Actis South Africa Solar

Okavango Biology Mauritius Limited (“the Guarantee Holder” or “GH”) is seeking MIGA Guarantee for the equity and potential shareholder loan investments into the construction and operation of two greenfield solar power plants in South Africa, specifically: (i) a 46 megawatt (MW) solar power plant and substation (“Aggeneys”); and (ii) a 86 MW solar power plant, substation and 132 kilovolt (kV) 600 meter transmission line to the Paulputs substation near Pofadder (“Konkoonsies II”) (collectively, “the Project”).

The Guarantee Holder is a wholly-owned subsidiary of Actis Energy 4 LP (“AE4”), a fund managed by the private equity firm Actis of the United Kingdom. AE4 is acquiring stakes in the Project from Denham Capital, a private equity firm, and would be the majority shareholder (60%). The power plants are part of Round 4 of the Renewable Energy Independent Power Procurement Program (“REIPPP”).

60% of the power plants are currently owned by BTSA Cooperatie Netherlands (“BTSA”) who in turn wholly owns BioTherm Energy (Proprietary) Limited (“BioTherm”), an African renewable energy development platform, founded in 2003 and acquired by Denham Capital in 2008.  The remaining shareholders are the local community trusts and Matshelo Energy 8 Proprietary Limited, an entity owned by Thebe Investment Corporation and the Thebe Foundation. BioTherm is the developer of the power plants, while BTSA is the main shareholder.

The electricity generated by the plants will be sold to Eskom SOC, the state-owned power utility, under separate 20-year Power Purchase Agreements (PPA). The power plants are currently under construction and the Engineering, Procurement and Construction (“EPC”) Contractor for both plants is a joint venture between ET Solutions (ETS) and Canadian Solar. It is anticipated that the commercial operations date (“COD”) for the Aggeneys power plant will be October 2019, while COD for Konkoonsies II will be March 2020. Once operational, the power plants will be managed by ETS, as the Operations and Maintenance Contractor.

The power plants are located approximately 60 kilometers from each other, within Khai-Ma Local Municipality, Namakwa District Municipality in the Northern Cape Province. Khai Ma Local Municipality is one of the least populated municipalities in the Namakwa District. Both plants are located on leased farm lands (willing lessor-willing lessee) in rural, sparsely populated areas. No physical or economic displacement was required for either of the power plants. The closest community to the Konkoonsies II site is approximately 30 kilometers (km) away and the closest town to the Aggeneys site is about 3km away.

In addition to the solar power plants, Actis is also seeking MIGA coverage for two wind power projects, considered in a separate ESRS document.

The Project is categorized as a B under MIGA’s Policy on Environmental and Social Sustainability (2013). Key environmental and social (E&S) issues are expected to include: (i) development and implementation of a stakeholder engagement plan; (ii) occupational health and safety of construction workers, specifically heat stress; and (iii) solid waste management.

While all Performance Standards (PSs) are applicable to this Project, our current information indicates that the Project 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

The site for the development of the Project was leased by BioTherm on a willing-lessee, willing-lessee basis. Both sites are located on individual farms where land has been leased from the landowners and no permanent acquisition or purchase of the land is anticipated. Therefore PS5:  Land Acquisition and Involuntary Resettlement is not applicable.

Flora and Fauna Protection Plans have been developed for the power plants and a review of these plans indicates measures commensurate to the protected status of plant species and no further action is required, therefore PS6: Biodiversity Conservation and Sustainable Management of Living Resources is not applicable. Biodiversity impacts are managed under PS1.

There is no indication or evidence of indigenous people residing in or having cultural ties to the Project area, thus PS7: Indigenous Peoples does not apply. PS8 (Cultural Heritage) is not triggered except for the need to implement the “chance finds” procedure that has already been developed for the construction and operations phase of the Project.

In addition to the Performance Standards, the World Bank Group (WBG) Environmental, Health and Safety (EHS) General Guidelines; and sector specific guidelines for Electricity Transmission and Distribution apply to this Project.

