INTEGRATED SAFEGUARDS DATA SHEET

CONCEPT STAGE

Report No.: AC4767

Date ISDS Prepared/Updated: 02/23/2010

I. BASIC INFORMATION

A. Basic Project Data

Country: India / Project ID: P102843
Project Name: Luhri Hydro Electric Project
Task Team Leader: Kwawu Mensan Gaba
Estimated Appraisal Date: December 15, 2010 / Estimated Board Date: March 31, 2011
Managing Unit: SASDE / Lending Instrument: Specific Investment Loan
Sector: Power (50%);Renewable energy (50%)
Theme: Infrastructure services for private sector development (100%)
IBRD Amount (US$m.): 650.00
IDA Amount (US$m.): 0.00
GEF Amount (US$m.): 0.00
PCF Amount (US$m.): 0.00
Other financing amounts by source:
Borrower 262.00
Local Govts. (Prov., District, City) of Borrowing Country 83.00
Financing Gap 155.00
500.00

B. Project Objectives [from section 2 of PCN]

The proposed development objectives of the project are:

i. Primary development objective is to increase the supply of clean, renewable, low-carbon and peaking energy to India's northern grid [and to enhance the reliability of the grid], and

ii. Secondary development objective is to further enhance SJVN Limited's (SJVNL) institutional capacity with respect to the preparation and safe implementation of technically sound and economically, environmentally and socially sustainable hydropower projects.

C. Project Description [from section 3 of PCN]

The proposed Luhri Hydro Electric Project (LHEP) is located on the Sutlej River in the state of Himachal Pradesh and is planned as a run-of-river project, downstream of the under construction 412 MW Rampur Hydropower Project (RHP). The project is to be implemented through a Special Purpose Vehicle (SPV), which will be a subsidiary of SJVNL in the form of a Joint venture (JV) with 49% equity share of Government of Himachal Pradesh (GoHP) and 51% of Government of India (GoI)through SJVNL. GoHP and SJVNL have not yet finalized the timing, whether during construction or during operation stage, for the formation of SPV and till the formation of SPV, SJVNL will be undertaking implementation of the project.

The project with 775 MW rated capacity will generate some 3,152 million units (in a 90% hydrologically dependable year); representing a valuable addition of peaking power to India's Northern grid, which is severely constrained by peaking shortages. The project will involve construction of 86 m high concrete gravity dam (with gross reservoir capacity of 35 million cubic meter) near the village of Nirath from which 38.14 km long twin tunnels of 9 m diameter would bring water to an underground power house at the village of Marola, about 40 km downstream of the dam site. The gross water storage capacity is equivalent to (only) about 5 hours on average (i.e. storage for meeting diurnal peak). All water diverted from the river will be returned to the river near the power house site. Adequate environmental in stream flows will be ensured. Therefore, hydrologically speaking, it is a run-of-the-river project. The project will also contribute to the development of the state of Himachal Pradesh, which will receive a royalty of 12% of the power generated in return for the use of its water resources, in addition employment creation and its share in dividends (as an equity partner in the project). An additional 1% of the free power revenue will be available for undertaking community development activities in the project area. The project will also provide 100 units of free electricity every month for 10 years (from the date of project commissioning) to the project affected families.

The different components of the LHEP are located along a 50 km stretch of the state highway and currently there is no proper access to the side of the river bank where the adits (for tunneling access)will be located. Given the amount of excavation anticipated, the widening of about 50 km of the existing state highway to a two-lane highway, diversion of 1.7 km of National Highway-22 at dam site and the construction of 10 new bridges over the Sutlej river (to connect the adits on the left bank with the project facilities on the right bank) are critical road infrastructure improvements for the successful implementation of this project. Presently, the project proposes widening of only about 8.8 kms of the 50 km long existing state highway to a two-lane road to ensure that project-related traffic movement does not disrupt traffic movement on this highway. This is likely to have attendant environment and R&R impacts. The project authorities have initiated a dialogue with the Himachal Pradesh Public Works Department (PWD) to undertake the road widening works adopting the safeguard policy framework that the PWD has adopted for a Bank-financed state road project in the state.

D. Project location (if known)

LHEP will be located on the Sutlej River in the three districts - Shimla, Kullu and Mandi in the State of Himachal Pradesh. It is planned as a run of the river project, downstream of the under construction 412 MW RHP.

E. Borrower’s Institutional Capacity for Safeguard Policies [from PCN]

The borrower-SJVNL has separate Environment and Social Cells at the Corporate Office, Shimla reporting to Directors (Civil and personnel) respectively. The social Cell consist of two professionals (Deputy General Manager and Manager) having familiarity with R&R and land acquisition aspects. The environment cell consists of three professionals (Deputy General Manager and two Assistant Managers) with experience of managing hydro projects of SJVNL. As the borrower has been associated with the Bank on the implementation of Nathpa Jhakri Hydro Electric and Rampur Hydropower projects, it has improved its capacity and experience with the implementation and monitoring of Bank's social and environment safeguard policies. The R&R, and community development activities and Environment Management aspects are successfully handled both at Nathpa Jhakri and Rampur projects. During the course of implementing the above projects, SJVNL has adopted and implemented its Corporate Environment Policy (CEP) and is in the process of developing its corporate R&R policy. In line with its CEP, the ongoing Rampur Project is implementing the ISO 14001 and OSHAS 18000 standards.

