Transboundary Joint Secretariat for the Southern Caucasustjs-caucasus.org/.../2012/09/TJS-Kazbegi-Assessment... · Kazbegi National Park Development November 2012 - 3 - will take

Transboundary Joint Secretariat

for the Southern Caucasus Promoting cooperation in nature conservation

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Disclaimer The opinions expressed in this report are those of the authors and do not necessarily reflect the opinions of the KfW Entwicklungsbank of Germany or of the Agency of Protected Areas of Georgia. These opinions are based on observations by the authors and on information obtained from the quoted documents and as provided by stakeholders that were interviewed during the mission. The derived conclusions and recommendations are particularly formulated for the purpose and objectives of this assessment. TJS disclaims all liability to any third party who may place reliance on this report.

Impact Assessment of Investments on Assessment Report Kazbegi National Park Development November 2012

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Disclaimer: Table of Contents A. Executive Summary................................................................................................... 1 B. Introduction ............................................................................................................... 7

B.1 Background ........................................................................................................... 7 B.2 The Objectives and Scope of the Assignment........................................................ 9

C. Methodology............................................................................................................ 10 D. Results of the Mission ............................................................................................. 11

D.1 Dariali Hydropower Project (DHPP) ..................................................................... 11 D.1.1 Present Situation.......................................................................................... 11 D.1.2 Findings from Meetings and Interviews ........................................................ 17 D.1.3 Potential Environmental Impacts and Risks ................................................. 19 D.1.4 Mitigation Measures and Monitoring............................................................. 20

D.2 Larsi Hydropower Plant ....................................................................................... 21 D.2.1 Present Situation.......................................................................................... 21 D.2.2 Larsi Impacts and Mitigation ........................................................................ 21

D.3 Khadistskali (/Kazbegi) Hydropower Plant ........................................................... 21 D.3.1 Present Situation.......................................................................................... 21 D.3.2 Khadistskali Impact and Mitigation ............................................................... 22

D.4 National Park Forest Land near Stepantsminda Proposal for Hotel Use .............. 22 D.4.1 Findings from Meetings and Documents ...................................................... 22 D.4.2 The Present Situation .................................................................................. 23 D.4.3 Impacts and Risks........................................................................................ 23 D.4.4 Recommendations ....................................................................................... 25

D.5 Natural Monuments as Compensation Areas....................................................... 25 D.5.1 Present Situation.......................................................................................... 25 D.5.2 Environmental Impacts................................................................................. 26

E. Impact on the Overall Objectives of German Financial Cooperation ........................ 28 F. Conclusions and Recommendations on Impact on Biodiversity Conservation.............. 29

F.1 Conclusions and Recommendations for Hotel Rooms Plans ............................... 30 List of Annexes Annex 1. Terms of Reference 32 Annex 2. Impact of investments on the LogFrame of the SPPA 36 Annex 3. Mitigation Implementation Plan 39 Annex 4. Relevant Regulations Establishing Kazbegi National Park 41 Annex 5. Itinerary 45 Annex 6. Persons Met 46 Annex 7. Work Plan 48 Annex 8. Document References 49 Annex 9. Debriefing Presentation (29 October in Tbilisi and 31 October in Frankfurt) 50 List of Figures Figure 1. Run-of-River Option for Dariali HPP 13 Figure 2. Proposed Project Headwork Infrastructure 14 Figure 3. Project Tunnel and Construction Activity 15 Figure 4. Main Tergi Gorge (view to south with Stepantsminda at the end) 16


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Figure 5. Water Flows in Tergi River with and without Dariali Project 16 Figure 6. Larsi Headworks under construction 21 Figure 7. Khadistskali River and Power Station 22 Figure 8. Photos of Stepantsminda National Park forest area and Rooms Hotel 24 Figure 9. Truso Travertines and Abano Mineral Lake 25 Figure 10. Sakhazinari Cliff Columns 26 List of Maps Map 1. Areas set aside for DHPP, other HPP locations, area considered by Rooms

and mitigation areas added to the Kazbegi National Park 2 Map 2. Land Excluded from the National Park for DHPP and Required by Rooms

Hotel 12 Map 3. Location of Rooms Hotel, Stepantsminda KNP Forest Area and Monastery

land 24 List of Tables Table 1. Impact Assessment of DHHP and Private Development Stepantsminda

Forest NR against Objectives & Outputs of German Financial Cooperation 5 Table 2. Impact Assessment of DHHP and Private Development Stepantsminda

Forest KNP against Objectives & Outputs of the Support Programme for Protected Areas 28

ABBREVIATIONS

APA Agency for Protected Areas BMZ German Federal Ministry for Economic Cooperation & Development CO2 Carbon Dioxide EIA Environmental Impact Assessment EMP Environmental Management Plan ENP Ecoregional Nature Protection Programme ha hectare IUCN International Union for Conservation of NatureKfW KfW Entwicklungsbank - German Bank for Reconstruction and

Development km kilometre km2 Square kilometre kW kilowatt KNP Kazbegi National Park DHPP Dariali Hydropower Plant HPP Hydropower Plant l litre m3/s cubic meters per second masl metres above sea level MoEP Ministry of Environment Protection and Natural Resources MW Mega Watt NGO Non Governmental Organisation PA Protected Area SPPA Support Programme for Protected Areas TJS Transboundary Joint Secretariat US$ US Dollar WWF World Wide Fund for Nature


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A. Executive Summary Background The German Federal Ministry for Economic Cooperation and Development (BMZ) supports economic, social and political development in the South Caucasus through the “Caucasus Initiative”. A significant part of BMZ’s Caucasus Initiative is the Ecoregional Nature Protection Programme (ENP) for the Southern Caucasus. Under the ENP BMZ finances through KfW three Financial Cooperation (FC) components: i) support programme for individual protected areas, ii) contributions to the Caucasus Nature Fund and iii) running of a “Transboundary Joint Secretariat” (TJS) for Nature Conservation in the Southern Caucasus. The FC financed Support Programme to Protected Areas (SPPA) aims to improve the management of natural resources and protected areas, and simultaneously improve living conditions of the adjacent communities. The activities are to be based on participatory approaches for management planning, biodiversity and nature conservation, and for socio-economic development. Financing and Separate Agreement for the SPPA is to be concluded with the Government of Georgia for implementing this programme. The Kazbegi National Park (KNP) will be one of the target Protected Areas, where boundaries will be redesigned for more effective biodiversity conservation, along with capacity building, preparing a management plan and socio-economic development activities. In 2011 the Government of Georgia singed an agreement with Dariali Energy Company to construct the new Dariali Hydro Power Plant (DHPP). The DHPP is being constructed at a site partially within and for other parts immediately adjacent to the Kazbegi National Park (KNP), north of Stepantsminda town. As construction activities are not allowed in protected areas, 20 ha of protected area was removed from the KNP. As compensation 339 ha of land have been added to the KNP. Early September 2012 it became known that an additional 47 ha is proposed to be removed from KNP for use by a new hotel. The removal of these areas and possible impact on biodiversity conservation has raised concerns on possible risks for achieving the SPPA objectives for the expanded KNP under the SPPA. KfW expressed these concerns to the Agency for Protected Areas (APA)1. Consequently, following consultations, APA requested that TJS employ the services of an international and a national environmental expert to assess the impacts of these developments on the KNP SPPA project. The Objectives and Scope of the Impact Assessment A ssignment The assignment was to assess the impact to the two areas of KNP affected (20ha for DHHP and 47ha for the Hotel site see Map 1) and to comment on the addition of the natural monument compensation areas on:

• the biodiversity conservation and nature protection objectives in the KNP project area (as described in the feasibility study), and

• on the objectives of the Protected Area development support provided by German Development cooperation within the context of the SPPA.