The following documents were reviewed by MIGA:

• Ibis Consulting, Project Biology: Environmental and Social Due Diligence, January 2019.
• Orlight SA (Pty) Ltd, Final Environmental Impact Assessment (EIA) Report for the Proposed Development of the Aggeneys Solar Photovoltaic Power Plant in the Northern Cape Province, July 2012.
• EScience Associates, EIA for the Proposed Development of a Photo-Voltaic Solar Power Generation Plant on Portion 6 of the Farm Konkoonsies 91 Near Pofadder in the Northern Cape, May 2013.
• Savannah Environmental, Aggeneys and Konkoonsies II PV Solar Energy Facility Environmental Management Programme, March 2016.
• ETS, Stakeholder Engagement Plan for Aggeneys and for Konkoonsies II PV Solar Energy facility, March, 2019.
• BioTherm Energy, Aggeneys and Konkoonsies Risk Registers, March 2019.
• BioTherm Energy, Integrated Environmental, Social, Occupational, Health and Safety; Human Resources and Labor; and Security Policies, August 2018.
• Savannah Environmental, Aggeneys and Konkoonsies II PV Solar Energy Facility Environmental Compliance Monitoring Reports, March 2019.
• ET Solutions Environmental, OHS, Security and Smoking Policies, 2018.
• ET Solutions Emergency, Transport, Traffic, Waste Management, Hazmat, Flora and Fauna, Dust and Waste, Solid Waste Management, Water Efficiency and HSE Plans for the Aggeneys Power Plant.
• ET Solutions Transport, Traffic, Waste Management, Hazmat, Flora and Fauna, Dust and Waste, Solid Waste Management, Water Efficiency, Resource Plan and HSE Plans for the Konkoonsies II Power Plant.
• Various Stakeholder Engagement Meeting Minutes.

MIGA’s review also included a visit to the Project site in April 2019, which also included meetings with the GH, the GH’s Environmental and Social Due Diligence (ESDD) Consultants, the EPC Contractor, BioTherm, local communities and the local municipality.

MIGA’s due diligence review considered the environmental and social management planning process and documentation for the Project, and identified gaps, if any, between these and MIGA’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 ESRS. Through the implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.

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

Environmental and Social Assessment and Management Programs

Environmental Impact Assessments (EIA) were carried out for Aggeneys and Konkoonsies II by local E&S Consultants in 2012 and 2013 respectively. Environmental Authorizations (EA) were received for both power plants in 2013. The EIAs for the power plants included Environmental Management Programmes (EMPrs) defining management programs related to risks and impacts identified in the EIA during the pre-construction, construction, rehabilitation, operation and decommissioning phases. These EMPrs were then integrated in the EPC management programs and plans are currently being implemented in the construction phase. For the rehabilitation, operation and decommissioning phase, the GH will also ensure full implementation of the EMPrs in line with national legislation.

In 2016, an Environmental and Social Due Diligence (“ESDD”) for the power plants was carried out by international consultants (WSP) and an E&S Equator Principles Action Plan (“EPAP”) based on the requirements of the Performance Standards and in line with the equator principles was developed. Action items that remain open from the 2016 EPAP include: (i) implementation of an Environmental and Social Management System (“ESMS”); and (ii) development and implementation of an improved Chance Find Procedure. A detailed and comprehensive Chance Finds Procedure has already been developed for implementation during the construction and operations phases of the Project.

The Project is currently implementing the EHS management programs developed as part of the EMPrs, while the EPC Contractor has also developed and is implementing a number of EHS management plans for the construction phase. The Project will therefore develop and implement an overarching ESMS framework or manual for the construction and operation phases of the wind and solar power plants in line with PS 1 requirements (ESAP action item #1). The ESMS framework will also incorporate the existing management plans and programs.  

Policy

BioTherm has an Integrated Environmental, Social, Occupational, Health and Safety Policy, which describes the Company’s commitment to the protection of the environment and people, the safety of its employees, as well as socio-economic development. The corporate policy applies to all aspects of its operations – construction, operation and maintenance; and is communicated to employees and other stakeholders.

