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Ethiopia

Tulu Moye Geothermal Project

$52 million
Renewable Energy
ESRS
Proposed
Thermal

Project Facts

Project Facts

Project Facts

Ethiopia
Guarantee Holder
Tulu Moye SAS
Investor Country
France
Environmental Category
A
Date SPG Disclosed
September 05, 2018
Projected Board Date
November 01, 2018
Project Type
Non-SIP

This Environmental and Social Review Summary (ESRS) is prepared by MIGA staff and disclosed prior to the date on which MIGA’s Board of Directors considers the proposed issuance of a Contract of Guarantee. Its purpose is to enhance the transparency of MIGA’s activities. This document should not be construed as presuming the outcome of the decision by MIGA’s Board of Directors. Board dates are estimates only.

Any documentation that is attached to this ESRS has been prepared by the project sponsor, and authorization has been given for public release. MIGA has reviewed the attached documentation as provided by the applicant, and considers it of adequate quality to be released to the public, but does not endorse the content.

MIGA has been approached by Meridiam on behalf of Tulu Moye SAS (“TM SAS”) to cover TM SAS’s equity investment and shareholder loans to Tulu Moye Geothermal Operations Plc (“TMGO”). TM SAS is a company established by Meridiam and Reykjavik Geothermal (“RG”) to finance the development of the Tulu Moye Geothermal Project (“the Project”). The Project is being developed by TMGO, a locally incorporated special purpose vehicle (“SPV”). It involves the design, construction, operation and maintenance of a 520 MW steam and brine geothermal power plant. The Project will be implemented in four phases with a first phase of 50 MW capacity, followed by 3 phases of 100 MW, 100 MW and 270 MW, respectively, developed over a period of 8 years. It is currently planned that the first 50 MW is expected to be operational by 2021 and the full 520 MW be online by 2026.  The proposed MIGA guarantee will cover the exploration phase of phase 1 only; however, as the purpose of the exploration is to lead to development, this ESRS considers the full development of 520 MW. The Project is currently at the early stages of development of phase 1 (i.e. the potential for geothermal resources has been identified through surface exploration; the first two well pad sites have been identified and a tentative plant site has been proposed). The exact locations of wells, well pads, pipelines and the power plant will be determined in the detailed engineering design phase of the Project, following exploration drilling.

In addition to the power plant, the Project will include exploration and production drilling, establishment of well pads, access roads, water supply, quarries and a collection pipeline system. The Project will also require construction of a transmission line to connect the Project with the national grid, which will be considered an associated facility of the Project. The design and route alignment of the transmission line have yet to be determined. It is currently proposed that exploration drilling will require the establishment of 2 well pads (each 7,200 m2) on average 3 wells per well pad. Well pad sites will include storage facilities for water, mud, fuel and chemicals, pipes, and, accommodation and offices. Wells are expected to be between 1,500 m and 3,500 m deep. Lined ponds will be developed at each well pad to collect drilling fluids and geothermal brine. If an exploration well is sufficiently productive, it will become a production well. It is estimated that 14 – 16 wells will be required to generate 100 MW of energy, and therefore, eventually 70 – 80 production wells will be required to supply the 520 MW plant.  Assuming 3 wells per well pad, it is estimated that 23 – 26 well pads will be required for the 520 MW plant. It is estimated that the exploration phase (2 wells pads, separator plant and cooling tower) will require approximately 2.5 ha (25,000 m2) of land – approximately 1.5 ha for well pads and 1 ha for the separator plant and cooling tower. Additional land will also be required for access roads. Approximately 14 ha will be required for the 100 MW plant and ancillary facilities (i.e. lay-down area, offices, accommodation).  

The Project is located approximately 100 km south east of Addis Ababa in the Tulu Moye, Tero Desta and Anole kebeles (wards) of the Hitosa Woreda (district), Arsi zone, Oromia Regional State. Exploration drilling is focused on the Gnaro lava field between Lake Koka (to the north) and Lake Ziway (to the south). The Gnaro lava field is not suitable for cultivation, and there are no settlements in the lava field, which is primarily vegetated with trees and shrubs. The area adjacent to the Gnaro lava field is sparsely populated and primarily used for agriculture and livestock grazing. The closest town, Iteya, is located approximately 10 km east of the Project area. 

