Power Sector Improvement Project (RRP KGZ 43456-02)

Involuntary Resettlement Assessment and Measures

Resettlement Framework Document Stage: Draft for Consultation Project Number: 43456 July 2010

Kyrgyz Republic: Power Sector Improvement Project

Prepared by National Electric Grid of Kyrgystan, Kyrgyz Republic for the Asian Development Bank (ADB).

The resettlement framework is a document of the borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature.

Power Sector Improvement Project

Land Acquisition and Resettlement Framework

Kyrgyz Republic July 2010

CONTENTS

Page

A. INTRODUCTION 1. Background and Project Description 1 2. Land Acquisition and Resettlement Framework 5 B. LEGAL FRAMEWORK AND RECONCILIATION WITH ADB REQUIREMENT 1. Legal Framework 5 2. Reconciliation with ADB Requirement 6 3. Resettlement Principles for the Project 8 C. COMPENSAION ELIGIBILITY AND ENTITLEMENTS 1. Eligibility 9 2. Entitlements 9 D. SOCIOECONOMIC PROFILE 10 E. CONSULTATION, PARTICIPATION, AND DISCLOSURE 12 F. COMPENSATION, INCOME RESTORATION, AND RELOCATION 13 G. GRIEVANCE REDRESS MECHANISMS 13 H. INSTITUTIONAL ARRANGEMENTS AND IMPLEMENTATION 14 I. RESETTLEMENT BUDGET 16 J. MONITORING AND EVALUATION 17

ACRONYMS

ADB Asian Development Bank AF Affected Family AMDA automated metering and data acquisition system AP Affected Person(s) CC Civil Code of the Kyrgyz Republic GRC Grievance Redress Committee IR Involuntary Resettlement HH Households LARF Land Acquisition and Resettlement Framework LARP Land Acquisition and Resettlement Plan LC Land Code of the Kyrgyz Republic MOE Ministry of Energy NGOs Non Government Organizations OPGW Optical ground wires SCADA supervisory control and data acquisition system

GLOSSARY Ayil Okmotu (AO) local government Gosregistr State Agency on Registration of Estate Property Rights Oblast region

DEFINITION OF TERMS

Affected persons (APs)

All the people affected by the project through land acquisition, relocation, or loss of incomes and include any person, household (sometimes referred to as project affected family), firms, or public or private institutions. APs therefore include; i) persons affected directly by the safety corridor, right-of-way, tower or pole foundations or construction work area; (ii) persons whose agricultural land or other productive assets such as trees or crops are affected; (iii) persons whose businesses are affected and who might experience loss of income due to the project impact; (iv) persons who lose work/employment as a result of project impact; and (v) people who lose access to community resources/property as a result of the project.

Compensation Payment in cash or kind for an asset to be acquired or affected by a project at replacement cost at current market value.

Cut-off date The date after which people will NOT be considered eligible for compensation i.e. they are not included in the list of APs as defined by the census. Normally, the cut-off date is the date of the detailed measurement survey.

Detailed Measurement Survey (DMS)

The detailed inventory of losses that is completed after detailed design and marking of project boundaries on the ground

Encroachers Those people who move into the project area after the cut-off date and are therefore not eligible for compensation or other rehabilitation measures provided by the project.

Entitlement The range of measures comprising cash or kind compensation, relocation cost, income rehabilitation assistance, transfer assistance, income substitution, and relocation which are due to /business restoration which are due to APs, depending on the type and degree nature of their losses, to restore their social and economic base.

Inventory of Losses (IOL)

The pre-appraisal inventory of assets as a preliminary record of affected or lost assets.

Land acquisition The process whereby a person is compelled by a public agency to alienate all or part of the land s/he owns or possesses, to the ownership and possession of that agency, for public purposes, in return for compensation at replacement costs.

Non-titled Those who have no recognizable rights or claims to the land that they are occupying and includes people using private or state land without permission, permit or grant i.e. those people without legal title to land and/or structures occupied or used by them. ADB’s policy explicitly states that such people cannot be denied compensation.

Poor Those falling below the official national poverty line.

Replacement cost The method of valuing assets to replace the loss at current market value, or its nearest equivalent, and is the amount of cash or kind needed to replace an asset in its existing condition, without deduction of transaction costs or for any material salvaged.

Replacement Cost Study

This refers to the process involved in determining replacement costs of affected assets based on empirical data.

Sharecropper The same as tenant cultivator or tenant farmer, and is a person who cultivates land they do not own for an agreed proportion of the crop or harvest.

Significant impact 200 people or more will experience major impacts, which are defined as; (i) being physically displaced from housing, or (ii) losing ten per cent or more of their productive assets (income generating).

