Rajasthan Secondary Towns Development Sector Project (RRP IND P42267-031)

CLIMATE CHANGE ASSESSMENT

I. BASIC PROJECT INFORMATION

Project Title: IND (42267-031): Rajasthan Secondary Towns Development Sector Project Project Cost ($ million): Modality and Source Amount ($ million) ADB 300.0 Sovereign Sector (Regular Loan): Ordinary capital resources 300.0 Cofinancing 0.0 None 0.0 Counterpart 128.50 Government of Rajasthan 128.50 Total 428.50 Location: At least 14 towns in Rajasthana Sector / Urban Development Sector/ Water and Sanitation; and other urban services Subsector: Theme: Inclusive economic growth; Environmentally sustainable growth Brief Description: The project will improve water supply and sanitation (WSS) services in at least 14 secondary towns in Rajasthan. Outputs are: (i) water supply system in eight project towns improved; (ii) sanitation systems in 13 project towns developed or improved; and (iii) institutional and human capacities strengthened for sustainable service delivery, gender equality, and improved public health. The project aims to benefit at least 95% of the below poverty line population. The project includes smart water management in all project urban local bodies (ULBs) to enable efficient service delivery considering scarcity of water resources and an integrated approach to sanitation, linking on-site fecal sludge management solutions that are more cost-effective, wider-reaching and less water dependent with costlier sewerage only provided to more densely populated areas. The project will make the WSS systems more reliable, sustainable, and climate-resilient and will improve service delivery and increase understanding of climate change aspects and managerial capacity of all project ULBs. The WSS sector in Rajasthan is highly sensitive to fluctuations in rainfall and increases in temperature, which in turn impact quantity and quality aspects of the water distribution, storage, and treatment. Design and specifications need to take these sensitivities into account to ensure that the subprojects are climate resilient. a Abu Road, Banswara, Didwana, Fatehpur, Khetri, Kuchaman, Laxmangarh, Ladnu, Mandawa, Makrana, Pratapgarh, Ratangarh, Sardarshahar, and Sirohi. Source: Asian Development Bank.

II. SUMMARY OF CLIMATE CHANGE FINANCE

Project Financing Climate Financea Amount Adaptation Mitigation Source ($ million) ($ million) ($ million) Asian Development Bank 300.0 34.1 7.5 Sovereign Sector (Regular Loan): Ordinary capital 300.0 34.1 7.5 resources Counterpart 128.5 7.6 1.7 Government of Rajasthan 128.5 7.6 1.7 a Includes 10% contingencies and 12% taxes. Source: Asian Development Bank.

2

III. SUMMARY OF CLIMATE RISK SCREENING AND ASSESSMENT

A. Sensitivity of Project Components to Climate or Weather Conditions

(i) Water supply system in at least eight project towns improved a) A temperature increase may cause a reduction in water availability and may require additional storage capacity. Increased water losses during storage are also expected, and deterioration in water quality and increased treatment requirements in surface water sources such as reservoirs and during storage and distribution. Low water availability also affects hygiene and cleaning. Temperature increase may also cause reduced efficiency of mechanical and electrical equipment; and thereby increasing energy consumption charges. b) An increase in rainfall and runoff could damage water and sanitation facilities by scouring the foundations resulting in deterioration of infrastructure. c) Decreased rainfall/drought conditions could increase energy requirements and the cost of water distribution.

(ii) Sanitation systems in at least13 project towns developed or improved: (a) an increase in rainfall could result in flooding, which may damage sanitation systems and contaminate flood waters, further contaminating the water supply and distribution system; and (b) increased temperature/decreased rainfall/drought conditions increases sewage treatment requirements due to lowered dissolved oxygen and increased biological activity. Insufficient water makes flush- sanitation systems redundant.