During exploration, approximately 170 people will be employed – 70 for civil works and 100 for drilling. During plant construction, the site work-force is expected to reach a maximum of 400 people. Exploration workforce will be housed in camps near the drilling sites. During plant construction, a worker camp will be established near the construction site. Approximately 45 employees will be required for operations. TMGO is currently in the process of engaging an Owner’s Engineer to support detailed design and the procurement of drilling and Engineering, Procurement and Construction Management (EPCM) contractors.

The Project is a Category A under MIGA’s Policy on Environmental and Social Sustainability (2013) because it has potentially significant adverse environmental and social (“E&S”) risks and impacts. The most significant E&S risks include: land acquisition and involuntary resettlement (mostly economic, but potentially physical, too); impact on water resources (water use and effluent discharge); waste generation (e.g. drill cuttings/ fluids); impacts on biodiversity; air, noise and nuisance odor emissions; and occupational and community health and safety (e.g. well blow-outs and pipeline failure). Additional E&S impacts include the potential cumulative impacts associated with the development of all four phases of the Project.

While all Performance Standards are applicable to this investment, current information indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

  • PS1:  Assessment and Management of Environmental and Social Risks and Impacts
  • PS2:  Labor and Working Conditions
  • PS3:  Resource Efficiency and Pollution Prevention
  • PS4:  Community Health, Safety and Security
  • PS5:  Land Acquisition and Involuntary Resettlement
  • PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resource

The area affected by the Project is predominately occupied by the Oromo ethnic group. Approximately 27 Oromo sub-groups have been identified in the Project area. None of these sub-groups (or the Oromo ethnic group) are considered ‘Indigenous Peoples’ as defined by PS7, and therefore PS7 does not apply. 

As part of the ESIA process, culturally significant sites in the Project area were mapped, and potential infrastructure sites have been selected to avoid disturbance on culturally significant sites. A ‘Chance Find Procedure’ has been prepared, and will be implemented during exploration and construction activities.

World Bank Group (WBG) Environmental, Health and Safety (EHS) General Guidelines, Guidelines for Geothermal Power Generation and Guidelines for Electricity Transmission and Distribution will also apply to this Project.

The following documents were reviewed by MIGA:

  • Tulu Moye Geothermal Development Project – Phase 1: Environmental and Social Impact Assessment (Parts I – III). VSO Consulting and TS Environmental. November 2017
  • Tulu Moye Geothermal Project Stakeholder Engagement Plan. Version 2. GIBB International and Reykjavik Geothermal. November 2017.
  • Gap Analysis Review against IFC Performance Standards for the Tulu Moye Geothermal Project in Ethiopia. ERM. September 2017
  • Environmental Baseline Study Report for Tulu Moye Geothermal Project. GIBB International. March 2016.
  • Community Development Program. Water Supply and Sanitation. Tulu Moye Geothermal Project. Reykjavik Geothermal. October 2017
  • Places of Social & Cultural Significance in and around the Gnaro Lava Field. Reykjavik Geothermal. July 2017

MIGA’s review also included a site visit in June 2018. During the visit, the team visited the Project area (including the proposed plant site and well pad sites) and had meetings with TMGO, representatives of local communities and relevant Government authorities (i.e. Hitosa Woreda, Oromia Region, Environment and Climate Change Directorate of the Ministry of Water, Irrigation and Energy).

MIGA’s due diligence review considered the environmental and social management planning process and documentation for the Project, and identified gaps between these and MIGA’s E&S requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period, are summarized in the paragraphs that follow and in the Environmental and Social Action Plan (“ESAP”) attached to this Environmental and Social Review Summary (“ESRS”). Through the implementation of these measures, the Project is expected to be designed and operated in accordance with MIGA’s Performance Standards.

PS1:  Assessment and Management of Environmental and Social Risks and Impacts

Environmental and Social Assessment:

An Environmental and Social Impact Assessment (“ESIA”) report has been prepared, which describes exploration drilling and production drilling, and the construction of well pads, access roads, water supply, quarries, pipelines, and up to 100 MW power station. While the locations of the well pads and power plant have been identified, the exact locations of the wells, flowlines, access roads and water supply will be determined following the exploration drilling and detailed engineering design phases of the Project. Additional impact assessment studies will be required when detailed design information is available and for expansion of the plant beyond 100 MW. The ESIA provides environmental and social criteria (e.g. noise, air emissions, odor, land use, cultural heritage), to guide selection of sites for Project infrastructure (for the 100 MW and beyond) to minimize environmental and social impact. This selection criteria have already been applied to identify the proposed well pad and plant sites, all of which have been sited to avoid physical and economic displacement.

