ARC Power Rwanda

Oikocredit Ecumenical Development Cooperative Society U.A. of Netherlands (Oikocredit), Triodos Groenfonds N.V. of Netherlands (TGF), and Triodos SICAV II of Luxembourg (SICAV)(acting for TRIODOS EMERGING MARKETS RENEWABLE ENERGY FUND)(“together the Guarantee Holders, or GH”) are seeking MIGA coverage for Breach of Contract (BoC) to cover for equity investments in ARC Power Rwanda Limited (the GH is a minority equity shareholder).  

ARC Power Rwanda Limited (the Project Enterprise, or PE), a subsidiary of ARC Power Limited of United Kingdom (ARC Power), has signed a Strategic Power Partnership Agreement (SPPA) with the Government of Rwanda (GoR) to implement a project which includes: a) The pre-financing, design, construction, commissioning, and short-term maintenance of medium (30 kV) and low voltage (0.5 kV) lines, transformers, and auxiliary components to interconnect approximately 150 villages in multiple locations around Rwanda (each an Extended Power Distribution Network or EPDN); and b) The financing, ownership, design, construction, operation, and maintenance of solar photovoltaic (PV) generation facilities that are located on the ground (each generation sites are around 2,500 m² or smaller) to provide electricity directly to approximately 25 to 30 Productive User customers in total, such as schools, health centers, local government offices, small and medium enterprises (SMEs), commercial centers, and business parks (ARC Generation Assets). The EPDNs and ARC Generation Assets together are the “Project". The Project plans to connect 30,000 households from around 150 villages on the Rwanda public power grid. 

ARC Power established the PE in September 2018 in Rwanda with a mini-grid model. PE has 3 existing and operational ARC Generation Assets and captive mini-grid networks in Bugesera and Gatsibo District in Rwanda. The ARC Generation Assets and its mini-grid networks in Bugesera and Gatisibo have connected 1,958 number of households, 3 schools, 2 dispensaries and 147 small businesses/town centers. In 2021, as the GoR’s grid expansion plan changed, PE altered its business model to support the GoR’s strategic change in focusing on-grid expansion alongside the development of distributed renewable energy generation units embedded in remote communities.  

Under the SPPA, Rwanda Energy Group (REG) a government owned utility company will be responsible to select the sites and facilitate the development rights for the sites within rural villages which will be connected to the national grid through the EPDNs. Under this agreement the PE will establish approximately 30,000 connections by the end of 2024 and will retain ownership of the ARC Generation Assets across the country, selling power directly to Productive Users and to the national utility at agreed tariffs. The ownership of each EPDN will be transferred to REG with a one-year warranty period upon completion after which REG will be responsible for operation and maintenance of the EPDNs.  

As part of the SPPA between the PE and REG, the PE will be responsible for the construction of medium voltage (MV) lines, the generation sites (solar panels) and LV lines to provide electricity access to approximately 150 villages. Households will be REG customers while productive users will be PE clients. Currently most of the households have no electricity connection, so most of the customers will be new users. However, there are households which have unformal solar connection on their roof if they can afford it. 

The construction labor force will be sourced from the local communities, as and when required, which means they reside in their residences and the Project will not include on-site accommodation facilities. Construction is expected to commence in December 2023 and will last approximately 12 months for the first phase that MIGA is supporting.  

This is a Category B project according to MIGA’s Policy on Environmental and Social Sustainability (2013). The Project is expected to have potentially limited adverse environmental and social (E&S) risks, which will be few, site-specific, largely reversible, and readily addressed through mitigation measures. 

Key Environmental and Social (E&S) issues associated with this Project relate to the PE’s capacity to implement the environmental and social management system, sites selection, land acquisition process, stakeholders’ engagement, water use risks, labor and working conditions, security management, solar panels supply chain, and community health and safety. These risks will be assessed against MIGA’s Performance Standards and relevant World Bank Group Environmental and Health and Safety Guidelines. Contextual risks are related to broader GBV in relation to Rwanda and surrounding countries and will be addressed in Project level code of conduct, training program and disciplinary procedures.   

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

• 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  

   There are no impacts related to the following PSs, thus they do not apply to this Project:PS6 Biodiversity Conservation and Sustainable Management of Living Natural Resources; PS7 Indigenous Peoples and PS8 Cultural Heritage, however, the standard chance find procedure requirement will apply. 

In addition to the World Bank Group General Environmental, Health, and Safety (WBG EHS), the World Bank Group Environmental, Health, and Safety Guidelines for Electric Power Transmission and Distribution (2007) will be applicable. 

