Environmental Monitoring Report #1 Semestral Report January 2021 Mongolia: Upscaling Renewable Energy Sector Project Prepared by the Project Management Unit for the Ministry of Energy and the Asian Development Bank. CURRENCY EQUIVALENTS (as of 30 December 2020) Currency Unit – Mongolian Tughrik (MNT) MNT 1.00 = $0.0003509 $1.00 = MNT 2,849.48 ABBREVIATIONS ADB Asian Development Bank AUES Altai-Uliastai Energy System CEMP Construction Environmental Management Plan DEIA Detailed Environmental Impact Assessment EA Executing Agency ESARF Environment and Social Assessment and Review Framework EHS Environment, Health and Safety EIA Environmental Impact Assessment EMoP Environmental Monitoring Plan EMP Environmental Management Plan FSR Feasibility Study Report GEIA General Environmental Impact Assessment GHG Green House Gas GIP Good International Practice GoM Government of Mongolia GRM Grievance Redress Mechanism SGHP Shallow Ground Source Heat Pump IA Implementing Agency IEC Independent Environmental Consultant (national) IEE Initial Environmental Examination MNS Mongolian National Standard MoE Ministry of Energy MoET Ministry of Environment and Tourism NAMEM National Agency of Meteorology and Environmental Monitoring NREC National Renewable Energy Center PCR Physical Cultural Resources PMU Project Management Unit PPE Personnel Protective Equipment PPTA Project Preparatory Technical Assistance PSC Project Steering Committee PV Photovoltaic SOJSC State-Owned Joint Stock Company SPS Safeguard Policy Statement, ADB TA Technical Assistance TBD To Be Determined WRES Western Energy System State Owned Joint Stock Company WEIGHTS AND MEASURES µg/m3 Micrograms per Cubic Meter BOD5 Biochemical Oxygen Demand, five days CaCO3 Calcium Carbonate cm Centimeter CO Carbon Monoxide CO2 Carbon Dioxide COD Chemical Oxygen Demand dB(A) A-weighted sound pressure level in decibels DO Dissolved Oxygen GWh Gigawatt Hour ha Hectare kg Kilogram km Kilometer kV Kilovolt kWh Kilowatt Hour Leq Equivalent Continuous Noise Level m Meter m/s Meters per Second m2 Square Meters m³ Cubic Meters masl Meters Above Sea Level mg/l Milligrams per Liter mg/m3 Milligrams per Cubic Meter mm Millimeter MW Megawatt NO2 Nitrogen Dioxide NOx Nitrogen Oxides O3 Ozone oC Degrees Celsius pH A measure of the acidity or alkalinity of a solution PM Particulate Matter PM10 Particulate Matter smaller than 10 micrometers PM2.5 Particulate Matter smaller than 2.5 micrometers SO2 Sulfur Dioxide SOx Sulphur Oxides TDS Total Dissolved Solids TSP Total Suspended Particulates NOTES (i) The fiscal year (FY) of the Government of Mongolia and its agencies ends on 31 December. (ii) In this report, "$" refers to US dollars. This environmental monitoring 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. 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 and does not intend to make any judgments as to the legal or other status of any territory or area. Table of Contents Executive Summary ................................................................................................................. 6 1. Introduction ......................................................................................................................... 8 2. Compliance to National Regulations ................................................................................... 8 3. Compliance to Environmental Covenants from the ADB Loan Agreement .........................10 4. Progress in Implementing the Environment Management Plan/Environmental Monitoring Plan ...................................................................................................................................15 5. Significant Events or Issues Encountered, Changes in Project Scope, and Corresponding Safeguard Measures Undertaken, if Applicable .................................................................24 6. Implementation of Grievance Redress Mechanism and Complaints Received from Stakeholders ......................................................................................................................25 7. Conclusion and Recommendations ....................................................................................26 Environmental Monitoring Report Loan 3708/Grant 0610/Grant 0611-MON: Upscaling Renewable Energy Sector Project Reporting Period: June 2020 to December 2020 Project Number: 50088-02 Date: January 2020 Executive Summary A construction phase semi-annual environmental monitoring report from “Upscaling Renewable Energy Sector” project, executed by the Ministry of Energy, documents the project’s environmental safeguards performance to comply with the