INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC5359. Date ISDS Prepared/Updated: 12/27/2010 I. BASIC INFORMATION. A. Basic Project Data

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Date ISDS Prepared/Updated: 12/27/2010 I. BASIC INFORMATION A. Basic Project Data INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC5359 Country: Indonesia Project ID: P Project Name: ID - Chiller Energy Efficiency Project Task Team Leader: Johannes Heister GEF Focal Area: Climate change Global Supplemental ID: Estimated Appraisal Date: September 26, Estimated Board Date: December 15, Managing Unit: EASIS Lending Instrument: Specific Investment Loan Sector: General energy sector (50%);District heating and energy efficiency services (50%) Theme: Climate change (70%);Other environment and natural resources management (30%) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 3.66 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.00 GERMANY: KREDITANSTALT FUR WIEDERAUFBAU (KFW) Montreal Protocol Investment Fund B. Project Objectives [from section 2 of PCN] 1. The project development objective is to reduce the ODS consumption and greenhouse gas (GHG) emissions by replacing inefficient ODS chillers with energy efficient non-ods chillers. C. Project Description [from section 3 of PCN] 2. The proposed project will facilitate the replacement of about 160 ODS-based chillers with energy efficient non-ods-based chillers over a period of five years. The project proposes to facilitate the replacement of existing ODS-based chillers by: (i) converting part of the grant funds provided by GEF to concessional loans to chiller owners; (ii) providing part of the GEF grant funds to support costs of bank guarantees on the concession loans drawn from GEF and from the government#s environmental fund financed by KfW; and (iii) providing the MLF grant

2 funds to support implementation of technical assistance, energy consumption measurement and monitoring, and project management activities. 3. The proposed project will be supported by the MLF and GEF on a grant basis.the MLF funding of US$1.0 million will be drawn from the grant fund approved by the ExCom of the MLF for the Global Chiller Replacement Project (ExCom Decision 47/26). An additional grant fund of US$3.66 million will be provided by GEF. The GEF Project Identification Form (PIF) with the funding request of US$6.0 million including an agency#s support cost has already been approved by the GEF Council on March 17, Component 1. Concessional Loans for Investment in Energy Efficient Chillers (US$20.0 million: US$2.0 million from GEF, and US$18.0 million from the Government#s Industrial Efficiency and Pollutions Control Environmental Fund which is financed by KfW) 4. Financial support will be provided in the form of concessional loans. This GEF concessional loan component will complement the existing Industrial Efficiency and Pollution Soft Loan Program (IEPC) from the Governments of Germany through KfW. Under the IEPC program, concessional loans are channeled through the following banks: BNI, BEI, Bank Niaga, and 5 BPD (Yogyakarta, Kaltim, Kalbar, Jarteng). The Project will explore possibility of using one or more of these existing financial intermediaries to channel the GEF resources. Terms and conditions of concessional loans offered under the IEPC program will be employed by this project. The replacement cost is about US$200,000 per unit. The concessional loans will be provided up to 80% of the replacement cost. The balance will have to be self-financed by chiller owners. Component 2. Bank Guarantees (US$1.66 million from GEF) 5. Based on the experience of implementing the Government#s IEPC program, the limited uptake of concessional loans for replacement of chillers is due in part to the cost of accessing the concessional loans from the channeling banks mentioned above. Chiller owners who do not have an established business relationship with these channeling banks would have to provide bank guarantees in order to access the concessional loans. Additional costs to cover the bank guarantees make the IEPC program unattractive. Since chiller owners normally have other investment priorities to consider, chiller replacement, which is subject to other investment barriers (e.g., perceived technology risks, lack of awareness, and etc.), has not been taken up. 6. To overcome this particular barrier, costs of issuing bank guarantees, which are normally borne by chiller owners, will be financed by GEF on a grant basis. This would allow chiller owners, who do not have existing collateral with the financial intermediaries of the Project, to participate without incurring additional costs. The cost of bank guarantees is about 2 # 3% of the loan amount. Component 3. Measurement and Monitoring (US$500,000 from MLF) 7. Part of the grant funds provided by the MLF will cover initial costs of baseline power measurement and monitoring of actual energy savings of a representative number of chillers to be replaced under the Project. This component will also cover the costs of data loggers as well as the monitoring of data generated by these devices. The objective of this project component is

