environment papers no private sector development and the...

Private Sector Developmentand the Environment

An Analysis of World Bank

Privatization Portfolio

October 2002

ENVIRONMENT

STRATEGY PAPERS NO. 5

Alethea Mariel T. Abuyuan

The International Bank for Reconstructionand Development/THE WORLD BANK1818 H Street, N.W.Washington, D.C. 20433, U.S.A.

Manufactured in the United States of AmericaFirst printing October 2002

In 2001, the World Bank completed the comprehensive two-year process of preparing its EnvironmentStrategy, Making Sustainable Commitments: An Environment Strategy for the World Bank. It was endorsedby the Bank�s Board of Directors and published in October 2001. Several background papers were preparedand published by the Bank�s Environment Department to stimulate constructive dialogue and intellectualdiscussion on a range of issues within the Bank as well as with client countries, partners, and other interestedstakeholders. The Environment Strategy Paper series includes revised versions of Environment Strategybackground papers, as well as new reports prepared to facilitate implementation of the Strategy. This seriesaims to provide a forum for discussion on a range of issues related to the strategy, to help the transfer of goodpractices across countries and regions, and to seek effective ways of improving the Bank�s environmentalperformance.

iii

Contents

v Abstract

vii Acknowledgments

ix Acronyms and Abbreviations

1 Executive Summary

3 Chapter 1: Introduction

5 Chapter 2: Methodology

7 Chapter 3: Results10 A. Analysis by Region11 B. Analysis by Lending Instrument20 C. Analysis by EA Category23 D. Analysis by Sector Group26 E. Analysis by Environmental Approach

31 Chapter 4: Conclusions

33 Appendix � Summary of Projects with Privatization Components

51 Notes

Boxes

9 Box 1. Summary of typical privatization objectives according to sector or theme14 Box 2. Examples of good practice in specific investment loans/credits (SILs)16 Box 3. Examples of good practice in Category B adjustment loans and credits18 Box 4. Examples of good practice in technical assistance projects27 Box 5. Examples of environmental approaches in the sample projects

iv Environment Strategy Papers

Private Sector Development and the Environment � An Analysis of World Bank Privatization Portfolio

Figures

7 Figure 1. Distribution of Bank commitments allocated to privatization-related activities8 Figure 2. Distribution of privatization-related commitments according to EA category8 Figure 3. Sectoral distribution of privatization-related commitments

11 Figure 4. Number of projects by lending instrument21 Figure 5. Number of projects by region and EA category

Tables

10 Table 1. Distribution of sector projects by region11 Table 2. Distribution of SILs by EA category13 Table 3. Distribution of adjustment loan projects by EA category19 Table 4. Distribution of technical assistance loans by EA category20 Table 5. Distribution of projects by sector group and EA category

v

Abstract

T he Bank�s Environment Strategyemphasized the need for improving themainstreaming of environmental

considerations into the Bank�s operations. Thispaper was prepared as part of a larger effort tofacilitate mainstreaming.

The goals of the World Bank�s private sectordevelopment (PSD) activities are to expandopportunities for the poor through market-friendly, enterprise-led growth and to providebetter services through efficient delivery systemsand smart subsidies. Privatization and enterprisereform, a subtheme of PSD, is aimed at improv-ing the quality and enhancing the developmentimpact of privatization, postprivatization, andenterprise reform operations.

This review was undertaken to assess theenvironmental aspects of Bank projects andprograms with privatization components. Itinvestigates how environmental issues havebeen addressed in projects and programssupporting privatization, with a view to identi-fying good practice and helping developrecommendations for a systematic approachthat would harness the role of the Bank inpromoting sound environmental managementand sustainable private sector development.This paper provided input into World BankDiscussion Paper No. 426, The EnvironmentalImplications of Privatization: Lessons forDeveloping Countries (M. Lovei and B.S.Gentry 2002), which addresses the topic morebroadly.

vii

Acknowledgments

This paper was prepared as part of thework program of the Strategy Team ofthe Environment Department, under the

guidance of Magda Lovei (ENV), lead environ-mental economist and team leader. Thanks aredue to Syed A. Mahmood (PSD), Anjali

Acharya (ENV), David Hanrahan (ENV), andKenneth Green (ENV), who provided data and/or commented on drafts of this report, to NancyLevine for providing editorial advice, toNanako Tsukahara for editorial assistance, andto Jim Cantrell for design and production.

ix

AFR Sub-Saharan AfricaAPL Adaptable program loanCEPRAM Conselho Estadual do Meio Ambiente (State Environmental Council, Brazil)CORPOSANA Corporation for Sanitary Works (Paraguay)DFID Department for International Development (UK)EA Environmental assessmentEAP East Asia and the PacificECA Europe and Central AsiaEIA Environmental impact assessmentEMMP Environmental management and monitoring planEMP Environmental management planEPA Environmental Protection AgencyEU European UnionFI Financial intermediaryGEF Global Environment FacilityIBRD International Bank for Reconstruction and DevelopmentIDA International Development AssociationIDTA Institutional Development Technical AssistanceINVIAS National Institute of Roads (Colombia)LAC Latin America and the CaribbeanLIL Learning and innovation loanMNA Middle East and North AfricaMTOP Ministry of Transport and Public Works (Uruguay)NRM Natural resources managementOD Operational DirectiveODA Official Development AssistanceOP Operational PolicyOSE Obras Sanitarias del EstadoPAA Project-approving agencies

Acronyms and Abbreviations

x Environment Strategy Papers

Private Sector Development and the Environment � An Analysis of World Bank Privatization Portfolio

PCBs Polychlorinated biphenylsPCU Project Coordinating UnitPE Public enterprisePPP Public-private partnershipsPROAGRI Agriculture Sector Expenditure Program (Mozambique)PSAC Programmatic structural adjustment creditPSD Private sector developmentRFFSA Rede Ferroviaria Federal S.A. (Brazil)SAL Structural adjustment loanSAR South Asia RegionSECAL Sectoral adjustment loanSHS Solar Home SystemsSIC Specific investment creditSIL Specific investment loanSOE State-owned enterpriseSONELEC Societé National de l�Electricite et de l�Eau (Mauritania)TA Technical assistanceTOR Terms of referenceUK United KingdomUP Uttar PradeshUPFD Uttar Pradesh Forestry DepartmentUPPCL Uttar Pradesh Power Corporation Limited (India)UPSEB Uttar Pradesh State Electricity BoardWAPDA Water and Power Development Authority (Pakistan)WHS Water heating system

1

Executive Summary

T he goals of the World Bank�s privatesector development activities are toexpand opportunities for the poor

through market-friendly, enterprise-led growthand to provide better services through efficientdelivery systems and smart subsidies.Privatization and enterprise reform, a subthemeof PSD, is aimed at improving the quality andenhancing the development impact ofprivatization, postprivatization, and enterprisereform operations.

This review was undertaken to assess theenvironmental aspects of Bank projects andprograms with privatization components. Itinvestigates how environmental issues havebeen addressed in projects and programssupporting privatization, with a view to identi-fying good practice and helping developrecommendations for a systematic approachthat would harness the role of the Bank inpromoting sound environmental managementand sustainable private sector development.

The study looked at 88 Bank projects withprivatization-related components in order toidentify approaches for promoting sustainableprivate sector development and environmentalmanagement. The sectors represented by the

projects were agriculture, economic policy,electric power, environment, mining, privatesector development, transportation, urbandevelopment, and water supply and sanitation.

The main observations that emerged from theanalysis of the sample were as follows:

! Most of the projects were in the Africaregion, and the use of specific investmentloans or credits was most common.

! The EA category most widely assigned wasCategory B, meaning that almost all projectsin the sample were required to undergo atleast a limited environmental analysis.

! Among sector groups, private sector devel-opment, followed by the transportation andagriculture sectors, had the greatest numberof privatization-related projects.

The section on �Analysis by EnvironmentalApproach� summarizes the results on thelinkages between environment andprivatization. It was found that the mostcommon approaches taken toward environ-mental issues in privatization are to developenvironmental management plans, conductenvironmental audits and detailed assessments,and assess the legislative frameworks and

2

Private Sector Development and Environment: An Analysis of World Bank Privatization Portfolio

Environment Strategy Papers

environmental regulatory capacity of the clientcountries.

The study concluded that, with the use of thevarious approaches identified, privatizationcan present an opportunity for facilitatingprivatization and addressing environmentalissues beyond mitigation of harm and compli-ance with safeguards. The main challenge inseizing the opportunities that privatization canbring is in identifying the limitations on doingso. These limitations include:

! Willingness and capacity of client countriesto pay attention to environmental issues, for

reasons such as limited understanding ofthe links between environmental issues andthe sustainability of privatization programs,and fear of increased financial costs andtime.

! Type of project. The review has indicateddifficulties with integrating environmentalissues in certain operations. For instance, ineconomic policy projects, the links betweenthe economic and environmental policyframework have not been generally made.

3

Introduction

The Bank�s Environment Strategy empha-sized the need for improving the main-streaming of environmental consider-

ations into the Bank�s operations. This paperwas prepared as part of a larger effort tofacilitate mainstreaming.

The goals of the World Bank�s private sectordevelopment (PSD) activities are to expandopportunities for the poor through market-friendly, enterprise-led growth and to providebetter services through efficient deliverysystems and smart subsidies. Privatization andenterprise reform, a subtheme of PSD, is aimedat improving the quality and enhancing the

Chapter 1

development impact of privatization,postprivatization, and enterprise reformoperations.

This review was undertaken to assess theenvironmental aspects of Bank projects andprograms with privatization components. Itinvestigates how environmental issues havebeen addressed in projects and programssupporting privatization, with a view to identi-fying good practice and helping developrecommendations for a systematic approachthat would harness the role of the Bank inpromoting sound environmental managementand sustainable private sector development.

5

Methodology

The PSD Strategy team compiled a list of253 current, active (as of calendar year2000) projects, covering 15 sectors or

themes, with components in privatization;improvements in business environment; anddirect assistance and community development.1

From this list, 88 projects were chosen on thegrounds of the presence of a privatizationcomponent and the relevance of the projects�sectors or themes to environment. The sectorsor themes identified were agriculture, eco-nomic policy, electric power, environment,mining, private sector development, transporta-tion, urban development, and water supply andsanitation.

A database of the 88 projects was then com-piled. The following information was included:sector group, region, fiscal year of approval,loan or credit amount, amount of privatizationcomponent, privatization method, type of

lending instrument, environmental assessmentcategory, and approach taken in addressingenvironmental issues.2

Project appraisal documents, staff appraisalreports, and reports of the president of theWorld Bank were consulted for the review.Since these were the only sources of data usedin the exercise, some information about theprojects may not have been captured in thereview and the subsequent analysis. Forinstance, difficulty was encountered in deter-mining the type of lending instrument usedwhen the project document did not mention aspecific type. In such cases the project wasclassified as either an adjustment loan/credit ora specific investment loan/credit (SIL). Theclassification was based on how the nature ofthe project fit the Bank�s definition of theseinstruments.3

Chapter 2

7

Results

The bulk of this section is devoted to ananalysis of the database review, concentrating on the type of lending instru-

ment. Additional analysis extended tobreakdowns by region, environmental assess-ment (EA) category, and sector group. It isenvisaged that by identifying different scenari-os and good practices, a more rational way ofdeveloping a systematic approach to address-ing environmental issues may be reached.

Before describing the results, a brief descrip-tion of the sample of privatization projects isin order.

The database constructed for this reviewdatabase contained 88 Bank projects withprivatization components that were active incalendar year 2000. The value of theseprojects totaled $6.4 billion, of which $4.3billion was in IBRD loans and $2.1 in IDAcredits. It was estimated that $1.34 billion (21percent of Bank lending) was allocated tosupport privatization or related forms ofprivate sector development activities.

PSD Spending by Lending Instrument. AsFigure 1 shows, of the $1.34 billion spent onPSD components, 43 percent ($598.94 mil-

lion) was in specific investment loans (SILs).Adjustment loans accounted for 33 percent, or$460.1 million and technical assistanceprojects for 17 percent, or almost $232million. A less significant amount ($90.3million) was spent through adaptable programloans, and learning and innovation loansamounted to only $8.46 million.

PSD Spending by EA Category. More than halfof the $1.34 billion allocated to PSD wasspent on projects assigned to EA Category B;these accounted for $768 million, or 55percent of the total (Figure 2). Category Cprojects were next, with $276.6 million (21percent). Category A projects with PSD

Chapter 3

Other

7%

Adj.

Loans

33%

TA

Loans

17%SIL 43%

Figure 1Distribution of Bank commitments

allocated to privatization-related activities

8

Private Sector Development and Environment � An Analysis of World Bank Privatization Portfolio


components came to $219.7 million (16 per-cent). Of the total $1.34 billion, 9 percent

was invested in projects that did not mention

any EA category. There was one financial

intermediary (FI) project, the Bulgaria Envi-

ronment/Privatization Support Adjustment

Loan. Because of the difficulty of determining

how much was actually spent on privatiza-

tion, no amount is given in the database, but

the project received $50 million in IBRD

loans.

PSD Spending by Region. Sub-Saharan Africa

had the highest investment in PSD activities,

with about $474 million. Latin America and

the Caribbean (LAC), with $407 million, and

South Asia, with $219.5 million, followed.