During the ESIA preparation process, an independent consultant undertook a gap analysis review of the ESIA against the IFC Performance Standards. A gap analysis report was prepared, which included identification of gaps and recommendations to address the gaps. Gaps identified included the need for further social baseline work to confirm the absence of ‘Indigenous Peoples’ as defined by PS7 and a rapid biodiversity assessment to map habitats in the Project area according to PS6 definitions – modified, natural, critical. Further studies then confirmed that PS7 does not apply, and the ESIA was updated to address the remaining issues identified in the gap analysis report prior to submission to the Government.

While the ESIA focuses on the development of a plant with up to 100 MW installed capacity, it also identifies two primary cumulative impacts associated with the development of all four phases of the Project (up to 520 MW installed capacity): economic and physical displacement, and habitat loss and degradation (associated with Project activity, noise and air emissions). The extent of these cumulative impacts cannot be quantified at this stage, and TMGO indicates that a more detailed cumulative assessment will be undertaken with each progressive phase (ESAP Action 1). Baseline studies undertaken for the ESIA cover the entire Project area (including area for the development of all four phases). While, these studies and the ESIA will need to be updated following exploration, once the final design is known and as subsequent phases are developed (ESAP Action 2), the ESIA that has been undertaken thus far is consistent with the requirements of PS1 for this stage of the Project. The ESIA was approved by the Environment and Climate Change Directorate within the Ministry of Water, Irrigation and Energy in June 2018.

The Project will also require the construction of a transmission line to connect the plant to the national grid. This transmission line, which will be constructed by Ethiopian Electric Power (EEP), will be considered an associated facility (as defined by PS1) of the Project. The design (i.e. capacity and pole type) and route alignment of the transmission line have yet to be determined. As the line could result in physical and economic displacement, land clearance and habitat destruction; and impact on birds in the Project area, a full ESIA will be undertaken by EEP prior to construction (ESAP Action 3).

Management Program and Monitoring:

RG implements an integrated management system that is consistent with the requirements of ISO 9001 (Quality Management), ISO 26000 (Social Responsibility), OHSAS 18001 (Health and Safety Management) and ISO 14001 (Environmental Management), and TMGO is in the process of developing its own integrated management system (quality, environment, health and safety and social responsibility) area, a full ESIA will be undertaken by EEP prior to construction (ESAP Action 4).

A framework for an Environmental and Social Management Plan (“ESMP”) was prepared as part of the ESIA, which describe the roles, resources and responsibilities for ESMP implementation. The ESMP also provides the Environment, Health and Safety Policies of RG. TMGO will prepare their own policies as part of the integrated management system. Under the framework ESMP, a series of site specific management plans (e.g. noise, air quality, biodiversity) have been prepared. A monitoring plan has also been prepared, which identifies the responsible parties, roles and procedures for implementing the monitoring program (i.e. frequency, methodologies, locations / number of monitoring sites). Drilling and EPCM contractors will be required to prepare policies and ESMPs consistent with the overall project policies and site specific ESMPs (ESAP Action 5). Prior to operations, the integrated management systems and ESMP will be adapted for the operational phase (ESAP Action 6).

TMGO will also prepare a ‘Contractor Management Plan’ to guide overall management of the contractors and any sub-contractors (ESAP Action 7). The Contractor Management Plan will specify the environment, health and safety requirements for contractors, including requirements for monitoring and reporting. It will also include a mechanism to address non-compliances.  

Organizational Capacity and Training:

TMGO has engaged an Environmental and Social Manager to oversee the implementation of the environmental components of the integrated management systems and ESMP. The Environmental and Social Manager has previous experience in geothermal energy and with implementing an IFC Performance Standard-compliant environmental and social management system. A Community Liaison Officer (“CLO”), who is a resident of the Tulu Moye Kebele, has also been engaged. This is the appropriate level of environmental, health and safety staff at this stage, but as the Project proceeds to exploration and construction, additional environment, health and safety officers will need to be engaged. RG also has the technical capacity and environment, health and safety expertise to support TMGO.

Reporting:

Reporting commitments will be specified in the TMGO integrated management system. During exploration and construction, reporting will be at least monthly, and will include: summary of exploration activities; number of contractors employed; number of environment, health and safety incidents; description of environment, health and safety incidents (if any), waste generation (including amount of drill cuttings generated and disposed of during the month); water use; summary of community engagement activities and grievance register. Regular internal audits will also be undertaken by the Environmental and Social Manager, Owners Engineer and health and safety consultant. The Project will also be required to provide MIGA with an Annual Environmental and Social Monitoring Report (“AMR”).

 

Emergency Preparedness and Response:


An Emergency Preparedness and Response Plan (“EPRP”) will be prepared by TMGO as part of their integrated management system (ESAP Action 8). Contractors will be required to have their own EPRP, which is based on the TMGO EPRP. The EPRP will include procedures for incident and emergency management, call out and mobilization, line of responsibilities and roles, interfaces with external organizations and institutions, contingency plans for specific scenarios and a communications directory. The EPRP will include consideration of worker and public injuries, property damage, fire, environmental damage and natural disasters.

 

Stakeholder Engagement

 

Stakeholder engagement was initially carried out with national and local (regional, woreda, kebele) government officials in 2008. Meetings were also held with local farmers prior to the geoscience (i.e. geology, geochemistry and geophysics) field work, and with non-governmental organizations and civil society organizations operating in the woredas affected by the Project (e.g. USAID / Power Africa, SOS Children’s Villages).

 

Engagement with the potentially affected communities was undertaken in as part of the ESIA process. Initially, engagement started with baseline socio-economic surveys at a sample of 742 households. In May and June 2015, consultation on the draft ESIA was undertaken with approximately 40 meetings held, including public meetings, meetings with Kebele leadership, women’s groups and Zone and Woreda officials. Prior to each meeting, a non-technical summary and comment forms in English, Amharic and Oromiffa were distributed. The full Draft ESIA and Stakeholder Engagement Plan (“SEP”) were also made available (in English) to all participants. After the ESIA was updated, an additional round of consultation meetings was undertaken in June 2017. These meetings provided information on project status, presented the updated ESIA and the proposed Grievance Redress Mechanism. The SEP was then updated in August 2017 to cover the feasibility phase, which includes civil work, pipelines, exploration and construction. The SEP will be updated prior to the operations phase (ESAP action 9). Ongoing stakeholder engagement will be required throughout the exploration, detailed design, construction and operations phases.

 

The results of the consultation indicate that the community is generally supportive of the Project. The primary benefits expected include jobs, business opportunities and electricity. Concerns include loss of farm and grazing land and physical displacement.

PS2:  Labor and Working Conditions

It is estimated that the proposed Project will generate approximately 170 jobs during drilling and 400 jobs at peak construction period. The operations phase of a plant with an installed capacity of up to100 MW plant will require approximately 45 employees. TMGO currently has 13 employees, and the maximum number of employees is likely to be 13 – 20. An Operations and management (O&M) contractor will also be engaged to manage the day-to-day operations of the plant.

Human Resource Policy and Procedures:

TMGO is in the process of developing Human Resources (“HR”) Policies and Procedures consistent with the requirements of PS2, which will include an HR handbook, Code of Ethics and recruitment procedure (ESAP action 10).  Contractors will be contractually obligated to apply TMGO HR policies and procedures.

Working Conditions and Terms of Employment:

The Project will avoid discrimination and ensure equality of opportunity during the recruitment processes of its own employees and workers engaged by third parties, and such provisions will be included in the HR Policies described above The Project will preferentially hire local people for unskilled jobs. Local residents with the appropriate skills will also be given priority for skilled jobs.

Employee Grievance Mechanism:

As part of the HR procedures, an employee grievance mechanism will be prepared in line with PS2 requirements.

Occupational Health and Safety:

An Occupational Health and Safety (“OHS”) consultant has been contracted to develop the OHS policy (ESAP Action 11) and monitor the contractor’s performance. The EPC and drilling contractors will prepare OHS plans and procedures, which will be reviewed and approved by the consultant (ESAP Action 12). This same consultant will also support implementation of the OHS plans and procedures. During exploration and construction, the risks include those typically associated with construction (e.g. noise, vibration, rotating and moving equipment, heavy vehicle operation and site traffic). The main health and safety risks associated with operation of the geothermal plant are potential fires and explosions, exposure to high levels of hydrogen sulfide, electrical hazards, noise and general accidents. Measures will be identified to address these risks and appropriate training provided to staff. 