Vulnerable Any person who might suffer disproportionately or face the risk of being marginalized from the effects of resettlement and includes; (i) female-headed households with dependents; (ii) disabled household heads; (iii) poor households (within the meaning given previously); (iv) landless; (v) elderly households with no means of support; (vi) households without security of tenure; (vii) ethnic minorities; and (viii) marginal farmers (with landholdings of five acres or less).

A. INTRODUCTION 1. Background and Project Description 1. The Kyrgyz Republic, with the Ministry of Energy (MOE) and National Electric Grid of Kyrgyzstan as the executing agencies (EAs), is requesting the financial assistance of the Asian Development Bank (ADB) to implement the Power Sector Improvement Project (the Project). Total project cost is estimated at $56.0 million of which ADB will finance $44.8 million from its Asian Development Fund resources. Project components are as follows. 2. Project's impact is improved reliability of national and regional power supply in the Kyrgyz Republic and Central Asia. The outcome is the improved operational efficiency of the power companies. 3. Project's physical outputs are:

(i) Automated Metering and Data Acquisition System (AMDA) will bring transparency to wholesale electricity transaction between the unbundled power companies1 as well as in regional power trade. AMDA will eliminate errors and rampant metering data manipulation, untraceable using the current archaic technology. Commercial loss is estimated at 40%. Loss reduction will make more power available domestically and improve the financial performance of the power companies. Accurate power flow data is indispensible to improve commercial performance. The system also supports regional power trade through (i) meeting the CAPS metering accuracy requirement, and (ii) eliminating unauthorized exports.

Transmission Grid of Kyrgyz Republic

(ii) Substation Rehabilitation. This will improve reliability of the system by replacing

dilapidated circuit-breakers and instrument transformers that have reached their 1 The vertically-integrated power company, KyrgyzEnergo, was unbundled in 2001 into (i) Electric Power Plant

Company (generating company), (ii) National Electric Grid of Kyrgyzstan (transmission company), and (iii) four distribution companies each being a monopoly of its geographical area of responsibility.

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economic lives, are technologically obsolete, or do not meet the accuracy requirement for regional power trade. Since the Kyrgyz system is intricately interconnected with the CAPS, rehabilitation increases reliability of the regional system and underpins regional power trade.

(iii) Communications and Supervisory Control and Data Acquisition (SCADA).

This will link seven major substations and the control centers via optical fiber. This enables the system operator to make efficient dispatching based on real-time data. SCADA will reduce technical losses through avoidance of overloading, and enable faster detection and restoration of faults. The system improves overall efficiency and reliability of the system and CAPS.

4. Equipment installation for establishing AMDA and rehabilitating the substations are implemented inside the premises of existing substations, and therefore do not entail any land acquisition and resettlement (LAR). 5. The development of the modern communication system for the SCADA involves (i) stringing of optical ground wires (OPGW) on existing transmission lines, and (ii) laying of underground optical fiber cables. The modern communication system will focus only in the north of the country in Chuy Oblast (region). The estimated length of OPGW is 510 km, and underground cable is 50 km.

Location of OPGW and Underground Fiber Cable

6. LAR impacts are not expected from the installation of underground fiber cables, since they will be laid beneath public roads. In addition, a construction method called “directional drilling” is recommended to minimize disruption to traffic and pedestrians.

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Schematic Diagram of Directional Drilling

Source: http://www.astt.com.au/instal.htm 7. OPGW is strung over existing transmission towers on existing transmission lines which are located mostly on agricultural land or barren land. Hydraulic tensioner-pullers are used for stringing the OPGW (see picture below).

Examples of OPGW Stringing Equipment

Source: internet images 8. This activity requires work space and access, and involves temporary crop damage since most of the existing transmission towers are located on agricultural land (see Google Earth image below). Since the transmission towers already exist, permanent land acquisition and resettlement are not expected.

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Example of Existing Transmission Line Route

9. The Project is expected to be implemented over a period of 36 months beginning December 2010. Recruitment of Project Management Consultants will be commenced prior to this date through advance contracting actions. It is expected that the turnkey contractor will be procured by the end of 2011 and detailed design to commence at the beginning of 2012. The implementation schedule is illustrated below.

