INTEGRATED SAFEGUARDS DATASHEET
APPRAISAL STAGE
I. Basic Information
Date prepared/updated: 07/14/2008 / Report No.: AC36361. Basic Project Data
Country: Mali / Project ID: P111018
Project Name: Additional Financing Mali Household Energy and Universal Access Project
Task Team Leader: Koffi Ekouevi
Estimated Appraisal Date: July 14, 2008 / Estimated Board Date: August 28, 2008
Managing Unit: AFTEG / Lending Instrument: Specific Investment Loan
Sector: Power (70%);Renewable energy (25%);General energy sector (5%)
Theme: Infrastructure services for private sector development (P);Regulation and competition policy (P);Rural services and infrastructure (P);Climate change (P);Land administration and management (P)
IBRD Amount (US$m.): 0.00
IDA Amount (US$m.): 35.00
GEF Amount (US$m.): 0.00
PCF Amount (US$m.): 0.00
Other financing amounts by source:
BORROWER/RECIPIENT 3.86
3.86
Environmental Category: B - Partial Assessment
Simplified Processing / Simple [] / Repeater []
Is this project processed under OP 8.50 (Emergency Recovery) or OP 8.00 (Rapid Response to Crises and Emergencies) / Yes [ ] / No [X]
2. Project Objectives
The proposed Additional Financing would support the initial development objective of the Household Energy and Universal Rural Access (HEURA) Project which is to support the Government of Mali's efforts to increase the access of isolated low income populations to basic energy services to help achieve economic growth and poverty reduction targets, including those linked with the Millennium Development Goals (MDGs).
3. Project Description
The original Project Design with its three components remains unchanged. The Additional Financing would support the original development objective of the current project and would be implemented using the same framework and implementation arrangements as the original project.
Component 1: Capacity Development and Institutional Strengthening ( US$2.76 million)
The Capacity Development and Institutional Strengthening component will finance the Water and Electricity Regulatory Commission (CREE), the Directorate of Energy (DNE), the National Directorate of Nature Conservation (DNCN), and the Rural Energy Agency (AMADER). The World Bank Institute will provide technical assistance in the design of capacity development activities based on project objectives and sector objectives as outlined in the CAS.
Sub-component A: Support to the CREE. This Additional Financing will help the CREE redefine its mandate, reinforce its technical capacities in the area of contract oversight, monitoring and compliance more effectively. This is particularly important in view of the recently failed privatization experience of EDM SA and the need to eventually establish a more formal regulatory oversight mechanism once the rural electrification initiatives are sufficiently scaled up. Therefore tailor made capacity building activities and on-the job training will be a priority. A limited number of equipment (hardware and software), strategic studies and workshops will also be financed.
Sub-component B: Support to the DNE. The DNE is still a relatively fragile institution with a weak administrative authority. Sector strategy and policy formulation, monitoring and evaluation, and impact assessment mandates of to DNE are still not being adequately met. This Additional Financing will help the DNE conduct an institutional audit to identify its strengths and weaknesses and to develop an action plan towards a reinforced administrative and technical authority. A capacity building program for staff, equipment, sector strategic studies, and workshops will be financed. Particular areas of focus include knowledge and tools in policy formulation, monitoring, evaluation, and impact assessment, demand side management and energy efficiency, biofuels project development, energy and climate change issues, and generation, transmission, and distribution master plans.
Sub-component C: Support to the DNCN- The DNCN is playing an important role in the supervision of woodland energy management activities of the household energy component. In particular, the DNCN is ensuring that the control and monitoring systems of the fuelwood rural markets are efficient and effective. Continuous efforts are needed to strengthen the DNCN to be more efficient in policy and strategy development; and monitoring and evaluation of activities in the forestry sector. In particular, the Additional Financing will help finance the implementation of existing forestry legislation intended to regulate the production, trade, and utilization of woodfuels. A capacity building program mostly for regional staff, equipment, strategic studies and workshops will be financed.
