Globeleq Mozambique Solar Projects - Central Solar de Mocuba

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”) (through Globeleq Mozambique Renewable Holdings (PTY) Ltd, as intermediate investor) to support CESOM - Central Solar de Mocuba, S.A. (“CESOM” or the “Project Enterprise”), an operational solar photovoltaic (PV) plant located in Mocuba in Mozambique (“Mocuba’ or “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 Project became operational in August 2019 and was initially developed by Scatec ASA (Scatec) and the Norwegian Investment Fund for Developing Countries (Norfund). Scatec was also the Engineering, Procurement and Construction (EPC) contractor for CESOM. In July 2023, Globeleq entered share purchase agreements with Scatec and Norfund to acquire their shares in CESOM. The acquisition was closed in December 2023.The Project is operated by CESOM.   

The Project consists of a 40 megawatt (MW) operational solar PV plant located in Mocuba, Zambezia Province in Centre-Northern Mozambique. The Project was constructed in August 2019 and has since been operational. The Project occupies approximately 70 hectare (ha) of the 126 ha site, a 740 meter (m) 33 kilovolt (kV) transmission line to the Mocuba substation which is maintained by CESOM and a 6 kilometer (km) gravel road connecting the project site to the main road (R479), maintained by the National Roads Administration (ANE). There are residential dwellings along the main Road R479 and adjacent to the Mocuba substation. The Project has also constructed two bridges to facilitate access to replacement land for Project Affected Persons (PAPs) in the Cuba area. The two bridges are located in the Munhamade Administrative Post in the southern District of Lugela and have been handed over to the District Authorities. 

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: Globeleq has a corporate Health, Safety, Environment, Social and Security (HSESS) Integrated Management System (IMS) in place in line with PS requirements. The HSESS IMS includes policies, plans, manuals and procedures broadly aligned with ISO 14001. 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 project development, construction, and operations, and is reviewed regularly. All Project employees and contractors are required to adhere to these procedures. The operations documented management system includes a Health, Safety, Environment, Social, and Security Operational Management Plan (HSESS OMP), which includes but is not limited to risk management, performance evaluation, communication and consultation, competency management and others. As part  of the HSESS OMP implementation, Project specific HSESS risk assessments, objectives and targets, an HSESS monitoring register and competency matrix, amongst other will be developed. In addition to the HSESS OMP, a set of HSESS procedures are also being adopted, and these include incident reporting, emergency response, waste & water management among others (ESAP #1). 

Policy: Globeleq has a corporate Health, Safety, Environment, Social and Security (HSESS) policy which describes the company’s 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 CESOM; 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: In line with the Mozambican environmental regulations, a Simplified Environmental Study (SES) was conducted in October 2015 for the Project as required for projects categorized as ‘category B’ in accordance with Decree 45/2004 which regulates the process for environmental impact assessments. An Environmental Management Plan (EMP) was prepared alongside the SES and submitted to the Zambezia Provincial Directorate of Environmental Coordination (Direcção Provincial para a Coordenação da Acção Ambiental da Zambezia). The SES was approved in November 2015 and license issued in 2017, valid for five years. A renewed license was issued in December 2022 and is due for renewal in December 2027. The SES covered the project design, construction, operations and decommissioning.  

Management Programs: Project-specific HSESS procedures mentioned above, will be implemented on CESOM to support the operational HSESS IMS as part of the onboarding process carried out by Globeleq after the acquisition of an asset (ESAP #2), these include but are not limited to the following procedures: (i) The Local Crisis Response and Fire Preparedness, (ii) community health, safety, and security, (iii) water resource management; (iv) waste management; (v) pollution prevention and control (vi) occupational health and safety; (vii) Stakeholder Engagement. 

Organizational Capacity and Competency: CESOM has retained the Community Liaison Officer (CLO) from the construction phase and is upskilling him to a HSESS practitioner. He is responsible for overseeing the interaction with the affected communities and other stakeholders and reports to the Site Manager. The CLO is directly supported by the Globeleq Group Environmental, Social and Governance (ESG) Manager and Group Health and Safety (H&S) Manager to onboard Globeleq’s HSESS IMS and joins existing HSESS Forums where the wider Globeleq HSESS team, shares challenges, lessons learned and organizes group initiatives.   

Emergency Preparedness and Response: The Local Crisis Response and Fire Preparedness sub-plan template  incorporates emergency preparedness and response and 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.  The Local Crisis Response and Fire Preparedness procedure will be implemented by CESOM (ESAP #2). Emergency drills are undertaken twice a year. 

