24067 - Zhongda Sanchuan Hydro Development Co., Ltd.

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Environmental Review Summary

Project Number

24067

Company Name

Yunnan Zhongda Yanjin Power Generation Co., Ltd.

Date ERS Disclosed

Jan 11, 2006

Country

China

Region

East Asia and the Pacific

Date Revised ERS Disclosed

Feb 17, 2006

Environmental Category

A - Significant

Status

Completed

Previous Events

Approved : May 8, 2006
Signed : Jun 16, 2006
Invested : Nov 24, 2006

Sector

Large Hydro - Renewable Energy Generation

Industry

other

Department

Regional Industry - INF Asia & Pac

Project Description

The project is to build, own and operate three run-of-the-river power stations on the White Water River (or Bai Shui Jiang) in Yunnan Province, China. The project has a total installed capacity of 78 MW: 15MW for the first station (“BSJ I”), 15MW for the second station (“BSJ II”) and 48 MW for the third station (“BSJ III”).

The White Water project is located in Yanjin County of Zhaotong Municipality in the north-eastern region of Yunnan Province. The project site is approximately 470 km north-east of the Yunnan’s capital city Kunming, 150 km north-east of Zhaotong city and 7 km from Yanjin County’s town.

The project is owned by Zhongda Yanjin Power Generation Co. Ltd. (or the company) and being developed by Zhongda Sanchuan Hydro Development Co., Ltd. (“Zhongda Hydro”), a Zhejiang-based holding company that develops, owns and operates small hydro assets in China and a 70% shareholder of the company.

Environmental and Social

Environmental Impact Assessments (EIAs) for the project were prepared by staff at the Institute of Ecology and Geobotany at Kunming University. English-language summaries of the EIAs and preliminary land acquisition/resettlement plan that also include additional and updated information were prepared for IFC’s use by Zhongda Hydro’s financial advisor. The EIAs were approved by the Environmental Protection Bureau of Yunnan province in August 2004. At the time of IFC’s appraisal construction was underway and land acquisition/ compensation has been partially completed on all three plants.

The project is located in a relatively remote mountainous area with relatively luxuriant vegetation coverage, and good water quality. There are no exist natural conservation zones, cultural relics, or historic resorts in the project vicinity. There are also no rare or endangered or special species of animals and plants.

Environmental impacts are typical of hydro projects. Structures of the power houses and related facilities, as well as reservoir inundation, will permanently change the original land uses. The riverine aquatic environment for a river segment of about 35 km long will be replaced by a lacustrine environment. Due to the steep terrain, cut-and-fill slopes will be exposed to the forces of erosion during construction of the hydropower stations, roads, and residential areas. There will also be pollution originated from equipment emissions, waste water discharge, construction residues and noise.

A positive impact from the project will be the avoidance of greenhouse gas emission through hydropower electricity generation. Using China’s average GHG emission coefficient of 1,300 g/kWh in the coal-electricity fuel chain in 2003, these three hydropower stations will reduce 520,000 tons of GHG emission per year on average, totaling to at least 15.6 million tons of GHG emission reduction during the first 30 years of operations.

Project land acquisition impacts directly affected villagers in nine villages of two townships in Yanjin county. It was recognized that the impacts on total land taking or income at the individual level are low. Yanjin county, with a total of 2,000 km2 of mostly mountainous land, is among the poorest counties in all of China. This results from its high dependence on low productivity agriculture that is constrained by soil fertility and the availability of land, high road transportation costs, and low level employment opportunities.

Several World Bank Group policies are potentially applicable to the project. Regarding Indigenous Peoples (OP 4.20), Yunnan province has over 30 recognized minority groups. Based on information received from the company and discussions with local government officers and project affected people during the appraisal, the project is not in a minority region, and none of the families directly affected by the project are of designated minority groups (all are Han Chinese). Construction of the three hydro stations requires that land be acquired for the dams and related facilities such as the powerhouses, shops, offices, etc., thus policy on involuntary resettlement (OP 4.30) applies.

Operation will involve filling of the three reservoirs and thus the permanent submergence of land. Affected households will lose some cultivated land, residential houses, or other structures to dam construction and reservoirs. The dams and reservoirs will also flood about several kilometers of roads, which will be reconstructed at higher elevations. In addition, one pedestrian cross bridge and one highway bridge will also be relocated.