Sub-component D: Support to AMADER. The original project financed capacity development of AMADER and equipment to enable it to become an operational Agency. This Additional Financing will finance AMADER (i) to improve on its monitoring of local private sector operators involved in energy services delivery; (ii) to develop more innovative technical and managerial schemes to promote lower cost electrification solutions; (iii) to promote additional productive uses of energy services in partnership with the local banking system; (iv) to continue to remove barriers to the development of renewable energy in line with the objectives of the GEF co-financed activities of the original project; and (v) to reinforce output based mechanisms related to the energy services delivery component. This subcomponent will also finance outreach and partnerships initiatives at the national, regional, and global levels to attract more financing for scaling up in a sustainable manner energy access expansion in Mali. A strategic capacity development program will be financed as well as technical studies, equipment, and workshops.
Component 2: Energy Services Delivery ( US$30.41 million)
The Energy Services Delivery Component will finance the scale up of rural electrification projects. The experience of the spontaneous bottom up projects has demonstrated the potential of a large scale energy access project in Mali. Following the bottom up rural electrification approach spontaneous private initiative projects are selected based on promoters’ ability to develop and operate a viableproject with a fixed investment subsidy (between 75-80% , $500,000 max). Subsidies are established on the basis of (i) number of customers to be connected during the first two years (ii) the average tariff (iii) subsidy by customer connected (total investment/number of customers).
Sub-component A: Scale up of Rural Electrification Projects. Through the Additional Financing the Energy Services Delivery investments will be scaled up through the extension of existing bottom up projects, the development of new bottom up projects, and the development of one top down project. It was estimated by the original project that some 5-7 larger top down decentralized schemes, including two ongoing decentralized schemes prior to the project will be developed. It turns out that the development of these top down projects was difficult and very slow. In addition, they required the participation of foreign private sector investors that are slow to engage in deals in rural areas of Mali. It was rather the extension of two existing larger decentralized concessions that was implemented. The original project attracted an impressive number of local private sector operators through small scale projects. The Additional Financing will scale up the bottom up small scale projects with the implementation of only one top down larger project. Through a separate financing from KfW, AMADER is developing the implementation of two other top down larger projects.
Sub-component B: Scale up of Multi-Functional Platforms Investments. The original project has demonstrated that the Multifunctional Platforms are helping communities have access to basic pre-electrification and helping to develop productive uses of energy. This Additional Financing will finance a scale up of the Multi-functional platforms in remote communities. A particular emphasis will be placed on partnerships with the local banking system to develop micro-financing schemes to support the women’s associations managing the Multifunctional Platforms.
Sub-component C: Information, Education, and Communication (IEC). Implementation experience with IEC through the original project indicated that a deepening of the initiatives, their relevance to local communities, and demonstration workshops are important. The Additional financing will support tailor-made IEC initiatives mostly in remote communities to support energy services delivery initiatives.
Component 3: Household Energy ( US$ 1.76 million)
The speed of physical progress of the woodland management initiatives of the original project is slow as many actors both local and central are involved and considerable amount of time is needed to build consensus. Moreover, sustainability of these initiatives is linked to the enforcement of forestry legislation, participatory approaches that are elaborate in design and implementation. A strategic choice has been made to consolidate initiatives of the original project and to scale up only those that have proven satisfactory in their implementation.
Sub-component A: Community-based Woodland Management. This sub-component will finance (i) the consolidation of woodland management plans; (ii) small woodfuels management activities by local communities and private operators; and (iii) a forestry information system. This sub-component will also finance specific activities initiated in partnership with the DNCN to strengthen the legal and regulatory framework sustaining the woodfuel sector. In particular: (i) the delegation of tax collection to credible and equipped communal institutions; (ii) guaranteeing a significant tax share to local communities with proper village woodland management schemes; (iii) defining clearly the roles and responsibilities of communes, the private sector, and NGOs in the production, control, and trade of woodfuels; (iv) encouraging price incentives for the development of alternative fuels to wood energy; (v) ensure that control and monitoring systems of fuelwood rural markets are efficient and effective; and (vi) diversification of productive activities in rural communities.
