E4212v1

Energy Small and Medium sized EnterpriseSub-Saharan Africa Trust Fund

The World Bank

December 2012

Environmental and Social

Management Framework

KENYA

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This Environmental and Social Management Framework (ESMF) was developed by GVEP, with the support of Mr. Marco A. Zambrano, International Consultant.

December, 2012.

Table of ContentsTable of Contents.................................................................................................................................... 2Acronyms................................................................................................................................................ 4

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Glossary of Terms................................................................................................................................... 6Executive Summary................................................................................................................................. 81. Introduction..................................................................................................................................... 11

1.1 Objective................................................................................................................................... 111.2 Scope........................................................................................................................................ 12

2. The Program and Project Description...............................................................................................132.1 ESME Trust Fund Program.........................................................................................................132.2 ESME Kenya Project..................................................................................................................13

2.2.1 Background..................................................................................................................... 132.2.2 Purpose........................................................................................................................... 142.2.3 Beneficiaries....................................................................................................................142.2.4 Subprojects information....................................................................................................142.2.5 Institutional arrangements: Support to OGL Distributors......................................................152.2.6 Institutional arrangements: ESMF implementation...............................................................16

3. Environmental and Social Diagnosis.................................................................................................173.1 General Overview.......................................................................................................................173.2 Policy Framework...................................................................................................................... 17

3.2.1 Energy National Policy.....................................................................................................173.2.2 National Environmental Policy..........................................................................................18

3.3 Legal Framework.......................................................................................................................193.3.1 Energy............................................................................................................................ 193.3.2 Environment.................................................................................................................... 193.3.3 International Agreements..................................................................................................20

3.4 Institutional Framework..............................................................................................................213.4.1 Ministry of Energy...........................................................................................................213.4.2 Ministry of Environment and Mineral Resources.................................................................213.4.3 National Environmental Management Authority..................................................................223.4.4 Global Village Energy Partnership.....................................................................................22

3.5 Environmental and Social Characterization...................................................................................233.5.1 General information..........................................................................................................233.5.2 Environmental Aspects.....................................................................................................243.5.3 Social Aspects..................................................................................................................263.5.4 Vulnerability and Natural Disasters....................................................................................27

4. World Bank Safeguard Policies.........................................................................................................294.1 Description................................................................................................................................ 294.2 Safeguard Polices Triggered by the ESME Trust Fund in Kenya......................................................31

5. Environmental and Social Analysis...................................................................................................325.1 Environmental and Social impacts................................................................................................32

5.1.1 Positive impacts...............................................................................................................325.1.2 Negative impacts..............................................................................................................33

5.2 Environmental and Social measures..............................................................................................33

6. Environmental and Social Management............................................................................................346.1 Project Cycle.............................................................................................................................. 346.2 Roles and Responsibilities of the Stakeholders...............................................................................366.3 Methodologies, Tools and Formats...............................................................................................37

6.3.1 Environmental and Social Preliminary Assessment..............................................................37

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6.3.2 Environmental and Social Studies......................................................................................406.3.3 Environmental and Social estimated Budget........................................................................406.3.4 Internal Formats for the Environmental and Social Management...........................................416.3.5 Consultation, Public participation and disclosure mechanism................................................41

7. Procedures and Responsibilities........................................................................................................427.1 Internal procedures for the Environmental and Social Management.................................................42

7.1.1 Stage 1: Identification/Application.....................................................................................427.1.2 Stage 2: Assessment/Appraisal...........................................................................................427.1.3 Stage 3: Approval/Legal Agreement...................................................................................427.1.4 Stage 4: Monitoring/Supervision........................................................................................437.1.5 Stage 5: Impact Monitoring...............................................................................................43

7.2 Flowchart of the environmental and social management.................................................................43

ANNEXES............................................................................................................................................ 45Annex N° 1: World Bank Environmental and Social Safeguard Policies.................................................47Annex N° 2: List of Projects or Activities that requires an EIAS.............................................................48Annex N° 3: Templates of the internal management...............................................................................51

Annex 3.1: Environmental and Social Preliminary Assessment Form......................................................51Annex 3.2: Environmental and Social Monitoring Report.......................................................................54Annex 3.3: Environmental and Social Final Report................................................................................55

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AcronymsCBD Convention on Biological Diversity CBO Community-Based OrganizationCDM Clean Development MechanismCITES Convention on International Trade in Endangered Species EAC East African Community EDCG Environment Donor Coordination GroupEIA Environmental Impact AssessmentEMCA Environmental Management Coordination ActEMP Environmental Management PlanEPDS Environment Policy Development Secretariat EPNSC Environment Policy National Steering Committee ESFR Environmental and Social Final ReportESMF Environmental and Social Management FrameworkESPAF Environmental and Social Preliminary Assessment FormESMR Environmental and Social Monitoring ReportGDP Gross Domestic ProductGEF Global Environment FacilityGoK Government of KenyaGoR Government of RussiaGVEP-I Global Village Energy Partnership InternationalIWRM Integrated Water Resources Management MDGs Millennium Development Goals MEA Multilateral Environmental Agreement MoE Ministry of EnergyMEMR Ministry of Environment and Mineral ResourcesNBSAP National Biodiversity Strategy and Action Plan NEAP National Environmental Action PlanNEC National Environment Council NEIMS Environmental Information Management System NEMA National Environmental Management AuthorityNESC National Economic and Social CouncilNET National Environment Tribunal NGO Non-Governmental OrganizationNRA Natural Resource Accounting NSSD National Strategy for Sustainable DevelopmentPAs Protected Areas PCC Public Complaints Committee PCP Public Consultation PlanPCR Physical and Cultural ResourcesToR Terms of ReferenceUNDP United National Development ProgramWHO World Health Organization WSSD World Summit on Sustainable Development

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Glossary of Terms- Biodiversity: Means the variability among living organisms from all sources including ecosystems

and the ecological complexes of which they are a part. It encompasses the ecosystem, species and genetic diversity;

- Biopiracy: Refers to the expropriation of biological resources without fair compensation or sharing of benefits;

- Bioprospecting: Refers to the exploration of biodiversity for commercially valuable genetic and biochemical resources and research;

- Community: Refers to a clearly defined group of users, which may, but need not be, a clan or ethnic community. These groups of users hold a set of clearly defined rights and obligations;

- Conservation: Means the protection, maintenance, rehabilitation, restoration and enhancement of the environment;

- Ecosystem: Means a dynamic complex of plant, animal, micro-organism communities and their non-living environment interacting as a functional unit;

- Environmental Impact Assessment: Means a systematic examination conducted to determine whether or not a programme, activity or project will have any adverse impacts on the environment;

- Ex-situ conservation: Means conservation outside the natural ecosystem and habitat of the biological organism;

- Genetic resources: Means genetic material of actual or potential value;

- Land use: Means activities carried out on a given piece of land;

- Lead agency: Means any government ministry, department, parastatal, state corporation or local authority, in which any law vests functions of control or management of any element of wildlife resources;

- In-situ conservation: Means conservation within the natural ecosystem and habitat of the biological organism;

- Intergenerational equity: Means that the present generation should ensure that in exercising its right to beneficial use of the environment the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations;

- Intragenerational equity: Means that all people within the present generation have the right to benefit equally from the exploitation of the environment, and that they have an equal entitlement to a clean and healthy environment;

- Invasive and alien species: Means a species that is not an indigenous species or an indigenous species translocated to a place outside its natural distribution range in nature;

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- Marine protected area: Means any area of intertidal or subtidal terrain, together with its overlying water and associated flora, fauna, historical and cultural features, which has been reserved by law or other effective means to protect part or all of the marine environment;

- Multilateral Environmental Agreement: Means international legal instruments for the regulation of activities affecting the environment particularly wildlife resources to which Kenya is a Party;

- Payment for Environmental Services (PES): Means market-based approach to conservation based on the twin principles that those who benefit from environmental services (such as users of clean water) should pay for them, and those who generate these services should be compensated for providing them. In a PES mechanism, service providers receive payments conditional on their providing the desired environmental services (or adopting a practice thought to generate those services). Participation is voluntary;

- Protected area: Means an area declared to be a protected area under the applicable law;

- Species: Means a population of individual organisms capable of mating with one another and producing fertile offspring in a natural setting and that share common and specialized characteristics from others;

- Stakeholder: Refers to an individual or group having a vested interest in environment and natural resources;

- Strategic Environmental Assessment: Refers to a range of analytical and participatory approaches that aim to integrate environmental considerations into policies, plans and programs and evaluate the inter linkages with economic and social considerations;

- Sustainable use: Means present use of natural resources, which does not compromise the ability to use the same by future generations or degrade the carrying capacity of ecosystems and habitats;

- Transfrontier conservation area: Means the area or component of a large ecological region that straddles the boundaries of two or more countries, encompassing one or more protected areas, as well as multiple resource use areas;

- Wetlands: Means areas of marsh, fen, peat land, or water, whether natural or artificial, permanent or temporary, static or flowing, fresh, brackish, salt, including areas of marine water the depth of which at low tide does not exceed 6 meters. It also incorporates riparian and costal zones adjacent to the wetlands; and

- Wise use: Means sustainable utilization of resources, including wetlands for the benefit of humankind in a way compatible with the maintenance of the species and the integrity of the ecosystem.

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Executive SummaryThe main purpose of the Energy Small and Medium sized Enterprise (ESME) Trust Fund, administrated by the World Bank, is to support private sector entrepreneurship and investment in the provision of energy services in remote, un-served and under-served regions within a number of Sub Saharan African countries. The organization responsible for the Program implementation in Kenya and Senegal is Global Village Energy Partnership (GVEP) International. In order to ensure adequate environmental and social management during the ESME Trust Fund implementation, and to comply with the national environmental laws and the World Bank’s Safeguards Policy, the present Environmental and Social Management Framework (ESMF) has been developed during the Trust Fund preparation. Due to the characteristics of the resources application in each country (Kenya and Senegal), it was agreed with GVEP to develop separate instruments (ESMF-K and ESMF-S) in order to take into account the requirements of environmental and social management for each case.

In relation to the ESME-K, the Trust Fund will introduce financial support for Distributors of modern off grid lighting products (OGL Distributors). The amount of this financial support is US$ 1.3 million.

The implementation of the ESME-K will bring high positive environmental and social impacts. The transition to modern Off-Grid lighting will allow people to use their evening hours more effectively for both household and commercial activities. In the area of education, improved lighting will make a significant positive impact. Additionally, the use of OGL reduces the environmental impacts of combustion used in fossil fuel power generation, such as impacts from greenhouse gases and other air pollution emissions.

The grants will be limited only to products that pass the Lighting Africa performance standards, which include products using high quality disposable batteries, and at least half a year product warranty Lighting Africa is a joint World Bank-IFC program which seeks to accelerate the adoption of clean off-grid lighting technologies by households and businesses throughout Sub-Saharan Africa that rely for their lighting needs on candles, kerosene and other inferior and harmful fuels. Lighting Africa has developed a quality assurance framework that includes quality and performance standards and test methods. The QA framework and the products that have been tested and passed the tests are included at the Lighting Africa website www.lightingafrica.org.

The overall environmental impact of introducing OGL is likely to be positive because these products will replace inferior lighting alternatives, mainly kerosene and torches (currently available at rural markets) that typically use non disposable batteries and in general have short life span (weeks to months). However, the OGL themselves will use disposable batteries and the environmental impact can therefore be further improved through (i) technology – increasing battery life and use of safer materials, and (ii) developing incentives for the disposal of batteries and (iii) operating an environmentally friendly waste management plan for used batteries that are retuned for disposal..

