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.
The project consists of the development, construction, operation, and maintenance of a 21 megawatt (MW) solar photovoltaic (PV) power plant located in a solar park created within the Ma’an Development Area (MDA), approximately 200km southwest of the capital, Amman (the Project). The electricity generated will be sold at a fixed tariff to the National Electric Power Company (NEPCO, or the off-taker), a wholly-owned state-owned enterprise of the Government of Jordan (GoJ), under a 20-year Power Purchase Agreement (PPA). NEPCO has already built both the interconnection facilities and a dedicated substation for power evacuation from MDA into the national grid. The Project achieved commercial operations date in October 2016 and is currently undergoing testing until full completion, expected early 2017.
The solar modules selected are a solar modules with 60 solar cells. The technology used by the developer includes high efficiency anti-reflective coating material which minimizes the reflectivity from the panels to less than 4%. The direct current (DC) power from the solar panels will be sent to an inverter to convert the DC power into alternate current (AC) power which will then be fed into the utility power grid system through the local substation that is currently under construction by NEPCO. The substation, to be managed by NEPCO, will convert power to 132 kV, which will then be transported to the national grid through high voltage transmission lines. The developer will not be responsible for the interconnections as stipulated in the PPA signed in 29th April 2014 (the Transmission Connection Agreement states that the transmission line leaving the substation and connecting to the grid is the responsibility of NEPCO). The Project is located in Jordan’s Ma’an Governorate which lies around 200 km Southwest of Amman. The Ma’an Development Area (“MDA”) was established in 2008 under the Development Areas Law. The new solar park, which lies between the MDA’s industrial park and vocational training center, encompasses 11 plots available for solar PV, of which this project is one.
Environmental and Social Categorization
This is a Category B project according to MIGA’s Policy on Environmental & Social Sustainability (2013) as the E&S impacts associated with the project are limited due to the project site’s location within an existing industrial development area. The area is generally not suitable for agriculture and grazing and is not used for that purpose by local communities. The land ownership of the project area resides with the Ma’an Development Company (MDC), which is mandated by the Government of Jordan as the land owners of the MDA.
While all Performance Standards are applicable to this investment, based on our current information the Project will have impacts which must be managed in a manner consistent with the following Performance Standards:
- PS1: Assessment and Management of Environmental and Social Risks and Impacts
- PS2: Labor and Working Conditions
- PS3: Resource Efficiency and Pollution Prevention
- PS4: Community Health, Safety and Security
- PS8: Cultural Heritage
There has been no physical or economic displacement with respect to this project, therefore PS5 on Land Acquisition and Involuntary Resettlement is not applicable to this proposed investment. No significant biodiversity values are associated with the site as the MDA area is largely considered to be degraded. Although Jordan is known to be located within the Red Sea / Rift Valley flyway for migratory birds, Important Bird Areas (IBA) as designated by BirdLife International, are not located in the vicinity (the nearest one, Petra IBA, is approximately 25km to the west of the project site). For these reasons, PS6 on Biodiversity Conservation and Sustainable Management of Living Natural Resources is not applicable. There are no Indigenous Peoples in the project area, and therefore PS7 on Indigenous Peoples is not applicable.
Key Documents and Scope of MIGA Review
MIGA due diligence included reviews of IFC’s appraisal which assessed the environmental and social management planning process and documentation for the project and identified gaps with the Performance Standards requirements. IFC’s appraisal of the Falcon Ma’an Solar Power project in the Ma’an Development Area (MDA) in Jordan consisted of a site visit on 11 June, 2014 and a review of environmental and social (E&S) documents including the draft Environmental and Social Impact Assessment (ESIA), the Scoping Session/public consultation report, the Rapid Environmental Assessment for the Ma’an Development Area (MDA), and other relevant project documentation. During the site visit, IFC discussed E&S aspects with the project developer (Catalyst PE), the Engineering, Procurement and Construction (EPC) contractor / Operations and Maintenance (O&M) provider (Enneray S.p.A.), the project’s engineer (SECI Energia), the E&S consultant (Arabtech Jardaneh), the MDC, and the Jordan’s National Electric Power Company (NEPCO).