3 to systematically measure the impact of the project in terms of energy savings achieved by the new technology. Component 4. Technical Assistance (US$ 300,000 from MLF) 8. Technical assistance will consist of the following activities: # Market development # Technical workshops will be conducted in order to familiarize chiller owners with the global concerns regarding climate change and ozone layer depletion, and to introduce life-cycle analyses as a tool for making replacement decisions. Existing tools and software developed under other Bank-funded energy efficiency project will be used. Only slight modifications to incorporate the local context may be required. # Refrigerant Management Plan # Technical workshops will be conducted for all participants of this Project. This will ensure that ODS from the retired equipment will be properly recovered. Environmentally-sound recovery and handling of ODS in accordance with ANSI/ASHRAE 15 # 1994 Safety Code for Mechanical Refrigeration will be mandated for all equipment suppliers participating in the Project. Technical workshops will be conducted to inform participants of potential revenues from carbon emission credits from ODS disposal activities to ensure that any unwanted ODS refrigerants will be properly disposed of. The ODS disposal protocol and criteria of Climate Action Reserve and Voluntary Carbon Standard Association will be addressed. Moreover, participants will be informed of measures to minimize leakage of refrigerant from new chillers, and measures or good practice to ensure optimum performance of new chillers. # Public Awareness # Annual chiller energy efficiency awards will be awarded to recognize chiller owners that properly maintain their chillers and achieve high energy savings. The purpose of this event is to create an incentive for building owners to maintain and improve energy performance of their chillers. Successful experience of chiller replacement under the Project will be documented and disseminated through various media and publications, as well as, through workshops for chiller owners not covered under the Project. The public awareness activities will serve as a showcase for the success and benefits from energy efficiency products in large buildings. Other government agencies and stakeholders will be addressed by this project component. Component 5. Project Management (US$200,000 from MLF) 9. The Project will support establishment of a project management unit under the Ministry of Environment. The Project Management Unit will be responsible for carrying out technical assistance activities, undertaking market development of chiller replacement, liaising with potential chiller owners and suppliers, monitoring and implementing the project, and providing required reports to the World Bank, GEF, MLF, and the Environmental Fund under the IEPC Program. D. Project location (if known) 10. Nation wide E. Borrower s Institutional Capacity for Safeguard Policies [from PCN] 11. The Project is by and large an extension of Indonesia ODS Project, which has been successfully implemented and is about to conclude at the end of The Ozone Protection Division of the Ministry of Environment will be managing this project. The Ozone Protection Division has been working with the Bank team on ODS phase-out project since 1995 and has

4 sufficient staff who are familiar with the Bank#s safeguards policies and have received trainings on the Bank project management. Therefore, institutional capacity is deemed sufficient for the Bank#s project. F. Environmental and Social Safeguards Specialists Ms Ina Pranoto (EASIS) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) The project is an environment project to reduce CFC and HCFC emissions that damage the ozone layer and contribute to the global climate change. In addition, the project activities will accelerate replacement of ODS-based equipment to energy efficient non-ods equipment. Reduced energy consumption of new equipment will result in additional carbon dioxide emission reduction. Investment component of the Project will entail dismantling of baseline ODS equipment and installation of new equipment. Specific project sites could only be confirmed during project implementation. An environmental safeguards framework will be developed during the preparation of the project. This framework will include the procedures, criteria, reporting requirements, and institutional responsibilities for carrying out component 1: (i) assessment for the replacement and disposal of chillers and handling (including any disposal) of CFC refrigerants; and (ii) inspections for compliance with project guidelines. The assessment would include compliance with other relevant environmental regulations such as water and air pollution in the process units or the industry as a whole. The framework would also include the institutional strengthening capacity program for the Co-executing agency and chiller owners as well as the preparation of specific guidelines to be included in the operational manual. The environmental framework will take into account IFC Environmental, Health and Safety (EHS) Guidelines. Natural Habitats (OP/BP 4.04) The project will not affect any protected areas, known natural habitats, or established or proposed critical natural habitats. Forests (OP/BP 4.36) The project will not finance activities that would involve significant conversion or degradation of critical forest areas or related critical natural habitats as defined under the policy. Pest Management (OP 4.09) The project will not finance procurement of pesticides or pesticide application equipment (either directly or indirectly). Physical Cultural Resources (OP/BP 4.11) The project will not adversely affect sites with archeological, paleontological, historical, religious, or unique natural values. Indigenous Peoples (OP/BP 4.10) The project will not affect Indigenous Peoples as defined in the policy, and project activities will not limit or prevent access to natural resources vital to the sustainability of their culture and livelihoods. Involuntary Resettlement (OP/BP 4.12) The project will not finance any land acquisition.

5 Safeguard Policies Triggered Yes No TBD Safety of Dams (OP/BP 4.37) The project will not finance construction or rehabilitation of any large dams as defined under this policy. No action is required under this policy. Projects on International Waterways (OP/BP 7.50) There are no known project components involving international waterways as defined under the policy. No action is required under the policy. Projects in Disputed Areas (OP/BP 7.60) The project is not located in any known disputed areas as defined under the policy. No action is required under this policy. Environmental Category: B - Partial Assessment III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: N/A B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: 08/31/2011 C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. N/A IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Johannes Heister 11/04/2010 Approved by: Regional Safeguards Coordinator: Mr Panneer Selvam Lakshminarayanan 12/14/2010 Comments: Sector Manager: Mr Franz R. Drees-Gross 11/23/2010 Comments: Approved 1 Reminder: The Bank s Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in-country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons.

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