Power Sector Improvement Project

Home , Arashan (river), Chatkal, Kemin District, Kochkor (river), Osh Region, Sokuluk

Environmental Assessment Report

Summary Initial Environmental Examination Project Number: 43456 August 2010

Kyrgyz Republic: Power Sector Improvement Project

Prepared by National Electric Grid of Kyrgyzstan, Kyrgyz Republic for the Asian Development Bank (ADB).

The summary 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.

KGZ: POWER SECTOR IMPROVEMENT PROJECT

INITIAL ENVIRONMENTAL EXAMINATION (IEE)

August 2010

NATIONAL ELECTRIC GRID OF KYRGYZSTAN

TABLE OF CONTENTS

Page

A. INTRODUCTION 1

B. DESCRIPTION OF THE PROJECT 1. Project Description 1 2. Category of the Project 4

C. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK 1. General 4 2. Environmental Institutions 4 3. Requirements for Environmental Assessment 5 4. Legal Framework 6 5. International Agreements and Conventions 8

D. DESCRIPTION OF THE ENVIRONMENT 1. General 9 2. Climate 9 3. Landscape 11 4. Soils 11 5. Surface (Rivers and Lakes) and Groundwater 12 6. Ecology 14 7. Red Data Book Species 15 8. Specially Protected Area 16 9. Socioeconomic Conditions 16 10. Cultural/Historical Heritage 17

E. SCREENING OF POTENTIAL ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 18 1. Construction Phase 19 2. Operation Phase 22

F. INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PLAN 24

G. ENVIRONMENTAL MONITORING AND MANAGEMENT PLAN (EMMP) 28

H. PUBLIC CONSULTATION AND INFORMATION DISCLOSURE 1. Consultation with NEGK Regional Offices 28 2. Public Consultation 28

I. GRIEVANCE REDRESS MECHANISM 29

J. GENERAL CONCLUSIONS AND RECOMMENDATIONS 29

LIST OF REFERENCES 31

LIST OF ACRONYMS

ADB ─ Asian Development Bank AIS ─ air insulated switchgear AMDA ─ automated metering and data acquisition system CB ─ circuit breaker CT ─ current transformer EA ─ executing agency EIA ─ environmental impact assessment EMMP ─ environmental monitoring and management plan GIS ─ gas insulated switchgear IEE ─ initial environmental examination NEAP ─ National Environmental Action Plan NEGK ─ National Electronic Grid of Kyrgyzstan OPGW ─ optical ground wire PCB ─ polychlorinated biphenyls PIU ─ project implementation unit SAEP&FM ─ State Agency for Environmental Protection and Forestry SCADA ─ supervisory control and data acquisition system SF6 ─ sulfur hexafluoride UNDP ─ United Nations Development Programme VT ─ voltage transformer

WEIGHTS AND MEASURES

C ─ Celsius ha ─ hectare km2 ─ square kilometer m2 ─ square meter

A. INTRODUCTION

1. The Safeguard Policy Statement (2009) of the Asian Development Bank (ADB) is grounded in ADB’s Poverty Reduction Strategy and long-term strategic framework. The Poverty Reduction Strategy recognizes that environmental sustainability is a prerequisite for pro-poor economic growth and efforts to reduce poverty.

2. ADB requires environmental assessment of all project loans, program loans, sector loans, sector development program loans, financial intermediation loans, and private sector investment operations. Environmental assessment is a process rather than a one-time report, and includes necessary environmental analyses and environmental management planning that take place throughout the project cycle.

3. In accordance with ADB's Safeguard Policy Statement (2009), this document represents the Initial Environmental Examination (IEE) Report prepared by the National Electric Grid of Kyrgyzstan (NEGK), the executing agency (EA) of the proposed Power Sector Improvement Project (the Project). The IEE was prepared, with the assistance of ADB's Small-scale technical assistance (TA 7368-KGZ), through the following steps.

• Collection, review and analysis of existing baseline data (including all available environmental legislation and guidelines) and relevant reports from previous similar projects; • Discussions with experts from NEGK’s Head Office, NEGK regional offices, personnel of substations, etc. • Revision of engineering data, designs, field notes and photographs to identify the various environmental issued involved; • Field trips to examine existing environmental conditions and understand the type and magnitude of expected impacts; • Assessment of possible environmental impacts and mitigation measures for each step of the planning, design, construction and operation; and • Preparation of an environmental monitoring and management plan.

4. The Government of the Kyrgyz Republic (the Government) requested ADB to provide assistance in implementation of the Project in November 2009.

B. DESCRIPTION OF THE PROJECT

1. Project Description

5. Project's impact is improved reliability of national and regional power supply in the Kyrgyz Republic and Central Asia. The outcome is the improved operational efficiency of the power companies.

6. Project's physical outputs are: (i) Installation of wholesale digital meters and automated data acquisition equipment at existing grid substations to measure input/output between NEGK, generation companies, distribution companies and import/export boundaries, as well as at large industrial consumers;

(ii) Installation of a communications loop and basic components of a Supervisory Control and Data Acquisition system (SCADA) linking six major substations in the northern transmission system, with interconnection to the national dispatch centre, to facilitate automated metering and commercial data acquisition and provide basic SCADA

(iii) Upgrading of selected NEGK substations with replacement circuit breakers (CBs), current transformers (CTs) and voltage transformers (VTs).

7. The Project has two executing agencies (EAs): Ministry of Energy, and the National Electric Grid of Kyrgyzstan (NEGK). NEGK is responsible for all physical investments under the Project.

8. The specific types of works involved are as follows.

a. Automated Metering and Data Acquisition

9. Establishment of the Automated Metering and Data Acquisition system (AMDA) requires about 2,700 modern solid-state meters to be installed in the 190 high-voltage (HV; 110 kV, 220 kV, 500 kV) substations through out the national HV transmission grid. Some defective or low accuracy current transformers (CTs) and/or voltage transformers (VTs) will also be replaced. The meters are connected to the data aggregator and then to a modem. Commercial metering data are transmitted to the National Control Center (NCC) by Global System for Mobile Communications (GSM). Substations that are outside the GSM coverage will transmit data through microwave radio and power line carrier (PLC). All equipment installation will take place within the compound of existing substations.

HV Transmission Grid System

b. SCADA and Communications

10. The SCADA links the seven northern substations and three control centers with optical fiber. Of the 560 km of optical fibers, 510 km will be in the form of optical ground wire (OPGW) and 50 km will be underground optical fiber cable. OPGW will be string on existing transmission towers along the existing transmission line route. Underground fiber cables will be laid beneath public roads utilizing existing underground ducts, or where these do not exist through directional drilling to minimize the disruption to road and pedestrian traffic.

OPGW and Underground Cable Link

Location of Underground Fiber Cable Installation

c. Substation Rehabilitation

11. Substation rehabilitation involves the replacement of CTs and circuit breakers (CBs). All installation will take place within existing transmission substations.

2. Category of the Project

12. ADB’s environmental categorization is determined according to the likelihood and magnitude of risk associated with a project when implemented without mitigation. The Project involves installation of equipment in existing substations and on existing transmission towers. Potentially adverse impacts are foreseeable, but not significant, if implemented without mitigation. Therefore, the recommendation is that the project can have an overall environmental categorization of Category B.

C. POLICY, LEGAL AND ADMINISTRATIVE FRAMEWORK

1. General

13. The Kyrgyz Republic is divided administratively into seven Oblasts (Provinces) plus the metropolitan region of Bishkek, the capital. Each oblast consists of several rayons (districts) and towns directly subordinated to the Oblast. In each of the Oblasts, there are regional councils, but the main executive authority is represented by the head of the Oblast administration, who is appointed by the Central government.

14. In the context of environmental policy, the President has specific authority on establishing rules of natural resources use, defining and announcing environmental emergencies and environmental disaster zones as well as procedures for collection and use of environmental protection funds.

15. The executive arm of central government is headed by the Prime Minister and the First Vice Prime Minister. Three additional Vice Prime Ministers are responsible for Industrial, Social and Agricultural (including Environmental) Policies and the supervision of the respective ministries and national agencies.

2. Environmental Institutions

16. At the highest level of government, the Jogorku Kenesh (Parliament) - through the Commission on Agriculture and Environment - is responsible for: (i) Defining the overall framework for nature protection policy (ii) Developing and approving laws and regulations (iii) Approving government proposals on resource charges and taxes.

17. A number of environmental responsibilities are delegated to the President’s office. The President has the authority to: (i) Establish specific rules and decide on the use of natural resources (ii) Define and announce the boundaries and the status of environmental emergencies and environmental disaster zones (iii) Approve procedures for the collection and use of environmental protection funds.

18. The President is also responsible for signing all laws adopted by the Jogorku Kenesh and for conducting international negotiations, as well as signing international conventions and treaties and submitting them for ratification by Parliament. 5

19. Institutions with a responsibility in environmental matters are discussed below.

20. The key government institution responsible for the establishment and implementation of environmental policy and management in the Kyrgyz Republic is the State Agency on Environmental Protection and Forestry Management (SAEP&FM).

21. According to legal provisions, the SAEP&FM is a governmental body in the environmental protection and ecology and industrial safety. Its major aims and purposes are to: (i) Exercise State control over environment protection, development and implementation of a common policy in the field of environment protection and nature management; (ii) Control and license in the field of industrial safety, economic activities and mining.

3. Requirements for Environmental Assessment

22. The environmental policy of the Kyrgyz Republic is anchored in the 1995 National Environment Action Plan (NEAP) which effectively shaped the evolution of the country’s environmental laws and regulations. The two most significant pieces of legislation being the Law on Environmental Protection (No. 53 of June 16 1999) and Law on Ecological Expert’s Review (No. 54 of June 16 1999).

23. The Law on Environmental Protection requires that in the process of designing, placing, construction, re-construction, putting into operation facilities, and other activities having a direct or indirect impact on environment, the actions for protection, use and restoration of the environment and natural resources shall be identified and undertaken “according to ecological norms.” The Law also requires that an Environmental Impact Assessment (EIA) be prepared for a planned activity (Clause 17).

24. The Law on Ecological Expert’s Review states that EIA means the identification, analyses, assessment, and taking into consideration possible impacts of development activities (Clause 1). Clause 10 defines the activities that require EIA and the process for the project proponent to undertake the EIA.

25. The activities that require EIA include: (i) Concepts, programs and plans for sectoral or territorial socio-economic development; (ii) Plans for the integrated use and/or protection of natural resources; (iii) Master plans for cities and settlements as well as other town-building; and (iv) Any new construction, reconstruction, expansion or re-equipment of operating economic entities or other entities which are likely to have impacts on the environment.

26. According to the Temporary Instruction for Procedure for Performance of Environmental Impact Assessment of Planned Economic and Other Activities (Instruction 1) the documentation prepared must reflect the full extent of the project and meet the specified requirements for EIA, while to ensure consistency of EIA reports, the Instruction on Procedure for Performance of Environmental Impact Assessment of Planned Activity should be fully consulted (Instruction 2). (Instruction 1 - as approved by the Minister of Environmental Protection of the Kyrgyz Republic (June 27, 1997) and Instruction 2 - No. 386 as registered by the Ministry of Justice (July 04 1997): (i) Description of the project or planned activity; 6

(ii) Possible alternatives for the project or planned activity; (iii) Description of the existing environment; (iv) Types and degree of impact on environment and population; (v) Forecast any possible changes in environmental quality; (vi) Description of socio-economic and ecological consequences; and (vii) Actions to prevent environmental damage or mitigate the level of ecological risk.

27. Once prepared the EIA is reviewed by the authorized government body on environmental protection 1 as per the Instruction on Procedure for Performance of State Ecological Expert Review of Materials and Documents 2 which describes what must be submitted for state review of an EIA. It should be noted that Instruction 2 is developed in accordance with regulations of the International Convention on Environmental Impact Assessment in a Trans-boundary Context and also defines: (i) Scope of the EIA application; (ii) Organization and procedure for the EIA performance; (iii) Responsibilities and liability of EIA participants; (iv) Registration of the EIA results; and (v) Procedure for public hearing.

28. The final EIA shall be the statement on ecological consequences of a project or planned activity and contain guarantees for adoption of the actions to ensure protection of the environment and ecological safety throughout the implementation of the project or planned activity.

29. For the Project, the draft IEE was discussed with the State Agency for Environmental Protection and Forestry (SAEP&FM). SAEP&FM confirmed that the level of assessment of the draft IEE is sufficient to meet the standards even if the document is called “IEE” based on ADB policy. The final IEE it will be submitted by the PIU to the SAEP&FM for formal clearance.

4. Legal Framework

a. National Environmental Policy

30. The immediate objectives of environmental policy were set out in the National Environmental Action Plan (NEAP) for the Kyrgyz Republic which was adopted in 1995 for the period 1995-1997. It provides a guiding policy for dealing with key environmental problems facing the country: (i) Inefficient water resource management (ii) Land degradation, mainly due to overgrazing (iii) Overexploitation of fragile forest resources (iv) Threat of irreversible loss of biodiversity (v) Inefficient mining and refining practices.

31. According to the NEAP, The Kyrgyz Republic’s overriding objectives are to ensure sustained economic growth and to reduce poverty. Environmental protection is viewed as both a tool and a condition for achieving the broad goals.

1 Previously the mandate of the Ministry of Environment and Emergency Situations (MEES) following Government restructuring this role has been taken over by Government of Kyrgyz Republic’s State Agency on Environment Protection and Forestry Management – Department of Ecological Expertise. 2 As registered by the Ministry of Justice (No. 407, October 15 1997). 7

32. More recently, the following priority environmental objectives have been identified for action: (i) Reducing urban air pollution (ii) Using water resources more efficiently and economically (iii) Improving wastewater treatment (iv) Protecting arable lands against degradation (v) Establishing a system of sustainable use of plant resources, including forests (vi) Updating the Red Data Books (vii) Expanding the system of specially protected areas and of biosphere reserves (viii) Rehabilitating and making safe radioactive dump sites (ix) Controlling the production, treatment, transport and disposal of toxic wastes (x) Registering harmful substances (xi) Improving the environmental monitoring system.

33. The major direction of environmental policy in The Kyrgyz Republic is aimed at providing environmental safety of the country through adoption of a system of principles and priorities, which define external and internal policy, and legal and economic mechanisms, aimed at nature protection and conservation.

