36362-013: Liaoning Environment Improvement Project

Project Data Sheet (PDS): Details

Description

The long-term goal of the Project is to support environmental improvement in Liaoning Province. The main objectives of the Project are: (i) improvement in efficiency and reliability of gas and central heating supply and closure of small coal-fired boilers, and (ii) CMM and CBM production and commercial utilization. The Project includes the following components: (i) Part A: CBM/CMM development; (ii) Part B: gas distribution improvement; (iii) Part C: city central heating supply, and (iv) Part D: institutional reforms and corporate governance improvement.

Description

The long-term goal of the Project is to support environmental improvement in Liaoning Province. The main objectives of the Project are: (i) improvement in efficiency and reliability of gas and central heating supply and closure of small coal-fired boilers, and (ii) CMM and CBM production and commercial utilization. The Project includes the following components: (i) Part A: CBM/CMM development; (ii) Part B: gas distribution improvement; (iii) Part C: city central heating supply, and (iv) Part D: institutional reforms and corporate governance improvement.

Project Rationale and Linkage to Country/Regional Strategy

Part A of the Project is designed to utilize CBM/CMM to reduce GHG emissions and improve coalmine safety. The gas distribution systems owned and operated by Fushun Gas Company and Benxi Gas Company are inefficient with high distribution losses. They are also dangerous hazardous as the pipelines are aged and often cause explosion. To address these problems, Part B of the Project will rehabilitate Fushun and Benxi Gas Company's gas distribution systems to reduce distribution line losses, improve operation safety and supply gas to additional households to help reduce coal consumption. Part C of the Project will improve environmental quality by building efficient and large boilers to facilitate closing the 412 existing small coal-fired boilers. Part D of the Project includes three areas: (a) restructuring of the project implementing agencies (PIAs), (b) institutional strengthening and training, and (c) a study to assist the PIAs to implement the central heating tariff reforms and assess the options for the private sector participation. The objectives for ADB's operations in the PRC include: (i) promote equitable and inclusive growth; (ii) make markets work better; (iii) foster regional cooperation; and (iv) promote environmental sustainability, which includes encouraging the use of clean production technologies and renewable energy etc. Methane, part of natural coal composition, is released into the atmosphere from coal mine operations. It is estimated that the coal mines in Liaoning released about 1.2 billion cubic meters of methane into the atmosphere in 2003, a figure expected to reach 2.0 billion cubic meters by 2010. Methane, when released into the atmosphere, is about 21 times more potent as a greenhouse gas than carbon dioxide. In addition, coal mine safety is a major concern in the PRC, which reported deaths of 6,900 miners in 2002. Overall, the Project is consistent with ADB's operational strategy in the PRC and was listed in ADB's Country Strategy and Program (2004-2006). The Project will support the government of Liaoning province (GLP) in aiming to improve environmental quality and coal mine safety, and to ensure that the poor have sufficient gas and central heating.

Impact

Environmental improvement in Liaoning Province.

Project Outcome

Description of Outcome

Improvement in efficiency and reliability of gas and central heating supply

Progress Towards Outcome

Progress has been made toward outcome.

Implementation Progress

Description of Project Outputs

1. Increased CMM/CBM production and utilization 2. Rehabilitated and expanded gas distribution systems 5. Implemented assistance programs for the poor households 3. Augmented central heating systems to facilitate closure of small inefficient coal-fired boilers 4. Developed institutional and financial tariff reform action plan, and privatization plan

Status of Operation/Construction or Implementation Progress

Completed. Completed. Completed. Completed. Completed.

Safeguard Categories

Environment: B
Involuntary Resettlement: B
Indigenous Peoples: B

Summary of Environmental and Social Aspects

Environmental Aspect
The Project has substantial environmental benefits resulting from energy efficiency improvements, reduction in greenhouse gas emissions, and reduction in emissions from coal burning. EA will ensure that any adverse environmental impacts arising from the construction and operation of the project facilities will be minimized by implementing the mitigation measures as identified in the IEE and SIEE. The regional air quality will improve with the closure of small, inefficient, coal-fired boilers, more efficient gas transmission and distribution systems, and reduced coal use. The results of environment monitoring during the project implementation and first two years of operations are reported to ADB by the EA through its quarterly progress reports and bi-annual environmental monitoring reports.

Involuntary Resettlement
The Project is composed of 7 subprojects. Only the CBM/CMM subproject involves some minor land acquisition and temporary land use impact. A resettlement plan was prepared for this subproject. The plan is designed to ensure that the affected people will be better off as a result of the Project. The compensation of the permanent land loss is based on the Land Administration Law of the PRC (1998). A resettlement information booklet was distributed to all affected households in November 2003. The PIA for the CBM/CMM subproject is fully responsible for implementation, financing and monitoring of land acquisition, compensation, and rehabilitation. PIA will ensure that all affected households/persons are compensated in a timely manner and conduct the activities in accordance with the requirements set in the resettlement plan. The implementation of the resettlement plan is reported to ADB by the EA through resettlement monitoring report and its quarterly progress reports.

Indigenous Peoples
The Project will benefit all urban residents regardless of their ethnicity, however ethnic minorities will also benefit proportionally. There are about 401,760 (or 15% of total project beneficiaries) minority persons, including Hui, Mongolian, Manchurian, Korean, and Xibo, who will benefit from the increased and improved gas and central heating supplies. No further measures are required to safeguard ethnic minorities. A few Mongolian and Hui households will be affected by the land acquisition for the Project. Particular attention and special provisions will be paid to them to ensure that their interests, rights , and sociocultural customs are protected. These provisions are presented in the resettlement plan.

Stakeholder Participation and Consultation

During Project Design
Consultations with stakeholders, including various levels governments, implementing agencies, and beneficiaries were undertaken.

During Project Implementation
Consultations with stakeholders, including various levels governments, implementing agencies, and beneficiaries were undertaken.

Status of Covenants

Category Rating
Loan 2112
Sector
Social Satisfactory
Financial Satisfactory
Economic
Others Satisfactory
Safe Satisfactory
Project Financial Statements

 

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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