Safeguards Due Diligence Report

October 2016

KGZ: Power Sector Improvement Project

Prepared by OJSC National Electric Grid of for the Kyrgyz Republic and the Asian Development Bank. This Safeguards Due Diligence Report 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. Your attention is directed to the “terms of use” section of this website.

In Preparing any country program or strategy, financing any project or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

I. INTRODUCTION 4 A. Background and Project Description 4 B. Location of Frunzenskaya-Kara Balta 2 OHL 5 C. Need for Due Diligence Report 6

II. DETAILED MESAUREMENT SURVEY 6

III. SOCIO-ECONOMIC BASELINE CONDITIONS 8

IV. CONSULTATION AND INFORMATION DISLOSURE 9

V. GRIEVANCE REDRESS MECHANISM 10

VI. INSTITUTIONAL ARRANGEMENTS 10

VII. MONITORING 11 List of Annexes ANNEX 1: DMS results for Frunzenskaya - Kara Balta 2 OHL ANNEX 2: List of specialists visited project areas for DMS on Frunzenskaya - Kara Balta 2 OHL ANNEX 3: Decrees on establishment of LAR Commissions ANNEX 4: Photo of working places and access roads for visual identification on Frunzenskaya - Kara Balta 2 OHL ANNEX 5: Confirmations from Local Authorities and land users concerning No LAR impact ANNEX 6: Decisions on Establishment of Grievance Redress Mechanism List of Tables Table II. 1 Information about work spaces in arable land and land users on Frunzenskaya – Kara Balta 2 OHL

Table III.1 Profiles of Ayil Aimaks Table IV.1 The list of consulted persons during DDR preparation Table VI.1. Responsibility of involved agencies/parties List of Figures Figure 1: Location of OPGW Figure 2: Example of Existing OHL Route

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Abbreviations ADB Asian Development Bank AMDA Automated metering and data acquisition system AA Ayil Aimak (Administrative-territorial unit, within which the community carries out local self-government) DP Displaced person DDR Due Diligence Report GRG Grievance Redress Group LAR Land Acquisition and Resettlement LA Local Authority NEGK JSC “National Electric Grid of Kyrgyzstan” OPGW Optical ground wires OHL High-voltage power lines Project Power Sector Improvement Project SCADA Supervisory control and data acquisition system Turnkey Contractor Branch “Ak-Ay Elektric Dis. Ticaret Koll STI” in Kyrgyz Republic

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I. INTRODUCTION

A. Background and Project Description 1. The Kyrgyz Republic, Government of the Kyrgyz Republic has received a loan from the Asian Development Bank (ADB) to implement the Power Sector Improvement Project (the Project). JSC “National Electric Grid of Kyrgyzstan” (NEGK) is the executing agency (EA). Total project cost is estimated at $56.0 million of which ADB will finance $44.8 million from its resources. The Project commencement date is 08.12.2010 and completion date is 12.12.2017.

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

3. Project's physical outputs are: (i) Automated Metering and Data Acquisition System (AMDA) will bring transparency to wholesale electricity transaction between the unbundled power companies1 as well as in regional power trade. AMDA will eliminate errors and rampant metering data manipulation, untraceable using the current archaic technology. Commercial loss is estimated at 40%. Loss reduction will make more power available domestically and improve the financial performance of the power companies. Accurate power flow data is indispensable to improve commercial performance. The system also supports regional power trade through (i) meeting the CAPS metering accuracy requirement, and (ii) eliminating unauthorized exports. (ii) Substation Rehabilitation. This will improve reliability of system by replacing dilapidated circuit-breakers and instrument transformers that have reached their economic lives, are technologically obsolete, or do not meet the accuracy requirement for regional power trade. Since the Kyrgyz system is intricately interconnected with the CAPS, rehabilitation increases reliability of the regional system and underpins regional power trade. (iii) Communications and Supervisory Control and Data Acquisition (SCADA).This will link seven major substations and the control centers via optical fiber. This enables the system operator to make efficient dispatching based on real-time data. SCADA will reduce technical losses through avoidance of overloading, and enable faster detection and restoration of faults. The system improves overall efficiency and reliability of the system and CAPS. 4. Equipment installation for establishing AMDA and rehabilitating the substations are implemented inside the premises of existing substations, and therefore do not entail any land acquisition and resettlement (LAR). 5. The development of the modern communication system for the SCADA involves (i) stringing of optical ground wires (OPGW) on existing transmission lines, and (ii) laying of underground optical fiber cables. The modern communication system will focus only in the north of the country in Chuy (region). The estimated length of OPGW is 520,3 km and underground cable is 50 km.

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Figure 1. Location of OPGW

6. According to Land Acquisition and Resettlement Framework developed in July 2010 LAR impacts are not expected from the installation of underground fiber cables, since they will be laid beneath public roads. 7. OPGW is strung over existing transmission towers on existing transmission lines which are located mostly on agricultural land or barren land. Hydraulic conductor stringing -puller are used for stringing the OPGW. This activity requires work space and access road. Since the transmission towers already exist, permanent land acquisition and resettlement are not expected. B. Location of Frunzenskaya-Kara Balta 2 OHL 8. There are 9 high-voltage power lines (OHL) in Chuy region within the Project. Decision on preparation of LARP for each of 9 OHL was taken after discussions with NEGK, Turnkey contractor and ADB. Third line for stringing of OPGW was defined by NEGK as Frunzenskaya- Kara Balta 2 OHL. This line with 54,5 km length is situated in Moscow, Jayil and Panfilov districts of Chuy region. Figure 2. Example of Existing OHL Route

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9. There are 16 work spaces and 9 towers without sky wires on Frunzensakaya-Kara Balta 2 OHL according to detailed design for stringing OPGW. C. Need for Due Diligence Report 10. The Contractor conducted Detailed Measurement Survey (DMS) of Frunzenskaya – Kara- Balta 2 OHL, which revealed that there will be no land acquisition and resettlement impacts, including impact on crops. All work spaces, also the land plots under and near the towers are currently free of any crops and will not be used by land users/owners in October - November 2016. This situation was confirmed by local authorities as well as land users/owners. 11. To fit the requirements of the ADB Safeguard Policy Statement (2009), NEGK with turnkey contractor has prepared this Due Diligence Report (DDR) for Frunzensakaya-Kara Balta 2 OHL.

II. DETAILED MESAUREMENT SURVEY

12. According to the DMS results 2 (from 16) work spaces and the strip of land under 9 (from 9) towers without sky wires were situated on arable land, but crops were already harvested (Annex1). List of specialists visited project areas for DMS. (Annex 2). 13. For the purpose of DMS field visits were carried by evaluator and land surveyors of Local Authority (LA) between 12 August, 2016 and 10 September, 2016. Also during this period the meetings with actual land owners/users were held. 14. To define LAR impact members of LAR commissions at LA level were involved. LAR commission was established in each district according to decisions of Moscow (dated March 16, 2016, Reg.No 53-p), Jayil (dated 16 March, 2016 Reg.No 63-p) and Panfilov (dated 16 March, 2016 Reg.No 42-p) districts’ state administrations. The commissions consist of the representatives of District state administration, Local registration office, Department on agrarian development, Department on construction and architecture and LA (Annex 3). 15. Turnkey contractor conducted DMS on Frunzensakaya-Kara Balta 2 OHL. This work included: (i) Define impact zones together with turnkey contractor’s Engineer: • work space around the tower and access road to the tower; • strip of land under line between the towers without sky wires. (ii) Visit impact zones together with representatives of LA and land users. (iii) Confirmation of land users by LA.

16. Table II.1 provides information about work spaces in arable land and land owners/users on Frunzenskaya - Kara-Balta 2 OHL.

Table II. 1 Information about work spaces in arable land and land owners/users on Frunzenskaya – Kara Balta 2 OHL

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Work spaces Name of land № Local (number of towers) owner/user District Authority

1 2 3 4 5

1 Т68 D. Omuraliev Panfilov Frunze

2 Т69 Frunze LA Panfilov Frunze

3 Т219 Taldy-Bulak LA Jayil Taldy-Bulak

4 Т219-220 A. Osmonov Jayil Taldy-Bulak

5 Т219-220 R. Omurkulov Jayil Taldy-Bulak

6 Т219-220 A. Imankulov Jayil Taldy-Bulak

K. Omurkulov 7 Т219-220 Jayil Taldy-Bulak

8 Т219-220 M. Kaldybaev Jayil Taldy-Bulak

S. Narynbaev 9 Т221-225 Jayil Taldy-Bulak

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Work spaces Name of land № Local (number of towers) owner/user District Authority

1 2 3 4 5

10 Т221-225 B. Isaev Jayil Taldy-Bulak

B. Raimkulov 11 Т221-225 Jayil Taldy-Bulak

12 Т232 K. Moldokulov Jayil Taldy-Bulak

Petrovskiy LA 13 Т256 E. Shitogubova Moscow Petrovskiy (tenant)

17. According to the results of the survey, in these work spaces the crop was already harvested. Photo of work places with access roads for the visual identification are attached (Annex 4).

18. Upon harvesting all crops in August and September, the land will not be used in October – November 2016. Confirmations from local authorities and land owners/users are attached (Annex 5), where all land users except Osmonov Azamat confirmed in writing that they do not plan to use land in 2016. Osmonov Azamat orally confirmed that he will not be using land in 2016 as all crops were harvested but refused to provide any written confirmation due to his debt to local authorities for land taxes.

