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Uganda

Engie’s Mini-grid projects

$21.8 million
Power
Environmental and Social Review Summary
Proposed
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Environmental and Social Review Summary 

 Engie Equatorial Limited  

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

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

MIGA has been requested to provide a guarantee to cover equity investments from Engie Energie Services (“the Guarantee Holder”, “Engie1”) into Engie Equatorial Limited  (“EE” or “the Project Enterprise”, “PE”) -  a Special Purpose Vehicle (SPV) owned by Engie Africa and Equatorial Power, to support the design, finance, construction, operations and maintenance of forty-five mini-grid projects and associated productive uses of energy, located in Uganda, mainly on the islands in Lake Victoria or on the mainland, at the shores of Lake Victoria (together, the “Project” and each mini-grid project separately, a “Subproject”). The connecting infrastructure to the grid will be funded by the Government of Uganda and is considered an Associated Facility to the Project. One of the 45 mini-grids, Subproject Lolwe has been operational since January 2022. The proposed tenor of the guarantee for the Project is up to 20 years. Further information on the proposed MIGA guarantee is available in the Summary of Proposed Guarantee. 

Engie is the corporate level entity, and Engie Energy Access (“EEA”) was formed in 2020, when Engie integrated its solar home system companies (Fenix International and Engie Mobisol) and mini-grid business (Engie PowerCorner) under EEA with operations in nine countries across Africa - Benin, Cote d’Ivoire, Kenya, Mozambique, Nigeria, Rwanda, Tanzania, Uganda, and Zambia. For each of the nine countries, there is a Special Purpose Vehicle (SPV) that provides an oversight function for all projects in that country. 

Over the next 5 years, EE intends to build a total of 44 mini-grids and associated productive uses of energy. EE’s series of mini-grids will cumulatively offer 4 MW of solar power across Uganda. EE commissioned its first mini-grid in Uganda in January 2022.  

The Project is Category B according to MIGA’s Policy on Environmental and Social Sustainability (2013).  Overall, the Project is not expected to result in significant E&S impacts, since all of the Subprojects have either potential limited adverse environmental or social risks and/or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures, or minimal or no adverse environmental or social risks and/or impacts. 

Key E&S issues associated with the Project include group-level capacity and systems to manage and oversee E&S risks and impacts associated with the Project; the key E&S risks related to the Subprojects include labor and working conditions of employees and contracted workers, energy efficiency, and management of so

While all Performance Standards (PSs) are applicable to this Project, based on available current information, 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 

Based on MIGA’s review of the Lowle Subproject and considering EEA’s business activities and criteria being considered for site selection, no significant risks and impacts associated with PS 5 (Land Acquisition and Involuntary Resettlement), PS 6 (Biodiversity Conservation and Sustainable Management of Living Natural Resources); PS 7 (Indigenous Peoples) and PS 8 (Cultural Heritage) were identified for the proposed Project. As indicated under the PS1 section below, EEA’s site selection criteria will facilitate the avoidance of E&S risks and impacts associated with PS 5 – 8.  

In addition, the following World Bank Group Environmental, Health, and Safety (WBG EHS) Guidelines are applicable to the Project: 

  • General EHS Guidelines (2007) 

  • EHS guidelines for Electricity Transmission and Distribution (2007) 

The following documents were reviewed by MIGA:  

  • Engie Energy Access – E-Waste Management Policy (2022) 

  • Environmental and Social Management System Manual (2022) –  Engie Equatorial Limited  

  • Engie Equatorial Employee Manual (2021) 

  • Healthy, Safety, Security and Environment (HSSE) Policy for Lolwe (2020) – Engie Equatorial  

  • Engie – Code of Conduct in Supplier Relations (2020) 

  • Environmental Project Brief submitted by Winsjet Associates for Equatorial Power Ltd (2018) 

  • Health, Safety & Security, Environment Management System- Engie Energy Access - Power Corner (undated) 

  • Control Procedures for Prohibition of Forced Labor (undated) 

  • Sagemcom E&S Policies and Procedures (undated) 

  • Policy on Harassment and Sexual Exploitation - Engie Energy Access Uganda (undated) 

  • Risk Assessment Mini-Grid (undated) 

  • Recruitment Policy - Engie Energy Access (undated) 

  • Environmental Guidelines During Construction, Operation and Maintenance of Mini-Grids (undated) 

  • Handbook - Engie Energy Access Uganda (undated) 

 

In addition to reviewing the above documents, MIGA conducted virtual due diligence from July 2022 – February 2023, including calls with key EEA and EE representatives and reviewed the findings from site visits conducted by an E&S consultant in their review of Engie’s E&S capacity and systems to manage 60 mini-grid sites in Zambia (August 2022).   