MIGA environmental and social due diligence (ESDD) of this Project consisted of reviewing the following documents:    

• Rwandan Environmental Law N° 48/2018 of 13/08/2018 (Government of Rwanda, 2018) 
• Rwandan Law relating to expropriation in the public interest N° 32/2015 of 11/06/2015 (Government of Rwanda, 2015) 
• Rwanda Grid Code (Rwanda Utilities Regulatory Authority, August 2013) 
• Rwanda Reticulation standards for Electricity Distribution Planning, Construction and Maintenance (Rwanda Energy group, August 2020) 
• General Guidelines and Procedure for Environmental Impact Assessment (Rwanda Environmental Management Authority, (January 2006) 
• Ministerial Order N° 001/2019 of 15/04/2019 establishing the list of projects that must undergo environmental impact assessment, instructions, requirements and procedures to conduct environmental impact assessment (Government of Rwanda, 2019) 
• List of Authorized Environmental Assessment Experts (Rwanda Association of Professional Environmental Practitioners, July 2022) 
• Strategic Environmental Assessment for Rwanda Universal Energy Access Program (Energy Development Corporation Limited, June 2021) 
• Environmental Clearance Letter for the Project involving the construction and rehabilitation of medium voltage and low voltage lines (Rwanda Environmental Management Authority, September 2021) 
• Grievance Redress Mechanism Guidelines (Energy Development Corporation Limited, July 2022) 
• Guidelines N° 01/GL/EL-EWS/RURA/2015 on Right-of-Way for Power Lines (Rwanda Utilities Regulatory Authority, 2015) 
• Map of sites to be electrified in Kamonyi District (Rwanda Energy Group, July 2023) 
• Environmental & Social Management Plan (Arc Power Limited, October 2022) 
• Occupational Health & Safety Management Plan (ARC Power Limited, March 2019) 
• Community Health, Safety and Security Plan (Arc Power Limited, April 2022) 
• Emergency Response Plan (Arc Power Limited, March 2019) 
• Stakeholder Engagement Plan (Arc Power Limited, March 2019) 
• Waste Management Plan (Arc Power Limited, March 2019) 
• Anti-Harassment Policy (Arc Power Limited, October 2022) 
• Environmental Policy (Arc Power Limited, February 201) 
• Disciplinary Procedure (Arc Power Limited, September 2019) 
• Employee Grievance Procedure (Arc Power Limited, September 2019) 
• Whistleblower Procedure (Arc Power Limited, October 2022) 
• Code of Conduct: Working in the Field (Arc Power Limited, nd) 
• Performance Management Policy (Arc Power Limited, October 2022) 
• New Hire Recruitment Policy (Arc Power Limited, September 2023) 
• Standard Operating Procedure: Implementing Site Health and Safety 

In addition to reviewing the above documents, MIGA conducted its Environmental and Social Due Diligence (ESDD), which included a site visit to the Project sites in Rwanda from July 10-14, 2023, during which MIGA met with the project team (that included Project Chief Operating Officer, Head of Strategic Partnerships and Community Liaison Officer). During this meeting, MIGA discussed and reviewed the Project E&S documentation.  During the ESDD, MIGA E&S Specialist also met with the government agencies and officials including Rwanda Environmental Management Authority (REMA), Energy Development Corporation Limited (EDCL), Rwanda Energy Group (REG), Rwanda Development Board (RDB), the District of Kamonyi’s Vice-Mayor, and representatives from the local communities including Cell Executive Secretary Chiefs, and community members such as households and productive users. 

MIGA’s due diligence review considered the E&S 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 time 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 the Performance Standards. 

Key potential environmental and social (E&S) issues associated with the Project business activities are summarized in the paragraphs that follow.    

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

   Environmental and Social Assessment and Management System:  

The PE has developed a project- specific Environmental and Social Management System (ESMS) for the construction phase. The draft ESMS currently have draft Environmental and Health and Safety policies, a draft E&S organizational structure, and E&S management programs and plans (Stakeholders Engagement Plan (SEP), External Grievance Redress Mechanism, External Communication Plan, Emergency Response and Management Plan (ERMP), Community Health, Safety and Security Management Plan, Waste Management Plan), However, in reviewing the documents, the following gaps in line with the PSs were identified: E&S organizational structure and capacity, need to be finalized, Water Management Plan and  Security Management Plan, and a E&S Monitoring Plan need to be developed, traffic and transportation plan  and Environmental and Health and Safety policies need to be updated. Therefore, the PE will be required to update and finalize the Project specific ESMS for construction and operational phases to align it with MIGA PS 1 requirements (ESAP item). 

