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China: Yunnan Kunming Changshui Airport Expansion and Green Development Project

SUMMARY

STATUS
Approved
MEMBER
China
SECTOR
Transport
E&S CATEGORY
Category A
PROJECT NUMBER
000660

FINANCING

APPROVED FUNDING
USD500 million
FINANCING TYPE
Sovereign

TIMELINE

CONCEPT REVIEW
September 28, 2022
APPRAISAL REVIEW / FINAL REVIEW
April 26, 2023
FINANCING APPROVAL
August 30, 2023
LATEST FIELD VISIT
February 2025

OBJECTIVE

To support the green development of an international hub airport in the southwest of China and improve air connectivity to Southeast and South Asia regions.

DESCRIPTION

The major components proposed to be funded by AIIB loan will comprise:

Component 1: Construction of Airside Infrastructure in the Eastern Part of the Airport;

Component 2: Construction of Aprons and associated lighting system and facilities around Terminal 2;

Component 3: Electrified service vehicles with charging piles, ground power unit and noise monitoring equipment;

Component 4: Technical Support and Capacity Building.

ENVIRONMENTAL AND SOCIAL INFORMATION

Applicable Policy and Categorization. AIIB’s Environmental and Social Policy 2024 (ESP), including the Environment and Social Standards (ESSs) and the Environmental and Social Exclusion List, applies to this project. ESS 1 (Environmental and Social Assessment and Management) and ESS 2 (Land Acquisition and Involuntary Resettlement) are triggered due to the additional land requirements of the project and its Associated Facilities (AFs). ESS 3 (Indigenous Peoples) does not apply to the project as the project-affected area does not contain distinct social or cultural groups possessing the characteristics as defined by ESS 3. The project has been assigned Category A, given the potential Environmental and Social (E&S) impacts and risks related to large-scale construction, including substantial adverse noise impacts. 

Environmental and Social Instruments. The Client prepared an Environmental Impact Assessment (EIA) and Social Stability Risk Assessment (SSRA) report in the Chinese language in line with national legislation and requirements, which were approved by the Yunnan government authorities in December 2022 and July 2022, respectively. The SSRA concluded that the Social Stability Risk for this overall Project is “low.” All project activities and identified AFs have been assessed in accordance with the ESP. An Environmental and Social Impact Assessment (ESIA), Environmental and Social Management Plan (ESMP), and a Stakeholder Engagement Plan (SEP) have also been prepared to address gaps with respect to AIIB's ESP in the assessment and mitigation of potential E&S impacts and risks. An Environmental and Social Audit Report (ESAR) for the existing operations of Changshui Airport has been prepared and an Environmental and Social Action Plan (ESAP) has been agreed to implement the corresponding mitigation measures. In addition, an Abbreviated Resettlement Plan (ARP) was prepared to address land acquisition and resettlement with the project footprint, while a Resettlement Planning Framework (RPF) was prepared for project activities for which details are not yet fully identified or for which designs are not yet finalized. This RPF also addresses the noise-induced relocation aspects. 

Environmental Aspects. The major environmental impacts related to air transport are cumulative noise impacts, solid waste (including hazardous waste) and wastewater. Integrated Biodiversity Assessment Tool screening identified three Protected Areas within a 50-kilometer radius of the project area, including the Dianchi Scenic Area located one kilometer from the project site. However, based on the fauna surveys and bird monitoring data from the ESIA, there is no indication of significant migratory bird presence that would affect airport expansion or future operations. During the construction phase, the project will involve conventional construction-related risks and impacts, including dust emissions, water contamination, noise, removal of construction debris and similar effects. Based on national regulations, new construction around the airport will be limited and will include noise-insulation measures to limit indoor exposure to operational aircraft noise. The project's main operational E&S risk include noise impacts on residential areas and sensitive receptors close to the airport. Corresponding mitigation measures, based on a balanced approach, are expected to minimize potential impacts on residents’ health and represent an improvement over the current situation. YAG has committed to implementing an action plan with local authorities based on a Noise Management Framework (NMF), which applies the International Civil Aviation Organization’s Balanced Approach to Aeronautical Noise Management. All identified impacts, gaps and mitigation measures will be managed through the implementation of the ESMP and ESAP, as well as in accordance with good international practice. 