requirements of the Asian Development Bank’s Safeguards Policy Statement (2009), applicable laws and regulations of Mongolia and applicable good international practices. The report contains all environmental safeguard activities undertaken during the project’s implementation until December 31, 2020. Key points of the report are updating project’s initial environmental examination, monitoring implementation of environmental management plans, and overall analysis of the safeguard requirements and its implementation for the project to ensure that unnecessary or reasonably avoidable adverse impacts of the construction and operation of the project are prevented and eliminated. The initial environmental examination for the core subprojects was developed and approved by the Asian Development Bank in June 2018. The project management unit updated the initial environmental examination in January 2020 and November 2020, to incorporated changes and entailed additional mitigation measures necessary for safe operation. In Quarter 3 of 2020, construction of Khovd subproject to install a 135kW shallow ground heat pump at Kindergarten 1 in Khovd city was commenced by Engineering, Procurement and Construction contractor Nar Energy Silicon Metal LLC (Mongolian) and Brosk LLC (Russian) joint venture (referred as Khovd subproject EPC Contractor). The Khovd subproject EPC contractor has developed Construction Environmental Management Plan (CEMP) which identified safeguards mitigation measures that conforms the project’s Initial Environmental Examination and Khovd sub-environmental management plan. The Khovd subproject EPC contractor has been reporting on the implementation of the CEMP regularly. In November 2020, an independent environmental monitoring was performed to assess the project’s safeguards compliance status. An initial independent environmental monitoring report finding are incorporated into this semi-annual environmental monitoring report. Consequently, this report captures all environmental consultants’ collaborative actions and activities performed to ensure project’s safeguard compliance. 1. Introduction The Government of Mongolia received grant from the Strategic Climate Fund, Japan Fund for the Joint Crediting Mechanism and loan from the Asian Development Bank to implement the Upscaling Renewable Energy Sector Project. The Project will develop 41.0 megawatts (MW) of solar, wind and shallow-ground renewable energy (RE) in remote areas of the Western and Altai Uliastai Energy Systems. The Project will be implemented over two phases, with the first phase from 2019-2022 and the second from 2022-2024. The core subprojects are: 1. Umnugovi subproject: A 10 MW wind power plant in Uvs Aimag. 2. Uliastai subproject: A 5 MW solar power plant in Aldarkhaan soum, and a 3.6 MWh battery energy storage system (BESS) at the Uliastai substation. 3. Govi Altai subproject: A 10 MW solar power plant in Yesonbulag soum. 4. Altai Soum subproject: An off-grid 0.5 MW hybrid solar and BESS facility in Altai soum. 5. Khovd subproject: A 135 kW shallow-ground heat pump (SGHP) at Kindergarten 1 in Khovd City. The core subprojects have been screened and classified by ADB as Environment Category “B”, involuntary resettlement, and indigenous people category “C”. The non-core subprojects are: 1. Shallow ground heat pump projects in Ulaangom, Uliastai, Altai soum and Murun cities. 2. A 5 MW wind power plant Zavkhan province. 3. A 10 MW solar power plant project in Murun city, Khuvsgul province. The non-core subprojects will be screened by the ADB and shall be classified as Environment Category “B”, involuntary resettlement, and indigenous people safeguards category “C” upon feasibility study development as per project’s Environmental and Social Assessment Review Framework (ESARF) developed in June 2018. In compliance with the requirement of ADB safeguard policy statement, an initial environmental examination was conducted for the core subprojects in June 2018, with environmental management plans for each subproject. This semi-annual environmental monitoring report contains the status of the implementation of environmental management plans until December 2020. 2. Compliance to National Regulations In addition to safeguard requirements by the lenders, the national laws and regulations are identified during the detailed environmental impact assessments under detailed environmental management plans. Core subproject DEIA and EMPs have been approved by the Ministry of Environment and Tourism of Mongolia in 2018 during technical assistance project phase. In 2020, following activities and reports were developed and undertaken