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Sri Lanka: Sampur - Kappalthurai Transmission Infrastructure Development Project

SUMMARY

STATUS
Approved
MEMBER
Sri Lanka
SECTOR
Energy
E&S CATEGORY
Category B
PROJECT NUMBER
000921

FINANCING

APPROVED FUNDING
USD22 million
FINANCING TYPE
Sovereign

TIMELINE

CONCEPT REVIEW
January 23, 2025
APPRAISAL REVIEW / FINAL REVIEW
July 17, 2025
FINANCING APPROVAL
September 16, 2025

OBJECTIVE

To enhance power evacuation capacity by constructing a transmission network from Sampur to Kappalthurai, enabling integration of potential renewable energy sources from northeastern Sri Lanka into the national grid.

DESCRIPTION

The project involves building a new Grid Substation (GSS) in Sampur, a 38-kilometer (km), 220-kilovolt (kV) double-circuit transmission line from Sampur GSS to Kappalthurai GSS and extending two 220kV line bays at Kappalthurai GSS. CEB aims to create the necessary infrastructure to transmit power from the potential future renewable energy plants, including planned Sampur Solar PV plant. The Government of Sri Lanka (GoSL) targets generating 70 percent of its electricity from renewable sources by 2030. The Renewable Energy Resource Development Plan 2021-2026 indicates that Sampur, Trincomalee region has the potential for around 300 MW of solar power generation. To capitalize on this potential, the CEB, with financial backing from AIIB, plans to expand the transmission network in the region.

The following activities are planned in the project scope:

  1. Construction of 220(132)/33 kV GSS at Sampur and 2x220 kV transmission line bays at Kappalthurai GSS (initially charged at 132 kV); and
  2. Construction of around 38-km 220kV double circuit transmission line (initially charged at 132kV) from Kappalthurai to Sampur.

ENVIRONMENTAL AND SOCIAL INFORMATION

Applicable Policy and Categorization. AIIB's Environmental and Social Policy (ESP), including the Environmental and Social Standards (ESSs) and the Environmental and Social Exclusion List (ESEL), applies to this Project. ESS1 (Environmental and Social Assessment and Management) and ESS2 (Land Acquisition and Involuntary Resettlement) apply, while ESS3 (Indigenous Peoples) is not applicable. The Project is classified as Category B following the Environmental and Social Framework (ESF), as there are a limited number of potentially adverse environmental and social (ES) impacts, where impacts are not unprecedented or irreversible and can be managed through operational Good International Industry Practice (GIIP). 

Environmental and Social Instruments. The client has prepared a national-compliant Initial Environmental Examination (IEE) which had been conducted in 2023. In addition, an Environmental and Social Impact Assessment (ESIA) report has been prepared based on requirements provided by the Bank in accordance with ESF, including an Environmental and Social Management Plan (ESMP). These instruments include measures that ensure management of ES risks and impacts of the Project, consistent with the AIIB’s ESP and ESSs. 

Environment Aspects. During construction stage, the potential environmental risk and impacts that are anticipated are temporary and includes: i) surface and groundwater pollution, ii) air emission, including accumulation of fugitive dusts and exhaust fumes, iii) noise and vibration, iv) accumulation of waste, e.g., dredged soil, v) topsoil erosion, vi) loss of flora species, and vii) disturbance to mammals and avian species. Impacts during operation include possible collision to avifauna species and disturbance to mammals e.g., Asian Elephants, among others. Critical Habitats Assessment (CHA) was carried out as part of the ESIA and concluded that CH is triggered for one mangrove grass species[1] and three fauna species, Asian Elephant, Sri Lanka Worm Snake, and Malcolm's Worm Snake, within the project’s Area of Analysis[2]. With this, the Project proposed to conduct an avifaunal survey during the migratory season, where the necessity for additional measures will be identified based on the results. Moreover, the ESIA provided an ESMP that addresses the risks and impacts relating to the above through a physical, ecological and critical habitat assessment. 

Social Aspects. The total length of the proposed transmission line from Kappalthurai GSS to Sampur GSS is approx. 38 Km. The standard width of the right-of-way (RoW) of the transmission line is 35 meters i.e. 17.5 m to either side from the center of the transmission conductor. The total land area under the RoW will be 325.2 acres (131.6 hectares). CEB requires the rights to the easement (RoW) of the transmission line but will not acquire this land for the RoW. CEB will allow the landowners to use the land for the same purpose for which they have been using the land, subject to certain conditions. CEB has already obtained the wayleave clearance from the landowners, and hence no acquisition is required. Standing trees to be removed to clear the RoW for the installation of transmission towers and the conductors, and the land area required for the installation of transmission towers will be compensated by CEB to their respective owners. Damage to any crops during construction work of the Project will also be compensated by CEB to their respective farmers. CEB, however, will endeavor to minimize such crop damages and income losses by avoiding peak cultivation seasons or scheduling the construction work during off seasons. In addition, as part of its corporate social responsibility (CSR), CEB will also support a replanting program as part of restoration and rehabilitation assistance. CEB, through its contractors, will also offer temporary employment for the affected persons in the project’s construction work and will provide additional cash assistance to vulnerable households. 

