Power Sector Guarantee Project (PSGP)
E2988v5
Environmental and Social Management
Framework (ESMF)
for
Distribution Component
Of the
Power Sector Guarantee Project (PSGP).
Prepared by
The Environment, Resettlement and Social Unit (ERSU),
Project Management Unit (PMU)
Power Holding Company of Nigeria (PHCN),
7 Hombori Street, Off Freetown Street,
Wuse II, Abuja, Nigeria
June, 2013.
Power Sector Guarantee Project (PSGP)
Acronyms
AGISAbuja Geographic Information System
AIPPAgura Independent Power Project
APLAdaptable Program Loan
ASCONAluminum Smelting Company
CDPCommunity Development Program
CEOChief Executive Officer
CLOCommunity Liaison Officer
DisCoDistribution Company
DPRDepartment of Petroleum Resources
EAEnvironmental Audit
EADEnvironment Assessment Division
EHSEnvironmental Health and Safety
EIAEnvironmental Impact Assessment
EMF Electromotive Force
EMPEnvironmental Management Plan
EPIC Electric Power Implementation Committee
EPAEnvironmental Protection Agency
EPPEmergency Power Providers
EPZExport Processing Zone
ERSUEnvironment, Resettlement and Social Unit
ESIAEnvironmental and Social Impact Assessment
ESMFEnvironmental and Social Management Framework
ESMPEnvironmental and Social Management Plan
FCDA Federal Capital Development Authority
FCTFederalCapitalTerritory
FEPA Federal Environmental Protection Agency
FGNFederal Government of Nigeria
FMEH Federal Ministry of Environment and Housing
FMEnv Federal Ministry of the Environment
GenCoGeneration Company
GHGGreen House Gas
HVDSHigh Voltage Distribution System
IDA International Development Association
IFCInternational Finance Corporation
IOCInternational Oil Company
IPPIndependent Power Producer
IUCN International Union for the Conservation of Nature
JVJoint Venture
LGCLocal Government Council
Mmcfdmillion cubic feet per day
MWMega Watts
MYTOMulti-Year Tariff Order
NBANiger Basin Authority
NBETNigeria Bulk Electricity Trader
NCP National Council on Privatization
NEDPNational Energy Development Project
NEGIPNigeria Electricity and Gas Improvement Project
NEPANationalElectric Power Authority
NERCNational Electricity Regulatory Commission
NGC Nigeria Gas Company
NGONon-Governmental Organization
NIPP National Integrated Power Project
NMNautical Mile
NNPCNigeria National Petroleum Corporation
OH&SOccupational Health and Safety
PHCNPower Holding Company of Nigeria
PIPPower Implementation Plans
PMUProject Management Unit
PPAPower Purchase Agreement
PRGPartial Risk Guarantee
PSGPPower Sector Guarantee Project
QIPPQua-Iboe Power Project
RAP Resettlement Action Plan
REARural Electrification Agency
ROWRight of Way
RPFResettlement Policy Framework
RTMRegional Transmission Manager
TCFTrillion Cubic Feet
TCNTransmission Company of Nigeria
TDPTransmission Development Project
TTLTask Team Leader
WBGWorld Bank Group
WCMWork Centre Manager
WRD-SEMWater Resources Development and Sustainable Ecosystems Management Programme
Table of Contents
Acronyms
Table of Contents
Executive Summary
1Introduction
2Description of the Environment
2.1Bio-Physical Environment
2.2Vegetation
2.3Political Geography and Population
2.4Natural Resources and Land Use
3World Bank SAFEGUARD Policies...... 12
3.1OP/BP 4.01: Environmental Assessment...... 12
3.2POLUTION STANDARDS...... 12
3.3HEALTH AND SAFETY STANDARDS ...... 14
4Nigeria Regulatory Framework...... 15
4.1Environmental Impact Assessment Act (Decree 86) of 1992...... 15
4.2Pollution Standards
4.3Land use Act of 1978 (amended in 1990)
4.4International Conventions and Treaties RATIFIED BY NIGERIA
5Description of the Energy Sector
5.1Reforms in the Energy Sector
5.2Sector Institutions
6Project Description
6.1Project Concept
6.2Project Components and Intervention Plan
7Safeguards Preparation, Review and Approval Process
8Potential Impacts of NEGIP
8.1Impacts of NEGIP ON THE Niger Delta
9Institutional Capacity for Environmental Management
9.1ERSU Skills and Gaps
9.2PHCN
9.3FMEnv
9.4Relationship between the Federal AND State Government
Annex 1.Cost Breakdown for ERSU in NEGIP
Annex 2.Safeguards Tables
Annex 3.Contents of an EIA
Annex 4.Guidelines for the preparation of EMP
Executive Summary
This Environmental and Social Management Framework (ESMF) is an assessment tool for the proposed Nigeria Power Sector Guarantees Project (PSGP). The overall PSGP by environmental screening is a category ‘A’ project, in which each partial risk guarantee (PRG) will be presented to the World Bank Board for approval. For PRGs issued to the developers of new IPP power plants, a full ESIA is required according to World Bank and Government standards,[1] and the ESIA for each plant being considered for a PRG will be prepared, approved and disclosed prior to approval.
