ombined project information documents / integrated ......the world bank innovation in solar power...

The World Bank Innovation in Solar Power and Hybrid Technologies (P160379)

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Combined Project Information Documents / Integrated Safeguards Datasheet (PID/ISDS)

Appraisal Stage | Date Prepared/Updated: 22-Nov-2018 | Report No: PIDISDSA19764

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BASIC INFORMATION

OPS_TABLE_BASIC_DATA A. Basic Project Data

Country Project ID Project Name Parent Project ID (if any)

India P160379 Innovation in Solar Power and Hybrid Technologies

Region Estimated Appraisal Date Estimated Board Date Practice Area (Lead)

SOUTH ASIA 28-Nov-2018 29-Jan-2019 Energy & Extractives

Financing Instrument Borrower(s) Implementing Agency

Investment Project Financing Solar Energy Corporation of India Limited

Solar Energy Corporation of India Limited

Proposed Development Objective(s) The Project Development Objective (PDO) is to demonstrate the operational and economic feasibility of utility-scale innovative renewable energy technologies and battery energy storage solutions, and contribute to strengthen institutional capacity to facilitate scale-up of such technologies on a commercial basis in India.

Components

Component A: Investments in Innovative Renewable Energy Solutions (Estimated Cost: US$398 million of which IBRD Loan: US$150 million; CTF loan: US$28 million; and CTF Grant: US$20 million) Component B: Technical Assistance, Capacity Building, Implementation Support, Monitoring and Dissemination (Estimated Cost: US$2 million of which CTF Grant: US$2 million)

PROJECT FINANCING DATA (US$, Millions)

SUMMARY-NewFin1

Total Project Cost 400.00

Total Financing 400.00

of which IBRD/IDA 150.00

Financing Gap 0.00

DETAILS-NewFinEnh1

World Bank Group Financing

International Bank for Reconstruction and Development (IBRD) 150.00


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Non-World Bank Group Financing

Counterpart Funding 200.00

Borrower 200.00

Trust Funds 50.00

Clean Technology Fund 50.00

Environmental Assessment Category

B-Partial Assessment Decision

The review did authorize the team to appraise and negotiate

Other Decision (as needed) B. Introduction and Context

Country Context

India’s rapid economic development requires a power system that can continue to meet demand for better quality and cleaner electricity services for a growing population. It is among the top five fastest growing global economies and home to over one-sixth of the world’s population. Over the past decade, India’s annual average Gross Domestic Product (GDP) growth was over 7 percent, which drove average annual growth of peak power demand and energy demand to 5.1 percent and 5.5 percent, respectively.1 Already the third largest electricity consumer in the world, India’s electricity demand has significant headroom as its per capita electricity consumption is only one-third of the global average.

The Government of India (GoI) considers India’s low per capita electricity consumption a constraint on meeting its inclusive economic development objectives, including providing universal electricity access. Therefore, the supply and reliability of electricity services are a national priority. With major efforts, significant gains have already been made in expanding electricity access to over 80 percent of the population in 2016 from 56 percent in 2001.2 The GoI has an ambitious goal of providing uninterrupted power for all homes, industrial and commercial establishments, etc., through its 24x7 Power for All Program, targeting universal access to electricity by 2022.3

While India’s energy policy is based on energy security and self-sufficiency, the path India’s power sector will take has both local and global impacts given its scale and fuel mix. An ambitious power generation capacity expansion effort is underway to increase installed capacity to over 1,200 Giga-Watts (GW) by 2040

1 Calculated for 2007-2017. CEA (May 2017). “Growth of Electricity Sector in India from 1947-2017”. 2 IEA (International Energy Agency). 2016. “World Energy Outlook.” 3 NITI Aayog (27 June 2017). “Draft National Energy Policy”.


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from 334 GW in 2018.4 Under GoI’s draft National Energy Policy, coal power capacity in a business-as-usual scenario would grow from 194 GW in 20185 to 441 GW by 2040, unless clean energy initiatives are effective in bringing a supply alternative at scale and at lower cost. International Energy Agency (IEA) estimates suggest India would contribute more than any other country to the projected rise in global energy demand while its CO2 emissions are expected to triple between 2015-2040 (IEA, 2015).

Investments in clean power generation, energy efficiency, and electricity networks are critical to address local needs and India’s global commitments (Nationally Determined Contribution [NDC]). India’s NDC aims to increase to 40 percent the share of installed electric power capacity from non-fossil-fuel-based energy resources by 2030. This includes plans to more than quadruple the country’s (non-hydropower) renewable energy (RE) capacity to 175 GW by 2022 (which was upgraded to 227 GW in June 2018). The target requires up to US$220 billion in investments in generation, as well as substantial complementary investments in strengthening the electricity network.

Sectoral and Institutional Context The GoI has demonstrated its commitment to significantly increasing the share of RE in the country’s electricity generation mix. Over the past decade, utility-scale solar photovoltaic (PV) and wind power generation projects have successfully crowded in commercial investments from privately and publicly owned investors. India’s installed capacity of non-hydro renewables increased more than five-fold in a decade, from 11 GW in 2008 to 69 GW in 2018 (excluding about 45 GW in large hydropower capacity).6 In 2015, the GoI signaled confidence in RE by raising its national installed generation capacity targets to 175 GW by 2022, including targets for wind (60 GW), solar power (100 GW), biomass power (10 GW), and small hydropower (5 GW).