Furthermore, the results from the following documents were also reviewed by MIGA:
- IFC’s Recordable Supervision Activity: Supervision Site Visit (SSV) Report, March 2016
- IFC’s Annual Monitoring Report, July 2016
Client Documentation was prepared in compliance with an Environmental and Social Action Plan (ESAP) and all ESAP action items have been completed. Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives.
Key Issues and Mitigation
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Management System
Falcon has developed an overarching E&S Policy and an H&S Policy that applies to the project included in ESAP Action Item number #1 which has been completed. The policies are specific to the activities in Jordan, reviewed and approved by the developer’s Managing Director and applicable to the EPC contractor / O&M provider and sub-contractors. The developer’s Environmental and Social Management System (ESMS) consists of these policies; an Environmental and Social Management Plan (ESMP), which includes monitoring actions; an overarching system for reporting and tracking non-compliances in a coordinated manner, project-wide; and, an organizational framework.
Environmental and Social Assessment
The ESIA was prepared by a local consulting company (Arabtech Jardaneh) according to the requirements of the Jordanian Environmental protection law no. 52 / 2006 for the project. The draft ESIA included a scoping session held with the stakeholders and was designed to meet international standards. The ESIA included a review of applicable legislation and standards with potential implications to the project; a description of the activities needed to be performed over the life of the project; and identification of risks and impacts (including positive impacts). The ESIA also included an E&S baseline study (covering, for example, air / noise quality, biodiversity, cultural heritage, etc.) against which impacts of the project were assessed. An alternatives assessment was also carried out. Stakeholders were identified prior to the scoping sessions and methods of communication were explored. Mitigation and monitoring measures were also identified and included in the ESMP, which is annexed to the ESIA.
Regarding social-related impacts, based on IFC's site visit and feedback from E&S specialists in Jordan, the use of the project area for grazing by semi-nomadic Bedouin communities is unlikely. Nonetheless, the company strengthened the social-components of the ESIA and conducted a review to confirm that adverse social impacts would not be incurred by local populations, including project-related impacts related to collective grazing as identified in ESAP Action Item #2, which has been completed. Mitigation measures were determined, as necessary.
In addition to the ESIA done for each specific project in MDA, the Ma’an Development Company commissioned a consultant (Bitar Consultants) to conduct a Rapid Environment Assessment (REA) for the entire Ma’an Development Area (MDA). The REA included stakeholder engagement and consultation, provided comprehensive performance requirements to ensure environmental protection and a road map for environmental permitting for any projects planned in the MDA. It also provided recommended mitigation measures for any potential impacts to occur during the preparation, construction, operation and decommissioning phases for the entire MDA. The ESIA was prepared in alignment with this overall assessment.
The ESIA contains an ESMP for the construction and the operations phases of the project. Management actions includes solid waste management, soil management, dust control, wastewater disposal, occupational H&S, amongst other topics. The ESMP includes monitoring actions, frequency of monitoring, performance indicators and the responsible entity.
The EPC contractor / O&M provider ensured that staff understands all requirements, measures, and protocols stipulated within the ESMP. It was represented to MIGA that all E&S personnel involved had the required qualifications to carry out their duties, or, where necessary, suitable training was arranged to be undertaken.
The E&S management team consists of one on-site E&S focal point for the construction and one E&S focal point during operation based off-site, as identified in ESAP Action Item # 3, which has now been completed. Additional E&S support staff was procured during the construction phase to ensure that environmental management practices are carried out. A community liaison officer was retained for both the construction and operations phase and reports to the E&S focal point. The community liaison officer will develop and implement a local benefits community action plan and will manage the community grievance mechanism. The E&S focal point will be responsible for the implementation of the ESMP, including monitoring actions.
