IFC requires that this document is made available through the World Bank InfoShop and to the locally affected community no less than 30 days prior to project consideration by the IFC Board of Directors. The Summary of Project Information (SPI) also provides details of where the ERS has been made available to the locally affected community. The SPI must be sent to World Bank InfoShop no less than 30 days prior to project consideration by the IFC Board of Directors.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental/social information submitted by the project sponsor. The following potential environment, health and safety and social impacts of the projects were analyzed: - site selection and development; - environmental compliance; - power and water supply; - liquid and solid waste; - air emissions; - efficiency measures; - recovery of dry cleaning solvents; - use of CFCs; - hazardous materials - fire protection and life safety; - employee safety training and emergency response - cultural property - community development and supply chain issues.

The sponsor has presented plans to address these impacts to ensure that the proposed project will upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the World Bank/IFC environment and social policies and the environmental, health and safety guidelines. The information about how these potential impacts will be addressed by the sponsor/project is summarized in the paragraphs that follow and the sponsor commits to these mitigation measures. Social and environment issues are taken very seriously by STPS with all their hotel properties members of the Green Globe Organization, affiliated with the World Travel and Tourism Council. Several Serena hotels have been awarded a Green Globe Distinction for fulfilling all of the criteria of the Rio Earth Summit's Agenda 21 Items. - Site selection – This project consists of the renovation and refurbishment of an existing hotel on its original 4.6 acre site in downtown Kabul. There were some initial problems regarding title documents, which were subsequently resolved with no outstanding issues. The Project is located across from the Central Bank, and adjacent to Zanegar Park, which will be maintained as a green area. To further enhance the quality of the neighborhood in the vicinity of the hotel and facilitate a higher level of security around the hotel , the whole of Bank Street along the boundary of the hotel will be dedicated as a pedestrian zone. - Environmental Management – STPS has a Corporate Environment Mission Statement, committing to hotel development projects which pay the highest regard to the environment and cultures where they operate. There will be an Environmental Officer appointed on opening, reporting to the hotel General Manager as is the practice at all Serena hotels world wide. Once completed the Kabul Serena Hotel will apply for membership in Green Globe. There are no national or local environmental laws in Afghanistan to comply with at this stage. The project will comply with World Bank Group policies and guidelines. - Power and Water Supply – The hotel is totally self sufficient regarding power and water supply. The power will be supplied by 1000 kwh, 750 kwh and a 500 kwh diesel generators. The company will provide secondary containment to the fuel storage tanks and if tanks are located underground, then these will be lined with concrete and access through manholes provided for inspection and maintenance purposes. Generators will be housed in acoustic enclosures rated at 75dba at 10m and after construction they will be housed in the basement and will generate even less noise. Water will be supplied by an existing bore holes on the site and at full capacity will use 200cum of water per day. The project is making adequate provisions for rain/snow melt water harvest ab-initio, to replace ground water resources (up to 5600cum per annum). TPS(A) must also ensure that the drinking water supplied to staff and guests, and water used in food preparation, meets WHO standards, if the water from the well does not meet WHO standards, the hotel will install appropriate filtration systems. Water in the hotel swimming pool will be heated by steam from the kitchen boilers in a closed loop system. - Liquid and Solid Waste – Special areas will be designated and constructed for the storage of all solid waste. Preliminary sorting will be done, to separate biodegradable waste from other solids. Kitchen waste will be either composted or sent to the municipal dump. Vermiculture is being considered but not finalized. Approximately 3000cum of kitchen waste would be produced each year. Grease will be routed through grease traps and is taken by local entrepreneurs for purification and use in soap making. No hazardous waste will be generated and wastes such as glass, paper and plastic will be handled by the informal sector for recycling. Other solid waste will be taken for proper disposal in a landfill. It is estimated that 2000cum of refuse per year will be generated before recycling. Liquid and domestic waste will be treated by a purpose built Effluent Treatment Plant, to bring the BOD down to 30 and water will be used for gardens, water fountains and AC make-up water. This facility will treat waste from all point sources within the hotel; including sewage, gray water from kitchens and laundry, and the swimming pool filtration plan. The total amount of waste water generated is expected to be 190cum at peak load and any excess will be released to the municipal drainage system. Suspended matter in the waste water is less than 5% and this matter after treatment will form excellent agricultural sludge, estimated at 3000cum per annum. - Air Emissions – There will be minor gas emissions of exhaust gas from kitchens, boilers and generators. However these gases will pass through exhaust gas scrubbers and will meet international norms for exhaust gases. - Efficiency measures – Guest rooms in the hotel will be equipped with low flow faucets/toilets to reduce water consumption. Public toilets will be fitted with an infrared low volume flushes. Laundry machines will be European and conform to European norms of water and use. In addition energy saving devices are expected to be installed in guest