The share of Europe and Central Asia, (ECA),

at $136.7 million, was almost 10 percent of

the total. The East Asia and Pacific (EAP) and

Middle East and North Africa (MNA) regions

invested about $76 million each.

PSD Spending by Sector Group. Most privati-

zation-related projects and programs were in

the PSD category ($481.24 million, or 35percent of the total) or in certain sectoral

portfolios (see Figure 3). The transportation

sector had $453.3 million, or 33 percent.Agriculture, a distant third, accounted for

$185.7 million, or 13 percent, and electric

power for $151.5 million, or 11 percent.Other amounts were $59.7 million (over 4percent) for the economic policy group, $41.2million (3 percent) for water supply andsanitation, and less than 1 percent for mining,environment, and urban development togeth-er.

As is shown in this review, privatization canoccur in multiple sectors. The projectsincluded in this exercise are a small sampleof all the privatization projects ever supportedby the World Bank. Nonetheless, theyprovide a picture of the extent of privatizationin the chosen sectors.

Active PSD projects with privatizationcomponents have as their goals enterprisereform, utility and corporate restructuring,capacity building for privatization, economicrecovery, and investment promotion. Projectsin the economic policy group assist inestablishing a sound economic, legal, regula-tory, and institutional environment thatattracts private sector participation. In theagriculture sector, Bank projects have beensupporting privatization through the promo-tion of public-private partnerships inirrigation, forestry, and the delivery ofagricultural services. Water supply and

0

200

400

600

800

EA category

US$

mill

ions

A B C

Figure 2Distribution of privatization-related

commitments according to EA category

PSD 35%

Econ. Policy

4%

WSS 3%

Transp. 33%

Agri. 13%

Elec. Power

11%

Others 1%

Figure 3Sectoral distribution of

privatization-related commitments

9

Results


sanitation projects reflect the worldwidetrend of investment by private water andsewerage companies in municipal or nationalutilities that have been unable to provideservices efficiently.

The limited number of examples from theenergy, mining, and transportation sectors isexplained by the continued involvement ofprivate entities in these sectors. In the caseof the environment sector, the projects�primary objective is to ensure that privatiza-tion does not prove harmful to theenvironment. They do this by assistingprivate entities to improve their environmen-

BOX 1.Summary of typical privatization objectives according to sector or theme

Agriculture! Community management of forests and fisheries! Contracting out of extension and advisory services in areas such as farmer education, fertilizer use

and pest management, and seed development! Promotion of private irrigation! Privatization of land through auctions

Economic Policy! Restructuring of banks and financial institutions! Promotion of private participation in infrastructure, water and energy utilities, petroleum compa-

nies, and banks

Electric Power! Private involvement in existing and new power projects through divestiture, concessions, and

management contracts! Technical assistance in project preparation and bidding procedures

Environment! Environmental remediation of privatized mines! Establishment of frameworks to address past environmental liabilities and obligations for future

action of enterprises seeking to privatize

Mining! Commercialization of the coal industry! Privatization, rehabilitation, or liquidation of mining companies

tal performance, reduce hazards, and comply

with Bank standards and international laws

and by strengthening the regulatory and

monitoring capacity of governments and firms

involved in privatizations.

Privatization Methods. The main privatiza-

tion methods used were long-term

concessions, management or service con-

tracts, commercialization, divestiture,

corporatization and restructuring, the estab-

lishment of partnerships with communities

and civil organizations, and the provision of

technical assistance and advisory services.

(continued)

10



The next section presents an analysis of theresults by region, lending instrument, EAcategory, and sector group. Conclusions andrecommendations are discussed at the end ofthe paper.

A. ANALYSIS BY REGION

From the sample, it is difficult to generalizehow regions address the environmentalaspects of privatization indifferent sectors, given theuneven distribution ofprojects and their correspond-ing EA categories. (No regionhas projects in every sectorgroup.) The projects exhibit amix of approaches to theenvironment, which will bedescribed in the followingsections.

As Table 1 shows, about 37percent of all privatization-related projects are being

implemented in Sub-Saharan Africa; most ofthe 33 projects in this region are in the PSD,economic policy, and agriculture sectors.

Projects in the LAC region account for 18percent of the sample, closely followed bythose in ECA, with 16 percent. In bothregions the greatest number of projects (aboutone-third of the regional total) is in PSD. EAPand SAR each have nine projects; three of the

BOX 1. (continued)Summary of typical privatization objectives according to sector or theme

Private Sector Development! Corporate restructuring and enterprise reform! Assistance in private sector participation in infrastructure (for instance, water and energy utilities)

through project finance, technical assistance, and capacity building

Transportation! Concession of ports and railways! Corporate restructuring of transportation agencies! Road rehabilitation and maintenance by private contractors

Urban Development! Private sector participation in municipal services such as water supply and solid waste management

Water Supply and Sanitation! Advice on privatization transactions, particularly with regard to tender and bidding documents! Commercialization and corporatization of water utilities! Privatization through concessions and through management and service contracts

Table 1. Distribution of sector projects by region

AFR EAP ECA LAC MNA SAR Total

Agriculture 6 1 2 1 1 2 13

Economic policy 7 1 2 1 1 12

Electric power 1 2 1 1 4 9

Environment 1 2 3

Mining 1 1 2

Private sectordevelopment

13 3 5 5 2 1 29

Transportation 2 3 1 6

Urban development 1 1 2

Water supply andsanitation

3 1 2 4 2 12

TOTAL 33 9 14 16 7 9 88

11

Results


EAP projects are in PSD, and four of the SARprojects are in electric power. MNA had theleast number of projects (7), and they arespread among several sectors.

B. ANALYSIS BY LENDING INSTRUMENT

Specific investment loans and credits

By Sector. Of the projects reviewed, 36percent (32 projects) were in the specificinvestment loans/credits (SIL) category (Figure4). As Table 2 shows, agriculture had the

SIL projects each except for mining, whichhad no SIL projects.

By EA Category. Category B led in the SILsgroup, with 20 projects. There were sevenCategory C projects and four Category Aprojects. No EA category was given forIndonesia Solar Home Systems (under N/C, or�not classified,� in Table 2), but it is knownthat this is an environmental project designedto promote renewable energy with the help offinancing from the Global EnvironmentFacility (GEF) and with private sector partici-pation.

Approaches. The four Category A SILs wereChina Tuoketuo Power, Indonesia Bali UrbanInfrastructure, Colombia Toll Road Conces-sion, and the Bulgaria EnvironmentalRemediation Pilot. The first three have theaim of improving infrastructure (powerplants, municipal environmental services, androads, respectively) by encouraging privatesector participation. All the projects dealtwith environmental issues in a comprehen-sive manner. In each, a full environmentalimpact assessment (EIA) was performed, and

Figure 4Number of projects by lending instrument

0

5

10

15

20

25

Adj. Loan APL LIL Specific

Investment

Technical Asst.

A B C FI not classified

A B C FI N/C Total

Agriculture 6 2 8

Economic policy 1 1 2

Electric power 1 3 1 5

Environment 1 1 2

Mining 0

Private sector development 2 4 6

Transportation 1 2 3

Urban development 1 1

Water supply and sanitation 5 5

Total 4 20 7 1 32

Table 2. Distribution of SILs by EA category

Note: N/C, not classified.

most projects (8), followed by PSD (6),electric power (5) and water supply andsanitation (5). The other sectors averaged two

12



the project designs included environmentalcomponents (see Box 2). Additional activitiesfound in these SILs were the development ofan environmental management plan, mitiga-tion measures, a program for resettlement andsocial assistance, environmental guidelinesfor construction, and the identification ofenvironmental responsibilities for concession-aires. Particularly in the BulgariaEnvironmental Remediation Pilot and theColombia Toll Road Concession project,measures were put in place to addressenvironmental liabilities facing privatizers.

The Bulgaria Environmental RemediationPilot, which is classified as an environment

project, is intended to support the govern-

ment in reducing environmental hazardscaused by past pollution and unsafe environ-

mental practices; to facilitate private

investment in the company to be privatized(MDK Copper Smelter); and to contribute to

improvements in the MDK�s environmental

performance. This project is seen as a modelfor addressing past environmental damages

and liabilities in the process of privatization.

MDK Copper Smelter was responsible forpreparing detailed technical and engineering

designs in compliance with its EIA and with

Bulgaria�s technical and environmentalrequirements. The Ministry of Environment

obligated the MDK to implement the mitiga-

tion plan for past environmental damagesrecommended by the EIA and to set up a

schedule for gradual improvements in the

plant�s environmental performance. Compli-ance with this resolution is a condition for

the company�s operating permit.

In the Colombia Toll Road Concessionproject, a detailed description of institutional

responsibilities among the different actors�INVIAS (Colombia�s National Institute ofRoads), the concessionaire, and the munici-palities�facilitated the definition ofenvironmental responsibilities. INVIAS wasassigned three specific tasks: (a) to purchaseland for a nature reserve, which the conces-sionaire will operate through project-financedinfrastructure; (b) to provide technicalassistance to municipalities for reviewing,preparing, or strengthening land use andenforcement programs and for monitoringsocial assistance programs; and (c), tosupervise project implementation and compli-ance with the environmental standards andrequirements set forth in the concessioncontract.

The concessionaire�s environmental responsi-bilities were outlined in an annex to the

bidding documents and contract that summa-

rized the environmental specifications andrequirements the concessionaire would have

to follow during the construction and opera-

tion of the road. The annex also outlinedsocial and land acquisition responsibilities, as

well as penalties for noncompliance with

environmental and social clauses.

In Category B projects, the most common

measures employed were technical assis-

tance, training and community informationprograms, environmental monitoring and

regulatory activities, environmental analysis

and review, and mitigation plans. For severalprojects, other measures were mentioned:

studies on best practices in participatory

environmental management, procurement ofsafety and environment-related equipment,

incorporation of environmental components

in project design, and requirements thatconcession contracts be environment-friendly.

13

Results


For the most part, Category C projectsincluded little or no detail on their approachto environmental issues. There was, howev-er, some mention of requiring EAs andenvironmental management plans for privateentities whenever necessary and of thepromotion of information and best practices.

Adjustment Loans and Credits

By Sector. Twenty-seven projects (31 percentof those reviewed) used adjustment loans orcredits. Two of these were programmaticstructural adjustment credits (PSACs), 12were structural adjustment loans (SALs), and13 were sectoral adjustment loans (SECALs).All sectors were represented; but the largestnumbers of adjustment instruments were ineconomic policy (6), water supply andsanitation (5), and PSD (4). The other sectorsaveraged two adjustment projects each.

By EA Category. Two of the adjustmentprojects were classified as Category A, 12 asCategory B, 4 as Category C, and 1 as FI(Table 3). For eight projects, most of them inthe economic policy group, the EA categorywas not discussed or specified; these projectsare termed �not classified� (in tables, N/C).

Approaches. Full EIAs were conducted forthe two Category A projects, Paraguay

Asuncion Sewerage and Sri Lanka PrivateSector Infrastructure Development. Mitiga-tion measures were identified andimplemented during different stages of theproject cycle. In addition to the Bank-required EIAs and action plans, the borrowersundertook further support activities to preventadverse environmental impacts.

An institutional development technicalassistance (IDTA) program under the Paraguayproject had the aims of developing proposalsfor decentralization of sectoral activities,institutional strengthening and restructuringof the Corporation for Sanitary Works (COR-POSANA), and promotion of private sectorparticipation in sector activities. To carry outthe policy and institutional reforms under theIDTA program, CORPOSANA hired externalconsultants with international experience andpractical operational backgrounds in watersystems management to help select privatecontractors to undertake construction ofsewerage systems. The consultants will alsoverify compliance with the specifications formaterials and work and to supervise theconstruction, testing, and commissioning ofthe completed work. Prequalified privatecontractors are to go through an internationalcompetitive bidding process to secure servicecontracts with CORPOSANA.

The project will have a long-term positiveenvironmental impact by eliminating sewagecontamination in watercourses throughout thearea. It will also protect the quality ofaquatic species for human consumption andthe aesthetic value of the area. The mainconcern that had to be dealt with was thedischarge of sewage into the Paraguay River.CORPOSANA conducted a study on industrialwastes that included the identification oftoxic wastes, the design of industrial effluentNote: N/C, not classified.

Table 3. Distribution of adjustment loanprojects by EA category

A B C FI N/C Total

Agriculture 1 1 2

Economic policy 1 5 6

Electric power 3 3

Environment 1 1

Mining 1 1 2

Private sector development 1 2 1 4

Transportation 2 1 3

Urban development 1 1

Water supply and sanitation 1 4 5

Total 2 12 4 1 8 27

14



BOX 2.Examples of good practice in specific investment loans/credits (SILs)

China Tuoketuo Power (1997)A full EA, which was performed because of the greenfield nature of the project, examined both theimmediate and the cumulative effects of the proposed project. Key issues addressed were air pollution,water pollution, disposal sites, contamination, industrial hazards, worker safety, bird flight patterns, andconstruction impacts. Mitigation measures and resettlement plans were drawn up in accordance withChinese law, Bank requirements, and international standards. In addition, a soil conservation anddesertification control component is included in the project.