Policy: 

The PE’s Environmental and Health and Safety policies set out the company’s commitment to sustainability, including protecting the environment and enhancing the livelihoods of local communities. It also describes commitments to provide a safe workplace, transparent governance, compliance with laws and regulations and adhering to the requirements of the PSs.   

Identification of Risks and Impacts:    

The Rwanda Ministerial Order No 001/2019 of 15/04/2019 establishes the list of projects that must undergo environmental impact assessment (full Environmental and Social Impact Assessment (ESIA) or partial ESIA). Projects which are not within that list are those considered to be of low environmental and social risks and are exempted from performing an ESIA, and therefore receive an Environmental Clearance Certificate from Rwanda Development Board (RDB).  

Energy Development Corporation Limited (EDCL) conducted a Strategic Environmental Assessment (SEA) in 2021 for the Rwanda Universal Energy Access Program (RUEAP). The SEA report was approved in September 2021 by the Rwanda Environmental Management Authority (REMA) while requiring EDCL to carry out ESIA for any project that will be implemented under the RUEAP. The E&S impacts generated from the MV and LV lines construction will be mitigated by using the SEA and the Project Environmental and Social Management Plans (ESMPs) and their implementation will be monitored by the EDCL Environmental and Social Safeguards team. Based on that, EDCL is allowed to implement the projects involving the construction and rehabilitation of MV and LV lines without the requirement to conduct ESIAs. REMA issued in September 2021 the Project Environmental Clearance Letter for MV and LV construction. Under the RUEAP, full ESIAs remain required for the construction of high voltage (HV) lines, however there are no HV lines within the scope of this Project requesting MIGA’s coverage. 

During the construction phase of the Project, key risks, and impacts include health and safety (H&S) risks intrinsic to construction activities such as physical hazards related to the installation of poles, working at heights, and electrical components including exposure to live electrical current, land acquisition and destruction of landowners crops and assets, water sourcing, solar supply chain, and road safety. Pollution of water resources may arise at construction sites due to accidental spillage or leakage of polluting materials (fuel, paints, chemicals, hazardous waste).   

  During operations, key environmental and social risks include impacts waste management, dust emission, site security and access control, road safety, external and internal grievances management. The PE and REG will identify and manage key risks and impacts through the implementation of their respective ESMSs and ESMPs. 

There is currently no evidence of formal E&S screening criteria used by the PE during the site selection process. The PE has therefore committed to filling this gap by developing E&S criteria for its site selection process as per PS1 requirements. These criteria will detail and screen out high E&S risk items such as biodiversity (including avoiding installation of transmission lines along migratory routes or protected areas), physical displacement, and cultural heritage sites) be included in the existing ESMS and project level environmental and social management plans (ESMPs) (ESAP item). 

Management Programs:   

Various procedures and plans are detailed in the existing ESMS and Environmental Social Management Plans (ESMPs) as detailed above in the Environmental and Social Assessment and Management System section. However, the PE will need to develop Project specific ESMPs to be in line with MIGA’s PSs and WBG EHS guidelines for the construction and operations phases per the ESAP. The ESMS will provide the framework for the ESMPs. The ESMPs will include air quality, noise, water resources, solid waste, and health and safety amongst other topics. The management plans include details on monitoring actions, and the frequency of monitoring, along with the performance indicators and the responsible entity such as the EPC and O&M contractor.  

Organizational Capacity:  

The Head of Strategic Partnerships currently oversees the PE’s E&S risk management and E&S policy and procedure development and implementation supported by a Community Liaison Officer (CLO). To support the Head of Strategic Partnerships and CLO, the PE will be required to appoint 2 experienced and qualified Health Safety and Environment (HSE) officers (one at corporate level and another at project level) and two additional CLOs to manage the Project E&S risks in line with the MIGA PS1 requirements during Project construction and operation phases (ESAP item). The HSE officers will be responsible for the implementation of the ESMS and related plans and procedures including monitoring and reporting. The CLOs will be responsible for managing the project land acquisition process and social risks including engaging with communities and stakeholders. The PE will ensure that all the contractors and subcontractors comply with the national laws and MIGA PSs.   