34. In moving towards achieving this goal, The Kyrgyz Republic has adopted a number of strategic policy documents. They are the following: the Concept of Ecological Safety (1997), the National Strategy for Sustainable Human Development (1997), the Comprehensive Development Framework for the Kyrgyz Republic to 2010 (CDF), and the National Strategy for Poverty Alleviation (NSPA) to 2005.

35. In addition, as a country with highland ecosystems increasingly vulnerable towards anthropogenic impacts, the Kyrgyz Republic initiated the year 2002 as International Mountain Year within the United Nations. As a result, the Global Mountain Summit was held in Bishkek, the capital of The Kyrgyz Republic, in 2002.

b. National Environmental Legislation

36. The Kyrgyz Republic’s environmental legislation is considered to be one of the most developed among the countries of the Central Asian region. There are the following sources of law listed hierarchically in accordance with the Constitution and other laws of The Kyrgyz Republic: (i) Constitution of The Kyrgyz Republic (ii) Laws, international treaties and Presidential Decrees (iii) Governmental regulations (iv) Ministerial orders and decrees (v) Regulations and regulatory decisions of the local administrations (local keneshes).

37. The following laws, codes and other types of the legislative documents have the direct relevance to the Project: (i) 1995 National Environmental Action Plan (ii) 1998 Code of Administrative Violations (iii) 1998 National Environmental Hygiene Action Plan (NEHAP) (iv) 1999 Law on Atmospheric Air Protection (v) 1999 Law on Environmental Protection (vi) 1999 Law on Protection and Use of the Plant World (vii) 1999 Law on Environmental Expertise 8

(viii) 1999 Law on Drinking Water (ix) 1999 Law on Biosphere Territories (x) 1999 Land Code (xi) 1999 Forest Code (xii) 1999 Law on Protection of Historic and Natural Heritage (xiii) 2000 Law on Protection of Population and Territories from Natural and Man- Made Emergencies (xiv) 2001 Law on Wastes of Production and Consumption2001 Law on the Population’s Sanitary and Epidemiological Wellbeing (xv) 2002 Law on Payment Rates for Environmental Pollution (polluting substances’ emissions, dumping, discharge, and waste disposal) (xvi) 2005 Water Code (xvii) 2005 Law on the Protection of Citizens’ Health in the Kyrgyz Republic (xviii) 2006 Law on Ozone Layer Protection (xix) 2007 Concept of Environmental Security of the Kyrgyz Republic (xx) 2007 Law on the State Regulation and Policy in Emission and Absorption of Green-House Gases (xxi) 2008 Law “General Technical Regulation “On safe operation and recycling machines and equipment” (xxii) 2009 Law “General Technical regulation to ensure environmental security in the Kyrgyz Republic” (xxiii) 2009 Environmental Code (pending)

5. International Agreements and Conventions

38. The international agreements and conventions of relevance to the Project to which The Kyrgyz Republic is party (or to which active discussions are taking place) are listed in Table 1. The Kyrgyz Republic has signed 11 international conventions in the environmental field. Below there are several of the listed that have relevance to the Project.

Table 1: International Agreements and Conventions of Relevance to the Project

Convention/Treaty/Protocol Status in The Kyrgyz Republic Basel Treaty on Transboundary Movements of Hazardous Ratified: 18/1/96 (according to the UN Wastes and Their Disposal Environment Program the Kyrgyz Republic acceded to the Protocol on 13/8/96) UN (Rio) Treaty on Biological Diversity Ratified: 26/7/96 (according to the Secretariat the Kyrgyz Republic acceded on 6/8/96) UN Framework Convention on Climate Change Acceded on 14/1/00 (on 25/5/00 according to the Secretariat The Kyoto Protocol – UN framework convention on Law on ratification #9 of 15 January 2003 climate change UN Rotterdam Convention of the Procedure of Preliminary Signed on 11/8/99; ratified and the law was Justified Agreement regarding Chemical Substances and signed on 15/1/00 and published on 26/1/00; Pesticides International Trade according to the Secretariat on 25/5/00. Vienna Convention on the Protection of the Ozone Layer Acceded on 15/1/00; on 31/5/00 according to the Secretariat. Montreal Protocol on Substances That Deplete the Ozone Acceded on 15/1/00; on 31/5/00 according Layer (and its London and Copenhagen amendments) to the Secretariat. Paris Convention on the Protection of the World Cultural Acceded on 10/6/95; on 3/7/95 according to and Natural Heritage the Secretariat.

Convention/Treaty/Protocol Status in The Kyrgyz Republic Convention on Transboundary Acceded on 14/1/00 Environmental Impact Assessment The Aarhus Convention on Access to Information and Acceded on 14/1/00 Public Participation in Decision-Making and Access to Justice in Environmental Matters The Stockholm Convention on Persistent Organic Acceded on 16/5/02 Pollutants

39. From Jan 2008-Nov 2009, UNITAR provided assistance to KGZ on development of national action plan to manage chemical as part of requirements in Stockholm Convention. In 2003, UNEP served as Implementing Agency to the project, “Enabling Activities for the Stockholm Convention on Persistent Organic Pollutants (POPs): National Implementation Plan. The National Implementation Plan for the Kyrgyz Republic was prepared in 2006.

D. DESCRIPTION OF THE ENVIRONMENT

1. General

40. The Kyrgyz Republic is a small, land-locked country with an area of approximately 200,000 km2 surrounded by the People's Republic of China, Kazakhstan, Tajikistan, and Uzbekistan. A large portion of the country is mountainous as it composes a part of the Ten Shan Mountains. Elevation varies from 132 m to 7,439 m. The country is rich in hydropower resources with most of its hydropower plants situated on the Naryn River, a tributary of the Syr Darya. Population is estimated to be 5.4 million (2009 estimates).

Source: CIA World Fact book

2. Climate

41. The Kyrgyz Republic is located in the center of the biggest continent - Eurasia, and due to the remoteness from any oceans (3,380 km from North Sea, 6,530 km from the Atlantic Ocean, 3,830 km from Pacific Ocean, and 1,630 km from Indian Ocean), it has a sharply 10 continental climate, with significant fluctuations of air temperature, long duration and intensity of solar radiance, insignificant cloudiness, and as a whole, modest amount of precipitation.

42. Air masses refract under the influence of the mountain relief of Kyrgyz Tien Shan, transform and along with passing up, they become cool, condense and precipitate, forming therewith extremely diverse altitude-zonality climatic conditions.

43. A strong cooling of the air occurs and frosty weather persists until the end of February because of the impact of the South-West periphery of Siberian anticyclone on the territory of Kyrgyz Tien Shan. Intrusions of cyclones from the South-West during the cold period of the year bring humid, tropical air of the Mediterranean and the Arabic seas, with heavy precipitation in Fergana valley and on the slopes around it. Along with mentioned synoptic processes during the cold period, air masses intrusions from Arctic and medium latitudes from the North, North-West and West can be observed.

44. Eight climatic zones can be defined in the Kyrgyz Republic: (i) With very hot summer, and average July temperature of 25-28oC, areas are located below the absolute elevations of 1,000m (periphery of Fergana valley); (ii) With hot summer, and average July temperature of 22-25oC, areas of Osh and Djalal-Abad oblast at the elevations of about 1000-1300 m, Chu valley – up to the elevation of 1,000m (identifies with South border of leaf forests of latitudinal climatic zonality of the Earth). (iii) With temperately hot summer, with isotherms of July of about 20-22oC, that passes at the North and East on The Kyrgyz Republic in the limits of 1,200- 1,300m, and at the South 1,500-1,700m (climate is similar to the one that exist at the South border of taiga along the latitudinal climatic zonality of mountain ranges (the Earth). (iv) With warm summer, and July isotherms of from 20oC to 15oC and upper zone at the elevation of up to 2,000m at the North and up to 2,300-2,400m at the South parts of Kyrgyz Tien Shan. (v) With cool summer, temperature of July from 15oC to 10oC and upper border located at the altitude of 2,600-2,800m at the North, 3,000-3,100m at the South. (vi) With cold summer and average temperature of July of about 5-19oC, elevations of about 3,500m at the North, 3,900m at the South of The Kyrgyz Republic, thermal zone embraces core areas of syrts. (vii) With very cold summer, July temperature below 5oC and above 0oC, elevation of 4,400m at the North, and 4,800m at the South of Kyrgyz Tien Shan, occupies the mostly elevated syrt valleys (Arabel-suu, Kumtor, Uzengugush etc.). (viii) With very cold summer, subzero July temperature, occupies high mountainous areas and regions of Sary-Djaz, Ak-Shyirak, Kok-Shaal, Za-Alaysky and some others).

Table 1. Aggregate data on climatic conditions in the Kyrgyz Republic

Average Annual Atospheri Relative Wind (m/c) Air Temparature Annual c Precipitation (mm per year) Air annual average pressure Region humidity # (%) Average Average Absolute Absolute Annual Average Average Average Absolute Prevailing Average Speed Max Min Min Max Average Annual Annual Max daily Max directions 1 Chui (Baitik) 6.3 12 1.9 -30 34 58 538 32 65 1.7 S, N 2 Talas (Talas town) 7.5 14.9 1.1 -38 40 62 313 26 53 2.3 E,W 3 Naryn (Naryn town) 2.8 9.5 -2.9 -38 37 59 303 22 42 1.9 E,W 4 Issyk-Kul (Karakol) 5.9 12.1 0.1 -22 35 64 420 29 61 1.6 E,W, S 5 Osh (Osh town) 11.7 18.1 6.1 -29 40 64 353 27 63 2.6 S, SE 6 Batken no data no data no data no data no data no data no data no data no data no data no data no data 7 Djalal-Abad (Chatkal) 2.4 10.8 -5.3 -38 38 61 467 29 53 2.6 NE, SW 8 Bishkek 10.1 16.5 4.3 -38 43 60 422 31 70 1.9 S, SE, W Source: Monitoring, Prognosis, and Preparedness to React to Possible Activations of Hazards in Kyrgyz Republic and contiguous areas of the neighboring states of Central Asia. Bishkek. 2007. (Published by ME KR).

3. Landscape3

45. Landscapes of the Kyrgyz Republic like in any mountainous country are characterized by wide diversity. Complexity of landscape differentiation is increased by huge amplitudes of elevations that reach 4,000-5,000 m. On the mountain slopes that have different orientation, and hence, different position relative to the moisture bearing air masses, different types of landscape form that change depending on altitude.

46. At the same time, latitudinal landscape zonality is clearly displayed. It defines differences in piedmont hollows of north and south of the Kyrgyz Republic as well as peculiarities of their mountain landscapes. In a number of cases, one can observe meridional differences of landscapes associated with local features of atmosphere circulation.

47. Landscapes forming in arid conditions, steppes and deserts, cover 35% of the territory, whereas humid landscapes comprise only 27%. Influence of aridity tells upon the areas, which are mostly moistened: forest-meadow landscapes owe their existence to favorable exposition conditions. Landscapes of the Kyrgyz Republic formed and exist on the background of high tectonic activity of the country. Erosion processes, gravitational drift, glacier activity, snow avalanches, mud-torrents and debris-flows, etc. exert a significant influence on the landscape development. These processes cause continuous restructuring the natural complexes of the Kyrgyz Republic.

4. Soils

48. There is a wide diversity of soils in the Kyrgyz Republic owing to its location at the threshold of three soil-climatic Eurasian facies (Turan, West Asian and Central Asian), complex mountainous relief, and interdependence of many natural factors. The most typical are mountain and plain and mountain soils proper that often does not have any analogs in other regions of the former Soviet Union. Their geographic distribution obeys regularities of vertical zonation and general features of zonal distribution of landscapes. Soil types can be largely categorized as shown in Table 2.

3 Source: Atlas of the Kyrgyz Republic. 1987. Moscow.

Table 2. Soil types in the Kyrgyz Republic

Light-colored Serozems Chestnut and chernozems of Mountain forest soils mountain plains Serozems Common (Typical) Mountain chestnut soils Mountain meadow-steppe soils

Meadow-serozem, meadow Mountain chernozems Mountain meadow Alpine and swamp alkaline soils Dark serozems Mountain cinnamonic soils High land semi-desert and desert soils Grey-brown and brown semi- Mountain black- brown soil Mountain and high land steppe soils desert mountain-plain soils under the walnut and fruit tree forests High land caespitose soils of High land caespitose soils of High land caespitose soils of Kobrez Kobrez grass heath lands Kobrez grass heath lands grass heath lands

49. There are three types of erosion found in the Kyrgyz Republic: water, wind and grazing. On the soils of submontain plains and piedmonts, water (irrigational) erosion dominates, at the western part of Issyk-Kul hollow, Kochkor, Alay valleys, Tash-Rabat hollow – wind erosion. On the mountains slopes, grazing erosion is usually developed, or combination of water, wind and grazing erosion.4

Figure 1. Types of soil erosion and their percentage for arable lands in Kyrgyz Republic 1 –Grazing erosion; 2 – Water erosion; 3 – Wind erosion

Source: Atlas of the Kyrgyz Republic. Moscow. 1987.

50. By the extent of soil erosion, strongly eroded soils prevail, they comprise about 35% of all the agricultural lands, medium eroded lands – 27%, and weakly eroded soils – 17%. Non- eroded soils embrace only 3.5%. The rest areas are represented by the soils that combine various levels of soil erosion.

5. Surface (Rivers and Lakes) and Groundwater

a. Lakes

51. The Kyrgyz Republic is rich in water resources. On the territory of the country, there are about 2000 lakes with total area of 6836.2 km2. The biggest of them, the Issyk-kul lake, covers

4 Source: Atlas of the Kyrgyz Republic. Moscow. 1987.

91,2% of this area. According to the origin (genesis and morphology), the lakes in The Kyrgyz Republic can be divided into 4 groups: tectonic, blocking, glaciogenic and hydrogenic ones. (i) The Issyk-Kul, Song-Kul and Chatyr-Kul are the lakes of the tectonic origin and appeared as a result of the filling intra- and inter-mountain hollows with water. These lakes contain the country’s largest water reserves. The area of the smallest of them – Chatyr-Kul lake (153.5 km2) is twice bigger than the summarized area of all the rest highland lakes. (ii) The damming of the river valleys by mountain landslides and rock falls caused the blocking lakes appearance. This group of lakes is not numerous and represented by relatively large water reservoirs: Sary-Chelek, Kara-Suu, Kulun lakes etc. (iii) The glaciogenic lakes are the most common in the country. They are located at the elevations of 2,500-4,000m above the sea level. The hollows of the lakes formed as a result of the ancient and modern glaciations. (iv) Hydrogenic lakes originated from the underground work of water. They are the most typical for the zone of permafrost. They are: the Merzbacher lake (the Engilchek river basin), the Djashyl-Kol lake and the Okugon-Kol lake (both - the Naryn river basin), the Tegermach lake (the Isfairam-sai river basin), and the Saman-Kol lake (the Alabuga river basin).

b. Rivers

52. The territory of the Kyrgyz Republic is a part of the Central Asian closed inland basin located at the heart of the continent. Most part of the river network belongs to the Aral Sea basin and refers to the hydrographic systems of the Central Asian biggest rivers: Syr Darya, Amu Darya, Chu and Talas. Here, conditionally one can include the rivers flow into the close lake Issyk-Kul. River network of the south-east part of the country belongs to the Tarim river basin. At the east border of the country, the river Karkyra forms that is a part of the Lake Balkhash basin.