Sub-component B: Interfuel Substitution and Household Energy Efficiency. This sub-component will finance: (i) the scale up of improved stoves; (ii) the scale up of compact fluorescent lamps; and (iii) an information system on energy efficiency. A review of the implementation of the original project indicates that initiatives on kerosene stoves, LPG, wood briquettes, and evaporative air-coolers did not get an adequate response from users. These initiatives will not be scaled up by this Additional Financing. Only studies to further understand barriers to the adoption of these devices will be financed.
Sub-component C: Information, Education, and Communication. This sub-component will finance promotional campaigns to support the consolidation of woodland energy management initiatives and interfuel substitution and energy efficiency initiatives.
4. Project Location and salient physical characteristics relevant to the safeguard analysis
The physical activities will be carried out in peri-urban and rural areas of Mali.
5. Environmental and Social Safeguards Specialists
Ms Yvette Laure Djachechi (AFTCS)
Mr Amadou Konare (AFTEN)
6. Safeguard Policies Triggered / Yes / No /Environmental Assessment (OP/BP 4.01) / X
Natural Habitats (OP/BP 4.04) / X
Forests (OP/BP 4.36) / X
Pest Management (OP 4.09) / X
Physical Cultural Resources (OP/BP 4.11) / X
Indigenous Peoples (OP/BP 4.10) / X
Involuntary Resettlement (OP/BP 4.12) / X
Safety of Dams (OP/BP 4.37) / X
Projects on International Waterways (OP/BP 7.50) / X
Projects in Disputed Areas (OP/BP 7.60) / X
II. Key Safeguard Policy Issues and Their Management
A. Summary of Key Safeguard Issues
1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts:
Overall, the project is expected to have positive environmental benefits, World Bank’s environmental and social safeguards will be complied with by the privatesector operators involved in decentralized energy services delivery. The proposed scale up under the additional financing will not trigger any new social safeguard policy such as indigenous peoples, or environmental ones such as natural habitats.
2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area:
It is anticipated that there will be no cumulative adverse impacts.
3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts.
The global objective is to contribute to positive environmental impacts, it is expected that only minor adverse impacts will occur. Both the energy services delivery and the household energy components will undergo social and environmental assessments to identify mitigation measures for issues that could result in long term impacts.
4. Describe measures taken by the borrower to address safeguard policy issues. Provide an assessment of borrower capacity to plan and implement the measures described.
The safeguards for the original project are rated satisfactory and the project had no negative environmental or social impacts. The additional financing will strengthen the institutional arrangement for social and environmental management with the recruitment of an environmental expert at the project coordination unit. His main responsibility will be to ensure that environmental and social measures are more adequately taken into consideration in the processing of business plans for energy production.
5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people.
The Environmental and Social Management Framework and the Resettlement Policy Framework were reviewed and cleared by the Bank. They were disclosed by the info shop and in country on May 2, 2003 prior to appraisal of the original project. The borrower is currently implementing the original project within an Environmental and Social Management Framework and a Resettlement Policy Framework. These serve as basis to screen all sub-projects. Sub-projects presented by private operators will continue to be subject to environmental and social assessments based on the frameworks. In view of potential land acquisition and/pr loss of access to resources, the government will prepare the appropriate resettlement instrument based on recommendations of the Resettlement Policy Framework. Technical support will be provided to strengthen the systematic screening of sub-projects and the effective implementation of mitigations measures that might be necessary.
In order to facilitate the processing of safeguards documents and compliance with OP 4.12, the management of land acquisition issues in rural electrification operations will be based on standard practices in this sub-sector and namely: (i) the respect of sector regulations on land transfer for electricity production,; (ii) the description of the nature of land transactions and process of identifying specific project sites during implementation; and (iii) the documentation of land transfers ,when such new land acquisition is not likely to result in involuntary displacement. Otherwise a resettlement or abbreviated resettlement plan consistent with the RPF will be prepared and disclosed before sub-project financing. The likely scope of increased human and economic interactions as a result of the electrification in rural communities will be assessed; if this increase is also likely to induce the spread of STD, then appropriated management measures will be included in the environmental and social management plans (ESMP) of approved business plans for rural electrification.