Implementation Schedule of Physical Component

Indicative Activities 2010 (Qtr)

2011 (Qtr)

2012 (Qtr)

2013 (Qtr)

1. Consulting services for implementation supervision

1.1 RFP issuance by NEGK 1.2 Contract award by NEGK 1.3 Consulting team mobilization 2. Development of Automated

Metering and Data Acquisition System and Development of SCADA

2.1 Outline design completion by consulting team

2.2 Contracts awarded to turnkey contractor by NEGK

2.3 Detail design by turnkey contractor 2.4 Equipment manufacturing and

installation 2.5 Commissioning by NEGK

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Indicative Activities 2010 (Qtr)

2011 (Qtr)

2012 (Qtr)

2013 (Qtr)

3. Substation Rehabilitation 3.1 Basic design completion by consulting

team 3.2 Contracts awarded to supplier by

NEGK 3.3 Deliver of equipment 3.4 Installation completed by NEGK 3.5 Commissioning by NEGK

2. Land Acquisition and Resettlement Framework 10. The Project is classified as Category B in accordance with ADB’s Safeguard Policy Statement 2009. A Land Acquisition and Resettlement Framework (LARF) is prepared because the exact location of the work space for OPGW stringing can only be identified during detailed design and temporary works planning by the turnkey contractor. The LARF is prepared in accordance with ADB’s Safeguards Policy Statement (2009) and Operation Manual F1/OP. This LARF was developed by NEGK and the turnkey contractor to guide preparation of LARP for the project in the manner complying with Kyrgyz legislation and ADB’s Safeguards Policy Statement. The LARF outlines provisions, procedures and institutional requirements for preparing and implementation of the LARP. 11. Although the direct LAR impact of the Project is expected to be limited to temporary crop compensation, as a guiding document, the LARF broadly describes the various LAR impacts and the mechanisms in the Kyrgyz Republic. 12. NEGK is responsible for the physical investments of the Project. Two contracts are expected:

(i) Plant–design, supply and install contract for AMDA, SCADA and communications (ii) Goods for substation rehabilitation equipment (installation by NEGK)

13. LAR impact such as temporary crop damage is only envisaged for (i) above, which is a turnkey contract where the contractor is responsible for the detailed design, and supply and installation of the equipments. Therefore, it will be the turnkey contractor’s responsibility to prepare the Land Acquisition and Resettlement Plan (LARP) as guided by this LARF. The LARP will be reviewed by the Project Implementation Unit (PIU) of NEGK and project management consultants, and endorsed by ADB. On-site installation works shall not commence until the endorsed LARP is fully implemented. B. LEGAL FRAMEWORK AND RECONCILIATION WITH ADB REQUIREMENT 14. The policy framework for the Project is based on ADB’s Involuntary Resettlement Policy (1995) as amended in the ADB's Safeguards Policy Update (2009) and Operations Manual (OM) Section F1/BP (2010), the Constitution of the Kyrgyz Republic, the Land Code (LC) and the Civil Code (CC) of the Kyrgyz Republic. Where differences exist between local law and ADB practices, the policy difference will be resolved in favor of the latter.

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1. Legal Framework 15. The Constitution of the Kyrgyz Republic was adopted in June 2010. It is the principal legal document ensuring guarantee of the citizen’s rights. Article 12 states “Land, interior of the earth, water, airspace, animal and vegetable kingdoms, and other natural resources are owned by the state, and the state guarantees their effective use in the interests of the people.” Further, Article 12 states that “in the Kyrgyz Republic, diversity of ownership forms is recognized and equal legal protection of private, state, municipal and other forms of ownership are guaranteed. Ownership can be withdrawn for public needs defined in the legislation with prior reimbursement of the cost of the property and other losses caused by withdrawal. The land can be in private, state, and other forms of ownership, except pasture lands, which cannot be in private ownership”. 16. Compensation for land acquisition and other impacts due to public projects are regulated also by other legislative acts including the Land Code (LC) and the Civil Code (CC). Based on these laws, land acquisition and resettlement follow the principles below:

(i) Land users and land owners have their right to be reimbursed for losses due to withdrawal of right of land use for state and public needs (Articles 49 and 66 LC).

(ii) At termination of the rights of property then property will be assessed on the basis of its market value (Article 68 LC).

(iii) State authorities inform the population on withdrawal and allotment of land for construction of sites operation of which affects the interests of the population.

17. The LC, 1999, is the core legal document with regards to land acquisition. It has been updated a few times since then, most recently in 2009. Clauses 62 and 66 of the LC specify methods of expropriation and voluntary transfers of land on the following grounds:

a. Use of land not according to its targeted purpose; b. Land needed for state or public purposes; c. Non-use of land provided for agricultural use for three years; d. Non-use of land provided for non-agricultural productive purposes for a period

stipulated in the original provision e. Non-payment of land taxes f. Non-payment of social taxes g. Annulment of license for mining on the basis of the Kyrgyz Republic’s mining law.