53. By the type of orientation/trend of the water balance and genesis of the river flow of the Kyrgyz Republic, the territory of the country can be divided into two hydrologic areas: formation and spreading water flow.

c. Groundwater

54. Peculiarities of natural and historic factors of groundwater formation in the Kyrgyz Republic are defined by its location on the territory of mountain-folded areas of Tien Shan and Pamirs-Alay. Features of hydro-geological conditions and resources of groundwater of the country are closely connected with geological structural factors, relief and climate, as well as with influence of the engineering activities of human beings.

55. In the mountain-folded Tien Shan, there are three principal structural and hydro- geological floors/layers can be defined that include: porous groundwater in friable quaternary deposits (upper), water-bearing complexes and horizons with mostly porous-fissure water in semi-rock Neogene-Paleogene and Mesozoic rock (middle) and fissure, less frequently fissure- vein and fissure-karst ground water in rock Paleozoic and Proterozoic formations (lower).

6. Ecology

56. The Kyrgyz Republic retains high diversity of biological resources – types, ecosystems and landscapes. Additionally, although the country is small, the large variations in elevations and geology gives rise to a big number of biomes and therefore, high biodiversity. The ecosystems are represented by highly elevated areas, fertile valleys located in depressions and larger freshwater objects. The diversity is characterized by the elevational difference with prevailing mountain and alpine types of species. Since recently biodiversity in The Kyrgyz Republic was affected by a number of factors that resulted in the registered species diversity reduction and triggered a certain concern of the remaining portion of biodiversity. The country is characterized by high species concentration per a territory unit, which is higher than other Central Asian countries.

57. Only 7% of the total territory is occupied by anthropogenic ecosystems. The remainder represents undisturbed or partially disturbed natural ecosystems. 23% of the territory is located higher than 3 500 meters above sea level with lifeless glaciers and rocks. Some 15% represent stony, shale, clay surfaces with almost no life.

58. There are 22 classes of ecosystems5 (see table below). Availability of deserts (more than 13,200 km2, or 6.8% of the territory) together with extremely poor ecosystems of nival – subnival belt (11,500 km2, or 5,8% of the territory) prompts rather hard living conditions in the bigger part of the country (12,6%). The highest system diversity is located in mid-elevated areas at 2000- 3000 m asl where 14 of the 22 classes of ecosystems can be found, or 63%. At that, the mid- elevated area occupies just 30.8% of the country territory.

59. The systems diversity is unevenly spread. It is the richest in the Western Tien-Shan and Central Tien-Shan bio-geographical regions, where 16 of 22 eco-systemical classes can be met, or 72.7% of their total diversity. The most poor are Ferghana and South-Kazakhstan provinces where only 3-5 classes of ecosystems can be observed, or 22.7%.

Table 3. Ecosystems of the Kyrgyz Republic

Ecosystem name Area (km2) % of the country area Spruce forests 2,722 1.39 Juniper forests 2,680 1.35 Broad-leaved forests 464 0.23 Tugays 226 0.14 Small-leaved forests 711 0.36 Mid-mountain deciduous forests 970 0.48 Mid-mountain petrophilousbushes 2,317 1.17 Savannoids 6,081 3.06 Almonds and pistachios 182 0.09 Nival and sub-nival belt 11,527 5.81 Cryphilic forests 27,242 13.72 Criophilic steppes 21,413 10.79 Criophilic deserts 1,911 0.96 Mid-mountain meadows 8,764 4.42 Mid-mountain steppes 17,643 8.89 Mid-mountain deserts 2,543 1.28 Mountain boghara 2,791 1.41

5 Shukurov E.D. Issues of Biodiversity in the Kyrgyz Republic. Proceedings of the Nat. Ac. Of Sci. Echo of Science. Bishkek. 1997. - №2-3; Project on biodiversity preservation action plan and strategy. Ministry of Environmental Protection KR. Bishkek. 1998. 15

Ecosystem name Area (km2) % of the country area Piedmont steppes 823 0.41 Piedmont deserts 8,768 4.42 Petrophilic low-mountain bushes 181 0.09 Lakes and swamps 393 3.57 Cultivated lands 12,475 6.28

60. Significant part of types and sub-types of animals and plants are endemics and can not be found anywhere else in the world. This tells of the centers for types and species formation in the country.

61. It is worth mentioning that the walnuts and fruit forests which are the world largest and cover the territory of 27,000 hectares. They represent a unique natural formation and primarily grow in Ferghana and Chatkal ranges at the elevation of 1,000-2,200 m asl. In the oblast there dominate clusters of walnut, archa (juniper), fir trees, fruit trees; of those 5 012 ha of fir trees, 4,287 ha of walnut forests and fruit trees, and 38,859 ha of archa (juniper).

62. Natural grassy ecosystems are used as pastures and meadows and occupy the second important place after the anthropogenic systems (settlements and grazing lands), which replace natural step ecosystems at the elevation of 500-2,000 m. These ecosystems were ever long subjected to human activity and eroded up to 70%. Decrease of grazing in certain pastures results in their restoration. However, it happens mainly owing to succession by weed grass. Pastures dominate on slopes and are important for slopes protection. Special meaning water ecosystems have, primarily as the sources of fresh water and recreation.

7. Red Data Book Species

63. The Kyrgyz Republic is notable for its high richness of flora and fauna. A big number of animal and plant species inhabits respectively small country’s area. Many of them inhabit border areas or are isolated from the core part of the species’ natural habitat. Insignificant aggregate area suitable for habitation ensures a possibility for a number of species to create only a limited in their number populations that makes them vulnerable in the case, if conditions adversely change. An intensive development of the country’s territory causes decreasing in natural habitats and reserves of many plant and animal species.

64. To provide conditions of special protection and measures aimed at conservation of rare and endangered species, the Government of the Kyrgyz Republic adopted special legislative enactments to establish the Red Data Book of the Kyrgyz Republic. The first edition of the Red Data Book was published in 1985, and included only limited number of endangered species of plants, animals, insects, and amphibians. In May 2005, a new list of species to be inserted into the Red Data Book was approved by the special Governmental Decree. The list contained 4 species of fungi, 83 species of higher plants, 18 species of arthropods, 7 species of fishes, 2 species of amphibians, 8 species of reptiles, 57 species of birds, 23 species of mammals.

65. By the nature of the rare species distribution, one can define three geographic zones and groups of species. The first group includes Tien Shan and Alay endemics and sub- endemics. Especially, ancient relict walnut and desert communities in Western Tien Shan are rich in such species. The second group of species consists of the widely distributed species, which therewith are notable in their generally small number. They are in threatened condition in the zone of intensive agricultural and industrial development – in the North of the Kyrgyz Republic. And the representatives of the alpine complexes inhabiting the zone of Inner and Central Tien Shan comprise the third group. They are the most poor in terms of species group as it inhabits relatively severe and unvaried habitats. 16

8. Specially Protected Area

66. In the Republic, there are a number of State Reserves and Natural Parks that represent the national system of Specially Protected Areas in The Kyrgyz Republic. State Reserves are aimed at protection and studying gene pool of animals and plants, typical and unique environmental systems and landscapes, creation of conditions to ensure natural flow of processes in the environment, development of scientific grounds for environmental protection and represent natural environment conservation and research institutions.

67. Land and water areas provided for State Reserves’ permanent use with all the natural resources and objects within their bounds subject to withdrawal from the economic turnover (exploitation). The State Reserves are sources and centers of preservation and rehabilitation of biodiversity and environmental stability that ensure environmental security of the whole country.

Table 4. List of Natural Specially Protected Areas

Square Year of Province/ # Name of Protected Area (ha) Establishment Oblast

State Reserves 1. Besh-Aral 81,600 1979 Djalal-Abad 2. Sary-Chelek 23,868 1959 Djalal-Abad 3. Padysha-Ata 15,846 2003 Djalal-Abad 4. Karatal-Japyryk 21,264 1994 Naryn 5. Naryn 36,969 1983 Naryn 6. Sarychat-Ertash 72,080 1995 Issyk-Kul 7. Issyk-Kul 19,086 1948 Issyk-Kul 8. Kulun-Ata 24,000 2004 Osh 9. Kara-Buura 68,495 2006 Talas

National Natural Parks 10. Besh-Tash 32,411 1997 Talas 11. Saimaluu-Tash 32,000 2002 Djalal-Abad 12. Ala-Archa 4,000 1976 Chui 13. Chong-Kemin 126,514 1997 Chui 14. Salkyn-Tor 10,000 2001 Naryn 15. Kara-Kol 38,256 1997 Issyk-Kul 16. Kara-Shoro 8,450 1996 Osh 17. Kyrgyz-Ata 11,172 1992 Osh Sources: State Agency on Environmental Protection and Forestry, 2006; The Kyrgyz Republic: Environment and Natural Resources for Sustainable Development. Bishkek. 2007.

9. Socioeconomic Conditions

68. The population of the Kyrgyz Republic at the end of 2009 was 5,276,100. This is an increase of 8.4% since 2000. About 35% live in towns; the rest two thirds live in rural areas. There are about 90 ethnic groups live, where the largest ethnic groups are Kyrgyz (68%), Uzbeks (14%), and Russians (10%). Among the ‘other’ are communities of Dungan (Chinese Muslim), Tajik, Korean, Ukraine, Uygur, Tatar, Kazakh and Turkish Demographically, the population of the country is young. At the end of 2005, 33% of total population was children and adolescents, about 58% was employable population, and elderly (retired) people comprised approximately 8%.

69. Working-age population is growing rapidly, indicating that the human potential of the country is growing. However, there are not enough employment opportunities. The level of unemployment is high. Since 2000, unemployment grew from 7.5% up to 8.2% in 2008. The tensest situation emerged in the labor market in 2002, when unemployment level was 12.5%. Average age of unemployed people is 31 years old, of which 50.7% are below the age of 29.

70. Migration is a notable phenomenon for the Kyrgyz population. During 2001-2008, migration outflow was about 269,225 people, or in average more than 29,000 people per a year. According to the World Bank, at the last year-end, Kyrgyzstan was among top ten developing countries, which received major part of money remittances, and ranked 4th in remittances proportion that was estimated at 28% of the GDP. Earnings of labor migrants play statistically significant role in poverty reduction process. In average, increase in share of international remittances in GNP by 10% causes reducing proportion of living in poverty population by 1.6- 1.9%. In absolute figures, amount of money transferred to Kyrgyzstan by migrants in 2008 was as much as US$1,200,000.

71. According to the integrated investigation of household budgets, the poverty level in consumers’ expenditure reduced from 50% in 2003 up to 43% in 2005. Number of poor population in 2005 in comparison with previous year decreased by 3%. In so doing, if in 2003, each sixth citizen got into the poverty stricken category, in 2004 – each seventh one, in 2005 – almost each ninth citizen that testified on extreme poverty level significant reduction. In 2008, poverty level was 44, 4% that is 2,213,000 people, or 412 600 families. Poverty in the country is still mainly rural phenomenon: about three-quarters of all the poor population lives in rural areas.

72. Further details can be found in Annex 1: Social Analysis.

10. Cultural/Historical Heritage

73. The Kyrgyz Republic from the earliest times was a part of the Central Asian civilization and important knot at the active routs of international, diplomatic and cultural communications and dialogues between East and West. Being located right at the Great Silk Road, it took in cultural achievements of different ancient civilizations. An integral part of the World cultural heritage are archeological objects: petroglyphs in Saimaluu-Tash and on the shores of the Issyk-Kul lake, ancient burial mounds of Sak tribal chiefs dating back to V-VI centuries B.C., mediaeval Burana and Uzgen architectural complexes, caravansary Tash-Rabat, Krasnorechenskoe (Red River) ancient settlement. The latter is notable for finds of Buddhist painting and sculpture fragments.

74. Issyk-Kul Oblast is rich in historical and cultural monuments. Totally, there were several thousands of them registered. In so doing, the state protects 320 sites of the registered 1500 archeological monuments. Among them, there are monuments of the Stone, Bronze and Iron Ages (sites, caves, petrogliphs), stone sculptures, letters of ancient Turks, and ancient settlements and mediaeval colonies.

75. In Talas zone, especially large interest provokes canyons of a kilometer depth, chains of numerous lakes. In 1995, at the up-streams of the Talas river, there are two famous monuments: burial ground Ken-Kol (beginning of the 1st millenium A.D.) and Mausoleum “Kűmböz Manasa” (Manas’ Tomb) (XIV century), where in 2002, historical and cultural complex “Manas-Ordo” was established and given the status of National.

76. Osh region possesses a number of famous historical and cultural monuments: Sulaiman- To’o mountain with petroglyphs and religious worship, Tomb Asaf-ibn-Burhiya, Safid-Bulend, 18 minaret and tombs in Uzgen, as well as ancient settlements and burial grounds, where ceramics, arms, instruments of labor, tools, jewelry, and articles of everyday use were found. In the zone, there are a number of caves and canyons: cave Chil-Ustun, canyon Aravan Dangi, petroglyphs Surot-Tash and Nookat, cave Ajidaar Unkur and Baritovaya.

E. SCREENING OF POTENTIAL ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

77. The Project has three components: (i) establishment of the AMDA; (ii) establishment of the SCADA in the northern transmission grid; and (iii) substation rehabilitation. All installation works will take place within existing substations except (a) stringing of OPGW, and (b) laying of underground fiber cables.

78. OPGW is strung over existing transmission towers on existing transmission lines which are located mostly on agricultural land or barren land. Hydraulic tensioner-pullers are used for stringing the OPGW (see picture below).