PRGs may also be requested for various distribution companies (DisCos.) that are taking over the operation and maintenance of power distribution in Nigeria under a privatization program. The investments the DisCos will need to make in their respective systems may not be known with certainty at the time a PRG is issued. They are unlikely to require full ESIAs under World Bank or Government procedures, but new infrastructure investments by the DisCos are likely to need some level of environmental assessment culminating in formulation of environmental and social management plans (ESMP). For work at existing injection substations or other facilities that may be included in a DisCo’s program, an environmental audit (EA) will be conducted as a first step in the implementation process to determine the physical state of the facilities, the viability of investing in their rehabilitation from an environmental management perspective, and the potential environmental and social impacts associated with the rehabilitation project.This document sets out a framework to guide DisCos in carrying out the necessary environmental and social assessment or audit and preparing the appropriate safeguards instrument for each distribution system PRG.
A Resettlement Policy Framework (RPF) is also beingprepared and will be disclosed as a separate document. Following the procedures set out in the RPF, a Resettlement Action Plan (RAP) will be prepared by each subproject sponsor using the template as specified in the PSGP RPFif relocation or loss of assets or means of livelihood will be involved.
The Environment, Resettlement & Social Unit (ERSU) of PMU possesses demonstrated capacity to guide the DisCos in preparing and putting into effect the ESMPs and EAs required for the environmentally and socially sustainable implementation of investments in their respective distribution systems. The ERSU will serve as PSGP’s first-line reviewer and monitor of ESMF implementation.
1Introduction
The Nigerian Power Sector suffered long periods of neglect due to the monopoly of electricity by NEPA with decades of virtually no investment by the Government particularly during the military regimes. This led to the decay of electricity infrastructure, loss of assets of the sole government electric utility and a general lack of capacity to meet the electricity demands within the country. With the advent of democracy in 1999, the Federal Government of Nigeria took certain steps to restorethe electric power sector by investing in the transmission development project (TDP), seconded by the National energy development Project (NEDP)which contained a little sub-component of distribution project called CREST Project (Conversion of Low voltage to high voltage distribution systems (HVDS) to improve the quality of lighting and prevent current wastages. This was followed by the studies carried out on the best ways to improve generation capacityand investing in the Water Resources Development and Sustainable Ecosystems Management Programme – WRD-SEM). The government also embarked on the reform of the sector by passing the Electric Power Sector Reform Act into law in 2005. This Act was aimed at unbundling the National Electric Power Authority (NEPA) into eighteen Business Units that will, eventually, become privately owned companies.
These efforts were aimed at bridging the gap between electric power demand and power generated by the government utility. This gap was estimated in 2008 to be in the region of 8,700 MW and is mainly due to (i) lack of adequate generating units to put energy on the national grid and (ii) lack of gas to fire the available plants. A number of existing power plants are out of service for reasons ranging from lack of maintenance to lack of spares. The Nigeria Gas Company (NGC) is also not able to supply enough gas to the thermal plants to ensure the running of all available units. Although Nigeria has vast reserves of gas, much of this is flared.
As part of its strategy, the Federal Government of Nigeria (FGN) has asked the Bank to support a Nigeria Power Sector Guarantee Project (PSGP) under NEGIP that will promote private-sector development of gas-fired power generation, and also to finance new distribution capacity to deliver the additional power to the national grid. The program will be in two phases.