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In this context, the ESMF-K was classified as Category B according to the Bank’s Environmental Assessment Policy (OP/BP 4.01); and according to the national law and the Environmental and Social Preliminary Assessment Form (ESPAF) presented in this ESMF, most of the operations will be Category C (low environmental and social risk) and could be Category B (moderate environmental and social risks) in specific cases, especially when the volume of lanterns distributed is greater than 5,000 units and the target area of the distributor (when it can be determined) presents high environmental and social sensitivity characteristics. It is important to recognize that given the kind of activities that the Trust Fund is expected to support, it is not easy for an OGL Distributor to know where the final users of the lanterns will be located, making it difficult to define the site sensitivity of a specific area. In this regard, given the kind of products that are expected to be distributed, i.e. products with minimal potential negative impacts and the area of intervention usually at the national level, the site sensitivity will be LOW in most of the cases.

It should be noted that the OGL market is still in very early stage, and the penetration of products is still relatively low (under 1 percent), with sales dispersed throughout the country. In addition, OGL differ from the more established solar home systems (SHS) as they do not require installation like SHS and are basically consumer products sold through different retail channels. Hence, it is almost impossible for distributors to know who the users are. There are, therefore, currently no examples of successful practices of disposal of batteries for this type of products worldwide. Lighting Africa is currently conducting a study on environmental sustainability that evaluates the impact of OGLs and proposes longer-term measures for reducing environmental impacts, such as thorough disposal of batteries and the potential of recycling. It is expected that the ESME-K trust fund will provide important inputs to this study by incentivizing the industry to develop and test battery disposal models that could then be also replicated beyond Kenya.

For this, the grant applicants will be required to present their Environmental Sustainability Plan (ESP) for mitigating environmental impacts of batteries, including plans for disposal of batteries (e.g. through establishing an incentive mechanism for users to return batteries – such as discounts for new OGL products or battery replacements). Specifically, the ESP should include: (i) technical measures taken to reduce environmental impact of batteries – type of the battery, materials used, expected life of the battery etc., (ii) incentives that will be provided to the users to return OGL products/batteries to the distributors – such as discounts for new OGL products or battery replacements and (iii) distributors plan for battery disposal. These three main aspects will help that the distributors get their stock from reputable manufacturers who use environmentally sound production practices; incentivizing users to return batteries to the distributors for proper disposal; and proper disposal and waste management plan for distributors post battery collection.

Technical assistance funds will be set aside to assist the OGL distributors to refine these plans during the implementation of the trust fund, as initial feedback on how these incentives work are received.

In regards of the institutional capacity and safeguards experience, GVEP is implementing ESME funded programs in Tanzania and Rwanda as part of existing World Bank funded programs which are governed by safeguards frameworks. Additionally, GVEP has a number of solar PV experts on its team and has a good understanding of the issues relating to batteries and their safe disposal. In order to finance any additional safeguard work GVEP include in its cost US$ 30,000 to cover the safeguards work.

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In relation to the environmental and social management during the trust fund implementation, 3 internal tools (template) have been included in the ESMF-K and they should be developed in the different stages during the ESME-K implementation. The first tool is the Environmental and Social Preliminary Assessment Form (ESPAF) and the main purpose of this tool is to determine the environmental and social risk level of each operation, to determine the studies required to assure the compliance with the national environmental law and the World Bank’s Safeguards Policies, and to determine the environmental budget required for the implementation of the ESP in each case. The second tool is the Environmental and Social Monitoring Report (ESMR) used in order to systematize the environmental follow-up process during the Trust Fund implementation. And the third tool is the Environmental and Social Final Report (ESFR) used in order to review the environmental and social aspects, once the Trust Fund implementation of each operation has been completed.

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1. Introduction

The $30 million Energy Small and Medium sized Enterprise (ESME) support in Sub-Saharan Africa Trust Fund (SATF), has the objective of fostering local private sector entrepreneurship and investment in the provision of energy services in remote, un-served and under-served regions within a number of Sub Saharan African countries. The aim is to support the establishment and development of stable and viable privately run enterprise and business models that will increase access to reliable, sustainable, and affordable modern energy services in peri-urban areas, small towns, and rural areas within the selected countries.

To implement this project, the Government of Russia (GoR) asked the World Bank to manage this trust fund and to closely collaborate with the Global Village Energy Partnership (GVEP) International. This agreement was formalized with the signing of an Administration Agreement between the World Bank and the GoR on March 19, 2009 for the ESME support in SSA project. In 2012, the project’s closing date was extended to 31st August 2014 and the Administrative Agreement is being amended to give GVEP the responsibility of implementation agency in Kenya and Senegal.

To ensure adequate environmental and social management during the project implementation in Kenya and Senegal and to comply with the national environmental laws and the World Bank’s Safeguards Policy, this Environmental and Social Management Framework (ESMF) was developed as part of project preparation and GVEP will be responsible for its implementation.

1.1 Objective

The overall purpose of the ESMF is to guide GVEP and the OGL Distributors in environmental and social management through the use of methodologies, tools and procedures, during the project cycle. The ESMF should be applied by the GVEP and OGL Distributors, in order to comply with Kenya’s national environmental and social law, and the Bank’s Environmental and Social Safeguards Policies.

The main objectives of the ESMF are to:

- Present a diagnosis of the policy, legal and institutional framework in Kenya as well the social and environmental characterization of the country; and

- Introduce some methodologies, tools and procedures, for the environmental and social management during the project cycle.

1.2 Scope

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The ESME Trust fund project in SSA triggers the following World Bank Environmental and Social Safeguards Policy: Environmental Assessment (OP/BP 4.01). The ESMF-S describes how the project will comply with that policy and with national law as it is implemented in Kenya by GVEP and OGL Distributors.In relation with the document content, the ESMF is divided in 7 Chapters: The First Chapter presents the document introduction including the objective and scope of the instrument; the Second Chapter presents the description of the ESME Trust Fund Program; the ESME proposed for Kenya; and the potential subprojects that the Project will support; the Third Chapter presents a Environmental and Social Diagnosis of the policy, legal and institutional framework; also presents a environmental and social characterization of Kenya; the Fourth Chapter presents a general information about the World Bank Safeguards Policies and the Policies that the ESME triggered; the Fifth Chapter presents a general Environmental and Social Analysis including information about the environmental and social potential impacts (positive, negative, direct and indirect), and the measures to prevent, mitigate and/or compensate the potential negative impacts; the Sixth Chapter about the Environmental and Social Management presents the methodologies, tools, and the internal instruments to guide GVEP during the project cycle; and the Seventh Chapter, presents some Procedures and Responsibilities that the ESME-K should take into account during the project cycle in order to comply with the national law and the Bank’s safeguards policies.

Finally the document presents three (3) Annexes that include all the supporting documents and also the templates or format that should be used during the project cycle.

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2. The Program and Project Description

2.1 ESME Trust Fund Program

The development objective of the Energy Small and Medium size Enterprise (ESME) Trust Fund (US$ 30 million) is to strengthen the capacity in providing energy services to poor communities in selected countries in Sub-Saharan Africa (SSA), promoting private sector investment in energy generation for productive use.

In general, the Program has three components.

First Component: Additional Financing to Scale-Up Energy expansion provides grants to the governments to support programs benefiting energy SMEs. The funds are channeled as additional parallel grant funding to IDA/IBRD projects. Under these arrangements, grant agreements have been signed with Tanzania Botswana, Rwanda, and Mali and additional agreements are expected to be signed with Uganda.

Second Component: GVEP Technical Assistance to SMEs and REAs. Finances GVEP to provide technical assistance to energy SMEs and REAs managing energy SME grants under the Component 1. The Amendment of the Administrative Agreement has expanded this component to also authorize GVEP to provide grants directly to Energy SMEs. Subsequently, two grant programs in Kenya and in Senegal have been agreed upon.

Third Component: Finances World Bank costs for the management and administration.

With regard to the first component, GVEP International will act as the implement agency for the project and administer and award ESME grants in Kenya and Senegal. In Kenya, the grants will be competitively awarded to the distributors of off-grid lighting products (OGL); and in Senegal, grants will be provided to SMEs to acquire electricity in order to expand and upgrade their activities (e.g. solar PV lighting for eco-lodges, refrigeration equipment for dairy farms, and others).

2.2 ESME Kenya Project

The Energy Small and Medium Enterprise Kenya (ESME-K) will introduce financial support for OGL Distributors of modern off-grid lighting products. The amount of this ESME-K Project is US$ 1.3 millions, complementing and scaling up the existing support to the sector by IFC’s Lighting Africa program.

2.2.1 Background

There is a significant market for modern off-grid lighting products (OGLs) in Kenya. The low electrification rates in the country result in most of the population having to rely on alternative lighting solutions other than electricity. Currently, Kenyans spend approximately US$1 billion on lighting annually; with 70% of the population using kerosene based lighting products.

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Replacing traditional fuel based lighting with OGLs like solar portable lanterns has major positive impact on the environment, health and household lighting spending.

2.2.2 Purpose

The objective of the ESME-K is to provide financial support to OGL Distributors for scaling up their businesses. GVEP International will work with existing modern off-grid lighting product distributors to enable them to meet their working capital needs, to obtain sufficient stocks, expand their distribution networks, carry out their own marketing campaigns and other activities that will allow them to grow their businesses and meet their projected demand. The financing from the ESME Trust Fund will add significant resources to the modern off-grid lighting product supply chain and finance the scale up of their supply OGLs in the market.

The current IFC Lighting Africa1 approach is to engage commercial banks and utilize IFC’s Global Trade Facility or provide first loss guarantees for loans to distributors of off-grid lighting products. The challenge here is that the market is a nascent one, which means most distributors do not have the requisite sales history to qualify for commercial loans. A grant such as the ESME trust fund will provide distributors of high quality OGL products with a chance to meet the growing demand and develop the necessary profile to make them eligible for future commercial loans if required.

2.2.3 Beneficiaries

The direct beneficiaries are the farmers and communities that will receive the products (lanterns) within the operational areas of the distributors for its use.

2.2.4 Subprojects information

a. Eligibility

The grants will be competitively awarded to the distributors of off-grid lighting products, and the product will be Modern Off-Grid Lighting. The description of the ESME-K project, including expected SME and product eligibility criteria are included in Grant Agreement.

b. Description

The eligible products will be the modern off-grid lighting products that have passed Lighting Africa performance standards, which are described in detail at www.lightingafrica.org. All products that have passed the Lighting Africa standards are included at the Lighting Africa website with a standardized spec sheet, which includes details on product performance. All products that passed Lighting Africa performance test also offer quality warranties.

1 Lighting Africa, a joint World Bank and IFC program, seeks to accelerate the development of markets for modern off-grid lighting products in Sub-Saharan Africa. The goal is to mobilize and provide support to the private sector to supply quality, affordable, clean and safe lighting to 2.5 million people by facilitating the sale of 500,000 off-grid lighting units by 2012 while, at the same time, creating a sustainable commercial platform that will realize the vision of providing 250 million people with modern off-grid lighting products by 2030.

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In general, modern off-grid lighting products provide bright light for work, reading, and leisure, lasts 4-5 hours per charge from the solar module, and is designed for use in rough environments. The lamp is recharged everyday with the solar module. The up-date list of the potential type of OGL products approved by Lightning Africa is on the program’s web site.

c. Amount

- Maximum grant amount of US$ 150,000. In order to allow about 10 firms to access the available funding and foster competition between grantees, the maximum amount of a grant to one firm shall be US$150,000,

- Tied to turnover. In general, the total grant amount given to one firm shall not exceed 2.5 times the yearly turnover the company achieves with the sale of low-cost lighting products that are eligible under this grant funding. (This calculation shall exclude revenue from related products, such as solar home systems, solar water heating, invertors and batteries, which are not eligible under this grant). However, the amount granted can be less if the company is not able to demonstrate the growth necessary for a higher grant proportion.

