Georgia: Power Transmission Enhancement Project financed by Asian Development Bank (ADB)

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Asian Development Bank Project Number: 2974-GEO Georgia: Power Transmission Enhancement Project financed by Asian Development Bank (ADB) Bi-Annual Land Acquisition and Resettlement Plan, November 2013 to June, 2014 Compiled by: International Projects & Reporting Department- Georgian State Electrosystem JSC For: Georgian State Electrosystem JSC This report does not necessarily reflect the views of ADB or the Government of Georgia; ADB and the Government cannot be held liable for its contents.

ABBREVIATIONS ADB EA EARF EIA EIP EMP GoG GSE IA IEE LARP MoENRP PMU RAP RPTEP TA Asian Development Bank Executing Agency Environmental Assessment and Review Framework Environmental Impact Assessment Environmental Impact Permit Environmental Management Plan Government of Georgia Georgian State Electrosystem JSC Implementing Agency Initial Environmental Examination Land Acquisition and Resettlement Plan Ministry of Environmental and Natural Resources Protection Project Management Unit Resettlement Action Plan Regional Power Transmission Enhancement Project Technical Assistance Page 2 of 9

Contents 1. INTRODUCTION... 4 1.1 Construction activities and project progress during the reporting period... 5 2. LAND ACQUISITION AND RESETTLEMENT... 6 4.1 Implementation of Resettlement Action Plan... 6 ANNEXES... 7 Annex 1. Pictures of Project Sites (Khorga, Ksani, Marneuli and Menji SSs)... 7 Annex 2. Compliance Report on Implementation of RAP for Component 1 (Khorga Substation)... 8 Annex 3. Resettlement Action Plan for Component 2 Substation Rehabilitation and Extension (Marneuli Substation)... 9 Page 3 of 9

1. INTRODUCTION The reliability of the GSE's transmission infrastructure have been vastly improved for recent years as a result of intensive capital investment programs successfully implemented with the support of international financial institutions and donors. Besides, the improved financial position of GSE for the last few years enabled GSE to implement a number of rehabilitation and construction activities with its own resources and funds. As a result of these joint efforts, about 80% of primary equipment and 30% of secondary equipment at GSE substations, as well as a significant part of transmission lines, have already been replaced or rehabilitated. These projects significantly improved the situation in GSE substations and lines, shortened the outages and maintenance, reduced transmission losses and improved the power transmission quality criteria. However, GSE is still investing in the remaining portions of the assets to achieve further improvement of the transmission grid. GSE is committed to have all the GSE substations fully rehabilitated/upgraded by 2015-2016, with all remaining primary and secondary equipment replaced and/or refurbished and effectively controlled from the National Control Center (NCC). The Regional Power Transmission Enhancement Project (the RPTEP) financed from the proceeds of the ADB loan is among the top investment priorities of GSE s Strategic Development Plan 2012-2020 and, once implemented, will further enhance the reliability and stability of GSE s transmission and interconnection infrastructure and remarkably improve the capability of cross-border energy exchange for export, import and transit. The RPTEP activities include the following two physical components: 1. Construction of a new 220/110kV Substation Khorga; The new Khorga substation, together with other ongoing transmission system investment projects, will improve the reliability of the grid and power supply quality. The new substation will strengthen and stabilize the transmission network operation. It will guarantee stable transmission of energy produced at Enguri HPP to the industrial zone of Poti and to Turkey through Batumi Substation. Besides, it will help stabilize transmission power flows providing additional event redundancy and lowering the incidence of outages. 2. Substation Rehabilitation and Improvement: Lot 1: Rehabilitation of the 500kV substation Ksani, including HV primary equipment and complete relay protection and control systems; Lot 2: Rehabilitation and expansion of Marneuli substation with 500/220/10kV bays, including: 501MVA autotransformer (3x167MVA +1x167MVA spare); connection to existing 220kV part of Marneuli substation via 220kV line (about 400m); realignment of existing 500kV lines Vardzia and Mukhrani to ensure looping in and looping out of 500/220/10kV substation. Lot 3: Supply and installation of one 125MVA autotransformer 220/110/10 kv for the 220 kv substation Menji, replacing one of the two existing 220/110/10 kv autotransformers (63 MVA). Once implemented, this project component: will improve the existing 500 kv and220 kv connections in the east part of Georgia, will serve as an additional/alternative source of power supply for Tbilisi metropolitan area in case of emergencies. Expansion of existing 500 kv link (Akhaltsikhe-Gardabani) with Ksani-Marneuli connection will further increase Page 4 of 9

the reliability and stability of 500kV network, thus increasing the reliability of export/import/transit of electric energy. Location of the substations to be constructed and rehabilitated/extended under the Project are highlighted in the map below: Physical completion of the RPTEP is expected by end 2016. These two components of the RPTEP, the components 1 (Construction of a New 220/110kV Substation Khorga) and 2 (Substation Rehabilitation and Improvement) involve the activities that could have an impact on the environment. Following Environmental Considerations in ADB Operations of September 2006, the RPTEP has been classified as Category B requiring an Initial Environmental Assessment (IEE), which will not have significant irreversible or permanent negative environmental impacts during or after construction and requires preparation of Initial Environmental Examination (IEE). The environmental categorization of subprojects was conducted using ADB s Safeguard Policy Statement (2009). 1.1 Construction activities and project progress during the reporting period Civil works under Component 1 - Construction of a New 220/110kV Substation Khorga The construction activities have not been started yet. Following the International Competitive Bidding (ICB) for this component, the contract was awarded to Siemens AG Osterreich (Austria) and the Contract Agreement was signed July 9, 2014. The implementation period from the effective date of the Contract Agreement is 18 months. Civil works under Component 2 Substation Rehabilitation and Extension The construction activities have not been started yet. Page 5 of 9

The procurement via ICB for these3 lots is well underway and the contracts are expected to be signed in October- November 2014. The implementation period from the effective date of these contract will be 18 months. 2. LAND ACQUISITION AND RESETTLEMENT 4.1 Implementation of Resettlement Action Plan Resettlement Action Plan for the component 1 - Construction of a new 220/110kV Substation Khorga - was prepared under the ADB s TA Program in May 2011. GSE implemented the RAP in 2013. According to the external monitoring conducted in November 2013, the land acquisition and resettlement procedures were accomplished according the provisions of LARP, with all affected households fully compensated and allowances paid. For the Compliance Report on Implementation of the Resettlement Action Plan for Construction of a New 220/110kV Substation Khorga under RPTEP, please, see Annex 3. Resettlement Action Plan under Component 2 - Substation Rehabilitation and Extension - for Extension of Marneuli Substation was prepared in March 2013. Please, see Annex 4. GSE implemented the RAP in January-February 2014, with all affected households fully compensated and allowances paid in full compliance with the RAP. The compliance monitoring by an external auditor is required, that will be conducted by the selected consultants (Fichtner) for project supervision and management. GSE will submit a relevant Compliance Report to ADB before the commencement of any construction activities in Marneuli substation area. Page 6 of 9

ANNEXES Annex 1. Pictures of Project Sites (Khorga, Ksani, Marneuli and Menji SSs) Khorga Substation Area Ksani Substation Area Marneuli Substation Area Menji Substation Area Page 7 of 9

Annex 2. Compliance Report on Implementation of RAP for Component 1 (Khorga Substation) Page 8 of 9

Annex 3. Resettlement Action Plan for Component 2 Substation Rehabilitation and Extension (Marneuli Substation) Page 9 of 9