With a large resource potential, an increasingly supportive enabling policy environment, and favorable market trends, solar PV and wind power are expected to lead future large scale non-hydro RE capacity additions in India. By April 2018, wind (34 GW) and solar power (21.6 GW) comprise nearly 80 percent of total installed RE generation capacity.7 Competition through well designed auctions, declining component costs, enforcement of renewable purchase obligations, introduction of payment security mechanisms covering off-taker risk and other policy support have driven record prices of utility -scale solar PV and wind. For instance, the World Bank Group-supported 750 Mega-Watt (MW) Rewa Solar Park Project in Madhya Pradesh delivered a record-making levelized cost of energy (LCOE) of INR 3.3/kWh (or USD 0.05 /kWh) through a reverse auction.

As the share of renewables increases, India’s wind and solar power sectors are expected to face new constraints. First, the significantly higher share of variable RE will increase grid management challenges, requiring more ancillary services, back up supply, load shifting capabilities and improved RE generation system performance. Second, curtailments that lead to under-utilized evacuation infrastructure will rise if poor forecasting practices, disincentives to optimize designs, under-developed ramping arrangements, removing transmission bottlenecks and other related challenges are not dealt with. Third, critically, suitable land will become scarce – sites with the ‘best’ RE resources and with easy access to land are being

4 Source: Table 9, Draft National Energy Policy, Niti Aayog. Two scenarios presented are business-as-usual: 1204 GW total, Ambitious: 1260 GW total. 5 CEA (31 January 2018). “All India Installed Capacity (in MW) of Power Stations”. 6 Executive Summary of Power Sector, April 2008 to March 2018, CEA 7 Executive Summary of Power Sector, March 2018, CEA


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taken up. Yet, land acquisition requirements for stand-alone solar (about 5 acres per MW) and wind (about 8-10 acres per MW) suggest vast land needs to meet RE targets.8 Only eight states (Andhra Pradesh, Gujarat, Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Kerala and Tamil Nadu) comprise 97.5 percent of India’s installed wind power capacity, further limiting available land resources for wind development.9 Fourth, Climate Change-related risks are likely to affect inter-annual and seasonal trends in RE resource availability, adding to state and regional dispatch coordination challenges. Fifth, while the GoI is working to resolve financing conditions of distribution utilities in the medium term, off-taker risk makes investors and financiers rely on precedents and take conservative positions when viewing new business models that may be necessary to introduce innovative solutions to emerging challenges.

The GoI is exploring innovations, such as wind-solar hybrid (WSH) parks, floating solar PV (FSPV) and combining these with battery energy storage solutions (BESS), to address emerging challenges. As WSH systems are configured to operate at one point of interconnection, and can have complementary generation patterns (diurnal and seasonal), they can improve the generation profile per unit of land and optimize use of associated evacuation infrastructure as compared to stand-alone RE plants.10 Noting that there are large areas of India where both resources have such potential, the GoI recently issued a policy that opens the door to investing in wind-solar PV hybrid systems with a BESS option.11 Under the policy, the fiscal and financial incentives granted to stand-alone wind and solar PV are being extended to WSH. With regard to FSPV, it can help to ease pressure on land resources by placing the RE plant on water bodies. Preliminary studies suggest that utilization of just 10 percent of India’s water bodies would allow for the development of about 300 GW of FSPV generation capacity.12 Additional advantages of the technology include optimizing utilization of existing power evacuation infrastructure, improved efficiencies of PV panels due to a surface water cooling effect, lowering PV panel cleaning requirements, and potentially reducing evaporation. All considered, FSPV is not expected to differ significantly in terms of levelized cost of electricity from ground-mounted fixed-tilt solar PV13. Despite all these benefits, there is no large scale WSH in operation and the uptake of FSPV in India has been modest, with installations ranging between 10 kilowatts (kW) and 500 kW.

BESS can provide a range of transformative benefits to the power system, some coupled to RE generation while others supporting network functions. Lack of a track record in the Indian power system, high costs and an under-developed enabling environment limit the deployment of BESS. BESS is viewed increasingly by the GoI and across South Asia as an enabling technology for a range of constraints being faced by their power systems specifically due to increase in deployment of variable RE. Due to its scalability in energy storage and output, grid-scale BESS can enable firmer output of variable RE. BESS can contribute towards smoothening the load curve and shifting the peak, potentially replacing some investments in relatively expensive peak generation. BESS can also substitute or defer the transmission requirements and enhance resilience of the grid. Interest in BESS has converged with other planned transformations of India’s energy

8 On a footprint basis, however, the land acquisition requirements for wind are much lower. Nevertheless, the estimate factors in safety zones, access roads and ancillary facilities required for a wind power plant. 9 National Institute of Wind Energy (March 2016). “Wind Power Installed Capacity (MW) in India”. 10 A study conducted by the Reiner Lemoine Institute and Solarpraxis AG concluded that combining wind turbines and PV systems results in generating up to twice the amount of electricity across the same surface area, while shading losses caused by wind turbines amount to just 1–2 percent. 11 Refer: https://mnre.gov.in/sites/default/files/webform/notices/National-Wind-Solar-Hybrid-Policy.pdf (May 14, 2018). 12 According to a preliminary assessment of Renewable Energy College, Kolkata. 13 World Bank Group, ESMAP and SERIS 2018. Where Sun Meets Water: Floating Solar Market Report – Executive Summary. Washington, DC: World Bank.