Indonesia Bali Urban Infrastructure (1997)The project seeks to improve urban infrastructure services in Bali to meet basic needs in a sustainablemanner through urban infrastructure investments, private sector participation, cultural heritage conserva-tion, and institutional strengthening. As a Category A project, it was subject to a full regional andsectoral �umbrella� EA. The EA included an environmental profile of Bali, a system of environmentalzoning, subproject screening criteria and procedures, generic EA terms of reference and mitigation andmonitoring procedures for subprojects, and recommendations for training and institutional strengthening.The environmental management and monitoring plan (EMMP) developed with the full EIA includes afollow-up study on cumulative environmental impacts that will be conducted during project implemen-tation to address the broader issues of the environmental impacts of tourism-related and other economicdevelopment.

The subproject screening procedures combine criteria from the Bank and the Indonesian government.Local governments will screen subprojects in their investment programs, and the results will be re-viewed by Bapedalda Bali, a planning agency. The proponent of each subproject will ensure completionof the required environmental instruments and may not proceed to implementation until the instrumentshave been approved by the responsible government authority or, when appropriate, by the Bank. TheBank will review all full EAs, all EMMPs for solid waste subprojects, and a representative sample ofother EMMPs. Training will be provided to strengthen the capacity of project managers and other staffto supervise the implementation of environmental management and monitoring activities.

Uruguay Second Transport (1999)The aim of the Second Transport project for Uruguay is to increase efficiency in the provision of trans-port services and the maintenance of road infrastructure in order to enhance the competitiveness ofUruguay�s products, especially within Mercosur, and to rationalize sector expenditures. Uruguay�sMinistry of Transport and Public Works will utilize the project as a means of supporting its policy ofincreasing private sector participation in the maintenance and rehabilitation of national roads throughperformance-based contracts. A long-term concession and shorter-term contracts will beawarded forthe rehabilitation and maintenance of major corridors and specific portions of the road network.

An assessment of existing environmental legislation in Uruguay conducted for this Category B projectconcluded that the nation�s legislation provides an appropriate framework for implementing environ-mental mitigation measures. The legislation requires that prior to executing any major civil works,consultants must conduct detailed EIAs as a condition for issuance of the necessary environmentallicenses by the national environmental agency. The agency has adopted an environmental manual thatsets guidelines and specifications to be followed during execution of the work to avoid or mitigate anypotential adverse environmental impact. Finally, an Environmental Management Unit has been estab-lished under the National Directorate of Highways.

15

Results


standards, and the updating and implementa-tion of industrial pollution control andlicensing programs. Mitigation measures,including the physical removal of solids,rehabilitation of sewage outfalls, waterquality monitoring, revegetation plans,willingness-to-pay surveys, and sewagedischarge regulations, will also be imple-mented by CORPOSANA during projectdesign, project construction, and operation ofthe installed system.

India Uttar Pradesh Power Sector Restructuring (2000)The objective of the Uttar Pradesh Power Sector Restructuring project is to ensure that the state�spower requirements are met and that consumers are provided with a reliable, high-quality, cost-effective supply of electricity, with significant private ownership and participation. The power sectorreform process was initiated through the establishment of a new legal, regulatory, and institutionalframework, the creation of new power corporations, and the launch of preparatory work forprivatization of the distribution business.

Uttar Pradesh has already begun some privatization activities. A small industrial area, Greater Noida,was sold to an Indian company in 1993, and the state is currently in the process of privatizing powerdistribution in the city of Kampur. Under the project, the state government and Uttar Pradesh PowerCorporation Limited (UPPCL) will formulate a distribution privatization strategy satisfactory to theBank. This strategy will include a configuration of the business into viable, commercially attractivecompanies with approximately similar consumer-mixes and sufficient size to ensure that private investorswill be interested in investing in them. It will include a time frame over which the distribution businesswill be substantially or fully privatized and will outline the preferred modes of privatization. Jointventures with majority private ownership are envisioned.

A programmatic approach was applied to this category B project. Under the EA, an overall environ-mental policy was drawn up to govern the remaining investments under the project. The policyhighlights the guiding principles for planning schemes so as to ensure reliability, security, economy, and acleaner, safer environment. Key principles taken into account were to avoid rights of way, to minimizethe impacts of construction, and to maintain environmental safeguards such as adoption of advancedtechnologies, expertise, and management techniques.

The UPPCL�s environmental policy is contained in the document �Environmental Framework andSafeguards for Transmission Projects,� which includes an assessment of the environmental impacts oftransmission projects, an investigation of the use and disposal of polychlorinated biphenyls (PCBs), ananalysis of alternatives such as environmental screening criteria for route selection, a public awarenessstrategy, and environmental management plans (EMPs). The EMPs provide a framework for preparingplans for mitigation, monitoring, and institutional measures to be taken during construction and opera-tion. They also list the authorities responsible for the implementation of various activities duringdifferent phases of project execution. UPSEB�s Social and Environment Cell has the overall responsibilityfor overseeing or assisting the relevant departments in the implementation of work-specific EMPs.

The goal of Sri Lanka�s Private Sector Infra-

structure Development project is to develop a

modern and efficient infrastructure system by

promoting significant private sector participa-

tion. Achievement of this objective entails

strengthening the government�s ability to

attract, negotiate, and complete private

sector- sponsored infrastructure projects

through the establishment of a long-term debt

facility and with technical assistance.

16



BOX 3.Examples of good practice in Category B adjustment loans and credits

Brazil Bahia Municipal Development (1997)The aims of this project are to improve the living conditions of the urban poor; to increase efficiency inthe municipal public sector and the sustainability of its financing; to support privatization andconcessioning of service delivery; to increase cost recovery in municipal investments; and to strengthenmunicipal financial management capacity, especially for effective expenditure control and capital budget-ing. Environmental issues were dealt with through such activities as the project�s technical assistancecomponent, which may finance, among other things, the drafting of municipal environmental legislationand the strengthening of municipal environmental councils.

The Bahia state environmental agency, Centro de Recursos Ambientais (CRA), was founded in 1980under the same state law that established the state�s environmental policy. The state�s environmentalcouncil, Conselho Estadual do Meio Ambiente (CEPRAM), which authorizes environment-relateddecisions and policies, was created at the same time. The CRA�s ability to review environmentalassessments is currently being strengthened under a project for pollution control of the Bahia dos Todosos Santos sea financed by the Inter-American Development Bank.

The CRA establishes and enforces specific guidelines for the evaluation of municipal projects withenvironmental impacts, subject to approval by CEPRAM. These guidelines fall into three categories,according to project size and expected impact. Requirements under the guidelines are as follows: (a) forprojects of significant size and impact, a full EA and report; (b) for projects of smaller size and impact, asimplified environmental assessment or environmental control report; and (c) for all other investments,licensing only. Environmental assessments under the project will be prepared by private consultants(hired by subproject proponents) and reviewed by the state environmental agency; environmentallicensing is the responsibility of CEPRAM. An operational manual will stipulate that environmentalassessment be conducted as needed, consistent with Brazilian law and Bank guidelines, before signatureof subloan contracts.

In addition to screening, infrastructure investments would be linked to specific institutional developmentor municipal reform interventions. For instance, investments in solid waste collection and disposal, ifdetermined to be a municipal priority and economically viable, could be accompanied by appropriateincreases in the relevant user charges or taxes, technical assistance in zoning and land use and in theimprovedenforcement of local environmental regulations, and training for involved staff at the local level.

Pakistan Power Sector Development Program (1994)The main objective of the project is to set the stage for a gradual and orderly privatization of the powersector in general and for the Water and Power Development Authority (WAPDA) in particular throughthe implementation of a strategic plan. The project is also designed to support investment programs,enhance resource mobilization, and strengthen the environmental assessment and mitigation capabilitieswithin the sector.

WAPDA established an in-house Environmental and Resettlement Management Unit to review andformulate the company�s environmental and resettlement policies; incorporate environmental and safetyprocedures into the company�s planning, construction, and operations; develop environmental regula-tions, procedures, and training; and monitor compliance with established requirements and standards.The environmental component of the proposed project would assist in the sectoral environmentalassessment of all its existing facilities.

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Results


A list of subprojects, made up of candidatesfor private sector participation and potentialborrowers from the proposed debt facility,was prepared in close consultation with thegovernment of Sri Lanka. These subprojectsinclude power stations, port development,toll roads, and wastewater treatment plants.Detailed EAs (and resettlement plans, asmandated by the country�s 1993 NationalEnvironment Act) for individual Category Asubprojects and other appropriate analysis forthose in Category B will be carried out byprivate sponsors and cleared by IDA prior toany on-lending disbursements to the sub-projects. Under the provisions of the NationalEnvironment Act, line agencies and ministriesare designated as project approving agenciesthat are responsible for directing EAs. Forthose projects where the line agencies takeadvantage of the project preparation technicalassistance provision of the credit, the EAwould be designed according to IDA require-ments.

For Category B projects, approaches similarto the ones stated above were taken. Some

projects seemed to contain more environmen-

tal initiatives than others (see Box 3 forexamples), either because specific environ-

mental components were incorporated in the

project itself or because the scope of therequired environmental analysis was expand-

ed. In general, in Category B projects,

partial, or comprehensive and detailed,environmental reviews and analyses were

conducted. These were accompanied by

mitigation measures, environmental manage-ment plans, safeguards, environmental

monitoring and enforcement activities,

technical assistance, studies and training, andthe establishment of environmental manage-

ment units in relevant agencies.

The only financial intermediary (FI) project,the Bulgaria Environment/PrivatizationSupport SAL, supports the comprehensivereform of Bulgaria�s environmental policiesby establishing frameworks for incorporatingenvironmental issues into privatization,integrating responsibility for environmentalliabilities into privatization agreements andimproving ongoing environmental perfor-mance. This project exemplifies an excellentapproach to making privatization environmen-tally sustainable.

Other than briefly mentioning the implemen-tation of adequate environmental safeguards,projects under Category C did not provide anydetails as to how environment was to beaddressed.

Of the eight projects that did not mention anEA category, two�Algeria Sixth Highwaysand India Coal Sector Rehabilitation�didprovide some details on their approach to theenvironment. The Algeria project developed

an environmental mitigation and monitoring

plan, a special environment handbook on

road pavement strengthening, and a special

technical The goal of Sri Lanka�s Private

Sector Infrastructure Development project is

to develop a modern and efficient infrastruc-

ture system by promoting significant private

sector participation. Achievement of this

objective entails strengthening the govern-

ment�s ability to attract, negotiate, and

complete private sector- sponsored infrastruc-

ture projects through the establishment of a

long-term debt facility and with technical

assistance.

A list of subprojects, made up of candidates

for private sector participation and potential

borrowers from the proposed debt facility,

18



BOX 4.Examples of good practice in technical assistance projects

Cape Verde Privatization and Regulatory Capacity Building (1999)The objective of this Category B technical assistance project is to support the efforts of the governmentof Cape Verde to alleviate poverty through the achievement of higher, private sector�based economicgrowth. The government�s accelerated privatization program was aimed at divesting a total of 30 small,medium-size, and large state-owned enterprises (SOEs) and financial institutions between 1998 and2000; 24 of these were to be divested during 1998�99. The program is being implemented by aspecial Project Coordinating Unit (PCU) under the office of the vice prime minister, using the divestituretechniques previously utilized. For instance, government shares in joint venture companies will be soldto other shareholders or to the public, with the right of first refusal given to shareholders under thestatutes of these companies. Privatization of small and medium-size SOEs will be carried out throughpublic sale or management/employee buyouts. The privatization strategies for large SOEs will betailored to each enterprise and are to include private placements coupled with public offering ofminority shares, public offering of majority shares, or separation of subsidiary activities from coreoperations before divestiture.

The project will help build capacity for sustainable privatization by helping create an appropriateenvironmental management framework to mitigate any negative impact that the reforms may cause. Itwould include design and implementation of systems to integrate environmental and economic policiesinto utility regulation; drafting of standard procedures for incorporating environmental components inpublic bidding documents; preparation of terms of reference for environmental evaluations of newconcessions; environmental audits for existing facilities to be divested that are identified to have signifi-cant environmental impact by Cape Verde�s National Council on the Environment; sensitization ofrelevant PCU staff to environmental issues; and training for the staffs of environmental agencies.

Guyana Financial and Private Sector Project (2000)The objectives of this category B project include improvement of the regulatory framework of theoverall financial sector to support private sector activity and achieve synergies among the banking,insurance, nonbanking, and securities sectors; assistance for the transfer of state-owned enterprises to theprivate sector to promote an enterprise-led economy; and support for the modernization of the publicsector through improved service delivery in the areas of procurement, auditing, and public sectormanagement in order to provide an enabling transactional environment for private sector business.

The PSD component of the project will fund technical assistance, training, and equipment to support theprivatization program, which will transfer approximately 13 to 16 additional state enterprises to theprivate sector. The component will also develop a framework for facilitating the public offering of sharesof such enterprises on the market and will fund work to value the financial accounts of all the remainingstate enterprises and consolidate these firms into a common holding company to facilitate future perfor-mance monitoring and readinessfor privatization. Finally, the component will support the developmentof policies under the privatization program to protect workers� and small investors� interests so as toensure fair and socially equitable treatment of such interests during the privatization process, as well asenvironmentally sound safeguards.