2.2.5 Institutional arrangements: Support to OGL Distributors

- Channeling funds through GVEP. The funds will be channeled through GVEP. GVEP will receive funds from the ESME Trust Fund administrated by the World Bank, and will pass on these funds to the OGL grantees that win the competition. The subprojects proposed will be analyzed by GVEP using this ESMF instrument in order to ensure the compliance of the national law and the World Bank safeguard policies. The subprojects will be implemented by OGL distributors.

- Major teams and responsibilities. The main teams that will be involved in the implementation of the ESME-K in-kind support for RE projects program are GVEP, the Evaluation Committee and the OGL distributors who will be sub-grantees. The World Bank will supervise the project implementation, including the compliance with the WB environmental and social safeguards.

- GVEP: GVEP will be responsible with the overall implementation of the grant funding. The main responsibilities of GVEP will be managing and implementing the project, identifying suitable businesses for support, and conducting the monitoring & evaluation. GVEP will identify potential OGL Distributors and will offer support in the preparation of applications. GVEP will also be charged with overseeing the procurement of goods and services and financial management of the sub-grantees. Short-term support in specialty areas will be provided by on call experts who can advise OGL distributors on the development and implementation of their business plans.

- Evaluation Committee: The Evaluation Committee will be primarily responsible for approving grant recipients. It will consist of representatives from the private sector, business and technical experts, and other representatives agreed upon by GVEP and the World Bank. The EC will elect a Chair from amongst its members.

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- Monitoring and Evaluation: GVEP will have overall responsibility for monitoring and evaluation of the project. This will entail developing the M&E framework, monitoring the project performance, including tracking the indicators included in the Results Framework. Consultants shall be procured by GVEP for evaluations that will take place in a reasonable timeframe after projects receive awards.

2.2.6 Institutional arrangements: ESMF implementation

The responsibility for the ESMF-K implementation is with GVEP, and specifically the ESME Program Manager. The detail of the activities that the ESME-K Manager should perform during the project cycle related to the environmental and social manager is presented in Chapter 7.

The ESME-K Manager will coordinate the call for proposals, screen initial applications and provide technical assistance to applicants to develop the proposal, as requested. Additionally, the ESME-K Manager is responsible for carrying out verification activities of the applicants and present selected projects to the Evaluation Committee.

Figure N° 1: GVEP structure of principle ESME funded staff

COO - London

CEO - London

Finance and Procurement Manager - London

Regional Manager Africa

Communications Manager - London

Finance and ProcurementManager Africa

ESME Manager

West AfricaManager

SME Specialist

(WA)

SME Specialist

(EA)

TechnicalSpecialist

Special AdvisorInvestment

Sustainable MarketsAdvisor

FrancophoneAssistant

Part-funded by ESME

Fully funded by ESME

M&E London

Source: Patrick Balla, ESME-K Programme Manager, 2012

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3. Environmental and Social Diagnosis

3.1 General Overview

Kenya has a rapidly growing population of 40 million (in 2011) and a GDP of US$ 25 billion. The country has experienced an increase in energy demand which is linked to the rising population and expanding economy; in which the latter grew by 7% in 2007. However, only 16-18% of the population has access to electricity2. Over the last six years, electricity demand has increased by an average of 7% per annum. Sixty percent of the electricity is hydro generated and supply has not been able to meet the increased demand creating instability. The same case holds for biomass, which is the primary energy source in Kenya and meets 68% of the country’s basic energy needs. The Kenyan economy is agricultural based. Only 20% of the country is suitable for cultivation, while the rest is largely arid and semi-arid.

Recent reforms in the policy, legal and institutional framework for energy management have resulted in the creation of the Energy Regulation Commission and the Rural Electrification Authority. However the state continues to play a major role in electricity generation and distribution. The Ministry of Energy has introduced feed-in tariff policy to encourage the development of wind, biomass and mini-hydro power generation. Greater effort is needed to diversify energy sources, improve efficiency, and take climate change into consideration in energy planning.

3.2 Policy Framework

3.2.1 Energy National Policy

Kenya has set in action a number of policies in the past to address energy issues in support of its development challenges. The National Energy Policy under assessment has a number of broad objectives including ensuring the adequate, reliable, cost effective and affordable supply of energy to meet development needs, while protecting and conserving the environment. The specific objectives are:

- Provide sustainable quality energy services for development;- Utilize energy as a tool to accelerate economic empowerment for urban and rural

development;- Improve access to affordable energy services;- Provide an enabling environment for the provision of energy services;- Enhance security of supply;- Promote development of indigenous energy resources; and- Promote energy efficiency and conservation as well as prudent environmental, health and

safety practices.

2 Helio International, Energy Systems: Vulnerability, Adaptation and Resilience Study, Kenya 200918

Additionally, the Ministry of Energy (MoE) has published renewable energy feed-in tariffs policy for wind, small hydro and biomass. This policy is aimed at attracting private sector investments in electricity generation from renewable energy sources as a means of diversifying national power sources, enhancing national energy security, creating employment and income generation. There has been a positive response to this policy by interested investors who are already carrying out site-specific feasibility studies as they seek to invest in the wind energy sector. Some of the potential investors include multinational conglomerates including General Electric and other foreign private entities.

3.2.2 National Environmental Policy

This National Environment Policy aims to provide a holistic framework to guide the management of the environment and natural resources in Kenya. It further ensures that the linkage between the environment and poverty reduction is integrated in all government processes and institutions in order to facilitate and realize sustainable development at all levels. This is done in the context of green economy enhancing social inclusion, improving human welfare and creating opportunities for employment and maintaining the healthy functioning of ecosystem.

This policy gives the framework to guide the country’s efforts to deal with the considerable and ever-growing environmental issues and challenges, such as: a) Need for harmonization of sector policy instruments with the Environmental Management and Coordination Act (EMCA) and the Constitution; b) Implementation of Land Policy; c) Valuation of environmental and natural resources; d) Rehabilitation and restoration of environmentally degraded areas; e) Loss of biodiversity; f) Concessions and incentives; g) Urbanization and waste management; h) Pollution; i) Energy; j) Climate change and disaster management; k) Conservation of shared natural resources; l) Invasive and alien species; m) Public participation, environmental education and awareness; n) Data and information; o) Poverty; p) Weak enforcement; and q) Fragmentation.

The main goal of this Policy is “A better quality of life for present and future generations through sustainable management of the environment and natural resources”

Finally, the main objectives of the National Environmental Policy are:

a. Provide a framework for an integrated approach to planning and sustainable management of Kenya’s environment and its natural resources;

b. Strengthen the legal and institutional framework for effective coordination and management of the environment and natural resources;

c. Ensure sustainable management of the environment and natural resources, such as unique terrestrial and aquatic ecosystems, for national economic growth and improved people’s livelihood and well-being;

d. Promote and support the use of innovative environmental management tools – such as incentives, disincentives, total economic valuation, indicators of sustainable development, SEA, EIA, Environmental Audit, and payment of environmental services – in environmental management;

e. Promote and enhance cooperation, collaboration, synergy, partnerships and participation in the protection, conservation, better management of the environment by all the stakeholders;

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f. Ensure inclusion of cross-cutting issues – such as poverty reduction, gender, disability and HIV/AIDS – in national and sector planning processes.

3.3 Legal Framework

The following sub-sections present the legal framework related to the energy and environment legislation, and other laws and regulations related to other sectors that are important to take into account in this ESME Program.

3.3.1 Energy

Kenya’s energy sector is governed by the Energy Act 2006, whose main objective is to ensure adequate, quality, cost effective and affordable supply of energy to meet development needs, while protecting and conserving the environment. Its specific objectives are to:

- Provide sustainable quality energy services for development;- Utilize energy as tool to accelerate economic empowerment for urban and rural- development;- Improve access to affordable energy services;- Provide an enabling environment for the provision of energy services;- Enhance security of supply;- Promote development of indigenous energy resources; and- Promote energy efficiency and conservation as well as prudent Environmental, and Health

and Safety practices.

The 2006 Energy Act is a great improvement over the previous one which had little to say about renewable energy or energy efficiency. Moreover, it emphasizes the need for environmental sustainability in development and transportation of energy resources. However, the policy does not exclusively recognize the importance or significance of climate change in achieving its objective. In developing energy resources economic, social and environmental considerations are taken into account but not climate change implications.

Finally, the Energy Act also established the Energy Regulatory Commission (ERC) whose mandate is to regulate all functions and players in the energy sector. One of the duties of the ERC is to ensure compliance with Environmental, Health and Safety Standards in the Energy Sector, as empowered by Section 98 of the Energy Act, 2006.

3.3.2 Environment

The base of the environmental legal framework is the Constitution of the Republic of Kenya. The new Constitution which was promulgated on the 27th of August 2010 takes supremacy over all aspects of life and activity. Hailed as a green Constitution, it embodies elaborate provisions with considerable implications for sustainable development. These range from environmental principles and implications of Multilateral Environmental Agreements (MEAs) to the right to clean and healthy environment enshrined in the Bill of Rights. With regard to environment, Section 42 of the Constitution states that every person has the right to a clean and healthy environment. In Sections 69 and 70, the Constitution has inter alia identified National

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Obligations in respect of the environment and Enforcement of Environmental Rights. Section 69 (2), every person has a duty to cooperate with state organs and other persons to protect and conserve the environment and ensure ecologically sustainable development and use of natural resources.

The main environmental legal instrument in Kenya is the Environment Management and Coordination Act (No. 8 of 1999 – EMCA). This Act provides for the establishment of an appropriate legal and institutional framework for the management of the environment and related matters. It is a framework environmental legislation that establishes appropriate legal and institutional mechanisms for the management of the environment. It provides for improved legal and administrative co-ordination of the diverse sector initiatives in order to improve the national capacity for the management of the environment.

This Act is divided into 13 Parts, covering main areas of environmental concern as follows: Preliminary (I); General principles (II); Administration (III); Environmental planning (IV); Protection and Conservation of the Environment (V), Environmental impact assessments (EIA), audits and monitoring (VI); Environmental audit and monitoring (VII); Environmental quality standards (VIII); Environmental Restoration orders, Environmental Conservation Orders, and Environmental Easements (IX); Inspection, analysis and records (X); International Treaties, Conventions and Agreements (XI) National Environment Tribunal (XII); Environmental Offences (XIII). The Act provides for the setting up of the various ESIA Regulations and Guidelines.

Specifically for the management of waste, the EMCA includes a Waste Management Regulation (Legal Notice 121) that should be taken into account in order to ensure an adequate management of the final disposal of batteries and other hazard waste.

3.3.3 International Agreements

Kenya is a party to the following international environmental agreements:

UN Convention on Biological Biodiversity; The Convention on Climate Change; Desertification Convention; Convention on Trade in Endangered Species of Wild Fauna and Flora; Law of the Sea Convention, Marine Dumping, Marine Life Conservation; Nuclear Test Ban; Vienna Convention for the Protection of the Ozone Layer; Ship Pollution; Wetlands; and International Convention on the Regulation of Whaling.

Kenya is also part to the major international human rights treaties specifically, the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights.

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3.4 Institutional Framework

3.4.1 Ministry of Energy

The Ministry of Energy was formed in 1979 upon Kenya Government’s realization that energy was a major component in the country’s development process. The new Ministry was assigned the following functions: Energy policy development; Electric power development; Oil and other fossil fuels exploration and development; and Exploration and exploitation of non-convention energy sources such as wind, biogas, solar, geothermal, and wood fuel.

The Ministry is particularly charged with the following responsibilities:

- Energy policy development - Hydropower development - Geothermal exploration and development - Thermal power development - Petroleum products – import/export/marketing policy - Renewable energy development - Energy regulation, security and conservation - Fossil fuels exploration and development - Rural electrification Program.

