Globeleq Mozambique Solar Projects - Central Eléctrica de Tetereane, S.A

MIGA has been requested to provide a guarantee to cover equity/quasi equity and/or shareholder loan investments from Globeleq Africa Limited UK (“the Guarantee Holder” or “Sponsor”) (through Globeleq Mozambique Renewable Holdings (PTY) Ltd, as intermediate investor) to the Cuamba Solar Power project (the Project) for a period of up to twenty years. Further information on the proposed MIGA guarantee is available in the Summary of Proposed Guarantee.  

The Cuamba Solar Project is an operational solar photovoltaic (PV) plant located in Cuamba District, Niassa Province in Northern Mozambique. The Project comprises a solar PV facility with a generation capacity of 15 Megawatt alternative current (MWac) and a battery storage facility. The Project site area is ~ 47 hectares (ha). The Project is operated by Grupo TSK Mocambique Limitada (“TSK”) on behalf of Central Eléctrica de Tetereane (“CET”), the Project Enterprise (“PE”) and has been operational since September 2023. Energy produced from the solar plant is connected to the existing Cuamba substation operated by Electricidade de Moçambique (EDM) located approximately 450 meters (m) northeast of the Project site, through an existing 33 kilovolt (kV) overhead transmission line which required the upgrade of the existing single wooden pole to a double pylon. Upgrade works were also undertaken at the Cuamba substation, including equipment upgrades and extension of the substation yard. The upgrade of the substation and of the transmission line were funded by CET sponsor and carried out by TSK. The facilities were handed over to EDM for operation and maintenance. The transmission line and Cuamba substation are out of scope of the Project and are not considered Associated Facilities to the Project during the Operations and Maintenance (O&M) phase. The Project also includes an access road of approximately 1000 m that turns off from the EDM Substation to the PV Plant. Maintenance and upkeep of the access road is the responsibility of the Cuamba District.

The Project is categorized as a Category B under MIGA’s Policy on Environmental and Social Sustainability (2013) as it includes business activities with potential limited adverse environmental or social risks and /or impacts.  

The Project is in the Operations and Maintenance (O&M) phase, key E&S risks and impacts include environmental and social management system implementation (including contractor management), management of labor and working conditions (including occupational health and safety), community health and safety, and management of solid waste including safe disposal of batteries and solar panels, supply chain risks associated with forced labor. 

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

The following key documents were reviewed by MIGA, among other documents:  

In addition to reviewing the above documents, MIGA conducted virtual due diligence from May 2023 – July 2024, including meetings with the Globeleq E&S team, MIREME (Ministry of Mineral Resources and Energy), EDM - Electricidade de Moçambique and Mozambican Ministry of Land and Environment. 

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: The Project sponsor, Globeleq, has developed an integrated management system (‘IMS’) that covers health, safety, environment, security and social (‘HSESS’) aspects. The IMS describes the system by which HSESS risks are managed and articulates the organizational requirements to implement the management system across the Globeleq portfolio for both project development and operations, including the Cuamba Project. The HSESS IMS is supported by forms and templates for its implementation (e.g. permit matrix, legislation register, document register, incident reporting form, training matrix, audit and inspection protocols) and is reviewed regularly. All Project employees and contractors are required to adhere to Globeleq’s IMS. At the Project level, CET is implementing an operations IMS documented in the HSESS Operational management plan for the O&M phase in line with the Performance Standard (PS) requirements.  

Policy: Globeleq has a corporate HSESS policy which describes its commitment to the protection of the environment and people, and the safety of its employees. The policy requires compliance with applicable laws and relevant health, safety and environmental standards. The corporate HSESS policy applies to all the operated assets, including the Cuamba Project; and is communicated to employees and other stakeholders.  The HSESS Policy includes provisions on zero tolerance for any form of abuse or exploitation, including workplace discrimination, harassment or unfair treatment based on race, color, age, sex, sexual orientation, gender reassignment, disability, religion or belief, political opinion, national extraction, or social origin nor any gender-based violence (GBV), sexual exploitation and abuse (SEA) or any form of workplace sexual harassment (SH). 

Identification of Risks and Impacts: An Environmental and Social Impact Assessment (ESIA) was undertaken in April 2015 for the Project. The ESIA covered construction and operation phases and was prepared in line with Mozambican legislation and the PS requirements. The ESIA license was obtained in November 2019. The Cuamba Project has also developed an Environmental Aspects and Impacts register as part of its operations HSESS IMS. The Environmental Aspects and Impacts register is reviewed annually and includes an assessment of the environmental impacts arising from activities undertaken by CET, their significance and control mechanisms required to address the risks. 

Management Programs: Project specific management sub-plans have been developed to support the operations HSESS IMS. These include, but are not limited to: contractor management, Stakeholder Engagement – Implementation, Stakeholder Registration and mapping, pollution prevention and control, noise management, water and wastewater management, waste management, grievance and issues redress mechanism. The sub-plans include several templates and trackers to assist with the implementation of the Project’s operations HSESS IMS. The supporting sub-plans are consistent with Good International Industry Practice (GIIP), the performance standards and relevant WBG EHS Guidelines. 

