Section I – Basic Information
Date ISDS Prepared/Updated: March 22, 2005 Report No.:AC1140
A. Basic Project Data
A.1. Project Statistics
Country: Croatia / Project ID: P071464
GEF Focal Area: Climate Change / Global Supplemental ID:
Project: CROATIA - RENEWABLE ENERGY RESOURCES PROJECT / TTL: Peter Johansen
Total project cost (by component):
Appraisal Date: November 30, 2004 / Loan/Credit amount($m):
Board Date: April 28, 2005
Other financing amounts by source: / ($m.)
GLOBAL ENVIRONMENT FACILITY / 5.5
RECIPIENT / 3.0
Managing Unit: ECSIE / Sector: Renewable energy (60%);Power (20%);District heating and energy efficiency services (20%)
Lending Instruments: GEF Grant
Is this project processed under OP 8.50 (Emergency recovery? / Yes? / [ ] / No? / [x ]
Environmental Category: C
A.2. Project Objectives
The objective of the proposed project is to help develop an economically and environmentally sustainable market for renewable energy resources in Croatia. Development of this market will support Croatia in its EU accession efforts. In addition, the project will help make Croatia’s economy less reliant on imported electricity and fossil fuels, reduce overall emissions, lead to a higher degree of local equipment manufacturing, and create an attractive climate for private investment in renewable energy, and generate local industry and employment.
The project will in principle deal with both the production of electricity and heat from RER. However, most of the emphasis will be on electricity production (from wind farms and biomass fired cogeneration plants).
A.3. Project Description
Implementation of the project will include two components:
Market Framework (GEF grant of US$2.0 million). This component will comprise technical assistance focused on supporting the Government in designing and implementing policy and secondary legislation on the inclusion of RE in the electricity sector. The component will also include support to the market operator (MO), distribution system operator (DSO), transmission system operator (TSO), Croatian Energy Regulatory Agency (CERA), and local governments in streamlining the permitting process. Technical assistance will be comprised primarily of legal and technical support and advice to the institutions and government entities involved in creating the regulatory framework for the sector. Capacity building within the same institutions will be required to implement the new regulations and system. A monitoring, evaluation and information dissemination subcomponent is included, along with financial support for the Project Management Unit. Additional beneficiaries will include the Ministry of Economy, Labour and Entrepreneurship (MoELE), Ministry of Environmental Protection, Physical Planning and Construction (MoEPPPC), the Environmental Protection and Energy Efficiency Fund (EPEEF), HEP (in its capacity as TSO and DSO), NGOs, the banking community, policy-makers, regulatory authority, and private developers.
Project Preparation (GEF Contingent Loan of US$2.0 million and grant of US$1.5 million; total US$3.5 million). The contingent loan mechanism and supporting activities will be used to identify candidate projects for investment and to cover initial project development cost (feasibility studies). The contingent loan facility (US$2.0 million) will provide loans to qualified project developers on a cost-sharing basis. The loans will be capitalized in the project financing and repaid, or if the projects do not move to implementation the contingent loan will be converted to a grant. Funds that are recovered will be recycled and used in future projects. In addition to and separate from the contingent loan facility, US$1.5 million will be used for project development and project investment support. Project development support will focus on development of a sustainable pipeline of potential projects that can provide deal flow for EPEEF and the contingent loan facility. This will be facilitated by creation of a national energy centers that will provide information and know-how to private developers. Project investment support will include capacity building and financial advice to EPEEF, commercial banks and municipal finance authorities.
A.4. Project Location and salient physical characteristics relevant to the safeguard analysis:
N/A
B. Check Environmental Category A [ ], B [ ], C [X], FI [ ]
The project consists only of Technical Assistance and support to feasibility studies.