Organizational Capacity and Training

BioTherm is responsible for the overall management and oversight of Health, Safety and Environment (“HSE”) implementation at the Project through: (i) the HSE Manager and (ii) Safety Officer/Agent for both sites, based in Johannesburg. Each plant also has the following HSE personnel on-site: (i) an independent Environmental Control Officer (“ECO”) from a local E&S Consulting Company (Savannah Environmental), responsible for the monitoring of compliance against the EMPr and EIA; (ii) an EPC Construction Health and Safety Manager; and (iii) an Environmental Officer.  Collectively the above HSE Officers at the sites are responsible for the implementation of the EMPrs, EIAs and additional HSE requirements. As per PS1, the Project will appoint suitably qualified personnel from within the HSE team to implement the ESMS during the construction and operations phase (ESAP action item #2).

In addition, there is personnel in charge of stakeholder engagement and community relations, as outlined in the Stakeholder Engagement section below.

Emergency Preparedness and Response

Emergency Response Plans (ERP) for both power plants have been developed as part of the EMPr for the entire Project life-cycle. The EPC Contractor has also developed and is implementing an ERP for the construction phase which management procedures responding to natural disasters, man-made disasters as well as deliberate actions such as sabotage, labor unrest, strikes, riots and bomb threats. As per the ERP, an Emergency Committee has been constituted on each site from members of the Project and EPC Contractor’s HSE personnel.

Monitoring and Review

At each power plant, the ECO compiles and submits monthly Environmental Compliance Monitoring Reports to the Project Team (BioTherm HSE Team on-site and in Johannesburg as we  as the EPC Contractor) as well as the Department of Environmental Affairs (DEA) in line with the requirements of the EA and the EMPr. The ECO keeps records of environmental incidents noted on site through an Environmental Incident Register and Non-Conformance Register that is included in the Report. In addition, monthly Health and Safety audit Reports are compiled and submitted to the HSE Manager and Project Team.

The Project will also submit to MIGA an Annual Monitoring Report (AMR) on environmental and social performance prepared in accordance with MIGAs Performance Standards and the WBG General EHS Guidelines and sector specific guidelines for Electricity Transmission and Distribution.

Stakeholder Engagement

Stakeholder engagement was initially undertaken as part of the power plants EIA process. Site specific Stakeholder Engagement Plans (SEP) have been developed by an external subcontractor for the EPC Contractor for the construction phase. In addition, a Stakeholder Engagement Manager based in Johannesburg has been appointed for the Project and each power plant has a BioTherm Community Project Officer (CPO), as well as an EPC Contractor Community Liaison Officer (CLO) on-site. The CPOs report directly to the Stakeholder Engagement Manager. The EPC Contractor holds quarterly community meetings (in both English and Afrikaans) to update the local community on construction progress and local employment and the CLOs are the contact point between the local community and the EPC Contractor.

It has been reported that the power plants have faced non-violent stakeholder challenges/protests related predominantly to recruitment opportunities. An overarching SEP will therefore be developed at corporate level, in line with PS 1, which should detail the engagement to be carried out during the operations phase of the Project and ensure coordination of engagement efforts at the construction phase. The over-arching SEP will incorporate the existing, site-specific SEPs and ensure that the Project also periodically updates the community on: (i) the E&S risks of the power plants; (ii) the grievance mechanism procedure; (iii) the community development program; and (iv) the plan for procurement of goods and services from local businesses, where possible (ESAP action item # 3). The Project will also include stakeholder engagement records in the AMR during the construction and operations phases.

External Communications and Grievance Mechanism

The construction SEP includes a comprehensive external grievance mechanism and grievance redress posters in both English and Afrikaans were observed during the ESDD site visit.   The Grievance Mechanism developed as part of the EMPr details the procedure for receiving and resolving grievances.