MIGA’s due diligence included the review of EEA’s proposed E&S management approach, focusing on their capacity to identify and address E&S risks and impacts and implement management and monitoring mechanisms in line with the requirements of the Performance Standards. Subproject Lolwe, the most advanced Subproject, was reviewed in detail as it demonstrates the implementation of EEA’s development approach. It is understood that the approach taken for Subproject Lolwe will be applied to the other sites to be developed by EEA, with only minor localized variations where necessary.  

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 E&S 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 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:  

Engie Energy Access (EEA) has developed a Health, Safety, Security and Environmental Management System (HSSE-MS)  that describes the system by which HSSE risks are managed and articulates the organizational requirements to implement the management system during construction across EEA’s portfolio  of projects in Africa. The HSSE-MS is focused on health and safety and provides limited information on environmental and social risks. Consistent with the requirements of PS1, the HSSE-MS will be revised to include aspects to manage any potential E&S risks and impacts associated with the construction, operations and decommissioning phases of the Subprojects (ESAP #1).  

Policy:  

Engie has a set of E&S policies in place at the group level which cover aspects such as climate change, natural resource use, stakeholder engagement, human rights and external communication mechanisms.  Engie’s E&S corporate policies govern EEA’s E&S priorities and commitments which are cascaded to the Project Enterprise at the country level.   

 

Identification of Risks and Impacts:  

In line with the HSSE-MS, an initial E&S site selection screening is undertaken for Subprojects. The screening process will be strengthened to include: (i) desktop E&S assessment; (ii) field visit by competent/qualified E&S specialists (iii) capture of all Subproject components including associated facilities and (iv) alignment with MIGA PS requirements (ESAP #2). EEA developed a ‘Risk Assessment for Mini-Grids, 2021’ which is applicable to all Subprojects. E&S, site-specific, contextual and cumulative risks are underrepresented in the risk register and it is unclear how these risks are communicated to the Engineering Procurement and Construction (EPC) and EE Operations and Maintenance (O&M) team. The risk assessment document will be amended to incorporate site-specific, contextual, cumulative risks and will be included in the contractual obligations with the EPC and O&M contractors (ESAP #3). 

 

For the Lolwe Subproject, an Environmental Project Brief (EPB) was developed in line with national legislation and approved by the Ugandan National Environmental Management Agency (NEMA) in April 2019. The EPB included a set of measures to mitigate potential impacts identified during the construction, operations and decommissioning of the mini-grid. Per NEMA’s requirements, an EPB will be required for the other 44 mini-grids that will be constructed. The EPC contract includes E&S requirements as well as requirements to comply with local legislation.  

  

Major climate risks in Uganda that can affect operation of mini-grids are floods and heat waves. Selection of the sites for mini-grids depends on the site availability and EE assessing each location and access ways for floods risks, and the site locations are pre-selected to avoid or minimize those risks, considering elevated over the Lake level and other site parameters. Selection of proper equipment with adequate operational temperature range will help to mitigate risks of heat waves.  

 

Management Programs:  

Construction of the Subprojects will be sub-contracted to the EPC under the supervision of EE (with support from EEA and Equatorial Power personnel). Operations and maintenance will be undertaken by EE. The EPC contractor will be required to develop and implement comprehensive Construction Environmental, Social, Health and Safety Management Plan (Construction - ESMPs) appropriate to scale and risk of the Subproject (ESAP #4). EE will include in its HSSE-MS a procedure to review and approve site-level Construction-ESMPs prior to starting construction of any Subproject. The Construction-ESMPs will be based on the outcome of the Environmental Project Briefs, Environmental and Social Impact Assessments (ESIAs)2 (if required), Engie and EEA policies and procedures, and the requirements of the PSs.  

 

For the Lolwe Subproject, EE developed an HSSE operations management plan for the productive hub but not the mini-grid or the transmission line components. EE will be required to develop an operations ESMP for the mini-grid and transmission lines in line with the HSSE-MS, PS requirements, NEMA approval conditions of the EPB and risk assessment for the Lowle Project (ESAP #5). Review of the Lolwe Subproject documentation, indicated that contractors have appropriate environmental, social, health and safety policies and procedures in place, and that contractors are required to adopt Engie’s grievance management procedure, or to prepare and implement a procedure in line with its requirements.  