Comments:
C. Safeguard Policies Triggered
Yes / No
Environmental Assessment (OP/BP/GP 4.01) / [ ] / [x]
Natural Habitats (OP/BP 4.04) / [ ] / [x]
Pest Management (OP 4.09) / [ ] / [x]
Cultural Property (draft OP 4.11 - OPN 11.03-) / [ ] / [x]
Involuntary Resettlement (OP/BP 4.12) / [ ] / [x]
Indigenous Peoples (OD 4.20) / [ ] / [x]
Forests (OP/BP 4.36) / [ ] / [x]
Safety of Dams (OP/BP 4.37) / [ ] / [x]
Projects in Disputed Areas (OP/BP/GP 7.60)[*] / [ ] / [x]
Projects on International Waterways (OP/BP/GP 7.50) / [ ] / [x]
Section II – Key Safeguard Issues and Their Management
D. Summary of Key Safeguard Issues.D.1. Describe any safeguard issues and impacts associated with the proposed project. Identify and describe any potential large scale, significant and/or irreversible impacts.
Environmental:
In accordance with World Bank safeguard policies on environment (OP/BP/GP 4.01 Environmental Assessment) the project was assigned Category C, indicating that no environmental issues are anticipated. This was based upon the project design which is primarily technical assistance and does not include any physical construction activities. In fact, the project is likely to have future environmental benefits because the facilitation of investments in renewable energy indirectly will result in major positive impacts on the environment, in terms of increased use of renewable energy resources, reduced air pollution and reduced greenhouse gas emissions.
However, there could be some potential reputational risk that the Bank faces by virtue of the fact that feasibility studies funded by the contingent loan facility may lead to projects that may later have some negative environmental impact. For example, a wind farm could, through poor environmental planning, result in avian mortality. However, this will be mitigated through the inclusion of environmental assessments following World Bank guidelines as mandatory components in the Feasibility Studies to be supported. Furthermore, the project will support the MoEPPPC in developing general standards for environmental assessments and clearance procedures that should minimize the risk of poor projects being cleared.
All consultant contracts in connection with the TA will require the assistance rendered to be consistent with Bank Safeguard Policies. Compliance will be supervised closely ensuring that the advice provided by the consultants to the Croatian authorities is consistent with the Bank’s safeguards policies.
Social:
There are no critical social issues related to the project.
D.2 Describe any potential indirect and/or long term impacts due to anticipated future activities in the project area. N/A
D.3. Describe the treatment of alternatives (if relevant)
N/A
D.4. Describe measures taken by the borrower to address safeguard issues. Provide an assessment of borrower capacity to plan and implement the measures described.
The technical aspects of the Contingent Loan Facility will be the responsibility of the Environmental Protection and Energy Efficiency Fund (EPEEF) which is linked to the MoEPPPC. EPEEF is estimated to be in a good position to address environmental safeguards issues.
D.5. Identify the key stakeholders and describe the mechanisms for consultation and disclosure on safeguard policies, with an emphasis on potentially affected people.
N/A
F. Disclosure Requirements Date
Environmental Assessment/Audit/Management Plan/Other:
Date of receipt by the Bank …/…/… or Not Applicable
Date of “in-country” disclosure …/…/… or Not Applicable
Date of submission to InfoShop …/…/… or Not Applicable
For category A projects, date of distributing the Executive Summary of the EA to the Executive Directors …/…/… or Not Applicable
Resettlement Action Plan/Framework/Policy Process:
Date of receipt by the Bank …/…/… or Not Applicable
Date of “in-country” disclosure …/…/… or Not Applicable
Date of submission to InfoShop …/…/… or Not Applicable
Indigenous Peoples Development Plan/Framework:
Date of receipt by the Bank …/…/… or Not Applicable
Date of “in-country” disclosure …/…/… or Not Applicable
Date of submission to InfoShop …/…/… or Not Applicable
Pest Management Plan:
Date of receipt by the Bank …/…/… or Not Applicable
Date of “in-country” disclosure …/…/… or Not Applicable
Date of submission to InfoShop …/…/… or Not Applicable
Dam Safety Management Plan:
Date of receipt by the Bank …/…/… or Not Applicable
Date of “in-country” disclosure …/…/… or Not Applicable
Date of submission to InfoShop …/…/… or Not Applicable
If in-country disclosure of any of the above documents is not expected, please explain why.