1 ) Responsible Agency for managing protected areas in Georgia


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Two other HPP projects in the Tergi gorge area with potential impacts on the KNP SPPA Project were found during the mission and these were also considered during the assignment. The project team of one international and one national environmental consultant was mobilised from 15th October to 2nd November 2012 to undertake the assessment; it worked in close liaison with the TJS team leader and TJS National Coordinator for Georgia. Map 1. Areas set aside for DHPP, other HPP location s, area considered by Rooms

and mitigation areas added to the Kazbegi National Park Methodology For the assessment, all relevant documents were reviewed, interviews and meetings with relevant stakeholders were arranged and organisations contacted. The Team travelled to Kazbegi area and made on-site assessments of the Dariali project and of the other related HPP projects. The KNP area adjacent to the new Rooms Hotel was visited along with the KNP compensation areas. The impacts were assessed, in particular as they relate to the objectives and outputs foreseen in the SPPA KNP development plan. Recommendations are formulated with particular emphases on identifying, where possible, opportunities for harmonious arrangements for development of the investment projects and KNP. A mitigation implementation plan with timing and responsibilities is attached to this report (Annex 3). Dariali Hydropower Project The DHPP project will have one weir/dam and one powerhouse, an alternative with the least impact on the environment and to the KNP. DHPP will generate 108 MW with 3 turbines and

Area considered by Rooms Hotel

Truso Travertines Natural Monument

Intake of Larsi HPP

Powerstation of Larsi HPP

Khadistskali River Source for Kazbegi /

Kahdistskali HPP

Alignment of tunnel, but actually not excluded


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will take 36 months to build. A work force of 300 is required for building the project; thereafter it will employ some 25 to 30 staff. The design flow for the project is 33 m3/s. Dariali Hydropower Plant Approval Process An Environmental Impact Assessment (EIA) was undertaken for the Dariali project in 2011 by Georgian firms Gamma Ltd and Stucky Caucasus. The EIA included consultations at Kazbegi Municipality, Stepantsminda and meets the requirements of Georgian EIA Regulations. The report is not to international EIA standard. In particular it is weak regarding the institutional arrangements and commitment for mitigation measures which are framed in the report only as "recommendations". The Ministry of Environment made its recommendation referred to as “Environmental Expertise Conclusion” on the Project on 28 November 2011 and the Ministry of Economy approved the Building Permit for Construction of Dariali on 30th November 2011. No actual Environmental Management Plan (EMP) was presented, but during the meeting with Dariali they were fully aware on the environmental recommendations on environmental flow and fish monitoring and had already contracted Gamma Ltd to implement the fish monitoring. Building work commenced immediately on the tunnel component. MoEP is responsible for monitoring Dariali Project and ensuring that mitigation recommendations in the EIA are followed.. National Park Land Affected by Dariali Hydropower Project Three small areas of land were removed from the KNP totalling 8.8 ha (not 20 ha). Two plots are on the right bank of the Tergi River downstream of Stepantsminda town; the land is required to build the first section of the water delivery system (a buried pipeline) and is taken from a small fragment area of the KNP (see Maps 1 and 2). These plots are dominated by Sea-buckthorn and provide winter range for the great rosefinch (Carpodacus rubicilla) and Güldenstädt’s redstart (Phoenicurus erythrogaster). The third plot will be used during tunnel construction and during HPP operations for a switchyard and transformers. This land is immediately alongside the main road and is between the road and mountainside. Main Project Impacts and Mitigation There will be construction impacts at the weir where a 150m temporary access road is required and drilling at three downstream sites. Correct disposal of drilling materials is one of the major issues in environmental management. Good practise and environmental management will be required to avoid water contamination when the river is in high flow and to ensure that rehabilitation of both sites takes place. MoEP is responsible for monitoring. The great majority of the workforce for construction activities is employed locally. The camp for the non-local workforce and for offices is 8.5 km away from Stepantsminda town in the downstream area and social impacts will be minimal. Impact on habitat for flora and fauna will be small and mostly short term. There will be a need to upgrade power lines in the Tergi valley. Upgrading will be restricted to the existing power line corridor and will have no additional environmental impact or on biodiversity conservation in the area. Once construction is finished, there is little visual impact from the project as most of the project components, including the powerhouse, are underground. There will only be need for land for the project sub-station and control room. The main potential long term impacts resulting from the project relate to reduced water in the 7 km section of the Tergi River between weir intake and the powerhouse with visual landscape impacts and loss of aquatic habitat. There is trout in the river and the DHPP weir will impede fish movement. There will


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be cumulative impacts especially on fish movements from the other projects both existing and proposed in the Tergi River system. DHHP will use a diversion weir that will allow flood events through the main gorge during peak flow season and which are responsible for the existing river landscape. Trout will form local populations and the main trout populations will still inhabit upstream parts of Tergi River. Mitigation and Monitoring

The EIA defines an environmental flow of 2 m3/s to be retained in the river. The river is

augmented by additional side stream flows below the weir and this level of environmental flow should be sufficient to provide for aquatic life. A fish bypass is included in design. There is a need to undertake baseline fish studies now, before construction of the weir, and during construction and operation there should be ongoing fish population studies, and monitoring of environmental flows sedimentation in the valley. Impacts (not mentioned in the EIA) are related to the Ecoregional Kazbegi Project Final Report that identified a bird habitat in the Tergi flood plain. Special steps need to be taken to mitigate impacts during construction to protect this habitat and to monitor this. MoEP will be responsible for monitoring and APA should take steps to develop plans to protect the bird habitat. Other HPP Projects The Larsi HPP (20 MW) is under construction just 100m below the DHPP tail race. The river Tergi is also dammed for hydropower purposes 5 kms downstream from the Dariali project in Russia (about 4 km from Larsi). A third HPP is proposed on the Khadistskali River which is a right bank tributary of the Tergi just downstream of the DHPP powerhouse; this will be an upgrade of the existing Kazbegi HPP (320 kW). The Khadistskali River side stream is in a beautiful gorge with a series of cascades. The cascades are surrounded by KNP on either side of the valley. The project will involve upgrading of existing Kazbegi HPP. A 1 km right bank road along the river has been upgraded and extended a further 300m recently by the Dariali/Larsi HPP contractor; it is intended to implement a 5 MW project in the small stream which will probably take most/all of the flow. There appears to be no EIA for the project and the KNP and APA is an important stakeholder. Taking all the stream flow will destroy scenic and aquatic habitat. At very least an environmental flow should be retained in this river. National Park Land near to Stepantsminda and Plans of the Rooms Hotel The private Rooms Hotel wants to acquire 47 ha of land constituting the Stepantsminda forest area which is a traditional use zone belonging to the KNP. The planted forest (pines) and the closeness of the area to the town result in little biodiversity value of the area. The area is used by tourists for walking and recreation. Local people graze their animals and gather fallen branches for firewood. The Rooms hotel has daily activities for its guest in the KNP including quad bike riding, which has impact. There is no agreement with the KNP for the quad bike uses. The Rooms Hotel has prepared detailed designs for development of the KNP forest area as a ski resort. There are also plans for chalets & a restaurant in the area. The monastery has already objected to loss of their privacy and the hotel has agreed to reduce the proposed extent of ski activity. The hotel management at site indicated the Hotel is open to discuss


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arrangements other than their outright ownership of the site and APA should take this up with the Hotel owners. Natural Monuments as Compensation Areas Three territories were added to the KNP on 16th March 2012 and are put forward by the Government as compensation areas for the land lost at Dariali and for the potential loss of the land at Stepantsminda. These areas were already designated as natural monuments and had protected status as general Government-owned land. They are now registered to APA and represent important additions to the KNP project area. Two of the added territories - the Truso Travertines (4.2 ha) and the Abano Mineral Lake (0.04 ha) are located in open grazing areas at a height of about 2000m. The two features are within 500m of each other. They can best be protected and managed by consolidating the features and incorporating a contiguous section of the Truso Valley section in the new KNP project area. The third territory, the Sakhazinari Cliff columns (331.46 ha), is a mountainous area, with cliff columns of peculiar beauty and are recognised as critical habitat for vultures. Conclusions and Recommendations Impact on Biodiversity Conservation and on the Overall Objectives of German Financial Cooperation The particular Kazbegi high altitude biodiversity that is of most interest for protection under the future limits of the KNP is at the higher elevations above the building and operation areas of the HPPs and above the forest area adjacent to Stepantsminda. Therefore these projects and plans have no negative impact on the particular biodiversity, nor on the foreseen biodiversity and habitat conservation, under the future KNP as will be developed through the SPPA. An impact assessment (Table 1) found no real negative impacts against the objectives and the outputs for German Financial Cooperation. There will, however, be likely moderate positive socio economic impacts from DHPP and the hotel with creation of employment and income opportunities. The impact of the hotel development plans will depend very much on ownership of the land and arrangements to be overseen by APA between all stakeholders including the hotel, traditional land users and other local stakeholders. Table 1. Impact Assessment of DHHP and Private Deve lopment Stepantsminda

Forest NR against Objectives & Outputs of German Fi nancial Cooperation Impact assessment -2 = strongly negative, -1 moderately negative, 0 = neutral; DHPP Rooms Ski Area 1 moderately positive, 2 = strongly positive Constr O&M Constr O&M Objective of the financial contribution (Programme objective)

i 0 0 0 0 (i) Improvement of natural resources- and protected areas management in selected areas, while at the same time (ii) improving the socio-economic situation of the adjacent communities ii 1 1 1 1

Output 1: Selected PA (KNP) has all necessary planning documents for their development and the promotion of the adjacent communities available.

0 0 1 1

i 0 0 0 0 Output 2: Selected PAs (KNP) are (i) recognized and (ii) have a

functional protected area management ii 0 0 0 0


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Impact assessment -2 = strongly negative, -1 moderately negative, 0 = neutral; DHPP Rooms Ski Area 1 moderately positive, 2 = strongly positive Constr O&M Constr O&M Output 3: Adjacent communities of selected PAs (KNP) benefit from investment in the socio- economic development of the supported zones of the Pas

1 1 1 1

Output 4: National PAs - systems are strengthened in particular topics of their reform processes according to international standards

0 0 0 0

Output 5: The sustainable financing of national PAs systems is supported.

0 0 0 0

Conclusions on Impacts of Investment Projects and P lans on the Kazbegi National Park and the foreseen KNP Project: Hydro Power Plant Investments:

• Dariali HPP has no/negligible impact on the KNP Project Area with loss of only small fragments of land; there is need to monitor impacts on the bird habitat area below the weir/dam;

• Larsi HPP has no/negligible impact; • Khadistskali River HPP may affect the waterfall cascades and landscape: there is

need for monitoring of activities securing adequate environmental flow; Rooms Hotel Plans for Stepantsminda KNP Forest Area :

• Handing over the Stepantsminda KNP Forest Area to the Rooms Hotel for planned activities will set an unfortunate precedent and should be avoided;

• Seek a multi-stakeholder use arrangement for Stepantsminda Forest Area; • KNP Management and socio-economic development can be developed in harmony

with these investments and plans: • APA needs to be active in implementing these measures.

Compensation Areas

• The Truso Valley Travertines and Abano mineral lake features would benefit as would the whole valley from an extension of the KNP and designation as traditional use area.

• The Sakhazinari Cliffs are a valuable bird habitat and landscape addition to the KNP. Overall:

• Biodiversity conservation objectives and Kazbegi National Park development and objectives of the SPPA investments are not at risk due to any of these developments and plans.


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B. Introduction

B.1 Background Through the “Caucasus Initiative”, launched in 2001, the German Federal Ministry for Economic Cooperation and Development (BMZ) supports economic, social and political development in the South Caucasus and by means of these efforts aims to foster cooperation and harmonization between Armenia, Azerbaijan and Georgia. A significant part of BMZ’s Caucasus Initiative is the Ecoregional Nature Protection Programme (ENP) for the Southern Caucasus. The ENP aims to:

• Promote biodiversity conservation in the region, and by doing so at the same time support the sustainable socio-economic development of the local population in harmony with nature and biodiversity conservation;

• Reduce the pressure on land-use at the selected locations; • Support and further develop an eco-regional model for conserving biodiversity in the

Southern Caucasus region; • Contribute to the sustainable financing of the conservation area system of the three

partner countries. Through KfW BMZ finances three components for the Ecoregional Programme:

• “Support to Individual Protected Area projects” (Individual PA projects), • “Financing Contributions to the Caucasus Nature Fund” • Running of a “Transboundary Joint Secretariat” (TJS) for Nature Conservation in the

Southern Caucasus. All three components are intrinsically linked and designed to work closely together to provide maximum synergy. In 2010, KFW and APA agreed a “Support Programme for Protected Areas” (SPPA, working title “Open Programme”). Within this programme KNP has already been identified as beneficiary in Georgia (together with three others). The SPPA objective in Georgia aims to improve the management of natural resources and protected areas, and simultaneously improve living conditions of adjacent communities. The activities are to be based on participatory approaches for management planning, biodiversity and nature conservation, and for socio-economic development. The programme will promote (i) preparation of management plans that meet international standards, (ii) improvement of management effectiveness and improvement of staff capacities, (iii) implementation of socio-economic development activities with active and financial participation of the beneficiaries, (iv) the use of experiences to strengthen national systems for protected area planning and management according to international standards, and (v) the sustainable financing of the selected protected areas. APA and KfW are about to conclude a financial and separate agreement with the Government of Georgia for implementing SPPA. The SPPA will be financed by the German FC. The Kazbegi National Park and High Mountain Ecosystem KNP is located on the north slope of Caucasian ridge, in the basin of the river Tergi (in Khevi); the lower mark of its territory is at the height of 1400 m above sea level and the


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upper – in the range of 3300- 4100 m. The present KNP is fragmented, as it came into existence from starting with two protected areas that were extended by forested patches of land in 1976 and was again extended with individual pieces of land in 1987. The main purpose of establishment of Kazbegi National Park is to protect high mountainous ecosystems of the region. The territory includes high mountain paleoglacial-denudational alpine landscapes with grasslands and rhododendron thickets, high mountain volcanic subnival landscapes, high mountain denudational and paleoglacial sub-alpine landscapes with combination of meadows, shrubs and open, upper-mountain erozional-denudational, partially paleoglacial landscapes witch birch ( and pine (Pinus caucasuca), hornbeam-oak (Quercus macranthera) forests. The flora is typified by high mountain grassland communities of the High Caucasus, interspersed with highly fragmented birch-ash forests patches along lower slopes, side-hills and micro-watersheds and a juniper-rhododendron belt forming the tree line above 2000 m elevation. Prominent fauna of the region includes Caucasian Tur (Capra cylindricornis), chamois (Rubicapra rubicapra), brown bear (Ursus arctos) and wolf (Canis lupus). The avifauna is richly represented with several species endemic to the area, including Caucasian Snowcock (Tetraogallus caucasicus), but it also holds breeding populations of vulture species (Bearded Vulture (Gypaetus barbatus) and Griffon Vulture (Gyps fulvus). Numerous plant and animal species reported from the region are listed in Georgia’s Red Data Book. Out of Georgian “Red List” species only Radde’s (black) birch (Betula raddeana Trautv.) is encountered on the mentioned area. The feasibility study for the KNP project (March 2010)2 proposes focus on four results: (i) establishing a protected area regime for the agreed conservation areas, (ii) development of eco-tourism, (iii) livelihood stabilisation and (iv) regional development / mainstreaming of biodiversity protection. This agrees with the objectives and foreseen outputs of the Support Programme for Protected Areas. The Dariali Hydropower Plant (HPP) on Tergi River in Kazbegi On May 19, 2011 the government of Georgia and company Dariali Energy signed an agreement on construction of a new Dariali Hydro Power Plant (DHPP) in Georgian highlands of Kazbegi, Mtskheta-Mtianeti Region, on the river Tergi. Gamma Ltd (Scientific Research Firm) and Stucky Caucasus Ltd have prepared an Environmental Impact Assessment (EIA) of the DHPP project, including assessments of environmental and social impact and recommended mitigating measures for anticipated negative impacts. The HPP is being constructed at a site within the KNP, north of Stepantsminda town, the administrative centre of the area. As such, construction is not allowed in a protected area. KfW was informed on 30.01.2012 that 20 ha of protected area have been taken out of the KNP and as a compensation measure 339 ha of land have been added. This was confirmed in a letter from MENR of 27 June 2012.

2 Feasibility Study for the Ecoregional Programme III (Georgia), Kazbegi Project, Final REPORT March 2010, Deutsche Forstservice GmbH & AGEG Consultants eG


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On 4 September 2012 APA informed KfW that an additional 47 ha on the edge of Stepantsminda town is proposed to be removed from the KNP. After investigations this proved to be for use by a new hotel3. These developments raised concerns on possible impacts of the DHPP (its construction and operation) and the hotel plans in Stepantsminda for KNP land on the KNP biodiversity and nature conservation objectives and on the SPPA objectives for developing the KNP, as defined in the SPPA Logical Framework (see Annex 2 for the Framework). The removal of these areas and possible further future losses of National Park designated land from the existing KNP has raised concerns on possible risks for achieving the SPPA objectives for the potential KNP expanded project area. KfW expressed these concerns to the Agency for Protected Areas (APA). Consequently, following consultations, APA requested that TJS employs the services of an international and a national environmental expert to assess the impacts of these developments on the KNP SPPA project and its objectives as defined in the project Logical Framework. This report presents the findings, conclusions and recommendations of this assessment, undertaken from 15 October until 2 November 2012, including a debriefing at KfW Headquarters in Frankfurt. The project team mobilised for 14 days in-country between 15th October and 2nd November 2012 to undertake the assessment were:

• one International consultant: Mr. Derek Ratcliff, • one National consultant: Dr. Gia Sopadze.