Emergency Preparedness and Response:   

PE has developed an Emergency Preparedness and Response Plan (EPRP). The EPRP details emergency response procedures in the event of fire/explosion, medical emergencies, bomb threats, floods, traffic accidents, prolonged power outage, severe weather/storms, hazardous material spills and social unrest. The EPRP outlines procedures and organization, such that the PE personnel understand and effectively implement environmental protection procedures for both routine activities and unplanned events associated with proposed work. These procedures are directed at both the construction phase and the operation phase of the Project. The EPRP outlines (i) Accident and emergency risk identification and management;(ii) Emergency response procedures; (iii) Liaison with local emergency authorities; (iv) Engagement with communities on incidents and emergencies; (v)Specific response procedures for key risks; (vi) Emergency response training; and (vii) Record keeping on emergency response procedures and incidents. Per the EPRP fire extinguishers are strategically positioned at the company’s office and sites. The PE will ensure that fire extinguishers are functional, well maintained, and are regularly inspected and will conduct emergency response training, including at office and site level (ESAP item).   

   Monitoring and Review:    

As part of the ESMS, the PE will monitor and review the E&S performance of the project and undertake regular on-site E&S monitoring of the implementation of key E&S plans and programs during the Project construction and operation phases. The key E&S aspects to be monitored include: (i) solid and hazardous waste materials management, (ii) OHS, (iii) life and fire safety (iv) equipment maintenance, (iv) energy use, and (v) water usage among others, and implement key E&S plans and procedures.  As a condition of MIGA’s contract of guarantee, the PE will be required to provide MIGA with an annual E&S performance report. 

MIGA will also require periodic Annual Monitoring Reports from the PE that evaluate E&S performance against MIGA’s E&S requirements and will include sections on E&S risks and impacts, updates on development effectiveness indicators throughout the guarantee period. 

   Stakeholder engagement:    

The PE has been operating in Rwanda since 2018 and has built strong relations with government entities, local authorities, and local communities. A detailed Stakeholders Engagement Plan (SEP) has been developed for this purpose and ensures that the local communities and key stakeholders are properly informed of the various site developments, especially in relation to land acquisition and employment opportunities. The SEP includes a detailed list of key stakeholders including PAPs, community leaders, local government, central government agencies (TEG, EDCL, RURA, district mayors, Sector executive secretary, Cell executive secretary), non-governmental organizations, universities, and media. The SEP also highlights the various concerns of these stakeholders depending on their interest in the PE’s activities. An appropriate engagement approach and channel is used by the PE for each type of stakeholder. For example, the PE is introduced to the community by the village chief, and community meetings are attended by the PE customer service representative twice per month for a particular District to address any concerns or feedback from the community, inform the community members about the company and the work the company is doing within the community. This is a public forum where all members are provided with an opportunity to discuss any issues. To support the needs and accountability of the stakeholder engagement process, AP keeps records of all the activities undertaken in order to help in; decision making, actions, history, to measure the performance in all activities, and to make them available to the public. Should the various stakeholders require a record of engagement activities, these are readily available through the PE online record keeping system. 

External Communication and Grievance Mechanisms: 

The SEP defines the external communication approaches and Grievance Redress Mechanism (GRM) of the PE. Community meetings, direct engagement with communities, emails, posters at strategic points within the community, telephone call and SMS are the main communication channels. The GRM includes detailed procedures for the receipt, recording, and responding to grievances from the public. A dedicated customer service line number is also given to all customers and is operated 24 hours a day.  

REG has also established external GRM consistent with MIGA’s PS 1 requirements. This GRM will be used to manage any complaints received by REG as part of this Project. As part of this GRM, Project Grievance Redress Committees will be established at the Cell level, Sector level and District level. The Grievance Redress Committee is elected during community consultation meetings held between the District/Sector officials and the Project Affected Peoples (PAPs). The PE will regularly engage with REG to ensure that potential grievances are managed as per MIGA’s PSs. 

Ongoing Reporting to Affected Communities: 

The PE approach is to engage with the community through the village chief. Community meetings are attended by the PE’s customer service representatives twice per month for a particular Cell (lowest administrative subdivision level in Rwanda) to address any concerns or feedback from the community, and to inform the community members about the company and the work the PE is doing within the community. This is a public forum where all members are provided with an opportunity to discuss any issues. 

PS 2: Labor and Working Conditions   

As of July 2023, the PE has 29 permanent employees, and has no subcontractors’ workers except the EPC which will be appointed to construct the MV lines on behalf of the PE. For the purpose of this Project, the PE is planning a significant increase in its headcount, reaching 500 workers at the peak of the construction, including 425 temporary staff, all directly employed by PE. This headcount increase plan will be executed in line with the PE HR policy and recruitment strategy. 

