KMRI SMG ASSET COMPANY PVT LTD 4 MW Biomass Combined Heat & Power Plant Project, Loluwagoda, Mirigama ENVIRONMENTAL IMPACT ASSESSMENT (EIA) Report 8/28/2015 This EIA Report is prepared for KMRI SMG Asset Company Ltd., which is an incorporated private company engaged in power generation. The purpose is to assess the environmental and social impacts of the proposed project in keeping with environmental and social safeguard policies, laws and regulations of both Sri Lanka as well as international best practices, in particular the operational guidelines of the European Investment Bank. The proposed power generation project complements Sri Lanka’s energy policies. The project will have an installed capacity to generate 4.0 MW of electricity (combined power & heat) to be partly used by the existing industry owned by Silver Mills Group and the balance to be connected to the national grid. The project is being constructed on a land where the Silver Mills Group has its coconut processing plant being operated for the last few decades. The fuel wood supply chain lies within a radius of 50 km from the location of the power plant which includes villages in the Kegalle, Kurunegala and Gampaha Districts of Sri Lanka Page 0 EIA Report for the 4 MW Biomass Combined Heat and Power Plant Project-Mirigama Contents 1 INTRODUCTION ....................................................................................................... 14 1.1 The Developer ...................................................................................................... 15 1.2 Objectives and justification of the project .............................................................. 15 1.3 Power Sector Overview of Sri Lanka .................................................................... 17 1.1 Government policy regarding the related sectoral development ............................. 18 1.2 Extent and scope of the study ................................................................................ 20 Socio Economic Assessment ....................................................................................... 25 2 APPLICABLE LAWS, REGULATIONS AND STANDARDS .................................. 29 2.1 Country policies laws and regulations ................................................................... 29 2.1.1 Sustainable and Renewable Energy Policy (Existing situation and future Policy) Biomass: ..................................................................................................................... 29 2.1.2 Other legal instruments having a bearing on the project ................................. 36 Pradeshiya Sabha Act No. 15 of 1987 .......................................................................... 36 2.2 EIB Environmental & Social Standards ................................................................. 38 3 KEY STAKEHOLDERS: ............................................................................................ 39 4 DESCRITPTION OF THE PROPOSED PROJECT & REASONABLE ALTERNATIVES ............................................................................................................... 41 4.1 SMG and KMRI ................................................................................................... 41 4.2 Site Location and Technical Description with maps and diagrams: ........................ 42 4.3 Disc Chipper & Associated Facilities .................................................................... 43 4.4 Topography of the land and the landscape of the project area: ............................... 48 4.4.1 Land Ownership ............................................................................................. 48 4.5 Project Area of Influence ...................................................................................... 48 4.6 Project summary: .................................................................................................. 49 4.7 Project time schedule: ........................................................................................... 50 4.8 A Brief Description of the Different Components of the Project: ........................... 52 4.8.1 Raw Materials ................................................................................................ 52 4.8.2 Process technology ........................................................................................ 52 4.8.3 Water supply .................................................................................................. 53 4.8.4 Equipment description: .................................................................................. 53 4.9 Repairs and Maintenance Activities ...................................................................... 57 4.10 Power Evacuation: ............................................................................................. 57 4.11 Evaluation of alternatives .................................................................................. 58 4.11.1 No Action Alternative .................................................................................... 58 4.11.2 Alternative design, technology selection, construction techniques . ................ 58 4.11.3 Rankin Cycle Route ....................................................................................... 59 Page 1 EIA Report for the 4 MW Biomass Combined Heat and Power Plant Project-Mirigama 4.12 Approvals to be received by the Developer: ................................................. 60 4.12.1 Clearance/permits to be obtained from state agencies and/ or local authorities 60 4.12.2 Permits required for transport of fuel wood .................................................... 61 4.12.3 Total human resources including that of the supply chain: .............................. 61 4.12.4 Staff engagement Plan ................................................................................... 62 5 DESCRIPTION OF THE EXISTING ENVIRONMENT ............................................. 63 5.1 Climate and Meteorology ...................................................................................... 63 5.2 Wind ..................................................................................................................... 65 5.3 Surface water ........................................................................................................ 65 5.4 Geology & Soil ..................................................................................................... 67 5.5 Socio-economic baseline information .................................................................... 68 5.5.1 Population statistics of all locations:............................................................... 68 5.5.2 Gampaha District: .......................................................................................... 69 5.5.3 Kegalle District .............................................................................................. 71 5.5.4 Kurunegala District: ....................................................................................... 72 Ecology of the project influence Area .......................................................................... 76 5.6 Meeting Fuel Wood needs of the power plant:....................................................... 78 5.6.1 Potential sources of Fuel wood: ...................................................................... 80 5.6.2 Small Scale Home Gardeners of Gemi-Sarana CBO network ......................... 82 5.7 Water .................................................................................................................... 87 6 ENVIRONMENTAL, HEALTH & SOCIALIMPACTS .............................................. 89 6.1 Social Benefits: ..................................................................................................... 90 6.2 Environmental Benefits ......................................................................................... 90 6.2.1 CDM Potential of the Project ......................................................................... 91 6.3 Economic Benefits ................................................................................................ 95 6.4 Environmental, Social, Health Impacts during Construction Period ....................... 96 6.1 Construction Impacts on the existing environment ................................................ 96 6.2 Environmental, Health & Social Impacts of the project during operational phase .. 99 6.3 Impact Mitigation Measures: ............................................................................... 104 6.3.1 Environmental quality Impacts ..................................................................... 104 6.3.2 Managing Social and Economic Impacts ...................................................... 108 6.3.3 Managing Occupational Health & Safety Impacts: ....................................... 109 6.3.4 Managing Ecological Impacts ...................................................................... 110 6.4 Statutory / Local Government Approvals ............................................................ 111 7 PROJECT CONTINGENCY PLAN .......................................................................... 112 8 ENVIRONMENTAL AND SOCIAL MANAGEMENT SYSTEM: .......................... 117 8.1 Environmental & Social Policy statement ........................................................... 117 Page 2 EIA Report for the 4 MW Biomass Combined Heat and Power Plant Project-Mirigama 8.2 ENVIRONMENTAL & SOCIAL MANAGEMENT PLAN (ESMP) .................. 121 9 CONCLUSION