3.4.2 Ministry of Environment and Mineral Resources

The current structure of the Ministry is a result of several rounds of government restructuring that has taken place over the last decade. In 1999, the Ministry of Environment and Mineral Resources and Natural Resources was merged with the Ministry of Water Resource. Then in 2003, the ministry was split to form the Ministry of Water Resources Management and Development (now the Ministry of Water and Irrigation) and the Ministry of Environment and Mineral Resources, Natural Resources and Wildlife. In 2004, the Kenya Wildlife Service was transferred to the Ministry of Tourism and Wildlife. The most recent institutional reform was the formation of the Ministry of Environment and Mineral Resources (MEMR) and the Ministry of Forestry and Wildlife in 2008.

The mandate of the ministry is to monitor, protect, conserve and manage the environment and natural resources through sustainable exploitation for socio-economic development aimed at eradication of poverty, improving living standards and ensuring that a clean environment is sustained now and in the future.

The core functions of the Ministry are:

- Environment and Natural Resources Policy formulation, analysis and review;- Sustainable management of Mineral resources and conservation of environment; - Continuous development of geo-database for integrated natural resources and environmental

management systems;- Conduct applied research and dissemination of research findings in land resources and

geology;

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- Carry out geological surveys, mineral exploration and regulation of mining and use of commercial explosives;

- Promote, monitor and coordinate environmental activities and enforce compliance of environmental regulations and guidelines; and

- Meteorological services.

3.4.3 National Environmental Management Authority

The National Environment Management Authority (NEMA) is established under the Environmental Management and Coordination Act (EMCA) No. 8 of 1999, as the principal instrument of government in the implementation of all policies relating to the environment.

The Authority became operational on 1st July 2002 following the merger of three government departments, namely: the National Environment Secretariat (NES), the Permanent Presidential Commission on Soil Conservation and Afforestation (PPCSCA), and the Department of Resource Surveys and Remote Sensing (DRSRS). However, following government restructuring in March 2003, DRSRS reverted to its departmental status under the then Ministry of Environment and Natural Resources (MENR). There was a transition period characterized by the integration of previous departmental activities and appointment of the first Board of Management.

3.4.4 Global Village Energy Partnership

Global Village Energy Partnership (GVEP) is an international non-profit organization which helps implement energy-related projects providing reliable electricity for rural and peri-urban communities in Africa and Latin America thereby improving the quality of people’s lives, stimulating growth and reducing poverty. GVEP works to increase access to modern energy and reduce poverty in developing countries.

Apart from providing technical assistance and support to energy businesses, GVEP also provides direct access to new sources of capital to help them achieve long term sustainability. This consists of grants deployed through the programs, including business plan competitions, provision of loan guaranteed for lenders to small businesses, and debt and equity from a renewable investment fund being launched by GVEP.

GVEP started as a partnership network, set up at the Johannesburg Sustainable Development Summit in 2002, with its secretariat hosted by the World Bank. In 2006 it became an independent charity, registered in the UK and governed by a Board of Trustees.

In term of the environmental and social management, GVEP shall be the responsible for the ESMF implementation during the Program execution. GVEP, through support to World Bank funded programs in other countries, is familiar with the Bank’s Safeguards Policies and their implementation.

GVEP is currently implementing ESME funded programs in Tanzania and Rwanda as part of existing World Bank funded programs which are governed by safeguards frameworks. GVEP is supporting small hydro developers in both countries in the development of Environmental and Social Impact Assessments (ESIA) and ensuring full compliance of these projects with local law

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and Bank requirements. In Rwanda GVEP is also advising the Public Sector Foundation on the implementation of a programme of support for OGL distributors which is financed by the Bank through the government of Rwanda. Additionally, is important to mention that GVEP has a number of solar PV experts on its team and has a good understanding of the issues relating to batteries and their safe disposal. Finally, GVEP has allocated a budget of US$30,000 in order to finance the implementation of the ESMF-K.

3.5 Environmental and Social Characterization

3.5.1 General information

a. Location

The Republic of Kenya is situated in Eastern Africa and lies squarely on the equator between latitudes 5° North and 5° South and between longitudes 34° West and 42° East. It covers an area of 582,648 km2 with lakes occupying about 2% of the total area. It borders Somalia to the east and northeast, Ethiopia and Sudan to the north, Uganda to the west, Tanzania to the south, and the Indian Ocean to the southeast.

The altitude varies widely from sea level at the coast to about 5000 meters above sea level on the central highlands. Mount Kenya has a peak of 5119 meters and is capped with snow throughout the year. The country has varied physical and climatic features.

Figure N° 2: Kenya’s Map

Source: Google Map, 2012

b. Climate

The varied topography, proximity to the Indian Ocean and equatorial location influence the temperature profiles of Kenya which averaged at 23.44oC in the past decade (Cline 2007). Kenya’s average annual rainfall amounted to 738 mm/year from 1960 to 1990 (Cline 2007). However, rainfall is unevenly distributed across space and time. Along Kenya’s coast a humid tropical climate predominates. By contrast, inland areas are largely arid with two thirds of the country receiving less than 500 mm of rainfall per year.

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There are two distinct rainy seasons: The Long Rains (March to May) and Short Rains (October to December). There is increasing observational evidence of changing precipitation patterns, including shifts in the timing and duration of the rainy season over parts of Kenya. The annual average rainfall between 2070 and 2099 is projected to increase to 2.19 mm/day (Cline 2007). However, precipitation gains are uneven across the country and future increases in temperature will also increase evaporation rates.

The 6 major sectors, including tourism, agriculture, transport and telecommunication, finance and construction, are pivotal in fuelling Kenya’s economic growth. Currently, the agricultural sector is growing in strength and is slated to support the country’s economy by 2009.

c. Land Use

Only about 20% of the total land is arable, which is where the majority of Kenya’s population lives. The rest of the land - 80% - is mainly arid and semi-arid. Kenya’s arid and semi-arid lands support more than 70 % of the national livestock which is estimated at about 9.7 million beef cattle, 3 million dairy cows, 9.6 million goats, 8.3 million sheep, 0.8 million camels 0.52 million donkeys, and 0.3 million pigs. Of the arable 20% land area, only 8% is used for crop and feed production with about 1,030 sq. km under irrigation.

The major agricultural activities in Kenya are crop production, horticulture, dairy and livestock farming. Traditionally, the major foreign exchange earners have been tea and coffee. However, horticulture is currently the country’s leading foreign exchange earner netting in $1.12 billion, against $1.04 billion earned by tourism. Other products exported from Kenya are beef and dairy products, sisal, cashew nuts, pyrethrum, fruits and vegetables. The principal crops grown for local use are maize, wheat, sugarcane and rice.

3.5.2 Environmental Aspects

At present Kenya’s environment is under threat from several pressures. These pressures include inter alia, deforestation; soil erosion and desertification, poaching of wildlife, destruction of watersheds and increasing settlements in water catchment areas such as the Mau forest, Cherangani Hills, Aberdare forest as well the Mt. Kenya areas. Over the past decades Kenya’s climatic trends have experienced significant changes.

About 81% of the population has access to safe sanitary means, with 94.8% in urban areas and 76.6% in the rural areas. High levels of poverty negatively impact on the environment through land degradation leading to reduced productivity and hunger, and pollution of ground water table by both industry and chemical fertilizers.

Pollution of drinking water sources is responsible for leukemia in children and increased incidences of malaria, typhoid, cholera and other environmental diseases. Access to safe water is estimated at 89% in urban areas and 49% in rural areas with a national average of 57%. Sanitation access in urban areas is estimated at 94.8% compared to 76.6% in rural areas.

Wood fuel is the main source of household energy. The high and increasing demand for wood-fuel poses a major threat to existing forest and other terrestrial ecosystem resources. For example, since 1930, Kenya has lost approximately 65% of its original standing wood groves.

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The challenge is how to reduce over-reliance on wood-fuel among the rural poor who have limited access to alternative sources of energy.

a. Forest

The 6.2% (3,522,000 hectares) of Kenya is forested. Of this, 20.0% (704,000 hectares) is classified as primary forest, the most biodiverse form of forest. The 97.8% of the forest area is public and the rest (2.2%) is private.

Between 1990 and 2000, Kenya lost an average of 12,600 hectares of forest per year. This amounts to an average annual deforestation rate of 0.34%. Between 2000 and 2005, the rate of forest change decreased by 1.4% to 0.34% per annum. In total, between 1990 and 2005, Kenya lost 5.0% of its forest cover, or around 186,000 hectares. Kenya lost 38,000 hectares of its primary forest cover during that time. Deforestation rates of primary cover have decreased 5.1% since the close of the 1990s. Measuring the total rate of habitat conversion (defined as change in forest area plus change in woodland area minus net plantation expansion) for the 1990-2005 intervals, Kenya lost 2.0% of its forest and woodland habitat.

b. Flora and Fauna

Kenya has some 1847 known species of amphibians, birds, mammals and reptiles according to figures from the World Conservation Monitoring Centre. Of these, 4.0% are endemic, meaning they exist in no other country, and 3.8% are threatened. Kenya is home to at least 6506 species of vascular plants, of which 4.1% are endemic. 6.0% of Kenya is protected under IUCN categories I-V.

c. Biodiversity

Kenya has a large diversity of ecological zones and habitats including lowland and mountain forests, wooded and open grasslands, semi-arid scrubland, dry woodlands, in-land aquatic, and coastal and marine ecosystems. In addition, a total of 467 lake and wetland habitats are estimated to cover 2.5% of the territory. In order to preserve the country’s wildlife, about 8% of Kenya’s land area is currently under protection. Degradation of some aquatic ecosystems is occurring due to the introduction of species such as the Nile perch and Water hyacinth.

Forests are the backbone of Kenya’s economy through agriculture and tourism. They also support livelihoods through provision of food, medicine, wood for construction, fuel-wood, and services such as water catchment areas. Despite their importance, indigenous forests have been rapidly declining from 1,687,390 ha in 1994 to 1.2 million ha, and plantation forests have declined from 165,000 ha in 1988 to the current 120,000 ha. Most of this loss has occurred through forest excisions and encroachment for agriculture and settlements. Other losses have occurred through forest fires and overexploitation of preferred forest species.

d. Protected Areas

Kenya has 302 protected areas (nationally designated and internationally recognized) covering around 60 000 km2, or 10% of its total land area.

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Figure N° 3: Protected Areas in Kenya

Source: Google Map, 2012

3.5.3 Social Aspects

a. Population

Kenya’s population is approximately 40 million (2011 estimates) with an annual population growth rate of 2.76%. The population is unevenly distributed with populations patterns linked to agricultural land potential; there is an average of 230 persons per square km in high potential areas with an average of 3 persons per km2 in arid areas. Kenya’s population is comprised of 99% native Africans who belong to 1 of the 42 ethnic groups present in Kenya.

The rate of urbanization in Kenya is one of the highest in the world, with an estimated annual growth rate of 3.9% for the period 2005-2010 (Central Bureau of Statistics, 2007). The average growth rate for most African cities is 3.31% as compared to 1.98% in the rest of the world. It is estimated that about 22 % of Kenya’s population lives in urban areas, while 78 % live in rural areas.

b. Education

Since the introduction of the free primary education policy in 2003, primary school enrolment has increased by 7.9% from 7.6 million pupils in 2006 to 8.2 million by 2007. The value for School enrollment, preprimary (% gross) in Kenya was 51.84 as of 2009.

If Kenya maintain this current trend, it is likely to achieve the MDG of achieving universal primary education by the year 2015. It is also likely to achieve the goal of gender parity by 2015, since the enrolment, retention, completion and progression rates are almost equal for both

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genders in primary school. Recently, the Government lowered the cut-off points for female students to join public universities.

c. Gender

Kenya has made notable progress on gender issues in Kenya. However despite sustained campaigns, wide gender gaps still exist in access to and control of resources, economic opportunities and political voice. Overall, women continue to have less access to social services and productive resources than men. Women remain vastly underrepresented in parliament and local authorities (8.3% of the total representation).

d. Poverty and Wealth

The majority of the Kenyan population lives in poverty. The United Nations Development Program (UNDP) Human Development Index (HDI) listing, which ranks countries according to their overall level of human development, ranks Kenya 138th out of a total of 174 nations. Regions with low HDI and GDI coincide with those with low potential as in Arid and Semi-Arid Lands (ASAL) areas and those that suffer environmental degradation. Conversely, the regions with high HDI are those that offer higher opportunities and with relatively better human security.

