Public Disclosure Authorized THE GOVERNMENT OF ERITREA MINISTRY OF ENERGY AND MINES Public Disclosure Authorized ASMARA POWER DISTRIBUTION AND RURAL ELECTRIFICATION PROJECT Public Disclosure Authorized Environmental and Social Assessment (ESA) Report Including Environmental and Social Management and Monitoring Plan (ESMMP) Public Disclosure Authorized January 2004 FILE COP Executive Summary Introduction The Ministry of Energy and Mines of the State of Eritrea has requested the World Bank and other donors to finance the Asmara Power Distribution (Voltage Conversion and Rehabilitation) and Rural Electrification Project. IVO Power Engineering Limited of Finland and Electrowatt Engineering Ltd of Switzerland conducted the Feasibility Study in 1998. According to this study it was found that the present power distribution system in Asmara, which is 40-50 years old, is incapable of meeting additional loads, power failures and voltage fluctuations are frequent and losses are unacceptably high. Thus the main motive is to alleviate the acute weakness and shortcomings of the old distribution networks in Greater Asmara. A latest estimate of the electrification level in rural Eritrea is 3% and the poverty level is around 70%. As modem energy and in particular electricity is a requirement to stimulate rural development and eradicate poverty, an intense government and donor support is required to change the way of life of the rural people and meet the Millennium Development Goals. This is the driving force behind the rural electrification component of the project. The Ministry of Energy and Mines has requested the World Bank (WB) and other bilateral development partners to finance the project. It reached an understanding with the WB mission to take the responsibility to conduct an Environmental and Social Assessment of the proposed project, which is a requirement for appraisal. This report is an outcome of this exercise and has been carried out by complying fully with the Eritrean and World Bank standards for environmental and social impact assessment. It was agreed that the proposal components constitute a Category B project in terms of environmental impacts. The report is produced in two volumes, the first being the main Environment and Social Assessment (ESA) Report that includes the Environmental Management and Monitoring Plan (ESMMP) and the second is the Resettlement Policy Framework (RPF). Socio- economic, legal and administrative framework Socio-economic Environment Eritrea is a young country, which was liberated in May 1991 from Ethiopia after a thirty-year war of liberation. Two years later, a UN supervised referendum was conducted to ascertain the wish of the Eritrean people. In that referendum, 99.8% of the people voted for independence, and the Sate of Eritrea was officially proclaimed. It has a total land area of 2 2 ~~~~~~~~~~~~~~~~~~~~~2 124,320 kM , and a marine exclusive economic zone of 121,000 kmi along its 1200-km long coast line in the Red Sea, of which about 56,000 km2 is territorial water over which the country exercises exclusive sovereignty. The country has also more than 350 small and medium sized islands. The resident population (i.e., excluding the Diaspora) of Eritrea was estimated to be around 3.2 million in 1999, and it is growing at a rate of 3.0% per annum. There are nine tribal groups in the country, namely Afar, Bilen, Hedareb, Kunama, Nara, Rashaida, Saho, Tigre, Tigrigna. Tigrigna and Arabic are the most frequently used languages for commercial and official transactions. English is widely spoken and used by government offices and is also the language used for middle, secondary and university education In 1997, Eritrea registered the highest GDP and GNP since independence of 700 and 900 million US $ respectively. Per capita income is low averaging at 200 USD in the latter years. Agriculture contributed about 16 percent of Eritrea's GDP in 1999, much less than most other African countries, while industry accounted for 27.3% and services 56.7%. Administrative environment The Government is headquartered in Asmara although efforts are being made to decentralise. For administrative purposes, the country is divided into six regions or Zobas, 57 sub-Zoba administrative districts, 701 administrative units, which on the average consists of 3-4 villages. There are 2606 villages in the country according to the 2001 report of the Ministry of Local Government. The administrative units are headed by elected officers from among the village communities. Legislation of relevance to the project The government's strong commitment to sustainable development is reflected by its ratification of the three most important environmental conventions, namely the UNFCCC, CBD and CCD and the follow-up activities in this