https://mnre.gov.in/sites/default/files/webform/notices/National-Wind-Solar-Hybrid-Policy.pdf


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and transport sectors, including deployment of distributed renewables, smart meters and electric vehicles. While these capabilities are attractive to the Indian power system, its ecosystem does not support revenue streams to defray (still-high, but falling) BESS costs largely because there is no consensus among stakeholders regarding how to facilitate a BESS market to capitalize on its economic potential. Early attempts at auctions have been disappointing as a result.

The GoI has appointed the Solar Energy Corporation of India Ltd. (SECI) to implement a wide range of support schemes to help achieve its ambitious RE targets, including the development of innovative clean energy solutions such as WSH, FSPV and BESS. SECI is the only Central Public Sector Undertaking (CPSU) with a mandate from the GoI to undertake its own investment and facilitate commercial participation in RE market development through auctions. As higher RE targets are set and the market encounters new barriers, demands on SECI to promote and quickly bring innovative solutions to the market are increasing. The GoI is using this Project to support SECI’s institutional capacity as a market facilitator of accelerated and innovative RE deployment. SECI will leverage World Bank Group (WBG) and Clean Technology Fund (CTF) resources for commercial test beds to bring wind and solar expertise together for the first time – to work through technical and commercial design issues in WSH and FSPV investments, and integrate demonstration of currently non-commercial BESS solutions. The demonstration of these subprojects will help to build up track records of performance that will be disseminated to investors, financiers and policy makers. SECI will also use this knowledge to improve the structuring of its auctions and enhance the likelihood of their success for WSH and FSPV systems. The Bank and IFC’s advisory group are coordinating support to SECI to enhance learnings from such subprojects, support SECI’s market facilitation role and improve its auction platform.

C. Proposed Development Objective(s) Development Objective(s) (From PAD) The Project Development Objective (PDO) is to demonstrate the operational and economic feasibility of utility-scale innovative renewable energy technologies and battery energy storage solutions, and contribute to strengthen institutional capacity to facilitate scale-up of such technologies on a commercial basis in India.

Key Results The following indicators will be used to track progress in achieving the PDO. The specifics regarding the key performance as well as intermediate results indicators are detailed in Section VII. (a) Cumulative installed RE capacity (in megawatt [MW]) (b) RE power generation (in megawatt hours [MWh]) (c) GHG emissions avoided (tones/year) (d) Regulations, codes or standards for battery energy storage solutions issued (e) Each solution (hybrid, floating solar PV and battery energy storage) demonstrated at least once

through subprojects. D. Project Description

1. The ISHTP will support SECI, as the implementing agency (IA) and borrower of funds, to finance innovative RE and BESS subprojects to demonstrate applications that can be deployed at a large scale in India’s power system, and build SECI’s market facilitation capacity in a rapidly evolving RE market through


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monitoring and disseminating its experience in design, construction, operation and contractual arrangements to renewable market stakeholders in India. The proposed project has two components:

Component A: Investments in Innovative Renewable Energy (RE) Solutions (US$398 million equivalent)

2. The Component will support innovative RE and BESS subprojects. The scope of subprojects will be defined based on-site requirements, including: (a) site development (including site identification, feasibility and environmental studies, land acquisition and resettlement, obtaining permits); (b) construction of RE power plants and BESS, including design, supply and installation of equipment, associated civil works, construction of ancillary infrastructure; (c) construction of power evacuation and other common infrastructure (i.e. road access, water supply); and (d) operation and maintenance (O&M) contracts. An ISHTP Operations Manual (OM) sets investment criteria for subprojects. The estimated cost of this component is US$398 million, which includes US$150 million from the World Bank, US$28 million from the CTF loan, US$20 million from the CTF grant, and US$200 million from SECI. The eligible subproject typologies are:

(a) Utility-Scale Hybrid Subprojects: (about 300 MW targeted) The ISHTP will finance large-scale greenfield hybrid solutions, combining wind, solar or BESS technologies that are tailored to meet site-specific requirements. Subprojects are expected to demonstrate benefits for the Indian power system, including better capacity utilization factors, reducing variability of RE power plants (i.e. due to the relative diurnal and seasonal complementarity of solar and wind resources), and optimizing use of power evacuation infrastructure. The first subproject has been appraised and comprises about 35 percent of IBRD/CTF financing:

160 MW Solar PV-Wind Power Plant with BESS Subproject in Ramagiri, Andhra Pradesh (AP)

(‘Ramagiri WSH Subproject’)

This is the first project of its kind in India and at this scale in the world. The subproject comprises the

design, construction, and O&M of co-located 120 MW solar PV, 40 MW wind power, 10 MW/22 MWh

BESS, associated infrastructure, and control and energy management systems. It is located on about