The Assessment experts worked in close liaison with the TJS team leader, Mr. Servi Nabuurs, and the TJS National Coordinator for Georgia, Mrs. Rusudan Chochua. The Team is thankful for the support and materials provided by APA and KfW. Special thanks go to Mr. Otar Tsamalaidze (Director, KNP) who accompanied the mission full time during the field visit. The time and information made available by representatives of NGOs, Local Government, Dariali Energy and Rooms Hotel is also highly appreciated.

B.2 The Objectives and Scope of the Assignment The objective of the assignment was to assess the impact of the construction of the DHPP, the removal of the DHPP area and potential removal of the Stepantsminda KNP area (respectively 20ha and 47ha in size) from KNP and the addition of the natural monument compensation areas (339 ha) on:

i) the biodiversity conservation and nature protection objectives of the KNP, and ii) on the objectives of the Protected Area development support provided by German

Development cooperation within the context of the SPPA. During the course of the assignment it became obvious that there are two other HPP projects in the Tergi gorge area with potential impacts on the KNP project area and these were also considered during the assignment.

3 E-Mail from APA from 4 September 2012


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C. Methodology A comprehensive review of all relevant documents was undertaken in Tbilisi and a concise work plan prepared (see Annex 7). Interviews and meetings with relevant stakeholders were arranged in Tbilisi and at the project area in Stepantsminda (see Annex 6 for individual people and organisations contacted). Team site visits with assessments on the ground were made to all the components of the Dariali project and to the adjacent Larsi HPP and Khadistskali HPP sites. The KNP area adjacent to the new Rooms Hotel was visited along with the compensation areas that have been added to the KNP. Impacts of the investment projects and the land taken/required for the respective projects were assessed. The impacts of the two new projects were in particular assessed as they relate to the biodiversity conservation objectives and the outputs according to the LogFrame of the SPPA. General environmental recommendations are formulated with particular emphases on identifying, where possible, opportunities for harmonious arrangements for development of the investment projects and KNP.


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D. Results of the Mission

D.1 Dariali Hydropower Project (DHPP)

D.1.1 Present Situation

National Park Land Affected by Dariali Hydropower P roject Three small area of land were removed from the KNP for the DHPP (see Map 2) totalling 8,737 ha or 8.8 ha. They are:

1. Plot No 15 with an area of 32,778 m2 at the beginning of the pipeline route immediately below the weir/dam,

2. Plot No 16 with an area of 17,322 m2 which is one km away from the weir/dam site, 3. Plot 246 with an area of 37,637 m2 is at the downstream end of the project.

Plots 2 and 3 are on the right bank of the Tergi River downstream of Stepantsminda town. The land along with some private land is required to build the first section of the water delivery system (a buried pipeline) for the DHPP. The two pieces of KNP land are taken from a small fragment area of KNP (see Map 2) which is itself surrounded by private land. The two areas do have Sea-buckthorn groves that provide winter range for the Caucasian Great Rosefinch (Carpodacus rubicilla) and Güldenstädt’s Redstart (Phoenicurus erythrogaster). Plot 3 is at the downstream area and is required for construction activity; it will be used in operations for the switchyard and transformers. The land is immediately alongside the main road to the border and is between the road and mountainside. The Ministry of Environment Protection indicated that 20 ha had been excluded from the KNP, but this presumably covers the corridor of land required for the tunnel. The surface KNP land along and above the tunnel alignment is unaffected by the project. Dariali Hydropower Plant Approval Process An Environmental Impact Assessment (EIA) was undertaken for the Dariali project in 2011 and contains the information necessary to obtain an Environmental Permit under Georgian Law on Environmental Permits, 2008 and the Regulation on Environmental Impact Assessment, 2009. The EIA was undertaken by the Georgian firms Gamma Ltd and Stucky Caucasus and presented as a 238 page report4. Public Consultation was carried out with a final meeting that took place on 8th November 2011 in the Kazbegi Municipality, Stepantsminda. The EIA document meets the requirements of Georgian EIA Regulation. The report is not to international EIA standard. In particular it is weak with regard to establishing the institutional arrangements and commitment to implement mitigation measures which are framed in the report only as recommendations. It is not clear if an Environmental Management Plan (EMP) has been developed or is being followed by the project developer. The EIA was considered by Ministry of Environment Protection and the MoEP permit (entitled the Environmental Expertise Conclusion on the Project) was granted on 28 November 2011. Subsequently, the Ministry of Economy approved the Building Permit for Construction of Dariali on 30th November 2011. Building work commenced immediately on the tunnel work component of the project.

4 The report is available at http://darialienergy.ge/new/files/en%20and%20social%20imp


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MoEP is responsible for monitoring Dariali Project and ensuring the mitigation measures in the EIA are followed and that an EMP is submitted 3 months after the EIA recommendation if made by the MoEP. Map 2. Land Excluded from the National Park for DHP P and Required by Rooms

Hotel Dariali Environmental Impact Assessment and Project Design The EIA investigated three alternative configurations for implementing the HP project:

1. Construction of a 40-60 m high dam in the Tergi gorge located about 3 km north of Stepantsminda; a reservoir would be created 800m wide with a water surface area of about 1.8 km2. A 4 km tunnel on the right bank would deliver water to the powerhouse just before a Monastery complex and above a downstream tributary - the Khadistkali River.

2. Construction of a two stage diversion type HPP in the gorge area with two intakes and two powerhouses. The first of these sub-schemes would be a left bank dam/weir offtake below the Chkheri River and a 2 ½ km tunnel to a powerhouse on the left bank. A second sub-scheme then takes the water discharge into a right bank weir/dam and a 3km tunnel with a power house above the Khdistkali River confluence.

3. Construction of one step run-of-river diversion. A low concrete dam/spillway below Stepantsminda and Chkheri River diverts water to the right bank of the Tergi River. The water is delivered first in a tunnel over ground for 2 ½ km. The flow then goes into a tunnel for 4½ km to a powerhouse built completely underground.

1. Plot 15 - 3.28ha

2. Plot 16 - 1.73ha

3. Plot 246 - 3.76ha

alignment of tunnel

Area considered by Rooms Hotel


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Alternative 1 would require major works and road access in the gorge for construction of the dam and the relocation of gas pipeline infrastructure. It would also flood grazing land and impinge land from the National Park on either side of the valley. It is also likely that with high sediment loads a dam on the Tergi would quickly silt up. The two run-of-river alternatives have fewer environmental impacts. The second alternative with two head-works and two powerhouses and the associated road access and construction activities will would be more disruptive and have more environmental impacts accordingly. The third alternative (Figure 1) is the DHPP configuration which is adopted for construction of the project with just one weir/dam and one powerhouse. It is the alternative with least impact to the environment and to the National Park. The DHPP EIA discusses the cumulative impacts of the project in relation to the two other proposed projects - Larsi HPP and Kazbegi/ Khadistskali HPP, but it is not clear from the text where these projects are in relation to Dariali HPP. Figure 1. Run-of-River Option for Dariali HPP The DHPP has the capacity to generate 108 MW of power using three turbines. The project is now being constructed and there have been some changes in the design of the project since the EIA was approved. The diversion canal shown in the Figure 1 will now be a pipeline buried just below the ground. The design discharge (the river flow required for the turbines to operate at full capacity) has also changed from 35 m3/s (cubic metres per second) to 33 m3/s. This new information is used in analysis of impacts of river flows. The 7km gorge area where the Dariali project will be developed has very high landscape value. The Tergi valley gorge area is very steep and there are side streams below the weir site which contribute to river flow i.e. the left bank tributaries of Mna, Suatisi and Devdoraki of which the latter is most significant. There are also numerous side springs and seepage


