The World Bank RESTRUCTURING ISDS Hebei Rural Renewable Energy Development Project (P132873) Public Disclosure Authorized Integrated Safeguards Data Sheet Restructuring Stage Restructuring Stage | Date ISDS Prepared/Updated: 8-May-2020 | Report No: ISDSR24504 Public Disclosure Authorized - Public Disclosure Authorized Regional Vice President: Victoria Kwakwa Country Director: Martin Raiser Regional Director: Benoit Bosquet Public Disclosure Authorized Practice Manager/Manager: Ann Jeannette Glauber Task Team Leader(s): Jin Liu The World Bank RESTRUCTURING ISDS Hebei Rural Renewable Energy Development Project (P132873) . I. BASIC INFORMATION 1. BASIC PROJECT DATA Project ID Project Name P132873 Hebei Rural Renewable Energy Development Project Task Team Leader(s) Country Jin Liu China Approval Date Environmental Category 13-Mar-2015 Partial Assessment (B) Managing Unit SEAE1 PROJECT FINANCING DATA (US$, Millions) SUMMARY-NewFin1 Total Project Cost 150.78 Total Financing 150.78 Financing Gap 0.00 DETAILS-NewFinEnh1 World Bank Group Financing International Bank for Reconstruction and Development (IBRD) 71.50 Non-World Bank Group Financing Counterpart Funding 79.28 Borrower/Recipient 79.28 2. PROJECT INFORMATION The World Bank RESTRUCTURING ISDS Hebei Rural Renewable Energy Development Project (P132873) PROG_INF O Current Program Development Objective The Project Development Objective (PDO) is to demonstrate sustainable biogas production and utilization to reduce environmental pollution and supply clean energy in rural areas of Hebei Province. China’s economy has experienced remarkable growth over the past several decades, but this growth has been accompanied by an increase in social and environmental challenges. Intensive farming and the expansion of livestock production in rural areas are considered viable means for creating rural income and employment and securing food supply. However, the rapid agricultural development poses a threat to the local environment and public health. Every year, around 690 million tons of crop residues are produced by agricultural farming and most of them are used by households as fuel or burned as waste in open fields. This causes significant indoor and outdoor air pollution. The concentrated livestock farms in the rural areas also produce serious pollution due to inappropriate animal manure treatment. The project would support installation and operation of biogas facilities that use crop residues and animal wastes as feedstock to generate biogas mainly for rural residents cooking and heating. This would be an effective way to reduce pollution in rural areas and provide clean energy. The project encompasses the following two components and main activities: Component 1: Large-scale biogas facilities management and renewable energy supply Under this component the national and international best practice in developing large-scale biogas facilities would be demonstrated. Series biogas facilities would be installed and operated in Hebei to effectively convert agricultural wastes (specifically crop residue and livestock manure) to biogas, to provide stable clean energy to local rural residents. It is expected that annually the project will produce around 37 million m3 of biogas and around 101,530 tons crop residues and 402,960 tons livestock manure will be appropriately treated as feedstock for the biogas production. The biogas would be provided to around 47,570 rural residents mainly for cooking and heating energy. In addition, the gas would be used to generate around 26.7 GWh electricity for power grid annually and produce around 3.2 million m3 of compressed natural gas (CNG) annually for public transportation in the project counties. Component 2: Technical support, project management, and monitoring This component would support technical services, training, monitoring and evaluation, and project management. Specifically, (a) an expert team would be contracted by provincial project management office (PPMO) to provide technical assistance to the project implementation; (b) in each of the subprojects a sample laboratory would be established for day-to-day biogas facilities performance monitoring; (c) a monitoring The World Bank RESTRUCTURING ISDS Hebei Rural Renewable Energy Development Project (P132873) system would be established both at subprojects to monitor their individual biogas system operation; and at provincial level to monitor overall project biogas system operation, project performance and its impacts; (d) around 1,800 person/day trainings would be arranged for project technical and management staff at provincial and county levels, in particular for the local technical staff at the project implementation units (PIUs) to obtain the skills in operating subprojects; and (e) Operational