Cumulative Impacts

There are at least two additional solar PV projects proposed in the vicinity of the Aggeneys power plant as well as an existing 10MW solar power plant (Konkoonsies I), located approximately 60-100 km from Konkoonsies II and 32km northeast of Pofadder. Cumulative impacts were addressed adequately in the power plants’ respective EIA studies.

Biodiversity Management

Biodiversity studies were carried out for the power plants’ EIAs, as part of the baseline data collection. The biodiversity studies established: (i) the presence of Hoodia gordonii in the Aggeneys power plant site; and (ii) that while the Konkoonsies II site falls just south of a Critical Biodiversity Area (CBA), the development of the power plant will not impact the CBA. Plant Rescue and Protection Plans were therefore developed as part of the EMPrs with a recommendation that Hoodia gordonii be identified for translocation if found on either site. Translocation is currently ongoing and is being supervised by the ECO, as well as the EPC Contractor’s Construction, Health and Safety Manager on a regular basis. To date 15 Hoodia gordonii have been relocated from the Konkoonsies II site, and 18 from the Aggeneys site. There are also instructions regarding local fauna on site, although none of have been identified as having protected status. The Project also carries out training and tool box talks to emphasize the importance of not interfering with local fauna, including the risk of snake bites.

PS2:  Labor and Working Conditions

An estimated 266 employment opportunities will be created during the construction of the Aggeneys power plant, while 339 people will be employed for the construction of the Konkoonsies II power plant.  

Human Resource Policy and Procedures:

BioTherm has developed and implements a Human Resources (“HR”) and Labor Policy in line with the National Labor Code as well as the requirements of PS2. It includes provisions for a safe and healthy workplace; recruitment processes and practices; working conditions and terms of employment; training; non-discrimination and equal opportunity; retrenchment; and the grievance mechanism.  BioTherm has also prepared and implements an Employee Handbook, which is provided to all staff. There is however, no formal HR function at corporate or Project level as HR issues are dealt with by senior management (specifically the Chief Executive Officer and Chief Operations Officer) and contracts for BioTherm workers (in line with national requirements) have been developed by a legal firm. The Project will therefore develop an organizational chart that details the HR structure and persons responsible for HR (ESAP action item #4).

Employee Grievance Mechanism

An internal employee grievance procedure has been developed including a policy, procedure, form and issues /grievance tracking register and integrated grievance mechanism poster. Those responsible for HR issues will also monitor grievances raised, as per the commitment in the HR and Labor Policy. 

Occupational Health and Safety (OHS)

The EPC Contractor has developed and implements a HSE plan for both power plants. The HSE Plan provides roles and responsibilities, detailed provisions for the management of Health and Safety in relation to site activities, including blasting, excavation works, working at heights, and procedural requirements including, hazard identification and risk assessments, signage, communication and liaison, induction and training, permit to work and lock-out procedures; and audit, monitoring and reporting requirements. A Health and Safety Committee comprising of representatives from BioTherm and EPC Contractor’s HSE personnel has been formed. Both sites have trained first aiders as well as a paramedic.

The Project area experiences high temperatures especially in the summer months (mid-October to mid-February), where daily maximum temperatures of greater than 42 degrees Celsius (°C) are experienced. Construction workers are therefore at an elevated risk of heat stress, due to the strenuous nature of the work and the high temperature work condition, which makes them susceptible to illnesses such as heat stroke, heat exhaustion, heat cramps and heat rashes. While the construction workers are provided with breaks, recovery areas and drinking water, the Project will put in place a heat stress program/procedure, that includes training workers in heat stress awareness and first aid, as well as a stop work authority when temperatures reach or exceed 40 °C (ESAP action item #5).

Workers’ Organizations

While there is no impediment to workers joining a union should they wish to do so, none of the workers are unionized and the Project is not party to any collective bargaining agreements. Workers are however represented on the Health and Safety (H&S) Committee.

Worker Accommodation

No worker accommodation will be constructed, and the Project provides transport (buses) to and from the power plants from the nearest towns. The Transportation Plans developed for the power plants include measures to ensure that the drivers of these buses comply with traffic, transport and safety regulations.

