Geothermal handbook: PlanninG and Financing power Generation t e c h n I c a L r e p o r t 2 / 2

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T h E w O r L d B A N k S A F E g u A r d P O L I C I E S A P P L I C A B L E T O 
G e o t h e r m a l P r o J e C t S
The World Bank’s environmental and social safeguard policies are often regarded as the most 
comprehensive set of policies established for lending institutions to ensure that investment projects 
do not harm the environment or social well-being of people in the project area. The WBG currently 
has eight environmental and social safeguard policies for investment lending: OP/BP 4.01 on 
environmental assessment, OP/BP 4.04 on natural habitats, OP/BP 4.09 on pest management, OP/BP 
4.10 on indigenous peoples, OP/BP 4.11 on physical cultural resources, OP/BP 4.12 on involuntary 
resettlement, OP/BP 4.36 on forests and OP/BP 4.37 on dam safety. 
Depending on the nature of the project, one or more of these policies are usually triggered —that 
is, policy requirements have to be addressed through specific actions and documentation must 
be developed as part of project appraisal. For geothermal power projects, the OP/BP 4.01 on 
environmental assessment is particularly relevant, and some of the other seven policies may also 
apply. 
OP/BP 4.01 requires screening (categorizing) projects into one of four environmental categories 
denoted as A, B, C, or FI, which determine the scope and depth of environmental assessment (EA). 
Category A is reserved for projects that are likely to have significant adverse environmental impacts 
that are sensitive,
i
diverse, or unprecedented. A proposed project is classified as Category B if its 
potential adverse environmental impacts on human populations or environmentally important areas—
including wetlands, forests, grasslands, and other natural habitats--are less adverse than those of 
Category A projects. These impacts from Category B projects are site-specific; few if any of them are 
irreversible; and in most cases mitigation measures can be designed more readily than for Category 
A projects. A proposed project is classified as Category C if it is likely to have minimal or no adverse 
environmental impacts. A proposed project is classified as Category FI if it involves investment of WBG 
funds through a financial intermediary (FI), in subprojects that may result in adverse environmental 
impacts. For an FI project, screening subprojects may ultimately lead to assigning the subprojects 
categories similar to A, B, and C for projects.
The application of OP/BP 4.01 to geothermal power projects and the resulting scope of the EA will 
inevitably vary from project to project. Category B environmental assessment is usually the most 
appropriate for the majority of moderately sized geothermal development projects. Category A may be 
triggered in some complicated cases—for example, due to factors such as the presence of sensitive 
ecosystems in close proximity to the project site, a very large scale of the geothermal installation (e.g., 
several hundred megawatts), unfavorable chemical composition of the geothermal fluid (e.g., high 
content of H
2
S), or unstable geology causing concerns about land subsidence or induced seismicity. 
i 
A potential impact is considered “sensitive” if it may be irreversible (e.g., lead to loss of a major natural habitat) or raise issues covered by 
OP 4.04, Natural Habitats (http://go.worldbank.org/PS1EF2UHY0); OP/BP 4.10, Indigenous Peoples (http://go.worldbank.org/UBJJIRUDP0); 
OP/BP 4.11 (http://go.worldbank.org/IHM9G1FOO0), Physical Cultural Resources or OP 4.12, Involuntary Resettlement (http://go.worldbank.
org/GM0OEIY580).

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The EA for a Category A project requires a careful analysis of alternatives with respect to selection of 
the project site, scale, choice of technology, etc. Extensive consultation with the affected groups of 
people is required at key stages of EA preparation. The EA report, sometimes consisting of several 
volumes, is written by specialists who must be independent from the project developer. A detailed 
environmental management plan (EMP) is also required, covering all significant environmental 
impacts and risks expected to result from the project (during both construction and operation, and in 
certain cases decommissioning) and specific measures to mitigate them. A program of institutional 
strengthening for the local staff involved in the implementation of the project also will be typically 
proposed in the EMP. Costs and budgets for mitigation and institutional strengthening measures have 
to be specified. Finally, a monitoring plan is also included as part of the EMP. The monitoring plan 
specifies the indicators to be monitored in order to ensure that the project is operating within the limits 
of environmental sustainability.
For Category B projects, the scope of the EA is typically narrower than for Category A projects, and the 
EMP rather than an EA report may be the main document resulting from the EA. Public consultation is 
still required but may be less extensive than for Category A projects.
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However, the EA for a Category 
B project still requires considerable effort and resources. The indicative list below gives an idea 
about the nature of some of the impacts and risks that may be covered in an EMP for a Category B 
geothermal project.
• 
Solid waste generated during well drilling (drilling mud and cuttings) and other solid waste
• 
Risk of contamination of ground water aquifers during well drilling
• 
Risk of intrusion of geothermal steam or water onto the surface during well drilling (blowout)
• 
Risk of accidental discharge of waters to rivers or onto land surface during production tests of
wells
• 
Interruption of traffic during pipeline construction
• 
Damage to soil and road surfaces during construction works for pipelines, power plant, and
other structures
• 
Damage to or removal of trees caused by pipe laying, power line construction, and building
construction works
• 
Risk of destabilization of geological formations caused by well drilling
• 
Risk of causing damage to environmentally sensitive areas on the ground
• 
Noise and dust from the construction sites
• 
Risk of intrusion of geothermal steam or water onto the surface during operation as a result of
a rupture at the well head or in the steam gathering system
ii 
For all Category A and B projects proposed for WBG financing, the borrower consults project-affected groups and local nongovernmental 
organizations (NGOs) about the project’s environmental aspects and takes their views into account. For Category A projects, the borrower 
consults these groups at least twice: (a) shortly after environmental screening and before the terms of reference for the EA are finalized; and 
(b) once a draft EA report is prepared. In addition, the borrower consults with such groups throughout project implementation as necessary to 
address EA-related issues that affect them.
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G e o t h e r m a l H a n d b o o k : P l a n n i n g a n d F i n a n c i n g P o w e r G e n e r a t i o n 
• 
Impacts on soil and groundwater aquifers from possible pipeline leakages
• 
Risk of failure of reinjection equipment
• 
Noise pollution from the operation of the power plant and cooling towers
As noted above, the EMP needs to describe the mitigation measures for each of these impacts or risks 
and detail a monitoring plan.
For Category C projects, no further EA action is required beyond the screening process that assigns 
the category. However, assigning Category C to a geothermal power project is very unlikely to be 
appropriate, except for those cases in which the project does not involve any physical installation or 
construction activity and consists only of technical assistance.
Key documents such as EA reports, EMPs, and minutes of public consultation become a matter 
of public record and are available from the WBG’s InfoShop.
iii
The EMP is also often referenced in 
the legal documents for the lending operation (e.g., loan agreement), which makes the borrower’s 
commitment to the EMP legally binding. More complete information about the WBG’s environmental 
and social safeguard policies is available on-line at the permanent URL site http://go.worldbank.org/
WTA1ODE7T0.
iii
World Bank InfoShop’s mailing address is 1818 H Street NW MSN J1-100 Washington DC 20433, USA.

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