Section III – Compliance Monitoring Indicators at the Corporate Level
(To be filled in when the ISDS is finalized by the project decision meeting)
OP/BP 4.01 - Environment Assessment: / Yes / No
Does the project require a stand-alone EA (including EMP) report? / X
If yes, then did the Regional Environment Unit review and approve the EA report?
Are the cost and the accountabilities for the EMP incorporated in the credit/loan?
OP/BP 4.04 - Natural Habitats: / Yes / No
Would the project result in any significant conversion or degradation of critical natural habitats? / X
If the project would result in significant conversion or degradation of other (non-critical) natural habitats, does the project include mitigation measures acceptable to the Bank?
OP 4.09 - Pest Management: / Yes / No
Does the EA adequately address the pest management issues? / N/A
Is a separate PMP required? / N/A
If yes, are PMP requirements included in project design?
Draft OP 4.11 (OPN 11.03) - Cultural Property: / Yes / No
Does the EA include adequate measures? / N/A
Does the credit/loan incorporate mechanisms to mitigate the potential adverse impacts on physical cultural resources?
OD 4.20 - Indigenous Peoples: / Yes / No
Has a separate indigenous people development plan been prepared in consultation with the Indigenous People? / N/A
If yes, then did the Regional Social Development Unit review and approve the plan? / N/A
If the whole project is designed to benefit IP, has the design been reviewed and approved by the Regional Social Development Unit?
OP/BP 4.12 - Involuntary Resettlement: / Yes / No
Has a resettlement action plan, policy framework or policy process been prepared? / N/A
If yes, then did the Regional Social Development Unit review and approve the plan / policy framework / policy process?
OP/BP 4.36 – Forests: / Yes / No
Has the sector-wide analysis of policy and institutional issues and constraints been carried out? / N/A
Does the project design include satisfactory measures to overcome these constraints? / N/A
Does the project finance commercial harvesting, and if so, does it include provisions for certification system? / N/A
OP/BP 4.37 - Safety of Dams: / Yes / No
Have dam safety plans been prepared? / N/A
Have the TORs as well as composition for the independent Panel of Experts (POE) been reviewed and approved by the Bank? / N/A
Has an Emergency Preparedness Plan (EPP) been prepared and arrangements been made for public awareness and training? / N/A
OP 7.50 - Projects on International Waterways: / Yes / No
Have the other riparians been notified of the project? / N/A
If the project falls under one of the exceptions to the notification requirement, then has this been cleared with the Legal Department, and the memo to the RVP prepared and sent?
What are the reasons for the exception?
Please explain:
Has the RVP approved such an exception?
OP 7.60 - Projects in Disputed Areas: / Yes / No
Has the memo conveying all pertinent information on the international aspects of the project, including the procedures to be followed, and the recommendations for dealing with the issue, been prepared, cleared with the Legal Department and sent to the RVP? / N/A
Does the PAD/MOP include the standard disclaimer referred to in the OP?
BP 17.50 - Public Disclosure: / Yes / No
Have relevant safeguard policies documents been sent to the World Bank's Infoshop? / N/A
Have relevant documents been disclosed in-country in a public place in a form and language that are understandable and accessible to project-affected groups and local NGOs? / N/A
All Safeguard Policies: / Yes / No
Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of the safeguard measures? / N/A
Have safeguard measures costs been included in project cost? / N/A
Will the safeguard measures costs be funded as part of project implementation? / N/A
Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures? / N/A
Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? / Yes
Signed and submitted by: / Name / Date
Task Team Leader: / Peter Johansen
Project Safeguards Specialist 1: / Bernhard Baratz
Project Safeguards Specialist 2:
Project Safeguards Specialist 3:
Approved by: / Name / Date
Regional Safeguards Coordinator: / Delegated project
Comments:
Sector Manager: / Henk Busz
Comments:
[*] By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas