extraction of sedimentation from 5 Centrifuges 2 pc 2 pc various biological samples 6 pH-Meter Determining acidity condition of samples 2 pc 2 pc 7 Microscopes Analytical purpose 2 pc 2 pc Car equipped for 8 veterinary For mobile laboratory activity 1 pc 1 pc services For keeping animals during the veterinary 9 Mobile fence 7 pc 7 pc activity 1 Disinfecting bath For animal wash and disinfecting purpose 7 pc 7 pc 0 1 Laminar hood For aseptic isolation activity 1 pc - 1 Consumables needed 1 Sample label For blood and other biological samples 40,000 pc 40,000 pc Container for 2 For carrying samples 40 pc 40 pc labels 3 Biological tubes For blood sample 40,000 pc 40,000 pc 4 Aseptic needle For syringe for blood withdraw 40,000 pc 40,000 pc 5 Needle stand For blood sampling 400 pc 400 pc 6 Gloves For aseptic purpose 500 box 500 box Laboratory safety 7 For aseptic and disinfecting activity 1000 pc 1000 pc clothes Lab kits for fast 8 For field test 40 pc 40 pc testing of rabies Lab kits for fast 9 testing of cow- For field test 40 pc 40 pc pox Training and capacity building activity 1 Laptops For data processing in the field 1 pc 1 pc 2 Desktops For data processing in the office 1 pc 1 pc 3 OH projector For data presentation 1 pc 1 pc 4 Microphone For data presentation 1 pc 1 pc 5 Color printer For data sharing 1 pc 1 pc 6 White screen For data sharing 1 pc 1 pc Source: Asian Development Bank.

(i) Water needs

203. The water requirements of the Disease Free Establishment in Ulaangom are estimated as drinking water: 2.6 m3/day, and process water: 50 m3/day

ii. Meat processing facility

204. There are three meat processing facilities in Jargalant. Existing meat processing facilities have similar capacities, about 600 animals per day, but none of them operate at full capacity. The project will provide financing support to the private sector to build a meat processing facility close

105 to the Disease Free Establishment on the Agropark site. The capacity of the meat processing facility will be 150 big animals and 600 small animals per day, functioning 8 months a year.

(i) Water Needs

205. The water requirements of the planned meat processing facility in Jargalant are estimated as: drinking water: 105 m3/day and a total of 210 m3/day with meat processing.

(ii) Design standards for meat processing

206. The design of the meat processing and storage facilities for Ulgii and Deluun will follow FAO (1988) and WHO (1984) standards for operations and environmental protection along with the other international standards for meat processing facilities summarized above for Ulaangom and Umnugovi.

iii. Processing industries, storage, and business incubation

207. The Agropark at Jargalant will support development of small agro-process industries and business promotion. It is envisioned that the Agropark will host a non-exhaustive list of business and agro-process opportunities that will be dictated by and support local Agribusiness Development Planning. Example processing industries are dairy products, greenhouses, vegetable processing, leather finishing, and wool processing.

(i) Water requirements

208. The estimated water requirements of planned processing industries of Agropark are summarized in Table 22.

Table 22: Estimated Process Industry Water Requirements of Agropark

iv. Environmental Management System

209. The government will need to develop an Environmental Management System (EMS) for the Agropark in Jargalant that will be managed by the Aimag governing authorities. The EMS will consist of a set of procedures and guidelines to ensure the protection of local environment and natural resources. The PISC will assist with the development of the EMS during the detailed design stage. The EMS requirement will form part of the project loan covenants.

106 IV. DESCRIPTION OF AFFECTED ENVIRONMENTS

A. Physical Environment

210. The Mongolian geo-physical environment is very varied and can be divided into six zones – High mountain, mountain taiga, forest steppe, steppe, semidesert steppe and desert. The northern part of the country is covered by forest and mountain ranges and the southern part by desert, desert steppe, and steppe areas with low mountains. The western part is dominated by the high snow-capped mountain belt of the Mongol Altai and Khangai mountainous regions, with their perpetual snow and glaciers and the eastern part by vast plains and wild heaths. About 81% of the country is higher than 1,000m above sea level and the average elevation is 1,580 m. The highest mountain is Tavan Bogd in Bayan-Ulgii Aimag at 4,374 m and the lowest point is Khukh Nuur in the east at 560m.

1. Topography and Geography

211. The Aimag and Soum Development Investment Project area covers three western Aimag centers (Ulgii, Jargalant and Ulaangom soums) and Deluun, Mankhan and Umnugovi intersoums of Bayan-Ulgii, Khovd and Uvs Aimags.

212. Western Mongolia dominated by the Altai Mountain range stretching along the southern border with China which slopes down to the Great Lakes Region of Mongolia. Eastern part of Mongolia consists dominantly of flat steppe area.

a. Uvs Aimag

213. Ulaangom soum is located in the west of the Uvs Lake, occupying 34 sq. km of land at the elevation of 939m above sea level and is 1,336km away from Ulaanbaatar city. Many snow- capped mountains such as Tsagaan Deglii, Must, Tsagaan Shuvuut, also over 40 big and small, salty and fresh water lakes such as Uvs, Khyargas, Achit and Uureg that are abundant in fish and vast forests and steppes are in this aimag. The Uvs aimag is situated in westren Mongolia occupying the Khankhukhii, Kharkiraa, Turgenii mountain ranges and the Gobi in the Uvs Lake depression. The highest mountain is 4,116m high Kharkiraa Mountain. Kharkiraa, Turgenii mountains are relatively young frowning mountains. The lowest point of Uvs Lake area is 758.9m above sea level while the highest point is Kharkiraa-Turgenii Mountain's peak at 4,126m above sea level.

b. Bayan-Olgii Aimag

214. Baya-Ulgii Aimag with Ulgii center is the highest Aimag in Mongolia with 95% above 1600 m (1 mile) above sea level, with the highest point of Khuiten Uul at 4373 m. The Altai mountain range crosses Mongolia, China, Russia, and Kazakhstan forming a natural boundary between European and East Asian cultures. The Altai Mountains are the highest peaks in Mongolia and many glaciers located in the shadows of these mountains. The melting snow of the Altai mountains supplies several lakes and rivers, including the longest in Mongolia, the Hovd River. There are 3 large fresh water lakes inside Tavan Bogd; Khurgan Nuur, Khoten Nuur, and Dayan Nuur that form the origin of the Khovd River. Another large lake is treeless Tolbo Lake in the southeast, which stretches several miles along the road to Hovd. The largest lake is Achit Nuur on the border with Uvs. This lake is just north of the heavily forested Davit Aral Nature Reserve and is home to very large number of birds. Away from the river valleys, Bayan-Ulgii is generally dry and rocky with some grassy steppe.

107 c. Khovd Aimag

215. Khovd Aimag with Jargalant center has an immense area that embraces Mongolian Altai Mountains, great lakes depression and northern Altai gobi. In the western side it borders with the People's Republic of China, in northwest with Bayan-Ulgii, in east and north east with Zavkhan, and in the southern side borders with Govi-Altai Aimag. The total length of the border is 1,522km. From north to south it is 453km, from east to west is 249km and is located at approximately 2,230m above sea level. Khovd Aimag has many snow peak mountain ranges like Tsambagarav, Darvi, Baatar, Khukh Serkh Range, Munkh Khairkhan, Jargalant, Sutai, Myangan Ugalzat, and Altan Khukhii and 20% of the Aimag territory consists of Gobi desert areas.

2. Geology

216. The project area in the Western three Aimags is situated in the Mongol Altai high mountainous area. The geological setting of this territory began to form in the Cambrian Period, when the rocks were folded and faulted as the Mongolian and Siberian cratons collided in the Paleozoic and Mesozoic eras. Granite rocks dominate the high peaks.

217. The Altai Mountains were formed mostly by Paleozoic rocks of intrusive complex, comprised of granite-granodiorite, granite. In Khovd Aimag, gabbro, granite, diorite, granodiorite rock deposits were found, along with a metamorphic massif underlying the Bodonch Canyon Mountains. Mountainous areas of Khovd Aimag form sedimentary rocks from the early Cambrian period, in the southern parts of Khovd Aimag sedimentary rocks from quaternary period are widely spread. Khovd Aimag is reach in natural and contraction mineral materials such as coal (Khundlun), mica (Bodonch), crystal (Ooshigiin Us, Tsagaantolgoi).

218. According to the geo-morphological map of Mongolia, the terrain primarily includes excessive rolling ranges, medium rolling ranges and mountains, slight rolling ranges of sloped structure, mountainous ravines, semi-level surfaces of mountain skirts, glacial valleys, mountains with sharp ridged peaks, alluvial lake valleys, delluvial - prolluvial and mountain river valleys.26

3. Soil

219. The following soil types have been identified in Western Region of Mongolia where the Project is located (Figure 28):

(i) Mountain tundra ochro, peaty-gleye, and cryoturabated (destructed) soil is mainly spread out in the area of Altai Mountain above 3,000-3,200 m. Sand, gravel and bare rocks mostly cover the soil surface. In areas with sparse vegetation, the soil is dense and is formed by sediment of moraine sand, gravel and cobble stone. The soil is very stony and the concentration of clastic rock increases up to 80% at deeper depths.

(ii) Mountain meadow and meadow steppe soils are distributed in the humid area of the northern portion of the Mongolian–Altai Mountain and in depths in the Altai Mountains.

(iii) Soil forming sediment is eluvial-diluvial gravel sediment and moraine rocky sediment. Thus, the soil content is clastic rocky and plant roots are able to get into

26 Government of Mongolia. 2007. EIA. Ulaanbaatar.

108 the soil between rocks. Because it has moraine sediment, there is heavy loamy soil with huge cobblestones; below 70 cm depth these huge cobblestones are mostly found.

(iv) Mountain steppe soils extend in the Altai Mountains area with an altitude between 2,400 m to 2,500 m and 2,900 m to 3,000 m. The soil surface is gravel floored with scattered vegetation cover. From soil surface to a depth of 40-50 cm, the soil is sandy, gravelly, pebbly, and stony.

(v) Mountain desert steppe and desert soils are spread in the southern border of the Altai Mountains with altitudes between 1,500 m to 1,600 m and 2,400 m to 2,500 m. The soils are semi-desert brown soil and desert gray brown soil.

Figure 28: Soil Types In Western Aimags

Source: Asian Development Bank.

4. Climate

a. Uvs Aimag

220. Annual average precipitation in Uvs Aimag is 135.3mm. Atmospheric pressure is 923.9 hPa in January and 901.9 hPa in July. Northern hemisphere winter high-pressure zone forms in low lands of the Uvs and Khyargas lakes. January average temperature is -17°C to -25.5°C and average July temperature is 16.5°C. Average wind speed is 4.5m/sec. May is the windiest month of the year. The wind speed can reach 2.3m/sec in May. The maximum temperature can reach up to +35°C and minimum temperature can drop down to -40°C. Spring and fall seasons last relatively long, 120 to 160 days.

109 Table 23: Climate Data For Ulaangom, Uvs Aimag

Source: Long term data of Uvs Aimag meteorological department and climate data of en.climate-data.org.

221. Annual average air temperature in the center of Uvs Aimag Ulaangom Soum is -3.8°C, January average is -33°C and July average is +19.2°C. Ulaangom is one of the places in Mongolia that experiences the coldest winter, the minimum ever recorded temperature was - 50°C, the maximum ever recorded temperature was +36.4°C.

Table 24: Climate Data For Umnugovi Soum, Uvs Aimag

Source: Asian Development Bank.

222. Climate in Umnugovi Soum center, which is located in about 110 km south from Ulaangom is rather milder compared to its Aimag center, because of its geographic location far from Uvs Lake. The Lake in cold area is the driven force for a severe cold climate during the winter and spring. Average annual air temperature in Umnugovi is – 0.56 degrees of Celsius, which is different by 25 0C of average annual air temperature of Ulaangom.

b. Bayan-Ulgii

223. The mountainous areas of the Aimag receive 200mm to 400mm (7.8 to 15.7 in) of rain annually, while lower elevations of the Khovd River valley receives 100mm to 200mm (3.9 to 7.8 in) of rain. Average annual temperatures range from -4o C (+25o F) in the Tavan Bogd Mountains to 0o C (+320 F) in Ulgii Soum, with temperatures in Ulgii varying from +14.5oC (+57o F) in July to -17.8o C (+2o F) in January.

110 Table 25: Climate Data For Ulgii, Bayan-Ulgii Aimag

Source: Asian Development Bank.

224. Even though Ulgii is at a higher elevation than Ulaanbaatar, the dry air and wide valley makes the soum 5o to 6o C warmer during winter. Over half of the rain is in June and July, while some mountainous areas can get over a meter of snow during winter. Rivers and lakes are usually frozen from October to May.

Table 26: Climate Data For Deluun Soum, Bayan-Ulgii Aimag

Source: Asian Development Bank.

225. As Deluun soum is located at comparatively high altitude of 2140-2300 m above sea level, climate is rather colder throughout the year with average of -1.83 degrees of Celsius. December, January and February are coldest months and with average monthly air temperatures ranging from -18.99 to - 21.74 °C. Starting from April average air temperature gets above zero with warmer climate through June, July and August with returning to below zero by the end of September.

c. Khovd Aimag

226. Khovd Aimag experiences a continental climate. Summer temperature reaches +40°C, but winter temperature drops down to -30°C. Relatively dry. Average precipitation is 120-140mm, average temperature of January is -17°C - (-25.5)°C, average temperature of July is +16.5°C, the speed of wind reaches 4.5m/sec, during the coldest season the temperature drops down to -40°C, the warmest season reaches +35°C, the highest recorded speed of the wind was 1.0m/sec. Spring and fall seasons are comparatively long with 120 to 160 days respectively.

111 Table 27: Climate Data For Jargalant, Khovd Aimag

Source: Asian Development Bank.

5. Air quality

227. The National Environmental Action Plan (NEAP) 2000 refers to air pollution as among the pressing environmental and natural resource issues confronting Mongolia. Major sources of air pollution in the largest centers such as Ulaanbaatar include (i) vehicle emissions; (ii) emissions from boilers and power plants; (iii) emissions from burning coal, wood and/or garbage/plastics in household heating stoves; (iv) dry land, eroded soil and unpaved roads; (v) forest fires; and (vi) solid waste disposal sites. Air quality in Ulaangom is shown in Tables 28 and 29.

Table 28: Air Quality In Ulaangom, Uvs Aimag Center

№ Air Year/Mean Annual Concentration quality elements /AL*

unit 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1 SO2/20 ------3 3 4 3 3 4 4 4 6 7 6

2 NO2/40 3 ------26 27 25 27 31 33 35 35 32 26 24 мkg/м 3 TSP/100 ------78 64 64 68 61

Remarks: *-Acceptable max level of pollutants (mean annual) by National Standard on Air Quality MNS4585:2016.

112 Table 29: Air Quality In Ulaangom, Uvs Aimag

(Original data collected for ASDIP, 24 Sep 2019) Sampling Location of air SO NO PM10*** No. time 2 2 sampling µg/m3 µg/m3 µg/m3

1 Aimag Met office 08:00 AM 3 36 - 2 Aimag Met office 08:00 PM 8 47 - National air quality standard 450* 200* 100** MNS 4585:2016 Remarks: *-Acceptable max level of SO2 and NO2 (mean 20 min) and ** -Acceptable max level of PM10 for 24 hours by National Standard on Air Quality MNS4585:2016 *** - no equipment is available to measure dust in Aimag Met department.

Table 30: Air Quality in Ulgii, Bayan-Ulgii Aimag Center 2002-2018

№ Air quality year/ mean annual concentration elements/ AL*

Unit 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1 SO2/20 2 2 1 0.0 0.0 1 3 5 3 6 12 13 12 7 5 8 9

2 NO2/40 3 8 6 3 2 2 3 8 19 18 24 29 30 29 23 15 13 19 мkg/м 3 TSP/100 ------93 172 139 157 184 111 260 340 481 744

Remarks: *-Acceptable max level of pollutants (mean annual) by National Standard on Air Quality MNS4585:2016.

Table 31: Air Quality In Ulgii Soum Of Bayan Ulgii Aimag

(Original data collected for ASDIP on the day of 20 Sep 2019) Sampling Location of air SO NO PM10 No. time 2 2 sampling µg/m3 µg/m3 µg/m3***

1 Aimag MET office 08:00 AM 2 15 - 2 Aimag MET office 08:00 PM 0 21 - National Air quality standard 450* 200* 100** MNS 4585:2016 Remarks: *-Acceptable max level of SO2 and NO2 (mean 20 min) and ** -Acceptable max level of PM10 for 24 hours by National Standard on Air Quality MNS4585:2016 *** - no equipment is available to measure dust in Aimag MET department.

113

Table 32: Air Quality In Jargalant, Khovd Aimag Center (last 17 years)

№ Air year/ mean annual concentration quality elements /AL*

unit 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

1 SO2/20 - - 2 4 6 5 4 2 4 4 9 8 9 6 9 9 9

2 NO2/40 3 - - 29 34 53 51 32 13 16 16 28 29 31 28 31 32 29 мkg/м 3 TSP/100 ------120 133 325 388 280 246 120 173 195 193

Remarks: *-Acceptable max level of pollutants (mean annual) by National Standard on Air Quality MNS4585:2016.

Table 33: Air Quality In Jargalant Soum, Khovd Aimag

(Original data collected for ASDIP on the day of 19 Sep 2019) Sampling Location of air SO NO PM10 No. time 2 2 sampling µg/m3 µg/m3 µg/m3

1 Aimag MET office 08:00 AM 11 4 38 2 Aimag MET office 08:00 PM 4 34 31 National Air quality standard 450* 200* 100** MNS 4585:2016 Source:Khovd Meteorological department Remarks: *-Acceptable max level of SO2 and NO2 (mean 20 min) and ** -Acceptable max level of PM10 for 24 hours by National Standard on Air Quality MNS4585:2016.

228. Neither air quality data, or air quality stations exists at the soum level. Therefore, there is no air quality information for project soums of Deluun of Bayan-Ulgii and Umnugovi of Uvs Aimag. National and international (WHO) air quality standards are summarized in Table 34. For completeness national and WHO industrial air emission standards are listed in Table 35.

114 Table 34: National And International Ambient Air Quality Standards

Source: Asian Development Bank.

Table 35: Boiler Emission National Standard and WHO Guidelines

Parameter Concentration (in mg/Nm3) MNS 6298:2011 WHO EHS Guidelines* 400 urban 3 3 SO2 mg/m mg/Nm 2000 600 remote areas 450-1,100 3 3 NOx mg/m based on volatile mg/Nm 650 coal

PM mg/m3 50-200 mg/Nm3 50-150

Dry Gas Excess O2 - - % 6 content * Small Combustible Facilities Emission Guidelines (3MWth-50MWth) – for Boilers using solid fuel NWth-Megawatt thermal Nm3 is at one atmospheric pressure, 0°C. Source: Asian Development Bank.

115 6. Noise

229. Noise levels were measured in the three Aimag centers during the environmental survey period of 16-25 September 2019 for every three hours in 24 hours (total 8 measurements in each of Aimag centers). The measured noise levels in the three Aimag centers are summarized in Tables 36-38 and Figures 29-31.

Table 36: Ambient Noise In Jargalant Of Khovd Aimag

Reading, MNS No Date Time dB 4585:2007 1 9/16/2019 21:30 49.2 60 2 9/17/2019 00:30 47.0 45 3 9/17/2019 03:30 41.3 45 4 9/17/2019 6:30 34.0 45 5 9/17/2019 9:30 50.2 60 6 9/17/2019 12:30 45.4 60 7 9/17/2019 14:30 47.8 60 8 9/17/2019 18:30 56.8 60 9 9/17/2019 21:30 50.7 60 Source: Asian Development Bank.

Figure 29: Noise Levels In Jargalant

Noise level in Jargalant, Khovd Aimag, dBA

70 60 50 40 30 20 10 0 21:30 0:30 3:30 6:30 9:30 12:30 14:30 18:30 21:30 9/16/20199/17/20199/17/20199/17/20199/17/20199/17/20199/17/20199/17/20199/17/2019

Reading, dB MNS 4585:2007

Source: Asian Development Bank.

116 Table 37: Ambient Noise In Ulaangom Of Uvs Aimag

Reading, MNS No Date Time dB 4585:2007 1 9/22/2019 15:30 56.4 60 2 9/22/2019 18:30 61.0 60 3 9/22/2019 21:30 58.4 60 4 9/22/2019 00:30 40.0 45 5 9/22/2019 03:30 35.3 45 6 9/23/2019 06:30 45.2 45 7 9/23/2019 09:30 50.3 60 8 9/23/2019 12:30 64.4 60 9 9/23/2019 15:30 61.1 60 Source: Asian Development Bank.

Figure 30: Noise Levels In Ulaangom

Noise Level in Ulaangom, Uvs Aimag, dBA

70 60 50 40 30 20 10 0 15:30 18:30 21:30 0:30 3:30 6:30 9:30 12:30 15:30 9/22/2019 9/22/2019 9/22/2019 9/22/2019 9/22/2019 9/23/2019 9/23/2019 9/23/2019 9/23/2019

Reading, dB MNS 4585:2007

Source: Asian Development Bank.

Table 38: Ambient Noise In Ulgii Of Bayan-Ulgii Aimag

Reading, MNS No Date Time dB 4585:2007 1 9/20/2019 09:00 58.8 60 2 9/20/2019 12:00 64.7 60 3 9/20/2019 15:00 63.0 60 4 9/20/2019 18:00 58.8 60 5 9/20/2019 21:00 71.5 60 6 9/21/2019 00:00 41.1 45

117 Reading, MNS No Date Time dB 4585:2007 7 9/21/2019 3:00 41.2 45 8 9/21/2019 6:00 40.3 45 9 9/21/2019 9:00 51.5 60 Source: Asian Development Bank.

Figure 31: Noise Levels In Ulgii

Noise Level in Ulgii, Bayan-Ulgii Aimag, dBA (20 -21 September 2019) 80 70 60 50 40 30 20 10 0 9:00 12:00 15:00 18:00 21:00 0:00 3:00 6:00 9:00

Reading, dB MNS 4585:2007

Source: Asian Development Bank.

230. Noise levels compared to the Mongolian standard MNS4585:2007 indicate that the highest noise level within three Aimag centers was 71.5 dBA at 21.00 in Ulgii of Bayan-Ulgii Aimag, which is 11.5 dBA above the precaution level. Noise level in three instances in Ulgii exceeded the acceptable level (higher 3-11.5 dBA) out of 8 noise measurements. Approximately 50% or 4 noise measurements in Ulaangom of Uvs Aimag were above (0.2-4.4dBA higher) the acceptable noise level. However, the 8 noise measurements in Jargalant of Khovd Aimag were within acceptable levels.

231. In the project areas noise is caused by a combination of wind and from vehicles and machinery. Noise level is determined by the duration of the noise. Thus, during the construction phase of the project a noise mitigation plan should focus on noise duration.