Working Conditions and Management of Worker Relationship:  

The PE has a Recruitment Policy that covers all employees, which applies equal pay and benefits principles, and which highlights that the PE is an equal opportunity employer which does not discriminate against any candidate or employee on the basis of race, color, religion, sex, national origin, age, disability, sexual orientation, gender identity, or any other characteristic. There is also a Company Human Resources (HR) policy suite which includes Employee Grievance Procedure, Whistleblower Procedure, Performance Management Policy, Disciplinary Procedure, and an Anti-Harassment Policy with zero-tolerance when it comes to harassment or bullying of any kind or being under the influence of alcohol or drugs with dismissal without warning.  

A contract of employment is executed between the PE and each of its employees. Each employee is provided with a copy of the contract and is required to sign acceptance of the contract conditions when starting work. All employees are full-time, with contracts specifying the rights and responsibilities, compensation, and benefits, in line with Rwanda labor law and MIGA PSs.  

The PE’s HR policy and procedures will be updated to stipulate the terms of employment, such as wages and benefits, hours of work,  health, safety and security,  overtime arrangements and  compensation, annual and sick leave, maternity leave, bereavement leave, vacation and holiday, health insurance, disability benefit, death benefit, disciplinary actions, workers and employer’ rights and obligations, prohibition of forced or child labor, employee termination and end of service benefits, according to national labor regulations and PS2 requirements (ESAP item). During induction, the new hires are made aware of the terms and conditions of their employment as part of the hiring package.  

The PE has developed a Code of Conduct for the Project. The Code of Conduct, which also applies to all contractors and subcontractors, includes rules of interaction with customers and communities and reflect respect for local beliefs and customs. In addition, the Code of Conduct includes provisions related to zero tolerance towards sexual harassment, sexual exploitation and abuse and gender-based violence (GBV). 

A GRM is in place and permits anonymous complaints. The GRM aims to ensure that employees with a grievance relating to their employment can resolve their issues as quickly and fairly as possible through the appropriate channels. However, the current process mandates a thirty-day timeline to report any grievance and this requirement is restrictive to their employees. Therefore, the PE will be required to update their GRM and change the mandatory requirement process for employees to submit their complaints in thirty days in line with PS2 requirements (ESAP item). 

The HR policy does not impede workers from freedom of association and collective bargaining. The PE is committed to abide by the requirements of the Rwanda labor laws (Labor Law No. 66/2018 of 30/08/2018) which protects employees’ rights to freedom of association, collective bargaining, and strike in line with the requirements of PS2.The PE workforce is not unionized and as per the PE policies, workers are able to participate in the establishment of a union, or form a project forum, if not already members of an union. The PE confirmed that their policies comply with national requirements and that both are equal opportunity employers.  

Protecting the Work Force:  

The PE is committed to avoiding all forms of discrimination against their employees based on age, gender, sexual orientation, health, race, nationality, political opinions, or religious beliefs. The requirements of non-discrimination and equal opportunities will be extended to contractors and subcontractors as part of contractual agreements. The PE’s HR policy prohibits the use of any form of forced or compulsory labor. On child and forced labor, the PE do not employ forced labor or children and have committed to enforcing this requirement per the national labor laws and MIGA’s PS2 requirements.  All employees are required to provide their national ID and a security clearance certificate provided by police highlighting their birth date before their employment. 

Occupational Health and Safety:   

The key occupational health and safety (OHS) risks during the MV and LV line and PV project construction include working at height on the poles, electric shock, road traffic, slips and falls, potential hazards from on-site moving machinery, heavy load lifting, exposure to electric shocks and burns, and safety issues.  

PE has developed an Occupational Health and Safety (OHS) Management Plan that addresses health and safety management across all aspects of the Project and all current and future project sites. The OHS procedure for the construction and operations phases will cover the following issues: i) hazard identification and assessment; ii) construction site safety; iii) specific procedures for hazardous works, worker’s safety and training; iv) use of personal protective equipment; v) implement a worker’s health program to screen the health of workers and measures to manage diseases (such as Malaria etc ); vi) site supervision and audit procedures; and vii) incident investigations and reporting system and intervention measures (medical surveillance programs and first aid etc.). OHS procedures will be aligned with the EPRP, which will include fire risk assessment and control systems, fire alarm systems and drills, and emergency preparedness and planning. The PE will assess, track, and record its OHS performance during construction and operations. The HSE officer will record, and track OHS incidents through an incident tracker and will include OHS performance in its monthly reports to PE’s management during the construction and operations phases. 

Workers Engaged by Third Parties: 

Except the MV lines segment that will be implemented by REG employees on behalf of the PE, all other permanent and temporary workers will be directly hired by the PE. PE will also include in contractors’ contracts (REG) clause to comply with applicable PS2 requirements on child or forced labor and OHS. 