 

Organizational Capacity and Competency:  

At the country level, there is a dedicated Health, Safety and Environment (HSE) representative that oversees all of the PE’s activities in-country. The in-country HSE representative is supported by EEA’s Global technical and operations manager for mini-grids. Both report to EEA’s HSE Manager who in turn reports to EEA’s Global Head of Operations. 

 

The HSSE-MS identifies key Subproject personnel to oversee the implementation of HSSE commitments including an HSSE Manager to manage HSSE-MS implementation at the Subproject level and an HSSE Officer to ensure that construction and operations adhere to Engie HSSE policies, practices and standards. The positions stipulated in the HSSE-MS will be appointed or retained (ESAP #6).  For future Subprojects in Uganda, EE will include E&S construction contractor capacity requirements. 

 

Emergency Preparedness and Response:  

As per the HSSE-MS, all Subprojects will be required to develop and implement a Subproject specific emergency preparedness and response plan. In addition, EEA has developed several procedures for incident management, incident reporting, spill prevention and response. EEA will review Construction-ESMPs for each Subproject to verify that emergency preparedness and response procedures are in place in line with good international industry requirements (ESAP #1). An EPRP will be developed for the operations phase as part of the revised  HSSE-MS. Drills will be conducted at each site on a regular basis.  

 

Monitoring and Review:  

The HSSE-MS sets out monitoring requirements for the EPC contractor in terms of risk assessments, method statements, permit-to-work systems, accidents and incidents, inspections and events. However, the implementation of monitoring activities needs to be strengthened, including establishing clear reporting lines between EE’s management and EPC contractors. EE will prepare and submit to MIGA Annual environmental and social monitoring reports. 

 

Stakeholder Engagement:  

Engie has a Group Societal Policy (2020) that includes continuous engagement with relevant stakeholders and also provides a toolkit that entails conducting a context analysis, identifying all relevant stakeholders on specific issues, drawing up an action plan, and monitoring and evaluating the plan's impact. The toolkit also includes resources to guide operational teams in their engagement activities such as holding community meetings and using participatory tools. As part of its HSSE-MS, EE will develop a stakeholder engagement framework in line with MIGA PS 1, which will apply across all Subprojects (ESAP #1). 

 

Stakeholder consultation activities were undertaken during the EPB process for the Lolwe Subproject in 2018. Comments raised by stakeholders were notably related to boosting business opportunities, increasing employment, and reducing the impact on fish stocks and improve the profitability of fishing as a result of the Subproject.  

 

External Communication and Grievance Mechanisms:  

Engie prepares an Integrated Report which is disclosed on its website. The integrated report outlines Engie’s commitments to E&S as well as an update on Engie’s efforts to reduce its impact on climate and the environment. EEA will establish an external grievance mechanism which will be cascaded to the PE and applied to each Subproject (ESAP #1). EE will maintain records of grievances related to the Subprojects. 

 

Ongoing Reporting to Affected Communities:  

Reporting to potentially affected communities will be conducted as part of the engagement with Project stakeholders.  

PS2:  Labor and Working Conditions  

As of February 2023, at EEA has 1781employees in 13 countries, of which approximately 62% are male and 38% are female. EE employs approximately 26 staff in Uganda. Construction activities typically last for 3 to 12 months and are subcontracted to local civil contractors. The number of sub-contracted employees at peak construction period for a Subproject is expected to be 10. At each site, the Subproject is expected to employ about between 5 to 6 staff members during operations. EEA indicated that no workforce accommodation will be provided during the construction or operations of its mini-grid facilities. Priority will be given to workers from the local communities.  

  

Working Conditions and Management of Worker Relationship:  

Human Resource (HR) policies and procedures are in place at the corporate level at Engie and all EE HR matters are handled by the EEA Uganda HR team. The EEA Team Handbook consistent with Engie’s HR policies and procedures covers topics such as the employee code of conduct (misconduct, disciplinary procedures, discrimination, harassment) working conditions (working hours, overtime, attendance, leave), remuneration and benefits (salary, insurance, healthcare) and provisions for termination/resignation and is aligned to PS2. EEA has also developed the Disciplinary Code Procedure which provides information on the  HR department and shared with the employees  at induction.  

 

Per Engie’s HR policies and procedures, EEA will verify that all employees’ contracts and any Subproject-specific HR policies are consistent with the labor laws of the country where Project staff is employed. The EEA Employee Manual includes a procedure for handling grievances which will be revised and also extended to contractors and sub-contractors (ESAP #8).  

