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Namibia

Ejuva One and Ejuva Two Solar Energy Projects

$35 million
Power
Environmental and Social Review Summary
Active
sunset solar panels

Project Facts

Project Facts

Project Facts

Namibia
Project ID
13755
Strategic Priority Area
Energy efficiency and climate change
Guarantee Holder
Investec Bank Limited
CIGENCO SA (Pty) Limited
Investor Country
South Africa
Environmental Category
B
Date SPG Disclosed
April 19, 2017
Projected Board Date
May 19, 2017
Project Type
Non-SIP
Fiscal Year
2017

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.

Project Description

On December 14, 2017 and April 4, 2018, MIGA signed contracts in which it agreed to issue guarantees of $2,370,738.60 covering equity investments and $14,738,835.80 covering non-shareholder loans from CIGENCO SA (Pty) Ltd (“CIGenCo”) and Investec Bank Limited (“Investec”), respectively, for both the Ejuva One Solar Energy (Pty) Ltd and Ejuva Two Solar Energy (Pty) Ltd (“Ejuva One and Ejuva Two” or the Projects) in Namibia. The guarantees are issued for a period of up to 15 years against the risks of Transfer Restriction, Expropriation, Breach of Contract, and War and Civil Disturbance.

The Projects consist of the construction, ownership, operation and maintenance of two 5 MW solar energy generating facilities. The electricity output of both Projects will be sold to Namibia Power Corporation Limited under 25-years Power Purchase Agreements (“PPA”).

The Projects were awarded through the Renewable Energy Feed in Tariff Program, which was approved in 2010 and commissioned in 2011 by the Minister of Minerals, Mining and Energy. The program is aimed at procuring generation of power from various renewable sources up to a maximum of 5 MW per project. The Projects were among the 14 independent power producers that signed a PPA among 27 shortlisted bidders. The Projects are at the initial stages of construction involving site demarcation with estimated commercial operation dates in July, 2017.

Ejuva One and Ejuva Two are located side by side on a 35-hectare site, about 1 km outside of the town of Gobabis, Omaheke Region, approximately, 220 km from Windhoek and are being constructed and managed as one project. The site location is across the road from the Gobabis substation therefore the connection to the grid is by means of short sections of overhead distribution lines. The habitat is modified by agriculture; however, immediately prior to the project acquiring the land it was unused. The site is accessed from a secondary road just off the main highway between Windhoek and Gobabis. The Projects are being constructed by an EPC contractor, Consolidated Power Projects (“CONCO”) through its Namibian subsidiary, which is responsible for overall design and project management, and is assisted by specialist sub-contractors for the installation of the solar modules panels and other installation works, namely, PIA Solar SA (Pty) Limited and Alternative Energy Systems CC.

CIGenCo and CONCO are subsidiaries of Consolidated Infrastructure Group Limited a holding company listed on the Johannesburg Stock Exchange, which has a presence in approximately 25 countries on the African Continent.

Environmental and Social Categorization

This is a Category B project according to MIGA’s Policy on Environmental and Social Sustainability, because potential adverse environmental or social risks and/or impacts are limited, few in numbers, site-specific, largely reversible and readily addressed through mitigation measures. During construction, key environmental and social risks and impacts include air emissions and noise that could disturb surrounding residents, occupational health and safety (OHS), community safety and vegetation removal. During operations, risks and impacts include water consumption and dust generation resulting from controlling for vegetation removal and hazardous waste management. 

Applicable Standards

While all Performance Standards are applicable to this investment, our 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

The land was acquired from the municipality through a lease agreement and did not involve any resettlement either physical or economical, therefore PS5:  Land Acquisition and Involuntary Resettlement, is not triggered. The habitat was already modified and there are no endangered species living on the land therefore PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources is not triggered. There are no indigenous Peoples or cultural heritage sites on the land, therefore PS 7: Indigenous Peoples and PS 8: Cultural Heritage, are not triggered.

The Projects will be expected to comply with the World Bank Group’s General Environmental, Health and Safety Guidelines as well as the sector specific guideline for Electric Power Transmission and Distribution.