900 acres in the Ramagiri and Muthavakuntla villages, Anantapuramu district of AP, a wind and solar

resource-rich province. The WSH power will be transmitted to a 220/33 kilovolts (kV) pooling

substation (PSS) through a 33 kV transmission line and evacuated via a double circuit (D/C) 220 kV

transmission line to the 400/220 kV Hindupuramu substation that is located about 45 km from the

PSS site. The PSS, 220 kV evacuation line and interconnection with the Hindupuramu substation are

being constructed by the AP Transmission Company (APTRANSCO) under the GoI’s Green Energy

Corridor Project, that aims to remove transmission bottlenecks for RE. The Andhra Pradesh Southern

Power Distribution Company, Ltd. (APSPDCL) will be the sole off-taker under a long-term power

purchase agreement (PPA) signed with SECI. The BESS is installed to demonstrate use cases which

benefit the generator: avoiding curtailment, minimizing deviation settlement mechanism penalties

due to forecasting/scheduling errors, and piloting ramp rate control benefits.

(b) BESS Subprojects: (about 40 MWh targeted) The ISHTP will finance BESS applications integrated with other RE generation technologies or providing grid services enabling improved use of power. As this


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technology is not yet commercially viable, selection of subprojects will be determined inter alia by the use cases most likely to be deployed at large scale in the Indian power system including time shifting, capacity firming, ramp rate control, and frequency regulation, and by the ability under existing regulations to recover at least part of the costs of the BESS. A US$20 million CTF grant has been allocated to partially defray the costs of these subprojects. The first BESS application is integrated with the above-mentioned 160 MW Ramagiri subproject in AP.

(c) Utility-Scale FSPV Subprojects: (about [100] MW targeted) The ISHTP will finance FSPV power plant subprojects – solar PV systems installed on synthetic floating beds anchored to the bottom or on the shore of selected water bodies. Sites will be selected where there is high demonstrative value, such as near existing associated infrastructure such as reservoirs of the operating dams or sites where the land is either unavailable or too expensive. Based on initial discussions by SECI in multiple states including AP, Kerala and Tamil Nadu, the target capacity estimate of a potential pipeline of subprojects ranges from 20-100 MW.

Component B: Technical Assistance, Capacity Building, Implementation Support, Monitoring and

Dissemination (US$2 million equivalent)

3. This component is financed by the CTF grant and will support technical assistance, studies, workshops, training, study tours, and other capacity building and dissemination activities, including (but not limited to):

(a) Support to policy and regulatory proposals, stakeholder consultations and knowledge sharing activities to facilitate scale-up of innovative technologies. This will be done through workshops, seminars, knowledge products, and other dissemination activities critical to informing regulators, policy makers, and the private sector and reducing market information barriers.

(b) Activities for ISHTP subproject development and management, including activities associated with identification of sites, preparation of environmental, feasibility, and other subproject preparation studies, due diligence for land acquisition and resettlement, bid document preparation, safeguards and project monitoring, project management consulting services, and owner’s engineer (OE) services.

(c) Capacity building and institutional development to support implementation of SECI’s business plan (under revision). This is SECI’s first comprehensive forward-looking business plan, including a human resources plan. A rolling capacity building plan financed from TA resources will be agreed after its approval by SECI management and can include a range of inputs to strengthen SECI’s core functions and business lines, including project management, monitoring, engineering, procurement and contract management, O&M, financial management and organizational and process management.

E. Implementation

Institutional and Implementation Arrangements

SECI will be the borrower, grant recipient, and IA of this project. The Bank will sign loan/financing agreements directly with SECI with a guarantee from the GoI. SECI will be responsible for ensuring that


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investments meet criteria set out in the project’s OM, which details eligibility criteria, technical, fiduciary and safeguards requirements, investment decision guidelines, monitoring and evaluation (M&E) requirements, and institutional and implementation arrangements for the project and reporting the same to the GoI and the World Bank. The operations manual, satisfactory to the Bank, is being prepared by SECI and will be finalized by negotiations.

SECI is under the administrative control of the Ministry of New and Renewable Energy (MNRE) which is the nodal ministry responsible for achieving the GoI’s RE targets. MNRE will continue to provide overall policy guidance and will support SECI in a manner possible to ensure that the lessons from this project are internalized by other government agencies and market stakeholders.

SECI, a CPSU, was established on September 20, 2011, to facilitate the implementation of the National Solar Mission (NSM). In June 2015, SECI was converted to a commercial company involved in investing, trading and consultancy services in RE. It is the only CPSU dedicated for RE sector project implementation and is the largest off-taker of solar power in India. SECI has experience in implementing a wide range of instruments to implement RE policies and foster market development. It is responsible for the first and subsequent Viability Gap Financing (VGF) schemes for a cumulative planned solar power generation capacity of 12 GW, of which 4.7 GW worth of PPA has been signed (of which 2.7 GW has been commissioned and the balance 1.9 GW is under implementation). SECI has also auctioned 8 GW in wind power generation capacity in 2017-18 achieving record bids. Of these 4 GW contracts have been signed and awarded for implementation. In these schemes, SECI acts as an offtaker of the procured solar and wind power and subsequently sells the pooled power to distribution utilities under long-term power sale agreements. SECI is also implementing schemes to support rooftop solar PV projects, solar park schemes (through joint ventures [JV] with various state nodal agencies), and has implementation experience either as a project management consultant or as a developer for investments similar to the expected ISHTP subprojects, with a cumulative capacity of 75 MW.