Manuals for biogas digester operation and biogas digestate application would be developed to guide the Hebei biogas program management. During the project implementation the subproject in Laoting County (Hebei Construction and Energy Investment Co., Ltd) dropped out with its total allocation of Bank loan (US$15 million) released. The project restructuring is proposed to reallocate the loan saving to the two existing subprojects: US$8 million for Zunhua subproject (Hebei Meikeduo Food Group Co., Ltd.) and US$7 million for Chengde subproject (Chengde County Green Energy and Organic Fertilizer Co., Ltd.). The proposed restructuring is being undertaken within the project design framework to optimize existing subprojects biogas production and improve the project efficiency. Specifically, the new investment will finance: (a) biogas fired power generation equipment to support broadening gas users from directly using gas for resident cooking to heating, and electricity generation for power grid; (b) feedstock pretreatment facilities to enable the use of diversified materials aiming to increase gas generation rate; (c) biogas production thermal system to save energy and reduce CO2 emission; and (d) high quality bio-fertilizers production (use biogas digestate as materials), storage and distribution facilities. As the proposed new activities are similar to those in the original project design and no land acquisition, and the installation of power generation equipment and connection gas production to local power grid has less negative environmental impacts, hence no new safeguards policy will be triggered and the project will remain as EA Category B. 3. PROJECT LOCATION AND SALIENT PHYSICAL CHARACTERISTICS RELEVANT TO THE SAFEGUARD ANALYSIS (IF KNOWN) Project areas are in rural areas of Hebei Province with vast agricultural land and many concentrated livestock farms. A large amount of crop residue and animal waste is produced, causing air, water and soil pollution in those areas. Consequently, appropriate agricultural waste treatments are urgently needed to reduce pollution. The project was designed to include six biogas facilities, located in six counties across Hebei Province, including Anping, Yutian, Zunhua, Linzhang, Chengde, and Laoting Counties. During the project implementation, the subproject in Laoting County was dropped out, making project sites are in five counties, and the loan saving is proposed to be reallocated to the existing two subprojects in Zunhua and Chengde Counties. Hebei Province has a complex terrain including mountains, hills, basins and plains, which consists of three major geomorphologic areas: Bashang Plateau, Yanshan and Taihang Mountainous area and Hebei plains. It belongs to sub-humid warm temperate continental monsoon climate zone, with a cold winter, hot summer, windy spring and cloudless autumn. The annual average temperature of the Province is between 4- 13 ℃. Project subprojects are located in rural area where agricultural activities are concentrated. While The World Bank RESTRUCTURING ISDS Hebei Rural Renewable Energy Development Project (P132873) other subprojects are located in flat areas, Zunhua and Chengde counties are located in northern mountainous areas in Hebei. 4. ENVIRONMENTAL AND SOCIAL SAFEGUARDS SPECIALISTS ON THE TEAM Zongcheng Lin, Social Specialist Yiren Feng, Environmental Specialist Bin Xu, Environmental Specialist SAFEGUARD_TABLE 5. SAFEGUARD POLICIES TRIGGERED Safeguard Policies Triggered Explanation The project is classified as Category B according to OP4.01. An Environmental Management Plan (EMP), which has all the elements of environmental impact assessment (EIA) has been prepared for the project. The EMP includes Environmental Codes of Practice (ECOP) and an Environmental Management Framework (EMF). The proposed project restructuring is being undertaken within the project design framework, hence no new safeguards policy will be triggered, and the project EA category remains B. The supplementary EMP has been prepared by the Environmental Assessment (OP) (BP 4.01) Yes environmental assessment institution and reviewed by the Bank. The supplementary EMP covers the environmental impacts and mitigation measures for the proposed activities under restructuring including financing electricity generation equipment, biogas residue treatment facilities, digestate storage facilities, bio-fertilizers production facilities and distribution network in Zunhua subproject and proposed facilities and equipment of feedstock preprocessing system, biogas slurry purification system, bio-fertilizer production equipment, solar energy heating system, and straw and animal waste storage and transportation facilities in Chengde subproject. Performance Standards for Private Sector No This