For the privatization of some of the natural resource�intensive industries such as mining, as well as otherindustries with potential environmental impacts (for example, pharmaceuticals), EAs will be carried outunder the project. The EA work will include conducting environmental audits and identifying environ-mental liabilities. The legal agreements on privatization between the government and the investors willinclude both accountability clauses for maintaining environmental safeguards and clauses concerningresponsibility for the costs of environmental cleanup, to be incorporated into the pricing agreement forthe sale. Guyana�s Environmental Protection Agency will be involved in vetting and providing environ-mental permits for newly privatized entities. As part of the privatization technical assistance, the U.K.development assistance office (ODA/DfID) in the Caribbean will provide additional grant funds toensure proper environmental auditing of public enterprises in the presale valuation process.

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Results


was prepared in close consultation with thegovernment of Sri Lanka. These subprojectsinclude power stations, port development,toll roads, and wastewater.

Technical assistance loans and credits

By Sector. Of the projects reviewed, 25percent (22 projects) received technicalassistance loans or credits. Only three sectorswere represented: PSD (17 projects), econom-ic policy (4 projects), and electric power (1project).

By EA Category. As expected, there were noCategory A projects. Most projects (14) werein Category C, and 8 fell under Category B(Table 4).

By Approach. Projects in Category B dealtwith the environment by undertaking environ-mental analyses that were less extensive thanwould be done for Category A projects. TheEAs were supported by environmental audits,mitigation measures, and the identification ofenvironmental liabilities and accountabilityclauses for concessionaires. (See Box 4 forexamples.)

Similarly, those Category C projects thatprovided details on their approach mentionedenvironmental audits, mitigation and monitor-ing, and studies.

Adaptable program loans

Four projects (4 percent of those projectsreviewed) were classified as adaptable

program loans (APLs); three of these are

agriculture projects and one is a water supply

and sanitation project. All four projects were

assigned to EA Category B. Accordingly, EIAs

were undertaken, along with training, capaci-

ty building, mitigation measures, and the

establishment of environmental management

programs. Some APL projects included

specific environmental components in the

project design.

The Côte d�Ivoire Second Agriculture Services

project exemplifies a well-designed APL in

respect to its approach to the environment.

The aim of the project is to support agricul-

tural growth through environmentally

supportable increases in farm-level productiv-

ity. An EIA was completed as part of project

appraisal. The project will work with various

groups to train and educate staff and journal-

ists on environmental management and to

establish environmental indicators. Risks

associated with agricultural intensification

and increased chemical use will be mitigated

by the strong promotion of techniques

outlined in the Pest Management Program and

the Sustainable Land Management Program.

Learning and innovation loans

Three projects (3 percent of the projects

reviewed) were in the learning and innovation

loans (LIL) group. Two were in PSD and one

in water supply and sanitation.

One project in this group, China

Enterprise Reform Loan, did not state

an EA category or give any details on

its approach to the environment. It

merely mentioned that the project

Table 4. Distribution of technical assistance loans byEA category

A B C FI N/C Total

Economic Policy 4 4

Electric Power 1 1

Private Sector Development 7 10 17

Total 8 14 22

20



would not aim specifically at environmentalobjectives.

The Dominican Republic Wastewater Dispos-al in Tourism Centers project was classifiedas Category A, and a full EA was commis-sioned. Since the project�s objective was toapply and test innovative technology forenvironmentally sound disposal of treatedwastewater from small and medium-sizecoastal towns, the EA process was based onan analysis of alternatives for wastewatertreatment and disposal and on an assessmentof current and dispersion parameters at thedisposal site. The EA report recommended anenvironmental management plan, whichproposed a number of measures for mitigatingenvironmental impacts during the construc-tion and implementation phases.

The Algeria Privatization Assistance project,classified as Category C, is another goodexample of more being done regardingenvironmental issues than was required bythe Bank. This was due in large part to thecore environmental legislation already inplace in Algeria. It was stated in the projectthat before a bid launch, potential liabilitiesare to be identified through a due diligenceprocess to fully alert prospective buyers toenvironmental liabilities before they submittenders. Terms of reference for the invest-ment banks hired under the project will

specify that they assist the Conseil de Privati-sation in taking environmental aspects dulyinto account in the preparation and negotia-tion of the transactions. There will be a cleardelineation of responsibilities for assumingpast environmental liabilities and a commit-ment by the private investor to comply withall current environmental regulations with aview to meeting international standards overthe medium term.

C. ANALYSIS BY EA CATEGORY

EA Category B dominated the tabulation, witha total of 44 projects, or 50 percent of theentire sample. Category C projects followed,with 30 percent. The seven Category Aprojects covered all sectors except agricul-ture, economic policy, and mining), with twoin water supply and sanitation. Economicpolicy had the largest number of projects (5)in the �not classified� category. The reasonmay be the lack of a direct connectionbetween the improvement of economicpolicies for fostering privatization and theimprovement of the environment or theimplementation of any kind of environmentalactivity or component.

By Region. Three Category A projects wereimplemented in LAC, two in EAP, and oneeach in ECA and South Asia. Sub-SaharanAfrica had the most Category B projects, with

Table 5. Distribution of projects by sector group and EA category

Note: AGR: agriculture, PSD: private sector development, WSS: water supply and sanitation.

EA

Category AGR

Econ.

policy

Electric

power Environment Mining PSD Trans.

Urban

dev. WSS Total

A 1 1 1 1 1 2 7

B 10 1 7 1 1 9 4 1 10 44

C 3 6 17 26

FI 1 1

N/C 5 1 1 2 1 10

Total 13 12 9 3 2 29 6 2 12 88

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Results


0

5

10

15

20

25

30

35

AFR EAP ECA LAC MNA SAR

A B C FI not classified

41 percent of the total, followed by LAC (25percent), South Asia (14 percent), and ECA(11 percent). Sub-Saharan Africa also had thegreatest number of Category C projects,accounting for 38 percent of the total; ECAhad 23 percent, and EAP had 15 percent. LACwas the only region without any �not classi-fied� projects.

By Lending Instrument. Of the seven Catego-ry A projects, four were SILs, two wereadjustment loans, and one was a learning andinnovation loan. Most Category B projectswere SILs (20 projects) or adjustment loans(12 projects). For Category C, technicalassistance projects ranked highest (14 out of26 projects). Eight of the 10 projects in the�not classified� group were adjustment loans.Again, this may be attributed to the lack of adirect relationship between macroeconomicissues and environmental protection and tothe nature of an adjustment loan, which ismeant to be a quick-disbursing instrumentthat supports structural reform in a sector orin the economy as a whole. No conclusioncan be drawn as to the effect of policychanges on this categorization, since half of

the �not classified� projects were approvedbefore 1999 and half were approved in orafter 1999.1

The Bank�s Operational Directive (OD) 4.01requires that a complete and detailed environ-mental assessment be performed for allCategory A projects. This requirement wasmet by all Category A projects in the sample.These projects also developed and imple-mented environmental management andmonitoring plans, mitigation measures,related studies, and integrated environmentalcomponents.

A less extensive environmental analysis or itsequivalent was performed in projects with aCategory B rating. Although some projectswere more comprehensive or more detailedthan others, in most cases an environmentalmanagement and monitoring plan wasdeveloped, along with mitigation measures,environmental audits or screening, technicalassistance, and training. Further initiatives inaddressing environmental issues includedidentifying the responsibilities and liabilitiesof concessionaires, integrating environmental

Figure 5Number of projects by region and EA category

22



components into project design, and strength-ening the institutional, regulatory, and legalframeworks in client countries.

There is no requirement that environmentalassessments be performed for Category Cprojects, but EAs were carried out for mostprojects in the sample. The most commonfeature was the implementation of a monitor-ing and mitigation plan, which includescertain guidelines and safeguards to befollowed.

For instance, the Niger Privatization andRegulatory Reform project (1999) includesenvironmental audits and evaluations of newinfrastructure concessions and leases and ofexisting installations to be privatized that areidentified as having significant environmentalimpact. Audits and evaluations will includecriteria evaluation, analysis of alternatives,and mitigation and monitoring procedures.India�s Technical Assistance for EconomicReform project (2000), which has the aim ofenabling the public sector to withdraw fromareas where the private sector is moreeffective, includes a subproject of the UttarPradesh government for undertaking environ-mental audits of public enterprises that willbe closed or divested as part of the state�sreform program. Finally, the Gabon Privati-zation and Regulatory Capacity Buildingproject, designed to increase the level ofprivate sector investment in the country byfacilitating rapid divestiture of state enterpris-es and by improving the efficiency of statespending, pays special attention to potentialenvironmental impacts. During projectimplementation, provisions will be made notonly to comply with existing regulations andthe National Environment Plan but also tointegrate them into the new regulatoryframework.

Some Category C projects are aimed atclarifying and identifying environmentalliabilities to ensure that privatized firms donot neglect their responsibility toward theenvironment and that they conduct environ-mental assessments when necessary. Forinstance, the Private Sector Development andCapacity Building project in Madagascarincludes procedures incorporating adequateenvironmental safeguards that will be agreedon with IDA for preparation and execution ofprivatization transactions involving especiallylarge public enterprises.

An institution-building technical assistanceproject in Azerbaijan will help clarify envi-

ronmental liability in the process of

privatization of medium-size and largeenterprises under the mass privatization

program. Similarly, the Privatization Support

project in Yemen clarifies environmentalliabilities in the context of the privatization

strategy for each large transaction. Particular

attention will be paid during implementationto ensure that environmental audits of

adequate quality are carried out for those

transactions in which the government acceptssignificant environmental liabilities.

Most projects that fell into the �not classified�

category did not provide information on theirapproach to the environment. Exceptions

were Moldova Private Sector Development

(1996), which includes development of amanual on environmental review procedures,

and Algeria Sixth Highways (1995), which

will develop a special environment handbookon road pavement strengthening. One project

in this category, Indonesia Solar Home

Systems (1997) was obviously environmentalby nature, and another, India Coal Sector

Rehabilitation (1998), relied on a separate

23

Results


IDA-financed Coal Sector Environmental and

Social Mitigation project to address environ-

mental concerns.

D. ANALYSIS BY SECTOR GROUP

This section contains a brief discussion of the

efforts made in each sector group to address

environmental issues.

Agriculture. What stands out in the ways

agriculture projects address the environment

is the integration of environmental compo-

nents into project design. These components

go beyond the requirements set out in OD

4.01 for projects with potential environmental

impacts. For instance, subprograms embed-

ded in project design address integrated pest

management, sustainable land management,

natural resources management, monitoring

and mitigation of overexploitation of resourc-

es such as aquifers, aquatic resources

development and conservation studies, and

training initiatives for farmers, communities,

private service providers, and government

entities.

A good example is the Mozambique Agricul-

ture Sector Expenditure Program (PROAGRI),

in which numerous potential impacts, both

positive and negative, were identified through

an EA. A subprogram on natural resources

management will help in attaining sustain-

ability. Through it, PROAGRI will support the

creation of an environmental planning

capacity; the appointment of an environmen-

tal monitoring committee; the conduct of

detailed EIAs and of publicity and education

efforts; and, the preparation of an environ-

mental management implementation and

monitoring plan.

Economic Policy. As has been mentioned,Economic Policy projects generally did notprovide details regarding their approach tothe environment. The few exceptions arediscussed here.

In the Georgia Structural Reform Supportproject (1999), which aims to acceleratechange in the respective functions of thepublic and private sectors in delivering keyservices in the country, the only componentexpected to raise environmental concerns isthe Hospital Restructuring Component,because of waste management issues and theneed for pollution controls for incinerator,asbestos, and medical wastes in the facilitiesto be privatized. A mitigation plan wasdrawn up that includes (a) ensuring thatincinerators are designed according tointernational standards and are suitablylocated; (b) ensuring that all buyers ofprivatized facilities are aware of the asbestosin buildings and the alternatives available forfuture rehabilitation; (c) conducting aninventory of existing medical waste in thefacilities to be privatized; and (d) preparing aremoval action plan to be approved by IDA.

For the India Technical Assistance for Eco-nomic Reform (2000) and the Central Africa

Republic Policy Support (2000) projects,

structures were put in place to ensure that theBank�s environmental standards are followed

in preparations for privatization or divesti-

ture. For the Indian project, each subprojectwill be so structured as to ensure that any

issues requiring attention under the Bank�s

operational guidelines are addressed. Thesubproject of the Uttar Pradesh state govern-

ment includes funds for undertaking

environmental audits of public enterprisesthat will be closed or divested as part of the

24



state�s reform program. For the project in theCentral African Republic, two subcomponentsaddress environmental concerns in relation tothe privatization of two parastatals. In eachcase, an EA and an environmental manage-ment plan will be carried out to reviewpossible environmental issues and proposeways to address them.

Electric Power. Because of the nature of theelectric power and energy projects reviewedhere, environment was always addressed.Although only one project was rated asCategory A, almost all projects undertookwide-ranging environmental initiatives, froma sectoral environmental assessment in thePakistan Sector Development Program (1994)to an overall environmental policy in IndiaUttar Pradesh Restructuring (2000) and acomprehensive EIA in Lebanon Power SectorRestructuring (1997).