Examples of OPGW Stringing Equipment

Source: internet images

79. Underground cables are laid beneath public roads in built-up areas by directional drilling to minimize the disruption to road and pedestrian traffic.

Example of Directional Drilling

Source: http://www.astt.com.au/instal.htm

80. Potential environmental impacts and mitigation measures of the Project are provided below. In summary, only minor environmental impacts occur mostly during construction and the impacts are confined mostly to the premises of existing substations. 19

1. Construction Phase

a. Natural Environment

(i) Land Use

81. Available data obtained during visiting and studying environmental conditions around and within existing substations’ areas in various provinces of the country testify that the overwhelming majority of substations are located adjacent to villages and towns. Transmission lines where OPGW are to be strung are mostly located on agricultural land. Crop compensation will be required, but there is no need for change in land use or additional land. The underground fiber cables are to be laid beneath public roads in built-up areas, and also will not require changes to land use.

(ii) Soils

82. Since equipment installations in existing substations require minimal civil works, impact on the soil is negligible. The stinging of OPGW does not require any civil works as OPGW is strung overhead across several transmission tower sections by use of tension machines. The installation of underground fiber cables by directional drilling has minimum disruption to the soil. Spoil from directional drilling shall be disposed properly in accordance with the applicable laws of the Kyrgyz Republic.

(iii) Water

83. The installation works in the substation and stringing of the OPGW will not affect surface or groundwater. Underground cable fibers will only require minimum diameter and will not disrupt groundwater.

84. The only potential risk is the leakage of transformer oil from the CTs and VTs, but they will be collected by the pits laid sub-surface of the substation. Precautions in accordance to best international practice will be taken by NEGK as they will be installing CTs and VTs using its own resources.

85. NEGK has recent experiences in conducting similar works. Oil collectors are typically installed beneath the 30cm of gravel to collect accidental mass discharges of oil. Small amounts of leakage are collected by an oil receiver pan. The last mass discharge of transformer oil was at Chuyskaya Substation in 2003 when the automatic transformer caught fire.

b. Solid Waste and Hazardous Materials

(i) Solid Waste

86. Solid wastes potentially generated by the Project are as follows: (i) old meters being replaced; (ii) old CTs, VTs and CBs being replaced; and (iii) old ground wires being replaced by OPGW.

87. It is expected that most uninstalled meters, CTs, VTs, and CBs will be stored as spares. Consultations with NEGK Metrological Department specialists revealed that there was a mass change of meters in 2005-2006, where old meters were partially dismantled for spare parts and the rest were stored at NEGK warehouses. It is envisaged that these equipments will be provided to the distribution companies for them to reuse in the distribution substations. 20

88. Nevertheless, there will be solid waste generated that will not be stored, reused, or scrapped. NEGK shall ensure that the turnkey contractor and the equipment supply contractor, as per their respective contracts, disposes solid waste in an internationally acceptable manner, in accordance with relevant laws of the Kyrgyz Republic, and in accordance with regulations including the Law on General Technical Regulation to Ensure Environmental Security in the Kyrgyz Republic (2009), and other power industry regulations such as “Operational Methods Standards,” “Standards of Electric Equipment Setup,” and “Standards for NEGK Use.”

(ii) Hazardous Material

89. Although polychlorinated biphenyls (PCB) were never produced in the Kyrgyz Republic, the National Implementation Plan for the Stockholm Convention on POPs indicates the possibility of it being imported in electrical equipments. There is no data to demonstrate the presence of the absence of PCBs in the equipments to be replaced under the Project. Therefore, necessary precautions and testing will be conducted by NEGK. Procurement of an indicative testing kit has been included in the environmental monitoring budget. In case PCB is identified, PCB will be disposed in accordance with international best practice and following the recommendation of the Stockholm Convention on Persistent Organic Pollutants.

90. United Nations Development Programme (UNDP) has recently commenced the “Management and Disposal of PCBs in Kyrgyzstan”. The project includes the preparation of an inventory on the use of PCBs and procurement of PCB analysis equipments. The Project should coordinate closely with UNDP in the identification and handling of PCBs in Project-related equipments.

91. The dismantling of old CBs, CTs, and VTs may expose workers to undue occupational health and safety hazards. NEGK and the turnkey contractor must apply preventive and protective measures consistent with international good practice, as reflected in internationally recognized standards such as the World Bank Group’s Environment, Health and Safety Guidelines (EHS Guidelines).

c. Air, Noise and Vibration

(i) Air Quality

92. Some minor unavoidable dust generation will take place during excavation to prepare foundations for the CBs, CTs and VTs, and during directional drilling. These can be minimized by spraying of excavated earth in case of dry weather conditions. Air quality is likely to be degraded by exhaust emissions from the operation of construction machinery, but civil works are minimal in the Project. Construction equipment will be maintained to a good standard and idling of engines will be discouraged. Machinery causing excessive pollution (e.g., visible smoke) will be banned from the construction sites. Dump trucks carrying spoils through residential areas, if any, will be covered with tarpaulins.

93. For the CBs, gas insulated switchgear (GIS) will be adopted. Compared to the classical air insulated switchgear (AIS), GIS has the advantage of (i) occupying only a fraction of the plot area necessary for AIS, (ii) through their metal-clad construction, GIS switchyard effectively shields the electric field from the surroundings; and (iii) being far less noisy than the classical alternative circuit breakers. GIS is the industrial norm.

94. For GIS CBs, sulfur hexafluoride (SF6) are used. SF6 is an inert gaseous dielectric that provides excellent insulation and arc quenching performance. SF6 gas itself has no influence on 21 humans, animals or plants. However, as a result of the electric arc, extremely small traces of agents detrimental to health may be formed. This agent will be contained in the equipment and will not be exposed to the atmosphere.

95. Another characteristic of SF6 is that it is a very highly effective and persistent greenhouse gas. SF6 has a global warming potential (GWP) of 23,900 meaning that one ton of SF6 corresponds to 23,900 tons of carbon dioxide (CO2) in terms of GWP. SF6, however, will only be used in small amounts gas leaks appear very seldom during its lifetime in the order of 50 years. Detectors will be installed as part of the procurement package to detect any SF6 leakage.

(iii) Noise and Vibration

96. Some noise and vibration are expected in the dismantling and installation of CBs, CTs and VTs, and during stringing of OPGW and directional drilling. However, noise and vibration from such works are expected to be minimal. NEGK and the turnkey contracts are to maintain noise levels under the decibel levels stipulated by the Kyrgyz law. When work sites are close to settlements, noise measurements shall be conducted. Limit values as stipulated by the World Bank Group’s EHS Guidelines should be strictly followed

d. Ecological environment

(i) Fauna and Flora

97. According to the existing rules and standards, 6 the substation area before stage of construction, passes through the process of planning, laying underground communications, pipelines, water and oil collectors, and various types of reservoirs. The earth at the substations therewith should be leveled; the soil should be planted with grass, alternating with gravel, earth and sand covering. The fauna and flora therefore have gone through significant anthropogenic influences during construction and during operation.

98. Therefore, the impact of installation works on fauna or flora in the substation compound is negligible. Since underground fiber cables are installed beneath public roads with minimum disturbances on the surface, there is no impact on fauna and flora either.

99. OPGW is installed overhead on existing transmission towers along existing transmission line routes. Impact on the ground is minimal as OPGW is strung across several spans at a time. It is assumed that work space is required every 3 km (assumed average length of the transmission line between two tension towers). The work space required is assumed to be at about 100 m2 and a further 500 m2 is assumed for access to the tower. Remote sensing study

6 See “Guidelines for electric unit installation”, 4.2.74. A passage for motor transport should be provided along the planned area of outdoor switchgears and substations, and dirt surface improved in the case of necessity by adding solid additives or grass planting. Motor ways with pavement (improved, transitional, lower) are provided as a rule towards … buildings of control boards, indoor switchgears, and complete distribution devices of external installation, along single-throw breakers of outdoor switchgears 110 kW and more, premises for lubricating oil, goods shed, outdoor oil storage, pumping stations, water reservoirs, compressor houses, storehouse of hydrogen…. Traffic area of the intrasite roads should be not less than 3,5 m wide. See also SNiP (СНиП) 3.05.06-85, «Electric Technical Facilities», 2.18. Prior to the electric mounting works at the outdoor switchgears with voltage 35 kW and more, the constructing organization should finish building of access roads, … created foundations for electric equipment,…reservoirs for accidental oil discharge, underground communications and planning of the territory finished. Also, construction of water supply system and other specified by design fire- prevention facilities.

22 through the use of Google Earth ® indicates that most existing transmission lines either pass through agricultural land or barren land parallel to the roads. As most, if not all, work spaces and access are reported to be in such areas already impacted by anthropogenic activities, the impact on fauna and flora is negligible.

Example of Google Earth ® Image of Existing Transmission Line Route

(iv) Environmentally-Sensitive Areas

100. Although a visit to all 190 substations was not possible, consultations with SAEP&FM personnel and NEGK staff indicated that in the close vicinities of the existing substations were installation works will be performed there are no Special Protected Areas (SPAs). It is also reported that the existing transmission lines routes where OPGW will be strung do not pass through SPAs.

e. Socioeconomic impact

(i) Socioeconomic Impact

101. The influx of workers for the installation works is minimal and duration at each site is short. However, since the transmission line route where OPGW is to be strung goes through agricultural land, crop compensation is required. Potential crop compensation requirements and budget is provided separately in the Land Acquisition and Resettlement Plan. 102. The laying of the underground fiber cable will disrupt vehicle and pedestrian traffic, but directional drilling will minimize the disruption. Nonetheless, appropriate traffic control must be put in place to avoid traffic accidents.

(ii) Socially-Sensitive Areas (Historical and Cultural Heritage)

103. Since all works are performed either within the substation, along public roads, or along existing transmission line routes, that there are no historical or culturally important sites/heritages around Project sites. It is also reported that there are no places for worship of the local population affected by the Project.

(iii) Existing Facilities

104. Equipment installation in substations will partially interrupt power supply through the transmission lines. NEGK and the turnkey contractor are to carefully plan the equipment installation schedule to minimize the disruption by appropriately sequencing the works and selecting off-peak hours. "Live line" installation of OPGW without interrupting power supply is technically possible. However, this is an expensive option which the current Project design does not envisage. Therefore, careful planning is also required to minimize the interruption. In addition, for the safety of the workers and to avoid faults, full compliance with appropriate statements of “Safety specifications under operation of electric units”, as well as “Rules of electric units arrangement”7 and relevant technical regulations is critical.

105. The laying of underground optical fibers will require pit excavation or drilling of the existing paved road. Such damage to the existing infrastructure shall be properly remedies after installation of the underground optical fibers. It is also important to coordinate carefully with other utilities to avoid damage to other underground networks such as water supply, sewerage, telephone lines, etc.

2. Operation Phase

106. The Project replaces obsolete equipment in existing substations and installs OPGW and underground fiber cables. The operation of the transmission grid and commercial metering will significantly improve, but there are no additional adverse environmental impact arising from the Project. On the contrary, the Project will positively impact the environment through (i) loss reduction resulting in efficient use of resources, (ii) replacement of CTs and VTs that may cause transformer oil leakage, and (iii) improved reliability of power that reduces burning of biomass and fossil fuels.

a. Natural Environment

(i) Water

107. There is no impact on surface water and groundwater during operation. Oil leakages from the instrument transformers, if any, will be collected in the oil pit and will not contaminate surface or groundwater.

b. Solid Waste and Hazardous Materials

(i) Solid Waste

108. Operation of the equipment and communication systems installed under the Project does not generate any solid waste during operation. The contract for the equipment supply contractor

7 Safety specifications under operation of electric units. Moscow, “Energoatomizdat”. 1987. Rules of electric unit arrangement. Moscow. “Energoatomizdat”, 2000. 24

should include a clause for the contractor to (i) to take back the equipment containing SF6 at the end of its useful life, or have a certified company dispose them properly.

c. Air, Noise, Vibration

(i) Air Quality

109. The lifetime of gas-insulated circuit-breakers is in the order of 50 years and SF6 gas leaks appear very seldom. State-of-the-art technique limits gas losses to less than 0.5-1% per year depending on the guarantee of the manufacturer. SF6 gas should not be leaked during maintenance activities if handled properly. It may be noted that SF6 is a very expensive gas. Therefore, it is in the best interest of NEGK to reduce leakage as much as possible. Some guidelines for proper handling of SF6 are given below: (i) IEC 60376 Specification of technical grade sulfur hexafluoride (SF6) for use in electrical equipment ‘ (ii) IEC 60480 Guidelines for the checking and treatment of sulfur hexafluoride (SF6) taken from electrical equipment and specification for its re-use (iii) IEC 62271-303 High-voltage switchgear and controlgear - Part 303: Use and handling of sulphur hexafluoride (SF6)

110. The equipment supply contractor’s contract should include provision to train NEGK personnel in handling GIS equipment and responding to any potential accidental leaks.

(ii) Noise and Vibration

111. Noise exceeding current levels is not expected. If gas-insulated breakers are used, they produce far less noise than the classical alternative circuit breakers. Vibration is not expected during the operation phase.

d. Ecological Environment

(i) Fauna and Flora

112. There is no impact on fauna and flora during operation of the equipments installed under the Project.

e. Socioeconomic Environment

(i) Socioeconomic impact

113. It is expected that installation of new equipment will lead to the exclusively positive consequences for the socioeconomic status of the country as a whole, and each separate province, in particular, since in the conditions of unsustainable conditions in power generation and supply in Kyrgyzstan, improvement of consumed and transmitted electric power accountability system improvement is an important factor of economic progress and security, and indirectly – that of the local population’s wellbeing.

F. INSTITUTIONAL REQUIREMENTS AND ENVIRONMENTAL MONITORING PLAN

114. The environmental monitoring and management plan (EMMP) is presented below. The EMMP shall be updated together with the IEE based on the detailed design. It should be noted that there are two procurement packages: (i) turnkey contract for the development of the AMDA 25 and SCADA including installation of OPGW and underground fiber cables; and (ii) supply and delivery contract for CTs, VTs, and CBs. The supplied equipment of the latter will be installed by NEGK itself. Therefore, it is envisaged that separate IEEs will be prepared as follows: (i) Turnkey Contract: The turnkey contractor will update the IEE based on its detailed design for approval by NEGK and ADB. (ii) Equipment Installation: NEGK will update the IEE based on its detailed design for approval by ADB.