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which increase flow in the river. There are no villages close to the river or direct human use of water in the valley bottom. The project will take about 36 months to construct; this is the time taken for completion of the tunnelling activity underground for the powerhouse, and the water delivery & discharge tunnels through the right bank hillsides. Access for tunnelling is immediately alongside the main highway. Impacts of the project are identified during construction at both the weir and hydropower sites. Construction of the head works will take less than a year and work has not begun as yet on this aspect of the project. Two small areas of KNP land have been taken along the pipeline route (see Fig 2). Construction access is required on the right bank along the pipeline and to the tunnel and a 150 m temporary access road is required. Figure 2. Proposed Project Headwork Infrastructure A work force of 300 is needed at the height of construction but only 25-30 people will be employed during operations. A great majority of the construction workforce is employed from Stepantsminda and the general area. The camp being used for the non-local workforce is a long way from any existing settlements; it is downstream of the powerhouse and tail race canal just 2 km from the Russian border. Potential impacts during construction include disruption of habitat for flora and fauna. These impacts will be restricted and in the main short term. There is trout in the river and there will be impediments to the movement of fish. A fish bypass is incorporated in the weir/dam design, but there is no baseline data programme or fish monitoring programme proposed in the EIA to assess the effectiveness of the fish bypass. MoEP should follow this up through monitoring the project, the environmental recommendations and the EMP. Most of the work for the water delivery system is in the tunnel and the main impact from the tunnelling operation is the need to remove, store and dispose of material from the drilling operation. This is granite and is suitable for stone and aggregate for other construction activities at the weir and also in the immediate downstream Larsi project, where material is required for construction and fill. This material is stored at low level between the main

Buckthorn bird Habitat


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highway and the river. The proper storage, management and timely removal of this material before high water levels in the river (May to Aug) is important to avoid negative impacts on downstream river water quality.

1) Tunnel access and site for future Control House and Substation.

2) Area below the construction tunnel site with drill material storage adjacent to river.

Figure 3. Project Tunnel and Construction Activity Once construction is finished, there is little visual impact from the project. The main tunnel and the powerhouse are inside the mountain. The first part of the water delivery system pipe will be buried underground. Two pieces of land will be retained for operation of the project in the downstream area close to the powerhouse. One of these sites is the land (Plot 3, Map 2) taken from the KNP and it will house the project sub-station and control-house. At the other service tunnel site there will be facilities for the 25 - 30 staff operating the plant. If the areas below the main road are cleared up and landscaped there will be very little visual impact from the DHPP infrastructure. There will be no impact on biodiversity and landscape on the gorge slopes that belong to the KNP, because the headrace tunnel will be underground, and there will be no interruptions in the hillside hydrology or movement of animals. The latter can still move freely to the river water for drinking. The main potential long term impacts resulting from the project relate to the loss of water in the 7 km section of the Tergi River between weir intake and the tail race return of water from the powerhouse (see Figure 4). High flow levels in the river are associated with the summer snow melt and precipitation and are concentrated into three summer months. For the winter months (December to March) the river has less than 10 m3/s flow (see Fig 5). The Tergi River only has an average flow in excess of the Dariali HP powerhouse design flow of 33 m3/s for a few months a year; taking this amount of water would result in the river being dry for 9 months of the year. Removal of all the water from the river for long periods would result in severe consequences for the existence of aquatic life and for fish species movements. Loss of the complete flow would also take away natural beauty from the gorge area and there are concerns regarding the possible sedimentation build up below the weir/dam.


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Figure 4. Main Tergi Gorge (view to south with Step antsminda at the end)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Average Monthly Flow

8.48 7.92 8.09 13.7 34.7 54.9 57.2 40.2 25.0 17.1 12.1 9.81

River with HPP 2 2 2 2 2 21.9 24.2 7.2 2 2 2 2 Dariali Design Flow

33 33 33 33 33 33 33 33 33 33 33 33

Expected Actual Use

6.48 5.92 6.09 11.7 32.7 33 33 33 23 15.1 10.1 7.81

Figure 5. Water Flows in Tergi River with and witho ut Dariali Project The absolute minimum flow recorded in the river was 4.0 m3/s over a 60 year period. Average monthly flows experienced in the Tergi River are shown in the chart in Fig 5. The same 60 year data records show an average yearly maximum flow of 128 m3/s with an extreme of 481 m3/s.


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The EIA defines an environmental flow (i.e. the flow to be retained in the river for aquatic life

and any existing uses) of 2 m3/s in the general text of the EIA document. It is not fully clear

how this is determined but seems to be calculated as 10% of the 95 P%, or 10% of the flow that is in the river for 95% of the year. The flow in the river will be 2 m3/s for 9 months of the year. Average flows will increase to 24.2 m3/s in July (see Fig 5) and for short periods there

will be one-off events in the river of more than 100 m3/s. At peak flow times (June to August)

Dariali HPP can operate at the maximum design capacity. An environmental flow of 2 m3/s with the inclusion of fish bypass at the weir should be sufficient flow for aquatic life and allow fish migration; the main trout population is above the weir site and will not be affected. The amount of the environmental flow is not specifically stated as such in the Conclusion of the EIA document and it is also not specifically mentioned in the MoEP Conclusion Permit. The environmental flow is the most important mitigation measure in the EIA; it means the project foregoes a significant amount of revenue by operating the plant with loss of potential capacity. A concern would be that the environmental flow may be conveniently forgotten during the implementation phase of the project. The EIA report has a lot of detailed consideration of potential impacts. It is written as a recommendation from the environmental consultant and is not a commitment from the developer to implement the proposals and mitigation suggested in the EIA report. Responsibility for implementation of the measures and institutional responsibility is not defined in the EIA. This is a weakness in the Georgian procedure whereby a project can be given approval and is not required to develop an environmental management plan until 3 months after construction contracts are already finalised and when construction of a project, as in the case of Dariali, is already well underway. Findings from Other Documents The Feasibility Study for the Project5 identifies areas of special biodiversity importance. 250 ha of land are important as winter habitat (riverine sea buckthorn vegetation) for two passerines (the great rosefinch & Güldenstädt’s redstart). Two of the areas (110ha) are close to the overground DHPP pipeline route; one is partially affected by the alignment. Both areas are outside the presently designated KNP & this issue is not mentioned in the EIA.

D.1.2 Findings from Meetings and Interviews

A meeting with Dariali Energy Company, owner and developer of DHPP, confirmed that the Company is 40% owned by Georgian based Construction Company Peri Ltd and other shares are held by Robbins, the US based tunnel boring machine producer (which has 30%), while JSC Georgian Energy Development Fund (GEDF) has the remaining 30%. Dariali Company confirmed the project is being built with 5 construction contracts. The tunnelling contact is being undertaken by an Austrian Company under the supervision of Robbins and tunnelling is well underway. The total cost of project development is $100 million, (less than earlier estimates of $120 million). The project will be 65% debt financed. Dariali is negotiating international loans and the German Company Fichtner is undertaking due diligence; this will include ensuring that the environmental assessment has been

5 Ecoregional Programme III (Georgia), Kazbegi Project Final Report, March 2010


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properly undertaken. Dariali has a take or pay agreement to provide power to the Government of Georgia with a commitment to build the project within 36 months. Design flow for the project was confirmed as 33 m3/s flow and the weir/dam site is 4 m high and will have release gates; the weir diversion has no storage capacity. Dariali said they understand their commitments in the EIA to relevant mitigation and retention of 2 m3/s in the river below the weir/dam as an environmental flow. Dariali, in addition to the 5 ha of land taken from the KNP, has also purchased private land to allow construction at the weir site to take place. The Company will require to keep only a small amount of land for access, and maintenance during operations and will seek to hand back some of the private land that they have acquired for the first part of the pipeline construction to the Government once construction is finished. It is possible that these small sections of land could be handed over to the KNP as they adjoin the KNP and are close to the special bird habitat. Work is well underway for the tunnelling but has not yet begun on the head-works (weir/dam) and the first section of the headrace pipeline. The latter will be buried immediately below the surface of the land. This section of the water conveyance route will be completed in less than one year and it is not necessary to begin work on this part of the project as yet. In a meeting with Gamma, the company which developed the Dariali EIA, they confirm that they have an agreement to provide monitoring services to Dariali and this includes fish monitoring. Gamma has already begun the base line surveys for this. Fichtner Energy and Consulting Services have been engaged to do due diligence on the project and a group from the company were visiting the site and a meeting was arranged. Fichtner will look at the adequacy of the proposed 2.0 m3/s environmental/residual flow for the river and the proposed fish bypass arrangements proposed in the Dariali EIA. The gorge area which will experience reduced flows is not regarded as a significant fish habitat for fish breeding. Trout are the signature species in the river, but is expected not to migrate. Main international electricity transmission power lines pass directly alongside the Tergi River / Main Military Road in the gorge. The lines will need upgrading to handle transmission from Dariali and new lines may be required. Any new lines will follow the existing power corridor in the Tergi valley and will not be on any present or future KNP land. NGO Green Alternative is strongly opposing the investment. They pointed out that there are 3 projects with cumulative impacts which should be assessed together and it is claimed that environmental flow needs have not been properly addressed. Other concerns include the landscape impact on the Tergi gorge, the fear that the low environmental flow will result in the freezing of the Tergi during winter and the fact that the hydrology information is very old. NGO Nacres had concerns about lack of information and transparency from the project developers. This Mission assessed that Dariali has an acceptable environmental flow and the negative impacts on landscape and freezing of the river are exaggerated. The hydrology is based on 47 years of data which is regarded as sufficient. Adherence to the environmental flow will prevent the feared freezing. Both NGOs were not aware of the detailed development plans for the other HPP projects, nor did they know of the plans of Rooms Hotel. All NGOs, including WWF, are in favour of