In addition, mitigation measures, resettlementplans, and environment-friendly concessioncontracts were developed in this sector. Therewere also three electric power projects thathad environmental objectives � IndonesiaSolar Home Systems (1997), ArgentinaRenewable Energy Markets (1999), and IndiaSecond Renewable Energy (2000).

Environment. The primary objective ofprojects in this sector was to facilitateprivatization by clarifying and addressingenvironmental issues; by assisting privateentities to improve their environmentalperformance, reduce health hazards, andcomply with national environmental regula-tions and international good practice; and bystrengthening the regulatory and monitoringcapacity of governments and firms seeking toprivatize. The sample projects in this sector

were Ghana Mining Sector Development andEnvironment, the Bulgaria Environment/Privatization Support SAL, and the BulgariaEnvironmental Remediation Pilot.

Mining. The sample included two projects inthe mining sector: the Russian FederationSecond Coal SAL (1998) and India Coal SectorRehabilitation (1998). Under the Russianproject, a sectoral environmental assessmentwas carried out in the context of the Bank�soverall sector work in the Russian coalindustry. The Indian project benefited fromthe separate Coal Sector Environmental andSocial Mitigation project, worth $63 million.

Private Sector Development. Privatization-related activities fall mainly into this group.Most PSD projects aim to assist clientgovernments in enhancing private sector�leddevelopment by privatizing key publicutilities or restructuring and reforming publicenterprises. Other PSD projects focus onregulatory capacity building, institutionbuilding, investment promotion, and public-private partnerships. Simply stated, the Bank,through PSD, is involved in advising clientson issues related to attracting investment,improving capacity, and facilitating theprivatization process.

Given the nature of these projects, thedominant approaches in addressing environ-mental concerns are to identify pastenvironmental damage and determine liabili-ties for both concessionaires and thegovernment; to perform environmental auditsin firms to be privatized; and to evaluate orreview a client country�s environmental lawsand regulatory framework. Other approachestaken were to develop safeguards or environ-mental guidelines, conduct studies, require

25

Results


environmental assessments when necessary,and promote institutional strengthening forbetter enforcement of standards.

Transportation and Urban Development. Inthe transportation sector, comprehensive EAsand less extensive environmental analyseswere performed. These were supplementedby environmental management plans thatincluded monitoring and mitigation proce-dures, as well as guidelines (for instance, inconstruction) and safeguards (in bid docu-ments, contracts for work, and so on) thatwere contained in special environmentalhandbooks or manuals. Technical assistanceand training formed a large part of thesector�s environmental work. Similar ap-proaches were taken in the two urbandevelopment projects.

Water Supply and Sanitation. Given theclose ties between this sector and the envi-ronment, steps were taken in all water supplyand sanitation projects to ensure that environ-mental concerns were addressed. For the twoCategory A projects, full EAs were commis-sioned, accompanied by environmentalmanagement plans to be implemented atdifferent stages of the project cycle. Theremaining projects were all in Category B.Approaches ranged from a limited environ-mental review, as in Armenia MunicipalDevelopment (1998) to a detailed EA supple-mented by studies, monitoring plans,mitigation measures, and screening ofsubprojects (for example, Senegal WaterSector 1995).

The essential aspects of water supply andsanitation projects involving privatization arethe changing roles of government and theprivate sector and how these roles affect

environmental management. Ownership,management, and delivery of water supplyand sanitation services were traditionally theresponsibility of government-run utilities.With the increasing involvement of privatecompanies, the public sector is taking on therole of regulator and overseer.

For example, in the Uruguay OSE (ObrasSanitarias del Estado) Modernization andRehabilitation APL (2000), initial activitiesincluded improving the public utility�soperational performance and environmentalmanagement capacity through technicalassistance and investments. One of the aimsof the project is to grant the Maldonadoconcession, which will break the OSE�smonopoly, create pressure for reform, andpromote competition. Eventually, the projectwill establish an independent regulator whichwill ensure that regulatory and controlfunctions are clearly separated from serviceprovision. Under this setup, the governmentwill have more room for dealing with suchissues as environment while ensuring thatservices are continuously provided and thatstandards are met.

The project will address growing urbanenvironmental quality issues by strengtheningthe OSE�s environmental planning andmanagement capacity and by funding theconstruction of two wastewater treatmentfacilities. As part of the APL, a sector envi-ronmental assessment will be prepared toanalyze current environmental managementcapacity in the sector and propose appropri-ate standards, regulations, and institutionalstructures. Project preparation included aprogrammatic EA that screened all physicalproject components for adverse environmen-tal impacts, an environmental impact study of

26



the Minas sewage treatment plant, and a newenvironmental licensing process for treatmentplants.

E. ANALYSIS BY ENVIRONMENTAL

APPROACH

In identifying environmental approaches inprivatization projects, certain questions needto be asked. This section sets forth thosequestions and reviews how they were an-swered in the sample projects. (See Box 5 forexamples of projects under the differentenvironmental approaches.)

Has an assessment of the legislative frame-work and environmental regulatory capacityin the client country been carried out?Documents for 24 percent of the 88 projectsin the sample stated that such an assessmenthad been performed.5 More often than not, itwas discovered that a client country hadinadequate regulatory power in environmentalmatters. This shortcoming stems fromfragmentation of authority or from overlap-ping roles in the multiple agencies thathandle environment-related concerns. Incases where the law was in place, problemsin implementation, enforcement, and moni-toring were discovered.

Are environmental aspects integrated intobidding documents and sales contracts?Integration is present in some projects in theeconomic policy, electric power, PSD,transportation, and water and sanitationsectors. Bidders on projects are required tomeet certain environmental responsibilities,through either technical expertise or financialassistance. For instance, a private watercompany must have experience in incorporat-

ing wastewater collection and treatment intothe provision of drinking water, taking intoaccount broader watershed managementprograms. Such requirements can then beincluded in the contracts awarded to winningbidders. Twenty-three percent of the 88projects approached environmental concernsin this way.

Are environmental audits and more detailedassessments undertaken? Who does it, whopays, and who is responsible for reviewingquality? Environmental audits are usuallyperformed to determine the environmentalrecord of firms being privatized. The auditsare often carried out by consulting firms atthe request of the donors and the executingagencies. Expenses are shouldered either bythe client government (sometimes with donorassistance) or by the firm itself. Qualityreview is the responsibility of the client�sprimary environmental agency. Environmentalaudits and assessments were conducted in 26percent of the 88 sample project.

Are there environmental management plans?Who is responsible for implementation andoversight? Does the Bank have a role inmonitoring the implementation of environ-mental measures? Most projects, especiallythose rated as EA Category A or B, haveenvironmental management plans. Clientcountries bear most of the responsibility forimplementation and oversight, and to acertain extent the Bank has a role is this areaas well. The development of environmentalmanagement plans was mentioned in 32percent of the projects in the sample.

Has an assessment of past environmentalliabilities and remediation needs beenundertaken? Who is responsible for undertak-

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Results


ing remediation? Who is paying? Who isoverseeing the remediation? What environ-mental performance standards apply toremediation and ongoing operations? Has acompliance period been set, and of whatlength? Assessment of past environmentalliabilities and remediation needs was con-ducted in 14 percent of the 88 projects. Agood example is the Bulgaria EnvironmentalRemediation Pilot, which is envisaged as amodel for addressing past environmentalliabilities and damages in the process ofprivatization. Under the leadership ofBulgaria�s Ministry of Environment, a projectoversight committee was established tooversee project implementation and provide

BOX 5Examples of environmental approaches in the sample projects

Assessment of legislative framework and environmental regulatory capacity! Brazil Bahia Municipal Development (1997), Category B. The technical assistance component of the

project may finance, among other things, the drafting of municipal environmental legislation and thestrengthening of municipal environmental councils. Specific guidelines for evaluation of municipalprojects with environmental impacts have been established by the state environmental agency. Thenew rules establish guidelines for environmental screening by project size and expected impact. Anoperational manual would stipulate that EA is to be conducted as needed, consistent with Brazilianlaw and Bank guidelines, prior to signature of subloan contracts.

! Gabon Privatization and Regulatory Capacity Building (1997), Category C. During project imple-mentation, special attention will be given to any potential environmental impacts, and provisionswill be made not only to comply with existing regulations and the national environmental plan butalso to integrate these into the new regulatory framework.

Integration of environmental aspects into bidding documents and sales contracts! Central African Republic Policy Support (2000), Category C. Two subcomponents address environ-

mental concerns in relation to the privatization of two parastatals. In each case an EA and anenvironmental management plan (EMP) will be carried out to review possible environmental issuesand propose ways of addressing them.

! Guyana Financial and Private Sector (2000), Category B. For the privatization of some of the naturalresource�intensive industries, as well as other industries with potential environmental impacts, EAswill be carried out under the project. This activity will include conducting environmental audits andidentifying environmental liabilities. The legal agreements on privatization between the governmentand the investors will include both accountability clauses for maintaining environmental safeguardsand clauses concerning responsibility for the costs of environmental cleanup, to be incorporated intothe pricing agreement for the sale. In addition, the Guyana Environmental Protection Agency willbe involved in vetting and providing environmental permits for newly privatized entities.

guidance. Project implementation (includingan emergency remediation program andremediation of past environmental damages)will be undertaken by MDK Copper Smelter,the firm to be privatized. The implementa-tion period is four years.

A number of projects also conducted back-ground studies, implemented mitigationmeasures, and included environmentalcomponents in project design. Four percentof the sample used background studies ormitigation measures, and 6 percent incorpo-rated explicit environmental components intoproject design. Another 4 percent usedindirect environmental approaches.

28



Conduct of environmental audits and detailed assessments! Colombia Toll Road Concession (1999), Category A. The EIA study includes a detailed environment

management plan with a plan for resettlement and a program for social assistance. Mitigation andcompensatory measures for possible direct and indirect impacts were identified. The environmentalsubdirectorate of the National Institute of Roads (INVIA) prepared a full EA and conducted publicconsultations. All of the environmental responsibilities assigned to the concessionaire in the EIAstudy were clearly identified and incorporated, and environmental guidelines for road constructionwere developed.

! Senegal Water Sector (1995), Category B. Detailed environmental analysis showed that therewould be impacts on public health and aquifers. The groundwater study served as a basis for theEIA. The environmental mitigation plan includes prevention of overexploitation, monitoring,measures to mitigate impacts of construction, and sewage treatment and disposal.

Development of environmental management plans! Philippines Second Subic Bay (1997), Category B. An EIA carried out by the Subic Bay Metropoli-

tan Area (SBMA) Ecology Center showed that most of the environmental impacts will occur as aresult of the upgrading and rehabilitation of infrastructure. The impact of the wellfield serving thewater supply component was carefully assessed, and satisfactory mitigation measures were includedin the component design. The project will also finance the planting of trees in the watershed toprevent erosion and maintain the local ecosystem. Prevention of overabstraction of groundwater isprovided for. The SBMA also developed an expanded environmental management plan to includean indigenous peoples development plan, community-based forest management, communitydevelopment and training, and infrastructure improvements.

! Algeria Fourth Highways (1995), category not classified. A special environment handbook wasdeveloped on road pavement strengthening work. A technical assistance component includesenvironment advice services. An environment mitigation and monitoring plan was also developed.

Assessment of past environmental liabilities and remediation needs! Georgia Structural Reform Support (1999), Category B. The only component expected to raise

environmental concerns is the Hospital Restructuring Component, which provides waste manage-ment and pollution controls on incinerator, asbestos, and medical wastes in the facilities to beprivatized. According to the mitigation plan that was drawn up, incinerators are to be designedaccording to international standards and are to be suitably located, and all buyers of privatizedfacilities are to be made aware of the asbestos in buildings and the alternatives available for futurerehabilitation. The mitigation plan also provides for conducting an inventory of existing medicalwaste in the facilities to be privatized and preparing a removal action plan to be approved by IDA.

! Algeria Privatization Assistance (2000), Category C. Prior to a bid launch, potential liabilities will beidentified through a due diligence process to fully alert prospective buyers to environmentalliabilities before they submit tenders. Terms of reference for the investment banks hired under theproject will specify that they assist the Conseil de Privatisation in taking environmental aspects dulyinto account in the preparation and negotiation of the transactions. There will be a clear delineationof responsibilities for assuming past environmental liabilities and a commitment by the privateinvestor to comply with all current environmental regulations with a view to meeting internationalstandards over the medium term.

Background studies and mitigation measures! Burkina Faso Private Irrigation (1999), Category B. The project would undertake studies and pilot

selected best practices in participatory environmental management in light of the potential health

29

Results


effects from irrigation schemes. This would lead to a better understanding of the complex interrela-tionship among water quality, supply, use, and disposal and would inform the subsequent design of amitigation plan for a future large-scale operation.

! Bangladesh Fourth Fisheries (2000), Category B. The potential adverse environmental impacts thatcould result from implementation of the project have been identified and minimized in the projectdesign. The project would also include a GEF-assisted Aquatic Resources Development, Manage-ment, and Conservation Studies component that provides for monitoring activities as well asinstitutional strengthening.

