South Asia Subregional Electricity Transmission Expansion Project (RRP NEP 44219) Initial Environmental Examination (draft) Project Number: 44219 April 2014 Nepal: South Asia Subregional Economic Cooperation Power System Expansion Project Output 3 - Rural Electrification Through Renewable Energy (RERE) - Sample Subprojects of Mini-Grid Renewable Energy Prepared by Alternative Energy Promotion Centre for the Asian Development Bank. This is an updated version of the draft originally posted in February 2014 available on http://www.adb.org/projects/documents/sasec-power-system-expansion-project-rereap-component- iee ii CURRENCY EQUIVALENTS (as of 10 March 2014) Currency unit – Nepalese rupee/s (NRs) NRs1.00 = $0.01$0.0145016 $1.00 = NRs98.41 Abbreviations and Units ADB Asian Development Bank AEPC Alternative Energy Promotion Centre CDM Clean Development Mechanism CER Certified emission reduction CFL Compact fluorescent lamp CFUG Community Forest Users Group CFUG Community Forest Users Group COPB Country Operation Business Plan DDC District Development Committee DEEU District Energy and Environment Unit EA Executing Agency EARF Environmental Assessment and Review Framework EHS Environmental, health and safety EMP Environmental Management Program GESI Gender equity and social inclusion GoN Government of Nepal GRM Grievance redress mechanism GWh Giga-watt hour IA Implementing Agency IEE Initial Environmental Examination IUCN International Union for Conservation of Nature kW Kilowatt kWp Kilowatt peak MMH Mini-micro hydropower mini-grid MoE Ministry of Energy MoEnv Ministry of Environment, Science and Technology MoF Ministry of Finance MoWR Ministry of Water Resources MW Megawatt NGO Non-government organization NRREP National Rural Renewable Energy Program PIU Project Implementation Unit PV Photovoltaic RE Renewable energy REA Rapid Environmental Assessment RSC Regional Service Centre RoW Right-of-way SCF Strategic Climate Fund SPS Safeguard Policy Statement SWM Solar and/or wind mini-grid tCO2e tons carbon dioxide equivalent iii UC User Committee UNNFCC United Nations Framework Convention on Climate Change VDC Village Development Committee NOTE In this report, “$” refers to US dollars. TABLE OF CONTENTS EXECUTIVE SUMMARY i 1. INTRODUCTION 1 1.1 Background 1 1.2 Name and Address of the Proponent 1 1.3 IEE Preparation and Objectives 1 1.4 Scope and Method of the IEE 2 1.5 Structure of the IEE 2 2. PROJECT DESCRIPTION 3 2.1 Project Rationale and Objectives 3 2.2 Project Location 5 2.3 Project Cost and Lending Instrument 5 2.4 Project Implementation 5 2.5 Project Components 6 2.6 Sub-Project Development 7 3. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK 8 3.1 Legal Framework 8 3.2 International Environmental Agreements 10 3.3 ADB Policy 11 4. SUMMARY OF PROJECT IMPACTS AND BENEFITS 13 4.1 ADB Environmental Categorization 13 4.2 Typical Sub-Project Adverse Impacts 13 4.3 Typical Sub-Project Benefits 20 4.4 Net Impact of RERE 22 4.4.1 Net Adverse RERE Impacts 22 4.4.2 Net RERE Benefits 23 4.4.3 Cumulative Impacts 24 5. SANI VERI HYDROPOWER SUB-PROJECT 24 5.1 Project Description 24 5.2 Description of the Environment 24 5.2.1 Physiographic Region, Topography and Drainage 24 5.2.2 Climate 25 5.2.3 River Hydrology 25 5.2.4 Geology, Site Stability and Soils 26 5.2.5 Land Use 26 5.2.6 River Use 28 5.2.7 Terrestrial Ecology 28 5.2.8 Aquatic Ecology 30 5.2.9 VDC and Project Area Profile 30 5.2.10 Livelihoods 31 5.2.11 Energy Supply and Use 31 5.2.12 Water Supply 33 5.2.13 Transport and Local Services 33 5.3 Impacts and Mitigation Measures 33 5.3.1 Biophysical Impacts 33 5.3.2 Socio-Economic Impacts 39 6. SIMRUTU HYDROPOWER SUB-PROJECT 42 6.1 Project Description 42 6.2 Description of the Environment 43 6.2.1 Physiographic Region, Topography and Drainage 43 6.2.2 Climate 43 6.2.3 River Hydrology 43 6.2.4 Geology, Site Stability and Soils 44 6.2.5 Land Use 44 6.2.6 River Use 46 6.2.7 Terrestrial Ecology 47 6.2.8 Aquatic Ecology 47 6.2.9 VDC and Project Area Profile 48 6.2.10 Livelihoods 48 6.2.11 Energy Supply and Use 49 6.2.12 Water Supply 49 6.2.13 Transport and Local Services 50 6.3 Impacts and Mitigation Measures 50 6.3.1 Biophysical Impacts 50 6.3.2 Socio-Economic Impacts 56 7. BHORLENI SOLAR-WIND POWER SUB-PROJECT 58 7.1 Project Description 58 7.2 Description of the Environment 61 7.2.1 Physiographic Region, Topography and Drainage 61 7.2.2 Climate 62 7.2.3 River Hydrology 63 7.2.4 Geology 63 7.2.5 Land Use 64 7.2.6 River Use 64 7.2.7 Terrestrial Ecology 64 7.3 District, VDC and Project Area Socioeconomic Profile 65 7.4 Livelihoods 66 7.5 Energy Supply and Use 66 7.6 Water Supply 67 7.7 Transport and Local Services 67 7.8 Impacts and Mitigation Measures 67 7.8.1 Biophysical Impacts 67 7.9 Socio-Economic Impacts 71 8. CHISAPANI