Monitoring and Reporting
Monitoring requirements are included in the ESMP for the construction and the operations phase of the project as mentioned in the sub-section above on ‘Management Program’.
Emergency Preparedness and Response
An Emergency Preparedness and Response Plan (ERP) was required for the license issuance and was designed to be location-specific (referencing muster point, nearby emergency facilities, responsible entities on-site or in the region, etc.). Each ERP plan will follow the US National Fire Protection Association (NFPA) standard and will be developed for construction and operation phases of the project. The EPC contractor / O&M provider will provide adequate training to staff to ensure that workers on-site are familiar with the ERP.
PS2: Labor and Working Conditions
The developer employed 50 to 70 workers during construction and 3 to 5 workers during operations. Falcon developed a local hiring plan to encourage recruitment from Ma’an city.
As identified in the completed ESAP Action Item #4, Falcon put in place a Human Resources (HR) Policy and Procedures in line with MIGA’s Performance Standard 2 and with Jordanian labor law. Given the nature of the industry, the HR policy and procedures placed emphasis on the management of contractors which also applied to the EPC contractor / O&M provider and sub-contractors. The HR policy and procedures stipulated that the terms of employment, such as wages and benefits, hours of work, overtime arrangements and overtime compensation, annual and sick leave, maternity and paternity leave, vacation and holiday, were established according to national labor regulations, and would be included in employee contracts. Additional workers’ benefits for full-time operations staff will include health insurance and medical assistance, among others. Working conditions (including health, safety and security), employee termination, prohibition to employ minors, disciplinary actions, workers’ rights and obligations, employer’s rights and obligations will also referenced.
As also indicated in the completed ESAP Action Item #4, Falcon will ensure that the HR Policy and Procedures as developed by the EPC contractor / O&M provider are consistent with their own HR related documents. Jordan is a signatory to numerous international conventions and treaties. Examples relevant to labor rights include ILO Convention 98 on the Right to Organize and Collective Bargaining Convention; ILO Convention 100 on Equal Remuneration; ILO Convention 111 on Discrimination (Employment and Occupation).
In line with Performance Standard 2, the developer’s HR Policy did not impede workers from freedom of association and collective bargaining. Although Jordan is not a signatory to the ILO Convention 87 on Freedom of Association and Protection of the Right to Organize, workers were able to organize among themselves and would not be discriminated against for doing so, as is specified in the HR Policy and Procedures.
The developer is committed to avoid all forms of discrimination against its employees, based on the age, gender, sexual orientation, health, race, nationality, political opinions or religious beliefs of its counterparties. The requirements of non-discrimination and equal opportunities was extended to all contractors and subcontractors as part of contractual obligations.
The developer’s HR Policy excluded the use of any form of forced or compulsory labor, in accordance with national law and MIGA PS 2.
As indicated in the completed Action Item #5, training for direct and indirect workers would be covered in the developer’s HR procedures. Induction training on the HR Policy and Procedures and basic safety awareness training will be provided to all newly hired workers. Other types of technical skills training will be identified for staff on an as-need basis.
As indicated in the completed ESAP Action Item #6, the project developed and makes available a grievance mechanism for workers. The developer has informed the workers of the grievance mechanism, through the EPC contractor / O&M provider and otherwise, and describes how to make use of it during the induction training. The grievance mechanism is also accessible to other contractors and subcontractors performing work in core business processes of the project.
Occupational Health and Safety
Key occupational, health and safety (OHS) risks for a PV project include slips and falls, potential hazards from on-site moving machinery, heavy load lifting, exposure to electric shocks and burns. Taking into account the hot and arid project site, construction workers might be at risk of dehydration, heat exhaustion and heat stroke if not hydrated properly.
OHS issues related to construction activities were identified in the ESIA. As identified in the completed ESAP Action Item #7, the developer represented that it would ensure that the EPC contractor / O&M provider develop a site-specific OHS Procedure for the construction and operations phases of the project. The procedure was designed to be specific to the PV solar sector (in terms of industry specific hazards) and the project site.
