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
Status: Due Diligence
MIGA has been requested to provide guarantees covering Investec Bank Limited’s (“Investec”) non-shareholder loans and Mettle Solar Investments Pty Lt (“Mettle Solar”) equity investments into the project enterprise (Metdecci Energy Investments Pty Ltd.) (“Metdecci”), which owns and operates the Karibib photovoltaic (PV) solar Project (hereafter referred to as “the Project”) just outside of Karibib town in the Erongo region of western Namibia. Project construction started in 2016, and commercial operation date was 7 March 2017, whereas the Operation and Maintenance Agreement (O&M) became effective on 1 March 2017.
The Project was awarded through Namibia’s Renewable Energy Feed in Tariff (REFIT) Program, which encourages investment in renewable energy projects up to a maximum of 5 MW per project. As of August 2018, 14 independent power producers have a signed a PPA among 27 shortlisted bidders.
The Project entails the operation and maintenance of a 5 MW PV solar energy facility. The electricity output of the Project will be sold to Namibia Power Corporation Limited (“NamPower”) under 25-years Power Purchase Agreements (“PPA”). The Project is located on 6 ha of land within a 15.2 ha site identified for solar development. The site is approximately 1 km from the NamPower Karibib substation in Karibib town, Erongo. The Project is connected to the substation via a 900 m overhead 11 kV transmission line, which was constructed as part of the Project, and is now owned and operated by NamPower.
The Project site, which was previously vacant and used only intermittently for livestock grazing, is surrounded by small holdings, cemetery and undeveloped townlands. Prior to development, the site habitat, which was modified by grazing activity, was tree and shrub savannah habitat characterized by open grasslands dotted with acacia trees. The site, which was identified by Metdecci, and approved by the Karibib Town Council, was selected due to proximity to the NamPower substation and national road B2; availability of water; and limited community land use.
An O&M contractor, HopSol Africa (Pty) Ltd., was engaged in March 2017 to operate the plant. HopSol was first company to develop and operate a solar PV plant in the country and is the market leader with around 70-80% market share. The O&M contractor is responsible for online monitoring of the solar PV installation; quarterly mechanical and electrical checks; 24/7 security of the plant; vegetation clearance as required for operation and security; cleaning of the solar array; and provision of a monthly yield report. The O&M contractor attends to the cleaning of the site and the solar panels. The operation is fully automated with data from the plant monitored directly at the company’s headquarters (HQ) in Windhoek. Consequently, there is no need for any onsite staff other than security guards that operate on 2x12 hour shifts. On behalf of HopSol, the owner of the security company, who lives close by to the plant, also acts as a caretaker/prime responder to any incidents and makes occasional site visits.
This Project is Category B according to MIGA’s Policy on Environmental and Social Sustainability (2013), because potential adverse environmental or social risks and/or impacts are limited, few in numbers, site-specific, largely reversible and readily addressed through mitigation measures. Key E&S risks and impacts are expected to be occupational and community health and safety, water consumption, dust generation and hazardous waste management.
While all Performance Standards (PS) are applicable to this Project, our current information indicates that 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
The land for the Project is owned by the Karibib Town Council and was leased to the Project via a willing lessor – willing lessee agreement in December 2016 for a period of 25 years. Prior to development of the Project, the land was leased to local farmers for livestock grazing. There is sufficient land for livestock grazing in the area around the Project, and the farmers have moved grazing activity to the other lands surrounding the Project. As a result, PS 5: Land Acquisition and Involuntary resettlement does not apply.
The Project is located in a mixed tree and shrub savannah habitat, which has been modified by grazing. Some shrubs and smaller trees, all of which are common species, were removed for the Project. No further land clearance is expected for operations. The EIA identified one locally protected shrub species was identified, Parkinsonia Africana, which is widely disbursed in the region. The Project Area does not have unique or important habitat for fauna species. While the risk to avian species was determined to be low, the 900 m transmission line was buried to avoid any potential impact on birds. As the potential impact of the Project on biodiversity and living natural resources is low, PS 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources does not apply.
There are no Indigenous Peoples or cultural heritage sites on the land, therefore PS 7: Indigenous Peoples and PS 8: Cultural Heritage do not apply.
World Bank Group’s General Environmental, Health and Safety Guidelines as well as the sector specific guideline for Electric Power Transmission and Distribution applies to the Project.