line. Eritrea's strategy for sustainable development, of which environmental management is among its pillars, is encapsulated in several national documents. Eritrea is soon to proclaim an umbrella law on the environment. The Department of Environment of the Ministry of Land, Water and Environment is responsible for implementation of the national environment policies and programmes in collaboration with other relevant institutions. The main objective of the environmental policy is to harmonise sustainable economic growth and development with proper environmental protection and use. In March 1999, The Department of Environment launched the National Environmental Impact Assessment Guidelines and Procedures. These procedures lay out the general principles, approaches and instruments and the EIA licensing procedures. These guidelines are similar in content to the World Bank operational policies and guidelines on Environmental Impact Assessment. The basic law governing land use is the Land Reform Proclamation of 1994, which vests ownership of land to the Government. This essentially mandates the Government to develop the principles and criteria for classifying land and planning for the various competing uses, such as use for agriculture, tourism, wildlife conservation, housing, public amenities, mining and so on. An Electricity Proclamation has been prepared and submitted to the Government for approval. The purpose of the Proclamation is to promote efficiency, safety, environmental protection and the private sector involvement in the power sector. This Proclamation has provisions for rights and duties of licensees in the electricity business and users with respect to the use of land for electricity infrastructure in urban and rural areas. The Ministry of Energy and Mines has separate Directives on the procedures of cost sharing between Government and benefiting communities in rural electrification and on the role of electricity co-operatives. With regard to electricity supply, the Department of Urban Planning standards and guidelines recognise the space requirements for the sources of electric supply and necessary premises for the network system and main power station and substations mandating the engineering design responsibility to the Eritrea Electric Authority. The Approach is similar to the other infrastructures like water, telecommunications and road networks. iii Although, digitized map for all underground networks of water, electricity and telecom lines can not be secured as they are non-existent, information is available in maps for each specific area within Asmara. Eritrea is blessed with perhaps 20,000 to 40,000 heritage sites, many of them having global, continental, and national importance. Many areas of the country can be considered extremely sensitive to development. Knowledge about the most sensitive zones is growing every day. However, many potentially sensitive areas are not yet known because archaeologists and heritage managers are only beginning to document the presence of cultural heritage sites. Background to the Energy Sector Biomass forms of energy are still the major sources in Eritrea. The energy balance for the year 2002 showed that total primary energy supply was around 787,730 tons of oil equivalent (toe), of which 499,750 toe, or 63.4%, was derived from local biomass fuels, and the remaining 287,980 toe, or 36.6%, from imported oil products. From the oil products, 59,160 toe was used for the thermal generation of 249.1 GWh of electricity at conversion efficiency of 38% from the public electric utility EEA systems alone. The total final energy supply was 702,360 toe, of which 66.8% was consumed by the household sector, 13.2% by transport, 10.1% by the public and commercial, 7.5% by the energy industry, and 2.4% by the manufacturing industry. The share of the electricity consumption was only 2.6%. At national level, the 2002 Eritrean demographic and health Survey indicates that access to electricity for Asmara, other urban and rural areas are 99%, 61% and 3% respectively. Per capita electricity generation was 72.1 kWh while consumption was 60 kWh in 2002. In comparison, this shows nearly four-fold increase in the per capita electricity generation and consumption since 1991. There is about 600 kW solar PV system in the country, installed mostly for welfare focussed applications like water pumping, powering health centres, schools, communications, etc. The Asmara Power Distribution and Rural Electrification Project DistributionSystem in Asmara: Strengthen and make reliable the old substations at Asmara Centre, Gejjeret, Belesa, Denden, Tsada Kristian and Mai Nefhi by extending the new 66 kV transmission and installing new transformers; * Convert the existing 5.5/.23 kV system to 15/0.4 kV system,