232. During the site visits to Deluun soum of Bayan-Ulgii Aimag and Umnugovi soum of Uvs Aimag the environmental survey team observed that these human settlements were very quiet and with much less vehicle traffic and industrial activities than the Aimag centers, which were major sources of noise disturbances in those urban areas. Therefore, noise measurements were not conducted in the soum centers.

7. Water Resources

233. Mongolia is well endowed with surface and ground water resources. There are some 3,000

118 rivers in total with a combined length of 67,000 km. There are also over 3,000 large and small lakes, 6,900 springs, 190 glaciers and 250 mineral water springs. The water resources of western Mongolia are relatively rich.

234. The Great Lakes Depression is a large semi-arid depression in the West and Northwest of Mongolia bounded by the Altai, Khangai, and Tagna-Uul Mountains. It has an area over 100,000 km2 and the elevation is from 750 to 2,000 m. It contains six major Mongolian lakes Uvs Nuur, Khar-Us Nuur, Khyargas Nuur, Khar Nuur, Airag Nuur, and Durgun Nuur, as well as a number of smaller ones. The major rivers are Khovd, Zavkhan, Tes, Buyant, Kharkiraa, and Turgen. The Great Lakes Depression is also a major freshwater basin of Mongolia and contains some of the important wetlands of Central Asia comprising a system of interconnected shallow lakes with wide reed belts within a generally desert steppe.

235. Water resources are one of Mongolia’s most valuable assets and they require protection and management. According to estimates, the aggregate water resources in Mongolia amount to 599 km³ of which 500 km3 of water is contained in lakes, 62.9 km3 – in glaciers, and 34.6 km3 – in rivers and their underground basins.27

236. Water resources of the western part of Mongolia are represented by surface water (rivers, springs and lakes) and groundwater (Table 39 and Figure 32). The project area is located in the Central Asian Non-Outflow River Basin. The most recent census of water bodies was conducted in 2017 and 2018. Table 26 summarizes water resources census data of Khovd, Uvs and Bayan- Olgii Aimags.

Table 39: Number Of Rivers, Springs, And Lakes In Khovd, Uvs And Bayan-Ulgii Aimags

Name of Rivers Springs Mineral water Lakes Aimag Total Dried Total Dried Total Dried Total Dried Bayan-Olgii 421 0 979 0 27 0 1249 0 Khovd 208 8 485 117 25 2 119 0 Uvs 215 0 555 0 36 0 78 29 Source: Aimag Environmental Departments of Bayan-Ulgii, Khovd and Uvs 2019.

237. Khovd Aimag has big rivers such as the Khovd, Buyant, Bulgan, Chonokharaikh, and Tsenkher rivers. Khovd Aimag also supports large lakes such as the Khar-Us, Khar, Durgun lakes, and springs such as Nevtiin, Bulgany, Indertiin. Other crystal clear fresh water lakes are exemplified by the Tsetseg, Khukh Serkh, Buurug, Shavagt, Kholboo, and Khukh lakes along with some other 300 rivers and streams.

238. Uvs Aimag also supports much surface water including the lakes of Uvs, Khyargas, Airag, Achit, Uureg, and Duruu as well as the large rivers of Tes, Khovd, Kharkiraa, Turgen, Khnagiltsag, Turuun and Zavkhan. There are 38 rivers and streams that drain to Uvs Lake alone.

239. Bayan-Ulgii Aimag supports about 80 big and small lakes including the freshwater lakes Dayan, Khoton, Achit and Khorgo. Tolbo and Achit. Some of these lakes also support commercial fish resources. Over 100 rivers exist in the Aimag including the Khovd, Tsagaan, Sogoog, Yolt, Sagsai, Bulgan, Gantsmod and Buhmurun rivers. There are more than 200 springs in this Aimag.

27 Government of Mongolia. 2007. EIA. Ulaanbaatar.

119

a. Project area rivers

240. The rivers in the project area originate from the Altai Mountains. Thus, the upstream and midstream areas are narrow valleys and canyons; flood plains are not formed in this area but are clearly formed downstream. Alluvial meadow gleyey soil is formed under the humid conditions of the main floodplain and one of the water sources is permafrost thawing. Groundwater is primarily located at soil depths of 90–160 cm, with soil having 100% vegetation cover. As a result the mull- humic dominates in the soil. The description of the major rivers in the project area is provided below.

Figure 32: Surface Waters Of Western Aimag Project Areas

Source: Asian Development Bank.

i. Khovd River System

241. The length of the Khovd river which flows through Ulgii of Bayan-Ulgii Aimag is 516 km

120 and its general width is 100–120 m. The river originates at south-east glacier of the Tavan Bogd, the highest peak of Mongol-Altai mountain, and the dominant source of river flow is melted ice and snow. Within the Khovd watershed area of 58,000 km2, the tributary rivers are the Tsagaan, Sogoot, Sagsai, and further downstream the Buyant River. The main lakes, which discharge their excess water into Khovd River are the Tolbo, Dayan, and Achit. The waters of the Khovd River finally flow through lakes Khar-Us and Dalai and the connecting Chonokharaikh River into the Khar Lake. The annual mean discharge of the river is 60.1 m3/s in its upper reach (at Ulgii), 63m3/s in the middle reach (at Bayannuur), and 90m3/s at its inflow into the Khar-Us Lake (at Miyangad). The absolute maximum discharge was 284 m3/s on 5 May 2002 and absolute minimum discharge -14.2 m3/s on 25 May 1983 (at Ulgii). The water level reached 6 m in 1993 at Bayannuur post.

ii. Buyant River System

242. The length of the Buyant river which flows through Jargalant of Khovd Aimag is 171 km. Originating in the Mongol-Altai Mountains and Huh Serkhiyn Mountain, this body of water runs through the northern part of the Khovd town. It is a tributary of the Khovd River, which flows into the Khar Us Lake. If the discharge of the river is less than 6 m3/s, the river’s waters will not reach Khovd River. The annual mean discharge of the river is 5.9m3/s in its downstream (at Khovd town).

iii. Kharkiraa River System.

243. The Kharkiraa river from which the Gashun river tributary flows through Ulaangom of Uvs Aimag rests in the Uvs Lake - Central Asian Internal Drainage Basin and takes its origin from snow and glaciers at an altitude of 3,078 m above the sea level. its length is 126.5 km, the catchment area is 3,332.7 km2. Average width of the upper stream is 10-30m, depth is 0.25-0.5m and flow velocity is 1.0-1.5 m. The Kharkiraa river comes out from the mountain near Tarialan soum, branching to three rivers of Kharikhiraa, Teel and Gashuun. The river channel and flood plain expand further splitting off many tributary channels, where main channel is no longer recognizable. At 756m elevation the Teel river tributary drains to Uvs lake.

b. Seasonal river discharge and flooding.

244. Spring floods in the project rivers generally start in the middle of April, with peak flow occurring in late June and continuing for 110–150 days. The spring flood flow is 60–90 percent of total annual flow of Altai Mountain Rivers. The summer is the flood period because rainfall runoff combines with the spring flood of Mongol Altai Mountain Rivers. Regardless, the main source of water is from melting snow and glaciers. Table 40 presents available data that estimates maximum, minimum, and average flow rates for the major rivers in the project areas.

245. Among the five project urban areas, Ulgii, Jargalant and Ulaangom Aimag centers are prone to flash flooding during the summer times after intensive rainfalls due to their specific geographic locations surrounded by high mountains with deep slopes towards the urban centers. As examples, a 30-minute intensive rainfall in July 10 of 2016 caused flash flooding in Ulgii of Bayan-Ulgii that brought severe damage to private and public property. Another flash flood occurred during July 14-16, 2018, which forced the evacuation of 2,512 people of 530 households causing damage to private and public property. On July 4, 2018, an intensive rainfall caused flash flooding in the eastern part of in Jargalant. Run-off water of this rainfall event originating from the eastern high mountain area inundated central solid waste dumpsite and ger areas conveying garbage throughout private properties and into the Buyant River causing pollution to be carried downstream to Khar-Us Lake – a highly valued National Park of Mongolia.

121 Table 40: Available Discharge (m3/sec) Data of Rivers Near Project Sites

Monitoring 2014 2015 2016 2017 2018 station/years Avg Max Min Avg Max Min Avg Max Min Avg Max Min Avg Max Min

Khovd river 62.9 342 33.8 65.6 302 41.2 77.5 401 39 66.4 296 35.7 80 387 41.2 near Ulgii Buyant* and Chigertei 1.63 2.68 0.58 2.69 4.2 1.18 3.31 5.19 1.43 2.63 3.08 2.18 3.88 6.86 0.90 rivers near Deluun Buyant river in Khovd 8.31 63 7.56 10.5 89.2 6.06 10.2 65.9 3.92 8.78 58.4 5.56 7.41 48.6 6.06 Aimag Kharkiraa river in 1.93 16.1 0.75 2.18 13.26 0.57 3.166 23.21 0.3 2.55 9.25 1.18 2.2 7.96 0.87 Tarilan soum Namir river* near 0.88 1.27 0.5 0.88 1.27 0.5 0.88 1.27 0.5 0.5 1.27 0.5 0.88 1.27 0.5 Umnugovi soum Remarks: * - estimates included for some years due to lack of data Avg – Average; Max – Maximum; Min – Minimum. Source: Meteorological departments of Western Aimags, 2019.

246. Note that permanent discharge gauge stations in western Mongolia rivers are very few in number. For instance, a station on Kharkiraa river is located only upstream of project area near Tarialan soum and not in downstream tributaries of Teel Gol and Gashun rivers at which the project sites in Uvs Aimag are located. The gauge station in Umnugovi soum is located on Namir River a tributary of Orlogo River, which does not represent discharge of Orlogo River at which the project is located. At detailed design stage, seasonal river discharge (low flow conditions) needs to be determined at the locations in the rivers which will be affected by the project.

c. Water Quality Monitoring

247. Surface water quality in ASDIP project sites was assessed using available data from Aimag Departments of Meteorology and Environmental Monitoring, and from original sampling that was conducted by the environmental team for ASDIP. Noteworthy, is ambient surface water quality in the project rivers, and at the project sites is very good and meets national water quality standards. (Table 41).

248. Water quality in Uvs Aimag is derived from water sampling conducted in Gashuun River upstream and downstream of Ulaangom urban area. Water quality Khovd river which flows through Ulgii was sampled upstream and downstream of the city. Similarly, water quality was sampled in Buyant river upstream and downstream of Jargalant. Figures 33–37 summarize the water quality at the sites.

122 Figure 33: BOD5 and pH levels in Gashuun River at Ulaangom

Annual Average BOD Content of Gashuun River Water in Ulaangom City, 2013-2018 ₅ 3 2.5 2 1.5 1 0.5 0 upstream upstream upstream upstream upstream upstream downstream downstream downstream downstream downstream downstream 2013 2014 2015 2016 2017 2018

Annual Average pH Content of Gashuun River Water in Ulaangom City, 2013-2018

8.6 8.4 8.2 8 7.8 7.6 7.4 upstream upstream upstream upstream upstream upstream downstream downstream downstream downstream downstream downstream 2013 2014 2015 2016 2017 2018

Source: Asian Development Bank.

123 Figure 34: Nutrient and pH levels in Namir River, Umnugovi Soum

Annual average pH level of Namir River Water in Umnugovi soum, 2013-2018

8.3 8.2 8.2 8.1 8.04 8 7.9 7.8 7.8 7.8 7.7 7.7 7.7 7.6 7.5 7.4 2013 2014 2015 2016 2017 2018

Annual Average NH4 and NO3 Content of Namir River Water in Umnugovi soum, 2013-2018 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2013 2014 2015 2016 2017 2018

NH4 NO3

Source: Asian Development Bank.

124 Figure 35: Nutrient and pH Levels in Khovd River at Ulgii

Annual Average pH Content of Khovd River Water in Ulgii City, 2013-2018 7.7 7.6 7.5 7.4 7.3 7.2 7.1 7 6.9 6.8 upstream upstream upstream upstream upstream upstream Downstream Downstream Downstream Downstream Downstream Downstream 2013 2014 2015 2016 2017 2018

Average annual NH4 and NO3 content in Khovd River Flow in Ulgii City , 2013-2018

0.60 0.50 0.40 0.30 0.20 0.10 0.00 upstream upstream upstream upstream upstream upstream Downstream Downstream Downstream Downstream Downstream Downstream 2013 2014 2015 2016 2017 2018

NH4, mg/l NO3, mg/l

Source: Asian Development Bank.

125 Figure 36: Nutrient, pH, and BOD5 Levels in Buyant River at Jargalant

Average annual NH4 and NO3 content in Buyant River Flow in Hovd City , 2013-2018

0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 upstream upstream upstream upstream upstream upstream downstream downstream downstream downstream downstream downstream 2013 2014 2015 2016 2017 2018 NH4,mg/l NO3 mg/l

Average annual pH and BOD content in Buyant River Flow in Hovd City , 2013-2018 ₅ 9 8 7 6 5 4 3 2 1 0 upstream upstream upstream upstream upstream upstream downstream downstream downstream downstream downstream downstream 2013 2014 2015 2016 2017 2018

pH BOD

Source: Asian Development Bank. ₅

126 Figure 37: Nutrient and pH Levels in Deluun Soum, Bayan-Ulgii Aimag

Average annual pH levels in Buyant river near Deluun, Bayan-Ulgii 7.6 7.5 7.5 7.4 7.4 7.3 7.3 7.2 7.1 7.03 7 6.9 6.9 6.9 6.8 6.7 6.6 2013 2014 2015 2016 2017 2018

Average annual NH4, and NO3 levels in Buyant river near Deluun, Bayan-Ulgii 2.5

1.5

0.5

0 2013 2014 2015 2016 2017 2018

NH4 NO3

Source: Asian Development Bank.

Table 41: Mongolia Surface Water Quality Standards

Parameter MNS 4586-98 pH 6.5-8.5 DO mg0/l Not less than 6.4* BOD mg0/l 3 NH4-N mgN/l 0.5 NO2-N mgN/l 0.002 PO3-P mgP/l 9 PO4-P mgP/l 0.1 Cl mg/l 300

127 Parameter MNS 4586-98

F mg/l 1.5 SO4 mg/l 100 Mn mg/l 0.1 Ni mg/l 0.01 Cu mg/l 0.01 Mo mg/l 0.25 Cd mg/l 0.005 Co mg/l 0.01 Pb mg/l 0.01 As mg/l 0.01 Cr mg/l 0.05 Cr5+ mg/l 0.01 Zn mg/l 0.01 Hg mg/l 0.1 Oil mg/l 0.05 Phenol mg/l 0.001 Active and washing mg/l 0.1 substances Benzapyren Mkg/l 0.005 *DO>6 mgO/l for summer time and DO>4 mgO/l for winter time. Source: Asian Development Bank.

d. Water bacteria study

249. Water bacteriology samples were taken by local professional team of experts that conducted environmental survey during 16-25 Sept 2019 period in upstream and downstream of rivers that flow through each of 5 ASDIP project sites. Tests were analyzed at accredited laboratories of Aimag Specialized Inspection Departments that are located in each of Aimag centers. Analysis were carried out using MNS900:2005, MNS ISO 9308-1-1998, MNS ISO 6461- 2:1998 and MNS ISO 19250:2017 methodologies. Study defines the total number of bacteria abdominal microorganisms, anaerobe microorganisms and pathogens.

i. Ulaangom, Uvs Aimag

250. Kharkiraa river, is the main river in Ulaangom which begins in the western Kharikhiraa mountain range which eventually splits into many tributaries including the Gashun river which flows through Ulaangom. Only the Teel Gol river of 3-4 tributaries reaches the Uvs Lake. Bacteria sampling and analysis were done in upstream Kharkiraa river, and in the Gashuun river in Ulaangom and other tributaries downstream defined by Gun Bukh, Shar Gesen, Tsalgar and Khundlun rivers. Bacteria levels of Kharkiraa river are summarized in Table 42.

128 Table 42: Bacteria Levels In Kharkiraa River And Tributaries Of Ulaangom

(Date of sampling and analysis: 23-30 Sept, 2019)

Indicators Name and location of Sample # sampling sites Number of Gut floras Aerotolerants bacteria Kharkiraa River upstream next to 1 54 E.coli- detected Not detected Children’s campus Kharkiraa River upstream, 2 Tsatsaa Shireg 0 Not detected Not detected

3 Upstream of Gashuun River 104 E.coli- detected Not detected

4 Downstream of Gashuun River 164 E.coli- detected Not detected

5 Gunbukh river 95 E.coli- detected Not detected

6 Shar Gesen river 80 Not detected Not detected

7 Tsalgar river 65 E.coli- detected Not detected

8 Khundlun river 85 E.coli- detected Not detected

9 Ulaan –uul Spring 18 Not detected Not detected

10 Chuluut Spring 3 Not detected Not detected

Source: Asian Development Bank.

251. The data in Table 42 indicate that Gashuun, Gunbukh, Tsalgar, Khundlun tributaries are polluted with E.coli, including upstream of Kharkiraa River in location next to children’s summer campus. Bacteria counts exceeded the MNS900-2005 standard requirement of 100, in upstream and downstream of Gashuun river. Water quality was within acceptable level of bacteria in other tributaries of Kharkiraa. The source of bacteria is most likely untreated domestic wastewater, and from grazing livestock.

ii. Umnugovi, Uvs Aimag

252. Bacteria sampling was conducted in two locations in Namir River which flows through Umnugovi soum center and discharges into Khar Lake (Table 43).

129 Table 43: Bacteriology Levels In Namir River Upstream And Downstream Of Umnugovi

(Date of sampling and analysis: 23-30 Sept, 2019)

Indicators

Name and location of Number of Sample # Gut floras Aerotolerants sampling sites bacteria Undetectable Undetectable 100 MNS ISO 9308-1- MNS ISO MNS 900-2005 1998 19250:2017 Namir river upstream of Umnugovi soum center 1 130 E.coli- detected Not detected N490 6‘38” E910 41‘ 46” Namir river downstream of Umnugovi soum center 2 70 Not detected Not detected N490 6‘28” E910 44‘ 1” Source: Asian Development Bank.

iii. Ulgii, Bayan-Ulgii Aimag

253. Bacteria levels in Khovd river upstream and downstream of Ulgii are summarized in Table 44. Bacteria counts in Khovd river downstream water in Ulgii were equal to acceptable levels for surface waters. All indicators were within the standard requirements

Table 44: Bacteria Levels In Khovd River Upstream And Downstream Of Ulgii.

(Date of sampling and analysis: 2-5 Oct, 2019) Indicators

Site name and Number of Gut floras Aerotolerants Pathogens coordinates bacteria 100 Undetectable Undetectable Undetectable MNS 900- MNS ISO 9308- MNS ISO 6461- MNS ISO 2005 1-1998 2:1998 19250:2017 Khovd river upstream of Ulgii E.coli not Not detected at 470 57 ‘58” 85 Not detected detected 100ml 890 53‘ 28”

Khovd river downstream of Ulgii E.coli not Not detected at 480 57 ‘42” <100 Not detected detected 100ml 890 59‘ 42”

Source: Asian Development Bank.

130 iv. Deluun soum, Bayan-Ulgii Aimag

254. Table 45 indicates bacteria levels in river at Deluun soum meet surface water standards.

Table 45: Bacteria Levels In Chigertei River Upstream And Downstream Of Deluun

(Date of sampling and analysis: 2-5 Oct, 2019) Indicators

Site name and Number of Gut floras Aerotolerants Pathogens coordinates bacteria 100 Undetectable Undetectable Undetectable MNS 900- MNS ISO 9308- MNS ISO 6461- MNS ISO 2005 1-1998 2:1998 19250:2017 Chigertei River upstream of Deluun E.coli not Not detected at 450 50 ‘7” 40 Not detected detected 100ml 900 40‘ 54”

Chigertei River downstream of Deluun E.coli not Not detected at 80 Not detected 470 49 ‘59” detected 100ml 900 53‘ 28”

Source: Asian Development Bank.

v. Jargalant, Khovd Aimag

255. Bacteria levels in Buyant river at Jargalant and in the water from the famous Bogoch Spring are low and meet water quality standards.

Table 46: Bacteria Levels In Buyant River In Jargalant, Khovd Aimag

(Date of sampling and analysis 18-20 Sept, 2019)

Indicators

Site name and Number of Gut floras Aerotolerants Pathogens coordinates bacteria 100 Undetectable Undetectable Undetectable MNS 900- MNS ISO 9308- MNS ISO 6461- MNS ISO 2005 1-1998 2:1998 19250:2017 Spring Bogoch Spring 48.029487 <100 E.coli detected Not detected Not detected at 25ml 91.6535

Buyant River upstream of <100 E.coli detected Not detected Not detected at 25ml Jargalant 470 58 ‘29”

131 Indicators

Buyant River downstream of Jargalant <100 E.coli detected Not detected Not detected at 25ml 470 57 ‘27” 1060 49‘ 34”

Source: Asian Development Bank.

e. Heavy metal content in rivers at ASDIP sites

256. Heavy metals were sampled upstream and downstream of the ASDIP five urban centers during the environmental survey in 15-25 September 2019. Sampling methodology followed MNS 230594-1995 requirements. Two samples in each of urban site for a total of 10 samples were taken for heavy metal content. Metals were analyzed employing ICP80T and IMS80T methods in an accredited laboratory “SGS IMME Mongolia LLC” in Ulaanbaatar city. The metal content in the rivers near the project sites are provided in Table 47.

257. At all ASDIP sites only one industry uses toxic chemicals which is the tannery in Ulaangom of Uvs Aimag. It extensively uses chromium (Cr3) for processing of animal hides and lab results of the sampled wastewater from the tannery shows high pollution of heavy metals, including chromium (total), arsenic and nitrogen. Heavy metal concentrations in the effluent of the tannery are summarized in Table 48.

Table 47: Heavy Metal Content In Five Rivers At ASDIP Project Areas.

Heavy Metals (µg/l) Location info of Sampling No. samplings date Ni Mo As U Pb Fe Buyant river upstream in 17 Sep 1 Jargalant 0.6 2.8 1.27 1.44 <0.5 <50 2019 N47058’29”; E910 34’25”. Buyant river Downstream in 17 Sep 2 Jargalant 0.7 2.9 1.25 1.64 <0.5 <50 2019 N4806’2.44”; E910 41’52.02”. Bogoch Spring in Jargalant 17 Sep 3 2.8 8.0 1.40 14.4 <0.5 <50 N4801’13”; E910 2019 39’12”.