 

EEA’s Policy on Harassment and Sexual Exploitation contains mechanisms to mitigate gender-based violence (GBV) risks in the workplace and applies to all employees, suppliers, vendors and customers. EEA has established a harassment and discrimination committee composed of EEA’s Ethics Department Employees that helps to provide guidance on any matters raised through the GBV grievance mechanism to ensure the aggrieved party is supported. 

 

Protecting the Work Force:   

The minimum employment age for Engie employees and subcontractors is 18 years. Engie’s commitments in relation to prohibiting child and forced labor are included in the EEA Recruitment Policy and Handbook and the Control Procedures for Prohibition of Forced Labor. It also details non-discrimination practices in EEA’s recruitment process. EPC contractors are contractually bound not to use any forms of forced labor, and to observe applicable laws and PS2 requirements related to child labor.  

 

Occupational Health and Safety:  

Occupational Health and Safety (OHS) is captured in the HSSE-MS which contains information on roles and responsibilities, monitoring and reporting, management of contractors, safety in transportation, security and evacuation, training and communication and HSSE rules and regulations. EEA will develop an OHS management plan applicable to all operational Subprojects (ESAP #1), which will include procedures to assess and monitor OHS aspects, including safety training, emergency drills, and incident management. EEA has developed a “Country Working Strategy during COVID -19”which includes safety measures to be adhered to in line with WHO recommendations. 

 

Workers Engaged by Third Parties:  

Engie has developed group-level contractor management procedures applicable across all its subsidiaries which include, as a minimum, compliance with local labor laws and terms of OHS management. The contractor management procedures will be revised to include access to the workers’ grievance mechanism. 

 

Supply Chain:   

Engie has a Corporate Procurement Policy (2019) in place which includes procedures to screen suppliers and service providers against the risks of forced and child labor.  Engie will revise its 'Supplier Scoring’ so that if the potential for such risks is identified,  ongoing monitoring provisions are in place (ESAP #9). 

PS3:  Resource Efficiency and Pollution Prevention 

Resource Efficiency:  

Greenhouse Gas (GHG) emission sources during operations of the Subprojects will be minor and mainly related to diesel use for back-up generators. As part of its corporate E&S monitoring framework, EE will conduct monthly monitoring of energy use of all operational facilities, and report results to MIGA in the Annual E&S Monitoring Report.  

 

The potential environmental risks and impacts during construction include increased noise, surface water contamination, and waste management, and these are expected to be limited and managed through the implementation of standard mitigation measures, which will be included in the Subproject construction-ESMPs in line with EEA’s HSSE-MS. During operations, the main risks and impacts of the mini-grids relate to the management of water, wastewater and solid waste (including e-waste) for which guidelines will be developed as part of HSSE-MS for operations, and mitigation measures in line with PS 3 requirements will be implemented at all sites.  

PS4:  Community Health, Safety and Security   

Potential risks to community health and safety from the Project activities are expected to be limited, as the site selection criteria for Subprojects that will be applied by EE will exclude any sites with potentially significant impacts to communities.  

Traffic related risks will be dominant during construction as a result of transportation of construction material and equipment. EE will develop a traffic management plan to manage potential transport related impacts including: (i) driver training; (ii) drugs and alcohol testing for drivers, (iii) speed controls and others (ESAP #1). 

 

Site access control and security will be provided by private third-party contractors or government security agencies. Security personnel may carry arms depending on local circumstances. As part of the HSSE-MS supplemental plans and procedures, EEA will develop a group-level Security Policy and site access control procedure consistent with the requirements of PS 4 (ESAP #1). Subproject specific security management procedures commensurate to the risk will be developed and implemented by the PE as part of the operational ESMP (ESAP #5). 

For the Lolwe Subproject, the nearest households are located in  Kandenge village 1 km away from the productive hub and approximately 2 to 3 km away from the mini-grid. The Subproject has appointed three unarmed security guards who are from the island community and will be subject to the Security Management Plan requirements. The Project site, including substations and transformers is wire fenced and monitored through closed-circuit television cameras and intrusion alarms. 

Broad Community Support is not applicable for this project. Due to the limited footprint of mini-grids, Broad Community Support is not envisioned to be applicable for the Project. 

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

For additional information, please contact:  

  • Philemon AYEBARE (Project Coordinator) 

PLOT 11 Wampewo Avenue 
Kampala 
Uganda  

E-mail : Philemon.ayebare@engie.com 

Phone :  

 

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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 

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