III. SOCIO - ECONOMIC BASELINE CONDITIONS 19. LAR impacts associated with stringing of OPGW are limited to the areas of Chuy region is located in northern Kyrgyz Republic. Chuy Region is one of the largest agricultural regions of the country. Chuy Oblast represents only 10% of the country’s land area, but it accounts for one-third of all the arable and irrigated lands of the country. 81,600 people are employed in agriculture, it is 21,9% of total employed population. 20. The territory of the region is divided into 8 administrative districts: Alamedin, Ysyk-Ata, Chuy, Kemin, , Moscow, Jayil and Panfilov. Frunzensakaya-Kara Balta 2 OHL is situated in Moscow, Jayil and Panfilov districts. There are 3 Ayil Aimaks (AA) with work spaces in arable land along this line: 1. Petrovskiy AA, Moscow district 2. Taldy-Bulak AA, Jayil district 8/11

3. Frunze AA, Panfilov district.

21. Profiles for these AA are given below in the table III.1: Table III.1 Profiles of Ayil Aimaks

# Indicators Petrovskiy Taldy-Bulak Frunze Total

1 Number of 3 3 3 9 2 Number of households 2867 419 2015 5301 3 Number of population 10596 2692 8896 22184 4 Including men 5047 1187 4456 10690 5 women 5549 1505 4440 11494 6 Number of vulnerable families 704 83 530 1317 7 Total area of arable land, ha 6801 5388 10462 22651 8 Schools 4 2 5 11 9 Health facilities 6 3 4 13 10 Culture facilities 4 2 2 8

22. There are 5301 households with 22184 residents in these 3 AA. Rural population is engaged mainly in crop and livestock products. All population has access to social services as secondary education, medical services. Local population has access to clean water in Taldy Bulak AA – 100%, in Petrovskiy and Frunze AA – 25%. According to data from table III.1 out of the 5301 households, 1317 (24.5%) are vulnerable families.

IV. CONSULTATIONS AND INFORMATION DISCLOSURE

23. During preparation of this DDR, the representatives of relevant LAs, all land users of arable land were consulted about the project, potential LAR impact, OPGW installation work. Table IV.1 The list of consulted persons during DDR preparation

# Name Ayil Aimak

1 Osmonov A. Taldy-Bulak 2 Omurkulov R. Taldy-Bulak 3 Omurkulova E. Taldy-Bulak

4 Imankulov A. Taldy-Bulak 5 Kaldybaev M. Taldy-Bulak

6 Babakulov J. Taldu-Bulak 7 Isaev B. Taldy-Bulak

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8 Asanov A. Taldy-Bulak

9 Moldokulov K. Taldy-Bulak

10 Aidarbaev J. Taldy-Bulak

11 Astarov D. Petrovskiy 12 Koikeev A. Petrovskiy

13 Shitogubova E. Petrovskiy 14 Ermatov A. Frunze

15 Kamaliev K. Frunze

16 Omuraliev D. Frunze

24. This DDR will be disclosed in English on the ADB website and in Russian on NEGK website.

V. GRIEVANCE REDRESS MECHANISM

25. A grievance redress mechanism (GRM) is available for each line within the Project. Decisions on Grievance redress mechanism are attached (Annex 6). 26. The GRM involves 3 stages appeals process as follows: (i) Local level (Local Authority). The grievances will be first lodged at the Grievance Redress Group (GRG) at Local Authority level. The complainant will report her/his case to the Local Point of Contact (LPC) who is officially appointed by Local Authority to promptly process and respond to AP’s queries and complaints. The LPC will trigger the action of the GRG which will assess the situation and seek a solution through consultation with complainants, representatives of Local Authority, DP and Turnkey contractor. GRG will take a decision in 14 working days. (ii) Central level (NEGK). If within 14 days the grievance is not resolved at Local Level the complainant will further raise the issue to NEGK’s Grievance Redress Commission in again with the support of the LPC of Local Authority and representatives of DP. NEGK’s Commission will take a decision in 14 working days. (iii) Court of law: if within additional 14 days the grievance is still not resolved at central level the complainant can appeal the decision and bring the case to the local courts.

VI. INSTITUTIONAL ARRANGEMENTS 27. Several agencies and parties were involved in DDR preparation. They are NEGK, LAR Commissions and turnkey contractor. 28.As the executing agency NEGK will manage organization of stringing of OPGW work, as:

i. inform local population through LA about the starting dates of works planned within the project; 10/11

ii. cut of electricity according to agreed time schedule; iii. taking measures on safety of lives and road security.

29. Turnkey contractor is responsible for drafting of this DDR and for these activities as (i) scoping of LAR impact; (ii) data collection; (iii) detailed measurement survey (DMS) based on detailed design of the stringing of OPGW; (vii) establishment of grievance redress mechanism. 30. LAR Commissions assisted data collection, identification of affected properties and their actual users. There are several institutions in LAR commissions: District state administration, Local Registration office (LRO), Department for agriculture, Department for construction and architecture, also Local Authorities.

31. Table VI.1 summarizes the functions of the different agencies/parties involved during OPGW installation work on Frunzenskaya-Kara Balta 2 OHL. Table VI.1. Responsibility of involved agencies/parties

# Activity Responsible 1 DMS and drafting of DDR Turnkey Contractor 2 Supervision of DDR related activities LAR Commissions 3 Review and Approval of DDR NEGK, ADB 4 Notification of installation starting date to LAR NEGK commissions 5 Beginning of installation Turnkey Contractor 6 Internal Monitoring NEGK

VII. MONITORING

32. Quarterly social safeguard monitoring reports will be prepared by PIU of NEGK and included in the quarterly progress reports and submitted to ADB. Internal monitoring will be carried out routinely by the PIU of NEGK in close communication with the Turnkey contractor.

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