132 Chigertei river upstream of 18 Sep 4 Deluun, <0.3 2.4 0.54 0.92 <0.5 <50 2019 N45050’7”; E900 40’54”. Chigertei river downstream, of 18 Sep 5 Deluun, <0.3 5.6 0.63 1.20 <0.5 <50 2019 N47049’59”; E900 43’55”. Khovd river 20 Sep upstream of Ulgii, 6 2019 <0.3 1.1 0.61 1.04 <0.5 <50 N48057’58”; E890

53’28”. Khovd river downstream of 20 Sep 7 Ulgii, 2019 1.2 1.8 0.68 1.37 <0.5 <50 N48057’42”; E890 59’42” Namir river downstream of 21 Sep 8 Umnugovi, 2019 1.3 2.8 2.19 3.71 0.9 <50 N4906’28”; E910 44’1” Namir river upstream of 21 Sep 9 Umnugovi 2019 1.5 3.0 2.63 3.21 1.1 515 N4906’38”; E910 41’46” Gashuun river downstream of 23 Sep 10 Ulaangom 2019 2.5 2.2 1.91 3.08 <0.5 675 N49058’55”; E920 4’45” 30* µg/l 10 µgG/l 300** National surface water standard: MNS 10 µg/l or 250 µg/l 10 µg/l or or or µg/l or 4586:1998 0.01mg/l 0.25mg/l 0.01mg/l 0.03 0.01mg/l 0.3mg/l mg/l Remarks: * - US EPA Radionuclides Rule, 2000 ** - US EPA National Primary Drinking Water Regulations, 2017

Table 48: Heavy Metal Content In Wastewater Effluent

(Tannery “Gurvanbulag LLC” in Ulaangom, Uvs Aimag*) No. Location Sampling Heavy Metals, µG/l info of date Ni Mo As U Pb Cr samplings 1 Tannery 24 Sep 68.1 3.4 78.4 3.04 7.2 882,029 waste 2019 water, Ulaangom, Uvs. N49059’5”;

133 E920 4’22” h-930 m National treated wastewater 10 µg/l or 500 10 µg/l or 50 µg/l or 10 µg/l or 50 µg/l or effluent standard: MNS 0.01mg/l µg/l 0.01mg/l 0.05mg/l 0.01mg/l 0.05mg/l 4943:2011 0.5mg/l Source: Asian Development Bank.

8. Groundwater

258. The groundwater of the region accumulates in rocks with different ages, and can be classified as granular and fissure. Granular groundwater accumulates in the non-cemented sedimentary rocks and fissure groundwater accumulates in sedimentary, igneous and metamorphic rocks with different ages. Granular groundwater in the Neocene and Paleocene rocks is mainly confined and hydraulic pressure is relatively high, but fissure groundwater is mainly phreatic and is caused by the clastic rocks with different age.

259. The distribution of groundwater is uneven in project area (Figure 38). Moving from north to south, groundwater resources become more sporadic and mineralization increases. This is primarily due to the climactic changes, including the reduction of precipitation, and increase in air temperature and evaporation in the south. Precipitation, condensation, and tectonic faults all play very important roles in recharging groundwater in the region.

a. Ground water quality

260. Available data for groundwater quality at the project sites is shown in Table 49. Bacteria levels in groundwater are summarized in Table 50.

Table 49: Chemical Properties Of Groundwater At ASDIP Project Sites

samples , mg/l pH - Ca, mg/l Cl Mg, mg/l Location Iron, mg/l NH4, mg/l NO3, mg/l SO4 , mg/l Suspended Suspended solids, mg/l (deep wells) sampling date sampling No. of of No. Hardness, mg/l Jargalant, Khovd 2019 12 1.76 11.69 0.04 9.5 0.11 156.2 26. 8 3 7 Aimag − Ulaangom, Uvs 2019 32 3.53 26.8 0.01 1.8 0.06 1.8 58.7 15.4 33 7.7 Aimag Umnugovi soum, 2019 6 2.88 73.25 0.005 3.2 0.056 0.34 58.4 8.3 40.4 7.1 Uvs Ulgii, Bayan-Ulgii 2019 69 3.26 45.25 0.12 0.4 0.039 42.1 18.2 0.78 7.5 Aimag − Deluun soum, 2019 1 2.04 31.9 0.007 0.1 0.001 - 24 9.8 0.12 7.3 Bayan-Ulgii

National Standard requirements: MNS ISO 10523, 6059 -2001; 7980- 6.5- 7 350 0.5 50 0.3 1000 100 30 100 2003; 4818-1999; 4429, 4430, 4431- 8.5 1997; 6271-2011

Source: Asian Development Bank.

134 Table 50: Bacteria Levels In Groundwater At Project Sites

Indicators

E.Coli E.Coli

ing date count of bacteria Pathogens Pathogens pl ings number l Locations MNS 900- MNS ISO 9308-1- MNS ISO sam 2005: not 1998: 19250:2017 samp above 100 Undetectable Undetectable Ulaangom, 2019 2* 2 Uvs 32 ₋ Ulgii, Bayan- 2 22 Ulgii 2019 62 ₋ Jargalant, 0 0 Khovd 2019 12 ₋ Umnugovi, 0 0 Uvs 2019 6 ₋ Source: Asian Development Bank.

Figure 38: Groundwater Resources Of Project Areas

Source: Asian Development Bank.

135

Legend of Figure 36

9. Soil quality in project sites

a. Heavy metals

261. An analysis of heavy metals in soil at the ASDIP project sites was conducted during the environmental survey held in 16-25 September 2019. X-ray Fluorescence (XRF) tool was used to identify possible heavy metal pollution in soils near the sites. Heavy metal levels at most sites meet national soil quality requirements MNS5850:2008 with some anomalies that are described below. Table 55 provides national soil quality standards.

i. Jargalant, Khovd Aimag

262. Lead, chrome, zinc and arsenic levels (Figures 39 and 40) all have exceeded the precaution, trigger and action values of the Mongolian standards in two areas indicated below. Lead levels at the power plant exceeded the precaution value by 15-184%, and trigger value by 79-190%. At the market place lead exceeded the precaution value by 57-155%. Zinc levels at the power plant exceeded the precaution value by 15-70%, and trigger value by 44%. At the market place zinc exceeded precaution values 5-92%, trigger value by 25-36%, and action value by 62- 82%. Arsenic levels at the power plant exceeded the trigger value by 2-62%, and action value by 139-178%. The source of the pollution at the power plant is ash waste from the power plant. Pollution source at the market place is mostly from auto oil retail and scrap metal purchasers, where they tend to spill and dispose oil on the soil.

136 Figure 39: Soil Heavy Metals In Two Locations In Jargalant

2000 1800 1600 1400 1200 1000 800 600 400 200 0 Cr-1 Cr-2 Cr-3 Cr-4 Cr-5 Cr-6 Cr-7 Cr-8 Cr-9 Zn-1 Zn-2 Zn-3 Zn-4 Zn-5 Zn-6 Zn-7 Zn-8 Zn-9 Pb-1 Pb-2 Pb-3 Pb-4 Pb-5 Pb-6 Pb-7 Pb-8 Pb-9 Cr-10 Cr-11 Cr-12 Zn-10 Zn-11 Zn-12 Pb-10 Pb-11 Pb-12

Power plant Market place Trigger value, mg/kg Action value, mg/kg Precaution value, mg/kg

Source: Asian Development Bank.

Figure 40: Soil Arsenic Content In City’s Market And Powerplant Area In Jargalant

160

140

120

100

0 As-1 As-2 As-3 As-4 As-5 As-6 As-7 As-8 As-9 As-10 As-11 As-12

Power plant Market place Trigger value, mg/kg Action value, mg/kg Precaution value, mg/kg

Source: Asian Development Bank.

ii. Ulgii, Bayan-Ulgii Aimag

263. Lead, chrome and zinc levels all have exceeded the precaution, trigger and action values of the Mongolian standards in two areas of Ulgii (Figure 41). The scrap yard that is located next to the Khovd river that runs through the town had Lead and Zinc levels exceeding the trigger value of the Mongolian standard by 121-198% due to spilled oil and incinerated solid waste. Measurements at the market place revealed that Chrome levels were exceeding the precaution value of the national standard by 12-89% around auto parts retail area.

137

Figure 41: Soil Heavy Metals In Polluted Areas Of Ulgii

1600 1400 1200 1000 800 600 400 200 0 Cr-1 Cr-2 Cr-3 Cr-4 Cr-5 Cr-6 Cr-7 Cr-8 Cr-9 Zn-1 Zn-2 Zn-3 Zn-4 Zn-5 Zn-6 Zn-7 Zn-8 Zn-9 Pb-1 Pb-2 Pb-3 Pb-4 Pb-5 Pb-6 Pb-7 Pb-8 Pb-9 Cr-10 Cr-11 Cr-12 Zn-10 Zn-11 Zn-12 Pb-10 Pb-11 Pb-12

Marketplace Scrap yard Trigger value, mg/kg Action value, mg/kg Precaution value, mg/kg

Source: Asian Development Bank.

iii. Deluun soum, Bayan-Ulgii Aimag

264. The heavy metals measurements were taken from high traffic areas in soum center including school, school dorms, kindergarten, solid waste disposal areas with XRF (X-ray Fluorescence) reader in Deluun soum of Bayan-Ulgii province (Figure 42). XRF readings indicated soum center areas measured were relatively clean of heavy metals contamination. Lead content in one case exceeded the precaution value of the national standard by 11%.

138 Figure 42: Soil Heavy Metals In Deluun

Soil Heavy Metals in Deluun Soum, Bayan-Ulgii Aimag

160

140

120

100

0 10 11 12 13 14 15 16 r-1 r-2 r-3 r-4 r-5 r-6 r-7 r-8 r-9 r- r- r- r- r- r- r- С С С С С С С С С Pb-1 Pb-2 Pb-3 Pb-4 Pb-5 Pb-6 Pb-7 Pb-8 Pb-9 С С С С С С С Pb-10 Pb-11 Pb-12 Pb-13 Pb-14 Pb-15 Pb-16 Deluun soum Precaution value, mg/kg

Source: Asian Development Bank.

iv. Ulaangom, Uvs Aimag

265. The heavy metals measurements were taken from high traffic public and private areas with XRF (X-ray Fluorescence) tool in Ulaangom of Uvs Aimag (Figures 43 and 44). XRF readings indicated most of the areas measured were relatively clean of heavy metals contamination except for three areas indicated in the chart. We have found Lead, Chrome and Arsenic pollution in the topsoil of these three sites exceeding the precaution, trigger and action values of the Mongolian standards. The Power plant and its ash disposal area’s top soil Lead level have exceeded the national standard’s precaution value by 16-229% and the trigger value by 33%, Zinc level exceeds the precaution value by 0.9-45%, trigger value by 11%, Chrome level exceeds precaution value by 2-5% and Arsenic level exceeds precaution value by 290%, trigger value by 16-48% and action value by 14-190%. The tannery top soil has Chrome pollution that exceeds the precaution value of the national standards by 4-137%, trigger value by 19% and action value by 7-57%.

139 Figure 43: Soil Heavy Metals In Ulaangom

Soil Heavy Metals Ulaangom Soum, Uvs Aimag, mg/kg

2500

2000

1500

1000

500

Tannery Power plant Power plant ash disposal Trigger value, mg/kg Action value, mg/kg Precaution value, mg/kg

Source: Asian Development Bank.

Figure 44: Soil Arsenic in Ulaangom

Soil Arsenic in Ulaangom, Uvs Aimag, mg/kg

160 140 120 100 80 60 40 20 0 Аs-1 Аs-2 Аs-3 Аs-4 Аs-5 Аs-6 Аs-7 Аs-8 Аs-9 Аs-10

Tannery Power plant Power plant ash disposal Trigger value, mg/kg Action value, mg/kg Precaution value, mg/kg

Source: Asian Development Bank.

140 v. Umnugovi soum, Uvs province

266. The heavy metals measurements were taken from high traffic areas in soum center such as school, kindergarten, soum administration building and market area and also artisanal mining site located 35 km north from the soum center with XRF (X-ray Fluorescence) reader in Umnugovi soum of Uvs province. XRF readings indicated soum center areas measured were relatively clean of heavy metals contamination, but the mining site has shown chrome and zinc contents have exceeded the precaution value of the Mongolian national standard in some areas (Figure 45). Chrome levels has exceeded the precaution value by 4-5% and Zinc level has exceeded the precaution value by 13%.

Figure 45: Soil Heavy Metals In Umnugovi Soum

Soil Heavy Metals in Umnugovi Soum, Uvs Aimag

160

140

120

100

Source: Asian Development Bank.

Table 51: National Soil Quality Standards For Heavy Metals

MNS 5880 :2008 Elements Soil Mechanical Composition Maximum Clay Loamy Sandy Acceptable Amount, mg/kg Pb 100 70 50 100 Cd 3 1.5 1 3 Hg 2 1 0.5 2 As 6 4 2 6 Cr 150 100 60 150

141 MNS 5880 :2008 Elements Soil Mechanical Composition Maximum Clay Loamy Sandy Acceptable Amount, mg/kg Cr6+ 4 3 2 4 Sn 50 40 30 50 Sr 800 700 600 800 V 150 130 100 150 Cu 100 80 60 100 Ni 150 100 60 150 Co 50 40 30 50 Zn 300 150 100 300 Mo 5 3 2 5 Se 10 8 6 10 B 25 20 15 25 F 200 150 100 200 CN 25 15 10 25 Source: Asian Development Bank.

10. Permafrost

267. Permafrost is a part of upper layer of the Earth crust that is characterized by negative temperatures of soils/rocks and occurrence or possible of occurrence of underground ice. There are two layers in the permafrost: an active layer with seasonal thawing/freezing and a perennially frozen ground or cryolite zone. Global warming and anthropogenic impacts intensify permafrost warming and thawing. Permafrost degradation can cause substantial change in water hydrology, damage infrastructure and affect ecosystems. Thermokarst is an uneven/hummocky terrain created by thawing permafrost.

268. Uvs, Bayan-Ulgii and Khovd Aimags are located in the Altai Mountain region, where permafrost is divided into five zones that depend on altitude: (i) continuous, (ii) discontinuous, (iii) widespread island, (iv) rare spread island, and (v) sporadic (Figure 46): (i) Continuous permafrost lies predominantly in mountain areas with altitude of more than 3,000 m above sea level. The temperature of the permafrost ranges between -1.5о С and -2.5о С and its thickness is between 80 and 150 m. The minimum temperature of the permafrost drops to -4о С, and in some locations, permafrost thickness reaches 200-500 m. (ii) Discontinuous permafrost is widespread in the Western part of the Mongol-Altai Range and in some upper reaches of the Khovd River. The temperature of the permafrost ranges between -0.8о С and -1.5о С, with a thickness between 40 and 80 m. The maximum thickness of permafrost is 200 m. (iii) Widespread island permafrost is located in areas with elevations between 2,500 and 2,800 m above sea level. The temperature of the permafrost is between -0.2о С and -0.8о С, with a thickness ranging from 15 to 40 m. The maximum thickness of the permafrost is 100 m. (iv) Rare spread island permafrost occurs throughout valleys of rivers and lakes with elevations of 2,000-2,500 m above sea level. The temperature of the permafrost is between -0.1оС and -0.2оС, and the thickness between 5 and 15 m.

142 (v) Sporadic permafrost occurs in the muddy soil of springs. The average temperature of the permafrost is between -0.0оС and -0.1оС, with an average thickness between 0.5m and 5.0 m. 269. No permafrost is located at the five project sites which was confirmed by the engineering team and officials at each of the project sites during the site visits.

Figure 46: Permafrost in Western Aimags

Source: Asian Development Bank.

143 B. Ecological Resources

1. Vegetation in western Aimags

270. The type of vegetation coverage in western project Aimags is summarized in Figure 47.

Figure 47: Vegetation Types of Western Aimags

Source: Asian Development Bank.

2. Local wildlife and biodiversity

271. Mongolia boasts a wide variety of wildlife: with 139 species of mammals; 450 species of birds (331 migratory and 119 residents within Mongolia year round); 22 species of reptiles; 6 species of amphibians; and 76 fish species. Western Mongolia is famous with its unique fauna and flora where most of the species are endemic to the region and endangered worldwide. Some of the species that are wild ancestors of the domesticated animals still roam in Altai Mountains. Species include:

(i) Snow Leopards (Uncia uncia) (ii) Wild sheep (Ovis ammon) or Argali (iii) Siberian Ibex (Capra sibirica), (iv) Mongolian Saiga (Saiga tatarica mongolica) (v) Musk Deer (Moschus moschiferus) (vi) Pallas’ cat (Felis manul) or Manul (vii) Black Tailed Gazelle (Gazelle subgutturosa)

144 (viii) Wild Ass (Equus hemionus) (ix) Wild Boar (Sus scrofa nigipes) (x) Stone Martin (Martes foina) (xi) Marbeled Polecat (Vormela peregusna) (xii) Elk (Cervus elaphus) or Red Deer (xiii) Snowcock (Tetraogallus altaicus) or Altain ular (xiv) Cenereous Vulture (Aegypius monachus) (xv) Golden Eagle (Aquila chrysaetos) (xvi) Lammergeyer (Gypaetus barbatus) (xvii) Spoonbills (Platalea Leucorodia) (xviii) Dalmatian Pelican (Pelecanus crispus) (xix) Great White Egrets (Egretta alba) (xx) Whooper Swans (Cygnus cygnus) (xxi) Great Black-Headed Gulls (Larus ichthyatus) (xxii) Black Storks (Ciconia nigra); and (xxiii) The Swan Goose (Anser cygnoides).

272. The project area is entirely located within the Altai–Sayan Eco-region and Mongol Daguurian ecosystems (Figure 48). These regions are characterized by rich fauna biodiversity ranging from mountain tundra of Mongolian Altai to Gobi Desert and Great Mongolian plain steppe: there are 360 species of vertebrates, including 90 species of mammals, more than 250 species of birds, 11 species of reptiles, 8 species of fishes, and 1 species of amphibian.28 The distribution of the critically endangered Saiga antelope (tatarica mongolica) is shown in Figure 49.

Figure 48: Location of Altai-Sayan Ecosystem

Source: WWF. https://www.khanexpedition.com/en/post/khovd-aimag-flora.html

28 WWF. 2001. Altai-Sayan Ecoregion: Ecoregion Climate Change Biodiversity Decline.

145 Figure 49: Geographic Range of Saiga Antelope

Source: WWF Mongolia, 2019

3. Ecological protected areas

273. The Law of Mongolia on Special Protected Areas (1995), classifies protected areas in the country as follows:

1. Strictly Protected Areas 2. National Conservation Parks 3. Nature Reserves and 4. Natural Monuments

a. Protected areas in Western Aimags

274. The four types of protected areas located in western three Aimags are numbered below and listed on the Protected Area Map of Mongolia for reference (Figure 50).

Strictly Protected Areas

1. Great Gobi part B Strictly protected area (SPA) is located in south-western boundary of Mongolia with China in the territories of Khovd (Bulgan, Uench, and Altai soums) and Gobi-Altai (Tonkhil and Bugat soums) aimags covering 6.5 mln ha (including Part A of SPA, which is located outside of ASDIP sites to the south –east). The area is named literally, southern part of Altai Range. It was established 1975 and registered in international Man and Biosphere program in 1991. This is home to Gobi bear (Ursus arctos gobiensis), Wild camel (Camelus ferus), Wild sheep (Ovis ammon), Siberian Ibex (Capra sibirica), Snow Leopards (Uncia uncia), Black Tailed Gazelle (Gazelle

146 subgutturosa), Wild Ass (Equus hemionus) and Saiga Tatarica Mongolica (Saiga borealis). This is the 15th largest PA by its territory in the world.

Figure 50: Protected Areas in Western Aimags

Source: MET, May 2019

Remarks on the Protected Areas in Western Aimags map:

- Strictly Protected Areas

- - National Parks

- - Nature reserves

There are 10 protected area type in western Mongolia

2. Uvs Lake basin SPA is located in Uvs aimag territory consists of four parts located in various territories of Uvs aimag: Uvs lake- main part (in territories of Tes, Davst, Malchin,

147 Naranbulag and Tarialan soums), Tsagaan Shuvuut part (in Sagil soum), Turgen Mountain part (in territories of Turgen, Tarialan, Bukhmurun and Khovd soums), and Ataln els part (in Baruuntruun soum). It covers 755,244 ha of land and water and taken under protection in 1993 to protect unique ecosystems in these areas and serves as etalon of Central Asian territories for ecosystem studies. it was registered in MAB in 1997, World Heritage network -2003 and Ramsar – 2004. It is also covered under IGBP (international Geo-and Biosphere Program) study.

3. Khuh- serh Strictly protected area (SPA) is located along the eastern side of the aimag that shares common boundary with Khovd aimag. It was established in 1977 within the administrative territories of Deluun soum of Bayan-Ulgii and Jargalant soum of Khovd aimag taking of 75,750 ha of land. This is important area for Wild sheep (Ovis ammon) or Argali and Siberian Ibex (Capra sibirica)

National Conservation Parks

4. Altai Tavan Bogd National Conservation Park (NP) is stretched along the western boundary of Mongolia with China and Russia and located in western 4 soums (Tsengel, Ulaan-hus, Sagsai and Altai) of Bayan-Ulgii aimag covers 656,088 ha of land. Highest mountain peaks and rich wildlife are located in the park. It was established in 1996.

5. Siilkhem range (Part A and Part B) NP is located along the northern boundary of Mongolia with Russia in territories of Ulaanhus and Nogoonnuur soums of Bayan-Ulgii. It was established in 2000 and covers 147,875 ha of land. It was protected for its rich wildlife and scenic areas.

6. Tsambagarav NP is located in the eastern part of aimag and covers 113,748 ha in Altantsugts and Bayannuur soums of Bayan-Ulgii and Erdeneburen soums of Khovd Aimag. The national park is established in 2000 to protect the population and habitat areas of Snow Leopards (Uncia uncia)

7. Chigertein River NP is located along boundary of Mongolia with China in the western part of Bayan-Ulgii aimag in territory of Deluun soum. It was established in 2012 to protect formation of river water sources, conservation of water and humidity regimes, and provide water supply for flora and fauna in the region and covers 167,191 ha of land.

8. Munkh Khairhan NP is located along boundaries of Bayan-Ulgii and Khovd and covers 506,094 has of land in the territories of Bulgan soum of Bayan-Ulgii and Uench and Munkh Khairkhan soums of Khovd Aimags. It was established in 2006 to protect its unique ecological areas and snow-capped mountain peaks and the territory was expanded in 2011.

9. Khar-Us Lake NP is located in the territory of Khovd aimag covers 852,995 ha areas of Myangad, Durgun, Chandmani, Mankhan and Buyant soums of the aimag. It was established in 1997 to protect four lakes (Khar-Us, Khar, Durgun and Zereg Tsagaan) and its rivers and surrounding unique terrestrial ecosystems, flora and fauna.

10. Myangan Ugalzat Range NP (literally in Mongolian: mountain range with thousand wild sheep) was established in 2002, to protect scenic areas, rare and endangered plant and

148 wildlife species, including wild sheep. It covers 303,774 ha, including its expansion taken in 2011 in territories of Tsetseg, Must and Altai soums of Khovd aimag.

11. Khan-Khuhii Range and Hyargas Lake NP is established in 2000 in Uvs aimag and consists of two parts: Khan-khuhii mountain range and Hyargas Lake. Both of them are located in territories of Zuunkhangai, Undurkhangai, Tsagaankhairhan and Hyargas soums of this aimag. It covers 221,598 ha and includes variety of unique landscapes and river ecosystems.