PS3:  Resource Efficiency and Pollution Prevention

Greenhouse Gases

As these are solar projects, the greenhouse gas (“GHG”) emissions associated with the operations phase of the project are minimal and the Project is not required to quantify and report on GHG gases. The Project will however contribute to climate change mitigation, avoiding in aggregate 318,527 metric tons of carbon dioxide equivalent (tCO₂eq) per annum (pa).

Water Consumption

Each power plant is sourcing the water from the local municipality. The total annual water requirements for the construction phase is estimated at 6,000 cubic meters (m³) per annum, per power plant and 2,500 m³ per annum, per power plant for the operations phase. Water usage during operations is expected to be used for cleaning the solar panels.  The surrounding communities also have access to piped water and the Project’s water use does not compete with the local communities.

Each plant has developed a water efficiency plan for the construction phase that includes management actions for sustainable use of water resources and efficiency. The plants have also installed water meters to measure their own water consumption. As part of the ESMS, the Project will update the water efficiency plan for the operations phase (ESAP action item # 6).

Wastewater and Effluent

Temporary worker washing facilities have been provided for the construction phase of the Project and a licensed contractor has been employed to safely remove sewage from the sites. It is anticipated that these mobile toilets will also be used during the operations phase.

Waste

Site specific waste management plans have been developed for the construction and operations phases of the power plants. These plans include procedures for the handling, storage, transportation and disposal of general and domestic waste. The waste management plan should be updated to include procedures for: (i) the disposal of the solar panel packaging waste generated during the construction phase; (ii) disposal or management of broken/damaged solar panels during operations; (iii) disposal or management of operational and end-of-life panels at the end of the concession/during project decommissioning (ESAP action item #7).

PS4:  Community Health, Safety and Security

As mentioned previously, both power plants are located in rural, sparsely populated areas in one of the least populated municipalities in Namakwa District Municipality. As per the EIA, the potential risks to the local community in relation to the Project’s activities is road safety to pedestrians or other vehicle users in collision with Project traffic, as well as the potential for community exposure to disease through the introduction of any migrant workforce. Both sites have in place a comprehensive: (i) Traffic Management Plan, which details the requirements for the management of the Project’s public and traffic interface including specially: road signs warning for construction vehicles, procedure for traffic accident, contact procedure for emergency services, and dust suppression; and (ii) Emergency Response Plan in place for the event of a major incidents. All visitors and persons working at the site will be made aware of this as part of site induction, and there are planned regular emergency drills and testing of alarms. Given stringent regulated local content requirements, the risk of community exposure to disease via migrant workforce is anticipated to be a low to negligible risk.

Security Personnel

Site security is managed by a professional private security firm who provides trained, unarmed security personnel. A Security Policy in line with PS4 has been developed for the Project to ensure that security will be provided in a manner that does not jeopardize the community’s safety or the Security Provider’s relationship with the community and that is consistent with national requirements. As per the Security Policy, the Security Provider will ensure that security personnel have not been involved in past abuses and are adequately trained.

F.  Environmental Permitting Process and Community Engagement

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

• Orlight SA (Pty) Ltd, Final Environmental Impact Assessment (EIA) Report for the Proposed Development of the Aggeneys Solar Photovoltaic Power Plant in the Northern Cape Province, July 2012.
• EScience Associates, EIA for the Proposed Development of a Photo-Voltaic Solar Power Generation Plant on Portion 6 of the Farm Konkoonsies 91 Near Pofadder in the Northern Cape, May 2013.

The above listed documentation is available electronically as PDF attachments to this ESRS at www.miga.org.  It is also available for viewing at the following location:

BioTherm Energy (Pty) Ltd.

Building 1, Ground Floor,

Leslie Avenue East,

Design Quarter District, Fourways,

South Africa.

Contact: Sandhisha Jay Narain, HSE Manager (telephone + 27 11 367 4600)