ASIA POWER (PRIVATE) LIMITED (APPL)

completed

Environmental Review Summary (ERS)Project Name Sri Lanka-Asia Private Power LimitedRegion AsiaSector PowerProject No. 0043311. Asia Power (Private) Limited (APPL) plans to build, own and operate a 44 MW diesel power plant in an industrial park at Sapugaskanda in Colombo. The project is sponsored by KHD Great Britain Ltd. a wholly owned subsidiary of Klochner Humboldt Deutz of Germany, and the Maharaja Organisation (Projects) Ltd. a wholly owned subsidiary of the Maharaja Group, the largest Sri Lankan private sector company. The energy produced will be sold to the state-owned Ceylon Electricity Board (CEB). The fuel for the power plant will be supplied by the state-owned Ceylon Petroleum Corporation (CPC) by pipeline from a nearby refinery.2. This is a category B project according to IFC''s environmental review procedure because specific impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical design and permitting information submitted by the project sponsor, an Environmental Impact Assessment (EIA) prepared for the sponsor by Ewbank Preece, Ltd., and the technical appraisal and site review completed by lI:C''s Technical and Environment Department staff. The following key environmental, health and safety issues were considered during IFC''s environmental review: • dust, noise and traffic during construction; • atmospheric emissions (CO2, SO2, NOx and particulates) dunng operation; • noise levels in vicinity of the plant; • effects on terrestrial and aquatic organisms and communities; • visual impacts; • worker exposure to noise; and • general worker safety.The information provided about how these potential impacts are to be addressed in the construction and operation of the new facility is summarized in the paragraphs that follow.3. Existing background studies of air quality, noise and traffic at the site have been completed. The sponsor will be required to comply with Ceylon Environmental Authority (CEA) and World Bank guidelines for air quality, noise and traffic during construction. Dust will be controlled by damping exposed earth and retaining existing grass and low scrub cover. Traffic noise will be only slightly increased above existing levels. Roads to the site will be improved to mitigate the effects of increased traffic.4. SO2 stack emissions of 11 tons per day (tpd) are far below the proposed World Bank cap of 100 tpd for industrial areas. The project will produce ground level SO2 concentrations in compliance with CEA standards of 350 µg/m3 (l-hr avg.) and 100 µg/m3 (24-hr avg.). NOx stack emissions (2460 mg/Sm3) are also expected to meet the CEA authorized level for Sapugaskanda (2500 mg/Sm3), but low-NOx injectors may be installed on Mee engines to further reduce this emission. This would increase fuel consumption by 2 percent. Particulate emissions of 140 mg/Sm3 would be well within the CEA limit of 300 mg/Sm3. CO2 emissions, of interest for their impact on global warming, will be lower than for a coal-fired plant of equivalent power output.5. Predicted noise levels of 76 dBA at the plant fence with no mitigation would exceed CEA standards of 60 dBA at night and 70 dBA during the day. The World Bank guideline is 70 dBA. This problem should be solved by construction of an engine house to serve as an acoustic barrier. Additional sound insulation will be installed if required to meet the standards.6. The project uses closed-cycle dry radiator cooling which will not produce a hot water discharge. IFC will negotiate covenants with the sponsor requiring environmentally acceptable disposal of waste oil, effluent and fuel oil sludge. Oil storage tanks will be surrounded by 100%-capacity spill containment dikes. An oil-spill emergency plan with clean-up equipment may be required.7. The most prominent visual features will be the two 60-meter stacks. This impact will be lessened by their proximity to other stacks in the adjacent industrial area.8. Employee exposure to noise will be minimized to reduce the need for personal protective equipment in accordance with World Bank guidelines and policy.9. The sponsor will implement a health and safety policy, which provides programs for hazardous waste handling, fire prevention, emergency response and training. Fire protection equipment consists of a water ring hydrant system, a fire alarm station with 30 inputs, 30 foam generators, and portable fire extinguishers.10. An Environmental Officer will be appointed whose duties will include advising on environmental aspects of emergency situations. A deputy will be designated to provide 24-hour coverage. The sponsor will prepare an "Emergency Action Plan" as the basis for training personnel in their responsibilities in the event of an emergency.11. IFC will monitor ongoing compliance with World Bank environmental, health and safety policies and guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by APPL and by conducting periodic site visits.12. Based on its review of available information regarding potential environmental impacts and proposed mitigation measures, ARC concludes that APPL''s proposed power plant is designed to meet World Bank environmental, health and safety policies and guidelines, and host country requirements.L:\WPEU\BONNIE\BJWWORD\SRILANKA.DOCMay 15, 1996 3:23 PM