(iii) Institutional and human capacities strengthened for sustainable service delivery, gender equality, and improved public health: Changes in climate and weather conditions shall require institutions that can plan and implement projects leading to climate change adaptation/mitigation. B. Climate Risk Screening Change in Medium: Abu Road, Khetri, Mandawa, Sirohi temperature High: Banswara, Didwana, Fatehpur, Kuchaman, Ladnu, Laxmangarh, (increase) Makrana, Pratapgarh, Ratangarh, Sardarshahar Change in Medium: Banswara, Pratapgarh precipitation High: Abu Road, Didwana, Fatehpur, Khetri, Kuchaman, Ladnu, Laxmangarh, (decrease) / drought Mandawa, Makrana, Ratangarh, Sardarshahar, Sirohi Flooding risk Low: Abu Road, Banswara, Didwana, Fatehpur, Khetri, Kuchaman, Ladnu, (from extreme Laxmangarh, Makrana, Mandawa, Pratapgarh, Ratangarh, Sardarshahar, rainfall events) Sirohi Cyclones (storm Low: Abu Road, Banswara, Didwana, Fatehpur, Khetri, Kuchaman, Ladnu, surge) Laxmangarh, Makrana, Mandawa, Pratapgarh, Ratangarh, Sardarshahar, Sirohi Earthquakes Low: Banswara, Didwana, Fatehpur, Kuchaman, Ladnu, Laxmangarh, Makrana, Mandawa, Pratapharh, Ratangarh, Sardarshahar Medium: Abu Road, Khetri, Sirohi Climate Risk Classification: High C. Climate Risk and Adaptation Assessment (i) Overall methodology The results are based on a full climate risk and vulnerability assessment (CRVA),a which characterizes project climate risks by identifying both the nature and likely magnitude of impacts and identifying the project features most vulnerable to climate change. The process recognizes that many of the future impacts of climate change are fundamentally uncertain and that project risk management procedures must be robust and applied to a range of uncertainty. The CRVA also seeks to ensure that adaptation measures are locally beneficial, sustainable, and economically efficient. The CRVA identifies and assesses climate risks based on preliminary engineering specifications and site conditions of representative subprojects in Rajasthan, together with climate change projections. The CRVA seeks to inform design decision making and to adapt the project infrastructure and investments to improve project resilience.b 3

(ii) Key climate risks: temperature increase and decreased rainfall resulting in drought Historically, rainfall in large parts of Rajasthan is low with the average rainfall of 556.43 millimeters (mm) in 1901–2016 compared to the all-India average of 901.02 mm. Significant variation in rainfall has been observed across the districts in Rajasthan. For the period 2040–2059, it is expected that average monthly temperature during the pre-monsoon season would be 2.62 celsius (oC) higher than the 1986– 2005 baseline monthly average during the same season. In some places, the temperature change could range from as low as 1.50oC or as high as 3.16oC in some places.c

(iii) Adaptation options identified and prioritized for managing the risks (see Section IV)

D. Climate Risk Screening Tool and/or Procedure Used SARD climate risk screening framework and methodology, and a project-specific CRVA. a CRVA is available upon request. b Risk is defined as the likelihood of an adverse event and its consequence, the event being the climate hazard, and the consequence depending on the degree of exposure (e.g., location) and vulnerability of the infrastructure. The latter in turn depends on sensitivity factors due to the nature of the infrastructure, e.g., age, materials used, design, and relevant non-climate factors contributing to increased adaptive capacity such as good management practices and skills and existing sector policies governing the project sector and related investments that could reduce the risks. c Climate projections are derived from a group of 35 global climate models used by the Intergovernmental Panel on Climate Change (IPCC) during the Fifth Assessment Report. https://climateknowledgeportal.worldbank.org/country/climate-data-projections Source: Asian Development Bank.

IV. CLIMATE ADAPTATION PLANS WITHIN THE PROJECT

Estimated Adaptation Target Climate Adaptation Activity Risk Costs ($ million)a Adaptation Finance Justification Tapping surface Prolonged 4.66 The climate risk study recommended use of water sources decrease in more sustainable, surface water sources precipitation over groundwater sources that are less can lead to sustainable. The cost of 69-kilometer drought. transmission mains is included since surface water sources are located farther than groundwater sources. The associated costs of $4.66 million is reported as adaptation finance. Improvements to Prolonged 3.70 Water scarcity in the state requires water supply decrease in measures to ensure water losses are distribution precipitation minimized and use of potable water is system can lead to optimized; cost of bulk and household drought. meters included. The associated cost of $3.70 million is reported as adaptation finance. Supervisory Prolonged 1.02 Water scarcity requires optimum water control and data decrease in management. SCADA systems will help acquisition precipitation with monitoring the system and managing (SCADA) can lead to nonrevenue water, among others. The drought. associated cost of $1.02 million is reported as adaptation finance. Rainwater Prolonged 0.40 Rainwater harvesting structures will be harvesting decrease in constructed on all buildings, treatment structures precipitation plants and pump houses constructed can lead to through the project to provide additional 4