Associated Facility. The proposed Sampur Solar IPP is identified as the primary associated facility to the transmission line. The power plant, proposed to be financed and implemented under a separate project under AIIB financing, is entirely dependent on the 220 kV transmission line for evacuating the generated electricity to the national grid. Only a due diligence analysis was conducted for the solar park as an associated facility, and no in-depth ES assessment was conducted under the present ESIA/ESMP. Potential ES risks associated with the solar park – such as vegetation clearance, land use change, dust and noise during construction, potential impacts on local biodiversity, and minor livelihood disturbances – will be considered as part of a standalone ESIA being planned for the Sampur Solar Park, which can also include an assessment of the cumulative impacts of other planned solar farms. While the solar park does not involve physical displacement, proper attention must be paid to temporary access restrictions and impacts on ecosystem services. The integration of this associated facility within an ESIA framework will ensure that both the generation and evacuation components of both these projects are planned, assessed, and managed holistically, thereby promoting environmental sustainability, social accountability, and operational efficiency throughout the Project lifecycles. 

Occupational Health and Safety, Labor and Employment Conditions. The key occupational health and safety (OHS) risks of the Project include working with electricity / contact with the transmission lines, lightning risk, manual handling injuries, working at heights and working in proximity to road traffic/ vehicular accidents. Workers are therefore required to have OHS training and adequate Personal Protective Equipment to manage and prevent risks. The ESMP, along with the Hazardous Identification and Risk Assessment attached to the ESIA, identifies the key risks and measures, where CEB commits to ensure strict guidance in following the measures proposed. Based on this, the Project proposed to establish OHS plan in line with Sri Lanka’s Factory Ordinance and the World Bank Group Environmental, Health, and Safety Guidelines, following GIIP. Overall, the ESMP has elaborated further providing measures to avoid and mitigate risks, including OHS, traffic, child abuse and gender-based violence/ sexual exploitation / sexual harassment, and labor and working conditions. 

Stakeholder Engagement, Consultation, and Information Disclosure. During the ESIA conducted for the Project, information related to tentative directions of the transmission line route of the Project, sites earmarked for the GSSs, land requirements, potential impacts of the Project, both positive and negative, and direct and indirect, entitlement policies and frameworks for compensation for the affected parties and grievance redress procedures were shared with affected persons during consultations. CEB has prepared a Stakeholder Consultation and Information Disclosure Plan and will continue their communications with the affected persons and other stakeholders and disclose information such as the valuation procedures, Project related impacts, specific entitlements of the affected persons, compensation procedures, grievance redress procedures and dates of the commencement of civil works. Moreover, the ESIA report has been disclosed in the official websites of the CEB and AIIB with summaries translated into Sinhala and Tamil languages. 

Project Grievance Redress Mechanism (GRM). The Project will establish a project-based GRM which is easily accessible to the aggrieved parties, transparent and accountable in grievance handling and responding while winning the confidence of the complainants. The GRM will consist of two-tiers. The first tier will be at the Project’s site level while the second tier will be at the PMU-level. The PMU of CEB will establish a clear set of procedures with specific time frames for grievance resolution at each level. Further, PMU with the guidance of ES safeguard officers assigned to the Project will conduct awareness raising programs to inform the Project-affected people on the role and functions of the GRM, grievance reporting procedures, time frames for grievance resolution at each level, the operational locations of the GRM and the details of contact persons, addresses and telephone numbers at each level of the GRM. Brochures and leaflets printed in Sinhala and Tamil languages covering the above information will also be distributed. In parallel to the project-based GRM established by CEB, aggrieved parties can also submit their grievances to the Divisional Secretary of the respective subproject area. The project-based GRM will not impede the opportunities that Project-affected people have to resort to the country’s legal system at any stage of the process. Apart from the above described two levels of GRM, contractors will also establish a GRM at site level (Workers’ GRM) which will exclusively address the issues and grievances of the labor teams. However, whenever necessary, the aggrieved laborers also have the choice of approaching the project-based GRM. 

Monitoring and Reporting arrangements. The PMU will be fully responsible for monitoring the Project's implementation and is expected to prepare progress reports semi-annually based on and agreed format highlighting progress on the implementation of ES plans. During implementation of the Project, the Bank will conduct regular field supervision missions to monitor progress. The Bank will also have virtual and in-person interactions with CEB and may engage the Bank's local consultants to conduct more frequent supervision, as required.

[1] Myriostachya wightiana, no common name, but sometimes called in India as Mangrove grass

[2] The Area of Analysis considered for ecological assessment is approximately 1km corridor along the proposed transmission line route, considering 500 m on each side corridor.

PROJECT TEAM LEADER

Asian Infrastructure Investment Bank

Raqib Ahmed Chowdhury

Investment Officer

raqib.chowdhury@aiib.org

BORROWER

Democratic Socialist Republic of Sri Lanka

Samantha Bandara

Director General, Department of External Resources, Government of Sri Lanka

samantha@erd.gov.lk

IMPLEMENTING ENTITY

Ceylon Electricity Board

Eng. (Prof.) K.T.M.U. Hemapala

Chairman, Ceylon Electricity Board (CEB)

chairmanceb@ceb.lk