18. Clause 49 of the Land Code states the rights of land holders: owners shall receive full compensation of losses in cases set forth in the legislation of the Kyrgyz Republic. Clause 68 of the LC calls for private owners to be financially compensated for land losses and it may include replacement land, but at full market values. If agreement of compensation cannot be reached, this is then taken to the courts. 2. Reconciliation with ADB Requirement 19. ADB’s Safeguards Policy Statement is aimed at avoiding involuntary resettlement wherever possible; minimizing involuntary resettlement by exploring project and design alternatives; enhancing, or at least restoration, the livelihoods of all displaced persons2 in real 2 According to clarifications provided at the ADB’s Safeguard Requirements on Involuntary Resettlement Policy,

2009, displaced persons are those who are physically displaced (relocation, loss of residential land, etc.) and/or economically displaced (loss of land, assets, access to assets, income sources, or means of livelihood) as a result of involuntary acquisition of land, or involuntary restrictions on land use, etc.

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terms relative to pre-project levels; and improvement the standards of living of the displaced poor and other vulnerable groups. 20. In compliance with ADB’s requirements, affected people (AP) in a project area could be of three types: (i) persons with formal legal rights to land lost in its entirety or in part; (ii) persons who lost the land they occupy in its entirety or in part who have no formal legal rights to such land, but who have claims to such land that are recognized or recognizable under national laws; and (iii) persons who lost the land they occupy in its entirety or in part who have neither formal legal rights nor recognizable claims to such land. Involuntary resettlement requirements apply to all three types of APs. 21. It is necessary to note that the Kyrgyz legislation does not provide any compensation for the damages to property and /or land inflicted by activities made for public needs to the people residing or utilizing a land plot not formally registered at Gosregistr. 22. Comparison between ADB’s Safeguards Policy Statement and Kyrgyz legislation is tabulated below:

Comparison of Kyrgyz Legislation and ADB’s Policy

ADB policy Kyrgyz Legislation Comments

AFs should be fully informed/consulted in resettlement and compensation options

National law requires the consultation and information disclosure to be implemented prior the Project activities are started

Both ADB policy and Kyrgyz legislation require the local community consultation and information disclosure to be obligatorily provided

AFs should be compensated for all their losses at replacement cost

National legislation states that LAR for state or public benefits is to be compensated according to existing practices of calculation of losses that include missed profits, and funds invested to the land for one year. The latter one includes seeds, irrigated water, and jobs for land cultivation, trees, houses, and crops.

The ADB policy and practices working in Kyrgyzstan coincide

Lack of formal land title should not be an obstacle to compensation or rehabilitation

Kyrgyz Land Code and Civil Code provide for compensation only for those have officially registered entitlement. Compensation is not provided to encroachers and\or squatters.

This LARF provides for compensation at existing prices for titled, as well as to the customary users, and rehabilitation for those without title

APs should be timely compensated

Clause 66, para.4, Kyrgyz Land Code, stipulates that land acquisition of land plot for state and public needs is made after compensation of losses and disbursement of entitlement.

This LARF provides for prior crop compensation whether they have been harvested or not to avoid civil works delays and pressures on land users to harvest crop before it is fully ripe. Land users harvesting their crops after notification of the land occupation date will not lose any part of their due compensation.

APs should be compensated and/or assisted, as to guarantee at least

Compensation at replacement rate will be given for land, house, crops, trees losses and funds invested into land cultivation during last year (payments

General rehabilitation for income losses and for relocation costs will be given if these impacts occur.

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ADB policy Kyrgyz Legislation Comments the maintenance for their pre-project livelihood level

for irrigation, fertilizers, irrigation ditches/aryks construction, aligning etc.).

3. Resettlement Principles for the Project 23. Based on the above analysis of national legislation provisions and ADB policy, the broad resettlement principles for this Project shall be the following:

(i) AP impacts must be avoided or minimized as much as possible; (ii) If impacts are unavoidable, the APs will be identified and assisted in improving or

regaining their standard living; (iii) Information on the preparation /implementation of a LARP will be disclosed to all

APs and people’s participation will be ensured in planning and implementation. (iv) Land acquisition for the project will be done as per Kyrgyz Legislation and ADB

policy. Additional support would be extended for meeting the replacement value of the property. The affected persons who does not own land or other properties, but have economic interests or lose their livelihoods will be assisted, according to the broad principles provided in this document.

(v) Before taking possession of the acquired land and properties, compensation and resettlement and rehabilitation assistance will be paid according to provision described in the respective resettlement plan.

(vi) An entitlement matrix for different categories of APs has been prepared and provisions will be kept in the budget for those who were not present at the time of census survey. However, people moving in the project area after the cut-off date of notification for acquisition will not be entitled for assistance. In case of land acquisition the date of notification for acquisition will be treated as cut-off date. For non-titleholders such as squatters and encroachers the date of the project census or a similar designated date declared by the executing agency will be considered as cut-off date.