rooms, such that power is only supplied to the room when the room key is swiped internally. Low wattage lighting and energy efficient light bulbs will be used. Systems will be compartmentalised so areas that are not in use can close off either heating or AC. All equipment to be purchased will be energy efficient. Other efficiency measures should be discussed with IFC specialists on energy and water efficiency, prior to the completion of technical drawings of the new build portion of the hotel. - Recovery of dry cleaning solvents – Dry cleaning machines are on a closed loop system with solvent recovery. - Use of CFCs – The hotel's air conditioning system and refrigeration facilities will not use CFC-based refrigerants, only approved refrigerants such as R134a will be used for AC, chillers and cold rooms. All electrical equipment will be PCB (polychlorinated biphenyl) free. - Hazardous Materials – The gas bank shall comprise LPG bottles (high pressure metal cylinders) connected in series, placed in a safe, well ventilated enclosure. It will be supplied to kitchens after pressure reduction, through tested gas pipelines. Each piece of equipment will be further connected to the gas line through a pressure safety valve, which automatically cuts off the flow of gas in case of pipe breakage. Diesel shall be stored in underground tanks in a suitably cordoned off area. It would be supplied to generators and boilers through an oil pipeline by the use of fireproof diesel pumps. In case of diesel supply, the lead lines are quite short as the tanks are located near the plant room. The gas bank and the diesel tank area shall have proper fire hydrants and sand buckets allied to other alarms and cutouts to enhance safety. - Employee Safety, Training and Emergency Response – All employees will be provided with the necessary safety training in proper work procedures and equipment handling methods prior to Hotel opening in October 2003. Training will include emergency response preparedness. All construction workers are provided with appropriate safety gear which include inter-alia, safety harnesses, hard hats, welding masks, protective boots etc. All workers are insured against accidents at site. - Fire Protection and Life Safety – The sponsors have committed to ensure that the hotel will be retrofitted to comply with all applicable World Bank fire safety guidelines. However, given the age of the building, the sponsor has committed to conduct, as a condition of disbursement of IFC’s loan, an independent fire safety audit of the structure, proposed renovation plans and new build portions of the hotel. This audit will identify necessary corrective action which the sponsor will fully implement. The main system comprises of smoke detectors, fire sensors, hoses, extinguishers, fire escapes, fire-rated doors and sprinklers. The swimming pool, is connected to the fire fighting water supply system as a backup to the fire tank. The central fire console will be monitored from the engineering control room. Regular fire drills are planned for. - Earthquake – The project has been designed to withstand an earthquake that would measure 7.0 on the Richter Scale. - Community Development/Supply Chain Issues – The project will provide numerous jobs both during implementation and operations. During implementation, Afghan workers are being used, to the extent possible, for unskilled and semi skilled labor as well as supervisory positions and artisanal craft work. Extensive hotel training will be provided by Serena to maximize the number of Afghanis employed once the hotel is operational. Approximately 300 jobs will be created. Given the international standards of construction and operations, the Project will serve as a de facto training ground and make a significant contribution to upgrading overall skills in these areas. Quality jobs in Afghanistan are considered a key factor in maintaining political stability. The STPS has a history of promoting local economic development and using, where possible local suppliers and local employees. At the height of the construction phase up to 300 workers will be employed, 85% of which would be local residents. Additionally local materials and equipment are being used where possible for construction including aggregates, marble and cement. Some workers have been hired for construction from India, but where possible local people will be trained and utilized. An agreement has been entered into with FOCUS for an apprenticeship program with the Islamabad Serena Hotel to provide staff training for on-going operations. Linkages with the rest of the economy will be strong to the extent that building materials, food and beverage and other ongoing hotel operating supplies can be sourced locally. With respect to operational suppliers, linkages are expected to strengthen as the economy becomes more diversified. - Cultural Heritage – The Project will restore an architecturally and historically significant building in Kabul and will improve this area of the city. Originally built in the 1930s and located in the center of the city, the Kabul Hotel is in a major state of disrepair as a result of war damage and overall neglect over the years but was once an attractive hotel and an important meeting place in Kabul.

This ERS contains the full environmental and social documentation prepared for the project.

Accordingly, IFC concludes that the proposed project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of the agreed mitigation measures. Due to difficult circumstances surrounding the appraisal of this project and no visit by an environmental or social specialist, close collaboration between the sponsor and IFC's Environment and Social Development Department will explore opportunities for pre and post disbursement added value.

IFC will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing the annual monitoring reports (AMRs) prepared for the project covering:  - the status of implementation of any measures contained and outlined in the ERS and - ongoing performance of project-specific environmental, health and safety and social activities as reflected in the results of periodic and quantitative sampling and measuring programs. Periodic site supervision visits will also be conducted.