World Bank to act on $300-M loan for Agus-Pulangi rehab next year

world bank to act on 300 m loan for agus pulangi rehab next year - World Bank to act on $300-M loan for Agus-Pulangi rehab next year

THE World Bank said the estimated approval date of the $300-million (around P15 billion) loan to support the Agus-Pulangi Hydropower Complex Rehabilitation Project is Sept. 29, 2021.

The rehabilitation is expected to restore Agus-Pulangi’s deteriorating generating capacity, thereby raising the share of clean energy in Mindanao.

According to a document posted on its website Wednesday, the World Bank will appraise the project in July 2021.

It said rehabilitation of the Agus-Pulangi Hydropower Complex was proposed as the seven run-of-river hydropower plants (HPPs) are nearing the end of their operational life and have become “highly inefficient,” while the deteriorating infrastructure poses “significant safety risks.”

The project will be implemented in two parts, the rehabilitation of the power units and infrastructure of the Agus-Pulangi Hydropower Complex, and extension of capacity building and implementation support to the implementing agencies: the National Power Corp. (NPC) and the Power Sector Assets and Liabilities Management Corp.

“The rehabilitation will include generating and auxiliary equipment, control systems, civil structures and hydro-mechanical equipment and penstocks. Works will also be included to address key safety issues for the HPPs to meet international safety standards,” the document read.

The scope of rehabilitation will pursue three options depending on the condition of the facilities: restoring capacity and extending the operational lives of the power units; increasing the capacity and energy production on top of the first option; or additional rehabilitation in the event of potential flooding of the midstream Balo-i floodplains.

For the second component, the World Bank said the loan will also fund technical consultancy for the implementing agencies in project management and implementation.

The document also laid out the bank’s assessment on the environmental and social impact of the project. The Agus-Pulangi Hydropower Complex has six plants on the Agus River and one on the Pulangi River.

In the assessment, the bank said the project entails social risks largely due to the complex social context, including disputes on land and access to resources; armed conflict and violence; the presence of indigenous people opposing dam construction due to the impact on the Pulangi River.

“The CSO (civil society organizations) that sits on the Agus Hydropower Complex Multipartite Monitoring Board — Save Lake Lanao Movement — has disagreed with the NPC over the implementation of these conditions, particularly on reforestation and irrigation. Potential legacy issues will be assessed as part of the ESIA (environmental and social impact assessment),” it said.

The World Bank said it has no engagement with NPC so far and the implementing agency will have to strengthen its environmental unit to meet the requirements of the bank’s Environmental and Social Framework (ESF) standards. It said local governments and officials will also be trained to improve their awareness and capacity to comply with the ESF norms.

The World Bank gave the NPC a moderate rating on its capacity and commitment to manage the project’s risks and its familiarity with the Agus-Pulangi area.

It said external risks are also expected to be moderate for environmental concerns but are “substantial” on the social aspects due to ongoing conflicts.

“While the expected project investments are expected to be relatively minor, mainly through rehabilitation or replacement of equipment, the project site is beset with complex social issues that may affect the outcomes of the project,” it said.

“It is expected that all environmental and social (E&S) risk management plans will be prepared prior to Bank appraisal, and that the ESCP (Environmental and Social Commitment Plan) will focus on providing commitment around the implementation of these, including adequate resources and capacity building for managing E&S risks,” the bank said. — Beatrice M. Laforga

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