MIGA reviewed the following documentation:
- Karibib Solar Park – Operations Report. June 2018; August 2018; January 2019
- Environmental Clearance Certificate. Ministry of Environment and Tourism. July 3, 2018
- Operation and Maintenance Services Contract. March 2017
- Environmental Impact Assessment. Proposed Karibib 5 MW Solar PV Plant and its Associated Transmission Line to the NamPower Karibib Distribution Substation. July 2015
- Environmental Management Plan for the Construction and Operational Phase. Proposed Karibib 5 MW Solar PV Plant and its Associated Transmission Line to the NamPower Karibib Distribution Substation. July 2015
- HopSol Documents: H&S Policy; HSSE Performance Management System; HSSE Plan; Staff Training and Development Program
A site visit to the facility was conducted on May 1, 2019. This included a tour of the site and meetings with the Project sponsor, O&M contractor and the security sub-contractor.
MIGA’s due diligence review considered the environmental and social 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 period, are summarized in the paragraphs that follow and in the Environmental and Social 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 Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts
Environmental and Social Assessment:
An Environmental Impact Assessment (EIA) was undertaken for the Project by Matrix Consulting Services. The EIA, which included an Environmental Management Plan (EMP), was submitted to the Ministry of Environment and Tourism in July 2015, and the Ministry provided an Environmental Clearance Certificate (ECC) for the Project on September 11, 2015. The ECC was valid for a period of 3 years, and therefore Metdecci applied for and received an updated ECC in July 2018. The updated ECC indicates the Project EMP complies with the original ECC, and requires Project monitoring to be undertaken as per the EMP. The EIA adequately identifies the potential risks and impacts of the proposed Project and the EMP provides a framework for managing the identified impacts; however, there are some gaps (i.e. potential impact of water consumption). Identified gaps have been compiled into an ESAP, which will be included in the Contract of Guarantee. Cumulative impacts associated with the Project and other nearby developments were considered, were mostly related to the Project construction phase (e.g. traffic, noise).
Management Program and Monitoring:
As above, an EMP for both the construction and operations phase was developed as part of the EIA process. Metdecci is ultimately responsible for environmental and social management during operations; however, the O&M contractor is responsible for day-to-day implementation of the EMP.
The O&M contractor has an Environment, Health and Safety Management System (EHSMS) in place for operations. The EHSMS includes the EMP, Emergency Preparedness and Response Plan (EPRP) and occupational health and safety (OHS) plans and procedures. The O&M contractor is responsible for developing regular reports for Metdecci, which are also submitted to the local authorities. Annual reports will be developed and submitted to MIGA.
Emergency Preparedness and Response
An EPRP has been developed as part of the operations EHSMS. The EPRP includes identification of assembly points, and description of training and drills to be carried out regularly. Should there be any deviation in performance of the inverters (due to for example a burn-out/short, fire, lightning), this is immediately notified with error messages sent by SMS to HQ. Thus, a response can be taken quickly.
PS2: Labor and Working Conditions
The O&M Contractor employs 4 people full-time for the Project (at HQ); and the panel cleaning sub-contractor employs 12 people to undertake regular cleaning of the solar array (typically 3 times per year). There is also a security sub-contractor, which has 2 people based at site. The O&M contractor staff is based in Windhoek and monitors the Project remotely with quarterly visits to the site and ad hoc visits as needed.
The O&M contractor has a Human Resources (HR) Policy, which will need to be updated to ensure compliance with PS 2 (ESAP Action). The updated HR Policy will include commitments relating to: child and forced labor; non-discrimination and equal opportunity; workers organizations; wages, benefits and conditions of work; non-employee workers; employee grievance redress. In Namibia, the legal age for work is 18 years and the labor law requires that children under 18 should not be involved in harmful work. The Project will ensure that no person under the age of 18 years will be employed to work on the construction or operations of the Projects. The O&M contractor will be required to develop HR procedures for the operations phase in line with national law and MIGA’s requirements. The HR Policy and procedures will be communicated to all new employees during an induction process.
There is no worker accommodation on site during the operations phase.
Occupational Health and Safety: The EIA includes a brief description of OHS risks and impacts during construction, operations, and decommissioning, and provides a series of preventive measures. The main risks and impacts during operations include heat exposure, electrocution and potential for fires and/or explosions resulting from ignition of flammable materials or gases. As above, the O&M contractor has an EHSMS in place for the Project. Training is provided for every employee as necessary depending on their job duties in accordance with HopSol’s ‘Staff Development and Training Program’. Personal protective equipment (PPE) is supplied to all staff, and all staff are required to wear appropriate PPE when on site. HopSol has trained first aiders and fire wardens..