(vii) Appropriate grievance redress mechanism will be established at the district level to ensure resolution of disputes in rapid manner.

(viii) All activities related to resettlement planning, implementation, and monitoring would ensure the involvement of women and other vulnerable groups

(ix) AP consultation will continue during the implementation of LAR and rehabilitation.

24. All APs will be entitled to a combination of compensation and resettlement assistance reflecting type of asset lost, magnitude of lost, general impact of the AP’s livelihood and degree of the APs socio-economic vulnerability. The APs will be entitled to the following five types of compensation/assistance: (i) compensation for loss of land, crops/trees at replacement value, (ii) compensation for residential/commercial structures and other immovable assets at replacement value, (iii) assistance in lieu of the loss of business/wage income, (iv) assistance for shifting, and (v) rebuilding and\or restoration of community resources/facilities. C. COMPENSATION ELIGIBILITY AND ENTITLEMENTS 25. This LARF and resettlement procedural guidelines will apply to all APs in the Project area. This will ensure that all persons affected by acquisition of land and other fixed by change in the use of land and by the restrictions imposed by subproject activities use, will get appropriate compensation and rehabilitation assistance.

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1. Eligibility 26. APs entitled to compensation or, at least, rehabilitation provisions under the Project:

(i) All APs losing land with or without title, formal land-use rights or tradition use rights;

(ii) Tenants whether registered or not; (iii) Owners of buildings, crops, plants, or other objects attached to the land; and (iv) APs losing business, income, and salaries.

27. Compensation eligibility will be limited by a cut-off date to be set at the end impacts assessment and AP census carried out immediately after the conclusion of design. All APs who settle in affected areas after this date and who cannot prove that, are displaced users of affected plots will not be eligible for compensation. NEGK will inform communities regarding of cut-off date through their local offices and through the relevant government agencies. They, however, will be given sufficient advance notice to premises/dismantle affected structures prior to project implementation. Their dismantled structures will not be confiscated and they will not pay fines or sanctions. 2. Entitlements 28. Only crop loss is anticipated in the Project. Although trees are not permitted to be grown under the existing transmission lines, loss of tree is also described in case such impacts occur.

(i) Temporary land impacts will be compensated for crops losses only as detailed below.

(ii) Crop losses will be compensated at market rate for the value of 1 year production plus additional cash assistance at current year's prices to purchase se restore future crop activities.

(iii) Loss of trees: Fruit bearing trees will be compensated at the value of 1 harvest multiplied by the number of years needed to re-grow a tree at the same productive level of lost. Non-fruit bearing trees will be compensated at the cost of reproducing the growth level at which it was cut. Timber trees will be compensates at commercial value of the wood multiplied by its volume. No deductions will be applied value of the wood left to the AF.

29. Table 2 below summarizes the entitlements.

Entitlement Matrix

Asset Specification Affected People Compensation Entitlements Crops Crops affected All APs

(including squatters)

• Crop compensation in cash at full market rate for one harvest (either winter or summer) by default for impacts caused by tower bases and perimeters, stringing, and access.

• An assistance grant equivalent based on the current year's prices for the purchase of agricultural inputs for the next season

• All other crop losses will be compensated at market rates based on actual losses.

Trees Trees affected All APs

(including squatters)

Fruit bearing trees will be compensated at the value of 1 harvest multiplied by the number of years needed to re-grow a tree at the same productive level of the tree lost;

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Asset Specification Affected People Compensation Entitlements Non-fruit bearing trees will be compensated at the cost of reproducing a tree to the level of growth at which it was cut. • Trees compensation will be free of deduction for the value of the wood left to the AF.

D. SOCIOECONOMIC PROFILE 30.. LAR impacts associated with stringing of OPGW are limited to the areas of Chuy Oblast. Chuy Oblast (Oblast administrative center is Tokmok town) is located in northern Kyrgyz Republic and occupies Chuy, Chong-Kemin, highland Suusamyr Valleys as well as mountain ranges of Kyrgyz, Zaili, Kungey Ala-To’o, Susamyr-To’o and Djumgal mountain ranges. The territory of the Oblast is divided into 8 administrative rayons (districts): Alamudun, Jaiyl, Kemin, Moscow, Panfilov, Sokuluk, Chui, and Ysyk-Ata. There are 4 towns and 5 urban-type communities, 105 Ayil Okmotu and 327 settlements in the Oblast. Population is 772,000. Of 771,000 of permanent dwellers, urban population comprises 169,000 people (22%), and 601,000 (78%) are rural. Population density is on average 38.2 persons per km2. 31. Chuy Oblast is one of the largest agricultural regions of the country. Chuy Oblast represents only 10% of the country’s land area, but it accounts for one-third of all the arable and irrigated lands of the country, and provides one-third of the country agricultural gross output. Agriculture is a priority sector of the Oblast economy and about 50% of the working population is engaged in the agriculture sector.