Estimated Adaptation Target Climate Adaptation Activity Risk Costs ($ million)a Adaptation Finance Justification drought. water supply. The associated cost of $0.40 million is reported as adaptation finance. Household sewer Prolonged 14.90 To mitigate flood risks intensified by collections in increase in overflows of untreated wastewater and sewage precipitation septage from septic tanks, the cost of collection system can result in household sewer connections is included as flooding that an adaptation measure. The associated could cost of $14.9 million is reported as be exacerbate adaptation finance. by the overflows of untreated wastewater and septage from septic tanks Upgrading and Low 4.18 Sequencing batch reactor technology used constructing new precipitation in the project for sewage treatment plants sewage and drought results in higher effluent quality and treats treatment plants periods can higher volumes with a lower footprint as lead to compared to lower technology plants. Only increased one-fourth of the cost of sewage treatment organic plants is reported as adaptation finance. loading. Treated Prolonged 1.50 Wastewater reuse is targeted in all project wastewater decrease in towns and reduces the dependence on reuse precipitation potable water or raw water for activities like can lead to agriculture and industry. The cost of treated drought. wastewater pumping and storage is included. The associated cost of $1.50 million for treated wastewater pumping assets and storage facilities is reported as adaptation finance. Strategic Extreme rainfall 2.87 The climate risk study recommended manholes can result in additional measures to control levels and overflowing. pumping of manholes in strategic locations to prevent overflow during extreme rainfall events and close monitoring from main control panel. The associated cost of $2.87 million for level transmitters along with remote terminal unit, general pocket radio service, modem and power supply system is reported as adaptation finance. Awareness Prolonged 0.34 Information education and communication building activities decrease in activities and workshops on water precipitation conservation, environmental protection and can lead to hygiene can enhance the adaptive capacity drought and of urban local body (ULB) staff and the increasing public. The associated costs of $0.34 precipitation million for this non-structural measure is can result in reported as adaptation finance. extreme 5

Estimated Adaptation Target Climate Adaptation Activity Risk Costs ($ million)a Adaptation Finance Justification flooding. Capacity building Prolonged 0.28 Strengthening capacity of ULB staff to of ULB staff decrease in ensure they can efficiently manage the precipitation assets will help to reduce power can lead to consumption requirements and build drought. understanding and capacity to manage climate change impacts. The associated cost of $0.28 million for this non-structural measure is reported as adaptation finance. Total 33.85 a Excluding contingencies and taxes. Source: Asian Development Bank.

V. CLIMATE MITIGATION PLANS WITHIN THE PROJECT

Estimated Greenhouse Estimated Gas Emissions Mitigation Mitigation Reduction Costs ($ a Activity (tCO2e/year) million) Mitigation Finance Justification Tapping surface 1,974b 5.44 Avoidance of groundwater pumping, which water sources uses fossil-generated electricity. Only the cost of intake wells with pump houses is considered mitigation finance. Adoption of high- 2,862c 0.45 Only the difference in the cost of premium efficiency energy-efficient motors (IE3 compliant) and equipment standard efficiency motors is considered as mitigation finance. Installation of 1,729d 1.58 Generation of renewable energy at project solar photo- sites reduces dependence on fossil- voltaics on all new generated electricity for operations. Cost of buildings/ solar photovoltaic system is considered as structures mitigation finance. Total 6,565 7.47 a Excluding contingencies and taxes b For intake structures in Abu Road and Sirohi, energy consumption for pumping raw water from intake to the treatment plant will be 767 megawatt-hour (MWh)/year, instead of 4,879 MWh/year in the absence of the subproject and dependence on tubewells. 4112 MWh/year energy is being saved, which reduces greenhouse gas emissions by 1,974 ton of carbon dioxide equivalent(tCO2e)/year. c Assuming 78 MWh energy/day electricity consumption by the most prevalent equipment and 25% transmission and distribution losses in Rajasthan, 28,622 tCO2/year greenhouse gas emissions are estimated with standard equipment. The use of energy efficient motors and variable frequency drives in the project reduces consumption by 10% leading to greenhouse gas emissions reduction of 2,862 tCO2e/year. d Solar photovoltaics of 1,839 kilowatt (kW) capacity are proposed to be installed in 14 towns. This translates into 1,970 MWh energy production/year, considering 7 months with sunny days. With grid emission factor of 0.878, it is estimated that greenhouse gas emissions will be reduced by 1,729 tCO2e/year. Source: Asian Development Bank.