The proposed project consists of the construction of a new 330 kV Overhead transmission line (OHL) interconnection between Usatove and Ajalyk substations located in central districts of Odessa region neighbouring with Odessa city. The main purpose of the project is to reduce losses, increase quality, efficiency and reliability of electricity transmission in the region.
The proposed project is the first of a number of projects that the Bank is considering financing with Ukrenergo, as per a Protocol of Cooperation signed with Ukrainian Government. Such an agreement reflects the overall reform programme and investment targets that the two parties want to implement.
The project will support improvement of electricity transmission reliability, network loss reduction, and security of supply in the Odessa region. Collaterally, the project will free up much needed transmission line capacity needed for trade between neighbouring Moldova and Ukraine, particularly in the peak winter demand period.
While implementing the project the Bank will also require cooperation with a study to recommend on improvements of Ukrenergo’s corporate governance, transmission tariff methodology and steps for the Ukrainian energy system to become part of the EU’s internal energy market, starting with integration into UCTE (Union for the Coordination of Transmission of Electricity.
Ukrenergo, the company responsible for high voltage transmission and dispatch of electricity in Ukraine.
Up to EUR 25.8 million sovereign-guaranteed loan.
Up to 25.8 million, plus local costs payable by Ukrenergo to be determined.
Environmental classification and rationale
The project is screened A/0, requiring an Environmental Impact Assessment (EIA) of the new transmission line. The operation and construction of such high voltage power transmission lines have specific but localized environmental, health and safety impacts which, however, can be readily identified and prevented through adequate design and application of good international practice during construction.
The initial Ukrainian EIA prepared by a local design institute in accordance with national requirements was reviewed by the Bank and independent international consultants and was subsequently amended to comply with Bank requirements. The EIA confirmed the adequacy of the route selection and did not identify major environmental issues. The routing of the line is not affecting protected areas and the transmission corridor is at a sufficient distance to avoid negative impacts on the local population. The EIA includes recommendations to alleviate any impact during construction and operation.
Key environmental issues and mitigation
This public sector project involves construction of a new 124 km power transmission line connecting the Usatove and Ajalyk substations in the Odessa region. The project will also include the expansion of these two substations. The line will be constructed along a new route and as part of the assessment a number of alternative routes were considered.
The environmental impacts associated with air emissions, physical alteration and the impact on sensitive natural habitats, archaeological sites, and agricultural and commercial areas are expected to be limited. Some impact may arise during construction and agreement will be sought with local landowners. Appropriate health and safety management is planned to ensure that occupational health and safety requirements during construction are fully addressed.
Some of the key environmental issues are summarised below:
- Environmental impacts of transmission line projects are well known and generally very localized.; impacts arising from construction activities (access roads; erection of transmission towers)can be mitigated by applying sound engineering design and good construction management;
- The entire length of the line route passes through mainly rural areas and avoids sensitive areas; no resettlement is required;
- The line will traverse agricultural land. Although it has been designed to limit its impacts on farming practices, appropriate agreements and compensation will be paid to land owners.;
- The impacts on the physical and biological environment are mainly limited to the construction stage; those impacts are limited in time and extent and are therefore considered to be moderate on condition that suitable working practices and adequate mitigation measures are applied;
- No protected areas have been identified within the transmission line right-of-way (such as nature reserves, archaeological and cultural sites);
- Close to the immediate line, there will be some increase in electromagnetic radiation. However, these areas are uninhabited and by ensuring health protection zones or limited access areas, any such impacts are considered to be moderate;
An environmental monitoring programme has been prepared as part of the EIA and will be implemented as part of the project implementation plan.
The objective of this project is to increase the reliability of power supply to consumers in the Odessa region and to decrease dependency on unstable power supply from Moldova. The modernization of the substations as well as increased reliability of the power line will increase efficiency will thus have indirect environmental benefits.
Summary of Environmental Action Plan
The company will be required to adhere to Ukrainian and EU environmental, health and safety regulations and standards. All relevant permits will need to be obtained during the construction period and prior to commissioning the line. As all environmental protection measures have been incorporated in the project structure, there is no need for a stand alone Environmental Action Plan.
Disclosure of information and consultation
In the context of the EBRD’s participation in the project, the Company will release locally a summary of relevant environmental issues associated with the project and summarise mitigation measures, action plans and other initiatives agreed.
The EIA process had already included the first public scoping meeting held on 21 and 22 April 2005 in four project districts of Odessa region (Kominternivskiy, Ivanivka, Biliavka, Rozdilna districts). The draft final international EIA documents were made publicly available as required under the Bank’s policies, in both the national language and in English. The public hearing is planned for September 2005.
Previous extensive interactions with the public and NGOs on the project have not revealed any sensitive environmental issues.
Additional information is available on the Ukrenego web site www.ukrenergo.energy.gov.ua
Monitoring and reporting
The Company will monitor the environmental impact of its operations in accordance with national law and regulations. The Bank will evaluate the project's compliance with the applicable environmental and social requirements during the lifetime of the project by reviewing annual environmental reports prepared for the project and may, if required, carry out monitoring visits.
There is an Environmental and Social Impact Assessment available for this project.
EUR 115,000 non-reimbursable TC for technical and environmental due diligence provided by German Government.
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