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the KNP SPPA Project. The development of the management plan, management capacity and socio-economic development should proceed. Stopping the project would give a wrong signal and impede nature protection. Stopping investment support for infrastructure or energy projects would give a stronger signal regarding concerns about environmental impacts of such investment projects. WWF has certain technical concerns on the DHPP: the strong torrential flows during the peak flow season may damage the infrastructure and the area also entails certain seismological risks. It is assumed that these have been accounted for in the technical designs. According to WWF the main biodiversity value of Kazbegi area are the higher altitude birch forests (northern exposures), dryer natural pine forests (southern exposures) and the higher altitude alpine areas with the particular flora and fauna. These valuable biodiversity areas are above the HPP sites and the forest site next to Stepantsminda. Hence these investments and development projects will not negatively affect the hydrology, biodiversity conservation and the development of the KNP, as foreseen under the SPPA project. The KNP development will have opportunities to include needs and potentials of the adjoining population and create employment in the tourism sector. As such the SPPA project is needed to support biodiversity conservation and for local economic development.

D.1.3 Potential Environmental Impacts and Risks

Most of the 20 ha of land regarded as being taken from the KNP is the corridor for the project headrace tunnel and this 11.2 ha is all underground in the mountainside and its loss has no impact to the KNP. The three sections of land taken from the KNP are only small. One area directly adjoins the main road and will be used for a substation and transformers (see Map 2, Plot 246). The other two pieces of KNP land taken for the DHPP are from a fragmented portion of KNP land close to Stepantsminda (see Map 2, Plot 15 and Plot 16) and these areas adjoin the habitat of the two bird species mentioned before. The main impact to the Tergi gorge area is the removal of the river flow in a 7 km section of the river which has scenic landscape value. The loss of water may have impacts on sedimentation deposition in the gorge area. There will, however, still be flood events in the river which will pass through the main gorge and which are responsible for the existing river landscape. Reduced flows will also have impacts on aquatic life and fish species and this could lead to impact on aquatic biodiversity in the gorge area There are, however, already dam and irrigation impediments to fish movements downstream of DHPP. The Larsi project is 100m downstream of DHPP and an old Tergi River downstream HPP in Russia over the border also poses obstacles to any long distance fish movements. A fish bypass is included in the case of the DHPP to assist local fish movements. The invertebrates and fish of Kazbegi are poorly studied6 and only the brook trout has been documented. Trout is common in all mountain rivers and side stream in Georgia; it is more abundant at higher altitudes.

6 Ecoregional Programme III (Georgia), Kazbegi Project Final Report, March 2010


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There is a need for base line fish surveys and on-going surveys during operations of the project to determine if the fish bypass works and if fish numbers and species are affected. It will then be possible to determine if possible further mitigation measures are required. An environmental flow of 2 m3/s is provided in the EIA and the main Tergi flow will be supplemented by flows from the left bank tributaries and numerous side springs and seepage flows from the steep Tergi gorge. The environmental flow provided to the river at the weir will be equivalent to nearly a quarter of the existing dry season January and February average monthly flows and should be sufficient to avoid freezing up and for maintaining aquatic life. The following is a summary of environmental risks

1. Construction activity – e.g. loss of river water quality in the down stream affecting aquatic life,

2. Passerine habitat for two red-listed bird species are at risk during the construction phase of the weir site,

3. Loss of some fish habitat due to weir facilities and changed flow conditions in the river,

4. Loss of landscape value and sedimentation in the Tergi gorge area due to lower flows,

5. Recommended environmental flow is not enforced during project operations phase with impacts to landscape and aquatic species,

6. EIA is not to International standard and weak monitoring by the MoEP could result in the EIA recommended measures, including environmental flow, not being implemented,

D.1.4 Mitigation Measures and Monitoring

Monitoring is required by project consultants and MoEP to enforce the measures in the EIA to ensure that:

• 2 m3/s environmental/residual flow is released as per the EIA requirements; • the fish bypass functions to allow fish movements; • there is no build-up of sediment materials and changes to the river bed in the Tergi

gorge below the intake. Also, because part of the vegetation in the weir/dam area is identified as important for two bird species, it is recommended that:

1. Disturbance in the flood plain, during project construction, is strictly limited with access only to the pipeline area from the upstream side and that Dariali Energy is made aware by APA of this important habitat, its extent, and the likely intent, as per the Ecoregional Programme Feasibility Study, to provide protected area status to it.

2. Dariali be reminded of their obligation to properly restore the land once the pipeline is completed and buried.

3. Dariali instruct their consultants to include in their monitoring programme, bird habitat restoration & the survey of bird populations in subsequent winter seasons.

4. Following construction, that any land areas that Dariali release from their ownership should be given to the KNP to form part of any future planned protected area.

5. Dariali should be encouraged to sponsor efforts to conserve the habitat and the birds.


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D.2 Larsi Hydropower Plant


The site visit revealed that immediately downstream of Dariali another hydropower project, Larsi HPP, is being built with its power station right on the border with Russia. The project is owned by Peri Ltd; it will have an installed capacity of 20 MW and will be finished in 6 months. This project will take the water from the Tergi stream less than a 100 m down-stream of the Dariali project tail race. The river Tergi is also dammed for hydropower purposes 5 kms downstream from the Dariali project in Russia. The Russian dam is 2½ km across border and further downstream the water is extensively used for irrigation purposes. The Larsi headworks are nearing completion (see photo Fig 6). The same contractor is undertaking both the Dariali and Larsi HPPs and there is a third HPP on the Khadistskali River. The Project Manager for the DHPP describes himself as the manager for three HPPs.

D.2.2 Larsi Impacts and Mitigation

An English version of the EIA for this project was not available and a detailed assessment could not be undertaken of the project and adequacy of mitigation measures. There is an approved Georgian EIA and MoEP will be responsible for monitoring the EIA measures and ensuring the EIA and associated EMP are implemented and impacts monitored. Environmental risks will include potential construction impacts working next to the river and environmental flow and provision for fish movement and monitoring.

D.3 Khadistskali (/Kazbegi) Hydropower Plant


Investigations at site also revealed plans for a further scheme to upgrade the existing Kazbegi HPP with an intake at the Khaditskali stream. The Khadistskali is a right bank side stream of the Tergi River immediately down stream of the Dariali project tail race and below the Monastery complex at that location (see Map 1 and Fig 7). The Khadistskali River side stream is in a very attractive gorge with a series of cascades. The land is surrounded by KNP on either side of the valley. The present Kazbegi powerhouse has an installed capacity of 320 kW and has operated for 50 years with two turbines. Water flow is taken from a short section of the river with an intake some 150m upstream. An employee of the Kazbegi HPP indicated that the facility had been sold by the local authority on the understanding that the

Figure 6. Larsi Headworks under construction


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HPP will be upgraded. Government plans7 show a 5 MW project. As far as is known, there has been no EIA undertaken for this site and no approval has been obtained for the project. The 1 km right bank road along the river has been upgraded and extended a further 300 m recently by the Dariali/Larsi HPP contractor. A water intake at this further distance (above the cascades) will give a head for power generation of around 300m. To provide 5 MW in a relatively small stream will probably take away all/most of the stream flow from the cascade gorge area. Because this area is on a side stream which is little visited, the KNP and APA should monitor what is happening in the gorge area. It will be possible to upgrade the existing powerhouse using the existing left bank canal with replacement turbines to improve power output, without having to take all the river flow from the cascade area.