The ISHTP is overseen by the Managing Director while SECI’s Director (Power Systems) has overall responsibility for its implementation. The ISHTP’s key management functions are assigned across the organization under the supervision of respective Department Heads. For Component A, teams are organized for the preparation of subprojects, including DPRs, ESIAs, Bid Documents and Financing. Bid document preparation, management of DSI (including O&M) contracts and other aspects of subproject implementation will be undertaken by SECI’s contracts department with the support of an owner’s engineer (OE) in the case of the first subproject. Bid documents are reviewed by technical and financial departments before approval. Adjustments to team compositions are made depending on need of the subproject. Component B implementation will be overseen by the Departments which are the beneficiaries of the support. Dissemination activities will be designed and organized by Corporate Planning department of SECI, which is also responsible for preparing the ISHTP project progress monitoring reports (including KPIs). ISHTP institutional arrangements are also defined in the ISHTP operations manual.

. F. Project location and Salient physical characteristics relevant to the safeguard analysis (if known)

The project will be implemented across India in several states, most of which are currently unknown except one site in Andhra Pradesh (AP). These would however be located in areas away from population and where


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sunshine and wind are likely to be of high intensity, or water bodies where there are few hindrances. The first identified site, where a 160 mega-watt (MW) Hybrid Park and battery energy storage solutions (BESS), along with a transmission system to connect with the state grid, are proposed to be supported is located in Ramagiri and Muthavakuntla villages of Anantapuramu district of AP in Southern India, which lies in the rain-shadow area of AP. It is the largest district of AP spanning an area of 19,130 square kilometres (7,390 sq mi). It is part of Rayalaseema region of the state. Its northern and central portions are a high plateau, generally undulating, with large granite rocks or low hill ranges rising occasionally above its surface. In the southern portion of the district the surface is more hilly, the plateau there rising to 2,000 ft (610 m) above the sea. The district receives an average annual rainfall of 381 millimetres. Plant location is in a rocky, gently undulating area with outcrops and little vegetation. Some vegetation exists along the small seasonal streams that run through the site. These streams drain into tanks which provide water for the local people. There is a small patch of forest through which the transmission line may need to pass, but its value from a conservation/biodiversity perspective is quite limited. The proposed transmission line passes through primarily agricultural land of Ramagiri, C K Palle, Somaddapalle, Roddam and Penukunda Mandal of Anantapuramu district.

G. Environmental and Social Safeguards Specialists on the Team

Gaurav D. Joshi, Environmental Specialist Parthapriya Ghosh, Social Specialist

SAFEGUARD POLICIES THAT MIGHT APPLY

Safeguard Policies Triggered? Explanation (Optional)

Environmental Assessment OP/BP 4.01 Yes

OP/BP 4.01 is triggered, since project impacts are likely due to all the investments in infrastructure. While the footprint will be limited given the choice of technology, and little transport requirements in operation, there will be different environmental media directly affected. Moreover, the long term impacts of new technologies like Floating solar photovoltaics (PV) and large scale battery energy storage solutions (BESS) need to be assessed more intensely. Since all the subprojects have not been identified yet (except one subproject in Ramagiri in Andhra Pradesh), a framework approach has been adopted


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and an Environmental and Social Management Framework (ESMF) has been prepared to guide the subsequent project preparation. SECI has led the preparation of ESMF while Environment and Social Impact Assessment (ESIA) studies (including Environment and Social Management Plan [ESMP]) has been contracted out. The ESMF was disclosed in-country and on Bank’s website on November 16, 2018. A detailed terms of reference (ToR) of the ESIA has also been incorporated into the project ESMF. The ESMF also provides for checklists and generic ESMP. ESIAs commensurate in scope and coverage with anticipated impacts will be conducted as more investment opportunities are identified. ESIA for the already identified investment for the Hybrid Solar Park and BESS, along with transmission facilities connecting the site to the grid, has been completed and is being reviewed by the Bank. To address health and safety issue, the project will also follow the WBG environment, health, and safety (EHS) guidelines. ESMF will continue to serve as the guiding document/ manual for the entire project activities during implementation.

Performance Standards for Private Sector Activities OP/BP 4.03

No This Policy is not triggered

Natural Habitats OP/BP 4.04 Yes

This Policy is triggered since this project should not be constrained by the presence of sensitive locations like Natural Habitats. The ESIA ToR included in the ESMF provides for necessary expertise to be deployed to prepare the plans required to address concerns relating to Natural Habitats, if in case these are present in any potential subproject that is identified later.

Forests OP/BP 4.36 Yes

This policy has been triggered as there could be forests located within project areas, for instance as along the proposed transmission line for the identified subproject. However, it is clarified that there is no commercial logging operation to be supported by the project, except for clearance of right-of-way (RoW) as provided under applicable regulation.


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Mitigation aspects have been covered in the assessment (part of ESIA), and specific ESMP in line with Indian requirements. The country/state systems are robust to manage the impacts associated and will be followed for the project.