Each PRG for a generation plant will be presented to the Bank’s Board for approval, along with a full ESIA and, where required, a Resettlement Action Plan. In the case of PRGs for distribution companies (DisCos), the specific activities a DisCo may need to carry out in its system will not be known at the time the PRG is agreed. The World Bank environmental assessment policy requires the borrower to prepare an Environmental and Social Management Framework (ESMF) that is to establish the mechanism whereby a DisCo will assessthe environmental and social impacts of its proposed activities before undertaking them, and to set out, in general, the mitigation, monitoring and institutional measures to be taken during implementation and operation of the program to eliminate adverse environmental and social impacts, offset them, or reduce them to acceptable minimal levels.
This ESMF therefore provides the expected guidelines and defines the procedures for the safeguards instrumentsthat will be prepared and implemented for each DisCosub-project of the PSGP. This document is in compliance with the Bank safeguards policies and the relevant Nigerian environmental policies, laws, and regulations.
Furthermore, the borrower has also prepared a Resettlement Policy Framework (RPF) - a separate/stand-alone document -to address the needs of those who might be affected when a DisCosub-project supported by the PSGP requires the acquisition of land and other assets resulting in: (a) relocation or loss of shelter, (b) loss of assets or access to assets (c) loss of income sources or means of livelihoods, whether or not the affected person must move to another location.
The borrower is further required to disclose both documents (the ESMF and the RPF) in-country as two separate draft documents so that they are accessible by the general public, local communities, potential project-affected groups, local NGOs and all other stakeholders. They will also be disclosed by the Bank at its Info-Shop in Washington D.C and in the Public Information Center of its field office in Abuja. The date for the disclosure of these documents will precede the date for appraisal of the investment program. Stakeholders must be consulted during preparation of the ESMF and RPF and must be given ample opportunity to review and comment on the drafts. The final versions of both documents will be disclosed at the same locations and will include summaries of the consultations, the comments and suggestions received, and their disposition.
2Description of the Nigerian Environment
2.1Bio-Physical Environment
The Federal Republic of Nigeria is located on the west coast of Africa and is bounded on the west by Benin Republic (with a boundary of about 773 km), on the north by Niger (with a boundary of 1,497 km), on the east by Chad and Cameroon (with a combined boundary of 1,777 km) and on the south by the Gulf of Guinea (853 km of coastline). Ithas a continental shelf of 200 m depth, an exclusive economic zone of 200 nautical miles (NM) and a territorial sea of 12 NM. Nigeria lies around latitude 10o00’N and Longitude 8o00’E and has a total area of 923,768 km2.
It consists of four major natural zones: a 60-km wide coastal band in the south indented by lagoons and by the immense Niger River Delta; a stretch of high forest-covered mountains (Shebshi Mountains) rising to heights of about 2,042 m above sea level in the west; the Jos Plateau (1,200 m) in the centre; the Highlands along the eastern border, south of the Benue River; and the plain of Sokoto and the Lake Chad Basin in the north, which forms part of the Sahel region, and is semi desert. The highest point in Nigeria is Chappal Waddi at 2,419 m (7,936 feet). The River Niger traverses the country from the northwest, meets the River Benue at Lokoja in the central part of the country before draining into the Atlantic in a deltaic fashion, popularly known as the Niger Delta.
The Niger Delta is one of the largest deltas in the world. Located in southeastern Nigeria, it covers over 20,000 square kilometers. The Niger Delta receives inputs from a total catchment area of 2.23 million km2 and has the fourth largest average annual discharge in Africa: 180 billion m3. Within the Delta floodplain, the river splits into six major tidal channels and innumerable smaller outlets. Fluvial sediments are deposited throughout the Delta with sand and silt suspension during both high and low flood regimes. Construction of dams along the Niger during the last twenty-five years has significantly modified flow regimes and sediment deposition. Tidal currents, which range up to 1.5 m/sec, determine sediment settling patterns near the coast. The Niger Delta hosts most of the Oil Wells and Gas fields from which the Gas-fired Power Plants receive the gas required to fire their turbines.
Nigeria is divided into three main climatic regions: the tropical rain forest region covering the southern part of the country with an annual rainfall of around 2,000 mm (80 inches), the near desert region covering the far north of the country with an annual rainfall around 500 mm (20 inches) and the savannah region with annual rains around 1,000 mm (40 inches) and covering the central portion of the country.