Malaria remains the leading cause of mortality and morbidity in Kenya accounting for 5 % of deaths and 30 % of morbidity. Out of Kenya’s population of over 37 million, 70% (20 million people) live in malaria prone areas and are at risk of infection.

3.5.4 Vulnerability and Natural Disasters

Kenya is prone to flooding and to droughts. Two periods of intense drought have caused severe crop losses, famine and population displacement in the country since 2000. With climate change, Kenya faces increased risk. While global climate models suggest that the region from Lake Victoria to the central highlands east of the Rift Valley is likely to experience increases in annual rainfall, regions in the arid east and north of the country are likely to experience shortages. Increased temperatures are likely to exacerbate the present drought conditions and that may have a significant impact on water availability in the future. With more unpredictability, seasonal rainfall will cause an increase in short heavy rainfall periods leading to flooding, landslides and water pollution. These may be worse during El Niño years.

Eighty percent (80%) of Kenya’s territory is Arid and Semi-Arid Lands (ASALs). About twenty (20%) percent of Kenya’s population (3 million people) live in these ASALs. The red areas on the map (see below) show the arid areas, while the semi-arid areas are indicated in brown. Kenya has experienced at least nine severe droughts over the last 35 years, which have affected an increasing number of people. The 1975 drought affected a total of 16,000 people, while the droughts of 1999/2001 and 2004/2006 affected 4.4 and 3.5 million people respectively throughout Kenya, including those living outside the pastoralist areas.

Figure N° 4: Arid and semi arid areas in Kenya

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Source: Government of Kenya, 2012

Another growing problem is the ongoing reduction of grazing land due to the expansion of agriculture on the more productive ground, increasing levels of tourism, and insecurity created by conflicts. Migration between different grazing lands– traditionally the most important coping strategy – is becoming more and more limited.

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Environmental PoliciesOP/BP 4.01 Environmental AssessmentOP/BP 4.04 Natural HabitatOP/BP 4.09 Pest Management OP/BP 4.11 Cultural Property OP/BP 4.36 ForestOP/BP 4.37 Safety of Dams

Social PoliciesOP/BP 4.10 Indigenous PeopleOP/BP 4.12 Involuntary Resettlement

Legal PoliciesOP/BP 7.50 International WaterwaysOP/BP 7.60 Projects in Disputed Areas

World Bank Additional Safeguard Instruments- Environmental, Health and Safety Guidelines- Environmental Assessment Sourcebook (and updates)- WB Participation Sourcebook (1996)- Disclosure Hand Book- Electronic Resettlement Guidebook

4. World Bank Safeguard Policies

4.1 Description

To ensure the social and environmental sustainability of the projects, the World Bank developed its Safeguard Policies, divided among environment, social, and legal areas. Likewise, the World Bank has a Public Disclosure Policy that is cross-cutting and applies to all the Safeguards Policies.

Figure N° 5: World Bank Safeguard Policies

Source: World Bank, Safeguard Policies.

The Safeguard Policies pursue three objectives: (i) ensuring that environmental and social issues are evaluated in the preparation and decision-making process; (ii) reducing and mitigating the environmental and social risks of Bank-financed programs or projects; and (iii) providing mechanisms for consultation and information disclosure.

In accordance with the Trust Fund agreements, GVEP will comply with the World Bank Safeguard Policies during the implementation of the Project and of each subproject funded under the ESME Trust Fund. A complete description of the World Bank’s safeguards and their triggers can be found on the Bank’s official Web site (www.worldbank.org) and summaries are included in Annex N° 1 of this ESMF.

The next Table presents the common settings in which the safeguards polices are triggered in the energy sector:

Table N° 1: Social and Environmental Safeguards commonly triggered in Energy Projects

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Safeguard Policy Trigger settings and requests

Environmental Assessment

This safeguard is typically triggered in projects where the work will affect, temporarily or permanently, the natural environment and/or society, through direct, indirect, or cumulative impacts.The subprojects financed by the World Bank should develop Environmental Assessment (EIA, EMP, and others), which is also required by national law in order to obtain the respective environmental permits.

Natural Habitats This safeguard is most likely triggered for projects located in a protected area or in environmentally sensitive or critical areas.Depending on the potential negative impacts to the natural habitats (flora and fauna), the subprojects require special studies to protect or preserve the species identified at risk of being affected. If a project can cause irreversible damages, it will be excluded.

Involuntary Resettlement

This safeguard is triggered when subprojects require the relocation of people or when compensation is required because subproject impacts livelihoods or natural resources. The affect could be minimal or substantial depending on whether houses or productive lands (legal or illegal) are impacted.These cases should require a Resettlement Action Plan (RAP) or Abbreviated Resettlement Action Plan (ARAP) according with the Bank’s guidelines.

Cultural Properties

This safeguard might be triggered if the subproject will affect any recognized cultural or archeological sites or during projects constructed (chance find).Investigations, Rescue, and Chance Finds Procedures Plan are the most common instruments required when this policy is triggered.

Safety of Dams This safeguard is relevant for subprojects involving the construction or rehabilitation of dams. For small dams, generic dam safety measures designed by qualified engineers are usually adequate. For large dams, the Bank requires a review of the investigation, design, and construction of the dam and the start of operations by an independent panel of experts; and the preparation and implementation of plans for construction supervision and quality assurance, instrumentation, operation and maintenance, and emergency.For subprojects that involve the use of existing dams or those under construction, the Bank requires that the subproject sponsors arrange for one or more independent dam specialists.

Projects on International Waters

This safeguard applies when potential international water rights may be an issue for subprojects on the following types of international waterways: rivers, canals, lakes, or similar body of water that forms a boundary between, or any river or body of surface water that flows through, two or more states; any tributary or other body of surface water; and any bay, gulf, strait, or channel bounded by two or more states or, if within one state, recognized as a necessary channel of communication between the open sea and other states, and any river flowing into such waters.

4.2 Safeguard Polices Triggered by the ESME Trust Fund in Kenya

Based on the type of activities expected to be carried out by the ESME-Kenya Trust Fund, during the Trust Fund preparation (concept stage) the World Bank Environmental Assessment Policy OP/BP 4.01 was triggered, especially for the management and final disposal of the batteries that are part of the OGL systems.

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The Involuntary Resettlement Policy (OP/BP 4.12); Natural Habitat Policy (OP/BP 4.04); and the Cultural Property Policy (OP/BP 4.11) are not triggered in this ESME-K Trust Fund. In this regard, applying the World Bank Environmental Assessment Policy guidelines, the ESME-K Trust Fund was classified as Category B and requires the present instrument in order to ensure compliance with national laws and the World Bank’s safeguards policies.

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5. Environmental and Social Analysis

A solar lantern is a portable lighting device consisting of a Photovoltaic (PV) module or panel, battery, lamp, and electronics. The battery, lamp, and electronics are placed in a suitable housing made of metal, plastic or fiber glass. The Solar lantern is suitable for either indoor or outdoor lighting, covering a full range of 360 degrees.

PV module converts sun light into electricity, charges the battery which powers the luminaire. The luminaire consists of a LED Lamp and an Electronic Circuit.

5.1 Environmental and Social impacts

5.1.1 Positive impacts

In tropical countries darkness begins around 6 p.m. and this time of day can be a time of increased activity. The transition to OGL will allow people to use their evening hours more effectively for both household and commercial activities. In the area of education, improved lighting will make a significant positive impact.

Solar power reduces the environmental impacts of combustion used in fossil fuel power generation, such as impacts from greenhouse gases and from other air pollution emissions. Unlike fossil fuel power generating facilities, solar facilities have very low air emissions of air pollutants such as sulfur dioxide, nitrogen oxides, carbon monoxide, volatile organic compounds, and the greenhouse gas carbon dioxide during operations. In addition, construction and operation of solar facilities creates both direct and indirect employment and additional income in the regions where the development occurs. The replacement of torches, which are currently available in rural markets, typically use non disposal batteries and have a very short time of live (a couple of weeks or months), and produce significantly more waste, including hazardous battery waste.

Compared to the other solutions, a solar lantern provides the biggest benefit for the smallest investment. In developing countries, they are one of the most practicable solutions to ensure a future supply of lighting. Using solar energy will not only improve the quality of lighting, but it will also prevent the burning of huge amounts of fossil fuels for lighting. Each solar-lantern will save 35 liters of kerosene per year. Africa consumes approximately 1.5 million tons of kerosene each year. In some countries, the cost of kerosene is already the single largest item on their foreign exchange budget. In third-world countries, where kerosene is expensive, the OGL can pay for themselves in a very short period of time. Furthermore, many accidents, fires and generally unhealthy side effects of kerosene lamps can be avoided.

Solar panels and solar lanterns offers smoke-free, brighter light at a lower cost than kerosene lamps; thus, health risks, and fire and environmental hazards are reduced and investment opportunities are created for micro-entrepreneurs. In terms of social impacts, solar energy helps to reduce health and safety risks associated with kerosene lighting: some 60% of child deaths in developing countries result from respiratory illnesses attributed partly to indoor air pollution;

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60% poisoning incidents are due to accidental kerosene ingestion by children3. In relation with the environmental impacts, the solar energy benefit is climate protection through reduced greenhouse gas emissions - some 100 tons per year for one thousand kerosene lamps replaced. Finally, on economic impacts, solar energy can save a typical rural household about US$ 120 over 3 years by eliminating the cost of kerosene. This way, households living on less than a dollar a day reduce their daily expenses by 10%.

5.1.2 Negative impacts

Although solar energy is cleaner than fossil fuels, the improper disposal of the solar panels and batteries once the lanterns have ran their useful life can have negative impacts on the environment.

a. Disposal

While solar panels are considered a green form of generating electricity, they may have some negative environmental impact when disposed of improperly. Many panels are constructed for 25 years of use. However, they can occasionally break and must be replaced after this time. There may be harmful chemicals contained in the panels, such as lead and cadmium that, if disposed improperly (e.g., with regular household waste), can seep into groundwater systems.

5.2 Environmental and Social mitigations measures

a. Maintenance

Solar panels are easy to maintain, but they can get very hot. Materials that touch a solar panel could easily catch fire. It’s always advisable to keep combustible materials away from solar panels. One should also trim back any nearby tree branches -- which will also help keep the panels out of the shade and make them more efficient. Keep the panels clean by hosing them down or wiping them off with a rag and some glass cleaner. Rodents may chew on wires, or the insulation on a wire might be inadequate and melt, so monitor them carefully. An exposed wire could lead to a fire.

b. Replacement

Once the battery has finished its useful life, it is recommended to return it to the distributor in order to ensure proper disposal and to avoid any negative impacts to the environment. The distributor, in turn, should take appropriate steps to dispose of the used batteries in an environmentally safe and friendly manner. A mini-waste management plan should be included in the EMSP.

3 Seed Initiative, Solanterns: Replacing 1 Million Kerosene Lanterns with 1 Million Solar Lanterns, www.seedinit.org, 2012

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6. Environmental and Social Management

The overall purpose of this chapter is to present some methodologies, instruments and internal formats for the environmental and social management that should be taken into account during the ESME-K implementation, in order to ensure the environmental and social sustainability of each grant and comply with the national law and the Bank’s Safeguard Polices.

Before presenting the methodologies, instruments and internal formats, the following section discusses the ESME-K project cycle and the role of the stakeholders that are involved in the project.