Supply Chain:  

The procurement of energy equipment will largely be managed by the PE. Locally sourcing may be done for smaller items depending on in-country availability. MV and LV electrical equipment, transformers, poles and cables, batteries, meters, cables, inverters, and switches to be used by the Project will be manufactured and sourced mainly in China, UAE, Germany, UK, USA, Rwanda, and East Africa.   

The PE will most likely procure the solar panels for the Project from Jinko Solar in Shanghai, China, as there are good supply chains into Rwanda. The PE will be required to conduct a supply chain risk assessment of the nominated primary solar suppliers and develop supply chain risk assessment procedure and a screening mechanism against risks for alleged forced labor in the solar supply chain (ESAP item). Consideration in the assessment should be given to confirming the adequacy of the manufacturing facility’s management of hazardous material storage, waste storage/disposal, compliance with working conditions and occupational and community health and safety requirements to demonstrate that the project’s suppliers are complying with MIGA’s PSs requirements.  

PS3: Resource Efficiency and Pollution Prevention   

Resource Efficiency:  

The project will use minimal water mainly for construction activities, but only for cement for foundation works on the PV racking, and domestic usage. During operations, water use will be mainly for solar panel cleaning (expected to be cleaned once per week during the dry season from May to September) and domestic usage. The operations phase will consume more water predominantly due to panels cleaning. However, the impact of water use will not impact other users since the water is supplied to each site from public water sources. The estimated water consumption during the construction is expected to be approximately 4 m3 per site during construction. During Operations, the estimated water consumption is expected to be negligible. Currently the project has not established a Water Management Plan. Therefore, the PE will develop a Water Management Plan and will be required to implement it effectively. Water use will be a key performance indicator (KPI) and the PE will keep track of water usage (ESAP item).  

GHG emissions during the construction and operations phase are expected to be predominantly associated with the use of fuels for vehicles and machinery. The total annual GHG emissions has not been estimated yet but is significantly less than 25,000 tons CO2e.  

Pollution prevention:    

The main pollution risks at construction and operations stages are related to dust generation due to clearing, civil works and earthmoving activities, and road traffic. Single solar production sites are generally small (around 2500 sqm) and the PE will continue to limit clearing as much as possible and implement speed limits near sensitive receptors such as households, health posts and schools. Furthermore, all sites will be constructed with ablution facilities as per the local context. During Project construction, the Project solid waste generated will mainly consist of and include paper, wood, and scrap metals. The PE has developed and implements a waste management procedure (WMP) including solid and hazardous waste. However, per MIGA review during the site visit, gaps exist in some processes and the implementation of the WMP was lacking. Therefore, the PE will update the WMP to include a clear process of how solid waste generated from each site is stored on site, segregated, and disposed to an approved landfill by a licensed vendor in line with MIGA PS3 requirements, and to provide enough waste storage bins to ensure proper storage before collection (ESAP item). This defines the identification, reporting and management of waste generated by the activities in the different project sites: acid lead and lithium batteries, broken solar panels, used cartridges, neon light bulbs, plastics and tires, paints, and solvents. Waste streams have been identified with proposed handling, storage, and disposal methods for each stream. PE has signed a contract with an authorized local service provider, for the collecting, sorting, recycling, and disposal of its waste. Hazardous waste materials are isolated and stored prior to collection and management by the contractor. Additionally, the PE will develop a hazardous waste tracking and documentation system/mechanisms to ensure that the hazardous waste handling, storage, and disposal of hazardous waste is in line with the national laws and MIGA’s PS 3 requirement (ESAP item). 

PS4: Community Health, Safety and Security   

   Community health and safety:    

During construction, community health and safety risks and issues include dust emission, increased traffic, noise vibration and increased construction trucks in the area. During operations, potential risks include structural and site access issues, road traffic accidents, fire and safety issues, oil spillages, accidents, and electrical faults. Risks are minimized by restricting access to the sites and to equipment through 24-hour security. MV lines poles will be around 12m height while those for LV lines will be around 10m height.  Sites are fitted with fire extinguishers and security guards are trained in their use.  Power lines (LV and MV), transformers and components are designed and installed according to Good international Industry Practices and REG’s standards, considering the potential frequency and magnitude of natural hazards.  

As part of the ESMS, the PE has developed a Community Health, Safety and Security Management Plan designed to ensure that the Project protects the health, safety and security of communities living around the Project area and along the distribution lines used by the Project. The Emergency Response and Preparedness Plan also covers community health and safety measures and deals with environmental spill prevention, emergency situations and off-site mitigation measures. The PE also has a vehicle management plan, but it does not formally cover road traffic management. Therefore, the PE is required to develop a transportation and traffic management plan (ESAP item). 

