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INTEGRATED SAFEGUARDS DATASHEET APPRAISAL STAGE I. Basic Information Date prepared/updated: 01/11/2008 Report No.: AC3330 Public Disclosure Authorized 1. Basic Project Data Country: China Project ID: P096812 Project Name: Yunnan Urban Environmental Project II Task Team Leader: Takuya Kamata Estimated Appraisal Date: December 3, Estimated Board Date: May 27, 2008 2007 Managing Unit: EASUR Lending Instrument: Specific Investment Loan Sector: General water, sanitation and flood protection sector (100%) Theme: Pollution management and environmental health (P);Water resource management (S);Environmental policies and institutions (S) IBRD Amount (US$m.): 150.00 Public Disclosure Authorized IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: Borrower 150.00 Financing Gap 0.00 150.00 Environmental Category: A - Full Assessment Simplified Processing Simple [] Repeater [X] Is this project processed under OP 8.50 (Emergency Recovery) Yes [ ] No [X] or OP 8.00 (Rapid Response to Crises and Emergencies) Public Disclosure Authorized 2. Project Objectives The Project will assist Yunnan Province improving effectiveness of lake basin management in Er’Hai and Dianchi, and to improve effectiveness and coverage of critical urban environmental infrastructure for the development of county towns, through expansion and establishment of wastewater services and solid waste management systems, as well as improvement of river environment management systems in Dali, Kunming, Lijiang and Wenshan municipalities and prefectures. 3. Project Description The Project consists of two pillars: i) integrated lake basin management (ILBM) systems and infrastructure for and Er’hai basin in Dali Prefecture and ILBM forDianchi basin in Kunming Municipality through TA; and ii) urban environmental infrastructure Public Disclosure Authorized development in 16 counties in Kunming and Lijiang Municipalities, and Wenshan Prefecture. The total project cost is US$ 326 million, of which IBRD loan is US$150 million. Component I: Integrated Lake Basin Management System and Infrastructure (US$ 58.96 million, of which IBRD loan is US$ 28.36 million): 1. Er’hai Lake sub-component: Dali Prefecture has developed well-functioning integrated lake basin management system for Er’hai over the last decade, with assistance from UN and other bilateral donor agencies. Its effectiveness is demonstrated in the recent adoption of a long-term Integrated Er’hai Lake Basin Management Master plan (2003-2020), which well articulates policy directions and action measures, as well as in the enforcement of regulations, including closure of fish ponds and restoration of shorelines. This sub-component will therefore focus on physical investments laid-out in the Master plan, which provide: (i) rehabilitation and construction of about 80 km of sewer and 40 km of storm water drainage, and a WWTP with a capacity of 4,000 m3/day, in four major districts of Dali City; (ii) solid waste management system with capacity of 70 tons/day and landfill storage capacity of 1.13 million m3 in Eryuan County; (iii) a wastewater treatment plant with a capacity of 4,000 m3/day and sewer network in Dengchuan Town; (iv) rural non-point pollution control targeting sanitation interventions in 100 key villages, and small-scale wastewater collection and treatment facilities; (v) environment management of major watercourses flowing into the lake (four major rivers and 18 minor water streams from Cangshan Mountain), including rehabilitation of river banks; and (vi) technical assistance and equipment provision for enhanced pollution monitoring and control. 2. Technical Assistance sub-component for Dianchi Lake would assist key bureaus represented in the Dianchi Management Committee of Kumning Municipality to develop an “Integrated Lake Basin Management System” for Dianchi, aiming at enhancing policy formulation and implementation, and improving institutional coordination and enforcement of regulations. It would comprise assistance for: i) development of a long- term Integrated Dianchi Management Masterplan; ii) revision of the Dianchi environmental regulations; iii) development of an action plan for rural non-point pollution control, for reduction of agricultural run-offs from farmland around the lake; and iv) improvement of monitoring capacity of relevant bureaus, including development of water quality model. Component II: Urban Environment Infrastructures Development for County Towns: This component will assist selected county towns in Kunming, Lijiang, and Wenshan developing urban infrastructure critical for economic growth (US$ 205.21 million, of which IBRD loan is US$ 97.85 million), as detailed below: 1. Kunming Municipality sub-component (Songming, Xundian, and Luquan Counties): Construction of three sanitary landfills of total storage capacity of 1.5 million m3, total designed capacity of 365 tons/day, with designed lifetime for 10-15 years; associated collection and transportation facilities; and closure of existing dumpsites, for three county towns. 