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Financial Intermediary: Environmental and Social Management System Environmental and Social Management System Arrangement Environmental and Social Safeguards Framework July 2013 India: Accelerating Infrastructure Investment Facility in India Prepared by the India Infrastructure Finance Company Limited for the Asian Development Bank. This environmental and social safeguards framework 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. India Infrastructure Financing Company Limited (IIFCL) ENVIRONMENTAL AND SOCIAL SAFEGUARDS FRAMEWORK (Updated in July 2013) New Delhi India CONTENTS Page ABBREVIATIONS I. INTRODUCTION 1 II. ENVIRONMENTAL AND SOCIAL SAFEGUARD POLICY 2 III. ENVIRONMENTAL AND SOCIAL SAFEGUARD FRAMEWORK 3 A. Environmental Safeguard Framework 4 B. Social Safeguard Framework 16 IV. INSTITUTIONAL/ORGANIZATIONAL STRUCTURE OF INDIA INFRASTRUCTURE FINANCE COMPANY LIMITED 22 A. Periodic Safeguard Audit and its Disclosure 25 B. Reporting to Development Financial Institutions 26 C. Mainstreaming ESSF in Project Processing 27 D. Allocation of Responsibilities for Safeguard Compliance 28 E. Capacity Development for Safeguard Compliance 29 F. Responsibilities in Safeguard Compliance 30 G. Environment and Social Safeguard Framework Update 30 ANNEXES 1. E-1 to E-21 (Annexes pertaining to Environmental Safeguard Framework) 2. S-1 to S-13 (Annexes pertaining to Social Safeguard Framework) 3. G-1 to G-4 (List of General Annexes) ABBREVIATIONS ADB - Asian Development Bank CMD - Chairman and Managing Director COD - Commercial Operation Date CPCB - Central Pollution Control Board CRZ - Costal Regulation Zone DFIs - Development Financial Institutions EA - Environmental Assessment EC - Environmental Clearance ED - Executive Director EDP - Environmental Due Diligence Procedures EIA - Environmental Impact Assessment EMP - Environment Management Plan ESSF - Environment and Social Safeguard Framework ESF - Environmental Safeguards Framework E&S - Environmental and Social ESP - Environment and Social Policy ESS - Environment Safeguards Systems ESMU - Environment and Social Safeguards Management Unit FI - Financial Intermediary GC - General Conditions GOI - Government of India HUDCO - Housing and Urban Development Corporation Limited IDFC - Infrastructure Development Finance Company Limited IIFCL - India Infrastructure Finance Company Limited IL&FS - Infrastructure Leasing & Financial Services Limited IR - Involuntary Resettlement IPDP - Indigenous People’s Development Plan IP - Indigenous People JBIC - Japan Bank for International Cooperation KfW - Kreditstalt für Wiederaufbau MOEF - Ministry of Environment and Forest MOU - Memorandum of Understanding NGO - Nongovernment Organizations NRRP - National Rehabilitation and Resettlement Policy OM - Operational Manual O&M - Operation & Maintenance PAP - Project-affected person PC - Project Cycle PCB - Pollution Control Board PIAL - Prohibited Investment Activities List PFR - Periodic Finance Requests PLC - Project Life Cycle PIM - Project Information Memorandum PMC - Project Management Consultants PPP - Public Private Participation RAP - Resettlement Action Plan RP - Resettlement Plan R&R - Resettlement and Rehabilitation SEIAA - State/Union Territory Environmental Impact Assessment Agency SIA - Social Impact Assessment SPCB - State Pollution Control Board SSDP - Social Safeguard Due Diligence Procedures SSF - Social Safeguard Framework SSLO - Social Safeguards Liaison Officer SIFTI - Scheme for Infrastructure Financing through IIFCL SPV - Special Purpose Vehicle TDP - Tribal Development Plan TOR - Terms of Reference WB - The World Bank I. INTRODUCTION 1. The India Infrastructure Financing Company Limited (IIFCL) was incorporated on 5 January 2006, under the Companies Act 1956, as a fully government-owned company. The IIFCL is an apex financial intermediary for developing and financing commercially viable infrastructure projects and facilities in India through the following modalities: (i) long-term debt, (ii) refinance to banks and public financial institutions for loans granted by them, (iii) take-out financing, (iv) subordinate debt, (v) credit enhancement (on pilot basis), and (vi) any other mode approved by the Ministry of Finance from time to time. 2. Projects in the following sectors are eligible for IIFCL’s financing: Table 1: Sectors Eligible for IIFCL Financing Sr. No. Sector Subsector 1. Transport Roads and bridges Ports Inland waterways Airport Railway tracks, tunnels, viaducts, bridgesa Urban public transport (except rolling stock in case of urban road transport) 2. Energy Electricity generation Electricity transmission Electricity distribution Oil pipelines Oil/gas/liquefied natural sas (LNG) storage facilityb Gas pipelinesc 3. Water sanitation