Environmental project components! Mozambique Agriculture Sector (1999), Category B. �The initial EA for the Agricultural Sector

Public Expenditure Program (PROAGRI) has been completed and has identified numerous potentialimpacts, both positive and negative. The natural resources management subprogram should help inattaining sustainability by developing mitigation measures and ways to optimize potentially positiveimpacts. PROAGRI will support the establishment of an environmental planning capacity, appoint-ment of an environmental monitoring committee, conduct of detailed EIAs, publicity and education,and preparation of an environmental management implementation and monitoring plan. The secondphase of the EA will be carried out to further develop these plans for creating capacity.

! Lesotho Agricultural Policy and Capacity Building (1998), Category B. The project design ad-dresses the most important environmental issues identified in the report, such as soil erosion andinadequate forest cover. The project will include technical assistance to establish improved environ-mental monitoring in the Ministry of Agriculture and the National Environment Secretariat and willprovide on-the-job training on the proposed mitigation measures outlined in the EA report.

31

Conclusions

The main purpose of this review hasbeen to identify approaches to promoting sustainable private sector develop-

ment and environmental management. Otherobservations emerged from the analysis of thesample of 88 World Bank projects withprivatization-related components. Mostprojects in the sample were in the Sub-SaharanAfrica region, and the most common lendinginstrument was specific investment loans orcredits. The most frequently assigned EAcategory was Category B; thus, almost allprojects in the sample were required toundergo at least a limited environmentalanalysis. PSD was the sector with the greatestnumber of privatization-related projects,followed by transportation and agriculture.

The most significant findings relating to thelinkages between environment andprivatization are shown in the section �Analy-sis by Environmental Approach.� The mostcommon approaches for addressing environ-mental issues in privatization were to developenvironmental management plans, to conductenvironmental audits and detailed assess-ments, and to assess the legislative frame-works and environmental regulatory capacityof the client countries.

The study showed that privatization can be seenas an opportunity to address environmentalissues beyond mitigation of harm and compli-ance with safeguards, using the approachesidentified in the sample. The main challenge inseizing the opportunities that privatization canbring is to identify the limitations on doing so.These limitations may include:

! Willingness and capacity of client countriesto pay attention to environmental issues, forreasons such as limited understanding of thelinks between environmental issues and thesustainability of privatization programs, andfear of increased financial costs and time.

! Type of project. The review has indicateddifficulties with integrating environmentalissues in certain operations. For instance, ineconomic policy projects, the links betweenthe economic and environmental policyframework have not been generally made.

With the growing importance of the private

sector�s role in economic and human develop-

ment, it is essential for the World Bank to

make further efforts to ensure that private

sector activities, particularly those involving

privatization, are socially and environmentally

responsible.

Chapter 4

33

Summary of Projects with Privatization Components

Appendix

No. Region Country Project name

Approval

FY

Sector

group

EA

category

Special/ general

approach taken Details of the approach

1 AFR Benin PrivateSector

2000 PSD B Assessment ofpastenvironmentalliabilities andremediation needs

Possible pre-existing environmental impactliabilities of two textile companies to beprivatized will be assessed, and thelegislative and regulatory framework willbe reviewed to determine the necessarymitigation plan. An environmentalassessment of the EPZ (Export ProcessingZone) was carried out during projectpreparation.

2 AFR BurkinaFaso

PrivateIrrigation

1999 Agricul-ture

B Backgroundstudies/ mitigationmeasures

Findings of the EA indicate that activitieswould not have any significant negativeenvironmental impact. The project wouldundertake studies and pilot selected bestpractices in participatory environmentalmanagement, in light of the potentialhealth effects caused by irrigation schemes.This would lead to a better understandingof the complex interrelationship amongwater quality, supply, use, and disposal andthe subsequent design of a mitigation planfor a future large-scale operation.

3 AFR Cameroon ThirdStructural

AdjustmentCredit

1998 EconomicPolicy

Notclassified

No details given

4 AFR Cameroon Growth andPublic/PrivatePartnership

2000 PSD B Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments;Assessment ofpastenvironmentalliabilities andremediation needs

Partial EA. In order to assess any potentialliability or environmental risk, an overallenvironmental audit will be conducted forthe enterprises to be privatized. Based onthat audit, detailed environmentalassessments will be conducted prior toeach privatization and its conclusion,including the mitigation action plan, will beinserted in the bidding documents.

34




Approval

FY

Sector

group

EA

category

Special/ general


5 AFR Cape Verde PRIVATIZA -TION TA

(Privatizationand

RegulatoryCapacityBuildingProject)

1999 PSD B Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments;Development ofenvironmentalmanagement plans

An environmental framework will becreated to mitigate any negative impactthat the reforms may cause. It wouldinclude activities to design and put in placesystems to integrate environmental andecon policies in utility regulation; standardprocedures to include environmentalcomponents in public bidding documents;preparation of TORs for environmentalevaluations of new concessions andenvironmental audits for existing facilitiesto be divested, that are identified to havesignificant environmental impact by theCape Verde's Nat’l Council on theEnvironment; and relevant sensitization ofPCU staff to environmental issues andtraining for the staff of environmentalagencies. EA to be undertaken duringproject preparation, inc. environmentalaudits.

6 AFR CentralAfrican

Republic

PolicySupportProject

2000 EconomicPolicy

C Environmentalaspects integratedinto biddingdocuments andsales contracts;Development ofenvironmentalmanagement plans

Two sub -components addressenvironmental concerns in relation to theprivatization of two parastatals. In eachcase, an EA and EMP will be carried out toreview possible environmental issues andpropose ways to address them.

7 AFR Côted'Ivoire

SecondAgricultural

Services

1999 Agricul-ture

B Environmentalprojectcomponents

An EIA was completed as part of projectappraisal. The project will work withvarious groups on training and educatingstaff and journalists on environmentalmanagement; establishment ofenvironmental indicators. Risks associatedwith agricultural intensification andincreased chemical use will be mitigated bythe strong promotion of techniques suchas Pest Management Program and theSustainable Land Management Program.

8 AFR Gabon Privatizationand

RegulationCapacityBuilding

TechnicalAssistance

1997 PSD C Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country

During project implementation, specialattention will be given to any potentialenvironmental impact and provisions willbe made to not only comply with existingregulations and the Nat’l EnvironmentalPlan, but also to integrate them into thenew regulatory framework.

10 AFR Ghana PublicEnterprise

Reform

1996 PSD C Environmentalaspects integratedinto biddingdocuments andsales contracts

All new owners of the privatizedenterprises will be subject toenvironmental laws and standards in forcein Ghana. Environmental issues will beexamined as part of the periodic impactassessments of the program.

35Alethea Mariel T. Abuyuan

Appendix � Summary of Projects with Privatization Components


Approval

FY

Sector

group

EA

category

Special/ general


11 AFR Ghana SecondEconomicReformProject

1999 EconomicPolicy

Notclassified

No details given

12 AFR Lesotho AgriculturePolicy andCapacityBuilding

1998 Agricul-ture


EIA was carried out and endorsed by thegovernment. The project has addressed inits design the most importantenvironmental issues identified in thereport such as soil erosion and inadequateforest cover. The project will also includetechnical assistance to establish improvedenvironmental monitoring between MOAand the Nat’l Environment Secretariat andprovide on-the-job training on theproposed mitigation measures outlined inthe EA report.

13 AFR Madagascar PrivateSector

Developmentand Capacity

Building

1997 PSD C Environmentalaspects integratedinto biddingdocuments andsales contracts

For the PE divestiture component,procedures will be agreed with IDA forpreparation and execution of transactionsfor especially larger PEs incorporatingadequate environmental safeguards.

14 AFR Madagascar SecondStructural

AdjustmentCredit

1999 EconomicPolicy

Notclassified

No details given

15 AFR Malawi Privatizationand Utility

ReformProject

2000 PSD B Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments

Partial assessment conducted. Theapproach adopted has been to agree to ona specific set of guidelines for conductingEA but to defer conducting the EAs closerto when the privatization transactionwould occur. In accordance with thesafeguard policies, a pre-screening ofprivatization candidates to be fundedunder the project was undertaken and thelist of candidates for which environmentalaudits and assessments would beundertaken was agreed and included.

16 AFR Mali TransportSector

1994 Trans -portation

B Environmentalaspects integratedinto biddingdocuments andsales contracts;Development ofenvironmentalmanagement plans

The Environment Action Plan adopted bythe government covers the keyenvironmental actions to be taken. Anenvironmental analysis was carried out.Ways to prevent adverse environmentalimpacts during construction wereproposed. Suitable safeguards will beincorporated into bid documents andcontracts for works.

17 AFR Mali IrrigationPromotion

1997 Agricul-ture

B Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country

Environment analysis (4% of base cost)undertaken -- mitigation measures weredeveloped to prevent soil degradation andthe development of waterborne diseases.The environmental mitigation action planwas discussed and agreed up duringnegotiations. The project would finance astudy on measures related to groundwateruse that would come up withrecommendations for Mali's NationalWater Policy.

36




Approval

FY

Sector

group

EA

category

Special/ general


18 AFR Mauritania Energy/Water/

SanitationSectorReform

TechnicalAssistance

2000 ElectricPower

B Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments;Assessment ofpastenvironmentalliabilities andremediationneeds;Development ofenvironmentalmanagement plans

Partial EA and EMP; a set of environmentalregulations for the electricity and watersectors will be developed; government willreview and approve these regulationswhich will form an annex to Mauritania'senvironmental law; environmentalproblems related to power installations tobe privatized will be addressed in theframework of the privatization ofSONELEC, where environmental liabilitiesare to be evaluated and mitigationmeasures entrusted to the new operatorunder the concession agreement;supporting the overhaul of the petroleumproduct specs - reduction of lead ingasoline and sulfur in gas oil. Investmentbank will conduct an environmental auditfor SONELEC privatization - focus on theenvironmental conditions at SONELEC'sfacilities, remediation measures, andfinancial responsibilities of the newoperators.

19 AFR Mozam-bique

Mozam-bique

First NationalWater

1998 WaterSupply &

San.


An EA was undertaken. Concerns wereraised about the increase in wastewater.This project responds by incorporating aplanning and design study for the provisionof upgraded sanitation and drainage, inpreparation for implementation under theproposed Urban Environment Project.Environmental monitoring will be providedfor in the TOR. A requirement toundertake EAs will also be included in theTOR for studies in the planning and designof works.

20 AFR AgriculturalSectorProject

1999 Agricul-ture

B Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Development ofenvironmentalmanagement plans

Initial EA for PROAGRI has beencompleted. Numerous potential impacts(both positive and negative) have beenidentified. The Natural ResourcesManagement subprogram should help inattaining sustainability. EA identifiedconstraints to environmental management,mitigation measures and measures tooptimize potentially positive impacts.PROAGRI will support the establishmentof environmental planning capacity,appointment of environmental monitoringcommittee, conduct of detailed EIAs,publicity and education, preparation of anenvironmental managementimplementation and monitoring plan.Second phase of EA will be carried out tofurther develop these plans for establishingcapacity.




Approval

FY

Sector

group

EA

category

Special/ general


21 AFR Mozam-bique

SecondNationalWater

1999 WaterSupply &

San.

B Development ofenvironmentalmanagement plans

A review and update of the EA wasundertaken aimed at ensuring that issuesand further developments duringsubsequent preparation which may haveenvironmental significance are fully takeninto account and responded to. The EAcontains an EMP. A full -time EA advisorwas appointed by DNA

22 AFR Mozam-bique

Railway andPort

Restructuring

2000 Transpor -tation


An EMP was prepared, with an extensiveenvironment audit of the port-railwaysystems in the country. Progress ofimplementation would be periodicallyreviewed. The concessionaires would berequired to make specific allocation offunds for procurement of safety andenvironment-related equipment for therailways and ports and for TA andconsultancy studies of required.

23 AFR Niger Pilot PrivateIrrigation

1995 Agricul-ture


Environmental protection component:Project includes a rigorous program ofphysical monitoring of shallow aquiferlevels and soil and water quality in theproject zones to safeguard againstoverexploitation of these aquifers in futureinvestments in irrigation production and toensure sustainability of the irrigatedfarming systems. The EA was undertakenas part of the normal work of projectpreparation

24 AFR Niger Privatization/Regulatory

Reform

1999 PSD C Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments

The project will include environmentalaudits and evaluations of newinfrastructure concessions/ leases and ofexisting installations to be privatized thatare identified as having significantenvironmental impact. Audits andevaluations will include criteria evaluation,analysis of alternatives, mitigation andmonitoring procedures.

25 AFR Rwanda EconomicRecovery

Credit

1999 EconomicPolicy

C No details given

26 AFR Senegal PrivateSector

CapacityBuilding

1995 PSD C No details given

27 AFR Senegal Water SectorProject

1995 WaterSupply &

San.

B Conduct ofenvironmentalaudits and detailedassessments;Development ofenvironmentalmanagement plans

Detailed environmental analysis showedthat there would be impacts on publichealth and aquifers. The groundwaterstudy served as a basis for the EIA. Theenvironmental mitigation plan includesprevention of overexploitation,monitoring, measures to mitigate impactsof construction and sewage treatment anddisposal.