At the project level, the Land Acquisition Officer and support staff are deputed from the State Government to coordinate the land acquisition aspects. While the borrower has identified the need for creating R&R unit with staff consisting of a Manager, 2 officers and 2 Junior Assistants to manage R&R and community development activities, the environment unit is yet to be established. These units are expected to be in place over a period of 2-3 months.

F. Environmental and Social Safeguards Specialists

Mr I. U. B. Reddy (SASDS)

Mr Tapas Paul (SASDI)

Mr Harinath Sesha Appalarajugari (SASDI)

Mr Varun Singh (SASDS)

II. SAFEGUARD POLICIES THAT MIGHT APPLY

Safeguard Policies Triggered / Yes / No / TBD /
Environmental Assessment (OP/BP 4.01) / X
The Environmental Impact Assessment (EIA) report for the project is under preparation. The draft report identifies impacts due to acquisition of forest land, loss of vegetation, muck disposal and other construction activities. To mitigate these impacts, measures such as compensatory afforestation, Catchment Area Treatment (CAT), etc. have been suggested in the Environment Management Plan (EMP). Further, to strengthen the assessment, SJVNL has agreed to undertake additional studies to meet the Bank's Due Diligence requirements. The scope of these studies would be finalized once the revised EIA report is available.
Natural Habitats (OP/BP 4.04) / X
Forests (OP/BP 4.36) / X
Of the 301 ha of land required for the project, about 183 ha (61%) is forest-land. These forests will be lost. The direct losses of forests will be compensated through implementation of a compensatory afforestation plan. The indirect losses will be compensated through the catchment area treatment plan, and the additional afforestation work to be undertaken using the additional amounts paid by the project to reflect the loss in net present value of forests.
Pest Management (OP 4.09) / X
Physical Cultural Resources (OP/BP 4.11) / X
There is a Lakshmi Narayan Temple located near the proposed dam site and this is an Archeological Monument of Department of Archeology, GoI and SJVNL has approached the concerned agencies for their advice. In addition, SJVNL has been advised to carry out a comprehensive study on cultural properties in the project area and to include necessary mitigation measures in the project.
Indigenous Peoples (OP/BP 4.10) / X
The Social Assessment will study the presence and indigenous characteristics of any tribal families living in the project area to assess the applicability of OP4.10.
Involuntary Resettlement (OP/BP 4.12) / X
According to SJVNL estimates, the project would require 301 hectares of land - This includes 118 hectares of private land and 183 hectares of government forest land. It is provisionally estimated that 2337 families will be directly affected by private land acquisition and out of these, 37 families will be physically displaced due the project. The total population of the affected families is 9674 and the project is likely to affect around 24 villages directly and there are around 168 villages in the vicinity (within 10 km radius of dam and powerhouse). The land acquisition process has been initiated. To mitigate the adverse impacts associated with the land acquisition and resettlement, SJVNL is undertaking a study on "Social Impact Assessment and preparation of the Resettlement Action Plan and Community Development Program". SJVNL has opened two Public Information Centres (PICs) in the project area - at Sunni and Bithal -- to provide information about the project to the local people. It has also initiated small scale community development activities in the project area.
Safety of Dams (OP/BP 4.37) / X
The project will involve construction of 86 m high concrete gravity dam (with gross reservoir capacity of 35 million cubic meter equivalent to (only) about 5 hours on average i.e. storage for meeting diurnal peak).
Projects on International Waterways (OP/BP 7.50) / X
The River Sutlej (a tributary of the Indus) is an international river (lies in China, India and Pakistan). Neither the upstream or downstream impacts are expected to be significant. There is an existing dam upstream and downstream, particularly the major downstream reservoir at Bhakra. In addition, the Sutlej is one of the 3 eastern rivers defined by the Indus Water Treaty; and is earmarked for sole use by India. Therefore, the project should be of minor interest to upstream and downstream riparian countries.
Projects in Disputed Areas (OP/BP 7.60) / X

Environmental Category: A - Full Assessment

III. SAFEGUARD PREPARATION PLAN

A.  Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: 07/15/2010

B.  For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: N/A

C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing[1] should be specified in the PAD-stage ISDS.

The process for engaging consultants for carrying out Social Impact Assessment, Resettlement Action Plan and Community Development Plans is currently underway and the draft reports are expected to be available for Bank's review in May, 2010.

The Draft Environmental Impact Assessment Study is expected to be available for Bank's review by early February, 2010. Based on the above report, additional studies to meet Bank's due diligence requirements are expected to be commenced in April, 2010.

In addition to the above safeguard studies, the team proposes to carry out a diagnostic review of corporate environmental and social practices of SJVNL, as part of the project preparatory activities. Based on the recommendations of the above diagnostic review, suitable measures for strengthening / enhancing the institutional systems at SJVNL will be considered for inclusion in the capacity building component of the proposed project.

IV. APPROVALS

Signed and submitted by:
Task Team Leader: / Mr Kwawu Mensan Gaba / 02/17/2010
Approved by:
Regional Safeguards Coordinator: / Mr Sanjay Srivastava / 02/17/2010
Comments: cleared.
Sector Manager: / Mr Salman Zaheer / 02/23/2010
Comments: Cleared

[1] Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in-country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons.