According to the bank documents, through this project, IFC will be providing a green loan to the Kerala Infrastructure Investment Fund Board (KIIFB) to finance critical urban infrastructure in the state of Kerala. The funds will be deployed across two components: (i) construction of four new water supply projects, and (ii) construction of four hospital expansions which are to be EDGE (Excellence in Design for Greater Efficiencies) certified.

Project Implementation

-The projects are implemented by relevant departments under the Government of Kerala (GoK) or special purpose vehicles created by these departments under GoK for the purpose of the project (referred to as “project implementation agencies” or “PIAs”).For project implementation, KIIFB enters into a tripartite agreement with the relevant GoK department and the PIA.

-The PIA for the water projects is Kerala Water Authority (“KWA”)

-PIAs for the hospital projects are two entities: INKEL Limited (“INKEL”) and HLL Infra Tech Services Limited (“HITES”).

• INKEL is a public private partnership initiative established by GoK for promoting public infrastructure development in the state. INKEL provides project development support from concept development, engineering design, procurement, construction (EPC) through to project management consultancy.
• HITES is a 100% subsidiary of HLL Lifecare Limited, a public sector undertaking under Ministry of Health and Family Welfare, Government of India (GoI). HITES undertakes infrastructure development project including EPC.

-For the water projects, KIIFB has entered into tripartite agreement with Department of Water Resources, GoK and KWA. For the hospital projects, KIIFB has entered into tripartite agreement with Department of Health and Family Welfare, GoK and the PIAs (INKEL and HITES).

-Within the hospital projects, for construction of facilities in medical college hospitals, KIIFB has entered into a tripartite agreement with Department of Medical Education, GoK and the PIAs (INKEL and HITES). The tripartite agreement gets terminated when, after completion of construction of the projects, the facility is handed over to the relevant GoK department for operation and maintenance (O&M) of the facility or completion of the defects liability period, whichever is later.  

Sub-projects

-The four water projects are:  

a) Thiruvananthapuram Neyyar Alternative Water Source (Thiruvananthapuram project) - The project includes: laying of 1.422 m diameter, 26.5 km water transmission pipeline from the proposed new 120 million liters per day (MLD) water treatment plant (WTP) at Neyyar Dam to the existing water reservoir at PTP Nagar (Thiruvananthapuram). The WTP is an associated facility and involves construction of the plant, construction of intake arrangements and raw water pump house with floating intake structure The transmission main will be laid in the right of way (RoW) of existing roads along Kallikadu – Kattakkada – Anthiyoorkonam – Malayinkeezhu – Bhajanamadam – Peyad – Kundamonkadavu – Elipode to the reservoir at PTP Nagar. The new WTP will be constructed on a five-acre land that belongs to the Irrigation Department of the GoK. At the time of the review,  construction of WTP project and, the transmission line project had not started. 

b)  Augmentation of Water Supply Scheme to Angamali, Ernakulam district (Angamali project) – The project involves construction of intake well with pumphouse, raw water pumping mains, two water treatment plants of 17 and 8 MLD each, clear water pumping mains and overhead storage reservoirs (OHSR). The project will be implemented in two parts. One part involves augmentation of the water supply system (WSS) in Angamali municipality, Thuravoor and Manjpara panchayat including the 17-MLD WTP with River Periyar at Thoppikadavu as its source. The second part involves augmentation of WSS to Malayattoor-Neeleeswaram and Ayyampuzha panchayaths including the 8-MLD WTP with River Periyar at Illithode as its source. Intake well in Thoppikadavu will be located in a 0.1-acre land in possession of the Revenue Department of GoK. About 9.36 km pipeline to connect to the 17 MLD WTP will be laid within the RoW of existing roads. The 17-MLD WTP will be constructed in the compound of the existing WTP in Angamali. A new OHSR is proposed in the WSS at Thuravoor. About 0.2-acres land required for the OHSR is provided by the Revenue Department of the GoK. For the second part, an existing well with a pump house will be used. A new OHSR will be constructed at Chulli for which the 0.075 acres of land will be obtained from the Education Department of GoK. The 8-MLD WTP will be constructed in the compound of the existing slow sand filter plant in Illithode. The pipeline will be laid in the RoW of existing roads, but about 17 km pipeline from Illithode pump house to Kannimangalam, Kadukulangara, and Pandupara will be laid along forest land and 1.569 ha of such land will be affected. At the time of the review, one out of five construction package (for construction of the 8-MLD WTP) had been awarded. The other packages were to be bid out. 