 

Worker Accommodation:

 

During exploration, the drilling contractor will provide worker accommodation on the well pad. It is expected that up to 100 workers will be accommodated during drilling. For the construction and operations phase, the EPC, drilling and O&M contractors will have an accommodation camp near the proposed plant site. A Worker Accommodation Plan for exploration and construction will be developed for the exploration phase, and the accommodation at the well pads will be consistent with the guidance provided in the IFC / EBRD Guidance Note on Worker Accommodation (ESAP Action 13).

 

Supply Chain:

 

HR Policies and procedures will prohibit the employment of workers under 18 years of age. The potential for child and forced labor in the primary supply chain will also be monitored and contracts with sub-contractors and suppliers will include Environmental Health and Safety (“EHS”) requirements and provisions consistent with PS2 requirements to address labor issues including child and forced labor (ESAP action 14).  

PS3:  Resource Efficiency and Pollution Prevention

Resource efficiency considerations include water resource use and potential greenhouse gas emissions. Pollution risks include: noise, air emissions, effluent, solid waste generation and hazardous materials storage, use and handling.

 

Water Resource Use: Exploration drilling will require up to 50 liters per second (l/s) of water for cooling and to wash the drill cuttings. Operation of a 100 MW plant will require 20-25 l/s. It is proposed that a 5,000 – 10,000 m3 reservoir will be built for the exploration phase. Groundwater will be used to supply the reservoir. The impact assessment indicates that water abstraction for exploration is not likely to affect groundwater resources used by local residents, as the boreholes will be located in areas where there is no community water resource use. Also, studies indicate that the water to be used during drilling is not suitable for consumption. Water for operations will be sourced from deep wells located near the plant site. Deep well drilling sites will be identified during exploration, and studies will be undertaken to determine the potential impact of abstraction and water use (ESAP Action 15). If sourcing water from deep wells is not feasible, then water may be sourced from one of the nearby lakes.

 

Greenhouse gas emissions: Potential greenhouse gases (“GHGs”) associated with the emission of geothermal gases include carbon dioxide (CO2) and methane (CH4). Compared to fossil fuel power plants, however, emissions from geothermal power plants are very low. GHG emissions during drilling are expected to be insignificant. The composition of emissions during operations will be determined during exploration; regardless, they are expected to be limited. Average GHG emissions from geothermal energy generation are approximately 188 grams of CO2 equivalent per kilowatt hour (gCO2e/kWh).  

 

Noise: During exploration, noise emissions will primarily result from well drilling and blow-testing. Noise from drilling is expected to be in the range of 70-100 dB(A) within 10 m of the source. Based on the equipment to be used, the highest noise levels are expected to be 92 dB(A) at a 2-meter distance. Sound levels are expected to be within WBG EHS guideline values for nighttime noise (45 dB(A)) in residential areas at least 500 m from the drilling site. Based on topography, ground cover, and distance to the closest residence (approximately 500 m), drilling at the two (2) identified well pads is not likely to result in nuisance noise emissions. Modelling in the ESIA indicates that during blow-testing, noise levels may exceed guideline values at the residences closest to the site. This impact, however, is temporary. Site selection for wells will maximize the use of landscape barriers to minimize nuisance noise impacts, and a monitoring program has been developed to identify nuisance noise levels.  

 

During operation, noise is generated from the cooling towers, power plant and separators. Noise level from the cooling towers is expected to be around 80 dB(A). Modelling in the ESIA indicates that the WBG EHS guidelines residential nighttime noise limits will be met within 500 m distance from cooling towers and wells during operational phase. Noise from power plant and separators is expected to be around 55 dB(A) and residential nighttime noise limits are met within 200 m of the source. As with the siting of the wells, the proposed location of the plant has been selected to maximize the use of natural landscape barriers. 

 

Air emissions: The primary air emission of concern is likely to be hydrogen sulphide (H2S), which will be emitted during drilling and blow testing. Background air quality in the Project area is relatively pristine as there are no industrial activities near the Project. Dispersion modelling in the ESIA indicates that emissions of H2S are expected to be low and effects or air quality are limited to a small area around the well pad and injection pad sites and the power plant. The air emissions monitoring program in the ESMP includes suggested sites and frequency of monitoring air quality to identify any impacts from drilling and the plant.

 

Effluent: Drilling of geothermal holes and testing of wells entails the discharge of effluent (drill cuttings and fluids and brine). Drilling fluids may be water- or oil-based, and may contain chemical additives. Geothermal brine is likely to contain elevated levels of dissolved minerals compared to background levels. During exploration, drill cuttings and fluids and brine will be discharged to lined ponds. The ponds will allow drill cuttings and other sediment to settle and to ensure suitable quality before disposal in shallow wells and / or open fissures. During operations, geothermal fluid will be sent to the separator, which will separate steam and brine. It is proposed that the brine will be reinjected via reinjection wells located approximately 1 to 2 km from the extraction wells. In addition to safe disposal of geothermal fluids, re-injection of brine is expected to contribute to sustainability of the geothermal resource. The exact location of the reinjection wells, risks associated with reinjection and quality of reinjection fluid will be determined during exploration (ESAP Action 16).

 

Solid Waste: Main waste generation during the construction phase is expected to be excavation materials, concrete mix and concrete washings, iron and steel scrap, drilling mud, timber, paper and cardboard and household waste. Some hazardous wastes are also likely to be generated from the construction. Waste will be managed in accordance with national and international laws, and the PSs. The EPC and drilling contractor will be required to prepare a detailed waste management plan to minimize the adverse impacts the waste can have on the environment(ESAP Action 17). The EPC and drilling contractor’s waste management plans will include plans for management of sewage and other waste from worker accommodation and hygiene facilities. Emphasis will be placed on reducing waste, reuse and recycle, in that order. As indicated above, drill cuttings will be collected in a lined pond. Depending on the quality of the cuttings and sediment that settle out of the drilling fluid, it will be used as clean fill or disposed of in appropriate landfill. Solid waste generation during operations is expected to be limited to domestic waste.

 

Hazardous materials: The hazardous materials most likely to be used in considerable quantities during drilling are polymer liquid drilling fluid, bentonite and a thread lubricant and sealant. TMGO will develop a procedure to ensure that environmentally friendly (i.e. biodegradable, bioaccumulation potential-free and non-toxic) versions of these materials are used (ESAP Action 18). Material safety data sheets will be provided with all materials used in the drilling operation.

PS4:  Community Health, Safety and Security

Community health and safety issues during the operation of geothermal power generation plants include exposure to hydrogen sulfide gas; traffic safety (particularly during construction), infrastructure safety, impacts associated with in-migration of the project workforce and impact on community water resources. There is also potential for reinjection to stimulate minor seismicity; however, the likelihood of this in the Tulu Moye area is currently unknown and will be determined during exploration. The risk of H2S emissions are discussed above, and are expected to be low and limited to the area immediately surrounding the wells and plant site. A framework traffic management plan is included in the ESIA, and the EPC and drilling contractor will prepare detailed traffic management plans in line with the framework plan as part of the drilling and Construction ESMPs (ESAP Action 19).

 

Safety risks associated with Project infrastructure include exposure to physical hazards associated with the wells and related pipeline networks. Hazards may result from contact with hot components, equipment failure, or the presence of active and abandoned well infrastructure which may generate confined space or falling hazards. Project infrastructure will be sign-posted, and access will be prevented by fences or other physical deterrents. Measures, such as burying pipes or installing heat shields will be considered where there is risk of community contact with pipelines. The ESMP includes a section on community risks during the drilling and exploration phase. TMGO will update the community health and safety management section of the ESMP prior to operations (ESAP Action 20).

An in-migration management plan is in the process of being developed to address the potential migration to the project area (ESAP Action 21). The plan will include consideration of gender-based violence and HIV / AIDS transmission risks. As discussed in the section above, there is not expected to be any impact on community water resources.

Security Arrangements:

The drilling contractor will be responsible for engaging a security sub-contractor to provide security during the exploration phase, the EPC will be responsible for engaging a security sub-contractor during the construction phase and the O&M contractor will engage a security sub-contractor for Operations. TMGO will prepare a security management policy statement, and will ensure that each contractor (drilling, EPC and O&M) prepares a security management plan to guide management of security sub-contractors in a manner consistent with PS4 (ESAP Action 22). PS4 requirements will also be incorporated into contracts with the security sub-contractors.