SOLAR-WIND POWER SUB-PROJECT 74 8.1 Project Description 74 8.2 Description of the Environment 76 8.2.1 Physiographic Region, Topography and Drainage 76 8.2.2 Climate 77 8.2.3 River Hydrology 78 8.2.4 Geology and Soils 78 8.2.5 Land Use 78 8.2.6 River Use 79 8.2.7 Terrestrial Ecology 80 8.3 District, VDC and Project Area Socioeconomic Profile 80 8.4 Livelihoods 81 8.5 Energy Supply and Use 81 8.6 Water Supply 82 8.7 Transport and Local Services 82 8.8 Impacts and Mitigation Measures 82 8.8.1 Biophysical Impacts 82 8.8.2 Socio-Economic Impacts 87 9. KYANGSINGH SOLAR SUB-PROJECT 89 9.1 Project Description 89 9.2 Description of the Environment 90 9.2.1 Physiographic Region, Topography and Drainage 90 9.2.2 Climate 91 9.2.3 Geology and Soils 92 9.2.4 Land Use 92 9.2.5 Terrestrial Ecology 93 9.3 VDC and Project Area Profile 95 9.4 Livelihoods 95 9.5 Energy Supply and Use 96 9.6 Water Supply 96 9.7 Transport and Local Services 96 9.8 Impacts and Mitigation Measures 96 9.8.1 Biophysical Impacts 97 9.8.2 Socio-Economic Impacts 100 10. ENVIRONMENTAL MANAGEMENT PLAN 101 10.1 Implementation Responsibilities 101 10.2 Environmental Management Measures 103 10.3 Environmental Management Cost Estimates 112 11. CONSULTATION, INFORMATION DISCLOSURE, AND GRIEVANCE REDRESS MECHANISM 113 11.1 Consultation and Information Disclosure 113 11.2 Grievance Redress Mechanism 114 12. INSTITUTIONAL ARRANGEMENTS AND RESPONSIBILITIES 116 13. MONITORING AND REPORTING 117 14. CONCLUSION AND RECOMMENDATION 117 Appendices 120 Appendix A: Mini-Micro Hydropower Mini-Grid Sub-Project Development Procedure 120 Appendix B: Solar/Wind Mini-Grid Sub-Project Development Procedure 121 Appendix C: Sub-Project Selection Criteria 122 Appendix D: MMH Rapid Environmental Assessment Checklist 124 Appendix E: IEE Table of Contents (for Category B sub-projects) 127 Appendix F: Environmental Assessment Checklist (for Category C sub-projects)128 Appendix G: Micro-Mini Hydropower Fish Impact Scoping Study 131 Appendix H: Public Awareness Safety Pamphlet 140 List of Tables Table 1.1: RERE Sub-Projects Assessed ................................................................................................. 2 Table 2.1: Sub-Project Types, Estimated Installed Capacity and Beneficiaries ................................... 6 Table 3.1: Environmental Regulatory Framework Relevant to the Project ........................................... 8 Table 6.1: Villages to be Supplied by the Project .................................................................................. 42 Table 6.2: Average Monthly Rainfall - Rukumkot (1986-2011) and Shera Gaun (1986-2000) ............ 43 Table 6.3: Estimated Mean Monthly Simrutu Khola Flow Rate ............................................................ 44 Table 6.4: VDC Population ....................................................................................................................... 48 Table 6.5: Ethnic Composition by VDC ................................................................................................... 48 Table 6.6: Ownership of Agricultural Land and Livestock in Project Area VDCs .............................. 49 Table 6.7: Average Monthly Sani Vera Khola Flow Rate – Existing and Project Operation .............. 50 Table 6.8: Project Land Area .................................................................................................................... 52 Table 6.9: Land Use on Proposed Simrutu MMH Sites ......................................................................... 53 Table 6.10: Excess Spoil Volumes .......................................................................................................... 55 Table 7.1: Main Project Components ...................................................................................................... 59 Table 7.2: Demand Forecast .................................................................................................................... 61 Table 7.3: Estimated Average Daily Electricity Generation .................................................................. 61 Table 7.4: Average Monthly Rainfall - Hariharpur Gadhi Valley (1991-2011) ...................................... 62 Table 7.5: Average Daily Hours of Sunshine.......................................................................................... 63 Table 7.6: Average Monthly Wind Speed ................................................................................................ 63 Table 7.7: VDC Population ....................................................................................................................... 65 Table 7.8: Ethnic Composition by VDC ................................................................................................... 65 Table