Pest Management OP 4.09 No

The Project does not involve the purchase or increased use of pesticides. Nor does it envisage agriculture expansion or vector borne disease control. Hence, this policy is not triggered.

Physical Cultural Resources OP/BP 4.11 Yes

The project will involve civil works and therefore there is a chance of finding important cultural resources during construction activities. As not all the sites are identified at this stage, such potential subprojects could be close to important resources. Therefore, this policy has been triggered.

Indigenous Peoples OP/BP 4.10 Yes

Since, subprojects will be spread all across the country, some locations may have presence of indigenous population, hence this policy has been triggered. Project has prepared Indigenous Peoples Planning Framework (IPPF) that has the mechanism for their inclusion through preparation of Indigenous Peoples Development Plan (IPDP). No indigenous population was identified during social assessment of Ramagiri Hybrid subproject and associated transmission line.

Involuntary Resettlement OP/BP 4.12 Yes

While the government plans to prioritize the use of state-owned unproductive land for innovative solar and hybrid technologies, resettlement of communities settled on government land may be required. Additionally, there is a possibility for acquiring private land for such subprojects. Since the exact locations of all subprojects is not known yet and alignment of the linked transmission line may change during project implementation phase, project has prepared Resettlement Policy Framework (RPF). The RPF provides guidance on the procedures to be followed to minimize involuntary resettlement where feasible through exploring all viable alternatives project designs; and assist displaced persons in improving their former living standards, income earning capacity, and production levels, or at least in restoring them; encourage community participation in planning and implementing resettlement; issues related to labor influx during construction period, and provide


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assistance to affected people regardless of the legality of title of land. The RPF shall provide guidelines for the preparation of Social Impact Assessment (SIA) and subproject specific Resettlement Action Plans (RAPs) as applicable. The Ramagiri Hybrid subproject and associated transmission line is the only identified subproject so far. Subproject specific ESIA along with ESMP and RAP have been prepared and being reviewed by the Bank. The park will take assigned land from 216 households while another 333 households will be affected by the restrictive use of land coming under RoW of transmission line. All land owners will be compensated and assisted as per the project specific entitlement matrix.

Safety of Dams OP/BP 4.37 Yes

While the project is not supporting any dam construction or rehabilitation, it is possible that Floating Solar Photo Voltaic (FSPV) sub-projects could be installed in reservoirs created by dams. Hence, this policy has been triggered. In order to comply with its requirement, a dam safety analysis report will be prepared and shared with the Bank which will determine suitability of the site based on the findings and recommendations of that report. Any FSPV sub-project on a given dam will be supported upon confirmation as per the Dam Safety Report that there are no major issues associated with the relevant Dam (that resulted in the formation of the waterbody) as defined by the Dam Safety Policy of the Bank. SECI shall follow the ESMF wherever relevant to ensure the Dam Safety Report is prepared by a qualified dam safety expert following terms of reference agreed with the Bank.

Projects on International Waterways OP/BP 7.50

No This Policy is not triggered

Projects in Disputed Areas OP/BP 7.60 No This Policy is not triggered. No subprojects in disputed areas are envisaged.


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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: ENVIRONMENT IMPACTS: There is a good case to be made for positive impact, such as reducing harmful air emissions, of deploying innovative renewable energy generation and storage technologies. Given this, it is equally important that such innovations necessarily require better risk management than conventional approaches as explained below. Key issues pertain to the use of advanced and new technology – handling of potentially hazardous chemicals (in large batteries, for instance) and material (in solar panels, etc.) – as well as conventional impacts of construction of heavy infrastructure – relating to ground development, changes to land use, health and safety concerns for the workers on – site as well as other users of the area, and facilities like roads that the project would use for construction period transport as well as operation and maintenance. In addition, construction period would also see issues related to labor influx especially those due migrant male labor. In addition, in more sensitive locations, permanent changes to land use may be an issue. It is noted that for wind and solar PV plants, this may be limited given the smaller foot print, and isolated locations that are normally associated with such facilities. While the extent is large, for each MW of PV about 4-5 hectares of land is required while for each MW of wind turbine about 8-10 hectares (this is much lower on footprint basis) is required. Of course, between wind turbines, in no-shadow areas, solar PV panels would be installed so there would be reduced foot print than in standalone solar or wind plants. But land area requirement is large. In addition, handling material containing hazardous substances and their disposal in case of damage or end-of-life also has also potentially significant impacts given the quantities involved. While some of these are long term, mostly reversible as the land use change can be reversed by removing the solar panels, which are usually mounted on frames. In addition, floating solar plants may have potential impacts on the aquatic ecology that need to be assessed and if identified then monitored and mitigated. However, the installed floating plants so far have not reported any negative impacts. In addition, there would be anticipated impacts of conventional activities like installation of batteries, transformers, transmission lines, and other ancillary facilities. New transmission line/replacement of overhead wires, could have an impact on forest within the ROW of transmission line and substation sites, any incidental impacts on local fauna, localized drainage issues where substation construction may impede drainage, safety of workers and near-by residents. The operational phase impacts could arise from indiscriminate use and disposal of batteries, transformer oil, e-waste and in case of circuit breaker and handling of impacts form SF6. Most of these Environmental impacts are likely to be site-specific and reversible in nature where, mitigation measures are put in place through safeguards tools and can be managed to reduce these negative impacts of the interventions. For the Ramagiri site, the identified likely impacts are limited to the changes in the local drainage pattern and construction period issues related to health and safety of workers and other site users. For operation phase, there could be impacts due to spillage of chemicals, safe working procedures not being followed, etc. SOCIAL IMPACTS:


