Additional Financing of Bagmati River Basin Improvement Project (RRP NEP 43448) CLIMATE CHANGE ASSESSMENT I. Basic Project Information Project Title: NEP (43448-014) Bagmati River Basin Improvement Project - Additional Financing Project Cost (in $ million): Amount ($ million) Source Current (Original Additional Total Amount) Financing Asian Development Bank (ADB) 30.0 63.0 93.0 Ordinary Capital Resources (OCR, 25.5 63.0 88.5 concessional loan) Special Funds resources (grant) 4.5 0.0 4.5 Government 6.0 15.8 21.8 Total 36.0 78.8 114.8 Location: Bagmati zone, Kathmandu Valley, Nepal Sectors / Subsector: 1. Agriculture, natural resources and rural development / Rural flood protection; water-based natural resources management 2. Water and other urban infrastructure and services / Renovation and protection of cultural heritage; urban sewerage; other urban services Theme: Inclusive economic growth; Environmentally sustainable growth Brief Description (particularly highlighting aspects of the project that could be affected by weather/climate conditions and natural hazards): The Government of Nepal with the support of ADB has initiated the Bagmati River Basin Improvement Project (current project) in 2013 to protect the Bagmati River. The current project is launched with ambit of enhancing the water resources and water quality of the river, accelerating the economic growth of the country and living standard of the people. The additional financing for the Bagmati River Basin Improvement Project is required to scale-up the current project including consolidation of water management institutions, expansion of riverbank beautification works, riverine community mobilization, and the design, build and operation of a wastewater treatment plant (WWTP). The additional financing is also required to meet the cost overruns to the current project with which performance is on track. As per ADB Safeguard Policy Statement 2009, the additional financing is categorized as category B in environment as none of the anticipated impacts due to the project are of irreversible, diverse, or unprecedented in nature. Bagmati River has a history of extreme flooding, which is a common occurrence during the monsoon season.1 Future projections of rainfall under a high emission scenario (A2 SRES or RCP8.5 scenarios) indicate that precipitation will continue to increase during monsoon season. Wastewater collection and treatment facilities are often situated at the lowest point possible as their operation leverages gravitational pull, but they can therefore easily be inundated by water level rise. When storm water and sewer collection systems are combined, higher intensity rain storms can overwhelm treatment facilities leading to a failure of treatment. II. Summary of Climate Change Finance (if applicable) Project Financing Climate Finance (in $ million)* Source Amount (in $ million) Adaptation Mitigation ADB Resources OCR COL 63.00 1.96 2.55 ADF Grant 1 Initial Environmental Examination Report (accessible from the list of linked documents in Appendix 2 of the report and recommendation of the President). Paras. 8, 60, and 61. 2 Project Financing Climate Finance (in $ million)* Source Amount (in $ million) Adaptation Mitigation Co-financing** * Please refer to the Umbrella Guidance Note on Counting Climate Finance (October 2016) and relevant sector guidance notes issued, in estimating climate mitigation and/or adaptation finance for the project. ** ADB-administered donor trust funds, financing from multilateral climate funds such as Global Environment Facility, Climate Investment Fund, Green Climate Fund, and bilateral financing, among others. III. Summary of Climate Risk Screening and Assessment A. Climate Risk Screening (see relevant climate and hazards information in the Appendixes) a. Hazards Projected temperature increase Low Projected change in average precipitation Low Extreme events (Extreme rainfall episodes leading Medium (during monsoon season) to floods, as represented by the 90th percentile values) Earthquakes Medium b. Sensitivity of Project Components to Climate/Weather Conditions and Geological Hazards Components of additional financing include: Sensitivities (i) Landscaping Activities: Landscaping and Construction phase maybe delayed by inclement beautification works of Bagmati Riverbanks in weather. different stretches (Uttar Gaya, Gokarna, Guheshwori, Thapathali to Balkhu); During operation, wastewater treatment may be (ii) Construction of a WWTP at Tukucha; and affected by the rise of water level. Wastewater (iii) Restoration and reconstruction of the collection and treatment facilities are often situated archaeological (cultural heritage) monuments at the lowest point possible as their operation along Thapathali to Balkhu. leverages gravitational pull, but they can therefore easily be inundated by water level rise. When storm water and sewer collection systems are combined, higher intensity storms can overwhelm treatment facilities leading to a failure of treatment. Landscape works and monuments could be damaged by prolonged floods. c. Capacities 1. The current project is complemented by the Kathmandu Valley Wastewater Management Project, which is financing the design, construction and management of strategic WWTPs in the Kathmandu Valley. 