c)   Manjeri Sub-urban Drinking Water Project - Improvements and Augmentation of supply to Manjeri Municipality (Manjeri project) - The project is located in Ernad taluk of Malappuram district in Kerala, and will consist of a new water supply to Thadapparamba/Malamkulam and Elambra zones/areas and the improvement of the existing distribution under the Manjeri Municipality of Ernad taluk. The WSS will source water from the Chaliyar River. The water intake is located at Salagram in Areacode panchayat of Ernad taluk. A 19-MLD WTP will be constructed in the same compound of the existing WTP at Kilikkallu. Existing gravity mains will be used to pump water from the WTP to a new reservoir to be constructed within the premises of an existing reservoir located in Cherani. Two OHSRs are proposed at Thadapparamba and Elambra zones/areas under the Manjeri Municipality. While the Cherani sump is proposed on land in GoK possession, the OHSR at Elambra and Thadapparamba are proposed on private lands donated by the landowner to KWA. About 120 km of distribution pipelines are also expected to be laid in Payyanad and Elambra zones. At the time of the review, construction on the WTP and OHSRs had commenced. 

d)  Water Supply to Perumatty- Pattanchery - Elapully-Nallepilli panchayats Phase 2 and Phase 3 (Palakkad project):  The project is located in Chittur taluk of Palakkad district in Kerala, with planned water supply to Perumatty, Pattenchery, Elapully and Nallepilli panchayats under the taluka. The project was envisaged in three phases. Phase 1 was constituted of the development of production infrastructure including the intake arrangement and pump house on Chittur river and an 18-MLD WTP, both located in Kozhinjampara panchayat under Chittur taluk. Phase 2 is constituted of the construction of four OHSRs at Kanakkampara in Nallepilli panchayat, Chamiyarkalam in Perumatty panchayat, Kochikkadu in Pattenchery panchayat all in Chittur taluk, one OHSR at Elapully in Veterinary Hospital compound in Palakkad Taluk and construction of 23 km of pipeline network from intake arrangement to OHSRs. Phase 3 consists of construction of OHSR at Meenakshipuram irrigation compound in Perumatty panchayat in Chittur taluka and laying of 440 km distribution pipeline network to connect to about 14,500 individual households under the four panchayats. While Phases 2 & 3 are part of the Palakkad project, Phase 1 facilities including the WTP are associated facilities. At the time of the review, Phase 1 construction had been completed and construction on two of the five OHSRs was underway. All the facilities for this project and associated facilities are on land that was in possession of GoK departments.  

-The four hospital projects are: 

a) Government Medical College, Thiruvananthapuram (GMCT project) - The project involves demolition of existing buildings and construction of: a new operation theatre (OT) cum surgical ward complex in a nine storeyed building with a built up area of 17,162 m2; new medical laboratory technology (MLT) Block in a six storeyed building with a built up area of 4202 m2; and new Sree Avittom Thirunal (SAT) Paediatrics Block in a 11 storeyed building with a built up area 32,315 m2. The project also includes provision of ancillary/support facilities & infrastructure including: transformers; diesel generator sets; HVAC; firefighting system; public surveillance and public address system; telephone and internet network; automatic manifold system; pneumatic tube system; and water and wastewater system consisting of water storage tanks & rainwater harvesting tank. All of these structures are standalone and not connected to other structures or each other. Construction of the OT cum surgical ward complex is proposed to be carried out after demolition of the existing general wards and the MLT building will be constructed after demolition of the existing MLT block. At the time of the review, the demolition of existing buildings and construction of proposed buildings was yet to be initiated. The entire proposed project will be undertaken in the existing 140-acre premises of GMCT. The PIA for this project is INKEL. 