2. Lijiang Municipality sub-component (Lijiang Ancient Town District, Yulong and Huaping Counties): (i) Construction of a sanitary landfill of total storage capacity of 2.29 million m3, designed capacity of 350 tons/day, with designed lifetime for 18 years; associated collection and transportation facilities; and closure of an existing dumpsite, jointly for Lijiang Ancient Town District and adjacent Yulong County. (ii) Establishment or expansion of two wastewater treatment plants with a total treatment capacity of 80,000 m3 / day and construction of sewage collection and drainage networks of over 90 km in Yulong and Huaping Counties. Additionally, the project will include the cultural heritage works proposed for Lion Mountain Park in Lijiang and small TA to ensure that the proposed rehabilitation works comply with UNESCO protection codes and other national cultural heritage regulations. 3. Wenshan Prefecture sub-component (Wenshan, Qiubei, Funing, Yanshan, Malipo, Guangnan, Xichou and Maguan Counties): (i) Construction of three sanitary landfill of total storage capacity of over 2 million m3, designed capacity of some 350 tons/day, with designed lifetime for 10-20 years; associated collection and transportation facilities; and closure of existing dumpsites, in Funing, Malipo and Maguang Counties. (ii) Establishment or expansion of three wastewater treatment plants with a total treatment capacity of 28,500 m3/day and construction or rehabilitation of sewage collection and drainage networks of over 200 km in Wenshan, Qiubei, Yanshan, Malipo and Funing and Guangnan Counties. (iii) Integrated environment management of 21 km section of Panlong River in Wenshan County and 11 km section of Puting River in Funing County, including enhancement of riverbank and dredging; as well as environment improvement measures for Lake Puzhehei in Qiubei County, including construction of rural wastewater treatment and sanitation facilities, river course management, rehabilitation of wetland. (iv) Technical assistance for enhanced environment monitoring and capacity building for the Prefecture. 4. Project Location and salient physical characteristics relevant to the safeguard analysis Yunnan Province is located in the southwest border of China, which is a mountainous province on plateau. The altitude declines gradually from northwest to southeast in a ladder shape, and elevation differs significantly, with average altitude of about 2,000 meters, maximum altitude of 6,740 meters and minimum altitude of 76 meters. The topography is varied, and climate is complex with significant vertical altitude difference in temperature. The province has more than 600 rivers, including 180 larger rivers, most of which are upstream of rivers flowing into sea and belonging to six major river systems separately. The rivers flow into three seas and three bays (East China Sea, South China Sea, the Andaman Sea, the North Bay, Motama Bay, the Bay of Bengal) before flowing into two oceans (Pacific and the Indian Ocean). There are many plateau lakes in Yunnan Province. The total area of lakes is 1,066 km2 with catchment area of 9,000 km2, and total water storage of 30 billion m3. The most famous ones include Dianchi Lakes, Erhai, Fuxian Lake, Lugu Lake, and Yangzonghai. Dianchi Lake is the largest lake in Yunnan, and ranks sixth in the country. Yunnan Province has 16 prefectures, 29 minority autonomous counties in 129 counties. By the end of 2005, the province’s total population was 44.2 million, with urban population of 11.6 million. Yunnan is a province with most minorities in China, and there are around 30 groups of minorities with over 5,000 people each. Population of minority accounts for 33.4% of the total population in the province. The provincial GDP of the year 2005 is RMB 347 billion; the added value of the primary industry was RMB 67 billion, the secondary industry was RMB 145 billion and the tertiary industry RMB 137 billion. Yunnan has unique geography, climate, and natural & ecological environment. Cultural diversity, natural and cultural landscape created unique tourist resources in Yunnan. Stone Forest, Dali and Xishuangbanna, three rivers flowing in parallel, and Yulong Snow Mountain in Lijiang are famous national scenic areas. In addition, there are 47 provincial-level scenic areas. Summary of Key Characteristics of Project City 1) Kunming: Kunming is the capital of Yunnan Province, serves as the political and cultural center, and transport and communications