2. Feasibility studies and detailed designs to address various threats and risks (such as flooding or earthquake) to the additional financing were financed and done under the current project. 3. Support from donor partner (ADB) is available as the overall Project (i) remains technically feasible and economically viable; (ii) is accorded high priority by the government; (iii) is consistent with the project’s development objectives; and (iv) is consistent with the Country Partnership Strategy for Nepal, 2013–2017 which supports Nepal’s peace and development.2 The additional financing project is included in the ADB Country Operation Business Plan, 2019–2021.3 2 ADB. 2013. Country Partnership Strategy: Nepal 2013–2017, extended 2019. Manila. 3 ADB. 2018. Country Operation Business Plan: Nepal 2019–2021. Manila. 3 4. Presence of communities, private sector, and other civil society organizations (CSOs) in some parts of the river stretches that provides good examples in improving river zones that could be scaled up for the whole River (e.g., creation of green spaces and proper solid waste disposal practices).4 5. The Government has devolved the construction and operation of the WWTP to experienced private operator which will be better placed to manage potential impact of climate change on the plant operation and safety. 6. Flood forecasting and early warning system for the Bagmati River is in place with 72 hours dissemination time lag before flood event. B. Climate and Disaster Risks and Adaptation Assessment 1. Long-term climate change that could impact the project components includes increase in rainfall during the monsoon season that could lead to flooding (see Appendixes A3 and A4). Both the A2 SRES and RCP8.5 scenarios indicate wetter than the average wet monsoon seasons (June to October). 2. Earthquake intensity depends on the distance from the fault rupture and local conditions as well as on the magnitude and depth of the earthquake. Climate change could aggravate the damages incurred during earthquake. 3. Climate change adaptation may involve additional investments on design (consider peak river discharge with climate change projection) and materials for improved operation and maintenance of the wastewater treatment facility. C. Climate Risk Classification: LOW. While the project exposure to flood hazard is medium, risk is reduced to low when the existing capacities of the current project are taken into consideration, such as presence of appropriate policy, presence of organized groups to assist in the government efforts, access to technology and information, and available institutional capacities. The caveat is for monitoring and evaluation to capture whether these capacities are really working to reduce sensitivities and vulnerability of the proposed project to different climatic and non-climatic factors with respect to impacts to its components. D. Climate Risk Screening Tool/Procedure Used (specify): SARD climate risk screening framework and methodology. IV. Management Actions • Ensure that the slab level of WWTP will be kept above HFL which considers the conditions described by the projected precipitation change. • Include in the design–build–operate contract the M&E of how rainfall and hydrological change in the project areas impact the operations of the WWTP during implementation, to verify if the operation of the system are disrupted, and to be able to apply corrective actions in cases of negative impacts on the wastewater management and flood risk management operations. • Mobilize, raise awareness, and build capacity of local government and communities for riverbank management and maintenance including awareness on how climate change will affect the flooding situation in their areas. • A potential greenhouse gas mitigation activity is the installation of sludge digester to produce electric power and reduce the plant power and sludge disposal expenses. V. Climate Adaptation Plans within the Project (if applicable) Adaptation Activity Target Climate Risk Estimated Adaptation Adaptation Finance Finance (in $ million) Justification Increase design criteria Risk of increased $1.96 million Models predict possible from 25 years return flooding intensity higher precipitations flood period to 100 during monsoon