b)  Government Medical College cum Hospital, Konni (GMCH Konni project): The project includes construction of: hospital block extension with built up area of 13,644 m2; medical college extension and administrative block with built up area of 6860 m2; hostels with built-up area of 9,540 m2; dean’s house and employee quarters with built-up area of 14,644 m2; autopsy complex with built-up of area 409 m2; laundry complex with built-up area of 320 m2; and auditorium complex with built-up area of 7,815 m2. The total built-up area proposed under the project is 52,232 m2. The project also includes support infrastructure including: water supply network, STP and effluent treatment plant (ETP); solar water heaters and heat pumps; air conditioning and ventilation system including a 200 TR (tonnes of refrigeration) chiller; fire protection system; elevators; two 400KVA transformers; extra low voltage (ELV) system comprising of fire alarm system, public address system, closed circuit television (CCTV) system, data and telephone system, and patient token system; organic water converter/ bio gas plant; waste storage area and rainwater harvesting pond. The entire project is proposed within the existing 50.9-acre GMCH Konni site in Konni. Hospital block and medical college are the extension of the newly built hospital and medical college buildings, respectively. The other structures are standalone. The PIA for this project is HITES. At the time of the review, GMCH Konni was under partial operation with only outpatient department services. 

c) Government General Hospital, Kottayam (GGH Kottayam project): The project includes: construction of a new 10 floor hospital building with built-up area of 26,649 m2; development of ancillary facilities such as central medical gas plant, central sterile supply department, power facilities, laundry, STP, rain water harvesting, and mortuary. Construction of the new hospital building is proposed to be carried out after demolition of existing buildings..  At the time of the review, the demolition of existing buildings and construction of proposed buildings was yet to be initiated. The project will be developed in the 9.5-acre premises of the existing hospital building. The proposed structures are all standalone and not connected to any existing or proposed structures. INKEL is the PIA for this project. 

d)  Government General Hospital, Kozhikode (GGH Kozhikode project): The project includes: construction of a new eight storeyed 335 bedded surgical block with built up area of 17,062 m2;  construction of four storeyed new common amenities block with built up area of 2080 m2 ;  development of external infrastructures such as internal roads, compound wall, hospital entrance points, STP of 300 KLD capacity and rain water harvesting tank of capacity 150,000 liters. . New surgical block will be constructed after demolition of existing residential block, new common amenities block will be constructed after demolition of existing de-addiction center and the proposed new residential block will be constructed after demolition of the existing pharmacy and lab areas. The entire project is proposed within the 12.75-acre premises of the existing hospital. The PIA for this project is INKEL. At the time of the review, construction on each of the four hospital projects was expected to commence in July 2021 and the completion time is 36 months.                                                   

Accoprding to the bank, the key environmental and social issues related to the project and reviewed at appraisal are: capacity of KIIFB, PIAs and contractors to build the facilities in accordance with IFC PSs; emissions to air, water and land during construction; adequacy of proposed facilities to manage emissions to air, land and water including hazardous wastes during operation stage; labor working and living conditions; community health, safety and security; life and fire safety provision in design of hospital projects; management of water resources, wastewater, solid wastes and hazardous wastes and materials; emergency preparedness and response; and stakeholder engagement.      

While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards

PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and Working Conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 - Community Health, Safety and Security
PS 6 - Biodiversity Conservation and Sustainable Management of Living Natural Resources

IFC’s investment is through a local currency green financing package of US$150 million (equivalent in INR) to KIIFB. The loan tenor is up to 10 years with a two-year grace period. IFC may mobilize around US$50 million equivalent in INR from parallel lenders. 

IFC will provide long-term financing without any sovereign guarantee to a subnational entity in India. Long-term financing is expected to play a countercyclical role. IFC's proposed support to the State of Kerala will be especially relevant to help the State diversify its local currency funding sources. IFC will also deliver a comprehensive package of advisory services to help KIIFB implement the construction of water and hospital expansion projects according to international environmental and social (E&S) best practices and build up its E&S capacities, certify the hospital projects as green buildings using IFC's EDGE tool, help KIIFB develop a Green Financing Framework, and provide KIIFB with guidance and capacity-building for incorporating climate resilience into its operations.                     

Kerala Infrastructure Investment Board
Ajosh Krishnakumar
Deputy General Manager
+91 (0471) 2780900
agm.ifg@kiifb.org
KIIFB, 2nd Floor, Felicity Square, MG Road, Statue, Thiruvananthapuram – 695001, Kerala, India.
https://kiifb.org/

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