Key Documents and Scope of MIGA Review

MIGA’s review included a visit to the project site in Gobabis on the 23rd of March 2017. Meetings were held with the client representatives at the site, as well as the environmental consultant for the project.  A meeting was also held with the Ministry of Environment in Windhoek. MIGA reviewed the following documentation:

  • Environmental Impact Assessment (EIA) and Environmental Management Plan (EMP) for the Proposed Establishment of a Renewable Photovoltaic Solar Power Plant, Gobabis, Omaheke Region, Centre for Geosciences Research, November, 2014
  • Fatal Flaw Analysis for the 2x5 MW Solar PV Plant at Gobabis, Omaheke Region, ERM, December 2016
  • Environmental Clearance Certificate, Ministry of Environment and Tourism. March 2015

Key Issues and Mitigation

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

Social and Environmental Assessment:

An Environmental Impact Assessment (EIA) was conducted by the Centre for Geosciences Research in November, 2014 which also included an Environmental Management Plan (EMP). In 2016. CIGenCo contracted Environmental Resources Management (ERM), an internationally recognized consulting firm, to conduct a fatal flaw analysis for the project against the Performance Standards. A gap analysis was completed and an environmental and social action plan developed to address those gaps which the development of an Environmental and Social Management Plan.

Management Program and Monitoring:

CONCO was selected as the EPC contractor and Consolidated Power Maintenance (Pty) Limited (“CPM”), a sister company of CONCO, will operate and maintain the power plant at site. CONCO will also monitor operations remotely from its head office in South Africa. CONCO maintains an ISO 8001 certification and site specific OHSAS procedures.

During construction, a CONCO site manager is permanently located at the project site to oversee the sub-contractors. All sub-contractors will be obliged to comply with a project specific environmental and social management system (ESMS) which is currently being developed. A Health, Safety and Environment (“HSE”) officer has been employed and ensures that a site induction is completed for all new staff and visitors. The HSE officer is supported from CONCO’s head office as required. The site manager at site will ensure that all construction activities comply with the ESMS and relevant management plans.

An environmental and social management plan (“ESMP”) is being developed for the operations phase based on the EMP in the EIA. It will be implemented by CPM.  A monitoring program will be developed to ensure that the ESMP is being adhered to and annual reports will be developed and submitted to MIGA and relevant authorities.

Emergency Preparedness and Response

An Emergency Preparedness and Response procedure is being developed. Assembly points have been identified and drills are carried out regularly. The site manager will visit the local fire service to establish a procedure with them in case of fire, during both construction and operations. In case of fire, the fire department will be automatically alerted.

PS2:  Labor and Working Conditions

Construction works for the plant will entail creation of 150 jobs for about three months, and operations will involve 10 workers. The construction workers will be hired by CONCO or its sub-contractors. CONCO has a policy on gender equality in its workforce which will be adhered to for this project. In Namibia, the legal age for work is 18 years and the labor law mentions that children under 18 should not be involved in harmful work. The project will ensure that no person under the age of 18 years will be employed to work on the construction or operations of the Projects.

HR Policy and procedures for the construction phase and the operations phase will be developed. These will cover all categories of workers, including direct workers and contracted workers. At a minimum, the HR Policy will include the following provisions: working relationship; working conditions; terms of employment; workers’ organizations; non-discrimination and equal opportunity; grievance mechanism; prohibition of child and forced labor in its direct operations; and occupational health and safety. The HR Policy will be communicated to all new employees during the induction process. The remuneration of workers on the Projects will always be above minimum wage. No one will be permitted to live on site as accommodation is available in the local town for people outside of Gobabis, and most staff will be hired locally.

Arrangements have been made for the local municipality to manage the recruitment process for unskilled staff. Potential candidates will submit their application to the municipality’s office and their applications will be screened to select suitable candidates in a fair and transparent manner. CONCO will oversee this process which is expected to minimize the risk of disagreement with the local community on the fairness of the process for hiring unskilled staff.

Occupational Health and Safety: The EIA includes a detailed description of OHS risks and impacts during construction, operations, and decommissioning, with a series of preventive measures. The main risks and impacts will include heat exposure, traffic safety, exposure to welding light and fumes, working at heights, and potential for fires and/or explosions resulting from ignition of flammable materials or gases. As referenced earlier under PS 1, the EPC contractor will develop and implement the ESMS and relevant plans for the different phases of the project. Training will be provided for every employee as necessary depending on their job duties and a tool box safety message is provided every morning before the start of work. Health clinics and hospitals are located in Gobabis in case of accidents. Personal protective equipment will be supplied to all staff and if it is not used, the staff member will not be allowed to work. First aiders and fire wardens will be appointed and trained appropriately.