Part of Cascade and new road track on the right bank of the river.

Existing power house & Monastery Complex

Figure 7. Khadistskali River and Power Station

D.3.2 Khadistskali Impact and Mitigation

No EIA seems to have been submitted for this project and work has begun on an access road. MoEP inspectors and APA should follow up with the project developer to ensure an EIA is lodged with MoEP. Impacts on the series of cascades would be dramatic if all water was taken for power generation. Other alternatives could be examined to upgrade the Kazbegi HPP. The KNP should ensure that it is involved in any EIA consultation meetings.

D.4 National Park Forest Land near Stepantsminda Pr oposal for Hotel Use

D.4.1 Findings from Meetings and Documents

Meetings at site with Rooms Hotel management and a site inspection confirmed the hotel is already making use of the KNP forest area for recreational activity for its guests. Plans were also made available showing detailed designs for skiing and residential development proposals for the site. 7 http://www.esco.ge/files/meorandum_eng.pdf

National Park land

Existing Power house

Powerhouse Tail race

Monastery


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D.4.2 The Present Situation

The area of 47 ha is located at the height of 1850 m above the sea level. The exposure is north-west and south-west just east of Stepantsminda town close to the newly opened Rooms hotel. The area is has planted pine forest of 55-60 years, mixed at some places with ash-trees. The ground cover is mixed grasses and herbs. The area is not significant and has no unique natural properties or high biodiversity value. The area east of this land is owned and used by a monastery (see Map 3). There is grazing land on the steeper area above. The KNP part of this area is classified as traditional use zone. The forested area has anti erosion and recreation functions. The area is close to the town and is used by local people and tourist for walking and picnics. The forest land is used by local people for grazing their cattle inside the park and for sheep passing to grazing areas above the monastery land. Local people collect fallen branches and gather grass/fodder for their cattle. APA has been informed that the private Rooms Hotel which opened in June 2012 wants to acquire 47 ha of land constituting this Stepantsminda forest area. Rooms Hotel opened July 2012 and will eventually have 150 rooms. The Rooms Hotel has prepared detailed designs for development of the KNP area and the adjoining area outside the park for a ski resort, chalet accommodation and a restaurant. These plans were made available and include ski lifts and a lake for water to make artificial snow (see Fig 8 and Annex 9 slides). The hotel wants to acquire the KNP land. The aspirations for the project are in a planning stage but with a high degree of seriousness: Rooms Hotel engaged a professional firm to prepare very detailed development plans. They have already adapted their plans following the objections of the Monastery, demonstrating their flexibility. During the site visit the hotel management indicated they are open to discuss arrangements other than their outright ownership of the site, but they are keen that their guests can have access to the land for recreational purposes (skiing in winter).

D.4.3 Impacts and Risks

Hotel guests use the KNP area and have Impacts. The hotel has daily activities for its guest in the KNP. Quad bikes use the KNP under supervision of hotel staff (see Fig 8); this has impacts on the park and will lead to erosion, particularly on the steeper hillside above the monastery site. There is no agreement with the KNP for these uses. It is a concern that a part of the existing KNP may excised from the park for a private development without any or little consultation with the KNP who are responsible for and manage the Stepantsminda National Park forest area. This can set an unfortunate precedent and there is concern that other areas of the park may be taken from the park in future without reference to APA.


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Map 3. Location of Rooms Hotel, Stepantsminda KNP F orest Area and Monastery land

Figure 8. Photos of Stepantsminda National Park for est area and Rooms Hotel

National Park

Rooms Hotel Monastery land

Quad bike use in Park

Planned ski runs in the Park

Rooms Hotel

Proposed Ski runs

Quad bike route


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D.4.4 Recommendations

Based on the findings that the Hotel management is open to discuss arrangements without ownership, but with recreational access to the land, and that local people use the forest area for grazing their animals and collecting fuel, the mission recommends to develop a multi-stakeholder use arrangement for the forest area that takes the requirements of all stakeholders into consideration. APA, as owner and manager of the area, should to be proactive in this.

D.5 Natural Monuments as Compensation Areas


Three territories have been added to the National Park as compensation areas for the land lost at Dariali and for the potential loss of the land at Stepantsminda KNP forest area and these areas were visited as part of the Mission. The three areas were confirmed as protected areas under the Law No 5853 on the Status of Protected Areas which was approved on 16th March 2012. Before these area were general government land and APA had no ownership, nor any protection tasks for them. In February 2012 APA obtained the ownership of the areas. The National Parks office in Stepantsminda was ordered to patrol these three new areas pursuant to the new law in March 2012.

Truso Travertines 4,2 ha Abano Mineral Lake 0.04 ha

Figure 9. Truso Travertines and Abano Mineral Lake The Two added territories of Truso Travertines (4.2 ha) and Abano Mineral Lake (0.04 ha) are located in open grazing areas at a height of about 2000m. The two features are within 500 m of each other in Truso valley (see Map 1). The Truso Travertines (4.2 ha) is an area of limy tuff (travertine) deposited in wide carpet fans from springs which form rare creatures of an inorganic nature. The outcrops of travertine are directly on the ground surface rock and are interspersed with traditional grazing land with no forest. The area is accessed through the Truso Gorge from the Tergi River that continues along Truso River to Ketrisi and beyond; this road passes through the sensitive travertine area; the main road access is currently severed with a broken bridge and it is necessary to divert up the mountain side in the existing National Park area to reach these features.


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The Abano Mineral carbonated lake (0.4 ha) is on the opposite side of the Truso River from the Truso Travertines. The lake experiences a continuous stream of water and emission of carbon dioxide coming from carbonate rocks. A small lake is formed and 10 - 15 cm fountains create the impression of “boiling” water. About 1 km upstream just before Ketrisi village is an abandoned CO2 separation plant that sprays water and gas fumes into the environment. Sakhazinari Cliff columns are located 3 km above Sioni Village 3 km, on the left bank of the Terkhena River, close to Kabarjina mountain. The land is an area of 331.46 ha. The population of the Sioni village in the past would seek shelter in cliffs in times of conflict. The columns in the cliff are of peculiar beauty and have an interesting volcanic geological structure between the Tergi and Kabarjina Mountain. It is an important local tourist attraction and provides important breeding and roosting habitat for three threatened vulture species. Figure 10. Sakhazinari Cliff Columns

D.5.2 Environmental Impacts

The inclusion of the three national monuments (339 ha combined area) has positive environmental impacts as the areas are now under the protection and management of and are patrolled by the National Park staff. In the general area of the Truso valley are more mineral springs with carpets of white, yellow and orange deposits decorating the valley floor at different places and not just the immediate protected area that is added now to the KNP. The general area is worthy of protection and it would be logical to expand the KNP further to include the grazing land in the valley as a zone of traditional use and join it up to the mountain area just to the south which is already


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designated as part of the main KNP. This would allow a proper management plan to be drawn up for the protection of these features. This further expansion can be part of the upcoming KNP development project that will include demarcation of the different KNP areas and zones. The feasibility study foresees this area as support zone. There is also a gas extraction plant about a kilometre up the Truso valley (near Ketrisi) for separation of carbon dioxide water from a well using an underground supply under pressure. The separation plant has been abandoned with gas and water escaping under pressure with significant air and water pollution. There is need to manage the plugging of the well as it is an environmental hazard. The Abano mineral lake is said to have less carbon dioxide emanating after the plant has tapped underground carbon dioxide. APA should follow this up to find a solution with the owner of the project or find funds to plug the escape of gas and water. The Sakhazinari Cliff represent a particular asset, not only due to their peculiar beauty, but also their function as a tourist attraction and being important breeding and roosting habitat for three threatened vulture species. The addition is fully in line with the KNP objectives and through the addition it is now under regular surveillance of KNP rangers.