On potential for increased traffic risks and impacts to the communities, it is expected that the PE will not cause any disruption to communities as the PE will not transport any heavy loads on the roads to lessen potential for traffic or road blockages.  

Security Personnel:   

Currently, unarmed site security guards hired from local communities following a recommendation from villages chiefs, oversee the site’s security 24/7 and each shift covers 12h per day. As for any PE’s employee, security guard must provide a security clearance letter from Rwanda police before being hired. During their induction, security guards follow several training courses including the PE’s Code of Conduct, HSE procedures, the external grievance redress mechanism, and the handling of fire extinguishers in case of emergency. Sites are also fenced off to prevent unauthorized access. In the event of a security incident, guards must call their management. No security incidents were highlighted as of July 2023.  

The PE will conduct a Security Risk Assessment and develop and implement a Security Management Plan (including site access control and register) for the new sites in line with MIGA’s PS4 (ESAP item). To ensure alignment with MIGA’s PS 4 requirements for security arrangements, the PE will make reasonable inquiries to ensure that the security service guards, or provider have not been implicated in past abuses. Moreover, the PE will train security workers on the appropriate use of force and conduct toward workers and nearby communities. The PE will also require security workers to act within the respective applicable national laws. PE will not sanction any use of force except when used for preventive and defensive purposes in proportion to the nature and extent of the threat. 

PS5: Land acquisition and Involuntary resettlement 

General 

For this Project, the PE will oversee the construction of MV lines, the generation sites (solar panels) and LV lines with their associated land acquisition and compensation process, while Rwanda Energy Group (REG) will oversee, on behalf of the PE, the construction of the planned 120 km of MV lines, including the required land acquisition, stakeholder engagement and compensation of the PAPs. The PE has subcontracted the construction of the MV lines component of this Project to REG considering that the latter has extensive experience in constructing, and rehabilitating MV lines throughout the country. In addition, REG has a dedicated and experienced E&S safeguard team, land experts, valuers, and engineers to manage the land acquisition process and associated compensation, while managing E&S risks during the MV lines construction. REG has established a land acquisition and compensation frameworks, guidelines, and procedures in line with national requirements and has been implemented for other World Bank supported energy projects in Rwanda.  

The PE has also established a land acquisition framework that was applied to the PE’s existing and operational generation sites and LV lines. The PE plans to apply the same land acquisition framework for this Project. Per this land acquisition framework, the PE is responsible to lead the engagement with different stakeholders including REG, districts mayors, village chiefs and elders, and community members to identify appropriate land for the project. For land acquisition for the generation sites the PE will acquire the land based on willing buyer willing seller process and no land will be expropriated from land users. The average size of the existing and future generation site is approximately 2,500 m² or less. For LV lines, there is no land acquisition considering the very limited footprint of the LV poles which are mainly located along the public right of way of existing roads. However, the PE has a compensation mechanism in place if community land or crops are damaged during the construction of generation sites and the LV lines. 

The PE has initiated a detailed survey to assess and determine the land use, MV and LV lines routes, and generation sites’ locations. The survey will also provide preliminary data that will determine the project potential impacts and footprint, the total number of people to be potentially impacted economically (including crops and crops types) and the size of land required. The PE is closely coordinating with REG on selecting the MV and LV lines routes and generation sites’ locations and utilizing REG’s pre-identified sites map to conduct the Project’s survey. Once the Project’s layout design is completed and approved, The PE will be required to publicly disclose the project layout to all stakeholders (including the PAPs) and conduct stakeholders’ meetings to receive feedback and concerns (ESAP item). During the survey the PE will   engage with the district’s mayors, REG, and village chiefs to identify appropriate routes and land and incorporate their feedback to strengthen the survey outcome.  