Monitoring and Review: During O&M parameters that require monitoring in line with local regulations will be monitored, as defined in (i) asset monitoring matrix (ii) compliance obligations: legal and other to manage environmental, health and safety compliance; (iii) management system audits (ESAP #2). Periodic safety, health and environment audits/inspections will be conducted by CESOM. For the O&M phase, CESOM has defined key performance indicators (KPIs) in order to monitor HSESS performance including incidents and grievances, resource consumption and Greenhouse gas (GHG) emissions, stakeholder engagements and socio-economic develop projects.  

Stakeholder Engagement, External Communication, and Ongoing Reporting to Affected Communities: Consultation with authorities and village representatives is carried out through the CLO who has been in place since construction and regularly visits the administrative authorities, village chiefs and representatives of the affected villages surrounding the Project. A Stakeholder Engagement Plan (SEP) for the Project was developed in November 2019. The SEP includes information on previous stakeholder consultations at the national, regional and community levels since 2015. The SEP will be updated for the O&M phase in line with Globeleq’s HSSES IMS and PS 1 requirement including a program for consultation with those affected, particularly those directly affected by the land acquisition and who are most directly affected by the Project (ESAP #2). Consultations were also undertaken during the scoping phase and SES phase.  Records of these engagements are included in the SES Report.  

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 35 workers during the O&M phase, currently all are Mozambican nationals, and most are from the surrounding area. CESOM has 5 full time employees dedicated to the Project: Site Manager, CLO an administrator and three solar technicians. There are also 15 contracted third-party security personnel and 15 contracted third-party workers for cleaning, vegetation control and housekeeping. 

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. HR 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 update, including the HR handbook to align with the national labor legislation that was updated in 2023 (for implementation in 2024).  The update will incorporate CESOM’s HSESS policy provisions related to zero tolerance and will include information regarding handling of related complaints  (ESAP #3). The HR handbook includes among others information on employee grievance and disciplinary management, local travel, leave, employee demobilization and employee induction.  

Working Conditions and Management of Worker Relationship: During O&M phase, workers are contracted by CESOM. 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 sub-contractors.  

Protecting the Work Force: Contracts are between CESOM, the employee, contractor or sub-contractor. CESOM allows freedom of association in line PS 2 requirements. Globeleq is committed to the principles of employment equity, equal opportunities and empowerment, regardless of gender, race, color or creed as per the corporate HSESS Policy.  

Occupational Health and Safety: CESOM commits to provide a safe and healthy working environment. Occupational health and safety (OHS) is covered in the General HSESS Instructions and General H&S precautions procedures which among others includes the requirements for CESOM to prepare and implement: (i) site-specific hazard and risk assessment; (ii) an OHS risk register which will document identified hazards, existing controls and residual risk; (ii) safe work procedures for certain work activities. Per ESAP #4, CESOM will revise and update the attachments in relation to the General HSESS Instructions and General H&S precautions procedures to be Project specific. A contractor management sub-plan is also in place 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.  

Workers Engaged by Third Parties: During the O&M phase, CESOM contracts third-party workers for security, cleaning and maintenance roles. 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 CESOM to monitor contractors’ labor and working conditions in line with the requirements of PS 2 and Mozambican Laws, including consideration for grievance mechanisms for subcontractors and fair working conditions (ESAP #5). 

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 Mocuba 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. 

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 during the O&M phase related to the broader community are expected to be limited.  

Resource Efficiency: During operations, the energy supply is 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 on-site for the control rooms. Water consumption will be limited during operations; water will only be required for domestic purposes. It is estimated that 3500 liters of water will be required per week. Water for the Project is sourced locally from a borehole. The water abstraction rate is line with the water permit requirements. Globeleq has 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. CESOM will implement the water and wastewater management procedure, which includes a water balance diagram to reflect the site’s water use and identify any potential water losses/ leaks (ESAP #6). 

Greenhouse Gases (GHG): As this is a solar project, the GHG emissions associated with the operations phase of the project are minimal. The GHG emissions associated with the combustion of fossil fuels for power generation and transportation during construction will be limited and temporary. Therefore, the project will not be required to quantify and report the CO2-equivalent emissions as required under this Performance Standard. The Project results in an avoidance of 13,400 tCO2eq/year. 

Pollution Prevention: The pollution prevention and control procedure 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. The baseline noise assessment conducted during the SES indicated that there were no major noise-emitting sources and no sensitive receptors within 500m of the project site which is still the case.  