Employment Structure

2001 2002 2003 2004 Sector ‘000

persons

% ‘000

persons % ‘000

persons % ‘000

Persons

%

Agriculture 143.6 51.7 145.1 52.1 142.9 51.1 141.4 49.6 Industry 27.9 10.0 27.5 9.8 27.4 9.8 29.2 10.2 Infrastructure and Maintenance

14 5.0 15.8 5.7 16.0 5.7 16.1 5.6

Construction 10.1 3.6 10 3.6 12.0 4.3 13.2 4.6 Services sector 42.6 15.3 43.4 15.5 44.1 15.8 47.2 16.6 State sector 12.4 4.5 12.4 4.4 13.2 4.7 13.3 4.7 Social services sector 27.3 9.8 25.1 9.0 24.1 8.6 24.6 8.6 TOTAL 279.9 100 279.9 100 279.9 100 285.9 100

Agricultural Land Use

Type of land Total (ha) Arable land. total 401,317 Perennial plants. including: 7,561 Gardens 6,169 Berry plantations 55 Mulberry trees 50 Vineyard 1,261 Fallow land 14,722 Hay lands 21,435

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Type of land Total (ha) Pastures – total 866,140 Agricultural lands. total 1,341,818 Plot of land (adjoining one's house) 32,044 Collectively owned gardens 2,903 Total land in the administrative borders of the Oblast 2,018,940

Source: National Statistical Committee. Kyrgyz Republic

32. In terms of crop types, cereals and leguminous plants, sugar beet, corn, vegetables, potato, forage plants comprise the major proportion.

Farmed Area by Crop Type

Area. thousand ha Crop 2002 2003 2004 2005 2006

Cereals. total 228,596 215,127 215,390 233,455 239,146Including wheat 169,157 142,890 130,320 147,874 150,973Oat 33,276 45,035 54,047 56,531 60,131Corn 24,002 25,701 29,223 27,824 26,573Others 2,161 1,501 1,800 1,226 - Sugar beet 22,437 28,318 22,528 11,875 12,961Oil -bearing plants 7,554 15,192 25,910 18,335 16,294Potato 6,479 9,481 11,730 10,938 10,726Vegetables. total 13,892 16,941 19,306 18,954 19,539Melon and water-melons 1,419 2,517 2,188 2,045 2,415Fruits and berries 11,524 8,945 8,951 8,947 - Grape 2,473 2,032 2,032 2,032 - Source: National Statistical Committee. Kyrgyz Republic 33. Animal husbandry is an important branch of agriculture in Chuy Oblast. Share of animal husbandry in structure of agricultural gross production is 40%. Taking into account areas, occupied by mountain pastures, animal husbandry is a key component of agricultural production. Natural and climatic conditions of the Oblast is conducive for developing all the branches of animal husbandry and producing cheap, environmentally clean goods. 34. The agricultural reform in Kyrgyz Republic resulted in reducing number of state and collective entities and increasing (peasant’s) farms. The leading role in agriculture belongs to the private entities (93.2%). The state owned entities comprise 5.6%, and those of communal ownership are 1%. Private ownership is more than 370,000 persons or 84,000 families. As a result, 49.2% of total population of Chuy Oblast became owners of agricultural plots. Average area of a peasant farm’s land plot is 12.3 ha. In 2006, there were more than 35,648 farms constituting 252,606 ha of agricultural lands. 35. At the national level, poverty level is decreasing although still high: 50% in 2003 down to 43% in 2005. In 2008, poverty level was 44.4% that is 2,213,000 people, or 412 600 families.

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Poverty Level

0

10

20

30

40

50

2003 2004 2005

PoorOf them extremely poor

Source: National Statistical Committee of the Kyrgyz Republic, 2007. Social Trends. 2007.

36. Poverty in the country is still mainly rural phenomenon: about three-quarters of all the poor population lives in rural areas. Oblast-wise, Batken Oblast (60%) was the poorest, followed by Djalal-Abad and Osh Oblasts (56% each).3 Chuy Oblast with it rich agricultural production as well as its advantage of being close to the capital city of Bishkek has one of the lowest poverty incidence.

