Power Grid Enhancement Project

Location:

Georgia

Project number:

51422

Business sector:

Energy

Notice type:

Public

Target board date:

11 Dec 2019

Status:

Concept Reviewed

PSD disclosed:

07 Oct 2019

Project Description

Provision of a loan of up to EUR 80 million to Georgia to support Georgian State Electrosystem (GSE) to implement reinforcement and enhancement of the electricity transmission grid in Georgia, contributing to a stable, reliable, cost-effective and efficient national transmission grid as a critical component of the efficient market infrastructure and electricity trading.

Project Objectives

The Project aims to support Georgian State Electrosystem to implement the national power grid reinforcement and enhancement investment project consisting of 4 main components: (1) construction of the 500kV overhead line (OHL) Tskaltubo-Akhaltisikhe-Tortum; (2) construction of the North Ring; (3) reinforcement of the transmission infrastructure in Guria region; and (4) reinforcement of the transmission infrastructure in Kakheti region. The proceeds of the Bank's loan are expected to finance the North Ring component, including construction of (1) 57km 220kV double-circuit overhead line (OHL) Nenskra-Mestia; (2) Extension of the 500kV switchyard in Jvari substation; (3) 500/220/110kV substation Nenskra; (4) 2km 500kV OHL Kavkasioni tie to substation Nenskra; (5) 50km 500kV single circuit OHL Lajanuri-Tskaltubo; (6) 60km 220kV double-circuit overhead line (OHL) Tskaltubo-Namakhvani-Tvishi-Lajanuri; and 7) extension of 220kV substation Tskaltubo.

Transition Impact

The Project is in line with the Green Economy Transition (GET) initiative of the Bank as it will enhance the integration of renewable sources, especially hydro and wind, into the system. The project will also contribute to the resilience of the Georgian power sector by improving security of supply.

Client Information

GEORGIA SOVEREIGN

The Borrower is Georgia. The loan proceeds will be on-lent to GSE, a state-owned transmission network owner and operator.

EBRD Finance Summary

EUR 80,000,000.00

The overall project is expected to be financed by up to EUR 80 million loan from the Bank.

Total Project Cost

EUR 210,000,000.00

Preliminary cost estimate of EUR 210 million was defined under the 10 Year Network Development Plan developed by GSE in its capacity as the Georgian Transmission System Operator (TSO) and approved by the Government of Georgia. KfW and German Federal Ministry of Economic Cooperation and Development already provided EUR 120 million for the project. EU NIP provided EUR 10 million grant from the project.

Environmental and Social Summary

The project is categorised A under EBRD's Environmental and Social Policy (2014)  as it has the potential  to have significant environmental and social (E&S)  impacts associated with the construction and operation of high voltage overhead electrical power lines.

The Environmental and Social Due Diligence (ESDD) included a review of the Environmental and Social Impact Assessment (ESIA) which has been undertaken for the Project, covering the entire project including the North Ring component expected to be financed by the Bank.  The ESIA was developed by international and national consultants in accordance with the EBRD Performance Requirements (PRs).

Stakeholder consultations were undertaken as part of ESIA Scoping and the ESIA disclosure package including the ESIA, Land Acquisition, Resettlement and Compensation Framework (LARCF), Stakeholder Engagement Plan (SEP), Non-Technical Summary (NTS), Environmental and Social Management Plan (ESMP) were disclosed on the 9th August 2019 on the GSE and EBRD websites.  Hard copies of the disclosure package were made available in municipal centres crossed by the routes and the NTS distributed to each community.  A programme of public meetings is ongoing  during September and October 2019, as outlined in the SEP, to seek feedback on the disclosure package.

The Project has taken an iterative approach to selecting and optimising the proposed routes of the transmission lines, considering a number of alternatives in accordance with a defined set of routing principles with the aim of avoiding Environmental and Social (E&S) sensitivities including protected areas, settlements and high value biodiversity features whenever possible through the route selection. The ESIA has assessed potential E&S impacts on a corridor centred on the transmission line routes which is anticipated to accommodate Project refinements during the detailed design process and the majority of any temporary facilities for which the exact locations are yet to be defined e.g. construction equipment storage areas.

Specifically related to the North Ring Components (described as C1 Nenskra to Mestia and C2 Lajanuri to Tskaltubo within the ESIA) through the routing it has not been possible to fully avoid physical displacement due to the need to connect to existing infrastructure or other constraints.  7 households are anticipated to be subject to physical displacement due to the land use restrictions in the Right of Way established around the operating transmission lines to ensure the effective and safe functioning of the system.  33ha of Permanent land acquisition is required and an area of 1500ha will be affected by land use restrictions in the right of way, where normal agricultural activities will however be permitted to continue.  A LARCF has been developed to establish the framework for managing resettlement and detailed Resettlement Action Plans will be prepared and implemented for each component. Overhead transmission lines have also been designed so that the Electric and Magnetic Fields (EMF) will meet guideline values based on good international practice.

Component C1 passes through the Svaneti Important Bird Area and some priority biodiversity features have been identified on both components.  Habitat loss will occur due to the clearance of vegetation from the Right of Way; construction activities are likely to cause disturbance to fauna and there is the potential for impacts on certain bird species e.g. raptors due to the risk of collision with the Project towers or lines.  In addition to the impact mitigation inherent to the route selection, further mitigations include the use of biodiversity specialists to supervise works; seasonal constraints on certain construction activities;  the implementation of vegetation clearance and reinstatement plans; and a reforestation management plan, to achieve no net loss of priority biodiversity features.   Impacts on birds will be mitigated via installation of bird deflectors on towers and transmission lines in areas identified of high collision risk and a post-construction monitoring programme and adaptive management will be implemented.

The construction workforce is expected to be around 175 personnel, working progressively along the lines and accommodated in accommodation in regional centres or towns or in accommodation camps in more remote areas. Contractors will be required to implement applicable PR2 requirements and a labour audit will be undertaken during construction.
The Project GHG emissions are being assessed.

An ESMP has been developed which will form the basis of the Project Environmental and Social Management System and includes the responsibilities for E&S management for both GSE, the construction contractors and the mitigation measures required during construction and operation.  Construction contractors will be required to developed corresponding implementation plans including Pollution Prevention, Traffic Management and Health and Safety.  The ESMP also establishes a defined process for managing any Project changes e.g. during the detailed design, which will be mitigated through application of the defined management plans and any additional measures if appropriate.

An Environmental and Social Action Plan (ESAP), which among others includes the mitigation measures described above, has been developed to ensure the Project is structured in accordance with the PRs. The ESAP has been disclosed with the ESIA package. The Bank will undertake regular monitoring of the project to assess E&S performance during construction in accordance with the PRs and the implementation of the ESAP.  Monitoring will continue as necessary during the operation period.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation

ESIA of the project was funded by EBRD Shareholder Special Fund (SSF).

Company Contact Information

Ekaterine Verulashvili
info@gse.com.ge
+(99532) 2 510 202
+(99532) 2 98 37 04
http://www.gse.com.ge
2, Baratashvili Street, Tbilisi, Georgia, 0105

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