PS5:  Land Acquisition and Involuntary Resettlement

Land will be acquired for the construction of the well pads, access roads and plant site. As discussed under PS1, the Project applies screening criteria to identify the sites for Project infrastructure, which include social considerations. All sites are selected to minimize the need for physical and economic displacement. There is not anticipated to be any physical displacement for exploration and construction of an up to 100 MW plant; however, the ESIA will be updated based on the findings of exploration drilling, which will confirm whether any physical displacement is required. The 2 initial well pads and proposed plant site are located on land that is currently not used for agricultural purposes, though the plant site is used intermittently for livestock grazing. Some economic displacement is likely to be required for the upgrade of the main access road, construction of roads to access exploration drilling and well pad sites, and the transmission line. The Project will need to acquire approximately 2.5 ha during exploration and 14 ha for construction and operation of the 100 MW plant. As the Project expands, additional land acquisition will be required for future well pad sites, access roads and expansion of the plant. A ‘Resettlement Policy Framework’ has been prepared, which is consistent with the requirements of PS5. Once the detailed design is available, a Resettlement Action Plan (“RAP”) and Livelihood Restoration Plan (“LRP”) will be prepared for exploration and construction of the 100 MW plant site (ESAP action 23). The RAP will be prepared and implemented prior to any impact on land resources.

PS6:  Biodiversity Conservation and Sustainable Management of Living Natural Resource

There are no protected areas (e.g. national parks, reserves or wildlife sanctuaries) within the Project area. The closest designated sites are Lake Koka (to the north) and Lake Zeway (to the south), which are located over 10 km from the Drilling area and are listed as Important Bird Areas (“IBAs”).

The biodiversity assessment undertaken as part of the ESIA determined that there is no ‘critical habitat’ (as defined by PS6) in the Project Area. Approximately 22% of the Project area is considered ‘natural habitat’ and 75% is considered ‘modified.’  Natural habitat in the Project area includes dry evergreen montane forest and scrubland vegetation. The forest covers approximately 19% of the Project area, and is found primarily on the Gnaro lava field. The natural forest has only one stratum of tree which is dominated by wild olive trees (Olea europaea cuspidata) and African Juniper (Juniperus procera). The scrubland comprises approximately 3% of the Project area, and is dominated by small shrubs and grasses and exists in the escarpments and valleys. Only one plant species within the Project area i.e. the African Sandalwood (Osyris lanceolata) is listed in CITES Appendix 2, which means it is not necessarily threatened with extinction now, but may become so unless trade in this species is closely controlled. The majority of the land in the Project area is used for human settlement, agro-forestry and livestock grazing (i.e. ‘modified’).

Biodiversity assessments indicates that the actual impact on mammals and birds in the project area is likely to be limited. Exploration activities, construction and operation of the 100 MW plant will result in some habitat degradation and possibly direct habitat loss at and in the immediate vicinity of the well pad and plant sites. Noise and human activity are also likely to displace wildlife species. There are no mammal or bird species of conservation significance utilizing the habitat in the Project area. A framework Biodiversity Management Plan, which identifies the general potential impacts and management measures to avoid, minimize and mitigate biodiversity impacts, has been prepared as part of the ESIA. Once the detailed design is available, a more detailed, site specific Biodiversity Management Plan will be prepared (ESAP Action 24). This plan will include measures and indicators to ensure no net loss of natural habitat as per the requirements of PS6.

The ESIA process started in 2016 with the preparation of comprehensive environmental and social baseline studies, an early stakeholder engagement plan and a resettlement policy framework. The initial draft (May 2016) was published for stakeholder consultation. Following consultation, a revised ESIA was prepared. The revised ESIA was then reviewed against the IFC Performance Standards by an independent consultant. The ESIA was updated again to reflect the findings of the independent consultant, and then submitted to the Government (Environment and Climate Change Directorate within the Ministry of Water, Irrigation and Energy) in April 2018. The Government provided comment, and the ESIA and ESMP were updated to address the comments. The ESIA was then approved, and TMGO received the Environmental Clearance Certificate in June 2018. Additional approvals will be required for expansion of the Project beyond 100 MW.

Stakeholder engagement has been ongoing since 2015, and has included community meetings, household surveys, focus group discussions, and meetings with CSOs and government authorities. A SEP is in place for the exploration and construction phases, which will be updated for the operations phase. A Grievance Mechanism has been developed and drafted as part of the SEP, and has been communicated to the local communities. A CLO has been engaged and introduced to the communities.

 

MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities.

 

In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.

 

Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.

 

Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

 

Compliance Advisor/Ombudsman
International Finance Corporation
2121 Pennsylvania Avenue NW
Room F11K-232
Washington, DC 20433 USA
Tel: 1 202 458 1973
Fax: 1 202 522 7400
E-mail:
cao-compliance@ifc.org