Download DOC - World bank documents

PROJECT INFORMATION DOCUMENT (PID)
CONCEPT STAGE
Project Name
Region
Sector
Project ID
Global Supplemental ID
GEF Focal Area
Borrower(s)
Implementing Agency
Environment Category
Safeguard Classification
Date PID Prepared
Estimated Date of
Appraisal Authorization
Estimated Date of Board
Approval
Report No.: AB1321
POST CHERNOBYL RECOVERY PROJECT
EUROPE AND CENTRAL ASIA
Forestry (50%);District heating and energy efficiency services
(50%);
P078303
P087667
B-Biodiversity
GOVERMENT OF BELARUS
[ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined)
[ ] S1 [X] S2 [ ] S3 [ ] SF [ ] TBD (to be determined)
February 2, 2005
November 22, 2005
March 21, 2006
1. Key development issues and rationale for Bank involvement
Impact of Chernobyl accident on Belarus. The Chernobyl accident has key significance in
Belarus, with environmental as well as economic, human and fiscal consequences. After the
explosion at the Chernobyl nuclear power plant in 1986, about 20 percent of the radioactive fallout landed on Belarusian soil, contaminating, although to different degree, almost 23 percent of
its territory that was occupied by 20% of its population and affecting approximately 3,600
settlements. Radioactive contamination of the environment led to elevated radionuclide levels in
local agricultural and forest products and to radiation exposure of general public. About 2,560
km2 of agricultural land was removed from use and another 1,720 km2 of forests were affected.
The most contaminated area, about 1,700 km2, in the Bragin, Khoiniki and Narovlya districts of
the Gomel oblast, was declared an exclusion zone from which all persons were evacuated and all
land taken out of economic activity. Another 4,500 km2 were declared a resettlement zone whose
inhabitants were allowed to resettle in territories which were considered less contaminated by
radionuclides. This resulted in the resettlement of 137,000 people out of a population of 2.5
million then living in the contaminated territories. Still, as of January 1, 2001, 1.6 million people
in Belarus live in areas where levels of radioactive contamination are well above natural preaccident background levels. In this situation, it becomes increasingly important to help local
people to reduce their exposure to radionuclides, revitalize their economy and incomes, and
improve their living conditions, while remaining in harmony with natural environment which is
recovering both from pre- and post accident anthropogenic impacts.
Legacy. The legacy of the Chernobyl accident continues to have an effect on the country in the
following ways:
a)
an undeserved overall stigma on the country, and especially the southern countryside;
b)
stagnation in development in the affected regions;
c)
d)
e)
f)
continued, albeit at lower levels, radioactive contamination in foods and forestry
products;
human health problems, mainly stemming from initial exposure;
continued social and economic hardship of the displaced people;
a dramatic increase in wildlife in the exclusion zone and adjoining areas, causing
problems such as attacks of rabid wolves on people and cattle, and destruction of crops
by boars.
Government strategy. A Program to Overcome the Consequences of the Chernobyl Nuclear
Power Plant Accident for 2001-2005 and up to 2010 was approved by the Government in 2001.
It includes minimizing the collective radiation dose of the population, production of clean
agricultural products, protective and rehabilitative activities, and establishment of radiation
monitoring systems. Recently the Government has increased its attention to issues related to
increasing incomes and well being of local people through sustainable economic development,
and the development and application of relevant knowledge on safe products and healthy
behavior. In the Country Assistance Strategy and other dialogue with the Bank, the Government
has indicated that support for Post Chernobyl Recovery is among its highest priorities and it was
on this basis that the current CAS included this project even in the low-case lending scenario.
The Government has welcomed two recent World Bank studies: The Belarus Chernobyl Review
and the Review of Environment and Natural Resource Management, and has acted on several of
the recommendations of these studies.
Status of Project Concept. The review of the 2002-2004 CAS led to a decision for the World
Bank and the Government to restart preparation work on the Post Chernobyl Recovery Project,
based on the findings of the Bank’s Chernobyl Review Study. The Government indicated that it
wished to focus the proposed project on government investments in the project area in the areas
of agriculture, forestry, energy, water supply, sanitation, and other infrastructure. These sectors
are part of an existing large, multi-faceted government program for the districts that have been
most affected by the Chernobyl accident. The government currently lacks the financing to fully
fund these activities, although even a Bank project will not be able to fully fill the funding gap.
In early December, 2004, the Government appointed an Inter-ministerial Working Group for the
Preparation of the Post Chernobyl Recovery Project. It was agreed that the project should focus
on post-Chernobyl recovery, that it should have the strong ownership and commitment of the
Government, that it should have a design that facilitates rapid preparation, and that it should be
economically viable. The Bank made an initial investigation of project support for agriculture,
forestry, optimizing the provision of heat, water, and sanitation. From this review, it was
decided that the project scope should be limited to two main components, forest enterprise and
optimizing the provision of heat. The current CAS envisages a lending operation of US$ 45
million of IBRD loan funds, but the size of the loan will be partly determined by the need to keep
the project results-oriented in ways which are consistent with a prioritization arising from
technical, economic, environmental, institutional and other analyses.

Forest Enterprise. The project area has extensive forests which can be safely utilized for
wood products (i.e., in areas with less than 15 curie of Cs-137 per sq. km.). These forests
represent a significant asset that can provide the basis for increased employment and
economic growth. In some of the affected districts, current timber and thinning operations
are below the annual growth increments due to a shortage of financing. Investments that
enable government forestry enterprises to increase harvesting (consistent with good
silvacultural practice) and associated processing into lumber would not only provide a direct
source of local employment and income but would also improve the value of the standing
timber and improve forest condition (i.e., reduced fire risk, improved wildlife habitat). Use
of modern highly automated technologies will additionally enable reduction of worker
exposure. Forest management and initial processing is operated by state-run entities called
leskhozes, which are unlikely to be privatized in the current policy context. On the other
hand, the government has already initiated steps to arrange for independent certification of all
its forests throughout the country by the end of 2006, which will help provide continued
access of Belarusian wood to EU markets and help ensure that the leskhozes will be subject
to sustainable, transparent, and otherwise sound management. The Forest Ministry already
has subdivided the various functions of each leskhoz into separate operations of game
management, logging, and wood processing, and steps toward further financial and
management autonomy may be feasible. Furthermore, leskhozes have prepared business
plans to compete for limited amounts of domestically financed preferential credit. This
experience may help shape the design of arrangements to allocate project financing to
leskhozes competitively in ways that would help ensure effective business management. In
addition to support through leskhozes, the project may be able to stimulate labor intensive
wood processing enterprises such as furniture within the private sector (perhaps with
technical assistance support under the project itself and links to EBRD-supported microfinancing, or small enterprise financing from EBRD or the IFC).

Optimizing Provision of Heat. The Government requested assistance in connecting
individual houses to the existing gas pipelines as a measure to avoid the burning of
contaminated wood in individual house stoves. The request includes connection of a total of
about 12,000 residential houses and the extension of around 335 kilometers of the tertiary
pipeline. The government also requested the upgrade of heat and electricity supply facilities
in the rayon centers and in health and social sector institutions in the affected areas. The
upgrading of the heating system is necessary in the regions visited, given the severe weather
conditions during winters and the deteriorated state of energy infrastructure due to years of
lack of maintenance or replacement. Districts visited expressed their wish, and reflected the
wishes of the population, to be connected to the gas pipeline. Ninety nine percent of all gas
consumed comes from Russia and gas has a 60% share in Belarus’ fuel balance. The
extensive forest and wood industry waste resources in the affected area provide an
opportunity for their use in heat supply (from areas with limited contamination) provided
measures to mitigate radioactive exposure are adopted. Technology for such mitigation
exists and the centralization of utilization of wood for heating purposes will increase the
success of managing the impact from flue gases and ash disposal, sources of potential
radioactive exposure. Finally, the utilization of these resources will contribute to the area’s
economic revitalization and to Belarus’s overall objective to reduce dependence on imported
fuels. The Bank will need to further assess the economic viability of financing gasification
compared to alternative sources of heat, and to take into account international radiation safety
standards with regard to wood burning boilers in contaminated areas.
2. Proposed objective(s)
The proposed project objective would be “to revitalize selected districts most affected by the
Chernobyl accident by improving local people’s incomes and living conditions.” Project
outcomes would include: increased forest-based employment and household income, and
improved access to provision of heat in ways which are less at risk of radionuclide
contamination. The project will be supported by the World Bank, donor and Belarusian
Government contributions. It may include support from the Global Environment Facility as a
blended operation with the above objective serving as the global environmental objective,
consistent with the GEF Strategic Priority of “mainstreaming biodiversity in production
landscapes and sectors”. If GEF support proceeds, it would entail improved management of
biodiversity conservation in a portion of the globally significant Southern Polesie wetlands and
adjacent mixed forest ecosystems affected by the Chernobyl accident, providing replicable
models for areas elsewhere which had suffered from radioactive fall-out or had been abandoned
for any other reason. The project may also provide carbon sequestration benefits stemming from
managed wetlands reversion and reduced forest fire risk. GEF support for the heat supply
component will also be investigated during preparation.
3. Preliminary description
The five-year project could comprise selected activities from among the following categories:

Forest Enterprise. Increasing the capacity for wood harvesting and processing in order to
better utilize forest resources for employment and income generation in environmentally
sound and safe ways, thus benefiting local people.

Optimizing Provision of Heat . Improving the heating conditions in houses and linking them
to a gas-based heating system, thereby reducing the exposure to radionuclides. This might
also include reducing exposure by retrofitting existing wood burning boilers and increasing
safe utilization of wood resources by converting large institutional boilers that need
replacement to wood burning boilers.
Supporting Activities. In addition to these activities the project design would need to address
various support activities, with collaborative support from the International Atomic Energy
Agency in some cases. These activities include the need for advice to the Government on how to
harmonize its national radiation safety standards with the international ones because current
inconsistencies, especially among Belarus’ neighbors, limit and complicate international trade,
and furthermore because some national standards need updating to reflect current international
knowledge and consistent logic about exposure risk from various radiation sources. It also
includes the need for radiation monitoring and communication to increase the knowledge of and
trust in clean forest production options and market opportunities. It might also include support
for analysis (e.g., financial accounts of forestry and utility enterprises) to better understand
implications of existing policies, and advice on policy reform efforts (e.g. tariffs) that have been
initiated.
4. Safeguard policies that might apply
Environmental assessment and forests safeguard policies are likely to apply. The project will
have a positive environmental impact by increasing the country’s financial and institutional
capacity to improve environmental management generally, as well as to reduce exposure of local
people to harmful radiation. No significant adverse environmental impacts are foreseen. An
environmental assessment undertaken during project preparation will include an outline of any
precautionary and curative measures needed to mitigate, minimize and compensate for special
risks related to radiation contamination. Close collaboration with the International Atomic
Energy Agency during Bank missions and as a co-financier is supplying the Bank with the
special technical oversight required to address the issues associated with radiation contamination.
Bank-financing of industrial-scale commercial harvesting operations would trigger the Bank
Forest Policy (OP 4.36) and the project would be consistent with the policy because the
government is already taking the necessary steps to ensure that the forests to be harvested are
certified under an independent forest certification system, acceptable to the Bank. A PHRD
grant is financing a study to align Belarus’s standards for biomass burning boilers with those of
the EU.
5. Tentative financing
Source:
BORROWER/RECIPIENT
INTERNATIONAL BANK FOR RECONSTRUCTION AND
DEVELOPMENT
GLOBAL ENVIRONMENT - ASSOCIATED IBRD FUND
TO BE DETERMINED
($m.)
7
45
Total
6. Contact point
Contact: Jessica Mott
Title: Sr. Natural Resources Econ.
Tel: (202) 458-5607
Fax: (202) 614-0857
Email: [email protected]
4
2
58