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The ESIA carried out for Ramagiri subproject shows that the project will acquire 928 acres of land for park area and another 379 acres of land will come under ROW of transmission line, which will have an adverse impact on 549 families (2518 project affected persons [PAP]). The total numbers of affected families in the Hybrid Park is 216 consisting of 862 PAPs and total number of families in the core zone of Transmission Lines is 333 consisting of 1656 PAPs that are affected due to restrictive use of land under right of way of transmission line. During the field survey and village level consultations, it was found that approximately 90% of the households in the core zone have mortgaged their assigned patta land against crop loans. The land impacted by the park area though has been assigned for cultivation, it is completely barren due to undulating rocky surface and lack of irrigation facility. The land under the alignment of transmission line however is agriculture land. No common property resources or religious structure will be affected by this subproject. The socio-economic breakup of these families shows that amongst the 549 affected families, 68 families are Scheduled Caste, and 23 families are Scheduled Tribe (ST). The ST families are mainstreamed with the dominant culture and society in that area and hence, World Bank’s Policy OP/BP 4.10 for Indigenous People has not been triggered. An Entitlement Matrix has been agreed upon in the RPF as part of ESMF. A Resettlement Action Plan (RAP), in accordance with RPF has been prepared to mitigate any adverse social impact on families within the Hybrid Park and Transmission Line alignment. The Entitlement matrix and RAP also include gender-specific implication of land taking. Special emphasis has been given to women headed households and their special needs/availability/vulnerabilities. Clear strategies to mitigate any adverse social impact on women has been developed based on the gender analysis. 2. Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area: None. 3. Describe any project alternatives (if relevant) considered to help avoid or minimize adverse impacts. Realistically, the locations of subprojects are constrained by the availability of wind resources and sunshine. However, these are sited where large land parcels are available to achieve economies of scale. So, the analysis of alternatives concentrates on the technology that could be deployed, which again is limited by environmental conditions – wind speed as well as persistence and insolation. However, for each ESIA a no-project scenario would be analysed in line with the ESMF stipulation. In case of transmission lines, following criteria were adopted: (a) Forest land as identified on the Survey of India topo-sheet should be as less as possible; (b) Settlement along the alignment should be as low as possible; (c) Technical constraints such as crossing e.g. rivers, railways , roads should be as low as possible For Ramagiri subproject, the alternatives were identified on the Survey of India 1: 50,000 toposheet by the project and was provided for analysis of the environmental and social concerns. While carrying out the analysis of alternatives efforts were made to identify the line which would cause minimum disturbance to the forest area. In addition individual houses along the alignment within 50 m of proposed alignment were also enumerated along with other parameters. The environmental and social information along the alternative alignments were collated and the Analysis of Alternative has been documented in the ESIA for the identified project site. 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. SECI has the responsibility to implement the project in line with the Bank policies. It has developed a guidance


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document in the form of its Environmental and Social Management Framework (ESMF) that will assist the implementation of specific subprojects as they get identified. This guidance builds on review of existing solar park projects, and smaller floating solar projects being already operated by other entities. It also takes into account the large scale of operations that will be required to handled by SECI in running such subprojects. SECI will issue engineering, procurement and construction (EPC) contracts in which the selected contractor will be responsible for actual implementation of measures on the ground. To address safeguards requirements, the ESMF includes Resettlement Policy Framework (RPF), Indigenous Peoples Planning Framework (IPPF), and generic Environmental and Social Management Plan (ESMP). ESMF also includes Terms of Reference for site-specific ESIA as well as screening criteria for sites, with specific reference to important environmental features, especially for Floating Solar Photo Voltaic projects. The first subproject specific ESIA for Ramagiri site has been carried out through specialized consultants and has resulted in an ESMP from which relevant portions have been included in the contract documentation. In addition, as part of the instruction to the bidders for the transmission line, the possibility of avoiding the small forest patch identified along alignment has been included. Since only one sub project has been identified so far, ESIA was carried out and based on the results of ESIA, ESMP and RAP has been prepared for both the park area as well as for the transmission line. Sub-project specific RAPs for both park area and transmission line have been prepared and disclosed. ESMF, RPF and IPPF have also been disclosed. The process followed for preparation of the safeguard documents is participatory and facilitative with emphasis on information sharing, consultation and feedback. In the long run, the entities will ensure training and capacity building of staff to undertake environmental and social development and safeguards activities. The institutional capacity within SECI is weak for safeguards management but with the hiring of full-time staff, it is currently being augmented. Since this is the first project SECI is working on with World Bank, it will also require support in capacity in the operationalization of the ESMF, training and capacity building programs for its own staff, as well as contractors who will be used for project implementation. 5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people. “Stakeholder mapping” was carried out during the ESIA preparation for Ramagiri subproject to study the profile of the stakeholders identified and the nature of the stakes; understand each group’s specific issues, concerns as well as expectations from the project that each group retains; and gauge their influence on the project. National level consultations on ESMF was conducted to take feedback of wider stakeholders before finalization of ESMF. Consultations with the identified stakeholders were carried out during the preparation of ESIA at the subproject level for Ramagiri site. The consultations will be continued during the construction and operation phases of the project. Issues like land and resource damage, social disturbance, severance and increased congestion, noise and air pollution, employment opportunities, need for development of basic infrastructure, safe drinking water, sanitation facilities etc. were discussed during the consultations . The consultations also helped in developing preliminary understanding of the requirement of social development initiatives required. The final ESMF and RAPs have been disclosed both in country as well as on the Bank’s IDU on November 16, 2018.