Organizational Capacity and Competency: Key E&S staff appointed include a Community Liaison Officer (CLO) which is being upskilled to a HSESS practitioner and will be responsible for the implementation of the operations HSESS IMS requirements. The CLO/ HSESS practitioner reports to the Site Manager. CET has also implemented an HSE committee which is made up of members of the operations, maintenance and administrative departments, which collectively provide a holistic view of all aspects of Cuamba solar operations and management. Additional support to the Project team is available from Globeleq’s corporate Environmental, Social and Governance (ESG) team, and Corporate Health and Safety team.  

Emergency Preparedness and Response: Emergency preparedness and response is captured in the Local Crisis Response and Fire Preparedness sub-plan. The Local Crisis Response and Fire Preparedness sub-plan considers risks related to fire emergency, significant environmental damage, force majeur event causing damage to the grid, grid outage, major systems failure, aggressive industrial action, malicious damage to the grid, criminal behavior by employee and third parties, extortion, kidnap and ransom, intrusion into office or facility, international incident, major accident at site with fatality or severe injuries and others. Emergency drills are undertaken twice a year. 

Monitoring and Review: The HSESS Operational management plan includes requirements to monitor and measure key characteristics of the plant’s operations and activities that can significantly impact HSESS, well-being of personnel or the community. The following topics are covered in the HSESS Operational management plan related to monitoring and review: (i) monitoring, measurement and evaluation of compliance; (ii) compliance obligations: legal and other to manage environmental, health and safety compliance; (iii) management system audits. In addition, the Project will be required to submit annual E&S monitoring reports to MIGA.  

Stakeholder Engagement, External Communication, and Ongoing Reporting to Affected Communities: The HSESS Operational management plan includes requirements on communication, participation and consultation, which includes internal communications, workers grievance mechanism, external communications, community grievance and issues redress mechanism. The following sub-plans have been developed in support of the HSESS Operational management plan related to stakeholder engagement: stakeholder registration and mapping, stakeholder engagement implementation, stakeholder engagement – conduct meeting. In 2024 to date, the Project undertook a total of 11 community engagements. The engagements were mainly related to the planning and implementation of community projects.   

Grievance Mechanisms: A Grievance and Issues Redress Mechanism (GRM) has been prepared and is being implemented as part of the operations HSESS IMS. The Project has not received any grievances from the local community in 2024. 

PS2:  Labor and Working Conditions 

The Project employs 18 permanent workers of which 16 are subcontracted workers. All workers are Mozambican nationals. 

Human Resources (HR) Policies and Procedures: Globeleq has an approved corporate employment and labor policy which defines its approach to managing workers and is consistent with the requirements of PS2. Human Resources is managed through Globeleq’s country office - Globeleq Energia Mozambique, which oversees HR related aspects of all Globeleq’s assets in Mozambique. The HR team has implemented the following HR policies and procedures: recruitment process, anti-corruption, Code of Business Conduct, and travel. The HR Policies and procedures are being revised and updated, including the HR handbook to align with the national labor legislation that was updated in 2023 (for implementation in 2024). The update will incorporate CET’s HSESS policy provisions related to zero tolerance (ESAP #1). The HR handbook includes among others information on employee grievance and disciplinary management, local travel, leave, employee demobilization and employee induction.  

Working Conditions and Terms of Employment: During O&M phase, workers are contracted by CET. All workers have written contracts which include working conditions and terms of employments in line with national regulations and PS 2 such as working hours, leave requirements, and remuneration and is applicable to all subcontractors. 

Protecting the Workforce:  The code of business conduct includes provisions to promote the fair-treatment, non-discrimination, and equal opportunity of workers. The Project commits to not base employment decisions on personal characteristics such as gender, race, nationality, religion, age, HIV status, sexual orientation or disability as per the corporate HSESS Policy.  

Grievance Mechanism: The worker’s grievance redress mechanism (GRM) is being revised and updated as part of the HR handbook update (ESAP #2). The GRM will apply to all project workers including those employed by sub-contractors as well as information on how to handle complaints involving GBV/SEAH such as respecting confidentially and having a female point of contact receiving GBV/SEAH grievances. 

Child and Forced labor: CET’s minimum age of employment for the Project is 18 years of age. The Project also prohibits the use of forced labor.  

Occupational Health and Safety (OHS): The Cuamba Project has developed a general Health and Safety (H&S) management sub-plan and a general H&S precautions sub-plan that incorporates occupational health and safety (OHS) measures, in line with WBG EHS guidelines in relation to activities undertaken by the Project. CET commits to provide a safe and healthy working environment. In addition, CET as also developed a contractor management sub-plan that defines the methods by which contractors will be managed on-site with respect to Health, Safety and Environmental compliance for the duration of their project / maintenance work / services. Since the start of operations there have been no fatalities, no lost time injuries and no restricted work cases. 