The developer represented that the EPC contractor / O&M provider assessed and tracked its OHS performance during both construction and operations. OHS performance evaluations were carried out for employees considering lagging (or trailing / downstream) indicators and leading (or upstream) indicators. The E&S focal point recorded and tracked any OHS incidents through an incident tracker and reported on OHS performance during both construction and operation phase.
PS3: Resource Efficiency and Pollution Prevention
Given that the project involves PV rather than Concentrated Solar Power (CSP) technology, water consumption will be minimal. Water is used to rinse solar panels to remove any accumulation. The expected frequency is twice or three times a year. There are two underground water tanks for cleaning water with a storage of 500,000 liters capacity. Submersible pumps draw water from bore wells and pumps distribute water through pipes and hoses. Water is also provided to the project through MDC (through firefighting network).Wastewater is collected by septic tanks and emptied regularly based on the water consumption on the site. This is then transported to Ma’an Waste Water Treatment Plant.
During the construction phase, the EPC contractor is responsible for solid and domestic waste collection and disposal to an approved landfill facility. Both solid and hazardous waste generated by the projects during construction and operations are estimated to be minimal. Solid (paper, wood, plastic, scrap metals, glass, mud and food waste) and hazardous (absorbent material, batteries, tires, metal drums, empty chemical containers and waste oil from machinery lubricants) waste streams are segregated and volumes recorded. This will is in accordance to requirements laid out in the ESMP for waste management procedures as developed by the Client. Hazardous waste is collected by a licensed third party and disposed of in a Hazardous Waste Treatment Center (designated by the municipality of Ma’an). Hazardous materials are stored in a dedicated area; a register is maintained and Material Safety Data Sheets displayed.
In terms of carbon dioxide emissions, the project overall aims to avoid emissions that would otherwise be produced if fossil fuels were used for power generation. Assuming an energy yield of about 1950 kilowatt-hour per kilowatt-peak (kWh/kWp), this 21 MW project is expected to provide 40,950,000 kWh annually. This translates to an equivalent of 26,100 tons carbon dioxide-equivalent (CO2eq) of greenhouse gas emissions offset by the project, not accounting for the direct and indirect GHG emissions resulting during the project’s life.
During decommissioning, the developer will consider joining a PV recycling program. The ESIA covered the alternatives for this project such as importing fuel which incurs additional greenhouse gas emissions and is costly given the current shortage in the region. The PPA agreement specifies that NEPCO will apply, register and benefit from carbon credits.
PS4: Community Health, Safety and Security
The MDC is the major developer of the entire plot of area of the MDA. Under the MDC, there is a neighboring Industrial Park located around 2.5 km to the north-east of the project area. There is also a private farm located to the north-west which is also 5 km away of the project area. Under MDC there is a private university, Al-Hussein Bin Talal University, a partner in MDA with its campus located in Ma’an City, and a Skills Development Center for vocational training of skills for technicians and laborers from the local community to be later employed by the Developers of MDA Solar Park. There is a residential community in Ma’an city approximately 8 km away from the project site. While there are no neighboring communities to the MDA Solar Park to be impacted by this project, there are nomadic Bedouins that may graze through the area on occasion.