Nature Reserves

12. Devel Aral (Devel Island of Khovd River) Nature Reserve (NR) is established in 2000 and located in converging territories of Bayan-Ulgii and Uvs aimags’ boundary. It covers 10,618 ha of Nogoonnuur and Altantsugts soums of Bayan-Ulgii and Khovd soum of Uvs aimags. This nature reserve is home to Peasant (Phasianus colchicus L.), Wild Boar (Sus scrofa nigipes), beaver (Castor fiber) and wild plants of Sea-buckthorn.

13. Altan Khuhii Mountain NR is located in the border areas of Umnugobi soum of Uvs and Myangad soum of Khovd aimags. It was established in 2010 to conserve variety of unique landscapes and flora and fauna of this NR and covers 90,734 ha of land.

14. Bulgan Khangai NR is located in Hyargas soum of Uvs aimag and covers 11,407 ha of land. Established in 2012 to conserve its unique beautiful ecosystem.

15. Tes River Basin NR is located to the east of Uvs Lake along the boundary of Mongolia with Russia to the north of Uvs aimag. It was established in 2006 to conserve the unique river basin landscapes and ecosystems located in Tes Soum of Uvs aimag.

16. Sharga Mankhan and Sutai Mountain NR is located in two distinct (200 km) from each other areas: Mankhan part is located within territory of Mankhan and Buyant soums of Khovd aimag and the Sharga part is located in Sharga soum of Gobi-Altai aimag, which is outside of ASDIP project area. Total territory of NR is 396,290 ha and approximately 1/3 of NR is belong to Mankhan area. It was established to conserve core habitat area (last refugee) of Saiga tatarica Mongolica in 1993.

275. In addition to above Protected areas located in Western three Aimags, Government of Mongolia has recently (July 2019) issued a degree to annul mining activities that are taken place in ecologically fragile environment and take under state special protection.

b. Tranche 1 project sites and protected areas.

276. The project sites of Tranche 1 in the three western Aimags are not located in, close to, or will affect any protected areas. During the extensive site visits for Tranche 1 the environmental team screening out two project sites in Mankhan soum of Myangad soum in Khovd Aimag because the project components were located inside either Nature Reserves or National Parks. Of particular importance was Mankhan soum which supports remaining habitat of the critically endangered saiga antelope (Figure 49).

277. Two types of irrigation schemes planned in Tarialan soum in Uvs Aimag will extract water from the Kharkiraa-Teel river that discharges into Uvs lake which is a Strictly Protected

149 Area (defined above). However, the feasibility design of the two irrigation schemes (Figures 11 – 13), along with information obtained on seasonal flow regime of the lower Kharkiraa-Teel river indicate that the two irrigation schemes will not affect Uvs Lake ecosystem. This is discussed further below in the Impacts Assessment of Chapter VI.

C. Socioeconomic Profile

1. Physical and Cultural Resources

278. There are no cultural heritages or resources such as deer stones, tombs, ancient rock painting, remains of ancient cemetery, or places of worship in the immediate vicinities of all five ASDIP project sites in the three project Aimags.

2. Socio-economic profiles of ASDIP project sites.

a. Ulaangom, Uvs Aimag

279. Ulaangom, is located on the northern part of the Uvs Aimag in 1,341 km from UB city. The territory is divided into 12 baghs.

Demography

280. As of 2018-year end, Ulaangom’s population is 31,279 belonging to 8,574 households. Of which, 15,722 are male, and 15,891 are female. Annual population growth is at 1%. Average life expectancy in Uvs Aimag is at 68.84 years which is 1 year below than national average. Average life expectancy is 63.93 years for males and 72.87 years for female residents.

Education

281. There are 15 kindergartens in Ulaangom that have 2,851 children. 7 middle schools in Ulaangom employ 431 teachers who teach a total of 8,155 pupils. There are 2 colleges in Ulaangom Soum: Uvs TVET and a branch of Labour College of Mongolia. In total, the two colleges have 1531 students and 81 teachers.

Health services

282. Ulaangom has total of 50 health institutions including both state and private operated has a total of 336 employees which includes 126 doctors, 178 nurses and over 80 technical and service workers. Its capacity is 250 beds for in-patients. It offers health services to 110,000 patients each year.

Unemployment and poverty

283. Total workforce in Uvs Aimag is 49,100 persons which includes 3177 unemployed persons. Labor participation rate is at 77.2% and unemployment rate in Uvs Aimag is at 8.4%. In Davst soum, there are 24 registered unemployed persons in August 2018, of which 13 are female residents.

150 Economic development

284. Uvs Aimag is one of the relatively well-developed Aimags in Mongolia with gross domestic product gross domestic product (GDP) of 130 million USD. The main economic sectors in Uvs Aimag are livestock breeding, crop planting, light industry, service sector and mining. In 2017, Uvs had 3.13 million heads of livestock and planted wheat, vegetables and sea buckthorn at 9,235 ha of field.

Infrastructure condition

285. Ulaangom is connected to Borshoo border port with paved which is connected Russian counter port Khandgait. These connections allow residents from Russia to visit for trade or sightseeing. Ulaangom has two power plants that provide heat and electricity. Water is supplied from Hovd river which runs through the city. Wastewater from households are disposed into wastewater treatment plant, but the treatment level is very low due to outdated technology.

b. Umnugovi soum, Uvs Aimag

286. Umnugovi soum of Uvs Aimag is located on the southern part of the Uvs Aimag, 1,460 km from UB city and in 154 km distance from Ulaangom. The soum territory is divided into 5 baghs.

Demography

287. As of 2018-year end, Umnugovi soum had population of 4,681 people belonging to 1,155 households. Of which, 2,321 are male residents and 2,360 are female residents. Annual population growth is at 1%. Average life expectancy in Uvs Aimag is at 68.84 years which is 1 year below than national average.

Education

288. There is 1 kindergarten in Umnugovi soum that had 342 children in 2018. The kindergarten employed 6 full time teachers, 6 assistant teachers, 22 pre-school staff and 10 other staffs. There are 3 general education schools in Umnugovi soum and have total of 1,070 students and 59 teachers.

Health services

289. Umnugovi soum has total of 1 hospital, employing 336 employees which includes 126 doctors, 178 nurses and over 80 technical and service workers. Its capacity is 250 beds for in- patients. It offers health services to 110,000 patients each year.

Unemployment and poverty

Total workforce in Uvs Aimag is 49,100 persons which includes 3,177 unemployed persons. Labor participation rate is at 77.2% and unemployment rate in Uvs Aimag is at 8.4%. In Davst soum, there are 24 registered unemployed persons in August 2018, of which 13 are female residents.

Economic development

Umnugovi soum’s economic source is mostly through livestock breeding. In 2018 Umnugovi soum’s total livestock headcount was 233,150 owned by over 1,000 herder households. Which is

151 over 87% of the total population of the soum. Alson in 2018, Umnugovi soum had utilized 113.7- hectare land for crop, mostly wheat and vegetables.

Infrastructure condition

290. Umnugovi soum is located between Ulgii, Bayan-Ulgii Aimag, Ulaangom, Uvs Aimag, and Jargalant, Hovd Aimag. In 2018, Umnugovi soum had spent 1.1 billion MNT on construction, capital repairs and maintenance. c. Jargalant, Khovd Aimag

291. Jargalant of Khovd Aimag is located on the southern part of the Hovd Aimag in 1,600 km from UB city. The territory is divided into 12 baghs.

Demography

292. As of 2018-year end, Jargalant had population of 30,336 people belonging to 8,200 households. Of which, 14,816 are male residents and 15,520 are female residents. Annual population growth is at 1%.

Education

293. There are 28 kindergartens in Jargalant that had 3,512 children in 2018. The kindergarten employed 122 full time teachers, 69 assistant teachers, 361 pre-school staff and 170 other staffs. There are 8 general education schools in Jargalant and have total of 8,649 students and 438 teachers.

Health services

294. Jargalant has total of 59 health institutions, employing 336 employees which includes 177 doctors, 208 nurses. Its capacity is 362 beds for in-patients. In 2018 the hospitals in Jargalant provided services to 15,578 patients.

Unemployment and poverty

295. Total workforce in Khovd Aimag is 39,627 persons which includes 3,337 unemployed persons. Labor participation rate is at 73.9% and unemployment rate in Khovd Aimag is at 8.4%. In Jargalant, there are 821 registered unemployed persons in Sept 2019.

Economic development

Khovd Aimag is one of the relatively well-developed Aimags in Mongolia with gross domestic product (GDP) of 146 million USD. The main economic sectors in Hovd Aimag are livestock breeding, crop planting, light industry, service sector and mining. In 2018, Hovd Aimag had 3.14 million heads of livestock and planted wheat, vegetables and watermelon at 2,243.5 hectares of field. Jargalant had 99,000 heads of livestock.

Infrastructure condition

296. Jargalant is located along the Millennium road which connects western Aimags Govi-Altai, Uvs, Bayan-Ulgii and Chinese counter ports Bulgan and Baitag. Jargalant has two coal plants that provide heat and electricity to the city. The city is located along Buyant river which provides

152 fresh water to the city. Wastewater is disposed into a waste water treatment plant west of the residential area through the city’s sewage system, but the treatment level is very low due to outdated technology.

d. Ulgii, Bayan-Ulgii Aimag

297. Ulgii is located in the mid-central part of the Bayan-Ulgii Aimag in 1,690 km from UB city. The territory is divided into 13 baghs.

Demography

298. As of 2018-year end, Ulgii had population of 36,930 people belonging to 8,424 households. Of which, 18,176 are male residents and 18,754 are female residents. Annual population growth is at 1%. Average life expectancy in Bayan-Ulgii Aimag is at 73.11 years.

Education

299. There are 26 kindergartens in Ulgii that had 3,391 children in 2018. The kindergarten employed 131 full time teachers, 116 assistant teachers, 539 pre-school staff and 292 other staffs. There are 14 general education schools in Ulgii and have total of 10,970 students and 652 teachers.

Health services

300. Ulgii has total of 61 health institutions, employing 355 employees which includes 158 doctors, 236 nurses and over 24 technical and service workers. Its capacity is 250 beds for in- patients. It offered health services to 110,000 patients in the year 2018.

Unemployment and poverty

301. Total workforce in Bayan-Ulgii Aimag is 55,772 persons which includes 7,014 unemployed persons. Labor participation rate is at 70% and unemployment rate in Bayan-Ulgii Aimag is at 12.6%.

Economic development

302. Bayan-Ulgii Aimag has gross domestic product (GDP) of 139 million USD. The main economic sectors in Bayan-Ulgii Aimag are agriculture, mostly livestock breeding, crop planting, light industry, service sector and mining. In 2018, Bayan-Ulgii had 2.17 million heads of livestock and planted wheat, vegetables 2,316.4 hectares of field.

Infrastructure condition

303. Bayan-Ulgii has borders connecting to both Russia and China. The Russian border crossing Tsagaannuur is open year around and is the preferred road traveling to and from Kazakhstan. Ulgii Soum is connected to Hovd and Uvs Aimag through paved roads. Ulgii has powerplant that provides electricity and heat to the Soum. Wastewater from households are disposed into wastewater treatment plant, but the treatment level is very low due to outdated technology.

153 e. Deluun soum, Bayan-Ulgii

304. Deluun soum is located in the southern part of the Bayan-Ulgii Aimag in 1,692 km from UB city. The Soum territory is divided into 10 baghs.

Demography

305. As of 2018-year end, Deluun soum had population of 7,437 people belonging to 1,662 households. Of which, 3,686 are male residents and 3,751 are female residents. Annual population growth is at 1%.

Education

306. Deluun soum has 1 kindergarten servicing 260 children in 2018. The kindergarten employed 8 full time teachers, 7 assistant teachers, 30 pre-school staff and 15 other staffs. There are 3 general education schools in Deluun soum and had total of 1,451 students and 110 teachers.

Health services

307. Deluun soum has 1 hospital, employing 24 employees which includes 7 doctors, 7 nurses and over 10 technical and service workers. Its capacity is 29 beds for in-patients. It offered health services to 705 patients in the year 2018. Unemployment and poverty

308. Total workforce in Bayan-Ulgii Aimag is 55,772 persons which includes 7,014 unemployed persons. Labor participation rate is at 70% and unemployment rate in Bayan-Ulgii Aimag is at 12.6%.

Economic development

Bayan-Ulgii Aimag has gross domestic product (GDP) of 139 million USD. The main economic sectors in Bayan-Ulgii Aimag are agriculture, mostly livestock breeding, crop planting, light industry, service sector and mining. In 2018, Bayan-Ulgii had 2.17 million heads of livestock and planted wheat, vegetables 2,316.4 hectares of field.

Infrastructure condition

309. Deluun soum is connected to Ulgii Soum, the capital of Bayan-Ulgii Aimag and Jargalant Soum of Hovd Aimag through partially paved roads. In 2018, Deluun soum has spent 1.4 million MNT on construction, capital repairs and maintenance.

V. PUBLIC CONSULTATION

310. The stakeholder consultation strategy designed and implemented for the ASDIP embodied the principles of meaningful engagement, transparency, participation, and inclusiveness to ensure that affected and marginalized groups such as women and the poor were given equal opportunities to participate in the design of the project, in accordance with the requirements ADB’s Safeguard Policy Statement (2009).

154 A. Identification of Stakeholders

311. Affected stakeholders were identified and engaged in a participatory manner with assistance from TOSK/MCUD and the national environment and social team. The stakeholders involved in the consultations included:

• TOSK/MCUD representatives of ASDIP;

• Representatives of all affected Khashas;

• Khasha representatives living along pilot roads who have an interest in identifying measures to enhance or maximize the benefits, and who may be directly and/or adversely affected by the ASDIP;

• Representatives of business, individual households, and religious groups; and

• Implementing national EIA firm, and engineer of ASDIP.

312. The locations and structure of consultations conducted is summarized in Table 52.

Table 52: Summary Of Public Consultations Of Affected Persons And Local Government

Number and Meeting date Age of Meeting location gender of Attendees No. and duration attendees attendees 1 • Representatives of beneficiaries and potential affected Conference room of Total 118 populations of ger October 2, 2019. Khovd Aimag participants khoroos Duration 3 hours Governor office. 20-85 Male-37 • Aimag govern 4PM-7PM Jargalant soum, Female-81 agencies Khovd Aimag • NGO representatives • Retired citizens

2 Particpiants- October 3, 2019 Soum parliament 18 • Local government Duration 2 hours speakers office Male-7 officials 4 PM-6PM Female-11 • Vegetable growers 3 • Aimag governor Soum Wedding Total 164 October 4, 2019 • Local government Center. Deluun participants: Duration 2 hours 20-75 officials soum, Bayan-Ulgii Male- 131 11AM -1 PM • Representatives of Aimag Female-33 soum citizens • Retired citizens 4 October 5, 2019. Conference room of Participants – Duration 2.3 • Citizens – Vocational Training 101 hours. 5PM - 15-80 beneficiaries Center of Ulgii soum, Male- 61 7.30PM • Potential affected Bayan-Ulgii Aimag Female-40 households

155 Number and Meeting date Age of Meeting location gender of Attendees No. and duration attendees attendees • Soum government officials 5 Meeting room of • Local Participants – October 7, 2019 Umnugovi soum government 60 Duration 2 hours governor office. 20-75 officials Male- 33 11AM-1PM Umnugovi soum, Uvs • Representatives Female-27 Aimag of soum citizens • Retired citizens 6 • Aimag and soum government officials Participants – October 8, 2019 Drama theatre of • Ger area 123 Duration 2 hours Ulaangom soum, Uvs 20-70 beneficiaries Male- 59 6-8 PM Aimag center • Potential affected Female-64 households • Vegetable growers and hay producers

• Soum government officials Questionnaire survey Participants- • Crop producers among local water April 29, 30 and 82 • Hay makers users, Tarialan and 14-70 May 1, 2020 Male- 56 • Vegetable Naranbulag soums of Female-26 growers Uvs Aimag • Herders • Medical doctors Middle school teachers Total number

of participants

Male - 374 Female - 282 Source: Asian Development Bank.

B. Consultation Discussion Topics

313. The topics of the consultations included: • Introduction of the project, project goals, and proposed activities; • The ADB SPS (2009): Environmental safeguard requirements and ASDIP potential environmental impacts and mitigation measures; • ADB SPS (2009): Resettlement safeguard requirements and potential affected populations. • Question and answer sessions

156 1. Introduction to project:

• How were the project areas selected • Project phases, list of actions • Compensation actions and property appraisal methods • Pre-plan phase and construction plans

2. Environmental safeguard requirements and issues:

• Purpose of SPS environment safeguard policy in context of ASDIP • Scope of environmental safeguard policy in relation to ASDIP • What and why environmental assessment required for ASDIP activities • Environmental planning and management: o what is an EMP and content of EMP • Information disclosure: o what information and why is needed for public • Public Consultation and Participation: o the purpose and necessity of local community participation • Grievance Redress Mechanism: o why it is important, structure, implementation • Monitoring and Reporting • Unanticipated environmental impacts • Biodiversity conservation and sustainable natural resource management • Pollution prevention and abatement: A o potential impacts and anticipated pollution o required pollution prevention or mitigation • Health and safety of local communities and project workers within ASDIP sites. • Physical Cultural Resources of ASDIP sites and required protection measures

C. Consultation Procedure

1. Discussion guide

314. To help orient participants to the discussions on environmental issues and concerns of the ASDIP a list of environmental components (e.g., Table 53) was introduced to the participants ahead of the question and answer period. The example components of environment assisted participants to understand what was meant by environment. The participants were encouraged to identify, and add their own components of environment to the discussions.

Table 53: Environmental Components to Guide Discussions

• drinking water quality and availability • terrestrial and aquatic animals, e.g., • surface water quality and quantity fish, birds, small mammals • groundwater quality and quantity • ecological protected areas (e.g., • air quality national parks, wildlife sanctuaries), • climate • land uses (e.g., agriculture, fisheries, • land and soil quality forestry, navigation, aquaculture, • rivers, reservoirs, commercial, other), • trees, other vegetation, • public safety • public movement and access

157 • terrestrial resources e.g., forests, • physical cultural values (e.g., temples, minerals, soil cemeteries, monuments)

315. Five open-ended questions, and information requests (Table 54) will be posed to guide discussions of the stakeholders.

Table 54: Guiding Questions And Information Requests For Stakeholder Consultations

1. What will be the benefits of ASDIP?

Please list benefits of ASDIP.

2. Do you have any environmental concerns with ASDIP?

Please list environmental concerns of ASDIP.

3. Do you any have environmental concerns with the construction phase activities of ASDIP?

Please list environmental concerns of construction phase activities.

4. Do you have environmental concerns with the completed operation phase of the completed ASDIP?

Please list environmental concerns of the operation of completed ASDIP.

5. Do you think the design or operation of ASDIP should be changed to prevent negative environmental, or community impacts?

Please list changes to ASDIP that you think will prevent or reduce negative environmental, or community impacts?

Source: Asian Development Bank.

D. Results of Public Consultation in the Aimag centers and soum centers

316. Table 55 summarizes the views and issues of the participants of the consultations as they relate specifically to the project and affected environments. The complete minutes of all consultation meetings, signatures of meeting participants, and completed questionnaire for consultations in Tarialan soum are included in Appendix C.

158 Table 55: Summary Of Key Discussion Points Of Consultations In The Five Project Sites

Locations of Response of ASDIP stakeholders Issues or concern Consultation Consultants Response of Project Jargalant ASDIP Ger redevelopment • The ger housing • Bad air quality due to center of component focuses on redevelopment will smoke from chimneys Khovd Aimag reducing air, soil and water improve in-house air of household stoves pollution through quality. • Environmental pollution constructing/improving • ASDIP will reduce urban specially, inadequate basic infrastructures: water air and water pollution solid waste supply, heating and and improve management and sewerage; environmental quality. citizen’s bad behaviors • Extra care will be taken to on garbage handling Solid waste management ensure pedestrians and • Safety of pedestrians through improving waste general public are not on street, where collection, transporting harmed during manholes without cover services, and solid waste construction phase, and are frequent. disposal site will make the improved

change of the city. But infrastructure including

public awareness is roads will provide much needed by local community safer walking surfaces for and local government for pedestrians ensuring healthy and safe living of inhabitants. Buyant soum, Taken into account the • High competition over Khovd Aimag • Diversion of irrigation availability of water current water scarcity water from Buyant river resource of Buyant problem of Buyant river was dropped from project. River during spring water consumers, ASDIP • Wastewater treatment vegetable planting study team works on other plant (WWTP) of period. If ASDIP alternatives of irrigated Jargalant will be agricultural component, land locations. upgraded by project especially, 500 ha ASDIP plans to invest to irrigated area will be improve the treatment located upstream of technology and process of Buyant river, it will existing WWTP to meet the worsen the water national standard for availability for vegetable effluent. growers and downstream river ecosystem. • Inadequacy of wastewater treatment plant, which impact water quality of Buyant River via effluents Deluun soum Soum governor replied • Well water quality and • Belief exists that water of Bayan- that a Government quantity will be assessed quality used from deep Ulgii Aimag financed project to improve during detail design stage wells in soum center is the water supply of project. bad and because of this well source is ongoing. • Micro-finance will be some children have provided for these small problems with their ASDIP agriculture projects through local teeth. component will support PUGs. herders in creating

159 Locations of Response of ASDIP stakeholders Issues or concern Consultation Consultants Response of Project • Flooding is problem for sustainable livelihood in • Pasture habitat herders living in some rural areas and in restoration through areas and are asking combating with overgrazing reductions in herd size is project in building through series of a primary objective of the bridge for flood frequent interrelated activities on agribusiness component areas. improving livestock quality of ASDIP. • Herders face pasture and health, fodder supply overgrazing and and development of SME desertification issues in on livestock products. soum territory. Some trees grown in pasture are suffering because herds are damaging to re-grow and spread to barrier desertification extension. Would project help restoring the trees. Ulgii center ASDIP component on • A detailed review of • Air pollution in Ulgii is of Bayan- Aimag soum center heating plant operations worst among Aimags Ulgii Aimag development is entirely will occur in detailed and urgent measures to focused on environmental design stage of project. reduce air pollution is a pollution (air, soil and water • Ger housing priority. pollution reduction and redevelopment of ASDIP • If the basic sustainable use of natural will greatly improve in- infrastructure to be built resources) reduction. house air quality. for designated baghs is Project looks forward much • The goal of Ger expanded to cover reduced pollution at the redevelopment in pilot other baghs it will end of 10 years and Bags is to show benefits benefit the inhabitants thereafter. to air quality and standard for their well-being and of living that other Bags for reducing will want to adopt. environmental • Existing power plant and pollutions in the other facilities will be upgraded areas. by project • A concern identified of capacity of existing power plant to meet the increased demand of heat supply for renowned ger areas. ASDIP will further identify • The issue of sustainable • Concern o increased f wastewater treatment groundwater and surface consumption of solutions that should be water supplies for all underground water Umnugovi environmentally and health users is paramount to the resource due to project soum of Uvs Aimag friendly and will be ASDIP and will be created water available for reuse as grey investigated in detail infrastructure water for tree watering and during detail design of • How will wastewater irrigation. project. will be treated when • New WWTPs will be sewers are connected ASDIP enviro-team has constructed in Aimag and to all social buildings identified considerable dust soum centers to collect all

160 Locations of Response of ASDIP stakeholders Issues or concern Consultation Consultants Response of Project (kindergarten, to be generated during the wastewater from all dormitory, schools and project construction period. community buildings. offices)? Will it be a Dust suppression activities • The application of grey centralized WWTP or as well community and water in soums and individual septic tank? workplace safety activities Aimag centers for local • Consider using grey will be identified to be irrigation is a good idea water for tree watering taken in dry season in EMP and will be supported by and not use and proper monitoring project through underground drinking and enforcement structure awareness raising and water. and resource. A proper O&M. GRM structure will be in • Whether project will • Yes, application of dust place, in case if local reduce dust pollution retarding agents (e.g., community have health during construction water, CaCl2) will be and safety related concern period applied at all construction during the project sites and along road construction period. works will improve the solid • A major activity during • Solid waste pollution waste management in detailed design stage is to from discarded Ulaangom urban areas. This includes investigate the needs of livestock hides. There is center of Uvs solid waste collection, solid waste management no proper waste Aimag transportation and proper including collection and collection and disposal disposal. Before disposal, separation of ash, system in Ulaangom solid waste will be domestic waste, and and streets are filled in segregated into reuse and animal waste at landfills. with dumps. Adequate recycle and for landfill. • Similar to the other 3 solid waste irrigation source rivers of management system is ASDIP will assess project ASDIP, sustainable water strongly required. water consumption supply to all users of the • The project-proposed compared to current Teel Gol river including activity of irrigated water consumption and downstream Uvs Lake 500ha of land next Teel availability of water Protected Area will be river will increase resource of investigated in detail competition of river users Kharkiraa (upstream) and during detailed design water use among hay Teel (downstream) river to stage. producers settled along the river that confluence avoid over consumption, to Uvs Lake. and dispute with traditional users of water resources in this area Tarialan Project needs to conduct a • Limited availability of Soum center Project will assist in water balance study in this river water for irrigation of Uvs aimag: studying restoration of an area for input and output of hay making areas, old canal and ponds for water quantity during the vegetable growing and Crop, hay harvesting and detailed design phase crop production making and conservation of flood water • To harvest and vegetable of Kharkiraa-Teel river. It accumulate flood growing will greatly help local waters for use of un- areas nearby community in making utilized areas for Teel river available water resources increase of pasture mouth area for sustainably use for crop areas, vegetable at Uvs lake. production and vegetable growing and crop growing or hay making. production.

161 Locations of Response of ASDIP stakeholders Issues or concern Consultation Consultants Response of Project • To restore an old water It will also reduce flood canal and ponds, which risks in downstream used in XVII-XVIII communities and stabilize centuries for vegetable riverbeds from soil erosion growing and crop and ecosystem production for increased degradation livelihoods of local communities Water conservation and • Flow of Teel river, a use of water from tributary of Kharkhiraa increased glacier melting river, which confluences and spring and summer to Uvs Lake does not floods is in line with local reach due to extensive and central government use of water for policies irrigation of hay making, crop and vegetable growing areas during summertime. • During the snow melting and heavy rain periods induced floodwater reaches Uvs lake and local people do not benefit from this case because of lack of infrastructure for water harvesting and water conservation for regulated use of water for downstream irrigation areas • Glacier melting increases river flow, which coupled with snow melting and heavy rain induced floods, results in degradation and increased erosion of riverbeds and increases risks of local communities along the river. • As public survey results also show (Appendix C) local communities are strongly supportive of the Kharkiraa-Teel river diversion and storage project for river water conservation for irrigation. Source: Asian Development Bank.

162

1. Outcome of consultations

317. Participants were thankful to gain knowledge about the environmental and social impacts of the project and the relative laws and policies. Also provided to the participants was the explanation of the project grievance redress mechanism (Chapter VIII), and contact details of people who can answer other questions about property appraisal etc.

163 VI. POTENTIAL ENVIRONMENTAL IMPACTS AND MITIGATIONS

318. The assessment of potential impacts of the ASDIP in the project areas in the Uvs Aimag center of Ulaangom and Umnugovi soum center, the Bayan-Ulgii center of Ulgii and Deluun soum center, and Jargalant the center of Khovd Aimag is structured by the three development phases define by: a) Pre-construction; b) Construction; and c) Post-construction operation,

319. This assessment structure is carried forward to structure the environmental management plans (EMP) for the Aimags. To prevent redundancy, the assessment of potential impacts that are common to Aimag / soum projects are identified and discussed together. This enables clearer assessment and discussion of potential impacts of ASDIP investments, and the ability to highlight specific project area impacts.

A. Benefits to the three Aimag centers and two soum centers

1. Improved standard of living and family health.

320. A major comprehensive benefit of Tranche 1 of the ASDIP is the significant increase in standard of living of residents in the target Aimag centers and soum centers that will arise from the improvements to the diverse array of urban infrastructure. The attributes of the improvements to the standard of living and family health that will be realized by the affected communities in the Aimag centers and soum centers are as follows: (i) in Aimag centers, access to modern, energy efficient apartments to replace traditional ger housing will lead to immediate improvements to in-house air quality (i.e., reduction in PM2.5 from coal and wooding), and a reduction in gastrointestinal- related illnesses from replacement of pit latrines with modern toilets and central wastewater collection. (ii) expanded piped potable water supply; (iii) new and improved central wastewater collection and treatment; (iv) expanded and improved central hot water and heating; (v) improved electrical power supply; (vi) better organized solid waste collection including cleaned and better contained landfills; (vii) improved flood control and drainage; (viii) improved utility services to community facilities such as schools, hospitals, community centers; and (ix) improved surface water quality from improved wastewater treatment.

321. The second major benefit of the ASDIP will be caused by the agricultural component of the project which will introduce modern agribusiness technology and practices at the Aimag centers and soum centers which are defined by the Agroparks (e.g., Disease Free Establishments, Veterinary services, modern meat processing facilities, Research and

164 development centers), and Irrigated fodder farms. Major positive impacts of the agriculture component will be:

(i) introduction of modern meat processing, handling, and storage technology (i.e., FAO and WHO standards), and waste management thereby preventing or reducing environmental pollution from present slaughtering and meat processing practices.

(ii) from #1, increased quality of meat produced for domestic and international markets thereby improving livelihood income of herders and exporters from meat exports to previously inaccessible lucrative international markets;

(iii) from #2, decreased size of livestock herds and therefore decreased overgrazing of the pastures in the Aimags leading to increased pasture quality and restored habitats;

(iv) from #3, decreased livestock methane emissions, and increased carbon sequestration in restored pasturelands thereby significantly reducing the carbon footprint of the project affected areas of western Mongolia.

B. Impacts and Mitigations

1. Pre-construction phase impacts and key activities

322. The primary impact of the pre-construction phase of the project is land acquisition and potential involuntary resettlement. Minor land acquisition and possible resettlement will occur in urban areas as a result of the construction of new and improved infrastructure including utility trunk lines, roads, buildings, and riverbank and dyke improvements. Required land acquisition and resettlement of affected persons are summarized in Table 55.

Table 56: Estimated Land Acquisition And Resettlement (LAR)

Source: Asian Development Bank.

a. Water availability

323. A key activity of pre-construction phase and as part of the detailed design of Tranche 1 is to confirm current understanding of surface and groundwater availability for the water consuming project components such as the irrigation schemes that will supply the fodder farms, the meat

165 processing facilities, and planned increases in potable water supply to the urban communities. A hydro-geological assessment at the project sites must be conducted to clarify local surface and groundwater budgets particularly at low flow periods to:

(i) ensure that the water consumption requirements of the project are met and sustainable; and

(ii) that downstream uses/users of the water resources will not be negatively affected by the project.

324. The indicative low flow discharge of the rivers near the project sites summarized Table 44 in Chapter IV must be validated with more accurate and complete seasonal measurements at the actual water extraction and diversion sites of source rivers to ensure that the estimated irrigation water requirements of the 500ha and 200ha fodder farms of 0.315m3/sec and 0.126 m3/sec, respectively identified in Chapter III are sustainable. Similarly, the estimated total water requirements of the different investments in the Agroparks (e.g., meat processing facilities, DFEs) for the agro-components also listed in Chapter III must confirmed, and compared to local groundwater and surface water - low flow availability.

325. Assessment of minimal seasonal discharge of the rivers that will receive the upgraded treated effluents from the new WWTPs is also important. Even though the treated effluents of the new WWTPs in the Aimag and soum centers, and in the Agroparks will meet targeted international standards (e.g., IFC-EHS Guidelines 2007), the low flow of the receiving rivers must be clarified to ascertain that ambient water quality standards will be met below the treated effluent discharge points, and how far downstream of effluent mixing zones of the rivers will extend.

b. Finalize detailed designs

326. A major activity of the pre-construction phase will be the completion of the detailed engineering designs of all infrastructure and agribusiness project components. The detailed designs will provide any new insight into potential impacts of the project components that could not be clarified with the FS designs. The IEE will be updated as necessary with the detailed designs of the components.

c. Updating EMP

327. The final activity that will occur during the pre-construction phase will be updating the EMPs for the three Aimags. This standard activity occurs to reflect the detailed designs of the infrastructure and agribusiness components of the project to ensure that all potential impacts and required mitigation measures of the final project design are managed completely and properly.

Potential Impacts – Construction Phase

328. The project components of Tranche 1 are not in, near, or will impact protected areas or critical wildlife habitat (SPS 2009) and are not inhabited by rare or endangered wildlife. Two initial project sites with all three of these ecologically sensitive characteristics were located in Mankhan soum and Myangad soum of Khovd Aimag. However, both soum centers were screened out of Tranche 1 by the environment team.

166 329. The potential impacts of the construction of new and upgraded infrastructure (i.e., utility trunks lines [potable water, hot water, electricity, communications, wastewater], roads, buildings, drainage, riverbank and dyke improvements, water supply canals) for the urban areas and for the agribusiness components outside the urban areas will focus on short-term the disturbances and impacts that are normal and expected from civil works activities. These construction phase impacts and disturbances are summarized below.

d. Common impacts of urban and rural infrastructure development

330. Common impacts and disturbances caused by the civil works in the Aimag centers and soum centers will consist of reduced and/or blocked public movement and access, disrupted utility services, disrupted business and recreation activity, noise and dust caused by earthworks, heavy truck movement, and equipment use, homestead soil pollution caused by equipment operation and maintenance, risk of public and worker accidents and injury, increased traffic congestion and traffic accidents, land erosion and downstream sedimentation of Aimag/soum rivers, and temporary localized drainage and flooding problems. Solid waste and domestic pollution from temporary worker camps can occur, as well as potential communicable disease and community problems caused by migrant workers. These short-term impacts and disturbances will occur at different levels of magnitude depending on the civil works activity and location in Aimag center or soum center.

331. The construction phase is expected to cause the number of vehicles and traffic in the urban areas to increase at peak periods near work sites. The increased traffic will be from trucks carrying building materials such as loads of aggregate, wet and formed concrete, wood, brick, pipe, glass and other infrastructure and building construction materials. Estimates of amounts of materials that will be transported into the three Aimag centers and the two soum centers must wait until the detailed design phase.

332. The magnitude of the increases in noise and dust levels that will occur are also not possible to predict at this time. However, based on the site visits to the project areas, dust created from construction activities and truck traffic could be high given the dryness of the summer period, and the commonly high winds experienced especially at the two soum centers.

i. Common mitigation measures

333. Construction management measures to mitigate common potential impacts of the ASDIP are presented below. The mitigations follow standard construction management best practice, and are consistent with World Bank/IFC Environmental Health and Safety (EHS) Guidelines (2007) for Infrastructure (i.e., water and sanitation, telecommunications, elements of health and tourism facilities, roads, and waste management). The mitigation measures are detailed further in the EMPs for the Aimags.

(i) All open excavations should be fenced, and trenches covered where public walkways or vehicles must cross. (ii) A cultural chance find management plan must be in place for cultural artifacts and property. (iii) Extra protection against possible physical disturbance of the cultural centers in all five urban centers must be implemented. (iv) Regular use of wetting agents must be employed along all sections of the roads that are undergoing civil works, or used by construction vehicles to minimize dust.

167 (v) All construction vehicles and equipment should be maintained in proper working order, and not operated at night if possible to minimize noise. (vi) Speed limits should be posted and adhered to by construction vehicles, and the public. (vii) Where possible construction vehicles should use different access roads or dedicated temporary lanes to access construction areas to minimize interference with road use by the public. (viii) Trees and other vegetation along all road corridors must be protected. All tree removal must be minimized. (ix) All trees removed for any infrastructural component must be replaced with 3 three trees for each tree removed. (x) Present and past land use inside the khashas of the Bags where ger housing will be redeveloped into apartments and TUs should be reviewed to assess whether excavated soils are contaminated. Contaminated spoil such as the soil in and around existing khasha pit latrines should be removed and disposed at the existing landfills or locations approved by the provincial environment department. (xi) Berms and/or silt curtains should be constructed around all excavation or trench sites and along exposed sections of surface waters and flood/drainage ditches to prevent soil erosion and surface water sedimentation (see below). (xii) Local workers should be used as much as possible to prevent or minimize influx of migrant workers, and incidence of social disease and community unrest. (xiii) The temporary worker camps must have adequate domestic waste collection facilities and sufficient pit latrines that are located away from public areas and surface waters. (xiv) Dedicated fuel storage areas must be established away from khashas and public areas, and marked clearly. (xv) To minimize the impact of construction and civil works activities on the public and workers the existing Mongolian Worker, Occupational, Health, and Safety (OHS) legislation or policy should be followed. Additionally, the equivalent World Bank (IFC) Environment, Health, and Safety (EHS) Guidelines (2007) for Occupational Health and Public Safety should be followed to supplement Mongolian directives. (xvi) Borrow pits and quarries used for ASDIP must be pre-approved by the Aimag provincial environment departments. The quarries and pits that are used must be fenced during operation, and restored to a safe and vegetated condition after construction phase use is finished. (xvii) Aggregates (e.g., sand, gravel, rock) that are transported to and from all construction sites in the 5 project areas by truck must be covered. (xviii) Prolonged use of temporary sand or other aggregate piles along khasha roads in the Aimag Bags in which ger housing will be upgraded should be avoided, or covered, or wetted regularly to prevent dust and erosion. (xix) Sand extraction from all rivers and local creeks must not occur. (xx) Storage of bulk fuel should be on covered concrete pads away from khashas and worker camp(s). Fuel storage areas and tanks must be clearly marked, protected and lighted. Contractors should be required to have an emergency plan to handle fuel and oil spillage.

168 e. Specific construction phase impacts and mitigations

All three Aimag centers (Ulaangom, Ulgii, and Jargalant)

Demolition of khasha houses and site remediation

334. For the khasha owners who decide to participate in ger redevelopment, the demolition of their traditional khasha homesteads and any out-buildings are not expected to create any pollution problems. There are no toxic materials in traditional khasha buildings such as asbestos. Traditional ger houses are made predominantly of animal fir, whereas non-traditional buildings are made of wood. Demolished materials that can be recycled will be salvaged with all other building materials transported and disposed in landfill sites approved by the MCUD. In particular, residual coal supplies, and khasha stoves and heaters and other appliances that cannot be sold by owners to non-participating khasha households will be collected and disposed in department of Environment - approved landfill sites.

335. Decommissioning of homestead pit latrines will follow the procedures of the ongoing ADB On-site Sanitation Project in Ulaanbaatar29. Pit latrine buildings will be disposed along with homestead buildings. The pit latrine enclosures will be broken and then the entire pit filled in with soil to allow the waste to completely decompose naturally. Adjacent soil will be spray-disinfected with a bactericide using the same techniques underway with Projects 1 and 2 of the GADIP30. All soil that needs to be excavated and removed from site will be transported to landfill sites approved by the Department of Environment.

At three Aimag centers and Umnugovi and Deluun soum centers

Safe and sustainable water supply

336. The households and businesses of all 5 project areas rely on obtaining drinking water from nearby kiosks, and transporting the water primarily by foot back to homes and businesses. Often children of families are responsible for fetching and carrying the family water to the home.

337. It is critical that this single domestic activity is not disrupted when the infrastructure works and ger housing redevelopments occur. Children and mothers must be able to walk safely and freely near the construction sites while laden with the daily/weekly supply of water. Existing pedestrian routes must be protected with barriers between all construction sites and walkways. Temporary, protected routes must be created for water transport where necessary to protect the public. Similarly, the supply of potable water to the community ger distribution kiosks must also not be interrupted from construction activities.

Batch concrete and asphalt plants

338. Temporary batch plants for asphalt and concrete may be used for the infrastructure works in the urban areas. Batch plants potentially act as point sources of environmental and aesthetic pollution for the affected sites and local community. The issues arise from potential wind and water erosion (dust and sedimentation) from stockpiles of the raw materials of sands and other aggregates, chronic noise and public safety risks from batch processing and heavy truck traffic to/from the plants. Improper handling and storage of raw materials can also cause soil and surface

29 ADB, 2016. Managing Soil Pollution in Ger Areas Through On-site Sanitation Project, Grant Project 49113-001 30 Ger Area Development Investment Program, Bayankhoshuu, Selbe, Denjiin 1000, and Dambardjaa subcenters, Ulaanbaatar.

169 water pollution from the curing chemicals in cement and hydrocarbons from (e.g., oil and thinners) for asphalt.

339. Best practice methods must be conducted to manage the creation, operation, and ultimate decommissioning of temporary batch plants. The contractor under supervision of MCUD must follow international guidelines stipulated by the World Bank (IFC) EHS Guidelines for 1) Cement and Lime Manufacturing, 2) Construction Material Extraction; and 3) Retail Petroleum Networks. The recent USEPA (2014) Code of practice Concrete batch processing can also be consulted.

Disruption of utility services

340. The extensive rehabilitation and expansion of infrastructure and utilities in the Aimag and soum centers will undoubtedly cause periods of utility outages for residents and businesses. Where possible temporary auxiliary or alternate utility service will be supplied to minimize the disruptions to the community.

Ulaangom

Flood prevention dyke improvements along levee lake

341. The 5.0km earthen dyke southwest of the city will be upgraded to prevent seasonal flooding of Ulaangom from stream-river runoff from the mountains in the west. The north end of the dyke is used to create a small lake for local drinking water and irrigation. Extra care must be taken to ensure that the berms and / or silt curtains are placed between the dyke work areas to prevent erosion and siltation of the levee lake.

Umnugovi soum center

Dumpsite rehabilitation

342. Tranche 1 will include a detailed needs assessment of solid waste management including existing dumpsites for all five urban project sites. The assessments will include water table depth and a groundwater quality assessment, and an initial clean-up and fencing of the dumpsites to stop ongoing wind-blow of garbage. The groundwater assessment is particularly important at Umnugovi soum because the Umnugovi dumpsite is being excavated by the local authorities presumably to contain the garbage without regard to the depth of the water table and groundwater which the soum depends on for drinking water. The depth of the water table and groundwater quality needs to be determined to ensure that groundwater is not being contaminated by the garbage.

Ulgii

Riverbank improvements to prevent flooding

343. A 1,250m section of the Khovd riverbank in Ulgii will be rehabilitated and improved to prevent recurrent flooding of the city during spring high flow periods. Similar, to the levee lake in Ulaangom, Care must be taken to install silt curtains and temporary earthen berms between the river and all riverbank works to prevent erosion and sedimentation of the river.

170 2. Operation phase

a. Upgraded and new infrastructure

Redeveloped Ger Housing

344. As indicated above the significant benefit of the redeveloped of ger apartments in three Aimag centers with modern central heating and bathroom facilities will be a major increase in the standard of living of the participating families. The energy efficient apartments and removal of the inefficient coal/wood burning stoves will reduce significantly the carbon footprint of the family khasha.

345. There are potential issues and impacts of the densified apartment living that could detract from the increased standard living. Potential social-family issues with the operation/occupancy of the new apartments could arise from the increased density of family and possibly extended family households. Other potential issues relate to successful affordable operation and maintenance of the upgraded, modern utility services, energy efficient building technologies

Sustainable potable water supply

346. The potential impact of the project is creation of water deficit situations from too much consumption. The planned expansion of potable groundwater supplies to the Aimag centers, and in particular, the soum centers from additional pumps and/or wells via expanded supply networks must be sustainable. At the detailed design stage the seasonal availability of potable water whether groundwater or surface water needs to be examined to confirm sustainability of the sources both in terms of quantity and quality.

Air emissions

347. A potential impact of the project is increased air pollution (CO2, NOx and SOx) that could result from the planned expansions of hot water heating networks in all three Aimag city centers (Ulaangom, Ugii, and Jargalant). Improvements to the quality of the coal-fired heating plant emissions are not planned for Tranche 1, and the present heating plants currently do not meet national or international emission standards. This means the ASDIP will need to consider upgrading the emission treatment technologies of the existing heating plants in the three cities to meet national or international (IFC-EHS – WHO) industrial emission standards in Tranche 2 or 3.

b. Agribusiness components

i. Sustainable water supply

(i) Surface waters

348. A potential impact of the agribusiness component is the creation of water deficit situations for project components that require surface water supplies, and thus, potential deficits for other (downstream) users of the water resources. This potential impact involves all 200ha and 500ha irrigation schemes that are planned. As an example, the Basin Water Management Authority for Khovd Aimag declared during the public consultations for environment that water to be diverted from the Buyant river at Jargalant for the planned irrigation system for the 500ha fodder farm will greatly exacerbate ongoing water shortage problems downstream in Myangad soum. As a result,

171 the irrigated fodder farm planned for Jargalant of Khovd Aimag was subsequently screened out of Tranche 1.

349. Thus, the feasibility estimates of required volumes of water of 0.126m3/sec and 0.314m3/sec, respectively from local rivers to irrigate the new 200ha (soum center) and 500ha (Aimag center) fodder farms need to be confirmed at detailed design stage of Tranche 1. The required water to be diverted from the rivers must account for evaporation along the open irrigation canals which can be > 1-2km.

350. Moreover, the available data on low flow discharge of potential source rivers near the irrigation schemes identified in Table 40 also need to be re-confirmed with accurate seasonal discharge measurements taken at the finalized extraction or diversion points of the source rivers. For example, using the 2018 discharge data from Table 40 the estimated 0.314m3/sec of irrigation water required for a 500ha fodder farm is approximately 35% of the low flow discharge at the nearest flow gauge station on the closest river, which would not likely be sustainable.

Tarialan soum irrigation schemes

351. Confirmation of sustainable water supplies for the two types of irrigation schemes planned in Tarialan soum (Figures 11 – 13) is also needed. Of particular interest is the planned 500ha scheme located on the lower reaches of the Teel river above Uvs lake. A national hydrologist and the participants of the public consultations on the Kharkiraa diversion and storage scheme in Tarialan soum indicated overwhelmingly that the lower Teel river dries up during the summer and does not reach Uvs lake as a result of summer low flows and the extensive ongoing extractions from the river for agriculture. Thus, the actual seasonal flows of the Teel river at the finalized point of extraction for the 500ha irrigation scheme must be ascertained at detailed design phase to ensure sufficient water is available for the irrigation scheme.

352. Contrastingly, the analysis of seasonal flows in the Kharkiraa-Teel river at Tarialan (Table 11) that was conducted by the engineering firm hired for the MET in 2018 clearly indicate that the planned diversion and storage of 3% of spring-summer monthly flows is sustainable, and are relatively small relative to average seasonal flows in the river at the mouth of the diversion canal. Thus, further examination of water availability for the Kharkiraa-Teel river diversion and storage scheme is unwarranted.

(ii) Groundwater

353. Similar to the irrigation schemes, the availability of sustainable groundwater supplies at the projects sites, and the potential impact of the feasibility estimates of the water demands of planned meat processing facilities and Disease Free Establishments of the Agroparks on available groundwater yield need to be determined at detailed design phase.

(iii) Hydro-geological assessments

354. Thus, a key activity at the detailed design phase of Tranche 1 will be to conduct hydrological assessments at the project sites to determine the low flow discharge conditions at the finalized extraction points of all source rivers of the irrigation schemes, as well as the competing demand of downstream users of the rivers. Similarly, hydrogeological assessments at the sites are also needed to ascertain that sufficient groundwater is available for the Agropark

172 facilities along with other users of groundwater in the affected areas. Together the water budget information will clarify sustainable water resources for the project.

ii. Impact of Tarialan irrigation schemes on Uvs Lake Strictly Protected Area

355. The unique endorheic ecosystem of Uvs Nuur Lake and peripheral wetland has been shaped in part over the millennia by the seasonal discharges of all rivers emptying into the lake. The unique ecosystem and constituent fauna and flora is why Uvs Lake has been designated as a Strictly Protected Area by the government. Thus, diversion of water from a river discharging to the lake could constitute a potential impact on this area conservation significance as per SPS (2009). However, the scope of the two types of irrigation schemes at the FS stage, along with information obtained on the lower Kharkiraa-Teel river basin suggests that the two irrigation schemes will not affect Uvs lake ecosystem as follows:

356. Firstly, the results of the public consultations in Tarialan soum, and a national hydrologist who has studied the lower Teel river indicated strongly that the lower Teel river dries up during summer and does not reach Uvs lake. Thus, if the Teel river currently does not discharge into the Uvs lake during dry season, then the diversions of river water for the two irrigation schemes cannot present an impact to the lake.

357. Secondly, the planned diversion and storage of 3% of flow from April-August for the Kharkiraa-Teel river is a very small volume relative to the main stem flow (Table 11). Similarly, the estimated required diversion of 0.315m3/s for the 500ha irrigation scheme is about the average monthly 3% diversion planned for the Kharkiraa-Teel irrigation scheme. Thus, information at the FS design stage of Tranche 1 indicate that the potential impact of water extractions for the two Tarialan irrigations schemes on the Uvs Lake are either nonexistent or negligible.

C. Cumulative or Induced Impacts

358. A major positive cumulative impact of ASDIP is increased standard of living of affected communities caused by the comprehensive improvements to urban infrastructure and services. Moreover, the significant induced impact of redeveloped ger housing is the effect of improvements to individual and family health on individual and family prosperity, and ultimately strengthened ger socio-economy.

359. Another major positive induced impact of ASDIP is the dual climate change mitigation of the future reductions livestock herds on the sequestration of CO2 into improved pasturelands, and the reduction in emissions of methane (CH4) produced by livestock.

360. Potential negative, cumulative impacts of ASDIP could arise from the water consuming components of the project which could create new seasonal water deficits or could aggravate existing seasonal deficits. Water consumption by planned irrigation schemes could create or exacerbate low flow period water shortages for downstream, ongoing uses of the rivers such as for agriculture. Similarly, the consumption of groundwater for other agribusiness components such as meat and product processing facilities of the Agroparks could create or exacerbate dry season groundwater deficits among other groundwater users such as household wells and agriculture.

D. Existing Facilities of Feasibility Design of Tranche 1

361. The feasibility design of Tranche 1 has identified two types of “existing facilities” (SPS 2009) which are the 3 coal-fired heating plants (HCP) and 3 wastewater treatment plants (WWTP) in Ulaangom, Ulgii, and Jargalant. The WWTPs in the three Aimag centers will be replaced or

173 completely redesigned during Tranche 1 as part of the overall improvements to wastewater collection and treatment. The WWTPs will be replaced because the original Soviet technologies and operations of the plants are no longer functioning as originally designed with the original plant processes essentially having been abandoned. As a result, the WWTPs as they are currently operating do not meet national or IFC-EHS (2007) environmental protection standards with specific reference to treated effluent quality. Thus, the corrective actions (SPS 2009) for the existing WWTPs will become the new or completely upgraded plants that are produced by Tranche 1 of the ASDIP.

362. The planned expansion and upgrades to hot water heating networks in the three Aimag centers do not include the facilities at the heating plants other than possible upgrades to water circulating pumps at a plant. During the site visit consultations with the operators of the HCPs it was determined that the emissions of the plants do not meet national emission standards, and therefore do not meet IFC-EHS (2007) emission standards. Required upgrades to the HCPs will be assessed at the detailed design stage of Tranche 1 for implementation in Tranche 2. The required upgrades for the plants determined at detailed design stage will become the “corrective actions” (SPS 2009) for the plants that are implemented during Tranche 2.

E. Climate Change

363. The ASDIP will contribute to the climate change mitigation and adaptation agendas of the ADB, Green Climate Fund (GCF), and the government through: (i) adaptation by addressing climate change vulnerabilities of aimag and soum centers through the improved climate resilient infrastructure; (ii) adapting the animal husbandry sector to the expected reduction in productivity of Mongolian rangelands due to climate change; (iii) mitigation through carbon sequestration resulting from restored rangelands and through reduced methane emissions; (iv) better management of water resources; (v) mitigation opportunities in the urban sector through improved energy efficiency and the uptake of renewable energy in aimag and soum centers. The specific impacts from ASDIP are detailed in the separate climate change and mitigation assessment of the Funding Proposal (FP) for the GCF. From the FP-GCF the key specific impacts of the ASDIP are summarized as follows:

- 369,200 direct beneficiaries from adaptation (calculated as the population of the aimags targeted by the program)31. The population in the aimags will benefit through more resilient cities, improved grasslands, reduced air pollution from dust, and enhanced water resource availability. - estimated total mitigation of 112.3 million tCO2e comprised of: o (i) 94.0 million tCO2 in direct emission reductions over the investment lifetime from enhanced soil carbon sequestration. The estimate is based on a conservative coefficient derived from ADB studies and an assumption of a slow process of restoring equilibrium in soil carbon. The computations provided in the Climate Change Assessment of the FP-GCF is based on the IPCC methodology32; o (ii) 17.2 million tCO2e in direct emission reductions from reduced methane and nitrous oxide emissions resulting from a reduction in herd sizes. The Climate Change Assessment provides the calculation method applied; and

31 Source: National Statistics Office (2019) National Statistical Yearbook 2018, Table 3.5, accessed through www.1212.mn. Population figures are for 2018. 32 The ASDIP calculations are very conservative. Our estimate equals 4 tCO2/hectare over the project’s lifetime. The recently approved GCF project in Kyrgyz Republic (FP116) also contained a rangeland management component, with an estimate mitigation of more than 23 tCO2/hectare over the project’s lifetime.

174 o (iii) 1.1 million tCO2 in direct emission reductions over the investment lifetime from urban energy efficiency and renewable energy. 364. The separate Climate Change Assessment Linked Document (CCA-LD) for the ASDIP was prepared based on the climate change assessment of the FP-GCF, along with the climate change adaptation cost estimates for the infrastructure components provided by the project engineering team.

Estimated cost of climate change adaptation and resilience

365. The estimated marginal increase in the cost of some infrastructure investments at the Aimag and soum centers of Tranche 1 for climate change adaptation/resilience is estimated at USD $309,035. for urban drainage, $4,851,143. for flood control, $202,900. for solid waste management, and $89,647. for water supply development in the soum centers.

VII. ANALYSIS OF ALTERNATIVES

366. The major alternatives to the project design of Tranche 1 focused on: (i) the “no Tranche, alternative; (i) deletion of either the urban infrastructure or agribusiness component groups at an Aimag or soum center; (iii) the aggregated versus disaggregated Agropark constructs; and (iv) placement of some agribusiness components.

367. The “no tranche” alternative was dismissed quickly because the improvements to the standard of living and health of project communities would not be realized from improved infrastructure. No agribusiness value chain improvements would maintain the status quo of inferior quality agro-production, maintain over grazing, and not realize the climate change mitigation of net reduced tCO2 emissions from increased CO2 sequestration in restored pastureland and reduced enteric methane production from reduced herd sizes. The benefits of implementing Tranche 1 far outweigh potential negative impacts of implementing Tranche 1.

368. Deleting the urban infrastructure components from a center would not improve living conditions in the centers which would dissuade investment into the agribusiness components. The deletion of the agribusiness components would result in the same negative impact of the “no tranche” alternative.

369. The initial plan to disperse the Agropark components (i.e., animal storage, meat processing and storage, laboratories, veterinary services, and agro-production plants around the Aimag and soum centers instead of in one place (a park) with Disease Free Establishments to house most facilities was abandoned because the cost of supplying required infrastructure including waste management was much greater than at a single park location.

370. Changes to the locations of the some Agribusiness components (i.e. entire Agroparks, and irrigation perimeters) occurred to reflect growing degree days, perceived water sources, and impacts on sensitive ecological resources such as Khar Us Nuur National Park and critically endangered wildlife habitat located in the Saiga Antelope Game Reserve in Mankhan and Myangad soums, respectively in Khovd Aimag.

175 VIII. INFORMATION DISCLOSURE AND GRIEVANCE REDRESS MECHANISM

A. Information Disclosure

371. The extensive household consultations and social surveys conducted for the ASDIP to clarify the needs, preferences, and understanding of ASDIP are reported separately as part of the social and financial dimensions of the project. These consultations set the stage for continued information disclosure to the khasha owners and affected stakeholders/people (AP) throughout the affected areas of the 5 Aimag and soum centers. The separate public consultations for environment reported above supplement the extensive social data collections.

372. In addition to regular renewal and updates to the socioeconomic information collected above, the IEE will be easily available to all affected residents and stakeholders contacted during project preparation, in written and verbal forms, and in local language. At a minimum the Executive Summary of the IEE should be translated to Mongolian and distributed to all APs. The IEE should be available on the web site of the MCUD/ALAMGac which is the executing Agency (EA) of ASDIP as well as the web sites of MOFALI and AMC-DBM, and web site of the MET at their respective UB and Aimag center offices.

373. Similarly, all ASDIP reporting with specific reference to stakeholder consultation minutes, environmental monitoring, and reports on EMP implementation released by the MCUD/ALAMGac and MOFALI/AMC-DBM should be available at the same offices and web sites. The IEE will also be available in the Aimag project offices (APO), and on the ADB web site. During implementation, and after completion of the infrastructure and agribusiness components all environmental and EMP reporting submitted by the EA (MCUD) will also be available on the project and ADB web site.

374. As a means to determine community involvement and interest in the ASDIP, and to learn from the level and type of interests, the type and frequency of information and reports request by the community will be monitored. This includes environmental monitoring reports prepared by the UB-PIU, and the APOs. The use of the web sites, i.e., number of web site “hits”, and document requests should be monitored.

B. Grievance Redress Mechanism (GRM)

375. A project-specific environmental grievance redress mechanism (GRM) has been established to receive, evaluate, and facilitate the resolution of AP’s concerns, complaints, and grievances about the environmental performance at the level of the project. The GRM will also entertain social issues that may be identified by stakeholders, however, the social safeguard team established a separate GRM for social issues due to the diversity of project components and locations. The GRM (Figure 49) will aim to provide a time-bound and transparent mechanism to voice and resolve environmental, safety, and social concerns linked to the project. The GRM is targeted for all stakeholders, potentially affected persons, and construction workers who work on the project. All project agencies and affected stakeholders will be aware of the GRM and will know how to inform the PMO in UB and the Aimag POs (APO) of any complaints or issues of project.

376. The APOs in the Aimag centers shall establish and maintain the project GRM to receive and facilitate resolution of any social or environment-related concerns or grievances about the project. The APOs in the Aimag centers will assign fulltime GRM staff at the soum centers of Umnugovi and Deluun who will be responsible to implement the exact same GRM at the soum

176 levels. The GRM will address affected people’s issues promptly, using an understandable and transparent process that is gender responsive, culturally appropriate, and readily accessible to all stakeholders at no cost and without retribution. The GRM does not impede access to the national legal system.

377. The GRM will be introduced to affected communities during follow-up community consultations and made publicly available to stakeholders at the three Aimag and two soum centers. In the event of a grievance issue, up to three stages will be implemented at each Aimag and soum center as follows.

(i) Stage 1 (maximum 7 days): If a concern arises during construction, the affected person(s) may raise the issue with the contractor, PIU-GRM staffer at Aimag project office, Project Implementation and Supervision Consultants (PISC) or community representatives. All agencies will be aware of the GRM and will be requested to immediately report any incidents to the PIU GRM staff. If the issue is resolved directly between the affected person(s) and contractor, no follow-up is required. But the log/record shall be saved in the GRM logbook at the PIU office in either Aimag center or soum center.

(ii) Stage 2 (maximum 15 days): If the issue is not resolved at Aimag project offices (APO), the issue will be forwarded directly to the PMO in UB One Stop Shop where the ALAMGac/MCUD or MOFALI, or AMC-DBM intervenes. The UB-PMO One Stop Shop will reply within two weeks and keep a written record of the whole process.

(iii) Stage 3 (maximum 15 days): If the issue is still not resolved, the UB-PMO will, if agreed by the affected person(s), arrange a meeting with MCUD, and relevant community representatives to identify a solution. If the issue still cannot be resolved it will be referred to the relevant higher level authorities. The MCUD with support from PMO may report the process to ADB at any of Stages 1–3, but will do so immediately if Stage 3 is reached.

177 Figure 51: Grievance Redress Mechanism

Affected person

Field Level: Contractor, PIU-Aimag project Yes office designated focal person Within 7 days (environment, safety, or st Grievance redress 1 level social issue), community and record keeping Grievance representatives

PMO: Yes ALAMGac (One Stop Shop) Within 15 days nd Designated persons of Grievance redress 2 level and record keeping Grievance ALAMGac designated focal person (environment, safety,or

social issues), & ADB contact.

MCUD Level Yes Within 15 days rd Designated focal person Grievance redress 3 level Grievance (environment, safety, or and record keeping social issues), MCUD/PMO,

community representatives

MCUD - Ministry of Construction and Urban Development, ALAMGac – Land management, Geodesy and Cartography Source: Asian Development Bank.

378. Community - wide public awareness campaigns will ensure that awareness on grievance redress procedures is generated through the campaign. The project management office (PMO) designated focal person (environment and social issue) and community development consultants will conduct community-wide awareness campaigns to ensure that poor and vulnerable households are made aware of grievance redress procedures and entitlements, and will work with the IA/PIU and, project implementation and supervision consultants (PISC) to help ensure that their grievances are addressed. Clearly visible billboards must be placed at all construction sites outlining the GRM process, names of responsible parties, and contact numbers of responsible parties.

379. Affected persons (APs) will have the flexibility of conveying grievances/suggestions by dropping grievance redress/suggestion forms in one stop shops that have already been installed by MCUD or through telephone hotlines at accessible locations, by e-mail, by post, or by writing in a complaints register in one stop shop.

178

380. Weather-protected Complaint Boxes will be placed at all constructions sites, existing social service buildings, and at community offices as a formal location for people to submit written comments/issues during construction phase. Information at al boxes will be updated contact names for the PIU, local contractor, and local implementing units. Also included at each box will be simple forms and pencils to facilitate the communication process.

381. Careful documentation of the name of the complainant, date of receipt of the complaint, address/contact details of the person, location of the problem area, and how the problem was resolved will be undertaken. The project management office (PIU) GRM officer (who will responsible for environment and social issue) will have the overall responsibility for timely grievance redresses on environmental and social safeguards issues.

1. Record keeping.

382. Records of all grievances received, including contact details of complainant, date the complaint was received, nature of grievance, agreed corrective actions and the date these were effected and final outcome will be kept by the PIU and GRM staff at Aimag and soum centers. The number of grievances recorded and resolved and the outcomes will be displayed/disclosed in the PIU offices, MCUD/ALAMGac and MOFALI/NFPUG offices, and on the web, as well as reported in monitoring reports submitted to ADB on a semi-annual basis.

2. Periodic review and documentation of lessons learned.

383. The PIU officers at the Aimag project offices with input from PMO (MCUD/ALAMGac) and AMC-DBM responsible for environment and social issues will periodically review the functioning of the GRM at each project site and will record information on the effectiveness of the mechanism, especially on the project’s ability to prevent and address grievances

IX. INSTITUTIONAL CAPACITY AND TRAINING NEEDS

384. Currently there is insufficient experience and capacity for environmental assessment and management amongst project counterparts responsible for the implementation of the Aimag EMPs. Specifically, staff of the PMO (ALAMGac), AMC-DBM, and the Aimag project offices (APO) require capacity development and training. The PISC of Tranche 1 will develop and deliver training courses to the assigned environmental specialists of the PMO, AMC-DBM, and APOs The purpose of the course(s) is to strengthen the ability of the project owner and implementing agencies to oversee implementation of the EMP by construction contractors.

1. Worker Safety Programming

385. Capacity development and training for utility operators of for example the new or upgraded WWTPs, heating plants, and water treatment plants is also part of the Tranche 1. Similarly training and capacity development will be delivered for new facilities of the Agroparks such as meat processing facilities. Of particular importance is the establishment of international-accepted worker safety training and programming at the new facilities. The requirement of operator training and safety for the facilities are part of the environmental loan assurances of the ASDIP. The safety

179 programming plan will be aligned with the emergency response plans that have been drafted for the Aimag EMPs.

386. Training on the implementation of an EMP should address two thematic areas. The first area should be principles environmental management focused on the potential impacts of subproject activities on the natural and social environment. The second area should be environmental safeguard requirements of the ADB and GoM with specific reference to the Aimag EMPs.

X. CONCLUSIONS AND RECOMMENDATIONS

387. The construction phase of the diverse array of infrastructure components require careful mitigation measures to ensure construction disturbances and impacts are minimized and managed with standard construction practice and mitigation measures. Of particular importance is that the current practice of manual transport of household water needs from local kiosks must receive maximum protection during construction phase so that no water supply to any household is disrupted for a single day.

388. The infrastructure and agribusiness components of the ASDIP will not negatively impact protected areas, critical wildlife habitat, or rare or endangered wildlife. This was ascertained with the early screening and removal of the Mankhan soum and Myangad soum sites in Khovd Aimag which contained all three sensitive ecological characteristics, and the determination that the feasibility designs of the two types of irrigations schemes planned on the Kharkiraa-Teel river in Tarialan soum, Uvs Aimag will not impact the Uvs lake protected area.

389. The water requirements of the project components with special reference to the irrigation schemes and Agropark facilities need to be clarified along with the source water availability to ensure sustainable water resources are available for all users in the project areas.

390. The Aimag EMPs developed for ASDIP provide impact mitigation plans, environmental monitoring plans, and specify the institutional responsibilities and capacity needs for the environmental management of ASDIP. The EMPs will need to be reviewed and updated at the detailed design phase to ensure that EMPs fully addresses the potential impacts of the final project component designs.

391. The IEE concludes that the description of the feasibility designs of Tranche 1 of the ASDIP combined with available information on the affected environments is sufficient to identify the scope of potential environmental impacts of ASDIP. Providing significant changes do not occur to the design of one or more of the ASDIP components, that information on water resources is obtained at detailed design, and that new sensitive environmental or social receptor data are not discovered, the ASDIP will remain Category B for environment and will not require further detailed environmental impact assessment (EIA).

180 APPENDIX A: ORIGINAL RAPID ENVIRONMENTAL ASSESSMENT OF THE ASDIP

URBAN DEVELOPMENT

Rapid Environmental Assessment (REA) Checklist

181

182

183

184

185 APPENDIX B: NATIONAL QUALITY STANDARDS RELEVANT TO ASDIP

Code Standard

MNS 6298:2011 Boiler Emissions Guidelines: The Permissible Level of Air Pollutants from Power and Heating Plants.

The Permissible Level of Air Pollutants from Operations of Water MNS 5919:2008 Heating and Steam Generating Facilities at Power and Heating Plants

MNS Environmental Protection: Rehabilitation of Eroded Land/Category 17.5.1.18:1983 of Eroded Land.