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B. Disclosure Requirements

OPS_EA_DISCLOSURE_TABLE Environmental Assessment/Audit/Management Plan/Other

Date of receipt by the Bank Date of submission for disclosure For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors

12-Nov-2018 16-Nov-2018

"In country" Disclosure

India 16-Nov-2018

Comments

OPS_RA_D ISCLOSURE_T ABLE

Resettlement Action Plan/Framework/Policy Process

Date of receipt by the Bank Date of submission for disclosure

31-Oct-2018 16-Nov-2018

"In country" Disclosure India 16-Nov-2018

Comments

OPS_IP_DIS CLOSURE_TA BLE

Indigenous Peoples Development Plan/Framework

Date of receipt by the Bank Date of submission for disclosure

30-Oct-2018 16-Nov-2018

"In country" Disclosure

India 16-Nov-2018

Comments

C. Compliance Monitoring Indicators at the Corporate Level (to be filled in when the ISDS is finalized by the project decision meeting)

OPS_EA_COMP_TABLE


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OP/BP/GP 4.01 - Environment Assessment Does the project require a stand-alone EA (including EMP) report? Yes If yes, then did the Regional Environment Unit or Practice Manager (PM) review and approve the EA report? Yes Are the cost and the accountabilities for the EMP incorporated in the credit/loan? Yes

OPS_ NH_COM P_TA BLE

OP/BP 4.04 - Natural Habitats Would the project result in any significant conversion or degradation of critical natural habitats? NA If the project would result in significant conversion or degradation of other (non-critical) natural habitats, does the project include mitigation measures acceptable to the Bank? NA

OPS_ PCR_COM P_TA BLE

OP/BP 4.11 - Physical Cultural Resources Does the EA include adequate measures related to cultural property? Yes Does the credit/loan incorporate mechanisms to mitigate the potential adverse impacts on cultural property? Yes

OPS_IP_COM P_TA BLE

OP/BP 4.10 - Indigenous Peoples Has a separate Indigenous Peoples Plan/Planning Framework (as appropriate) been prepared in consultation with affected Indigenous Peoples? Yes If yes, then did the Regional unit responsible for safeguards or Practice Manager review the plan? Yes If the whole project is designed to benefit IP, has the design been reviewed and approved by the Regional Social Development Unit or Practice Manager? No

OPS_IR_ COMP_TA BLE

OP/BP 4.12 - Involuntary Resettlement

Has a resettlement plan/abbreviated plan/policy framework/process framework (as appropriate) been prepared? Yes

If yes, then did the Regional unit responsible for safeguards or Practice Manager review the plan? Yes

OPS_F O_COM P_TA BLE

OP/BP 4.36 - Forests


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Has the sector-wide analysis of policy and institutional issues and constraints been carried out? Yes Does the project design include satisfactory measures to overcome these constraints? Yes Does the project finance commercial harvesting, and if so, does it include provisions for certification system? No

OPS_SD _COMP_ TABLE

OP/BP 4.37 - Safety of Dams Have dam safety plans been prepared? No Have the TORs as well as composition for the independent Panel of Experts (POE) been reviewed and approved by the Bank? No Has an Emergency Preparedness Plan (EPP) been prepared and arrangements been made for public awareness and training? No

OPS_ PDI_ COMP_TA BLE

The World Bank Policy on Disclosure of Information

Have relevant safeguard policies documents been sent to the World Bank for disclosure? Yes Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? Yes

All Safeguard Policies

Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Yes

Have costs related to safeguard policy measures been included in the project cost? Yes

Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Yes

Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? Yes


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CONTACT POINT

World Bank

Surbhi Goyal Senior Energy Specialist

Gailius J. Draugelis Lead Energy Specialist

Borrower/Client/Recipient


Jatindra Nath Swain

Managing Director

[email protected]

Implementing Agencies


Jatindra Nath Swain

Managing Director

[email protected]

FOR MORE INFORMATION CONTACT

The World Bank

1818 H Street, NW

Washington, D.C. 20433

Telephone: (202) 473-1000

Web: http://www.worldbank.org/projects

APPROVAL

Task Team Leader(s): Surbhi Goyal Gailius J. Draugelis

Approved By

Safeguards Advisor:

http://www.worldbank.org/projects


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Practice Manager/Manager: Demetrios Papathanasiou 26-Nov-2018

Country Director: Hisham A. Abdo Kahin 26-Nov-2018