Wastes: A registered and certified local waste management company is responsible for collection and management of the waste products from the Project site. Collection is done twice a month since not much waste is generated. Domestic waste is collected in drums and taken to the district landfill.  E-Waste, and specifically the damaged or broken panels, is stored on site in the lay-down area. CESOM is engaging with potential service providers regarding recycling of solar panels. Low quantities of hazardous waste are currently stored on site until disposal approval is granted from the local municipality. The only hazardous waste produced on site currently are used air fresheners and mosquito sprays; however, oil and oil-contaminated materials are also expected during the O&M phase. Wastewater from the sanitary facilities and cleaning activities is channeled to an overflow system designed in a way that solids settle, and bacteria removes hazardous compounds before seeping into soil. CESOM will replace the overflow system with a mobile package treatment plant. The waste management procedure will be implemented to establish improved waste management (ESAP #7). 

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.   

Pesticide Use and Management: The use of pesticides and herbicides is not anticipated for the Project.  Weed control in the substation yard is conducted manually. 

PS4:  Community Health, Safety and Security   

Community Health and Safety: The site is fenced and public access to the plant is prevented. Traffic impacts are reduced compared to the construction phase as vehicles are only required to transport employees to work on a daily basis. If required, equipment for routine maintenance are also transported to site by road.  

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. CESOM 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 #8). 

PS 5: Land Acquisition and Involuntary Resettlement 

In December 2015, CESOM was allocated 126 ha of government-owned land in Mocuba, for the construction and operation of the Project. As per the Land Law of Mozambique, CESOM applied and received a permanent DUAT (Direito do Uso e Aproveitamento da Terra) license in December 2020. 

Compensation and Benefits for Displaced Persons: The land allocated for the Project site is 13 km from the Mocuba city centre and within the Special Economic Zone established by the Government of Mozambique. Economic displacement of 215 households (223 Project Affected Persons (PAPs)) from Mocuba town and surrounding villages, took place December 2016 with the loss of crops, trees, and physical structures associated with farming (two wells and a shed). The key activity on the land was subsistence farming, as well as harvesting from fruit trees of various species.  

The Project developed a Simplified Land Use and Compensation Plan (SLUCP) and a Livelihood Restoration Plan (LRP), undertaking a compensation process that aligned with MIGA PS 5 requirements and Mozambican legislation. As per the SLUCP, all 223 PAPs were compensated for their impacted crops and provided replacement land with land title (DUAT). An additional group of the 223 PAPs, 55 elderly, widowed and disabled PAPs were identified and categorized as “most vulnerable”. In addition to receiving compensation packages, this group was offered training in establishing either micro enterprises or micro mills which was completed in the last quarter of 2019. Additional compensation in the form of supplementary food was provided where delays in alternate land, low productivity because of top-soil disturbance, or accessing electricity to mills had undermined food security. 

Replacement and Livelihood Restoration Planning and Implementation: As per the SLUCP and LRP, the replacement land was identified and allocated by the Mocuba District government at Igaru approximately 3 km from the plant and Medhatube approximately 10 km from the plant. Vulnerable PAPs were given priority relocation to Medhatube, as it was closer to the local village. During the compensation process, the host communities at the Igaru site rejected receiving the remaining 168 PAPs and as such, the site was found to be unsuitable. The Project, along with District and Provincial government were then tasked with finding an alternative replacement land solution. This resulted in delays until government land was secured and purchased by the Project in 2017. The land, Cuba located in Lugela District, was 17 km away from the PAP’s original land pockets, however PAPs accepted this as the land was more fertile and nearly twice the size.  

Implementation of the LRP was undertaken between October 2016 and April 2018. The primary goal of the LRP was to reduce economic vulnerability of PAPs. The LRP was implemented through three core programmes: (i) agricultural training to promote food security; (ii) the introduction of a savings scheme; and (iii) financial training for members of the local community. Monitoring of the LRP implementation was conducted in May 2022 in preparation for an LRP Close Out Audit, the findings were that the Project was not ready for the LRP close out audit as limited formal monitoring had been undertaken by Scatec since 2019. As a result, CESOM will be undertaking (i) additional monitoring of livelihood restoration    and (ii) LRP close out audit and corrective action plan (if needed) (ESAP #9).   

The Project provided bicycles to PAPs developed shelters and built two bridges to reduce travel time, distance and facilitate access to Cuba replacement land. A further 113 PAPs were affected temporarily by the widening of the road to facilitate access to the bridge construction site, and these PAPs were compensated for temporary loss of access to land in September 2018. Construction of the bridges was completed in October 2019 and the bridges were handed over to the local authority for management. In 2021, after a cyclone event, the bridge was damaged. The local authority requested support from CESOM to repair the bridge which has now been approved by CESOM as a Socio-Economic Development (SED) project for 2024. A water borehole that was installed in 2018 was also impacted due in 2022. The equipment replacement is also a SED project for 2024. 

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