MNS Environmental Protection: The General Requirements for 17.5.1.19:1992 Rehabilitation of Eroded Lands

MNS 3473:1983 Environmental Protection. Land, Land Use and Terms and Definitions

MNS 17.5.13:1980 Environmental Protection: Rehabilitation of Eroded Land, Terms and Definitions

MNS The System of Standards for Environmental Protection and Basic 17.0.0.06:1979 Rules

MNS 5914:2008 Environmental Protection: Rehabilitation of Eroded Land, Terms and Definitions

MNS 5918:2008 The General Technical Requirements for Vegetation of Eroded Land MNS 17.2.0.07:1979 Air Pollutants and Category MNS 17.2.1.17:1980 The Terms and Definitions of Industrial Pollutants to Atmosphere

MNS 4585:2016 Air Quality, The General Technical Requirements

MNS 3383:1982 The Terms and Definitions of Pollutant Sources for Atmosphere

MNS 5885:2008 The Permissible Level of Pollutant Substance to Air/General and Technical Requirements

MNS 3113:1981 The Technical Requirements for Determination of Air Emissions MNS 17.2.3.16:1988 Guidelines for Monitoring of Air Quality in Urban Settlements

MNS 6063:2010 Air Quality: Permissible Level of Pollutants MNS ISO 14064- 2:2015

186 Code Standard Greenhouse Gas- Second Chapter: Indicative Guidelines for Reporting and Monitoring on Changes and Adsorption of Greenhouse Emissions

MNS 3384:1982 The General and Technical Requirements for Sampling of Air Quality Test MNS 17.1.1.10:1979 The Terms and Definitions for Water and Water Use

MNS 4047:1988 Guidelines for Monitoring of Surface Water Quality

MNS 3342:1982 The General Requirements for Protection of Underground Water from Pollution

MNS 6148:2010 Water Quality: The Permissible Level of Pollutants for Underground Water

MNS ISO 5667 13 Water Quality-Sampling: Chapter 13: Sampling method for sludge 2000 from wastewater treatment plants

MNS 0899:1992 Sanitary Requirements for Sources of Water Supply to Urban and Household Purposes

MNS 0900:2005 Sanitary Requirements and Safety Assessment for Drinking

MNS ISO Water Quality-Sampling: Chapter 1: Sampling method for drinking 5667:1:2002 water

MNS ISO 5667- Water Quality-Sampling: Chapter 3: Guidelines for handling of 3:1999 water samples

MNS ISO Water Quality-Sampling: Chapter 6: Sampling method for rivers 5667:6:2001 and streams

MNS 4943:2015 Water Quality: The General Requirements for Wastewater MNS BS 8525- 1:2015 The General Requirements for Grey Water

MNS ISO 5667- Water Quality-Sampling: Chapter 10: Instructions for Sampling 10:2001 from Wastewater

MNS ISO 5667- Water Quality-Sampling: Chapter 7: Instructions for Sampling from 7:2002 Water and Steam at Heat only Boilers (HOB)

MNS 6561:2015 Water Quality. General Requirements for Wastewater discharged to Sewerage Network

MNS 5666:2006 Water Biological Test: Determination Method of Dynamic Sludge ate Wastewater Treatment Plant

187 Code Standard

MNS 4288:1995 General Requirements for location, treatment process and levels of Wastewater Treatment Plant

MNS 3297:1991 Soil: Soil Quality Indicators and Norms in Urban Settlements

MNS 5850:2008 Soil Quality: The Permissible Levels of Soil Pollutants

MNS 3298:1991 Soil Quality: The General Requirements for Soil Sampling

MNS 3985:1987 Soil. Types of Sanitary Indicators of Soil

MNS 2305:1994 Soil. Instructions to Sampling, Packing and Storing of Soil Samples

MNS 4968:2000 Work Safety: General Requirements for Work Place

MNS 4994:2000 Work Safety: Vibrations Norm and General Requirements for Safe Operations

MNS 5147:2002 Electric and Static Conditions. Permissible Acid Level at Workplace

MNS 5150:2002 General Requirements for Safety Procedures with Electric Appliances

MNS 5146:2002 Work Safety: Electric Works; Protection and Wiring.

MNS 5145:2002 Electric Safety: The Maximum level of voltage and electric current

MNS 5002:2000 The General Requirements for Work Safety: The noise norms MNS 0012.4.005:1985 The Labor Protection Equipment. Tools and Types

MNS 4244:1994 The General Requirements for Fire Safety

MNS 5390:2004 Work Safety and Sanitary Conditions

MNS 6458:2014 The General Requirements for Handling Toxic and Hazardous Chemicals

MNS 3474:2003 Plant Protection: The Terms and Definitions

MNS 5344:2011 The General Requirements for Transportation of Household Wastes

MNS 5872:2008 The Service Requirements for Power Supply MNS 5043:2011

188 Code Standard The General Technical Requirements for Boilers with capacity of 0.10 МВт - 3.15МВт

MNS 5041:2001 The General Technical Requirements for Boilers with capacity up to 100 кВт

MNS 5045:2001 The Technical Requirements for Water Heating Boiler with solid fuel

MNS 5643:2006 The General Technical Requirements for Power Transmission Sub Station with Capacity of 25-2500 кВ•А

MNS 4084:1988 The General Technical Requirements for Water Heating Unit with Solar Panel

MNS 5207:2011 The Technical Requirements for Installation of the Fiber Optic Cable

MNS AASHTO The Technical Requirements for Concrete Structure of Flood 86:2005 Protection Facilities

MNS ISO Operation of Water Supply and Sewerage Network: Operations 24511:2012 Management and Maintenance of the Sewerage Facilities

MNS ISO Operations Management and Maintenance of the Water Supply 24512:2012 Facilities

MNS 5682:2006 The Technical Requirements for Pedestrians and Access for Disable Persons

MNS 4597:2014 The Technical Requirements for Road Signs

MNS 4759:2014 The Technical Requirements for Road Marks

MNS 4596:2014 The Operational Instructions for Road Signs, Marks, Fences and Traffic Lights

MNS 5342:2007 The General Requirements for Auto Parking Facilities

189

Specific Mongolian Environmental Quality Standards

B-1: Surface water quality standards

B-2 Noise Level Standards

190

B-3: Groundwater Quality Standards

191

B-4: Ambient Air Quality Standards

192

B-5 Soil Quality Standards

Table A-6: Boiler Emission Guidelines

193 APPENDIX C: COMPLETE PUBLIC CONSULTATION MEETING MINUTES

1. Minutes of Public Consultation Meeting in Jargalant, Khovd Aimag center, held on 2 October 2019:

Photos taken during the public consultation

194

• In general, the environmental pollution, especially the air pollution, and the living conditions, such dirty and dusty streets and household wastes dumped in the streets, are very bad, there is a lack of appropriate street cleaning, there are paved and unpaved auto roads which do not have designated pedestrian roads; • The environment pollution, the waste, the waste dumpsite are in terrible conditions, there is a need for recycling, for instance bottles, and there is a need for waste collection, and recycling/processing; • The people who live in the aimag center needs to be responsible as well, for instance dispose of the waste properly, but not to dump in the streets, or participate actively in projects such as ASDIP and support its implementation for well being of all who live in the aimag center; • The ASDIP projects ger are development component needs to be explained more and clarified, where and how the project will be implemented, will the project swap land for an apartment housing, how the ger area residents take part in the project etc, • How Alag Tolgoi bag, the target ger area was selected as the pilot area, will the project provide the infrastructure only for the Alag Tolgoi bag, or for the entire aimag center; • How ger area landowners, who want to continue live on their plots, grow vegetables and berries, can participate in the project; • It is appreciated that such a big investment project will be implemented in the Khovd aimag to benefit its residents, there are similar projects and initiatives such as “Let’s live in our khashaas comfortably”, “Eco toilet” etc. We understand well that all these projects are for the benefit of the people in the aimag. On the other hand, the people, ourselves need to be more responsible, for instance people who received “Eco toilet” are not fully or properly using this toilet. Both the people and the local government need to support and actively take part in these projects, for the well being of everybody and for better Khovd city; • Kindergarten No. 8 in Alag Tolgoi bag does not centralized heating and water supply, therefore, it is very important that this kindergarten is connected to the infrastructure networks; • It is informed by the local officials that there is a need for substations/distribution stations to extend the trunk infrastructure to the households in areas where there are already trunk infrastructure networks, therefore, ASDIP should build substations/distribution stations to enable the households to get connected to the infrastructure networks; • In some of the streets of Alag Tolgoi bag, there are heating and water supply pipes installed already 2-3 years ago, the residents in this are request the aimag government to connect the households to these networks, but the aimag government informs due to lack of funding, the households cannot be connected. Therefore, it is requested to connect the households in these areas to the centralized infrastructure networks within ASDIP. This will benefit not only the households living there, but also reduce the air and other environmental pollutions. Although, many people are retired and have little income, if the project will come, then people will be willing to obtain subsidized loan and get connected and improve their housing conditions; • Street lighting is being installed in the streets in the ger areas, these needs to be extended to more areas and maintained well, in some areas the lighting is not working properly; • In some streets in ger areas there are trunk infrastructure for heating/water/sewerage etc., in some places the manholes’ hatch/cover are removed, and the hole is open, this is dangerous for the pedestrians/children, but also for cars, there is a need to repair such places for safety; • There are many sections of paved auto roads, which are broken due to the water flooding (due to melted ice and rain), these needs to be repaired and maintained; • The project has chosen Alag Tolgoi bag as the pilot area, but there are other worse off areas such as Malchin (Herders) district, where the streets are dusty. The project should have chosen such areas as priority. Since the Alag Tolgoi is already chosen, the project should choose this area in the second stage; • In general similar projects spend quite some amount of money for meetings, workshops etc. It is requested that the this project invests in tangible development activities; • There are old apartments in the Rashaant bag, which has very bad heating, and this year the heating pipes are being renovated and expanded. Can the residents of this apartments, 2-3

195 households on the first floor, be included in the project and obtain some financial assistance to improve their existing apartment housing conditions; • How the State Housing Corporation, TOSK, will take part in the project, what benefits it will offer; • Although, some people do not fully understand the project, everybody has received a general understanding of the project and people are supporting the project. There are many elderly people who have difficulties to live in ger areas without infrastructure connections, and have to deal with daily routine such as preparing the fire fuel, clean and dispose of ashes, get water etc., and are dependent on their children. Therefore, it is proposed that within the project there should be sufficient social housing provided for those in needs, such as elderly people.

2. Minutes of Public Consultation Meeting in Buaynt soum of Khovd aimag:

Date and time: 3 Oct 2019. 4-6 PM Venue: Conference room of the Governor office of Buyant Soum of Khovd Province Audience: Vegetable growers of Buyant Soum- potential affected small scale business people located downstream of an ASDIP proposed irrigation activity of Agriculture component 18 persons (7 men and 11 women) were gathered in the conference room, including soum parliament speaker, deputy soum governor, agricultural specialist, bagh governor, and 15 vegetable growers. After a short introduction of ASDIP project components to participants, I have asked the following questions: • Main economic activity of the soum • What is their business and how many vegetable growers • How many areas, where vegetable is cultivated and grown • Who is the main buyers/consumers • Water sources that vegetable growers use and • What are the challenges of vegetable growers as water users of Buaynt river

The following info are found: • Buaynt soum has five baghs (smallest admin unit) and main economic activity for four baghs are livestock breeding and for one bagh that is located in soum center is vegetable growing (potato, vegetable and fruits such as water melon and honeydew melon) • There are 300 officially registered vegetable growers and additional 300 persons, who not officially registered as vegetable growers. • According to Buaynt soum statistics, it has 678.9 ha of vegetable production and 8,153 ha of hay production areas along the Buyant River in downstream of Khovd aimag center • Vegetable growers in Buyant soum produce 80% of total vegetables and another 80% of hays produced in Khovd aimag and they sell these products to surrounding 5 aimags and to UB city. The other 20% of vegetable producers in aimag are of Khovd soum 10% (in the west side of Khovd aimag center), Myangad soum about 5%, which also fed by Buyant River and Bulgan (it is located in far south close to border with China). • Vegetable growers of Buayant, Khovd and Myangad soums are entirely dependent on Buyant River water and they not use ground water, which they say scarce in the river basin. Also, 80% of hay produced in Khovd aimag belong to Buaynt soum. • The challenges of vegetable growers are as follow: o Surface water shortage during the vegetable growing season starting from mid of April through June and July. As there are many competitors among vegetable growers for watering of their areas, frequent disputes over water use rights are happening and many of them spent nights to guard to ensure water is available in their areas. Upon long term disputes, they finally found a way to share water flows through their areas via establishing schedules among water users. It was also noted that during vegetable growing season, Buaynt river flow does not reach to Khovd River, which in turn flows to Khar-Us Lake (National Park, where many rare and endangered bird species harbor), and instead the river water is entirely spent for irrigation via handmade channels within vegetable grown areas

196 of Buaynt Soum. All vegetable growers and soum officials expressed that project proposed irrigation activity may negatively impact downstream users, which are experiencing water scarcity problem during the planting season. o In addition to water resource competition of Buyant River, Mr. Nergui, Soum parliament speaker and Mr. Orgih expressed their concerns about the inadequacy of waste water treatment plant of Khovd aimag center and effluent that goes to Buyant River.

All of those expressed about the possible extreme water shortage due to project proposed irrigation activity to be taken during spring vegetable plantation season, made recommendation to use land for project irrigation in the Khovd River basin area that is located in close to Myangad soum center to avoid possible future conflicts over water resource of Buyant River downstream users. Photos taken during the meeting and list of meeting attendees with their names, age, sex, contact address, mobile phones and their signatures are enclosed to this text.

Photos taken during the meeting

3. Public consultation in Deluun soum, Bayan-Ulgii aimag, held on 4 October 2019. There were more than 160 participants in the meeting. The meeting was attended by the residents of Deluun soum center, herders, representatives of agriculture and credit and savings cooperatives, pasture user groups, and government officials. Among the government officials, the Governor of Bayan-Ulgii aimag, the governor of Deluun soum, were present. The participants’ suggestions, comments and questions were as follows. o In general, the residents are very much supporting the ASDIP, and are keen for its soonest implementation and expressed gratitude to ADB and Bayan-Ulgii aimag and Deluun soum government for initiating this project. Couple of elderly participants expressed gratitude and

197 emphasized that the project will create proper living conditions in the remote rural areas and will benefit greatly their children and future generation. o It is understood that the project will be investing in the trunk infrastructure, in new public facilities, improvement and extension of existing public facilities such as kindergarten, school, hospital etc. However, there seem to be no investments in the equipment for the school, for instance computers, music instruments, classes of arts and English language etc. for the children. The computers in the school are very old, more than 10 years old, and out-dated and have very low capacity, or there are no musical instruments etc. in the schools. Therefore, it is suggested that the project provides investments in the required classes, equipment and instruments for the children for better education. The old equipment and instruments are of no use, there are no appropriate class rooms for music or English classes. o There is a need to develop the ger areas in the soums by connecting the ger areas with heating, sewerage and water networks. Will the project do any work on this? o The project team has been working in the soum number of times and visited the school. It was discussed to make improvements in the school facilities and build new facilities such as multipurpose hall for arts and performances, canteen, dormitory etc. Have these been planned to be implemented. o The dormitory for 300 children is an urgent issue. Can this be built next year? The herders from remote areas of the soum really need their children to have comfortable dormitories in the soum center. o The herders of bags 1, 2, 3 and 10 have summer pastures and camps in Talnuur area. In the warm seasons, the river in this area causes flooding and muddy ground, and makes difficult the access to and from this area. Can the project support the herder households in this area by building a bridge over the river? o In one of the bags, in Chigertei, there are more than 100 herder households who have their summer pasture and camp and the river there causes flooding, swamp and muddy terrain issues and this restricts the access to and from this area. Therefore, it is asked to build a bridge in this place for these herders households to enable easy access. o On the Buyant river in the south of the soum center, there is wooden bridge which is now in bad condition, for safe and better access for the herders in that area, can the project support improving the bridge by building concrete bridge? o The environmental and natural conditions are degrading in the soum, for instance the pasture land overgrazed and it causes desertification, the little forest area, some 10 km in length, in the soum is being reduced due to animals eating the young, small trees and the old trees or remains fallen trees are not cleaned. There is a need to protect and expand this forest area based on scientific methods and approaches. o There is a study on the Deluun soum children’s health and the results showed that the children’s teeth is in bad condition, and it was stated that this was due to the water quality the soum residents use. Thus, it is necessary for the soum residents to have better quality water supply. o The residents in the soum center want to live in comfortable and healthy housing conditions. Some households have well on the plots and consume this water, which is not of good quality. Therefore, it is requested that the project provides good quality piped water, with appropriate water cleaning technology and facilities, to the households in the soum center ger areas. This is the first high priority for the residents. It is considered that will be totally possible to provide good quality piped water to the houses of the households in the ger areas. The soum government has already have done the detailed technical design for water reservoir and piped connections to the households in the ger areas. o Also, there is a report that the residents are not healthy due to the consumption of a lot of salt. This might be partly because of drinking tea with salt. But also, it is due to the consumption of a lot of salted meat. The meat is prepared, salted for it not to get rotten and to be stored for long period of time before it is used. Storing for long time, from about December to July, as animals are not slaughtered until July/August, when they get fattened, and consuming salted meat is due to lack of storage facilities. Therefore, storage facilities are needed for the residents of the soum.

198 o There is no proper storage for vegetables for the kindergarten children. The storage facilities for the food/vegetables for the kindergarten and school and children is very important. o All the food staff for the children in the kindergarten, school, dormitories, and patients in the hospital is brought from outside of the soum. Therefore, it is suggested the project supports establishment of small food factories to supply these public organizations and in the future all the residents of the soum. For instance, such small factories can be dairy or bakery etc. o Is there a possibility to build paved road from Tolbo soum to Deluun soum? o During the previous couple of years, the Deluun soum experienced harsh winter and hay for the animals were brought from far away aimags. Thus it is requested, that the project supports the herders to establish irrigated and protected hay fields. This will really support the improved livelihood of the herders. o It is understood that ASDIP is ten-year program, with 3 tranches, and therefore the planned activities will be implemented in the first tranche, and while it is implemented, the soum residents/herders can discuss and bring their issues, suggestions to the project and, if feasible, implement in the next tranches. o It is noted by the soum and aimag government officials that once the project starts its implementation the Deluun soum officials and its residents/herders will do their best to become a model soum for the other soums and contribute to the development of Mongolia.

Some photos taken during the public consultation

4. Public consultation in Ulgii soum, Bayan-Ulgii aimag, held on 5 October 2019. There gathered about 100 participants in the meeting. There were fewer participants than expected. This was due to the fact that during the 5-6 October 2019, there was highly attractive touristic and public event, the Eagle Festival, organized in Ulgii. Many of the Ulgii soum residents were involved in this event as spectators, organizers, tour guides, participants, performers, selling food and souvenirs etc. This might have caused in lower than expected number of participants. The meeting was attended by the residents of Bayan-Ulgii aimag center, herders, representatives of agriculture and credit and savings cooperatives, and

199 government officials. Among the government officials, the Head of Governor’s office of Ulgii soum, the Bayan-Ulgii aimag center, the Head of Land Administration, Construction and Urban Development, were present. The participants’ suggestions, comments and questions were as follows.

• In general, the participants appreciated ASDIP and expressed gratitude for the project to be implemented in the remote western aimag, the Bayan-Ulgii aimag. The residents voiced that at last, the time came to develop the remote western aimags. • The project is of high importance for creating quality living conditions for the residents of aimag center by provision of heating, water and sewerage and other necessary facilities, and supported with proper planning and development activities. This brightens the future of the residents’ lives and the young generation. • Will there be competitive bidding for the project development/construction works? Will it be the project or will it be the aimag government? It is supposed that there will be many different companies involved in the construction works, for instance companies specialized in road, or infrastructure, in building constructions etc. There is an issue of openness and transparency, sometimes such works and bidding happens openly and transparently or sometimes not. There is a need for double checking and supervision by the residents for the construction works who live in the project areas, i.e. quality control by the residents themselves. The construction works of the Ulgii’s infrastructure, heating, water, sewerage etc. were constructed back in 1978 for seven years, and due to strict and proper quality control, these trunk infrastructure were built in good quality and functioning relatively well so far. • There are retired people who are construction/infrastructure or environmental professionals, of which some took part in the ADB funded vertical road project (completed recently in the autumn of 2019) and worked in the environmental assessments and other related works. These are the people, who take part in the community quality control activities. • It is understood that the project will be funded by the ADB, it is not clear if this is technical assistance, grant or loan. Please clarify • It is understood that 13th bag is one of the project target ger areas and that the project will provide the trunk infrastructure for this bag as a whole, but will be working only in the target streets in the first stage of the project as pilot area. How about the other streets of 13th bag, when the project will come to the rest of 13th bag, what are the timelines and plans for the rest of the ger areas development? • The infrastructure provision for the target ger areas, 5th and 13th bags, will be settled by this project, how about the other ger areas, will the other ger areas be provided with the infrastructure and roads, and how these ger areas will be developed? The timing and scope of the project need to be clarified. • Now, in the plots in the ger areas the well for drinking water and pit latrines are located next to each other in a distance of about 10 or so meters. This certainly causes contamination of the drinking water and consequently diseases of internal organs. The project will construct reliable and upto standard water supply networks and sewerage networks. And this will be not only for the selected bags, 13th and 5th bags, but also for the other bags of aimag center. Will the existing sewerage network and treatment plant be able to handle the expected increased wastewater amount? These issues need to be settled in parallel with the ger area development and increased users of water and wastewater. There were plans and discussions to build new wastewater treatment plant in Ulgii quite for some time, but nothing happened yet. Hopefully, this issue can be solved by this project. • 6th, 9th and 10th bags are located in the north part of the city, behind the Khovd river across the bridge. Compared to the project target ger areas of 13th and 5th bags, these bags do not have water, sewerage and heating infrastructure. Can’t the project also start in this part of the city in parallel? If this part is provided with all the infrastructure networks, it will relieve the pressure in the central part of aimag center, for instance the decreased land price, load and congestions in the central part can happen. This should be considered in the project implementation.

200 • The issue of the bags in the north of the river, 6th, 9th and 10th bags are an important issue and the aimag government was suggesting from the very beginning to build a new Heating Plant in that area. This should still be considered in the projects tranche 1, but not tranche 2. This will help to provide better living conditions for the people of the concerned bags, as well as implement new housing developments in this area. The existing old heating plant do not have capacity to handle the increased demand for heating, due to new housing developments and the expected housing projects within the project. • The heating demand will increase due to the new developments, there might be more than one new heating plant might be needed. • More housing developments are needed for densification for efficient use of the trunk infrastructure and facilities. • The air pollution in the aimag center is one of the worst, perhaps it is the worst after Ulaanbaatar. There is urgent need to take measures for reduction of air pollution. Can there be activities implemented within this project for production and supply of smokeless fuel, similar to the activities in Ulaanbaatar? • Regarding the resettlement, how about the compensation, it is understood that it will be based on the market prices and full replacement cost. How this is done, and what happens if the affected people will be demanding higher than the market prices, or the full replacement value? One of the project target area is 5th bag, and it is in the A zone, and the land prices are relatively high in this area. • The resettlement activities shall be carried out so that it will not damage and negatively impact the potentially affected households. The valuation should be fair, so that the land owners and possessors will be compensated properly. • If the land owners and possessors will not agree to give up their land for the project developments, it will not possible to acquire their land. Therefore, the resettlement impacts assessments and studies should be done thoroughly, so the land acquisition and resettlement will be feasible, so that the project can proceed. • Within the agricultural business development activities, can the project build livestock originated row materials processing factories, for instance for processing of sheep hide/skin. • There are development activities, such as roads, in the aimag center with the state and local budget funding. The project should coordinate its activities with the local investments and activities, so that the two do not overlap. The works of the project should not be carried out by breaking the previously implemented developments. • There might be unexpected situations that may cause difficulties for the project implementation, for this to overcome and succeed in the implementation, the relevant aimag government officials, the officials of the Ulgii soum, and the residents should provide their full support.

Photos taken during the public consultation in Ulgii soum

201

202 5. Public consultation in Umnugovi soum, Uvs aimag, held on 7 October 2019. Public consultation in Umnugovi soum, Uvs aimag held in the Citizen’s Hall at the Soum Governor’s Office. There were more than 60 participants in the meeting. The meeting was attended by the residents of Umnugovi soum center, herders, and government officials. Among the government officials, the Head of Investment and Development Policy Planning Division, Governor’s office of Uvs aimag, Governor of Umnugovi soum, Chairman of Citizens’ Representative Khural of Umnugovi soum, were present. The participants’ suggestions, comments and questions were as follows.