38




Approval

FY

Sector

group

EA

category

Special/ general


28 AFR Tanzania FirstProgramma-tic StructuralAdjustment

Credit

2000 EconomicPolicy

Notclassified

No details given

29 AFR Tanzania Privatizationand Private

SectorDevelopment

2000 PSD C Indirectenvironmentalapproach

Did not include an upfront EA. However,as part of the overall framework, EAs willbe undertaken wherever needed as part ofthe PE divestiture preparation process.

30 AFR Togo PublicEnterprise

Restructuring/ Reform


31 AFR Uganda Privatizationand Utility

SectorReform

2001 PSD B Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Conduct ofenvironmentalaudits and detailedassessments;Development ofenvironmentalmanagement plans

The Bank is assisting the government todevelop its private sector and to improveits environmental management andregulatory systems. A study conducteddetermined which PEs neededenvironmental audits and to what extentthese audits should be. The Nat’lEnvironmental Management Authority willbe responsible for monitoring complianceamong the privatized PEs. Environmentalmanagement plans will include AIDSawareness and training.

32 AFR Zambia EconomicRecovery and

InvestmentPromotion


33 AFR Zambia FiscalSustainableAdjustment

Credit

2000 EconomicPolicy

Notclassified

No details given

34 EAP China TuoketuoPower/ Inner

Mongolia

1997 ElectricPower

A Environmentalprojectcomponents

There is a soil conservation anddesertification control component. EA wasprepared due to its greenfield nature. Keyissues addressed were air pollution, noise,water pollution, disposal site,contamination, industrial hazards andworker safety, bird flight patterns, impactsof construction. The EA examined bothimmediate impacts and cumulative impactsof the proposed project. Mitigationmeasures and resettlement plans weredrawn in accordance with Chinese laws,Bank requirements and internationalstandards.

35 EAP China EnterpriseReform Loan

1999 PSD Notclassified

"The innovation and learning pursued bythe project would not aim specifically atenvironmental objectives".




Approval

FY

Sector

group

EA

category

Special/ general


36 EAP Indonesia Second TAfor Public and

PrivateProvision ofInfrastruc-

tures

1995 PSD C Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Assessment ofpastenvironmentalliabilities andremediation needs

It could finance generic studies oninfrastructure-related environmentalissues. Appropriate provision for thepreparation of environmental andresettlement assessments and remedialplans consistent with the Bank and GOIprocedures would be incorporated interms of reference for feasibility studiesand engineering designs wheneverrelevant.

37 EAP Indonesia Solar HomeSystems

1997 ElectricPower

Notclassified

Indirectenvironmentalapproach

There are no major environmental andresettlement issues associated with SHS. Infact, SHS will have a positive impact on theenvironment by reducing use of fossil fuelsand encouraging battery recycling.Investigations made with the Directoratefor Hazardous and Toxic SubstanceManagement and the Association of WasteMetal Recycling indicate that there isrecycling of batteries in Indonesia and thatthe number of batteries required underthe SHS scheme will be less than under thepresent system of centralized batterycharging.

38 EAP Indonesia Bali UrbanInfrastruc-

tures Project

1997 UrbanDevelop-

ment

A Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Development ofenvironmentalmanagement plans

The EA, called Umbrella EA is regional/sectoral in Bank terms. It includes anEnvironmental Profile of Bali, a system ofenvironmental zoning for Bali, sub-projectscreening criteria and procedures, genericEA TOR and mitigation and monitoringprocedures for sub-projects, andrecommendations for training andinstitutional strengthening. There is also anEnvironmental Management andMonitoring Plan (EMMP), which includes afollow-on study in CumulativeEnvironmental Impacts that will beconducted during project implementationto address the broader issues of theenvironmental impact of tourism-relatedand other econ development.

39 EAP Indonesia CorporateRestructuring


40 EAP Indonesia Decentral-ized

Agriculture/Forestry

Extension

2000 Agricul-ture

C Indirectenvironmentalapproach

The project would promote informationand practices related to the environmentsuch as conservation, NRM, integratedpest management. Through PPPs,contributions could also be made toimprove awareness of environment-related issues by stakeholders and civilsociety. Farmers would receive guidanceand relevant information from researchersand extension workers who will monitorthe testing and replication of identifiedgood practices.

40




Approval

FY

Sector

group

EA

category

Special/ general


41 EAP Philippines Second SubicBay Project

1997 WaterSupply &

San.


EIA was carried out by SBMA's EcologyCenter. Most of the impacts will occurdue to construction. The impact of thewell field serving the water supplycomponent has been carefully assessed andsatisfactory mitigation measures areincluded in the component design. Projectwill also finance the planting of trees in thewatershed to prevent erosion and maintainthe local ecosystem. Prevention of over-abstraction of groundwater will take place.SBMA also developed an expandedenvironmental management plan to includean indigenous peoples development plan,community-based forest management,community development and training, andinfrastructure improvements.

42 EAP Thailand EconomicManagementImplementa-

tionAssistance

1998 EconomicPolicy

C No details given

43 ECA Albania RecoveryProgramTechnicalAssistance

1998 EconomicPolicy

C No details given

44 ECA Armenia MunicipalDevelopment

1998 WaterSupply &

San.

B Environmentalaspects integratedinto biddingdocuments andsales contracts

Limited environmental review andmitigation measures. Contractors will beresponsible under the clauses of thebidding documents for keeping work sitespollution-free.

45 ECA Azerbaijan InstitutionBuilding

TechnicalAssistance

1996 PSD C Assessment ofpastenvironmentalliabilities andremediation needs

Assistance is proposed, as part of theprogram for mass privatization, in clarifyingenvironmental liability in the process ofmedium and large enterprises privatization.

46 ECA Azerbaijan AgriculturalDevelopment

and Credit

1999 Agricul-ture


The rating is justified on the basis ofexpected positive impact through theadvisory services of improved farming andland management practices. Most loanswill be for inputs and equipment. Loanswill be provided only if farmers havereceived training or when environmentalpermits are secured. Strengthening ofgovernment implementation/ regulatorycapacity will be undertaken.

47 ECA Bulgaria Environmen-tal Remedia-

tion PilotProject

1998 Environ-ment

A Conduct ofenvironmentalaudits and detailedassessments;Assessment ofpastenvironmentalliabilities andremediationneeds;Development ofenvironmentalmanagement plans

Detailed EIA - reviewed and publiclydiscussed according to Bulgarian and WBrequirements; public consultation andfeedback; international expert hired toprovide independent evaluation of the EIAand the environmental, technical, andfinancial aspects of the environmentaldamage mitigation plan proposed by theEIA; environmental management plan forMDK Copper Smelter.




Approval

FY

Sector

group

EA

category

Special/ general


48 ECA Bulgaria Environment/Privatization

SupportStructural

AdjustmentLoan

2000 Environ-ment

FI Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country,Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments;Assessment ofpastenvironmentalliabilities andremediationneeds;Development ofenvironmentalmanagement plans

The loan will support the comprehensivereform of Bulgaria's environmental policies,the establishment of a satisfactoryframework for incorporatingenvironmental issues into the privatization,and measures to accelerate theimplementation of EU Directive onIntegrated Pollution Prevention andControl; Framework for integratingenvironmental liabilities into privatization:EIA (environmental management and auditscheme), risk assessment methodology,remediation plans, execution agreements;Framework for improving ongoingenvironmental performance: integratedpollution prevention and control,environmental compliance plans

49 ECA Croatia TechnicalAssistance forInstitutionalRegulatoryReform for

PrivateSector

Development


50 ECA Georgia StructuralReformSupport

1999 EconomicPolicy

B Assessment ofpastenvironmentalliabilities andremediation needs

The only component expected to haveenvironmental concerns is the HospitalRestructuring Component due to wastemanagement, pollution control onincinerator, asbestos, and medical wastesin the facilities to be privatized. Amitigation plan was drawn up whichincludes ensuring that incinerators aredesigned according to Western standardsand are suitably located, and that all buyersof privatized facilities are aware of theasbestos in buildings and the alternativesavailable for future rehabilitation, andconducting an inventory of existing medicalwaste in the facilities to be privatized andpreparing a removal action plan approvedby IDA.

51 ECA KyrgyzRepublic

AgriculturalSupportServices

1998 Agricul-ture

C Development ofenvironmentalmanagement plans

The proposed advisory services andresearch programs are specifically directedtowards better management of naturalresources. There is also a soilmanagement and conservation program,integrated pest management advisoryservice and farmer training.

42




Approval

FY

Sector

group

EA

category

Special/ general


52 ECA Moldova First PrivateSector

Development

1996 PSD Notclassified

Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country

A manual on environmental reviewprocedures for individual subproject willbe prepared by the government andreviewed by the Bank. The manual willprovide the guidelines to classify, from anenvironmental point of view, each sub-project to be financed by the credit line,allowing the development of a processunder which local environmental laws andregulations will be applied by appropriateinstitutions.

53 ECA Romania PublicInstitutionBuilding

1999 PSD C No EA

54 ECA RussianFederation

Second CoalSector

AdjustmentLoan

1998 Mining B Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments

Sectoral Environment Assessmentconducted in the context of the Bank'soverall sector work in the Russian coalindustry (focus: mine closures); lacks inspecific environmental measures forprivatization of existing mines; EAconducted for SECAL II but mainlyelaborates on environmental issues re:mine closure; parallel TA loan was madeavailable to authorities; government wasrequired to undertake a review of the legaland regulatory framework and institutionalcapacity affecting the industry in transitionto private ownership, includingenvironmental aspects.

55 ECA Turkey Cesme WaterSupply andSewerage

1998 WaterSupply &

San.


An environmental review/ partial EA wascarried out consistent with the provisionsof the WB's OD4.01 EA and the applicableenvironmental procedures of the TurkishGovernment. No significant environmentaleffects due to the discharge of wastewaterfrom the sea outfall are anticipated. Aprogram to monitor the quality of theseawater outfall was put in place.Contractors and private operators weremade responsible for mitigating potentialenvironmental impacts during constructionand operation.

56 ECA Uzbekistan EnterpriseInstitutionBuilding

1998 PSD C Indirectenvironmentalapproach

Investment banks will be required toinclude, as part of their advisory work,environmental assessments whererequired.

57 LAC Argentina RenewableEnergy Rural

Markets

1999 ElectricPower


Environmental concerns will be dealt withspecific conditions contained in theconcession contracts: recycling and properdisposal used in SHS and WHS,environmental siting criteria, proceduresfor storage, handling, disposal of dieselfuel. Community information programswill be carried out and concessionaires willbe required to do training.




Approval

FY

Sector

group

EA

category

Special/ general


58 LAC Brazil RailwaysRestructuring

1996 Transpor-tation

B Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments;Development ofenvironmentalmanagement plans

An Environmental Management Comp isincluded in the project. This includesenvironmental audits of railway facilitiesand strengthening of RFFSA'senvironmental management and safetyunit. MT has adopted specificEnvironmental Guidelines for the transportsector. Railway oper ators will be required,under the concession contracts, to complywith environmental regulations for all theiroperations and investments. RFFSA wouldcarry out appropriate supervision of thecontracts, including environment-relatedclauses. RFFSA would strengthen itsenvironmental management and safety unitand training.

59 LAC Brazil Mato GrossoState

Privatization

1997 PSD B Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Conduct ofenvironmentalaudits and detailedassessments

Environmental audits for the enterprises tobe privatized will be undertaken. This willprovide the basis for establishingenvironmental safeguards under which theprivatized firms will operate. The newregulatory agency to be established underthe program will be responsible forensuring compliance with environmentalobligations established in the concessioncontract. The Bank will follow up on theimplementation.

60 LAC Brazil BahiaMunicipal

Development

1997 UrbanDevelop-

ment

B Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Conduct ofenvironmentalaudits and detailedassessments;Development ofenvironmentalmanagement plans

The TA component of the project mayfinance, among other things, the drafting ofmunicipal environmental legislation andstrengthening of municipal environmentalcouncils. Specific guidelines for evaluationof municipal project with environmentalimpacts have been established by the Stateenvironmental agency. The new rulesestablish guidelines for environmentalscreening by project size and expectedimpact. An Operational Manual wouldstipulate that EA would be conducted asneeded, consistent with Brazilian law andBank guidelines, prior to signature of sub-loan contracts.

61 LAC Colombia Toll RoadConcession


A Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments;Assessment ofpastenvironmentalliabilities andremediationneeds;Development ofenvironmentalmanagement plans

The EIA study includes a detailedEnvironment Management Plan with a planfor resettlement and a program for SocialAssistance. Mitigation and compensatorymeasures for possible direct and indirectimpacts were identified. INVIAS' sub-directorate of the Environment prepared afull EA and conducted public consultations.All of the environmental responsibilitiesassigned to the concessionaire in the EIAstudy were clearly identified andincorporated. Environmental guidelinesfor road construction were alsodeveloped.

44




Approval

FY

Sector

group

EA

category

Special/ general


62 LAC DominicanRepublic

WastewaterDisposal inTourismCenters

2000 WaterSupply &

San.