A licensed private security company was hired by the project to manage security and the MDA has its own security arrangements including a perimeter fence, controlled access, and possibly checkpoints. The licensed security provider supplies guards trained in the use of weapons and appropriate use of force. Falcon Scoping Study indicated that the contribution of the Jordanian Armed Forces in all new projects and the security of the MDA are to be part of their responsibility since it is a strategic project for Jordan. There will be coordination between the Ministry of Interior and Jordanian Armed Forces for these projects. Given the potentially volatile security situation in the region, and recent protests in Ma’an, the company represented that it will ensure that key elements of PS4 are implemented, as follows: when the developer retains a security provider to safeguard its personnel and property, and in interactions with Government forces, it will assess risks posed by its own, and Government, security arrangements to those within and outside the project site, including the residents of the nearest towns. In making such arrangements, the developer will be guided by the principles of proportionality and good international practice in relation to hiring, rules of conduct, training, equipping, and monitoring of such workers, and by applicable law. Falcon will make reasonable inquiries to ensure that those providing security are not implicated in past abuses; will train them adequately in the use of force (and where applicable, firearms), and appropriate conduct toward workers and nearby communities; and require them to act within the applicable law. Falcon will also seek to ensure that Government security personnel act in a manner consistent with these principles, on a best-efforts basis. The developer 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. These safeguards will be captured in a Security Management Plan that includes a training module for security staff, as included in the completed ESAP Action Item #8.
The project adopted the preventive security approach through building positive relations with the local community and other stakeholders via open dialogue channels via the community liaison persons who are from the local community members. Liaising with external stakeholders, especially local community is one of the management actions that was executed during the project life. The developer provided a grievance mechanism for nearby communities to express concerns about the security arrangements and acts of security personnel, as included in the completed ESAP Action Item #9.
PS8: Cultural Heritage
An archaeological survey was conducted by the Ministry of Tourism and Antiquities – Department of Antiquities on 24/12/2013 at the proposed area for the solar power projects in MDA and found that at three distinct locations there contained archeological artifacts from the Ottoman era (remains of an Ottoman camp site). One of these locations falls within the Falcon Ma’an Solar Power project site. The other two locations identified throughout the survey are located outside the boundaries of the project site. The archaeological survey recommended that 1) the Ottoman camp should be fenced without restriction of the project implementation, and 2) the project developer be obliged to inform the Ministry of Tourism and Antiquities – Directorate of Ma’an in the case more findings are observed during the construction phase. This was clearly outlined in the ESMP in the form of a Chance Finds Protocol.
If further cultural heritage is identified during construction activities, the EPC contractor will notify the supervisor of the Cultural Resources Management Office of the Department of Antiquities. If cultural heritage may potentially be damaged due to project activities, the Department of Antiquities will assess the discovered remains and may carry out an emergency salvage excavation (i.e. archaeological excavation conducted during the construction phase, which should be conducted only when an archaeological site is accidently found (chance find).
Environmental Permitting Process and Community Engagement
Falcon developed a CSR program and uses best efforts to align initiatives with neighboring PV solar companies in the Ma’an Development Area. The CSR program is used as a means to engage with the communities. CSR efforts include vocational training through the existing training facility as well as other topics directly relevant to community interests. At the time of the IFC team visit, a meeting was conducted between the sponsor and the governor in Ma’an to find means to assess the community needs as an initial step.
As identified in the completed ESAP Action Item #9, the developer used best efforts to develop a joint Stakeholder Engagement Plan (SEP) in coordination with neighboring companies, as feasible; in the absence of a collective SEP, the company developed one for its own operations in compliance with PS1. The SEP includes a stakeholder identification and analysis. It also includes the development of a grievance mechanism in collaboration with neighboring companies and the MDC, as feasible; in the absence of a collective grievance mechanism, the company developed a grievance mechanism, in compliance with PS1, for its own operations.
Some companies in the MDC are working closely with the Energy, Water and Environment Association (EDAMA), which is the local industry association that seeks sustainable solutions for energy and water independence and productivity. EDAMA is chairing the Ma’an vocational training center and is organizing the opening and job fairs. Academic engagement is the starting point due to the presence of the university in close proximity to the development area. The review of curricula to bring RE technologies into focus is being discussed. The developer used best efforts to participate in these initiatives with other developers through EDAMA and MDC.
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:
International Finance Corporation
2121 Pennsylvania Avenue NW
Washington, DC 20433 USA
Tel: 1 202 458 1973
Fax: 1 202 522 7400
Availability of Documentation
The following documentation is available electronically as PDF attachments to this ESRS at www.MIGA.org.