Poverty Level and Extreme Poverty Level by Provinces (2005)

010203040506070

KR IK DA NR BKOsh TL Chu

i

Bishke

k

Poor

Of them extremelypoor

Source: National Statistical Committee of the Kyrgyz Republic, 2007.

E. CONSULTATION, PARTICIPATION, AND DISCLOSURE 37. Public consultations were conducted with the populations in the affected areas as shown below.

Public Consultation Records

Location Date Number of Participants Moscow District, Belovodskoe 7 July 2010 12 Alamudun District, Lebedinovka Village 8 July 2010 12 Sokuluk District, Sokuluk Town 8 July 2010 22 Chui District, Chui Village 9 July 2010 7 Kemin District, Kemin Village 12 July 2010 45

38. The consultation focused in the areas where OPGW is expected to be installed, since it is the only activity with direct impact to the population in the form of possible temporary crop loss during stringing.

3 Ibid. Acronyms used: KR – Kyrgyz Republic, DA –Djalal-Abad, IK-Issyl-Kul, NR – Naryn, BK – Batken, TL- Talas.

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39. The Project was generally supported, and no substantial comments were made on the environmental impact. Most comments were on the possible crop loss during the stringing activity and the method of compensation. 40. Further consultation will be conducted at the detailed design stage when the exact location of the impact from OPGW stringing is confirmed. Turnkey contractor and NEGK will be mandated to:

(i) Disclose project details (nature of works, expected impact, mitigation measures, duration of works, etc) in every oblast where substation works are implemented and where underground fiber cables will be installed;

(ii) For the stringing of OPGW, NEGK will hold public consultations with the affected people and with community groups. The detailed design shall be made based on discussions held during public consultations, and the LARP shall be prepared accordingly.

41. Disclosure of the LARP to the APs shall be done both in Russian and Kyrgyz language, as well as in English for ADB’s review and endorsement. LARP monitoring reports shall also be disclosed to the APs. F. COMPENSATION, INCOME RESTORATION, AND RELOCATION 42. The only impact expected from the Project is crop loss from the OPGW stringing activities. The activity will only take place for a few days and there will be no long-lasting impact to the productivity of the land. Therefore, compensation is expected only for loss of crops at market value. Income restoration and relocation are not expected. 43. The compensation procedure as stipulated in the Decree of the Government of the Kyrgyz Republic “On Approval of Provisional Norms of Cost to Compensate Losses of Agricultural Production Associated with Agricultural Lands Withdrawal to be used for Non-agricultural Needs,” 1998, #66 (in wording of the document as of 19 May 2009, #310). G. GRIEVANCE REDRESS MECHANISMS 44. During the course of Project implementation, it is possible that unanticipated impacts occur and/or the mitigation measures are not properly taken. In order to resolve the problem in a timely and effective manner, and to guarantee the implementation to be carried out smoothly, an open and effective appeal channel is required. The appeals for environmental concerns should be free of charge and all expenses incurred shall be paid from the Project contingencies. The grievance redress mechanism is shown below.

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Grievance Redress Mechanism

Affected Person

Grievance

District Level NEGK Staff/local council and

Not Redressed

Resolve with implementation consultant

Not Redressed

Appeal to PIU

Appeal to NEGK

Not Redressed

Appeal to Appropriate Court Appeal under ADB’s Accountability Mechanism

Redressed

Through NGOs

Redressed

Redressed

Not Redressed

G r

I e v

a n

c e

R

e d

r e

s s

C o

m m

I t t

e e

Redressed

ADB = Asian Development Bank; NEGK = National Electric Grid of Kyrgyzstan; NGO = nongovernmental organization; PIU = project implementation unit of NEGK.

H. INSTITUTIONAL ARRANGEMENTS AND IMPLEMENTATION 45. There are several institutions involved into the matters related to land: Gosregistr (State Agency on Registration of Estate Property Rights under the Government KR) with its district branches, Ayil Okmotu (AO, local governments), Ministry of Agriculture, Irrigation and Food Industry, local communities, and locally elected councils. NEGK, as the executing agency, has the overall responsibility to ensure implementation and funding of all LAR-related tasks. Within NEGK, the Safeguard Specialist of the Project Implementation Unit (PIU) will be responsible to ensure that the LARP is prepared by the turnkey contractor in accordance with the LARF, and that the LARP is implemented in full before installation works begin in the field. The PIU Safeguard Specialist will be supported closely by the Safeguard Specialist of the Project Management Consultant team. LAR-related cross-agency/inter-departmental coordination will also be handled by the Safeguard Specialists. 46. For the discussion and determination of compensation, it is common practice in the Kyrgyz Republic for an “ad-hoc commission” to be established. Representatives of Gosregistr, Ministry of Agriculture, AO, community leaders, elected councils, and NEGK will constitute the commission. For the Project, the turnkey contractor should also be involved, and the project management consultants will also participate as observers.