115. The Safeguard Specialist of NEGK's Project Implementation Unit (PIU) will have overall responsibility to ensure that the EMMP is implemented.

116. The implementation of mitigation measures stipulated in the EMMP will be the responsibility of the turnkey contractor for the works under its contract. The contractor's such responsibilities will be clearly indicated in the bidding document as well as in the contract. Cost of the implementation of the management measures is included in the Project cost and will be included in the contract price. This includes the cost of disposal of waste materials that are not sold to local recycling companies. The Project implementation consultant will assist the PIU in inspecting the implementation of the mitigation measures and report to the PIU through weekly meetings and progress reports.

117. NEGK will be responsible for implementing the EMMP for the installation of CBs, CTs, and VTs. The Project implementation consultant will inspect the implementation of the mitigation measures and provide recommendations. The status of EMMP implementation will be described in the progress reports.

118. Both NEGK and the turnkey contractor shall submit monthly environmental monitoring reports as part of the progress report for the review and endorsement of the PIU and the Project implementation consultants. During construction regular audits shall be performed twice a year by the international project implementation consultants and report to ADB.

119. The PIU, with the assistance of the implementation consultants, will perform daily visual inspections of the site to verify the implementation of the EMMP. Such inspections shall include checking for adequate disposal of spoil in the spoil bank and the appropriate disposal of other waste materials such as old metals and ceramics. As the Project is confined in a limited area, and since the PIU has already been established, no additional cost is incurred by the PIU for environmental management.

120. The following devices should be purchased for environmental monitoring and to ensure safety of their staffs. The cost is included in the Project cost financed by ADB. • SF6 measuring device $5,000 • PCB testing kits $2,000

121. Although it is reported that hazardous materials are not used in the existing equipments scheduled for dismantling, NEGK will be responsible for the disposal of such materials if any are identified. In such case, NEGK shall immediately inform ADB and NEGK shall ensure that adequate budget is allocated for the safe disposal of the hazardous materials. It is not possible to estimate the cost of disposal at this stage.

122. Crop compensation requirements and budget are separately addressed in the Land Acquisition and Resettlement Plan.

G. ENVIRONMENTAL MONITORING AND MANAGEMENT PLAN (EMMP)

1. Phase of meters and SCADA installation Issue Potential Impact Mitigation Measures Implementing Agency a. Natural Environment Land Use Change in land use Change in type of the land use is not Not required Not required foreseen

Land acquisition and resettlement Land acquisition and resettlement will not Not required. NEGK be required. Soils Soil Soil is not expected to be polluted. Annual soil sampling to confirm transformer oils are not leaking NEGK during construction.

Water Surface water At the areas, where substations located, Not required Not required there are no any surface water sites or any other significant in size water objects Ground water Groundwater will not be polluted. Oil Semi-annual groundwater monitoring to confirm oils are not NEGK leakage from transformers, if any, will be leaking during construction. collected by the pit. b. Solid Wastes and Hazardous Materials Solid wastes Most of the (i) old meters being replaced; Disposal in accordance with laws and regulation of the Kyrgyz NEGK and turnkey contractor (ii) old CBs, CTs, and VTs being replaced; Republic. and (iii) old ground wires being replaced by OPGW are expected to be used for spare Mandatory testing for PCB for all equipment with transformer oil parts or stored for future use. Old ground using the indicative test kit. wires being replaced by OPGW may be recycled. Nevertheless there will be Close coordination with UNDP’s “Management and Disposal of generation of solid wastes that require PCBs in Kyrgyzstan” project. proper disposal. c. Air, Noise and Vibrations Dust from civil works. Minor dust generation during excavation to These can be minimized by spraying of excavated earth in case of NEGK, turnkey contractor prepare foundations for the CBs, CTs and dry weather conditions. VTs and during directional drilling. Dust and emissions from vehicles Construction vehicles may cause dust and Construction equipment will be maintained to a good standard and NEGK, turnkey contractor emissions. idling of engines will be discouraged. Machinery causing excessive pollution (e.g., visible smoke) will be banned from the construction sites. Dump trucks carrying spoils through residential areas, if any, will be covered with tarpaulins. 26 27

SF6 in circuit breakers Leakage of SF6 causing greenhouse effect. SF6 leakage should be monitored closely during installation NEGK, turnkey contractor according to IEC guidelines. Noise levels Noise levels are not expected to be large, Noise levels should be maintained within limits stipulated by World NEGK, turnkey contractor but appropriate monitoring is required. Bank guidelines: - 55 dB(A) during day time and 45 dB(A) during night time for residential areas (World Bank, Prevention and Abatement Handbook, 1998). - Ear protection devices shall be handed out where 85 db(A) are exceeded (World Bank IFC General Health and Safety Guideline, 1998). d. Ecological environment Fauna and Flora No impact. Environmentally sensitive Areas No Specially Protected Areas have been The non-existence of Specially Protected Areas in the Project site NEGK, turnkey contractor identified at this stage, but this must be must be confirmed during detailed design. If identified, appropriate confirmed during detailed design. licenses should be obtained and procedures must follow the laws and regulations of the Kyrgyz Republic. e. Socioeconomic environment Social impact Crop compensation for work space and Crop compensation requirement is addressed separately in the NEGK access for OPGW stringing. Land Acquisition and Resettlement Plan. Power interruption during equipment Careful sequencing and timing of installation works to minimize NEGK, turnkey contractor installation. interruption as much as possible. Laying of underground fiber cable may Use of directional drilling to minimize disruption, and NEGK, turnkey contractor disrupt vehicle and pedestrian traffic. implementation of appropriate traffic control to avoid traffic accidents. Socially sensitive areas (historical No historical or cultural heritages have The non-existence of historical and cultural heritages in the NEGK, turnkey contractor and cultural heritage) been identified at this stage, but this must Project site must be confirmed during detailed design. If identified, be confirmed during detailed design. appropriate licenses should be obtained and procedures must follow the laws and regulations of the Kyrgyz Republic. Existing facilities Accidental damage to existing underground Coordination with local utilities to identify exact location of other NEGK, turnkey contractor infrastructure. utility networks such as water supply, sewerage, and telephone lines. 2. Phase of Operation a. Natural Environment: Mitigation measures will not be required. b. Solid Wastes and Hazardous Materials: Mitigation measures will not be required. c. Air, Noise and Vibration SF6 in circuit breakers Leakage of SF6 causing greenhouse SF6 leakage should be monitored closely during operation NEGK effect. according to IEC guidelines. d. Ecological environment: Mitigation measures will not be required. e. Socioeconomic environment: Mitigation measures will not be required.

. 28

H. PUBLIC CONSULTATION AND INFORMATION DISCLOSURE

123. Consultations were conducted at two levels: (i) NEGK regional offices; and (ii) public consultations with the population who may potentially be affected by the Project. The record of consultations is found in Annex B.

1. Consultation with NEGK Regional Offices

124. Consultation meetings with the staff of oblast branches of NEGK and substations (Osh, Djalal-Abad, Chu Oblasts, lists are attached) were conducted. The objectives of the Project were clarified, and its environmental and socioeconomic impacts and mitigation measures were discussed. Participants generally supported the Project.

2. Public Consultation

125. Public consultations were conducted with the populations in the affected areas. The consultation focused in the areas where OPGW is expected to be installed, since it is the only activity with direct impact to the population in the form of possible temporary crop loss during stringing.

126. The Project was generally supported, and no substantial comments were made on the environmental impact. Most comments were on the possible crop loss during the stringing activity and the method of compensation. The compensation mechanism is documented in detail in the Project’s Resettlement Framework.

127. Further consultation will be conducted at the detailed design stage when the exact location of the impact from OPGW stringing is confirmed. Turnkey contractor and NEGK will be mandated to: (i) Disclose project details (nature of works, expected impact, mitigation measures, duration of works, etc) in every oblast where substation works are implemented and where underground fiber cables will be installed; (ii) For the stringing of OPGW, NEGK will hold public consultations with the affected people and with community groups. The detailed design shall be made based on discussions held during public consultations.

I. GRIEVANCE REDRESS MECHANISM

128. During the course of Project implementation, it is possible that unanticipated impacts occur and/or the mitigation measures are not properly taken. In order to resolve the problem in a timely and effective manner, and to guarantee the implementation to be carried out smoothly, an open and effective appeal channel is required. The appeals for environmental concerns should be free of charge and all expenses incurred shall be paid from the Project contingencies. The grievance redress mechanism is shown below.

Affected Person

Grievance

District Level NEGK Staff/local council and Redressed

t Not Redressed t

m Resolve with implementation consultant Redressed o C

s Not Redressed

Appeal to PIU Redressed R

n Not Redressed

I Appeal to NEGK Redressed r

Not Redressed Through NGOs

Appeal to Appropriate Appeal under ADB’s Court Accountability Mechanism

ADB = Asian Development Bank; NEGK = National Electric Grid of Kyrgyzstan; NGO = non-governmental organization; PIU = project implementation unit of NEGK.

J. GENERAL CONCLUSIONS AND RECOMMENDATIONS

129. Having made the assessment of the possible impacts from the part of the prospecting activities of the Project, the Consultant concluded that the Project activities would take place as a whole under minimal adverse impacts or these impacts would be zero/neutral both for the environment and for the local communities: Installation and operation of the new equipment will not exert significant negative impact on the environment, and for the local communities this impact will be practically imperceptible; 30

The only factor that required to be taken into account is indirect and farther adverse impact caused by disposal cases of old demounted meters made of polystyrene at the stage of used equipment; Because of this fact it is necessary to consider opportunities (as an alternative) to sell and/or transfer/donation of out-dated, but still well operable meters – to the third countries for their further application at the substations to use for intended purpose; The same factor is necessary to be taken into consideration while selection of new meters’ type so that in future while their mass change, there would be sound and environmentally sustainable and safe technologies of recycling; For introduction of the more advanced methods for NEGK operation, it is necessary to develop a GIS-technology based map, where all the existing and planning substations of the country would be mapped. It would allow defining environmentally sensitive areas location in relation to possible sources of negative impact and take this factor into account when placing the future sites/substations as well as possibility of negative impact form their part. That could in many respects to facilitate OVOS/EIA at present, and provide reliable and comprehensive materials for the future undertakings in this sphere, both for NEGK and for international donor community. There is no any necessity to hold full EIA and local community assessment, as all the required factors have already been taken into account. If all the recommended mitigation measures are taken into consideration, the Project will have a positive economic and technical effect for the energy sector and for electric grid operation, in particular.

LIST OF REFERENCES

A. STATISTICAL MATERIALS

1. CDF/NSPR/MDG: Statistical materials of the Kyrgyz Republic and its regions development. National Statistical Committee of the Kyrgyz Republic. Bishkek. 2005. (English/Russian) 2. Kyrgyz Republic and its regions. Bishkek. 2008. (Russian) 3. Social trends in the Kyrgyz Republic. Issue 2. Bishkek. 2007. (Russian) 4. Kyrgyzstan. Environment and natural resources for Sustainable Development. Bishkek. 2007. 5. Living standards of the Kyrgyz Republic population. 2001-2005. Annual Book. Bishkek. 2006. 6. Women and Men in the Kyrgyz Republic. National Statistical Committee. Bishkek. 2005. 7. Environmental Protection in the Kyrgyz Republic. 2000-2006, Statistical Book. Bishkek. 2008.

B. SCIENTIFIC PUBLICATIONS, REPORTS AND INTERNET DATA 8. Applied research guidebook on USSR climate. Series 3. Long-term data. Parts 1-6. Issue 32. Kirghiz SSR. 9. Atlas of the Kirghiz SSR. Moscow. 1986. 10. http://kyrgyzstan-info.ru/min2-dorogi.html 11. www.wikipedia.org 12. Kyrgyzstan: Environment and Natural Resources for Sustainable Development. UNDP publication. Bishkek. 2007. 13. Monitoring, Prognosis, and Preparedness to React to Possible Activations of Hazards in Kyrgyz Republic and contiguous areas of the neighboring states of Central Asia. Bishkek. 2007. (Published by ME KR). 14. Shukurov E.D. Biodiversity issues in Kyrgyzstan //Izvestiya National Academy of Sciences. KR. “Echo of science”. Bishkek. 1997. - №2-3; Draft of strategy and action plan on biodiversity protection. Ministry of Environmental Protection. Bishkek. 1998.

C. STANDARDS, SNiPs, INSTRUCTIONS AND RULES 15. Rules of Electric Units Arrangement (PUE). Moscow, 2000. 16. Rules of safety measures and accident prevention when electric facilities operating. Moscow, 1987. 17. SNiP 3.05.06-85 «Electrical Facilities». 18. SNiP. 3.01.01-85 «Organization of construction operations», Chapter 10 «Environmental Protection». 19. SNiP KR 30-01-2001. «Urban Development. Planning and Housing of towns and urben- type communities». Bishkek. 2001. 20. Meters of electric energy, multifunctional. СЭТ-4ТМ.03М, СЭТ-4ТМ.02М. Guidelines for operation. ИЛГШ.411152.145 РЭ.

D. ADB POLICIES AND DOCUMENTS 21. ADB; Environment Policy of the Asian Development Bank (November 2002, Manila), Environmental Assessment Guidelines (2003, Manila), OM Section 20 – Environmental Categorization, and OM Section F1/BP and OM Section F1/OP – Environmental Considerations in ADB Operations (September 2006, Manila). 22. Safeguard Policy Statement. ADB. Manila. June 2009.

Annex A: SOCIAL ANALYSIS

I. INTRODUCTION

A. Overview

1. The Transmission Metering Project aims to bring transparency and accountability to the power sector wholesale market through the development of automated metering and data acquisition (AMDA) system. The Project comprises installation of modern meters, a network of a communication system and basic components of a supervisory control and data acquisition (SCADA) system.

2. The AMDA will drastically reduce inadvertent human errors and manipulation of metering data, and is expected to contribute to electricity loss reduction. Electricity made available through loss reduction will be directed to service the load of domestic consumers as well as exported to neighboring countries. This will improve the financial sustainability of the power companies, which in turn enables them to invest in rehabilitation and replacement of the archaic transmission system inherited from the Soviet era. The development of the AMDA, therefore, contributes to enhanced stability of power supply to the general population.

3. The executing agencies of the Project are (i) Ministry of Energy, and (ii) National Electric Grid of Kyrgyzstan (NEGK). The latter is the transmission company and also the system operator of the Kyrgyz power grid.

4. All works and equipment installation will take place in existing high-voltage substations or on existing transmission lines. Adverse social impact is not anticipated, and thus, a land acquisition and resettlement plan has not been prepared. The Project is also gender neutral. This social analysis describes the social context of the Project are (which covers most of the country), and the possible impact of the Project on the society.

B. Rationale of the Project

5. The Kyrgyz Republic is a small land-locked country with a population of 5.4 million. It is one of the poorest countries in Asia with gross domestic product (GDP) per capita of KGS 35,2411 (approximately $800 at $1=KGS 44). The country is endowed with large hydropower potential where 97% of its annual energy is generated by hydropower. The Kyrgyz Republic is the largest net exporter of electricity in the Central Asian Power System (CAPS) and supplies hydro-based summer surplus power mainly to Kazakhstan and Uzbekistan.

6. The vertically-integrated power utility, KyrgyzEnergo, was unbundled in 2001 aiming to bring efficiency and transparency to the sector. The industry today consists of one generation company (Genco), one transmission company (Transco), and four distribution companies (Discos). Although some improvements followed, the sector remains inefficient as represented by high electricity losses. In 2007, 5.9 terawatt-hours (TWh) out of 12.2 TWh supplied domestically was unaccounted for. Applying ¢2.0/kilowatt-hour (kWh) as the average tariff at the time, this translates into a loss of $118 million, or 41% of the potential revenue. Without budget for necessary maintenance, fuel purchase, rehabilitation or new investment, the power sector is in a dire condition, both technically and financially. Although electrification ratio is nearly 100% since the Soviet era, load shedding is frequent especially in the winter when hydropower output is limited due to low river discharge. Forced outages are common due to dilapidated power infrastructure such as protective relay system.

1 ADB. Key Indicators for Asia and the Pacific 2009. 2 7. High losses have caused the entire power sector into jeopardy with quasi-fiscal deficit amounting to 4.9% of GDP in 2007. The Government prioritizes loss reduction and sets clear targets in its Country Development Strategy 2009-2011 (CDS). The Joint Country Support Strategy 2007-2010 (JCSS), prepared by major development partners including ADB, supports the CDS and recognizes the importance of policy and investment measures to reduce financial and technical losses in the power sector.

8. It is reported that total loss in 2009 was 32% (transmission loss: 6%; and distribution loss: 26%). On top of metering inaccuracy and human errors typical to an obsolete metering and data acquisition system, electricity pilferage, meter-tampering and metering data manipulation are rampant at all voltage levels. The archaic system does not have the capability to trace such fraudulent conduct, and lack of proper metering is one of the major obstacles for loss reduction. A tamper-proof hardware that eliminates the "human factor" is required to support the management's efforts to combat losses.

9. Inappropriate metering also undermines commercial operations of the power companies. Since associated investment did not accompany the reform, electricity flow from one company to another is not accurately monitored. Without proper metering and financial settlement based on such readings, wholesale market transactions remain opaque.

10. The Project will develop an AMDA to eliminate the "human factor" and significantly reduce commercial losses and enable accurate monitoring of cross-border electricity flow. The system together with advisory support on sector reform and financial management capacity building will also bring transparency and accountability to the power sector.

C. Project Description

11. Project's impact is improved reliability of national and regional power supply in the Kyrgyz Republic and Central Asia. The outcome is the improved operational efficiency of the power companies.

12. Project's physical outputs are: (i) modern wholesale meters at (a) boundaries between Genco, NEGK, and Discos, and (b) import/export nodes; (ii) modern communication system linking major substations; and (iii) basic components of SCADA system enabling automated metering data acquisition and analysis.

13. Under the Project, installation works will take place at major substations and transmission lines throughout the country. All substations and transmission lines included in the Project already exist. In the substations, meters and communication devices will be replaced. Some instrument transformers will be exchanged to match the new meters. All works are limited to within the existing substation premises. Fiber optic cable will either be optical ground wires (OPGW) to be strung on existing transmission towers, or underground optical cables under public roads in urban areas.

II. SOCIOECONOMIC CONTEXT

A. Population

14. The population of the Kyrgyz Republic at the end of 2009 was 5,276,100. This is an increase of 8.4% since 2000. About 35% live in towns; the rest two thirds live in rural areas. There are about 90 ethnic groups live, where the largest ethnic groups are Kyrgyz (68%), Uzbeks (14%), and Russians (10%). Among the ‘other’ are communities of Dungan (Chinese Muslim), Tajik, Korean, Ukraine, Uygur, Tatar, Kazakh and Turkish.

3 15. Demographically, the population of the country is young. At the end of 2005, 33% of total population was children and adolescents, about 58% was employable population, and elderly (retired) people comprised approximately 8%.

Table 1. Growth of the population in 2003-2009, as of the years’ beginning, in % to 2000 Total population 2003 2004 2005 2006 2007 2008 2009 including: 2.4 3.5 4.6 5.6 6.6 7.3 8.4 younger than able-bodied age: -3.6 -4.6 -5.4 -6.2 -6.5 -6.5 -6.3 In able-bodied age 7.4 10.3 13.0 15.4 17.4 18.6 20.2 Older than able-bodied age -2.1 -3.2 -3.5 -3.9 3.1 1.9 0.4 Source: National Statistical Committee, Kyrgyz Republic

B. Employment

16. It can be seen that the able-bodied age group is growing rapidly, indicating that the human potential of the country is growing. However, there are not enough employment opportunities. The level of unemployment is high. Since 2000, unemployment grew from 7.5% up to 8.2% in 2008. The tensest situation emerged in the labor market in 2002, when unemployment level was 12.5% (see Table 2). Average age of unemployed people is 31 years old, of which 50.7% are below the age of 29.

Table 2. Employment and unemployment in 2000-2009, % 2000 2001 2002 2003 2004 2005 2006 2007 2008 Population employment level 56,3 57,7 58,3 59,5 60,1 59,8 60 Unemployment level 7,5 7,8 12,5 9,9 8,5 8,1 8,3 8,2 8,2 Poverty level, % 62,5 56,4 54,8 49,9 45,9 43,1 39,9 35 31,7 Source: National Statistical Committee of the Kyrgyz Republic.

17. By types of economic activity, it can be seen that during last 8 years employment became higher in construction, hotel and restaurant business, transport and communications, trade and industry. Outflow of labor force could be observed in agriculture sector, and comprised 20.8% against year of 2000. Share of employed in agriculture reduced by more than 19 percentage points (see Table 3).

Table 3. Structure and Growth in Employment by types of Economic Activity in 2000, 2000-2006, in % to 2000

2000 2006 2007 2008 Share Share Growth Share Growth Share Growth Total 100 100 118,5 100 121,7 100 123,5 Agriculture, hunting and forestry 53,1 36,6 81 34,5 79,1 34 79,2 Industry 8 10,7 158,8 10,7 162,9 10,5 161,5 Construction 2,50 8,70 418,00 9,50 473,00 10,20 511,30 Trade and vehicle repair 10,60 14,70 164,00 14,70 168,60 14,60 169,90 Hotels and Resaurants 0,70 2,30 374,00 2,70 445,80 3,00 505,30 Transportation and Communication 3,60 5,70 189,60 6,20 210,30 6,10 211,00 Social Services 15,50 13,80 105,50 13,30 104,50 13,40 106,60 Other 6,00 7,80 153,00 8,30 168,60 8,20 168,20 Source: National Statistical Committee of the Kyrgyz Republic.

C. Migration

18. Migration is a notable phenomenon for the Kyrgyz population. During 2001-2008, migration outflow was about 269,225 people, or in average more than 29,000 people per a year.2 In 2005, emigration of Kyrgyz ethnic population to CIS countries sharply increased. In the group of emigrants, share of ethnic Kyrgyz at that period for the first time exceeded all other ethnic groups, and became comparable with the number of ethnic Russian emigrants. The most active outflow of the population from Kyrgyzstan started before the 2005 Tulip Revolution and especially increased after it, having reached its peak magnitude in 2007, when tense political situation and unstable economic conditions forced people to leave Kyrgyzstan. In 2008, 37.790 people left Kyrgyzstan mostly for Russia (35,168), Kazakhstan (2,553), Germany (125), USA (83), and other countries.3 It can be expected that another large wave of emigration will rise after the happened in April 2010 second Kyrgyz Revolution followed by marauding and public disorders in North (Bishkek, Talas) and South Kyrgyzstan (Osh, Djalal-Abad). 19. Migrants living and working in Russia and Kazakhstan comprise a large group of people, who regularly provide financial support for their relatives in Kyrgyzstan in the form of monthly money remittances. According to the World Bank, at the last year-end, Kyrgyzstan was among top ten developing countries, which received major part of money remittances, and ranked 4th in remittances proportion that was estimated at 28% of the GDP. Earnings of labor migrants play statistically significant role in poverty reduction process. In average, increase in share of international remittances in GNP by 10% causes reducing proportion of living in poverty population by 1.6-1.9%. In absolute figures, amount of money transferred to Kyrgyzstan by migrants in 2008 was as much as US$1,200,000.

Figure 1. Migration Into and From Kyrgyz Republic by Years 70000 60000 50000 40000 30000 20000 10000 0 2001 2002 2003 2004 2005 2006 2007 2008

Immigrants Emigrants

Source: National Statistical Committee of the Kyrgyz Republic, 2009.

20. Due to the rapid growth of international prices for food and energy carriers, inflation rate in Kyrgyzstan had sharply risen and reached its peak in the middle of 2008, being estimated at 30%. That was followed by negative impact of global crisis on Russia and Kazakhstan, which were the Kyrgyz Republic’s major trade partners and sources of money remittances. In the conditions, when Russia and Kazakhstan were passing through the economic recession, economy growth in Kyrgyzstan practically stopped.

21. Because Kyrgyzstan was not widely involved into the international economic and financial relations, its economic recession was not significant. The country was rather influenced by the global crisis indirectly, through reducing remittances from the mentioned

2 http://www.stat.kg/rus 3 http://www.stat.kg/rus/Home/analysis.html 5 countries, where number of jobs was significantly reduced. It negatively influenced state revenues and consuming capacity, and hence, deteriorated poverty level in Kyrgyzstan. In such conditions, socioeconomic vulnerability of the local population became higher. The country also faced the issue of providing necessary facilities for the coming back workers- migrants, who lost their employments in neighboring countries.

22. Internal migration also plays an important role in socioeconomic picture of Kyrgyzstan. For the 2001-2009 period, migration from rural areas to towns continued. Major flows of migrants made their ways towards Chui Oblast and Bishkek with their wider opportunities of employment. Additionally, the situation was partially contributed by high level of emigration from Chui valley and Bishkek to other countries and hence, created more opportunities for the Kyrgyz internal migrants to find jobs in the metropolitan area.

23. Coming to Chui Oblast and Bishkek, large groups of internal migrants looking for jobs and better living conditions, illegally seize private and municipal land around the city. According to National Statistical Committee, during 2000-2008, number of employed people in Bishkek metropolitan area increased by 110,000. After the 2005 Tulip Revolution in Kyrgyzstan, the processes of illegal land seizures activated ever more.

24. Immediately after the second Revolution of April 2010, another large wave of migrants intended to seize the land nearby Bishkek that developed into interethnic conflicts and mass unrest. Despite of the fact that the illegal invaders were finally extruded from the seized areas, the social roots of the phenomena were not removed and will obviously become apparent in future again. Political instability in the country casted away the economy of Kyrgyzstan and almost leveled last several years achievements in the economic and social development of the country.

25. As a result, a number of so-called new-built quarters appeared in the close vicinities of Bishkek, practically having made a ring around the city. The newly-built quarters are normally of four-five hundred square meters areas with small adobe houses on them. The people living there are extremely poor and have no basic living conditions, sewerage system or electric supply. Additionally, they are not provided with any social services: there are no any hospitals, kindergartens, schools, or any other educational settings in the close surroundings of such settlements.

26. Majority of such households live at occasional earnings at the city markets, housekeeping, and other sorts of unskilled labor. According to the EBRD’s social study (2009) in the surroundings of Bishkek market “Dordoi,” a lot of migrants illegally use electric power on the regular basis: on the one hand, they cannot legalize their settlements and hence, all the infrastructures for it; on the other hand, their poverty level makes electric and water supply payments not affordable.4

27. Seasonal migration is also significant in the migration flow structure. Part of migrants look for temporal employment in neighboring provinces, another part looks it in neighboring countries, like Russia and/or Kazakhstan (building and agricultural workers, traders etc.). Currently, in some cases internal seasonal migration reaches high levels, for example, in Batken Oblast, according to the latest data, about 23% of population regularly left for seasonal employment.

D. Poverty

28. The methodology of poverty level determination is based on objective measuring household expenditures in compliance with the World Bank’s Living Standard Measuring

4 Bishkek-Kant-Tokmok Gas Pipeline Rehabilitation Project (Kyrgyzstan). Social Impact Assessment Report. – EuropeAid/120642/C/SV/Milti. Sofreco-Renco-Elrus. 2009. 6 Surveys (LSMS). Cost of food basket and minimal set of nonfoods and services is taken as poverty line. The simplest index of poverty is percentage of poor population (poverty level in the country), whose average capita consumption is lower than poverty line. Level of extreme poverty is percentage of population, whose average capita consumption is lower than extreme poverty line. Extreme poverty level in 2004 comprised 13.4% for the Kyrgyzstan in average. In so doing, among the people in urban areas, the proportion of extreme poverty level comprised 13.4%, that of rural population it was 16.9%. As threshold value to assess poverty level, poverty line for 2004 was applied and index-linked with inflation level. Cost amount of general poverty line in 2005 was KGS 9,605 a year per capita, and that of poverty extreme line – KGS 6,115.5

29. According to the integrated investigation of household budgets, the poverty level in consumers’ expenditure reduced from 50% in 2003 up to 43% in 2005. Number of poor population in 2005 in comparison with previous year decreased by 3%. In so doing, if in 2003, each sixth citizen got into the poverty stricken category, in 2004 – each seventh one, in 2005 – almost each ninth citizen that testified on extreme poverty level significant reduction. In 2008, poverty level was 44, 4% that is 2,213,000 people, or 412 600 families.

Figure 2. Dynamic in Poverty Level (in percentage of total population)

50 40 30 Poor 20 Of them extremely poor 10 0 2003 2004 2005

Source: National Statistical Committee of the Kyrgyz Republic, 2007. Social Trends. 2007.

30. Poverty in the country is still mainly rural phenomenon: about three-quarters of all the poor population lives in rural areas. The below diagram demonstrates that in 2005, indexes of poverty and extreme poverty were uneven for all the provinces of Kyrgyzstan. The population of Batken Oblast (60%) was the most poor and a little less poor was population of Djalal-Abad and Osh Oblasts (56% each).6

Figure 3. Poverty Level and Extreme Poverty Level by Provinces (2005) 70 60 50 Poor 40 30 Of them extremely 20 poor 10 0

h KR IK DA NR BK s TL O Chui Bishkek Source: National Statistical Committee of the Kyrgyz Republic, 2007. Social Trends.

E. Education

5 National Statistical Committee of the Kyrgyz Republic. Social Trends of the Kyrgyz Republic. Bishkek. 2007. 6 Ibid. Accronyms used: KR – Kyrgyz Republic, DA –Djalal-Abad, IK-Issyl-Kul, NR – Naryn, BK – Batken, TL- Talas. 7

31. Kyrgyzstan inherited high level of literacy and well developed educational system from the Soviet Union. Free and universal education on all the levels (pre-school, school and University) was guaranteed by the Soviet legislation. Despite of the deep economic crisis immediately after the disintegration of the Soviet Union and following Independence, level of education in Kyrgyzstan for many years after that remained stable enough and estimated at 97%, or sometimes even 99%.7

32. Change in economic conditions in Kyrgyzstan, transition of the country to the market economy, inability of the state to maintain educational settings and ensure sufficient level of the teaching staff labor payment, - all these factors widely contributed into the developing educational system towards payable principles that still remains well-known, but unofficial introduction of many school administrations. It resulted in partial destruction of the infrastructure of the previous state educational system and deviation of the principle of universal free education, which was typical for the Soviet period and was one of the best achievements of that epoch. Given the low level in teachers’ salaries, when part of them left for other economy sectors, another part migrated to other countries, transition of schools into self-financing and payable system of education occurred. That fact permitted to raise teacher staff salaries and stop outflow of well-qualified personnel from a number of secondary educational settings.

33. In the course of time, amount of payments in many Bishkek schools reached sufficiently high levels, although they are still unofficial. System of multiple fees and payoffs (out-of- pocket payments, informal fees, entry and monthly fees) and commercialization of educational institutions at all the levels, gradually caused exclusion of children of low-income families into schools with lower technical facilities and level of teaching.

34. Last several years investigations revealed a lot of young people who had no attended any educational institutions and cannot either read or write. It’s the generation of children, who was born at the end of 80s – beginning of 90s, last century, whose school age fell on the period of the Soviet Union collapse and following drop in economic status and poverty. According to expert estimates, nowadays the educational level had decreased, and possibly reached the level of 80-85%. Given the economic and political conditions, the trend will be further developing towards worsening the situation in general literacy level.

35. At the same time, many educational institutions practically turn into business-structures, delivering educational services. In the conditions of state funding lack and general impoverishment of the population, repeated efforts of governmental structures, in particular, of the Ministry of Education, KR, to prohibit collecting unofficial payments, had no any positive outcome.

36. Especially strong drop in educational standards occurred in majority of rural schools. In rural, especially in remote areas of the country, schools suffer critical lack of teachers and financial support. One can feel that even in relatively well-to-do Chui valley.

37. Because of that, rural schools cannot ensure the stated educational standard. Many parents due to permanent school extortion and social stratification, send their children to educational centers under rural mosques (“madrasah”), where preferential attention is paid to religious education. Also it is necessary to note that sanitary conditions of such sort of educational settings often do not meet state requirements and existing standards. Besides, the madrasahs are not registered anywhere in state bodies. Besides, there is no any control over the educational process and content in such centers from the part of relevant state authorities.

7 According to the National Census 1999. 8 38. The mentioned social processes resulted in younth’s reducing general literacy level and rapid Islamization of the population. Also, the processes widen educational gap between city and rural population, and create additional factors for further social stratification.

39. Attending children to schools is a financial burden for poor families, especially those living in rural areas and new-built quarters around Bishkek: means of transportation cost calculated for even a single child (not to speak about several of them) is an overwhelming burden that comprise about KGS 320-350 (about US$7.7) a month. Additional expenditures for text-books, nutrition at school, and school uniform, contribute to the decision of poor families to stop educating their children. Instead, such children are involved into the works at bazaars (markets) as porters, carrying out dirty works, selling newspapers at the city roadsides, etc., ensuring therewith additional income generation for their families. Thus, the number of uneducated children permanently grows up.

40. Measures undertaken to erect new school buildings had not significant influence on the increasing number of students in them and improvement of educational conditions. For the period 2001-2005, for instance, the number of students, who dropped out their schools during an academic year, increased 1.5 times. According to National Statistical Committee, majority of the children (78%)8 are those who left for another educational setting. Also increase in the rate of dropping out schools is associated with high rates of internal and external migration. At the same time, school development rate in new-built quarters around Bishkek is not sufficient that heavily prevents children from attending secondary schools (see para. 25 above). This factor also additionally contributes into the poverty reinforcement and perpetuation.

41. Number of the Universities sharply increased in Kyrgyzstan after the Independence. Their number reached its peak in 1997 (54). It was dictated by the social policy to keep occupancy of the young people in the conditions, when there were no any more youth organizations capable to control over the young generation activities. Besides, it was an opportunity provided for the local professional stuff to establish and develop private Universities, including those based on joint funding from the part of foreign funding and domestic professorial staff.

Figure 4. Number of Technical Colleges and Universities in Kyrgyz Republic 100

60 Local technical colleges 40 Universities

0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: National Statistical Committee of the Kyrgyz Republic, 2009

42. However, with the course of time, excessive number of the Universities in Kyrgyzstan caused drop in value of University education and resulted in lowering teaching level requirements. Only several Universities (Kyrgyz National University, American University in Central Asia, Kyrgyz Russian Slavic University, Kyrgyz Medical Academy, Manas Kyrgyz- Turkish University) still have relatively high professorial and student staff requirements and continue training strong specialists in demand not only domestically, but also abroad.

8 National Statistical Committee. Social Trends. Bishkek. 2007. 9

43. It also negatively reflected in students’ motivation that in the conditions of low living standards and corruption at some Universities resulted in young people's formal staying in them with the only purpose: to gain a certificate (diploma) of graduation. Many of them are not interested in obtaining real high professional skills and/or knowledge. Young people, especially those from poor or relatively poor families, base on the short-term strategies of survival and often drop the Universities. They do not comprehend why they should spend/”waste” much money (as tuition fee) and time to be a student. Students often find that it is more reasonable to “buy” a diploma and start earning money as soon as possible. Despite of the fact that the value of the education to certain extent decreased, people anyway try to have University diplomas to find an employment or as a matter of prestige that still “works” since the Soviet period.

F. Health

44. Economic situation exerts negative impact on the health care system. If in 1997, the 10,000 population’s provision with medical staff was 31.5, in 2001 – 28.2, in the next 5 years the number was permanently coming down and in 2008 reached 25. The same about paramedical personnel: its number per 10,000 of population, decreased from 83.4 in 1997 till 55 in 2008. From the territorial point of view, the less provided with the medical personnel are South provinces: Batken (14.4), Djalal-Abad (13.8), and Osh (14.9) in 2008.9

III. GENDER

A. General

45. As of the beginning of 2005, women comprised 50.55% of the total population (2,574,491 female versus 2,518,468 male). The number of women exceeding the number of male is steady at around 56,200 persons. Female life expectancy is 71.4 compared to 63.9 for male (2007). Female and male literacy rates are both high at 99.1% and 99.5%, respectively, for population above 15 (2007).

B. Employment and Wage

46. Proportion of women among the economically active population characterizes behavior and opportunities of women at the labor market. Activity of men at the labor market, as a rule, is higher as against the women’s activity. This is caused by the fact that women can be on maternity leave, as well as due to the fact that women retire 5 years earlier than men. Before 1998, share of women in economically active part of the population remained stable (46.6%), and since 1999, it became decreasing, and in 2003, it comprised 44.1%. In the period of jobs deficiency at the labor market, women stay more frequently in the economic inactivity than men. In 2003, share of women in economically active population was maximal in Chu Oblast, comprising 45.7%, minimal – in Naryn Oblast (40.9%).10

47 Women are more vulnerable at the labor market. Women are more likely to agree for low pay jobs, while men seek high salaries. Moreover, since more women work in a shadow economy they have lower earnings and are more likely to lose jobs and be underpaid or unpaid (when quit or get fired).

48 Another important index that characterizes equality of men and women is ratio of women’s wages to the wages of men. Despite of the fact that total amount of women’s

9 http://www.stat.kg/rus/Home/analysis.html 10 CDF/PRSP/MDG: Statistical Development indicators for the Kyrgyz Republic and its regions. National Statistical Committee of the Kyrgyz Republic. Department of International Development UK. Special publication. Bishkek. 2005. 10 wages increased every year (1997-2003), ratio of wages of women to men’s wages decreased. The most approximate women’s wages to the men’s wages was in 1998, when it comprised 72.3% of men’s wages; in 2003, this index reduced up to 64.1%. First of all, that was connected with the fact that among the women, working at institutions and organizations, 58% are employed in education and health sectors, where salaries are not high, secondly, in all the types of activities, the share of men among the managerial staff is higher, among the junior service staff, the share of women prevails. Statistics of 2007 indicate that estimated female income at $1,428 is almost half of that of male income at $2,600 (PPP, 2007).

49 Thus, on the one hand, such patterns reflect the existing gender relations and generational hierarchies common for Kyrgyz families, especially in rural societies. On the other hand, by limiting choices available to women about their own and children’s lives, these patterns reinforce women’s dependence and, thus, create additional opportunities for perpetuating discrimination against women in families.

C. Effect of Migration

50 Migration is not a gender-neutral phenomenon. Women and men differ in migration behavior, opportunities, risks, and needs. Although migrating women’s earnings are an important part of a family budget, they tend to lose their professional capital due to working at low-paid unqualified jobs. Only 6% of migrants (5% of women) are able to receive free medical assistance. Women who migrate with children experience problems with housing and placement of their children into educational institutions. Only 13% of women were able to give a good education to their children. Women delay having children (giving birth) to later stages or completely refuse the option of becoming mothers.

51 In addition to all different effects on migrating men and women, migration can result in an increased vulnerability of women – wives of migrating husbands. Such influence includes, but is not limited to: decreased status of wives of migrants (when they stay with in- laws); increased workloads on women in families (especially for young women in multigenerational families); losing access to and control over family/economic resources and decision making; vulnerability of women and their children as a result of a lacking official marriage registration and increased probability of divorce; increased risks of contracting STDs or HIV from returning husbands; and increased vulnerability to violence practices.

52 Women, whose husbands left abroad, experience increased workloads. This is true especially in multi-generational families in which women, in addition to their productive role (a job) put on an increased load of reproductive duties, such as in childcare, housework, caring for elder and sick, preparing firewood, and maintenance of the house and other premises. According to the respondents, a part of this load is on these women’s grown-up children.

IV. PROJECT IMPACT

A. Poverty and Energy

53 Economic situation and poverty reduction in Kyrgyzstan was worsened by energy crisis of 2008-2009, and 2009-2010. Among the reasons responsible for the economic crisis local experts consider out-dated equipment, growing energy consumption, low-water period, as well as water and power issue that were not properly adjusted at the inter-governmental level, and electric power theft. Civil society organizations and independent expert community of the Kyrgyz Republic also indicated wide-scale corruption in energy sector and short- sighted policy of the Governmental structures and specific high-level officials.

11 54 Especially hard in terms of the social situation was winter period, when rolling blackouts (power cuts) made it impossible heating in dwelling houses, schools, hospitals and kindergartens. Many industrial enterprises were temporarily laid down. Lost profits in large business, and small and medium enterprises amounted to millions US dollars. A number of investors left the country. Losses due to the energy crisis affected the country’s economy and significantly aggravated GDP level. That negatively impacted the general socioeconomic status of the population and made poverty in Kyrgyzstan deeper.

55 Additional burden on the population became rise in electric supply and heating prices, introduced at the beginning of 2010. That occurred at the background of abuse of power and bad management in the energy generation and transmission sector. The bad mangement in the secor caused serious worsening in energy power generation and supply system operation, and on the other hand, created strong political tools in Central Asisn regional water sharing and energy supply for Uzbekistan and Kazakhstan.

56 According to the brief analysis by the Project consultant Dj. Omorov,11 majority of the population were not satisfied with the rise in prices for electricity and heating services. Many respondents supposed that the reason of such practices can be explained from the viewpoint that "corrupt beurocrates want to make profit at the expense of common citizens" (31%). At the same time, they noted that the reason of such situation was "bad, incompetent management in the sector" (12%), and necessity in “repairing aged, depreciated eqipment” (7%).

57 Absolute majority of respondents (82.4%) were forced to economize their monthly incomes and other available revenues. Of them, 28.6% spend less for the food stuff than in previous period, 16.5% - for electricity, 15% - for clothes. In so doing, 22.2% of all the respondents started economizing on all household budget lines. More than 11% of the respondents could not, in any event, pay their bills: of them 57.6% - for electric supply, 24.2% - for communal public services, 15.2% - for heating services, 3% - for municipal housing fees. Many of the respondents articulated that if the economic situation would not become better, they would emigrate from Kyrgyzstan.12

B. Project Impact to the Society

58 Impact of the Project on the social situation in Kyrgyzstan can be considered as positive. Electricity made available through Project's loss reduction will be directed to service the load of domestic consumers as well as exported to neighboring countries. This will improve the financial sustainability of the power companies, which in turn enables them to invest in rehabilitation and replacement of the archaic transmission system inherited from the Soviet era. The development of the AMDA, therefore, contributes to enhanced stability of power supply to the general population.

59 The everyday living conditions of population will be improved, especially those in rural areas, where poverty level is higher, and where power supply is cut off first in times of power shortage.

60 Better environment for business development will be created (shops and productions) by stable supply of power, and hence, economic development of the country. If industries and other medium- and large-sized enterprises are put back into operation, level of unemployment is expected to reduce.