• In general, the participants appreciated ASDIP and expressed gratitude for the project to be implemented in the Umnugovi soum, as the first ASDIP soum of Uvs aimag. It is understood that the project has a holistic approach as it will work in the urban and ger areas development, infrastructure development, rural development – agriculture, fodder and hay making, and pasture land management and herders development. • Some of the participants have noted that the project will come and support the soum and its residents. On the other hand, the participants noted that it should be very important that the soum center residents and herders themselves support and actively take part in the project for the benefit of the soum and for the benefit of themselves as well. • When the project will start in Umnugovi soum, will the project start first in Ulaangom, aimag center, and then in Umnugovi soum, or it will start at the same time? • How the project will be implemented? Will all the listed project activities, such as the improvements of the school, dormitory, hospital etc., be implemented or will there be some priority list and changes in the scope, i.e dropping some of the investments and investing in other facilities etc., and what about the order of the implementation, i.e. first the school, then the dormitory and then the hospital etc.? • How the sewerage system of the public buildings will work, will it be a centralized sewerage network with treatment facilities/plant, or individual sewerage pits/tanks? How about the sewerage solutions of public buildings in the other soums? Do they have centralized system or individual pits/tanks. It was clarified with some other soums and aimags, they all seem to have their own pit/tank and have a special truck to pump out the sewerage to dispose in the treatment plant or similar. • It will be very important to organize awareness and education among the people in the soum center on the proper use of the toilets. In the case of the hospital, because people do not know and were not using indoor toilets, they put some solid waste in the toilet and this causes blockage and breakdown of the internal sewerage/plumbing. Therefore, there should be very clear guidance/awareness activities for appropriate use of the toilettes for the soum residents, for use of the toilettes in the public buildings. • Recently a paved road was built in the soum’s main road, there were some temporary impacts of dust and making de-tours, due to the construction works. • Concerns were expressed related to the use of underground water. Once the project starts, there might be increased use of water for the public buildings, and perhaps for the ger areas in the future, if the housing conditions will be improved and households connected to piped water network. This might cause reduction of the quantity of the water resource. Now it is noticed lately that the water quality from the existing underground wells are degrading, as there are sediments of saline in the water boilers or other household utensils, this was not happing before, and this might be indicating that the water source in the underground wells are decreasing and this is causing saline water. Therefore, the project must do thorough studies on the underground water sources, reserves and quality. The project, also, should consider economic use of underground drinking water. • How about the development of the ger areas? Will there be ger area development similar to Ulaangom? There are health, hygiene and smell etc. issues of pit latrines, the smoke from coal is also becoming big issue. There are 550-600 ger area households who spend winter in the soum center, and the smoke, form burning coal, from these households has already

203 started air pollution, especially in the morning and evening in the cold season. Thus the development of ger areas similar to the aimag center, should be considered. • In the summer the number of households in the soum center decrease to about 400, as some of the households go to their countryside homes after the school year finished, and some of the households go to tend their herds, which were tended by their relatives in the wintertime. Many households have two homes and divide due to school year or cold season, one in the soum center, where one of the spouses spend winter to look after the younger, and one in the countryside and of the one of the spouses to tend their herds. • In the soum center, there is an abandoned a 36-unit apartment house. Can the project work on rehabilitation and restoration of this apartment house and make it liveable? Some of the residents expressed willingness to rent apartment unit in this building, if made useable again. People in the remote rural areas, such as soum centers, want to live in comfortable housing similar to residents in big cities. • If the ger areas will be developed and connected to piped networks in the future, than it should consider using surface water for household washing/shower etc. use., the natural, underground drinking water will not be recovered. If possible the drinking water should come in different pipe designated only for drinking. • Some underground wells which should be used for drinking water were used for watering the trees and green areas in the soum center. This should be stopped and, instead, it is appropriate to use surface water for watering trees and green areas. • The safeguard principles, which state that “the livelihood or the environmental conditions should not be worse off than pre-project level” is very good and relevant. Of course, the project is very important and will aim to improved living conditions and economy, but the environment should not be worse off than it was before the project. • Regarding the agribusiness and livestock related activities the participants noted that in the soum there is pasture land degradation, and the livestock carrying capacity is exceeded by 2.5%. • It is acknowledged that pastureland here is getting overgrazed. There are number of reasons, one of them is increased number of livestock, and another reason is lack of moisture, and less rainfalls. • There is the government policy to decrease the number of livestock and have more healthy and good quality livestock. On the contrary, there is the government policy that awards herders who have many livestock (specials government awards for herders who have more than one thousand livestock). Thus, there are many young herders who want to increase the number of their livestock and become or get the award and title of the “good herder” of the soum, the aimag and, eventually, the country. This is true for almost all the herders. • The sole livelihood sources of the herders is their livestock. There are herders who have many children and when the children get married, it is obvious that the parents gave certain number of livestock to their children for their livelihood and income sources. Therefore, it is difficult to decrease the number of the livestock. Therefore, the issue of decreasing the number of livestock and having fewer, but good quality, livestock, should be carefully thought, discussed and consulted with the herders. • It is widely discussed that degradations of the pasture land is due to the increased number of livestock, however there are people, especially the older generation, who think that this is happing due to the increased mining or other land/earth digging activities, in general in Mongolia, and inappropriate handling of the Mother Nature, and therefore the Mother Nature is punishing the people, and not letting it rain or similar. • The by-products of the livestock, for instance the head, foot, intestines, hide/skin of sheep, are being thrown away. Also, the animal products such as the skin and wool are priced low. These are important row materials and therefore there should be strategic and clear government policy to do processing of these products to prepare good quality row materials. • Will there be support to SME development? Especially, for animal by products such as the head, foot, intestines, bones etc. For instance for the bones are used to produce fertilizers, soap, bone flour, oil etc. There are people who has some ideas for such SMEs. It is spoken

204 that everything from the animals are used, there is nothing to throw away, for instance even the hoofs and horns were used for production of glues and buttons.

Some photos taken during the public consultation in Umnugovi soum

6. Public consultation in Ulaangom soum, Uvs aimag, held on 8 October 2019.

Public consultation in Ulaangom soum, Uvs aimag center held in the Drama Theater. There were more than 120 participants in the meeting. The meeting was attended by the residents of Ulaangom, herders, and government officials. Among the government officials, the Head of Investment and Development Policy Planning Division, Governor’s office of Uvs aimag, and Governor of Ulaangom soum, were present. The participants’ suggestions, comments and questions were as follows.

• In general the participants appreciated ASDIP and expressed their opinions that the project will be long term project, through which the strategic urban development investments for next 20-30 years will be secured. • When the project will exactly start and the works such as ger area development will be implemented? • There is environmental pollution due to throwing away the animal originated products. For instanceь the head, foot, intestines, and sheep skin/hide are just thrown away. The sheep skin is bought by the merchants of animal row material together with the guts, and then the skin is thrown away. • Will the project support SMEs to process animal by-products, such as head, foot, intestines, and all the other animal products? It is difficult to obtain a loan from the local SME fund. The officials do not provide proper information on the availability and access to the soft loans for SMEs. Even if the required documents are provided, the SME soft loan does not reach the intended beneficiaries. There is a great need for SMEs to process the animal products that

205 are being thrown away. If, the project introduces and makes available SME development soft loan, there is a need for fair and transparent procedures and offices to be in charge of provision of such loan. • There nothing to waste from the animals, apart from all the other by-products and products, even the animal excreta, after the animals were slaughtered, were used to produce fodder for the animals by mixing with the animal blood and drying. Also, the intestines of the animal could be used for medication or supplement for immunity etc. • There is pile of ashes from the Heating Plant 1, and when people intended to use this ashes for hollow blocks for fences, garages etc., it was said that these ashes contain mad/sand and therefore not possible to use for hollow blocks. Also, people grow vegetables, by buying expensive seed, but then there are many government people coming to the farmers, and require many types of licenses and permits etc. Also, there seem to be vegetables brought from Khovd aimag at cheaper prices. These are the different problems people encounter when trying to do small businesses and productions. The project should consider these issues, and make it easier for those who want to do small businesses. Also, there is a need for entrepreneurs to meet professionals and obtain advices for their small businesses. • How the water sources for the irrigated perimeter for fodder production will be provided? Will there a underground well or will the Teel river be used? There are some people who has some agriculture activities such as irrigated hay or vegetable fields in the Teel river area. Will the river water sources be sufficient for these users, once the project starts using the water for the irrigated perimeter? Where the irrigated perimeter will be established and can the people in the vicinity of this irrigated perimeter benefit from it? The people who have their livelihoods, hay making, vegetable growing, fodder growing, etc., dependent on the Teel river should be considered and if any negative impacts on them, there should be appropriate measures sustain their livelihood. • There was a project in 2007-2008 with soft loan support from Asian Development Fund or similar, and this project encouraged establishment of agriculture cooperative. Some more than 10 households came together and put their assets into the cooperative and started some farming activities, but eventually somehow the entire farming land, some 30-40 ha, become the property of one person, and all the other households were left no land, not even 1 ha. Therefore, it is very important that this new project does not end up as this case, there procedures and the processes must be clear and fair, and the benefits of the project must reach the intended beneficiaries. • The establishment of irrigated perimeter for fodder is very much supported. In Uvs, people plant alfalfa. Animals that are fed with alfalfa recover much more faster and better compared to hay. Therefore, it is suggested to grow alfalfa in the irrigated perimeter. • The ger area development concepts are now more clear and it is supported. • The ger area development project must be very clear and benefit the landowners, it should not be end up leaving people without land and housing, or just some people benefiting on the expense of others. • The ger area development project will start from the Bag 4. In the bag 4, school No. 4 is located, the B part of the school building was put in operation since 1985 and its capacity is for 240 pupils. Since its start of use, this B part did not have full maintenance and repair works. Can the project do the full maintenance and repair of the B part of the school. • Currently there are trunk heating and water networks being constructed in the aimag center. In some parts, this work is being done very slowly and, perhaps, by non-professional company and workers. Once the project starts, such issues need to be considered, the works need to be done on timely manner and professional and qualified companies/workers should work. • In the aimag center, there is no proper waste collection and disposal system. Wastes are dumped everywhere, the streets are being filled with wastes. There should be proper waste collection and disposal, i.e. waste management system.

206 Some photos taken during the public consultation in Umnugovi soum

Lists of participants of six meetings with their name contact and phone and signatures are put into the separate file due to its large volume.

7. Public consultation through questionnaire survey among water users in Tarialan soum and Naranbulag soum of Uvs aimag, April 29-30, May 1, 2020

Due to coronavirus (Covid-19) outbreak in China and around the world in January 2020, Government of Mongolia has banned since February 2020 any meeting or gathering with over than 5 persons in one place at a time to restrict virus spread. This policy has created a challenge for applying conventional ways of

207 implementing public consultations. The feasible way was to get views of local community on the project interventions through a questionnaire survey by meeting participants one by one.

A professional hydrologist was hired locally to explore views of potential water users of Kharikiraa river and its tributary Teel river and project expected intervention on water conservation. As Kharikiraa river and Teel tributary is mostly stretched over territory of Tarailan soum, majority respondents were from Tarialan (78 persons) and a few (4 persons) were from Naranbulag soum, which is neighboring soum on the east of Tarialan. In total 82 respondents were participated in questionnaire survey organized on 29, 30 April and 1 May 2020. Majority of respondents were crop producers, hay makers, vegetable growers and herders and medical doctors, middle school teachers were among them. Also, local government officials, including environmental inspector, social welfare specialist, finance division head were respondents.

Questionnaire consists of 12 questions and additional comment section. The detailed questions and survey results are described in the table at the end of this section.

Most of respondents (72%) knows well or to some extent about the water conservation project.

Of 82 respondents, 51 persons (74%) are water users of Kharkiraa river and 18 persons (26%) are water user of Teel river.

On question what purposes they use river water, 69 persons (38%) use water for hay making, 46 persons (25%) use water for watering their livestock, 35 persons (19%) for crop/fodder production and 34 persons (18%) use water for fruit and vegetable growing.

46% (38 persons) of respondents expressed that Teel river flows never reaches Uvs Lake during summertime because all water is used for irrigation of crop, fodder, fruit tree and vegetable growing by local users. 43% (35 persons) of respondents say Teel river water reaches Uvs Lake sometimes. Only 2 respondents tell river flow reach the lake and 7 respondents do not know whether river water reaches or not to the Lake.

On question, whether Uvs lake ecosystem depend on Kharikiraa and Teel river, 34% or 27 respondents tell that Uvs lake directly dependents on Kharikiraa (Teel) river. 20% or 16 respondents express the lake ecosystem does not depend on Kharikiraa (Teel) river. 31% or 25 respondents express that whenever river floods, its water reaches to Uvs lake with this it impact Uvs lake ecosystem.15% or 12 persons do not know the answer to this question.

On question whether project planned diversion and storage of 3% of Teel river from May to September is good or badly impact for their family and community, 51% express that it will impact positively. 21% express no impact to them, 15% express they do not know. 13% express it will impact negatively and advice that to extend water conservation component in the Teel river.

Environmental problem in their local area are according to respondents, first, surface water scarcity (36%), second, pasture degradation and overgrazing due to high number of livestock (22%), third, solid waste issue (19%) and environmental pollution (11%).

On question, whether they have a concern about the possible impacts of project to fishes of Teel river and surrounding biodiversity, 73% expressed they have no concern and only 4% expressed that they have a concern on the project impacts without describing how it will be impacted.

On question, if project will have impact to local economy and livelihoods of local community, 71% (72 prs) expressed that it will positively impact livelihood of local citizens, 21% (21 prs) say it will positively impact local economy. A person expressed it will negatively impact with no explanation why. 7% expressed they not sure if there will be impact.

On question about their attitudes towards the project intervention, 88% (70 respondents) are support the project and 6% are either not support or do not know whether to support or not.

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On the additional comments section their put the following comments:

• Expressed their gratitude for the water conservation component, as it will support wellbeing of local community on increasing their areas of crop/fodder production, hay making, vegetable and fruit production and increase pasture resources. • It will support traditional crop production businesses • With increased climate change, it needs to conserve water for efficiently use for local communities • To pay attention on the design of water storage facility/reservoir to avoid risk of falling of livestock and children into it • To design and construct the canal and water storage facility in good quality for long term usage • To incorporate into the infrastructure design elements of flood protection and leakage into the below soil • While constructing the infrastructure, try to less disturb current landscape and keep as possibly original landscape view • Train local water users and herders on rotational use of land resources and water conservation.

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Questions and Results of Questionnaire Survey

Respondents’ age group RESPONDENTS' AGE GROUP no info, 1, 1% 10-19, 4, 5% over 60, 7, 9% 20-29, 7, 8%

30-39, 18, 22% 50-59, 27, 33%

40-49, 18, 22%

210 Respondents’ sex RESPONDENTS' SEX

women, 26, 32%

men, 56, 68%

Respondents’ education status RESPONDENTS' EDUCATION STATUS no info, 9, student, 3, 4% 11%

no educated, 2, 2% high, 27, 33% vocational education , 2, 3% college, 6, 7%

elementary, 5, 6%

secondary, 28, 34%

211 Respondent’s ethnicity RESPONDENTS' ETHNICITY no info, 5, 6% khalkh, 1, 1% darkhad, 1, 1% durvud, 14, 17%

bayad, 6, 8% khoton, 55, 67%

Respondent employment status RESPONDENTS' EMPLOYMENTS STATUS

student, 3, 4% no info, 3, 4% govt employee, unemployed, 5, 14, 17% 6% retired persons, 6, 7% boiler operators, guard , 3, 4% middle school teachers , 4, 5% managers of self-employed, entities, 20, 24% gasoline station, medical doctors and veterianian, crop/vegetable11, 13% producers, 9, herder, 4, 5% 11%

212 Q1: Do you know about 1. Yes…37% HMWM subproject 2 2. Slight Q1 (further “project”) as an knowledge…35% old canal restoration and 3. Don't know…28% water accumulation Don't know, used to function in XVII- 23, 28% XVIII centuries? Yes, 30, 37%

Slight knowledge, 29, 35% Q2a: Do you use or rely 1. Kharkhiraa…20% on Kharkhiraa or Teel 2. Teel…7% Q2A river water?

Teel, 18, 26%

Kharkhiraa, 51, 74%

213 Q2b: What do you use 1. Hay making…27% the river water for? 2. Fruits and Q2B Vegetables…14% 3. Crop and Livestock Other, 0, 0% No use, 0, 0% watering, 46, Fodder…14% 25% 4. Livestock watering…18% Hay making, 5. Other…0% 69, 38% 6. No use…0%

Crop & Fodder, 35, Fruits & 19% Vegetables, 34, 18%

Q3: From your 1. Reaches Uvs…2% experience or 2. Doesn't Q3 knowledge does the reach…46% Don't know, Reaches Uvs, Teel river dry up in 3. Sometimes…43% 7, 9% 2, 2% summer below Tarialan 4. Don't know…9% before river reaches Uvs Lake

Doesn't reach, 38, 46% Sometimes, 35, 43%

214 Q4: Can you indicate 1. May…14% which of these months of 2. June…25% Q4 summer Teel river dries 3. July…29% All months, up? 4. August…19% September, 138, , 8% May, 22, 14% (Multiple choice) 5. September…5% 5% 6. All months…8%

August, 30, 19% June, 40, 25%

July, 46, 29%

Q5: What are the 1. Scarce surface environmental problems water…36% ChemicalQ5 pollution, 4, you have in your area? 2. Scarce Other, 3, 2% underground Pasture 2% degradation/s water…8% Scarce 3. Water carcity, 39, 22% surface pollution…11% water, 64, 4. Waste…19% 36% 5. Pasture degradation…22% 6. Chemical pollution…2% 7. Other…2% Waste, 35, 19% Water Scarce pollution, 19, underground 11% water, 15, 8%

215 Q6: Do you think Uvs 1. Directly Lake “ecosystem” dependent…34% Q6 depends on Kharkhiraa 2. Not Don't know, and Teel river water? dependent…20% 12, 15% 3. Whenever Directly floods…31% dependent, 4. Don't know…15% 27, 34%

Whenever floods, 25, 31% Not dependent, 16, 20% Q7: Do you think the 1. Good…51% HMWN plan to divert 2. Bad…13% Q7 and store 3% of the Teel 3. No impact…21% Don't know, river from May – 4. Don't know…15% 11, 15% September will be good for your family and your community?

No impact, Good, 39, 16, 21% 51%

Bad, 10, 13%

216 Q8: When in operation, 1. Positive…4% how do you assess, 2. Somewhat Q8 Positive, 3, would project impact the positive…30% Negative, 5, 4% water resource of Teel 3. No impact…42% 6% river? 4. Somewhat Somewhat negative…18% negative, 15, 18% Somewhat 5. Negative…6% positive, 25, 30%

No impact, 35, 42% Q9: What do you think is 1. Support local the main impact of the community…21% Q9 Don't know, project on the local 2. Support citizen's Negative , 1, Support local 7, 7% economy and society? livelihood…71% 1% community, (Multiple choice) 3. Negative…1% 21, 21% 4. Don't know…7%

Support citizen's livelihood, 72, 71%

217 Q10: Do you have any 1. Concern…4% concerns about the 2. No concern…73% Q10 possible impacts of 3. Don't know…23% Concern, 3, 4% project to fishes in Teel Don't know, river and surrounding 19, 23% biodiversity?

No concern, 59, 73%

Q11: Do you have any 1. Concern…10% concerns on 2. No concern…65% Q11 accumulated impacts of 3. Don't know…25% Concern, 8, increased water users 10% Don't know, and livestock number 20, 25%

No concern, 51, 65%

218 Q12: What is your 1. Supportive…88% attitude towards this 2. Not Q12 project? supportive…6% Not Don't know, 3. Don't know…6% supportive, 5,5 , 6% 6%

Supportive, 70, 88% Q13: Additional • Posit increased past+water use comments: • Posit: increased wr but need train herders in rotational use of irrigated pasture • Posit: need qualitive construction. To protect well from natural disasters • Good for unutulized pasture, increased water resource, potential for tourism development • Very positive for citizens well being. Increased water resources support crop production and pasture utilization. • Positive: potential for use of unutilized pasture, saves resource of herders' hay making, reduced conflicts between herders and crop producers due to trespassing of livestock into crop areas • Everybody wishes to have water resources. Keeping river basin is helpful for the health of human being and all people should support this. Good luck! • In prior times, many people have crop production and income. With this project, ther is potential for planting fruit trees and increased crop production. Herder will also benefit through using unutilized pasture as thye could not use this pasture due to lack of water in these areas • Water conservation project implementation brings following benefits in local development: for examp, local citizens benefit through increased crop production and increased pasture land • Full utilization of all pasture, potential for crop production, water scarcity will be eliminated • If to implement project, then need to protect water reservoir to avoid falling livestock or persons into reservoir. Need to strengthen measures against flooding • Water conservation helps livelihood of local citizens through increased crop production, increased water availability and not dipute over scarce water.

219 • Project positively impact on protecting local citizens rights and environmental protection and will help increase traditional income sources • Potential for traditional crop production and livestock herding. Increased drinking water for people and livestock. Will be available water resource and water rational use • I support for water canal restoration • Project will assist in livelihood improvement. Water conservation is necessary • Project will positively impact local people's livelihoods on traditional crop production • With project, disputes between herders and crop producers over water during spring season will be settled • No dispute over water availability and potential for tourism development • Below soum center all areas are occupied with haymaking. Pasutre is available during august and september • With intensifiction of climate change, it needs to use water without losses and use of water in environmentally friendly way for the benefit of local economy and pasture irrigation • Water reservoir needs protection to avoid livestock falling and waste entering • Recommends to implement project with high quality and with less impact to the landscape • Try less use of heavy machineries and employ more hand work • Project needs to keep the original landscape view and keep ecological balance to restore as it was before • To consturct the water canal in high quality • Increased water canal and water conservation are good measures • It will support livelihood of local people • Project should avoid water leakages • Project is very helpful for local citizens • Flood protection is neccesary • It will support local citizens for crop production and vegetable growing • Water resource management is required due to high competition over available water resources • Positive impact of project due to improved water supply for drinking by people and livestock and crop production • It will support local crop production expansion • Frequent flood issues, therefore need protection against flood. Channels used for crop and fodder need to have measures to prevent land degredation • Only use channel for irrigation. Need to be of quality (previous actions were not up to quality) • Very positive for both agriculture and herders and pasture management • Create water accumulation during discharge and use accumulated water for further activities. Protect possible flood vulnerable areas. Use accumulated water for tourism and forestation. Don't use it for agriculture • Positive for using 30k ha pastureland during spring and fall seasons. Possible to recover and use 300 ha old hay preparation land • Needs better protection against flood

220 • Only use for pasture • Need to fund actions to unify kharkhiraa river bed • Due to high use of teel river water in agriculture there is water shortage. We need water accumulation • Water accumulation is needed for 300 ha agricultural land in naranbulag soum • Need water accumulation in teel river • Focus on preserving the current topology and create strong channel, create water accumulation and utilize rainwater

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