The EIAs do not include a component of social impact assessment (SIA) or a formal Resettlement Action Plan (RAP) prepared for physical and economic displacement, as formal SIA and RAP are not legally required for project approval in China. A Resettlement Action Plan has been developed by the company and its consultant with IFC assistance.

IFC’s policy on safety of dams (OP 4.37) requires independent review of the design of the dams planned for the project. Because the project region is mountainous, run-of-river projects have relatively high dams but small reservoirs. The three dams that comprise the project are of concrete gravity construction and range in height from 28 to 32 meters and have reservoirs with capacities that range from 3 to 14 million cubic meters. IFC’s Independent Engineer has evaluated dam safety as part of its work scope.

The IFC policy on international waterways (OP 7.50) requires notification of other riparians for projects on international waterways. The project is on the Bai-Shui-Jiang, in the northeastern part of Yunnan province. It is a sub-tributary to the Yangtze River, which originates in Qinghai province and flows entirely within China, thus the river is not an international waterway by IFC’s policy.

Based on information provided by the company, it worked closely with the Yanjin County government and the leaderships in each location of the three hydro stations. Villagers within the project affected areas are reported to have indicated support for the project primarily because it will contribute to much needed economic development, thereby helping to alleviate poverty in Yanjin.

In addition to the public consultations, project technical evaluation and review meetings were also held. These meeting were attended by design institutes, academics, staff from county and provincial environmental protection bureaus and land/forestry/resource management agencies, as well as villagers’ leaders. These groups systematically reviewed the project environmental impacts and proposed practical mitigation measures. Public disclosure of the environmental information for this project was carried out by providing the approved EIA reports to the environmental protection bureau offices at both county and provincial level. Additional consultation and disclosure is being conducted in conjunction with studies prepared for IFC.

Environmental and Social Action Plan:

Resettlement Action Plan:

Environmental Impact Assessment:

Station (1)

Station (2)

Station (3)

Availability of Full Documentation

The complete set of Category A documentation is available from the World Bank InfoShop:

World Bank InfoShop
1818 H Street, N.W., Room J1-060
Washington, DC 20433
USA

Telephone: (202) 458-4500 (USA)
Fax: (202) 522-1500 (USA)
E-mail: pic@worldbank.org

Hours of Operation: 9:00am to 5:00pm (Monday through Friday)

The complete set of Category A documentation is also available locally at the following locations:

Zhejiang Zhongda Sanchuan Hydropower Development Co., Ltd.
28F, Zhongda Plaza, North Zhongsan Road 366, Hangzhou, China.
Telephone: +86-571-8577-8210
Fax: +86-571-8577-7855
Email: lh@zdeg.com

Yunnan Zhongda Yanjin Power Generation Co., Ltd.
8F, Multifunctional Plaza of Yanjin County Government, Yanjin, Yunnan, China.
Telephone: +86-870-6631-881
Fax: +86-870-6631-922
Email: ynzd922@126.com

The following complete set of Category A documentation regarding the Baishuijiang/ White Waters River Hydropower Development Project has been released locally and to the World Bank InfoShop. The disclosure is being revised to include a corrected version of document #2 and a new document #4 which was originally disclosed on January 11, 2006:

1. Non-Technical Summary on Environmental Impact Assessment, The White Waters River Hydropower Development Project, June 2005
2. Environmental Impact Assessment Review, For Baishuijiang Hydropower Station, In Yanjin County, Zhaotong City, Yuannan Province, prepared by Yunnan University, August 2004 (three EIAs - one each for Stages I, II, and II)
3. Resettlement Action Plan, For White Water River Hydropower Project, In Yanjin County, Zhaotong City, Yunnan Province, prepared by Shanghai Academy of Social Sciences, December 2005.
4. Environmental and Social Action Plan (ESAP) for Zhongda Hydro, February 17, 2006.

This Environmental Impact Assessment (EIA) summary is prepared and distributed in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Any documentation which is attached to this Environmental Impact Assessment summary has been prepared by the sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content. The following EIA is disclosed in accordance with to IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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