11 Note by Djanybek Omorov, consultant of the Project. Bishkek. 2010. 12 Note by Djanybek Omorov, consultant of the Project. Bishkek. 2010. 12 61 Situation in social services including hospitals, kindergartens, schools and other public places, where electric supply was cut on the regular basis and comprised only 2-3 hours a day, will be improved.

62 Risks for the electrically operating equipment (pumps, industrial refrigerators, etc.), including consumer equipment (home refrigerators, for instance) and associated with them financial and material losses for local communities will be significantly reduced.

63 For the women, the Project will be of positive effect as it will allow using home electric appliances. Burden of their housekeeping will be reduced. That will also contribute into the improvement of the living conditions for the rest of the family members including children.

Annex B: RECORD OF CONSULTATION

I. Consultation with Regional NEGK Offices

“Bystrovka” substation, Chui Oblast’ NEGK branch (220/110/35 kW): 1. Ibragimov, E. Head of the Substation 2. Kiyashenko, N. Technician 3. Kiyashenko A. Engineer 4. Shteyer, A. Electrician 5. Birulin V., Chief Engineer 6. Bondarenko, A. Electrician 7. Djumakanov, A. Electrician 8. Bayzakov, Sh. Mechanician 9. Abykeyev, Ch. Mechanician 10. Cholponkulov A., Mechanician 11. Sultanaliev K., Mechanician 12. Zavgorodny N., Operator of compressor unit 13. Atambekov N., Gas-arc welder 14. Imanalieva U., production facilities cleaner

24/02/2010 NEGK Osh branch 1. Biyaliev Nurlan, Head of NEGK Osh branch 2. Abdymamat Duisheev, Head of Electric Technical Laboratory 3. Marat Raimaliev, Deputy Head NEGK Osh branch in charge of capital building 4. Vladimir Kizimenko, Chief Engineer 5. Galina Shinkarenko, Engineer on intersystem power interchanges and balance integration

25/02/2010 NEGK Djalal-Abad branch 1. Abdulla-Murza Tursunbaev, Head of Branch 2. Asylbek Mashrapov, Chief Engineer 3. Maturaim Cholponkulov, Chief Metrologist 4. Zamir Adjymatov, Head of “Oktyabrskaya” substation 5. Satyvaldy Ismailov, substation duty officer 6. Abdykarim Kudaiberdiev, substation duty officer 7. Asylbek Sadykov, Head of the Djalal-Abad substation 8. Faizulla Saidmunavarov, Inspector of Dispatch Unit

19/02/2010 NEGK Chui Branch 1. Marat Sulaymanov, substation Shabdan duty officer 2. Erkin Ibragimov, Head of “Bystrovka” substation

15/03/2010 1. Tunukbek Djumaev, Deputy Chief Metrological Department, NEGK 2. Alexander Petrovich, Head of Production and Design Engineering Bureau

10/03/2010 1. Shapar, Head of Production and Technical Department 2. Irina Vichkanova, Production and Technical Department officer, responsible for environmental issues in NEGK 3. Rustam Raimkulov, Head of Unit 2 II. Public Consultations

I. Moscow District, Belovodskoe urban-type community 07\07\2010

12 persons attended the meeting. All are heads of Ayil Okmotu (AOs) of the District.

1. Alexander Ivanovich Kononov, Belovoskoe AO 2. Iskhar Bumezovich Saliza, Alexandrovka AO 3. Nurlan Soltongedievich Balbakov, Predtechenka AO 4. Chynybek Supataev, Ak-Suu AO 5. Sologon Mursaliev, Tselinny AO 6. Elena Nikolaevna Biriultseva, Pervomay AO 7. Ruslan Murzobekov, Tolok AO 8. Ramis Ramazanovich Ibraimov, GosRegistr 9. Berdaly Almazbekovich Nadyrbekov, Akim (Head of the District State Administration) 10. Elina Vasilievna Serdiukova, First Deputy Akim 11. Saruubek tynychbekovich Kushchubaev, Deputy Akim 12. Azamat Sultanovich Keldibekov, Akim’s Assisstant

During the meeting, there were a lot of questions asked and opinions expressed. The main point was that people positively apprehend the information and support prospective changes in energy sector associated with Project activities and plans. The heads of AOs were very active and displayed enormous interest to many sides of the Project.

1. Pastures' rehabilitation process: how it will be made and paid? When construction works done, the pasture land becomes unusable during next several years because of the compression, structural disturbances, and pollution by fuel leakages. If the Project pays for one year, who is responsible if the land is not useable during several years? It is important that the fertile soil layer would be removed and keeping separately during the works of the Project. 2. What was the depth of the horizontal drilling while underground cable laying? 3. To carry out the Project works it is necessary to sign a contract with each owner of the land on the territory of which the works will be implemented. 4. We will need large scale maps to speak with each village dweller personally concerning the Project impact and other related things. 5. Some malcontents will appear during the project implementation period. Everything will be complicated and the Project will have a lot of problems. 6. To provide better implementation of the Project works it is necessary to select one separate AO as experimental site for the Project and tryout all the steps there. 7. We have no any good maps where we could see all the communications located in our populated area vicinities. Therefore, during the works, some of communications can be accidentally damaged or broken. 8. It is necessary to think about protective measures for the new communication system, as now there are a lot of thefts take place and the system can be damaged and even stolen. 3

II. Alamudun District, Administrative Center – Lebedinovka village, 08\07\2010

12 persons attended the meeting. All are heads of Ayil Okmotu (AOs) of the District.

1. Naizabek Asanbekovich Kolbaev, Alamudun AO head 2. Altynbek Djetykanovich Abaskanov, Arashan AO head 3. Teitbek Jumakadyrovich Aliev, Ala-Archa AO head 4. Belek Ilichbekovich Sakiev, Ak-Debe AO 5. Saltanat Juzumovna Jumasheva, Baitik AO head 6. Tynchtyk Asankulovich Ybykeev, Vasilevka AO head 7. Syrgak Bilyalovich Kydykeev, Grozd AO head 8. S`ezdbek Cagynalievich Arpachiev, Kok-Jar AO head 9. Kaiyrkul Sardarbekovna Bekova, Lenin AO head 10. Berdibek Aibekovich Chyntemirov, Lebedinovka AO head 11. Azismamet Toktogulovich Seitaliev, Mayevka AO head 12. Nurjan Shailoobekovich Shaloobekov, Nizhyaya Ala-Archa AO head

The participants of the meeting supported prospective Project activities and discussed possible issues that can arise during the Project activities, asked questions and expressed concerns:

1. Will the new communication system take the current strength and power into account? If this would be possible it would assist in removing a number of lawsuits arising after base current changes and next overheating the technical equipment. In all the cases, NEGK turns to be “right” and gains a suit at law that is in our opinion, not correct and fair. NEGK is fully responsible for such cases. 2. Dilapidated houses can be broken being affected by vibration of the drilling equipment. Will NEGK or ADB compensate that and buy new/another house? 3. Existing communication can be damaged during project activities. Possibly it is necessary to coordinate construction activities/ stringing wires /underground laying of communication system – with other relevant agencies. 4. It is desirable to use seasonal approach in implementation of the project activities. After June 30 all the agricultural fields are free of harvest/crops. So, it is possible to use period after that for project activities. 5. Possibly, there will be disturbance of the soil composition during works. What can be done to avoid that?

4 III. Sokuluk District, Administrative Center – Sokuluk town, 08\07\2010

40 persons attended the meeting. All are heads of Ayil Okmotu (AOs) of the District. Additional number of handouts with description of the Project will be distributed among the village heads of the district via state administration of the district.

1. Kabylbek Beshimbaev, At-Bashy AO head 2. Boronbai Monokonov, Asylbash AO head 3. Irina Kuzyakina, Voyenno-Antonovka AO head 4. Abas Usenov, Gavrilovka AO head 5. Nikolai Sarogly, Djany-Djer AO head 6. Djoldosh-aly Musurmankulov, Djany-Pakhta AO head 7. Edik Sartbaev, Kainazarov’s AO head 8. Marlis Kubatov, Kamyshanovka AO head 9. Erkebek Shabraliev, N.Krupskaya’s AO head 10. Emil Sardarbekov, Kyn-Tui AO head 11. Stalbek Musaev, Kyzyl-Tuu AO head 12. Manas Akmatov, Novo-Pavlovka AO head 13. Ramazan Basarov, Nizhne-Chui AO head 14. K. Duishenaliev, Orok AO head 15. Doktorbek Kartalov, Pervomai AO head 16. Kubanychbek Djumashliev, Saz AO head 17. Djumabek Djekishev, Sokuluk AO head 18. Kendjebek Degembaev, Tosh-Bulak AO head 19. Almazbek Sydykov, Frunze AO head 20. Suleiman Umuraliev, Shopokov’s town council 21. Kubatbek Omurbekov, RES (district electric company) representative 22. Kazbek Kubatov, Head of Gosregistr district branch

And 18 representatives of Jait (pasture) committees of the district (no names were provided)

Questions and discussions:

1. The participants of the meeting noted that detailed schematic map would be helpful for the local people when works are started: it will help them to define the specific plots under impact of the Project. 2. The Project works can be distributed according to seasonal approach: it will help them to minimize the damage to the agricultural lands and harvest. 3. It would be useful if at the description of the Project, information about amount of ADB loan will be included.

5 IV. Chui District, Administrative Center – Chui village, 09\07\2010

7 persons attended the meeting: 1. M.Tologonov, Sailyk AO head 2. A. Djukeshov, Burana AO head 3. A. Suyunbaev, Shamshy AO head 4. M. Askeyev, Kosh-Korgon AO head 5. A. Zakirov, Ak-Beshim AO head 6. Dj. Turgunaliev, On-Bir Jylga AO head 7. T. Sabyrov, Ibraimov’s AO head

The following questions were asked and suggestions made by the attendees of the meeting:

1. If a governmental Decree on the Project is issued, will it be bring it to district/AO’s administration notice? 2. If a house undergoes fracturing resulting from the drilling works, the dwellers can demand to construct/buy another/new house. Will it be possible for the Project/ADB to pay? 3. If the Project wants to inform the local community about the Project, you can publish an article at the local/district newspaper, and then, everybody will learn about that! 4. In general we support this Project and believe it will be useful for the country. 6

V. Kemin District, Administrative Center – Kemin village, 12\07\2010

45 persons attended the meeting with the First Deputy Akim of the District, under whose supervision the meeting was held.

1. Bekjan Asanov, Kemin district state administration head 2. Erkin Djumagaziev, Chair of the District Council 3. Sabyr Abdylasov, First Deputy Head of district state administration 4. Saadat Sarmanova, Deputy Head of district state administration 5. Jumgalbek Duishebaev, District state administration head of Apparat 6. Sainagul Esenalieva, Chief of OrgDepartment 7. Elena Imankulova, Chief of Department for Family and Children issues 8. Galina Obodova, Chief of Department on Social policy issues 9. Jumagul Urdoletova, Chief of Sector on Economy and Industry 10. Nasiyat Bakayeva, Chief specialist on family and children issues 11. Nazgul Mambetalieva, Chief specialist of social policy sector 12. Erkinbek Baizakov, Chief specialist of economy and industry sector 13. Irina Bondarenko, Leading specialist of OrgDeparment 14. Kydyrbek Kopdjasharov, Kemin AO head 15. Kanat Akmatov, Orlovka AO head 16. Tashtanbek Ibraimov, Jany-Alysh AO head 17. Temirlan Mambetaliev, acting Il’ich AO head 18. Samat Zaripov, Duisheev’s AO head 19. Ulan kalybekov, Almaly AO head 20. Ernis Abdyldaev, Boroldoi AO head 21. Kylychbek Mambetaliev, acting Kyrzyl Oktyabr AO head 22. Kalybek Murcadairov, Head of Agricultural Development Division 23. Adylbek Abdyldaev, Head of State Inspectorate for Seeds (GosSemInspektsiya) 24. Asylbek Abdybachaev, Head of District Department of Water Industry 25. Kalysbek Osmonov, Head of Veterinary Station 26. Rysbek Abdrakhmanov, Head of GosRegistr 27. Tynybek Supataev, Head of District Department for state statistics 28. Elena Djaparova, Chief of District branch of Committee on Migration and Employment of the population 29. Jekshenkul Bakirov, Head of District Committee on Physical Training and Sports 30. Esengul Chopiev, “Emgek Jarchysy” Newspaper Editor-in-Chief 31. Jumakadyr Sopiev, Chief Doctor of Kemin Territorial Hospital 32. Sabira Kurmanalieva, Director of Center of Family Medicine 33. Kubanychbek Muradilov, Chief of Unit for Culture issues 34. Kurmanbek Toktonaliev, Chief of District Department of Education 35. Melis Aliev, Chief Doctor of District Center for State Sanitary and Epidemiological Inspectorate 36. Asan Toktonaliev, Head of Kemin District Department of State Committee for Taxation 37. Janybek Orozaliev, Head of Social Fund of the District 38. Natalia Sinitsyna, Head of District Branch of Kyrgyz Mail Service 39. Mukan Makeyev, Chief of District Financial Unit 40. Jamila Imanalieva, Chief of District Unit for Treasury 41. Bakyt Sydykov, Head of Unit for Emergencies 42. Kazbek Shyrdakbaev, Head of District NEGK branch 43. Janybek Kaimoldoev, Head of District branch of Telecom 44. tynrchbek Turdaliev, Head of DEP-32 (Road Operation Department-32) 45. Gamzat Sagymbekov, military commissar of the District 7

During the meeting, local people expressed their support to the forthcoming initiative of the ADB and Government to establish new communication system and new modern meters at the substations. Although, at the very beginning of the meeting people thought that the new meters would be installed in their houses and/or at the electric towers. The Consultant clarified that the new meters would not have any relation to the local population houses. The RES/District NEGK branch representative explained to the audience that if “we would know how much of power we have transmitted and how much has been received”, it will make the situation clear and transparent in this sector of national economy. Another issue: theft of power energy should not be written off at the expense of the common people, i.e. the local population should not be financially responsible for the theft of energy by the distribution companies, people said. The new equipment that will be installed will help us to see the real situation. Therefore the initiative of the Government and the ADB Project has to be supported. The attendees asked about cost of one km of optic fiber and amount of the loan. At the very end of the meeting, the participants expressed their desire to see a power engineer and economist (those either of NEGK’s or Project’s) at the meeting next time to have an opportunity to ask about more specific/purely engineering things and economics of the Project, which the Environmental and Social specialist could not explain deeply enough.