A Development ofenvironmentalmanagement plans

A full EA was commissioned. The EAprocess was based on an analysis ofalternatives for wastewater treatment anddisposal and assessment of current anddispersion parameters in the disposal site.The EA report recommends theimplementation of an EMP, whichproposes a number of measures tomitigate environmental impacts during theconstruction and implementation phases.The mitigation of the environmentalimpacts are largely related to ensuring thatthe project design and construction isadequately implemented; personnel isadequately trained and the operation ofthe facility complies with the projectrequirements over the life of the project.

63 LAC El Salvador Competitive-ness

EnhancementProject

1996 EconomicPolicy

C Not mentioned in document

64 LAC Guatemala PrivateParticipationin Infrastruc-

turesTechnicalAssistance

1997 PSD B Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments

Given the need to provide bothenvironmental audits of facilities to beconcessioned and privatized, and toestablish clear guidelines and regulationsrelating to environmental impacts, theproject will fund environmentalassessments for the ports and powersectors, to be undertaken prior to theconcessioning and privatization of thesefacilities. The highway concessioningprogram will fund EIAs for schemes to beconsidered for concessioning, and inaddition, any environmental mitigationmeasures will be included as obligations inthe concession agreement granted to thedeveloper.

65 LAC Guyana Financial andPrivateSector

2000 PSD B Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments;Assessment ofpastenvironmentalliabilities andremediation needs

For the privatization of some of the naturalresource intensive industries as well asother industries with potentialenvironmental impacts, EA's will be carriedout under the project. This will includeconducting environmental audits andidentifying environmental liabilities. Theprivatization legal agreements between thegovernment and the investors will includeboth accountability clauses for maintainingenvironmental safeguards in place, as wellas clauses accepting any cost ofenvironmental clean-up to be incorporatedinto the pricing agreement for the sale. Inaddition, the Guyana EPA will also beinvolved in vetting and providingenvironmental permits for newly privatizedentities.




Approval

FY

Sector

group

EA

category

Special/ general


66 LAC Mexico CommunityForestry

1997 Agricul-ture


The project contains multipleenvironmental safeguards, intended toensure that promoted-promoted forestmanagement activities would not causesignificant damage to biodiversity, soils orwater quality. As detailed in theenvironmental analysis, these safeguardsinclude the promotion of forestconservation plans, environmental trainingand tech asst to communities and privateservice providers, a biodiversity advisor,environmental institutional strengthening,forestry research and environmentalproject monitoring.

67 LAC Panama UtilitiesRestructuring

TechnicalAssistance

1998 PSD B Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Environmentalaspects integratedinto biddingdocuments andsales contracts;Conduct ofenvironmentalaudits and detailedassessments

During project preparation, TORs havebeen prepared for environmental audits ofinstallations to be privatized. A high-levelinter-agency coordinating group has beenformed to oversee the preparation ofenvironmental audits, review and revise asnecessary environmental standards andprocedures for oversight of compliance.Studies underpinning the issuance ofservice, quality, and environmentalstandards, audits and initial support forinstitutional strengthening will be carriedout. Sector legislation recognizes theenvironmental costs of service provisionand the recovery of such costs thru tariffs,and incorporates environmental concernsin sector policy, planning, regulation andcontractual arrangements with the publicand private sector.

68 LAC Paraguay AsuncionSewerage

1995 WaterSupply &

San.

A Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Development ofenvironmentalmanagement plans

The major environmental concern is thedischarge of sewage into the ParaguayRiver. As a result of the EA, severalactions have been identified as necessaryto mitigate the environmental impact ofthe project. Specific mitigation measureswere to be followed during project design,project construction, and during operationof the installed system. CORPOSANA wasalso required to present a study onindustrial wastes including identification ofindustrial toxic wastes and design ofindustrial effluent standards as well asupdating and implementation of industrialpollution control and licensing programs.An action plan and timetable were alsorequired.

69 LAC Peru LIMAWATER

Rehabilitation&

ManagementProject

1995 WaterSupply &

San.

B Conduct ofenvironmentalaudits and detailedassessments

A detailed EA and a comprehensivewastewater management project wereprepared. Impacts will be mitigated bycareful scheduling of construction.

46




Approval

FY

Sector

group

EA

category

Special/ general


70 LAC Trinidadand Tobago

Postal ServiceReform


71 LAC Uruguay SecondTransport



The assessment of existing environmentallegislation in Uruguay concluded that thelegislation provides an appropriateframework to implement environmentalmitigation measures. The legislationrequires that prior to executing any majorcivil work, consultants must conductdetailed EIAs before the Nat’lenvironmental agency can issue thenecessary environmental licenses. Theagency also adopted an EnvironmentalManual that sets guidelines andspecifications to be followed duringexecution of works to avoid or mitigateany potential adverse environmentalimpact. An Environmental ManagementUnit was also established.

72 LAC Uruguay AdaptableProgramLoan –

Moderniza-tion and

Rehabilitation

2000 WaterSupply &

San.


An EA for the entire program was carriedout. The EA screened all subprojects forpotentially adverse impacts; analyzed theinstitutional and regulatory framework forthe environment and water quality asrelated to the sanitation sector; analyzedOSE's capacity for environmentalmanagement of water and sanitationprojects; and carried out project specificEAs for the first phase construction works.

73 MNA Algeria FourthHighwaysProject


Notclassified

Development ofenvironmentalmanagement plans

A special environment handbook wasdeveloped on road pavementstrengthening works. A special TA includesenvironment advice services. AnEnvironment Mitigation and MonitoringPlan was also developed.

74 MNA Algeria DZ-PrivatizationAssistance

(LIL)

2000 PSD C Environmentalaspects integratedinto biddingdocuments andsales contracts;Assessment ofpastenvironmentalliabilities andremediation needs

EA not required. Core environmentallegislation is in place in Algeria. Prior to abid launch, potential liabilities will beidentified thru a due diligence process tofully alert prospective buyers ofenvironmental liabilities before they submittenders. Terms of reference for theinvestment backs hired under the projectwill specify that they assist the Conseil dePrivatisation in taking environmentalaspects duly into account in thepreparation and negotiations of thetransactions. There will be a cleardelineation of responsibilities for assumingpast environmental liabilities and acommitment by the private investor tocomply with all current environmentalregulations with a view to approachinginternational standards over the mediumterm.




Approval

FY

Sector

group

EA

category

Special/ general


75 MNA Jordan AmmanWater andSanitation

1999 WaterSupply &

San.


A sewerage engineer with experience inthe regulation of industrial wastewater,wastewater treatment and reclaimedwater reuse will be hired. Contractdocuments for construction of works willinclude agreed provisions for mitigation ofshort-term impacts due to dust, noise andtraffic disruption. The Government hasprepared an Environmental Analysis andManagement Plan for the proposedproject. This plan meets the requirementsof the Bank's OD 4.01 for EA.

76 MNA Lebanon Power SectorRestructuring

1997 ElectricPower


Comprehensive EIA and related reportwere prepared. Mitigation plan proposedaddressed issues during the constructionand operational phases

77 MNA Yemen,Republic of

Seeds andAgricultural

Services

1998 Agricul-ture

C No negative effects on the environmentare anticipated. Positive impacts are likelyto occur. No details given a s to approachtaken.


Sana'a WaterSupply andSanitation

Project

1999 WaterSupply &

San.

B Conduct ofenvironmentalaudits and detailedassessments

Mitigation plans were formulated for towenvironmental considerations: disposal ofwastewater and solids during constructionand the disposal of dried wastewatersludge from the new treatment plant. Forthe former, the mitigation measuresinclude dumping cesspit waste only atoffpeak hours and monitoring ofoperations. The second issue will bemitigated by selling dried sludge to farmersor safe disposal in an appropriate landfill. Acomplete EIA was also prepared.


PrivatizationSupportProject

2000 PSD C Conduct ofenvironmentalaudits and detailedassessments

Requirements for environmental audits willbe incorporated into the transactionssupport provided by the project.Environmental liabilities will also beclarified in the context of the privatizationstrategy for each large transaction.Particular attention will be pd duringimplementation to ensure that audits ofadequate quality are carried out for thosetransactions in which the Governmentaccepts significant environmental liabilities.

80 SAR Bangladesh FourthFisheries

2000 Agricul-ture


Overall, the potential adverseenvironmental impacts that could resultfrom implementation of the projectcomponents have been identified andminimized in the project design; projectwould include the GEF-assisted AquaticResources Development, Management andConservation Studies component -- thiscomponent includes monitoring activitiesas well as institutional strengthening; partialEA

48




Approval

FY

Sector

group

EA

category

Special/ general


81 SAR India Orissa PowerSector

1996 ElectricPower


Project management consultants will helpappraise investments including thepreparation and execution ofenvironmental mitigation; project complieswith Indian environmental law and WBenvironmental standards. EA addressespotential negative impacts related toconstruction, use of PCBs, forest clearing,erosion, noise, etc.

82 SAR India UttarPradeshForestry

1998 Agricul-ture


Environmental review was undertakenduring project appraisal; environmentalconsiderations would be mainstreamed inalmost every component of the projectand integrated in planning, design,implementing and monitoring activitiesboth at the local and regional scales.Environmental criteria would be includedin the selection of priority sites for UPFDforest management and joint forestmanagement, and environmental analysisand forest ecology training courses wouldbe provided. Strategic EnvironmentalStudy would be conducted. Project isconsistent with the National Forest Policy,the State Forestry Action Plan and the WBOperational Policy and OperationalDirective for forestry activities and EA.

83 SAR India Coal SectorRehabilitation

1998 Mining Notmen-tioned

Assessment of thelegislativeframework andenvironmentalregulatorycapacity of theclient country;Assessment ofpastenvironmentalliabilities andremediationneeds;Development ofenvironmentalmanagement plans

IDA-financed Coal Sector Environmentaland Social Mitigation Project is beingimplemented to assist Coal India inaddressing environmental and social issuesin the area (worth $63 M). The ESMP isassisting Coal India to strengthen itscapacity in resettlement, remediation,rehabilitation, environmental management,community development.

84 SAR India TechnicalAssistance for

EconomicReformProject

2000 EconomicPolicy

C Conduct ofenvironmentalaudits and detailedassessments

Each subproject will be structured toensure that any issues that requireattention under the Bank's operationalguidelines will be addressed. Thesubproject of the government of UttarPradesh includes funds for undertakingenvironmental audits of public enterprisesthat will be closed and/or divested as partof the government's reform program.




Approval

FY

Sector

group

EA

category

Special/ general


85 SAR India UttarPradesh

Power SectorRestructuring

Project

2000 ElectricPower


Programmatic approach: EA was prepared.Under the EA, an overall EnvironmentalPolicy was drawn to govern all theremaining investments of the project. Thepolicy highlights the guiding principles forplanning of schemes to ensure reliability,security, economy and a cleaner, saferenvironment. Key principles: avoidance ofright of way; minimizing impacts ofconstruction; ensuring environmentalsafeguards such as adoption of advancedtechnologies, expertise and managementtechniques. UPPCL's environmental policyis included in the document"Environmental Framework and Safeguardsfor Transmission Projects" (includes EMP)

86 SAR India SecondRenewable

Energy

2000 ElectricPower


The project directly supportsenvironmentally friendly technologies andinitiatives. Small hydro developmentreduces reliance on polluting fossil fuelsand voids the environment issuesassociated with large hydros. Onlyschemes meeting governmentenvironmental standards and the Bank'sOD 4.01 will be financed. Technical staffwill review environmental issues and adviseborrowers on the preparation of EIAs. Aset of environmental review guidelinesacceptable to the Bank, will be issued.

87 SAR Pakistan Power SectorDevelopment

Project

1994 ElectricPower


WAPDA established an in-houseEnvironmental and ResettlementManagement Unit to review and formulatethe company's environmental andresettlement policies; incorporateenvironmental and safety procedures intothe company's planning, construction andoperations; develop environmentalregulations, procedures and training; andmonitor compliance with establishedrequirements and standards. Theenvironmental component of the proposedproject would assist in the SectoralEnvironmental Assessment of all its existingfacilities.

88 SAR Sri Lanka PrivateSector

Infrastruc-tures

Development

1996 PSD A Development ofenvironmentalmanagement plans

The full EA’s summary sets out theframework for environmental clearance inSri Lanka and the policies and proceduresthat would be followed for subprojects tobe financed under the credit. Allsubprojects, both solicited and unsolicited,are legally required to have an EA underthe amended National Environment Act of1993. Detailed resettlement plans, ifnecessary, will be part of the EA. Thereare also category B subproject whichrequire environmental analyses.

51

Notes

1. The sectors or themes were agriculture,economic policy, education, electric power,environment, finance, health, mining, PSD,public sector management, social protec-tion, telecommunications, transportation,urban development, and water supply andsanitation.

2. The dates given with project names arefiscalyear of approval.

3. SILs support the creation, rehabilitation, andmaintenance of economic, social, andinstitutional infrastructure. They mayfinance consultant services and manage-ment and training programs. Adjustmentloans/credits provide quick-disbursing

assistance to countries with externalfinancing needs to support structuralreforms in a sector or in the economy as awhole.

4. In March 1999 environmental assessmentbecame a requirement for adjustmentlending under Operational Policy.

5. The shares indicated under each environ-mental approach do not add up to 100percent because some projects use morethan one environmental approach. Percent-ages were therefore derived by dividing thenumber of projects that use a certainapproach by the total number of projects inthe sample.