6.1 Project Cycle

GVEP will provide support to the distributors during the grant implementation in order to ensure high quality of each operation that meets the requirements and conditions of the ESME-K Trust Fund. Generally, the project cycle has five stages: (i) identification/application; (ii) assessment/appraisal; (iii) approval/ grant agreement; (iv) monitoring/supervision; and (v) impact monitoring.

a. Identification/Application

Application to GVEP for proposal development support: GVEP will be responsible for identifying potential applicants and will send out a request for proposals with promotional assistance from IFC Lighting Africa. Private sector enterprises that have experience in retailing off-grid lighting solutions and are interested in expanding their activities and market to rural areas, should first express their interest in participating in the project by filing an application4 to GVEP for support in the process. The aim is to familiarise the OGL Distributor with the grant requirements and start collecting the necessary information and documents that will be required in later stages in the project cycle.

The applicants will also be required to submit a concept note with their initial outline how the grant funding would be best used in their enterprise.

b. Assessment/Appraisal

Signing of Memorandum of Understanding (MoU) between the applicant and GVEP. If the application to GVEP has been approved, the parties will enter a MoU, which identifies the areas of collaboration and deliverables for both parties to submit a full application including a complete business plan. This MoU should be done only if the OGL Distributor is interested in GVEP support; if the OGL Distributor is interested to present a proposal without GVEP’s help, he should be allowed to do so. A confidentiality agreement should be included in the Grant Agreement.

4 Guidelines for Applying for Off-Grid ESME Trust Fund35

Development of Marketing and Business Plan for submission to ESME-K. At the OGL Distributor’s request, GVEP will provide advice on developing the proposal from a concept to a complete application. GVEP will work with the applicant on refining the business model, including the work plan and budget. The applicant can incorporate the feedback and ensure that all required information can be provided and all requirements for grant funding are met.

Review of the proposal and submission of grant request. GVEP will pre-screen received proposals for eligibility and pass on the proposals to the Evaluation Committee, which will evaluate the projects according to the pre-agreed criteria. Environmental sustainability is one of the criteria used.

ESME-K will review the proposal in an Evaluation Committee. Projects will be appraised by a technical committee comprising sector experts based on the criteria outlined below and submitted for approval to the Steering Committee. A member of the committee will also visit the applicant company in person. ESME-K can come back to the applicant with requests for clarifications or further information.

c. Approval/Grant Agreement

ESME-K Evaluation Committee approval and signature of grant agreement. If approved, ESME-K and the applicant will sign a standard grant agreement with the beneficiary enterprise, specifying disbursement schedules, deliverables and milestones as well as compliance with ESMF-K. In the case of a rejection, ESME-K will issue a letter to the applicant giving details on the criteria that have not been satisfactory. The applicant will be allowed to reapply if it addresses the shortcomings, subject to the availability of funding.

Funds will be disbursed through an initial advance to allow the companies to start the activities, after which further disbursements will be against the delivery of milestones that have been agreed in the grant contract with ESME-K.

d. Monitoring/Supervision

Monitoring and supervision during implementation. Monitoring and reporting of the planned activities by the GVEP will be required, including the submission of quarterly reports to GVEP. This must include the activities carried out over the last quarter and will be the basis for assessing progress and the achievement of the milestones, as agreed with ESME-K.

e. Impact Monitoring

In accordance with the responsibilities under the Grant Agreement with GVEP and OGL distributors, the grant recipient will have to monitor and measure the delivered outputs and the impacts of the grant funding on the business. An independent evaluation at the end of the ESME-K project will assist with the assessment of results.

Figure N° 6: ESME Kenya Trust Fund

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Source: GVEP, 2012

6.2 Roles and Responsibilities of the Stakeholders

a. Global Village Energy Partnership (GVEP)

GVEP is responsible for the environmental and social management of the ESME-K Trust Fund. The ESMF-K is the tool that GVEP will use to ensure the environmental and social sustainability of the grants and compliance with national environmental and social laws and with the World Bank Safeguard Policies.

Specifically, the responsibility of the ESMF implementation will be with the ESME-K Program Manager and his team. GVEP has two members of staff with expertise in solar PV markets in east Africa, including knowledge of current options for battery disposal. These staff members will be the first point of contact for the applicants. Additional advice may be procured if required. US$ 30,000 will be set aside from the ESME grant for this task.

b. National Environmental Management Authority (NEMA)

NEMA was established under the Environmental Management and Coordination Act (EMCA) No. 8 of 1999, as the principal instrument of government in the implementation of all policies relating to the environment. Through the Compliance and Enforcement Department (C&E), NEMA is responsible for the formulation of regulations and setting up standards; issuance of licenses or permits to operators; monitoring and inspecting activities to ensure regulatory compliance, license or permit conditions are being adhered to.

c. Off-Grid Lightening Distributors

The Off-Grid Lightening (OGL) Distributors are the parties responsible to develop all the documents required for the Trust Fund application and the studies required by the national law

37

and the Bank´s Safeguards Policies. These documents should be developed before the grant approval and its implementation will be during the trust fund implementation.

GVEP will provide technical assistance to the OGL Distributors for the implementation of their battery disposal measures by providing information on disposal options and providing additional technical expertise of specialized consultants if needed. As mentioned before, GVEP has two members of staff with expertise in solar PV markets in east Africa, including knowledge of current options for battery disposal. These staff members will be the first point of contact for the OGL Distributors.

d. World Bank

The World Bank is responsible for supervising GVEP’s implementation of the ESMF during the Trust Fund implementation.

6.3 Methodologies, Tools and Formats

This sub-chapter shows the 5 key internal environmental and social aspects that GVEP should take into account in order to assure an adequate environmental and social management during the project cycle: a) Environmental and social preliminary assessment; b) Environmental and social studies required by the national law and the World Bank Policies; c) Environmental and social estimated budget; d) Internal formats (template) for the environmental and social management; and e) Public participation and disclosure mechanism.

6.3.1 Environmental and Social Management Plan

6.3.2 Environmental and Social Studies

According to the national law, the distribution business of lanterns doesn’t require any environmental studies. Annex N° 2 presents the list of projects or activities that requires an EIAS according to the national law.

In order to comply with the Bank’s Environmental Assessment Policy (OP/BP 4.01), the Bank agreed with GVEP that the OGL Distributors require the preparation of Environmental Sustainability Plan (ESP), which will contain the following parts: (i) technical measures taken to reduce environmental impact of batteries – type of the battery, materials used, expected life of the battery etc., (ii) incentives that will be provided to the users to return OGL products/batteries to the distributors – such as discounts for new OGL products or battery replacements and (iii) distributors plan for battery disposal. These three main aspects will help that the distributors get their stock from reputable manufacturers who use environmentally sound production practices; incentivizing users to return batteries to the distributors for proper disposal; and proper disposal and waste management plan for distributors post battery collection. The ESP will be one of the evaluation criteria. The Evaluation Committee will receive a support of an environmental expert to evaluate these plans.

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Technical assistance funds will be set aside to assist the OGL Distributors to refine these ESPs during the implementation of the trust fund, as initial feedback on how these user incentives are received.

6.3.3 Internal Formats for the Environmental and Social Management

The following are some environmental and social formats or templates that should be prepared by the distributors and GVEP to systematize and organize the environmental and social management during the project cycle.

The formats that should be prepared during the project cycle are: a) Environmental Management Plan checklist (EMP); b) Environmental and Social Monitoring Report (ESMR); and c) Environmental and Social Final Report (ESFR).

a. Environmental and Social Preliminary Assessment Form (ESPAF)

The ESPAF is the first management format that should be prepared by the Distributor as part of the Grant Application during the first stage of the project cycle (Identification/Application Stage) in order to analyze the potential environmental and social risks; identify the environmental and social studies required in order to comply with Kenya’s national law (NEMA) and the World Bank Safeguards Policies; and to estimate the environmental and social budget for the ESP. The format of this instrument is presented in Annex N° 3.1.

b. Environmental and Social Monitoring Report (ESMR)

The ESMR is the second environmental and social management instrument that should be developed by the ESME-K team project during the implementation, in order to follow up and monitor the environmental aspects, especially in relation with the preparation of the ESP.

The ESMR contains basic information about periodic monitoring field visits in order to follow-up the environmental aspects. The format of this tool is presented in Annex N° 3.2.

c. Environmental and Social Final Report (ESFR)

Once the ESMF-K is finalized, a final report is required for each Operation/Distributor in order to review the environmental aspects and the ESP preparation and implementation. The format of this instrument is presented in the Annex N° 3.3.

6.3.4 Consultation, Public participation and disclosure mechanism

GVEP organized consultations in Nairobi on February 13, 2013 to discuss this ESMF including the potential environmental impacts of the project as well as planned mitigation measures and monitoring and evaluation. A complete record of these consultations is included in Annex 4.

In compliance with the Bank’s Operational Policy this ESMF will be disclosed on GVEP’s website and also in the Bank’s Infoshop.

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7. Procedures and Responsibilities

The following sections present the main internal procedures that GVEP and OGL distributors should take into account during the trust fund implementation in order to comply with the national environmental regulations and the Bank’s Safeguards Policies.

7.1 Internal procedures for the Environmental and Social Management

The internal environmental and social management includes all the activities, responsibilities, and management instruments that the ESME Trust Fund stakeholders should be engaged in during the project cycle to ensure the environmental and social quality of the subproject and to ensure compliance with national environmental and social laws and the Bank’s Safeguard Policies.

7.1.1 Stage 1: Identification/Application

At this stage, the OGL Distributor should include in the Grant Application the Environmental and Social Preliminary Assessment Form (ESPAF), which is the first internal tool for the environmental and social management, which should describe the main environmental and social aspects, the environmental and social risk level, the studies required by the law and the Bank’s Safeguards Policies, and the estimated budget for the Plans required in each operation.

7.1.2 Stage 2: Assessment/Appraisal

At this stage, once GVEP reviews the ESPAF and confirms if any environmental and social study is required to comply with national laws and the Bank’s Safeguards Policies, GVEP will request the distributor to prepare the studies. For the preparation of the ESP the OGL Distributor should take into account this ESMF and the national regulations (EMCA).

Once the OGL Distributors finalize the ESP, they send the document to GVEP for its review and comments.

7.1.3 Stage 3: Approval/Legal Agreement

GVEP will include in the Grant Agreement, an environmental and social clause in order to assure the compliance of the ESP that should be fine-tuned and implemented during the trust fund implementation.

7.1.4 Stage 4: Monitoring/Supervision

During the grant implementation GVEP will follow-up and monitor the environmental and social aspects. To conduct this follow-up, GVEP should use the second management instrument

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designed in this ESMF, which is the Environmental and Social Monitor Report (ESMR). The purpose of the ESMR is to record observations from the field visit and any resulting recommendations.

The ESMR will be used each time that GVEP makes a field visit to follow up the environmental aspects; the number of visits depends on the environmental and social risk levels (moderate risk level requires more site visits). If any environmental and social problem is found during the site visits, GVEP should send the ESMR to the OGL Distributor in order to take into account the observations.

Once the grant has been completed, GVEP should prepare the third management instrument called Environmental and Social Final Report (ESFR) to review implementation of the environmental aspects and the preparation of the ESP and its implementation if the OGL Distributor starts with this activity.

7.1.5 Stage 5: Impact Monitoring

An independent evaluation at the end of the ESME-K implementation will assist with the assessment of results.

7.2 Flowchart of the environmental and social management

The next figure presents the activities that the environmental and social management requires along the cycle project.

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Figure N° 7: Flow Chart of the Environmental and Social Management

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ANNEXES

Annex N° 1: World Bank Environmental and Social Safeguard Polices

1. Environmental Assessment (OP/BP 4.01)

This policy requires environmental assessment (EA) of projects/programs proposed for Bank financing to ensure that they are environmentally sustainable, and also to inform decision making. EA is a process where the breadth, depth, and type of analysis depend on the nature, scale, and potential environmental impact of the projects. The EA process takes into account the natural environment (air, water, and land); human health and safety; social aspects (involuntary resettlement, indigenous peoples, and cultural property); and trans-boundary and global environmental aspects.