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E. Impact on the Overall Objectives of German Finan cial Cooperation

An assessment of Impacts against the overall objectives and the outputs for German Financial Cooperation was undertaken. The full analysis against individual indicators of the SPPA LogFrame is given in Annex 2. Generally the analysis shows little/no negative impact. There are moderate positive socio economic impacts which can derive from both activities with creation of employment and income opportunities. The impact of the hotel development plans will depend very much on ownership of the land and the arrangements between all stakeholders including the National Park, the hotel, traditional land users and other local stakeholders. Table 2. Impact Assessment of DHHP and Private Deve lopment Stepantsminda

Forest KNP against Objectives & Outputs of the Supp ort Programme for Protected Areas

-2 = strongly negative, -1 moderately negative, 0 = neutral; Impact assessment 1 moderately positive, 2 = strongly positive DHPP Rooms Ski Area Constr O&M Constr O&M Objective of the financial contribution (Programme objective)

i 0 0 0 0 (i) Improvement of natural resources- and protected areas management in selected KNP Project Areas, while at the same time (ii) improving the socio-economic situation of the adjacent communities ii 1 1 1 1

It is expected that setting aside areas (HPP and Hotel) has a neutral impact on the KNP development and management for biodiversity conservation, but that both investments may have moderate positive impact on socio economic development during construction and during O&M, due to employment creation and more income opportunities. Output 1 Selected PAs (KNP) have all necessary planning documents for their development and the promotion of the adjacent communities available.

0 0 1* 1*

* The hotel is also a stakeholder in the socio-economic development of adjacent communities. Setting aside an area for the hotel will create a precedent that private investors can acquire areas from the National Park; if a cooperation arrangement for sustainable use by hotel guests can be arranged, the hotel will be a stakeholder taking part in preparation of management planning. Such cooperation holds good potential for contributing to the development and promotion of socio-economic development of adjacent communities. Output 2

i 0 0 0* 0* Selected PAs (KNP) are (i) recognized and (ii) have a functional protected area management ii 0 0 0 0 * For the legal and social recognition of the PA and its support a clear ownership arrangement is important. Land ownership and land/area use arrangement are critical for KNP recognition; setting aside areas for private investors may create an unfortunate precedent! Public awareness and education will support protected area recognition and PA management. Through cooperation with DHPP and Rooms Hotel, e.g. by having interpretation signboards and information materials at/near their sites this can be enhanced; in that case the impact would be moderately positive. Output 3 Adjacent communities of selected PAs (KNP) benefit from investment in the socio- economic development of the supported zones of the PAs

1* 1* 1* 1*

1* Communities may benefit from employment and income from the HPP and hotel. This will generate


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-2 = strongly negative, -1 moderately negative, 0 = neutral; Impact assessment 1 moderately positive, 2 = strongly positive DHPP Rooms Ski Area Constr O&M Constr O&M more local economic development that may have synergy effects on KNP activities for socio-economic development. Output 4 National PAs - systems are strengthened in particular topics of their reform processes according to international standards

0 0 0* 0*

* There are potential opportunities for learning for other National Parks from the experiences of setting aside land and on collaboration on sustainable (recreational) use by hotel visitors of the land, and on information and communication, as well as possible other forms of collaboration. If these collaboration arrangements are according to international standards, they can provide national and regional lessons learned. Output 5 The sustainable financing of national PAs systems is supported. 0 0 0 0 Remarks: In general the HPP and the hotel will not impact the financial sustainability. In case the HPP could be persuaded to become a sponsor of the KNP then this may have a positive impact. The Rooms Hotel attracts more visitors to Kazbegi; if they will make use of paid services of the KNP and of visitor services by adjacent communities this will contribute to the financial sustainability and local socio-economic development.

F. Conclusions and Recommendations on Impact on Biodiversity Conservation

The particular Kazbegi high altitude biodiversity that is of most interest for protection, as foreseen in the SPPA KNP project is at the higher elevations with habitats for raptors, chamois (Rupicapra rupicapra) and tur (Capra caucasica). Other trigger mammal species in KNP project area include brown bear (Ursus arctos), long-clawed mole-vole (Prometheomys schaposchnikowi) and Kazbegi birch mouse (Sicista kazbegica)8. These particular habitats are above and away from the building and operation areas of the HPPs and away from the forest area adjacent to Stepantsminda. Therefore these HPP projects and Hotel plans have no negative impact on these particular habitats and the species they harbour. The area where the headrace pipe of DHPP will be placed towards the tunnel is crossing a habitat with sea-buckthorn communities providing winter range for the greater Caucasus satellite populations of great rosefinch (Carpodacus rubicilla) and Güldenstädt’s redstart (Phoenicurus erythrogaster). DHPP informed the mission that instead of the planned canal they will convey the headrace water through a buried pipe. The headrace pipe will be covered by earth and the vegetation will be restored, which will minimize possible negative impact on the habitat. The recommendations for mitigation during construction and for monitoring should be the responsibility of APA. It is concluded that the investment HPP project and Hotel plans have no negative impact on the foreseen important biodiversity and habitat conservation are part of the KNP SPPA project objectives.

8 5.3.13 Feasibility Study Ecoregional Programme (III) Georgia, Kazbegi Project, Nov 2009.


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F.1 Conclusions and Recommendations for Hotel Rooms Plans It is recommended that ownership of the Stepantsminda KNP forest area should remain with the KNP. Handing over the land to a private owner will set an unfortunate precedent. It is preferable that multiple use is developed with all stakeholders - hotel guests, tourists, local users, the Monastery and possible other users. APA should seek to develop a multi-stakeholder use arrangement.

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Transboundary Joint Secretariat

for the Southern Caucasus Promoting cooperation in nature conservation

Impact Assessment of Investments on Assessment Report, Annex 1 Kazbegi National Park Development November 2012

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Annex 1. Terms of Reference Post Title: Assessment of the potential consequenc es of the

construction of a Hydro Power Plant (HPP) on the development of the Kazbegi National Park in Georgia . (in particular if the NP objectives and the Objecti ves of the German-funded Open Programme Support can be achieved)

Contract type: Service Agreement Starting Date: September 2012 Duration: 2 weeks Duty Station: Tbilisi, Georgia

A. Background

Caucasus Initiative

Through the “Caucasus Initiative”, launched in 2001, the German Federal Ministry for Economic Cooperation and Development (BMZ) supports economic, social and political development in the South Caucasus, and by means of these efforts aims to foster cooperation and harmonization between Armenia, Azerbaijan and Georgia. A significant part of BMZ’s Caucasus Initiative is the Ecoregional Nature Protection Programme (ENP) for the Southern Caucasus. The ENP aims to:

• Promote biodiversity conservation in the region, and by doing so at the same time support the sustainable socio-economic development of the local population in harmony with nature and biodiversity conservation;

• Reduce the pressure on land-use at the selected locations; • Support and further develop an eco-regional model for conserving biodiversity in the

Southern Caucasus region;

• Contribute to the sustainable financing of the conservation area system of the three partner countries.

Through KfW BMZ finances three components for the Ecoregional Programme: (1) “Support to Individual Protected Area projects” (Individual PA projects), (2) “Financing Contributions to the Caucasus Nature Fund” (CNF; see http://www.caucasus-naturefund.org/) and (3) Running of a “Transboundary Joint Secretariat” for Nature Conservation in the Southern Caucasus (TJS; see http://tjs-caucasus.org/). All three components are intrinsically linked and designed to work closely together to provide maximum synergy. Presently National Park (NP) support is provided through an “Open Programme”. Within this programme Kazbegi NP and Kintrishi State Reserve have already been identified as beneficiaries in Georgia. Algheti NP and a new National Park in the Pshav–Khevsureti area are being considered as additional beneficiaries.

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The Open Programme objective in Georgia aims to improve the management of natural resources and protected areas, and simultaneously improve living conditions of the adjacent communities. The activities are to be based on participatory approaches for management planning, biodiversity and nature conservation, and for socio-economic development. The programme will promote preparation of management plans that meet international standards, improve management effectiveness and improve staff capacities, and to implement socio-economic development activities with active and financial participation of the beneficiaries. The German Cooperation programme is about to conclude a separate agreement with the Government of Georgia for implementing The Dariali Hydropower Plant (HPP) on Tergi River in Kazbegi On May 19, 2011 the government of Georgia and company Dariali Energy signed an agreement on construction of a new Dariali Hydro Power Plant (DHPP) in Georgian highlands of Kazbegi, Mtskheta-Mtianeti Region, on the river Tergi, one of the powerful rivers of Georgia. The HPP site is located within the Kazbegi NP. Gamma Ltd (Scientific Research Firm) and Stucky Caucasus Ltd have prepared an Environmental Impact Assessment (EIA) of the DHPP project, including assessments of environmental and social impact and recommended mitigating measures for anticipated negative impacts9. The issue The HPP infrastructure will be established at a site within the Kazbegi NP, north of Stepantsminda town, the administrative centre of the area. As such construction is not allowed in a protected area, 20 ha of protected area has