PS3:  Resource Efficiency and Pollution Prevention

GHG Emissions: The Projects are expected to have a positive environmental impact in terms of GHG emissions as it will provide a renewable source of electric power and will build the capacity of Namibian power generation which relies heavily on coal-based energy imports from its neighboring countries.

Water Consumption: CONCO will use municipality piped water on site as well as rain water harvesting. During construction, water will primarily be used for dust suppression on roads and during earth moving works. In operations stage, water will be used for sanitary purposes as well as for solar panel cleaning. The operations and maintenance building will be fitted with a reverse osmosis system which will clean the water and sanitize it fit for drinking. The panels will only be cleaned with air, or water through high pressure sprayers and no cleaning fluids. Approximately 240,000 litres of water per annum is required for PV panel washing.

Pollution Prevention: During operations, the solar plant will not generate any noise or air emissions. Most of the impacts will be generated during construction and decommissioning and include temporary noise and dust which will be appropriately managed through water sprinkling as necessary and adhering to strict day time construction hours to avoid disturbing the local communities. Electricity will be provided by the municipality and a backup generator will be available in case of outages during both construction and operations. This will be housed appropriately with secondary containment to avoid leakages. All vehicles will be refueled off site and regular maintenance and repair will be carried out at local off site garages. Only drilling equipment will be refueled on site and spill kits will be available in case of spills.

Wastes: During construction, solid waste will consist mostly of concrete and packaging material. During operations, solid waste will be mostly generated at the office. During decommissioning, waste will consist of used panels, metals, used oil, and concrete. A waste management system will be developed and implemented by CONCO. Waste will be segregated and the project will contract a registered waste disposal company to remove wastes. Opportunities for source reduction, as well as reuse and recycling procedures and operational controls for onsite storage will be developed. As there is no sewage collection network, a septic system will be used, designed and installed in accordance with local regulations to prevent any hazard to public health or contamination of land, surface or groundwater. It will be regularly emptied.

Hazardous Materials Management: Provision of secondary containment, drip trays or other overflow and spill containment measures will be implemented in designated areas during both construction and operation. Vegetation control will be carried out manually without any pesticide use. Broken solar panels will be stored and disposed of appropriately.

PS4:  Community Health, Safety and Security

Community Health and Safety: The plant is located close to Gobabis and is accessed from a secondary road just off the main highway between Windhoek and Gobabis. As such, potential adverse impacts from construction will be increased traffic which may represent a risk for the local population. Drivers hired by CONCO and sub-contractors will be required to produce a valid driver license. CONCO will develop and implement safe driver and transport safety vehicle procedures, including training sessions for its own and third party haulage contractors, especially during construction.

Hazards most directly related to power facilities occur as a result of electrocution from direct contact with high-voltage electricity or from contact with tools, vehicles, ladders, or other devices that are in contact with high-voltage electricity. Signs, barriers (e.g. locks on doors, use of gates, use of anti-climbing devices), and education / public outreach will be used to prevent public contact with potentially dangerous equipment.

Security arrangements: During construction a private company is providing security services at the site and will continue to do so during operations. Reasonable enquiries will be made to investigate the employment statements and other available information, including any criminal record of individuals or firms and any individuals or companies that have abused or violated human rights in the past will not be employed or used. PS 4 requirements will be strictly enforced, including rules of engagement, code of conduct, training of security guards, etc. The site will be fully fenced with a non-fatal electric fence. A CCTV system will be installed during operations along with sensory security lighting. 

Environmental Permitting Process and Community Engagement

In 2015, the environmental permit was approved for the Projects with a validity period of 3 years, after which the permit has to be renewed. During construction and operations, representatives of the Ministry of Environment and Tourism will visit the Projects to monitor compliance with Namibian law and the Projects are expected to report to the Ministry every six months.

Community Consultation

During the ESIA process a number of community consultation activities were completed. The Project were presented in the local newspapers and on community notice boards. Information brochures were developed and distributed to local communities. Stakeholder meetings were held to discuss the project and to provide an opportunity for the affected communities to raise any concerns. The communities were interested to hear about the visual impacts of the site as well as employment opportunities. There were no objections to the Projects. CONCO and CPM have a policy of working with local communities to identify development activities during operations and these opportunities will be elaborated as soon as possible.

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