Solid waste management Water supply pipelines Water treatment plants Sewage collection, treatment and disposal system Irrigation (dams, channels, embankments etc.) Storm water drainage system 4. Communication Telecommunication (fixed network)d Telecommunication towers 5. Social and commercial Education institutions (capital stock) infrastructure Hospitals (capital stock)e Three-star or higher category classified hotels located outside cities with population of more than one million Common infrastructure for industrial parks, SEZ, tourism facilities and agriculture markets Fertilizer (Capital investment) Post-harvest storage infrastructure including cold storage for agricultural and horticultural products Terminal markets Soil-testing laboratories 2 Sr. No. Sector Subsector f Cold chain a includes supporting terminal b includes strategic storage of crude oil c includes city gas distribution network d includes optic fibre/cable networks which provide broadband / internet e includes medical colleges, paramedical training institutes and diagnostics centres f includes cold room facility for farm-level pre-cooling for preservation or storage of agricultural and allied products, marine products, and meat. 3. The above list of sectors will be kept in line with the clause 5.2 (c) in Scheme for Infrastructure Financing through IIFCL (SIFTI) and its subsequent modifications, if any. 4. In order to be eligible for funding under the “Scheme for Financing Viable Infrastructure Projects through the India Infrastructure Finance Company Limited” (the Scheme), a project should meet the following criteria: (i) The project will be implemented (i.e., developed, financed, and operated for the project term) by (a) a public sector company (b) a private sector company selected under a private-public partnership (PPP) initiative (c) a private sector company (ii) Provided that the Special Purpose Vehicle (SPV) will assign overriding priority to PPP projects that are implemented by private sector companies, selected through a competitive bidding process. (iii) Provided further that a private sector company, other than that defined in the first provision above, would not be eligible for direct lending by SPV and may be funded only through the refinance mode. (iv) The total lending for such private projects shall not exceed 20% of the lending program of SPV in any accounting year. The eligibility for direct lending and/or raising the limit of 20% will be reviewed at the end of one year based on the progress in funding public sector and PPP infrastructure projects. II. ENVIRONMENTAL AND SOCIAL SAFEGUARD POLICY 5. The IIFCL finances medium to large-scale infrastructure projects. They could generate adverse environmental and social impacts. As an environmentally informed and socially responsible financial institution, IIFCL is committed to avoid or mitigate adverse environmental and social impacts, if any, of the projects in its portfolio. For this purpose, IIFCL has an Environmental and Social Safeguard Policy (ESSP) and procedural framework to implement it. 6. The ESSP takes note of environmental and social safeguard requirements of its financial partners and lenders including multilateral and bilateral development financial institutions (DFIs). 7. The ESSP is guided by IIFCL’s commitment to integrate environmental protection and social development into its mandate in a proactive manner in order to contribute towards sustainable development. To achieve a balance between developmental imperatives, and environmental sustainability and social well-being in its operations, IIFCL: (i) gives due importance to environmental and social (E&S) considerations in 3 appraising and financing infrastructure projects in order to avoid, minimize, and mitigate environmental and social adverse impacts and risks, if any; and (ii) is committed to comply with all relevant environmental and social policies, laws, and regulations of the Government of India (GOI) and states of India, and also remains responsive to E&S safeguard policy requirements of DFIs wherever DFI’s Line of credit is involved. 8. The ESSP of IIFCL emphasizes its sensitivity to environmental and social safeguard issues of project that it finances, commitment to comply with its own environmental and social safeguard policy, and its responsiveness to environmental and social safeguard policy requirements of DFIs. The ESSP is implemented as per the procedures outlined in the Environmental and Social Safeguard Framework (ESSF) of IIFCL. 9. The ESSF provides an enabling mechanism to IIFCL to meet environmental and social safeguard requirements associated with projects that it finances. It defines roles, responsibilities, and provides procedures to avoid, minimize, and mitigate
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