Workers Engaged by Third Parties: CET may hire service providers for security, cleaning and maintenance works. Globeleq will: (i) introduce compliance with labor and working conditions in line with PS 2 and national legislation in the contract templates for contractors and (ii) develop and implement a procedure for CET to monitor contractors’ labor and working conditions in line with the requirements of PS 2 and Mozambican Laws (ESAP #3). Contracted workers have access to CET’s workers grievance mechanism if not available through their own companies. 

Supply Chain: Globeleq operates group level “Common Procurement Procedures” that govern the relationship between the Group and its suppliers, and a Code of Business Conduct that specifies the Group’s commitments and expectations of its suppliers which applies to all projects including the Cuamba Project. In addition, Globeleq has a Due Diligence method in place for key suppliers since 2023. The standard general terms and conditions of purchase governing the relationship between Globeleq and its suppliers includes representations and warranties that the supplier shall comply with fundamental human rights, in particular the prohibition to use child labor or any other form of forced or compulsory labor among others in line with PS 2. Since the plant is operational, there is no need for further purchasing of panels. The current panels are in warranty. 

PS3:  Resource Efficiency and Pollution Prevention 

During O&M, the main issues relate to water use and management, waste management, and visual impacts. Potential nuisance impacts related to the broader community are expected to be limited.    

Resource Efficiency 

Energy requirements are drawn from the energy generated by the Project. At night the site control room is supplemented by energy from the grid. There is a back-up diesel generator which provides power in the event of a power outage.  

Greenhouse Gases (GHG): As this is a solar project, the GHG emissions associated with the O&M phase of the Project are minimal. Therefore, the Project will not be required to quantify and report the CO2-equivalent emissions as required under PS 3. The Project results in an avoidance of 7,100 tCO2eq/year. 

Water Consumption: Water for the Project is supplied to site via a municipal line. The Project needs approximately 40 m3 of water per month during O&M for domestic purposes (drinking, flushing of toilets and cleaning of floors).  The Cuamba Project is implementing a water and wastewater management procedure for operations. The procedure adopts a holistic view to water resource management and addresses water consumption, quality and pollution. CET will develop a water balance diagram to reflect the site’s water use and identify any potential water losses/ leaks (ESAP #4). 

Pollution Prevention 

The Cuamba Project has developed a pollution prevention and control procedure that describes the minimum requirements to manage potential pollutant emissions, that could occur in case of waste and hazmat mismanagement, or during environmental incidents, such as spills. This includes: (i) actions and measures to eliminate or avoid pollutant release; (ii) pollution prevention measures; (iii) good housekeeping; (iv) secondary containment and (v) drainage systems; (vi) effluent discharges; (vii) noise pollution; (viii) employee training; (ix) spill clean-up and disposal and (x) incident reporting. 

Air and noise emissions: There are no significant sources of air and noise at the plant. The primary sources of air and noise emissions are from vehicles and the standby generator. The standby generator has silencers installed to attenuate noise levels.  

Wastes: Waste generation during O&M is minimal; the project generates approximately 2 tons (t) of non-hazardous waste and less than 0.01 tons of hazardous waste a year. Non-hazardous waste comprises mainly organic, paper and packaging waste and hazardous waste is mainly used oil and oil-contaminated. Wastes are segregated on site and disposed of by a licensed waste management company. Wastewater from the sanitary facilities and cleaning activities is channeled to the septic tank and also disposed though a licensed waste management company. The Cuamba Project is implementing a waste management procedure supported by checklist and templates as attachments. Per ESAP #5, the waste management templates will be revised and updated to reflect waste generation as a result of CET’s activities. 

Hazardous Materials Management: The following hazardous materials are used during O&M: (i) grease in the solar tracking system; and (ii) domestic cleaning products. These chemicals are stored in small quantities on site. Sealed transformer units are in use and are replaced as a whole if needed. No transformer oil is drained on site.  The Pollution Prevention and Control sub-plan includes measures to minimize impacts in case of incidents. Handling of hazardous materials is captured in the Work Permits, Special Permits and Lock out tag out procedure. 

Pesticide Use and Management: The use of pesticides and herbicides is not anticipated for the Project.   

PS4:  Community Health, Safety and Security 

Community Health and Safety: The Project site is fenced and public access to the plant is prevented. Some households are located adjacent to the project fence. Traffic impacts are reduced compared to the construction phase as vehicles are only required to transport employees to work daily. Traffic may be slightly increased during maintenance activities. Safe usage of vehicles by employees is captured in the General HSESS Instruction Procedure.  

Security Personnel:  Site security is managed by private security who provide unarmed security personnel trained in the International Code of Conduct Association and the Voluntary Principles on Security and Human Rights. CET manages security in line with the access control procedure and oversees the security contractor in line with the contractor management procedure and site access management procedure. The security related procedures will be revised and updated to incorporate a security risk assessment and mitigation measures in relation to risks posed by its security arrangements to those within and outside the Project site (ESAP #6). The site manager is responsible to oversee the activities of the third-party security forces.