PS3: Resource Efficiency and Pollution Prevention
GHG Emissions: The Project is expected to have a positive environmental impact in terms of GHG emissions as it will provide a renewable source of electric power and will build the capacity of Namibian power generation which relies heavily on coal-based energy imports from its neighboring countries. It is anticipated that the Project will generate 13,000 MWh per year, which will avoid approximately 12,750 tonnes of CO2-equivalent (tCO2e) per year, resulting in a total of approximately 318,000 tCO2e over the lifetime of the project.
Water Consumption: The Projects water will be supplied primarily by groundwater. There are 7 existing boreholes located within a 2 km radius of the Project. During operations, water will be used for sanitary purposes as well as for solar panel cleaning. The panel cleaning operation uses between 8-9 m3 per clean. The EMP will be updated to include water management measures, including measures to encourage water use efficiency (ESAP Action).
Pollution Prevention: During operations, the solar plant does not generate any noise or air emissions. Electricity is provided by the municipality and there is a battery back-up system to provide power to the controls.
Wastes: During operations, only minimal waste is generated, which is primarily domestic solid waste. All wastes are properly separated, contained and collected by the local authority. Recycling, waste avoidance and minimization is carried out as far as is practicable. Waste management measures are incorporated into the Project EHS procedures.
During decommissioning, waste will consist of used panels, metals, used oil, and concrete. A decommissioning waste management plan will be developed by the Project Sponsor prior to decommissioning (ESAP Action).
Hazardous Materials Management: Hazardous materials are stored in designated areas within secondary containment. Vegetation control for regular maintenance is carried out manually without any pesticide use. Broken solar panels will be stored and then returned to the vendor for recycling.
PS4: Community Health, Safety and Security
Community Health and Safety: The Project is near Karibib Town in Erongo. There are no households or buildings, aside from the NamPower substation, within 1 km of the Project site. During operations, potential community health and safety risks are limited to accidents (e.g. electrocution) associated with unauthorized access to the Project site and transmission line. To prevent unauthorized access, the site is fully surrounded by an inner electrified fence and an outer security fence protected with razor wire. There are closed-circuit television (CCTV) cameras and an alarm system installed. The CCTV and alarm system are remotely monitored by the O&M contractor 24 hours per day, 7 days per week (24/7).
Security arrangements: As above, the O&M contractor has engaged a local sub-contractor to provide security to the site. Two unarmed security guards are based on site 24/7.
As indicated under PS 1, an ECC was provided to the Project in 2015, which allowed construction to commence. Prior the expiry of the ECC (September 2018), the Project submitted the operations Environmental Management Plan and other required information to obtain a new ECC. The new ECC was received in July 2018 and is valid until July 2021. The conditions of the ECC include implementation of the EMP and monitoring as per the EMP. Representatives of the Ministry of Environment and Tourism visit the Project if needed to monitor compliance with Namibian law and the Project reports to the Ministry every six months.
Community consultation activities were undertaken during the ESIA process in 2015. Consultation included public meetings and publication of Project information in local newspapers, which included an email address to solicit feedback from ‘Interested and Affected Parties’ (I&APs). The ESIA summarizes the results of the consultation and provides, as an appendix, records of feedback received via the Project e-mail address. Issues raised by I&APs during the meetings and in e-mails included employment opportunities; distribution of Project benefits; potential impact on terrestrial fauna and safety of the plant.
While there is no formal stakeholder engagement plan (SEP) in place, grievances can be raised through the local municipality or with the security contractor at site. No grievances have been raised thus far. This was confirmed (meeting on May 3, 2019) by the Ministry of Environment and Tourism. Metdecci will also post a sign at the site providing information on how to contact Metdecci to provide comments and express concerns. The Project will prepare a SEP to formalize documentation and response to any comments / concerns raised (ESAP Action).
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
- Environmental Impact Assessment. Proposed Karibib 5 MW Solar PV Plant and its Associated Transmission Line to the NamPower Karibib Distribution Substation. July 2015
- Environmental Management Plan for the Construction and Operational Phase. Proposed Karibib 5 MW Solar PV Plant and its Associated Transmission Line to the NamPower Karibib Distribution Substation. July 2015.
- Health, Safety & Environmental Plan. HopSol. November 2018
The above listed documentation is available electronically as PDF attachments to this ESRS at . It is also available for viewing at the following locations:
HopSol Africa (Pty) Ltd
5 Von Braun Street
+264 61 255 948