The environmental and social impacts of the ESME Trust Fund will come from the subproject/rural electrification packages’ activities that will receive financing under the ESME Trust Fund. However, since the location of these subprojects will not be identified before appraisal of the program, the EA process calls for GVEP to prepare this ESMF to establish a mechanism to determine and assess future potential environmental and social impacts during implementation of the subproject/rural electrification packages under the proposed ESME Trust Fund, and then set out mitigation, monitoring, and institutional measures to be implemented during subproject operations to eliminate adverse environmental and social impacts, offset them, or reduce them to acceptable levels.

Therefore, this ESMF establishes the EA process for implementation of subproject activities in the proposed ESME Trust Fund.

2. Natural Habitats (OP/BP 4.04)

The World Bank does not support projects that, in the Bank's opinion, involve significant conversion or degradation of critical natural habitats. Wherever feasible, Bank-financed subprojects are sited on lands already converted (excluding any lands that in the Bank's opinion were converted in anticipation of the subproject). The Bank does not support projects involving the significant conversion of natural habitats unless there are no feasible alternatives for the project and its location, and comprehensive analysis demonstrates that overall benefits from the project substantially outweigh the environmental costs. If the EA indicates that a project would significantly convert or degrade natural habitats, the project includes mitigation measures acceptable to the Bank. Such mitigation measures include, as appropriate, minimizing habitat loss (for example, strategic habitat retention and post-development restoration) and establishing and maintaining an ecologically similar protected area. The Bank accepts other forms of mitigation measures only when they are technically justified.

In deciding whether to support a project with potential adverse impacts on a natural habitat, the Bank takes into account the client ability to implement the appropriate conservation and mitigation measures. If there are potential institutional capacity problems, the project should include components to develop the capacity of national and local institutions for effective environmental planning and management. The mitigation measures specified for the project may be used to enhance the practical field capacity of national and local institutions.

3. Cultural Property (OP/BP 4.11)

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Cultural property includes sites having archaeological (prehistoric), paleontological historical, religious, and unique natural significance. The Bank will normally decline to finance a subproject that will significantly damage irreplaceable cultural property, and will assist only those subprojects that are sited or designed so as to prevent such damage.

Annex N° 2: List of Projects or Activities that requires an EIAS

The projects to be subjected to EIAS are specified in the Second Schedule of EMCA 1999, and include:

1. General:a) an activity out of character with its surrounding;b) any structure of a scale not in keeping with its surrounding; andc) major changes in land use.

2. Urban Development including:a) designation of new townships;b) establishment of industrial estates;c) establishment or expansion of recreational areas;d) establishment or expansion of recreational townships in mountain areas, national parks and game reserves; ande) shopping centers and complexes.

3. Transportation including:a) all major roads;b) all roads in scenic, wooded or mountainous areas and wetlands;c) railway lines;d) airports and airfields;e) oil and gas pipelines; andf) water transport.

4. Dams, rivers and water resources including:a) storage dams, barrages and piers;b) river diversions and water transfer between catchments;c) flood control schemes; andd) drilling for the purpose of utilizing ground water resources including geothermal energy.

5. Aerial spraying.

6. Mining, including quarrying and open-cast extraction of:a) precious metals;b) gemstones;c) metalliferous ores;d) coal;e) phosphates; f) limestone and dolomite;g) stone and slate;h) aggregates, sand and gravel;i) clay;j) exploitation for the production of petroleum in any form; and

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k) extracting alluvial gold with use of mercury.

7. Forestry related activities including:a) timber harvesting;b) clearance of forest areas; andc) reforestation and afforestation.

8. Agriculture including:a) large-scale agriculture;b) use of pesticide;c) introduction of new crops and animals;d) use of fertilizers; ande) irrigation.

9. Processing and manufacturing industries including:a) mineral processing, reduction of ores and minerals;b) smelting and refining of ores and minerals;c) foundries;d) brick and earthward manufacture;e) cement works and lime processing;f) glass works;g) fertilizer manufacture or processing;h) explosive plants;i) oil refineries and petro-chemical works;j) tanning and dressing of hides and skins;k) abattoirs and meat-processing plants;l) chemical works and process plants;m) brewing and malting;n) bulk grain processing plants;o) fish-processing plants;p) pulp and paper mills;q) food-processing plantsr) plants for the manufacture or assembly of motor vehicles;s) plants for the construction or repair of aircraft or railway equipment;t) plants for the manufacture of tanks, reservoirs and sheet-metal containers;u) plants for the manufacture of coal briquettes;v) plant for manufacturing batteries;

10. Electrical infrastructure including:a) electricity generation stations;b) electrical transmission lines;c) electrical sub-stations;d) pumped-storage schemes.

11. Management of hydrocarbons including:a) storage of natural gas and combustible or explosive fuels.

12. Waste disposal including:a) sites for hazardous waste disposal;b) sewage disposal works;c) works involving major atmospheric emissions;d) works emitting offensive odors; and

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e) sites for solid waste disposal.

13. Natural conservation areas including:a) creation of national parks, game reserves and buffer zones;b) establishment of wilderness areas;c) formulation or modification of forest management policies;d) formulation or modification of water catchment management policies;e) policies for the management of ecosystems, especially by use of fire;f) commercial exploitation of natural fauna and flora;g) introduction of alien species of fauna and flora into ecosystems.

14. Nuclear Reactors.

15. Major developments in biotechnology including the introduction and testing of genetically modified organisms.

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Annex N° 3: Templates of the internal management

Annex 3.1: Environmental and Social Preliminary Assessment Form

Environmental Management Plan Checklist and Format for Low-Risk Topologies

For low-risk topologies, an alternative to the commonly used “full text” EMP format is to have a checklist approach. The goal is to provide a more streamlined approach to preparing EMPs. This checklist-type format is a “pragmatic good practice” approach to be user friendly and compatible with safeguard requirements.

The checklist-type format attempts to cover typical mitigation approaches to common low-risk topologies with minimal temporary localized impacts. It is anticipated that this format provides the key elements of an Environmental Management Plan (EMP) to meet World Bank Environmental Assessment requirements under World Bank safeguard policies (see Annex 2).

The EMP template (Annex 1) format has two parts:

Part I: constitutes a descriptive part (“site passport”) that describes the project specifics in terms of physical location, the institutional and legislative aspects, the project description, inclusive of the need for a capacity building program and description of the public consultation process. This section could be up to two pages long. Attachments for additional information can be supplemented if needed.

Part II: includes the environmental and social screening in a simple Yes/No format (Section A) followed by proposed mitigation measures for any given activity (Section B) and a template for a monitoring plan for activities during project construction and implementation (Section C). It retains the same format required for standard World Bank EMPs.

Application of the EMP-Checklist

For low-risk topologies, the practical application of the EMP-ckecklist would include the filling in of Part I to obtain and document all relevant site characteristics and activities. In Part 2 the type of foreseen activities, would be checked and the resulting provisions listed in Annex 2 highlighted (e.g. by hatching the field or copy pasting the relevant text passages into the special provisions of the tender documents).

The entire filled in tabular EMP is additionally attached as integral part to the works contract and, analogous to all technical and commercial terms, has to be signed by the contract parties.

For the monitoring of the Contractor’s safeguards due diligence the designated construction inspector works with Part C of the EMP Checklist, the monitoring plan. This should be developed site specifically and in necessary detail, defining clear criteria and parameters which can be included in the works contracts, which reflect the status of environmental practice on the construction site and which can be observed/measured/ quantified/verified by the inspector during the construction works. Part C would thus be filled in during the design process to fix key monitoring criteria which can be checked during and after works for compliance assurance and ultimately the Contractor’s remuneration.

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ANNEX A: Format for Environmental Management Plan

Environmental Management Plan (EMP)[Title]

[Country]

(Date)

PART I: Activity Description

1. Introduction

2. Project objective

3. Project description

4. Anticipated environmental footprint

5. Policy, legal and administrative framework6. Relevant world bank policies7. Implementation arrangements8. Environmental screening, assessment and management9. Potential Environmental Impacts10. Environmental Management Approach11. Monitoring and reporting

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 Part II : EMP Checklist for Activities

Section A: (a) INSTITUTIONAL & ADMINISTRATIVECountry

Project titleScope of project

and activityInstitutional

arrangements(Name and

contacts)

WB(Project Team

Leader)

Project Management Local Counterpart and/or Recipient

Implementation arrangements

(Name and contacts)

Safeguard Supervision

Local Counterpart Supervision

Local Inspectorate Supervision

Contactor

(b) SITE DESCRIPTIONName of siteDescribe site location

Attachment 1: Site Map [ ]Y [ ] N

Who owns the land?Geographic description(c) LEGISLATIONIdentify national & local legislation & permits that apply to project activity(d) PUBLIC CONSULTATIONIdentify when / where the public consultation process took place(e) INSTITUTIONAL CAPACITY BUILDINGWill there be any capacity building?

[ ] N or [ ]Y if Yes, Attachment 2 includes the capacity building program

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Section B: ENVIRONMENTAL & SOCIAL SCREENING

Will the site activity include/involve any of the following potential issues and/or impacts:

Activity and potential issues and/or impacts Status If YES see additionalreferences:

1. Building rehabilitation Site specific vehicular traffic Increase in dust and noise from demolition and/or construction Construction waste

[ ] YES [ ] NO Activity Box A& B below

2. New construction Excavation impacts and soil erosion Increase sediment loads in receiving waters Site specific vehicular traffic Increase in dust and noise from demolition and/or construction Construction waste

[ ] YES [ ] NO Activity Box A& B below

3. Individual wastewater treatment system Effluent and / or discharges into receiving waters

[ ] YES [ ] NO Activity Box A& C below

4. Historic building(s) and districts Risk of damage to known/unknown historical or archaeological sites

[ ] YES [ ] NO Activity Box A& D below

5. Acquisition of land5

Encroachment on private property Relocation of project affected persons Involuntary resettlement Impacts on livelihood incomes

[ ] YES [ ] NO Activity Box A& E below

6. Hazardous or toxic materials6

Removal and disposal of toxic and/or hazardous demolition and / or construction waste Storage of machine oils and lubricants Procurement or use of pesticides – or formulated products that are in the World Health

Organization (WHO ) Classes IA and IB, or formulation so products in Class II7

[ ] YES [ ] NO Activity Box A& F below

7. Impacts on forests, natural and/or protected areas [ ] YES [ ] NO Activity Box A& G below

5 Land acquisitions includes displacement of people, change of livelihood encroachment on private property this is to land that is purchased/transferred and affects people who are living and/or squatters and/or operate a business (kiosks) on land that is being acquired. 6 Toxic / hazardous material includes and is not limited to asbestos, toxic paints, removal of lead paint, hazardous pesticides etc.7 Reference: World Health Organization “Recommended Classification of Pesticides by Hazard and Guidelines to Classification” (IOMC, 2000-2002)

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Conversion of forested land, protected areas, or natural habitats for biofuel crops Encroachment on designated forests, buffer and /or protected areas Disturbance of locally protected biodiversity habitat

8. Handling / management of medical waste Clinical waste, sharps, pharmaceutical products (cytoxic and hazardous chemical

waste), radioactive waste, organic domestic waste, non-organic domestic waste On site or off-site disposal of medical waste

[ ] YES [ ] NO Activity Box A& H below

9. Traffic and Pedestrian Safety Site specific vehicular traffic Site is in a populated area

[ ] YES [ ] NO Activity Box A& I below

10. General land and water issues Contributes to irreversible land degradation, and /or siltation in waterways Includes impoundments in waterways (generally for water extraction) Groundwater extraction

[ ] YES [ ] NO Activity Box A& J below

ACTIVITY BOX PARAMETER GOOD PRACTICES MITIGATION MEASURES CHECKLISTA. General Conditions

Notification & Worker Safety

(a) Consult with the Task Team Lead and World Bank Safeguard Coordinators8 to discuss activities and the due diligence requirements