Social Aspects. Key social risks associated with the project relate to the physical and/or economic displacement resulting from land acquisition and noise-induced physical relocation. Of the 213.82 mu land to be acquired, only 4.05 mu is cultivated land, while the majority of the remaining land comprises collective ecological forest land. It is estimated that land acquisition will affect 13 people from three families. The land acquisition process undertaken in 2015 was reviewed during appraisal through land-use due diligence to identify any outstanding legacy issues. The ESIA identified legacy issues related to noise impacts, which will be managed through the ESIA, the NMF and the RPF. These include mitigation measures such as soundproof windows, noise monitoring systems and the institutional arrangements required to implement resettlement-related mitigation actions. The land acquisition process for the project and its AFs has been evaluated, and appropriate mitigation measures, primarily aimed at restoring and/or improving the livelihoods of project-affected people have been implemented through the ARP. In 2025, an additional 62.43 mu of land under collective ownership was acquired, affecting 48 people from 17 households. An abridged RAP/completion statement was disclosed by YAG and AIIB. 

Gender. YAG has standardized the Special Contract for the Protection of Rights and Interests of Female Employees, which guarantees the rights and interests of labor, personal and educational development of female employees. Measures for the prevention of sexual harassment in the construction and operation processes has been strengthened under the ESMP. In addition, risks of gender-based violence and related social tensions due to labor influx were evaluated and informed the preparation of corresponding mitigation measures, such as the Gender Action Plan, which has been developed to ensure women’s engagement and development. 

Stakeholder Engagement and Information Disclosure. During project preparation, consultations on E&S impacts were conducted with communities and project-affected people around the project areas. These included meetings with low-income residents, farmers, women, ethnic minorities, village committee and government representatives. A further community participation plan during the project implementation stage was designed and included in the updated SEP. A coordination and consultation mechanism for E&S activities was established between the steering committee, the provincial government, YAG and the Dianzhong New Area Management Committee. The SEP provides a detailed plan for this process, which will also disclose the ESP and AIIB’s Project-Affected People’s Mechanism (PPM) in an appropriate manner. The following E&S instruments have been disclosed on the YAG and AIIB websites since April 10, 2023: (a) ESIA, ESMP, SEP,  RPF, ESAP and their non-Technical Summaries (NTS) in English and Chinese; and (b) national EIA (in Chinese), excluding sensitive information, where applicable. 

Project Grievance Redress Mechanism (GRM). The existing public and employee complaints mechanisms were reviewed and based on the review, a multi-tier project-level GRM, along with a separate mechanism to address workplace complaints and concerns, has been established in accordance with the requirements of AIIB's ESP. Locally appropriate public consultation and disclosure processes have been used to disseminate information on the GRM as well as AIIB’s Project-affected People’s Mechanism (PPM). 

Monitoring and Reporting Arrangement. YAG as the Project Implementing Agency (PIA), will be responsible for overall coordination, supervision and monitoring of the project’s compliance with E&S requirements. The PIA will submit regular E&S monitoring reports to AIIB during project implementation based on the agreed format. During the first year of construction, the PIA shall submit quarterly reports, and subject to E&S performance and agreement with AIIB, semi-annual reports will be submitted thereafter. Third-party E&S monitoring and reporting will be conducted at least once per year during the project period. A third-party E&S Audit will be conducted before the Project Closing Date. AIIB will carry out field-based E&S supervision during project implementation.

PROJECT TEAM LEADER

Asian Infrastructure Investment Bank
Yaxin Yan

Investment Officer

yaxin.yan@aiib.org

BORROWER

Wang Jikang

Officer, Department of International Economic and Financial Cooperation

wangjikang@mof.gov.cn

 

IMPLEMENTING ENTITY

Yuanjun Zhan

Financing Director, Yunnan Airport Group Co., Ltd.

yag_aiib@163.com

 

PROJECT DOCUMENTS