Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date 23 Jun 2006
PDS Updated as of 21 Oct 2013

Project Name Liaoning Environment Improvement Project
Country China, People's Republic of
Project/Program Number 36362-013
Status Approved
Geographical Location Liaoning Province (Benxi, Fuxin, Liaoyang, and Yingkou)
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector and/or Subsector Classification Energy
/ Energy Efficiency and Conservation
Thematic Classification Environmental sustainability
Gender Mainstreaming Categories No gender elements

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Loan2112Ordinary capital resources56,700
Counterpart 60,260
TOTAL US$ 116,960

Safeguard Categories

For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories

Environment B
Involuntary Resettlement B
Indigenous Peoples B

Summary of Environmental and Social Issues

The Project has substantial environmental benefits resulting from energy efficiency improvements, reduction in greenhouse gas emissions, and reduction in emissions from coal burning. EA will ensure that any adverse environmental impacts arising from the construction and operation of the project facilities will be minimized by implementing the mitigation measures as identified in the IEE and SIEE. The regional air quality will improve with the closure of small, inefficient, coal-fired boilers, more efficient gas transmission and distribution systems, and reduced coal use. The results of environment monitoring during the project implementation and first two years of operations are reported to ADB by the EA through its quarterly progress reports and bi-annual environmental monitoring reports. The Project is composed of 7 subprojects. Only the CBM/CMM subproject involves some minor land acquisition and temporary land use impact. A resettlement plan was prepared for this subproject. The plan is designed to ensure that the affected people will be better off as a result of the Project. The compensation of the permanent land loss is based on the Land Administration Law of the PRC (1998). A resettlement information booklet was distributed to all affected households in November 2003. The PIA for the CBM/CMM subproject is fully responsible for implementation, financing and monitoring of land acquisition, compensation, and rehabilitation. PIA will ensure that all affected households/persons are compensated in a timely manner and conduct the activities in accordance with the requirements set in the resettlement plan. The implementation of the resettlement plan is reported to ADB by the EA through its quarterly progress reports.

Environmental Aspects
The Project has substantial environmental benefits resulting from energy efficiency improvements, reduction in greenhouse gas emissions, and reduction in emissions from coal burning. EA will ensure that any adverse environmental impacts arising from the construction and operation of the project facilities will be minimized by implementing the mitigation measures as identified in the IEE and SIEE. The regional air quality will improve with the closure of small, inefficient, coal-fired boilers, more efficient gas transmission and distribution systems, and reduced coal use. The results of environment monitoring during the project implementation and first two years of operations are reported to ADB by the EA through its quarterly progress reports and bi-annual environmental monitoring reports.
Involuntary Resettlement
The Project is composed of 7 subprojects. Only the CBM/CMM subproject involves some minor land acquisition and temporary land use impact. A resettlement plan was prepared for this subproject. The plan is designed to ensure that the affected people will be better off as a result of the Project. The compensation of the permanent land loss is based on the Land Administration Law of the PRC (1998). A resettlement information booklet was distributed to all affected households in November 2003. The PIA for the CBM/CMM subproject is fully responsible for implementation, financing and monitoring of land acquisition, compensation, and rehabilitation. PIA will ensure that all affected households/persons are compensated in a timely manner and conduct the activities in accordance with the requirements set in the resettlement plan. The implementation of the resettlement plan is reported to ADB by the EA through resettlement monitoring report and its quarterly progress reports.
Indigenous Peoples
The Project will benefit all urban residents regardless of their ethnicity, however ethnic minorities will also benefit proportionally. There are about 401,760 (or 15% of total project beneficiaries) minority persons, including Hui, Mongolian, Manchurian, Korean, and Xibo, who will benefit from the increased and improved gas and central heating supplies. No further measures are required to safeguard ethnic minorities. A few Mongolian and Hui households will be affected by the land acquisition for the Project. Particular attention and special provisions will be paid to them to ensure that their interests, rights , and sociocultural customs are protected. These provisions are presented in the resettlement plan.

Stakeholder Communication, Participation and Consultation

During Project Design
Consultations with stakeholders, including various levels governments, implementing agencies, and beneficiaries were undertaken.
During Project Implementation
Consultations with stakeholders, including various levels governments, implementing agencies, and beneficiaries were undertaken.

Description

The long-term goal of the Project is to support environmental improvement in Liaoning Province. The main objectives of the Project are: (i) improvement in efficiency and reliability of gas and central heating supply and closure of small coal-fired boilers, and (ii) CMM and CBM production and commercial utilization. The Project includes the following components: (i) Part A: CBM/CMM development; (ii) Part B: gas distribution improvement; (iii) Part C: city central heating supply, and (iv) Part D: institutional reforms and corporate governance improvement.