15

Agencies Responsible for Implementation of LARP

No. Activity Agency Responsible 1 Appointing Safeguard Specialist in PIU NEGK (PIU)

2 Hiring Safeguard Specialist consultant (as a member of the Project Management Consulting team)

NEGK (PIU)

3 Ensure conduct of DMS and preparation of LARP are included in turnkey contract’s bidding document, and the same is included in the turnkey contractor’s contract.

NEGK (PIU) and Project Management Consultants

4 DMS and drafting of LARP in accordance with LARF. Turnkey contractor

5 Baseline data collection for monitoring purposes NEGK (PIU) and Project Management Consultants

6 Supervision of DMS, LARP preparation and determination of fair compensation.

Ad-hoc commission comprising Gosregistr, local government, community leaders, and NEGK (PIU); and project management consultants.

7 Review and Approval of LARP NEGK (PIU) and then ADB

8 Payment of compensation NEGK

9 Supervision of compensation payment Ad-hoc commission comprising Gosregistr, local government, community leaders, and NEGK (PIU); and project management consultants.

10 Notify construction starting date to APs NEGK (PIU) and project management consultants

11 Hand over compensated land to turnkey contractors for OPGW stringing

NEGK (PIU) and project management consultants

12 Beginning of installation Turnkey contractor

13 Internal monitoring and reporting NEGK (PIU) and project management consultants

47. As the anticipated impact is relatively minor, the PIU is expected to (i) supervise the detailed measurement survey (DMS) by the turnkey contractor, and (ii) confirm full implementation of the LARP.

16

Flowchart on Preparation of LARP

I. RESETTLEMENT BUDGET 48. The actual resettlement budget (crop compensation budget) will be calculated by the turnkey contractor based on its detailed design and temporary works plan. At this stage, $500,000 is being earmarked for crop compensation based on the following estimate.

17

Estimated Required Land Area for OPGW Stringing Activities

Length of OPGW

Interval of Stringing

Number of Work Space/Access a

Required Work Space Area per

Location

Required Access per

Location Total Affected Area

510 km 3 km 170 2,500 m2 (50m x 50 m)

1,000 m2 (5m x 200m)

600,000 m2 (60 ha)

a The calculation assumes that all towers are located in agricultural land to be conservative. In reality, some towers will be on barren land or on pasture land. The assumption is conservative since compensation for crop loss is higher than for pasture land.

Source: ADB estimates.

Estimate Resettlement Budget

Total Estimated Compensation Unit

compensation for land a

Unit compensation

for crops b Crop

Yield b Compensation

per hectare Total

Affected Area Local

Currency Dollar

Equivalent c KGS

2,070,000 $45,000 KGS 13,500/ha KGS 7.5/kg 2,800

kg/ha KGS 34,500/ha 60 ha

With 10% Contingency = $50,000

a Assuming unit compensation rate for the most expensive class of soil type. b Assuming wheat which is currently the most expensive and extensively grown crop in the region. c Exchange rate: $1 = KGS 46.0. Source: ADB estimates. 49. Compensation costs will be provided by NEGK. All land acquisition. Compensation, relocation rehabilitation of income and livelihood will be considered as an integral component of Project costs. NEGK will keep a provisional budget in its annual plan for LAR costs. J. MONITORING AND EVALUATION 50. Internal monitoring will be carried out routinely by the PIU. The PIU will record progress in compensation payment and prepare monitoring report to ensure that the implementation of the LARP has produced the desired outcomes. Such monitoring results will be documented in the quarterly progress report prepared by the PIU For submission to ADB. 51. The PIU will also prepare semi-annual monitoring reports that describe the progress of the implementation of the LARP and any compliance issues and corrective actions. The cost of the internal monitoring is shouldered by NEGK. 52. Given the minor level of impact, external monitoring is not deemed necessary. However, ADB review missions will confirm adherence to ADB’s Safeguards Policy Statement. In order to document the impact of the LAR impact and compensation on the socioeconomic status of the APs, the PIU, with the support of the Safeguard Specialist of the project management consulting team, will collect baseline information prior to installation works, such as:

(i) Socioeconomic conditions of the APs in the pre-resettlement period; (ii) Communications and reactions from APs on entitlements, compensation, options,

alternative developments and relocation timetables etc.; (iii) Changes in housing and income levels; (iv) Rehabilitation of squatters; (v) Valuation of property; (vi) Grievance procedures; (vii) Disbursement of compensation; and (viii) Level of satisfaction of APs in the post resettlement period.