2.2Vegetation
The vegetation of Nigeria is of three main types: Savannah, RainForest and Montane. The savannah vegetation stretches from the central parts of Nigeria to the extreme northern parts. It is divided into marginal – Sahelsavannah– (in the northeastern borders), short grass – Sudan – savannah (stretching from upper western borders to the northwestern borders) and woodland and tall grass – Guinea – savannah (lying below the short grass savannah and covering the central states and parts of the eastern region of the country). The tropical forest vegetation covers the remaining southern portion of the country and is divided into three types: rain forest (with tall trees), fresh water swamp (consistingof both fresh and salt water swamps) and mangrove forest (made up of mangrove vegetation).
2.3Political Geography and Population
The Federal Republic of Nigeria is made up of thirty-six states with a federal capital territory, Abuja. Each state is ruled by an elected governor and is assisted by a deputy. It is sub-divided into local government areas, each headed by an elected Local Government Chairman. The country as a whole is ruled by a democratically elected President and assisted by a Vice President.
The 2006 national population census put the population of Nigeria at 140 million, the most populous in Africa. Of this number, 68.3 m are women, while 71.7 m are men. The population growth rate is 2.4%. In general, Nigeria has a young population with a median age of 18.7 years.
Nigeria has more than 250 ethnic groups, with varying languages and customs, creating a country of rich ethnic diversity. The largest ethnic groups are the Fulani/Hausa, Yoruba, and Igbo, accounting for 68% of population, while the Edo, Ijaw (10%), Kanuri, Ibibio, Ebira Nupe and Tiv comprise 27%; other minorities make up the remaining 7%.
Despite its vast government revenue from the mining of petroleum, Nigeria is beset by a number of societal problems. Some of these problems are listed below.
There is evidence that the key health indicators have either stagnated or declined. Life expectancy is 48.5 years for females and 47.2 years for males. The infant mortality rate is 94 per 1,000 live births. About 52% of under-five deaths are associated with malnutrition. The maternal mortality rate of 800 per 100,000 live births is one of the highest in the world.
Disease prevalence rates include malaria, 919/100,000; dysentery, 386/100,000; pneumonia, 146/100,000; and measles, 89/100,000. The national median prevalence rate of HIV is 5.8%. Over 40 million Nigerians are exposed to Onchocerciasis; and about 120,000 have gone blind from the disease. Schistosomiasis is prevalent in rural areas which lack potable water, and control of the infection has been limited by the high cost of the drug of choice.
Due to its multitude of diverse, sometimes competing ethno-linguistic groups, Nigeria has seen sectarian tensions and violence. There are significant tensions on a national scale, especially between the primarily Muslim, highly conservative northern population and the Christian population from the Southern part of the country. Nigeria has witnessed a rise in Islamic insurgence, accounting for the death of many residents(especially in the far north), destruction of property worth millions of naira and stagnation of development.
2.4Natural Resources and Land Use
2.4.1 Agricultural Resources
Nigeria has abundant human and natural resources. Agriculture used to be the mainstay of the economy before the discovery of crude oil. Cocoa, rubber and kola nut are cultivated in the southwestern region in commercial quantities for export. Oil palm is cultivated in the southeastern parts of the country, and processed into palm oil and packaged for export. The northern parts of the country were known for groundnut and cotton production. With the production of crude oil, however, and the onset of, much agricultural production has declined.
2.4.2 Biodiversity
Nigeria is an important centre for biodiversity. It is widely believed that the areas surrounding Calabar in CrossRiverStatecontain the world's largest diversity of butterflies. The drill monkey is only found in the wild in Southeast Nigeria and neighboring Cameroon.
The total number of higher plant species in Nigeria is 4,715 (of which 119 are threatened). For mammals, the total number of species is 274 (27 threatened), and for breeding birds the total known species is 286 (9 threatened).
Nigeria has over 1,000 protected areas (nature reserves, wilderness areas, national parks), covering a total 5.5 million ha. The total land area under protection represents 6% of the total land area. Undercategories I and II (the highest level of protection) Nigeria has 2.5 million ha.
2.4.3 Mineral Resources
There are varieties of mineral resources found throughout the country; some are of great economic significance, while others are in small quantities. Most of these minerals occur near the soil surface and do not require specialized equipment for extraction. The schist belt of the country stretches from the northwest to the southwest, and hosts the gold deposits of the country. The occurrence is moderate, but is mined by locals for commercial benefits. Typical sites are in Ilesha in EkitiState.