(b) The local construction and environment inspectorates and communities have been notified of upcoming activities

(c) The public has been notified of the works through appropriate notification in the media and/or at publicly accessible sites (including the site of the works)

(d) All legally required permits (to include not limited to land use, water use, resource use, dumping, sanitary inspection permit) have been acquired for proposed activity

(e) All work will be carried out in a safe and disciplined manner designed to minimize impacts on the environment and neighboring residents

(f) Workers’ personal protective equipment (PPE) will comply with international good practice (always hardhats, as needed masks and safety glasses, harnesses and safety boots)

(g) Appropriate signposting of the sites will inform workers of key rules and regulations to follow.B. General Rehabilitation and /or Construction Activities

Air Quality (a) During interior demolition use debris-chutes above the first floor(b) Keep demolition debris in controlled area and spray with water mist to reduce debris dust(c) Suppress dust during pneumatic drilling/wall destruction by ongoing water spraying and/or

installing dust screen enclosures at site(d) Keep surrounding environment (side walks, roads) free of debris to minimize dust(e) There will be no open burning of construction / waste material at the site(f) There will be no excessive idling of construction vehicles at sites

8 Regional Safeguard contact: http//safeguards51

ACTIVITY BOX PARAMETER GOOD PRACTICES MITIGATION MEASURES CHECKLISTNoise (a) Construction noise will be limited to restricted times agreed to in the permit

(b) During operations the engine covers of generators, air compressors and other powered mechanical equipment should be closed, and equipment placed as far away from residential areas as possible

Water Quality (a) The site will establish appropriate erosion and sediment control measures such as e.g. hay bales and / or silt fences to prevent sediment from moving off site and causing excessive turbidity in nearby streams and rivers.

Waste management (a) Waste collection and disposal pathways and sites will be identified for all major waste types expected from demolition and construction activities.

(b) Mineral construction and demolition wastes will be separated from general refuse, organic, liquid and chemical wastes by on-site sorting and stored in appropriate containers.

(c) Construction waste will be collected and disposed properly by licensed collectors(d) The records of waste disposal will be maintained as proof for proper management as designed.(e) Whenever feasible the contractor will reuse and recycle appropriate and viable materials (except

asbestos)

C. Individual wastewater treatment system

Water Quality (a) The approach to handling sanitary wastes and wastewater from building sites (installation or reconstruction) must be approved by the local authorities

(b) Before being discharged into receiving waters, effluents from individual wastewater systems must be treated in order to meet the minimal quality criteria set out by national guidelines on effluent quality and wastewater treatment

(c) Monitoring of new wastewater systems (before/after) will be carried outD. Historic building(s)

Cultural Heritage (a) If the building is a designated historic structure, very close to such a structure, or located in a designated historic district, notify and obtain approval/permits from local authorities and address all construction activities in line with local and national legislation

(b) Ensure that provisions are put in place so that artifacts or other possible “chance finds” encountered in excavation or construction are noted, officials contacted, and works activities delayed or modified to account for such finds.

E. Acquisition of land

Land Acquisition Plan/Framework

(a) If expropriation of land was not expected and is required, or if loss of access to income of legal or illegal users of land was not expected but may occur, then consult with Task Team Lead and /or Regional Safeguard Coordinator

(b) The approved Land Acquisition Plan/Framework (if required by the project) will be implementedF. Toxic Materials Asbestos management (a) If asbestos is located on the project site, mark clearly as hazardous material

(b) When possible the asbestos will be appropriately contained and sealed to minimize exposure(c) The asbestos prior to removal (if removal is necessary) will be treated with a wetting agent to

minimize asbestos dust(d) Asbestos will be handled and disposed by skilled & experienced professionals

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ACTIVITY BOX PARAMETER GOOD PRACTICES MITIGATION MEASURES CHECKLIST(e) If asbestos material is be stored temporarily, the wastes should be securely enclosed inside closed

containments and marked appropriately(f) The removed asbestos will not be reused

Toxic / hazardous waste management

(a) Temporarily storage on site of all hazardous or toxic substances will be in safe containers labeled with details of composition, properties and handling information

(b) The containers of hazardous substances should be placed in an leak-proof container to prevent spillage and leaching

(c) The wastes are transported by specially licensed carriers and disposed in a licensed facility.(d) Paints with toxic ingredients or solvents or lead-based paints will not be used

Pesticides (a) Follow recommend and minimum standards as described in the United Nations Food and Agriculture Organization (FAO) International Code of Conduct on the Distribution and Use of Pesticides (Rome, 2003)

(b) Promote use of ecologically based biological or environmental pest management practices (integrated pest management IPM)

G. Affects forests and/or protected areas

Protection (a) All recognized natural habitats and protected areas in the immediate vicinity of the activity will not be damaged or exploited, all staff will be strictly prohibited from hunting, foraging, logging or other damaging activities.

(b) For large trees in the vicinity of the activity, mark and cordon off with a fence large tress and protect root system and avoid any damage to the trees

(c) Adjacent wetlands and streams will be protected, from construction site run-off, with appropriate erosion and sediment control feature to include by not limited to hay bales, silt fences

(d) There will be no unlicensed borrow pits, quarries or waste dumps in adjacent areas, especially not in protected areas

(e) Forested areas/natural areas and protected will not be converted for bio-fuel crop production.H. Disposal of medical waste

Infrastructure for medical waste management

(a) In compliance with national regulations the contractor will insure that newly constructed and/or rehabilitated health care facilities include sufficient infrastructure for medical waste handling and disposal; this includes and not limited to: Special facilities for segregated healthcare waste (including soiled instruments “sharps”, and

human tissue or fluids) from other waste disposal:a. Clinical waste: yellow bags and containersb. Sharps – Special puncture resistant containers/boxesc. Domestic waste (non-organic): black bags and containers

Appropriate storage facilities for medical waste are in place; and If the activity includes facility-based treatment, appropriate disposal options are in place and

operationalI. Traffic and Direct or indirect (a) In compliance with national regulations the contractor will insure that the construction site is

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ACTIVITY BOX PARAMETER GOOD PRACTICES MITIGATION MEASURES CHECKLISTPedestrian Safety hazards to public traffic

and pedestrians by construction activities

properly secured and construction related traffic regulated. This includes but is not limited to Signposting, warning signs, barriers and traffic diversions: site will be clearly visible and the

public warned of all potential hazards Traffic management system and staff training, especially for site access and near-site heavy

traffic. Provision of safe passages and crossings for pedestrians where construction traffic interferes.

Adjustment of working hours to local traffic patterns, e.g. avoiding major transport activities during rush hours or times of livestock movement

Active traffic management by trained and visible staff at the site, if required for safe and convenient passage for the public.

Ensuring safe and continuous access to office facilities, shops and residences during renovation activities, if the buildings stay open for the public.

J. Land and Water General land and water uses

(a) Internationally accepted good land use practices in place to minimize land degradation, and /or siltation in waterways

(b) Impoundments of water will not affect the upstream and downstream riparians(c) Minimize excessive groundwater extraction and put in place appropriate conservation of water

measures which can contribute to significant water savings

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PART 3: MONITORING PLAN

Section C: MONITORING PLANPhase What

(Is the parameter to be

monitored?)

Where(Is the parameter

to be monitored?)

How(Is the parameter

to be monitored?)

When(Define the

frequency / or continuous?)

Why(Is the parameter

being monitored?)

Cost(if not

included in project budget)

Who(Is responsible

for monitoring?)

During activity preparation

During activity implementation

During activity supervision

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ANNEX B: Documents generally required by World Bank’s Safeguard Policies

Policy No. TopicDocuments / deliverables required during

preparation implementation operation

OP 4.01Environmental Screening / Assessment (EA)

EA process, including EMF, EIA, EMP, MP

EMP / MP (EMP) / MP

OP 4.04 NaturalHabitats

included in EA under OP 4.01

compensation plan, included in EMP + MP, OP

4.01

included in EMP + MP, OP 4.01

OP 4.09 PestManagement

included in EA under OP 4.01

Pest Management Plan (PMP)

(reference in ISR/ICR)

OP 4.10 IndigenousPeoples

social assessment, IPP IPP / RAP (reference in

ISR/ICR)

OP 4.11 Physical CulturalResources

included in EA under OP 4.01

PCR management plan (part of EA)

(reference in ISR/ICR)

OP 4.12 Involuntary Resettlement

RAP (and other instruments)

RAP (and other instruments)

(reference in ISR/ICR)

OP 4.36 Forest included in EA under OP 4.01

included in EMP + MP, OP 4.01

included in EMP + MP, OP 4.01

OP 4.37 Safetyof Dams

dam safety report (DSR), TOR for

PoE

DSR & emergency preparedness plan

(ERP)

DSR & emergency preparedness

plan9, dam instrumentation & monitoring plan

OP 17.50 Disclosure SIR SCR, disclosure of ESIA & EMP

contd. information & consultation

OP/BP 7.50 International Waterways notification of all affected riparian states

OP/BP 7.60 Disputed Areas legal / political negotiations

Fields hatched in grey: no specific documents required at preparation stage

Acronyms:DSR dam safety report EA environmental assessment processEIA environmental impact assessment report EMF environmental management frameworkEMP environmental management plan ESIA environmental / social impact assessmentERP emergency response plan IPP indigenous peoples planICR implementation completion report MP monitoring planISR implementation status report PoE Panel of ExpertsPCR physical cultural resources RAP resettlement action planSCR stakeholder consultation report SIR stakeholder identification report

9 This is commonly not released to the Public.

Annex 3.2: Environmental and Social Monitoring Report

ESMREnvironmental and Social Monitoring Report

Distributor: __________________________________________ Env. Classification: ______

Name Manager: ______________________________________ _______________________ Sign

Name Evaluator: _____________________________________ _______________________ Sign

1. Environmental and Social EffectsSummary of the environmental effects of the subproject predicted during operation investments.

2. Environmental and Social Effects Observed in the Field VisitSummary of the environmental effects observed in the field visit:

- Predicted effects and nature of observation; and- Unpredicted effects and nature of observation.

People participating in the field visit:

Name Institution Charge Sign

3. Compliance of the Environmental and Social SpecificationAssessment of how the investments is complying with environmental design specifications, including environmental protection and control, mitigation, and compensation measures, if any.

4. Results of the Field VisitProvide results of the evaluation of specific biophysical and socioeconomic effects, including deviations from baseline values if available.

5. Conclusions and Recommendations for the investmentsRecommend adjustments to the activities if any, including rationale for the recommendations.

6. Conclusions and Recommendations for monitoringRecommend adjustments to the monitoring, if any, including rationale for recommendations.

7. Other Observations, Recommendations, and Conclusions

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Annex 3.3: Environmental and Social Final Report

ESFREnvironmental and Social Final Report

Distributor: __________________________________________ Env. Classification: ______

Name Manager: ______________________________________ _______________________ Sign

Name Evaluator: _____________________________________ _______________________ Sign

1. Activities Realized

On (date) ___________, the final review of the environmental and social aspects corresponding to the activity _________________________ was conducted to verify fulfillment of the mitigation measures proposed for the investments, as well as to ascertain if other negative impacts have appeared during the period in which the activity took place. There was content the commission integrated by the following persons:

Name Institution Charge Sign

2. Background

Capture case record including dates, brief narration of the problem, and recommendations from previous opportunities.

3. Results of the Examination

Describe in detail the conditions in which the mitigation measures were developed, the grade of fulfillment, and current state, explaining when necessary reasons why measures have not been completed. Completing the table below will help visualize this information.

No. Mitigation measuresAccomplishment Time still needed to

accomplish measures ObservationsYes No %

4. Conclusions Based on the examination, prepare conclusions regarding fulfillment of the mitigation measures and recommendations.

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