Displacement: 

There will be no physical displacement as a result of this Project. However, as detailed above there will be economic displacement as result of the Project. The PE conducted a survey on the project layout and  based on the preliminary results of the initial survey conducted in September 2023, (i) around 10 household per km of MV (approximately 40 people) will be impacted economically; (ii)  15 plots with crops to be impacted; (iii No plots of land will be acquired for the poles and the transformers, each transformer will be placed on public right of way and where a pole is placed on private land, a very small area of 1.5m2  is required for each pole. If MV line pole is placed in private land, the PE will require the REG (EPC) to document arrangements with private landowners and compensate them regarding the use of their land for the MV line pole placement (ESAP item). The PE shall make every effort for their MV line to be constructed along plot boundaries so that there is minimal impact to people's land and greatly reduces the number of affected people per km. The survey also confirmed that the current land use for these plots is generally for households' food and cash crops. REG has a seasoned “Land Expropriation” team that leads its land acquisition process including land identification, engagement and negotiations with PAPs, and compensations. As required by the Rwandan Law relating to expropriation in the public interest, REG will engage a land valuer to conduct land valuation assessments for all the potential affected persons land along the 120 km MV lines, LV lines and generation sites. The valuation of land and property shall be conducted by valuers certified by the Institute of Real Property Valuers in Rwanda. The valuation of land and property shall be conducted in the presence of the landowner and that of the owner of property incorporated on land or their lawful representatives and in the presence of representatives of local administrative entities. The properties subject to valuation for the payment of fair compensation due to expropriation in the public interest are (i) land; (2) activities carried out on land for its efficient management or rational use; (3) compensation for disruption caused by expropriation. After completion of the valuation of land and property incorporated. Valuers submit a report containing the list of persons to be expropriated, the size of land and the value of property incorporated thereon belonging to each person to be expropriated, and the fair compensation to be paid to any person whose property is expropriated in the public interest. When the landowner or the owner of property incorporated on land is satisfied with the valuation, he/she shall sign or fingerprint the approved fair compensation reports. REG has a compensation to market value mechanism in place (budget is already secured and impacted stakeholders will be paid by the Rwanda Minister of Finance) if land or crops are damaged during the implementation of the MV lines. 

REG has also established a SEP and an external GRM consistent with MIGA’s PS 1 requirements. This GRM will be used to manage any complaints received by REG as part of this Project, including the land acquisition process. The PE will be required to update the Project SEP and GRM to be in line with national requirement and MIGA PS5. The PE will regularly engage with REG to ensure that potential grievances are managed per MIGA PS1 and 5 (ESAP item).  

Per the Rwanda Utilities Regulatory Authority (RURA) Guidelines N° 01/GL/EL-EWS/RURA/2015 on Right-of-Way for Power Lines, the Licensee shall acquire easements by negotiating with landowners on whose land the power line will be placed. As agreed, upon in negotiations, the Licensee may pay a compensation fee to the landowner in one lump sum. REG will comply with this Right-of-Way Guidelines and has already secured the required budget to cover this item. The PE will require REG to acquire the MV line land and compensate all the PAPs in line with PS5 and Rwandese laws. The PE will also require REG to submit a completion report on land acquisition and compensation process to be validated by the PE (ESAP item). 

Within the RoW there are buffer zones and each buffer zone (clearance space) around the poles and transformers must remain free of vegetation above 4 m height that could pose danger to a power line. The RoW shall also generally be clear of unauthorized structures that could interfere with a power line operation. However, per RURA guidelines, as long as minimum clearances from poles and conductors are maintained and with a prior written consent of the Licensee, the right-of-way can be used for certain activities such as yards, gardens, pastures and farming, recreational fields, streets, roads, driveways, parking lots, lakes, fences, drainage ditches, grading or any other activity that may not interfere with the line operation. Temporary buildings or structures that are small and easily movable may be acceptable in the Right-of-Way with prior approval of the Licensee. 

For generation sites, the PE plans to acquire land in the community where the solar generation sites are located. This is undertaken through a willing buyer willing seller standard plot purchase as per the current process, in line with Rwandan Laws. The PE will be required to acquire the land per PS5 requirements and national laws (ESAP item). 

Private Sector Responsibilities under Government-Managed Resettlement: 

Both the PE and REG will ensure to start construction only after the affected person crops/land are fully compensated in line with the Rwanda National requirements and MIGA PS 5 requirements. However, if there is a gap in the compensation that REG is providing to the landowners compared with PS5 requirements, the PE has agreed to compensate the potential difference (ESAP item). Therefore, the PE will engage the services of a valuer recognized by the Institute of Real Property Valuers in Rwanda to carry out a counter-assessment of the REG valuation and provide detailed reports for all the potential affected persons land along the 120 km MV line (ESAP item).  

The documentation listed below is available electronically as PDF attachments to this ESRS at www.miga.org.    

• Not applicable 

Project Contact Information: 

Contact: Charlie Wilkinson  

Position: Chief Operation Officer 

E-mail: charlie.wilkinson@arcpower.co  
Address: ARC Power Limited, RN 5, Nyabivumu Village, Ntamata, Bugesera, Rwanda 

Broad Community Support is not applicable for this Project.  

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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