Project Rationale and Linkage to Country/Regional Strategy

Part A of the Project is designed to utilize CBM/CMM to reduce GHG emissions and improve coalmine safety. The gas distribution systems owned and operated by Fushun Gas Company and Benxi Gas Company are inefficient with high distribution losses. They are also dangerous hazardous as the pipelines are aged and often cause explosion. To address these problems, Part B of the Project will rehabilitate Fushun and Benxi Gas Company's gas distribution systems to reduce distribution line losses, improve operation safety and supply gas to additional households to help reduce coal consumption. Part C of the Project will improve environmental quality by building efficient and large boilers to facilitate closing the 412 existing small coal-fired boilers. Part D of the Project includes three areas: (a) restructuring of the project implementing agencies (PIAs), (b) institutional strengthening and training, and (c) a study to assist the PIAs to implement the central heating tariff reforms and assess the options for the private sector participation. The objectives for ADB's operations in the PRC include: (i) promote equitable and inclusive growth; (ii) make markets work better; (iii) foster regional cooperation; and (iv) promote environmental sustainability, which includes encouraging the use of clean production technologies and renewable energy etc. Methane, part of natural coal composition, is released into the atmosphere from coal mine operations. It is estimated that the coal mines in Liaoning released about 1.2 billion cubic meters of methane into the atmosphere in 2003, a figure expected to reach 2.0 billion cubic meters by 2010. Methane, when released into the atmosphere, is about 21 times more potent as a greenhouse gas than carbon dioxide. In addition, coal mine safety is a major concern in the PRC, which reported deaths of 6,900 miners in 2002. Overall, the Project is consistent with ADB's operational strategy in the PRC and was listed in ADB's Country Strategy and Program (2004-2006). The Project will support the government of Liaoning province (GLP) in aiming to improve environmental quality and coal mine safety, and to ensure that the poor have sufficient gas and central heating.

Development Impact

Environmental improvement in Liaoning Province.

Project Outcome

Description of Outcome
Improvement in efficiency and reliability of gas and central heating supply
Progress Towards Outcome
Progress has been made toward outcome.

Outputs and Implementation Progress

Description of Project Outputs
1. Increased CMM/CBM production and utilization 2. Rehabilitated and expanded gas distribution systems 5. Implemented assistance programs for the poor households 3. Augmented central heating systems to facilitate closure of small inefficient coal-fired boilers 4. Developed institutional and financial tariff reform action plan, and privatization plan
Status of Implementation Progress (Outputs, Activities, and Issues)
Completed. Completed. Completed. Completed. Completed.
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2006 Jun 23
Consulting Services
The Contract for consulting services was signed between the Project Management Office and H&J, Inc. (the Consultant) on 1 June 2006. The international and domestic consultants were mobilized on 26 June 2006. The Consultant provides consulting services on (i) project construction supervision; and (ii) institutional strengthening. Domestic training focusing on project administration, contract management, environment, financial management, procurement, disbursement, project completion report, and construction safety were organized in 2007 and 2008. Training sessions on preparation of completion report and operational experience sharing among Project Implementing Agencies under central heating supply component were held in 2009. The first overseas training was undertaken in 2006 and the second overseas study tour was conducted in November 2009. On-the-job trainings were provided to staff from the Project Implementing Agencies on the preparation of the project completion report, construction and operation safety, and the preparation of construction progress reports and environmental monitoring reports in 2010. An overseas study tour for delegation from both the Liaoning Provinical Finance Bureau and the Project Manangement Office were organized in July 2010 with a purpose of building capacity and knowledge transfer on district heating, energy efficiency, financial management, and corporation organization and management.
Procurement
30 person-months of international consulting services and 170 person-months of domestic services will be provided to assist GLP with project implementation including its review of the draft tender documents and its evaluation of the bids received, and monitoring and evaluation of the project impact. Additional 15 person-months of international consulting services and 38 person-months of domestic consulting services will be provided for implementing institutional reforms and facilitating implementation of heating tariff reforms. All consultants will be selected and engaged in accordance with ADB's Guidelines on the Use of Consultants and other arrangements for the selection and engagement of domestic consultants. GLP requested ADB to approve advance recruitment and retroactive financing of the consulting services.
Procurement and Consulting Notices
http://www.adb.org/projects/36362-013/business-opportunities

Timetable

Concept Clearance
Fact-finding 30 Oct 2003 to 21 Nov 2003
Management Review Meeting 11 Feb 2004
Approval 25 Nov 2004
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Loan 2112 25 Nov 2004 26 May 2005 16 Nov 2005 30 Sep 2009 30 Sep 2011 30 Dec 2011

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
16 Apr 2014 Loan 2112 52,421 0 93.00%
Cumulative Disbursements
16 Apr 2014 Loan 2112 56,431 0 100.00%

Status of Covenants

Covenants are categorized under the following categories—audited accounts, safeguards, social, sector, financial, economic, and others. Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory—all covenants in the category are being complied with, with a maximum of one exception allowed, (ii) Partly Satisfactory—a maximum of two covenants in the category are not being complied with, (iii) Unsatisfactory—three or more covenants in the category are not being complied with. As per the 2011 Public Communications Policy, covenant compliance ratings for Project Financial Statements apply only to projects whose invitation for negotiation falls after 2 April 2012.

Approval No. Category
Sector Social Financial Economic Others Safeguards Project Financial Statements
Loan 2112 Satisfactory Satisfactory Satisfactory Satisfactory

Contacts and Update Details

Responsible ADB Officer Xinjian Liu (xinjianliu@adb.org)
Responsible ADB Department East Asia Department
Responsible ADB Divisions PRC Resident Mission
Executing Agencies Government of Liaoning Province
Mr. Teng Da

Links

Project Website http://www.adb.org/projects/36362-013/main
List of Project Documents http://www.adb.org/projects/36362-013/documents